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HomeMy WebLinkAbout09 SECOND AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTIATE (ENA) WITH LINCOLN PROPERTY COMPANY COMMERCIAL, INC.AGENDA REPORT Agenda Item y Reviewed: City Manager Finance Director MEETING DATE: OCTOBER 4, 2016 TO: JEFFREY C. PARKER, CITY MANAGER FROM: ECONOMIC DEVELOPMENT DEPARTMENT SUBJECT: SECOND AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTIATE (ENA) WITH LINCOLN PROPERTY COMPANY COMMERCIAL, INC. SUMMARY Approval is requested to amend the First Amendment to Exclusive Agreement to Negotiate (ENA) with Lincoln Property Company Commercial, Inc. (Developer) by extending the negotiation schedule through November 15, 2016. RECOMMENDATION Authorize the City Manager to execute the attached Second Amendment to 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 870,000 square feet for a creative office campus. Subsequently, in February 2016, the City Council approved the First Amendment to the ENA based on progress in negotiations between the Developer and City. The First Amendment extended the negotiating period to September 27, 2016. The Developer on September 14, 2016 requested an extension of the ENA through November 15, 2016. Based on progress made to date by the Developer, staff is recommending an extension of negotiations through November 15, 2016, providing both parties with the necessary time to finalize and submit the DDA and Development Agreement to the City Council. ..� �-✓�► JeohA.chanan Economic Development Attachment — Second Amendment to Exclusive Agreement to Negotiate between the City of Tustin and Lincoln Property Company Commercial, Inc. SECOND AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTIATE (CORNERSTONE I) THIS SECOND AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTIATE (CORNERSTONE I) ("ENA") is entered into this day of October, 2016 (the "Amendment 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 Second 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 ENA") with respect to approximately 37.4 acres of land at Tustin Legacy (as defined therein) referred to therein as the "Property," as amended by that certain First Amendment to Exclusive Agreement to Negotiate (Cornerstone 1) dated as of February 16, 2016 ("First Amendment"). B. The Original ENA and the First Amendment (together, the "Prior ENA"), as amended by this Second Amendment, shall hereinafter be referred to as the "Agreement." C. Pursuant to the terms of the Prior ENA, the City Manager granted various extensions to the term to September 27, 2016. D. Developer has requested an additional extension of the Prior ENA to November 15, 2016 in order to complete negotiations and submit the DDA and DA (each as defined in the Original ENA) to the City. E. The Parties have agreed to modify the terms and conditions of the Prior ENA on the terms set forth herein to further extend the term of the Agreement to November 15, 2016 in order to complete negotiations and permit the consideration of the entitlements for the proposed project. 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 Prior ENA, unless otherwise expressly stated herein. Tustin Lincoln Second Amendment to ENA-10-4-16—FINAL I 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. Extension of ENA Term. Notwithstanding any other provision of the Prior ENA, the Parties agree that the term of the Agreement and the period of negotiations thereunder shall remain in effect through November 15, 2016 (the "Amended Termination Date"). If by 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 ENA. 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 Prior ENA and in this Amendment to "this Agreement" or the "ENA" shall mean and refer to the Prior ENA as modified by this Amendment. 7. No Other Changes. Except as modified by the terms of this Amendment, the terms of the Prior ENA shall remain unmodified and in full force and effect. Only those provisions of the Prio ENA specifically amended herein shall be affected by this Amendment. In the event of any conflict or inconsistency between the terms of the Prior ENA 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. (remainder of page is blanklsignatures commence on following page) Tustin Lincoln Second Amendment to ENA-10-4-16—FINAL 2 IN WITNESS WHEREOF, the City and Developer hereto have executed this Second Amendment as of the Amendment Effective Date set forth above. Dated: APPROVED AS TO FORM David Kendig City Attorney "CITY" City of Tustin By: Jeffrey C. Parker City Manager "DEVELOPER" Lincoln Property Commercial Inc. , a Texas corporation Name: Title: Tustin Lincoln Second Amendment to ENA-10-4-16—FINAL 3