Agenda Item No. 25
YUCAIPA CITY COUNCIL
AGENDA REPORT
TO: Honorable Mayor and City Council
FROM: Fermin Preciado, Director of Development Services/City Engineer Ryan C. Miller, Housing and Economic Development Analyst 6 FOR: City Council Meeting of May 13, 2024
SUBJECT: Exclusive Negotiation Agreement with 4 Star Solar, Inc. for a portion of property identified as Assessor's Parcel Numbers 0299-321-86 and 0299-321-85 located at 32660 Yucaipa Boulevard
RECCOMMENDATION:
That the City Council authorize the City Manager to approve the Exclusive Negotiation Agreement (ENA) with 4 Star Solar, Inc. to negotiate the potential purchase of City -owned property located at 32660 Yucaipa Boulevard, and authorize the City Manager to make any necessary non - substantive changes to the ENA and execute all documents described and required by the ENA.
BACKROUND/DISCUSSION:
On September 27, 2021, the City Council adopted Resolution No. 2021-58 declaring a portion of City owned real property located at 32660 Yucaipa Boulevard as surplus property and not necessary for public use pursuant to Government Code Section 54221. The property, approximately 1 acre in size, is currently zoned for General Commercial land uses. The surrounding land uses to the subject property are vacant General Commercial land to the west, the Fire Station No. 2 facility to the east and the 131h Street Sports Complex to the north.
The City is the fee simple title owner of the property and since the property has been declared as surplus and not needed for public use, the development of the property for general commercial use would be appropriate given its location on Yucaipa Boulevard adjacent to other existing commercial uses.
Following the adoption of Resolution No. 2021-58, the owner of the Tuscano's Pizza and Pasta restaurant, 4 Star Solar, Inc. (Toscano's) provided the City with a letter of intent to purchase the surplus property to develop a restaurant business with an event/meeting space and bar. With this proposed new development, Tuscano's aims to relocate their existing restaurant business to this
new location, enhance their services, and provide residents and visitors with a larger and more spacious environment than their current location across the street at the southwest corner of Yucaipa Boulevard and 131" Street.
After reviewing the letter of intent to purchase, the City Council directed staff to prepare an Exclusive Negotiation Agreement (ENA) between the City and Toscano's allowing both parties to negotiate with each other, on an exclusive basis, the terms and conditions of a Disposition and Development Agreement (DDA) that could result in Toscano's acquisition of the property and subsequent development of the restaurant on the property. The proposed ENA gives both parties a reasonable period of one (1) year to negotiate and conduct their due diligence. The ENA will serve as the framework for the negotiations between the City and Tuscano's which will ultimately dictate the development of the site as a commercial restaurant business. ENA's are a valuable tool for the City to promote economic development opportunities in a manner that is consistent with City Council's adopted goals.
The ENA also affirms that the City will not negotiate with any other developer for the development of the site during the term of the ENA. The City Council's approval of an ENA does not convey project approval or obligate the City to grant any entitlements for the subject property. If approved, a DDA for the sale and disposition of the City surplus property could be negotiated and brought back to City Council for consideration in the future.
FISCAL IMPACT:
There is no fiscal impact as a result of this proposed City Council action.
Approved by:
Attachments:
1. Conceptual Site Plan
2. Exclusive Negotiating Agreement — ENA
Attachment 1
9-AM PA;K
FIRE STATION No. 2
----s
Yucaipa Blvd.
Attachment 2
EXCLUSIVE NEGOTIATING AGREEMENT
This EXCLUSIVE NEGOTIATING AGREEMENT (this "ENA") is dated May _, 2024 (the "Effective Date") and is entered into by and between the CITY OF YUCAIPA (the "City") and 4 Star Solar Inc., a California Corporation (the "Developer"). The City and the Developer are sometimes individually referred to as a "Party" and are sometimes collectively referred to as the "Parties."
RECITALS
A. The City owns the land in the City of Yucaipa, California that is generally depicted on the "Site Map" attached hereto as Attachment No. 1 (the "Site"), and legally described as:
B. The City has received a proposal from Developer for the purchase of the Site by the Developer and the development of a restaurant (the "Project") on the Site.
C. The Developer and the City desire to negotiate with each other on an exclusive basis to establish the terms and conditions of a Disposition and Development Agreement (the "Agreement") that would result in the Developer's acquisition and development of the Site with the Project, and thus desire to enter into this ENA setting forth, among other things, the terms pursuant to which the Parties will negotiate on an exclusive basis for a specified period regarding the terms of the Agreement.
E. During the ENA Period (as defined below), the staff, consultants and attorneys of the City will devote substantial time and effort in meeting with the Developer and its representatives, reviewing proposals, plans and reports, and negotiating and preparing the terms of this ENA and the Agreement.
NOW, THEREFORE, the Parties hereto agree as follows:
1. The term of this ENA shall commence on the Effective Date and shall end on the earlier of: (i) the date that is one year after the Effective Date of this ENA, as may be extended by the City Manager under this Section 1, or (ii) the date on which the City terminates this ENA as provided in Section 2 below (the "ENA Period"). Provided that the Developer is not in default under this ENA and the City has not terminated this ENA pursuant to Section 2 below, the ENA period may be extended by the mutual written agreement of Developer and the City Manager of the City (acting for the City) for 12 calendar months and respectively); provided, however, that the City Manager may only grant such an extension if any one of the following apply: (i) the Developer is not then in default under this ENA (including, without limitation, Section 7 below); (ii) there are no material issues remaining to be resolved with respect to the Agreement; and (ill) to obtain City Council approval of the Agreement (which approval may be given or withheld in the City's sole and absolute discretion). The CEQA Documents shall be prepared by the City once the Agreement has been executed and escrow is opened with the Escrow and Title Company.
2. The City may terminate this ENA if the Developer should fail to comply with or perform any provision of this ENA, or if progress is not being made in negotiations hereunder, as determined by City in good faith but in its sole and absolute discretion.
3. If the Developer and the City staff have not fully negotiated and preliminarily agreed upon the terms of the Agreement prior to the end of the ENA Period, then this ENA may be terminated by either Party and, except as expressly provided herein, neither party hereto shall have any further rights or obligations under this ENA. In no event shall any such negotiated Agreement become effective unless duly approved by the City Council after compliance with the California Environmental Quality Act and all other applicable laws.
4. During the ENA Period (as extended under Section 1, if applicable), the City shall not negotiate with any person or entity other than the Developer for the sale, lease or development of the Site.
S. Sale price will be fair market value as determined by an appraisal conducted by an appraiser selected by the City in its sole discretion, which appraisal shall be completed not less than six (6) months prior to closing. Further, if for any reason the negotiated sale price were to be less than fair market value, Developer acknowledges that the DDA will require that Developer acknowledge that if the purchase price for the Property is less than fair market value, the DDA will require that Developer pay prevailing wages for the Project and obtain the bonds required by California Labor Code Section 1781, et seq.
6. The Developer shall deliver the materials and information identified on Attachment No. 2 attached hereto to the City within the times set forth on Attachment No. 2. At the beginning of each calendar month during the ENA Period (as extended under Section 1, if applicable), Developer shall provide a written report, which may be in the form of an email, to the City describing in reasonable detail the Developer's activities with respect to the Project during the preceding calendar month.
7. During the ENA Period (as extended under Section 1, if applicable), the City shall use good faith efforts to complete (or cause to be completed) the matters set forth in Attachment No. 3 attached hereto.
8. The City and Developer acknowledge that all applicable requirements of the California Environmental Quality Act ("CEQA") must be met in order to execute and deliver the Agreement and develop the Site and that this may require an environmental impact report, supplemental environmental impact report and/or other reports or analyses for CEQA purposes (collectively, the "CEQA Documents"). The Developer will fully cooperate with the City in the City's preparation of the CEQA Documents as the lead agency for the CEQA Documents and will reimburse the City for all cost related to the preparation of the CEQA Documents.
9. The Developer shall bear all costs and expenses of any and all title, environmental, physical, engineering, financial, and feasibility investigations, reports and analyses and other analyses or activities performed by or for the Developer.
10. The Developer and the City understand and agree that neither Party is under any obligation whatsoever to enter into a further agreement. In the event of the expiration -2-
or earlier termination of this ENA, the City shall be free at the City's option to negotiate with any persons or entities with respect to the sale, lease and development of the Site.
11. The Developer shall indemnify, defend, and hold the City, City officials, Staff, elected officials, and representatives harmless from any and all costs, expenses, losses, claims, liabilities, damages and causes of action arising out of Developer's entering into or performing this ENA and any entry by Developer or its agents, employees or contractors onto the Site excluding act of active negligence or willful misconduct by City. The Developer's obligations under the preceding sentence shall survive the expiration or earlier termination of this ENA.
12. The Developer represents and warrants that its undertakings pursuant to this ENA are for the purpose of development of the Site and not for speculation in land, and the Developer recognizes that, in view of the importance of the redevelopment of the Site to the general welfare of the community, the qualifications and identity of the Developer and its principals are of particular concern to the City; therefore, this ENA may not be assigned by the Developer without the prior express written consent of the City in its sole and absolute discretion. However, the City acknowledges that the Developer may intend to form a new entity controlled by the parties comprising the Developer that will be the Developer entity that will be a party to the Agreement. The City shall have the right to review and approve the organizational documents of such entity and the entities comprising such entity.
13. Any notice, request, approval or other communication to be provided by one Party to the other shall be in writing and provided by certified mail, return receipt requested, or a reputable overnight delivery service (such as Federal Express) and addressed as follows:
If to the Developer:
4 Star Solar, Inc.
1815 Frank Court
Redlands, CA 92374
Attention: Victor Barbosa
If to the City:
City of Yucaipa
34272 Yucaipa Blvd.
Yucaipa, CA 92399
Attention: City Manager
Notices shall be deemed delivered: (i) if sent by certified mail, then upon the date of delivery or attempted delivery shown on the return receipt; or (ii) if delivered by overnight delivery service, then one (1) business day after delivery to the service as shown by records of the service.
14. For purposes of the negotiations contemplated by this ENA, the Developer's representative shall be Victor Barbosa (Phone: (909) 215-7351; Email:
-3-
[email protected]) and the City's representative shall be Ryan Miller (Phone: (909) 797- 2489).
15. This ENA constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof. There are no agreements or understandings between the Parties and no representations by either Party to the other as an inducement to enter into this ENA, except as expressly set forth herein. All prior negotiations between the Parties are superseded by this ENA. Neither the City nor its officers, members, staff or agents have made any representations, warranties or promises to the Developer other than as expressly set forth herein.
16. This ENA may not be altered, amended or modified except by a writing duly approved and executed by all Parties.
17. If any Party should bring any legal action or proceeding relating to this agreement or to enforce any provision hereof, or if the Parties agree to arbitration or mediation relating to this ENA, the Party in whose favor a judgment or decision is rendered shall be entitled to recover reasonable attorneys' fees and expenses from the other. The Parties agree that any legal action or proceeding or agreed -upon arbitration or mediation shall be filed in and shall occur in the County of San Bernardino.
18. The interpretation and enforcement of this ENA shall be governed by the laws of the State of California.
19. Time is of the essence of each and every provision hereof.
20. This ENA may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same ENA.
IN WITNESS WHEREOF, the Parties hereto have executed this ENA as of the day and year first written above.
CITY:
CITY OF YUCAIPA
IC
DEVELOPER:
4 Star Solar, Inc.,
a California Corporation
Chris Mann, City Manager By:
Print Name:
Title:
-5-
ATTACHMENT NO. 1
SITE MAP
OCUa
SK+R-E FA:;X
Yucaipa Blvd.
ATTACHMENT NO. 2
SPECIFIC DEVELOPER TASKS TO BE INCLUDED IN THE AGREEMENT
1. Within six calendar months after the Effective Date of the Agreement, Developer shall deliver the following items for City staff review and approval:
Preliminary site plan and revised architectural concept drawings identifying the location, general configuration traffic circulation, and proposed design characteristics of the Project.
ii. Conceptual development program ("Development Program") for the Project that include a breakdown of the proposed scope of development including a range of building square feet by land use and acreage by land use, improvements, circulation acreage, and other uses.
2. Within nine calendar months after the Effective Date of the Agreement, Developer and City staff shall determine the likely type and schedule for processing entitlements necessary for approval and construction of the Project including, but not limited to, discretionary permits.
3. Within nine calendar months after the Effective Date of the Agreement, Developer shall submit to City a schedule of development setting forth the proposed timetable for the commencement, substantial completion and final completion of the Project (the "Development Schedule").
4. Within nine (9) calendar months after the Effective Date of the Agreement, Developer shall deliver to the City a fully completed and executed development application including all items identified on the City's Development Application Submittal Checklist.
5. Within thirty (30) days of execution of the Agreement and receipt of a preliminary title report, Developer shall review and approve in writing (or provide specific written objections with rationale) a preliminary title report for the Site issued by a Title Company agreeable to City.
6. Prior to execution of the Agreement, the Developer shall submit to the City for its review and approval all organizational documents for the entities signing the Agreement (and, to the extent requested by City, information, certifications and/or documents relating to the ownership, control and signing authority of the direct and indirect owners, members or partners of each such entity).
ATTACHMENT NO.3
SPECIFIC CITY TASKS
1. Within thirty (30) days after the Effective Date, City shall provide to Developer copies of all currently existing plans, studies and other written information regarding the Site in the possession of the City, to the extent not previously delivered to Developer and to the extent material to the Project. Thereafter, the City shall promptly provide to Developer within ten (10) days after receipt thereof -copies of all plans, studies and other written information material to the Project which are received by the City, but not including any privileged or confidential information.
2. Within three months after the Effective Date of this ENA, Developer and City staff shall determine the likely type and schedule for processing entitlements necessary for approval and construction of the Project including, but not limited to, the Discretionary Permits.
3. City shall use good faith efforts to diligently prepare and process the required CEQA Documents. City agrees to submit a CEQA status report to the Developer monthly during the term of this ENA or as mutually determined by the Parties.
4. On or before six months following execution of this ENA, City shall provide an initial draft of the Agreement to Developer and thereafter revise the draft Agreement, to the extent reasonably permitted by the Agreement negotiations.
5. City staff and counsel shall draft and revise the Agreement as permitted by the negotiations.
6. No consents, approvals or comments by City staff shall diminish, affect, or waive either:
(i) rights of the City and City to later impose conditions and requirements under CEQA; (ii) the rights of the City and City not to approve the Agreement in its sole and absolute discretion; (iii) the City's governmental rights, powers and obligations, including but not limited to the City's decision -making authority on project applications and entitlement requests
7. The City will coordinate with the developer to provide access to and from the proposed development and the adjacent existing City -owned Park (13th Street Sports Complex) if feasible.
ATTACHMENT NO.4
STAFF HOURLY RATES
Per the cost of the City's Cost Allocation Plan
$186.67