Loading...
HomeMy WebLinkAboutRDA 03 AMEND DDA W/PROSP VLG 12-04-06 AGENDA REPORT Agenda Item RDA3 Reviewed: City Manager Finance Director N/A MEETING DATE: DECEMBER 4,2006 TO: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR FROM: CHRISTINE A. SHINGLETON, ASSISTANT CITY MANAGER SUBJECT: AMENDMENT TO DISPOSITION AND DEVELOPMENT AREEMENT WITH PROSPECT VILLAGE L.P. SUMMARY Minor modifications to the Disposition and Development Agreement (DDA) proposed to ensure timely expenditure of Federal Community Development Block Grant (CDBG) funds. RECOMMENDATION That the City Council approves and authorizes the City Manager's execution of the First Amendment to the DDA with Prospect Village L.P., subject to any non-substantive modifications as may be determined necessary by the City Attorney. FISCAL IMPACT No additional fiscal impacts are anticipated beyond those identified on the original DDA. BACKGROUND The Redevelopment Agency entered into a DDA with Prospect Village L.P. on June 21, 2004 (the "original DDA"). The original ODA identified a level of Agency financial assistance in the amount of $880,000 for construction of certain public alley improvements (Prospect Lane) and construction of half-width improvements on Prospect Avenue between Main Street and Third Street. The sole available funding source for said financial assistance was Federal Community Block Grant Funds (CDBG). The original DDA tracked completion of these improvements to the issuance and progress of other project improvements commenced under building permits issued by the Community Development Department. With building permit extensions granted to the developer for the construction of other project improvements, the City is now at risk of losing CDBG funds for the anticipated public improvements if they are not spent City Council Report First Amendment DDA-Prospect Village December 4, 2006 Page 2 before the end of April 2007. Appropriately, the applicant has agreed to minor modifications to original DDA as necessary to ensure more timely expenditure of the CDBG funds by the developer. The City Council previously approved Resolution No. 04-45 certifying the Prospect Village Project Final Environmental Impact Report ("FEIR") pursuant to the California Environmental Quality Act, and adopting Findings of Fact, a Statement of Overriding Consideration and a Monitoring Program for the Project. While the proposed First Amendment to the DDA, does not affect the original FEIR analysis, the Community Development Department has determined that the proposed action is not subject to the California Environmental Quality Act (CEQA) pursuant to Title 14, California Code of Regulations, Section 15060(c)(2) since the activity will not result in a direct or foreseeable indirect physical change in the environment and Sections 15060(c)(3) since the activity is not a project as defined by Section 15378 because it has no potential for resulting in a physical change to the environment, directly or indirectly. This amendment continues to be consistent with the original DDA and are clarifications related to implementation. The First Amendment to the DDA is attached for Agency approval. Christine A. Shlngleton Assistant City Manager Attachment: First Amendment to DDA S:\RDA\CC report\Dec. 4, 2006, First Amendment to DDA Prospect Village.doc FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT This FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (this "Amendment") is entered into as of December 4, 2006 (the "Effective Date") by and between the TUSTIN COMMUNITY REDVELOPMENT AGENCY (as more fully defined in Section 1.4.1 of the Original DDA (as defined below), ("AGENCY") and PROSPECT VILLAGE L.P., a California limited partnership (as 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 June 21,2004 (the "Original DDA") pursuant to which, among other things, the City agreed to sell and the Developer agreed to purchase a Developer Parcel. Subject to Entitlements, Developer also agreed to develop and construct a Project and the Parties agreed to a scope of development for the Project. Initially capitalized terms not defined herein shall have the respective meanings assigned to such terms in the Original DDA. B. The federal Department of Housing and Community Development have recently informed the Agency that certain funds to be provided for Agency Assistance in construction of certain Public Improvements related to the Project would not be available ifnot fully drawn down and expended by a specified date. Modification of the DDA will require the Developer to fully expend such Agency Assistance funds by April 6, 2007, simplify the Payment Request process for Developer receiving disbursements of Agency Assistance and also expand the definition of Public Improvement Costs. 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 "Agree men t." 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 Agency Assistance Section 4.3 of the Original DDA is hereby deleted it its entirety and replaced with the following: 1 "4.3 A2:encv Assistance. Agency Assistance shall be provided to Developer in the maximum amount of eight hundred eighty thousand dollars ($880,000) to fund or assist in the construction of Public Improvements which shall be considered a "public work" pursuant to California Labor Code Section 1720 (c ) (2), provided that the maximum authorized amount of disbursement to Developer shall be up to the amount that Developer can fully expend, request payment for and receive Agency and City Engineer approval for disbursements prior to April 6, 2007. Failure of Developer to fully expend, submit Payment Requests for and receive Agency and City Engineer approval for disbursements up to the maximum amount of assistance authorized for publicly bid Public Improvement Costs shall not relieve developer of the obligation to complete all Public Improvement required pursuant to the DDA, and more specifically, the Scope of Development (Attachment 7). Disbursements of the Public Improvement Funding shall be made in accordance with Attachment 8, "Method of Financing". " 2. Modification to Attachment 8 Method of Financing 2.1 Section 1.2.6 of the Original DDA is hereby deleted in its entirety and replaced with the following: "1.2.6 "Public Improvement Cost" shall be defined to include actual, reasonable and necessary costs incurred in connection with the construction of Public Improvements located outside the Developer Parcel within the public right-of-way, as delineated on the Project Plans (Exhibit A of Attachment 7 entitled "Scope of Development"), including the Alley Dedication Area (Prospect Lane) improvements, the half-width improvements to Prospect Avenue and the enriched paving for sidewalks around the Project, as more specifically described in Section 3.2 and 3.3 below, and which have been included and approved by the City Engineer for inclusion in a public bid process. Actual costs means with respect to certain Public Improvements: (a) the construction costs of such improvements; (b) Developer's actual, reasonable cost of professional services directly related to construction of said improvements, including engineering and similar services related to the design and preparation of plans; (c) Developer's actual, reasonable cost of construction management services, which costs in total shall not exceed 3% of the engineer's estimated construction costs for any publicly bid Public Improvements; (d) Developer's actual, reasonable cost of contract services, including (i) construction services fees in an amount equal to the sum of costs of the amount of fees actually paid by Developer to governmental agencies in order to obtain services, licenses or other necessary governmental approvals and review for such improvements; (ii) inspection, construction staking and materials testing and iii) payment bonds, performance bonds or maintenance bonds and insurance for Public Improvements publicly bid; all as specified in a Payment Request that has been reviewed and approved by the Agency and City Engineer pursuant to Section 4.1 of this Attachment 8; provided, however, that no item of cost relating to said improvements shall be included in more than one category of cost specified herein and each item of cost shall include only amounts actually paid by Developer to third parties and shall not include overhead or other internal expenses of Developer " 2 2.2 Article 3 entitled "Agency Assistance" of Attachment 8 of the Original DDA is hereby deleted in its entirety and replaced with the following: "3.1 Amount of Assistance. Subject to the satisfaction of conditions precedent as described in Section 7.3 of the DDA, the Agency shall provide up to a maximum amount of Eight Hundred Eighty Thousand Dollars ($880,000) to assist Developer in construction of certain Public Improvements publicly bid and funded from federal Community Development Grant Funds obtained in federal fiscal years 2003-04 and 2004-05, provided that the Developer can fully expend specific Public Improvements assistance funds identified in Section 3.2 and 3.3 below, as evidenced by Payment Requests approved by the Agency and City prior to April 6, 2007. Failure of Developer to fully expend and submit Payment Requests up to the maximum amount of assistance authorized by this Section for publicly bid Public Improvement Costs shall not relieve developer of the obligation to complete all Public Improvement required pursuant to the DDA, and more specifically the Scope of Development (Attachment 7). The amount of any assistance to be provided to Developer shall be disbursed in accordance with the following: 3.2 Public Allev Improvements and Other Improvements. Agency shall disburse up to Three Hundred Thousand Dollars ($330,000) based on construction draws approved by the Agency and City Engineer for Public Improvement Costs incurred in conjunction with the construction of the public alley improvements ("Prospect Lane") between Main and Third Street and the other improvements within the public right-of-way around the site that Developer publicly bids (as more specifically described in the Scope of Development (Attachment No.7). Payment requests will come from the Developer and be in the form described in Section 4 below. 3.3 Prospect Avenue Improvements. Agency shall disburse up to Five Hundred Fifty Thousand Dollars (($550,000) based on construction draws approved by the Agency and City Engineer for Public Improvement Costs incurred in the construction of the Prospect Avenue half-width improvements between Main Street and Third Street that the Developer publicly bids (as more particularly described in the Scope of Development (Attachment 7). Payment request will come from Developer and be in the form described in Section 4 below." 2.3 Section 4.2 entitled "A2:encv Retention" of Attachment 8 of the Original DDA is deleted in its entirety. 2.4 Section 4.4 entitled "Retention Disbursement" of Attachment 8 of the Original DDA is deleted in its entirety. 3. Miscellaneous 3.1 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. 3 3.2 Binding Agreement. This Amendment shall be binding upon and inure to the benefit of the parties hereto, their legal representatives, successors and permitted assigns. 3.3 Governing Law. This instrument shall be interpreted and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, Agency and the Developer have executed this Amendment as of the date first set forth above. AGENCY: Tustin Community Redevelopment Agency By: William Huston, Executive Director Dated: APPROVED AS TO FORM WOODRUFF SPRADLIN & SMART By: Doug Holland, Agency Counsel DEVELOPER: Prospect Village, L.P., a California Limited Partnership Pelican- Tustin, LLC, a California Limited Liability Company, General and Managing Partner Dated: By: John Tillotson, Jr., Member By: 4 Daniel Howse, Member 5