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HomeMy WebLinkAbout _ 4.2(c)--Authorize City Manager or Designee to Execute ENA GI �" Y � F � � � ° � � � " � � CITY OF REDDING REPORT TO THE CITY COUNCIL MEETING DATE: May 2, 2023 FROM: Steve Bade, Assistant City ITEM NO. 4.2(c) Manager ***APPROVED BY*** � . ��� ��n.w� .� s.N,.�� �, ����� t�ue a e; ss � �r 4f?�12023 ry ip}�in,Ci ana � 4r'27(2423 sbade@cityofredding.org btippin@cityofredding.org SUBJECT: 4.2(c)--A�uthorize City Manager or designee to execute Excl�usive Negotiating Agreement Recommendation Authorize and approve the following actions: (1) Authorize the City Manager, or designee, to execute an Exclusive Negotiating Agreement with Dawson Homes to prepare a Disposition and Development Agreement for the potential disposition of City of Redding-owned property located at 1313 Rose Lane and preparation of a disposition and development agreement to facilitate the potential mixed development of residential units on said property; and (2) Find that the project is categorically exempt from the California Environmental Quality Act pursuant to Section 15301 through 15333 based on the following categorical exemptions: feasibility and planning studies and surplus government property sales. Fiscal Impact Any funds realized from the sale of the 1313 Rose Lane Property (Property) would be deposited into the Low-Moderate Income Housing Asset Fund to be utilized for income-eligible activities or housing projects. Alternative Action Should the City Council (Council) wish to modify the Exclusive Negotiating Agreement (Agreement), any such modifications would require approval of Dawson Homes. Should the Council decide not to authorize the Agreement, the property will be marketed to another developer. Background/Analysis At its March 4, 2008, meeting, the Couneil adopted a resolution declaring the property surplus. Pursuant to State law, the property was made available for sale or lease for affordable housing purposes prior to the City of Redding's (City) disposition. As such, in 2008, the former Redding Redevelopment Agency(RRA)purchased the City-owned property. Report to Redding City Council Apri127, 2023 Re: 4.2(c)--Authorize City Manager or Designee to Execute ENA Page 2 On February 1, 2012, the RRA was dissolved pursuant to Health and Safety Code Sections 34161-34166 and the Council elected for the City to serve as the Successor Housing Agency to the former RRA pursuant to Resolution 2012-0007. A11 former RR.A housing property assets were transferred to the City. On June l, 2021, the Council once again determined the subject property to be surplus via Resolution 2021-061, and pursuant to the Surplus Land Act, has been cleared for disposition by the California Department of Housing and Community Development. On January 3, 2023, staff received a letter of interest from Dawson Homes regarding the property. Dawson I�omes is under the sole ownership of Sam Dawson, a licensed general contractor and Division President for a 1oca1 array of lumber and building supply companies. Many developers have expressed interested in the property over the years, but to date, Dawson Homes is the only prospective purchaser that has shown a bona fide interest in the property by providing a written request to that effect with an accompanying deposit of$1,000. The subject property is north of, and adjacent to, Fire Hall No. 8, surrounded by single family residences on the north, east, and west. An Alzheimer's care center is located south of the fire station. The parcel is unimproved and is designated Residential 10 to 20 dwelling units per acre under the City's General Plan. The property is level, located on an arterial, and has a11 public utilities available, making it an ideal site for an income-qualifying housing development. A map depicting the location of the property is incl�uded within the attached agreement. Should the Council approve the execution of the agreement, Dawson Homes will complete its due diligence, including obtaining an appraisal of the property, analyzing potential design and use, and compiling a budget proforma and performance schedule for the eventual development of income-eligible housing. Staff, in anticipation of the developer's acquisition of the property, will create a disposition and development agreement (DDA) that will detail the acquisition, design, development, construction and marketing of any resulting project. The DDA, once drafted, will come back to the Council for review and approval at a fut�ure date. Environmental Review The project is categorically exempt from review under the California Environmental Quality Act Guidelines Section 15312 (Surplus Government Property Sales) and no further actions are reguired at this time. Any future development on the property, along with the DDA, will be analyzed separately for its environmental impact. Council Pr�iority/City Manager Goals � Government of the 21st Century — `Be relevant and proactive to the opportunities and challenges of today's residents and workforce. Anticipate the future to make better decisions today." � Communication Goal — "Improve the quality and quantity of communication with the public and City employees to enhance knowledge and increase transparency to improve public trust." • Economic Development Goal — "Facilitate and become a catalyst for economic development in Redding to create jobs, retain current businesses and attract new ones, and encourage investment in the community." Report to Redding City Council Apri127, 2023 Re: 4.2(c)--Authorize City Manager or Designee to Execute ENA Page 3 Attachments Exclusive Negotiating Agreement EXCLUSIVE NEGOTIATING AGREEMENT [1313 Rose Lane ,Redding,CA 96003 (Property)] This Exclusive Negotiating Agreement(Agreement)is made by and between the City of Redding,a municipal corporation and general law city ("City")serving as the SuccessorHousing Agency to the Redding Redevelopment Agency and Dawson Homes, a California sole proprietorship ("Developer"). RECITALS A. On February l, 2012, the Redding Redevelopment Agency (RRA) was dissolved pursuant to Health and Safety Code Sections 34161 —34166. B. The City elected to serve as the Successor Housing Agency for the former RRA. C. RRA real property housing assets were transferred to the City and subsequently approved by the State Department of Finance in August 2012. D. On January l, 2020, updates to legislation known as the Surplus Property Act (assembly Bill 1486)were enacted by the State of California,redirecting the process by which cities dispose of public land. E. On June 1,2021,the Property,pursuant to Resolution 2021-061 was declared surplus property and is depicted on the map attached and incorporated herein as Exhibit A (the "Property"). F. Pursuant to Government Code 54222, no notice has been received by a qualified purchaser electing to purchase or lease the property. G. City has identified Developer as an entity with which the City may negotiate exclusively for a Disposition and Development Agreement(DDA) pertaining to the Property. H. City and Developer desire to provide for those exclusive negotiations and for completion of certain tasks during the term of this Agreement and prior to an execution of a DDA. THEREFORE, for good and valuable consideration,the receipt of which is hereby acknowledged by the parties, City and Developer agree as follows: SECTION l. SCOPE OF WORK - FEASISILITY ACTIVITIES. A. During the term of this Agreement, Developer shall analyze the residential housing market and prepare a project description that includes conceptual plans, preliminary budget, proforma, and a performance schedule with sufficient detail to submit to the City for conceptual review and approval. At the end of the term, the Developer will submit, in writing, a notification to proceed or not to B. During the term of this Agreement, Developer may compile plans and other inf'ormation needed to complete the development of the Property other than a building permit, including necessary enviromnental review. All plans and other information shall be consistent with the scope of development described in Section 1 .C. below unless the City approves a variation from that scope. C. City and Developer contemplate that the development of the Property specified in the DDA will involve the acquisition, design, development, construction, and marketing of a residential housing project including affordable and market-i•ate residential units on the Property. Given the property is a former RRA Property, the minimum affordability for a multifamily project is 55 years and 45 years for single-family development. D. Should City and Developerultimately agree to and enter into a DDA, City intends to convey fee title to the Property subject to the terms of the DDA. Further, City intends to provide assistance to facilitate the development of housing that is affordable to low-or moderate-income persons should it be determined by City that such assistance is required to enable development of such housing and available for such purpose. E. City shall make the Property available to Developer for all Developer investigations pertaining to this Section 1. SECTION 2. NEGOTIATIONS -RESERVATIONS. A. City and Developer shall negotiate in good faith toward a DDA for the Property. B. During the term of this Agreement,the City shall not negotiate with any other person or entity for disposition and development of the Property. C. Notwithstanding Section 2.A.and 2.B.,this Agreement does not obligate the City or the Developer to enter into a DDA or any other contractual obligation,or enter into a DDA on any particular tenns. D. Furthermore, this Agreement does not obligate the City to approve any particular project. Developer acknowledges and agrees that the City maintains their discretion to approve or deny any particular project. SECTION 3. DEPOSIT. A. Upon execution of this Agreement,the Developer will pay the sum of One Thousand Dollars($1,000.00)to the City of which will be used as a deposit against City fees for application processing contemplated under Section 1.B. above, including initiation of the environmental review,and for other related tasks the City undertakes pursuant to this Agreement including, but not limited to, review by outside legal counsel, financial analyst, or other consulting professionals. The Deposit shall not be construed as consideration paid to the City, but is held by the City in trust for the Exclusive Negotiating Agreement Dawson Homes Page 2 of 6 benefit of Developer. B. If this Agreement is terminated or the end of the term is reached without the City and Developer entering into a DDA, then the City shall promptly return to Developer the remaining balance. C. If the City and Developer do enter into a DDA prior to the end of the term of this Agreement,then the remaining balance,if any,shall become a deposit pursuant to the DDA and shall be disposed of in the manner agreed between the City and Developer in the DDA. SECTION 4. TERM AND TERMINATION. A. The term ofthis Agreement shall be twelve (12)months from the Effective Date of this Agreement unless terminated earlier pursuant to this Section. B. Either party may terminate this Agreement without cause upon 30 days written notice. C_ This Agreement terminates immediately should the Developer choose to execute a Purchase and Sales Agreement wherein the Fair Market Value(FMV)of the Property is paid in full,without seller carryback financing. Purchasing the property for FMV, without seller carryback financing eliminates the need for the Developer to comply with Section 1.C. of this Agreement. SECTION 5. INDEMNITY. Developer hereby agrees to protect, defend, indemnify and hold harmless, City,its officers, elected or appointed offtcials,employees,agents and volunteers from and against any and all claims,damages,losses,expenses,judgments,demands,penalties,fines,defense costs,and consequential damage or liability of any kind or nature,however caused,arising directly or indirectly out of the obligations or operations herein undertaken by Developer, caused in whole or in part by any act or omission of the Developer, any contractor or subcontractors, any person directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, including but not limited to concurrent active or passive negligence, except where caused by the active negligence, sole negligence or willful misconduct of the City. Developer will conduct all defense at its sole cost and expense and City shall have right to approve or disapprove legal counsel retained to defend City. The City shall be reimbursed for all costs and attorney's fees incurred in enforcing this obligation. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by Developer. SECTION 6. MISCELLANEOUS PROVISIONS. A. This Agreement supersedes all previous agreements relating to the subject of this Agreement and constitutes the entire understanding of the parties hereto. Developer Exclusive Negotiating Agreement Dawson Homes Page 3 of 6 shall be entitled to no other benefits other than those specified herein. Developer specifically acknowledges that in entering into and executing this Agreement, Developer relies solely upon the provisions contained in this Agreement and no others. No changes, amendments or alterations shall be effective unless in writing and signed by both parties. B. Inasmuch as this Agreement is intended to secure the specialized services of Developer, Developer may not assign,transfer,delegate or sublet any interest herein without the prior written consent of City. Waiver by City of any breach of any requirement of this Agreement shall not be deemed to be a waiver of any other breach. C. Developer shall be construed to be an independent contractor and nothing in this Agreement is intended nor shall be constiued to create an employer-employee relationship, a joint venture relationship, or to allow City to exercise discretion or control over the professional manner in which Developer performs the services which are the subject matter of this Agreement;provided,however,that the services to be provided by Developer shall be provided in a manner consistent with the professional standards applicable to such services. The sole interest of City is to ensure that services shall be rendered and performed in a competent, efficient and satisfactory manner. Developer shall be fully responsible for payment of all taxes due to the State of Califor•nia or the federal government which would be withheld from compensation if Developer were a City or City employee.City shall not be liable for deductions for any amount for anypurpose from Developer's compensation. Developer shallnot be eligible for coverage under City's workers' compensation insurance plan nor shall Developer be eligible for any other City or City benefit. D. Developer will observe and comply with all applicable federal, state and local laws, ordinances and codes which relate to the services to be provided pursuant to this Agreement. Developer will not discriminate in employment practices or in the delivery of services on the basis of race, color, creed, national origin, sex, age, marital status, sexual orientation, medical condition (including cancer, HN and AI�S),physical or mental disability, or use of family care leave. E. If any portion of this Agreement or application thereof to any person or circumstance is declared invalid by a court of competent jurisdiction or if it is found in contravention of any federal or state statute or regulation or ordinance,the remaining provisions of this Agreement, or the application thereof, shall not be invalidated thereby and shall remain in full force and effect to the extent that the provisions of this Agreement are severable. F. In the event of a dispute between the parties hereto over the meaning of this Agreement, no party shall be deemed to have been the drafter hereof, and the principle of law set forth in Civil Code 1654 that contracts are constructed against the drafter shall not apply. G. This Agreement shall be deemed to have been entered into in Redding,California;all questions of the validity, interpretation or performance of any of its terms or of any Exclusive Negotiating Agreement Dawson Homes Page 4 of 6 rights or obligations of the parties to this Agreement shall be governed by California law; and any action brought by either party to enforce any of the terms of this Agreement shall be filed in the Shasta County Superior Court. H. Sections 5., 6.C., 6.E., 6.G., and 6.H. of this Agreement shall survive completion, expiration or termination of the Agreement and/or any Task Order separately completed, expired or terminated. I. The Effective Date of this Agreement shall be the date it is signed by City Il. Terms associated with this Ageement: a. Purchase price to be determined by appraisal, to be sourced and provided by Developer. Should the City disagree with the results of the appraisal, the City retains the right to obtain its own appraisal and commence with negotiation in regard to the FMV of the Property. b. Financing for the Property may be through a City of Redding as negotiated within a DDA_ c. Should the Property not be utilized for the production of income-eligible residential units through a negotiated DDA,this Agreement is null and void after 12 months as stipulated under Section 4. SECTION 7. NOTICES. A. Any notice required to be given pursuant to the terms and provisions of this Agreement shall be in writing and shall be sent first-class mail to the following persons and addresses: If to City: If to Developer: City of Redding Dawson Homes Attention: City Manager Attention: Sam Dawson P.O. Box 496071 PO Box 493855 Redding, CA 96049-6071 Redding Ca, 96049 B. Notice shall be deemed to be effective two days after mailing. THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK. I.N WITNESS WHEREOF, City and Developer have executed this Agreement on the dates set Exclusive Negotiating Agreement Dawson Homes Page 5 of 6 forth below. The Effective Date of this Agreement shall be the date it is signed by City. CITY QF REDDING, a California Municipal Corporation City Date: Barry Tippin, City Manager ATTEST: APPROVED AS TO FORM; Barry DetiValt,City Attonrey Pam Mi7e,City Clerk D+a o omes, a sole proprietorship � t �:�. 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