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AGENDA(S):
- SPECIAL CITY COUNCIL AGENDA
Friday, July 12, 2024, 9:30 a.m.
Community Services Building
440 Civic Center Plaza
Richmond, CA 94804
Members
Eduardo Martinez, Mayor at Large
Melvin Willis, Councilmember District 1
Cesar Zepeda, Councilmember District 2
Doria Robinson, Councilmember District 3
Soheila Bana, Councilmember District 4
Gayle McLaughlin, Councilmember District 5
Claudia Jimenez, Vice Mayor, District 6
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Pages
3 A. OPEN SESSION TO HEAR PUBLIC COMMENT BEFORE CLOSED SESSION 9:30 a.m.
B. ROLL CALL
C. CLOSED SESSION
C.1 CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Government Code Section 54956.8)
Property: Point Molate (site of former Naval Shipyard Depot) Agency Negotiator: Dave Aleshire
Negotiating Parties: East Bay Regional Park District & Tribe & Upstream Point Molate LLC
Under negotiation: Price and terms of payment
•
D. PUBLIC COMMENT BEFORE CLOSED SESSION
E. ADJOURN TO CLOSED SESSION
4 F. SPECIAL COUNCIL MEETING OF THE RICHMOND CITY COUNCIL 10:00 a.m.
G. PLEDGE OF ALLEGIANCE
H. ROLL CALL
I. STATEMENT OF CONFLICT OF INTEREST
J. AGENDA REVIEW
K. REPORT FROM THE CITY ATTORNEY OF FINAL DECISIONS MADE DURING
CLOSED SESSION
L. NEW BUSINESS
L.1 Disposition of 81.56 acre Developable Property at former Point Molate Naval Facility by Letter of Intent
6 APPROVE entering into the Letter of Intent (LOI) and execution by the Mayor with any final technical changes made by the City Attorney – City Attorney’s Office (David Aleshire 510-620-6509).
M. ADJOURNMENT
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July 12, 2024
City Attorney’s Office
AGENDA
REPORT
DATE: July 12, 2024
TO: Mayor Martinez and Members of the City Council
FROM: David J. Aleshire, City Attorney
Subject: Disposition of 81.56 acre Developable Property at former Point Molate Naval Facility by Letter of Intent
FINANCIAL IMPACT: LOI relinquishes City’s 50% share of sale proceeds under Amended Judgment, which may have a positive
but unquantified impact on the Richmond General Fund,
potentially relieving the City from substantial costs of maintenance and security as well as risks of liability.
Maintenance and security services for up to one year after closing at a cost not to exceed $400,000. This carries out Council direction on June 21, 2022.
PREVIOUS COUNCIL
ACTION:
November 21, 2019: Adoption of Settlement Agreement
(Amended Judgment) with Upstream and the Tribe;
September 8 and 15, 2020: Entitlements granted –
Winehaven Legacy; May 24, 2022: Council determined
Winehaven had not met conditions to close; June 21,
2022: Council determined to sell to Tribe as directed by Amended Judgment; May 7, 2024: Council rescinded
Winehaven entitlements pursuant to Court of Appeal
Order.
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July 12, 2024
STATEMENT OF THE
ISSUE:
The Settlement Agreement (Amended Judgment)
ordered the sale of “Development Areas” constituting 30 percent of the land area of Point Molate. The Judgment
states, “Development Areas” shall mean the four
development areas shown on Figure 6, Land Use Areas,
Point Molate Reuse Plan or any parcel subsequently
designated or subdivided from those four Development
Areas under Amended Judgment.
First, the City and then the Tribe was given the
opportunity to find a developer. In June 21, 2022, two
years ago, when selling to the Tribe, the staff report
made the following recommendation:
“The City should initiate the process of determining if there is a public or nonprofit entity willing to accept conveyance of the open space and make a commitment
to open it for public use, manage it and maintain it at no cost to the City of Richmond. At least three entities have expressed such interest (1) East Bay Regional Parks
District, (2) John Muir Land Trust and (3) Trust for Public Land.”
After some period of exploring possible developers, the Tribe focused on the East Bay Regional Park District
(“District”) and the District obtained a commitment through Senator Skinner for a $36M grant. Based on such
commitment, the Parties being the District, Tribe, and City have negotiated the LOI. Ultimate action on the grant
rests with the California Coastal Conservancy
(“Conservancy”) and the LOI must be finalized before
August 5 for the matter to be on the Conservancy agenda for their quarterly September 5, 2024, meeting.
RECOMMENDED ACTION: APPROVE entering into the LOI and execution by the Mayor with any final technical changes made by the City Attorney – City Attorney’s Office (David Aleshire 510-
620-6509).
DISCUSSION:
This staff report provides a brief history of (i) the acquisition of the Point Molate Property, (ii) the lawsuit and settlement with Upstream and Guidiville Tribe pursuant to the Amended Judgment; (iii) the reasons the City did not close the sale to Winehaven Legacy LLC pursuant to the Disposition and Development Agreement; (iv) the directive of the Council on May 24, 2022, concurrent with the sale to the Tribe to find a non-profit entity for conveyance for park and open space; and (v) development of the LOI with the Tribe and District.
PROPERTY HISTORY
In 2003, the US Navy transferred that certain real property consisting of 270 acres of upland and 7
July 12, 2024
134 acres of tidal and submerged real property (“Property”) to the City of Richmond (“City”).
In 2004, the City and Guidiville Rancheria of California and Up stream Point Molate LLC (jointly “Tribe/Upstream” or “Tribe ”) executed that certain Land Disposition Agreement which was subsequently amended (“LDA”). In 2012, Tribe/Upstream filed a lawsuit in Federal court against the City alleging, among other things, that the City breached that LDA and the covenant of good faith and fairly dealing and for unjust enrichment. In November of 2019, after 7 long years of expensive litigation, the lawsuit was finally amicably resolved by the parties pursuant to that certain “Amended Judgment” issued by the Federal Court (“ Amended Judgment”). The Amended Judgment was entered by the Court on November 21, 2019 , and is binding on the Property.
JUDGMENT REQUIREMENTS
The Amended Judgment mandates that 270 acres of upland area, thirty percent (30%) was to be “development areas” and seventy percent (70%) was to be open space. The Judgment also defines four (4) areas within the Property as “Development Areas.” The City was provided with the opportunity to market the Development Areas with an outside sale date being the earlier of (i) 30 months from the Effective Date; or (ii) 24 months after issuing the last discretionary approval.
If the City successfully sold the Property, “net” revenues from the sale were to be split equally between (i) the City, and (ii) Tribe/Upstream. “Net” revenues are generally determined as the gross sales price less all costs incurred by the City with respect to the Sale.
If the City did not consummate the sale of the Development Areas by the Outside Sale Date, Tribe/Upstream had the option to acquire all or any portion of the Development Areas from the City for $100 per Development Area (for a maximum amount of $400).
If the Option is exercised by Tribe/Upstream, Tribe/Upstream must thereafter market and sell the Property within 5 years. Tribe/Upstream were allowed to pursue alternate development of the Property (or portions thereof) although new approvals would be subject to the City’s land use discretion.
Upon Tribe/Upstream ultimately selling the Property, Tribe/Upstream are obligated to transfer 50% of the Net Proceeds to the City.
The Amended Judgment provides for various reporting obligations of the Parties as well as auditing rights with respect to the calculation of the “Net Revenues.”
WINEHAVEN DDA
The principal goal of the Amended Judgment was to induce the sale of the Property, preferably to a capable developer, and use the proceeds to satisfy Tribe/Upstream claims. This occurred on September 30, 2020, when the City executed that certain Disposition and Development Agreement (“DDA”) with Winehaven Legacy, LLC (“ Developer” or “SunCal” to avoid confusion with Winehaven district) for the sale of all the Development Areas for $45M (“SunCal Sale Price”).
Concurrently with the DDA, the City and Developer also executed that certain Development Agreement dated October 20, 2020, which was recorded against the Property on October 23, 2020, as Instrument No. 2020-247749 in the Official Records of Contra Costa County. The proposed project anticipated 1,260 new residential units plus a mix of uses in rehabilitated historic buildings and 250,000 square feet of new construction in the Winehaven Historic District.
Pursuant to the Amended Judgment, the outside sale date for closing the sale to Developer was May 21, 2022.
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July 12, 2024
Pursuant to the DDA, Developer was required to reimburse the City for all costs which it incurred including, but not limited to, attorney fees, reports, processing fees, etc. as set forth in the DDA (“Reimbursement Amounts”). It has not done so and is now a part of the current litigation between Developer and City.
DEVELOPER DEFAULT; GENERAL FUND IMPACT
The DDA included a tentative financing plan, which included the proposal for a Community Facilities District (CFD) to finance the extensive public facilities and services of police and fire needed for the development. The CFD was intended to prevent the Project from having an impact on the General Fund. Extensive finance projections and studies were prepared. The Developer made changes to try and eliminate the financial impact on the General Fund. On March 18, 2022, the City Council concluded the impact could not be eliminated and disapproved the CFD.
On May 9, 2022, City Attorney David Aleshire sent Developer a letter summarizing the pending issues required to be resolved prior to the Closing. Significant issues remained unresolved and ultimately, the City Council concluded that the developer did not have the financing to satisfy the conditions. Thereafter, under the Amended Judgment, the City Coun cil proceeded to sell the property to Guidiville Tribe/Upstream through its entity Point Molate Futures (“PMF”). This sale of the 81.56 acres “Development Parcels” was consummated on August 29, 2022. (The City retains ownership of the open space – 70% of the site.) The Developer sought an injunction to block the sale but the Judge refused to grant it due to the fact the Developer was unlikely to succeed.
CEQA LITIGATION SUCCEEDS AND INVALIDATES DEVELOPER ENTITLEMENTS In September, 2020, the City Council adopted Reso lution No. 97-20 and Ordinance Nos. 22 -20 and 23 -20, which together certified the Subsequent Environmental Impact Report (“SEIR”) in compliance with the California Environmental Quality Act (“CEQA”) and approved the land use approvals for the Point Molate Mixed Use Project (“Project”), consisting of a General Plan Amendment, Rezoning, Disposition and Development Agreement, Development Agreement, Design Guidelines, including a Master Planned Area Plan and Historic Conservation Plan, Vesting Tentative Tract Map, Conditional Use Permit, and Major Design Review (the “Entitlements”).
In October 2020, Point Molate Alliance, SPRAWLDEF, Citizens for East Shore Parks, North Coast Rivers Alliance, and numerous other community groups and individuals filed two related Petitions for Writ of Mandate challenging the City’s September 2020 certification of the SEIR and land use approvals for the Project. Raising numerous claims and causes of act, the Petitions asserted causes of action asserting violations of CEQA (the “Alliance Litigation”).
The Contra Costa Superior Court, on March 15, 2022, entered Judgment Denying the Petitions for Writ of Mandate in full. Petitioners Point Molate Alliance and North Coast Rivers Alliance, et al., filed notices of appeal to the First District Court of Appeal on March 21 and 23, 2022, respectively (Case Nos. A164906 and A165758).
The First District Court of Appeal issued a Final Opinion and Order Mod ifying Opinion and Denying Rehearing on November 27, 2023, directing the trial court to enter a new judgment and issue a peremptory writ of mandate directing the City to set aside its certification of the final SEIR and the Entitlements.
In compliance with the Opinion and Order of the Court of Appeal, the Superior Court on January 22, 2024, entered a new Judgment and Writ of Mandate ordering the City to:
1. Set aside and vacate its approvals of the Project, including Resolution No. 97-20 and Ordinance Nos. 22-20 and 23-20 adopted on September 8 and 15, 2020, respectively.
2. Decertify the SEIR for the Project (SCH No. 2019070447) for the purpose of addressing the deficiencies identified in the Court of Appeal’s Opinion; and 9
July 12, 2024
3. File a Return to the Writ withi n 120 days of the Judgment, which Return shall specify the action(s) taken to comply with the terms of the Writ.
STATE OF CALIFORNIA PROVIDES CRITICAL ASSISTANCE
Once the Tribe acquired title through its wholly owned entity, PMF, it began a process of contacting various development entities, and the City received inquiries from these entities . The City also received inquiries from several non -profit entities consistent with the direction on June 21, 2022.
The inquiries seemed especially serious from the East Bay Regional Park District (“Park District”).
The Park District is a system of beautiful parklands in Alameda and Contra Costa counties to the east of San Francisco. The system comprises 73 parks spanning across 126,809 acres; 1,330 miles of trails; 55 miles of shoreline. The Park District manages and preserves natural and cultural resources for all to enjoy and protect. The regional parks are ideal for healthful recreation and environmental education.
The possibility of the Park District acquiring the Property was greatly enhanced from the State’s actions when it was assured that $36M was reserved in the State’s budget for acquisition and development under Senator Skinner’s SB 179.
The story of Pt. Molate has been a long and winding road with many peak s and valleys. Most importantly, the story of Pt Molate is a story of what grassroots action and coalition -building can accomplish and a tribute to decades -long advocacy for this world class park. As stated by Councilmember Gayle McLaughlin: “Twenty plus y ears of community organizing, continuously bringing to the forefront the hopes and dreams of our residents for a major park at Point Molate, have once again demonstrated that with hard work and perseverance, dreams can and do come true!”
With the extra incentive of the grant, eventually PMF decided to focus its negotiation with the Park District.
TERMS OF THE LOI
Of course, the most difficult issue was reaching an agreement on the purchase price. The 80 - some acres controlled by the Tribe was split in half with about half originally planned for residential development (over 1 ,200 units) and the other half a part of the historic Winehaven district consisting of warehouses, navy facilities and cottage barracks. Initially, the Park District/P MF transaction envisioned the Park District acquiring only the undeveloped half, and PMF acquiring the historic Winehave n portion and developing that area in accordance with the Developer Entitlements.
However, two problems developed here. First, as reiterated above, the ongoing Alliance CEQA litigation against the SunCal Project, although failing at the Superior Court level, succeeded at the Court of Appeal where the City was ordered to rescind the Entitlements. This not only upset the Tribe development plans, it also potentially impacted the value of the Property.
Secondly, the Council vision for the Property while supportive of historic preservation on the Winehaven Parcels, did not support aggressive development of that Property. The City was never presented with a specific development plan by PMF.
Negotiations to resolve these issues led to major developments. Under the Amended Judgment and the SunCal Entitlements, the price of the property was $45M of which the City and Tribe/Upstream would have shared equally or $22.5M each. The Tribe proposed that in exchange for their giving up the right to independently develop the Winehaven Parcels, the split be altered from 50/50. Eventually, the proposal was that PMF receive 100% of the sale price. 10
July 12, 2024
The State required an independent appraisal to support the negotiated purchase price. Initially, only the undeveloped parcels were appraised at a value of some $27M. The appraisal was revised when the Winehaven Parcels were included and came in at over $50M based on the Entitlements.
With this value, the Park District and Tribe reached a price of $40M for the entire 80 acres, with the Park District adding its own $4M to the State grant of $36M.
With this background, other important terms of the LOI include the following:
1. Property. Park District acquires all Development Parcels including Winehaven.
2. Federal Judgment. At Closing, Federal Judgment is dissolved and of no further force and effect and all claims waived and released.
3. Due Diligence; Closing. Parties develop Purchase and Sale Agreement and perform due diligence with Closing before the end of the year.
4. Coastal Conservancy . The State agency must approve the transaction and authorize disbursement of $36M by November 21, 2024, pursuant to SB 179.
5. Maintenance Agreement . City and Park District will enter maintenance/security agreement whereby City continues maintenance and security services for up to one year after Closing at a cost not to exceed $400,000 , to allow ramp up of District Services.
6. Remediation. Upon Closing Park District will be responsible for all ongoing environmental remediation activity, and City shall advance to Park District all remaining Navy funds set aside for such activity. City shall not be responsible for remediation of hazardous materials or for environmental conditions after District takes title.
7. Good Faith Deposit . District deposits $1M into escrow within ten (10) days after execution with $250,000 immediately released and non-refundable. The remainder non-refundable when (i) the State approves the appraisal, (ii) the District releases conditions, and (iii) Federal Court has motions to modify revenue split to become effective on Closing. Additionally, District must reimburse Tribe $1M to pay legal expenses of transaction.
8. City District Cooperation. District with City Stakeholders ( Richmond residents and those with long-time involvement with Point Molate) and City Staff and departments in project planning, and keeping them involved at key milestones.
Note: The City has been spending up to $1 million annually on maintenance and security, including environmental remediation, at Pt. Molate. Other expenses have included preservation of historical structures. There is a current contract in that regard of $450,000.
NEXT STEPS
The 3 parties by their boards, need to each approve the LOI . It is calendared for City special meeting on July 12 given the summer recess, and by the Park District for July 16. After those steps are taken, it then must go through the process of the California Coastal Conservancy.
The Coastal Conservancy meets five or six times a year at different locations around the state , with the upcoming meetings on September 5 and November 21. Notice and agendas are set 30 days in advance so for the Septemb er meeting it would be August 5 . The Conservancy then needs several weeks in advance of the notice date to be able to have the appraisal reviewed. We therefore believe that the LOI needs to be approved by the bodies no later than the week of July 15-19 to make the September agenda.
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July 12, 2024
Other considerations are that we want the transaction approved this year given the State’s general budget situation and the possibility that monies can be clawed back. So we think the transaction is time sensitive for all of the Parties, which is why a special meeting is being called.
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CONCLUSION
It has take n some remarkable events for this transaction to come together, considering the community activists and those dealing with the San Francisco Bay, its unique and world-famous locations and resources and how long this has taken . For several decades many have been consumed by trying to put together a formula for the preservation of Pt. Molate. The dedication of many to this mission is illustrated by the fate of some of the prior development proposals and by the State of California and Senator Skinner and others who advocated for the large infusion of resources when the need arose to acquire the Property from the Tribe for the general public benefit.
Point Molate has been called “the most beautiful part of San Francisco bay no one’s ever heard of.” We are now at the point where everyone throughout the Bay Area and beyond will come to know Richmond as home to an amazing world-class park at Pt. Molate.
In terms of the specific transaction, three different parties were involved with somewhat different objectives and the deal they have struck is as unique as they are . While the Tribe has been enamored with the potential of the site for some time, ultimately the State offer of funding created a pot large enough that the Tribe might give up its past efforts, coupled with the litigation which overturned the EIR and caused the rescission of the Entitlements. This could only be achieved through the City giving up its 50% interest created by the Federal Amended Judgment. The Park District was granted the funding to make it possible, but had to come up with additional funding— and it was their public purpose of park and open space, and their past regional actions which have created the culture to let them see the importance of this regional asset and utilize their unique ability to preserve it.
From the City’s standpoint, from th e action two years ago to see that SunCal had not provided the financial resources required by the agreement, and facing criticism about not receiving the purchase price—and deciding on a course of conduct to solicit and appropriate a non-profit to be able to acquire the Property and permanently preserve it —in two years this vision has been realized. The City loses its half of purchase price, and is contributing $400,000 towards first year of maintenance, but in exchange (i) is not responsible for future ma intenance expenses of the development parcels; (ii) is not responsible for remediation after Closing—with costs not fully known at this time; (iii) has a knowledgeable and proven regional partner for development of 1st class recreation programs and a unique property; (iv) retains 70% of the site to work in conjunction with the Park District for a unique Bay Area project; and (v) through its stewardship has preserved for all Richmond residents and for all citizens in the Bay Area one of the most unique areas in the Bay for future generations. The further one gets from conservation acquisitions in US history, the more valuable they become as the benefit to future generations is everlasting —and that will surely be the case here.
DOCUMENTS ATTACHED:
Attachment 1 - Letter of Intent
13 LETTER OF INTENT
Re: Former Point Molate Naval Facility July 10, 2024 Page | 1
July 10, 2024
LETTER OF INTENT
Re: 81.56 acres at former Point Molate Naval Facility
In the years since the former Point Molate naval facility was closed by United States Navy and transferred to the City of Richmond ("City"), several development plans, with varied terms and a variety of partners, have been proposed for Point Molate. Pursuant to the terms of an Amended Judgment, issued by U.S. District Court Judge Yvonne Gonzalez Rogers on November 21, 2019 (Case No. CV 12-1326 YGR) ("Amended Judgment"), the City conveyed ownership of Point Molate to Point Molate Futures, LLC ("PMF") on August 29, 2022. PMF is wholly-owned by the Guidiville Rancheria of California ("Tribe"), and is the entity that now holds title in fee to
the developable parcels of Point Molate (“Developable Parcels ” or “ Property”) in accordance with the terms of the Amended Federal Judgment (“Amended Judgment”). The Developable Parcels are shown in Exhibit A attached hereto and incorporated herein. The East Bay Regional Park District ("District") believes that the terms outlined below provide a path forward for the creation of an important community amenity for the residents of the City and the greater Bay Area. The District is pleased to present this non-binding Letter of Intent to PMF and City for their consideration.
1. Purchase and Sale Agreement.
The proposed agreement between PMF and the District to sell the Property (defined below) would be set forth in a Purchase and Sale Agreement (" PSA” or “Agreement") to be executed on behalf of PMF and the District. The District requires an approved Agreement while the District completes its due diligence, satisfies funding conditions, and secures various State of California and District approvals.
2. Property.
The Property that will be the subject of the Agreement is approximately 81.56 acres of the Point Molate property, designated as Lots 1-44, including all buildings and improvements thereon, as shown on the map (Exhibit A) attached hereto. These are the “Development Parcels” per the Amended Judgment. Future use of the Property will be consistent with, and further the District’s mission to preserve natural and cultural resources while also providing open space, parks, trails, safe and healthful recreation and environmental education. The portions of the property to be acquired with State Coastal Conservancy grant funds will be subject to a n offer to dedicate (aka deed restriction) that will restrict the Property to only those uses that will protect and enhance the natural, cultural, historic and recreational resources of the Property. City wishes to have similar equitable enforcement rights subordinate to the State’s rights.
14 LETTER OF INTENT
Re: Former Point Molate Naval Facility July 10, 2024 Page | 2
3. Purchase Price and Terms of Payment.
The purchase price for the Property will be a total of $40 Million (“Purchase Price”). The District proposes that the “Net Revenues” (as defined in the Amended Judgment) generated from the purchase and sale transaction be distributed as follows: 100% to PMF and 0% to Defendant City of Richmond. Together, the Plaintiffs and Defendant shall work with the U .S. District Court to revise the Amended Judgment to reflect new Net Revenue distribution. The parties to the Amended Judgment shall begin the process to revise the Amended Judgment within fourteen (14) business days of an executed LOI. The revised Amended Judgment shall be filed with the U.S.
District Court for approval prior to execution of the PSA . Notwithstanding the foregoing, it is expressly understood that a ny and all changes to the Amended Judgment , including changes to the distribution of Net Revenues, are contingent on Closing and shall be void if the transaction does not timely close . Moreover, c oncurrent with Closing and satisfaction of the Amended Judgment, as revised, the City and Tribe will wor k cooperatively to terminate the reporting requirements in the Amended Judgment and release all claims against each other as specified in the Amended Judgment.
4. Earnest Money Deposit.
The District will deposit one million dollars ($1,000,000.00) into escrow within ten (10) business days after execution of the Agreement. The Earnest Money Deposit will be creditable to purchase price. $250,000 to be immediately released to PMF and become non-refundable except for breach by PMF. The remaining $750,000 will be released and become non -refundable once CA Department of General Services approves the appraisal, the District waives its conditions, and the U.S. District Court has received the necessary motions to effectuat e the modification of the Net Revenue split of the Amended Judgment to occur upon Closing.
5. Property Documents.
Within fourteen (14) business da ys of the execution of the Agreement , PMF will deliver or otherwise make available to the District all material documents, contracts, agreements, and reports pertaining to the Property, except those documents, contracts, agreements, and reports subject to attorney-client and/or deliberative process and/or other legally-protectable privileges ("Property Documents") that are in the possession of PMF, its representatives, agents, employees, or contractors and the City shall deliver or otherwise make available to PMF and the District all Property Documents in the possession of City or its consultants, agents, employees or contractors.
6. Due Diligence Terms to be Incorporated into the Agreement.
Pursuant to terms to be incorporated into the Agreement, the District will have one hundred and twenty days (120) days from the date of the Agreement execution by all parties to perform any and all studies as the District may desire on the Property, including without limitation, Phase I and Phase II environmental assessments, including toxics tests, soils tests, building condition inspections, and any other related investigations the District elects to perform, provided that the 15 LETTER OF INTENT
Re: Former Point Molate Naval Facility July 10, 2024 Page | 3
District shall provide ten (10) days advance written notice to PMF describing the proposed work to be performed, including, without limitation, what tests will be performed, the time of such tests, and the entity or entities that will perform the tests. Such reports and test results shall also be provided to PMF within ten (10) days after completion. The District will defend, hold harmless, and indemnify PMF and the City from and against any claims, demands, expenses, or liabilities which arise from the District's inspections and/or testing of the Property (other than claims related to the mere discovery of hazardous materials and except to the extent such claims are the result of the gross negligence or willful misconduct of the City or PMF or its or their representatives, agents, employees, or contractors), and will return the Property and the improvements thereon to substantially the condition that existed prior to the testing. The District's defense, hold harmless, and indemnity obligations shall survive the expiration or termination of the Agreement, even if no Closing occurs. Prior to expiration of the due diligence period, the District will approve or disapprove the condition and suitability of the Property for District's purposes.
7. Additional District Conditions to be Incorporated into the Agreement.
In addition to the District’s other standard closing conditions, the District’s obligation to close escrow (the “Closing”) and purchase the Property will be subject to the satisfaction (or waiver by District) of the following additional conditions precedent to closing, which shall be set forth in the Agreement:
A. The District shall be fully satisfied with the results of its inspections, including, without limitation, as to economic feasibility, siting, environmental condition, condition of title, and shall have approved the condition of the Property. The District will release its contingency for site inspections and environmental and other Property conditions by no later than one hundred and twenty (120) days from the date of the Agreement execution by all parties.
B. There shall be no material adverse changes to the Property from the condition existing on the date District approved (assuming District has so approved) the condition of the Property.
C. The title company selected by District shall be irrevocably committed to deliver an ALTA Owner’s Extended Coverage Title Insurance Policy, insuring the District’s right, title, and fee interest in the Property in the amount of the Purchase Price, subject only to exceptions approved by District.
D. PMF has delivered or made available to the District, and PMF has requested that the City deliver or make available to District, all Property Documents under their respective possession or control.
E.
The California State Coastal Conservancy (“Conservancy”), on or before November 21, 2024, shall authorize the disbursement of thirty-six million dollars ($36,000,000), which amount represents the Conservancy’s portion of the purchase price funds pursuant to AB 179 (State Budget act of 2022).
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F. Plaintiffs PMF (on behalf of the Tribe) and Upstream, on one hand, and Defendants City, on the other hand, will have obtained Federal District Court approval to modify the Net Revenues split from 50/50 to the distribution of 100% of Net Revenues to PMF and 0% to City. This may require further formal amendment of the Amended Judgment (Case No. CV 12-1326 YGR) to modify the terms of the Amended Judgment to conform to the Agreement, and provide for City, PMF (on behalf of the Tribe) and Upstream Point Molate LLC ("Upstream") to each file a satisfaction of the Amended Judgment upon Closing of the purchase and sale of the Property in accordance with the Agreement.
G. The District and City have entered, or are ready to enter into concurrently with the Closing, an operation and maintenance cost sharing agreement providing, among other things: (i) for the City, at its expense, to maintain and secure the Property for one (1) year from and after the Closing; and
(ii) for the City to transfer to District any remaining funds that the Navy provided to the City or its agents for monitoring or remediation of Hazardous Materials. Prior to Closing, the City will make available to District, all Property Documents in its possession concerning the status of the environmental remediation .
Further City will provide any documents that demonstrate remaining Navy funding is limited. City’s obligation to manage the Property for one year shall be limited to property maintenance and security at a maximum cost to the City of $400,000 and shall not include any environmental remediation that exists as of the date of Closing. City shall not be further responsible for remediating hazardous materials or for environmental conditions after District takes title to the Property. The District acknowledges that it is acquiring the Property in an “AS IS, WHERE IS, AND WITH ALL FAULTS condition. The operation and maintenance agr eement between the District and City will include appropriate indemnification language to address the parties' respective responsibilities during the one (1) year following Closing and thereafter, pursuant to the commitments contained herein.
8. Title Insurance.
Upon the close of escrow, PMF (or, if required by Title Company to issue title insurance, PMF and the City) shall convey to the District by grant deed fee simple title to the Property, as evidenced by an ALTA owners title insurance policy issued by a title insurance company selected by District, with whom an escrow shall be opened upon execution of the Agreement by PMF and the District. The District shall pay the premium costs of the ALTA owners policy, including any endorsements or survey requested by the District.
9. Outside Date for Closing.
The purchase and sale of the Property from PMF to the District shall close upon satisfaction or waiver of all conditions precedent to Closing, but in no event later than January 15, 2025.
10. No Brokers.
Neither the District nor PMF are represented by any agent or real estate broker in connection with 17 LETTER OF INTENT
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the proposed purchase and sale of the Property. Tribe will indemnify and defend the District from any claims made for compensation arising from the purchase and sale transaction. All amounts payable to Upstream or Tribe for their release of claims against the City shall be paid by PMF out of the Purchase Price/Revenues.
11. Prorations/Closing Costs.
The District and PMF shall prorate current taxes and assessments and any other items of income and expense as of close of escrow as are normally prorated in similar purchase and sale transactions. All usual closing costs, recording fees, and escrow fees shall be paid by the District.
12. Agreement Costs.
The District shall pay its own legal, consulting, and administrative costs of preparing and
negotiating the Agreement and any independent review or other due diligence related work the District chooses to incur. The District shall also reimburse PMF (on behalf of the Tribe) one million dollars ($1,000,000.00) (''Tribal Fee Reimbursement") to compensate PMF (on behalf of Tribe) for reasonable legal fees incurred in connection with the negotiation and drafting of the Agreement and certain other out -of-pocket costs incurred by PMF (on behalf of Tribe).
Except as expressly provided in the preceding sentence, any costs incurred by PMF (on behalf of the Tribe) in connection with ownership, operation, marketing, or management of the Property and/or the purchase and sale transaction, shall be borne by PMF (on behalf of the Tribe).
13. City-District Cooperation.
The District and the City have a long history of working in partnershi p on Park District projects within the City. The District will also commit to the following: 1) engage on Equity outreach and planning; and 2) conduct community and stakeholder park planning outreach.
Specifically, the District commitment will include the following:
• During the initial project scoping and prior to initiating formal project planning, the District planning staff, including the District’s dedicated Office of Equity, will commit to coordinate with the City’s Community Development Director and community stakeholders to ensure a diverse and representative range of community voices are engaged throughout the process and advancing equitable park access. • Such community stakeholders, along with City Community Development staff, will be invited to engage in project planning throughout the process, will be kept apprised at key milestones, and specifically invited to comment throughout EBRPD public meetings. • Park District staff will commit to providing updates to the City of Richmond Recreation and Parks Commission, Planning Commission, a community advisory group formed by the City Council, and/or City Council at key milestones in the planning and development process.
• City staff having the option to participate in any project stakeholder groups. 18 LETTER OF INTENT
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14. Letter of Intent.
Notwithstanding anything to the contrary in this Letter of Intent, the District and PMF expressly acknowledge and agree that this Letter of Intent does not include all the material terms that would be included in the formal written Agreement and thus does not constitute a contract for the purchase and sale of the Property and only expresses the District's and PMF's mutual desire to negotiate in good faith and attempt to agree upon a formal written Agreement and using this Letter of Intent as the initial framework from which the District and PMF will later endeavor to reach the formal written Agreement.
This Letter of Intent is intended to be a precursor to the Agreement. The District and PMF will negotiate
in good faith to execute the Agreement, incorporating the terms and conditions of this Letter of Intent and such other terms and provisions as may be negotiated and agreed to by PMF and the District.
These are the major business terms upon which the District, subject to approval by its Board of Directors, is prepared to enter into the Agreement described above. This Letter of Intent is not intended to be legally binding, and neither the District nor PMF shall be legally bound unless and until the Agreement is executed between the District and PMF.
If these major business terms are acceptable to PMF and City, please sign and date a copy of this Letter of Intent
where indicated below, and return it to my attention. Once I receive PMF's and City’s approval, I will instruct the District's legal counsel to prepare the formal Agreement and any other legal documents for the District's, PMF's and City’s review.
Although neither the District nor PMF will be legally bound unless and until the District and PMF have each approved and executed the Agreement, please be assured that I will consider both parties informally committed to work together in good faith to attempt to reach formal documentation on these major business terms.
If we have not signed formal documents for any reason by December 31, 2024, however, neither the District nor PMF nor City will have any further obligation to proceed in good faith with these negotiations.
The terms and conditions of the foregoing Letter of Intent are hereby accepted by the undersigned.
EAST BAY REGIONAL PARK DISTRICT APPROVED AS TO FORM:
A California Special District
Dated: ____________________ By: _____________________
B
y: ____________________
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Print Name: ______________________
Its: ______________________
POINT MOLATE FUTURES, LLC APPROVED AS TO FORM:
On behalf of Guidiville Rancheria of California, a federally recognized Tribe
Dated: ____________________ By: _____________________
By: ____________________
Print Name: ______________________
Its: ______________________
CITY OF RICHMOND APPROVED AS TO FORM:
A Municipal Corporation
Dated: ____________________ By: _____________________
By: ____________________
Print Name: ______________________
Its: ______________________
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O:\GIS\MPeterson\PROJECTS\MXDs\ASD\Trails\SFBayTrail_PtMolate\SubDiv_Prcls1-44_update.mxd Date: 7/10/2024 East Bay Regional
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LETTER OF INTENT -
EXHIBIT A
Pt. Molate
7/10/2024
Parcels
City of Richmond
City Shoreline Park
Point Molate Futures, LLC
Streets
Regional Trails
Pt. Molate
Parcels digitized from Attachment 1: Exhibit F - Vesting T entative Tract Map. City of Richmond Document Center.21