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HomeMy WebLinkAboutCommunity Redevelopment Agency of the City of Grand Terrace-2007-29MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING (this "Memorandum") is dated for identification purposes as of September 11, 2007, and is entered into by and between THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE (the "Agency"), THE CITY OF GRAND TERRACE, CALIFORNIA, a municipal corporation (the "City") and GRAND TERRACE PARTNERS, LLC, a California limited liability company (the "Developer"), under the terms and provisions set forth below. The Agency, City and Developer are sometimes hereinafter individually referred to as a "Party" and collectively referred to as the "Parties." RECITALS: A.Pursuant to applicable laws and ordinances, the City established the Agency and adopted and approved that certain Redevelopment Plan (the "Redevelopment Plan") for the Grand Terrace Redevelopment Area ("Redevelopment Area"). B.The City Council previously adopted the Outdoor Adventure Center Specific Plan (the "OAC Plan") to govern the use and development of certain real property (the "Site") located within the Redevelopment Area that is depicted on the site map attached hereto as Exhibit "A" (the "Site Map"), and certified an environmental impact report for the OAC Plan ("OAC EIR"). The Site consists of certain real property owned by Agency (the "Agency Parcels") and certain privately owned parcels (the "Acquisition Parcels"). The Agency Parcels and Acquisition Parcels are depicted, respectively, on the Site Map. C.The City and the Agency previously entered into an Exclusive Negotiating Agreement with Developer (the "ENA") to explore the acquisition and development of the Site by Developer in accordance with the OAC Plan. Developer has performed substantial due diligence investigations under the ENA regarding the development of the Site and the off-site improvements that will be required in connection with the development of the Site, including without limitation: (1) Developer has submitted to the City and the Agency all plans and reports required under the ENA, including market demand studies, reports on discussions with potential retail anchors and preliminary site plans; and (2) Developer has prepared plans and studies for the Interim Traffic Improvements (as hereinafter defined) and has had extensive discussions with the City and the California Department of Transportation ("Caltrans") regarding the Interim Traffic Improvements. D.The prior approval of the OAC Plan and the certification of the OAC EIR have been vacated. The City and the Agency have mutually determined that a new specific plan should be prepared to govern the use and development of Site (the "New Specific Plan") and a new environmental impact report (the "New EIR") should be prepared to analyze the potential environmental impacts of the New Specific Plan and the development of the Site in accordance therewith under the California Environmental Quality Act ("CEQA"). E.The Parties desire to enter into this Memorandum with Developer to set forth: (1) the procedures for the preparation of the New Specific Plan and the New EIR; (2) the obligations of Developer for payment of costs incurred by the City for the preparation of the New Specific Plan and the New EIR; (3) the respective rights and obligations of the Parties with respect to the Acquisition Parcels, the acquisition of the Agency Parcels and the development of the Site. Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 1 of 10 NOW, THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, the Parties mutually agree as follows: AGREEMENT 1.New Specific Plan. Within sixty (60) days following the mutual execution of this Memorandum, the City shall enter into a written contract (the "SP Contract") with a planning consultant selected by the City to prepare a draft of the New Specific Plan for the Site for submittal to the City. The SP Contract shall be subject to the prior written approval of Developer, which shall not be unreasonably withheld or delayed. The City shall be entitled to draw funds from the Developer Deposit (as hereinafter defined) to pay any costs and expenses incurred by the City under the SP Contract. The New Specific Plan shall address development standards and permitted uses for the Site, which shall include a retail center and may also include office, hotel, commercial, residential and flex-office/light industrial uses. 2.New EIR. Within ninety (90) days following the mutual execution of this Memorandum, the City shall enter into a written contract (the "EIR Contract") with an environmental impact report consultant selected by the City to prepare a draft of the New EIR for submittal to the City. The EIR Contract shall be subject to the prior written approval of Developer, which shall not be unreasonably withheld or delayed. The New EIR will analyze the environmental impacts in accordance with CEQA of (i) the New Specific Plan, (ii) development of the Site in accordance with the New Site Plan, and (iii) the performance of the Interim Traffic Improvements. The City shall be entitled to draw funds from the Developer Deposit to pay any costs and expenses incurred by the City under the EIR Contract. 3.Developer Deposit. 3.1 Developer previously deposited with the City the sum of the Ten Thousand Dollars ($10,000) as a deposit under the ENA (the "ENA Deposit"). The term "Developer Deposit" means the ENA Deposit and any monies deposited by Developer pursuant to Sections 3.2 through 3.4, inclusive. 3.2 Developer shall deposit with the City the additional sum of Three Hundred Thousand Dollars ($300,000) in the following installments: (a) One Hundred Thousand Dollars ($100,000) upon execution of this Memorandum by all Parties; and (b) Fifty Thousand Dollars ($50,000) on each of January 1, 2008, April 1, 2008, July 1, 2008 and October 1, 2008. 3.3 Developer shall deposit with the City additional funds to cover the cost of the Appraisal (as hereinafter defined) of the Agency Parcels and the Acquisition Parcels. Such deposit shall be made within ten (10) business days following delivery by the City to the Developer of the approved Appraisal Contract (as hereinafter defined) mutually executed by the City and the Appraiser (as hereinafter defined). 3.4 In addition to the foregoing, (i) in the event that any amendments to, or change orders under, the SP Contract or the EIR Contract (collectively, the "Contract Changes") increase the contract sum and expenses due from the City thereunder (collectively, the "Contract Sum Increases"), (ii) the Contract Changes have been approved by Developer, which approval shall not be unreasonably withheld, and (iii) the City will not have sufficient funds from the ENA Deposit and the monies deposited by Developer with the City under Section 3.2 to pay the Contract Sum Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 2 of 10 Increases, then Developer shall deposit with the City, with ten (10) business days following written request by the City, such additional funds as are required by the City to pay in full the Contract Sum Increases. 3.5 The City shall draw upon the Developer Deposit as and when needed by the City to pay any costs and expenses incurred by the City under the SP Contract, the EIR Contract and the Appraisal Contract. No consent or approval of Developer is required for the use or draw of the Developer Deposit for such purposes. 4.Traffic Improvements. 4.1 The San Bernardino Association of Governments ("SANBAG"), operating under the oversight of Caltrans, has announced its intention to construct permanent improvements to the Barton Road interchange of the 1-215 Freeway, including on-ramp and off-ramp improvements and improvements to the Barton Road bridge (collectively, the "Permanent Traffic Improvements"). SANBAG officials are currently scheduling the completion of construction of the Permanent Traffic Improvements for calendar year 2015, subject to approvals of plans and construction costs and required budget allocations. 4.2 Developer has prepared a proposal for interim improvements to Barton Road and adjacent streets and intersections which are designed to allow for the development of the Site prior to the construction of the Permanent Traffic Improvements (collectively, the "Interim Traffic Improvements"). A plan showing the current configuration of the Interim Traffic Improvements is attached to this Memorandum as Exhibit "B". Prior to the execution of this Memorandum, Developer has (i) prepared, at its sole cost, engineering concept plans and traffic studies related to the Interim Traffic Improvements, copies of which have been provided to the City and Caltrans, and (ii) had numerous meetings with the City and Caltrans to discuss the Interim Traffic Improvements. Caltrans has requested additional traffic and engineering tests and studies regarding the Interim Traffic Improvements (the "Additional Interim Studies"). 4.3 During the Term (as hereinafter defined) of this Memorandum, Developer, at its sole cost, shall provide the Additional Interim Studies to Caltrans and continue to diligently work with Caltrans to obtain its approval of the Interim Traffic Improvements. 5.Additional Responsibilities of Developer. In addition to the other obligations of Developer set forth in this Memorandum, Developer shall perform the following responsibilities during the Term, at its sole cost: 5.1 Work diligently to obtain letters of intent from potential anchor tenants and other tenants for a retail center to be developed on the Site. 5.2 With respect to the Acquisition Parcels: (a) within ninety (90) days following completion of the Appraisals of the Acquisition Parcels pursuant to Section 7.1, submit offers to every owner of Acquisition Parcels that have an aggregate acreage of four (4) acres or more for the purchase of such Acquisition Parcels at a purchase price consistent with the Established Value of such Acquisition Parcels; and (b) every calendar quarter thereafter, submit a written report to the City Manager on the status of Developer's efforts to acquire the Acquisition Parcels. Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 3 of 10 5.3 Deliver to the City the following plans and drawings for a proposed development on the Site (the "Project"): (a) enhanced site plans; and (b) renderings of representative buildings. 5.4 Deliver to the City: (a) a development budget for the Project setting forth the projected cost of construction and development of the Project, including hard and soft costs; (b) an operating budget for the Project setting forth the projected operating revenues and expenses for the first three years following the certificate of occupancy for the Project; and (c) a financing plan for the Project. 5.5 Conduct any due diligence tests and investigations that Developer may require with respect to the Agency Parcels. 6. Responsibilities of Agency and City. 6.1 During the Term, at their sole cost and expense, the City and Agency respectively shall prepare and submit the following documents and perform the following acts: 6.1.1 The Agency shall: (a) prepare a draft amendment to the Redevelopment Plan for the purposes set forth in Exhibit "C" to this Memorandum within ninety (90) days following the mutual execution of this Memorandum (the "Plan Amendment"); (b) submit the draft Plan Amendment to the Agency Board for its review and consideration; (c) following and expressly subject to the approval of the Plan Amendment by the Agency Board, seek any necessary approvals that are required for the adoption and implementation of the Plan Amendment from other governmental agencies; and (d) conduct any environmental review required under CEQA in connection with such actions. 6.1.2 The City shall continue to cooperate with Developer in Developer's efforts to obtain the approval of the Interim Traffic Improvements by Caltrans. 6.1.3 The Agency shall commence and complete all actions required under applicable laws and ordinances to comply with any requirements related to "owner participation" for ownership and development of the Site. 6.1.4 The City and the Agency shall take all actions necessary to obtain written approvals from the California Public Utilities Commission and the Union Pacific Railroad for the realignment of the Pico at-grade rail crossing as may be required by the new Specific Plan and Developer's development of the Site. 6.1.5 The City shall promptly notify the Developer in writing of any applications filed with the City for any development of any Acquisition Parcels or any proposed plans for such development that are communicated to the City. 6.2 The Agency and the City shall deliver to Developer, without cost or expense, any non-confidential and non-proprietary information, studies, reports, plans, surveys, appraisals, test results or other documents relating to the Site and the development of the Site which are in the possession of the Agency or the City. Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 4 of 10 6.3 The City shall continue its lead role in the entitlement, development and subdivision of the Site, including compliance with CEQA for such entitlements and other related approvals. 6.4 The City and the Agency, as applicable, shall take all actions necessary to obtain the approvals that may be required for the implementation of the Interim Traffic Improvements, as approved by Caltrans, including without limitation, the following: (a) acquisition of additional right-of-way for a right-turn lane on south side of Barton Road between Michigan and Vivienda Avenues; (b) relocation of power lines on the south side of Barton Road; (c) acquisition of land necessary to connect Commerce Way to Vivienda Avenue; (d) acquisition of additional right-of- way on the south side of Barton Road east of Vivienda Avenue, if necessary; (e) the elimination of right turns onto La Crosse Avenue from the southbound Barton Road off-ramp of the 1-215 Freeway; (f) reclamation of right-of-way west of southbound Barton Road off-ramp of the 1-215 Freeway to accommodate the widening of the Barton Road overpass to add two new lanes; and (g) transformation of La Crosse Avenue south of Barton Road into a one-way southbound only street. 7.Appraisal. 7.1 Within thirty (30) days following the mutual execution of this Memorandum, the Agency shall enter into a written contract (the "Appraisal Contract") with an independent appraiser, to appraise the fair market value of each of the Agency Parcels and the Acquisition Parcels (collectively, the "Appraisal") on a per square foot basis (the "Established Value"). The Appraisal Contract shall provide that all of the Appraisals shall be completed within ninety (90) days of the date of the Appraisal Contract. The Appraisal Contract shall be subject to the prior written approval of Developer, which shall not be unreasonably withheld or delayed. Upon receipt by the Agency of each of the Appraisals, the Agency shall deliver a copy of the Appraisals to Developer. 7.2 The DDA shall contain the terms and conditions for the phasing and timing of the acquisition of the Agency Parcels by the Developer and the acquisition price to be paid by the Developer for the Agency Parcels, which acquisition price shall not exceed the Established Value of the Agency Parcels, as determined by the Appraisal. 8.DDA 8.1 The Parties shall negotiate the terms and conditions of a Disposition and Development Agreement between the City and the Agency, on the one hand, and the Developer, on the other hand, for the development and ownership of the Site (the "DDA"). The DDA shall address, without limitation, the following subjects: (a) the scope and schedule for development of the Project; (b) the methods for the Project's financing, including any public participation or assistance to the Project; (c) the timing of the transfer of ownership of the Agency Parcels to Developer and the acquisition price for the Agency Parcels; (d) the responsibilities of the Parties for site assembly costs, including site acquisition and relocation, which shall be consistent with Agency policies and State and Federal Relocation Laws; (e) the design of the Project, subject to compliance with all City and the Agency requirements and regulations from which Developer has not received a variance, including without limitation, applicable zoning; (f) permitted uses for the Project; and (g) the responsibilities of the Parties for construction of all off-site improvements for the Project and the methods of financing same. Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 5 of 10 8.2 In the event that the Parties do not execute the DDA prior to the conclusion of the Term (as hereinafter defined) of this Memorandum, then this Memorandum shall terminate, and the City and Agency shall have the right to negotiate with other persons and entities for the acquisition of the Agency Parcels and the development of the Site. In the event this Memorandum is terminated, the Agency shall refund to Developer, within forty-five (45) days of termination, such amount of the Developer Deposit, if any, as remains after all permitted draws by the Agency from the Developer Deposit under Section 3.4 have been taken. 9.Mutual Agreement to Negotiate Exclusively. 9.1 The Parties agree that, during the Term, the Parties shall negotiate exclusively and in good faith with each other concerning the development of the Site in general and particularly with respect to the DDA to be entered into between the Parties. Subject to compliance with the law, including, but not limited to, the Brown Act and the Public Records Act, the City and the Agency: (a) shall not discuss its negotiations with Developer with any third party other than its consultants, other applicable agencies, and staff members of the Agency and the City (collectively, the "Permitted Parties") during the Term; (b) shall treat all documents and written information produced by Developer and provided to the City or the Agency in the performance by Developer of its responsibilities pursuant to this Memorandum as work product of Developer (collectively, "Developer's Work Product"); and (c) shall keep confidential all of Developer's Work Product (other than any information which is a matter of public knowledge or may be obtained from sources readily available to the public) and shall not provide or distribute Developer's Work Product to any third party other than the Permitted Parties. The City and Agency shall require any Permitted Party with whom it discusses such negotiations or to whom it provides any portion of Developer's Work Product to acknowledge the confidentiality of such negotiations and materials and to agree not to disclose such negotiations and materials to any other party. 9.2 The City and Agency agree that, during the Term, the City and Agency: (a) shall not sell, transfer or lease the Agency Parcels or any portions thereof to any person or entity other than Developer; (b) shall not discuss or negotiate the use or occupancy of any area within the Site with any potential user or tenant (other than month-to-month tenancies), except with the prior consent of Developer or as required under Section 6.1.3; and (c) shall not solicit offers from, entertain proposals by, or negotiate with, any other prospective developer with respect to development of the Site, except as required under Section 6.1.3. 10.Term 10.1 The term of this Memorandum (the "Term") shall commence upon execution by all of the Parties and unless mutually agreed by all of the Parties shall conclude sixty (60) days following the latest of the following to occur: (a) final non-appealable written approval of the Interim Traffic Improvements by Caltrans; and (b) final non-appealable approval by the City Council of the New Specific Plan and final non-appealable certification by the City Council of the New EIR. The term 'final non-appealeable approval" means that (i) the required action has been approved by the requisite agency and (ii) all statutory time periods for administrative and judicial appeal of such approval have expired or lapsed and the approval remains as adopted by the requisite agency. 10.2 Notwithstanding any other provision of this Memorandum, Developer shall have the right to terminate this Memorandum upon a determination by Developer, in its discretion, that the Project is not financially feasible at any time prior to the expiration of the Term by delivering Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 6 of 10 to the City a written notice of early termination which sets forth the effective date of such termination (the "Early Termination Notice"). The Early Termination Notice shall be effective as of the date set forth therein (which shall not be less than ten (10) business days after the delivery of such Early Termination Notice to the City). 11.Acknowledgements by Developer. Developer acknowledges and agrees that: 11.1 All entitlements, variances, subdivisions, signage approvals, and other land use approvals requested for the Project are subject to the authority, review and approval of the Agency and the City and compliance with the requirements of CEQA, except that the Agency has agreed to discuss in good faith, during the Term, Developer's requests for such approvals. 11.2 The Agency has not agreed to fund, subsidize or otherwise financially contribute toward the development of the Project, except that the Agency has agreed to discuss in good faith, during the Term, the establishment of a conduit for project generated revenue financing and other types of financial assistance, which discussions may result in a recommendation by the Agency Staff for the establishment of such a conduit for project generated revenue financing and/or such other types of financial assistance. Any financial participation by the Agency will be determined by the Agency, in its sole and absolute discretion, in accordance with California Health & Safety Code Section 33433, based upon such factors such as market conditions, density of development, cost of development of the Project, risks associated with development of the Project, estimated or actual revenues and profit to be derived from the Project, public purposes associated with development of the Project, and other matters relevant to establishing the fair market value of the Project, the financial requirements of Developer respecting its acquisition of the Site and development of the Project and the financial and other benefits to be derived by the Agency and the City from development of the Project. 12.General Provisions. 12.1. Costs and Expenses. Except as specifically provided in Section 5.2, each Party to this Memorandum shall bear their own costs and expenses in performing their obligations hereunder. Such costs and expenses are non-reimbursable and non-refundable. 12.2 Assignments. This Memorandum and the rights granted hereunder are personal to each of the City, Agency and Developer and may not be assigned or transferred in any way, in whole or part, without the prior written approval of the other Parties, which approval may be given or withheld in such other Parties' reasonable discretion. 12.3 Entire Agreement. This Memorandum represents the entire agreement of the Parties with respect to the matters set forth herein. This Memorandum may not be amended except in a writing signed by all of the Parties hereunder. Upon execution of this Memorandum by the Parties, the ENA shall be terminated and of no further force of effect. 12.4 Attorneys Fees. If any Party brings an action or files a proceeding in connection with the enforcement of its respective rights or as a consequence of any breach by the other Parties of their obligations hereunder, then the prevailing Party in such action or proceeding shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures paid by the losing Parties. Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 7 of 10 12.5 Termination. In the event that either Party fails to perform its responsibilities under this Memorandum and such failure continues following fifteen (15) business days' written notice to that Party, the other Party may terminate this Memorandum by delivery of a written notice of termination. 12.6. Notices. All notices required or permitted hereunder shall be delivered in person or by facsimile, by overnight courier, or by registered or certified mail, postage prepaid, return receipt requested to such Party at its address shown below, or to any other place designated in writing by such Party. Any such notice shall be deemed received upon delivery, if delivered personally or by facsimile, one (1) day after delivery to the courier, if delivered by courier, and three (3) days after deposit into the United States Mail, if delivered by registered or certified mail. If to City or Agency: with a copy to: If to Developer: with a copy to: City of Grand Terrace 22795 Barton Road Grand Terrace, CA 92313-5295 Attention: Thomas Schwab, City Manager Facsimile: (909) 783-7629 Harper & Burns, LLP 453 S. Glassell St. Orange, CA 92666 Attention: John R. Harper, Esq. Facsimile: (714) 744-3350 Grand Terrace Partners, LLC c/o Mar Ventures, Inc. 2050 W. 190th Street Suite 201 Torrance CA 90504 Attention: Allan Mackenzie Facsimile: (310) 781-9253 Center Square Holdings, Inc. 2815 Townsgate Road Suite 140 Westlake Village, CA 91361 Attention: Richard A. Lawrence, Esq. Facsimile: (805) 496-5371 12.7 Applicable Law. This Memorandum shall be construed and interpreted in accordance with the laws of the State of California. [SIGNATURES ON THE FOLLOWING PAGES] Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 8 of 10 IN WITNESS WHEREOF, the Parties have executed this Memorandum of Understanding as of the day and year written above. "Agency" 'City' The Community Redevelopment Agency The City of Grand Terrace, California of the City of Grand Terrace a municipal corporation B : -(7h Marye•Ferre Its: C irman Date: October 9 , 2007 Maryett erre Its: Mayor Date: Sept . 11 , 2007 Attest: Brenda Mesa, Agency Clerk Date: October 9 , 2007 Approved as to Form and Legality for Agency: Attest: Brenda Mesa, City Clerk Date: Sept. 11 , 2007 Approved as to Form and Legality for City: VIVA John R. Harp John R. Harper Agency Attorney City Attorney Date: 2 3 , 2007 Date: ) 2-, , 2007 Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 9 of 10 "Developer" Grand Terrace Partners, LLC, a California limited liability company By: Center Square Holdings, Inc., a California corporation Its: Memb Richard A. Lawrence President Date: October 10, 2007 Grand Terrace, CA MEMORANDUM OF UNDERSTANDING 09-05-2007 Page 10 of 10 EXHIBIT "A" Site Map The Site Map is on the following page Grand Terrace, CA EXHIBIT "A" 09-05-2007 TO MEMORANDUM OF UNDERSTANDING Page A-1 EXHIBIT "B" Interim Traffic Improvements A preliminary plan of the Interim Traffic Improvements is on the following pages Grand Terrace, CA EXHIBIT "B" 09-05-2007 TO MEMORANDUM OF UNDERSTANDING Page B-1 EXHIBIT "C" Draft Plan Amendment Provisions The draft Plan Amendment shall include the following provisions: 1.Increase the Redevelopment Plan's cumulative tax increment revenue limit from $70 million (net of taxing agency payments) to approximately $200 million (net of taxing agency payments). 2.Extend the duration of the Redevelopment Plan and time limit to collect tax increment revenue by seven years (pursuant to Health and Safety Code Sections 33333.6(a), 33333.6(b), and 33333.6(e)(2)(C)), 3.Increase the Redevelopment Plan's limit on the amount of bonded debt that may be outstanding at any one time, from $15 million to approximately $65 million, 4.Replace description of land uses of the Redevelopment Plan (as contained in Section IV. Uses Permitted in Project Area, pp. 33-42) with language that directly refers to adopted General Plan, zoning and other local land use policies. Grand Terrace, CA EXHIBIT "C" 09-05-2007 TO MEMORANDUM OF UNDERSTANDING Page C-1