HomeMy WebLinkAbout12 3RD AMEND-TUSTIN LEGACY DDA-04-02 09-18-06AGENDA REPORT
Agenda Item
Reviewed:
City Manager
Finance Director
12
MEETING DATE: SEPTEMBER 18, 2006
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: CHRISTINE A. SHINGLETON, ASSISTANT CITY MANAGER
SUBJECT: THIRD AMENDMENT TO TUSTIN LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT (DDA 04-02) (RETAIL DEVELOPMENT)
SUMMARY:
City Council authorization is requested for approval of a Third Amendment to the Tustin
Legacy DDA 04-02 between the City of Tustin and Vestar/Kimco Tustin, L.P. (the
"Developer").
RECOMMENDATION:
It is recommended that the -City Council:
1. Adopt Resolution No. 06-116 finding that the Third Amendment to DDA 04-02 is
within the scope of the Final Joint Program EIS/EIR for the Reuse and Disposal of
MCAS Tustin and no additional analysis, action or document is required under CEQA.
2. Subject to any non-substantive modifications as may be determined necessary by the
City's Tustin Legacy Special Counsel, approve and authorize the City Manager, or
Assistant City Manager to execute the Third Amendment to DDA 04-02 between the
City of Tustin and Vestar/Kimco Tustin, L.P. and to carry out all actions necessary to
implement the amendment including execution of all related documents.
FISCAL IMPACT:
Provisions of the Third Amendment Tustin Legacy DDA 04-02 will result in expediting
the transfer of seven parcels of land (Lots 17,20,27,21,24, 28,and 29 of Tract 16695)
from the City to the Developer, thereby replenishing the Tustin Legacy Enterprise Fund
with additional land sale revenues earlier rather than later. As a result of the
Amendment, the City can expect to receive approximately $8.5 million dollars in land
sale revenues. In addition, the Amendment will permit the Developer to expedite its
Page 2
ownd transfer of land to two key tenants proposed in their project, the "District at Tustin
Legacy", Lowe's and Costco. The City could also subsequently expect to transfer
seven additional parcels of land (Lots 3, 13, 15, 22, 23, 25, and 26 of Tract 16695)
currently leased to the City by the Navy under a Lease in Furtherance of Conveyance
upon completion of environmental remediation.
BACKGROUND:
The City Council previously approved DDA 04-02 which was executed on July 20, 2004,
and the First Amendment to the DDA on March 25, 2005 and the Second Amendment
to the DDA dated June 8, 2005 (collectively, the "Original DDA"). An Amendment is not
necessary to permit two major tenants, Lowe's and Costco, to move forward with
vertical improvements in a more timely manner-
Pursuant to the Original DDA, partial conveyance to the Developer of certain parcels
identified as Developer Sublease Parcels and Developer Fee Parcels was not originally
envisioned based on the Navy's original environmental remediation schedule for the
Developer Sublease Parcels. In other words, the Developer was not required to accept
title to any portion of Developer Sublease Parcels and certain Developer Fee Parcels
until all Sublease Parcels were ready to be quitclaimed to the Developer. At such time,
the Original DDA required the Developer to accept title to three additional Developer
Fee Parcels (Lots 17, 20, and 27) which along with the Developer Sublease Parcels
would be utilized to assemble sites for Costco and Lowe's. The Navy subsequently
modified its remediations schedule and has recently quitclaimed a portion of the
Developer Sublease Parcels to the City. Developer is desirous or accepting title to only
a portion of the list of Developer Sublease Parcels and certain Developer Fee Parcels in
order to facilitate expediting the Costco and Lowe's developments.
The Third Amendment has been reviewed by the Developer and is acceptable.
However, the City and Developer have agreed on deferring actual execution subject to
the following contigencies:
1. Execution of Purchase and Sale Agreements between the Developer and Costco
and Lowe's, and any other related documents identified in the DDA including Non-
disturbance and Attonementet Agreements, and Reacquisition Rights Agreements.
2. An amendment to permit annexation of remaining Developer Sublease Parcels still
owned by the Navy to the CC&R's for the project, or equivalent assurances from the
Navy that shopping center parking lot development on the remaining Developer
Sublease Parcels to support required parking areas for both Costco and Lowe's will not
be disturbed by the Navy.
3. City approval of certain Lot Line Adjustments to create more logical boundaries for
the Costco and Lowe's sites.
Page 3
City staff will be available to answer any questions regarding either the First
Amendment to DDA 04-02 or the Agreement.
Attachments
(1) Resolution 06-116
(2) Third Amendment to DDA 04-02
Christine A. Shingleto
Assistant City Manager
RESOLUTION NO. 06-116
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, FINDING THAT PURSUANT TO PUBLIC
RESOURCES CODE SECTION 2116 AND SECTION 15168(c) OF
STATE CEQA GUIDELINES THE PROJECT IS WITHIN THE
SCOPE OF THE FINAL JOINT PROGRAM MCAS
ENVIRONMENTAL IMPACT STATEMENT/ENVIRONMENTAL
IMPACT REPORT (MCAS TUSTIN EIS/EIR) AND NO NEW
ENVIRONMENTAL DOCUMENT IS REQUIRED; APPLICABLE
MITIGATION MEASURES HAVE BEEN INCORPORATED INTO
THE PROJECT
The City Council of the City of Tustin does hereby resolve as follows:
I. The City Council finds and determines as follows:
A. That Third Amendment No. 1 to ,DDA 04-02 is considered a "Project"
pursuant to the terms of the California Environmental Quality Act;
B. That the Marine Corps Air Station (MCAS) Tustin Reuse Plan/Specific
Plan Final Environmental Impact StatemenUEnvironmental Impact Report
was certified by the City Council on January 16, 2001, and subsequently
amended by supplement and addendum (collectively the FEIS/EIR). The
FEIS/EIR considered the potential impacts associated with development
on the former Marine Corps Air Station, Tustin, including development of
commercial uses within Planning Areas 16, 17 and 19 of the MCAS Reuse
Plan (Specific Plan).
C. That an initial study checklist was prepared to evaluate the potential
impacts associated with the Project. The initial study checklist
demonstrates that all potential impacts of the Project were addressed by
the certified FEIS/EIR, no additional impacts have been identified, and all
applicable mitigation measures in the FEIS/EIR will be implemented
through the Mitigation Monitoring Program for the original DDA 04-02 and
the City entitlement conditions of approval already approved for the
development site.
II. The City Council hereby finds that the Third Amendment to DDA 04-02 for
this Project is within the scope of the previously appro'(ed MCAS Tustin Final
Program EIS/EIR previously certified, that the environmental effects of the
Project are within the scope of the MCAS Tustin FEIS/EIR and were fully
examined in the MCAS Tustin FEIS/EIR; that no substantial changes are
proposed in the Project or have occurred with respect to circumstances under
which the Project is being undertaken since certification of the MCAS Tustin
FEIS/EIR; no new information has become available since the certification of
Resolution No. 06-116
Page 1 of 2
III. the MCAS Tustin FEIS/EIR, and pursuant to Public Resources Code Section
2116 and the requirements of CEQA regulations promulgated with respect
thereto including Title 14 California Code of Regulations Sections 15162 and
15168(c), no additional environmental analysis, action or document is
required by the CEQA.
PASSED AND ADOPTED at a regular meeting of the Tustin City Council held
on the 18th day of September, 2006.
DOUG DAVERT
Mayor
PAMELA STOKER
City Clerk
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. 06-116 was
dul~ passed and adopted at a regular meeting of the Tustin City Council, held on the
18t day of September, 2006, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
CO'UNCILMEMBER ABSENT:
PAMELA STOKER
City Clerk
Resolution No. 06-116
Page 2 of2
THIRD AMENDMENT TO
TUSTIN LEGACY
DISPOSITION AND DEVELOPMENT AGREEMENT
(RETAIL DEVELOPMENT)
This THIRD AMENDMENT TO TUSTIN LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT (RETAIL DEVELOPMENT) (this "Amendment") is entered
into as of September 4,2005 (the "Effective Date") by and between the CITY OF TUSTIN (as
more fully defined in Section 1.4.1 of the Original DDA (as defined below), ("CITY") and
VESTARlKIMCO TUSTIN, L.P., a California limited partnership (as more fully defined in
Section 1.4.2 of the Original DDA ("Developer"). The City and the Developer are sometimes
referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
A. City and the Developer entered into that certain Tustin Legacy Disposition and
Development Agreement (Retail Development) dated as of July 20, 2004, as amended by that
certain First Amendment to Tustin Legacy Disposition and Development Agreement (Retail
Development) dated as of March 25,2005, that certain Second Amendment to the Tustin Legacy
Disposition and Development Agreement (Retail Development) dated as of June 8, 2005
(collectively, the "Original DDA")) pursuant to which, among other things, the City agreed to
sell and/or lease or sublease, and the Developer agreed to purchase and/or lease or sublease, the
Property (as defined in the Original DDA) and the Parties agreed to a scope of development for
the Property. Initially capitalized terms not defined herein shall have the respective meanings
assigned to such terms in the Original DDA.
B. Whereas pursuant to the Original DDA, partial conveyance to the Developer of
certain Developer Sublease Parcels was not originally envisioned based on the Department of the
Navy's original remediation schedule for Developer Sublease Parcels. The Navy has
subsequently changed the remediation schedule and has transmitted quitclaim deeds for portions
of the Developer Sublease Parcels to the City. Modification of the DDA will permit two
anticipated major tenants, Costco and Lowe's, to move forward with vertical improvements in a
more timely manner.
C. City and the Developer each desire to amend the Original DDA as set forth
below. The Original DDA as amended by this Amendment is referred to herein as the
"Agreement. "
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, which are hereby
incorporated in the operative provisions of this Amendment by this reference and other good and
valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Parties
further agree as follows:
1. Modification to Subsequent Purchase Price. Section 4.2.2 (b) (ii) is hereby
deleted it its entirety and replaced with the following:
18405:6524817.1 1
"(ii) For each of Developer Fee Property C and Developer Fee Parcel D,
Developer Sublease Property C, Developer Sublease Property D, Developer
Sublease Property E and Developer Sublease Property F, an amount equal to the
product of $8.50 per square foot multiplied by the total net land square footage of
each corresponding Developer Parcel after deducting therefrom any Right of Way
Parcels or other public roadway dedications within the land area of such
Developer Parcel reasonably determined by the City within the time period and
pursuant to the methodology set forth in clause (a)(ii) above, totaling Nine
Million Eight Hundred Ten Thousand Nine Hundred Nineteen and 50/100 Dollars
($9,810,919.50)."
2. Modification to Conveyances and Scheduline of Subsequent Closines.
18405:6524817.1
2.1 Section 1.2.4 of the Original DDA is hereby deleted in its entirety and
replaced with the following:
"1.2.4 The "Developer Sublease Parcels" are comprised of (a) "Developer
Sublease Parcel A," (b) "Developer Sublease Parcel B," (c) "Developer
Sublease Parcel C," (d) "Developer Sublease Parcel D," (e) "Developer
Sublease Parcel E," and (f) "Developer Sublease Parcel F," each. of which
are legally described on Attachment No. 2A and depicted on Attachment
No. 2B to this Agreement."
2.2 Section 4.1.1 of the Original DDA is hereby deleted in its entirety and
replaced with the following:
"4.1.1 Exclusions from Property. The "Property" consists of (a) the
Developer Fee Parcels, together with (i) all existing improvements, if any,
presently located on the Developer Fee Parcels, and (ii) all Personal
Property associated with the foregoing (collectively, the "Developer Fee
Property" and when referring to Developer Fee Parcel A through
Developer Fee Parcel D individually, "Developer Fee Property A"
through "Developer Fee Property D", respectively) (b) the Developer
Sublease Parcels, together with (i) all existing improvements, if any,
presently located on the Developer Sublease Parcels, and (ii) all Personal
Property associated with the foregoing (collectively, the "Developer
Sublease Property" and when referring to Developer Sublease Parcels A
through F individually, "Developer Sublease Property A" through
"Developer Sublease Property F", respectively), subject in each case to
all Permitted Exceptions and such other title exceptions as may be
applicable to the Developer Parcels, or anyone of them, and provided,
further, that the terms "Property", "Developer Fee Property" and
"Developer Sublease Property" shall exclude the following rights and
interest which shall be explicitly reserved to the City:
(a) Any and all oil, oil rights, minerals, mineral rights, natural gas,
natural gas rights and other hydrocarbon by whatsoever name
2
18405:65248 I 7. I
known, geothermal steam and rights thereto and all products
derived from any of the foregoing, that may be within or under the
Developer Parcels together with the perpetual right of drilling,
mining, exploring for and storing in and removing the same from
the Developer Parcels or any other land, including the right to
whipstock or directionally drill and mine from lands other than the
Developer Parcels, oil or gas wells, tunnels and shafts into, through
or across the subsurface of the Developer Parcels and to bottom
such whip stocked or directionally drilled wells, tunnels and shafts
under and beneath or beyond the exterior limits thereof, and to re-
drill, re-tunnel, equip, maintain, repair, deepen and operate any
such well or mines; but without, however, the right to drill, mine,
store, explore or operate through the surface of the Developer
Parcels or otherwise to materially affect the use or operation of the
Developer Parcels as anticipated by this Agreement; and
(b) Any and all water, water rights or interests therein appurtenant or
relating to the Developer Par~els or owned or used by the City in
connection with or with respect to the Developer Parcels no matter
how acquired by the City, whether such water rights shall be
riparian, overlying, appropriative, littoral, percolating, prescriptive,
adjudicated, statutory or contractual, together with the perpetual
right and power to explore, drill, re-drill and remove the same from
or in the Developer Parcels, to store the same beneath the surface
of the Developer Parcels and to divert or otherwise utilize such
water, rights or interests on any other property owned or leased by
the City; but without, however, any right to enter upon or use the
surface of the Developer Parcels in the exercise of such rights or
otherwise to materially affect the use or operation of the Developer
Parcels as anticipated by this Agreement."
2.3 Section 4.1.3 (b) of the Original DDA is hereby deleted in its entirety
and replaced with the following: .
"(b) At one or more Subsequent Closings and in accordance with the
terms of Section 7.7, the following conveyances shall occur:
i. Promptly following conveyance by the Navy to the City of
each of Developer Sublease Parcel A and/or Developer
Sublease Parcel B, the City shall convey to Developer in
fee by Quitclaim Deed the corresponding Developer
Sublease Property;
ii. Promptly following conveyance by the Navy to the City of
Developer Sublease Parcel C, the City shall convey to
Developer in fee by Quitclaim Deed the corresponding
Developer Sublease Property.
3
18405:6524817.1
iii. Promptly following conveyance by the Navy to the City of
Developer Sublease Parcel D, the City shall convey to
Developer in fee by Quitclaim Deed the corresponding
Developer Sublease Property and Developer Fee Property
D.
iv. Promptly following conveyance by the Navy to the City of
Developer Sublease Parcel E, the City shall convey to
Developer in fee by Quitclaim Deed the corresponding
Developer Sublease Property.
v. Promptly following conveyance by the Navy to the City of
Developer Sublease Parcel F, the City shall convey to
Developer in fee by Quitclaim Deed, the corresponding
Developer Sublease Parcel and Developer Fee Property C.
2.4 Section 7.7.1 of the Original DDA is hereby deleted in its entirety and
replaced with the following:
"7.7.1 Scheduling of Subsequent Closings. No later than thirty (30)
calendar days after the City has received a quitclaim from the Federal
Government conveying:
(a) Developer Sublease Parcels A and B,
(b) Developer Sublease Parcel C,
(c) Developer Sublease Parcel D,
(d) Developer Sublease Parcel E, or
(e) Developer Sublease Parcel F;
the City shall notify Developer of its acquisition and shall establish a date
for close of escrow with respect to such acquired Developer Sublease
Parcels and associated Developer Fee Parcels as described in Section 4.1.3
(b), to Developer, which date shall be thirty (30) calendar days following
the date of the City's notice (such date a "Subsequent Closing Date" and
each such Closing a "Subsequent Closing"); provided, however, that
Developer may, by written notice to the City and Escrow Holder at least
five (5) Business Days prior to a given Subsequent Closing Date, extend
such Subsequent Closing Date for up to six (6) months in the event that
Developer was to have Transferred all or a portion of the applicable Lease
Parcels to an approved End User concurrently with or immediately
following such Subsequent Closing, and such intended End User has
defaulted under or is otherwise unable to fulfill its obligations under the
proposed Pad Transfer documents, provided, further, that such proposed
Pad Transferee default or inability to perform was not caused by an act,
4
omission or default of Developer. Each Subsequent Closing shall take
place upon the terms and subject to the conditions set forth below.
The property conveyances at each Subsequent Closing shall be as follows:
i. Upon acquisition by the City of fee title to Developer
Sublease Parcels A and B, and satisfaction by Developer of
the Closing Conditions set forth below for the benefit of the
City, the City shall convey Developer Sublease Property A
and B to Developer by Quitclaim Deed.
ii. Upon acquisition by the City of fee title to Developer
Sublease Parcel C and satisfaction by Developer with the
Closing Conditions set forth below for the benefit of the
City, the City shall convey Developer Sublease Property C.
iii. Upon acquisition by the City of fee title to Developer
Sublease Parcel D and satisfaction by Developer with the
Closing Conditions set forth below for the benefit of the
City, the City shall convey Developer Sublease Property D
to Developer by Quitclaim Deed, together with Developer
Fee Property D.
iv. Upon acquisition by the City of fee title to Developer
Sublease Parcel E and satisfaction by Developer with the
Closing Conditions set forth below for the benefit of the
City, the City shall convey Developer Sublease Property E
to Developer by Quitclaim Deed.
v. Upon acquisition by the City of fee title to Developer
Sublease Parcel F and satisfaction by Developer with
Closing Conditions set forth below for the benefit of the
City, the City shall convey to Developer Sublease Property
F to Developer by Quitclaim Deed, together with
Developer Fee Property C."
3. Modifications of Lee:al Descriptions. In order to reflect the Developer Sublease
Parcels referenced in Sections 1.2.4. 4.1.1. 4.1.3 and 7.7.1 as intended, the
following substitutions to the legal descriptions of Developer Sublease Parcels
shall be made:
18405:6524817.1
(a) Attachment No. 2A to the Original DDA is hereby deleted in its
entirety and a New Attachment No. 2A, in form attached hereto as
Schedule 5, is substituted in its place.
(b) Attachment No. 2B to the Original DDA is hereby deleted in its
entirety and a New Attachment No. 2B, in form attached hereto as
Schedule 6, is substituted in its place.
5
18405 :6524817.1
4. Miscellaneous
4.1 Agreement Ratified. Except as specifically amended or modified herein,
each and every term, covenant and condition of the Original DDA as
amended is hereby ratified and shall remain in full force and effect. Each
and every reference to the "Agreement" in the Original DDA shall be
deemed to refer to the Original DDA as amended by this Amendment.
4.2 Binding Agreement. This Amendment shall be binding upon and inure to
the benefit of the parties hereto, their legal representatives, successors and
permitted assigns.
4.3 Governing Law. This instrument shall be interpreted and construed in
accordance with the laws of the State of California.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
6
IN WITNESS WHEREOF, City and the Developer have executed this Amendment as of the date
first set forth above.
City of Tustin, California
By:
William Huston, City Manager
ATTEST:
By:
Pamela Stoker
City Clerk
Dated:
APPROVED AS TO FORM
Special Counsel for the City
Steefel, Levitt & Weiss
A Professional Corporation
By:
Clayton B. Gantz
Vestar/Kimco Tustin, L.P.
a California limited partnership
By: Vestar California XXX, L.L.C.,
an Arizona limited liability company
Its: General Partner
By:
Name:
Title: Manager
18405:6524817.1
7
SCHEDULE 5
REVISED ATTACHMENT NO. 2A
LEGAL DESCRIPTION OF DEVELOPER SUBLEASE PARCEL A, DEVELOPER
SUBLEASE PARCEL B, DEVELOPER SUBLEASE PARCEL C, DEVELOPER
SUBLEASE PARCEL D, DEVELOPER SUBLEASE PARCEL E, AND DEVELOPER
SUBLEASE PARCEL F .
Developer Sublease Parcel A and Developer Sublease Parcel B
Lot 14 of Tract Map 16695, located in the City of Tustin, County of Orange, State of California,
recorded in Book 886, Pages 1 through 9, Official Records of Orange County, California.
Developer Sublease Parcel C
Lots 3, 13,22 and 23 of Tract Map 16695, located in the City of Tustin, County of Orange, State
of California, recorded in Book 866, Pages 1 through 9, Official Records of Orange County,
California.
Developer Sublease Parcel D
Lots 24, 28 and 29 of Tract Map 16695, located in the City Tustin, County of Orange, State of
California, recorded in Book 866, Pages 1 through 9, Official Records of Orange County,
California.
Developer Sublease Parcel E
Lots 25 and 26 of Tract Map 16695, located in the City of Tustin, County of Orange, State of
California, recorded in Book 866, Pages 1 through 9, Official Records of Orange County,
California.
Developer Sublease Parcel F
Lot 21 of Tract Map 16695, located in the City of Tustin, County of Orange, State of Cali fomi a,
recorded in Book 866, Pages 1 through 9, Official Records of Orange County, California.
18405 :6524817.1
8
SCHEDULE 6
REVISED ATTACHMENT NO. 2B
DEPICTION OF DEVELOPER SUBLEASE PARCEL A, DEVELOPER SUBLEASE
PARCEL B, DEVELOPER SUBLEASE PARCEL C, DEVELOPER SUBLEASE
PARCEL D, DEVELOPER SUBLEASE PARCEL E, AND DEVELOPER SUBLEASE
PARCEL F
18405:6524817.1
9
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LEGEND
SUBLEASE PARCEL A
SUBLEASE PARCEL B
SUBLEASE PARCEL C
SUBLEASE PARCEL D
SUBLEASE PARCEL E
SUBLEASE PARCEL F
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TRACT 16695 LOT EXHIBIT
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ATTACHMENT 2B
DrPICnON OF DEVELOPER SUBLEASE
PARCELS A-F
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8175 EAST KAISER BOUlEVARD
ANAHEIit HIU.S. CA 92808 (714) 88&-8880