HomeMy WebLinkAbout2015-001 I RESOLUTION NO. 2015-244/SA 2015-1
2 JOINT RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
3 OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF AN
EXCLUSIVE NEGOTIATION AGREEMENT WITH AECOM TECHNICAL
4 SERVICES, INC. AND THE FRANSEN COMPANY, INC. FOR THE
5 REDEVELOPMENT OF CERTAIN REAL PROPERTY, COMPRISING
APPROXIMATELY 48.5 ACRES, COMMONLY KNOWN AS THE CAROUSEL MALL,
6 THE REGAL THEATERS, AND THE CALIFORNIA THEATER, LOCATED
GENERALLY AT 300 AND 450 NORTH E STREET AND AT THE NORTHWEST
7 CORNER OF FOURTH STREET AND E STREET, SAN BERNARDINO,
8 CALIFORNIA, AND OF THE MAYOR AND COMMON COUNCIL, ACTING AS THE
GOVERNING BODY OF THE CITY OF SAN BERNARDINO AS SUCCESSOR
9 AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, ACKNOWLEDGING THE EXECUTION OF SUCH AGREEMENT
10
11 WHEREAS, the City of San Bernardino (the "City") wishes to encourage and effectuate
12 the redevelopment of (i) certain real property, comprising approximately 43 acres, generally
13 bounded by Fourth Street on the north, E Street on the east, Second Street on the south, and G
14 Street on the West, improved with a retail mall, parking structure and related improvements
15 (collectively, the "Mall Improvements"), commonly known as Carousel Mall, 300 North E
16 Street, San Bernardino, County of San Bernardino (the "Mall Site"), and (ii) certain real
17 property, comprising approximately 5.5 acres, located on the northwest corner of Fourth Street
18 and E Street, improved with a Regal Theaters multiplex (the "Regal Theaters") and the historic
19 California Theater ("California Theater") (collectively, the "Theater Square", and together with
20 the Mall Site, the "Site");
WHEREAS, the Mall Site comprises (i) the former Harris Co./Gottschalks department
21
22 store currently owned by El Corte Ingles, an international department store retailer based in
Madrid, Spain ("El Corte Ingles")(such portion, the "El Corte Ingles Portion"); (ii) the former
23
J.C. Penney department store and auto center (such portion, the "San Manuel Portion") currently
24
owned by the San Manuel Band of Mission Indians (the "San Manuel Band of Mission
25
Indians"); and (iii) the balance (such portion, the "Agency Portion"), which is currently owned
26
by the Successor Agency to the former Redevelopment Agency of the City of San Bernardino;
27
WHEREAS, the Carousel Mall (formerly the Central City Mall) opened in 1973 with 52
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I in-line shops and 3 anchor tenants,but recently has struggled to attract shoppers and tenants;
2 WHEREAS, sites adjoining the Regal Theaters that were constructed concurrently with
3 the remodeling of the Regal Theaters in 2012 with the intent that they be developed for use as
4 retail or restaurant establishments remain undeveloped to date;
5 WHEREAS, the California Theater is badly in need of repair, restoration, and
6 renovation;
7 WHEREAS, on November 20, 2014, the City issued a Solicitation of Interest for 43
8 Acre Transit Adjacent Site in the Downtown Core of Inland Southern California City (the
9 "Solicitation"), seeking letters of interest from regional and national developers to
10 reuse/redevelop the Mall Site;
11 WHEREAS, on January 15, 2015, a letter of interest was submitted on behalf of
AECOM Technical Services, Inc., a California corporation ("AECOM") and the Fransen
12
13 Company, Inc., a California corporation ("Fransen", and together with AECOM, "Developer")
for the master planning, environmental impact review, disposition and development of the Site;
14
WHEREAS, on February 15, 2015, Developer met with the City and presented its
15
proposed approach for the Project (as defined below).;
16
WHEREAS, on April 20, 2015, the City notified Developer that Developer had been
17
selected, along with three (3) others, from among the seven (7) respondents to the Solicitation,
18
for further consideration by the City;
19
WHEREAS, on June 4, 2015, the City issued a Carousel Mall Developer Interview
20
Phase II questionnaire to Developer and certain other interested parties, and in response thereto,
21
Developer submitted to City a response letter dated August 2015;
22
WHEREAS, on July 16, 2015, the City held interviews with the finalists being
23
considered for the Carousel Mall Project;
24
WHEREAS, on August 10, 2015, the City sent the final two candidates a follow-up list
25
of questions to further define their respective proposals;
26
WHEREAS, on September 30, 2015, the City met with the Developer and informed
27
them that they had been selected for the Project;
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I WHEREAS, after meeting with and soliciting input from the City and members of the
2 community, Developer proposes to enter into a master development agreement (an"MDA") with
3 the City to provide for the preparation of a master plan (the "Master Plan") for the
4 redevelopment of the Site in phases, potentially including retail buildings and other commercial
5 uses, market rate for-sale housing and rental housing, and private and governmental office
6 buildings, while recognizing and retaining the downtown area's unique architectural fabric and
7 historic building characteristics (collectively the "Project"), subject to City approval;
8 WHEREAS, Developer further proposes to prepare and, with the City, implement a
9 program for the disposition of certain portions of the Site to qualified developers;
10 WHEREAS, on or about June 28, 2011, AB1X 26 (as amended from time to time, the
11 "Dissolution Law") became effective and added to, repealed, and modified certain provisions of
12 the Health and Safety Code of the State of California (the "H&S Code"), providing for the
dissolution and winding down of redevelopment agencies throughout the State, including the
13
former Redevelopment Agency of the City of San Bernardino (the "Former Agency");
14
WHEREAS, on January 9, 2012, pursuant to the Dissolution Law, the City elected to
15
serve as the Successor Agency to the Former Agency ("Successor Agency"), and the Successor
16
Agency, as a separate public entity from the City, administers the dissolution and winding down
17
of the Former Agency;
18
WHEREAS, on February 1, 2012, pursuant to the Dissolution Law, the Former Agency
19
was dissolved by operation of law, and upon dissolution, all property of the Former Agency,
20
including the Former Agency properties included in the Site, was transferred by operation of law
21
to the Successor Agency pursuant to the terms of H&S Code section 34175(b);
22
WHEREAS, pursuant to H&S Code section 34191.5(b) of the Dissolution Law, on
23
September 15, 2015, the Successor Agency prepared and submitted to the California Department
24
of Finance (the "DOF") for approval its Long Range Property Management Plan (the
25
"LRPMP"), as approved by its Oversight Board, that addressed the disposition and use of certain
26
real properties of the Former Agency, including the potential disposition of the Former Agency
27
properties included in the Site;
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I WHEREAS, the LRPMP proposes that the Former Agency properties included in the
2 Site be transferred to the City for future development pursuant to H&S Code Section 34191.5
3 (c)(2);
4 WHEREAS, for properties to be transferred to the City for future development,
5 implementation of the LRPMP will require securing one or more compensation agreements (the
6 "Compensation Agreements") with the affected taxing entities, pursuant to H&S Code Section
34180 (f)(1);
7
8 WHEREAS, the City will seek Compensation Agreement(s) with the affected taxing
9 entities after the LRPMP is approved by the DOF;
10 WHEREAS, the disposition by the City of Former Agency properties included in the
11 Site pursuant to the MDA will accordingly require prior approval by the DOF of the LRPMP
12 and the securing of Compensation Agreement(s) with the taxing entities;
WHEREAS, it is acknowledged that the California Theater has historical significance
13
and has been officially recognized as a site having such significance, and as a consequence there
14
may be restrictions on the nature and extent of development that may be permissible on that site;
15
WHEREAS, the City and Developer desire to negotiate mutually acceptable terms and
16
conditions for development of the Site, to be set forth in the MDA, which agreement will define
17
their rights, obligations, and participation in developing the Project on the Site;
18
WHEREAS, Developer has requested that the City and Developer enter an Exclusive
19
Negotiation Agreement (the "ENA"), which ENA shall set forth their agreement that they shall
20
negotiate exclusively and in good faith with one another regarding the proposed development
21
and operation of the Project, and the terms of the MDA;
22
WHEREAS, the City and Developer have negotiated and prepared a proposed ENA, a
23
copy of which is attached to this Resolution as Exhibit A;
24
WHEREAS, Developer has requested that the Successor Agency, as current owner of the
25
Former Agency properties included in the Site, acknowledge the ENA;
26
WHEREAS, it is in the best interests of the City and its residents for the City to execute
27
the ENA and for the Successor Agency to acknowledge the ENA, for the purpose of enabling the
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I City and Developer to move forward with the Project;
2 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
3 COUNCIL OF THE CITY OF SAN BERNARDINO AND BY THE MAYOR AND
4 COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE
GOVERNING BODY OF THE CITY OF SAN BERNARDINO ACTING AS THE
5
SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE
6
7 CITY OF SAN BERNARDINO, AS FOLLOWS:
8 SECTION 1. The Mayor and Common Council find that the above-stated Recitals are
9 true and hereby adopt and incorporate them herein.
10
11 SECTION 2. The Mayor and Common Council hereby approve the Exclusive
12 Negotiation Agreement and authorize and direct the City Manager to take such steps and sign
13 such documents as may be necessary to execute the Exclusive Negotiation Agreement, including
14 but not limited to the making of clerical or non-substantive revisions to the Exclusive
15 Negotiation Agreement as may be necessary to effectuate its intent.
16 SECTION 3. The Mayor and Common Council, acting as the governing body of the
17 City of San Bernardino as Successor Agency to the former Redevelopment Agency of the City of
18 San Bernardino hereby authorize and direct the City Manager to sign the Acknowledgment
19 contained in the Exclusive Negotiation Agreement on behalf of the Successor Agency.
20
21 SECTION 4. Compliance with the California Environmental Quality Act.
22 Approval of the Exclusive Negotiation Agreement and acknowledgment of the Exclusive
23 Negotiation Agreement by the Successor Agency do not require compliance with the California
24 Environmental Quality Act.
25
26 SECTION 5. Severability. If any section, subsection, subdivision, sentence, or clause or
27 phrase in this Resolution or any part thereof is for any reason held to be unconstitutional, invalid
28 or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or
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I effectiveness of the remaining portions of this Resolution or any part thereof. The Mayor and
2 Common Council hereby declares that it would have adopted each section irrespective of the fact
3 that any one or more subsections, subdivisions, sentences, clauses, or phrases be declared
4 unconstitutional, invalid, or ineffective.
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JOINT RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
1 BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF AN EXCLUSIVE
2 NEGOTIATION AGREEMENT WITH AECOM TECHNICAL SERVICES, INC. AND THE
FRANSEN COMPANY, INC. FOR THE REDEVELOPMENT OF CERTAIN REAL PROPERTY,
3 COMPRISING APPROXIMATELY 48.5 ACRES, COMMONLY KNOWN AS THE CAROUSEL
MALL, THE REGAL THEATERS, AND THE CALIFORNIA THEATER, LOCATED GENERALLY
4 AT 300 AND 450 NORTH E STREET AND AT THE NORTHWEST CORNER OF FOURTH STREET
AND E STREET, SAN BERNARDINO, CALIFORNIA, AND OF THE MAYOR AND COMMON
5 COUNCIL, ACTING AS THE GOVERNING BODY OF THE CITY OF SAN BERNARDINO AS
SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF SAN
6 BERNARDINO,ACKNOWLEDGING THE EXECUTION OF SUCH AGREEMENT
7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
8 Common Council of the City of San Bernardino at a joint regular meeting thereof, held on the 2°d
9 day of November, 2015, by the following vote to wit:
10 AYES NAYS ABSTAIN ABSENT
11 Council Members
12
MARQUEZ X
13
14 BARRIOS X
15 VALDIVIA X
16 SHORETT X
17 NICKEL X
18 JOHNSON X
19 MULVIHILL X
20
P
21
Georgonn Hanna, C, City Clerk
22
The foregoing Resolution is hereby approved this day November, 2015
23
24
R. CAREY OAVIS, Mayor
25 City of San Bernardino
26 Approved as to form:
Gary D. Saenz, City Attorney
27
r
28 By:
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2015-244/SA2015-1
EXCLUSIVE NEGOTIATION AGREEMENT
among
AECOM TECHNICAL SERVICES, INC.
and
THE FRANSEN COMPANY
and
THE CITY OF SAN BERNARDINO
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Effective Date: November 2 ' 2015
EXHIBIT A
2015-244/SA2015-1
EXCLUSIVE NEGOTIATION AGREEMENT
This EXCLUSIVE NEGOTIATION AGREEMENT (this "Agreement") is dated, for
reference purposes, as of the Effective Date, as defined in Section 19.8 of this Agreement, and
is entered among THE CITY OF SAN BERNARDINO, a California charter city (the "City"), on
the one hand, and AECOM TECHNICAL SERVICES, INC., a California corporation
("AECOM")[an affiliate of AECOM, a Delaware corporation formerly known as AECOM
Technology Corporation and/or AECOM Technologies ("AECOM Parent")], and THE FRANSEN
COMPANY, INC., a California corporation ("Fransen", and together with AECOM, "Developer").
The City and Developer are sometimes referred herein collectively as the "Parties", and each
individually as a "Party."
RECITALS
A. The City desires to encourage and effectuate the redevelopment of (i) certain real
property, comprising approximately 43 acres, generally bounded by Fourth Street on the north,
E Street on the east, Second Street on the south, and G Street on the West, improved with a
retail mall, parking structure and related improvements (collectively, the "Mall Improvements"),
commonly known as Carousel Mall, 300 North E Street, San Bernardino, County of San
Bernardino (the "Mall Site"), and (ii) certain real property, comprising approximately 5.5 acres,
located on the northwest corner of Fourth Street and E Street, improved with a Regal Theaters
multiplex (the "Regal Theaters") and the historic California Theater ("California Theater")
(collectively, the "Theater Square", and together with the Mall Site, the "Site").
B. The Mall Site comprises (i) the former Harris Co./Gottschalks department store
currently owned by El Corte Ingles, an international department store retailer based in Madrid,
Spain ("El Corte Ingles")(such portion, the "El Corte Ingles Portion"); (ii) the former J.C.
Penney department store and auto center (such portion, the "San Manuel Portion") currently
owned by the San Manuel Band of Mission Indians (the "San Manuel Band of Mission
Indians"); and (iii) the balance (such portion, the "Agency Portion"), which is currently owned
by the City as the Successor Agency to the Redevelopment Agency of the City of San
Bernardino.
C. On November 20, 2014, the City issued a Solicitation of Interest for 43 Acre
Transit Adjacent Site in the Downtown Core of Inland Southern California City (the
"Solicitation"), seeking letters of interest from regional and national developers to
reuse/redevelop the Mall Site.
D. On January 15, 2015, a letter of interest was submitted on behalf of AECOM and
Fransen for the master planning, environmental impact review, disposition and development of
the Site.
E. On February 15, 2015, Developer met with the City and presented its proposed
approach for the Project (as defined below).
F. On April 20, 2015, the City notified Developer that Developer had been selected,
along with three (3) others, from among the seven (7) respondents to the Solicitation, for further
consideration by the City.
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EXHIBIT A
2015-244/SA2015-1
G. On June 4, 2015, the City issued a Carousel Mall Developer Interview Phase II
questionnaire to Developer and certain other interested parties, and in response thereto,
Developer submitted to the City a response letter dated August 2015.
H. On July 16, 2015, the City held interviews with the finalists being considered for
the Carousel Mall Project.
I. On August 10, 2015, the City sent the final two candidates a follow-up list of
questions to further define their respective proposals.
J. On September 30, 2015, the City met with the Developer and informed them that
they had been selected for the Project.
K. After meeting with and soliciting input from the City and members of the
community, Developer proposes to enter into a master development agreement (an "MDA") with
the City to provide for the following:
(i) Negotiation with and, if possible, entry into agreements with El Corte
Ingles providing for the inclusion of the El Corte Ingles Portion in the Project and the San
Manuel Band of Mission Indians for the inclusion of the San Manuel Portion in the Project;
(ii) Demolition of the Mall Improvements, including associated engineering,
environmental remediation, and construction services by AECOM and/or its affiliates;
(iii) Preparation of a master plan (the "Master Plan") for the redevelopment of
the Site in phases, potentially (but not necessarily) including retail buildings and other
commercial uses, market rate for sale housing and rental housing, and private and
governmental office buildings, while recognizing and retaining the downtown area's unique
architectural fabric and historic building characteristics (collectively the "Project"), subject to
City approval;
(iv) Preparation of an entitlement and environmental impact review program
for the Master Plan, subject to City approval (the "Land Use Entitlements Approval
Program");
(v) Implementation of the Land Use Entitlements Approval Program,
including environmental impact review consulting and other engineering services by AECOM
and/or its affiliates;
(vi) Construction of new streets through the Mall Site and other infrastructure
by AECOM and/or its affiliates;
(vii) Potentially expedited disposition, prior to full implementation of the Land
Use Entitlements Approval Program, of (a) portions of the Mall Site to KB Home (as defined in
Section 1(b) below) and/or other residential developers for the development of market rate for
sale housing; and (b) certain portions of Theater Square; and
(viii) Preparation and, with the City, implementation of a program for the
disposition of other portions of the Site to qualified developers, including the identification of and
2
EXHIBIT A
2015-244/SA2015-1
negotiation of disposition and development agreements with such qualified developers (which
developers may be, but shall not be required to be, affiliates of Developer).
L. The Site lies within a Redevelopment Project Area (the "Project Area"), and
complies with and furthers the goals and objectives of the Redevelopment Plan for the Project
Area.
M. On or about June 28, 2011, AB1 X 26 (as amended from time to time, the
"Dissolution Law") became effective and was added to the laws of the State of California (the
"State"), providing for the dissolution and winding down of redevelopment agencies throughout
the State, including the Redevelopment Agency of the City of San Bernardino (the "Former
Agency"). On January 9, 2012, pursuant to the Dissolution Law, the City elected to serve as
the Successor Agency to the Former Agency (the "Successor Agency"), and the Successor
Agency, as a separate public entity from the City, administers the dissolution and winding down
of the Former Agency. On February 1, 2012, pursuant to the Dissolution Law, the Former
Agency was dissolved by operation of law, and upon dissolution, all assets, properties and
contracts of the Former Agency, including the Former Agency properties included in the Site,
were transferred by operation of law to the Successor Agency pursuant to the terms of Health &
Safety Code ("H&S Code") Section 34175(b).]
N. Pursuant to H&S Code Section 34191.5(b) of the Dissolution Act, on September
15, 2015, the Successor Agency prepared and submitted to the California Department of
Finance (the "DOF") for approval its Long Range Property Management Plan (the "LRPMP"),
as approved by its Oversight Board, that addressed the disposition and use of certain real
properties of the Former Agency, including the potential disposition of the properties. The
LRPMP proposes that the Former Agency properties included in the Site be transferred to the
City for future development pursuant to H&S Code Section 34191.5 (c)(2). For properties of the
Former Agency to be transferred to the City for future development, implementation of the
LRPMP will require securing one or more compensation agreements with the affected taxing
entities pursuant to H&S Code Section 34180 (f)(1) (the "Compensation Agreements"). The
City will seek Compensation Agreement(s) with the affected taxing entities after the LRPMP is
approved by the DOF. The City's acquisition of the Former Agency properties included in the
Site, and its ability to dispose of those properties pursuant to the MDA, will accordingly require
that the DOF first approve the LRPMP and that the City secure Compensation Agreement(s)
with the taxing entities. In addition, it is acknowledged that the California Theater has historical
significance and has been officially recognized as a site having such significance, and as a
consequence there may be restrictions on the nature and extent of development that may be
permissible on that site.
O. The Parties desire to negotiate mutually acceptable terms and conditions for
such development effort to be set forth in the MDA, which agreement will define the Parties'
rights, obligations, and participation in developing the Project on the Site.
AGREEMENT
1. Exclusive Good Faith Negotiations. The City and Developer, during the
Negotiation Period defined in Section 4 below, and only for so long as Developer timely meets
its obligations under this Agreement, shall negotiate exclusively and in good faith regarding the
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EXHIBIT A
2015-244/SA2015-1
proposed development and operation of the Project, and the terms of the MDA. Good faith
negotiations shall include, without limitation, attending scheduled meetings, directing
consultants to cooperate with the other Party to the extent reasonably practicable and
necessary to negotiations, providing information reasonably available and necessary to
negotiations, and promptly reviewing and returning any comments on correspondence, reports,
documents, or agreements received from the other Party.
(a) Initial Housing Project. As previously disclosed to the City, pursuant to a
separate agreement between Developer and KB Home California LLC, a Delaware limited
liability company ("KB Home"), KB Home desires to acquire a portion of the Mall Site for the
development of for sale housing. The terms and conditions of such disposition to KB Home
shall be negotiated and incorporated into the MDA. If, pursuant to negotiation of the MDA, it
becomes necessary and expedient for the terms of such disposition to be set forth in a separate
disposition and development agreement, then KB Home shall be added to the Developer's team
and be made a party to this Agreement pursuant to an Addendum in form and substance
satisfactory to KB Home and the City. Any such disposition and development agreement will be
entered into concurrently with, and subject to the MDA. During the Negotiation Period, and only
for so long as Developer timely meets its obligations under this Agreement and KB Home meets
its obligations hereunder pursuant to such Addendum, the City shall negotiate in good faith with
Developer and KB Home regarding the proposed development and operation of housing
development at the Mall Site.
(b) Private Proiect Financing. As previously disclosed to the City, pursuant to
a separate agreement between Developer and Silverpeak Real Estate Partners, LLC, a
Delaware limited liability company ("Silverpeak"), Silverpeak desires to provide private
financing for the development and construction of the Project or portions thereof. The terms
and conditions of such financing from Silverpeak shall be negotiated during the Negotiation
Period and, if applicable, incorporated into the MDA.
2. Development Concept/Scope. The negotiations hereunder are based on a
development concept that will include components described in Recital K above.
3. Compliance with Dissolution Law . As described in Recital N above, the City's
acquisition of the Site, and hence its ability to dispose of the Site pursuant to the MDA, will be
subject in part to its compliance with the requirements of the Dissolution Law. . The City
hereby agrees to timely take such actions as are reasonably necessary in order to comply with
such requirements.
4. Negotiation Period. The Parties will negotiate the MDA for six (6) months (180
calendar days) from the Effective Date (the "Negotiation Period"), unless negotiations are
sooner terminated as provided herein. When the Negotiation Period expires, this Agreement
shall automatically terminate. Notwithstanding the foregoing, the Negotiation Period shall
automatically be extended for one (1) additional period of six (6) months (180 calendar days)
unless (i) the Council of the City of San Bernardino (the "Council") makes a finding that either
Developer is not in material compliance with this Agreement or the Parties have not achieved
significant progress in negotiation of the MDA, or (ii) Developer has failed to make the sixth (6th)
monthly installment of the Deposit to the City pursuant to Section 11.4 below.
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EXHIBIT A
2015-244/SA2015-1
If, upon expiration of the Negotiation Period, including any extension as provided above,
the the Council has not made the requisite findings and approved a MDA that the Parties timely
execute, then this Agreement shall automatically terminate unless the Council has approved,
and the Parties have entered into, a written extension agreement. Upon termination of this
Agreement, the Successor Agency and/or the City thereafter may deal with the Site as the
Successor Agency and/or the City in their respective sole and absolute discretion may
determine.
5. Meetings. The Parties shall jointly prepare a meeting/conference call schedule
that anticipates accomplishing the timely negotiation of the MDA. The Parties and City staff
shall meet or hold a conference call on average every (4) four weeks.
6. Proposed Terms and Conditions for MDA. The Parties shall negotiate the
proposed terms for the MDA. The MDA will detail the Parties' rights and obligations for
developing, financing, constructing, operating, and disposing of the Project on the Site, and may
include, without limitation, the following:
6.1 The matters set forth in Recital K above;
6.2 Participating and cooperating with the City in preparation of the Master
Plan, subject to compliance with all applicable ordinances, requirements, rules, regulations, and
policies of the City including, without limitation, applicable zoning ordinances, requirements,
rules, regulations, and policies, as from time to time amended, and as the applicability thereof
may be limited by vesting subdivision maps and/or a statutory development agreement
proposed to be entered into by Developer or one or more of Developer's assignees and the
City;
6.3 Developer's sole obligation for determining whether the Site or any part
thereof is suitable for the Project (which determination may include any title concerns,
environmental contamination or other matters that Developer may deem reasonably necessary
or appropriate for determining suitability);
6.4 The City's obligations and powers, if any, to permit Developer access to
the Site and right to perform due diligence investigation and tests thereon;
6.5 The covenants, conditions, and restrictions upon the Site and the Project,
or any part thereof including, without limitation, use, maintenance, construction, powers of
termination, rights and restrictions of tenants and/or owners;
6.6 Signage for the Project;
6.7 Economic development standards for the Project;
6.8 Reasonable restrictions on Developer's rights to assign or otherwise
transfer any rights and obligations under the MDA, and any property that the City may convey to
Developer;
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EXHIBIT A
2015-244/SA2015-1
6.9 Payment of development costs and fees under the MDA, including master
planning, entitlements, impact review, demolition and infrastructure development and
construction;
6.10 A mechanism for establishing the disposition price of each development
parcel;
6.11 A mechanism permitting Developer (or its constituent members and their
respective affiliates) to provide consulting, engineering, design, financing and/or construction
services to the developer of any development parcel, including any "public private partnership"
for the development on such parcel of a public improvement;
6.12 Payment of the costs of (a) third party expenses; (b) civil engineering,
other engineering, planning, consulting, architectural and other professional services, including
those to be provided in connection with master planning the Mall Site and implementation of the
Land Use Entitlements Approval Plan; (c) construction services; (d) development management
and related services; (e) environmental services, including in connection with remediation of the
Mall Improvements, and (f) construction services, including in connection with demolition of the
Mall Improvements and the construction of necessary infrastructure;
6.13 Participation in the increased value of portions of the Site disposed of to
developers or tenants for redevelopment.
6.14 Any other City obligations relating to the Project and its development.
The terms and conditions set forth in this Section 6 are representative and not
exhaustive. The Parties do not intend this Agreement to create any legally binding obligations
regarding the content of any MDA. For any MDA or terms thereof, to be enforceable, it must be
contained in a final writing, approved by the Council, after complying with all applicable laws,
and must be executed by and delivered to each Party.
7. Developer's Principals and Legal Status. Developer shall disclose such
information to the the City regarding its principals, legal status, and financial capabilities and
project experience as the City may reasonably request.
8. Financial and Other Information. Developer shall provide the City any financial
information that the City may reasonably request including, without limitation, a true, correct,
and complete copy of its most recent financial statement. Developer shall provide the City with
other information, data, and commitments that the City may reasonably request to ascertain
Developer's financial and performance capabilities to expeditiously complete the Project on the
Site. Developer will identify any such information that is proprietary, and to the extent permitted
by law, the City will use best efforts to maintain the confidentiality thereof, except that the City
may disclose such information to the City representatives, consultants, employees, and officers,
and the City shall disclose such information as any court or other authoritative body may direct
or order.
9. Assignment Prohibited. Developer may not assign any of its member's
respective rights or obligations under this Agreement without the express written consent of the
City. The City may give or deny consent in its sole and absolute discretion. Notwithstanding
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EXHIBIT A
2015-244/SA2015-1
the foregoing prohibition on assignment, with written notice to the Deputy City Manager,
AECOM may assign its rights and obligations to an entity over which AECOM Parent retains
majority control, provided AECOM first submits to the City a report and substantiating evidence
of AECOM Parent's majority control and the entity's assets, financial capability, and applicable
experience. Upon any permitted assignment hereunder, AECOM and the assignee shall
execute and deliver to the City such documentation as the City may reasonably require. When
the City receives all such documentation, the assignee shall thereafter be deemed to be
"AECOM," and, along with Fransen, the "Developer", under this Agreement for all purposes. In
addition, AECOM may delegate any consulting, engineering, construction or finance aspect of
its obligations hereunder or under the MDA to any entity that is owned by or otherwise an
affiliate of AECOM Parent.
10. Plans Reports Studies and Investigations.
10.1 Copies to Agency. Developer shall indemnify, defend, and hold the
Successor Agency and the City, and their respective representatives, officials, officers, and
employees, harmless from any losses, liabilities, claims, causes of action, injuries, or expenses
including, without limitation, reasonable attorneys' fees and costs, arising from, relating to, or in
any way connected with any plans, reports, studies, and/or investigations (collectively, the
"Reports"; individually a "Report") respecting the Site and the Project, if any, that Developer
prepares or causes to be prepared during the Negotiation Period, or the preparation thereof, or
the use thereof without modification, for the Project. The foregoing indemnity shall not apply
where, as described in Section 11.3, the Successor Agency and/or the City or a transferee of
either uses a Report in any form for another project or for the proposed Project with a developer
other than Developer
10.2 Proprietary Rights. If this Agreement terminates for any reason, without
an executed MDA, the City may retain all copies of Reports in its possession. All Reports will
be delivered to the City free of all claims or interest of Developer. If any Report is then
incomplete, and the City wants it to be completed, the City shall pay the costs to complete any
such Report or shall reimburse Developer for all out-of-pocket costs and expenses for
completing any such Report. For all such Reports delivered to or coming into the City's
possession, the City may demand and Developer shall transfer to the City, without cost, all right,
title, interest, and ownership rights that Developer has or may have to any or all such Reports,
and will notify the City of known third party rights, if any, in any Report, such as copyright,
trademark, or other use limitations retained by persons other than Developer. Upon the City's
request, Developer, at no cost to Developer, will cooperate with the City to obtain any third party
rights that may be necessary for the City to use any Report.
10.3 Use of Reports. After acquiring any Developer rights in any Report and
subject to acquiring any third party rights, the City may thereafter use, grant, license, or
otherwise dispose of such Report to any person or entity for Site development or any other
purpose. Any City use or the City's transferee's use of any Report in completed or uncompleted
form for other projects or for this Project, with a developer other than Developer, will be at the
City's risk and without liability or legal exposure to Developer. The City shall indemnify, defend,
and hold the Developer, its successors, and assigns harmless from any losses, liabilities,
claims, causes of action, injuries, or expenses including, without limitation, attorneys' fees and
costs, arising from or relating to the City's transferee's use of any Report for other projects or for
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EXHIBIT A
2015-244/SA2015-1
this Project with a developer other than Developer. This indemnity shall not apply where, as
described in Section 11.1, the Developer, under an MDA or otherwise, uses a Report or Reports
in any form for the Project.
11. Additional Developer Responsibilities. Without limiting any other provision of this
Agreement, Developer shall, during the Negotiation Period and any extension thereof, do the
following at its sole cost and expense, in furtherance of the negotiation process:
11.1 Meetings. Developer shall meet with the City's staff and representatives
to review and understand the planning and design criteria applicable to the Site, and drafting
and negotiating the MDA.
11.2 Reports. Developer shall make oral and written progress reports to the
City and/or its staff as the Deputy City Manager may reasonably request.
11.3 Rights of Entry. Before entering upon any property within the Site,
whether for site assessment or other due diligence, Developer shall first obtain a right of entry
from the Successor Agency (in Successor Agency's customary form and otherwise in form
reasonably acceptable to the Successor Agency) or the applicable property owner, and any
tenant. Developer may ask the Successor Agency and/or the City to use its best efforts to help
Developer obtain a right of entry upon private property.
11.4 Professional Services Costs; Non-Refundable Deposit. Within thirty (30)
days after the Effective Date, and thereafter on the first business day of each of the next five (5)
calendar months, Developer will deposit with the City a deposit in the amount of Ten Thousand
Dollars ($10,000) (each such deposit, and all such deposits collectively being referred to herein
as the "Deposit'). If the Negotiation Period is extended pursuant to Section 4(a) above, then
thereafter on the first business day of each of the next two (2) calendar months, Developer will
deposit with the City an additional deposit in the amount of Ten Thousand Dollars ($10,000), for
a total Deposit of $80,000. The City will place the Deposit into an interest bearing account.
Developer's failure to deliver timely any Deposit shall be a default of this Agreement. The
Deposit may be used by the City for third party costs in connection with the negotiation of the
MDA, including the City's legal fees and financial and other consulting services. Neither the City
nor the Successor Agency shall have any obligation (from the Deposit or otherwise) to
reimburse Developer's costs for any Reports prepared prior to the entry into the MDA.
The Deposit shall be non-refundable unless the City shall be found by a court or
other tribunal having jurisdiction to have materially breached this Agreement, in which event any
unused portion of the Deposit shall be refunded to Developer.
The term "business day" as used in this Agreement means any day other than
(i) a
Saturday or Sunday (ii) a day on which commercial banks in California are authorized or
required by law to close or (iii) a day upon which the City is closed.
11.5 Environmental Reports/Studies. Developer shall promptly provide the
City with copies of any environmental reports and any other studies of the physical condition of
the Mall Site, if any, that Developer prepares, or causes to be prepared, or otherwise obtains
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EXHIBIT A
2015-244/SA2015-1
with respect to the Site or the Project (which shall be deemed to be "Reports" in accordance
with Section 10 above).
12. City Responsibilities. The City, during the Negotiation Period and any extension
thereof, in furtherance of the negotiation process, will cooperate and assist Developer, as
needed, in fulfilling Developer's obligations hereunder.
13. CEQA and Land Use Approval. This Agreement is not subject to the California
Environmental Quality Act (California Public Resources Code §§21000 et seq.), and the State of
California CEQA Guidelines (California Code of Regulations §§15000-15387), in each case as
may be amended from time to time. ("CEQX), because the City's actions in approving it are
NOT a "project" as defined in CEQA Guidelines Section 15378 and therefore will not result in a
physical change in the environment pursuant to CEQA Guidelines Section 15060(c)(2). By
executing this Agreement, the City does not commit to proceed with the Project, and the
execution of this Agreement shall not foreclose any alternatives or mitigation measures that
would ordinarily be part of CEQA review, including the alternative of not going forward with the
Project. Nothing contained herein shall be deemed to limit, restrict, amend or modify, nor to
constitute a waiver or release inan ordinances City's police
City or State State land including,
use regulations,It under
general plan, zoning CEQA, or other
applicable laws.
14. Brokers. The City shall not be liable for any real estate commission or brokerage
fees arising from, relating to, or in any way connected with, the transactions contemplated by
this Agreement. Developer represents and warrants that it has not engaged any broker, agent,
or finder in connection with such transactions. Developer shall indemnify, defend, and hold the
Successor Agency and the City, and their respective representatives, officials, employees,
officers harmless from and against any losses and liabilities including, without limitation,
reasonable attorneys' fees, arising from, relating to, or in any way connected with, any claim by
any broker, agent, or finder for any commission, fee, or other compensation in connection with
such transactions or any breach of such representation and warranty by Developer.
15. Entire A reemenfi Attorneys' Fees Time is of the Essence. This Agreement
represents the entire agreement of the Parties with respect to the matters set forth herein. This
Agreement may be amended only in a writing signed by the Parties,
and approved by the
Council. If any Party brings an action or files a proceeding in connection with the enforcement
of its respective rights or as a consequence of any breach by the other Party of its obligations
hereunder, then the prevailing Party in such action or proceeding shall be entitled to have its
reasonable attorneys' fees and costs and other out-of-pocket expenditures paid by the losing
Party. Time is of the essence in this Agreement.
16. Nondiscrimination. Developer covenants and agrees that there shall be no
discrimination against or segregation of any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin, ancestry, age, or handicap, in the sale,
lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Site, nor shall Developer
or any person claiming under or through Developer, establish or permit any such practice or
practices of discrimination or segregation in the selection, location, number, use or occupancy
of tenants, lessees, sublessees, subtenants, or vendees of the Site.
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EXHIBIT A
2015-244/SA2015-1
17. Notices. All notices required or permitted hereunder shall be delivered in person
or by facsimile, by overnight courier, or by registered or certified mail, postage prepaid, return
receipt requested, to such Party at its address shown below, or to any other place designated in
writing by such Party:
City: The City of San Bernardino
300 North "D" Street, Suite 600
San Bernardino, CA 92418
Attention: Bill R. Manis, Deputy City Manager
With a copy to: City of San Bernardino
City Attorney's Office
300 North "D" Street, Suite 600
San Bernardino, CA 92418
Attention: Donn Dimichele
Deputy City Attorney IV
Developer: AECOM Technical Services, Inc.
515 So. Flower Street, Eighth Floor
Los Angeles, California 90071
Attention: Mr. Stephen Reinstein,
Director, Integrated Delivery
And The Fransen Company
410 Campus Drive, Suite 200
Newport Beach, California 92660
Attention: Mr. John Fransen
With a copy to: Liner LLP
1100 Glendon Avenue, Suite 1400
Los Angeles, California 90024
Attention: Michael J. Kiely, Esq.
Any such notice shall be deemed received upon delivery, if delivered personally or by
facsimile, one day after delivery to the courier if delivered by courier, and three days after
deposit into the United States Mail if delivered by registered or certified mail.
18. Agreement Limitations. The City is not, by entering this Agreement, committing
itself to or agreeing to undertake: (a) land acquisition, (b) land disposition to Developer, (c) land
use approvals; or (d) any other act or activities requiring the subsequent independent exercise
of discretion by the City or any agency or department thereof. This Agreement does not
constitute an agreement by the City to exercise control over property within the Site. This
Agreement is merely an agreement to enter exclusive negotiations according to the terms
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EXHIBIT A
2015-244/SA2015-1
hereof, with all final discretion and approval by the City Council as to any MDA, and all
proceedings and decisions in connection therewith.
19. Miscellaneous provisions.
19.1 Governinq Law and Venue. California law governs this Agreement and
its provisions will be construed according to California laws. Venue for filing any action to
enforce or interpret this Agreement will be San Bernardino , California.
19.2 Headings. The section headings in this Agreement are for convenience
only and do not explain, modify, or add to the meaning of this Agreement.
19.3 Severability. The provisions of this Agreement are severable. The
invalidity or unenforceability of any provision in this Agreement will not affect the other
provisions.
19.4 Interpretation. This Agreement is the result of the combined efforts of the
parties. Should any provision be found ambiguous, the ambiguity will not be resolved by
construing this Agreement in favor or against any party, but by construing the terms according
to their generally accepted meaning.
19.5 Precedence of Documents. If the body of this Agreement and any Exhibit
or Attachment conflict, the terms in the body of this Agreement will control. Any term or
condition in any Exhibit or Attachment that purports to modify the allocation of risk between the
parties is void.
19.6 Successors and Assigns. Subject to the limitation on assignment, this
Agreement is binding upon, and will inure to the benefit of all parties, and their respective
successors and assigns.
19.7 Counterparts. The parties may sign this Agreement in counterparts, each
of which when signed and delivered will be deemed an original, and all of which together will
constitute one instrument.
19.8 Effective Date. The Effective Date of this Agreement shall be the date in
2015 that both the Successor Agency and the City have duly executed this Agreement.
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EXHIBIT A
2015-244/SA2015-1
EXCLUSIVE NEGOTIATION AGREEMENT
among
AECOM TECHNICAL SERVICES, INC.
and
THE FRANSEN COMPANY
and
THE CITY OF SAN BERNARDINO
IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates and in
the year set forth below.
THE CITY OF SAN BERNARDINO,
a California charter city
By:
Name: Allen J. Parker
Title: City Manager
Dated:
APPROVED AS TO FORM
GARY D. SAENZ,
City of San Bernardino City
Attorney
By: VAA
N e: olena E. Grider
itle: Chi f Assistant City
A ney
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EXHIBIT A
2015-244/SA2015-1
EXCLUSIVE NEGOTIATION AGREEMENT
among
AECOM TECHNICAL SERVICES, INC.
and
THE FRANSEN COMPANY
and
THE CITY OF SAN BERNARDINO
DEVELOPER:
AECOM TECHNICAL SERVICES, INC.,
a California corporation
By:
Name:
Title:
Dated: November_ 2015
The FRANSEN COMPANY, INC.,
a California corporation
By:
Name. John Fransen
Title: President
Dated: November— 2015
ACKNOWLEDGMENT BY SUCCESSOR AGENCY
The City of San Bernardino, as Successor Agency to the Redevelopment Agency of the
City of San Bernardino, hereby acknowledges the execution of this Agreement.
By:
Name: Allen J. Parker
Title: City Manager
Dated: November_ 2015
13
EXHIBIT A
2015-244/SA2015-1
EXCLUSIVE NEGOTIATION AGREEMENT
among
AECOM TECHNICAL SERVICES, INC.
and
THE FRANSEN COMPANY
and
THE CITY OF SAN BERNARDINO
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Effective Date: November 2_, 2015
EXHIBIT A
2015-244/SA2015-1
EXCLUSIVE NEGOTIATION AGREEMENT
This EXCLUSIVE NEGOTIATION AGREEMENT (this "Agreement") is dated, for
reference purposes, as of the Effective Date, as defined in Section 19.8 of this Agreement, and
is entered among THE CITY OF SAN BERNARDINO, a California charter city (the "City"), on
the one hand, and AECOM TECHNICAL SERVICES, INC., a California corporation
("AECOM")[an affiliate of AECOM, a Delaware corporation formerly known as AECOM
Technology Corporation and/or AECOM Technologies ("AECOM Parent")], and THE FRANSEN
COMPANY, INC., a California corporation ("Fransen", and together with AECOM, "Developer").
The City and Developer are sometimes referred herein collectively as the "Parties", and each
individually as a "Party."
RECITALS
A. The City desires to encourage and effectuate the redevelopment of (i) certain real
property, comprising approximately 43 acres, generally bounded by Fourth Street on the north,
E Street on the east, Second Street on the south, and G Street on the West, improved with a
retail mall, parking structure and related improvements (collectively, the "Mall Improvements"),
commonly known as Carousel Mall, 300 North E Street, San Bernardino, County of San
Bernardino (the "Mall Site"), and (ii) certain real property, comprising approximately 5.5 acres,
located on the northwest corner of Fourth Street and E Street, improved with a Regal Theaters
multiplex (the "Regal Theaters") and the historic California Theater ("California Theater")
(collectively, the "Theater Square", and together with the Mall Site, the "Site").
B. The Mall Site comprises (i) the former Harris Co./Gottschalks department store
currently owned by El Corte Ingles, an international department store retailer based in Madrid,
Spain ("El Corte Ingles")(such portion, the "El Corte Ingles Portion"); (ii) the former J.C.
Penney department store and auto center (such portion, the "San Manuel Portion") currently
owned by the San Manuel Band of Mission Indians (the "San Manuel Band of Mission
Indians"); and (iii) the balance (such portion, the "Agency Portion"), which is currently owned
by the City as the Successor Agency to the Redevelopment Agency of the City of San
Bernardino.
C. On November 20, 2014, the City issued a Solicitation of Interest for 43 Acre
Transit Adjacent Site in the Downtown Core of Inland Southern California City (the
"Solicitation"), seeking letters of interest from regional and national developers to
reuse/redevelop the Mall Site.
D. On January 15, 2015, a letter of interest was submitted on behalf of AECOM and
Fransen for the master planning, environmental impact review, disposition and development of
the Site.
E. On February 15, 2015, Developer met with the City and presented its proposed
approach for the Project (as defined below).
F. On April 20, 2015, the City notified Developer that Developer had been selected,
along with three (3) others, from among the seven (7) respondents to the Solicitation, for further
consideration by the City.
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EXHIBIT A
2015-244/SA2015-1
G. On June 4, 2015, the City issued a Carousel Mall Developer Interview Phase II
questionnaire to Developer and certain other interested parties, and in response thereto,
Developer submitted to the City a response letter dated August 2015.
H. On July 16, 2015, the City held interviews with the finalists being considered for
the Carousel Mall Project.
I. On August 10, 2015, the City sent the final two candidates a follow-up list of
questions to further define their respective proposals.
J. On September 30, 2015, the City met with the Developer and informed them that
they had been selected for the Project.
K. After meeting with and soliciting input from the City and members of the
community, Developer proposes to enter into a master development agreement (an "MDA") with
the City to provide for the following:
(i) Negotiation with and, if possible, entry into agreements with El Corte
Ingles providing for the inclusion of the El Corte Ingles Portion in the Project and the San
Manuel Band of Mission Indians for the inclusion of the San Manuel Portion in the Project;
(ii) Demolition of the Mall Improvements, including associated engineering,
environmental remediation, and construction services by AECOM and/or its affiliates;
(iii) Preparation of a master plan (the "Master Plan") for the redevelopment of
the Site in phases, potentially (but not necessarily) including retail buildings and other
commercial uses, market rate for sale housing and rental housing, and private and
governmental office buildings, while recognizing and retaining the downtown area's unique
architectural fabric and historic building characteristics (collectively the "Project"), subject to
City approval;
(iv) Preparation of an entitlement and environmental impact review program
for the Master Plan, subject to City approval (the "Land Use Entitlements Approval
Program");
(v) Implementation of the Land Use Entitlements Approval Program,
including environmental impact review consulting and other engineering services by AECOM
and/or its affiliates;
(vi) Construction of new streets through the Mall Site and other infrastructure
by AECOM and/or its affiliates;
(vii) Potentially expedited disposition, prior to full implementation of the Land
Use Entitlements Approval Program, of (a) portions of the Mall Site to KB Home (as defined in
Section 1(b) below) and/or other residential developers for the development of market rate for
sale housing; and (b) certain portions of Theater Square; and
(viii) Preparation and, with the City, implementation of a program for the
disposition of other portions of the Site to qualified developers, including the identification of and
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EXHIBIT A
2015-244/SA2015-1
negotiation of disposition and development agreements with such qualified developers (which
developers may be, but shall not be required to be, affiliates of Developer).
L. The Site lies within a Redevelopment Project Area (the "Project Area"), and
complies with and furthers the goals and objectives of the Redevelopment Plan for the Project
Area.
M. On or about June 28, 2011, AB1 X 26 (as amended from time to time, the
"Dissolution Law") became effective and was added to the laws of the State of California (the
"State"), providing for the dissolution and winding down of redevelopment agencies throughout
the State, including the Redevelopment Agency of the City of San Bernardino (the "Former
Agency"). On January 9, 2012, pursuant to the Dissolution Law, the City elected to serve as
the Successor Agency to the Former Agency (the "Successor Agency"), and the Successor
Agency, as a separate public entity from the City, administers the dissolution and winding down
of the Former Agency. On February 1, 2012, pursuant to the Dissolution Law, the Former
Agency was dissolved by operation of law, and upon dissolution, all assets, properties and
contracts of the Former Agency, including the Former Agency properties included in the Site,
were transferred by operation of law to the Successor Agency pursuant to the terms of Health &
Safety Code ("H&S Code") Section 34175(b).]
N. Pursuant to H&S Code Section 34191.5(b) of the Dissolution Act, on September
15, 2015, the Successor Agency prepared and submitted to the California Department of
Finance (the "DOF") for approval its Long Range Property Management Plan (the "LRPMP"),
as approved by its Oversight Board, that addressed the disposition and use of certain real
properties of the Former Agency, including the potential disposition of the properties. The
LRPMP proposes that the Former Agency properties included in the Site be transferred to the
City for future development pursuant to H&S Code Section 34191.5 (c)(2). For properties of the
Former Agency to be transferred to the City for future development, implementation of the
LRPMP will require securing one or more compensation agreements with the affected taxing
entities pursuant to H&S Code Section 34180 (f)(1) (the Compensation Agreements"). The
City will seek Compensation Agreement(s) with the affected taxing entities after the LRPMP is
approved by the DOF. The City's acquisition of the Former Agency properties included in the
Site, and its ability to dispose of those properties pursuant to the MDA, will accordingly require
that the DOF first approve the LRPMP and that the City secure Compensation Agreement(s)
with the taxing entities. In addition, it is acknowledged that the California Theater has historical
significance and has been officially recognized as a site having such significance, and as a
consequence there may be restrictions on the nature and extent of development that may be
permissible on that site.
O. The Parties desire to negotiate mutually acceptable terms and conditions for
such development effort to be set forth in the MDA, which agreement will define the Parties'
rights, obligations, and participation in developing the Project on the Site.
AGREEMENT
1. Exclusive Good Faith Negotiations. The City and Developer, during the
Negotiation Period defined in Section 4 below, and only for so long as Developer timely meets
its obligations under this Agreement, shall negotiate exclusively and in good faith regarding the
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EXHIBIT A
2015-244/SA2015-1
proposed development and operation of the Project, and the terms of the MDA. Good faith
negotiations shall include, without limitation, attending scheduled meetings, directing
consultants to cooperate with the other Party to the extent reasonably practicable and
necessary to negotiations, providing information reasonably available and necessary to
negotiations, and promptly reviewing and returning any comments on correspondence, reports,
documents, or agreements received from the other Party.
(a) Initial Housing Project. As previously disclosed to the City, pursuant to a
separate agreement between Developer and KB Home California LLC, a Delaware limited
liability company ("KB Home"), KB Home desires to acquire a portion of the Mall Site for the
development of for sale housing. The terms and conditions of such disposition to KB Home
shall be negotiated and incorporated into the MDA. If, pursuant to negotiation of the MDA, it
becomes necessary and expedient for the terms of such disposition to be set forth in a separate
disposition and development agreement, then KB Home shall be added to the Developer's team
and be made a party to this Agreement pursuant to an Addendum in form and substance
satisfactory to KB Home and the City. Any such disposition and development agreement will be
entered into concurrently with, and subject to the MDA. During the Negotiation Period, and only
for so long as Developer timely meets its obligations under this Agreement and KB Home meets
its obligations hereunder pursuant to such Addendum, the City shall negotiate in good faith with
Developer and KB Home regarding the proposed development and operation of housing
development at the Mall Site.
(b) Private Protect Financing. As previously disclosed to the City, pursuant to
a separate agreement between Developer and Silverpeak Real Estate Partners, LLC, a
Delaware limited liability company ("Silverpeak"), Silverpeak desires to provide private
financing for the development and construction of the Project or portions thereof. The terms
and conditions of such financing from Silverpeak shall be negotiated during the Negotiation
Period and, if applicable, incorporated into the MDA.
2. Development Concept/Scope. The negotiations hereunder are based on a
development concept that will include components described in Recital K above.
3. Compliance with Dissolution Law . As described in Recital N above, the City's
acquisition of the Site, and hence its ability to dispose of the Site pursuant to the MDA, will be
subject in part to its compliance with the requirements of the Dissolution Law. . The City
hereby agrees to timely take such actions as are reasonably necessary in order to comply with
such requirements.
4. Negotiation Period. The Parties will negotiate the MDA for six (6) months (180
calendar days) from the Effective Date (the "Negotiation Period"), unless negotiations are
sooner terminated as provided herein. When the Negotiation Period expires, this Agreement
shall automatically terminate. Notwithstanding the foregoing, the Negotiation Period shall
automatically be extended for one (1) additional period of six (6) months (180 calendar days)
unless (i) the Council of the City of San Bernardino (the "Council") makes a finding that either
Developer is not in material compliance with this Agreement or the Parties have not achieved
significant progress in negotiation of the MDA, or (ii) Developer has failed to make the sixth (6th)
monthly installment of the Deposit to the City pursuant to Section 11.4 below.
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EXHIBIT A
2015-244/SA2015-1
If, upon expiration of the Negotiation Period, including any extension as provided above,
the the Council has not made the requisite findings and approved a MDA that the Parties timely
execute, then this Agreement shall automatically terminate unless the Council has approved,
and the Parties have entered into, a written extension agreement. Upon termination of this
Agreement, the Successor Agency and/or the City thereafter may deal with the Site as the
Successor Agency and/or the City in their respective sole and absolute discretion may
determine.
5. Meetings. The Parties shall jointly prepare a meeting/conference call schedule
that anticipates accomplishing the timely negotiation of the MDA. The Parties and City staff
shall meet or hold a conference call on average every (4) four weeks.
6. Proposed Terms and Conditions for MDA. The Parties shall negotiate the
proposed terms for the MDA. The MDA will detail the Parties' rights and obligations for
developing, financing, constructing, operating, and disposing of the Project on the Site, and may
include, without limitation, the following:
6.1 The matters set forth in Recital K above;
6.2 Participating and cooperating with the City in preparation of the Master
Plan, subject to compliance with all applicable ordinances, requirements, rules, regulations, and
policies of the City including, without limitation, applicable zoning ordinances, requirements,
rules, regulations, and policies, as from time to time amended, and as the applicability thereof
may be limited by vesting subdivision maps and/or a statutory development agreement
proposed to be entered into by Developer or one or more of Developer's assignees and the
City;
6.3 Developer's sole obligation for determining whether the Site or any part
thereof is suitable for the Project (which determination may include any title concerns,
environmental contamination or other matters that Developer may deem reasonably necessary
or appropriate for determining suitability);
6.4 The City's obligations and powers, if any, to permit Developer access to
the Site and right to perform due diligence investigation and tests thereon;
6.5 The covenants, conditions, and restrictions upon the Site and the Project,
or any part thereof including, without limitation, use, maintenance, construction, powers of
termination, rights and restrictions of tenants and/or owners;
6.6 Signage for the Project;
6.7 Economic development standards for the Project;
6.8 Reasonable restrictions on Developer's rights to assign or otherwise
transfer any rights and obligations under the MDA, and any property that the City may convey to
Developer;
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EXHIBIT A
2015-244/SA2015-1
6.9 Payment of development costs and fees under the MDA, including master
planning, entitlements, impact review, demolition and infrastructure development and
construction;
6.10 A mechanism for establishing the disposition price of each development
parcel;
6.11 A mechanism permitting Developer (or its constituent members and their
respective affiliates) to provide consulting, engineering, design, financing and/or construction
services to the developer of any development parcel, including any "public private partnership"
for the development on such parcel of a public improvement;
6.12 Payment of the costs of (a) third party expenses; (b) civil engineering,
other engineering, planning, consulting, architectural and other professional services, including
those to be provided in connection with master planning the Mall Site and implementation of the
Land Use Entitlements Approval Plan; (c) construction services; (d) development management
and related services; (e) environmental services, including in connection with remediation of the
Mall Improvements, and (f) construction services, including in connection with demolition of the
Mall Improvements and the construction of necessary infrastructure;
6.13 Participation in the increased value of portions of the Site disposed of to
developers or tenants for redevelopment.
6.14 Any other City obligations relating to the Project and its development.
The terms and conditions set forth in this Section 6 are representative and not
exhaustive. The Parties do not intend this Agreement to create any legally binding obligations
regarding the content of any MDA. For any MDA or terms thereof, to be enforceable, it must be
contained in a final writing, approved by the Council, after complying with all applicable laws,
and must be executed by and delivered to each Party.
7. Developer's Principals and Legal Status. Developer shall disclose such
information to the the City regarding its principals, legal status, and financial capabilities and
project experience as the City may reasonably request.
8. Financial and Other Information. Developer shall provide the City any financial
information that the City may reasonably request including, without limitation, a true, correct,
and complete copy of its most recent financial statement. Developer shall provide the City with
other information, data, and commitments that the City may reasonably request to ascertain
Developer's financial and performance capabilities to expeditiously complete the Project on the
Site. Developer will identify any such information that is proprietary, and to the extent permitted
by law, the City will use best efforts to maintain the confidentiality thereof, except that the City
may disclose such information to the City representatives, consultants, employees, and officers,
and the City shall disclose such information as any court or other authoritative body may direct
or order.
9. Assignment Prohibited. Developer may not assign any of its member's
respective rights or obligations under this Agreement without the express written consent of the
City. The City may give or deny consent in its sole and absolute discretion. Notwithstanding
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the foregoing prohibition on assignment, with written notice to the Deputy City Manager,
AECOM may assign its rights and obligations to an entity over which AECOM Parent retains
majority control, provided AECOM first submits to the City a report and substantiating evidence
of AECOM Parent's majority control and the entity's assets, financial capability, and applicable
experience. Upon any permitted assignment hereunder, AECOM and the assignee shall
execute and deliver to the City such documentation as the City may reasonably require. When
the City receives all such documentation, the assignee shall thereafter be deemed to be
"AECOM," and, along with Fransen, the "Developer", under this Agreement for all purposes. In
addition, AECOM may delegate any consulting, engineering, construction or finance aspect of
its obligations hereunder or under the MDA to any entity that is owned by or otherwise an
affiliate of AECOM Parent.
10. Plans Reports Studies and Investigations.
10.1 Copies to Agency. Developer shall indemnify, defend, and hold the
Successor Agency and the City, and their respective representatives, officials, officers, and
employees, harmless from any losses, liabilities, claims, causes of action, injuries, or expenses
including, without limitation, reasonable attorneys' fees and costs, arising from, relating to, or in
any way connected with any plans, reports, studies, and/or investigations (collectively, the
"Reports"; individually a "Report") respecting the Site and the Project, if any, that Developer
prepares or causes to be prepared during the Negotiation Period, or the preparation thereof, or
the use thereof without modification, for the Project. The foregoing indemnity shall not apply
where, as described in Section 11.3, the Successor Agency and/or the City or a transferee of
either uses a Report in any form for another project or for the proposed Project with a developer
other than Developer
10.2 Proprietary Rights. If this Agreement terminates for any reason, without
an executed MDA, the City may retain all copies of Reports in its possession. All Reports will
be delivered to the City free of all claims or interest of Developer. If any Report is then
incomplete, and the City wants it to be completed, the City shall pay the costs to complete any
such Report or shall reimburse Developer for all out-of-pocket costs and expenses for
completing any such Report. For all such Reports delivered to or coming into the City's
possession, the City may demand and Developer shall transfer to the City, without cost, all right,
title, interest, and ownership rights that Developer has or may have to any or all such Reports,
and will notify the City of known third party rights, if any, in any Report, such as copyright,
trademark, or other use limitations retained by persons other than Developer. Upon the City's
request, Developer, at no cost to Developer, will cooperate with the City to obtain any third party
rights that may be necessary for the City to use any Report.
10.3 Use of Reports. After acquiring any Developer rights in any Report and
subject to acquiring any third party rights, the City may thereafter use, grant, license, or
otherwise dispose of such Report to any person or entity for Site development or any other
purpose. Any City use or the City's transferee's use of any Report in completed or uncompleted
form for other projects or for this Project, with a developer other than Developer, will be at the
City's risk and without liability or legal exposure to Developer. The City shall indemnify, defend,
and hold the Developer, its successors, and assigns harmless from any losses, liabilities,
claims, causes of action, injuries, or expenses including, without limitation, attorneys' fees and
costs, arising from or relating to the City's transferee's use of any Report for other projects or for
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this Project with a developer other than Developer. This indemnity shall not apply where, as
described in Section 11.1, the Developer, under an MDA or otherwise, uses a Report or Reports
in any form for the Project.
11. Additional Developer Responsibilities. Without limiting any other provision of this
Agreement, Developer shall, during the Negotiation Period and any extension thereof, do the
following at its sole cost and expense, in furtherance of the negotiation process:
11.1 Meetings. Developer shall meet with the City's staff and representatives
to review and understand the planning and design criteria applicable to the Site, and drafting
and negotiating the MDA.
11.2 Reports. Developer shall make oral and written progress reports to the
City and/or its staff as the Deputy City Manager may reasonably request.
11.3 Rights of Entry. Before entering upon any property within the Site,
whether for site assessment or other due diligence, Developer shall first obtain a right of entry
from the Successor Agency (in Successor Agency's customary form and otherwise in form
reasonably acceptable to the Successor Agency) or the applicable property owner, and any
tenant. Developer may ask the Successor Agency and/or the City to use its best efforts to help
Developer obtain a right of entry upon private property.
11.4 Professional Services Costs Non-Refundable Deposit. Within thirty (30)
days after the Effective Date, and thereafter on the first business day of each of the next five (5)
calendar months, Developer will deposit with the City a deposit in the amount of Ten Thousand
Dollars ($10,000) (each such deposit, and all such deposits collectively being referred to herein
as the "Deposit"). If the Negotiation Period is extended pursuant to Section 4(a) above, then
thereafter on the first business day of each of the next two (2) calendar months, Developer will
deposit with the City an additional deposit in the amount of Ten Thousand Dollars ($10,000), for
a total Deposit of $80,000. The City will place the Deposit into an interest bearing account.
Developer's failure to deliver timely any Deposit shall be a default of this Agreement. The
Deposit may be used by the City for third party costs in connection with the negotiation of the
MDA, including the City's legal fees and financial and other consulting services. Neither the City
nor the Successor Agency shall have any obligation (from the Deposit or otherwise) to
reimburse Developer's costs for any Reports prepared prior to the entry into the MDA.
The Deposit shall be non-refundable unless the City shall be found by a court or
other tribunal having jurisdiction to have materially breached this Agreement, in which event any
unused portion of the Deposit shall be refunded to Developer.
The term "business day" as used in this Agreement means any day other than
(i) a
Saturday or Sunday (ii) a day on which commercial banks in California are authorized or
required by law to close or (iii) a day upon which the City is closed.
11.5 Environmental Reports/Studies. Developer shall promptly provide the
City with copies of any environmental reports and any other studies of the physical condition of
the Mall Site, if any, that Developer prepares, or causes to be prepared, or otherwise obtains
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2015-244/SA2015-1
with respect to the Site or the Project (which shall be deemed to be "Reports" in accordance
with Section 10 above).
12. City Responsibilities. The City, during the Negotiation Period and any extension
thereof, in furtherance of the negotiation process, will cooperate and assist Developer, as
needed, in fulfilling Developer's obligations hereunder.
13. CEQA and Land Use Approval. This Agreement is not subject to the California
Environmental Quality Act (California Public Resources Code §§21000 et seq.), and the State of
California CEQA Guidelines (California Code of Regulations §§15000-15387), in each case as
may be amended from time to time. ("CEQA"), because the City's actions in approving it are
NOT a "project" as defined in CEQA Guidelines Section 15378 and therefore will not result in a
physical change in the environment pursuant to CEQA Guidelines Section 15060(c)(2). By
executing this Agreement, the City does not commit to proceed with the Project, and the
execution of this Agreement shall not foreclose any alternatives or mitigation measures that
would ordinarily be part of CEQA review, including the alternative of not going forward with the
Project. Nothing contained herein shall be deemed to limit, restrict, amend or modify, nor to
constitute a waiver or release of the City's police powers, including, without limitation, under any
general plan, zoning ordinances or other City or State land use regulations, CEQA, or other
applicable laws.
14. Brokers. The City shall not be liable for any real estate commission or brokerage
fees arising from, relating to, or in any way connected with, the transactions contemplated by
this Agreement. Developer represents and warrants that it has not engaged any broker, agent,
or finder in connection with such transactions. Developer shall indemnify, defend, and hold the
Successor Agency and the City, and their respective representatives, officials, employees, and
officers harmless from and against any losses and liabilities including, without limitation,
reasonable attorneys' fees, arising from, relating to, or in any way connected with, any claim by
any broker, agent, or finder for any commission, fee, or other compensation in connection with
such transactions or any breach of such representation and warranty by Developer.
15. Entire Agreement Attorneys' Fees Time is of the Essence. This Agreement
represents the entire agreement of the Parties with respect to the matters set forth herein. This
Agreement may be amended only in a writing signed by the Parties, and approved by the
Council. If any Party brings an action or files a proceeding in connection with the enforcement
of its respective rights or as a consequence of any breach by the other Party of its obligations
hereunder, then the prevailing Party in such action or proceeding shall be entitled to have its
reasonable attorneys' fees and costs and other out-of-pocket expenditures paid by the losing
Party. Time is of the essence in this Agreement.
16. Nondiscrimination. Developer covenants and agrees that there shall be no
discrimination against or segregation of any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin, ancestry, age, or handicap, in the sale,
lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Site, nor shall Developer
or any person claiming under or through Developer, establish or permit any such practice or
practices of discrimination or segregation in the selection, location, number, use or occupancy
of tenants, lessees, sublessees, subtenants, or vendees of the Site.
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2015-244/SA2015-1
17. Notices. All notices required or permitted hereunder shall be delivered in person
or by facsimile, by overnight courier, or by registered or certified mail, postage prepaid, return
receipt requested, to such Party at its address shown below, or to any other place designated in
writing by such Party:
City: The City of San Bernardino
300 North "D" Street, Suite 600
San Bernardino, CA 92418
Attention: Bill R. Manis, Deputy City Manager
With a copy to: City of San Bernardino
City Attorney's Office
300 North "D" Street, Suite 600
San Bernardino, CA 92418
Attention: Donn Dimichele
Deputy City Attorney IV
Developer: AECOM Technical Services, Inc.
515 So. Flower Street, Eighth Floor
Los Angeles, California 90071
Attention: Mr. Stephen Reinstein,
Director, Integrated Delivery
And The Fransen Company
410 Campus Drive, Suite 200
Newport Beach, California 92660
Attention: Mr. John Fransen
With a copy to: Liner LLP
1100 Glendon Avenue, Suite 1400
Los Angeles, California 90024
Attention: Michael J. Kiely, Esq.
Any such notice shall be deemed received upon delivery, if delivered personally or by
facsimile, one day after delivery to the courier if delivered by courier, and three days after
deposit into the United States Mail if delivered by registered or certified mail.
18. Agreement Limitations. The City is not, by entering this Agreement, committing
itself to or agreeing to undertake: (a) land acquisition, (b) land disposition to Developer, (c) land
use approvals; or (d) any other act or activities requiring the subsequent independent exercise
of discretion by the City or any agency or department thereof. This Agreement does not
constitute an agreement by the City to exercise control over property within the Site. This
Agreement is merely an agreement to enter exclusive negotiations according to the terms
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2015-244/SA2015-1
hereof, with all final discretion and approval by the City Council as to any MDA, and all
proceedings and decisions in connection therewith.
19. Miscellaneous provisions.
19.1 Governing Law and Venue. California law governs this Agreement and
its provisions will be construed according to California laws. Venue for filing any action to
enforce or interpret this Agreement will be San Bernardino , California.
19.2 Headings. The section headings in this Agreement are for convenience
only and do not explain, modify, or add to the meaning of this Agreement.
19.3 Severability. The provisions of this Agreement are severable. The
invalidity or unenforceability of any provision in this Agreement will not affect the other
provisions.
19.4 Interpretation. This Agreement is the result of the combined efforts of the
parties. Should any provision be found ambiguous, the ambiguity will not be resolved by
construing this Agreement in favor or against any party, but by construing the terms according
to their generally accepted meaning.
19.5 Precedence of Documents. If the body of this Agreement and any Exhibit
or Attachment conflict, the terms in the body of this Agreement will control. Any term or
condition in any Exhibit or Attachment that purports to modify the allocation of risk between the
parties is void.
19.6 Successors and Assigns. Subject to the limitation on assignment, this
Agreement is binding upon, and will inure to the benefit of all parties, and their respective
successors and assigns.
19.7 Counterparts. The parties may sign this Agreement in counterparts, each
of which when signed and delivered will be deemed an original, and all of which together will
constitute one instrument.
19.8 Effective Date. The Effective Date of this Agreement shall be the date in
2015 that both the Successor Agency and the City have duly executed this Agreement.
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2015-244/SA2015-1
EXCLUSIVE NEGOTIATION AGREEMENT
among
AECOM TECHNICAL SERVICES, INC.
and
THE FRANSEN COMPANY
and
THE CITY OF SAN BERNARDINO
IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates and in
the year set forth below.
THE CITY OF SAN BERNARDINO,
a California charters
Name: Alle J. Parker
Title: City Man ger
Dated: i
APPROVED AS TO FORM
GARY D. SAENZ,
City of San Bernardino City
Attorney
By:
N e: olena E. Grider
itle- Chi f Assistant City
A ney
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EXHIBIT A
2015-244/SA2015-1
EXCLUSIVE NEGOTIATION AGREEMENT
among
AECOM TECHNICAL SERVICES, INC.
and
THE FRANSEN COMPANY
and
THE CITY OF SAN BERNARDINO
DEVELOPER:
AECOM TECHNICAL SERVICES, INC.,
a California copporation
By:
Name:
Title:
Dated: November.02015
The FRANSEN COMPANY, INC.,
a California corporation
By:
Name- nsen
Title: President
Dated: Nov ber 2015
G
ACKNOWLEDGMENT BY SUCCESSOR AGENCY
The City of San Bernardino, as Successor Agency to the Redevelopment Agency of the
City of San Bernardino, hereby acknowledges the execution of this Agreement.
Name: Allen'r'J. Parker
Title: City Manager
Dated: NovemberG` ,2015
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EXHIBIT A