Loading...
HomeMy WebLinkAboutD-3 Staff Report - Block 37 MW Investments ENA45635.01857\32320290.2 SCHEDULED ITEM D-3 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY VIA: SERGIO GONZALEZ, CITY MANAGER FROM: MATT MARQUEZ, ECONOMIC AND COMMUNITY DEVELOPMENT DIRECTOR DATE: SEPTEMBER 16, 2019 SUBJECT: CONSIDERATION OF AN EXCLUSIVE NEGOTIATING AGREEMENT WITH MW INVESTMENT GROUP, LLC. FOR A HOTEL DEVELOPMENT AT 600-622 NORTH SAN GABRIEL AVENUE, (APNs: 8611-004-902, 903, 904, 905, 906, 907, 912, 913) AND 624-630 NORTH SAN GABRIEL AVENUE (APN 8611-004-914) SUMMARY The City of Azusa is the owner of several parcels of land located along North San Gabriel Avenue, just south of West Foothill Boulevard. The Successor Agency to the former Redevelopment Agency is also the owner of one parcel situated along the same block. The City received a proposal from MW Investment Group, LLC to develop the subject site as a hotel with requisite parking. After reviewing the proposal, staff is recommending that the City Council enter into an Exclusive Negotiating Agreement (“ENA”) with MW Investment Group, LLC. to allow the parties to establish the negotiating parameters, terms and conditions for the development. This action would approve an ENA for a period of one hundred and eighty days (180) days with the ability to extend the term, administratively, for two additional ninety (90) day periods if needed. The subject properties are shown on the map below: APPROVED CITY COUNCIL 9/16/19 45635.01857\32320290.2 DISCUSSION There are nine (9) parcels in total that make up the project site. The City owns eight (8), and the Successor Agency owns one (1) parcel. The total area of the parcels measures approximately 1.29 acres. The site is located within the boundaries of the City’s TOD Specific Plan, which presents a district-based zoning approach to accommodate future growth and development intensity adjacent to Azusa’s two Gold Line Transit stations. Each district has a unique vision and a tailored range of allowable uses and development standards that support the desired future condition. The subject site is located within the Plan’s Downtown Expansion District and is labeled as an opportunity site therein. These and other adjacent properties along North San Gabriel Avenue provide opportunities for new types of development that will encourage additional investment throughout the City’s downtown. To enable the parties to better define the scope of the project and to negotiate the sale of the parcels, an ENA has been drafted and a copy is attached to this staff report. The proposed ENA provides a process for the parties to negotiate a possible disposition and development agreement (DDA) for the potential conveyance to and development of the City parcels. Although the Successor Agency owned parcel is mentioned in the ENA, the Successor Agency is not a party to the ENA. As the Successor Agency is Project Site Successor Agency Owned City Owned 45635.01857\32320290.2 prohibited from doing redevelopment, the Successor Agency parcel would be sold separately pursuant to a standalone purchase and sale agreement. It should be noted that the ENA does not commit the City or Successor Agency to such conveyance or development, nor does it commit MW Investment Group, LLC to develop the project. The ENA only commits the parties to negotiate in good faith to attempt to reach an agreement over the next 180 days. As mentioned earlier in this report, the ENA can be extended, administratively, for two additional 90 day periods. The general terms of the ENA are as follows: General ENA Terms • This Agreement shall continue in effect for the period of one hundred eighty (180) consecutive calendar days. • The Negotiation Period may be extended upon the mutual written agreement of the City Manager and the Developer for no more than two (2) additional consecutive ninety (90) calendar day periods. • Terms of any potential Disposition and Development Agreement between the City and MW Investment Group, LLC. for the development of the project are to be negotiated during the exclusive negotiating period. • MW Investment Group, LLC is required to provide a $25,000 deposit which will be used to reimburse the City for certain costs related to the ENA and the evaluation of the development of the project. Any funds remaining at the termination of the Agreement will either be returned to the Developer or applied toward the purchase price of the property at the Developer’s discretion. • During the first sixty (60) days of the Negotiation Period Developer may conduct Due Diligence Investigations at its sole cost and expense. Staff believes it would be appropriate for the City Council to approve the proposed ENA with MW Investment Group, LLC. to provide both parties the necessary time to prepare additional information about the proposed project, including a more detailed site plan, fiscal impact analysis and financing plan. This information will help determine the viability and economic benefits of the project so the City Council can decide whether to enter into a Disposition and Development Agreement for the site. Ultimately, a project such as the type contemplated in the subject ENA would serve to implement the goals and objectives of both the City’s TOD Specific Plan and General Plan. RECOMMENDATION Staff recommends that the City Council take the following actions: 1) Approve an Exclusive Negotiating Agreement (“ENA”) with MW Investment Group, LLC. which allows for a period of exclusive negotiations between the City and MW Investment Group, LLC. for the purpose of preparing major elements of the proposed development including, but not limited to: a site plan; design schematics; technical, and economic studies; and, the pre- development obligations of all parties. 2) Authorize the Mayor to execute the ENA, in a form acceptable to the City Attorney, on behalf of the City. 45635.01857\32320290.2 FISCAL IMPACT There is no fiscal impact associated with the subject item. Prepared by: Reviewed by: Matt Marquez Marco A. Martinez Economic and Community Development Director City Attorney Reviewed and Approved: Sergio Gonzalez City Manager Attachments: 1) Draft ENA 1 45635.01857\32137582.8 THE CITY OF AZUSA EXCLUSIVE NEGOTIATION AGREEMENT (600-624 N. San Gabriel Avenue) THIS EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is dated , 2019, for reference purposes only, and is entered into by and between the CITY OF AZUSA, a California municipal corporation located in the County of Los Angeles ("City"), and MW INVESTMENT GROUP, LLC, a California Limited Liability Company ("Developer"), to provide a specified period of time to attempt to negotiate a disposition and development agreement. 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 WHEREAS, the City owns certain real property generally located at 600-622 N. San Gabriel Avenue in the City of Azusa, California, County of Los Angeles, (APNs: 8611-004-902, 903, 904, 905, 906, 907, 912, 913) and more specifically described in the legal description attached to this Agreement as Exhibit "A" ("City Property") and incorporated into this Agreement by this reference; and WHEREAS, the Successor Agency to the Azusa Redevelopment Agency owns certain real property generally located at 624-630 N. San Gabriel Avenue in the City of Azusa, California (APN 8611-004-914) and more specifically described in the legal description attached to this Agreement as Exhibit A-1 (“SA Property”) and incorporated into this Agreement by this reference; and WHEREAS, the City Property and SA Property are collectively referred to as the "Property"; WHEREAS, the Developer has proposed to develop the Property as an all-suites room Hotel of a quality type and brand like a TownePlace Suites by Marriott International, as generally described on Exhibit "B" and incorporated into this Agreement by this reference ("Project"); and WHEREAS, the intent of both the City and the Developer in entering into this Agreement is to establish a specific and limited period of time to negotiate regarding a future agreement between them governing the potential acquisition of the City Property by Developer and development of the Project by Developer on the Property, all subject to mutually agreeable terms, conditions, covenants, restrictions and agreements to be negotiated and documented a future disposition and development agreement ("DDA"); and WHEREAS, the City and Developer have agreed upon a timeline with specific milestones for conducting these negotiations and preparation of a DDA, which is attached to this Agreement as Exhibit "C" and incorporated into this Agreement by this reference ("Timeline"); and Attachment 1 EXHIBIT "B" TO NEGOTIATION AGREEMENT Project Description   The proposed project (to be further refined as part of the related land use entitlement process) will consist of the following: (i) up to Five (5)-story hotel accommodating a range of 80 to 100 guestrooms, (ii) hotel shall contain a variety of amenities including but not limited to: a public lounge area, business center and support amenities and services including meeting room, state of the art fitness center, and a 24/7 pantry/sundry shop, and (iii) hotel shall provide a brand that will reflect a widely recognized upper-midscale chain flag and offer a national reservation system similar to a TownePlace Suites by Marriott.