HomeMy WebLinkAboutRDA 02 ENA OPUS 04-15-08AGENDA REPORT
MEETING DATE: APRIL 15, 2008
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: CHRISTINE A. SHINGLETON, ASSISTANT CITY MANAGER
SUBJECT: EXCLUSIVE AGREEMENT TO NEGOTIATE WITH OPUS WEST
CORPORATION ON PACIFIC CENTER EAST/FORMER AAE
SITE
SUMMARY:
Responses to a Request for Proposal (RFP) for the disposition and development of the
Tustin Pacific Center East/Former AAE site have been evaluated and it is
recommended that the City and Redevelopment Agency enter into an Exclusive
Agreement to Negotiate with Opus West Corporation on the subject site.
RECOMMENDATION:
Subject to non-substantial modifications as may be determined necessary by the City
Attorney or the City Manager prior to execution, approve and authorize the City
Manager and Agency Executive Director, or designee, to execute an Exclusive
Agreement to Negotiate ("ENA") between the City of Tustin, Tustin Community
Redevelopment Agency, and Opus West Corporation, and to carry out all actions
necessary to negotiate a Disposition and Development ("DDA").
FISCAL IMPACT:
Selection of a prospective developer in which to enter into an Exclusive Negotiation
Agreement has no direct immediate fiscal impact. The developer will be required to
make an initial good faith deposit with the ENA prior to entering into the exclusive
negotiation period. There may be near to long term fiscal impacts, which will be driven
by any type of development on the site, revenues from land sale proceeds, and project
generated revenues. These fiscal impacts will be evaluated as part of the negotiation
process on the DDA.
BACKGROUND:
The Agency issued a Request for Proposal on the Tustin Pacific Center East/Former AAE
site on September 13, 2007. On December 21, 2007, the Agency received responses from
two entities: The Olson Company and Opus West. Responses to the RFP were intensively
reviewed and analyzed by the Agency and City staff and Agency economic consultant,
Keyser Marston. The internal team included representatives from the Agency, Public Works
and Community Developments. The RFP required each developer to submit certain
information and addressing certain criteria to be utilized to guide selection of a preferred
developer included the following:
• Project Entity and Project Team Experience
• Financial Capacity
• Development Concept or Approach
• Purchase Offer and Project Feasibility
• Ability to Carry Project Through to Implementation
• Overall Response to RFP Submission Requirements
After careful consideration of the developer responses, both the internal team and outside
consultant to the Agency, the firm of Keyser Marston, recommend that the City further
pursue negotiations on the site with Opus West. Opus West is a much larger company,
with experience with the products they propose and is a much better capitalized company
than the Olson Company. In a closed session on March 8, 2008 the City Council reviewed
the confidential financial evaluations of the proposals and concurred with staff
recommendations.
Opus West has proposed a creative site plan with products which are believed to be
responsive to current market conditions. The proposed development is proposed to be a
mixed use project of approximately 700,000 square feet of potential building area to
include approximately 131,00 square feet of office space, 158,000 square feet of retail
space, a 200 room hotel, restaurant space of 9,000 square feet and a 300 unit multiple
family rental apartment project. While modifications to the Pacific Center East Specific Plan
will likely be required, these amendments and the process of any future entitlements for the
project would be agreed to during the negotiation process.
Opus is also proposing not to purchase one of the parcels within the original RFP
solicitation which contains an existing warehouse building and uses on the west side of Del
Amo Avenue. It may still be possible to add this parcel to the project during the negotiation
process. As an alternative strategy, it may also be likely that once streetscapes are
improved and other properties developed in the area, the parcel may be able to be
marketed by the Agency at a higher value than under today's market conditions. The parcel
is currently 3.71 acres in size. Total property offered to be purchased by Opus West is a
23.82 acre portion of the RFP site.
Attached is an Exclusive Agreement to Negotiate (ENA). During the negotiation period, the
business points of a Disposition and Development Agreement will be negotiated and
brought back for City Council consideration along with any necessary environmental
documentation.
Staff will available to respond to any questions that the City Council might have at its
meeting on April 15, 2008.
Christine Shingleton
Assistant City Manager
Attachment:
Exclusive Agreement to Negotiate
EXCLUSIVE AGREEMENT TO NEGOTIATE
THIS EXCLUSIVE AGREEMENT TO NEGOTIATE ("Agreement") is entered into
this _ day of , 2008 ("Effective Date") by and between THE CITY OF TUSTIN,
TUSTIN COMMUNITY REDEVELOPMENT AGENCY (collectively, the "City") and OPUS
WEST CORPORATION (the "Developer") with respect to certain land referred to herein as
"PACIFIC CENTER EAST/FORMER AAE SITE" (defined below). The City, and the
Developer (collectively referred to herein as the "Parties") hereby agree as follows:
1.0 Introduction.
1.1 The City issued as Request for Proposal ("RFP") for the Tustin Pacific Center
East/Former AAE Site on September 13, 2007. On December 21, 2007, the City received
responses to the RFP.
1.2 After careful consideration of the responses to the Request for Proposal, the
Tustin City Council on March 4, 2008 selected the Developer as the successful respondent to the
Request for Proposal and directed the preparation of an Exclusive Agreement to Negotiate for
the disposition and development of the Tustin Pacific Center East/Former AAE Site.
1.3 The City desires to effectuate development of a large portion of the Pacific Center
East/Former AAE Site through the sale and development of such property in accordance with
applicable local requirements. The project shall be developed in accordance with all City
requirements, including, without limitation, implementing redevelopment plans, and the Specific
Plan as maybe amended.
1.4 Based on Developer's response to the Request for Proposal, a portion of the
Pacific Center East/Former AAE site is the subject of this Agreement, Such property is as
shown on Exhibit A attached hereto and as depicted on the Developer's schematic Site Map
attached hereto as Exhibit B (hereinafter referred to as the "Subject Property") consisting of
approximately 23.82 acres.
1.5 The Parties desire, for the period set forth herein, to negotiate diligently and in
good faith the terms and conditions of a Disposition and Development Agreement ("DDA") with
respect to Subject Property which, if agreed and executed, will specify the rights, obligations and
method of participation of the Parties with respect to the sale and development of the Subject
Property.
2.0 Agreement to Negotiate.
2.1 The City and the Developer each desire to negotiate a DDA which, if agreed upon
and executed, shall set forth the terms and conditions pursuant to which the Subject Property
shall be conveyed by the City to the Developer and developed by the Developer with a mixed
use project to include a potential building area totaling approximately 700,000 square feet. The
Developer's proposal includes the development of t approximately 131,000 square feet of office
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space, 158.000 of retail space, a 200 room hotel (with an assumed square footage of
approximately 120,000 square feet based on an average room size of 600 square feet per room),
9,000 square feet of restaurant space, and a 300 unit multiple family rental apartment project,
(hereinafter referred to as the "Project").
2.2 This Agreement (including all exhibits hereto) is solely an exclusive right to
negotiate and is not a final agreement. The Parties do not intend this agreement to be a purchase,
option or similar contract or to be bound in any way by this Agreement, other than to establish a
period of exclusive negotiations during which time each Party shall negotiate with the other in
good faith, The City shall not market the Subject Property to other interested parties and the
Developer shall be bound not to withdraw any offer made by it pursuant to Section 4.2.4.
2.3 The Parties acknowledge that they have not set forth herein nor agreed upon all
essential terms of the subject matter of an agreed transaction and that such essential terms will be
the subject matter of further negotiations.
2.4 Execution of this Agreement is not intended to confer any third party beneficiary
rights in or create any liabilities on the part of either Party to any third parties.
2.5 The DDA shall not exist and shall not be binding unless and until it is fully
executed by both Parties, approved by counsel to each Party as to form, and approved by the City
Council of the City, and by the managing members of the Developer.
2.6 Each Party assumes the risk that, notwithstanding this Agreement and good faith
negotiations, the Parties may not enter into any agreement due to the Parties' failure to agree
upon essential terms of the transaction.
3.0 Developer's Representations and Warranties.
3.1 The Developer represents that it has the necessary expertise, experience, and
financial capability to undertake development of the Project contemplated herein.
3.2 The Developer represents and agrees that its intended acquisition of the Subject
Property and its other intended undertakings pursuant to this Agreement shall be used for the
timely development of the Subject Property and not for speculation in land holding.
3.3 The Developer represents that it is experienced in redevelopment and understands
the process and requirements required to make redevelopment projects such as the Project
described herein.
4.0 Negotiations.
4.1 Good Faith Negotiations.
The City will prepare the DDA and submit it to the Developer for review and comment.
The City and the Developer agree for the period set forth in Section 4.2 to exclusively negotiate
with one another diligently and in good faith to prepare a DDA and related documents to be
entered into between the City and the Developer with respect to the Subject Property.
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4.2 Period of Negotiations.
4.2.1 The Parties agree to negotiate for a period of one hundred and eighty day
(180) days from the date this Agreement is signed by all Parties, subject to extensions as
further provided in this Section 4.2 (the "Period of Ne;;otiation"). If on the 180th day from the
date of this Agreement (or within any extension of time mutually approved by the Parties in
accordance with the terms of the Agreement), the Developer has not signed and submitted a
DDA in form and substance approved by the City in its sole discretion, then this Agreement
shall automatically terminate. The Developer may request from the City an extension of the
180-day exclusive negotiation period. The City will determine whether reasonable and
sufficient progress has been made toward fulfillment of the requirements of this Agreement in
its consideration of any extension. The 180 day exclusive negotiation period may be extended
by the mutual consent of the Parties for up to two (2) additional periods of sixty (60) days each.
4.2.2 Notwithstanding the period of exclusivity set forth in Section 4.2.1, it is
the intent of the Parties to negotiate and prepare definitive documentation reflecting the
transaction for execution and delivery on or before October 6, 2008. Thus, unless otherwise
extended in writing by the Parties, this Agreement shall automatically terminate at the end of
the period set forth in Section 4.2.1, except for the confidentiality provisions set forth herein.
4.2.3 The City hereby delegates to the Assistant City Manager the authority to
agree to grant the extensions specified in Section 4.2.1 upon determination by the Assistant
City Manager in her sole and absolute discretion that the Developer has negotiated diligently
and in good faith and that reasonable and sufficient progress has been made toward fulfillment
of the requirements of this Agreement. No such extension of time shall be effective unless it is
in writing.
4.2.4 The execution by Developer of a form DDA shall constitute an offer to
purchase the Subject Property. Developer hereby agrees that it shall not withdraw such offer to
purchase for a period of ninety (90) days following submittal of the executed DDA to the City.
Such offer shall remain in effect for a period of ninety (90) days to enable the City to (a)
determine whether it desires to enter into such DDA, (b) take the actions necessary to
authorize the City to sign the DDA if the City desires to do so, and (c) sign the DDA. If the
City has not considered and approved the DDA by such 90th day or, at the end of any
extension mutually agreed upon by the Parties in writing, then this Agreement shall
automatically terminate. The City is under no obligation to accept the Developer's offer to
purchase the Subject Property.
4.3 Deposits and Costs.
4.3.1 Prior to the Effective Date of this Agreement by the City, the Developer
has submitted to the City a good faith deposit in the sum of One Hundred and Fifty Thousand
Dollars ($150,000) (the "ENA Deposit") in the form of a certified cashier's check to the City
to ensure that the Developer will proceed diligently and in good faith to negotiate and perform
all of the Developer's obligations under this Agreement and to also be applied to cover City's
predevelopment costs incurred after the Effective Date of this Agreement. The ENA Deposit
shall be deposited in an account in a bank or trust company selected by the City. Interest, if
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any, shall be added to the deposit and held as additional security for the Developer's
obligations hereunder. The ENA Deposit will be expended to cover the City's costs during the
DDA negotiation process, and the deposit will be depleted accordingly. Each time the deposit
is depleted below Fifty Thousand Dollars ($50,000), the Developer shall be required to submit
to City an additional One Hundred Thousand Dollars ($100,000) as part of the ENA Deposit.
4.3.2 From and after the Effective Date, the ENA Deposit maybe used by the
City to pay the City's predevelopment costs, including, without limitation, city staff time,
consultants, outside counsel, and any other expenditures required in connection with the
drafting, negotiation, execution, and implementation and or termination of this Agreement, the
DDA, including any and all third party fees and costs incurred by legal counsel, financial and
other consultants, engineering and otherwise ("City Transaction Expenses"). Determination
of costs, expenses, and fees constituting City Transaction Expenses shall be made by the City
in its sole discretion and Developer shall upon request be entitled to receive summary notices
from the City setting forth amounts constituting City Transaction Expenses to be retained by
City.
4.3.3 If the Parties enter into a DDA within the time period identified in
Section 4.2 of this Agreement, the City shall return any remaining unused portions of the ENA
deposit to the Developer or apply it to any additional deposit required as security for the
performance under the DDA. If the Parties fail to enter into the DDA within the time period
identified in Section 4.2 of this Agreement or any extension thereto, the City may retain any
remaining unused portions of the ENA Deposit only if the Developer has not negotiated
diligently or in good faith or has not carried out its obligations under this Agreement. The
Developer's failure to submit to the City plans, reports, studies, investigations, and materials
specified in Section 5.0 and Section 6.0 of this Agreement within the time periods specified
therein shall be deemed to demonstrate the Developer's failure to negotiate diligently and in
good faith and its failure to carry out its obligations hereunder. If the Developer has failed to
do so, inasmuch as the actual damages which would result from a breach by the Developer of
its obligations under this Agreement are uncertain and would be impractical or extremely
difficult to determine, the City shall be entitled to retain any remaining unused portions of the
ENA Deposit plus interest, if any, which has accrued thereon, and the Good Faith Deposit as
liquidated and agreed damages.
4.3.4 The Developer may terminate this Agreement in the event that during
the course of the investigations and evaluation of the Subject Property and the Project, it
determines in good faith that the Project is not feasible or financeable. The City shall return
any remaining unused portions of the ENA Deposit (less any City Transaction Costs from the
Effective Date of this Agreement together, with any interest accrued thereon) to the Developer
upon termination of the Agreement in the event the Developer has negotiated in good faith
hereunder and materially complied with the terms hereof.
4.3.5 By the initials of their respective signatories hereunder, the City and the
Developer acknowledge and agree that forfeiture of the original amount of the deposit
(together with any interest earned and accrued thereon) is not in lieu of any other relief, right or
remedy to which the City might be entitled by reason of the Developer's default.
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Initials:
Developer City
4.3.6 Developer acknowledges that it is currently anticipated that the DDA
shall require the deposit of an additional deposit in an amount to be determined as security for
the performance of the Developer's obligations under the DDA. In addition, it is currently
anticipated that the DDA shall require the Developer to assume certain property maintenance
costs of the Subject Property as will be specified in the DDA.
4.3.7 Developer acknowledges and agrees that the City shall have no
responsibility to pay or reimburse Developer for costs and expenses incurred by Developer in
connection with the RFP and/or this Agreement or the compliance by Developer with its
obligations under this Agreement unless the City assumes any specific responsibilities in the
fully executed DDA. Costs and expenses for which the Developer shall be responsible include
all pre-contractual expenses described in the RFP and all costs and expenses incurred by
Developer with respect to compliance with the terms of this Agreement.
4.4 Exclusivity. During the period of exclusive negotiation, the City covenants and
agrees to negotiate exclusively with the Developer and shall not solicit another party for the
Project or enter into any agreement with any other party regarding the development of the
Subject Property. The City acknowledges and agrees that but for this exclusivity, the Developer
would not have entered into this Agreement. Developer acknowledges and agrees that this
exclusivity does not exclude City from completing its negotiation with the former AAE property
owner and any competent court for final title and its final purchase price from the former AAE
property owner of the Subject Property. In the event a court of competent jurisdiction determines
in a final decision that the City has breached this exclusivity covenant, the City shall be deemed
to have failed to negotiate in good faith and, provided a DDA has not been entered into pursuant
to this Agreement, the Developer shall, in addition to other rights and remedies, be entitled to the
return of the good faith deposit (together with interest accrued thereon) and any other deposits
made by the Developer.
4.5 Due Diligence.
4.5.1 Inspection; License. The City hereby grants to the Developer and its
representatives and agents a license during the term of this Agreement to enter upon the
Subject Property for purposes of conducting Developer's due diligence inspection, provided
that Developer shall: (a) deliver to the City written evidence that Developer has procured the
insurance required under Section 4.5.2; (b) give the City twenty-four (24) hours telephonic or
written notice of any intended access which involves work on the Subject Property or may
result in any impairment of the use of the Subject Property by its current occupants; (c) access
the Subject Property in a safe manner; (d) conduct no invasive testing or boring without the
written consent of the City; (e) allow no dangerous or hazardous condition created by
Developer or Developer's agents to continue beyond the completion of such access; (f) comply
with all laws and obtain all permits required in connection with such access; and (g) conduct
inspections and testing, subject to the rights of any existing owners or tenants of the Subject
Property, if any (which inspections and testing, if conducted at times other than normal
business hours, shall be conducted only after obtaining the City's consent, which shall not be
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unreasonably withheld). The limited license granted herein is revocable by the City during the
continuation of any breach of this Agreement by Developer and shall be automatically revoked
and terminated, without further action of the City, upon the termination of this Agreement or
any period of exclusive negotiation hereunder.
4.5.2 Insurance. Developer shall obtain, or cause its consultants to obtain, at
Developer's sole cost and expense prior to commencement of any investigative activities on the
Subject Property, a policy of commercial general liability insurance covering any and all
liability of Developer and the City arising out of any investigative activities, in an amount and
provided by a carrier reasonably approved by the City. Such policy of insurance shall be kept
and maintained in force during the term of this Agreement and so long thereafter as necessary
to cover any claims of damages suffered by persons or property resulting from any acts or
omissions of Developer, Developer's employees, agents, contractors, suppliers, consultants or
other related parties.
4.5.3 Indemnity. Developer hereby agrees to protect, indemnify, defend, and
hold the City and its elected officials, employees, agents, representatives, consultants and
contractors free and harmless from and against any and all claims resulting from Developer's
access to Subject Property or its exercise of its rights hereunder, including, without limitation,
any inspections, surveys, tests or studies performed by Developer or its employees, consultants
or contractors, save and except to the extent such claims result from the gross negligence or
willful misconduct of the City or its agents, employees or representatives. Developer shall
keep the Subject Property free and clear of any mechanics' liens or materialmen's liens related
to Developer's inspection of the Subject Property. The indemnification by Developer set forth
in this Section 4.5.3 shall survive the termination of this Agreement and the execution of the
DDA and shall not survive the closing and transfer to Developer of the Subject Property and
shall not merge into any deed granted pursuant to the DDA.
5.0 Proposed Development Concept and Essential Terms and Conditions.
5.1 The proposed Project to be negotiated hereunder shall include the development
and use of Subject Property consistent with the General Plan, and the Pacific Center East
Specific Plan, as Developer maybe required to amend.
5.2 The Parties agree that it is their intent, upon entry into this Agreement, to
negotiate a DDA which is anticipated to address the following terms and conditions.
5.2.1 The Developer shall acquire the Subject Property from the City. The
terms and conditions of this conveyance, including but not limited to the manner of
conveyance, the conditions precedent to conveyance and the amount of the purchase price and
any participation price, shall be determined as part of the negotiation of and detailed in the
DDA..
5.2.2 The Developer shall design and construct the development on the
Subject Property at its own cost and expense in accordance with a scope of development and a
schedule of performance to be negotiated as part of the DDA and in accordance with plans and
specifications prepared by the Developer and approved by the City in accordance with such
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schedule of performance and in compliance with all requirements and regulations of the City
including, without limitation, applicable zoning.
5.2.3 The Developer has proposed the project product mix on the subject
properties as generally identified in Section 2.1. It is agreed that the actual number of
dwelling units and total commercial square footage on the site shall be based on compliance
with all City requirements including development standards in the Specific Plan, as may be
amended, and any requirements contained in this Agreement.
5.2.4 In connection with its development of the Subject Property, Developer
acknowledges that Subject Property will be subject to applicable development fees, including
but not limited to those required by the City of Tustin, or other jurisdictions as identified in the
Request for Proposal such as the Foothill/Eastern Corridor Fee, the Santa Ana/Tustin
Transportation System Improvement Area (TSIA) fee, school impact fees by the Tustin
Unified School District (TUSD), a current Orange County School Facility Bond (Measure G),
utility meter and connection fees.
5.2.5 The Developer shall prepare and process applications for and obtain
from the City and other federal, state, and local jurisdictions, all applicable land use, planning
and zoning approvals for the proposed development with the support of the City. These
entitlements will be required to be consistent with the Pacific Center East Specific Plan, as
may need to be amended or any final revisions approved by the City Council. The Developer
is willing to process any necessary amendments to the Pacific Center East Specific Plan which
are requested by the City and are mutually acceptable to the City and Developer.
5.2.6 The Developer has agreed to negotiate with the City during the
preparation of the DDA the provision of affordable dwelling units on the Subject Property as
follows: a minimum of 15% of the dwelling units to be constructed to be affordable for very
low to moderate income households, with 40% of those units affordable to very low income
households.
5.2.7 New development shall be completed within the guidelines of the land
uses specified in the Pacific Center East Specific Plan, as maybe amended.
5.2.8 Project costs and revenues will be separately analyzed and funding of all
project costs will be the responsibility of the Developer.
5.2.9 The Developer anticipates implementation of the Project without the need
for any expenditure by or loan from the City to the Developer. Based on the negotiation
regarding the provision of affordability housing within the project as identified in Section 5.2.6,
the City will evaluate whether housing set aside redevelopment tax increment generated by the
development is necessary and available to be used as an off-set against Developer's assumption
of the affordability gap costs associated with provision of affordable dwelling units on the
Subject Property.
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6.0 Developer's Responsibilities.
During the period of negotiation, the Developer shall prepare and submit to the City the
following:
6.1 Status Reports. The Developer agrees to make bi-weekly oral and/or written
reports advising the City and/or its staff of all matters and studies being made, including the
Developer's progress in analyzing the feasibility of the Project as may be requested by the City
or its staff.
6.2 Development Team. The Developer shall, within ten (10) days of execution of
this Agreement, submit in writing to the City full disclosure of the names of the Developer's
agents, authorized negotiators, professional employees or other associates of Developer who may
be participants in development of the Project and other relevant information concerning the
above, such as addresses, telephone numbers, and employers. The Developer shall also
designate and submit in writing to the City the names of all the Developer's lead negotiators who
shall have authority to make decisions on behalf of the Developer.
6.3 Financial Status. The Developer shall continue to be responsible for
demonstrating to the City the financial capacity and capability to perform its obligations under
this Agreement and the proposed DDA. The Developer shall submit any additional financial
information of its key principal or principals as requested by the City within thirty (30) days of a
request by this Agreement. The Developer shall identify with specificity the documents which
the Developer wants the City to maintain as confidential documents and a statement as to why
the request is consistent and complies with the provisions of the Public Records Act of the State
of California. If confidentiality is requested and if nondisclosure under the Public Records Act is
allowed, the documents shall be delivered to and maintained by the City and copies shall not be
disseminated. To the extent permitted by law, the City shall not make public disclosure of the
documents. The City's agents, negotiators and consultants may review the statements as
necessary as long as such parties agree to maintain the confidentiality of such statements.
6.4 Assignment. If the Developer determines to joint venture or partner development
of the Subject Property, or if the Developer determines to form a new legal entity to develop the
Subject Property, the Developer shall promptly inform the City of such determination and submit
to the City the joint venture's or partner's most recent financial statements and the financial
statements of its key principals. The assignment of the Developer's rights under this Agreement
to any new entity, partnership or joint venture shall be approved in writing by the City, provided
that City is satisfied in its sole discretion, that the new entity, partnership, or joint venture has the
financial capability to perform under this Agreement and the proposed DDA.
6.5 Design Review/Entitlements. It is understood and agreed to by the Developer
that the quality, character and uses proposed for the Project are of particular importance to the
City and that planning and design review approval and other entitlements by the City will be
required for the development.. The Developer and the proposed architect shall meet with
representatives of the City to review and come to a clear understanding of the planning and
design criteria required by the City. -Within forty-five (45) days after the date of the execution of
this Agreement, the Developer shall submit a schedule for entitlement processing, including any
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necessary Pacific Center East Specific Plan amendments and anticipated environmental
evaluation of the project. Within ninety (90) days after the date of the City's execution of this
Agreement, Developer shall submit for approval of the City, preliminary revised design drawings
and related documents containing the overall plan for development of the Developer's Project
including the following: preliminary site plan showing building layout and dimensions, parking,
landscaping and access on or related to each individual parcel, floor plans, preliminary materials
call-outs and conceptual building renderings and a development schedule.
6.6 Project Financial Pro Forma. Within one hundred and twenty (120) days after
the date of this Agreement, Developer shall submit revised overall cost and revenue estimates
and related data in sufficient detail and for a ten (10) year time frame as required by the City,
including information on Project's financial return adequate to enable the City to evaluate the
Developer's Business offer and economic/financial feasibility of the proposed development of
the Project. The information submitted shall be in the same Business Plan format provided in
response to the Request for Proposal for the Subject Property as otherwise requested by the City,
in the Excel electronic format previously requested by City. The project financial pro form shall
reflect any comments the City provides to the Developer on the preliminary site plan submitted
under Section 6.5.
6.7 Additional Information. The Developer understands and agrees that the City's
negotiating team reserves the right at any time to reasonably request from the Developer
additional information, including information, data and commitments to ascertain the depth of
the Developer's capability and desire to develop the project expeditiously. The City's
negotiating team will provide a reasonable time in which the Developer may obtain and submit
to the City such additional information.
6.8 Contacts During Negotiation. The Developer shall only negotiate with the
City's negotiating team as defined in writing by the Assistant City Manager and with no other
persons unless expressly authorized to do so by the City's negotiating team. During the period
of negotiations, the Developer shall make no statements to the media about the proposed Project
without the approval of the Assistant City Manager. The Developer's failure to comply with the
provisions of this Section shall be conclusive evidence that the Developer has not "negotiated in
good faith."
6.9 Environmental and Other Studies.
6.9.1 Environmental Requirements. Compliance with the California
Environmental Quality Act ("CEQA") is a legal precondition to any final City action to
approve and execute a DDA. The Developer shall cooperate with the City and abide by the
City's environmental compliance procedures and fee requirements, which include but are not
limited to, the obligation to deposit funds to pay all of the City's costs of preparing any
additional required environmental studies as maybe determined.
6.9.2 Plans, Reports, Studies and Investi ations. The Developer shall provide
the City, without cost or expense to the City, copies of all plans, reports, studies or
investigations (collectively, "Plans") prepared by or on behalf of the Developer with respect to
the Subject Property and the Project. All Plans shall be prepared at the Developer's sole cost
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and expense. If this Agreement is terminated for any reason other than a material breach or
default hereunder by the City, the City may request that the Developer, for consideration to be
mutually agreed, transfer Developer's rights to any or all Plans identified by the City, but under
no event shall the cost to the City exceed five hundred dollars ($500.00). Upon such request,
the Developer shall deliver to the City copies of all Plans requested by the City together with a
bill of sale therefore, provided that Developer makes no representations, warrantee or
guarantee regarding the completeness or accuracy of the Plans, and Developer does not
covenant to convey the copyright or other ownership rights of third parties thereto. Such Plans
shall thereupon be free of all claims or interests of the Developer or any liens or encumbrances.
Upon the City's acquiring the Developer's rights to any or all of the Plans, the City shall be
permitted to use, grant, license, or otherwise dispose of such Plans to any person or entity for
development of the Subject Property or any other purpose; provided, however, that the
Developer shall have no liability whatsoever to the City or any transferee or title to the Plans in
connection with the use of the Plans. The City shall, within ten (10) business days of execution
of this Agreement and at no cost to the Developer, provide Developer with copies of all plans,
reports, studies, investigations and other materials the City may have that are pertinent to the
Subject Property and/or development of the Project provided, however, that the City makes no
representations, warrantee or guarantee regarding the completeness or accuracy of such plans,
reports, studies, investigations and other materials.
7.0 The Developer.
7.1 Nature of the Developer. Developer will be Opus West Corporation or such
other business entity (such as another limited liability corporation) as the City may approve,
upon terms and conditions as the City may request and the Parties may agree, as specified inthe
DDA. Concurrently with its execution of the DDA, Developer shall submit a copy of the
applicable formation documents relating to Developer and any corporate members of Developer
(i.e., as applicable: articles of incorporation; partnership agreement; and/or limited liability
corporation articles of incorporation, statement of information and operating agreement).
7.2 Offices of the Developer. The principal offices of the Developer are located at
2050 Main Street, Suite 800, Irvine, CA 92614.
7.3 Principals and Employees of the Developer.
The principals of the Developer who will be directly involved in the development are as
follows:
Paul A. Marshall, Division President, Southern California
Jefferson E. Hill, Jr., Vice- President, Opus West Corporation
Bob Carli, Vice-President of Architecture, Opus Architects & Engineers
Bert Levesque, Director of Construction, Opus West Construction Corporation
7.4 The Developer's Consultants and Professionals.
Page 10 of 16
The Developer is required to make full disclosure to the City of any changes to its
principals, officers, stockholders, partners, joint venturers, Project employees, and other
associates and all other pertinent information concerning the Developer and its associates.
Developer agrees to substitute or supplement any of its consultants and professionals as
reasonably requested by the City.
8.0 The Developer's Financial Capacity.
8.1 Financial Statement. Any additional financial statements of the Developer, if
requested, shall be submitted to the City or its consultant as requested by the City for the
purposes of this Agreement.
8.2 Equity: The Developer proposes to obtain its equity capital in the following
manner:
In-house financing
8.3 Construction Financing. The Developer proposes to obtain its construction
financing for the development from a reputable, institutional lender, as approved by the City.
8.4 Long-Term Development Financing. The Developer is capable of providing
financing for the development of the subject site with(out) the necessity of third party financing.
The Developer intends to commit to the provision of long-term development financing in the
same manner as to be specified in the DDA to the extent that third party financing is not
otherwise advisable or available to implement the Project.
8.5 Bank and Other Financial References. The Developer's banks and other
financial references are as set forth in the Developer's RFP submission.
8.6 Full Disclosure. The Developer will be required to make and maintain full
disclosure to the City of the methods of financing and the financing documents to be used in the
development.
9.0 City's Responsibilities.
9.1 Environmental Requirements. A final Environmental Impact Report for the
Pacific Center East Specific Plan and a Supplemental Environmental Impact Report have been
prepared and certified (collectively, the "EIR"). The Developer agrees to finance and supply
information and otherwise assist the City as requested to enable the City to determine the
environmental impact of the proposed development under the DDA and for any necessary
Pacific Center East Specific Plan amendments and to prepare such additional environmental
documents, if any, as maybe needed to be completed for the development.
9.2 Assistance and Cooperation. The City shall cooperate fully in providing the
Developer with appropriate information and assistance.
Page 1 1 of 16
9.3 City Approval. If the negotiations hereunder culminate in a DDA, such
agreement becomes effective only after and if the agreement has been considered and approved
by the City Council of the City after noticed public hearing.
10.0 Miscellaneous.
10.1 Real Estate Commissions. The City shall not be liable for any real estate
commission, finder's fee or any broker's fees which may arise from this Agreement. The City
represents that it has not engaged any broker, agent, or finder in connection with this Agreement
and the Developer agrees to hold the City and its representatives harmless from any losses and
liabilities arising from or in any way related to any claim by any broker, agent, or finder retained
by the Developer regarding this Agreement or development of the Subject Property.
10.2 No City Duty. Except as expressly provided above, the City shall have no
obligations or duties hereunder and no liability whatsoever in the event the Parties fail to timely
execute a DDA.
10.3 Non-liability of City Officials and Employees. No member, official,
representative, director, staff member, attorney, consultant, or employee of the City shall be
personally liable to the Developer or any successor in interest in the event of any default or
breach by the City or for any amount which may become due to Developer or to its successor, or
on any obligations under the terms of this Agreement.
10.4 Public Hearings and Compliance. If the negotiations hereunder culminate in
the Developer and the City's negotiations concurring on the terms and provisions of a DDA,
such DDA will be considered for approval by the City only after all required public hearings
have been held and after compliance with all applicable laws and ordinances. The concurrence
of the City negotiators with the terms and provisions of a proposed DDA under any provisions of
this agreement shall not be construed or interpreted as the City approving or accepting such
terms. Such concurrence shall be viewed as nothing more than the willingness of the City
negotiators to recommend to the City Council that the City Council approve such terms.
10.5 Entire Agreement; Attorneys' Fees. This Agreement represents the entire
agreement of the Parties with respect to the matters set forth herein and supersedes any prior
negotiations or contemporaneous writings or statements. This Agreement may not be amended
except in writing signed by each of the Parties hereunder. If any Party brings an action or files a
proceeding in connection with the enforcement of its respective rights or as a consequence of any
breach by the other Party of its obligations hereunder, then the prevailing Party in such action or
proceeding shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures
paid by the losing Party.
10.6 Covenant Against Discrimination. The Developer shall not discriminate against
nor segregate, any person or group of persons on account of sex, race, color, age, marital status,
religion, handicaps, creed, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Subject Property or development of the Project, nor shall
the Developer establish or permit any such practice or practices of discrimination or segregation
in the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
Page 12 of 16
vendees of the Subject Property. The Developer understands that similar covenants shall run
with the Subject Property and shall be contained in any deeds from the City to the Developer.
10.7 Notices/Submittals. All notices or submittals required or permitted hereunder
shall be delivered in person, by overnight courier, or by registered or certified mail, postage
prepaid, return receipt requested to such Party at its address shown below, or to any other place
designated in writing by such Party.
City: Christine Shingleton, Assistant City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Developer: Jeffferson E. Hill, Vice President
Opus West Corporation
2050 Main Street, Suite 800
Irvine, CA 92614
Any such notice or submittal shall be deemed received upon delivery if delivered
personally, one (1) day after deliver to the courier if delivered by courier and three (3) days after
deposit into the United States mail if delivered by registered or certified mail.
10.8 Prohibition Against Assignments. Except as may be permitted under
Section 3.3, this Agreement shall not be assigned by the Developer.
10.9 Supersession by Disposition and Development Agreement. Following mutual
execution by the Parties of a DDA, this Agreement shall be of no further force or effect, except
that the indemnity set forth in Section 4.5.3 shall remain in effect with respect to claims arising
during the term of this Agreement. In the event of any conflict between the provisions of this
Agreement and any DDA approved by the Parties, the provisions of the DDA shall for all
purposes prevail.
10.10 Confidentiality. The City and the Developer represent and warrant that each
shall keep this Agreement and all information and/or reports obtained from the other, or related
to or connected with the Subject Property, the other Party, this Agreement, the DDA or any other
documents negotiated by the Parties, confidential and will not disclose any such information to
any person or entity without obtaining the prior written consent of the other Party, except that the
City shall have the right to disclose any information contained in any third party reports obtained
by Developer. Notwithstanding the foregoing, this Agreement, the DDA and all other material
relating to this Agreement are subject to the provisions of the California Public Records Act
(Government Code Section 6250 et seq.). The City's use and disclosure of its agreements and
records are governed by this Act.
10.11 Governing Law/Exclusive Venue. The Agreement shall be interpreted in
accordance with California law. The Parties agree that in the event of litigation, exclusive venue
shall be in Orange County, California.
10.12 Counterparts. This Agreement maybe signed in one or more counterparts.
Page 13 of 16
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date set opposite their signatures.
"CITY"
City of Tustin
Dated:
By:
William Huston
City Manager
Tustin Community Redevelopment Agency
By:
William Huston
Executive Director
APPROVED AS TO FORM
By:
Doug Holland
City Attorney
"DEVELOPER"
OPUS WEST CORPORATION
By:
Dated:
Dated:
Paul A. Marshall
President, Southern California
Region
By:
Jefferson E. Hill
Vice President of Real Estate
Page 14 of 16
EXHIBIT A
SUBJECT PROPERTY
Page 15 of 16
EXHIBIT B
SCHEMATIC SITE PLAN
Page 16 of 16
EXHIBIT A
SUBJECT PROPERTY
Page 15 of 16
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Page 16 of 16
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OFFICE
28,000 SF
2 Stories
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PARKING STRUCTURE
4 Levels
580 + Stalls
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