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HomeMy WebLinkAboutAGENDA REPORT 2019 0403 REG CCSA ITEM 10CCITY OF MOORPARK, CALIFORNIA City Council Meeting of April 03, 2019 ACTION Approved Staff Recommendation. BY B.Garza C. Consider Renewal of Exclusive Negotiating Agreement with Daly Group, Inc. for High Street Property (APN 512-0-090-115). Staff Recommendation: Approve Exclusive Negotiating Agreement with Daly Group, Inc., subject to final language approval of the City Manager, and authorize City Manager to execute the agreement. (Staff: Jessica Sandifer) Item: 10.C. MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: Jessica Sandifer, Community Services Manager DATE: 04/03/2019 Regular Meeting SUBJECT: Consider Renewal of Exclusive Negotiating Agreement with Daly Group, Inc. for High Street Property (APN 512-0-090-115) BACKGROUND The Redevelopment Agency of the City of Moorpark acquired a 2.34 acre site, located at 192 High Street (“Property”), from the Ventura County Transportation Commission on August 8, 1993, at a cost of $393,451.34. This Property was part of a 4.77 acre purchase for $800,000. In 2011, Assembly Bill X1 26 , as upheld and modified by the Supreme Court in California Redevelopment Association, et al. v. Ana Matosantos, et al. (53 Cal.4th 231(2011)), dissolved the Redevelopment Agency as of February 1, 2012 and created the Successor Agency to the Redevelopment Agency of the City of Moorpark (“Successor Agency”). As part of the dissolution process, the Successor Agency prepared a Long Range Property Management Plan (“LRPMP”) addressing the disposition of real properties acquired by the former Redevelopment Agency. The LRPMP provides that the Property identified in the LRPMP as Property No. 5(a), consisting of a portion (approximately 2.14 acres) of APN 512-0-090-115 will be retained by the City of Moorpark (“City”), provided that the City pays compensation to the taxing entities. Pursuant to the LRPMP, as approved by the California State Department of Finance, the Property (approximately 95,396 sq. ft.) was conveyed to the City, upon the City’s payment of $470,000 in compensation to the taxing entities. In August 2017, the Daly Group, Inc. (Daly Group) approached the City with a proposal to develop the High Street property and requested that the City not consider any other development proposals or conduct negotiations with any other parties while they perform their research, conceptual site planning, and due-diligence for the project. On November 1, 2017, the City Council approved an Exclusive Negotiating Agreement (ENA) with Daly Group for a six-month term with a three-month extension upon the request of Daly Group and the City Manager’s approval. The term of the initial ENA expired on May 16, 2018 and staff returned to the City Council in June 2018 for approval of an additional ENA period. Item: 10.C. 24 Honorable City Council April 3, 2019 Regular Meeting Page 2 DISCUSSION The term of the additional ENA period with Daly Group expired on March 18, 2019. The Daly Group has made significant progress relevant to the project; however, Daly Group and staff need additional time to fine tune the entitlement submittals, as well as, negotiate the Disposition and Development Agreement deal points. Staff has not had the time to devote to the project due to other priorities. Staff has prepared a third ENA for the Daly Group with a six month term, and a three month extension upon approval of the City Manager. Language regarding the extension term has been modified to allow the City Manager to more easily approve an extension of the ENA and to reflect the actual status of the Developer’s deposit for the ENA. Notations have been made to the timeline to reflect those items that have been completed and those that are still to be completed during this ENA period. The items still to be completed include: SPECIFIC DEVELOPER TASKS • Developer shall prepare and submit an updated Conceptual Site plan based on comments received from the City. • Developer and City staff shall determine the likely type and schedule for obtaining entitlements necessary for construction of the Project including, but not limited to, discretionary permits. • Within ninety (90) days, Developer shall deliver to the City for City staff review and approval, a preliminary financing plan for the proposed Project. • Within ninety (90) days, Developer shall submit to the City a schedule of development setting forth the proposed timetable for the commencement, substantial completion and final completion of the Project (the “Development Schedule”). • By the end of the ENA term (and extended term, if applicable), Developer shall deliver to the City a fully completed and executed development application, including an Initial Study for CEQA. SPECIFIC CITY TASKS • By end of ENA Term, as extended herein, City and Developer shall finalize details related to the Disposition and Development Agreement (DDA) deal points and provide a draft DDA. Deal points to be determined are: a) Confirm land purchase price; b) Confirm land closing milestone; c) Confirm entitlement vesting timeframes; d) Confirm timeframe on sub-license for use of VCTC ROW; e) Confirm construction timeframes; f) Confirm infrastructure obligations/permits/fees; g) Confirm Quimby criteria. 25 Honorable City Council April 3, 2019 Regular Meeting Page 3 • During DDA negotiation phase, City agrees to call meetings of the Ad Hoc committee, as needed to review the proposed DDA terms. • City shall use good faith efforts to prepare and process any required CEQA Documents as soon as reasonably possible after submission by Developer of a complete development application, initial study, and payment of applicable fees/deposits. • y the end of the ENA term (as extended herein), the City shall have submitted the final DDA for City Council approval and provide a sub-license for use of VCTC property. FISCAL IMPACT There is no fiscal impact from signing the ENA. The ENA provides that all City costs associated with the ENA period would be reimbursed by Daly Group. STAFF RECOMMENDATION Approve Exclusive Negotiating Agreement with Daly Group, Inc., subject to final language approval of the City Manager, and City Attorney, and authorize City Manager to execute the agreement. Attachment – Exclusive Negotiating Agreement 26 EXCLUSIVE NEGOTIATING AGREEMENT This EXCLUSIVE NEGOTIATING AGREEMENT (“ENA”) is dated as of , 2019, and is entered into by and between the CITY OF MOORPARK, a municipal corporation (the “City”), and Daly Group, Inc., a corporation (the “Developer”). The City and Developer are sometimes individually referred to herein as a “Party” and are sometimes collectively referred to herein as the “Parties.” R E C I T A L S A. The City owns the land in the City of Moorpark, California that is described on Exhibit “A” (the “Property”). B. The City and the Developer desire that Developer construct and operate the project described on Exhibit “B” on the Property (the “Project”). C. Developer intends to incur significant costs analyzing the Property and designing the Project, and City intends to incur significant costs in negotiating and preparing a Disposition and Development Agreement (the “DDA”) for the Property and Project. Developer has therefore requested that the City agree to negotiate with Developer on an exclusive basis to establish the terms and conditions of the DDA. D. It is anticipated that during the term of this ENA, City staff and consultants and attorneys of the City will devote substantial time and effort in meeting with Developer and its representatives and consultants, reviewing proposals, plans and reports, negotiating and preparing the DDA, obtaining consultant advice and reports (possibly including an appraisal), and to the extent necessary, further complying with the California Environmental Quality Act (“CEQA”). NOW, THEREFORE, the Parties hereto agree as follows: 1. The term of this ENA shall commence on the date hereof and shall end on the earlier of: (i) the date that is six (6) months after the date of this ENA, as may be extended by the City Manager as set forth below in this Section 1, or (ii) the date on which the Developer and City, enter in to a DDA for the Project, or (iii) the date on which the City or Developer terminates this ENA as provided in Section 2 below (in either case, the “ENA Period”). Provided that neither Party has terminated this ENA pursuant to Section 2 below, the ENA Period may be extended by the City Manager, in writing, at the written request of Developer, for up to three (3) months; provided, however, that the Developer is not then in material default under this ENA (following notice to Developer and expiration of cure periods in accordance with Section 3 below). 2. The City may terminate this ENA if Developer should fail to comply with or perform any provisions of this ENA and such failure is not cured within ten (10) days after written notice from the City Manager to Developer, or if reasonable progress is not being made in negotiations hereunder as determined by the City Manager in good faith. Developer may terminate this ENA by written notice to City if the Developer determines, in its sole discretion, that it does not wish to pursue the Project further. -1- 12853-0001\2110421v1.doc 27 3. During the ENA Period (as extended under Section 1 above, if applicable), the City shall not negotiate with any person or entity other than the Developer for the sale, lease, or development of the Property. 4. The Project must include the features/elements described on Exhibit “B” attached hereto. Developer shall deliver the materials and information identified on Attachment No. 1 attached hereto to the City within the times set forth on Attachment No. 1. Within ten (10) days after each calendar month during the ENA Period (as extended under Section 1 above, if applicable), Developer shall provide a written report to the City describing in reasonable detail Developer’s activities with respect to the Project during such calendar month. 5. During the ENA Period, the City shall use good faith efforts to complete (or cause to be completed) the tasks set forth in Attachment No. 2 attached hereto. 6. Developer shall reimburse the City for its actual out-of-pocket costs and expenses (including legal fees and consultants costs) incurred in preparing this ENA and fulfilling its obligations under this ENA, including, but not limited to: (i) the costs of negotiating and preparing the DDA; and (ii) the costs of appraisals, economic consultants and the like used by City to evaluate the Project, proposed transaction terms, and/or DDA (collectively, the “Reimbursable Costs”). Developer has previously deposited with the City the sum of Five Thousand and No/100 Dollars ($5,000.00) (the “Reimbursement Funds”) for a prior ENA between the City and the Developer that expired on May 16, 2018. Subsequent to that ENA the Developer has also deposited thirty-four thousand five hundred and No/100 Dollars ($34,500) for processing entitlement application. There are still sufficient funds from these previously deposited funds and both Parties agree that these prior deposit funds will be used to satisfy the deposit requirement for this ENA. The Reimbursement Funds may be used and applied from time to time by the City to pay or reimburse itself for Reimbursable Costs not otherwise paid or reimbursed by Developer. Developer shall deposit with the City funds sufficient to replenish the Reimbursement Funds held by City within ten (10) days after written demand by the City Manager. The City shall provide Developer with a monthly accounting identifying in reasonable detail the Reimbursable Costs to which Reimbursement Funds have been applied. Any Reimbursement Funds not applied shall be delivered to the Developer (along with a final accounting of the City’s application of the Reimbursement Funds) within thirty (30) business days after the earlier of: (i) the execution of the DDA by the Parties, or (ii) the expiration or earlier termination of this ENA. The provisions of this Section shall survive the expiration or earlier termination of this ENA, to the extent that the City has incurred actual Reimbursable Costs for which there are insufficient Reimbursement Funds then on deposit with the City, and provided that the City shall not enter into any further agreements or incur any further costs for which Developer is responsible subsequent to termination or expiration of this ENA. Notwithstanding anything to the contrary in this ENA, express or implied, the City shall have the right in its sole and absolute discretion to cease evaluation of submittals relating to the Project, stop any other staff work and/or work of its consultants and stop negotiating or discussing the Project or DDA, in the event that the City Manager determines that the sums then on deposit with City are not clearly sufficient to pay for all of the projected/established Reimbursable Costs projected/estimated in good faith by the City Manager. -2- 12853-0001\2110421v1.doc 28 7. The City and Developer acknowledge that all applicable requirements of CEQA must be met in order for City to approve Project entitlements and enter into the DDA, and that this may require reports and/or analyses for CEQA purposes (collectively, the “CEQA Documents”). Developer will, at its cost, fully cooperate with the City in the City’s preparation of any CEQA Documents. 8. Developer shall bear all costs and expenses of any and all title, environmental, physical, engineering, financial, and feasibility investigations, reports and analyses and other analyses or activities performed by or for Developer. During the ENA Period, the City shall deliver to Developer complete copies of any and all material non- privileged reports and other material non-privileged documents pertaining to the Property which are in City’s possession, at no cost to Developer other than the actual cost (if any) of duplicating such documents. 9. The Developer and the City understand and agree that neither Party is under any obligation whatsoever to enter into a DDA, and that notwithstanding its approval of this ENA, the City shall have the right to disapprove any proposed DDA in its sole and absolute discretion, and in that regard, Developer hereby expressly agrees that the City shall not be bound by any implied covenant of good faith and fair dealing in connection with such approval or disapproval of any proposed DDA. In the event of the expiration or earlier termination of this ENA, the City shall be free to negotiate with any persons or entities with respect to the Property. No consents, approvals, comments or discussions by staff shall diminish, affect or waive: (i) rights of the City to later impose conditions and requirements under CEQA; (ii) the right of the City not to approve the DDA; or (iii) the City’s other governmental rights, powers and obligations. 10. Developer shall indemnify, defend, and hold the City and the City’s respective officers, directors, members, employees, agents, contractors and affiliated entities harmless from any and all claims, liabilities, damages, costs and expenses relating to or arising out of this ENA or Developer’s failure to perform any obligation of Developer under this ENA, or any challenges to this ENA. Developer’s obligations under the preceding sentence shall survive the expiration or earlier termination of this ENA. 11. Developer represents and warrants that its undertakings pursuant to this ENA are for the purpose of development of the Property and not for speculation in land, and Developer recognizes that, in view of the importance of the development of the Property to the general welfare of the community, the qualifications and identity of Developer and its principals are of particular concern to City; therefore, this ENA may not be assigned by Developer without the prior express written consent of the City Manager in his or her sole and absolute discretion. However, the City acknowledges that Developer may form a new entity to be the Developer entity that will be party to the potential DDA, provided that such new entity is controlled and partially but materially owned by Developer or owners of the Developer entity. 12. Any notice, request, approval or other communication to be provided by one Party to the other shall be in writing and provided by certified mail, return receipt requested, or a reputable overnight delivery service (such as Federal Express) and addressed as follows: -3- 12853-0001\2110421v1.doc 29 If to the Developer: Daly Group , Inc. 31255 Cedar Valley Drive, Suite 323 Westlake Village, California 91362 Attn: Vincent J. Daly, President If to the City: City of Moorpark 799 Moorpark Avenue Moorpark, California 93021 Attn: City Manager Notices shall be deemed delivered: (i) if sent by certified mail, then upon the date of delivery or attempted delivery shown on the return receipt; or (ii) if delivered by overnight delivery service, then one (1) business day after delivery to the service as shown by records of the service. 13. This ENA constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof. There are no agreements or understandings between the Parties and no representations by either Party to the other as an inducement to enter into this ENA, except as may be expressly set forth herein, and any and all prior discussions and negotiations between the Parties are superseded by this ENA. 14. This ENA may not be altered, amended or modified except by a writing duly authorized and executed by all Parties. 15. No provision of this ENA may be waived except by an express written waiver duly authorized and executed by the waiving Party. 16. If any Party should bring any legal action or proceeding relating to this ENA or to enforce any provision hereof, or if the Parties agree to arbitration or mediation relating to this ENA, the Party in whose favor a judgment or decision is rendered shall be entitled to recover reasonable attorneys’ fees and expenses from the other. The Parties agree that any legal action or proceeding or agreed-upon arbitration or mediation shall be filed in and shall occur in the County of Ventura. 17. The interpretation and enforcement of this ENA shall be governed by the laws of the State of California. 18. Time is of the essence of each and every provision hereof in which time is a factor. 19. This ENA may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same ENA. -4- 12853-0001\2110421v1.doc 30 20. Executed counterparts of this ENA may be delivered electronically by email to: jsandifer@moorparkca.gov (for the City), and vince@dalygroupinc.com (for the Developer). IN WITNESS WHEREOF, the Parties hereto have executed this ENA as of the day and year first written above. OWNER: CITY OF MOORPARK By: Troy Brown, City Manager DEVELOPER: DALY GROUP, INC. A CALIFORNIA CORPORATION By: Vincent J. Daly, President Attest: ___________________________________ Deborah Traffenstedt Assistant City Manager/City Clerk -5- 12853-0001\2110421v1.doc 31 EXHIBIT “A” DESCRIPTION OF PROPERTY A 2.14 acre portion of that certain real property situated in the County of Ventura, State of California, described as follows: Those portions of Lots 34, 35 and 36, Fremont Subdivision of Lot “L” of the Rancho Simi, in the City of Moorpark, County of Ventura, State of California, as per map recorded in Book 3, Page 39 of Maps, in the Office of the County Recorder of said County, being a portion of the land described in the deed dated February 28, 1900, from Madeline R. Poindexter, et al., to the Southern Pacific Railroad Company, recorded March 20, 1900 in Book 64, Page 169 of Deeds, as shown and described as Parcel A on Lot Line Adjustment No. 2006-10, recorded February 8, 2008, as Document No. 20080208-17993 of Official Records. Except all minerals and mineral rights, interests and royalties, including without limitation , all oil, gas and other hydrocarbon substances, as well as metallic or other solid minerals of whatever kind or character, whether now known or hereafter discovered, in and under the land below a depth of 500 feet under the surface without regard to the manner in which the same may be produced or extracted from the land, but without any right to enter upon or through the surface down to 500 feet below the surface to extract, drill, explore or otherwise exploit such minerals or mineral rights and without any right to remove or impair lateral or subjacent support, recorded September 27, 1991 as Document No. 91-143118 of Official Records. Assessor’s Parcel No: 512-0-090-115 APN MAP ATTACHED Exhibit “A” Page 1 of 1 12853-0001\2110421v1.doc 32 EXHIBIT "B" REQUIRED PROJECT FEATURES/ELEMENTS Conceptual plan for a mixed-use project that includes up to 14,000 square feet of commercial square footage for a 2.14 acre property and include up to 91 residential apartment units, as well as live/work rental spaces. The commercial space shall include one or more unique restaurant or entertainment options. Exhibit “B” Page 1 of 3 12853-0001\2110421v1.doc 33 ATTACHMENT NO. 1 SPECIFIC DEVELOPER TASKS All timelines stated below begin after execution of the ENA. All days are in calendar days. 1. Developer shall prepare and submit an updated Conceptual Site plan based on comments received from the City. 2. Developer and City staff shall determine the likely type and schedule for obtaining entitlements necessary for construction of the Project including, but not limited to, discretionary permits. 3. Within forty-five (45) days Developer will provide City staff the estimated costs for ground improvement on the site. [Completed during prior ENA period] 4. Within twenty-one (21) days, Developer will participate in a community meeting to hear comments, concerns, questions, and suggestions from residents and business owners in the City. [Completed during prior ENA period] 5. Within ninety (90) days, Developer shall deliver to the City for City staff review and approval, a preliminary financing plan for the proposed Project. 6. Within ninety (90) days, Developer shall submit to the City a schedule of development setting forth the proposed timetable for the commencement, substantial completion and final completion of the Project (the “Development Schedule”). 7. Within forty-five (45) days, Developer shall obtain and review a Phase I environmental (hazmat) report for the Property, and if recommended by the Phase I, Developer shall promptly obtain a Phase II report subject to entering into a reasonable right of entry agreement with City. Developer shall promptly deliver copies to the City when received. [Completed during prior ENA period] 8. Prior to start of Disposition and Development Agreement negotiations, Developer shall obtain and review a preliminary report for the Property from a title company selected by Developer and copies of the documents listed as title exceptions therein and an ALTA survey and shall deliver copies of the reports, documents and survey to the City together with a written description of any objections Developer may have to any of the title exceptions (and the rationale for the objections). [Completed during prior ENA period] 9. Within thirty (30) days , Developer shall deliver to City for City staff review and approval, an organizational chart of the proposed Developer entity proposed to be a party to the DDA. [Completed during prior ENA period] 10. By the end of the ENA term (and extended term, if applicable), Developer shall deliver to the City a fully completed and executed development application, including an Initial Study for CEQA. Exhibit “B” Page 2 of 3 12853-0001\2110421v1.doc 34 ATTACHMENT NO. 2 SPECIFIC CITY TASKS All timelines stated below begin after execution of the ENA. All days are in calendar days. 1) Within thirty (30) days, City shall complete Parcel Map process for the Property. [Completed. Waiting for Map to Record.] 2) City shall provide initial drafts of the DDA to Developer and shall thereafter revise them to the extent reasonably permitted by the negotiations. [Initial drafts provided, negotiations on- going] 3) By end of ENA Term, as extended herein, City and Developer shall finalize details related to the Disposition and Development Agreement (DDA) deal points and provide a draft DDA. Deal points to be determined are: a) Confirm land purchase price; b) Confirm land closing milestone; c) Confirm entitlement vesting timeframes; d) Confirm timeframe on sub-license for use of VCTC ROW; e) Confirm construction timeframes; f) Confirm infrastructure obligations/permits/fees; g) Confirm Quimby criteria. 4) During DDA negotiation phase, City agrees to call meetings of the Ad Hoc committee, as needed to review the proposed DDA terms. 5) City shall use good faith efforts to prepare and process any required CEQA Documents as soon as reasonably possible after submission by Developer of a complete development application, initial study, and payment of applicable fees/deposits. 6) By the end of the ENA term (as extended herein), the City shall have submitted the final DDA for City Council approval and provide a sub-license for use of VCTC property. Exhibit “B” Page 3 of 3 12853-0001\2110421v1.doc 35