HomeMy WebLinkAboutItem 02 Downtown Exclusive Negotiationg AgreementAGENDA ITEM SUMMARY Meeting Date: 9/25/2023
Meeting Type: Regular Meeting
Department: City Manager’s Office
Staff Contact: Allie Camp
S P R I N G F I E L D ECONOMIC Staff Phone No: 541-726-3688
DEVELOPMENT AGENCY Estimated Time: 10 Minutes
ITEM TITLE: DOWNTOWN EXCLUSIVE NEGOTIATING AGREEMENT
ACTION
REQUESTED:
Authorize the City Manager to negotiate and enter into an Exclusive Negotiating
Agreement with the Motors LLC for two lots in Downtown Springfield in the
vicinity of 7th and A Street.
ISSUE
STATEMENT:
The development potential of tax lots 17-03-35-42-02200 and 02000 can assist in
meeting the goals for downtown of communicating the viability of dense, market
rate housing and providing a market comparable for future, private projects.
ATTACHMENTS: 1. Draft Exclusive Negotiating Agreement
2. Vicinity Map
DISCUSSION/
FINANCIAL
IMPACT:
A representative of The Motors LLC approached the Springfield Economic
Development Agency (SEDA) with interest in selling two tax lots in downtown
Springfield. The two tax lots are tax lots 17-03-35-42-02200 and 17-03-35-42-
02000 and are directly adjacent to the Blue McKenzie project site (ATT 1). The
mechanism available to explore the properties more would be an Exclusive
Negotiating Agreement (ENA). Negotiations with Blue McKenzie Apartments,
LLC, to acquire the Blue McKenzie project site are still ongoing.
This additional land has the capability to improve a development project’s viability
by adding area for exploration of housing type and construction considerations,
parking, and the incorporation of the adjacent existing commercial storefront, the
former Buick dealership. Land banking multiple properties for a potential future
development allows for more certainty in terms of access and control of the land. It
also allows for more flexibility for how that land is programmed to both meet
community needs and be economically viable.
Both properties are zoned Mixed Use Commercial which allows for a wide range of
scheduled uses including housing. Tax lot 2200, the former Buick dealership site,
measures 0.31 acres. The dealership building is listed on the National Historic
Registry and measures approximately 10,000 square feet. Tax lot 2000 measures
0.51 acres and has an existing auxiliary building on the site which is approximately
1,000 square feet.
An ENA is a nonbinding agreement that establishes time to exclusively develop an
understanding of a property’s development potential. If directed to proceed with
negotiations, an ENA could include the following types of standard items: land use
analysis, title report, environmental analysis, and examination of potential
development programs. At the same time, staff see value in examining the multiple
potential development sites of SEDA and City-owned land in the downtown to best
understand the entire picture of phasing for development of future sites.
{00030209:1}
SPRINGFIELD CITY COUNCIL
DOWNTOWN DEVELOPMENT SITE
EXCLUSIVE NEGOTIATING AGREEMENT
____________ 2023
THIS EXCLUSIVE NEGOTIATING AGREEMENT (the "Agreement") is made and entered into as
of the last date of signature indicated below (the “Effective Date”), by and between the Springfield
Economic Development Agency, an urban renewal agency of the City of Springfield, Oregon
(“SEDA”), and The Motors, LLC (“OWNER”), and Oregon limited liability company registered with
the State of Oregon.
RECITALS
A. Owner owns real property at 7th and A Streets in Downtown Springfield on Map 17-03- 35-
42, Tax Lot Nos. 02000 and 02200 (“Property”).
B. SEDA is authorized to acquire property in the Downtown Urban Renewal Plan for
redevelopment consistent with the Downtown Urban Renewal Plan. This activity is
consistent with Section 600B of the plan, which authorizes SEDA to “provide below-market
interest rate and market rate loans and provide such other forms of financial assistance to
property owners and those desiring to redevelop, rehabilitation, and acquire property.”
C. On September 25, 2023, the SEDA Board authorized the City Manager to negotiate an
Exclusive Negotiation Agreement (the “Agreement”) with Owner for the redevelopment of
the Property. The intent of entering into this Agreement is to facilitate due diligence by SEDA
to investigate redevelopment opportunities related to the Property and to negotiate with the
Owner for SEDA’s future acquisition of the Property, which may include but is not limited to
negotiating a Purchase and Sale Agreement (“Binding Agreement”). During the due
diligence period covered under this Agreement, SEDA and Owner intend to mutually
cooperate to investigate and assess redevelopment opportunities for the Property, including
conceptual uses, site plans, building designs, and other elements as determined by the Parties.
D. This Agreement provides SEDA with the exclusive rights to negotiate with Owner for
conveyance and development of the Property, provides SEDA certain exclusive rights
regarding the site as defined in this Agreement, and confirms the basis upon which the
Parties are prepared to conduct due diligence and negotiate terms of a future Binding
Agreement. The Binding Agreement must be approved by the SEDA Board.
Now THEREFORE, the Parties agree as follows:
TERMS
1. Good Faith Exclusive Negotiations. SEDA and Owner agree and covenant to negotiate the
terms of the Binding Agreement and any intervening agreements in good faith. Owner
acknowledges that SEDA will expend time and expense in preparing its initial proposal,
conducting due diligence, and conferring with Owner. During the term hereof, Owner
agrees SEDA will have the exclusive right to negotiate with Owner for the rights to acquire
the Property and that Owner will not accept, solicit, pursue or entertain any other offers or
Attachment 1 Page 1 of 5
{00030209:1}
other indications of interest with respect to the Property for any development, sale or other
transaction during the term of this Agreement.
2. Duration. The Term of this Agreement shall be 90 days from the Effective Date. Owner
may, in its sole discretion, extend this Agreement for up to two additional 90-day renewal
terms upon the determination that SEDA has made significant progress in toward drafting a
Binding Agreement.
3. Termination. This Agreement shall automatically terminate upon execution and delivery of a
Binding Agreement which shall thereafter control the rights of the Parties with respect to the
Property. The Parties may terminate this Agreement by mutual agreement if latent conditions
are discovered on the Property or events occur that would, presently or with the passage of
time, prevent the entry into a Binding Agreement. Notwithstanding the above, (i) any party
may at their sole option, terminate this Agreement by notice in writing if another party makes
a material misrepresentation in the course hereof, otherwise fails to act in good faith, or if a
party becomes insolvent and (ii) SEDA may, in its sole discretion, terminate this Agreement
by notice in writing to Owner if at any time the SEDA Board elects not to pursue
development of the Property.
4. Due Diligence Assignments and Performance Timeline. The Due Diligence Assignments and
Performance Timeline attached as Exhibit A and incorporated into this Agreement establishes
the good faith expectations of the Parties during the term of the Exclusive Negotiating
Agreement. Unless a specific date is set forth, the times for performance in the Timeline
establish ranges and/or estimates and not strict deadlines.
5. Memorandum of Understanding. Tentative agreements on the terms identified by the Parties
during this ENA period and to be included in language of the Binding Agreement may be
memorialized in a written Memorandum of Understanding (“MOU”), or series of such
memoranda, during the Term of this Agreement. Any such MOUs will provide the
continuing framework for final negotiations and preparation of the Binding Agreement.
6. Binding Agreement and Preconditions to Closing.
a. Owner’s conveyance of the Property to SEDA may be formalized within the
subsequent Binding Agreement.
b. The Binding Agreement will incorporate terms and conditions necessary in the
Owner’s sole discretion to warrant the financial assistance.
7. Mutual Cooperation. The Parties will confer on a regular basis throughout the term of this
Agreement, particularly with respect to the drafting of a Binding Agreement and/or MOU.
8. Due Diligence. SEDA may conduct due diligence and inspections of the Property, including
such physical, legal, and engineering inspections, tests and investigations as it may deem
necessary or desirable. SEDA shall inform Owner prior to any on-site studies being undertaken.
Such studies and investigations may include, without limitation, zoning, land use,
environmental, title, design review, covenants, conditions and restrictions, financing, leasing
markets, project feasibility and related matters. The scope and cost of the due diligence and
inspections shall be the sole discretion and responsibility of SEDA, other than any due
diligence activities assigned to Owner in Exhibit A or as otherwise agreed upon by the parties
in an MOU or the Binding Agreement. In the event that SEDA elects not to proceed with the
Attachment 1 Page 2 of 5
{00030209:1}
Binding Agreement or development of the Property, SEDA shall provide to Owner copies of all
studies, including environmental and soils studies, surveys, title reports and similar information
obtained during the Due Diligence by SEDA (“studies”), provided that Owner reimburses
SEDA for SEDA’s actual cost of the studies. Owner may use the studies in any subsequent
negotiations with other developers or purchasers at Owner’s discretion.
9. Access. Owner shall provide SEDA full access to the Property during the term of this
Agreement for the purpose of conducting Due Diligence. The site will remain an active,
managed public parking lot during the duration of this Agreement. SEDA must provide
Owner three business days’ notice for work on the Property that will interfere or obstruct its
use as a public parking lot. SEDA shall repair or restore any damage caused by the entry of
SEDA or its agents upon or under the Property.
10. No Assignment. No party shall assign or transfer its interest in this Agreement.
11. Brokers. Owner and SEDA each represent and warrant to the other that no broker, finder or
other representative has acted on its behalf in connection with this Agreement. Owner and
SEDA agree to indemnify, defend and hold the other harmless from any claim or liability for
any fee, commission or other compensation with respect to this Agreement, the MOU,
Binding Agreement or other transactions contemplated hereby, asserted by any other broker,
finder or other representative claiming through the indemnifying party. Section 12 shall
survive termination of this Agreement.
12. Confidentiality. While striving to maintain transparency to the greatest extent practicable,
Owner and SEDA agree that some information submitted by Owner during the term hereof
may need to be submitted on the condition that SEDA keep said information confidential to
the full extent permitted by law. Prior to submitting such information, Owner shall indicate a
desire to maintain confidentiality, including the rationale for confidentiality. In this event,
SEDA will either agree not to disclose said confidential information, or inform Owner that
SEDA does not agree, in which case Owner may provide further clarification as to why Owner
believes it is necessary to maintain confidentiality. This nondisclosure agreement shall survive
termination of this Agreement but shall not apply to the extent any such information is publicly
available, has been disclosed by other parties or is required to be disclosed by the City of
Springfield Attorney’s Office under Oregon public records laws.
13. Governing Law. This Agreement shall be governed by the laws of the state of Oregon.
14. Time of the Essence. Time is of the essence of this Agreement.
15. Amendments. This Agreement may be amended only by the written agreement of the Parties
hereto.
16. Notices. All notices given under this Agreement must be in writing and either (i) personally
delivered, (ii) delivered by express mail, Federal Express or comparable courier service, or
(iii) delivered by certified mail, postage prepaid, return receipt requested, as follows:
To SEDA: City of Springfield
Allie Camp
225 Fifth Street
Attachment 1 Page 3 of 5
{00030209:1}
Springfield, Oregon 97477
To Owner: The Motors, LLC
________________
________________
________________
All notices shall be deemed effective upon receipt. Any party may from time to time change
its address for purposes of this Section by notice in writing to the other party.
17. Binding Effect. During the Term hereof and any extensions thereto, the Parties shall
negotiate in good faith to complete and execute the definitive MOU and Binding Agreement
upon terms and conditions consistent with this Agreement. No MOU or sale agreement or
other right, obligation or estate in land shall be created except by delivery of the definitive
Binding Agreement and all other related and necessary instruments, duly authorized by the
Springfield Economic Development Agency Board and all necessary Owner corporate action
and executed by authorized representatives of the Parties. If the MOU and/or Binding
Agreement is not executed and delivered prior to expiration of the Term and any extensions
thereto, or if SEDA elects, in its sole discretion, by notice in writing to Owner not to pursue
development of the Property, this Agreement shall terminate and be of no further force or
effect, except Sections 10, 12, 13, 14 and 16 hereof, which shall survive termination.
SEDA: OWNER:
Springfield Economic Development Agency The Motors, LLC
_______________________________ _______________________________
By: Allie Camp By: ____________________________
Date: __________________________ Date: __________________________
Attachment 1 Page 4 of 5
{00030209:1}
EXHIBIT A
Due Diligence Assignments
Due Diligence Assignments for SEDA include:
Order an appraisal
Order an updated Title Report
Update previous or order a new a Phase 1, and if needed, a Phase 2 environmental
Order a preliminary site survey
Conduct redevelopment opportunities analysis and feasibility
Identify potential property dispositioning process(es) for the Property
Negotiate with Blue McKenzie Apartments LLC regarding deed to adjacent site
Pursue amendment of the Downtown Urban Renewal Plan section 700C
Due Diligence Assignments for Owner include:
Provide copies to SEDA of all prior due diligence materials developed in the last five
years related to development or redevelopment of the Property
Provide SEDA with history registry information and classification
Provide copies to SEDA of building plans, previous property line surveys
Due Diligence Assignments for Owner and SEDA include:
Jointly draft and negotiate MOU Terms (as needed)
Jointly draft and negotiate Binding Agreement terms
Attachment 1 Page 5 of 5
Lane County GIS, Bureau of Land Management, State of Oregon, State of Oregon DOT, State of
Oregon GEO, Esri Canada, Esri, HERE, Garmin, INCREMENT P, USGS, EPA, USDA
±
Lane County, Oregon
0 260 520130
Feet
The information on this map was derived from digital databases on the Lane
County regional geographic information system. Care was taken in the creation
of this map, but is provided “as is”. Lane County cannot accept any responsibility
for errors, omissions or positional accuracy in the digital data or the underlying
records. Current plan designation, zoning, etc., for specific parcels should be
confirmed with the appropriate agency. There are no warranties, expressed
or implied, accompanying this product. However, notification of any errors will be appreciated.
Downtown ENA
Attachment 2 Page 1 of 1