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HomeMy WebLinkAboutCC RES 06-42 RESOLUTION NO. 06-42 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, APPROVING THE TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT FOR THE MASTER DEVELOPMENT SITE The City Council of the City of Tustin does hereby resolve as follows: I. The City Council finds and determines as follows: A. Pursuant to the Defense Base Closure and Realignment Act of 1990, (Part A of Title XXIX of Public Law 101-510; 10 U.S.C. Section 2687 Note), as amended (the "Base Closure Law") the Federal Government determined to close the Marine Corps Air Station-Tustin ("MCAS Tustin") located substantially in the City of Tustin, California. In 1992, the City was designated as the Lead Agency or Local Redevelopment Authority for preparation of a reuse plan for MCAS Tustin in order to facilitate the closure of MCAS Tustin, and its reuse, in furtherance of the economic development of the City and surrounding region. The MCAS Tustin Reuse Plan, developed in accordance with this procedure, was adopted by the Tustin City Council (the "City Council") on October 17, 1996 and amended in September 1998 (the "Reuse Plan"). B. In May 2002, the Navy approved an Economic Development Conveyance of Property at MCAS Tustin and agreed to convey 1153 acres of MCAS Tustin to the City pursuant to that certain Agreement between The United States of America and Tustin for the Conveyance of a portion of the former Marine Corps Air Station Tustin, dated May 13, 2002 (the "Conveyance Agreement"). On May 13, 2002, a total of 977 acres, including the Developer Fee Parcels which are the subject of this Agreement, were conveyed by the Federal Government, acting by and through the Navy, to the City by Federal Deed; in accordance with the provisions of the Conveyance Agreement. Additional acreage, including the Developer Lease Parcels, are leased by the City pursuant to that certain Lease in Furtherance of Conveyance, dated May 13, 2002, between the Federal Government, acting by and through the Navy, as ground lessor, and the City, as ground lessee (the "L1FOC"). The portion of MCAS Tustin located within the City is referred to as "Tustin Legacy." C. On February 3, 2003, the City approved and adopted the MCAS Tustin Specific Plan/Reuse Plan by Ordinance No. 1257 setting forth the zoning and entitlement framework for future development of Tustin Legacy. Since its initial adoption, the City approved (i) Specific Plan Amendment Resolution No. 06-42 Page 1 of6 04-03 on March 7, 2005 (Ordinance 1297), (ii) Specific Plan Amendment 04-01 on March 7, 2005 (Ordinance 1294 and 1295), and (iii) Specific Plan Amendment 05-01 (Ordinance 1299) on June 5, 2005. In addition, the City and the Developer filed Application No. 05-002 seeking to amend the Specific Plan. D. On June 2, 2003, the City Council and Tustin Community Redevelopment Agency (the "Agency") adopted the MCAS Tustin Redevelopment Plan (the "Redevelopment Plan"). To assist in implementation of the Redevelopment Plan, the Agency and City of Tustin also adopted a five year implementation plan (the "Implementation Plan") pursuant to Section 33490 of the Redevelopment Law as part of the adoption of the Redevelopment Plan; E. The City of Tustin and Tustin Community Redevelopment Agency are now engaged in the implementation of the Reuse Plan, Specific Plan and Redevelopment Plan. F Pursuant to an extensive developer selection process, Tustin Legacy Community Partners (the "Developer") was selected to develop the master development site at Tustin Legacy (the "Property"). On November 1, 2003, the City and the Developer entered into an Exclusive Agreement to Negotiate (as the same may be amended from time to time, the "ENA") with the objective of reaching agreement on the terms of a Disposition and Development Agreement. G. In furtherance of the Reuse Plan, the Specific Plan, and the Redevelopment Plan, the City desires to cause the development of the property of a high quality mixed use development, consisting of approximately 2,105 dwelling units; including 453 units at Affordable prices at below market rates, up to 6,739,042 square feet of non- residential space to include approximately 494,604 square feet of retail space, 4,724,324 square feet of office space, approximately 627,046 square feet of industrial space, an aggregate of 500 hotel rooms, approximately 55,000 square feet of theaters and other specialized uses, approximately 299,074 square feet on the Hangar 29 Parcel, and certain Tustin Legacy Backbone Infrastructure, Local Infrastructure, and appurtenant improvements (collectively the "Project"). H. In its current condition, the Property is a blighting influence on the MCAS Tustin Redevelopment Project Area (the "Redevelopment Project Area"), and the Project will remove this blighting influence and provide a high quality mixed use development. I. The public improvements contemplated for the Project; including the requirement of construction of the Tustin Legacy Backbone Infrastructure Resolution No. 06-42 Page 2 of 6 and the Developer's fair share contribution to be such a benefit to the Redevelopment Project Area or the immediate vicinity in which the Project is located. J. It is the City's desire to effectuate development of the project through the sale, leasing, and development of such property in accordance with a Disposition and Development Agreement, all in conformance with Governmental Requirements and in substantially the form on file with City Clerk, pursuant to which, among other matters: 1) The City will sell the property to the Developer for a purchase price of not less than $236,000,000, plus potential additional profit participation as set forth in the DDA; and 2) The Developer will develop the Project on the Property in accordance with the DDA; and K. Whereas, in considering approval of the DDA, the City 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 a Addendum to the Final Joint Environmental Statement/Environmental Impact Report (FEIS/EIR) for the Reuse and Disposal of MCAS Tustin. L. City Staff has prepared, and the City Council has reviewed and approved, a staff report in connection with the DDA setting forth: 1) A copy of the proposed Disposition and Development Agreement. 2) A summary which describes and specifies all of the following: a) The Disposition by the City of the property to the Developer, and the development of the development on the Property by the Developer b) The related physical actions to be undertaken and achieved by the DDA. The estimated value of the interests to be sold to the Developer, determined at the highest and best uses permitted under the plan; and c) The estimated value of the interests to be sold, determined at the uses and with the conditions, covenants, and development costs required by the sale; and Resolution No. 06-42 Page 3 of6 d) An explanation of why the sale of the property will assist in the elimination of blight with reference to all supporting facts and materials needed upon making this explanation. M. The DDA contains all of the terms, covenants, conditions, restrictions, obligations, and provisions required by state and local law; and N. The City Council has duly considered all of the terms and conditions of the DDA, and believes that the Project is in the best interests of the City of Tustin and the health, safety, morals, and welfare of its residents, and is in accord with the public purposes and provisions of applicable state and local law and requirements; and II. The City Council hereby finds and determines, based upon substantial evidence provided in the record before it that: A. The foregoing recitals are true and correct. B. The City Council has received and heard all oral and written testimony to the proposed DDA and to the Developer's proposed development of the Property in connection therewith, and to any other matters pertaining to this transaction. C. The sale of the Property by the City of Tustin will assist in the elimination of blight in the Redevelopment Project area, and is consistent with the Implementation Plan adopted by the City of Tustin and Agency for the Redevelopment Plan, will provide significant job generating uses furthering the City and Agency's economic development goals and be consistent with the Conveyance Agreement, and will provide needed retail services and open space and recreational opportunities to the community, and will assist in the California affordable housing crisis by providing 453 units of additional affordable housing. D. The DDA provides for disposition of the Property to the Developer only if certain predisposition conditions are met. E. The consideration for the City's disposition of the Property, pursuant to the DDA, is not less than the fair market value of the Property in accordance with conditions, covenants, and development costs required by the DDA and that the sale of the Property is for more than its fair market price as determined by an independent appraisal. This finding is based on the facts and analysis set forth in the Recitals and supporting documents, which may be briefly summarized as follows: 1) The Fair Market Value of the Property based on an independent appraisal has been determined to be in a range of between Resolution No. 06-42 Page 4 of 6 $194,000,000 to $216,000,000. The appraiser has also determined that there is a negative land value of approximately $152 million dollars associated with development of Phase 1 due to costs required for backbone infrastructure that would be incurred during that phase, with any positive value for the overall project accruing only with development of Phase 2 and 3 of the Project. 2) The purchase price to be paid for the Property by Developer under the DDA is $236,000,000 with $150,000,000 to be paid with the Phase 2 conveyance, and $86,000,000 to be paid in the Phase 3 conveyance. F. The foregoing findings are based upon the record of the public meeting on the DDA. III. The DDA, a copy of which is on file with the Office of the City Clerk, is hereby approved subject to any non-substantive modifications as may be determined necessary as may be approved by the City Manager's office, or as recommended by the City's special counsel of City Attorney. IV. The City Manager and Assistant City Manager are also hereby authorized to take such actions, and execute such documents and instruments, as deemed necessary or desirable to implement the terms of the DDA and all attachments to the DDA including the Memorandum of DDA, Ground Leases, Bill of Sales, Quitclaim Deed, any necessary Subordination Agreements, any Assignment and Assumption Agreements, and Certificates of Compliance, any Estoppels, any Special Restrictions, and other documents as necessary and, upon satisfaction of all conditions and obligations of the Developer thereto and pursuant to the DDA, to transfer the subject site in phases to the Developer. PASSED, APPROVED, AND ADOPTED at a regular meeting of the Tustin Community Redevelopment Agency held on the 3rd day of April, 2006. ~ ERT, ~cO~~ PAMELA STOKER, City Clerk Resolution No. 06-42 Page 5 of 6 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 06-42 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 3rd day of April, 2006 by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: ~ca~ PAMELA STOKE , City Clerk DAVERT , HAGEN , AMANTE , BONE , KAWASHIMA NONE NONE NONE (5 ) (0) (0) (0) Resolution No. 06-42 Page 6 of6