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::: COMMUNITY NEWS Full text of agreement on bridge funding Published Friday, August 15, 2003 The following is a memorandum of understanding negotiated by the county, South developer Reynen & Bardis and the Rancho Murieta Association. The document, released Friday by the county, spells out the deal points for the funding and construction of a Cosumnes River bridge and alternatives. The agreement will be considered by the county Board of Supervisors at its meeting Tuesday, along with an amended ordinance to allow R&B to resume construction in the South in exchange for funding a $1.5 million RMA bridge proposal. RECORDING
REQUESTED BY, AND RANCHO MURIETA
ASSOCIATION
This Agreement Affecting Real Property (the "Agreement") is between Reynen & Bardis Development, LLC, a California limited liability company ("R&B"), Rancho Murieta Association, a California nonprofit corporation ("RMA") and the County of Sacramento, a political subdivision of the State of California (“COUNTY”). A. RMA is the entity formed to manage and maintain the residential planned development located in Sacramento County, California commonly known as Rancho Murieta (the "Development"). The portion of the Development located south of the Cosumnes River is commonly known as Rancho Murieta South. B. R&B owns those certain parcels of property within Rancho Murieta South described as follows (the "R&B Property"): The real property located in the County of Sacramento known as Rancho Murieta South Unit #7, more particularly described in the map recorded in the Official Records of the County of Sacramento on November 3, 1999 at Book 267, Map 6; Rancho Murieta South Units #8, more particularly described in the map recorded in the Official Records of the County of Sacramento on November 1, 2000 at Book 279, Map 6; Rancho Murieta South Unit #9, more particularly described in the map recorded in the Official Records of the County of Sacramento on November 15, 2001 at Book 292, Map 4; The Crest more particularly described in the map recorded in the Official Records of the County of Sacramento on December 3, 2002 at Book 307, Map 4; The Greens, Unit 1, more particularly described in the map recorded in the Official Records of the County of Sacramento on October 30, 2002 at Book 306, Map 5; The Greens, Unit 2 (NEED LEGAL); and Lakeview (NEED LEGAL), all as shown on the map attached hereto and incorporated herein by this reference as Exhibit “A”. C. In 1993 the Sacramento County Board of Supervisors, adopted a Planned Unit Development for Rancho Murieta South (PUD Ordinance No. SZC 93-0052, amending Ordinance 77-PD-10) (the "PUD"). R&B has obtained or is in the process of obtaining the tentative and final maps for subdivisions within Rancho Murieta South known as Phase II, the Crest, the Greens and Lakeview. D. Section 205 of the PUD ("Section 205") provides as follows: "RECREATION AND PEDESTRIAN CROSSING." Before construction of the 601st dwelling unit in the Rancho Murieta development south of the Cosumnes River, construct pedestrian/ bicycle facilities pursuant to the alignment shown on Exhibit "T" to connect with similar off-street facilities located on the north side of the Cosumnes River as identified by Section 178 of this ordinance (attached). E. Exhibit "T", as referenced in Section 205 above, provides for alternative alignments and crossings of the Cosumnes River. R&B and its predecessors in interest have worked diligently to satisfy this condition. Notwithstanding such efforts R&B has been unable to strictly comply with Exhibit "T", in large part because adjacent landowners have refused to allow the use of their lands or existing bridge crossings as contemplated by the condition at the time it was imposed. F. Due to the inability to comply with Exhibit "T" in the manner originally contemplated and the fact that the 600th building permit has been issued in Rancho Murieta South, R&B and RMA have met and conferred and have arrived at a mutually acceptable solution for providing adequate facilities for bicycle and pedestrian crossing between Rancho Murieta South and the balance of the Development. G. RMA has obtained a proposal from Viking Construction Company, Inc. dated May 28, 2003, for the construction of a bridge acceptable to RMA across the Cosumnes River (the "Bridge Proposal"). A copy of the Bridge Proposal is attached hereto as Exhibit "B". H. In consideration of the payment by R&B to RMA of the sums set forth herein, RMA is willing to officially and publicly support R&B's efforts to have the Sacramento County Board of Supervisors remove the obligation to comply with Exhibit “T” before construction of the 601st dwelling unit in Rancho Murieta South. AGREEMENT 1. Initial Payment. (a) R&B will make a cash payment to COUNTY to hold for RMA in the amount of $450,000 (the “Initial Payment”). The parties agree that this amount is sufficient to fund costs associated with the pre-construction phase of the bridge as specified in the Bridge Proposal. The Initial Payment shall be made no later than the third business day after the Sacramento County Board of Supervisors votes to remove the obligation to comply with Exhibit “T” before the construction of the 601st dwelling unit in Rancho Murieta South. The Initial Deposit shall be non-refundable unless a judicial challenge is made against the COUNTY’s decision which prohibits the issuance of building permits in Rancho Murieta South. RMA understands and agrees that R&B’s sole motivation in making the commitments herein is to gain the right to pull building permits beyond the 601st. In the event a judicial challenge precludes the issuance of building permits any remaining amounts of the initial payment will be refunded to R&B. (b) COUNTY shall hold the Initial Payment in a special interest bearing trust fund created pursuant to Ordinance SZC No. _____________ and release funds to the RMA following receipt of a written request for funds. 2. Letter of Credit. At such time as RMA has obtained all necessary permits for the construction of the bridge and is ready to proceed to construction, it shall give R&B and COUNTY written notice of its intent to proceed together with a demand for payment of funds required for the first phase of bridge construction in accordance with the funding schedule supplied by Viking Construction, dated May 28, 2003 (the “Funding Schedule”), attached hereto as Exhibit “C”. R&B shall pay to RMA the funds so demanded within sixty (60) days of such notice. Thereafter R&B shall pay within sixty (60) days of demand the subsequent funding requirements in accordance with the Funding Schedule. To secure this obligation R&B shall, concurrently with the payment of the Initial Payment, provide to the COUNTY a letter of credit (“Letter of Credit”) substantially in the form attached as Exhibit “D” which shall be: (i) an irrevocable, non-transferable letter of credit issued by a federal or state chartered bank or other financial institution (the “Issuer”) reasonably acceptable to COUNTY as defined below; (ii) in the “Stated Amount” of $1,084,200.00, the balance of the funding obligation in accordance with the Funding Schedule; and (iii) subject to renewal, replacement, reduction, early termination, expiration and draws by COUNTY or its designated agent as provided below (“Beneficiary”); and shall be annually renewable until August 31, 2008. As payments are made to RMA for the construction of the bridge in accordance with this Agreement, R&B shall be entitled to reduce the principal amount of the letter of credit. The parties agree that the timing of the Funding Schedule is subject to change. 3. Beneficiary. The Finance Director of the COUNTY (the “Beneficiary”) is hereby authorized by the COUNTY to draw on the Letter of Credit, if necessary as provided in this Agreement, and to provide for the reduction and termination of the Letter of Credit according to the terms of this Agreement. R&B shall bear all costs associated with posting the Letter of Credit, which costs shall not be subject to reimbursement by the COUNTY or RMA. 4. Letter of Credit Draws. Beneficiary may draw upon the Letter of Credit if R&B is fails to make a payment to RMA for construction of the bridge within sixty (60) days following the date of RMA’s request for payment. The amount of the draw shall be equal to the amount of RMA’s payment request. If the Letter of Credit is not renewed within thirty (30) days prior to its expiration date and construction of the bridge is not completed and the requirements for release or termination of the Letter of Credit have not then been met, the full amount of the Letter of Credit may be drawn by Beneficiary and deposited in a special fund. Thereafter, amounts in said fund may be withdrawn by Beneficiary on the same terms and conditions applicable to the Letter of Credit. 5. Renewal and Substitution. The Letter of Credit shall be renewed or a substitute letter of credit provided, not less than thirty (30) calendar days prior to its expiration. If R&B provides a substitute letter of credit to the COUNTY, then the COUNTY shall return any existing letter of credit at the time of such substitution by R&B. 6. Reduction and Termination. Once a year on or before September 1, the Stated Amount of the Letter of Credit shall be reduced by the amount of fees received by the COUNTY in the previous twelve (12) months pursuant to Section 205 of Chapter 17 of Ordinance SZC 93-0052. The Letter of Credit shall be terminated when the construction of the bridge is completed and RMA issues a Notice of Completion to COUNTY or on August 31, 2008, whichever occurs earlier. 7. Issuer. "Issuer" shall mean a bank: that is rated “A” or better by Moody’s or Standard & Poors ^ and “B/C” or better by Thompson BankWatch for a domestic bank and ^“B” or better for an international bank; or is a subsidiary of a parent organization rated “A” or better by Moody’s or Standard & Poors - with parent’s confirmation, and with a bank rating of “B/C” for a domestic bank or “B” for an international bank from Thompson BankWatch; or on a case-by-case basis as determined by the COUNTY Director of Finance, is rated below investment grade or not rated by Moody’s or Standard & Poors but ^ meets the following test: (1) Assets of at least $1 billion; (2) Capital & Surplus of at least $100 million; and (3) Collateral of 110% of liability exposure to be held by Trustee (Collateral to be those types of government securities used for bond defeasance) and to be marked-to-market weekly. 8. Construction of the Bridge. RMA shall diligently pursue the construction of the bridge in accordance with the Bridge Proposal and accepts full responsibility for obtaining all necessary permits and approvals for the bridge project. R&B shall not be responsible for obtaining any permits or approvals necessary to complete the bridge project. R&B agrees to reasonably cooperate with RMA in RMA's efforts to obtain permits and approval for the bridge project. The expenditure of funds shall be through the authority of the Parks Committee in accordance with this Agreement. 9. Further Cooperation/Fees. RMA and R&B shall cooperatively work with COUNTY during the planning process for the undeveloped Rancho Murieta North properties in establishing a fee and the necessary mechanism for collection of such fees representing a pro-rata share of the Project cost for the Rancho Murieta North developments. Such fees shall be collected by COUNTY in a manner as determined by COUNTY and will be deposited in a special account for the purposes outlined in this Agreement pursuant to Section 205 of Chapter 17 of Ordinance SZC 93-0052. All fee revenues collected prior to the notice provided to R&B as provided in paragraph 2, above, will be a credit against the funding requirements of R&B requested by RMA pursuant to Section 2 of this Agreement. After any payment made by R&B following the demand and payment of its funding requirement provided herein, all fees collected shall be paid directly to R&B on a annual basis on or before September 1. 10. Support to Modify Section 205. RMA agrees to officially and publicly support R&B's efforts to have the Sacramento County Board of Supervisors remove the obligation to construct a Cosumnes River crossing, pursuant to Exhibit “T”, before construction of the 601st dwelling unit in Rancho Murieta South. Specifically, RMA will affirmatively advise the Board of Supervisors that it deems the provisions of this Agreement to be a satisfactory alternative to strict compliance with the requirement set forth in Section 205. 11. No Further Obligation. RMA further agrees that, beyond R&B's payment of the Initial Payment and posting of the Letter of Credit, RMA will seek no further funds from R&B, nor shall RMA advocate to the County of Sacramento that any further commitment from any landowner within Rancho Murieta North or South, beyond the total funding provided herein, for the bridge is necessary. 12. Alternative Projects. In the event that RMA is unable, through no fault of the RMA, to secure the necessary permits and approvals for the Bridge Project prior to August 1, 2008, R&B shall pay the total amount of its obligation herein, less any funds received into the bridge construction account from other sources. Specifically the parties agree that the purpose of Section 227 is to provide mitigation for the inability of the residents of Rancho Murieta (North and South) to gain access between the North and South. The parties further agree that the intended purpose of the pedestrian/bicycle facilities was to provide access to RMA parks and facilities to all residents of Rancho Murieta. Therefore, it is agreed that, in the event the Bridge Proposal cannot be completed, RMA with the approval of R&B, which shall not be unreasonably withheld, shall identify alternative projects consistent with the spirit and intent of Section 227 which projects are subject to the approval of COUNTY. The expenditure of the funds shall be through the authority of the COUNTY and Parks Committee in accordance with this Agreement. 13. Litigation Defense. In the event a lawsuit is filed challenging the Board of Supervisors action in modifying or otherwise waiving the building permit limitation of Section 227, which names RMA as a defendant or real party in interest, together with R&B, R&B agrees to undertake the defense of such an action without cost to RMA. 14. Miscellaneous. (a) Binding Effect/Covenants Running with the Land. This Agreement shall run with the land and shall be binding on all parties having or acquiring any right, title or interest in the R&B Property, or any part thereof, and their heirs, successors and assigns. (b) Waiver. The waiver by either party of the breach by the other party of any provision of this Agreement does not waive any subsequent breach of the same or any other provision of this Agreement. (c) Amendment. No modification of this Agreement shall be made or effective except in writing signed by all of the parties. (d) Partial Invalidity. Invalidation of any provision contained in this Agreement by judgment, court order, or otherwise, shall in no way affect any other provision contained herein, which shall remain in full force and effect. (e) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. (f) Language Construction. Whenever the context of this Agreement requires, the masculine gender includes the feminine and neuter and the singular number includes the plural. Designations and paragraph headings used herein are for convenience only and shall not be controlling in the interpretation of this Agreement. (g) Entire Agreement. This Agreement constitutes the sole agreement between the parties and supersedes any and all other Agreements, whether oral or written, with respect to the obligations identified herein. The parties acknowledge that no representations, inducements, promises, or agreements, whether oral or otherwise, have been made by any party or anyone acting on behalf of any party which is not embodied herein; and that no other agreement, statement, or promise not contained in this Agreement regarding the provisions of this Agreement shall be valid or binding. (h) Legal Counsel; Ambiguities. Each party acknowledges that it has had the opportunity to have this Agreement reviewed by legal counsel prior to executing the Agreement, and no presumption or rule that ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. (i) Attorneys' Fees. If any action or proceeding is instituted by any person to enforce or interpret the provisions hereof, the prevailing party in such action or proceeding shall be entitled to recover from the other party or other parties as costs and expenses incurred in connection therewith, including, without limitation, reasonable attorneys' fees and the costs and expenses of litigation. (j) Effective Date. This Agreement has been executed to be effective upon its recordation in the Official Records of Sacramento County, California. (k) Notices. Any notice, payment or instrument required or permitted by this Agreement to any party shall be deemed to have been received when personally delivered to any party or seventy-two (72) hours following deposit of the same in any United States Post Office, first class, postage prepaid, addressed as follows: COUNTY: County of Sacramento R&B: Reynen & Bardis
Development, LLC RMA: Rancho Murieta Association
REYNEN & BARDIS DEVELOPMENT,
LLC,
Its: ___________________________
Its: ___________________________
By:__________________________________
w:\deptrans\plncomdv\2003\rancho murieta bridge\mou-rb-8-15-03 clean.doc
Bridge Proposal
Funding Schedule
(Form of Letter of Credit) IRREVOCABLE LETTER OF CREDIT ________________________, 200__ __________________________ Dear Sirs: We hereby establish, at the request and for the account of [insert name of Property Owner or Substitute Transferee] ____________________________, a _________________________ [partnership, individual, trust, etc., as applicable], (the “Account Party”) in your favor, as “Beneficiary” pursuant to that certain), dated as of Agreement Affecting Real Property dated ___________, 2003 (the “Agreement”) by and between Reynen & Bardis Development, LLC, a California limited liability company, Rancho Murieta Association, a California nonprofit corporation, and the County of Sacramento, our Irrevocable Letter of Credit No._______________, in the amount of $1,084,200.00 (the “Stated Amount”), effective immediately and expiring on August 31, 2008 (the “Stated Termination Date”). We hereby irrevocably authorize you to draw on us in an aggregate amount not to exceed the Stated Amount of this Letter of Credit set forth above and in accordance with the terms and conditions and subject to the reductions in Stated Amount as hereinafter set forth, (1) in one or more drawings by one or more of your drafts, each accompanied by your written and completed certificate signed by you in substantially the form of Annex “1” attached hereto (any such draft accompanied by such certificate being your “Default Payment Draft”), and (2) in a single drawing by your draft, accompanied by your written and completed certificate signed by you in substantially the form of Annex “2” attached hereto (any such draft accompanied by such certificate being your “Final Draft”). Funds under this Letter of Credit are available to you against (1) your Default Payment Draft referring thereon to the number of this Letter of Credit and accompanied by your written and completed certificate signed by you in substantially the form of Annex“1” attached hereto, and (2) your Final Draft referring thereon to the number of this Letter of Credit and accompanied by your written and completed Certificate signed by you in substantially the form of Annex “2” attached hereto. Each such draft and certificate shall be dated the date of its presentation, and shall be presented at our office located at _________________________, California, Attn: __________________ (or at any other office in the City of State of California which may be designated by us by written notice delivered to you) on or before 9:00 a.m. (California time) on the day (which shall be a banking day) of our making funds available to you hereunder. If we receive any of your drafts and certificates at such office, all in strict conformity with the terms and conditions of this Letter of Credit, not later than 9:00 a.m. (California time) on a banking day prior to the termination hereof, we will honor the same on the same day in accordance with your payment instructions. If we receive any of your drafts and certificates at such office, all in strict conformity with the terms and conditions of this Letter of Credit, after 9:00 a.m. (California time) on a banking day prior to the termination hereof, we will honor the same on the next succeeding banking day in accordance with your payment instructions. The phrase “banking day” shall mean any day other than a Saturday, Sunday or a day which shall be in the State of California a legal holiday or a day on which banks are authorized or obligated by law or executive order to close. The Stated Amount of this Letter of Credit shall be decreased upon (1) our payment of each Default Payment Draft or Final Draft, by an amount equal to such payment or payments, and (2) upon our receipt of your written and completed certificate signed by you in substantially the form of Annex "3” attached hereto to the new Stated Amount in said Certificate. This Letter of Credit shall automatically terminate upon the earliest of (i) the Stated Termination Date, (ii) our honoring your Final Draft presented hereunder, (iii) our honoring of a Default Payment Draft which has the effect of reducing the Stated Amount to zero ($0.00), (iv) our receipt of your written and completed Certificate signed by you in substantially the form of Annex “4” attached hereto (such Certificate being your “Termination Certificate”), or (v) the date on which we receive written notice from you that an alternate letter of credit has been substituted for this Letter of Credit in accordance with the Letter if Credit Agreement. This Letter of Credit is nontransferable. This Letter of Credit is
subject to the Uniform Customs and Practice or Documentary Credits
(1983 Revision, International Chamber of Commerce Publication No.
400). All communications with respect to this Letter of Credit shall
be in writing specifically referencing the designated Number of
this Letter of Credit and shall be addressed to us at ______________________________________,
___________________________ California,
By: The undersigned, a duly authorized officer or agent of the undersigned Beneficiary hereby certifies to ______________________ (the “Bank”), with reference to Irrevocable Letter of Credit No. _______________ (the “Letter of Credit”) issued by the Bank in favor of the Beneficiary, that: The undersigned is the duly authorized officer or agent of the Beneficiary for the purposes of submitting this Certificate. As of the date of this Certificate, the Account Party has defaulted in the payment of its funding requirement as set forth in Exhibit B to the Agreement Affecting Real Property in the total amount of $_______________ (the “Default Amount”). (c) Beneficiary hereby requests payment of the Default Amount and acknowledges that upon your payment of this draft the Stated Amount of the Letter of Credit shall be automatically reduced by the Default Amount to a new Stated Amount calculated as follows: existing Stated Amount
$_____________ Beneficiary hereby certifies for the benefit of Account Party that all amounts drawn hereunder shall be applied to defaulted payments of the funding requirement. The capitalized terms not otherwise defined herein are used herein as defined in the Letter of Credit. IN WITNESS WHEREOF, the Beneficiary has executed and delivered this Certificate as of the day of _________ day of ____________ 20__. ________________________________
Annex "2" The undersigned, a duly authorized officer or agent of the undersigned Beneficiary hereby certifies to (the “Bank”), with reference to the Irrevocable Letter of Credit No. ____________ (the “Letter of Credit”) issued by the Bank in favor of the Beneficiary, that: The undersigned is the duly authorized officer or agent of the Beneficiary for the purposes of submitting this Certificate. (b) Account Party has failed to renew the Letter of Credit or provide a substitute letter of credit within thirty (30) calendar days prior to the Stated Termination Date of the Letter of Credit. The Stated Termination Date of the Letter of Credit is _____________, 20__. This Certificate is dated and submitted to Bank not more than thirty (30) days prior to the Stated Termination Date. (c) Beneficiary hereby requests payment of the entire Stated Amount of $___________. (d) Beneficiary hereby certifies for the benefit of Account Party that all amounts drawn hereunder shall be held in trust and used or disbursed to or for the account of Account Party as provided in the Agreement Affecting Real Property. The capitalized terms not otherwise defined herein are used herein as defined in the Letter of Credit. IN WITNESS WHEREOF, the Beneficiary has executed and delivered this Certificate as of the ______ day of ______________, 20___. ________________________________ By: Annex "3" The undersigned, a duly authorized officer or agent of the undersigned Beneficiary hereby certifies to (the “Bank”), with reference to the Irrevocable Letter of Credit No. ____________ (the “Letter of Credit”) issued by the Bank in favor of the Beneficiary, that: The undersigned is the duly authorized officer or agent of the Beneficiary for the purposes of submitting this Certificate. Account Party has provided the Beneficiary with an approved recalculation of the Stated Amount of the Letter of Credit. The Stated Amount of the Letter of Credit is automatically reduced upon receipt by the Bank of the Certificate to an amount equal to $____________________ (United States Dollars ___________). The capitalized terms not otherwise defined herein are used herein as defined in the Letter of Credit. IN WITNESS WHEREOF, the Beneficiary has executed and delivered this Certificate as of the ______ day of ______________, 20__. ________________________________
The undersigned, a duly authorized officer or agent of the undersigned Beneficiary hereby certifies to (the “Bank”), with reference to the Irrevocable Letter of Credit No. ____________ (the “Letter of Credit”) issued by the Bank in favor of the Beneficiary, that: (a) The undersigned is the duly authorized officer or agent of the Beneficiary for the purposes of submitting this Certificate. The Account Party has satisfied all of its obligations under the Agreement Affecting Real Property dated ____________, 2003. Beneficiary hereby requests the Letter of Credit be automatically terminated upon delivery of this Certificate to Bank. The capitalized terms not otherwise defined herein are used herein as defined in the Letter of Credit. IN WITNESS WHEREOF, the Beneficiary has executed and delivered this Certificate as of the ______ day of ______________, 20_. _________________________ By:
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