Staff ReportP REPARED BY : MATT MORLEY
Director of Parks and Public Works
Reviewed by: Assistant Town Manager Town Attorney Finance
MEETING DATE: 10 /18 /16
ITEM NO: 6
COUNCIL AGENDA REPORT
DATE: OCTOBER 4, 2016
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: AUTHORIZE THE TOWN M ANAGER TO ISSUE A RE QUEST FOR PROPOSAL
FOR THE SALE OF THE PROPERTY LOCATED AT 20 DITTOS LANE APN 529 -
29 -034
RECOMMENDATION :
Authorize the Town Manager to issue a Request for Proposal (RFP) (Attachment 1) for the sale of the
property located at 20 Dittos Lane APN 529 -29 -034.
BACKGROUND :
The former Redevelopment Agency for the Town purchased the Dittos Lane property for $3.1M with
the intent of developing the property for below market rate housing. A joint partnership with a private
developer was unsuccessful and the property has sat vaca nt since then. Ownership of the property now
resides with the Successor Agency to the Town of Los Gatos Redevelopment Agency. The State has
required that the real property assets of the Successor Agency be turned over to the State by mid -2017.
The Town has the option of turning the property over to the State, selling the property and utilizing the
funds for Below Market Housing elsewhere, or developing the property for its use as intended when the
property was acquired.
The failure of the Redevelopment Agency project can be attributed to many factors, some of which
include a proposed density that was not acceptable to the community and limited access to the property.
Specific to access, Dittos Lane is not a street and as such is owned by a combination of the Town and
the abutting property owners. In addition, no official recorded easement s exist across those abutting
properties to provide for access from East Main Street .
DISCUSSION :
If the Dittos Lane property is transferred to State ownership, the Town may lose some of the ability to
control what happens on the site. To avoid this situation, staff is recommending the issuance of an RFP
that will maximize the ability of the Town to act on the property before the deadline.
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: AUTHORIZE THE TOWN M ANAGER TO ISSUE A RE QUEST FOR PROPOSAL F OR
THE SALE OF THE PROP ERTY ON DITTOS LANE APN 529 -29 -034
OCTOBER 4, 2016
DISCUSSION (cont’d):
T he RFP is structured to allow for two types of submittals from interested parties.
1) Market Rate Offer – This scenario will maximize the market rate return on the property in an “as
is ” condition. The Town is mak ing no commitment as to the future ability to develop the
property and makes it clear that the property has the above noted access challenges. Any
proposed development would proceed through the Town’s standard private development process.
In this scenario, any funds received for the property up to $3.1M would need to be utilized for
below market rate housing in the Town. If that amount is not reached, there is no need for the
Town to make up the loss. If the offer for the property under this scenario exceeds the $3.1M
paid for the property, the Council would have discretion on the use of funds over that amount.
2) Below Market Rate Development – In the second scenario, interested parties are able to pr opose
a project that would develop the property for below market rate housing directly. This scenario
provides the Town with the most control over the future use of the property while meeting the
obligations associated with the property. Staff envisions a smaller project than previously
explored under this scenario . This may allow the site to re develop in spite of the access
challenges associated with the property.
By structuring the RFP with two scenarios, the Town will be able to weigh the results of both scenarios
with actual offers in hand and will be able to award the property to the offer that provides the greatest
benefit to the Town. Any potential development in either scenario will need approval through the
Town’s development process and wil l be subject to all Town ordinances and regulations.
The results of the RFP will be brought back to the Town Council for consideration of the sale of the
property . At that time, the Council will have the opportunity to consider the proposals received a nd sell
the property or the Council may decide not to take any action and retain the property. Long term
retention of the property would require the Town to reimburse the Below Market Housing Fund the
amount paid for the property. These funds would likel y need to come from the Town’s General Fund.
No funds have been set aside for this purpose.
CONCLUSION :
Staff recommends that the Town Council authorize the Town Manager to issue a Request for Proposa l
for the sale of the property located at 20 Dittos Lane APN 529 -29 -034.
E NVIRONMENTAL ASSESSMENT :
This is not a project as defined under CEQA, and no further action is required.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: AUTHORIZE THE TOWN M ANAGER TO ISSUE A RE QUEST FOR PROPOSAL F OR
THE SALE OF THE PROP ERTY ON DITTOS LANE APN 529 -29 -034
OCTOBER 4, 2016
FISCAL IMPACT :
There is no fiscal impact as a result of this action.
Attachment:
1. Draft RFP
2. Public Comment received through 11:00 a.m. Thursday, October 13 , 2016
TOWN OF LOS GATOS
DEPARTMENT OF P ARKS AND P UBLIC WORKS
41 MILES DRIVE , LO S G AT OS , CA 950 3 0
REQUEST FOR PROPOSAL S
Property Sale
APN 529 -29 -034
“Dittos La ne”
PROPOSAL SUBMITTAL DEADLINE:
DATE:
TIME:
LOCATION: 41 Miles Drive, Los Gatos, CA
Department of P arks and P ublic Works
PROJECT MANAGER:
ATTACHMENT 1
RF
P
Request for Proposal Page 1 of 10
REQUEST FOR PROPOSAL
1. INTRODUCTION
The Town of Los Gatos (“Town”) is requesting proposals from qualified buyers to
purchase the property identified as APN 529 -29 -034 and known as “Dittos Lane .”
This sale is made “as is.” The Town makes no warranty as to the potential future use of the
property.
This property was purchased by the former Los Gatos Redevelopment Agency (“Agency”)
for development of below market rate housing. The Agency was unsuccessful in
developing the project in partnership with a private developer. The property has been and
is currently vacant.
The Town will evaluate proposals for two factors independently: 1) the ability of the offer
to maximize the financial return to the Town and 2) the potential of the offer to impact the
Town’s below market rate residential needs.
More detailed information on the project is included in Attachment A.
2. ATTACHMENTS
The attachments below are included with this Request for Proposals (“R FP ”). The items
identified with an asterisk (*) must be completed , signed by the appropriate represent ative
of the company , and returned with the submittal.
Attachment A – RFP Requirements
Attachment B – Proposer’s Information Form
Attachment C – Purchase Agreement
3. INSTRUCTIONS TO PROPOSERS
3.1 Pre -proposal Conference : TBD
3.2 Ex amination of Proposal Documents.
The submission of a proposal shall be deemed a representation and certification by
the Proposer that they:
3.2.1 Have carefully read and fully understand the information that was provided
by the Town to serve as the basis for submission of this prop osal.
3.2.2 Represent that all information contained in the proposal is true and correct.
3.2.3 Did not, in any way, collude, conspire to agree, directly or indirectly, with
any person, firm, corporation or other Proposer in regard to the amount,
terms or conditions of this proposal.
3.2.4 Acknowledge that the Town has the right to make any inquiry it deems
appropriate to substantiate or supplement information supplied by Proposer,
Request for Proposal Page 2 of 10
and Proposer hereby grants the Town permission to make these inquiries, and
to provide any and all related documentation in a timely manner.
3.3 No request for modification of the proposal shall be considered after its submission
on grounds that Pr oposer was not fully informed of any fact or condition.
3.4 Questions .
Any questions by the Prop oser regarding this RFP or the p roject must be put in
writing and received by the Town no later than 3 :00 p.m. on DATE .
Corre spondence shall be addressed to:
Matt Morley
Department of Parks and Public Works
41 Miles Avenue
Los Gatos , CA , 950 3 0
Telephone: (408 ) 399 -577 4
E -mail: mmorley@losgatosca.gov (Preferred)
The Town shall not be responsible for nor be bound by any oral instructions,
interpretations , or explanations issued by the Town or its representatives.
Responses from the Town to questions by an y Proposer will be communicated in
writing to all recipients of this RFP. Questions received after the date and time
stated above will not be accepted , and will be return ed to sender /s without response.
3.5 Addenda.
Any addenda issued by Town shall be in writing, shall become a part of this RFP ,
and shall be acknowledged and responded to by Proposer .
3.6 Submission of Proposals :
All proposals shall be submitted to:
Matt Morley
Department of Parks and Public Works
41 Miles Avenue
Los Gatos , CA, 950 3 0
Telephone: (408) 399 -577 4
E -mail: mmorley@losgatosca.gov
Proposals must be delivered no later than DATE . All proposals received after that
time will not be accepted.
The Proposer shall submit its proposal via email as a PDF attachment with the
email subject line: Property Sale: APN529 -29 -0134 “Dittos Lane”. Verification
of receipt of proposal is the responsibility of the submitting firm.
3.7 Withdrawal of Proposals .
A Proposer may withdraw its proposal at any time before the expiration of the time
for submission of proposals as provided in the RFP by delivering a written request
for withdrawal signed by, or on behalf of, the Proposer.
Request for Proposal Page 3 of 10
4. RIGHTS OF THE TOWN OF LOS GATOS
This RFP does not commit the Town to enter into a contract, nor does it obligate the Town
to pay for any costs incurred in preparation and submission of proposals or in anticipation
of a contract. The Town reserves the right to:
▪ Make the selection based on its sole discretion;
▪ Reject any and all proposals;
▪ Issue subs equent Requests for Proposals;
▪ Postpone op ening proposals for its own convenience;
▪ Remedy errors in the Request for Proposals process;
▪ Accep t other than the highest monetary value offer;
▪ Waive informalities and irregularities in the Proposals ; and/or
▪ Enter into an agreement with another Proposer in the event the originally selected
Proposer defaults or fails to execute an agreement with the Town .
An agreement shall not be binding or valid with the Town unless and until it is e xecuted by
authorized representatives of the Town and of the Proposer.
5. RFP TIMELINE
The Town intends to select a firm within sixt y days following the submission deadline .
The Town may, at its own discretion, conduct interviews and other evaluations of some,
all, or none of the applicants prior to selection. The Town will select the firm that best
meets the needs of the Town.
Prospective Buyers to the RFP shall agree, b y and in the submission of the proposal, to
hold the terms of their submission for up to a total of sixty (60) days from the due date and
time for the submission of proposals. The proposal shall be accompanied by a letter of
committal, signed by the Buyer or an individual authorized to enter into contracts on
behalf of the buyer. The letter of committal shall state that the offer is effective for a
minimum of sixty (60) calendar days from the deadline for the submission of proposals
and shall provide for up to one, thirty (30) day extension.
6. PURCHASE AND SALE AG REEMENT
The successful buyer shall be required to enter into a Purchase and Sale Agreement in
substantially the same form as the document attached hereto as Attachment C to this RFP.
7. RIGHTS OF THE TOWN
The Town reserves the right to reject any or all proposals or to waive any informality,
irregularity or minor defect if deemed to be in the best interest of the Town.
8. PUBLIC NATURE OF PROPOSAL MATERIAL
Responses to this RFP become the exclusive prop erty of the Town of Los Gatos . At such
time as the Town awards a contract , all proposals received in response to this RFP become
a matter of public record and shall be regarded as public records, with the exception of
those elements in each proposal which are defined by the Proposer as business or trade
secrets and plainly marked as “Confidential,” “Trade Secret,” or “Proprietary .” The Town
shall not in any way be liable or responsible for the disclosure of any such proposal or
portions thereof, if they are not plainly marked as “Confidential,” “Trade Secret,” or
“Proprietary ,” or if disclosure , in the Town ’s sole discretion, is required und er the
Request for Proposal Page 4 of 10
California Public Records Act as addressed below . Any proposal which contains language
purporting to render all or significant portions of the proposal “Confidential,” “Trade
Secret,” or “Proprietary” shall be regarded as non -responsive.
Although t he California Public Records Act recognizes that certain confidential trade secret
information may be protected from disclosure, the Town of Los Gatos may determine, in
its sole discretion that the information that a Proposer submits is not a trade secret. If a
request is made for information marked “Confidential,” “Trade Secret,” or “Proprietary,”
the Town shall provide the Proposer who submitted the information reasonable notice to
allow the Proposer to seek protection from disclosure by a court of compet ent jurisdiction ,
at the Proposer's sole expense .
9. COLLUSION
By submitting a proposal, each Proposer represents and warrants that its proposal is
genuine and made in the interest of or on behalf of any person not named therein; that the
Proposer has not di rectly induced or solicited any other person to submit a sham proposal
or any other person to refrain from submitting a proposal; and that the Proposer has not in
any manner sought collusion to secure any improper advantage over any other person
submitting a proposal.
10. DISQUALIFICATION
Factors , such as, but not limited to, any of the following , may disqualify a proposal without
further consideration:
▪ Evidence of collusion, directly or indirectly, among Proposers in regard to the amount,
terms or conditions of this proposal;
▪ Any attempt to improperly influence any member of the evaluation team;
▪ Existence of any lawsuit, unresolved contractual claim or dispute between Proposer and
the Town ;
▪ Evidence of incorrect information submitted as part of the proposal;
▪ Evidence of Proposer’s inability to successfully complete the responsibilities and
obligation s of the proposal; and
▪ Proposer’s default under any p revious agreement with the Town .
11. NON -CONFORMING PROPOSAL
A proposal shall be prepared and submitted in accordance with the provisions of these RFP
instructions and specifications. Any alteration, omission, addition, variance, or limitation
of, from or to a proposal may be sufficient grounds for non -acceptance of the proposal, at
the sole discretion of the Town .
12. GRATUITIES
No person shall offer, give or agree to give any Town employee any gratuity, discount or
offer of employment in connection wit h the award of contract by the Town . No Town
employee shall solicit , demand, accept or agree to accept from any other person a gratuity,
discount or offer of e mployment in connection with a Town contract.
Request for Proposal Page 5 of 10
ATTACHMENT A
RFP REQUIREMENTS
A. PROPERTY INFORMATION
The former Redevelopment Agency (“Agency”) for the Town of Los Gatos purchased the
Dittos Lane property to increase development of below market rate housing. The Agency
attempted to develop multiple units on the property in partnership with a private deve loper,
but the project was not successful. A sample of historical documents for the property is
available on the Town’s website for review at w w w.losgatosca.gov/DittosLane . These
documents are exemplar y of the history of the property. Prospective buyers shall conduct
their own due diligence on the property.
Ingress and Egress – Access to the property may be limited by topography, easements, lack
of easements, insufficient easements, or other factors . The Town makes no warranty as to
property access.
S ubsurface Rights Excluded – This RFP does not include any conveyance of subsurface
rights in the real property. To the Town’s knowledge, any oil, gas, other hydrocarbon
substances and minerals of any kind or character in, on , or thereunder, are reserved i n the
deeds of record and the Town has no ownership of or ability to convey said rights.
Development Rights – The property has a General Plan designation of Medium Density
Residential and a Zoning designation of R1 -D - Single Family Residential Downtown . The
Town makes no warranty or commitment to the past or future development rights of the
property. Any future development on the property will be subject to all Federal, State, and
Local laws and requirements with no preferential consideration based on cu rrent ownership .
B. RFP OVERVIEW
The Town will compare its opportunity to maximize the financial return to the Town in
comparison with the ability to increase the number of available below market residential
units. The Town will accept proposals in two fo rmats:
1) Market rate proposals for acquisition of the property “as is”.
2) Proposals to develop the property for below market residential use.
The Proposer may submit proposals on either one of the formats per Section C.2. below.
Subject to the terms and conditions of this RFP, individuals or corporations interested in
purchasing the property shall submit a proposal with executed originals of the documents
required by or Attachments to this RFP.
Within thirty (30) days of the Notice of Award the successful Buyer(s) shall sign a Purchase
and Sale Agreement substantially in compliance with the Purchase and Sale Agreement
attached as Attachment C.
By signing and submitting a proposal, each Buyer ack nowledges that it has made a careful
study of the RFP, the incorporated documents and the property, and has fully assured itself as
to the conditions of the property offered. By signing and submitting its proposal, the Buyer
agrees to all terms and conditi ons of this RFP.
Request for Proposal Page 6 of 10
C. REQUIRED SUBMITTALS
The following submittals shall be included as part of the Proposal:
1. Proposers Information Form (Attachment B )
2. Letter of Commitment for one of the two following options:
a. Market Rate purchase of the property, including the offer price. No conditions
shall be acceptab le in this letter of commitment; or
b. Below Market Rate Housing purchase of the property, including the offer price
and outlining, in detail , the project size, number and type of residential units, level
of affordability, project pro forma, and any other information necessary for the
Town to evaluate the proposal.
3. Financial Stability - Buyer shall identify all proposed funding sources to be utilized for
the acquisition of the buildings. The Buyer shall submit a Letter of Credit from a
financial institution (e.g . bank), or other institution listed as a funding source. The
documents submitted s hall demonstrate that the Buyer has sufficient assets available, or
access to sufficient credit, to acquire the property in the timeframe proposed. The Buyer
shall submit a plan for securing all necessary financing to complete the purchase of the
property or properties under this RFP.
4. Good Faith Deposit - At time of the Proposal, the Buyer shall submit certified check in
the amount of $5,000. Personal checks are not considered an acceptable form of Good
Faith Deposit.
If the successful Buyer withdraws it s Proposal, fails to make payment in full as set forth
herein, fails to execute the required documents, or otherwise fails to reasonably cooperate
in the conveyance of the Property as required by this RFP or by applicable law, then the
certified check as a pplicable, shall be forfeited to the Town.
The Town will return the certified check of those applicants whose proposal is rejected
by the Town, upon signing a Purchase and Sale Agreement with successful buyer.
Proposals determined by the Town to be incomplete, not properly endorsed or otherwise
contrary to these instructions may be rejected. The Town will not accept conditional
proposals, except as specifically expressly allowed by this RFP.
The Town reserves the right to reject any or all Proposals and to determine the Proposal
deemed in its best interest. The Town reserves the right to waive any informalities,
irregularities or minor defects, or allow a buyer to correct them to the extent allowed by law.
The Town will award the sale of the property to the responsible and responsive buyer based
on the evaluation and award process described in this RFP. The Town reserves the right to
not award the sale of the property or evaluate the proposals solely on the basis of the highest
price. Selection of the successful Buyer shall be based on the buyer’s responsiveness to the
requirements and conditions described in this RFP, financial stability, and the proposed price
as deemed to be in the best interest of the Town.
Request for Proposal Page 7 of 10
ATTACHMENT B
Proposer’s Information Form
PROPOSER (please print):
Address:
1 st Contact person (Name ):
Title : Office Tel :
Direct/Cell : Fax :
Email :
2 nd Contact person (Name ):
Title : Office Tel :
Direct/Cell : Fax :
Email :
Proposer, if selected, intends to carry on the business as (check one):
Individual Joint Venture Partnership Corporation
Year incorporated? In what state?
When authorized to do business in California ? ):
Other (explain):
ADDENDA
To assure that all Proposers have received each addendum, check the appropriate box(es) below.
Failure to acknowledge receipt of an addendum/addenda may be considered an irregularity in the
Proposal:
Addendum number(s) received:
1 2 3 4 5 6
No Addendum/Addenda Were Received (check and initial)
Request for Proposal Page 8 of 10
PROPOSER’S SIGNATURE
No proposal shall be accepted which has not been signed in ink i n the appropriate space below:
By signing below, the submission of a proposal shall be deemed a representation and
certification by the Proposer that they have investigated all aspects of the RFP, that they are
aware of the applicable facts pertaining to the RFP process, its procedures and requirements, and
they have read and understand the RFP. No request for modification of the proposal shall be
considered after its submission on the grounds that the Proposer was not fully informed as to any
fact or condition.
(1) If Proposer is INDIVIDUAL ,
sign here:
Proposer’s Signature
P roposer’s typed name and title
Date:
(2) If Proposer is PARTNERSHIP or
JOINT VENTURE , at least (2) Partners
or each of the Joint Venturers
shall sign here:
Pa rtnership or Joint Venture Name
(type or print)
S ignature
Name of Member of t he Partnership or Joint
Venture (type or print)
Date:
S ignature
Name of Member of the Partnership or Joint
Venture Name (type or print)
Date:
Request for Proposal Page 9 of 10
(3) If Proposer is a CORPORATION ,
the duly authorized officer(s) shall
sign as follows: The undersigned cert ify that they are respectively:
(Title)
and (Title)
o f the corporation named below; that they are
designated to sign the Proposal Cost Form by
resolution (attach a certified co py, with corporate
seal, if applicable, notarized as to its authenticity or
Secretary’s certificate of authorization) for and on
behalf of the below named CORPORATION, and
that they are authorized to execute same for and on
behalf of said CORPORATION.
Corporation Name (type or print)
S ignature
Name of Member of t he Corporation (type or print)
Date:
S ignature
Name of Member of the Corporation (type or print)
Date:
Request for Proposal Page 10 of 10
ATTACHMENT C
ATTACHMENT 2
From: Cameron Tulee
Sent: Monday, October 10, 2016 8:30 PM
To: Matt Morley
Subject: Re: Dittos Lane property
Matt,
Thanks for the quick reply, your thoughts and thanks also for forwarding my suggestion on.
When suggesting the community pool I wasn't suggesting the Town would own like it does the
Saratoga/Los Gatos Recreation centers but that a private organization would purchase it and the
organization would retain ownership. The organization would be funded by the local community so
would require a lot of fund raising, of course. Please also forward this clarification to my idea along.
Thanks,
Cameron
On 10/10/2016 03:19 PM, Matt Morley wrote:
Cameron
Interesting ideas. If the Town purchases the property, it would need to pay back the full $3.1 M. I
understand your point about parking but even with that suspect parking would be a requirement of such a
project, but the biggest concern from Fire was their emergency access (less than access for other
vehicles). For a bigger use like a recreation f acility, I would anticipate they would require that extra
room.
I will include your communication with the item as it goes to Council as it is important for the Council to
understand you are interested in the future of the property.
Thank y ou.
From: Cameron Tulee]
Sent: Monday, October 10, 2016 3:07 PM
To: Matt Morley
Subject: Re: Dittos Lane property
Hi Matt,
Thanks for the update.
After watching the previous project fail it seems the biggest roadblock to building something there is the
narrow access and the current fire code requiring it be widened - and widening it was understandably
unacceptable to the El Gato apartments and the 4 -plex.
An idea that might not have been floated before: A community pool (and possibly recreation
center). Wo uld that still require widening the access? It could also be easier to convi n ce the community
as normally community pools don't require parking (people would be expected to walk/bike to the pool),
except for a few spots for hired staff. If the access wou ld be OK, the next question would be raising
money for the purchase and build. If the Town can take significantly less than the original purchase
prices it might be possible but if the original purchase price is about the minimum than I don't see this as a
viable option. If you see this as even remotely possible please pass along to the Council or if you'd rather
ATTACHMENT 2
me suggest it let me know and I'll do so.
Thanks,
Cameron
On 09/30/2016 08:22 AM, Matt Morley wrote:
Cameron
I am currently scheduled to brin g a draft RFP for Council consideration to the Council meeting on
October 18. I am still working on this, but I anticipate the RFP will include a requirement for identifying
potential future use and a compensation amount to the Town. The property will, o f course, need to meet
all development requirements for anything that is proposed for the site.
The RFP will allow for anyone to participate. I have had expressed interest from several brokers as well
as from Habitat for Humanity.
The deadline for action on the property is mid -2017.
Let me know if you have other questions.
Thank you,
Matt Morley
Town Of Los Gatos
Parks and Public Works Director
41 Miles Ave
Los Gatos, CA 95030
408.399.5774
-----Original Message -----
From: Cameron Tulee
Sent: Thursday, September 29, 2016 2:06 PM
To: Matt Morley
Subject: Dittos Lane property
Hi Matt,
All summer went by and I was wondering about the status of the Town's Dittos Lane property.
Can you please let me know its status?
Specifically:
1) Are there any interested parties to purchase it?
2) At this point in the process, is it now open to all or is it still limited to certain parties? If not open to
all, when will it be?
3) Please remind me of the deadline to dispose of it before it gets taken over by the State of California?
Thanks,
Cameron