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CITY COUNCIL AGENDA ITEM NO. 2

Meeting Date: December 13, 2005

Subject/Title: Approve a Resolution of the City Council of the City of Brentwood approving an amendment to the Purchase Agreement between the City and R Brothers Concrete for an Extension of the City’s Option to Repurchase period by one hundred twenty (120) days for issuance of Building Permits for site at Sunset Industrial Complex, for a reduction by one hundred twenty (120) days for issuance of a Certificate of Occupancy, and direct staff to take actions and authorize the City Manager to execute documents necessary for the amendment.

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Approve a Resolution of the City Council of the City of Brentwood approving an amendment to the Purchase Agreement between the City and R Brothers Concrete for an Extension of the City’s Option to Repurchase period by one hundred twenty (120) days for issuance of Building Permits for site at Sunset Industrial Complex, for a reduction by one hundred twenty (120) days for issuance of a Certificate of Occupancy, and direct staff to take actions and authorize the City Manager to execute documents necessary for the amendment.

PREVIOUS ACTION
 City Council authorized the purchase of approximately 40 acres of property located at the northeast corner of Tresch and Sunset Roads.

 City Council authorized various consultant contracts to master-plan and prepare environmental documents for approximately 132 acres of city owned land northeast of Tresch and Sunset Roads to include a 49.2 acre Wastewater Treatment Plant, 2.7 acre Solid Waste Plant, 37.7 Sports Park, 13.3 acre Corporation Yard and a 28.4 acre Industrial Complex.

 On April 13, 2004, the City Council approved the form of Purchase Agreements and Grant Deeds for the first phase of 12 sales, and authorized the City Manager to execute documents necessary to close the transactions.

 The escrow with R Brothers Concrete for 1.5 acres at Sunset Industrial Complex closed on July 7, 2004.

BACKGROUND
The Sunset Industrial Complex was an economic development strategy envisioned by the City and Redevelopment Agency to voluntarily relocate members of our business community and surrounding areas to a more appropriate location zoned for light industrial employers. Relocation of industrial employers from areas within the Redevelopment Project Areas received additional points during the purchaser selection process by the Council. R Brothers Concrete is currently located on Lone Tree Way and within the North Brentwood Redevelopment Project Area. They currently employ 40+ employees, and have been a Brentwood business and employer for over 20 years. R Brothers Concrete scored 29 out of 36 points during the Council’s selection process, the fourth highest. R Brother Concrete received the maximum points in four of five scoring categories.

The Purchase Agreements between the City and buyers at Sunset Industrial Complex include a provision (Section 3.01) that allows the City the right, at its option, to repurchase the site if the purchaser fails to obtain building permits for construction of the proposed business operation within eighteen (18) months after the escrow closing date. The Purchase Agreement further provides the City the right, at its option, to repurchase the site if the purchaser fails to obtain a certificate of completion eighteen (18) months after issuance of building permits.

The qualifications and identity of the purchaser are of unique and particular concern to the City, and it is because of such qualifications and identity that the City entered into purchase agreements with the selected purchasers. For that reason, and to encourage timely development while discouraging pure speculation of the properties, the City intentionally added the provision to repurchase the properties should a buyer not perform its obligations outlined by the Purchase Agreement.

R Brothers has submitted a written letter to the City requesting a 120-day extension of the repurchase option. R Brothers Concrete submitted its design review application to the City in mid-October 2005 and has paid the applicable city fees. Their application has been deemed complete in November, and will be scheduled for design review before the Planning Commission shortly. It is unlikely that building permits will be issued for this development prior to January 7, 2006, the deadline for pulling building permits in accordance with Section 3.01 of the Purchase Agreement (July 7, 2004 + 18 months). However, R Brothers Concrete has shown good faith by submitting a complete application and paying city fees. In addition, R Brothers Concrete is a prime example of the type of business that the City envisioned for Sunset Industrial Complex, in addition to voluntarily relocating their primary business from Lone Tree Way.

Staff recommends the Council approve a 120-day extension of Section 3.01 of the Purchase Agreement, the City’s option to repurchase, for R Brothers Concrete, and direct staff to take actions and authorize the City Manager to execute documents necessary to memorialize the extension. This would allow R Brothers until May 7, 2006 to pull their building permits. Staff further recommends that the 18 month period for the certificate of occupancy be reduced by 120 days, thereby allowing 14 months from the building permit issuance to construction completion, keeping the development of this site on course with the other buyers. R Brothers has agreed to this condition.

FISCAL IMPACT
None.

Attachments: Resolution
Amendment No. 1

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AN AMENDMENT TO THE PURCHASE AGREEMENT BETWEEN THE CITY Of BRENTWOOD AND R BROTHERS CONCRETE FOR AN EXTENSION OF THE CITY’S OPTION TO REPURCHASE PERIOD BY ONE HUNDRED TWENTY (120) DAYS FOR ISSUANCE OF BUILDING PERMITS FOR SITE AT SUNSET INDUSTRIAL COMPLEX, FOR A REDUCTION BY ONE HUNDRED TWENTY (120) DAYS FOR ISSUANCE OF A CERTIFICATE OF OCCUPANCY, AND DIRECT STAFF TO TAKE ACTIONS AND AUTHORIZE THE CITY MANAGER TO EXECUTE DOCUMENTS NECESSARY FOR THE AMENDMENT.

WHEREAS, City Council authorized the purchase of approximately 40 acres of property located at the northeast corner of Tresch and Sunset Roads; and

WHEREAS, City Council authorized various consultant contracts to master-plan and prepare environmental documents for approximately 132 acres of city owned land northeast of Tresch and Sunset Roads to include a 49.2 acre Wastewater Treatment Plant, 2.7 acre Solid Waste Plant, 37.7 acre Sports Park, 13.3 acre Corporation Yard and a 28.4 acre Industrial Complex; and

WHEREAS, on April 13, 2004, the City Council approved the form of Purchase Agreements and Grant Deeds for the property sales, and authorized the City Manager to execute documents necessary to close the transactions; and

WHEREAS, the City of Brentwood and R Brothers Concrete entered into a Purchase Agreement, dated January 15, 2004, for the sale and purchase of 1.5 acres at Sunset Industrial Complex; and

WHEREAS, on July 7, 2004 escrow with R Brothers Concrete for 1.5 acres at Sunset Industrial Complex closed; and

WHEREAS, the Purchase Agreement, includes Section 2.06 that states the purchaser shall obtain building permits from the City for the construction or development of any buildings, structures or other work of improvements upon the Site within eighteen (18) months after the close of escrow; and

WHEREAS, the Purchase Agreement includes Section 2.08 that states the purchaser shall request and obtain a certificate of occupancy from the City of Brentwood within eighteen (18) months from City’s issuance of building permits for the construction or development of any buildings, structures or other work of improvement upon the Site; and

WHEREAS, the Purchase Agreement includes Section 3.01 that allows the City the right, at its option, to repurchase the site if the purchaser fails to comply with Section 2.06 and Section 2.08; and

WHEREAS, the Purchase Agreement includes Section 19 that allows the Purchase Agreement to be amended only by written instrument executed by City and Purchaser; and

WHEREAS, the City and R Brothers Concrete desire to amend Section 2.06 to extend the time period for the issuance of a building permit by 120 days, amend Section 2.08 to reduce the time period for the issuance of a certificate of occupancy by 120 days, and amend Section 3.01 accordingly.

NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Brentwood approves Amendment No. 1 to the Purchase Agreement and City’s Option to Repurchase with R Brothers Concrete and authorizes the City Manager to execute documents necessary for this transaction; and

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 13th day of December 2005 by the following vote:

Amendment No. 1 to Purchase Agreement and City’s Option to Repurchase
(Rudy Salinas and Reuben Salinas- R Brothers Concrete)

This Amendment No. 1 is entered into and effective as of the ____ day of ___________ 2005, amending the Purchase Agreement and City’s Option to Repurchase dated January 15, 2004 (the “Agreement”) by and between the City of Brentwood, a municipal corporation, (“City”), and Rudy Salinas and Reuben Salinas (“Purchaser”) (collectively, the “Parties”) for the purchase and option to repurchase certain real property situated in the City of Brentwood.

Recitals

A. The Parties desire to amend the Agreement to reduce the amount of time required to obtain a certificate of occupancy by four (4) months to keep the development of the site on course with other buyers.

B. The Parties have reached agreement on specific language for the exhibit and desire to memorialize this agreement.

Now, therefore it is agreed as follows:

1. That the third paragraph of Section 2.06 of the Agreement is hereby amended in its entirety to read as follows:

The Purchaser shall obtain building permits from the City for the construction or development of any buildings, structures or other work of improvement upon the Site within twenty-two (22) months after the Closing Date. Failure to obtain a building permit within twenty-two (22) months after the Closing Date shall trigger the City’s option to repurchase the Site. A reasonable extension of time may be granted by the City to Purchaser if Purchaser has submitted an application to another governmental agency other than the City that is required to issue a permit for the proposed Business Operation on the Site and Purchaser has submitted all required information and the governmental agency has not issued a required permit.

2. That the first paragraph of Section 2.08 of the Agreement is hereby amended in its entirety to read as follows:

2.08 Certificate of Completion. The Purchaser shall request and obtain a Certificate of Occupancy (“Certificate”) from the City within fourteen (14) months from City’s issuance of building permits for the construction or development of any buildings, structures or other work of improvement upon the Site. Failure to request and obtain a Certificate within fourteen (14) months from City’s issuance of building permits for the Site shall trigger the City’s option to repurchase the Site. Should a multi-phased development be approved by the City during the Site’s entitlement process, a Certificate from the City for the first phase of a multi-phased development of the Business Operation on the Site will satisfy this requirement. A certificate from the City shall be a conclusive determination of satisfactory completion of construction as required by this Purchase Agreement upon the Site or the applicable portion thereof and full compliance with the terms hereof as to the Site or applicable portion thereof.
3. That Sections 3.01 (a) and (b) of the Agreement are hereby amended in their entirety to read as follows:

a. Purchaser fails to obtain building permits from the City for the construction of the improvements on the Site within twenty-two (22) months after the Closing Date, pursuant to Section 2.06 herein, without prior written consent for a reasonable extension of time granted by the City;

b. Purchaser fails to obtain a Certificate from the City for the completion of the improvements on the Site within fourteen (14) months from City’s issuance of building permits for said improvements, pursuant to Section 2.08 herein, without prior written consent for a reasonable extension of time granted by the City; or

4. All other provisions of the Agreement will remain in full force and effect.

5. The individuals executing this Amendment No. 1 and the instruments referenced in it on behalf of Purchaser represent and warrant that they have the legal power, right and actual authority to bind Purchaser to the terms and conditions of this Amendment No. 1.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed by their respective representatives thereunto duly authorized.

CITY OF BRENTWOOD PURCHASER

Donna Landeros, City Manager

ATTEST:

Margaret Wimberly, City Clerk

APPROVED AS TO FORM:

Damien B. Brower, City Attorney
 

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