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HomeMy WebLinkAboutF-2 Staff Report - CBRE Listing Agreement_975 W. Foothill Blvd_SUCCESSOR AGENCY_SUCCESSOR AGENCY ITEM F-2 TO: MEMBERS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE CTY OF AZUSA REDEVELOPMENT AGENCY VIA: SERGIO GONZALEZ, CITY MANAGER FROM: MATT MARQUEZ ECONOMIC AND COMMUNITY DEVELOPMENT DIRECTOR DATE: JULY 19, 2021 SUBJECT: REQUEST TO APPROVE AN EXCLUSIVE SALES LISTING AGREEMENT FOR 975 WEST FOOTHILL BOULEVARD WITH CBRE INC. SUMMARY: The Successor Agency to the City’s former Redevelopment Agency (“Successor Agency”) is the owner of two parcels measuring approximately 1.52 acres generally located at 975 West Foothill Boulevard (Assessor Parcel Numbers 8605-019-906 and 8605-019-907). Previously the Successor Agency entered into a Purchase and Sale Agreement with a developer for a retail/restaurant development including the option of not more than 4,000 square feet of medical use. However, the schedule of performance was not met and as a result the agreement was terminated. The Successor Agency’s primary interest is to sell the land for development consistent with the zoning code, development standards and retail gap opportunities. Previously, the Successor Agency entered into an Exclusive Sales Listing Agreement with CBRE for the subject property, however that agreement has since expired. Therefore, a new agreement with CBRE is required in order to continue working to sell and develop the property. The action proposed in this report would approve an Exclusive Sales Listing Agreement with CBRE Inc., as the listing agent. RECOMMENDATION(S): Staff recommends the Successor Agency take the following actions: 1) Approve a listing agreement with CBRE Inc., to list and market the Successor Agency’s property and negotiate an agreement/s for the sale of the property; and 2) Authorize the City Manager to execute, in a form acceptable to the City Attorney on behalf of the Successor Agency. ANALYSIS: APPROVED CITY COUNCIL 7/19/2021 Listing Agreement with CBRE Inc. May 17, 2021 Page 2 Currently the City retains CBRE for Real Estate Brokerage and Consulting services. As part of their professional services agreement they have consulted for potential real estate development of the property. A formal Listing Agreement was previously approved and signed, but has since expired. The City and Successor Agency wish to continue to work with CBRE and therefore must approve a new Listing Agreement which outlines deliverables associated with the Agreement and compensation. If the properties are sold, CBRE’s commission shall be three percent (3%) of the gross sales price. If in the event the property is sold in a “build to suit” transaction, the commission shall be calculated on the gross sales price plus the gross construction cost of the building to be constructed on the property. The proposed commission rate is further described in Exhibit A – Commission Schedule of the Listing Agreement. FISCAL IMPACT: If CBRE is successful at executing a sale transaction for both properties that constitute 975 West Foothill Boulevard, at the close of escrow the Successor Agency would profit the net proceeds after the three percent (3%) of the gross sales are paid to CBRE. If in the event the sale is in connection with a “build to suit” transaction, the Successor Agency and City would profit the net proceeds after the payment of three percent (3%) of gross sales plus the gross construction cost of the building to CBRE. Prepared by: Reviewed and Approved: Matt Marquez Talika M. Johnson Economic & Community Development Director Administrative Services Director Reviewed and Approved: Sergio Gonzalez City Manager Attachment: 1) CBRE Exclusive Sales Listing Agreement – 975 West Foothill Boulevard Rev 12/2019 CA 5 August 8, 2020 DRAFT DOCUMENT BY ELECTRONIC MAIL Mr. Sergio Gonzalez City Manager Economic & Community Development Director City of Azusa 213 East Foothill Boulevard Azusa, CA 91702 Re: Exclusive Sales Listing Agreement 975 W. Foothill Blvd, Azusa, Los Angeles County, California (“Property”) APN # 8605-019-906 and 8605-019-907 Dear Mr. Gonzalez: Thank you for selecting CBRE, Inc. (“CBRE”, “us”, “we”, “our”) to represent City of Azusa (“you”, “your”). The terms of this engagement are contained in this agreement (“Agreement”). 1.This Agreement shall terminate eight months the above date (“Term”). 2.During the Term, you appoint us as your agent with the exclusive right to list and market the Property for sale and to negotiate agreements for the sale of the Property (which includes portions thereof). If, during the Term, the Property is removed from the market because escrow is opened or an offer to purchase the Property is accepted, and if that sale is not consummated for any reason, then the Term will be extended by the longer of the number of days that (i) escrow was open or (ii) the Property was removed from the market, but in no event more than 180 calendar days in the aggregate. 3.We will commit the appropriate number of qualified and licensed professionals to this engagement. The “Listing Team” is comprised of Tim Genske, Brian Hutcherson, and Garrett Connor. We will have the right to change members of the Listing Team as necessary and appropriate. The Listing Team shall owe you duties of trust, confidence and loyalty. 4.We will offer the Property at an initial listing price of $3,300,000.00. However, it is your right to: (a) approve, modify, reject or disapprove any and all proposals and offers as well as any prospective purchasers for the Property and (b) adjust the terms and conditions of any offer made, including but not limited to, adjusting the Property’s listing price 5.We will work with you to create and implement a sales strategy for the property that will include an overview of all opportunities for the site explaining what type of tenant we will pursue and why for the Property, including preparation of appropriate and customary marketing materials (such as an offering brochure). In developing the strategy, we will rely on (without requirement to verify) any information provided to us by you, your agents, affiliates and/or any of the Property’s managers. However, we will not issue any written marketing materials without your prior written approval. Further, you authorize us to place one or more signs on the Property as we deem appropriate. Attachment 1 Rev 12/2019 CA 5 6. The success of this engagement relies, in part, on cooperation and communication between you and CBRE. Therefore, you agree to: (i) provide us with all available information to assist us in marketing the Property; (ii) immediately refer to us all purchase inquiries for the Property; and (iii) conduct all negotiations with prospective purchasers exclusively through us. 7. You represent that you either are the fee owner of or otherwise have control over the Property. You further represent that you have full authority to enter into this Agreement without violating anyone else’s rights, or any other agreements or contractual obligations. 8. We will present all offers to you and assist you in developing and negotiating counteroffers until a purchase and sale agreement (“PSA”) is signed and all contingencies are satisfied or waived. You agree that you and/or your legal counsel are solely responsible for determining the legal sufficiency of any documents to be executed by you in any transaction contemplated by this engagement as well as the tax consequences of any such transaction. You are also responsible for evaluating any offers and determining with whom you will negotiate or enter into a transaction. While we may assist you in gathering reasonably available information, we cannot represent or warrant the creditworthiness of any prospect and/or their ability to satisfy their obligations under a PSA. All final business and legal decisions shall be made solely by you. Notwithstanding any designation of us as “agent” in this Agreement, we will have no right, power, or authority to enter into any agreement with any prospective purchaser, real estate broker, or any other person in the name of, on behalf of, or otherwise binding upon you. 9. We will earn, and you agree to pay us, a commission in accordance with this Agreement and the attached Exhibit A to this Agreement (“Commission Schedule”) if either of the following occur: (a) during the Term, you enter into an agreement to sell the Property to a purchaser, whether procured by us, you or anyone else and the sale closes during or any time after the Term; or (b) within one hundred twenty (120) days after the expiration of the Term or after the Agreement otherwise terminates (the “Post-Term”), the Property is sold to, or negotiations continue, resume or commence leading to a sale of the Property at any time during the Post Term or thereafter to any person or entity (including his/her/its successors, assigns or affiliates) with whom, during the Term, CBRE either negotiated (either directly or through another broker or agent) or to whom the Property was submitted during the Term (“Existing Prospect”). You agree that CBRE is authorized to continue negotiations with Existing Prospects. We will submit to you a list of such Existing Prospects no later than fifteen (15) business days following the expiration or termination of the Term; provided, however, that if a written offer has been submitted prior to said expiration or termination date, then it shall not be necessary to include the offeror’s name on the list. Rev 12/2019 CA 5 10. (a) The Listing Team are your agents to the exclusion of all of CBRE’s other licensees. All other CBRE licensees shall be referred to as “Non-Listing Team Agents” and shall be considered Cooperating Brokers. You acknowledge that CBRE is an international brokerage firm and that it may represent prospective purchasers, thereby creating a dual agency. You hereby consent to our representation of such prospects. You acknowledge that Non-Listing Team Agents owe duties of trust, confidence and loyalty exclusively to their clients. In the event that CBRE has a potential conflict of interest (such as CBRE proposing to act as a dual agent), then we will disclose the conflict to you and obtain your written consent to the conflict in advance of any negotiations with a potential purchaser. The Listing Team and Non-Listing Team Agents shall not disclose the confidential information of one principal to the other. (b) You also acknowledge that CBRE and its affiliates provide a wide range of real estate services and certain CBRE affiliates (including employees), may: (a) assist with the sale of the Property; (b) represent clients who have competing interests in such transaction(s), including assisting prospective purchasers with the financing or valuation of the Property, and (c) pay and/or receive referral fees and other compensation relating to the foregoing, including to and from CBRE. 11. Questions regarding environmental and zoning issues may arise during the course of our representation. CBRE is not obligated to perform and has not made any investigation of the physical conditions or zoning issues relating to the Property. You agree to disclose to us and allow us to disclose to prospective purchasers everything you know (after reasonable inquiry by you) regarding present and future property issues including, but not limited to, structural, mechanical, hazardous materials, zoning and environmental matters affecting the Property and/or the Property’s condition. 12 (a) CBRE shall be responsible for all injuries to persons and for all damage to real or personal property of City or third parties, to the extent caused by or resulting from CBRE's negligence, or that of its employees, agents, or subconsultants during the performance of or connected with the rendition of services hereunder. 12 (b)To the fullest extent permitted by law, CBRE shall defend, indemnify and hold harmless the City, its officials, officers, employees, volunteers and agents (each, an “Indemnified Party”) from any and all liability, claims, costs (including reasonable attorneys' fees), demands, damages, expenses, and causes of action: (i) for damages to real or personal property, or personal injury to any third party to the extent resulting from the negligent error, act or omission of CBRE, its employees, or its agents; or (ii) to the extent of any breach of CBRE's obligations, duties or covenants under this Agreement or transactions related to CBRE's performance hereunder; or (iii) to the extent arising out of any actual conflict of interest of CBRE and/or the failure to disclose any actual conflict of interest of CBRE. Rev 12/2019 CA 5 12(c) CBRE’s obligations under this Section apply regardless of whether or not a liability is caused or contributed to by the negligence or other act or omission of an Indemnified Party. However, to the extent that liability is caused by the negligence or willful misconduct of an Indemnified Party, CBRE’s indemnification obligation shall be reduced in proportion to the Indemnified Party’s share of liability for its negligence or willful misconduct, if any. 13. You and CBRE agree to comply with all applicable laws, regulations, codes, ordinances and administrative orders governing each party’s respective participation in any transaction contemplated by this Agreement. Further, we both acknowledge that: (a) it is illegal to refuse to display or lease or sell to or from any person because of one’s membership in a protected class, e.g.: race, color, religion, national origin, sex, ancestry, age, marital status, that the person signing this Agreement on your behalf has your full authority to execute it. This Agreement will be binding whether signatures are exchanged electronically or by hand, mail, fax, electronic transfer or image, photocopy or in counterparts. Thank you again for this opportunity. We look forward to working with you. Very truly yours, CBRE, Inc. Licensed Real Estate Broker By: Name: Chalvis Evans, Lic. 01318400 Title: Managing Director By: Name: Timothy Genske, Lic. 01034790 Title: Senior Vice President By: Name: Brian Hutcherson, Lic. 02075144 Title: Western Regional Manager AGREED: City of Azusa By: Name: Sergio Gonzalez Title: City Manager 8/26/2020 Rev 12/2019 CA 5 EXHIBIT A – Commission Schedule A. Sale. If the Property is sold, CBRE’s commission shall be three (3%) of the gross sales price. Gross sales price shall include any and all consideration received or receivable, in whatever form, including but not limited to assumption or release of existing liabilities. In the event this sale is in connection with a “build to suit” transaction, the commission shall be calculated on the gross sales price plus the gross construction cost of the building to be constructed on the Property. The commission shall be earned and paid on the date title to the Property is transferred to the purchaser; provided, however, that if the transaction involves an installment contract, then payment shall be made upon execution of such contract If you are a partnership, corporation, or other business entity, and an interest in the partnership, corporation or other business entity is transferred, whether by merger, outright purchase or otherwise, in lieu of a sale of the Property, and applicable law does not prohibit the payment of a commission in connection with such sale or transfer, the commission shall be calculated on the fair market value of the Property, rather than the gross sales price, multiplied by the percentage of interest so transferred, and shall be paid at the time of the transfer. 1. Definitions. Under this Agreement the terms “sell,” “sale” or “sold” shall mean: (a) an exchange of the Property; (b) the granting of an option to purchase the Property; or (c) any other transfer, conveyance or contribution of a controlling interest in the Property or in the entity which owns the Property, including, but not limited to, situations where you are a corporation, partnership or other business entity and a controlling interest in such corporation, partnership or other business entity is transferred, whether by merger, outright purchase or otherwise, in lieu of a sale of the Property. 2. Option to Purchase. If you grant an option to purchase the Property, you agree to pay us a commission in accordance with this Commission Schedule, on the price paid for the option and for any extensions when you receive payment for any such option and/or extensions. If the option is exercised, whether during the Term or after, we will earn a further commission in accordance with this Agreement. Notwithstanding the foregoing, to the extent that all or part of the price paid for the option or any extension thereof is applied to the sales price of the Property, then any commission previously paid by you to us on account of the option payments will be credited against the commission payable to us on account of the exercise of the option.