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Home My WebLink AboutD-4 - First Amendment to Net Development Co. DDASCHEDULED ITEM D-4 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: MAY 16, 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. RECOMMENDATION: Staff recommends that the City Council take the following action: 1) Adopt Resolution No. 2016-C33 Approving the First Amendment to the 2014 Disposition and Development Agreement with Net Development Co., Inc. and authorizing 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. Following the conclusion of those processes, Developer closed escrow on the property and has begun CONTINUED First Amendment to Net Development Co. DDA May 16, 2016 Page 2 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-C33 2) DDA 1st Amendment 45635.09000\26188518.1 1 RESOLUTION NO. 2016-C33 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 Error! Unknown document property name./017604- 0065 Error! Unknown document property name..Error! Unknown document property name. a05/12/16 FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT This FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (“First Amendment”) is dated as of April __, 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: 1. 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. 2. Correction of APN No. The second APN No. set forth in Recital A of the DDA is hereby amended to read “8614-014-919.” 3. 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. Correspondingly, the date to complete construction of the hotel pursuant to the Schedule of Performance attached to the DDA as Exhibit “C” is hereby amended to December 31, 20017. 4. 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 Error! Unknown document property name./017604- 0065 Error! Unknown document property name..Error! Unknown document property name. a05/12/16 -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: Error! Unknown document property name./017604- 0065 Error! Unknown document property name..Error! Unknown document property name. a05/12/16 -3- SIGN ONE LP, a California limited partnership By: NDC Realty Resources, Inc., a California corporation, its General Partner By: Its: