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HomeMy WebLinkAbout2002 CON CDC Investment Dev. Services - ERN Cleveland Ave.EXCI..USIVE RIGHT -TO -NEGOTIATE AGREEMENT THIS EXCLUSIVE RIGHT -TO -NEGOTIATE AGREEMENT (the "ERN") is entered into this 7th day of May, 2002 by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY (the "CDC") and INVESTMENT DEVELOPMENT SERVICES INC. (the "Developer"). RECITALS A. The CDC has designated an area within the City of National City ("City") for redevelopment and intends to assist Developer in developing a certain portion of said redevelopment site, which site is shown on the site map attached hereto as Exhibit "A" and incorporated herein ("Project Site"). B. The Developer has indicated a desire to develop the Project Site as a multi -tenant medium/heavy manufacturing business park in the City of National City, County of San Diego, State of California (the "Project"). C. The CDC has indicated a desire to assist the Developer in the feasibility and planning of the Project. The Developer agrees to reimburse the CDC, out of the funds on deposit, for its expenses associated with the preparation of an MAI appraisal, a Phase I environmental site investigation and any other costs specific to the site (i.e. traffic studies, soils reports...). If a Phase II investigation is warranted the parties agree to meet and confer on the extent of said investigation, and prior to initiating a Phase II investigation of thc property the parties shall mutually agree in writing to the "scope of work" and that funding for said investigation will come out of the good faith deposit. D. The CDC has determined to enter into exclusive negotiations with Developer as the potential developer with the sales price of the land to be negotiated with specific terms and conditions of the development to be mutually negotiated and approved by both parties, pursuant to a disposition and development agreement ("DDA"). The final purchase price charged to Developer shall not exceed the cost to the agency for land acquisition costs, clearance costs, relocation costs and goodwill costs. E. The CDC will sponsor the Developer in applying for the issuance of industrial development bonds (IDB) for the Project. The estimated investment is anticipated to be in excess of ten million dollars ($10,000,000) making the Project potentially feasible for an IDB. F. CDC and Developer agree that the proposed DDA will not be entered into without identification of potential sales tax generation and employment figures as verified by a qualified independent source. Page 1 of 8 ORIGINAL ARTICLE 1 - NEGOTIATION 1.1 Good Faith Negptiatinns The CDC and the Developer each agree, for the period set forth below, to negotiate diligently and in good faith to prepare a Disposition and Development Agreement ("DDA") to be entered into between the CDC and the Developer concerning the Project Site ("Site") which is shown on the Site Map. For thc period herein provided, the CDC agrees to negotiate exclusively with thc Developer, and not with another person or entity, with regard to disposition and development of the Site. As used herein, thc term "Effective Date" shall refer to the date this Agreement is executed and returned to the Developer by the CDC. 1.2 Good Faith Deposit Developer shall provide a non-refundable fifty thousand dollar ($50,000) cashiers check made payable to the Community Development Commission of the City of National City, as a good faith deposit ("Deposit") which the CDC will deposit into the interest earning Local Agency Investment Fund (LAIF) upon signing of this Agreement. In the event of default of any of the items identified under sections 2.1 and 2.1.1 (a)(b)(c)(d) and 2.1.2 (a)(b)(c) by Developer the CDC will retain one hundred percent (100%) of the remaining good faith deposit as its exclusive remedy. As CDC makes expenditures on the project and can provide paid invoice receipts of such expenditures, the CDC shall be reimbursed for the amount of such expenditures from the amount remaining on deposit, up to hut not exceeding the original $50,000 dollar deposit. To be reimbursed expenses must be jointly approved in writing by both parties. Any money remaining on deposit, less the referenced expenses, will be credited towards thc purchase price. Should CDC default then Developer will only be entitled to return of remaining funds on deposit, including interest. Notwithstanding the foregoing, the Parties agree that in the event of early termination of the ERN, provided neither Party is in default, Developer shall be entitled to the return of its remaining Deposit in exchange for granting all its rights, title and interest to "site specific" studies and reports to thc CDC. The CDC and the Developer hereby agree to enter into any escrow or similar agreement(s) necessary to effectuate the purposes of this section 1.2. 1.3 Term The CDC agrees to negotiate with the Developer for a maximum period of one hundred and eighty (180) days (the "Term") commencing on May 7th, 2002. Ilowever both parties agree to use their best efforts to reduce the term of this agreement as is reasonably practical If at thc conclusion of the Term, the Developer has not signed and submitted a DDA to the CDC together with such other documents and reports as may be reasonably required by the CDC, then this Agreement shall automatically temunate, the balance of the remaining Deposit shall be returned to Developer, and the Parties will have no further obligation to one another. Page 2 of 8 ARTICLE 2 - PROPOSED DEVELOPMENT 2.1 Scope and Schedule of Development Developer, at its cost, shall prepare and submit to the CDC Executive Director, or Designee, the information and data required below within the periods specified below. If the Developer is unable to provide the information by the required date, it will forward a letter to the CDC stating why it is unable to provide such information and when it will provide it; whereupon, the CDC Executive Director, or his Designee, may modify the time periods for delivery set forth below by written authorization delivered to the Developer. 2.1.1 Within the First 90 Days of Tern a. Concept Site Plan The Developer, at its expense, shall provide an architectural concept site plan (the "Site Plan") for development of the Site, including estimated development cost. The Developer shall have the right to review with the CDC members and staff the status of the Site Plan, architectural concept, development cost in order to ascertain the CDC's position. CDC shall make its staff reasonably available to Developer during the term of the ERN so that Developer can obtain preliminary and, if applicable, final approval of the Site Plan. The CDC members and staff shall cooperate with the Developer in review and approval of the Site Plan. b. Written Development Schedule The Developer shall provide a preliminary written development schedule through construction of all structures and improvements. c. Land Surveys The Developer shall provide a copy of any and all land surveys of the Project Site to the CDC as such shall become available. d. Early Termination In the event Developer determines that the Project is not feasible, before any acquisition negotiations have commenced, due to schedule, economic or use restrictions or any other reasonable objection and upon ten (10) days written notice from Developer and approved in writing by the CDC, this ERN shall automatically terminate and the remaining Deposit, as outlined in section 1.2 shall be returned. Once an offer to purchase the Site has been made by the CDC section 2.1.1 (d) of this agreement shall no longer apply and the Developer shall not be allowed to terminate this agreement without written consent of the CDC. CDC shall not make an offer to purchase the Project Site without first providing Developer with at least Page 3 of 8 ten (10) days prior written notice. 2.1.2 Within the last 90 Days of the Term a. Refiners Development Plan As a prerequisite to the DDA, the Developer shall submit a refined Development Plan which will consist of preliminary concept drawings and schematics clearly showing building footprints, elevations, design theme, parking, vehicular and pedestrian access -ways and exits, and other factors fully descriptive of the proposed development, all to scale. The CDC agrees that it will cooperate with the Developer in promptly reviewing such refined Development Plan. b. Proposed Lenders The Developer shall demonstrate financial feasibility by advising the CDC in writing of its proposed lenders (e.g., equity, construction, take-out) as well as any partners as such shall become known. c. Environmental Information Forms The Developer shall complete the Environmental Information forms as provided by the Planning Department of the City and submit same, for approval, to the Planning and Engineering Dcpartments. 2.2. Cooperation The CDC acknowledges that the Developer will incur substantial costs and expenses under this ERN in connection with its proposed development of the Site. The CDC agrees that it will reasonably cooperate with the Developer by (a) processing and reviewing applications, reports, and approvals required by the Developer in a diligent and expeditious manner, (b) making staff personnel reasonably available to the Developer for review of plans and reports, including the Site Plan and Updated Site Plan, (c) providing documents, studies, reports, resolutions and ordinances and other information reasonably requested by the Developer, (d) acting as an intermediary with the City in expediting the Developer's Project for Squires -Belt Material Company, as contemplated by this ERN including any necessary approvals, permits, or authorizations required of the Developer in connection with its development of the Project, and (e) using due diligence to comply with the ERN/DDA Development Schedule. 2.3 Propless Reports The Developer agrees to provide written reports advising the CDC on progress and/or problems with the proposed development every thirty (30) days during the Term of the Agreement. Page 4 of 8 ARTICLE 3 - LAND USE ZONING and PLANNING REQUIREMENTS 3.1 Land Use Element and Zoning Ordinance Amendments The CDC staff shall cooperate with Developer before the Planning Commission and City Council in any applications for land use permits and in any Land Use Element and/or Zoning Ordinance amendments which may be required. The Developer shall, however, be the applicant for all such permits and/or amendments and shall file all necessary papers and pay all fees in order to process any such proposed permits or amendments. Such cooperation by the CDC staff shall not in any way pre -commit the CDC, Planning Commission, or City Council to any decision or course of action relative to the proposed development. 3.1.1 Surrounding Area The Developer acknowledges that the existing businesses and other potentially effected parties in the surrounding area need to be considered in the development of the Project. The Developer will take into consideration issues such as design, ingress, egress, and public parking and will reasonably cooperate with the CDC and adjacent property owners. ARTICLE 4 - THE DEVELOPER 4.1 Offices of the Developer and CDC The principal offices of the Developer and CDC are located at: Developer: Mark Hoekstra, Principal INVESTMENT DEVELOPMENT SERVICES INC. 350 W. Ash Street Suite 101 San Diego, CA 92101 With a copy to: John B. Nauman, Esq. LAW OFFICES OF JOHN B. NAUMAN Regents Park Financial Centre 4180 La Jolla Village Drive, Suite 540 La Jolla, CA 92037 CDC: Executive Director Community Development Commission OF THE CITY OF NATIONAL CITY 140 E. 12th Street, Suite B National City, CA 91950-3312 Page 5 of 8 All communications shall be forwarded to the Developer and CDC by first-class U.S. mail, postage prepaid, at the respective above addresses or such other addresses as may be directed by either party or by overnight courier or facsimile machine. ARTICLE 5 - PUBLIC MEETING If the negotiations hereunder culminate in a DDA, such DDA becomes effective only if and when such DDA has been considered and approved by the CDC and is executed by the CDC. The DDA shall be considered at a public meeting in accordance with State Law. Nothing herein shall require either the CDC or City Council to approve the ERN or DDA. The Developer will cooperate with the CDC and Council in the preparations for the conduct of public meetings or hearings on the Final Development Plan and DDA. ARTICLE 6 - REAL ESTATE COMMISSION The CDC shall not be liable for any real estate commissions or brokerage fees which may arise. The CDC represents that it has engaged no broker, agent, or finder in connection with this transaction; and, the Developer agrees to hold the CDC harmless from any claim by any broker, agent, or finder retained by the Developer. The CDC in the future will not utilize such services without the Developer's prior consent. ARTICLE 7 - GENERAL PROVISIONS 7.1 Attorney's Fees In the event any action (including arbitration) shall be instituted between Developer and CDC in connection with this ERN, the prevailing party in such action shall be entitled to recover from the other party all of its costs of action, including reasonable attorneys' fees as fixed by the court therein. 7.2 Governing Law This ERN and the documents in the form attached as exhibits hereto shall be governed by and construed under the laws of the State of California. 7.3 Eminent Domain Should any property acquisitions result from this ERN or the DDA, the CDC and the Developer acknowledge and agree that the CDC is not obligated to exercise its eminent domain power except as it deems consistent with the requirements of the law, and that it shall retain its full and unfettered discretion to reject the use of eminent domain. Page 6 of 8 7.4 Severahility In the event that any phrase, clause, sentence, paragraph, section, article, or other portion of this Agreement shall become illegal, null, or void or against public policy for any reason, or shall be held by any court of competent jurisdiction to be illegal, null, or void or against public policy, the remaining portions of this ERN shall not be affected thereby and shall remain in force and effect to thc fullest extent permissible by law. 7.5 Mediation/Arbitration If a dispute arises out of or relates to this ERN, or the breach thereof, the parties agree first to try, in good faith, to settle the dispute by mediation in San Diego, California, in accordance with the Commercial Mediation Rules of the American Arbitration Association (the "AAA") before resorting to arbitration. The costs of mediation shall be borne equally by the parties. Any controversy or claim arising out of, or relating to, this Agreement, or breach thercof, which is not resolved by mediation shall be settled by arbitration in San Diego, California, in accordance with the Commercial Arbitration Rules of the AAA then existing. Any award rendered shall be final and conclusive upon the parties, and a judgment thereon may be entered in any court having jurisdiction over the subject matter of the controversy. The expenses of the arbitration shall be borne equally by the parties to thc arbitration, provided that each party shall pay for and bear the costs of its own experts, evidence and attomeys' fees, except that the arbitrator may assess such expenses or any part hereof against a specified party as part of the arbitration award. 7.6 No Obligations to Third Parties Except as otherwise expressly provided herein, the execution and delivery of this ERN shall not be deemed to confer any rights upon, or obligate any of the parties hereto, to any person or entity other than the parties hereto (or their assignees). 7.7 Entire Agreement This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between the parties as to the subject matter hereof. No subsequent agreement, representation, or promise made by either party shall be of any affect unless it is in writing and executed by the party to be bound thereby. 7.8 Assignment_ Partners, Successors and Assigns A. During the ERN period, the Developer has the right to bring in other partners that may act as a co -developer or financial partner or both, subject to the approval of the CDC. B. This ERN shall not be assigned by either party without the express written consent of the other party hereto. Said consent shall not be unreasonably withheld. This ERN shall be binding upon and shall inure to the benefit of thc successors and assigns of the parties hereto. Page 7 of 8 IN WITNESS WHEREOF, the CDC and the Developer have executed this Exclusive Right -to - Negotiate Agreement as of the date and year set under their signatures. CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY By: Georg6'H. Waters, Chairman (Mayor) APPROVED AS TO FORM: George H. Eiser, Ill City/CDC Attomey Attachments: Exhibit "A" - Site Map DEVELOPER: INVESTMENT DEVELOPMENT RVICES INC. By: MM Siam Its: Managing Member Page 8 of 8 23-07 )4 INTERSTATE 559-052-0G MC KINLEY AVENUE 0 0 0 559-052-08 0 N 559-052-06 559-052-05 559-052-04 559-055 559-055-10 559-055-09 559-055-08 559-055-14 559-052-13 559-052-03 559-055-01 559-055-13 559-072-17 559-072-14 f 559-072-08 559-072-07 559-072-16 559-075-24 P 0 0 N 559-075-19 0 0 0 m In 559-055-03 559-055-12 559-051-04 0 0 Il CLEVELAND 559-051-12 559-051-09 0 559-051-11 5 C-056-0 559-072-12 90-5L0-6SS m In 559-072-18 559-075-23 9 559-072-11 'n o PACIFIC STEEL INC. (PROJECT SITE) 559- 71-04 AVENUE 9-076-01 55 076-02 co N —I m m PLI 559-092-12 N 0 0 0 Q' T 0 0 O 0 o m p, Vl In 0 0 0 m 0 0 0 0 0 uMl .n In 0 559-091-14 559-09I- II HARRISON 559-040-46 Al 559-040-48