25C - AGMT - NEGOTIATING AGMT YMCA

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YMCA Agreement — Renovation /Reuse September 16, 2014 Page 2 Management directed staff to conduct a lead and asbestos survey prior to any further work being done on the building. National Econ, the hazardous material consultant, had the following recommendations: • First responders entering the building wear protective gear and be fit tested. • Due to asbestos putty on windows, change scope of work to remove the requirement for the replacement of broken glass on the 2nd and 3rd floors and place plywood over the broken windows instead. • Incorporate a lead and asbestos abatement plan pursuant to state laws in the St. Joseph/Taller San Jose scope of work. Ultimately the agreement with Orange County Mailboxes expired on September 1, 2014, without any funds expended. As a matter of urgency, authorization to enter into a new agreement with Orange County Mailboxes and Construction is now requested with a similar scope of work intended to improve the security and appearance of the building in an amount not to exceed $44,000. These interim measures to address deferred maintenance represent a good start; however, planning efforts to encourage the reuse of the YMCA building remain. Over the years, the City has on numerous occasions, considered proposals to renovate this historic building, but none were financially feasible. In late 2013, the City Council approved a Request for Qualifications and potential reuses identified by the Development and Transportation City Council Committee. Following an extensive review of all submissions by the Selection Committee, the Committee recommended that the St. Josephs/Taller San Jose team be offered the Exclusive Right to Negotiate for the following reasons: • The City Council has a stated objective to implement a strong economic development program in the Downtown which provides a linkage between the Civic Center and related professional office and nonprofit organizations. • The St. Joseph/Taller San Jose team proposes to share operating revenues and expenses, lending strength to their financial proposal while ensuring the long term viability of the project. • The St. Joseph/Taller San Jose team would be the end users of the building; thereby providing a more secure venue than a speculative commercial development. • The St. Joseph/Taller San Jose team is proposing to complete the project within 3 years. Based on these factors, the City Council authorized the City Manager to negotiate an Exclusive Right to Negotiate (Exhibit 1) and a Reimbursement Agreement (Exhibit 2) with the St. Joseph Health Care /Taller San Jose Team. The purpose of the Exclusive Negotiating Agreement is to lay out the parameters, deal points and the performance milestones of the future Development Agreement. The term of the Exclusive Right to Negotiate is for 180 days. These deal points are contained within the attached exhibit and are summarized as follows: 25C -2