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HomeMy WebLinkAbout11. Auth CM to Execute MOU w-Champion Auto Group for Maserati Sales at 9715 Firestone Blvd.APPROVED BY CITY MANAGER TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: OFFICE OF THE CITY MANAGER BY: ALDO E. SCHINDLER, DIRECTOR OF COMMUNITY DEVELOPMENT DATE: MARCH 26, 2019 RECOMMENDATION That the City Council authorize the City Manager to execute a Memorandum of Understanding with Champion Auto Group, LLC, for the use of their existing Alpha Romero/Fiat dealership to sell Maserati vehicles at 9715 Firestone Boulevard; and authorize the City Manager to execute any and all amendments to the agreement. Recently, City staff were informed by the owner of the Champion Chrysler/ Dodge/Jeep/RAM/ Alfa Romeo/Fiat ("Champion") that he had successfully obtained permission to sell Maserati vehicles at his existing dealership. This opportunity has materialized as a result of the success of the existing Champion dealership. Thus, the owner of Champion is interested in expanding the franchise to introduce a Maserati brand of vehicles. Fiat Chrysler Automobiles, which currently does business with Champion determined recently that the Maserati brand would expand in worldwide sales from the base amount of 15,400 units in 2013. Since 2013, Maserati North America ("Maserati") has been increasing the number of dealerships in the continental United States; from 74 dealerships in 2013 to 142 in 2018. Today, there are approximately 17 Maserati dealerships in California. Maserati is looking to expand its dealerships in the California to take advantage of California's car culture. The proposed Downey Maserati dealership would be one of four in the Los Angeles Basin, and one of nine in Southern California. The closest dealership is over 17 miles away from the proposed Downey Maserati dealership. Downey Maserati will draw a pipeline of consumer access drawing from the South Bay, Long Beach, San Gabriel Valley, South West Los Angeles and North Orange County markets. Champion and Maserati have entered into a "Letter of Intent" to establish the Downey auto dealership. Champion has requested that Maserati enter into a Dealer Agreement, including additional terms and provisions, among other things, the exclusive display, sale and service of the Maserati vehicle line at the existing Champion dealership. MEMORANDUM OF UNDERSTANDING WITH CHAMPION AUTO GROUP, LLC, TO FACILITATE THE SALE OF MASERATI VEHICLES MARCH 26, 2019 PAGE 2 Maserati has agreed to enter into the requested terms with Champion, subject to Champion performing all requirements and terms of the Letter of Intent in a timely manner, including but not limited to: 1. Provide verification that no challenges from other Maserati dealers exist; 2. Facility must comply with Maserati's materials and branding guidelines; 3.- -Ability to host Maserati sales, office, service and parts departments; and, 4. Submission and approval of designs, construction plans, and facility requirements. City staff seeks to execute a Memorandum of Understanding ("MOU") that will allow Champion to immediately start selling Maserati vehicles at their current location; while continuing to work with Champion to establish a permanent Maserati dealership. The term of the MOU is 18 months. This estimates the time required for Champion to execute an agreement with Maserati; design, construct and open the new Maserati dealership. Attracting a Maserati dealership to the City of Downey is a tremendous undertaking for Champion and the City. Constructing and establishing the dealership will be just as monumental. Champion may continue to seek partnership opportunities with the City, in the form of economic development assistance. The execution of this MOU is the first step in bringing a Maserati dealership to the City of Downey. Efficiency & Adaptability Economic Vibrancy This item will not impact the City's General Fund. ATTACHMENTS Attachment A:: Site Aerial Attachment B Site Photo Attachment C.; Memorandum of Understanding between the City of Downey and Champion Auto Group, LLC. 1' ` , r r I I I 1 9 1 1 1 $1 1 b I I O M 1110 1 1 N WIN � ILIA OMER ka.4 1110irm I A I I ZZ11 , k1t, This Memorandum of Understanding ("MOU" or "Agreement") is entered into y an f-,TEY, a California charter cit_k,,, and -boratiod� CHAMPION AUTO GROUP, LLC ("OWNER"), for the use of property in the City as a temporary market test, as further described herein. CITY and CHAMPION AUTO GROUP, LLC shall be collectively referred to herein as "Parties." WHEREAS, OWNER currently owns and operates three automobile dealership franchises in the City, including Champion Dodge, Champion Jeep and Champion Fiat; and WHEREAS, OWNER has provided CITY a proposal to develop a new dealership, Downe Maserati and Alfa Romeo ("Dealership") in the City; and I WHEREAS, the proposed Dealership would be one of four in the Los Angeles Basin and one of nine in Southern California and the closest other Maserati dealership is approximately 17 miles away from the proposed Dealership; and R -q WHEREAS the Dealership represents a pipeline of consumer access d� rawin• from t'l ran ge , Co� South Bay, Long Beach, San Gabriel Valley, South West Los Angeles and North 01 un markets. Los Angeles County represents approximately 12.5 million residents or approximate 28% of the State's population and consumer market; and WHEREAS, OWNER anticipates requesting economic development assistance from CITY in the process of opening the Dealership at 9715 Firestone Boulevard (the "Development"); and WHEREAS, the process of securing the economic development assistance, entitling t Development (all at the CITY's sole discretion) and constructing the Dealership may ta anywhere from six to 18 months; and I WHEREAS, OWNER has identified a site within the CITY where a temporary showroom mri entitlements (the "Temporary Use"); and WHEREAS, OWNER seeks to test the market conditions in the CITY prior to opening the Flealership in order to ensure a smooth and productive opening of the Dealership; and WHEREAS, CITY is amenable to allowing the Temporary Use for no more than 18 mont to allow OWNER to test the market while preparing to open the Dealership; and I 6518&00009\31848591,3 Attachment "C" WHEREAS, this MOU shall supersede and replace any previous agreements between CITY znd OWNER related to the Dealership. 1. Agreement Contents B. This Agreement may be amended only by written instrument executed by each of the Parties. 2. Scone of MOU A. OWNER shall be responsible for the timely and accurate preparation and submission to CITY of any and all required applications for permits and other discretionary approvals necessary to allow the Temporary Use, all at OWNER's sole cost and expense. 15.1% OWNER and CITY shall cooperate to ensure the eventual development of the Dealership within 18 months after the approval • this MOU. The economic development assistance if any, will be • terms mutually agreeable to the Parties • subject to the preparation, negotiation and approval of a separate, new and independent agreement. To that end, the •. hereby promise to cooperate in •••+ faith towards the eventual preparation and consideration of said agreement. Such cooperation shall include, but not be limited to the • of written documentation and information, including any and all building plans and specifications, architectural drawings and designs and any and all • documentation pertaining to the Dealership that a Party reasonably requests. A. The Term of this Agreement shall begin on the Effective Date of the Agreement and continue until September 30, 2020, hereinafter referred to as the "Completion Date," unless terminated earlier as provided herein. 4. Program Management A. All work under this Agreement shall be coordinated with CITY and OWNER through the Project Managers. 1) • purposes of this MOU, CITY designates the following Project Manager: Aldo Schindler Director of Community Development City of Downey 562-904-7151 aschindler@downeyca.org 65186.00009\31848591.3 2) For purposes ,• this MOU, OVVNER designates the following individual as i Project Manager: I • Antepara President 11• Maserati 9715 Firestone Blvd. Downey, CA 90241 (56 2) 862-3993 5. Mutual Indemnification A. Neither CITY nor any officer or employee thereof shall be responsible for any damage or • occurring by reason • anything done • omitted to •` •i by OWNER, • their officers, agents, employees, contractors and subcontractors in connection with this Agreement. CITY shall indemnify, defend and hold OWNER, and their respective • agents and employers harmless from any liability and expenses, including without limitation, •` costs, any costs • liability for any claims for damages • any nature whatsoever arising out of or to the extent caused by any act or omission of CITY or its officers, agents, employees, contractors or subcontractors in connection with this Agreement. Neither OVTNER, nor any officer or employee thereof shall be responsible for any damage or liability occurring by reason •r • ••' • omitted to •` •• by CITY, and by its • agents, employees, contractors and subcontractors in connection with this Agreement. OWNER shall indemnify, defend and hold CITY, and their respective officers, •- and employees harmless from any liability and expenses, including • limitation, defense • any costs or ,• for any claims for damages of any nature • arising out of and to the extent caused by any act or omission of OWNER • its • agents, employees, contractors or subcontractors in connection with this Agreement. If through any cause, OWNER fails to fulfill in a timely and proper manner ts o igations •- this Agreement, or • any •'i the terms • conditions • this Agreement •r applicable Federal or State laws and regulations, CITY may terminate this Agreement upon thirty (30) calendar days written notice to OWNER. If through any cause, CITY fails to fulfill in a timely and proper manner its obligations under this Agreement, or violates any of the terms or conditions of this Agreement, or applicable Federal or State laws and regulations, OWNER may terminate this • upon thirty (30) calendar •, written notice to CITY. Upon termination, OWNER shall reimburse CITY all of CITY's costs in performing this Agreement. 65186.00009\31848591.3 8. Miscellaneous A. This Agreement contains the entire understanding between the Parties and supersedes a prior written or oral understandings and Agreements regarding the subject matter of th Agreement. There are no representations, agreements, arrangements or understanding oral or written, between the Parties relating to the subject matter of this Agreement, whic are not fully expressed herein. B. This Agreement shall be construed and interpreted under the laws of the State of Californi C. In the event any part of this Agreement is declared by a court of competent jurisdiction be invalid, void, or unenforceable, such part shall be deemed severed from the remainder the Agreement and the remaining provisions shall continue in full force without bei impaired or invalidated in any way. D. No party may assign this Agreement or any part hereof, without written consent and pri• approval of the other party's authorized representative, and any assignment without sai consent shall be void and unenforceable. The covenants and agreement of this Agreeme shall inure to the benefit of, and shall be binding upon, each of the parties and the respective successors and assignees. E. No amendment, modification, alteration or variation of the terms of this Agreement shall be valid unless made in writing and signed by authorized representatives for the Parties hereto and no oral understanding or Agreement not incorporated herein shall be binding on any of the Parties thereto. CITY may request, at any time, amendments to this Agreement and will notify OWNER regarding such changes. Within ten (10) calendar days from the date of the written notice, CITY shall notify OWNER of the impact of such changes on the Scope of Work, schedule, and budget. Upon agreement between the Parties as to the required changes, an amendment to this Agreement shall be prepared regarding the same. F. The Parties agree to submit any disputes arising under this Agreement to neutral mediation before resorting to litigation. G This Agreement shall be deemed an Agreement under the laws of the State of California and for all purposes shall be interpreted in accordance with such laws. Both Parties hereby agree and consent to the exclusive jurisdiction of the courts of the State of California and that the venue of any action brought thereunder shall be Los Angeles County, California. 1. Notices: Any notice required or permitted under this Agreement, shall be in writing and shall be deemed served if sent by registered mail addressed as follows, unless otherwise notified in writing of a change of address: -71MIC OTOT-Ilp City of Downey 11111 Brookshire Avenue 65186.00009\31848591.3 Downey, CA 90241 Phone: (562) 904-7151 U 0214 To OWNER: Paul Antepara President Champion Maserati 9715 Firestone Blvd. Downey, CA 90241 (562) 862-3993 paulantepara@yahoo.com J. Each party to this Agreement represents and warrants to the other Parties that it is authorized to execute, deliver and perform this Agreement, and the terms and conditions hereof are valid and binding obligations of the party making this representation. K CITY shall maintain complete and accurate records with respect to all funds received fro OWNER, costs and expenses incurred, and disbursements made under this Agreement. A such records shall be clearly identifiable. CITY shall allow a representative of OWNE during normal business hours to examine, audit, and make transcripts or copies of suc records and any other documents created pursuant to this Agreement. CITY shall allo inspection of all work, data, documents, proceedings, and activities related to Agreement for a period of three (3) years from the Completion Date. L All rights and obligations hereunder that by their nature are to be per orme•a er any expiration or termination of this Agreement shall survive any such expiration or termination. M. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. off 0. This Agreement, including any attachments or exhibits, constitutes the entire Agreement o the Parties with respect to its subject matter and supersedes all prior and contemporaneou representations, proposals, discussions and communications, whether oral or in writing This Agreement may be changed or modified only by a written amendment signed b authorized representatives of both Parties. I P. The Effective Date of this Agreement shall be date in which the last of the Parties executes this document. 65186.00009\31848591.3 WITNESS WHEREOF, the Parties hereto have caused their duly authorized representatives execute this Agreement. i i ii By: Name Date Title By: 113 Ruben Duran, Special Counsel Date Best Best & Krieger LLP By: Paul Antepara Title: Date WITNESS WHEREOF, the Parties hereto have caused their duly authorized representatives to execute this Agreement. CITY OF DOWNEY By: Name Date Title By, Ruben Duran, Special Counsel Date Best Best & Krieger LLP NAM, i OWNER,L By Paul tep a ate Title: 65186.00009131848541:3 WITNESS WHEREOF, the Parties hereto have caused their duly authorized representatives execute this Agreement. I By: Gilbert A. Livas Date City Manager By: Ruben Duran, Special Counsel Best Best & Krieger LLP By: Paul Anteary Title: Date Date