HomeMy WebLinkAboutAgenda Report - August 5, 2009 I-01 PHAGENDA ITEM 100.tMap
CITY OF LODI
,. COUNCIL COMMUNICATION
im
AGENDA TITLE: Adopt resolution authorizing the City Managerto execute an Exclusive Right to
Negotiate (ERN) with Eden Housing, Inc. regarding a Senior Housing Project at
2245 Tienda Drive.
MEETING DATE: August 5,2009
PREPARED BY: Community Development Department
RECOMMENDED ACTION: Adopt a resolution authorizing the City Manager to execute an
Exclusive Right to Negotiate (ERN) with Eden Housing, Inc.
regarding a Senior Housing Project at 2245 Tienda Drive.
BACKGROUND INFORMATION: On April 1,2009, the City Council authorized the City Managerto
negotiate with Eden Housing, Inc. for an agreement to develop an
affordable senior housing project at the property identified as 2245
Tienda Drive.
In the course of those negotiations, Eden Housing has performed its due diligence and has determined
that, based upon the requirements for projectfunding that it will be pursuing, the ERN is the appropriate
and acceptable document to demonstrate the requisite site control. Eden Housing's application to State
of California Department of Housing and Community Development (HCD)for HOME funding will be
submitted by the deadline on August 17, 2009.
The exclusive negotiation period for this project should last for 24 months, ending in August 201 1 _
During the term of the agreement, the developer will be refining details of the project and financing,
applying for the required entitlements from the city, as well as negotiating the terms of either a
Disposition, Development Loan Agreement (DDLA) or an Option to Purchase and Purchase Agreement.
FISCAL IMPACT:
FUNDING AVAILABLE:
KB/jw
None at this time.
N/A
Konradt Bartlam
Community Development Director
APPROVED:
Blair in , City Manager
140JALV
EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT
This Exclusive Right to Negotiate Agreement ("Agreement") is entered into effective as of
,2 009 ("Effective Date"), by and between the City of Lodi, a municipal
corporation ("City") and Eden Development, Inc., a California nonprofit public benefit
corporation ("Eden"). City and Eden are referred to collectively as the "Parties."
RECITALS
A. The City owns that unimproved parcel consisting of approximately 3.39 acres
located at 2245 Tienda Drive in the City of Lodi, more particularly described in Exhibit A attached
hereto (the "Property").
B. The City has determined that the desired future use of the Property shall be an
affordable rental residential development that is age restricted for seniors. Accordingly, the City
issued a Request for Qualifications ("RFQ") inviting submissions from developers interested in
developing the Property with affordable rental housing for seniors with restrictions compatible
with the financing requirements of the Community Development Block Grant Program ("CDBG"),
the Home Investment Partnership Act ("HOME") and the Department of Housing and Urban
Development ("HUD") Section 202 Supportive Housing for the Elderly Program ("HUD 202").
C. In response to the City's RFQ, Eden submitted its qualifications to construct, own
and operate rental housing affordable to very low and low income senior households at the
Property (the "Senior Project"). On April 1, 2009, the City Council selected Eden as the
developer for the Property and directed staff to proceed with the preparation of this Agreement for
the exclusive right to negotiate an agreement whose terms and conditions would govern the
conveyance of the Property to Eden for the development of the Senior Project, by Eden.
D. In reliance on the City Council's selection of Eden as the developer of the Property,
Eden will commence its due diligence and predevelopment activities for the acquisition of the
Property and development of the Senior Project, including submitting applications for project
financing, which include but are not limited to CDBG, HOME and HUD 202 funds.
E. Until such time that the appropriate environmental assessment of the Senior Project
is complete in accordance with the provisions of the California Environmental Quality Act
("CEQA") and the National Environmental Policy Act ("NEPA"), an Option to Purchase and
Purchase Agreement ("Purchase Agreement") or a Disposition Development and Loan Agreement
("DDLA")cannot be entered into by the Parties. This Agreement is expressly conditioned on a
subsequent determination to proceed with, modify or cancel the Senior Project based on the
required environmental review, pursuant to CEQA and NEPA requirements.
F. The purpose of this Agreement is to set forth the Parties' common understanding
that Eden shall have the exclusive right to negotiate a Purchase Agreement or a DDLA to develop
the Property, and that for the term set forth in this Agreement, the City shall not discuss or
negotiate development opportunities or rights with respect to the Property with any other person or
entity other than Eden, and that the Parties shall enter into a Purchase Agreement or DDLA, to be
negotiated, upon environmental approval of the Senior Project.
G. As more fully set forth in this Agreement, the Parties acknowledge and agree that
this Agreement does not grant Eden the right to acquire the Property or construct the Senior
Project, nor does it obligate Eden to any activities or costs to acquire the Property or construct the
Senior Project
H. In addition to the purpose set forth in Recital F, this Agreement provides evidence
of the Parties intention regarding Eden's site control of the Property for the future acquisition and
development of the Property, to induce potential project lenders to accept Eden's applications for
project financing for the Senior Project.
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
below and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows.
1. Disposition, Development and Loan Agreement. The Parties shall use their best efforts to
successfully negotiate a Purchase Agreement or DDLA which shall describe the terms and
conditions governing disposition of the Property for the development of the Senior Project. The
Parties agree that a Purchase Agreement or DDLA shall include, without limitation, the
following terms; provided however, nothing herein is intended to or shall limit the City's
discretionary authority to approve, deny or condition specific land use entitlements for the
Senior Project based on the required environmental review.
I.I. Senior Project.
I.I.I. Development Conceit. The concept for the Senior Project includes the
development of up to Ninety (90) rental housing units serving low-income seniors.
The concept of "aging in place" (i.e., making sure that seniors can live independently
even as they become frail), will be integral to the Senior Project. Accessibility will
also be a priority. The Senior Project will have an elevator, include community
spaces, laundry facilities and management offices, and all units will be fully adaptable
and/or accessible.
1.1.2. Affordability Requirements. Upon conveyance of the Property to Eden, the
Property will be subject to a recorded regulatory agreement between Eden and the
City that will require Forty Nine Percent (49%) of the rental units be offered for rent
and occupancy by very low and low income senior households at an affordable rent
for a term of not less than Fifty Five (55) years.
1.2. Financial Terms.
1.2.1. Purchase Price. The purchase price for the Property shall be Six Hundred Thirty
Dollars ($630,000), as is substantiated by a qualified appraisal dated July 2,2009.
1.2.2. Financing.
1.2.2.1.City CDBG and/or HOME Loan to Eden. Eden shall apply to the City for a
CDBG and HOME loan of funds which have been set aside by the City in the
amount of $1,100,000.00,to finance the closing cost for Eden's acquisition of
the Property, with the balance of the loan proceeds used to finance
predevelopment costs for the Senior Project. The City loan to Eden shall have,
at a minimum, the following terms: be a nonrecourse loan secured by the
Property; repaid on a residual receipts basis; shall be bear interest at a simple
rate not to exceed 3% per annum and shall be contingent (i.e., no accrual of
interest if the interest is not paid current annually) if necessary to make the
Senior Project financially feasible; and shall mature SS years from the final
certificate of occupancy issued for the Senior Project.
1.2.2.2. State HOME Funds. On or before August 14,2009, Eden shall apply to the
State of California ("State") for a State HOME grant of funds in the approximate
amount of $2, 800,000.00 to finance pre -development and development costs.
1.2.2.3. HUD Section 202 Funds. On or around September, 2009, Eden shall apply for
HUD 202 funds in response to HUD's 2009 Notice of Funding Availability
("NOFA"). If the Senior Project is not selected for 2009 funding, Eden shall
submit for HUD 202 financing in 2010 and 2011.
1.3 City Approvals. Eden -shall be responsible for obtaining all approvals required by City for
the Senior Project in accordance with City's standard application process for
discretionary land use entitlements, including payment for all of City's costs of
processing such approvals. Nothing set forth herein shall be construed as a grant of
any such approvals, or as an obligation on the part of City to grant such approvals.
2. Purchase Agreement or DDLA Acknowledgments. The Parties agree that they shall use good
faith efforts to seek City Council approval of a Purchase Agreement or DDLA by April 30,
2010. Eden expressly acknowledges that a Purchase Agreement or DDLA resulting from
negotiations contemplatedby this Agreement shall become effective only if a Purchase
Agreement or DDLA is approved by the City Council following notice and hearing as required
by applicable law and compliance with all other requirements of law, including without
limitation CEQA and NEPA requirements. Without limiting the generality of the foregoing,
this Agreement does not impose a binding obligation on the City to convey the Property to
Eden, nor does it obligate the City to grant any approvals or authorizations required for the
Senior Project. The Parties acknowledge that approval and execution of a Purchase
Agreement or DDLA may precede formal approval and adoption of entitlements necessary for
the development of the Senior Project, and the Parties agree that a Purchase Agreement or
DDLA will provide that conveyance of the Property will be expressly contingent upon City
Council approval, as applicable, of all discretionary entitlements required for the Senior
Project.
3. Eden's Exclusive Right to Negotiate with City; Term. For a period of two (2) years
commencing on the Effective Date (the "Term"),the City agrees that it will not, during the
Term of this Agreement, directly or indirectly, through any officer, employee, agent, or
otherwise, solicit, the submission of bids, offers or proposals by any person or entity with
respect to the acquisition of any interest in the Property or the development of the Property,
and the City shall not engage any broker, financial adviser or consultant to initiate or
encourage proposals or offers from other parties with respect to the disposition or development
of the Property or any portion thereof.
4. Eden's Studies, Right of Entry. During the Term, Eden shall use its best efforts to prepare, at
Eden's expense, any studies, surveys, plans, specifications and reports ("Eden's Studies")
Eden deems necessary or desirable in Eden's sole discretion, to determine the suitability of the
Property for the Senior Project. Such studies may include, without limitation, title
investigation, relocation plans, marketing, feasibility, soils, seismic and environmental studies,
financial feasibility analyses and design studies. Eden shall be responsible for obtaining the
City's advance written permission from the City Manager or his designee for access to the
Property as may be necessary to prepare Eden's Studies. In connection with entry onto the
Property, Eden shall and hereby agrees to indemnify, defend (with counsel approved by the
City) and hold harmless the Indemnities (defined in Section 11) from and against all Claims
(defined in Section 11) resulting from or arising in connection with entry upon the Property by
Eden or Eden's agents, employees, consultants, contractors or subcontractors.
4.1. Right of Entry Agreement: Copies of Reports/Tests. The City may require Eden to
execute a right of entry agreement satisfactory to the City prior to entry onto the Property.
The City Manager or his designee shall have authority to sign such agreement without
further approval of the Council. Eden's inspection, examination, survey and review of
the Property shall be at Eden's sole expense. Eden shall provide the City with copies of all
reports and test results within ten (10) days following completion of such reports and
testing, whether or not such reports and test results are completed prior to or after the
expiration or earlier termination of this Agreement.
4.2. Property Condition. Eden shall repair, restore and return the Property to its condition
immediately preceding Eden's entry thereon at Eden's sole expense. Eden shall at all
times keep the Property free and clear of all liens and encumbrances affecting title to the
Property. Eden's indemnification obligations, obligations to provide reports and test
results, and obligations to discharge liens that attach to the Property as set forth in Section
11 shall survive the expiration or earlier termination of this Agreement.
5. The City's Reports and Studies. Within fifteen (15) days following the Effective Date, the
City shall make available to Eden for review or copying, at Eden's expense, all non -privileged
studies, non -confidential surveys, plans, specifications, reports, and other documents
concerning the physical condition of the Property that the City has in its possession or control.
6. Relationship of Parties. The Parties agree that nothing in this Agreement is intended to or shall
be deemed or interpreted to create among them the relationship of buyer and seller, or of
partners orjoint venturers.
7. Confidentiality: Dissemination of Information. During the Term, each Party shall obtain the
consent of the other Party prior to issuing or permitting any of its officers, employees or agents
to issue any press release or other information to the press with respect to this Agreement;
provided however, no Party shall be prohibited from supplying any information to its
representatives, agents, attorneys, advisors, financing sources and others to the extent
necessary to accomplish the activities contemplated hereby so long as such representatives,
agents, attorneys, advisors, financing sources and others are made aware of the terms of this
Section. Nothing contained in this Agreement shall prevent any Party at any time from
complying with the CaliforniaPublic Records Act, furnishing any required information to any
governmental entity or authority pursuant to a legal requirement or from complying with its
legal or contractual obligations.
8. Termination.
8.1. Mutual Consent, This Agreement may be terminated at any time by mutual written
consent of the Parties.
8.2. City's Right to Terminate, The City shall have the right to terminate this Agreement upon
its good faith and reasonable determination that Eden is not proceeding diligently and in
good faith to carry out its obligations pursuant to this Agreement. The City shall exercise
such right by providing at least thirty (30) days' advance written notice to Eden which
notice shall describe the nature of Eden's default hereunder. Notwithstanding the
foregoing, if Eden commences to cure such default within such thirty (30) day period and
diligently prosecutes such cure to completion within the earliest feasible time, but not later
than thirty (30) days followingthe date of the notice, this Agreement shall remain in
effect.
8.3. Eden's Right to Terminate.
8.3.1. Financial or Physical Infeasibility. Eden shall have the right to terminate this
Agreement, effective upon thirty (3 0) days' written notice to the City that Eden has
determined the Senior Project is financially or physically infeasible and the City has
reviewed and agreed, in its reasonable discretion, with Eden's determination.
8.3.2. Environmental and/or Entitlement Infeasibilitv. If the City Council is unable for
any reason to adopt or approve the certification of environmental documents required
for the Senior Project pursuant to NEPA, CEQA or to rezone the Property for the
Senior Project, Eden shall have the right to terminate this Agreement and the City
shall reimburse Eden for its actual out-of-pocket costs paid to third parties for
predevelopment activities in connection with the proposed development of Property,
provided the amount to be reimbursed shall not exceed Fifty Thousand Dollars
($50,000.00).
9. Effect of Termination or Expiration of the Term. Upon termination as provided herein, or
upon the expiration of the Term (and any extensions thereof) without the Parties having
successfully negotiated a Purchase Agreement or DDLA, this Agreement shall be void, and
there shall be no further liability or obligation on the part of any of the Parties or their
respective officers, employees, agents or other representatives; provided however, the
provisions of Section 4.2, Section 7, Section 8.3.2 and Section 11, shall survive such
termination.
10. Notices. Each notice, demand or other document required to be given hereunder ("Notice")
shall be in writing and shall be delivered personally (including messenger or courier service
with evidence of receipt) or sent by the United States Postal Service ("USPS"), certified mail,
return receipt requested, with proper postage prepaid, addressed to the parties at the respective
addresses set forth below. Each Notice shall be effective upon being so deposited, but the time
period in which a response to any such Notice must be given or any action taken with respect
thereto shall commence to run from the date of receipt of the Notice by the addressee thereof.
If to the City: City of Lodi Community Development Department
221 W. Pine Street
Lodi, CA 95240
Attention: Joseph Wood, Neighborhood Services Manager
If to Eden: Eden Development, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention: Executive Director
copy to: D. Stephen Schwabauer, City Attorney
City of Lodi
221 W. Pine Street
Lodi, CA 95240
11. Indemnification. Eden hereby covenants to indemnify, hold harmless and defend the City and their
respective elected and appointed officials, officers, agents, representatives and employees (all of the
foregoing, collectively the "Indemnities") from and against all liability, loss, cost, claim, demand,
action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense
(including, without limitation, reasonable attorney's fees and costs of litigation) (all of the foregoing,
collectively the "Claims") arising out of any act of negligence, misfeasance or willful misconduct of
Eden in connection with this Agreement or the activities contemplated hereby. Eden shall have no
indemnification obligation with respect to the negligence, misfeasance or willful misconduct of the
City or for any Claims arising from the presence of any hazardous materials on the Property prior to
conveyance of the Property to Eden. Eden's indemnification obligations set forth in this Section 11,
shall survive the expiration or earlier termination of this Agreement. Nothwithstanding the foregoing,
in the event a CEQA or NEPA lawsuit is brought which relates to this Agreement, and a Purchase
Agreement or DDLA to be negotiated, and/or the Senior Project, the Parties shall meet and confer
about whether to proceed with the Senior Project. If the parties are unable to agree, either party may
terminate this Agreement without further obligation.
12. Severability. If any term or provision of this Agreement or the application thereof shall, to any
extent, be held to be invalid or unenforceable, such term or provision shall be ineffective to the
extent of such invalidity or unenforceability without invalidating or rendering unenforceable
the remaining terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or unenforceable
unless an essential purpose of this Agreement would be defeated by loss of the invalid or
unenforceable provision.
13. Amendments: Counterparts. This Agreement may be amended only by a written instrument
executed by the Parties or their successors in interest. This Agreement may be executed in
multiple counterparts, each of which shall be an original and all of which together shall
constitute one agreement.
14. Successors and Assigns; No Third -Party Beneficiaries. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and assigns; provided
however, that Eden shall not transfer or assign any of its rights hereunder by operation of law
or otherwise without the prior written consent of the City, and any such transfer or assignment
without such consent shall be void. Subject to the immediately preceding sentence, this
Agreement is not intended to benefit, and shall not run to the benefit of or be enforceable by,
any other person or entity other than the Parties and their permitted successors and assigns.
The Parties acknowledge that Eden shall have the right to have a Purchase Agreement or
DDLA entered into by, or assigned to, a limited partnership in which the general partner is a
wholly -controlled affiliate of Eden.
15. Captions. The captions of the sections and articles of this Agreement are for convenience only
and are not intended to affect the interpretation or construction of the provisions hereof.
16. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of California without regard to principles of conflicts of law.
7
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written
above.
CITY OF LODI
a California municipal corporation
By:
Blair King, City Manager
APPROVED AS TO FORM:
D. M
hwabauer, City Attorney
ATTEST:
an
Randi Johl, City Clerk
EDEN DEVELOPMENT, INC.,
a California nonprofit public benefit corporation
Name: Terese McNamee
Its: Chief Financial Officer and Acting Executive Director
8
EXHIBIT A:
The Property
RESOLUTION NO. 2009-108
A RESOLUTION OF THE LODI CITY COUNCIL
AUTHORIZING THE CITY MANAGERTO EXECUTEAN
EXCLUSIVE RIGHTTO NEGOTIATE AGREEMENT
WITH EDEN DEVELOPMENT, INC. REGARDINGA
SENIOR HOUSING PROJECTAT 2245TIENDA DRIVE
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to execute an Exclusive Right to Negotiate Agreement with
Eden Development, Inc., a California corporation, for the development of an affordable
senior housing project known as the "Tienda Drive Senior Housing Project," attached
hereto marked ExhibitA.
Dated: August 5, 2009
------------------------------------------------------------------
------------------------------------------------------------------
I hereby certify that Resolution No. 2009-108 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held August 5, 2009, by the
following vote:
AYES: COUNCIL MEMBERS —Hitchcock, Johnson, Katzakian, Mounce,
and Mayor Hansen
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS— None
ABSTAIN: COUNCIL MEMBERS — None
City Clerk
2009-108
EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT
This Exclusive Right to Negotiate Agreement ("Agreement") is entered into effective as of
, 2009 ("Effective Date"), by and between the City of Lodi, a municipal
corporation ("City") and Eden Development, Inc., a California nonprofit public benefit
corporation ("Eden;'). City and Eden are referred to collectively as the "Parties."
RECITALS
A. The City owns that unimproved parcel consisting of approximately 3.39 acres
located at 2245 Tienda Drive in the City of Lodi, more particularly described in FXhi;t A attached
hereto (the "Property").
B. The City has determined that the desired future use of the Property shall be an
affordable rental residential development that is age restricted for seniors. Accordingly, the City
issued a Request for Qualifications ("RFQ") inviting submissions from developers interested in
developing the Property with affordable rental housing for seniors with restrictions compatible
with the financing requirements of the Community Development Block Grant Program ("CDBG"),
the Home Investment Partnership Act ("HOME") and the Department of Housing and Urban
Development ("HUD") Section 202 Supportive Housing for the Elderly Program ("HUD 202").
C. In response to the City's RFQ, Eden submitted its qualifications to construct, own
and operate rental housing affordable to very low and low income senior households at the
Property (the "Senior Project"). On April 1, 2009, the City Council selected Eden as the
developer for the Property and directed staff to proceed with the preparation of this Agreement for
the exclusive right to negotiate an agreement whose terms and conditions would govern the
conveyance of the Property to Eden for the development of the Senior Project, by Eden.
D. In reliance on the City Council's selection of Eden as the developer of the Property,
Eden will commence its due diligence and predevelopment activities for the acquisition of the
Property and development of the Senior Project, including submitting applications for project
financing, which include but are not limited to CDBG, HOME and HUD 202 funds.
E. Until such time that the appropriate environmental assessment of the Senior Project
is complete in accordance with the provisions of the California Environmental Quality Act
("CEQA") and the National Environmental Policy Act ("NEPA"), an Option to Purchase and
Purchase Agreement ("Purchase Agreement") or a Disposition Development and Loan Agreement
("DDLA")cannot be entered into by the Parties. This Agreement is expressly conditioned on a
subsequent determination to proceed with, modify or cancel the Senior Project based on the
required environmental review, pursuant to CEQA and NEPA requirements.
F. The purpose of this Agreement is to set forth the Parties' common understanding
that Eden shall have the exclusive right to negotiate a Purchase Agreement or a DDLA to develop
the Property, and that for the term set forth in this Agreement, the City shall not discuss or
negotiate development opportunities or rights with respect to the Property with any other person or
entity other than Eden, and that the Parties shall enter into a Purchase Agreement or DDLA, to be
negotiated, upon environmental approval of the Senior Project.
G. As more fully set forth in this Agreement, the Parties acknowledge and agree that
this Agreement does not grant Eden the right to acquire the Property or construct the Senior
Project, nor does it obligate Eden to any activities or costs to acquire the Property or construct the
Senior Project
H. In addition to the purpose set forth in Recital F, this Agreement provides evidence
of the Parties intention regarding Eden's site control of the Property for the future acquisition and
development of the Property, to induce potential project lenders to accept Eden's applications for
project financing for the Senior Proj ect.
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
below and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows.
Disposition, Development and Loan Agreement. The Parties shall use their best efforts to
successfully negotiate a Purchase Agreement or DDLA which shall describe the terms and
conditions governing disposition of the Property for the development of the Senior Project. The
Parties agree that a Purchase Agreement or DDLA shall include, without limitation, the
following terms; provided however, nothing herein is intended to or shall limit the City's
discretionary authority to approve, deny or condition specific land use entitlements for the
Senior Project based on the required environmental review.
I.I. Senior Project.
1.1.1. Development Concept. The concept for the Senior Project includes the
development of up to Ninety (90) rental housing units serving low-income seniors.
The concept of "aging in place" (i.e., making sure that seniors can live independently
even as they become frail), will be integral to the Senior Project. Accessibility will
also be a priority. The Senior Project will have an elevator, include community
spaces, laundry facilities and management offices, and all units will be fully adaptable
and/or accessible.
1.1.2. Affordability Requirements. Upon conveyance of the Property to Eden, the
Property will be subject to a recorded regulatory agreement between Eden and the
City that will require Forty Nine Percent (49%) of the rental units be offered for rent
and occupancy by very low and low income senior households at an affordable rent
for a term of not less than Fifty Five (55) years.
1.2. Financial Terms.
1.2.1. Purchase Price. The purchase price for the Property shall be Six Hundred Thirty
Dollars ($630,000), as is substantiated by a qualified appraisal dated July 2,2009.
1.2.2. Financing.
1.2.2.1.City CDBG and/or HOME Loan to Eden. Eden shall apply to the City for a
CDBG and HOME loan of funds which have been set aside by the City in the
amount of $1,100,000.00, to finance the closing cost for Eden's acquisition of
the Property, with the balance of the loan proceeds used to finance
predevelopment costs for the Senior Project. The City loan to Eden shall have,
at a minimum, the following terms: be a nonrecourse loan secured by the
Property; repaid on a residual receipts basis; shall be bear interest at a simple
rate not to exceed 3% per annum and shall be contingent (i.e., no accrual of
interest if the interest is not paid current annually) if necessary to make the
Senior Project financially feasible; and shall mature 55 years from the final
certificate of occupancy issued for the Senior Project.
1.2.2.2. State HOME Funds. On or before August 14,2009, Eden shall apply to the
State of California ("State") for a State HOME grant of funds in the approximate
amount of $2, 800,000.00 to finance pre -development and development costs.
1.2.2.3. HUD Section 202 Funds. On or around September, 2009, Eden shall apply for
HUD 202 funds in response to HUD's 2009 Notice of Funding Availability
("NOFA"). If the Senior Project is not selected for 2009 funding, Eden shall
submit for HUD 202 financing in 2010 and 2011.
1.3 City Approvals. Eden -shall be responsible for obtaining all approvals required by City for
the Senior Project in accordance with City's standard application process for
discretionary land use entitlements, including payment for all of City's costs of
processing such approvals. Nothing set forth herein shall be construed as a grant of
any such approvals, or as an obligation on the part of City to grant such approvals.
2. Purchase Agreement or DDLA Acknowledgments• The Parties agree that they shall use good
faith efforts to seek City Council approval of a Purchase Agreement or DDLA by April 30,
2010. Eden expressly acknowledges that a Purchase Agreement or DDLA resulting from
negotiations contemplated by this Agreement shall become effective only if a Purchase
Agreement or DDLA is approved by the City Council following notice and hearing as required
by applicable law and compliance with all other requirements of law, including without
limitation CEQA and NEPA requirements. Without limiting the generality of the foregoing,
this Agreement does not impose a binding obligation on the City to convey the Property to
Eden, nor does it obligate the City to grant any approvals or authorizations required for the
Senior Project. The Parties acknowledge that approval and execution of a Purchase
Agreement or DDLA may precede formal approval and adoption of entitlements necessary for
the development of the Senior Project, and the Parties agree that a Purchase Agreement or
DDLA will provide that conveyance of the Property will be expressly contingent upon City
Council approval, as applicable, of all discretionary entitlements required for the Senior
Project.
3. Eden's Exclusive Right to Negotiate with City; Term. For a period of two (2) years
commencing on the Effective Date (the "Term"), the City agrees that it will not, during the
Term of this Agreement, directly or indirectly, through any officer, employee, agent, or
otherwise, solicit, the submission of bids, offers or proposals by any person or entity with
respect to the acquisition of any interest in the Property or the development of the Property,
and the City shall not engage any broker, financial adviser or consultant to initiate or
encourage proposals or offers from other parties with respect to the disposition or development
of the Property or any portion thereof.
4. Eden's Studies: Riaht of Entry. During the Term, Eden shall use its best efforts to prepare, at
Eden's expense, any studies, surveys, plans, specifications and reports ("Eden's Studies")
Eden deems necessary or desirable in Eden's sole discretion, to determine the suitability of the
Property for the Senior Project. Such studies may include, without limitation, title
investigation, relocation plans, marketing, feasibility, soils, seismic and environmental studies,
financial feasibility analyses and design studies. Eden shall be responsible for obtaining the
City's advance written permission from the City Manager or his designee for access to the
Property as may be necessary to prepare Eden's Studies. In connection with entry onto the
Property, Eden shall and hereby agrees to indemnify, defend (with counsel approved by the
City) and hold harmless the Indemnities (defined in Section 11) from and against all Claims
(defined in Section 11) resulting from or arising in connection with entry upon the Property by
Eden or Eden's agents, employees, consultants, contractors or subcontractors.
4.1. Right of Enta Agreement; Copies of Reports/Tests. The City may require Eden to
execute a right of entry agreement satisfactory to the City prior to entry onto the Property.
The City Manager or his designee shall have authority to sign such agreement without
further approval of the Council. Eden's inspection, examination, survey and review of
the Property shall be at Eden's sole expense. Eden shall provide the City with copies of all
reports and test results within ten (10) days following completion of such reports and
testing, whether or not such reports and test results are completed prior to or after the
expiration or earlier termination of this Agreement.
4.2. Property Condition. Eden shall repair, restore and return the Property to its condition
immediately preceding Eden's entry thereon at Eden's sole expense. Eden shall at all
times keep the Property free and clear of all liens and encumbrances affecting title to the
Property. Eden's indemnification obligations, obligations to provide reports and test
results, and obligations to discharge liens that attach to the Property as set` forth in Section
LL shall survive the expiration or earlier termination of this Agreement.
5. The City's Reports and Studies. Within fifteen (.15) days following the Effective Date, the
City shall make available to Eden for review or copying, at Eden's expense, all non -privileged
studies, non -confidential surveys, plans, specifications, reports, and other documents
concerning the physical condition of the Property that the City has in its possession or control.
6. Relationship of Parties. The Parties agree that nothing in this Agreement is intended to or shall
be deemed or interpreted to create among them the relationship of buyer and seller, or of
partners orjoint venturers.
7. Confidentiality; Dissemination of Information. During the Term, each Party shall obtain the
consent of the other Party prior to issuing or permitting any of its officers, employees or agents
to issue any press release or other information to the press with respect to this Agreement;
provided however, no Party shall be prohibited from supplying any information to its
representatives, agents, attorneys, advisors, financing sources and others to the extent
necessary to accomplish the activities contemplated hereby so long as such representatives,
agents, attorneys, advisors, financing sources and others are made aware of the terms of this
Section. Nothing contained in this Agreement shall prevent any Party at any time from
4
complying with the California Public Records Act, furnishing any required information to any
governmental entity or authority pursuant to a legal requirement or from complying with its
legal or contractual obligations.
Termination.
8. L Mutual Consent. This Agreement may be terminated at any. time by mutual written
consent of the Parties.
8.2. City' Right to Terminate. The City shall have the right to terminate this Agreement upon
its good faith and reasonable determination that Eden is not proceeding diligently and in
good faith to carry out its obligations pursuant to this Agreement. The City shall exercise
such right by providing at least thirty (30) days' advance written notice to Eden which
notice shall describe the nature of Eden's default hereunder. Notwithstanding the
foregoing, if Eden commences to cure such default within such thirty (30) day period and
diligently prosecutes such cure to completion within the earliest feasible time, but not later
than thirty (3 0) days following the date of the notice, this Agreement shall remain in
effect.
8.3. Eden's Richt to Terminate.
8.3.1. Financial or Physical Infeasibility. Eden shall have the right to terminate this
Agreement, effective upon thirty (3 0) days' written notice to the City that Eden has
determined the Senior Project is financially or physically infeasible and the City has
reviewed and agreed, in its reasonable discretion, with Eden's determination.
8.3.2. Environmental and/or Entitlement Infeasibilitv. If the City Council is unable for
any reason to adopt or approve the certification of environmental documents required
for the Senior Project pursuant to NEPA, CEQA or to rezone the Property for the
Senior Project, Eden shall have the right to terminate this Agreement and the City
shall reimburse Eden for its actual out-of-pocket costs paid to third parties for
predevelopment activities in connection with the proposed development of Property,
provided the amount to be reimbursed shall not exceed Fifty Thousand Dollars
($50,000.00).
9. Effect of Termination or Expiration of the Term. Upon termination as provided herein, or
upon the expiration of the Term (and any extensions thereof) without the Parties having
successfully negotiated a Purchase Agreement or DDLA, this Agreement shall be void, and
there shall be no further liability or obligation on the part of any of the Parties or their
respective officers, employees, agents or other representatives; provided however, the
provisions of Section 4.2, Section 7, Section 8.3.2 and Section 11, shall survive such
termination.
10. Notices. Each notice, demand or other document required to be given hereunder ("Notice")
shall be in writing and shall be delivered personally (including messenger or courier service
with evidence of receipt) or sent by the United States Postal Service ("USPS"), certified mail,
return receipt requested, with proper postage prepaid, addressed to the parties at the respective
addresses set forth below. Each Notice shall be effective upon being so deposited, but the time
period in which a response to any such Notice must be given or any action taken with respect
thereto shall commence to run from the date of receipt of the Notice by the addressee thereof.
If to the City: City of Lodi Community Development Department
221 W. Pine Street
Lodi, CA 95240
Attention: Joseph Wood, Neighborhood Services Manager
If to Eden: Eden Development, Inc.
22645 Grand Street
Hayward, CA 94541-5031
Attention: Executive Director
copy to: D. Stephen Schwabauer, City Attorney
City of Lodi
221 W. Pine Street
Lodi, CA 95240
Indemnification. Eden hereby covenants to indemnify, hold harmless and defend the City and their
respective elected and appointed officials, officers, agents, representatives and employees (all of the
foregoing, collectively the "Indemnities") from and against all liability, loss, cost, claim, demand,
action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense
(including, without limitation, reasonable attomey'sfees and costs of litigation) (all of the foregoing,
collectively the "Claims") arising out of any act of negligence, misfeasance or willful misconduct of
Eden in connection with this Agreement or the activities contemplated hereby. Eden shall have no
indemnification obligation with respect to the negligence, misfeasance or willful misconduct of the
City or for any Claims arising from the presence of any hazardous materials on the Property prior to
conveyance of the Property to Eden, Eden's indemnification obligations set forth in this Section 11,
shall survive the expiration or earlier termination of this Agreement, Nothwithstandingthe foregoing,
in the event a CEQA or NEPA lawsuit is brought which relates to this Agreement, and a Purchase
Agreement or DDLA to be negotiated, and/or the Senior Project, the Parties shall meet and confer
about whether to proceed with the Senior Project. If the parties are unable to agree, either party may
terminate this Agreement without further obligation.
12. Severability. If any term or provision of this Agreement or the application thereof shall, to any
extent, be held to be invalid or unenforceable, such term or provision shall be ineffective to the
extent of such invalidity or unenforceability without invalidating or rendering unenforceable
the remaining terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or unenforceable
unless an essential purpose of this Agreement would be defeated by loss of the invalid or
unenforceable provision.
13. Amendments, Counterparts. This Agreement may be amended only by a written instrument
executed by the Parties or their successors in interest, This Agreement may be executed in
multiple counterparts, each of which shall be an original and all of which together shall
constitute one agreement.
14. Successors and Assigns; No Third -Party Beneficiaries. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and assigns; provided
however, that Eden shall not transfer or assign any of its rights hereunder by operation of law
or otherwise without the prior written consent of the City, and any such transfer or assignment
without such consent shall be void. Subject to the immediately preceding sentence, this
Agreement is not intended to benefit, and shall not run to the benefit of or be enforceable by,
any other person or entity other than the Parties and their permitted successors and assigns.
The Parties acknowledge that Eden shall have the right to have a Purchase Agreement or
DDLA entered into by, or assigned to, a limited partnership in which the general partner is a
wholly -controlled affiliate of Eden.
15. Captions. The captions of the sections and articles of this Agreement are for convenience only
and are not intended to affect the interpretation or construction of the provisions hereof.
16. Governing Law. This Agreement shall be governed by and construed in accordance. with the
laws of the State of California without regard to principles of conflicts of law.
01
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written
above.
CITY OF LODI
a California municipal corporation
Blair King, City Manager
APPROVED AS TO FORM:
am
ATTEST:
Randi Johl, City Clerk
EDEN DEVELOPMENT, INC.,
a California nonprofit public benefit corporation
r
Name: Terese McNamee
D. n chwabauer, City Attorney
Its: Chief Financial Officer and Acting Executive Director
EXHIBIT A:
The Property
AGENDA ITEM MT4JJO
CITY OF LODI
COUNCIL COMMUNICATION
im
AGENDA TITLE: Conduct a Public Hearing to Consider Adoption of a Resolution Authorizing the
Reallocation of Available Community Development Block Grant and HOME
Program Funding to Eden Housing, Inc, for an Affordable Senior Housing Project.
MEETING DATE: August 5,2009
PREPARED BY: Community Development Department
RECOMMENDEDACTION: Conduct a Public Hearing to consider adoption cf a Resolution
authorizing the reallocation of available Community Development
Block Grant and HOME Program funding to Eden Housing, Inc. for
an affordable senior housing project.
BACKGROUND INFORMATION: In 2006, the City Council allocated $330,000 cf our Community
Development Block Grant (CDBG) funding toward the acquisition of
land for an affordable housing project. Shortly thereafter, we
supplemented that 2006 CDBG allocation with a combination of
both CDBG and HOME fund program income that had been generated through our existing Housing
Assistance Programs that serve low-income homebuyers and homeowners. We currently have a
balance of $1.1 million, detailed in Exhibit A, to use for the acquisition of land for an affordable housing
project.
On April 1, 2009, the Council authorized the City Manager to enter into negotiations with Eden Housing,
Inc. in regards to an affordable senior housing development located at 2245Tienda Drive, Lodi,
California.
In order to accommodate Eden Housing's use of the those funds for land acquisition and pre -
development costs, and to further substantiate the commitment of funding to this project for their
subsequent applications for funding to the HUD 202 Program and the State Housing and Community
Development Department HOME Program, the available funding will be allocated specifically to Eden
Housing, Inc.
FISCAL IMPACT: NIA
FUNDING AVAILABLE: CDBGIHOME Program Funding
KB/jw
� F
Konradt Bartlam
Community Development Director
APPROVED:
Blair Kirk_t City Manager
FUNDINGAVAILABLE FOR EDEN HOUSINGAFFORDABLE SENIOR HOUSING DEVELOPMENTPROJECT
CDBG $311,830.72 (2006AIlocation)
$449,988.79 (Program Income- Rehab& GAP)
$761,819.51 Total CDBG Funding $761,819.51
HOME $263,675.00 (Program Income- Other)
$119,403.91 (Program Income- Habitat)
$29,863.91 (Program Income- Rental Rehab)
$412,942.82 Total HOME Funding $412,942.82
TOTALAVAILABLE FUNDING $1,174,762.33
EXHIBITA
RESOLUTION NO. 20097OPM1 6
-
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING
THE REALLOCATION OF AVAILABLE COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) AND HOME
PROGRAM INCOME TO EDEN HOUSING, INC, FOR AN
AFFORDABLE SENIOR HOUSING PROJECT
WHEREAS, a total of $330,000 in CDBG funds was allocated toward land acquisition for
an affordable housing project as part of the 2006/07 annual allocation of CDBG/HOME Program
funding; and
WHEREAS, the City of Lodi has pledged to provide a total of $1.1 million toward the
acquisition of land and aredeveloament financing for a proposed affordable housing project;
and
WHEREAS, on April 1, 2009, the Lodi City Council authorized the City Manager to enter
into negotiations with Eden Housing, Inc. in regards to the development of an affordable senior
housing project at 2245 Tienda Drive, Lodi, CA; and
WHEREAS, the City of Lodi has a balance of program income available in the Housing
Assistance Program from previous down -payment assistance and housing rehabilitation loans
that have been paid back in the past few years.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the reallocation of $1,174,762.33 in available CDBG and HOME Program funding, as
indicated below, to Eden Mousing, Inc. for an affordable senior housing project in Lodi at 2245
Tienda Drive:
CDBG Allocation
CDBG Program Income
HOME Rental Rehab
HOME Habitat
HOME Other
TOTAL
$ 311,830.72
$ 449,988.79
$ 29,863.91
$ 119,403.91
$ 263.675.00
$1,174,762.33
Dated: August 5, 2009
----------------------------------------------
----------------------------------------------
hereby certify that Resolution 2009- was passed and adopted by the Lodi City
Council in a regular meeting held on August 5, 2009, by the following vote:
AYES: COUNCIL MEMBERS —
NOES: COUNCIL MEMBERS —
ABSENT: COUNCIL MEMBERS —
"]1_11�i�Ke1�LL�l��l��l:��:��
RANDIJOHL
City Clerk
2009-
RESOLUTION NO. 2009-109
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING THE
REALLOCATION OF AVAILABLE COMMUNITY DEVELOPMENT BLOCK
GRANT AND HOME PROGRAM INCOME TO EDEN DEVELOPMENT, INC.
FOR AN AFFORDABLE SENIOR HOUSING PROJECT
WHEREAS, a total of $330,000 in Community Development Block Grant (CDBG) funds
was allocated toward land acquisition for an affordable housing project as part of the 2006-07
annual allocation of CDBG/HOME Programfunding; and
WHEREAS, the City of Lodi has pledged to provide a total cf $1.1 million toward the
acquisition of land and predevelopment financing for a proposed affordable housing project; and
WHEREAS, on April 1, 2009, the Lodi City Council authorized the City Manager to enter
into negotiations with Eden Development, Inc. in regard to the development of an affordable
senior housing project at 2245 Tienda Drive, Lodi, CA; and
WHEREAS, the City of Lodi has a balance of program income available in the Housing
Assistance Program from previous down -payment assistance and housing rehabilitation loans
that have been paid back in the past few years.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the reallocation of $1,174,762.33 in available CDBG and HOME Program funding, as
indicted below, to Eden Development, Inc. for an affordable senior housing project in Lodi at
2245 Tienda Drive:
CDBG Allocation
CDBG Program Income
HOME Rental Rehab
HOME Habitat
HOME Other
TOTAL
$ 311,830.72
$ 449,988.79
$ 29,863.91
$ 119,403.91
$ 263,675.00
$1,174,762.33
Dated: August 5, 2009
------------------------------------------------------------------------
------------------------------------------------------------------------
hereby certify that Resolution 2009-109 was passed and adopted by the Lodi City
Council in a regular meeting held on August 5, 2009, by the following vote:
AYES: COUNCIL MEMBERS— Hitchcock, Johnson, Katzakian, Mounce, and
Mayor Hansen
NOES: COUNCIL MEMBERS— None
ABSENT: COUNCIL MEMBERS— None
ABSTAIN: COUNCIL MEMBERS— ne
DI JOHL
City Clerk
2009-109
Eden Housing —Eden Development
Affordable Senior Housing Project
Presentation by
Community Development Department
August 5, 2009
Eden Housing — Eden Development
❑ Two Actions This Evening
■ Authorize City Manager to Execute an Exclusive
Right to Negotiate Agreement with Eden
Development, Inc.
■ Conduct Public Hearing to Reallocate
CDBG/HOME Funds to Eden Housing, Inc./Eden
Development, Inc.
❑ Both Actions Pertain to a Proposed Project at
2245 Tienda Drive
Exclusive Right to Negotiate (ERN)
❑ April 1, 2009, Council authorized City
Manager to negotiate with Eden Housing to
develop an affordable senior housing project.
■ The ERN formalizes that negotiation process.
■ The ERN is also the appropriate document to
provide Eden Housing site control in regards to
their application to State for funding.
❑ Submitting application August 17, 2009
Exclusive Right to Negotiate (ERN)
❑ 24 -month Term of Agreement
■ Eden will be:
❑ Refining details of the project and financing;
❑ Obtaining entitlements from the City;
❑ Further negotiating terms of Disposition,
Development Loan Agreement (DDLA) or Option to
Purchase and Purchase Agreement.
Exclusive Right to Negotiate (ERN)
❑ Questions?
❑ Staff Recommendation:
■ Council adopt the Resolution authorizing the City
Manager to Execute the Exclusive Right to
Negotiate agreement with Eden Housing,
Inc./Eden Development, Inc.
Public Hearing — Reallocation
❑ City has over $ 1. 1 million dedicated to land
acquisition for an affordable housing project.
■ Urban County CDBG/HOME Program funding.
■ SJC requires that we allocate those funds
specifically to this new project site and developer.
Public Hearing — Reallocation
❑ Funds to be used for:
■ Acquisition of land from City;
■ Pre -Development costs.
❑ Allocation of Funding to Eden
■ Further substantiates City's commitment of
funding to this project.
❑ Required when applying for State and Federal
funding.
Public Hearing — Reallocation
❑ Questions?
❑ Staff Recommendations:
■ After concluding Public Hearing, that the Council
adopt the Resolution that reallocates available
CDBG & HOME Program funding to Eden
Housing, Inc./Eden Development, Inc. for an
affordable housing project at 2245 Tienda Drive.
Please immediately confirm receipt
of this fax by calling 333-6702
CITY OF LODI
P. O -BOX 3006
LODI, CALIFORNIA 95241-1910
ADVERTISING INSTRUCTIONS
SUBJECT: PUBLIC HEARING TO CONSIDER REALLOCATION OF AVAILABLE
COMMUNITY DEVELOPMENT BLOCK GRANT AND HOME PROGRAM
FUNDING TO EDEN HOUSING, INC., FOR AN AFFORDABLE SENIOR
HOUSING PROJECT
PUBLISH DATE: SATURDAY, JULY 18,2009
TEAR SHEETS WANTED: One (1) please
SEND AFFIDAVIT AND BILL TO:
DATED: THURSDAY, JULY 16,2009
ORDERED BY: RANDI JOHL
CITY CLERK
OtENNIFE14M. ROBISON, CMC
ASSISTANT CITY CLERK
RANDI JOHL, CITY CLERK
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
MARIA BECERRA
ADMINISTRATIVE CLERK
Faxed to the Sentinel at 369-1084 at t0*0(date
LNS Phoned to confirm rece6fi l�- at, �l-JMR
formsladvins.doc
DECLARATION OF POSTING
PUBLIC HEARING TO CONSIDER REALLOCATION OF AVAILABLE COMMUNITY
DEVELOPMENT BLOCK GRANT AND HOME PROGRAM FUNDINGTO EDEN
HOUSING, INC., FORAN AFFORDABLE SENIOR HOUSING PROJECT
On Friday, July 17, 2009, in the City of Lodi, San Joaquin County, California, a Notice of
Public Hearing to consider reallocation of available Community Development Block
Grant and HOME Program funding to Eden Housing, Inc., for an affordable senior
housing project (attached and marked as Exhibit A) was posted at the following
locations:
Lodi Public Library
Lodi City Clerk's Office
Lodi City Hall Lobby
Lodi Carnegie Forum
declare under penalty of perjurythat the foregoing is true and correct.
Executed on July 17, 2009, at Lodi, California.
I
JE011FER ROBISON, CMC
ASSISTANT CITY CLERK
N:\Administration\CLERK\Forms\DECPOSTCDDDOC
ORDERED BY:
RANDIJOHL
CITY CLERK
MARIA BECERRA
ADMINISTRATIVE CLERK
CITY OF LODI NOTICE OF PUBLIC HEARING
Carnegie Forum Date: August 5,2009
305 West Pine Street, Lodi Time: 7:00 p.m.
For information regarding this notice please contact:
Randi Johl
City Clerk U Hbii Al
i
Telephone: (209) 333-6702
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on Wednesday, August 5, 2009, at the hour of
7:00 p.m., or as soon thereafter as the matter may be heard, the City Council will
conduct a public hearing at the Carnegie Forum, 305 West Pine Street, Lodi, to consider
the following item:
a) Reallocation of available Community Development Block Grant
and HOME Program funding to Eden Housing, Inc., for an
affordable senior housing project.
Information regarding this item may be obtained in the Community Development
Department, 221 West Pine Street, Lodi, (209) 333-6711. All interested persons are
invited to present their views and comments on this matter. Written statements may be
filed with the City Clerk, City Hall, 221 West Pine Street, 2nd Floor, Lodi, 95240, at any
time prior to the hearing scheduled herein, and oral statements may be made at said
hearing.
If you challenge the subject matter in court, you may be limited to raising only those
issues you or someone else raised at the public hearing described in this notice or in
written correspondence delivered to the City Clerk, 221 West Pine Street, at or prior to
the close of the public hearing.
By Or of the Lodi City Council:
Ran t Johl
City Clerk
Dated: July 15,2009
D. Stephen Schwabauer
City Attorney
CL£RKIPUBHEA"OTICES NOTCOO.DOC 7115!09