Report to Mayor and City Council
Tuesday, February 19, 2019
Discussion
SUBJECT:
Title
CONSIDER A TRIPARTY SETTLEMENT AGREEMENT BETWEEN SHIPPERS TRANSPORT EXPRESS, INC. ("SHIPPERS"), TESORO LOGISTICS OPERATIONS LLC ("TESORO"), AND THE CITY OF CARSON TO EXTEND THE DEADLINE BY WHICH SHIPPERS MUST TERMINATE OPERATIONS AND VACATE THE SITE LOCATED AT 1150 EAST SEPULVEDA BOULEVARD, CARSON ("SITE") AND TO SETTLE THE PARTIES' DIFFERENCES REGARDING THE AMOUNT OF EXTENSION FEES, DEPOSITS, AND DELINQUENT DEPARTURE PENALTY PAYMENTS DUE FROM SHIPPERS AND/OR TESORO TO THE CITY (CITY COUNCIL)
Body
I. SUMMARY
On February 5, 2019, the City Council continued this item and gave direction for City staff, Shippers, and Tesoro ("Parties") to negotiate a settlement agreement to resolve the disputes between the Parties regarding the payments due from Shippers and Tesoro under Resolution 17-088 ("Compliance Resolution") in order to allow for an extension to the deadline by which Shippers must terminate operations and vacate the Site. Per Council direction at the February 5, 2019 Council meeting, the City Attorney, acting through the Council Subcommittee, negotiated with Shippers to reduce the amount of the extension fee payments and deposits due from Shippers/Tesoro under the Compliance Resolution. It is important to note although the Council asked for Tesoro to be involved in these discussions, Tesoro participated in the initial conference call but then completely stayed out and Shippers was the only entity negotiations. Originally, the City and Shippers agreed to the following:
* Shippers/Tesoro would not be required to pay the delinquent departure penalty fee payments that have accrued under the Compliance Resolution (i.e., $180,000).
* Although the City is entitled to recover all of its attorneys' fees incurred in the negotiation of the Settlement Agreement, the Subcommittee has agreed to waive payment of the attorneys' fees due under the Compliance Resolution.
* Shippers/T...
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