Agenda Item # 11.1 - Late Memorandum
CITY OF GILROY CITY CLERK’S OFFICE
MEMORANDUM
Thai Nam Pham, CMC, CPMC | City Clerk
7351 Rosanna Street | Gilroy, CA 95020-6197
Email: thai.pham@cityofgilroy.org
Phone: (408) 846-0204 | www.cityofgilroy.org
September 12, 2022
To: Honorable Mayor and Council Members
Re: Agenda Item # 11.1 - Approval of an Exclusive Negotiating Agreement by
and between Select Contracts and the City of Gilroy in Order to Assess
Opportunities for Development of the 536 Acres of Hillside Property at
Gilroy Gardens (Proposed to be Renamed the Recreation Gateway Area)
Dear Honorable Mayor and Council Members:
Attached, please find Exclusive Negotiating Agreement by and between Selects
Contracts and City of Gilroy that was not attached at last Friday’s publication.
Respectfully Submitted
Thai Nam Pham, CMC, CPMC
City Clerk
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EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT
This Exclusive Negotiating Rights Agreement ("ENA") is entered into as of this ________________
day of ___________, 2021, by and between the City of Gilroy, a California municipal
corporation ("City"), and Select Contracts Holdings Inc, a British Columbia
Corporation (“SC” or “Select Contracts” ). The City and Select Contracts shall collectively be
referred to herein as the "Parties" and individually as a "Party."
RECITALS
A. The City is the owner of certain real property located at
_________________________, in the City of Gilroy, County of Santa Clara, State of
California, and commonly known as the "_____________."
B. The City is considering developing ________________________
("Project") on ___________________________ shown on Exhibit A attached hereto
("Project Site").
C. Select Contracts, currently operates as a developer of adventure parks, bike
parks and surf parks on a global basis and is interested in developing an adventure park on
the said lands.
D. The purpose of this ENA is to establish procedures and standards for the
negotiation by the City and Select Contracts to explore the feasibility of having City and
Select Contracts develop the Project. As more fully set forth in Section 3.1, Select
Contracts acknowledges and agrees that this Agreement in itself does not grant Select
Contracts the right to operate the Project, nor does it obligate the City to any activities or
costs to develop the Project Site or the Project.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual
covenants and conditions contained herein and for other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the City and Select Contracts
mutually agree as follows:
ARTICLE 1
EXCLUSIVE NEGOTIATIONS RIGHT
Section 1.1 Negotiations. Subject to the terms and conditions contained herein, the City
hereby grants to Select Contracts the exclusive right to negotiate with the City concerning
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the possible development of the Project. The goal of the negotiations is to develop a
framework for an agreement (the “Agreement”) between the parties, which may be a lease,
operating agreement, or some other form of agreement. No standard of conduct shall be
implied with respect to the negotiation of the terms and conditions of the Agreement referred
to herein.
Section 1.2 Negotiating Period. The negotiating period ("Negotiating Period") under this
ENA shall be three hundred sixty-five (365) days, commencing on the date first above
written, unless the Parties extend the Negotiating Period by written amendment to this
ENA. If an Agreement has not been executed by the City and Select Contracts by the
expiration of the Negotiating Period, then this ENA shall terminate and neither Party shall
have any further rights or obligations under this Agreement except as set forth in Section
3.5 below. If an Agreement is executed by the City and Select Contracts then, upon such
execution, this ENA shall terminate, and all rights and obligations of the Parties shall be as
set forth in the executed Agreement.
Section 1.3 Exclusive Negotiations. During the Negotiating Period, Select Contracts
(and/or their affiliates) shall not negotiate with any entity, other than the City, regarding
the development and/or operation of any project that would be located in Santa Clara
County and be similar to the Project contemplated by this ENA, or solicit or entertain bids
or proposals in connection with such a project, and the City shall not negotiate with any
entity, other than Select Contracts, regarding the operation of the Project, or solicit or
entertain bids or proposals to do so.
Section 1.4 Costs and Expenses. Each Party acknowledges that it may expend substantial
resources in the negotiation of the Agreement and the performance of the tasks in this ENA.
Each Party shall be responsible for its own costs and expenses in connection with any
activities and negotiations undertaken in connection with this ENA, and the performance of
each Party's obligations under this ENA, subject to any provisions in an executed Agreement
that provide for reimbursement of such costs.
Section 1.5 Identification of a Select Contracts Representative. The Select Contracts
representatives to negotiate the Agreement with the City are: Chris Sutton, CEO and Adrian
Paul, COO.
ARTICLE 2
NEGOTIATION TASKS
Section 2.1 Overview. To facilitate negotiation of the Agreement, the Parties shall use
reasonable efforts to accomplish the tasks set forth in this Article 2 in a timeframe that
will support negotiation and execution of a mutually acceptable Agreement prior to the
expiration of the Negotiating Period. The Parties acknowledge that one year may not be
sufficient time to arrive at such an Agreement, due to delays caused by compliance with the
California Environmental Quality Act or other factors. Within the first sixty (60) days after
the mutual execution of this ENA, the Parties will endeavor to agree upon a work plan for
tasks to be accomplished.
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Section 2.2 Scope of Project. The Parties shall endeavor to agree on a scope of operational
obligations specifying in sufficient detail each component of the operations necessary to
operate the Project in a first-class manner.
Section 2.3 Schedule of Performance. The Parties shall endeavor to agree on a detailed
schedule of performance for the Project to be included in the Agreement.
Section 2.4 Financing and Cost of Project Operations. The parties shall endeavor to agree
on a financial proforma for the operation of the Project containing, among other matters,
a detailed budget setting forth the costs of the tasks to be undertaken by Select Contracts.
Section 2.5 Organizational Documents. Select Contracts will provide the City with the
operating entity's organizational documents, as well as an organizational chart outlining
key personnel roles and responsibilities.
ARTICLE 3.
GENERAL PROVISIONS
Section 3.1 Limitation on Effect of Agreement This ENA shall not obligate either the City
or Select Contracts to enter into an Agreement or to enter into any particular Agreement.
By execution of this Agreement, the City is not committing itself to or agreeing to
undertake any development activities with respect to any property. Execution of this
Agreement by the City is merely an agreement to conduct a period of exclusive negotiations
in accordance with the terms hereof, reserving for subsequent City and City Council action
the final discretion and approval regarding the execution of an Agreement and all
proceedings and decisions in connection therewith. The City may decide to approve or
disapprove of any Agreement and to proceed or not proceed with the Project in its sole and
absolute discretion. Any Agreement resulting from negotiations pursuant to this Agreement
shall become effective only if and after such Agreement has been considered and approved
by the City following applicable environmental clearance as required by the California
Environmental Quality Act.
Section 3.2 Notices. Formal notices, demands and communications between the City and
Select Contracts shall be sufficiently given if, and shall not be deemed given unless,
dispatched by certified mail, postage prepaid, return receipt requested, sent by express
delivery or overnight courier service, to the office of the parties shown as follows, or such
other address as the parties may designate in writing from time to time:
City:
City of Gilroy
7351 Rosanna Street
Gilroy, CA 95020
Attention: City Administrator
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With a copy to:
Select Contracts:
8988A Pemberton Meadows Road
Pemberton, British Columbia
Canada, V0N 2L2
Such written notices, demands, and communications shall be effective on the date shown
on the delivery receipt as the date delivered or the date on which delivery was refused.
Section 3.3 No Commissions. The City shall not be liable for any real estate commissions
or brokerage fees that may arise from this ENA or any agreement that may result from this
ENA. The City represents that it has engaged no broker, agent or finder in connection with
this transaction, and Select Contracts shall indemnify, defend and hold the City harmless
from any claims by any broker, agent or finder retained by Select Contracts. Select Contracts
represents that it has engaged no broker, agent or finder in connection with this transaction.
Section 3.4 Breach of ENA. If either Party breaches the terms and conditions of this
ENA, the other Party may terminate this ENA upon thirty (30) days' prior written notice
to the non-breaching party. Following such termination, neither Party shall have any
further right, remedy or obligation under this ENA; provided, however, that Select
Contracts’ indemnification obligation pursuant to Section 3.5 shall survive such
termination. Neither Party shall have any liability to the other for monetary damages for
any breach of this ENA. No member, official, officer, or employee of the City shall be
personally liable to Select Contracts, or any successor in interest, in the event of any
default or breach by the City or for any amount which may become due to Select
Contracts or to its successor, or on any obligations under the terms of this ENA.
Section 3.5 Select Contracts’ Obligation to Indemnify City. Except for the gross
negligence or willful misconduct of the City, Select Contracts undertakes and agrees to
defend, indemnify, and hold harmless the City from and against all suits and causes of
action, claims, losses, demands and expenses, including, but not limited to, reasonable
attorneys' fees and costs of litigation, the cost to remove any lien or encumbrance on the
Project Site, damage or liability of any nature whatsoever, arising directly or indirectly,
in whole or in part, are caused by, arise in connection with, result from, relate to, or are
alleged to be caused by, arise in connection with performance of this ENA on the part of
Select Contracts or any contractor or subcontractor of Select Contracts. Select Contracts
shall pay immediately upon the City's demand any amounts owing under this indemnity.
The duty of Select Contracts to indemnify includes the duty to defend the City, at the
City's choosing, to pay the City's costs of its defense in any court action, administrative
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action, or other proceeding brought by any third Party arising in any manner by reason of
or incident to the performance of this ENA on the part of Select Contracts or any
contractor or subcontractor of Select Contracts. The City shall have the right to
reasonably approve any attorneys retained by Select Contracts to defend the City
pursuant to this Section 356 and shall have the right to reasonably approve any settlement
or compromise. Select Contracts' duty to indemnify the City shall survive the
termination of this ENA.
Section 3.6 Assignment. Select Contracts shall not assign its rights or responsibilities
under this ENA, in whole or in part, except with the written consent of the City. Any
attempted assignment without such prior written consent shall be invalid and void.
Section 3.7 Governing Law. This ENA shall be governed by and construed in accordance
with the laws of the State of California. Venue for any action between the Parties shall be
exclusively in Santa Clara County, California.
Section 3.8 No Third-Party Beneficiary. This ENA shall not be construed or deemed to be an
agreement for the benefit of any third party or parties, and no third party or parties will have
any claim or right of action hereunder for any cause whatsoever.
Section 3.9 Entire ENA. This ENA constitutes the entire agreement of the parties
regarding the subject matters of this ENA.
Section 3.10 Counterparts. This ENA may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same
agreement.
[Signatures Appear on Following Page]
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IN WITNESS WHEREOF, this ENA has been executed, in duplicate, by the Parties
on the date first above written.
SELECT CONTRACTS: CITY:
Select Contracts City of Gilroy
By: By: ____________________________________
Name: Name: ______________________________________________
Title: Title: _______________________________________________
Date: Date: _______________________________________________
Attest: ______________________________
City Clerk
Approved as to form:__________________
City Attorney