2023 Gather Capital, Inc - (ENA) Exclusive Negotiating Agrmt Village Prop - possible hotel devMarch 11, 2024
VIA E-MAIL
TO:
Gather Capital, Inc.
Attn: Jon Sisk
924 Walnut Avenue
Santa Cruz, Ca 95060
Email: jsisk@gathercapital.com
COPY TO:
Rutan & Tucker, LLP
Attn: William H. Ihrke
18575 Jamboree Rd. 9th Floor
Irvine, Ca 92612
Re: Exclusive Negotiating Agreement 6 -month Extension
Dear Jon:
CALIFORNIA
Pursuant to Section 1.2 of the Exclusive Negotiating Agreement (ENA) dated Nov. 1, 2023, and
good cause as detailed to the City Manager during a regular update meeting held on March 8,
2024, the requested 6 -month extension is granted. The Outside Negotiation Date as defined in
the ENA is hereby extended for an additional 6 months.
Regards,
Jon McMillen
City Manager
cc: Monika Radeva, City Clerk
Gilbert Villapando, Director of Business & Housing
•
78495 Calle Tampico 1 La Quints, California 92253 1760.777.70001 www .laquintaca,gov
EXCLUSIVE NEGOTIATING AGREEMENT
This EXCLUSIVE NEGOTIATING AGREEMENT ("Agreement") is dated November 1,
2023, and is entered into by and between Gather Capital, Inc, a California Corporation
("Developer") and the CITY OF LA QUINTA, a charter city and municipal corporation ("City")
to coordinate mutual planning and consideration of the potential development of certain real
property. City and Developer are sometimes referred to herein individually as "Party" or
collectively as "Parties." This Agreement is entered into with reference to the following facts:
RECITALS
A. WHEREAS, Developer is interested in acquiring that certain real property currently
owned by City located at Accessor Parcel Number (APN) Nos. 770123011 and 770124010 (the
"Site"); and
B. The Site is currently used by City for public parking, and other public purposes;
and
C. WHEREAS, Developer desires to enter into an exclusive negotiation period with
City for Developer to propose a development plan of a full-service, upscale hotel at the Site (the
"Project"), which Developer agrees to specifically define pursuant to this Agreement; and
D. WHEREAS, City and Developer now desire, subject to the terms of this
Agreement, to provide a period of time for Developer to specifically define the Project and
potentially, thereafter, for negotiations concerning City and Developer potentially entering into a
Purchase, Sale, and Development Agreement ("PSDA") between the Parties that would govern the
sale of the Site by City and the acquisition and development thereof by Developer, and a Statutory
Development Agreement ("DA") pursuant to California Government Code Section 65864 et seq.
(the DA collectively with the PSDA, the "Definitive Agreements"); and
E. WHEREAS, in order to demonstrate the suitability and feasibility of the Project on
the Site, Developer may conduct conceptual architectural, use, and financial studies ("ENA Due
Diligence") which may require the expenditure of significant amounts of time and money by
Developer, at Developer's sole cost and expense, which cost and expense shall not be reimbursed
by City, regardless of whether or not City and Developer ultimately enter into the Definitive
Agreements.
NOW THEREFORE, IN VIEW OF THE OBJECTIVES AND COVENANTS SET
FORTH IN THIS AGREEMENT, THE PARTIES AGREE, AS FOLLOWS:
ARTICLE I
SCOPE OF AGREEMENT
1.1 Term. The rights and duties of City and Developer established by this
Agreement shall commence on the first date on which all of the following have occurred: (1)
execution of this Agreement by the authorized representative(s) of Developer, (2) approval of this
Agreement by the governing body of City, and (3) execution of this Agreement by the authorized
representative(s) of City (the "Effective Date"), and shall end on the date that is six (6) months
2905/015610-0002
19549862.2 a10/16/23
from the Effective Date (the "Outside Negotiation Date"). This Agreement shall terminate earlier
than the Outside Negotiation Date (a) upon mutual written agreement of the Parties or (b) on the
earliest date where both Definitive Agreements are effective, entered into, and approved by both
Parties. Upon termination, this Agreement shall be of no further force and effect.
1.2 Extension. Developer may request to extend the Outside Negotiation Date
by a period of six (6) months by providing a written request and an explanation of good cause to
the City Manager or designee, which request shall be granted or denied by the City Manager or
designee within ten (10) days in the City Manager or designee's sole discretion. The City Manager
or designee's failure to respond to Developer's request pursuant to this Section 1.2 within the ten
(10) day response period shall be deemed a decision to deny the request.
1.3 Limited Scope. The scope of this Agreement is limited to rights and
obligations described herein. No provision in this Agreement shall be deemed an offer or
acceptance by either Party to acquire or convey any real property, including the Site. No provision
in this Agreement shall be deemed an offer or intention for City to provide any financial or other
assistance to Developer for any development of the Site, or any portion of the ENA Due Diligence
which shall be undertaken for the sole benefit of Developer and at Developer's sole responsibility,
cost, and expense. Nothing in this Agreement shall be considered approval or a guarantee of
approval of any plans or specifications for the Project or of the Project itself by City. Developer
acknowledges and agrees that it has not acquired and will not acquire, by virtue of the terms of
this Agreement, any legal or equitable interest in real or personal property from City.
1.4 City Discretion. Developer understands and agrees that City reserves the
right to exercise its discretion as to all matters which City is by law entitled or required to exercise
such discretion, including but not limited to, entitlements or permits for the development of the
Site (if any) and adoption of any amendments to policy documents (including the General Plan or
Specific Plan).
1.5 Definitive Agreements Require Future Approval. Any future Definitive
Agreements shall consist of terms and conditions mutually acceptable to both Developer and City,
in the respective sole and absolute discretion of each of them, and shall require subsequent
approval from each Party by the body or person authorized to grant such approval, subject to all
notice, public hearing, and other legal requirements. Certain development standards and design
controls for the Project may be established in the Definitive Agreements. It is understood and
agreed, though, between the Parties that the Project and the development of the Site must conform
to all applicable laws, including City development, land use and architectural standards,
environmental review, safety laws, and federal and state labor and wage laws. Drawings, plans
and specifications for the Project shall be subject to the standard City development application and
design review process.
1.6 Future Entitlements. Developer understands and agrees that entitlements
and any other City approvals related to the Site shall be subject to and brought to City, as
appropriate, for consideration in accordance with applicable legal requirements, including laws
related to notice, public hearings, due process, and the California Environmental Quality Act
(CEQA). Any zone changes, general plan amendments, conditional use permits or other
entitlements necessary for the Project shall be prepared in accordance with City requirements and
submitted by Developer to City, solely at Developer's cost.
1.7 Reservation of Rights. The Parties agree that, if this Agreement expires or
is earlier terminated for any reason or future Definitive Agreements are not executed by both the
City and Developer, for any reason, neither City nor Developer shall be under any further
obligation to each other regarding the disposition / acquisition of the Site or the development of
the Project on the Site.
1.8 Surplus Land Act. The California Surplus Land Act (Gov. Code, § 54220)
(the "SLA") requires City to comply with certain finding and notification requirements, which
may include making the Site available to other persons when required by the SLA. The SLA's
requirements generally apply when City takes any action to "dispose of' public property, as that
term is defined by the SLA and interpreting guidelines. If, in City's discretion, the negotiations
contemplated hereunder reach the extent of "disposal" under the SLA, this Agreement shall not
prevent City from complying with same, and City's notifications, negotiations, and other actions
under the SLA shall not constitute a default or breach of this Agreement by City.
ARTICLE II
OBLIGATIONS OF DEVELOPER
2.1 Agreement Exclusive to Developer. The qualifications and identity of
Developer and its principals are of particular concern to City. It is because of these qualifications
and identity that City has entered into this Agreement with Developer. No voluntary or involuntary
successor in interest of Developer shall acquire any rights or powers under this Agreement.
Developer shall not assign all or any part of this Agreement or any rights in or under this
Agreement, without the prior written approval of City, which approval may be given or withheld
in City's sole discretion.
2.2 Development and Review of Project Description. Developer, at its sole cost
and expense, shall proceed diligently and in good faith during the term of this Agreement to submit
the following to City for review and approval in its sole discretion:
(i) Proposed site plan for the Project including location and dimensions of all buildings
and location and amounts of all parking, pedestrian and vehicular circulation, public
areas, landscaping and architectural character;
(ii) Proposed schematic drawings for the Project;
(iii)Proposed elevations for the Project;
(iv)Proposed land use categories, including any proposed zoning and planning changes, if
any, necessary to accommodate the Project;
(v) Executed agreements (if any) necessary from property owners adjacent to the Site for
future development of the Project;
(vi)Proposed time and cost estimates for Site acquisition and development of the Project
on the Site;
(vii) Proposed construction schedule for the Project;
(viii) Written confirmation that Developer has completed the ENA Due Diligence and
has determined that the Site is physically suitable for development of the Project,
taking into account relevant regulatory and environmental conditions;
(ix)All applications and fees applicable to the Project;
(x) A proposed financing plan identifying financing sources for Site acquisition and all
private and public improvements proposed for the Project, by phase, if appropriate; and
(xi)A preliminary financial analysis demonstrating the costs and benefits to City regarding
all construction, maintenance and operations of all proposed public improvements, the
costs of additional or increased levels of public services and any new public revenues
anticipated to be generated by the Project, by phase, if appropriate.
In the event City requires modifications to the plans, elevations, or documentation provided
pursuant to this Section, Developer shall expeditiously submit revisions of the same. Once all
documentation required under this Section 2.2 is approved in writing by the City Manager or
designee, Developer shall submit the finalized items to City's City Council for review and approval
in the City Council's sole discretion.
2.3 Changes in Control. Developer shall promptly notify City in writing of any
and all changes whatsoever in the identity of the business entities or individuals either comprising
or in control of Developer, as well as any and all changes in the interest or the degree of control of
Developer by any such person, of which information Developer or any of its members, managers,
partners or officers are notified or may otherwise have knowledge or information. Upon the
occurrence of any significant or material change, whether voluntary or involuntary, in
membership, ownership, management or control of Developer (other than such changes
occasioned by the death or incapacity of any individual) that has not been approved by City, prior
to the time of such change, City may terminate this Agreement by providing written notice thereof
to Developer.
2.4 Communication with City. Developer shall keep City advised of
Developer's progress on completing its obligations under this Agreement on a regular basis at least
every one (1) month, or more frequently as requested by City staff.
2.5 Legal Description. Developer understands that there is no current official
legal description for the Site. Developer understands that if this Agreement results in Definitive
Agreements between the Parties, Developer shall be responsible, at its sole cost and expense, for
obtaining a legal description of the Site from a licensed land surveyor.
2.6 Costs and Expenses. All fees and expenses for engineers, architects,
financial consultants, legal, planning and other consultants and contractors, that are retained by
Developer to perform Developer's obligations under this Agreement, shall be the sole
responsibility of Developer. City shall not be obligated to pay or reimburse any costs or fees
incurred by Developer in performance of any of the obligations of Developer under this
Agreement, whether or not this Agreement is eventually terminated or extended or Definitive
Agreements are entered into between the Parties.
2.7 Press Releases. Developer shall obtain the approval of City's City Manager
or designee for any press release that Developer may propose relating to this Agreement prior to
publication, which approval may be granted, conditioned, or withheld in the City Manager or
designee's reasonable discretion.
2.8 Nondiscrimination. Developer shall not discriminate against nor segregate
any person, or group of persons on account of race, color, creed, religion, sex, marital status,
handicap, national origin or ancestry in undertaking its obligations under this Agreement.
2.9 Conflict of Interest. Developer shall at all times avoid conflict of interest or
appearance of conflict of interest under any applicable state, federal or local laws, rules and
regulations in the performance of this Agreement. Developer shall disclose any conflict of interest,
or potential conflict of interest, which exists or arises at any time during the term of this
Agreement. For purposes of this Section, any conflict of interest of a principal, officer, partner,
joint -venturer, or employee of Developer shall be conclusively deemed a conflict of interest of
Developer.
2.10 Acceptance of Agreement. Developer shall acknowledge its acceptance of
this Agreement by delivering three (3) counterpart executed originals of this Agreement signed by
the authorized representative(s) of Developer to City.
ARTICLE III
OBLIGATIONS OF CITY
3.1 City Cooperation. During the term of this Agreement City shall exercise
reasonable efforts to cooperate with Developer in providing to financial institutions from whom
Developer seeks funding requested and relevant information, to the extent available and not
otherwise privileged or confidential. City shall also cooperate with Developer's professional
consultants and associates by providing them with any information and assistance reasonably
within the capacity of City in connection with the preparation of Developer's submissions to City
pursuant to this Agreement or as required by state or local laws and regulations. City shall further
exercise reasonable efforts to provide appropriate comments to Developer with respect to one or
more conceptual development plans, as may be proposed by Developer for the Project and the
development of the Site, including, but not limited to, conceptual plans or studies of vacation,
realignment or abandonment of public property and facilities, the installation and improvement of
public improvements and required environmental evaluation of the Project. City's cooperation
hereunder shall not constitute an approval of any proposed plan, study, or other submission
provided by Developer to City.
3.2 City Availability. City shall be reasonably available to meet with Developer
regarding the Project and the Site during regular business hours.
3.3 Site Value, Land Disposal. During the Term of this Agreement, City shall
commence the process of gathering information to (a) calculate the market value of the Site, and
(b) determine and begin the actions necessary to dispose of the Site pursuant to applicable laws,
including the SLA.
ARTICLE IV
ENA DUE DILIGENCE
4.1 Scope of ENA Due Diligence. The ENA Due Diligence is for Developer to
complete studies, conceptual plans, and further define the Project as provided herein. This
Agreement does not provide Developer with any license or other right to enter the Site, including
to conduct any environmental or other studies on the Site.
4.2 Acknowledgement of Time and Expense. Developer specifically
acknowledges that the ENA Due Diligence may undertake may require the expenditure of
significant time and money at Developer's sole cost and expense, which cost and expense shall in
no way be reimbursed by City. Developer shall make any and all such expenditures with full
knowledge, awareness and understanding that City provides no assurance that this Agreement, or
Developer's efforts hereunder, will result in the approval or execution of Definitive Agreements
between the Parties or the sale of the Site to Developer.
4.3 Property of Developer. City acknowledges that the various studies,
renderings, site plans, drawings, engineering reports, analyses or other evaluations relating to the
Site or the Project undertaken by Developer as ENA Due Diligence are proprietary to Developer
and that City shall not acquire any right to distribute or use such matter by virtue of the terms of
this Agreement, subject to any required disclosure of such matter pursuant to law, regulation or
executive, administrative or court order.
ARTICLE V
EXCLUSIVE NEGOTIATION
5.1 Good Faith Negotiations. The Parties shall conduct themselves in good faith
to negotiate terms of Definitive Agreements mutually acceptable to the Parties. City and Developer
each acknowledge that the task of developing a detailed description of the Project and negotiation
of a potential Definitive Agreement is a deliberate process requiring consideration of numerous
different elements. City and Developer further acknowledge that the completion of this process
may require City and Developer to consider various alternate structures for any future Definitive
Agreements between them for the acquisition of the Site by Developer and development of the
Site, in order to promote the development goals for the Project, on terms that are economically
feasible and mutually satisfactory to both City and Developer.
5.2 City Not to Negotiate with Others. During the term of this Agreement, City
shall not negotiate with any other person and/or entity regarding the sale or development of the
Site. The term "negotiate," as used in this Agreement, shall mean City's correspondence or
discussion with third parties about substantive terms and conditions for such third parties'
acquisition and/or development of the Site. For the avoidance of doubt, City's mere receipt of an
offer from a third party to acquire and/or redevelop the Site and response to such third party
notifying them of the existence of this Agreement and City's inability to negotiate due to the
Agreement shall not constitute a "negotiation" in violation of this Agreement. Furthermore, this
Section 5.2 shall not limit City's ability or obligation to comply with the SLA.
5.3 Confidentiality. Developer acknowledges that it may be requested to make
certain disclosures to City, its staff or legal counsel, as part of the negotiation process, including
in connection with financial due diligence investigations of City relating to the potential
disposition of the Site to Developer and development of the Site by Developer. City and Developer
recognize that such disclosures may contain sensitive information relating to other business
transactions of Developer, that the disclosure of such information to third parties could impose
commercially unreasonable and/or anti-competitive burdens on Developer and, correspondingly,
diminish the value or fiscal benefit that may accrue to City upon the disposition of the Site to
Developer and development of the Project on the Site by Developer, if future Definitive
Agreements are executed by both City and Developer. Developer acknowledges and agrees that
City is a public entity with a responsibility and, in many cases, legal obligation to conduct its
business in a manner open and available to the public. Accordingly, any information provided by
Developer to City with respect to the Site, the Project or Developer may be disclosed to the public
either purposely, inadvertently, or as a result of a public demand or order. With respect to any
information provided that Developer reasonably deems and identifies in writing as proprietary and
confidential in nature, City agrees to exercise its best efforts to keep such information confidential
to the extent permitted by applicable law. In addition, if City determines that it is required under
applicable law to disclose any information identified by Developer as proprietary and confidential
in nature, City shall notify Developer as least five (5) business days before disclosure of such
information to provide Developer the opportunity to seek a protective order preventing such
disclosure.
5.4 Continuation of Public Use. Throughout the term of this Agreement, the
Parties agree that the Site shall continue to operate under City's public use for public parking
and/or other public purposes.
ARTICLE VI
DEFAULT AND REMEDIES
6.1 Default. Failure or delay by either Party to perform any material term or
provision of this Agreement shall constitute a default hereunder. If the Party who is claimed to be
in default by the other Party commences to cure, correct or remedy the alleged default within ten
(10) calendar days after receipt of written notice specifying such default and shall diligently
complete such cure, correction, or remedy, such Party shall not be deemed to be in default under
this Agreement. Delay or failure in given written notice of a default shall not constitute a waiver
of any default nor shall it change the time of default. However, the injured Party shall have no
right to exercise any remedy for a default under this Agreement, without first delivering written
notice of the default. In the event of an uncured default, the sole and exclusive remedy of the Party
who is not in default shall be to terminate this Agreement by serving written notice of such
termination on the other Party.
6.2 No Monetary Damages or Specific Performance City and Developer
acknowledge that neither Party would have entered into this Agreement if it could be held liable
to the other for monetary damages, specific performance, or other remedies. Accordingly, each
Party acknowledges and agrees that its sole and exclusive right and remedy upon the other Party's
breach of this Agreement (regardless of the good faith or bad faith of the breaching party) is to
terminate this Agreement, without cost, expense, or liability to the other Party.
6.3 Release of California Civil Code Section 1542. Each Party acknowledges
that it is aware of the meaning and legal effect of California Civil Code Section 1542, which
prov ides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY.
By initialing below, both City and Developer evidence their intention to be bound by the
limitation on damages and waiver of rights and remedies contained in this Section 6.3, and each
Party releases any and all claims against the other Party for monetary damages or other legal or
equitable relief related to a breach of this Agreement, whether or not any released claims were
known or unknown to it as of the Effective Date. Each Party waives the benefits of Civil Code
Section 1542 and all other statutes and judicial decisions (whether state or federal) of similar effect
with regard to the waivers of rights and remedies and limitations on damages contained in this
Section 6.3.
Developer's Initials — City's Initials
6.4 No Waiver. Any failure or delay by a Party in asserting any of its rights or
remedies under this Agreement shall not operate as a waiver of any default under this Agreement
or of any rights or remedies provided herein associated with any such default.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Implementation of Agreement. City shall implement this Agreement
through its City Manager (or his or her duly authorized representative). The City Manager shall
have the authority to issue interpretations, waive provisions, and/or enter into amendments to this
Agreement on behalf of City so long as such actions do not materially or substantially change the
uses or concept of the Project, or add to the costs incurred or to be incurred by City as specified
herein, and such interpretations, waivers and/or amendments may include extensions of time to
perform. All other materials and/or substantive interpretations, waivers, or amendments shall
require consideration, action, and written consent of City and/or City's City Council.
7.2 Notice. All notices required under this Agreement shall be presented in
person, by nationally recognized overnight delivery service, or by First Class certified or registered
United States mail with return receipt requested. Notice shall be deemed confirmed by United
States mail effective the third (3rd) business day after deposit with the United States Postal Service.
Notice by personal service or nationally recognized overnight delivery service shall be deemed
effective upon delivery. Either Party may change its address for receipt of notice by notifying the
other party in writing.
TO DEVELOPER: Gather Capital, Inc
WITH COPY TO: 924 Walnut Avenue
Santa Cruz, CA. 95060
TO CITY:
CITY OF LA QUINTA
Attn: City Manager
78495 Calle Tampico
La Quinta, CA 92253
WITH COPY TO: RUTAN & TUCKER, LLP
Attn: William H. Ihrke
18575 Jamboree Rd, 9th Floor
Irvine, California 92612
7.3 Non -liability of City Officers and Employees. No officer, official, member,
employee, agent, or representative of City shall be personally liable to Developer, or any successor
or assign of same, in the event of any default or breach by City.
7.4 Law, Venue, Service of Process. The courts of the State of California in the
County of Riverside shall have the exclusive jurisdiction of any litigation between the Parties
arising out of this Agreement. This Agreement shall be governed by, and construed under, the laws
of the State of California. Service of process on City shall be made in the manner required by law
for service on a public entity. Service of process on Developer shall be made in any manner
permitted by law and shall be effective whether served within or outside of California.
7.5 Entire Agreement. This Agreement sets forth the entire agreement of the
Parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations,
understandings or agreements relating thereto.
7.6 No Third Party Beneficiaries. This Agreement is made and entered into
solely for the benefit of City and Developer and no other person shall have any right of action
under this Agreement.
7.7 Severability. In the event any section or portion of this Agreement shall be
held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining
provisions shall remain in effect, and the parties hereto shall take further actions as may be
reasonably necessary and available to them to effectuate the intent of the Parties as to all provisions
set forth in this Agreement.
7.8 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or against either
Party by reason of the authorship of this Agreement or any other rule of construction which might
otherwise apply. The Section and Paragraph headings are for purposes of convenience only, and
shall not be construed to limit or extend the meaning of this Agreement.
7.9 Counterparts. This Agreement may be executed by City and Developer in
counterparts, all of which together shall constitute a single agreement.
7.10 Authority to Execute. Each signatory hereto warrants to the other Party that
it has authority to sign on behalf of the Party for whom it purports to sign, and that the signatory's
signature hereupon binds the Party to the Agreement.
[SIGNATURES OF FOLLOWING PAGE]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
in their respective names by their duly authorized officers as of the Effective Date.
CITY DEVELOPER
City of La Quinta, a municipal corporation Gather Capital, Inc.
By:
Jon Olen. City Manager
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
By:'�1'�+tRd
William H. Ihrke, i y Attorney
ATTEST:
By:
IC
Monika Radeva, C ty Cle
By:94'9.11'
Date: 10/16/23
By:
Date: