HomeMy WebLinkAboutStaff Report 4.A 10/20/2014(E)
DATE: October 20, 2014
TO: Honorable Mayor and Members of the City Council
FROM: John C. Brown, City Manager
Agenda Item #4.A
SUBJECT: Adoption (Second Reading) of an Ordinance Approving Purchase and Sale and
Lease Back Agreements Between the City of Petaluma and Merlon Geier
Partners Regarding Real Property Necessary for the Rainier Interchange Project.
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It is recommended the City Council Adopt the Ordinance Approving Purchase and Sale and
Lease Back Agreements Between the City of Petaluma and Merlone Geier Partners Regarding
Real Property Necessary as Right -of -Way for the Rainier Interchange Project.
BACKGROUND
On October 6, 2014, the City Council unanimously approved the first reading of an ordinance
approving purchase and sale and lease back agreements between the City of Petaluma and
Merlon Geier Partners (MG) related to real property necessary for right-of-way for the Rainier
Interchange project. The recommenced action provides for second reading and adoption of this
ordinance. A copy of the October 6, 2014 staff report is attached, for the Council's reference.
DISCUSSION
As discussed on October 6, 2014, negotiations on the subject documents continued to the
meeting date and resulted in a late submission of revised documents for the Council's
consideration. The City Attorney described the changes from the documents distributed to
Council members on Thursday October 2, 2014. Noted was the legal description in the purchase
and sale agreement, which incorporates approximately 2 acres of land previously dedicated as
easement by (MG), for Rainier Avenue. This land was included in the description so the City
will hold title to the property. Ownership in fee is necessary to transfer this property to Caltrans
when it is needed for the Rainier Interchange project. MG agreed to incorporate the additional
acreage in the purchase and sale agreement, for the purpose of transferring title, at no additional
cost to the City. The sale price of $540,567. recommended to the Council for the Dog Park
property, remains unchanged.
The lease back agreement negotiated with MG for the dog park property requires MG to
maintain the Dog Park property for the terns of the agreement. It also requires MG to insure the
property and to indemnify the City. MG is not currently, nor does it wish to be, responsible for
maintaining or indemnifying the City for the two acres associated with Rainier Avenue that are
not Dog Park property. discussed in the previous paragraph. A legal description that excludes
that acreage, and which focuses solely on the Dog Park property, was not available for City
Council review on October 6, 2014. The Council approved the first reading of the attached
ordinance, and its related exhibits, to include a revised legal description for the lease back
agreement that reflects this distinction. That revised legal description is provided as an Exhibit to
the Lease Back Agreement (Exhibit B) to the attached Ordinance.
During the Council's consideration of this item, the relationship between the Park fees to be paid
on the Deer Creel: Village project, and the sale price for the Dog Park property was questioned.
Specifically, Council wanted to verify that credits have not already been granted to MG, against
Park Impact fees, for the Dog Park property. Fees are paid for the various buildings that
comprise the project at the time building permits are pulled. To date, Parks and Open Space
fees have been collected on six permits; those fees total $195,811.98. There were no credits
applied to impact fees for the Dog Park, or for any other open or recreational space on the Deer
Creel: Village project site.
A review of the fees paid noted that a fee credit of $9,500 was applied to the Parks fees that
would have otherwise been collected for Building C. This credit is associated with invoices
received for a parkland appraisal the City commissioned in 2009, related to property on the
McNear Peninsula. The City lacked funding to conduct the appraisal at that time, and MG
offered to pay for the work in exchange for a credit to its future impact fees. There are no fee
credits associated with, or pending for, any future construction.
FINANCIAL IMPACT
The cost of the recommended purchase is $540,567. Monies for this purchase are available in
the Traffic Mitigation Fee funds, which have a combined estimated balance of $12,880,471 as of
July 1, 2014.
ATTACHMENTS
Ordinance which includes the following:
Exhibit A: Purchase and Sale Agreement (with four exhibits)
Exhibit A: Legal Description
Exhibit B: Lease (with four exhibits)
Lease Exhibit A: Legal Description
Lease Exhibit B: Insurance Requirements
Lease Exhibit C: Prevailing Wage
Lease Exhibit D: Living Wage Acknowledgment
Exhibit C: Grant Deed
Exhibit D: Acceptance of Grant Deed
2. October 6, 2014 staff report (w/o attachments)
ATTACHMENT 1
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA APPROVING
PURCHASE AND SALE AGREEMENT, BETWEEN MGP VIII PROPERTIES, LLC, A
DELAWARE LIMITED LIABILITY COMPANY ("SELLER") AND THE CITY OF
PETALUMA FOR ACQUISITION OF A PORTION REAL PROPERTY(APN 007-380-
027), THAT FALLS WITHIN THE PLAN LINE FOR THE RAINIER INTERCHANGE
PROJECT APPROVED BY ORDINANCE NO. 1991 IN THE AMOUNT OF 5540,567,
AND THE SUBSEQUENT LEASEBACK OF THE REAL PROPERTY INCLUDING
THE PORTION OF THE PROPERTY DEVELOPED AS A DOG PARK BY SELLER
AND AUTHORIZING THE CITY MANAGER TO COMPLETE ALL
NECESSARY TRANSACTION FOR PURCHASE AND SALE AND LEASEBACK OF
THE PROPERTY
WHEREAS, Section 46 of the Charter of the City of Petaluma requires that actions for
the acquisition, sale, or lease of real property be taken by Ordinance; and,
WHEREAS, Seller owns that certain real property known as Assessor's Parcel No. 007-
380-027 in Petaluma, California, ("Land"); and
WHEREAS, the City's General Plan has planned consistently for a Rainier Avenue
Extension and Interchange, which requires Rainier Avenue to be extended to and connect with a
new freeway interchange on Highway 101 between Washington Street and Corona Road and to
provide another cross-town travel route and access to Highway 101 ("Project"); and
WHEREAS, the City's General Plan designates areas within the City in which
development of any improvements is limited in anticipation of the future Project ("Designated
Area"), and in 1995, the City Council adopted Ordinance No. 1991 N.C.S., approving the plan
line for the Project; and
WHEREAS, a portion of Seller's Land is within the Designated Area (hereinafter referred
to as "Property"). Buyer desires to purchase the Property; and
WHEREAS, the City has negotiated a purchase and sale agreement between the City and
Seller to purchase the Property in the amount of Five Hundred Forty Thousand, Five Hundred
Sixty Seven Dollars ($540,567), and a copy of that purchase and sale agreement, with all of its
attachments, is attached hereto as Exhibit A; and,
WHEREAS, the purchase and sale agreement requires the Seller to enter into a lease to
lease back the Property from the City to continue to operate and maintain the Property including
the portion of the Property developed as a Dog Park until the City requires use of the Property
for City purposes, and a copy of that lease is attached as Exhibit B to the purchase and sale
agreement: and
WHEREAS, the City Council finds this action qualifies for exemption under the
California Environmental Quality Act (CEQA) pursuant to Title 14, Chapter 3 of the California
Code of Regulations (CEQA Guidelines), sections 15061, 15301 as a purchase and sale, and
lease of existing facilities.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF PETALUMA AS FOLLOWS:
Section 1: The City Council approves the purchase and sale agreement, between the
City of Petaluma and the Seller, in the amount of Five Hundred Forty Thousand, Five Hundred
Sixty Seven Dollars ($540,567), a copy of which is attached as Exhibit A and incorporated
herein as reference.
Section 2: The City Council approves the lease attached as Exhibit B to the purchase
and sale agreement.
Section 3: On behalf of the City, the City Manager is authorized and directed to
execute documents substantially in accordance with Exhibit A, as determined by the City
Attorney, and all other documents reasonably necessary to complete the purchase and sale, and
lease.
Section 4: If any section, subsection, sentence, clause, phrase or work of this
Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court
of competent jurisdiction or preempted by State legislation, such decision or legislation shall not
affect the validity of the remaining portions of this Ordinance. The City Council of the City of
Petaluma hereby declares that it would have passed and adopted this Ordinance and each and all
provisions thereof irrespective of the fact that any one or more of said provisions be declared
unconstitutional, unlawful other otherwise invalid.
Section 5: This Ordinance shall become effective thirty (30) days after the date of its
adoption by the Petaluma City Council.
Section 6: The City Clerk is hereby directed to publish or post this Ordinance or a
synopsis for the period and in the manner provided by the City Charter and any other applicable
law.
EXHIBIT A TO ORDINANCE
(Purchase and Sale Agreement)
PURCHASE AND SALE
AGREEMENT AND JOINT ESCROW INSTRUCTIONS
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INSTRUCTIONS ("Agreement") is made and entered as of October _, 2014 ("Effective
Date") by and between MGP VIII Properties, LLC, a Delaware limited liability company
("Seller") and the CITY OF PETALUMA, a municipal corporation and charter city ("Buyer" or
"City"). Buyer and Seller are collectively referred to herein as the "parties" and individually as a
`party.
RECITALS
This Agreement is made with reference to the following facts:
A. Seller owns that certain real property known as Assessor's Parcel No. 007-380-027
in Petaluma, California ("Land").
B. Section 53 of the City's General Plan (2025) plans for a Rainier Avenue
Extension and Interchange, which requires Rainier Avenue to be extended to and connect with a
new freeway interchange on Highway 101 between Washington Street and Corona Road and to
provide another cross-town travel route and access to Highway 101 ("Project").
C. The City's General Plan designates areas within the City in which development of
any improvements is limited in anticipation of the future Project ("Designated Area"), and in
1995, the City Council adopted Ordinance No. 1991 N.C.S., approving the plan line for the
Project.
D. A portion of Seller's Land is within the Designated Area.
E. Buyer desires to purchase the portion of Seller's Land within the Designated Area,
which is legally described and depicted as Parcel B in Exhibit A attached hereto and
incorporated by reference, together with all of Sellers right, title and interest in and to: (i) the
improvements and fixtures located on the Land as of the Effective Date; (ii) all easements, rights
and privileges appurtenant, if any, to the Land; and (iii) the personal property owned by Seller
and remaining at or on the Land after Close of Escrow, if any, excluding shopping center art
items, other works of art, and specially designed benches and enclosures ("Personal Property").
collectively referred to herein as the "Property."
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NOW, THEREFORE, for good and valuable consideration the receipt and adequacy of
which are hereby aclamowledged, the parties hereto agree as follows:
AGREEMENT
1. PURCHASE AND SALE. Seller hereby agrees to sell to Buyer, and Buyer
hereby agrees to purchase from Seller, the Property, on the terms and subject to the conditions
set forth in this Agreement. Buyer and Seller acknowledge and agree that although the Land
does not constitute a separate legal parcel for purposes of the California Subdivision Map Act,
Government Code Sections 66410-66499, et seq., Section 66428 of the California Subdivision
Map Act provides an exception for "Land conveyed to ...[a] public entity ..." and that Buyer is a
"public entity" for purposes of said Section. Buyer and Seller further acknowledge and agree
that no public necessity exists which would otherwise require a parcel map or other action to
create the "Land" as a separate legal parcel.
2. PURCHASE PRICE. The purchase price of the Property ("Purchase Price")
shall be Five Hundred Forty Thousand, Five Hundred Sixty -Seven Dollars ($540,567). The
Purchase Price shall be deposited into an escrow account (`Escrow") with First American Title
Insurance Company, 3281 East Guasti Road, Suite 440, Ontario, California 91761 ("Title
Company" or "Escrow Holder") within thirty (30) business days of the Effective Date. The
Purchase Price shall be paid by Buyer in cash or other readily available funds to Seller upon
Close of Escrow in immediately available U.S. funds.
ESCROW AND CLOSE OF ESCROW.
3.1 Escrow. As used in this Agreement, "Close of Escrow" shall mean the
consummation of the purchase and sale of the Property as described herein as evidenced by the
performance by each party of its obligations hereunder and satisfaction of any and all conditions
by Close of Escrow, including the Escrow Holder's recordation and delivery of the Deed by
Seller and Escrow Holder's delivery of the documents as set forth in this Agreement, Title
Company's irrevocable and unconditional commitment to issue the Title Policy upon recordation
of the Deed, and the payment of the Purchase Price by Buyer. Each party shall timely deposit
with Escrow Holder such funds, documents and supplementary written escrow instructions as
may be necessary to consummate this transaction in accordance with this Agreement. To the
extent any such instructions are inconsistent with this Agreement, the terms of this Agreement
shall control, unless the instructions are agreed to and executed by Buyer and Seller.
3.2 Closing Date. Close of Escrow shall take place not later than 5:00 p.m.
Pacific Time on that date which is forty-five (45) days after the Effective Date ("Closing Date").
Time is of the essence with respect to the Closing Date and all other provisions of this
Agreement.
4. CONTINGENCIES; INSPECTIONS.
4.1 Review of Title.
4.1.1 Preliminary Report. Buyer shall only he required to accept fee
simple title to the Property, free and clear of all recorded and unrecorded liens. encumbrances.
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assessments, easements, leases, taxes, and exceptions to title, extent for those exceptions to title
agreed to in writing by Buyer (the "Permitted Exceptions"). Buyer shall have a period of thirty
(30) days after the Effective Date to review and approve or disapprove the condition of title to
the Property. If Seller does not agree in writing to remove any exception disapproved by Buyer
prior to the date that is forty (40) following the Effective Date, Buyer can waive disapproval,
accept the exception as a Permitted Exception and proceed to Close of Escrow or terminate this
Agreement.
4.1.2 Title Insurance.
(a) Buyer's obligation to purchase the Property and complete Close of
Escrow is conditioned upon the irrevocable and unconditional commitment of Escrow Holder to
issue, upon the sole condition of the payment of its regularly scheduled premium, its standard
ALTA extended coverage policy of title insurance ("Title Policy"), insuring Buyer in the amount
of the Purchase Price that title to the Property is vested of record in Buyer as of Close of Escrow
subject only to the printed conditions and exclusions of such policy and the Permitted
Exceptions. Buyer, at its sole cost, may obtain title insurance coverage or endorsements in
addition to the Title Policy, provided that obtaining such additional coverage shall not be a
condition to Close of Escrow hereunder, and shall not delay Close of Escrow hereunder.
(b) Notwithstanding anything to the contrary in this Agreement,
Seller's inability to deliver title to the Property in the condition necessary for Escrow Holder to
issue the Title Policy for any reason shall constitute a failure of a condition precedent to Buyer's
obligation to purchase the Property.
4.1.3 Inspection of Property. Seller acknowledges and agrees that
Buyer's obligation to purchase the Property is conditioned upon Buyer's satisfaction of the
condition of the Property. Seller agrees to allow Buyer access to the Property during escrow for
Buyer to inspect the Property, which may include, but is not limited to, reviewing existing or
conducting new Phase I or Phase II environmental testing. In the event that the condition of the
Property is not satisfactory to the City Manager, the City Manager shall notify Seller, and this
Agreement shall terminate pursuant to Section 13. Buyer shall provide Seller copies of all final
reports and test data obtained by Buyer.
5. DELIVERIES TO ESCROW HOLDER.
5.1 By Seller. Seller shall deliver to Escrow Holder in sufficient time to
allow for closing and funding on the Closing Date, the following instruments and documents:
(a) a grant deed ("Deed") in the form attached hereto as Exhibit C executed by Seller and
acknowledged; (b) a bill of sale for such Personal Property, if any, to be transferred from Seller
to Buyer in connection with this transaction, executed by Seller, without warranty; (c) an
executed copy of the Lease; and (d) such other customary documents reasonably requested by
Escrow Holder as may be reasonably necessary to consummate this transaction in accordance
with this Agreement (collectively. "Seller Deliveries").
5.2 By Buyer. Buyer shall deliver or cause to be delivered to Escrow holder
in sufficient time to allow for closing and finding on the Closing Date, the following funds.
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instruments and documents: (a) inunediately available U.S. funds in the amount of the Purchase
Price; (b) the cash amount required to be paid by Buyer pursuant to this Agreement, if any, after
the costs and prorations are computed in accordance with Sections 6 and 7, below; (c) written
approval of Buyer's final closing statement; (d) a Certificate of Acceptance ("Certificate of
Acceptance") substantially in the form attached to the Deed, duly executed on behalf of Buyer
and acknowledged; (e) an executed copy of the Lease; (f) a Certificate of Compliance
("Certificate of Compliance") for Seller's remaining property commonly known as Deer Creek
Village, satisfactory to the Title Company and sufficient to allow the Title Company to issue
Subdivision Map Act endorsements for Seller's remaining property or any portion thereof; and
(g) such other customary documents requested by Escrow Holder as may be reasonably
necessary to consummate this transaction in accordance with this Agreement (collectively,
"Buyer Deliveries").
5.3 Mutual Obligations.
5.3.1 Seller and Buyer shall each deposit such other instruments as are
reasonably required (a) to confirm their respective authority to close this transaction, (b) by
Escrow Holder, or (c) otherwise to consummate the settlement, purchase and sale transactions in
accordance with the terms hereof (provided that in no event shall any such documents increase
the liability of Buyer or Seller). Seller and Buyer hereby designate Escrow Holder as the
"Reporting Person" for this transaction pursuant to Section 6045(e) of the Internal Revenue Code
and the regulations promulgated thereunder, and agree to execute such documentation as is
reasonably necessary to effectuate such designation.
5.3.2 The Parties agree that the Seller shall lease from Buyer and Buyer
shall lease to Seller the Property immediately upon the Close of Escrow based on the terms and
conditions set forth in the lease attached hereto as Exhibit B ("Lease"), and incorporated by
reference. Seller and Buyer shall each execute a copy of the Lease prior to the Close of Escrow,
and deliver a signed copy to the Escrow Holder.
6. COSTS AND EXPENSES OF CLOSING. Upon Close of Escrow, Seller shall
pay all fees of its own counsel. Buyer shall pay all Escrow fees and County transfer taxes, the
premium for the Title Policy, the premium for any other title endorsements or coverage
requested by Buyer, the fees of its own counsel and all other closing costs and charges and
recording costs.
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7.1 General. For purposes of calculating prorations, Buyer shall be deemed
to hold title to the Property and therefore shall be solely entitled to the income and responsible
for the expenses, for the entire day upon which Close of Escrow occurs.
7.2 Taxes and Assessments. Seller shall be responsible for that portion of
current property taxes and assessments and any penalties and interest thereon allocable to the
period prior to Close of Escrow. The portion of current property taxes which would otherwise be
allocable to the period after Close of Escrow shall not be allocated, as Buyer is exempt Irons
payment of property taxes. Seller shall have the sole right. after Close of Escrow. to apply to the
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Sonoma County Tax Collector for refund of any excess property taxes which have been paid by
Seller with respect to the Property. This refund would apply to the period after Buyer's
acquisition of the Property, pursuant to Revenue and Taxation Code Section 5096.7. Any refund
for real estate taxes or assessments applicable to the period preceding Close of Escrow, whether
paid before or after Close of Escrow, relating to the Property shall be paid to Seller, and Buyer
shall have no claim or right whatsoever thereto. The remaining principal amount (after the
application of the prorated portion of any installment applicable to the period prior to the Closing
Date) of any and all assessments and/or bonds which encumber the Property or any part thereof
shall not be prorated or apportioned but shall be assumed in full by Buyer at Close of Escrow
(and Buyer shall not be entitled to a credit from Seller against the Purchase Price in the amount
of such assessments and/or bonds).
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Upon Close of Escrow, Escrow Holder shall promptly undertake the following in the manner
indicated. Items 8.1 through 8.3 shall occur simultaneously.
8.1 Funds. Disburse all funds deposited with Escrow Holder by Buyer in
payment of the Purchase Price as follows:
8.1.1 If, as the result of the costs, prorations and credits pursuant to
Sections 6 and 7, above, amounts are to be charged to the account of Seller, deduct the total
amount of such charges from the Purchase Price. If, as a result of the costs, prorations and
credits pursuant to Sections 6 and 7, above, amounts are to be charged to the account of Buyer,
collect the total amount of such charges ("Buyer's Charges") from Buyer and disburse such
amounts to the appropriate payees.
8.1.2 Immediately disburse to Seller the Purchase Price, as adjusted
pursuant to Section 8.1.1.
8.1.3 After all disbursements to Seller are complete, disburse the
remaining balance of the funds in Escrow, if any, to Buyer.
8.2 Recording and Filing. Cause the Deed and Certificate of Acceptance to
be recorded in the Official Records of Sonoma County.
8.3 Title Policy. Cause the Title Company to issue the Title Policy to Buyer.
8.4 Disbursement of Documents to Buyer. Disburse to Buyer the FIRPTA
certificate executed by Seller, certified copies of the recorded Deed and Certificate of
Acceptance and all of Seller Deliveries and any other documents (or copies thereof) deposited
into Escrow to which Buyer is entitled pursuant to the terms of this Agreement.
8.5 Disbursement of Documents to Seller. Disburse to Seller all Buyer
Deliveries and any documents (or copies thereon deposited into Escrow to which Seller is
entitled pursuant to the terms of this Agreement.
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8.6 Closing Statement. Deliver to each of Buyer and Seller a closing
statement showing the distribution, application, and receipt of all funds processed through the
Escrow.
9. CONDITION OF TITLE. Buyer shall accept title to the Property subject to the
following: (a) all Applicable Laws now or hereafter in effect; (b) a state of facts which an
accurate current survey and physical inspection of the Property would reveal including all
existing easements and encroachments, if any; and (c) the Permitted Exceptions.
10. "AS -IS" SALE; RELEASES AND WAIVERS.
10.1 Waiver and Release of Benefits. Seller acknowledges that through the
acquisition of the Property, Seller may be or may become eligible to receive compensation,
reimbursement, assistance, including, but not limited to, the fair market value of real and
personal property, loss of goodwill, loss of profits, actual and reasonable expenses for moving a
business, loss of tangible real property as a result of moving the business, expenses incurred in
searching for replacement site for the business, expenses to reestablish at the new site, "in -lieu
payments" and other such benefits (collectively, "Benefits") under the California Relocation
Assistance Act (Government Code, § 7260, et seq.), Title 25 of the California Code of
Regulations, Article I, § 19 of the California Constitution, the California Eminent Domain Law
(Civil Procedure Code, § 1230.010, et seq.) or other similar local, state, or federal statute,
ordinance, regulation, rule, or decisional law (collectively "Compensatory Laws"). Seller
further acknowledges that it has received full and fair compensation of all Benefits Seller is or
might be or might become entitled to recover from Buyer as a result of, or in any way related to,
the acquisition of the Property, the execution of the Lease, and the subsequent expiration of the
term of the Lease or termination of the Lease. Therefore, being fully informed of and
understanding the acknowledgements made herein and of Seller's rights or potential rights to
benefits under the Compensatory Laws, Seller hereby expressly and unconditionally waives, and
releases Buyer from, any and all rights of Seller to claim, demand, sue for, or receive any
Benefits which Seller is or might be or might become entitled to recover from Buyer as a result
of, or in any way related to the acquisition of the Property, the execution of the Lease, and the
subsequent expiration of the term of the Lease or termination of the Lease. Buyer acknowledges
and agrees that the release and waiver set forth in this paragraph is material consideration for
Buyer entering into this Agreement and Lease, and that but for this release and waiver, Buyer
would not have entered into this Agreement and Lease. By releasing and forever discharging the
claims described herein, Seller expressly waives any rights under California Civil Code section
1542, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR."
10.2 Seller Indemnity for Tenant Claims. Seller shall indemnify, defend and
hold Buyer harmless from any claims, actions, causes of action, suits" proceedings" costs"
damages" losses, liabilities and expenses (including reasonable attorneys" fees and costs) asserted
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by or payable to any tenant or subtenant of the Property or any other person or entity claiming a
right to use or occupy the Property pursuant to a written or oral agreement with Seller or any
Seller Parties, including any claims for leasehold bonus value, furniture fixtures and equipment,
loss of business goodwill or assistance or benefits provided for under the Compensatory Laws.
10.3 Materiality. The provisions of this Section 10 are a material portion of
the consideration given by each party to the other in exchange for such party's performance
under this Agreement, and shall not negate or limit the rights of Buyer for any breach of a
representation or warranty made by Seller in Section 11 (Representations and Warranties). This
Section 10 shall survive Close of Escrow.
11. REPRESENTATIONS AND WARRANTIES.
11.1 Buyer. Buyer hereby represents and warrants to Seller, as of the date of
this Agreement and as of Close of Escrow as follows:
11.1.1 Organization. Buyer is a charter city and municipal corporation,
duly formed and qualified to conduct business in the State of California.
11.1.2 Requisite Action. All requisite action has been taken by Buyer in
connection with Buyer's execution of this Agreement, the agreements, instruments or other
documents to be executed by Buyer pursuant to this Agreement, and the consummation of the
transactions contemplated hereby and thereby. No consent of any judicial or administrative
body, governmental or quasi -governmental authority or other third party is required for Buyer to
enter into this Agreement and to consummate the transactions contemplated herein.
11.1.3 Authority. The individual(s) executing this Agreement and the
agreements, instruments or other documents to be executed by Buyer pursuant to this Agreement
on behalf of Buyer each have been duly authorized to bind Buyer to the terms and conditions
hereof and thereof.
11.2 Seller. Except as contained or shown in the Permitted Exceptions
and/or the documents recorded in the Official Records of Sonoma County and/or otherwise
known to Buyer, Seller hereby represents and warrants to Buyer, as of the date of this Agreement
and as of Close of Escrow, as follows:
11.2.1 Organization. Seller is a limited liability company created under
the laws of the State of Delaware, and qualified to conduct business in the State of California.
11.2.2 Requisite Action. All requisite action has been or will be taken by
Seller in connection with Seller's execution of this Agreement, the agreements, instruments or
other documents to be executed by Seller pursuant to this Agreement, and the consummation of
the transactions contemplated hereby and thereby. Other than those obtained by Seller, no
consent of any partner, shareholder, creditor, investor, judicial or administrative body.
governmental or quasi -governmental authority or other third party is required for Seller to enter
into this Agreement and to consummate the transactions contemplated herein.
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11.2.3 Authority. The individual(s) executing this Agreement and the
agreements, instruments or other documents to be executed by Seller pursuant to this Agreement
on behalf of Seller each have been or will be duly authorized to bind Seller to the terms and
conditions hereof and thereof.
11.2.4 Solvency. Seller has not, and as of the Closing Date shall not have
(a) made a general assignment for the benefit of creditors, (b) filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by Seller's creditors, (c) suffered the
appointment of a receiver to take possession of all, or substantially all, of Seller's assets, which
remains pending as of such time, (d) suffered the attachment or other judicial seizure of all, or
substantially all, of Seller's assets, which remains pending as of such time, (e) admitted in
writing its inability to pay its debts as they come due, or (f) made an offer of settlement,
extension or composition to its creditors generally.
11.2.5 FIRPTA. Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Internal Revenue Code of 1986.
11.2.6 Contracts. To Seller's actual knowledge, other than the Permitted
Exceptions, and except as provided in Section 5.3.2 and the Lease referenced therein, there are
no contracts, agreements, or equipment leases relating to the operation, repair or maintenance of
the Property, nor any easements, licenses, covenants, restrictions, agreements, or other
documents, the terms of which extend beyond midnight of the day preceding the Closing Date
(collectively, "Contracts"). From and after the Effective Date, Seller shall not create, enter into,
amend, or modify any Contracts or other agreements relating to the Property, whether written or
oral, without Buyer's prior written consent.
11.2.7 Leases or Occupancy of Premises. To Seller's actual knowledge,
other than the Permitted Exceptions, and except as provided in Section 5.3.2. and the Lease
referenced therein, or otherwise disclosed to Buyer, there are no agreements with or rights
granted to others or reserved by Seller or Seller Parties, to use, occupy, or enjoy all or any
portion of the Property, whether written or oral, and neither Seller nor Seller Parties have
created, entered into, amended, or modified any lease or other agreement, whether written or
oral, which creates, grants, hypothecates, or vests in Seller, any Seller Parties or any third party
any possessory interest in, or right to use, occupy, or enjoy, the Property or any portion thereof.
or which permits Seller, any Seller Parties or any third party to create any such right or interest,
or which reserve to Seller any such right or interest, whether written or oral.
11.2.8 No Seller Non -Disclosure. To Seller's actual knowledge, there
are no adverse physical or environmental conditions on the Property except as set forth in any
Phase I and Phase II environmental reports, and related studies and documents pertaining to the
physical and environmental condition of the Property, copies of which have been previously
provided by or on behalf of Buyer to Seller, and Seller does not have actual knowledge of any
other adverse physical or environmental conditions on the Property.
11.2.9 Other Seller Warranties. Until the Closing Date. Seller shall:
01 335U 0001M 1'_ I5
943A76.4
(a) Insurance. Maintain substantially the same casualty and liability
insurance coverage with respect to the Property as is maintained by Seller as of the date of this
Agreement. Seller shall terminate those policies of insurance held in its capacity of fee owner as
of noon on the Closing Date and Buyer shall be responsible for obtaining its own insurance or
self insurance thereafter.
(b) Operation. Operate and maintain the Property in substantially the
same condition as exists as of the Effective Date, normal wear and tear excepted. Seller shall not
store, handle, process, discharge, or release any Hazardous Materials on or at the Property, nor
shall Seller permit any Seller Parties or third party to do so.
(c) Liens. Not create, extend or modify any existing encumbrances or
create any new encumbrances to all or any portion of the Property or permit any lien or
encumbrance to remain against the Property other than liens and encumbrances that can be
discharged prior to Close of Escrow and that in fact are discharged prior to or at Close of Escrow
and do not give rise to any obligations or liability of Buyer.
(d) Copies of Written Notices. From and after the Effective Date,
promptly provide Buyer with copies of all written notices received or given by Seller after the
Effective Date which assert any material breach of agreements (including the Contracts),
Applicable Laws, covenants or permits, or other violations applicable to the Property.
12. CLOSING CONDITIONS.
12.1 Conditions of Obligations of Seller. The obligations of Seller under this
Agreement to sell the Property shall be subject to the satisfaction of the following conditions on
or before Close of Escrow, except to the extent that any of such conditions may be waived by
Seller at Close of Escrow in Seller's sole and absolute discretion.
12.1.1 Representations, Warranties and Covenants of Buyer. All
representations and warranties of Buyer contained in this Agreement shall be true and correct in
all material respects as of Close of Escrow with the same force and effect as if such
representations and warranties were made anew as of Close of Escrow, and Buyer shall have
performed and complied in all material respects with all covenants and agreements required by
this Agreement to be performed or complied with by Buyer on or prior to Close of Escrow.
12.1.2 No Orders. No order, writ, injunction or decree (collectively,
"Order") shall have been entered and be in effect by any court of competent jurisdiction or any
authority, and no requirement of law shall have been promulgated or enacted and be in effect,
that restrains, enjoins or invalidates the transactions contemplated hereby, provided that if any of
the foregoing shall be in effect as a direct result of acts taken or omissions made by or on behalf
of Seller or Seller Parties with the intention of preventing Close of Escrow, the failure of Seller
to close by reason any of the foregoing shall constitute a default by Seller hereunder.
12.2 Conditions to Obligations of Buyer. The obligations of Buyer under this
Agreement to purchase the Property shall be subject to the satisfaction of the following
conditions on or before Close of Escrow. except to the extent that any of such conditions may be
waived by Buyer in writing at Close of Escrow in the Buyers sole and absolute discretion.
01 3330 0001 \781 115 '
943476.4
0
12.2.1 Representations, Warranties and Covenants of Seller. All
representations and warranties of Seller contained in this Agreement shall be true and correct in
all material respects as of Close of Escrow with the same force and effect as if such
representations and warranties were made anew as of Close of Escrow and Seller shall have
performed and complied in all material respects with all covenants and agreements required by
this Agreement to be performed or complied with by Seller on or prior to Close of Escrow.
12.2.2 No Orders. No Order shall have been entered and be in effect by
any court of competent jurisdiction or any authority, and no requirement of law shall have been
promulgated or enacted and be in effect, that restrains, enjoins or invalidates the transactions
contemplated hereby; provided that if any of the foregoing shall be in effect as a direct result of
acts taken or omissions made by or on behalf of Buyer with the intention of preventing Close of
Escrow, the failure of Buyer to close by reason of any of the foregoing shall constitute a default
by Buyer hereunder.
12.2.3 Seller Deliveries. Seller has deposited into Escrow all of Seller
Deliveries.
12.2.4 Title Policy. Title Company is irrevocably and unconditionally
committed to issue to Buyer the Title Policy in the amount of the Purchase Price, insuring that
fee title to the Land is vested in Buyer, subject only to the printed conditions and exclusions of
such policy and the Permitted Exceptions.
13. TERMINATION AND DEFAULT.
13.1 Termination. If this Agreement terminates pursuant to any provision
hereof allowing for termination, and if neither party is in breach hereof, then: (a) any funds
(together with accrued interest thereon) that have been deposited into Escrow by Buyer shall be
immediately released to Buyer; (b) the Escrow shall be cancelled; (c) Buyer and Seller shall each
pay one-half (1/2) of any escrow cancellation fees charged by Escrow Holder; (d) Buyer may
proceed to acquire the Property through eminent domain proceedings without waiver by Seller of
any rights, claims or defenses that it might have with respect thereto at such time; and (e) this
Agreement shall be of no further force or effect except as to those provisions, if any, that
expressly provide that they shall survive termination.
13.2 Default. If either Buyer or Seller defaults in performance of its respective
obligations under this Agreement, the non -defaulting party shall be entitled to seek and pursue
any and all legal and/or equitable remedies available pursuant to Applicable Laws including
institution and prosecution by Buyer of an action in eminent domain against Seller if the
purchase and sale transaction as set forth herein is not consummated. without waiver by Seller of
any rights, claims or defenses that it might have with respect thereto at such time.
14. MISCELLANEOUS.
14.1 Possession. Seller shall retain possession of the Property upon Close of
Escrow, subject to the terms and conditions of the Lease, attached hereto as Exhibit B. and
executed by the Parties.
0133,50 0001\7s 1215
943476.4
14.2 Exhibits. All exhibits attached hereto shall be deemed incorporated by
this reference as though fully set forth herein.
14.3 Notices. Any notice, demand or request required or permitted hereunder
shall be given in writing at the addresses set forth below by any of the following means:
(a) personal service; (b) telephonic facsimile with telephonic confirmation of receipt; or
(c) nationally recognized overnight commercial mail service.
Buyer: City of Petaluma
11 English Street
Petaluma, CA 94952
Attention: City Manager
Tel: (707) 778-4345
Fax: (707) 778-4419
Seller: MGP VIII Properties, LLC
425 California Street, Eleventh Floor
San Francisco, CA 94104
Attention: Bradley A. Geier
Tel: (415) 693-9000
Fax: (415)693-0480
Copies to:
Title Company or
Escrow Holder:
U U350.000 NS 1'15.2
943476.A
Daniel G. Jordan, Esq.
Glaser Weil
10250 Constellation Blvd., 18th floor
Los Angeles, CA 90067
Tel: (310) 282-6270
Fax: (310) 556-2920
Wendy Hagen Bowen, Vice President and
Senior National Underwriter
National Commercial Services
First American Title Insurance Company
3281 East Guasti Road, Suite 440
Ontario, California 91761
Tel: 909-510-6225
Fax: 877-461-2090
First American Title Insurance Company
3281 East Guasti Road, Suite 440
Ontario, California 91761
Attention: Mary L. Brown
Senior Commercial Escrow Officer
Tel: (909) 510-6237
Fax: (877) 461-2088
Such addresses may be changed by notice to the other parties given in the same
mariner as above provided. Any notice, demand or request sent pursuant to either
subparagraph (a) or (b), above, shall be deemed received upon such personal service or upon
dispatch by electronic means. Any notice, demand, or request sent pursuant to subparagraph (c),
above, shall be deemed received on the business day immediately following deposit with the
commercial mail service.
14.4 Successors and Assigns. Subject to the restrictions on assignment set
forth below, this Agreement shall be binding upon and inure to the benefit of Seller and Buyer
and their respective estates, personal representatives, heirs, devisees, legatees, successors and
assigns. Neither party may assign any of its rights and/or delegate any of its obligations under
this Agreement without first obtaining the prior written consent of the other, which consent may
be withheld by such party at its sole discretion. No assignment shall be effective and a party's
consent shall not be effective until and unless any assignee as may be consented to by such party,
shall expressly assume in writing all obligations of the other party under this Agreement and
shall further acknowledge and agree in writing to be bound by all of the provisions of this
Agreement as if the assignee had originally executed this Agreement as buyer or seller, as
applicable. Except as is otherwise expressly provided herein, nothing in this Agreement shall
confer any rights or benefits on any person or entity that is not a signatory to this Agreement or
apply to any property other than the Property.
14.5 Entire Agreement; Amendment. This Agreement (which includes all
exhibits hereto) embodies the entire agreement and understanding between the parties relating to
the subject matter hereof, and all prior negotiations, agreements and understandings, oral or
written, are hereby revoked, cancelled and rescinded and are all merged herein and superseded
hereby. Any amendment to this Agreement, including any oral modification supported by new
consideration, must be reduced to writing and signed by both parties in order to be effective.
14.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to conflict of laws rules.
14.7 Counterparts; Waiver. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. Any waiver of the performance of any covenant,
condition or promise by either party, in order to be effective, must be in a writing signed by the
party who has allegedly waived the covenant, condition or promise in question.
14.8 Severability. Should any part, term or provision of this Agreement or any
document required herein to be executed or delivered be declared invalid, void or unenforceable,
all remaining parts, terms and provisions hereof shall remain in full force and effect and shall in
no way be invalidated, impaired or affected thereby.
14.9 Attorneys' Fees. If either party tiles any action or brings any proceeding
against the other arising from this Agreement_ or is made a party to any action or proceeding
943476.4
i2
brought by Escrow Holder, then as between Buyer and Seller, the prevailing party shall be
entitled to recover as an element of its costs of suit, and not as damages, reasonable attorneys'
and experts' fees and litigation expenses to be fixed by the court.
14.10 Construction. The parties hereto agree that each party and its counsel or
advisor have reviewed and revised this Agreement and that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not apply in the interpretation
of this Agreement or any amendments or exhibits hereto.
14.11 Cooperation. Each party agrees to cooperate with the other in closing
this transaction and, in that regard, to sign any and all documents which may be reasonably
necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement.
14.12 First Option to Purchase. In the event that Buyer abandons the
proposed Project, and decides to sell the Property to a party that is neither a governmental entity
nor a non-profit ("Private Party"), Buyer agrees to first offer the Property for sale on the same
terns and conditions as it would offer the Property for sale to a Private Party to Seller or the then
owners of the Land which the Property was a part prior to the sale to the City pursuant to this
Agreement (collectively referred to as "Offeree"). Offeree shall then have fifteen (15) calendar
days to notify Buyer of whether Offeree intends to accept the offer or reject it. Any counter offer
by Offeree shall be considered a rejection, and the Buyer shall be entitled to sell the Property to
any Private Party without any further notice to Offeree. If requested by Seller, the parties agree
to execute and record a memorandum with respect to this first option to purchase.
[Signatures follow on next page]
01335U 0001�78L'_ 15 '
943476.4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year set forth under their respective signatures.
SELLER:
MGP VIII Properties, LLC,
a Delaware limited liability company
Dated: By: Merlone Geier Partners, L.P.,
a California limited partnership
its Member
Dated: By: MGGP, L.P.
a California limited partnership
its General Partner
By: Merlone Geier I, LLC,
a California limited liability company
its General Partner
By:
Name:
Title:
BUYER:
CITY OF PETALUMA.
a charter city and municipal corporation
Dated:
By:
John C. Brown, City Manager
Approved as to Form:
Eric W. Danly. City Attorney
0Li350 IIWI 781,[5
943476.4
EXHIBIT A
(to Purchase and Sale Agreement)
EXHIBIT A
161 OL!W11a11D YNNIw Y[13901aI"M11
0133,50 o01\78I'Ii'
9280090C 80006/00 49 ���
5467
RJM:mrs
June 20, 1995
Page 2 of 3'
IWU019IAi�cTY
BEGINNING at the northwest corner of Parcel 3 of Ii'atc'el Map No. 170 recorded in
Book 316 of Maps at Page 1:9 Sonoma.Courity Records (labeled Point "B'); thence
N 35038'49" E 884.83 it; thence S 54°2658° E 81'.57 t, thence S 33°27'58" W 29.1.67
it-, 'thence S 17°4254° W 54.58 it; thence S 35°43'12"'-W 102.56 ft; thence S 07°43'12"
E 41.01 ft; thence S 51035'24" E 71.73 it, thence through a curve concave to the right
with a radius of 264 it through a central angle. of 22°10.'49"'for an arc length of 102.2 ft;
thence continuing along a eunre.concave to the -right with a. radius of 215 ft'through a .
central angle of 260531,1' for an arc length of 1.00:89 ft; thence S 02'31'24' E 134.25
it; thence through a curve concave to the left with a radius of 467. IL -through a, central
angle of 43°30'18` for an arc. le ngth. of 346,44;1hence S 51°38'41" E 679.51 ft to the
easterly right of way line of U.S. Highway 1'01'; thence northerly along said easterly
right of way N 5604010" W"1017".94 ft; thence N 52035'03" W 551.45 to the point of
beginning, point "B".
PARCEL"C"
BEGINNING at the north east corner of Parcel 3.of that certain Parcel- Map No. 170 as
recorded in Book 316 of Maps .at page 19 Sonoma County Records (labeled Point "C"
on EXHIBIT)' thence S 54.c 6W 8° E 25 it; thence S 34007'35" E 28.79 it; thence
S 54026'58" E 100.00 ft'; thence 5 74"46'21' E 28.79 ft; thence S 54°26'58" E 87.45 it;
thence N 69'88'05"'W 158 ft;; thee N 53°51'00" W 130.93 ft; thence N 35°33'02" E
36.26 to the point of beginningip
oint "C'
These descriptions ate based on scaled and recatd distances.
ENGINEER'S STATEMENT:
I hereby state that I am a registered Civil Engineer of the State of California,, that this
Plat and Description were prepared under my supervision..
Dated: dliu 0 a 7 1'9i
Prepared by the
MACKAY & S_.... _
Fairfield, Califomia
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EXHIBIT B
LEASE
013350 0001\791' 15.2
9186001 6C 80006/0.9
EXHIBIT B
(to Purchase and Sale Agreement)
LEASE AGREEMENT
This Lease Agreement ("Agreement") is made and entered into this day of
, 2014, by and between the City of Petaluma (`City") and MGP VIII
Properties, LLC, a Delaware limited liability company ("Lessee").
WHEREAS, Lessee owns that certain real property in Petaluma, California commonly
known as Assessor's Parcel No. 007-380-027, on which Lessee has built a shopping center
commonly known as Deer Creek Village (referred to herein as "Shopping Center Property"); and
WHEREAS, adjacent to the Shopping Center Property, on the real property legally
described and depicted in Exhibit A ("Land"), Lessee has built, operates and maintains portions
of common area for the Shopping Center Property, which include open space, walking trails,
biking trails, art installations, art exhibits and a dog pari: open to the public ("Dog Park")
(collectively referred to as "Improvements"). Property shall refer to the Land and the
Improvements together; and
WHEREAS, the City's General Plan has planned for a Rainier Avenue Extension and
Interchange, which requires Rainier Avenue to be extended to and connect with a new freeway
interchange on Highway 101 between Washington Street and Corona Road and to provide
another cross-town travel route and access to Highway 101 ("Project"); and
WHEREAS, the City's General Plan designates areas within the City in which
development of any improvements is limited in anticipation of the future Project ("Designated
Area"), and in 1995, the City Council adopted Ordinance No. 1991 N.C.S., approving the plan
line for the Project; and
WHEREAS, the Property is within the Designated Area and the City has purchased the
Property for the Project, for future construction of the Project; and
WHEREAS, the Lessee desires to continue to operate and maintain the Property; and
WHEREAS, the City desires to allow the Lessee to continue to operate and maintain
Property, pursuant to the terms of this Agreement, provided the City incurs no cost related to the
operation and maintenance of the Property.
NOW, THEREFORE. in consideration of the promises and mutual covenants contained
in this Agreement. the parties hereby agree as follows:
943477A i i�
I . Lease of Pronertv. Contingent upon fee simple title being conveyed to the City for the
Property. City leases to Lessee and Lessee leases from City, pursuant to the terms of this
Agreement, the Property for the Permitted Use as defined in Section 4 of this Agreement.
Any personal property on the Property including, without limitation, shopping center art
items, other works of art, specially designed benches and enclosures, and any items
installed to comply with the terms and requirements of any public art program imposed
by the City, among other things ("Personal Property") shall remain the property of Lessee
and Lessee shall be entitled to remove such Personal Property from time to time during
the Term of this Agreement and at the expiration or earlier termination of this
Agreement.
2. Term. The term of this Agreement shall be for twelve (12) years, commencing on
("Commencement Date") and ending on
("Expiration Date"), unless sooner terminated by
the City or Lessee pursuant to Section 5 of this Agreement. In the event that the Project
has not been constructed at the Expiration Date, the City shall have the option to renew
this Agreement on the same terms and conditions on a year to year basis.
3. Lease Pavment. Lessee shall pay to City the sum of One Dollar ($1.00) per year as the
Lease Payment for the Property. The Lease Payment shall be payable in advance on each
anniversary of the Commencement Date during the Term of this Agreement. Lessee shall
pay the first Lease Payment to City upon execution of this Agreement. Subsequent Lease
Payments shall be made payable to the City of Petaluma at Post Office Box 61, Petaluma,
California 94953.
4. Permitted Use. Lessee shall be permitted to use the Property for: i) common area for the
Shopping Center Property and common use by the public which may include, without
limitation, open space, walking trails, biking trails, art installations, and the Dog Park; ii)
the operation, maintenance and repair of the Property; iii) the construction of one or
more shade structures and the repair and replacement of existing improvements from time
to time within the Property and intended for common use; iv) public and private
fu actions not to exceed more than four (4) in one calendar year including, but not limited
to, art wallas and/or art exhibits; v) for the installation, operation, maintenance, repair,
replacement. relocation and removal of Personal Properly on the Property; and vi) all
purposes incidental thereto ("Permitted Use"). Lessee may temporarily close portions of
the Property and may temporarily fence off portions of the Property as reasonably
required Ibr the purpose of maintenance, repair, construction and reconstruction. No
other use, except in conjunction with Lessee's Permitted Use may be conducted on the
9434774 n
J-�
Property. The City may treat any use of the Property by Lessee that is not a Permitted
Use as a breach of this Agreement subject to termination in accordance with Section 5
below.
5. Termination. This Agreement may be tenninated at any time, including prior to the end
of the Term, with or without cause by the City or the Lessee. The City may terminate
this Agreement giving the Lessee thirty (30) days prior written notice of termination
addressed to MGP VIII Properties, LLC, 425 California Street, Eleventh Floor, San
Francisco, California 94104 Attn: Property Management.
6. Assignment. Sublicensina or Deleuation. Lessee may not assign or sublease Lessee's
rights under this Agreement or delegate any of Lessee's obligations under this Agreement
except that Lessee shall be allowed to contract with one or more third party contractors to
perform Lessee's maintenance, repair and replacement obligations as defined in Sections
4 and 12 under this Agreement without the prior written consent of City. Except as set
forth in this Section 6, any purported assignment, sublease, or delegation without prior
written City consent will be void and the City may treat any such purported assignment,
sublease or delegation as a breach of this Agreement subject to termination in accordance
with Section 5. Notwithstanding anything to the contrary in this Section or this
Agreement, Lessee may assign this Agreement to a future buyer of Lessee's Shopping
Center Property, subject to such assignee assuming, all of Lessee's obligations under this
Agreement, including but not limited to, Lessee's Indemnification, Insurance, Lessee
Obligations and Bonds and Release pursuant to Sections 10, 11, 12 and 16 of this
Agreement.
7. Alteration of Pronertv. Lessee shall obtain consent from the City, which shall not be
ruucasonably withheld, conditioned or delayed for any material change to the walking
trails, biking trails or any material increase in the size of the Dog Park on the Property.
City hereby authorizes Lessee to make all other alterations, installations, maintenance,
repair, replacement, relocation and removal of portions of the Property and Personal
Property, and to construct one or more shade structures within the Property intended for
common use. Lessee may temporarily close portions of the Property and may temporarily
fence off portions of the Property as reasonably required for the purpose of maintenance,
repair, construction and reconstruction. If such closure exceeds twenty four (24) hours,
Lessee shall notify City at least two (2) days in advance of the closure. Lessee shall be
responsible for obtaining all required permits, including but not limited to building
permits, prior to commencing work on any alterations pursuant to this Section 7. The
943477.4 �A5
City may treat any failure of Lessee to comply with the requirements of this Section 7 as
a breach of this Agreement subject to termination in accordance with Section 5.
8. Richt of Entrv. To the maximum extent provided by law, City shall have the right to
enter the Property at all reasonable times, to inspect the Property, and to ensure
compliance with this Agreement. Lessee shall provide City with a key to all Lessee -
furnished locks securing the Property and/or City shall retain a key to any City -provided
lock or locks.
9. Government Reeulations. Lessee shall comply with all statutes, ordinances and
regulations of the federal, state, county and municipal authorities presently in effect, or
which become effective during the Term of this Agreement, pertaining to the use of the
Property pursuant to this Agreement. City may treat Lessee's failure to comply with such
statutes, ordinances and regulations as a breach of this Agreement subject to termination
in accordance with Section 5.
10. Indemnification. Lessee shall indemnify, defend with counsel acceptable to the City
(which acceptance will not be unreasonably withheld)and hold harmless City and its
officers, officials, employees, agents and volunteers from and against any and all liability,
loss, damage, claims, expenses, and costs (including, without limitation, attorney's fees
and costs and fees of litigation) (collectively, "Liability") of every nature arising out of or
in connection with Lessee's use and occupation of the Property (including, but not
limited to, Lessee's operation and maintenance of the Dog Park), and/or Lessee's failure
to comply with any of its obligations contained in this Agreement. Notwithstanding the
foregoing, to the extent that this Agreement is a "construction contract" within the
definition of Civil Code Section 2783, as may be amended from time to time, such
indemnity shall not include Liability for the active negligence of City.
11. Insurance. Lessee shall procure and maintain in effect for the duration of this Agreement
insurance in accordance with this Section 11 and Exhibit B. Exhibit B sets forth the
minimum kinds and amounts of insurance that Lessee nnist maintain pursuant to this
Agreement, as well as required endorsements and other requirements. City may treat
failure of the Lessee to maintain insurance in effect for the Term of this Agreement in
accordance with this Section 11 and Exhibit B as a breach of this Agreement subject to
termination in accordance with Section 5.
12. Lessee Oblieations and Bonds. Durin- the Term of this Agreement. Lessee shall
manage, operate and keep (or cause to he managed, operated and kept) the Property.
including the Personal Property, in good condition and repair. at Lessee's sole cost and
943477.4
expense. Said maintenance and repair shall include, without limitation, (i) cleaning.
maintaining and repairing the bike or pedestrian trails and the Dog Park, (ii) keeping the
Property free of refuse and unreasonable obstruction and properly drained, (iii)
maintaining the landscaping within the Property; (iv) maintaining and repairing the utility
systems serving the Property; (v) complying with the terns of the public art program,
including the maintenance, repair and replacement (if and when necessary) of any
improvements which are a part of the public art program; (vi) repair or replace broken,
bent or weathered signs; (vii) repair and replace fencing as required; (viii) removing
graffiti within seventy-two (72) hours of report or discovery; and (ix) maintaining
lighting fixtures as operational at all times. Upon execution of the Agreement by Lessee,
Lessee shall provide to the City a Maintenance Bond ("Maintenance Bond") issued by an
admitted surety insurer using the City's standard maintenance bond form in the initial
sum of One Hundred Forty Four Thousand Dollars ($144,000.00) as security for the
Lessee's maintenance of the Property and other obligations under this Agreement. The
Maintenance Bond shall remain in effect as long as this Agreement remains in effect. For
each year the Maintenance Bond is in effect, the amount of such Maintenance Bond shall
be reduced by Twelve Thousand Dollars ($12,000.000). For example, if the Maintenance
Bond is in effect for two (2) years, the amount of the Maintenance Bond required in the
third year shall be One Hundred Twenty Thousand Dollars ($120,000.00) and if the
Maintenance Bond is in effect for five (5) years, the amount of the Maintenance Bond
required in the sixth year shall be Eighty Four Thousand Dollars ($84,000.00). If the
Lessee fails to maintain or operate the Property, including but not limited to the Dog
Park, as required by this Section 12, during the Term of this Agreement, the City may
maintain or operate the Property and the Lessee's surety for the Maintenance Bond shall
be liable to the City for the City's cost of maintenance, operation and liability insurance
coverage of the Property as set forth in Section 11. The Maintenance Bond shall be in a
form reasonably acceptable to the City Attorney. The Maintenance Bond shall be
obtained from a surety company that is duly licensed or authorized in the State of
California to issue bonds. If the surety on any bond famished by Lessee is declared
bankrupt or becomes insolvent or its right to do business in California is terminated, the
Lessee shall within seven (7) days thereafter substitute another bond and surety, which
satisfies the requirements of this provision. In the event the Shopping Center Property is
sold during the Tenn of this Agreement, Lessee's requirement to provide the
Maintenance Bond shall be extinguished effective on the date the title to the Shopping
Center Property transfers to a new owner, provided the new owner has assumed all of
Lessee's obligations under this Agreement, including but not limited to. Lessee's
943477.4 rL�
Indemnification, Insurance, Lessee Obligations and Bonds and Release pursuant to
Sections 10, 11, 12 and 16 of this Agreement.
13. Statutory Notice Possessory Interest Tac Lessee is advised that under California
Revenue and Taxation Code Section 107.6, execution of this Agreement may create a
possessory interest in Lessee subject to property taxation. Lessee hereby agrees that if
such possessory interest is created and is subject to property taxation, Lessee shall be
solely responsible for the payment of any property taxes levied on any such interest.
14. Prevailing WaQe. This Agreement is subject to the requirements of the California
Prevailing Wage Law, California Labor Code Section 1720 et seq., and Lessee shall
comply with all applicable requirements of the California Prevailing Wage Law,
including, but not limited to, all applicable requirements contained in Exhibit C, which is
attached to and made a part of this Agreement. Notwithstanding anything set forth in this
Section 14 or this Agreement to the contrary, the Prevailing Wage shall not apply to any
property owned by Lessee or operations conducted by Lessee that are not a part of the
Property and subject to this Agreement.
15. Living Wage Ordinance. Without limiting the foregoing Section 14, Lessee shall comply
fully with all applicable requirements of Petaluma Municipal Code, Chapter 8.36, Living
Wage (the "Living Wage Ordinance"), as the same may be amended from time to time.
Upon the City's request Lessee shall promptly provide to the City documents and
information verifying Lessee's compliance with the requirements of the Living Wage
Ordinance, and shall within fifteen (15) calendar days of the Effective Date of this
Agreement, notify each of its affected employees as to the amount of wages and time off
that are required to be provided to them pursuant to the Living Wage Ordinance. The
Acknowledgement and Certification Pursuant to City of Petaluma Living Wage
Ordinance, attached to this Agreement at Exhibit D, shall be a part of this Agreement for
all purposes, and Lessee is subject to Living Wage Ordinance requirements, as
determined by the City, and must provide a properly completed Exhibit D in accordance
with the requirements of the Living Wage Ordinance. Lessee's noncompliance with the
applicable requirements of the Living Wage Ordinance shall constitute cause for City's
termination of this Agreement pursuant to Section 5 hereof. Notwithstanding anything
set forth in this Section 15 or this Agreement to the contrary. the Living Wage Ordinance
shall not apply to any properly owned by Lessee or operations conducted by Lessee that
are not a part of the Property and subject to this Agreement.
A3943477.4 A
16. Release. Upon termination of this Agreement, Lessee may be or may become eligible to
receive compensation, reimbursement, assistance, including, but not limited to, the fair
market value of real and personal property, loss of goodwill, loss of profits, actual and
reasonable expenses for moving a business, loss of tangible real property as a result of
moving the business, expenses incurred in searching for replacement site for the business,
expenses to reestablish at the new site, "in -lieu payments" and other such benefits
(collectively, `Benefits") under the California Relocation Assistance Act (Government
Code, § 7260, et seq.), Title 25 of the California Code of Regulations, Article I, § 19 of
the California Constitution, the California Eminent Domain Law (Civil Procedure Code,
§ 1230.010, et seq.) or other similar local, state, or federal statute, ordinance, regulation,
rule, or decisional law (collectively "Compensatory Laws"). Lessee further
acknowledges that it has received full and fair compensation of all Benefits Lessee is or
might be or might become entitled to recover from City as a result of, or in any way
related to, the Property, the execution of this Agreement, and the subsequent expiration or
termination of this Agreement. Therefore, being fully informed of and understanding the
acknowledgements made herein and of Lessee's rights or potential rights to benefits
under the Compensatory Laws, Lessee hereby expressly and unconditionally waives, and
releases City from, any and all rights of Lessee to claim, demand, sue for, or receive any
Benefits which Lessee is or might be or might become entitled to recover from City as a
result of or in any way related to the Property, the execution of the Agreement, and the
subsequent expiration of or termination of the Agreement. The City acknowledges and
agrees that the release and waiver set forth in this paragraph is material consideration for
City entering into this Agreement, and that but for this release and waiver, City would not
have entered into this Agreement. By releasing and forever discharging the claims
described herein, Lessee expressly waives any rights under California Civil Code section
1542, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR."
17. Amendment. This Agreement may be amended only by a written instrument executed by
authorized representatives of each party.
18. Construction. The parties agree that, notwithstanding Civil Code Section 1654, any
uncertainty in the Agreement shall not be construed against the drafter of the Agreement.
943477.4 1
19. Governing Law, Venue. This Agreement shall be enforced and interpreted under the
laws of the State of California. Any action arising from or brought in connection with
this Agreement shall be venued in a court of competent jurisdiction in the County of
Sonoma. State of California.
20. Non -Waiver. The failure to enforce any provision of this Agreement or the waiver
thereof in a particular instance shall not be construed as a general waiver of any part of
such provision, and the provision shall remain in full force and effect.
21. Severabilitv. If any term or portion of this Agreement is held to be invalid, illegal, or
otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement shall continue in full force and effect.
22. No Third Partv Beneficiaries. The parties do not intend to create, and nothing in this
Agreement shall be construed to create any benefit or right in any third party.
23. Headings. The headings used in this Agreement are for convenience only and are not
intended to affect the interpretation or construction of any provisions herein.
24. Survival. All obligations arising prior to the expiration or termination of this Agreement
and all provisions of this Agreement allocating liability between City and Lessee shall
survive the expiration or termination of this Agreement.
25. Entire Agreement. This Agreement, including all exhibits, constitutes the entire
agreement between the parties and supersedes all prior agreements or understandings,
oral or written, between the parties concerning the subject matter of this Agreement.
9.13477.4 Y
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.
CITY
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
LESSEE
MGP VIII Properties, LLC
a Delaware limited liability company
By: Merlone Geier Partners, L.P.
a California limited partnership,
its Member
By: MGGP, L.P.,
a California limited partnership,
its General Partner
By: Merlone Geier I, LLC,
a California limited liability company
its General Partner
By:
Name:
Its:
By:
Name:
Its:
9,13477.4
Lease Exhibit A
Exhibit A
o1:Ma11OWN .717!1[U7►[o]0Wl► E
3ry
All that certain real property situate in the City of Petaluma, County of Sonoma, State of
California being a portion of Parcel 3, as shown on that certain map entitled "Parcel Map No.
170", filed in the Office of the County recorder of Sonoma County, State of California, on
December 24, 1980 in Book 316 Maps, at page 19, (316 M 19) Sonoma County Records and
being more particularly described as follows:
Beginning at a point on the southwesterly line of said Parcel 3 (316 M 19), said point lying
South 53° 12' 45" East, a distance of 77.56 feet and South 541 35' 03" East, a distance of 31.16
feet from the most westerly corner of said Parcel 3 (316 M 19), thence from said Point of
Beginning along the southeasterly line of the Rainier Dedication as shown on Instrument No.
2013-093121, Sonoma County Records, North 35° 43' 12" East, a distance of 440.44 feet;
thence leaving said southeasterly line of Rainer Dedication South 07° 43' 12" East, a distance of
41.01 feet;
thence South 511 35' 24" East, a distance of 71.73 feet to a tangent curve to the right;
thence along said tangent curve to the right, having a radius of 264.00 feet, through a central
angle of 22° 10' 49", and an arc length of 102.20 feet to a compound curve to the right;
thence along said compound curve to the right, having a radius of 215.00', through a central
angle of 260 53' 11", and an arc length of 100.89 feet;
thence South 02° 31' 24" East, a distance of 134.25 feet to a tangent curve to the left;
thence along a tangent curve to the left, having a radius of 467.00 feet, through a central angle of
43° 30' 18", and an arc length.of 354.60 feet;
thence South 51° 38' 41" East, a distance of 325.31 feet to the southwesterly line of said
Parcel 3 (316 M 19);
thence northwesterly along said southwesterly line of Parcel 3 (316 M 19), North 56° 40' 10"
West, a distance of 1100.93 feet;
thence northwesterly along said southerly line of Parcel 3 (316 M 19), North 54° 35' 03" West, a
distance of 400.45 feet to the Point of Beginning;
Containing 3.762 acres more or less
Page 1 o 3
"0
The Basis of Bearings for this description is North 54° 26'58" West between record monuments
along the centerline of North McDowell Boulevard shown on the aforementioned Parcel Map
No. 170.
Prepared by:
9RDFESS1011
D. IR?
0.32110 s
Dennis D. Rineh
R.C.E. #32110 �` IPiad
W
Sl9TE OF CAl\FD
GROUP, INC.
Page 2of 3
i' 12'45 E RAINIER DEDICATION AREAS
77.56' i 163,863t SQ. FT.
554'35'03
3.762* AC.
E
31.16'
� POINT OF J `SO, p 6.g
BEGINNING � �'9'
Ara
C/_AL7Ogs' \
o
JUN
Graphic Scale (in feet)
iw o iw ,aG
I I I I
I
1 inch = 150 ft.
APN: 007-380-027
S07'43'12'E PARCEL 3
41.01' 316 M 19
—S51'35'24'E
77.73' d=22'10'49"
R=264.00'
L=102.20'
d=26'53'11 "
R=215.00'
L=100.89'
S02'31'24 E
134.25'
PARCEL 8 PLAN LINE
PER ORDINANCE
— N0. 1991 NCS
4` P6
I
0111/11tubnr-Streeh Engineering Group, Inc.
GMIB3Vuclv'm PJIPIn&-m Gv ,6 W,PPInd i EnvlmnmWll P°vnlvG
Lud PW.h' I CPnvImvllnn Wvvv Gvnvnl
45 Levemnl Caul tet 415.093.91M
Nm to, CA 84949 kx 415.893.8935
Rev. X
Job No. 596706
A=43'30'18"
R=467.00'
L=354.60'
551'38'41 E
325.3 1 '
/4- \,
Date: 10/07/14
Scale: 1"=150'
30F3
PLAT TO ACCOMPANY LEGAL DESCRIPTION
PETALUMA
Page 3 of 3
SONOMA COUNTY CALIFORNIA
Lease Exhibit B
INSURANCE REQUIREMENTS
EXHIBIT B-1
Consultant's performance of the Services under this Agreement shall not continence until
Consultant shall have obtained all insurance required under this paragraph and such insurance
shall have been approved by the City Attorney as to form and the Risk Manager as to carrier and
sufficiency. All requirements herein provided shall appear either in the body of the insurance
policies or as endorsements and shall specifically bind the insurance carrier.
Consultant shall procure and maintain for the duration of the contract all necessary insurance
against claims now and in the future for injuries to persons or damages to property which may
arise from or in connection with the performance of the Services by the Consultant, the
Consultant's agents, representatives, employees and subcontractors.
A. Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage:
a. Personal injury;
b. Contractual liability.
2. Insurance Services Office form covering Automobile Liability, code 1 (any auto).
3. Workers' Compensation insurance as required by the State of California and
Employer's Liability Insurance.
4. Such other insurance coverages and limits as may be required by the City.
B. Minimum Limits of Insurance
Consultant shall maintain limits no less than:
1. General Liability: $,1,000,000 per occurrence for bodily injury, personal injury
and property damage. if Commercial General Liability Insurance or other form
with a general aggregate liability is used, either the general aggregate limit shall
apply separately to this Agreement or the general aggregate limit shall be twice
the required occurrence limit.
2. Automobile Liability: $1,000,000 per accident for bodily injury and property
damage.
3. Employer's Liability: Bodily Injury by Accident - $1,000,000 each accident.
Bodily Injury by Disease - $1,000,000 policy limit.
Bodily Injury by Disease - $1,000,000 each employee.
4. Such other insurance coverages and limits as may be required by the City.
C. Deductibles and Self -Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City.
At the option of the City, either: the insurer shall reduce or eliminate such deductibles or
self-insured retentions as respects the City. its officers, officials, employees, and
volunteers: or the Consultant shall procure a bond guaranteeing payment of losses and
related investigations, claim administration and defense expenses.
Exhibit B -I
INSULANUL RhQUIUMEN IS Cil- )
1603211 ApI1010 �y
D. Other Insurance Provisions
The required general liability and automobile policies are to contain, or be endorsed to
contain the following provisions:
1. The City, its officers, officials, employees, agents and volunteers are to be
covered as Additional Insureds as respects: liability arising out of activities
performed by or on behalf of the Consultant; products and completed operations
of the Consultant; premises owned, occupied or used by the Consultant; or
automobiles owned, leased, hired or borrowed by the Consultant. The coverage
shall contain no special limitations on the scope of protection afforded to the City,
its officers, officials, employees, agents or volunteers.
2. For any claims related to this project, the Consultant's insurance coverage shall be
primary insurance as respects the City, its officers, officials, employees, agents
and volunteers. Any insurance or self-insurance maintained by the City, its
officers, officials, employees, agents or volunteers shall be excess of the
Consultant's insurance and shall not contribute with it.
3. Any failure to comply with reporting or other provisions of the policies including
breaches of warranties shall not affect coverage provided to the City, its officers,
officials, employees, agents or volunteers.
4. The Consultant's insurance shall apply separately to each insured against whom
claim is made or suit is brought except, with respect to the limits of the insurer's
liability.
5. Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled by either party, reduced in
coverage or in limits except after thirty (30) days' prior written notice by certified
mail, return receipt requested, has been given to the City.
6. Consultant agrees to waive subrogation rights against City regardless of the
applicability of any insurance proceeds, and to require all contractors,
subcontractors or others involved in any way with the Services to do likewise.
E. Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best's rating of no less than
ANII.
F. Verification of Coverage
Consultant shall furnish the City with original endorsements effecting coverage required
by this clause. The endorsements are to be signed by a person authorized by that insurer
to bind coverage on its behalf. All endorsements are to be received and approved by the
City before the Services commence.
Exhibit B -I
Inntqr.wC. ai rQuna.NIHN s IC❑>I l�
16dr323) \;,d '010 .J
PREVAILING WAGE EXHIBIT C
HOURS OF WORK:
Lease Exhibit C
A. In accordance with California Labor Code Section 1810, eight (8) hours of labor in
performance of the Services shall constitute a legal day's work under this Agreement.
B. In accordance with California Labor Code Section 1811, the time of service of any
worker employed in performance of the Services is limited to eight hours during any one
calendar day, and forty hours during any one calendar week, except in accordance with
California Labor Code Section 1815; which provides that work in excess of eight hours
during any one calendar day and forty hours during any one calendar week is permitted
upon compensation for all hours worked in excess of eight hours during any one calendar
day and forty hours during any one calendar week at not less than one -and -one-half times
the basic rate of pay.
C. The Consultant and its subconsultants shall forfeit as a penalty to the City $25 for each
worker employed in the performance of the Services for each calendar day during which
the worker is required or permitted to work more than eight (8) hours in any one calendar
day, or more than forty (40) hours in any one calendar week, in violation of the
provisions of California Labor Code Section 1810 and following.
WAGES:
A. In accordance with California Labor Code Section 1773.2, the City has determined the
general prevailing wages in the locality in which the Services are to be performed for
each craft or type of work needed to be as published by the State of California
Department of Industrial Relations, Division of Labor Statistics and Research, a copy of
which is on file with the City and shall be made available on request. The Consultant and
subconsultants engaged in the performance of the Services shall pay no less than these
rates to all persons engaged in performance of the Services.
B. In accordance with Labor Code Section 1775, the Consultant and any subconsultants
engaged in performance of the Services shall comply Labor Code Section 1775 which
establishes a penalty of up to $50 per day for each worker engaged in the performance of
the Services that the Consultant or any subconsultant pays less than the specified
prevailing wage. The amount of such penalty shall be determined by the Labor
Commissioner and shall be based on consideration of the mistake, inadvertence, or
neglect of the Consultant or subconsultant in failing to pay the correct rate of prevailing
wages, or the previous record of the Consultant or subconsultant in meeting applicable
prevailing wage obligations. or the willful failure by the Consultant or subconsultant to
pay the correct rates of prevailing wages. A mistake, inadvertence, or neglect in failing
Pierulina 1Vaee Ueblblt for Srnrice AerecmenK
Pr(rvieions Regwred Pursuant to Calilbima Labor Code § 1720 et oeq
1037770) (Sept 20071
to pay the correct rate of prevailing wages is not excusable if the Consultant or
subconsultant had knowledge of their obligations under the California Labor Code. The
Consultant or subconsultant shall pay the difference between the prevailing wage rates
and the amount paid to each worker for each calendar day or portion thereof for which
each worker was paid less than the prevailing wage rate. If a subconsultant worker
engaged in performance of the Services is not paid the general prevailing per diem wages
by the subconsultant, the Consultant is not liable for any penalties therefore unless the
Consultant had knowledge of that failure or unless the Consultant fails to comply with all
of the following requirements:
1. The Agreement executed between the Consultant and the subconsultant for the
performance of part of the Services shall include a copy of the provisions of
California Labor Code Sections 1771, 1775, 1776, 1777.5, 1813, and 1815.
Z. The Consultant shall monitor payment of the specified general prevailing rate of
per diem wages by the subconsultant by periodic review of the subconsultant's
certified payroll records.
3. Upon becoming aware of a subconsultant's failure to pay the specified
prevailing rate of wages, the Consultant shall diligently take corrective
action to halt or rectify the failure, including, but not limited to, retaining
sufficient Rinds due the subconsultant for performance of the Services.
4. Prior to making final payment to the subconsultant, the Consultant shall obtain an
affidavit signed under penalty of perjury from the subconsultant that the
subconsultant has paid the specified general prevailing rate of per diem wages
employees engaged in the performance of the Services and any amounts due
pursuant to California Labor Code Section 1813.
C. In accordance with California Labor Code Section 1776, the Consultant and each
subconsultant engaged in performance of the Services, shall keep accurate payroll records
showing the name, address, social security number, work classification, straight time and
overtime hours worked each day and week, and the actual per diem wages paid to each
journeyman, apprentice, worker, or other employee employed in performance of the
Services. Each payroll record shall contain or be verified by a written declaration that it
is made under penalty of perjury, stating both of the following:
The information contained in the payroll record is true and correct.
The employer has complied with the requirements of Sections 1771, 1811, and
1815 for any Services performed by the employer's employees on the public
works project.
The payroll records required pursuant to California Labor Code Section 1776 shall be
certified and shall be available for inspection by the Owner and its authorized
representatives, the Division of Labor Standards Enforcement, the Division of
Apprenticeship Standards of the Department of Industrial Relations and shall otherwise
be available for inspection in accordance with California Labor Code Section 1776.
Pro inI In v "InLeE\hihit Ior Service A,,rcemems
Provisions Requird Puuuanl to Caldirtna Labor Codc y 1720 of awq
110; 7771111 Scpt2007 )
-,A
D. In accordance with California Labor Code Section 1777.5, the Consultant, on behalf of
the Consultant and any subconsultants engaged in performance of the Services, shall be
responsible for ensuring compliance with California Labor Code Section 1777.5
governing employment and payment of apprentices on public works contracts.
E. In case it becomes necessary for the Consultant or any subconsultant engaged in
performance of the Services to employ on the Services any person in a trade or
occupation (except executive, supervisory, administrative, clerical, or other non manual
workers as such) for which no minimum wage rate has been determined by the Director
of the Department of Industrial Relations, the Consultant shall pay the minimum rate of
wages specified therein for the classification which most nearly corresponds to Services
to be performed by that person. The minimum rate thus furnished shall be applicable as a
minimum for such trade or occupation from the time of the initial employment of the
person affected and during the continuance of such employment.
Pt e\ni hn^_ Waee 1\hibu fur Senvme Auccmmnis
Pro,, istons Requited Pursuant to CalOmnia Labor Code S 1720 rt .my
(1037770) (Sept 10071
L
Lease Exhibit D
EXHIBIT D
ACKNOWLEDGEMENT AND CERTIFICATION PURSUANT TO
CITY OF PETALUMA LIVING WAGE ORDINANCE
PETALUMA MUNICIPAL CODE CHAPTER 8.36
The City of Petaluma Living Wage Ordinance ("Ordinance"), Petaluma Municipal Code Chapter
8.36, applies to certain service contracts, leases, franchises and other agreements or funding
mechanisms providing financial assistance (referred to hereafter as an "Agreement') between
the City of Petaluma ("City") and/or the Petaluma Community Development Commission
("PCDC") and contractors, lessees, franchisees, and/or recipients of City and/or PCDC funding
or financial benefits ("covered entities").
Pursuant to Petaluma Municipal Code Section 8.36.120, as part of any bid, application or
proposal for any Agreement subject to the Ordinance, the covered entity shall:
• Acknowledge that the covered entity is aware of the Ordinance and intends to comply
with its provisions.
• Complete the Report of Charges, Complaints, Citations and/or Findings contained in this
Acknowledgement and Certification by providing information, including the date, subject
matter and manner of resolution, if any, of all wage, hour, collective bargaining,
workplace safety, environmental or consumer protection charges, complaints, citations,
and/or findings of violation of law or regulation by any regulatory agency or court
including but not limited to the California Department of Fair Employment and Housing,
Division of Occupational Safety and Health (OSHA), California Department of Industrial
Relations (Labor Commissioner), Environmental Protection Agency and/or National
Labor Relations Board, which have been filed or presented to the covered entity within
the ten years immediately prior to the bid, proposal, submission or request.
Pursuant to Petaluma Municipal Code Section 8.36.120, before the beginning of the term of any
covered Agreement, or prior to the execution of said Agreement by the City or the PCDC, each
covered entity shall certify that its employees are paid a living wage that is consistent with
Petaluma Municipal Code Chapter 8.36.
By executing this Aclmowledgement and Certification. the covered entity (i) acknowledges that
it is aware of the Ordinance and intends to comply with its provisions, (ii) attests to the accuracy
and completeness of information provided in the Report of Charges, Complaints. Citations
and/or Findings contained herein, (iii) certifies that it pays its covered employees a Living Wage
as defined in Petaluma Municipal Code Chapter 8.36 and (iv) attests that the person executing
this Acknowledgement and Certification is authorized to bind the covered entity as to the matters
covered in this Acknowledgment and Certification.
I MNG R'AGF ACKNONLEDGLNIFN I
AND CLRIIFICA'I'P )N
11633697 31 Nuc 1012 N
SO ACKNOWLEDGED and CERTIFIED:
Project or Contract I.D:
Date:
(Print Name of Covered Entity/Business Capacity)
By
(Print Name)
/s/
(Signature)
Its
(Title /Capacity of Authorized Signer)
LIVING N I
AND CFR F1 ICA 11UN
I I6.Y,07 21 Nu% 2012
4.
REPORT OF CHARGES, COMPLAINTS, CITATIONS AND/OR FINDINGS
PURSUANT TO PETALUMA MUNICIPAL CODE SECTION 8.36.120
FOR EACH WAGE, HOUR, COLLECTIVE BARGAINING, WORKPLACE SAFETY, ENVIRONMENTAL OR
CONSUMER PROTECTION CHARGE, COMPLAINT, CITATION, AND/OR FINDING OF VIOLATION OF LAW
OR REGULATION BY ANY REGULATORY AGENCY OR COURT, INCLUDING BUT NOT LIMITED TO THE
CALIFORNIA DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING, DIVISION OF OCCUPATIONAL
SAFETY AND HEALTH (OSHA), CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS (LABOR
COMMISSIONER), ENVIRONMENTAL PROTECTION AGENCY AND/OR NATIONAL LABOR RELATIONS
BOARD, WHICH:
e AFFECTS YOU ASA PROSPECTIVE CONTRACTOR, SUBCONTRACTOR, LESSEE, FRANCHISEE
AND/OR PARTY TO ANY CITY OF PETALUMA AND/OR PETALUMA COMMUNITY
DEVELOPMENT COMMISSION -FUNDED AGREEMENT OR BENEFIT SUBJECT TO PETALUMA
MUNICIPAL CODE CHAPTER 8.36 (LIVING WAGE ORDINANCE), AND
• HAS BEEN FILED OR PRESENTED TO YOU WITHIN THE TEN YEARS IMMEDIATELY PRIOR TO THE
BID, PROPOSAL, SUBMISSION OR REQUEST FOR WHICH THIS ACKNOWLEDGEMENT AND
CERTIFICATION IS MADE.
PLEASE PROVIDE THE DATE, THE REGULATORY AGENCY OR COURT MAKING THE CHARGE
COMPLAINT, CITATION OR FINDING, THE SUBJECT MATTER AND THE MANNER OF RESOLUTION, IF
ANY, FOR EACH SUCH CHARGE COMPLAINT, CITATION OR FINDING.
IF NONE, PLEASE STATE "NONE":
ATTACH ADDITIONAL PAGES IF NEEDED.
Date:
Regulatory Agency or Court:
Subject Matter:
Resolution, if any:
Expected resolution. if known:
LIVING WAUF ACKNOWI I'IAiCNILN I
AND CHR II HCATION
i lh38(071) Nov 2012
•\g¢
o
RECORDING REQUESTED BY
CITY OF PETALUMA
AND WHEN RECORDED MAIL TO:
City of Petaluma
11 English Street.
Petaluma, CA 94952
Attn: City Cleric
EXHIBIT C
(to Purchase and Sale Agreement)
EXHIBIT C
(Space Above This Line for Recorder's Use Only)
[Exempt from recording fee per Gov. Code § 273831
GRANT DEED
For a valuable consideration, receipt of which is hereby acknowledged, MGP VIII Properties,
LLC, a Delaware limited liability company, hereby grants to the City of Petaluma, a charter city
and municipal corporation, in fee simple the real property in the City of Petaluma, County of
Sonoma, California, described as Parcel B in Exhibit A, attached hereto and incorporated by
reference.
M-OR:lOWSI7
MGP VIII Properties. LLC,
a Delaware limited liability company
Dated: 201 By:
Print Name:
Its:
By:
Print Name:
Its:
928euv,cc 80006nn0-I9
tib
State of California
County of
On before me,
Notary Public, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
lie/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
State of California
County of
On before me,
Notary Public, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature
928609\,6(' 8II006/00.19
(Seal)
EXHIBIT D
(to Purchase and Sale Agreement)
CERTIFICATE OF ACCEPTANCE
This is to certify that the fee interest in real property conveyed by Grant Deed dated
.201, from MGP VIII Properties, LLC, a Delaware limited liability company,
as grantor, to the City of Petaluma, a charter city and municipal corporation, as grantee, is hereby
accepted by the City Manager of the City of Petaluma pursuant to authority conferred by
Ordinance No. of the City of Petaluma, and the City of Petaluma, as grantee, consents to
recordation of said Grant Deed.
Dated: , 20 By:
State of California
County of
On
before me,
Print Name:
Its:
Notary Public, personally appeared
personally larown to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
92860Ov,( 8000)„004L) 4�f
01
DATE: October 6, 2014
TO: Honorable Mayor and Members of the City Council
FROM: John C. Brown, City Manager
ATTACHMENT 2
SUBJECT: Introduction (First Reading) of an Ordinance Approving Purchase and Sale and
Lease Back Agreements Between the City of Petaluma and Merlone Geier
Partners Regarding Real Property Necessary for the Rainier Interchange Project
[RO C830161 Nei 17.11 [l7►1
It is recommended that the City Council introduce an Ordinance Approving a Purchase and Sale
and Lease -Back Agreements Between the City of Petaluma and Merlone Geier Partners
Regarding Real Property Necessary as Right of Way for the Rainier Interchange Project.
BACKGROUND
The plan line for the southeasterly ramp of the proposed Rainier Interchange project was
approved by Ordinance No. 1991 in October 1995. In accordance with Chapter 13.20 in the
Petaluma Municipal Code governing future rights of way, prior and current property owners of
the parcels that now comprise the Deer Creek Village center have been on notice that buildings
or structures may not be constructed inside the plan line adopted for the Rainier project, in
accordance with Ordinance No. 1991. Merlon Geier (MG) designed around the plan line area,
and the Deer Creek Village project incorporated into this area a recreation amenity not prohibited
by Chapter 13,20, including a dog park and walking path, to compliment commercial and office
uses in the development.
The Deer Creek Village project incorporates of two parcels of land. The northwesterly parcel is
approximately 25 acres. Of that parcel, the dog park property comprises 3.76 acres. Within that
3.76 acres, the Deer Creel: development with its setbacks (as noted in the Deer Creel: Village
E1R - fifty feet to each side), account for approximately .69 acres.
City engineering staff estimates a total of approximately 30 acres of right-of-way needs to be
acquired for the entirety of the Rainier Interchange project. In the preliminary project budget, a
total of $28.8 million is included for right-of-way acquisition. The dog park property was valued
at $25 per square foot in that preliminary estimate. An acre of land is43,560 square feet. At $25
per square foot, for 163.785.6 square feet, the acquisition cost for the subject 3.76 acres would be
$4,09=4,640.
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On January 31, 2014, MG offered to sell the property to the City for $15 per square foot
(Attachment 2). They further proposed to lease it back from the City for one dollar a year, and to
operate and maintain the dog pari: until the property is needed for the interchange project. MG
proposed to indemnify the City, and hold it harmless under such a lease, from exposure to
liability arising from MG's operation and maintenance of the dog park. At $15 per square foot,
for 163,785.6 square feet, the proposed cost for 3.76 acres would be $2,456,784.
t 104111.Y.Y[W1
Given staff s estimated cost for this piece of the right-of-way acquisition, it appeared to be
beneficial if the City could obtain this property for less cost than has been estimated, and at a
lesser cost than in the future. In February, City staff commissioned an appraisal of the property
to establish an opinion of fair market value. The Howard Levy Appraisal Group completed the
appraisal in March 2014. Based on the limitations placed on the property by the plan line, the
Appraiser concluded that, in its present form, the land has no development potential, and valued
it as raw land. The Appraiser also removed from gross acreage of 3.76 acres the approximately
.69 acres of Deer Creek and its setbacks. The Appraiser valued the remaining 3.07 acres at
$115,000.
The results of the appraisal were shared with MG, in April 2014. MG indicated they would not
sell at that price. In May 2014, MG completed improvements to the dog park. These include,
but are not limited to, grading, landscaping and irrigation, fencing, and furnishings. On May 15,
2014, MG indicated it would be willing to sell the property for the appraised value, if the sale
price also included recovery of its verified costs to construct and outfit the dog park (Attachment
3). Dog pari: costs total $425,567, including General Contractor overhead and profit, and
architectural design and engineering work. The total cost to the City of this revised proposal
would be $540,567.
There are at least three considerations that support purchasing this property now, at the revised
proposed selling price. MG indicated it would not voluntarily accept the appraised value as
adequate compensation for the property. They suggest the City will need to obtain the property
through the exercise of its powers of eminent domain when the need for this property becomes
more urgent. Current planning anticipates this could be six years into the future, during which
time raw land values will likely rise, subjecting the City to a higher purchase price. Costs at that
time would also include the legal fees associated with the eminent domain proceeding, fees
which could be avoided with a voluntary sale. Further, MG argues, and the City Attorney
agrees, a fair valuation through eminent domain proceedings will include value associated with
improvements on the property, those associated with the dog park and walking path
improvements, as itemized in Attachment 3. Finally, City ownership of the property may enable
the City to make a stronger case for the waivers and approvals necessary to construct the City's
preferred interchange alternative. The proposed purchase appears to be a safe investment of the
City's limited available funds in furtherance of the Rainier project. If in the future it is
determined the Rainier Interchange cannot be built, the City can remove the plan line, re -zone
the property consistent with the adjacent property (MU 1 B — Mixed Use), and sell it at an
increased value commensurate with that zoning. As well, note that the purchase and lease
agreement are structured to avoid potential takings claims, if the value of the property was to
increase in the future due to removal of or change in the Rainier plan line (although no such
change is planned or anticipated).
As part of staff s initial due diligence to prepare for potential City Council direction to proceed
with the land purchase, we have considered a number of potential legal and transaction issues,
including CEQA compliance, confirmation that the property to be acquired is not contaminated,
ensuring that the land to be purchased pursuant to the adopted Rainier plan line is established as
a separate legal parcel, and release of potential claims related to the property being acquired and
its planned uses.
This parcel would also be the subject of a lease agreement for operation and maintenance of the
property, including the dog park, until the land is needed for the interchange. The attached
ordinance approves a purchase and sale agreement with Merlone Geier for the parcel, and would
provide authorization to execute a lease agreement governing Merlone Geier's operation and
maintenance of the property being purchased by the City, including the dog park. Both of these
documents are currently in draft form, as final details are being agreed upon by MG and City
staff. The draft documents are, however, in substantially the same form as would be expected to
be executed with the Council's approval of the attached ordinance. Revised versions of these
drafts are expected to be provided to the Council at the October 6, 2014 meeting. The Purchase
and Sale Agreement reflects the terms of the transaction that has been negotiated by the parties.
The draft lease agreement included as an exhibit to the ordinance addresses such issues as
Merlone Geier's maintenance and indemnity obligations, maintenance security, prevailing wage
compliance, and other provisions common to leases of City property.
FINANCIAL IMPACT
The estimated cost of the proposed purchase is $540,567. This is $3,554,073 less than the
engineering estimate. Monies for this purchase are available in the Traffic Mitigation Fee funds,
which have a combined estimated balance of $12,880,471 as of July 1. 2014.
ATTACHMENTS
Ordinance which includes the following:
Exhibit A: Purchase and Sale Agreement (with 4 exhibits)
Exhibit A: Legal Description
Exhibit B: Lease (with 4 Exhibits)
Lease Exhibit A: Legal Description (same as PSA Exhibit A)
Lease Exhibit B: Insurance Requirements
Lease Exhibit C: Prevailing Wage
Lease Exhibit D: Living Wage Acknowledgement
Exhibit C: Grant Deed
Exhibit D: Acceptance of Grant Deed
2. Merlone Geier Letter dated January 31, 2014
3. Greg Geertsen E-mail dated May 15, 2014
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