Loading...
HomeMy WebLinkAboutadditional documentsEntered Into Rec. at MCC Mtg. by: Y Agenda Item No: CITY OF SAN BERNARD*' EXCLUSIVE RIGHT TO NEGOTIATF>IENT (ARDEN GUTHRIE) City of San Semardino This EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT (ARDEN GUTHRIE) is dated as of , 2017 (this "Agreement"), and is entered into by and between the CITY OF SAN BERNARDINO, a California charter city (the "City"), and MARK DEVELOPMENT, INC., a California corporation ("Developer"). RECITALS A. The Successor Agency to the City of San Bernardino Redevelopment Agency ("Successor Agency") is the current owner of certain real property located within the area commonly referred to as the North Arden Guthrie Area of the City of San Bernardino and comprising approximately 17.43 acres, generally bounded by Highland Avenue, Arden Avenue, 20'h Street and Guthrie Avenue that is depicted on the "Map" attached hereto as Exhibit "A" and is legally described on Exhibit `B" attached hereto (the "Property"); and B. 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 Housing Development regarding the Property ("HUD Contract"); and C. The Property is generally vacant land with all building structures and infrastructure having been demolished; and D. The Developer and City contemplate a commercial development with such uses as may be agreed upon by the Developer and City (the "Project"); and E. The Developer proposes acquiring the property for fair market value and developing the Project pursuant to a disposition and development agreement ("DDA") which will include compliance with the HUD Contract, a copy of which has been provided to the Developer; F. In connection with the preparation of the DDA and prior to consideration of the approval of such DDA, the City will prepare and circulate, or cause the preparation and circulation of an initial study (the "Initial Study") in accordance with the California Environmental Quality Act of 1970, as amended ("CEQA"); and G. 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. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES SET FORTH HEREIN, THE DEVELOPER AND THE CITY HEREBY AGREE, AS FOLLOWS: 1, The Negotiation Period and the Term of Agreement; Prior Non -Refundable Deposit. a. The rights and duties of the parties established by this Agreement 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 which time this Agreement 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"), the predecessor in interest to the Successor Agency, previously entered into two (2) agreements each entitled Redevelopment Project Study and Exclusive Right to Negotiate 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 ERNS have expired by their terms 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 similarly deemed to be ofno further force or effect. The Developer and the City agree that the 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. In connection with the Agency ERNs, a check in the amount of $58,000 was delivered to the Agency ("Agency ERN Payment"). Developer acknowledges that the Agency ERNS are terminated, the Agency ERN Payment is nonrefundable, and the ERN Payment has been retained by the Agency. 2. Developer Acknowledgments. a. The Developer hereby acknowledges and agrees that no provision of this Agreement shall be deemed to be an offer by the City or an acceptance by the City of any offer or proposal from the Developer to convey any interest in the Property to the Developer. Any studies relating to the Property that may hereafter be undertaken by the Developer, in its sole discretion, shall be the sole responsibility of the Developer and shall not be deemed to be undertaken for the benefit of the 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 entering into this Agreement with the Developer. During the term of this Agreement, no voluntary or involuntary 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. Reference herein to the "City Manager" shall refer to the City Manager of the City or the City Manager's designee. Notwithstanding the foregoing, the Developer shall have the right to assign this Agreement and its rights hereunder to an entity, which controls, is controlled by or is under common control with the Developer or its principals, members or affiliates. C. The Developer shall promptly notify the City in writing of any and all changes 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 Developer 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 material change in interest or 2 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 Agreement, 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. 4. Exclusive A reement to Negotiate. a. Required Actions. (1) On or before June 1, 2017, the Developer shall submit a feasibility study identifying potential uses on the Property including, without limitation, retail and/or hospitality. (2) On or before August 1, 2017, Developer shall submit to the City a "Preliminary Development Concept Package," consisting of the following: (a) A development proposal generally describing the anticipated use: (i) if retail, a list of prospective tenants; (ii) if hospitality or mixed use, a list of prospective tenants and potential hotels and brands. (b) Identification of the architect proposed to be used by the Developer; (c) Proposed site plan; (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. (e) a list of financial references; (f) a comprehensive construction and operating pro forma which identifies all sources and uses of funds for the construction and operation of the Project; (g) a schedule of performance. (3) On or before November 1, 2017, Developer shall submit to the City a "Final Development Concept Package," consisting of the following: (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 additional matters as may arise during negotiations; (i) if retail, 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; (c) a schedule of performance. (4) The Developer shall bear all cost for its performance under this Agreement. (5) If the City approves the Final Development Concept Package, the Negotiation Period shall be extended for a period of ninety (90) days during which the parties shall negotiate a DDA and establish fair market value of the Property. (6) During the term of this Agreement, the City will negotiate exclusively with Developer, except as to potential users, concerning disposition, use, and development of the Property. If a DDA is signed, it shall supersede this Negotiation Agreement. (a) AgLeement to Negotiate. The City (by and through its staff and consultants) and Developer agree that for the term of the Negotiation Period (whether said period expires or is earlier terminated by the provisions herein) each party shall negotiate diligently and in good faith to carry out its obligations under this Agreement. The Developer acknowledges that the Successor Agency holds title to the Property. The Developer expressly agrees and acknowledges that its rights pursuant to this Agreement are subject to and based upon (i) City's ability to lawfully acquire the Property form the Successor Agency, and (ii) compliance by the Developer with this Agreement, including without limitation the making of all submittals required pursuant to this Agreement, in conformity with this Agreement. (b) Supplemental Progress Reports. In addition to the information required in Section 4 above, for so long as this Agreement remains in effect Developer agrees to make weekly oral progress reports and monthly written reports to the City Manager advising the City on all matters and all studies being made. 5. No Predetermination of City Discretion. The Parties agree and acknowledge that nothing in this Agreement in any respect does or shall be construed to affect or prejudge the exercise of the discretion of the City. The Developer acknowledges in this regard that the feasibility of the Developer's proposal has not been finally determined, and further that, at the discretion of the City, 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 4 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 Re uirements. 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 party shall be responsible for its own costs and expenses in connection with any activities and negotiations undertaken in connection with the performance of its obligations under this Agreement. 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 Bemardino, CA 92418 Attention: Donn Dimichele cc: STRADLING YOCCA CARLSON & RAUTH 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660 Attention: Thomas P. Clark, Jr. To Developer: MARK DEVELOPMENT Attention: Mark Sandoval, President P.O. Box 507 Redlands, CA 92373 marksdev@yahoo.com 10. Default. Failure by either party to perform one or more of its duties as provided in this Agreement shall constitute an event of default under this Agreement. The non -defaulting party shall give written notice of a default to the defaulting party, specifying the nature of the default and the action required to cure the default. 11. Remedies for Breach of Aereement. In the event of an uncured default under this Agreement, the sole remedy of the nondefaulting party shall be to terminate this Agreement. Following such termination, neither party shall have any further rights, remedies or obligations under this Agreement. Neither party shall have any liability to the other for monetary damages or specific performance for the breach of this Agreement, or failure to reach agreement on a DDA, and each party hereby waives and releases any such rights or claims it may otherwise have at law or at equity. Furthermore, the Developer knowingly agrees that it shall have no right to specific performance for conveyance of, nor to claim any right of title or interest in the Property or any portion thereof. 12. Termination. This Agreement shall: (i) unless extended by the parties, automatically terminate at the time(s) set forth in Section 1 above, and (ii) terminate prior to the time(s) set forth in Section 1(a) above in the event the Developer shall fail to perform its obligations hereunder to the reasonable satisfaction of the City Manager; provided that prior to termination, the City shall provide the Developer with notice of the failures and provide ten (10) days in which to cure, if such failures are curable. In addition, the parties agree that if Developer shall determine, in its sole discretion, that it is infeasible to proceed with the disposition and development as contemplated hereunder, then Developer may, upon ten (10) days' written notice to the other party, terminate this Agreement. Upon termination of this Agreement, whether upon expiration of the Negotiation Period or otherwise, both Parties knowingly agree that neither Party shall have any further rights or remedies as to the other and the Developer shall have no rights in respect to the Property. 13. Time of Essence. Time is of the essence of every portion of this Agreement in which time is a material part. During the Negotiation Period the time periods set forth in this Agreement for the performance obligations hereunder shall apply and commence upon a complete submittal of the applicable information or occurrence of an applicable event. In no event shall an incomplete submittal by the Developer trigger any of the City's obligations of review, approval and/or performance hereunder; provided, however that the City shall notify the Developer of an incomplete submittal as soon as is practicable and in no event later than the applicable time set forth for the City's action on the particular item in question. Further, the time periods set forth herein are outside dates of performance. 14, Real Estate Commissions. The City shall not be liable for any real estate commission or brokerage fees which may arise with respect to this Agreement or the Property. 15, Developer Not an Agent. The Developer is not an agent of the City. 16. Press Releases. The Developer agrees t9 discuss any press releases with the City Manager prior to disclosure in order to assure accuracy and consistency of the information. City agrees 6 to discuss any press releases with the Developer, or his designee, prior to disclosure in order to assure accuracy and consistency of the information 17. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties, integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. 1$. Agreement Does Not Constitute Development Approval. The City reserves final discretion and approval as to any DDA and all proceedings and decisions in connection therewith. This Agreement shall not be construed as a grant of development rights or land use entitlements to construct the Project or any other project. All design, architectural, and building plans for the Project shall be subject to the review and approval of the City. By its execution of this Agreement, the City is not committing itself to or agreeing to undertake the disposition of the Property or other real property to the Developer, or any other acts or activities requiring the subsequent independent exercise of discretion by the City and/or City, or any agency or department of the City. 19. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California. 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. 7 NOW THEREFORE, the Parties have executed this Negotiation Agreement as of the date and year first set forth above. ATTEST: Georgeann Hanna, City Clerk CITY: CITY OF SAN BERNARDINO, a California Charter city LE Mark Scott, City Manager MARK DEVELOPMENT, INC., a California corporation By: Mark Sandoval, President