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HomeMy WebLinkAboutTPFA 02 ENA PARTNERS 06-06-05 8 AGENDA REPORT Agenda Item TPFA 2 Rewewed: I ~~~ City Manager ~ Finance Director N/A MEETING DATE: JUNE 6, 2005 FROM: WILLIAM A. HUSTON, CITY MANAGER CHRISTINE SHINGLETON, ASSISTANT CITY MANAGER TO: SUBJECT: SECOND AMENDMENT TO EXCLUSIVE AGREEMENT TO NEGOTIATE WITH TUSTIN COMMUNITY PARTNERS, LLC FOR THE TUSTIN LEGACY MASTER DEVELOPER SITE SUMMARY Approval is requested for a Second Amendment to the Exclusive Agreement to Negotiate with Tustin Legacy Community Partners, LLC. RECOMMENDATION It is recommended that the Tustin Public Financing Authority authorize the City Manager to execute the Second Amendment to the Exclusive Agreement to Negotiate (ENA) between the City, the Tustin Public Financing Authority and Tustin Legacy Community Partners (TLCP), LLC. FISCAL IMPACT TLCP has been depositing funds to cover City costs of planning and negotiations to date. The intent of the continuing negotiation period is to complete Phases II through V in order that the City may then complete a final Disposition and Development Agreement (DDA) for City Council consideration. There will likely be direct financial impacts from the eventual development of the Tustin Legacy Master Developer site. Fiscal impacts will be evaluated as part of the negotiation process and summarized for the City Council when the DDA is brought forward for consideration. BACKGROUND The Tustin City Council previously selected TLCP for negotiations on the development of an approximate 700 acre Master Developer site at Tustin Legacy. A Exclusive Negotiation Agreement (ENA) was executed for the project on November 1, 2003. The ENA identified the following phases in the planning and negotiation process: Phase I -- Preliminary Master Development Plan (PMDP) Page 2 Phase 11-- Refinement of Master Development Plan (MDP) & Infrastructure Plans & completion of Preliminary Business Plan Phase III--Preparation of Master Development Package Phase IV-- Negotiation of Term Sheet and completion of a DDA Based on revisions to the Master Development Plan requested by the City Council In June 2004, the Developer subsequently requested the First Amendment to the ENA in October 2004 to reflect completion of Phase II by December 15, 2004 and Phase IV by August 1, 2005. Provisions of the First Amendment permitted the City upon a request from the TLCP and demonstration of signficant progress by TLCP, to provide certain extensions for completion of Phases II through IV, all of which have now been exhausted. The last extension granted for submittal of the Preliminary Business Plan under Phase II was April 18, 2005 (this automatically pushed out completion of Phase IV, the DDA until December 15). The Refined Master Development Plan was reviewed by the City Council on November 1, 2004 with specific direction provided to City staff. TLCP subsequently has been working diligently on completion of the Preliminary Business Plan. The complete Preliminary Business Plan was submitted to the City on May 23, 2005, with all required information. This now necessitates a Second Amendment to the ENA to reflect modifications to the schedule for completion of remaining Phases of the planning and negotiations process. The Developer has made reasonable and sufficient progress towards fulfillment of the requirements of the ENA. Accordingly, we would recommend an extension of time of the negotiation period identified in the First Amendment to the ENA to permit completion by the Developer of Phases III through IV by January 20, 2004, unless additional time is necessary subject to written agreement of the City and the Tustin Public Financing Authority. All other terms of the original ENA and First Amendment to the ENA, unless altered by the Second Amendment to the ENA would continue to remain in effect. /c' Christine Shingleton Assistant City Manager SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT THIS SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT (this "Second ENA Amendment") dated as of June 6, 2005 ("Amendment Effective Date") is entered into by and among THE CITY OF TUSTIN (the "City"), the Tustin Public Financing Authority (the "Authority"; the Authority and the City collectively, the "Agencies"), and TUSTIN LEGACY COMMUNITY PARTNERS, LLC, a Delaware limited liability company (the "Developer"). The City, the Authority and the Developer (collectively, the "Parties") hereby agree as follows: RECITALS A. Reference is made to that certain Exclusive Negotiation Agreement (Master Development Site) dated as of November 1,2003 (the "Effective Date"), by and among the Agencies and Developer (the "Original ENA") and the First Amendment to the Exclusive Negotiation Agreement (the "First Amendment"; with the Original ENA, the "Prior ENA"). B. The Parties have made substantial progress towards completing the various tasks established in Phase I and II of the Master Development Planning Process as specified in Section 2.2.1 of the Prior ENA. C. At the request of the Developer, the City has previously granted two extensions of the Master Development Planning Process, pursuant to Section 2.2.3 of the Prior ENA, in order to extend the time for completion of Phase II, III and IV of the Master Development Planning Process. D. The Parties now desire to amend the Prior ENA to extend the dates for completion of Phases II, III and IV of the Master Development Planning Process and to extend the ENA TenTI set forth in the Prior ENA, in order to reflect the extensions granted with respect to Phases I, II, III and IV of the Master Development Planning Process, and to provide for certain additional amendments to the Original ENA as provided herein. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agencies and Developer hereby agree as follows: AGREEMENT 1. Definitions. Capitalized tenTIS used and not otherwise defined in this ENA Amendment shall have the same meanings given to them in the Original ENA. From and after the Amendment Effective Date, all references in the Original ENA or in the First Amendment to "this Agreement" shall be deemed to refer to the Prior ENA as amended by this Second ENA Amendment. (a) Section 2.2.1 ofthe First Amendment is hereby deleted in its entirety and replaced with the following: TUSTIN LEGACY MASTER DEV>ENA-v-l] A-I Exclusive Negotiation Agreement (Master Development Site) "2.2.1 Notwithstanding the period of exclusive negotiations established by this Agreement and in addition to the tennination rights set forth in Section 2.2.4, if either the City or the Authority detennines in its sole discretion and notifies Developer in writing (a) at any time that the Developer is not negotiating diligently or in good faith or (b) that the Parties have failed to make substantial progress in accordance with the Schedule ofPerfonnance, including completing Phase I of the Master Development Planning Process not later than March I, 2004, , Phase II ofthe Master Development Planning Process not later than May 23,2005, Phase III of the Master Development Planning Process not later than July 25, 2005 and Phase IV of the Master Development Planning Process not later than January 23, 2006 or (c) that on or before July 25,2005 that the Parties have not completed Phases I through III of the Master Development Planning Process sufficient to allow final negotiation and preparation of the Tenn Sheet, then either City or Developer may tenninate this Agreement at any time thereafter upon five (5) days written notice to the other Parties and such tennination shall be binding upon each of the Parties." (b) Section 2.2.3 of the First Amendment is hereby deleted in its entirety and replaced with the following "2.2.3. On or before the date set forth in the Schedule ofPerfonnance for Completion of the work described in Phases I through IV of the Master Development Planning Process, the Developer may request in writing from the Agencies a thirty (30) day extension of the time period for completion of such Phase of the Master Development Planning Process. Upon receipt of such request, each of the Agencies shall detennine in its sole discretion whether reasonable and sufficient progress has been obtained toward fulfillment of the requirements of this Agreement, and if each so detennines, each shall grant the requested extension to the Developer, with such extension in writing. The date for completion through Phase IV of the Schedule ofPerfonnance may be extended by mutual agreement by the Developer and the Agencies for no more than a total of two additional thirty day (30) day periods (for a total of a 60 day extension to the Schedule of Perfonnance), in accordance with the foregoing procedure. Each such extension shall also extend the ENA Tenn and the tenn to complete Phase IV of the Master Development Planning Process for the period of extension granted. The Parties agree that all two possible extensions established in this Section 2.2.3 may be issued in accordance with the provisions ofthis Section 2.2.3, notwithstanding any previous extensions issued by the Agencies prior to the effective date of this Second Amendment. (c) Section 2.2.5 of the First Amendment is hereby deleted in its entirety and replaced with the following: "It is the intent of the Parties to conclude exclusive negotiations and to complete Phases I through IV of the Master Development Plan Process during the period commencing on the Effective Date and tenninating on or before January 23, 2006, as such date may be extended (a) pursuant to the provisions of Section 2.2.3 or TUSTIN LEGACY MASTER DEV>ENA-v-l] A-2 Exclusive Negotiation Agreement (Master Development Site) (b) following completion of Phase III of the Master Development Plan Process, upon request by any Party, provided that in no event shall the total exclusive negotiation period established by this Agreement be extended beyond March 24, 2006 without the prior written consent ofthe City Council and the Developer (as extended, the "ENA Term"). This Agreement shall automatically tenninate upon the last day of the ENA Tenn unless the Developer and the Agencies' staff have agreed upon a fonn ofDDA acceptable to each as of said date." (d) Exhibit "D" (Schedule ofPerfonnance) included in the First Amendment to the ENA is hereby deleted in its entirety and replaced with the Schedule of Performance attached as Schedule I hereto. (d) The address ofSteefel, Levitt & Weiss set forth in Section 8.9 of the Prior ENA is hereby deleted in its entirety and replaced with the following: "Steefel, Levitt & Weiss 550 South Hope Street, Suite 2350 Los Angeles, CA 90071 Attn: Amy E. Freilich, Esq." 2. Counterparts. This Second ENA Amendment may be executed in any number of counterparts each of which shall be deemed an original and all of which shall constitute one and the same agreement with the same effect as if all the parties had signed the same signature page. Any signature page of this Second ENA Amendment may be detached from any counterpart of this Second ENA Amendment and reattached to any other counterpart of this Second ENA Amendment identical in fonn hereto but having attached to it one or more additional signature pages. 3. ENA Remains in Effect. Except as specifically provided in this Second ENA Amendment, all of the tenns and provisions of the Prior ENA remain unchanged and in full force and effect. 4. Effectiveness. This Second ENA Amendment shall be effective when it shall have been executed and delivered by the Agencies and Developer. TUSTIN LEGACY MASTER DEV>ENA-v-l] A-3 Exclusive Negotiation Agreement (Master Development Site) IN WITNESS WHEREOF, the authorized representatives of the Parties hereto have executed this Agreement as of the date first set forth above. "CITY" City of Tustin By: William Huston City Manager "AUTHORITY" Tustin Public Financing Authority By: Name: Its: APPROVED AS TO FORM Special Counsel for the City STEEFEL, LEVITT & WEISS By: Amy E. Freilich, Esq. TUSTIN LEGACY MASTER DEV>ENA-v-J] A-4 Exclusive Negotiation Agreement (Master Development Site) TUSTIN LEGACY COMMUNITY PARTNERS, LLC, a Delaware limited liability company By: Centex Homes, a Nevada general partnership, a Member By: Centex Real Estate Corporation, a Nevada corporation, Managing Partner By: Richard P. Douglas Division President TUSTIN LEGACY MASTER DEV>ENA-v-J] A-5 By: By: Shea Homes Limited Partnership, a California limited partnership, a Member By: J.F. Shea LLC, a Delaware limited liability company By: Jack Godard Assistant Secretary Shea Properties, LLC, a Delaware limited liability company, a Member By: Jack Godard Vice President - Manager Assistant Secretary Exclusive Negotiation Agreement (Master Development Site) TUSTIN LEGACY MASTER DEV>ENA-v-l] A-6 Exclusive Negotiation Agreement (Master Development Site) SCHEDULE "1" TO SECOND AMENDMENT TO EXCLUSIVE NEGOTIA TION AGREEMENT EXHIBIT "D" TO EXCLUSIVE NEGOTIATION AGREEMENT SCHEDULE OF PERFORMANCE 18403:6450161.2 EXHIBIT D Second Amendment to Exclusive Negotiation Agreement Between the City of Tustin, Public Financing Authority And Tustin Legacy Community Partners Task Name Start Finish ENA Phase 1 (Preliminary Master Development Plan) 11/01/03 3/1/04 ENA Phase 2 ( Refine Plan, Infrastructure and Prepare Preliminary Business Plan) 3/1/04 5123/05 ENA Phase 3 (Finalize Master Development Plan) 5/23/05 7/25/05 ENA Phase 4 (Negotiate and 7/26/05 1/23/06 Prepare Draft DDA) . Negotiate Tenn Sheet 7/26/05 9/12/06 . Prepare Draft DDA 9113/05 1/23/06