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11-15-2011 - Exclusive Negotiating Agreement with C.G.M. Develo - Item 4 (2).docCity of West Covina Memorandum A G E N D A ITEM NO. DATE: November 15, 2011 DATE: November 15, 2011 TO: Andrew G. Pasmant, City Manager and the City Council FROM: Christopher J. Chung Community Development Commission Director SUBJECT: EXCLUSIVE NEGOTIATING AGREEMENT WITH C.G.M. DEVELOPMENT, INC. RECOMMENDATION: It is recommended that the City Council authorize the City Manager to approve a 90-day extension to the Exclusive Negotiating Agreement (“ENA”) with two 60-day options with C.G.M. Development, Inc. (“CGM”) in order to complete negotiations with the County on the County parking lease, complete processing of the City entitlement permits, and to complete negotiations with the City on the terms of the development agreement. DISCUSSION: On October 19, 2010, the City Council approved an ENA with the CGM for a development of an upscale commercial condominium office development on portion of the Civic Center property. The ENA was scheduled to expire on October 31, 2011. A 90-day extension will reset the expiration date to January 29, 2012. During the course of the ENA period, significant progress has been made moving the project forward. CGM has processed planning entitlement permits, prepared environmental and traffic studies, is in continue negotiation with the City on the development agreement, and is also in negotiation with the County of Los Angeles (“County”). The extension will provide for additional time needed for CGM to complete the negotiations with the City and the County, and finalize the project agreements. Staff requests that the City Council authorize the City Manager to approve CGM’s request for the ENA extension. An ENA is not an agreement to sell or develop a property. Rather, it is a standard redevelopment real estate agreement that allows the parties to negotiate exclusively on the potential terms of a land sale and/or development of a property in which would be formalized in the Disposition Development Agreement (“DDA”). The ENA also provides both the City and a developer with an opportunity to analyze the feasibility of pursuing the project while addressing various issues related to development of a site. ALTERNATIVES: The City Council has the following alternatives: Authorize the City Manager to approve Amendment No. 1 extending the ENA for an additional 90-day period with two 60-options with C.G.M. Development, Inc.; Deny C.G.M.’s request for an extension; or Provide alternate direction. Andrew G. Pasmant, City Manager and the City Council November 15, 2011 Page 2 of 2 FISCAL IMPACT: The economics of this proposed project have not been determined at this time. By authorizing the extension of the ENA, any terms of a future agreement will be disclosed at a later date. Prepared by: Benjamin Kim Reviewed by: Mike Lee Redevelopment Manager Assistance CDC Director Reviewed/Approved by: Christopher J. Chung CDC Director Reviewed & Approved by: City Attorney Attachments: No. 1 – CGM’s Request for ENA extension No. 2 – Amendment No. 1 to ENA extending the expiration date Attachment No. 1  Attachment No. 2 FIRST AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT (CIVIC CENTER PROPERTY) This First Amendment (“Amendment”) to the Exclusive Negotiating Agreement entered into between THE CITY OF WEST COVINA, a public body, corporate and politic (the “City”) and CGM DEVELOPMENT INC. (the “Developer”) on October 19, 2010 is entered into on _____________________________, 2010 on the terms and provisions as set forth below. RECITALS The following recitals are a substantive part of this Amendment: WHEREAS, the City and Developer entered into an Exclusive Negotiating Agreement dated October 19, 2010 ("ENA") which addressed the rights and responsibilities of the Parties to negotiate exclusively to make certain improvements on approximately 2.2 acres located at the southeast corner of West Covina Parkway and Garvey Avenue South in the City of West Covina; and WHEREAS, the Exclusive Negotiating Agreement is scheduled to expire on October 31, 2011; and WHEREAS, the Developer has requested an extension to the term of the Exclusive Negotiating Agreement in order to process development entitlements and complete the review of the terms of the DDA; WHEREAS, the City and Developer desire to extend the term of the Exclusive Negotiating Agreement for an additional ninety (90) days with two (2) sixty (60) day extension options at the sole and absolute discretion of the City Manager. NOW, THEREFORE, the City and Developer hereby agree as follows: Amendment of Section I B [102] of the Exclusive Negotiating Agreement. Section B [102] is hereby deleted in its entirety and replaced with the following: The duration of this Negotiating Agreement (the “Negotiation Period”) shall be four hundred twenty (420) days from the execution of this Agreement by the City. If upon expiration of the Negotiating Period, the Developer has not signed and submitted a DDA to the City or engaged in substantial progress towards finalizing terms of a DDA, as determined by the City Manager, or his designee, then this Negotiating Agreement shall automatically terminate unless this Negotiating Agreement has been mutually extended by the City and Developer. However, if in the opinion of the City Manger the Parties have made substantial progress in finalizing terms of a DDA and all other conditions of a Developer’s Submission, as set forth in paragraph 202 of the ENA, have been filed, the City Manager in his sole and absolute discretion may extend the Negotiating Period for an additional two (2) sixty (60) day extensions in order to process a DDA and other applications required by this Negotiating Agreement. Effective Date. This Amendment shall be effective as of the date first set forth above (the “Effective Date”). No Other Changes. Except as expressly set forth in this Amendment, all other terms and conditions of the Exclusive Negotiating Agreement shall remain unchanged and in full force and effect. “CITY” CITY OF WEST COVINA, a public body, corporate and politic, _________________ Date Andrew G. Pasmant City Manager ATTEST: __________________________ City Clerk APPROVED AS TO FORM: ______________________________ Arnold M. Alvarez-Glasman City Attorney “DEVELOPER” C.G.M. DEVELOPMENT, INC. __________________________ C.G.M. Development, Inc.