City Council Regular Meeting
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It is recommended that the City Council authorize the City Manager to negotiate and execute the First Amendment to the Agreement of Purchase and Sale and Joint Escrow Instructions (dated August 1, 2019) and the First Amendment to the Right of Access and Entry Agreement (dated July 16, 2019) with Singpoli BD Capital Group, LLC (Singpoli) through October 31, 2020 for the development of the former BKK Landfill (APN Nos: 8735-001-919, 8735-001-920, 8735-001-921, 8735-001-931, 8735-002-906, 8735-002-909, and 8735-002-910; and Lease of APN 8735-022-018).
The City of West Covina and Singpoli BD Capital Group executed the Agreement of Purchase and Sale and Joint Escrow Instructions (Purchase Agreement) on August 1, 2019 for the sale and lease of approximately 190-acres of property. The City and Singpoli also executed a Right of Access and Entry Agreement (Access Agreement) on July 16, 2019.
Pursuant to the Purchase Agreement, Singpoli has a 365-day expiration of the General Contingency Period. At expiration of the General Contingency Period, Singpoli is required to provide the City with notification of satisfaction with the purchase of the property.
In order to close escrow, both Singpoli and the City need to comply with conditions of closing pursuant to Section 7 of the Purchase Agreement. Buyer conditions include: Inspection of the Property, Review of Documents and Materials, and Satisfaction of the property. Seller conditions include: entering into a Development Agreement, completion of California Environmental Quality Act (CEQA), and entering into a Sublicense Agreement.
Since the execution of the Purchase Agreement, Singpoli has conducted various surveys and studies to determine project feasibility as part of the General Contingency Period. Singpoli is committed to proceeding with the purchase of the property, however, Singpoli is requesting an extension of the General Contingency Period. They have indicated that the request is due to COVID-19 and economic uncertainty that has been created.
Singpoli is requesting an extension of their General Contingency Period to October 31, 2020, and has agreed to proceed to close escrow no later than October 31, 2020. In exchange for the extension, Singpoli has offered to have the deposit of $405,000 become nonrefundable, waive the Seller’s obligations to close escrow (buying the property “where is/as-is”).
Currently, the General Contingency Period expires on August 8, 2020, which is 365 days from when escrow was opened. If the extension is not granted, Singpoli will need to provide the City with notice of approval of condition of title by August 8, 2020 or the deposit shall be returned to Singpoli.
In addition to Singpoli’s request for extension, the City is seeking amendments the Purchase Agreement to delete its conditions to closing pursuant to Section 7(b) and to insert language pertaining to Department of Toxic Substances Control (DTSC) process for transfer of title. Specifically, DTSC has requested that the Purchase Agreement incorporate certain environmental use restrictions and certain immunities granted to the City.
The City is also seeking amendments to the Right of Entry and Access Agreement. Many of these amendments are made at the request of DTSC, which clarify that DTSC is party to the indemnification and insurance. The amendment also updates the term of the Entry and Access Agreement to coincide with the term of the Purchase Agreement.
Staff is recommending that the City Council authorize the City Manager to negotiate and execute the First Amendment to the Purchase and Sale Agreement and Joint Escrow Instructions, and the First Amendment to the Right of Entry and Access Agreement as outlined above.
The City Attorneys' Office has reviewed and approved the Amendments as to form.
The City Council has the following options:
Approve staff’s recommendation;
Approve different terms for extension; or
Provide alternative direction.
Attachment No. 1 - First Amendment to Agreement of Purchase and Exhibits
Attachment No. 2 - First Amendment to Right of Entry and Access Agreement
CITY COUNCIL GOALS & OBJECTIVES:
Achieve Fiscal Sustainability and Financial Stability
Enhance the City Image and Effectiveness
Engage in Proactive Economic Development
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