MEETING DATE:
DECEMBER 9, 2014
SUBJECT:
Title
RESOLUTION NO. 2014-8013 - SECOND AMENDED PURCHASE, ASSIGNMENT AND REPURCHASE AGREEMENT WITH URBAN VILLAGES SAN MARCOS
Body
Recommendation
Recommendation
ADOPT a resolution approving the Second Amended purchase, Assignment and Repurchase Agreement ("Amended Agreement") with Urban Villages San Marcos (UVSM) pertaining to properties within the University District Plan.
Body
Board or Commission Action
N/A
Relevant Council Strategic Theme
Planning for the Future
Economic Development
Relevant Department Goal
N/A
Introduction
In March of 2007, the City and UVSM entered into an agreement ("Agreement") whereby the City purchased approximately 20 acres of land, east of Twin Oaks Valley Road, which was previously optioned by UVSM. The City's purchase allowed UVSM to commit its limited capital to purchase other properties, furthering the mutual goal of land assemblage in the University District. The first amended Agreement allows UVSM to reacquire the same 20 acres at the City's purchase price with 5% plus simple interest accruing through the date the repurchase option was exercised or a pay as you go option with a 3% (paid from April 1, 2012 to March 1, 2013) and a 3.5% (paid from April 1, 2013 to December 31, 2014) simple interest rate on the purchase price of the land.
Due to the slow recovery from the intervening recession, UVSM has been unable to exercise the entire land purchase within the term (2.5 years) of the first amended purchase, assignment and repurchase agreement.
Discussion
Under the first amended purchase, assignment and repurchase agreement, UVSM purchased approximately 3.7 acres at a purchase price of $ 3,072,558. The City has also received monthly interest payments since April 1, 2012. Given the complex nature of development planned for the University District and the slow economic recovery, staff believes that continuation of the cooperative land assemblage effort initially started begun in 2007 is warranted. To that end, the attached document would amend the Original and First Agreement with the following particulars:
· Extends UVSM's repurchase option on the City's 14.5 remaining acres for five years, to December 31, 2019.
· Extends the 3.5% interest rate applicable to the $11,977,594 "principal" value of the 14.5 acres to for the balance of the term. Utilizing this option, UVSM can remit interest only payments monthly of $34,934.6.
· Clarifies Sections 14.2 (a & b) to exclude City property rented to UVSM from the downward adjustment of the repurchase price. Downward adjustments will only be triggered in the event rent or leasehold payments are made by a third party tenant of any City property.
This amendment will not affect or alter any other provisions contained in the Original or the First Amended Repurchase Agreement.
Fiscal Impact
Under this agreement the City would receive 3.5% interest on the remaining purchase price of $11,977,595, which equates to $34,934.65 a month.
Attachment(s)
Resolution No. 2014-
Second Amended Purchase Agreement, Assignment and Repurchase Agreement
2007 Purchase Agreement, Assignment and Repurchase Agreement
2012 First Amended Purchase Agreement, Assignment and Repurchase Agreement
Prepared and Submitted by: Lydia Romero, Deputy City Manager
Approved by: Jack Griffin, City Manager