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HomeMy WebLinkAboutD-5 - First Amendment to LTA, LLC Development AgreementSCHEDULED ITEM D-5 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 LTA, LLC. DEVELOPMENT AGREEMENT FOR THE PROPERTY AT 428-432 N. SAN GABRIEL AVENUE. SUMMARY: On March 2, 2004, the former Redevelopment Agency of the City of Azusa entered into a Disposition and Development Agreement for 428-432 N. San Gabriel Avenue. The Agreement required the development to be completed by a date certain. Due to the actions required by AB 1X 26, it was not possible for the Developer to proceed with the Schedule of Performance set forth in the Agreement. This action approves a First Amendment setting forth a new performance schedule that is approximately 18 months. RECOMMENDATION: Staff recommends that the City Council take the following action: 1) Adopt Resolution No. 2016-C34 -- Approving the First Amendment to the 2004 Disposition and Development Agreement with LTA, LLC. and authorizing the City Manager to execute said First Amendment. DISCUSSION: In 2004 the City and LTA, LLC (“Developer”) entered into a Disposition and Development Agreement (“DDA”) for the sale of land and development of a commercial project. The performance schedule was delayed by the dissolution of redevelopment agencies and the actions required to move with the project forward. Staff worked with the Developer to modify the agreement and a new 18 month performance schedule was developed. The agreement was also amended to prohibit any use of the new commercial space as an accessory to his existing food service operation. APPROVED COUNCIL MEETING 5/16/2016 First Amendment to DDA with LTA, LLC May 16, 2016 Page Two The First Amendment will accomplish the following: • Add a more detail description of the Development Project Building, prohibiting use as an accessory use to the Developers current food service operation. • Revise the Project Completion date to 18 months from the effective date of the First Amendment. • Set criteria for expedited review of plans by City Staff. FISCAL IMPACT: There is no fiscal impact associated with proposed actions. Prepared by: Reviewed by: 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-C34 2) DDA 1st Amendment 45635.09000\26188518.1 1 RESOLUTION NO. 2016-C34 A RESOLUTION OF THE CITY OF AZUSA, CALIFORNIA, APPROVING THE FIRST AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE CITY OF AZUSA AND LTA, LLC WHEREAS, on March 2, 2004, the City approved that certain 2004 Disposition and Development Agreement (428-432 N. San Gabriel Avenue) with LTA, LLC. (“Developer”) for the disposition and development of certain real property (“Property”) as a Commercial Retail project (“Project”) as set forth in the Agreement; and WHEREAS, following the dissolution of the Redevelopment Agency the construction of the Property was delayed; 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 45635.09000\22266923.2 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Successor Agency to the Redevelopment Agency of the City of Azusa 213 East Foothill Boulevard Azusa, California 91702-1295 Attention: Executive Director _____________________________________________________________________________________ APN's 8611-015-900 & 8611-015-901 Exempt from Recording Fees per Govt. Code §27383 FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (428-432 North San Gabriel Boulevard) This FIRST AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT (428-432 North San Gabriel Boulevard) (“First Amendment”) is dated , 2016, for references purposes only, and is entered into by and between the Successor Agency to the Redevelopment Agency of the City of Azusa, a public body, corporate and politic (“Agency”) and LTA, LLC, a California limited liability company (“Developer”). Agency and Developer are sometimes individually referred to herein as a “Party” and collectively as the “Parties.” RECITALS A. The former Redevelopment Agency of the City of Azusa (“Redevelopment Agency”) and Developer entered into the Disposition and Development Agreement (428-432 North San Gabriel Boulevard), dated March 2, 2004 (“Agreement”), in which the Redevelopment Agency agreed to sell to Developer that certain real property located within the Redevelopment Agency’s Merged Central Business District/West End Redevelopment Project Area at 428-432 North San Gabriel Boulevard, Azusa, California, as further described in Exhibit “A” to the Agreement (“Property”), and for Developer to develop the Development Project on the Property, as such term is defined in the Agreement. B. Pursuant to the passage of Assembly Bill 1X 26 (“AB 1X 26”) and the decision of the California Supreme Court in California Redevelopment Association et al. v. Ana Matosantos, et al. (2011) 53 Cal. 4th 231, all redevelopment agencies throughout the State, including the Redevelopment Agency, were deemed dissolved on February 1, 2012. C. Under AB 1X 26 and specifically Health and Safety Code Section 34173, the Agency became the successor entity to the Redevelopment Agency, and certain real property of the Redevelopment Agency, including the Property, became the property of the Agency. D. The Agreement required certain actions regarding the Development Project, including submission of plans and specifications for the Development Project, to be completed prior to the close of Escrow, and for the construction of the Development Project to be completed within a specific time period thereafter. However, because of the actions required by ATTACHMENT 2 45635.09000\22266923.2 2 AB 1X 26, it was not possible for the Developer to proceed with the Schedule of Performance set forth in the Agreement. E. Agency and Developer now desire to amend the Schedule of Performance to allow for the completion of construction of the Developer Project, and to additionally prohibit the use of the building to be developed as part of the Development Project for food service or a food service related accessory use. NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES, COVENANTS AND UNDERTAKINGS SET FORTH IN THIS FIRST AMENDMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, AGENCY AND DEVELOPER AGREE AS FOLLOWS: 1. Incorporation of Recitals. The Recitals set forth above are true and correct and are incorporated into this First Amendment by this reference. 2. Incorporation of Defined Terms. All terms, phrases and words indicated to be defined terms by initial capitalization in this First Amendment that are not specifically defined in this First Amendment shall have the meaning ascribed to the same term, phrase, or word, respectively, in the Agreement. 3. Effective Date. The Effective Date of this First Amendment shall be the first date on which all of the following have occurred: (a) Agency has received two (2) counterpart originals of this First Amendment signed by Developer’s authorized representative(s); (b) this First Amendment is approved by Agency’s governing body and signed by Agency’s authorized representative(s); (c) the Oversight Board to the Agency has approved this First Amendment; and (d) this First Amendment has been provided to the California Department of Finance and, if the Department of Finance chooses to review this First Amendment, thereafter approves this First Amendment. Agency shall send Notice of the Effective Date of this First Amendment to Developer within seven (7) calendar days following the Effective Date. 4. Amendment to Agreement. 4.1 Agency Representations and Warranties. Section 2.2(i) is hereby repealed and replaced in its entirety to read as follows: Agency is the successor entity to the former Redevelopment Agency of the City of Azusa pursuant to Health and Safety Code Section 34173. 4.2 Executive Director. Section 2.2.1 is hereby repealed and replaced in its entirety to read as follows: For the purposes of this Agreement, the phrase “to the current actual knowledge of Agency” means and refers to the current actual knowledge, without investigation or inquiry, of Mr. Troy Butzlaff, Executive Director of Agency as of the Effective Date of the First Amendment. 4.3 Use of Building. Section 4.1.3 is added to the Agreement to read as follows: 45635.09000\22266923.2 3 Development Project Building. Plans and specifications for the construction of a 4,502 square foot building to be used for the purpose of a commercial has had a preliminary review by the City in February of 2016. Developer is prohibited from using the building, or allowing the use of the building, for any purpose related to food service including, without limitation, the opening or expansion of a restaurant or as an accessory use or storage for a food service operation. 4.4 Agency Approval of Development Project Plans. Section 4.3 is hereby repealed and replaced in its entirety to read as follows: Agency Approval of Development Project Plans. Within the time set forth in the Schedule of Performance, Developer shall prepare and submit to Agency specific plans and related documents for the development of the Development Project on the Property, consistent with the Redevelopment Plan, the City’s General Plan, the City’s Zoning Ordinance and all federal, state or local laws or regulations applicable to the development or use of the Property, including a detailed proposed schedule for the Developer’s commencement and completion of each constituent element of the Development Project (collectively, the “Plans and Specifications”). Agency shall have the right of review and approval of all Plans and Specifications for the development of the Development Project on the Property, including any proposed changes thereto, for consistency with this Agreement, the Redevelopment Plan, architectural design and site layout. Agency shall approve or disapprove the Plans and Specifications within fourteen (14) business days from the date of their submission to Agency. Any disapproval shall state in writing the reasons for disapproval and the changes requested by Agency to be made. Agency shall approve the Plans and Specifications provided that the Plans and Specifications conform to this Agreement. Failure by Agency to either approve or disapprove within the time established in this Section 4.3 shall be deemed an approval. The foregoing notwithstanding, no matter shall be deemed approved unless the request for approval conforms with Section 6.6. Developer, upon receipt of a disapproval from Agency, shall revise such plans, drawings and related documents and shall re-submit them to Agency within fifteen (15) days after receipt of notice of disapproval. Any changes to the Plans and Specifications required by Agency shall not operate to extend the time for performance of Developer's obligations under this Agreement. Agency and Developer shall confer in good faith regarding appropriate time extensions for Agency-initiated changes. Agency's staff and Developer shall hold regular progress meetings regarding the preparation and submission of the Plans and Specifications to the City. 4.5 Construction and Development Schedule of Performance. Section 4.6 is hereby repealed and replaced in its entirety to read as follows: Construction and Development Schedule of Performance. Developer shall begin and complete all construction and development within the times specified in the Schedule of Performance or such reasonable extension of said dates as may be granted by Agency and all construction shall be complete within seven (7) years of the Effective Date of the First Amendment. In addition to extensions of time provided by express provisions of this Agreement, the Schedule of Performance may be 45635.09000\22266923.2 4 revised from time to time as mutually agreed upon in writing between Developer and Agency. From time to time during the period of construction and as reasonably requested by Agency, Developer shall report to Agency on the progress of construction. The reports shall be in such form and detail as may reasonably be required by Agency and shall include construction photographs taken since the last report. 4.6 Schedule of Performance. Exhibit “B” of the Agreement is hereby repealed and replaced in its entirety with Exhibit “1” attached to this First Amendment and incorporated herein by reference. 5. Effect on Agreement. All terms and conditions of the Agreement that are not modified by this First Amendment shall remain unmodified, in full force and effect and binding on the Parties. This First Amendment shall be enforceable and interpreted in accordance with a subject to all of the terms, provisions, conditions, covenants and agreements set forth in the Agreement, except as specifically and expressly modified in this First Amendment. 6. Conflict. In the event of a conflict between the terms and conditions of this First Amendment and the terms and conditions of the Agreement, the terms and conditions of this First Amendment shall control. 7. Counterparts. This First Amendment may be signed in counterparts (including facsimile or electronic counterparts), each of which shall be deemed an original, and all such counterparts, when taken together, shall constitute one agreement. 8. Estoppel. Agency and Developer each acknowledge and agree that, as of the date of this First Amendment, no default exists under the Agreement and no event or condition has occurred that, with the giving of notice or passage of time or both or neither, would constitute a default by either Agency or Developer under the Agreement. 9. No Intended Third-Party Beneficiaries. None of the terms or provisions of this First Amendment are intended to benefit any person or entity other than Agency or Developer. 10. Governing Law. The laws of the State of California shall govern the interpretation and enforcement of this First Amendment, without application of conflicts or choice of laws principles. 11. Interpretation. The terms, provisions, conditions, covenants, restrictions and agreements contained in this First Amendment shall not be construed in favor of or against any Party, but shall be construed as if each Party prepared this First Amendment. 12. Entire Agreement. The Agreement, as amended by this First Amendment, represents the entire understanding between the Parties as to the subject matter of the Agreement, as so amended. [Signatures on following page] 45635.09000\22266923.2 5 SIGNATURE PAGE TO FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (428-432 North San Gabriel Boulevard) The Parties have signed and entered into this First Amendment by and through the signatures of their authorized representatives, as follows: AGENCY: SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public agency, corporate and politic By: Troy Butzlaff, ICMA-CM Executive Director Attest: By: City Clerk DEVELOPER: LTA, LLC A California limited lability company By: Tim Arrietta Member By: Ben Arrietta Member APPROVED AS TO FORM: BEST BEST & KRIEGER LLP By: Agency Counsel Schedule of Performance 45635.09000\22266923.2 EXHIBIT 1 TO FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (428-432 North San Gabriel Boulevard) SCHEDULE OF PERFORMANCE Developer submits to Planning Department complete plans and specifications for Interim Landscaping to Agency for approval Completed Agency approves or disapproves plans and specifications for Interim Landscaping Completed Developer commences construction and installation of Interim Landscaping Completed Developer completes installation of Interim Landscaping on the Property Completed Developer submits complete Plans and Specifications for Development Project to Agency for review and approval Within 45 days following Effective Date of First Amendment Agency approves or disapproves Plans and Specifications for Development Project Within 14 days following submittal to the Agency by Developer Developer submits complete development application for Development Project to City; Developer obtains unconditional commitment from construction lender to finance construction and installation of Development Project on the Property Within 60 days following approval by Agency of Plans and Specifications for Development Project Developer obtains all necessary governmental approvals, permits and authorizations for the commencement of construction and installation of the Development Project on the Property Within 6 months following Effective Date of First Amendment Developer commences construction and installation of Development Project on the Property Within 9 months following Effective Date of First Amendment Developer obtains unconditional commitment from permanent lender to take out construction loan for the Development Project Within 9 months following Effective Date of First Amendment Developer completes construction and installation of the Development Project on the Property and obtains Final Certificate of Occupancy for the Development Project from the City Within 18 months following Effective Date of First Amendment *Deadline shall be extended one day for each day in excess of 14 days that the City takes to approve or disapprove the Developer’s development application for the Development Project, once such development application is deemed complete by the City. There shall be no extension of any deadline for any time period during which the Developer’s development application for the Development Project is deemed incomplete by the City. †All references to business days shall be to days on which the Agency is open to the public for its regular business hours. Unless otherwise specified as a business day, all days shall be calendar days.