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HomeMy WebLinkAboutPCDC Resolution 2007-04 02/26/2007RESOLUTION NO. 2007-0 PETALUMA COMMUNITY DEVELOPMENT COMMISSION AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE AN EXCLUSIVE NEGOTIATION RIGHTS AGREEMENT WITH THE PETALUMA ARTS COUNCIL FOR A TERM OF SIX (6) MONTHS WHEREAS, the Petaluma Community Development Commission ("PCDC") is the Lessee under that certain Commercial Lease (the "Master Lease") dated August 1, 2003, and executed by and between Northwestern Pacific Railroad Authority, a public joint powers authority ("Northwestern") and PCDC; and, WHEREAS, the Sonoma Marin Area .Rail Transit District ("SMART") is the successor in interest to Northwestern under the Master Lease; and, WHEREAS, pursuant to the Master Lease, PCDC leases the real property known as Sonoma County Assessor's Parcel No. 007-131-004 located on Lakeville Street between East Washington and D Streets in the City of Petaluma, including three buildings located thereon consisting of the "Passenger Depot," the "Baggage Shed" and the "Freight Shed" (collectively, the "Depot Property") for a term of ten (10) years with an option to renew for fifteen (15) additional years, subject to SMART's right to terminate the Master Lease by giving one-year's notice if the property or portion thereof is required for transportation-related purposes; and, WHEREAS, PCDC intends to sublease the Freight Shed after the completion of the interior renovation; and, WHEREAS, the Petaluma Arts Council (the "Arts Council") has shown great interest in the building and is committed to spend money for tenant improvements; WHEREAS, the Arts Council wants to use the facility for the purpose of establishing and operating a place to host exhibits, classes, cultural performances and related administrative offices; and, WHEREAS, the Arts Council seeks assurance that PCDC will negotiate exclusively with the Arts Council for a period of six months; and, PCDC Resolution 2007-04 Page 1 WHEREAS, occupancy of the Freight Shed by the Arts Council would be consistent with the goals of the Central Petaluma Specific Plan and the Redevelopment Plan for the PCD Project Area. NOW, THEREFORE, BE IT RESOLVED that the Petaluma Community Development Commission hereby: 1. Authorizes the Executive Director to enter into an Exclusive Negotiation Rights Agreement with the Petaluma Arts Council substantially in the form. attached hereto as Attachment A. ADOPTED this 26th day of February, 2007, by the following vote: Commissioner Aye No Absent Abstain Barrett X Freitas X Harris X Vice Chair Nau X O'Brien X Rabbitt X - Chair Torliatt X ~ _ ATTEST: APPROVED AS TO Claire Cooper, Recording Se retary Eric Danly, Gener Counsel PCDC Resolution 2007-04 Page 2 ATTACHMENT A EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT by and between PETALUMA ARTS COUNCIL and PETALUMA COMMUNITY DEVELOPMENT COMMISSION THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this "Agreement") is entered into effective as of February 27, 2007, ("Effective Date") by and between the Petaluma Community Development Commission ("Agency") and Petaluma Arts Council, a California nonprofit public benefit corporation ("Arts Council"). Agency and Arts Council are hereinafter collectively referred to as the "Parties." RECITALS A. Agency is the Lessee under that certain Commercial Lease (the "Master Lease") dated August 1, 2003, and executed by and between Northwestern Pacific Railroad Authority, a public joint powers authority ("Northwestern") and Agency. B. The Sonoma Marin Area Rail Transit District ("SMART") is the successor in interest to Northwestern under the Master Lease. C. Pursuant to the Master Lease, Agency leases the real property known as Sonoma County Assessor's Parcel No. 007-131-004 located on Lakeville Street between East Washington and D Streets in the City of Petaluma, including three buildings located thereon consisting of the "Passenger Depot," the "Baggage Shed" and the "Freight Shed" (collectively, the "Depot Property" and each more particularly described in the Master Lease) for a term of ten (10) years with an option to renew for fifteen (15) additional years subject to SMART's right to terminate the Master Lease by giving one-year's notice if the property or portion thereof is required for transportation-related purposes. D. The Agency desires to sublease the Freight Shed, and Agency and Arts Council desire to negotiate the terms of a sublease agreement pursuant to which Arts Council would sublease the Freight Shed from Agency if the Parties reach agreement and the Sublease is approved by the Agency's governing board. E. At its meeting of February 26, 2007, the Agency's governing board directed staff to pursue negotiations wifh Arts Council regarding Arts Council's proposed sublease of the Freight Shed, and authorized Agency staff to prepare, and the Executive Director to sign, an agreement granting Arts Council exclusive rights to negotiate for the purpose of reaching agreement on a sublease agreement ("Sublease") whose terms and conditions would govern the sublease of the Freight Shed. NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. PCDC Resolution 2007-04 Page 3 1. Good Faith Efforts to Ne otiate. The Parties shall use their best efforts to successfully negotiate a Sublease which shall describe the terms and conditions governing sublease of the Freight Shed. The Parties shall diligently and in good faith pursue such negotiations. This Agreement does not impose a binding obligation on Agency to lease the Freight Shed to Arts Council, nor on the Arts Council to lease the Freight Shed from the Agency. Without limiting the generality of the foregoing, Arts Council expressly acknowledges that a Sublease, resulting from negotiations contemplated herein, shall become effective only if the Sublease is approved by the .Agency's governing board following notice and hearing as required by Health and Safety Code Section 33431. 2. Arts Council's Exclusive Right to Negotiate With Agency. Agency agrees that it will not, during the term of this Agreement (the "Term") directly or indirectly, through any officer, employee, agent, or otherwise, solicit, initiate or encourage the submission of bids, offers or proposals by any person or entity with respect to the leasing of the Freight Shed, and Agency shall not engage any broker, financial adviser or consultant to initiate or encourage proposals or offers from other parties with respect to the lease of the Freight Shed or any portion thereof. Furthermore, Agency shall not, directly or indirectly, through any officer, employee, agent or otherwise, engage in negotiations concerning any such transaction with, or provide information to, any person other than Arts Council and its representatives with a view to engaging, or preparing to engage, that person with respect to the leasing of the Freight Shed or any portion thereof. 3. Term. The Term of this Agreement shall commence on the Effective Date, and shall terminate one-hundred and eighty (180) days thereafter, unless extended or earlier terminated as provided herein. The Agency's Executive Director is authorized to extend the Term by an additional one-hundred and eighty (180) days upon the mutual written agreement of the Parties without further approval of the Agency governing board. 4. Reaationshig of Parties. The Parties agree that nothing in this Agreement shall be deemed or interpreted to create between them the relationship of lessor and lessee, of buyer and seller, or of partners or joint venturers. 5. Arts Council's Studies; Right of Entry. During the Term, Arts Council shall use its best efforts to prepare, at Arts Council's expense, any studies, surveys, plans, specifications and reports ("Arts Council's Studies"). Arts Council deems necessary or desirable in Arts Council's sole discretion, to determine the suitability of the Freight Shed for Arts Council's intended use. Arts Council shall be responsible for obtaining Agency's advance written permission for access to the Freight Shed or the Depot Property as may be necessary to prepare the Arts Council's Studies. In connection with entry onto the Depot Property, Arts Council shall and hereby agree to indemnify, defend (with counsel approved by Agency) and hold harmless the Indemnitees (defined in Section 12) from and against all Claims, (defined in Section 12) resulting from or arising in connection, with entry upon the Depot Property by Arts Council or Arts Council's agents, employees, consultants, contractors or subcontractors. Arts Council shall repair, restore and return the Freight Shed and the Depot Property to their condition immediately preceding Arts Council's entry thereon at Arts Council's sole expense. Arts Council shall not permit any lien or encumbrance resulting from or arising in connection with entry upon the Depot Property by Arts Council or Arts Council's agents, employees, consultants, contractors or subcontractors to attach to the Freight Shed, the Depot Property or any part thereof. Arts Council's indemnification obligations and obligations to discharge liens that attach to the Freight Shed or the Depot Property or any part thereof as set forth in this Section 5 shall survive the expiration or earlier termination of this Agreement. Intentionally omitted. PCDC Resolution 2007-04 Page 4 7. Confidentiality' Dissemination of Information. During the Term, each Party shall obtain the consent of the other Party prior to issuing or permitting any of its officers, employees or agents to issue any press release or other information to the press with respect to this Agreement; provided however, no Party shall be prohibited from supplying any information to its representatives, agents, attorneys, advisors, financing sources and others to the extent necessary to accomplish the activities contemplated hereby so long as such representatives, agents, attorneys, advisors, financing sources and others are made aware of and agree to the. terms of this Section. Nothing contained in this Agreement shall prevent either Party at any time from furnishing any required information to any governmental entity or authority pursuant to a. legal requirement or from complying with its legal or contractual- obligations. 8. Execution of Sublease Agreement. If the Parties successfully negotiate a Sublease, Agency shall promptly conduct the noticed public hearing required by pursuant to Section 33431 of the California Health 8~ Safety Code, and recommend approval of the Sublease to the Agency's governing board. The Agency shall have no legal obligation to execute a Sublease unless and until the Sublease has been approved by the Agency governing board. 9. Termination. This Agreement may be terminated at any time by mutual consent of the Parties. Agency shall have the right to terminate this Agreement upon its good faith determination that Arts Council is not proceeding diligently and in good faith to carry out its obligations pursuant to this Agreement. Agency shall exercise such right by providing at least ten (10) days' advance written notice to Arts Council which notice shall describe the nature of Arts Council's default hereunder. Notwithstanding the foregoing, if Arts Council commences to cure such default within such 10-day period and diligently prosecutes such cure to completion within the earliest feasible time but not later than thirty (30) days following the date of the notice, this Agreement shall remain in effect. Arts Council shall have the right to terminate this Agreement, effective upon 10 days' written notice to Agency, if the results of its investigation of the Freight Shed are unsatisfactory with respect to Arts Council's intended use. Neither Party shall have the right to seek an award of damages as a result of the termination of this Agreement pursuant to this Section. 10. Effect of Termination. Upon termination as provided herein, or upon the expiration of the Term and any extensions thereof without the Parties having successfully negotiated a .Sublease, this Agreement shall forthwith be void, and there shall be no further liability or obligation on the part of either of the Parties or their respective officers, employees, agents or other representatives; .provided however, the provisions of Section 7 (Confidentiality), Section 12 (Hold Harmless) and Section 16 (No Brokers) shall survive such termination. Provided further, that upon termination or expiration of this Agreement, Arts Council shall deliver to Agency, within 15 days of termination or expiration, all of the Arts Council's Studies not previously provided to Agency. 1 1. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first- cldss or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be PCDC Resolution 2007-04 Page 5 considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on anon-business day. Agency: Petaluma Community Development Commission 1 1 English Street Petaluma, CA 94952 Attention: Vincent Marengo Arts Council: Petaluma Arts Council PO Box 750661 Petaluma, CA 94975 Attention: Murray Rockowitz Board of Directors President 12. Indemnification. Arts Council hereby covenants, on behalf of itself and its permitted successors and assigns, to indemnify, hold harmless and defend the Agency and the City of Petaluma and their respective elected and appointed officials, officers, agents, represeritatives and employees (all of the foregoing, "Indemnitees") from and against all liability, loss, cost, claim, demand, action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense (including, without limitation, reasonable attorney's fees and costs of litigation) (all of the foregoing, collectively hereinafter "Claims") resulting from or arising in connection with Arts Council's breach of this Agreement, or the activities undertaken by Arts Council or its employees, contractors, or agents pursuant hereto; provided however, Arts Council shall have no indemnification obligation with respect to the gross negligence or willful misconduct of any Indemnitee. Arts Council's indemnification obligations set forth in this Section 14 shall survive the expiration or earlier termination of this Agreement. 13. Severability. If any term or provision of this Agreement or the application thereof shall, to any extent, be held to be invalid or unenforceable, such term or provision shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions of this Agreement or the application of .such terms and provisions to circumstances other than those as to which it is held invalid or unenforceable unless an essential purpose of this Agreement would be defeated by loss of the invalid or unenforceable provision. 14. Entire Aareement~ Amendments In Writing; Counterparts. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral and written, between the Parties with respect to such subject matter. This Agreement may be amended only by a written instrument executed by the Parties or their successors in interest. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 15. Successors and Assigns; No Third-Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided however, that neither Party shall transfer or assign any of such Party's rights hereunder by operation of law or otherwise without the prior written consent of the other Party, and any such transfer or assignment without such consent shall be void. Subject to the immediately preceding sentence, this Agreement is not intended to benefit, and shall not run to the benefit of or be enforceable by, any other person or entity other than the Parties and their permitted successors and assigns. 1 b. Brokers. Each Party warrants and represents to the other that no brokers have been retained or consulted in connection with this transaction other than as disclosed in writing to the other Party. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and PCDC Resolution 2007-04 Page 6 representation. The terms of this Section shall survive the expiration or earlier termination of this Agreement. 17. Captions. The captions of the sections and articles of this Agreement are for convenience only and are not intended to affect the interpretation or construction of the provisions hereof. 18. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. AGENCY Petaluma Community .Development Commission By: Its: Executive Director Attest: Recording Secretary Approved as to form: General Counsel Approved: Administrative Services Director Approved: Risk Manager ARTS COUNCIL Petaluma Arts Council, a nonprofit public benefit corporation By: PCDC Resolution 2007-04 Page 7