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HomeMy WebLinkAbout20 VESTAR DEVELOPMENT CFD 07-01 04-17-07Agenda Item ~ Reviewed: ~~'' ._~ ~~ -, City Manager ;- t~y;r -----~ Finance Director MEETING DATE: April 17, 2007 T0: William A. Huston, City Manager FROM: Ronald A. Vault, Finance Director SUBJECT: RESOLUTION N0.07-35 OF THE INTENTION TO ESTABLISH A COMMUNITY FACILITIES DISTRICT AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES, AND RESOLUTION N0.07-36 TO INCUR BONDED INDEBTEDNESS OF THE PROPOSED CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT N0.07-1 SUMMARY: A petition to form a Community Facilities District has beers sent to the City by VestarlKimco Tustin, L.P. for the area generally known as The District at Tustin Legacy. The items you are being asked to approve are the initial documents which respond to the Developer's petition and direct staff to proceed with the creation of the district, establish the rate and method of the special tax apportionment, incur debt, and approve the selection of various Consultants. RECOMMENDATION: 1. Accept the Petition to Create a .Community Facilities District sent by Costco Wholesale Corporation, Lowe's HIW, Inc., and Vestar/Kimco Tustin, L.P. 2. Adopt Resolution No. 07-35, a Resolution of the City Council of the City of Tustin, California, of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes. 3. Adopt Resolution No. 07-36, a Resolution of the City Council of the City of Tustin, California, to Incur Bonded Indebtedness of the Proposed City of Tustin Community Facilities District No. 07-1 (Tustin Legacy/Retail Center). 4. Authorize the City Manager or the Finance Director to sign the Deposit And Reimbursement Agreement between the City of Tustin and VestarlKimco Tustin, L. P. 5. Authorize the selection of various Consultants for the Community Facilities District financing as recommended by staff. FISCAL IMPACT: The cost of the formation of the Community Facilities District will be paid by the Petitioner. DISCUSSION: On March 1, 2004 the City Council adopted the City's Mello-Roos Goals & Policies and authorized staff to proceed with the formation of Community Facilities Districts (CFDs) for the Legacy Project Area. The items you are requested to approve at this time are governed by the Mello-Roos Community Facilities Act of 1982 to initialize the CFD formation process. Additional documents requiring your approval are intended to come to you at your meeting of June 5th. Exhibit B of Resolution No. 07-36, Proposed Rate and Method of Apportionment of Special Tax, includes several schedules detailing the proposed special taxes necessary to cover the bonded indebtedness and services .for the proposed CFD. The cost of the preparation of the CFD is borne by the Developers and detailed in the Deposit and Reimbursement Agreement attached to the Petition to Create a Community Facilities District. The following Consultants have been selected to provide various services in conjunction with this CFD formation and implementation as follows: • David A. Taussig & Associates as Special Tax Consultant Orrick, Herrington & Sutcliffe, LLP as Bond Counsel Gardner, Underwood & Bacon, LLC as Pricing Consultant • Bank of America Securities, LLC as Underwriters • Harris Realty Appraisal forAppraisal Services Staff will be available at the meeting to respond to specific questions that the City Council may have regarding the Community Facilities District formation process. Roha1~. Nault, Finance director Attachments CommunifyFacilifiesDistrict07-1Forma fionResolutionsStaffReport. doc PETITION TO CREATE A COMMUNITY FACILITIES DISTRICT City Council City of Tustin 300 Centennial Way Tustin, California 92680 Members of the City Council: This is a petition to create a community facilities district, and a waiver with respect to certain procedural matters, under the Mello-Roos Community Facilities Act of 1982 (the "Act"), and the undersigned hereby state as follows: 1. Landowner. This Petition is submitted by Vestar/Kimco Tustin, L.P., a California limited partnership ("Vestar"), Costco Wholesale Corporation, a Washington corporation ("Costco"), and Lowe's HIW, Inc., a Washington corporation ("Lowe's" and together with Vestar and Costco, the "Landowners"), as the owners, collectively, of all of the area of land proposed to be included within the community facilities district. 2. Proceedings Requested. The Landowners hereby request that the City Council (the "City Council") of the City of Tustin (the "City") institute proceedings pursuant to the Act to establish a community facilities district to be named "City of Tustin Community Facilities District No. 07-1 (Tustin Legacy/Retail Center)" (the "Community Facilities District"), to levy special taxes in the Community Facilities District and to authorize special tax bonds for the Community Facilities District in the maximum amount of $16,000,000. 3. Boundaries of Community Facilities District. The boundaries of the territory which is proposed for inclusion in the Community Facilities District are described in Exhibit A attached hereto and made a part hereof. 4. Types of Facilities and Services. The types of facilities and services to be financed by the Community Facilities District are described in Exhibit B attached hereto and made a part hereof. 5. Elections. The Landowners hereby request that the special elections to be held under the Act to authorize the special taxes for the Community Facilities District, to authorize the issuance of the bonds for the Community Facilities District and to establish an appropriations limit for the Community Facilities District be consolidated into a single election and that the election be conducted by the City and its officials using mailed orhand-delivered ballots and that such ballots be opened and canvassed and the results certified at the same meeting of the City Council as the public hearings on the Community Facilities District under the Act, or as soon thereafter as possible. OHS WES`r:260194729.3 6. Waiver. To expedite the completion of the proceedings for the Community Facilities District, each of the Landowners hereby waives all notices of hearings (other than published notices required under the Act) and all notices of election, all applicable waiting periods under the Act for the election, all ballot analysis and arguments for the election and all requirements as to the form of the ballot. 7. Deposit. Vestar has submitted (a) a check in the amount of $25,000, which shall constitute the deposit required by the City to be used to compensate the City Council and the City for all costs incurred in conducting proceedings to create the Community Facilities District, and (b) a duly executed Deposit and Reimbursement Agreement, dated as of December 1, 2006 (the "Deposit Agreement"), by and between the City and Vestar. The Landowners hereby agree that Vestar is entitled to reimbursement pursuant to the terms of the Deposit Agreement. 8. Representations and Warranties. Vestar hereby represents and warrants to the City that (a) collectively, the Landowners are, as of the date of this Petition, the legal owners of the fee interest in all of the property proposed to be included within the Community Facilities District and that no other person or entity is the legal owner of any portion of the fee interest in any of such property, (b} Vestar is the owner of the land identified on Exhibit A attached hereto as being owned by it and (c) Vestar has the power and authority to execute and deliver this Petition and the Deposit Agreement, and has taken all action necessary to cause this Petition and the Deposit Agreement to be executed and delivered on its behalf, and this Petition and the Deposit Agreement have been duly and validly executed and delivered by Vestar. Lowe's hereby represents and warrants to the City that (a) Lowe's is the owner of the land identified on Exhibit A attached hereto as being owned by Lowe's and (b) Lowe's has the power and authority to execute and deliver this Petition, has taken all action necessary to cause this Petition to be executed and delivered on its behalf, and has duly and validly executed and delivered this Petition. Costco hereby represents and warrants to the City that (a) Costco is the owner of the land identified on Exhibit A attached hereto as being owned by Costco and (b) Costco has the power and authority to execute and deliver this Petition, has taken all action necessary to cause this Petition to be executed and delivered on its behalf, and has duly and validly executed and delivered this Petition. 9. Mailing Addresses. The address of each of the Landowners for receiving notices is as follows: To Lowe's: Lowe's HIW, Inc. 1530 Faraday Avenue, Suite 140 Carlsbad, CA 92008 Attn: Bob Midkiff, Construction Manager With a copy to: Lowe's HIW, Inc. 1530 Faraday Avenue, Suite 140 Carlsbad, CA 92008 Attn: Tom Maddox OHS WEST:260194729.3 2 To Costco: Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027-5367 Attention: Corporate Counsel Attention: V. Anthony Unan, Esq. With a copy to: Costco Wholesale Corporation c/o Northwest Atlantic Partners 17300 Red Hill Avenue, Suite 230 Irvine, CA 92614-5689 Attention: Mr. Peter Clement With a copy to: Greenberg Glusker 1900 Avenue of the Stars, 21 st Floor Los Angeles, California 90067-4590 Attention: Bob Baradaran, Esq. To Vestar: Vestar/Kimco Tustin, L.P. 2425 East Cameiback Road, #750 Phoenix, Arizona 85016 Attention: General Counsel 10. Counterparts. This Petition may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. This Petition is dated as of April 17, 2007. Costco Wholesale Corporation, a Washington corporation By: Name: Title: Lowe's HIW, Inc. a Washington corporation By: Name: Title: OHS WEST;260194729.3 3 Vestar/Kimco Tustin, L.P. By: Vestar California XXX, L.L.C. Its: General Partner B • .~~ y~ Name: Rick Kuhle Title: Manager anager OHS WEST:260194729.3 EXHIBIT A BOUNDARIES OF COMMUNITY FACILITIES DISTRICT The boundaries of the territory which are proposed for inclusion in the Community Facilities District are depicted in the attached map. The territory proposed for inclusion in the Community Facilities District and owned by the Landowners is identified as the following Orange County Assessor Parcel Nos.: The territory identified as follows is owned by Vestar: 434-431-03 434-441-06 434-431-OS 434-441-07 434-431-06 434-441-08 434-431-10 434-441-09 434-431-11 434-441-10 434-431-12 434-441-11 434-431-21 434-441-12 434-431-22 434-441-13 434-431-25 434-441-14 434-431-30 434-441-15 434-441-01 434-441-16 434-441-03 434-441-17 434-441-04 434-441-18 434-441-OS The territory identified as follows is owned by Costco: 434-431-24 and Parcel 2 of LLA 2006-07 The territory identified as follows is owned by Lowe's: Parcel 1 of LLA 2006-07 OHS WESr260194729.3 A-1 EXHIBIT B TYPES OF FACILITIES AND SERVICES Facilities The types of facilities to be fnanced by the Community Facilities District are street improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, storm drains, utilities, public parks and recreation facilities, public library facilities, dire protection facilities and equipment and land, rights-of way and easements necessary for any of such facilities. Services The types of services to be financed by the Community Facilities District are police protection services, fire protection services, ambulance and paramedic services, recreation program services, maintenance of parks, parkways and open space and flood and storm protection services. RESOLUTION N0.07-35 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN TO INCUR BONDED INDEBTEDNESS OF THE PROPOSED CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 07-1 (TUSTIN LEGACY/RETAIL CENTER) WHEREAS, the City Council (the "City Council") of the City of Tustin (the "City") has this date adopted its Resolution entitled "A Resolution of the City Council of the City of Tustin of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes," stating its intention to establish the City of Tustin Community Facilities District No. 07- 1 (Tustin Legacy/Retail Center) (the "Community Facilities District") pursuant to the Mello- Roos Community Facilities Act of 1982 (the "Act") for the purpose of financing certain public facilities (the "Facilities") and services, as further provided in said Resolution; and WHEREAS, in order to finance the Facilities it is necessary to incur bonded indebtedness in the amount of up to $16,000,000; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tustin as follows: Section 1. The City Council hereby declares that in order to finance the Facilities, it is necessary to incur bonded indebtedness. Section 2. The purpose ~ for which the proposed debt is to be incurred is to provide the funds necessary to pay the costs of the Facilities, including construction costs and all costs incidental to, or connected with, the accomplishment of said purpose and of the financing thereof, as permitted by Section 53345.3 of the Act. Section 3. The maximum amount of the proposed debt is $16,000,000. Section 4..The City Council hereby fixes Tuesday, June 5, 2007, at 7:00 p.m., or as soon thereafter as the City Council may reach the matter, at 300 Centennial Way, Tustin, California, as the time and place when and where the City Council will conduct a public hearing on the proposed debt issue. Section 5. The City Clerk of the City is hereby directed to publish, or cause to be published, a notice of said public hearing one time in a newspaper of general circulation published in the area of the Community Facilities District. The publication of said notice shall be completed at least seven days prior to the date herein set for said public hearing. Said notice shall contain the information prescribed by Section 53346 of the Act. Section 6. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or OHS WEST:260194830.3 desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof. Section 7. This Resolution shall take effect immediately upon its adoption. APPROVED and ADOPTED by the City Council of the City of Tustin on April 17, 2007. Mayor ATTEST: Pamela Stoker, City Clerk OHS WEST:260194830.3 2 CLERK'S CERTIFICATE STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF TUSTIN I, Pamela Stoker, -City Clerk of the City of Tustin, California hereby certify that the foregoing is a full, true and correct copy of a Resolution duly adopted at a regular meeting of the City Council of said City duly and regularly held at the regular meeting place thereof on April 17, 2007, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said Resolution was adopted by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: An agenda of said meeting was posted at least 72 hours before said meeting at 300 Centennial ~Uay, Tustin, California, a location freely accessible to members of the public, and a brief general description of said Resolution appeared on said agenda. I further certify that I have carefully compared the same with the original minutes of said meeting on file and of record in my office; that the foregoing Resolution is a full, true and correct copy of the original Resolution adopted at said meeting and entered in said minutes; and that said Resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. Dated: , 2007 Pamela Stoker, City Clerk OHS WEST:260194830.3 RESOLUTION N0.07-36 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN OF INTENTION TO ESTABLISH A COMMUNITY FACILITIES DISTRICT AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES WHEREAS, the City Council (the "City Council") of the City of Tustin (the "City") has received a written petition (the "Petition") from Vestar/Kimco Tustin, L.P., a California limited partnership ("Vestar"), Costco Wholesale Corporation, a Washington corporation, and Lowe's HIW, Inc., a Washington corporation (collectively, the "Landowners") requesting the institution of proceedings for the establishment of a community facilities district (the "Community Facilities District"); WHEREAS, each Landowner, respectively, has represented and warranted to the City Council that it owns the land designated on Exhibit A to the Petition as being owned by such Landowner, which is all of the area of land proposed to be included within the Community Facilities District; WHEREAS, under the Mello-Roos Community Facilities Act of 1982 (the "Act"), the City Council is authorized to establish the Community Facilities District; WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private .entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district; WHEREAS, Section 53314.9 of the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest, under all the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53321 of the Act and in the resolution of formation to establish a community facilities district pursuant to Section 53325.1 of the Act, (b) any proposed special tax is approved by the qualified electors of the community facilities district .pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; WHEREAS, the City and Vestar are entering into a Deposit and Reimbursement Agreement, dated as of December 1, 2006 (the "Deposit Agreement"), that provides for the advancement of funds by Vestar to be used to pay costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bonds thereby, and provides for the reimbursement to Vestar of such funds advanced, without interest, from the proceeds of any such bonds issued by the Community Facilities District; and OHS WEST:260194834.3 WHEREAS, the City desires to include in this Resolution, in accordance with Section 53314.9 of the Act, the proposal to repay funds pursuant to the Deposit Agreement; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tustin as follows: Section 1. The City Council hereby finds that the Petition is signed by the requisite number of owners of land proposed to be included in the Community Facilities District. Section 2. The City Council proposes to establish a community facilities district under the terms of the Act. The boundaries of the territory proposed for inclusion in the Community Facilities District are described in the map showing the proposed Community Facilities District (the "Boundary Map") on file with the City Clerk of the City (the "City Clerk"), which boundaries are hereby preliminarily approved and to which map reference is hereby made for further particulars. The City Clerk is hereby directed to sign the original Boundary Map and record, or cause to be recorded, the Boundary Map with all proper endorsements thereon in the office of the Orange County Recorder within 15 days of the date of adoption of this Resolution, all as required by Section 3111 of the California Streets and Highways Code. Section 3. The name proposed for the Community Facilities District is "City of Tustin Community Facilities District No. 07-1(Tustin Legacy/Retail Center)." Section 4. The public facilities (the "Facilities") .proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption "Facilities" on Exhibit A hereto, which is by this reference incorporated herein. Those Facilities proposed to be purchased as completed public facilities are described under the caption "Facilities to be Purchased" on Exhibit A hereto. The services (the "Services") proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption "Services" on Exhibit A hereto. The incidental expenses proposed to be incurred are identified under the caption "Incidental Expenses" on Exhibit A hereto. All or any portion of the Facilities may be financed through a financing plan, including, but not limited to, a lease, lease-purchase or installment-purchase arrangement. Section 5. Except where funds are otherwise available, a special tax sufficient to pay for all Facilities and Services, secured by recordation of a continuing lien against all nonexempt real property in the Community Facilities District, will be annually levied within the Community Facilities District. The rate and method of apportionment of the special tax (the "Rate and Method"), in sufficient detail to allow each landowner within the proposed Community Facilities District to estimate the maximum amount that he or she will have to pay, is described in Exhibit B attached hereto, which is by this reference incorporated herein. The conditions under which the obligation to pay the special tax may be prepaid and permanently satisfied are specified in the Rate and Method. The special tax will be collected in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine, including direct billing of the affected property owners. The tax year after which no further special tax to pay for public facilities will be levied against any parcel used for private residential purposes is specified in the Rate and Method. OHS WEST;260194834.3 2 Under no circumstances shall the special tax to pay for public facilities levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within the Community Facilities District by more than 10%. For purposes of this paragraph, a parcel shall be considered "used for private residential purposes" not later than the date on which an occupancy permit for private residential use is issue . Section 6. Pursuant to Section 53344.1 of the. Act, the City Council hereby reserves to itself the right and authority to allow any interested owner of property within the Community Facilities District, subject to the provisions of said Section 53344.1 and to those conditions as it may impose, and any applicable prepayment penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the Community Facilities District treasurer in full payment or part payment of any installment of the special taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender. Section 7. The City Council hereby fixes Tuesday, June 5, 2007, at 7:00 p.m., or as soon thereafter as the City Council may reach the matter, at 300 Centennial Way, Tustin, California, as the time and place when and where the City Council will conduct a public hearing on the establishment of the Community Facilities District. Section 8. The City Clerk is hereby directed to publish, or cause to be published, a notice of said public hearing one time in a newspaper of general circulation published in the area of the Community Facilities District. The publication of said notice shall be completed at least seven days prior to the date herein fixed for said hearing. Said notice shall contain the information prescribed by Section 53322 of the Act. Section 9. The levy of said proposed special tax shall be subject to the approval of the qualified electors of the Community Facilities District at a special election. The proposed voting procedure shall be by mailed or hand-delivered ballot among the landowners in the Community Facilities District, with each owner having one vote for each acre or portion of an acre such owner owns in the Community Facilities District. Section 10. Each officer of the City who is or will be responsible for providing one or more of the proposed types of Facilities or Services is hereby directed to study, or cause to be studied, the proposed Community Facilities District and, at or before said public hearing, file a report with the City Council containing a brief description of the public facilities and services by type which will in his or her opinion be required to adequately meet the needs of the Community Facilities District, and his or her estimate of the cost of providing the Facilities and Services. Such officers are hereby also directed to estimate the fair and reasonable cost of the Facilities proposed to be purchased as completed public facilities and of the incidental expenses proposed to be paid. Such report shall be made a part of the record of said public hearing. Section 11. Vestar has heretofore advanced certain funds, and may advance additional funds, which have been or may be used to pay costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bonds thereby. OHS WEST:260194834.3 3 The City Council proposes to repay all or a portion of such funds expended for such purpose, solely from the proceeds of such bonds, pursuant to the Deposit Agreement. The Deposit Agreement is hereby incorporated herein as though set forth in full herein. Section 12. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof. Section 13. This Resolution shall take effect immediately upon its adoption. APPROVED and ADOPTED by the City Council of the City of Tustin on April 17, 2007. Mayor ATTEST: Pamela Stoker, City Clerk OHS WEST.260194834.3 4 EXHIBIT A FACILITIES, FACILITIES TO BE PURCHASED, SERVICES AND INCIDENTAL EXPENSES Facilities The types of facilities proposed to be financed by the Community Facilities District are street improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, storm drains, utilities, public parks and recreation facilities, public library facilities, fire protection facilities and equipment and land, rights-of way and easements necessary for any of such facilities. Facilities to be Purchased The types of facilities to be purchased as completed facilities are street improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, storm drains, utilities, public parks and recreation facilities, public library facilities, fire protection facilities and equipment and land, rights-of way and easements necessary for any of such facilities. Services The types of services proposed to be financed by the Community Facilities District are police protection services, fire protection services, ambulance and paramedic services, recreation program services, maintenance of parks, parkways and open space and flood and storm protection services. Incidental Expenses The incidental expenses proposed to be incurred include the following: (a) the cost of planning and designing public facilities to be financed, including the cost of environmental evaluations of those facilities; (b) the costs associated with the creation of the Community Facilities District, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District; and (c) any other expenses incidental to the construction, completion, and inspection of the authorized work. OHS WEST;260194834.3 A-1 EXHIBIT B PROPOSED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX OHS WEST:260194834.3 B-1 CLERK'S CERTIFICATE STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF TUSTIN I, Pamela Stoker, City Clerk of the City of Tustin, California hereby certify that the foregoing is a full, true and correct copy of a Resolution duly adopted at a regular meeting of the City Council of said City duly and regularly held at the regular meeting place thereof on April 17, 2007, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said Resolution was adopted by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: An agenda of said meeting was posted at least 72 hours before said meeting at 300 Centennial Way, Tustin, California, a location freely accessible to members of the public, and a brief general description of said Resolution appeared on said agenda. I further certify that I have carefully compared the same with the original minutes of said meeting on file and of record in my office; that the foregoing Resolution is a full, true and correct copy of the original Resolution adopted at said meeting and entered in said minutes; and that said Resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. Dated: , 2007 Pamela Stoker, City Clerk OHS WESr:260194834,3 DEPOSIT AND REIMBURSEMENT AGREEMENT by and between CITY OF TUSTIN and VESTAR/KIMCO TUSTIN, L.P. Dated as of December 1, 2006 City of Tustin Community Facilities District No. 07-1 (Tustin Legacy/Vestar} OHS WEST;260138826.1 t_ DEPOSIT AND REIMBURSEMENT AGREEMENT THIS DEPOSIT AND REIMBURSEMENT AGREEMENT (this "Deposit Agreement"}, dated as of December 1, 2006, is by and between the CITY OF TUSTIN, a general law city organized and existing under and by virtue of the laws of the State of California (the "City"), and VESTAR/KIMCO TUSTIN, L.P., a California limited partnership ("Vestar"). WITNESSETH: WHEREAS, Vestar expects to petition the City to establish a community facilities district to be designated "City of Tustin Community Facilities District No. 07-1 (Tustin Legacy/Vestar)" (the "Community Facilities District") under the Mello-Roos Community Facilities Act of 1982 (the "Act"); WHEREAS, the City's Mello-Roos Community Facilities Act of 1982 Local Goals and Policies (the "Policies") provide that the costs of the proceedings for a community facilities district financing initiated by petition of landowners are to be borne by the petitioners, that no action will be taken on any petition unless and until a deposit of funds is made by or on behalf of the petitioners with the City and that, if bonds are issued by such community facilities district, the petitioners (or such other entity designated by the petitioners) will be reimbursed from bond proceeds for the portion of such deposit that has been expended or encumbered; WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district; WHEREAS, Section 53314.9 of the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest, under all of the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53521 of the Act and in the resolution of formation to establish the community facilities district pursuant to Section 53325.1 of the Act, (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; and WHEREAS, the City and Vestar desire to enter into this Deposit Agreement in accordance with the Policies and Section 53314.9 of the Act in order to provide for the advancement of funds by Vestar to be used to pay costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bonds (the OHS WEST:26013882b. l "Bonds") thereby, and to provide for the reimbursement to Vestar of such funds advanced, without interest, from the proceeds of any Bonds issued by the Community Facilities District; NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: Section 1. The Deposits and Application Thereof. (a) Vestar has delivered to the City a check payable to the "City of Tustin" in the amount of $25,000 (the "Initial Deposit"). The City, by its execution hereof, acknowledges receipt of, and accepts, the Initial Deposit. (b) The Initial Deposit, together with any subsequent deposit required to be made by Vestar pursuant to the terms hereof (collectively, the "Deposits"), are to be used to pay for any costs incurred for any authorized purpose in connection with the establishment of the Community Facilities District and the issuance of Bonds thereby, including, without limitation, (a) the fees and expenses of any consultants to the City employed in connection with the establishment of the Community Facilities District and the issuance of Bonds thereby, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (b) the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the establishment of the Community Facilities District and the issuance of Bonds thereby, (c) the costs of publication of notices, preparation and mailing of ballots and other costs related to any hearing, election or other action or proceeding undertaken in connection with the establishment of the Community Facilities District and the issuance of Bonds thereby, (d) reasonable charges for City staff time incurred in connection with the establishment of the Community Facilities District and the issuance of Bonds thereby, including a reasonable allocation of City overhead expense related thereto, and (e) any and all other actual costs and expenses incurred by the City in connection with the establishment of the Community Facilities District and the issuance of Bonds thereby (collectively, the "Initial Costs"). The City may draw upon the Deposits from time to time to pay the Initial Costs. (c} If, at any time prior to the establishment of the Community Facilities District and the issuance of Bonds thereby, the unexpended and uncommitted balance of the Deposits is less than $5,000, the City may request, in writing, that Vestar make an additional deposit in an amount estimated to be sufficient, together with any such unexpended and uncommitted balance and any special taxes of the Community Facilities District available for such purpose, to pay for all Initial Costs. Vestar shall make such additional deposit with the City within ten business days of the delivery to Vestar of the City's written request therefor. If Vestar fails to make any such additional deposit within such ten business day period, the City may cease all work related to the establishment of the Community Facilities District and the issuance of Bonds thereby. (d) The Deposits may be commingled with other funds of the City for purposes of investment and safekeeping, but the City shall at all times maintain records as to the expenditure of the Deposits. (e) The City shall provide Vestar with a written monthly summary of expenditures made from the Deposits, and the unexpended balance thereof, within ten business days of receipt OHS WEST:260138826.1 2 by the City of a written request therefor submitted by Vestar. The cost of providing any such summary shall be charged to the Deposits. Section 2. Return of Deposits; Reimbursement. (a) As provided in Section 53314.9 of the Act, the approval by the qualified electors of the Community Facilities District of the proposed special tax to be levied therein is a condition to the repayment to Vestar of the funds advanced by Vestar pursuant hereto. Therefore, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied therein, the City shall have no obligation to repay Vestar any portion of the Deposits expended or encumbered to pay Initial Costs. In accordance with Section 53314.9 of the Act, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied therein, the City shall return to Vestar any portion of the Deposits which have not been expended or encumbered to pay Initial Costs by the time of the election on said proposed special tax. (b) If proceedings for the establishment of the Community Facilities District or the issuance of Bonds thereby are terminated, the City shall, within ten business days after official action by the City or the Community Facilities District to terminate said proceedings, return the then unexpended and uncommitted portion of the Deposits to Vestar, without interest. (c) If Bonds are issued by the Community Facilities District, the City shall reimburse Vestar, without interest, for the portion of the Deposits that has been expended or encumbered, said reimbursement to be made within ten business days after the issuance of such Bonds, solely from the proceeds of such Bonds and only to the extent otherwise permitted under the Act. The City shall, within ten business days after the issuance of such Bonds, return the then unexpended and uncommitted portion of the Deposits to Vestar, without interest. Section 3. Deposit Agreement Not Debt or Liability of City. As provided in Section 53314.9(b) of the Act, this Deposit Agreement does not constitute a debt or liability of the City. The City shall not be obligated to advance any of its own funds to pay Initial Costs or any other costs incurred in connection with the establishment of the Community Facilities District and the issuance of Bonds thereby. No member of the City Council of the City and no officer, employee or agent of the City shall to any extent be personally liable hereunder. Section 4. Notices. All written notices to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the City: City of Tustin 300 Centennial Way Tustin, California 92680 Attention: Director of Finance If to Vestar Vestar/Kimco Tustin, L.P. 2425 East Camelback Road #750 Phoenix, Arizona 85016 Attention: General Counsel OHS WEST;260138826.1 3 Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Section 5. California Law. This Deposit Agreement shall be governed and construed in accordance with the laws of the State of California. Section 6. Severabili If any part of this Deposit Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Deposit Agreement shall be given effect to the fullest extent reasonably possible. Section 7. Successors and Assigns. This Deposit Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. Section 8. Counterparts. This Deposit Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Deposit Agreement as of the date first written above. CITY OF TUSTIN By: VESTARIKIMCO TUSTIN, L.P. By: Vestar California XXX, L.L.C. Its: General Partner By• ~ ,~ ~ Name: Rick Kuhle Title: Manager Manager OHS WEST;260138826.1 4