Agenda Item AGENDA STAFF REPORT ASR
Control 20-001056 |
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MEETING DATE: |
12/15/20 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
5 |
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SUBMITTING
Agency/Department: |
County Executive Office (Approved) |
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Department contact
person(s): |
Thomas Miller (714) 834-6019 |
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Stacy Blackwood (949) 923-3743 |
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Subject: Resolution Confirming
Authority for and Ratification of Dana Point Harbor Leases
ceo CONCUR |
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Clerk of the Board |
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Concur |
Approved Resolution to Form |
Consent Calendar |
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3 Votes Board Majority |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 07/17/2018
#27 |
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RECOMMENDED ACTION(S):
Adopt a Resolution confirming that the Chief Real Estate Officer or designee had the authority to execute the October 29, 2018, ground lease agreements with Dana Point Harbor Partners, LLC and Dana Point Harbor Partners Drystack, LLC under the authority granted by the Board of Supervisors on July 17, 2018, ratifying those agreements, and finding that the cancellation and re-formation of Dana Point Harbors Partners Drystack, LLC did not impact that authority.
SUMMARY:
Approval of the Resolution will confirm that the Chief Real Estate Officer or designee could execute the Lease Agreement with Dana Point Harbor Partners, LLC and Dana Point Harbor Partners Drystack, LLC under the authority granted by the Board of Supervisors on July 17, 2018, and ratifies the Lease Agreements.
BACKGROUND INFORMATION:
In 2015, the Board of Supervisors (Board) directed staff to pursue a Public-Private Partnership (P3) to finance, design, build, operate and maintain all components (marinas, commercial core, hotel and parking) of the Dana Point Harbor (Harbor) Revitalization Plan, capitalizing on a private partner’s industry expertise and its ability to finance and carry out the project in a more cost-effective and efficient manner.
In 2016, the County solicited proposals from the private sector for the revitalization of the Harbor. After a two-year review process, the County selected Dana Point Harbor Partners, LLC (DPHP), a company co-managed by Bellwether Financial Group, Inc. (Bellwether), Burnham-Ward Properties, LLC (Burnham-Ward) and Olson Real Estate Group, Inc. (Olson), as the primary developer for the lease, and development and management of certain portions of Harbor. During the two-year review process, the County and DPHP determined that it would be beneficial to also enter into a second option and lease for a discreet portion of the Harbor known as the dry stack/embarcadero. Dana Point Harbor Partners Drystack, LLC (Drystack) was formed for the purpose of entering into that second option and ground lease. Drystack was originally organized as a wholly-owned subsidiary of DPHP, with DPHP as its sole member and manager. When it was originally formed, the California Secretary of State assigned Drystack file number 201819910044.
On July 17, 2018, the Board approved the option agreements with DPHP and Drystack, authorized the Chief Real Estate Officer or designee to execute the option agreements, approved the ground lease agreements with DPHP and Drystack and authorized the Chief Real Estate Officer or designee to execute the ground lease agreements. Under the operational structure approved by the Board in the option agreements and ground lease agreements with DPHP and Drystack, Bellwether would be generally responsible for the Marina/Dry Boat Storage Component of the revitalization, Burnham-Ward would be generally responsible for the Commercial Core Component of the revitalization and Olson would be generally responsible for the Hotel Component of the revitalization. Pursuant to this authority, on July 30, 2018, the Chief Real Estate Officer executed an option agreement with DPHP and an option agreement with Drystack.
On October 16, 2018, the entity Drystack was cancelled via filing with the California Secretary of State. On October 17, 2018, it was re-formed with the same name and with Bellwether, Burnham-Ward and Olson as co-managers, replacing DPHP in that role. The California Secretary of State assigned the re-formed Drystack entity file number 201829010678.
The Chief Real Estate Officer was made aware of the above-referenced cancellation and re-formation and considered it to be immaterial and not an assignment under the option agreements as the corporate structure was substantially the same and the entities were made up of the same companies. Most importantly, following the cancellation and re-formation of Drystack, under the option agreements and ground lease agreements referenced above, Bellwether would still be generally responsible for the Marina /Dry Boat Storage Component of the revitalization, Burnham-Ward would still be generally responsible for the Commercial Core Component of the revitalization and Olson would still be generally responsible for the Hotel Component of the revitalization.
On October 29, 2018, the Chief Real Estate Officer’s designee executed a ground lease agreement with DPHP and a ground lease agreement with Drystack pursuant to the authority granted by the Board on July 17, 2018.
The proposed Board resolution would serve to confirm that even with the Drystack corporate restructuring that occurred between the option and ground lease execution, the Chief Real Estate Officer or designee had the authority to execute the ground lease agreements with DPHP and Drystack, under the authority granted by the Board on July 17, 2018. Additionally, the resolution would eliminate any doubt that the ground lease agreements have been and remain valid by ratifying the ground lease agreements as of the date that they were executed, October 29, 2018, pursuant to the authority delegated on July 17, 2018.
FINANCIAL IMPACT:
N/A
STAFFING IMPACT:
N/A
REVIEWING AGENCIES:
OC Community Resources/OC Parks
ATTACHMENT(S):
Attachment A – Draft Board Resolution Confirming Authority of Lease and Ratification of Dana Point Harbor Leases