City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00514 3/11/2025 Consent Item 3.
Exclusive Right to Negotiate Agreement - 1900 Club Center Drive File ID: 2025-00514
Location: 1900 Club Center Drive, District 1
Recommendation: Pass a Motion authorizing the Interim City Manager or designee to execute an Exclusive Right to Negotiate (“ERN”) Agreement with EAH Inc. regarding the potential sale of 1900 Club Center Drive, which has been declared exempt surplus land.
Contact: Ya-yin Isle, City Housing Manager, (916) 808-1869, [email protected], City Manager’s Office of Innovation and Economic Development;Richard Sanders, Facilities & Real Property Superintendent, (916) 808-7034, [email protected], Department of Public Works
Presenter: None
Attachments:
1-Description/Analysis
2-Exclusive Right to Negotiate Agreement
3-Exhibit A - Right of Entry Agreement
Description/Analysis
Issue Detail: The City-owned property located at 1900 Club Center Drive (“Property”) was acquired by the City in 2003 and was intended to be the location of a community center. Funding for the construction of a community center was never allocated and the Department of Youth, Parks, & Community Enrichment (“YPCE”) has determined that the Property is no longer required for any YPCE projects. Other City departments were also consulted and have no other uses for the Property.
Pursuant to the California Surplus Land Act (California Government Code § 54220 et seq.), the City Council adopted a resolution on February 25, 2025, which declared the property as “exempt surplus land.” “Exempt surplus land” is real property owned in fee simple that is not necessary for the City’s use and that falls within one of the exemptions specified in the Surplus Land Act. One of the exemptions specified in Government Code section 54221(f)(1)(F)(i) of the Surplus Land Act is for property that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or
File ID: 2025-00514 3/11/2025 Consent Item 3.
moderate income, with at least 75 percent of the residential units restricted to lower income households. With the City Council having declared the Property as “exempt surplus land,” the City may sell the property within the parameters of the above-specified Surplus Land Act exemption without conducting the Notice of Availability process.
In 2024, an affordable housing developer, EAH Inc., approached City staff about the availability of the Property, which is a 3.5-acre vacant site, for housing development consisting of 100% affordable housing units. The location, size, and shape of the Property makes it a prime candidate for affordable housing development. The City also desires that the Property be developed for 100% affordable housing given the City’s housing shortage. City staff recommends executing the ERN to allow time for EAH Inc. to conduct preliminary due diligence on the Property and for EAH Inc. and the City to engage in good faith negotiations towards determining if a sale agreement for the Property is desirable and the key business terms of such agreement.
The proposed terms of the ERN would include an initial term of 180 calendar days for the ERN agreement, with the option to extend for an additional 180 calendar days. If EAH Inc. and the City decide to proceed with a sale agreement, City staff will present the proposed sale agreement to the City Council for consideration.
Policy Considerations: Housing continues to be a priority of the City, and entering into an ERN is the first step in allowing a developer to explore the feasibility of developing affordable housing on the Property.
This action is supported by the City’s General Plan, specifically Housing Element PolicyH-2.2 Maximize Use of Public Properties for Affordable Housing and Shelters, which states the City shall make City-owned properties that are no longer needed for current or foreseeable future public operations available for the development of affordable housing and emergency shelter space to the maximum extent feasible, and shall encourage other public entities to do so as well.
Economic Impacts: None.
Environmental Considerations: The action of entering into an ERN is not part of a project that has been identified, designed or funded. The ERN allows for additional due diligence and determination of project feasibility. No physical change in the environment would occur. The action is an administrative action that would not result in direct or indirect physical changes in the environment and is not a project as defined in CEQA. (CEQA Guidelines sections 15378(b)(4), 15060(c)(3)).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
File ID: 2025-00514 3/11/2025 Consent Item 3.
Rationale for Recommendation: The ERN enables EAH Inc. to investigate the physical condition of the Property and to determine if the City’s General Plan, zoning and design requirements will accommodate the proposed 100% affordable housing development. The recommendation in this report furthers the City’s objective of providing a range of housing for community needs, including affordable housing.
Financial Considerations: None.
Local Business Enterprise (LBE): Not applicable.
City RESS File No.: ROE-25-03-00
Project: ROE to EAH at 1900 Club Center Dr
APN: 225-1730-002
WO: 3278471 _
CITY OF SACRAMENTO
RIGHT OF ENTRY AGREEMENT
THIS AGREEMENT ( “Agreement”) or License is made at Sacramento, California, as of _______________, (“Effective Date”), by and between the CITY OF SACRAMENTO, a municipal corporation (“City”) and EAH Inc., a California nonprofit public benefit corporation (“Licensee”), who agree as follows:
1. Definition of Licensee. For purposes of this Agreement, all references to “Licensee” include Licensee’s contractors, subcontractors, officers, agents, employees, and others acting under its or their authority.
2. Rights Granted; Purpose. City grants Licensee the right, during the t erm of this Agreement and subject to all terms and conditions of this Agreement, to enter upon and to have ingress to and egress from that portion of property in the County of Sacramento, State of California located at 1900 Club Center Drive, Sacramento 95835, further identified as Assessor’s Parcel Number 225-1730-002, as depicted on the map attached hereto and incorporated herein as Exhibit A (the “Premises”), for purposes of conducting physical inspections, studies, tests and surveys of the Premises and for no other purpose without the prior written consent of City.
3. Term; Termination. The grant of rights herein made to Licensee shall commence on the Effective Date and terminate 180 calendar days after the Effective Date , unless sooner terminated as herein provided, or at such time when Licensee has completed its use of the Premises, whichever is earlier. Licensee agrees to notify the City Representative specified in Section 20 in writing when Licensee has completed its use of the Premises if earlier than the termination date. This Agreement may be terminated by either party for cause with three (3) days written notice to the other party.
4. No Interference . No work performed by Licensee shall cause any interference with the constant, continuous and uninterrupted use of the P remises and adjacent City property by City, its officers, agents, contractors, lessees, licensees , or others. Nothing shall be done or suffered to be done by Licensee at any time that would cause damage or destruction of any facilities, equipment, improvements, or other property or appurtenances of City or its agents, contractors, lessees, licensees, or other third parties. Licensee shall reimburse City for any such damage or destruction, or upon mutual agreement , replace or restore said facilities, equipment, or other property to City’s satisfaction.
5. All Expenses Borne by Licensee. Licensee shall bear any, and all costs and expenses associated with any work performed by Licensee in association with this License. All work performed by Licensee on City’s property shall be performed in a manner satisfactory to the City Representative listed in Section 20 below.
6. Processing Fee. There is no fee associated with this Agreement.
7. Permits; Reports. Prior to beginning any work, Licensee, at its sole expense, shall obtain all necessary permits to perform any work contemplated by this Agreement. Any report completed that involves the subject parcel shall be provided to the City Representative listed in Section 20.
8. Special Conditions. Licensee shall comply with all special conditions listed i n Exhibit B attached hereto and incorporated herein.
9. Release of Liability. Licensee shall release and hold City harmless for loss of or damage to property and equipment, or personal injury, of Licensee and its officers, employees, agents, contractors, subcontractors, invitees, volunteers, and others acting under its or their authority while such individuals, property or equipment is in or on the Premises, except where such loss of or damage to property and equipment, or personal injury, results from the sole negligence or willful misconduct of City and its o fficials, employees, agents or volunteers. Licensee and its officers, employees, agents, contractors, subcontractors, invitees, volunteers, and others acting under its or their authority have inspected the Premises or will inspect the Premises prior to commencement of any work under this Agreement and represent to City that: (a) they accept the Premises in its present condition; (b) they will make the Premises safe for any activity under their care and control on the Premises, whether or not permitted activities; and (c) City is not and shall not be obligated to make Premises safe or suitable for use by Licensee or for anyone on the Premises at the invitation or sufferance of Licensee, or otherwise to prepare the Premises or access to the Premises in any ma nner whatsoever. City does not assume, by this Agreement or otherwise, any responsibility for, or to protect against, personal injury suffered, or any loss, damage, theft or vandalism of any property or material which may be placed on the Premises, by Lice nsee or its officers, employees, agents, contractors, subcontractors, invitees, volunteers, and others acting under its or their authority.
10. Indemnity. Licensee shall defend, hold harmless and indemnify City, its officers and employees, and each and every one of them, from and against any and all actions, damages, costs, liabilities, claims, demands, losses, judgments, penalties, costs and expenses of eve ry type and description, including, but not limited to, any fees and/or costs reasonably incurred by City’s staff attorneys or outside attorneys and any fees and expenses incurred in enforcing this provision (hereafter collectively referred to as “Liabilit ies”), including but not limited to Liabilities arising from personal injury or death, damage to personal, real or intellectual property or the environment, contractual or other economic damages, or regulatory penalties, arising out of or in any way connec ted with performance of or failure to perform this Agreement by Licensee, any consultant, contractor or agent, anyone directly or indirectly
employed by any of them or anyone for whose acts any of them may be liable, whether or not (i) such Liabilities are caused in part by a party indemnified hereunder or (ii) such Liabilities are litigated, settled or reduced to judgment; provided that the foregoing indemnity does not apply to liability for any damage or expense for death or bodily injury to persons or damage to property to the extent arising from the sole negligence or willful misconduct of City, its agents, servants, or independent contracto rs who are directly responsible to City, except when such agents, servants, or independent contractors are under the direct supervision and control of Licensee. The provisions of this Section 10 shall survive any expiration or termination of this Agreement.
11. Insurance Requirements. During the entire term of this Agreement, Licensee shall maintain the insurance coverage described in this Section 11. Licensee is solely responsible for all premiums that Licensee is required to pay for the insurance coverage described herein . No compensation will be provided by City for Licensee’s insurance premiums. Any available insurance proceeds in excess of the specified minimum limits and coverages shall be available to City.
It is understood and agreed by Licensee that its liability to City shall not in any way be limited to or affected by the amount of insurance coverage required or carried by the Licensee in connection with this Agreement.
A. Minimum Scope & Limits of Insurance Coverage.
(1) Commercial General Liability Insurance providing coverage at least as broad as ISO CGL Form 00 01 on an occurrence basis for bodily injury, including death, of one or more persons, property damage, and personal injury, arising out of activities performed by or on behalf of Licensee, its sub -consultants, and subcontractors, products and completed operations of Licensee, its sub- consultants, and subcontractors, and premises owned, leased, or used by Licensee, its sub -consultants, and sub contractors, with limits of not less than one million dollars ($1,000,000) per occurrence. The policy shall provide contractual liability and products and completed operations coverage for the term of the policy. If a general aggregate limit applies, either the general aggregate limit shall apply separately (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
(2) Automobile Liability Insurance providing coverage at least as broad as ISO Form CA 00 01 for bodily injury, including death, of one or more persons, property damage, and personal injury, with limits of not less than one million dollars ($1,000,000) per accident. The policy shall provi de coverage for owned, non - owned, and/or hired autos as appropriate to the operations of the Licensee.
No automobile liability shall be required if Licensee completes the following certification:
“I certify that a motor vehicle will not be used in performance of any work or services under this Agreement.” _____ (Licensee initials)
(3) Excess Insurance : The minimum limits of insurance required above may be satisfied by a combination of primary and umbrella or excess insurance coverage; provided that any umbrella or excess insurance shall contain, or be endorsed to contain, a provision that it shall apply on a primary basis for the benefit of the City, and any insurance or self -insurance maintained by City, its officials, employees, or volunteers shall be in excess of such umbrella or excess coverage and shall not contribute with it.
(4) Workers’ Compensation Insurance with statutory limits, and Employers’ Liability Insurance with limits of not less than one million dollars ($1,000,000).
The Workers’ Compensation policy shall include a waiver of subrogation in favor of the City. If no work or services will be performed on or at City facilities or City Property, the City Representative may waive this requirement by selecting the option below:
Workers’ Compensation waiver of subrogation in favor of the City is not required. _____ (City Representative initials)
No Workers’ Compensation insurance shall be required if Licensee completes the following certification:
“I certify that my business has no employees, and that I do not employ anyone. I am exempt from the legal requirements to provide Workers’ Compensation insurance.” _____ (Licensee initials)
B. Additional Insured Coverage.
(1) Commercial General Liability Insurance: The City, its officials, employees, and volunteers shall be covered by policy terms or endorsement as additional insureds as respects general liability arising out of: activities performed by or on behalf of Licensee, its sub-consultants, and sub contractors; products and completed operations of Licensee, its sub-consultants, and subcontractors; and premises owned, leased, or used by Licensee, its sub -consultants, and subcontractors.
(2) Automobile Liability Insurance : The City, its officials, employees, and volunteers shall be covered by policy terms or endorsement as additional insureds as respects auto liability.
C. Other Insurance Provisions.
The policies are to contain, or be endorsed to contain, the following provisions:
(1) Licensee’s insurance coverage, including excess insurance, shall be primary insurance as respects City, its officials, employees, and volunteers. Any insurance or self -insurance maintained by City, its officials, employees, or volunteers shall be in excess of Licensee’s insurance and shall not contribute with it.
(2) Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its officials, employees, or volunteers.
(3) Coverage shall state that Licensee’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.
(4) Licensee shall provide the City with thirty (30) days written notice of cancellation or material change in the policy language or terms.
D. Acceptability of Insurance.
Insurance shall be placed with insurers with a Bests’ rating of not less than A:VI. Self- insured retentions, policy terms or other variations that do not comply with the requirements of this Section 11 must be declared to and approved by City in writing prior to execution of this Agreement.
E. Verification of Coverage.
(1) Licensee shall furnish City with certificates and required endorsements evidencing the insurance required. Copies of policies shall be delivered to the City on demand. Certificates of insurance shall be signed by an authorized representative of the insurance carrier.
(2) Licensee shall send all insurance certificates and endorsements, including policy renewals during the term of this Agreement, directly to:
City of Sacramento
c/o EXIGIS LLC
P.O. Box 947
Murrieta, CA 92564
Certificate Holder must be listed as:
City of Sacramento
c/o EXIGIS LLC
P.O. Box 947
Murrieta, CA 92564
(3) The City may withdraw its offer of contract or cancel this Agreement if the certificates of insurance and endorsements required have not been provided prior to execution of this Agreement. The City may withhold payments to Licensee or cancel the Agreement if the insurance is canceled or Licensee otherwise ceases to be insured as required herein.
F. Subcontractors.
Licensee shall require and verify that all sub-consultants, subcontractors maintain insurance coverage that meets the minimum scope and limits of insurance coverage specified in this Section 11.
12. Mechanics’ Liens. Licensee shall pay in full all persons who perform labor or provide materials for the work to be performed on the Premises . Licensee shall not permit or suffer any mechanics’, or materialmen’s liens of any kind or nature to be enforced against any property of the City for such work performed. In accordance with the provisions of Sections 9 and 10 above, Licensee shall indemnify and hold harmless the City from and against any, and all liens, claims, demands, costs , or expenses of whatsoever nature in any way connected with or growing out of such work done, labor performed, or materials furnished.
13. No Recording. Neither party shall record this Agreement.
14. Compliance with Laws. In the prosecution of the work performed on the Premises , Licensee shall comply with all applicable federal, state , and local laws, regulations , and enactments.
Licensee shall use only such equipment as is consistent with safety, both as concerns Licensee, Licensee’s agents and employees, the officers, agents, employees and property of the City and the public in general. Licensee (without limiting the generality of the foregoing) shall comply with all applicable state and federal occupational safety and health acts and regulations. If any failure by Licensee to comply with any such laws, regulations, and enactments, shall result in any fine, penal ty, cost or charge being assessed, imposed , or charged against City, Licensee shall reimburse and indemnify City in accordance with the provisions of Section 10 above for any such fine, penalty, cost, or charge, including without limitation, attorney’s fees, court costs and expenses.
15. Assignment; Subcontracting. Except as provided in this paragraph, Licensee shall not assign, sublet, or subcontract this Agreement, or any interest therein, without the written consent of City and any attempt to so assign, sublet or subcontract without the written consent of City shall be void and of no effect. City hereby gives Licensee permission to subcontract all, or any portion of the work described in this Agreement ; however , Licensee is and shall remain
responsible for all work of subcontractors and all work of subcontractors shall be governed by the terms of this Agreement.
16. Binding Effect. This Agreement shall be binding on the heirs, executors, administrators, successors and assigns of the parties, subject to the provisions of Section 15 above.
17. Hazardous Materials. Licensee shall not use, store, release or otherwise introduce on the Premises, any substance, chemical, waste , or other material that is identified as hazardous, toxic or dangerous in any Federal, State or local law or regulation (hereafter “ Hazardous Material”), nor shall Licensee damage, alter or otherwise affect any clay cap present on the Premises, if any. Licensee shall be solely responsible for the complete cost of removal and/or remediation of any Hazardous Material spilled by Licensee on the Premises, and Licensee shall defend and indemnify City, its officers , and employees from and against all claims or other liabilities therefor, in accordance with the provisions of Section 10 above to the extent allowed by law . Licensee shall not be responsible to remediate any Hazardous Material that it inadvertently discovers on the Premises.
18. Nuisance. Licensee shall at all times conduct its use of the Premises in such a manner that it shall not constitute a public or private nuisance.
19. No Joint Ventures. It is understood and agreed that each party is an independent entity and that this Agreement shall not create a relationship between City and Licensee or its individual members of employer -employee, joint venture, partnership, or any other relationship of association. Except as expressly provided in this Agreement or as the p arties may specify in writing, neither p arty shall have authority, express or implied, to act on behalf of the other party in any capacity whatsoever as an agent.
20. Representatives. Any and all processing fees, notices or demands by or from either party shall be in writing, and shall be served either personally or by mail. If served personally, service shall be conclusively deemed made at the time of service. If served by mail, service of notices or demands shall be conclusively deemed made as of the time of deposit in the United States mail, postage paid. Any notice or demand shall be given to:
City Representative: Licensee Representative:
City of Sacramento EAH, Inc.
Department of Public Works Attn: Nur Kausar Attn: Richard Sanders 22 Pelican Way
915 I Street, 2nd Floor San Rafael, CA 94901
Sacramento, CA 95814 Phone: (415) 259-5412
Office Phone: (916) 808-7034
[email protected] [email protected]
21. Attorney Fees. Except as required by Section 10 above, each party shall bear its own costs and attorneys’ fees incurred in connection with this Agreement.
22. Entire Agreement. This Agreement and the exhibits attached hereto constitute the entire agreement between the parties concerning the subject matter thereof. No alteration, modification, or variation of the terms of this Agreement shall be valid unless made in writing and executed by both parties.
23. Waiver. The waiver by City of the breach of any condition, covenant or agreement herein contained to be kept, observed, and performed by Licensee shall in no way impair the right of City to avail itself of any remedy available for any subsequent breach thereof. No waiver will be effective unless it is in writing and signed by the waiving party.
24. Severability. If any portion of this Agreement or the application thereof to any person or circumstance shall be held invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and shall be enforced to the greatest extent permitted by law.
25. Enforcement of Agreement. This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of California. Litigation arising out of or connected with this Agreement may be instituted and maintained in state or federal courts located in the City of Sacramento, California only. The parties, consent to jurisdiction over their person and over the subject matter of any such litigation, in those courts, and consent to service of process issued by such courts.
26. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts; each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute but one and the same instrument.
[Signature Page Follows]
Executed as of the day and year first above stated.
EAH Inc., CITY OF SACRAMENTO, a California nonprofit a municipal corporation
public benefit corporation
By: By:
Print Name: Print Name: Matt Eierman
Title: Title: Director, Department of Public Works For Leyne Milsten, Interim City Manager
_ 568670______________________
State I.D. No. APPROVED AS TO FORM:
_________________________ By:
City Business Op. Tax. Cert. No. Deputy City Attorney
ATTEST:
By:
Assistant City Clerk
Exhibit A
The Premises
Exhibit B
Special Conditions
Licensee shall comply with the following special conditions during the term of the Agreement:
1) Inspection of premises: Licensee and City staff shall conduct an initial inspection of the Premises prior to Licensee’s commencement of activities under this Agreement.
2) Restoration of Premises . Upon termination of the Agreement, Licensee shall restore the Premises to the condition it was in prior to Licensee’s entry onto the Premises, or restore it to the reasonable satisfaction of City, at the sole discretion of City. All materials and equipment brought onto the Premises as well as any remnant materials or equipment must be removed from the Premises when this License terminates.
3) Photographs of Premises. Before initial entry on the Premises, Licensee shall email “before” photographs of the Premises to the City Representative identified in Section 20 of the Agreement. P rior to vacating the Premises, Licensee shall provide photographs of the Premises in the “after” condition. If no photographs are sent before initial entry on the Premises, then any damage to City’s assets and/or the Premises through the use of this License will be assumed to be Licensee’s responsibility and Licensee shall reimburse City for any such damage or destruction, or upon mutual agreement, replace or restore said facilities, equipment, or other property to City’s satisfaction, as specified in Section 5 of the Agreement.
4) Repairs. Licensee must immediately notify City staff of any damage caused to the Premises.
Licensee must make repairs, upon written notification by City of the need for repairs, within thirty (30) business days of receipt of said notification. If repairs are not completed within thirty (30) business days, City reserves the right to make repairs and charge Licensee the cost of such repairs.
5) Security; Hours of Operation. Licensee is responsible for security at Premises. City shall not be responsible for any theft or damage to Licensee’s equipment or materials. Licensee’s hours of operation at the Premises are limited to 8:00am to 5:00pm, Monday through Friday.
6) Storage of Hazardous Materials; Refueling. Licensee shall not store hazardous materials on the Premises. Refueling of equipment is not allowed on the Premises, nor on adjoining City property.