MGENDA BILL. RECEIVED City ofsouth Gate Item No. 8 CITY COUNCIL OCT
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1 RECEIVED Item No. 8 OCT CITY COUNCIL MGENDA BILL For the Regular Meeting of October 13, 2015 Originating De artme : Communi Develo Interim Department SUBJECT: DIGITAL SIGN CONVERSION AGREEMENT WITH EL PASEO CENTER SPE, LLC ACTIONS: a. Approve Agreement with El Paseo Center SPE, LLC, for conversion of a static billboard sign at the El Paseo Towne Center Plaza, Garfield side, into a double-faced digital/led advertising sign; and b. Authorize the Mayor to execute the Agreement in a form acceptable to the City Attorney; and c. Direct staff to allocate proceeds generated by this Agreement to the General Fund; and d. Authorize the Director of Community Development or his appointee to act as the City Agent and sign subsequent related documents on behalf of the City in matters required for the successful execution of the Agreement. FISCAL IMPACT: Unknown. The Agreement will provide the City with 8% of the gross, ---revenues received from the operation of the double-faced digital/led advertising sign. Total revenues will be determined by the success of the El Paseo Towne Center Plaza and its marketing consultant in leasing ad space and the rates that are charged. \j REPORT SUMMARY: In 2014, the City Council approved a settlement agreement with El Paseo Center SPE, LLC, the successor interest in El Paseo South Gate, LLC and Towne Center Plaza, LLC (herein after referred to as EPSG ). This settlement agreement resolved litigation brought against the City and the Redevelopment Agency. This settlement also included terms to allow for the conversion of the Miller Crossing Billboard (Firestone and the LA River) to be converted to a digital billboard. Initial discussions and negotiations related to the sign conversion had been based upon El Paseo Towne Center Plaza s primary signage at the corner of Firestone and Garfield, providing visibility of the sign board from both streets. Ownership issues eventually forced the conversion to utilize an existing board at Miller Crossing at the South East Corner of the center, providing visibility from Firestone Boulevard exclusively. 1 P t
2 With the success of the Firestone board, EPSG contacted the City regarding conversion of a second board on Garfield at the North West corner of the Center. As the City s Sign Ordinance is currently silent on the issue of digital billboard conversions, staff, working with the City Attorney s office has prepared an agreement with terms similar to those required for the Firestone and the LA River billboard. The proposed board will be similar in design to the Firestone and the LA River board, but will be slightly smaller and shorter to keep the board proportionate to the existing environment on Garfield. Staff has reviewed proposed designs (attached) and is satisfied that the proposed conversion will provide an appropriate and attractive improvement. Terms of the Agreement require EPSG to pay the City 8% of the Gross Revenue generated by the new sign. The Agreement also includes requirements for City use of the board for defined community uses. All normal reviews by Engineering and Building and Safety will be required. ATTACHMENTS: 1) Proposed Agreement 2) Proposed Design Drawings 2 I P a i
3 - -- B. DIGITAL CONVERSION SIGN AGREEMENT THIS DIGITAL CONVERSION SIGN AGREEMENT (the Agreement ) is made as of the day of 2015 (the Effective Date ), by and between El PASEO CENTER SPE, LLC, the successor in interest to EL PASEO SOUTH GATE, LLC and TOWNE CENTER PLAZA, LLC (hereinafter collectively EPSG ), and the CITY OF SOUTH GATE, a municipal corporation (the acting solely in its regulatory capacity as a general law city and not as Successor Agency to the Community Development Commission of the City of South Gate. EPSG and City individually are referred to as Party and collectively as Parties. This Agreement is made with reference to the following facts: j ), RECITALS A. EPSG is the record owner of certain improved real property commonly known as the El Paseo Shopping Center, 8616 S. Garfield Avenue, South Gate, California (the Shopping Center ). EPSG owns, operates and maintains an existing static billboard sign on the Shopping Center located on its westerly boundary at Garfield Avenue and desires to convert such billboard sign into a double-face digital/led advertising sign, and the City supports such conversion, subject to the terms and conditions set forth in this Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, it is agreed as follows: 1. City Cooperation. Upon full compliance with standard City procedures, including but not limited to those required by the City s Planning and Building & Safety departments, the City will support and reasonably cooperate with ESPG in the approval of a proposed conversion of the non-digital advertising sign owned by EPSG located on the westerly boundary of the Shopping Center along Garfield Avenue, being more particularly shown on Exhibit A attached hereto and made a part hereof (the Garfield Sign ), to a double-face digital/led advertising sign that will not be larger than 14 x 48 in size. 2. EPSG Obligations. 2.1 Application for Conversion. EPSG, at its sole cost and expense, will promptly submit for City approval in accordance with standard City procedures, including but not limited to those required by the City s Planning and Building & Safety departments, an application for the conversion of the Garfield Sign to a double-face digital/led advertising sign that is approximately 14 x 48 in size. 2.2 Payments to City Upon Conversion. Commencing upon the conversion of the Garfield Sign to a double-face digital/led advertising sign that is approximately 14 x 48 in size, EPSG will pay to the City eight percent (8%) of the Gross Revenue (as defined below) received each month from the Garfield Sign, payable in arrears not later than the 30 day of the following month, together with such supporting documentation as the City may reasonably request, subject to City s right to (a) inspect, copy and reproduce the books and records of the th L Digital Conversion Sign Agreement 3
4 Gross Revenue for the Garfield Sign from time to time and (b) audit the calculation of Gross Revenue from time to time, each of the foregoing items (a) and (b) upon not less than thirty (30) days? written notice to EPSG. 2.3 Definition of Gross Revenues. For purposes of this Agreement, the term Gross Revenue shall be defined as that amount of revenues received by EPSG from the Garfield Sign for each month, after deducting therefrom the costs and expenses incurred by EPSG in connection with the operation of the Garfield Sign, including any commissions or other monies paid to any independent third party sales team or operator as part of any contract or arrangement between EPSG and such third party to sell advertising on the Garfield Sign. ESPG shall keep and maintain true, complete and accurate books and records of the Gross Revenue for the Garfield Sign. 3. Maintenance of Garfield Sign. EPGS shall, at its sole cost and expense, keep and maintain the Garfield Sign in a good and safe condition and shall comply with all applicable laws regarding the use, maintenance and upkeep of the Garfield Sign. EPSG shall re-paint andlor otherwise weather-treat the Garfield Sign structure as often as reasonably necessary to CityshalLnoLberesponsible or liableiormaintaining, improving, altering or otherwise preserving the Garfield Sign. jceepth (irfleidsignprescntab1e. The 4. Insurance. ESPG shall, at its sole cost and expense, keep the Garfield Sign insured at all times with comprehensive broad form general liability insurance against loss from liability imposed for damages on account of property damage or loss and/or personal injury, including death therefrom, suffered or alleged to be suffered by any person or persons whomsoever in connection therewith in such amount as appropriate for the Shopping Center. 5. City Has No Obligation To Provide Security. Other than the fire department and the police department services and other public services generally provided by the City to its residents and businesses, the City has no specific obligation, nor does the City intend to ever undertake any specific obligation, to provide security for the Garfield Sign. 6. Waiver of Claims. ESPG hereby waives, releases and discharges the City, and the City s elected officials, employees, officers, agents and representatives, from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, present and future, arising out of or in any way connected with ESPG s conversion of the Garfield Sign to a double-face digital/led advertising sign that is approximately 14 x 48 in size or the use, maintenance, or operation of the Garfield Sign after such conversion. Notwithstanding the foregoing, ESPG has no obligation to waive any claims arising from the willful and/or negligent acts or omissions of the City or the City s elected officials, employees, officers, agents and representatives. 7. Event of Default. As used herein, the term Event of Default means a failure by ESPG or the City to observe and perform any other provision of this Agreement where such failure continues for thirty (30) days after written notice thereof by the non-defaulting party to the defaulting party; provided, however, that if such default is not susceptible of cure within such thirty (30)-day period, but is susceptible of cure within a reasonable period of time, then no L Digital Conversion Sign Agreement 4
5 Event of Default shall occur hereunder unless the defaulting party shall fail to commence to cure such default within such thirty (30)-day period or shall fail to diligently pursue the cure of such default to completion within a reasonable period of time thereafter. 8. Remedies Upon Event of Default. Upon the occurrence of any Event of Default by either the ESPG or the City, including a party s failure to cure such Event of Default during the applicable cure period, the non-defaulting party shall have the right, but not the obligation, to (a) bring an action in the Los Angeles County Superior Court against the defaulting party seeking injunctive relief to prevent the defaulting party from continuing the Event of Default; (b) bring an action in the Los Angeles County Superior Court against the defaulting party for money damages; and/or (c) pursue any and all other rights and remedies available at law. Each right and remedy of the non-defaulting party provided for herein or now or hereafter existing at law or otherwise shall be cumulative and shall not preclude the non-defaulting party from exercising any other rights or remedies provided for in this Agreement or now or hereafter existing at law or otherwise. 9. Miscellaneous. 9.1 Notices. All notices required to be given pursuant to the terms hereof shall be in writing and shall be either (a) deposited in the United States express mail or first class mail, registered or certified, return receipt requested, postage prepaid, or (b) delivered by FedEx or a similar regional or national overnight courier service for next-day delivery that requires written acknowledgment of receipt by the addressee. All such notices shall be deemed delivered upon actual receipt (or upon the first attempt at delivery pursuant if the intended recipient refuses to accept delivery). All such notices shall be delivered to the following addresses, or to such other address as the receiving party may from time to time specify by written notice to the other party: To the City: City of South Gate 8650 California Avenue South Gate, CA Attn: Director of Community Development Tel. No.: (323) Fax No.: (323) padamssogate.org To EPSG: El Paseo Center SPE, LLC do o Civic Finance Associates 603 Great Springs Road Bryn Mawr, PA Attn: Benjamin L. Noble, President Tel. No.: (610) Fax No.: (610) blnoble@cfainc.net L Digital Conversion Sign Agreement by
6 9.2 Time. Time is of the essence of every provision contained in this Agreement. If the date ( Performance Date ) on which any action is to be taken, any obligation is to be performed, or any notice is to be given under this Agreement falls on a Friday when South Gate City Hall is closed for business, or on a Saturday, Sunday or holiday, such Performance Date shall be automatically extended to the next business day. Except as otherwise expressly provided herein, all references to periods of days shall refer to consecutive calendar days. 9.3 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns. This Agreement may be assigned by either ESPG or the City or by their respective successors or assigns. ESPG s interest hereunder may be assigned upon not less than thirty (30) days prior written notice to the City, which notice shall identify the name and contact information of the assignee. Additionally, ESPG shall have the right to license andlor sublicense its rights hereunder, and ESPG shall provide written notice thereof to the City within a reasonable time thereafter. 9.4 Incorporation of Recitals and Exhibits. All of the recitals set forth in hy this reference incorporated in and made a part of this Agreement as though fully set forth herein. thiagmcnt,aiid 9.5 Attorneys Fees. If either Party brings suit against the other with respect to this Agreement, then all costs and expenses, including without limitation actual professional fees and costs such as appraisers accountants experts, and attorneys fees and costs, incurred by the prevailing party (whether that Party prevails by final judgment or out-of-court settlement) shall be paid by the losing party. The losing party s obligation shall be deemed to have accrued on the date of the commencement of such actions and shall be enforceable whether or not the action is prosecuted to judgment. As used herein, the term attorneys fees and costs shall include, without limitation, attorneys fees, costs, and expenses incurred in connection with any (a) post-judgment motions, (b) contempt proceedings, (c) garnishment, levy, and debtor and third-party examinations, (d) discovery, and (e) bankruptcy litigation. As used herein, the term prevailing party shall include without limitation any party against whom a cause of action, complaint, cross-complaint, counter-claim, cross-claim or third party complaint is voluntarily dismissed, with or without prejudice. 9.6 Construction. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereto. 9.7 Governing Law. This Agreement shall be shall be construed and interpreted in accordance with, and shall be governed and enforced in all respects according to, the laws of the State of California. All claims relating to or arising out of this Agreement, or the breach thereof, whether sounding in contract, tort or otherwise, shall likewise be governed by the laws of the State of California. No effect shall be given to any choice of law or conflict of law provision, principal or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California L Digital Conversion Sign Agreement 6
7 9.8 Consent to Jurisdiction and Service of Process. All judicial proceedings brought against any Party hereto arising out of or relating to this Agreement may be brought in any state or federal court of competent jurisdiction in the County of Los Angeles, State of California, and by execution and delivery of this Agreement each Party accepts for itself and in connection with its properties, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts (both personal jurisdiction and subject matter jurisdiction), waives any defense offorum non conveniens and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Each Party hereby agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to any other party at its address provided herein, such service being hereby acknowledged by each Party to be sufficient for personal jurisdiction in any action against said party in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any other manner permitted by law. 9.9 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. In addition, this Agreement may contain more than one counterpart of the signaturepage and may beexecutedbytheaffixingof_thesignatures of each-of the--partiesto-any one of such counterpart signature pages; all of such counterpart signature pages shall read as though one and they shall have the same force and effect as though all of the signers had signed a single signature page Entire Agreement. This Agreement contains the entire understanding of the Parties and supersedes any and all other written or oral understanding. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the Party or parties sought to be charged or bound by the alteration or amendment Captions. Any captions or headings to the Sections and subsections in this Agreement are solely for the convenience of the Parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of validity of this Agreement or any provision hereof, and in no way define, limit or prescribe the scope or intent of this Agreement or any provisions thereof Severability. If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable term or provision had never been contained herein Further Assurances. Each Party shall cooperate with the other and shall execute such other documents as may be reasonably necessary to carry out the provisions of this Agreement No Waiver. Any waiver, consent or approval by either Party of any breach, default or event of default of any provision, condition or covenant of this Agreement must be in writing and shall be effective only to the extent set forth in writing. No waiver of any [ Digital Conversion Sign Agreement
8 breach, default or event of default shall be deemed a waiver of any later breach, default or event of default of the same or any other provision of this Agreement. Any failure or delay on the part of either Party in exercising any power, right or privilege under this Agreement shall not operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude any further exercise thereof Rights and Remedies. No right or remedy conferred by any of the specific provisions of this Agreement is intended to be exclusive of any other right or remedy given hereunder or hereafter existing at law or in equity. The exercise of any one or more rights or the election of any one or more remedies by any Party shall not constitute a waiver of the right to exercise other available rights or pursue other available remedies Joint and Several Liability. To the extent that either Party constitutes more than one person or entity, then the obligations of each such person or entity shall be joint and several Relationship of Parties. Nothing contained in this Agreement or in the shallbc 4ecrned I QnstitUteap&tnerShp,JQnt venture or any other relationship between them except that of grantor and grantee. cicjrtis 9.18 Force Maieure. If either Party is delayed or hindered in, or prevented from, the performance of any act required under this Agreement by reason of a Force Majeure as defined below, then performance of such act will be excused for the period of delay and the period for the performance of any such act will be extended for a period equivalent to the period of such delay. Notwithstanding the foregoing, however, nothing in this Section shall excuse either Party from the prompt payment of any amounts owing by that Party under this Agreement. Further notwithstanding the foregoing, no Force Majeure event shall excuse the delay of either party s performance by more than sixty (60) days. As used herein, the term Force Majeure means any one or more of the following to the extent not caused by the party claiming the delay: (a) fire, earthquake, flood or other natural disaster; (b) interruption of any public utilities, including without limitation electricity, gas, water, sewer or telephone service; (c) governmental action or inaction, including without limitation failure, refusal or delay in issuing permits, approvals andlor authorizations; (d) restrictive governmental laws, regulations or orders; (e) strikes, lock-outs, or similar labor interruptions; (f) inability to procure necessary construction materials; (g) riots, civil unrest or insurrection; (h) criminal activity; (i) terrorism; (j) war; or (k) any other unusual and unforeseeable delay not within the reasonable control of the Party delayed No Third-Party Beneficiaries. Except for the rights expressly granted to the Miller Way Tenant hereunder, the Parties hereto acknowledge and agree that no provision in this Agreement may be enforced by any third party. [signatures of the parties on following page] I Digital Conversion Sign Agreement
9 By: - Benjamin in WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above. EPSG EL PASEO CENTER SPE, LLC, a Delaware limited liability company By: EL PASEO SOUTH GATE, LLC, a California limited liability company, its Sole Member By: EL PASEO CENTER, INC., a Delaware corporation, its Manager By: L.Nob1e,President CITY CITY OF SOUTH GATE, a California municipal corporation Jorge Morales, Mayor Attest: Carmen Avalos, City Clerk A ovedasto rm: R ul F. Salinas, ity Attorney L Digital Conversion Sign Agreement 9
10 Exhibit A Site Plan Showing Location of Garfield Sign Digital Conversion Sign Agreement
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