Final Executed ENA with Burbank - Signed May 10, 2024

EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT

Golden Gate Village

This EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT (this “Agreement”) is dated May 10, 2024 (the “Effective Date”) and is entered into by and between HOUSING AUTHORITY OF THE COUNTY OF MARIN, a public body, corporate and politic (the “Authority”) and BURBANK HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation (the “Developer”). The Authority and Developer are sometimes referred to individually herein as a “Party” and together as the “Parties”. 

RECITALS 

WHEREAS, the Authority owns and operates a 300-unit public housing project (296 dwelling units) in Marin City, California, commonly known as Golden Gate Village, on certain real property more particularly described in Exhibit A attached hereto (the “Site” or “Golden Gate Village”); 

WHEREAS, in November 2022, the Authority’s Board of Commissioners (the “Board”) adopted the Golden Gate Village Redevelopment Framework, attached hereto as Exhibit B (the “Redevelopment Framework”), which resulted from significant input from Golden Gate Village residents and community stakeholders, and established the guiding principles, goals and objectives to reposition Golden Gate Village to preserve affordability and rehabilitate and recapitalize the Site using disposition under Section 18 of the U.S. Housing Act of 1937, as amended (“Section 18”), the U.S. Department of Housing and Urban Development (“HUD”) Rental Assistance Demonstration (“RAD”) program, Section 8 Project-Based Vouchers, tax credits, debt, and other financing sources (the “Project”); 

WHEREAS, as provided in the Redevelopment Framework, the purpose of the Project is to preserve Golden Gate Village as affordable rental housing, make necessary capital improvements, and ensure no existing residents will be forced to leave because of the redevelopment; 

WHEREAS, in furtherance of the Project, the Authority issued a Request for Qualifications under RFQ # 2023-001 on May 22, 2023 for a co-developer/development partner for the preservation and recapitalization of Golden Gate Village (“RFQ”) and Developer was selected as the initial awardee based on an RFQ proposal submitted August 11, 2023 (the “Developer Proposal”), which selection was approved by the Board on December 12, 2023; 

WHEREAS, the Parties desire to enter into this Agreement to implement a predevelopment and planning process to work toward the goal of planning the rehabilitation of the Site as set forth herein and to undertake any environmental analysis necessary under the California Environmental Quality Act (“CEQA”) and the National Environmental Policy Act (“NEPA”) for the purpose of considering the execution of a Master Development Agreement (“MDA”), subject to negotiation between the Parties and approval of the Board; 

WHEREAS, in conjunction with this Agreement, the Parties intend to continue the community engagement process undertaken by the Authority, negotiate roles and responsibilities between the Parties and establish a phasing and a development budget and schedule for the Project; 

WHEREAS, the Developer acknowledges and agrees that this Agreement in itself does not obligate either Party to acquire or convey any property, does not grant the Developer the right to develop the Site or Project, and does not obligate either Party to any activities or costs to develop the Project, except as contemplated by this Agreement. 

NOW, THEREFORE, in consideration of the foregaing recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 

ARTICLE 1: EXCLUSIVE NEGOTIATIONS RIGHT

Section 1.1 Good Faith Negotiations

The Parties hereby agree to negotiate diligently and in good faith toward the execution of a MDA during the Term (as defined in Section 1.3) for the substantial rehabilitation and disposition of the Site for affordable housing, all in accordance with the goals and objectives of the Redevelopment Framework. The Parties shall cooperate in conducting such Project feasibility activities as both Parties deem appropriate. The Authority agrees to use its best efforts to negotiate with HUD to obtain any necessary approvals.

Among the issues to be addressed in the negotiations are the total development costs of the Project, the nature and amount of financial investment in the Project, remediation of any adverse Site conditions, the development schedule for the Project, financing of the Project, marketing and management of the Project, rehabilitation scope of work for the Project, and preliminary design and architectural concepts and resident coordination, related to the Project.

It is anticipated that negotiations and other meetings between the Parties during the Term will take place at the Authority's offices or other locations in Marin County, California (the “County”) or via electronic meeting platforms (e.g. Zoom or Microsoft Teams), and draft documents will be prepared by the Authority or its attorneys and consultants and provided to Developer and its attorneys and consultants for review and comment. 

Each Party acknowledges and agrees that the other Party shall be deemed to be acting in good faith so long as it makes reasonable efforts to attend reasonably scheduled meetings, directs its contractors consultants to act expeditiously and in line with the scopes of work, provides information necessary to the negotiations to the other Party, negotiates in good faith, and uses commercially reasonable efforts to promptly review and return with comments, if any, on all correspondence, reports, documents, or agreements received from the other Party that require such comments. 

Section 1.2 Exclusive Negotiations.

During the Term, the Authority shall not negotiate with any person or entity, other than the Developer or related party approved by the Authority, regarding development of the Project, or solicit or entertain bids or proposals to do so. Notwithstanding the foregoing, nothing in this Section 1.2 shall prohibit the Authority from interacting with Site residents and neighboring property owners or tenants as may be necessary to provide them with reasonable opportunities to comment on the Project as it evolves. The Authority reserves the right to engage in discussions or negotiations, or to finalize agreements, with any other parties for other projects on any other sites including those that are nearby or adjacent to the Site.

Section 1.3 Term. 

The term of this Agreement commences as of the Effective Date and shall continue for a period of twelve (12) months from the Effective Date (the “Term”) unless sooner terminated pursuant to this Agreement or until a MDA is executed by both Parties. If a MDA has not been executed by the Parties (or by the Authority and a party related to the Developer and approved by the Authority) by the expiration of the Term, then this Agreement shall terminate and neither Party shall have any further rights or obligations under this Agreement, except as set forth in Sections 2.7, and 4.3. However, the Parties may mutually agree to extend the Term for two (2) additional, ninety (90) day periods, subject to the approval of the Authority’s Executive Director with the concurrence of the Authority’s legal counsel (each a, “Term Extension”). The Term may be extended only by written amendment to this Agreement, and no other act or failure to act by the Authority or any of its representatives shall result in an extension of the Term. If the Parties cannot agree upon such an extension, this Agreement shall automatically terminate. 

In addition, a Term Extension shall apply automatically if either Party issues a written notice to the other Party stating with specific justification that a Term Extension is reasonably necessary (a) to prepare, circulate, review, revise, re-circulate or certify any documentation issued under CEQA (as defined in section 3.4) in connection with the approval of a MDA and/or the Project (including any new or revised documents necessary as a result of any settlement or judgment in a lawsuit challenging the environmental review for a MDA and/or the Project) and (b) during the pendency of any action or lawsuit challenging any entitements, actions or approvals (including but not limited to environmental review) associated with the MDA and the Project unless both Parties agree not to pursue such defense. 

If a MDA is executed by both Parties, then upon such execution this Agreement shall terminate, and all rights and obligations of the Parties shall be as set forth in the executed MDA. This Agreement may also be terminated if the Parties agree in writing that a successful consummation of the negotiations is impossible. 

Section 1.4 MDA Terms and Conditions. 

The terms and conditions of the MDA to be negotiated and drafted pursuant to this Agreement shall be guided by the following non-exhaustive requirements and conditions: 

(a) The negatiations shall be based on and guided by, and the MDA shall incorporate, the objectives, parameters, development requirements, and terms of the Redevelopment Framework and on further analysis and information revealed during the Term. Preliminary business terms to be included in the MDA are attached hereto as Exhibit C. 

(b) The MDA shall be subject to the following construction and postconstruction policies and requirements of the Authority as they are written as of the date the MDA is considered by the Board (unless revisions are required by federal, state or local requirements), copies of which are available for review at the offices of the Authority: 

(i) Payment of Davis Bacon in accordance with the Authority policy and applicable federal law; 

(i) Equal Opportunity/Non-Discrimination in Employment and Contracting Procedures, Including Utilization of Minority and Women Businesses; 

(iii) Section 3 Plan (as hereinafter defined); 

(iv) Authority's standard insurance requirements; and 

(v) Compliance with all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter. 

(c) The MDA shall contain a “Scope of Development” setting forth design parameters for the Project, a requirement for the submission of plans to the Authority for approval, and any proposed phasing for the Project. The Scope of Development will include, without limitation, details refated to rehabilitation and replacement of physical improvements to unit and building interiors, building systems, on and off-site work, and building exteriors at the Site. Estimates of construction durations will be included to allow for planning of construction period resident coordination. 

(d) The MDA shall contain a “Schedule of Performance” setting forth the respective dates on which the Authority and the Developer are obligated to perform their respective obligations for the Project and each proposed phase of the Project. The Schedule of Performance shall include, without limitation and in no particular order, dates and time periods anticipated for: (i) NEPA and CEQA approvals (to the extent not completed under Section 3.4), (ii) entittements and permits from the County, (iii) property subdivision or line adjustments necessary for phasing, (iv) submittals of construction/rehabilitation plans to the Authority, (v) applications for all necessary financing, including applications to the California Tax Credit Allocation Committee (CTCAQC), California Tax Credit Allocation Committee (TCAC), and California Department of Housing and Community Development (HCD), {vi) application(s) to HUD for Section 18 disposition and RAD approvals, (vii) the commencement of construction/rehabilitation of the Project and each proposed phase, (viii) completion of construction/rehabilitation of the Project and each proposed phase and (ix) lease-up of the Project and each proposed phase. 

(e) The MDA shall include an estimated sources and uses budget and a feasible method of financing the Project and each proposed phase, reasonably demonstrating to the Authority the availability of all funds needed to complete the Project and each proposed phase. The MDA shall require the submittal of documentation of all proposed construction loans and tax credit equity needed to carry out the proposed methods of financing. 

(f) The MDA shall contain details of the Authority’s financial assistance which may include, but not be limited to, consideration for land and provision of affordable housing, residential parking, community center, and on-site and off-site improvements. To the extent the Authority provides financial assistance for the Project, the terms of repayment shall be negotiated during the Term and shall be set forth in the MDA.

(g) The MDA shall set forth conditions precedent to the conveyance of a leasehold interest in the land and ownership interest in the buildings to be conveyed by the Authority to the Developer, and to the disbursement of any funds by the Authority or funds to be advanced by the Developer and reimbursed by the Authority, to ensure that the Project will be developed and used as required by the MDA. 

(h) The MDA shall prohibit, without written Authority consent, any assignments or transfers by the Developer. 

(i) The MDA shall set forth use restrictions relating to the Project, which use restrictions may be set forth in a covenant to be recorded against the Site. 

Section 1.5 Resident and Community Engagement. 

(a) The Parties are committed to minimizing the disruption in the lives of residents of the Site during the redevelopment process. The Developer wilt plan Project efforts accordingly fo achieve this goal. Current Site residents will have the right to remain at and/or the right to return to the Project following rehabilitation, in accordance with and subject to applicable RAD program requirements. Residents will be granted all rights and protections required under Section 18 and the RAD program. 

(b) The Parties are committed to creating and maintaining relationships with current Site residents and to providing them with training, information and supportive programs that will allow them access to better social services that will empower them toward self-sufficiency and sustainability. 

(c) The Parties are committed to engaging with the current Site residents and giving all residents a voice in the redevelopment process. The Parties will enlist the duly elected Golden Gate Village Resident Council Board (“Resident Council Board”) to aid in their efforts to engage the Site residents’ participation in the Project planning process through establishing, as determined appropriate for the process of engaging Site residents’ participation, community meetings, focus groups, youth meetings, senior-only meetings and similar efforts. 

(d) Atthe request of the Authority, the Developer may be required to participate in public community meetings with Authority staff, the Resident Council Board, the Site residents and/or, other community councils or organizations. The Developer will participate in such meetings as reasonably deemed necessary by Developer and the Authority. 

(e) The Parties agree to keep each other reasonably informed as to the content of and any outcome associated with their community engagement and interaction with the Resident Council Board, the Site residents and other community councils or organizations. 

(f) The resident and community principals of this Section 1.5 will be incorporated in the MDA. 

Either Party may, from time to time, by written notice to the other, designate a different address which shall be substituted for the one above specified. Notices, payments and other documents shall be deemed delivered upon receipt by personal service or upon deposit in the United States mail.

Section 4.16 Amendments and Modifications.

Any amendments or modifications to this Agreement must be in writing, and shall be binding only if executed by both the Authority and the Developer.

Section 4.17 Governing Law.

This Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law or those provisions preempted by federal law. This Agreement is made, entered into and executed in Marin County, California, and any action filed for the interpretation, enforcement or other action with respect to the terms, conditions or covenants referred to herein shall be filed in the applicable court in Marin County, California.

Section 4.18 Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed to be an original.

Section 4.19 Time is of the Essence.

Time is of the essence in the performance of each and every obligation of the Parties under this Agreement.

Section 4.20 Drafting.

Each of the Parties hereto agree that this Agreement is the product of joint draftsmanship and negotiation and that should any of the terms be determined by a court, or in any type of quasi-judicial or other proceeding, to be vague, ambiguous and/or unintelligible, that the same sentences, phrases, clauses or other wordage or language of any kind shall not be construed against the drafting party in accordance with California Civil Code Section 1654, and that each such Party to this Agreement waives the effect of such statute.

Section 4.21 Conflict of Interests.

No member, official or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he, or she is directly or indirectly, interested.

Section 4.22 Warranty against Payment of Consideration for Agreement.

The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement; provided, however, the Authority acknowledges that Developer has retained legal counsel and consultants in connection with this Agreement, and agrees that such arrangements are not a violation of this Section 4.22.

Section 4.23 Non liability of Officials, Officers, Members, and Employees.

No member, official, officer, or employee of the Authority shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Developer or to his successor, or on any obligations under the terms of this Agreement.

Section 4.24 No Attorneys’ Fees.

The prevailing Party in any action to enforce this Agreement shall not be entitled to recover reasonable attorneys' fees and costs from the other Party (including fees and costs in any subsequent action or proceeding to enforce or interpret any judgment entered pursuant to an action on this Agreement). Each party shall bear its own costs and fees.

Section 4.25 Entire Agreement

This Agreement, including alt exhibits and other documents incorporated herein or made applicable by reference, if any, constitutes the entire agreement of the Parties concerning the subject matter hereof and supersedes all prior agreements, understandings and commitments, whether oral or written.

Section 4.26 Exhibits

The following Exhibits are attached hereto and incorporated herein by this reference:

Exhibit A: Site Description

Exhibit B: Redevelopment Framework

Exhibit C: Preliminary MDA Business Terms

Exhibit D: ERN Predevelopment Budget

Exhibit E: Assignment of Work Product

Exhibit F: ERN Schedule of Performance

Exhibit G: Right of Entry

IN WITNESS WHEREOF, the Authority and Developer have caused this Agreement to be executed by their duly autharized representatives.