AgdaPkt 2011-05-23 - Laserfiche WebLink

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8.B. - Page3 the RDA allows for the Agency to enter into an ERN agreement with its preferred developer. ERN agreements are commonly entered into to assure the developer that the Redevelopment Agency will not be negotiating with another developer for the disposition of the same property. Developers often seek such assurance because they may be spending a significant amount of money during the term of the ERN on pre-development studies, plans and/or environmental document preparation, as well as paying for all of the costs of the City/Agency in connection with the negotiations of the Disposition and Development Agreement (DDA) and the proposed project (i.e., any third-party consultants, legal fees, environmental studies, staff time). The ERN would state that during its term, the parties will seek to finalize the terms of a proposed DDA but that if the parties are not able to agree upon the terms within the ERN term, the ERN will terminate and the parties shall have no further rights against or obligations to each other. The DDA would set forth the terms and conditions on which the property would be sold to the developer, which typically include conditions such as having approved plans and binding financial commitments sufficient to allow the project to be completed. The DDA also would include a description of the proposed project and a schedule for development of the project. The City property would not be transferred to the Agency until the developer had met all the conditions for conveyance, as set forth in the DDA (such as approval of all plans, secured financing commitments, etc.) Approval of the DDA requires a noticed public hearing by both the Agency and City Council in order to assure proper use of the RDA's authority. There are three ways that the Agency may pick a developer to enter into an ERN with, as follows: • Direct Selection. One particular developer may stand out as the clear choice for and ERN, in which case the Agency may choose to enter into the ERN without giving other developers an opportunity to vie for the project. Staff suggests that compelling considerations for this option may include a developer's unique circumstances such as: certainty to secure financing; highly specialized expertise with this type of development; and/or land assembly opportunities. For example, one developer is currently in the process of purchasing a portion of the Block 2 site, specifically, the parcels located on the corner of Jefferson Avenue and Middlefield Road at 932 and 928 Middlefield Road. These properties comprise approximately 12% of Block 2, with the balance of Block 2 owned and controlled by the City. This developer has expressed strong interest in purchasing the City-owned portion of Block 2 and has prepared preliminary plans that appear to conceptually conform to precise plan standards and guidelines. The Agency could enter into a 90 day ERN period with this or another developer to determine if acceptable terms and conditions can be negotiated. If at the end of this period terms are not settled, another developer selection option can be initiated. Staff suggests this relatively brief period in order to ensure that time is not lost with any particular developer in a situation where negotiations are not progressing