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Home My WebLink About04 FIRST AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT WITH SCHOOLSFIRST FEDERAL CREDIT UNIONAGENDA REPORTSri MEETING DATE: APRIL 3, 2018 TO: JEFFREY C. PARKER, CITY MANAGER FROM: ECONOMIC DEVELOPMENT DEPARTMENT Agenda Item Reviewed: F� . City Manager f ' Finance Director N/A SUBJECT: FIRST AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT WITH SCHOOLSFIRST FEDERAL CREDIT UNION SUMMARY: Request City Council approval to enter into a First Amendment to the Exclusive Negotiation Agreement (ENA) with SchoolsFirst Federal Credit Union ("SchoolsFirst") by extending the negotiation schedule through October 16, 2018. RECOMMENDATION: Authorize the City Manager to enter into a First Amendment to an Exclusive Negotiation Agreement by and between the City of Tustin and SchoolsFirst Federal Credit Union, 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 ENA, City transaction expenses are funded up to Fifty Thousand Dollars ($50,000) through SchoolsFirst's good faith deposit to the City. If negotiations are successful, staff will present to City Council a Disposition and Development Agreement (DDA) for consideration, which will include the City's sale price of the property. COORELATION TO STRATEGIC PLAN: The ENA with SchoolsFirst aligns with Goal A — Economic and Neighborhood Development, developing a disposition and entitlement strategy for City -owned property in Pacific Center East. BACKGROUND: On February 21, 2017, the City entered into an ENA with SchoolsFirst to negotiate the development of an approximate 185,000 square foot office building to serve as Agenda Report April 3, 2018 Page 2 SchoolsFirst's corporate headquarters. The ENA allowed for an initial negotiation period of ten months with two 60 -day extensions at the discretion of the City Manager. The City Manager has approved both 60 -day extensions, with the second extension expiring April 19, 2018. Although staff and SchoolsFirst have made progress in the negotiation process, additional time is needed to finalize the DDA and for SchoolsFirst to develop their concept plans. SchoolsFirst just recently selected their Architect and they anticipate submitting their initial concept plans in April. Staff is recommending a six-month extension for the negotiations through October 16, 2018, with one extension through November 20, 2018, at the discretion of the City Manager. This will provide both parties with the necessary time to finalize the DDA and for SchoolsFirst to secure entitlements. Staff are available to answer any questions the City Council may have. (johnuchanan Director of Economic Development Jerry Craig f 1 Deputy Diree, r of/ ono is Development Attachments: First Amendment to Exclusive Negotiation Agreement By and Between the City of Tustin and SchoolsFirst Federal Credit Union FIRST AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT BY AND BETWEEN THE CITY OF TUSTIN AND SCHOOLSFIRST FEDERAL CREDIT UNION THIS FIRST AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is entered into this day of , 2018 (the "Amendment Effective Date") by and between the CITY OF TUSTIN (the "City") and SCHOOLSFIRST FEDERAL CREDIT UNION, a federally chartered credit union ("SchoolsFirst"). The City and SchoolsFirst (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 Negotiation Agreement by and between the City of Tustin and SchoolsFirst Federal Credit Union, with an Effective Date of February 21, 2017 ("Original Agreement") with respect to certain land referred to therein as the Development Parcels. B. . The Original Agreement, as amended by this Amendment, shall hereinafter be referred to as the "ENA". C. The Initial ENA Negotiating Period (as defined in the Original Agreement) set forth in the Original Agreement had a term of ten (10) months following the Effective Date thereof. Pursuant to Section 4.2.2 of the Original Agreement, the City Manager granted two extensions of sixty (60) days each to the Initial ENA Negotiating Period, with the effect that the Initial ENA Negotiating Period was extended to April 19, 2018. D. SchoolsFirst has requested an additional extension of the Initial ENA Negotiating Period to October 16, 2018 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 ENA. E. It is the intent of the Parties that the City Manager be provided discretion to grant one additional extension of the ENA to November 16, 2018 as further set forth below. AGREEMENT NOW, THEREFORE, in consideration of the mutual terms, covenants, conditions and promises set forth herein, the City and SchoolsFirst agree as follows: Tustin Schoolsfirst First Amendment To 1 City of Tustin/SchoolsFirst ENA -3-20-2018 Jc Federal Credit Union I . Definitions. All capitalized terms used herein shall have the definitions given in the Original Agreement, 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 ENA Negotiating Period set forth in the Original ENA. 3. Extension of ENA Term. 3.1. Extension of Initial ENA Negotiating Period. The Parties agree that the Initial ENA Negotiating Period is hereby extended and shall remain in effect until October 16, 2018. 3.2. Additional Extension. SchoolsFirst may request from the City an additional extension of the Initial ENA Negotiating Period by provision of written notice of such request not later than October 10, 2018. The City hereby delegates to the City Manager the authority to grant the extension specified in this Section 3.2 upon determination by the City Manager in his or her sole discretion that SchoolsFirst has negotiated diligently and in good faith and that reasonable and sufficient progress has been made toward fulfillment of the requirements of the ENA. 3.3. Outside Termination Date. If by the later of (a) October 16, 2018 or (b) the expiration of any extension granted by the City Manager pursuant to Section 3.2 of this Amendment (the "Amended Termination Date"), SchoolsFirst has not signed Transaction Documents in form and substance prepared and approved by the City in its sole discretion, then the Initial ENA Negotiating Period and the ENA shall automatically terminate. Nothing herein shall amend or modify the obligations of SchoolsFirst with respect to submittal of the DDA and DA pursuant to Section 4.2.5 of the Original Agreement. 3.4. Deletion of Section 4.2.3 of Original ENA. The provisions of Section 4.2.3 of the Original Agreement are hereby deleted in their entirety. 4. Authority. The persons signing below represent that they have the authority to bind their respective Party, and that all necessary approvals from their respective board of directors and elected officials have been obtained. 5. Counterparts. This Amendment may be signed in counterparts each of which shall constitute an original and all of which together shall constitute one and the same agreement. 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", "the Agreement" or the "ENA" shall mean and refer to the Original Agreement as modified by this Amendment. Tustin Schoolsfirst First Amendment To 2 City of Tustin/SchoolsFirst ENA -3-20-2018 Jc Federal Credit Union 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 SchoolsFirst hereto have executed this ENA as of the Effective Date set forth above. (remainder of page is blank/signatures commence on following page) Tustin Schoolsfirst First Amendment To 3 City of Tustin/SchoolsFirst ENA -3-20-2018 Jc Federal Credit Union Dated: APPROVED AS TO FORM David Kendig City Attorney "CITY" City of Tustin By: Jeffrey C. Parker City Manager "SCHOOLSFIRST" SCHOOLSFIRST FEDERAL CREDIT UNION, a federally chartered credit union m. Name: Bill Cheney Title: President/CEO Tustin Schoolsfirst First Amendment 'Co 4 City of Tustin/SchoolsFirst ENA -3-20-2018 Jc Federal Credit Union