HomeMy WebLinkAbout04 SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT WITH SCHOOLSFIRST FEDERAL CREDIT UNIONREPORTAGENDA
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Agenda Item 4
Reviewed:
City Manager
Finance Director
MEETING DATE: NOVEMBER 6, 2018
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: ECONOMIC DEVELOPMENT DEPARTMENT
SUBJECT: SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION
AGREEMENT WITH SCHOOLSFIRST FEDERAL CREDIT UNION
Second Amendment to the Exclusive Negotiation Agreement (ENA) with SchoolsFirst
Federal Credit Union (SchoolsFirst) extending the negotiating period to January 15,
2019.
RECOMMENDATION:
That the City Council authorize the City Manager to execute the Second Amendment to
the ENA, 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.
CORRELATION TO THE STRATEGIC PLAN:
Goal A — Economic and Neighborhood Development
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
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.
Agenda Report
November 6, 2018
Page 2
The City entered into a First Amendment to the ENA on April 4, 2018 to extend the
negotiation period to October 16, 2018 with an additional extension that was authorized
by the City Manager to November 20, 2018.
Staff and SchoolsFirst have made significant progress in the negotiation process;
however, additional time is needed to finalize the DDA and Development Agreement
(DA). Staff is recommending a two-month extension to the negotiation period through
January 15, 2019, with one extension through February 19, 2019 at the discretion of the
City Manager.
Staff is available to respond to any questions the City Council may have.
,John Ouchanan
<Direcfor of Economic Development
a 9---,
Kenneth Piguee
Management Analyst II
Attachment: Second Amendment to Exclusive Negotiation Agreement
pment
SECOND AMENDMENT TO
EXCLUSIVE NEGOTIATION AGREEMENT
BY AND BETWEEN THE CITY OF TUSTIN AND SCHOOLSFIRST
FEDERAL CREDIT UNION
THIS SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT
("Second Amendment") is entered into this day of November, 2018 (the "Second
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") as amended by that certain First Amendment to
Exclusive Negotiation Agreement between the City of Tustin and SchoolsFirst Federal Credit
Union, with an Effective Date of April 4, 2018 ("First Amendment"; collectively with the
Original Agreement, the "Existing ENA") with respect to certain land referred to therein as the
Development Parcels.
B. The First Amendment extended the Initial ENA Negotiating Period to October 16,
2018 and provided the City Manager discretion to grant one additional extension of the ENA to
November 20, 2018, which the City Manager exercised pursuant to letter dated October 17,, 2018
and accordingly, the Initial ENA Negotiating Period has been extended to October 17, 2018.
C. SchoolsFirst has requested an additional extension of the Initial ENA Negotiating
Period to January 15, 2019 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 Existing ENA.
D. It is the intent of the Parties that the City Manager be provided discretion to grant
one additional extension to the Existing ENA to February 19, 2019 as further set forth below.
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NOW, THEREFORE, in consideration of the mutual terms, covenants, conditions and
promises set forth herein, the City and SchoolsFirst agree as follows:
1. Definitions. All capitalized terms used herein shall have the definitions given in
the Existing ENA, unless otherwise expressly stated herein.
1356124,1
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 ENA Negotiating Period
set forth in the Existing 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 January 15,
2019,
3.2. Additional Extension. SchoolsFirst may request from the City an additional
extension of the Initial ENA Negotiating Period to February 19, 2019 by provision of written notice
of such request not later than January 9, 2019. 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) January 15, 2019, or (b) the
expiration of any extension granted by the City Manager pursuant to Section 3.2 of this Second
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. Section 3.3 of the First Amendment is
hereby deleted in its 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 Second 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 Second Amendment.
6. Terms. Unless otherwise expressly indicated herein, all references in the Existing
ENA and in this Second Amendment to "this Agreement", "the Agreement" or the "ENA" shall
mean and refer to the Existing ENA as modified by this Second Amendment.
7. No Other Changes. Except as modified by the terms of this Second Amendment,
the terms of the Existing ENA shall remain unmodified and in full force and effect. Only those
provisions of the Existing ENA specifically amended herein shall be affected by this Second
Amendment. In the event of any conflict or inconsistency between the terms of the Existing ENA
and this Second Amendment, the terms of this Second Amendment shall control.
1356124.1
8. Effective Date of Second Amendment. The Second Amendment Effective Date
first set forth above shall be the effective date of this Second Amendment.
IN WITNESS WHEREOF, the City and SchoolsFirst hereto have executed this
Second Amendment as of the Second Amendment Effective Date set forth above.
Dated:
APPROVED AS TO FORM
David E. Kendig,
City Attorney
1356124.1
44CITY"
City of Tustin
IN
Jeffrey C. Parker
City Manager
"SCHOOLSFIRST"
SCHOOLSFIRST FEDERAL CREDIT UNION,
a federally chartered credit union
Bill Cheney
President/CEO