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Current Council Agenda and Past Meeting Information

 

CITY COUNCIL AGENDA ITEM NO. 4

Meeting Date: July 25, 2006

Subject/Title: Approve the Purchase Agreement and Grant Deed for the sale of property located at 2010 Elkins Way at Sunset Industrial Complex and authorize City Manager or her designee to execute Purchase Agreement and Grant Deed to convey City-owned property.

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Approve a resolution approving the following actions: (1) approve the Purchase Agreement and Grant Deed attached for the sale of City-owned property at 2010 Elkins Way and identified as APN 018-200-020 located in the Sunset Industrial Complex; and (2) authorize the City Manager or her designee to execute the Purchase Agreement and Grant Deed for 2010 Elkins Way, hereby conveying real property on behalf of the City to Kevin Vornhagen or his designee, and to execute such other documents as may be needed to complete the transactions.

PREVIOUS ACTION

• City Council authorized the purchase of approximately 40 acres of property located at the northeast corner the Tresch and Sunset Roads to master-plan an expansion of the Sunset Sports Park and to create the Sunset Industrial Complex.

• Since April 2004, fifteen escrows have closed at Sunset Industrial Complex.

• On December 13, 2005, the City Council authorized staff to exercise the City’s option to repurchase 2010 Elkins Way at Sunset Industrial Complex owned by Pottery World following the expiration of the building permit issuance deadline.

• In March 2006, the City closed escrow for 2010 Elkins Way and is currently the owner.

• On April 25, 2006, the Council approved the sales price, the method to select the buyer and adopted a sales strategy to sell 2010 Elkins Way, located in SubArea A.

• During May and June 2006, City staff mailed 51 sales offerings and advertised the availability of the parcel twice in a local newspaper. Three purchase proposals were received, scored and ranked.

• On June 20, 2006, the Economic Development/Redevelopment Subcommittee met to review the purchase proposal rankings and recommended Vornhagen as the successful candidate to purchase 2010 Elkins Way.

• On July 11, 2006, the Council selected Vornhagen Body & Paint as the buyer for 2010 Elkins Way.
BACKGROUND
The City purchased the 40-acre parcel off Sunset Road in 1999 for the expansion of the adjacent sports complex, and to implement an economic development strategy by zoning the remaining acres for industrial land use. The City intends to sell parcels within the Sunset Industrial Complex to end users. The sale revenues to the City will be then used to reimburse the City for its land and development costs, and to reimburse the Agency for paying a portion of the improvement costs. Therefore, both the City and the Agency expect to receive full reimbursement for their out-of-pocket costs associated with developing the Sunset Industrial Complex as parcels are sold. Any excess receipts from the proceeds of the sales beyond the actual costs shall be shared between the City and Agency in amounts equitable to their contributions.

At its meeting of July 11, 2006, the Council selected Kevin Vornhagen, owner of Vornhagen Body & Paint, as the buyer for 2010 Elkins Way. The Purchase Agreement and Grant Deed for this sale are attached. Mr. Vornhagen has executed the Purchase Agreement and submitted the appropriate security deposit. Escrow has been opened at North American Title. Prior to close of escrow, Mr. Vornhagen is required to provide the City with evidence of financial capability necessary to acquire the site and to complete construction of the improvements for his business operation. Mr. Vornhagen and City have canceled the escrow at 385 Carrol Court.

The necessary benefit districts have been recorded for the subdivision, including CCRs, LLD, and CFD. This parcel is ready for delivery to Mr. Vornhagen upon his completion of conditions required by the Purchase Agreement.

FISCAL IMPACT
The sale proceeds of 2010 Elkins Way at $653,400, less escrow fees, will first be distributed to the Redevelopment Agency to reimburse it for the repurchase of 2010 Elkins Way from Pottery World, including but not limited to the purchase price, appraisal, and escrow fees. The remaining proceeds will then be shared between the City and Agency in accordance with their Reimbursement Agreement.

Attachments: Resolution
Grant Deed
Purchase Agreement

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING THE FOLLOWING ACTIONS (1) APPROVE THE PURCHASE AGREEMENT AND GRANT DEED USED FOR THE SALE OF CITY-OWNED PROPERTY KNOWN AS 2010 ELKINS WAY AT SUNSET INDUSTRIAL COMPLEX, AND IDENTIFIED AS APN 018-200-020; AND (2) AUTHORIZE THE CITY MANAGER OR HER DESIGNEE TO EXECUTE THE PURCHASE AGREEMENT AND GRANT DEED FOR 2010 ELKINS WAY, HEREBY CONVEYING REAL PROPERTY ON BEHALF OF THE CITY TO KEVIN VORNHAGEN, OR HIS DESIGNEE AND TO EXECUTE SUCH OTHER DOCUMENTS AS MAY BE NEEDED TO COMPLETE THE TRANSACTIONS.

WHEREAS, City Council of the City of Brentwood (“City Council”) authorized the purchase of approximately 40 acres (±) of property located at the northeast corner of Tresch and Sunset Roads (“Site”) to master-plan an expansion of the Sunset Sports Park and to create the Sunset Industrial Complex; and

WHEREAS, the City Council implemented an economic development strategy by rezoning a portion of the Site for industrial land uses to encourage expansion of local industrial opportunities, to create high-paying jobs within the community, to achieve the greatest return on the City investment, and to maximize the leveraging of tax increment; and

WHEREAS, in September 2001, the Redevelopment Agency of the City of Brentwood (“Agency”) issued Tax Allocation Bonds (TAB) to refinance existing bonds and to pay for certain redevelopment and public improvement projects. One of the three top projects identified by the Agency included funding the infrastructure improvements at the Sunset Industrial Complex with TAB proceeds; and

WHEREAS, on June 4, 2002, the Planning Commission certified the Environment Impact Report for the Sunset Industrial Complex, and on June 6 the Notice of Determination was filed with the County; and

WHEREAS, on August 13, 2002, the City and Agency approved a Reimbursement Agreement wherein the Agency would loan $3,000,000 to the City for infrastructure improvements at Sunset Industrial Complex (CIP No. 336-3128); and

WHEREAS, on November 26, 2002 the City Council approved a sales strategy for property located at the Sunset Industrial Complex and adopted criteria for the selection of successful candidates to purchase the subject property, and

WHEREAS, on November 25, 2003, the City and Agency approved resolutions amending the Reimbursement Agreement between the City and Agency for an additional $728,000 to fund construction of cul-de-sac improvements and traffic signal improvements for the Sunset Industrial Complex; and

WHEREAS, on April 2, 2004, the City recorded the Final Map for Subdivision 8588, Sunset Industrial Complex; and

WHEREAS, on June 7, 2004, the City recorded the Final Map for Subdivision 8842, Sunset Industrial Complex; and

WHEREAS, on May 12, 2005, the City recorded Minor Subdivision Map MS 360-04 for the northerly portion of Sunset Industrial Complex; and

WHEREAS, since April 2004, fifteen escrows have closed at Sunset Industrial Complex; and

WHEREAS, on December 13, 2005, the City Council authorized staff to exercise the City’s option to repurchase 2010 Elkins Way at Sunset Industrial Complex owned by Pottery World following the expiration of the building permit issuance deadline; and

WHEREAS, in March 2006, the City closed escrow for 2010 Elkins Way; and

WHEREAS, on April 25, 2006, the Council approved the sales price, the method to select the buyer and adopted a sales strategy to sell 2010 Elkins Way, located in SubArea A; and

WHEREAS, during May and June 2006, City staff mailed 51 sales offerings and advertised the availability of the sale of 2010 Elkins Way twice in the local newspaper, and three proposals were received, scored and ranked; and

WHEREAS, on June 20, 2006, the Economic Development/Redevelopment Subcommittee met to review the purchase proposal rankings; and

WHEREAS, on July 11, 2006, the City Council selected Kevin Vornhagen, owner of Vornhagen Body & Paint (“Vornhagen”), as the buyer for 2010 Elkins Way; and

WHEREAS, the Purchase Agreement and Grant Deed between the City of Brentwood and Vornhagen has been developed and is necessary to convey property from the City of Brentwood to Vornhagen.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood

1. Authorizes the sale of City-owned property at 2010 Elkins Way at Sunset Industrial Complex, and identified as APN 018-200-020 to Kevin Vornhagen.

2. Approves the Purchase Agreement and Grant Deed for the sale of 2010 Elkins Way.

3. Authorizes the City Manager or her designee to execute the Purchase Agreement and Grant Deed for 2010 Elkins Way hereby conveying real property on behalf of the City of Brentwood to Kevin Vornhagen, or his designee and to execute such other documents as may be needed to complete the transactions.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 25th day of July 2006 by the following vote:

RECORDING REQUESTED BY:
City of Brentwood
City Clerk
150 City Park Way
Brentwood, CA 94513

WHEN RECORDED MAIL TO:
City of Brentwood
City Clerk
150 City Park Way
Brentwood, CA 94513

SPACE ABOVE THIS LINE FOR RECORDERS USE

MAIL TAX STATEMENTS TO:
SAME AS ABOVE
EXEMPT PURSUANT TO
REVENUE TAX CODE 11922
APN 018-200-020
Project: Sunset Industrial Complex
GRANT DEED

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, CITY OF BRENTWOOD, A MUNICIPAL CORPORATION, (Grantor) hereby grant(s) to KEVIN VORNHAGEN
(Grantee) the real property in the City of Brentwood, County of Contra Costa, State of California, described as

EXHIBIT “A” ATTACHED HERETO AND MADE A PART HEREOF.

Prohibition of Further Subdivision. The Grantee covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns and all persons claiming under or through them, as a covenant running with the land, that no application will be submitted to the City of Brentwood to further subdivide the real property described in Exhibit A, attached hereto and made a part hereof, for a period of ten (10) years from the recordation of this Grant Deed. This warranty extends to future owners or parties with rights or interest in the real property for a period of ten (10) years from the date of recordation of this Grant Deed. The City of Brentwood acknowledges that it shall not consider approval of an application to subdivide the real property for a period of ten (10) years from the recordation of this Grant Deed.

Option to Repurchase. For good and valuable consideration, Grantor and Grantee have entered into a Purchase Agreement and City’s Option to Repurchase dated July 25, 2006, wherein the Grantee has agreed to grant the Grantor an option to repurchase the real property described in Exhibit A. The City shall have the right, at its option, to repurchase the real property during the Option to Repurchase Period. The City’s option to repurchase the real property shall terminate upon issuance of a Certificate from the City which shall be conclusive determination of satisfactory completion of construction of the improvements for the Business Operation on the real property.

Dated: __________________ GRANTOR:
CITY OF BRENTWOOD,
A MUNICIPAL CORPORATION
__________________________________
Donna Landeros, City Manager

EXHIBIT A
Legal Description of Site

PARCEL ONE:

LOT 11, AS SHOWN ON THAT CERTAIN MAP ENTITLED TRACT 8588, SUNSET INDUSTRIAL COMPLEX, RECORDED APRIL 2, 2004, IN BOOK 462 OF MAPS, AT PAGES 35-45, IN THE OFFICE OF THE COUNTY RECORDER OF CONTRA COSTA COUNTY.

EXCEPTING THEREFROM:

ALL OIL, GAS, CASINGHEAD GAS, ASPHALTUM, AND OTHER HYDROCARBONS, AND ALL CHEMICAL GAS, NOW AND HEREAFTER FOUND LYING MORE THAN FIVE HUNDRED FEET (500’) BELOW THE SURFACE OF SAID REAL PROPERTY, TOGETHER WITH THE RIGHT TO SLANT DRILL FOR AND REMOVE ALL OR ANY OF SAID OIL, GAS, CASINGHEAD GAS, ASPHALTUM AND OTHER HYDROCARBONS AND CHEMICAL GAS LYING BELOW A DEPTH OF MORE THAN FIVE HUNDRED FEET (500’) BELOW THE SURFACE OF SAID REAL PROPERTY; BUT WITHOUT ANY RIGHT WHATSOEVER TO ENTER UPON THE SURFACE OF SAID REAL PROPERTY OR UPON ANY PART OF SAID LANDS WITHIN FIVE HUNDRED FEET (500’) VERTICAL DISTANCE BELOW THE SURFACE OF SAID REAL PROPERTY, AS RESERVED IN THE DEED FROM RONALD ELLIS NUNN, ETAL RECORDED JANUARY 15, 1999, INSTRUMENT NO. 99-12522.

EXCEPTING THEREFROM ALL OIL, GAS, PETROLEUM AND OTHER HYDROCARBON SUBSTANCES, AND MINERALS IN, UNDER OR RECOVERABLE FROM THE PORTION OF SUBSURFACE OF THE LAND LYING BELOW A PLANE PARALLEL TO AND 500 FEET VERTICALLY BELOW THE SURFACE OF SAID LAND; AND THE RIGHT TO REMOVE THEREFROM SUCH OIL AND MINERALS FROM SAID SUBSURFACE SUBJECT TO AND COMPLYING WITH ALL APPLICABLE LAWS, INCLUDING LAWS OF THE CITY OF LAND LYING ABOVE A DEPTH OF 500 FEET FROM THE SURFACE. THE RIGHTS RESERVED HEREIN DO NOT AND SHALL NOT INCLUDE THE RIGHT TO ENTER UPON THE SURFACE OF SAID LAND OR ANY PORTION HEREOF LYING ABOVE A PLANE PARALLEL TO 500 FEET VERTICALLY BELOW THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FROM GEORGE STANLEY NUNN JR. & MEREDITH FITZGERALD NUNN RECORDED JANUARY 15, 1999, INSTRUMENT NO. 99-12523.

RESERVING TO THE GRANTOR ALL INTEREST IN SUBSURFACE WATER RIGHTS WITH NO RIGHT OF SURFACE ENTRY.

ALSO RESERVING THEREFROM, A NON-EXCLUSIVE EASEMENT FOR JOINT ACCESS APPURTENANT TO AND FOR THE BENEFIT OF LOT 10, OF SAID MAP OF SUBDIVISION 8588 OVER THAT PORTION DESCRIBED AS FOLLOWS:

BEING A PORTION OF LOT 11, AS SAID LOT 11 IS SHOWN AND SO DESIGNATED ON THE OFFICIAL MAP OF SUBDIVISION 8588, RECORDED APRIL 2, 2004, IN BOOK 462 OF MAPS AT PAGE 35, IN THE OFFICE OF THE COUNTY RECORDER OF CONTRA COSTA COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHWESTERN CORNER OF SAID LOT 11;

THENCE, FROM SAID POINT OF BEGINNING, ALONG THE NORTHERN LINE OF SAID LOT 11, NORTH 89º 46’ 00” EAST 65.00 FEET;

THENCE, LEAVING SAID NORTHERN LINE, SOUTH 00º 14’ 00” EAST 20.00 FEET;

THENCE, SOUTH 89º 46’ 00” WEST 65.00 FEET TO A POINT ON THE WESTERN LINE OF SAID LOT 11;

THENCE, ALONG SAID WESTERN LINE, NORTH 00º 14’ 00” WEST 20.00 FEET TO SAID POINT OF BEGINNING.

PARCEL TWO:

A NON-EXCLUSIVE EASEMENT FOR JOINT ACCESS OVER A PORTION OF LOT 19, AS SHOWN ON THE MAP OF SUBDIVISION 8842, FILED JUNE 7, 2004, IN BOOK 465 OF MAPS, PAGES 32-38, CONTRA COSTA COUNTY RECORDS, DESIGNATED “40’ JOINT ACCESS EASEMENT” ON SAID MAP.

PURCHASE AGREEMENT
AND CITY’S OPTION TO REPURCHASE

THIS PURCHASE AGREEMENT AND CITY’S OPTION TO REPURCHASE (“Purchase Agreement”) is made as of _____________, 2006 between CITY OF BRENTWOOD, a municipal corporation, (“City”) and KEVIN VORNHAGEN (“Purchaser”).

RECITALS

A. City is the owner of certain real property situated in Contra Costa County, California, commonly known as the Sunset Industrial Complex (“Property”) which is zoned for various industrial uses as specifically defined in Planned Development Zone 56; and

B. Purchaser is the owner of Vornhagen Body & Paint (“Business Operation”); and

C. The City wishes to sell and Purchaser wishes to purchase a two (2.) acre parcel of the Property (“Site”) as part of the Planned Development Zone 56, SubArea A, as described in the Legal Description attached as Exhibit A and incorporated herein by reference, to locate Purchaser’s Business Operation, as described in Purchase Proposal attached as Exhibit B and incorporated herein by reference; and

D. Purchaser has agreed to purchase the Site for the consideration provided and under the specific terms in this Purchase Agreement and subject to City’s option to repurchase the Site.

AGREEMENT

For good and valuable consideration as stated below, the parties agree as follows:

Section 1. Purchase and Escrow

1.01 Good Faith Deposit. The Purchaser has, prior to the execution of this Purchase Agreement by the City, delivered to the City a deposit of cash or certified check satisfactory to the City in the amount of Sixty Five Thousand Three Hundred Forty Dollars ($65,340.00) (the “Deposit”) as security for the performance of the obligations of the Purchaser under the terms and conditions of this Purchase Agreement. Upon execution of this Purchase Agreement by Purchaser, the Deposit becomes non-refundable unless this Purchase Agreement is terminated by the Purchaser as a direct result of the City’s failure to perform any provision of this Purchase Agreement. The non-refundability of the Deposit is contingent on a fair market appraisal sufficient for the Purchaser’s lender.

The City shall be under no obligation to pay or earn interest on the Deposit.

Purchaser and City agree that City’s economic detriment if Purchaser defaults hereunder and Purchaser’s default results in the termination of this Purchase Agreement is impracticable or extremely difficult to ascertain. Accordingly, Purchaser and City agree that the Deposit is a reasonable estimate of City’s damages if Purchaser defaults and Purchaser’s default results in the termination of this Purchase Agreement. Purchaser agrees to pay such Deposit to City as liquidated damages and not as a penalty if Purchaser defaults hereunder and Purchaser’s default results in the termination of this Purchase Agreement. If this Purchase Agreement is terminated on account of Purchaser’s default, Purchaser and City hereby instruct and agree that the Deposit, together with all interest accrued thereon, if any, shall be promptly retained by
City.

If the City is in default with respect to any material provision of this Purchase Agreement, upon termination of the Purchase Agreement by the Purchaser, the Deposit shall be promptly returned to the Purchaser by the City.

The Deposit shall be applied to the Purchase Price at the close of escrow.

1.02 Purchase Price. In accordance with and subject to all the terms, covenants and conditions of this Purchase Agreement, the City agrees to sell, and the Purchaser agrees to purchase for construction of improvements for Business Operation, the Site for the sum of Six Hundred Fifty Three Thousand Four Hundred Dollars ($653,400) (the “Purchase Price”) to be paid in cash at close of escrow.

1.03 Escrow. The City has opened an escrow with North American Title Company, as escrow agent (the “Escrow Agent”) in Brentwood, California. The date of opening of escrow (“Opening Date’) is the date the City deposited the Deposit with the Escrow Agent. The close of escrow shall mean the recordation of the grant deed (“Closing Date”). The Closing Date shall occur on or before July 25, 2007.

If this escrow has not closed within the time herein prescribed, and Purchaser and City have not agreed in writing to extend the escrow period, then upon written notice to Escrow Agent by Purchaser or City to terminate this escrow, and subject to City’s rights under Section 3 hereto, Escrow Agent is instructed, without liability therefore, to cancel and terminate this escrow and to forward all funds to City and documents held by Escrow Agent to the party depositing the same.

This Purchase Agreement constitutes the joint escrow instructions of the City and the Purchaser. The City and Purchaser shall provide such additional escrow instructions as shall be necessary and consistent with this Purchase Agreement. The Escrow Agency is hereby empowered to act under this Purchase Agreement and shall carry out its duties as Escrow Agent hereunder.

The City has deposited the Deposit with the Escrow Agent. The Purchaser shall be required to deposit with the Escrow Agent the Purchase Price for the Site, less the Deposit already in escrow. The Purchaser shall also pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the Purchaser of the amount of such fees, charges and costs, prior to the Closing Date:

1. One-half the escrow fee;
2. The premium for a C.L.T.A. standard title insurance policy and all other premiums for title insurance or special endorsements requested by Purchaser;
3. Any state, county or city documentary transfer tax;
4. Any ad valorem taxes and assessments, if any, upon the Site imposed after conveyance of title; and
5. Any and all other local customary fees and costs normally chargeable to a buyer.

The City shall timely and properly execute, acknowledge and deliver a deed conveying title to the Site to the Purchaser. The City shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the City of the amount of such fees, charges and costs, prior to the Closing Date:

1. Costs necessary to place the title to the Site in condition for conveyance;
2. One-half the escrow fee;
3. Recording fees;
4. Notary fees;
5. Any ad valorem taxes and assessments, if any, upon the Site for any time prior to conveyance of title; and
6. Any and all other local customary fees and costs normally chargeable to a seller.

Upon completion of the obligations by City and Purchaser, the Escrow Agent shall record such deeds and documents when title in fact can be vested in the Purchaser in accordance with the terms and provisions of this Purchase Agreement. The Escrow Agent shall buy, affix and cancel any transfer stamps required by law and pay any transfer tax as required by law. The Escrow Agent is authorized to:

1. Pay and charge the City and Purchaser for any fees, charges and costs payable under this Section 1.03. Before such payments are made, the Escrow Agent shall notify the City and Purchaser of the fees, charges and costs necessary to clear title and close the escrow;
2. Collect and disburse funds, deliver the Purchase Price to the City, deliver a title insurance policy to the Developer, and deliver the deed and other documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by the City and the Purchaser; and
3. Record any instruments delivered through this escrow, to vest title in the Purchaser in accordance with the terms and provisions of this Purchase Agreement.

Any amendment of these escrow instructions shall be in writing and must be signed by both the City and the Purchaser.

All communications from the Escrow Agent to the City or the Purchaser shall be directed to the addresses and in the manner established in Section 7 of this Purchase Agreement for notices, demands and communications.

City nor the Purchaser shall be liable for any real estate commissions or brokerage fees that may arise herefrom. The City and Purchaser each represent that neither has engaged any broker, agent or finder in connection with this transaction and agree to indemnify and hold harmless the other from liability from any broker or agent claiming a fee therefrom.

Section 2. Terms and Conditions

The City and Purchaser hereby agree to the following terms and conditions:

2.01 Grant Deed. The City shall take all steps necessary for City Council approval for the execution of a grant deed to convey the Site from the City to Purchaser, and City shall deposit the grant deed for the Site with the Escrow Agent.

2.02 City Responsibilities. The City has prepared and taken all steps necessary for submittal of the necessary applications, has received necessary tentative and final map approvals for the Property and Site, recorded the approved Final Maps for the Property and Site, and created a legal description for the Site.

The City has established and recorded the necessary benefit assessment districts, including covenants, conditions and restrictions (“CCRs”), and assessment districts (lighting, landscaping, parks and community facilities), for the Property and Site as appropriate.

The City has paid the adopted agricultural mitigation fee at the time of recordation of the Final Maps.

The City has completed installation of the public infrastructure improvements, which includes roadway, water, sewer, storm drain, joint trench, landscaping on Sunset Road, sidewalk, curb, gutter and utility stubs at the Site. City makes no guarantee for and has no responsibility for installation of or to provide service to the Site for natural gas, electric, cable and phone. No curb cuts for additional driveways are allowed at Site. The only driveway allowed for Site is a joint access driveway shared with the property immediately to the north, located on the northwest corner of Site and accessed from Elkins Way. Curb cut for the joint access driveway for the Site is expressly excluded from City responsibility and shall be the responsibility of Purchaser.

2.03 Purchaser Responsibilities. Purchaser agrees to be part of the Lighting and Landscaping District 02-12, Community Facility District No. 2, Park District 98-1, Covenants, Conditions and Restrictions for Sunset Industrial Complex, and any other assessment and benefit districts as recorded for the benefit of the Property.

Purchaser shall install and maintain the landscaping on City right-of-way and easement (“Easement”) adjacent to the parcel on Elkins Way, and shall enter into a landscaping maintenance and license agreement (“License Agreement”) with the City for the continued maintenance of Easement. The License Agreement shall be executed by Purchaser and delivered to City prior to Closing Date. Execution of the License Agreement by the Purchaser will result in a commensurate decrease in the annual fair share costs of the Lighting and Landscaping District 02-12.

Purchaser shall be required to repair, to the satisfaction of the City, damage caused during construction of the Site to the City’s existing irrigation lines on Elkins Way and Sunset Road, and damage caused during construction of the Site to City’s landscaping improvements on Sunset Road.

Purchaser shall be responsible for the curb cut for the joint access driveway for the Site, located on northwest corner of Site and accessed from Elkins Way.

Purchaser shall be responsible for coordinating directly with utility providers, such as natural gas, electric, cable and phone, for specific requirements of the Site development.

2.04 Condition of Site. The City shall deliver to Purchaser a rough graded, unimproved, buildable parcel. Existence of weeds or vegetation growth shall not render the Site undeliverable.

2.05 Submission of Evidence of Equity Capital and Mortgage Financing. The Purchaser shall provide to the City, not later than thirty (30) days prior to the Closing Date, evidence of equity capital and mortgage financing commitments (“Capital Capability”) necessary to acquire the Site and complete construction of the improvements for the Business Operation on the Site in a form acceptable to the City. The City shall approve or disapprove the Purchaser’s evidence of Capital Capability within ten (10) business days after receipt thereof by the City.

2.06 Prohibition of Further Subdivision. The Purchaser covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns and all persons claiming under or through them, as a covenant running with the land, that no application will be submitted to the City to further subdivide the Site for a period of ten (10) years from the Closing Date for the Site. This warranty extends to future owners or parties with rights or interest in the Site for a period of ten (10) years from the date of Closing Date for the Site. The City acknowledges that it shall not consider approval of an application to subdivide the Site for a period of ten (10) years from the Closing Date for the Site.

2.07 City and other Governmental Agency Permits. Before commencement of construction or development of any buildings, structures, or other work of improvement upon the Site, the Purchaser shall, at its own expense, secure or cause to be secured any and all development approvals and permits, that may be required by the City or any other governmental agency affected by such construction, development or work. Commencement of construction is defined as having a signed contract with and mobilization of a contractor.

The Purchaser shall, at its own expense, pay any and all City application and development fees, building permit fees and other government agency fees for the construction or development of any buildings, structures or other work of improvement upon the Site, including all dry and wet utilities.

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 eighteen (18) months after the Closing Date. Failure to obtain a building permit within eighteen (18) 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.

2.08 Cost of Construction of Improvements. The cost of construction and development of the Site and constructing all improvements thereon shall be fully borne by the Purchaser.

2.09 Certificate of Completion. The Purchaser shall request and obtain a Certificate of Occupancy (“Certificate”) from the City 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. Failure to request and obtain a Certificate within eighteen (18) 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 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.

The City shall not unreasonably withhold any Certificate. If the City refuses or fails to furnish a Certificate for the Site after written request from the Purchaser, the City shall, within sixty (60) business days after receipt of such written request, provide the Purchaser with a written statement of the reasons the City refused or failed to furnish a Certificate. This statement shall also contain the City’s opinion of the action the Purchase must take to obtain a Certificate. If the City shall have failed to provide such written statement within said sixty (60) business days, the Purchaser shall be deemed entitled to the Certificate.

Such Certificate shall not constitute evidence of compliance with or satisfaction of any obligation of the Purchaser to any holder of a mortgage or any insurer of a mortgage securing money loaned to finance the improvements or any part thereof. Such Certificate is not notice of completion as referred to in California Civil Code Section 3093.

2.10 Prohibition Against Transfer of Site, the Buildings or Structures Thereon and Assignment of Agreement. The qualifications and identify of the Purchaser are of unique and particular concern to the City, and it is because of such qualifications and identity that the City has entered into this Purchase Agreement with the Purchaser. This Purchase Agreement may be terminated by the City prior to the Closing Date if there is any significant change (voluntary or involuntary) in the ownership, membership, management or control of the Purchaser.

After execution of this Purchase Agreement by the parties and prior to the issuance by the City of a Certificate pursuant to Section 2.08 (“Option to Repurchase Period”), the Purchaser shall not, except as expressly permitted by this Purchase Agreement, sell, transfer, convey, or assign the whole or any part of the Site or the buildings or improvements thereon without the prior written approval of the City. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Site or to prohibit or restrict the leasing of any unit when said improvements are completed. Sale, transfer, conveyance or assignment of the whole or any part of the Site or the buildings or improvements thereon by the Purchaser without the prior written approval of the City shall trigger the City’s option to repurchase the Site.

2.11 Use of Site. Purchaser covenants and agrees for itself that during construction and for a period of three (3) years from the date of issuance of the Certificate of Completion, the Purchaser shall devote the Site to the Business Operation and uses(s) specified in the Purchaser’s Purchase Proposal dated March 8, 2006, attached hereto as Exhibit B and incorporated herein by this reference. Purchaser further covenants and agrees that Business Operation shall not be re-established at or operated from (insert address of current location if business is Brentwood business) during the period of three (3) years from the date of issuance of the Certificate of Completion.

Section 3. Consideration for City’s Option to Repurchase Site

3.01 Option to Repurchase. Purchaser hereby acknowledges consideration for the City’s option to repurchase the Site. The City shall have the right, at its option, to repurchase the Site during the Option to Repurchase Period if:

a. Purchaser fails to obtain building permits from the City for the construction of the improvements on the Site within eighteen (18) 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 eighteen (18) 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
c. Purchaser sells, assigns, disposes or transfers, the whole or any portion of or any interest in the Site or the buildings or improvements thereon, after execution of this Purchase Agreement by the parties and prior to the issuance by the City of a Certificate pursuant to Section 2.09 herein, without the prior written consent of the City.

To exercise its right to repurchase, the City shall pay to Purchaser in cash or other valuable consideration:

a. The Purchase Price of the Site, plus
b. The value of the fixed real estate improvements existing on the Site at the time of repurchase, based on a fair market appraisal, less
c. Any liens on the Site and any unpaid assessments, less
d. At the option of the City, the cost to return the Site to its original condition should improvements, at the sole discretion of the City, be detrimental to the re-use and re-sale of the Site.

The City’s option to repurchase the Site shall terminate upon issuance of a Certificate from the City which shall be conclusive determination of satisfactory completion of construction of the improvements for the Business Operation on the Site or the applicable phased portion thereof as required by this Section 3. 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 certificate of completion of the improvements for the Business Operation on the Site and Purchaser has submitted all required information and the governmental agency has not issued a required certificate of completion.

Section 4. Representations and Warranties

City warrants that City is the owner of the Site and has marketable and insurable fee simple title to the Site clear of restrictions, leases, liens, and other encumbrances, except as permitted in the Purchase Agreement. City shall convey title to the Site by grant deed. During the Option to Repurchase Period, Purchaser will not encumber the Site in any way nor grant any property or contract right relating to the Site without the prior written consent of City. City also warrants that it has not added or placed any prohibited substances or hazardous materials on the Site while it owned the Site. The City cannot make any representations concerning contaminants prior to its ownership. The Purchase Price of the Site being acquired in this transaction reflects the fair market value of the Site without the presence of contamination that the City is aware of at the time of sale. If the Site being acquired is found to be contaminated by the presence of hazardous waste which requires mitigation under Federal or State law and were placed there by an entity other than the City, the Purchaser may elect to recover its clean-up costs from those who caused or contributed to the contamination.

Performance of this Purchase Agreement constitutes the entire consideration for said document and shall relieve the City of all further obligation or claims on this account, or on account of the location or grade of the Site and that no obligation other than those set forth herein will be recognized.

Section 5. Time of Essence

Time is of the essence for this Purchase Agreement. If the City’s option to repurchase is not exercised in the manner provided in Section 3 before the expiration of the Option to Repurchase Period, City shall have no interest in the Site and the Option may not be revived by any subsequent payment or further action by City.

Section 6. Quitclaim Deed

If this Purchase Agreement is terminated, Purchaser agrees, if requested by City, to execute, acknowledge, and deliver a quitclaim deed to City with ten (10) business days after termination and to execute, acknowledge, and deliver any other documents required by any title company to remove the cloud of this option from the Site.

Section 7. Notices

All notices, demands, requests, exercises, and other communications under this Purchase Agreement by either party shall be in writing and:

a. sent by United States certified mail, return receipt requested, in which case notice shall be deemed delivered three (3) business days after deposit, postage prepaid in the United States mail, or

b. sent by nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) business day after deposit with that courier, or

c. sent by telecopy or similar means if a copy of the notice is also sent by United States certified mail; in which case notice shall be deemed delivered on transmittal by telecopier or other similar means, provided that a transmission report is generated that reflects the accurate transmission of the notices as follows:

City: City of Brentwood
Attn: Community Development Director
150 City Park Way
Brentwood, CA 94513-1396

Purchaser: Kevin Vornhagen
600 Harvest Park Drive
Brentwood, CA 94513

These addresses may be changed by written notice to the other party, provided that no notice of a change of address shall be effective until actual receipt of that notice. Copies of notices are for informational purposes only, and a failure to give or receive copies of any notice shall not be deemed a failure to give notice.

Section 8. Transfer

Purchaser may not assign or transfer this Purchase Agreement and the rights under it without City’s prior written consent.

Section 9. Litigation Costs

If any action or any other proceeding, including arbitration or action for declaratory relief, is brought for the interpretation or enforcement of the Purchase Agreement or because of an alleged dispute, breach, default, or misrepresentation in connection with this Purchase Agreement, the prevailing party shall be entitled to recover reasonable attorney fees and other costs, in addition to any other relief to which the party may be entitled. “Prevailing party” shall include without limitation:

a. a party who dismisses an action in exchange for sums allegedly due;
b. the party who receives performance from the other party of an alleged breach of covenant or desired remedy where that is substantially equal to the relief sought in an action; or
c. the party determined to be the prevailing party by a court of law.

Section 10. Survival

The terms of this Purchase Agreement shall survive the close of escrow of the Site. If there is a contradiction between this Purchase Agreement and any other agreement between the parties, this Purchase Agreement shall control.

Section 11. Successors

This Purchase Agreement shall bind and inure to the benefit of the respective heirs, personal representatives, successors, and assignees of the parties to this Purchase Agreement.

Section 12. Waivers

No waiver of any breach of any covenant or provision in this Purchase Agreement shall be deemed a waiver of any other covenant or provision in this Purchase Agreement, and no waiver shall be valid unless in writing and executed by the waiving party.

Section 13. Construction

Section headings are solely for the convenience of the parties and are not a part of and shall not be used to interpret this Purchase Agreement. The singular form shall include the plural and vice versa. This Purchase Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties have prepared it. Unless otherwise indicated, all references to sections are to this Purchase Agreement.

Section 14. Further Assurances

Whenever requested by the other party, each party shall execute, acknowledge, and deliver all further conveyances, agreements, confirmations, satisfactions, releases, power of attorney, instruments of further assurance, approvals, consents, and all further instruments and documents as may be necessary, expedient, or proper to complete any conveyances, transfers, sales, and agreements covered by this Purchase Agreement, and to do all other acts and to execute, acknowledge and deliver all requested documents to carry out the intent and purpose of this Purchase Agreement.

Section 15. Third-Party Rights

Nothing in this Purchase Agreement, express or implied, is intended to confer on any person, other than the parties to this Purchase Agreement and their respective successors and assigns, any rights or remedies under or by reason of this Purchase Agreement.

Section 16. Integration

This Purchase Agreement contains the entire agreement between the parties, and expressly supersedes all previous or contemporaneous agreements, understandings, representations, or statements between the parties respecting the sale of Site and also the City’s option to repurchase the Site.

Section 17. Counterparts

This Purchase Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument.

Section 18. Amendment

This Purchase Agreement may not be amended or altered except by a written instrument executed by City and Purchaser.

Section 19. Partial Invalidity

Any provision of this Purchase Agreement that is unenforceable or invalid or the inclusion of which would adversely affect the validity, legality, or enforceability of this Purchase Agreement shall be of no effect, but all the remaining provisions of this Purchase Agreement shall remaining full force.

Section 20. Exhibits

All attached exhibits are incorporated in this Purchase Agreement by reference.

Section 21. Authority of Parties

All persons executing this Purchase Agreement on behalf of any party to this Purchase Agreement warrant that they have the authority to execute this Purchase Agreement on behalf of that party.

Section 22. Governing Law

The validity, meaning and effect of this Purchase Agreement shall be determined in accordance with California laws with venue in Contra Costs County.

The parties have executed this Purchase Agreement as of the date first above written.

PURCHASER CITY OF BRENTWOOD
____________________________ _____________________________
Kevin Vornhagen Donna Landeros, City Manager

ATTEST:
___________________________
Margaret Wimberly, City Clerk

APPROVED AS TO FORM:
____________________________
Damien B. Brower, City Attorney

Exhibits: A. Legal Description of Site
B. Purchaser’s Purchase Proposal

EXHIBIT A
Legal Description of Site

PARCEL ONE:

LOT 11, AS SHOWN ON THAT CERTAIN MAP ENTITLED TRACT 8588, SUNSET INDUSTRIAL COMPLEX, RECORDED APRIL 2, 2004, IN BOOK 462 OF MAPS, AT PAGES 35-45, IN THE OFFICE OF THE COUNTY RECORDER OF CONTRA COSTA COUNTY.

EXCEPTING THEREFROM:

ALL OIL, GAS, CASINGHEAD GAS, ASPHALTUM, AND OTHER HYDROCARBONS, AND ALL CHEMICAL GAS, NOW AND HEREAFTER FOUND LYING MORE THAN FIVE HUNDRED FEET (500’) BELOW THE SURFACE OF SAID REAL PROPERTY, TOGETHER WITH THE RIGHT TO SLANT DRILL FOR AND REMOVE ALL OR ANY OF SAID OIL, GAS, CASINGHEAD GAS, ASPHALTUM AND OTHER HYDROCARBONS AND CHEMICAL GAS LYING BELOW A DEPTH OF MORE THAN FIVE HUNDRED FEET (500’) BELOW THE SURFACE OF SAID REAL PROPERTY; BUT WITHOUT ANY RIGHT WHATSOEVER TO ENTER UPON THE SURFACE OF SAID REAL PROPERTY OR UPON ANY PART OF SAID LANDS WITHIN FIVE HUNDRED FEET (500’) VERTICAL DISTANCE BELOW THE SURFACE OF SAID REAL PROPERTY, AS RESERVED IN THE DEED FROM RONALD ELLIS NUNN, ETAL RECORDED JANUARY 15, 1999, INSTRUMENT NO. 99-12522.

EXCEPTING THEREFROM ALL OIL, GAS, PETROLEUM AND OTHER HYDROCARBON SUBSTANCES, AND MINERALS IN, UNDER OR RECOVERABLE FROM THE PORTION OF SUBSURFACE OF THE LAND LYING BELOW A PLANE PARALLEL TO AND 500 FEET VERTICALLY BELOW THE SURFACE OF SAID LAND; AND THE RIGHT TO REMOVE THEREFROM SUCH OIL AND MINERALS FROM SAID SUBSURFACE SUBJECT TO AND COMPLYING WITH ALL APPLICABLE LAWS, INCLUDING LAWS OF THE CITY OF LAND LYING ABOVE A DEPTH OF 500 FEET FROM THE SURFACE. THE RIGHTS RESERVED HEREIN DO NOT AND SHALL NOT INCLUDE THE RIGHT TO ENTER UPON THE SURFACE OF SAID LAND OR ANY PORTION HEREOF LYING ABOVE A PLANE PARALLEL TO 500 FEET VERTICALLY BELOW THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FROM GEORGE STANLEY NUNN JR. & MEREDITH FITZGERALD NUNN RECORDED JANUARY 15, 1999, INSTRUMENT NO. 99-12523.

RESERVING TO THE GRANTOR ALL INTEREST IN SUBSURFACE WATER RIGHTS WITH NO RIGHT OF SURFACE ENTRY.

ALSO RESERVING THEREFROM, A NON-EXCLUSIVE EASEMENT FOR JOINT ACCESS APPURTENANT TO AND FOR THE BENEFIT OF LOT 10, OF SAID MAP OF SUBDIVISION 8588 OVER THAT PORTION DESCRIBED AS FOLLOWS:

BEING A PORTION OF LOT 11, AS SAID LOT 11 IS SHOWN AND SO DESIGNATED ON THE OFFICIAL MAP OF SUBDIVISION 8588, RECORDED APRIL 2, 2004, IN BOOK 462 OF MAPS AT PAGE 35, IN THE OFFICE OF THE COUNTY RECORDER OF CONTRA COSTA COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHWESTERN CORNER OF SAID LOT 11;

THENCE, FROM SAID POINT OF BEGINNING, ALONG THE NORTHERN LINE OF SAID LOT 11, NORTH 89º 46’ 00” EAST 65.00 FEET;

THENCE, LEAVING SAID NORTHERN LINE, SOUTH 00º 14’ 00” EAST 20.00 FEET;

THENCE, SOUTH 89º 46’ 00” WEST 65.00 FEET TO A POINT ON THE WESTERN LINE OF SAID LOT 11;

THENCE, ALONG SAID WESTERN LINE, NORTH 00º 14’ 00” WEST 20.00 FEET TO SAID POINT OF BEGINNING.

PARCEL TWO:

A NON-EXCLUSIVE EASEMENT FOR JOINT ACCESS OVER A PORTION OF LOT 19, AS SHOWN ON THE MAP OF SUBDIVISION 8842, FILED JUNE 7, 2004, IN BOOK 465 OF MAPS, PAGES 32-38, CONTRA COSTA COUNTY RECORDS, DESIGNATED “40’ JOINT ACCESS EASEMENT” ON SAID MAP.

EXHIBIT B
PURCHASER’S PURCHASE PROPOSAL

City Administration
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
(925) 516-5440
Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov