Attachment 1ATTACHMENT 1
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EXCLUSIVE NEGOTIATING AGREEMENT
This Exclusive Negotiating Agreement ("Agreement") is entered into as of this 23rd day
of October, 2018 (the "Effective Date"), by and between the Town of Los Gatos, a Municipal
Corporation, ("Town"), and Sarah Chaffin & Assignees ("Developer"). The Town and the
Developer (sometimes collectively referred to as the "parties") have entered into this
Agreement on the basis of the following facts:
RECITALS
A. WHEREAS, the Town and/or the Successor Agency to the Los Gatos
Redevelopment Agency (“Successor Agency”) own the property located at 20 Dittos Lane, Los
Gatos, CA; APN: 529-29-034 (“Dittos Property”); and
B. WHEREAS, the Dittos Property was purchased by the former Redevelopment
Agency for the Town of Los Gatos for the purpose of providing below market price residential
uses; and
C. WHEREAS, the Town is interested in exploring the feasibility of a Teacher
Housing Below Market Price Residential Project (“Project”) and has selected the Developer as a
potential developer for the Project; and
D. WHEREAS, the Project has generated enthusiasm from a broad range of
community members, and will help implement a number of Town goals, including those set
forth in the Town’s General Plan and Housing Element; and
E. WHEREAS, the Town now desires to offer Developer the opportunity to
exclusively negotiate with the Town for the purchase/lease of the Property and the
development of the Project. The parties acknowledge and agree that this Agreement in itself
does not obligate any party to acquire or convey or lease any property and does not grant the
Developer the right to develop the Project.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties mutually agree as follows:
ARTICLE 1.
EXCLUSIVE NEGOTIATIONS RIGHT
Section 1.1 Good Faith Negotiations. The Town and the Developer shall negotiate
diligently and in good faith, during the Negotiating Period described in 0, the terms of purchase
and sale or lease agreements and any other project agreements including but not limited to a
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Development Agreement (collectively, “Project Agreements”). During the Negotiating Period,
the parties shall use good faith efforts to accomplish the respective tasks outlined in ARTICLE 2
to facilitate the negotiation of a mutually satisfactory Project Agreements.
Among the issues to be addressed in the negotiations are: (i) appropriate number of
affordable units and affordability levels; (ii) design and aesthetic considerations of the Project
(including access); (iii) the development schedule for the Project; (iv) financing of the Project,
(v) marketing and management of the Project; (vi) the physical and land title conditions of the
Project; and (vii) compliance with State and Federal law.
Section 1.2 Negotiating Period. The negotiating period (the "Negotiating Period")
under this Agreement shall be one year, commencing on the Effective Date. The Negotiating
Period may be extended on the Town’s behalf for up to an additional 180 days by the Town
Manager (“Manager”) or the Developer, if, in the Manager’s judgment, sufficient progress
toward mutually acceptable Project Agreements has been made during the initial one year
negotiating period to merit such extension.
If the Project Agreements have not been executed by the Town and the Developer by
the expiration of the Negotiating Period, then this Agreement shall terminate and no party shall
have any further rights or obligations under this Agreement. If the Project Agreements are
executed by the Town and the Developer then, upon such execution, this Agreement shall
terminate, and all rights and obligations of the parties shall be as set forth in the executed
Project Agreements.
Notwithstanding the preceding paragraph, if by the end of the Negotiating Perio d, draft
Project Agreements are mutually agreed upon by the Developer and the Town, the Manager
may extend the termination date of this Agreement to the date on which the Town agrees to
hold a public hearing to consider approving the Project Agreements.
Section 1.3 Exclusive Negotiations. During the Negotiating Period, the Town and the
Developer shall not negotiate with any entity, other than the parties hereto, regarding
development of the Project, or solicit or entertain bids or proposals to do so.
ARTICLE 2.
NEGOTIATION TASKS
Section 2.1 Overview. To facilitate negotiation of the Project Agreements, the
parties shall use reasonable good faith efforts to accomplish the tasks set forth in this Article 2
in a timeframe that will support negotiation and execution of mutually acceptable Project
Agreements prior to the expiration of the Negotiating Period.
Section 2.2 Development Proposal. Within One Hundred and Twenty Days (120)
days after the Effective Date, the Developer and Community Development Department shall
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meet and determine the documents needed to submit and timeframe to submit such
documents to the Town for project approval, such as, but not limited to, a proposed site plan,
concept drawings for the site plan, massing diagrams, and renderings identifying the location,
general configuration, and proposed design characteristics of the buildings, parking spaces,
landscaping, property subdivision, and other aspects of the Project (the "Project Proposal").
Section 2.3 Financial Proforma. Within One Hundred and Twenty Days (120) after the
Effective Date, the Developer shall submit a detailed financial proforma for the Project
containing, among other matters, a detailed development cost budget, which will be used to
evaluate the financial feasibility of the Project.
Section 2.4 Site and Architectural Plans. During the Negotiating Period, the
Developer shall prepare appropriate refinements and modifications to the Project Proposal as
required by Town Staff pursuant to 0. Such refinements and modifications shall then be subject
to the Planning Commission and Town Council review and approval as set forth in Section 2.6.
Section 2.5 Community Outreach. Within One Hundred and Twenty Days (120) days
following the Effective Date, the Developer shall submit to the Town a proposed community
outreach plan. The Developer shall then hold community meetings to obtain and consider
community input regarding the design and use of the Project.
Section 2.6 Developer Cooperation and Coordination with Adjacent Parcels.
Developer acknowledges that it will need to negotiate easements for ingress and egress to the
property from adjacent parcels and will plan the site to be sensitive to these neighbors.
Section 2.7 Planning Approvals. The Developer acknowledges that the Project
requires approvals and entitlements from the Town Community Development Department
("Planning Approvals"). During the Negotiating Period, the Developer shall submit a formal
application for the Planning Approvals.
Section 2.8 Due Diligence. During the Negotiating Period, the Developer shall
determine whether the site is suitable for development of the Project, taking into account the
geotechnical and soils conditions, the presence or absence of toxic or other hazardous
materials, and other environmental and regulatory factors.
Section 2.9 Reports. Unless otherwise waived by the Town, the Developer shall
provide the Town with copies of all reports, studies, analyses, correspondence, and similar
documents, but excluding confidential information, prepared or commissioned by the
Developer with respect to this Agreement and the Project, promptly upon their completion.
Section 2.10 Confidential Information. While desiring to preserve its rights with
respect to treatment of certain information on a confidential or proprietary basis, the
Developer acknowledges that the Town will need sufficient, detailed information about the
proposed Project (including, without limitation the financial information described in Error! R
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eference source not found.3) to make informed decisions about the content and approval of
the Project Agreements. The Town will work with the Developer to maintain the confidentiality
of proprietary information subject to the requirements imposed on the Town by the California
Public Records Act. The Developer acknowledges that the Town may share information
provided by the Developer of a financial and potential pro prietary nature with third party
consultants and members of the Town Council as part of the negotiation and decision making
process. If this Agreement is terminated without the execution of Project Agreements, the
Town shall return to the Developer any proprietary information submitted by the Developer
under this Agreement.
Section 2.11 Environmental Review. The Developer shall work with the Town, as lead
agency, to prepare or cause to be prepared the appropriate environmental documentation
required by the California Environmental Quality Act ("CEQA") in connection with the Planning
Approvals.
Section 2.12 Progress Reports. From time to time as deemed necessary by the Town,
each party shall make oral or written progress reports advising the other party on studies being
made and matters being evaluated by the reporting party with respect to this Agreement and
the Project.
ARTICLE 3.
GENERAL PROVISIONS
Section 3.1 Limitation on Effect of Agreement. This Agreement shall not obligate
either the Town or the Developer to enter into Project Agreements. By execution of this
Agreement, the Town is not committing itself to or agreeing to undertake acquisition,
disposition, or exercise of control over any property. Execution of this Agreement by the Town
is merely an agreement to conduct a period of exclusive negotiations in accordance with the
terms hereof, reserving for subsequent Town Council action the final discretion and approval
regarding the execution of any Agreement and all proceedings and decisions in connection
therewith. Any Agreement resulting from negotiations pursuant to this Agreement shall
become effective only if and after such Agreement has been considered and approved by the
Town Council, following conduct of all legally required procedures, including without limitation,
all required environmental review processes and all other applicable governmental approvals,
and executed by duly authorized representatives of the Town and Developer. Until and unless
Project Agreements are signed by the Developer and approved by the Town Council, no
agreement drafts, actions, deliverables, or communications arising from the performance of
this Agreement shall impose any legally binding obligation on any party to enter into or support
entering into Project Agreements or be used as evidence of any oral or implied agreement by
either party to enter into any other legally binding document.
Section 3.2 Notices. Formal notices, demands, and communications (other than day
to day routine communications) between the Town and the Developer shall be sufficiently
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given if, and shall not be deemed given unless, dispatched by certified mail, postage prepaid,
return receipt requested, or sent by express delivery or overnight courier service, to the office
of the parties shown as follows, or such other address as the parties may designate in writing
from time to time:
Town: Town of Los Gatos
110 East Main Street
Los Gatos, CA 95030
Attn: Town Manager
Developer: Sarah Chaffin
193 Smith Ranch Court
Los Gatos, CA 95032
Such written notices, demands and communications shall be effective on the date
shown on the delivery receipt as the date delivered or the date on which delivery was ref used.
Section 3.3 Right of Entry. The Developer shall have the right to enter the project
site to conduct investigations in accordance with this Agreement.
Section 3.4 No Commissions. The Town shall not be liable for any real estate
commissions or brokerage fees that may arise from this Agreement. The Town represents that
it has engaged no broker, agent, or finder in connection with this transaction, and the
Developer shall defend and hold the Town harmless from any claims by any broker, agent, or
finder retained by the Developer.
Section 3.5 Defaults and Remedies.
(a) Default. Failure by any Party to negotiate in good faith or failure to fulfill
its obligations as provided in this Agreement shall constitute an event of default hereunder.
The non-defaulting Party shall give written notice of a default to the defaulting Party, specifying
the nature of the default and the required action to cure the default. If a default remains
uncured fifteen (15) days after receipt by the defaulting Party of such notice, the non -defaulting
Party may exercise the remedies set forth in subsection (b).
(b) Remedies. In the event of an uncured default by the Town, the
Developer’s sole remedy shall be to terminate this Agreement.
In the event of an uncured default by the Developer, the Town’s sole remedy
shall be to terminate this Agreement.
Except as expressly provided above, neither Party shall have any liability to the
other Party for damages or otherwise for any default, nor shall any Party have any other claims
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with respect to performance under this Agreement. Each Party specifically wai ves and releases
any such rights or claims it may otherwise have at law or in equity.
Section 3.6 Attorneys' Fees. The prevailing party in any action to enforce this
Agreement shall be entitled to recover attorneys' fees and costs from the other party.
Section 3.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
Section 3.8 Entire Agreement. This Agreement constitutes the entire agreement of
the parties regarding the subject matters of this Agreement.
Section 3.9 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
agreement.
Section 3.10 Assignment. The Developer may not transfer or assign any or all of its
rights or obligations hereunder except with the prior written consent of the Town, which
consent shall be granted or withheld in the Town’s sole discretion, and any such attempted
transfer or assignment without the prior written consent of Town shall be void.
Section 3.11 No Third Party Beneficiaries. This Agreement is made and entered into
solely for the benefit of the Town and the Developer and no other person shall have any right
of action under or by reason of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on the date
first above written.
DEVELOPER:
Sarah Chaffin
By: _____________________________
Town of Los Gatos
By: _____________________________
APPROVED AS TO FORM:
__________________________
Town Attorney