CC Resolution No. 7972
RESOIlJ'I'ION NO. 7972
A :RFSOIlJ'I'ION OF THE CITY axJNCIL OF THE CITY OF aJPERI'INO
AUlHORIZING EXEaJTION OF AGREEMENT BEIWEE:N '!HE CITY OF
aJPERI'INO AND DEANZA RESIDENTIAL SUITES TO ESTABLISH
A PROCEIXJRE FOR DEI'ERMINJNG A FAIR AND ~
PRICE FOR PROPERl'Y IDCATED ÞIJ! '!HE NORI'HWEST CORNER
OF STEVENS CREEK B:IlJIEVARD AND Sl'ELLING :ROAD
WHEREAS, the city of CUpertino has expressed an interest in purchase
of certain ~ real property at the northwest corner of stevens Creek
Boulevard and Stelling Road; and
WHEREAS, the City and owner have not been able to agree on a purchase
price for said real property; and
WHEREAS, an agreement has been prepared to provide a procedure for
determining a fair and equitable price to be paid to the owner (Exhibit
A);
NaV, 'IHEREroRE, BE IT RESOLVED that the city Council of the city of
CUpertino hereby authorizes the Mayor and city Clerk to execute said
agreement on behalf of the city of CUpertino.
PASSED AND AOOPI'ED at a
City of CUpertino this 6th
following vote:
Vote Members of the city Council
regular meeting of the City Council of the
day of November , 1989, by the
AYES: Gatto, Johnson, Koppel, Rogers, Plungy
NOES: None
ABSENl': None
ABSTAIN: None
ATI'EST: APPROVED:
/s/ Dorothv Cornelius
City Clerk
/s/ John J. Plungy, Jr.
Mayor, city of CUpertino
AGREEMENT FOR THE ACQUISITION
OF REAL PROPERTY
THIS AGREEMENT dated r?c 1ðh<'1f
, 1989, is be-
tween the City of Cupertino, (hereinafter referred to as
"City") a general law city organized under the laws of
the State of California and DeAnza Residential Suites,
(hereinafter referred to as "Owner"), a limited partner-
ship organized and operating under the laws of the State
of California.
WHEREAS, Owner is the sole owner and title holder
to certain improved real property at the northwest cor-
ner of Stevens Creek Blvd. and Stelling Avenue in the
City of Cupertino more particularly described as
follows:
All of Parcel B, as shown upon that certain
Parcel Map filed for record in the office of
the Recorder of the County of Santa Clara,
State of California on September 3, 1975 in
Book 361 of Maps, at page 2. (APN 326-29-22)
WHEREAS, said improved real property is the cur-
rent site of the DeAnza Racquet Club, a private recre-
ation facility which includes buildings, tennis courts,
a swimming pool, paved parking lot, and various other
improvements; and
WHEREAS, City and Owner cannot agree as to a pur-
chase price for said real property, but desire by this
Agreement to provide a procedure for determining a fair
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and equitable price to be paid to Owner;
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
1. Acquisition of Real Property. Upon determi-
nation of the purchase price pursuant to the provisions
of this Agreement, and subject to paragraph 14 of this
Agreement regarding abandonment of eminent domain pro-
ceedings Owner shall sell and City shall purchase the
real property described hereinabove including all im-
provements and fixtures attached to the land free and
clear of all liens, encumbrances, taxes, assessments,
and leases whether recorded or unrecorded other than
exceptions 3, 4, and 5 listed on Schedule B of the
Preliminary Report dated April 14, 1989 issued by Valley
Title Company under Escrow No. 198065 - B.
City shall also pay all costs of escrow and
recording fees incurred in this transaction, including
documentary stamp tax, and title insurance policy
expenses. Escrow costs and recording fees shall not,
however, include reconveyance fees, trustee's fees,
forwarding fees, or penalty of any full reconveyance of
deed of trust or full release of mortgage paid.
2. Proration of Taxes. In the event City ac-
quires fee title to said real property under the terms
of this Agreement, taxes shall be prorated in accordance
with Revenue and Taxation Code Section 5082 as of the
recordation date of the deed or order of condemnation,
or taking of physical possession, as the case may be.
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Further, Owner authorizes City to deduct and
pay from the purchase price any amount necessary to sat-
isfy any delinquent taxes due, together with penalties
and interest on them, and any delinquent or nondelin-
quent assessments or bonds, which are to be cleared from
the title to said property.
4. Payment of Deed of Trust or Mortgage. all
money payable under this Agreement, up to and including
the total amount of unpaid principal and interest on any
note secured by a deed of trust or mortgage, and all
amounts due and payable in accordance with the terms and
conditions of the deed of trust or mortgage shall on
demand be made payable to the beneficiary or mortgagee.
The beneficiary or mortgagee shall furnish Owner with
good and sufficient receipt showing the money credited
against the indebtedness secured by the deed of trust or
mortgage.
5. Lease Warranty. Prior to recordation of a
deed or order of condemnation, as the case may be, Owner
shall warrant that there are no oral or written leases
on all or a portion of said real property exceeding the
period of one month, and Owner further agrees to hold
City harmless and reimburse City for any and all of its
losses and expenses occasioned by reason of any lease of
said property held by any tenant of Owner for a period
exceeding one month. City shall promptly tender the
defense of any such claim, and Owner shall assume the
defense of such claim.
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6. Relocation Costs. In the event City acquires
fee title to said real property under the terms of this
Agreement, whether by settlement or by judgment, Owner
shall hold City harmless from any moving or relocation
expenses incurred by Owner or by any tenant of Owner
under the applicable provisions of the California Re-
location Assistance Act. Should any person make claim
for any such moving or relocation assistance, then City
shall promptly tender the defense of this claim and
Owner shall assume the defense of such claim.
7. Possession. Unless otherwise agreed in writ-
ing, or as provided in § CCP 1255.410 et seq. related to
possession prior to judgment, City shall take possession
of said real property upon recordation of the deed or
order of condemnation, as the case may be, which conveys
title to said real property. Owner shall be entitled to
all rents from said real property up to and including
the date of transfer of title. All rents collected by
Owner applicable to any period after date of transfer
shall be paid to City. Either party to this Agreement
receiving rents to which the other party is entitled
shall forthwith pay that amount to the other as is
necessary to comply with the provisions of this
paragraph. In no event, however, shall City be
responsible for collection of rents applicable to the
period up to and including the date of transfer of
title.
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8. Condition of the Premises. The City shall
have the right upon reasonable notice to enter and
inspect the real property, and may perform such
non-destructive tests as it deems warranted. City shall
defend Owner and hold Owner harmless from any claims or
expenses resulting from such inspections, including but
not limited to, any mechanic's liens. Owner makes no
warranties as to the condition of the property, and City
makes the purchase in reliance on its own inspection and
the inspection of its consultants. The sale of the
property is strictly "as is", and the purchase price
shall reflect and take into account the physical
condition of the property. City is acquiring the
property subject to any and all defects, whether they be
latent or patent. However, the Owner shall, between the
time of execution of this Agreement and the time
physical possession of the City is taken provide
reasonable maintenance on the property and shall not
commit any waste thereon.
9. Escrow. In the event that a purchase price
for said property is established under the provisions of
this Agreement, the transaction will be handled through
an escrow selected by the parties which shall either be
Santa Clara Land Title or Valley Title Company.
10. Determination of Purchase Price. Upon execu-
tion of this Agreement, the parties shall attempt in
good faith to negotiate a purchase price for said real
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property. If the parties are unable agree on said
price, either party, upon written notice to the other,
at any time beyond forty-five (45) days from the date
this Agreement is executed may suspend settlement
negotiations.
11. Eminent Domain. Upon the giving of said
notice described in paragraph 10 of this Agreement by
either party to the other, the City shall, within sixty
(60) days, commence the eminent domain process to
acquire said real property. At any time during said
process, including actual litigation, the parties may
settle the issue of the purchase price for said real
property by mutual written agreement.
12. Eminent Domain Award. In the event that
parties are unable to resolve their differences as to
the purchase price and the issue of just compensation is
determined by a finder of fact whether jury, court or
arbitrator and an award is made, Owner shall transfer
title to said real property to City upon the following
basis:
a) if the award is $7,000,000 or less, the
City may purchase said real property for the amount of
the award by payment of cash within 60 days from the
date the award becomes final.
b) if the award is greater than $7,000,000,
then the City may purchase said real property for the
amount of the award in three equal annual installments,
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one-third due within 60 days of the award becoming
final, one-third twelve (12) months later, and the final
third twenty-four (24) months after the first payment is
made. Interest at the rate of 4.75% per annum shall
accrue on the unpaid balance. In order to secure pay-
ment of said balance, the City and Owner shall agree
upon a process which will allow for the City to pur-
chase legally said property over the period of two years.
Notwithstanding the award, Owner may elect to receive
the full cash price in lieu of installments by agreeing
to transfer title to said real property for a total pur-
chase price of $7,000,000.
c) notwithstanding paragraph 12(b) of this
Agreement, if the award is in excess of $8,000,000, City
may acquire title to said property for a total payment
of the award less a credit equal to an amount that the
award exceeds $8,000,000, provided, however, that said
credit shall not exceed $500,000.00.
By way of example, if the award is
$7,000,000 the City may purchase said real property for
$7,000,000 in cash payable 60 days from the date the
award becomes final. If the award is $7,500,000, the
City may purchase said property for $7,500,000 payable
in three equal annual installments subject to Owner's
right to receive $7,000,000 in cash in lieu of payments.
If the award is $8,100,000, City may purchase said
property for $8,000,000 in three equal annual install-
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ments. If the award is $8,900,000, City may purchase
said property for $8,400,000 in three equal annual in-
stallments.
As used in this Agreement, the term "award"
means all amounts due and owing to Owner or his tenants
as a result of an action brought by the City in eminent
domain to acquire said property and all improvements
thereon including, but not limited to, value of the
take, severance damages, damages for wrongful pre-
condemnation activities, moving and relocation expenses,
loss of goodwill, interest, costs and attorney's fees,
if any. All terms of this Agreement shall beincor-
porated into, and become part of, any judgment of con-
demnation rendered with respect to said real property.
13. Waiver of Attorney's Fees and Costs. In con-
sideration of the other provisions of this Agreement,
Owner hereby agrees that he shall not seek, nor recover
litigation expenses, as defined in § 1235.140 of the
Code of Civil Procedure which could be awarded in any
eminent domain proceeding brought by the City to acquire
said property under the terms of this Agreement includ-
ing, but not limited to, litigation expenses awarded by
the Court upon a finding that City's offer was unreason-
able (§ 1250.410 CCP), or litigation costs and damages
awarded based upon abandonment or dismissal of the
action by City (§ 1268.610 CCP, § 1235.140 CCP).
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Notwithstanding the above, Owner shall be entitled to
his ordinary costs as provided in § 1268.710 CCP.
14. Abandonment of Proceedings. Provided that
City does not take physical possession of said real
property, nothing in this Agreement precludes City's
right to abandon any eminent domain proceeding to
acquire said real property at any time within 30 days
after any award or judgment becomes final as prescribed
in § 1268.510 California Code of Civil Procedure. In
the event of such abandonment, this Agreement shall be
rescinded and neither party shall have any obligation to
purchase or sell said real property. In the event of
such abandonment, Owner shall not seek nor recover any
damages, including damages for loss of use or loss of
opportunity proximately caused to Owner by such abandon-
ment nor shall he seek or recover any litigation ex-
penses which would otherwise be awarded pursuant to CCP
Sections 1235.140 or 1268.610. Nothing in the Agreement
precludes the Owner from objecting to the abandonment
for the reasons provided in § CCP 1268.510(b).
15. Consideration of Alternative Uses Subsequent
to Abandonment. Notwithstanding any provision to the
contrary contained in paragraph 14 of this Agreement,
upon abandonment by City of any eminent domain proceed-
ing to acquire said real property, City shall hold
general plan hearings to consider alternative uses for
the property. This paragraph shall not be construed as
9
an admission by City that the present land use designa-
tion or zoning for said real property is unreasonable or
that said designation or zoning constitutes a taking of
property without just compensation.
16. Non-admissability of this Agreement. Neither
this Agreement, nor any portion thereof, shall be admiss-
ible in any direct eminent domain action brought by City
nor shall it be admitted into evidence in any judicial
proceedings, including arbitration, for the purpose of
establishing the value of said real property.
17. Integration; Modification. This Agreement
constitutes the entire Agreement of the parties. All
oral or written promises or agreements regarding the
purchase of the subject property made prior to, or at
the same time as, the execution of this Agreement are
void and have no further force or effect. Any
subsequent modification of this Agreement must be in
writing and executed by the parties.
18. Binding on Successors - Covenant Running With
the Land. This Agreement is binding upon the parties,
their heirs, successors, successors in interest, and
assigns. The parties also agree that this Agreement
constitutes a covenant running with the subject property
and may be recorded by either party at that party's
option.
19. Effect of This Agreement Upon Powers of the
City. Nothing in this Agreement shall require City to
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take any action which it cannot legally take nor shall
it obligate the City to take any particular action which
requires an evidentiary hearing before such action is
taken.
20'. Notice. For purpose of giving any notice re-
qui red under this Agreement, either party may personally
deliver said notice to the other or deposit said notice
with the United States Post Office, postage prepaid to
the following addresses:
a) For City
Donald Brown
City Manager
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
b) For Owner
DeAnza Residential Suites
c/o John vidovich
21. Authority. The signatories to this Agreement
warrant that each has authority to execute this
Agreement and to bind the parties to its terms.
22. Sale Under Threat of Condemnation. Any sale
of the property to City, other than as the result of a
final judgment in an eminent domain proceeding, shall be
deemed to be a sale under threat of condemnation.
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IN WITNESS WHEREOF, the undersigned have executed
-/" Ode) !,,<? r
this Agreement this L-b day of41989.
DEANZA RESIDENTIAL SUITES
By
CITY OF CUPERTINO
By
John Plungy, Mayor
City Clerk
, ;/¿;~ / ;!LH-
CHARLES T. KILIAN
City Attorney
STATE OF CALIFORNIA )
COUNTY OF SANTA CLARA)SS
On this 26th day of October, 1989, before me, the
undersigned Notary Public, personally appeared John Vidovich,
personally known to me or proved to me on the basis of satis-
factory evidence, to be the person who executed the within
instrument on behalf of the partnership, and acknowledged
to me that the partnership executed it.
WITNESS my hand and official seal.
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