HomeMy WebLinkAboutAgenda Report - October 17, 2012 J-01AGENDA ITEM J-01
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE: Ordinance No. 1865 Entitled, "An Ordinance of the City Council of the City of Lodi
Partially Rescinding and Amending Development Agreement Pertaining to the
Development of 220 Acres Located on the South Side of Harney Lane Between
State Highway 99 and the Union Pacific Railroad to the West (Reynolds Ranch)
(Development Agreement 06 -GM -01)"
MEETING DATE:
PREPARED BY:
October 17,2012
City Clerk
RECOMMENDED ACTION: Motion waiving reading in full and (following reading by title)
adopting the attached Ordinance No. 1865.
BACKGROUND INFORMATION: Ordinance No. 1865 entitled, "An Ordinance of the City Council of
the City of Lodi Partially Rescinding and Amending Development
Agreement Pertaining to the Development of 220 Acres Located on
the South Side of Harney Lane Between State Highway 99 and the Union Pacific Railroad to the West
(Reynolds Ranch) (Development Agreement 06 -GM -01)," was introduced at the regular City Council
meeting of October 3, 2012.
ADOPTION: With the exception of urgency ordinances, no ordinance may be passed within five days of
its introduction. Two readings are therefore required - one to introduce and a second to adopt the
ordinance. Ordinances may only be passed at a regular meeting or at an adjourned regular meeting;
except for urgency ordinances, ordinances may not be passed at a special meeting. Id. All ordinances
must be read in full either at the time of introduction or at the time of passage, unless a regular motion
waiving further reading is adopted by a majority of all council persons present. Cal. Gov fCode§ 36934.
Ordinancestake`effect 30 days after their final passage. Cal. Gov fCode§ 36937.
This ordinance has been approved as to form by the City Attorney.
FISCAL IMPACT:
FUNDING AVAILABLE:
RJ/jmr
Attachment
None.
None required.
.I- -r
Randi o
City Clerk
IT7 -
APPROVED: t
—Ko'firadt Bartlam, i y anager
N:\Administration\CLERK\Council\COUNCOM\Ordinancel. DOC
ORDINANCE NO. 1865
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LODI
PARTIALLY RESCINDING AND AMENDING DEVELOPMENT AGREEMENT
PERTAININGTO THE DEVELOPMENT OF 220ACRES LOCATED ON THE
SOUTH SIDE OF HARNEY LANE BETWEEN STATE HIGHWAY 99 AND THE
UNION PACIFIC RAILROAD TO THE WEST (REYNOLDS RANCH)
(DEVELOPMENT AGREEMENT 06 -GM -01)
BE IT ORDAINED BY THE CITY COUNCIL OF THE CELY OF LODI AS FOLLOWS:
SECTION 1. The Lodi City Council passed Ordinance No. 1785 approving a
Development Agreement covering the following property:
220 ACRES LOCATED ON THE SOUTH SIDE OF HARNEY LANE
BETWEEN STATE HIGHWAY 99 AND THE UNION PACIFIC
RAILROAD (UPRR) TO THE WEST — ASSESSORS PARCEL
NUMBERS 058-110-04, 058-110-41, 058-130-06, 058-130-07,
058-130-08, 058-130-09, 058-130-11, 058-130-15, 058-130-16,
058-130-21, 058-130-22,058-130-24, AND 058-130-04.
SECTION 2. San Joaquin Valley Land Company LLC. ("SJVLC"), the sole party to the
above referenced Development Agreement, requested that the agreement be partially
rescinded and amending by letter of September 24, 2012, a copy of which is attached
hereto and incorporated by reference. However, SJVLC, Citizens for Open Government
and the City entered into a settlement agreement dated August 26, 2006 ("Settlement
Agreement"), the obligations of which were incorporated into the Development
Agreement and into the California Environmental Quality Act (CEQA) approvals set forth
in Resolution 2006-162. This ordinance shall not terminate any of the obligations set
forth in the Settlement Agreement. Moreover, CEQA Resolution 2006-162 shall continue
in full force and obligate Frontiers to comply with all of the obligations set forth in the
Settlement Agreement.
SECTION 3. The City Council hereby finds that partial termination of the Development
Agreement and amendment as set forth in the attached Mutual Agreement to Terminate
Development Agreement is in the best interest of the City to ensure that any construction
is subject to the new impact mitigation fee program, and to eliminate conditions in the
Development Agreement that could present barriers to housing construction in the
current economy.
SECTION 4. The City Council hereby finds that the partial termination of the
Development Agreement and amendment as set forth in the attached Mutual Agreement
to Terminate Development Agreement is consistent with the General Plan land use
designation and the zoning for the proposed Development.
SECTION 5. The City Council hereby adopts Ordinance No. 1865 partially rescinding
and amending the Development Agreement by and between the City of Lodi and SJVLC
as set forth in the attached Mutual Agreement to Terminate Development Agreement.
However, the Settlement Agreement and CEQA Resolution 2006-162 shall continue in
full force and obligate SJVLC to comply with all of the obligations set forth in the
Settlement Agreement.
SECTION 6. No Mandatory Duty of Care. This ordinance is not intended to and shall not
be construed or given effect in a mannerwhich imposes upon the City, or any officerfor
employee thereof, a mandatory duty of care towards persons or property within the City
or outside of the City so as to provide a basis of civil liability for damages, except as
otherwise imposed by law.
SECTION 7. Severability. If any provision of this ordinance or the application thereof to
any person or circumstances is held invalid, such invalidity shall not affect other
provisions or applications of the ordinance which can be given effect without the invalid
provision or application. To this end, the provisions of this ordinance are severable. The
City Council hereby declares that it would have adopted this ordinance irrespective of
the invalidity of any particular portion thereof.
SECTION 8. This ordinance shall be published onetime in the "Lodi News -Sentinel," a
daily newspaper of general circulation printed and published in the City cf Lodi, and shall
take effect 30 days from and after its passage and approval.
Approved this 17th of October, 2012
,/JOANNE MOUNCE
fMayor
L
City Clerk
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State of California
County cf San Joaquin, ss.
I, Randi Johl, City Clerk of the City cf Lodi, do hereby certify that Ordinance
No. 1865 was introduced at a regular meeting of the City Council of the City of Lodi held
October 3, 2012, and was thereafter passed, adopted, and ordered to print at a regular
meeting of said Council held October 17, 2012, by the following vote:
AYES: COUNCIL MEMBERS— Hansen, Johnson, Katzakian, Nakanishi,
and Mayor Mounce
NOES; COUNCIL MEMBERS— None
ABSENT: COUNCIL MEMBERS— None
ABSTAIN: COUNCIL MEMBERS— None
I further certify that Ordinance No. 1865 was approved and signed by the Mayor
on the date of its passage and the same has been publ' d pursuant to law.
Di J L
Approved as to Form: City erk
D. STEPHEN SCHWAS
City Attorney
2
san joaquin
valley land
companyai Ic
August 13,2012
W.Rad Bartlam, C (Manager
City ofLodi
221 W. Pine Street
Lodi, CA 95240
FE. Request t:)TerminateReynoldsRanch Development Agreement
This letter concerns the DevelopmentAgreem=4 MAI, forthe ReynoldsRanch project
approvedon August 30,2006 by the Lodi City Council.
On behalf of SJVLC, I am requesting that the DA be terminated. The project is not sustainable
financially with the DA in effect due to the combinationof the cost ofthe obligations and the
much lower land values since the DA and the project were originaIlyapproved in 2006. We
understand that we will lose any benefits orntained m the DA upon term i pati o n.
Please contactme at your earliest convenience so that we may discuss the steps necessary by us
and the City in place this item on a City Council meetingagenda as soon as possible.
Sincerely,
DaleN. Gillespie, MauagingMember
San Joaquin Valley Land Compagy, LLC
cc: SJVLC members
1420 south mile no, etc. It • I", as DOM o 2094334M • fax 208.8888804
MUTUAL AGREEMENT TO TERMINATE
DEVELOPMENT AGREEMENT
This Mhsl Agreement to Terminate Development Agreement (Agreement) is
made this day of , 2012 by and between the City of Icd, a
California general law city (Lodi) and San Joaquin Valley Land Company LLC
(Landowner or Developer) and terminates that certain Development Agreement entered
into by the parties on September 6, 2006 (Development Agreement) regarding the
Reynolds Ranch Project (the "Project").
RECITALS.
A Landowner owns or controls certain real property generally known as the
Reynolds Ranch Project and more specifically described in Exhibit A which is attached
hereto and incorporated herein by this reference.
B. In 2005 Blue Shield of California, ("BSC"), which at the time employed
over 600 employees in 3 separately leased Lodi facilities, and constituted one of Lodi's
largest private employers, desired to consolidate their operations into a single owned
location and thereafter expand their employment to 1100 employees. Despite bast efforts
by the City of Lodi, BSC was unable to find a suitable location within the then current
Lodi municipal boundary and subsequently BSC decided to locate its new facility in
Stockton.
C. The City of Lodi was discouraging residential development applications
during this period of time, as it anticipatedupdating Lodi's General Plan, a process which
had not yet begun.
D. During this same time, Landowner proposed developing a mixed use project
adjacent to Highway 99 and South of Harney Lane that would be designed to
accommodate Blue Shield's needs in the proposed Project. The Project as conceived and
designed included approximately 1,100 residential units of various types, office uses, and
an anchoredretail shopping center.
E Negotiations between BSC and Landowner resulted in an enforceable
agreement in favor of BSC purchasing a 20.5 acre campus within the Project site
contingent upon Lodi and San Joaquin County LA.FCo approving the annexation of the
Project site to Lodi and Lodi granting related land use entitlements wM- n a aertain time
frame. BSC leveraged the fact that they had already secured the Stockton site due to
BSC's ir&14to earlier locate a suitable site in Lodi to negotiate a substantial land price
oorwessicn and a cap on its contribution to infrastructure far below BSC's fair share
contribution.
F. Under State law and local ordinance development agreements between
Lodi and land owners are optional. Lodi and Landowner entered into the Development
Agreement, CDA'), for purposes of, on Developers part: securing vested development
rims; and on City's part: securing community benefits and applying conditions of
approval tl were functionally equivalent to the conditions of approval that were
anticipated to be imposed by the yet to be adopted Geral Plan gxhbe.
G. Cn September 6,2006 Lodi and Landowner entered into the Development
Agreement, effective on October 6,2006.
H. Lodi and LAFCo approved the annexation and related entitlements in
August, 2006 and January, 2007 respectively. Landowner funded and constructed
substantial dedicated public infrastructure for Phase 1 of the Project in order for BSC to
construct and occupy the facility within B S C's identified time constraints. The public
infrastructure, including the re -alignment, dedication of land for rights of way totaling
almost 12 acres, and construction of the Hwy 99 frontage road, (now called Reynolds
Ranch Parkway), to accommodate future reconstruction of the Hwy 99/Harney Lane
interchange, in addition to a sewer line oversized to accommodate fixture development
East of Hwy 99, was not reimbursed by the City of Lodi.
I Landowner completed Phase 1 of Reynolds Ranch and BSC completed
their 160,000 square foot facility and moved in November of 2008, adding 500 new j obs
to the 600 hundredjobs saved for a total of 1,100jobs.
I Economic conditions deteriorated rapidly beginning in 2007 before any
residential development plans could be filed for and processed.
K. Landowner continued to attempt to develop other portions of the Project
in spite of highly negative economic conditions without success, except for the Phase 2
retail shopping center. Both Costco and Home Depot became interested in the regional
draw of Reynolds Ranch to a population center of over 190,000 people due to its
proximity and access to Highway 99 and nearby roads tl-Et- access the many foothill
communities and rrrth Stockton. However, though the letters of intent were signed for
these two retailers in 2007, both postponed their development and constructionplans with
Costco starting in October 2010 and Home Depot starting in August 2011,which resulted
in greatly reduced land sales prices and lower reimbursements of their offsite obligations
otherwise owed to Landowner. In addition, significantunreimbursed holding costs were
incurred betvxm 2007 and 2010.
L. Phase 2 of Reynolds Ranch is currently being completed and Costco and
Home Depot have opened Many of the improvements in this phase have far-reaching
benefits. The Phase 2 public improvements have also not been reimbursed to
developer including two new signals on Reynolds Ranch Parkway, Developer's $1.4
million cost for the Hwy 991Hamey Lane interim interchange improvements, and the
engineering and related snit costs for the Hwy99M=ey Lane interim interchange
improvements.
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M. The Costco store generates significant saps tax revenue for Lodi. It also
employs at least 180 employees, 20 in management positions. Approximately two-thirds
of Costco's sales are to non -Lodi residents, creating additional sales opportunities for
local merchants.
N Home Depot opened its first LEED-certified 135,000 square foot store,
which is one of the only "new -market" stores it opened in 2012. This store draws
national attention as the only Home Depot store outfitted with state of the art energy
management systems as part of a U.S. Department of Energy grant. The Lodi store is the
test site for these systems on an on-going basis. The Home Depot employs
approximately 150 employees, ncst full time. It is projected to create significant sales
tax revenue to the City. Like Costco, approximately two-thirds of the projected sales
volume is expectedto be derived from non -Lodi residents.
O. Subsequent to the entry of the Development Agreement, the City adopted its
anticipated General Plan but that General Plan did not contain many of the conditions
anticipated in the Development Agreement.
P. Govemment Code Section 65868 authorizes the parties to terminate the
Development Agreement upon mutual consent and providing the public notice required
by Government Code Section 65867.
Q Therefore, the City finds the public interest has been served by locating
the Blue Shield, Home Depot, Costco and other retail users at Reynolds Ranch. Further,
the City finds the exactions imposed by the Development Agreement represent
significant obstacles to the development of the residential aspect of the approved mixed
use plan and the City w i I I not enjoy the additional benefits flowing from full build ait of
this approved mixed use Project. Further, the City finds tht the exactions imposed by
the Development Agreement place the residential aspect of the mixed use plan at a fatal
economic disadvantage in relationship to other pending or future residential projects in
Lodi which do not carry the weight of the Development Agreement's conditions. The
City further fits that conditions and terms imposed by the recently enacted General Plan
L are appropriate to the residential aspects of the Reynolds Ranch Project, fulfill the
public interest and are the functional equivalent to the ad hoc conditions imposed by the
Development Agreement.
Subject to the terms and conditions contained herein, the parties terminate the
Development Agreement as of this Agreement's effective date. Thereafter the parties
shall have no rights or duties to one another (except as set forth herein) or any third party
from any and a I I rights or obligations arising from the Development Agreement, whether
or not such rights or otic s have been fully or partially enjoyed and/or performed or
if the enjoyment of the right or performance of the obligation has not yet happened. Itis
the intention of the parties that upon the effective date of this Agreement the parties shall
M
m longer have any rights or obligations between themselves under the Development
Agreement except as set forth herein.
A. Obligations Arising from Existing Benefits: The obligations set forth below,
which were triggered under the Development Agreement prior to this Termination
Agreement but have not yet been satisfied by the Developer shall continue in full force
and effect. In the event Developer has failed to meet any of the obligations set forth
below at the time Developer applies for any development entitlements within the Project,
City will be entitled to refuse to process the application until the below listed obligations
are fully satisfied.
i) Electric Utility Impact Fees. Developer shall pay an amount to be
billed by the City not to exceed $291,336.28 in electricud14 Line
Extension Costs called for in paragraph 6.4.10 of the Development
Agreement by January 1,2013.
Developer and Citizens for Open Government and the City entered
into a settlement agreement dated August 24, 2006 ("Settlement
Agreement''), the obligations of which were incorporated into the
Development Agreement and into the CEQA approvals set forth in
Resolution 2006-162. This agreement shall not terminate any of
the obligations set forth in the Settlement Agreement. Moreover,
CEQA Resolution 2006-162 shall continue in full force and
obligate Developer to comply with all of the obligations set forth
in the Settlement Agreement.
hi) Agricultural Mitigation. Developer shall satisfy the Agricultural
b itigaticn Requirements set forth in Paragraph 6.1.2 and 6A1 of
the Development Agreement at the times required by those
sections. This oblization, among others. is also included in the
SettlementAzreement referenced in section 2.A.ii above.
iv) Maintenance of Public Improvements. Developer shall comply
with the requirements of Paragraph 6.4.5 of the Development
Agreement.
V) Dedication of Fire Stadm Property. Developer shall comply with
the requirement of Paragraph 6Ati6 of the Development Agreement
to dedicate property for a Fire Stall im. The remainder of the
requirements of paragraph 6.4.6 shall be terminated.
vi) Public Art. Developer shall comply with the requirement to Install
public Art set forth in the Project set forth in Paragraph 6Ati8 of the
Development Agreement. The $60,000 amount shall be reduced
by the ratio that the acres of Project land developed as of the date
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of this Agreement bears to the total acreage of the Project (52.7
acres/220 acres which equals $14,373-00).
A. Portions of the Project Already Constructed.
Those portions of the Project already constructed shall be regarded as vested form
any changes in the ordinances, standards and policies in effect at the time the
Development Agreement was effective and shall not be subject to any new ordinances,
standards or policies enacted subsequently.
B. Pa ti m of the Project not Yet Constructed.
Those portions of the Project that have not yet obtained a building pen -nit fmn the
City of Lodi shall be subject to the ordinances, standards and policies in effect at the time
the building permit application is submitted unless Landowner first obtains a vested right
affecting the applicability of such ordinances, standards and policies through a vesting
tentative map, a development agreement or some other form of right.
4. NUCELLENOUS PROVISIONS.
A. Rrtial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term or
provision to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each such term and provision of this
Agreement shall be valid, and shallbe enforced to the fullest extentpermitted by law.
B. Waivers. No waiver of any breach of any covenant or provision
herein contained shall be deemed a waiver of any preceding or succeedingbreach thereof,
or of any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed an extension of time for
Performance of any other obligation or act except those of the waiving party, which shall
be extended by a period of time equal to the period of the delay.
C. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the permitted successors and assigns of the parties hereto.
D. Professional Fees. If either party commences an actin against the
other to interpret or enforce any of the terms of this Agreement or because of the breach
by the other party of any of the Is hereof, the losing party shall pay to the prevailing
party reasonable attorneys' fees, costs and expenses and oaart costs and other costs of
actitn incurred in connection with the prosecution or defense of such action, whether or
not the action is prosecuted to a final judgment. For the purpose of this Agreement, the
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terms "attorneys' fees" or "attorneys' fees and costs" shall mean the fees and expenses of
counsel to the parties hereto, which may include printing, photostating, duplicating and
other expenses, air freight charges, and fees billed for law clerks, paralegals, librarians
and others not admitted to the bar but performing services under the supervision of an
attorney. The terms "attorneys' fees" or "attorneys' fees and costs" shall also include,
without limitation, all such fees and expenses incurred with respect to appeals,
arbitrations and bankruptcy proceedings, and whether or not any action or proceeding is
brought with respect to the matter for which said fees and expenses were incurred. The
tem "attorney" shallhave the same meaning as the teen"counsel."
E Rthe A erg ement. This Agreement (including all Exhibits attached
hereto) is the feral expression of, and contains the entire agreement between, the parties
with respect to the subject matter hereof and supersedes all prior understandings with
respect thereto. This Agreement may not be modified, changed, supplemented,
superseded, canceled or terminated, nor may any obligations hereunder be waived, except
by Written instrument signed by the party to be charged or by its agent duly authorized in
writing or as otherwise expressly penrdtt ed herein. The parties do not intend to confer
any benefit hereunder on any person, film or corporation other thm the parties hereto and
lawful assignees.
F. Time of Essence. City of Lodi and Landowner hereby acknowledge and
agree tib time is strictly of the essence with respect to each and every term, condition,
obligation and provision hereof and that failure to timely perform any of the team,
amdidm, obligations or provisions hereof by either party shall constitute a material
breach of and a non -curable (but waivable) default under this Agreement by the party so
failing to perform.
G Construction. Headings at the beginning of each paragraph and
subparagraph are solely for the convenience of the parties and are not a part of the
Agreement. Whenever required by the context of this Agreement, the singular shall
include the plural and the masculine shall include the feminine and vice versa. This
Agreement shall not be construed as if it had been prepared by one of the parties, but
rather as if both parties had prepared the same. Mew otherwise indicated, all references
to paragraphs, swd=, subparagraphs and subsections are to this Agreement. All
exhibits referred to in this Agreement are attached and incorporated by this reference.
H. Governing Law. The parties hereto acknowledge that; this Agreement has
been negotiated and entered into in the State of California. The parties hereto expressly
agree t3& this Agreement shall be governed by, interpreted under, and construed and
enforced in accordance with the laws of the Sbate of California.
I Days of Week. If any cls for performance herein falls on a Saturday,
Sunday or holiday, as defined in Section 6700 of the California Government Code, the
time for suchperformance shall be extendedto 5;00 pm, on the next business day.
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J. No Construction Against Drafting R3ctw. The parties agree that this
Agreement was jointly negotiated and jontly drafted and that is shall not be interpreted
or construed in favor of or against any party on the ground that the party or the parties'
attorney draftedth is Agreement;
IN WITNESS THEREOF this MUTUAL, AGREEMENT TO TERMINATE
DEVELOPMENT AGREEMElff is effectivethis day of ,2012.
ATTEST:
RANDIJOHL
C i Clerk
APPROVED AS TO FORM:
By:
D. STEPHEN SCHWABAUER,
City Attomey
7
CITY OF LODI, a municipal corporation
KONRADT BARTLAM
City Manager
SAN JOAQUIN VALLEY LAND COMPANY, LLC
By:
Name:
Title: