HomeMy WebLinkAboutAttachment 6a - Development Agreement Amendment
RECORDED AT REQUEST OFAND
WHEN RECORDED RETURN TO:
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attn: City Clerk
Fee Exempt B Gov’t Code '6103
(Space above for Recorder’s Use)
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
between the
City of Chula Vista,
Village II Town Center, LLC
and
Sunranch Capital Partners, LLC
THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (Amendment) dated
for reference purposes only as of ________________, 2019, is entered into by and among THE
CITY OF CHULA VISTA, a California charter city and municipal corporation (City),
VILLAGE II TOWN CENTER, LLC, a California limited liability company (Village II) and
SUNRANCH CAPITAL PARTNERS, LLC, a Delaware limited liability company (Sunranch).
Village II and Sunranch are collectively referred to in this Amendment as the “Owner.” The
City or the Owner are sometimes individually referred to in this Amendment as a “Party” and are
collectively referred to as the “Parties.” The Parties enter into this Amendment with reference to
the following facts:
RECITALS
A. Development Agreement. Owner and City are parties to that certain Development
Agreement recorded in the Official Records of the County of San Diego, State of California, on
June 17, 2015 as Doc. No. 2015-0312805 (Agreement) for the property in the City of Chula
Vista, State of California, more particularly described in the Agreement. Terms defined in the
Agreement shall have same meaning when used in this Amendment.
B. First Hotel. A 148-room hotel meeting the requirements for the first hotel, as
described in Section 5.1.1 of the Agreement, has been completed.
C. CFD. A Community Facilities District (CFD) for the maintenance of the Park, as
described in Section 5.3.1.3 of the Agreement, has been created.
D. BRT Right of Way. The right-of-way for the Bus Rapid Transit (BRT) line right
of way, as described in Section 5.3.3 of the Agreement, has been dedicated.
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E. Affordable Housing Agreement. An Amended and Restated Housing
Development Agreement, which provides for housing credits against Owner’s affordable
housing obligations in Planning Area (PA) 12, was entered into between Owner and the City in
September 2017.
F. Transit-Oriented Development. The City would like Owner to construct mid-rise
higher density apartments with mixed-use ground floor commercial east of Town Center Drive
near the BRT line, because the City finds that:
a. This change to the project will promote the principles of smart growth,
maximizing land use potential within walking range of Otay Ranch BRT station and ensuring
transit-supportive densities near BRT line.
b. The transit-oriented development will establish a compact walkable
community by replacing surface parking with 5-level structured parking, benefiting the
environment by reducing carbon emissions.
c. This type of housing product, which is considered costly to construct and
has not been built in Chula Vista, will improve housing affordability and economic development
by providing a more diverse mix of housing types in a fiscally sustainable manner.
d. The City wants this form of development and Owner is willing to fund this
high-cost product.
G. Amendment. To achieve the City’s transit-oriented development objectives and
assure that both Parties can achieve the mutual benefits envisioned in the Agreement, Owner and
City would like to amend the Agreement as provided in this Amendment.
NOW, THEREFORE, in consideration of the above Recitals and the mutual obligations
of the Parties set forth herein, Owner and City agree as follows:
1. Residential Density. Maximum residential density for the FC-2 area of the
Sectional Planning Area (SPA) Plan shall be amended to allow for up to 900 residential units.
2. Second Hotel. The trigger for the commencement of construction of the Second
Hotel is hereby changed. Owner shall commence construction of the Second Hotel prior to
st
issuance of the building permit for the 651 residential unit. Section 5.1.2 of the Agreement is
hereby replaced in its entirety with the following:
“5.1.2 Owner shall commence substantial construction of the second hotel containing
150 hotel rooms (or the number of rooms needed to bring the total hotel room
count of the two hotels to a total of 300 rooms) (the “Second Hotel”) prior to
issuance of the building permit for the 651st residential unit for the Project. In the
event that Owner has not pulled building permits and, in the reasonable
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determination of the Director of Development Services, commenced substantial
construction of the Second Hotel prior to the issuance of the building permit for
the 651st residential unit for the Project, Owner shall pay to the City the amount
of $629,860 per year (the “In Lieu Hotel Payment”) as provided herein.
Owner shall make the first In Lieu Hotel Payment to the City prior to the final
inspection for the building permit for the 651st residential unit for the Project.
Owner shall, thereafter, make the In Lieu Hotel Payment annually on the
anniversary date of the issuance of the building permit for the 651st residential
unit for the Project. Owner's obligation to make the In Lieu Hotel Payment shall
continue until the earlier to occur of (a) the beginning of substantial construction,
in the reasonable determination of the Director of Development Services, of the
Second Hotel, or (b) the twentieth (20th) anniversary of the Effective Date of the
Agreement. Owner's obligation to make the In Lieu Hotel Payment shall be
secured by a security interest in the Property or, at the Owner's request, by
another security interest reasonably acceptable to the City Manager and City
Attorney. Owner shall, at the City's request, enter into a separate promissory note
and deed of trust to secure the obligation to make the In Lieu Hotel Payment at
the time of issuance of the building permit for the 651st residential unit. Failure to
make the In Lieu Hotel Payment when due shall be a material breach of this
Agreement and shall, in addition to other available remedies, entitle the City to
foreclose on its security interest. Notwithstanding the foregoing, Owner's
obligation to make the In Lieu Hotel Payment hereunder shall terminate in the
event that the City issues final approval or enters into a contract for the provision
of direct or indirect financial incentives to another hotel development within the
Otay Ranch community, without first meeting and conferring with Owner in good
faith regarding the provision of substantially equivalent financial incentives, and,
if Owner's hotel qualifies for such incentives, tendering to the City Council for its
consideration approval of such incentives. City Council shall reserve the right to
approve or disapprove such incentives in its sole discretion.”
3. Commercial/Mixed Use. The requirement for construction of commercial
development on the Property is hereby reduced. Owner shall only be required to construct
15,000 square feet of commercial development on the Property. Section 5.2 of the Agreement is
hereby replaced in its entirety with the following:
“5.2 Construction of Commercial/Mixed Use. Owner agrees and acknowledges that
the SPA Plan originally contemplated only commercial development on the
Property. Although the City has agreed to amend the SPA Plan to allow
residential development on the Property, commercial development is still an
important use for the site. Therefore, Owner agrees to obtain building permits for
and commence substantial construction of 15,000 square feet of commercial
development on the Property in accordance with the Project Approvals prior to or
concurrently with obtaining building permits and commencing construction of the
residential development located east of Town Center Drive. The 15,000 square
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feet of commercial development will be constructed to construction standards that
qualify for commercial occupancy “B” or “M”.”
4. Park
a. Park and Park Site. Section 5.3.1 of the Agreement is hereby replaced in
its entirety with the following:
“Based on City standards in effect as of August 2018, Owner’s park obligations
(land and improvements) related to the Project would require the dedication and
the improvement to City standards of up to a 7.05-acre park on the Property, if all
900 residential units are built. Owner’s actual baseline park obligations shall be
established for the first 600 residential units at the time park obligations become
due for those units in accordance with City standards, including, but not limited
to, Chapter 17.10 of the Chula Vista Municipal Code using the PAD fee rates in
effect as of the dates of final inspection for each of the units (“Baseline Park
Obligations”). Owner’s actual additional park obligations shall be established for
the final (up to) 300 residential units at the time park obligations become due for
those units in accordance with City standards, including, but not limited to,
Chapter 17.10 of the Chula Vista Municipal Code using the PAD fee rates in
effect as of the dates of final inspection for each of the units (“Additional Park
Obligations”). Owner shall satisfy its actual park obligations as follows:”
b. Granting of Park Site and Development of the Park. Section 5.3.1.1 of the
Agreement is hereby replaced in its entirety with the following:
“Owner shall grant two (2) acres of the Property (the “Park Site”) to the City in a
permanent easement for public usage and shall develop a highly amenitized,
“turnkey” park (the “Park”) on the Park Site, as described in this Agreement, to
the satisfaction of the Director of Development Services. The Park shall generally
be located as depicted in Exhibit “B,” with the final location subject to City
approval. In order to create an extraordinary public space, the Park shall
generally consist of the elements described in Exhibit “E” to this Agreement.
Owner shall invest substantially more to the development and granting of the Park
than would be typical for a City standard park, up to and including the value
equivalent to the dedication and improvement required to achieve the Owner’s
Baseline Park Obligations. Owner shall commence construction of the Park prior
th
to the issuance of the five hundred thirtieth (530) residential building permit and
substantially complete the Park within fifteen (15) months of commencement of
construction.”
c. Audit and Payment of Excess Park Obligations. Section 5.3.1.2 of the
Agreement is hereby replaced in its entirety with the following:
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“Owner shall, within sixty (60) days of the date on which the Director of
Development Services reasonably determines, in writing, that the Park has been
completed, exclusive of the warranty period, provide the City, for its review and
approval, all documentation the City reasonably requires, to determine the cost
(land and improvement) of the Owner’s construction of the Park on the Park Site.
The City shall use this information to prepare an audit of the actual costs of the
development of the Park on the Park Site. The audit shall also compare the actual
costs of the development of the Park on the Park Site (including the actual costs
incurred during the warranty period) with the value of the Owner’s actual
Baseline Park Obligations. Based on this audit, Owner shall satisfy its remaining
park obligations, if any, by paying the excess park obligations to the City’s PAD
fee account for the development of other parks in eastern Chula Vista. Such
excess park obligations shall be calculated through the audit and shall be paid as
either a pro rata permit fees collected in connection with any remaining residential
permits or, if no residential permits remain, in a lump sum payment to the City
made within sixty (60) days of the audit, or such later date as is approved by the
Director of Development Services.”
c. Park Benefit Fees. Section 5.3.1.5 is added, as follows:
“Park Benefit Fees. The development of the Park described in Section 5.3.1.1
of the Agreement will satisfy the Developer’s Baseline Park Obligation. Given
the lack of available acreage that could be acquired to serve the Project, the City
hereby waives PAD fees for the remaining 300 residential units. Developer shall
meet its Additional Park Obligation for each residential unit in excess of 600
through payment of a Park Benefit Fee. The Park Benefit Fee shall be in an
amount equal to the PAD fees that would otherwise have been due pursuant to
Chapter 17.10 of the Chula Vista Municipal Code. The Park Benefit Fee shall be
due and payable no earlier than building permit issuance, but no later than final
inspection and shall be assessed using the PAD fee rates in effect as of the date of
payment. Park Benefit Fees may be utilized by the City to acquire or develop
parkland serving the City’s eastern territories.”
5. Community Purpose Facilities. Section 5.3.2 of the Agreement is hereby replaced
in its entirety with the following:
“Owner shall provide a total of 3.24 acres of net usable land for Community
Purpose Facilities (CPF) if all 900 residential units are built. If not all 900
residential units are built, then Owner shall provide a pro-rated amount of CPF in
accordance with the actual amount of the total number of residential units built
(e.g. 900 residential units = 3.24 acres of net usable land for CPF; while 700
residential units = 2.52 acres of net usable land for CPF). Owner may satisfy this
CPF requirement in any manner consistent with Chula Vista Municipal Code
Section 19.48.025, which may include the provision of the CPF land offsite,
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alternative compliance, or adjustments to the percentage limitations on the types
of facilities, including recreational facilities, that may count toward satisfying the
CPF requirement, all in the discretion of the Director of Development Services.
Owner shall commence grading of the CPF land or begin alternative compliance
prior to the issuance of the building permit for the five hundred thirtieth (530th)
residential unit.”
6. Term. The Agreement shall have a remaining term of twenty (20) years from the
effective date of the enabling ordinance by which this Amendment is approved, subject to
extension as provided in Section 6.1.1.
7. Full Force. Except as expressly provided herein, all other terms and conditions of
the Agreement shall remain in full force and effect.
8. Authority. Each party represents that it has full right, power and authority to
execute this Amendment and to perform its obligations hereunder, without the need for any
further action under its governing instruments, and the parties executing this Amendment on the
behalf of such party are duly authorized agents with authority to do so.
\[Signatures on following page\]
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Owner and City have executed this Amendment, which is effective as of the effective
date of the enabling ordinance which is at second reading of the City Council.
CITY OWNER
CITY OF CHULA VISTA, a California VILLAGE II TOWN CENTER, LLC, a
charter city and municipal corporation California limited liability company*
By: By:
Mary Casillas Salas, Mayor Name:
Title:
Date:
ATTEST: By:
Name:
Title:
By: Date:
Kerry K. Bigelow, City Clerk
SUNRANCH CAPITAL PARTNERS, LLC, a
APPROVED AS TO FORM: Delaware limited liability company*
By:
By: Name:
Glen R. Googins, City Attorney Title:
By:
Name:
Title:
Date:
J:\\Attorney\\MichaelSh\\Freeway Commercial - 2019\\DA-Amendment\\DAAmend-FwyComml-4.25.19-5.13.19-Final.docx
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A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On , ____, before me, ,
Notary Public in and for said State, personally appeared
_________________________________________________________, who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) 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 (Seal)
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A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On , ____, before me, ,
Notary Public in and for said State, personally appeared
_________________________________________________________, who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) 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 (Seal)
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