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HomeMy WebLinkAbout2008 CON CDC NCSDI, Derr Family Ventures, Derco Properties - ENA Harbor Drive - In Site/RCP SiteEXCLUSIVE NEGOTIATION AGREEMENT By and Between COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, NCSDI NO. 1, LLC, DERR FAMILY VENTURES LP, and DERCO PROPERTIES, LLC. THIS EXCLUSIVE NEGOTIATION AGREEMENT (hereafter referred to as "AGREEMENT") is entered into this 19th day of August, 2008, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY. a public body. corporate and politic (hereafter referred to as "CDC"). NCSDI NO. 1, LLC, a California limited liability company (hereafter referred to as "DEVELOPER"). DERR FAMILY VENTURES LP, and DERCO PROPERTIES, LLC. (DERR FAMILY VENTURES LP and DERCO PROPERTIES. LLC collectively referred to as "PROPERTY OWNERS") on the terms and provisions set fbrth below. RECITALS WHEREAS, the DEVELOPER is acquiring an option to lease certain real properties owned by the PROPERTY OWNERS, commonly referred to as the Harbor Drive-in site, constituting roughly 26 acres abutting State Route 54 partially within the City of National City Redevelopment Project area (a portion of D Avenue and Assessor Parcel Numbers 562-321-05, 562-322-01, 02, 25, 26. 27, 28 , 30, 31) and partially within the City of Chula Vista (a portion of D Avenue and Assessor Parcel Numbers 562-321-06); and, WHEREAS, it is those portions of the above described properties which are located within the City of National City, more particularly described as Assessor Parcel Numbers 562- 321-05, 562-322-01, 02, 25, 26, 27, 28, 30, 31 ("SITE") that are intended to be the subject of this Exclusive Negotiation Agreement; and, WHEREAS, the PROPERTY OWNES desire to have the DEVELOPER pursue development of the SITE and consents to DEVELOPER pursuing and engaging in this AGREEMENT; and, WHEREAS, the Community Development Commission ("CDC") owns 1.34 acres on National City Boulevard commonly referred to as the RCP site (Assessor Parcel Number 562- 321-08) ("CDC SITE"); and. WHEREAS, the DEVELOPER is interested in assembling this site, plus adjacent lands within the City of National City and the City of Chula Vista ("OTHER SITES') to develop a shopping center featuring at least one major retail tenant, other retailers and restaurants totaling approximate floor area of 300,000 square feet ("PROJECT"); and, WHEREAS, the CDC and the DEVELOPER desires to enter into this AGREEMENT to initiate exclusive negotiations for up to three hundred and sixty five (365) days (hereafter -1- S3013.005/Sudberry ENA Final 8 4 08 (3) Doc referred to as "EXCLUSIVE NEGOTIATION PERIOD") to allow the DEVELOPER to (i) undertake due diligence activities regarding the PROJECT; (ii) design the PROJECT; (iii) establish the responsibilities, schedule, and financial parameters for developing the PROJECT for the part of the PROJECT which is located within the City; (iv) negotiate the purchase price of the CDC SITE; (v) assemble OTHER PROPERTIES; and (vi) 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: I. SITE The SITE constitutes the real property that is the subject of this AGREEMENT. It is the intent of the parties that the SITE is comprised only of properties located within the City of National City. The SITE is that portion of D Avenue located within the City of National City, hounded by the northerly most property line of the Derr property and the S.R. 54 right of way. and Assessor Parcel Numbers 562-321-08, 562-322-01, 02. 25, 26. 27. 28, 30, 31 consisting of approximately 24 acres in National City, California, located on the east side of National City Boulevard from State Route 54 to the southerly property line of the Keystone Trailer Park. The SITE is shown on Exhibit A. The exact square footage of the SITE will be determined during the site planning activities outlined below. 11. 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 three hundred and sixty five (365) days thereafter. B. First Negotiation Period During the first one hundred eighty (180) 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; SDCA_280013.2 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: 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: 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 Early 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. 5. CDC's efforts to negotiate a coordinated processing of the portion of the PROJECT that lies within the City of National City and the portion of the PROJECT that lies within the City of Chula Vista. 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 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 -3- SDCA_280013.2 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 one hundred eighty (180) 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. or designee, in his or her sole discretion, may extend the Negotiation Period for up to an additional three hundred and sixty five (365) 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 staff tentatively agree upon the DDA, the EXCLUSIVE NEGOTIATION PERIOD may be extended for up to an additional one hundred eighty (180) days at the discretion of the CDC's Executive Director. or designee (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; Process site development, environmental and entitlement applications through the City's Planning Commission and City Council; and. 3. Present the DDA to the Community Development Commission Board for approval at a Community Development Commission meeting. 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, with the exception of continuing negotiations with the City of Chula Vista related to the possible formation of the Boundary Planning Agency discussed below in Section II.H., unless it is with the expressed consent of DEVELOPER. 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 such communication to follow reasonable negotiation procedures, including meetings, telephone conversations, and -4- SDCA_280013.2 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'S 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; h. Upon acceptance of the Development Program and verification of DEVELOPER'S financial commitments to both purchase and develop the PROJECT, prepare a first draft ofa DDA; Developer Obligations a. Use its best efforts to investigate the SITE; h. Submit SITE plans. elevations, schematic drawings, detailed Project development costs, Project pro fonnas 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. H. Possible Boundary Planning Agency. The City of National City and the City of Chula Vista have been working towards entering into an agreement in which the cities would agree to the joint exercise of powers for the purposes of planning and implementing any land use entitlements and uses of the encompassed parcels. The parcels anticipated to be included are the parcels subject to this ENA (referred to as the SITE). the parcels identified as being located in the City of Chula Vista, and the CDC SITE. The agency formed pursuant to such an agreement is expected to he called the Boundary Planning Agency. If the two cities execute such an agreement and form the Boundary Planning Agency, the CDC may assign this ENA to the Boundary Planning Agency. -5- SDCA_280013.2 III. DEVELOPER'S DEPOSIT Upon the approval of this AGREEMENT by the CDC BOARD, the DEVELOPER shall deposit with the CDC Twenty Five Thousand Dollars (S25.000) (hereafter referred to as "DEVELOPER'S DEPOSIT.). S13,500 of which is non- refundable. 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 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. 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. Half of the S25.000 DEVELOPER'S DEPOSIT, without deduction of the DDA NEGOTIATION COSTS. shall be refundable to DEVELOPER if there is a material default by the CDC of its obligations pursuant to this AGREEMENT. The S25,000 DEVELOPER'S DEPOSIT. less the DDA NEGOTIATION COSTS incurred to date (hereafter referred to as "BALANCE OF DEVELOPER'S DEPOSIT.). it' any. shall be refundable to DEVELOPER in the event this AGREEMENT is terminated prior to or at the conclusion of the EXCLUSIVE NEGOTIATION PERIOD and prior to the execution of the DDA in exchange for DEVELOPER granting all of its rights. title and interest in all studies and reports in connection with the SiTE to CDC to the extent DEVELOPER is legally permitted to do so. 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 CDC SITE if the parties consummate the proposed transaction. Should costs to the CDC of negotiating the DDA exceed S25,000. DEVELOPER will reimburse the CDC fbr such costs within 30 days of receiving a written invoice from the CDC by regular mail. IV. 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 -6- SDCA_280013.2 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 it owns within 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 deterninations 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. 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 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 terns 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's 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 -7- SDCA_280013.2 joint ventures as well as proof of a right to develop this property from the property owners — Derr Family Ventures Ltd Partnership and Catherine L. Burdick IACCURATE4 B. Offices of the Developer The principal offices of DEVELOPER are located at: Sudherry Properties, Inc. 5465 Morehouse Drive, Suite 260 San Diego CA 92121 The Project Manager for the DEVELOPER will be: Mark Radelow of Sudberry Properties, Inc. Other employees. consultants, or representatives of DEVELOPER who are proposed to he directly involved in the Project will be identified by DEVELOPER and submitted to the CDC. 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. D. Assignment The DEVELOPER may not assign this Agreement without prior written approval of the CDC. The CDC, in its sole discretion, may assign its interests and obligations to the Boundary Planning Agency. The CDC agrees that, notwithstanding the foregoing. the DEVELOPER may assign their rights under this AGREEMENT to (i) a corporation. trust. limited liability company or partnership of which the DEVELOPER or Sudberry Properties, Inc. (or affiliates thereof) owns the majority beneficial interest and operational control or (ii) DERCO or an affiliate owned and controlled by the Derr Family. E. Progress Reports The DEVELOPER agrees to provide, upon request, written reports advising the CDC on progress and/or problems with the proposed development every thirty (30) days during the tern of the AGREEMENT. VI. ENVIRONMENTAL REQUIREMENTS The DEVELOPER 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 -8- SDCA_280013.2 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. VII. 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. VIII. 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. 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 he valid whether made within or without the State of California. DEVELOPER's agent for service of process is Colton T. Sudberry, whose address is 5465 Morehouse Drive, Suite 260, San Diego, CA 92121-4714. -9- SDCA_280013.2 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 Perfonnance 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 terns 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 ices. 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 he entitled to its actual and reasonable attorney's fees from the other party to this AGREEMENT. As used herein. the term "attorney's ices" shall include attorney's tees 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 tin - 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 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 hear 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 -10- SDCA_280013.2 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; or (c) the DEVELOPER terminate the Letter of Intent between them related to development of this PROJECT for any reason. Upon such a termination, the CDC shall return the BALANCE OF DEVELOPER'S DEPOSIT. if any. to the DEVELOPER, in care of their Managing Member. 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: To CDC: Community Development Commission 1243 National City Boulevard National City, CA 91950 Attn: Brad Raulston -11- SDCA_280013.2 With copy to: To Developer: With copy to: To DERCO: With copy to: CDC Attorney 1243 National City Boulevard National City, CA 91950 Attn: George Eiser NCSDI No. 1, LLC c/o Sudberry Properties, Inc. 5465 Morehouse Drive, Suite 260 San Diego CA 92121 Attn: Colton T. Sudberry Law Offices of William J. Harris 777 South Highway 101, Suite 123 Solana Beach, CA 92075 Attn: William J. Harris, Esq. 4068 Rogers Road Spring Valley CA 91977 Attn: Michael Derr [CORRECT NOTICE INFORMATION?I Law Offices of Kathryn Albergotti 2605 Vale Crest Golden Valley, MN 55422 Attn: Kathryn Albergotti, Esq. 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 he 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 fbr any amount, which may become due to the DEVELOPER or on any obligations under the teens 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 -12- SDCA_280013.2 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 he 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 he unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may he 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 DEVELOPERS 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 -13- SDCA_280013.2 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 he 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 hest 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. COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NAT1L CITY By: Ron Morrison. firma ATTE By/ Chris Zap cretary APPR By: VED AS TO FORM: George Eis Dated: kt I CDC ounsel NCSDI NO. 1, LLC, a California limited liability company By: Sudberry Development, Inc., a California cation its Mana By: ton T. Sudberry President DERR FAMILY VENTURES LIMITED PARTNERSHIP By: Terry G. Derr DERCO PROPERTIES LLC By: Michael Derr -14- SDCA_280013.2 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 CI)C and the DEVELOPER have signed this AGREEMENT on the respective dates set forth below. COMMUNITY DEVELOPMENT COMMISS OF THE CITY OF NA'I'IO IT By: Ron Morrison, Chairman ATTEST: By: Chris Zapata, Secretary APPROVED AS TO FORM: By: George Eiser, III CDC Counsel Dated: NCSDI NO. 1, LLC, a California limited liability company By: Sudberry Development, Inc., a California corporation its Manager By: Colton T. Sudberry President DERR F PARTN By: Terry G. Derr -14- rIILY VENTURES LIMITED SHIP Michael Derr RESOLUTION NO. 2008 — 168 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY APPROVING AN EXCLUSIVE NEGOTIATION AGREEMENT BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY; NCDSI NO. 1, LLC.; DERR FAMILY VENTURES LP; AND DERCO PROPERTIES LLC WHEREAS, NCDSI No. 1, LLC; Derr Family Ventures, LP; and Derco Properties, LLC (the "Developers") are interested in developing certain real properties owned by the Derr Family commonly referred to as the Harbor Drive-in site, constituting roughly 26 acres abutting State Route 54 partially within the City of National City Redevelopment Project area (a portion of "D" Avenue and Assessor Parcel Numbers 562-321-05, 562-322-01, 02, 25, 26, 27, 28 , 30, 31) ("SITE"), and partially within the City of Chula Vista (a portion of "D" Avenue and Assessor Parcel Number 562-321-06); and, WHEREAS, the Community Development Commission (CDC) owns 1.34 acres of vacant land, which is suitable for redevelopment (APN 562-321-08) within the National City Redevelopment Project; and WHEREAS, due diligence activities under an Exclusive Negotiation Agreement are consistent with the goals of the Redevelopment Plan for the National City Redevelopment Project and provide the potential to meet objectives of the National City Strategic Plan; and WHEREAS, the Developers and the Community Development Commission wish to enter an Exclusive Negotiation Agreement for a period of 365 days. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of the City of National City hereby approves the Exclusive Negotiation Agreement by and between the Community Development Commission of the City of National City; NCDSI No. 1, LLC.; Derr Family Ventures, LP; and Derco Properties, LLC. Said Agreement is on file in the office of the City Clerk. PASSED and ADOPTED this 19th dTy of August 8. on Morrison, Chairman ATTEST: Brad Raulston, Secretary APPROVED AS TO FORM: 7D, ID George H. Eiser, III Legal Counsel Passed and adopted by the Community Development Commission of the City of National City, California, on August 19, 2008, 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 Secreta evelopment Commission By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2008-168 of the Community Development Commission of the City of National City, California, passed and adopted on August 19, 2008. Secretary, Community Development Commission By: Deputy City of National City, California COMMUNITY DEVELOPMENT COMMISSION AGENDA STATEMENT MEETING DATE August 19, 2008 AGENDA ITEM NO. 18 ITEM TITLE A resolution approving an Exclusive Negotiation Agreement with NCSDI No. 1, LLC, Derr Family Ventures LP and Derco Properties LLC related to roughly 15 acres of property in National City commonly called the Harbor Drive In site and 1.34 acres on National City Boulevard commonly known as the RCP site, owned by the CDC. PREPARED BY Patricia Beard (ext 4255) Redevelopment Manager 10( DEPARTMENT Redevelopment Division EXPLANATION Derco and Derr Family Ventures own roughly 26 acres of property partially within National City and partially within Chula Vista, commonly known as the Harbor Drive In. The CDC owns a 1.34 acre parcel adjacent to this site commonly known as the RCP site. NCSDI No. 1 LLC managed by commercial developers Sudberry Properties, Inc., has been discussing with Derco and City staff developing a potential 300,000 square foot retail shopping center on this site. The project, if successful, would be a "home run project" as desired by the City Council in the 2007 Strategic Planning workshops, producing increased consumer opportunities, jobs and significant tax revenues for both National City and Chula Vista. The attached Exclusive Negotiation Agreement ("ENA") would allow a one year period for the developers and staff to work together regarding the National City lands to try to make this complex project a reality. Please see attached Background Report for more detailed information. 1 Environmental Review Not applicable. Financial Statement The ENA requires NCSDI No. 1, LLC to deposit $25,000 with the CDC for use on agreed -upon due diligence activities. Fifty -percent, or $12,500, of the deposit will be non-refundable. Account No STAFF RECOMMENDATION Adopt the resolution. BOARD / COMMISSION RECOMMENDATION Not applicable. STRATEGIC GOAL 2) Achieve fiscal sustainability; 5) Focus long-range planning; 7) Make an impact; 9b) Draw attention to important Gateways and Intersections. ATTACHMENTS 1. Background Report 2. Proposed ENA 'A I +r,r RA r Resolution No. A)11tA Michael R. Da a, CMC City of National City Office of the City Clerk 1243 National City Boulevard, National City, CA 91950-4397 Michael R. Dalla, CMC - City Clerk (619) 336-4228 Fax: (619) 336-4229 September 17, 2008 Mr. Colton Sudberry NCSDI Properties, Inc. c/o Sudberry Properties, Inc. 5465 Morehouse Drive, Suite 260 San Diego, CA 92121 Dear Mr. Sudberry, On August 19th, 2008, Resolution No. 2008-168 was passed and adopted by the Community Development Commission of the City of National City, approving an exclusive negotiation agreement with NCSDI No. 1, LLC, Derr Family Ventures LP and Derco Properties LLC. We are forwarding for your records a certified copy of the above Resolution and a fully executed original agreement. Sincerely, City Clerk Enclosures cc: Community Development Commission William Harris, Law Offices of William Harris Michael Derr, Derco Kathryn Albergotti, Law Offices of Kathryn Albergotti ® Recycled Paper