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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: