CDC - Item 4B - Exclusive Negotiating Agreement (Pacific Enterprise)~F
ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
STAFF REPORT
TO: HONORABLE CHAIRMAN AND COMMISSION MEMBERS
FROM: OLIVER CHI, CITY MANAGER
DATE: OCTOBER 9, 2007
SUBJECT: EXCLUSIVE NEGOTIATING AGREEMENT -PACIFIC ENTERPRISE
SUMMARY
Mr. David Kuo, CEO of Pacific Enterprise, has recently submitted a request for an
Exclusive Negotiating Agreement ("ENA") with the Rosemead Community Development
Commission ("CDC") for a proposed high-end hotel at 8711 & 8729 Valley Boulevard
(Attachment 1). It is staffs opinion that there is a need for additional high end hotel .
rooms along Valley Boulevard in Rosemead based upon the high occupancy rates in
our hotels currently, as well as high rates in our neighboring communities.
Staff has worked with the CDC's legal counsel and the developer to draft an ENA which
is acceptable to the City and developer.
Staff Recommendation
Staff recommends that the Commission approve the Exclusive Negotiating Agreement
between the Rosemead Community Development Commission and Pacific Enterprise
for the development of a proposed project at 8711 & 8729 Valley Boulevard
(Attachment 2).
ANALYSIS
An exclusive negotiating agreement allows two parties, in this case it would be the
Commission and Pacific Enterprise, to work together exclusively to explore the
possibilities of a project in a set amount of time. Staff is proposing that Commission
consider a six (6) month time period.
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 Pacific Enterprises, includes all of these
elements. Once these tasks are completed by the developer, they will be presented to
APPROVED FOR CITY COUNCIL AGENDA: 0
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Community Development Commission
October 9, 2007
Paae 2 of 2
the Commission for your consideration. The ultimately goal of an ENA is to come to a
formal agreement for the development of the 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 City
Attorney.
Sub by:
B an Saeki
As ant City Manager
Attachment 1 - Request for an Exclusive Negotiating Agreement
Attachment 2 - Exclusive Negotiating Agreement
• •
Pacific Enterprise
1427 W. Valley Blvd., Alhambra, CA 91803
Tel: (626) 588-2889 Fax: (626) 300-0898
E-mail : pacificlionllcQ-'mail.com
To: City of Rosemead
Attn: Oliver Chi, City Manager
Date: September 6, 2007
Request for Exclusive Negotiating Agreement
Dear Mr. Chi:
Pacific Enterprise is a reputable development firm in the San Gabriel Valley. We
respectfully requesting an exclusive negotiating agreement in the matter of these
properties located in the City of Rosemead at 8711 Valley Blvd., Rosemead, CA 91770
and 8729 Valley Blvd., Rosemead, CA 91770.
We are interested in acquiring the property for the purposes of developing a five-star
hotel to improving this community. Your assistance in acquiring matter would be greatly
appreciated. Thank you.
Sincerely,
Id K o
CC: Brian Saeki, Assistant City Manager
EXCLUSIVE NEGOTIATION AGREEMENT
This EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is made as of this
_ day of 2007 by and between the COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF ROSEMEAD, a public body, corporate and politic (the
"Commission"), and PACIFIC ENTERPRISE (insert type of entity Corp, LLC, LLP?)
located at 1427 W. Valley Blvd, Alhambra, California 91803 (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 certain
real property, located at the addresses commonly referred to as 8711 and 8729 Valley Blvd,
Rosemead California (the "Site"), that is depicted on the "Study Area Map" attached hereto as
Exhibit "A."
B. This Site lies within Redevelopment Project Area No. 2 ("Project Area"), and is
subject to the Project Area's governing redevelopment plans.
C. The Developer proposes to determine the feasibility of developing the Site as a 5-
star hotel comprised of approximately 100,000 square feet with six (6) floors, approximately 200
rooms, fine dining restaurants and spa facilities, with at grade and subterranean parking spaces
(the "Project"), and to negotiate with the Commission the potential terns of a Disposition and
Development Agreement (the "DDA").
D. 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 tenns
and conditions can be agreed upon for the DDA, which would specify the rights, obligations and
method of participation of the Parties with respect to development.
AGREEMENT
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 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.
The Parties agree that the Developer may create an entity for the purpose of the Project as well as
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add ventures, including but not limited to property owner _ participants, so long as the
Commission is notified and approves of the entities and Pacific Enterprise and its principals
retain ultimate control of the management of the Project. Commission approval of additional
entities shall not be unreasonable withheld.
2. , Development Concept/Scope.
The negotiations hereunder are based on a development concept that will include the
components described in Recital C above.
3. NeQotiation Period
a. Initial Negotiation Period. The term of this Agreement shall be for a period of
one hundred eighty (180) calendar days from the date the Agreement is approved by the
Commission, subject to extension or tennination as provided below (the "Negotiation Period").
b. Extension of Negotiation Period. Il; 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, may extend this Agreement for
ninety (90) 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 90 days (Second Extension Period"), and for an
additional ninety (90) days. 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.
4. NeQotiation of the DDA.
During the Negotiation Period, the Connnission and the Developer shall negotiate
diligently and in good faith to prepare and enter into the DDA. Both of the parties shall exercise
best efforts to complete discussions relating to the final terns and conditions of the 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 DDA will include, at a minimum, the following particulars:
a. Property. The Site will consist of approximately 1.17 acres of land located at
8711 and 8729 Valley Blvd, Rosemead California (the Property).
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 5-star hotel comprised of approximately 100,000 square feet
with six (6) floors, approximately 200 rooms, fine dining restaurants and spa facilities, with at
ND: 4815-5138-0481, v. 1
•
grade and subterranean parking spaces. The development shall utilize a high quality of
architectural design and materials.
C. Schedule of Performance. The 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 3 months of the approval of the DDA.
d. Property Acquisition by Commission. The 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 DDA shall include provisions regarding the Commission's
assistance in the relocation of tenants from the Property.
f. Approvals. The 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. No Commission financial assistance is anticipated.
h. Indemnification. The 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.
i. Costs. The Developer and the Commission agree that each Party shall bear its
own costs with respect to preparation and review of the DDA.
j.. No Third Party Beneficiaries. The 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 DDA.
k. Governing Law. The laws of the State of California shall govern
interpretation and enforcement of the DDA. Any action, suit or proceeding related to, or arising
from the DDA shall be filed in the appropriate court having jurisdiction in the County of Los
Angeles.
5. Commission Responsibilities.
a. 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 Docwnent for the Project, the DDA and the Project
entitlements.
ND:4815-5138-048I, v. I
b. 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.
6. 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.
7. 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.
8. 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
TO DEVELOPER: PACIFIC ENTERPRISE
1427 W. Valley Blvd.
Alhambra, CA 91803
Attn: David Kuo, CEO
ND: 4815-5138-0481. v. I
9. 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.
10. Governing Law.
This Agreement shall be construed in accordance with the laws of the State of California.
11. Implementation of Agreement.
The Commission shall maintain authority to implement this Agreement through the
Commission Executive Director (or his duly authorized representative). The Executive Director
shall have the authority to issue interpretations, waive provisions, and/or enter into certain
amendments of this Agreement on behalf of the Commission so long as such actions do not
materially or substantially change the uses or development pennitted on the Site. or add to the
costs incurred or to be incurred by the Commission as specified herein, and such interpretations,
waivers and/or amendments may include extensions of time to perform.
The Parties hereto have executed this Agreement as of the date and year first appearing
above.
DEVELOPER
PACIFIC ENTERPRISE,
a California
Dated:
Dated:
Date:
By:
COMMISSION
COMMUNITY DEVELOPMENT COMMISSION,
a public body corporate and politic
By:
Commission Chairman
ND: 4815-5178-0481, v. I
ATTEST:
9
Commission Secretary
I*
ND: 4815-5138-0481, v. 1
s
EXHIBIT A'
[STUDY AREA MAP TO BE INSERTED]
ND: 4815-5138-0481, v. I
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