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HomeMy WebLinkAboutCO 2025-186 - Pelican Communities, LLC-1- 11231-0001\2748496v5.doc EXCLUSIVE NEGOTIATING AGREEMENT FOR AN AFFORDABLE HOUSING DEVELOPMENT AT THE ETIWANDA DEPOT This EXCLUSIVE NEGOTIATING AGREEMENT (“ENA”) is dated as of September 16, 2025 (“Effective Date”) and is entered into by and between the CITY OF RANCHO CUCAMONGA, a municipal corporation (the “City”), and PELICAN COMMUNITIES, LLC, a California limited liability company (the “Developer”). The City and the Developer are sometimes individually referred to herein as a “Party” and are sometimes collectively referred to herein as the “Parties.” R E C I T A L S A.The City owns the land in the City of Rancho Cucamonga, California described on Exhibit “A” (the “Property”). B.The City and Developer desire to discuss the terms of a sale or lease of the Property to Developer, and the terms to achieve on the Property development of an affordable for-sale residential project and restoration of the Etiwanda Train Station, with the overall final project to include a community club house and small retail shop (“Project”). C.Developer intends to incur significant costs analyzing and designing the Project, and Developer has therefore requested that City agree to negotiate with Developer on an exclusive basis to establish the terms and conditions of a “disposition and development agreement” for the sale of the Property and development of the Project (“DDA”). D.It is anticipated that during the term of this ENA, City staff and consultants and attorneys of the City will devote substantial time and effort in meeting with the Developer and its representatives, reviewing proposals, plans and reports, negotiating and preparing the DDA document, possibly obtaining consultant advice and reports, and complying with the California Environmental Quality Act (“CEQA”) so that the negotiated DDA can be completed, approved and executed. E.On December 19, 2024, pursuant to Resolution 2024-110 of the City Council of the City of Rancho Cucamonga declared the Property to be surplus property based on Government Code Section 54221. F.The City of Rancho Cucamonga, is authorized to allocate up to $1,150,000 of funds from the Prohousing Incentive Program (“PIP”) received by the City from a grant from the State of California Housing and Community Development Department, which amount, in full, may be allocated by the City Manager to the Project on or before March 31, 2026 in connection with a DDA entered into between the City and Developer pursuant to the terms hereof. NOW, THEREFORE, the Parties hereto agree as follows: 1.The term of this ENA shall commence on the date hereof and shall end on the earlier of: (i) the date that is eighteen (18) months after the date of this ENA, as such period may be extended as set forth below under this Section 1, or (ii) the date on which the City terminates this ENA as provided in Section 2 below (the “ENA Period”). Provided that City has not terminated this ENA pursuant to Section 2 below, the ENA period may be extended by the City of Rancho Cucamonga CONTRACT NUMBER 2025-186 Docusign Envelope ID: 569EDBEC-1E26-44B1-BAF2-F23480D9A751Docusign Envelope ID: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 -2- 11231-0001\2748496v5.doc mutual written agreement of Developer and the City Manager for one additional period of up to six (6) months. 2. The City Manager may terminate this ENA if the Developer should fail to comply with or perform any provisions of this ENA or if the City Manager determines that material progress is not being made in the negotiations as a result of actions or inactions of Developer. Developer may terminate this ENA at any time by giving written notice to the City that it for any reason no longer desires to pursue the acquisition or development of the Property. 3. During the ENA Period (as extended under Section 1, if applicable), the City shall negotiate exclusively and in good faith with Developer concerning the proposed acquisition and entitlement of the Property as well as the terms of any loans or advancement of housing funds as noted below. 4. Developer shall deliver the materials and information identified in Exhibit “B” attached hereto to the City within the times set forth in Exhibit “B”. 5. The City shall have the right but not the obligation to advance up to $1,150,000 of funds from the PIP program to Developer in a loan. In the discretion of the City Manager, such funds may be advanced for: preliminary architectural and engineering services, environmental review and related assessments, site due diligence and surveying, feasibility and market studies related to the Project, legal and entitlement-related costs, and other soft costs customary and necessary for the project development. In the discretion of the City Manager and subject to applicable program conditions, PIP funds that are advanced may be secured by: (i) an assignment of plans and specifications agreed to by architect, engineers, and contractors for the project, assigning to the City in the event of default (as defined later in this paragraph), all such plans, specifications or contractor documents related to the project; and (ii) a deed of trust on the property, once acquired by developer, securing a note for the loan which requires that the loan be repaid if an event of default occurs [before a date that is the completion date of the project]. Event of defaults as used in this paragraph may include, (i) failure to construct the project by the completion date, subject to force majeure delay, (ii) failure to record a deed of trust in escrow to secure the forgivable loan; (iii) failure to issue to the City a lender’s policy of title insurance on close of escrow for the acquisition of the Property, (iv) a default under this agreement or under other loans against the Property. A condition to disbursal of such funds, if any, shall be the receipt by the City of reasonable supporting documentation evidencing the expenditure by Developer of such funds. The City Manager shall, in connection with any advance of funds as contemplated in this paragraph, have the authority to execute a subordination agreement subordinating the deed of trust securing the loan to the deed of trust that secures any construction financing necessary for the Project. 6. The City and Developer acknowledge that all applicable requirements of CEQA must be met in order for City to approve entitlements and enter into a DDA, and that this may require reports and analyses for CEQA purposes (collectively, the “CEQA Documents”). The Developer will, at its cost, reasonably cooperate with the City in the City’s preparation of the CEQA Documents. Docusign Envelope ID: 569EDBEC-1E26-44B1-BAF2-F23480D9A751Docusign Envelope ID: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 -3- 11231-0001\2748496v5.doc 7. The Parties acknowledge that neither Party is under any obligation whatsoever to enter into a DDA or participate in the Project, and that notwithstanding their approval of this ENA, each Party shall have the right to disapprove any proposed DDA in its sole and absolute discretion, and in that regard, each Party hereby expressly agrees that the City and Developer shall not be bound by any implied covenant of good faith and fair dealing in connection with such approval or disapproval of any proposed DDA. In the event of the expiration or earlier termination of this ENA, the City shall be free to negotiate with any persons or entities with respect to the Property. 8. The Developer shall indemnify, defend, and hold the City and City’s officers, directors, members, employees, agents, contractors and affiliated entities (collectively, the “City Representatives”) harmless from any and all third party litigation challenging this ENA or the DDA (based on CEQA noncompliance or otherwise). The Developer’s obligations under the preceding sentence arising prior to the expiration or earlier termination of this ENA (as applicable) shall survive the expiration or earlier termination of this ENA. In order to limit the cost of its defense and indemnification under this paragraph, in the event of any such litigation, if and when requested to do so in writing by Developer, City agrees to cancel and rescind the ENA, DDA and/or any other agreement or approval challenged in the litigation. 9. The Developer represents and warrants that its undertakings pursuant to this ENA are for the purpose of development of the Property and not for speculation in land, and the Developer recognizes that, in view of the importance of the development of the Property to the general welfare of the community, the qualifications and identity of the Developer and its principals are of particular concern to City; therefore, this ENA may not be assigned by the Developer without the prior express written consent of the City Manager in his sole and absolute discretion. However, the City acknowledges that the Developer may intend to form a new entity to be the developer entity that will be party to the DDA that is controlled by the parties comprising the Developer, and a change in entity name, form or membership with respect to Developer shall be a permitted assignment, provided that the current owner(s) of Developer directly or indirectly control, and own a controlling majority of, the assignee entity, all as shown by reasonable evidence acceptable to the City Manager. 10. Any notice, request, approval or other communication to be provided by one Party to the other shall be in writing and provided by certified mail, return receipt requested, or a reputable overnight delivery service (such as Federal Express) and addressed as follows: [Intentionally left blank] Docusign Envelope ID: 569EDBEC-1E26-44B1-BAF2-F23480D9A751Docusign Envelope ID: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 -4- 11231-0001\2748496v5.doc If to the Developer: Pelican Communities 1601 Dove Street, Suite 250 Newport Beach, CA 92660 Attn: Richard Hamm If to the City: City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91730 Attn: City Manager Notices shall be deemed delivered: (i) if sent by certified mail, then upon the date of delivery or attempted delivery shown on the return receipt; or (ii) if delivered by overnight delivery service, then one (1) business day after delivery to the service as shown by records of the service. 11. This ENA constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof. There are no agreements or understandings between the Parties and no representations by either Party to the other as an inducement to enter into this ENA, except as may be expressly set forth herein, and any and all prior discussions and negotiations between the Parties are superseded by this ENA. 12. This ENA may not be altered, amended or modified except by a writing duly authorized and executed by all Parties. 13. No provision of this ENA may be waived except by an express written waiver duly authorized and executed by the waiving Party. 14. If any Party should bring any legal action or proceeding relating to this agreement or to enforce any provision hereof, the Parties agree that any legal action or proceeding or agreed-upon arbitration or mediation shall be filed in and shall occur in the County of San Bernardino. 15. The interpretation and enforcement of this ENA shall be governed by the laws of the State of California. 16. Time is of the essence of each and every provision hereof in which time is a factor. 17. This ENA may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same ENA. IN WITNESS WHEREOF, the Parties hereto have executed this ENA as of the day and year first written above. Docusign Envelope ID: 569EDBEC-1E26-44B1-BAF2-F23480D9A751Docusign Envelope ID: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 -5- 11231-0001\2748496v5.doc CITY: CITY OF RANCHO CUCAMONGA, a municipal corporation By: L. Dennis Michael, Mayor DEVELOPER: PELICAN COMMUNITIES, LLC, a California limited liability company By: ________________________________ ________________________________ Attest: Kim Sevy, City Clerk Approved as to Form: Nicholas R. Ghirelli, City Attorney Docusign Envelope ID: 569EDBEC-1E26-44B1-BAF2-F23480D9A751Docusign Envelope ID: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 -A-1- 11231-0001\2748496v5.doc EXHIBIT “A” DESCRIPTION OF PROPERTY APN 0227-121-56-0000 Parcel 1 of Parcel Map No. 19247, in the City of Rancho Cucamonga, County of San Bernardino, State of California, as per map filed in Book 238 of Parcel Maps, Pages 76 through 79, inclusive, in the office of the county recorder of said county. APN 0227-121-55-0000 Parcel 1 of Parcel Map No. 19247, in the City of Rancho Cucamonga, County of San Bernardino, State of California as per map filed in Book 238 of Parcel Maps, Pages 76, inclusive, in the office of the county recorder of said county. Docusign Envelope ID: 569EDBEC-1E26-44B1-BAF2-F23480D9A751Docusign Envelope ID: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 -B-1- 11231-0001\2748496v5.doc EXHIBIT “B” DEVELOPMENT PLAN 1. Within two hundred (200) days of the Effective Date, Developer shall deliver the following items for City staff review and preliminary approval: a. Preliminary site plan and architectural concept drawings shall be ninety percent (90%) complete at a minimum identifying the location, building envelopes, general configuration, uses of the buildings and site, parking and traffic circulation, and proposed design characteristics of the Project. b. Conceptual development program (“Development Program”) for the Project that includes a breakdown of the proposed scope of development including a range of building square footage by land use and range of square footage and number of parking spaces and landscaped areas, improvements, approximate number and mix of any residential units, proposed public amenities, circulation, and other general uses. c. Prepare at least ninety percent (90%) completed preliminary architectural drawing and submit a concept plan for the adaptive reuse of the historic Etiwanda Depot building. The plans should have a narrative description of the adaptive reuse of the building, including historic preservation strategies and intended uses. The plan shall show circulation, access, including ADA compliance, and parking, cost estimates and financing approach. 2. Within two hundred thirty (230) days of the Effective Date but not more than thirty (30) days from the date of the delivery of the concept plan referred to in Section 1 hereof, Developer and City staff shall determine the likely type and schedule for obtaining entitlements necessary for construction of the Project including, but not limited to, discretionary permits. 3. Within two hundred (200) days of the Effective Date, Developer shall deliver to the City for Owner staff review and approval, a preliminary financing plan for the proposed Project. 4. Within two hundred (200) days of the Effective Date, Developer shall obtain and review a Phase I environmental (hazmat) report for the Property, and if recommended by the Phase I, Developer shall promptly obtain a Phase II report subject to entering into a reasonable right of entry agreement with City. Developer shall promptly deliver copies to the City when received. 5. Within two hundred (200) days of the Effective Date, Developer shall obtain and review a preliminary report for the Property from a title company selected by Developer and copies of the documents listed as title exceptions therein and an ALTA survey and shall deliver copies of the reports, documents and survey to the Owner together with a written description of Docusign Envelope ID: 569EDBEC-1E26-44B1-BAF2-F23480D9A751Docusign Envelope ID: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 -B-2- 11231-0001\2748496v5.doc any objections Developer may have to any of the title exceptions (and the rationale for the objections). 6. Within two hundred sixty (260) days of the Effective Date, Developer shall submit to the City a schedule of development setting forth the proposed timetable for the commencement, substantial completion, and final completion of the Project (the “Development Schedule”). 7. Within three hundred (300) days of the Effective Date, Developer shall deliver to the City a fully completed and executed development application. Docusign Envelope ID: 569EDBEC-1E26-44B1-BAF2-F23480D9A751Docusign Envelope ID: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 Certificate Of Completion Envelope Id: 8D4384DF-0BAE-4B79-B5C6-FBC2A2466BD5 Status: Completed Subject: Complete with Docusign: CO_2025-186_ Negotiating Agreement Etiwanda Depot.pdf Source Envelope: Document Pages: 8 Signatures: 3 Envelope Originator: Certificate Pages: 5 Initials: 0 Elizabeth Thornhill AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) elizabeth.thornhill@cityofrc.us IP Address: 199.201.174.250 Record Tracking Status: Original 9/17/2025 7:33:00 AM Holder: Elizabeth Thornhill elizabeth.thornhill@cityofrc.us Location: DocuSign Signer Events Signature Timestamp L. Dennis Michael dennis.michael@cityofrc.us Mayor/President City of Rancho Cucamonga Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 172.116.88.134 Signed using mobile Sent: 9/17/2025 7:37:29 AM Resent: 9/17/2025 8:11:38 AM Viewed: 9/17/2025 2:21:02 PM Signed: 9/17/2025 2:21:23 PM Electronic Record and Signature Disclosure: Not Offered via Docusign Kim Sevy kim.sevy@cityofrc.us City Clerk Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 35.151.226.142 Signed using mobile Sent: 9/17/2025 7:37:30 AM Resent: 9/17/2025 2:21:24 PM Viewed: 9/18/2025 1:36:46 PM Signed: 9/18/2025 1:36:59 PM Electronic Record and Signature Disclosure: Accepted: 9/10/2025 11:38:14 AM ID: dde6d2fe-a7d9-42a3-b983-4fbcf5294135 Nicholas Ghirelli NGhirelli@rwglaw.com Shareholder Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 208.87.233.201 Sent: 9/17/2025 7:37:30 AM Resent: 9/18/2025 1:37:00 PM Viewed: 9/18/2025 2:13:34 PM Signed: 9/18/2025 2:13:52 PM Electronic Record and Signature Disclosure: Accepted: 9/18/2025 2:13:34 PM ID: a3702d3b-1fab-4ec5-973d-3716f144f89b In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Certified Delivery Events Status Timestamp City Clerk's Office Review ClerkContracts@cityofrc.us City Clerk City of Rancho Cucamonga Security Level: Email, Account Authentication (None) Using IP Address: 199.201.174.250 Sent: 9/17/2025 7:37:30 AM Viewed: 9/17/2025 8:07:40 AM Electronic Record and Signature Disclosure: Not Offered via Docusign Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 9/17/2025 7:37:30 AM Envelope Updated Security Checked 9/17/2025 8:11:37 AM Envelope Updated Security Checked 9/17/2025 8:11:37 AM Envelope Updated Security Checked 9/17/2025 8:11:37 AM Certified Delivered Security Checked 9/18/2025 2:13:34 PM Signing Complete Security Checked 9/18/2025 2:13:52 PM Completed Security Checked 9/18/2025 2:13:52 PM Payment Events Status Timestamps Electronic Record and Signature Disclosure ELECTRONIC RECORD AND SIGNATURE DISCLOSURE From time to time, City of Rancho Cucamonga City Clerk's Office (we, us or Company) may be required by law to provide to you certain written notices or disclosures. 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