Staff recommends that the City Council adopt a Resolution approving the Property Transfer Option and Sale Agreement with joint escrow instructions granting Tri- Valley – San Joaquin Valley Regional Rail Authority a ten- year (10) option to purchase, for independent consideration of $100 for approximately 200 acres of City-O wned exempt surplus land
located at 15580 and 15178 West Schulte Road (APNs 209-2 30-029 and 209-230-030).
Prepared by: Karin Schnaider, Assistant City Manager
Reviewed by: Sara Cowell, Interim Finance Director
Midori Lichtwardt, Assistant City Manager
Approved by: Michael Rogers, City Manager
ATTACHMENTS:
Attachment A: Property Transfer Option and Sale Agreement with Joint Escrow Instructions
Agenda Item 3.G
September 6, 2022
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600.1
PROPERTY TRANSFER OPTION AND SALE AGREEMENT WITH JOINT ESCROW
INSTRUCTIONS
THIS P ROPERTY TRANSFER OPTION AND SALE AGREEMENT WITH JOINT ESCROW INSTRUCTIONS (this “ Agreement”) is entered into as of October ____, 2022 (“Effective Date”) by and between the City of Tracy ("Seller”) and the Tri-Valley—San Joaquin Valley Regional Rail Authority (“Buyer”). Seller and Buyer are hereinafter collectively referred to as the “Parties.”
RECITALS
WHEREAS, Sell er owns approximately 200 acres of real property located in the City of Tracy, County of San Joaquin, State of California, commonly referred to as 15580 and 15178 W.
Schulte Road (APNs 209-230-29 and 209-230-30) and more particularly described in Exhibit A attached hereto and incorporated herein (the “Property”); and WHEREAS, The Ca lifornia Legislature adopted Assembly Bill (AB) 758 in 2017 to establish a regional rail authority known as the Tri -Valley -San Joaquin Valley Regional Rail Authority, also known as Buyer, hereunder; and
WHEREAS, Seller appoints a member to the Board of Directors governing Buyer; and WHEREAS, T o address regional economic and transportation challenges, Buyer is planning and intends to deliver transit connectivity between the San Francisco Bay Area Rapid Transit District's system and the Altamont Corridor Express commuter service through a new 42- mile, 7-station passenger rail project known as “Valley Link” (the "Project"); and WHEREAS, The Valley Link Feasibility Report prepared by Buyer identified the City of Tracy as a location for a future Valley Link rail station and a proposed operations and maintenance facility (O & M Facility) on the Property; and
WHEREAS, the City Council of Tracy, pursuant to Resolution 2020-168, approved a term sheet for Buyer to acquire an option to acquire the Property , at nominal cost , as Seller’s full contribution towards the Valley Link Project; and
WHEREAS, Buyer is seeking federal funding and must demonstrate local match, which Seller’s Property will help satisfy; and
WHEREAS, Pursuant to the authority granted in Resolution 2022- ___, the City has declared the Property "exempt surplus property" pursuant to the term of the Surplus Land Act, as a transfer to another agency for that agency's use pursuant to California Government Code Section 54221(F)(1)(D).
WHEREAS, Pursuant to the authority granted in Resolution 2022-___, the City is willing to enter into this Agreement, as full satisfaction of Seller’s contribution to the Project, on the terms and conditions set forth herein.
ATTACHMENT A
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NOW, THEREFORE , in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Grant of P urchase Option. Seller hereby grants to Buyer the exclusive and irrevocable option ( "Option") to purchase the Property, for the Option Term, in accordance with this Agreement. The Option shall be exercised as hereinafter set forth.
2. Option Payment. Notwithstanding anything in this Agreement to the contrary, Buyer shall deliver to Seller , within 30 days after the execution of this Agreement, One Hundred D ollars ($100) (the “Independent Consideration”), which amount has been bargained for and agr eed to as consideration for Seller’s execution and delivery of this Agreement. The Independent Consideration is in addition to and independent of all other consideration provided for in this Agreement and is non-refundable in all events.
3. Term of Option. Th
e term of the Option will commence as of the Effective Date and will expire ten years after the Effective Date (the "Offer Expiration Date"). Buyer may exercise the Option to purchase the Property at any time during the Option Period pursuant to Section 5. After the Option Expiration Date, the Option will expire and become null and void, unless the Parties mutually agree to an extension of the term of the Option.
4. Compensation. Other than the Independent Consideration, Buyer shall pay no cash compensation for the Property. Transfer of the Property will constitute Seller’s full contribution to the Project.
5. Exercise of Option. The Option must be exercised by Buyer in Buyer's sole discretion, if at all, by giving notice of its exercise of the Option (" Exercise Notice"). The date the notice is provided to Seller is the "Exercise Notice Date."
6. Memorandum of Option. Bu yer and Seller shall execute and record in the Official Records of the County of San Joaquin a Memorandum of Option Agreement within 10 days after the Effective Date of this Agreement, in the form attached hereto as Exhibit B. If the Option becomes null or void, Buyer shall record a Quitclaim Deed and take any further actions necessary to remove any cloud on title due to the recordation of the Memorandum of Option.
7. Escrow; Escrow Instructions. No later than five (5) business days following the E xer cise
Notice Date the Parties shall open an escrow to consummate the purchase and sale of the Property pursuant to this Agreement at the office of ______________ (“Title Company” or “Escrow Agent”) or such other title company as may be mutually agreed upon by the Parties. Upon the opening of escrow, the Parties shall deposit with the Escrow Agent an executed copy of this Agreement, which shall serve as the joint escrow instructions of Buyer and Seller for this transaction, together with such additional instructions as may be executed by the Parties and delivered to the Escrow Agent.
8. Due Diligence. Buyer
shall have a ninety (90) day due diligence period starting as of the date of the Exercise Notice Date (“Due Diligence Period ”) to evaluate the legal, physical , and other conditions of the Property and determine if they are acceptable to Buyer. - 3 -
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a. Feasibility Studies. During the Due Diligence Period Buyer may, at no expense to Seller, undertake an inspection and review of the Property, including without limitation (i) a review of the physical condition of the Property, including but not limited to, inspection and examination of soils, environmental factors, Hazardous Materials (as defined in Section 20(a )(vii), and archeological information relating to the Property; (ii) a review and investigation of the effect of any zoning, maps, permits, reports, engineering data, regulations, ordinances, and laws affecting the Property, and (iii) an evaluation of the Property to determine its feasibility for Buyer's intended use. All of the foregoing is hereinafter collectively referred to as “Feasibility Studies .” Buyer may consult with or retain civil engineers, contractors, soils and geologic engineers, architects and other specialists in its investigation, and may consult with or retain other consultants to determine if the Property is suitable for Buyer's intended use. Notwithstanding anything to the contrary stated herein, Buyer acknowledges and agrees that it perform a Phase II environmental report only upon completion of a Phase I report and advanced written approval by Seller that a Phase II investigation is necessary and of Buyer’s proposed sampling plan for such Phase II investigation. b. Other matters. D
uring the Due Diligence Period, Buyer shall have the right to perform due diligence regarding the investigation, assessment, and monitoring of the environmental condition of the Property, and Buyer may inspect, examine, survey and review any other matters concerning the Property, including without limitation, any and all studies or reports provided by Seller, all contracts, leases, rental agreements and other obligations relating to the Property, and the Property’s conformity with all applicable laws and regulations. All of the foregoing is hereinafter collectively referred to as “Due Diligence Materials .” Notwithstanding the foregoing, Buyer acknowledges and agrees that the foregoing shall not grant Buyer approval rights with respect to Seller’s use of the Property prior to Closing. c. Property Condition. Buy
er acknowledges and agrees that if Buyer purchases the
Property, then it shall acquire the Property subject to any and all deficiencies, defects and other matters referred to or otherwis e set forth in (i) the Feasibility Studies, (ii) the Due Diligence Materials, (iii) any and all documents, studies or reports provided by Seller, (iv) all contracts and other obligations relating to the Property delivered to or otherwise made available to Buyer. Seller makes no representations or warranties with respect to the adequacy or accuracy of any report, study or other information prepared by a third party for or on behalf of Seller and provided to Buyer. Except for any breach of the representations made by Seller herein as specified in Section 20, Seller shall have no liability with respect to any matters disclosed to Buyer or contained in the Feasibility Studies, Due Diligence Materials or other materials developed for or provided to Buyer.
Notwithstanding the foregoing, Buyer acknowledges that the City has an antennae and related equipment on the Property, which Buyer agrees to keep in its existing location or relocate to a suitable replacement site, at Buyer’s sole cost.
d. Disapproval of Property Condition. Should Buyer fa
il to approve the condition of
the Property or its feasibility for Buyer's intended use in writing within five (5) business days following the end of the Due Diligence Period, Buyer shall have the right, exercisable by giving written notice to Seller, to cancel the escrow and terminate this Agreement. The exercise of this right by Buyer shall not constitute a waiver by B uyer of any other rights B uyer may have at law or in equity.
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9. Seller Documents. Seller agrees to make available to Buyer within five (5) business days following the Exercise Notice Date, any and all information, studies, reports, investigations, contracts and other obligations concerning or relating to the Property which are in Seller’s possession or which are reasonably available to Seller, including without limitation surveys, studies, reports and investigations concerning the Property’s physical, environmental or geological condition, habitability, or the presence or absence of Hazardous Materials in, on or under the Property and its compliance with Environmental Laws (as defined in Section 20(a)(vii)).
10. Right of Entry. During the Due Diligence Period, Buyer and Buyer's agents and employees shall have the right, upon rea sonable written notice to Seller , to enter upon the Property for the purpose of inspecting, examining, surveying and reviewing the Property (the “ Due Diligence Inspections”). Buyer's inspection, examination, survey and review of the Property shall be at Buyer's sole expense. In addition to the terms set forth in Section 8a, Buyer shall obtain Seller's advance consent in writing to any proposed physical testing of the Property by Buyer or Buyer's contractors or agents, which consent shall not be unreasonably conditioned, withheld or delayed.
Buyer shall repair, restore and return the Property to its original condition after such physical testing, at Buyer’s sole expense. Buyer agrees to indemnify Seller and hold Seller harmless from and against all liability, loss, cost, damage and expense (including, without limitation, reasonable attorney’s fees and costs of litigation) resulting from entry upon the Property by Buyer or its employees, consultants, contractors or agents (other than mere discovery of pre -existing conditions), except to the extent that such liability, loss, cost, damage and expense arises as a result of the gross negligence or other wrongful conduct of Seller or its employees (while acting in the capacity of staff to Seller), consultants, contractors or agents.
11. Title Condi
tion.
a. Buyer shall have the right to approve any and all matters of and exceptions to title of the Property, including any surveys, the legal description, or other title matters, as disclosed by the following documents and instruments, which documents (collectively, “ Title Documents”) shall be delivered to Buyer no later than three (3) days from Exercise Notice Date: (A) a preliminary title report issued by Escrow Holder with respect to the Real Property ("Preliminary Report") and (B) copies of all documents, whether recorded or unrecorded, referred to in such Preliminary Report; provided, however, Seller shall not be obligated to provide separate copies of documents referenced in the Preliminary Report if such documents are accessible via hyperlinks incorporated into such Report, are not in Seller’s actual possession ; provided, however, in the event that Buyer requires additional information or is not satisfied with results, it shall be Buyer’s responsibility (at its sole cost and expense) to perform UCC lien searches or procure professional services for such services. Seller shall provide such documents within five (5) business days of the Exercise Notice Date.
b. The Real Property shall be conveyed to Buyer by Seller by grant deed, in the recordable form customarily used by Escrow Holder in the County (" Grant Deed"). Such Grant Deed shall convey fee simple title to the Real Property to Buyer, subject only to (a) a lien to secure payment of current real estate taxes, not delinquent; (b) the lien of current supplemental taxes, not delinquent; and (c) any liens, encumbrances, restrictions and charges against fee simple title which are expressly approved by Buyer or are Disapproved Exceptions in accordance with this Section 11 (collectively “Permitted Exceptions”).
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c. Title Objections. Within fifteen (15) days after recei pt of the specified Title Documents, Buyer shall give Seller written notice (“ Buyer’s Title Notice”) of Buyer's approval or disapproval of the legal description and every item or exception disclosed by the Title Documents, which approval or disapproval may be exercised by Buyer in its sole and absolute discretion. Buyer’s failure to provide Buyer’s Title Notice to Seller within the specified time period shall be deemed Buyer's approval of all liens, encumbrances, restrictions and claims against the Property reflected in the Title Documents. If Buyer so disapproves of any matter of title shown in the Title Documents, then within twenty (20) days of Buyer's receipt of such Title Documents, Seller may give Buyer written notice (“ Seller’s Title Notice ”) of those disapproved exceptions that Seller is willing to eliminate or cure. Seller’s failure to deliver Seller’s Title Notice by the time set forth herein, shall be deemed Seller's refusal to remove the disapproved title matters (“Disapproved Exceptions”). If Seller is unable or unwilling to remove, or is deemed to refuse to remove, any of the title matters objected to by Buyer, Buyer may elect to either (1) purchase the Property subject to the Disapproved Exceptions, or (2) terminate this Agreement, provided s uch election is made before expiration of the Due Diligence Period. If no election is made, it shall be deemed to have been made so as to purchase the Real Property subject to the D isapproved Exceptions. Regardless of the foregoing, Seller must remove any Monetary Liens (if any) prior to Closing. If this Agreement is terminated pursuant to this Section 11(c), (x) any further obligations of the parties under this Agreement shall cease (except those obligations that are expressly intended to survive the ter mination of this Agreement); (y) all Deposits shall immediately be returned to Buyer, net of any escrow or title costs charged by the Title Company; and (z) Buyer shall return to Seller all Due Diligence Materials within five (5) business days from such termination date.
12. Title Policy.
Title Company will issue a title commitment for a n A LTA Extended Coverage Owner’s Title Insurance Policy (“Title Policy ”) in the amount of $_________ for the benefit and protection of Buyer, showing title to the Property vested in Buyer, subject only to the Permitted Exceptions (as defined below), including such endorsements as may reasonably be requested by Buyer. Buyer shall be responsible for all costs for issuance of the Title Policy as well as any fees for the title search, title commitment, or costs associated with extended coverage or other endorsements or lenders' title policies. Notwithstanding the foregoing, Buyer may, in its sole discretion, elect not to obtain such Title Policy.
13. Conveyance of Title. A
t the close of escrow, Seller shall convey by Grant Deed to Buyer fee simple title to the Property, free and clear of all recorded and unrecorded liens, encumbrances, easements, and leases, except the Permitted Exceptions and a r ight of reversion to Buyer as follows: a) in the event that Buyer fails to use the Property as an O & M Facility within ten (10) years of Closing Date, then the entire Property shall revert back to Seller or, alternatively, (b) in the event only a portion of the Property is used as an O & M Facility, then such portion of the Property that is not used either to satisfy a grant match requirement and/or constitutes non-exempt surplus land under the Surplus Land Act (as currently adopted) shall revert back to Seller, either reversion to occur ten (10) years from the Closing Date . The Grant Deed shall contain a reversionary interest to Seller in the event the Property is not used for the Project within ten (10) years of the Close of Escrow. The specific wording of the reversionary interest shall be subject to review by federal grant -making agencies to ensure that it will not interfere with the use of the Property as a local match for potential federal aid for the Project. - 6 -
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14. Closing Documents.
a. Seller. No later than three (3) business days prior to the Closing Date, Seller shall deposit into escrow all of the following:
i. A Grant Deed, substantially in the form attached hereto as Exhibit C, duly executed, and acknowledged, sufficient to convey to Buyer good and marketable fee simple title to all of the Property, subject only to the Permitted Exceptions and a right of reversion to Seller reflecting the terms set forth in Section 13, the specific language for which terms the Parties shall negotiate and finalize for the Grant Deed before Closing; and ii. Such additional duly executed instruments and documents as the Escrow A
gent may reasonably require to consummate the transaction contemplated hereby. b. Buyer. No l ater than three (3) business days prior to the Closing Date, Buyer shall deposit into escrow all of the following:
i. Duly executed and acknowledged Certificate of Acceptance as required by G
overnment Code Section 27281; and
ii. Such additional duly executed instruments and documents as the Escrow Agent may reasonably require to consummate the transaction contemplated hereby.
15. Close of Escrow. As used in this Agreement, the “ C lose of Escrow ” or “Closing ” or “Close” shall mean the date the Grant Deed (“Grant Deed”) conveying fee title to the Property to Buyer is recorded in the Office of the Recorder of the County of San Joaquin, California (the “Official Records”) as provided for herein.
i. The Clos i ng must occur within sixty (60) days afte r the Due Diligence Period ends, provided all conditions to close have been met at least five (5) business days prior to Closing. The Parties shall execute such additional escrow instructions as may be customarily and reasonably requested by Escrow Holder to enable the Closing to proceed. At least one (1) Business Day prior to the scheduled Closing Date, Seller and Buyer shall each deposit with the Escrow Holder executed estimated closing statements consistent with this Agreement, in the form reasonably required by the Escrow Holder.
ii. The Escrow Agent shall close escrow by: (a) causing the Grant Deed to be recorded in the Official Records; (b) issuing the Title Policy and delivering same to Buyer (unless Buyer has waived this requirement); and ( d) delivering to Buyer a conformed copy of the Grant Deed, indicating recording information thereon. Possession of the Property shall be delivered to Buyer at the close of escrow.
16. Closing Costs. B
uyer shall pay all costs of title insurance and title reports, escrow fees (including the costs of preparing documents and instruments), recording fees, conveyance fees and transfer taxes (if any).
17. Prorations. At the close of escrow, the Escrow Agent shall make the following prorations:
property taxes (if any are applicable to the Property) shall be prorated as of the close of escrow - 7 -
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based upon the most recent tax bill available, including any property taxes which may be assessed after the close of escrow but which pertain to the period prior to the transfer of title to the Property to Buyer, regardless of when or to whom notice thereof is delivered.
18. Buyer's C
onditions to Closing. The close of escrow and Buyer's obligation to purchase the Property are conditioned upon: (i) the performance by Seller of each obligation to be performed by Seller under this Agreement within the applicable time period, or the waiver by Buyer of such obligations; (ii) Seller’s representations and warranties contained in this Agreement being true and correct as of the Close of \Escrow; (iii) the commitment by Title Company to issue and deliver the Title Policy, subject only to the Permitted Exceptions; and (iv) Buyer’s approval of the condition of the Property pursuant to Section 8.
Should any condition to closing fail to occur, excepting any such conditions that have been waived by Buyer, Buyer shall have the right, exercisable by giving written notice to Seller, to cancel the escrow and terminate this Agreement, in which case Buyer shall recover any and all amounts paid by Buyer, as applicable, to Seller or deposited with the Escrow Agent by or on behalf of Buyer, net of any closing or escrow costs. The exercise of this right by Buyer shall not constitute a waiver by Buyer of any other rights Buyer may have at law or in equity.
19. Seller’ s Conditions to Closing. The Close of Escrow and Seller ’s obligation to sell the Property pursuant to this Agreement are conditioned upon: (i) the performance by Buyer of each obligation to be performed by Buyer under this Agreement within the applicable time period, or waiver by Seller of such obligation; and (ii) Buyer's representations and warranties contained in this Agreement being true and correct as of the Close of Escrow.
20. Seller's Representations and Warranties.
a. Seller hereby represents and warrants that to Seller's actual knowledge, except as disclosed in writing to Buyer, as of the Close of Escrow:
i. That Seller owns fee title to the Property. Seller has not previously sold, transferred, or conveyed the Property that would affect or impair Seller’s ability to perform under this Agreement, and Seller has not entered into any executory contracts for the sale of the Property (other than this Agreement), nor do there exist any rights of first refusal or options to purchase the Property.
ii. Except for any Permitted Exceptions and any agreements that have been disclosed to Buyer in writing, there are no leases, licenses, contracts or other agreements relating to the Property which will be in force after the Closing Date. iii. There is no pending (nor has Seller received notice of any threatened) action, litigation, condemnation or other proceeding against the Property or against Seller with respect to the Property.
iv. Seller has not received written notice from any government al authority having jurisdiction over the Property to the effect that the Property is not in compliance with applicable laws and ordinances (including any laws concerning the use, generation, handling, disposal or storage of Hazardous Materials (as defined below)). - 8 -
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v. Seller has not received written notice of any action, suit or proceeding pending, and Seller has no actual knowledge of any threatened against or affecting all or any portion of the Property, or relating to or arising out of the ownership, management, development, proposed development or operation of the Property, or which would affect Seller’s ability to perform its obligations under this Agreement in any court or arbitration or other quasi -judicial proceeding or before or by any governmental or quasi-government authority. vi. Seller has not received any notice from any insurer of defects or conditions relating to the Property that must be corrected.
vii. There has been no release of any Hazardous Material at, under or upon the P
roperty, in an amount which would, as of the date hereof, give rise to an Environmental Compliance Cost (as defined below). The term “ Hazardous Material ” shall mean asbestos, petroleum products, and any other hazardous waste or substance which has, as of the date hereof, been determined to be hazardous or a pollutant by the U.S. Environmental Protection Agency, the U.S. Department of Transportation, or any State or Federal instrumentality authorized to regulate substances in the environment which has jurisdiction over the Property ( each being referred to herein as an “Environmental Agency”) which substance causes the Property (or any part thereof) to be in material violation of any applicable Environmental Law, and shall include, but not be limited to: (A) a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 (14), Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. §1321; (B) a “hazardous waste” pursuant to Section 1004 or Section 3001 of the Resource Conservation and Recovery Act, 42 U.S.C. §§6903, 6921; (C) a toxic pollutant under Section 307(a)(1) of the Federal Water Pollution Control Act, 33 U.S.C. §1317(a)(1); (D) a “hazardous air pollutant” under Section 112 of the Clean Air Act, 42 U.S.C. §7412; (E) a “hazardous material” under the Hazardous Materials Transportation Uniform Safety Act of 1990, 49 U.S.C. App. §1802(4); (E) a “hazardous material” pursuant to the California Health & Safety Code; or (F) toxic or hazardous pursuant to regulations promulgated under the aforementioned laws (all of the foregoing laws, rules and regulations as any may be amended from time to time being collectively referred to herein as “Environmental Laws”); provided, however, that the term “Hazardous Material” shall not include (x) motor oil and gasoline contained in or discharged from vehicles not used primarily for the transport of motor oil or gasoline, or (y) materials which are stored, used, held, or disposed of in compliance with all applicable Environmental Laws. The term “ Environmental Compliance Cost ” means any out -of-pocket cost, fee or expense reasonably incurred directly to satisfy any requirement imposed by an Environmental Agency to bring the Property into compliance with applicable Environmental Laws directly relating to the existence on the Property of any Hazardous Material but excepting therefrom any costs resulting actions or omissions of Buyer caused by Buyer or its agents, either from its Feasibility Studies or otherwise.
b. Seller f
urther represents and warrants that this Agreement and all other documents delivered or to be delivered in connection herewith prior to or at the close of escrow shall at the time of their delivery: (a) have been duly authorized, executed, and delivered by Seller; (b) be the binding obligations of Seller; (c) collectively be sufficient to transfer all of Seller’s right, title and interest in and to the Property; and (d) not be in violation of the provisions of any agreement to which Seller is a party or which affects the Property. Seller further represents and warrants that the persons who have executed this Agreement on behalf of Seller are authorized to do, that Seller - 9 -
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has the legal right to enter into this Agreement and to perform all of its terms and conditions, and that this Agreement is enforceable against Seller in accordance with its terms. c. Seller shall notify B uyer of any facts that would cause any of the representations contained in this Agreement to be untrue as of the close of escrow. If Buyer reasonably believes that any such fact materially and adversely affects the Property, B uyer shall have the option to terminate this Agreement by delivering written notice thereof to Seller. In the event Buyer elects to terminate this Agreement, all funds and documents deposited into escrow by or on behalf of Buyer shall be returned to Buyer, and all rights and obligations hereunder shall terminate.
21. Seller’ s Covenants. Seller covenants that from the Notice Exercise Date and through the Close of Escrow, Seller: (i) shall not permit any liens, encumbrances, or easements to be placed on the Property other than Permitted Exceptions; and (ii) shall not enter into any agreement regarding the sale, lease, rental, management, repair, improvement, or any othe r matter affecting the Property that would be binding on Buyer or the Property after the Close of Escrow without the prior written consent of Buyer, which may be given or withheld in Buyer’s reasonable discretion.(.
22. Buyer's Representations, Warranties and Covenants. Buyer represents, warrants and covenants that this Agreement and all other documents delivered in connection herewith, prior to or at the Close of Escrow shall at the time of their delivery: (i) have been duly authorized, executed, and delivered by Buyer; (ii) be the binding obligations of Buyer; and (iii) not be in violation of the provisions of any agreement to which Buyer is a party. Buyer further represents and warrants that the persons who have executed this Agreement on behalf of B uyer have been duly authorized to do, that Buyer has the legal right to enter into this Agreement and to perform all of its terms and conditions, and that Agreement is enforceable against Buyer in accordance with its terms.
23. Buyer's Post-Cl osing Obligations. If the Property is not used for the Project within ten (10) years of the Close of Escrow, Buyer's interest in the Property shall terminate and the Property will revert to Seller pursuant to Seller's Power of Termination, as detailed in the Grant Deed . Buyer shall remain obligated under this Section after the transfer of the Property, and the restrictions on use and conditions for continued ownership by Buyer contained in this Section 23 shall be contained in the Grant Deed and survive closing.
24. Condemnation. If prior to Close of Escrow, any por tion of the Property is taken by eminent
domain (or an action of eminent domain has been commenced against all or any portion of the Property) (excluding for purposes of this Section, the exercise of any eminent domain powers by Buyer), upon Seller’s receipt of notice thereof Seller shall promptly notify Buyer of such fact, and Buyer shall have the option to terminate this Agreement upon notice to Seller given not later than twenty (20) days after B uyer's receipt of Seller’s notice. If B uyer elects to terminate this Agreement, all funds and documents deposited into escrow by or on behalf of B uyer shall be returned to Buyer, net of any escrow or title costs, and all rights and obligations hereunder shall terminate.
25. Notices. Exc ept 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 respective addresses specified below or 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:
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a. personal delivery, in which case notice is effective upon delivery; b. 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; c. nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; or
To Seller: City of Tracy
City Attorney
333 Civic Center Plaza
Tracy, CA 95376
To Buyer: Tri-Valley – San Joaquin Valley Regional Rail Authority 2600 Kitty Hawk Road, Suite 103
Livermore, CA 94551
Attn. Executive Director
With a copy to: Michael N. Conneran
Hanson Bridgett LLP
1676 N. California Blvd., Suite 620
Walnut Creek, CA 94596
26. No Brokers.
Buyer hereby represents and warrants to Seller that Buyer has retained no broker or other party on behalf of Buyer to whom a commission or finder’s fee is due with respect to the transactions contemplated hereby. Buyer shall defend, indemnify and hold Seller harmless from and against all claims, expenses, costs, or arising in connection with a breach of this warranty and representation by Buyer. Seller hereby represents and warrants to the Buyer that Seller has retained no broker or other party on behalf of Seller to whom a commission or finder’s fee is due with respect to the transactions contemplated hereby. Seller shall defend, indemnify and hold Buyer harmless from and against all claims, expenses, costs, or arising in connection with a breach of this warranty and representation by Buyer. T he terms of this Paragraph shall survive the expiration or earlier termination of this Agreement.
27. Expenses. Except as otherwise provided herein, each party will bear their own expenses associated with this Agreement, the acquisition and other transactions contemplated herein, including, without limitation, legal, accounting, due diligence and other fees and disbursements of consultants and advisors.
28. Attorneys’ Fees .
If either Party fails to perform any of its obligations under this Agreement, or if any dispute arises between the Parties concerning the meaning or interpretation of any provision hereof, then the prevailing party in any proceeding in connection with such dispute shall be entitled to the costs and expenses it incurs on account thereof and in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys’ fees and disbursements.
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29. Survival. The representations and warranties in this Agreement and all indemnification obligations shall survive the Closing. The obligation to perform those provisions of this Agreement that are not to be performed until after Close of Escrow shall survive the Close of Escrow until such time as all obligations described in this Agreement have been fully performed (and all payments and costs described herein shall have been fully paid) by the responsible party.
30. General Provisions.
a. Entire Agreement. This Agreement, together with Exhibits A through C constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements with respect thereto.
b. No Merger. The obligations stated herein that are intended to operate after the Closing shall not merge with the transfer of title to the Property but shall remain in effect until fulfilled as provided herein.
c. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. d. Interpretation; Captions. The section headings used herein are solely for convenience and shall not be used to interpret this Agreement. 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 negotiati on 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. e. Exhibits. Exhi
bits A through C attached hereto are incorporated herein by this reference and made a part of this Agreement.
f. No Th ird-Party Beneficiaries. Nothing contained in this Agreement is intended by the Parties, nor shall any provision of this Agreement be deemed or construed by the Parties or by any third person, to be for the benefit of any third party, nor shall any third party have any right to enforce any provision of this Agreement or be entitled to damages for any breach by Buyer or Seller of any of the provisions of this Agreement, except as expressly provided herein with respect to Buyer.
g. Amendments. Thi
s Agreement may be modified or amended only by an instrument in writing executed by both Buyer and Seller.
h. Assignment Prohibited. This Agreement and the rights conferred her eunder may not be assigned by operation of law or otherwise absent the express written consent of the Parties, except as otherwise expressly provided herein.
i. Escrow Cancellation Charges. I f the escrow fails to close by reason of a default by Buyer, or Seller hereunder, such defaulting party shall pay all escrow or other Title Company charges. If the escrow fails to close for any reason other than default by Buyer or Seller, then Buyer and Seller shall each pay one-half of such charges. - 12 -
18863600.1
j. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original, and all of which taken together shall constitute one agreement. This Agreement may be executed and transmitted by facsimile, or may be executed, scanned and transmitted by e -mail, and when so transmitted shall be a binding obligation on the party that signed and transmitted the document and shall be deemed to be in full compliance with the provisions of California Civil Code §1624.
k. Further Assurances. S
eller and Buyer each agree to undertake such other actions as may reasonably be necessary to carry out the intent of this Agreement, including without limitation, the execution of any additional documents which may be required to effectuate the transactions contemplated hereby.
l. Severability. I
f any term, provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged thereby.
m. Non-Li
ability of Officials, Employees and Agents. No member, official, employee or agent of Buyer or Seller shall be personally liable in the event of any default or breach hereunder by either Party.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Dat
e.
CITY OF TRACY TRI-VALLEY – SAN JOAQUIN
VALLEY REGIONAL RAIL
AUTHORITY
By: B y:
Name: Name:
Title: Title:
Date: Date:
APPROVED AS TO FORM: APPROVED AS TO FORM:
Exhibit A – Page 1 2/6/2019
18863600.1
EXHIBIT A
DESCRIPTION OF PROPERTY
Exhibit C – Page 1 2/6/2019
18863600.1
EXHIBIT B
MEMORANDUM OF OPTION
Exhibit C – Page 2 2/6/2019
18863600.1
EXHIBIT C
DRAFT FORM OF GRANT DEED
Exhibit C – Page 3 2/6/2019
1886
3600.1
RECORDING REQUESTED BY
AND WHEN RECORDED
MAIL TO:
)
)
)
)
)
)
)
(SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE)
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
EXEMPT FROM DOCUMENTARY TRANSFER TAX
PER REV. AND TAXATION CODE §11922
APN: ____________________
GRANT DEED
For valuable consideration, receipt of which is hereby acknowledged, the City of Tracy, a muni
cipal corporation of the State of California (“Grantor”) hereby grants to the Tri-Valley – San Joaquin Valley Regional Rail Authority, a _____, as “Grantee”, all that real property located in the County of San Joaquin and more particularly described in Exhibit A attached hereto and incorporated herein by reference (“Property”), subject to a right of reversion to Seller reflecting the terms set forth in Section 13, the specific language for which terms the Parties shall negotiate and finalize for the Grant Deed before Closing.
IN WITNESS WHEREOF , Gra
ntor has executed this Grant Deed as of
_______________, 20___.
GRANTOR
CITY OF TRACY
By:
ATTEST:
APPROVED AS TO FORM:
APPROVED AS TO FORM AND LEGALITY
________________________
CITY
ATTORNEY’S OFFICE
TRACY CIT
Y COUNCIL
RESOLUTION NO. _______________
ADOPT A RESOLUTION APPROVING THE PROPERTY TRANSFER OPTION
AND SALE AGREEMENT WITH JOINT ESCROW INSTRUCTIONS GRANTING TRI-VALLEY – SAN JOAQUIN VALLEY REGIONAL RAIL AUTHORITY A TEN
YEAR OPTION TO PURCHASE, FOR INDEPENDENT CONSIDERATION OF $100 FOR APPROXIMATELY 200 ACRES OF CITY-OWNED EXEMPT
SURPLUS LAND LOCATED AT 15580 AND 15178 WEST SCHULTE ROAD (APNs 209-230-029 AND 209-230-030)
WHEREAS, The City of Tracy (City) is the owner of two parcels totaling approximately 200 acres located on 15580 and 15178 West Schulte Road (APNs 209-230-029 and 209-230-030) (Property); and
WHEREAS, In 2006, the City acquired the Property from the United States Department of Energy, of which 150.18 acres were deed restricted for educational or recreational purposes; and WHEREAS, In 2020, the City acquired 300 acres of recreation land in North Tracy from the Wastewater Fund to transfer the deed restriction of educational and recreational use from the Property to the new Legacy Fields and the future Nature Park; and WHEREAS, The Property has not been utilized by the City for any public purpose other than for the siting of public safety antennae; and
WHEREAS, The California Legislature adopted Assembly Bill (AB) 758 in 2017 to establish a regional rail authority known as the Tri-Valley -- San Joaquin Valley Regional Rail Authority (Authority); and
WHEREAS, The City appoints a member to the Boar d of Directors gove rning the Authority; and
WHEREAS, To address regional economic and transportation challenges, the Valley Link Authority is planning and intends to deliver transit connectivity between the San Francisco Bay Area Rapid Transit District's system and the Altamont Corridor Express commuter service through a new 42-mile, 7-station passenger rail project known as “Valley Link”” (the "Project"); and WHEREAS, The Valley Link Feasibility Report prepared by the Authority identified the City of Tracy as a location for a future Valley Link rail station and a proposed operations and maintenance facility on the Property; and
WHEREAS, On September 15, 2020, the City Council adopted Resolution 2020- 168, approving a term sheet for an option contract to convey the Property to the Authority, which desires to use the Property for an Operations and Maintenance Facility (O&M Facility); and WHEREAS, Pursuant to Government Code Section 54221(b)(1) of the California Surplus Land Act (SLA), the City must declare the Property as either surplus or exempt surplus prior to beginning the disposition process; and
WHEREAS, The California Housing and Community Development (HCD) Guidelines for the Surplus Land Act requires a city to transmit any declaration of exempt surplus to HCD and to wait for 30 days prior to disposition of any such property declared surplus; and
WHEREAS,
Pursuant to Government Code Section 54221( f)(1)(D), property that is transferred to another public agency for its use is "exempt surplus land"; and WHEREA
S, The Authority intends to use the Property as the O&M Facility for the Project; and
WHEREAS, The Authority is seeking federal funding and must demonstrate local match, which the City’s Property will satisfy; and
WHEREAS, On September 6, 2022, pursuant to Resolution 2022- ___, the City Council declared the Property as exempt surplus land i n accordance with the SLA Government Code Section 54221(f)(1)(D); and
WHEREAS, In accordance with HCD Guidelines for the SLA, the City of Tracy transmitted Resolution 2022-___ to HCD; and
WHEREAS, As effectuation of the Council’s intent reflected in Resolution 2022- 168, staff has negotiated an option agreement with the following key provisions:
• There is
no cost to the Authority for the purchase value of the Property, except that the Authority must pay $100 of Independent Consideration for the option and all closing costs, as well as the cost to relocate the existing antenna facility to a suitable site if the Authority does not wish to keep it at the Property. • The value of the Property will be considered an in-kind contribution by the City to the Authority to be leveraged for additional grant funding, and the consummation of the conveyance will constitute the City’s full contribution to the Project. • The Authority will have a term of ten years to exercise the option. • If the Property is not used by the Authority within ten (10) years of the purchase date, the Property will revert to the City, and if less than the entire Property is used for the O&M Facility, then such portion that either is not used for a grant match or constitute surplus land under the SLA will revert back to the City.
WHEREAS, the specific terms and conditions of the proposed option agreement are set forth in the form of agreement attached hereto as Exhibit A and referred to as the “Property Transfer Option and Sale Agreement with Joint Escrow Instructions” (Agreement); and WHEREAS, the Board of Directors of Valley Link Authority will consider this same form of agreement for approval at its September 14, 2022 meeting; and WHEREA
S, On May 12, 2021, pursuant to the California Environmental Quality Act (CEQA), the Board of Directors of Valley Link Authority certified a Final Environmental Impact Report (FEIR) for the Project, which included the O&M Facility, and also adopted appropriate Findings of Fact, a Statement of Overriding Considerations, and a Mitigation Monitoring and Reporting Program; now, therefore, be it
Resolution 2022-
RESOLVED
: That the City Council of the City of Tracy hereby adopts the recitals as findings; and be it further
RESOLVED
: That the City Council approves the Agreement and finds that consummation of such Agreement, on the terms and conditions set forth therein, shall constitute full satisfaction of the City’s contribution to the Project; and be it further
RESOLVED
: That the City Council authorizes the execution of the Agreement upon satisfaction of the California SLA and the HCD Guidelines; and be it further
RESOLVED
: That the City Council hereby finds and determines, after independent review and consideration, as supported by substantial evidence in the record and for the reasons set forth in this Resolution, and, each as a separate and independent basis, that the actions authorized by this Resolution were fully analyzed by the FEIR for the Project, which included the O&M Facility certified by the Board of Directors of Valley Link Authority on May 12, 2021, and their adopted Findings of Fact, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program, and are exempt from additional review and analysis under CEQA and the CEQA Guidelines (Cal. Code Regs., title 14, section 15000 et seq.). Each of the foregoing provides a separate and independent basis for CEQA compliance and, when viewed collectively, provides an overall basis for CEQA compliance.
* * * * * * * * * * * *
* *
The foregoing Resolution 2022-_____ was adopted by the Tracy City Council on __________, by the following vote:
AYES: COUNCI
L MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTENTION: COUNCIL MEMBERS:
___________________________________________
NANCY D.
YOUNG
Mayor of the City of Tracy, California
ATTEST:
ADRIANNE RICHARDSON
City Clerk and Clerk of the Council of the
City of Tracy, California
Resolution 2022-