HomeMy WebLinkAboutD-3 - First Amendment to Net Development Co. DDASCHEDULED ITEM
D-3
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER
FROM: KURT CHRISTIANSEN, FAICP, ECONOMIC & COMMUNUTY DEVELOPMENT
DIRECTOR
DATE: JUNE 6, 2016
SUBJECT: CONSIDERATION OF THE FIRST AMENDMENT TO THE 2014 DISPOSITION
AND DEVELOPMENT AGREEMENT (HOTEL/RESTAURANT) WITH NET
DEVELOPMENT CO, INC., A CALIFORNIA CORPORATION FOR THE
PROPERTY LOCATED AT 229 AND 237 S. AZUSA AVENUE
SUMMARY:
On March 15, 2016, escrow closed on the former Enterprise site, transferring the property to Net
Development, Co. During the close of escrow a lot line adjustment was recorded, adjusting the property
lines to create three (3) legal properties. This First Amendment to the Net Development, Co. Disposition
and Development Agreement assigns each of these three properties to three (3) new separate entities
owned and controlled by Net Development, one for McDonalds, one for the Hilton Home2Suites hotel,
and one for a pole sign. The Amendment also sets a new completion date based on the close of
escrow date, December 31, 2017. In addition, the City is also ratifying that the property has access to
Azusa Avenue. This item was continued from the May16, 2016 City Council meeting for a minor
modification to the Agreement.
RECOMMENDATION:
Staff recommends that the City Council take the following action:
1)Adopt Resolution No. 2016-C36 approving the First Amendment to the 2014 Disposition and
Development Agreement with Net Development Co., Inc.; and
2) Authorize the City Manager to execute the First Amendment.
DISCUSSION:
In 2014, the City and Net Development, Co (“Developer”) entered into a Disposition and Development
Agreement (“DDA”) for the sale of land and development of a hotel and restaurant project. The sale was
delayed by the dissolution of redevelopment agencies and the need to work through the State Controller
Office review of former redevelopment assets and the Long Range Property Management Plan process.
APPROVED COUNCIL
MEETING 6/6/2016
First Amendment to Net Development Co. DDA
June6, 2016
Page 2
Following the conclusion of those processes, Developer closed escrow on the property and has begun
grading and related work on the project. At this time, it is necessary to revise the DDA to reflect the
delay in closing and the impact on the Schedule of Performance. Additionally, the Developer has
designated three (3) different entities that will be responsible for different portions of the project
development.
During escrow, the lot lines of the property were adjusted to consist of three (3) legal parcels pursuant to
Lot Line Adjustment No. 2014-03. Following acquisition by Developer, Developer conveyed Parcel “A”
of the Lot Line Adjustment to Hotel One LP (the “Hotel Parcel”); Parcel “B” of the Lot Line
Adjustment to 219 LP (the “McDonald’s Parcel”) and Parcel “C” of the Lot Line Adjustment to Sign
One LP (the “Sign Parcel”).
The First Amendment will accomplish the following:
• Ratify the City’s consent to the transfer of the property by Developer to the three (3) entities
described above.
• Revise the Project Completion date to December 31, 2017.
• Ratify that the property has access directly from Azusa Avenue.
FISCAL IMPACT:
There is no fiscal impact associated with the proposed actions.
Prepared by: Reviewed and Approved
Kurt E. Christiansen, FAICP Louie F. Lacasella
Economic and Community Development Director Management Analyst
Reviewed and Approved:
Troy L. Butzlaff, ICMA-CM
City Manager
Attachments:
1) Resolution No. 2016-C36
2) DDA 1st Amendment
RESOLUTION NO. 2016-C36
A RESOLUTION OF THE CITY OF AZUSA, CALIFORNIA,
APPROVING THE FIRST AMENDMENT TO THE DISPOSITION AND
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF AZUSA AND
NET DEVELOPMENT CO., INC.
WHEREAS, on , 2014, the City approved that certain 2014 Disposition
and Development Agreement (Hotel/Restaurant) with Net Development Co., Inc. (“Developer”)
for the disposition and development of certain real property (“Property”) as a hotel and
restaurant project (“Project”) as set forth in the Agreement; and
WHEREAS, following the dissolution of the Redevelopment Agency the sale of the
Property was delayed; and
WHEREAS, on March 16, 2016 the Property was conveyed to Developer; and WHEREAS, the
Parties now desire to amend the Agreement to extend the Project
Completion Date, ratify the conveyance to certain parcel specific entities and other clarifying
matters.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Azusa as
follows:
Section 1. The City Council approves the First Amendment to the Disposition and
Development Agreement together with non-substantive changes and amendments as may be
approved by both the City Manager and City Attorney.
Section 2. The City Council hereby authorizes and directs the City Manager to take any
action and execute any documents necessary to implement the First Amendment to the
Disposition and Development Agreement.
Section 3. The City Clerk shall certify to the passage and adoption of this resolution
and the same shall thereupon take effect and be in force immediately upon its adoption.
APPROVED AND ADOPTED this day of _ , 2016.
Mayor, City of Azusa
ATTEST:
City Clerk
ATTACHMENT 1
FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT
This FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT
(“First Amendment”) is dated as of June __, 2016 and is entered into by and among the CITY
OF AZUSA, a public body, corporate and politic (“City”), NET DEVELOPMENT COMPANY,
a California corporation (“Net”); HOTEL ONE LP, a California limited partnership (“Hotel One
LP”); 219 LP, a California limited partnership (219 LP”) and SIGN ONE LP, a California
limited partnership (“Sign One LP ”). Hotel One LP, 219 LP and Sign One LP are sometimes
collectively referred to herein as the “Developer”.
RECITALS
A. City and Net entered into a Disposition and Development Agreement dated
September 7, 2014 (the “DDA”). Capitalized terms herein but not defined herein shall be defined
as set forth in the DDA.
B. The lot lines of the Property were adjusted to consist of three (3) legal parcels
pursuant to Lot Line Adjustment No. 2014-03 as set forth in the document entitled “Certificate of
Compliance” recorded August 19, 2015 as Instrument No. 2015-1014971 of the Official Records
of Los Angeles County, California (the “Lot Line Adjustment”).
C. Net acquired the Property from City on March 16, 2016 and conveyed Parcel “A”
of the Lot Line Adjustment to Hotel One LP (the “Hotel Parcel”); Parcel “B” of the Lot Line
Adjustment to 219 LP (the “McDonald’s Parcel”) and Parcel “C” of the Lot Line Adjustment to
Sign One LP (the “Sign Parcel”) concurrently with such Close of Escrow.
D. City and Developer desire to amend the DDA upon the terms and conditions
contained herein.
NOW, THEREFORE, City and Developer hereby agree as follows:
Ratification of Transfer. City, Net and Developer hereby ratify City’s consent to the
transfer of the Property to the Developer as described in the foregoing Recitals. Hotel One LP,
219 LP and Sign One LP hereby acknowledge and assume all obligations under the DDA
applicable to their respective portion of the Property.
Correction of APN No. The second APN No. set forth in Recital A of the DDA is hereby
amended to read “8614-014-919.”
Project Completion Date. Section 2.1(bbb) of the DDA regarding the definition of the
Project Completion Date is hereby extended to December 31, 2017.
Schedule of Performance. Exhibit “C” to the DDA is hereby deleted in its entirety and
Exhibit “C” attached hereto and incorporated herein by reference is hereby inserted in place
thereof.
Access Rights to Azusa Avenue. Any relinquishment or waiver of access rights to Azusa
Avenue by the Property prior to the date of this Amendment is hereby deemed terminated and of
no further force and effect. The Property has been granted access directly to Azusa Avenue to
the extent it abuts such street and City confirms and ratifies such access rights.
ATTACHMENT 2
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
the date set for the above.
CITY OF AZUSA,
a public body, corporate and politic
By:
Its:
ATTEST:
Secretary
APPROVED AS TO FORM:
By:
Its:
NET DEVELOPMENT COMPANY,
a California corporation
By:
Its:
HOTEL ONE LP,
a California limited partnership
By: NDC Realty Resources, Inc.,
a California corporation,
its General Partner
By:
Its:
219 LP,
a California limited partnership
By: NDC Realty Resources, Inc.,
a California corporation,
its General Partner
By:
Its:
SIGN ONE LP,
a California limited partnership
By: NDC Realty Resources, Inc.,
a California corporation,
its General Partner
By:
Its:
EXHIBIT “C”
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(Hotel)
SCHEDULE OF PERFORMANCE
Initiate demolition and grading May 1, 2016
Commence construction of driveway and circulation for
fire access
July 1, 2016
Pour foundation and install underground utilities Commence on or before
August 1, 2016
Begin vertical construction September 1, 2016
Complete construction of hotel December 31, 2017