Cynthia W. Johnston, Housing and Redevelopment Director

Transcription

1 Agenda Item No. 6C May 24, 2011 TO: FROM: SUBJECT: Honorable Chairman and Redevelopment Agency Members Attention: Laura C. Kuhn, Executive Director Cynthia W. Johnston, Housing and Redevelopment Director RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF VACAVILLE TERMINATING THE DISPOSITION AND DEVELOPMENT AGREEMENT FOR APN(S) AND -940 BETWEEN THE REDEVELOPMENT AGENCY AND BETHANY LUTHERAN CHURCH AND REPLACING A PURCHASE OPTION AGREEMENT WITH A FIRST RIGHT OF REFUSAL FOR APN DISCUSSION: Bethany Lutheran Church (Bethany) entered into a Disposition and Development Agreement (DDA) with the Agency in January 2005 to purchase two parcels (6.17 acres) for fair market value on the corner of Harbison and Ulatis Drive to construct a private school and related improvements. The Agency loaned Bethany $400,000 toward the acquisition of the property, which Bethany has since paid in full. The DDA was amended in 2008 to replace the Right of Reverter with a Purchase Option Agreement to acquire Parcel 2 (see Site Map Attachment A) and to extend the deadline to 2014 for Bethany to pull permits for the remaining improvements required by the DDA. In 2009, an amendment to the Purchase Option Agreement was made to modify the legal description for Parcel 2. Additionally in 2009, an Amended and Restated Memorandum of the First Amendment to the DDA was recorded to terminate the original 2005 DDA and to affirm the amended DDA from 2008 as the effective agreement. Under the terms of the DDA, classrooms and athletic fields would be constructed on Parcel 1 (Phase I) and a multi-purpose building would be constructed on Parcel 2 (Phase II). Phase I was completed in June Construction of the multi-purpose building on Parcel 2 must begin on or before April 15, In addition, if Bethany were to default on any terms of the DDA, the Agency could exercise its rights under the Purchase Option Agreement to acquire Parcel 2. Due to current and projected financial hardship induced by flat enrollment numbers and rising operational costs, Bethany requested the Agency either extend the DDA for a period of 10 years or terminate the remaining requirements of the DDA (Phase II) (see Bethany Board Letter Attachment B). In lieu of extending the DDA, staff recommends terminating the DDA based on the following: The on-going economic downturn affects the accurate projection for completion of the Phase II improvements; The original property transaction was a Fair Market Value purchase; Bethany is in substantial compliance with the DDA; and Phase I site improvements (develop a private school and athletic fields) have been completed satisfying the intent of the DDA. As a show of commitment to the original plan for the overall project (including a multi-purpose building on Parcel 2), Bethany agrees to provide the Agency with a First Right of Refusal to acquire Parcel 2 at the then current fair market value should Bethany decide to sell the property at some future date.

2 Attached are final drafts of the Termination Agreement (Attachment C) and the First Right of Refusal Agreement (Attachment D). On May 18, 2011, the Housing and Redevelopment Commission will be hearing this item. FISCAL IMPACT: No General Fund Impact. Staff costs associated with the transaction will be paid with Redevelopment funds. RECOMMENDATION: By simple motion, that the Redevelopment Agency adopt the subject resolution and approve termination of the DDA between the Redevelopment Agency and Bethany Lutheran Church, approve the First Right of Refusal Agreement between the Redevelopment Agency and Bethany Lutheran Church and authorize the Executive Director, or her designee, to execute all documents necessary to complete the approved actions. Attachments: A. Site Map B. Letter from Bethany Board dated April 4, 2011 C. Termination Agreement D. First Right of Refusal Agreement

3 RESOLUTION NO. RD RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF VACAVILLE TERMINATING THE DISPOSITION AND DEVELOPMENT AGREEMENT FOR APN(S) AND -940 BETWEEN THE REDEVELOPMENT AGENCY AND BETHANY LUTHERAN CHURCH AND REPLACING A PURCHASE OPTION AGREEMENT WITH A FIRST RIGHT OF REFUSAL FOR APN WHEREAS, the Vacaville Redevelopment Agency (Agency) entered into a Disposition and Development Agreement in 2005, entered into a First Amendment to the DDA in 2008, entered into a Purchase Option Agreement in 2008, entered into an Amended and Restated Memorandum of First Amendment to the DDA in 2009, and entered into a First Amendment to the Purchase Option Agreement in 2009, collectively referred to as the DDA and Purchase Option Agreement with Bethany Lutheran Church; and WHEREAS, the purpose of these agreements was to sell two parcels (APN s and -940) totaling 6.17 acres in size for fair market value to Bethany Lutheran Church for the purpose of constructing a private school, associated improvements, and provide an acquisition loan in the amount of $400,000 within the city limits of Vacaville; and WHEREAS, Bethany Lutheran Church has constructed a private school and athletic fields on APN the Agency issued a Certificate of Completion for these improvements in June 2008, and Bethany repaid the $400,000 acquisition loan to the Agency; and WHEREAS, conditions remain within the DDA for the construction of a multi-purpose building on APN ; and WHEREAS, the Agency and Bethany Lutheran Church have determined it to be infeasible to complete the remaining conditions on APN due to flat enrollment numbers, increased operational costs, a significant downward trend in private school enrollment, and inability to commence fundraising for the project for the foreseeable future; and WHEREAS, Bethany Lutheran Church is in substantial compliance with the DDA as all parcel 1 (Phase I) site improvements (develop a private school and athletic fields) have been completed satisfying the intent of the DDA; and WHEREAS, the Agency will ensure the long-term use of this site by entering into a First Right of Refusal with Bethany to acquire APN for the then current fair market value should Bethany sell the property in the future. NOW, THEREFORE, BE IT RESOLVED, that the Redevelopment Agency of the City of Vacaville does hereby adopt the Resolution to approve the termination of the agreements collectively referred to as the DDA and Purchase Option Agreement above, and authorizes the Executive Director or her designee to execute all documents necessary to complete the termination and enter into a First Right of Refusal to acquire APN for the then current fair market value.

4 I HEREBY CERTIFY that the foregoing resolution was introduced and passed at a noticed joint meeting of the City Council and the Redevelopment Agency of the City of Vacaville held on the 24th day of May, 2011, by the following vote: AYES: NOES: ABSENT: ATTEST: Michelle A. Thornbrugh, Recording Secretary

5 Attachment A

6 Attachment B

7 Attachment B

8 Attachment B

9 Attachment B

10 Attachment C RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Vacaville Redevelopment Agency 40 Eldridge Avenue, Suite 7 Vacaville, CA Attn: Executive Director No fee document pursuant to Government Code Section (SPACE ABOVE THIS LINE FOR RECORDER'S USE) TERMINATION AND RELEASE OF AGENCY DOCUMENTS (Bethany Lutheran Church, Vacaville, California) THIS TERMINATION AND RELEASE OF AGENCY DOCUMENTS (the "Release") is entered into as of, 2011, by and between the Vacaville Redevelopment Agency, a public body, corporate and politic (the "Agency"), and Bethany Lutheran Church, Vacaville, California, a California nonprofit corporation (the "Owner"), with reference to the following facts: RECITALS A. The Owner is the owner of certain real property located in the City of Vacaville, County of Solano, State of California, as more particularly described in Exhibit A (the "Property"). B. The Owner acquired the Property from the Agency pursuant to that certain grant deed dated as of August 1, 2005, and recorded in the official records of the County of Solano (the "Official Records") on August 9, 2005, as document number # (the "Grant Deed"). The Property is subject to that certain Disposition and Development Agreement, as amended by that certain First Amendment to Disposition and Development Agreement dated as of November 3, 2008 (collectively, the "DDA"). To evidence the obligations imposed on the Owner regarding the development of the Property, the Agency and the Owner entered into that certain Memorandum of Disposition and Development Agreement dated as of July 21, 2005, and recorded in the Official Records on August 9, 2005, as document number (the "Memorandum of DDA") and that certain Amended and Restated Memorandum of Fist Amendment to Disposition and Development Agreement dated as of January 12, 2009, and recorded in the Official Records on February 10, 2009, as document number (the "First Amendment to Memorandum of DDA"). C. The Owner granted the Agency the option to purchase a portion of the Property pursuant to that certain Purchase Option Agreement dated as of November 3, 2008, and recorded in the Official Records as document number on November 5, 2008 (the "Option Agreement") as amended by that certain First Amendment to Purchase Option Agreement dated 783\26\

11 Attachment C as of January 12, 2009 and recorded in the Official Records on February 10, 2009, as (the "First Amendment to Option Agreement"). D. The Agency and the Owner desire to terminate the remaining provisions of the Grant Deed that are still in effect regarding the development and use requirements for the Property (collectively, the "Grant Deed Development Provisions"), the DDA, the Option Agreement, and the First Amendment to Option Agreement, and to release the encumbrance of the Grant Deed Development Provisions, the Memorandum of DDA, the First Amendment to Memorandum of DDA, the Option Agreement and the First Amendment to Option Agreement from the Property. NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, it is hereby declared and understood as follows: 1. The Agency and Owner hereby terminate the Grant Deed Development Provisions, the DDA, the Option Agreement, and the First Amendment to Option Agreement; provided, however, any indemnity obligation, or other obligation set forth in the DDA that explicitly states that it survives the termination of the DDA shall continue in full force and effect. All other rights, duties, obligations, and liabilities of the Agency and the Owner under the Grant Deed Development Provisions, the DDA, the Option Agreement, and the First Amendment to Option Agreement are hereby terminated and are of no further force or effect. 2. The encumbrance of the Grant Deed Development Provisions, the encumbrance of the Memorandum of DDA, and the encumbrance of the First Amendment to Memorandum of DDA are hereby released from the Property. 3. The encumbrance of the Option Agreement, and the encumbrance of the First Amendment to Purchase Option are hereby released from the Property. 4. Notwithstanding the termination of the Grant Deed Development Provisions, nothing in this Release shall be deemed to limit, modify, or otherwise affect, the provisions of the Grant Deed regarding the conveyance of the Property. 5. This Release may be signed in multiple counterparts, which, when signed by both parties, shall constitute one and the same binding agreement. Remainder of Page Left Intentionally Blank 783\26\

12 Attachment C IN WITNESS WHEREOF, the Agency and Owner have executed this Release as of the date written above. AGENCY: VACAVILLE REDEVELOPMENT AGENCY, a public body, corporate and politic By: Laura C. Kuhn Executive Director OWNER: BETHANY LUTHERAN CHURCH, VACAVILLE, CALIFORNIA, a California nonprofit corporation By: Name: Its: SIGNATURES MUST BE NOTARIZED 783\26\

13 Attachment C STATE OF CALIFORNIA ) ) COUNTY OF ) On, 2011, before me,, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) STATE OF CALIFORNIA ) ) COUNTY OF ) On, 2011, before me,, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) 783\26\

14 Attachment C EXHIBIT A LEGAL DESCRIPTION 783\26\ A-1

15 Attachment D RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Vacaville Redevelopment Agency 40 Eldridge Avenue, Suite 7 Vacaville, CA Attn: Executive Director No fee document pursuant to Government Code Section (SPACE ABOVE THIS LINE FOR RECORDER'S USE) GRANT OF RIGHT OF FIRST REFUSAL WITH RESPECT TO PURCHASE OF PROPERTY (Vacaville Redevelopment Agency) THIS GRANT OF RIGHT OF FIRST REFUSAL WITH RESPECT TO PURCHASE OF PROPERTY (the "Agreement") is entered into as of, 2011 (the "Effective Date"), by and between the Vacaville Redevelopment Agency, a public body, corporate and politic (the "Agency"), and Bethany Lutheran Church, Vacaville, California, a California nonprofit corporation (the "Owner"), with reference to the following facts: RECITALS A. The Owner is the owner of certain real property located in the City of Vacaville, County of Solano, State of California, as more particularly described in Exhibit A (the "Property"). B. The Owner acquired the Property, and other adjacent real property, from the Agency pursuant to that certain Disposition and Development Agreement, as amended by that certain First Amendment to Disposition and Development Agreement dated as of November 3, 2008 (collectively, the "DDA"). C. The Owner and the Agency have terminated the DDA, and other agreements encumbering the Property, pursuant to the terms of that certain Termination and Release of Agency Documents executed as of the Effective Date (the "Termination Agreement"). D. In consideration for the termination of the DDA, and other agreements, pursuant to the Termination Agreement, the Owner desires to grant, and the Agency desires to accept, the right to acquire the Property as more particularly set forth in this Agreement. NOW THEREFORE, in consideration for: (i) the amount of Ten Dollars ($10.00), (ii) the termination of the DDA, and other agreements, pursuant to the Termination Agreement, and (iii) other good and valuable consideration, the receipt of which is hereby acknowledged by the 783\26\

16 Attachment D Owner, the Owner and the Agency (each a "Party", and, collectively, the "Parties") hereby agree as follows: 1. Notice of Proposed Sale to Agency. If Owner desires to sell Property, Owner shall notify the Agency, or its successor, of the intended sale. If Owner receives from a third party (the "Proposed Purchaser") a bona fide offer for the purchase of the Property, Owner shall disclose the terms of such offer to the Agency pursuant to a written notice (the "Proposed Sale Notice"), within ten (10) days following the Owner's receipt of the offer from the Proposed Purchaser. 2. Agency Response Notice; Purchase Agreement. The Agency shall have forty-five (45) days after receiving the Proposed Sale Notice to elect either to purchase the Property on terms identical to those offered by the Proposed Purchaser, or to permit the sale of the Property to the Proposed Purchaser. The Agency shall notify the Owner within such forty-five (45) day period whether the Agency desires to purchase the Property pursuant to a written notice to the Owner (the "Agency Response Notice"). If the Agency Response Notice states that the Agency desires to purchase the Property, then within thirty (30) days after the Owner's receipt of the Agency Response Notice, the following shall occur: (i) Owner and the Agency shall enter into a formal contract of sale containing all of the terms of the original bona fide set forth in the Proposed Sale Notice (the "Purchase Agreement"), and (ii) the Owner shall promptly notify the Proposed Purchaser that the Property will be acquired by the Agency. 3. Agency Election Not to Acquire Property. If the Agency Response Notice states that the Agency does not desire to purchase the Property, or if Agency fails to enter into the Purchase Agreement within the thirty (30) day period set forth above, then the Owner may sell the Property to the Proposed Purchaser on the terms contained in the Proposed Sale Notice. Upon the delivery of such notice by the Agency this Agreement shall terminate, and the Parties shall take such actions, and execute such documents, necessary to evidence the termination of this Agreement and to release this Agreement as an encumbrance against the Property. 4. Title to the Property. Within thirty (30) days after the Agency Response Notice the Owner shall obtain evidence of marketable title to the Property and submit the same to the Agency for examination. Thereafter, the Agency shall have twenty (20) days within which to notify Owner as to any defects in, or objections to, the title as so evidenced, and Owner shall have the opportunity to remedy any such defects or objections within ten (10) days after the Agency's written notice to Owner. If Owner, within such ten (10) day period fails to provide evidence that title to the Property is in a condition satisfactory to the Agency, then the Agency shall have the option of either (a) continuing the transaction with such modification(s) to the Purchase Agreement as the Parties may mutually agree, or (b) rescinding the Purchase Agreement. Upon such rescission, this Agreement shall remain in full force and effect. 5. Addresses for Notices. Formal notices, demands, and communications between the Agency and the Owner shall be sufficiently given if, and shall not be deemed given unless, secured personally, or dispatched by certified mail, return receipt requested, or by reputable overnight delivery service with a receipt showing date of delivery, to the principal offices of the Agency and the Owner as follows: 783\26\

17 Attachment D Agency: Vacaville Redevelopment Agency 40 Eldridge Avenue, Suites 1-5 Vacaville, CA Attention: Executive Director with a copy to: Vacaville Redevelopment Agency 650 Merchant Street Vacaville, CA Attention: Executive Director Owner: Bethany Lutheran Church, Vacaville, California 621 South Orchard Avenue Vacaville, CA Attention: Congregation President Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Delivery shall be deemed to have occurred at the time indicated on the receipt for delivery or refusal of delivery. 6. Enforcement. Each Party, or successor thereto, shall have the right to enforce, by any proceeding at law or in equity, all obligations imposed by the provisions of this Agreement. Failure of any Party to enforce any covenant or restriction in this Agreement shall in no event be deemed a waiver of the right to do so thereafter. 7. Applicable Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of California. 8. Venue. In the event that suit shall be brought by any Party to this Agreement, the Parties agree that venue shall be exclusively vested in the state courts of the County of Solano, or where otherwise appropriate, exclusively in the United States District Court, Eastern District of California, Sacramento, California. 9. Title of Parts and Sections. Any titles of the Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. 10. Severability. Should any provision or portion of this Agreement be declared invalid or in conflict with any applicable law, the validity of all other provisions and portions hereof shall remain unaffected and in full force and effect. 11. Term. The covenants and restrictions of this Agreement shall run with and bind the Property until the earlier of: (i) the termination of this Agreement pursuant to Section 3; (ii) the date on which the Owner conveys the Property to the Agency pursuant to a grant deed in accordance with the Purchase Agreement, or (iii) ninety-nine (99) years following the Effective 783\26\

18 Attachment D Date. This Agreement shall inure to the benefit of and shall be enforceable by the Parties and each Party's respective legal representatives, heirs, successors, and assigns. 12. Party's Compliance. Each Party shall be liable for performance of, and is bound by and shall comply with, the provisions of this Agreement. 13. Third Party Beneficiary Rights. Except for the City of Vacaville, which shall be a third-party beneficiary to this Agreement, this Agreement is not intended to create, nor shall it be in any way interpreted or construed to create, any third Party beneficiary rights in any person not a Party hereto unless otherwise expressly provided herein. 14. Entire Understanding of the Parties. This Agreement and the documents and instruments referred to herein or delivered pursuant hereto constitutes the entire understanding and agreement of the Parties. The Parties and their counsel have read and reviewed this Agreement and agree that any rule of construction (including, but not limited to Civil Code Section 1654, as may be amended from time to time) to the effect that ambiguities are to be resolved against the drafting party shall not apply to the interpretation of this Agreement. 15. Amendments. No provision of this Agreement may be amended except by an agreement in writing signed by the Parties hereto or their respective successors in interest. 16. Multiple Originals; Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all Parties hereto had signed the same signature page. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages. 17. Rights of Senior Lender. This Agreement is subject and subordinate to the lien of any first deed of trust recorded against the Property prior to this Agreement. Should any holder of a first deed of trust acquire the Property by foreclosure of said first deed of trust or by a deed in lieu of foreclosure of a first deed of trust, this Agreement shall automatically terminate and shall be of no further effect. In that case, the Agency agrees to execute and deliver, upon request, appropriate acknowledgements of such termination, but such termination shall be deemed to be self-operative, and no such separate agreement or acknowledgement shall be required to effectuate the foregoing termination. Notwithstanding the foregoing, nothing in this Section shall be deemed to obligate the Agency to agree to any proposed subordination of this Agreement to any document in connection with any proposed financing following the recordation of this Agreement. 18. Recordation. This Agreement shall be recorded in the office of the recorder of the County of Solano. Remainder of Page Left Intentionally Blank 783\26\

19 Attachment D IN WITNESS WHEREOF, the Agency and Owner have executed this Agreement as of the Effective Date. AGENCY: VACAVILLE REDEVELOPMENT AGENCY, a public body, corporate and politic By: Laura C. Kuhn Executive Director OWNER: BETHANY LUTHERAN CHURCH, VACAVILLE, CALIFORNIA, a California nonprofit corporation By: Name: Its: (THIS DOCUMENT MUST BE NOTARIZED) 783\26\

20 Attachment D EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY 783\26\ A-1

21 Attachment D STATE OF CALIFORNIA ) ) COUNTY OF ) On, 2011, before me,, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) STATE OF CALIFORNIA ) ) COUNTY OF ) On, 2011, before me,, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) 783\26\ A-2