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EXCLUSIVE NEGOTIATION AGREEMENT
This EXCLUSIVE NEGOTIATION AGREEMENT (the “Agreement”) is made and entered into to be effective as of April 24, 2024, (the “Effective Date”), by and between the CITY OF Burbank, a municipal corporation, (“City”), and Home Again Los Angeles, a California Non- profit (“HALA”). HALA and City are herein referred to individually as “Party” and collectively as the “Parties.”
RECITALS
A. The City holds fee simple title to the Property located at 2244 N. Buena Vista Street which contains an approximately 4, 500-square-foot structure that was built in 1949 by the City for use as a City fire station (the “Property”) and is further described in Exhibit A attached hereto and made a part hereof.
B. From 1994 through 2021, the Boys and Girls Club leased the Property. In May of 2021, the Boys and Girls Club vacated the P roperty and moved to a new facility.
The Property is currently vacant.
C. At the April 5, 2022, City Council meeting, staff was directed to issue a Request for Proposals (RFP) to lease the Property to a non-profit that will provide mutually agreeable City services that support the City’s mission.
D. On November 1, 2022, City Council directed staff to award the RFP to HALA for the purpose of negotiating a long-term lease.
E. HALA has represented its willingness and ability to contribute toward the cost of creating plans and engineering drawings for critical building infrastructure and tenant improvements as well as to participate in assessments and studies required for entitling the Property for HALA’s intended use with the intention to ultimately return the Property to leasable status in good repair and condition.
F. HALA and the City both acknowledge their mutual intention to enter into the Agreement to explore all costs and obligations described in the above paragraphs with the goal of delivering a restored and rehabilitated structure ready for HALA occupancy under a lease agreement containing terms and conditions acceptable to both parties.
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. Incorporation of Recitals. The parties hereby incorporate by this reference the recitals set forth above.
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2. Good Faith Efforts to Negotiate. The Parties agree, for the term of this Agreement, to negotiate diligently and in good faith to finalize the Architectural and Engineering Plans, obtain assessments and environmental documents and construction bids, determine each party’s rights and responsibilities, and prepare and enter into a lease agreement or a similar agreement for the Property.
(a) If HALA has not continued to negotiate diligently and in good faith, as determined by C ity in its reasonable discr etion, City shall give written notice thereof to HALA who shall then have ten (10) business days to commence negotiating in good faith.
Following the failure of HALA to thereafter commence negotiating in good faith within such 10-business day period, this Agreement may be terminated by C ity. IF THIS
AGREEMENT IS TERMINATED BY CITY PURSUANT TO THE ABOVE, HALA
ACKNOWLEDGES AND AGREES THAT CITY WILL SUFFER DAMAG ES INCLUDING
LOST OPPORTUNITIES TO PURSUE OTHER TENANT ALTERNATIVES AND THAT
IT IS IMPRACTICABLE AND INFEASIBLE TO FIX THE ACTUAL AM OUNT OF SUCH DAMAGES. THEREFORE, THE PARTIES AGREE THAT I F THIS AGREEMENT IS
TERMINATED AS PROVIDED ABOVE, CITY SHALL RETAIN THE DEPOSIT AS FIXED
AND LIQUIDATED DAMAGES , AND NOT AS A PENALTY , AND FOLLOWING SUCH
TERMINATION NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR LIABILITY TO THE OTHER UNDER THIS AGREEMENT.
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City Initials HALA Initials
(b) If C ity has not continued to negotiate diligently and in good faith, as determined by HALA in its reasonable discretion, HALA shall give written notice thereof to City which shall 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 10 business-day period, this Agreement may be terminated by HALA . In the event of such termination by HALA, City shall return any unused Good Faith funds provided by HALA as defined in Section 8.
(c) If, notwithstanding C ity's and HALA’s mutual diligent and good faith negotiations, the Parties have not entered into a Lease or a similar agreement on or before expiration of the Term (as defined below) or any extension thereof, City shall return any Good Faith funds after taking into account any expenditures made for costs incurred by the City pursuant to this Agreement, and neither party shall have any further rights against or liability to the other under this Agreement.
(d) If performance of this Agreement results in execution of a Lease or a similar agreement, the remaining Deposit shall be applied to the first month’s rent as set forth in the Lease or a similar agreement.
3. HALA’s Exclusive Right to Negotiate With C ity. City agrees that it will not, during the term of this Agreement, directly or indirectly, through any officer, employee,
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agent, or otherwise, solicit, initiate or encourage the submission of bids, offers or proposals by any person or entity with respect to the lease or sale of the P roperty and the City shall not engage any broker, financial adviser or consultant to initiate or encourage proposals or offers from other parties with respect to the Property or any portion thereof.
Furthermore, City shall 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 HALA and its representatives with a view to engaging, or preparing to engage, that person with respect to leasing the Property or any portion thereof.
4. Term. The term of this Agreement (“Term”) shall commence on the Effective Date and shall terminate on July 31, 2026, unless extended or earlier terminated as provided in this Agreement . The Term may be extended for up to a maximum of two additional sixty (60) day periods, upon the mutual written agreement of the Parties acting through and in the discretion of its Community Development Director.
The term “negotiate” as used in this paragraph shall preclude City from accepting, for review and analysis by staff, proposals from persons or entities other than HALA, to lease the Property during the term of this Agreement.
The City shall not be precluded by anything in this Agreement from fur nishing to other persons or entities unrelated to HALA information in possession of City, which it is required by law to furnish or which it would otherwise normally furnish to persons requesting information from the C ity concerning its activities, goals and matters of a similar nature.
5. Negotiation of F inal Lease . Nothing herein shall be deemed to be a representation by either City or HALA that a mutually acceptable Lease will be produced.
Additionally, nothing herein shall be deemed to be a guarantee or representation that any proposed Lease will be approved by the C ity Council. HALA acknowledges that C ity Council’s approval of the Lease is subject to the appropriate public hearing, notices, and other processes required by law.
During negotiations, HALA shall diligently undertake and complete all of its responsibilities and obligations including those listed in Section 9 of this Agreement necessary to define the scope of lease, identify the total improvement cost and negotiated tenant improvements.
City Obligations During Negotiation Period. During the term of this Agreement, the Parties shall meet on a regular basis and City shall demonstrate that it has substantially completed all of the following tasks:
(a) Receive Input. City will oversee the following with input from HALA: selection of architect and engineering services, architectural concept designs and
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building plans, assessments and environmental studies, the creation of construction bid documents a nd construction bid, selection of construction contractor.
(b) Site Plan, Floor Plan and Elevation. Prior to January 31, 2025, City will obtain architectural plans that incorporate HALA’s requested tenant improvements.
(c) Entitlements. Prior to January 31, 202 5, City shall submit a completed application for development entitlements.
(d) Construction Drawings . Prior to May 31, 2025, 202 5, City shall complete construction drawings and submit for permit review.
(e) Construction Bid. Prior to May 15, 202 5, City shall prepare a construction bid Request for proposals.
(f) Construction Costs Negotiations. Prior to August 31, 2025, City and HALA will enter into cost negotiations for infrastructure and tenant improvements.
(g) Monthly Reports. During the term of this Agreement, City shall provide monthly reports indicating the efforts taken and milestones achieved.
(h) Lease Agreement. Providing that the City and HALA have complied with the scope of and schedule for the above requirements, HALA will meet and negotiate diligently and in good faith with the City towards the preparation of a draft Lease Agreement. The Lease will be prepared and negotiated by July 31, 2025.
7. HALA Tasks during Negotiation Period. During the Negotiation period of this Agreement HALA shall undertake the following tasks:
(a) Review of Documents and Submittals. HALA will diligently review all plans and documents submitted by the City and provide input including the Architectural Plans, Engineering Drawings, studies and environmental documents and provide City with a written response outlining relevant comments.
(b) Environmental Site Assessment. HALA will review the environmental assessments findings and take into consideration any such mat ters that may impact Project implementation.
(c) Lease Agreement. Subject to entitlement , site construction and rehabilitation approval, the HALA agrees to meet and negotiate diligently and in good faith with the City toward preparation of a Lease.
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8. Cost Sharing
(a). Preconstruction. Pre-construction costs are estimated to total $640,000.
(i) HALA Costs. Upon execution of this Agreement, HALA agrees to pay $64,000 as Good Faith Funds to be spent towards costs associated with creating the required documents to obtain entitlement approvals and construction bid documents including fees paid to obtain entitlements. These estimated costs are reflected in Exhibit B: Estimated Fee Estimates and in Exhibit C: FSY Fee Proposal)
(ii) City Costs. Upon execution of this Agreement, City agrees to pay the remainder of the fees and costs, estimated to be $576,000 for costs associated with creating and obtaining documents required for entitlements and construction bid documents, and not to exceed $700,000. This includes but is not limited to those listed in Exhibit B.
9. Termination. This Agreement shall terminate upon the earliest to occur of the following:
(a) City and HALA are unable to negotiate a mutually acceptable Lease Agreement, which is left to each Party’s sole discretion; or (b) At any time, upon written notice to the other Party by the Party electing to terminate, upon the terminating Party’s good faith determination that further negotiations would be unproductive or termination as allowable under this Agreement.
Upon termination of this Agreement, all non- privileged third- party reports commissioned by HALA in connection with the Project shall be transferred to the C ity without warranty and the Deposit, or any remaining portion thereof, shall be immediately returned to City except if the Agreement is terminated pursuant to Section 1(b).
10. Solicitation and Conflicts of Interest. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with C ity, shall have any direct or indirect interest in this Agreement or obtain any present or anticipated material benefit arising there from.
11. Disclosures and Cooperation. C ity and HALA 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. Unless precluded by law, HALA shall keep confidential all proprietary information provided by City to HALA.
HALA expressly acknowledges and agrees that C ity will not be bound by any statement, promise, or representation made by City staff during the course of negotiations
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of a Lease and that the City shall be legally bound only upon the approval of the Lease by the Burbank City Council.
HALA further acknowledges and agrees that nothing in this Agreement or C ity’s cooperation in satisfying its obligations under this Agreement shall be deemed a promise, representation, or guaranty that the Parties will reach any future agreement or enter a Lease agreement.
12. Attorneys’ Fees. In the event that either party brings any legal action to interpret or enforce any provision of this Agreement, the prevailing party in that action shall be entitled to receive, in addition to all other relief available to it, its costs of litigation and reasonable attorney’s fees, including costs and fees incurred on appeal and in enforcing any judgment which may be rendered pursuant to the underlying action.
13. Governing Law; Jurisdiction and Venue. This Agreement shall be interpreted and enforced in accordance with the provisions of California law in effect at the time is the Agreement is executed, without regard to conflicts of law provisions. Any action brought concerning this Agreement shall be brought in the appropriate court for the County of Los Angeles, California. Each party hereby irrevocably consents to the jurisdiction of said court. HALA hereby expressly waives all provisions of law providing for a change of venue due to the fact that the City of Burbank may be a party to such action, including, without limitation, the provisions of California Code of Civil Procedure Section 394. HALA further waives and releases any right it may have to have any action concerning this Agreement transferred to Federal Dist rict Court due to any diversity of citizenship claim that may exist between City and HALA.
14. Expenses. All reasonable third-party costs and expenses including, but not limited to, all legal fees, consultant fees, and expenses , incurred in connection with this Agreement and the activities contemplated herein shall be paid by City and HALA as outlined in Section 8, Cost Sharing.
15. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall 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 shall 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 shall 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;
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City: Simone McFarland
Community
Development Dept.
150 N. Third Street
Burbank, CA 91502
Tel: (818) 826-5202
Email: [email protected]
HALA: Home Again Los Angeles
Attn: Albert Hernandez
2321 N. Catalina Steet
Burbank, CA 91504
Tel: (818) 562-7778
Email: [email protected]
16. Severability. If any term or provision of this Agreement or the application thereof shall, to any extent, be held to be invalid or unenforceable, such term or provision shall 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.
17. Entire Agreement; Amendments In Writing; Counterparts. 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 m ultiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.
18. Successors and Assigns; No Third- Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided however, that neither Party shall 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 shall be void. Subject to the immediately preceding sentence, this Agreement is not intended to benefit, and shall 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.
19. Brokers. Each Party warrants and represents to the other that no brokers have been retained or consulted in connection with this transaction. Each Party agrees
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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 shall survive the expiration or earlier termination of this Agreement.
20. Approvals. Unless otherwise provided in this Agreement, the Community Development Director of the City of Burbank (“Director”) shall be authorized to enter into all written approvals, consents or waivers by the C ity. Nothing herein, however, shall be deemed to prevent the Director from requesting formal approval by the City Council if the Director, in their sole discretion, determines to seek such approval.
21. 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.
22. Counterpart Originals. This Agreement may be executed in counterparts which, when taken together, shall constitute but one and the same instrument.
SIGNATURES ON NEXT PAGE
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IN WITNESS WHEREOF, this Agreement has been executed by the parties, in the State of California, as of the last chronological date set forth by the signatories below.
Date _________________, 2024
"CITY"
THE CITY OF BURBANK, a
municipal corporation
Attest:
_____________________________ ___________________________ Kimberley Clark Justin Hess
City Clerk City Manager
Date _________________, 2024
Approved as to Form
Burbank City Attorney’s Office
__________________________________
By: Ray Johal, Sr. Asst. City Attorney
HOME AGAIN LOS ANGELES “HALA”
By: ____________________________
Name: _________________________
Title: ___________________________
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EXHIBIT “A”
Site Map
2244 N. Buena Vista, Burbank, CA
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Exhibit B
Estimated Fee Estimates
Architectural and Engineering Fees,
Permitting, NEPA
Expenses Amount
FSY Architectural & Engineering BID $391,000
Permitting Estimate for Entitlements $60,000
Entitlement Reserve (50%) $30,000
GEO Tech $15,000
Capacity Analysis (Sewer and
Electricity) $2,000
Project Management $50,000
Project Reserve (15%) $92,000
Total $640,000
HALA's Contribution $64,000
City's Contribution $576,000
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Exhibit C
Arch and Engineering Services
FSY Cost Estimate