Loading...
HomeMy WebLinkAbout2009 CON CDC Related Companies of CA / Community Housing Works - Affordable HousingEXCLUSIVE NEGOTIATION AGREEMENT BY AND BETWEEN COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, THE RELATED COMPANIES OF CALIFORNIA, AND COMMUNITY HOUSINGWORKS THIS EXCLUSIVE NEGOTIATION AGREEMENT (hereinafter referred to as "AGREEMENT") is entered into this 3rd day of March, 2009, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (hereinafter referred to as "CDC"), and both THE RELATED COMPANIES OF CALIFORNIA, LLC and COMMUNITY HOUSINGWORKS, (collectively referred to as "DEVELOPER") on the terms and provisions set forth below. RECITALS WHEREAS, the City of National City ("City") owns approximately 10.6 acres at 2200 Hoover Avenue commonly referred to as the Public Works site (Assessor Parcel Numbers 560- 396-06, 560-391-08, 560-206-03, 559-124-05 plus public right of ways) ("CDC SITE"); and, WHEREAS, the City is considering transferring title of these properties to the Community Development Commission of the City of National City for the purposes of redeveloping the site; and, WHEREAS, the CDC is interested in having the CDC SITE developed into a transit oriented mixed use development consisting of affordable housing units, retail sites, and enhancement to Paradise Creek, all of which was part of a Request for Qualifications previously issued; and, WHEREAS, the City of National City is undertaking a planning process for the Westside area of National City, known as the Westside Specific Plan and accompanying Environmental Impact Report ("EIR"), which are currently being prepared and are anticipated to be brought before the City of National City for a public hearing and decision in approximately June, 2009; and, WHEREAS, the Westside Specific Plan includes a transit oriented development, consistent with what was called out in the Request for Proposal, and which is part of the EIR analysis; and, WHEREAS, the CDC issued a Request for Qualifications seeking qualifications from experienced non-profit or for profit developers to: 1) enter into an Exclusive Negotiation Agreement to complete due diligence and design, followed by a Disposition and Development Agreement to transform this property into affordable housing with linkages to the 24tb Street Page 1 of 17 ENA "COD WESTSIDE CDC, RELATED, COMM'Y HSNGWRKS TOD Westside ENA final 2 25 09 (by CDC) Metropolitan Transit System Trolley Station, to enhance Paradise Creek, expand the Paradise Creek Education Park; and, 2) prepare and provide a mechanism for ongoing program management for a home ownership "incubator" to provide training and services to empower tenants within the project to more effectively pursue home ownership; WHEREAS, THE RELATED COMPANIES OF CALIFORNIA, LLC and COMMUNITY HOUSINGWORKS responded jointly to the RFQ to participate in design and development of the CDC SITE, and have entered into a Memorandum of Understanding between themselves, and these two entities are jointly referred to as DEVELOPER throughout this AGREEMENT; WHEREAS DEVELOPER responded to the RFQ to participate in design and development of the CDC SITE, to partner in development and ownership of all affordable housing, to prepare and provide educational and community building programs and resident services for all affordable housing in PROJECT, and to prepare and provide a mechanism for ongoing program management for a home ownership "incubator" in order to provide financial fitness and ownership training and resident services to empower tenants within the project to more effectively pursue home ownership; WHEREAS, the DEVELOPER is interested in assembling this site, plus adjacent lands within the City of National City, and to develop a mixed -use retail and affordable housing development, consisting of approximately 300-360 affordable residential units, retail floor area to provide support services and a personal finance incubator for the project, and enhancement of the Paradise Creek ("PROJECT"), consistent with the transit oriented development proposed in the Westside Specific Plan currently being drafted; WHEREAS, the DEVELOPER is interested in preparing and providing a mechanism for ongoing program management for a home ownership "incubator" in order to provide financial fitness and homeownership training and resident services to empower tenants with the project to more effectively pursue home ownership; and, WHEREAS, the CDC and the DEVELOPER desire to enter into this AGREEMENT to initiate exclusive negotiations for up to three hundred sixty-five (365) days (hereinafter referred to as "EXCLUSIVE NEGOTIATION PERIOD") to allow the DEVELOPER to (i) undertake its DUE DILIGENCE activities defined within Section II.C. of this agreement; (ii) develop the CONCEPTUAL DEVELOPMENT PLAN per Section II.B of this agreement; (iii) establish the responsibilities, schedule, and financial parameters for developing the PROJECT; (iv) negotiate the purchase price of the CDC SITE; (v) negotiate a Disposition and Development Agreement (hereinafter referred to as "DDA"), and (vi) develop conceptual program for providing financial fitness and home ownership training and for resident services for residents of the project; (vii) assure that the site and design plans include community space facilities needed to effectively accommodate resident services including financial fitness and ownership training; and, (viii) prepare a conceptual business plan and budget for ongoing incubator programming, including identifying sources of funding for program components and likely staffing needs. Page 2 of 17 ENA TOD WESTSIDE CDC, RELATED, COMM'Y HSNGWRKS TOD Westside ENA final 2 25 09 (by CDC') NOW, THEREFORE, in consideration of the recitals and mutual covenants and conditions contained herein, the parties hereto agree as follows: I. CDC SITE The CDC SITE constitutes the real property that is the subject of this AGREEMENT. It is the intent of the parties that the CDC SITE is comprised of properties located within the City of National City. The CDC SITE includes approximately 10.6 acres of properties owned by the City of National Cit' in the vicinity of 2200 Hoover Avenue roughly bounded by 22nd Street, Hoover Avenue, 19' Street, Harding Avenue, 21st Street and Wilson Avenue located within the City of National City - Assessor Parcel Numbers 560-396-06, 560- 391-08, 560-206-03, 559-124-05 plus public right of ways, as shown on Exhibit A. The exact number of affordable residential units and square footage of the CDC 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 (hereinafter 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 (hereinafter 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 (hereinafter referred to as "CONCEPTUAL DEVELOPMENT PROGRAM"). elements: The Conceptual Development Program shall include and delineate the following 1. The type and scope of the PROJECT; 2. The interface of a phased development with the complete build out of the CDC SITE; 3. Required on and off -site infrastructure improvements; 4. PROJECT, infrastructure, and state and local regulatory requirement cost; Page 3 of 17 ENA TOD WESTSIDl: ('DC, RELATED, COMM'Y HSN(;WRKS TOD Westside ENA final 2 25 09 (by CDC) 5. Proposed 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 with proposed sources of equity and financing required to complete site development; 2. DEVELOPER'S timely review of preliminary title report information prepared for the CDC SITE; 3. DEVELOPER'S timely investigation of the CDC SITE including review of CDC's WSP EIR, Phase I and II Environmental Assessments, and other CDC generated studies required to certify the EIR. 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 CDC 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 Conceptual Development Program to the CDC for review and comment. D. CONCEPTUAL DEVELOPMENT PROGRAM Submission/Entitlements/Environmental Review By the end of the FIRST NEGOTIATION PERIOD, DEVELOPER shall submit its CONCEPTUAL DEVELOPMENT PROGRAM for the PROJECT, which includes a conceptual site plan, representative floor plans, representative exterior elevations and project description and phased project schedule for review and consideration of acceptance by the Board of Directors of the CDC (hereinafter 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. Page 4 of 17 ENA TOD WESTSIDF CDC, RELATED, COMM'Y FISNGWRKS TOD Wcstside IiNA final 2 25 09 (by CDC) 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 (hereinafter referred to as "SECOND NEGOTIATION PERIOD") in order to negotiate and attempt to finalize the DDA. During the FIRST NEGOTIATION PERIOD AND THE SECOND NEGOTIATION PERIOD, the CDC and the Developer shall negotiate diligently and in good faith to 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. Special consideration shall be given to the extension given the intent of the parties of this AGREEMENT to apply for Proposition 1C Transit Oriented Development Program and Infill Infrastructure Grant Program funding in 2010. F. Execution of DDA After the DEVELOPER and the CDC staff tentatively agree upon the DDA, the EXCLUSIVE NEGOTIATION PERIOD shall be extended for up to an additional one hundred eighty (180) days at the discretion of the CDC's Executive Director, or designee (hereinafter 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; 2. 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 CDC SITE, 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 correspondence. The parties understand that final accord Page 5of17 ENA TOD WISTSIDE CDC, RELATED, COMM'Y IISNOWRKS TOD Westside ENA final 2 25 09 (by CDC) on all issues may not be reached. It is also understood that: (1) neither party is under any obligation to reach agreement on the CDC 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 CDC SITE, in its sole discretion, as more particularly set forth in Part III 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; b. Upon acceptance of the Conceptual Development Program and verification of PROJECT's proposed financial sources of financing to both purchase and develop the PROJECT, prepare a first draft of a DDA; c. Complete preparation of the Westside Specific Plan and accompanying EIR, and take both documents to City Council for consideration; d. Complete Phase I and Phase II Environmental Assessment prior to Proposition 1C's 2010 Transit Oriented Development (TOD) and Infill Infrastructure Grant (IIG) application deadline; e. Work with the DEVELOPER to coordinate the DEVELOPER's Conceptual Development Program with the EIR in order to minimize the potential for future amendments to the EIR; f. Use balance of CDC's contract with Pyatok Architects, Inc., as deemed appropriate by the Executive Director, to pay for site plan coordination meetings, site plan updates, changes to site plan, developing floor plans and elevations; and, g. Assist DEVELOPER in outreach efforts by helping to coordinate with other City of National City departments and leaders. Page 6 of 17 ENA TOD WESTSIDE CI)C, RELATED, COMM'Y HSNGWRKS TOD Westsidc ENA final 2 25 09 (by CDC) 2. Developer Obligations a. Use its best efforts to investigate the CDC SITE including review of CDC's WSP EIR, Phase I and II Environmental Assessments, and other CDC generated studies required to certify the EIR; b. Submit conceptual Project CDC SITE plans, elevations, conceptual drawings, detailed Project development cost estimates, pro formas for CDC SITE improvements as well as a pro forma summarizing the total Project and respective returns and other documents necessary for CDC and City review; c. Submit viable financial plan with proposed sources of funding or funding commitments for the PROJECT; d. Apply for California Department of Housing and Community Development Proposition 1 C TOD and IIG funds and/or grants in 2009 and other grants or financial incentives as appropriate, which includes, working with CDC to develop conceptual phasing of site plans for submission, providing financial analysis of each of the proposed phases of the PROJECT, identifying other possible sources of financing for the PROJECT, and coordinating and reaching out to the community and stakeholders; e. Apply for subsequent rounds of Proposition 1C TOD and IIG funds and/or grants, if unsuccessful in earlier rounds which includes the same work described in the paragraph above; f. Lead outreach efforts for PROJECT; g. Work concurrently with the CDC to coordinate the DEVELOPER's Conceptual Development Program with the EIR in order to minimize the potential for future amendments to the EIR; h. Develop conceptual programming for providing financial fitness and home ownership training prior to and following construction of the PROJECT, and for resident services for residents of the PROJECT; Page7of17 ENA TOD WES"I SIDE CDC, RELATED, COMM'Y IISNGWRKS TOD Wcstsidc ENA final 2 25 09 (by CDC) j• Assure that the site and affordable multifamily development design plans include community space facilities needed to effectively accommodate resident services including financial fitness and homeownership training; and Prepare a conceptual business plan and budget for ongoing incubator programming. The business plan should identify sources of funding for program components and likely staffing needs. I1I. 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 processing, design and developmental costs incurred by the DEVELOPER prior to DDA approval and execution shall be absorbed by DEVELOPER subject to the reimbursement terms per Section VI. 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 CDC 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. 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 CDC SITE; the Page 8 of 17 ENA TOD WIiSTSIDE CDC, RELATED, COMM'Y IISNGWRKS TOD Westside ENA final 2 25 09 (by CDC) 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 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'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 joint ventures. B. Offices of the Developer The principal offices of DEVELOPER are located at: 18201 Von Karman Avenue, Suite 900 Irvine CA 92612 (telephone) 949-660-7272 The Project Manager for the DEVELOPER will be Rick Westberg. Other employees, consultants, or representatives of DEVELOPER who are proposed to be 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 shall not assign this Agreement without prior written approval of the CDC. The CDC agrees that, notwithstanding the foregoing, the DEVELOPER may assign their rights under this AGREEMENT to a corporation, trust, limited liability company or Page9of17 ENA TOD WESTSIDE CDC, RELATED, COMM'Y IISNGWRKS "1'OD Westside ENA final 2 25 09 (by CDC) partnership of which the DEVELOPER or Related Company (or affiliates thereof) owns the majority beneficial interest and operational control. 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 sixty (60) days during the term of the AGREEMENT. V. ENVIRONMENTAL REQUIREMENTS The City of National City is currently undertaking a planning process for that area known as the Westside. Specifically, the City is preparing the Westside Specific Plan ("WSP") and the accompanying EIR. A mixed use transit oriented development is part of the WSP and EIR. Thus, DEVELOPER's PROJECT may possibly not require any further environmental review if the PROJECT's impacts have already been analyzed in a certified EIR. CDC will be responsible for all subsequent environmental assessments, studies and reports that are required by the WSP EIR, the Phase I Environmental Assessment, or the Phase II Environmental Assessment. DEVELOPER shall be responsible for preparing any additional environmental review, beyond those required by the WSP EIR, the Phase I or Phase II Environmental Assessments, if necessitated by changes in the PROJECT. VI. REIMBURSEMENT OF PREDEVELOPMENT EXPENSES PAID PRIOR TO APPROVAL OF PROPOSITON 1C FUNDING A. City Discretionary Entitlements DEVELOPER is entitled to reimbursement from the CDC of its predevelopment expenses if DEVELOPER, after exhausting all reasonable efforts, is unable to obtain approval by the City of National City of necessary discretionary entitlements, which are within the City's discretion to approve, in time to apply for the third round of Proposition 1C funding and/or grants. The determination of what entitlements must be approved by the City of National City will be determined by what the third round application for Proposition 1C funding requires as unequivocally necessary to apply for funding. The deadline anticipated for the third round of Proposition 1C funding is anticipated to occur around February, 2010. The predevelopment expenses referred to in this section specifically exclude any internal costs incurred and expended by DEVELOPER or any of DEVELOPER'S affiliates. Predevelopment expenses specifically exclude any expenses related to the Proposition 1C funding and/or grant application process undertaken by DEVELOPER. Predevelopment expenses also exclude any legal costs or expenses incurred by DEVELOPER, DEVELOPER's affiliates, or third parties. Predevelopment expenses do include third party costs by companies not affiliated with DEVELOPER for architectural work, engineering work, market studies, and cost estimates. Page 10 of 17 ENA TOD WESTSIDE CI)C, RELATED, COMM'Y HSNGWRKS Tot) Westside ENA final 2 25 09 (by CDC) Any reimbursement of predevelopment expenses is subject to DEVELOPER having received prior approval by the CDC Executive Director of its budget and timeline for DEVELOPER's predevelopment expenses. The total of all reimbursements pursuant to Section VI cannot exceed a total of twenty-five thousand dollars ($25,000). B. WSP Approvals DEVELOPER is entitled to reimbursement from the CDC of its predevelopment expenses if the City of National City denies approval of the WSP or approval is not obtained at least sixty (60) days prior to Proposition 1 C 2010 application deadline. The predevelopment expenses referred to in this section specifically exclude any internal costs incurred and expended by DEVELOPER or any of DEVELOPER'S affiliates. Predevelopment expenses specifically exclude any expenses related to the Proposition 1 C funding and/or grant application process undertaken by DEVELOPER. Predevelopment expenses also exclude any legal costs or expenses incurred by DEVELOPER, DEVELOPER's affiliates, or third parties. Predevelopment expenses do include third party costs by companies not affiliated with DEVELOPER for architectural work, engineering work, market studies, and cost estimates. Any reimbursement of predevelopment expenses is subject to DEVELOPER having received prior approval by the CDC Executive Director of its budget and timeline for DEVELOPER's predevelopment expenses. The total of all reimbursements pursuant to Section VI cannot exceed a total of twenty-five thousand dollars ($25,000). C. WSP EIR and Environmental Assessment Report DEVELOPER is entitled to reimbursement from the CDC of its predevelopment expenses if CDC does not obtain WSP EIR certification and the Phase I and Phase II Environmental Assessment, at least sixty (60) days before the Proposition 1C 2010 application deadline. The predevelopment expenses referred to in this section specifically exclude any internal costs incurred and expended by DEVELOPER or any of DEVELOPER's affiliates. Predevelopment expenses specifically exclude any expenses related to the Proposition 1 C funding and/or grant application process undertaken by DEVELOPER. Predevelopment expenses also exclude any legal costs or expenses incurred by DEVELOPER, DEVELOPER's affiliates, or third parties. Predevelopment expenses do include third party costs by companies not affiliated with DEVELOPER for architectural work, engineering work, market studies, and cost estimates. Any reimbursement of predevelopment expenses is subject to DEVELOPER having received prior approval by the CDC Executive Director of its budget and timeline for DEVELOPER's predevelopment expenses. The total of all reimbursements pursuant to Section VI cannot exceed a total of twenty-five thousand dollars ($25,000). Page 11 of 17 ENA TOD WESTSIDE CDC, RELATED, COMM'Y IISNGWRKS TOD Wcstsidc ENA final 2 25 09 (by CDC) D. Documents to CDC prior to reimbursement Prior to any reimbursement paid to DEVELOPER by CDC, DEVELOPER shall deliver to the CDC the following: 1) all predevelopment documents; 2) an absolute and unconditional assignment to DEVELOPER's right, title, and interest in and to any and all predevelopment documents; and, 3) written consent to such assignment of any architect or engineer who has any right, title, or interest in or to said predevelopment documents. 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 be valid whether made within or without the State of California. DEVELOPER's agent for service of process is CSC -Lawyers Incorporating Service, whose address is P.O Box 13397, Philadelphia, PA 19101-3397. Page 12 of 17 ENA TOD WESTSIDE CDC, RELATED, COMM'Y HSNGWRKS TOI) Westside ENA final 2 25 09 (by CDC) 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 request reimbursement of predevelopment expenses as permitted under Section VI of this Agreement, and 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 any 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 any 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 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, any party may terminate this AGREEMENT if another 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 Page 13 of 17 ENA TOD WESTSIDE CDC, RELATED, COMM'Y HSNGWRKS TOD Westside ENA final 2 25 09 (by CDC) 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; provided, however, if such default cannot reasonably be cured within such thirty (30) day period, the non -defaulting party shall not terminate this AGREEMENT or pursue any other remedies for default hereunder if the defaulting party commences cure within such thirty (30) day period and thereafter diligently prosecutes such cure to completion within the next thirty (30) days. If such default is not cured within the thirty (30) days, or within the subsequent thirty (30) days if commencement of a cure has occurred, 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 parties constituting the DEVELOPER terminate the Memorandum of Understanding between them related to development of this PROJECT for any reason; provided, however, that if either party wishes to terminate this AGREEMENT as a result of the occurrence of any of the events described in subparagraphs (a), (b) or (c) herein, (i) such party shall send written notice thereof to the other party setting forth the occurrence of the applicable event (the "Event Notice"), (ii) the parties shall negotiate diligently and in good faith for a period of thirty (30) days following the delivery of the Event Notice to resolve the issues described therein, and (c) no termination of this AGREEMENT shall be deemed to have occurred unless and until the parties have been unable to resolve the issues described in the Event Notice within such thirty (30) day period. F. 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, Executive Director Page 14 of 17 ENA TOD WESTSIDE CDC, RELATED, COMM'Y HSNGWRKS TOD Westside ENA final 2 25 09 (by CDC) With copy to: To Developer: With copy to: To Non-profit: With copy to: CDC Attorney 1243 National City Boulevard National City, CA 91950 Attn: George Eiser The Related Companies of California 18201 Von Karman Avenue, Suite 900 Irvine CA Attn: William Witte, President Community Housing Works (Co -developer) 4305 University Avenue, Suite 550 San Diego CA 92105 Attn: Susan M. Reynolds, President and CEO Dennis Doucette Luce, Forward, Hamilton & Scripps 600 West Broadway, Suite 2600 San Diego, CA 92101 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. G. 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. No member, official, employee, or contractor of the DEVELOPER shall be personally liable to the City or the CDC in the event of any default or breach by DEVELOPER or for any amount, which may become due to the City or the CDC or on any obligations under the terms of the AGREEMENT. Page 15 of 17 ENA TOD WESTSIDE CDC, RELATED, COMM'Y IISNGWRKS TOD Westside ENA final 2 25 09 (by CDC) H. 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. I. 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. J. 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. K. Successors This AGREEMENT shall be binding upon and shall inure to the benefit of the permitted successors of each of the parties hereto. L. 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. M. 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. N. Time is of the Essence Time is of the essence for each of the DEVELOPER'S obligations under this AGREEMENT. Page 16 of 17 ENA TOL) WIiSTSIDE CDC, RELATED, COMM'Y HSNGWRKS TOD Westside ENA final 2 25 09 (by CDC) O. 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 CDC SITE, the PROJECT, 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 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 NATIONAL CITY Bv: Ron Morrison, Chairman ATTEST: By: APPROVED AS TO FORM: By: 44?GZ sM. The Related Companies of California, LLC, a limited liability company. By: (,LG`-c-' The Nicholas Company, Inc a Delaware Corption, Its manager By: William A. Witte, President Community HousingWorks, a California non-profit public benefit corporation. By: George Eiser, City Attorney Susan M Reynold President and CEO Dated: March 3, 2009. Page 17 of 17 ENA TOD WESTSIDE CDC. RF.I.A'I F.U. COv M'Y HSNGWRKS TOD Wcstsidc FNA final 2 25 09 (by CI)(') O. 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 CDC SITE, the PROJECT, 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. COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY The Related Companies of California, LLC, a limited liability company. By: By: Ron Morrison, Chairman The Nicholas Company. Inc., a Delaware Corporation, Its manager ATTEST: By: Brad Raulston, Secretary APPROVED AS TO FORM: By: / /), 7rlC' George Eiser, City Attorney Dated: March 3, 2009. Page 17 of 17 By: William A. Witte. President Community HousingWorks, a California non-profit public benefit corporation. B . Su Reynolds President and CEO ENA TOD WFSTSIDE CDC, RELATED, COMM'Y IISNGWRKS TOD Westside F.NA final 2 25 09 (by CDC).DOC Related California 18201 Von Karman, Suite 900 Irvine, California 92612 February 27, 2009 Susan M. Reynolds, President & CEO Community HousingWorks 4305 University Avenue, Suite 550 San Diego, California 92105 Re: National City Paradise Creek Development, California Ms. Reynolds: The purpose of this memorandum of understanding is to set forth the proposed terms for a joint venture between Related California or its affiliates ("Related") and Community HousingWorks, a California nonprofit corporation ("CHW") for the development of a mixed -use retail and affordable housing project which may be developed in phases, consisting of approximately 300-360 affordable residential units and retail areas within the Westside Specific Plan in the City of National City, California (the "Project"). 1. Partnership Structure. The Project will be developed and owned by a limited partnership or partnerships (the "Partnership") in which (i) Related will own a 0.005% interest and will act as the administrative general partner and (ii) CHW will own a 0.005% interest and will act as the managing general partner. Bids will be solicited for an equity partner who will act as the investor limited partner and the special limited partner (collectively, the "Syndication Limited Partners") and will own 99.99% of the interests in the limited partnership. 2. Financial Participation. (a) Development Fee. The Project is expected to be structured to include Developer Fee(s) of which a percentage may be payble during the course of construction and a percentage may be payable from the Project's cash flow. Related will receive 70% of the Developer Fee(s), while CHW (or an affiliate of CHW, if required by tax counsel) will receive 30% of the Developer Fee(s). Each will receive a pro rata share (in accordance with the foregoing percentages) of each installment of the Developer Fee(s) as and when each such installment is paid. (b) Net Cash Flow and Sale/Refinancing Proceeds. Except as set forth below, all net cash flow and/or sale or refinancing proceeds payable to the general partner(s) of the Partnership will be paid to 70% to Related and 30% to CHW. Page 2 (c) Predevelopment Expenses. Third party, out-of-pocket predevelopment expenses to be paid by the Partnership prior to closing of the construction loan for the Project will be paid 70% by Related and 30% by CHW. All such amounts funded by Related and CHW shall be reimbursed with interest not later than the date of funding of the first draw under the construction loan. Both partners will sign contracts or come to mutual agreement about contract risk during predevelopment funding. During the early predevelopment stage (i.e., during the projected Exclusive Negotiating Period), an Early Predevelopment Budget is established as provided in Exhibit C. (d) Gap Financing. The Project is expected to be structured with multiple loans and grants from various authorities and jurisdictions, possibly including Prop 1 c Brownsfields, Prop 1 c TOD, Prop 1 c Urban Infill, and a loan or loans from the City of National City, collectively referred to herein as Gap Financing ("Gap Financing"). Related will be responsible for identifying, pursuing, applying for and negotiating Gap Financing. CHW will be responsible for assisting Related in its efforts to identify and secure Gap Financing. 3. Guaranties. Related will provide all guaranties relating to completion of construction of the Project. CHW and Related will jointly provide all other guaranties required in connection with the Project, including, without limitation, all lease -up guaranties, all operating deficit guaranties, all tax credit guaranties and all guaranties in connection with the repayment of loans. 4. Property Management. The Partnership will retain Related Management Company to provide property management services for the Project. The property manager will be paid a management fee that is consistent with fees paid for similar projects and similar management companies, but shall not exceed five percent (5%) of Effective Gross Income from the property (the "Property Management Fee") for property management services at the Project. The Property Management Contract shall be able to be terminated by the Partnership with cause by providing 30 days written notice. 5. Partnership Management/Asset Management. Following the funding of the permanent loan(s) for each phase, in consideration for Asset Management, Partnership Management and their continuing participation in the Project, the Partnership will split a $25,000.00 in management fees. CHW shall receive 75% of the management fees per year per phase. Related shall receive 25% of the mangement fees per year per phase. These fees are subject to approval of subsidy providers and investors. Resident Services/Homeowner Incubator The Partnership shall retain CHW to provide resident services for the Project defined here to include the City's requirement Page 3 that the project provide and fund a "Homeownership Incubator" to include homebuyer counseling, lending and financial training for residents. The Resident Services Contract shall reimburse CHW for actual out-of-pocket expenses and direct overhead incurred by CHW directly related to resident services provided at the Paradise Creek Development and shall be able to be terminated by the Partnership with cause by providing 30 days written notice. 6. Construction Management. Advantage Construction Services, Inc., will serve as the construction manager for the Project. In consideration for acting as the construction manager, Advantage shall receive a fee of $300,000 per phase. 7. Partnership Formation. The Partnership will be formed pursuant to a Limited Partnership Agreement, and a Certificate of Limited Partnership ("Form LP-1") will be filed with the California Secretary of State. Related and CHW will act as the general partners and Nicholas Real Estate Investments, LLC will act as the initial limited partner of the Partnership. Such limited partnership agreement will be amended and restated in its entirety to reflect the terms of this memorandum of understanding as well as the terms and conditions required by the Syndication Limited Partners. Negotiation of the amended and restated limited partnership agreement will begin immediately following receipt of an allocation of tax exempt bond authority from CDLAC and will be finalized as soon as possible thereafter. 8. Roles and Responsibilities. Related will serve as the Development Project Manager, responsible for coordinating the design, planning, entitlements, construction and financing of the Project. Without limiting the generality of the foregoing, Related will be primarily responsible for the day to day management of the Project, with assistance from CHW. Advantage will be the Construction Manager, responsible for coordinating and supervising the construction of the project including schedules, budgets and scope. Both partners will agree on budgets and major development decisions. CHW will serve as the lead partner for community relations and outreach. During the operational phase of the Project, CHW will be primarily responsible for Asset Management and Resident Services, and shall act as the managing general partner of the Partnership. Further details of the partners' roles and responsibilities are set forth in the spreadsheet attached hereto as Exhibit A. 9. Development Team. The assumed development team members for the Project have been approved by Related and CHW as shown on Exhibit B. 10. Long Term Ownership. It is currently anticipated that both general partners will remain in the partnership in their original capacities for the entire duration of project ownership. 11. Legal. Related proposes to retain Bocarsly Emden Cowan Esmail & Arndt LLP to represent both General Partners and the Partnership for all partnership, tax, and bond matters. Page 4 12. Purchase Option. The Partnership shall grant Related and CHW (jointly) an option to purchase the Project at the end of the 15-year tax credit compliance period at a purchase price equal to the greater of (a) fair market value of the project taking into consideration rent restrictions binding on the project; and (b) the sum of (i) the debt encumbering the Project at the time of such sale, which debt may be assumed by the partners, plus, (ii) the tax liability of the Syndication Limited Partners as the result of such sale transaction. The terms of this memorandum of understanding are intended to summarize the key partnership terms. If the foregoing is acceptable to you, please execute this letter where indicated below. I look forward to hearing from you. cc: Frank Cardone Agreed and Accepted February 27, 2009 COMMUNITY HOUSINGWORKS Bv: Sincerely yours, William A. Witte President M. Reynolds, Presid nt & CEO EXHIBIT B Paradise Creek Anticipated Project Team Function Team Comments Partners ;The Related Companies of California 1Community HousingWorks Development Project Manager The Related Companies of California Property Management }Related Management Company _ Asset Manager_ 'Community HousingWorks Partnership Management .The Related Companies of California Resident Services/HO Incubator Community HousingWorks Construction Manager ,Advantage Construction Legal: Tax Credit/Bonds Insurance Title Landscape Architect Civil Engineer / Survey Architect Ennironmental Community Outreach . Bocarsly Emden Cowan Esmail & Arndt LLP Acordia 'First American Title Company (Gina Balding) Spurlock Poirier C & V Consulting _ Studio E Pyatok Architects .AEC iSCS (Community Housingworks - lead Administrative General Partner Managing General Partner Related - assist C:\Documents and Settings\JudyM\Local Settings\Temporary Internet Files\OLK3\Exh A and B FINAL 2-27-09 2/26/09pm EXHIBIT A Paradise Creek Partnership Roles and Responsibilities Task Lead Role Related CHW Comments Finance Construction/Perm lender Prop lc, MHP, AHP, other Nat City loan Syndicator TCAC, CDLAC Tax Partner (audit, cost cert, etc) Project Management Operations Asset Manager (tax partner) Services/Incubator Partnership Management Partners mutually select financial partners; Related to be lead in negotiations Partners mutually select financial partners; Related to be lead in negotiations tAAR C:\Documents and Settings\JudyMlLocal Settings\Temporary Internet Files\OLK3\Exh A and B FINAL 2-27-09 2/26/09pm THE NICHOLAS COMPANY, INC., a Delaware corporation SECRETARY'S CERTIFICATE I, William A. Witte, Secretary and President of The Nicholas Company, Inc., a Delaware corporation (the "Corporation"), hereby certify that attached hereto is a true, correct and complete copy of the resolutions of the Board of Directors of the Corporation; such resolutions have not been amended, modified or rescinded and remain in full force and effect; and such resolutions are the only resolutions of the Corporation's Board of Directors relating to the transactions described therein. IN WITNESS WHEREOF, I have hereunto signed my nam Dated: February 26, 2009. William A. Witte, Secretary and President 1 50016093.1 RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE NICHOLAS COMPANY, INC., a Delaware corporation WHEREAS, The Nicholas Company, Inc., a Delaware corporation ("TNC"), is the manager of The Related Companies of California, LLC, a California limited liability company ("TRCC"), pursuant to that certain Operating Agreement of TRCC, dated as of November 19, 1998, as amended; and WHEREAS, TRCC and Community Housingworks jointly wish to enter into an Exclusive Negotiation Agreement (the "ENA") with the Community Development Commission of the City of National City, a public body, corporate and politic (the "CDC") with respect to approximately 10.6 acres located at 2200 Hoover Avenue, National City, California. NOW, THEREFORE, BE IT RESOLVED, that TNC, in its capacity as manager of TRCC, is authorized, empowered and directed to enter into, execute and deliver, on behalf of TRCC, the ENA, and to cause TRCC to perform each of its obligations thereunder; RESOLVED, FURTHER, that each officer of TNC be, and each of them hereby is, authorized, empowered and directed, on behalf of TNC, as manager of TRCC, to take such actions, and to execute and deliver such additional documents and instruments or cause the performance thereunder, as the person taking such actions or executing and delivering such documents or instruments or causing the performance thereunder may deem necessary or appropriate in connection with the transactions approved hereby, including, without limitation, the ENA, and the signature of such officer on any document or instrument, shall be conclusive evidence of such officers authority to take such actions or execute and deliver such documents or cause the performance thereunder on behalf of TNC as the manager of TRCC; and RESOLVED FURTHER, that any and all acts heretofore taken by any officer of TNC in connection with the matters authorized by the foregoing resolutions are hereby ratified, confirmed and approved. 2 50016093.1 Resolution Re: authorize Signatories for CH W Corporate Business September 27, 2003 RESOLUTION OF THE BOARD OF DIRECTORS OF COMMUNITY HO[SINGWORKS WHEREAS, Community Housing\Forks, a California nonprofit public benefit corporation (the Corporation). was organized for the purpose of providing affordable housing for low-income persons and promoting community development to improve the housing and economic conditions of the underprivileged; and WHEREAS, pursuant to that goal, the Corporation undertakes a range of activities and enters into legally binding agreements to implement those activities WHEREAS, the Corporation Board. in compliance with its bylaws. has elected officers and also from time to time selects an Executive Director; NOW, fi-IEREFORE. IT IS HEREBY RESOLVED that the corporation is hereby authorized. empowered. and directed to authorize the President of thc corporation, as well as the Executive Director. to execute all agreements and documents on behalf of the Corporation, including notes, trust deeds, subordination agreements. contracts for services, any Memorandum of Understanding, and similar contracts and agreements, as such documents conduct business in compliance with the Corporation's purposes and policies; FURTHER RESOLVED, that the President of the Corporation and the Executive Director of the Corporation (the Executive Director). be and they hereby are authorized, empowered, and directed to execute and deliver ail documents, and that such officers or Executive Director of the Corporation be and are thereby authorized, empowered, and directed to furnish all materials necessary to consummate the lending activities of the Corporation in accordance with the foregoing resolutions, and that any previous execution and delivery or furnishing of documents and :materials by such officers or staff of the Corporation, including its Executive Director. be and it is hereby authorized, confirmed and ratified; and FURTHER RESOLVED, that the Executive Director of the Corporation (the Executive Director) may delegate signature authority to the Director of Housing and Real Estate Development for vendor contracts and agreements under 1300,000 within approved development budgets approved by :he Executive Director, and that the Director of Housing and Real Estate Development be and hereby is authorized. empowered, and directed to execute and deliver all documents until such authority is rescinded in writing by the Executive Director; FURTHER RESOLVED, that the President of the Corporation and the Executive Director be and they are hereby authorized, empowered, and directed to take such furrher action on behalf of the Corporation as they deem necessary to effectuate the foregoing. CERTIFICATE The undersigned hereby certifies that S/he is the Secretary of Community HousingWorks, a California non-profit, public benefit corporation; that the foregoing is a true and correct copy of the resolutions duly adopted as of Sep:ember 20, 2003 by a vote of the Board of Directors or said corporation: that the passage of said resolutions was in all respects legal and that said resolutions are in full effect and have not heen mod:lied. i Date: 9 (a- By: ry Authorized Si 01 at:Telat tiers or these ol1iu s and an M. Reynolds, Exec �'"�� ctor Community Housinv,Wor N'lawhinney, President f' ommunity Housin'oWorks Anne 13. Nilson. Director of 1-lousing and Real Estate Development Community Housing\Vorks RESOLUTION NO. 2009 — 51 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN EXCLUSIVE NEGOTIATION AGREEMENT WITH THE RELATED COMPANIES OF CALIFORNIA AND COMMUNITY HOUSING WORKS FOR A TRANSIT -ORIENTED INFILL MIXED -USE AND AFFORDABLE HOUSING PROJECT WHEREAS, the City of National City ("City") owns approximately 10.6 acres at 2200 Hoover Avenue, commonly referred to as the Public Works site (Assessor Parcel Numbers 560-396-06, 560-391-08, 560-206-03, and 559-124-05, plus public right of ways) ("CDC Site"); and WHEREAS, the City is considering transferring title of these properties to the Community Development Commission of the City of National City ("CDC") for the purposes of redeveloping the site; and WHEREAS, the CDC is interested in having the CDC Site developed into a transit -oriented mixed -use development consisting of affordable housing units, retail sites, and enhancement to Paradise Creek, (the "PROJECT") all of which was part of a Request for Qualifications previously issued; and WHEREAS, the City is undertaking a planning process for the Westside area of National City known as the Westside Specific Plan, and an accompanying Environmental Impact Report ("EIR"), which are currently being prepared and are anticipated to be brought before the City Council for a public hearing and decision in approximately June, 2009; and WHEREAS, the Westside Specific Plan includes a transit -oriented development, consistent with what was called out in the Request for Proposal, and which is part of the EIR analysis; and WHEREAS, the CDC issued a Request for Qualifications seeking qualifications from experienced non-profit or for -profit developers to: 1) enter into an Exclusive Negotiation Agreement to complete due diligence and design, followed by a Disposition and Development Agreement to transform this property into affordable housing with linkages to the 24th Street Metropolitan Transit System Trolley Station, to enhance Paradise Creek, expand the Paradise Creek Education Park; and, 2) prepare and provide a mechanism for ongoing program management for a home ownership "incubator" to provide training and services to empower tenants within the project to more effectively pursue home ownership; and WHEREAS, The Related Companies of California and Community Housing Works (collectively, "DEVELOPER") responded jointly to the RFQ to partner in development and ownership of all affordable housing, to prepare and provide educational and community building programs and resident services for all affordable housing in the PROJECT, and provide a mechanism for ongoing program management for a home ownership ''incubator" to provide training and services to empower tenants within the project to more effectively pursue home ownership; and Resolution No. 2009 — March 3, 2009 Page 2 WHEREAS, DEVELOPER is interested in assembling this site, plus adjacent lands within the City of National City to develop a mixed -use retail and affordable housing development, consisting of approximately 300-360 affordable residential units, retail floor area to provide support services and a personal finance incubator for the project, and enhancement of the Paradise Creek, consistent with the transit -oriented development proposed in the Westside Specific Plan currently being drafted; and WHEREAS, DEVELOPER is interested in preparing and providing a mechanism for ongoing program management for a home ownership "incubator" to provide training and services to empower tenants with the project to more effectively pursue home ownership; and, WHEREAS, the CDC, and DEVELOPER, desire to enter into an Exclusive Negotiating Agreement to initiate exclusive negotiations for up to three hundred and sixty-five (365) days (hereafter referred to as "EXCLUSIVE NEGOTIATION PERIOD") to allow DEVELOPER to (i) undertake due diligence activities regarding the PROJECT; (ii) develop the conceptual development plan of the PROJECT; (iii) establish the responsibilities, schedule, and financial parameters for developing the PROJECT; (iv) negotiate the purchase price of the CDC site; (v) negotiate a Disposition and Development Agreement; and (vi) develop conceptual program for providing financial fitness and home ownership training and for resident services for residents of the project; (vii) assure that the site and design plans include community space facilities needed to effectively accommodate resident services including financial fitness and ownership training; and, (viii) prepare a conceptual business plan and budget for ongoing incubator programming, including identifying sources of funding for program components and likely staffing needs. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of the City of National City authorizes the Mayor to execute the Exclusive Negotiation Agreement with The Related Companies of California and Community Housing Works for a transit -oriented infill mixed -use and affordable housing project. Said Exclusive Negotiation Agreement in on file in the office of the City Clerk. PASSED and ADOPTED this 3rd day of March, Ron Morrison, Chairman ATTES APPROVED AS TO FORM: BradatZ �« cretary George H. iser, 111 City Attorney Passed and adopted by the Community Development Commission of the City of National City, California, on March 3, 2009, by the following vote, to -wit: Ayes: Commissioners Morrison, Parra, Sotelo-Solis, Van Deventer, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Chairman, Community Development Commission Secretaryl✓9 it evelopment Commission By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2009-51 of the Community Development Commission of the City of National City, California, passed and adopted on March 3, 2009. Secretary, Community Development Commission By: Deputy - City of National City, California COMMUNITY DEVELOPMENT COMMISSION AGENDA STATEMENT MEETING DATE March 3, 2009 AGENDA ITEM NO. 24 ITEM TITLE A resolution approving an Exclusive Negotiation Agreement with The Related Companies of California and Community Housing Works based on a competitive Request for Qualifications process conducted for consideration of a transit -oriented infill mixed use and affordable housing project to potentially include 300 - 360 affordable housing units east and west of Paradise Creek on approximately 10.6 acres owned by the City of National City. PREPARED BY Patricia Beard (ext 4255) Redevelopment Manager DEPARTMENT Redevelopment Division EXPLANATION In order to facilitate implementation of the Westside Specific Plan ("WSP") if adopted by the City Council later this year, staff has been working with the public and City Council to define a conceptual transit -oriented mixed used affordable housing project for the vicinity of the current Public Works Yard (2200 Hoover Ave) that can be analyzed within the context of the WSP Environmental Impact Report ("EIR"). A detailed explanation of this process and the Exclusive Negotiation Agreement ("ENA") presented for consideration with this staff report are explained in the attached Background Report. Environmental Review As required, review under the California Environmental Quality Act will be required prior to a development agreement being presented to the City Council/Communitv Development Commission. Financial Statement The CDC will incur costs to obtain an appraisal of the project site, to analyze the potential land transaction as required by California Redevelopment Law per Health and Safety Code Section 33433, for drafting a Disposition and Development Agreement, for Phase I and II analysis of environmental hazards and to complete the Environmental Impact Report for the Westside Specific Plan. Phase I and II costs for the CDC will be reimbursed by the USEPA. The developer will have the conditional ability to be reimbursed a maximum of $25,000 in third party pre -development costs. 1 STAFF RECOMMENDATION Adopt the resolution. BOARD / COMMISSION RECOMMENDATION Not applicable. STRATEGIC GOAL 3e) Support open spaces such as Paradise Creek Education Park, 5b) Complete WSP and analyze comprehensive implementation strategy, 6b) develop affordable housing by leveraging resources. ATTACHMENTS 1. Background Report 2. Proposed ENA 3. RFQ Submittal Resolution No. • 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 March 17, 2009 Mr. William Witte The Related Companies of California 18201 Von Karman Avenue, Suite 900 Irvine, CA 92612 Dear Mr. Witte, On March 3`d, 2009, Resolution No. 2009-51 was passed and adopted by the Community Development Commission of the City of National City, authorizing execution of an Exclusive Negotiation Agreement with The Related Companies of California and Community Housing Works. We are enclosing for your records a fully executed original agreement. Michael R. Dalla, CMC City Clerk Enclosure cc: Community Development Commission ® Recycled Paper 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 March 17, 2009 Ms. Susan Reynolds Community Housing Works 4305 University Avenue, Suite 550 San Diego, CA 92105 Dear Ms. Reynolds, On March 3rd, 2009, Resolution No. 2009-51 was passed and adopted by the Community Development Commission of the City of National City, authorizing execution of an Exclusive Negotiation Agreement with The Related Companies of California and Community Housing Works. We are enclosing for your records a fully executed copy of the agreement. Sincerely, 7,0446/ A, d Michael R. Dalla, CMC City Clerk Enclosure cc: Community Development Commission ® Recycled Paper