TITLE
Recommendation to authorize City Manager, or designee, to execute a Sixth Amendment to the Purchase and Sale Agreement (PSA), and any necessary documents, with American Life, Inc., a Washington corporation, or assignee, for the property located at 100 East Ocean Boulevard amending specific provisions in the PSA. (District 2)
DISCUSSION
On May 17, 2016, City Council authorized a Purchase and Sale Agreement (PSA) and Transient Occupancy Tax Sharing Agreement (TOTSA) with American Life, Inc. (Buyer/ Developer), in connection with the purchase and development of City-owned surplus property located at 100 East Ocean Boulevard (Subject Property) (Attachment) as a AAA-rated, Four Diamond full-service hotel (Proposed Use). Shortly thereafter, the PSA was executed, and the Buyer/Developer entered its Due Diligence Period as described by the PSA to begin site investigations to determine the feasibility of the Proposed Use on the Subject Property.
Subsequently, in 2016, a lawsuit was filed against the City and Buyer/Developer in connection with the Proposed Use, delaying Buyer/Developer progress and requiring multiple extensions to the Due Diligence Period via amendments to the PSA. The resulting delays from the lawsuit caused increases in labor costs, construction materials, and project financing, resulting in a significantly higher projected project feasibility gap. Therefore, on December 12, 2017, the City Council authorized amendments to the PSA and the TOTSA to help the Buyer/Developer close the projected project feasibility gap. Additionally, the Buyer/Developer committed to collective bargaining and to create a safe workplace including, among other safeguards, panic buttons for housekeeping employees. Due diligence has been ongoing since that time, during which the Buyer/Developer has been proceeding with CEQA review and the City’s regulatory entitlement processes. The Proposed Use received Planning Commission approval on March 4, 2021.
While the Buyer/...
Click here for full text