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1 EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT
(Nystrom Village)
THIS EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT (this " Agreement") is entered into effective as of _____________, 2022 (“Effective Date”) by and among the Housing Authority of the City of Richmond, a public body, corporate and politic (" RHA"), McCormack Baron Salazar, Inc., a Missouri corporation (“ McCormack”), and Richmond Neighborhood Housing Services, a California nonprofit public benefit corporatio n (“RNHS” and together with McCormack, the "Developer"). RHA, McCormack, and RNHS are collectively referred to herein as the "Parties."
RECITALS
A. RHA is a public housing authority formed pursuant to Section 34200 et seq. of the California Health and Safety Code and governed by certain regulations promulgate d by the U.S.
Department of Housing and Urban Development ("HUD").
B. RHA is the fee owner of the real property located in the City of Richmond, Contra Costa County, California consisting of the approximately nine (9) acre, four -block area bounded by Florida and Virginia Avenues and by South 13th and South 16th Streets, and the improvements thereon including 100 units of public housing consisting of 51 woodframe duplexes built in 1941.
The Property is depicted in Exhibit A , and consists of the following: Contra Costa County Assessor’s Parcel Nos : 544 -132-001 (“Block A”) , 544-111-001 (“Block B” ), 544 -112-001 (“Block C”) , and 544 -113-001 (“Block D”) (as more particularly described in Exhibit A , collectively, the “Property”).
C. Developer proposes to ground lease Block A and Block B for the development of affordable rental housing and purchase Blocks C and D for development of for -sale moderate- income and workforce housing (all of the foregoing, collectively, the "Development"). As of the date of this Agreement, and subject to availability of financing, Developer contemplates that the Development will include the following elements: (i) rehabilitation of at least three (3) of the existing original duplexes consistent with applicable regulations pertaining to historic preservation, (ii) demolition of the remainder of the existing residential units, (iii) construction of 100 multifamily rental units on Block A or B that will serve as replacement housing for the existing public housing units and that will be affordable to very low-income households, (iv) construction of approximately 100 workforce multifamily rental units on Block A or B, and (v) construction of approximately 90 moderate-income for-sale units on Blocks C and D. The Development will be undertaken in a series of separately financed phases (each, a “Phase”). Each Phase will be subject to a separate Ground Lease or Disposition and Development Agreement between RHA and the to- be-formed entity that will be the ground lessee or owner of the portion of the Property applicable to such Phase (each an “Owner Entity”).
D. On September 21, 2021, after a competitive selection process that began with the issuance of a Request for Proposals on April 20, 2020 ("RFP"), Developer was selected by the Richmond Housing Authority Board of Commissioners (" Commission") to enter into exclusive ERNA – Nystrom Village
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2 negotiations consistent with the terms of this Agreement regarding the terms and conditions of an agreement or agreements governing the disposition and development of the Property (collectively, the “Master Development Agreement” or "MDA") pursuant to which Developer would acquire leasehold and fee interests in applicable portions of the Property, and develop and operate the Development. As described in Developer’s response to the RFP, in addition to Developer, the proposed development team will include the following: Mithun for architectural services, McCormack Baron Management, Inc. for property management services, Urban Strategies, Inc. and Strategic Partners I for community support and community engagement services, Hood Design Studios for landscape architecture, and Baines Group, Inc. as construction workforce consultant.
E. The purpose of this Agreement is to set forth the agree ment of the Parties to: (i) determine the financial feasibility of developing the Property; (ii) seek funds to finance development of the Property; (iii) establish the tasks and schedule that will be undertaken during the Exclusive Period to position the Developer to apply for financing and land use and regulatory approvals for the Development; and (iv) establish a timeframe for the negotiation of the MDA.
F. The Property is currently operated by RHA as public housing, and is subject to requirements contained in a Declaration of Trust benefiting HUD and an Annual Contributions Contract ("ACC"). For the Development to occur, RHA must seek disposition approval from HUD in accordance with Section 18 of the 1937 Housing Act, 24 CFR part 970 and PIH Notice 2018 -
04. NOW THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
1. Incorporation of Recitals . The Parties each acknowledge the truth of the foregoing Recitals which are hereby incorporated into this Agreement.
2. Exclusive Negotiation Period. RHA and Developer agree to negotiate the terms and conditions of the MDA exclusively with each other during the ninety (90) day period commencing on the Effective Date (as such may be extended pursuant to this Section, the "Exclusive Period"). Provided that the Parties are continuing to negotiate the MDA in good faith, the term of this Agreement may be extended for two (2) periods of thirty (30) days each if mutually agreed upon by the Parties. During the Exclusive Period, each Party will cooperate and in good faith endeavor to negotiate the MDA setting forth the respective duties, obligations and rights of Developer and RHA. RHA agrees that during the Exclusive Period it will not offer, or negotiate with any other person or entity relating to the use, leasing, acquisition, disposition, or development of the Property without the prior written consent of Developer. The Parties each acknowledge that this Agreement does not impose a binding obligation on RHA to convey or lease any portion of, or interest in, the Property, nor does it obligate RHA or the City of Richmond (“City”) to grant any approvals or authorizations required for the Development. Without limiting the generality of the foregoing, Developer expressly acknowledges that any agreement resulting from the negotiations contemplated hereby shall become effective only if the agreement is approved by the ERNA – Nystrom Village
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3 Commission following compliance with all applicable notice and hearing requirements and compliance with all other requirements of law, including without limitation the California Environmental Quality Act (“CEQA”) and if applicable, the National Environmental Policy Act (“NEPA”).
3. Investigation. Developer agrees that during the Exclusive Period, and continuing through an initial period to be established in the MDA (the " Due Diligence Period "), Developer will conduct its initial due diligence review regarding the Property (the "Due Diligence Review"). The Due Diligence Review may include, but shall not be limited to, review of certain studies, tests, surveys and other environmental or land use information available regarding the Property. During the Due Diligence Period, with the RHA's consent, Developer shall have the right, at Developer's option, to conduct, at its sole cost and expense, any further investigations that it deems necessary regarding the Property. Developer agrees that any damage resulting from entry or activity upon the Property by Developer or its employees, agents, contractors, or consultants, will be repaired, and the Property will be re stored to its pre -inspection condition. Concurrently with the mutual execution of this Agreement, Developer shall execute and deliver to RHA a right of entry and release of liability agreement substantially in the form attached hereto as Exhibit B.
4. Deposit; Predevelopment Expenses. Upon execution of this Agreement, McCormack shall pay to RHA the sum of One Hundred Thousand Dollars ($100,000) which shall be treated as a nonrefundable fee. In Developer’s discretion, such fee may be included as an element of the Development budget, and may be allocated among Phases; however, the fee shall not be applied toward the purchase price or ground rent of the Property, and shall not be applied toward RHA and City expenses as described in paragraph (o) of Section 5 below.
5. Terms and Conditions. RHA and Developer shall in good faith endeavor to negotiate the MDA. The Parties acknowledge that any final MDA and any Implementing Agreement (as defined below) may include terms relating to the conveyance of the Property and the development of the Development that may differ from, or be in addition to, the terms set forth in this Agreement. The Parties intend that the terms, conditions, and provisions of the MDA and such Implementing Agreements shall be controlling. Developer may form a single-purpose, joint venture entity with McCormack and RNHS (or their affiliates) as the sole members , and cause that entity to enter into the MDA (and if applicable, Implementing Agreements , although the parties’ general assumption is that Owner Entities will enter into Implementing Agreements).
As applicable, for purposes of the MDA and Implementing Agreements, such joint venture entity shall serve as the “Developer.” MBA Properties, Inc., a Delaware corporation, shall provide a guaranty of the obligations of such entity under the MDA in form approved by RHA. The MDA and the Implementing Agreements shall include the following terms and provisions:
(a) Term Sheet. The terms and conditions set forth in the Nystrom Village Term Sheet dated September 7, 2021 attached hereto as Exhibit C to this Agreement and incorporated herein by this reference.
(b) AS-IS, Where-Is; Release; Environmental Remediation Indemnity . The Property will be conveyed and leased on a Phase -by-Phase basis in "AS-IS, Where-Is" condition without ERNA – Nystrom Village
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4 any representation or warranties by RHA of the physical or environmental condition or any other aspect of the Property or improvements thereon except as may be expressly s tated in the MDA and/or applicable Implementing Agreement . The MDA will obligate Developer, and the Implementing Agreements will obligate the Owner Entity for the applicable portion of the Property that will be conveyed or leased to such Owner Entity for each Phas e (“ Applicable Parcel”), to release RHA and the Indemnified Parties (defined below) from all liability associated with the physical or environmental condition of the Applicable Parcel. In addition, except as may be expressly stated in the MDA and applicable Implementing Agreement, after the conveyance or lease of the Applicable Parcel at Closing the Implementing Agreements will obligate the Developer and the Owner Entity of the Applicable Parcel to indemnify, defend (with counsel approved by RHA), and hold the Indemnified Parties harmless from and against all Claims (defined below) relating to or arising in connection with the demolition of existing improvements; the removal, transportation, or disposal of hazardous materials; the violation of environmental laws by Developer, Owner Entity, or their respective employees, consultants, contractors, subcontractors, or agents; the failure of any such parties to comply with regulatory agency orders or other remediation requirements relating to site preparation, construction, development, or operation of the Applicable Parcel; or the failure of Developer or as applicable, the Owner Entity of the Applicable Parcel, and their respective employees, consultants, contractors, subcontractors, and agents, to comply with laws pertaining to hazardous materials.
(c) Environmental Remediation. Following the Closing for each Phase of the Development, the Owner Entity for the Applicable Parcel shall be responsible, at such party’s cost, for all environmental remediation required for development of the Applicable Parcel in accordance with the requirements of applicable law and regulatory agencies. If any hazardous material is required to be removed from the site, the Developer or Owner Entity (and not RHA) will be identified as ‘generator’ of the waste in waste manifests or associated documents. Except as may be expressly stated in the MDA and/or applicable Implementing Agreement, neither RHA nor the City shall have any responsibility for payment of costs associated with remediation of the Property or development of the Property. Notwithstanding the foregoing, however, if the Parties are able to secure a substantial source of capital funding for the Development available prior to the closing of a given Phase (such as a Choice Neighborhoods Initiative Implementation grant) then the Parties will seek to use such funding (through a contract between RHA and Developer or its affiliate) to carry out remediation of the Property in order to deliver a “clean and buildable” site at the closing of each Phase.
(d) Prevailing Wage. Developer and the applicable Owner Entity for each Phase shall comply, and shall cause its contractors, subcontractors and agents to comply, with California Labor Code Section 1720 et s eq. and the regulations adopted pursuant thereto, and if required by applicable law, the federal Davis Bacon Act and implementing regulations (all of the foregoing, collectively, “Prevailing Wage Laws”).
(e) Entitlements. Upon timely application by Developer, RHA will help facilitate and cooperate with Developer, within RHA's reasonable authority, in obtaining all entitlements for the Development in a good faith, diligent manner. Developer agrees to pay for the full cost o f all entitlements for the Development which may include services provided by third-party consultants.
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5 (f) Closing Conditions. The close of escrow for the lease and disposition of the applicable portion of the Property for each Phase (“ Closing”) will be contingent upon the satisfaction of certain conditions to be specified in the MDA, including but not limited to receipt of applicable HUD approvals, and Developer’s receipt, and RHA’s approval of: financing commitments including, if applicable the award of tax credits and the allocation of tax -exempt bond authority; loan documents; partnership agreements and related documents; development approvals; environmental clearance; insurance; construction contracts ; performance bonds; building permits; and proper ty management agreements . The MDA will specify that the Development will be developed in Phases and that each Phase may have a different closing date.
(g) Schedule for Developer Performance. The Schedule of Performance shall set deadlines for performance of the respective obligations of the Developer and RHA including, but not limited to, the submission and approval of plans, and approval of title and site conditions, as will be more particularly described in the MDA.
(h) General Indemnity. The MDA and Implementing Agreements shall include general indemnity provision s substantially in the following form (subject to adjustment to reflect final terms regarding relocation responsibilities, if applicable). As used in this Section, “Developer” means the party executing the MDA as “Developer” and the party executing an Implementing Agreement as “Owner Entity”:
Without limiting and in addition to any indemnification obligations of Developer set forth elsewhere in the MDA (or Implementing Agreement, as applicable), Developer shall indemnify, defend (with counsel reasonably acceptable to RHA and the City), protect and hold harmless RHA, the City, and their respective elected and appointed officials, commissioners, officers, employees, agents, consultants, contractors, advisory boards, commissions, and affiliated entities (all of the foregoing, collectively, “Indemnified Parties”) from and against any and all claims, demands, actions, causes of action, proceedings, liabilities, losses, damages, fines, penalties, liens, costs and expenses (including court costs and reasonable attorneys', experts' and consultants' fe es and costs) of any nature whatsoever (all of the foregoing, collectively, " Claims") directly or indirectly arising out of or relating to (a) Developer's lease, ownership, development, occupancy, operation, or management of the Property or the Development, or part thereof, (b) the construction, rehabilitation, and development of the Property or part thereof by Developer or Developer’s contractors, subcontractors, agents, or employees, or (c) Developer's obligations or performance or non -performance under the MDA, the Implementing Agreements, and related documents. The indemnity obligations (but not the duty to defend) under this Section shall not apply to the extent any Claims are finally determined to have been caused by the willful misconduct or gross negligence of RHA or City. Insurance limits shall not operate to limit the indemnity obligations under this Section or in the MDA, the Implementing Agreement, or related documents . The provisions of this Section and all other indemnity obligations of Developer shall survive the expiration or sooner termination of the MDA or applicable Implementing Agreement , and shall remain in full force and effect.
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6 (i) Responsibility Prior to Closing for Applicable Parcels . The MDA shall provide that prior to Closing for conveyance of each Applicable Parcel, RHA will remain responsible for all costs and liabilities associated with the ownership, operation, management and maintenance of the Applicable Parcel.
(j) Land Use Indemnity. The MDA shall have a CEQA/entitlement indemnity provision substantially in the following form, and the Implementing Agreements shall have a substantially similar provision binding the Owner Entity for each Phase:
Developer shall indemnify, defend and hold harmle ss RHA, the City, the City Planning Commission, and their respective elected and appointed officials, commissioners, officers, employees, agents, consultants, contractors, advisory boards, commissions, and affiliated entities from any claim, action or proc eeding (hereinafter "Proceeding") brought against the City or RHA to attack, set aside, void or annul the City or R HA's actions regarding any development or land use permit, application, license, denial, approval or authorization related to the Development , including, but not limited to, variances, use permits, developments plans, specific plans, general plan amendments, zoning amendments, approvals and certifications pursuant to the California Environmental Quality Act, and /or any mitigation monitoring pr ogram, or brought against the City or RHA with respect to the Development, but subject to any exclusions specified in California Government Code Section 66474.9. This indemnification shall include, but not be limited to, damages, fees and/or costs awarded against the City or RHA, if any, and costs of suit, attorneys’ fees and other costs, liabilities and expenses incurred in connection with such proceeding whether incurred by Developer, City, RHA, and/or parties initiating or bringing such Proceeding.
If Developer is required to defend the City or RHA as set forth above, the City and RHA shall retain the right to reasonably approve the counsel selected by Developer who shall defend the City and RHA.
(k) HUD Approvals/Requirements. The Parties shall coopera te in the planning, investigation and communication necessary to prepare and submit to HUD a Section 18 Disposition application for the Development . The Parties acknowledge that HUD's approval is necessary for disposition of the Property, and that HUD sets forth the conditions under which the Property, as a public housing site, may be transferred (as such approval may be amended by HUD, the "Disposition Approval").
(l) Affirmative Action and Section 3 Requirements. Developer shall comply with the Affirmative Action and Section 3 Requirements and MBE/WBE participation policies in accordance with Exhibit D, as such policies may be amended. Developer shall use best efforts to achieve or exceed the following goals on a voluntary basis for construction and non-construction activities: twenty percent (20%) MBE participation; five percent (5%) WBE participation; and twenty-five percent (25%) of all workforce hours to Section 3 residents. During the first ninety (90) calendar days of the Exclusive Period, Developer and RHA will develop a plan for achieving these goals, including a plan for initiating a training program for residents sufficiently in advance of construction to maximize their opportunities to obtain construction jobs; provided, however, that the training and job opportunities in the plan shall in no event be limited to construction jobs.
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7 The Parties acknowledge and agree that resident hiring by Developer in connection with the Development is of upmost importance to RHA , and was a material factor in the selection of Developer.
(m) Right to Return. All current residents of the Property shall have a right to move into a new affordable rental unit in the Development upon completion of construction (subject only to good standing conditions consistent with HUD requirements and to be specified in the MDA).
(n) Relocation. Provided the Development receives Disposition Approval, relocation will be governed by Section 18 of the 1937 Housing Act, and 24 CFR part 970. In general these requirements include: (1) all residents must be offered comparable housing (including a project based voucher unit), (2) issuance of 90-day notice to residents prior to displacement, (3) providing counseling/advising services, (4) paying actual and reasonable moving costs (as defined by RHA), (5) compliance with fair housing and accessibility requirements, (6) issuance of 90 -day notice cannot begin prior to Disposition Approval, and (7) disposition and demolition cannot commence until residents are relocated. For purpose of relocation, the switch from public housing to Section 8 constitutes a change of housing if not a physical move. Developer will provide a draft Relocation Plan for RHA review. All relocation costs and expenses, including without limitation, the payment of moving expenses, relocation benefits, and the cost of a relocation consultant, will be included in the sources and uses for the Development and/or particular Phases, as applicable. The MDA and Implementing Agreements will further specify the respective obligations of the Parties with respect to relocation.
(o) Compliance with Law. In developing and operating the Development, Developer shall comply all applicable local, State, and federal laws, rules, statutes, ordinances, and regulations, including without limitation, the City ordinances identified in Section 15 below.
(p) Reimbursement of RHA and City Expenses. By not later than the Closing date, Developer shall reimburse RHA for all expenses incurred by RHA and/or the City in connection with (i) the solicitation and review of proposals for development of the Property, (ii) neg otiation and preparation of all documents pertaining to the disposition, development, and financing of the Development, including without limitation, this Agreement, the MDA, and, as applicable ground leases, purchase and sale agreements, disposition and development agreements, loan documents, regulatory agreements, and resale restriction agreements ( “Implementing Agreements”), and (iv) review of all financing and other documents pertaining to the Development, including without limitation construction documents, loan documents, bond financing documents, and partnership agreements and related documents. Such reimbursable expenses shall include without limitation, expenses incurred by RHA and/or the City in connection with: legal fees; relocation costs; design, land use, financial and development consulting fees; appraisal costs; environmental studies, and feasibility studies. The MDA will include additional detail regarding anticipated budgets for such expenses in order to enable Developer to include such expenses in the budget for each Phase.
(q) No City or RHA Subsidy. No City or RHA loan, grant, or waiver, reduction, or deferral of City impact, permit, or other fees will be provided for the Development.
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8 (r) Review and Approval of Financing Plans. RHA shall have the right to review and approve financing plans for each phase of the Development, including without limitation, the sources and uses.
(s) Closing Documents and Closing Guarantees. At each Closing, except as provided in the MDA, the MDA will terminate relative to the subject Phase and Applicable Parcel (but remain in effect for the remaining Phases of the Development), and the Implementing Agreements executed by the Owner Entity for such Phase will control. At each Closing, MBA Properties, Inc . will provide RHA with a guaranty of construction completion of the subject Phase and with a guaranty of the environmental remediation indemnity obligation of the Developer and applicable Owner Entity.
6. Financial Feasibility , Conceptual Plans, Develop ment Schedule . During the Exclusive Period, Developer shall provide RHA with preliminary versions of each of the following, in form and substance reasonably satisfactory to RHA: (1) documentation demonstrating the financial feasibility of each phase of the Development, including documentation establishing Developer’s capacity to finance the Development, and development and operating pro formas, (2) a preliminary draft master plan, including conceptual renderings , and (3) a proposed development phasing plan , including the proposed ownership structure for each phase, and the proposed schedule for commencement and completion of construction for each phase . The MDA will establish a process and standards for the Parties to confer and mutually approve updates to the foregoing submittals as the development process moves forward, including without limitation, through consultation with residents.
7. Finality of the Determination. Notwithstanding anything to the contrary set forth in this Agreement, the determination by each of RHA and Developer as to whether to enter into an MDA shall be made in such Party's sole and absolute discretion and shall be final and conclusive, without any liability therefor on the part of such Party to the other Parties. Developer shall have the right to terminate this Agreement at any time on or before the last day of the Exclusive Period by giving notice thereof to RHA, whereupon n one of the Parties shall have any further rights, liabilities, or obligations to each other pursuant to this Agreement except as expressly stated herein. Without limiting the generality of the f oregoing, the Parties each acknowledge that no Party has an obligation to enter into an MDA or any Implementing Agreement or other instrument regarding the disposition or conveyance of the Property or any part thereof, and no MDA or Implementing Agreement or other such instrument shall be effective unless approved by the Commission and, if applicable, by HUD.
8. Reports and Plans. If, despite good faith efforts by the Parties, negotiations fail to result in an approved and executed MDA within the Exclusive Period, this Agreement shall terminate.
Developer agrees thereupon to promptly provide to RHA, without representation or warranty, all findings and determinations relating to the proposed Development prepared by Developer or provided to Developer by third parties, and shall provide to RHA, all plans, studies and reports prepared for Developer in connection with this Agreement and/or the Property, or the Development. Nothing set forth in the preceding provisions of this paragraph shall obligate ERNA – Nystrom Village
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9 Developer to provide to RHA copies of proprietary financial information or projections prepared by Developer for its internal use. This Section shall survive the termination of this Agreement.
9. Assignment. Developer's rights and obligations under this Agreement are not assignable or transferable, in whole or in part, voluntarily or involuntarily, without the prior written consent of RHA in its sole and absolute discretion; provided however, in connection with the syndication of any tax credits for the Development , Developer shall have the right to assign its obligations under this Agreement and/or the MDA or Implementing Agreements to a limited partnership in which Developer, or limited liability company wholly controlled by Developer, acts as the general partner.
10. Compliance with Regulations. Developer understands, acknowledges and agrees that it must comply with requirements and provisions of the City of Richmond (including, without limitation, approvals required by City of Richmond Planning Commission, Design Review Board and other commissions/officers/agencies of the City of Richmond), as well as approvals that must be obtained from various state and federal regulatory agencies, and there are no assurances that any such approvals can be obtained.
11. Disclosure of Information. Developer understands, acknowledges and confirms that in connection with Developer's proposal in response to the RFP , Developer has made full and unconditional disclosures regarding all members and officers of Developer and all other pertinent information concerning Develope r, and Developer w ill continue to make and update all such disclosures as reasonably required by RHA.
12. Disclosure of Financing. Notwithstanding the provisions of Section 8 above, Developer understands, acknowledges and agrees that Developer shall disclose to RHA detailed information regarding the financial feasibility of the Development and the methods and sources of financing to be used in developing the Development.
13. Approvals. Developer understands, acknowledges and agrees that if negotiations culminate in an MDA that RHA staff recommends to the Commission, such MDA shall become final and effective only if and when the MDA has been considered and approved by the Commission in its sole and absolute discretion.
14. Waiver of Lis Pendens. It is expressly understood and agreed by the Parties that no lis pendens shall be filed against any portion of the Property with respect to this Agreement or any dispute or act arising from it.
15. City Ordinances. Without limiting any other provisions of this Agreement, Developer agrees to comply with the City of Richmond Business Equal Opportunity Ordinance (RMC Chapter 2.50), the Local Employment Program (RMC Chapter 2.56), Living Wage Requirement Ordinance (RMC Chapter 2.60), the Ordinance Banning the Requirement to Provide Information of Prior Criminal Convictions on All Employment Applications (RMC Chapter 2.65), One - Percent for Public Art on Private Projects Program (RMC Chapter 12.62) and other City ordinances, regulations and programs referenced in the MDA and Implementing Agreements.
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10 16. Default. If Developer defaults in the performance of any of the covenants, conditions or agreements contained in this Agreement, then Developer shall be deemed to have breached the Agreement. If any such a default is not cured within twenty (20) days following written notice thereof from RHA, RHA shall have, in addition to all other remedies at law or equity, the right to terminate this Agreement and to seek monetary damages and/or equitable relief.
17. General Provisions.
17.1 Actions by the Authority. Whenever this Agreement calls for or permits the approval, consent, authorization or waiver of RHA, the approval, consent, authorization, or waiver of the Executive Director shall constitute the approval, consent, authorization or waiver of RHA without further action of the Commission.
17.2 Broker’s Fees. No broker’s fees, finder's fees or real estate commissions will be paid in connection with this Agreement, the transactions described herein, the MDA, or any Implementing Agreement.
17.3 Governing Law; Venue. This Agreement shall be governed and construed in accordance with the laws of the State of California, excluding principles of conflicts of law. Any litigation arising under this Agreement shall be prosecuted in the Superior Court of California, County of Contra Costa, and all parties waive their respective rights to change venue pursuant to Section 394 of the Code of Civil Procedure.
17.4 Entire Agreement. This Agreement, together with Exhibits A through D attached hereto and incorporated herein by reference, constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements pertaining thereto.
17.5 Amendments; Waivers. This Agreement may not be amended or modified except by a written instrument signed by both Parties. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving party. An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act, and no extension shall be valid unless in writing and executed by the waiving party.
17.6 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respecti ve addresses specified below o r to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; or (iii) nationally recognized overnight courier, with charges ERNA – Nystrom Village
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11 prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service.
RHA: Housing Authority of the City of Richmond 330 24th Street
Richmond, CA 94804
Attn: Executive Director
McCormack: McCormack Baron Salazar, Inc.
720 Olive Street
St. Louis, MO 63101
Attn: General Counsel
RNHS: Richmond Neighborhood Housing Services 12972 San Pablo Avenue
Richmond, CA 94805
Attn: Executive Director
17.7 Binding on Successors; Limitation on Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their permitted successors and assigns, subject to the limitations on assignment set forth herein.
17.8 Severability. Each provision of this Agreement shall be considered severable, and if any provision of this Agreement is determined to be invalid or contrary to any existing or future law, such invalidity shall not impair the remainder of this Agreement provided that the remainder of the Agreement can, absent the excised portion, be reasonably interpreted to give effect to the intentions of the Parties.
17.9 No Waiver. No waiver by either Party of any default or breach of any covenant by the other Party shall be implied from any omission to take action on account of such default.
No waiver of any provision under this Agreement shall be effective unless in writing and signed by the waiving party. A waiver of any covenant, term or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition
17.10 Headings; Interpretation. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. Any reference to a particular section of this Agreement shall mean a reference to all subsections thereof. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. .
17.11 No Third Party Beneficiaries. Except as expressly set forth herein, nothing in this Agreement is intended to or shall be deemed to confer upon any person other than the Parties any legal or equitable right, remedy or claim under or by reason of this Agreement.
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12 17.12 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another.
17.13 Non-Liability of Officials, Employees and Agents. No official, employee or agent of RHA shall be personally liable to Developer or its successors in interest in the event of any default or breach by RHA or for any amount which may become due to Developer or its successors in interest pursuant to this Agreement.
17.14 Authority. Each person executing this Agreement on behalf of a Party represents that he or she is duly authorized to sign and deliver this Agreement on behalf of such Party, and that this Agreement is binding on such Party in accordance with its terms.
17.15 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the parties have entered into this Exclusive Right to Negotiate Agreement as of the date first written above.
Approved as to form:
RHA:
HOUSING AUTHORITY OF THE CITY
OF RICHMOND, a public body, corporate
and politic
By:
Nannette J. Beacham, Executive
Director
Attest:
DEVELOPER:
MCCORMACK BARON SALAZAR, INC.,
a Missouri corporation
By:___________________________
Print Name:______________________
Title:____________________________
RICHMOND NEIGHBORHOOD
HOUSING SERVICES, a California
nonprofit public benefit corporation
By:___________________________
Print Name:______________________
Title:____________________________
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Exhibit A
PROPERTY
NYSTROM VILLAGE LEGAL DESCRIPTION
Nystrom Village, Marina Way South and Maine Ave, Richmond, CA 94801 Florida and Virginia Ave (North to South) and South 13 St. and South 16 St. (East to West) (APNs: 544-111-001, 544-112-001, 544-113-001, and 544-132-001)
SIT E SIZ E
392,475 SF or 9 acres
Exhibit B
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Exhibit B
RIGHT OF ENTRY AGREEMENT
FORM OF RIGHT OF ENTRY AND
RELEASE OF LIABILITY AGREEMENT
PERMIT TO ENTER AND RELEASE OF LIABILITY AGREEMENT
THIS PERMIT TO ENTER AND RELEASE OF LIABILITY AGREEMENT ("Agreement"), dated as of _________, 2022 ("Effective Date"), is made and entered into by and among the Housing Authority of the City Of Richmond, a public body, corpor ate and politic ("RHA"), McCormack Baron Salazar, Inc., a Missouri corporation (“ McCormack”), and Richmond Neighborhood Housing Services, a California nonprofit public benefit corporation (“RNHS” and together with McCormack, the "Permittee") with reference to the following facts.
RECITALS
A. RHA is a public housing authority formed pursuant to Section 34200 et seq. of the California Health and Safety Code and governed by certain regulations promulgated by the United States Department of Housing and Urban Development ("HUD").
B. RHA is the fee owner of the real property located in the City of Richmond, Contra Costa County, California consisting of the approximately nine (9) acre, four -block area bounded by Florida and Virginia Avenues and by South 13th and South 16th Streets, and the improvements thereon including 100 units of public housing consisting of 51 woodframe duplexes built in 1941.
The Property consists of the following: Contra Costa County Assessor’s Parcel Nos: 544-132-001 (“Block A”), 544 -111-001 (“Block B”), 544-112-001 (“Block C”), and 544 -113-001 (“Block D”) (as more particularly described in Exhibit A, collectively, the “Property”).
C. RHA and Permittee entered into that certain Exclusive Right to Negotiate Agreement dated ____________, 2022 (the " ERNA") regarding the potential lease and/or conveyance of the Property for the development of the Development (as that term is defined in the ERNA).
D. In anticipation of Permittee's acquisition of the Property and development of the Development, and pursuant to the ERNA, Permittee wishes to conduct inspections and investigations of the Property (the "Permitted Investigation").
NOW, THEREFORE, for good and valuable consideration, RHA and Permittee agree as follows:
1. Recitals. The defined terms of the foregoing Recitals are a substantive part of this Agreement.
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2. Provision of Permit. RHA hereby provides to Permittee a Permit to Enter the Property (hereinafter referred to as the " Permit") during the Exclusive Period (as defined in the ERNA) for the purpose of conduct ing the Permitted Investigation . The Permitted Investigation shall be at Permittee's sole cost and expense , and without limitation, all tools and equipment necessary for the Permitted Investigation shall be provided by Permittee. Permittee shall (i) notify and procure RHA's written consent at least t hree (3) b usiness days pr ior to each entry onto the Property. Consent to the start of Permitted Investigation shall be conditioned on (i) Permittee's acquiring all applicable permits required by governmental authorities; (ii) Permittee's furnishing to RHA copies of such permits; ( iii) Permittee's compliance with the conditions of all applicable laws, permits and approvals in a prompt and expeditious manner; and (iv) Permittee's receipt of RHA's approval of evidence of insurance coverage as set forth in Section 11, below. Permittee agrees that except as otherwise expressly agreed upon in writing by RHA, Permittee shall repair any and all damage resulting from the Permitted Investigation and restore the Property to its pre - inspection condition. Permittee further agrees that Permittee shall not disturb the residents of the Property for any purpose or by any of its actions in undertaking the Permitted Investigation.
3. Entry at Permittee's Own Risk; Release. In entering the Property and engaging in Permitted Investigation, Permittee agrees, on its own behalf and on behalf of its contractors and subcontractors, employees, officers, guests, volunteers, invitees, and their respective successors and assigns (all of the foregoing, the “Releasors”) that it will and hereby does, release, discharge and covenant not to sue RHA, the RHA Board of Commissioners, the City of Richmond, or their respective elected or appointed officials, City Council members, commissioners, officers, directors, employees, agents, consultants, contractors, advisory board member, and volunteers (all of the foregoing, the " Released Parties") with respect to (a) any and all liability accruing to Permittee or any other Releasor as a result of the activities undertaken pursuant to this Agreement, (b) any loss or damage and any cl aim or demand therefor on account of injury to or death of persons, or injury or damage to property resulting directly or indirectly from Releasors’ entry upon or about the Property or any facilities or equipment therein, or engaging in Permitted Investigation, unless such loss, damages, claim or demand is determined (by a court's final judgment after all appeals have been concluded or exhausted) to have been caused by the sole active negligence or willful misconduct of the Released Parties. Permittee acknowledges that the Property and any entry thereon shall be in the Property's "AS -IS" and "WITH ALL FAULTS" condition, and with no representations or warranties whatsover, express or implied, on the part of RHA or the City of Richmond, or arising by operatio n of law, including without limitation, any warranty of condition or habitability.
In connection with the release set forth in this Section 3, Permittee, for itself and all Releasors, hereby waives the benefit of California Civil Code section 1542, which provides as follows:
A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, and that if known by him or her, would have materially affected his or her settlement with the debtor or released party.
The provisions of this Section 3 shall survive the expiration or earlier termination of the Permit, this Agreement, and the ERNA.
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4. Mechanic's Liens. Permittee shall not permit or suffer any mechan ic's or materialmen's or other liens of any kind or nature to be recorded and/or enforced against the Property, and Permittee shall indemnify and hold harmless RHA and the Property from and against any and all liens, claims, and expenses related to work do ne, labor performed, activities undertaken, or materials furnished in connection with the Pe rmittee's entry on the Property pursuant to this Agreement. The provisions of this Section 4 shall survive the expiration or earlier termination of this Agreement
5. Compliance with Law. Permittee shall cause all work performed and activities undertaken in connection with this Agreement to be performed and undertaken in compliance with all applicable federal, state and local laws, statutes and ordinances, and all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction (collectively, the "Rules and Regulations"). Compliance under this provision includes compliance with the California Environmental Quality Act ("CEQA") and all provisions of the Municipal Code of the City of Richmond, including Chapters 2.28, 2.39, 2.50, 2.52, 2.56, 2.60, and 2.65, if applicable, which are herein incorporated by reference. All work performed and activities undertaken shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, whether discretionary or ministerial, and Permittee shall be responsible to RHA for the procurement and maintenance thereof, as may be required of Permittee and all entities using the Property or engaged Permitted Investigation. Permittee shall require all contractors, subcontractors, employees, officers, guests, invitees, volunteers and assigns entering upon the Property to obey and observe all terms of the Permit and all Rules and Regulations. Permittee shall be responsible for paying for fines or charges which may be levied by any governmental bodies, agencies, authorities or courts for violations of Rules and Regulations.
6. Hazardous Materials.
(a) In connection with conducting the Permitted Investigation, Permittee shall take no action, nor cause the Property to be, in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property, including, but not limited to, soil and ground water conditions.
Permittee shall not use, generate, load, handle, remove, manufacture, stor e or dispose of on, under, or about the Property or transport to or from the Property, contaminated water, soil, bunkers, chipped or removed paint, flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, includ ing without limitation, any substances defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials").
(b) Permittee shall immediately advise RHA in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Permittee or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
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Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third party against Permittee or the Property, relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as " Hazardous Materials Claims "); and (iii) Permittee's discovery of any occurrence or condition on any real properties adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border -zone property" under the provision of California Health and Safety Code, Sections 25220 et seq. or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law.
(c) RHA has the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims. (d) Permittee acknowledges that as described in the ERNA and to be documented in the Master Development Agreement and/or other documents governing the disposition of the Property, following Closing (as defined in the ERNA) Permittee shall be obligated to remediate the Property and dispose of Hazardous Materials in compliance with all applicable laws.
7. Security and Utilities. Permittee acknowledges that RHA does not and will not provide security services or utilities in connection with the Permitted Investigati on, and Permittee shall provide, at its sole cost and expense, all such services and utilities necessary or appropriate for its conduct of Permitted Investigation.
8. Indemnification. To the fullest extent allowed by law, Permittee shall defend (with counsel reasonably acceptable to RHA and the City of Richmond), indemnify and hold harmless, and require its contractors and subcontractors to defend, indemnify and hold harmless the Released Parties (defined in Section 3 above), from any and all liability, penalties, fines, costs, losses, damages, actions, proceedings, causes of action, demands, claims or judgments, expenses (including attorneys' fees, expert fees, consultants’ fees, court costs, and other defense costs) (all of the foregoing, “ Claims”), resultin g from : (i) injury to or death sustained by any person (including the Releasors and their respective employees and agents), (ii) damage to property of any kind, or (iii) any other injury or damage whatsoever, which injury, death or damage arises directly or indirectly out of , or is in any way related to entry on the Property pursuant to this Agreement or the Permitted Investigation, regardless of Permittee's fault or negligence, except that (a) such indemnity shall not apply to the extent a Claim results from the gross negligence or willful misconduct of any Released Party, and (b) such indemnity shall not apply to Claims relating to Hazardous Materials existing on the Property as of the Effective Date unless any such Claim results from the actions of Permi ttee or its employees or agents. The indemnification obligations of Permittee and its contractors, and subcontractors shall extend to Claims asserted after the expiration or termination of this Agreement, provided that such Claims arose during the term of this Agreement. The provisions of this Section 8 shall survive the expiration or earlier termination of this Agreement
9. Term. The term of the Permit and this Agreement shall commence on the Effective Date and shall expire and terminate upon the first to occur of the following: (a) expiration of the
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Exclusive Period (as defined in the ERNA), (b) termination of the ERNA pursuant to its terms, or (c) the date that a Master Development Agreement or other agreement governing the disposition of the Property is fully executed; and thereupon and thereafter the Permit and this Agreement shall be null and void and of no further force or effect, except as to thos e provisions of this Agreement that expressly survive the expiration or earlier termination of this Agreement.
10. Signs. No signs or placards of an advertising or promotional nature shall be painted, inscribed or placed in or on the Property or on any building or structure located thereon without the prior written consent of the RHA at RHA's sole and absolute discretion. Permittee agrees to remove promptly and to the satisfaction of RHA, at the cost and expense of Permittee, upon the termination of the Permit, any and all signs and placards placed by it upon the Property pursuant to this Section.
11. Insurance. Permittee shall, at all times, maintain at its sole cost and expense the insurance coverage set forth in Exhibit B and for the benefit of RHA and all other additional insureds required thereunder. Permittee shall furnish RHA with written evidence of the required insurance coverage prior to entering the Property and engaging in Permitted Investigation. No activities permitted pursuant to the Permit shall be initiated prior to Permittee's receipt of RHA's approval of evidence of insurance coverage related thereto.
12. Taxes. Permittee shall pay all taxes which may be levied, imposed or assessed upon or against the Property arising out of this Agreement or the Permit, or any possessory interest right which Permittee may have in or to the Property by reason of its use or occupancy thereof. Permittee recognizes and understands that the Permit may create a possessory interest subject to property taxation and that Permittee may be subject to the payment of property taxes levied on such interest. Permittee agrees to pay all taxes, assessments, and charges on goods, merchandise, appliances, equipment and property owned by it in or about the Property.
13. Default. If Permittee defaults in the performance of any of the covenants, conditions or agreements contained in this Agreement, then Permittee shall be deemed to have breached the Agreement. Upon the occurrence of such a default which is not cured within ten (10) days following written notice thereof from RHA, RHA shall have, in addition to all other remedies at law or equity, the right to terminate the Permit and to seek monetary damages and/or equitable relief
14. No Property Interest; No Assignment. This Agreement and the Permit create only a temporary and revocable license and do not create any interest in the Property or any other real property. This Agreement shall not be recorded. This Agreement is personal to Permittee and may not be voluntarily or involuntarily assigned, in whole or in part, by Permittee.
15. Miscellaneous.
15.1 Attorneys’ Fees. If any legal action or proceeding arising out of or relating to this Agreement is brought by either party hereto, the prevailing party shall be entitled to receive from the other party, in addition to any other relief that may be granted, the reasonable attorney's fees and expert fees, costs, and expenses incurred in the action or proceeding brought or defended by the prevailing party.
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15.2 Waivers. Any waiver by RHA of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by RHA to take action on any breach or default of Permittee or to pursue any remedy allowed under this Agreement or applicable law. Consent by RHA to any act or omission by Permittee shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for RHA's written consent to future waivers.
15.3 Entire Agreement. This Agreement together with the exhibits attached hereto and incorporated herein by reference, and the ERNA constitute s the entire agreement between RHA and Permittee relating to the subject matter hereof, and supersedes all prior oral or written agreements pertaining thereto.
15.4 Governing Law; Venue. This Agreement shall be governed and construed in accordance with the laws of the State of California, excluding principles of conflicts of law.
Any litigation arising under this Agreement shall be prosecuted in the Superior Court of California, County of Contra Costa, and all parties waive their respective rights to cha nge venue pursuant to Section 394 of the Code of Civil Procedure
15.5 Severability. Each provision of this Agreement shall be considered severable, and if any provision of this Agreement is determined to be invalid or contrary to any existing or future law, such invalidity shall not impair the remainder of this Agreement provided that the remainder of the Agreement can, absent the excised portion, be reasonably interpreted to give effect to the intentions of the Parties
15.6 Headings; Interpretation. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. Any reference to a particular section of this Agreement shall mean a reference to all subsections thereof. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.
15.7 No Third Party Beneficiaries. There are no other third party beneficiaries of this Agreement.
15.8 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another.
15.9 Notices. Notices to be sent pursuant to this Agreement shall be in writing and shall be sent in accordance with Section 17.6 of the ERNA.
15.10 Amendments. This Agreement may not be amended or modified except by a written instrument signed by the Parties.
15.11 Counterparts. This Agreement may be executed in multiple original counterparts, each of which is deemed to be an original, and all such counterparts shall constitute
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one and the same instrument. A facsimile or electronic signature on this Agreement shall be as valid as an ink-signed original.
[REMAINDER OF THIS PAGE IS BLANK; SIGNATURES ON NEXT PAGE] ERNA – Nystrom Village
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22 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
RHA:
HOUSING AUTHORITY OF THE CITY OF RICHMOND, a public body, corporate and politic
By:________________________
Nannette J. Beacham, Executive Director
Approved as to form:
By:_____________________
DEVELOPER:
MCCORMACK BARON SALAZAR, INC., a Missouri corporation
By:___________________________
Print Name:______________________
Title:____________________________
RICHMOND NEIGHBORHOOD HOUSING SERVICES, a California
nonprofit public benefit corporation
By:___________________________
Print Name:______________________
Title:____________________________
ERNA – Nystrom Village
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23 Exhibit A
PROPERTY
NYSTROM VILLAGE LEGAL DESCRIPTION
Nystrom Village, Marina Way South and Maine Ave, Richmond, CA 94801 Florida and Virginia Ave (North to South) and South 13 St. and South 16 St. (East to West) (APNs: 544-111-001, 544-112-001, 544-113-001, and 544-132-001)
SIT E SIZ E
392,475 SF or 9 acres
ERNA – Nystrom Village
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24 Exhibit B
INSURANCE REQUIREMENTS
ERNA – Nystrom Village
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25 ERNA – Nystrom Village
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26 ERNA – Nystrom Village
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27 ERNA – Nystrom Village
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28 ERNA – Nystrom Village
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29 Exhibit C
TERM SHEET
ERNA – Nystrom Village
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30 ERNA – Nystrom Village
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31 ERNA – Nystrom Village
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32 ERNA – Nystrom Village
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33 Exhibit D
AFFIRMATIVE ACTION AND SECTION 3 REQUIREMENTS
ERNA – Nystrom Village
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34 ERNA – Nystrom Village
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35