2017/07/25 City Council Resolution 2017-095RESOLUTION NO. 2017-095
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
APPROVING A FOURTH AMMENDMENT TO THE AGREEMENT FOR PURCHASE
AND SALE BETWEEN THE CITY OF ROHNERT PARK AND STADIUM RP
DEVELOPMENT PARTNERS LLC AND RELATED ACTIONS
WHEREAS, on August 11, 2015, the City and 356 Advisors, Inc. and MJW Investments, LLC
(the " Initial Buyer Party"), entered into that certain Agreement for Purchase and Sale (Including
Joint Escrow Instructions) and Terms of Development (the "Original Agreement") with respect to
Buyer's purchase and development of that certain real property consisting of 12.25 acres and
located at Labath Avenue and Carlson Avenue in the City of Rohnert Park (the "Property"); and
WHEREAS, on November 2, 2015, City and the Initial Buyer Party entered into a First
Amendment to the Original Agreement to extend the due diligence period an additional 30 days
to allow the buyer time for further analysis; and
WHEREAS, on November 24, 2015, City and the Initial Buyer Party entered into a Second
Amendment to the Original Agreement, as amended, to set forth the terms and conditions of a
modified project that allows for residential development, including a revised Development
Agreement Term Sheet; and
WHEREAS, the Initial Buyer Party subsequently assigned its interests in the Original
Agreement, as amended, to MJW Investments, Inc., who subsequently assigned its interests in
the Agreement to Stadium RP Development Partners, LLC (the "Buyer"); and
WHEREAS, on November 22, 2016, the City and the Buyer entered into a Third Amendment to
the Original Agreement, as amended, to: remove the City' s right to repurchase the Property;
amend the description of the Property to add an additional 0.1 acres; amend Buyer's condition to
close to require a grading permit, rather than a building permit, and a construction deed of trust;
and amend the Development Agreement Term Sheet to set forth the terms by which the Buyer
will construct the Martin Avenue improvements; and
WHEREAS, on January 10, 2017, the City Council approved a Planned Development, Tentative
Map and Development Agreement for the property that entitled a mixed use project including a
hotel, apartment complex, retail center and public park (the "Project"); and
WHEREAS, on January 24, 2017, the City and the Buyer entered into a Development
Agreement that formalized the Buyer's rights and obligations that were initially outlined in the
Purchase and Sale Agreement; and
WHEREAS, the Buyer has been diligently pursing the development of the property including
securing various planning and engineering approvals necessary to subdivide the property and
construct its Project; and
WHEREAS, Buyer and City now desire to amend the Agreement a fourth time in order to allow
the Buyer to purchase the property in two phases, associated with the lots created by its
subdivision in order to provide for the further transfer of the property and construction of the
Project, including transfer to the developer of the hotel portion of the Project; and
WHEREAS, Buyer and City staff have negotiated the form of a Fourth Amendment to Purchase
and Sale Agreement (Including Joint Escrow Instructions) and Terms of Development, attached
hereto as Exhibit A (the "Fourth Amendment").
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rohnert Park
that it does hereby find, determine, declare and resolve as follows:
Section 1. Recitals. The foregoing recitals are true and correct.
Section 2. Approval of the Fourth Amendment. The form of the Fourth Amendment included as
Exhibit A to this Resolution is approved subject to minor modifications approved by the City
Manager and City Attorney.
Section 3. Authority to Execute. The Mayor or his designee is hereby authorized and directed to
execute the Fourth Amendment, in substantially similar form to that attached as Exhibit A.
Section 4. Authority to Implement. The City Manager is hereby authorized and directed to take
all actions necessary to implement the intent of the Purchase and Sale Agreement and its
amendments including executing various documents associated with escrow and closing and
executing various assignments of the Development Agreement, in forms approved by the City
Attorney.
Section 5. Effective Date of Resolution. This Resolution shall take effect immediately upon its
adoption.
DULY AND REGULARLY ADOPTED this 25th day of July, 2017.
CITY OF ROHNERT PARK
Jake Ma4enrie, Mayor
ATTEST:
r
Caitlin Saldanha, Deputy City Clerk
Attachment: Exhibit A
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2017-095
Exhibit A
FOURTH AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE
(INCLUDING JOINT ESCROW INSTRUCTIONS) AND
TERMS OF DEVELOPMENT
This Fourth Amendment to Agreement for Purchase and Sale (Including Joint Escrow
Instructions) and Terms of Development ("Third Amendment"), dated as of
2016 ("Effective Date"), is by and between the CITY OF ROHNERT PARK, a California
municipal corporation ("Seller" or "City"), and STADIUM RP DEVELOPMENT PARTNERS,
LLC, a California limited liability company (the "Buyer").
RECITALS
A. On August 11, 2015, Seller and Buyer's predecessor -in -interest, 356 Advisors,
Inc. and MJW Investments, LLC (the "Initial Buyer Party"), entered into that certain
Agreement for Purchase and Sale (Including Joint Escrow Instructions) and Terms of
Development (the "Original Agreement") with respect to Buyer's purchase and development of
that certain real property consisting of 12.25 acres and located at Labath Avenue and Carlson
Avenue in the City of Rohnert Park (the "Property"). Terms not otherwise defined herein shall
have the meaning set forth in the Agreement, as defined in Recital D. below.
B. On November 2, 2015, City and the Initial Buyer Party entered into a First
Amendment to the Original Agreement to extend the Due Diligence Period an additional 30 days
to allow Buyer time for further analysis (the "First Amendment").
C. On November 24, 2015, City and the Initial Buyer Party entered into a Second
Amendment to the Original Agreement, as amended, to set forth the terms and conditions of a
modified project that allows for residential development, including a revised Development
Agreement Term Sheet (the "Second Amendment").
D. The Initial Buyer Party subsequently assigned its interests in the Agreement to
MJW Investments, Inc., who subsequently assigned its interests in the Agreement to Buyer.
E. On _ , Buyer and City entered into a Third Amendment to
the Original Agreement, as amended, to: (1) remove the City's right to repurchase the Property;
(2) amend the description of the Property to add an additional 0.1 acres; (3) amend Buyer's
conditions to close to require a grading permit, rather than a building permit, and a construction
deed of trust; and (4) amend the Development Agreement Term Sheet to set forth the terms by
which the Buyer will construct the Martin Avenue improvements (the "Third Amendment").
The Original Agreement, as modified by the First, Second and Third Amendments, may be
referred to herein as the "Agreement."
F. Buyer now desires to purchase the Property in two phases. First, the Buyer
desires to purchase that portion of the Property described in Exhibit A -la, attached hereto and
incorporated herein by reference, as the Hotel Property (the "Hotel Property"). Thereafter.
Buyer desires to purchase the remaining portion of the Property described in Exhibit A -lb,
attached hereto and incorporated herein by reference, as the "Retail/Residential Property" (the
"Retail/Residential Property").
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G. The City and Buyer desire to amend the Agreement a fourth time to allow for a
phased closing of the Property, with the Hotel Property to close separately from
Retail/Residential Property.
H. The City Council of the City of Rohnert Park duly authorized the execution of this
Fourth Amendment by resolution adopted on .2017.
AGREEMENT
1. Section 1.3, Purchase Price, is hereby deleted in its entirety and replaced with the
following:
"1.3 Purchase Price. The purchase price for the Property is Seven
Million One Hundred and Fifty Thousand Dollars ($7,150,000.00) ("Purchase
Price"), consisting of One Million Three Hundred Fifty -Four Thousand and Nine
Hundred Twenty -Five Dollars ($1,354,925.00) for the Hotel Property ("Hotel
Purchase Price") and Five Million Seven Hundred Ninety -Five Thousand and
Seventy -Five Dollars ($5,795,075.00) for the Retail/Residential Property
("Retail/Residential Purchase Price"). Each of the Hotel Purchase Price and
Retail/Residential Purchase Price shall be paid to Seller at each of the individual
Closings for the Hotel Property and Retail/Residential Property, respectively, as
defined in Section 6.2(a), in immediately available funds. The Purchase Price
was determined based on a survey of comparable parcels and an evaluation of
potential uses of the Property."
2. Section 1.5, Good Faith Deposits, is hereby deleted in its entirety and replaced with the
following:
"1.5 Good Faith Deposits.
(a) Within three business days of Escrow being opened as
outlined in Section 6.1 of this agreement (Title Company to notify all parties of
the exact date), Buyer shall deliver into escrow a good faith deposit in the amount
of Fifty Thousand Dollars ($50,000.00) ("First Good Faith Deposit"). The First
Good Faith Deposit shall serve as security for the performance of Buyer's
obligations under this Agreement, shall be applied towards the Retail/Residential
Purchase Price at the closing for the Retail/Residential Property and is fully
refundable to Buyer prior to the expiration of the Due Diligence Period (see
Section 3.4). After the Due Diligence Period, the First Good Faith Deposit shall
be nonrefundable and shall constitute liquidated damages to Seller in the event the
purchase and sale is not completed as provided herein.
(b) Within three business days after expiration of the Due
Diligence Period, assuming Buyer approves the Property and elects to proceed,
Buyer shall deliver into escrow a second good faith deposit in the amount of One
Hundred Thousand ($100,000.00) ("Second Good Faith Deposit"). The Second
Good Faith Deposit shall serve as security for the performance of Buyer's
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obligations under this Agreement, shall be applied towards the Retail/Residential
Purchase Price at the closing for the Retail/Residential Property and shall
constitute liquidated damages and be nonrefundable to Buyer. The First and
Second Good Faith Deposits shall be transferred to Seller within three business
day of deposit of the Second Good Faith Deposit into escrow.
(c) Prior to the date that is 18 months after the Effective Date,
Buyer shall deliver into escrow a third good faith deposit in the amount of One
Hundred Fifty Thousand Dollars ($150,000.00) ("Third Good Faith Deposit").
For example, if the Effective Date is August 3, 2015, the Third Good Faith
Deposit shall be delivered on February 3, 2017. The Third Good Faith Deposit
shall serve as security for the performance of Buyer's obligations under this
Agreement, shall be applied towards the Retail/Residential Purchase Price at the
closing for the Retail/Residential Property and shall constitute liquidated damages
and be nonrefundable to Buyer. The Third Good Faith Deposits shall be
transferred to Seller within three business day of its deposit into escrow. The
First, Second and Third Good Faith Deposits may hereafter each be referred to as
a "Good Faith Deposit" or collectively as the "Good Faith Deposits."
After the expiration of the Buyer's Due Diligence Period and Buyer's
acceptance of the condition of the Property, as set forth in Section 3.4, the Good
Faith Deposits may only be returned to Buyer if all Buyer's Conditions Precedent
to Conveyance, as set forth in Section 2.1 have not been satisfied or waived by
Buyer, or Seller is in default under this Agreement following notice and
expiration of applicable cure periods.
Buyer acknowledges that the construction of the Project on the Property is
a material consideration to Seller. Buyer agrees and acknowledges that the Good
Faith Deposits shall be retained by Seller in the event that the Buyer is not
prepared to construct the Hotel.
IN THE EVENT BUYER DEFAULTS IN BUYER'S OBLIGATION TO
SATISFY ALL CONDITIONS PRECEDENT AND PURCHASE THE
PROPERTY WITHIN THE TIME AND IN THE MANNER SPECIFIED IN
THIS AGREEMENT, AND SELLER IS READY, WILLING AND ABLE TO
CLOSE THIS TRANSACTION, SELLER SHALL BE RELEASED FROM ALL
OBLIGATIONS AT LAW OR IN EQUITY TO CONVEY THE PROPERTY TO
BUYER. BUYER AND SELLER AGREE THAT IT WOULD BE
IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE
AMOUNT OF DAMAGES SUFFERED BY SELLER BECAUSE OF SUCH
DEFAULT; THAT THE GOOD FAITH DEPOSITS DEPOSITED INTO
ESCROW BY BUYER CONSTITUTE A REASONABLE ESTIMATE AND
AGREED STIPULATION OF SUCH DAMAGES; THAT SELLER SHALL
RETAIN SUCH SUM AS LIQUIDATED DAMAGES AS ITS SOLE AND
EXCLUSIVE REMEDY IN THE EVENT OF BUYER'S DEFAULT, WAIVING
ANY RIGHT TO SPECIFIC PERFORMANCE OR ANY OTHER REMEDY AT
LAW OR IN EQUITY.
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Seller's Initials Stadium RP Development
Partners, LLC Initials
If this Agreement is not cancelled or terminated, as provided herein, or the Good
Faith Deposits are not retained by Seller as liquidated damages, the Good Faith
Deposits shall be credited against the Retail/Residential Purchase Price at the
closing for the Retail/Residential Property."
3. The following is hereby added to the end of Section 2. 1, Buyer's Conditions Precedent to
Conveyance: "Buyer's Conditions Precedent to Conveyance shall separately apply to each of the
individual Closings of the Hotel Property and the Retail/Residential Property."
4. The following is hereby added to the end of Section 2.1, Seller's Conditions Precedent to
Conveyance: "Seller's Conditions Precedent to Conveyance shall separately apply to each of the
individual Closings of the Hotel Property and the Retail/Residential Property."
5. Section 3.1(k) is hereby deleted in its entirety and replaced with the following: "Each of
the representations and warranties of Seller contained in this Section 3.1 is true as of the
Effective Date, and shall be deemed remade by Seller and shall be true as of the date of each of
the individual Closings. In the event the purchase and sale of the Hotel Property or
Retail/Residential Property closes prior to the closing of the other portion of the Property, the
representations and warranties set forth in this Section 3.1 shall no longer be applicable to the
portion of the Property that has been transferred to Buyer."
6. Section 4.1, Conveyance, is hereby deleted in its entirety and replaced with the following:
"Section 4.1 Conveyances. At each of the individual Closings, Seller
shall convey title to the Hotel Property or Retail/Residential Property, as
applicable, to Buyer by grant deed in a form substantially similar to that attached
hereto as Exhibit C ("Grant Deed"), free of any possession or right of possession
by any person except that of Buyer and subject only to those exceptions approved
by Buyer pursuant to Section 4.2 below."
7. Section 4.3, Title Insurance, is hereby deleted in its entirety and replaced with the
following:
"Section 4.3 Title Insurance. Concurrently with recordation of each of
the Grant Deeds, the Title Company shall issue to Buyer such policy of title
insurance for the Hotel Property or Retail/Residential Property, as applicable,
which at Buyer's option may be an ALTA extended coverage owner's policy
("Title Policy") as may be required by Buyer, and/or Buyer's lenders or other
institutions that may be providing financing for the Project, together with such
endorsements as are reasonably requested by Buyer and/or Buyer's lenders or
other institutions, insuring that Buyer has a valid fee ownership interest in the
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Hotel Property or Retail/Residential Property, as applicable, subject only to the
Permitted Exceptions and other encumbrances expressly contemplated by this
Agreement to be recorded at each of the individual Closings The premium for the
Title Policy, plus any additional costs, including the cost of surveys, and any
endorsements requested by Buyer shall be paid by Buyer."
Section 6.2(a) is hereby deleted in its entirety and replaced with the following:
"(a) "Closing" means the consummation of the purchase and sale of the
Property, including both the Hotel Property and the Retail/Residential Property as
described herein as evidenced by the performance by each party of its obligations
hereunder, including the Title Company's recordation and delivery of each of the
Grant Deeds, delivery of the documents as set forth in this Agreement, Title
Company's irrevocable and unconditional commitment to issue the Title Policy
upon recordation of the Grant Deed, and the payment of the Purchase Price by
Buyer. "Each of the individual Closings" shall refer to each of the separate
phased closings with respect to the Hotel Property and the Retail/Residential
Property."
9. Section 6.3 is hereby deleted in its entirety and replaced with the following:
"Section 6.3 Deposit of Documents.
(a) At or before each of the individual Closings, Seller shall deposit into
escrow the following items:
(1) documentary transfer taxes and Seller's customary share of the
normal prorations;
(2) with respect to the Retail/Residential Property, documentation of a
credit towards the Retail/Residential Purchase Price in the amount of the Good
Faith Deposit;
(3) a duly executed and acknowledged Grant Deed conveying the
Hotel Property or Retail/Residential Property, as applicable, to Buyer;
(4) an executed affidavit pursuant to Section 1445(b)(2) of the Internal
Revenue Code, and on which Buyer is entitled to rely, that Seller is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code;
and
(5) an executed California 597-W Certificate,
(b) At or before each of the individual Closings, Buyer shall deposit into
escrow the following items:
(1) an executed Preliminary Change of Ownership Report; and
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(2) funds necessary to close this transaction, including the Hotel
Purchase Price or Retail/Residential Purchase, adjusted with respect to the
Retail/Residential Purchase Price by a credit towards the Retail/Residential
Purchase Price in the amount of the Good Faith Deposit, any normal prorations,
the Title Policy premium, all escrow fees and recording charges, and all other
closing costs.
Seller and Buyer shall each deposit such other instruments as are reasonably
required by the Title Company or otherwise required to close the escrow and
consummate the purchase and sale transaction in accordance with the terms hereof.
Seller and Buyer hereby designate Title Company as the "Reporting Person" for the
transaction pursuant to Section 6045(e) of the Internal Revenue Code and the regulations
promulgated thereunder and agree to execute such documentation as is reasonably
necessary to effectuate such designation.
(c) Buyer shall be solely responsible for paying the following costs associated
with the transfer of the Hotel Property or Retail/Residential Property, as applicable:
(i) the premium for the Title Policy, including any endorsements; (ii) all escrow fees and
recording charges, (iii) Buyer's customary share of other normal prorations; (iv) all other
closing costs; and (v) all of Buyer's due diligence expenses. Seller shall be solely
responsible for paying the following costs associated with the transfer of the Hotel
Property or Retail/Residential Property, as applicable: (i) documentary transfer taxes and
(ii) Seller's customary share of normal prorations.
(d) Ad valorem taxes and assessments levied, assessed or imposed on the
Property for any period prior to each of the individual Closings, if any, shall be paid by
Seller. Ad valorem taxes and assessments levied, assessed or imposed on the Hotel
Property or Retail Residential Property, as applicable, for the period after each of the
individual Closings shall be paid by Buyer.
(e) The provisions of this Section 6.3 shall survive the Closing."
10. Section 8.14, Termination, is hereby deleted in its entirety and replaced with the
following:
"Section 8.14 Termination. This Agreement may be terminated: (i)
by Buyer, if prior to expiration of Buyer's Due Diligence Period, Buyer elects not
to proceed with purchase of the Property; (ii) by Buyer, if prior to each of the
individual Closings, Buyer's Conditions Precedent to Conveyance have not been
satisfied or waived; (iii) by Seller, if prior to each of the individual Closings,
Seller's Conditions Precedent to Conveyance have not been satisfied or waived;
or (iv) if there is an uncured default, by written notice from the party not in
default. The party wishing to terminate the Agreement must provide the other
party with written notice of termination. In the event of termination by Seller due
to Buyer's failure to satisfy Seller's Conditions Precedent to Closing or Buyer's
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default, the Good Faith Deposits shall be retained by Seller as liquidated
damages."
11. Exhibits A -la, Legal Description of the Hotel Property, attached hereto, is hereby added
to the Agreement and incorporated herein by this reference.
12. Exhibit A -lb, Legal Description of the Retail/Residential Property, attached hereto, is
hereby added to the Agreement and incorporated herein by this reference.
13. Except as hereby amended by this Fourth Amendment, the Agreement, as amended by
the First, Second and Third Amendments, remains in full force and effect.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as
of the Effective Date.
SELLER:
City of Rohnert Park
Dated: 2016 By:
Jake Mackenzie, Mayor
ATTEST:
Lo
APPROVED AS TO FORM:
IM
Michelle Marchetta Kenyon, City Attorney
BUYER:
STADIUM RP DEVELOPMENT PARTNERS, LLC, a
California limited liability corporation
Dated: 2016 By:
Name:
Its:
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Matthew J. Waken
Manager
Exhibit A
EXHIBIT A -la
Legal Description of the Hotel Property
Real property in the City of Rohnert Park, County of Sonoma, State of California,
described as follows:
PROPOSED LOT 3 OF THE FIVE CREEK SUBDIVISION BEING A PORTION OF THE
LANDS OF THE CITY OF ROHNERT PARK AS DESCRIBED IN THAT GRANT DEED
RECORDED AS DOCUMENT 2001-173231 OFFICIAL RECORDS OF SONOMA COUNTY
CALIFORNIA, ALSO BEING A PORTION OF:
LOT 1, AS SHOWN UPON THAT CERTAIN PARCEL MAP ENTITLED "PARCEL MAP
NO. 180", FILED FOR RECORD DECEMBER 11, 2009, IN BOOK 736 OF MAPS, AT
PAGES 30,31 AND 32 SONOMA COUNTY RECORDS, EXCLUDING THE SOUTHERLY
THREE ACRES OF SAID LOT 1.
APN: 143-040-124
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Exhibit A
EXHIBIT A -lb
Legal Description of the Retail/Residential Property
Real property in the City of Rohnert Park, County of Sonoma, State of California,
described as follows:
PROPOSED LOTS 2 AND 4 OF THE FIVE CREEK SUBDIVISION BEING A PORTION OF
THE LANDS OF THE CITY OF ROHNERT PARK AS DESCRIBED IN THAT GRANT
DEED RECORDED AS DOCUMENT 2001-173231 OFFICIAL RECORDS OF SONOMA
COUNTY CALIFORNIA, ALSO BEING A PORTION OF:
LOT 1, AS SHOWN UPON THAT CERTAIN PARCEL MAP ENTITLED "PARCEL MAP
NO. 180", FILED FOR RECORD DECEMBER 11, 2009, IN BOOK 736 OF MAPS, AT
PAGES 30, 31 AND 32 SONOMA COUNTY RECORDS, EXCLUDING THE SOUTHERLY
THREE ACRES OF SAID LOT 1.
APN: 143-040-124
EXHIBIT A -Ib
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