HomeMy WebLinkAbout25C - AGMT ENA CARIBOU INDREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
MAY 7, 2019
TITLE:
APPROVE SECOND EXCLUSIVE
NEGOTIATION AGREEMENT WITH
CARIBOU INDUSTRIES FOR THE THIRD
STREET AND BROADWAY DEVELOPMENT
{STRATEGIC PLAN NO. 3,5A)
190-#:7:(•]361•11IRIli IF9X•]ki1Wiii
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 11' Reading
❑ Ordinance on 20d Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
CITY AN GER
RECOMMENDED ACTION
Authorize the City Manager and the Clerk of the Council to execute a second Exclusive
Negotiation Agreement with Caribou Industries for a one-year period from May 6, 2019 to May 6,
2020 for the Third and Broadway development, subject to non -substantive changes approved by
the City Manager and City Attorney.
DISCUSSION
On September 16, 2014, the City Council directed the Planning and Building Agency (PBA) to
release a Request for Qualifications (RFQ) for the Third and Broadway Development Project. The
RFQ outlined several project components desired by the City Council. Among the components of
the new project was a desire to include a hotel/hospitality component. Five proposals were
received and only the Caribou Industries Inc. proposal included a hotel.
On March 21, 2017, the City Council authorized the City Manager and Clerk of the Council to
enter into an Exclusive Negotiation Agreement (ENA) with Caribou Industries for the Third and
Broadway project. To assist with the negotiations, the City entered into a contract with consultant
Lisa Stipkovich to lead negotiations for the City and identify transaction business terms. A first
amendment to the agreement extending the ENA period was entered into on July 5, 2017.
On January 16, 2018, the City Council approved a second amended and restated ENA and
reimbursement agreement with Caribou to pay for the services of Lisa Stipkovich and Kosmont
Company, the firm hired to evaluate the financial feasibility of the project. The term of the
restated ENA allowed for three 90 -day administrative extensions which expired on April 28, 2019.
Staff is recommending a second ENA (Exhibit 1) to extend the term to allow for an additional 1 -
year period to complete all technical studies required for the CEQA analysis and land use
entitlements. It is anticipated that the technical studies will be completed by Fall 2019.
25C-1
Second ENA with Caribou
May 7, 2019
Page 2
Proposed Project:
Caribou industries proposes to replace the existing City -owned parking garage with a mixed-use
development containing a 75 -room boutique hotel, 164 residential units, 15,320 sq. ft. of
commercial space and rooftop amenities for the residential and hotel structures. The
development would be comprised of two buildings: a 15 -story, 182 -foot -tall mixed used
(residential and commercial) building and a 10 -story, 127 -foot -tall hotel building. The buildings
would be separated by an extension of Sycamore Street to West 3m Street. The proposed project
would provide 403 total structured parking spaces, including 211 public parking spaces and 72
stacker spaces for the separate hotel component.
Progress to Date:
Since the initial approval of the ENA, the project has undergone some design changes (Exhibit
2). Caribou Industries is currently completing the technical studies for the project and it is
anticipated that the completion of the entitlement process will occur in late Fall 2019.
The next step in the process will be to prepare and present a Disposition and Development
Agreement (DDA) with updated business terms to City Council for consideration in late 2019.
The DDA will further describe the final terms of the transaction, including a schedule of
completion with milestones for the developer to achieve. The City will not convey the site until the
developer has met all obligations defined in the DDA, obtained all approved permits and
entitlements, and provided proof of financing for construction of the project. Significant progress
on the entitlements have been made in the last 6 months.
STRATEGIC PLAN ALIGNMENT
Approval of this item allows the City to meet Goal #3 (Economic Development), Objective #5
(Leverage private investment that results in tax base expansion and job creation citywide),
Strategy A (Identify and market underutilized properties for new development that will create new
jobs and expand the City's tax base).
FISCAL IMPACT
There is no fiscal impact associated with this action
�� N
Steven A. Mendoza
Executive Director
Community Development Agency
Exhibits: 1. Second Exclusive Negotiation Agreement
2. Updated Renderings of Project
25C-2
EXHIBIT 1
SECOND EXCLUSIVE NEGOTIATION AGREEMENT
This Second Exclusive Negotiation Agreement ("Agreement') is dated May 2019,
for reference purposes only, and is entered into by and among the CITY OF SANTA ANA, a
California charter city in the County of Orange of the State of California ("City"), and CARIBOU
INDUSTRIES, INC., a Nevada Corporation ("Developer"), in order to provide a specified period
of time to attempt to negotiate a disposition and development agreement ("DDA"). City and
Developer are sometimes referred to in this Agreement individually, as a "Party" and, collectively,
as the "Parties." This Agreement is entered into by the Parties with reference to the following
recited facts (each, a "Recital"):
RECITALS
WHEREAS, the City and Developer entered into Exclusive Negotiation Agreement No.
A-2017-058, dated April 27, 2017, for City and Developer to negotiate regarding the potential
acquisition and development of the property located at 201 West Third Street, Santa Ana,
California 92701 (APN 398-264-13) ("Property"); and
WHEREAS, the City and Developer entered into a First Amendment to Exclusive
Negotiation Agreement No. A-2017-165, dated July 5, 2017; and
WHEREAS, the City and Developer entered into a Second Amended and Restated
Exclusive Negotiation Agreement No. A-2018-002, dated January 11, 2018, which expired on its
own terms on April 28, 2019; and
WHEREAS, the intent of the Parties in entering into this Agreement is to establish a
specific, limited period of time to negotiate regarding a future agreement among them governing
the potential acquisition and development of certain real property, subject to mutually agreeable
terms, conditions, covenants, restrictions and agreements to be negotiated and documented in a
future DDA; and
WHEREAS, City owns the Property; and
WHEREAS, the Property is more particularly described in the legal description attached
to this Agreement as Exhibit "A" and incorporated into this Agreement by this reference; and
WHEREAS, Developer proposes to develop a mixed use project, including a hotel,
commercial, retail, residential, and public parking, on the Property ("Project'); and
WHEREAS, the Parties now agree to enter into this Agreement for the purpose of further
planning and evaluating the feasibility of the proposed Project, including further negotiation of
deal points and environmental review of the projects in preparation for the DDA; and
WHEREAS, the Developer has represented its willingness and ability to undertake certain
studies, plans and other activities necessary to define the scope of development and determine the
feasibility of the Project on the Property and that such plans and other information to be prepared
during the course of this Agreement shall serve as the basis for entering into a DDA among City
and Developer; and
25C-3
EXHIBIT 1
WHEREAS, City is willing to continue the period of exclusive negotiations with
Developer concerning Developer's potential development of the Project, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, IN VIEW OF THE GOALS AND OBJECTIVES OF THE
PARTIES RELATING TO THE PROJECT AND THE COVENANTS AND PROMISES OF
THE CITY AND THE DEVELOPER SET FORTH IN THIS AGREEMENT, THE CITY AND
THE DEVELOPER AGREE AS FOLLOWS:
1. Incorporation of Recitals. The Recitals of fact set forth above are true and correct
and are incorporated into this Agreement, in their entirety, by this reference.
2. Term of Agreement.
(a) The rights and duties of the City and the Developer established by this
Agreement shall commence on the first date on which all of the following have occurred
("Effective Date'): (1) execution of this Agreement by the authorized representative(s) of the
Developer and delivery of such executed Agreement to the City, and (2) approval of this
Agreement by the City's execution of this Agreement by its respective authorized representatives
and delivery of such executed Agreement to the Developer. The City shall deliver a fully executed
counterpart original of this Agreement to the Developer, within ten (10) calendar days after the
governing bodies of the City have approved this Agreement, and their authorized representatives
have executed this Agreement. This Agreement shall continue in effect until Ma -3,7, 2020
("Negotiation Period"), subject to the limitations of Section 2(b). -
(b) Upon the Effective Date, the City and Developer shall proceed with
continued negotiations according to the Schedule of Performance outlined in Exhibit "B" attached
herewith and incorporated herein by reference.
(c) This Agreement shall automatically expire and be of no further force or
effect at the end of the Negotiation Period (as may be extended pursuant to the terns of this
Agreement), unless, prior to that time, the City and the Developer approve and execute a separate
DDA acceptable to the two Parties, in their respective sole and absolute discretion, in which case
this Agreement will terminate on the effective date of such DDA.
3. Negotiation of DDA.
(a) During the Negotiation Period, the Parties shall negotiate diligently and in
good faith to negotiate a DDA among them. The Parties shall generally cooperate with each other
and supply such documents and information as may be reasonably requested by the other to
facilitate the conduct of the negotiations. The Parties shall exercise reasonable efforts to complete
discussions relating to the terms and conditions of a DDA and such other matters, as may be
mutually acceptable to the Parties, in their respective sole discretion.
(b) Nothing in this Agreement shall be interpreted or construed to be a
representation or agreement by either the City or the Developer that a mutually acceptable DDA
will be produced from negotiations under this Agreement. Nothing in this Agreement shall impose
any obligation on either Party to agree to a definitive DDA in the future. Nothing in this
256-4
EXHIBIT 1
Agreement shall be interpreted or construed to be a guaranty, warranty or representation that any
proposed DDA that may be negotiated by City staff and the Developer will be approved by the
governing bodies of the City. The Developer acknowledges and agrees that the City's
considerations of any DDA is subject to the sole and absolute discretion of their City Council and
all legally required public hearings, public meetings, notices, factual findings and other
determinations required by law.
(c) During the Negotiation Period, the Parties shall diligently review and
comment on drafts of a DDA prepared by the City Attorney, and if the tennis and conditions of
such a DDA are agreed upon among the City staff and the Developer, Developer shall submit the
DDA fully executed by the authorized representative(s) of the Developer to the City Manager for
submission to City Council for review and approval or disapproval. Any future DDA shall consist
of terms and conditions acceptable to the Developer and the City Council of the City, in their
respective sole and absolute discretion.
4. Environmental Review and CEQA Compliance. During the Negotiation Period,
all required environmental review of the Project, including full and complete compliance with the
California Environmental Quality Act (CEQA), must be completed and brought to the City
Council for review, approval, and certification, prior to, or concurrently with, any request for
approval of a DDA for the Project.
5. Restrictions Against Change in Ownership, Management and Control of
Developer and Assignment of Agreement.
(a) The qualifications and identity of the Developer and its principals are of
particular concern to the City. It is because of these qualifications and identity that the City has
entered into this Agreement with the Developer. During the Negotiation Period, no voluntary or
involuntary successor -in -interest of the Developer shall acquire any rights or powers under this
Agreement, unless an assignment is approved by the City in its sole and absolute discretion.
(b) The Developer shall promptly notify the City in writing of any and all
changes whatsoever in the identity of the business entities or individuals either comprising or in
Control (as defined in Section 5(d)) of the Developer, as well as any and all changes in the interest
or the degree of Control of the Developer by any such person, of which information the Developer
or any of its shareholders, partners, members, directors, managers or officers are notified or may
otherwise have knowledge or information. Upon the occurrence of any significant or material
change, whether voluntary or involuntary, in ownership, management or Control of the Developer
(other than such changes occasioned by the death or incapacity of any individual) that has not been
approved by the City, prior to the time of such change, the City may terminate this Agreement,
without liability to the Developer or any other person, by sending written notice of termination to
the other Parties, referencing this Section 5(b).
(c) Notwithstanding anything in this Agreement to the contrary, Developer may
assign its rights under this Agreement to a joint venture partner, lender or other related company
entity or an Affiliate (as defined in Section 5(d)), on the condition that such Affiliate expressly
assumes all of the obligations of the Developer under this Agreement in a writing reasonably
satisfactory to the City.
25b-5
EXHIBIT 1
(d) For the purposes of this Agreement, the temp "Affiliate" means any person,
directly or indirectly, controlling or controlled by or under common control with the Developer,
whether by direct or indirect ownership of equity interests, by contract, or otherwise. For the
purposes of this agreement, "Control" means possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of an entity, whether by ownership of
equity interests, by contract, or otherwise.
6. Developer to Pay All Costs and Expenses. All fees or expenses of engineers,
architects, financial consultants, legal, planning or other consultants or contractors, retained by the
Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review,
planning and/or design activities, drawings, specifications or other activity or matter relating to the
Property or the Project or negotiation of a DDA that may be undertaken by the Developer during
the Negotiation Period, pursuant to or in reliance upon this Agreement or in the Developer's
discretion, regarding any matter relating to a DDA, the Property or the Project, shall be the sole
responsibility of and undertaken at the sole cost and expense of the Developer and no such activity
or matter shall be deemed to be undertaken for the benefit of, at the expense of or in reliance upon
the City. The Developer shall also pay all fees, charges and costs, make all deposits and provide
all bonds or other security associated with the submission to and processing by the City and all
applications and other documents and information to be submitted to the City and by the Developer
pursuant to this Agreement or otherwise associated with the Project. The City shall not be
obligated to pay or reimburse any expenses, fees, charges or costs incurred by the Developer in
pursuit of any study, analysis, evaluation, report, schedule, estimate, environmental review,
planning and/or design activities, drawings, specifications or other activity or matter relating to the
Property or the Project or negotiation of a DDA that may be undertaken by the Developer during
the Negotiation Period, whether or not this Agreement is, eventually, terminated or extended or a
DDA is entered into among the Parties, in the future.
7. City Not To Negotiate With Others.
(a) During the Negotiation Period, the City, and their respective staff shall not
negotiate with any other person regarding the sale or development of the Property. The tern
"negotiate," as used in this Agreement, means and refers to engaging in any discussions with a
person other than the Developer, regardless of how initiated, with respect to that person's
development of the Property to the total or partial exclusion of the Developer from redeveloping
the Property, without the Developer's written consent, subject to the provisions of Section 7(b)
and further provided that they may receive and retain unsolicited offers regarding development of
the Property, but shall not negotiate with the proponent of any such offer during the Negotiation
Period.
(b) Nothing in this Agreement shall limit, prevent, restrict or inhibit the City
from providing any information in its possession or control that would customarily be furnished
to persons requesting information from the City concerning their respective goals, matters of a
similar nature relating to development plans or as required by law to be disclosed, upon request or
otherwise.
PTF7W,
EXHIBIT 1
Acknowledgments and Reservations.
(a) The Parties agree that, if this Agreement expires or is tenninated for any
reason, or a future DDA is not approved and executed by the Parties, for any reason, none of the
Parties shall be under any obligation, nor have any liability to each other or any other person
regarding the sale or other disposition of the Property or the development of the Project or the
Property.
(b) The Developer acknowledges and agrees that no provision of this
Agreement shall be deemed to be an offer by the City, nor an acceptance by the City of any offer
or proposal from the Developer for the City to convey any estate or interest in the Property to the
Developer or for the City to provide any financial or other assistance to the Developer for
development of the Property or execution of the Project.
(c) The Developer acknowledges and agrees that the Developer has not
acquired, nor will acquire, by virtue of the teens of this Agreement, any legal or equitable interest
in real or personal property from the City.
(d) Certain development standards and design controls for the Project may be
established among the Parties, but it is understood and agreed among the Parties that the Project
and the development of the Property must conform to all City, and other applicable governmental
development, land use and architectural regulations and standards, as may be amended by the
Project entitlements processed for the Property. Drawings, plans and specifications for the Project
shall be subject to the approval of the City through the standard development application process
for acquiring the real estate and entitlements within the Project. Nothing in this Agreement shall
be considered approval of any plans or specifications for the Project or of the Project itself by the
City.
(e) The City reserves the right to reasonably obtain further information, data
and commitments to ascertain the ability and capacity of the Developer to purchase, develop and
operate the Property and/or the Project. The City shall maintain the confidentiality of financial
information of the Developer to the extent allowed by law, as determined by the City Attorney.
Notwithstanding the foregoing, if the City receives a request for documents related to this
Agreement or the Project pursuant to the California Public Records Act (Govt. Code Section 6254
et. seq) or similar statute, and the City determine that the City has responsive documents, the City
shall provide Developer notice not less than three (3) days prior to releasing the responsive
documents to the requesting party. During this three (3) day period Developer may seek a court
order prohibiting the release of the documents. Any litigation or costs associated with protecting
documents from disclosure shall be bome solely by Developer.
(0 The Developer expressly acknowledges and agrees that the City will not be
bound by any statement, promise or representation made by their respective staff or representatives
during the course of negotiations of a future DDA and that the City shall only be legally bound
upon the approval of a complete DDA by the City Council, in their respective sole and absolute
discretion, following one or more duly noticed public bearings, as required by law.
25t:-7
EXHIBIT 1
9. Nondiscrimination. The Developer shall not discriminate against nor segregate
any person, or group of persons on account of race, color, creed, religion, sex, marital status,
handicap, national origin or ancestry in undertaking its obligations under this Agreement.
10. Limitation on Damages and Remedies
(a) THE PARTIES ACKNOWLEDGE THAT IT IS EXTREMELY
DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT
WOULD BE SUFFERED BY THE DEVELOPER UPON THE BREACH OF THIS
AGREEMENT BY THE CITY. HAVING MADE DILIGENT BUT UNSUCCESSFUL
ATTEMPTS TO ASCERTAIN THE ACTUAL DAMAGES THE DEVELOPER WOULD
SUFFER UPON THE BREACH OF THIS AGREEMENT BY ANOTHER PARTY, THE
PARTIES AGREE THAT A REASONABLE ESTIMATE OF THE DEVELOPER'S DAMAGES
IN SUCH EVENT IS ONE HUNDRED THOUSAND DOLLARS ($100,000) (THE
"LIQUIDATED DAMAGES AMOUNT"). THEREFORE, UPON THE BREACH OF THIS
AGREEMENT BY THE CITY, THE BREACHING PARTY SHALL PAY THE LIQUIDATED
DAMAGES AMOUNT TO THE DEVELOPER AND THIS AGREEMENT SHALL
TERMINATE. RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL BE THE
DEVELOPER'S SOLE AND EXCLUSIVE REMEDY ARISING FROM ANY BREACH OF
THIS AGREEMENT BY THE CITY.
Initials of Authorized Initials Authorized
Representative of City Repr sentative of Developer
(b) THE PARTIES EACH ACKNOWLEDGE AND AGREE THAT THE
CITY WOULD NOT HAVE ENTERED INTO THIS AGREEMENT, IF EITHER WERE TO BE
LIABLE TO THE DEVELOPER FOR ANY MONETARY DAMAGES, MONETARY
RECOVERY OR ANY REMEDY OTHER THAN TERMINATION OF THIS AGREEMENT
AND PAYMENT OF THE LIQUIDATED DAMAGES AMOUNT. ACCORDINGLY, THE
PARTIES AGREE THAT THE DEVELOPER'S SOLE AND EXCLUSIVE RIGHT AND
REMEDY UPON THE BREACH OF THIS AGREEMENT BY THE CITY IS TO TERMINATE
THIS AGREEMENT AND RECEIVE THE LIQUIDATED DAMAGES AMOUNT.
(c) THE DEVELOPER ACKNOWLEDGES THAT IT IS AWARE OF THE
MEANING AND LEGAL EFFECT OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST N HIS OR HER FAVOR ATTHE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER WOULD
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
(d) CALIFORNIA CIVIL CODE SECTION 1542 NOTWITHSTANDING, IT
IS THE INTENTION OF THE DEVELOPER TO BE BOUND BY THE LIMITATION ON
2.71x'$
EXHIBIT 1
DAMAGES, RECOVERY AND REMEDIES SET FORTH IN THIS SECTION 12, AND THE
DEVELOPER HEREBY RELEASES ANY AND ALL CLAIMS AGAINST THE CITY FOR
MONETARY DAMAGES, MONETARY RECOVERY OR OTHER LEGAL OR EQUITABLE
RELIEF RELATED TO ANY BREACH OF THIS AGREEMENT, EXCEPT RECEIPT OF THE
LIQUIDATED DAMAGES AMOUNT, WHETHER OR NOT ANY SUCH RELEASED
CLAIMS WERE KNOWN OR UNKNOWN TO THE DEVELOPER AS OF THE EFFECTIVE
DATE OF THIS AGREEMENT. THE DEVELOPER SPECIFICALLY WAIVES THE
BENEFITS OF CALIFORNIA CIVIL CODE SECTION 1542 AND ALL OTHER STATUTES
AND JUDICIAL DECISIONS (WHETHER STATE OR FEDERAL) OF SIMILAR EFFECT
WITH REGARD TO THE LIMITATIONS ON DAMAGES AND REMEDIES AND WAIVERS
OF ANY SUCH DAMAGES AND REMEDIES CONTAINED IN THIS SECTION 12.
(e) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, IN THE EVENT OF A BREACH BY DEVELOPER, DEVELOPER SHALL NOT
BE LIABLE OR RESPONSIBLE TO CITY FOR ANY LOST OR FOREGONE TAX
REVENUES, ECONOMIC OR COMMUNITY BENEFITS, FEES, CHARGES, OR ANY
OTHER AMOUNT. THE PARTIES ACKNOWLEDGE THAT IT IS EXTREMELY
DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT
WOULD BE SUFFERED BY THE CITY UPON THE BREACH OF THIS AGREEMENT BY
THE DEVELOPER. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO
ASCERTAIN THE ACTUAL DAMAGES THE CITY WOULD SUFFER UPON THE BREACH
OF THIS AGREEMENT BY ANOTHER PARTY, THE PARTIES AGREE THAT A
REASONABLE ESTIMATE OF THE CITY'S TOTAL DAMAGES IN SUCH EVENT IS THE
LIQUIDATED DAMAGES AMOUNT. RECEIPT OF THE LIQUIDATED DAMAGES
AMOUNT SHALL BE THE CITY SOLE AND EXCLUSIVE REMEDY ARISING FROM ANY
BREACH OF THIS AGREEMENT BY THE DEVELOPER. NOTWITHSTANDING THE
FOREGOING, IF. DEVELOPER'S BREACH IS A FAILURE TO MAINTAIN THE INITIAL
OR ADDITIONAL DEPOSIT REQUIRED BY THIS AGREEMENT, IN ADDITION TO THE
LIQUIDATED DAMAGES DEVELOPER SHALL REIMBURSE THE CITY FOR THE
ACTUAL INCURRED STAFF TIME AND THIRD PARTY CONSULTANT TIME
EXPENDED ON THE PROJECT PRIOR TO THE DATE OF TERMINQTi6N,,
Initials of Authorized
Representative of City
11. Default.
of Developer
(a) Failure or delay by any Party to perform any material term or provision of
this Agreement shall constitute a default under this Agreement. If the Party who is claimed to be
in default by another Party cures, corrects or remedies the alleged default within fifteen (15)
calendar days after receipt of written notice specifying such default, such Party shall not be in
default under this Agreement. The notice and cure period provided in the immediately preceding
sentence shall not, under any circumstances, extend the Negotiation Period. If there are less than
fifteen (15) days remaining in the Negotiation Period, the cure period allowed pursuant to this
Section 13(a) shall be automatically reduced to the number of days remaining in the Negotiation
25t-9
EXHIBIT 1
Period. Nothing in this subparagraph (a) shall prohibit Developer from extending the Negotiation
Period pursuant to Section 2.
(b) The Party claiming that a default has occurred shall give written notice of
default to the Party claimed to be in default, specifying the alleged default. Delay in giving such
notice shall not constitute a waiver of any default nor shall it change the time of default. However,
the injured Party shall have no right to exercise any remedy for a default under this Agreement
without first delivering written notice of the default.
(c) Any failure or delay by a Party in asserting any of its rights or remedies as
to any default shall not operate as a waiver of any default or of any rights or remedies associated
with a default.
(d) If a default of any Party remains uncured for more than fifteen (15) calendar
days following receipt of written notice of such default, a "breach" of this Agreement by the
defaulting Party shall be deemed to have occurred. In the event of a breach of this Agreement, the
sole and exclusive remedy of the Party who is not in default shall be to terminate this Agreement
by serving written notice of termination on the Party in breach and, in the case of a breach by the
City, the Developer shall also be entitled to receive the Liquidated Damages Amount.
12. Compliance with Law. The Developer acknowledges that any future DDA, if
approved by the City Council, will require the Developer to, among other things, carry out the
development of the Project in conformity with all applicable laws, including all applicable
building, planning and zoning laws, environmental laws, safety laws and federal and state labor
and wage laws.
13. Press Releases. The Developer agrees to obtain the approval of the City Manager
in function of any press releases Developer may propose relating to the lease or development of
the Property or negotiation of a DDA with the City prior to publication.
14. Notice. All notices required under this Agreement shall be presented (A) in person,
(I3) by a reputable smme-day or overnight delivery service, or (C) facsimile and confirmed by first
class certified or registered United States Mail, with return receipt requested, to the address and/or
fax number for the Party set forth in this Section. Notice shall be deemed confirmed by United
States Mail effective the third (3rd) business day after deposit with the United States Postal
Service. Notice by personal service or reputable same-day or overnight delivery service shall be
effective upon delivery. Either Party may change its address for receipt of notices by notifying
the other Parties in writing. Delivery of notices to courtesy copy recipients shall not be required
for valid notice to a Party.
TO DEVELOPER: Caribou Industries, Inc.
Michael Harrah
President
1103 N. Broadway
Santa Ana, CA 92701
(T) (714) 543-9434
(F)(714)534-9972
25it-10
EXHIBIT 1
TO CITY: The City of Santa Ana
Executive Director
Community Development Agency
20 Civic Center Plaza (M-25)
P.O. Box 1988
Santa Ana, California 92702
COPY TO: City Attorney
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, California 92702_
Fax: 714-647-6515
15. Warranty Against Payment of Consideration for Agreement. The Developer
warrants that it has not paid or given, and will not pay or give, any third party any money or other
consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall
not include persons to whom fees are paid for professional services, if rendered by attorneys,
financial consultants, accountants, engineers, architects and other consultants, when such fees are
considered necessary by the Developer.
16. Acceptance of Agreement by Developer. The Developer shall acknowledge its
acceptance of this Agreement by delivering to the City three (3) original counterpart executed
copies of this Agreement each signed by the authorized representative(s) of the Developer.
17. Counterpart Originals. This Agreement may be executed by the Parties in
multiple counterpart originals, all of which together shall constitute a single agreement.
18. No Third -Party Beneficiaries. Nothing in this Agreement is intended to benefit
any person or entity other than the Parties.
19. Governing Law. The Parties acknowledge and agree that this Agreement was
negotiated, entered into and is to be fully performed in the City of Santa Ana, California. The
Parties agree that this Agreement shall be governed by, interpreted under, and construed and
enforced in accordance with the laws of the State of California, without application of such laws'
conflicts of laws principles.
20. Waivers. No waiver of any breach of any term or condition contained in this
Agreement shall be deemed a waiver of any preceding or succeeding breach of such term or
condition, or of any other term or condition contained in this Agreement. No extension of the time
for performance of any obligation or act, no waiver of any term or condition of this Agreement,
nor any modification of this Agreement shall be enforceable against a Party, unless made in writing
and executed by the Parties.
21. Construction. Headings at the beginning of each section and sub -section of this
Agreement are solely for the convenience of reference of the Parties and are not a part of this
251t-11
EXHIBIT 1
Agreement. Whenever required by the context of this Agreement, the singular shall include the
plural and the masculine shall include the feminine and vice versa. This Agreement shall not be
construed as if it had been prepared by one Party, but rather as if the Parties cooperated equally in
preparing this Agreement. Unless otherwise indicated, all references to sections are to this
Agreement. All exhibits referred to in this Agreement are attached to this Agreement and
incorporated into this Agreement by this reference. If the date on which a Party is required to take
any action pursuant to the terns of this Agreement is not a business day of the City, the action
shall be taken on the next succeeding business day of the City.
22. Attorneys' Fees. If a Party hereto files any action or brings any action or
proceeding against another Party arising out of this Agreement, then the prevailing Party shall be
entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys'
fees as fixed by the court, in such action or proceeding or in a separate action or proceeding brought
to recover such attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees"
mean and include, in the case of the City, salaries (or fees) and expenses of the lawyers employed
by the City (allocated on an hourly basis) who may provide legal services in connection with the
representation of the City in any such matter.
23. Enforced Delay. No party shall be deemed in default of its obligations under this
Agreement where a delay or default is due to an act of God, natural disaster, accident, breakage or
failure of equipment, enactment of conflicting federal or state laws or regulations, third -party
litigation, administrative action, including strikes, lockouts or other labor disturbances or disputes
of any character, interruption of services by suppliers thereof, unavailability of materials or labor,
unforeseeable and severe economic conditions, rationing or restrictions on the use of utilities or
public transportation whether due to energy shortages or other causes, war, civil disobedience, riot,
or by any other severe and unforeseeable occurrence that is beyond the control of that party
(collectively, `'Enforced Delay").. Performance by a party of its, obligations shall be excused
during, and extended for a period of time equal to, the period (on a day -for -day basis) for which
the cause of such Enforced Delay is in effect.
[Signatures on following page]
254-12
EXHIBIT 1
N WITNESS WHEREOF, the Parties have executed this Exclusive Negotiation
Agreement on the dates indicated next to each of the signatures of their authorized representatives,
as appear below.
ATTEST:
NORMA MITRE
Acting Clerk of the Council
APPROVED AS TO FORM:
By: for
SONIA . CA VALHO
City Attorney
RECOMMENDED FOR APPROVAL:
STEVEN A. MENDOZA
Executive Director
Community Development Agency
CITY OF SANTA ANA
KRISTINE RIDGE
City Manager
By: `
Michael
Dated: i
251t-13
EXHIBIT 1
EXHIBIT "A"
TO
NEGOTIATION AGREEMENT
Property Legal Description
All of that certain real property situated in the State of California, County of Orange, City
of Santa Ana, described as follows:
Parcel 1:
All of Lots 2, 3, 6 and the Southerly 10.00 feet of the Nortlierly 20.00 feet of Lot 5 in Block
I 1 and all of Lots 1, 2, 3, 4, 5, and 6 in Block 12 of the Town of Santa Ana, as shown on a Map
recorded in Book 2, page 51 of Miscellaneous Records of Los Angeles County, California.
Together with that portion of Sycamore Street, 60.00 feet wide, as shown on said Map, as vacated
and described in that certain Resolution No. 82-17 of the City Council of the City of Santa Ana, a
certified copy of which was recorded February 11, 1982, as Document No. 82-051577 of Official
Records of Orange County, California, bounded Southerly by the North line of Third Street, 60.00
feet wide, and bounded Northerly by a line parallel with and distant Northerly 140.00 feet,
measured at right angles, from said North line of Third Street.
Excepting therefrom the Easterly 15.00 feet of said Lot 3 in said Block 11.
Parcel 2:
A perpetual easement for. ingress and egress over the South, 2.50feet of the East 15.00 feet
of Lot 3 in Block 11 of the Town of Santa Ana, as shown on Map recorded in Book 2, page 51 of
Miscellaneous Records of Los Angeles County, California, as reserved in the Deed of J.E. Lieberg
et al, dated June 5, 1923 and recorded in Book 475, page 362 of Deeds, records of Orange County,
California.
Parcel 3:
The right to use that portion of a brick wall of the building on Lot l in Block 11 of the
Town of Santa Ana, as per Map recorded in Book 2, page 51 of Miscellaneous Records of Los
Angeles County, California, which adjoins the East boundary line of the South 25.00 feet of Lot 2
in said Block 11, as a party wall, as granted by that certain Agreement, dated July 1, 1919 by and
between H.R. Andre, also known as Roy Andre, et al, as parties of the first part, and L.J. Carden
et al, as parties of the second part, recorded August 19, 1919 in Book 341, page 362 of Deeds,
Records of Orange County, California.
250=14
EXHIBIT 1
Exhibit B
Schedule of Performance
The Developer and the City will work on a Disposition and Development Agreement (DDA)
and cooperate to process all necessary entitlements. The Developer and City will work to clear
CEQA requirements prior to consideration of the DDA by the City Council.
The Developer will fund third party consultant who will prepare necessary reports and studies as
required for CEQA clearance for the entitlements and the DDA.
Both Parties will use their best efforts to process the entitlements for the project as quickly as
possible. The schedule will be amended as needed to reflect status of process.
Performance Schedule:
• Second ENA on City Council Agenda for May 7, 2019.
• Upon execution of ENA, the Developer and City will work on the preparation of a
Disposition and Development Agreement.
• Within 30 days of the execution of the Second ENA, the Developer and City will create a
schedule for Public participation for the entitlement process.
2503=15
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