Loading...
HomeMy WebLinkAboutAgenda Bill 5.D 05/03/2004C 7� CITY OF PETALUMA, CALIFORNIA AGENDA BILL MAY 0 Agenda Title: Meeting-.Date: May 3, 2004 Discussion And Action Regarding The Introduction Of An Ordinance Authorizing (T') Execution Of ent An Option. Agreem e ' tinTi M 6L"tne: Z 3:00 PM Providing Regency Realty Group, Inc. An. 'Option. To Acquire A ❑ 7:00 PM Nonexclusive Pedestrian And Vbhieufar Access Easement Between ,East Washington Street And, The Kenilw- orth Scholol-,Site, (11) Execution Of An Easement Agreement Following Satisfaction Of All Required Conditions, And (III) Negotiation And . Execution Of An Amendment To The Fairgrounds Association ciation Lease. In Order. To Exclude The Easement Area And, The Skateboard/Solar Collector Area And Add The Payran Street Vir6house Property T I o The Leased Premises Category (check' I ong):. O.Consent Calendar F] ZNewBusiness ❑ Unfinished Business F Presentation Departmen Direct6r: - Person: Phone e Number: ED &Redevelopment Paul Marangella Paul Marangella 778-4581 Cost of Proposal: 0 Account Number: NA AniountBudgeted: 0 Name. of I Fund: NA Attachments to Agenda Packet Item? 1. - Ordinance authorizing (d). execution of an Op tion Agreement providing Regency Realty Group, Inc. an option to acquire a nonexclusive pedestrian and vehicular access, easement between East Washington Street And the Kenilworth, School Site, (b) execution of an Easement Agreement pursuant to which the Easement would be conveyed to Regency -upon satisfaction of all required conditions and keg - ency's. exercise of the. Option, and (c) negotiation and execution of a Lease Amendment amending the' Fourth District Ag ricultural Ass6ciation lease to exclude the Easement Area and the Skateboard/Solar Collector Area and to add the Payran Street Firehouse property to the leased premises. Exhibit I — Option Agreement with Exhibit A (Easement Area), Exhibit A -1 (Skateboard/Solar Panel Area) Exhibit,B (Easement Agreement), and Exhibit C (Memorandum of Opt-ion) Exhibit II - Payran Fire station Property 2. Resolution 9773'17'K Ke nilworth Recreation Master Plan 3. Excerpt Draft Retail Strategy • Summary Statement Over the past several years, the Petaluma School District has attempted to sell the Kenilworth School site in order to raise funds for the construction of a new school on the East side of town, near the G &G Market. Originally, the HUB made a successful bid to'purchase Kenilworth. But with.a decline in the economy, the HUB failed to exercise its option to purchase the site. The School Distric t then turned to the City of, Petaluma for assistance. While the City was unable to meet the School District's financial objectives, it was able to find an interested: buyer for the site, Regency Realty Group, Inc. (RRG). RRG then entered;into an agreement to purchase 'the. Kenilworth site, agreeing,to complete its due diligence within 90 days. RR-G's option to p purchase the .Kenilworth site will lapse on May 18 RRG has determined that the current access to the site is inadequate, and that retail /mixed use development of the site will,require wider and more direct access from East Washington Street to the Kenilworth School site. The preferred access would be located over what. is.now the eastern portion of the Park and Ride lot, owned in fee by the City of Petaluma. In order to provide,an access easement in that location, Ithe lease between the City and the Fourth District Agricultural Association (Association) would need to be , amended to exclude. the Easement Area from the leased premises. The Fair has agreed in ,principle to a lease amendment, contingent upon a :number of conditions. Among other concessions, R"RG has agreed to pay monetary compensation to the Association, and to undertake measures to ensure that; Park & Ride and Fair patrons have access to replacement parking as an .alternative to the spaces that would-be omitted from the Fairground lease. In addition, the Association, has. requested that the City add the Fire House property on Payran Street to the premises covered by the lease. RRG has indicated that without an access easement, the purchase of the - Kenilworth School site is economically infeasible. The purpose of this itern is to support both the School District's construction of "a new school and the redevelopment of the Kenilworth School site by .granting RRG an option ;to acquire a nonexclusive easement' for pedestrian and, vehicular access to the Kenilworth site. Execution 'of he Option Agreement will enable RRG to purchase the Kenilworth site thus allowing the School District to use the sale proceeds, to complete construction of a new junior high school in time for the ,20, 05 school year. The proposed Option Agreement provides that the option is exercisable only upon. satisfaction of a number of conditions including the execution of an amendment to the Fairgrounds lease; completion of environmental review and the issuance of approvals for development of 'the Kenilworth School site. _Ifthe proposed development does not include at least 300,000 square_ feet of retail space, the exercise price will be the fair market, value of the easement area and the leasehold interest in the Firehouse Property., The proposed Easement Agreement, which would govern the use of the Easement if the Option is exercised," provides that RRG will be responsible for construction, installation and maintenance of the .roadway, sidewalks; landscaping, and lighting in the Easement Area. The Option Agreement does not obligate the City to grant any approval or authorization. required for the - _ development of the Kenilworth School site or for - the • easement area. The Agreement provides that the easement would terminate if the City determines to construct a public street providing access to the Kenilworth' site substantially comparable, to the access; that would be provided by the easement. Recommended City Council Action /Suggested Motion It is recommended that the City Council hold the first reading of the attached ordinance authorizing execution of the Option Agreement, execution of the Easement Agreement upon satisfaction of all' required conditions, and negotiation and execution of .a Lease Amendment, and pass the Ordinance to its second reading .on:May 17, 2004. Date: - ter Dater Today Date Revision #' a a e wised: File od 04/20/04` :# ' Hi \WordlKenilworth- Fair¢ r6unds \StaffR61?ortEasement0otion 2 r CTI'Y OF PETALUMA, C ALI F O RN IA MAY 3, 2004 AGENDA REPORT FOR DISCUSSION AND ACTION REGARDING THE INTRODUCTION OF AN ORDINANCE AUTHORIZING.(I) EXECUTION'OF AN OPTION AGREEMENT PROVIDING REGENCY REALTY GROUP, INC. AN OPTION TO ACQUIRE A NONEXCLUSIVE :PEDES.TRIAN AND 'VEHICULAR EASEMENT BETWEEN EAST WASHINGTON STREET AND TIhEKENILWORTH SCHOOL, SITE, (II) EXECUTION OF AN EASEMENT AGREEMENT FOLLOWING. SATISFACTION O ALL REQUIRED CONDITIONS, AND �(IIl) NEGOTIATION' AND,EXECUTION OF AN AMENDMENT TO THE FAIRGROUNDS ASSOCIATION LEASE IN ORDER TO EXCLUDE THE EASE'MENT'AREA AND THE SKATEBOARD /SOLAR COLLECTOR ; A AREAND ADD, THE PAYRAN `STREET FIREHOUSE PROPERTY TO THE LEASED PREMISES EXECUTIVE SUMMARY Over the past several years, the Petaluma School. District- has: attempted to sell the Kenilworth School. site'in 'Order 'to raise funds for the construction of a new school on the East .side of town, near the G &G Market. Originally, the HUB made a successful bid to `r. purchase Kenilworth. But with a decline in the economy the HUB failed to exercise its option to purchase the site. The School District then turned to the City of Petaluma for assistance. While the City was unable to meet, School District's financial objectives, it was able to find aninterested buyer for the site, Regency Realty Group (RRG). RRG then entered into an agreement to purchase the ; Kenilworth site, agreeing to complete 'its due diligence within 9.0 days. RRG's option: to purchase the Kenilworth site will lapse on May 10 RRG has determined. that the current access to the site is inadequate and that retail/,mixed use development of the site will require wider and more direct access from East Washington Street ,to the Kenilworth School site. The preferred access owned w fee be the Ca o ver what is n ow the eastern portion: of the Park. and Ride .lot, y tY of Petaluma. order to provide an' access easement in that location, the '.lease between the City and the Fourth District Agricultural Association (Association) needs to be amended to exclude the Easement, Area,. from the leased premises_ The ,Fair has agreed in principle to a lease amendment, contingent upon a number of conditions. Among other concessions, RRG has agreed to pay monetary compensation to, the Association and to undertake measures to ensure that Park & Ride and Fair. patrons `have access to replacement parking as an alternative, to the spaces that would be omitted from the Fairground lease. In addition, the Association has requested th -the C t y add Fire House jproperty on Payran Street to the 'premises covered by the • 3 RRG has indicated that without an access :easement, the purchase of the Kenilworth School site is economically infeasible. The purpose of this item is to support both the • School District's construction of',a new school and the. redevelopment of'the Kenilworth School site by granting RRG an, option to acquire a nonexclusive pedestrian ..and vehicular access easement. Provision of the option will make RRG's purchase of the Kenilworth site feasible thereby facilitating the School District's access to funds necessary for the construction of a new junior high.school on the east side for occupancy in 2005.. The proposed Option Agreement provides that the Option is exercisable only upon satisfaction of a number of conditions, including execution of an amendment to the Fairgrounds lease to exclude the Easement Area from the leased premises; the completion of environmental review, and the issuance of approvals for development of the Keni_l'worth School site. If the- proposed development does not, include at. least 300,000 square feet of retail space; the exercise price will be the fair market, valueIofthe easement area and the Leasehold 'interest' in the Firehouse Property. The ,proposed Easement Agreement which is attached as Exhibit B to the Option Agreement and which would govern the conditions of use if the Option is. exercised, provides. that RRG will be responsible for construction and maintenance of the roadway, sidewalks, lighting and landscaping in the Easement Area. Neither the execution of the Option Agreement nor the grant, ofthe, option pursuant to the Easement Agreement obligates the. C_ ity to grant any approval or authorization, required .for the development of the -Kenilworth Schools site or the Easement Area. The Agreement provides that the easement'would terminate if the Cit y d'etermi'nes to .construct, a .public• street providing access to the Kenilworth site substantially comparable to the access that would be provided by the easement. 2; BACKGROUND On January 1,, 1972, the City of 'Petaluma leased the current Fair site,`to the 4 th District Agricultural Association. Over the years since, there have been several modifications to the lease. :Another lease ameiidnient is now required in order to provide RRG with an access easement to the Kenilworth School site: The Fair has agreed :in principle to the .amendment subject to several conditions, and RRG has agreed to the following: • To replace the parking, spaces that are currently located in the Easement Area,. RR-G will either provide the Fair with an easement for parking in its, commercial lot or will pave a sufficient portion of the Fairgrounds Parking: Lot B to replace the lost parking spaces. RRG will provide the Fair with an access easement to Lindberg Lane. • RRG will provide signage for the Fair on the shopping center ;signage RRG will install on Washington Street (sub .ect to City and CalTrans approval). • RRG will pay approximately $150,000 to the Fair. • 4 LA In :addition, in exchange for its agreement to exclude the Easement Area and the Skateboard and Solar Collector Area from the ".Lease the Fair .Association has asked the City of Petaluma to add, the leased premises the Fire House property on Pay' 'Street when it is vacated by COTS after the City's Sewage Treatment Plant is 'relocated and the program.is discontinued. As part, of a 1996 amendment to the .Association Lease, the County provided assistance in paving the Park & Ri°de Lot., In order to altetlhe Park & Ride lot, it will be necessary to obtain the consent of the "Sonoma County Transit Manager. Staff has contacted the Transit Manager, who indicates that he: will support the ,modification because the portion of the Park & Ride lot required for the easement is seldom used. In November 1997, the City Council passed Resolution'97 -347, "approving 'the Kenilworth Recreation Master 'Plan (Attachment 2). The plan did not contemplate the sale of the achool property'to a developer for mixed -use retail development, but instead assumed that the school would continue fo exist in its current location. 'The School District, the City's Recreation Director and the various sports leagues are working collaboratively to relocate the Skateboard Park .and the recreational :uses that are currently located on the school site to other locations. In November . 2003, the Petaluma. Community Development Commission (PCDC) received a draft `Retail Strategy in . which the Kenilworth/Fairgrounds site was recommended for retail uses that would reduce or eliminate the retail leakage to adjacent cities. Attachment 3 consists of the relevant section -of the Draft Retail Strategy. 3. ALTERNATIVES ,A. Pass First :Reading of the Ordinance: Under this option, the City Council would hold the first reading of the proposed ordinance authorizing providing RRG with an option to acquire a nonexclusive easement,, authorizing execution of an easement g eement upon satisfaction of all required.conditions and ;authorizing the negotiation and execution `of, an amendment to the Fairgrounds lease, and pass the ordinance to the second reading on May 17 th B:, Decline to Hold the Fir,.st Reading: Under- this option, the City Council would defer consideration of the ordinance. This alternative will make the sale of the'Kenlworth School site infeasible, as .RRG would not have adequate access* to the site. As a result the School. District_ will lack the. fund s necessary to :begin construction of a new junior high , school. • 5 5 a 4. FINANCIAL IMPACTS The addition of the ;Fire House property on Payran Street to the. Fair Association lease would reduce the amount of rent, that the City might be able to charge a future tenant for the l6 years remaining in the term of the lease. Assuming that $2,000 per month could be generated„ this would amount to approxi inflationary adjustments. mately $384,000 over 16 years, without any • Sales 'Tax- Should retail development ultimately occur on'the Kenilworth site, potential sales tax of approximately $600,000 to $1,000,000 could be received annually. • Property Tax Increment: With regard to PCDC property tax increment, assuming a development value of $60 'annual receipts: would be approximately $4,00,000. S • CONCLUSION Petaluma Schools would like to build a new school on the East side of 'town. The only way the School. District can finance construction is to sell the Kenilworth. School. site. Lion to RRG has an option purchase the site; but in order for RRG's purchase to, be economically feasible; RRG needs an access easement across the Park &. Ride Lot. P.royision of an access easement across the City -owned lot requires an amendment of the Fairgrounds lease to •exclude the easement area and the skateboard/solar collector area. The Fair .Association is amenable to providing an easement, provided that certain. conditions are met, including the addition of the Payran fire station property to the :leased pr`emises.. RRG has agreed to satisfy the conditions that are within RRG's control, including g p yment of a sum of money, installation of signage, and ,provision of replacement parking and an easement to Lindberg Street. The County of Sonoma Isuppor ts . provision of an easement across a seldom used portion of the .Park -. & Ride. Lot. The City's grant to RRG of an option to acquire all easement across the Park & Ride Lot . would make RRG s purchase of the Kenilworth School site economically feasible and thus facilitate .the School "Districts construction of a new school. Con ' COMPLETION : The City Council's. adoption of an ordinance (i) authorizing execution of an option. agreement pursuant to which RRG: may acquire a- pedestrian and vehicular easement Providing access to the Kenilworth School site, (iii) upon. satisfaction of all required conditions, authorizing execution of an easement agreement that would require RRG to construct and `maintain the roadway and improvements in the easement area, and- (iii) g negotiatio otiation and execution of an amendment to. the Fairgrounds lease pursuant yr property to which .the Easement Area and the skateboard/solar collector area will be excluded from the lease and the.Pa an Firehouse will be added to the leased premises. 6 7. RECOM' MENDATION =:` It is recommended that the City Council Bold the first reading of the attached ordinance authorizing execution of .the Option Agreements execution of the, Easement Agreement upon satisfaction of all required conditions and negotiation and execution of a Lease Amendment, and pass the Ordinance to its second' reading on May 17, 2004. 0 r] 7 7 • Attachment 1 AN ORDINANCE OF THE COUNCIL OF THE CITY OF PETALUIVIA AUTHORIZING EXECUTION OF AN OPTION AGREEMENT WITH REGENCY REALTY GItO.UP, INC. FOR A NONEXCLUSIVE VEHICULAR AND PEDESTRIAN ACCESS EASEMENT, AUTHORIZING EXECUTION OF AN EASEMENT AGREEMENT ;U� � PON SATISFACTION OF ALL, RE Q UIRED CONDITIONS, AND AUTHORIZING `NE.G.OTIAATI N AND EXECUTION OF'AN AMENDMENT TO THE F AI RGR OUNDS ASSOCIATION LEASE ORDINANCE NO. _ N.C.S. Introduced by Seconded by BE IT ORDAINED BY THE COUNCIL OF7HE CITY OF PETALUMA AS FOLLOWS: WHEREAS, the City of..Petaluma is the owner of the Easem A to the Option Agreement attached - hereto as Ex ent Area described in Exhibit hibiti; and WHEREAS, Regency Realty Group Inc. School Site from the Petaluma Joint Union High Schoo DGstrict,an dopton to purchase the Kenilworth WHEREAS, RRG's purchase of the Kenilworth School Site will enable the Petaluma District to construct a new junior high school to "replace the dilapidated school facilities currently on the Kenilworth School Site; and y ocat d WHEREAS, access to the Kenilworth School Site is inadequate to make development feasible, 9 � exclusive pedestrian. and vehicular easement over the and RRG desires to ac uire the, right to obtain a non Easement Area, in order to improve access to the Kenilworth School Site and 'facilitate its development; velopment; WHEREAS, the redevelopment of the Kenilworth School Site will be of benefit to the Cit and for the Project Area,. the Community Development Project Area and will be cons stem with the merit y 'and p plan adopted WHEREAS, 'RRG 'has agreed to undertake certain obligations with the construction and mainten in connection ance of improvements located within the Easement Area and the rovi th 0 replacement parking for Ihe parking spaces currently located within the Easement Area an p of d WHEREAS, the Fair Association has agreed in principle that it will execute an amendment to lease with the City to exclude from the leased premises the Easement Area :and the Skateboard/Solar Collector Area, provided the City agrees to add the Payran Firehouse property to the leased premises; and. WHEREAS, the .City Council finds that the actions authorized and granted to the City Manager under this ordinance are exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Sections 15061(b)(3), 15303,153'04, and' 15333 of theCEQA Guidelines. NOW, THEREFORE,, THE CITY COUNCIL OF THE CITY OF PETALUMA, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS': Section L . The City Manager is hereby authorized to execute an option Agreement substantially in, the form attached hereto as Exhibit I pursuant to which Regency Realty' Group, Inc., a Florida corporation ( "Regency ") shall be granted an option to acquire an easement, across the Easement Area described in Exhibit A to "the Option Agreement on the terms and conditions set forth in the Option Agreement. Section °2. Provided that all conditions precedent to the exercise of the, option have been satisfied, the City Manager is hereby authorized to execute an Easement Agreement, substantially in the form attached as Exhibit B to the Option, Agreement pursuant to whichthe;Easement'wou'ld be granted to Regency and Regency would be obligated to construct and maintain street, sidewalk lighting and landscaping in the Easement Area. •' Section 3. The City Manager is hereby authorized to negotiate and execute -an amendment to the lease by and between the City of Petaluma and the Fourth District Agricultural' Association pursuant to which (i) the Easement Area described in ` Exhibit A to the Option. Agreement and the Skateboard/:War Panel Area described in Exhibit A -1. to the Option Agreement would be excluded from. the leased premises, and (ii) the Payran Firehouse Property would be added, to the leased premises, Exhibit II . Section 4. The City Manager is hereby authorized to undertake such further action as necessary to carry out the intent of this Ordinance. Section 5 . If any section, subsection, sentence, clause or phrase or word of this ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid`by a court of competent jurisdiction, such decision 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 or otherwise invalid. Section 6 . This ordinaaice shall become effective thirty (30) days after the date .of its adoption by the Petaluma City Council. Section T The City Clerk is hereby directed to post this ordinance for the period.and- in.the manner required by the .City Charter. • • • INTRODUCED and ordered posted/published this ADOPTED this day of AYES: NOES: ABSENT: ATTEST: Gayle Petersen, City Clerk day of 2004 by the following vote: David Glass, Mayor APPROVED AS TO FORM: .Richard Rudnansky, City Attorney 2004. I c� OPTION AGREEMENT THIS OPTION AGREEMENT ( "Option Agreement or "Agreement ") is entered into effective as of 2004 ( "Effective Date "), by and between the City of Petaluma, a municipal corporation ( "City ") and Regency Realty Group, Inc., a Florida corporation ( "Regency "). City and Regency are hereinafter - collectively referred to as the "Parties." A. City is the owner of certain. real property (the "Easement Area ") located within the City of Petaluma and more particularly described in Exhibit A attached hereto and incorporated herein by this. reference. B. Regency has an option to purchase the real property located at Kenilworth Court ( "Kenilworth School Site ") from the Petaluma Joint Union High School District ( "School .District "). C. Regency's purchase of the Kenilworth School .Site will enable the School District to construct a new junior high school to replace the dilapidated school facilities currently located on the Kenilworth School Site. D. Access to the Kenilworth. School Site is inadequate to make development feasible, and Regency desires to acquire'the right to obtain a nonexclusive pedestrian and vehicular easement ( "Easement ") over the Easement Area in order to improve access to the Kenilworth School Site and facilitate its development. E. The redevelopment of the Kenilworth School Site will be of benefit to the City and the Community Development Project Area ( "Project Area") , nd will be consistent with the redevelopment plan adopted for the Project Area. F. At its meeting of May - , 2004, the Petaluma City Council authorized the grant to Regency of an easement across the Easement.Area, contingent upon and subject to certain conditions. G. In consideration for the grant of Easement and the rights granted hereunder, Regency has agreed to undertake certain obligations in connection with the construction and maintenance of improvements 'located within the Easement Area and the provision of replacement parking spaces for those currently located within the Easement Area. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which. are hereby acknowledged, the Parties hereby ragree as follows. 1. Grant of Option. City hereby grants to Regency an option to acquire an easement across the Easement Area ( "Option ") on the terms and conditions set forth herein and in the Easement Agreement ( "Easement Agreement")' attached hereto as Exhibit B and incorporated herein by reference.. • 680180 -3 1a 2. Reservation of Rights /Nonexclusive Easement Regency acknowledges that the Easement shall be subject to (i) a reservation of rights allowing use of the Easement Area for roadway,, pedestrian and vehicular ingress, egress and access by members of the public, (ii) City's right to. grant easements to other parties for, among other purposes, the installation of utilities and storm drain improvements in the Easement Area, provided that Regency's use of the Easement is not unreasonably impaired thereby, and (iii) City's right to convert the Easement. Area to a public street provided that such street provides access to the Kenilworth School Site comparable to the access created by the Easement. 3. Conditions Precedent. Regency's acquisition of the Easement is expressly conditioned upon all of the following, and Regency and City agree that Regency shall have no right to exercise the Option granted hereby .prior to fulfillment of all of the following: a. Regency's acquisition of'the Kenilworth School Site and Regency's provision to City of evidence reasonably satisfactory to City that Regency possesses title to the Kenilworth School Site b. Execution by the Fourth District Agricultural Association of the State of California ( "Association ") of a legally binding amendment ( "Lease Amendment ") to that certain Lease of Kenilworth Park for Fair, Exhibition and Recreation Purposes by and between the City as Lessor and the Association as Lessee, dated January °1_, 1973, and amended October 3, 1996 (as so amended, the "Lease "), pursuant to which the Easement Area and the "Skateboard Park and Solar Collector Area" (as more particularly described in Exhibit A -1 attached hereto shall be excluded from the Lease. C. Regency's satisfaction of (or Regency's execution of a legally binding commitment-to satisfy) all of the following conditions at Regency's sole expense;: (i) Provision to the Association of an easement granting the Association and its employees, invitees, and patrons access to the Fairgrounds from Lindberg Street; (ii) Either (a) performance of work necessary to pave a portion of the property known as Fairgrounds Parking Lot B" sufficient in size to replace parking spaces that will be lost as a result of the use of the Easement Area, or (b) provision to the Association of an easement allowing patrons of specified events the right to park vehicles in the parking lot Regency shall construct on Regency's property; (iii) Acquisition of the written consent of the Sonoma County Transit Manager and of any other party from whom consent is required to the alteration of the Park & Ride lot developed pursuant to that certain Petaluma Fairgrounds Park & Ride Facility Agreement for Development, Use and Maintenance, dated October 3 1996, by and among the City, the County of Sonoma, tha School District and the Association; (iv). Installation of .a sign for the Sonoma -Marin Fair on East Washington Street; and 689180 -3 13 M Payment of the sum of [One Hundred Fifty Thousand Dollars • ($150;,000)] to the Association. e. Regency's acquisition of all entitlements ( "Project Approvals ") necessary for the development of the Kenilworth School Site, including without limitation completion of CEQA review for the project to 'be developed on such site and for the creation of a roadway providing access to such site across the Easement Area The Parties acknowledge that this Agreement does not obligate the City to grant any approval or authorization required for the development of the .Kenilworth School Site or the Easement Area. f. Execution of an agreement pursuant to which Regencyagrees, at its expense (i) to construct a project in conformity with the Project Approvals, (ii) to construct and install roadway, sidewalk, lighting and landscaping improvements (collectively "Improvements ") in the Easement Area regardless of Whether the City establishes a public street in the Easement Area, and (iii) to maintain the Improvements unless and until City establishes 'a public street in the Easement Area. 4. Consideration. If the Project Approvals grant entitlements to develop a project that includes at least 300,000 square feet of. retail space. in a mixed -use development that includes housing, then provided that all conditions set forth in Section 3 have been ,satisfied, Regency shall be obligated to pay no further consideration for the Easement ,or the rights granted by this Agreement. If the condition set,forth in the immediately preceding sentence is not satisfied, then upon exercise of the Option, Regency shall pay to City the fair market value at the'time of exercise of (i) the Easement Area, and (ii) the leasehold interest in the property known the "Payran Street Firehouse Property" which City has agreed to add to the premises leased to the Association in order to - induce Association to execute the Lease Amendment. If the Parties are unable to agree upon a fair market value, then each Party shall appoint an appraiser. If the two appraisers cannot agree .upon a value, then they shall appoint a third appraiser. If the third appraiser agrees with either of the original appraisers, the value so established shall be binding on the Parties. If there is no such agreement, the middle value shall be binding on the Parties. Payment of the consideration set forth in this Section is not a condition. precedent to acquisition of the Easement; provided however, Regency shall be obligated to pay such consideration to City not later than thirty (30.) days following the determination of value pursuant to this Section, and in no event later than 180 days following delivery of Regencys Notice of Exercise. 5. Term. The term of the Option (the "Option Term ") shall commence on the date when all conditions set forth in Section 3 hereof have been satisfied, and shall end at 5:00 p.m. on the seventh (7 anniversary of the Effective Date; provided however, this Option Agreement shall terminate and be of no further effect if Regency has not acquired the Kenilworth School Site by June 30, 2004. Notwithstanding any contrary provision contained he this .Option Agreement shall terminate and be of no further effect if and when City determines to establish a public street through the Easement • Area or in a substantially comparable location which will provide access to the 689180 -3 3 I IN Kenilworth School Site comparable to the access provided by the Easement. No compensation will be payable to Regency in the event of such termination. • 6. Notice of Exercise; Close of Escrow; Allocation of Costs. At any time during the Option Term Regency may exercise the Option by providing City with written notice of its intent to exercise ( "Notice of Exercise ") together with evidence reasonably satisfactory to City that all conditions set forth in Section' 3 have been satisfied. Conveyance of the °Easement shall be consummated through an escrow be' opened within , three (3) business days following delivery of such Notice of Exercise. Unless otherwise agreed to by the Parties, within thirty (30) days following delivery of the Notice of Exercise, the Parties shall execute and deposit into escrow an Easement Agreement substantially in the form attached hereto as Exhibit B , and shall, cause a copy to be recorded in the Official Records of Sonoma County upon payment by Regency of any consideration payable pursuant to Section 4 . The cost of investigation Regency undertakes in connection with acquisition of the Easement, including but not limited to environmental investigations, shall' be payable by Regency. Property taxes and assessments shall be prorated as of the close of escrow, and Regency shall be responsible for payment of all such charges from and after close of escrow. Regency shall be responsible'for payment of all costs of closing, including without limitation, all escrow charges, transfer taxes and title insurance premiums. City covenants that it shall do nothing to cause the Easement Area to be subject • to Liens, claims or encumbrances that would interfere with conveyance of the Easement or Regency's use of the Easement Area. 7. Assignment; No Third -Party Beneficiaries This Option. Agreement and the option .conveyed hereby is personal to Regency and may not be assigned by operation of law or otherwise without the express written consent of City which shall not be unreasonably withheld or'delayed provided that the assignee assumes all obligations of Regency hereunder. This Agreement is not intended to benefit, and shall not run to the b enefit of, or be enforceable by,, any person or entity other than the Parties and their permitted successors and assigns. 8. Miscellaneous Provisions. 8.1 Notices. Except as otherwise specified'' in this Agreement, all notices to be sent pursuant hereto 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 shall be deemed delivered upon receipt; 689180 -3 4 15 • (ii) certified or registered mail., return receipt requested, in I which ease notice shall be deemed delivered two (2) 'business days after deposit ,postage prepaid in the United'States mail,; (iii) nationally ' ') tonally recognized overnight courier, in which case, notice shall be deemed delivered one (1) day after deposit with such courier; or (iv) facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided theft a transmission report is. generated reflecting the accurate transmission thereof. CITY: City of` Petaluma 11 -English Street Petaluma, CA 94952 Attn: Telephone Facsimile: REGENCY: Regency Realty Group, Inc.. 1850 Mt. Diablo. Blvd,, Suite 225 Walnut Creek, CA 94596 Attn: Tom; Engberg ® Telephone; Facsimile: With copy to: Hanson B.ridgett Marcus Vlahos'Rudy LLP 80 E..Sir Frances Drake Blvd, Suite 3E Larkspur; CA 94939 Attn Mary K. McEachron 8.2 Attorneys Fees. In; any action at law or in equity, arbitration or other proceeding arising, 'in connection with this Agreement, the prevailing, party shall recover reasonable attorneys' fees and other costs, including put not lim,ited'to court costs and expert and consultants fees incurred in connection with such action, in addition to any other relief awarded, and such attorneys' fees and' costs shall be included in any judgment "in such action. 8.3 Amendments: This Agreement may be amended only by. a written instrument executed by "the Parties or their successors in interest. 8.4 Severability: If any provis of this Agreement shall be held to be invalid, legality and enforceability of the rem_ aining portions hereof shall not in any way be affected or impaired thereby. 689180 -3 5 l� 8,5 Waiver.. A waiver b either party of the performance of any covenant or condition y • ion herein shall not invalidate this Agreement nor shall' it be .considered: a waiver of any other covenant or condition, nor,shall, the delay or forbearance by either party in exercising any remedy or right be consideredi a waiver of, or an estoppel against, the later exercise of such remedy or right 8 Remedies; No Damages Against City Upon the occurrence of'an;. event of default' hereunder., the Parties may pursue all.remedie's at law or in equity, expressly including the remedy of specific performance of this Agreement; provided however, in no event shall damages ,be: awarded against City upon an event of default hereunder, upon. termination of this Agreement, pursuant Ito the provisions hereof', or upon determination by a wart of competent jurisdiction that this Agreement or an g y part hereof is unenforceable or invalid. fication.. Regency shall indemnify, defend and hold harmless City and the Petaluma Community Development Commission and their respective, boards commissions, and elected and appointed officials, employees, agents and contractors (collectively " Inden ,nitees ") from, and against all claims, actions, proceed_ ings, m deands, liabilities judgments', losses; g expenses (including reasonable attorneys "fees and expenses ),and costs, (collectively "Claims ") arising out of or related to this Agreement including any claim, action or proceeding to attack, set aside, void or annul this Agreement. or an g _ y part hereof.. City shall promptly notify Regency of any such Claim. Nothing contained in this Section shall prohibit the City from participating ;in a defense of�any Claim, and if the City chooses'to do so Regency shall reimburse °City for reasonable attorneys' fees and expenses incurred by City. 8`8 Entire Agreement, This Agreement,, together with the Easement Agreement, the Lease Amendment, and Exhibits A through C, attached hereto and incorporated, herein bythis reference, contains the entire agree'ment,between the Parties with respect to the subject matter hereof, and supersedes all prior negotiations documents and discussions pertaining thereto. 8.9 Parties Not Co-Venturers; No Brokers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co- venturers; or principal and agent with one another. Each Party .represents and warrants 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 shall defend, indemnify, and ,hold the other Party harmless from any claim, expense, cos_ t, loss or liability imposed by any party claiming .a fee, or commission in connection with this Agreement or the acquisition of the Easement and arising out of the indemnifying Party's conduct. 8.10 Captions. The captions of the Sections of this Agreement are for convenience only and are not intended to affect the interpretation or construction of the provisions hereof. 689180 -3 n 0 t 8.11 Counterparts. This Agreement; may be executed. in multiple counterparts, • each of which shall be an original :and allof which together shall constitute one agreement. 8.12 , Further Assurances; Memorandum The Parties agree to execute, acknowledge and deliver;to the other such other documents and instruments, and to undertake such actions, as either shall reasonably request or as may be necessary to carry out the intent of this Agreement. Without limiting the generality of the foregoing (i) the Parties agree to execute and record in th.6Official Records of Sonoma County a Memorandum of Option substantially in the form attached hereto as Exhibit C , and (ii) upon termination of this, Agreement or upon expiration of the Option, Regency agrees to execute, acknowledge and deliver to City a quit ,claim in recordable form within ten (10) days following request by City, and to execute, acknowledge and: deliver such other documents reasonably necessary to remove the cloud of this Agreement from title. 8.13 Governing Law;; 'Time'is of the Essence This Agreement shall be interpreted under and pursuant to the laws ofAhe State :of California without regard to principles of conflict of laws. - Time is of the essence and is a material term for all conditions and provisions contained'in this Agreement. IN WITNESS'WHEREOF, the City and Regency have executed this Option Agreement as of the date first written above. • REGENCY By: Its: CITY OF PETALUMA s Its: ATTEST: City Clerk • 689180 -3 7 STATE OF CALIFORNIA ) ss. COUNTY OF SONOMA ) a On before me, personally appeared ' personally known to me (or proved to me that 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 signatures) 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'. • • 30 EXHIBIT B TO OPTION AGREEMENT • Recording.Requested::by and Wf en Recorded, return to City Qf'Petaluma 11 'English Street Petaluma, CA 94952 Attn; City Clerk EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 THIS LINE RESERVED FOR EASEMENT AGREEMENT This Easement Agreement ( "Agreement "), dated as of , 2004, is executed by and between the. City of Petaluma, a California municipal corporation ( "City ") and Regency Realty G "roup, a Florida corporation ( "Regency "). City and Regency are hereinafter collectively referred: to as the "Patties." ® RECITALS A. Cit is the owner of certain real pro. perty (the "`Easement Area ") located within the City of Petaluma and. more particularly described in Exhibit A attached hereto and incorporated herein by this reference. B. Regency has purcliased the real property located at Kenilworth Court ( "Kenilworth School Site ?') from the Petaluma Joint District "). Union High School District ( "School C. Regency's purchase of , the Kenilworth School Site has enabled or will enable the School District to construct a new junior high school toy replace the dilapidated school facilities located on the Kenilworth School Site. D. Access to the Kenilworth School Site is inadequate: to snake development feasible, and Regency d6siti5s'torradquire a nonexclusive pedestrian and vehicular easement over the Easement Area; in order to improve access to the Kenilworth School Site and facilitate its developinent. E. The redevelopment of °the Kenilworth School Site will be of :benefit to the City and the Community Deelo.pment` Project. Area ( "Project Area"), and will ,be consistent with the redevelopment plate adopted for the Project Area. • F At its meeting of May , 2004, the Petaluma City Council authorized the execution 689280 -3 1 3(O of an option agreement (" Opti0n Agreement ") pursuant to which the City agreed to grant to Regency an easement across.the Easement Area, contingent upon and subject to certain conditions as set forth in the Option Agreement. G. Regency has satisfied all conditions precedent to the exercise of the Option. H. The Parties desire to ensure that: (i) members of the public•will at all times have access to and through the Easement Area; (ii);a roadway, sidewalks, 'landscaping and. adequate. lighting ("Improvements ") will be constructed and installed in. the Easement Area, and iii the . -1 asement Area and the improvements constructed or installed therein will at all times be maintained in a neat clean, safe and orderly condition. NOW THEkEFORE, for good and valuable consideration, the receipt and sufficiency of which -are hereby acknowledged, the Parties agree as follows. Grant of Easement. City hereby grants to Regency, subje.ctto the.terms and editions set forth in th_isAgreement,_a nonexclusive easement for pedestrian,and vehicular'ingress, egress and access ( "Easemert ") across the Easement Area for use by Regency and 'its employees, licensees, agents,'contractors, invitees ;guests,, visitors, customers, vendors, service providers, and tenants for the purpose of p'r`oviding access' to , and from the Kenilworth School 'Site.. 2. Reservation of Rights. Regency acknowledge& that the foregoing igrant of easement is subject to: (i) a reservation of rights allowing use of the Easement Area for strian; and vehicular ingress, egress and access by members of ;the public, (ii.) City's right to grant easements to other parties for, among other purposes, the installation of utilities and storm drain improvements in the Easement Area, provided that Regency's. use of the Easement is not unreasonably impairedthereby, and (iii;) Citys.right to convert'the Easement'Area to a public street provided thatsuch.treet. provides access to the Kenilworth. School, Site comparable to the access created by the Easement., Regency acknowledges and agrees that upon termination of the. Easement in accordance form of compensation includin f without lim tationRe �ency shall not be entitled to any O O 9 (including , compensation for the cost of construction of improvements in th.e Easement Area), and (b) Regency hall execute, acknowledge,,'and deliver to Citya quit claim in recordable form within ten (10) days following request by City and shall execute, acknowledge and deliver such other documents reasonably necessary to effectuate the termination of this Agreement and the Easement. City acknowledges and agrees that upon termination of the Easement in accordance with clause (iii) of this Section, notwithstanding any contrary provision . contained' herein, Regency shall have no further obligation to maintain the Improvements or to indemnify City pursuant to Section'8 hereof except in connection With Claims arising as a result of or in connection with Regency's construction of the Improvements or Claims seeking to attack, set aside, void or annul this Agreement or any part Hereof. 2 0 3. Character of Easement. (a') The easement created by this Agreement is expressly.for the benefit of Regency as _ owner of the Kenilworth School Site. Regency's property interests thereby benefited shall be the dominant estate, and the property upon which the easement is located shall be the servient estate. (b) The easement created ,by.this Agreement is appurtenant -to the dominant estate, shall run with the land,, and may not be transferred, assigned or encumbered except as an appurtenance to such dominant :estate. (c) Each covenant.contained 'in this Agreement,constitutes a covenant running with the land and shall inure to the benefit of.and be _binding upon the Parties and their respective successors and assigns. Any person accepting a deed for other instrument conveying, granting or assigning any property affected -or benefited by this Agreement or any portion thereof or interest therein shall take title subject "to this Agreement, and such person shall be deemed to have assumed all of the applicable.obligations imposed hereby with regard to such property regardless of whetherrthisAgreement is mentioned in such deed or other instrument. Whenever a reference in'this Agreement is made to City or Regency, such reference shall be .deemed to also mean a reference to the successors in interest of each such party (or parties), as applicable, as 'if in every case so expressed. 4. Duration. Subject to City`s right to terminate the Easement upon the creation of a public street pursuant to Section 2 , the shall be,perpetual in duration unless the Parties mutually agree in writing to terminate the Easement. 5. No Barriers The Parties agree, that absent the written consent of the Parties, no wall, fence, or barrier of any kind which impairs or,impedes access to or use of, the Easement shall be constructed;. or maintained on or adjacent to the Easement Area, nor shall the; Parties do anything which shall prevent, impair or the use or exercise of the Easement or the free, access and movement across 'the Easement Area. 6. Construction and Maintenance 6.1' Construction: Regency shall, at Regency's sole cost without reimbursement, complete construction and installation of sidewalks, roadway improvements, lighting and landscaping in the Easement Area in accordancwwith City's, approvals for the development of the Kenilworth ` Scchool Site. At Regency's sole cost without reimbursement, Regency shall- (i) maintain, repair, replace and reconstruct in accordance with the standard set forth in Section 7 , the sidewalks, roadway, landscaping and lighting located; in the Easement Area,, (H) install and maintain adequate. lighting for pedestrian and vehicular travel across the Easement Area, and (iii) MIG MIMM maintain the Easement.Area in compliance with applicable laws and regulations, including without limitation-, the Americans with Disabilities Act ( "ADA ") as an unobstructed path of travel. between East Washington Street and Kenilworth Court. 6.2 Maintenance. (a) Regency -shall maintain the Easement Area and the improvements located thereon. at Regency's sole cost and expense. (b)i Without limiting the,generality of the foregoing, .Regency shall be responsible of,the following with respectto the Easement Area: (i) maintenance,& the surface of sidewalks and pavement in level condition and evenly covered with the type of surfacing material originally installed, or such substitute as will in all respects be equal to such original material in quality, appearance and durability, (ii_) maintenance and..irrigation of landscaping, (iii) maintenance and repair of such appropriate signs, markers and light fixtures as 'reasonably required; and' (iv) removal of papers, debris and ;refuse from the Easement Area. (c) Regency shall install at Regency's expense or shall reimburse City ,,for the cost of installation ;and maintenance of all traffic lights.and pedestrian! signal's City in its reasonable.discretion determines are. necessary pursuant to the Project Approvals and environmental review to ensure the safe use of the Easement Area including; without limitation traffic signals that may be located atthe East Washington Street and the Kenilworth Court entrances to the Easement Area. City shall provide Regency with a statement, of such expenses together with such documentation as Regency may reasonably request,, and Regency shall remit such sum within 30 days following receipt of such invoice. 7. Standards of Performance. Regency shall perform its construction, maintenance. and .repair obligations hereunder in accordance with the standards 'set forth in the Petaluma Central Business District Downtown Streetscape Master Plan, and shall perform all required work in ,a timely manner and in accordance with generally accepted principles of workmanship, using best efforts to minimize ' disruption in the use of the Easement Area during the course-of such work. 8. Indemnification. Regency shall indemnify, defend and hold harmless. City and the Petaluma Community Development. Commission and their respective boards, commissions and elected and appointed_ officials employees, agents and contractors ( °Indemnitees ") from and against: all actions, proceedings, claims, demands, liabilities, judgments, losses, expenses (including reasonable attorneys' fees and expenses) and costs (all of- the.foregoing, collectively "Claims ") arising out of or related to Regency's performance or failure to. perform its construction -and maintenance: obligations described in Section 6 . except, to the extent the same are attributable to the gross. negligence or willful misconduct of ,Ind.emnitees. Furthermore, Regency shall: •. indemnify, defend and hold harmless Indemnitees from and against any claim action or - 4 -4 � • proceeding to attack set aside, void or annul this Agreement or an y part hereof.: City shall .promptly notify Regency of any such Claim. Nothing contained in "this 'Section shall prohibit the City from participating in a defense of any Claim, and 'if the City chooses to do so, Regency, shall reimburse City for reasonable attorneys' fees and expenses incurred by City. It is the intent of- the Parties that City shall have no liability 11 :for Claims arising in connection with the use of the Easement Area other than as expressly stated in this Section. 9.. Taxes Regency -shall be responsible for payment - all taxes and assessments, including without limitation,possessory interest - taxes, if any, payable with respect to the Easement Area. 10. Insurance. (a) Regency shall at all times during the term of this Agreeme maintain, in full force and effect, commercially reasonable policies of commercial general liability insurance including coverage for injury to or death'of persons and damage to or destruction of property resulting from the construction, use„ operation, repair and maintenance of the: Easement Area and the improvements to be located therein, with a financially responsible insurance company or companies approved by City, in the amount of not less than Five Million Dollars ($5 per occurrence and Five Million Dollars ($5,000,000) annual ,general aggregate. The liability limit under each insurance policy shall be ..reviewed and adjusted every five (5) years, beginning from the date: of this Agreement as mutually agreed by the Parties If the. Parties are unable to agree, the liability.limit of each policy shall be increased by the percentage by which the Consumer Price Index (All Urban Consumers) for the San Francisco- Oakland =San Jose metropolitan area published by the U.S. Department of Labor has increased since the last date on which the. liability limits were set. (b) Regency shall furnish to City, on or before the Effective Date of this Agreement, evidence_ that the 'insurance referred to in this Section is'in full force and effect. (c) Each policy of insurance, shall: (i) name the Cityas additional insured thereunder, (ii):stipulate that °the insurance is primary insurance •andfihat no insurance or self- insurance of City will be called: upon to contribute to a .loss, and (iii) provide that the. policy' may not ,be cancelled or amended without at least thirty (30') days prior written notice to City.. (d) All policies shall be issued by-California admitted companies which hold a current rating of not less than A:VIII according to Best's Insurance Reports. (e) The Parties acknowledge that some of the foregoing insurance requirements may be fulfilled by a funded self: insurance program. Any such self= insurance must be • approved in writing by City, and shall not limit the liabilities assumed under this 3d Agreement. 11. Events of Default; Remedies. An Event of Default under this Agreement shall occur if either Party fails`to comply with any of the covenants or obligations hereunder and does not cure 7such failure within ten ('10) days after receipt of written notice,. reof (or in the case of a nonmonetary default, fails to commence to cure,su'ch default Within such ten -day period and thereafter'proceeds with due diligence to cure such default.) Upon the occurrence of an event of default hereunder, the Parties may pursue :all remedies at law or in equity, expressly including' the remedy of specific, performance of ahis Agreement; provided however, in no event shall damages be awarded ,against City upon an event of default hereunder, upon termination of this Agreement pursuant to the provisions hereof, or upon determination by a court of 'competent jurisdiction that this Agreement :or any part hereof is unenforceable or invalid. 12. Miscellaneous. 0 12.1 Effective Date This Agreement shall be effective as of "the 4ate this document is recorded°in the Official Record ssof'Sonoma County. 12.2. No Joint Venture; No Brokers No provision of this Agreement shall be deemed to constitute the Parties as partners, principal and agent, or joint venturers with one another. Each Party represents. and warrants to the other that no brokers have been retained.,or consulted in - connection with the is,transaction other than as disclosed, in writing to the other Party.. Each Party shall defend, indemnify,, and hold the other Party harmless from any claim, expense, cost; loss or liability imposed by any party claiming; a fee or commission in connection with th'is Agreement or the acquisition of the Easen en' and arising out of the indemnifying Party's conduct. 12.3 No Waiver No waiver of, acquiescence in or consent, to any breach of any term, covenant or condition hereof shall be construed as, or constitute a waiver of, acquiescence in ; orconsent.to, any other,. further or succeeding breach of the same or any other term, covenant or condition. pursuant to this Agreement shall be made in Writing, i herein, all notices to be sent 12.4 Notices Except as otherwise spec p 9 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: 0) personal d_elivery,, in which case notice is effective upon deli'uery; (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; 31 • (iii) nationally recognized .overnight courier, with charges prepaid or chargedto the sender's account, in which case 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 - class 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 considered to have: been received on the next business day if'it is received after 5 :00. p.m. recipien s- time or on a nonbusiness day. City: City of Petaluma 11. English Street Petaluma, CA 94952 Attn: Telephone: Facsimile: Regency:- Regency Realty Group, Inc. 1850 Mt.,,Diablo_ Blvd., Suite 225 Walnut .Creek,, CA 94596 Attn: Tom Engberg. 'Telephone: Facsimile: With copy to:. Hanson Bridgett Marcus Vlahos Rudy LLP 80 E. Sir Frances Drake Blvd,, Suite 3E Larkspur, CA 94939 Attn: Mary K. McEachron 1'2 5 Further Assurances , The Parties agree to execute, acknowledge and deliver to the other- such - other documents and instruments., and to undertake such other actions s, either shall reasonably request as may be necessary to carry , out the intent of this Agreement. 1.2,6 No Third Party Beneficiaries: There shall, be no third party beneficiaries to this Agreement except as specifically set forth herein. 12 -,7 Governing Law This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. 12.8 S'everability If any term, provision, ,covenant or condition contained in this ON Agreement is held by court of`competen't jurisdiction to be 'nvalid or • unenforceable, the remainder of this Agreem;entshall continue in full for wand .effect unless the rights land obligations of the Parties are materially altered or abridged by such invalidation, voiding or unenforceability. 12:9 ; Attorneys' Fees In any action at law or in equity, , arbitration or;other proceeding arising in connection with 'this Agreement, the prevailing party shall recover reasonable attorneys' fees and other costs, including but.not limi to and: expert and .consultants' fees incurred in connection with such action in addition -to any other relief awarded, and such attorneys' fees and costs; shall be included in any judgment in such action. 12. 1 Counterparts This Agreement maybe, executed in multiple counterparts each of which�shall be original and all of which together shall constitute one: agreement. 12.11 Amendments This Agreement may be modified or amended., in whole or in part, only by an instrument l ument in writing, executed and acknoedged .by °the Parties, and recorded li n the Official Records of Sonoma County: 12.12 Captions:, Entire Agreement The section headings used' in this Agreement are for convenience only and are not intended to affectthe interpretation or construction of the provisions herein contained. This. Agreement, together with the Option Agreement and the documents referenced therein, contains the entire agreement of ;the Parties, with. respect to the subject matter hereof, and ,all prior negotiations., documents and discussions with respect thereto.are hereby superseded. SIGNATURES ON FOLLOWING PAGE. 33 • IN WITNESS WHEREOF, the Parties have-executed this_Agreement as of the date first written above. CITY OF PETALUMA By: Name: Title: APPROVED AS TO FORM: By: City Attorney ATTEST: By: City Clerk REGENCY REALTY GROUP, INC., a Florida corporation. By: Thomas K. Engbe.rg, Its: Senior Vice President is 9 3i STATE OF CALIFORNIA ) ss.. COUNTY OF SO:NOMA On before me, personally appeared . personally known. to me .(or proved to me that on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrumentand acknowledged to me that he /she /they. executed the same in his /her /their authorized capacity(ies'), *iand that,by his /her /their signature( §) 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. Notary Public 0 0 35 RECORDING,REOUESTED BY • AND WHEN RECORDED, RETURN`TO: City of Petaluma 11 English Street Petaluma, -CA 94952 Attn:. City Clerk EXEMP-T'FROM RECORDING FEES PER GOVERNMENT CODE § §6103, 27383 (SPACE ABOVE THIS LINE RESERVED' OR= RECORDERS USE) MEMORANDUM OF OPTION This Memorandum of Option (this "Memorandum'') dated as of 2004, is made by the City of Petaluma, a, municipal corporation ( "City ") and Regency Realty Group, Inc., a Florida .corporation. ( " Regency"). Pursuant to an Option Agreement dated as of , 2004 by and between City;and Regency (the "Option Agreement "), City has granted to Regency an option ( " Option ") to acq.uire,, on the, terms and conditions set forth in the Option Agreement, a nonexclusive ingress, .egress and access easement across real property located in the City of'Petalvima, Sonoma County, California and more particularly described in Exhibit A attached hereto and incorporated herein' (the "Easement Area "). • This Memorandum incorporates all of the terms and provisions of the Option Agreement as though fully, set forth herein. The term of the Option commences on, the date all conditions to the exercise of "the Option as set forth in they Option Agreement have been satisfied.* The Option terminates upon the earlier of (i) the occurrence of certain events as set forth in the Option Agreement or {ii} , 2011 (the seventh anniversary of`the Effective.Date of the Option Agreement). This Memorandum is solely for recording purposes and shall not be construed to alter, modify, amend or supplement the Option Agreement'. In the' event of any inconsistency between this Memorandum and the Option Agreement, the Option Agreement shall contro'I. This Memorandum and the Option. Agreement shall bind and inure to the benefit of the parties and their respective heirs, successors and assigns, subject.however to restrictions set forth in the Option Agreement regarding assignment. • —1— 3q IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date first written above. CITY'OF PETALUMA By: Name: Title: APPROVED:AS TO', FORM'. By: City Attorney ATTEST: .' By City Clerk REGENCY REALTY GROUP, INC.., a Florida corporation By: Thomas K. Engbe rg, Its: Senior Vice President —2— • L40 STATE OF CALIFORNIA ) • ss. COUNTY OF SONOMA On before me personally appeared personally known to me (or proved tq me that 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. • CE 4�) ResOlUtion No. 97 -31.7 N.C. S. of ri-ie city Of R-tilIL1111ZI. Cti_)Iilfornlil • 1 RESO APPROVING THE KEiNMW0RTH RE CREATIONINIASTER PLAIN 3 WHEREAS, the City Council, through the five year capital improverifent program has authorized 4 improvements to the athlet ic,fipelds atXenilworth Junior and 5 6 WHEREAS, the Recreation, Music And Parks Commission in plaphing for the improvements at Kenilworth 7 Junior High, evaluated the impacts of existing Recreation facilities in: the Kenilworth area including ' "Kenilworth Kenilworth 8 Park; 'Petaluma 'Public Library; ":Petaluma Swim Cente Petaluma Skate Parkp­'Kenilworth Junior High 9 gymnasium, Athletic fields Ahd,tennis courts; and 10 11 WMREAS, the Recreation Music and Park&Commission believes, that gpod includes. a recreation 12 master plan for the entir Kenilworth. corridor, displaying vasting and desired improvements which so heavily 13 impact the youth of our , community; ,and 14 15 WHEREAS, the Recreation; Music and Parks Commission sponsored a master plan committee comprised of representatives from the Commission, Parks Recreation staff„ Petaluma School District, little, league, soccer 7 and Pop Warner football; and 18 19 WHEREAS, a proposed master plan has been and p an developed approved by the Recreation, Music d Parks p 20 Commission, for consideration and adoption by the City Council and Petaluma 'School Board. 21 22 BE IT THEREFORE R that the City Council of the .City .of Petaluma do hereby approve the 23 Kenilworth Recreation Master Plan as recommended by 'the Recreation, r Music and Parks Commission, and 24 direct Commission. to pre e -S master' plan to the Pet:Altim �: School Board for their approval. .n(the 25 jc/nb/reskrcms/cjirn Under. the power',and sidthoAty conferred�, upon this; Council by the Charter of mid, City. REFERENCE: I -hereby certify the. fdrtgoin.g Resolution was Introduced and adopted by the Approved as to the City-of Petaluma . at a,(Regulax) (X2 ) meeting, .1orm day ___Njo�y.Prnht-r.__. an 19: by the 'foU6*ih g vote: — ---------- City Attorney AYES: Read, , Keller, Stompe, Torhatt, Maguire, Vice Mayor Hamiltdn; Mayor Hilligoss O S: None ABSENT No ne ATTEST: ....... ... .......................... ..... yr / .� l . / _ L� /��� (- "` ........... 1 it ty Clerk Mayor Col—UTU. 17 P MULTI- PURPOSEFIELD I • i PAVED PLAY AREA y • I ' BASKET ALL r Phase 1 4 ENNIS COURTS I HIG )� SCHOOL , _7 Gats 1p SOFTBALL / I,• r ----- - --t-T Phase 1A — ,- BASEBALL spectator seating. PARKING LOT • Parking for 44 • Freeway Duffer �-1• Tree and low sl J and "orovide ek E rm � xdv MULTI FIELC • - ® ® — L PATHWAYS: e Paved 8' vildei. . -. PARKING LOT l,BALL COURT - e Provider paideatrlan linki end service vehicle , acde-as. I ParkingJar 100 cars o Enhanced location for epe;clelors. e BalUtictivity Court 4'/ POOL X- .�-- = y ®�� Vim• �. .�. .f00 �r �T 4: • ��i � �1i111�ilrlll o t • l AGENDA ITEitiMS # 2 J KEY WORD Kenilw 5 6 DATE November 17 19. 7 7 -- 9 DEPARTiVfF.NT• 10 Parks and Recreation Department Jim Carr, Director, Steve Arago, Chair, Recreation, Music 1.1 and Parks Commission. 12� 13 REQUESTED COUNCIL A-C'TIONs 14 To approve the proposed master plan for the Kenilworth Recreation area. 15 16 RECOlVI<MENDATION 17 The Recreation, Music and Parks Commission recommends approval of the proposed master I8 plan. 19 20 $ACKGR(LU". 6 1 A long term goal of the Recreation, Music and'. Parks 'Comrriission is to remove the softball lights 2 from McNear Park and light afield at Aparacio field,on the Kenilworth Junior High School site. 23 The Recreation, Music and Parks Commission began, the planning process this last year to light 24 Aparicio field and move forward with the long desired project 25 26 Funding has been appropriated in the parks five year capital improvement plan but in prior years . 27 the Petaluma School District had the school site for sale, hence the project, was stalled. 28 Indications are that the Petaluma School District will keep the Kenilworth site and sometime 29 within the next ten years construct a third site. 30 3.1 With he initial- stages of the; master plan.process, the Commission -chose to identify and include 32 a11, the Recreation amenities, in the Kenilworth corridor. Included are Kenilworth Park, library, 33 swim center, skate park and Kenilworth Junior High with its gym, athletic, fields, tennis courts 34 and little league .:(Aparacip, Carter fields)'and soccer fields. 35 36 The master plan keys on theAparacio field and adjacent tennis couris.forthe first phase. 37 Proposed is the lighting of Aparicio field for softball,, soccer. and 'base ball . 3$ 39 The current footbah, soccer and baseball fields are marginal at-best. Proposed improvements 40 would reconfigure the fields, improve irrigation and grading and install a softball field. 41 A lon g plan plan ofhe Parks and Recreation De p artment is to reconfigure the existing tennis courts in relationship to the sun for daytime use and light them for night play. This would 44 provide a- lighted' tenriis facility for the public, with no adjacent homes to be impacted. Improved 45 courts would also provide a safe ;playing surface for school use. ' 1 q L t 46 A planning committee comprised of Recreation, Music and Parks. Commissioner's, • 47 representatives of the Petaluma School District, Little Leagues, Pop Warner football and. soccer 48 has been meeting for the last six months, developing conceptual plans and planning.for 49 implementation. 50 51 The�school district has expressed interest in providing funding for the renovation., Sports 52 organizations and the National Guard have been approached for services in -kind and financial 53 support. The response has been.quite favorable to the proposed plan and `implementation. 54 55 AL.TE NA 56. 1) Not approve: the proposed, master plan. 57• 2) Approve the rnasterplan forthe Kenilworth School site only.. 58 3) The City Council re- configure the master plan scope /area. 59 - 60 CONSEQL NOES .OF NOT ACTING: 61- No masterplan is approved, and ;the Parks and Recreation Department continues in its efforts to. 62, relocate softball from MtNear Park, 'to Aparaclio field. 63 64 ACTION'FOLLOWING AUTHORIZATION 65 Upon approval`. of the proposed° master plan, the ;Petaluma School Board will be notified: of the 66 proposed plan with a request for the school the :continued: support'in implementing the plan. • 67 68 jc /nb /agkrcrost/c:jim 0 So 10.6 ENILWOR'TH & FAIRGROUNDS SITE: RETAIL POSITIONING '& STRATEGIES Recommended Positi`onin Format 0 Regional Destination Power :Center: 0 Large Format &:.Baby Box Retail. ❑ Total of 400 to 420,000 sq. ft. Anchored '$ ' J °V 5 501,238 5.0% Zoning Direction • Home Electronics /Computers Personal 5ervire Services • Home Furnishings & Accessories H ►ghway Commercial • P'ad Restaurants 1.0 1 %1 R 'eta— il IVlix Development' Direction ° House &Home. Assemble and develop e Value & Priced Apparel as a Regional Large ' Appliances Format Retail Node to ° Toys, Hobbies 8r. Crafts introduce missing ° Sporting. Goods retailers of regional $1.66a.685 Y3 �. K - ey proport►on. Retail Development QRR2rturiity This site.'is at Petaluma's most important interchange of Washington Street with Highway 1.01. in conjunction with Washington Street, this interchange :forms the gateway' and approach armature for Downtown. Accordingly, to complement Downtown and s t i mulate 11 regional' attraction and cross - shopping within Petaluma, this is. "seen to be the best location for a "Regional Large Format- Retail Destination" within Petaluma. Site Stren the Weaknesses + Large linear exposure & frontage to Hwy 101, + Excellent access to Petaluma via Washington Street & to region via Hwy 101 interchange. + At geographic center :of Petaluma. + Gateway to Downtown Petaluma. + Washington Street is already established as City's retail corridor. - Potential traffic capacity issues along Washington Street. - Interchange of Washington Street & Hwy 101 may become congested. TABLE 10.6 PROJECTED SALES & TARGET CAPTURE RATES Personaleare ' J °V 5 501,238 5.0% 52.592,713'- 2,7 k S4 094 Personal 5ervire Services $980.061 7.0% 5 1.0 1 %1 $948948 .d64 1 Pnannacy - $1.563.199 30% . $854547 . t .0 51.614;603 1 GmcerylSpedalty FoW 52942 ?47 3 . 0 % $1.66a.685 Y3 �. ' 53;23ti68a j 20% $3,836.192 1.0 °, .$61776.933 i Apparel - - , ' - FooMBar 54404; 798 7.0% S8 743:812 5(7% 512548, 071 H EI chomcs 6 Computers $1527.091 $74 432:408 10 0% 51 997;525 51% $3 524,616 S 6t Home F n "ings d Accessories $7 702.x56 47.1% 516.209:131 20,7% 530,64 530,64t539 28_ Home Improvement 3 Garden st.nases 20.0% $10.506.061 11:3% 517;608577 13: �Housewares,ksmall APpllaoees 'S11,176,901 5773.295 1:'J% $1;827;840 2t Jevielery` d Accessories - 'St 488201 25 0% 572'963.567 1t n% $24: 851.019 J524,140,468 ,468 Malo Appliances Y2 765 57d 1Q0 % S1 362.778 3!6 % 52. Mull metlia BooksdMusic' - , 51,280.759 27 0•G $2 947;66,.70,444 113% 55 7 Specalry Retail $1,376.039 8.0% 51,266.036 - 3.1% 52,546,194 ..4,4 Sporting GGoods 52.366 792 6.7% $2,876.270 5 .% 0 - 54,252: 309 5'.3 Toys d H000ies 27.2% $1,821,962 8.1% $4 NJ55 .13.5 .$4.627.827_ 31:3% 52,926.372 Entertainment - - 8 Restaurant cafe. 5;5960332 6,691.261 10 0 % 5524 819 - 2. .. St 5;159 4:4 _ 8.0% 54,808.077 '2:2% .571.699,338 .0 TABLE; 10.7 - rurnaD ►e Ketad 5trategy Study, January 2004 Page 85 KENILWORTH & FAIRGROUNDS SITE: ,RETAIL POSITIONING & STRATEGIES (CONTINUED) 2003 TARGETS: Retail Target PTA 'Cai2ture, Target Target mix % Rate Capture Rate Sdles Convenience Retail' 10% 1.8% 1.3% $18 million Comparison Retail 81% 18.0% 8.3% $ million Re'ttdiicants A, Leisure 9-0/0 -.20 8 /6 2-.2% $13 million Total I OQ% 10.2% 4.5%_ $148,mi'1 Immediate. over :2 to 3 year horizon. ImPlementation, Layout & Streetscape Strategies 1. Goal Is. to create d "Regional Shopping Destination" that will draw from the Secondary Trade Area and -beyond. 2. Anchor with either an Electronics/Computers/Home Entertainment Equipment Megastore, or a Home Furnishings Megast I ore. 3. City could consolidate land I s and then off e - by tender to joint venture retail d ase d evelopers on a long term le' Ir ,. o ' r to sell or: long term lease 'major anchor parcel to an anchor: tenant attractive rate _s/values, to attract other higher paying retail ten ants/cleye lo pert to project. 4. Meg'p-store anchor retailers should be placed deep ?into south end of site, with exposlure, f rom Hwy 101, to induce circulation through project.. 5. Restaurants should be along Washington St. frontage. 6. Baby Boxes and smaller in-line retail tenants should have exposure from Hwy. 101, and placed between the megabox tenants and Washington St. 7. Although built as a larger format retail center, a contrived street through the parking area, with landscape and water features should be created to provide o .. sense of place" and ensure safe pedestrian movement throughout. Direct Econon Impacts., 148 million in trod . e area Annual Retail Sales or more. • $ 1,..5 million in S ' ales Tax Revenue to Cify/yedr or 1,038 Total New Direct.Empi oyees: Target sales performance of $367 psf/ - yr. Target Market A Inflow Segments . PTA, STA & Regional Residents & Tourists. . Value to.Moclerafe price 061'rits. 1 • FIGURE 10.9 CONVENIENCE RETAIL. 10% $18 M FL QL LLOCATION RESTAURANTS & LEISURE ` 9' % $13 M IPARISON RETAIL . FtETAIL 81% $118 M Highway Inte _YZ CPU. lu, 0 � , C, 4� Anchor -A if FAIRGROUNDS F.,IGURE 10,10 SITE OVE RVIEW laireLef Ten Profiles Sketchers • . Macaroni Grill Fry's Electronics v, Lineps N'."Things Old kci • 'IKEA McDonalds : Bed, Bath & Beyond Dress Barn . Houston's S , teakhouse Pier 1 Toys !R Us Golf . Galaxy The North Face, P atagonia N atagonia Best %Buy Circuit City Petaluma Leakage ,& Sustainable Retail Strategy Study, January 2004 e 86