CDC - Item 9L - Update on Status of Exclusive Negotiation Agreement for the Sale of the Glendon HotelROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
STAFF REPORT
TO: THE HONORABLE CHAIRMAN AND COMMISSION MEMBERS
FROM: JEFF ALLRED, EXECUTIVE DIRECTOR
DATE: SEPTEMBER 28, 2010
SUBJECT: UPDATE ON STATUS OF EXCLUSIVE NEGOTIATION AGREEMENT
(ENA) FOR THE SALE OF THE GLENDON HOTEL
SUMMARY
On May 25, 2010, the Rosemead Community Development Commission approved an
Exclusive Negotiating Agreement (ENA) with the Qiao Garden Group Real Estate
Company, Ltd. (Qiao Garden Group) for the development of a Purchase and Sale
Agreement of 8832 Glendon Way (Glendon Hotel). On July 27, 2010, the ENA was
extended to November 20, 2010.
Over the last few months, staff has diligently been working with the Qiao Garden Group
on the development of a Purchase and Sale Agreement for the Glendon Hotel. There
have been several requests made by both parties that need to be completed before a
Purchase and Sale Agreement can be finalized. It is projected that these tasks will take
longer to complete than the 90 calendar days provided for in the amended ENA.
Therefore, it is recommended that the Commission extent the ENA with the Qiao
Garden Group until April 13, 2011. Within ten (10) days of the ENA approval, Qiao
Garden Group will make a $100,000 deposit to the Commission.
Staff Recommendation
It is recommended that the Community Development Commission extend the Exclusive
Negotiating Agreement (ENA) with Qiao Garden Group Real Estate Company, Ltd. for
the development of a Purchase and Sale Agreement of the Glendon Hotel until April 13,
2011 (see Attachment A).
FISCAL ANALYSIS
The sale of the property would generate onetime revenues for the Commission. In
addition, future property tax increment revenues will accrue to the Commission and TOT
revenues will be realized by the City.
PUBLIC NOTICE PROCESS
This item has been noticed according to the California Health and Safety Code Section
33490.
APPROVED FOR CITY COUNCIL AGENDA:
ITEM NO. q -
Community Development Commission
September 14, 2010
Paae 2 of 2
Prepared by:
Q I
~
Michelle G. Ramirez
Community Development Manager
Submitted by:
Stan Wong
Community Development Director
Attachment A: Second Amendment to Exclusive Negotiation Agreement
SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT
This SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT
("Second Amendment") is made as of this 28th day of September 2010, by and between the
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF ROSEMEAD, a public
body, corporate and politic (the "Commission"), and QIAO GARDEN GROUP REAL ESTATE
COMPANY, LTD (the "Purchaser"), and amends that certain Exclusive Negotiation Agreement
("Agreement") entered into by and between the Commission and the Purchaser on May 25, 2010
and July 27, 2010.
RECITALS:
WHEREAS, the Parties continue to negotiate in good faith to permit the execution of a
Purchase and Sale Agreement for the Site located at 8832 Glendon Way, Rosemead California;
91770; and
WHEREAS, the Purchaser requires additional time to evaluate the terms of a potential
Purchase and Sale Agreement in light of the fact that City staff is preparing amendments for City
Council consideration which will affect Hotel uses within the City; and
WHEREAS, the Commission desires to provide additional time to Purchaser to determine
whether such changes are approved by the City Council to permit the Purchaser's to proceed
with its development plans: and
WHEREAS, in exchange for the extension of time by the Commission, the Purchaser
agrees to make a good faith Deposit in the amount of $100,000.00.
Section 1. Section 3.a. of the Agreement is hereby amended in its entirety to read as
follows:
"3. Negotiation Period.
a. Negotiation Period. The term of this Agreement shall extend through and include
April 12, 2011, subject to extension or termination as provided below (the "Negotiation
Period")."
Section 2. Section 21 of the Agreement is hereby added to read as follows:
"21. Deposit. No later than ten days following Commission approval of this Second
Amendment, and prior to execution of this Second Amendment by Commission, Purchaser shall
deposit with Commission the amount of $100,000.00 (the "Deposit").
a. Use of Deposit. The Commission shall deposit the check in a Commission
account during the term of the ENA. 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 Purchaser.
b. Disposition of Deposit If Parties Enter Into a Purchase and Sale Agreement
(PSA). If the parties enter into a PSA prior to the end of the Negotiation Period, then the
Commission shall apply the Deposit towards Purchaser's monetary obligations under the PSA.
ENA -Qiao Garden Group Real Estate Co. Ltd 1 09/282010
C. Disposition of Deposit If Parties Do Not Enter Into a PSA. If the Purchaser does
not execute a PSA at the end of the ENA period and the City Council has approved amendments
to the Rosemead General Plan and Municipal Code affecting Hotel development within the City,
then the Deposit will be forfeited to the Commission. If the parties do not enter into a PSA
because either the City Council does not approve the amendments or the Commission determines
not to enter a PSA for the Site then the Commission shall refund the entire Deposit to Purchaser
within seven (7) days of the expiration of the ENA term."
Section 3. Except as expressly amended herein, all other terms and provisions of the
Agreement are and remain in full force and effect.
In witness whereof the parties have had their duly authorized officers execute this First
Amendment this 28t1i day of September 2010.
PURCHASER:
QIAO GARDEN GROUP REAL ESTATE CO. LTD
By:
COMMISSION:
ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION,
a public body corporate and politic
By:
Gary Taylor, Chairman
APPROVED AS TO FORM
By:
Rachel H. Richman
Burke, Williams & Sorensen, LLP
Commission General Counsel
ATTEST:
By:
Gloria Molleda, Commission Secretary
Lian Yue Song, President and CEO
ENA - Qiao Garden Group Real Estate Co. Ltd 2 09282010