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SA - Resolution 28135-SARESOLUTION NO. 28135 -SA RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA, IN ITS CAPACITY AS SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF SANTA ROSA, APPROVING AND ADOPTING AN AGREEMENT TO EXTEND THE CLOSE OF ESCROW DATE PURSUANT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA ROSA AND MUSEUM ON THE SQUARE, LLC, 520 THIRD STREET — FORMER AT &T SITE WHEREAS, on June 29, 2010, the Santa Rosa City Council and the former Redevelopment Agency of the City of Santa Rosa (Redevelopment Agency) approved a Disposition and Development Agreement (DDA) between the Agency and the Museum on the Square LLC (Developer), for the sale of the former AT &T site, located at 520 Third Street, by the Agency and purchase and development of the Museum on the Square project by the Developer; and WHEREAS, on December 29, 2011, the California Supreme Court issued its final decision in the litigation of California Redevelopment Association v. Matosantos, upholding Assembly Bill XI 26 (codified as Health and Safety Code § §34161- 34191) (AB XI 26) and invalidating Assembly Bill Xl 27 (the legislation that would have permitted redevelopment agencies to continue operation if their sponsoring jurisdiction agreed to make certain payments for the benefit of schools and special districts). As a result, all California redevelopment agencies were dissolved, effective February 1, 2012; and WHEREAS, on January 10, 2012, by Resolution No. 28029, the Council of the City of Santa Rosa elected the City of Santa Rosa to become the Successor Agency of the former Redevelopment Agency (Successor Agency) pursuant to Health and Safety Code §34173(d); and WHEREAS, the original close of escrow date, pursuant to the DDA was June 29, 2011. In accordance with the Section 203 of the DDA, the Agency Executive Director granted two six - month time extensions for the close of escrow to occur on or before June 29, 2012; and WHEREAS, on May 24, 2012, Hugh Futrell, for Museum on the Square, LLC, by memorandum to David Gouin, Director of Economic Development and Housing (Memorandum), requested a time extension of six months for close of escrow to occur by December 31, 2012, because of the complexity of the financial documentation and the need to assure lenders and tax credit partners that there is no chance that deadlines will interrupt transaction closing. The Memorandum describes 15 major steps that have been accomplished and two remaining critical steps: 1) complete the building permit process by resubmitting plans, including deferred fire safety items, for final plan check (anticipated in early July), and 2) complete financial and tax credit negotiations (anticipated June through August); and WHEREAS, pursuant to DDA Section 203, the Redevelopment Agency and Developer may extend the close of escrow by mutual agreement in writing. Pursuant to AB XI 26, the Successor Agency serves the role of the former Redevelopment Agency. Reso No. 28135 -SA Page 1 of 3 NOW, THEREFORE, BE IT RESOLVED that the Council in its capacity as the Successor Agency to the former Redevelopment Agency of the City of Santa Rosa, hereby finds and determines: Section 1. Recitals The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. Section 2 . CEOA Compliance The Project is exempt from the California Environmental Quality Act (CEQA), Class 32 — Infill Projects. Section 3 . Extension Request Merited Approval of the request for a six -month extension of the close of escrow is merited pursuant to the DDA Section 203 in that the Developer has provided reasonably satisfactory evidence that the Developer has been unable to secure the financing necessary to complete the development of the Site, despite the Developer's best efforts, but is reasonably likely to secure such financing within the proposed extension period. Section 4 Payment of Operating, Maintenance and related Administrative Costs and Project Costs The payment of operating, maintenance, related administrative costs and project costs shall be made by the Developer as set forth in the Agreement to Extend the Close of Escrow Date for the Museum on the Square Project, Pursuant to the Disposition and Development Agreement By and Between the Redevelopment Agency of the City of Santa Rosa and Museum on the Square, LLC, 520 Third Street — Former AT &T Site (Agreement), attached hereto as Exhibit A. Section 5 . Severabilitv If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. BE IT FURTHER RESOLVED that the Council, in its capacity as the Successor Agency approves the time extension for the close of escrow for the Museum on the Square project to occur on or before December 31, 2012, and approves and adopts the Agreement in substantially the same form as on file with the City Clerk. Reso No. 28135 -SA Page 2 of 3 BE IT FURTHER RESOLVED that the Council, in its capacity as the Successor Agency authorizes and directs the City Manager or her designee to execute the Agreement on behalf of the Successor Agency, subject to any minor, clarifying or technical modifications approved by the Successor Agency Counsel, and to take any action necessary to carry out the Agreement. BE IT FURTHER RESOLVED that the Council in its capacity as the Successor Agency authorizes and directs the Chief Financial Officer to deposit funds received the Developer to implement the Agreement in Fund 1286, Object Code 2101. IN COUNCIL DULY PASSED this 19" day of June, 2012. AYES: (7) Mayor Olivares, Vice Mayor Sawyer, Council Members Bartley, Gorin, Ours, Vas Dupre, and Wysocky NOES: (0) ABSENT: (0) ABSTAIN: (0) ATTEST: APPROVED Deputy City Clerk �� Mayor APPROVED AS TO FORM: SuccessorFAgency Attorney Attachment: Exhibit A - Agreement to Extend Close of Escrow Reso No. 28135 -SA Page 3 of 3 EXHIBIT A AGREEMENT TO EXTEND THE CLOSE OF ESCROW DATE FOR THE MUSEUM ON THE SQUARE PROJECT, PURSUANT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA ROSA AND MUSEUM ON THE SQUARE, LLC, 520 THIRD STREET — FORMER AT &T SITE This agreement ( "Agreement "), dated 1 2012 is made between the City of Santa Rosa, a California charter city, in its capacity as Successor Agency to the former Redevelopment Agency of the City of Santa Rosa (Successor Agency), and Museum on the Square, LLC, a Limited Liability Company (Developer), the developer of the Museum on the Square Project (Project), located at 520 Third Street, Santa Rosa (Property). RECITALS A. On June 29, 2010, the Santa Rosa City Council and the former Redevelopment Agency of the City of Santa Rosa (Redevelopment Agency) approved a Disposition and Development Agreement (DDA) between the Redevelopment Agency and the Developer, for the sale of the Property by the Redevelopment Agency and purchase and development of the Project by the Developer. B. On December 29, 2011, the California Supreme Court issued its final decision in the litigation of California Redevelopment Association v. Matosantos, upholding Assembly Bill Xl 26 (codified as Health and Safety Code § §34161- 34191) (Statute) and invalidating Assembly Bill X1 27 (the legislation that would have permitted redevelopment agencies to continue operation if their sponsoring jurisdiction agreed to make certain payments for the benefit of schools and special districts). As a result, all California redevelopment agencies were dissolved, effective February 1, 2012. C. On January 10, 2012, by Resolution No. 28029, the Council of the City of Santa Rosa elected the City of Santa Rosa to become the Successor Agency pursuant to Health and Safety Code §34173(d). D. The original close of escrow date pursuant to the DDA was no later than June 29, 2011. In accordance with the Section 203 of the DDA, the Agency Executive Director granted two six -month time extensions for the close of escrow to be later than June 29, 2012. E. During the second extension period, the Agency requested and the Developer agreed to pay operating and maintenance (O &M) costs estimated to be approximately eighteen thousand dollars ($18,000), from the Developer's forty thousand dollar ($40,000) performance deposit described in the DDA. F. On May 24, 2012, Hugh Futrell, for Museum on the Square, LLC, by memorandum to David Gouin, Director of Economic Development and Housing (Memorandum), requested a time extension of six months for close of escrow to occur by December 31, 2012, because of the complexity of the financial documentation and the need to assure lenders and tax credit partners that there is no chance that deadlines will interrupt transaction closing. The Memorandum describes 15 major steps that have been accomplished and two remaining critical steps: 1) complete the building permit process by resubmitting plans, including deferred fire safety items, for final plan check (anticipated in early July), and 2) complete financial and tax credit negotiations (anticipated June through August). G. Approval of the request for a six -month extension of the close of escrow is merited pursuant to the DDA Section 203 in that the Developer has provided reasonably satisfactory evidence that the Developer has been unable to secure the financing necessary to complete the development of the Site, despite the Developer's best efforts, but is reasonably likely to secure such financing within the proposed extension period. H. Pursuant to Section 203 of the DDA, the Redevelopment Agency and Developer may additionally extend the close of escrow by mutual agreement in writing. Pursuant to the Statute, the Successor Agency serves the role of the former Redevelopment Agency. AGREEMENT NOW THEREFORE, the parties agree as follows: 1. Recitals The Recitals set forth above are true and correct and incorporated herein by reference. 2. Effective Date The Effective Date of this Agreement is June 29, 2012. 3. Term. The close of escrow shall be on or before December 31, 2012. 4. Operating, Maintenance and Related Administrative Costs Beginning July 1, 2012, the Developer shall transfer its name and address on the accounts for O &M services provided by the companies identified below and shall directly pay all such costs: • Pacific Gas & Electric Company — energy • City of Santa Rosa — water and sewer • AT &T — telephone service • Santa Rosa Fire Equipment — fire inspections • Empire Elevator Co. — elevator maintenance and inspections • Bay Alarm (or other company) — fire alarm monitoring Beginning on July 1, 2012, the Developer shall also pay other O &M services provided by the City of Santa Rosa, as Successor Agency, and its contractors. Such other O &M services principally include the facilities maintenance staff and janitorial services, but may involve other services that might require maintenance or repair by an outside vendor and related administrative costs (Other O &M Costs). The Developer may choose to provide janitorial services in lieu of including these services as Other O &M Costs, and shall provide a 30 -day written notification to the City for such change. 5. Project Costs Beginning with costs incurred on July 1, 2012, the Developer shall be responsible for payment of all reasonable project - related costs associated with general ownership of the Property and close of escrow transactions — some of which may occur after the close of escrow (Project Costs). Project Costs are expected to include, but are not limited to, costs associated with administrative, and legal, accounting, and any financial analysis services. The City shall reasonably endeavor to minimize such Project Costs. 6. Deposit Prior to the Effective Date of this Agreement, the Developer shall deliver twelve thousand dollars ($12,000) to the City of Santa Rosa (as Successor Agency) to pay for Other O &M Costs and Project Costs (together, City Costs), as described above (Deposit). If at any time during the term of this Agreement, the City, in its sole discretion, determines that additional funds are needed - based upon calculation of actual City Costs to date and projection of future City Costs - the City may make one or more written requests that the Developer provide the City with additional funds to augment the Deposit. Each such request for additional funds shall not exceed ten thousand dollars ($10,000). The Developer shall deliver the requested funds to the City within ten (10) calendar days of the date of the written request. When all actual City Costs have been calculated, any surplus Deposit (including any additional Deposit) shall be returned to the Developer. 7. Limitation on Liability Nothing herein shall be deemed or construed as implied or express approval from the City of Santa Rosa for the proposed Project. It is hereby understood and agreed by the parties that Developer will proceed with said redevelopment proposal through the appropriate City process independent of this Agreement. 8. Miscellaneous (A) Entire Agreement This Agreement contains the entire agreement between the parties concerning the extension of time to close escrow under the DDA. Any and all such verbal or written agreements made prior to the date of this Agreement are superseded by this Agreement and shall have no further effect. (B) Modification No modification or change to the terms of this Agreement shall be binding on a Party unless in writing and signed by an authorized representative of that party. (C) Governing Law; Venue This Agreement shall be construed, and its performance enforced, under California law. Any judicial proceeding in connection with any dispute under, or enforcement of, the Agreement shall be brought in Sonoma County, California. (D) Severability If any provision of this Agreement or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provision or application, and to this end the provisions of this Agreement are severable. The Council hereby declares that it would have adopted this Agreement irrespective of the invalidity of any particular portion thereof. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. MUSEUM ON THE SQUARE, LLC, A California Limited Liability Company By: Name: Hugh Futrell It's Managing Member By: Name: Bill Carle It's Managing Member Taxpayer ID # CITY OF SANTA ROSA, a California charter city, in its capacity as SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF SANTA ROSA By: Title: City Manager ATTEST: City Clerk APPROVED AS TO FORM: By: Successor Agency Counsel