Loading...
CDC - Item 4C - Update On Status Of Development Site At The Southwest Corner Of Rosemead Blvd And Glendon WayE M E 5 O Q oQ' ryCDRPORATED to°-9 I ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: OLIVER CHI, CITY MANAGER DATE: NOVEMBER 20, 2007 SUBJECT: UPDATE ON STATUS OF DEVELOPMENT SITE AT THE SOUTHWEST CORNER OF ROSEMEAD BOULEVARD AND GLENDON WAY SUMMARY On July 17, 2007, the Rosemead Community Development Commission ("CDC") approved the development of an Exclusive Negotiating Agreement (ENA) with Primestor Development, Inc. for the development of an 8.5-acre site located on the southwest corner of Rosemead Boulevard and Glendon Way. Staff has worked with the CDC's legal counsel and,the developer to draft an ENA which is acceptable to the City and developer. Highlights of the ENA include: • Initial negotiation period of 360 calendar days, subject to two (2) 180 calendar days extension periods based on Primestor's performance • Commission will complete the Owner Participation process as soon as staff receives a more detailed project description from Primestor • Primestor will be responsible for conducting all tests, investigations, surveys inquiries and due diligence, at no Commission expense, to determine if the site is suitable and appropriate for construction • The ENA includes a proposed Schedule of Performance that would be a trigger for deadlines during the negotiation period. Staff Recommendation Staff recommends that the Commission approve the Exclusive Negotiating Agreement between the Rosemead Community Development Commission and Primestor Development for the development of a proposed project on the southwest corner of Rosemead Boulevard and Glendon Way (Attachment 1). ANALYSIS An exclusive negotiating agreement allows two parties, in this case it would be the Commission and Primestor Development, to work together exclusively to explore the possibilities of a project in a set amount of time. The ENA proposed with Primestor Development has an initial 360 calendar day timeframe with two potential 180 calendar APPROVED FOR CITY COUNCIL AGENDA: V • 0 Community Development Commission November 20, 2007 Paae 2 of 2 day extensions. Granting a time extension will be at the discretion of the Commission and will be tied to a detailed schedule of performance. Developers often request ENAs because they, among other things, prohibit cities, agencies and/or commissions from entertaining other development proposals for a particular site as described in the agreement. In turn, cities also encourage ENAs as they require that developers secure conditional commitments from desired tenants and financial institutions, perform all due diligence for the site and assemble a development team. The ENA, as proposed by staff with Primestor Development, includes all of these elements. Once these tasks are completed by the developer, they will be presented to the Commission for your consideration. The ultimately goal of an ENA is to come to a formal agreement for the development of this site. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. LEGAL REVIEW This staff report and the attached ENA has been reviewed and approved by the Commission's Attorney. Prepared by: ~ Michelle G. Ramirez Economic Development Administrator City Manager Attachment A - Exclusive Negotiating Agreement • 0 EXCLUSIVE NEGOTIATION AGREEMENT This EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is made as of this day of November 2007, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF ROSEMEAD, a public body, corporate and politic (the "Commission"), and PRIMESTOR DEVELOPMENT, INC., a Nevada Corporation (the "Developer"), on the terms, and subject to the conditions, set forth below. The Commission and the Developer are sometimes referred to herein collectively as the "Parties," and either individually as a "Party." RECITALS A. The Commission desires to encourage and effectuate the redevelopment of those certain parcels bordered by the I-10 Freeway to the south, Glendon Way to the north, the west bound onramp to the 1-10 Freeway to the east and a vacant parcel at 8828 Glendon Way (APN 5390-018-018) to the west within the boundaries of Project Area No. 2 that are shown on Exhibit A attached hereto, and designated as the proposed development site ("Site"). B. This Site lies within Redevelopment Project Area No. 2 ('Project Area"), and is subject to the Project Area's governing redevelopment plans. The Site is composed of five parcels aggregating approximately 8.5 acres. C. Developer desires to determine the feasibility and terms by which it could acquire the Site and develop a commercial/retail project consisting of at least a nationally recognized tenant (`Project") and to negotiate with the Commission the potential terms of a Disposition and Development Agreement or Owner Participation Agreement (the "OPA/DDA"). D. Developer understands that the Commission has not yet undertaken the Owner Participation Process for the "Project" and that Developer shall provide within 30 days of the execution of this agreement a more defined Project for the site so the Commission may undertake its owner participation process as required by its Redevelopment Plan and California Redevelopment Law. E. The Parties desire to enter into this Agreement to exclusively negotiate mutually acceptable terms and conditions for developing and operating the Project upon the Site in the manner proposed by the Developer and specifically, to determine if mutually acceptable terms and conditions can be agreed upon for the OPA/DDA, which would specify the rights, obligations and method of participation of the Parties with respect to development. 249872.3 000570.0361 5/12/2005 - 3:39 PM C AGREEMENT 1. Exclusive Good Faith Negotiations. The Parties agree that, during the Negotiation Period (as defined in Section 3 below), and so long as the Developer timely meets its obligations under this Agreement, they shall negotiate exclusively and in good faith regarding the proposed development and operation of the Project upon the Site, and the terms of the OPA/DDA. 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. 2. Development Concept/Scone. The negotiations hereunder are based on a development concept that will include the components described in Recital C. above. The Developer shall supplement the scope of the development within 30 days of execution of this agreement to permit the Agency to undertake the owner participation process. 3. Negotiation Period. a. Initial Negotiation Period. The term of this Agreement shall be for a period of three hundred and sixty (360) calendar days from the date the Agreement is approved by the Commission, subject to extension or termination as provided below (the "Negotiation Period"). b. Extension of Negotiation Period. If, by the expiration of the Negotiation Period, Developer has not provided necessary and satisfactory progress toward the subject development, then the Agency or Developer may terminate this Agreement upon prior written notice delivered to the other. If Developer has made substantial progress toward development of the project, as reasonably determined by the Commission in its sole discretion, the Commission may extend this Agreement for another one hundred and eighty (180) calendar days ("First Extension Period"). At the end of the First Extension Period, the Commission may, at its sole discretion, extend this Agreement for an additional 180 days (Second Extension Period"). As explained, any decision to extend this Agreement is within the sole discretion of the Commission. The Executive Director shall notify Developer in writing of the decision to extend this Agreement, as explained above, on or before 10 days prior to the expiration of this Agreement or any Extension Period granted. C. ENA Schedule of Performance. The ENA Schedule of Performance, attached hereto as Exhibit B and incorporated into this agreement by reference, may be considered by the Commission as one means to determine whether the Developer is making necessary and satisfactory progress toward the development project. ND: 4824-2609-5362, v. 1 2 0 4. Negotiation of the OPA/DDA. During the Negotiation Period, the Commission and the Developer shall negotiate diligently and in good faith to prepare and enter into the OPA/DDA. Both of the parties shall exercise best efforts to complete discussions relating to the final terms and conditions of the OPA/DDA and such other matters, as may be mutually acceptable to the parties for the redevelopment of the Project on the Site, prior to the expiration of the Negotiation Period. It is contemplated that the OPA/DDA will include, at a minimum, the following particulars: a. Property. The Site will consist of approximately 8.5 acres bordered by the I-10 Freeway to the south, Glendon Way to the north, the west bound onramp to the 1-10 Freeway to the east and a vacant parcel at 8828 Glendon Way (APN 5390-018-018) to the west. b. Use. The Developer shall, at its sole cost and expense, promptly after it has acquired possession to the Property and received entitlement for the Project, demolish the existing buildings and construct a commercial/retail project consisting of at least a nationally recognized home improvement tenant. The development shall utilize a high quality of architectural design and materials. C. Schedule of Performance. The OPA/DDA shall include a Schedule of Performance which among other milestone dates, will require the completion of construction of the project no later than twenty four (24) months, from the date that all necessary project entitlements are granted by the City of Rosemead ("City"), subject to delays due to force majeure. The Schedule of Performance will also require that the Developer submit all its required entitlements to the City for approval within 6 months of the approval of the OPA/DDA. d. Property Acquisition by Commission. The OPA/DDA shall include provisions regarding the Commission's assistance with the acquisition of property which the Developer is not able to acquire by negotiated agreement as well as the Developer's responsibilities regarding timely notice to the Commission of properties with which it needs assistance. e. Relocation. The OPA/DDA shall include provisions regarding the Commission's assistance in the relocation of tenants from the Property. f. Approvals. The OPA/DDA shall provide that the Developer will obtain from the City any specific plan and/or zone changes that may be necessary for the Project while the Commission will work with the City to obtain any necessary General Plan changes. g. Financial Assistance. It is anticipated that the development may require Commission financial assistance, to be determined through an OPA/DDA. h. Indemnification. The OPA/DDA will include provisions for the defense and indemnification of the Commission and City by developer for claims arising out of any agreements it enters into with the Developer including any claims relating to the payment of prevailing wages for the Project. Developer will not be required to indemnify the Commission or City for the Commission's negligent or intentional acts or omissions. ND: 4824-2609-5362,v. 1 3 i. No Third Party Beneficiaries. The OPA/DDA is drafted for the sole benefit of the Parties and their successors in interest. No other person shall have any right of action based upon any provision of the OPA/DDA. j. Governing Law. The laws of the State of California shall govern interpretation and enforcement of the OPA/DDA. Any action, suit or proceeding related to, or arising from the OPA/DDA shall be filed in the appropriate court having jurisdiction in the County of Los Angeles. 5. Developer Deposit. No later than ten days following Commission approval of this Agreement, and prior to execution of this Agreement by Commission, Developer shall deposit with Commission the amount of $10,000.00 (the "Deposit"). a. Use of Deposit. The Commission shall be under no duty to place the Deposit in an interest bearing account. However, if the Deposit is placed in an interest bearing account, interest earned thereon shall be added to the Deposit for the account of the Developer. The Deposit shall be drawn upon by Commission to pay actual and reasonable out-of-pocket costs incurred by Commission, including consultant and legal fees during the Negotiation Period and other costs that are otherwise authorized by Developer in writing. b. Duty of Commission to Conserve Deposit Funds. In expending funds to be paid from the Deposit, the Commission shall act reasonably and prudently to conserve Deposit funds. C. Deposit Progress Reports. During the Negotiation Period, Commission shall provide Developer with periodic written progress reports containing itemizations of obligations incurred that are to be or have been paid from the Deposit, together with copies of invoices for expenditures that have been paid. d. Costs in Excess of Deposit. Before incurring any obligations to be charged against the Deposit that, in the aggregate, would exceed the amount of the Deposit, Developer shall promptly increase the Deposit with an amount sufficient to meet any such additional costs, and shall do so prior to Commission being obligated to authorize such work; provided, however, such additional obligations shall first be approved by Developer, which approval shall not be unreasonably withheld (provided further, however, in the event any such additional costs exceed Five Thousand Dollars ($5,000.00), Developer shall have the right to terminate this Agreement in lieu of approving such additional costs). e. Disposition of Deposit If Parties Enter Into an OPA/DDA. If the parties enter into an OPA/DDA prior to the end of the Negotiation Period, then the Commission shall apply the unspent and uncommitted balance of the Deposit towards Participant's monetary obligations under the OPA/DDA. f Disposition of Deposit If Parties Do Not Enter Into an OPA/DDA. If the parties do not enter into an OPA/DDA because the Commission and Developer determine not to go forward with acquisition and development of the Site then the Commission shall refund any unspent and uncommitted portion of the Deposit to Developer. ND: 4824-2609-5362, v. 1 4 0 • 6. Commission Responsibilities. a. The Commission agrees to undertake the Owner Participation process as soon as staff receives from Developer a more detailed Project description. b. The Commission agrees that it will work with the City of Rosemead and the Developer to analyze and amend, as necessary, existing zoning, including the preparation and processing of a CEQA Compliance Document for the Project, the OPA/DDA and the Project entitlements. C. The Commission agrees that the Developer may modify the description of the Project at any time; provided however, that substantial modifications of the Project shall: i. be subject to the acceptance and approval of the Commission which approval shall not be unreasonably withheld, conditioned or delayed; ii. depending on the nature of such a modification, a suitable modification of the CEQA Compliance Document or other elements of the Project Study as modified, may also be indicated. The Commission may request that the Developer consider modifications to the description of the Project from time-to-time. Each such modification shall be subject to the reasonable approval of the Developer. 7. Developer Tasks. During the Negotiation Period Developer shall undertake such tests, investigations, surveys inquiries and due diligence as Developer shall deem necessary or appropriate in order to determine if the Site is suitable and appropriate for the construction and operation of the development contemplated by this Agreement. Developer shall pay, at no expense to Commission, all costs of performing the Developer Tasks. 8. Right of Access. Commission shall use its best efforts to provide Developer access to the portion of the Site that is not owned by Developer for the purposes of conducting surveys, collecting soil samples and performing other studies necessary for determining the suitability of the Site for the development contemplated by this Agreement. Developer shall indemnify, defend and hold the Commission, its employees, officers, agents and representatives harmless against any claim for damages to person or property arising from any activity of Developer, its employees, officers, agents, representatives, contractors, subcontractors or consultants on the Site. Commission shall indemnify, defend and hold the Developer, its employees, officers, agents and representatives harmless against any claim for damages to person or property arising from any activity of Commission, its employees, officers, agents, representatives, contractors, subcontractors or consultants on the Site. 9. Access to Reports and Studies. a. Commission shall provide Developer with all documents and information in Commission's possession, if any, regarding the environmental and soils conditions of the Site and the availability and capacity of utility services to the Site. ND: 4824-2609-5362, v. 1 5 0 • b. Provided that disclosure will not compromise the exemption, if any, of the documents from public inspection under the California Public Records Act, Commission shall provide Developer access to all studies, reports and analyses secured in performance of the Commission Tasks. C. Provided that disclosure will not compromise the exemption, if any, of the documents from public inspection under the California Public Records Act, Developer shall provide Commission access to all studies, reports and analyses secured in performance of the Developer Tasks. d. Except as may be otherwise required by the California Public Records Act, the Commission agrees that during the Negotiation Period it will not disclose to third parties the names of tenants who have expressed interest in the Site to Developer, provided, however, that Commission shall not be liable to Developer for any damages arising from an inadvertent, negligent or willful breach of this confidentiality. 10. Change in Ownership or Control of Developer. Developer understands Commission is entering into this ENA based on the prior experience and qualifications of Developer. Therefore, Developer shall not assign, sell or otherwise transfer any or all of its rights under.this ENA to any party not owner, in the majority, or controlled by Arturo Sneider and Leandro Tyberg, without the prior written approval of Commission, at its sole discretion. 11. No Obligation by Commission to enter in DDA/OPA or other related Agreements. This Agreement does not constitute a disposition of property or exercise of control over property by the Commission or City. It is merely an agreement to enter into a period of exclusive negotiations according to the terms hereof, reserving final discretion by the Commission and City as to any OPA/DDA and all proceeding and decision in connection therewith. By its execution of this Agreement, Commission is not committing itself to or agreeing: (a) to enter into a OPA/DDA with Developer, (b) to acquire land from third parties, (c) to dispose of land to the Developer, (d) to effect any changes to City zoning ordinances or the City General Plan or (e) to undertake any other acts or activities requiring the subsequent independent exercise of discretion by the Commission, the City or any agency or department thereof. Developer understands and acknowledges that any OPA/DDA resulting from the negotiations hereunder shall become effective only after and only if such OPA/DDA has been considered and approved by the Commission Board and the City Council of the City at a public hearing called for such purpose. 12. Owner Participation Procedures. Notwithstanding this ENA, the proposed development of the Project Site remains subject to any applicable owner participation procedures. Developer understands and agrees that the Commission shall be required to undertake the owner participation process as required by California Redevelopment Law and the Commissions adopted rules. Developer understands that the Commission after completing the owner participation process may select another owner of a property within the Site to be the developer for the Site. 13. Commission Not Responsible for costs. Except as set forth herein or in the DDA, OPA, or other acquisition agreement, Commission shall not be liable for any costs associated with the planning and development of the Project Site under this ENA. ND: 4824-2609-5362, v. 1 6 • 0 14. DDA or OPA to Supersede this ENA. This ENA will be superseded by the DDA or OPA, if and when the proposed DDA or OPA is executed by Developer and approved by Commission and city in the manner required by law, and executed by Commission. 15. Limitation on Liability. Neither Party would have agreed to any part of this ENA if it were to be liable to the other Party for any amount of monetary damages. Accordingly, both Parties acknowledge and agree each Party's exclusive right and remedy upon any breach or default of the other party to negotiate in good faith, as set forth in this ENA, is to terminate this ENA or seek specific performance of this ENA, as applicable. The prevailing Party in any action brought pursuant to this subsection A shall also be entitled to an award of actually incurred and reasonable attorney's fees and costs 16. Indemnity. Developer agrees to and hereby does defend, hold harmless and indemnify Commission, City and each of their elected or appointed officials, officers, agents and employees (the "Indemnified Parties") from third-party claims for damages arising from developer's acts or omissions; provided, that the obligation to defend does not apply to actions arising, solely from the Indemnified Parties' acts or omissions; and provided, further, that the obligation to indemnify and hold harmless applies only to the extent damages are the result of Developer's, or Developer's agents or employees, negligent acts or omissions or willful misconduct. 17. Non-Discrimination. The Developer shall not discriminate against nor segregate any person, or group of persons on account of race, color, creed, religion, sex, marital status, handicap, national origin, sexual orientation, or ancestry in undertaking its obligations under this Agreement. 18. Environmental Requirements. Certain state and local environmental requirements (including, without limitations, the CEQA of 1970, Public Resources Code Section 21000 et seq.) may be applicable to the Site. Pursuant to such requirements, certain environmental documents may be required to be prepared for the Site. The Developer agrees to cooperate with the Commission in obtaining information to determine the environmental impact of the Site. 19. Notice. 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, or (iii) by certified or registered mail, postage prepaid, return receipt requested, to the following addresses: TO COMMISSION: Community Development Commission City of Rosemead 8838 E. Valley Boulevard Rosemead, CA 91770 Attn: Executive Director ND: 4824-2609-5362,v. 1 7 • 0 TO DEVELOPER: Primestor Development, Inc. Attn: Arturo Sneider 228 South Beverly Drive Beverly Hills, CA 90212 Email: Arturogprimestor.com Telephone: 310.652.1177 Facsimile: 310.652.3165 With a copy to : Law Offices of Robert P. Friedman Attn: Robert P. Friedman 827 Moraga Drive Bel Air, CA 90049 Email: rpfesq@ix.netcom.com Telephone: 310.471.3413 Facsimile: 310.471.8613 20. Entire Agreement; Time is of the Essence. This Agreement (including all exhibits attached hereto) 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 of their predecessors in interest with respect to all or any part of the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall constitute a single instrument. Time is of the essence in this Agreement. 21. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California. 22. Implementation of Agreement. The Commission shall maintain authority to implement this Agreement through the Commission's Executive Director (or his duly authorized representative). Specifically, the Executive Director sk}all have the authority to issue interpretations for the administration of the Agreement so long s such actions do not materially or substantially change the uses or development permitted on the Site, or add to the costs incurred or to be incurred by the Commission as specified herein. The granting of extension periods to perform or amendments to this Agreement shall only be permitted if approved by the Commission. No: 4824-2609-5362, v. 1 8 0 In witness whereof the parties have had their duly authorized officers execute this Agreement this day of November 2007. DEVELOPER: PRIMESTOR DEVELOPMENT, a Nevada Corporation By: Arturo Sneider, Vice President By: Name:_ Corporate COMMISSION: ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body corporate and politic By: John Tran, Chairman APPROVED AS TO FORM By: Burke, Williams & Sorensen, LLP Commission General Counsel ATTEST: By: , Commission Secretary ND: 4824-2609-5362, v. 1 9 C n EXHIBIT A [STUDY AREA MAP TO BE INSERTED] ND: 4824-2609-5362, v. 1 10 Exhibit A 1 150fl N CityGIS a, Copyright 02006 All Rights Reserved. The information contained herein is the proprietary property of the contributor supplied under license and may not be approved a)rept as licensed by Digital Map Products. 11 EXHIBIT "B" SCHEDULE OF PERFORMANCE Within thirty (30) days of execution of the ENA 1. Commission shall provide Developer with all documents and information in Commission's possession, if any, regarding the environmental and soils conditions of the Site and the availability and capacity of utility services to the Site Developer. 2. Developer shall provide to the Commission a more detailed description of the Project and a general project depiction of the different uses proposed. Immediately thereafter the Commission shall undertake the owner participation process by notifying property owners in the project site of the proposed project and advise that they have days to inform the Commission if they are interested in submitting a development proposal after which the Commission shall undertake the remaining requirements of its owner participation process. Within three (3) months of execution of the ENA 1. Developer to provide Commission Acquisition Strategy. Commission to provide written response no later than 30 days from Developer submittal. Within six (6) months of execution of the ENA 1. Developer to prepare preliminary proforma. Commission to provide written response no later than 30 days from Developer submittal. 2. Developer to prepare leasing' and marketing plan. Commission to provide written response no later than 30 days from Developer submittal. 3. Developer to prepare preliminary site plan. Commission to provide written response no later than 30 days from Developer submittal. 4. Developer to Identify Development Team. Commission to provide written response no later than 30 days from Developer submittal. Within nine (9) months of execution of the ENA 1. Submittal of financing plan by Developer. Commission to provide written response no later than 30 days from Developer submittal. Within twelve (12) months of execution of the ENA 1. Submittal of proposed schedule of performance for project. Commission to provide written response no later than 30 days from Developer submittal. 2. Developer to prepare preliminary elevations. Commission to provide written response no later than 30 days from Developer submittal. Within fifteen (15) months of execution of the ENA 1. Submittal of commitments and/or letters of interest from anchor commercial tenants by Developer to Commission. 2. Execution of DDA. ND: 4824-2609-5362,v. 1 12