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HomeMy WebLinkAbout2007 CON CDC Marina Gateway Dev. Co. - ENAEXCLUSIVE NEGOTIATION AGREEMENT By and Between COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY And MARINA GATEWAY DEVELOPMENT COMPANY, LLC THIS EXCLUSIVE NEGOTIATION AGREEMENT (hereafter referred to as "AGREEMENT") is entered into this 19th day of June, 2007, 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 MARINA GATEWAY DEVELOPMENT COMPANY, LLC, a California limited liability corporation (hereafter referred to as "DEVELOPER"), on the terms and provisions set forth below. RECITALS WHEREAS, on July 18, 1995, the City Council of the City of National City adopted the Harbor District Redevelopment Plan Amendment for the City of National City ("REDEVELOPMENT PLAN") that expanded the National City Redevelopment Project Area ("PROJECT AREA"); and WHEREAS, the CDC is the owner of certain real property within the Project Area: (i) Assessor Parcel Number 559-118-02 and the adjacent property roughly described as running from the southeast corner of the APN parcel, along the western edge of the Caltrans right of way, to the intersection of the projection of the centerline of McKinley Avenue; and then, along the centerline projection, to the projection of the northern boundary of the Site; and then, along the northern boundary projection, to the northeast corner of the Site and (ii) Assessor Parcel Numbers559-117-04, 05, 06, 07, 12, in National City (further described in `EXHIBIT A'), as further described herein ("SITE"); and WHEREAS, on May 18, 2004, 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 developing the SITE to include two (2) mid to high quality level restaurants and other allowed commercial uses under the current zoning (hereafter referred to as "PROJECT"); and WHEREAS, the CDC desires to increase the number of restaurant and commercial businesses in the PROJECT AREA as stated in the REDEVELOPMENT PLAN, and the DEVELOPER agrees to develop three (3) mid to high level restaurants: two (2) on the SITE and one (1) on the Marina Gateway Hotel project site or another project that may be determined to be more feasible. In addition, the DEVELOPER agrees not to object or otherwise impede the formation of both a Tourism Business Improvement District pursuant to the Parking and Business Improvement District Law of 1994, plus a Landscape and Lighting Maintenance District to pay for the installation, maintenance and operation of high quality landscaping and lighting in the public areas adjacent to the SITE and Marina Gateway Hotel project site; and WHEREAS, the contemplated project would be designed to use slab on grade construction or other techniques that will minimize the need for significant excavation and will avoid underground parking or similar improvements; and WHEREAS, the CDC and the DEVELOPER desire to enter into this AGREEMENT to initiate exclusive negotiations for up to three hundred sixty (360) days (hereafter referred to as "EXCLUSIVE NEGOTIATION PERIOD") to allow the DEVELOPER to (i) undertake due diligence activities regarding the PROJECT; (ii) design the PROJECT; (iii) discern potential tenants' respective appetites for the PROJECT; (iv) establish the responsibilities, schedule, and financial parameters for developing the PROJECT; (v) negotiate the purchase price of the SITE; and (vi) negotiate a Disposition and Development Agreement (hereafter referred to as "DDA"); and WHEREAS, the AGREEMENT supersedes any agreement made prior to the entering of this AGREEMENT. NOW, THEREFORE, in consideration of the recitals and mutual covenants and conditions contained herein, the parties hereto agree as follows: I. SITE The SITE constitutes the real property that is the subject of this AGREEMENT. The SITE is Assessor Parcel Number 559-118-02 and the adjacent property roughly described as running from the southeast comer of the APN parcel, along the western edge of the Caltrans right of way, to the intersection of the projection of the centerline of McKinley Avenue; and then, along the centerline projection, to the projection of the northern boundary of the Site; and then, along the northern boundary projection, to the northeast corner of the Site of Block 233, located on the north east corner of the Bay Marina Drive and Cleveland Avenue intersection and Assessor Parcel Numbers 559-117- 04, 05, 06, 07, 12 of Block 280 in National City, located on the north west corner of the Bay Marina Drive and Cleveland Avenue intersection within National City, CA. The exact square footage of the SITE will be determined during the Site planning activities outlined below. 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"). B. First Negotiation Period During the first two hundred seventy (270) days of the EXCLUSIVE NEGOTIATION PERIOD (hereafter referred to as "FIRST NEGOTIATION PERIOD"), 2 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. Development concept including a phased build out of the SITE; 3. Required on and off -site infrastructure improvements; 4. Project, infrastructure, and state and local regulatory requirement costs; 5. Prepare a market feasibility analysis for the PROJECT; 6. Funding sources for the PROJECT; 7. The parties/entities responsible for the various PROJECT development activities; and 8. 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: 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 Site development; 2. DEVELOPER'S timely review of preliminary title report information prepared for the SITE; 3. DEVELOPER'S timely investigation of the SITE. 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. 3 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 DEVELOPER shall prepare and process with the City any necessary land use entitlements, environmental studies and reports. 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 ninety (90) 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 DEVELOPER or 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, the land use entitlements and the environmental studies, if the CDC's Executive Director determines additional time is reasonably required. F. Execution of DDA After the DEVELOPER and the CDC Executive Director agree upon a proposed 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 4 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; b. Upon acceptance of the Development Program and verification of DEVELOPER financial commitments to both purchase and develop the PROJECT, prepare a draft of a DDA. 2. Developer Obligations a. Use its best efforts to investigate the SITE; 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. DEVELOPER DEPOSIT Upon the approval of this AGREEMENT by the CDC BOARD, the DEVELOPER shall deposit with the CDC Twenty Five Thousand Dollars ($25,000) (hereafter referred to as "DEVELOPER'S DEPOSIT"), in the form of a cashier's or certified check, or wire transfer, payable to the CDC. The CDC agrees to hold the DEVELOPER'S DEPOSIT in the CDC's account and make disbursements therefrom only pursuant to the terms and provisions of this AGREEMENT. DEVELOPER agrees that the CDC may use the DEVELOPER'S DEPOSIT to reimburse itself for reasonable and actual attorneys' fees, consultant fees, appraisal fees, title reports, and any other related fees (excluding CDC staff costs) and costs (hereafter 5 referred to as "DDA NEGOTIATION COSTS") incurred by the CDC in (i) negotiating and preparing this AGREEMENT, (ii) reviewing any documents submitted in furtherance of this AGREEMENT and/or DEVELOPER'S proposal to develop the PROJECT, (iii) any negotiations relating to the DDA and any related documents, and (iv) drafting the DDA or any other related documents. The DEVELOPER shall be responsible for any additional costs and deposit the funds within ten (10) days of written request from CDC. CDC shall submit to DEVELOPER invoices reasonably detailing DDA NEGOTIATION COSTS CDC has incurred at the time it submits a reimbursement notice to the DEVELOPER. CDC shall be free to withdraw funds from the DEVELOPER'S DEPOSIT, as needed, provided that it has submitted such invoices to the DEVELOPER. The $25,000 DEVELOPER'S DEPOSIT, less the DDA NEGOTIATION COSTS incurred to date (hereafter referred to as "BALANCE OF DEVELOPER'S DEPOSIT"), if any, shall be refundable to DEVELOPER in the event this AGREEMENT is terminated prior to or at the conclusion of the EXCLUSIVE NEGOTIATION PERIOD. In the event the DDA is fully executed and approved by all requisite action, the BALANCE OF DEVELOPER'S DEPOSIT, if any, shall be applied to the DEVELOPER'S purchase price for the SITE if the parties consummate the proposed transaction. IV. RETENTION OF DISCRETION TO APPROVE THE PROJECT AND DDAi 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 processing, design and developmental costs incurred by the DEVELOPER prior to DDA approval and execution shall be absorbed entirely by DEVELOPER. 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 SITE 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. 6 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. V. 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: Marina Gateway Development Company, LLC c/o MRW Group, Inc. 922 West 23rd Street National City, CA 91950 The Project Manager for the DEVFI OPER will be: We need a person's name in this spacc.MRW Group, Inc. 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 non -confidential information concerning the DEVELOPER. D. Assignment 7 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. VI. ENVIRONMENTAL REQUIREMENTS A. The DEVELOPER shall prepare all necessary environmental documents, conventionally undertaken by developers, and 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; provided, however, that the CDC and the City shall not incur costs or expenses in collection therewith nor will CDC or City reimburse the DEVELOPER for costs incurred related to preparing these materials. B. 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 8 The laws of the State of California shall govern the interpretation and enforcement of this AGREEMENT. 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 9 investigating such action, retaining expert witnesses, taking depositions and discovery, and all other necessary costs incurred in such litigation. All such fces shall be deemed to 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 to the PROJECT, and any and all other 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. 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 or to the PROJECT, 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: To CDC: Community Development Commission 10 With copy to: To Developer: With copies to: 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 Marina Gateway Development Company, LLC Attn: MRW Group, Inc., Michael Weber 922 West 23rd Street National City, CA 91950 MRW Group, Inc. Attn: Ivar Leetma 922 West 23rd Street National City, CA 91950 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 11 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. 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. 12 IN WITNESS WHEREOF, the CDC and the DEVELOPER have signed this AGREEMENT on the respective dates set forth below. COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY By: Ron Morrison, Chian ATTEST: By: Bradretary APPROVED AS TO FORM: By: /� £t. m George Eiser, I CDC Counsel Dated: Manna Gateway Development Company, LL.0 By MRW Group, Inc., Managing Member By: Its 11935iiin By - Its 13 acA EXHIBIT "A" RIGHT OF ENTRY AGREEMENT THIS RIGHT OF ENTRY AGREEMENT (hereafter referred to as "Agreement") is made and entered into as of November 21, 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 MARINA GATEWAY DEVELOPMENT COMPANY, LLC, a California limited liability 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 May 19, 2007, 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 559-118-02 and 559-117-04, 05, 06, 07, 12, 16, 17 (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 three hundred and sixty (360) 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 one hundred eighty (180) 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 "A" (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 "A" 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 "A'' 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 an, a public body, corporate and politic By: Brad Raulston, Executive Director DEVELOPER: opment Company, LLC Managing Member Its ' W-.WLbc'✓L Pt :Ct rwt By: 1 Its _J.V A Learrrwi-, S� -4- EXHIBIT "A" RESOLUTION NO. 2007 — 147 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY APPROVING AN EXCLUSIVE NEGOTIATING AGREEMENT WITH MARINA GATEWAY DEVELOPMENT COMPANY, LLC FOR THE PROPERTY LOCATED AT 720 WEST 23rd STREET AND THE BLOCK WITHIN BAY MARINA DRIVE, HARRISON AVENUE, 23'd STREET, AND CLEVELAND AVENUE (APNs 559-117-04, 05, 06, 07, 12, 16) WHEREAS, the Community Development Commission of the City of National City (CDC) owns property located within the boundaries of the Harbor District and National City Redevelopment Project Area; and WHEREAS, the CDC desires to increase the number of restaurant and commercial businesses within the National City Redevelopment Project Area; and WHEREAS, on May 18, 2004, Marina Gateway Development Company, LLC was selected as the preferred developer for the property located at the southeast corner of Bay Marina Drive and Harrison Avenue, and on June 1, 2004, the CDC and Marina Gateway Development Company, LLC entered into an Exclusive Right to Negotiate for the property at 720 West 23rd Street; and WHEREAS, Marina Gateway Development Company, LLC desires to expand the scope and scale of the project to develop two mid to high quality level restaurants, one on the 720 West 23rd Street site and one on the property located between Bay Marina Drive, Harrison Avenue, 23rd Street, and Cleveland Avenue. 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 Marina Gateway Development Company, LLC for the property at 720 West 23rd Street and block between Bay Marina Drive, Harrison Avenue, 23rd Street, and Cleveland Avenue. Said Exclusive Negotiation Agreement is on file in the office of the City Clerk. PASSED and ADOPTED this 19th day of Jun APPROVED AS TO FORM: George . Eiser, III Legal Counsel on Morrison, Chairman Passed and adopted by the Community Development Commission of the City of National City, California, on June 19, 2007, by the following vote, to -wit: Ayes: Commissioners Morrison, Natividad, Parra, Ungab, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Chairman, Community Development Commission Secretary, CT'*•' ievelopment Commission By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2007-147 of the Community Development Commission of the City of National City, Califomia, passed and adopted on June 19, 2007. Secretary, Community Development Commission By: Deputy City of National City, California COMMUNITY DEVELOPMENT COMMISSION AGENDA STATEMENT 33 MEETING DATE June 19, 2007 AGENDA ITEM NO. ITEM TITLE APPROVING AN EXCLUSIVE NEGOTIATING AGREEMENT BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION AND MARINA GATEWAY DEVELOPMENT COMPANY, LLC FOR THE PROPERTY LOCATED AT 720 WEST 23' STREET AND THE BLOCK WITHIN BAY MARINA DRIVE, HARRISON AVENUE, 23rd STREET AND CLEVELAND AVENUE (APN # 559-117-04, 05, 06, 07, 12, 16) PREPARED BY Colby Young (Ext. 4297) Redevelopment Intern DEPARTMENT Redevelopment Division EXPLANATION The mentioned CDC owned property is within the National City Redevelopment Project Area. The CDC desires to increase the number of restaurants and commercial businesses within the Redevelopment Project Area and Manna Gateway Development Company, LLC desires to purchase the property to develop two (2) mid to high level quality restaurants. The Exclusive Negotiation Agreement will initiate exclusive negotiations for up to three hundred and sixty (360) days to allow the Marina Gateway Development Company, LLC to (i) undertake due diligence activities regarding the restaurant development; (ii) design the restaurants; (iii) establish the responsibilities, schedule, and financial parameters for developing the restaurants; (iv) negotiate the purchase price of the property; and (v) negotiate a Disposition and Development Agreement. The Exclusive Negotiation Agreement in no way commits to a future project. Environmental Review Not applicable. Financial Statement Upon approval of the Exclusive Negotiation Agreement, Marina Gateway Development Company, LLC shall deposit with the CDC Twenty Five Thousand Dollars ($25,000) in the form of a cashier's or certified check, or wire transfer, payable to the CDC. Half of the deposit ($12,500) shall be refundable to Marina Gateway Development Company, LLC if there is a material default by the CDC of its obligations pursuant to the Exclusive Negotiation Agreement. Account No 1 STAFF RECOMMENDATION Adopt the resolution. BOARD / COMMISSION RECOMMENDATION Not applicable. ATTACHMENTS Resolution No. " 0 () rk . r"' 1. Proposed Exclusive Negotiation Agreement 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 July 25, 2007 Mr. Michael Weber Marina Gateway Development Company, LLC MRW Group, Inc. 922 West 23rd Street National City, CA 91950 Dear Mr. Weber, On June 19, 2007, Resolution No. 2007-147 was passed and adopted by the Community Development Commission of National City, approving an exclusive negotiating agreement with Marina Gateway Development Company, LLC. We are enclosing for your records a certified copy of the above Resolution and a fully original executed agreement. Sincerely, Michael R. Dalla, CMC City Clerk Enclosure cc: Community Development Commission Ivar Leetma, MRW Group, Inc. ® Recycled Paper