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HomeMy WebLinkAboutRDA 04 FORD FAM TRUST 01-05-98DATE: DECEMBER 23, 1997 RDA NO 4 '"" ...... i-5-98 inter_Com TO: FROM: SUBJECT: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR REDEVELOPMENT AGENCY STAFF EXCLUSIVE AGREEMENT TO NEGOTIATE: FORD FAMILY TRUST PROPERTY IN THE VICINITY OF SIXTH STREET AND EL CAMINO REAL RECOMMENDATION It is recommended that the Redevelopment Agency authorize the Executive Director to execute an Exclusive Agreement TO Negotiate between the .Tustin Community Redevelopment Agency and DeBeikes Investment Company. FISCAL IMPACT This action will have no direct fiscal impact on the Redevelopment Agency. If the negotiations result in a Disposition and Development Agreement (DDA), the fiscal impact of such an agreement will be discussed if Agency approval of a DDA is requested in the future. BACKGROUND AND DISCUSSION DeBeikes Investment Company ("DeBeikes") has entered into a Letter of Intent with Charles W. Ford representing the Ford Family Trust (the "Fords") for the property commonly referred to as the Tustin Meadows Apartments, a 56-unit apartment complex at 120 - 250 Sixth Street and commercial property at 715 - 765 E1Camino Real. DeBeikes intends to acquire the Tustin Meadows Apartments, demolish the existing improvements and construct small lot, single family homes for sale to entry-level home buyers. Additionally, at the option of the Fords, DeBeikes may also purchase the commercial property along E1 Camino Real. In The event the Fords decide to retain the commercial property, DeBeikes will rehabilitate the property for the Fords to ensure compatibility with the proposed single family development. William A. Huston December 23, 1997 Page 2 One of the Redevelopment Agency's and City General Plan's housing goal is to encourage ownership- tenure. The prOposed project would meet this goal. Residential uses at the edge of Old Town are ideal for future residents who are seeking the convenience of a centralized location and for attracting and enhancing a market for Old Town. It is also Agency staff's desire to see any new development or revitalization activities on the Ford property play a more significant role and become more fully integrated into the overall "Old Town" fabric. Special attention in any project will be paid to design ' features that are of the highest quality and which will enhance the excrement in the Old Town Area. Attached is a proposed Exclusive Agreement To Negotiate between the Redevelopment Agency and DeBeikes. The Agreement commits the Agency to negotiating in good faith with the intent of entering into a Disposition and Development Agreement (DDA). It does not commit the Agency to any expenditure of funds nor does it commit the Agency to providing financial assistance at this time. Agency staff will seek specific Agency negotiating direction in any financial discussions. If, after negotiating in good faith, the Agency and developer fail to reach a DDA, neither party is liable to the other. The Exclusive Agreement to Negotiate provides for a 120 day negotiating period, which can be extended for 60 days if a DDA has been prepared by the Agency and executed by the developer but not yet approved by the Agency Board, or for 30 days if, in the determination of the Executive Director, the major business terms of a DDA have been reached, or by mutual agreement of the Agency and DeBeikes. In addition to requiring DeBeikes to negotiate in good faith with the Agency, the Exclusive Agreement to Negotiate also requires the developer to: · Provide on-going oral and written status reports advising the Agency of all matters and studies being undertaken on the project. Provide the Agency, without cost or expense to the Agency, copies of all plans, reports, studies, or investigations prepared by or on behalf of the developer with respect to the site and the proposed project. · Demonstrate to the Agency, in its Sole discretion, the developer's financial capacity to perform its obligations under the DDA for the proposed project. Within fifteen (15) days of execution, submit for approval by the Agency the proposed project architect and identify the development team, including its agents, authorized negotiators and other associates participating in the development of the proposed project. William A. Huston December 23, 1997 Page 3 Within sixty (60) days of execution, submit for approval by the Agency basic concept drawings and related documents containing the overall plan for development of the project which meet the Agency's planning and design requirements. Within sixty (60).days of execution, provide a financing plan and economic projection for the proposed project, including a pro forma statement of the project's financial return adequate to enable the Agency to evaluate the economic feasibility of the proposed project. Within ninety (90) days.of execution, submit to the Agency and the City any necessary applications and required submittals for the Agency's and the City's planning, zoning and design review approvals for the proposed project. This Exclusive Right to Negotiate will' allow the developer to proceed in completing a purchase contract with the current property owner and allow him to begin serious discussions on the necessary financing for the project. FINDING OF BENEFIT . This site is located in the Town Center Project Area. On December 5, 1994 the Tustin Community Redevelopment Agency adopted a five-year Implementation Plan for the Town Center and South/Central Redevelopment Project areas for fiscal years 1995,1996 through 1999-2000. The Implementation Plan was composed of two parts, a five'Year plan for Redevelopment activities and a five-year plan for housing activities. Anticipated accomplishments and expenditures for the five-Year period included the development of 120 owner occupied dwelling units in the Town Center Project The proposed project is consistent with the Implementation Plan for the Town Center Project Area. It will remove a blighting influence in the Project Area by demolishing an existing apartment project that is characterized by substantial deferred maintenance and a high incidence of crime and developing a home ownership project that would allow for the expenditure of housing set-aside funds. The project would provide for the sale of units to entry-level home buyers, as well as to low ahd moderate income buyers. The project would contain certain affordability restrictions for the low and moderated-income units. It is anticipated that the proposed project would not reduce the number of affordable housing units in the Project Area while it would increase the number of ownership units. William A. Huston December 23, 1997 Page 4 If financial assistance is provided fOr this project through a DDA, AgenCY staff will prepare and presem for City Council and Agency consideration a resolution making the required legal findings. Christine A. Shingleton// Assistant City Manager~/ Jarnes A.'E}'raughon Senior RedevelopmenVProject Manager Attachment JD~fordpropkrdareport EXCLUSIVE AGREEMENT TO.NEGOTIATE THIS EXCLUSIVE AGREEMENT TO NEGOTIATE ("AGREEMENT") is. made this day of , 1998, by and between the TUSTIN COM3KUNITY REDEVELOPMENT AGENCY ("AGENCY") and DeBEIKES INVESTMENT COMPANY ("DEVELOPER"). Each of the Agency and Developer. are sometimes referred to as the "Party" and collectively as the "Parties." RECITALS. The Parties entered into this Agreement on the basis of the following'facts, understandings, and intemions: A. The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of · the State of california (Health and Safety Code sections 33000 et seq.). B. The Agency desires to encourage and effectuate the redevelopment, of certain real property (the "Site") located in the Town Center Redevelopment Project Area of the City of Tustin in furtherance of the Agency's revitalization efforts, and which consists of that certain real property which is depicted on the "Site Map" attached hereto Exhibit A and incorpOrated herein by reference. C. The Developer desires to acquire the Site comprised of a 56-unit existing multiple family apartment project and adjacent commercial uses located along E1 Camino Real on approximately 3.84 acres of land and to clear the existing multiple family improvements and develop a small lot, detached single family ownership project and to acquire and/or rehabilitate the adjacent commercial uses on the site (hereinatter referred to as "Project"). Do The Developer represents that it has the necessary expertise, experience, and , financial capability to undertake the development contemplated herein or that it is intending to joint venture or panner development of the Site with an entity that possesses such expertise, experience, and financial capability. E. The Developer represents and agrees that its acquisition of the Site and its other undertakings pursuant to this Agreement, are and shall be used for the timely redevelopment of the Site and not for speculation in land holding. F. 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") which will specify rights, obligations and method of participation of the Parties with respect to development of the Site. NOW, THEREFORE, and in consideration of the mutual covenants hereinafter contained, the Parties mutually agree as follows: 1.0 NATURE OF NEGOTIATIONS 1.1. Good Faith. The Agency and Developer agree that for the period set forth in Section 2 and provided that Developer is not in default on any of the obligations under this Agreement, they will negotiate in good faith with respect to a DDA to be entered into between the Parties for develOpment of the Project on the Site. 1.2 Essential Terms The rights and obligations of the Agency and Developer's rights and obligations shall be as specifically set forth in the DDA and shall include without limitation the following: a. Design of the Project, subject to approval, rights of the Agency and compliance with all City requirements and regulations, including without limitation, .applicable zoning. b. Construction of improvements comprising the Project, the completion of which shall be (i) guaranteed by Developer upon terms mutually agreeable to the Parties, and (ii) free of mechanics' liens and liens other than those respecting the financing of the acquisition of the Site and the development of the Project. c. Operation and maintenance of the Project. d. Restrictions on transfer of the Project, Developer's interest in the DDA, and control of Developer. e. Reimbursement to the Agency of costs incurred in connection with the DDA and the Project. f. Agency financial assistance to the Project. g. Security to assure Developer's perfOrmance under the DDA. h. Developer will assume the full and complete responsibility to make all investigations of surface and subsurface conditions as may be necessary or appropriate and to evaluate the suitability of the Site for the development. Neither the Agency nor the City shall make any represemations or warranties concerning the Site, its sUitability for the use imended by Developer, or the surface or subsurface conditions of the Site. 2.0 PERIOD OF NEGOTIATION The Parties agree to negotiate for a period of one hundred twenty (120) days from the date this Agreemem is signed by the Agency, and this Agreement shall terminate-after the expiration of such period unless extended as follows: a. For sixty (60) days if a DDA has been prepared by the Agency and executed by Developer and has been submitted to the Agency but has not yet been approved by the Agency Board; or b. For thirty (30) days if the major business terms have been agreed to and the Executive Director determines that further negotiations are likely to result in a written DDA; or c. By mutual written agreement of the Parties. Upon termination of this Agreement, any interest that Developer may haVe hereunder shall cease, and Agency shall have the right to thereaRer deal with the Site as it shall determine in its sole discretion. Developer understands and acknowledges that if negotiations culminate in a DDA, such DDA shall be effective only after and if the DDA has been considered and approved by the Agency Board after all related public hearings as required by law. 3.0 PLANS, REPORTS, STUDIES AND INVESTIGATIONS Developer shall provide the Agency, without cost or expense to the Agency, copies of all plans, reports, studies, or investigations (collectively, "Plans") prepared by or on behalf of Developer with respect to the Site and the Project. All Plans shall be prepared at Developer's sole cost and expense, and Developer agrees to indemnify, defend and hold the Site and the City, Agency and its representatives, employees, staff.members, officials, directors, attorneys, successors and assigns (collectively, "Representatives") harmless from any losses, liabilities, claims, causes 'of action, injury or expenses, including without limitations, reasonable attorneys' fees and costs (collectively, "Losses and Liabilities") arising from or in any way related to the cost of preparation of such Plans. If this Agreement is terminated for any reason, the Agency may request that Developer transfer ownership rights to any or all Plans identified by the Agency. Upon such request, Developer shall deliver to the Agency copies of all Plans requested by the Agency together with a bill of sale therefor, which Plans shall thereupon be the sole property of the Agency, free of all claims or interests of Developer or any other person or entity. Upon the Agency's acquiring title to any or all of the Plans, the Agency shall be permitted to use, grant, license or otherwise dispose of such Plans to any person or entity for development of the Site or any other purpose; provided, however, that Developer shall have no liability whatsoever to the Agency or any transferee of title to the Plans in connection with the use of the Plans. 4.0 DEVELOPER'S RESPONSIBILITIES During the period of negotiation, Developer shall prepare and submit to the Agency the following documents and perform the following acts, all in furtherance of the negotiation process. 4.1 Status Reports Developer agrees to make oral and written reports advising the Agency and/or its staff of all matters and studies being made, including Developer's progress in analyzing the feasibility of the Project as may be requested by the Agency or its staff. 4.2 Development Team Developer shall within fifteen (15) days of execution of this Agreement submit for approval by the Agency's Executive Director, at his sole discretion, the name(s)and qualifications statement of the proposed architect and related consultants for the Project and submit in writing to the Agency full disclosure of the names of 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, employers. Developer shall also designate and submit in writing to the Agency the names of all Developer's lead negotiators, who shall have authority to make decisions on its behalf. 4.3 Financial Status Developer shall demonstrate to the Agency the financial caPacity and capability to perform its obligations under this Agreement and the DDA. Developer's most recent certified financial statement and the financial statements of its key principal shall be submitted to the' Agency within thirty (30) days of execution of this Agreement. To the extent Developer wants such financial statements to remain confidential, they shall be supplied to the Agency with a request that the confidentiality of the statements be maintained. If confidentiality is requested, the . statements shall be delivered to and maintained by the Agency Counsel and copies not disseminated. To the extent permitted by law, the Agency, including Agency Counsel, shall not make public disclosure of the statements. The City's and Agency's negotiators, and consultants may review the statements as necessary. If Developer determines to joint venture or partner development of the Site, or if Developer determines to form a new legal entity to develop the Site, Developer shall promptly inform the Agency of such determination. The assignment of Developer's fights under this Agreement, the new entity, partnership or joint venture may be approved in writing by the Agency, providing the Agency, at its sole discretion, is satisfied that the new entity, partnerShip or joining venture has the financial capability to perform under this Agreement and the DDA. 4.4 Design Review It is understood and agreed to by Developer that the quality, character and uses proposed for the Project are of particular importance to the Agency and that planning and design review approval by the Agency and the City will be required for the development of the Site. Developer and the proposed architect shall meet with representatives of the Agency and the City to review and come to a clear understanding of the planning and design criteria required by the Agency and the City. Within sixty (60) days atter the date of this Agreement, Developer shall submit for approval of the Agency basic concept drawings and related documents containing the overall plan for development of the Developer's Project. 4.5 Financing Plan/Economic Projection Within sixty (60) days alter the date of this Agreement, Developer shall submit a financing plan and economic projection for the site. The financing plan shall include a detailed statement about the overall costs of Construction and the source and availability of equity capital, acquisition, development and construction financing. The economic projection shall estimate the market demand and income to be derived from the Project and shall include a pro forma statement of the Project' s financial return adequate to enable the Agency to evaluate the economic feasibility of the proposed development of the Project. 4.6 City/Agency Applications Within ninety (90) days after the date of this Agreement, Developer shall submit to the City and to the Agency any necessary applications and required submittals for the City's and the Agency's planning, zoning and design review approvals of the Developer's Project 4.7 Additional Information Developer understands and agrees that the Agency reserves the right at any time to request from Developer additional information, including informatiOn, data and commitments to ascertain the depth of Developer'S capability and desire to develop the Site expeditiously. The Agency will provide a reasonable time in which Developer may obtain and submit to the Agency such additional information. 4.7 Contacts During Negotiations Developer shall only negotiate with the Agency's negotiating team as defined in writing by the Executive Director and with no other persons unless expressly authorized to do so by the Agency's negotiating team. During the period of negotiations, no statements shall be made by Developer to the media without the approval of the Agency's negotiating team. Developer' s compliance with the revisions of this Section shall be conclusive evidence that Developer has "negotiated in good faith." 5.0 MARKET AND OTHER STUDIES 5.1 Market Studies Market and such other studies as the Agency deems appropriate shall be prepared by or on behalf of the Agency to consider and analyze the financial impact of the proposed development in the DDA. The Agency shall, at its sole discretion, select the consultant(s) to perform said Studies and shall enter into contracts with the selected consultants. The Agency shall, at i~s sole discretion, haVe the fight to direct said conSUltant(s) and its staff(s) and to terminate the contract of any consultant which the Agency believes is not adequately or objectively performing its obligations under said contract. Developer shall cooperate with the Agency and its selected consultant(s) in responding to any information requested. 5.2 Environmental Studies The Agency's preparation of environmental studies in accordance with the California Environmental Quality Act ("CEQA") is a legal precondition to the final Agency action of approving and executing the DDA. The Developer shall cooperate with the Agency and abide by the Agency's environmental compliance procedures, and fee requirements, which include but are not limited to, the obligation to deposit funds to pay Agency's costs of preparing the required environmental studies. 6.0 GOOD FAITH DEPOSIT Prior to the execution of this Agreement by the Agency, Developer shall submit to the Agency a good faith deposit in the sum often thousand dollars ($10,000) in the form of a cash deposit, cashier's check, irrevocable letter of credit, or other form Of security acceptable to the Agency to insure that Developer will proceed diligently and in good faith to negotiate and perform all of Developer's Obligations under this Agreement. If the deposit is in cash or a certified cashier's check, it shall be deposited in an interest-bearing account in a bank or trust company selected by the Agency. Interest, if any, shall be added to the deposit and held as additional security for Developer's obligations hereunder. Upon termination or when the Agency and Developer of this Agreement enter into a DDA, the Agency shall return the deposit to Developer provided that Developer has negotiated diligently and in good faith and carried out its · obligations hereunder. If Developer has failed to do so,.inasmuch as the actual damages which would result from a breach by Developer of its obligations under this Agreement are uncertain and would be impractical or extremely difficult to determine, the Agency shall be entitled to retain the entire original amount of said deposit plus interest, if any, which has accrued thereon, as liquidated and agreed damages: By their respective initials set forth below, the Agency and 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 Agency might be entitled by reason of Developer's default. Initials: Developer Agency 7.0 MISCELLANEOUS 7.1 Real Estate Commissions. The Agency shall not be liable for any real estate commission, finder's fee or any broker's fees which may arise from this Agreement. The Agency represents that it has engaged no broker, agent, or finder in connection with this Agreement; and Developer agrees to hold the Agency 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 Developer regarding this Agreement or development of the Project, or purchases/sale of other property at the Site. Notwithstanding the above, the cost resulting from Developer's lawful obligation to pay a broker's fee may be considered by the Agency, at its sole discretion, in the determination of any warranted Agency financial assistance to the project and incorporated into the negotiated DDA. 7.2 No Agency Duty Except as expressly provided above, the Agency shall have no obligations or duties hereunder and no liability whatsoever in the event the Parties fail to timely execute a DDA. Developer Understands and acknowledges that the Agency does not presently own the Site and that prior execution of the DDA, Developer will be involved in negotiations with the owner of the Site in an attempt to acquire the Site by purchase and that the Developer shall have entered into such purchase contract for the' Site as a condition precedent to approval of the DDA.. Developer acknowledges and agrees that the Agency, as of the execution hereof, has not agreed to fund, subsidize or otherwise financially contribute toward the development of the Project. The Agency's financial and other involvement in the Project will be established by the DDA. Any financial participation.by the Agency as established in the DDA will be determined by the Agency, in its sole and absolute discretion, based upon such factors such as market conditions, density of development, cost of development and/or rehabilitation of the Project, risks associated with development of the Project, estimated or actual revenues and profit to be derived from the Project, public purposes associated with development of the Project, and other matters relevant to establishing the fair market value of the Project to be developed, the financial requirements of Developer respecting its acquisition of the Site and development of the Project and the financial benefit to be derived by the Agency from development of the Project. By its execution Of this Agreement, the Agency is not .committing itself to or agreeing to undertake: a) any disposition of land to Developer; or b) any other acts or activities requiring the subsequent independent exercise of discretion by the Agency, the City or any agency or department thereof. The Parties recognize that one or more of the conditions to Developer's proposal set forth herein may fail to be met as a result of subsequent studies, reviews and proceedings involving the exercise of discretion by the Agency, the City or any agency or department thereof. This Agreement does not constitute a disposition of property or exercise of control over property by the Agency or the City and does not require a public heating. Execution of this Agreement by the Agency is merely an agreement to enter into a period of exclusive negotiations according to the terms hereof, reserving final discretion and approval by the Agency and the City as to any DDA and all 'proceedings and decisions in connection herewith. 7.3 Non-liability of Agency Officials and Employees No member, official, representative, director, staff member, attorney or employee of this Agency shall be personally liable to Developer or any successor in interest, in the event of 10 any default or breach by the AgenCY or for any amount which may become due to Developer or to its successor, or on any obligations under the terms of this Agreement. 7.4 Public Hearings and Compliance If the negotiations hereunder culminate in Developer and Agency staff concurring on the terms and provisions of a DDA, such DDA will be considered for approval by the Agency only after all required public hearings have been held and after compliance with all applicable laws and ordinances. 7.5 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 both of the Parties hereunder. If either 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 bythe losing Party. 7.6 Covenant Against DiScrimination 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 Site, nor shall 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 vendees of the Site. 7.7 Indemnity/Relocation · From and after the execution of this Agreement, Developer hereby agrees to indemnify and hold harmless the Agency and the City from and against all Losses and Liabilities 11 related directly or indirectly to, or arising out of or in connection with any claim by tenants or authorized occupants of the Site respecting pre-condemnation or relocation benefits as a result of: a) statements or representations by Developer, including its agents and negotiators; b) the execution of this Agreement; and c) the discussions between the Agency and Developer with respect thereto prior to approval of a DDA. 7.8 Notices' All notices 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 ~hown below, or to any other place designated in writing by such Party. Agency: Tustin community Redevelopment Agency 300 Centennial Way Tustin, California 92780 Attention: Assistant Executive Director Developer: Mr. Richard A. DeBeikes, Jr. President DeBeikes Investment Company 5289 Alton Parkway Irvine, CA 92714 Any such notice shall be deemed received upon delivery, if delivered personally, one.(1) day atter delivery to the courier, if delivered by courier, and three (3) days at~er deposit into the United States mail, if delivered by registered or certified mail. 12 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Dated: AGENCY: Tustin Community Redevelo'>ment Agency By: William A. Huston Executive Director Approved as to form: Lois Jeffrey Agency Counsel DEVELOPER: By: Richard A. DeBeikes, Jr. Presidem DeBeikes Investment Company JD~fordpropXrdaagmt. doc 13 EXHIBIT A SITE MAP 0 50' 100' 0 15u 30M 28.13' pAR. 2 1.'177 AC. SITE 2.85' . LU 143' c, 2.~ PAR. 1 ~ 0 1.454 AC. '* I-. 12: 0 LI.! Z 30.36' (~) 25. 16.97 249.80' 20' 133' EL C AMINO REAL / %