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HomeMy WebLinkAboutCarlsbad 10 Hospitality LLC; 2023-09-12; Page 1 of 3 REPAYMENT AGREEMENT BETWEEN THE CITY OF CARLSBAD AND CARLSBAD 10 HOSPITALITY LLC This Repayment Agreement ("Agreement") is made between Carlsbad 10 Hospitality, LLC, owner of the Carlsbad Suites, located at 5010 Avenida Encinas in Carlsbad, California ("Hotel") and the City of Carlsbad ("City") (collectively referred to as “Parties”). RECITALS A. The City conducted an audit to monitor various hotel operators’ compliance, including the Hotel’s, with the City Municipal Code and relevant ordinances and resolutions related to the transient occupancy tax (“TOT”), including Chapter 3.12 of the City Municipal Code (“TOT Ordinance”) for the years 2018, 2019, and 2020 (“Audit”). B. Under the TOT Ordinance, each person who occupies a hotel is subject to a TOT - 10% for such rent. It is the obligation of the hotel operator to collect the TOT from the hotel room occupant at the time the rent is paid. The operator is further obligated to remit the full amount of TOT collected to the City on a monthly basis. C. Under the TOT Ordinance, any operator who fails to remit any TOT imposed within the time required shall pay the City a penalty of 10% of the amount of the TOT in addition to the amount of the TOT (“TOT Penalty”). In addition, if upon audit by the City, an operator is found to be deficient in their remittance, the City shall immediately invoice the operator for the net deficiency plus a penalty of 10% of the net deficiency (“Audit Penalty”). D. As a result of the Audit, it was determined the Hotel underreported revenues by $138,979 and as a result, failed to pay TOT totaling $15,129.00, including a TOT Penalty of $11,897.14 and an Audit Penalty of $1,512.94. It was determined that the Hotel owes $28,539.49 to the City (“Debt”). The Hotel does not dispute the Debt. E. The failure to pay the TOT was made in error, without knowledge, fraud, or misrepresentation on the part of either party. C. The Parties to this Agreement wish to resolve this matter without recourse to litigation. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: 1. Amount of Payment. The Hotel agrees to pay the City the full amount of the Debt ($28,539.49) through monthly payments of $2,378.29 for 12 months or until the full amount of the Debt has been paid. This is in addition to any regular TOT remittances required. 2. Method of Payment. The City will invoice the Hotel each month. The Hotel will have 14 days from the date of the invoice to pay the invoice. 3. Late Penalties. If the Hotel fails to remit timely payment for any monthly invoice, each invoice is subject to an additional penalty at the rate of one percent per day of the net deficiency, not to exceed 10%. DocuSign Envelope ID: 9EF2B8FF-F724-49BC-9E3B-9C8ADCEE21FD Page 2 of 3 4. Waiver of Litigation. The City agrees not to institute litigation against the Hotel for the recovery of the Debt, provided the Hotel complies with the terms of the Agreement. The Hotel, for itself, executors, administrators, assigns, and successors, fully and forever releases, discharges, and covenants not to sue or otherwise institute or in any way actively participate in or voluntarily assist in the prosecution of any legal or administrative proceedings against the City with respect to any matter arising out of, connected with, or related in any way to the underpayment set forth in the recitals. 5. Integrated Agreement. This Agreement constitutes the entire Agreement between the Parties, and no modification hereof shall be binding unless reduced to writing and signed by the Parties hereto. 6. Representations of Parties. The Parties each represent and warrant that they have freely considered, reviewed, and negotiated the terms of this Agreement, have had the opportunity to investigate and discuss it with their legal advisors or have been given the opportunity to retain an attorney and investigate and discuss the terms of this Agreement with said attorney, and that all have signed it voluntarily. By voluntarily signing this Agreement, the Parties represent and warrant that they have relied on their own judgment and any independent legal advice they may have sought and not upon any recommendations or representations of the other or from any opposing attorneys or third parties. By voluntarily signing this Agreement, the Parties each confirm that they understand and accept the terms of this Agreement as resolving all claims known and unknown, they have or might have had against the other. The Parties represent and warrant that they have the full right, capacity, and authority to enter and perform this Agreement. Such representations and warranties shall survive full execution and performance under this Agreement. 7. Hold Harmless. The Hotel will defend, indemnify and hold harmless City and its elected officials, officers, employees and agents in their official capacity (collectively referred to as “Indemnitees”), and any of them, from and against all loss, all risk of loss and all damage (including reasonable attorney’s fees and costs) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating in any manner to Hotel’s actions or defaults pursuant to this Agreement, and shall protect and defend Indemnities, and any of them with respected thereto. This provision shall survive the term of the Agreement. 8. Attorneys’ Fees. The Parties agree to bear their own attorneys’ fees and costs associated with the Agreement. 9. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect or impair any other provisions, which shall remain in full force and effect. 10. Execution by the Parties. This Agreement may be executed by the Parties in one or more counterparts, and may be executed on copies, each of which shall be deemed an original, and all of which together constitute one and the same instrument. /// /// DocuSign Envelope ID: 9EF2B8FF-F724-49BC-9E3B-9C8ADCEE21FD Page 3 of 3 11. Electronic Record. The Parties may convert this Agreement into an electronic record. The Parties consent to and recognize the validity, enforceability and admissibility of such record, which shall have the same force and effect as the original Agreement. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the final day and year written below. Carlsbad 10 Hospitality LLC d/b/a Carlsbad Suites CITY OF CARLSBAD, a municipal corporation of the State of California By: By: (sign here) Zach Korach, Finance Director Riya Patel, Director of Operations, AMI, LLC (print name/title) ATTEST: By: (sign here) SHERRY FREISINGER City Clerk (print name/title) If required by City, proper notarial acknowledgment of execution by contractor must be attached. If a corporation, Agreement must be signed by one corporate officer from each of the following two groups. Group A Group B Chairman, Secretary, President, or Assistant Secretary, Vice-President CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. APPROVED AS TO FORM: CINDIE K. McMAHON, City Attorney By: _____________________________ Deputy City Attorney DocuSign Envelope ID: 9EF2B8FF-F724-49BC-9E3B-9C8ADCEE21FD