CITY OF PALMDALE REPORT TO THE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM THE CITY MANAGER. DATE: March 6, 2013

CITY OF PALMDALE REPORT TO THE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM THE CITY MANAGER DATE: March 6, 2013 SUBJECT: Ordinance No. 1436, an Ordinance amending City Ranch Development Agreement Section 4.8 and 6.4, Fire Protection (Agreement No. A-4252) ISSUING DEPARTMENT: Planning SUMMARY Issues: Should the City Council adopt Ordinance No. 1436, modifying Sections 4.8 and 6.4 of the City Ranch Development Agreement to provide a funding mechanism for the remaining lots in Phase I for future fire station construction under Agreement No. A-4252? Recommendation: The Planning Commission adopted Resolution No. PC-2012-037 on December 13, 2012, recommending that the City Council approve Development Agreement Amendment 12-01. Therefore, it is recommended that the City Council approve the reading of ordinance No. 1436, hold a public hearing on said Ordinance, and after closing the public hearing, adopt Ordinance No. 1436. Fiscal lmract: If each of the 346 vacant lots remaining within Phase I of the Anaverde development (City Ranch Specific Plan) pay the $4,276 per unit mitigation fee, $1,479,496 will be collected by the City to be utilized for the future construction and equipping of a fire station. BACKGROUND On March 24, 1992, the City Council certified EIR 89-3 and adopted the City Ranch Specific Plan. The Specific Plan, which covers 1985 acres, established a blueprint for the future development of a maximum of 5200 dwelling units, four neighborhood parks,

Report to Mayor and City Council Ordinance No. 1436 March 6, 2013 Page 2 four school sites, one community park and supportive commercial uses. In addition, the specific plan and EIR identified a requirement for a fire station to serve the project areas. In May 1993, the developer of the City Ranch Specific Plan area and the City entered into a Development Agreement, which became effective on May 8, 1993. The Development Agreement included numerous exactions that would be of City-wide benefit. In exchange, the developer was assured of certain development rights for twenty years, until May 10, 2013. This item was originally noticed for the February 6, 2013, City Council meeting. Staff requested the item be continued to the March 6, 2013 City Council meeting to allow additional time for staff and the City Attorney's Office to work with the applicant to resolve outstanding issues related to the proposed agreement and Ordinance. Section 4.8 of the Development Agreement required the dedication of a site and the construction of a fire station to begin a the issuance of the 1000th dwelling unit located south and west of the California Aqueduct, to be completed within one year. At the completion of construction, the station is to be equipped with two new, fully equipped vehicles. The Development Agreement allowed for the timing of completion of the fire station to be modified with the agreement of the City and the Los Angeles County Fire Department. DISCUSSION Development Agreement Amendment 12-01 is an application by Highpointe Communities, Inc. proposing to amend the existing City Ranch Development Agreement (92-2). Section 4.8 "Fire Protection" of the Development Agreement would be amended to modify the timing of the fire station construction for the Anaverde development from the 1,000th unit located south and west of the California Aqueduct to the 2500 unit. The modification of the timing is being done with the approval of the Los Angeles County Fire Department and will modify the timing to be consistent with other fire station facility projects within County areas. Additionally, the remaining 346 lots within Phase 1 of the development would pay a fire mitigation fee of $4,276 per house, to provide funding to be used for the station construction prior to the 2,500 unit mitigating impacts to fire protection as outlined within the City Ranch Environmental Impact Report. Future phases of the development will not commence construction prior to the expiration of the

Report to Mayor and City Council Ordinance No. 1436 March 6, 2013 Page 3 current development agreement, and therefore, a new agreement to address fire station funding and construction will be required at a future time. Furthermore, Section 6.4 of the Development Agreement would be amended to list by lot and tract numbers the 346 lots which are the subject of this first amendment to DA 92-2 as having commenced "substantial work of improvement". This will ensure that the provisions of this first amendment to DA 92-2 for fire protection will be enforceable beyond the May 2013 expiration of DA 92-2. CONCLUSION City staff has evaluated the various issues pertaining tc Amendment and believes that this modification allows this Development Agreement for the issuance of additional building permits within the Anaverde development in an appropriate manner. The County of Los Angeles Fire Department has agreed tha t the modification of the timing and the amount of the mitigation fee is acceptable. Attachments 1. Ordinance No. 1436 2. Agreement No. A-4252 Submitted by: Reyiewed by:

CITY OF PALMDALE LOS ANGELES COUNTY, CALIFORNIA ORDINANCE NO. 1436 AN ORDINANCE OF THE OF THE CITY COUNCIL OF THE CITY OF PALMDALE, CALIFORNIA, ADOPTING FIRST AMENDMENT TO DEVELOPMENT AGREEMENT 92-2 FOR FIRE PROTECTION WITHIN PHASE 1 OF ANAVERDE, GENERALLY LOCATED SOUTH OF ELIZABETH LAKE ROAD, NORTH OF THE ALIGNMENT OF AVENUE S, WEST OF THE ALIGNMENT OF 2O STREET WEST AND EAST OF THE ALIGNMENT OF 4O STREET WEST (DA 92-2) THE CITY COUNCIL OF THE CITY OF PALMDALE DOES ORDAIN AS FOLLOWS: SECTION 1. Pursuant to Section 65865 of the California Government Code, Highpointe Communities, Inc. has filed an application requesting the approval of First Amendment to Development Agreement 92-2 (A-4252), described herein (hereinafter referred to as "Application"). SECTION 2. The Application, as contemplated, proposes to amend Section 4.8 of the City Ranch Development Agreement regarding FJje Protection. The first amendment to DA 92-2 would modify the timing of the fire tat4n1or the Anaverde development from the 1 000th unit located south and wetjafi1é California Aqueduct to the 2,500th unit located south and west of the CaIifqmkqeduct The remaining lots within Phase 1 of the development would pay a4fçstiation fee of $4,276 per single family residence, to ensure sufficient funds are avaiiáble at the 2,500th unit to construct the fire station and to mitigate impacts to fire protection as outlined within the City Ranch Environmental Impact Report. Furthermore, Section 6.4 of the agreement would be amended to list the 346 lots, by lot and tract number, as having commenced "substantial work of improvement", allowing the provisions of the proposed amendment to remain valid beyond the May 2013 expiration of Development Agreement 92-2. SECTION 3. The Application applies to a total of 346 lots located within Phase I of the Anaverde development; specifically to 49 lots within Tract 54116-01, 44 lots within Tract 54116-02, 52 lots within 54117-02 and 201 lots located within Tract 54117-03. All identified lots will be served by existing infrastructure, including rights-of-way, and have existing wet and dry utilities provided to the lots. SECTION 4. Pursuant to Settlement Agreement (A-3207) between New Anaverde, LLC and the City of Palmdale, entered into on June 15, 2010, those portions of the master development under the control of New Anaverde, LLC are no longer subject to Development Agreement 92-2 and any subsequent amendment thereto.

Ordinance No. 1436 Page 2 SECTION 5. On March 24, 1992, the City Council of the City of Palmdale certified EIR 89-3 (Resolution No. 92-58) and adopted a Mitigation Monitoring Program for the City Ranch Specific Plan, encompassing property within the subject Application. SECTION 6. An environmental Initial Study for the Application was completed on January 24, 2013, and found the project to be consistent with the project which was reviewed in EIR 89-3, as certified by the Palmdale City Council under Resolution No. 92-58. SECTION 7. Findings that certain environmental impacts will be mitigated and a Statement of Overriding Consideration contained in Resolution No. 92-58 approving the City Ranch Specific Plan apply to the project. SECTION 8. On December 13, 2012, the Planning Commission of the City of Palmdale adopted Resolution No. PC-2012-037 by a vote of 5-0, recommending approval of Development Agreement Amendment 12-01. Notice, of the time, place and purpose of the aforesaid meeting was duly noticed in accordance with California Government Code Sections 65090 and Public Resources Code Section 21092. SECTION 9. On February 6, 201 3, Dity Council conducted a duly noticed public hearing at the City Council Chamb&' 300 N. Sierra Highway, Suite B, Palmdale, CA 93550 and continued said hearing uitil the March 6, 2013, City Council meeting. Notice of the time, place, and purpose of the aforesaid meeting was duly noticed in accordance with California Government Code Section 65090 and Public Resource Code Section 21092 and concluded said hearing on that date. SECTION 10. On March 6, 2013, the City Council conducted a duly noticed public hearing on the Application, and concluded said hearing on that date. SECTION 11. Evidence, both written and oral, was duly presented to and considered by the City Council at the aforesaid March 6, 2013, public meeting, including but not limited to the staff report dated March 6, 2013, and public testimony. SECTION 12. Based upon substantial evidence presented to the City Council during the above-referenced March 6, 2013, public hearing, including public testimony, and written and oral staff report, the City Council specifically finds as follows: (a) The proposed Development Agreement Amendment 12-01 is consistent with the maps, goals, objectives and policies of the General Plan and the City Ranch Specific Plan as the amendment to the existing Development Agreement only modifies the timing of the fire station, with the approval of the Los Angeles County Fire

Ordinance No. 1436 Page 3 Department, and does not remove the requirement for a fire station. Additionally, the payment of a fire mitigation fee of approximately $4,270 per house, to provide funding to be used for the station construction prior to the 2,500 unit mitigating impacts to fire protection as outlined within the City Ranch Environmental Impact Report. Specifically, the proposal meets the following Goals and Policies of the General Plan: Goal PSi, 'ensure that adequate public services and facilities are available to support development in an efficient and orderly manner'; Policy PS1.1.2, 'require all new development, including major modifications to existing development, to construct or provide a fair share contribution towards the construction of required off-site improvements needed to support the project'; Policy PSi.4.3, 'adopt, implement and annually review user fee and impact fee programs, to support the cost of constructing capital facilities and providing services'; and Goal PS5, 'support the provision of adequate public and community services to meet the needs of residents'. Additionally, the Development Agreement is consistent with the City Ranch Specific Plan Goal 2 'Provide financing, facilities and infrastructure which are necessary as a result of new development, and which minimize financial impacts to the existing community.' (b) The First Amendment to Development Agreement 92-2 complies with the requirements of California Government Code Sectorr 65865 through 65869 5 in that the Development Agreement does specify in detail and contain the following (i) Provisions are included within Section 6 2 of the existing Development Agreement requiring periodic review of the agreement at least every twelve months, at which time the applicant or successor in interest thereto, shall be required to demonstrate good faith compliance with the terms of the agreement (California Government Code Section 65865.1) (ii) The permitted uses of the property, the density and intensity of use, the maximum height and size of buildings, and provision for reservation or dedication of land for public purposes are contained in Sections 3.2 and 4 of the Development Agreement (California Government Code Section 65865.2). (iii) The Development Agreement includes conditions, terms, restrictions and requirements for subsequent discretionary actions in Section 5.1 of the Agreement (California Government Code Section 65865.2). (iv) Any fee received will comply with the provisions of Government Code Section 66006.

Ordinance No. 1436 Page 4 (c) The applicant has demonstrated that the proposed Development Agreement Amendment wilt not be detrimental to or cause adverse effects to adjacent property owners, residents or the general public as evidenced by the Staff Report dated March 6, 2013. The construction of the fire station will be delayed, with the approval of the Los Angles County Fire Department, until a sufficient number of housing units are located within the area to justify construction and operation of the fire station. Physical development of the site will be consistent with the existing standards contained within the City Ranch Specific Plan. (d) The proposed Development Agreement Amendment provides clear and substantial benefit to the residents of the City of Palmdale. These include the construction of a fire station within a timeframe acceptable to the Los Angeles County Fire Department and a fire mitigation fee for the remaining lots within the Phase 1 development, to help ensure funding is available:for the construction of the fire station when needed SECTION 13 Based upon substantial evtctence presented to the City Council during the above referenced February 6, 2O1, pibiic hearing, including public testimony, and written and oral staff reports, this Coticil specifically finds as follows with respect to the Finding of Consistency (a) Based upon the environmental Initial Study, the proposed Development Agreement Amendment is consistent with the project which was reviewed in EIR 89-3 as certified by City Council Resolution No. 92-58. When adopting Resolution No. 92-58, the City Council found that individual and cumulative adverse impacts generated by the project would be mitigated to the extent feasible through the Mitigation Measures as contained in the Environmental Impact Report. Irrespective of those measures, the City Council found that some impacts could not be feasibly mitigated to a level of insignificance. In addition, the City Council found that the Project may result in significant individual or cumulative impacts which had not been identified at that time. The City Council found that the benefits provided by the project, as contained in the Specific Plan, outweighed any adverse impacts caused by the project. These benefits were determined by the City Council to include the following: (i) The property is being planned as a comprehensive and cohesive recreational community with sufficient commercial development, schools, parks, trails, golf, community facilities and other elements to support the residential of the City Ranch Project as well as provide regional benefits to the City of Palmdale.

Ordinance No. 1436 Page 5 (ii) Preserving 419 acres of natural open space, not previously accessible to the public, where biological resources and wildlife will be protected and where public passive enjoyment of these resources in a protected environment will be enhanced. (iii) Providing quality housing opportunities which meet the needs of a variety of lifestyles and income levels. (iv) Providing approximately 1,093 permanent jobs created by service and supply demands from Project residents and commercial tenants as well as providing a significant number of construction related and real estate sales related jobs. (v) Designing and developing the property with a circulation system that meets local needs and provides safe and efficient transportation solutions. (vi) Protecting scenic viewsheds both to and from the property and preserving the Verde Ridge and Sierra Pelona ridgetine (vii) Designing and developtng regional infrastructure to distribute the use of Antelope Valley East Kern and Los Angeles County Waterworks water for use by City of Palmdale residents (viii) Providing quality community design and circulation elements conducive to efficient public health and safety issues as well as efficient operations for Sheriff services. (ix) Developing infrastructure improvements to meet Project requirements and serve other regional needs for water, sewage disposal, storm drainage, utilities, etc. SECTION 14. Based on the findings and conclusions set forth in Sections 12 and 13 above, the City Council hereby adopts Ordinance No. 1436 adopting the First Amendment to Development Agreement 92-2, attached as Exhibit 1.

Ordinance No. 1436 Page 6 SECTION 15. This Ordinance is directed to be published in accordance with Section 36933 of the Government Code of the State of California. PASSED, APPROVED and ADOPthis 6th day of March, 2013 by the following vote: AYES: XL NOES: ABSTAIN: ABSENT: ATTEST: James C. Ledford,Jr., Mayor Rebecca J. Smith City Clerk Approv das to form: Wm. Matthew itzhazy tcity Attorney

EXHIBIT 1 FREE RECORDING REQUESTED UNDER CALIFORNIA GOVERNMENT CODE SECTION 6103 RECORDING REQUESTED BY: CITY OF PALMDALE WHEN RECORDED MAIL TO: CITY OF PALMDALE ATTN: CITY CLERK 38300 SIERRA HWY, STE. 'C' PALM DALE, CA. 93550-4611 SPACE ABOVE THIS LINE FOR RECORDER'S USE FIRST AMENDMENT TO DEVELOPMENT AGREEMENT 92-2 FOR FIRE PROTECTION WITHIN PHASE 1 OF ANAVERDE This First Amendment to the Development Agreement by and between the City of Palmdale and Kaufman and Broad of Southern California, Inc. Relative to the Development Known as City Ranch (Development Agreement 92-2) is made and entered into this day of March, 2013, by and between the CITY OF PALMDALE (hereinafter referred to as "CITY"), HIGHPOINTE WALDEN GREEN 81, L.P., a California limited partnership, HIGHPOINTE WALDEN WALK 56, L.P., a California limited partnership, and HIGHPOINTE WALDEN WALK 64, L.P., a California limited partnership (hereinafter collectively referred to as "HIGHPOINTE"), KB HOME GREATER LOS ANGELES INC., a California Corporation (referred to herein as "KB"), ROYAL INVESTORS GROUP, LLC, a California limited liability company (acting on its own behalf and as the duly authorized representative of Shayan Capital, LLC, a California limited liability company, Javid Investment, LLC, a California limited liability company and Behrouz Haverim, all as tenants-in-common) (collectively, referred to herein as "ROYAL"), and the CITY OF PALMDALE (the "CITY") concerning the matters set forth below. RECITALS WHEREAS, HIGHPOINTE is the owner of 201 of the 346 substantially complete

A-4252 residential lots within "Phase l!1 of the master planned community situated in the CITY, within Tract 54117-03, and is commonly known as and defined herein as "Anaverde"; and WHEREAS, KB is the owner of 93 of the 346 substantially complete residential lots within Phase I of Anaverde, including 49 lots within Tract 54117-01 and 44 lots within Tract 541 16-02, and WHEREAS, ROYAL is the owner of 52 of the 346 substantially complete residential lots within Tract 54117-02, Phase I of Anaverde, (HIGHPOINTE, KB and ROYAL are collectively referred to herein as the "PHASE I OWNERS"); and WHEREAS, the Anaverde development is subject to that certain Development Agreement 92-2 between the CITY and Kaufman and Broad of Southern California, Inc. dated May 10, 1993 (the 'Development AgreemenV') for the City Ranch development; and WHEREAS, pursuant to Settlement Agreement (A-3207) between New Anaverde, LLC and the City of Palmdale, entered into on June 15, 2010, those portions of the master development under the control of New Anaverde, LLC are no longer subject to Development Agreement 92-2 and any subsequent amendment thereto; and WHEREAS, the PHASE I OWNERS desire to satisfy the Conditions of Approval of Tracts 54116 and 54117 and Section 48.1 of the Development Agreement; and WHEREAS, the Los Angeles County Fire Department has determined that a permanent fire station is required before occupancy of the 2,500th dwelling unit within Anaverde, not before occupancy of the 1,000th dwelling unit as contemplated by the Development Agreement; and WHEREAS, the CITY warrants and represents that the CITY is existing and duly 2

A-4252 authorized to receive fire mitigation fees in lieu of construction of the fire station and improvements at Anaverde and delivery of vehicles and equipment for the same; and WHEREAS, PHASE I OWNERS represent and warrant that they are successors in interest to certain portions of the Phase I property covered by the Development Agreement, subject to its terms and conditions, and have the authority to enter into this First Amendment; WHEREAS, the parties, by signing below, each agree that the PHASE I OWNERS can contribute a fire mitigation fee to the CITY for the future construction of a permanent fire station in lieu of constructing a new fire station and in lieu of delivery of vehicles and equipment for the same as set forth in Section 4.8.1 of the Development Agreement and the Conditions of Approval. AGREEMENT 1. The foregoing Recitals are hereby incorporated by reference into this Agreement. 2. Section 48.1 (a) is hereby amended to read as follows: Dedicate a site for and construct a permanent fire station at a location acceptable to the City and the Los Angeles County Fire Department. Such construction shall be completed prior to issuance of the certificate of occupancy for the 2500th dwelling unit within the Project south and west of the California Aqueduct. The proposed fire station shall be built to meet the standard specifications of the Los Angeles County Fire Department, provided, however, that Developer may negotiate with the Fire Department with respect to the exterior elevations of the building to assure aesthetic consistency with the balance of the Project. In consideration of Developer's dedication and construction of the fire station, City shall waive all plan check, permit and inspection fees associated with the fire station. 3

A-4252 3. Section 4.8.1(b) is hereby amended to read as follows: A fire mitigation fee of $4,276 per unit shall apply to 44 lots, Lots 47-67, 72-91, and 95-97 within Tract 54116-02; 49 lots, Lots 1-3, 27-71, and 75 within Tract 54117-01; 52 lots, Lots 1-5, 8-37, 59-74, and 78 within 54117-02; and 201 lots, Lots 7-207 located within Tract 54117-03 and shall be payable upon the issuance of the building permit for each lot. Payment of the fire mitigation fee shall be the only obligation with respect to dedications, improvements, fees (including processing fees), assessments or other exactions for fire protection with respect to the development of these lots, including the obligation to construct the fire station described in Section 4.8.1(a) of this Agreement. 4. Section 6.4 is hereby amended to add the following as paragraph three: The following lots have been deemed to have commenced "substantial work of improvement": 44 lots 47-67, 72-91, and 95-97 within Tract 54116-02; 49 lots 1-3, 27-71, and 75 within Tract 54117-01; 52 lots 1-5, 8-37, 59-74, and 78 within 54117-02; and 201 lots 7-207 located within Tract 541 17-03. 5. Authority. The undersigned signatory for each of the respective parties to this First Amendment hereby personally covenants, represents, and warrants that they have the power and authority from said party to execute this Agreement upon the terms and conditions stated herein and agree to indemnify, defend, and hold harmless the other parties from all damages, costs and expenses (including, without limitation, attorneys' fees and court costs) which result from a breach of this material representation. By executing this First Amendment, none of the Phase I owners have assumed any new contractual obligation, other than the obligation to pay fire mitigation fees for fire protection for Phase I. 6. Recording. This First Amendment shall be recorded by the Los Angeles County Recorder's Office. However, in the event that, for any reason whatsoever, this Agreement is not recorded or deemed not recordable by anyone, the parties agree that they shall still be bound by the terms and conditions of the same. 4

A-4252 IN WITNESS WHEREOF, the undersigned have executed this Agreement and hereby agree to all of the terms and conditions set forth herein as of the date first above written: CITY OF PALMDALE Attest: James C. Ledford, Jr. Mayor Rebecca J. Smith City Clerk Approved as to form: WM. Matthew Ditz hazy City Attorney 5

A-4252 CALIFORMA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Los Angeles On, before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 6

A-4252 "HIGHPOINTE" HIGHPOINTE WALDEN GREEN 81, LP., a California limited partnership By: CYPRESS WEST IN VESTMENT, LLC, a Nevada limited liability company, Its General Partner By: Highpointe Communities, Inc, a California corporation, its Authorized Representative By Timothy D. England,SVP HIGHPOINTE WALDEN GREEN 56, L.P., a California limited partnership By: CYPRESS WEST IN VESTMENT, LLC, a Nevada limited liability company, Its General Partner 7

A-4252 HIGHPOINTE WALDEN GREEN 64, L.P., a California limited partnership By: CYPRESS WEST INVESTMENT, LLC, a Nevada limited liability company, Its General Partner By: Highpointe Communities, lnc, a California corporation, its Authorized Representative By - Timothy D. England, SVP CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of4ffsc(a On, before me, /1 Notary PUblic, personally appeared 77rn077-/Y L who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. 8

A-4252 "KB" CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Los Angeles On '-,beforeme, ty -' x - Notary Publu, personally appeared - who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature / 9

A-4252 "ROYAL" ROYAL INVESTORS GROUP, LLC, A California limited liability company By... Ebby Shakib Managing Member CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Los Angeles On I x L., before me,, Notary Public, personally appeared 10