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THE CITY OF ° ° - "' CITY COUNCIL AGENDA REPORT 2 pLEASANTON® February 7, 2012 Assistant City Manager TITLE: APPROVAL OF AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT WITH MIDPEN HOUSING CORPORATION FOR THE KOTTINGER PLACE DEVELOPMENT PROJECT SUMMARY At your meeting of February 16, 2010, the City Council approved the Principles of Agreement for the next phase of researching the potential for redeveloping Kottinger Place and Pleasanton Gardens located on Kottinger Drive. In addition, the City Council amended the membership of the Task Force to include a City Council representative, Councilmember McGovern, and additional tenant and neighborhood representatives. The Task Force recently conducted a process for selecting a developer to coordinate continued study of project alternatives and potentially, to construct and manage site improvements. As a result of that effort, the Kottinger Task Force identified MidPen Housing Corporation (MidPen) as the most qualified firm to complete this work. An Exclusive Negotiating Rights Agreement (ENRA) is being recommended to set forth the scope of work for the project, to indicate the City's intent to negotiate exclusively with MidPen on matters concerning site planning and development, and to provide guidelines for a Disposition and Development Agreement (DDA) which would memorialize a development/improvement arrangement should the City proceed with significant site improvements. The ERNA's scope of work anticipates two tasks with the first involving predevelopment work and the second including project entitlement, construction, ownership, and property management. RECOMMENDATION 1. Approve the Exclusive Rights to Negotiate Agreement with MidPen Housing Corporation (Attachment A) 2. Allocate $130,851 to complete Task 1 work plus an additional $36,000 for project contingency and additional work, including a schematic of a preferred site option, from the City's Lower Income Housing Fund (271900) for potential project expenses. FINANCIAL STATEMENT Total cost for this work, which may be $166,851 with contingencies, will be paid either directly from the City to MidPen in the event the City decides not to proceed with Task 2 work involving significant site improvements by MidPen or will be incorporated as part of project financing and MidPen's overall developer fee if a new project is approved. The decision regarding proceeding with Task 2 will be made a later date following completion of Task 1.