55707.00003\44092490.2
1 CITY OF LANCASTER
FIRST AMENDMENT TO
EXCLUSIVE NEGOTIATION AGREEMENT AMENDMENT
THIS First Amendment, effective August 26, 2025, (“Effective Date”), is between the City of Lancaster, a California municipal corporation (“City”), and Grupe Investment Company, Inc., a California Corporation (“Grupe”) with respect to the original Exclusive Negotiation Agreement between the parties with an effective date of May 27, 2025 (“Agreement”). The parties desire to extend the term of the Agreement.
The Parties agree as follows:
1. The term of the Agreement is extended an additional 90 days until November 27, 2025.
2. All other terms and provisions of the Agreement and subsequent amendments are unchanged and remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed and attested by their respective duly authorized officers.
CITY OF LANCASTER,
a California municipal corporation
By: ______________________________
Trolis Niebla, City Manager
APPROVED AS TO FORM:
By: _____________________________
City Attorney
GRUPE INVESTMENT COMPANY, INC.,
a California corporation
By: _____________________________
Matt Skelton, Vice President Acquisition
DEPARTMENT HEAD APPROVAL:
By: ___________________________
Department Director
ATTEST:
By: _____________________________
City Clerk
Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038
STAFF REPORT
Lancaster Housing Authority
HA CC 1
8/26/2025
TN
Date:August 26, 2025
To: Chairman Parris and Authority Members
From:Patti Garibay, Director - Community Development
Nicole Jones, Senior Analyst – Community Development
Subject:Approve Extension to Exclusive Negotiating Agreement with Grupe Investment Company, Inc.
Recommendation:
1. Authorize the Executive Director or his designee to negotiate, finalize and execute an Extension to the original Exclusive Negotiating Agreement (ENA) with Grupe Investment Company, Inc. for an additional three-month period for the potential disposition of property owned by the Lancaster Housing Authority. No deposit will be required.
2. Authorize the Executive Director or his designee to negotiate, finalize and execute all related documents in a form approved by the City Attorney.
G.C. Section 84308: No
Fiscal Impact:
None.
Background:
The Lancaster Housing Authority (“Authority”) owns a number of properties intended for affordable housing development. One such property, “HNR-3,” is an assemblage of four parcels comprised of approximately 35 acres located on the former Antelope Valley Fairgrounds at the intersection of Avenue I and Division Street.
An RFP was completed in early 2023. This agreement represents the Authority’s opportunity to take the first steps toward the development of this property. Grupe is interested in acquiring approximately 12.9 acres of the Property from the Housing Authority (depicted in Exhibit B of the subject ENA; the “Grupe Portion”), and thereafter, securing all necessary entitlements to Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038 2 1
5 1
redevelop the Grupe Portion with approximately 200 units of workforce for-sale housing (the “Grupe Project”).
While precise Area Median Income (AMI) levels for the subject units are yet to be determined, the developer envisions that the new workforce condominiums will target first-time homebuyers with AMIs ranging from 90% to 120%, with the majority at 100% of AMI. The project will be composed of two-, three- and four-bedroom units, with amenities such as a central community center, a pool, and other recreational facilities.
The proposed Extension to the original Exclusive Negotiating Agreement will enable staff and the developer to enter into formal negotiations with the goal of crafting a Disposition and Development Agreement (DDA) for the sale and development of the property. The ENA term will be for an additional three months. If the staff and the developer agree on a term sheet by the 90-day deadline, the Exclusive Negotiating Agreement continues and the Parties have until 12 months from the Effective Date of the ENA to negotiate and execute the DDA. If the staff and developer are unable to reach mutually agreeable terms during the ENA period, the property would again be marketed to other potential developers. The ENA does not bind the Authority to sell the property. The resulting DDA would be subject to approval by the Authority.
The envisioned project has incredible potential to meet a significant need in our community:
affordable first-time homebuyer opportunities for moderate and workforce households that are otherwise mostly shut out of the homeownership market. Attractive design, together with quality-of-life features fostering walkability and recreation, will make this a sought-after destination for workforce households, particularly those with children as well as young couples just beginning to build their lives together. These homes will assist its owners in achieving the benefits of homeownership: housing stability and building generational wealth, thereby serving a need in Lancaster for generations to come.
Attachment:
Exclusive Negotiation Agreement Extension (ENA) w Grupe Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038
CITY OF LANCASTER
EXCLUSIVE NEGOTIATION AGREEMENT
THIS EXCLUSIVE NEGOTIATION AGREEMENT (“Agreement”) is dated as of May 24 , 2025 (“Effective Date”), for reference purposes only, and is entered into by and between the City of Lancaster, a California municipal corporation (“City”), and Grupe Investment Company, Inc., a California Corporation (“Grupe”). The City and Grupe 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:
RECITALS
A. The City owns approximately 35 acres of real property located at the intersection of East Avenue I and Division Street in Lancaster, California [Assessor’s Parcel Nos. 3176-005-915, -918, -919, - 921, -930], more particularly described on Exhibit A-1 attached hereto and depicted on Exhibit A-2 attached hereto (the “Property”).
B. Grupe is interested in acquiring approximately 12.9 acres of the Property from City (depicted in Exhibit B; the “Grupe Portion”), and thereafter, securing all necessary entitlements to redevelop the Grupe Portion with approximately 200 units of workforce for-sale housing, (the “Grupe Project”).
C. Other portions of the Property are anticipated to be developed by Grupe and other developers in cooperation with Grupe, each of whom is expected to also eventually execute an Exclusive Negotiation Agreement with City for those other portions of the Property. It is anticipated that other projects on the Property will not compete directly with Grupe’s Project.
D. The intent of the City and Grupe in entering into this Agreement is to establish a specific, limited period of time to negotiate the terms of a future agreement between the Parties governing the potential disposition and development of the Grupe Portion (“DDA”).
NOW, THEREFORE, in view of the goals and objectives of the City relating to the development of the Grupe Portion, and the promises of the City and Grupe set forth in this Agreement, the City and Grupe agree, as follows:
1. Term of Agreement. The City and Grupe have 90 days from the Effective Date to agree on a term sheet detailing terms similar to the example in Exhibit C. If the Parties fail to reach agreement on the term sheet by the 90-day deadline, this Agreement expires. If the Parties agree on a term sheet by the 90-day deadline, this Agreement continues and the Parties have until Docusign Envelope ID: CC176489-FC05-4495-8DC1-5365D2474485 Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038 12 months from the Effective Date to negotiate and execute the DDA. The initial 90-day period and the extension, if applicable, are the “Negotiation Period.”
2. Negotiation of DDA. During the Negotiation Period, the Parties will attempt to negotiate a DDA diligently and in good faith. Nothing in this Agreement binds either Party to reach an agreement on a DDA.
3. Each Party to Pay Its Respective Costs and Expenses. Each Party is responsible for its own expenses in connection with this Agreement and the DDA negotiation.
4. Appraisal of Property. During the Negotiation Period, either Party may, at its sole expense, obtain an appraisal of the Grupe Portion to determine its fair market value to aid the Parties in negotiating a purchase price as part of the DDA . The City will share with Grupe any appraisals obtained by the City. Grupe will share with the City any appraisals obtained by Grupe.
5. CEQA. Grupe agrees that the City is by law entitled or required to exercise discretion in various ways concerning development of the Grupe Portion, including but not limited to in considering entitlements and permits for the development, as well as adoption of any amendments to City ordinances, regulations , or planning or policy documents. The Parties recognize that execution of this Agreement does not constitute “approval” of a “project,” as those terms are defined by the California Environmental Quality Act and does not limit the ability of the City to consider alternatives or mitigation measures for any project that might arise and be subject to CEQA.
6. Exclusivity. During the Negotiation Period, the City and City staff may not negotiate with any other person or entity concerning the Grupe Portion. The City may receive and retain unsolicited offers regarding the Grupe Portion, but the City may not negotiate with the proponent of any such offer during the Negotiation Period. The City may disclose the fact that the City is a party to this Agreement.
7. Acknowledgments and Reservations. If this Agreement expires or is terminated for any reason, or a future DDA is not approved and executed by both the City and Grupe for any reason, neither Party is under any obligation, nor has any liability to the other or to any other person regarding the Grupe Portion. Neither Party is bound by any statement, promise, or representation made by the other Party’s staff or representatives during the course of negotiations of a future DDA.
The Parties will only be legally bound after a complete DDA is approved and executed by both the Parties, each in its respective absolute discretion following one or more duly noticed public hearings as required by law.
8. Breach. If a Party commits a material breach of this Agreement and the Party does not cure the breach within 30 days , the exclusive remedy of the Party who has not breached is to terminate this Agreement by serving written notice of termination on the breaching Party.
Docusign Envelope ID: CC176489-FC05-4495-8DC1-5365D2474485 Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038
9. Notice. Any notice or instrument required to be delivered under this Agreement must be delivered at the addresses shown below.
TO GRUPE: Attn:
Phone:
Email:
Grupe Investment Company, Inc.
3255 W. March Lane, Suite 400
Stockton CA 95219
(916) 709-0441
[email protected]
TO CITY OF LANCASTER Attn:
Phone:
Email:
City Manager
44933 Fern Avenue Lancaster,
CA 93534
661-723-6000
[email protected]
10. Counterpart Originals. This Agreement may be executed by the Parties in multiple counterpart originals, all of which together constitute a single agreement. The Parties may sign this Agreement electronically.
11. No Third-Party Beneficiary; Assignees. Nothing in this Agreement is intended to benefit any person or entity other than the City and Grupe. Grupe may not assign its rights under this Agreement without the City’s written consent, which the City may grant or withhold at its sole discretion; except that the City may not unreasonably withhold its consent if the assignment is to a Grupe-owned and controlled entity.
12. Governing Law. This Agreement is governed by exclusively by the laws of the State of California, without application of any conflict-of-laws principles or statutes. Venue for any dispute regarding the Agreement lies exclusively in the courts in Los Angeles County, California.
13. Waivers. No waiver of any breach of any term or condition contained in this Agreement may 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 is enforceable against either Party unless it is made in writing and executed by both Parties.
Docusign Envelope ID: CC176489-FC05-4495-8DC1-5365D2474485 Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038 CITY
CITY OF LANCASTER,
a California municipal corporation
By: ______________________________
Trolis Niebla, City Manager
APPROVED AS TO FORM:
By: _____________________________
City Attorney
DEVELOPER
GRUPE INVESTMENT COMPANY,
INC., a California corporation
By: _____________________________
Matt Skelton, Vice President Acquisition
ATTEST:
By: _____________________________
City Clerk
DEPARTMENT HEAD APPROVAL
By: _____________________________
Docusign Envelope ID: CC176489-FC05-4495-8DC1-5365D2474485 Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038 EXHIBIT A-1
Legal Description of Property
For APN/Parcel ID(s): 3176-005-930, 3176-005-915, 3176-005-918 and 3176-005-919
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LANCASTER, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
LOTS 3 AND 5 OF TRACT NO. 61166, IN THE CITY OF LANCASTER, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1309 PAGES 17 TO 19 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION OF SAID LOT 3 DESCRIBED IN DEED RECORDED DECEMBER 4, 2013 AS INSTRUMENT NO. 2013-1713119, OF OFFICIAL RECORDS.
EXCEPT THEREFROM, ALL MINERAL DEPOSITS AS DEFINED IN SECTION 6401 OF THE PUBLIC RESOURCES CODE LYING BELOW A DEPTH OF 500 FEET, WITHOUT THE SURFACE RIGHT OF ENTRY, AS RESERVED BY THE STATE OF CALIFORNIA IN DEED RECORDED MARCH 10, 2000 AS INSTRUMENT NO. 00-0362954, OF OFFICIAL RECORDS.
For APN/Parcel ID(s): 3176-005-921
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LANCASTER, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
LOT 7 OF TRACT NO. 61166, IN THE CITY OF LANCASTER, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1309 PAGES 17 TO 19 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION OF SAID LOT 3 DESCRIBED IN DEED RECORDED DECEMBER 4, 2013 AS INSTRUMENT NO. 2013-1713119, OF OFFICIAL RECORDS.
EXCEPT THEREFROM, ALL MINERAL DEPOSITS AS DEFINED IN SECTION 6401 OF THE PUBLIC RESOURCES CODE LYING BELOW A DEPTH OF 500 FEET, WITHOUT THE SURFACE RIGHT OF ENTRY, AS RESERVED BY THE STATE OF CALIFORNIA IN DEED RECORDED MARCH 10, 2000 AS INSTRUMENT NO. 2000-0362954, OF OFFICIAL RECORDS.
Docusign Envelope ID: CC176489-FC05-4495-8DC1-5365D2474485 Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038 55707.00003\43360417.2
6 EXHIBIT A-2 Depiction of Property [See Attached]
Docusign Envelope ID: CC176489-FC05-4495-8DC1-5365D2474485 Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038 55707.00003\43360417.2
7 EXHIBIT B The Grupe Portion
Grupe Home Ownership
206 Units on 12.9 Acres
Docusign Envelope ID: CC176489-FC05-4495-8DC1-5365D2474485 Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038
STAFF REPORT
Lancaster Housing Authority
HA CC 1
5/27/2025
TN
Date:May 27, 2025
To: Mayor Parris and City Council Members
From:Patti Garibay, Director - Community Development
Nicole Jones, Senior Analyst – Community Development
Subject:Exclusive Negotiating Agreement with Grupe Investment Company, Inc.
Recommendations:
1. Authorize the Executive Director or his designee to negotiate, finalize and execute an Exclusive Negotiating Agreement (ENA) with Grupe Investment Company, Inc. to enter into negotiations for a three-month period for the potential disposition of property owned by the Lancaster Housing Authority. No deposit will be required.
2. Authorize the Executive Director or his designee to negotiate, finalize and execute all related documents in a form approved by the City Attorney.
G.C. Section 84308: No
Fiscal Impact:
There is no impact to the General Fund.
Background:
The Lancaster Housing Authority (“Authority”) owns a number of properties intended for affordable housing development. One such property, “HNR-3,” is an assemblage of four parcels comprised of approximately 35 acres located on the former Antelope Valley Fairgrounds at the intersection of Avenue I and Division Street.
This agreement represents the Authority’s opportunity to take the first steps toward the development of this property. Grupe is interested in acquiring approximately 12.9 acres of the Property from the City (depicted in Exhibit B of the subject ENA; the “Grupe Portion”), and thereafter, securing all necessary entitlements to redevelop the Grupe Portion with approximately 200 units of workforce for-sale housing (the “Grupe Project”).
While precise Area Median Income (AMI) levels for the subject units are yet to be determined, the developer envisions that the new workforce condominiums will target first-time homebuyers Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038 2 0
4 7
with AMIs ranging from 90% to 120%, with the majority at 100% of AMI. The project will be composed of two-, three- and four-bedroom units, with amenities such as a central community center, a pool, and other recreational facilities.
The proposed Exclusive Negotiating Agreement will enable staff and the developer to enter into formal negotiations with the goal of crafting a Disposition and Development Agreement (DDA) for the sale and development of the property. The ENA term will be up to three months. If the staff and the developer agree on a term sheet by the 90-day deadline, the Exclusive Negotiating Agreement continues and the Parties have until 12 months from the Effective Date of the ENA to negotiate and execute the DDA. If the staff and developer are unable to reach mutually agreeable terms during the ENA period, the property would again be marketed to other potential developers. The ENA does not bind the Authority to sell the property. The resulting DDA would be subject to approval by the Authority.
The envisioned project has incredible potential to meet a significant need in our community:
affordable first-time homebuyer opportunities for moderate and workforce households that are otherwise mostly shut out of the homeownership market. Attractive design, together with quality-of-life features fostering walkability and recreation, will make this a sought-after destination for workforce households, particularly those with children as well as young couples just beginning to build their lives together. These homes will assist its owners in achieving the benefits of homeownership: housing stability and building generational wealth, thereby serving a need in Lancaster for generations to come.
Attachment:
Exclusive Negotiation Agreement (ENA) w Grupe
Docusign Envelope ID: 81075FB1-9504-4042-8440-403FAB0C4038