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CIC Resolution 05-133COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA RESOLUTION NO. 0 5-133 RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF AN ASSIGNMENT AND ASSUMPTION AGREEMENT AND FIRST AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT BETWEEN MOVIETECS INC. AND THE COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA WHEREAS, the Community Improvement Commission of the City of Alameda ( "Commission ") is carrying out the Community Improvement Plan for the Business and Waterfront Improvement Project ( "Community Improvement Project "); and WHEREAS, the Commission and MovieTecs, Inc. ( "Developer ") entered into an Exclusive Negotiating Agreement, dated October 16, 2004, providing for the j—! Commission and Developer to negotiate diligently and in good faith the terms of a w Disposition and Development Agreement ( "DDA ") with respect to the development of a cc proposed high- profile theater project (the "Project ") on certain real property located 0 within the Community Improvement Project area (the "Site "); and >. 'WHEREAS, the Site consists, in part, of that certain real property located at 2305 Central Avenue in the City of Alameda (the "Option Property "), currently owned by Peter N. Delanoy and Bettye J. Delanoy (the "Delanoys "); and WHEREAS, Developer has entered into an Option to Purchase Agreement with the Delanoys dated March 20, 2003, in which the Delanoys granted Developer an exclusive option to purchase the Option Property, which agreement expires on March 19, 2005 (the "Option Agreement "); and WHEREAS, the Option Property is needed in order for the Project, as contemplated, to move forward; and WHEREAS, Developer desires to assign its rights and obligations under the Option Agreement to Commission and Commission desires to accept such assignment and assume Developer's rights and obligations thereunder; and WHEREAS, Developer and Commission also desire to enter into a First Amendment to Exclusive Negotiating Agreement, to provide for Commission's (1) payment of a termination payment to Developer, and (2) grant to Developer an option to purchase that certain portion of the Option Property that Commission does not intend to use for a proposed public parking garage, in the event the parties are unable to reach agreement on the terms of, or fail to enter into, a DDA; and WHEREAS, Commission desires to authorize Commission staff to take all actions necessary to purchase the Option Property following a satisfactory due diligence investigation thereof, including Phase 2 environmental assessment. NOW, THEREFORE, THE COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The Commission hereby approves and authorizes the Executive Director to execute the Assignment and Assumption Agreement in the form attached hereto as Exhibit A, subject to minor technical or conforming changes approved by Commission Counsel. Section 2. The Commission hereby approves and authorizes the Executive Director to execute the First Amendment to Exclusive Negotiating Agreement in the form attached hereto as Exhibit B, subject to minor technical or conforming changes approved by Commission Counsel. Section 3. The Executive Director and Secretary of the Commission are hereby authorized and directed to take such further actions and execute . such documents as are necessary to effect the acquisition of the Option Property by Commission, including, without limitation, execution of a Certificate of Acceptance. ASSIGNMENT AND ASSUMPTION AGREEMENT FOR VALUE RECEIVED, the undersigned, MOVIETECS, Inc., a corporation (the "Assignor "), hereby assigns and transfers to thd'COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA, a public body, corporate and politic (the "Commission "), all of Assignor's right, title and interest in and to the Option to Purchase Agreement dated March 20, 2003, by and between Assignor and Peter N. Delanoy and Bettye J. Delanoy, as extended three times with a current expiration date of March 19, 2005 (the "Potion Agreement "). The Option Agreement grants an option to purchase that certain real property with a street address of 2305 Central Avenue, in the City of Alameda, County of Alameda, State of California, containing 22,000 square feet of land, more or less, as more fully described in the "Legal Description of the Property" attached hereto as Exhibit A, and the improvements located thereon (the "Property "). In consideration for this assignment, upon closing for purchase of the Property, if such closing occurs, Commission shall reimburse Assignor, for (i) Assignor's deposits required by the Option Agreement, and (ii) Assignor's appraisal fee and out of pocket costs incurred by third parties in connection with the Option Agreement, as substantiated by invoices submitted by Assignor (the "Reimbursement "). In no event shall the Reimbursement exceed $26,500. This Assignment is made in order to effectuate the terms of an Exclusive Negotiating Agreement dated October 16, 2004, by and between Assignor and Commission, as amended by a First Amendment to Exclusive Negotiating Agreement dated February 2005 (collectively, the "ENA "). Assignor represents and warrants to Commission that the Option Agreement is unconditionally assignable to Commission, and that no previous pledge, transfer or assignment of Assignor's rights or interest in or to the Option Agreement has been made. This Assignment shall be governed by the laws of the State of California, without regard to its choice of laws or provisions. Assignor consents to the jurisdiction of any federal or state court within the State of California having proper venue for the filing and maintenance of any action arising hereunder and agrees that the prevailing party in any such action shall be entitled, in addition to any other recovery, to reasonable attorneys' fees and costs. Except as otherwise limited herein, this Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns and successors -in- interest of Assignor and Commission. Commission's rights under this Assignment may not be assigned or transferred to any other person or entity during the Negotiation Period, as defined in the ENA, or during such period as may be agreed upon by the parties in a Disposition and Development Agreement being negotiated between the parties. Exhibit A and the Consent to Assignment are attached hereto and incorporated herein by reference. 'Signatures an following page' 792613v1A 21942/0017 Executed by the Assignor on, 2005. ASSIGNOR corporation Commission hereby accepts the foregoing assignment and assumes the obligations of the Optionee under the Option Agreement. Executed by Commission on February — 2005. COMMISSION: COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA, a public body corporate and politic By: Name: Its: 792613v1A 21942/0017 BY: Approved as to Form CITY ATT 2 ; As/ ssistant Cl , ttorney EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY PARCEL ONE: Commencing at the point of intersection of the northern line of Central Avenue, as the same now exists since the widening thereof, with the eastern line of Oak Street; running thence easterly along said line of Central Avenue, one hundred feet; thence at right angles northerly one hundred sixty -seven feet, six inches; thence at right angles westerly one hundred feet to the eastern line of Oak Street; and thence southerly among said last named line one hundred and sixty -seven feet, six inches to the point of commencement. Being portion of Lots numbered 5 and 6 in Block 49, as said Lots and Block are delineated and so designated upon that certain "map of Lands Adjacent to the Town of Encinal, Alameda County, Cal., Surveyed by Jas. T. Stratton, May 1s`, 1867," filed May 28, 1867, in Liber 19 of Maps, at Page 53, in the Office of the County Recorder of Alameda County. Being Assessor's Parcel Number: 071 - 0203 -016 PARCEL TWO: Portion of Lots 5 and 6, in Block 49, as said Lots and Block are shown on the "Map of Lands Adjacent to the Town of Encinal, Alameda County, Cal. Surveyed by Jas. T. Stratton, May 1, 1867" filed May 28, 1867, in Book 19 of Maps, at Page 53, in the Office of the County Recorder of Alameda County, described as follows: Beginning at a point on the Southeastern line of Oak Street, as shown on said map, distant thereon northeasterly 157.50 feet from the northeastern line of Central Avenue, as said avenue now exists since the widening thereof, and running thence along said line of Oak Street northeasterly 50 feet; thence southeasterly parallel with said line of Central Avenue, 100 feet; thence southwesterly parallel with said line of Oak Street 50 fee; thence northwesterly parallel with said line of Central Avenue, 100 feet to the point of beginning. Being Assessor's Parcel Number: 071- 0203 -017 Exhibit A G: \Soto \Theater Project\ Video Maniacs Option \Assignment and Assumption.doc FIRST AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT This FIRST AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT ( "Amendment ") is entered into this _ day of , 2005, by and between the COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA, a public body, corporate and politic ( "CIC "), and MOVTETECS, a California corporation ( "Developer "), Recitals A. On October 16, 2004, CIC and Developer entered into that certain Exclusive Negotiating Agreement ( "ENA ") providing for CIC and Developer to negotiate diligently and in good faith the terms of a DDA (as defined in ENA) with respect to the redevelopment of a high - profile theater project on the Site (as defined in ENA) located at the Northeast corner of Central Avenue and Oak Street. B. The Site consists, in part, of that certain improved real property located at 2305 Central Avenue in the City of Alameda ("Property"), currently owned by Peter N. Delanoy and Bettye J. Delanoy ( "Delanoys "). The building located on the Property is currently leased to Video Maniacs and a portion of the parking lot is subject to a parking license with Long's Drugs. The Video Maniacs lease and the Long's Drugs parking license are referred to collectively herein as the "Leasehold Interests." C. Developer has entered into an Option to Purchase Agreement with the Delanoys dated March 20, 2003, pursuant to which the Delanoys have granted Developer an exclusive option to purchase the Property ( "Option Agreement "). D. The Property is needed in order for the Project, as contemplated, to move forward and Developer desires to assign its rights under the Option Agreement to CIC (the "Assignment "). Concurrently herewith, Developer and CIC are entering into an assignment and assumption agreement providing for Developer's assignment to CIC of Developer's rights and obligations under the Option Agreement. E. Subject to the conditions precedent described herein, Developer and CIC desire to provide for CIC's payment of a Termination Payment to Developer and grant to Developer of an option to purchase that certain real property generally depicted as the "Remainder Piece" in Exhibit A attached hereto, if CIC and Developer are unable to negotiate the terms of a DDA or if a DDA is not approved by the Commission Board. The Remainder Piece will comprise that portion of the Property that CIC does not require for the proposed construction of a public parking garage (the "Parking Garage Piece "). The Parking Garage Piece is generally depicted in Exhibit A attached hereto. Aereements Now, therefore, CIC and Developer hereby agree as follows: 1. Conditions Precedent to Termination Payment and Remainder Piece O+ntion. CIC's obligation to pay the Termination Payment to Developer as described in Section 2 below, 796412v2A 21942/0017 and the effectiveness of Developer's option to purchase the Remainder Piece from CIC as provided in Section 3 below, shall be expressly conditioned upon satisfaction of each of the following conditions precedent: (a) CIC, in its sole and absolute discretion, shall have closed escrow for purchase of the Property from the Delanoys pursuant to the Option Agreement. (b) CIC shall have reparcelized the Property into two separate parcels consisting of the Parking Parcel and the Remainder Piece, as generally depicted on Exhibit A attached hereto. (c) CIC shall have terminated the Leasehold Interests pursuant to the terms of the lease and license agreements evidencing such Leasehold Interests. (d) CIC and Developer shall have failed to agree upon the terms of and enter into a DDA prior to the expiration of the Negotiation Period (as defined in ENA), as may be extended by the parties. (e) Developer shall have delivered to CIC a written release in a form acceptable to CIC legal counsel waiving and. releasing any claims that Developer may have against CIC arising out of ENA and a quitclaim deed in favor of CIC quitclaiming and releasing all interests that Developer may have in any and all portions of the Site other than the Property. (f) Developer shall not be in default under ENA. Assuming CIC purchases the Property in accordance with (a) above, CIC will use diligent, good faith efforts to satisfy conditions (b) and (c) above promptly following the close of escrow. 2. Termination Payment, Subject to satisfaction of each of the conditions set forth in Section 1 above, within 15 business days following expiration of the Negotiation Period, CIC shall pay Developer a Termination Payment, which shall be equal to the difference of $300,000.00 less CIC's closings costs in connection with the acquisition of the Property from the Property Owner (including all escrow and recording fees and the premium paid by CIC for any title insurance and transfer taxes) ( "Closing Costs ") ) CIC's out -of- pocket costs to complete a Phase 2 environmental assessment report of the Property ( "Environmental Costs ") less CIC's out - of- pocket costs to remediate any hazardous materials that may be located on or under the Property following CIC's acquisition thereof from Delanoys ( "Remediation Costs "). The Closing Costs, Environmental Costs and Remediation Costs shall collectively be referred to as "CIO's Costs." In the event that CIC recovers any Remediation Costs from responsible third parties or any state clean -up fund, the amount of such recovery shall be credited against CIC's costs of remediating such hazardous materials. 3. Remainder Piece Purchase Option. Subject to the satisfaction of each of the conditions set forth in Section 1 above, Developer shall have the option to purchase the Remainder Piece for the Purchase Price (as defined in Section 3(b) below). The precise boundaries and square footage area of the Remainder Piece shall be determined by CIC in connection with its planning process for development of the proposed public parking garage 2 796412v2A 21942/0017 1 project and shall be as generally depicted in Exhibit A, attached hereto. Developer may exercise the option to purchase by delivering written notice of exercise ( "Exercise Notice ") to CIC at any time prior to the date which is 60 days following expiration of the Negotiation Period. Developer's purchase of the Remainder Piece shall be on the following terms and condition: (a) Access. At any time following expiration of the Negotiation Period, Developer shall have access to enter the Remainder Piece to perform any and all due diligence, including any environmental investigations, which Developer desires in connection with the potential acquisition of the Remainder Piece. Developer shall enter into a right of entry agreement in form reasonably satisfactory to CIC counsel prior to entering upon the Remainder Piece. (b) Purchase Price. The Purchase Price for the Remainder Piece ( "Purchase Price ") shall be equal to the product of (i) the difference of $50 minus the CIC's Costs divided by the square footage of the Property, multiplied by (ii) the square footage of the Remainder Piece. (c) Escrow. The sale shall be consummated through an escrow to be opened within 10 days after the Exercise Notice has been given to CIC. The parties shall execute all documents required by the escrow holder as long as they are consistent with the provisions of this Section 3. Escrow shall close within 45 days after the Exercise Notice has been delivered. Escrow shall be deemed to have closed on the date the grant deed is recorded. (d) As -Is. The conveyance of the Remainder Piece shall be on an "As -Is" condition and basis, with all faults. (e) Title to Remainder Piece. CIC shall deliver to escrow holder an executed standard form grant deed in recordable form conveying fee title to the Remainder Piece subject to all matters of record. CIC shall not create any new encumbrances or exceptions to title not existing as of the date CIC purchases the Property. (f) Title Insurance. At the close of escrow, escrow holder must be prepared to issue an ALTA Standard Coverage Owner's Policy of Title Insurance in the amount of the Purchase Price insuring title to the Remainder Piece vested in Developer subject to all matters of record as described in Section 3(e) ( "Title Policy "). (g) Closinsr Costs. The cost of the Title Policy shall be paid by Developer. All escrow charges and all other closing costs shall be paid in accordance with Alameda County custom. (h) No Assignment. Developer's option to purchase the Remainder Piece may not be assigned or transferred to any other person or entity, except for a transfer or assignment of the option to an Affiliate of Developer (as defined below) in connection with which such Affiliate of Developer assumes the rights and obligations of Developer under the option pursuant to an assignment and assumption agreement in a form reasonably acceptable to CIC's legal counsel. "Affiliate of Developer" means an entity or entities in which Developer or Kyle Conner, the controlling shareholder of Developer, retains a beneficial economic interest and in which Developer or Kyle Conner retains effective management and control of the transferee 3 796412r2A 21942!0017 entity or entities, subject only to major events requiring the consent or approval of the other owners of such entity. 4. e, sigpment of Delanov Option Agreement. The effectiveness of this Amendment is contingent upon Developer's assignment of the Option Agreement to CIC. 5. Amendment to Section 7 of the ENA. Section 7 of the ENA is hereby deleted in its entirety and restated as follows: "The Developer shall directly pay all costs of due diligence associated with the development of the site, including but not limited to, all attorney fees, all environmental investigation costs, all engineering costs, all architect and/or design costs, all traffic studies, all parking studies, all soils investigation costs, and all estimating costs, ordered, directed, or initiated by Developer and associated with the Development of the new Cineplex site. Developer is not responsible for costs previously incurred and paid by the CIC for work performed by Michael Stanton Architecture." 6. Canitalized Terms. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in ENA. 7. • Exclusive Negotiating Agreement in Effect. Developer and CIC acknowledge and agree that ENA, except as amended by this Amendment, remains unmodified and in full force and effect in accordance with its terms. 8. Severability. If any term, provision, condition or covenant of this Amendment or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Amendment, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. IN WITNESS WHEREOF, the undersigned have entered into this Amendment as of the date first written above. Dated: ATTEST: 796412v2A 21942/0017 CIC: COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA, a public body, corporate and politic , 2005 By: 4 Executive Director Commission Secretary APPROVED AS TO FORM: / / �% 'City Attorney / Co . iffon Counsel Dated: C____ 2.6 , 2005 796412v2A 21942/0017 DEVELOPER MOVIE i� , a - ifornia corporation B Ky1� Its: , Goobr 5 • St. ea • r EXHIBIT A Property Diagram 50/7 740 C /or 0 .Avenue 4 60 is j4 e. I6r • 417 sro - 17.1 9 . + � d � all e6e1 r •mp a so si•ao•w 11 Centro/ 3 ,e.rd4'y je IW /4 of ,I0,;1 /S N 1.©i Lti. 0.1.4110 P !r /00.14 /6 rry .�4 r /7 '0 as . 70.Q6 <- 1 46.aa 10 le.3. . • %Yl A. Parking Lot Portion B. Remainder Piece' /Wen tie 2:500/7(70 N. n 1 ��O I4Q•7 14•0• IA 03 w 4401 I, the undersigned, hereby certify that the foregoing Resolution was duly and regularly adopted and passed by the Community Improvement Commission of the City of Alameda in a Special Joint City Council, Community Improvement Commission and Alameda Reuse and Redevelopment meeting assembled on the 1st day of February, 2005, by the following vote to wit: AYES: Commissioners Daysog, deHaan, Gilmore, Matarrese, and Chair Johnson - 5. NOES: None. ABSENT: None. ABSTENTIONS: None. IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official seal of said Commission this 2 "d day of February, 2005. (J-tr\a b-fe;)--) Lara Weisiger, Secretary Community Improvement Co 'ssion