HomeMy WebLinkAbout2017-0811
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RESOLUTION NO. 2017-81
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, APPROVING THE EXCLUSIVE
RIGHT TO NEGOTIATE AGREEMENT BETWEEN THE CITY OF SAN
BERNARDINO AND MARK DEVELOPMENT, INC. WITH RESPECT TO
AN APPROXIMATELY 17.43 -ACRE VACANT PROPERTY LOCATED AT
THE SOUTHWEST CORNER OF EAST HIGHLAND AND ARDEN
AVENUES, SAN BERNARDINO, AND APPROVING CERTAIN RELATED
ACTIONS
WHEREAS, pursuant to Health and Safety Code (the "HSC") § 34172 (a) (1), the
Redevelopment Agency of the City of San Bernardino was dissolved on February 1, 2012; and
WHEREAS, consistent with the provisions of the HSC, on January 9, 2012, the Mayor
and City Council of the City of San Bernardino (the "City") elected to serve in the capacity of
the Successor Agency to the Redevelopment Agency of the City of San Bernardino (the
"Successor Agency"); and
WHEREAS, The Successor Agency is the current owner of an approximately 17.43 -acre)
vacant site located at the southwest corner of East Highland and Arden Avenues, generally bounded
by East Highland Avenue on the north, Arden Avenue on the east, 20"' Street on the south and North
Guthrie Avenue on the west (the "Property"); and
WHEREAS, the City is currently seeking to acquire from or otherwise arrange with the)
Successor Agency for disposition and development of the Property consistent with the City's contract
with respect to the Property with the United States Department of Housing and Urban Development)
regarding the Property (the "HUD Contract"); and
WHEREAS, during January 2011, Home Depot and Mark Development jointly entered into
that certain Exclusive Right to Negotiate Agreement ("2011 ERN"), as co -developers (the "Co -1
Developers") with the City's former redevelopment Agency with respect to the Property; and
24 WHEREAS, although the two-year term of the 2011 ERN Agreement expired and the City's
25 former redevelopment agency was unable to amend it, all parties agreed to continue to negotiate in good
26 faith as though the agreement remained in full force; and
27 WHEREAS, over the past five years the Co -Developers obtained the Property's development
28 entitlements and obtained letters of interest from a variety of retail tenants; and
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WHEREAS, the Co -Developers also assisted the City in resolving certain of the Property'
outstanding issues resulting from the State's dissolution of the City's former redevelopment agency
I certain conditions created by the HUD Contract because of the City's use of HUD Section 108
funds to assist in financing the assemblage of the Property; and
WHEREAS, there have been recent unforeseen challenges that could impede the
of the Property that are primarily due to changing: i) market conditions; ii) customer shopping
preferences; and iii) corporate marketplace goals; and
WHEREAS, because of these changing conditions, Home Depot has determined that they will
I remain in their current locations and not develop a new store at the Property; and
WHEREAS, on March 20, 2017, Mark Development, Inc. (the "Developer") requested a new
Exclusive Right to Negotiate Agreement (the "New ERN") with respect to the Property for the purpose
of carrying -out a targeted marketing campaign to obtain a replacement anchor tenant and, thus, bring
forward an alternative project for the Property and confirm to prospective tenants that they have a
collaborative working relationship with the City; and
WHEREAS, the New ERN, a copy of which is included as Exhibit "A" to this Resolution,
I contemplates that the Developer and City will pursue a commercial development on the Property with
such uses as may be agreed upon by the Developer and City (the "Project"); and
WHEREAS, the Developer proposes acquiring the Property for fair market value
I developing the Project pursuant to a disposition and development agreement (the "DDA") which
include compliance with the HUD Contract, a copy of which has been provided to the Developer; and
WHEREAS, based upon information furnished by the Developer to the City together with
further investigations conducted by the City, the Developer is qualified to assist the City in undertaking
the economically sustainable commercial development on the Property, consistent with the HUD
Contract, which will include the planning for and development of a specific study, evaluation and
planning by the Developer and City of appropriate and feasible development alternatives; and
WHEREAS, this Resolution has been reviewed with respect to applicability of the
California Environmental Quality Act (the "CEQA"), the State CEQA Guidelines (California Code
FA
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of Regulations, Title 14, § 15000 et seq., hereafter the "CEQA Guidelines"), and the City's
environmental guidelines; and
WHEREAS, this Resolution does not constitute a "project" for purposes of CEQA, as that
term is defined by CEQA Guidelines § 15378, because this Resolution constitutes general policy
and procedure making and organizational or administrative activity that will not result in a direct
or indirect physical change in the environment, per § 15378 (b) (2) and (5) of the CEQA
Guidelines; and
WHEREAS, all of the prerequisites with respect to the approval of this Resolution have
been met.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and City Council of the City of
San Bernardino, as follows:
Section 1.
The foregoing Recitals are true and correct and are a substantive part of this
Resolution.
Section 2.
The Exclusive Right to Negotiate Agreement between the City and the
Developer, which is attached to this Resolution as Exhibit "A", is approved.
Section 3.
The City Manager, or designee, is authorized to administer the Exclusive
Right to Negotiate Agreement on behalf of the City and to take such actions
and execute such documents as are necessary to effectuate the intent of this
Resolution.
Section 4.
This Resolution is not a "project" for purposes of CEQA, as that term is
defined by CEQA Guidelines § 15378, because this Resolution constitutes
general policy and procedure making and is an organizational or
administrative activity that will not result in a direct or indirect physical
change in the environment, per § 15378 (b) (2) and (5) of the CEQA
Guidelines.
Section 5.
This Resolution shall take effect upon its adoption and execution in the
manner as required by the City's Municipal Code.
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281
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, APPROVING THE EXCLUSIVE RIGHT TO
NEGOTIATE AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND MARK
DEVELOPMENT, INC. WITH RESPECT TO AN APPROXIMATELY 17.43 -ACRE
VACANT PROPERTY LOCATED AT THE SOUTHWEST CORNER OF EAST
HIGHLAND AND ARDEN AVENUES, SAN BERNARDINO, AND APPROVING
CERTAIN RELATED ACTIONS
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
City Council of the City of San Bernardino at a joint regular meeting thereof, held on the 1St day of
May 2017, by the following vote, to wit:
Council Members: AYES NAYS ABSTAIN ABSENT
MARQUEZ X
BARRIOS X
VALDIVIA X
SHORETT X(M)
NICKEL X
RICHARD X
MULVIHILL X(S)
caC
Georgean -Ianna, CM ', -City Clerk
/&_
The foregoing Resolution is hereby approved this day of 2017.
e 04xe.� (aw�4
R. Carey Davis, ayor
City of San Be ardino
Approved as to form:
Gary D. Saenz, City Attorney
By.-
rl
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Exclusive Right to Negotiate Agreement
Between the
City of San Bernardino
and
Mark Development, Inc.
(See Attachment)
5
EXHIBIT "A"
CITY OF SAN BERNARDINO
EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT
(ARDEN GUTHRIE)
This EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT (ARDEN GUTHRIE) is dated
as of May 1, 2017 (this "Agreement"), and is entered into by and between the CITY OF
SAN BERNARDINO, a California charter city (the ty"), and MARK DEVELOPMENT, INC.,
a California corporation ("Developer").
6 oil .11:1 k4th"MWk R4111111110M t
Will I
!. W
TIA I
110.0 I-Sraw,
Non-Refundable
1. The Negotiation Period and the Term of Agreement; Prior
Deposit.
rightsa. The an
reement shall
commence on the date that the parties each execute this Agreement (the "Effective Date"). This
Agreement will continue in effect until November 30, 2017, at shall
automatically terminate unless earlier terminated, extended pursuant to Section 4.a.(5), or mutually
extended by the parties. The time period during which this Agreement shall be in effect (including
any extensions of time approved by the City) is referred to as the "Negotiation Period."
b. Home Depot, Developer and the Redevelopment Agency of the City of
San Bernardino
("Agency"),Agency,
into
two
(2)
agreements each
={ entitled
-:..•d Redevelopment
r • •!pi. Project
! ":,- : d and Exclusive
Right � � _!..Negotiate
..� ! t , `,..
is
Agreement, one dated as of November 20, 2006 and the other dated as of January 10, 2010 (the
"Agency ERNs"). Developer and the City confirm that the
Agency
similarlyterms and are no longer in force or effect. In addition, any other documents that may have been
executed by Home Depot, Developer and/or the Agency in connection with the Agency ERNs are
purchase and development of the Property shall be governed by the terms of this Agreement until
such time as the DDA is executed at which time this Agreement shall automatically terminate.
Agencyconnection with the Agency ERNs, a check in the amount of $58,000 was delivered to the Agency
("Agency ERN Payment"). Developer acknowledges that the
AgreementAgency ERN Payment is nonrefundable, and the ERN Payment has been retained by the Agency.
a. The Developer hereby acknowledges and agrees that no provision of thi
proposal from the Developer to convey any interest in the Property to the Developer. Any studie
relating
t F.g ! i. Property
!. . { hereafter
} r.{ r ",. i. undertaken
. i - { .. -. i- Developer,
i. i.!. i sole
! i. ! I
enteringshall be the sole responsibility of the Developer and shall not be deemed to be undertaken for th
benefit of the City.
b. The qualifications and identity of the Developer are of particular concern to
the City. The City has relied on these qualifications and identity in into this Agreement with
the Developer. - term of Agreement, no voluntary or ! successor -in -interest
of the Developer shall acquire any right or power under this Agreement. The Developer shall not
assign all or any part of this Agreement or any rights hereunder, without the prior written approval of
the City Manager, which approval may be granted withheld, or conditioned, in the sole and absolute
discretion of the City
Manager. Manager"
rightManager of the City or the City Manager's designee. Notwithstanding the foregoing, the Developer
shall have the
assign Agreement rights
controlled by or is under common control with the Developer or its principals, members or affiliates.
C. The si
er shall promptly notify the City in writing of any and allchanges whatsoever to the identity of the business entities and individuals in control of the
Developer, as well as any and all material changes in the interest or the degree of control of the
Weveloper by any such party, of which information the Developer or any of its partners or officers
have been notified or may otherwise have knowledge or information. Upon the occurrence of any
N
material change in interest or control, whether voluntary or involuntary, in membership, ownership,
management or control of the Developer (other than such changes occasioned by the death or
incapacity of any individual) unless approved in writing, in advance,, by the City Manager, the City
may terminate this Agreement by serving written notice of such termination on the Developer
referencing this Section.
3. Deposit. On or before the Effective Date the Developer shall deposit with the City
the all cash sum of Fifty Thousand Dollars ($50,000) ("Deposit") which amount shall be retained by
the City for use by the City to cover its actual and direct third party costs in connection with the
implementation of this Agreement ("City Costs") which Deposit shall be applicable to the purchase
under the DDA provided such applicability is approved by the Oversight Board and California
Department of Finance against the purchase price under the DDA. City shall provide Developer with
a monthly written report of the City Costs. In the event that a purchase and sale agreement is not
entered into by the parties pursuant to this Aareement, the City shall return to the Developer any
portion of the Deposit not used for City Costs. In the event that a purchase and sale agreement is
entered into by the parties pursuant to this Agreement, any portion of the Deposit not used for City
Costs shall be applied to the purchase price.
(2) On or before August 1, 2017, Developer shall submit to the City
"Preliminary Development Concept Package," consisting of the following: I
(a) A development proposal generally describing the anticipatef
retail, a list of prospective tenants; 5
(ii) If hospitality or mixed use, a list of prospective
tenants and potential hotels and brands.
Mx� M1
(b) Identification of the architect proposed to be used by the
(c) ProposedE�
(d) A statement describing the proposed method of financing,
including construction and permanent financing and identity of the person(s) or companies providing
debt financing or equity.
0
(e) a list of financial referencel
(f) a comprehensive construction and operating pro forma which
identifies all sources and uses of funds for the construction and operation of the Project;
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(3) On or before November 1, 2017, Developer shall submit to the City
"Final Development Concept Package," consisting of the following: I
(a) updated information, current as of the date of submittal of the
Final Development Concept Package, as to each and every item set forth under the heading
"Preliminary Development Concept Package" and addressing such other and addit-ional matters as
may arise during negotiations;
(i) if retait, specific tenants, including letters of interest;
(ii) if hospitality and mixed use, a list of specific tenants
and specific brands, including written commitments from each.
(b) proposed final identification of sources of financing, with a
description of the terms and conditions of such financing;
(4) The Developer shall bear all cost for its performance under this
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an environmental review will be prepared and circulated for comment by the City, in connection with
the consideration of the DDA. Further, nothing in this Agreement in any respect does or shall be
construed to affect or prejudge the City's discretion to consider, negotiate, or undertake the
acquisition and/or development of any portion of the Property, or shall affect the City's compliance
with the laws, rules, and regulations governing land uses, environmental review, or disposition of the
Property.
6. Environmental and Other Reguirements. Certain state and local environmental
requirements (including, but without limitation, the California Environmental Quality Act of 1970,
Public Resources Code Section 21000, et seq.) may be applicable to the Project. Pursuant to such
requirements, certain environmental documents may be required to be prepared and certified for the
Project. The City, by this Agreement, undertakes no obligation to pay any costs associated with such
environmental documents or to supply data and information both to determine the impact of the
development on the environment and to assist in the preparation of any necessary environmental
documents.
7. Costs and Expenses. Except as otherwise provided in this Agreement, each pa
shall be responsible for its own costs and expenses in connection with any activities and negotiation
undertaken in connection with the performance of its obations under this Agreement
lig. I
8. Non -Discrimination. Developer shall not discriminate against nor segregate,, any
person, or group of persons on account of sex, race, color, marital status, religion, creed, national
origin or ancestry in the sale, lease, sublease, transfer, use!, occupancy, tenure or enjoyment of the
Property, nor shall the Developer establish or permit any such practice or practices of discrimination
or segregation in the selection, location, number, use, or occupancy of tenants, lessees, subtenants,
sublessees or vendees of the land .
9. Address for Notices. Any notices pursuant to this Agreement shall be in writing and
sent (i) by Federal Express (or other established express delivery service which maintains delivery
records), (ii) by hand delivery, (iii) by certified or registered mail, postage prepaid, return receipt
requested, or (iv) by email, if at least one other method is used, to the following addresses:
To City: CITY
300 North "D" Street
San Bernardino, CA 92418
Attention: Andrea Miller, Assistant City Manager
cc: CITY ATTORNEY, CITY OF SAN BERNARDINO
300 North "D" Street
San Bernardino, CA 92418
Attention: Donn Dimichele
cc: STRADLING YOCCA CARLSON & RAUTH
660 Newport Center Drive, Suite 1600
Newport each, CA 92660
Attention: Thomas P. Clark, Jr.
R--
To Developer: MARK DEVELOPMENT
Attention: Mark Sandoval, President
P.O. Box 507
Redlands,, CA 92373
marksdev@yahoo.com
15. Developer Not an . The Developer is not an agent of the City,
2
LOU
pliiil og
20. Implementation of Agreement. The City shall maintain authority to implement this
Agreement through the City Manager. The City Manager shall have the authority to 'issue
interpretations, waive provisions, and/or enter into certain amendments of this Agreement on behalf
of the City so long as such actions do not materially or substantially change the uses or concept of the
Project, or add to the costs or risks incurred or to be incurred by the City as specified herein, and
such interpretations, waivers and/or amendments may include extensions of time to perform. All
other material and/or substantive interpretations. waivers, or amendments shall require the collective
consideration, action and written consent of the City Council of the City.
h
. NOW THEREFORE, the Parties have executed this Negotiation Agreement as of the date
.2-nd year first set forth above.
ATTEST:
Georgeann
,.Aa, City Viler
Ha
k""ITY OF SAN BERNARDINO, a California
Charter city
Mark Scott, City Manager
NOW THEREFORE, the Parties have executed this Negotiation Agreement as of the date
and year first set forth above.
APPROVED AS TO FORM:
Gary D. Saenz, City Attorney
f .,
By. cc���t
8
CITY:
CITY OF SAN BERNARDINO, a California
Charter city
LE
Mark Scott, City Manager
ATTEST:
Georgeann Hanna, City Clerk
MARK DEVELOPMENT, INC.,
a California corporation
M.
Mark Sandoval, President