HomeMy WebLinkAboutReso 24-2019 (18-1061)Wow' Resolution: RES 24-2019
File Number: 18-1061 Enactment Number: RES 24-20191,
RESOLUTION APPROVING Al EXCLUSIVE NEGOT'[X.I'ING
RIGHTS AGREEMENT ("ENRA") BETWEI-,-N TUE CITY OF
SOUT'11 SAN FRANCISCO AND, FIREHOUSE LIVE, LLC AND
FIREHOUSE WORK, LLC FOR THE PROPER I -Y LOCATED Ar
201 BADENAVENUE (APNS 012-335-I00AND 012-335-110).
WHEREAS, the City of South San Francisco is the owner of certain real property (the "Property")
located in the City of South San Francisco, known as County Assessor's Parcel Number ("AP i'"")
012-335-100 and 012-335410; and
WHEREAS, the Property contains an existing retired firehouse station, located in the historic Downtown
area on Baden Avenue, and benefits from its close proximity to Grand Avenue corridor, and a new
Caltrain station plaza.; and
WHEREAS, in March 2016 the City followed the Surplus Land Act (Califomia Govermnent Codes
Sections 54220 et seq.) and off.cred public entities an opportunity to purchase or lease the property for
the purpose of expanding parks and/or recreation services, open space public schools or affordable
housing; and
WIJEREAS, in 2017 the City went through a, developer solicitation process for a qualified developer
team for disposition of' the Property, in alignment with the adopted 201.5 Downtown Station Area
Specific Plan; and,
WFl-EREAS, the City received four responses to the RFQ, which included DP DK Investments,
Firehouse Live Work, KASA Partners, and M2 Realty Partners & OTRE.Investments. Staff conducted a
paper screening of the responses and deemed :®P IIS: Investments as incomplete, bringing forward to
the Housing Subcommittee ("Subcommittee") a developer short list of three developer teams; and,
WHEREAS, the shortlisted teams were invited to respond to an RF P in April 2018 and were then
interviewed by the Subcommittee in July 201.8; and,
WHEREAS, the shordisted teams were reduced from three to two developer teams, with KASA
Partners' proposal being removed because their concept did. not retain the firehouse structure. Firehouse
Live, LLC and Firehouse Work, LLC and Old Firehouse Partners were then asked to return to the
Subcommittee at its August 20, 2018 meeting; and,
W`141.';.REAS, at its August, 20th meeting, the Subcommittee made the recommendation. to select
Firehouse Live, LLC and Firehouse Work, LLC as the preferred developer team, and directed staff to
begin negotiations to develop an ENR.A to be approved by the City Council; and,
City of South San Francisco Page I
File Number, 16-1061 Enactment Number RES 24-2019
WHEREAS, in 2018 the Housing Standing Committee made a recommendation for the City Council to
consider Firehouse Live, LLC and Firehouse Work, LLC as the pref6rred developer team. for the
Property because their proposal offers market rate and affordable housing, and retains the firehouse
structure; and
WHEREAS, the project will consist of the rehabilitation of the existing retired firehouse Structure into a
9,200 square foot retail and commercial space, as well as the construction of twenty-four housing units
of Which at least twelve will be affordable; and
WHEREAS, at its .17ebruary 27, 20.1.9 regular meeting, the City Council approved the recommendation of
the Housing Standing Committee and directed the City Manager to enter into an Exclusive Negotiating
Rights Agreement with the developer team; and
WHEREAS, by approval of the ENRA, City has no legal obligation to grant any approvals or
authorizations for the Disposition Agreement or any development thereort until the Disposition
Agreement has been approved by the City Council; and
WHEREAS, such approvals, and any future approvals required as part of the entitlement process, are
subject to completion of environmental review by City in accordance with. CEQA, and City shall not
take any discretionary actions committing it to a particular course of, action in connection with the
proposed project until City has completed, considered. and certified/approved any additionally required
CA environmental review documents.
NOW, THEREFORE, BE IT` ESO by the City Council of the City of South San Francisco that,
the City Council hereby approves an Exclusive Negotiating Rights.Agreement with Firehouse Live, LLC
and Firehouse Work, LLC, attached hereto as Exhibit A, for the disposition of the retired Firehouse site
at 201 Baden Avenue for the proposed mixed-use project.
BE ITFURTIFS RESOLVED, that the City Council hereby authorizes the City Manager to enter into
an Exclusive Negotiating Rights Agreement with Firehouse 'Live, LLC and. Firehouse Work, LLC,
attached hereto as Exhibit A, for the disposition of the retired. Firehouse site at 201 Baden Avenue for a
proposed mixed. -use project,
BE IT FURTHER RESOLVED, that the City Council hereby authorizes the City Manager to take any
other actions consistent with the intent of this -resolution, subject to approval as to form by the City
Attorney.
City of South San Francisco Page 2
File Number: 18-1081 Enactment Number. RES 24-2019
At a meeting of the City Council on 2/27/2019, a motion was made by Mark Addiego, seconded by Buenaflor
Nicolas, that this Resolution be approved. The motion passed.
Yes: 5 Mayor Matsumoto, Vice Mayor Garbarino, Councilmember Addiego,
Councilmember Nagales, and Councilmember Nicolas
Attest by
4Rsa Govea Acosta
City of South San Francisco Page 3
EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT
by and between
FIREHOUSE WORK, LLC,
FIREHOUSE LIVE, LLC,
and
CITY OF SOUTH SAN FRANCISCO
EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT
Firehouse Work, LLC and Firehouse Live, LLC
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THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this "Agreement") is
entered into by and. between the CITY OF SOUTH SAIN FRANCISCO, a municipal
corporation ("City"), FIRE HOUSE WORK, LLC., a California Limited Liability Company,
and F][REHOUSE LIVE, LLC, a California Limited Liability Company, both collectively
described as ("Developer") dated as of -2019 (the "Effective Date"). City and
Developer Team are each referred to as ("Party") or collectively referred to as the ("Parties").
WHEREAS, the City is the owner of certain real property located at 201 Baden Avenue,
in the City of South San Francisco, California, known as County Assessor's Parcel Numbers
("APN") 012-335-100, 012-335-110, and the portion of Cypress Street that is to be vacated., with
a combined lot size of 22,500 square feet, and more particularly shown attached hereto as
Exhibit .A, and incorporated herein by this reference (the "Property"); and.,
WHEREAS, the Property, commonly known as the Old Firehouse, was decommissioned
as a fire station in 2006 and has been used for interim storage uses since 2008; and
WHEREAS, the City adopted the South San Francisco Downtown Station Area Specific
Plan in 2015 which set forth a vision for the downtown focusing on revitalization, new
residential developments, improvements along Grand. Avenue and adjacent corridors, and
encouraging Transit -Oriented Development projects that encourage bicycle and pedestrian links
to regional transportation hubs; and,
WHEREAS in March 2016 the City followed the Surplus Land Act (California
Government Codes Sections 54220 et seq.) noticing requirements and offered public entities an
opportunity to notify the City of its interest in purchasing or leasing the property for the purpose
of expanding parks and/or recreation services, open space public schools or affordable housing,
and received no responses
WHEREAS, in 2017, the City solicited proposals from qualified developers through an
R_FQ process, and. upon review of the responsive proposals, the City's Joint Housing Standing
Committee made a recommendation at its November 19, 2018 meeting that the City pursue an
Exclusive Negotiating Rights Agreement ("E ""j with the selected developer team, Fire
House Live Work for the development of a mixed-use project on the Property; and,
WHEREAS, the Developer desires to rehabilitate the existing Old Firehouse structure
into a 9,200 square foot retail and commercial space, preserving its historical significance, under
Firehouse Work, LLC ("FHW"), as well as construct twenty-four (24) condominium units, of
which approximately twelve (12) units will be deed restricted as Below Market Rate ("BMR"),
With the potential for ancillary retail uses, under Firehouse Live, LLC ("FHL"), as a mixed-use
development on the Property (collectively, both the commercial and residential developments to
be developed on the Property are referred to as the "Project");
WHEREAS. [,I -IW will be responsible for entitling and developing the commercial
component of the Project and FHL will be responsible the lead role in entitling and developing
the residential component of the Project;
EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT
Firehouse Work, LLC and Firehouse Live, LLC
WHEREAS, the Developer anticipates expending funds to prepare architectural and
design drawings and conduct certain studies that are needed to assess the feasibility of the
Project and seek any additional land use entitlements, and therefore requires a grant of exclusive
negotiating rights in order to be willing to make such expenditures; and,
WHEREAS, at its meeting on 2019, the City approved this
Agreement and directed staff to commence negotiating the terms of a disposition agreement or
agreements (collectively, "Disposition Agreement") in order for the Developer to pursue land
use entitlements for the Project and purchase the Property,
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows.
1. Good Faith Efforts to otiate. 'rhe Parties agree, for the to of this Agreement, to
negotiate diligently and in good faith the terms of a Disposition Agreement setting forth
the conditions and timetable for the sale of the Property to Developer. Furthermore, the
Parties agree to diligently and in good faith pursue any third -party consent, authorization,
approval, or exemption required in connection with the preparation and execution of a
Disposition Agreement for the future development of the Project. This Agreement does
not, however, impose a binding obligation on City to convey any interest in the Property
to Developer, nor does it obligate City to grant any approvals or authorizations required
for the development, of the Project on the Property.
a. If City believes that Developer is not negotiating diligently and in good faith, City
will give written notice thereof to Developer who will then have ten (10) business
days to commence negotiating in good faith. Following the failure of Developer
to thereafter commence negotiating in good faith within such ten (10) business
clay period, this Agreement may be terminated by City. If this Agreement is
terminated by City pursuant to the above sentence, Developer acknowledges and
agrees that City will suffer damages, including lost opportunities to pursue other
development alternatives for the Property. Therefore, the Parties agree that if this
Agreement is terminated as provided above, City will retain thefull Payment and
Deposit amounts (as defined in Section 5 of this Agreement, infra), plus any
interest thereon, as fixed and liquidated damages and not as a penalty, and
following such termination neither Party will have any further rights against or
liability to the other under this Agreement, except as set forth in Section 16 of this
Agreement.
in® If Developer believes that City is not negotiating diligently and in good faith,
Developer will give written notice thereof to City which will then have ten (10)
business days to commence negotiating in good faith. Following the failure of
City to thereafter commence negotiating in good faith within such ten (10)
business -day period, this Agreement may be terminated. by Developer. In the event
of such termination by Developer, City will return a prorated portion of the
Deposit and any remaining balance of the Payment to Developer and neither Party
will have any further rights against or liability to the other under this Agreement,
except as set forth in Section 16 of this Agreement.
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C. If the Parties proceed to negotiate diligently and in good faith, but are unable to
reach agreement on the terms of a Disposition Agreement, then City will return a
prorated portion of the Deposit to Developer in accordance with the provisions of
Section 5(c) of this Agreement and neither Party will have any further rights
against or liability to the other under this Agreement, except as set forth in Section
16 of this Agreement.
2. Developer's Exclusive Right to Negotiate With City,. City agrees that it will not, during
the term of this Agreement, directly or indirectly, through any officer, employee, agent,
or otherwise, solicit, initiate or encourage the submission of bids, offers or proposals by
any person or entity with respect to the acquisition of any interest in the Property or the
development of the Property, and City will not engage any broker, financial adviser or
consultant to initiate or encourage proposals or offers from other parties with respect to
the disposition or development of the Property or any portion thereof. City may, at its
discretion, continue to utilize the Property for public uses until the City conveys
ownership of the Property.
Furthermore, City will not, directly or indirectly, through any officer, employee, agent or
otherwise, engage in negotiations concerning any such transaction with, or provide
information to, any person other than Developer and its representatives with a view to
engaging, or preparing to engage, that person with respect to the disposition or
development of the Property or any portion thereof.
3. Term.
a. The term of this Agreement ("Term") commences on the Effective Date, and will
terminate one hundred and eighty (180) days from the Effective Date, unless
extended or earlier terminated as provided herein.
b. During the Term, Developer will provide City with written reports every forty-
five (45) days that summarize Developer's actions taken in furtherance of this
Agreement, which may include to the following: negotiating the terms of a
Disposition Agreement, due diligence review of the Property, commencement of
any environmental requirements under the California Environmental Quality Act
("CEQA"), preparation of architecture and construction plans, attendance at City
meetings, adherence to a mutually agreed upon master schedule, and general
progress towards future entitlement of the Property.
C. The Term of this Agreement may be administratively extended for up to a
maximum of three separate ninety (90) day periods upon the receipt of an
additional non-refundable payment by Developer of fifteen thousand dollars
($15,000) for each ninety day extension period ("ENRA Extension Payment"),
and the consent of the City acting through and at the discretion of its City
Manager or his/her designee ("City Manager"). Developer understands that the
City will only consider extension(s) of the Term of this Agreement where
Developer has demonstrated, to the City's satisfaction, substantial progress
toward development of the Property, which may include submittal of a
development application, submittal of environmental review documents necessary
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to satisfy compliance with CEQA, submittal of architecture and construction
plans, payment of any applicable processing and plan check fees, or pursuing land
use entitlements for the Project.
4. Relationship of the Parties. Nothing in this Agreement creates between the Parties the
relationship of lessor and lessee, of buyer and seller, or of partners or joint venturers.
5. Deposit and Payment to City.
a. In consideration for the right to exclusively negotiate under this Agreement,
Developer will, within thirty (30) days of the Effective Date, remit to City a
deposit in the amount of Fifty Thousand Dollars ($50,000) (the "Deposit"). If a
Disposition Agreement is executed, the Deposit will be credited toward the
ultimate purchase price for the Property. City will deposit the Deposit in an
interest bearing account of the City and any interest, when received by City, will
become part of the Deposit.
During the term of this Agreement, Developer will also reimburse City for all
staff and City consultant time incurred in preparing the Disposition Agreement,
entitlements, and any related documents for the disposition of Property to
Developer. Developer will, within five (5) days of the Effective Date, remit to
City an initial payment in the amount of Thirty Thousand Dollars ($30,000) in
immediately available funds ("Payment"). City will deposit the Payment in an
interest bearing account of City and any interest, when received by City, will
become part of the Payment. The Payment may be drawn upon by City to
reimburse staff, City Attorney, and City consultant costs for preparing the
Disposition Agreement, entitlements, and any other related documents, at their
standard published hourly rates. Should the full amount of the Payment be
exhausted during the Term of this Agreement, City may require the Developer to
provide additional funds necessary to reimburse staff and consultant costs
expended in connection with preparation of the Disposition Agreement and any
related documents. Documentation of City's rate schedule for staff, staff time
spent, and consultant costs will be retained by City and provided to Developer
upon request.
b. City agrees to account for the Deposit and Payment, any other separate payments
to City that relate to cost recovery for staff time, interest earnings, and any
expenditures made in furtherance of this Agreement. Upon reasonable notice to
City, Developer may receive copies of any records related to expenditures made
in furtherance of this Agreement, subject to any appropriate redactions.
C. In the event that Developer terminates this Agreement before the expiration of the
Term pursuant to Section 1(b), Section 1 c) or Section 13(d), the City will return
any prorated portion of the Deposit to the Developer Team. The prorated Deposit
will be calculated by dividing the full $50,000 Deposit by the number of months
in the Agreement Term. This amount will be multiplied by the number of months
remaining on the Term at the time of Developer's termination. The resulting
figure will be the prorated Deposit that the City will pay to the Developer Team.
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d. In the event the Agreement is terminated by any Party for any reason other than
Developer's breach of its obligations under this Agreement, the remaining
balance of the Payment and any interest earned will be returned to Developer,
minus amounts that the City retains attributable to the amount of costs and
consulting fees actually and reasonably incurred and documented by City in
implementing this Agreement, as set forth in subsection (a) of this Section 5.
e. In addition to the payments to City discussed herein, Developer shall be subject to
all applicable fees imposed by the City for processing land use entitlements as set
forth in the City's adopted Master Fee Resolution and any applicable cost
recovery and indemnification agreements.
6. Terms and Conditions of the Dosition Agreement. The Parties agree to use diligent
and good faith efforts to successfully negotiate a Disposition Agreement which will
address, among other things, the purchase price, the conditions of closing, and the scope
of Developer's obligations to design and construct improvements on the Property. The
Parties agree that the terms of the Disposition Agreement shall be based on those terms set
forth herein and in Exhibit B, attached hereto and incorporated herein by reference. In the
event of an inconsistency between the body of the Agreement and Exhibit B, the language
in the body of the Agreement shall prevail.
7. Developer's Studies, Right of Entry.
a. During the Term of this Agreement, Developer will bear all costs and expenses
associated with preparing any studies, surveys, plans, specifications and reports
("Developer's Studies") Developer deems necessary or desirable, in Developer's
sole discretion, to conduct due diligence for the Property. Developer's Studies
may include, without limitation, title investigation, marketing, feasibility, soils,
seismic and environmental studies, financial feasibility analyses and design
studies. Developer will have rights of access to the Property to prepare
Developer's Studies.
b. Developer hereby agrees to notify the City seventy-two (72) hours in advance of
its intention to enter the Property.
C. Developer will provide the City with work plans, drawings, and descriptions of
any intrusive sampling it intends to do. Developer must keep the Property in a
safe condition during its entry. Developer shall repair, restore and return the
Property to its condition immediately preceding Developer's entry thereon at
Developer's sole expense.
d. Without limiting any other indemnity provisions set forth in this Agreement,
Developer shall indemnify, defend (with counsel approved by City) and hold the
City, its officials, officers, employees, and volunteers harmless from and against
all claims resulting from or arising in connection with entry upon the Property by
Developer or Developer's agents, employees, consultants, contractors or
subcontractors pursuant to this Section 7. Developer's indemnification obligations
set forth in this Section 7 shall survive the termination of this Agreement.
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e. If upon expiration of the Term oft is Agreement the Parties have not successfully
negotiated a Disposition Agreement, Developer will, upon City's written request,
provide City within fifteen (15) days following said date of'expiration copies of
any non-proprietary Developer's Studies prepared by third parties completed by
such date. Developer will also provide City with copies of any non-proprietary
Developer's Studies prepared by third parties completed after the expiration ofthe
Term within fifteen (15) days following completion of such studies, or if
Developer intends not to complete any such Developer Studies, Developer will
provide City with copies of'such uncompleted studies.
8. City's Reports and Studies. Within twenty (20) days following the Effective Date, City
will take all reasonable efforts to make available or make arrangements to make available
to Developer for review or copying at Developer's expense all non -privileged. studies,
surveys, plans, specifications, reports, and other documents with respect to the Property
that City is able to reasonably locate and has in its possession or control, which have not
already been provided to Developer. Studies or documents prepared by City and its
agents is solely for the purpose of negotiating the terms of a Disposition Agreement and
related documents are not required to be provided by City to Developer and are excluded
fiom this requirement.
9. Developer's Pro F'or ed to Potential
Approval of AaJDI!i�iiosition Agreement.
a. The Parties agree that the Disposition Agreement will contain language that
provides that: (1) not later than forty-five (45) days prior to the City consideration
of Project entitlements, Developer will provide evidence satisfactory to City that
Developer has identified potential sources and uses of funds to complete the
proposed project, subject only to commercially reasonable conditions, for all
funding necessary for the successful completion of the Project, and (2) issuance of
a building permit for each component of the Project shall be a condition of
closing, as further defined in the Disposition Agreement.
b. Prior to the end of the term of the ENRA, Developer will provide the City with
the following deliverables:
i. Demonstrate both a conditional financial and project commitment (e.g., a
letter of intent) with Habitat for 1. lumanity, with the goal of maximizing
the number of affordable housing units in the Project;
ii. Submit a planning application for each component of the Project that has
been deemed substantially complete by the City; and
iii® Final agreed upon Disposition Agreement.
10. Full Disclosure. Developer is required to make full disclosure to City of its principals;
officers; major stockholders, partners or members; joint venturers; negotiators;
development managers; consultants and directly involved managerial employees
(collectively, "Developer Parties"). Any material change in the identity. of the Developer
Parties will be subject to the approval of City Manager and his or her designee, which will
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not be unreasonably withheld. Developer also agrees to disclose both the type of planned
financing and identity of any lenders or mortgagees in connection with the financing of
the Project.
11. Periodic Reporting to Governing Bodies. City will report periodically to the City Council
and other local and regional agencies, on the status of negotiations, and Developer may
be asked to attend such meetings to provide those bodies with a status update of their
development efforts related to this Agreement.
1.2. No Bindin x Commitments. City has no legal obligation to grant any approvals or
authorizations for the Disposition Agreement or any development thereon until the
Disposition Agreement have been approved by the City Council. Such approvals, and any
future approvals required as part of the entitlement process, are subject to completion of
environmental review by City in accordance with CEQA, and City shall not take any
discretionary actions committing it to a particular course of action in connection with the
Project until City has completed, considered and certified/approved any additionally
required CEQA environmental review documents.
13. Termination.
a. This Agreement may be terminated by mutual consent.
b. City will have the right to terminate this Agreement upon its good faith
determination that Developer is not proceeding diligently and in good faith to
carry out its obligations pursuant to this Agreement in accordance with the
provisions set forth in Section 1 of this Agreement.
C. Developer will have the right to terminate this Agreement upon its good faith
determination that City is not proceeding diligently and in good faith to carry out
its obligations pursuant to this Agreement in accordance with the provisions set
forth in Section 1 of this Agreement.
d. Developer will have the right to terminate this Agreement if the results of
Developer's investigation of the Property are unsatisfactory, in Developer's sole
and absolute discretion, with respect to Developer's desired development
activities, or if Developer is unable to obtain other necessary approvals, rights or
interests. If Developer terminates this Agreement pursuant to this Section 13(d),
then City will return a prorated portion of the Deposit to Developer in accordance
with the provisions of Section 5(c) of this Agreement and the remaining balance
of the Payment in accordance with the provisions of Section 5(d), and neither
Party will have any further rights against or liability to the other under this
Agreement, except as set forth in Section 16 of this Agreement.
e. Neither Party will have the right to seek an award of damages if this Agreement is
terminated pursuant to this Section.
14. Effect of Termination. Upon termination as provided herein, or upon the expiration of the
Term and any extensions thereof without the Parties having successfully negotiated a
Disposition Agreement, this Agreement will terminate, and there will be no further
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liability or obligation on the part of either of the Parties or their respective officers,
employees, agents or other representatives; provided however, the provisions of Section 5
(Payment to City), Section 7(d'1 (Indemnification), Section ,16 (Indemnification), and
Section 20 (Brokers) will survive such termination. Provided further, that upon
termination or expiration of this Agreement without the Parties having successfully
negotiated a Disposition Agreement, Developer will deliver to City any non-proprietary
Developer's Studies pursuant to the provisions of Section 7 of this Agreement.
15. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant
to this Agreement will be made in writing, and sent to the Parties at their respective
addresses specified below or to such other address as a Party may designate by written
notice delivered to the other parties in accordance with this Section. All such notices will
be sent by:
a. Personal delivery, in which case notice is effective upon delivery;
b. Certified or registered mail, return receipt requested, in which case notice will be
deemed delivered on receipt if delivery is confirmed by a return receipt;
C. Nationally recognized overnight courier, with charges prepaid or charged to the
sender's account, in which case notice is effective on delivery if delivery is
confirmed by the delivery service;
d. Facsimile transmission, in which case notice will be deemed delivered upon
transmittal, provided that
i. A duplicate copy of the notice is promptly delivered by first-class or
certified mail or by overnight delivery, or
H. A transmission report is generated reflecting the accurate transmission
thereof. Any notice given by facsimile will be considered to have been
received on the next business day if it is received after 5:00 p.m.
recipient's time or on a nonbusiness day.
City : City of South San Francisco
Attn: City Manager
400 Grand Avenue
South San Francisco, CA 94080
Tel (650) 877-8501
Fax (650) 829-6609
smut:°ef��,f f:r .
_.._ ... ...............
with a copy to: City of South San Francisco
Attn: ECD Director
400 Grand Avenue
South San Francisco, CA 94080
Tel (650) 829-6620
alex.greenwood@ssfnet
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with a copy to: Meyers Nave
Attn: Jason Rosenberg
555 12'h Street, Suite 1500
Oakland, CA 94607
Tel (510) 808-200
Fax (510) 444-1108
u�u;u:nN m Y
Developer: for FHW
Attn: Dawn Merkes
211 Linden Ave
South San Francisco, CA 94080
Tel (650) 871-0709
Fax (650) 871-7911
Attn: Owen Lawlor
612 Spring Street
Santa Cruz, CA 95060
Tel (831) [email protected]
with a copy to: Arent Fox LLP
Attn: Frank Petrilli
55 2nd Street, 22S' Floor
San Francisco, CA 94105
Tel (415) 805-7970
[email protected]
16. Indemnification. Developer hereby covenants, on behalf of itself and its permitted
successors and assigns, to indemnify, hold harmless and defend City and its elected and
appointed officials, officers, agents, representatives and employees ("Indemnitees")
from and against all claims, costs (including without limitation reasonable attorneys' fees
and litigation costs) and liability, arising out of any breach of this Agreement by
Developer or arising out of or in connection with Developer's access to and entry on the
Property pursuant to Section 7 of this Agreement; provided however, Developer will
have no indemnification obligation with respect to the gross negligence or willful
misconduct of any Indemnitee.
17. Severability_. If any term or provision of this Agreement or the application thereof will,
to any extent, be held to be invalid or unenforceable, such term or provision will be
ineffective to the extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining terms and provisions of this Agreement or the
application of such terms and provisions to circumstances other than those as to which it
is held invalid or unenforceable unless an essential purpose of this Agreement would be
defeated by loss of the invalid or unenforceable provision.
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18. Entire Agreement; Amendments In Writing; Counted . This Agreement contains the
entire understanding of the Parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings, oral and
written, between the Parties with respect to such subject matter. This Agreement may be
amended only by a written instrument executed by the Parties or their successors in
interest. This Agreement may be executed in multiple counterparts, each of which will
be an original and all of which together will constitute one agreement.
19. Successors and Assigns; No Third-Partv Beneficiaries. This Agreement will be binding
upon and inure to the benefit of the Parties and their respective successors and assigns;
provided however, that neither Party will transfer or assign any of such Party's rights
hereunder by operation of law or otherwise without the prior written consent of the other
Party, and any such transfer or assignment without such consent will be void.
Notwithstanding the foregoing, Developer is permitted to assign this Agreement without
such written consent, provided that Developer assigns this Agreement to an entity that is
controlled by Developer. Subject to the immediately preceding sentence, this Agreement
is not intended to benefit, and will not run to the benefit of or be enforceable by, any
other person or entity other than the Parties and their permitted successors and assigns.
20. Brokers. Each Party warrants and represents to the other that no brokers have been
retained or consulted in connection with the selection of the Developer. Each Party agrees
to defend, indemnify and hold harmless the other Party from any claims, expenses, costs
or liabilities arising in connection with a breach of this warranty and representation. The
terms of this Section will survive the expiration or earlier termination of this Agreement.
21. Amendments. Unless otherwise provided in this Agreement, the City Manager will be
authorized to enter into all written amendments, consents or waivers under this
Agreement on behalf of the City without further authorization by the City Council.
Nothing herein, however, will be deemed to prevent the City Manager from requesting
formal approval by the City Council if the City Manager, in his or her sole discretion,
determines to seek such approval.
22. Captions. The captions of the sections and articles of this Agreement are for convenience
only and are not intended to affect the interpretation or construction of the provisions
hereof.
23. GoverninyLaw. This Agr cement will be governed by and construed in accordance with
the laws of the State of California.
SIGNATURES ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
CITY
By�.
—_..._.._
Mike Futrell
City Manager
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By
Jason Rosenberg
City Attorney
DEVELOPER
By:
Dawn Merkes, member
Firehouse Work, LLC
By___.._......_...._._
Owen Lawlor
Firehouse Live, LLC
me
Exhibit A
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103 1"191 to] USA tuals M] 6
Term
Description
Term of ENRA
180 days
Parties Involved
Firehouse Work, LLC (1714W)
Firehouse Live, LLC (FHL)
Proposed Project
*
Rehabilitation of existing Old Firehouse structure
into a 9,200 square foot retail and commercial space
*
Preserve historical significance of Old Firehouse
structure
0
Construct a 24 -unit condominium project, of which at
least 1.2 units will be affordable
1�rice Offer
0
To be determined during the ENRA period
Deposit
0
$50,000 Deposit to be credited against future
purchase price for the property
Payment
0
$30,000 for reimbursement of staff time; if
exhausted., Developer will be required to provide
additional funds
ENRA Extension Payment
0
$15,000 additional non refundable payment for each
City approved extension of 90 -days with a maximurn
of three separate 90 --day extension periods.
Entitlements
0
Begin pursuing during the ENRA period
0
Separate entitlements for FHW and. 1" 1"11.1.
0
Complete entitlements for both components upon.
execution of 1rspositi2n c ent
Escrow
*
FI4W and FHL escrow will occur simultaneously
Development Schedule
*
To be determined during the ENRA and will be
included as a Schedule of Performance in the
Disposition Agreement
Corporate Structure
0
Development team to outline the corporate structure
Retail Component
Ideal tenant for the commercial portion of the site
would be those that enhance the unser experience,
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those that add value beyond simply paying rent.
These might include locally sourced food and
beverage establishments or new creative experiences
currently not found in the downtown area.
• Developers to engage a retail consultant to establish
the commercial feasibility and spatial needs of
potential ideal tenants while going through the
entitlement stages.
• No personal and financial services are permitted
Progress Reports
0 To be provided to the City every 45 days
Performance Milestones
o Negotiation of a Disposition Agreement
• Pro forma showing sources and uses of funds for the
Project
• Demonstrate both a financial and project commitment
with Habitat for Humanity, for the construction of no
less than 12 BMR units
• Show evidence of how the Project is pursuing
entitlements by providing a soft entitlement package
Due Diligence
During the term of the ENRA the Seller and Buyers shall
further define and evaluate the project parameters:
• The Seller shall provide Buyers with any and all
reports, studies and other documentation including
any existing title policies, surveys, leases, structural
reports, hazardous material reports, appraisals and
other documents relating to the Property, Baden
Avenue, and Airport Boulevard that are in Seller's
possession and control.
• Buyers shall have the opportunity to conduct due
diligence in which to inspect the Property and to
conduct any engineering, environmental, physical
inspection and any other kind of investigation or
study deems necessary.
• Buyers may at their own expense, conduct structural
or hazardous material investigations of the existing
improvements on the Property and Seller will allow
access to the Property for this purpose.
• Buyers may at their own expense, conduct a
subsurface investigation to confirm the findings in
the Phase I environmental site assessment report
provided by the City.
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If Buyers are not satisfied with the results of any
information they learn during this Due Diligence
phase they may cancel the ENRA in which case the
Deposit will be refunded to Buyers, in accordance
with Section 13.
SM