Napa City Council
July 16, 2024

EXHIBIT D

RESOLUTION R2022-069

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NAPA, STATE OF CALIFORNIA, (1) DECLARING
APPROXIMATELY 0.75 ACRES OF REAL PROPERTY,

GENERALLY INCLUDING THE SURFACE PARKING LOT

LOCATED AT THE SOUTHEAST CORNER OF PEARL

STREET AND COOMBS STREET, AS EXEMPT SURPLUS

LAND UNDER THE STATE SURPLUS LANDS ACT

PURSUANT TO GOVERNMENT CODE SECTION
54221 (F)(1)(G); (2) AUTHORIZING THE CITY MANAGER

TO EXECUTE AN ASSIGNMENT OF THE PURCHASE

AND SALE AGREEMENT FOR THAT PROPERTY (CITY
AGREEMENT NO. C2020-174) FROM NAPA PARKWAY
PLAZA, LLC, TO COOMBS STREET LLC; AND (3)

AUTHORIZING THE CITY MANAGER TO EXECUTE A
FIRST AMENDMENT TO AGREEMENT NO. C2020-174 TO

FACILITATE COUNCIL'S FUTURE CONSIDERATION OF A

DEVELOPMENT AGREEMENT FOR THAT PROPERTY
WHEREAS, the City of Napa ("City") owns an approximately 0.75 acre surface parking lot with 52 parking stalls located at the southeast corner of Pearl Street and Coombs Street (APN's 003-166-008 &-011) ("Subject Property"); and WHEREAS, on February 1, 2000, the City entered into a License Agreement (City Agreement No. 7583; hereinafter "License Agreement") with the owner of the real property located at 1116 First Street and improved with a retail department store (formerly Mervyn's, and currently Kohl's,) (the "Kohl's Site") by which the City is contractually obligated to provide a minimum of 317 parking stalls for the benefit of the department store during its lease term, which currently expires on July 31, 2031; and WHEREAS, the real property on which the City is required to provide parking for the benefit of the department store is defined in the License Agreement as the "Parking Areas," generally located within walking distance of the Kohl's Site, and it includes the Subject Property; and
WHEREAS, the State Surplus Lands Act (Government Code Sections 54220 - 54234; or "SLA") generally requires local agencies (such as the City) to follow specific procedures to notify the public regarding the availability of "Surplus Land" before it is sold, to provide an opportunity for the public to propose and negotiate for the possible development of projects that meet the State's goals, focused on the provision of affordable housing, and also including opportunities for the development of parks and schools; and
R2022-069Page 1 of 4July 19, 2022

EXHIBIT D

WHEREAS, the City is required under the SLA to declare the Subject Property either "surplus land" or "exempt surplus land," prior to taking action to dispose of the Subject Property; and
WHEREAS, the SLA defines "Exempt Surplus Land" that is not required to follow the procedural requirements of the SLA to include (among other exemptions): "Surplus land that is subject to valid legal restrictions that are not imposed by the local agency and that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site" (Government Code Section 54221 (f)(1)(G)); and
WHEREAS, the License Agreement is a valid legal restriction on the City's use of the Subject Property since the City is legally obligated to provide publicly available parking on the Subject Property, which means housing is prohibited (as it is in conflict with a surface parking lot use), the City did not impose the property restriction as it was a requirement of an integrated project for the department store and the City may not modify the current obligation to provide parking without negotiations with, and the agreement of, the owner of the Kohl's Site; and
WHEREAS, on July 31, 2020, the City entered into a Purchase and Sale Agreement (City Agreement No. C2020-174; hereinafter "Sale Agreement") with Napa Parkway Plaza, LLC (the owner of the Kohl's Site; hereinafter "Owner")), by which: (a) the Owner committed to providing alternative parking solutions for the department store that would result in a termination of the License Agreement; in return for which (b) the City would sell the Subject Property to the Owner for the planned purpose of developing a mixed-use project including approximately 120 rental units (with 15% restricted to 120% AMI affordability), approximately 25,000 square feet of retail, a hotel with approximately 200 rooms, public parking, and outdoor and public spaces; and WHEREAS, when the City Council approved the Sale Agreement on June 23, 2020, it included Recital E which provided: "City has determined that the purchase and sale transaction contemplated by this [Sale] Agreement is exempt from the requirements of the Surplus Lands Act (California Government Code section 54220, et seq.) because the [Subject] Property is subject to valid restrictions to satisfy the Kohl's Parking Obligation;" and
WHEREAS, the contracting party under the Sale Agreement has sold its interests in the Kohl's Site to Coombs Street LLC ("Coombs"), and Coombs has been working with good faith diligence to pursue the project proposed under the Sale Agreement, and Coombs has made substantial progress toward negotiating and drafting the Development Agreement contemplated by the Sale Agreement; and WHEREAS, the City is supportive of the assignment of the Sale Agreement to Coombs, and the City is supportive of amending the internal milestones under the Sale Agreement in order to facilitate the finalization of a proposed Development Agreement, to be presented to Council for consideration at a future Council meeting; and R2022-069Page 2 of 4July 19, 2022

EXHIBIT D

WHEREAS, the City Council has considered all information related to this matter, as presented at the public meetings of the City Council identified herein, including any supporting reports by City Staff, and any information provided during public meetings.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Napa, as follows:

1. The City Council hereby finds that the facts set forth in the recitals to this Resolution are true and correct, and establish the factual basis for the City Council's adoption of this Resolution.

2. The City Council hereby declares the Subject Property "exempt surplus land" pursuant to Government Code Section 54221 (f)(1)(G) and determines that the City may dispose of the Subject Property without further complying with the requirements of the SLA.

3. The City Council hereby authorizes the City Manager to execute the Assignment of Agreement No. C2020-174 (Agreement of Purchase and Sale and Joint Escrow Instructions for property identified as 1051 - 1199 Pearl St.; APN's 003-166-008, and 003-166-011) among Napa Parkway Plaza, LLC ("Assignor") and Coombs Street LLC ("Assignee").

4. The City Council hereby authorizes the City Manager to execute the First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions (Agreement No. C2020-174) with Coombs Street LLC, for property identified as 1051-1199 Pearl St; APN's 003-166-008, and 003-166-011).

5. This Resolution shall take effect immediately upon its adoption.

R2022-069Page 3 of 4July 19, 2022

EXHIBIT D

I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of Napa at a public meeting of said City Council held on the 19th day of July, 2022, by the following vote:

AYES: Alessio, Narvaez, Painter, Luros, Sedgley
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:

Approved as to form:

Tiffany Carra^za
City Clerk
Michael W. Barrett
City Attorney
R2022-069Page 4 of 4July 19, 2022

EXHIBIT D

955 School Street
Napa, CA 94559
www.cityofnapa.org

CITY OF NAPA
Staff Reports Details (With Text)
File #: Version: 1276-2022 Name:

Status:Type: Consent Calendar Passed
File created: In control:7/8/2022 CITY COUNCIL OF THE CITY OF NAPA On agenda: Final action:7/19/2022 7/19/2022
Title: City-owned Surface Parking Lot Property at Southeast Corner of Pearl and Coombs Streets Sponsors:

Indexes:

Code sections:

Attachments:

1. ATCH 1 - Resolution, 2. ATCH 2 - Assignment of Purchase and Sale Agreement, 3. ATCH 3 - First Amendment to Purchase and Sale Agreement
Action ByDate Action ResultVer.

CITY COUNCIL OF THE CITY OF
NAPA
7/19/2022 1
To: Honorable Mayor and Members of City Council
From: Vin Smith, Community Development Director
Prepared By: Vin Smith, Community Development Director
TITLE:

City-owned Surface Parking Lot Property at Southeast Corner of Pearl and Coombs Streets RECOMMENDED ACTION:

Adopt a resolution (1) Declaring approximately 0.75 acres of real property, generally including the surface parking lot located at the southeast corner of Pearl Street and Coombs Street, as exempt surplus land under the State Surplus Lands Act pursuant to Government Code Section 54221(f)(1) (G); (2) Authorizing the City Manager to execute an Assignment of the Purchase and Sale Agreement for that Property (City Agreement No. C2020-174), from Napa Parkway Plaza, LLC, to Coombs Street LLC; and (3) Authorizing the City Manager to execute a First Amendment to Agreement No. C2020-174 to facilitate Council’s future consideration of a Development Agreement for that Property.

DISCUSSION:

On June 23, 2020, the City Council authorized the City Manager to execute a Purchase and Sale Agreement between the City and Napa Parkway Plaza, LLC. for the surface parking lot on the north side of the Kohl’s Department Store in downtown Napa. Zapolski Real Estate (ZRE) is the ownership group of Napa Parkway Plaza. Since that time, ZRE experienced several COVID related delays with its potential development partners and approximately four months ago ZRE sold its interest in the properties encompassing Kohl’s, and others around and adjacent to Kohl’s which comprised the project area, to Coombs Street LLC. The new owners are also experienced California developers that wish to pursue completing ZRE’s vision.

The project proposes to create a mixed-use development consisting of: up to 270 residential rental CITY OF NAPA Printed on 7/21/2022Page 1 of 4
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EXHIBIT D

File #: 276-2022, Version: 1
The project proposes to create a mixed-use development consisting of: up to 270 residential rental units, of which approximately 15% of the final unit count would be constructed on site or offsite and dedicated for income levels up to 120% of Area Median Income; up to 35,000 square feet of ground- floor commercial space; and up to a 210 room upper-scale hotel, all subject to final Design Review. To accomplish this project, ZRE proposed, and now Coombs Street LLC proposes to purchase the City-owned surface parking lot/vacant bus station at the southeast corner of Pearl and Coombs Streets subject to the terms and conditions of the approved Purchase and Sale Agreement. By including the City-owned land within the project footprint, currently called First Street Napa Phase II (“Project”), the developer could locate buildings to create a pedestrian plaza/walkway that continues what has been established in the existing center, connecting both projects with the 9/11 Memorial Park and providing visibility into the center from Main Street. It is also developer’s intention to have the new buildings sited in a way to meaningfully engage and better define the existing pedestrian environment along Napa Creek and the old Brown Street right- of-way. The developer proposes to do this by connecting newly created public spaces within the development to these features.

Coombs Street LLC has agreed to assume all of the obligations of the Purchase and Sale Agreement. However, in order to do so per the terms of the Purchase and Sale Agreement the City must consent to assign the Agreement to Coombs Street LLC and in order to complete the Development Agreement and other related obligations the City must extend the internal timeframe to allow sufficient time for Coombs Street LLC to complete the work. We estimate the completion of this work will occur in less than 12 months.

Kohl’s and Parking
ZRE previously, and now Coombs Street LLC has been working with Kohl’s on a plan to relocate the use to recently approved Soscol Gateway Plaza. Relocation would require early termination of Kohl’s lease in its current location, an action that is also supported by Coombs Street LLC.

As long as the Kohl’s building is used as a department store (through the year 2031), the City is obligated by License Agreement to provide a designated number of non-exclusive parking spaces for use by the building. If Kohl’s voluntary terminates its lease, the City could negotiate terms by which the City would be relieved of its obligations under the license agreement and essentially “free-up” the surface parking lot for development of the proposed Project.

The specifics about total number of parking spaces to be provided in the future Project have not yet been worked through. Under the terms of the attached draft First Amendment to Purchase and Sale Agreement (“PSA”), the property transfer does not close unless the City and Coombs Street LLC successfully negotiate a Development Agreement which will more particularly define the elements of the proposed Project. The Development Agreement will define Coombs Street LLC’s obligations to address parking in a manner sufficient to mitigate impacts generated by the Project and replace public parking lost at the existing surface parking lot, taking into consideration credit to Coombs Street LLC for existing parking available to the existing uses on the site. It is anticipated that the parking solution for the Project will be a combination of subsurface/structured parking and surface parking.

Purchase and Sale Agreement and First Amendment to the Agreement An appraisal for the Subject Parcel determined the fair market value of $870,000, and that remains the proposed purchase price in the First Amendment to the Purchase and Sale Agreement (“PSA”).

The close of escrow also remains unchanged from the original agreement and is conditioned on CITY OF NAPA Printed on 7/21/2022Page 2 of 4
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EXHIBIT D

File #: 276-2022, Version: 1
The close of escrow also remains unchanged from the original agreement and is conditioned on the execution of the DA and issuance of building permits for the Project, with an outside closing date of December 31, 2035, which if necessary, may be extended by the City Manager for up to two years based on the Developer’s good faith efforts. However, in order to complete the Development Agreement and other related obligations the City must extend the internal timeframe to allow sufficient time for Coombs Street LLC to complete the work which is estimated to occur in less than 12 months.

Staff notes that the Development Agreement will document vested rights for the First Street Napa Plaza II Project and will be processed for approval concurrently with the development application.

Project design, use, intensity, maximum height and floor area, timing of construction, parking quantities and location, compliance with CEQA, and related matters will all be addressed through the DA and entitlement process.

Public Benefits
At this initial stage, the public benefits of the proposed Project are namely replacing a large footprint use in downtown with new residential development, commercial square footage and an upper-scale hotel. The added sales taxes, transient occupancy taxes, improved physical building layout which better connects the existing First Street Napa Plaza, and a better connection with the surface parking and Main Street, are all improvements that will benefit the City in the long term. In addition, adding residential uses in the downtown should have an indirect positive impact on both new and existing retail, food and beverage uses. Finally, as a component of the currently proposed Project, the public spaces provided as part of the future development would support and enhance the currently underutilized public spaces along Napa Creek, Brown Street pedestrian corridor and the 911 Memorial Park.

City Staff recommends that the City Council authorize the City Manager to finalize and execute the proposed First Amendment to the Purchase and Sale Agreement in substantial conformance with the terms summarized in this Staff Report and more particularly described in Attachment 1.

FINANCIAL IMPACTS:

The City will receive approximately $870,000 from the Buyer for the purchase of the property upon close of escrow.

CEQA:

The Community Development Director has determined that the Recommended Action described in this Agenda Report is not in-and-of-itself a “project” (pursuant to CEQA Guidelines Section 15378) since it does not commit the City to a physical change in the environment. However, the Recommended Action is part of a larger “project” that will be subject to environmental review in accordance with CEQA at the “earliest feasible time” prior to “approval” consistent with CEQA Guidelines Sections 15004 and 15352. The larger “project” is the anticipated First Street Napa Plaza II (as described above) on the Subject Parcel, following close of escrow for sale of the property. The environmental review will be completed in accordance with CEQA prior to the City’s approval of the Development Agreement described in this report, and prior to approval of any permits associated with the anticipated renovation.

DOCUMENTS ATTACHED:

ATCH 1 - Resolution
CITY OF NAPA Printed on 7/21/2022Page 3 of 4
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EXHIBIT D

File #: 276-2022, Version: 1

ATCH 2 - Assignment of Purchase and Sale Agreement

ATCH 3 - First Amendment to Purchase and Sale Agreement NOTIFICATION:

Coombs Street LLC was notified of this meeting.

CITY OF NAPA Printed on 7/21/2022Page 4 of 4
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EXHIBIT D

1 California Street - Suite 3050
San Francisco, California 94111 -5432
voice 415.655.8100 - fax 415.655.8099
www.bwslaw.com
Direct No.: 415.655.8114
[email protected]
Los Angeles – Inland Empire – Marin County – Oakland – Orange County – Palm Desert – San Diego – San Francisco – Silicon Valley – Ventura County October 27, 2022
Imaez Wahid
Housing Specialist I, Housing Policy Development
California Department of Housing and Community Development 2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833

VIA EMAIL: [email protected]

Re: Response to Request for Information Regarding Surplus Land Act Exemption: City of Napa Parcels 003-166-008 and 003-166-011
Dear Mr. Wahid:

We are writing on behalf of the City of Napa (“City”) with respect to the City’s planned disposition of real property (Assessor Parcel Numbers 003-166-008 and 003- 166-011, collectively the “Property”) and the City’s determination that the disposition is “exempt surplus land” as provided in Government Code section 54221(f)(1)(G).

Specifically, this letter provides an explanation, supported by legal authority, in response to the California Department of Housing and Community Development’s (“HCD”) request to demonstrate that the License Agreement effective February 1, 2000 between the City and Parkway Plaza Investors (“PPI”) is a valid legal restriction on the City’s use of the Property that is not imposed by the City and that prohibits housing development.

This letter is provided as a supplement to the City’s initial submittal to HCD regarding this Property on July 21, 2022, and the subsequent communications between HCD and the City’s Community Development Director Vin Smith through the date of your most recent email exchange on September 13, 2022.

As explained in detail below, relevant case law and public policy considerations strongly support the conclusion that the City’s planned Property disposition is exempt from Government Code sections 54220 through 54234 (the “Surplus Land Act”).1

1 The City agrees with HCD’s September 6, 2022 conclusion that § 54234 is not applicable, so this matter will not be discussed further.

EXHIBIT D

Imaez Wahid
October 27, 2022

I. The City Acquired the Property to Provide Parking and Has Been Subject to Long-Standing Requirements Requiring the Same.

Between 1971 and 1973, the City of Napa assembled various properties in the downtown Napa area into one 0.75-acre parcel, which is now the Property that is the subject of the proposed disposition. As explained in the Final LRPMP (Attachment A to this Letter), this assembly occurred as part of the former redevelopment agency’s program to create a viable and competitive shopping district. (Final LRPMP, p. 1.) In 2000, as part of a continued effort to revitalize the area, the City and PPI entered into a License Agreement effective February 1, 2000 (the “License Agreement,” included as Attachment B to this Letter).

The City entered into the License Agreement for PPI’s benefit to support its effort to retain a major retailer in downtown Napa. (License Agreement, Recital E.) PPI owned the approximately 2-acre parcel adjacent to the Property, which was the site of a Mervyn’s. (License Agreement, Recital A.) Mervyn’s expressed that it would not renew its lease in 2003 unless PPI secured parking for its customers to use, so the City agreed to accept restrictions on the Property in order to prevent the loss of an anchor tenant and incentivize more investment in its Downtown Business District. (License Agreement, Recitals C-E.) These restrictions require the Property to be used as parking. (License Agreement, Recital D.) In the time since the License Agreement was executed in 2000, Kohl’s replaced the former Mervyn’s, and PPI sold its parcel and validly assigned its rights under the License Agreement. The current property owner and License Agreement beneficiary is Coombs, LLC.

Under the terms of the parking License Agreement, the City must provide parking spaces on the Property for the nonexclusive use of the Kohl’s customers until 2031. (License Agreement §§ 1.1, 4.) Further, the City is prohibited from “authoriz[ing] the construction of buildings
or structure[s] on the surface parking area.” (License
Agreement § 3.) The City may not voluntarily withdraw from the agreement without Coombs’s consent (License Agreement § 4) and the agreement is binding on any future owner of the Property. (License Agreement § 16.) Accordingly, the City and any future owner of the Property would be prohibited from building housing on the Property until at least 2031 unless Coombs terminates the License Agreement.

The City and Coombs’s predecessor-in-interest reached an agreement, memorialized in a Purchase and Sale Agreement (“PSA”) (Attachment C to this letter), to transfer the Property. The City Council approved an assignment of the PSA to Coombs and adopted a Resolution declaring the Property to be exempt surplus land and setting forth its reasons for that conclusion. (Attachment D to this letter.) Under the

EXHIBIT D

Imaez Wahid
October 27, 2022

PSA, Coombs would combine its own approximately 2-acre parcel with the City’s 0.75- acre parcel to construct a mixed-use development with 270 residential units, 210 hotel rooms, and 35,000 square feet of retail. In order to achieve this goal, Coombs would relocate its tenant (Kohl’s), terminate the City’s parking license commitment, and purchase the Property. The parties currently contemplate providing 15% of the newly- constructed housing units as affordable to lower- and moderate-income households.

Ultimately, the PSA and associated agreements would allow for much-needed housing to be built on the Property, but only if the City is able to sell the Property to Coombs for development.

II. The Property is Exempt Surplus Land Under Gov. Code § 54221(f)(1)(G).

Government Code § 54221(f)(1)(G) states, “[exempt surplus land includes] surplus land that is subject to valid legal restrictions that are not imposed by the local agency and that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. . .” (Gov. Code § 54221(f)(1)(G).) Broken down, there are four elements that must be satisfied for land to be deemed exempt surplus land under this provision: (1) the land is subject to a valid legal restriction; (2) the legal restriction prohibits the construction of housing on the land; (3) the legal restriction is not imposed by the local government; and (4) there is no feasible method to mitigate or avoid the prohibition on the construction of housing on the land. Because the Property in question satisfies all four of these elements, the City properly concluded that the Property is “exempt surplus land.” A. The Parking License Agreement Is a Valid Legal Restriction.

Nothing in the text of the Surplus Land Act nor in HCD’s interpretive guidance defines “valid legal restriction.” The plain meaning of these words suggest that any legally enforceable restriction that is validly formed and enforceable is a “valid legal restriction.”
A reviewing court would treat a license agreement involving land, such as the License Agreement at issue here, as a contract and interpret the agreement using contract rules. (California Easements and Boundaries: Law and Litigation (Cal CEB 2022) § 8.58(E).) Accordingly, any license agreement is valid as long as it complies with all the standard contract formation requirements, which are a valid offer and acceptance, adequate consideration, legal capacity of the parties, and legality of the contract. (California Law of Contracts (Cal CEB 2022) Ch. 2-4.)

EXHIBIT D

Imaez Wahid
October 27, 2022

Here, the License Agreement was entered into by authorized representatives of the City of Napa and the then-owner of Coombs’s parcel and memorialized in a clearly- written document. There is no evidence of any formation defect, such as a lack of mutual assent, consideration, illegality, or the like.

The language of the License Agreement can be read as creating either a license agreement or an easement. (Medical Operations Management, Inc. v. National Health Laboratories, Inc. (1986) 176 Cal.App.3d 886, 893 [holding that the precise meaning and effect of any contract depends upon the parties' expressed intent].) Although a lease and an easement grant different rights and obligations; here the interpretation does not affect the conclusion that regardless of whether it is treated as a license or an easement, the License Agreement is a valid legal restriction.

1. The License Agreement is Irrevocable and Enforceable Against Future Owners.

A license is a personal privilege, conferred by an owner of property by written or oral agreement, which allows a licensee to perform certain acts on the property. (Jenson v. Kenneth I. Mullen Inc. (1989) 211 Cal.App.3d 653, 657.) Unlike an easement, a license does not confer any interest in the land. (Id.) The characteristic which most clearly distinguishes a license from an easement is that a license is generally revocable at any time at the will of the licensor. (Kaler v. Brown (1951) 101 Cal.App.2d 716, 719.) However, a license may be made irrevocable by the terms of the parties’ agreement. (See, e.g., Golden W. Baseball Co. v. City of Anaheim (1994) 25 CA4th 11, 36 [sports team’s license to use city’s parking lot was made irrevocable for the term of the agreement].)
Here, the License Agreement identifies itself as a written agreement that gives Coombs the privilege of allowing its tenant’s customers to enter and use the City’s Property for parking. (License Agreement § 1.1.) It also provides an irrevocable grant, which means that the License Agreement’s terms bind not only the City, but any future owner of the Property, through 2031;
it is “binding upon and shall inure to the benefit of
the successors and permitted assigns of the parties of this agreement.” (License Agreement § 16.) For this reason, Coombs receives the benefits of the agreement because it is PPI’s successor. For the same reason, any party buying the Parcel from the City would be burdened by the restrictions imposed by the License Agreement, which means that the City cannot transfer the Property for purposes other than parking without consent from Coombs.

EXHIBIT D

Imaez Wahid
October 27, 2022

Accordingly, based on its own terms, the License Agreement is a valid legal restriction which binds the City and any future owner of the Parcel to its terms until 2031.

2. The License Agreement may be Enforced as an Easement.

The License Agreement may also be treated as an easement. Like a license, an easement creates a right to enter and use land possessed by someone else in a way that would otherwise constitute a trespass. (California Easements and Boundaries: Law and Litigation §1.3(1).) An easement is usually created by a deed, but it may be created by contract even though it does not contain formal words of conveyance and has not been recorded. (Golden W. Baseball Co., 25 Cal.App.4th at 35.) And while traditionally granted in perpetuity, an easement may be granted only for a fixed period. (Darr v. Lone Star Industries, Inc. (1979) 94 Cal.App.3d 895, 900.) Properly executed easements are unquestionably valid legal restrictions.

Given that the License Agreement demonstrates these characteristics, it could be interpreted as an easement, despite the fact that it is identified as a License Agreement.

In Golden W. Baseball Co., the court found that an agreement in which the City of Anaheim granted a baseball team use of stadium parking facilities, guaranteed the provision of a specified number of parking spaces, and retained the right to reconfigure parking could be treated as an easement. (25 Cal.App.4th at 31-32.) Likewise, the License Agreement grants Coombs the right to allow customers to use the parking lot, requires the city to provide 317 parking spaces, and allows the City to reconfigure the parking lot according to specified rules. (License Agreement §§ 1.1.) It is of no consequence that the easement was created through a contract rather than a deed; easements can be created by contract. (Darr v. Lone Star Industries, Inc. (1979) 94 Cal.App.3d 895, 900.) And because an easement can be granted in perpetuity or for a fixed period, it is perfectly valid that the easement ends in 2031. Thus, even though the document is titled “license agreement,” it could be understood and treated as an easement.

The fact that the License Agreement can be interpreted as an easement or a license reinforces the conclusion that regardless of how it is interpreted, the License Agreement is a valid legal restriction enforceable by Coombs against the City and any future Property owner.

EXHIBIT D

Imaez Wahid
October 27, 2022

B. The Parking License Agreement Prohibits the Construction of Housing on the Property.

The License Agreement gives Coombs the right to require the City and any future owner of the Property to provide parking to its customers, thus preventing the construction of housing on the Property.

Here, the plain terms of the License Agreement prevent the City of Napa and any future owner from constructing housing on the Property until at least 2031. Under the terms of the agreement, the owner of the Parcel must provide at least 317 parking spaces for Coombs’s tenant’s customers to use, all of which are currently surface parking. (License Agreement § 1.1(a).) If the City or any future owner of the Property attempted to interfere with the Parking area by, for example, building housing, Coombs could bring an action to enforce its rights to continued parking access, effectively preventing the construction of housing on the Property.

C. The City is Not Imposing the Prohibition on Housing.

The restriction on housing development on the Property is imposed upon, not by the City of Napa. In order for land to be exempt from the requirements of the Surplus Land Act under Gov. Code § 54221(f)(1)(G), any restriction on the construction of housing must not be imposed by the City itself. While there is no case law examining what it means for a restriction to be imposed by an entity versus upon an entity, the statute’s plain meaning is instructive. A legal restriction is imposed by an entity when that entity has the power to enforce and remove the restriction. As an example, the text of the Surplus Land Act says that a “nonresidential land use designation [. . .] is not a legal restriction that would make housing prohibited for purposes of [this Surplus Land Act exemption]” because” a local government has “authority [. . .] to approve land use, zoning, or entitlement decisions.” (Gov. Code § 54221(f)(1)(G).) Likewise, legal restrictions contained in restrictive covenants and easements are imposed by the beneficiary of the restrictive covenant or owner of the easement because those parties can enforce their rights against the servient property owner, and the holder of the right alone has the power to relieve the servient property owners from the restrictions against them.

On the flip side, a legal restriction is imposed upon a party when the restriction may be enforced against that party and the party has no power to unilaterally remove the restriction. In the aforementioned example, restrictions contained in a restrictive covenant or easement are imposed upon the servient property owner because the

EXHIBIT D

Imaez Wahid
October 27, 2022

restrictions may be enforced against the servient property owner, who has no power to unilaterally remove those restrictions.

Here, the restrictions preventing the development of housing on the Property are imposed upon the City of Napa, not by it. Unlike zoning rules or development codes, this restriction does not originate from the City itself, and the City has no power to enforce or revoke it. Instead, the restriction preventing the City and future owners of the Property from developing housing is enforced by Coombs, and only Coombs has the power to revoke the restriction. (License Agreement, §§ 3, 16.) This means that the restriction is imposed by Coombs. Conversely, the prohibition against building housing on the Property can be enforced against the City, which has no power to terminate this restriction, demonstrating that the restriction is imposed upon the City. Accordingly, the prohibition on the construction of housing on the Property is not imposed by, but rather upon the City of Napa.

D. There Is No Feasible Method to Avoid the License Agreement’s Prohibition on Housing.

The City has no way to avoid the prohibition on housing through legislation or contractual avoidance, or any other means. When a restriction on housing is imposed by a local zoning code, a municipality can simply repeal the restriction through a zoning amendment. Here, however, the restriction on housing is imposed upon the City and future owners of the Property by the License Agreement, and the City cannot take unilateral action to remove the restriction. The only way to remove the restriction would be to get Coombs to agree to remove it, which Coombs has agreed to do only if the City sells Coombs the Property.

While the License Agreement at Section 1.1(c) does include a very limited carve-
out for the City to remove “Surface Parking” if it is replaced by at least twice the number of “Interior Parking” stalls, there is no available property within the “Licensed Parking Areas” (as defined by License Agreement Section 1.1(a) to provide the replacement parking.

Because the prohibition on the construction of housing originates from the License Agreement, the City could avoid the restriction if the contract were void or voidable. However, there is no indication that there is any defect in the License Agreement which would give the City this option.

Accordingly, there is no feasible method for the City to avoid the prohibition on housing imposed by the License Agreement.

EXHIBIT D

Imaez Wahid
October 27, 2022

III. Treating the Property as Exempt Surplus Land Furthers the Goals of the Surplus Land Act
A finding by HCD that the Property is exempt surplus land would advance the goals of the Surplus Land Act. In enacting the Surplus Land Act, the California Legislature acknowledged the urgent need for housing statewide and mandated that surplus government land, prior to disposition, should be made available for that purpose. (Gov. Code § 54220(a).)
As discussed above,
due to the License Agreement’s restrictions on future
development, if the Property is deemed not exempt from the Surplus Land Act, no housing will be built on the site for at least nine years, because Coombs would not terminate the rights it holds under the License Agreement.

However, if the City sells the
Property to Coombs, Coombs will terminate the License Agreement to develop a mixed- use project with 270 residential units, 15 percent of which will be affordable to lower- and moderate-income households. This development could be completed within a few years, providing a significant amount of much-needed housing as soon as possible.

Accordingly, finding the Property exempt from the requirements of the Surplus Land Act to facilitate the transfer to Coombs advances
the Surplus Land Act’s goal of providing
housing.

We also observe that HCD need not worry that confirming the City’s proper reliance on a Surplus Land Act exemption here would provide a way to evade the Act’s requirements in the future by entering into restrictions for an adjacent property owner’s benefit immediately before transferring property to that owner. However, a restriction executed for the purposes of evading the Surplus Land Act arguably would not be valid and thus could not give rise to the exemption. By contrast, the License Agreement here was entered into in 2000, nineteen years before the Surplus Land Act’s current requirements were enacted. There is no way the City of Napa could have known about the requirements that Act would later impose, and thus no way that the City could have entered into the License Agreement in an attempt to circumvent those requirements.

Moreover, the well-documented history of the creation of the License Agreement shows that its purpose was to revitalize the downtown area and never contemplated a sale of the City land in the first place. Therefore, the License Agreement was not executed to evade the Surplus Land Act’s requirements, and the exemption based on the License Agreement’s restrictions remains valid.

EXHIBIT D

Imaez Wahid
October 27, 2022

IV. Conclusion
As discussed above, the Property is exempt surplus land under Gov. Code § 54221(f)(1)(G) because it is subject to a valid legal restriction which makes housing prohibited on the site, the restriction is not imposed by the City of Napa or any other government agency, and there is no way that the City can feasibly avoid or mitigate the restriction. While it is usually the case that applying the requirements of the Surplus Land Act to a sale of government-owned land encourages the development of housing, here this goal would actually be inhibited were the sale subject to the Surplus Land Act.

A finding of exemption, however, would allow housing to be developed as soon as possible, furthering the goals of the Surplus Land Act.

We thank you for the opportunity to further explain the basis for the City’s conclusion, and appreciate your consideration of this analysis. We are happy to discuss this matter with you at any time, and encourage you to reach out should you have questions or require further information about the Property or the transaction.

Very truly yours,
Eric S. Phillips

cc: Gustavo Velasquez, Director, California Department of Housing and Community Deve
lopment
Vin Smith, Community Development Director, City of Napa Michael Barrett, City Attorney, City of Napa

EXHIBIT D

1 California Street - Suite 3050
San Francisco, California 94111 -5432
voice 415.655.8100 - fax 415.655.8099
www.bwslaw.com
Direct No.: 415.655.8114
[email protected]
Los Angeles – Inland Empire – Marin County – Oakland – Orange County – Palm Desert – San Diego – San Francisco – Silicon Valley – Ventura County

Attachment A
Napa Final LRPMP

EXHIBIT D

3A. Lot G (continued)
Address 1142 Coombs Street
Assessor Parcel Number(s) 003-166-008 & -011
Current Use Public parking surface lot
Lot Size 003-166-008: 0.04 acre; 1,742 sq. ft.
003-166-011: 0.70 acres; 30,492 sq. ft.

Building Area N/A
Year Built N/A
Zoning Downtown Mixed Use
History of Environmental Contamination None known
Acquisition, Valuation and Re-use Information
Date property was acquired by NCRA 1971-73
At time of purchase parcel numbers / sizes were:

APN 165-01: 10,500 sq. ft.

APN 165-02: 2,600 sq. ft.

APN 165-03: 12,250 sq. ft.

APN 167-4: western portion of parcel +/_6,884 sq. ft.

Value at the time of acquisition $333,777 purchase price Purpose of acquisition These properties, directly north of the then-new Mervyns’s department store, were assembled as part of the redevelopment agency’s urban renewal program to create a viable and competitive shopping district.

Properties provided temporary and later permanent surface parking for downtown customers.

Source of funds / restrictions Acquisition: HUD Neighborhood Development Program funds. The funding close-out agreement states “Proceeds from the sale of the remaining undisposed property acquired by the Agency, as identified in the Closeout Agreement, shall be treated as program income to the City of Napa Community Development Block Grant Program under the provisions of 24 CFR 570.506.”

Construction: NCRA tax increment funds or federal Community Development Block Grant funds; if federal, there may be restrictions

Operations & Maintenance: O&M is performed by the City of Napa and is partially funded by a Property & Business Improvement Area Benefit Zone, where businesses located in the zone pay a surcharge on their business license renewal fee.

EXHIBIT D

3A. Lot G (continued)
Current estimated value See Attachment 2.

Lease, rental, or other revenues and
contractual requirements for disposition
of funds
This parcel is encumbered by a License Agreement with Cole MT Napa, the owner of property leased by Kohl’s Department Store and smaller retail tenants. There is no fee charged for the license and no other revenue generated by this parking facility.

Potential for transit oriented
development
No – not in proximity to rail line; no commuter rail in Napa.

Potential for Successor Agency planning
objectives
The City is planning to expand this surface parking lot to incorporate additional public parking at the northern edge of the property that was previously a bus transfer station (recently relocated). The above-ground transit improvements must first be demolished (ticket booth, benches and canopies, etc.).

Previous development proposals N/A
Proposed Use or Disposition of Property and Explanation Transfer to City of Napa for Retention for Continued Governmental Purpose:

This public parking lot provides 52 public parking spaces for downtown business, employees, and customers. The lot is subject to a non -exclusive license agreement with Cole MT Napa, owner of property leased by Kohl’s Department store and surrounding smaller retail storefronts. The License provides a non-exclusive guarantee of a minimum of 317 public parking spaces in lots G, G East, and H and in the Pearl Street Garage. The License remains in effect as long as the department store lease is in place (through July 31, 2016 plus three 5-year renewal options).

A requirement of the license agreement is for City or former redevelopment agency to remove the vacated bus transfer station adjacent to this parking lot and expand the lot to add new parking spaces (area outlined in red below); with the dissolut ion of the redevelopment agency, the vacant station remains, causing an eyesore and attractive nuisance. The Successor Agency hopes to utilize bond funds to pay for the necessary improvements.

EXHIBIT D

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EXHIBIT D

Successor Agency to the Napa Community Redevelopment Agency

LONG RANGE PROPERTY MANAGEMENT PLAN

3B. Lot G East / Lot H / Creekside Linear Park

Lot G East, left (looking southwest) and Lot H, right (looking southwest):
located on same parcel with creek and park running between them

EXHIBIT D

1 California Street - Suite 3050
San Francisco, California 94111 -5432
voice 415.655.8100 - fax 415.655.8099
www.bwslaw.com
Direct No.: 415.655.8114
[email protected]
Los Angeles – Inland Empire – Marin County – Oakland – Orange County – Palm Desert – San Diego – San Francisco – Silicon Valley – Ventura County

Attachment B
PPI License Agreement

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1 California Street - Suite 3050
San Francisco, California 94111 -5432
voice 415.655.8100 - fax 415.655.8099
www.bwslaw.com
Direct No.: 415.655.8114
[email protected]
Los Angeles – Inland Empire – Marin County – Oakland – Orange County – Palm Desert – San Diego – San Francisco – Silicon Valley – Ventura County

Attachment C
Purchase and Sale Agreement Between City of Napa and Coombs, LLC

EXHIBIT D

CityofNapaC'26'^C' -|

AGREEMENT OF PURCHASE AND SALE

AND JOINT ESCROW INSTRUCTIONS
1051 -1199 Pearl St.

APN 003-166-008 & 003-166-011
Napa, California
Joint Escrow
of ^\\\^\
,LLC,a*C^
3i
Instructions
_, 2020, is
This Agreement of Purchase and Sale and
("Agreement"), dated for reference purposes only as
entered into by and between NAPA PARKWAY PLAZA, LLC, a C&lifornia limited liability company ("Buyer"), and the CITY OF NAPA, a California charter city ("Seller"). Buyer and Seller are sometimes referred to individually herein as a "Party" and collectively as the "Parties."
v
Recitals
A. Seller is the owner of that certain real property consisting of approximately

0.75 acres located at 1051 - 1199 Pearl St., Napa, CA 94559 in the County of Napa, State of California, and designated as Assessor's Parcel Nos. 003-166-008 & 003-166- 011 as more particularly described on Exhibit A attached hereto ("Property"). The Property is currently improved with a 52-stall surface public parking lot and the former public transportation bus depot (the "Improvements").

B. Buyer is the owner certain real property that includes 1116 1st Street, Napa, California 94559 ("Kohl's Parcel"). Buyer's tenant, Kohl's Department Stores, Inc. ("Tenant"), has a lease that allows Tenant to occupy the Kohl's Parcel until the year 2041. Tenant has informed Buyer that Tenant is investigating a relocation of its store to a new site within the City of Napa outside of the downtown core area and if Tenant is able to find a suitable location Tenant is willing to negotiate with Buyer a termination of said lease. Subject to Tenant's relocation from the Kohl's Parcel, Buyer desires to demolish the existing Improvements on the Kohl's Parcel and develop said parcel with a mixed-use project consisting of rental housing, retail and an upper upscale hotel project as more particularly described in Exhibit B ("First Street Napa Phase II Project" or "Project"), which is proposed to be further defined in a Development Agreement as provided in Section 8(a)(vii) below.

C. Buyer also desires to purchase the Property for the purpose of assembling such Property with the Kohl's Parcel to make a more efficient and orderly project site, to better activate the downtown area, and to promote retailing and other compatible uses in the downtown area. As part of the Project, Seller would be relieved of certain parking obligations contained in the License Agreement dated February 1, 2000, City Agreement 7583 ("Kohl's Parking Obligation").

D. Buyer acknowledges that Seller is considering entering into this Agreement at a point in time when the Project's design issues have not been vetted by the City Council of the City of Napa, or subordinate City commissions (such as the Planning Commission); and required land use approvals from the City and other governmental agencies (if any), which are subject to environmental review in accordance with the OAK #4826-2912-5042 v71

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California Environmental Quality Act (California Public Resources Code §§21000 et. se<7. and State CEQA Guidelines, California Code of Regulations Title 14 §§15000 et. seq.) ("CEQA"), have not been secured. Accordingly, until such design issues have been publicly reviewed and approved and the land use approvals secured, Seller shall have the unfettered discretion to approve said matters, and if not approved by Seller, to terminate this Agreement and return the Deposit to Buyer without any further liability to Buyer. As a result, any sums spent by Buyer shall be at its risk and without recourse to Seller.

E. City has determined that the purchase and sale transaction contemplated by this Agreement is exempt from the requirements of the State Surplus Lands Act (California Government Code section 54220 et seq.) because the Property is subject to valid legal restrictions to satisfy the Kohl's Parking Obligation (as provided in Government Code section 54221 (f)(1)(G).

F. Buyer desires to purchase the Property from Seller and Seller desires to sell the Property to Buyer upon and subject to the terms, conditions and provisions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, the parties agree as follows:

Agreement

1. Purchase and Sale. Seller shall sell and convey to Buyer, and Buyer shall purchase from Seller, the Property on the terms and subject to the conditions set forth in this Agreement. For purposes of this Agreement, the date on which Escrow Holder acknowledges in writing receiving a fully executed copy of this Agreement shall be hereinafter referred to as the "Effective Date." The Property shall include the Improvements, together with all rights and appurtenances pertaining thereto, including any right, title and interest of Seller in and to adjacent roads, streets, alleys, easements or rights-of-way, as well as all, equipment, machinery, utility systems and lines, other built-in or attached elements, and other rights-of-way or other appurtenances of any nature whatsoever, whether or not of record, in any way now or hereafter belonging, relating or pertaining to the land and the improvements.

2. be
Purchase Price.The purchase price ("Purchase Price") for the Property shall be the amount of Eight Hundred Seventy Thousand and 00/100 Dollars ($870,000.00), subject to periodic increase as follows: The Purchase Price shall be increased commencing on August 1 , 2026, and each August 1 thereafter (each a "CPI Adjustment Date") by an amount equal to the product of (i) the Purchase Price in effect for the period immediately preceding the applicable CPI Adjustment Date multiplied by (ii) the percentage increase in the Consumer Price Index measured from the measuring month 15 months preceding the CPI Adjustment Date to the measuring month three months preceding the CPI Adjustment Date (each a "CPI Adjustment"). As used herein "Consumer Price Index" or "CPI" means the United States Department of Labor's Bureau of Labor Statistics Consumer Price Index, All Urban Consumers, All OAK #4826-2912-5042 v72

EXHIBIT D

Items, San Francisco-Oakland-Hayward, California (1982-1984 equals 100), or the successor of such index, as reasonably determined by Seller.. Buyer has the right to independently verify the square footage of the Property, and agrees that if the square footage varies from that recited in this Agreement or in any materials provided by Seller or any representative of Seller, such variation shall have no effect on the Purchase Price.

3. Payment of Purchase Price. The Purchase Price shall be payable by Buyer to Seller as follows:
(a) Deposit. Prior to the end of the Contingency Period (as defined in Section 8(a)(ii), below), Buyer shall deposit with Placer Title Company of Napa, 5 Financial Plaza, #205, Napa, CA 94558 ("Escrow Holder"), Fifty Thousand and 00/100 Dollars ($50,000.00) in cash or other immediately available funds ("Deposit"). The Deposit shall be invested by Escrow Holder with a financial institution acceptable to Buyer in a federally-insured interest-bearing demand account and the Deposit and all interest accrued thereon shall be credited to the Purchase Price upon the Close of Escrow (as defined in Section 4(b), below). The Deposit shall be released to Seller, and except for a default by Seller the Deposit shall become nonrefundable to Buyer on the later of (i) the date the proposed Development Agreement (defined in Section 8(a)(vii)) becomes Final (as defined below) or (ii) 30 days following the date Tenant voluntarily relocates from the Kohl's Parcel (as described in Section 8(b)(ix)) (the "Deposit Release Date"). As used herein the term "Final" means the date on which (1) all applicable appeal periods for the filing of any administrative appeal or litigation challenging the approval or effectiveness of the Development Agreement and the City's related CEQA determinations shall have expired and no such appeal shall have been filed; (2) in the event of any administrative appeal or litigation challenge challenging one or more of such approvals, that the administrative appeal or litigation challenge is settled or there is a final determination or judgment upholding the approval(s), and the administrative appeal or litigation challenge is no longer subject to appeal; and (3) in the event of a timely referendum petition certified by the elections official as compliant with the Elections Code, a majority of voters voting on the Development Agreement vote in favor of it and the election results are certified in accordance with the Elections Code (collectively, (1) (2) and (3) are referred to as "Appeals"). If the proposed Development Agreement does not become Final by December 31, 2022, as such date may be extended as provided below (the "Outside Deposit Release Date"), this Agreement shall terminate, the Deposit, less costs of cancelling Escrow, shall be refunded to Buyer and, except as otherwise provided in this Agreement, Seller and Buyer will have no further obligations or rights to one another under this Agreement. The City Manager may grant one or more extensions of the initial outside date for Deposit Release totaling no more than 24 months (i.e. to no later than December 31, 2024), provided (i) Buyer requests such extension in writing prior to expiration of the then Outside Deposit Release Date, and (ii) the City Manager determines in his or her sole absolute discretion that the Buyer is making diligent and good faith efforts to satisfy the conditions of the Deposit Release.

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(b) Balance of Purchase Price. On or before the Close of Escrow, Buyer shall deposit with Escrow Holder the balance of the Purchase Price, in immediately available funds, which shall be paid to Seller at Close of Escrow.

4. Escrow.
(a) Opening of Escrow. Within three (3) business days after Effective Date, Buyer shall open escrow ("Escrow") with Escrow Holder. Buyer and Seller agree to execute and deliver to Escrow Holder, in a timely manner, such supplemental escrow instructions as are reasonably necessary to consummate the transaction contemplated by this Agreement. Any such supplemental instructions shall not conflict with, amend or supersede any portion of this Agreement. If there is any inconsistency between such supplemental instructions and this Agreement, this Agreement shall control. Escrow Holder shall, upon receipt of a fully executed copy of this Agreement, sign and date the Receipt by Escrow Holder attached hereto, and distribute it to all parties listed in the "Notices" section of the Agreement.
(b) Close of Escrow. The Escrow for conveyance of the Property shall close ("Close of Escrow") within thirty (30) days after the satisfaction, or waiver by the appropriate Party, of all of the Buyer Conditions Precedent (defined in Section 8(a)) and all of the Seller Conditions Precedent (defined in Section 8(b)), which shall occur prior to the Outside Date. The "Outside Date" shall be the earlier of (a) the date that is ten (10) days after the date on which Buyer obtains a grading or other building permit for the First Street Napa Phase II Project, or (b) December 31, 2035, except that the City Manager, may grant one or more extensions to such date (extending the Outside Date to no later than December 31, 2037), if: (i) requested in writing by Buyer prior to expiration of the then Outside Date, and (ii) the City Manager determines in his or her sole discretion that the Buyer is making diligent and good faith efforts to satisfy all Seller Conditions Precedent. If Closing does not occur on or before the Outside Date as it may be extended as provided above, then this Agreement shall automatically terminate and, except as otherwise provided in this Agreement, Seller and Buyer will have no further obligations or rights to one another under this Agreement. For purposes of this Agreement, "Closing" shall mean the time and day the Grant Deed is recorded with the Napa County Recorder.

5. Conditions of Title. The Property shall be conveyed to Buyer by Seller by a grant deed, substantially in the form attached hereto as Exhibit C ("Grant Deed"), subject only to (a) liens to secure payment of current, unpaid real estate taxes and assessments; (b) such title matters (other than liens to secure payment of real estate taxes and assessments, including supplemental taxes) affecting the Property created by or with the written consent of Buyer; (c) all applicable laws, ordinances, rules and governmental regulations (including, but not limited to, those relative to building, zoning and land use) affecting the development, use, occupancy or enjoyment of the Property; (d) all matters which would be apparent from an inspection of the Property; (e) all matters which would be disclosed by a survey of the Property; and (f) exceptions which are approved and/or accepted by Buyer in accordance with Section 8(a)(i) of this Agreement (collectively, "Approved Conditions of Title").

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6. Title Policy. Title shall be evidenced by Escrow Holder's title insurance underwriter ("Title Company") issuing its American Land Title Association ("ALTA") Extended Coverage Owner's Policy of Title Insurance) to Buyer in an amount equal to the Purchase Price, showing title to the Property vested in Buyer, subject only to the Approved Conditions of Title ("Title Policy"). Buyer shall pay all expenses of issuing the Title Policy, including any survey costs associated with and any endorsements to such Title Policy.

7. Milestones; Recordable Agreements. In addition to or part of the Development Agreement requirements contained in Sections 8(a)(vii) and 8(b)(v) herein, prior to consideration of any Development Agreement for approval the parties shall have agreed to a list of appropriate milestones (and corresponding deadlines) for, among other things, Buyer's preparation of and submittal to Seller of (i) a more precise Project description; (ii) concept plans and designs for Project including site plan, elevations of all four sides; tabulation of areas and uses; plans to develop parking improvements sufficient to serve the Project's parking demand and maintain sufficient public parking in the area to relieve Seller of the Kohl's Parking Obligation (such parking plans are referred to as the "Parking Concept"); (iii) financing plan setting forth the terms under which equity and debt will be structured to fund construction of the Project; (iv) the Tenant relocation waiver and release; (v) submittal of applications for key Project entitlements associated with the Development Agreement, including the tentative map, zoning change and design review permits; (vi) a hotel flag operating agreement; and (vii) proposed forms of recordable agreements memorializing Buyer's and its successors' ongoing obligations with respect to provision of affordable rental housing,, continued operation of a hotel meeting an upper upscale or better hotel STR (or comparable rating service) rating; and required maintenance, access and other operational requirements ("Recordable Agreements") (collectively, "Buyer's Milestones").

8. Conditions to Close of Escrow.
(a) Buyer Conditions Precedent. The Close of Escrow and Buyer's obligation to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions (or Buyer's waiver in writing thereof) for Buyer's benefit on or prior to the dates designated herein below for the satisfaction of each such condition or in the event there is no date designated below the condition shall be satisfied (or Buyer's waiver in writing thereof) prior the Close of Escrow (collectively, the "Buyer Conditions Precedent"):
(i) Title. Pursuant to the terms and conditions of this subsection, Buyer shall have the right to approve any and all matters of and exceptions to title of the Property, as disclosed by the following documents and instruments (collectively, "Title Documents"): (A) a Preliminary Report issued by Escrow Holder with respect to the Property; and (B) legible copies of all documents, whether recorded or unrecorded, referred to in such Preliminary Report. Seller shall cause Escrow Holder to deliver the Title Documents to Buyer within five calendar days following the Effective Date. Buyer shall have until 5:00 PM (local time) on the date that is 45 calendar days following the OAK #4826-2912-5042 v75

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Effective Date ("Title Review Period") to give Seller and Escrow Holder written notice ("Buyer's Title Notice") of Buyer's approval or disapproval of the Title Documents, except that the City Manager may grant extensions to the Title Review Period, if: (i) requested in writing by Buyer prior to the end of the Title Review Period, and (ii) the City Manager determines that the Buyer is making diligent and good faith efforts to complete the title review. The failure of Buyer to give Buyer's Title Notice to Seller within the specified time period shall be deemed Buyer's disapproval of the Title Documents.

Seller shall give Buyer written notice ("Seller's Title Notice") of those disapproved title matters, if any, which Seller is unwilling or unable to have eliminated from title to the Property by the Close of Escrow within ten business days after Buyer's Title Notice is received by Seller, if Buyer's Title Notice provides a disapproval, or Buyer is deemed to have disapproved, of any matter of title shown in the Title Documents. Seller's failure to provide Seller's Title Notice within said ten business day period shall be deemed Seller's election not to remove any of the disapproved exceptions in Buyer's Title Notice. Notwithstanding the foregoing, Seller shall, at Seller's sole cost and expense, remove as exceptions to title to the Property, as of the Close of Escrow, all mortgages and deeds of trust, if any, under which Seller is the mortgagor, trustor or borrower that are currently recorded against the Property, and Seller's failure to do shall constitute a default hereunder.

If Seller is unable or unwilling to remove all of the title matters objected to by Buyer in Buyer's Title Notice, or fails to deliver Seller's Title Notice, Buyer shall have five business days from receipt of Seller's Title Notice, or expiration of the time period within which Seller is to respond, to notify Seller in writing that either (1) Buyer is willing to purchase the Property, subject to such disapproved exceptions, or (2) Buyer elects to terminate this Agreement. Failure of Buyer to take either one of the actions described in clause (1) or (2) in the previous sentence shall be deemed to be Buyer's election to take the action described in clause (2). If this Agreement is terminated pursuant to this Section 8(a)(i), the Deposit, including all accrued interest, shall be returned to Buyer (provided that Buyer has complied with the terms of Section 26(n) below), and, except as otherwise provided in this Agreement, Seller and Buyer will have no further obligations or rights to one another under this Agreement; (ii) Inspections and Studies/Costs. During the Contingency Period (defined below), Buyer and Buyer's employees, agents, contractors, subcontractors and consultants (collectively, "Buyer's Representatives") shall have the right to enter upon the Property and conduct any and all non-destructive inspections, investigations, tests and studies (including, without limitation, investigations with regard to zoning, building codes and other governmental regulations, architectural inspections, engineering tests, economic feasibility studies and soils, seismic and geologic reports and environmental testing) with respect to the Property as Buyer may elect to make or maintain. Buyer's and Buyer's Representatives entry upon the Property for purposes of conducting any invasive inspections including any Phase 2 environmental site assessment shall be conducted pursuant to a property entry agreement in a form reasonably acceptable to the City Attorney. The cost of any such inspections, tests and/or studies shall be borne by Buyer.

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All such inspections, tests, and/or studies shall be conducted at reasonable times during ordinary business hours upon notice to Seller at least one business day prior to entry and, if applicable, in a manner consistent with any property entry agreement between the Parties. Buyer, in performing its inspections, investigations, tests and studies hereunder shall not unreasonably interfere with the operation of the Property or any tenant or other person or entity with parking rights as to the Property and agrees to coordinate its activities on the Property with Seller in advance to avoid any such interference. Following any such tests or inspections, Buyer agrees to promptly return any portions of the Property damaged or altered by Buyer during such tests or inspections to substantially the same condition which existed prior to such test or inspection.

Buyer shall indemnify, defend and hold Seller harmless from any and all claims, damages or liabilities arising out of or resulting from the entry onto or activities upon the Property by Buyer or Buyer's Representatives or liens arising from such activities. Buyer's obligation to indemnify Seller under the provisions of this Section 8 shall survive any termination of this Agreement, shall survive the Closing and shall not be merged upon delivery and acceptance of the Grant Deed or upon payment of the Purchase Price by Buyer to Seller. Prior to any entry on to the Property by any of Buyer's Representatives, Buyer shall deliver to Seller an endorsement to a commercial general liability insurance policy which evidences that such Buyer's Representative is carrying a commercial general liability insurance policy with a financially responsible insurance company acceptable to Seller, covering the activities of such Buyer's Representative on or upon the Property. Such endorsement shall evidence that such insurance policy shall have a per occurrence limit of at least One Million Dollars ($1,000,000) and an aggregate limit of at least Two Million Dollars ($2,000,000), shall name Seller as an additional insured, and shall be primary and non-contributing with any other insurance, self-insu ranee or joint self-insurance available to Seller.

Prior to 5:00 PM (local time) on the date that is 60 calendar days following the Effective Date ("Contingency Period"), Buyer shall deliver to Seller and Escrow Holder written notice ("Contingency Period Notice") of its approval or disapproval of the Property, except that the City Manager may grant extensions to the Contingency Period, if: (i) requested in writing by Buyer prior to the end of the Contingency Period, and (ii) the City Manager determines that the Buyer is making diligent and good faith efforts to complete the evaluation of underground Hazardous Materials (as defined by Section l4(a)(vi), below). The Contingency Period Notice may, but need not, be combined with the Buyer's Title Notice. The Contingency Period Notice to the Escrow Holder shall be accompanied by the Natural Hazards Disclosure Statement (if not yet signed and returned to Seller). The failure of Buyer to timely deliver the Contingency Period Notice shall be deemed to constitute Buyer's disapproval of the Property, in which case the Deposit, including all accrued interest (less the costs of cancelling Escrow), shall be returned to Buyer (provided that Buyer has complied with the terms of Section 26(n) below), and, except as otherwise provided in this Agreement, Seller and Buyer will have no further obligations or rights to one another under this Agreement. Prior to the expiration of the Contingency Period Buyer may terminate this Agreement at any time for any reason at the sole discretion of Buyer.

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(iii) Title Insurance. As of the Close of Escrow, Title Company shall have committed to issue the Title Policy to Buyer as described in Section 6, above. (iv) Seller's Representations. All representations and warranties made by Seller to Buyer in this Agreement shall be true and correct on the date hereof and shall be true and correct in all material respects as of the Close of Escrow. (v) Natural Hazards Disclosure Statement. No later than ten (10) business days prior to the scheduled expiration of the Contingency Period, Seller shall deliver to Buyer a Natural Hazards Disclosure Statement for the Property. Buyer shall have approved the Natural Hazards Disclosure Statement and returned a signed copy thereof to Seller by the expiration of the Contingency Period. (vi) Seller's ObliQations. As of the Close of Escrow, Seller shall have performed all of the obligations required to be performed by Seller under this Agreement.
(vii) Development Agreement. The Parties shall have approved and executed a Development Agreement pursuant to Government Code section 65865 et seq., with respect to the Property and Kohl's Parcel and the First Street Napa Phase II Project, or portion thereof, in form and substance mutually acceptable to the Parties, each in its sole and absolute discretion, ("Development Agreement") by no later than the date that is twelve months (12) months after the Effective Date ("DA Deadline"), provided that the City Manager may grant one or more extensions extending the DA Deadline to no later than 24 months after the Effective Date (the "Outside DA Deadline") if the City Manager determines in his or her sole absolute discretion that the Parties representatives have made substantial progress towards negotiation and drafting of a Development Agreement in substance and form mutually acceptable to the Parties. The Development Agreement shall address matters including, but not limited to, the following: (a) use, intensity and density, maximum floor area, and maximum height of development on the Property and Kohl's Parcel, including requirements for timing of construction; (b) public benefits, including (i) the Parking Concept, and (ii) the number of units of for-rent affordable and for-rent market rate housing, (iii) the rights of City and the public to have access to use certain portions of the Property and Kohl's Parcel and Project improvements to be available for public use; (c) requirements for timing of construction of the Project; (d) the amount of retail frontage required by the Project entitlements and Downtown Napa Specific Plan Guidelines; (e) a plan for Buyer's participation in the improvement or reuse of Dwight Murray Plaza; (f) parking quantities sufficient to serve the Project's residential, hotel and retail components; (g) vesting periods and impact fees; (h) CEQA compliance; (i) requirements for and forms of Recordable Agreements; and (j) such other matters related to the Property and Kohl's Parcel, and the Project as the Parties may agree, each in its sole and absolute discretion. If the Parties have not executed a Development Agreement in form mutually acceptable to the Parties by the Outside DA Deadline, then this Agreement shall automatically terminate and the Deposit, including all accrued interest, shall be returned to Buyer and, except as otherwise provided herein, neither Party shall have any further rights or obligations hereunder.

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(viii) Seller Approval. Prior to the Close of Escrow, Seller shall have approved Buyer's Parking Concept which shall be sufficient to relieve Seller of the Kohl's Parking Obligation, all at no cost to Seller.
(ix) Other Approvals, Assurances and Permits. Buyer shall have sought and received approvals and assurances from all appropriate governmental entities to develop the Project in the manner anticipated by the Development Agreement, and, subject to payment of the applicable fees, Seller shall be ready to issue all ministerial permit(s) necessary for the Buyer to commence construction of the First Street Napa Phase II Project.
(x) Absence of Proceedings. There shall be an absence of any condemnation, environmental or other pending governmental or any type of administrative or legal proceedings with respect to the Property which would materially and adversely affect Buyer's intended uses of the Property or the value of the Property. (xi) Recordable Agreements. The Parties shall have executed one or more Recordable Agreements described in Section 7 that are otherwise acceptable to each of the Parties in its sole and absolute discretion. (b) Seller Conditions Precedent. The Close of Escrow and Seller's obligation to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions (or, where applicable, Seller's waiver thereof) for Seller's benefit on or prior to the dates designated below for the satisfaction of such conditions (collectively, the "Seller Conditions Precedent"), or the Close of Escrow in absence of a specified date:
(i) Buyer's Obligations. Buyer shall have timely performed all of the obligations required to be performed by Buyer under this Agreement. (ii) Buyer's Representations. All representations and warranties made by Buyer to Seller in this Agreement shall be true and correct on the date hereof and shall be true and correct in all material respects as of the Close of Escrow. (iii) Purchase Price. Buyer shall have timely delivered the Purchase Price and other sums owing under this Agreement in good funds to Escrow hlolder and fully, faithfully and timely performed all of its other obligations under this Agreement.
(iv) Natural Hazards Disclosure Statement. Prior to the end of the Contingency Period, Buyer shall have returned a signed copy of the Natural Hazards Disclosure Statement to the Seller.
(v) Development Agreement. The Parties shall have approved and executed a Development Agreement in form and substance mutually acceptable to the Parties, each in its sole and absolute discretion, as described in Section 8(a)(vii) of this Agreement prior to the Outside DA Deadline. If the Parties have not executed a Development Agreement by the Outside DA Deadline, then this Agreement shall OAK #4826-2912-5042 v79

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automatically terminate and the Deposit, including all accrued interest, shall be returned to Buyer and, except as otherwise provided herein, neither Party shall have any further rights or obligations under this Agreement.
(vi) Seller Approval. Prior to the Close of Escrow, Seller shall have approved Buyer's plans to construct parking improvements sufficient to serve the First Street Napa Phase II Project's parking demand and relieve Seller of the Kohl's Parking Obligation through the relocation of Buyer's Tenant., all at no cost to Seller. (vii) Recordable Agreements and Other Documents. The Parties shall have executed and acknowledged one or more Recordable Agreements described in Section 7 that are otherwise acceptable to each of the Parties in its sole and absolute discretion.
(viii) Other Approvals, Assurances and Permits. (1) Buyer shall have sought and received all discretionary land use entitlements, permits and approvals from all appropriate governmental entities to develop the First Street Napa Phase II Project; (2) Seller as lead agency under CEQA shall have approved an appropriate CEQA document for the proposed Project; and (3) subject to payment of the applicable fees, Seller shall be ready to issue all ministerial permit(s) necessary for the Buyer to commence construction of such Project. The conditions set forth in clauses (1) and (2) of this subsection (viii) may not be waived by Seller.
(ix) Tenant Relocation Waiver. Prior to the Close of Escrow, Tenant (1) shall have relocated to another location or shall have vacated the Property and have declined to relocate, and (2) shall have executed and delivered to Seller a waiver of any and all rights to relocation assistance under applicable State and Federal law including the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC 4601, et seq.) and its regulations (49 CFR Part 24) and the Relocation Assistance Act (Cal. GOV. Code § 7260, et seq.), as may be amended (collectively, "Relocation Laws"), alt in form and substance acceptable to Seller in its sole and absolute discretion. The condition set forth in this subsection (ix) may not be waived by Seller.
(x) Milestones. Prior to the Close of Escrow, Seller shall have approved Buyer's Milestones as required in Section 7 of this Agreement. (c) Failure of Condition to Close of Escrow. If any of the conditions set forth in Section 8(a) or Section 8(b) are not timely satisfied or, where applicable, waived by the appropriate benefited Party for a reason other than the default of Buyer or Seller, this Agreement shall terminate, and except as otherwise provided herein, the Parties shall have no further rights or obligations hereunder.

9. Deposits by Seller. At least one business day prior to the Close of Escrow, Seller shall deposit with Escrow Holder the following documents:
(a) Grant Deed. The Grant Deed, duly executed and acknowledged in recordable form by Seller, conveying fee simple title to the Property to Buyer.

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(b) Recordable Agreements. Counterpart originals of each of the Recordable Agreements duly executed and acknowledged in recordable form by Seller. (c) FIRPTA Certificate. A certification, acceptable to Escrow Holder, duly executed by Seller under penalty of perjury, setting forth Seller's address and federal tax identification number in accordance with and/or for the purpose of complying with the provisions of Sections 7701 and 1445, as may be amended, of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. (d) California Franchise Tax Withholding. A certification, acceptable to Escrow Holder, that Seller is exempt from the withholding provisions of the California Revenue and Taxation Code, as may be amended from time to time, and that neither Buyer nor Escrow Holder is required to withhold any amount from the Purchase Price pursuant to such provisions.

10. Deposits by Buyer. At least one business day prior to the Close of Escrow, Buyer shall deposit or cause to be deposited with Escrow Holder the following funds and documents:
(a) Closing Funds. The balance of the Purchase Price and Buyer's share of closing costs (as adjusted by the Deposit and prorations provided for herein), in cash or other immediately available funds.
(b) Recordable Agreements. Counterpart originals of each of the Recordable Agreements duly executed and acknowledged in recordable form by Buyer.

11. Costs and Expenses. As the Seller is a California municipal corporation, it is a tax-exempt entity and shall not pay the City of Napa Real Property Transfer Tax, any real property or other taxes, or pay any bond or assessment that is a lien customarily paid with real property taxes; provided, however, that Seller shall pay any applicable documentary transfer taxes. Except as otherwise specified in this Agreement, Buyer shall pay all applicable closing costs, escrow fees, and title insurance costs. Buyer and Seller shall each pay all legal and professional fees and fees of other consultants incurred by Buyer and Seller, respectively. Any cost incurred through the Escrow relating to the Property that is not specifically allocated to Buyer or Seller under this Agreement shall be apportioned in the manner customary in Napa County.

12. Prorations.
(a) Taxes. [Not applicable, as the Property is publicly owned.] (b) Other Expenses. All expenses for the Property shall be prorated as of 12:01 a.m. on the day of the Close of Escrow based upon the latest available information.

13. Corrections.
forth inset forth in Section
promptly upon discovery thereof.

If any errors or omissions are made regarding prorations as 12 above, the Parties shall make the appropriate corrections If any estimates are made at the Close of Escrow
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regarding any proration, the Parties shall make the appropriate correction promptly when accurate information becomes available. Any corrected proration shall be paid in cash to the Party entitled thereto.

14. Condition of Property.
(a) Notwithstanding any other provision of this Agreement to the contrary, Seller makes no representation or warranty (except as expressly set forth in Section 17 below) whatsoever regarding the Property including, without limitation, as to:
(i) The size and dimensions of any portion of the Property; (ii) The suitability of the Property for the Buyer's planned use; (iii) All matters relating to title including extent and conditions of title to the Property, taxes, assessments, and liens;
(iv) All legal and governmental laws, statutes, rules, regulations, ordinances, restrictions or requirements concerning the Property, including zoning, use permit requirements and building codes;
(v) Natural hazards, including flood plain issues, currently or potentially concerning or affecting the Property;
(vi) The physical, legal, economic and environmental condition and aspects of the Property, and all other matters concerning the condition, use or sale of the Property, including any permits, licenses, agreements, and liens, zoning reports, engineers' reports and studies and similar information relating to the Property, and Hazardous Materials (as defined below). "Hazardous Materials" means any and all substances, contaminants, chemicals, wastes, sewage, materials or emissions which are now or hereafter regulated, controlled, prohibited or otherwise affected by any present or future local, state or federal statute, ordinance, code, rule, regulation, order, decree, permit or other law now or hereafter in effect including (A) any substance defined as a "hazardous substance," "hazardous material," "hazardous waste," "toxic substance," or "air pollutant" in (I) the Comprehensive Environmental Response, Compensation and Liability Act, as amended (CERCLA), 42 U.S.C. §9601, et seq., (II) the hlazardous Materials Transportation Act, as amended, 49 U.S.C. §1801, et seq., (Ill) the Resource Conservation and Recovery Act, as amended (RCRA), 42 U.S.C. §6901, et seq., (IV) the Federal Water Pollution Control Act, as amended, 33 U.S.C. §1251, et seq., (V) the Clean Air Act, as amended, 42 U.S.C. §7401, et seq., (VI) the Toxic Substances Control Act, as amended, 15 U.S.C. §2601, et seq., (VII) the Clean Water Act, as amended, 33 U.S. Code §1251, et seq., (VIII) the Oil Pollution Act, as amended, 33 U.S.C. §2701, et seq., (IX) California Health & Safety Code ("H&S Code") §25100, et seq. (Hazardous Waste Control), (X) the Hazardous Substance Account Act, as amended, H&S Code §25300, et seq., (Xl) the Unified Hazardous Waste and Hazardous Materials Management Regulatory Program, as amended, H&S Code §25404, et seq., (XII) H&S Code §25531, et seq. (Hazardous Materials Management), (XIII) the California Safe Drinking Water and Toxic Enforcement Act, as amended, H&S OAK #4826-2912-5042 v712

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Code §25249.5, et seq., (XIV) H&S Code §25280, et seq. (Underground Storage of Hazardous Substances), (XV) the California Hazardous Waste Management Act, as amended, H&S Code §25170.1, et seq., (XVI) H&S Code §25501, et seq. (Hazardous Materials Response Plans and Inventory), (XVII) H&S Code §18901, et seq. (California Building Standards), (XVIII) the Porter-Cologne Water Quality Control Act, as amended, California Water Code §13000, et seq., (XIX) California Fish and Game Code §5650- 5656 and (XX) or any other federal, state or local laws, ordinances, rules, regulations, court orders or common law related in any way to the protection of the environment, health or safety (collectively, "Environmental Laws"); (B) any substance the presence of which at the Property causes or threatens to cause a nuisance upon the Property or to adjacent properties or poses or threatens to pose a hazard to the health or safety of human beings; and (C) any substance the presence of which at the Property or at nearby or adjacent properties could constitute a trespass. In addition to the foregoing, to the extent not already included therein, the term "Hazardous Materials" also means (I) asbestos (including asbestos-containing materials); (II) flammable, explosive, infectious, carcinogenic, mutagenic, or radioactive materials; (III) petroleum or any substance containing or consisting of petroleum hydrocarbons (including gasoline, diesel fuel, motor oil, waste oil, grease or any other fraction of crude oil); (IV) paints and solvents; (V) lead; (VI) cyanide; (VII) DDT; (Vlll) printing inks; (IV) acids; (X) pesticides; (Xl) ammonium compounds; (XII) polychlorinated biphenyls; (XIII) radon and radon gas; and (XIV) electromagnetic or magnetic materials, substances or emissions; (vii) Any easements and/or access rights affecting the Property, including easement and access rights through the Property for the benefit of adjacent properties;
the Property; and
(viii) Any contracts and other documents or agreements affecting (ix) Any other matter of significance affecting the Property.

15. Property Condition Waiver. Effective upon the Close of Escrow, Buyer waives its right to recover from Seller, and the officers, officials, employees, agents and predecessors of Seller, and the contractors, subcontractors, architects, engineers and consultants involved in the design and construction of improvements located on or serving the Property (collectively, "Seller's Representatives"), and hereby releases Seller and Seller's Representatives from, any and all damages, losses, liabilities, costs or expenses whatsoever (including attorneys' fees and costs) and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen, which may arise on account of or in any way arising out of or connected with (i) the physical condition of the Property, (ii) the failure of the Improvements and components of the Property to comply with any law or regulation applicable thereto, and (iii) the environmental condition of the Property. The foregoing waiver and release shall exclude only those losses, liabilities, damages, costs or expenses, and claims therefor, arising from or attributable to (a) a material matter actually known to Seller (excluding constructive notice), and (1) not disclosed to Buyer and (2) not discovered by Buyer prior to the Close of Escrow, and (b) any breach by Seller of its express representations or OAK #4826-2912-5042 v713

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warranties pursuant to this Agreement. In connection with foregoing waiver and release, Buyer expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR EXPECT

TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE

RELEASE, WHICH IF KNOWN TO HIM OR HER WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.OR RELEASED PARTY."
Buyer/s Initials

16. Regulatory Authority; Buyer Waiver and Release.
(a) Reservation of Seller's Discretion. Buyer acknowledges that while Seller is entering into this Agreement in its proprietary capacity as owner of fee title to the Property, Seller nevertheless retains full and complete discretion in its regulatory capacity as to whether to approve the First Street Napa Phase II Project and enter into any Development Agreement. Accordingly, any action taken by the Seller (e.g. approval, conditional approval, disapproval) in the exercise of its discretion relating to (i) any analysis of the First Street Napa Phase It Project required by CEQA, (ii) any application for a permit or approval required to develop and construct the First Street Napa Phase II Project, or (iii) any proposed Development Agreement, shall not constitute a default or a breach of the terms of this Agreement by Seller.

By execution of this Agreement, Seller is not committing itself to, or agreeing to, undertake (1) approval of the First Street Napa Phase II Project or the proposed Development Agreement, or (2) any other act or activity requiring the subsequent independent exercise of discretion by the Seller. This Agreement shall not limit in any way the discretion of Seller in its consideration and action on any applications for discretionary land use permits, entitlements or approvals for the proposed First Street Napa Phase II Project, including without limitation consideration of any proposed Development Agreement. The Parties acknowledge that compliance with CEQA will be required in connection with consideration of such discretionary permits and approvals and proposed Development Agreement, and that Seller shall retain full discretion in accordance with CEQA and Applicable Laws (defined below) before action on any such discretionary permits, approvals, or agreement to (a) determine whether the proposed First Street Napa Phase II Project is exempt from the requirements of CEQA or otherwise adopt or certify an environmental analysis of the First Street Napa Phase II Project prepared in accordance with CEQA; (b) identify and impose mitigation measures to mitigate significant environmental impacts of the First Street Napa Phase II Project, if any; (c) select other feasible alternatives to avoid significant environmental impacts; (d) adopt a statement of overriding considerations in accordance with Public Resources Code Section 21081 (b) relative to any significant environmental impacts of the proposed First Street Napa Phase II Project which cannot otherwise be avoided; or (e) determine not to proceed with the First Street Napa Phase II Project. "Applicable OAK #4826-2912-5042 v714

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Laws" means, collectively: (i) all State and Federal laws and regulations applicable to the Property, the Kohl's Parcel and the First Street Napa Phase II Project as enacted, adopted and amended from time to time; and (ii) all City of Napa ordinances, resolutions, orders, rules, regulations, official policies, standards, specifications, guidelines or other regulations, which are promulgated or adopted by the City (including but not limited to any City agency, body, department, officer or employee) or its electorate (through the power of initiative or otherwise) from time to time. Any action taken by the Seller in the exercise of its discretion relating to any analysis of the First Street Napa Phase II Project required by CEQA or on any application for a discretionary permit, approval, or agreement required to develop and construct the First Street Napa Phase II Project shall not constitute a default or a breach of the terms of this Agreement by Seller.
(b) Buyer acknowledges and agrees that all sums expended by Buyer in connection with its investigation of the Property and design of and pursuit of land use entitlements and approvals for the proposed First Street Napa Phase II Project are at Buyer's sole risk and expense and that Seller shall have no liability to Buyer for any such costs if this Agreement is terminated or expires for any reason, including due to the Parties' failure to reach mutual agreement on the terms of a proposed Development Agreement or any of the other ancillary agreements contemplated by this Agreement or Seller's failure to approve Buyer's applications for discretionary land use entitlements, permits or approvals. Buyer irrevocably assumes all risks and waives and releases any and all claims against Seller resulting or arising directly or indirectly from City's decision not to approve and enter into a proposed Development Agreement or other ancillary agreement contemplated by this Agreement or failure to approve one or more discretionary land use entitlements, permits or approvals that may be required in connection with the proposed First Street Napa Phase II Project.

17. Seller's Representations and Warranties. In consideration of Buyer entering into this Agreement, Seller makes the limited representations and warranties set forth in this Section 17. For the purpose of this Agreement, without creating any personal liability on behalf of such individual, usage of "to Seller's actual knowledge," or words to such effect, shall mean the present, actual knowledge of Jeff Freitas, the Real Property Manager of the City of Napa, or other designee as determined by the City Manager in writing, excluding constructive knowledge or duty of inquiry, existing as of the Effective Date. In the event that Buyer, prior to Close of Escrow, becomes aware, from Seller or otherwise, of any inaccuracy or omission in the disclosures, information, or representations previously provided to Buyer by Seller or its consultants or agents, which may have a material, adverse impact on Buyer, the Property or the intended use of the Property, Buyer, as its sole option and remedy, may either (i) terminate this transaction and receive a refund of its Deposit, including all accrued interest, thereby waiving any claims or actions that Buyer may have against Seller as a result of such inaccuracy or omission, or (ii) proceed with the Close of Escrow hereunder, thereby waiving any rights that Buyer may have against Seller as a result of such inaccuracy or omission. Unless otherwise expressly stated in this Agreement, the warranties, representations and covenants of Seller shall survive the Close of Escrow and recordation of any deed(s), and be binding upon and inure to the benefit of Buyer for a OAK #4826-2912-5042 v715

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period not to exceed 365 days after the Close of Escrow ("Limitation Period") and no action, proceeding, suit or claim of any kind may be commenced or asserted by virtue of any of the representations or warranties contained in this Section 17 after the Limitation Period has expired.
(a) Seller's Authority. Seller has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated herein in the execution, delivery and performance of this Agreement. Furthermore, the execution and delivery of this Agreement has been duly authorized and no other action by Seller is required in order to make it a valid and binding contractual obligation of Seller. The individual(s) executing this Agreement on behalf of Seller are authorized to do so.
(b) No Prior Transfers. Seller has not previously sold, transferred or conveyed the Property, or granted to any other person or entity any right or interest in all or any part of the Property (other than the Kohl's Parking Obligations) and Seller has not entered into any executory contracts for the sale of all or any part of the Property (other than this Agreement), nor do there exist any rights of first refusal or options to purchase the Property, other than this Agreement.
(c) No Conflict. To Seller's actual knowledge, Seller's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Seller is a party or by which it is bound.
(d) No Undisclosed Liabilities. To Seller's actual knowledge, except as disclosed by Seller or as disclosed on the Title Report, the Property is not subject to any debt, liability, obligation, contract or commitment of Seller of any kind or nature, direct or indirect, whether accrued, absolute, contingent or otherwise. (e) Compliance with Laws. To Seller's actual knowledge, Seller has not received any notice of any violation of any taw, rule, ordinance, order or regulation, and Seller is not subject to any settlement agreement or consent decree with continuing obligations or restrictions on Seller with respect to the Property. To Seller's actual knowledge, Seller is not aware of any existing permits governing Seller's present use of the Property.
(f) Legal Proceedings, Etc. To Seller's actual knowledge, there is no legal, equitable, administrative or arbitration action, suit, proceeding or investigation pending or, threatened in writing against or affecting Seller or the Property which, if adversely determined, could have a material adverse effect on the Property or the ability of Seller to consummate the transactions contemplated hereby, and there is no judgment, decree, injunction, rule or order of any court, governmental department, commission, agency, instrumentality or arbitrator outstanding against Seller, which if outstanding against Seller would have a material adverse effect on the Property.

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(g) Environmental Matters.

Effective Date and the Close of Escrow:

To Seller's actual knowledge, as of the
(i) Seller has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Property are or have been in violation of any Environmental Laws, or informing Seller that the Property is subject to investigation or inquiry regarding Hazardous Materials (as defined herein) on the Property or upon the parking lot improvements or the potential violation of any Environmental Laws; (ii) There is no monitoring program required by the United States Environmental Protection Agency or any similar state agency concerning the Property or its improvements; and
(iii) Seller has disclosed to Buyer all material information, records, and studies maintained by Seller in connection with the Property and its improvements concerning Hazardous Materials.
(h) Provision of Documents. Seller has previously provided or shall, within fourteen (14) days following the Effective Date, provide Buyer with true, correct and complete copies of each of the following, to the extent in Seller's possession:
(i) All permits and licenses pertaining to the use, operation, ownership and or management of the Property, if any, and if Seller knows of any missing permits or licenses, Seller has identified them for Buyer; (ii) All contracts and agreements in Seller's possession relating to the use, operation, ownership and or management of the Property, if any, and if any contracts are not in writing, Seller has informed Buyer and provided a written summary of the material terms of any such oral agreements to Buyer; and (iii) All environmental, engineering, soils and property and operations management reports for the Property, if any.

18. Buyer's Representations and Warranties. In consideration of Seller entering into this Agreement and as an inducement to Seller to sell the Property to Buyer, Buyer makes the following representations and warranties, each of which is material and is being relied upon by Seller (the continued truth and accuracy of which constitutes a condition precedent to Seller's obligations hereunder):
(a) Buyer's Authority. Buyer has the legal right, power and authority to enter into this Agreement and to consummate the transaction contemplated herein in the execution, delivery and performance of this Agreement and no other action by Buyer is requisite to the valid and binding execution, delivery and performance of this Agreement. The individual(s) executing this Agreement on behalf of Buyer are authorized to do so.

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(b) Enforceability. This Agreement and all documents required hereby to be executed by Buyer are and shall be valid, legally binding obligations of and enforceable against Buyer in accordance with their terms. (c) Conflicting Documents. Neither the execution and delivery of this Agreement and the documents and instruments referenced herein, nor the occurrence of the obligations set forth herein, nor the consummation of the transaction contemplated herein, nor compliance with the terms of this Agreement and the documents and instruments referenced herein conflict with or result in the material breach of any terms, conditions or provisions of, or constitute a default under, any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreement or instrument to which Buyer is a party.
(d) No Side Agreements or Representations. Buyer represents, warrants and covenants to Seller that Buyer has entered into this Agreement based upon its rights and intentions to independently inspect the Property. Except as specifically provided in Section 17 of this Agreement, Seller makes no representation or warranty regarding the condition of the Property, its past use, or its suitability for Buyer's intended use. Buyer will be relying solely upon its own independent inspection, investigation, and analysis of the Property as it deems necessary or appropriate in so acquiring the Property from Seller, including, without limitation, any and all matters concerning the condition, use, sale, development or suitability of the Property for Buyer's intended use. (e) No Buyer Bankruptcy. Buyer is not the subject of any bankruptcy proceeding, and no general assignment or general arrangement for the benefit of creditors or the appointment of a trustee or receiver to take possession of all or substantially all of Buyer's assets has been made.
(f) As-ls Purchase. EXCEPT AS OTHERWISE PROVIDED IN THIS

AGREEMENT, BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS, NO PATENT OR LATENT DEFECTS ON THE

PROPERTY WHETHER KNOWN NOW OR DISCOVERED LATER SHALL AFFECT

THIS AGREEMENT, AND THAT OTHER THAN AS EXPRESSLY PROVIDED IN SECTION 17, BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR

WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM

SELLER OR SELLER'S REPRESENTATIVES AS TO ANY MATTERS CONCERNING THE PROPERTY.

19. Liquidated Damages. BUYER RECOGNIZES THAT THE PROPERTY

WILL BE REMOVED BY THE SELLER FROM THE MARKET DURING THE

EXISTENCE OF THIS AGREEMENT, AND THAT IF, FOLLOWING THE DEPOSIT

RELEASE DATE, THIS TRANSACTION CONCERNING THE PROPERTY IS NOT

CONSUMMATED FOR ANY REASON OTHER THAN A DEFAULT BY SELLER, IT

WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE EXTENT OF THE DETRIMENT TO SELLER. THE PARTIES HAVE DETERMINED OAK #4826-2912-5042 v718

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AND AGREED THAT THE ACTUAL AMOUNT OF DAMAGES THAT WOULD BE

SUFFERED BY SELLER AS A RESULT OF ANY SUCH FAILURE TO CLOSE IS

DIFFICULT OR IMPRACTICABLE TO DETERMINE AS OF THE DATE OF THIS

AGREEMENT AND THAT THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE AMOUNT OF SUCH DAMAGES. FOR THESE REASONS, THE

PARTIES AGREE THAT IF, FOLLOWING THE DEPOSIT RELEASE DATE, THE

PURCHASE AND SALE IS NOT CONSUMMATED FOR ANY REASON OTHER THAN

A SELLER DEFAULT, THE DEPOSIT SHALL BE FORFEITED TO SELLER AS LIQUIDATED DAMAGES AS SELLER'S SOLE REMEDY. NOTHING CONTAINED

HEREIN SHALL IN ANY MANNER LIMIT THE AMOUNT OF DAMAGES OBTAINABLE

PURSUANT TO AN ACTION UNDER ANY HOLD HARMLESS, DEFENSE OR

INDEMNIFICATION PROVISION SET FORTH IN THIS AGREEMENT OR

REASONABLE ATTORNEYS' FEES RECOVERABLE PURSUANT TO ANY ACTION

UNDER A HOLD HARMLESS, DEFENSE OR INDEMNIFICATION SET FORTH IN THIS AGREEMENT. THE PAYMENT OF THE DEPOSIT AS LIQUIDATED DAMAGES

IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO

CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. THE PARTIES

WITNESS THEIR AGREEMENT TO THIS LIQUIDATED DAMAGES PROVISION BY

PLACING THE INITIALS OF THE AGENT EXECUTING THIS AGREEMENT ON ITS

BEHALF BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF

THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS

REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES EROVISION.

Seller.Buye

20. Damage or Condemnation Prior to Closing. Seller shall promptly notify Buyer of any casualty to the Property or any condemnation proceeding considered or commenced prior to the Close of Escrow. If any such damage or proceeding relates to or may result in the loss of any "material portion" (as defined below) of the Property, Seller or Buyer may, each at its option, elect either to (i) terminate this Agreement, in which event the Deposit, including all accrued interest, shall be returned to Buyer and neither Party shall have any further rights or obligations hereunder, or (ii) continue the Agreement in effect, in which event upon the Close of Escrow, Buyer shall be entitled to any compensation, award, or other payments or relief resulting from such casualty or condemnation proceedings. The term "material portion" shall mean damages greater than One Hundred Thousand and 00/100 Dollars ($100,000.00).

21. Specific Performance; Limitation on Remedies. If, at any time following the Parties' approval of a Development Agreement (if any), the sale of the Property as contemplated hereunder is not consummated due to Seller's default hereunder, Buyer shall be entitled, as its sole remedy, either (a) to receive the return of the Deposit, which return shall operate to terminate this Agreement and release Seller from any and alt liability hereunder, or (b) to enforce specific performance of Seller's obligation to convey OAK #4826-2912-5042 v719

EXHIBIT D

the Property to Buyer in accordance with the terms of this Agreement, provided that Buyer files suit for specific performance on or before thirty (30) days following the date upon which Close of Escrow was to have occurred, it being understood and agreed that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder. Buyer and Seller further agree that if Seller should default following the Parties' entry into a Development Agreement, the remedies otherwise provided by law including, but not limited to, damages will be deemed inappropriate and inadequate to fully remedy such Seller default given the unique nature of the Property, Buyer's intent to assemble the Property with the adjacent Kohl's Parcel owned by Buyer, and the extreme difficulty of assessing with certainty damages for such default. Accordingly, (i) Seller agrees that it shall not oppose the legal propriety of Buyer requesting a court to consider the issuance of an injunction or other equitable relief as part of any appropriate specific performance remedy should the court find that after entering into a Development Agreement, Seller has breached or failed to perform its obligations under this Agreement, and (ii) Buyer expressly waives its rights to seek damages in the event of Seller's default hereunder. Notwithstanding any other provision of this Section 21 to the contrary, no such Seller default shall be deemed to have occurred unless and until Buyer has given Seller written notice thereof, describing the nature of the default, and Seller has failed to cure such default within five days after receipt of such notice (and the Close of Escrow shall be extended, if necessary, to allow the Seller the full five day period). Nothing herein shall be deemed to prevent Seller from opposing in good faith any Buyer initiated court proceeding which attempts to find Seller in breach or default of any of Seller's obligations under this Agreement.

22. Third Party Legal Challenge.
(a) The Parties may cooperate in the defense of any court action or proceeding instituted by a third party or other governmental entity or official challenging the validity of any provision of this Agreement, the Seller's initial approval of this Agreement or the City's approval of any permits or approvals for the proposed First Street Napa Phase II Project ("Initial Litigation Challenge"), and the Parties shall keep each other informed of all developments relating to such defense, subject only to confidentiality requirements that may prevent the communication of such information.

The foregoing notwithstanding, the Seller may choose not to defend any such proceeding challenging the validity of any provision of this Agreement or the Seller's initial approval of this Agreement or the City's approval of one or more of the Project Approvals.
(b) If an Initial Litigation Challenge is filed, upon receipt of the complaint, the Parties will have 20 days to meet and confer regarding the merits of such Initial Litigation Challenge and to determine whether to defend against the Initial Litigation Challenge, which period may be extended by the Parties' mutual agreement so long as it does not impact any litigation deadlines. Seller and Buyer mutually commit to meet all required litigation timelines and deadlines. The Parties may enter a joint defense agreement, which will include among other things, provisions regarding confidentiality.

The City Manager is authorized to negotiate and enter such joint defense agreement in a form acceptable to the City Attorney. Such joint defense agreement shall also provide OAK #4826-2912-5042 v720

EXHIBIT D

that any proposed settlement of an Initial Litigation Challenge shall be subject to Seller's and Buyer's approval, each in its reasonable discretion. If the terms of the proposed settlement would constitute an amendment or modification of this Agreement, the settlement shall not become effective unless such amendment or modification is approved by Buyer in Buyer's sole discretion, and by Seller in Seller's sole discretion and in accordance with Applicable Laws.
(c) If, after meeting and conferring, the Parties mutually agree (each in its sole discretion) to defend against the Initial Litigation Challenge, then the following shall apply:
(i) For the purposes of cost-efficiency and coordination, the Parties shall first consider defending the Initial Litigation Challenge jointly, with counsel and under terms of joint representation mutually acceptable to the Seller and Buyer (each in its sole discretion), at the Buyer's sole cost and expense. If the Parties cannot reach timely and mutual agreement on a joint counsel, and Buyer continues to elect (in its sole discretion) to defend against the Initial Litigation Challenge, then: (i) Buyer shall take the lead role defending such Initial Litigation Challenge and may, in its sole discretion, elect to be represented by the legal counsel of its choice; (ii) Seller may, in its sole discretion, elect to be separately represented by the outside legal counsel of its choice in any such action or proceeding with the costs of such representation to be paid by Seller and (iii) Buyer shall reimburse Seller, within ten (10) business days following Seller's written demand therefor, which may be made from time to time during the course of such litigation, all necessary and reasonable costs incurred by Seller in connection with the Initial Litigation Challenge, not including Seller's legal fees. (ii) For any Initial Litigation Challenge which the Buyer has elected to defend under this Section 22, Buyer shall indemnify and hold harmless the Seller and Seller's Representatives from any and all claims, liabilities and damages, including attorneys' fees awarded under Code of Civil Procedure Section 1021.5, assessed or awarded against Seller by way of judgment, settlement, or stipulation), related to such Initial Litigation Challenge.
(d) If Buyer elects, in its sole discretion, not to defend against the Initial Litigation Challenge, it shall deliver written Notice to the Seller regarding such decision.

If Buyer elects not to defend, the Seller has the right, but not the obligation, to proceed to defend against the Initial Litigation Challenge and, in such event, Seller shall take the lead role defending such Initial Litigation Challenge and may, in its sole discretion, elect to be represented by the legal counsel of its choice, at its sole cost and expense. If Buyer elects not to defend, the Seller has the right, but not the obligation, to terminate this Agreement, in which case the Buyer Deposit shall be refunded to Buyer and this Agreement, other than those provisions which by their terms survive expiration or termination hereof, shall be of no further force or effect.

23. Notices. All notices, demands, consents, requests or other communications required or permitted to be given pursuant to this Agreement shall be in writing, shall be given only in accordance with the provisions of this Section 23, shall be addressed to OAK #4826-2912-5042 v721

EXHIBIT D

WITH A COPY TO:
the Parties in the manner set forth below, and shall be delivered by certified mail return receipt requested, or by overnight courier or delivery service with signature required, to the addresses set forth below, or to such other place as any Party may similarly in writing designate to the other. Notices shall be effective three business days after mailing by certified mail or upon delivery by overnight courier or delivery service (or, if delivery is not during regular business hours on a business day, then on the next business day).

The addresses of the Parties to receive notices are as follows:

TO SELLER: City of Napa
City Hall, South Wing
955 School Street/PO Box 660
Napa CA 94559
Attention: City Manager
Telephone: 707-257-9501
City of Napa
City Hall, South Wing
955 School Street/PO Box 660
Napa, California 94559
Attention: City Attorney
Telephone: (707) 257-9501
Napa Parkway Plaza, LLC
1339 Pearl Street, Suite 201
Napa, CA 94559
Attention: Andrew Mazotti
Tel. 707-257-0600
Holman Teague Roche Anglin LLP
1455 First Street
Suite 217
Napa, CA 94559
Attention: Kevin Teague
Tel: (707)927-4280
Placer Title Company of Napa
5 Financial Plaza, #205
Napa, CA 94558
Attention: Laura Blessing
Tel: (707) 346-6940

24. Brokers. Each of Seller and Buyer represent that it has not engaged nor is it aware of any person entitled to any brokerage commission or finder's fee in connection with this transaction. Each Party agrees to indemnify the other Party against any claim asserted against or adjudged against the other Party, for any brokerage commission or finder's fee or any like compensation occasioned by or as a result of any TO BUYER:

WITH A COPY TO:

TO ESCROW HOLDER:

OAK #4826-2912-5042 v722

EXHIBIT D

act or omission of each such Party, including all attorney's fees, costs, expenses and any other fees incurred by, charged against or adjudicated against, the other Party, whether or not suit is filed, which are related to this indemnity agreement or enforcement thereof. Seller's and Buyer's indemnity obligations under this Section 24 shall survive any termination of this Agreement, shall survive the Closing and shall not be merged upon delivery and acceptance of the Grant Deed or upon payment of the Purchase Price by Buyer to Seller.

25. Assignment. Buyer shall not assign its right, title or interest in this Agreement to any other party without the prior written consent of Seller, which determination may be withheld in Seller's sole and absolute discretion. Buyer may, however, assign this Agreement and all of Buyer's rights and obligations under it to ZGJV Napa Wine Holding Company LLC which is the affiliated entity formed to develop, own and operate the First Street Napa Phase II Project or to another affiliated entity in which Buyer or Buyer's managing member maintains an ownership interest and day-to- day management and control in such entity, provided that (i) such assignee assumes in a writing reasonably acceptable to Seller, all of the obligations of Buyer, (ii) Seller receives prior written notice of such assignment, and (iii) the assignee executes all documents and perform all obligations of Buyer as if such assignee were the original Buyer under this Agreement.

26. Miscellaneous.
(a) Partial Invalidity. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. (b) Waivers. No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other obligation or act except those of the waiving Party, which shall be extended by a period of time equal to the period of the delay. (c) Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and permitted assigns of the Parties hereto. (d) Intentionally Omitted.
(e) Entire Aqreement/Amendments. This Agreement (including all Recitals and Exhibits attached hereto), is the final expression of, and contains the entire agreement between, the Parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. This Agreement may not be modified, changed, supplemented, superseded, canceled or terminated, nor may any OAK #4826-2912-5042 v723

EXHIBIT D

obligations hereunder be waived, except by written instrument signed by the Party to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein. The Parties do not intend to confer any benefit hereunder on any person, firm or corporation other than the Parties hereto.
(f) Time of Essence. Seller and Buyer hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that failure to timely perform any of the terms, conditions, obligations or provisions hereof by either Party shall constitute a material breach of and a non-curable (but waivable) default under this Agreement by the Party so failing to perform.
(g) Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed by the Parties to create the relationship of principal and agent, a partnership, joint venture or any other association between Buyer and Seller. (h) Construction/Exhibits. Headings at the beginning of each paragraph and subparagraph are solely for the convenience of the Parties and are not a part of the 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 of the Parties, but rather as if both Parties had prepared the same. Unless otherwise indicated, all references to paragraphs, sections, subparagraphs and subsections are to this Agreement. All exhibits referred to in this Agreement are attached and incorporated herein by this reference.
(i) Governing Law/Venue. The Parties hereto acknowledge that this Agreement has been negotiated and entered into in the State of California. The Parties hereto expressly 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 reference to its choice of law rules. The Parties hereto agree that the exclusive jurisdiction and venue for any legal action arising out of or relating to this Agreement shall be in the applicable Court of Napa County, California, or, in the alternative, in cases where Federal jurisdiction is available, in the United States District Court for the Northern District of California.
(j) Days of Week. A "business day," as used herein, shall mean any working day, as defined in City of Napa Municipal Code section 1.04.030. If any date for performance herein falls on a day other than a business day, the time for such performance shall be extended to 5:00 p.m. on the next business day. (k) Possession of Property. Subject to the Approved Conditions of Title, Buyer shall be entitled to the possession of the Property immediately following the Close of Escrow.

OAK #4826-2912-5042 v724

EXHIBIT D

(I) Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.
(m) Facsimile and Electronic Signatures. In order to expedite the transaction contemplated herein, facsimile or electronic signatures may be used in place of original signatures on this Agreement. Seller and Buyer intend to be bound by the signatures on the facsimile document, are aware that the other Party will rely on the facsimile or electronic signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the use of a facsimile or electronic signature. (n) Termination Documents. If this Agreement is terminated prior to the Close of Escrow for any reason, Buyer shall deliver to Seller upon Seller's request, at no cost and without warranty as to correctness, the following documents and materials (collectively hereinafter referred to as the "Termination Documents"): copies of all reports, studies, maps and engineering studies that were generated by third parties for Buyer with respect to the Property, including, but not limited to, all environmental reports, surveys, marketing reports, geotechnical reports, lot studies and improvement plans. It is understood and agreed that, with respect to any provision of this Agreement which refers to the termination of this Agreement and the return of the Deposit to Buyer, such Deposit shall not be returned to Buyer unless and until Buyer has fulfilled its obligation to return to Seller the Termination Documents. (o) Exclusivity. Except as otherwise expressly provided below, commencing on the Effective Date and continuing until Closing or termination of this Agreement, Seller shall not offer the Property or any interest therein for sale or lease to any other party, or negotiate, solicit or entertain any offers to sell or lease the Property.

Seller may issue one or more short term (i.e. daily, weekly or monthly) licenses authorizing use of all or a portion of the Property, including for parking purposes, provided the term of such license(s) shall not extend beyond the Closing. [Signatures on next page]
OAK #4826-2912-5042 v725

EXHIBIT D

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the dates set forth below.

BUYER:SELLER:

NAPA PARKWAY PLAZA, LLC, a
California limited lia^Uity company
^ A^/f )^ By
^T
Titter 'Ww. ^.c ^t -< Al
Da^: ' T^l.y ^y . /^2-^j
^ —^^7'
CITY OF NAPA, a California charter city
^<^^^ By: ^
Name: Steve Potter
Title: Ci.ty Manager^
Date: JL\ILJ "^li 70'2^
ATTEST:
^ L By:

Tiffanarran^a, City Clerk

COUNTERSIGNED
By: ./CU K^^tLb^(C1
^^asba^Payastiafl-Bepyty CitJL;'-(Kle5c'nLrr ^Auditor

APPROVED AS TO FORM
By:
/ Michael W. Barrett, City Attorney
^
OAK #4826-2912-5042 v726

EXHIBIT D

Exhibit A
Exhibit
Exhibit C
Schedule of Exhibits
Legal Description of Property
First Street Napa Phase II Project Conceptual Project
Description
Grant Deed
Attachment 1 Legal Description of Property
OAK #4826-2912-5042 v727

EXHIBIT D

RECEIPT BY ESCROW HOLDER
Escrow Holder hereby acknowledges receipt of a fully executed copy of the foregoing Agreement of Purchase and Sale and Joint Escrow Instructions (Surface Parking Lot at Southeast Corner of Second and Randolph) APNs. 003-166-008 & 003- 166-011, Napa, California on this date and agrees to abide by the escrow instructions contained therein.

Escrow Holder:

PLACER TITLE COMPANY OF NAPA
By:

Name:

Effective Date:

OAK #4826-2912-5042 v728

EXHIBIT D

EXHIBIT A
Leaal DescriDtion of the ProDertv
The land referred to in this Agreement is situated in the State of California, County of Napa, City of Napa, and is described as follows:
"Parking Lot G"

PARCEL ONE
All that certain real property situate, lying and being in the City of Napa, County of Napa. State of California. describes as follows:

A portion of lot 3 in Block 19, as shown on the map entitled, "Plan of Napa Cit/>, filed November 28,1853 in Book B of Deeds, at page 433, Napa County Records, described as lollows:

Commencing at the most Western comer of said Lot 3; running thence Southeasteriy along the Northeastern line of Coombs Street, 60.00 feet; thence Northeasterly parallel with the Southeastern line of Pearl Street, 30.09 feet; thence Northwesterly, parallel with the Northeastern line of Coombs Street, 60,00 feet to the Southeastern line of Pearl Street; thence Southwesterly along last mentioned line, 30.09 feet to the point of commencement.

APN 003-166.008

PARCEL TWO
All that certain real property situate, lying and being In the City of Napa, County of Napa, State of California, describes as follows:

A portion of lots 1,2, 3 and 4 in Block 19, as shown on the map entitled, "Plan of Napa City", filed November 28, 1853 in Book B of Deeds, at page 433, Napa County Records, described as follows:

Commencing at the intersection of the southwesterly line of Brown Street with the southeasterly line of Pearl Street; thence along the southwesterly line of said Brown Street southeasteriy 135.00 feet to the northwesterly line of the parcel of land described in the deed to Nichandros Associates recorded September 27, 1972 in Book 889, at page 845, Napa County Official Records; thence leaving the southwesterly line of Brown Street and running south 57° 06' 30" west 240.00 feet along said northwesterly line to the northeasterly line of Coombs Street; thence northwesterly along said nonheasterfy line 75.00 feet to the most southerly comer of the parcel of land described in the deed to City of Napa, a municipal corporation of the state of California, recorded March 24, 2011 as Instrument No. 2011-0007031; thence leaving the northeasterly line ot Coombs Street and running northeasterly 30.09 leet along the southeasterly line of said City of Napa parcel to the most easterly corner thereof; thence along the northeasterly line of said City of Napa parcel northwesteriy 60.00 feet to the herein above mentioned southeasterly line of Pearl Street; thence atong said southeasterly line of Pearl Street northeasterly 209.91 leet to the point of commencement.

APN 003-166-011
OAK #4826-2912-5042 v7Exhibit A

EXHIBIT D

EXHIBIT B
First Street Napa Phase II Project Conceptual Project Description Use Description: First Street Napa Phase II Project is a dynamic rental housing, retail and upper upscale hotel project located in Downtown Napa's most important and central public gathering area. Each component is proposed as follows:

Rental Housing (Including Workforce): The project plans to develop 120 for rent apartments with 15% of the units (18 units) to be restricted to 120% AMI. All units are for rent units and will provide housing for a variety of the workforce.

Retail: The project plans to include approximately 25,000 sf of retail space in the ground floors of two buildings.

Hotel: The planned hotel with be an STR-rated upper-upscale facility with approximately 200 rooms. The Hotel will also include amenities such as a restaurant on the ground floor and a rooftop patio and bar and event space.

These amenities may be operated as independent retail and commercial uses from the hotel.

Outdoor and Public Spaces: The ground floor outdoor and public space will include both raised and at-grade spaces facilitating a myriad of public and private uses.

Programming includes the potential for movie screening to be projected onto the hotel building, for public gatherings, traditional food and beverage sales, and for organized public and private events. The Northeastern corner of the building is intended to be designed to meaningfully engage the adjacent public right-of-way between the site and the Napa Creek. This will transform the currently underutilized space adjacent the creek embankment into an extension of the project's assembly space for public and private uses. The project concept includes a public walkway between the hotel and apartment buildings that will lead from the First Street Napa mall to the 9/11 memorial.

Parking: The City of Napa is currently obligated to provide a designated number of non-exclusive parking spaces for retail uses conducted on the Kohl's Parcel under the existing Kohl's (formerly Mervyn's) lease, as provided in that certain License Agreement dated February 1, 2000, City Agreement 7583. The Project which is anticipated to involve Kohl's voluntary agreement to an early termination of its lease would relieve the City of all parking obligations under the License Agreement. Buyer's plans to construct parking improvements sufficient to serve the First Street Napa Phase II Project's parking demand and relieve Seller of the Kohl's Parking Obligation will be established in the Development Agreement. In the event that sufficient public parking is not available upon relieving the City of the Kohl's Parking Obligation and the development of parking within the First Street Napa Phase II Project (as structured, surface or subsurface parking), additional spaces may be required by the City to be provided or developed by Buyer, at its expense, on an adjacent parcel or other nearby public parking location acceptable to the City in its sole absolute discretion or through the payment of parking exempt fees.

OAK #4826-2912-5042 v7Exhibit B

EXHIBIT D

EXHIBIT C
Grant Deed
RECORDING REQUESTED BY:

WHEN RECORDED MAIL
TO AND MAIL TAX STATEMENTS TO:

Napa Parkway Plaza, LLC,
c/o Holman Teague Roche & Anglin, LLP
1455 First Street, Suite 217
Napa, California 94559
Attn.: Kevin Teague
(Above Space for Recorder's Use Only)

GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, the City of Napa, a municipal corporation, hereby grants to Napa Parkway Plaza, LLC, a California limited liability company, the real property located in the City of Napa, County of Napa, California described in Attachment 1 attached hereto and incorporated by reference.

CITY OF NAPA, a municipal corporation
By:

Steve Potter, City Manager
(Signature must be notarized)
OAK #4826-2912-5042 v7Exhibit C

EXHIBIT D

ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.

State of California
County of
)
)ss
)
On.
me,_
.)before
.1
notarypublic,
(Name of Notary)
personallyappeared
who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/herAheir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
(Notary Signature)
OAK #4826-2912-5042 v7Exhibit C

EXHIBIT D

ATTACHMENT 1
Legal Description of Property
The land referred to in this Agreement is situated in the State of California, County of Napa, City of Napa, and is described as follows:
"Parking Lot G"

PARCEL ONE
All that certain real property situate, tying and being in the City of Napa, County ot Napa, State of California, describes as follows:

A portion of lot 3 in Block 19, as shown on the map entitled, "Plan of Napa City", filed November 28,1853 in Book B of Deeds, at page 433, Napa County Records, described as follows:

Commencing at the most Western comer of said Lot 3; running thence Southeasterly along the Northeastern line of Coombs Street, 60.00 feet; thence Northeasterly parallel with the Southeastern line of Pearl Street, 30.09 feet; thence Northwesterly, parallel with the Northeastern line of Coombs Street, 60.00 feet to the Southeastern line of Pearl Street; Ihence Southwesteriy along last mentioned line, 30.09 feet to the point of commencement.

APN 003-166-008

PARCEL TWO
All that certain real property situate, lying and being in the City of Napa, County of Napa, State of California, describes as follows:

A portion of lots 1,2, 3 and 4 in Block 19, as shown on the map entitled, "Plan of Napa Cit/", filed November 28, 1853 in Book B of Deeds, at page 433, Napa County Records, described as follows:

Commencing at the intersection o< the southwesterly line of Brown Street with the southeasterly line of Pearl Street; thence along the southwesterly line of said Brown Street southeasterly 135.00 feet to the northwesterly line oi the parcel of land described in the deed to Nichandros Associates recorded September 27, 1972 in Book 889, at page 845, Napa County Official Records; thence leaving the southwesterly line of Brown Street and running south 57° 06' 30" west 240.00 feet along saM northwesterly line to the northeasterly line of Coombs Street; thence northwesterly along said northeasterly line 75.00 feet to the most southerly comer ot the parcel of land described in the deed to City of Napa, a municipal corporation o< the state of California, recorded March 24, 201 1 as Instrument No. 2011-0007031 ; thence leaving the northeasteriy line of Coombs Street and running northeasterly 30.09 feet along the southeasterly line of said City of Napa parcel to the most easterly corner thereof; thence along the northeasterly line of said City of Napa parcel northwesterly 60.00 feet to the herein above mentioned southeasterly line of Peail Street; thence along said southeasterly line of Pearl Street northeasterly 209.91 feet to the point of commencement.

APN 003-166-011
OAK #4826-2912-5042 v7Attachment 1 to Exhibit C

EXHIBIT D

1 California Street - Suite 3050
San Francisco, California 94111 -5432
voice 415.655.8100 - fax 415.655.8099
www.bwslaw.com
Direct No.: 415.655.8114
[email protected]
Los Angeles – Inland Empire – Marin County – Oakland – Orange County – Palm Desert – San Diego – San Francisco – Silicon Valley – Ventura County

Attachment D
Resolution R2022-069

EXHIBIT D

EXHIBIT D

RESOLUTION R2022-069

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NAPA, STATE OF CALIFORNIA, (1) DECLARING
APPROXIMATELY 0.75 ACRES OF REAL PROPERTY,

GENERALLY INCLUDING THE SURFACE PARKING LOT

LOCATED AT THE SOUTHEAST CORNER OF PEARL

STREET AND COOMBS STREET, AS EXEMPT SURPLUS

LAND UNDER THE STATE SURPLUS LANDS ACT

PURSUANT TO GOVERNMENT CODE SECTION
54221 (F)(1)(G); (2) AUTHORIZING THE CITY MANAGER

TO EXECUTE AN ASSIGNMENT OF THE PURCHASE

AND SALE AGREEMENT FOR THAT PROPERTY (CITY
AGREEMENT NO. C2020-174) FROM NAPA PARKWAY
PLAZA, LLC, TO COOMBS STREET LLC; AND (3)

AUTHORIZING THE CITY MANAGER TO EXECUTE A
FIRST AMENDMENT TO AGREEMENT NO. C2020-174 TO

FACILITATE COUNCIL'S FUTURE CONSIDERATION OF A

DEVELOPMENT AGREEMENT FOR THAT PROPERTY
WHEREAS, the City of Napa ("City") owns an approximately 0.75 acre surface parking lot with 52 parking stalls located at the southeast corner of Pearl Street and Coombs Street (APN's 003-166-008 &-011) ("Subject Property"); and WHEREAS, on February 1, 2000, the City entered into a License Agreement (City Agreement No. 7583; hereinafter "License Agreement") with the owner of the real property located at 1116 First Street and improved with a retail department store (formerly Mervyn's, and currently Kohl's,) (the "Kohl's Site") by which the City is contractually obligated to provide a minimum of 317 parking stalls for the benefit of the department store during its lease term, which currently expires on July 31, 2031; and WHEREAS, the real property on which the City is required to provide parking for the benefit of the department store is defined in the License Agreement as the "Parking Areas," generally located within walking distance of the Kohl's Site, and it includes the Subject Property; and
WHEREAS, the State Surplus Lands Act (Government Code Sections 54220 - 54234; or "SLA") generally requires local agencies (such as the City) to follow specific procedures to notify the public regarding the availability of "Surplus Land" before it is sold, to provide an opportunity for the public to propose and negotiate for the possible development of projects that meet the State's goals, focused on the provision of affordable housing, and also including opportunities for the development of parks and schools; and
R2022-069Page 1 of 4July 19, 2022

EXHIBIT D

WHEREAS, the City is required under the SLA to declare the Subject Property either "surplus land" or "exempt surplus land," prior to taking action to dispose of the Subject Property; and
WHEREAS, the SLA defines "Exempt Surplus Land" that is not required to follow the procedural requirements of the SLA to include (among other exemptions): "Surplus land that is subject to valid legal restrictions that are not imposed by the local agency and that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site" (Government Code Section 54221 (f)(1)(G)); and
WHEREAS, the License Agreement is a valid legal restriction on the City's use of the Subject Property since the City is legally obligated to provide publicly available parking on the Subject Property, which means housing is prohibited (as it is in conflict with a surface parking lot use), the City did not impose the property restriction as it was a requirement of an integrated project for the department store and the City may not modify the current obligation to provide parking without negotiations with, and the agreement of, the owner of the Kohl's Site; and
WHEREAS, on July 31, 2020, the City entered into a Purchase and Sale Agreement (City Agreement No. C2020-174; hereinafter "Sale Agreement") with Napa Parkway Plaza, LLC (the owner of the Kohl's Site; hereinafter "Owner")), by which: (a) the Owner committed to providing alternative parking solutions for the department store that would result in a termination of the License Agreement; in return for which (b) the City would sell the Subject Property to the Owner for the planned purpose of developing a mixed-use project including approximately 120 rental units (with 15% restricted to 120% AMI affordability), approximately 25,000 square feet of retail, a hotel with approximately 200 rooms, public parking, and outdoor and public spaces; and WHEREAS, when the City Council approved the Sale Agreement on June 23, 2020, it included Recital E which provided: "City has determined that the purchase and sale transaction contemplated by this [Sale] Agreement is exempt from the requirements of the Surplus Lands Act (California Government Code section 54220, et seq.) because the [Subject] Property is subject to valid restrictions to satisfy the Kohl's Parking Obligation;" and
WHEREAS, the contracting party under the Sale Agreement has sold its interests in the Kohl's Site to Coombs Street LLC ("Coombs"), and Coombs has been working with good faith diligence to pursue the project proposed under the Sale Agreement, and Coombs has made substantial progress toward negotiating and drafting the Development Agreement contemplated by the Sale Agreement; and WHEREAS, the City is supportive of the assignment of the Sale Agreement to Coombs, and the City is supportive of amending the internal milestones under the Sale Agreement in order to facilitate the finalization of a proposed Development Agreement, to be presented to Council for consideration at a future Council meeting; and R2022-069Page 2 of 4July 19, 2022

EXHIBIT D

WHEREAS, the City Council has considered all information related to this matter, as presented at the public meetings of the City Council identified herein, including any supporting reports by City Staff, and any information provided during public meetings.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Napa, as follows:

1. The City Council hereby finds that the facts set forth in the recitals to this Resolution are true and correct, and establish the factual basis for the City Council's adoption of this Resolution.

2. The City Council hereby declares the Subject Property "exempt surplus land" pursuant to Government Code Section 54221 (f)(1)(G) and determines that the City may dispose of the Subject Property without further complying with the requirements of the SLA.

3. The City Council hereby authorizes the City Manager to execute the Assignment of Agreement No. C2020-174 (Agreement of Purchase and Sale and Joint Escrow Instructions for property identified as 1051 - 1199 Pearl St.; APN's 003-166-008, and 003-166-011) among Napa Parkway Plaza, LLC ("Assignor") and Coombs Street LLC ("Assignee").

4. The City Council hereby authorizes the City Manager to execute the First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions (Agreement No. C2020-174) with Coombs Street LLC, for property identified as 1051-1199 Pearl St; APN's 003-166-008, and 003-166-011).

5. This Resolution shall take effect immediately upon its adoption.

R2022-069Page 3 of 4July 19, 2022

EXHIBIT D

I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of Napa at a public meeting of said City Council held on the 19th day of July, 2022, by the following vote:

AYES: Alessio, Narvaez, Painter, Luros, Sedgley
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:

Approved as to form:

Tiffany Carra^za
City Clerk
Michael W. Barrett
City Attorney
R2022-069Page 4 of 4July 19, 2022

EXHIBIT D

955 School Street
Napa, CA 94559
www.cityofnapa.org

CITY OF NAPA
Staff Reports Details (With Text)
File #: Version: 1276-2022 Name:

Status:Type: Consent Calendar Passed
File created: In control:7/8/2022 CITY COUNCIL OF THE CITY OF NAPA On agenda: Final action:7/19/2022 7/19/2022
Title: City-owned Surface Parking Lot Property at Southeast Corner of Pearl and Coombs Streets Sponsors:

Indexes:

Code sections:

Attachments:

1. ATCH 1 - Resolution, 2. ATCH 2 - Assignment of Purchase and Sale Agreement, 3. ATCH 3 - First Amendment to Purchase and Sale Agreement
Action ByDate Action ResultVer.

CITY COUNCIL OF THE CITY OF
NAPA
7/19/2022 1
To: Honorable Mayor and Members of City Council
From: Vin Smith, Community Development Director
Prepared By: Vin Smith, Community Development Director
TITLE:

City-owned Surface Parking Lot Property at Southeast Corner of Pearl and Coombs Streets RECOMMENDED ACTION:

Adopt a resolution (1) Declaring approximately 0.75 acres of real property, generally including the surface parking lot located at the southeast corner of Pearl Street and Coombs Street, as exempt surplus land under the State Surplus Lands Act pursuant to Government Code Section 54221(f)(1) (G); (2) Authorizing the City Manager to execute an Assignment of the Purchase and Sale Agreement for that Property (City Agreement No. C2020-174), from Napa Parkway Plaza, LLC, to Coombs Street LLC; and (3) Authorizing the City Manager to execute a First Amendment to Agreement No. C2020-174 to facilitate Council’s future consideration of a Development Agreement for that Property.

DISCUSSION:

On June 23, 2020, the City Council authorized the City Manager to execute a Purchase and Sale Agreement between the City and Napa Parkway Plaza, LLC. for the surface parking lot on the north side of the Kohl’s Department Store in downtown Napa. Zapolski Real Estate (ZRE) is the ownership group of Napa Parkway Plaza. Since that time, ZRE experienced several COVID related delays with its potential development partners and approximately four months ago ZRE sold its interest in the properties encompassing Kohl’s, and others around and adjacent to Kohl’s which comprised the project area, to Coombs Street LLC. The new owners are also experienced California developers that wish to pursue completing ZRE’s vision.

The project proposes to create a mixed-use development consisting of: up to 270 residential rental CITY OF NAPA Printed on 7/21/2022Page 1 of 4
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EXHIBIT D

File #: 276-2022, Version: 1
The project proposes to create a mixed-use development consisting of: up to 270 residential rental units, of which approximately 15% of the final unit count would be constructed on site or offsite and dedicated for income levels up to 120% of Area Median Income; up to 35,000 square feet of ground- floor commercial space; and up to a 210 room upper-scale hotel, all subject to final Design Review. To accomplish this project, ZRE proposed, and now Coombs Street LLC proposes to purchase the City-owned surface parking lot/vacant bus station at the southeast corner of Pearl and Coombs Streets subject to the terms and conditions of the approved Purchase and Sale Agreement. By including the City-owned land within the project footprint, currently called First Street Napa Phase II (“Project”), the developer could locate buildings to create a pedestrian plaza/walkway that continues what has been established in the existing center, connecting both projects with the 9/11 Memorial Park and providing visibility into the center from Main Street. It is also developer’s intention to have the new buildings sited in a way to meaningfully engage and better define the existing pedestrian environment along Napa Creek and the old Brown Street right- of-way. The developer proposes to do this by connecting newly created public spaces within the development to these features.

Coombs Street LLC has agreed to assume all of the obligations of the Purchase and Sale Agreement. However, in order to do so per the terms of the Purchase and Sale Agreement the City must consent to assign the Agreement to Coombs Street LLC and in order to complete the Development Agreement and other related obligations the City must extend the internal timeframe to allow sufficient time for Coombs Street LLC to complete the work. We estimate the completion of this work will occur in less than 12 months.

Kohl’s and Parking
ZRE previously, and now Coombs Street LLC has been working with Kohl’s on a plan to relocate the use to recently approved Soscol Gateway Plaza. Relocation would require early termination of Kohl’s lease in its current location, an action that is also supported by Coombs Street LLC.

As long as the Kohl’s building is used as a department store (through the year 2031), the City is obligated by License Agreement to provide a designated number of non-exclusive parking spaces for use by the building. If Kohl’s voluntary terminates its lease, the City could negotiate terms by which the City would be relieved of its obligations under the license agreement and essentially “free-up” the surface parking lot for development of the proposed Project.

The specifics about total number of parking spaces to be provided in the future Project have not yet been worked through. Under the terms of the attached draft First Amendment to Purchase and Sale Agreement (“PSA”), the property transfer does not close unless the City and Coombs Street LLC successfully negotiate a Development Agreement which will more particularly define the elements of the proposed Project. The Development Agreement will define Coombs Street LLC’s obligations to address parking in a manner sufficient to mitigate impacts generated by the Project and replace public parking lost at the existing surface parking lot, taking into consideration credit to Coombs Street LLC for existing parking available to the existing uses on the site. It is anticipated that the parking solution for the Project will be a combination of subsurface/structured parking and surface parking.

Purchase and Sale Agreement and First Amendment to the Agreement An appraisal for the Subject Parcel determined the fair market value of $870,000, and that remains the proposed purchase price in the First Amendment to the Purchase and Sale Agreement (“PSA”).

The close of escrow also remains unchanged from the original agreement and is conditioned on CITY OF NAPA Printed on 7/21/2022Page 2 of 4
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EXHIBIT D

File #: 276-2022, Version: 1
The close of escrow also remains unchanged from the original agreement and is conditioned on the execution of the DA and issuance of building permits for the Project, with an outside closing date of December 31, 2035, which if necessary, may be extended by the City Manager for up to two years based on the Developer’s good faith efforts. However, in order to complete the Development Agreement and other related obligations the City must extend the internal timeframe to allow sufficient time for Coombs Street LLC to complete the work which is estimated to occur in less than 12 months.

Staff notes that the Development Agreement will document vested rights for the First Street Napa Plaza II Project and will be processed for approval concurrently with the development application.

Project design, use, intensity, maximum height and floor area, timing of construction, parking quantities and location, compliance with CEQA, and related matters will all be addressed through the DA and entitlement process.

Public Benefits
At this initial stage, the public benefits of the proposed Project are namely replacing a large footprint use in downtown with new residential development, commercial square footage and an upper-scale hotel. The added sales taxes, transient occupancy taxes, improved physical building layout which better connects the existing First Street Napa Plaza, and a better connection with the surface parking and Main Street, are all improvements that will benefit the City in the long term. In addition, adding residential uses in the downtown should have an indirect positive impact on both new and existing retail, food and beverage uses. Finally, as a component of the currently proposed Project, the public spaces provided as part of the future development would support and enhance the currently underutilized public spaces along Napa Creek, Brown Street pedestrian corridor and the 911 Memorial Park.

City Staff recommends that the City Council authorize the City Manager to finalize and execute the proposed First Amendment to the Purchase and Sale Agreement in substantial conformance with the terms summarized in this Staff Report and more particularly described in Attachment 1.

FINANCIAL IMPACTS:

The City will receive approximately $870,000 from the Buyer for the purchase of the property upon close of escrow.

CEQA:

The Community Development Director has determined that the Recommended Action described in this Agenda Report is not in-and-of-itself a “project” (pursuant to CEQA Guidelines Section 15378) since it does not commit the City to a physical change in the environment. However, the Recommended Action is part of a larger “project” that will be subject to environmental review in accordance with CEQA at the “earliest feasible time” prior to “approval” consistent with CEQA Guidelines Sections 15004 and 15352. The larger “project” is the anticipated First Street Napa Plaza II (as described above) on the Subject Parcel, following close of escrow for sale of the property. The environmental review will be completed in accordance with CEQA prior to the City’s approval of the Development Agreement described in this report, and prior to approval of any permits associated with the anticipated renovation.

DOCUMENTS ATTACHED:

ATCH 1 - Resolution
CITY OF NAPA Printed on 7/21/2022Page 3 of 4
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EXHIBIT D

File #: 276-2022, Version: 1

ATCH 2 - Assignment of Purchase and Sale Agreement

ATCH 3 - First Amendment to Purchase and Sale Agreement NOTIFICATION:

Coombs Street LLC was notified of this meeting.

CITY OF NAPA Printed on 7/21/2022Page 4 of 4
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EXHIBIT D

EXHIBIT D

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EXHIBIT D

1 California Street - Suite 3050
San Francisco, California 94111-5432
voice 415.655.8100 - fax 415.655.8099
www.bwslaw.com
Direct No.: 415.655.8114
[email protected]
Los Angeles – Inland Empire – Marin County – Oakland – Orange County – Palm Desert – San Diego – San Francisco – Silicon Valley – Ventura County April 14, 2023
Imaez Wahid
Housing Specialist I, Housing Policy Development
California Department of Housing and Community Development 2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833

VIA EMAIL: [email protected]

Re: Additional Information In Support of City of Napa Surplus Land Act Exemption Dear Mr. Wahid:

We are writing to follow up on our series of discussions regarding the City of Napa’s (“City”) actions to comply with the Surplus Land Act in connection with the City’s planned disposition of Parcels 003-166-008 and 003-166-011 (the “Parking Property”) to Coombs Street LLC (“Developer”).

As previously discussed with you, the City and the Developer intend to use the Parking Property to create new infill housing, open space, and commercial development as part of a larger redevelopment effort in the area, the First Street Napa Phase II housing and mixed-use redevelopment, which is only possible if the Developer terminates its rights to use the Parking Property. Dating back to 2014, the City had designated the Parking Property and the surrounding area within the “Town Center Focus Area” as a key component of the City’s Downtown Napa Specific Plan.

Reactivating the Town Center Focus Area is one of the Downtown Napa Specific Plan’s main goals.

In its analysis and negotiations with the Developer, the City found that the incorporation of the Parking Property into the First Street Napa Phase II redevelopment would facilitate more overall housing units in the Town Center Focus Area than development of the Parking Property separate from the remainder of the First Street Napa Phase II redevelopment.

Incorporation of the Parking Property also would facilitate housing sooner, because the Developer would allow the City to be released from the License Agreement prior to 2031, removing the valid legal restriction that would otherwise prevent housing

EXHIBIT D

Imaez Wahid
April 14, 2023

production on the Parking Property for years. To ensure the City’s proposed exempt surplus land sale of the Parking Property results in built, infill housing the City required Developer to enter into a Development Agreement with the City that provides for affordable and market rate for rent residential units, among other things, before title can transfer to Developer. The City’s approach to the Parking Property is consistent with State of California policy to promote safe, affordable homes and vibrant, inclusive, sustainable communities so that California residents can live, work, and play in healthy communities of opportunity.

The City has reviewed internal records and the Surplus Land Act’s legislative history. For the reasons discussed in Attachment A to this letter, we continue to believe that disposition of the Parking Property to the Developer is properly characterized as “exempt surplus land,” which complies with both the Surplus Land Act’s textual requirements and advances the Act’s goal of increasing affordable housing production in the City. We ask that the Department of Housing and Community Development (“HCD”) review our additional documentation and confirm its interpretation.

In addition, the City and Developer have begun discussions regarding a second City-owned property known as Dwight Murray Plaza, located on First Street between Main Street and Coombs Street (Parcel 003-166-017, the “Plaza Property”). The Plaza Property suffers from deferred maintenance, lacks sufficient ADA access, and is underutilized as a public amenity. The Developer controls a comparable amount of property that can be used for the City’s purposes to create new public open space and amenities integrated into the First Street Napa Phase II redevelopment site (a portion of Parcel 003-166-010, the “Exchange Property”).

Creating a new public plaza on the Exchange Property would serve the City’s purposes not only by creating a new plaza within the public realm, but it would also enhance public circulation and integrate the City’s existing 9/11 Memorial Garden as a place of public remembrance and education. Although it is not directly related to the transaction’s ability to qualify for a Surplus Land Act exemption, we also note that in consideration for the disposition of the Plaza Property in exchange for the Exchange Property, the Developer would provide financing to the First United Methodist Church of Napa to facilitate the development of a new affordable housing development that would otherwise lack resources to commence the development process. Additional details regarding this component of the transaction are provided in Attachment B to this letter.

To help visualize the various properties involved, please refer to the figures and information provided in Attachment C to this letter.

EXHIBIT D

Imaez Wahid
April 14, 2023

The opportunity to obtain an interest in the Exchange Property to create a superior public plaza than what currently exists on the Plaza Property, along with the creation of additional feasible housing opportunities as part of the First Street Napa Phase II redevelopment, has led the City to consider declaring the Plaza Property to be exempt surplus land. The Plaza and Exchange Property transaction is consistent with the City’s Downtown Specific Plan and California’s housing policies because it will create a safe and inviting city center that has consistent design elements and it will connect interlinked public and private spaces, inviting the public to interact, gather and dwell in the location of the current Plaza Property.

Accordingly, the City proposes to declare the Plaza Property as “exempt surplus land” based on the fact that it will be exchanged for an interest in the Exchange Property, which will be devoted to the City’s use as a public plaza. We ask that HCD confirm the transaction’s eligibility for this determination before the City adopts a declaration that the Plaza Property is exempt surplus land. After receiving HCD’s acknowledgement, City staff will then recommend that the City Council adopt written findings consistent with this letter that the City would provide to HCD in advance of any disposition.

Together, the disposition of the Parking Property and the Plaza Property to the Developer will directly lead to increased housing production – including new affordable housing units – in furtherance of the City’s goals and policies expressed in the Downtown Napa Specific Plan. Accordingly, we hope that HCD agrees with the City’s analysis attached. We look forward to continuing to work with you as the City determines how to best proceed toward its goal of increasing the City’s housing supply.

Very truly yours,
Eric S. Phillips

cc: Laura Nunn, Senior Manager, HCD
Stephen Byers, Attorney, HCD
Vin Smith, Community Development Director, City of Napa Michael Barrett, City Attorney, City of Napa

EXHIBIT D

A-
1 Attachment A
Supplemental Analysis Regarding Parking Property
The first contemplated transaction is the sale of the Parking Property (Parcel Numbers 003-166-008 and 003-166-011), currently owned by the City, to the Developer. The Parking Property has been the subject of multiple meetings and correspondence between the City and HCD; the details of the transaction are explained in the City’s letters to HCD dated October 27, 2022 and December 5, 2022.

In brief, the Parking Property is subject to a License Agreement effective February 1, 2000 (the “License Agreement”) that restricts use of the Parking Property.

Under the terms of the parking License Agreement, the City must provide at least 317 paved parking spaces for the nonexclusive use of the Kohl’s customers until 2031. (License Agreement §§ 1.1, 4.) The City may remove surface parking spaces if it replaces them at a 2:1 ratio in a parking structure, though doing so would be cost prohibitive for the City. (License Agreement § 1.1(c).) Further, the City is prohibited from “authoriz[ing] the construction of buildings or structure[s] on the surface parking area.” (License Agreement § 3.) The City may not voluntarily withdraw from the agreement without the Developer’s consent (License Agreement § 4; the Developer is the successor-in-interest to the License Agreement’s benefits) and the agreement is binding on any future owner of the Parking Property. (License Agreement § 16.) Accordingly, the City and any future owner of the Parking Property would be prohibited from building housing on the Property until at least 2031 unless the Developer terminates the License Agreement. Therefore, the Parking Property is “exempt surplus land” because it “is subject to valid legal restrictions that are not imposed by the local agency and that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. . .” (Gov.

Code § 54221(f)(1)(G).)
During our December 1, 2022 meeting, HCD expressed concern that the City had not made findings declaring the Parking Property to be “exempt surplus land” before proceeding with a Purchase and Sale Agreement with the Developer. We reviewed the City’s records and the staff report that was sent to the City Council on June 23, 2020. The staff report describes the License Agreement as obligating the City to maintain the surface parking through at least 2031
1 unless and until the Developer
agrees to terminate the License Agreement. This is consistent with Resolution R2022- 069, where the Council formally declared the Parking Property to be exempt surplus land based on the exemption for valid legal restrictions included in Gov. Code § 54221(f)(1)(G). The staff report and Resolution show that in 2020, the city was aware of the 2019 Surplus Land Act amendments and that it took efforts to comply. We note that HCD’s Surplus Land Act Guidelines, which require the City to provide a copy of its findings to HCD, were not published until April of 2021, nearly a year after the City 1 Note that the staff report used “2041” as the expiration date in some portions of its analysis, based on the assumption that License Agreement Section 4’s expiration date of 2031 may be extended.

EXHIBIT D

Attachment A
A-2
approved the Purchase and Sale Agreement. Therefore, there is no reason to think that the City was attempting to evade its obligations under the Surplus Land Act.

During our December 1, 2022 meeting, HCD also shared its view that the State Legislature intended the “valid legal restriction” exemption to apply only to limited circumstances where there are voter-enacted or state and federal restrictions on the use of the land. We reviewed the 1,858 pages of official legislative history on the Surplus Land Act’s 2019 amendments, and we do not agree that the history supports this narrow interpretation.

The legislative history includes various legislative hearing reports (e.g. Summary of April 10, 2019 hearing, p. 339 of 1858 of Official Legislative History) that say the 2019 amendments expand the definition of “exempt surplus land” to include “surplus land that is subject to legal restrictions that would make housing prohibited or incompatible on the site due to state or federal statutes, voter-approved measures, or other legal restrictions that are not imposed by the local agency.” (emphasis added.) This suggests that “other legal restrictions” in addition to voter-approved measures and state or federal statutes can provide a basis for the valid legal restriction exemption. The legislative history also clarifies that “existing zoning alone is not a legal restriction that would make housing prohibited or incompatible.”
Here, the License Agreement is not a zoning restriction. Unlike a zoning restriction, which the City could reverse through legislation, the City has no authority to modify or terminate the License Agreement, which exists wholly for the Developer’s benefit. The License Agreement imposes certain restrictions upon the use of the Parking Property that the City cannot violate or modify without third party actions.

In whole, the 2019 Amendments to the Surplus Land Act were intended to thwart cities from attempting to avoid the requirements of the 2014 changes to the Act. (June 26, 2019 Hearing of the Senate Committee on Governance and Finance, p. 804 of 1858 of complete legislative history.) As we emphasized during our December 1, 2022 meeting, the City has taken actions that it believes are fully consistent with both the letter and the spirit of the Surplus Land Act. None of its approval actions to date have been made in an effort to evade its legal responsibilities. The City of Napa’s interest is in reaching a result that will maximize the development potential of the Parking Property and the adjacent land to provide as much new housing as possible. A finding that the Property is not exempt surplus land will prevent any housing from being developed, while a finding that the Property is exempt surplus land will allow a mix of market rate and affordable housing.

EXHIBIT D

B-1
Attachment B
Discussion of Plaza Property Exchange
The second transaction (“Second Transaction”) would be the exchange of the Plaza Property on which Dwight Murray Plaza is located (APN 003-166-017) for interests in the Exchange Property (a portion of APN 003-166-010). The second transaction would facilitate a redevelopment design that is pedestrian-friendly and harmonious with the historical city grid. Through this transaction, Developer would acquire a fee simple interest in the Dwight Murray Plaza property (approximately 0.18 acres) in exchange for Developer’s conveyance of an easement or similar public rights on and over the future improved pedestrian plaza that will be 0.18 acres or larger. The improved property interests conveyed to the City would be higher quality and have a greater value than the Dwight Murray Plaza property as it currently exists. The inclusion of the Dwight Murray Plaza parcel would also result in a far superior development project as a whole.

This exchange would allow for the provision of the following community benefits, which would not be possible without the exchange:

 New Vibrant Relocated Public Plaza. Developer will create a new, ADA- compliant plaza equal to or greater than the size of the existing plaza. The new plaza will be roughly aligned with the former Clay Street right-of-way and ensure future design of the former plaza will incorporate aspects which embrace First Street activation and gathering opportunities.
 Maintain a Gathering Place on First Street. The project will maintain a gathering place on the First Street frontage that will include outdoor café seating and pedestrian friendly building frontages that invite the public to gather in the location of the current Dwight Murray Plaza street frontage.  Restore Pedestrian Corridors and Historic Grid. Interior pedestrian corridors along Brown Street and bisecting the proposed new buildings (former Clay Street right-of-way “Paseo”) will be renovated and developed with amenities that add to Downtown’s unique environment where the community comes together to enjoy a vibrant collection of inviting public spaces, attractive streets, distinctive shops and eateries, exciting entertainment venues, creative public art, historic buildings, sustainable new buildings and an array of housing options. Additionally, the Developer will convey an easement or similar public right on and over the future improved former Clay Street right-of-way.
 Create New Pedestrian Connections. Restoring the urban fabric and improving the public realm will create the opportunity to add connections across Main Street, connecting the Shops at First Street and the project site to the Opera House, the Oxbow Commons and the Oxbow District without having to cross Soscol Avenue.
 Improve and Incorporate the Napa Creek Corridor. The Napa Creek area will be improved with features such as walkways, seating areas, and creek-edge landscaping and emphasized and activated through programming.

EXHIBIT D

Attachment B
B-2
 Improve and Incorporate the 9/11 Memorial Garden into a Larger Public Space. The existing 9/11 Memorial Garden will be integrated into the improved public realm design.
 Catalyst to Downtown and County Building at the Old Carither’s Site. The well-planned redevelopment of the site should entice adjacent development downtown and along restored grid, including the County’s property across the street from the Plaza property. The restoration of the urban fabric will add life to the Brown Street corridor and compliment Main Street, continue to create/validate the economic viability of downtown investment, and provide significant revenue to the City.

The disposition of the Plaza Property in exchange for an interest in the Exchange Property is exempt from the Surplus Land Act because it involves the exchange of property the City owns but no longer needs for an interest in new property that is necessary for the City’s use. (Gov. Code § 54221(f)(1)(C).) The requirements of the Surplus Land Act do not apply to “surplus land that a local agency is exchanging for another property necessary for the agency’s use.” (Id.) The Second Transaction proposes that the City exchange Dwight Murray Plaza for an easement in a portion of Developer’s property. The interest in this portion of Developer’s property is necessary for the City’s use because the City seeks to provide more public open space in the downtown area, and the property interest the City would receive through the exchange would serve as a community amenity for gathering and passive recreation in a public open space setting.

Both properties are located within the “Town Center Focus Area” of the Downtown Napa Specific Plan. The Plaza Property once offered a prominent gathering area for locals and visitors, but it currently suffers from deferred maintenance and dated design elements. The depressed grade leaves the Plaza Property with insufficient ADA access and which makes redesigning or otherwise upgrading the Plaza Property with public amenities a challenge. Moreover, its location on the periphery of the Focus Area makes it poorly sited to serve as a gathering space, and it fails to connect other public amenities in the area.

The Downtown Napa Specific Plan calls for the City to “improve pedestrian, bicycle and auto circulation through the design of streets, pathways and passageways” and to “encourage gathering places such as plazas and outdoor seating areas in public spaces as well as private development projects.” The Exchange Property would allow the city to meet these public purposes. Specifically, developing a public plaza on the Exchange Property will allow the City to restore the original street grid via a pedestrian connection between First Street and the Napa Creek that would intersect an interior crossing through the heart of the Town Center Focus Area. In addition, the Exchange Property would be adjacent to the City’s existing 9/11 memorial, and the new public access would enhance the visibility and use of this important memorial. These spaces will create new pedestrian linkages to key public amenities while enhancing the public realm.

EXHIBIT D

Attachment B
B-3
In addition to the direct public purposes to which the City will put the Exchange Property, disposition of the Plaza Property will also yield other indirect public benefits.

In combination with the Parking Property and other properties controlled by the Developer, the Developer will be able to create up to 270 new housing units in the Town Center Focus Area. The Developer would also contribute financing to the First United Methodist Church of Napa to facilitate the Church’s proposed development of an affordable housing and workforce development located at the Church’s property nearby in downtown Napa. The creation of the 270 new housing units in the Town Center Focus Area and affordable housing development on the Church’s property would not be feasible without the transactions summarized above, and the City believes that its proposed course of action is the most effective way to use unneeded public property to facilitate housing production in Napa.

EXHIBIT D

Attachment C

EXHIBIT D

WEST ST

NAPA CREEK

MAIN ST

VETERANS

MEMORIAL PARK
NAPA
COUNTY
COURT

HERITAGE
PARK

FIRST STREET

NAPA MALL
OXBOW

RIVERSTAGE
OXBOW
PUBLIC
MARKET

RIVERFRONT

PROMENADE
OPERA
HOUSE
PLAZA

BROWN ST

RANDOLPH ST

FRANKLIN ST
1ST ST

CLAY ST
3RD ST

CLINTON ST

CANYON ST

BROWN ST
2ND ST

PEARL ST

PROJECT PROJECT

SITESITE

COOMBS ST

PHASE I

TOWN CENTER FOCUS AREA

NAPA CREEK

PHASE II

PUBLIC PUBLIC

REALMREALM
First Street Napa Phase II
Redevelopment
Town Center Focus Area:

Reactivating the Heart of the City
DWIGHT
MURRAY
PLAZA
JULY 2022
DRAFT

CONFIDENTIAL

EXHIBIT D

MAIN ST

WEST ST

NAPA CREEK

ARROYO DR

VETERANS

MEMORIAL PARK
NAPA
COUNTY
COURT

HERITAGE
PARK

FIRST STREET

NAPA MALL
OXBOW

RIVERSTAGE
OXBOW
PUBLIC
MARKET

RIVERFRONT

PROMENADE
OPERA
HOUSE
PLAZA

BROWN STREET CORRIDOR

NAPA RIVER

COOMBS ST

RANDOLPH ST

FRANKLIN ST
1ST ST
3RD ST

CLAY ST
3RD ST

CLINTON ST

CANYON ST

BROWN ST
2ND ST

PEARL ST

PEDESTRIAN

CORRIDORS
The First Street Napa Phase II Redevelopment’s creative blend of dense residential and commercial uses, plazas and promenades, and natural areas are intended to advance some of the key goals of the Downtown Napa Specific Plan:
• Create a Downtown Napa Civic Center: The project’s key goals will help to “make Downtown Napa an inviting and friendly place to live, work and visit” (52).

• Develop an Active, Connected, and Safe Public Realm: The project will balance building development with “a human-scale, pedestrian-friendly environment that is inviting to residents and visitors” (52). This will be accomplished by “[creating] linkages to and between public gathering places, parks and the Napa River for people to explore Downtown” (53), including connections to Oxbow Commons, Riverstage, and Public Market; developing “public improvements further the goal of a safe and inviting Downtown” (91); designing “larger developments that [groups] retail, hotel, multi-unit residential and/or office buildings to shape distinct and memorable open space(s), that are accessible to the public” (97); and incorporating “special building forms (i.e., towers) and site improvements (i.e., fountains or sculpture) . . . to help organize and accent spaces by framing entrances, terminating views and highlighting central focal points” (97).
• Integrate Mixed Use Development: The project will create opportunities for a mix of residential, commercial, and hotel uses. This range of uses will “promote Downtown Napa as a key area for mixed-use development, including a range of housing options and densities” (52) and concentrate “activity-generating uses in the core area of Downtown, including retail shops, offices, commercial services, restaurants and entertainment venues” (53).

• Promote Quality Design: Buildings and open spaces throughout the First Street Development will be designed to a high quality and “[developed with] unique structures that complement their surroundings, orienting buildings and entrances to streets and public gathering places” (53).

EMBRACING THE

DOWNTOWN FABRIC

MAIN ST
1ST ST
0 100’ 200’ 400’

PHASE I

TOWN CENTER FOCUS AREA

PHASE II
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FIRST STREET NAPA PHASE II REDEVELOPMENT
Neighborhood Context
DWIGHT
MURRAY
PLAZA

PROJECT PROJECT

SITESITE

NAPA CREEK

PUBLICPUBLIC

REALMREALM
2 EXHIBIT D

SPECIFIC PLAN

TOWN CENTER FOCUS AREA
The First Street Napa Phase II Redevelopment is located within the Downtown Napa Specific Plan’s Town Center Focus Area. This focus area supports achieving one of the key goals of the Specific Plan, which is to “designate the Downtown core as the location for Downtown’s retail activities, supported by retail, service, office and residential opportunities bordering the core in a mixed-use designation” (53).

The approximately 14 acre Town Center Focus Area is located near the center of Downtown. It is the commercial “heart” of the city, bounded to the east by Main Street, to the south by First Street, to the west by Franklin Street and to the north by Clay and Pearl streets (see Figure 4.5: Town Center Focus Area). The majority of the area is comprised of the Napa Town Center and the Kohl’s development, a retail center located on several consolidated blocks. The area also includes commercial uses, surface and structured parking, two public plazas, surrounding street frontages, and a portion of Napa Creek. All of these uses can be addressed and reconfigured to activate downtown.

This Project aims to achieve a number of the specific objectives for the Town Center Focus Area, which in turn achieve the vision of the Specific Plan, including:
• “[Improving] pedestrian, bicycle and auto circulation through the design of streets, pathways and passageways” (82).
• “[Promoting] mixed-use development throughout the area, with retail emphasis on ground floors to activate building edges and housing and/or office above.

This site represents the best opportunity for density and height in Downtown” (82).
• “[Encouraging] gathering places such as plazas and outdoor seating areas in public spaces as well as private development projects” (82). • “[Emphasizing] Napa Creek as an amenity by orienting development toward it and establishing greenways along its edge” (82).
• “[Reactivating] Brown Street as public space that supports pedestrian and bicycle activity” (82).
• “[Providing] space for a 9-11 memorial” (82).

JULY 2022 | 6

FIRST STREET NAPA PHASE II REDEVELOPMENT
Town Center Focus Area (Figure 4.5, 83)
Downtown Napa Specific Plan Focus Areas (80)
First Street
Napa Mall Entry
3 EXHIBIT D

KOHL’S

DEPARTMENT
STORE
NAPA

FIREFIGHTERS
MUSEUM

FIRST STREET

NAPA MALL
DWIGHT
MURRAY
PLAZA

BROWN STREET CORRIDOR PARKWAY MALL

STARBUCKS
9/11

MEMORIAL
GARDEN

DON PERICO

MEXICAN

RESTAURANT
MAIN ST.

COOMBS ST.

NAPA COUNTY

OFFICES
NAPA
VALLEY
OPERA
HOUSE

EXISTING

PARKING
APPROX.
50 STALLS

EXISTING
CITY

PARKING
APPROX.
23 STALLS
PEARL
STREET
GARAGE

EXISTING
CITY

PARKING
APPROX.
36 STALLS
GORDON

BUILDING
MAIN ST.
1ST ST. 1ST ST.
0 50’ 100’ 200’
NAPA
CREEK

EXISTING SITE

CONDITIONS AND OPPORTUNITIES
Key Elements:
• Kohl’s Department Store: The large-format Kohl’s Department Store is the primary building dominating the site. Kohl’s intends to relocate their store to a more traditional location in the City and this building will be demolished and replaced with new structures as a key project redevelopment strategy. • Gordon Building: This historic downtown building on the corner of Coombs and First Street offers a prominent street frontage and the owners have done a spectacular job of preserving and revitalizing the building. The bottom level is currently occupied by Anthropology.
• Restaurants & Cafes: The area includes various dining opportunities, including three restaurants fronting Dwight Murray Plaza (Don Perico Mexican Restaurant, Jax Diner, and Napa Noodles), Allegria Restaurant along the Brown Street Corridor, and Starbucks on the corner of Main and First Streets. • Dwight Murray Plaza: This plaza once o ffered a prominent gathering area for locals and visitors, but has since lost its luster. The tired plaza has an unusual depressed grade change in the center with insufficient ADA access, and an unsightly former rock fountain. Rideshare drop-off has also created periodic congestion and circulation issues on First Street.
• Brown Street Corridor & Parkway Mall: Connected to the Dwight Murray Plaza is the Brown Street Corridor and Parkway Mall, which include amenities such as mature shade trees and outdoor dining areas. These mid-block passages increase urban fabric permeability and pedestrian access opportunities. • 9/11 Memorial Garden: The existing 9/11 Memorial Garden is somewhat isolated from the pedestrian corridors and will be better integraded into the improved public realm design.
• Napa Creek: The Napa Creek corridor transects the northern corner of the site and offers green space connection to areas such as Heritage Park, Napa Riverfront Promenade, and the Oxbow Riverstage.
• Parking Lots & Garages: The proposed project area includes over 100 parking stalls in 3 surface parking lots. The nearby Pearl Street Garage offers additional parking opportunities to visitors.
• Nearby Amenities: Other nearby amenities include civic institutions—such as the Napa County Historical Society, the Napa Valley Opera House, and Napa County Offices—as well as prominent retail o fferings and restaurants within the First Street corridor and along nearby streets.

ALLEGRIA

RESTAURANT
NAPA

NOODLES
JAX
DINER
MIYAMO
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FIRST STREET NAPA PHASE II REDEVELOPMENT

PROPOSED PROJECT SITE

PROPOSED PROJECT

PUBLIC REALM

PROPOSED ENHANCED

PEDESTRIAN CONNECTIONS

EXISTING MAIN VEHICULAR

THOROUGHFARES

EXISTING PEDESTRIAN

CORRIDORS

EXISTING PARKING AREAS
4 EXHIBIT D

STARBUCKS

ALLEGRIA

RESTAURANT
GORDON

BUILDING

MAIN STREET

PEARL STREET

COOMBS STREET
1ST STREET

FIRST STREET NAPA MALL

PROPOSED

BUILDING
0 30’ 60’ 120’

PROPOSED

STREET TREES
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FIRST STREET NAPA PHASE II REDEVELOPMENT

CONCEPTUAL PROJECT VISION

PROJECT SITE

PROJECT

PUBLIC REALM

PROPOSED
PLAZA

INTEGRATED EXISTING
9/11 MEMORIAL

PROPOSED

COURTYARD

POTENTIAL

IMPROVED NAPA

CREEK CORRIDOR

EXISTING CITY

PARKING LOT TO
REMAIN

PROPOSED

BUILDING

REDESIGNED

PARKING LOT

RENOVATED BROWN STREET PEDESTRIAN CORRIDOR

RESTORED GRID

PROPOSED

INTERIOR

PEDESTRIAN

CORRIDOR

RESTORED GRID
5 EXHIBIT D

The project’s public realm will create an “attractive and inviting public realm” (109) with “tree-lined, pedestrian-oriented walking streets and outdoor plazas with numerous gathering spaces, outdoor cafes and seating areas, and unique design elements” (109). The site design will emphasize a careful balance between buildings and the public realm with “open spaces, walkways and alleys to break up building mass, allow access through developments and create visual breaks” (95).

Key Elements:
• Renovated Brown Street Pedestrian Corridor: The Brown Street Pedestrian Corridor will be renovated with an improved hardscape and landscape design, seating areas, and vendor areas. This aligns the Downtown Napa Specific Plan goal of “[enhancing] and [maintaining] the North and South Brown Street Plazas as part of the overall pedestrian and bicycle circulation system” and creating an area “to serve as a plaza/community gathering space in conjunction with Dwight Murray Plaza” (125).
• Proposed Interior Pedestrian Corridor: The Proposed Interior Pedestrian Corridor will bisect the interior part of the project site and provide multiple access points to buildings, a direct pedestrian walkway from the First Street Napa Mall, and more general pedestrian connection route through downtown.

This corridor will feature hardscape and landscape design, seating areas, and vendor areas integrated into the Brown Street Pedestrian Corridor. • Potential Napa Creek Corridor Improvement: The Napa Creek corridor could be improved with features such as walkways, seating areas, and landscaping appropriate for the creek edge environment. Buildings and the public realm will be oriented towards Napa Creek with service areas purposefully located in areas not adjacent to the park (94).

JULY 2022 | 13

FIRST STREET NAPA PHASE II REDEVELOPMENT

PROJECT VISION

PUBLIC REALM
Proposed Streetscape Plan (Figure 5.2, 110)

PROJECT BLOCK
6 EXHIBIT D

• Integrated Existing 9/11 Memorial: The 9/11 Memorial sculpture will be better integrated into the proposed public realm by improving access from the surrounding plazas and pedestrian corridors.

• Seating in Alcoves, Arcades, Setbacks, and Edge Areas: Building alcoves, arcades, and setbacks as well as public realm edge areas will be activated with seating and furniture to create a lively public realm. These areas will offer “a range of seating area options, allowing for both large group socializing and more intimate, quiet contemplation” (125). The seating areas will be balanced with “adequate space for pedestrian movement and activity” (99), specifically “a clear pedestrian zone of at least five feet, unobstructed by seating, displays or activity areas” (112).

• Hardscape and Landscape Materials: Throughout the public realm hardscapes will incorporate “special paving materials such as pavers, scored concrete, stone or other accent materials” (125) and be complemented with landscaping that “[creates] character and provide pedestrian scale” (125) with “trees and landscaping to provide shade and visual relief” (125).

Key Elements, continued:

JULY 2022 | 14

FIRST STREET NAPA PHASE II REDEVELOPMENT

PROJECT VISION

PUBLIC REALM
7 EXHIBIT D

Key Elements:
•
Overall Material Quality: Selected building materials should be of high-quality, pr
ovide visual interest, and “suggest durability and permanence to last into the futur
e” (103). Building “trim and metalwork [may] be related to the building ar
chitecture” (103).
•
Overall Façade Design: The proposed building designs will strive to create a “human scale” envir
onment and enliven facades with “projecting elements
such as entr
ance porches, porticoes, canopies, awnings and trellises” (100); r
ecessed entries to develop small alcoves (101); complete commercial st
orefronts with details including “doors, display windows, bulkheads, signage ar
eas and awnings” (101); expressive elements such as “cornices, lintels, sills, balconies” (101); and w
ell-designed upper level features such as “balconies and bay windows” (102).
•
Rear & Side Facades: The site design/emdash.casewith mid-block pedestrian passages/emdash.case will help create a context with most building facades being visible to the public r
ealm. Building designs can accommodate this layout by developing rear and side f
acades that are “still be pleasant and inviting”.
•
Windows: Building design should “maximize transparent windows on all sides o
f building” and create unobstructed views into interior spaces (102). Ground- floor commercial areas may feature “display windows to enliven the street and pr
ovide pedestrian views into the interior of the storefront” (101); to the extent f
easible, these areas should have “floor to ceiling windows” (102). Window design s
hould prioritize “clear or lightly tinted glass on ground floor building f
açades that preserves transparency” and avoid “opaque, reflective or dark tinted glass” (103).

JULY 2022 | 19

FIRST STREET NAPA PHASE II REDEVELOPMENT

PROJECT VISION

BUILDING FACADE AND MATERIALS
Example Building Facade Elements (100)
8 EXHIBIT D