According to the published agenda for the regularly scheduled meeting of the Cypress City Council, an exclusive negotiating agreement with Shea Properties will be approved on Monday, April 8 as part of the meeting’s consent calendar.
A previous ENA with a different developer did not bear fruit.
The meeting will be held beginning at 7 p.m. in the Council Chambers in the Cypress Civic Center, 5275 Orange Ave. in Cypress. (The Council Chambers are in the building west of the library and north of City Hall.)
Text of staff report
At its February 11 meeting, the City Council received and filed an exclusive negotiating agreement with Lewis Land Developers, LLC and Province Group, LLC (Lewis) for the sale and development of a commercial center at the city-owned 13-acre parcel at Katella Avenue and Winners Circle. Those negotiations ended on February 26 when Lewis disapproved its feasibility investigation.
Lewis’ disapproval provided the City Council the opportunity to consider several other options for the site, including negotiating with Shea Properties for a mixed-use project. The City Council first partnered with Shea in 2017 for a commercial development that proved infeasible. Shea’s mixed-use project was a finalist in the second developer selection process in the summer of 2018 when the City Council entered into negotiations with Lewis for a commercial development project.
The first step in the development process with Shea, negotiation of an Exclusive Negotiating Agreement, is complete and ready for City Council consideration. An exclusive negotiating agreement (ENA) is an agreement between the city and a developer specifying a period in which the parties negotiate exclusively on a development project. The ENA binds the city and developer from making any similar deals with other parties. It shows the developer has represented willingness and ability to undertake studies, plans, and other activities to define the scope of development and determine the feasibility of development on a particular site. The ENA serves as the basis for entering into an agreement to convey/sell the property.
The contemplated project consists of approximately 60,000 square feet of commercial development including retail, restaurant, hotel, and luxury cinema uses and 250 luxury apartments. Shea’s concept plan and the ENA are attached.
The ENA with Shea is effective upon City Council approval and expires in 135 days (August 22). The ENA includes an abbreviated (45 day) due diligence period accounting for Shea’s efforts in 2017. During the due diligence period, the developer will undertake activities to evaluate the project’s feasibility, including: determining if the site is suitable for development; demonstrating the developer’s financial capacity to successfully complete the project; refining the concept plan in collaboration with the Community Development department; and undertaking environmental and economic feasibility studies. Should the City Council approve the ENA, Shea will make a $400,000 deposit which becomes non-refundable as the project progresses and the City Council and Shea will engage in additional negotiations regarding the terms under which the city would sell the parcel to Shea. The ENA does not bind either party to sell/buy the property, nor does it require the City Council to approve any of the project’s land use entitlements.