SECOND MINOR AMENDMENT TO
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS SECOND MINOR AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (this "Amendment") is made this 22°d day of January, 2008 (the "Effective Date") in reference to that certain Disposition and Development Agreement between the City of Hercules ("City"), the City of Hercules Redevelopment Agency ("Agency"), and Hercules New Town Center, LLC, a California limited liability company ("Developer") dated as of April 7, 2005 (the "DDA"), as amended by that certain First Minor Amendment to Disposition and De- velopment Agreement executed as of December 11, 2006 and effective as of December 18, 2006 between City, Agency, and Developer (the "FMA"). This Amendment is also made in reference to the following:
RECITALS:
A. A primary reason for City and Agency to enter into the DDA FMA was to facilitate the initial development of a mixed-use town center on either the parcel identified in the DDA as the "PNR Parcel" or the parcel identified in the DDA as the "C-1 Parcel." Agency and City rec- ognized that such a mixed-use development is "ahead of market" for its location and that Agency and City must offer financial assistance through the DDA in order to bring the mixed-use town center to fruition. The DDA refers to the parcel that is to receive the initial town center develop- ment as the "Primary Parcel." If Agency timely consummates its contemplated land exchange with BART, the PNR Parcel will be the Primary Parcel; otherwise, the C-1 Parcel will be the Primary Parcel.
B. Agency and City subsequently entered into the FMA with Developer in order to move the project on the Primary Parcel forward during uncertain market conditions in a manner that would meet the design expectations of the City, give the City more control over the timing of entitlements and give Agency a greater financial stake in the project on the Primary Parcel. The FMA achieved this result by allowing Developer to receive advances on a portion of the project financial assistance contemplated in the DDA in return for Developer agreeing to pay Agency interest on such advances and provide Agency a share of project revenues.
C. Since the execution of the FMA, Developer and Agency have vigorously pursued project approvals for the PNR Parcel as contemplated by the DDA and FMA, and great progress has been made in that regard. City, Agency, and Developer agree, however, that for the project on the Primary Parcel to proceed as the parties hereto have contemplated, certain adjustments should be made to the budget and schedule for the project on the Primary Parcel, and certain other modifications should be made to the DDA and the FMA. The purpose of this Amendment is to provide for such adjustments and modifications.
D. Under Section 7.8.1 of the DDA, "The City Manager or his designee, along with the Agency Director [Executive Director of Agency] or his designee, shall have the authority to re- view and approve Minor Amendments to this Agreement requested by Developer." Based on the content of this Amendment and the definitions of "Minor Amendment" and "Major Amendment" in the DDA, the undersigned City Manager and Executive Director of Agency finds that this Amendment qualifies as a Minor Amendment under the DDA.
NOW, THEREFORE, in consideration of the foregoing, the covenants and obligations hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree that the DDA, as modified by the FMA, is hereby amended as follows:
Section 1: Definitions
As the context permits, and except as otherwise specifically defined in this Amendment to the contrary, capitalized terms in this Amendment shall have the meaning ascribed to them in the FMA. The following terms are defined for purposes of this Amendment as indicated:
"Amendment" means this Second Minor Amendment to Disposition and Development Agreement by and between Agency and City, on the one hand, and Developer, on the other hand. "Effective Date" means January 22, 2008.
"Escrow" has the meaning ascribed to it in Article I of the DDA. "FMA" means that certain First Minor Amendment to Disposition and Development Agreement executed as of December 11, 2006 and effective as of December 18, 2006 between City, Agency, and Developer.
"Primary Project Fund" has the meaning ascribed to it in Article I of the DDA. "Project" has the meaning ascribed to it in Article I of the DDA. "Schedule of Performance" has the meaning ascribed to it in Article I of the DDA.
Section 2: Advances on Primary Project Fund
2.1. Maximum Advance Amount. The Maximum Advance Amount established in the FMA is hereby increased to Four Million Four Hundred Forty-Five Thousand and No/100ths Dollars ($4,445,000.00) from Three Million Five Hundred Thousand and No/100ths Dollars ($3,500,000.00).
2.2. Permitted uses of Advance Funds. In addition to the purposes itemized in the Budget set forth in the FMA, Advance Funds also may be used by Developer to fund: (i) the BART closing costs described in Section 5.3 of the FMA and (ii) an additional One Hundred Twenty Thousand and No/100ths Dollars ($120,000.00) in Red Barn manage- ment fees at the rate of Twenty Thousand and No/100ths Dollars ($20,000.00) per month for six (6) months commencing on July 1, 2008.
2.3. CEQA compliance costs. City has engaged RBF Consultants to provide consulting ser- vices related to compliance with the California Environmental Quality Act for the Pro- ject on the Primary Parcel. Such services relate to both the Project on the Primary Parcel and other Projects. Developer agrees to pay One Hundred Fifty Thousand and No/100ths Dollars ($150,000.00) as its fair share contribution for such services. Advance Funds may be used to make such payments. Other than such payments, Developer shall have no other financial responsibility with respect to compliance with the California Envi- Second Minor Amendment to Disposition and Development Agreement Page 2 NTC DDA Second Minor Amendment R06 Printed. 2/25/08, 16 44 PM ronmental Quality Act for the Project on the Primary Parcel. City and Developer shall jointly own the work product from such consulting services. The set of documents pro- duced shall be owned by City. The cost of additional copies or shall be borne by the re- questing party.
2.4. Traffic study cost. In order to expedite the completion of a traffic study for the Project on the PNR Parcel, Developer agrees to enter into a contract with Fehr and Peers in the amount of approximately Seventy-Eight Thousand and No/100ths Dollars ($78,000.00) with traffic consultant fehr and Peers and to pay the contracted amount to fehr and Peers as it comes due. Developer shall pay such amount out of Advance Funds, but Agency shall reimburse Developer for the amounts expended within thirty (30) days of invoice by Developer. Developer shall, in turn, repay Agency the amount of such reim- bursement as a repayment of the Advance Funds. The intent of the parties is that the net effect will be that Agency pays the Fehr and Peers expense and that the Budget for the use of Advance Funds is not affected.
Section 3: Construction Costs
3.1. BART Parking Project. Notwithstanding anything to the contrary in the DDA or in the FMA, Agency shall bear all construction costs including, without limitation, direct construction costs, construction management costs, construction-related insurance costs, and any construction finance costs associated with the BART Parking Project de- scribed in the FMA. Notwithstanding the foregoing, to the extent funds are available in the Primary Project Fund after reducing the amount to be deposited into such fund pur- suant to Section 2.6 of the FMA, Agency may draw a reimbursement from the Primary Project Fund for funds actually advanced by Agency for construction costs associated with the BART Parking Project up to a maximum aggregate reimbursement of Two Mil- lion and No/100ths Dollars ($2,000,000.00).
3.2. Access between PNR Parcel and C-1 Parcel. Agency and City have considered provid- ing pedestrian and/or road improvements between the PNR Parcel and the new BART parking facility on the C-1 Parcel. The costs of any such improvements shall be borne entirely by Agency and not by Developer.
Section 4: Additional Provisions and Amendments
4.1. Retail development. For purposes of defining the development program in the DDA and in the FMA, the term "retail" shall be construed to include not more than twelve thou- sand square feet (12,000 square feet) of ground-floor office space or live-work space on the ground floor of residential units. The total program area suitable for retail uses is un-
4.2. Primary Parcel Schedule of Performance. Notwithstanding anything to the contrary in the DDA or in the FMA, the Schedule of Performance for the Project on the Primary Parcel shall be as set forth on Exhibit "A" hereto.
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4.3. Escrow Agent and Title Company. Notwithstanding anything to the contrary in the DDA, Escrow has been opened with Old Republic Title, whose address is 1000 Burnett Avenue, Suite 400, Concord, California 94520, which shall be both the "Escrow Agent" and the "Title Company" under the DDA.
Section 5: General Provisions
5.1. Representations and warranties. Agency and City each represents and warrants to De- veloper, and Developer represents and warrants to Agency and City, that each of its rep- resentations and warranties set forth in Section 7.3 of the DDA remain true with respect to the DDA as modified by this Amendment.
5.2. Time; Parties; Interpretation. Each of the provisions contained in Sections 7.5 through
7.7 of the DDA, which relate to time, parties, and interpretation, shall apply to this Amendment in the same manner as they apply to the DDA and are hereby incorporated herein by this reference, saving only Section 7.7.3 of the DDA, which is replaced by Section 5.3 of this Amendment for purposes of this Amendment.
5.3. Entire agreement. This Amendment includes pages 1 through 5 and Exhibit "A," which constitute the entire understanding and agreement of the Parties with respect to Amend- ing the DDA, as modified by the FMA, as of the Effective Date. This Amendment inte- grates all of the terms and conditions mentioned herein or incidental hereto, and super- sedes all negotiations or previous agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof.
5.4. Effect of section numbering. The section numbers of this Amendment are not intended to correspond with similar section numbers contained in the DDA or in the FMA. The numbering of any section of this Amendment with a number that matches a section number in the DDA or in the FMA is coincidental and shall not, by virtue of the match- ing section number, have the effect of amending or replacing the section of the DDA or of the FMA that has the matching section number.
5.5. Effectiveness of the DDA. The parties hereto acknowledge and agree that, except as modified by this Amendment, the DDA, as modified by the FMA is in full force and ef- fect in accordance with its terms as of the Effective Date.
5.6. Counterparts. This Agreement may be signed in counterparts, and is executed in three (3) duplicate originals, each of which is deemed to be an original.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Ef- fective Date.
"Agency":
CITY OF HERCULES REDEVELOPMENT AGENCY
By:_
leison E. Oliva, Executive Directo:
"City":
THE CITY OF HERCULES
my Care in iry Minger
"Developer":
HERCULES NEW TOWN CENTER, LLC,
a California limited liability company
By: RED BARN COMMUNITIES COMPANY,
a California corporation,
its Manager
By:
Thomas J. Weigel, President
THOMAS J. WEIGEL,
an individual.
-Thonyas J. Weigel
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Exhibit "A"
Primary Parcel Schedule of Performance
The Primary Parcel Schedule of Performance is as follows, subject to modification pursuant to the terms of Section 5.2 of the FMA. For convenience of reference only, the "Code" column identifies the category of each action as follows: APPL = preparation of the development applica- tion; BART = activities related to the BART Exchange; CEQA = compliance with the California Environmental Quality Act; and APRV = hearings and actions on the development application for approval or disapproval.
[Code | Action Completion Date ] Resp. Party
APPL (2) Degelop erad progend scription for Primary Project Completed Developer & City
Submittal Package
(b) Developer and Agency jointly prepare strategy for Completed Developer & compliance with all Governing Ordinances and all City
Laws that are applicable to the Project
BART (c) City or Agency undertakes to satisfy all BART Pre- Completed City w/ De- Exercise Conditions with project management as- veloper assis- sistance from Developer tance
(d) Following completion of (a) and (b) above, Agency Approximately City w/ De- undertakes environmental studies and all other 4/18/08 veloper assis- steps necessary to issue Draft EIR for public review tance with project management assistance from Devel-
APPL (e) Following completion of (a) and (b) above, Devel- Approximately Developer & oper and Agency jointly develop all components of 2/20/08 City the Primary Project Submittal Package
(f) Following completion of (e) above, Developer and Approximately Developer & Agency jointly prepare, and City accepts as com- 2/27/08 City ›lete, the Primary Project Submittal Package
CEQA g) Following completion of (d), Agency undertakes al Approximately City w/ De- teps necessary to process the EIR from circulatio 7/3/08 veloper assis- of the Draft EIR for public review to the prepara- tance tion of a Final EIR, statement of overriding consid-
erations, and mitigation monitoring and reporting
program
BART (h) Developer, under the direction of City, prepares Approx. 2/1/07 to City w/ construction documents for the BART Parking Pro- approx. 4/30/08 Developer ject assıstance
Exhibr "A"— Schedule of Performance age A-
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Code Action Completion Date Resp. Party
APRV ( Poll ping cheation od g, Paring Condision Approx. 7/14/08 City mmend with changes, or not recommend Cit
ouncil Approval of the Primary Proiect Submitta
Package
APRV (i Following completion of (i), City Council holds Approx. 7/28/08 City public hearing and votes to approve or not approve
the Primary Project Submittal Package
(k) Primary Project Approvals are complete following Approx. 9/9/08 City second reading of the ordinance(s) approving the
Primary Project Submittal Package and following
the expiration of the challenge period under CEQA
BART 1) Following completion of (c) and sufficient progress Approx. 3/31/08 City on its Agency enerates inconstange pict
ART | (m) Following completion of (h), City issues buildir Approx. 4/29/08, City mits for BART Parking Proje but in any event to
be completed prior
o the scheduled
closing date of the
BART Exchange
BART (r) Closing of BART Exchange Approx. 6/15/08 City
(o) 60 days following the completion of Primary Pro- Approx. 11/10/08 Agency and Develope:
to Developer
rhibur "/"_ Page A-2
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