HomeMy WebLinkAbout13 AMENDMENT AND EXTENSION OF EXCLUSIVE NEGOTIATING AGREEMENT WITH THE IRVINE COMPANY LLCDocusign Envelope ID: 7AB05F87-574B-4CBB-8B11-B9D77ED61BD7
MEETING DATE
TO
FROM
OCTOBER 1, 2024
ALDO E. SCHINDLER, CITY MANAGER
Agenda Item
13
Reviewed:
Initial
a`L�
City Manager
Finance Director
N/A
RYAN SWIONTEK, DEPUTY DIRECTOR OF REAL PROPERTY
SUBJECT: AMENDMENT AND EXTENSION OF EXCLUSIVE NEGOTIATING
AGREEMENT WITH THE IRVINE COMPANY LLC FOR PORTIONS
OF TUSTIN LEGACY DISPOSITION AREAS 2B, 2C AND 8
SUMMARY:
Request for approval of an amendment and extension of the Exclusive Negotiating
Agreement with The Irvine Company LLC to continue the negotiating period for the
disposition and development of portions of Disposition Areas 2B, 2C and 8 at Tustin Legacy
for a multifamily residential project until March 31, 2025, with one additional 90-day
extension at the discretion of the City Manager.
RECOMMENDATION:
Authorize the City Manager to execute an amendment to the Exclusive Negotiating
Agreement with The Irvine Company LLC, approving an extension of the Exclusive
Negotiating Agreement until March 31, 2025, with one additional 90-day extension at the
discretion of the City Manager subject to non -substantive additions or modifications as may
be deemed necessary and/or recommended by the City's special real estate counsel or the
City Attorney prior to the end of the Exclusive Negotiating Agreement Negotiating Period.
FISCAL IMPACT:
There is no fee associated with the Exclusive Negotiating Agreement amendment or
extension. The Irvine Company LLC has a deposit account with the City that will continue
to fund the City transaction expenses incurred by staff and third -party consultants including
the retention of legal counsel associated with the negotiation and drafting of the Disposition
and Development Agreement and related agreements.
CORRELATION TO THE STRATEGIC PLAN:
The extension of the Exclusive Negotiating Agreement with The Irvine Company LLC
contributes to the fulfillment of the City's Strategic Plan Goal A: Economic and
Neighborhood Development. Specifically, this item implements Strategy 1 which is to
develop critical phases of Tustin Legacy.
Docusign Envelope ID: 7AB05F87-574B-4CBB-8B11-B9D77ED61BD7
City Council Agenda Report
The Irvine Company LLC ENA Amendment and Extension
October 1, 2024
Page 2
BACKGROUND AND DISCUSSION:
On May 21, 2024 (Effective Date), the City Council authorized the City Manager to enter into
an Exclusive Negotiating Agreement (ENA) with The Irvine Company LLC (Developer) to
negotiate the disposition and development of portions of Disposition Areas 213, 2C and 8 at
Tustin Legacy for a multifamily residential project. The ENA provided for an initial negotiating
period of 150 days from the Effective Date which may be extended for two (2) additional
periods of 30 days each at the discretion of the City Manager. The ENA Initial Negotiating
Period, will expire on October 18, 2024.
Developer has submitted a letter dated September 18, 2024 (included as Attachment 1) that
requests an amendment to the ENA to extend the ENA Period until March 31, 2025, in order
to execute a Disposition and Development Agreement (DDA) and achieve entitlement
approvals for the project. In addition, Developer is requesting one additional 90-day
extension beyond March 31, 2025, at the discretion of the City Manager.
The City and Developer continue to negotiate the DDA, the Development Agreement (DA)
and the related instruments and agreements (Transaction Documents) diligently and in good
faith, and Developer has made reasonable and sufficient progress towards fulfilling the
requirements of the ENA. To date, Developer has completed due diligence and submitted an
entitlement package on July 19, 2024, and received City staff comments on August 14, 2024.
Developer anticipates re -submitting the entitlement package for review by the end of this
month.
Staff finds that sufficient progress is being made toward fulfilling the requirements of the ENA,
and therefore recommends City Council approval of the requested ENA amendment and
extension to be executed by the City Manager and Developer.
Signed by:
Ryan9 wwlontek
Deputy Director of Real Property
Attachments:
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Signed yySignby:
Signed 1� �'LcSLLCL
Kenneth iguee
Real Property Manager
1. Developer letter requesting ENA amendment & extension dated September 18, 2024
Docusign Envelope ID: 7AB05F87-574B-4CBB-8B1 1 -B9D77ED61 BD7
0 IRVINE COMPANY
Since 1864
September 18, 2024
Sent via electronic mail
Aldo Schindler
City Manager
300 Centennial Way
Tustin, CA 92780
Subject: Amendment to the Exclusive Negotiating Agreement (ENA) between
the City of Tustin and The Irvine Company LLC re: a 19.4-acre property at Tustin
Legacy (portions of Disposition Areas 28, 2C and 8)
Dear Mr. Schindler:
As you are aware, the subject ENA provides for an initial negotiating period of 150 days from
the ENA effective date. The 150-day period will expire on October 18, 2024 and allows for two
30-day extensions at the discretion of the City Manager.
Since the ENA effective date, both Irvine Company and the City have worked in good faith
toward a successful project concept and associated Disposition and Development Agreement
(DDA). To date, Irvine Company has met its obligations pursuant to the ENA, completed its due
diligence process, submitted an entitlement application on July 19, 2024, and is in the process
of negotiating key points of the DDA with the City. Based on our progress to date, the City and
Irvine Company anticipate the DDA and project entitlements will be through the full city review
process in the first quarter of 2025.
While it remains our intent to conclude this process as soon as possible in early 2025, as an
outside date, Irvine Company in coordination with the City submits and would support an
amendment to ENA Section 4.2.2 to extend the ENA period to March 31, 2025, with the
potential for one additional extension at the discretion of the City Manager.
While the ENA amendment is processed, this letter serves as the 30-day required notification
for an ENA extension pursuant to Section 4.2.2.
We look forward to our continued partnership and to concluding this process in the coming
months.
Sincerely,
Kevin Roberts
Senior Vice President, Apartment Development
cc: Ryan Swiontek, Deputy Director of Economic Development
550 Newport Center Drive, Newport Beach, California 92660 1949,720.2000