HomeMy WebLinkAboutCDC/2007-22
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RESOLUTION NO. CDC/2007-22
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE A
REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO
NEGOTIATE AGREEMENT BY AND BETWEEN THE AGENCY AND
GALAXY COMMERCIAL HOLDING, LLC ("DEVELOPER") (CENTRAL
CITY REDEVELOPMENT PROJECT AREA)
WHEREAS, the Redevelopment Agency of the City of San Bernardino ("Agency") owns
certain property within the Central City Redevelopment Project Area (the "Project Area"), as
generally depicted in Exhibit "A" (the "Property") attached to the Redevelopment Project Study
and Exclusive Right to Negotiate Agreement ("Agreement"); and
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WHEREAS, the Agency and Galaxy Commercial Holding, LLC (the "Developer"), are
interested in exploring the development feasibility of the Property so as to foster the community
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economic development goals and objectives of the City of San Bernardino (the "City"), as it relates
to the redevelopment plan for the Proj ect Area; and
WHEREAS, the Developer is qualified to assist the Agency to undertake the development
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feasibility for a coordinated and economically sustainable redevelopment project on the Property,
which will require specific study, evaluation and planning by the City and the Agency, as
applicable, of appropriate and feasible community redevelopment program alternatives; and
WHEREAS, in accordance with the provisions of the California Environmental Quality Act
("CEQA"), the Agreement is exempt from the provisions of CEQA.
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NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO DOES HEREBY FIND AND DETERMINE, AS FOLLOWS:
Section 1.
The Community Development Commission of the City of San Bernardino
(the "Commission") hereby approves the Agreement by and between the Agency and the
Developer in the form as presented at the meeting of the Commission at which this Resolution is
adopted and hereby authorizes the Executive Director of the Agency to execute the Agreement on
behalf of the Agency, together with such technical and conforming changes as recommended by the
Executive Director of the Agency and approved by the Agency Counsel.
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I Section 2.
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The Commission hereby finds that the Agreement is exempt from CEQA.
The Resolution shall become effective immediately upon its adoption.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE
REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO
NEGOTIATE AGREEMENT BY AND BETWEEN THE AGENCY AND
GALAXY COMMERCIAL HOLDING, LLC ("DEVELOPER") (CENTRAL
CITY REDEVELOPMENT PROJECT AREA)
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7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
8 Development Commission of the City of San Bernardino at a ioint reeular
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meeting
,2007, by the following vote to wit:
Abstain
Absent
ecretary
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21 The foregoing Resolution is hereby approved this /1 day of July
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,2007.
Patr R J. Morns, erson
munity Development Commission
of the City of San Bernardino
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Approved as to Form:
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Agency c-:Er-
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CDC/2007-22
REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
REDEVELOPMENT PROJECT STUDY AND
EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT
GALAXY COMMERCIAL HOLDING, LLC
(CENTRAL CITY REDEVELOPMENT PROJECT AREA)
THIS REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE
AGREEMENT is dated as of July 16, 2007 (this "Agreement"), and is entered into by and between
Galaxy Commercial Holding, LLC (the "Developer"), a California limited liability company,
authorized to do business in the State of California, and the Redevelopment Agency of the City of San
Bernardino (the "Agency"), a public body, corporate and politic, in light of the facts set forth in the
following recital paragraphs:
RECITALS
A. The Agency desires to encourage and effectuate the redevelopment of certain real
property, located within the Central City Redevelopment Project Area (the "Project Area").
B. The Agency is the fee owner of approximately two (2) acres generally known as Court
Street Square and the Court Street Parking lot (collectively, the "Property") which consists of
improved land. The Property (the "Study Area") consists of two (2) parcels numbered APN: 0134-
251-57 and 59 is currently zoned for commercial use (CR-2). The Property is located on the southeast
corner of Court and "E" Streets, downtown and depicted on the Study Area Map as depicted on Exhibit
"A" attached hereto and incorporated herein by this reference (which illustrates the Study Area for
purposes of this Agreement).
C. The Agency is prepared to consider and study specific proposals and plans to facilitate
the development of the Study Area so as to foster the community economic development goals and
objectives of the City.
D. The Developer is qualified to assist the Agency to undertake the study of specific
proposals and plans for a coordinated and economically sustainable redevelopment project on the
Study Area which will require specific study, evaluation, and planning by the City and the Agency, as
applicable, of appropriate and feasible community redevelopment program alternatives.
E. The Developer and the Agency believe it is appropriate for the Developer, in
consultation with the Agency, to undertake certain redevelopment studies and to incur certain costs, in
consultation with the Agency, as part of a program for the study of feasible redevelopment programs
for the Study Area, subject to the terms and conditions as set forth below.
AGREEMENT
IN CONSIDERATION OF THE FOREGOING RECITALS, WHICH ARE INCORPORATED
INTO THIS AGREEMENT BY THIS REFERENCE AND THE MUTUAL COVENANTS AND
PROMISES SET FORTH HEREIN, THE DEVELOPER AND THE AGENCY HEREBY AGREE,
AS FOLLOWS:
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I. Developer Acknowled!!ments and Term of A!!reement.
a. The Developer hereby acknowledges and agrees that no provision of this Agreement
shall be deemed to be an offer by the Agency or an acceptance by the Agency of any offer or proposal
from the Developer to convey any interest in the Property to the Developer. Any studies relating to the
Study Area and to the Project (as defined below) that may hereafter be undertaken by the Developer, in
its sole discretion, shall be the sole responsibility of the Developer and shall not be deemed to be
undertaken for the benefit of the Agency and the City.
b. The qualifications and identity of the Developer and its principals are of particular
importance to the Agency. The Agency relied on these qualifications and identity in entering into this
Agreement with the Developer. Accordingly, except as expressly set forth hereinbelow, during the
term of this Agreement, the Developer shall not transfer or assign all or any of the Developer's rights
or obligations set forth in this Agreement (hereinafter, collectively, a "Transfer") and no voluntary or
involuntary successor-in-interest of the Developer shall acquire any rights or power under this
Agreement except pursuant to an assignment approved in writing by the Executive Director of the
Agency. The Executive Director of the Agency shall approve or disapprove any requested Transfer
requiring Agency approval within ten (10) business days after receipt of a written request for approval
from the Developer, together with such documentation as may be reasonably required by the Executive
Director of the Agency, to evaluate the proposed transaction and the proposed assignee's/transferee's
experience and qualifications, including the proposed assignment and assumption agreement by which
the assignee expressly agrees to assume all rights and obligations of the Developer under this
Agreement arising after the effective date of the assignment, and in which the assignee/transferee
agrees to assume, or the Developer expressly remains responsible for, all performance and obligations
of the Developer arising prior to the effective date of the Transfer. The assignment and assumption
agreement shall be in a form reasonably acceptable to the Agency's legal counsel. No later than the
date the Transfer becomes effective, the Developer shall deliver to the Agency the fully executed
assignment and assumption agreement.
c. Notwithstanding any other provision set forth in this Agreement to the contrary, the
Agency's approval of a Transfer by the Developer shall not be required in connection with any of the
following transactions:
(I) Transfers resulting from the death or mental or physical incapacity of an
individual;
(2) the approval and execution by the Developer of one or more purchase/sale
agreements, leases, and other similar agreements that are not inconsistent with
the Developer's ultimate development of the Project (as defined below), and
with the understandings that no such agreement shall be deemed to limit or
restrict the Agency's or the City's discretion with respect to the terms and
conditions of any of the Development Entitlements referred to in Section 2 or
the terms and conditions to be set forth in the Project DDA referred to in Section
7 of this Agreement and any such agreement that pertains to all or any portion of
the Property shall not be binding upon the Agency, the City or the Property until
the Project DDA is approved and executed by all parties (and then subject to
such terms and conditions that may be set forth in the Project DDA);
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(3) the granting of such temporary or permanent easements or permits as may be
requested by the City or other governmental agencies or utility companies with
jurisdiction over the Study Area or as may be necessary and appropriate to
facilitate development of the Project on the Study Area; and
(4) Transfers for financing purposes.
d. This Agreement shall automatically terminate, without further notice or action, and be
of no further force or effect twelve (12) months following the Effective Date, unless prior to that time:
(I) the parties execute the Project DDA, as described below, which will include,
without limitation, other relevant community redevelopment covenants
acceptable to the Agency and such other terms and conditions mutually
acceptable to the parties, in which case this Agreement shall terminate on the
effective date of the Project DDA; or
(2) the parties each agree to extend the term of this Agreement in writing to a
specific date not to exceed twelve (12) months beyond the initial term of this
Agreement, subject to the Executive Director of the Agency first making a
finding based upon written documentation and other facts presented to verify
that satisfactory progress is being made to complete the activities to be
performed by the Developer set forth in Section 3; for purposes of implementing
this extension provision to the term of this Agreement by and on behalf of the
Agency, and subject to said finding to be made by the Executive Director of the
Agency, (i) the Executive Director of the Agency is hereby authorized to
administratively approve one (1) extension of not to exceed six (6) months and
(ii) the Community Development Commission of the City of San Bernardino
(the "Commission") as the governing body of the Agency shall be required to
approve any extensions in excess of six (6) months but not to exceed the
aforesaid twelve (12) months; or
(3) a party terminates this Agreement as provided under Section 19 or Section 20, as
applicable, or the Developer terminates this Agreement after the conclusion of
the LOI Period as defined in and as further provided in Section 3.b.
2. The Proiect.
Subject to the terms and conditions of this Agreement, the negotiation and execution of a
mutually satisfactory Project DDA as referred to in Sections 3.g. and 7, the approval by the City, the
Agency and other governmental agencies with jurisdiction over the Study Area of the general plan
amendment, zone change and other discretionary permits and approvals that are needed to
accommodate the development contemplated by this Agreement (collectively, the "Development
Entitlements"), the City's or the Agency's completion of the environmental review process and
certification of an environmental impact report ("ElR") for the development of the Study Area
pursuant to the California Environmental Quality Act ("CEQA") and compliance with all other
applicable state and local laws, ordinances and regulations for such development, the Developer shall
take all reasonable actions required or necessary for determining the feasibility of the acquisition and
redevelopmcnt of the Property and undertaking a commercial and retail development project on the
Study Area consisting of a 150,000 square foot Class "A" office tower of approximately 8 to IO stories
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in height. The building is currently intended to be constructed upon 2 or 3 stories of a parking
structure and is currently intended to be wrapped by plaza style commercial development at the ground
and plaza levels (the "Project"). The Developer may modify the description of the Project at any time;
provided, however, that substantial modifications of the Project shall:
(1) be subject to the written acceptance and written approval of the Agency; and
(2) depending on the nature of such a modification, a suitable modification of any
applicable development permit and CEQA application and approval and the
Project Study referred to below may also be required.
The Agency may request that the Developer consider modifications to the description of the
Project from time-to-time. Each such modification shall be subject to the approval of the Developer,
which shall not be unreasonably withheld.
3. Nel!otiation Period, Proiect Stndv and Proiect Study Costs.
a. The rights and duties of the parties established by this Agreement shall commence
following its approval by the Commission as the governing body of the Agency when it has been fully
executed by the parties within the period of time authorized in Section 17 (such date being the
"Effective Date") and continue for twelve (12) months from the Effective Date unless such date shall
have been first extended as authorized under Section l.d.(2). Such time period during which this
Agreement shall be in effect (including any extensions of time approved by the Agency) is referred to
as the "Negotiation Period".
b. Within one hundred twenty (120) calendar days after the Effective Date (the "LOI
Period")the Developer shall have obtained viable prospective tenants for at least fifty percent (50%) of
the net leaseable area of the Project as shall be evidenced by letters of intent executed by an authorized
officer of each such prospective tenants. Based upon such letters of intent, the Developer shall
determine the size, scope, nature and final purpose of the Project. Such requirement for the obtaining
of letters of intent during the LOr Period for the requisite percentage of the net leaseable are of the
Project may be waived by the Developer with the concurrence ofthe Executive Director of the Agency
each acting in their sole and absolute discretion. The Agency staff shall assist and cooperate with the
Developer in identifying prospective tenants for the Project and making introductions to such
prospective tenants as may be identified by the Agency staff. Notwithstanding such commitment of
the Agency to assist and cooperate with the Developer, nothing contained herein shall commit the
Agency to obtain prospective tenants nor does the Agency represent that such prospective tenants are
available within the City of San Bernardino or the region to occupy the Project or to execute one or
more letters of intent. The inability of the Developer to obtain suitable long term tenants for the Project
within the LOI Period as provided herein shall be deemed to be mutually satisfactory evidence as
between the parties that the proposed Project is not financially viable, and the Developer shall have the
right to terminate this Agreement within ten (10) calendar days after the conclusion of the LOI Period
as specified above by the delivery of a written notice of termination to the Agency. Upon the timely
receipt by the Agency of said notice of termination within the applicable period of time, this
Agreement shall thereupon be deemed to be null and void thereafter for all purposes.
c. Within one hundred twenty (120) calendar days following the LOI Period as specified
in Section 3.b., the Developer shall submit to the Agency, a site plan for the Study Area and a
feasibility study for the redevelopment project proposed by the Developer (the "Project Study").
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Within said period of time, the Developer shall also determine whether the Property as defined herein
is suitable for undertaking the Project Study based upon the recommendations of the Urban Land
Institute, Advisory Services Panel ("ULI"), as presented publicly on June 29, 2007. In the event the
Developer and the Agency, through the official action of the Commission determine on the basis of
said presentation by the ULI that the location of the Project Study and the real property comprising the
"Property" for all purposes hereof should be modified to exclude the site as originally contemplated by
this Agreement and include one (I) or more alternative sites, the Developer and the Agency, subject to
the concurrence of the Agency by means of the official action of the Commission, may thus designate
one (I) or more such alternative sites for all purposes of this Agreement, and the "Property" shall then
be deemed to be such designated alternative site or sites. The Project Study shall include, without
limitation, the following information: (i) projections of the total estimated cost of the Project and the
amount of debt and equity to be contributed by the Developer to the Project; (ii) projections of the
type, amount and source of any financial assistance that the Developer may propose to have the
Agency contribute to the Project; (iii) projections of the overall Project value and property taxes; (iv)
projections of the costs and benefits to the City and the Agency for all construction, maintenance and
operations of all proposed public improvements; (v) projections of the costs of additional or increased
levels of public services; (vi) projections of any new public revenues anticipated to be generated by the
Project, by phase, if applicable, and upon completion of the Project; (vii) projections of the number
and type of jobs that will be generated by the Project during both the construction phase and upon full
build-out and occupancy of the stores comprising the Project; (viii) all proposed Development
Entitlements that are required to be obtained for the Project from the City and other goverrunental
agencies with jurisdiction in order to accommodate the Project; and (ix) a proposed time schedule for
construction and installation of all of the private and public improvements and infrastructure
comprising the Project.
The Agency may retain the services, but is under no obligation to do so, of a firm of
community redevelopment and planning and environmental consultants to assist in the preparation and
review of the various investigations, surveys and reports appropriate in connection with the Project
Study and the Project proposed by the Developer. In the event that after the preparation of the Project
Study, the Developer determines that the Project is not financially viable, the Developer may terminate
this Agreement as provided in Section 19.a. and seek the return of the ERN Fee if the Developer
terminates this Agreement within one hundred fifty (ISO) calendar days after the conclusion of the LOI
Period as specified in Section 3.b. above by the delivery of a written notice of termination to the
Agency. Upon the timely receipt by the Agency of said notice of termination within the applicable
period of time, this Agreement shall thereupon be deemed to be null and void thereafter for all
purposes. No other termination of this Agreement shall be permitted to be undertaken by the
Developer with a full return of the ERN Fee unless such termination occurs after (i) the Project Study
has been completed and transmitted to the Agency and (ii) such notice of termination is timely
delivered to the Agency within one hundred fifty (ISO) calendar days after the conclusion of the LOI
Period.
d. The Agency shall, on a best efforts basis during the course of the Project Study,
consider the specific terms and conditions of any monetary redevelopment assistance which the
Developer may propose to include in the Project DDA; provided, however, the Agency reserves the
right to accept, reject or modify any such proposed term or condition to the Project DDA in its sole
discretion. In this regard, the Agency acknowledges that the Developer has advised the Agency prior
to the Effective Date of this Agreement that in Developer's opinion the financial feasibility of the
Project will require the Agency to pay all costs incurred to construct and install certain offsite public
improvements of general benefit to the community that will or may be required in conjunction with the
Project constructed or installed in conjunction with development of the Project but of general benefit to
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the community, but the Agency has not made any determination or precommitment with respect
thereto.
e. During the course of the Project Study, the Developer shall pay for all of its costs
associated with the Project Study, including but not limited to, the expenses of third party consultants
who are engaged by the Developer under written contract to undertake one or more elements of the
Project Study (collectively, the "Project Study Costs"). The Project Study Costs that are the
Developer's responsibility do not include any third party costs incurred by the Agency in connection
with the Agency's review of the Developer's submittals or the Agency's independent performance of
any study or document as part of the Project Study. In addition, each party shall bear its own legal fees
and overhead and administrative costs in connection with the preparation and review of the Project
Study.
f. All third party consultants retained by the Agency to prepare any study or document as
part of the Project Study shall be subject to the sole control and direction of the Agency. The work
product of any such person shall be the property of the Agency and the Agency shall have the right to
use and republish such work product for any purpose; provided, however, that to the limited extent the
Developer provides the Agency with copies of architectural and engineering plans or drawings, the
Developer does not thereby transfer to the Agency the ownership rights with respect thereto or the
rights to reuse or republish the same and the Developer does not waive any legal rights it might have
with respect to such work product and the Agency's use and republishing of such work product in the
absence of this Agreement.
g. The Developer shall inform the Agency in writing whether, based on the information set
forth in the Project Study to be submitted to the Agency pursuant to Section 3.c., the Developer
believes the Project is feasible. Thereafter, assuming the Developer has determined the Project is
feasible, the Developer and the Agency may proceed to negotiate the final form of an agreement which
will specify the specific business terms upon which the Property will be conveyed to the Developer
and the Project will be developed (the "Project DDA"), subject to the understandings that (i) the
Agency reserves the right, in its sole and absolute discretion, to approve or disapprove the Project
DDA and the Agency does not preapprove or precommit to any particular terms to be included in the
Project DDA; (ii) the Project DDA will not constitute City or Agency approval of the Project, which
shall not occur until such later date that the Development Entitlements are approved and all applicable
CEQA approvals are issued; and (iii) in no event will the Project DDA provide for or allow the
conveyance of the Property to the Developer prior to the issuance of all of the Development
Entitlements and the City's or the Agency's approval of the necessary process for approving the
Project consistent with CEQA.
h. Within twenty (20) calendar days from receipt of any information from the Developer
as provided in this Section 3, the Executive Director of the Agency shall determine whether such
information is satisfactory. If the specific item of information is unsatisfactory to the Executive
Director of the Agency, he or she shall notify the Developer in writing of the reason(s) that the
information is unsatisfactory. If the Executive Director of the Agency does not make a determination
regarding any item of information submitted by the Developer under this Section 3 within twenty (20)
calendar days from receipt of such information, the information shall be deemed submitted in
acceptable form by the Agency. The determinations to be made by the Executive Director of the
Agency under this subsection in no way bind or constitute the approval of the Agency regarding,
without limitation, plans, specifications, engineering, architecture, uses, tenants, the Project, the
Development Entitlements, the Project's satisfaction of the requirements of CEQA, or the Project
DDA.
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4. Oblil!ations ofthe Developer.
During the Negotiation Period, the Developer shall proceed diligently and in good faith to
perform the following:
a. consider the redevelopment of the Project, including, without limitation, the selection of
tenants and the design of improvement elements as appropriate for the Project; and
b. review and provide the Project Study information described in Section 3 and, if
acceptable to the Developer, submit an executed copy of the final form of the Project DDA to the
Executive Director of the Agency on or before the end of the Negotiation Period (or such later date
corresponding to an authorized extension of the Negotiation Period); and
c. consult with the Agency on a regular basis and keep the Agency advised on the progress
of the Developer in completing its obligations under this Agreement.
In addition to the foregoing and subsequent to the conclusion of the LOI Period as referred to in
Section 3.b., the Developer shall have the right, but not the obligation to, file a formal application with
the City for approval of one or more of the Development Entitlements for the Project and to initiate the
process under CEQA for preparing an initial study and a draft ErR to enable the City and the Agency
to independently evaluate the environmental impacts of the Project, a reasonable range of feasible
alternatives to the Project, and feasible mitigation measures that may reduce potentially significant
environmental impacts of the Project to an acceptable level, all in accordance with CEQA. In the
event that the Developer elects to file any such application and/or initiate the CEQA review process
during the Negotiation Period and prior to the parties' approval and execution of a Project DDA, the
Agency shall cooperate reasonably with the Developer in such regard, subject to the understandings
that (i) the Agency does not precommit to support or approve any of the Development Entitlements or
the Project EIR, it being understood that the Agency reserves whatever discretionary authority it would
otherwise have with respect to such matters in the absence of this Agreement; (ii) the Agency's
approval of the Project DDA prior to issuance ofthe Development Entitlements and certification of the
Project EIR shall not constitute an approval of or precommitment with respect to the Project; and (iii)
the Project DDA will include provisions that the conveyance ofthe Property to the Developer and the
Developer's right to develop the Project will be conditional and contingent upon the City's and the
Agency's approval of the Project, the Development Entitlements and the EIR at a later date.
5. Al!encv Not to Nel!otiate with Others.
a. The Agency currently deems the acquisition of the Property by the Agency from the
City, disposition of the Property by the appropriate for further Agency to the Developer, and
redevelopment of the Study Area for a feasible Project to be review and consideration, and the
Developer appears to be qualified to undertake the task of planning the details for the potential
acquisition of the Property and development of the Study Area.
b. During the Negotiation Period, the Agency shall not negotiate with any other person or
entity regarding either the disposition of the Property or the redevelopment of all or any portion of the
Project. The term "negotiate", as used herein, shall be deemed to preclude the Agency from approving
any other offer or proposal from a third party to either acquire from the Agency any interest in the
Study Area (in whole or in part) or development of the Project in the Study Area, and from discussing
other redevelopment proposals for the Study Area with third persons or entities; provided, however,
any person may submit and the Agency may consider any proposal for the disposition and/or
redevelopment oflands adjacent to the Study Area.
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c. Notwithstanding any other provision of this Agreement, during the Negotiation Period,
the Agency shall not be precluded from furnishing to persons or entities unrelated to the Developer
information in the possession of the Agency relating to the redevelopment of any other land owned or
controlled by the City or the Agency outside but in close proximity to the Study Area. Subject to its
obligations set forth in S.b. above, the Agency may also provide any other information in its possession
that would customarily be furnished to persons requesting information from the Agency regarding the
Study Area and other Agency public information concerning its activities, goals and matters of a
similar nature, or as required by law to be disclosed upon request.
6. A!!encv Cooperation.
During the Negotiation Period, the Ageucy shall:
a. at the request of Developer, use its best efforts to assemble written materials and
documents relating to the Property that are in the possession of the Agency;
b. use its best efforts to provide appropriate and timely comments to the Developer with
respect to one or more conceptual development plans, as may be proposed by the Developer for the
Project, and the redevelopment of the Study Area, including, but not limited to, conceptual plans or
studies of vacation, realigmnent or abandonment of public property and facilities, the installation and
improvement of public improvements, any formal Development Entitlements applications that may be
filed by the Developer during the Negotiation Period and any environmental evaluation of the Project
that may be undertaken during the Negotiation Period under CEQA (but reserving the Agency's
discretion and authority with regard to support and approval of such matters as set forth in the last
paragraph of Section 4 above);
c. use its best efforts to provide the Developer with limited access to the Property during
the Negotiation Period, for the purpose of conducting customary due diligence investigations thereon,
including environmental investigations of the subsurface or any structure thereon, subject to the terms
and conditions of a separate environmental investigation and inspection license agreement to be agreed
upon by the Agency and the Developer, at some later date, if applicable; and
d. use its best efforts to provide the Developer with information or copies of all reports,
studies, and other information in the City's or the Agency's possession relative to the Property and the
status of the City's and the Agency's efforts to relocate existing City vehicle parking and public
gathering uses from the Property as needed to accommodate the Project.
7. Ne!!otiation of Proiect DDA.
It is the intent of the parties that the Developer and the Agency will negotiate the final terms
and conditions of a proposed Project DDA between the date that the Developer submits the Site Plan
and Project Study for the Project to the Agency pursuant to Section 3.c. of this Agreement at the end of
the Negotiation Period. Notwithstanding such commitment of the Agency to negotiate the terms and
conditions of the final Project DDA, nothing contained herein commits the Agency Staff to
recommend approval of any final form of a Project DDA presented for consideration by the
Commission, nor shall the Commission be committed to approve any final form of a Project DDA by
reason of the execution of this Agreement or by reason of any other actions of the Agency, the Agency
Staff or the Commission prior to the conducting of a noticed public hearing on the consideration of the
Project DDA in the manner as required by law.
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Should the Agency and the Developer execute and deliver a Project DDA, the parties anticipate
as of the Effective Date that the Project DDA will or may include, without limitation, the following
terms, provisions and covenants:
(I) that the purchase price for the Property will be the fair market value of the
Property no more than six (6) months prior to the anticipated transfer of the
Property to the Developer (in accordance with and pursuant to the Project
DDA), as determined by a MAl appraiser acceptable to the Agency in its sole
discretion; and
(2) such provIsIons for Agency financial assistance for off-site public
improvements to which the Agency and the Developer may mutually agree, as
referred to in Section 3.d. of this Agreement and subject to the understanding
that the Agency does not precommit to any such financial assistance in this
Agreement; and
(3) an acknowledgment that the Agency's approval of the Project DDA does not
constitute the Agency's or the City's approval of the Project for purposes of
CEQA and that the conveyance of the Property to the Developer and the
Developer's right and obligation to develop the Project in the Study Area will be
conditional and contingent upon the issuance of all of the Development
Entitlements and certification of the Project EIR; and
(4) that the Project, if approved, will involve a total development with a minimum
development cost of Thirty Million Dollars ($30,000,000); and
(5) a provision that the ERN Fee payable pursuant to Section 30 of this Agreement
after the conclusion of the LOI Period shall be credited in full toward the
Developer's purchase price for the Property.
8. Consideration for this Al!reement and Reservation of Ril!hts.
In consideration for the Agency entering into this Agreement, the Developer will undertake its
obligations under this Agreement and provide the Agency with copies of all studies and reports and
other information generated by the Developer or its consultants regarding the Project; provided,
however, that nothing set forth in this Agreement shall obligate the Developer to provide the Agency
with information relating to confidential contract negotiations with prospective tenants or other end
users or any other confidential financial or business information that is not reasonably required by the
Agency to perform its obligations set forth in this Agreement. The parties agree that, if this Agreement
terminates for any reason, or the Agency fails to extend the Negotiation Period, or the Project DDA is
not finally approved by the Agency, for any reason, neither party shall have any further obligation to
the other under this Agreement regarding the disposition, acquisition, reuse, redevelopment or
development of the Study Area.
9. Planninl! and Desil!n: Related Acknowledl!ments of the Parties.
Certain development standards and design controls for the Project may be established between
the Developer and the Agency in negotiation of or in the final form of the Project DDA, but it is
understood by both parties that the Project must conform to the City's development, design and
architectural standards. The Agency shall fully cooperate with the Developer's professional associates
in providing information and non-monetary assistance in connection with the Developer's preparation
of drawings, plans, and specifications. Nothing in this Agreement shall be considered approval of any
plans or specifications for the Project, itself, by either the Agency or the City.
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10. Developer Financial Disclosures.
Subject to its reserved rights set forth in Section 8 hereinabove, the Developer acknowledges
that it may be requested to make certain confidential financial disclosures to the Agency, its staff or
legal counsel, as part of the financial due diligence investigations of the Agency relating to the
potential disposition of the Property to the Developer or development of the Project. The parties
recognize that such financial disclosures may contain sensitive information relating to other business
transactions of the Developer, that the disclosure of such information to third parties could impose
commercially unreasonable and/or anti-competitive burdens on the Developer and, correspondingly,
diminish the value or fiscal benefit that may accrue to the Agency upon the disposition of the Property
to the Developer, if terms for such disposition are mutually agreed upon. Accordingly, the Agency
agrees to maintain the confidentiality of any business records described in Government Code Section
6254.15, as may be provided by the Developer to the Agency or its consultants, as permitted by law.
The Agency shall advise the Developer of any Public Records Act requests for such business records,
and the proposed response of the Agency thereto, a reasonable time prior to the Agency's delivery of
such response and, if the Agency proposes to disclose any such business records, the Agency shall first
agree to confer with the Developer to consider any objections that the Developer may have to such
disclosure.
II. Developer Acquires No Interest in the Propertv.
The Developer hereby acknowledges that it has not acquired and will not acquire, by virtue of
the terms of this Agreement, any legal or equitable interest in the Property. Nothing contained in this
Agreement shall commit the Agency in advance to accept and approve the final form of the Project
DDA except in the manner required pursuant to the provisions of the California Community
Redevelopment Law at a duly noticed public hearing of Commission as the governing body of the
Agency.
12. Nondiscrimination.
The Developer shall not discriminate against nor segregate any person, or group of persons on
account of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry in
undertaking its obligations under this Agreement.
13. Compliance with Law.
The Developer acknowledges that the Project DDA, if mutually agreeable terms are
established, is likely to require the Developer (among other things) to carry out the construction of
certain improvements in conformity with all applicable laws, including all applicable planning and
zoning laws, and environmental planning and safety laws. The parties agree that it is their intention as
of the Effective Date of this Agreement that in order to assure the feasibility of the Project, they will
cooperate in an effort to cause the Project DDA to be structured in such a manner that any public
financial assistance does not result in the Project being classified as a "public work" for purposes of
California prevailing wage law requirements except to the extent that prevailing wages may have to be
paid with respect to public improvements paid for in whole or in part with Agency funds.
14. Required Approvals.
No Project DDA between the parties shall have any force or effect nor shall the Agency be
deemed to be a party to any agreement for the disposition of real or personal property to the Developer,
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P'AgendaslAgenda Attachrnents\Agflms-Amend 2007\07_16_07 Galaxy Commercial Holding, LLC. final ERN.doc
until the terms and conditions of the Project DDA are considered and approved by the Commission as
the governing body of the Agency, following the conclusion of a public hearing, as required by law.
15. Press Releases.
The Developer agrees to discuss any press releases it may propose relating to the Study Area
with the Executive Director of the Agency or his/her designee, prior to publication, to assure accuracy
and consistency of the information.
16. Notice.
All notices required hereunder shall be presented either (i) in person or (ii) by fax and
confirmed by First Class Certified or Registered United States mail with return receipt requested.
Notice shall be deemed confirmed by United States mail effective the second business day after
deposit with the United States Postal Service. Notice by personal service shall be deemed effective
upon delivery. Either party may change its address for receipt of notice by notifying the other party in
writing.
TO DEVELOPER:
Galaxy Commercial Holding, LLC
Attn.: Raffi Cohen
8906 West Olympic Boulevard, Suite 200
Beverly Hills, California 90211
Telephone: (310) 273-7233
TO AGENCY:
Redevelopment Agency of the City of San Bernardino
Attn.: Maggie Pacheco, Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 9240 I
Telephone: (909) 663-1044
17. Acceptance of A!!reement bv the Developer.
The Developer shall acknowledge its acceptance of this Agreement by delivering three (3)
counterpart executed copies of this Agreement prior to the date of consideration and approval of this
Agreement by the Commission. As further set forth in Section 3.a. hereof, the Effective Date of this
Agreement shall be deemed to have occurred upon final approval of the Commission and execution by
both the Developer and the Executive Director of the Agency.
18. Autboritv.
Each signatory to this Agreement represents and warrants that he or she has the authority to
execute this Agreement on behalf of the principal whom he or she purports to represent.
19. Optional Termination bv Developer or bv A!!encv.
a. The Developer may, in its sole and absolute discretion, exercise an election to terminate
this Agreement provided that the Developer gives at least a twenty-one (21) calendar day advance
written notice to the Agency. If the Developer terminates this Agreement after the conclusion of the
LOI Period, it shall not be entitled to a refund of any portion of the ERN Fee referred to in Section 30
unless the Developer has reasonably determined, and after pursuits by the Developer in furtherance of
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1':\AgendaslAgenda Auacl1mems\Agrmt,-Amend 2007\07-16-07 Galaxy Commeroial Holding. LLC _ Final ERN.doc
the Project utilizing good faith efforts, that the Project as contemplated by this Agreement is not
financially feasible on the basis of the Project Study in the manner as provided in Section 3.c. The
Developer shall remain responsible for performance of its indemnity obligations as set forth in Section
22 with respect to any acts or omissions of the Developer occurring prior to the effective date of the
termination regardless of the reason for such termination, and neither party shall have any further
rights or obligations to the other party hereunder.
b. The Agency may not exercise an election to suspend the Project or to terminate this
Agreement other than as provided in Section 20 hereof.
20. Defaults and Breach - General.
Failure or delay by either party to perform any material term or provision of this Agreement
shall constitute a default under this Agreement; provided, however, that if the party who is otherwise
claimed to be in default by the other party commences to cure, correct or remedy the alleged default
within five (5) business days after receipt of written notice specifying such default and shall in fact
complete such cure, correction or remedy, with reasonable diligence, such party shall not be deemed to
be in default hereunder.
The party, which may claim that a default has occurred, shall give written notice of default to
the party in default, specifying the alleged default. Delay in giving such notice shall not constitute a
waiver of any default nor shall it change the time of default; provided, however, the injured party shall
have no right to exercise any remedy for a default as set forth herein without delivering the written
default notice as specified herein.
Any failure to delay by a party in asserting any of its rights and remedies as to any default shall
not operate as a waiver of any default or of any rights or remedies associated with such a default.
In the event of an uncured material breach, the party who is not in default shall be entitled to
seek any appropriate remedy by initiating legal proceedings; provided, however, that, other than with
respect to a Developer default in failing to perform its indemnity obligations set forth in Section 22, (i)
the Agency shall not be entitled to specific performance or other equitable or injunctive relief against
the Developer for a default by the Developer hereunder and (ii) the Agency's sole damages remedy
shall be to retain the Developer's entire ERN Fee referred to in Section 30 as liquidated damages
provided that such default has occurred after the conclusion of the LOI Period and the timely deposit
of the ERN Fee has been remitted to the Agency as so provided in Section 30.
In the event that a material breach has occurred and the non-performing party has not cured
such breach within the period of time provided for in this Section 20, the party who is not then in
default may terminate this Agreement by serving the other party with a written notice of termination,
and thereafter, the Agreement shall terminate on the date specified in such notice, which date shall not
be earlier than the later of (i) ten (10) business days following the date of service of the notice of
termination on the other party or (ii) the date otherwise specified in such notice.
21. Attornevs' Fees.
If any party hereto files any action or brings any action or proceeding against the other arising
out of this Agreement, or is made a party to any action or proceeding brought by a third party, then as
between the Developer and the Agency, the prevailing party shall be entitled to recover as an element
of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such
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P.lAgendas\Agenda AttachmentslAgrmts.Amend 2007\07_16_07 Galaxy Commercial I!olding, LLC. Final ERN.doc
action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. As
between the Developer and the Agency, the prevailing party shall be entitled to recover as an element
of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such
action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees.
22. Indemnification.
The Developer agrees to indemnify, protect, defend (if requested by the Agency and/or the
City) and hold the Agency and/or the City, and their officers, employees and agents, harmless from
and against, without limitation, all actions, causes of action, claims, demands, damages, judgments,
costs, expenses and penalties (including, without limitation, attorneys' fees, court costs, consultant fees
and costs, and all attorneys' fees and court costs incurred in connection with all appeals), to the extent
arising from or related to any uncured default by the Developer hereunder or any intentional
misconduct or negligent act or omission of the Developer, its agents, employees and/or independent
contractors (and the successors and/or assigns of each of them) in performing, omitting, or failing to
perform, in its obligations hereunder (collectively, the "Claims"); provided, however, that (i) the
foregoing indemnity obligation shall not apply to the extent any Claims arise out of any default by the
Agency in performing its obligations set forth in this Agreement or to the extent the Agency has
engaged in any intentional misconduct or is guilty of gross negligence and (ii) the foregoing indemnity
obligation shall not cover any Claim for exemplary or punitive damages unless the Developer is guilty
of malice. The Agency and/or the City shall give the Developer written notice of the occurrence of
any Claim for which the Agency and/or the City seek indemnity under this Section as promptly as
practicable following the Agency's and/or the City's knowledge of the occurrence of such matter and
the Agency and/or the City shall reasonably cooperate with the Developer in the defense of any such
Claim. This indemnity provision shall survive the execution, delivery, expiration and/or termination of
this Agreement.
23. Governine Law; Venue.
The parties hereto expressly agree that this Agreement shall be governed by, interpreted under,
and construed and enforced in accordance with the laws of the State of California. Further, the parties
to this Agreement hereby agree that any legal actions arising from this Agreement shall be filed in
California Superior Court, in the County of San Bernardino, San Bernardino District.
24. Severability.
If any term, provision or portion of this Agreement or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision or portion thereof to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and
provision ofthis Agreement shall be valid and enforced to the fullest extent permitted by law.
25. No Intent to Create Third Party Beneficiaries.
The parties intend that the rights and obligations under this Agreement shall benefit and burden
only the parties hereto, and do not intend to nor shall it create any rights in, or right of action to or for
the use or benefit of any third party, including any governmental agency, who is not one of the parties
to this Agreement.
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P.\AgelldaslAgenda Altachmenl.\Agrmls-Ame"d 2007\07_16_07 Galaxy Commercial Holding, LLC - Final ERN.doc
26. Waivers.
No waiver of any breach of any covenant or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein
contained. No extension of the time for performance of any obligation or act to be performed herein
shall be deemed to be an extension of the time for performance of any other obligation or act to be
performed under this Agreement.
27. Entire Aereement.
This Agreement (including Exhibit "A" attached hereto) is the final expression of, and contains
the entire agreement between the parties with respect to the subject matter hereof and supersedes all
prior understandings with respect thereto. This Agreement may not be modified, changed,
supplemented, or terminated, nor may any obligations hereunder be waived, except by written
instrument signed by the appropriate party or by its agent duly authorized in writing or as otherwise
expressly permitted herein. This Agreement may be executed in one or more counterparts, each of
which shall be an original, and all of which together shall constitute a single instrument.
28. Time of Essence.
Time is strictly of the essence with respect to each and every term, condition, obligation and
provision hereof. Failure to timely perform any of the terms, conditions, obligations or provisions
hereof by either party shall constitute a default under this Agreement by the party so failing to perform,
which default can be waived by the other party at its sole and complete discretion.
29. Construction.
Headings at the beginning of each section, paragraph, and subparagraph are solely for the
convenience of the parties and are not a part of this Agreement. Whenever required by the context of
this Agreement, the singular shall include the plural and the masculine shall include the feminine and
vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but
rather as if both parties had prepared the same. Unless otherwise indicated, all references to sections
are to this Agreement. Exhibit "A" referred to in this Agreement is attached hereto and incorporated
herein by this reference as if fully set forth herein in its entirety.
30. ERN Fee.
Provided that the Developer has not timely terminated this Agreement after the conclusion of
the LO! Period in the manner as provided in Section 3.b. hereof, the Developer shall deliver to the
Agency a check in the amount of Seventeen Thousand Five Hundred Dollars ($17,500), representing
the Exclusive Right to Negotiate Fee (the "ERN Fee") on or before twenty (20) calendar days after the
conclusion of the Lor Period. In the event the parties enter into a Project DDA, the parties intend that
the Project DDA will provide that the ERN Fee will be credited in full towards the Developer's
purchase price for the Property. The ERN Fee will not be retained by the Agency if the Developer,
through good faith efforts, is unable to reasonably determine that the Project as intended to be
developed upon the Property will be financially feasible to be undertaken in accordance with the
proposed Project DDA.. Failure to deposit the ERN fee within the time specified herein will render this
Agreement null and void without any further notice and with no right to cure any such default by the
Developer.
//1
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P.\Agendas\Agenda AttachmentslAgrmts-Amend 2007\07.16.07 Galaxy Commercial Holding, LLC _ Final ERN doc
IN WITNESS WHEREOF, Galaxy Commercial Holding, LLC, and the Redevelopment
Agency of the City of San Bernardino exeente this Redevelopment Project Study and Exclusive Right
to Negotiate Agreement on the dates indicated next to each of the signatures of their authorized
representatives as they appear below.
DEVELOPER
Galaxy Commercial Holding, LLC,
a California limited liability company
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Dated:
/
./ Its:
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corpot' e and politic
,
Dated:
'1 1- b
By:
Maggie Pachec , Executive Director
Approved as to Form and Legal Content:
BY~~
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