HomeMy WebLinkAboutAGENDA REPORT 2018 0606 CCSA REG ITEM 09DCITY OF MOORPARK,
CALIFORNIA
City Council Meeting
of June 6, 2018
ACTION Approved staff
recommendation, as amended
BY M. Benson
Consider 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.
Item: 9.D.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Jessica Sandifer, Community Services Manager
DATE: May 24, 2018 (CC Meeting of 06/06/18)
SUBJECT: Consider 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 (“Agency”) 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, AB X1 26 (”Dissolution Act”), 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.
Item: 9.D.
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DISCUSSION
The term of the initial ENA with Daly Group expired on May 16, 2018. The Daly Group
has made some progress relevant to the project; however, the conceptual site planning
process took longer than anticipated due to the challenges associated with the site and
a change in priorities as the City conducted a recruitment for a new City Manager
necessitated by the retirement of the City Manager. The City Council selected a new
City Manager who began on March 3, 2018.
The ENA states the City Manager can only extend the agreement if no material
negotiation items for the Disposition and Development Agreement (DDA) remain
outstanding. Because the site planning took so long, and a lapse in continuity existed
due to the change in administration, the City Manager is unable to extend the ENA due
to the fact that no negotiation has yet taken place for the DDA under the ENA and could
not occur prior to the expiration of the ENA given the compressed time frame between
when the new City Manager began work with the City, and when the ENA would expire.
The City has had several meetings with the Daly Group regarding their project and the
ENA. The Daly Group has expressed their continued interest in the project and
undertaken a significant portion of the work necessary to show progress. In addition,
other site constraints also exist that need to be resolved. Ventura County
Transportation Commission owns twenty (20) feet of the southernmost portion of the
site. The City needs to work on putting a licensing agreement in place to allow the
development to infringe upon that area, which will be necessary to allow full
development of the site.
Staff has prepared a second ENA for the Daly Group with a six-month term, and a more
realistic timeline based on the Daly Groups current stage of due diligence and planning.
As a part of the ENA, the Daly Group plans on holding a community study session to
get input from the residents and High Street stakeholders on the project. It is anticipated
that this meeting will be held in late June or early July. Staff has also added the
negotiation period for the DDA as a milestone in the timeline for the new ENA. This
ensures that at the completion of the ENA time period, in addition to being ready to
submit a formal development application, the Developer will have a DDA that can be
submitted to the City Council for approval.
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 authorize City Manager to execute the agreement.
Attachments – Exclusive Negotiating Agreement
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EXCLUSIVE NEGOTIATING AGREEMENT
This EXCLUSIVE NEGOTIATING AGREEMENT (“ENA”) is dated as of , 2018,
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 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: (i) 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), (ii) there are no material issues remaining to be resolved with
respect to the DDA.
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.
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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 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. That previously deposited
Reimbursement Funds amount of $5,000.00 is still on deposit and both Parties agree that this
prior deposit will be used to satisfy the initial Reimbursement Funds 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.
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
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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:
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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.
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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:
Print Name: Vincent J. Daly
Title: President
Attest:
Maureen Benson, City Clerk
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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
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EXHIBIT "B"
REQUIRED PROJECT FEATURES/ELEMENTS
Conceptual plan for a mixed-use project that includes up to 6,500 square feet of commercial
square footage for a 2.14 acre property and include 40-80 residential apartment units, as well as
live/work rental spaces. The commercial space shall include one or more unique restaurant or
entertainment options.
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ATTACHMENT NO. 1
SPECIFIC DEVELOPER TASKS
All timelines stated below begin after execution of the ENA. All days are in calendar days.
1. Within fifteen (15) days Developer shall prepare and submit an updated Conceptual Site
plan based on comments received from the City.
2. Within fifteen (15) days , 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.
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.
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.
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).
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.
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.
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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.
2) Within thirty (30) days City to schedule meetings with VCTC/Metrolink to confirm use
of VCTC ROW for parking/patio space
3) City shall provide initial drafts of the DDA to Developer and shall thereafter revise them
to the extent reasonably permitted by the negotiations.
4) Within ninety-days (90), 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
5) Within fifteen (15) days of agreement on DDA terms, City will call a meeting of the sub-
committee to review the DDA terms.
6) 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.
7) 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.
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