The URL can be used to link to this page

Home My WebLink AboutE-10 Costanzo ENA ExtensionCONSENT ITEM E-10 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER FROM: KURT E. CHRISTIANSEN, FAICP, ECONOMIC AND COMMUNITY DEVELOPMENT DIRECTOR DATE: NOVEMBER 7, 20016 SUBJECT: CONSIDERATION OF A NINETY DAY EXTENSION OF THE CONSTANZO INVESTMENTS EXCLUSIVE NEGOTIATION AGREEMENT FOR THE A-2 PROPERTIES LOCATED AT SOUTHEAST CORNER OF AZUSA AVENUE AND 9TH STREET SUMMARY: City Staff has been working with Costanzo Investments to complete the Disposition and Development Agreement (DDA) for the properties located at the southeast corner of Azusa Avenue and 9th street. The City executed the initial Exclusive Negotiation Agreement (ENA) on May 9, 2016, for a ninety (90) day period. After showing substantial performance, the City Manager granted an additional ninety (90) day extension. City staff had been working diligently with the Developer to complete the DDA. The current extension is set to expire on November 7, 2016. Although the DDA is in a final draft form, with just minor issues that must be resolved, there is insufficient time before the current extension expires to complete everything for City Council consideration. The proposed actions approve a ninety (90) extension to the ENA with Constanzo Investments, which allows for the completion of the DDA. RECOMMENDATION: Staff recommends that the City Council take the following actions: 1) Approve a ninety (90) day Exclusive Negotiating Agreement (“ENA”) extension with Constanzo Investments, LLC, which allows for the completion of the Disposition and Development Agreement (DDA) between the City and Constanzo Investments for the purpose of development of a mixed-use project on the A-2 properties located at the southeast corner of Azusa Avenue and 9th street; and 2)Authorize the Mayor to execute the ninety (90) day ENA Extension, in a form acceptable to the City Attorney, on behalf of the City. APPROVED COUNCIL MEETING 11/7/2016 Costanzo ENA Extension November 7, 2016 Page 2 DISCUSSION: On March 7, 2016, the City Council approved an ENA with Costanzo Investments for the purpose of development of a mixed-use project on the A-2 properties located at the southeast corner of Azusa Avenue and 9th street and authorized the Mayor to sign the agreement when finalized. The Agreement was executed on May 9, 2016. On August 2, 2016, the City received a request from Constanzo Investments to extend the Exclusive Negotiation Agreement (ENA) for an additional 90 days. The ENA initial term was set at 90 days, and was set to expire on August 8th. The agreement allowed for the negotiation period to be extended by the City Manager for an additional 90 days. The ENA was extended by the City Manager based on the substantial progress Constanzo Investments had made during the first 90 days. Costanzo Investments has hired JJL to broker the site JLL has prepared marketing materials for the project (Attachment 2). The second ENA extension deadline is Friday, November 4, 2016. Since City Hall is closed on Friday, the official deadline is Monday, November 7, 2016. During the last 90 days, Constanzo Investments and the City have made substantial progress towards completion of the DDA and scheduling the item for City Council consideration, however, additional time is required to complete the final DDA. City Staff and the City Attorney have been working with the developer to finalize the DDA; however, there are a few minor issues that still need to be resolved. These items include the possible purchase of excess property from the parking structure project and use of parking spaces within the parking structure. FISCAL IMPACT: There is no fiscal impact associated with the recommended actions. Prepared by: Reviewed and Approved: Kurt E. Christiansen, AICP Louie F. Lacasella Economic and Community Development Director Management Analyst Reviewed and Approved: Troy L. Butzlaff, ICMA-CM City Manager Attachments: 1) ENA Extension 2) Marketing Materials 1 45635.01000\29127856.1 CITY OF AZUSA SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT (Costanzo Investments, LLC/A-2 Property) THIS SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT ("Second Amendment") is dated as of November 7, 2016, for reference purposes only, and it is entered into by and between the City of Azusa, a public body, corporate and politic ("City") and Costanzo Investments, LLC, a Delaware limited liability company , a California limited liability company ("Developer"). The City and the Developer are sometimes referred to in this Agreement individually, as a "Party" and, collectively as the "Parties". This Agreement is entered into by the Parties with reference to the following recited facts (each, a "Recital"). RECITALS A. The City and the Developer previously entered into that certain "Exclusive Negotiation Agreement (Costanzo Investments, LLC/A-2 Property)" (“Original Agreement”) reference dated as of May 9, 2016, and a First Amendment on August 8, 2016. Initially capitalized terms used, but not otherwise defined, herein shall have the meaning ascribed to such terms in the Original Agreement. B. The Parties agree that the "Effective Date" of the Original Agreement occurred on May 9, 2016, and, accordingly, the Negotiation Period as defined in the Original Agreement expires on August 8, 2016. The Parties agree that the "Effective Date" of the First Amendment occurred on August 8, 2016, and, accordingly, the Negotiation Period as defined in the Original Agreement expires on November 7, 2016. The Parties have agreed that additional time is necessary to permit them to complete the Disposition and Development Agreement (“DDA”) described in the Original Agreement. Accordingly, the Parties have agreed to extend the Negotiation Period described in Section 3(a) of the Original Agreement for an additional ninety (90) day period as set forth in Section 3(b) on the terms and conditions set forth in this Second Amendment. This administrative extension of time is authorized pursuant to Section 3(b) of the Original Agreement. NOW, THEREFORE, IN VIEW OF THE GOALS AND OBJECTIVES OF THE CITY AND THE PROMISES OF THE CITY AND THE DEVELOPER SET FORTH IN THIS AGREEMENT, THE CITY AND THE DEVELOPER AGREE AS FOLLOWS: 1. Incorporation of Recitals. The Recitals of fact set forth above are true and correct and are incorporated into this Second Amendment, in their entirety, by this reference. 2 45635.01000\29127856.1 2. Affirmation Regarding Absence of Defaults. Each Party hereby represents and warrants to the other Party that, as of the Effective Date of this Second Amendment, the non- representing Party is not in material uncured default of the Original Agreement and that there have been no events that, with the passage of time, the giving of notice, or both, would constitute an event of default under the Original Agreement. Each Party understands that the foregoing representation and warranty constitutes material consideration to the other Party for the other Party's entry into this Second Amendment. 3. Effectiveness of Second Amendment. The rights and duties of the City and the Developer established by this Second Amendment shall commence on the Second date on which all of the following have occurred: (1) execution of this Second Amendment by the authorized representative(s) of the Developer and delivery of such executed Second Amendment to the City, and (2) approval of this Second Amendment by the City Council as provided in Section 3 of the Original Agreement and delivery of such executed Second Amendment to the Developer. 4. Amendment to Section 2(b) of the Original Agreement. Section 2(b) requires that if the Negotiation Period is extended, the Developer shall make a Ten Thousand Dollar ($10,000.00) Extension Deposit. This Second Amendment shall not be Effective until said Extension Deposit is received by the City. If the Extension Deposit is not received by November 8, 2016, as required by the Original Agreement, this Second Amendment shall be null and void. 5. Effect Upon Original Agreement. Except as expressly amended by this Second Amendment, the Original Agreement remains in full force and effect, unmodified except as otherwise expressly herein provided. Wherever the term "Agreement" appears in the Original Agreement, it shall be read and understood to mean the Original Agreement as amended by this Second Amendment. In the event of any direct conflict or inconsistency between the terms of the Original Agreement and this Second Amendment, the terms of this Second Amendment shall be controlling to the extent of such conflict or inconsistency. [Signatures on Following Page} 3 45635.01000\29127856.1 CITY OF AZUSA SECOND AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT (Costanzo Investments, LLC/A-2 Property) IN WITNESS WHEREOF, the City and the Developer have executed this Second Amendment to Exclusive Negotiation Agreement on the dates indicated next to each of the signatures of their authorized representatives, as appear below. Date: Date: DEVELOPER: COSTANZO INVESTMENTS, LLC By: Name: Date: CITY: THE CITY OF AZUSA By: Name: Troy Butzlaff Its: City Manager ATTEST: By: City Secretary APPROVED AS TO FORM: BEST BEST & KRIEGER, LLP By: City Attorney Trust our retailntelligence. Trust our retailntelligence. Trust our retailntelligence. Trust our retailntelligence. Trust our retailntelligence. Trust our retailntelligence. October 11, 2016 Blake Kaplan Leasing Associate -JLL 11620 Wilshire Boulevard -Suite 1150 Los Angeles, CA 90025 Blake.Kaplan@am.jll.com Main -310.473.4424 ext 3205 Direct –909.702.3367 VIA EMAIL Re:Lease Proposal Hwy 39/Azusa Ave & 9th St Azusa, CA Dear Blake: On behalf of Lee Spa Nails,I am pleased to offer this Letter of Intent to lease space at Hwy 39/ Azusa Ave &9th ST in Azusa,CA.If these terms and conditions are acceptable please sign this document and return to my attention.We are willing to consider leasing space under the following conditions: Landlord: Costanzo Investments Tenant:Lee Spa Nails LLC dba Avalon Nails &Spa. Leased Premises:The Premises shall total approximately 1,200 square feet in a mutually agreed upon location. Initial Term:Five (5)years,with one (5)five year options. Rent Commencement:120 days after Landlord shall have delivered Premises to Tenant with Landlord’s Work substantially completed (Approximately Q2, 2017). Preliminary Site Plan for Above Ground Residential Items to Finalize •Development Agreement (including parking arrangements) •City owned land for Plaza All to be completed in the next 60 days