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HomeMy WebLinkAbout05 AMENDMENT TO ENA WITH LINCOLN PROPERTY CO.-- • Agenda Item 5 AGENDA REPORT Reviewed: City Manager ' Finance Director NIA MEETING DATE: FEBRUARY 16, 2016 TO: JEFFREY C. PARKER, CITY MANAGER FROM: CITY MANAGER'S OFFICE — ECONOMIC DEVELOPMENT DIVISION SUBJECT: FIRST AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTATE (ENA) WITH LINCOLN PROPERTY COMPANY COMMERCIAL, INC. SUMMARY Approval is requested to amend the Exclusive Agreement to Negotiate (ENA) with Lincoln Property Company. Commercial, Inc. (Developer) by extending the negotiation schedule through August 28, 2016. RECOMMENDATION Authorize the City Manager to execute the attached First Amendment to the ENA between the City and Lincoln Property Company Commercial, Inc., 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 Attorney. FISCAL IMPACT Under the terms of the original ENA, City transaction expenses will continue to be funded by the Developer's good faith deposit. If negotiations are successful, staff will present to the City Council a Disposition and Development Agreement (DDA) for consideration. COORELATION TO THE STRATEGIC PLAN This action correlates to the City's Strategic Plan for Economic and Neighborhood Development (Goal A). DISCUSSION On June 2, 2015, the City entered into an ENA with the Developer to negotiate the development of approximately 860,000 square feet in creative office and related uses. The ENA allowed for an initial negotiation period of 180 days with two 60 day extensions at the discretion of the City Manager. The City Manager has approved one 60 day extension and one 30 day extension, with the 30 day negotiation period expiring February 28, 2016. On Agenda Report— ENA February 16, 2016 Page 2 of 2 January 27, 2016, the Developer submitted to the City a Development Application for Phase 1, 18.7 acres of the 38.7 acre site. Staff and the Developer have made considerable progress in the negotiation process; therefore, staff is recommending a 180 day extension of negotiations through August 28, 2016, with one 30 day extension at the discretion of the City Manager. This will provide both parties with the necessary time to finalize the DDA and for the Developer to secure entitlements. •ohn Buchanan 9-e. Director, Economic Development City Manager's Office Attachment — First Amendment to Exclusive Agreement to Negotiate between the City of Tustin and Lincoln Property Company Commercial, Inc. FIRST AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTIATE (CORNERSTONE I) THIS EXCLUSIVE AGREEMENT TO NEGOTIATE (CORNERSTONE I) ("ENA") is entered into this day of February, 2016 (the "Effective Date") by and between THE CITY OF TUSTIN (the "City") and LINCOLN PROPERTY COMPANY COMMERCIAL, INC., a Texas corporation ("Developer"), with respect to certain land referred to herein as the "Property" (defined below). The City and Developer (each, a "Party" and collectively, the"Parties") hereby agree as follows: RECITALS This 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 (Cornerstone 1), dated as of June 2, 2015 ("Original Agreement") with respect to approximately 37.4 acres of land at Tustin Legacy (as defined therein) referred to therein as the "Property." B. The Original Agreement, as amended by this Amendment, shall hereinafter be referred to as the "Agreement." C. The Original Agreement was set to expire on November 30, 2015. Pursuant to Section 4.2.2 of the Original Agreement, the City Manager granted one 60 day extension (to January 28, 2016) and one additional 30 day extension to the term of the Original Agreement, with the effect that the Original Agreement was extended to February 28, 2016. D. Developer has requested an additional extension of the Original Agreement to August 28, 2016 in order to complete negotiations and submit the DDA and DA (each as defined in the Original Agreement) to the City. The Parties have agreed to modify the terms and conditions of the Original Agreement on the terms set forth herein to further extend the term of the Agreement. E. It is the intent of the Parties that there remain an additional 30 day extension pursuant to Section 4.2.2 of the Original Agreement which may be granted by City Manager in his sole discretion in accordance with the terms of the Original Agreement. AGREEMENT NOW, THEREFORE, in consideration of the mutual terms, covenants, conditions and promises set forth herein, the City and Developer agree as follows: 1. Definitions. All capitalized terms used herein shall have the definitions given in the Original Agreement, unless otherwise expressly stated herein. Tustin Lincoln First Amendment to ENA-2-10-2016 1 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 Original Agreement. 3. Extension of ENA Term. The Parties agree that, unless otherwise extended in accordance with the terms of the Agreement, the Agreement and the period of negotiations thereunder shall remain in effect until August 28, 2016. If by the later of (a) August 28, 2016 or (b) the expiration of the thirty(30) day extension remaining under Sections 4.2.2 and 4.2.3 of the Original Agreement (the "Amended Termination Date"), Developer or the Joint Venture has not signed Transaction Documents in form and substance prepared and approved by the City in its sole discretion, then the Agreement shall automatically terminate. Nothing herein shall amend or modify the obligations of Developer with respect to submittal of the DDA and DA pursuant to Section 4.2.4 of the Original Agreement. 4. Authority. 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 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 Amendment. 6. Terms. Unless otherwise expressly indicated herein, all references in the Original Agreement and in this Amendment to "this Agreement" or the "ENA" shall mean and refer to the Original Agreement as modified by this Amendment. 7. No Other Changes. Except as modified by the terms of this Amendment, the terms of the Original Agreement shall remain unmodified and in full force and effect. Only those provisions of the Original Agreement specifically amended herein shall be affected by this Amendment. In the event of any conflict or inconsistency between the terms of the Original Agreement and this Amendment, the terms of this Amendment shall control. 8. Effective Date of Amendment. The 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 ENA as of the Effective Date set forth above. (remainder of page is blank/signatures commence on following page} Tustin Lincoln First Amendment to ENA-2-10-2016 2 "CITY" City of Tustin Dated: By. Jeffrey C. Parker City Manager APPROVED AS TO FORM By: David Kendig City Attorney "DEVELOPER" Lincoln Property Commercial Inc. , a Texas corporation By: Name: Title: • Tustin Lincoln First Amendment to ENA-2-10-2016 3