2013 2:00:00 PM

Monday, March 25, 2013 2:00 PM
Sparks Council Chambers, 745 4th Street, Sparks, NV

Item Number: 5

Title: Review, consideration and possible approval of an extension of the Exclusive Negotiating Agreement between the City of Sparks, the Redevelopment Agency of the City of Sparks and AED Investments, LLC for the redevelopment of a 10.2 acre parcel owned by the Redevelopment Agency located on Marina Gateway Drive between East Prater Way and Lincoln Way and having Assessor’s Parcel Number 037-020-50.

Petitioner/Presenter: AED Investments, LLC/Armando Ornelas, City Planner

Recommendation: Staff recommends that the City Council and Redevelopment Agency Board approve the proposed extension of the Exclusive Negotiating Agreement

Financial Impact: No direct financial impact

Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.

Agenda Item Brief: On September 24, 2012, the City Council and Redevelopment Agency Board approved a six month Exclusive Negotiating Agreement (ENA) with AED Investments, LLC. The ENA granted AED an exclusive opportunity to prepare a proposal to redevelop the a 10.2 acre parcel owned by the Redevelopment Agency located on Marina Gateway Drive for facilities which provide specialized services to the elderly and other complementary uses and, if the proposal is approved by the Agency, to acquire and redevelop the Property. This agenda item asks the City Council and Agency Board to consider and approve a six month extension of the ENA.

Background: In 2004, the Redevelopment Agency acquired a 10.2 acre parcel situated along the east side of Marina Gateway Drive between East Prater Way and Lincoln Way (the “Property”). The Assessor’s Parcel Number is 037-020-50. The Agency acquired the Property with the intention of potentially locating a new city hall facility there and/or disposition for a redevelopment purpose. On September 24, 2012, the City Council and Redevelopment Agency Board approved an Exclusive Negotiating Agreement (ENA) with AED Investments, LLC (the “Developer”). The Developer requested an exclusive opportunity to prepare a proposal to redevelop the Property for facilities which provide specialized services to the elderly and other complementary uses and, if the proposal is approved by the Agency, to acquire and redevelop the Property. These residential facilities may provide respiratory, memory, behavioral, orthopedic, transitory or other skilled care. AED’s preliminary project proposal is to develop, in three phases, specialized facilities for the elderly including, potentially: • Phase One, consisting of approximately 150 units (beds) to provide independent living, assisted living and memory care at a projected cost of $160,000 per unit. This phase of the project is anticipated to be developed using private financing. • Phase Two, consisting of approximately 88 units (beds). These facilities would provide some combination of behavioral care, skilled nursing care and transitional rehabilitation. CopperSands, Inc. is currently the projected operator/manager for this phase of the development. The Developer anticipates Phase Two will cost approximately $190,000 per unit and be financed through the U.S. Department of Housing and Urban Development. • Phase Three is likely to focus on additional behavioral, skilled nursing and transitional facilities as well as possible complementary medical uses. AED preliminarily estimates that their development costs for Phases One and Two will total approximately $40.8 million. Phase Three is very preliminarily anticipated to cost an additional $12 million. In addition to the construction jobs that would be created by the project, AED expects a minimum of one employee per bed created by the project. Of these, 90-95% would be permanent, full-time jobs. The positions will include professional medical and ancillary staff whose salaries range from $9.00 an hour up to $100,000 a year. The ENA’s proposed terms obligate the City and Agency to negotiate exclusively with the AED Investments regarding the possible transfer, disposition or use of the Property for the term of the ENA. The ENA does not, however, grant AED Investments the right to acquire the Property.

Analysis: The ENA requires that the Developer submit a proposal and that a Disposition and Development Agreement (DDA) be negotiated and presented to the Agency Board and City Council for consideration within six months. The original term of the ENA runs through March 25, 2013. The term of the ENA can be extended only with the approval the Agency Board and City Council. This agenda item asks the City Council and Agency Board to approve a six month extension of the ENA (i.e., through September 23, 2013). The Developer has requested this extension of the ENA’s term to gain additional time to complete their analysis of the feasibility of the project, including completion of a market analysis and availability of project financing, prepare a development proposal and negotiate a Disposition and Development Agreement (DDA) with Agency staff. The proposed amendment to the ENA also requires the Developer to provide the Agency and City an updated and complete market study prepared by a third party consultant by May 10, 2013 that substantiates market demand for the Developer’s proposal. If the market study is not submitted by this date, or should the market study fail to substantiate a need for the Project, the ENA will automatically terminate. Finally, the ENA extension provides that if a DDA is negotiated with Agency staff and is submitted for approval by the Agency Board and City Council prior to the end of the ENA term, the deadline will automatically be extended until the Agency Board of Directors and City Council makes a final decision on the DDA.

Alternatives: Alternatives to the staff recommendation including modifying the terms of the proposed extension to the ENA or rejecting the amendment and terminating the ENA.

Recommended Motion: I move to approve an extension through September 23, 2013 of the Exclusive Negotiating Agreement between the City of Sparks, the Redevelopment Agency of the City of Sparks and AED Investments, LLC.

Attached Files:

AED ENA 9-24-12.pdf

AED ENA extension 3-25-13.pdf

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