Exclusive_Negotiation_Agreement__TEMPLATE.pdf

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EXCLUSIVE NEGOTIATING AGREEMENT TEMPLATE

This EXCLUSIVE NEGOTIATING AGREEMENT (this “ENA”) is dated as of __________________ ___, 202_ (the “Effective Date”) and is entered into by and among the CITY OF PASADENA (the “City”) and ________ (“Developer”). The City and the Developer are sometimes individually referred to as a “Party” and are sometimes collectively referred to as the “Parties.”

R E C I T A L S

A. The City owns the land and improvements thereon in the City of Pasadena, County of Los Angeles, California bearing Assessor’s Parcel Numbers 5730-021-903 and 5730-021-904, bounded by North Lake Avenue, with a street address of 1015 and 1027 North Lake Avenue, Pasadena, California 91104 (the “Site”). The Site consists of both land and existing improvements.

B. Developer has informed the City that it is interested in purchasing and/or ground leasing the Site to develop a ________ [general type of project] project known as _________ (the “Project”). The Project is anticipated to include approximately ____ affordable residential units.

C. The Project shall include sustainability features such as ____________. The Project will comply with the City’s Local Preference and Priority Guidelines, aiming for at least 85% of renters to live and/or work in Pasadena at occupancy, and meet or exceed the City’s First Source Hiring ordinance targeting 15% of total construction payroll paid to local workers.

D. For purposes of the Surplus Land Act (Government Code Section 54220, et seq.), the Parties acknowledge that not less than one hundred percent (100%) of the total residential units in the Project must be restricted for “lower income households” (as defined in Health and Safety Code Section 50079.5) at an affordable rent or affordable housing cost for a period of not less than fifty-five (55) years for rental units and forty-five (45) years for ownership units. The requirements of the Surplus Land Act are distinct from, and shall not be deemed to govern, any additional affordability commitments or income categories beyond such twenty-five percent (25%) minimum, nor shall the Act be construed to govern the size, bedroom mix, or other design features of the units.

E. The City Council has instructed its staff to proceed with this ENA to negotiate exclusively with Developer the terms of a disposition and development agreement, possibly including a ground lease (the “Agreement”), under which Developer (or an entity affiliated with Developer) will acquire an interest or interests in the Site and develop the Project within a mutually agreed timeframe to be set forth in the Agreement.

F. The Developer and the City are willing to enter into this ENA setting forth the terms under which the City will negotiate exclusively with Developer regarding the Agreement.

G. During the ENA Period (as defined below), City staff, consultants, and attorneys will devote substantial time to meetings with Developer, reviewing proposals, plans, and reports, and negotiating and preparing the Agreement.

NOW, THEREFORE, the Parties hereto agree as follows:

1. Deposit. Excluding reimbursement for City staff time and the appraisal of the site, Purchaser shall reimburse City for City’s actual out-of-pocket costs and expenses (including legal fees and costs and consultants’ fees and costs) incurred in preparing the Agreement and related documents, and the costs of any appraisal updates and consultants (including an economic consultant) (the “Reimbursable Costs”).

Concurrently with its execution of this ENA, Developer shall deposit with the City the sum of ________ Dollars ($____) (the “Deposit”). The Deposit shall be used and applied from time to time by the City to pay or reimburse itself for the Reimbursable Costs. Developer shall replenish the Deposit from time to time within ten (10) calendar days after written request from the City Manager with a description of the costs and invoice theretofore paid with the Deposit (and if not so replenished, City may cease negotiations).

In the event that this ENA expires (or is terminated) without a Disposition and Development Agreement (DDA) being approved and executed, then upon written request of Developer, the unapplied balance of the Deposit not needed to pay accrued costs shall be returned to the Purchaser within sixty (60) calendar days after the expiration of this ENA. City shall provide Purchaser a report for all reimbursable costs incurred at the time the unapplied balance of the Deposit is returned. (If a DDA is to be approved and executed, disposition/application of the Deposit shall be addressed in the DDA. or the approval and execution of the DDA.)

The provisions of this Section shall survive the expiration or earlier termination of this

ENA.

2. Term; Extensions. The term of this ENA shall commence on the date of this ENA and shall end on the earlier of: (i) the date that is six (6) months after the date of this ENA, as such initial term may be extended by the Developer as provided below in this Section 2, or (ii) the date on which the City terminates this ENA as provided in Section 3 below (the "ENA Period").

Provided that the Developer is not in default under this ENA and the City has not terminated this ENA pursuant to Section 3 below, the initial term of this ENA may be extended for up to six (6) months upon the mutual written agreement of the City and Developer, executed prior to the expiration of the initial ENA Period/term.

Any reference hereinafter in this ENA to the "ENA Period" includes any such extension.

3. Termination; Cure Rights. The City Manager, acting for the City, may terminate this ENA by written notice to Developer if: (i) the Developer should fail to comply with or perform any provisions of this ENA, or if reasonable progress is not being made in negotiations hereunder following the City's delivery of its initial draft of the Agreement, as determined by the City Manager in good faith but otherwise in its sole and absolute discretion, and (ii) such failure to make progress as specifically outlined by City in its notice or such default is not cured by Developer within thirty (30) days after the City Manager delivers written notice thereof to Developer.

4. Approval of Agreement/DDA. In no event shall the Agreement negotiated by City staff become effective unless duly approved by the City Council in its sole and absolute discretion after compliance with CEQA and all other applicable laws, and by Developer (or the entity controlled by Developer that is proposed to be the developer party to the Agreement).

5. Mutual Exclusivity. During the ENA Period:

a. The City shall not: (i) solicit or accept any offers from, or negotiate with, any person or entity other than the Developer for the sale, lease or development of the Site (or any portion thereof), (ii) propose or process any legislative or administrative actions, authorizations, or entitlements for any change of use of the Site from its present use other than other than pursuant to this ENA, (iii) offer any person or entity the opportunity to purchase the Site, or (iv) conduct any public hearing to consider, approve, or conditionally approve any development of the Site other than pursuant to this ENA,

b. The Developer and its affiliates shall not solicit or accept any offers from, or negotiate with, any person or entity for the acquisition (by purchase, ground lease or otherwise) of any interest in property within the City of Pasadena for the purpose of acquiring or developing a similar facility on or in connection with that property.

6. Drafting of Agreement; Developer Tasks and Right of Entry Agreement. During the ENA Period, the City staff shall use good faith efforts to draft and revise the Agreement, and Developer shall timely perform the tasks set forth on Attachment No. 1 attached hereto.

Concurrently herewith, City and Developer shall execute and deliver a Right of Entry Agreement in the form attached hereto as Exhibit "A" in order to provide Developer reasonable access to the Site for purposes of Developer tasks under Attachment No. l, and Developer shall deliver to City a certificate (or certificates) of insurance for the insurance described therein, showing City is an additional insured.

7. CEQA Compliance. The City and Developer acknowledge that any applicable requirements of CEQA must be met in order to execute and deliver the Agreement and that this may require certain reports or analyses for CEQA purposes (collectively, the "CEOA Documents"). The City will provide the Developer with copies of all CEQA Documents in existence as of the date of this ENA, and the Developer will, at its cost, fully cooperate with the City in the preparation of the CEQA Documents during the ENA Term.

8. Due Diligence Costs; City Disclosures. The Developer shall bear all costs and expenses of any and all title, environmental, and other investigations, reports and analyses performed by or for the Developer. However, the City shall within thirty (30) days after the date of this ENA, disclose in writing to Developer all material facts known to the City about the Site and not known to or discoverable by the Developer (including any ALTA survey, Phase I environmental report, and Phase II environmental report, and CEQA status, as applicable).

9. No Obligation to Approve Agreement. The Developer and the City understand and agree that neither Party is under any obligation whatsoever to enter into an Agreement. In the event of the expiration or earlier termination of this ENA in accordance with the terms hereof, the City shall be free at the City's option to negotiate with any persons or entities with respect to the sale, lease and/or development of the Site.

10. Developer Indemnity. Developer shall indemnify, defend, and hold the City harmless from any and all losses, claims, liabilities, damages, demands, causes of action, legal or administrative proceedings, lawsuits, judgments, penalties, fines, liens, out-of-pocket costs and expenses of any kind or nature whatsoever (including without limitation, court costs and reasonable attorneys' fees and disbursements), whether direct or indirect, known or unknown, foreseen or unforeseen (collectively, "Losses") incurred by the City and arising out of Developer's failure to perform any obligation of Developer under this ENA. The Developer's obligations under the preceding sentence shall survive the expiration or earlier termination of this ENA

11. Assignment. The Developer represents and warrants that its undertakings pursuant to this ENA are for the purpose of acquisition of interest(s) in and the use of the Site and not for speculation in land, and the Developer recognizes that, in view of the importance of the Site to the general welfare of the community, the qualifications and identity of the Developer and its principals are of particular concern to the City.

Therefore, this ENA may not be assigned by the Developer without the prior express written consent of the City in its sole and absolute discretion.

However, City understands that Developer may propose a new legal entity to be the developer party to the Agreement (or to documents required by the Agreement) that is partly owned, and is controlled by, Developer or a Developer-controlled affiliate of Developer, and Developer understands that such entity and its owners shall be subject to approval by City which will need to review organizational documents and financial statements for such entity and its owners.

Additionally, it is contemplated that if there is to be a ground lease for the rental portion of the Project (or any other portion), that ground lease will prohibit assignment (and subletting of a substantial portion of the ground leased property) prior to completion of the Project, and that after completion of the Project, assignment (and subletting of a substantial portion), shall require the City’s/landlord's consent, not to be unreasonably withheld.

12. Notices. Any notice, request, approval or other communication to be provided by one Party to the other shall be in writing and provided by certified mail, return receipt requested, or a reputable overnight delivery service (such as Federal Express) and addressed as follows:

If to the Developer:

If to the City:

Notices shall be deemed delivered: (i) if sent by certified mail, then upon the date of delivery or attempted delivery shown on the return receipt; or (ii) if delivered by overnight delivery service, then one (1) business day after delivery to the service as shown by records of the service.

13. Entire Agreement. This ENA constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof. There are no agreements or understandings between the Parties and no representations by either Party to the other as an inducement to enter into this ENA, except as expressly set forth herein. All prior negotiations between the Parties are superseded by this ENA Neither the City nor any of its officers, members, staff or agents have made any representations, warranties or promises to the Developer with respect to the Site or the Agreement except as may be expressly set forth herein.

14. Amendments. This ENA may not be altered, amended or modified except by a writing duly approved and executed by all Parties.

15. Governing Law. The interpretation and enforcement of this ENA shall be governed by the substantive laws of the State of California.

16. Severability. If any provision of this ENA or the application of any such provision shall be held by a court of competent jurisdiction to be invalid, void or unenforceable to any extent, the remaining provisions of this ENA and the application thereof shall remain in full force and effect and shall not be affected, impaired or invalidated.

17. Time of the Essence. Time is of the essence of each and every provision hereof in which time is a factor.

18. Counterparts: Email Delivery of Executed ENA. This ENA may be executed in counterparts and delivered by electronic transmission (e.g., .PDF format/email), to________ (for delivery to City) and to ______ (for delivery to Developer), each of which shall be deemed an original, but all of which together shall constitute one and the same agreement and ENA.

19. Joint and Several Obligations. [If joint venture] _____ and _____ obligations hereunder are joint and several.

IN WITNESS WHEREOF, the Parties hereto have executed this ENA as of the day and year first written above.

Assistant City Attorney

CITY:

CITY OF PASADENA

By: _________________________ Nicholas G. Rodriguez Assistant City Manager

DEVELOPER:

By: ______________________

Attest:

By: __________________________ Mark Jomsky, City Clerk

Approved as to Form: