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Current Council Agenda and Past Meeting Information

 

CITY COUNCIL AGENDA ITEM NO. 20

Meeting Date: September 26, 2006

Subject/Title: Adopt a Resolution approving and authorizing City Manager or her designee to execute Amendment No. 3 to Purchase Agreement with Pizzagoni Family, Inc., to extend the closing date for sale of property at Sunset Industrial Complex.

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Director of Community Development

RECOMMENDATION
Adopt a Resolution approving and authorizing City Manager or her designee to execute Amendment No. 3 to Purchase Agreement with Pizzagoni Family, Inc., to extend the closing date for sale of property at Sunset Industrial Complex.
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 the 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 sales and authorized the City Manager to execute documents necessary to close the transactions.

 On September 14, 2004, the City Council authorized the City Manager to execute a Purchase Agreement for the sale of Lot 22 to Pizzagoni Towing.

 On January 24, 2006, the City Council authorized the City Manager to execute Amendment No. 1 to the Purchase Agreement with Pizzagoni Towing to extend escrow to May 1, 2006.

 On May 23, 2006, the City Council authorized the City Manager to execute Amendment No. 2 to the Purchase Agreement with Pizzagoni Towing to extend escrow to September 30, 2006.

BACKGROUND
As a condition of purchase, buyers at Sunset Industrial Complex are required to provide to the City evidence of financing sufficient to acquire the property, to pay development fees and to complete construction of the improvements for the business operation on the property. Staff has received assurances from Pizzagoni’s lender that such a letter is forthcoming, but they won’t issue it until the Planning Commission approves the design review and construction bids are received.
The Planning Commission approved Pizzagoni’s design review application on June 1, 2006. Pizzagoni has advised staff that construction bids and architect drawings are due to the lender no later than September 30, the date to close as approved by Amendment No. 2. This does not leave sufficient time for the bank to review the construction bids, issue its letter of financing commitment to the City, and for the title company to draw the escrow papers. Therefore, the closing date for this Purchase Agreement needs to be extended.
The qualifications and identities of the buyers were of particular concern to the City, and it is because of such qualifications and identities that the City entered into the Purchase Agreements with the selected buyers. Relocation of industrial employers from areas within the Merged Redevelopment Project Areas received additional points during the purchaser selection process by the Council. Pizzagoni currently operates their businesses from the Merged Redevelopment Project Areas and is a prime example of the type of businesses that the City envisioned for Sunset Industrial Complex.

The City and Pizzagoni have made good faith efforts to comply with our respective obligations as provided in the Purchase Agreement. Staff requests approval from the Council for a third amendment to extend the closing date for Pizzagoni to December 15, 2006.

FISCAL IMPACT
None at this time.

Attachments:
Resolution
Amendment

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING A THIRD AMENDMENT TO THE PURCHASE AGREEMENT FOR SUNSET INDUSTRIAL COMPLEX WITH KRISTINA PIZZAGONI REYNOLDS TO EXTEND THE CLOSING DATE, AND AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENT AND ANY RELATED DOCUMENTS.

WHEREAS, on January 12, 1999, City Council authorized the purchase of approximately 40 acres of property located at the northeast corner of Tresch and Sunset Roads; and

WHEREAS, on February 8, 2000, City Council authorized the master-plan and environmental documents for approximately 132 acres of City-owned land northeast of Tresch and Sunset Roads to include a Wastewater Treatment Plan, Solid Waste Plan, Sports Park, Corporation Yard and Industrial Complex; and

WHEREAS, on July 23, 2002, the City Council adopted Ordinance No. 710 approving the Planned Development Zoning for Sunset Industrial Complex; and

WHEREAS, on September 14, 2004, the City Council authorized the City Manager to execute the Purchase Agreement with Kristina Pizzagoni Reynolds (“Pizzagoni”). The Purchase Agreement was executed on October 12, 2004; and

WHEREAS, on January 24, 2006, the City Council approved Amendment No. 1 to the Purchase Agreement with Pizzagoni to extend the escrow to May 1, 2006; and

WHEREAS, on May 23, 2006, the City Council approved Amendment No. 2 to the Purchase Agreement with Pizzagoni to extend the escrow to September 30, 2006; and

WHEREAS, the qualifications and identities of the buyers are of particular concern to the City, and it is because of such qualifications and identities that the City entered into the Purchase Agreements with the selected buyers; and

WHEREAS, voluntary relocation of industrial employers from areas within the Merged Redevelopment Project Areas received additional points during the purchaser selection process by the Council, will open future redevelopment opportunities at vacated sites along Brentwood Boulevard, and Pizzagoni is a prime example of the type of business envisioned by the City for Sunset Industrial Complex; and

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

WHEREAS, the City and Pizzagoni have made good faith efforts to comply with their respective obligations as provided in the Purchase Agreements, and each desire to extend the escrow date for this transaction.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brentwood hereby approves and authorizes the City Manager or her designee to execute Amendment No. 3 to the Purchase Agreement for Sunset Industrial Complex with Kristina Pizzagoni Reynolds, or her designee, to extend the close date to December 15, 2006, and authorizes the City Manager or her designee to execute the amendment and other documents as may be needed to complete the transaction.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 26th day of September 2006 by the following vote:

Amendment No. 3 to Purchase Agreement and City’s Option to Repurchase
(Pizzagoni Family, Inc.)

This Amendment No. 3 is entered into and effective as of the ____ day of ___________ 2006, amending the Purchase Agreement and City’s Option to Repurchase dated October 12, 2004 (the “Agreement”) by and between the City of Brentwood, a municipal corporation, (“City”), and Pizzagoni Family, Inc. (“Purchaser”) (collectively, the “Parties”) for the purchase and option to repurchase certain real property (the “Property”) situated in the City of Brentwood.

Recitals

A. As a condition of purchase, Purchaser is required to provide evidence of financing sufficient to acquire the Property, pay development fees and complete construction of the improvements for the business operation on the Property.

B. Staff has received assurances from Purchaser’s lender that such a letter is forthcoming, but not until the Purchaser has received Planning Commission approvals and construction bids.

C. The Purchaser received Planning Commission approvals for design review in June 2006.

D. The Purchaser expects to receive construction bids on the approved building plans by the end of September 2006.

E. The Parties amended the Agreement by executing Amendment No. 1 on January 24, 2006, to extend the period of time in which to close escrow on the Property to May 1, 2006.

F. The Parties amended the Agreement a second time by executing Amendment No. 2 on May 23, 2006, to extend the period of time in which to close escrow on the Property to September 30, 2006.

G. The Parties desire to amend the Agreement a third time to further extend the amount of time to close escrow on the Property.

H. City and Purchaser have made good faith efforts to comply with their respective obligations as provided in the Agreement, as amended.

I. The Parties have reached agreement on specific language for the amendment and desire to memorialize it herein.

Now, therefore it is agreed as follows:

1. That the first paragraph of Section 1.03 of the Agreement, as amended, is hereby amended in its entirety as follows:

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 by December 15, 2006.

2. All other provisions of the Agreement, as amended, will remain in full force and effect.

3. The individuals executing this Amendment No. 3 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. 3.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be executed by their respective representatives thereunto duly authorized.

CITY OF BRENTWOOD PURCHASER:
PIZZAGONI FAMILY, INC.

Donna Landeros, City Manager
Kristina Reynolds

ATTEST:

Margaret Wimberly, City Clerk

APPROVED AS TO FORM:

Damien B. Brower, City Attorney

City Administration
City of Brentwood City Council
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