02-01-2005 - AlHassen Outstanding ObligationsTO:
FROM:
SUBJECT:
LJ
Andrew G. Pasmant, City Manager
and City Council
Tom Bachman
Finance Director
ALHASSEN OUTSTANDING OBLIGATIONS
0
City of West Covina
MEMORANDUM
AGENDA
Item: J-2
Date: February 1, 2005
RECOMMENDATION: Receive and file the report or provide direction to staff.
DISCUSSION:
This item was placed on the agenda at the request of Board member Herfert
Over the past approximate twenty years, the Community_ Development Commission (formerly
the Redevelopment Agency) have entered into a number of agreements for various development
projects with Mr. Ziad Alhassen. Those agreements contained various loans and sales tax and
property tax provisions as well as schedules of performance that were required to be met. As the
City Council is aware, Mr. Alhassen and the City have been attempting to resolve disagreements
and discrepancies over a number of these agreements that have outstanding amounts due to the
CDC as well as outstanding performance requirements that have not been met. Additionally, the
CDC has a property tax reimbursement obligation to Mr. Alhassen related to the Eastland Tower.
The CDC staff has been trying to resolve the differences between Mr. Alhassen and the CDC
related to amounts owed and Council has verbally given direction in closed session on these
settlements.
As of January 31, 2005 Mr. Alhassen has outstanding amounts due to the CDC of $1,660,130.49.
This amount is offset by $487,853.53 that the CDC owes Mr. Alhassen for a net amount owed to
the CDC of .$1,172,276.96. Direction was provided to staff in closed session to develop a
settlement agreement for the outstanding obligations. The terms. of the agreement will be
outlined in detail when the agreement is brought back in closed session. The closed session
report will also include details regarding Mr. Alhassen's request for assistance with the Dodge
and Hummer dealership.
MISCELLANEOUS AMOUNTS OWED TO CITY/CDC
West Covina Village Note (1983)
946,277.93
Clippinger Litigation Fees (1999)
182,303.56
Dodge $675,000 Participant Loan (estimated) (1993,1999)
162,997.00
Dodge Sales Tax Guaranty (1999)
368,552.00
Total Due.to West Covina CDC
1,660030.49
MISCELLANEOUS AMOUNTS OWED TO ALHASSEN
Harry Hill Deposit
20,000.00
Eastland Tower Property Tax Reimbursement
464,353.53
Block Wall Removal Reimbursement
3,500.00
Total Due to Alhassen
487,853.53
Net Miscellaneous Amount Due to City/CDC
i 1172,276.96
A more detailed listing of all of the outstanding financial obligations including ones in which no
amounts are owed at this time is enclosed as attachment 1. Attachment 2 provides an overview
of each obligation along with the positions as stated by the CDC as to what amounts they believe
are owed under the various obligations.
Andrew G. Pasmant, Executive Director and the. Community Develment Commission
February 1, 2005
Page t
In addition to. the financial obligations, there was a Schedule of Performance' included in the
Second Amended and Restated Disposition, Development and Owner Participation Agreement
that when combined with the Scope of Development outlines the developments to be completed
and timelines in which they are to be completed. The history is as follows:
June 1, 1999- the City Council and Redevelopment Agency Board (now Community
Development .Commission) approved the original Second Amended and Restated
Disposition, Development and Owner Participation Agreement ("Original ARDDOPA")
with, Hassen Imports Partnership and West Covina Motors Inc. (Developer). The
Original ARDDOPA provided assistance for the rehabilitation of West Covina Dodge
and for the construction of a new Clippinger Chevrolet facility. In addition, the Schedule
of Performance anticipated the Developer to obtain CEQA & Planning entitlements
following the approval of the Development Agreement.
• June 17, 1999- the Agency received a copy of the Complaint filed with the Superior
Court in the County of Los Angeles by the City of Covina challenging the validity of the
Original ARDDOPA. The Complaint challenged issues of CEQA compliance as well as
the assistance provided for under the ARDDOPA.
• July 6, 1999- the Planning Commission approved the Precise Plan and Mitigated
Negative Declaration, providing CEQA compliance for the project.
• July 20, 1999- in light of the Covina lawsuit and subsequent approval of the Mitigated
Negative Declaration (CEQA), the City Council and Agency Board rescinded the
Original ARDDOPA and adopted a "revised" ARDDOPA (ARDDOPA): The
ARDDOPA provided clarification on the Agency's assistance, leaving all other
provisions of the previously adopted development agreement generally unchanged.
Within the ARDDOPA, the Schedule of Performance (Attachment No. 3) outlined the
time frame in which the Scope of Development (Attachment No. 4) would be completed.
When the ARDDOPA was revised for the July 20, 1999 approval, the Agency's previous
legal counsel (Stradling Yocca Carlson & Rauth) had not revised the Schedule of
Performance to reflect that CEQA compliance and Planning approvals had already been
completed. As such, Items 5 and 6 of the Schedule of Performance pertaining to the Site
Plan Process had already been completed prior to the adoption of the revised ARDDOPA.
• November 15, 1999- close of escrow for purchase of a 15-year operating covenant for
$2.6 million in accordance with the ARDDOPA. Pursuant to the Schedule, the close of
escrow was to be no later than July 31, 1999. However, due to the Agency's need to
change the funding mechanism from bond proceeds to the Agency's cash flow, and the
Developer's need to clear title issues, the close of escrow was delayed.
• Mid 2000- the Developer was able to convince GM to approve the Developer's original
design plans. The Developer had indicated to Agency staff that there was difficulty in
obtaining design approval. from General Motors (GM). GM originally disapproved the
design plans for the Project and requested that the.Developer change his plans to fit their
current prototype.
• August 7, 2000- the Agency received a letter from the Developer (Attachment No. 5)
which indicated that he was addressing several Planning conditions in order to submit
plans. Furthermore, the Developer indicated he would commence construction by early
200L
• January 29, 2002- developer submitted Site Improvement and Construction Drawings.
The Developer indicated that he would not submit plans until the Covina lawsuit
challenging the ARDDOPA was resolved. The Covina lawsuit was resolved in early
2002.
FILE NAME
!e
Andrew G. Pasmant, Exetive Director and the Community Devef ment Commission
February 1, 2005
Page 3
• July 28, 2001- construction should have been completed by this date. in accordance with
the Schedule of Performance. However, the Developer has argued that pursuant to the
ARDDOPA Schedule of Performance the Construction Period does not commence until
the issuance of Building Permits. As the Building Permit was issued on October 10,
2002, the Commencement of Construction would be no later than December 23, 2002,
and the Completion of Construction by June 20, 2004, and Commencement of Operation
by August 4, 2004.
Regarding Extension of Times of Performance, the Schedule of Performance does
provide a provision that in the event the Developer Improvements are completed
excepting only the interior improvements and glass wall on the sales building, the
Agency may, upon request, allow the Developer an additional 180 days to 'complete
construction thereof. The Developer did not make a request for the additional 180 days,
however, if the additional 180 days were to be included in the construction period, the
end of that period would have been December 17, 2004.
The Developer has verbally indicated that the delays of the project are due to force
majeure, which are delays in the project that were not within the Developer's control.
The Developer has cited delays due to the litigation with the City of Covina as well as
unsuitable soil conditions. The ARDDOPA also states that times of performance may be
extended in writing by the mutual agreement of the Agency (CDC) and Developer for
such causes as those cited by the Developer and that an extension for such causes shall be
for the period of the enforced delay, commencing at the start of the cause, if notice by the
party claiming such extension is sent to the other party within 30-days of the
commencement of cause. No such written notice has been received in writing by the
Agency from the Developer.
• September 28, 2004- the Developer verbally requested to the Executive Director that the
Schedule of Performance be extended to March 31, 2005. The Developer has not
provided any written -requests or updated schedules.
• October 5, 2004- the CDC Board authorized an amendment to the ARDDOPA to extend
the schedule of performance for completion of the dealership to March 31, 2005. As
current negotiations may also result in the amendment of the ARDDOPA, the extension
of the Schedule of Performance is anticipated to be brought before the CDC Board as an
amendment to the ARDDOPA on March 1, 2005. i
FISCAL IMPACT:
Mr. Alhassen owes the CDC a net amount of $1,172,276.96. Collection of this amount would
provide much needed working capital to the CDC. Since Mr. Alhassen has contested many of
the amounts due, the City would likely incur significant additional legal costs in order to collect
on these obligations and the amount received by the City would be reduced by these costs and
any other reductions if a settlement option is pursued.
-69 Y- Review & Approved by: Via Phone
Prepared by: Tom Bachman City Attorney/
Finance Director General Counsel to the CDC
Attachments: No. 1 — Summary of Outstanding Financial Obligations
No. 2 — Overview of Outstanding Financial Obligations
No. 3 — ARDDOPA Schedule of Performance
No. 4 — ARDDOPA Scope of Development
No. 5 - Letter from Developer dated August 7, 2000
No. 6 - Letter dated May 5, 2003 with Project Gantt Chart
and request for updated Schedule ofPerformance
No. 7 - CDC's revised Gantt Chart
No. 8 — Gantt Chart per Developer's Position
FILE NAME
Attachment 1 ,
SUMMARY OF ALHASSEN OUTSTANDING OBLIGATIONS
(Updated for amounts due through January 31, 2005)
MISCELLANEOUS AMOUNTS OWED TO CITY/CDC
West Covina Village Note - due 12/21/99 (Principal)
West Covina Village Note - Accrued interest @ 01/31/05
Total Due to West Covina CDC
MISCELLANEOUS AMOUNTS OWED TO ALHASSEN
Harry Hill Deposit
Eastland Tower Property Tax Reimbursement
Block Wall Removal Reimbursement
Total Due to Alhassen
Net Miscellaneous Amount Due to City/CDC
UTO DEALERSHIP AMOUNTS OWED TO CITY/CDC
Clippinger Litigation Fees
Dodge $675,000 Participant Loan due 12/27/03 (estimated)
odge Sales Tax Guaranty: July 1, 1998 - June 30, 2001
Dodge Sales Tax Guaranty: July 1, 2001 - June 30, 2004 (estimated)
Dodge Rehabilitation Loan (Repaid with Clippinger sales tax)
Clippinger Sales Tax Guaranty: April 1, 2002 - March 31, 2005
Clippinger Property Tax Guaranty
Net Auto Dealership Amount Due to City/CDC
AL NET AMOUNT DUE TO CITY/CDC
(1) Dealership meeting revenue requirements
(2) No amounts due at this time per agreement
1
567,264.45
379,013.49
946,277.93
20,000.00
464,353.53
3,500.00
487,853.53
458,424.40
City
182,303.56
162,997.00
13,867.00
354,685.00
713,852.56
172
Attachment 2
WEST COVINA VILLAGE NOTE
Background: On April 27, 1983, an "Owner Participation Agreement (OPA) was executed
between Dighton Inc. and the Agency whereby Dighton Inc. agreed to pay half the West Covina
Village acquisition costs. The Fourth Implementation Agreement assigned Dighton Inc. rights to
Mr. Alhassen. On December 21, 1987, Mr. Alhassen signed an unsecured promissory note
agreeing to reimburse the Agency $567,264.45 over twelve consecutive years (1987, - 1999).
Upon default, 10 percent interest per annum would be due on the unpaid balance. The note went
into default on December 21, 1999. To date, no payments have been made on the note.
CLIPPINGER LITIGATION FEES
Background. On July 20, 1999 the Second Amended and Restated Disposition, Development
and Owner Participation Agreement (ARDDOPA) was executed among Hassen Imports
Partnership; West Covina Motors and the Agency. The agreement provided assistance for the
rehabilitation of West Covina Dodge and for the construction of a new Clippinger Chevrolet
facility in exchange for operating covenants, restrictive covenants, and sales tax and property tax
increment guaranties. Mr. Alhassen also agreed to reimburse the Agency for attorneys fees
related to the Agency defending itself against the City of Covina's suit to stop Clippinger,
Chevrolet from leaving Covina. The amount of legal fees incurred is $182,303.56.
DODGE $675,000 PARTICIPANT LOAN
Background: The West Covina Redevelopment Agency advanced a loan of '$675,000
(Participant Loan) to Hassen Imports and West Covina Motors per a promissory note dated
October 15, 1993. The Participant Loan was amended pursuant to a Restated Participant Loan
Promissory Note dated July 27, 1998, and the Participant Loan was further amended pursuant to
the Second Amended Disposition, Development, and Owner Participation Agreement (2nd
ARDDOPA) dated October 29, 1999 and evidenced by the Second Amended and" Restated
Participant Loan Promissory Note (the "Promissory Note') dated November 1, 1999. The note
was to be repaid in five annual installments of $176,586 beginning on December 27, `1999 and
ending on December 27, 2003. Per the Promissory Note, Mr. Alhassen would be entitled to a
credit against the annual note payment due each year in an amount equal to the amount of
"Dodge Dealership Sales Tax Revenues". The amount of the credit did not reach the projected
annual amount in any of the five years and Mr. Alhassen has not made any other payments on
this note. The outstanding balance on the note was to be completely repaid on December 27,
2003. This repayment did not occur and the outstanding balance with interest accrued through
October 31, 2004 is an estimated $162,997. It is only an estimate because the Dodge dealership
sales tax revenues were combined with the Chrysler dealership sales tax in the fifth year of the
note and Mr. Alhassen has not provided Dodge sales tax information to the City.
DODGE SALES TAX GUARANTY
Background: The Dodge Sales Tax Guaranty in contained in the ARDDOPA stated that the
developer and operator guaranty that minimum sales tax of $1,950,000 will be generated from
the Dodge site over an eight year period with annual guaranty amounts ranging from $150,000 in
year 1 to $350,000 in year 8. There is a reconciliation and payment requirement every three
years. After the first 3-year period Mr. Alhassen owed the City/CDC $13,867 under the
guaranty. This amount has not been paid. Beginning in year 5 of the guaranty, Mr. Alhassen
began merging the Chrysler -Jeep sales tax revenues with the Dodge sales tax revenues, thereby
making it impossible to know the exact amount owed to the CDC under the guaranty. Based on
historical sales tax revenues for both Chrysler -Jeep and Dodge, estimates were made as to sales
tax generated from the Dodge Dealership in years five and six and the amount due to the
City/CDC for the second 3-year period is estimated at $354,685.
EASTLAND TOWER PROPERTY TAX REIMBURSEMENT
Background: On October 8, 1984.a Disposition and Development Agreement (DDA) was
executed between the Dighton Inc. and the Agency for the development of the Eastland Tower.
Mr. Alhassen was the managing director. The Agency promised to reimburse Mr. Alhassen 100
percent of tax increment allocated and paid to the Agency for a 10-year period to offset the cost
of the parking lot. The period to be covered was 1989-90 through 1998-99.
Hassen Real Estate Partnership declared bankruptcy on April 13, 1998 and suspended property
tax payments. The county subsequently placed the property into delinquency. Mr. Alhassen
made a series of payments over five years totaling $485,482.14 to pay off the delinquencies. The
final payment was made on April 23, 2002. Of the amount paid, $464,353.53 was eligible for
reimbursement by the CDC to him. Because the county will not remit delinquencies (redemption
payments) to taxing entities until the total amount is paid, this amount was not paid to the CDC
• Attachment 2
until sometime on or after August 20, 2002. Additionally, delinquencies are not paid to taxing
entities on a dollar for dollar basis but rather on a prorated share of the county -wide pool of all
delinquencies based on the percentage of the taxing entity's outstanding delinquencies compared
to the total countywide delinquencies. Because of this distribution formula, it is likely that the
CDC still has not received all of the redemption payments made by Alhassen. The
reimbursement agreement requires the CDC to reimburse taxes when "paid to the Agency."
OTHER OBLIGATIONS
The CDC and Mr. Alhassen are in agreement on the remaining issues, which include the Dodge
Sales Tax Guarantee, the Harry Hill Deposit and the block wall removal reimbursement.
e
Attachment 3
ATTACFZIENT NO.
I. GENERAL PROVISIONS
1. Consideration of Agreement by the
A e c . The Agency shall consider this
Agreement, and if approved, shall deliver
one (1) executed copy thereof to the
Developer.
2, iug of Escrow. The Agency shall
open an Escrow with the Escrow Agent for
the Agency Assistance. .
3. conditions Precedent. The Developer and
Agency satisfy all of their respective pre -
closing conditions.
4. close of Escrow for Agency Assistance.
The Agency Assistance closes.
II. DEVELOPER MPROVEMENTS
A. SITE PLAN PROCESS
5. subrr iission of Site Plan for the Project.
The Developer shall prepare and submit to
the City Planning Department preliminary
and final Site Plans and environmental
documentation required pursuant to
CEQA.
6. Review of Site P1an Application. Including
C�QA Documentation. and Approval or
Disapproval Thereof. Subject to approval
by the Planning Commission as set forth in
the City's Municipal Code.
B. DESIGN AND CONSTRUCTION
7. Submission of Complete Site ImproveTment
653228.19\22740.0015
ATTACHME
Within thirty (30) days after delivery to the
Agency by Developer of three (3) executed
copies of this Agreement.
Within fifteen (15) days after approval of
Agreement by the Agency.
As stated in the Agreement, otherwise prior
to the Agency Assistance Closing':
No later than July 31, 1999.
Within ten (10) days after execution of this
Agreement by the Developer.
Within forty five (45) days after complete
submission of Final Site Plan and CEQA
documentation, including all Precise Plan
fees.
N
Within sixty (60) days after approval of Site
T NO. 5-1
0
and onstruction Drawings. Developer
shall submit to the Building/Engineering
Department complete Site Improvement
and Construction Drawings for the
Developer Improvements.
g, B „� 'lling/Engineering Review of Complete
Site Improvement and Construction
Dmmd=. The Building/Engineering
Department shall approve or disapprove
the complete Site Improvement and
Construction Drawings.
9, gevisions of SiteImlrovement and
construction Drawings by the Developer.
Developer shall prepare revised Site
'Improvement Drawings and Construction
Drawings for the Developer Improvements
as necessary, and resubmit them to the
Building/Engineering Department for
review.
10 e Site
Improvement and Constraction Drawings.
The Building/Engineering Department
shall approve or disapprove the revisions
submitted by Developer for the Developer
Improvements provided that the revisions
necessary to accommodate the
Department's comments have been made.
11 Building Permits. The Developer shall
obtain all necessary building permits for
construction of the Developer
Improvements.
12 commencement of Construction. The
Developer shall commence construction of
the Developer Improvements.
13 Completion of Construction. The
Developer shall complete construction of
the Developer Improvements.
•
Plan by the Planning Commission.
Within thirty (30) days after submittal.
Within fifteen (15) days after receipt of-
Building/Engineering's comments. -
Within fifteen (15) days after submittal by
the Developer.
Within fifteen (15) days after approval of
the Site Improvement and Construction
Drawings by City planning, building, and
engineering departments.
Within fifteen (15) days after obtaining
building permits and the funding of the
Chrysler Loan but in no event later than
sixty (60) days after obtaining building
permits.
Within five hundred forty five (545) days
following the commencement of
construction provided, however, that in the
653228.19\22740.0015 ATTACEMENT NO. 5-2
14 Under og� undiniz of Power Lines.
Developer shall underground all existing
overhead electrical power lines on Lot B of
Parcel No. 1, the Housing Property, and
the Saturn Property.
15 Commencement of Operation. Operator
shall open and commence operation of the
expanded Clippinger Franchise on the
Development Property.
II SALES TAX .AND PROPERTY TAX
GUARANTEES
16 ogre Dealership Sales Tax Guaranty.
The Dodge Dealership shall generate the
minimum "Sales Tax Revenue" from the
operation of the Dodge Dealership on Lot
A of Parcel No. 1
17 Dodge Dealership Sales Tag Revenue
Ve 'fin cation by Agency. Agency shall
verify whether the Dodge Dealership has
generated the minimum Dodge Dealership
Sales Tax Revenues for the applicable
review period.
18 Payment of the Dodge Dealership Sales
Tax Revenue Shortfall Amount. if an
amount less than the minimum Dodge
Dealership Sales Tax Revenues for the
applicable review period is generated, the
event that the Developer Improvements
have been completed excepting only the
interior tenant improvements and glass wall
on the sales building Agency may,; upon
request, allow
Developer an additional one hundred eighty
(180) days to complete construction thereof.
Prior to the issuance of the Developer
Release of Construction Covenants.
Within forty-five (45) days of completion
of construction of the Developer ,
Improvements as evidenced by the issuance
of a Certificate of Occupancy.
J
During each Guaranty Year as described in
Section 702.
Within one hundred eighty (180) days after
the end of Dodge Guaranty Year 3 with
respect.to Dodge Guaranty Years 1, 2, and
3; within one hundred eighty (180) days
after the end of Dodge Guaranty Year 6
with respect to Dodge Guaranty Years 4, 5
and 6; and within one hundred eighty (180)
days after the end of Dodge Guaranty Year
Eight with respect to Dodge Guaranty Years
7 and 8.
Within fifteen (15) days of the Developer's
or Operator's receipt of written notice from
the Agency.
•
4
Developer shall pay to the City, in cash, an
amount equal to the difference between the
guaranteed minimum Dodge Dealership
Sales Tax Revenue amount and the actual
Dodge Dealership Sales Tax Revenue
generated.
19 Clippinger Fmc-hiSe zSales Tax Guaranty.
The Site shall generate the minimum
"Clippinger Franchise Sales Tax Revenue"
from the operation of the Clippinger
Franchise on the Saturn Property or the
Development Property.
20 Clippinger Franchise Sales Tax Revenue
Verification bye encv. Agency shall
verify whether the Clippinger Franchise
has generated the minimum Clippinger
Franchise Sales Tax Revenues on the -
Saturn Property and/or the Development
Property for the applicable review period.
21 Payment of the Clinpinger Franchise Sales
Tax Revenue Shortfall Amount. If an
amount less than the minimum Clippinger
Franchise Sales Tax Revenues for the
applicable review period is generated, the
Developer shall pay to the City, in cash, an
amount equal to the difference between the
guaranteed minimum Clippinger Franchise
Sales Tax Revenues amount and the actual
Clippinger Franchise Sales Tax Revenue
generated, plus any Excess Amount paid
by Developer pursuant to Section 21, plus
any applicable Dodge Dealership Excess
653228.19\22740.0015
During each Clippinger Guaranty Year as .
described in Section 703.
Within one hundred eighty (180) days after
the end of Clippinger Guaranty Year 3 with
respect to Clippinger Guaranty Years 1, 2,
and 3; within one hundred eighty (180) days
after the end of Clippinger Guaranty Year 6
with respect to Clippinger Guaranty Years
4, 5 and 6; within one hundred eighty (180)
days after the end of Clippinger Guaranty
Year Nine with respect to Clippinger
Guaranty years 7, 8 and.9; within one
hundred eighty (180) days after the end of
Clippinger Guaranty Year Twelve with
respect to Clippinger Guaranty Years 10,
11, and 12 and within one hundred eighty
(180) days after the end of Clippinger
Guaranty Year Fifteen for Clippinger
Guaranty Years 13, 14, and 15..
Within fifteen (15) days of the Developer's
or Operator's receipt of written notice from
the Agency.
ATTACHMENT NO. 5-4
r
•
22 Development Property Tax Increment
Quaranty. The Site shall generate the
minimum "Development Property Tax
Increment Revenue" from the
Development Property and the Developer
Improvements constructed on Parcel 1.
23 Development Proper Tax Increment
Revenue Verification by gency- Agency
shall verify whether the Property has
generated the minimum Development
Property Tax Increment Revenues for the
applicable review period.
24 Payment of the Development ProppM Tax
Increment Revenue Shortfall Amount. If
an amount less than the minimum
Development Property Tax Increment
Revenues for the applicable review period
is generated, the Developer shall pay to the
City, in cash, an amount equal to the
difference between the guaranteed
Development Property Tax Increment
Revenues amount and the actual
Development Property Tax Increment.
653228.19\22740.0015
During each Guaranty Year as described in
Section 704.
Within one hundred eighty (180) days after
the end of Tax Increment Guaranty ,Year 3
with respect to Tax Increment Guaranty
Years 1, 2, and 3; within one hundred eight
(180) days after the end of Tax Increment
Guaranty Year 6 with respect to Tax
Increment Guaranty Years 4, 5 and ';6, and
within one hundred eighty (180) days after
the end of Tax Increment Guaranty Year
Eight with respect to Tax Increment
Guaranty years 7, 8 and 9 within one
hundred eighty (180) days after the ,end of
Tax Increment Guaranty Year Twelve with
respect to Tax Increment Quaranty Years
10, 11, and 12 and within one hundred
eighty (180) days after the end of Tax
Increment Guaranty Year Fifteen for Tax
Increment Guaranty Years 13, 14, and 15.
Within fifteen (15) days of the Developer's
or Operator's receipt of written notice from
the Agency.
ATTACHMENT NO. 5-6
Sales Tax applicable as a credit against the
Clippinger Franchise Sales Tax Revenue
Shortfall Amount, pursuant to Section 702
hereof.
653228.19\22740.0015
ATTACHMENT NO. 5-5
t
Attachment 4
ATTACEMNT NO. 6
The Site is located along the San Bernardino Freeway just west of Azusa Avenue, within the
West Covina Redevelopment Project Area.
The Project calls for the construction of the Developer Improvements (as described ;below);
the relocation of the Clippinger Franchise Interim Satellite Facility to the Saturn Property
within ten (10) days after the Close of the Escrow; and the location of the Clippinger
Franchise Permanent Facility to the Development Property following construction of the
Developer Improvements. The Developer Improvements shall consist generally of the
expansion of the Clippinger Franchise onto the Development Property including the
construction and operation of two new automobile showrooms and sales facilities, parts
storage, expanded service facilities, and subterranean parking. The Developer Improvements
also include substantial rehabilitation of the Existing Dodge Dealership.
The rehabilitation of the existing West Covina Dodge facility involves the construction of
several new structures and the rehabilitation of the existing Showroom building. The
rehabilitation will cover the cleaning and painting of the existing Showroom building and the
repair or replacement of the white painted fascia/sign band. This will inclu le,the placement
of permanent Dodge signage in two places on the Showroom building.
The rehabilitation will also consist of the constriction of several new structures to contain
additional Service Bays expanding the existing service facilities, and new parking areas
which will increase the available space for inventory storage. The new Service Bays will be
located in two separate buildings, one backing up to and sharing a common wall with the
south side of the current West Covina Dodge Service Building and the other spaced across a
35-foot wide driveway from the first, allowing the easy maneuvering of vehicles inand out
of the service areas. Each building will be three sided, open on the side facing the access
driveway, and containing eight service bays. The buildings will have interior clearances of
twenty-one and twenty-five feet in height to accommodate most trucks raised on a hydraulic
lift. The capacity of the West Covina Dodge service facility will be raised from the current
total of 16 service bays to a new total of 32 service bays after expansion. This doubling of
service capacity is much needed to handle the current service volume of West Covina Dodge
and to maintain the necessary industry standards for service facilities of the size of a
dealership such as West Covina Dodge.
Behind the Service building, where currently sit several single-family residences, anew
parking structure will be built, consisting of covered on grade parking and one level of
elevated parking deck. The lower level is accessed from the existing fire lane behind West
Covina Dodge and the upper level is reached from the drive connecting the new Service
Bays. The newly constructed parking areas will be used to expand the area of inventory
storage and to provide ample holding areas for vehicles using the expanded West Covina
Dodge service facilities. The new parking structures will be built with a steel frame and
metal decking supporting a concrete slab. The perimeter enclosure walls will consist of
masonry block units topped with decorative metal screen work to provide intrusion
protection. The building will be completely fire-spzinklered and equipped with a mechanical
exhaust system.
The Developer shall complete all of the Developer Improvements within the time set forth
therefor in the Schedule of Performance (Attachment No. 5).
All improvements of the Site shall conform to City codes and requirements to ensure a first-
class new automobile dealership.
The Developer Improvements shall be completed in one (1) phase and shall be in
conformance with the Auto Center Guidelines (Attachment No. 9). The total value of the
Developer Improvements shall not be less than Six Million Dollars ($6,000,000).
The Development Property shall be landscaped, and effectively and aesthetically designed.
The landscaping of the private streets within the Development Property and the landscaping
of open space on the Development Property shall be designed to complement the
improvements and the entire auto center development.
. J
2
i
Attachment 5
HASSEN IMPORTS PARTNERSHIP �caty�
Sent Via Fax No. (626) 813-8665 AUG 8 2��0
Original Sent By Regular Mail
August 7, 2000
Mr. Christopher Chung, Director
West Covina Redevelopment Agency
HasseN P.O. Box 1440
West Covina,
CA 91793
RE: Clippinger Chevrolet - Status of'Development
Dear Sir:
In response to your letter dated July 25, 2000, we are submitting the
improvement plans to the City for checking, however, attempting to comply
with all of the Planning department's conditions outlined in their letter of
November 18, 1999 has created problems for us in that certain conditions
must be met or done prior to submitting the improvement plans.
We now believe that we have resolved most of the complications and are
trying to overcome the final stages in order to submit the plans to the City,
In response to your letter dated July 25, 2000, we herewith submit the
following:
1. The street improvement plans for Garvey Avenue South have been
approved and bonded for construction.
2. Vacation notices have been given to the residents of the six (6)
houses on Norma Avenue and demolition permits have been obtained
from the City. Demolition is .expected to commence at the end of
August.
3. Meeting with SCE has resulted in their preparation of plans to relocate
the electrical services for the adjoining residences and businesses.
The relocation will be accomplished as soon as the six (6) houses on
Norma Avenue are demolished.
4. The lot line adjustment has been prepared and approved by the City.
Due to planning department conditions this cannot be recorded until
the houses on. Norma Avenue are demolished.
5. The water plans for fire control have been submitted to the City's fire
department and approved. The water, sewer and drainage plans,will
be submitted this month.
6. The grading and site plans are ready to submit to the City+ for
checking. We were holding the plans to submit with other plans,
however we will submit same to the City this week.
100 North Barranca Avenue I suite 900 I West Covina, CA 19791-1600 I Telephone: (626) 967-7374 I Fax: (626) 967-7388 I E-Mail: hdc@hassen.com
8. The consulting structural engineer has prepared a preliminary footing
HasSeNand foundation plan and is awaiting input from the architect prior to
proceeding.
9. An architect has been retained to review the. plans and to prepare the
necessary design plans. We anticipate that these plans should be
ready for submittal to the City next month.
10. A landscape architect is being contacted to prepare plans for the
development. We expect the plans will be ready for submittal next
month.
11. Mechanical and electrical engineers will be working with the architect
to design on -site facilities and expect that plans will be ready to
submit to the City in October.
12. We propose to obtain rough grading permit in September and
commence grading shortly thereafter.
13. Upon completion of the rough grading, we propose to commence the
underground facilities.
14. We expect to commence construction of the parking facilities and
buildings by the first of the year 2001 and complete same within two
(2) years.
If you have any questions, please contact our office at your convenience..
Very truly yours,
HASSEN IMPORTS PARTNERSHIP,
a California Limited Partnership
By: Hassen Imports, Inc.
Its General Partner
Ziad Alhassen
7
President
ZA:dbs
cc: Tarek Alhassen
Daniel Hobbs, City Manager
r Attachment 6
WI'i�'
RROBYBLUPMRIYT dGRNGY
May 5, 2003
VIA. FACSIMILE
AND U.S MAM
Mr. Ziad Alhassen
Hassen Development Corp.
100 N. Barranca Avenue, Ste: 900
West Covina,�CA 91791-1600
SUBJECT: Schedule of Performance - Clippinger Chevrolet Construction
Dear Ziad:
The purpose of this letter.is to request an updated schedule of Performance for the Clippinger
Chevrolet construction.
Although construction continues, the Schedule of Performance contained within the Second
ARDDOPA (dated July 19,1999) states that construction was to have been completed by'January
23, 2002. Copies of the Schedule of Performance and its corresponding Gantt chart are enclosed
for your review.
Staff anticipates that the Agency Board shall consider the reconciliation of your accounts within
the next 60 days. It is staffs intention to provide the.Agency Board with all the information
necessary to settle your accounts. To do so, staff requests a revised Schedule of Performance at
your earliest convenience.
Should you have further questions, please feel free to call Christopher Chung at (626) 939-8417.
Sincerely,
Andrew G. Pasmant
Executive Director
Attachments
cc: Arnold M. Alvarez-Glasman
Christopher J. Chung
Mike Lee
David Simpson
clp298dcs
1444 West Garvey Avenue • P_O_ Box 1440 • West Covina • CA 91793 • Phone (626) 939-8417 • Fax (626) 939-8665
CUPPINGER CHEVROLET PROJECT GANTT CHART
ID`
Task Name
Duration
Start
Finish
1998
o:00
2002
96
00
'02
1
PROJECT DEVELOPMENT (Schedule or Performance)
965 days
Mon 07/19/99
Sat 03109102
Mon 07h9199
;
on 07119199
;
;
;
;
2
Execution or DDA
0 days
Mon 07/19199
Mon 07119199
3
Opening of escrow (Agency assistance)
7 days
Mon 07/19/99
Sun 07/25/99
4
Close d escrow (Agency assistance)
12 days
Mon 07/19/99
Fri 07/30199
5
Submission of site plan
10 days
Mon 07/19/99
Wed 07/28199
6
Review of site plan
45 days
Thu 07129198
Sal 09111/99
7
Planning Commission approval
a days
Mon 07119192
Mon 07119199
8
S bmisslon of complete site Improv, plan and construction drawings
8o days
Mon 07/19/99
Thu 09116/99
9
Bulkting/Engineering review of site Imprv. plan and construction drawings
30 days
Fri 09117/99
Sat 10/16199
10
Revisions or site Improvement plan and construction drawings
16 days
Sun 10M7199
Sun 10/31/99
11
Final review of site plan and construction drawings
15 days
Mon 11/01/99
Mon 1ill 5/99
12
Building permits Issued
15 days
Tue 11/16/99
Tue 11/30/99
13
Commencement of Construction
60 days
Wed 12/01199
Sat 01/29/00
14
Completion of ConatrucUon
545 days
Sun 01/30100
Fri 07/27/01
15
Completion of Construction (additional time)
180 days
Sat 07/28101
Wed 01/23102
18
Commencement of Operations
45 days
Thu 01124102
Sat 03/09/02
17
DODGE SALES TAX GUARANTEE
2736 days
Wed 07101198
Sun 12126105
29
CLIPPINGER SALES TAX GUARANTEE
6290 days
Wed 07/01/98
Sun 12123112
,
;
50
CLIPPINGER property tax GUARANTEE
6666 days
Thu 011241021
Tue 07118/17
Project., CLPproject
Date: Mon 05/06/03
Task
Spat
Progress
Milestone
Summery
Rolled Up Task
Rolled Up Split
Rolled Up Milestone 0
Rolled Up Progress
External Tasks Deadline
Protect Summary
External Milestone
Page 1
ATTACHMENT NO.5
SCREDULE OF PERFORMAI�LCE
I. GENERAL PROVISIONS
1. Consideration of Agreement by the
0 eg ncv. The Agency shall consider this
Agreement; and if approved, shall deliver
one (1) executed copy thereof to the
Developer.
2. One Wz of Escrow. The Agency shall
open an Escrow with the Escrow Agent for
the Agency Assistance.
3. Con_dition,NPrecedent. The Developer and
Agency satisfy all of their respective pre -
closing conditions.
4. Close of Escrow for Agency Assistance.
The Agency Assistance closes.
II. DEVELOPER IMPROVEMENTS
A. SITE TLAN PROCESS
5. Submission of Site Plan for the Project.
The Developer shall prepare and submit to
the City Planning Department preliminary
and final Site Plans and environinental .
documentation required pursuant to
CEQA.
6. Review of Site Plan Application. Including
CEQ"A Documentation_ and Approval or
gpproval Thereof. Subject to approval
by the Planning Commission as set forth in
the City's Municipal Code.
B. DESIGN AND CONSTRUCTION
7. submission of Complete Site Improvement
Within thirty (30) days after delivery to the
Agency by Developer of three (3) executed
copies of this Agreement.
n
Within fifteen (IS) days after approval of
Agreement by the Agency.
As stated in the Agreement, otherwise prior
to the Agency Assistance Closing.
No later than July 31; 1999.
Within ten (10) days after execution of this
Agreement by the Developer.
i�
Within forty five (45) days after complete
submission of Final Site Plan and CEQA
documentation, including all Precise, Plan
fees. "
Within sixty (60) days after approval of Site
653228.19\22740.0015 A.TTACB1Y= N0. 5-1
•
t
and Construction Drawings. Developer
shall submit to the Building/Engineeriug
Department complete Site Improvement
and Construction Drawings for the
Developer Improvements.
8. Buildi n 'nneering Review of Complete
Site lm=vement and Construction
Dramdnes. The Building/Engineering
Department shall approve or disapprove
the complete Site Improvement and
Construction Drawings.
9. Revisions of Site Improvement and
Construction Drawings by the Developer.
Developer shall prepare revised Site
Improvement Drawings and Construction
Drawings for the Developer Improvements
as necessary, and resubmit therm to the
Building/Engineering Department for
review..
10 Final Review of Comsi�ete Site
J movement and Construction Drawings,
The Building/Engineering Department
shall approve or disapprove the revisions
submitted by Developer for the Developer
Improvements provided that the revisions
necessary to accommodate the
Department's comments have been made.
11 Building. permits. The Developer shall
obtain all necessary building permits for
construction of the Developer
Improvements.
12 Commencement of Construction. The
Developer. shall commence construction of
the Developer Improvements.
13 S`omtiletion of Coustraction. The
Developer shall complete construction of
the Developer Improvements.
PIan by the Planning Commission.
Within thirty (30) days after submittal.
Within fifteen (15) days after receipt of
Building/Engineering's comments.
Within fifteen (15) days after submittal by
the Developer.
Within fifteen (15) days after approval of
the Site Improvement and Construction
Drawings by City planning, building, and
engineering departments.
Within fifteen (15) days after obtaining
building permits and the funding of the
Chrysler Loan but in no event later than
sixty (60) days after obtaining building
permits.
Within five hundred forty five (545) days
following the commencement of
construction provided, however, that in the
653228.19V2740.0015 ATTACHMENT NO. 5-2
•
14 Undermunding of Power Lines.
Developer shall underground all existing
overhead electrical power lines on Lot B of
Parcel No. 1, the Housing Property, and
the Saturn Property.
15 Commencement of Operation. Operator.
shall open and commence operation of the
expanded Clippinger Franchise on the
Development Property.
II SALES TAX AND PROPERTY TAX
GUARANTIES
16 Dodge Dealership Sales Tax Guaranty.
The Dodge Dealership shall generate the
minimum "Sales Tax Revenue" from the
operation of the Dodge Dealership on Lot
A of Parcel No. 1
17 Dodge dealership Sales Tax Revenue
Verification by Agency. Agency shall
verify whether the Dodge Dealership has
generated the minimum Dodge Dealership
Sales Tax Revenues for the applicable
review period.
18 Pavment of the Dodge Dealershiro Sale
Tax Revenue Shortfall Amount If an
amount less than the minimum Dodge
Dealership Sales Tax Revenues for the
applicable review period is generated, the .
event that the Developer Improvements
have been completed excepting only the
interior tenant improvements and glass wall
on the Lale-a ale-abuilding Agency may, upon
request, allow
Developer an additional one hundred eighty
(180) days to complete construction thereof.
Prior to the issuance of the Developer,
Release of Construction Covenants.
Within forty-five (45) days of completion
of construction of the Developer
Improvements as evidenced by the issuance
of a_Certificate of Occupancy.
V .
During each Guaranty Year as described in
Section 702.
Within one hundred eighty (180) days after
the end of Dodge Guaranty Year 3 with
respect to Dodge Guaranty Years,1, 2, and
3; within one hundred eighty (180) days
after the end of Dodge Guaranty Year 6
with -respect to Dodge Guaranty Years 4, 5
and 6; and within one hundred eighty (180)
days after the end of Dodge Guaranty Year
Eightwith respect to Dodge Guaranty Years
7 and 8.
Within fifteen (15) days of the Developer's
or Operator's receipt of written notice from
the Agency.
653228.19\22740.0015 ATTACHMENT NO. 5-3
CLIPPINGER CHEVROLET PROJECT GANTT CHART
ID
Task Name
Duration
Start
Finish
1998
12000 12002
'98
100 '02
1
PROJECT DEVELOPMENT (Schedule of Performance)
965 days
Tue 07/20/99
Sun 03/10/02
Tue 07120/99
Tue 07120/99
2
Execution of DDA
0 days
Tue 07/20/99
Tue 07/20/99
3
Opening of escrow (Agency assistance)
7 days
Tue 07/20/99
Mon 07/26/99
4
Close of escrow (Agency assistance)
12 days
Tue 07/20/99
Sat 07/31/99
5
Submission of site plan
10 days
Tue 07/20/99
Thu 07/29/99
6
Review of site plan
45 days
Fri 07/30/99
Sun 09/12/99
7
Precise Plan & CEQA Approval
0 days
Tue 07/20/99
Tue 07/20/99
8
Submission of complete site improv. plan and construction drawings
60 days
Tue 07/20/99
Fri 09/17/99
9
Building/Engineering review of site imprv. plan and construction drawings
30 days
Sat 09/18/99
Sun 10/17/99
10
Revisions of site improvement plan and construction drawings
15 days
Mon 10/18/99
Mon 11/01/99
11
Final review of site plan and construction drawings
15 days
Tue 11/02/99
Tue 11/16/99
12
Building permits issued
15 days
Wed 11/17/99
Wed 12/01/99
13
Commencement of Construction
60 days
Thu 12/02/99
Sun 01/30/00
14
Completion of Construction
545 days
Mon 01/31/00
Sat 07/28/01
15
Completion of Construction (additional time)'
180 days
Sun 07/29/01
Thu 01/24/02
16
Commencement of Operations
45 days
Fri 01/25/02
Sun 03/10/02
17
DODGE SALES TAX GUARANTEE
2736 days
Wed 07/01/98
Sun 12126/05
29
CLIPPINGER SALES TAX GUARANTEE
5290 days
Wed 07/01/98
Sun 12/23112
50
CLIPPINGER property tax GUARANTEE
6655 days
Fri 01/26/02
Wed 07/19/17
Project: CLPproject
Date: Thu 01/27/05
Task ",'
Split
Progress
Milestone ♦
Summary
Rolled Up Task ? i!i,
Rolled Up Split
Rolled Up Milestone O
Rolled Up Progress
External Tasks
Project Summary
'External Milestone
( 4 Deadline
......_..................t .... ,.........
c
180 days additional time as referenced in Item 13 of the Schedule of Performance, Not requested by Developer
Revised to reflect 7/20/99 Start Date (Previously 7/19199)
Page 1
`
r
ID Task Name
1 PROJECT DEVELOPMENT (Schedule of Performance)
2 Execution of DDA
3 Opening of escrow (Agency assistance)
4 Close of escrow (Agency assistance)
5 Submission of site plan
6 Review of site plan
7 Precise Plan & CEQA Approval
8 Submission of complete site improv. plan and construction drawings
9 Building/Engineering review of site imprv. plan and construction drawings
10 Revisions of site improvement plan and construction drawings
11 Final review of site plan and construction drawings
12 Building permits Issued
13 Commencement of Construction
14 Completion of Construction
15 Completion of Construction (additional time)'
16 Commencement of Operations
17 DODGE SALES TAX GUARANTEE
29 CLIPPINGER SALES TAX GUARANTEE
50 CLIPPINGER property tax GUARANTEE
0
CLIPPINGER CHEVROLET PROJECT GANTT CHART
Duration
Start
Finish
1998
'96
2023 days
Tue 07/20/99
Mon 01/31/06
0 days
Tue 07/20/99
Tue 07/20/99
7 days
Tue 07/20/99
on 07/26/99
12 days
Tue 07/20/ 99
Sat 07/31/99
10 days
Tue 07/20/99
Thu 07/29/99
45 days
Fri 07/30/99
Sun 09/12/99
0 days
Tue 07/20/99
Tue 07/20/99
60 days
Tue 07/20/99
Fri 09/17/99
30 days
Sat 09/18/99
Sun 10/17/99
15 days
Mon 10/18/99
Mon 11/01/99
15 days
Tue 11/02/99
Tue 11/16/99
15 days
Thu 10110102
Thu 110124102
60 days
Fri 10/25/02
Mon 12/23/02
545 days
Tue 12/24/02
Sun 06/20/04
180BWed
21/04
Fri 12/17/04
4518/04
Mon 01/31/0
2736
01/98
Sun 12/26/05
6290
1/98
Sun 12/23/12
5665
1/98
Mon 12 223113
Tue 07/20/99
Tue 07/20199
'00
Task - Rolled U Split _ External Tasks
Milestone P pr _us`, Deadline w
Project: ClPproject-Developer Split Summary
0
Date: Thu 01/27/05 Rolled Up Milestone Project Summary
_ +4
C+
Progress I Rolled Up Task & Rolled Up Progress I External Milestone a
180 days additional time as referenced in Item 13 of the Schedule of Performance, Not requested by Developer Page 1
Revised to reflect 7/20199 Start Date (Previously 7/19/99) `*
00