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Home My WebLink AboutR36-Economic Development Agency CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY ORIGINAL. FROM: Emil A.Marzullo SUBJECT: Amendment No. 1 to the Redevelopment Interim Executive Director Project Study and Exclusive Right to Negotiate Agreement(Verdemont Heights Towne Center) DATE: May 13,2008 ---------------------------- ------------------------------------------------------- S nopsis of Previous Com miss ion/Councit/Committee Action(s): On May 8,2008, Redevelopment Committee Members Estrada, Johnson and Baxter unanimously voted to recommend that the Community Development Commission consider this action for approval. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency")to execute Amendment No. 1 to the Redevelopment Project Study and Exclusive Right to Negotiate Agreement by and between the Agency and HopRock 2 Verdemont,LLC(Verdemont Heights Towne Center) -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Colin Strange Phone: (909)663-1044 Project Area(s): N/A Ward(s): 5t' Supporting Data Attached: R] Staff Report R1 Resolution(s) R1 Agreement(s)/Amendment(s) El Map(s) ❑Letter(s) FUNDING REQUIREMENTS: Amount: $ -0- Source: N/A Budget Authority: N/A SIGNATURE: Fiscal Review: Emil A.Mar nterim E cutive Director Barbara Lindseth,Administrative Services Director __ e 50 eto- 7 Commission/Council Notes: --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- P:\Agendas\Comm Dev Commission\CDC 2008\05-19-08 HopRock 2 Verdemont,LLC,ERN-Amendment No.I SR.doc COMMISSION MEETING AGENDA Meeting Date: 05/19/2008 Agenda Item Number: k3 — ECONOMIC DEVELOPMENT AGENCY STAFF REPORT AMENDMENT NO. 1 TO THE REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT (VERDEMONT HEIGHTS TOWNE CENTER) BACKGROUND: The City of San Bernardino ("City") is the owner of approximately 22 acres of public space in the Verdemont Area known as the "Blast" soccer fields and "Guhin Park" (the "City Property"). The City Property is improved and zoned for public recreational use and is bounded by Little League Drive to the north, the I-215 Freeway ("I-215") to the west, the County Flood Control Channel to the east and vacant land to the south (the "Developer Property"), which is owned by HopRock 2 Verdemont, LLC, a Delaware corporation (the "Developer"). The Developer Property is approximately 37 acres in size and zoned Commercial General 5 ("CG-5") (See attached Exhibit"A"). The Developer, who is well known to the City and the Redevelopment Agency of the City of San Bernardino (the "Agency") for producing quality developments (this is the same Developer who was a partner on the development of the HUB Project in the Hospitality Lane area), approached the Agency in September 2006 with the intent of undertaking another retail project on the Developer Property which could include a number of department stores, lifestyle stores, restaurants and a fitness center. Not only would this be of great benefit to the growing population in the Verdemont Area, but would also stem the flow of sales tax dollars to neighboring centers such as Victoria Gardens in Rancho Cucamonga and Citrus Plaza in Redlands. However, in order to undertake a development large enough to attract stores such as Borders Books and Bed, Bath & Beyond, the Developer needed a site in excess of the 37 acres currently under their control and therefore, sought to study both the 22 acres of the City Property directly adjacent to the Developer Property as well as the Developer Property (collectively the "Study Area"). This would result in a 59 acre site, which would be able to accommodate a Citrus Plaza type of development. Immediately to the north of the City Property, on Little League Drive and the I-215, is 100 acres of Agency owned property formerly known as the Bice property. The Agency would make 30 acres of this property available to the City to make up the 22 acres of public space that would be lost to this development. Accordingly, on November 20, 2006, the Community Development Commission of the City of San Bernardino (the "Commission") approved a Redevelopment Project Study and Exclusive Right to Negotiate Agreement (the "Agreement") with the Developer which was administratively extended on October 16, 2007, for another 6 months until May 30, 2008, as per the terms of the Agreement. ----------------------------------------------------------------------- ----------------------------------- --------- ---- PAASendas\Comm Dev Commission\CDC 2008\05-19-08 HopRock 2 Verdemont,LLC,ERN-Amendment No 1 SR.doc COMMISSION MEETING AGENDA Meeting Date: 05/19/2008 Agenda Item Number: Q� Economic Development Agency Staff Report HopRock 2 ERN—Amendment No. I Page 2 CURRENT ISSUE: Since that time, the Developer has made a concerted effort to attract an anchor tenant which is imperative to attracting the other tenants. In addition, the Developer has submitted detailed financial pro-formas, numerous site plans tailored specifically to the requirements of the potential anchors, and numerous full-color elevations and color boards. As this development is not in a project area, numerous meetings have been held with the City Manager and the City Councilman for the 5th Ward regarding the proposed development, as well as the Development Services Director and the City Engineer regarding the proposed traffic patterns and other technical issues. Although letters of intent were first received from Target Stores and then from Wal-Mart regarding interest in placing their individual versions of a super-store on the site, which would have securely anchored the center, for reasons related to the weakening economy and diminished housing projects in the area, both retailers have subsequently changed their minds resulting in a loss of interest from the ancillary retailers. The Developer has requested that the Agreement be extended for a further 1 year to May 20, 2009, with all other terms and conditions remaining the same in order for them to either find a new anchor tenant or to fully examine alternative uses that are acceptable to the governing body of the Agency. In addition, the Interim Executive Director may extend the Agreement for an additional 1-year term as provided in the Agreement. ENVIRONMENTAL IMPACT: The Study Agreement is categorized as a Statutory Exemption under the California Environmental Quality Act("CEQA")per Public Resource Code Sections 21102 and 21150. FISCAL IMPACT: None to the Agency. The Developer currently has the amount of$75,000 on deposit with the Agency by way of a non-refundable deposit to be credited against the purchase price of the City owned property. RECOMMENDATION: That the Community Development Commission adopt the attached Resolution. Emil A. Marzullo, Interim Executive Director --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- P:\Agendas\Comm Dev Commission\CDC 2008\05-19-08 HopRock 2 Verdemont,LLC,ERN-Amendment No.I SR.doc COMMISSION MEETING AGENDA Meeting Date: 055/19/2008 Agenda Item Number: rr .... v C C 0 � t,isr its, C s � I T i I m i 7 x a no uj O a Z uj or ~ Q a. r 1 RESOLUTION NO. COP 2 3 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND 4 AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 5 ("AGENCY") TO EXECUTE AMENDMENT NO. 1 TO THE 6 REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT BY AND BETWEEN THE AGENCY AND 7 HOPROCK 2 VERDEMONT, LLC (VERDEMONT HEIGHTS TOWNE CENTER) 8 9 WHEREAS, the Developer is the fee owner of thirty-seven and three tenths (37.3) acres (the 10 "Developer Property") as depicted on Exhibit "A" to Amendment No. 1 attached hereto; and 11 WHEREAS, the City of San Bernardino (the "City") is the fee owner of approximately 12 twenty-two (22) acres generally known as the "Blast" soccer fields and "Guhin Park" which consists 13 of improved land adjacent to the Developer Property and which is currently zoned for public 14 recreational use (the "City Property"); and 15 WHEREAS, the Agency desires to encourage and effectuate the redevelopment of certain 16 real property located within the area commonly referred to as the Verdemont Area; and 17 WHEREAS, on November 20, 2006, the Community Development Commission of the City 18 19 of San Bernardino (the "Commission") adopted Resolution No. CDC/2006-56, approving the 20 Agreement between the Agency and HopRock 2 Verdemont, LLC (the "Developer"), for the 21 purposes of effecting the redevelopment of the City Property and the Developer Property, and 22 WHEREAS, owing to the volatile nature of the real estate market in 2007, this process has 23 proved to be more lengthy and complicated than originally anticipated and the Agency is now -24 desirous of executing Amendment No. 1 to the Agreement which will extend the term of the 25 contract for one (1) year until May 20, 2009, in order to fully study all viable alternatives for the 26 Site. 27 28 P:\Agendas\Resolutions\Resolutions\2008\05-19-08 HopRock 2 ERN-Amendment No.I CDC Reso.doc 1 1 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 2 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 3 FOLLOWS: 4 Section 1. The Commission hereby approves Amendment No. 1 to the Agreement by 5 and between the Agency and the Developer in the form as attached hereto and as presented to the 6 Commission upon adoption of this Resolution, and the Commission hereby authorizes the Interim 7 Executive Director of the Agency to execute Amendment No. 1 on behalf of the Agency together 8 with such technical and conforming changes as may be recommended by the Interim Executive 9 Director of the Agency and approved by the Agency Counsel. 10 Section 2. This Resolution shall take effect from and after its date of adoption by this 11 Commission. 12 13 14 15 16 17 18 19 20 21 22 23 Ill 24 25 26 27 28 P;1 Agendas\Resolutions\Resolutions\2008\05-19-08 HopRock 2 ERN-Amendment No.1 CDC Reso doe 2 1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND 2 AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE 3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE AMENDMENT NO. 1 TO THE 4 REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT BY AND BETWEEN THE AGENCY AND 5 HOPROCK 2 VERDEMONT, LLC (VERDEMONT HEIGHTS TOWNE 6 CENTER) 7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 8 Development Commission of the City of San Bernardino at a meeting 9 thereof, held on the day of , 2008, by the following vote to wit: 10 Commission Members- Ayes Nays Abstain Absent 11 ESTRADA BAXTER 12 BRINKER 13 DERRY 14 KELLEY 15 JOHNSON 16 MC CAMMACK 17 18 19 Secretary 20 The foregoing Resolution is hereby approved this day of , 2008. 21 22 Patrick J. Morris, Chairperson 23 Community Development Commission of the City of San Bernardino 24 25 Approved as to Form: 26 By: 27 Agency -0--urqel 28 P:1Agendas\Resolutions`Resoiutions`.2008\05-19-08 HopRock 2 ERN-Amendment No.I CDC Reso.doc 3 HOPROCK 2 VERDEMONT, LLC AMENDMENT NO. 1 TO THE REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT (VERDEMONT HEIGHTS TOWNE CENTER) This Amendment No. 1 (this "Amendment") to the Redevelopment Project Study and Exclusive Right to Negotiate Agreement dated November 20, 2006 (the "Agreement"), is entered into as of May 19, 2008, by and between the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, and HopRock 2 Verdemont LLC, a Delaware limited liability company (the "Developer"). RECITALS WHEREAS, the Developer is the fee owner of thirty-seven and three tenths (37.3) acres (the "Developer Property") as depicted on Exhibit "A" attached hereto and incorporated herein by reference; and WHEREAS, the City of San Bernardino (the "City") is the fee owner of approximately twenty- two (22) acres generally known as the "Blast" soccer fields and "Guhin Park" which consists of improved land adjacent to the Developer Property and which is currently zoned for public recreational use, (the "City Property'); and WHEREAS, the Agency desires to encourage and effectuate the redevelopment of certain real f property located within the area commonly referred to as the Verdemont Area; and WHEREAS, on November 20, 2006, the Community Development Commission of the City of San Bernardino (the "Commission") adopted Resolution No. CDC/2006-56, approving the Agreement between the Agency and the Developer for the purposes of effecting the redevelopment of the City Property and the Developer Property; and WHEREAS, the term of the Agreement was extended by the parties to May 30, 2008,pursuant to written authorization as contained in the Agreement; and WHEREAS, owing to the volatile nature of the real estate market in 2007, this process has proved to be more lengthy and complicated than originally anticipated and the Agency is now desirous of executing this Amendment to the Agreement which will extend the term of the contract for one (1) year until May 20, 2009, in order to fully study all viable alternatives for the Site. NOW, THEREFORE, THE DEVELOPER AND THE AGENCY DOES HEREBY AGREE AS FOLLOWS: Section 1. The Developer and the Agency hereby acknowledge and agree that the following shall be added to the end of Section l.d.(2) after the semi-colon: notwithstanding the above, the parties recognize and agree that the expiration date of this Agreement was properly extended to May 20, 2008, in the manner as provided above by a written authorization duly executed by the Executive Director of the Agency, and pursuant to Amendment No. 1 to this Agreement, the term of this Agreement is further extended by the official action of the 1 P lAgendas\Agenda Attachments Agrmts-Amend 2008\05-19-08 HopRock 2 Verdemont,LLC,ERN-Amendment No Ldoc Agency through and including May 20, 2009 and the Executive Director shall be authorized to extend the term hereof for an additional one-year period of time without any further action of the Agency at the sole discretion of the Executive Director; for all purposes of this Agreement as amended by Amendment No. 1, the term "Effective Date" as used in this Agreement shall be modified to be May 20, 2008; Section 2. Except as modified or amended by this Amendment, all of the provisions of the Agreement shall remain in full force and effect following the Effective Date of this Amendment. IN WITNESS WHEREOF, the Developer and the Redevelopment Agency of the City of San Bernardino executed this Amendment as of the dates written next to the signatures of their duly authorized representatives, below. AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Date: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: Agency u el DEVELOPER HopRock 2 Verdemont, LLC., a Delaware limited liability company Date: By: Date: Its: 2 P.\Agendas\Agenda Attachments\Agrmts-Amend 2008\05-19.08 HopRock 2 Verdemont,LLC,ERN-Amendment No l.doc 1 1, t- •� ! jo,; et .Y.T.. a �� '�� .. "7 ,i v I .F� A •� .',•� ` �'�;/' v i � �� q+.e j� -?/xd•3 j.� � -.� / �I:.. f'e,•.�i '• _ ,fr f ' I CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: May 23, 2008 TO: Wasana Chantha, Executive Secretary Economic Development Agency FROM: Margaret Fedor, Executive Assistant to the Director City Clerk's Office RE: Transmitting Documents for Signature—Resolution No. CDC/2008-17 At the Mayor and Common Council meeting of May 19, 2008, the City of San Bernardino adopted Resolution No. CDC/2008-17—Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency') to execute Amendment No. I to the Redevelopment Project Study and Exclusive Right to Negotiate Agreement by and between the Agency and HopRock 2 Verdemont, LLC(Verdemont Heights Towne Center) Attached are one (1) original agreement and two (2) duplicate agreements to be executed. Please obtain signatures in the appropriate locations and return the original agreement to Margaret Fedor in the City Clerk's Office, as soon as possible. Please retain one duplicate agreement for your records and forward the other agreement to the other party. If you have any questions, please do not hesitate to contact me at ext. 3206. Thank you. I hereby acknowledge receipt of the above mentioned documents. Signed: �OO p� PLEASE SIGN AND RETURN Date: � - O