In 2010, the City completed a series of roadway improvements at the I-80 interchange corner of North Texas Street and Manuel Campos Parkway. The improvements created a teardrop shaped property slightly under 5 acres in size (the “Teardrop” site). The Teardrop site is attractive for commercial freeway serving uses. The City maintained ownership of approximately 2.43 acres while Anderson owns the remaining 0.55 acres where their former gas station was located.

During the overall roadway improvement project, Anderson, as a partner in North Texas Solano, LLC. (“NTS”), relocated and built a new Chevron gas station further south on the Teardrop site, leaving the 2.98 vacant acres. NTS’s development included on-site driveway improvements to be shared by the Chevron and future development on the City and Anderson parcels. To facilitate the overall project, Anderson, NTS, and the City entered into agreements that:

1. Required Anderson, NTS, and the future buyer (the City’s successor) to reimburse the City for off-site improvements made to drainage, landscaping, sidewalks, and curb and gutters fronting the entire site; and

2. Required Anderson and the City’s successor to reimburse NTS for on-site joint-use driveway, drive aisle, and intersection improvements.

The parties agreed that all reimbursements would be delayed until such time as the City was able to secure a desired development for the corner of the Teardrop (on the City and Anderson parcels).

In February 2020, the City and Anderson, separately, entered into Purchase and Sale agreements with Hospitality Management, Inc. and APRR Management, LLC (collectively the “Developer”) for the development of a hotel and restaurant. The original agreements provided Developer 150 days as a due diligence period to review site documents and secure financing to commence the project.

Beginning in March 2020, the COVID-19 pandemic substantially impacted the US economy, with hospitality and restaurant businesses being some of the most negatively affected. As such, the Developer, during the initial due diligence period, was unable to obtain the financing necessary to close escrow and commence the project. Further, it is unlikely that any developer would be able to secure the financing to build the project as planned, as the financial markets for such projects are limited given the specific impacts of COVID-19.

Due to the likely long-term impact on the ability to finance the project, the Developer requested an extension of the due diligence period for two (2) years. In July 2020, the City, Anderson, and Developer agreed to an interim extension to their respective purchase and sale agreements to provide time to negotiate a long-term amendment to extend the Developer’s timeframe to commence the project.

Through negotiations since July, the parties have tentatively agreed to the Multi-Party Agreement and Amendment to Purchase and Sale Agreements (“Multi-Party Agreement”) that does the following:

• The City agrees to purchase Anderson’s parcel (APN 0167-110-040) for current appraised fair market value of $335,412, minus the $120,833.32 Anderson owed the City for off-site improvements ($99,862.25 improvements and $20,971.07 interest) - $214,578.68 total purchase price

• The City agrees to subsequently sell all three parcels (APNs: 0167-110-220; 0167-110-140; and 0167-110-040) to the Developer for fair market value, established not more than six (6) months prior to close of escrow

• The City agrees to pay NTS $151,199.15 owed for on-site improvements ($121,997.61 common area improvements and $29,201.54 non-common area improvements pursuant to the Reciprocal Easement Agreement, as amended)

• The Developer agrees to reimburse the City $350,901.64, at close of escrow, for all on-site and off-site improvement costs ($151,199.15 paid by City to NTS for on-site improvements and $199,702.49 due to City for off-site improvements)

• The City and Developer agree to amend the Purchase and Sale Agreement to provide Developer the option to extend for one year the ability to close escrow for a one-time price of $12,500, not applicable to the final closing cost for the property

• The Developer has an option to extend close of escrow a second year by both 1) placing an additional $25,000 on deposit, applicable to the final closing cost, and 2) by submitting for development review all documents required for full entitlement of the project by August 2021

The attached Resolution approves the Multi-Party Agreement and authorizes the City Manager to execute all documents necessary.