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Home My WebLink About12 3RD AMENDMENT TO ENA WITH REGENCY CENTERS ACQUISITIONSAGENDA REPORT MEETING DATE: JUNE 16, 2015 TO: JEFFREY C. PARKER, CITY MANAGER Agenda Item 12 / Reviewed: City Manager Finance Director FROM: CITY MANAGER'S OFFICE — ECONOMIC DEVELOPMENT DIVISION SUBJECT: DISPOSITION PACKAGE 1C WEST — 3rd AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT (ENA) WITH REGENCY CENTERS ACQUISITIONS, LLC. SUMMARY: Approval is requested to amend the ENA with Regency Centers Acquisition, LLC (Developer) to modify the negotiation schedule, and related changes. RECOMMENDATION: Authorize the City Manager to execute the attached 3rd Amendment to the ENA between the City and Regency Centers Acquisition, LLC subject to any non -substantive modifications as may be deemed necessary and/or recommended by the City's special real estate counsel or the City Attomey. FISCAL IMPACT: Under the 3rd Amendment, the Developer will be required to make an additional non-refundable deposit of $50,000 within 10 business days to cover City expenses. BACKGROUND: On June 4, 2015 the Developer submitted to the City a Development Application for the 22.7 acre site for a neighborhood retail center located on the southern portion of the site and a medical office building and related healthcare uses on the northern portion of the site. The Developer has made significant progress in securing leases for a grocer and a drugstore as anchor tenants for the neighborhood retail center. In addition, the Developer has made significant progress in securing a developer for the medical office and related uses. Staff has been monitoring the Developer's progress, and therefore is recommending the extension of negotiations through September 30, 2015 in order to allow time to finalize the DDA and for the Developer to secure entitlements. John A. Buchanan Deputy Director, Economic Development Attachment: 3rd Amendment to the Exclusive Right to Negotiate THIRD AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTIATE (WESTERLY DISPOSITION PACKAGE 1C) THIS THIRD AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTIATE (WESTERLY DISPOSITION PACKAGE IC) ("Third Amendment') is made as of June 16, 2015 (the "Third Amendment Effective Date"), by and between THE CITY OF TUSTIN (the "City") and REGENCY CENTERS ACQUISITION, LLC, a Florida limited liability company ("Developer"). The City and Developer are individually referred to as a "Party" and collectively referred to as the "Parties." RECITALS This Third Amendment is entered upon the basis of the following facts, understandings and intentions of the Parties. A. The Parties entered into that certain Exclusive Agreement to Negotiate (Disposition Package 1 C), dated as of August 7, 2012 ("Original ENA") with respect to certain land referred to therein as the "1C Property," as amended by that certain First Amendment to Exclusive Agreement to Negotiate (Westerly Disposition Package 1C) dated as of April 4, 2014 ("First Amendment') and that certain Second Amendment to Exclusive Agreement to Negotiate (Westerly Disposition Package 1C) dated as of December 16, 2014 (the "Second Amendment'). B. The Original ENA, the First Amendment and the Second Amendment (together, the "Prior ENA"), as amended by this Third Amendment, shall hereinafter be referred to as the "Agreement." C. Pursuant to the terms of the Prior ENA, and upon payment by Developer of the ENA Deposit, the Staff Costs Deposit, the Initial Non -Refundable Deposits (as defined below) and the Additional Extension Deposit described therein, the City granted various extensions to the term to June 30, 2015. D. The Parties have agreed to modify the terms and conditions of the Prior ENA on the terms set forth herein to (1) further extend the term of the Agreement to September 30, 2015 in order to permit the completion of the entitlements for the proposed project and the consideration of the DDA, the DA and certain additional agreements by the City and (2) to further modify the deposit provisions and certain other terns of the Prior ENA, as further set forth below. AGREEMENT NOW, THEREFORE, in consideration of the mutual terms, covenants, conditions and promises set forth herein, the City and Developer agree as follows: Tustin Regency 3rd Amendment to ENA 6-15-2015(2) 1. Definitions. All capitalized terms used herein shall have the definitions given in the Prior ENA, unless otherwise expressly stated herein. 2. Negotiation in Good Faith; Extension of Term. Each of the Parties acknowledges that the other has negotiated diligently and in good faith during the initial period of the Prior ENA. 3. Terms for Grant of Additional Extensions. The provisions of Section 4.2.2 and 4.2.3 of the Prior ENA are hereby deleted and replaced with the following: "4.2.2 ENA Extensions. (a) Initial Non -Refundable Deposits. The term of this Agreement has previously been extended by the City for two additional periods upon payment by Developer to the City of the following extension deposits, each of which have been made fully non-refundable and not applicable to the purchase price of the 1C Property, as further set forth in Section 4.2.3 and 4.3.3 of this Agreement (collectively, the "Initial Non -Refundable Deposits"): (i) To secure an extension of the Amended Termination Date until June 30, 2014, Developer has made an additional $100,000 nonrefundable deposit on or before December 31, 2013; (ii) To secure an additional extension of the Amended Termination Date from June 30, 2014 until December 31, 2014, Developer has made an additional $100,000 non-refundable deposit on or before June 30, 2014. (b) Additional Extension Deposit. In accordance with the terms of the Second Amendment, and to secure an additional extension of the Amended Termination Date from December 31, 2014 to June 30, 2015, Developer made an additional $100,000 deposit ("Additional Extension Deposit") on or before December 18, 2014, which Additional Extension Deposit is and shall be non- refundable in all cases, provided that the DDA shall provide that the Additional Extension Deposit shall be applicable to the purchase price for the 1 C Property. (c) Third Amendment Extension Deposit. To secure an additional extension of the Amended Termination Date from June 30, 2015 to September 30, 2015, Developer shall make an additional Fifty Thousand Dollar ($50,000) deposit ("Third Non -Refundable Deposit"; and together with the Initial Non - Refundable Deposits, the "Non -Refundable Deposits"), which Third Non - Refundable Deposit shall be due and payable on or before June 30, 2015 ("Outside Deposit Date"). In the event Developer does not make the Third Non - Refundable Deposit on or before the Outside Deposit Date, this Agreement shall automatically terminate on the Outside Deposit Date without further action of the Parties. Tustin Regency 3rd Amendment to ENA 6-15.2015(2) 2 (d) Termination. If, by September 30, 2015 (the "Amended Termination Date"), as the same may be extended pursuant to either Section 4.2.2(e) of this Agreement or action of the City Council, Developer has not signed a DDA and DA in form and substance prepared and approved by the City staff in its sole discretion and submitted such documents to the City for consideration pursuant to Section 4.2.4 of this Agreement, this Agreement shall automatically terminate." (e) Authority of City Manager to Extend Upon Additional Request. The City hereby delegates to the City Manager, or designee, the authority, in his or her sole discretion, to grant to Developer one (1) additional thirty (30) calendar day extension to the Amended Termination Date, to October 30, 2015, upon determination by the City Manager or designee in his or her sole and absolute discretion that 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. The City shall have the right, in its sole discretion, to determine not to extend the ENA for any reason. 4.2.3 Non -Refundable Deposits Fully Non -Refundable And Not Applicable. As consideration for the agreement of the City to further extend the ENA and the period of negotiations under this Agreement, Developer acknowledges and agrees that, notwithstanding any other provision of this Agreement, the Non -Refundable Deposits shall be fully non-refundable in all cases and shall not be applicable to the purchase price for the 1 C Property." 4. Authoritv. The persons signing below represent that they have the authority to bind their respective party, and that all necessary board of directors', shareholders', partners', agency's or other approvals have been obtained. 5. Counterparts. This Third Amendment may be signed by different parties hereto in counterparts with the same effect as if the signatures to each counterpart were upon a single instrument. All counterparts shall be deemed an original of this Third Amendment. 6. Terms. Unless otherwise expressly indicated herein, all references in the Prior ENA and in this Third Amendment to "this Agreement' or the "ENA" shall mean and refer to the Prior ENA as modified by this Third Amendment. 7. No Other Changes. Except as modified by the terms of this Third Amendment, the terms of the Prior ENA shall remain unmodified and in full force and effect. Only those provisions of the Prior ENA specifically amended herein shall be affected by this Third Amendment. In the event of any conflict or inconsistency between the terms of the Prior ENA and this Third Amendment, the terms of this Third Amendment shall control. Tustin Regency 3rd Amendment to ENA 6.15.2015(2) 3 8. Effective Date of Amendment. The Third Amendment Effective Date first set forth above shall be the effective date of this Amendment. IN WITNESS WHEREOF, the City and Developer hereto have executed this Third Amendment as of the date set opposite their signatures. Dated: APPROVED AS TO FORM LE David Kendig, City Attorney Armbruster Goldsmith & Delvac LLP Special Tustin Counsel Un Amy E. Freilich "CITY" CITY OF TUSTIN ma Jeffrey C. Parker City Manager "DEVELOPER" REGENCY CENTER ACQUISTION, LLC By: Regency Centers, L.P., a Delaware limited partnership, its Manager By: Regency Centers Corporation, a Florida corporation, its General Partner John T. Mehigan Vice President, Investments Tustin Regency 3rd Amendment to ENA 6-15-2015(2) 4