Loading...
03-1007_MERCY HOUSING CALIFORNIA_Exclusive Negotiation Agreementi 0 EXCLUSIVE NEGOTIATION AGREEMENT PITTS PROPERTY By and Between the SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY and THE CITY OF SAN JUAN CAPISTRANO and MERCY HOUSING CALIFORNIA i I • • Exclusive Negotiation Agreement PITTS PROPERTY (APN: 668-421-03 & 668-421-04) This EXCLUSIVE NEGOTIATION AGREEMENT (PITTS PROPERTY) (this "Agreement"), dated for purposes of identification only as of October 7, 2003 (the "Date of Agreement"), is hereby entered into by and between the CITY OF SAN JUAN CAPISTRANO, a public body, corporate and politic, (the "City"), the SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic, (the "Agency") and MERCY HOUSING CALIFORNIA, a California non-profit corporation, (the "Developer"). RECITALS A. The Agency and the City desire to assist with the redevelopment of that approximately two and seven tenths (2.7) acres generally located on the terminus of Calle Rolando in the City of San Juan Capistrano (the "Site"). The Site consists of two parcels, Assessor's Parcel Numbers 668-421-03 and 668- 421-04. The Site is depicted on the Map which is attached hereto as Exhibit A and incorporated herein by this reference. B. The City intends to take title to the site from SunCal, a private developer who is under contract to purchase the property to satisfy their housing in -lieu obligations imposed by the San Juan Municipal Code. C. The Developer is interested in developing the Site and operating thereon a multi- family affordable housing project consisting of at least sixty (60) units to be made available to low income households at affordable rents (the "Multi -Family Affordable Housing Project"). D. The Developer desires to explore the feasibility of acquiring title to the Site from the City for the purpose of constructing and operating the Multi -Family Affordable Housing Project. E. The Agency, the City, and the Developer (each, a "Party" and jointly, the "Parties") desire to jointly explore the feasibility of the Multi -Family Affordable Housing Project and negotiate an agreement or agreements to provide for the Multi -Family Affordable Housing Project (a "Disposition and Development Agreement"). N 0 0 F. The Agency by separate Exclusive Negotiation Agreement ("ENA") dated January 6, 2003, is obligated to assist the Developer in locating a site and providing funds for pre-acquisition due diligence in accordance with the terms of the ENA. G. The primary purpose of this Agreement is to establish a period during which the Parties shall negotiate the terms of a Disposition and Development Agreement. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: Section 1. Negotiating Period. The Parties agree to negotiate diligently and in good faith with one another for a one hundred twenty (120) day period commencing upon the Effective Date of this Agreement (as hereinafter defined in Section 18) (the "Negotiating Period"), in order to agree upon a mutually acceptable Disposition and Development Agreement ("DDA"). If a Disposition and Development Agreement is negotiated and executed by the Developer within the Negotiating Period, then the term of the Negotiating Period and this Agreement shall automatically be extended for a period of forty-five (45) days from the date of such submittal to enable the City's staff to take and coordinate the actions necessary to bring the Disposition and Development Agreement before the City Council and Agency for consideration, action, and authorization to execute, if such are approved by City in its sole and absolute discretion. Section 2. Certain Parameters for Negotiations. The following nonexclusive list of items related to the Multi -Family Affordable Housing Project shall be the subject of negotiations during the Negotiation Period: (A) site plan (depicting building locations, elevations, building square footages and unit mix, parking access points, landscaped areas, and pedestrian and vehicular circulation); (B) pro forma (addressing detailed development and operational costs, anticipated rents for each unit, estimated profit and appropriate return measurements); (C) financing plan (addressing the proposed methods of construction and permanent financing and amounts and sources of equity and debt capital); and (D) development schedule. • Section 3. Developer's Submission of Documents for Agency Review and Comment. Within sixty (60) days of the Effective Date of this Agreement, the Developer shall submit the following information to the Agency or its agents: (A) a conceptual site plan; and (B) a pro forma; and (C) a financing plan; and (D) a development schedule; and (E) Environmental site assessment . In the event that the Agency requests that changes be made, the Developer shall, within twenty (20) days of a request by Agency, submit a revised site plan, pro forma, financing plan, and/or development schedule to the Agency in response to the Agency's comments on the initial version of each submission The Developer acknowledges and agrees that design and architectural review by the Agency and its consultants will be required at each stage of the development of the Multi -Family Affordable Housing Project and that sketches, plans, and ultimately working drawings, specifications and similar documents will be required to be submitted for review and approval pursuant to the Disposition and Development Agreement. The Developer further acknowledges and agrees that the City of San Juan Capistrano (the "City"), acting under its general police powers as a municipal corporation, may conduct a similar review and that building design including, but not limited to, the selection of building elevations, construction material, parking layout and landscaping will not be final until approved by City. The Developer further acknowledges and agrees that rights exercisable by the Agency are distinct and separate from those additional rights which the City may exercise under its general police powers as a municipal corporation. Section 4. Agency Evaluation of Developer's Proposal and Drafting of Disposition and Development Agreement. Upon the Agency's receipt of the last of Developer's submissions as provided in Section 3 hereof, Agency shall conduct or cause to be conducted a complete economic evaluation of Developer's submittals and proposed Multi -Family Affordable Housing Project; within thirty (30) days of the date on which the Agency receives the last such submittal, Agency shall elect to either (i) terminate this Agreement in accordance with Section 9.3 hereof, or (ii) continue negotiating hereunder in order to consummate the drafting of a Disposition and Development Agreement. 4 0 Section 5. Agency Assistance. The Agency shall reimburse Developer for pre - development soft costs (such as engineering, architectural, and administrative costs) incurred by Developer during the Negotiation Period with respect to the design of the Project (collectively, "Reimbursable Costs") in amount not to exceed Fifty Thousand Dollars ($50,000) as set forth in Exhibit A attached and incorporated herein (the "Agency Assistance"). Developer shall not incur any Reimbursable Costs without first obtaining the written reasonable approval of the Agency. The Agency shall reimburse Developer for Agency -approved Reimbursable Costs promptly upon the Agency's receipt of reasonable detailed invoices related to such costs. In consideration for the Agency's provision of the Agency Assistance, Developer shall deliver to the Agency all of the documents and materials produced by those professionals for which Developer seeks reimbursement under this Section and all such documents and materials shall become the property of the Agency at such time as this Agreement is terminated or terminates, unless the Parties subsequently enter into a Disposition and Development Agreement. Section 6. Environmental Requirements. Certain state and local environmental requirements (including, without limitations, the California Environmental Quality Act, Public Resources Code Sections 21000, et seq.)may be applicable to the proposed Multi -Family Affordable Housing Project. Pursuant to such requirements, certain environmental documents may be required to be prepared for the proposed Multi -Family Affordable Housing Project. The Developer agrees to cooperate with the Agency in obtaining information to determine the environmental impact of the proposed Multi - Family Affordable Housing Project (collectively, "CEQA Documentation"). Agency agrees to cooperate with the Developer to act as lead agency, if practical. Section 7. Hazardous Materials Assessment. The Developer will initiate or have conducted environmental assessments, audits and/or testing on the Site within the first 30 days, provided that the Developer has the approval of the owner of the Site or other legal entitlement to conduct such testing. In the event Developer conducts or has conducted such assessments, such assessments shall be referred to as the "Developer's Environmental Assessments." The Developer shall have the right to terminate this Agreement if the Developer is not satisfied with the findings and the recommendations made in the Developer's Environmental Assessments. However, the E • 0 Parties acknowledge and agree that the Site will be leased "as is" and that if and to the extent the Agency holds title to any portion of the Site prior to conveying such property interests to the Developer, then Developer shall release, defend, indemnify and hold Agency harmless with respect to the environmental and soils condition of the Site. Section 8. Cooperation. The Parties agree to cooperate with each other in promptly supplying information and analyses relating to the Multi -Family Affordable Housing Project. Section 9. Effect of this Agreement; Termination. 9.1 Nature of Agreement. This Agreement is not intended to constitute a binding agreement by the Agency to convey all or any portion of the Site, to financially participate with the Developer in the assembly or acquisition of the Site for the Multi -Family Affordable Housing Project, or to construct or operate the Multi -Family Affordable Housing Project, nor is it intended to constitute a binding agreement to enter into a Disposition and Development Agreement or any other contract. Except as set forth in the Disposition and Development Agreement, no Party shall be legally bound to consummate the construction and operation of the Multi -Family Affordable Housing Project as outlined herein unless and until a Disposition and Development Agreement or other contract has been executed and delivered by the Parties. Notwithstanding any other provision hereof, neither the Developer nor the Agency shall be under any obligation to approve or execute any Disposition and Development Agreement at its sole and absolute discretion, with or without cause; however, the parties agree to negotiate the Disposition and Development Agreement in good faith. In the event that a Disposition and Development Agreement is approved and executed by the Parties, this Agreement shall be superseded by such Disposition and Development Agreement. 9.2 Exclusive Nature of Negotiations. The Parties intend that certain aspects of the negotiations conducted pursuant to this Agreement be negotiated exclusively between the Parties. Accordingly, during the Negotiating Period the Agency shall negotiate exclusively with the Developer with respect to the development of the Site. 9.3 Termination of this Agreement. Each Party reserves the right to terminate this Agreement, with or without cause, upon ten (10) days prior written notice to the other Party, thereby withdrawing from such negotiations without any liability to the other Party, except that 6 each Party shall be obligated to promptly return to the other Party all information and materials which such Party has received from the other Party pursuant to this Agreement, and the Agency shall be obligated to reimburse Developer for any Reimbursable Costs in accordance with Section 5 hereof. The Parties, by their respective execution hereof, knowingly agree, notwithstanding anything herein to the contrary, that neither of them shall have any right to specific performance of this Agreement, nor any other equitable or damage remedies under the law. Each Party makes such release with full knowledge of Civil Code Section under the law. Each Party makes such release with full knowledge of Civil Code Section 1542 and hereby waive any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 9.4 Mutual Confidentiality. To the extent permitted by applicable law, the Parties shall maintain all information concerning this Agreement and any pending or subsequent negotiations between the Parties as confidential, disclosing information only to those individuals and representatives as designated by the other Party, provided that such individuals acknowledge and agree to maintain the confidentiality of such information. Section 10. Notices. Any notices, requests or approvals given under this Agreement from one Party to another may be personally delivered, transmitted by facsimile (FAX) transmission, or deposit with the United States Postal Service for mailing, postage prepaid, to the address of the other Party as stated in this paragraph, and shall be deemed to have been give at the time of personal delivery or FAX transmission or, if mailed, on the third day following the date of deposit in the course of transmission with the United States Postal Service. Notices shall be sent as follows: If to Agency: San Juan Capistrano Community Redevelopment Agency Attn: Executive Director 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Fax # (949) 493-1053 7 0 0 If to City: City of San Juan Capistrano Attn: City Manager 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Fax # (949) 493-1053 If to Developer: Mercy Housing California Attn: Dara Kovel, Regional Director 500 South Main Street, Suite 110 Orange, CA 92868 Fax # (714) 550-5085 Gubb and Barshay, LLP Attn: Natalie Gubb Fifty California Street, Suite 3155 San Francisco, CA 94111 Fax: ( 415) 781-6967 Section 11. Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of Orange County, State of California, in an appropriate court in that county, or in the Federal District Court in the Central District of California. Section 12. Attorney's Fees. If any legal action is brought to enforce, construe, interpret or invalidate the terms of this Agreement, the prevailing party shall be entitled to all costs and expenses incurred in any such action, including court costs and reasonable attorney's fees, in addition to any other relief to which such party may be entitled. Section 13. Interpretation. This Agreement shall be interpreted as a whole and in accordance with its fair meaning and as if each Party participated equally in its drafting. Captions are for reference only and are not to be used tin construing meaning. The recitals are deemed incorporated into this Agreement. Section 14. Real Estate Commissions. Each of the Parties represents and warrants to the other Party that no real estate commission, broker's fees, or finder's fees which may accrue by means of the acquisition of an interest in the Site is due to any person, firm or entity except as set forth above; each Party agrees to defend, indemnify and hold the other Party harmless with respect to any judgment, damages, legal fees, court costs, and any and all liabilities of any nature whatsoever arising from a breach of such 8 representation. Section 15. Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of the Agreement shall be made except by a written agreement executed by each of the Parties. Section 16. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the Parties concerning this subject. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between the Parties concerning all or any part of the subject matter in this Agreement. Section 17. Implementation of Agreement. The City and Agency shall maintain authority to implement this Agreement through its City Manager and Executive Director, respectively. The Executive Director shall have the authority to issue interpretations, waive provisions, and/or enter into certain amendments of this Agreement on behalf of Agency so long as such actions do not materially or substantially change the uses or development contemplated hereunder, or add to the costs incurred or to be incurred by the Agency as specified herein, and such interpretations and/or substantive interpretations, waivers, or amendments shall not require the consideration, action and written consent of the San Juan Capistrano Community Redevelopment Agency Board of Directors. Section 18. Effective Date of this Agreement. This Agreement shall take effect immediately upon the execution of this Agreement by the Agency and the City (the "Effective Date"). E 0 0 IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE RESPECTIVE DATES SET FORTH BELOW. "AGENCY" SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY A Public body, corporate and politic Dated: (U 2003 By: ( ✓� Pamela Gibson Interim Executive Director ATTEST: q&aretMonahafn APPROVED AS RM: By: Thomas P. C Jr. Agency Counsel 10 r � • "CITr, CITY OF SAN JUAN CAPISTRANO A Public body, corporate and politic Dated: IZ2 — 7 2003 By: Pamela Gibson Interim City Manager ATTEST: APPROVED AS TO FORM: �.Wriaw ttorney Dated: Srf p1r vV1V V- 2-1 2003 Em "DEVELOPER" MERCY HOUSING CALIFORNIA A California nonprofit c rporation �- ara Kovel Vice -President 11 Exhibit A Reimbursable Costs to Mercy Housing Corporation Due Diligence on Pitts Property 7777777, Architect's cost to prepare a massing study, site plan and residential conceptual elevations: (Based on estimate from architect.) $30,000 Nuffiffiff "k, Administrative time to prepare a development budget, operating budget, 15 vear cash flow, sources & uses, and to determine proposed financing sources including the gap needed from local sources. $4,500 Architect's cost to prepare a feasibility study evaluating the site in relation to the City's land use requirements such as density, setbacks, open space , parking, etc., as well as determining need for any variances. (Based on $7,500 estimate from architect.) Due diligence reports and administrative time to evaluate need and prepare initial application for general plan amendments, rezone and entitlements. $7,500 4011N 2;1141 W, Administrative costs to prepare timeline covering the following phases of development: site control/acquistion; financing; entitlements/design/ community outreach; construction; marketing/rent-up 500 • 32400 PASEO AD6L.ANT0 SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 (FAX) www. sanjuancapistrano. org TRANSMITTAL MEMBERS OF THE CITY COUNCIL DIANE L. BATHGATE JOHNS. GELFF MATT HART JOESOTO DAVID M. SWERDLIN INTERIM CITY MANAGER PAMELAGIBSON TO: Mercy Housing California, Attn: Dara Kovel, Regional Director, 500 South Main Street, Ste 110, Orange, CA 92868; and Gubb & Barshay, LLP, Attn: Natalie Gubb, Fifty Calfironia Street, Ste 3155, San Francisco, CA 94111 FROM: Meg Monahan, CMC, City Clerk V RE: Exclusive Negotiation Agreement — Pi s Prope y City of San Juan Capistrano & Commu 'ty Re velopment Agency DATE: October 9, 2003 Enclosed, please find enclosed (1) original, executed agreement, approved by the City Council of the City of San Juan Capistrano & Community Redevelopment Agency at their meeting of October 7, 2003. You may reach me at (949) 443-6308, should you have any questions. Thank you, Cc: Douglas Dumhart, Principal Management Analyst; San Juan Capistrano: Preserving the Past to Enhance the Future COMMUNITY REDEVELOPMENT AGENCY AGENDA ITEM TO: Pamela Gibson, Interim Executive DIrecLor FROM: Douglas Dumhart, Principal Management Analyst CRA 10/712003 C1 SUBJECT: Consideration of Exclusive Negotiating Agreement with Mercy Housing for the Pitts Property (APN 668-4211-03/04) RECOMMENDATION: By motion, approve the Exclusive Negotiating Agreement by and between the Agency, the City and Mercy Housing for the Pitts Property and authorize the Executive Director to execute the Agreement. SUMMARY: Based upon the projected housing needs contained in the General Plan, the City issued a Request for Qualifications (RFQ) in January 2002 from non-profit developers interested in partnering with the City for affordable housing. As a result of the RFQ, the San Juan Capistrano Community Redevelopment Agency (Agency) entered into an Agreement with Mercy Housing California (MHC) to identify proposed sites that are suitable for the development of a multi -family rental housing project. Potential Site Per the agreement, MHC has been actively pursuing numerous potential sites to develop as new affordable family rental projects. A 2.7acre vacant parcel located at the terminus of Calle Rolando (APN: 668-421-03/04) has been identified as a favorable site for an affordable family rental project. The property owner, Roger Pitts, has expressed an interest in selling to MHC. SunCal Dedication On September 2, 2003, the City Council adopted an ordinance requiring SunCal (Pacifica San Juan), a market rate developer, to fulfill their exclusionary housing requirement with the City by acquiring and dedicating this site to the City in -lieu of remitting Housing In -Lieu fees. SunCal would acquire the property from Pitts and dedicate the property to the City upon the close of escrow. The City would then calculate the In -Lieu fees owed and credit this amount against the cost of the property. AOR CITY COUNCIL AGENDA 0 0 Agenda Item -2- October 7, 2003 As a result, on September 11, 2003, SunCal, dba as SJD Partners, LTD, entered into a Letter of Agreement with Roger Pitts, the property owner. The Letter of Agreement is provided as Attachment 1 to this report. The key elements of the agreement are as follows: • Purchase Price of $2,000,000 • Buyer to pay 3% for Buyer's brokerage commission ($60,000) • Feasibility Period of 60 days • City to provide a threat of friendly condemnation to Seller • Closing date of no later than January 7, 2004 Due Diligence MHC has submitted an Exclusive Negotiating Agreement (ENA) in the amount of $50,000 for Agency approval to cover the costs associated with the due diligence. Upon commencing with the opening of SunCal's escrow with Mr. Pitts, MHC will begin its due diligence on the property on behalf of the Agency. The ENA with MHC is provided as Attachment #2 to this report. MHC has 60 days to complete due diligence. If it is determined from MHC's due diligence that the property is developable as affordable rental housing, the City will begin negotiating a Disposition and Development Agreement for the MHC to acquire, develop and operate a multi -family affordable housing project. If the City and MHC find the property is not suitable for affordable housing it will sell the property and deposit the proceeds into the housing fund. NOTIFICATION: Dara Koval, Mercy Housing* Holly Benson, Mercy Housing* Brad Gates, SunCal,* Roger Pitts, Property Owner-* Tom Clark, Straddling, Yocca, Carlson & Rauth* COMMISSION/BOARD CONSIDERATIONS: N/A FINANCIAL CONSIDERATIONS: Funds for due diligence have been budgeted in FY 03/04 in Account # 21-62134-4110. 0 0 Agenda Item -3- October 7, 2003 ALTERNATIVE ACTIONS: 1. By motion, approve the Exclusive Negotiating Agreement by and between Mercy Housing for the Pitts Property and authorize the Executive Director to execute the Agreement. 2. By motion, approve the Exclusive Negotiating Agreement by and between Mercy Housing for the Pitts Property and authorize the Executive Director to execute the Agreement; subject to modifications. 3. Refer to staff for additional information. RECOMMENDATION: By motion, approve the Exclusive Negotiating Agreement by and between Mercy Housing for the Pitts Property and authorize the Executive Director to execute the Agreement. Rene/ullybmitt • "0� Douglas . Dumhart Principal Management Analyst Attachment 1. SunCal Letter of Agreement 2. Exclusive Negotiating Agreement with Mercy Housing Corporation 29111�� 1,2Cie3 05:03 94146540 . — – Ft FITTS PAGE 01/03 y 06/11/2003 18:38 17,41 714 895 6731 .� sIINCAL _ rdoo2 S°JO Partners, LTD 5109 E, La Palma Avenue, Suite D Analmim, CA 97807 7141693-6700 Fax 714/693-6730 September 11, 2003 Roger R Pitts P 0 Box 3633 Whittier, California 90605 Ra: 2.7 -Acre Property at enol of Calle Rolando Cul De Sac San Juan Capistrano, California (APN= 665-421-03104) Dear Mr. Pitts, SJD Partners Ltd_ (the "Buycs") hereby offers to purchase that certain property (the "Property") )orated at Calle Rolando, San Juan Capistnmo, California (APN. 668-421-03/04) on dee teams and conditions set forth herein (the "Letter Agmutent"). I. Purchase Price: Buyer will pease the Property from Seller for the purchase price off Two Million Dollars ($2,000,000) (the "Purchase Price"), payable all cash at closing. 2. Earnest Money Deposit W9ybin five (5) days after the execution of this letter Agreement, Buyer shall deposit with F)dc* National Title Company ("Title company ") as escrow agent, a deposit of Cash in the amount of Twenty Five Thousand Dollars ($25.000) (the "Deposit"). Upon determination of the suitability of the Property for its intended purposes by Buyer pursuant to Paragraph 7 hereof, the Deposit shall become nonaetimdable. Until released tbo Deposit shall be held by Tide Company in an interest bearing account with interest accruing in favor of Buyer at the Closing or in favor of Seller if Seller is entitled to the Deposit hereunder, The Det crit including artereu shall be fully credited to rte Purchase Price at The Close of Fseraw, 3. Title. Seller at Closing shall convey to Buyer good, marketable and indefeasible fee simple title to the Property by grant deed. Said title shall be free and clear of all liens and encumbrances. Subject only to such exceptions as may be approved by Buyer, and any taxes not yet due and payable. After the feasibility Period, Seller agrees to not wise any new exceptions to be created. Prior to the close of escrow, should the tide report contain any exceptions not approved by Buyer during the Feasibility Period, Buyer shalt have ten 00) business days to review such new exceptions to title, Buyer shall not have the right to disapprove any new We exocptions that do not materially affr+et the intended development oftho Property. Seller shall pay the cost associated -with the CLIA portion of the polity, and B uyer shall pay the cost associated with any extended coverage. d. We ImurAnce: Within tea (10) days after the execution of ibis Letter Agreement, Seller shall deliver to Buyer a preliminary title report with supporting doamntents issmed by the Title Company. Said commitment shall be reviewed and approved by Buyer during the Feasibility Period, and shall, contain the expressed commitment of the Title Company to issue an ALTA owner's title insurance policy subject only to those exceptions approved by Buyer. Attachment 1 09/11/2003 05:03 941465• • R KITTS PAGE 02/03 09/11/2009 16;98 FAX 714 899 8781 51iNCAL ROOD Roger R_ Pitts September 11, 2003 Page 2 5. survey: % ida forty-five (45) days atter'the execution of this Letter Agreement, Buyer shall secure, at Buyer's sole cost and expense, a current topographic, boundary, survey of the Property, in form and content acceptable to Buyer and Title Company, with a full plotting of easements, if any, (the "Survey") so as to permit the Title Company to remova the survey exception from the title pol icy. 6. Property Information: To the extent reasonably available to the Seller, Seller shall provide Buyer widen copies of the following due dOlgeaco items concerning the Property as soon as possible after the executinn of this Letter Agreement, but no event later than ten (10) days after the execution of this Leiter Agreement: • Any plans relating to grading, erosion control, water, sewer, storm dram, street improvement, landacape, and parks • Am, relevant correspondence with government jurisdictions ■ The most current real property tax bills and value renditions • information on any applicable Community Facilities DistrictAssessmants ("CPD's') • Favuonmcatal, biological and archaeological reports • ]Boundary survey, topographic maps • Covenatm, Conditions and Restrictions ("CC&R'S") • Information regarding utility availability and locations ■ An soils an engineering mports/studies • Notifications by any municipal authority regarding condemnation of Property of a portion thereof • Dry mility plans 7. Feasibility Period: Buyer shall have a period (time "Feasibility Period") of sixty (60) days following receipt of the last to be received of the items referred to in paragraphs 4 and 6 above to determine, in. its sole and absolute discretion, the suitability of the Property for its intended purpose. in this regard, immediateby after mutual execution, of this Letter Agreranent, Seller shall gram Boyer and its agents a right of entry on the Property to obtain appraisals mud to perform engineering and environmental tests and such other studies necessary in connection with Buyer's evaluation of the Property and Buyer will agree to promptly restore the Property to its condition prior to such testa. Buyer shalt hold Seller harmless from any damage or injury relating to or resulting from Buyer's or Buyer's agent's entry on the property. In addition, buyer shall review zoning and otter governmental regulations affecting the Property. In the event Buyer deiraminrs Ilia Property is not suitable for its intended we and notifies the Seller in writing, in its. sole and absolute discretion, this Letter Agreement will terminate, the Deposit plus accrued interest will be returned w Buyer and the parties will bane no further obligations to one anotmer. a. aosiago Provided the Contract of Sale is not teaninated as stipulated in Paragraph 7, the, "Closing" or "Close of Esorow" of the purchase shall occur within ten (10) businesses days following completion of the Fea Nlity Period, but in no event later than January 1, 2004, unless mutually extended by both partes. 9. ]Brokerage Commission/Bee: providing the Closing occurs, Buyer to pay Arlan It:. Murata a commission of three percent (3%) of the sales price through escrow at the closo 09!1],/2003 05:03 541465,0 R PITTS 0 _09/11/2008 16:39 PAI 714.693 6731^ SL'NCAL Rogn R Pitts SepwraPage WPI of escrow_ Buyer and Scllor shall warrant to one another meY W not d'aab`9 ommissionor ft for with and throoeh any real estate broker or real estate company ng services of any kind for this transaction except for Arlan K Murata Both Seller end Buyer agree to defeod. indemnify and hold harmless the other with respect to any and all claims made througb the indemnifying party of anv kind relating to further fees and/or real estate commissions or fees_ 10. Notices: SSD Parmors Ltd. Attention: 13mee Blieff S3D Partners Ltd. 5109 East IA Palma, Suite D Anaheim, CA 92807 If the foregoing is aooaptable, please sign the enclosed counterpart of this letter and return it to the undersignod on or before 5 days after the date of this Letter Agreement Tbankyou for yoUrcansideration_ Sincerely, 37D P r3, Lid. Its: Accepted and Atireed to this /J��i of 2 nSefler" By: PAGE 03/03 41004 0 0 EXCLUSIVE NEGOTIATION AGREEMENT PITTS PROPERTY By and Between the SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY and THE CITY OF SAN JUAN CAPISTRANO two MERCY HOUSING CALIFORNIA Attachment 2 Exclusive Negotiation Agreement PITTS PROPERTY (APN: 668-421-03 & 668-421-04) This EXCLUSIVE NEGOTIATION AGREEMENT (PITTS PROPERTY) (this "Agreement"), dated for purposes of identification only as of October 7, 2003 (the "Date of Agreement"), is hereby entered into by and between the CITY OF SAN JUAN CAPISTRANO, a public body, corporate and politic, (the "City"), the SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic, (the "Agency") and MERCY HOUSING CALIFORNIA, a California non-profit corporation, (the "Developer"). RECITALS A. The Agency and the City desire to assist with the redevelopment of that approximately two and seven tenths (2.7) acres generally located on the terminus of Calle Rolando in the City of San Juan Capistrano (the "Site'). The Site consists of two parcels, Assessor's Parcel Numbers 668-421-03 and 668- 421-04. The Site is depicted on the Map which is attached hereto as Exhibit A and incorporated herein by this reference. B. The City intends to take title to the site from SunCal, a private developer who is under contract to purchase the property to satisfy their housing in -lieu obligations imposed by the San Juan Municipal Code. C. The Developer is interested in developing the Site and operating thereon a multi- family affordable housing project consisting of at least sixty (60) units to be made available to low income households at affordable rents (the "Multi -Family Affordable Housing Project"). D. The Developer desires to explore the feasibility of acquiring title to the Site from the City for the purpose of constructing and operating the Multi -Family Affordable Housing Project. E. The Agency, the City, and the Developer (each, a "Party" and jointly, the "Parties") desire to jointly explore the feasibility of the Multi -Family Affordable Housing Project and negotiate an agreement or agreements to provide for the Multi -Family Affordable Housing Project (a "Disposition and Development Agreement"). 0 0 F. The Agency by separate Exclusive Negotiation Agreement ("ENA") dated January 6, 2003, is obligated to assist the Developer in locating a site and providing funds for pre-acquisition due diligence in accordance with the terms of the ENA. G. The primary purpose of this Agreement is to establish a period during which the Parties shall negotiate the terms of a Disposition and Development Agreement. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: Section 1. Negotiating Period. The Parties agree to negotiate diligently and in good faith with one another for a one hundred twenty (120) day period commencing upon the Effective Date of this Agreement (as hereinafter defined in Section 18) (the "Negotiating Period"), in order to agree upon a mutually acceptable Disposition and Development Agreement ("DDA"). If a Disposition and Development Agreement is negotiated and executed by the Developer within the Negotiating Period, then the term of the Negotiating Period and this Agreement shall automatically be extended for a period of forty-five (45) days from the date of such submittal to enable the City's staff to take and coordinate the actions necessary to bring the Disposition and Development Agreement before the City Council and Agency for consideration, action, and authorization to execute, if such are approved by City in its sole and absolute discretion. Section 2. Certain Parameters for Negotiations. The following nonexclusive list of items related to the Multi -Family Affordable Housing Project shall be the subject of negotiations during the Negotiation Period: (A) site plan (depicting building locations, elevations, building square footages and unit mix, parking access points, landscaped areas, and pedestrian and vehicular circulation); (B) pro forma (addressing detailed development and operational costs, anticipated rents for each unit, estimated profit and appropriate return measurements); (C) financing plan (addressing the proposed methods of construction and permanent financing and amounts and sources of equity and debt capital); and (D) development schedule. 3 0 0 Section 3. Developer's Submission of Documents for Agency Review and Comment. Within sixty (60) days of the Effective Date of this Agreement, the Developer shall submit the following information to the Agency or its agents: (A) a conceptual site plan; and (B) a pro forma; and (C) a financing plan; and (D) a development schedule; and (E) Environmental site assessment. In the event that the Agency requests that changes be made, the Developer shall, within twenty (20) days of a request by Agency, submit a revised site plan, pro forma, financing plan, and/or development schedule to the Agency in response to the Agency's comments on the initial version of each submission The Developer acknowledges and agrees that design and architectural review by the Agency and its consultants will be required at each stage of the development of the Multi -Family Affordable Housing Project and that sketches, plans, and ultimately working drawings, specifications and similar documents will be required to be submitted for review and approval pursuant to the Disposition and Development Agreement. The Developer further acknowledges and agrees that the City of San Juan Capistrano (the "City"), acting under its general police powers as a municipal corporation, may conduct a similar review and that building design including, but not limited to, the selection of building elevations, construction material, parking layout and landscaping will not be final until approved by City. The Developer further acknowledges and agrees that rights exercisable by the Agency are distinct and separate from those additional rights which the City may exercise under its general police powers as a municipal corporation. Section 4. Agency Evaluation of Developer's Proposal and Drafting of Disposition and Development Agreement. Upon the Agency's receipt of the last of Developer's submissions as provided in Section 3 hereof, Agency shall conduct or cause to be conducted a complete economic evaluation of Developer's submittals and proposed Multi -Family Affordable Housing Project; within thirty (30) days of the date on which the Agency receives the last such submittal, Agency shall elect to either (i) terminate this Agreement in accordance with Section 9.3 hereof, or (ii) continue negotiating hereunder in order to consummate the drafting of a Disposition and Development Agreement. 4 Section 5. Agency Assistance. The Agency shall reimburse Developer for pre - development soft costs (such as engineering, architectural, and administrative costs) incurred by Developer during the Negotiation Period with respect to the design of the Project (collectively, "Reimbursable Costs") in amount not to exceed Fifty Thousand Dollars ($50,000) as set forth in Exhibit A attached and incorporated herein (the "Agency Assistance"). Developer shall not incur any Reimbursable Costs without first obtaining the written reasonable approval of the Agency. The Agency shall reimburse Developer for Agency -approved Reimbursable Costs promptly upon the Agency's receipt of reasonable detailed invoices related to such costs. In consideration for the Agency's provision of the Agency Assistance, Developer shall deliver to the Agency all of the documents and materials produced by those professionals for which Developer seeks reimbursement under this Section and all such documents and materials shall become the property of the Agency at such time as this Agreement is terminated or terminates, unless the Parties subsequently enter into a Disposition and Development Agreement. Section 6. Environmental Requirements. Certain state and local environmental requirements (including, without limitations, the California Environmental Quality Act, Public Resources Code Sections 21000, et seq.)may be applicable to the proposed Multi -Family Affordable Housing Project. Pursuant to such requirements, certain environmental documents may be required to be prepared for the proposed Multi -Family Affordable Housing Project. The Developer agrees to cooperate with the Agency in obtaining information to determine the environmental impact of the proposed Multi - Family Affordable Housing Project (collectively, "CEQA Documentation"). Agency agrees to cooperate with the Developer to act as lead agency, if practical. Section 7. Hazardous Materials Assessment. The Developer will initiate or have conducted environmental assessments, audits and/or testing on the Site within the first 30 days, provided that the Developer has the approval of the owner of the Site or other legal entitlement to conduct such testing. In the event Developer conducts or has conducted such assessments, such assessments shall be referred to as the "Developer's Environmental Assessments." The Developer shall have the right to terminate this Agreement if the Developer is not satisfied with the findings and the recommendations made in the Developer's Environmental Assessments. However, the 5 0 Parties acknowledge and agree that the Site will be leased "as is" and that if and to the extent the Agency holds title to any portion of the Site prior to conveying such property interests to the Developer, then Developer shall release, defend, indemnify and hold Agency harmless with respect to the environmental and soils condition of the Site. Section 8. Cooperation. The Parties agree to cooperate with each other in promptly supplying information and analyses relating to the Multi -Family Affordable Housing Project. Section 9. Effect of this Agreement; Termination. 9.1 Nature of Agreement. This Agreement is not intended to constitute a binding agreement by the Agency to convey all or any portion of the Site, to financially participate with the Developer in the assembly or acquisition of the Site for the Multi -Family Affordable Housing Project, or to construct or operate the Multi -Family Affordable Housing Project, nor is it intended to constitute a binding agreement to enter into a Disposition and Development Agreement or any other contract. Except as set forth in the Disposition and Development Agreement, no Party shall be legally bound to consummate the construction and operation of the Multi -Family Affordable Housing Project as outlined herein unless and until a Disposition and Development Agreement or other contract has been executed and delivered by the Parties. Notwithstanding any other provision hereof, neither the Developer nor the Agency shall be under any obligation to approve or execute any Disposition and Development Agreement at its sole and absolute discretion, with or without cause; however, the parties agree to negotiate the Disposition and Development Agreement in good faith. In the event that a Disposition and Development Agreement is approved and executed by the Parties, this Agreement shall be superseded by such Disposition and Development Agreement. 9.2 Exclusive Nature of Negotiations. The Parties intend that certain aspects of the negotiations conducted pursuant to this Agreement be negotiated exclusively between the Parties. Accordingly, during the Negotiating Period the Agency shall negotiate exclusively with the Developer with respect to the development of the Site. 9.3 Termination of this Agreement. Each Party reserves the right to terminate this Agreement, with or without cause, upon ten (10) days prior written notice to the other Party, thereby withdrawing from such negotiations without any liability to the other Party, except that 6 each Party shall be obligated to promptly return to the other Party all information and materials which such Party has received from the other Party pursuant to this Agreement, and the Agency shall be obligated to reimburse Developer for any Reimbursable Costs in accordance with Section 5 hereof. The Parties, by their respective execution hereof, knowingly agree, notwithstanding anything herein to the contrary, that neither of them shall have any right to specific performance of this Agreement, nor any other equitable or damage remedies under the law. Each Party makes such release with full knowledge of Civil Code Section under the law. Each Party makes such release with full knowledge of Civil Code Section 1542 and hereby waive any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 9.4 Mutual Confidentiality. To the extent permitted by applicable law, the Parties shall maintain all information concerning this Agreement and any pending or subsequent negotiations between the Parties as confidential, disclosing information only to those individuals and representatives as designated by the other Party, provided that such individuals acknowledge and agree to maintain the confidentiality of such information. Section 10. Notices. Any notices, requests or approvals given under this Agreement from one Party to another may be personally delivered, transmitted by facsimile (FAX) transmission, or deposit with the United States Postal Service for mailing, postage prepaid, to the address of the other Party as stated in this paragraph, and shall be deemed to have been give at the time of personal delivery or FAX transmission or, if mailed, on the third day following the date of deposit in the course of transmission with the United States Postal Service. Notices shall be sent as follows: If to Agency: San Juan Capistrano Community Redevelopment Agency Attn: Executive Director 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Fax # (949) 493-1053 7 11 • If to City: City of San Juan Capistrano Attn: City Manager 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Fax # (949) 493-1053 If to Developer: Mercy Housing California Attn: Dara Kovel, Regional Director 500 South Main Street, Suite 110 Orange, CA 92868 Fax # (714) 550-5085 Gubb and Barshay, LLP Attn: Natalie Gubb Fifty California Street, Suite 3155 San Francisco, CA 94111 Fax: (415) 781-6967 Section 11. Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of Orange County, State of California, in an appropriate court in that county, or in the Federal District Court in the Central District of California. Section 12. Attorney's Fees. If any legal action is brought to enforce, construe, interpret or invalidate the terms of this Agreement, the prevailing party shall be entitled to all costs and expenses incurred in any such action, including court costs and reasonable attorney's fees, in addition to any other relief to which such party may be entitled. Section 13. Interpretation. This Agreement shall be interpreted as a whole and in accordance with its fair meaning and as if each Party participated equally in its drafting. Captions are for reference only and are not to be used tin construing meaning. The recitals are deemed incorporated into this Agreement. Section 14. Real Estate Commissions. Each of the Parties represents and warrants to the other Party that no real estate commission, broker's fees, or finder's fees which may accrue by means of the acquisition of an interest in the Site is due to any person, firm or entity except as set forth above; each Party agrees to defend, indemnify and hold the other Party harmless with respect to any judgment, damages, legal fees, court costs, and any and all liabilities of any nature whatsoever arising from a breach of such representation. Section 15. Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of the Agreement shall be made except by a written agreement executed by each of the Parties. Section 16. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the Parties concerning this subject. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between the Parties concerning all or any part of the subject matter in this Agreement. Section 17. Implementation of Agreement. The City and Agency shall maintain authority to implement this Agreement through its City Manager and Executive Director, respectively. The Executive Director shall have the authority to issue interpretations, waive provisions, and/or enter into certain amendments of this Agreement on behalf of Agency so long as such actions do not materially or substantially change the uses or development contemplated hereunder, or add to the costs incurred or to be incurred by the Agency as specified herein, and such interpretations and/or substantive interpretations, waivers, or amendments shall not require the consideration, action and written consent of the San Juan Capistrano Community Redevelopment Agency Board of Directors. Section 18. Effective Date of this Agreement. This Agreement shall take effect immediately upon the execution of this Agreement by the Agency and the City (the "Effective Date"). C 0 0 IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE RESPECTIVE DATES SET FORTH BELOW. "AGENCY" SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY A Public body, corporate and politic Dated: 2003 By: Pamela Gibson Interim Executive Director ATTEST: M Margaret Monahan Agency Secretary APPROVED AS TO FORM: Tom Clark Agency Counsel 10 0 0 "CITY" CITY OF SAN JUAN CAPISTRANO A Public body, corporate and politic Dated: 2003 By: ATTEST: By: Margaret Monahan City Clerk APPROVED AS TO FORINT By - John Shaw City Attorney Dated: �nCp�CtMl�� �"j 2003 Pamefa Gibson Interim City Manager "DEVELOPER" MERCY HOUSING CALIFORNIA A California nonprofit c rporation By. ara Kovel Vice -President 11 11 Exhibit A 0 Reimbursable Costs to Mercy Housing Corporation Due Diligence on Pitts Property p W Architect's cost to prepare a massingstudy, site Ian and residential conceptual elevations. (Based on estimate from architect.) $30,000 Administrative time to prepare a development budget, operating budget, 15 year cash flow, sources & uses, and to determine proposed financing sources including the gap needed from local sources. $4,500 . r Architect's cost to prepare a feasibility study evaluating the site in relation to the City's land use requirements such as density, setbacks, open space, parking, etc., as well as determining need for any variances. (Based on $7,500 estimate from architect.) Due diligence reports and administrative time to evaluate need and prepare initial application for general plan amendments, rezone and entitlements. $7,500 Administrative costs to prepare timeline covering the following phases of development: site control/acquistion; financing; entitlements/design/ community outreach; construction; marketing/rent-up $500 San Juan Capistrano Community Redevelopment Agency C, C� NOTIFICATION OF MEETING OF POTENTIAL INTEREST SAN JUAN CAPISTRANO REDEVELOPMENT AGENCY The Board of Directors of San Juan Capistrano Community Redevelopment Agency will meet at 7:00 p.m. on October 7, 2003, in the City Council Chamber in City Hall, to consider: "Consideration of Exclusive Negotiating Agreement with Mercy Housing for Pitts Property (APN 668-4211-03/04)" — Item No. C1 If you have specific thoughts or concerns regarding this item, you are encouraged to participate in this decision making process. You can communicate with the Board of Directors through correspondence addressed to the Board and/or by attending the meeting and speaking to the Board during the public meeting. Correspondence related to this item must be received at City Hall by 5:00 p.m. on Monday, October 6, 2003 to allow time for the Board to consider its content. If you would like to speak at the meeting, please complete a blue "Request to Speak" form found inside the entrance to the Council Chamber. This form is turned in at the staff table, just in front of the Council dais. You will be called to speak by the Chairman when the item is considered. You have received this notice at the request of the City staff member Douglas D. Dumhart, Principal Management Analyst. You may contact that staff member at (949) (949) 443-6316 with any questions. The Community Redevelopment Agency agenda is available to you on the City's web site: www.sanjuancapistrano.org. Thank you for your inter—est, eg,Mnah n, CMC City Jerk cc: Dara Kovell, Mercy Housing*; Holly Benson, Mercy Housing*; Brad Gates, SunCal*; Roger Pitts, Property Owner*; Tom Clark, Straddling, Yocca, Carlson & Rauth*; Douglas D. Dumhart, Principal Management Analyst * Received staff report 32400 Paseo Adelant San Juan Capistrano California 92675 949-493-1171