Resolution - 9690RESOLUTION NO. 9690
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WEST COVINA APPROVING AND AUTHORIZING THE
EXECUTION OF THE SECOND AMENDED AND RESTATED
• DISPOSITION, DEVELOPMENT AND OWNER
PARTICIPATION AGREEMENT BY AND BETWEEN THE
REDEVELOPMENT AGENCY AND HASSEN IMPORTS
PARTNERSHIP AND WEST COVINA MOTORS, INC., AND
MAKING CERTAIN FINDINGS IN CONNECTION
THEREWITH
WHEREAS, the City Council of the City of West Covina (the "City Council") approved and
adopted the Redevelopment Plan for the West Covina Redevelopment Project (the 'Redevelopment
Plan") by the merger of the Central Business District and Eastland Redevelopment Plans on
December 21, 1993 by Ordinance No. 1928; and
WHEREAS, the City Council did duly pass and approve Ordinance No. 1951 on December
20, 1994, and did thereby amend the Redevelopment Plan; and
WHEREAS, the Redevelopment Agency for the City of West Covina (the "'Agency") is
authorized and empowered by the Community Redevelopment Law, California Health and Safety Code
Sections 33000, el seq. (the "CRL"), to enter into agreement for the acquisition, disposition and
development of real property and otherwise to assist in the redevelopment of real property within a
redevelopment project area in conformity with a redevelopment plan adopted for such area, to acquire
real and personal property in redevelopment project areas, to receive consideration for the provision by
the Agency of redevelopment assistance, to make and execute contracts and other instruments
necessary or convenient to the exercise of its powers, and to incur indebtedness to finance or refinance
redevelopment projects; and
WHEREAS, pursuant to Section 33444.5 of the CRL, the Agency may establish a program
under which it may make loans to property owners or tenants for the purpose of rehabilitating and
redeveloping commercial properties within a redevelopment project area; and
WHEREAS, on or about July 20, 1983, the Agency entered into a Disposition and
Development Agreement ('DDA No. 1 ") with Hassen Imports, Inc., a California corporation (the
"Previous Developer") which provides generally for, among other things, (i) the sale of certain real
property ('Parcel No. I") to the Previous Developer, (ii) the development and operation of a new car
franchise on Lot A of Parcel No. 1, and (iii) the improvement of Lot B of Parcel No. 1 for parking
purposes; and
WHEREAS, on or about September 20, 1984, the Agency and the Previous Developer
entered into the First Implementation Agreement to DDA No. 1, pursuant to which the parties agreed
to certain revisions to DDA No. 1 including the extension of the time for completion of the
improvements required under DDA No. 1 and to the revision of the use restrictions in DDA No. 1; and
WHEREAS, pursuant to DDA No. 1 the Previous Developer constructed the required
improvements and operated a new and used Mitsubishi automobile franchise (the "Mitsubishi
Dealership") thereon, however, no improvements were made to Lot B of Parcel No. 1, as required
under DDA No. 1; and
WHEREAS, on or about July 28, 1986, the Agency, the Previous Developer and the Hassen
Imports Partnership (the "Developer") entered into the Second Implementation Agreement to
Disposition and Development Agreement, pursuant to which the Previous Developer assigned to
Developer its rights and obligations with respect to DDA No. 1 and the Mitsubishi Dealership; and
WHEREAS, on or about November 7, 1987, the Agency and the Developer entered into a
Disposition and Development Agreement ('DDA No. 2"), pursuant to which the Agency agreed to
utilize its best efforts to acquire that certain real property commonly known as the "La Ronde Property"
and the Developer agreed to, among other things, purchase the La Ronde Property from the Agency, to
expand the Mitsubishi Dealership onto the La Ronde Property, and to complete the development of Lot
B of Parcel 1 as required under DDA No. 1; and
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WHEREAS, on or about May 28, 1991, the Mitsubishi Dealership operating on Lot A of
Parcel No. 1 closed for business; and
WHEREAS, on or about May 4, 1993, the Agency, the Developer and West Covina Motors,
Inc. (the "Operator") entered into an Owner Participation Agreement (the "OPA") which provides for,
among other things, the development of a new and used Dodge automobile franchise (the "Dodge
Dealership") on Lot A of Parcel 1 by Developer and the operation of the Dodge Dealership thereon by
• the Operator for a period of not less than fifteen (15) years; and
WHEREAS, pursuant to the OPA the Agency loaned funds to the Developer for the
development of the Dodge Dealership (the 'Participant Loan'); and
WHEREAS, on or about November 22, 1994 the Agency acquired fee title to the La Ronde
Property which is improved with an apartment building; and
WHEREAS, in light of the numerous agreements entered into by the parties, the Agency, the
Developer and the Operator entered into the Amended and Restated Disposition, Development and
Owner Participation Agreement (the "ARDDOPA") on or about June 13, 1996, in order to consolidate
and restate the rights and obligations of the parties pursuant to DDA No. 1, as amended, DDA No. 2
and the OPA, as amended, to supersede such agreements, and to amend certain of those rights and
obligations as agreed to by the parties; and
WHEREAS, on September 5, 1995 the Agency adopted the Relocation Plan for the La Ronde
Apartments Project in order to provide for the relocation of the existing occupants of the La Ronde
Property; and
WHEREAS, the Agency conveyed the La Ronde Property to the Developer on or about
July 31, 1998 for the expansion of the Dodge Dealership or the location of a new automobile franchise
on the La Ronde Property, Lot B of Parcel 1, and certain adjacent properties, pursuant to the
ARDDOPA; and
WHEREAS, the Developer has not expanded the Dodge Dealership or located another new
automobile franchise to the La Ronde Property, Lot B of Parcel 1, and the adjacent properties
(collectively, the "Development Property"); and
WHEREAS, the Developer was reorganized pursuant to Chapter 11 of the United States
Bankruptcy Code (I I U.S.C. §§ 101 el seq.) under a reorganization plan confirmed by the U.S.
Bankruptcy Court, Central District of California, Los Angeles Division, in Case No. LA-98-24281-ER
(the "Reorganization Plan"); and
WHEREAS, pursuant to the Reorganization Plan, the ARDDOPA was assumed by the
Developer, and certain security instruments executed by Developer in conjunction with the
ARDDOPA were subordinated to other lenders, or otherwise affected, as set forth in the
Reorganization Plan; and
WHEREAS, Agency, Developer and Operator desire to enter into an agreement pursuant to
which Agency shall loan Developer Four Million One Hundred Thousand Dollars ($4,100,000) (the
"Rehabilitation Loan") to rehabilitate certain commercial properties, including the construction of
certain improvements on the Development Property and the redevelopment of certain existing
structures and buildings so as to facilitate the relocation of Clippinger Chevrolet and Oldsmobile (the
"Clippinger Franchise") to the Development Property and adjacent property; and
WHEREAS, in light of the existence of the ARDDOPA and the continuing executory
provisions thereof, and the impacts of the Reorganization Plan on certain of these obligations, and in
order to consolidate, amend, and restate the rights and obligations of the parties pursuant to the
• ARDDOPA and the Reorganization Plan, and to provide for the Rehabilitation Loan, the Agency,
Developer and Operator desire to enter into the Second Amended and Restated Disposition, Developer
and.Owner Participation Agreement (the "2"d ARDDOPA"), and
WHEREAS, on February 8, 1987, the City Council did duly pass Resolution No. 8151 and the
Agency did duly pass Resolution No. 373, and did thereby adopt a negative declaration with respect
the removal of the La Ronde Apartments Project and the development of the Phase I Improvements as
defined therein and subsequently set forth in the ARDDOPA, in compliance with the California
Environmental Quality Act, Public Resources Code Sections 21000, et seq. ("CEQA") and the State
CEQA Guidelines; and
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WHEREAS, the 2"d ARDDOPA requires the Developer to comply with all applicable laws
prior to the development of the Developer Improvements and prior to the funding of the Rehabilitation
Loan, including CEQA, and the appropriate environmental documentation with respect to the
Developer Improvements and the Rehabilitation Loan will be prepared and considered prior to any
action by Agency to authorize the construction of the Developer Improvements or fund the
Rehabilitation Loan; and
• WHEREAS, pursuant to Section 33433 of the Community Redevelopment Law (California
Health and Safety Code Section 33000, et seq.), the Agency is authorized, with the approval of the City
Council after a duly noticed public hearing, to sell or lease property acquired by the Agency using
property tax increment for development pursuant to the Redevelopment Plan upon a determination by
the City Council that the sale of the property will assist in the elimination of blight and that the
consideration for such sale is not less than either the fair market value or fair reuse value of the
property in accordance with the covenants and conditions governing the sale and the development costs
required thereof, and
WHEREAS, the 2"d ARDDOPA alters the timing of the payment of the purchase price for the
La Ronde Property, which property was acquired with tax increment and the sale of which was
originally subject to the provisions of CRL Section 33433, and therefore, the 2nd ARDDOPA could be
deemed to require the determinations required by CRL Section 33433; and
WHEREAS, a joint public hearing of the Agency and City Council on the proposed
2"a ARDDOPA was duly noticed in accordance with the requirements of CRL Section 33433; and
WHEREAS, the proposed 2"d ARDDOPA, and a summary report meeting the requirements
of CRL Section 33433, were available for public inspection consistent with the requirements of CRL
Section 33433; and
WHEREAS, on June 1, 1999, the Agency and City Council held a joint public hearing on the
proposed 2"d ARDDOPA, at which time the Agency reviewed and evaluated all of the information,
testimony, and evidence presented during the joint public hearing; and
WHEREAS, all actions required by all applicable law with respect to the proposed
2na ARDDOPA have been taken in an appropriate and timely manner; and
WHEREAS, the City Council has reviewed the summary required pursuant to CRL Section
33433 and evaluated other information provided to, it pertaining to the findings required pursuant to
CRL Section 33433; and
. WHEREAS, the La Ronde Property is located within an area of the West Covina
Redevelopment Project (the 'Project Area") which was found by the City Council, in its adoption of the
Redevelopment Plan, to be blighted as a result of physical deterioration of structures and lack of
maintenance of property, as well as other indicia of blight; and
WHEREAS, the payment of the purchase price for the La Ronde Property pursuant to the 2nd
ARDDOPA will assist in the elimination of blight by expediting the infusion of funds into Agency
activities, including activities to increase the supply of affordable housing throughout the Project Area
and to improve the economic conditions in the Project Area; and
WHEREAS, the disposition and development of the La Ronde Property is specifically
identified as a proposed project in the AB 1290 Redevelopment and Housing Implementation Plan
which was adopted by the Agency pursuant to Resolution No. 469 on December 6, 1994 (the
"Implementation Plan"), and furthers the goals of the Agency set forth in the Implementation Plan as it
will eliminate and prevent the spread of blight, encourage private sector investment and promote the
economic well-being of the Project Area by encouraging diversification of the commercial building;
• and
WHEREAS, the City Council has duly considered all terms and conditions of the proposed
2"d ARDDOPA and believes that the redevelopment of the Site pursuant thereto is in the best interests
of the City of West Covina and the health, safety, and welfare of its residents, and in accord with the
public purposes and provisions of applicable state and local laws and requirements.
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•
•
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West Covina
as follows:
Section.l. The City Council finds and determines that, based upon substantial evidence
provided in the record before it, the consideration for the Agency's disposition of the La Ronde
Property pursuant to the terms and conditions of the 2nd ARDDOPA is not less than the fair reuse value
in accordance with covenants and conditions governing the sale, and the development costs required
under the 2"d ARDDOPA.
Section 2. The City Council hereby finds and determines that the execution and
performance of the 2"d ARDDOPA will assist in the elimination of blight within the Project Area by
providing for the proper reuse and redevelopment of a portion of the Project Area which was declared
blighted for the reasons described above.
Section 3. The City Council hereby finds and determines that with respect to the
development of the Developer Improvements and the commitment of the Agency to funding the
Rehabilitation Loan, all required environmental documentation pursuant to CEQA shall be completed
prior to any Agency action to authorize commencement of construction of the Developer Improvements
and funding of the Rehabilitation Loan as set forth in the 2"d ARDDOPA.
Section 4. The City Council hereby approves the 2"d ARDDOPA with such minor non -
substantive revisions which are approved by the Executive Director and authorizes and directs the
Chairman of the Agency to execute the 2"d ARDDOPA on behalf of the Agency. A copy of the 2"d
ARDDOPA when executed shall be placed on file in the office of the Agency Secretary/City Clerk.
The Executive Director of the Agency is authorized to implement the 2"1 ARDDOPA and take all
further actions and execute all escrow documents and other documents necessary or appropriate to
carry out the 2"d ARDDOPA.
Section 5. The 2"d ARDDOPA is consistent with the provisions and goals of the
Implementation Plan.
Section 6. The City Clerk shall certify to the adoption of this Resolution.
The foregoing Resolution is hereby approved this 1 st day of June, 1999.
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor 4111
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ME
I HEREBY CERTIFY that the foregoing Resolution No. 9690 was duly adopted by the City
Council of the City of West Covina at a regular meeting hereof, held on the 1st day of June, 1999 by
the following vote, to wit:
AYES: Herfert, Melendez, Wong, Howard_ _
• NOES None
ABSENT: None
•
ABSTAIN: Touhey;
CITY COUNCIL OF THE CITY OF WEST
COVINA
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