CITY OF PALMDALE REPORT to the Mayor and Members of the City Council from the City Manager DATE: SUBJECT: Approval of, an agreement between the City of Palmdale and merchant builders within Anaverde Phase 1 for payment of traffic impact fees ISSUING DEPARTMENT: Public Works SUMMARY Issue: Shall the City Council approve, an agreement between the City of Palmdale and merchant builders within Anaverde Phase 1 for payment of traffic impact fees and authorize the mayor to execute the agreement? Recommendation: It is recommended that the City Council approve and authorize the Mayor to execute the agreement. Fiscal Impact: requires that each of the existing 346 vacant lots remaining within Phase I of the Anaverde development pay a traffic impact fee of $1,734.1 O at the time a certificate of occupancy is issued. The funds will be deposited into Revenue Account No. 2213220-421300. BACKGROUND The Anaverde Development was developed with 1,418 residential lots, 346 of which are not built on. These 346 lots are owned by Highpointe Community, KB Homes, and Royal Investors Group. Together three entities are collectively referred to as the "merchant builders".
Report to the Mayor and the City Council Approval of Page 2 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, four school sites, one community park and supportive commercial uses. In addition, the specific plan and EIR identified a requirement for a fire station and a secondary means of access to serve the project areas. An amendment to the Development Agreement was approved by the City on March 6, 2013 wherein Section 4.8 was amended to modify the timing of the fire station construction for the Anaverde development from the 1,oooth unit located south and west of the California Aqueduct to the 2,5ooth unit. The modification of the timing was done with the approval of the Los Angeles County Fire Department. 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. The remaining 346 lots within Phase 1 are owned by Highpointe Community, KB Homes, and Royal Investors Group. These three entities are collectively referred to as the "merchant builders" within Phase I of the Anaverde Development. The build out of these lots require that a secondary access road be build. The City will construct the south half of Avenue S this summer within the property owned by New Anaverde. These improvements will connect to improvements that the owner of Ritter Ranch, Lehman Holdings, will be constructing this summer as well. Together, the work done by the City and Lehman will provide secondary access from the existing Phase 1 of Anaverde to Elizabeth Lake Road. As consideration for the City undertaking the improvements of Avenue S, the merchant builders agreed to pay a traffic impact fee to assist in the cost of the Avenue S improvements. The traffic impact generated from the build out of the 346 lots will be $600,000. Respectfully submitted by, ichael J. Mischel Director of Public Works Ch,ilds City Manager
A-4650 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, SUITE C PALMDALE, CA 93550-4611 TRAFFIC FEE MITIGATION AGREEMENT SPACE ABOVE THIS LINE FOR RECORDER'S USE This Traffic Fee Mitigation ("Agreement") is made and entered into as of, by and among the CITY OF PALMDALE, a charter city organized and existing under the laws of the State of California ("City"), HIGHPOINTE WALDEN GREEN 81, LP., a California limited partnership, HIGHPOINTE WALDEN WALK 56, LP., a California limited partnership, and HIGHPOINTE WALDEN WALK 64, LP., a California limited partnership (collectively, "Highpointe"), KB HOME GREATER LOS ANGELES INC., a California corporation ("KB"), and 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, "Royal"), concerning the matters set forth below. RECITALS WHEREAS, Highpointe is the owner of 201 of the 346 substantially complete residential lots within Tract 54117-03 of Phase I of the master planned community situated in the City and commonly known as Anaverde ("Anaverde Project"), which property owned by Highpointe is more particularly described in Exhibit "A" attached hereto; and WHEREAS, KB is the owner of 93 of the 346 substantially complete residential lots within Phase I of the Anaverde Project, including 49 lots within Tract 54117-01 and 44 lots 132273-00002
within Tract 54116-02, which property owned by KB is more particularly described in Exhibit "B" attached hereto, and WHEREAS, Royal is the owner of 52 of the 346 substantially complete residential lots within Tract 54117-02, Phase I of the Anaverde Project, which property owned by Royal is more particularly described in Exhibit "C" attached hereto (Highpointe, KB and Royal are collectively, "Phase I Owners," and the 346 lots within Phase I of the Anaverde Project that are collectively owned by the Phase I Owners are collectively referred to as "Phase I Lots") (Phase I Owners and the City are collectively referred to as the "Parties"); and WHEREAS, the development of the Anaverde Project is governed by, among other documents, that certain Development Agreement 92-2 dated May 10, 1993 ("Development Agreement"), by and between the City and Anaverde, LLC ("Anaverde"), successor-in-interest to Kaufman and Broad of Southern California, Inc.; and WHEREAS, pursuant to the Settlement Agreement (A-3207) dated as of June 15, 2010, between and among the City, New Anaverde, LLC ("New Anaverde"), the current owner of the Anaverde Project, excluding Phase I, and Anaverde, those portions of the master planned community under the control of New Anaverde are no longer subject to Development Agreement and any subsequent amendment thereto; and WHEREAS, on or about March 11, 2013, the Development Agreement was amended pursuant to that certain First Amendment to Development Agreement recorded in the Official Records of Los Angeles County on March 19, 2013, as Instrument No. 2013-0412417 ("First Amendment") to provide that the construction of the fire station to be located in or in the vicinity of the Anaverde Project, is required before occupancy of the 2,500th dwelling unit, rather than before occupancy of the 1,oooth dwelling unit. In lieu of the obligation to build the fire station described in Section 4.8.1 (a) of the Development Agreement, the Phase I Owners agreed to pay a fire mitigation fee of $4,276 ("Fire Mitigation Fee") per unit for each of the 346 Phase I Lots. The Fire Mitigation Fee is payable upon the issuance of a building permit for each lot; and 132273-00002 -2-
WHEREAS, in connection with the First Amendment, each of the Phase I Lots were deemed to be a "substantial work of improvement" as defined in Section 6.4 of the Development Agreement, thereby making the termination of the Development Agreement in May 2013 ineffective as to the Phase I Owners with respect to the Phase I Lots; and WHEREAS, the Development Agreement provides for the extension of Avenue S through Phase II of the Anaverde Project to the neighboring project commonly known as Ritter Ranch ("Avenue S Extension"). The construction of the Avenue S Extension will benefit the City and the Phase I Owners; and WHEREAS, there is temporary emergency access from terminus of Avenue "S" to Elizabeth Lake Road utilizing the bridge over the aqueduct; and WHEREAS, pursuant to an Agreement for the Design and Construction of the Avenue S Project (GAP Road Improvements), for the Grant of Certain Easements and the Termination of Certain Agreements No. A-4643 dated as of March 1, 2014, by and among the City, New Anaverde and LV Ritter Ranch, LLC ("Gap Road Agreement"), the City has secured funds for the construction of the Avenue S Extension as described in the Gap Road Agreement ("Modified Avenue S Extension") and has agreed to construct the Modified Avenue S Extension; and WHEREAS, pursuant to a Settlement Agreement No. A-4263 dated as of March 1, 2014 by and between the City and L V Ritter Ranch LLC, the owner of the adjacent property known as Ritter Ranch (the "Ritter Ranch Settlement Agreement"), LV Ritter Ranch LLC will construct the road connecting the Modified Avenue S Extension to Elizabeth Lake Road ("Ritter Extension," collectively with Modified Avenue S Extension, "Secondary Access Road"); and WHEREAS, the City anticipates that construction of the Modified Avenue S Extension and the Ritter Extension will commence in the late spring of 2014; and WHEREAS, the City consulted with the Los Angeles County Fire Department ("Fire Department") regarding the issuance of additional building permits in Phase I of the Anaverde Project and the Fire Department concurred that building permits could now be issued since the 132273-00002 -3-
City has made additional progress with securing the completion of the Secondary Access Road; and WHEREAS, the Phase 1 Owners have requested the City to issue building permits and certificates of occupancy upon completion of the construction and sale of homes on the Phase I Lots; and WHEREAS, the City has agreed to issue Phase I Owners building permits and certificates of occupancy upon completion of the construction and sale of homes on Phase I Lots on the terms and conditions set forth herein; and In consideration of the promises and mutual covenants and agreements set forth in this Agreement, the Parties agree as follows: AGREEMENT 1. Recitals. The foregoing Recitals are hereby incorporated by reference into this Agreement. 2. Fire Mitigation Fee. Upon payment of the Fire Mitigation Fee by the respective Phase I Owner, the City shall issue a building permit to such Phase I Owner in connection with any such Phase I Lot, subject only to such Phase I Owner's satisfaction of any ministerial requirements associated with issuance thereof. 3. Traffic Mitigation Fee. Each Phase I Owner shall pay, at the time such Phase I Owner requests the City to issue a certificate of occupancy for a Phase I Lot, a traffic mitigation fee of $1, 734.1 O per unit ("Traffic Mitigation Fee"). 4. Satisfaction of Development Condition. Subject to Section 5 below, payment of the Traffic Mitigation Fee shall satisfy the respective Phase I Owner's development condition under the Development Agreement relating to construction of the Avenue S Extension. 5. Limit of Certificates of Occupancies. Until the Secondary Access Road is accepted or opened to the public by the City, and subject to the terms of this Section 5, the City 132273-00002 -4-
will only issue the number of certificates of occupancy for the Phase I Lots during calendar years 2014, 2015 and 2016 as is more particularly specified on Exhibit "D" attached hereto. Any certificates of occupancy that are issued with respect to model homes shall not count against the number of certificates which the City has agreed to issue hereunder until such time as such model homes are sold to members of the home buying public. The certificates of occupancy which are available for issuance hereunder by the City during each such calendar year shall be allocated between, and available for issuance to (and only to), the Phase I Owners in the manner and on the basis specified on Exhibit "D" attached hereto. The cumulative maximum number of certificates of occupancy which will be issued by the City hereunder shall be determined for each calendar year such that any available certificates of occupancy which are not issued by the City to a Phase I Owner during a calendar year shall be available for issuance to that Phase I Owner in subsequent years in addition to the certificates of occupancy which are allocated to that Phase I Owner for such subsequent years (for avoidance of doubt, any available certificates which have not been issued by the end of 2016 shall be available for issuance in subsequent years). Notwithstanding the allocations on Exhibit "D" attached hereto, the Phase I Owners, or any two (2) of them as between themselves, shall have the right to mutually agree from time-to-time to an alternative allocation of the total available certificates of occupancy amongst themselves, and the City will recognize and adhere to any such alternate allocation upon written direction from the affected Phase I Owners. There shall be no restrictions upon the number of certificates of occupancy which the City will issue following the City's acceptance or opening to the public of the Secondary Access Road. 6. Effective Date. This Agreement shall be effective and binding on the Parties upon the occurrence of the following: (i) counterparts hereof have been executed and delivered by each Party, (ii) City Council has approved the Agreement and such approval is recorded in the minutes of the meeting related thereto, (iii) the Gap Road Agreement has become effective and (iv) the Ritter Ranch Settlement Agreement has become effective. 132273-00002 -5-
7. Authority. Each of the Parties to this Agreement hereby covenants, represents, and warrants that it (i) is duly organized, validly existing and in good standing under the laws of its formation, with organizational power and legal authority to own its properties and assets and to carry on its business, and (ii) has the power and authority to execute this Agreement upon the terms and conditions stated herein. 8. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California (without regard to conflicts of laws). 9. Successors and Assigns. This Agreement and the terms and provisions hereof shall inure to the benefit of and be binding upon the successors and assigns of the Parties. Notwithstanding anything in this Agreement to the contrary, in no event shall this Agreement or any of the terms hereof encumber or burden any of the Phase I Lots following receipt by the City of the both the Fire Mitigation Fee and the Traffic Mitigation Fee for such Phase I Lots, and this Agreement shall automatically and without further notice or action by any party hereto terminate in its entirety with respect to any Phase I Lot upon which a residence has been constructed thereon upon the sale thereof provided both the Fire Mitigation Fee and Traffic Mitigation Fee have been paid for that Phase I Lot. 10. Counterparts; Delivery. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document. The delivery of an executed counterpart of this Agreement by facsimile or PDF or similar attachment to an email shall constitute effective delivery of such counterpart for all purposes with the same force and effect as the delivery of an original, executed counterpart. 11. Severability. If any portion of this Agreement becomes illegal, null or void or against public policy, for any reason, or shall be held by any court of competent jurisdiction to be illegal, null or void or against public policy, the remaining portions of this Agreement shall not be affected thereby and shall remain in full force and effect to the fullest extent permissible by law. 132273-00002 -6-
12. Recording. This Agreement 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, and their respective successors, agree they shall still be bound by the terms and conditions of the same. [Signatures on the Following Pages] 132273-00002 -7-
IN WITNESS WHEREOF, the undersigned having executed this Agreement and hereby agree to all of the terms and conditions set forth herein as of the date first written above: CITY OF PALMDALE, a charter city James C. Ledford, Jr. Mayor Attest: Rebecca J. Smith City Clerk 132273-00002 -8-
ACKNOWLEDGMENT STATE OF CALIFORNIA ) COUNTY OF ) SS 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. Notary Public (SEAL) 132273-00002 -9-
"HIGHPOINTE" HIGHPOINTE WALDEN GREEN 81, L.P., a California limited partnership By: HIGHPOINTE COMMUNITIES, INC., a California corporation, its authorized representative By: ~~~~~~~~~~ Timothy D. England Senior Vice President HIGHPOINTE WALDEN WALK 56, L.P., a California limited partnership By: HIGHPOINTE COMMUNITIES, INC., a California corporation, its authorized representative By: Timothy D. England Senior Vice President HIGHPOINTE WALDEN WALK 64, L.P., a California limited partnership By: HIGHPOINTE COMMUNITIES, INC., a California corporation, its authorized representative By: Timothy D. England Senior Vice President 132273-00002 -10-
ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) SS COUNTY OF 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. Notary Public (SEAL) 132273-00002 -11-
"KB" KB HOME GREATER LOS ANGELES INC., a California corporation By: Thomas C. DiPrima Executive Vice President ACKNOWLEDGMENT STATE OF CALIFORNIA ) SS COUNTY OF 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. Notary Public (SEAL) 132273-00002 -12-
"ROYAL" ROYAL INVESTORS GROUP, LLC, a California limited liability company By: Ebby Shakib Managing Member ACKNOWLEDGMENT STATE OF CALIFORNIA ) SS COUNTY OF 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. Notary Public (SEAL) 132273-00002 -13-
EXHIBIT "A" LEGAL DESCRIPTION OF HIGHPOINTE PROPERTY Real propaty in the folows: of Pa!mdaie, lots 7 THROUGH INCWSNE, 209 AND 210 Of TRACT NO. 54117-03, AS PER MAP RECORDED IN BOOK 1317, PAGES 48 TO 66 INCLUSIVE OF MAPS 1 AMENDED BY CERTIFICATE Of CORRECTION RECORDED NOVEMBER 23r 2010 IN DOCUMENT NO. IN THE OfRCE Of THE COUNTY RECORDER Of SAID COUNTY. APN: 3206-068--007 320&068--015, 3206-068-070, 320&068--071, 3206-068-020 tkough 320&068-029, 3206-069-001 through 3206-069-011, 3206-069-074 throogh 320&069-076, 3206-069-018 through 3206-069-034, 3206-069-077 through 320&069-081, 3206-068-030, 3206-068-072 1 3206-068-073, 3206-061HJ:35 3206-068-062, 320&068-074, 3206-00S- 075, 3206-068-067, 3206-069-045 through 3206-032-026 through 320&il32-034, 320&070-001 through 3206-032-035 through 3206-071Hl30 throogh 3206-070-045r 3206-032-03.9 through 3206-070-046 through 320&070-0561 3206-032-045 through 3206-070-057 and 3206-068-068 132273-00002 -14-
EXHIBIT "B" LEGAL DESCRIPTION OF KB PROPERTY Ths rs:al iwopgrn' l~"'tzlted m me CiQ! of PaJmdtzltr, Ca11mtv gf' Los.ingtrle:s;, State q(califpnria fi1w'ye milv des:cribmi a:; follows: lots 47-61. inclusive. 72-91. inclusive and 95-97 inclusive of Tract No. 54116-{)2 in the City of Palmdale. Cm.1nty of Los Anaete:s. State at Cali(Qmia f 44 tarsi lots 1-3 ;m::fusive, 27-71 inclusive, and 15 of Tract No. 54117-{)1 in the City of Palmdale, County of Los Angeles, State of California (49 lots} 132273-00002 -15-
EXHIBIT "C" LEGAL DESCRIPTION OF ROY AL PROPERTY The real prop611j! lorntsd m ik'1 Cin: qf Palmiit1le, Com11l'!P g( Los.~ngeles,.State qf Ca/ifo;nria more fillh df3scrib6d asfqlli::ww;;: lots 1-5 inclusive. 8-37 inclusive. 59-74 inclusive and 78 of Tract No.. 54117-02 in the Citv of Palmdale. County of las Angeles, State of California 132273-00002 -16-
EXHIBIT 11 0 11 SCHEDULE OF CERTIFICATES OF OCCUPANCY Descriptions Cumulative Phase 1 lot Owners Highpointe KB Royal Year Ended December 31, 2014 59 30 26 Year Ended December 31, 2015 59 30 26 Year Ended December 31, 2016 Total.Certificates of Occupam:ies 83 33 0 201 93 52 132273-00002 -17-