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AGENDA BILL Agenda Item No. 5(B) Date: June 20,201 1 To: El Cerrito Municipal Services Corporation Board From: Lori Trevifio, Redevelopment Manager Subject: Assign the Tri-Party Agreement with Safeway Inc. and Target Corporation to the El Cerrito Municipal Services Corporation ACTION REQUESTED Adopt a resolution accepting the assignment by the El Cerrito Redevelopment Agency of all of its rights and obligations with respect to the acquisition of the property identified as the Hill Street Parcel as provided in that certain Tri-Party Agreement between the Agency, Safeway, Inc., and Target Corporation dated October 5,2009. BACKGROUND The El Cerrito Redevelopment Agency entered into a Tri-Party Agreement (TPA) with Safeway Inc, and Target Corporation for the transfer of the Target property to Safeway. As part of that agreement and in consideration for the Agency releasing its option to acquire the property, Safeway agreed to transfer to the Agency a parcel consisting of approximately 39,000 square feet at the corner of the property fronting on Hill Street and San Pablo Avenue. Safeway is prepared to convey the Hill Street Parcel (HSP) to the Agency pursuant to the terms of the TPA. However, due to continued uncertainty regarding possible elimination of redevelopment agencies, the Agency is proposing to assign to the Corporation its rights and obligations under the TPA related to the HSP conveyance. ANALYSIS Accepting the assignment will allow for transfer of the HSP from Safeway directly to the Corporation. The MSC would be obligated to use the property in a manner consistent with the Agency's Redevelopment Plan. Additionally, pursuant to the terms of the TPA, the HSP is subject to a right of first refusal for the benefit of Safeway that would allow Safeway the first right to negotiate to acquire the property once the Corporation determines the desired uses for the property. Acquisition of the HSP by the Corporation will ensure that the future uses of the property are consistent with the City and the Agency's economic development goals and objectives. ---PAGE BREAK--- Agenda Item No. FINANCIAL CONSIDERATIONS The intent of the assignment is to retain local control of the HSP for future use in accordance with the intent of the Redevelopment Plan and the TPA. The financial impact on the Corporation is in securing the value of the assets. LEGAL CONSIDERATIONS This report and the accompanying resolution were prepared by Corporation's Legal Counsel. Reviewed by: Attachments : 1. Resolution accepting the assignment by the El Cerrito Redevelopment of all of its rights and obligations with respect to the acquisition of the property identified as the Hill Street Parcel as provided in that certain Tri-Party Agreement between the Agency, Safeway, Inc., and Target Corporation dated October 5,2009 Page 2 ---PAGE BREAK--- Agenda Item No. 5(B) Attachment 1 RESOLUTION NO. 201 1-XX A RESOLUTION OF THE EL CERRITO MUNICIPAL SERVICES BOARD ACCEPTING AN ASSIGNMENT FROM THE EL CERRITO REDEVELOPMENT AGENCY OF ALL OF THE AGENCY'S RIGHTS AND OBLIGATIONS UNDER THAT CERTAIN TRI-PARTY AGREEMENT TO ACQUIRE PROPERTY LOCATED AT THE CORNER OF HILL STREET AND SAN PABLO AVENUE WHEREAS, the City Council (the "City Council") of the City of El Cerrito (the "City") has adopted the City of El Cerrito Redevelopment Plan (as amended, the "Redevelopment Plan"). The Redevelopment Plan sets forth a plan for redevelopment of the City of El Cerrito Redevelopment Project Area (the "Project Area"); and WHEREAS, the El Cerrito Redevelopment Agency (the "Agency") is responsible for administering the Redevelopment Plan to cause redevelopment of the Project Area; and WHEREAS, the Agency entered into a Tri-Party Agreement dated October 5, 2009 with Safeway, Inc. and Target Corporation which gave the Agency right to acquire certain property located at the corner of Hill Street and San Pablo Avenue (the "Hill Street Parcel") from Safeway, Inc. ; and WHEREAS, the Agency desires to assign its rights and obligations under the Tri-Party Agreement with regards to the Hill Street Parcel to the El Cerrito Municipal Services Corporation; and WHEREAS, the El Cerrito Municipal Services Corporation (the "MSC") desires to accept assignment of all of the Agency's rights and obligations under the Tri-Party Agreement with regards to the Hill Street Parcel, and WHEREAS, pursuant to Section 15004(b)(2)(A) of the Guidelines for the implementation of the California Environmental Quality Act ("CEQA"), the Agreement is exempt from the requirements of CEQA because the future use of the Hill Street Parcel is conditioned upon CEQA compliance, and the City retains full discretion in approving, denying, or conditioning any land use entitlement, or any other planning approval, necessary for the development of the Hill Street Parcel; and NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: 1. The Board finds that the above recitals are accurate. 2. The Board hereby accepts assignment of all of the El Cerrito Redevelopment Agency's rights and obligations to acquire the Hill Street Parcel pursuant to the Tri Party Agreement and authorizes the Executive Director to execute any and all documents necessary to effectuate the assignment. ---PAGE BREAK--- Agenda Item No. 5(B) Attachment 1 3. This Resolution shall take immediate effect upon its adoption. I CERTIFY that at a regular meeting on June 20, 201 1, the Board of Directors of the El Cerrito Municipal Services Corporation passed this Resolution by the following vote: AYES: DIRECTORS: NOES: DIRECTORS: ABSENT: DIRECTORS: ABSTAINS: DIRECTORS - Cheryl Morse, Corporation Clerk APPROVED: Ann Cheng, Chair ---PAGE BREAK--- Agenda Item No. 5(B) Attachment 1 Exhibit A ASSIGNMENT AND ASSUMPTION AGREEMENT (Hill Street Parcel) THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") is entered into as of , 201 1 (the "Effective Date"), by and between the El Cerrito Redevelopment Agency, a public body corporate and politic (the "Assignor" or the "Agency"), and the El Cerrito Municipal Services Corporation, a California nonprofit public benefit corporation (the "Assignee" or the "MSC"), and with reference to the following facts: RECITALS A. The Agency entered into that certain Tri-Party Agreement dated October 5, 2009 with Safeway, Inc., and Target Corporation, which provides the Agency with certain rights to acquire property located at the corner of Hill Street and San Pablo Avenue ("Hill Street Parcel") form Safeway. B. The Agency desires to assign to the MSC, and the MSC desires to assume from Agency, all of the Agency's rights and obligation under the Tri-Party Agreement to acquire the Hill Street Parcel under the terms and conditions set forth below. C. The MSC desires to accept the assignment of the Agency's rights and obligations under the Tri-Party Agreement to acquire the Hill Street Parcel. D. Safeway has consented to the Assignment. NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agency and the MSC (collectively, the "Parties") mutually agree as follows: 1. Assignment by Agency. As of the Effective Date, the Agency hereby assigns transfers and delegates to the MSC, all of Agency's right, title, and interest in and obligations under the Tri-Party Agreement related to the acquisition of the Hill Street Parcel. Agency shall remain responsible for all other obligations under the Tri-Party Agreement. 2. Future Development. The Agency is assigning its rights to acquire the Hill Street Parcel to the MSC in consideration for the MSC's agreement to cause the development of the Hill Street Parcel in a manner consistent with the El Cerrito Redevelopment Plan and the ' Agency's Five Year Implementation Plan. The Agreement evidences the obligation of the MSC to pay to the Agency the value received by the MSC for the Hill Street Parcel from a developer selected by the MSC to develop the Hill Street Parcel in a manner consistent with the Redevelopment Plan and the Five Year Implementation Plan ("Third Party Developer"). This amount received by the MSC will be the greater of the fair market value of the Hill Street Parcel, or the fair reuse value of the Hill Street Parcel (as of the date of the conveyance by the MSC to the Third Party Developer either as a fee conveyance or as a ground lease conveyance) based on ---PAGE BREAK--- Agenda Item No. 5(B) Attachment 1 Exhibit A the use of the Hill Street Parcel in a manner consistent with the Redevelopment Plan and the Five Year Implementation Plan, and with the covenants and conditions and development costs imposed by the MSC on the Third Party Developer in connection with the development of the Hill Street Parcel (the "Parcel Consideration"). Such amount, if any, will be paid by the MSC to the Agency upon the MSC receiving such consideration from the Third Party Developer. The Agency acknowledges that the Parcel Consideration for the Hill Street Parcel may be as little as One Dollar ($1.00) depending on the specific limitations imposed by the MSC on the Third Party Developer, and the other covenants and conditions and development costs imposed by the MSC on the Third Party Developer in connection with the development of the Hill Street Parcel. 3. Acceptance of Assignment. As of the Effective Date, the MSC hereby accepts the above assignment and hereby assumes, agrees and undertakes to perform all of the obligations, covenants and agreements of Agency pursuant to the Tri-Party Agreement related to the Hill Street Parcel. 4. Representations. Agency hereby represents and warrants that it has not previously assigned, pledged, hypothecated or otherwise transferred its rights to acquire the Hill Street Parcel pursuant to the Tri-Party Agreement. 5. Governing Law. This Assignment shall be governed by the laws of the State of California. 6. Headings. Section headings contained in this Assignment are inserted as a matter of convenience and for ease of reference only and shall be disregarded for all other purposes, including the construction or enforcement of this Assignment or any of its provisions. 7. Severability. If any term, provision, covenant or condition of this Assignment is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability . 8. Legal Actions. In the event any legal action is commenced to interpret or to enforce the terms of this Assignment, or otherwise arising out of this Assignment, the party prevailing in any such action shall be entitled to recover against the party not prevailing all reasonable attorneys' fees, expenses, and costs incurred in such action. 9. Counterparts. This Assignment may be executed in counterparts by the Parties hereto, each of which shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. IN WITNESS WHEREOF, the Parties have executed this Assignment as of the Effective Date. ---PAGE BREAK--- Agenda Item No. 5(B) Attachment 1 Exhibit A ASSIGNOR: EL CERRITO REDEVELOPMENT AGENCY, a public body, corporate and politic By: Name: Its: ASSIGNEE: EL CERRITO MUNICIPAL SERVICES CORPORATION, a California nonprofit public benefit corporation By: Name: Its: