Agmt 2005 Mercy Housing California (2)

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THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this "Agreement") is entered into effective as of September 6, 2005 ("Effective Date") by and between the Redevelopment Agency of the City of San Leandro ("Agency") and Mercy Housing California, a California non-profit public benefit corporation ("Developer"). Developer and Agency are hereinafter collectively referred to as the "Parties." WHEREAS, Agency owns or has contractual rights to purchase the property known as the Islander Motel located at 2398 (or 13664) E. 14th Street in the City of San Leandro (Alameda County Assessor's Parcel No. 077E-1525-003-04) (the "Property"); WHEREAS, Agency seeks to contract with an entity that will rehabilitate, operate and manage the property as affordable housing, while providing social services to the residents (the "Project"); WHEREAS, Agency solicited statements of qualification, evaluated responses, and selected Developer; WHEREAS, Agency and Developer executed a Letter Agreement dated June 6, 2005, pursuant to which Agency agreed to work exclusively with Developer to negotiate a Property Management Agreement; WHEREAS, the Parties have agreed upon the terms of a Property Management Agreement which will be executed concurrently with this Agreement; WHEREAS, the Agency's governing board directed staffto pursue negotiations with Developer regarding Developer's proposed acquisition and rehabilitation of the Property, and authorized Agency staff to prepare, and the Executive Director to sign, an agreement granting Developer exclusive rights to negotiate for the purpose of reaching agreement on a disposition and development agreement ("DDA") whose terms and conditions would govern conveyance of the Property to Developer for the Project; WHEREAS, the Project is exempt from California Environmental Quality Act ("CEQA") requirements pursuant to CEQA Guidelines Sections 15280 and 15301 because the Project involves the rehabilitation of an existing structure to provide affordable housing units to low-income households; NOW THEREFORE, in consideration ofthe mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. Good Faith Efforts to Negotiate. The Parties shall use their best efforts to successfully negotiate a DDA which shall describe the terms and conditions governing conveyance ofthe Property to Developer. The Parties shall diligently and in good faith pursue such negotiations. This Agreement does not impose a binding obligation on Agency to convey the Property to 768633 6 2