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HomeMy WebLinkAbout1978-08-01; City Council; 3481-17; Plaza Camino Real Shopping Center Expansiont CITY OF CARLSBAD Initial: Dept. Hd. DATE: nugllst. 1 1979 C. Atty.va - DEPARTMENT: City Attorney C. Mgr, Subject: SUBORDINATION AGREEMENT: AND GRANT OF PARKING EASEMENTS PLAZA CAMINO REAL EXPANSION -- AMENDMENT OF DEED CC&R's; Statement of the Matter The City Attorney has been carrying on extensive negotiations in regards to the legal arrangements necessary to accomplish the Plaza Camino Real Expansion. Although not contemplated by our basic Agreement, it is recommended that the Council approve the document entitled "Amendment of Deed Covenants, Conditions, Restrictions and Reservations; Subordination Agreement; and Grant of Parking Easements." The document is on file with the City Clerk and is incorporated by reference herein. A memorandum from the City Attorney explaining the matter in detail is attached. Also attached is the resolution approving the amendment and authorizing its execution. Exhibits 1. Memorandum from City Attorney to 2. Resolution No. 5r4! . July 26, 1978. Recommendation Mayor and City Council, dated If the City Council concurs, your ac-ion is to adopt Resolution No. .<r 41 Council action 8-1-78 The matter was continued LO an adjourned meeting to be held August 3, 1978. 8-3-78 Resolution #5501 was adopted, approving and authorizing execution of amendment of deed covenants, conditions, restricitions an d reservations; subordination agreement; and grant of parking easements. MEMORANDUM DATE : TO : FROM: SUBJECT: Pursuant with May July 26, 1978 Mayor and City Council City Attorney Amendment of Deed Covenants, Conditions, Restrictions and Reservations; Subordination Agreement; and Grant of Parking Easements to Council direction, your Attorney has been negotiating Company in an effort to reach agreement on the various legal documents necessary to accomplish the Plaza Camino Real expansion. As a result of those negotiations it has been agreed that the documents should include an Amendment of Deed Covenants, Conditions, Restrictions and Reservations; Subordination Agree- ment; and Grant of Parking Easements. Since this document is not contemplated by our Basic Agreement for the Center's expansion, some explanation of its genesis is in order. In taking an overview of the arrangements for the Center's expansion, it seemed to me that it would be in everyone's best interest to place the existing parking lot and the new parking lot under a single set of documents. That objective was recognized in the Basic Agreement which provides for the negotiation of a new Operating Agreement for the parking lot which will cover the new lot and supersede the old agreement for the existing lot. In my opinion, it was also in the City's interest to have the parking lot under the same form of Grant Deed. There are some matters in the Grant Deed for the existing lot which are not favorable to the City. We were able to reach agreement with the May Company's representative on the form of a grant deed for the new lot and they were agreeable to amending the Deed for the existing lot to make the terms the same. During the course of these negotiations May Company indicated that there were some aspects of the initial Center development which they also wished to change. The existing lot was trans- ferred to the Parking Authority subject to the original REA for the Center. The Stores have now agreed on an Amended and Restated REA which will cover the entire expanded Shopping Center. They wanted to have the entire parking lot subject to that document and asked us to take title to the new lot and to subordinate the existing lot to the new REA. Mayor and City Council -2- July 26, 1978 The primary effect of the subordination will be to make the Parking Authority and the City's ownership of the existing parking lot subject to all the terms and conditions of the REA. The REA is the most important document in regards to the Shopping Center. It sets forth in detailed fashion all of the respective rights and obligations of the parties involved in the Center. It also details every aspect of the Shopping Center: how it is to be built, what it will look like, how it is to be operated, etc. Much of it relates to matters solely of concern to the Stores. However, there are extensive sections dealing with the operation of the parking lot. At one point in the negotiations Bond Counsel and I were of the view that the REA was inconsistent on a number of points with our understanding of how the parking lot was to be owned and operated as set forth in the Grant Deed and Operating Agreement. However, after an extensive series of negotiations and compro- mises on both sides, we are now of the opinion that the substance of the inconsistencies has been removed. The May Company and the Stores, at our request, have revised more than forty pages of the REA. In addition, provisions have been added to make clear that the Shopping Center must be constructed in accord- ance with the Precise Plan as approved by the City Council and that the parking lot must be operated in accordance with the Operating Agreement between the City, Parking Authority and the Developer. Exhibit "C" to the REA, which details the Shopping Center plan, may be at variance in certain respects with the Precise Plan to be placed before the Council. If the Subordination is approved, I will assume that the Council has directed me to withhold the executed original Subordination from the escrow until steps have Seen taken to revise Exhibit "C" in accordance with the Precise Plan as it may be approved by the Council. The Council should satisfy itself that there is nothing in the REA in regards to the parking lot or the Shopping Center which causes them any concern. The REA, as do all the documents, reflects a series of compromises on a number of policy points. I don't think it is useful to discuss them individually. The documents are consistent with the basic premise that the major Stores in the Shopping Center have a primary interest in the effective operation of the parking lot and that we may not make any changes in the lot or its operation without securing their approval. The Council may also want to look at Exhibit "E" to the REA which contains some rules governing the conduct of the public while on the parking lot. Mayor and City Council -3- July 26, 1978 Section 1 of the document, which we have jointly prepared, amends the Grant Deed for the existing parking lot to make all of the operative terms consistent with the form of the Grant Deed we have negotiated for the new parking lot. While it does not change the substance of the structure of the transaction, it does remove some items which, in my opinion, were not favorable to the City. It also gives the Developer the right to grant certain easements to other parties. Section 2 of the document accomplishes the subordination of the existing parking lot to the Restated and Amended REA. The terms of this section are particularly important and they should be reviewed. This section was subject to considerable and, at times, difficult negotiations over a long period of time. We are satisfied that the subordination meets the Stores' needs and, at the same time, makes clear that the bondholders are not adversely affected and that the agreements which we have reached with May Company, as reflected in the Operating Agreement and other documents, will not be adversely affected. The third section of the document grants "adjacent parking easements" to the major Stores. This section resulted from the Stores' need to insure that parking would always be available for use of their customers. The vehicle to accomplish that objective is to grant nonexclusive private parking easements over portions of the public parking lot to each of the major tenants in the Shopping Center. Bond Counsel has no objection to the granting of those easements since the property and our title thereto in any case is restricted to use for public parking purposes. There is nothing inconsistent in the grant of a nonexclusive easement over the same property for essentially the same purpose. If any member of the Council has questions about the terms of the amendment, I will attempt to answer them at the August 1, 1978 meeting. VFB/mla VINCENT F. BIONDO, JR. City Attorney c 7 8 9 10 11 12 n 4 The City Council of the City of Carlsbad, California, does hereby resolve as follows: 1. That the document entitled "Amendment of Deed Covenants, Conditions, Restri.ctions and Reservations; Subordination Agreement; and Grant of Parking Easements" on file with the City Clerk and incorporated by reference herein is hereby approved. RESOLUTION NO. 5 5 0 1 22 23 24 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AND AUTHORIZING THE EXECU'I'ION OF THE AMENDMENT OF DEED COVEIJANTS , CONDITIONS, RESTRICTIONS AND RESERVATIONS? SUBORDI- NATION AGREEMENT; AND GRANT OF PARKING THE PARKING AUTHORITY AND TEIE PLAZA -- CAMINO REAL. EASEMENTS, BETWEEN THE CITY OF CARLSRAD, of August , 1.978 by the following vote, to wit: AYES : Councilmen Packard, Skotnicki, Lewis and Anear NOES : None 19 20 2. That the Mayor of the City of Carlsbad is hereby authorized and directed to execute said Agreement for and on behalf of the City of Carlsbad. 3. This approval is conditioned upon the revision of said document as the City Attorney determines necessary to bring it into accord with the Precise Plan for the Plaza Camino Real Regional Shopping Center as approved by this Council. an adjourned PASSED, APPROVED AND ADOPTED at / regular meeting of the City 21 Council of the City of Carlsbad, California, held on the 3rd day I1 25 26 27 28 ABSENT : .AT TE S T : Councilwoman Casler -e&(/ CAY- RONALD C. PACKARD, Mayor