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Home My WebLink About06 THIRD AMENDMENT TO ENA WITH SCHOOLSFIRST FEDERAL CREDIT UNIONAgenda Item 6 Reviewed: AGENDA REPORT City Manager Finance Director MEETING DATE: MAY 7, 2019 TO: MATTHEW S. WEST, CITY MANAGER FROM: ECONOMIC DEVELOPMENT DEPARTMENT SUBJECT: THIRD AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT WITH SCHOOLSFIRST FEDERAL CREDIT UNION SUMMARY: Third Amendment to the Exclusive Negotiation Agreement (ENA) with SchoolsFirst Federal Credit Union (SchoolsFirst) extending the negotiating period to September 24, 2019. RECOMMENDATION: That the City Council authorize the City Manager to execute the Third 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 City entered into a First Amendment to the ENA on April 4, 2018, extending the negotiation period to October 16, 2018 with an additional extension authorized by the City Manager to November 20, 2018. On Agenda Report May 7, 2019 Page 2 November 6, 2018, the City Council authorized a Second Amendment to the ENA through January 15, 2019. SchoolsFirst has requested a Third Amendment to the ENA with an extension through September 24, 2019 and the Amendment will retroactively apply to January 15th. Staff is recommending City Council approve their request by authorizing the Third Amendment. jJorhB—uchanan Jerry Craig f Economic Development Deputy Din Kenneth Piguee Management Analyst II Attachment: Third Amendment to Exclusive Negotiation Agreement is Development THIRD AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT BY AND BETWEEN THE CITY OF TUSTIN AND SCHOOLSFIRST FEDERAL CREDIT UNION THIS THIRD AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT ("Third Amendment") is entered into this day of May 2019 (the "Third 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") 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') and by that certain Second Amendment to Exclusive Negotiation Agreement between the City of Tustin and SchoolsFirst Federal Credit Union, with an effective date of November 6, 2018 ("Second Amendment"; collectively with the Original Agreement, and the First Amendment, 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 executed pursuant to letter dated October 17, 2018 and accordingly, the Initial ENA Negotiating Period,was extended to November 20, 2018. C. The Second Amendment extended the Initial Negotiating Period to January 15, 2019. D. SchoolsFirst has requested an additional extension of the Initial ENA Negotiating Period to September 24, 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. 3rd Amendment to Schoolsfirst ENA 1 City of Tustin/SchoolsFirst Federal Credit Union Third ENA Amendment AGREEMENT 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. 2. Nezotiation 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 September 24, 2019. 3.2 Outside Termination Date. If by September 24, 2019 (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. Sections 3.2 and 3.3 of the Second Amendment 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 Third 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 Third Amendment. 6. Terms. Unless otherwise expressly indicated herein, all references in the Existing ENA or in this Third Amendment to "this Agreement", " the Agreement" or the "ENA" shall mean and refer to the Existing 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 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 Third Amendment. In the event of any conflict or inconsistency between the terms of the Existing ENA and this Third Amendment, the terms of this Third Amendment shall control. 3rd Amendment to Schoolsfirst ENA 2 City of Tustin/SchoolsFirst Federal Credit Union Third ENA Amendment 8. Retroactive Application of Third Amendment. The Parties agree that this Third Amendment shall retroactively apply to January 15, 2019, the expiration date of the Initial ENA Negotiating Period pursuant to the Second Amendment. IN WITNESS WHEREOF, the City and SchoolsFirst hereto have executed this Third Amendment as of the Third Amendment Effective Date set forth above. Dated: APPROVED AS TO FORM David E. Kendig, City Attorney "CITY" City of Tustin Matthew S. West City Manager "SCHOOLSFIRST" SCHOOLSFIRST FEDERAL CREDIT UNION, a federally chartered credit union Bill Cheney President/CEO 3rd Amendment to Schoolsfirst ENA 3 City of Tustin/SchoolsFirst Federal Credit Union Third ENA Amendment