HomeMy WebLinkAboutTPFA 2 (JOINT ITEM 17) 1ST AMEND-TUSTIN LEGACY DDA 03-20-07
AGENDA REPORT
Agenda Item TPFA 2
Reviewed: LJIJ1t
City Manager ~
Finance Director I N/A
MEETING DATE: MARCH 20,2007
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: REDEVELOPMENT AGENCY STAFF
SUBJECT:
FIRST AMENDMENT TO TUSTIN LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT 06-01 (MASTER DEVELOPMENT SITE)
SUMMARY
Approval is requested of a First Amendment to the Disposition and Development
Agreement (DDA) for the Master Development site between the City of Tustin, Tustin
Public Financing Authority, and Tustin Legacy Community Partners, LLC ("TLCP" or the
"Developer") for the sale and development of certain property at Tustin Legacy
("Project").
RECOMMENDATION
That the City Council:
1. Adopt Resolution No.07-29 finding that the First Amendment to DDA 06-01 is within
the scope of the Final Joint Program EIS/EIR for the Reuse and Disposal of MCAS
Tustin, as amended by an Addendum and no additional analysis or document is
required under CEQA.
2. Approve and authorize the City Manager, or Assistant City Manager to execute the
First Amendment to DDA 06-01 and to carry out all actions necessary to implement the
amendment including execution of all related douments and instruments.
That the Tustin Public Financing Authority:
1. Adopt Resolution No. 07-01 finding that the First Amendment to DDA 06-01 is within
the scope of the Final Joint Program EIS/EIR for the Reuse and Disposal of MCAS
Tustin, as amended by an Addendum and no additional analysis or document is
required under CEQA.
2. Approve and authorize the City Manager, or Assistant City Manager to execute the
First Amendment to DDA 06-01 on behalf of the Tustin Public Financing Authority
and to carry out all actions necessary to implement the amendment including
execution of all related documents and instruments.
FISCAL IMPACT
The project involves no direct fiscal impacts on the City of Tustin anticipated at this time.
BACKGROUND/DISCUSSION
The original DDA 06-01 was entered into by and between the City of Tustin and Tustin
Legacy Community Partners, LLC (TLCP), a Delaware limited liability company on May
3, 2006. The original DDA sets forth the parameters of development and conveyance.
by the City of Tustin and Tustin Public Financing Authority (hereinafter the "Agency") of
certain property at Tustin Legacy (the former MCAS Tustin) to TLCP. Members of
TLCP include Centex Homes, Shea Homes and Shea Properties (the "Developer").
Under the original DDA, TLCP will serve as the master developer, the land development
entity that will entitle the Property, build out certain defined Tustin Legacy Backbone
Infrastructure, and then sell finished development parcels to residential builders for
construction of vertical improvements (homes) in Neighborhood D and rough graded
parcels to builders for construction of vertical residential and non-residential
development in Neighborhoods B, D and E. TLCP have also indicated that they will
also act as vertical builders for a large portion of the Property. The DDA contemplates
that certain portions of the Property will be developed by third party developers as well.
Pursuant to the Original DDA, a scope of development (Attachment 28), schedule of
performance (Attachment 17), and a. variety of terms and conditions required of TLCP
were identified. In the Original DDA, the Property was proposed to be developed
around four (4) potential conveyance phases to the Developer: Phase 1 was to have
begun in September 2006, Phase 2 begins in September 2009, Phase 3 begins in July
2011, and Phase 4 to be defined pursuant to a process defined in the Original DDA.
The Original DDA establishes certain key terms, including but not limited to the phasing
and conditions precedent to the City's obligation to sell and convey each phase of the
property to the Developer, the purchase price of the property, profit participation
payments, obligations of the Developer for deconstruction of the Property and
development of the Property under the established schedule of performance including
obligations for construction of Tustin Legacy Backbone Infrastructure and Local
Infrastructure.
A Summary of First Amendment to the DDA
First Amendments now being proposed to the DDA can be summarized as follows:
1. Minor amendments to clarify the DDA language as it affects Section 1.13.1,
3.2,3.3 and 3.4 of the original DDA as it relates to closing dates and clarification
for extensions to closing dates and how these extension relate to default
provisions in the Original DDA.
2. Neighborhood E: A modification to the scope of development to relocate the
Sports Park/detention basin originally proposed at Red Hill and Warner Avenue.
The detention basin component would be incorporated into detention facilities
within the Linear Park and constructed with Phase 1 of the Linear Park; whereas
the Sports Park component would be relocated to Phase 2. Commercial/business
uses would replace the original sports park site in Phase 1. The sports park
relocation site would be at the southeast of the extension of Carnegie and the
Linear Park.
3. Neighborhood G: A modification to relocate and defer construction of a
Congregate Care facility at Valencia and Tustin Ranch Road until Phase 2 and to
replace the original Congregate Care site in Phase 1 with residential uses.
4. Neighborhood D: The Developer has modified the square footage distributions
within the portion of the Community Core located south of Warner Avenue
(Planning Area 13 and 14) consistent with the Implementation Strategy required
by the Original DDA that was previously considered and approved by the City
Council for this area.
5. Given the moderations in the housing market, minor alterations to the Original
DDA Schedule of Performance (Attachment 17 and Exhibit F of Attachment 28)
are proposed.
6. The Developer proposes to delete a grade separated vehicular under-crossing at
Tustin Ranch Road just north of the Community Park that is currently shown as a
Developer required Backbone Infrastructure Improvement in Attachment 10 of
the Original DDA (improvement 129) and replace it with a grade separated
pedestrian/bicycle bridge over-crossing between the Neighborhood and Linear
Park proposed along the east side of Tustin Ranch Road and the north side of
the Community Park located on the west side of Tustin Ranch Road north of
Legacy Crossing.
7. Instead of six (6) arches within the Linear Park as required by the Original DDA
as part of Local Infrastructure Improvements, the Developer will be required to
construct an iconic grade separated pedestrian bridge structure with functional
purpose that incorporates arch features for the pedestrian bridge at Warner
Avenue /Community Park, and unique iconic pedestrian bridges over Tustin
Ranch Road/Community Park, and Armstrong/Linear Park subject to approval of
the design by the City.
This proposal requires that the cost of all grade separated crossings have costs
associated with the complete construction of these facilities that are at a
minimum equal to the total costs of the six (6) arches and three (3) bridges as
originally identified in the Original DDA (a total cost of $19,813,005), as will be
certified by the Public Works Director and Assistant City Manager. Any cost
escalations necessary to accommodate construction of the iconic bridge
structures will be a Developer obligation.
8. Amendments to Attachment 17 Schedule of Performance and Exhibit G of
Attachment 28 related to requirements for substantial progress related to closing
requirements by development phase.
Financial Analysis of the Amendment
Based on the amendments proposed by TLCP, the City has asked Keyser Marston, Inc.
(KMA) to undertake a comparison regarding the impact of the proposed modifications
on land value of the transaction with the Developer. This is ensure that the proposed
amendments do not create a net positive financial impact on land values , based on the
original DDA cash flow model. Based on KMA's financial review using the same value
assumptions as contained n the original DDA cash flow model, the proposed
amendments would not have a positive impact on the Developer's Internal Rate of
Return (IRR) and thus would not require an adjustment in the proposed land payments
to the City.
Environmental Documentation
In considering approval of the First Amendment to DDA 06-01, the City and Public
Financing Authority has complied with the requirements of the California Environmental
Quality Act and the applicable state and local implementing guidelines (collectively
"CEQA") through the preparation of an initial study. The conclusion of the initial study is
that the amendment is consistent with the Final Joint Program Environmental Impact
Report for the Reuse and Disposal of MCAS Tustin, as amended in April 2006 by a
Final Addendum (including a minor Errata to the Addendum). City staff are
recommending that the City Council and Public Finance Authority each adopt
resolutions with applicable environmental findings supporting this conclusion.
~~
Christine Shingleton
Assistant City Manager
Attachments: DDA Amendment
C.C. Resolution 07-29
TPFA Resolution 07-01
Initial Study
PLEASE REFER TO
ITEM NO. 17
OF CITY COUNCIL PACKET FOR
BACKUP DOCUMENTATION