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APPROVAL OF EXCLUSIVE NEGOTIATING RIGHTS AGREEMENTS WITH STOCKTONIANS TAKING ACTION TO NEUTRALIZE DRUGS AND 1501 S. AIRPORT WAY, LLC FOR RETAIL DEVELOPMENT OF INFILL PROPERTIES IN SOUTH STOCKTON
recommended action
RECOMMENDATION
It is recommended the City Council adopt two resolutions:
Resolution 1
Approving a 180-day Exclusive Negotiating Rights Agreement between the City of Stockton and Stocktonians Taking Action to Neutralize Drugs (STAND) for the proposed development of a mixed-use retail center located at 2222 & 2244 South Airport Way (South Airport Way & Eighth Street) (Attachment A - Vicinity Map Project 1).
Resolution 2
Approving a 180-day Exclusive Negotiating Rights Agreement between the City of Stockton and 1501 S. Airport Way, LLC for the proposed development of a retail center located at 1670 South Union Street & 1501 South Airport Way (South Airport Way & Second Street - Attachment B - Vicinity Map Project 2).
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Summary
In an effort to bring revitalization opportunities to South Stockton, City staff has begun implementing the disposition of former-Redevelopment properties, as detailed in the 2015 City of Stockton Long Range Property Management Plan (LRPMP). Due to the obligations set forth in the LRPMP, a formal Request For Interest (RFI) process was required on these specific sites. Through the RFI process, STAND and 1501 S. Airport Way, LLC were selected for recommendation by the review committee to enter into an Exclusive Negotiating Rights Agreement (ENRA) on the aforementioned sites with the purpose of bringing additional retail opportunities and development to the neighborhood.
On the “Airport Way & Eighth Street” site (located at 2222 and 2224 South Airport Way;
APNs 169-163-01 and 169-151-01) STAND is proposing to construct a mixed-use project that may incorporate elements of commercial/retail space, affordable housing, and/or open community space. The concept will include a community anchor to be called the South Stockton Public Market, featuring indoor and outdoor kiosks to be used for local merchants and/or startup food and specialty product small businesses.
On the “Airport Way & Second Street” site (located at 1670 South Union Street and 1501 South Airport Way; APNs 169-030-13 and 169-020-11) 1501 S. Airport Way, LLC is proposing to construct a commercial/retail shopping center consisting of approximately 20,000-40,000 s.f. of available space. The proposed project would include additional retailers that are not currently available in the immediate neighborhood. The general managers of 1501 S. Airport Way, LLC own the existing Rancho San Miguel property across the street from the proposed site.
The proposed ENRAs (attached as Exhibit 1 to the resolutions) allow both parties to determine the feasibility of the project with a duration of 180 days from the time of Council approval, and provides for an additional 180-day extension, assuming there is significant progress on the feasibility of the project.
DISCUSSION
Background
Through the dissolution of Redevelopment in 2012, the former Redevelopment Agency was required to implement a Long Range Property Management Plan, with a detailed description of each property that is owned, and the plan to develop the existing properties for disposition or how they would be held for future development. The plan was approved by the State of California in December 2015. The first two initial properties for disposition include the two aforementioned sites which are the subject of the ENRAs.
In addition, the 2015 Council adopted City of Stockton Economic Development Strategic Plan calls out a Neighborhood Revitalization Program as part of the implementation plan. It focuses on utilizing existing City resources (e.g., publicly-owned development sites) as one way to bring much needed revitalization to the South Stockton neighborhood.
Present Situation
An Exclusive Negotiating Rights Agreement allows staff to negotiate specific terms associated with a Purchase Option and/or Sales Agreement. During the term of the ENRA, the City is required to refrain from consideration of proposals from other developers for the subject parcels and agrees not to solicit proposals from others regarding acquisition and/or development of the subject properties.
The ENRAs will allow the two proposed developers, STAND and 1501 S. Airport Way, LLC, the given timeframe for conducting due diligence and for the City and developers to further negotiate a market rate Purchase Option and/or Sales Agreement.
It is important to note that the ENRAs merely prevent the City from negotiating the sale of the subject properties with anyone else and is not a binding agreement to actually sell the property. It allows time for the City and developers to conduct their due diligence and will expire one hundred and eighty (180) days from the date of execution absent any mutually agreed to extensions. Staff will return to the City Council for consideration of a Purchase Option and/or Sales Agreement should negotiations prove successful.
FINANCIAL SUMMARY
There is no fiscal impact associated with the execution of the Exclusive Negotiating Rights Agreement with STAND or 1501 S. Airport Way, LLC.
Attachment A - Vicinity Map Project 1
Attachment B - Vicinity Map Project 2