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HomeMy WebLinkAboutItem 4.3 - 2879 Dublin Place MOU Page 1 of 3 STAFF REPORT CITY COUNCIL DATE: October 15, 2019 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: Memorandum of Understanding between the City of Dublin, ASVRF Acquisitions, LLC, ASVRF Dublin Place, LP, and ASVRF 6960 Amador LP regarding Dublin Place Shopping Center Prepared by: Hazel L. Wetherford, Economic Development Director EXECUTIVE SUMMARY: The City Council will consider approval of a Memorandum of Understanding between the City of Dublin, ASVRF Acquisitions, LLC, ASVRF Dublin Place, LP, and ASVRF 6960 Amador LP regarding Dublin Place Shopping Center. STAFF RECOMMENDATION: Adopt the Resolution Approving the Memorandum of Understanding between the City of Dublin, ASVRF Acquisitions, LLC, ASVRF Dublin Place, LP, and ASVRF 6960 Amador LP regarding Dublin Place Shopping Center. FINANCIAL IMPACT: Appropriations from the General Fund’s Economic Development Committed Reserve ($2,454,625) and Downtown Public Improvements Committed Reserve ($545,375) are necessary. The City Manager is authorized to appropriate funds from Committed fund balances that have been approved by the City Council for specific purposes . Use of these funds will fully utilize the balance of the Economic Development Reser ve and will leave $3,454,625 in the Downtown Public Improvements Reserve. DESCRIPTION: The Dublin Place shopping center (Shopping Center) located in the Retail District of Downtown Dublin contains eight parcels with three different property owners (see Fig. 1 below). ASVRF Dublin Place, LP, also known as American Realty Advisors (ARA), owns five of the eight parcels and desires to acquire 7300 Amador Plaza Rd. (Property) (see Fig. 2 below) in partnership with the City of Dublin. Figure 1. Dublin Place Shopping Center Figure 2. 7300 Amador Plaza Rd. Page 2 of 3 Over the past year, the City has been working on the Downtown Preferred Vision project and has been working with ARA to develop new and more appropriate uses for the Shopping Center consistent with the City’s Downtown Dublin Specific Plan, and to amend the Covenants, Conditions & Restrictions (CC&Rs) and Reciprocal Easement Agreement (REA) encumbering the Shopping Center. ARA and the City desire to see redevelopment opportunities of various areas within the Shopping Center and would like to partner together towards acquiring 7300 Amador Plaza Rd. The purchase price for 7300 Amador Plaza Rd. is Six Million Seven Hundred Seventy-Five Thousand dollars ($6,775,000). ARA has committed to depositing Three Million Seven Hundred Seventy-Five Thousand dollars ($3,775,000) into escrow with the City contributing Three Million dollars ($3,000,000) towards the purchase of the Property. In order to facilitate the City’s contribution towards the purchase of 7300 Amador Plaza Road, the parties intend to negotiate and execute a funding agreement governing their individual rights and obligations. The Resolution approving the Memorandum of Understanding (MOU) grants the City Manager authority to enter into such funding agreement for the purpose of carrying out the intent of the MOU. The City and ARA have agreed to the following terms as it relates to the joint commitment of funds towards the acquisition of 7300 Amador Plaza Rd. For a period of 18 months following the effective date of the MOU, ARA will attempt to:  Acquire the other portions of the Shopping Center, and if successful in acquiring the remaining sites, will cooperate in the City’s efforts to site a town square park and sell the City the necessary acreage as outlined in the MOU;  Identify and create a separate site for the development of an up to 80 -unit affordable senior housing site;  Obtain termination rights and/or relocation rights within the leases for any future lease(s) within both the 7950 Amador Valley Bl vd. property and 7300 Amador Plaza Rd. property;  Apply for a permit for a new monument signage program which would include a Page 3 of 3 rebranding effort of the Shopping Center; and  If, during the 18-month period as outlined in the MOU, the City does not approve a higher and better use of 7505 Dublin Blvd. as part of a larger redevelopment of the Shopping Center, or if ARA decides that it would be beneficial not to develop 7505 Dublin Blvd. as part of a larger redevelopment of the Shopping Center, then ARA will obtain a building permit for the development of 7505 Dublin Blvd. If, during the 18-month period, the City and ARA mutually agree that ARA has failed to comply with the terms of the MOU, ARA shall reimburse the City’s contribution of Three Million dollars. STRATEGIC PLAN INITIATIVE: Strategy 4: Focus efforts on ways to strengthen the City’s economic vitality, including the Downtown, through public investment and economic development. NOTICING REQUIREMENTS/PUBLIC OUTREACH: A copy of this Staff Report has been provided to ARA. ATTACHMENTS: 1. Resolution - Approving the Memorandum of Understanding regarding Dublin Place Shopping Center 2. Exhibit A to the Resolution - Memorandum of Understanding RESOLUTION NO. XX-19 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* APPROVING A MEMORANDUM OF UNDERSTANDING REGARDING DUBLIN PLACE SHOPPING CENTER WHEREAS, ASVRF Acquisitions, LLC, ASVRF Dublin Place, LP, and ASVRF 6960 Amador LP also known as American Realty Advisors (ARA) and the City desire to see redevelopment opportunities of various areas within the Dublin Place Shopping Center; and WHEREAS, the City has requested, and ARA has agreed, to use commercially reasonable efforts to facilitate future development of the Shopping Center and site a Town Square, including acquisition of 7300 Amador Plaza Rd (the “Property”); and WHEREAS, the purchase price for the Property is Six Million Seven Hundred Seventy- Five Thousand dollars ($6,775,000); and WHEREAS, ARA and the City wish to partner together towards acquiring the Property, with ARA depositing Three Million Seven Hundred Seventy-Five Thousand dollars ($3,775,000) into escrow and the City contributing Three Million dollars ($3,000,000) towards the purchase of the Property; and WHEREAS, the parties now wish to enter into a Memorandum of Understanding (MOU) to bring clarity to their joint commitment and to set out in general terms the various roles each party will play and procedures to be followed; and WHEREAS, for a period of 18 months following the effective date of the Memorandum of Understanding (MOU), ARA will attempt to:  Acquire the other portions of the Shopping Center, and if successful in acquiring the remaining sites, will cooperate in the City’s efforts to site a town square park and sell the City the necessary acreage as outlined in the MOU;  Identify and create a separate site for the development of an up to 80-unit affordable senior housing site;  Obtain termination rights and/or relocation rights within the leases for any future lease(s) within both 7950 Amador Valley Blvd. and the Property;  Apply for a permit for a new monument signage program which would include a rebranding effort of the Shopping Center; and  If during the 18-month period as outlined in the MOU, the City does not approve a higher and better use of 7505 Dublin Blvd. as part of a larger redevelopment of the Shopping Center, or if ARA decides that it would be beneficial not to develop 7505 Dublin Blvd. as part of a larger redevelopment of the Shopping Center, then ARA will obtain a building permit for the development of 7505 Dublin Blvd.; and WHEREAS, if during the 18-month period, the City and ARA mutually agree that ARA has failed to comply with the terms of the MOU, ARA shall reimburse the City’s contribution of Three Million dollars ($3,000,000). NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the Memorandum of Understanding regarding Dublin Place Shopping Center for the acquisition of 7300 Amador Plaza Road. BE IT FURTHER RESOLVED that the City Manager is authorized to execute the MOU in substantially the form attached as Exhibit A to this Resolution, and to take such other and further action, as necessary and appropriate to carry out the intention of this Resolution, including execution of a Funding Agreement related to acquisiton of the Property, as deemed appropriate by the City Manager. PASSED, APPROVED AND ADOPTED this 15th day of October, 2019, by the following vote: AYES: NOES: ABSENT: ABSTAIN: _______________________________ Mayor ATTEST: ______________________________ City Clerk 3391865.1 Memorandum of Understanding Dublin Place Shopping Center 1 MEMORANDUM OF UNDERSTANDING (Dublin Place Shopping Center) This Memorandum of Understanding (“MOU”) dated October 15, 2019 (“Effective Date”) is entered into between and among the City of Dublin (the “City”), ASVRF Acquisitions, LLC, a Delaware limited liability company (“ASVRF Acquisitions”), ASVRF Dublin Place, LP, a Delaware limited partnership (“ASVRF Dublin”) and ASVRF 6960 Amador, LP, a Delaware limited partnership (“ASVRF Amador” and collectively “Owners”). The City and Owners are each individually referred to as a “Party” and collectively referred to as the “Parties.” RECITALS WHEREAS, ASVRF Acquisitions has entered into that certain Purchase and Sale Agreement dated August 2, 2019 with EVCAP Amador Plaza LLC and TA Amador Plaza, LLC (the “Purchase Agreement”) to purchase 7300 Amador Plaza Road, Dublin, California, Assessor’s Parcel No. 941-0305-027 (the “7300 Amador Property”), located within the Dublin Place Shopping Center (the “Shopping Center”) for a purchase price of Six Million Seven Hundred Seventy-Five Thousand dollars ($6,775,000); and WHEREAS, the Owners wish to develop new and more appropriate uses for the Shopping Center consistent with the City’s Downtown Dublin Specific Plan, including the siting of a Town Square and the City is supportive of these efforts; and WHEREAS, Owners and the City desire to see the Covenants, Conditions & Restricts (CC&Rs) and Reciprocal Easement Agreement (REA) encumbering the Shopping Center amended to allow more appropriate uses at the Shopping Center, consistent with the City’s Downtown Dublin Specific Plan, redevelopment opportunities of various areas within the Shopping Center, and/or improved signage; and WHEREAS, in furtherance of the Parties’ desire to amend the CC&Rs and REA, Owners intend to work with any other property owners or tenants within the Shopping Center, whose consent may be necessary to complete such amendments; and WHEREAS, the City has requested, and Owners have agreed, to use commercially reasonable efforts to facilitate future development of the Shopping Center and site a Town Square; and WHEREAS, ASVRF Acquisitions will deposit into escrow the amount of Three Million Seven Hundred Seventy-Five Thousand dollars ($3,775,000), together with its share of any closing costs for the purchase of the 7300 Amador Property; and WHEREAS, subject to the terms of this MOU, City will contribute Three Million Dollars ($3,000,000) towards the purchase price of the 7300 Amador Property; and WHEREAS, the Parties now wish to enter into an agreement to bring specificity to their joint commitment and to set out in general terms and actions needed to be taken to by all Parties to complete the acquisition of the 7300 Amador Property and encourage future development of the Shopping Center and siting of a Town Square, consistent with the City’s Downtown Specific Plan. Memorandum of Understanding Dublin Place Shopping Center 2 NOW THEREFORE, the Parties hereby agree as follows: Section 1. Term. The provisions of this MOU shall expire the earlier of (i) eighteen (18) months from the Effective Date of this MOU or (ii) upon completion of the Parties’ obligations under this MOU or (iii) by mutual consent of the Parties. Section 2. Contribution by the City for the 7300 Amador Property. A. The City and ASVRF Acquisitions shall, in good faith, negotiate and execute a funding agreement governing their rights and obligations with respect to the City’s contribution toward the purchase of the 7300 Amador Property (the “Funding Agreement”). B. On or before two business days prior to the Closing Date (as defined in the Purchase Agreement), City shall deposit Three Million Dollars ($3,000,000) into escrow towards the purchase of the 7300 Amador Property (“City’s Share”) pursuant to the terms of the Funding Agreement. C. In the event that the Parties mutually determine that ASVRF Acquisitions has failed to comply with the terms of the Funding Agreement (including the provisions of Section 3 below as incorporated in the Funding Agreement), ASVRF Acquisitions shall reimburse the City’s Share pursuant to the terms of said Funding Agreement. Section 3. Owner’s Obligations. A. Acquisitions, leases, and improvements For a period of 18 months following the effective date of this MOU, Owners shall: 1. Owners shall, in good faith attempt to acquire (either in their own names of through related entities), at no more than Fair Market Value, the other portions of the Shopping Center not currently owned by Owners. 2. Owners shall, in good faith attempt to identify and create a separate site within the area proximate to 7950 Amador Valley Boulevard (the former Grocery Outlet building) and the 7300 Amador Property to provide for the development of an up to 80-unit affordable senior housing site, which the City will have the opportunity to acquire based upon the land’s Fair Market Value as further provided for herein. 3. ASVRF Dublin and ASVRF Acquisitions shall use good faith efforts to obtain termination rights and/or relocation rights within the leases for any future lease(s) within both the 7950 Amador Valley Boulevard Property and, upon its acquisition by ASVRF Acquisitions or affiliated entity, the 7300 Amador Property. However, temporary seasonal leases shall not be restricted on either property. 4. Owners shall apply for a permit to the City for a new monument signage program to serve the Shopping Center. The new signage program would Memorandum of Understanding Dublin Place Shopping Center 3 incorporate an immediate rebranding effort, which would be subject to City consultation and approval as part of the City’s permit process. 5. If during the 18-month period described above, the City does not approve a higher and better use of the 7505 Dublin Boulevard (the former Coco’s building) as part of a larger redevelopment of the Shopping Center, or if ASVRF Dublin decides that it would be beneficial not to develop 7505 Dublin Boulevard as part of a larger redevelopment of the Shopping Center, then ASVRF Dublin shall obtain a building permit for the development of 7505 Dublin Boulevard. B. Siting of Town Square 1. If ASVRF Acquisitions or a related entity is successful in acquiring the parcel of land comprised of 6850 Amador Plaza Road, 6900 Amador Plaza Road, and 575 Dublin Boulevard (APN 941-0305-4300) within the Shopping Center (the “941 Parcel”), ASVRF Acquisitions will cooperate in the City’s efforts to site a Town Square and park, which collectively could take up to approximately 1 acre of land within the Shopping Center in a location generally depicted in Exhibit A. i. Upon acquisition of the 941 Parcel, ASVRF Acquisitions shall sell the necessary acreage, consistent with the area and location as depicted on Exhibit A or an area to be mutually agreed upon by the Parties, to the City at its Fair Market Value pursuant to the terms of a mutually agreed upon purchase and sale agreement. Nothing herein prevents the City from using the power of eminent domain to acquire a parcel or parcels within the Dublin Place Shopping Center for use as a Town Square. ii. Owners shall not oppose the City’s efforts to site a Town Square and park or other related public infrastructure in the Shopping Center (i.e., would not initiate a public opposition campaign, file a CEQA lawsuit, etc.) so long as its location, size and phasing of development is consistent with Exhibit A or as otherwise mutually agreed upon by the Parties. Section 4. Successors and Assigns. This MOU is binding upon and shall inure to the benefit of the Parties, and each of them, and their respective successors in interest and assigns. Section 5. Fair Market Value. Whenever used in this MOU, the term “Fair Market Value” shall mean the most probable price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date. As between and among the Parties to this MOU, fair market value may be determined by the following process: A. Each Party shall appoint an appraiser and notify the other party in writing of the name and address of the appraiser so chosen, along with the appraiser’s qualifications. Each appraiser shall be an MAI certified real estate appraiser duly licensed by the State of California, having at least 10 years of experience Memorandum of Understanding Dublin Place Shopping Center 4 appraising commercial real estate with an emphasis on mixed use retail in the Tri-Valley Area of Alameda County, consisting of the cities of Dublin, Livermore, Pleasanton and San Ramon. B. The appraisers shall then meet and confer during the thirty (30) day period, commencing on the date on which the last of the appraisers has been appointed (“Appraiser Negotiation Period”) to attempt to mutually agree upon fair market value of the subject property. If the appraisers cannot agree upon fair market value as of the expiration of the Appraiser Negotiation Period, the two appraisers shall, within twenty (20) days thereafter; (i) each make their own determination of fair market value, and (ii) attempt to select a third appraiser meeting the qualifications stated in this section. If the two appraisers are not able to agree upon the third appraiser, either party, by giving fifteen (15) days written notice to the other party, can apply to the Presiding Judge of the Superior Court of Alameda County for the selection of a third appraiser who meets the qualifications stated in this section. Each of the parties shall bear one half (1/2) of the cost of appointing the third appraiser and paying the third appraiser’s fees. C. The third appraiser, however selected, shall be a person who has not previously acted in any capacity for either party. The third appraiser shall, within thirty (30) days after his or her appointment, make a determination of fair market value using the same criteria specified above. The determinations of fair market value prepared by all three appraisers shall be compared and fair market value shall be whichever determination by either party appraiser is closer to the determination of the third appraiser (and if they are equally close, fair market value shall be the determination of the third appraiser). D. In the event the City elects to proceed with eminent domain to acquire a property which was previously the subject of a Fair Market Value determination in accordance with this section, the opinions of value expressed by any of the appraisers utilized in this process shall be inadmissible except in the event one of said appraisers is retained as an expert witness by a party in the eminent domain proceeding in which event said opinion may be used for purposes of impeachment of said appraiser. Furthermore, the compensation to be paid in any such eminent domain action shall be determined in accordance with California Eminent Domain Law. Section 6. Entire Agreement. This MOU constitutes the entire understanding between the parties with respect to the matters contemplated herein, and all prior or contemporaneous oral agreements, understandings, representations and statements, and all prior written agreements, understandings, letters of intent and proposals, in each case with respect to the transaction contemplated herein, are hereby superseded and rendered null and void and of no further force and effect and are merged into this MOU. Neither this MOU nor any provisions hereof may be waived, modified, amended, discharged or terminated except by an instrument in writing signed by the party against which the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in such instrument. Section 7. Construction. This MOU shall not be construed more strictly against one party than against the other merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that all Parties have contributed substantially Memorandum of Understanding Dublin Place Shopping Center 7 Exhibit A Siting Area of a Town Square Park