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