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1999 Spanos Corp - Exclusive Negotiation Agr RDAEXCLUSIVE NEGOTIATION AGREEMENT BY AND BETWEEN LA QUINTA REDEVELOPMENT AGENCY AND THE SPANOS CORPORATION THIS AGREEMENT (the "Agreement") is entered in this 20th day of April, 1999, by and between the LA QUINTA REDEVELOPMENT AGENCY (the "Agency"), and THE SPANOS CORPORATION (the "Developer") on the terms and provisions set forth below. RECITALS WHEREAS, on May 16, 1989, the City Council of the City of La Quinta adopted the Redevelopment Plan for La Quinta Redevelopment Project No. 2 that established the La Quinta Redevelopment Project Area No. 2 (the "Project Area"); and WHEREAS, the Agency is the owner of certain real property within the Project Area, as further described herein (the "Agency Property"); and WHEREAS, the Developer is the owner of certain real property within the Project Area as further described on Exhibit "A" (the "Developer Property"); WHEREAS, the Developer is interested in purchasing and developing a portion of the Agency Property (the "Site") to carry out the objectives of the Redevelopment Plan; and WHEREAS, the Agency desires to facilitate the Developer's development proposal which entails the construction of up to 168 multi -family units of which eight units may be affordable per the Agency's housing mandates on the Site; WHEREAS, the Agency and the Developer desire to enter into this Agreement to: (i) initiate exclusive negotiations for up to ninety (90) days; (ii) determine the type and nature of development that would be constructed on the Site; (iii) establish the framework responsibilities, schedule, and financial parameters for such development; (iv) establish a purchase price for the Site CAMy Documents\WPDOCSWgreement-Spanos.DOC 1 5/5/99 including the possibility of a land exchange for the Developer Property; (v) prepare and process entitlements for the Developer's development proposal; and (vi) formulate the terms and draft an affordable housing agreement ("AHA"). NOW, THEREFORE, in consideration of the recitals and mutual covenants and conditions contained herein, the parties hereto agree as follows: I. (Section 100) Site A. (Section 101) Site Description The Site constitutes the real property that is the subject of this Agreement. The Site is generally a twelve (12) acre parcel located in the northeast corner of the fifty (50) acre Agency Property, which is located northwest of Avenue 48 and Adams Street, as depicted on Exhibit "B" to this Agreement. The Agency is currently in discussions with RecreActions Group of Companies ("RGC") regarding the development of the Agency Property. II. (Section 200) Negotiation A. (Section 201) Good Faith Negotiations Commencing on April 26, 1999 (the "Commencement Date"), the parties agree to negotiate in good faith to formulate a plan for Site development (the "Plan"). Negotiations regarding the Plan shall include and delineate, without limitation, the following elements: Property; (1) The type and scope of development; (2) The interface of the Site development with the buildout of the Agency (3) The schedule for development activities; (4) An itemization of development needs and costs, on- and off -site improvement needs and costs, and any state and local regulatory requirements and associated costs; CAMy Documents\WPDOCS\Agreement-Spanos.DOC 2 5/5/99 (5) The value of the Site and the Developer Property; (6) The improvements to be made to the Site, the surrounding area and support infrastructure in connection with Site development; (7) The entitlements necessary to facilitate Site development; (8) The funding responsibilities, projected amounts, timing, and sources to facilitate Site development; and (9) The parties/entities, and their responsibilities, for implementing Site development activities. Prior to finalizing the Plan, the parties also agree to holding at least one (1) community meeting to solicit public input and comment. Following the completion of the Plan, the parties agree to further negotiate diligently and in good faith, to prepare a AHA that implements the Plan, and process the entitlements necessary to develop the Site. B. (Section 202) Period of Negotiation The Agency agrees to exclusively negotiate with the Developer as follows: (1) During a thirty (30) day period following the Commencement Date, the Agency and Developer shall formulate the Plan. Concurrent with this effort, both parties shall confer with RGC who is formulating site plans for the Agency Property to insure that the Site development proposal is compatible with the development plans for the Agency Property. The Developer and Agency will hold at least one (1) meeting to solicit community input on the Plan during this period. (2) Following completion of negotiations with respect to the Plan, the Agency agrees to further negotiate exclusively with the Developer for an additional sixty (60) days to: (i) prepare and finalize a AHA; CAMy Documents\WPDOCS\Agreement-Spanos.DOC 3 5/$/99 (ii) prepare and process the required environmental and other entitlements as necessary for Site development. If, ninety (90) days following the Commencement Date the Developer has not executed and submitted a AHA to the Agency or the Agency determines it does not wish to proceed with development of the Site, then any party to this Agreement may terminate this Agreement by delivery of written notice to the other parties. Until receipt of such written notice, this Agreement shall remain in full force and effect and the parties shall continue to negotiate in good faith. The parties to this Agreement have the option to extend the negotiating period if, due to no fault of the parties to this Agreement, delays occur that are beyond the control of the Agency and the Developer. Upon submittal of a signed AHA by the Developer, and provided that all studies and documents required for project environmental and land use applications have been completed and accepted by the City of La Quinta (the "City"), then this Agreement shall be extended for thirty (30) days from the date of such submittal to enable the Agency and the City to: (1) Take the actions necessary to authorize the Agency and the City to execute the AHA if the Agency and the City desire to do so after the required public hearing; and (2) Execute the AHA. The Agency agrees that during the negotiation period set forth above the Agency shall neither negotiate or enter into a AHA or agreement with any other person or entity regarding the Site. The obligation to negotiate in good faith requires the respective parties to communicate with each other with respect to those issues for which agreement has not been reached, and in such communication to follow reasonable negotiation procedures, including meetings, telephone conversations, and correspondence. It is understood by the parties that final accord on all issues may not be reached. It is also understood that neither party is under any obligation to reach agreement on the AHA, and CAMy Documents\WPDOCS\Agreement-Spanos.DOC 4 5/5/99 the Agency has no authority to make any commitments regarding the AHA until after the required public hearing concerning the AHA. C. (Section 203) Agency and Developer Obligations During the Period of Negotiation, as set forth in Section 202 of this Agreement, Agency and Developer obligations shall include, but not be limited to, the following: (1) Agency Obligations. (a) Agree not to convey, negotiate for, or enter into any agreement regarding the Site with any other entity; (b) Negotiate in good faith with the Developer to define the scope, terms, and conditions for Site development activities; (c) Provide the Developer with documents in Agency possession that would assist the Developer with Site due diligence activities; (d) Assist Developer with environmental and land use entitlement applications, as necessary; (e) Consider Developer requests for Agency financial investment in Site development activities, if such assistance is determined by the Agency to be necessary to facilitate Site development; (f) Coordinate the planning efforts of the Developer and RGC; (g) Upon approval of the Plan and verification of Developer financial commitments to both purchase and develop the Site, prepare or cause to be prepared, a AHA; (h) Reimburse the Developer for direct costs associated with preparing site plans, landscape plans, grading and drainage plans, and environmental and land use entitlement documents related to the design and entitlements necessary for site development. Said reimbursement shall not exceed $100,000. CAMy Documents\WPDOCSWgreement-Spmos.DOC 5 5/5/99 (2) Developer Obligations. (a) Agree to use its best efforts to investigate the Site; (b) Negotiate in good faith with the Agency to define the terms and conditions for Site purchase and development activities, and the Agency's involvement therein; (c) Interface with RGC to insure that the Site development proposal is compatible with the development plans for the Agency Property. (d) Submit site plans, elevations, schematic drawings, and any other documents reasonably necessary for Agency approval; (e) Submit proof of lender funding or loan commitment(s) that demonstrate sufficient capital to fund both Site purchase and development activities; and (f) Submit proof of Developer cash equity necessary to fund Site purchase and development costs not funded by commercial lender loans or partnership funds. III. (Section 300) AHA Provisions The parties hereto acknowledge that the financial feasibility of the activity to be proposed by the Developer and the terms of the AHA are yet to be determined; each party assumes the risk that, notwithstanding this Agreement, there is no assurance that the parties will enter into a AHA. IV. (Section 400) Miscellaneous A. (Section 401) Developer's Findings, Determinations, Studies, and Reports From time to time, the Developer agrees to make oral and/or written progress reports advising the Agency of all material matters and studies being conducted by the Developer with respect to the Plan. No reports or studies by the Developer submitted to the Agency shall imply any warranty of any kind on the part of the Developer as to the accuracy or completeness thereof, and the Agency agrees to hold the Developer harmless with respect to any use by the Agency of any such information. CAMy Documents\WPDOCS\Agreement-Spanos.DOC 6 5/5/99 B. (Section 402) Purchase Price and Other Consideration The purchase price for the Site or other consideration to be paid by the Developer under the AHA shall be established by agreement among the Agency and the Developer. The purchase price and other consideration shall be based upon such factors as market conditions, density of development, cost of development, risks incurred, estimated or actual profit, estimated or actual sales and/or rental prices of the facilities to be developed, public purpose and other criteria relevant to the establishment of the fair value for the use permitted to be developed. C. (Section 403) Assignment This Agreement shall not be assigned by the Developer without prior written approval of the Agency. The Agency agrees that, notwithstanding the foregoing, the Developer may assign its rights under this Agreement to a corporation, trust, or partnership of which the majority beneficial interest and operational control is owned by the Developer. V. (Section 500) The Developer A. (Section 501) Nature of the Developer Concurrent with the submission of the executed AHA, Developer shall submit a copy of an executed partnership or other agreement between or among its principals. Financial information sufficient to ascertain the ability of Developer to perform under this agreement may also be provided. B. (Section 502) Project Manager and Employees of the Developer The Project Manager for the Developer is: Mr. Ray Hanes The Spanos Corporation 3773 Howard Hughes Parkway Las Vegas, NV 89109 C:Wy Documents\WPDOCS\Agreement-Spanos.DOC 7 5/5/99 Other Developer employees or representatives who will be directly involved in this project will be determined by Developer. C. (Section 504) Full Disclosure The Developer is required to make and maintain full disclosure to the Agency of its principals, officers, stockholders, partners, joint venturers, and all other pertinent information concerning the Developer. VI. (Section 600) Agency and City Responsibilities A. (Section 601) Redevelopment Project The Redevelopment Plan for the La Quinta Redevelopment Project No. 2 was approved by the Agency on May 16, 1989. The Agency shall continue to use its best efforts toward securing the goals of the Redevelopment Plan. B. (Section 602) Environmental Requirements The Agency and the Developer shall, with assistance of the City, prepare all necessary environmental documents as required by the California Environmental Quality Act (Public Resources Code Section 21,000 et. seq.) and local regulations, for certification by the City. The Developer agrees to cooperate with the City and Agency, as requested, to help determine the environmental impact of the proposed development and to prepare any other additional documents as may be needed to complete environmental review for the development of the Site. C. (Section 603) Agency and City Assistance and Cooperation The Agency and the City shall cooperate fully in providing the Developer with appropriate information and assistance as requested. C:Wy Documents\WPDOCS\Agreement-Spanos.DOC 8 5/5/99 VII. I(Section 700) Real Estate Commission The Agency and the Developer each represent to each other that neither have engaged any broker, agent, or finder in connection with this transaction and each agrees to defend, indemnify, and protect and hold the others harmless from any claim by any broker, agent, or finder retained by such indemnifying party. IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement on the respective dates set forth below. LA QUINTA REDEVELOPMENT AGENCY '1999 By: RON PERKINS, Chairman APPROVED AS TO FORM: DAWN C. HONEYWELL, Agency Counsel _, 1999 THE SPANOS CORPORATION By: Its: CAMy Documents\WPDOCS\Agreement-Spanos.DOC 9 5/5/99 EXHIBIT "A" Developer property t� G'1 V N N,T5 Titly/ 4 4 a" P.O. Box '1504 78-495 CALLE TAMPIco LA QUINTA, CALIFORNIA 92253 May 14, 1999 Mr. Ray Hanes The Spanos Corporation 3773 Howard Hughes Parkway Las Vegas, Nevada 89109 Dear Mr. Hanes: (760) 77 7 -7000 (TDD) (760) 777-1227 Please find enclosed, a fully executed copy of the "Exclusive Negotiation Agreement" by and between the Redevelopment Agency and The Spanos Corporation. If I can be of further assistance, please give me a call. Sincerely, SAUNDRA L. JUHOLA, City Clerk City of La Quinta, California HP OfficeJet Personal Printer/Fax/Copier Identification 93209507 1.2.0 2.8 Fax Log Report May-14-99 01:17 PM Result Pages T Date Time Duration Diagnostic OK 12 Sent May-14 01:12P 00:04:34 002586030022 TO: FROM: TWit 4 4 Q" 78-495 CALLE TAMPICO - LA QUINTA, CALIFORNIA 92253 - (760) 777-7000 FAX (760) 777-7101 TDD (760) 777-1227 Mailing Address: P.O. Box 1504, La Quinta, California 92253 FACSIMILE TRANSMITTAL C FAX NO. CITY CLERK'S OFFICE Fax No. (760) 777-7107 Phone No. (760) 777-7025 TOTAL NUMBER OF PAGES: DATE SENT: TIME SENT: Form:fax Z- (including cover sheet)