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HomeMy WebLinkAboutPlanning Comm min 1996/08/06 MINUTES OF A SPECIAL BUSINESS MEETING OF THE CITY PLANNING COMMISSION OF CHULA VISTA, CALIFORNIA Conference Rooms 2/3 6:03 p.m. Public Services Building Tuesday, August 6, 1996 276 Fourth Avenue, Chula Vista ROLL CALL COMMISSIONERS PRESENT: Vice Chair Davis, Salas, Thomas, Tuchscher and Willett COMMISSIONERS ABSENT: Chair Tarantino, Commissioner Ray STAFF PRESENT: Deputy City Manager Krempl, Special Projects Manager Jamriska, Senior Planner Rosaler, Public Works Director Lippitt, Deputy City Attorney Googins Vice Chair Davis opened the meeting. The Secretary to the Planning Commission took a silent roll call. MOTION TO EXCUSE MSUC (Tuchscher/Willett) 5-0 to excuse Chair Tarantino, because of a business conflict. Vice Chair Davis noted that it was a possibility that Commissioner Ray would not be in attendance because of a business conflict; however, the Commission would wait until the end of the meeting to excuse him in the event he was able to attend. ITEM 1: ORDINANCES ADOPTING OTAY RANCH PRE-ANNEXATION DEVELOPMENT AGREEMENTS BETWEEN: Deputy City Manager Krempl noted that in June, the Planning Commission had considered four development agreements, one of which was for the Foundation and consisted of three parties. Those three parties had asked for separate consideration for a development agreement for each of the three. He stated that the agreements in the staff report were basically the same documents as before. He said them had been changes but not changes in the basic business terms or the benefits to the parties. He characterized most of the changes as editorial clean-up, clarification, or improvements of the language in the agreements from a City staff perspective. In some late discussions, staff had been trying to ascertain what the remaining issues were, if any, with respect to the agreements and the developer. PC Minutes -2- August 6, 1996 (A) ORDINANCE 2~187 - JEWELS OF CHARITY AND THE CITY OF CItULA VISTA (first reading) Mr. Krempl stated that staff wished to make some further additions to Section 2.19, page 6: Definition of Preserve Conveyance Plan, as follows: Preserve Conveyance Plan means a plan that "will when adopted" set forth policies and identify the schedules. The rest of the definition would remain as is. The applicant had concurred with the addition. He stated that the one issue that staff had with the Jewels of Charity agreement was Section 11.2.4, page 18, entitled "Default", Subsection "Procedures Upon Default "...available to the City and Owner to pursue in the event there was a breach, provided, however, neither party shall have the remedy of monetary damages against the other, except for an award of litigation costs and attorneys' fees." Mr. Krempl understood that the applicant disagreed with the new language proposed to be added. The staff perspective was that it provided additional protection to the City; that the parties should not be entitled to monetary damages; that development agreements such as this did not normally haggle monetary provisions. The City was not paying them to do certain things; the developer was not paying the City. There were other normal legal court remedies which were available to the applicant, which would be followed in the case of a breach of the agreement. He asked Deputy City Attorney Googins to comment on that. Deputy City Attorney Googins confirmed Mr. Krempl's position. It was the view of the Attorneys' Office that exposure to monetary damages in the context of the development agreement was above and beyond what the appropriate developer benefit of their bargain should be, and that any theoretical exposure to monetary damages was too speculative to analyze and quantify. Under the circumstances, he believed it to be an inappropriate risk for the City to have to assume. The more appropriate remedy would be an affirmative injunction to prevent the City from doing anything which would contravene the benefits the developer was getting in connection with this development agreement. Commissioner Willett asked if that would be the same on the other two agreements. Mr. Krempl answered in the affirmative. Mr. Googins said the same addition would be included in the other two agreements. Commissioner Willett, regarding page 6, Preserve Conveyance Plan, asked if the fees to be paid to ensure the orderly conveyance were to be paid by the developers. Mr. Krempl stated it was; however, that was just a definition. There was no preserve conveyance plan except for SPA I. It was something in the future as it pertained to every property owner. Mr. Willett commented that the wording was different from the original agreements. Mr. Jamriska stated that Village Development already had a conveyance plan for SPA I, and so therefore the wording would be different. None of the others had a preserve conveyance plan. PC Minutes -3- August 6, 1996 Colnmissioner Thomas asked the Attorney asked if mediation was optional. Mr. Krempl stated that was Section 13.3.3, page 20 of the Jewels agreement. Mr. Googins said is was a mandatory provision. It would go to mediation, not arbitration. Vice Chair Davis, referring to Section 11.2.4 regarding monetary damages, said that basically if the City breaches their side of the development agreement, even if there was a loss of money to the developer, there was no monetary remedy available? Attorney Googins stated that was correct. Given the nature of the City's obligations, the developer was getting vested entitlements with consideration of other future discretionary actions. He explained that the affirmative injunction to fome the City to abide by the agreement was a more appropriate remedy under the circumstances. They would be able to recover their costs. The City felt that was the appropriate allocation of risks. Vice Chair Davis concluded that if the City did something and there was a proven breach that cost the applicant money, them was no recovery for that. Mr. Googins stated that the City also had a specific injunction themselves to comply by the terms of the agreement. It went both ways. Commissioner Tuchscher, referring to page 6, no. 3, under Term, stated that the timing of the annexation was not to exceed January 1, 1997. He assumed that was an adequate time frame to accomplish the annexation and was selected somewhat arbitrarily to give the City enough time. Mr. Krempl concurred. Commissioner Tuchscher, regarding Section 6.3, page 10, Pre-Final Map Development dealing with improvements on the property, said he was concerned about grading with a tentative map approval. He asked if staff had contemplated the ramifications, if any, of having a tentative map approved that contained as many units and covered as much area as SPA I. Mr. Krempl said it had been considered. Bonding was required for the improvements, and it was allowed often by the City that the grading could be started if the applicant had submitted their grading application and a bond for the grading to be able to do that in advance of the final map. Commissioner Tuchscher was aware that it was commonly done in smaller tentative map situations. Mr. Krempl asked the Public Works Director Lippitt to comment on that. Mr. Lippitt stated it had been used in Terra Nova, EastLake, and much of Rancho del Rey. With such massive grading involved, to make drainage and other infrastructure work, it almost had to happen in some situations. That was in the City's usual ordinances. It was not a special condition or privilege given. PC Minutes -4- August 6, 1996 Commissioner Tuchscher saw this as a different situation because it was twice as big. He did not know if that made any difference from a public works standpoint or grading standpoint, but wanted to know if staff had thought that through. Mr. Lippitt said the whole tentative map was large, but it would not be developed that way. Commissioner Tuchscher asked if a grading approval to a final map would require some type of discretionary approval. Mr. Krempl stated it would require staff-level approval, in accordance with the tentative map, which had a minimum amount of grading shown. This being the time and the place as advertised, the public hearing was declared open. Donald Worley, 101 West Broadway, Ste 1300, San Diego 92101, representing the Jewels of Charity, the Birch Foundation, and the SNMB, LTD. was concerned about Section 11.2.4. He felt it was unfair that it was included in their agreements and not in some others, such as those of Baldwin and Mr. Smith. He felt they were being discriminated against. He did not think there should be any fear that they had some litigation history with the City that would be asking for dollar damages. Their desire was to develop their property and get their entitlements. Probably the most effective remedies for them would be something like specific performance or injunction rather than dollar damages. It was his experience as a litigation attorney that when parties to agreements had some exposure monetarily as well as otherwise, that they treated their obligations more seriously. Having no limitations on remedies in a contract was very important for compliance and performance by both parties. Everybody should be equally exposed to any remedy; should there be a default, it was really what guaranteed that everybody would perform. He asked that the new language be stricken from Section 11.2.4, not only in that agreement but in the other two agreements, as well. Commissioner Salas asked if the monetary damages exceeding costs that the applicant may lose was considered a monetary damage. Mr. Worley answered affirmatively, but he said that was assuming a delay in the project would constitute breach of the agreement. It may not. It may normal processing that would have nothing to do with the agreement. Commissioner Salas asked if the language was not included, the applicant could sue in excess of what it would cost the applicant. Mr. Worley replied that they would only be entitled to what they could prove under the law. Attorney Googins, in terms of monetary damages, stated there was a variety of potential monetary damages, both actual that they suffered, punitive damages, and consequential damages directly suffered. He did not think in the situation of default by the City that they would be entitled to those things. His argument would be that that was not what was contemplated when the City entered into the agreement. They were not reasonable, foreseeable damages in light of what the City considered to be the benefit of their bargain. This provision was to memorialize and contractualize an uncertainty but one staff thought properly allocated the risks and benefits and burdens on each party. It went both ways. PC Minutes -5- August 6, 1996 Commissioner Davis noted that Mr. Worley had said this was not in other development agreements. Mr. Worley stated he did not believe the added language was in the Baldwin or Smith agreements. Mr. Krempl confirmed that it was not. Mr. Worley used an example of a case in which he had been involved, and noted that when a municipality had no monetary exposure, it had no incentive to be reasonable, no incentive to settle, and every incentive to drag out the lawsuit. He thought the existence of some monetary remedy made both parties treat their obligations more seriously. Attorney Googins thought there were adequate remedies for the applicant; namely, a mediation provision, attorneys' fees provision, and underlying any particular agreement was the understanding that they were entering the agreement in good faith. Commissioner Davis noted that mediation was not binding. Attorney Googins concurred, but said it was something the City would have to participate in in good faith, and there was nothing that precluded the City, facing a challenge hy the developer, from in fact settling an issue from a monetary standpoint. That could be agreed to in a settlement context. Vice Chair Davis asked if Attorney Googins believed the risk of breach of contract to the City or developer would be an equal liability. Who had the greatest risk? Commissioner Tuchscher felt the benefit largely fell on the side of the developer. They got vested for a long period of time, bringing them entitlements that added valued property. They City was giving up a great deal of control in the way of discretionary approvals and entitlement issues, land use issues, by executing the agreement. That control directly benefited the developer long-term. Mr. Tuchscher did not believe monetary damages were appropriate. The document should give the developer and/or owner property rights and the City the benefit of annexation, etc. If there was a dispute, it should be resolved, but he did not think monetary damages helped to do that. Commissioner Willett, referring to Section 11.2.4, asked why all the agreements were not the same. Mr. Krempl explained that the United Enterprises, Village Development, and Greg Smith agreements were approved without this language. The agreements being considered at this meeting and any subsequent agreements would contain this language. The City would defend the language in any of the agreements; however, given the opportunity to be able to clarify further an uncertainty, the City felt it was preferable to add the language. Greg Smith, representing SNMB, stated the City was getting a 1,000 foot easement all the way the Baldwin property in perpetuity forever. The statements that the developer was getting the advantage, and the developers were taking advantage of the development agreement, SNMB was giving up several acres the City was not paying for, and also giving up all right-of-way to SR- 125 for free. He was not sure it was just a one-sided image. PC Minutes -6- August 6, 1996 No one else wishing to speak, the public hearing was closed. MSUC (Thomas/Willett) 5-0 (Commissioners Ray and Tarantino absent) to recommend adoption of Ordinance 2687, Jewels of Charity, as presented by staff with the new language. Vice Chair Davis commented that she did not like 11.2.4 either, but it was in the best interest of the City to include it. She would leave it up to the Council as to whether to they wanted to keep it in. Deputy City Manager Krempl suggested that the Commission then consider Ordinance 2689, Stephen and Mary Birch Agreement, since there were no additional issues and that agreement was the same as the Jewels of Charity. (C) ORDINANCE 2689 - STEPHEN AND MARY BIRCH FOUNDATION AND THE CITY OF CHULA VISTA (first reading) Since there were no further comments from Mr. Krempl, Vice Chair Davis opened the public hearing. No one wishing to speak, the public hearing was closed. MSUC (Tuchscher/Thomas) 5-0 (Commissioners Ray and Tarantino absent) to recommend adoption of Ordinance 2689, Stephen and Mary Birch Foundation, as presented by staff with the modified language outlined by Mr. Krempl. (B) ORDINANCE 2688 - SNMB, LTD. AND THE CITY OF CHULA VISTA (first reading) Deputy City Manager Krempl stated that the same language change to Section 2.19, the conveyance plan definition, and Section 11.2.4 was suggested. The other unique issue to the SNMB agreement had to do with SR-125 and the right-of-way dedication. The developer had asked them to include some additional language in Section 7.2.3, page 13 of the agreement. With the prior agreements, the same condition was included. Subsequent to the June 25 hearing, the applicant in discussion with staff had noted there was no chosen alignment at this point for SR-125. There was a draft EIR and alternative alignments. Three suggested alignments would go through the SNMB ownership, referred to as the GDP alignment, Brown Field alignment, and a Brown Field alignment modified. The developer was willing to dedicate the right-of-way for the freeway but if it was an alignment other than the alignment on the GDP, they wanted to be made whole in terms of their land uses that would be lost by virtue of the freeway being realigned to some other location. Staff had included Section 7.2.3 that the City would reasonably consider in its discretion, with proper environmental review, a request to relocate any displaced land uses if an alternative other than the GDP alternative was selected. That language PC Minutes -7- August 6, 1996 or something along those lines had been initially suggested by the developer; however, they had concluded that that wasn't enough, and staff could not provide the absolute guarantee that they wanted. The developer's recommendation was to obligate them only to dedicate the 125 right- of-way depicted on the general development plan, and if there was any other alternative, that would be subject to a meet-and-confer between the parties. Regarding Mr. Smith's comment about the easements, Mr. Krempl said those easements were being granted to the County of San Diego and not to the City of Chula Vista. Also, there were nuisance issues regarding compatible activities adjacent to the landfill within 1,000 feet. They did not preclude the owner getting a fair economic return nor reasonable use of that property. It did limit non-residential uses within that 1,000 feet. Commissioner Willett stated that the CalTrans map did not show the dotted line for SR-125. He was concerned that it would confuse the public at the public forum to be held, when it showed only two alignments. Mr. Jamriska replied that the dotted line was the alignment shown in the GDP. Mr. Krempl stated that the three alignments were strictly with respect to this one property owner and this development agreement. Mr. Googins noted that the GDP alignment was not currently being considered and evaluated by CalTrans. That was why they would not want to have a development agreement that only compensated that. Mr. Krempl further commented that on the Brown Field modified alignment, it was staff's understanding that where that alignment splits off from the GDP alignment, it only impacted open space on the developer's land use plan. So there would be no land use impact from that alternative. The Brown Field alignment, however, did impact approved GDP land uses. This being the time and the place as advertised, the public hearing was opened. Donald Worley, representing SNMB, stated that the dedication for SR-125 was a major deal in terms of the agreement. There was no legal way the City could have extracted this as part of the normal development of a subdivision process. It was only through that agreement that that dedication was made. They were content with that, but they were concerned about how to fairly deal with the unknown. They could make the commitment to dedicate SR-125 if it was either the GDP alignment or the Brown Field modified alignment. The problem came in with the Brown Field alignment which had a major impact on their land uses. The agreement could not legally commit to future action. Mr. Worley said that Section 7.2.3 was a loser; it did not give the developer any comfort because it did not bind the City to do anything. The developer could not be expected to make a commitment totally blind. Both parties should suffer the uncertainty and both should deal with the uncertainty and commit that they would meet and confer in good faith to resolve the issue. Until that was resolved, they could not be expected to make a commitment to dedicate right-of-way when they did not know where it was going to go. Commissioner Willett asked if they liked the Brown Field modified alignment. Mr. Worley said either the Brown Field modified or the GDP alignment would be fine with them. They would agree with the language in 7.2.1 to the extent it identified those two alternative alignments, but PC Minutes -8- August 6, 1996 if it was any other language than that, they would want new language that just says if it was another alignment that they would meet and confer concerning the dedication and concerning replacement of land uses. No one else wishing to speak, the public hearing was closed. In response to Commissioner Thomas, Mr. Krempl said it was a policy issue, and staff felt and would argue that this was a quid pro quo for entering into the development agreement and was one of the things that the City felt it was getting, needs to get, and wants to get. There was some uncertainty there. The City was willing to address it fairly in the future, but there could not be a guarantee or predecision made. That was understood with the other development agreements, and included in a similar fashion. While acknowledging Mr. Worley's point, staff felt it was part of the business deal that was made in consideration of the agreement. Attorney Googins said it was a valid provision for the City to ask for this and for them to agree. Staff's version of the provision was enforceable and appropriate. The applicant still had an opportunity to comment on the EIR. Commissioner Salas thought staff wanted the language to remain the same, but if there was the Brown Field alignment, you would revisit it with the developer. Mr. Krempl replied that that was the developer's proposal. Attorney Googins stated there was one caveat. There was a provision where the City could reasonably consider their request to relocate the land uses, if in fact there was an alternative alignment. In effect they would be revisiting it but not with the meet and confer concept that they were proposing. Commissioner Salas asked what was the difference between meet and confer and reasonably considering. Attorney Googins said the material difference between what the applicant was proposing and what the City was proposing was the City wanted the applicant to dedicate whatever the alignment was determined to be, and in fact if was the alignment that caused them some land use parting, the City would agree to consider appropriate reallocation of those land uses. They wanted to commit only to the GDP alignment or the Brown Field modified alignment. The applicant did not want to be obligated to dedicate the Brown Field alignment until they met and conferred with the City and gave them adequate assurance that relocation of those land uses would be effectuated before they are committed to dedicate the Brown Field alignment. Commissioner Salas thought that sounded reasonable. She thought the City was asking them to perhaps give away too much. Mr. Krempl replied that if that was taken as an isolated item it would be easy to reach that conclusion. They needed to look at it in the context of the total development agreement. On the City's side, there was the issue of dedicating the right-of-way of SR-125 regardless of its location in exchange for vesting their land use, entitlements, giving them a 20-year development agreement, etc. PC Minutes -9- August 6, 1996 Commissioner Willett noted that the SR-125 Committee was going forward in recommending the modified Brown Field alignment, which had less impact on the development, less impact on the environment, and did not impact the La Media road going through. Commissioner Tuchscher thought that the way staff had added the language was that regardless of the alignment, there was certainty from the City's standpoint that SR-125 could be built through that area. Without staff's language, it becomes uncertainty relative to that segment of SR-125 in that if it varies from the GDP, it was contingent upon seeking agreement with that land owner relative to land use. So, the whole freeway segment becomes an unlcnown. By adding that language, the City was trying to make sure that dedication was there. Mr. Tuchscher felt that a change of land use that kept their total number of units and densities, etc. would be something he would look at very favorably. He would look at shifting those land uses to compensate them and make sure that they were made whole. That could not be done at this meeting. They had to, from the City's perspective, make sure that SR-125 did not have a weak link and could be built with certainty that the alignments were in place. Commissioner Salas asked if there was something that could be used that would be stronger that would assure the developer rather than "shall reasonably consider" or was that as much of a guarantee that could be given the developer. Mr. Krempl said there had to be discretion, and there had to be environmental review. So it was not an absolute. He did not know if there was anything short of an absolute that would satisfy the developer. Commissioner Thomas thought that due to the magnitude of SR-125, everyone needed to acknowledge that SR-125 had to be built. The Planning Commission should make a commitment to that, and keep the City in control to guarantee that SR-125 would be built because it was such a main artery to the viability of the East County. It had to be built. He wanted the City to be able to negotiate. MS (Tuchscher/Thomas) to approve the development agreement as presented by staff with the changes noted. Commissioner Salas said she understood how the developer would have some hesitation about the language in this, because there was no guarantee for it, but she had to agree with Commissioner Thomas that SR425 was absolutely necessary. She would support the motion. VOTE: 5-0 (Commissioners Ray and Tarantlno absent) Since Commissioner Ray had not yet arrived, Vice Chair asked if the Commission would like to entertain a motion to excuse him. MSUC (Tuchscher/Thomas) 5-0 to excuse Commissioner Ray because of business commitments. PC Minutes -10- August 6, 1996 ADJOURNMENT at 7:20 p.m. to the Regular Business Meeting of August 14, 1996, at 7:00 p.m. in the Council Chambers. Nancy RilYley, Secreta~ Planning Commission (m:\hoine\planning\nancy\pc96min\pc8 6rain)