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Title:
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Amend Ordinance S-45119 Authorizing Disposition and Development Agreement with Equus Group, Inc. for Sale and Redevelopment of City-Owned Property at 135 N. 2nd Ave. (Ordinance S-45340)
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Title
Amend Ordinance S-45119 Authorizing Disposition and Development Agreement with Equus Group, Inc. for Sale and Redevelopment of City-Owned Property at 135 N. 2nd Ave. (Ordinance S-45340)
Description
Request to authorize the City Manager, or his designee, to amend terms pertaining to a proposed disposition and redevelopment agreement, and other agreements as necessary (Agreements), with Equus Group, Inc., or its City-approved designee (Developer), for the sale and redevelopment of the Ellis Building at 135 N. 2nd Ave. (Site).
Report
Summary
In November 2018, City Council authorized business terms proposed by the Community and Economic Development Department (CEDD) to enter into Agreements with the Developer to purchase and redevelop the Ellis Building. Following this authorization, the Developer commenced their due diligence work and notified the City that this work could not be completed by the original date to close escrow by Dec. 28, 2018. The Developer requested an extension to close escrow as well as an option to alter the proposed deed restriction for office use. It is CEDD’s position that the Developer has acted in good faith and is making progress toward closing escrow and requests approval to amend the business terms as follows:
On or before Jan. 30, 2019, Developer will transfer to the City a non-refundable earnest money deposit of $25,000.
Escrow shall close on March 1, 2019.
Should Developer be unable to secure tenant leases for office use 36 months following the effective date of the development agreement, the City will amend the 10-year office use deed restriction to allow for a 40 percent reduction of required office use.
All other terms and conditions previously authorized under Ordinance S-45119, other than those amended above, shall remain in full force and effect.
Financial Impact
This action will not impact the General Fund and will require the Developer to provide a portion of the purchase price as an earnest money deposit.
Concurrence/Previous Council Action
The City Council originally approved Ordinance S-45119 on Nov. 7, 2018.
Location
135 N. 2nd Ave.
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Community and Economic Development Department.