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HomeMy WebLinkAbout2006 CON CDC SD Habitat for Humanity - ENAEXCLUSIVE NEGOTIATION AGREEMENT By and Between COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY And SAN DIEGO HABITAT FOR HUMANITY THIS EXCLUSIVE NEGOTIATION AGREEMENT (hereafter referred to as "AGREEMENT") is entered into this 19th day of December 2006, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (hereafter referred to as "CDC"), and SAN DIEGO HABITAT FOR HUMANITY, a 501 (c)(3) non-profit corporation (hereafter referred to as "DEVELOPER"), on the terms and provisions set forth below. RECITALS WHEREAS, the CDC currently owns certain real property at 1441 Harding Avenue (Assessor Parcel Number 559-085-08) and 1820 G Street (Assessor Parcel Number 560-233-06), in National City, CA as further described herein (hereafter referred to as "SITE"); and WHEREAS, on October 17, 2006, the DEVELOPER was selected by the CDC as the preferred developer for the SITE; and WHEREAS, the DEVELOPER is interested in purchasing the SITE from the CDC and preparing plans to develop an affordable "for sale" single family residential housing development upon the SITE located at 1441 Harding Avenue, ,and an affordable "for sale" multi family residential housing development upon the SHE located at 1820 G Street (hereafter referred to as "PROJECT"); and WHEREAS, prior to any sale and conveyance of the SHE to the DEVELOPER, CDC shall ensure that the SITE is clear and vacant of all structures; and WHEREAS, the CDC and the DEVELOPER desire to enter into this AGREEMENT to initiate exclusive negotiations for up to one hundred and eighty (180) days (hereafter referred to as "EXCLUSIVE NEGOTIATION PERIOD") to allow the DEVELOPER to (i) undertake due diligence activities regarding the PROJECT; (ii) complete a PROJECT Design Concept; (iii) establish the responsibilities, schedule, and financial parameters for developing the PROJECT; (iv) negotiate the purchase price of the SHE; and (v) negotiate a Disposition and Development Agreement (hereafter referred to as "DDA"). NOW, THEREFORE, in consideration of the recitals and mutual covenants and conditions contained herein, the parties hereto agree as follows: SDCA_280013.2 The SHE constitutes the real property that is the subject of this AGREEMENT. The SITE is located at 1441 Harding Avenue (Assessor Parcel Number 559-085-08), and 1820 G Street (Assessor Parcel Number 560-233-06) in National City, CA. The SITE at 1441 Harding Avenue consists of a lot of approximately 8,712 square feet, and the SITE at 1820 G Street consists of a lot of approximately 15,246 square feet. II. EXCLUSIVE NEGOTIATION PERIOD A. Exclusive Negotiation Period The EXCLUSIVE NEGOTIATION PERIOD begins when the CDC executes this AGREEMENT (hereafter referred to as "COMMENCEMENT DATE") and shall last for one hundred and eighty (180) days thereafter. B. First Negotiation Period During the first one -hundred twenty (120) days of the EXCLUSIVE NEGOTIATION PERIOD (hereafter referred to as "FIRST NEGOTIATION PERIOD"), the DEVELOPER and CDC shall meet regularly, in good faith, and jointly formulate a plan to develop the PROJECT (hereafter referred to as "DEVELOPMENT PROGRAM"). The Development Program shall include and delineate the following elements: 1. The type and scope of the PROJECT; 2. The interface of a phased development with the complete build out of the SITE; 3. Required on and off -site infrastructure improvements; 4. Project, infrastructure, and state and local regulatory requirement costs; 5. Funding responsibilities and sources for the PROJECT; 6. The parties/entities responsible for the various Project development activities; and 7. A detailed Project development schedule. C. Due Diligence Also, during the FIRST NEGOTIATION PERIOD, the CDC and DEVELOPER, as applicable, shall conduct their respective due diligence activities, including but not limited to: 2 SDCA_280013.2 1. DEVELOPER'S timely delivery and submission to the CDC of sufficient evidence that the DEVELOPER is financially viable and has the required equity and financing to complete SUE development; 2. DEVELOPER'S timely review of preliminary title report information prepared for the SITE; 3. DEVELOPER'S timely investigation of the S11E. In conjunction therewith, and subject to the DEVELOPER receiving all prior governmental approvals and agreeing to all conditions of such approvals, DEVELOPER and its consultants and agents shall have the right to enter upon the SITE to conduct tests, studies, and investigations pursuant to an Right of Entry Agreement, the form of which is attached hereto and incorporated herein as Exhibit 1; and 4. DEVELOPER'S timely submission of the Development Program to the CDC for review and comment. D. Design Concept Plan Submission/Entitlements/Environmental Review By the end of the I,IRST NEGOTIATION PERIOD, DEVELOPER shall submit its Design Concept Plan for the PROJECT, including a Site Plan, Floor Plans, Exterior Elevations and Project Description and elevations, for review and consideration of acceptance by the Board of Directors of the CDC (hereafter referred to as "CDC BOARD"). Upon the acceptance of the Design Concept Plan by the CDC BOARD, the DEVELOPER shall begin the process of preparing with the City any necessary land use entitlements, and shall complete environmental studies and reports for the PROJECT. E. DDA Following Design Concept Plan acceptance by the CDC BOARD, and the close of the FIRST NEGOTIATION PERIOD, the CDC agrees to negotiate exclusively with the DEVELOPER for the remaining sixty (60) days of the EXCLUSIVE NEGOTIATION PERIOD (hereafter referred to as "SECOND NEGOTIATION PERIOD") in order to negotiate and attempt to finalize the DDA. If, at the close of the SECOND NEGOTIATION PERIOD, the CDC and DEVELOPER have not agreed to the terms of the DDA, this AGREEMENT shall automatically terminate. Notwithstanding the above, the CDC's Executive Director, in his sole discretion, may extend the Negotiation Period for up to an additional one hundred and eighty (180) days to complete DDA negotiations, begin the process of preparing any necessary land use entitlements, and complete environmental studies and reports, if the CDC's Executive Director determines additional time is reasonably required. 3 SDCA_280013.2 F. Execution of DDA After the DEVELOPER and the CDC agree upon the DDA, the EXCLUSIVE NEGOTIATION PERIOD may be extended for up to an additional ninety (90) days at the discretion of the CDC's Executive Director, or its acting Director (hereafter referred to as "THIRD NEGOTIATION PERIOD") in order to enable the CDC and the City to: 1. Notice and conduct a public hearing pursuant to Section 33433 of the California Health and Safety Code on the DDA; and 2. Process Site development, environmental and entitlement applications through the City's Planning Commission and City Council. The CDC agrees that during the EXCLUSIVE NEGOTIATION PERIOD, and during all of its extensions, the CDC shall not negotiate or enter into an agreement with any other person or entity regarding development of the SUE. The obligation to negotiate in good faith requires the respective parties to communicate with each other with respect to those issues for which agreement has not been reached, and in such communication to follow reasonable negotiation procedures, including meetings, telephone conversations, and correspondence. The parties understand that final accord on all issues may not be reached. It is also understood that, (1) neither party is under any obligation to reach agreement on the SITE purchase price and/or DDA, and (2) the CDC reserves the right to approve or reject a DDA, the Project, or any disposition of the SITE, in its sole discretion, as more particularly set forth in Part IV of this AGREEMENT. G. CDC and Developer Obligations During the EXCLUSIVE NEGOTIATION PERIOD, the CDC and DEVELOPER obligations shall include, but not be limited to, the following: 1. CDC Obligations a. Provide the DEVELOPER with documents in the CDC's possession that would assist the DEVELOPER with the due diligence activities described in this AGREEMENT; b. Costs to perform certain tests, studies, and analyses necessary to evaluate the condition of the SITE and assess PROJECT feasibility. These shall include costs for creating design concepts, preparing preliminary title reports, appraisals and a Phase I report, performing financial feasibility analysis, and preparing and processing any land use applications and environmental studies and reports associated with the PROJECT. c. Upon acceptance of the Development Program and verification of DEVELOPER financial commitments to 4 SDCA_280013.2 both purchase and develop the PROJECT, prepare a first draft of a DDA. d. The CDC's financial obligation under this Agreement shall not exceed $25,000. 2. Developer Obligations a. Use its best efforts to investigate the SI1h; b. Submit site plans, elevations, schematic drawings, detailed Project development costs, Project pro formas for Site improvements as well as a pro forma summarizing the total Project and respective returns and other documents necessary for CDC and City review; and c. Submit proof of adequate funding or funding commitments for the PROJECT. III. RETENTION OF DISCRETION TO APPROVE THE PROJECT AND DDA; NO PRE -COMMITMENT It is anticipated that the PROJECT and the DDA providing for its implementation will be presented to the CDC BOARD for approval. The parties understand that the CDC is reserving the right to exercise its discretion as to all matters which it is, by law, entitled or required to exercise its discretion, including, but not limited to the following: A. Approval by the CDC of the Final Project as Contained in the DDA The parties understand that the CDC has the complete and unfettered discretion to reject the DDA without explanation or cause. The risk of loss of all development costs incurred by the DEVELOPER prior to DDA approval and execution shall be absorbed entirely by DEVELOPER with the exception of the costs specified under Section II G (1)(b) of this AGREEMENT. B. Review and Approval by the CDC of all Discretionary Findings and Conclusions The duty of the CDC to dispose of the parcel comprising the SI1E shall be conditioned upon the successful review and approval of all necessary findings and conclusions which the CDC BOARD is required to make, including all necessary findings and determinations required under CEQA, state and local land use provisions, and the California Community Redevelopment Law. As to any matter which the CDC may be required to exercise its unfettered discretion in advancing the PROJECT to completion, neither anything contained herein, nor to be contained in the DDA shall obligate the CDC to exercise its discretion in any particular manner, and any exercise of discretion reserved hereunder or required by law, shall not be deemed to constitute a breach of CDC duties under this AGREEMENT. 5 SDCA_280013.2 C. No Pre -Commitment by the CDC By its execution of this AGREEMENT, the CDC is not committing itself to or agreeing to undertake any activity requiring the subsequent exercise of discretion by the CDC, or any department thereof including, but not limited to, the approval and execution of a DDA; the proposal, amendment, or approval of any land use regulation governing the SITE; the provision of any financial assistance for the development of any public or private interest in real property; the acquisition of real property or any other property interest; or any other such activity. This AGREEMENT does not constitute a disposition of property or exercise of control over property by the CDC and does not require a public hearing. CDC execution of this AGREEMENT is merely an agreement to enter into a period of exclusive negotiations according to the terms hereof, reserving final discretion and approval by the CDC as to any proposed DDA and all proceedings and decisions in connection therewith. IV. THE DEVELOPER A. Developer Experience As a condition precedent to the CDC's execution of this AGREEMENT, DEVELOPER shall have submitted to the CDC a detailed description of the development experience of the DEVELOPER and its principals, associates, employees, partners, and joint ventures. B. Offices of the Developer The principal offices of DEVELOPER are located at: San Diego Habitat for Humanity 10222 San Diego Mission Road San Diego, CA 92108 The Project Manager for the DEVELOPER will be: Cheryl Keenan, Executive Director Other prime developers, employees, consultants, or representatives who are proposed to be directly involved in the Project will be determined by DEVELOPER and submitted to the CDC upon any such determination. C. Full Disclosure The DEVELOPER shall maintain full disclosure to the CDC of its principals, officers, stockholders, partners, joint ventures, and all other pertinent information concerning the DEVELOPER. 6 SDCA_280013.2 D. Assignment The DEVELOPER without prior written approval of the CDC may not assign this AGREEMENT. The CDC agrees that, notwithstanding the foregoing, the DEVELOPER may assign its rights under this AGREEMENT to a corporation, trust, or partnership of which the DEVELOPER owns the majority beneficial interest and operational control. E. Progress 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. V. ENVIRONMENTAL REQUIREMENTS The DEVELOPER at CDC's expense shall prepare all necessary environmental documents as required by the California Environmental Quality Act (public Resources Code Section 21,000 et seq.) and local regulations, for certification by the City. The DEVELOPER agrees to cooperate with the City and the CDC, as requested, to help determine the environmental impact of the proposed development and to prepare any other additional documents as may be needed to complete environmental review for the development of the PROJECT on the SITE. VI. REAL ESTATE COMMISSIONS The CDC has not engaged a broker, agent, or finder in connection with this transaction. As such, the CDC will not be responsible for any claims by a broker, agent or finder, and the DEVELOPER agrees to defend, indemnify, protect and hold the CDC harmless from any claim by any broker, agent, or finder retained by the DEVELOPER. VII. GENERAL PROVISIONS A. Legal Actions 1. Institution of Legal Actions In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover actual damages for any default, or to obtain any other remedy consistent with the purposes of this AGREEMENT; provided, however, that Paragraph C of this Part VIII shall supersede any conflicting provisions of this Paragraph A.1. Such legal actions must be instituted and maintained in the Superior Court of the County of San Diego, State of California, or in any other appropriate court in that county. 2. Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this AGREEMENT. 7 SDCA_280013.2 3. Acceptance of Service of Process In the event that any legal action is commenced by the DEVELOPER against the CDC, service of process on the CDC shall be made by personal service upon the Executive Director or Secretary of the CDC, or in such other manner as may be provided by law. In the event that any legal action is commenced by the CDC against the DEVELOPER, service of process on the DEVELOPER shall be made by personal service upon the DEVELOPER or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. B. Rights and Remedies are Cumulative Except as otherwise expressly stated in this AGREEMENT, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. C. Specific Performance as Developer's Exclusive Remedy Subject to the DEVELOPER'S right to terminate this AGREEMENT in accordance with the terms of Paragraph E of this Part VIII, the DEVELOPER'S exclusive remedy for an uncured CDC default under this AGREEMENT is to institute an action for specific performance of the terms of this AGREEMENT, and in no event shall the DEVELOPER have the right, and the DEVELOPER expressly waives the right, to seek monetary damages of any kind (including but not limited to actual damages, economic damages, consequential damages, or lost profits) from the CDC in the event of a default by the CDC under this AGREEMENT or any action related to this AGREEMENT. Notwithstanding the foregoing, the DEVELOPER shall retain the right to seek a writ of mandate in the event of any final denial by the CDC of any CDC permit or approval pertaining to the PROJECT. D. Attorney's Fees If either party to this AGREEMENT is required to initiate or defend litigation in any way connected with this AGREEMENT, the prevailing party in such litigation in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to its actual and reasonable attorney's fees. If either party to this AGREEMENT is required to initiate or defend litigation with a third party because of the violation of any terms or provision of this AGREEMENT by the other party, then the party so litigating shall be entitled to its actual and reasonable attorney's fees from the other party to this AGREEMENT. As used herein, the term "attorney's fees" shall include attorney's fees incurred related to the foregoing described litigation and for any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, retaining expert witnesses, taking depositions and discovery, and all other necessary costs incurred in such litigation. All such fees shall be deemed to 8 SDCA_280013.2 have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. The parties hereto acknowledge and agree that each such party shall bear its own legal costs incurred in connection with the negotiation, approval, and execution of this AGREEMENT. E. Termination Rights Notwithstanding the nominal EXCLUSIVE NEGOTIATION PERIOD hereinabove set forth, either party may terminate this AGREEMENT if the other party has materially defaulted in its obligations herein set forth, and the terminating party has provided the defaulting party with written notification of such determination, and the defaulting party has refused to cure same. The written notification shall set forth the nature of the actions required to cure such default if curable. The defaulting party shall have thirty (30) days from the date of the written notification to cure such default. If such default is not cured within the thirty (30) days, the termination shall be deemed effective. For purposes of this paragraph, the parties hereby acknowledge that time is of the essence. Each party shall also have the right to terminate this AGREEMENT in the event that (a) the CDC or the DEVELOPER determines that the PROJECT is infeasible, based on financial or environmental impact considerations, or not in the public interest; or (b) the parties reach an impasse in their negotiation of the DDA which cannot be resolved after good faith efforts. Upon such a termination, the CDC shall return the BALANCE OF DEVELOPER'S DEPOSIT, if any, to the DEVELOPER. F. Indemnity The DEVELOPER shall indemnify, protect defend and hold harmless the CDC and the City and the CDC's and the City's respective elected officials, officers, employees, representatives, members, and agents from and against any and all challenges to this AGREEMENT, or any and all losses, liabilities, damages, claims or costs (including attorneys' fees) arising from DEVELOPER'S negligent acts, errors, or omissions with respect to its obligations hereunder or the SITE, excluding any such losses arising from the sole negligence or sole willful misconduct of the CDC or the conduct of third parties outside the control of the DEVELOPER. This indemnity obligation shall survive the termination of this AGREEMENT. Notwithstanding the foregoing, in the event of a third party challenge to the validity of this AGREEMENT, DEVELOPER shall have the option to terminate this AGREEMENT in lieu of its indemnity obligation. G. Notices Demand and Communications Between the Parties Formal notices, demands, and communications between CDC and DEVELOPER shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) or by mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: 9 SDCA_280013.2 To CDC: With copy to: To Developer: Community Development Commission of National City (CDC) Attn: Brad Raulston, Executive Director 1243 National City Boulevard National City, CA 91950-4301 City of National City Attn: George Eiser, City Attorney 1243 National City Boulevard National City, CA 91950-4301 San Diego Habitat for Humanity Attn: Cheryl Keenan, Executive Director 10222 San Diego Mission Road San Diego, CA 92108 Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. H. Nonliability of City and CDC Officials and Employees No member, official, employee, or contractor of the City or the CDC shall be personally liable to the DEVELOPER in the event of any default or breach by the CDC or for any amount, which may become due to the DEVELOPER or on any obligations under the terms of the AGREEMENT. I. Interpretation The terms of this AGREEMENT shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this AGREEMENT or any other rule of construction which might otherwise apply. The Part and Paragraph headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this AGREEMENT. J. Entire Agreement, Waivers, and Amendments This AGREEMENT integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this AGREEMENT must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of CDC and DEVELOPER. SDCA_280013.2 10 K. Counterparts This AGREEMENT may be executed in counterparts, each of which, after all the parties hereto have signed this AGREEMENT, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. L. Successors This AGREEMENT shall be binding upon and shall inure to the benefit of the permitted successors of each of the parties hereto. M. Further Assurances The parties hereto each agree, without further consideration, to execute such other and further documents, and to perform such other and further acts, as may be necessary or proper in order to consummate the transaction set forth in and contemplated by this Agreement. N. Severability In the event any section or portion of this AGREEMENT shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this AGREEMENT. O. Time is of the Essence Time is of the essence for each of the DEVELOPER'S obligations under this AGREEMENT. P. Confidentiality The DEVELOPER acknowledges and agrees that the CDC is a public entity with a responsibility and, in many cases, legal obligation to conduct its business in a manner open and available to the public. Accordingly, any information provided by the DEVELOPER to the CDC with respect to the SITE, the PROJECT or the DEVELOPER may be disclosed to the public either purposely, inadvertently, or as a result of a public demand or order. With respect to any information provided that the DEVELOPER reasonably deems and identifies in writing as proprietary and confidential in nature, the CDC agrees to exercise its best efforts to keep such information confidential. IN WITNESS WHEREOF, the CDC and the DEVELOPER have signed this AGREEMENT on the respective dates set forth below. SDCA_280013.2 11 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY on Morrison, Chairma ATTEST: By: Brad , Secretary APPROVED AS TO FORM: By: daF- George Eiser, III CDC Counsel Dated: /2 -20 - DG SAN DIEGO HABITAT FOR HUMANITY By: Cheryl Kee , Executive Director By: SDCA_280013.2 12 EXHIBIT 1 RIGHT OF ENTRY AGREEMENT THIS RIGHT OF ENTRY AGREEMENT (hereafter referred to as "Agreement") is made and entered into as of December 19, 2006, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (hereafter referred to as "CDC"), and SAN DIEGO HABITAT FOR HUMANITY, a 501 (c)(3) non-profit corporation (hereafter referred to as "Developer"), with respect to the following: RECITALS A. The CDC and the Developer have entered into an Exclusive Negotiate Agreement, dated as of December 19, 2006, for the negotiation of a disposition and development agreement with respect to certain real property in the City of National City known as Assessor Parcel Number 559-085-08 and 560-233-06, (hereafter referred to as "Property"). B. The Developer desires to perform certain predevelopment work consisting of certain tests, studies, and analyses necessary to evaluate the condition of the Property (hereafter referred to as "Predevelopment Work"). C. The CDC wishes to accommodate the Developer's desire to commence the Predevelopment Work on the Property by granting a right of entry to Developer upon certain terms and conditions. NOW, THEREFORE, for good and valuable consideration, Developer and CDC do hereby agree as follows: 1. Right of Entry. Provided that all of the terms and conditions of this Agreement are fully satisfied, the CDC hereby grants to Developer and its employees, agents and contractors the nonexclusive right to enter upon the Property to perform the Predevelopment Work, and for no other purposes without the prior written approval of the CDC's Executive Director or his designee. This Agreement shall automatically terminate and expire one hundred and eighty (180) days from the date of this Agreement. The term of this Agreement may be extended at the sole and absolute discretion of the CDC Executive Director or his designee for an additional period not to exceed thirty (30) days. It is expressly understood that this Agreement does not in any way whatsoever grant or convey any rights of possession, easement or other interest in the Property to the Developer. 2. Agreement. By execution of this Agreement, Developer agrees for itself and on the behalf of its employees, agents, consultants and contractors as follows: (a) That Developer will not permit any dangerous condition to be created on the Property. SDCA_280013.2 -1- Exhibit 1 (b) That all acts and things done by Developer on the Property will be done in a careful and reasonable manner, in accordance with all federal, state and local laws. (c) That Developer enters the Property entirely at its own cost, risk and expense. (d) That prior to the Developer's entry upon the Property and during the period of this Agreement, there shall be in effect and shall provide satisfactory evidence to the CDC of the following: a. Workers' compensation insurance as required by law; b. Commercial general liability insurance written on an occurrence basis, with a combined single limit of at least One Million Dollars ($1,000,000) consisting of both bodily injury and property damage coverage; and c. Automobile liability insurance, including liability for all owned, hired and non -owned vehicles, with minimum limits of One Million Dollars ($1,000,000) for bodily injury per person, One Million Dollars ($1,000,000) property damage and One Million Dollars ($1,000,000) combined single limit per occurrence. CDC of National City shall be named as an additional insured under the commercial general liability policy. (e) That Developer shall not permit any mechanics', material men's or other liens of any kind or nature (hereafter referred to as "Liens") to be filed or enforced against the Property in connection with the Predevelopment Work. Developer shall indemnify, defend and hold harmless CDC from all liability for any and all liens, claims and demands, together with costs of defense and reasonable attorneys' fees, arising from any Liens. CDC reserves the right, at its sole cost and expense, at any time and from time to time, to post and maintain on the Property, or any portion thereof, or on the improvements on the Property, any notices of non -responsibility or other notice as may be desirable to protect CDC against liability. In addition to, and not as a limitation of CDC's other rights and remedies under this Agreement, should the Developer fail, within ten (10) days of written request from CDC, either to discharge any Lien or to bond for any Lien, or to defend, indemnify, and hold harmless CDC from and against any loss, damage, injury, liability or claim arising out of a Lien, then CDC, at its option, may elect to pay such Lien, or settle or discharge such Lien and any action or judgment related thereto and all costs, expenses and attorneys' fees incurred in doing so shall be paid to CDC by the Developer upon written demand. (f) That Developer shall not have any interest in the Property or be entitled to any reimbursement or repayment for any work performed upon the Property pursuant to -2- Exhibit 1 SDCA_280013.2 this Agreement. Developer shall, at the written request of the CDC, leave the Property in a condition that does not create an unreasonable risk of harm to the public. (g) The Developer shall take all necessary precautions to prevent the import and/or release into the environment of any hazardous materials, which are imported to, in, on or under the Property during the performance of the Predevelopment Work. If hazardous materials are imported onto the Property as a result of the performance of the Predevelopment Work, the Developer shall be solely responsible for removing such imported hazardous materials in conformance with all Governmental Requirements. The Developer shall report to the CDC, as soon as possible after each incident, any unusual or potentially important incidents with respect to the environmental condition of the Property. 3. Indemnity. Developer hereby agrees to defend, indemnify and hold the CDC and its officers, officials, members, employees, agents and representatives, harmless from and against any and all loss, damage, injury, liability, claim, cost or expense (including, without limitation, reasonable attorneys' fees, expert witness fees, court costs, and expenses) arising from or attributable to the activities of Developer or any of its employees, agents, consultants or contractors upon the Property pursuant to this Agreement. All use of and entry upon the Property shall be at the sole cost, risk and expense of the Developer. 4. Miscellaneous. SDCA_280013.2 (a) Choice of Law. This Agreement is to be governed by, and construed in accordance with, the laws of the State of California. (b) Remedies. Either party shall, in addition to all other rights provided herein or as may be provided by law, be entitled to the remedies of specific performance and injunction to enforce its rights hereunder, except to the extent expressly provided to the contrary in this Agreement. All rights and remedies under this Agreement are cumulative and no one of them shall be exclusive of any other, and each party shall have the right to pursue any one or all of such rights and remedies or any other remedy which may be provided by law, whether or not stated in this Agreement, except to the extent expressly provided to the contrary in this Agreement. (c) Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. (d) Non -Liability of Public Officials. No officer, employee, member, agent or representative of the CDC shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by the CDC, or for any amount which may become due to Developer or its successor, or for any breach of any obligation of the terms of this Agreement. -3- Exhibit 1 IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date first set forth above. CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Brad DEVELOPER: ive Director SAN DIEGO HABITAT FOR HUMANITY By: (): Cheryl K, nan, Executive Director By: -4- Exhibit 1 SDCA_280013.2 RESOLUTION NO. 2006 — 271 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY AUTHORIZING THE CHAIRMAN TO EXECUTE AN EXCLUSIVE NEGOTIATING AGREEMENT WITH SAN DIEGO HABITAT FOR HUMANITY FOR 1820 G STREET (APN 560-233-06) AND 1441 HARDING AVENUE (APN 559-085-08 WHEREAS, the Community Development Commission of the City of National City (CDC) implements the National City Redevelopment Plan; and WHEREAS, the National City Redevelopment Plan calls for the revitalization of underutilized properties such as 1820 G Street and 1441 Harding Avenue; and WHEREAS, San Diego Habitat for Humanity, is a qualified and experienced Community Housing Development Organization (CHDO) that is interested in acquiring and developing the subject parcels; and WHEREAS, an Exclusive Negotiating Agreement has been proposed which provides San Diego Habitat for Humanity the opportunity to assess the feasibility of developing a single-family residential project at 1441 Harding Avenue, and a multi -family residential project at 1820 G Street. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of the City of National City hereby authorizes the Chairman to execute an Exclusive Negotiation Agreement with San Diego Habitat for Humanity for 1820 G Street (APN 560-233-06) and 1441 Harding Avenue (APN 559-085-08). PASSED and ADOPTED this 19th day of Decemb —i 06. Bradiston, Secretary APPROVED AS TO FORM: George H. iser, III Legal Counsel on Mor ' on, Chairman Passed and adopted by the Community Development Commission of the City of National City, California, on December 19, 2006, by the following vote, to -wit: Ayes: Commissioners Morrison, Natividad, Parra, Ungab, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: ... 17-0 Sec'. r TjY,,11� RON MORRISON Chairman, Community Development ission evelopment Commission By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2006-271 of the Community Development Commission of the City of National City, California, passed and adopted on December 19, 2006. Secretary, Community Development Commission By: Deputy City of National City Office of the City Clerk 1243 National City Boulevard, National City, CA 91950.4397 Michael R. Della, CMC - City Clerk (619) 336-4228 Fax: (619) 336-4229 January 22, 2007 Cheryl Keenan Executive Director San Diego Habitat for Humanity 10222 San Diego Mission Road San Diego, CA 92108 Dear Ms. Keenan, On December 19, 2006, Resolution No. 2006-271 was passed and adopted by the Community Development Commission of National City, authorizing the Chairman to execute an Exclusive Negotiating Agreement with San Diego Habitat for Humanity for 1820 G Street (APN 560-233-06) and 1441 Harding Avenue (APN 559-085-08). We are enclosing for your records a certified copy of the above Resolution and a fully executed original agreement. Sincerely, 4 Michael R. Dalla, CMC City Clerk MRD/ebc Enclosure cc: Community Development Commission ® Recycled Paper City of National City, California COMMUNITY DEVELOPMENT COMMISSION AGENDA STATEMENT MEETING DATE December 19, 2006 AGENDA ITEM NO 30 ITEM TITLE Approve an Exclusive Negotiation Agreement (ENA) with San Diego Habitat for Humanity for 1820 G Street (APN# 560-233-06) and 1441 Harding Avenue (APN# 559-085-08), and authorize the Chairman to execute said Agreement. PREPARED BY DEPARTMENT 4Pt Xavier Del Valle Community Development Commission Senior Project Manager EXPLANATION On October 17, 2006, the CDC Board directed staff to work with San Diego Habitat for Humanity to prepare plans to develop the HOME acquired parcels located at 1820 G Street and 1441 Harding Avenue. The proposed ENA shall remain in effect for 180-days and will provide the opportunity to assess the feasibility of developing an affordable single family residential project at 1441 Harding Avenue and a multi family residential project at 1820 G Street. The ENA also provides the Executive Director the discretion to extend the ENA for an additional 180-days, if necessary. Environmental Review CEQA is not applicable Financial Statement The CDC -owned parcels at 1820 G Street and 1441 Harding Avenue were acquired with HOME Federal funds at a cost of $875,000 (2004) and $400,000 (2003), respectively. An updated appraisal is necessary in order to determine the current fair market value of the subject parcels. Due to Habitat's status as a 501 (c) (3) non-profit corporation, the proposed ENA specifies that the CDC shall assist Habitat for the costs associated with evaluating the condition of the site and assessing project feasibility. These costs include preparing preliminary title reports and appraisals, performing fmancial feasibility analysis, and preparing and processing any land use applications and environmental studies and reports associated with the project. The aforementioned costs shall not exceed $25,000, and shall be paid for out of Project Area Housing Funds. STAFF RECOMMENDATION Approve an Exclusive Negotiation Agreement (ENA) with San Diego Habitat for Humanity for 1820 G Street (APN# 560-233-06) and 1441 Harding Avenue (APN# 559-085- 08), and authorize the Chairman to execute said Agreement ATTACHMENTS 1. Background Report 2. Resolution 3. Exclusive Negotiation Agreement Resolution No. • `4` ? 4. Conceptual Site Plans A-200 (9/80) ATTACHMENT 1 BACKGROUND REPORT On October 17, 2006, the CDC Board directed staff to work with San Diego Habitat for Humanity to prepare plans to develop the HOME acquired sites located at 1820 G Street (15,246- sf) and 1441 Harding Avenue (8,712-sf). Habitat is a qualified and experienced Community Housing Development Organization (CHDO), and has previously partnered with the City in developing affordable for -sale units, such as the three single family residences at 1401, 1409, and 1410 Sheryl Lane. The units were made available to working class families earning no more than 50% of the area median income. The Redevelopment Plan for the National City Redevelopment Project Area calls for the revitalization of underutilized properties such as 1820 G Street and 1441 Harding Avenue. The proposed Exclusive Negotiation Agreement (ENA) with Habitat shall remain in effect for 180- days, and will provide the opportunity to assess the feasibility of developing an affordable single family residential project at 1441 Harding Avenue, and a multi family residential project at 1820 G Street. Attachment 4 of this report provides a conceptual site plan for the subject parcels. Within the first 120-days of the ENA period, Habitat shall undertake due diligence activities, including site investigation and the timely submission of a development program. Habitat shall also submit a design concept plan for CDC consideration. Upon CDC acceptance of the design concept plan, Habitat will have the ability to prepare and process with the City any necessary land use applications and environmental studies. During the remaining 60-days, the CDC shall negotiate with Habitat to attempt to finalize a Disposition and Development Agreement (DDA) for the subject parcels. If at the end of the ENA period, Habitat and the CDC have not agreed to the terms with the DDA, the ENA shall automatically terminate. However, the CDC Executive Director has the discretion to extend the ENA for an additional 180 days to complete DDA negotiations, land use approvals, and environmental studies, if the Executive Director determines additional time is necessary. 20 ALLE') ; ¢G 25`= loos J J IB`" STREET 51 URN 'Y 8) 22' 18 SFACES rx 181 2 c.uEST SFf+cES CFF SITEY 6 SITE PLAN 1"=2O" LONGITUDINAL SECTION 1"=3O' CROSS SECTION 1'=3O' to W F RE C FRONT ELEVATION 1.=20' LD IL END ELEVATION 1"=20" Habitat for Humanity San Diego, Inc Development Proposal NATIONAL CITY 1820 G AVE:. 14,735 sf PARCEL S UNIT 2 STORY CONDO 3+ BR 1250 sf ea. Building first floor 5000 sf 35% cover LandscapE/hardscape 3750 sf 26% cover Parking, drives, trash 5625 sf 3 9% cover J.T. Brandt. Architect 33252 Palo Alto St. Dana Point. Ca. 92629 r- r 4 r LJ I SEE 2/A-2 ; SEE VA-3 115' -0" 115' -0" s TE V OT To SGALs -A 1441 Harding Avenue RESOLUTION NO. 2006— RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY AUTHORIZING THE CHAIRMAN TO EXECUTE AN EXCLUSIVE NEGOTIATING AGREEMENT WITH SAN DIEGO HABITAT FOR HUMANITY FOR 1820 G STREET (APN 560-233-06) AND 1441 HARDING AVENUE (APN 559-085-08 WHEREAS, the Community Development Commission of the City of National City (CDC) implements the National City Redevelopment Plan; and WHEREAS, the National City Redevelopment Plan calls for the revitalization of underutilized properties such as 1820 G Street and 1441 Harding Avenue; and WHEREAS, San Diego Habitat for Humanity, is a qualified and experienced Community Housing Development Organization (CHDO) that is interested in acquiring and developing the subject parcels; and WHEREAS, an Exclusive Negotiating Agreement has been proposed which provides San Diego Habitat for Humanity the opportunity to assess the feasibility of developing a single-family residential project at 1441 Harding Avenue, and a multi -family residential project at 1820 G Street. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of the City of National City hereby authorizes the Chairman to execute an Exclusive Negotiation Agreement with San Diego Habitat for Humanity for 1820 G Street (APN 560-233-06) and 1441 Harding Avenue (APN 559-085-08). PASSED and ADOPTED this 19th day of December 2006. ATTEST: Brad Raulston, Secretary APPROVED AS TO FORM: George H. Eiser, III Legal Counsel Ron Morrison, Chairman EXCLUSIVE NEGOTIATION AGREEMENT By and Between COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY And SAN DIEGO HABITAT FOR HUMANITY THIS EXCLUSIVE NEGOTIATION AGREEMENT (hereafter referred to as "AGREEMENT") is entered into this 19th day of December 2006, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (hereafter referred to as "CDC"), and SAN DIEGO HABITAT FOR HUMANITY, a 501 (c)(3) non-profit corporation (hereafter referred to as "DEVELOPER"), on the terms and provisions set forth below. RECITALS WHEREAS, the CDC currently owns certain real property at 1441 Harding Avenue (Assessor Parcel Number 559-085-08) and 1820 G Street (Assessor Parcel Number 560-233-06), in National City, CA as further described herein (hereafter referred to as "SITE"); and WHEREAS, on October 17, 2006, the DEVELOPER was selected by the CDC as the preferred developer for the SITE; and WHEREAS, the DEVELOPER is interested in purchasing the Sl1'E from the CDC and preparing plans to develop an affordable "for sale" single family residential housing development upon the SITE located at 1441 Harding Avenue, ,and an affordable "for sale" multi family residential housing development upon the SITE located at 1820 G Street (hereafter referred to as "PROJECT"); and WHEREAS, prior to any sale and conveyance of the S1'1'E to the DEVELOPER, CDC shall ensure that the SITE is clear and vacant of all structures; and WHEREAS, the CDC and the DEVELOPER desire to enter into this AGREEMENT to initiate exclusive negotiations for up to one hundred and eighty (180) days (hereafter referred to as "EXCLUSIVE NEGOTIATION PERIOD") to allow the DEVELOPER to (i) undertake due diligence activities regarding the PROJECT; (ii) complete a PROJECT Design Concept; (iii) establish the responsibilities, schedule, and financial parameters for developing the PROJECT; (iv) negotiate the purchase price of the SITE; and (v) negotiate a Disposition and Development Agreement (hereafter referred to as "DDA"). NOW, THEREFORE, in consideration of the recitals and mutual covenants and conditions contained herein, the parties hereto agree as follows: 1 SDCA_280013.2 I. SITE The SIZE constitutes the real property that is the subject of this AGREEMENT. The SHE is Located at 1441 Harding Avenue (Assessor Parcel Number 559-085-08), and 1820 G Street (Assessor Parcel Number 560-233-06) in National City, CA. The SUE at 1441 Harding Avenue consists of a lot of approximately 8,712 square feet, and the SI'i'E at 1820 G Street consists of a lot of approximately 15,246 square feet. II. EXCLUSIVE NEGOTIATION PERIOD A. Exclusive Negotiation Period The EXCLUSIVE NEGOTIATION PERIOD begins when the CDC executes this AGREEMENT (hereafter referred to as "COMMENCEMENT DATE") and shall last for one hundred and eighty (180) days thereafter. B. First Negotiation Period During the first one -hundred twenty (120) days of the EXCLUSIVE NEGOTIATION PERIOD (hereafter referred to as "FIRST NEGOTIATION PERIOD"), the DEVELOPER and CDC shall meet regularly, in good faith, and jointly formulate a plan to develop the PROJECT (hereafter referred to as "DEVELOPMENT PROGRAM"). The Development Program shall include and delineate the following elements: 1. The type and scope of the PROJECT; 2. The interface of a phased development with the complete build out of the SITE; 3. Required on and off -site infrastructure improvements; 4. Project, infrastructure, and state and local regulatory requirement costs; 5. Funding responsibilities and sources for the PROJECT; 6. The parties/entities responsible for the various Project development activities; and 7. A detailed Project development schedule. C. Due Diligence Also, during the FIRST NEGOTIATION PERIOD, the CDC and DEVELOPER, as applicable, shall conduct their respective due diligence activities, including but not limited to: 2 SDCA_280013.2 1. DEVELOPER'S timely delivery and submission to the CDC of sufficient evidence that the DEVELOPER is financially viable and has the required equity and financing to complete SIlE development; 2. DEVELOPER'S timely review of preliminary title report information prepared for the SITE; 3. DEVELOPER'S timely investigation of the SI1h. In conjunction therewith, and subject to the DEVELOPER receiving all prior governmental approvals and agreeing to all conditions of such approvals, DEVELOPER and its consultants and agents shall have the right to enter upon the SHE to conduct tests, studies, and investigations pursuant to an Right of Entry Agreement, the form of which is attached hereto and incorporated herein as Exhibit 1; and 4. DEVELOPER'S timely submission of the Development Program to the CDC for review and comment. D. Design Concept Plan Submission/Entitlements/Environmental Review By the end of the FIRST NEGOTIATION PERIOD, DEVELOPER shall submit its Design Concept Plan for the PROJECT, including a Site Plan, Floor Plans, Exterior Elevations and Project Description and elevations, for review and consideration of acceptance by the Board of Directors of the CDC (hereafter referred to as "CDC BOARD"). Upon the acceptance of the Design Concept Plan by the CDC BOARD, the DEVF.i ,OPER shall begin the process of preparing with the City any necessary land use entitlements, and shall complete environmental studies and reports for the PROJECT. E. DDA Following Design Concept Plan acceptance by the CDC BOARD, and the close of the FIRST NEGOTIATION PERIOD, the CDC agrees to negotiate exclusively with the DEVELOPER for the remaining sixty (60) days of the EXCLUSIVE NEGOTIATION PERIOD (hereafter referred to as "SECOND NEGOTIATION PERIOD") in order to negotiate and attempt to finalize the DDA. If, at the close of the SECOND NEGOTIATION PERIOD, the CDC and DEVELOPER have not agreed to the terms of the DDA, this AGREEMENT shall automatically terminate. Notwithstanding the above, the CDC's Executive Director, in his sole discretion, may extend the Negotiation Period for up to an additional one hundred and eighty (180) days to complete DDA negotiations, begin the process of preparing any necessary land use entitlements, and complete environmental studies and reports, if the CDC's Executive Director determines additional time is reasonably required. 3 SDCA_280013.2 F. Execution of DDA After the DEVELOPER and the CDC agree upon the DDA, the EXCLUSIVE NEGOTIATION PERIOD may be extended for up to an additional ninety (90) days at the discretion of the CDC's Executive Director, or its acting Director (hereafter referred to as "THIRD NEGOTIATION PERIOD") in order to enable the CDC and the City to: 1. Notice and conduct a public hearing pursuant to Section 33433 of the California Health and Safety Code on the DDA; and 2. Process Site development, environmental and entitlement applications through the City's Planning Commission and City Council. The CDC agrees that during the EXCLUSIVE NEGOTIATION PERIOD, and during all of its extensions, the CDC shall not negotiate or enter into an agreement with any other person or entity regarding development of the SITE. The obligation to negotiate in good faith requires the respective parties to communicate with each other with respect to those issues for which agreement has not been reached, and in such communication to follow reasonable negotiation procedures, including meetings, telephone conversations, and correspondence. The parties understand that final accord on all issues may not be reached. It is also understood that, (1) neither party is under any obligation to reach agreement on the STYE purchase price and/or DDA, and (2) the CDC reserves the right to approve or reject a DDA, the Project, or any disposition of the SITE, in its sole discretion, as more particularly set forth in Part IV of this AGREEMENT. G. CDC and Developer Obligations During the EXCLUSIVE NEGOTIATION PERIOD, the CDC and DEVELOPER obligations shall include, but not be limited to, the following: 1. CDC Obligations a. Provide the DEVELOPER with documents in the CDC's possession that would assist the DEVELOPER with the due diligence activities described in this AGREEMENT; b. Costs to perform certain tests, studies, and analyses necessary to evaluate the condition of the S1'1'h and assess PROJECT feasibility. These shall include costs for creating design concepts, preparing preliminary title reports, appraisals and a Phase I report, performing financial feasibility analysis, and preparing and processing any land use applications and environmental studies and reports associated with the PROJECT. c. Upon acceptance of the Development Program and verification of DEVELOPER financial commitments to 4 SDCA_280013.2 both purchase and develop the PROJECT, prepare a first draft of a DDA. d. The CDC's financial obligation under this Agreement shall not exceed $25,000. 2. Developer Obligations a. Use its best efforts to investigate the STl'h; b. Submit site plans, elevations, schematic drawings, detailed Project development costs, Project pro formas for Site improvements as well as a pro forma summarizing the total Project and respective returns and other documents necessary for CDC and City review; and c. Submit proof of adequate funding or funding commitments for the PROJECT. III. RETENTION OF DISCRETION TO APPROVE THE PROJECT AND DDA; NO PRE -COMMITMENT It is anticipated that the PROJECT and the DDA providing for its implementation will be presented to the CDC BOARD for approval. The parties understand that the CDC is reserving the right to exercise its discretion as to all matters which it is, by law, entitled or required to exercise its discretion, including, but not limited to the following: A. Approval by the CDC of the Final Project as Contained in the DDA The parties understand that the CDC has the complete and unfettered discretion to reject the DDA without explanation or cause. The risk of loss of all development costs incurred by the DEVELOPER prior to DDA approval and execution shall be absorbed entirely by DEVELOPER with the exception of the costs specified under Section II G (1)(b) of this AGREEMENT. B. Review and Approval by the CDC of all Discretionary Findings and Conclusions The duty of the CDC to dispose of the parcel comprising the Sf1E shall be conditioned upon the successful review and approval of all necessary findings and conclusions which the CDC BOARD is required to make, including all necessary findings and determinations required under CEQA, state and local land use provisions, and the California Community Redevelopment Law. As to any matter which the CDC may be required to exercise its unfettered discretion in advancing the PROJECT to completion, neither anything contained herein, nor to be contained in the DDA shall obligate the CDC to exercise its discretion in any particular manner, and any exercise of discretion reserved hereunder or required by law, shall not be deemed to constitute a breach of CDC duties under this AGREEMENT. 5 SDCA_280013.2 C. No Pre -Commitment by the CDC By its execution of this AGREEMENT, the CDC is not committing itself to or agreeing to undertake any activity requiring the subsequent exercise of discretion by the CDC, or any department thereof including, but not limited to, the approval and execution of a DDA; the proposal, amendment, or approval of any land use regulation governing the SITE; the provision of any financial assistance for the development of any public or private interest in real property; the acquisition of real property or any other property interest; or any other such activity. This AGREEMENT does not constitute a disposition of property or exercise of control over property by the CDC and does not require a public hearing. CDC execution of this AGREEMENT is merely an agreement to enter into a period of exclusive negotiations according to the terms hereof, reserving final discretion and approval by the CDC as to any proposed DDA and all proceedings and decisions in connection therewith. IV. THE DEVELOPER A. Developer Experience As a condition precedent to the CDC's execution of this AGREEMENT, DEVELOPER shall have submitted to the CDC a detailed description of the development experience of the DEVELOPER and its principals, associates, employees, partners, and joint ventures. B. Offices of the Developer The principal offices of DEVELOPER are located at: San Diego Habitat for Humanity 10222 San Diego Mission Road San Diego, CA 92108 The Project Manager for the DEVELOPER will be: Cheryl Keenan, Executive Director Other prime developers, employees, consultants, or representatives who are proposed to be directly involved in the Project will be determined by DEVELOPER and submitted to the CDC upon any such determination. C. Full Disclosure The DEVELOPER shall maintain full disclosure to the CDC of its principals, officers, stockholders, partners, joint ventures, and all other pertinent information concerning the DEVELOPER. 6 SDCA_280013.2 D. Assignment The DEVELOPER without prior written approval of the CDC may not assign this AGREEMENT. The CDC agrees that, notwithstanding the foregoing, the DEVELOPER may assign its rights under this AGREEMENT to a corporation, trust, or partnership of which the DEVELOPER owns the majority beneficial interest and operational control. E. Progress 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. V. ENVIRONMENTAL REQUIREMENTS The DEVELOPER at CDC's expense shall prepare all necessary environmental documents as required by the California Environmental Quality Act (public Resources Code Section 21,000 et seq.) and local regulations, for certification by the City. The DEVELOPER agrees to cooperate with the City and the CDC, as requested, to help determine the environmental impact of the proposed development and to prepare any other additional documents as may be needed to complete environmental review for the development of the PROJECT on the SITE. VI. REAL ESTATE COMMISSIONS The CDC has not engaged a broker, agent, or finder in connection with this transaction. As such, the CDC will not be responsible for any claims by a broker, agent or finder, and the DEVELOPER agrees to defend, indemnify, protect and hold the CDC harmless from any claim by any broker, agent, or finder retained by the DEVELOPER. VII. GENERAL PROVISIONS A. Legal Actions 1. Institution of Legal Actions In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover actual damages for any default, or to obtain any other remedy consistent with the purposes of this AGREEMENT; provided, however, that Paragraph C of this Part VIII shall supersede any conflicting provisions of this Paragraph A.1. Such legal actions must be instituted and maintained in the Superior Court of the County of San Diego, State of California, or in any other appropriate court in that county. 2. Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this AGREEMENT. 7 SDCA_280013.2 3. Acceptance of Service of Process In the event that any legal action is commenced by the DEVELOPER against the CDC, service of process on the CDC shall be made by personal service upon the Executive Director or Secretary of the CDC, or in such other manner as may be provided by law. In the event that any legal action is commenced by the CDC against the DEVELOPER, service of process on the DEVELOPER shall be made by personal service upon the DEVELOPER or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. B. Rights and Remedies are Cumulative Except as otherwise expressly stated in this AGREEMENT, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. C. Specific Performance as Developer's Exclusive Remedy Subject to the DEVELOPER'S right to terminate this AGREEMENT in accordance with the terms of Paragraph E of this Part VIII, the DEVELOPER'S exclusive remedy for an uncured CDC default under this AGREEMENT is to institute an action for specific performance of the terms of this AGREEMENT, and in no event shall the DEVELOPER have the right, and the DEVELOPER expressly waives the right, to seek monetary damages of any kind (including but not limited to actual damages, economic damages, consequential damages, or lost profits) from the CDC in the event of a default by the CDC under this AGREEMENT or any action related to this AGREEMENT. Notwithstanding the foregoing, the DEVELOPER shall retain the right to seek a writ of mandate in the event of any final denial by the CDC of any CDC permit or approval pertaining to the PROJECT. D. Attorney's Fees If either party to this AGREEMENT is required to initiate or defend litigation in any way connected with this AGREEMENT, the prevailing party in such litigation in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to its actual and reasonable attorney's fees. If either party to this AGREEMENT is required to initiate or defend litigation with a third party because of the violation of any terms or provision of this AGREEMENT by the other party, then the party so litigating shall be entitled to its actual and reasonable attorney's fees from the other party to this AGREEMENT. As used herein, the term "attorney's fees" shall include attorney's fees incurred related to the foregoing described litigation and for any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, retaining expert witnesses, taking depositions and discovery, and all other necessary costs incurred in such litigation. All such fees shall be deemed to 8 SDCA 280013.2 have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. The parties hereto acknowledge and agree that each such party shall bear its own legal costs incurred in connection with the negotiation, approval, and execution of this AGREEMENT. E. Termination Rights Notwithstanding the nominal EXCLUSIVE NEGOTIATION PERIOD hereinabove set forth, either party may terminate this AGREEMENT if the other party has materially defaulted in its obligations herein set forth, and the terminating party has provided the defaulting party with written notification of such determination, and the defaulting party has refused to cure same. The written notification shall set forth the nature of the actions required to cure such default if curable. The defaulting party shall have thirty (30) days from the date of the written notification to cure such default. If such default is not cured within the thirty (30) days, the termination shall be deemed effective. For purposes of this paragraph, the parties hereby acknowledge that time is of the essence. Each party shall also have the right to terminate this AGREEMENT in the event that (a) the CDC or the DEVELOPER determines that the PROJECT is infeasible, based on financial or environmental impact considerations, or not in the public interest; or (b) the parties reach an impasse in their negotiation of the DDA which cannot be resolved after good faith efforts. Upon such a termination, the CDC shall return the BALANCE OF DEVELOPER'S DEPOSIT, if any, to the DEVELOPER. F. Indemnity The DEVELOPER shall indemnify, protect defend and hold harmless the CDC and the City and the CDC's and the City's respective elected officials, officers, employees, representatives, members, and agents from and against any and all challenges to this AGREEMENT, or any and all losses, liabilities, damages, claims or costs (including attorneys' fees) arising from DEVELOPER'S negligent acts, errors, or omissions with respect to its obligations hereunder or the SITE, excluding any such losses arising from the sole negligence or sole willful misconduct of the CDC or the conduct of third parties outside the control of the DEVFT OPER. This indemnity obligation shall survive the termination of this AGREEMENT. Notwithstanding the foregoing, in the event of a third party challenge to the validity of this AGREEMENT, DEVELOPER shall have the option to terminate this AGREEMENT in lieu of its indemnity obligation. G. Notices Demand and Communications Between the Parties Formal notices, demands, and communications between CDC and DEVELOPER shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) or by mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: 9 SDCA_280013.2 To CDC: With copy to: To Developer: Community Development Commission of National City (CDC) Attn: Brad Raulston, Executive Director 1243 National City Boulevard National City, CA 91950-4301 City of National City Attn: George Eiser, City Attorney 1243 National City Boulevard National City, CA 91950-4301 San Diego Habitat for Humanity Attn: Cheryl Keenan, Executive Director 10222 San Diego Mission Road San Diego, CA 92108 Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. H. Nonliability of City and CDC Officials and Employees No member, official, employee, or contractor of the City or the CDC shall be personally liable to the DEVELOPER in the event of any default or breach by the CDC or for any amount, which may become due to the DEVELOPER or on any obligations under the terms of the AGREEMENT. I. Interpretation The terms of this AGREEMENT shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this AGREEMENT or any other rule of construction which might otherwise apply. The Part and Paragraph headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this AGREEMENT. J. Entire Agreement, Waivers, and Amendments This AGREEMENT integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this AGREEMENT must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of CDC and DEVELOPER. 10 SDCA_280013.2 K. Counterparts This AGREEMENT may be executed in counterparts, each of which, after all the parties hereto have signed this AGREEMENT, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. L. Successors This AGREEMENT shall be binding upon and shall inure to the benefit of the permitted successors of each of the parties hereto. M. Further Assurances The parties hereto each agree, without further consideration, to execute such other and further documents, and to perform such other and further acts, as may be necessary or proper in order to consummate the transaction set forth in and contemplated by this Agreement. N. Severability In the event any section or portion of this AGREEMENT shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this AGREEMENT. O. Time is of the Essence Time is of the essence for each of the DEVELOPER'S obligations under this AGREEMENT. P. Confidentiality The DEVELOPER acknowledges and agrees that the CDC is a public entity with a responsibility and, in many cases, legal obligation to conduct its business in a manner open and available to the public. Accordingly, any information provided by the DEVELOPER to the CDC with respect to the SHE, the PROJECT or the DEVELOPER may be disclosed to the public either purposely, inadvertently, or as a result of a public demand or order. With respect to any information provided that the DEVELOPER reasonably deems and identifies in writing as proprietary and confidential in nature, the CDC agrees to exercise its best efforts to keep such information confidential. IN WITNESS WHEREOF, the CDC and the DEVELOPER have signed this AGREEMENT on the respective dates set forth below. 11 SDCA_280013.2 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY SAN DIEGO HABITAT FOR HUMANITY By: By: Ron Morrison, Chairman Cheryl Keenan, Executive Director A1-1'LST: By: Brad Raulston, Secretary APPROVED AS TO FORM: By: George Eiser, III CDC Counsel Dated: By: 12 SDCA_280013.2 EXHIBIT 1 RIGHT OF ENTRY AGREEMENT THIS RIGHT OF ENTRY AGREEMENT (hereafter referred to as "Agreement") is made and entered into as of December 19, 2006, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (hereafter referred to as "CDC"), and SAN DIEGO HABITAT FOR HUMANITY, a 501 (c)(3) non-profit corporation (hereafter referred to as "Developer"), with respect to the following: RECITALS A. The CDC and the Developer have entered into an Exclusive Negotiate Agreement, dated as of December 19, 2006, for the negotiation of a disposition and development agreement with respect to certain real property in the City of National City known as Assessor Parcel Number 559-085-08 and 560-233-06, (hereafter referred to as "Property"). B. The Developer desires to perform certain predevelopment work consisting of certain tests, studies, and analyses necessary to evaluate the condition of the Property (hereafter referred to as "Predevelopment Work"). C. The CDC wishes to accommodate the Developer's desire to commence the Predevelopment Work on the Property by granting a right of entry to Developer upon certain terms and conditions. NOW, THEREFORE, for good and valuable consideration, Developer and CDC do hereby agree as follows: 1. Right of Entry. Provided that all of the terms and conditions of this Agreement are fully satisfied, the CDC hereby grants to Developer and its employees, agents and contractors the nonexclusive right to enter upon the Property to perform the Predevelopment Work, and for no other purposes without the prior written approval of the CDC's Executive Director or his designee. This Agreement shall automatically terminate and expire one hundred and eighty (180) days from the date of this Agreement. The term of this Agreement may be extended at the sole and absolute discretion of the CDC Executive Director or his designee for an additional period not to exceed thirty (30) days. It is expressly understood that this Agreement does not in any way whatsoever grant or convey any rights of possession, easement or other interest in the Property to the Developer. 2. Agreement. By execution of this Agreement, Developer agrees for itself and on the behalf of its employees, agents, consultants and contractors as follows: (a) That Developer will not permit any dangerous condition to be created on the Property. -1- Exhibit 1 SDCA_280013.2 (b) That all acts and things done by Developer on the Property will be done in a careful and reasonable manner, in accordance with all federal, state and local laws. (c) That Developer enters the Property entirely at its own cost, risk and expense. (d) That prior to the Developer's entry upon the Property and during the period of this Agreement, there shall be in effect and shall provide satisfactory evidence to the CDC of the following: a. Workers' compensation insurance as required by law; b. Commercial general liability insurance written on an occurrence basis, with a combined single limit of at least One Million Dollars ($1,000,000) consisting of both bodily injury and property damage coverage; and c. Automobile liability insurance, including liability for all owned, hired and non -owned vehicles, with minimum limits of One Million Dollars ($1,000,000) for bodily injury per person, One Million Dollars ($1,000,000) property damage and One Million Dollars ($1,000,000) combined single limit per occurrence. CDC of National City shall be named as an additional insured under the commercial general liability policy. (e) That Developer shall not permit any mechanics', material men's or other liens of any kind or nature (hereafter referred to as "Liens") to be filed or enforced against the Property in connection with the Predevelopment Work. Developer shall indemnify, defend and hold harmless CDC from all liability for any and all liens, claims and demands, together with costs of defense and reasonable attorneys' fees, arising from any Liens. CDC reserves the right, at its sole cost and expense, at any time and from time to time, to post and maintain on the Property, or any portion thereof, or on the improvements on the Property, any notices of non -responsibility or other notice as may be desirable to protect CDC against liability. In addition to, and not as a limitation of CDC's other rights and remedies under this Agreement, should the Developer fail, within ten (10) days of written request from CDC, either to discharge any Lien or to bond for any Lien, or to defend, indemnify, and hold harmless CDC from and against any loss, damage, injury, liability or claim arising out of a Lien, then CDC, at its option, may elect to pay such Lien, or settle or discharge such Lien and any action or judgment related thereto and all costs, expenses and attorneys' fees incurred in doing so shall be paid to CDC by the Developer upon written demand. (f) That Developer shall not have any interest in the Property or be entitled to any reimbursement or repayment for any work performed upon the Property pursuant to -2- Exhibit 1 SDCA_280013.2 this Agreement. Developer shall, at the written request of the CDC, leave the Property in a condition that does not create an unreasonable risk of harm to the public. (g) The Developer shall take all necessary precautions to prevent the import and/or release into the environment of any hazardous materials, which are imported to, in, on or under the Property during the performance of the Predevelopment Work. If hazardous materials are imported onto the Property as a result of the performance of the Predevelopment Work, the Developer shall be solely responsible for removing such imported hazardous materials in conformance with all Governmental Requirements. The Developer shall report to the CDC, as soon as possible after each incident, any unusual or potentially important incidents with respect to the environmental condition of the Property. 3. Indemnity. Developer hereby agrees to defend, indemnify and hold the CDC and its officers, officials, members, employees, agents and representatives, harmless from and against any and all loss, damage, injury, liability, claim, cost or expense (including, without limitation, reasonable attorneys' fees, expert witness fees, court costs, and expenses) arising from or attributable to the activities of Developer or any of its employees, agents, consultants or contractors upon the Property pursuant to this Agreement. All use of and entry upon the Property shall be at the sole cost, risk and expense of the Developer. 4. Miscellaneous. (a) Choice of Law. This Agreement is to be governed by, and construed in accordance with, the laws of the State of California. (b) Remedies. Either party shall, in addition to all other rights provided herein or as may be provided by law, be entitled to the remedies of specific performance and injunction to enforce its rights hereunder, except to the extent expressly provided to the contrary in this Agreement. All rights and remedies under this Agreement are cumulative and no one of them shall be exclusive of any other, and each party shall have the right to pursue any one or all of such rights and remedies or any other remedy which may be provided by law, whether or not stated in this Agreement, except to the extent expressly provided to the contrary in this Agreement. (c) Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. (d) Non -Liability of Public Officials. No officer, employee, member, agent or representative of the CDC shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by the CDC, or for any amount which may become due to Developer or its successor, or for any breach of any obligation of the terms of this Agreement. -3- Exhibit 1 SDCA_280013.2 IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date first set forth above. CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Brad Raulston, Executive Director DEVELOPER: SAN DIEGO HABITAT FOR HUMANITY By: Cheryl Keenan, Executive Director By: -4- Exhibit 1 SDCA_280013.2