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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 ------------------------------------------------------------------- ------------------------------------------------------------------- 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. 2 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 4 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 5 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. 6 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: