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Current Council Agenda and Past Meeting Information

CITY COUNCIL AGENDA ITEM NO. 2

Meeting Date: February 26, 2008

Subject/Title: Adopt a Resolution approving and authorizing City Manager or her designee to execute Amendment No. 2 to Purchase Agreement with Brentwood Sunset 2010, LLC, 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. 2 to Purchase Agreement with Brentwood Sunset 2010, LLC, to extend the closing date for sale of property at Sunset Industrial Complex.
PREVIOUS ACTION
On July 25, 2006, the City Council adopted a resolution authorizing the sale of property located at 2010 Elkins Way at Sunset Industrial Complex and approving the Purchase Agreement and Grant Deed with Kevin Vornhagen.

On June 12, 2007, the City Council adopted a resolution consenting to assignment of Purchase Agreement with Kevin Vornhagen for 2010 Elkins Way to Brentwood Sunset 2010, LLC.

On June, 26, 2007, the City Council adopted a resolution amending the Purchase Agreement for the sale of property located at 2010 Elkins Way in Sunset Industrial Complex to Brentwood Sunset 2010, LLC, and authorized the City Manager or her designee to execute the First Amendment to Purchase Agreement.

BACKGROUND
The First Amendment to the Purchase Agreement provides for an escrow close date of March 30, 2008.
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 Brentwood Sunset 2010, LLC’s lender that such a letter is forthcoming, but they will not issue it until the Planning Commission approves the design review and construction bids are received.
Brentwood Sunset 2010, LLC submitted their design review application in early January 2008. The design review application will go through internal staff review prior to going to Planning Commission for approval.
Once the Planning Commission approves the design review application, the applicant can submit the architect drawings and construction bids to the lender. 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 in time to close on March 30, 2008. Therefore, the closing date for this Purchase Agreement needs to be extended.
The City and Brentwood Sunset 2010, LLC, 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 second amendment. This amendment is to extend the closing date for Brentwood Sunset 2010, LLC to October 31, 2008.

FISCAL IMPACT
None.

Attachments:
Resolution
Amendment

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING A SECOND AMENDMENT TO THE PURCHASE AGREEMENT FOR SUNSET INDUSTRIAL COMPLEX WITH BRENTWOOD SUNSET 2010, LLC TO EXTEND THE CLOSING DATE, AND AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENT AND ANY RELATED DOCUMENTS.


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, on June 12, 2007, the City Council by Resolution 2007-131 consented to assignment of the Purchase Agreement by Kevin Vornhagen for the sale of City-owned property at 2010 Elkins Way, APN 018-200-020, to Brentwood Sunset 2010, LLC; and

WHEREAS, on June 26, 2007, the City Council by Resolution 2007-148, approved a First Amendment to Purchase Agreement between the City of Brentwood and Brentwood Sunset 2010, LLC, to extend the closing date and modify the development proposal; and

WHEREAS, the City of Brentwood and Brentwood Sunset 2010, LLC have made good faith efforts to comply with our respective obligations as provided in the Purchase Agreement, and the parties wish to extend the closing date to October 31, 2008.

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

1. Approves the Second Amendment to the Purchase Agreement for the sale of City-owned property at 2010 Elkins Way at Sunset Industrial Complex identified as APN 018-200-020 to Brentwood Sunset 2010, LLC, to extend the closing date to October 31, 2008.

2. Authorizes the City Manager or her designee to execute the Second Amendment to Purchase Agreement and to execute such other documents as may be needed to complete the transactions, including the previously approved Grant Deed.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 26th day of February 2008 by the following vote:

Amendment No. 2 to Purchase Agreement and City’s Option to Repurchase
(Brentwood Sunset 2010, LLC.)

This Amendment No. 2 is entered into and effective as of the ____ day of ___________ 2008, by and between the City of Brentwood, a municipal corporation, (“City”), and Brentwood Sunset 2010, LLC (“Purchaser”) (collectively, the “Parties”) regarding the purchase and option to repurchase certain real property (the “Property”) situated in the City of Brentwood.

Recitals

A. The Parties entered into a Purchase Agreement and City’s Option to Repurchase dated June 26, 2007, which was amended on June 26, 2007, to extend the period of time in which to close escrow on the Property to March 30, 2008 (collectively, the “Agreement”).

B. 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.

C. 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.

D. The Purchaser submitted a design review application in January 2008.

E. The Purchaser expects to receive construction bids once the design review has been approved by the Planning Commission.

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

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

H. 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, 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 October 31, 2008.

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

3. The individuals executing this Amendment No. 2 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. 2.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be executed by their respective representatives thereunto duly authorized.

CITY OF BRENTWOOD PURCHASER:
BRENTWOOD SUNSET 2010, LLC

Donna Landeros, City Manager
Gary Kendall, Member

ATTEST: Karen Kendall, Member

Jonathan Strauss, Member
Margaret Wimberly, City Clerk

Ralph Strauss, Member

Jeffry Potts, Member
APPROVED AS TO FORM:

Damien B. Brower, City Attorney
 
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