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HomeMy WebLinkAboutAgenda Report - November 3, 2021 C-15AGENDA [TEM . r ,5 CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Adopt a Resolution Authorizing the City Manager to Execute a Supplemental Funding Agreement with Encore Housing Opportunity Fund III, LLC, a Delaware Limited Partnership, Qualified to do Business in California, to Pay Its Proportional Benefit of the Costs Related to the Sphere of Influence, Municipal Services Review Updates, and Associated Environmental Review ($23,900) MEETING DATE: November 3, 2021 PREPARED BY: Community Development Director RECOMMENDED ACTION: Adopt a resolution authorizing the City Manager to execute a Supplemental Funding Agreement with Encore Housing Opportunity Fund III, LLC, a Delaware Limited Partnership, qualified to do business in California (Encore) to pay its proportional benefit of the costs related to the Sphere of Influence (SOI), Municipal Services Review (MSR) updates, and associated environmental review in the amount of $23,900. BACKGROUND INFORMATION: The City of Lodi has undertaken efforts associated with updating its SOI and MSR. The SOI and MSR were last updated in 2008. A generally accepted standard requires updates every five years. The documents are considered out of date by the San Joaquin County Local Agency Formation Commission (LAFCo), and LAFCo will not entertain any applications for annexation to the City until the documents have been updated. The SOI and MSR updates and the associated environmental review involve a substantial effort on the part of City Staff and consultants retained by the City. The efforts undertaken by the City on the updates and the associated environmental review may facilitate processing of a request for annexation at a later date, should Encore choose to pursue development of the South Study Area. This area, referred to as the South Study Area for the purpose of these updates, includes a collection of properties that may be appropriate for annexation at a future date. Staff issued a Request for Proposals seeking consultant services to prepare the environmental review associated with the SOI and MSR updates. In April 2021, the City Council authorized the City Manager to execute Professional Services Agreement with PlaceWorks to prepare an Environmental Impact Report for the updates. The cost of PlaceWorks is approximately $181,000, and the funding will be provided through a combination of Local Early Action Planning (LEAP) grant funds and SB 2 grant funds that were secured by Staff. In addition to services provided by PlaceWorks, City Staff and Planning Contract Staff will undertake a variety of efforts associated with the SOI and MSR updates. The additional staff costs are estimated to be $55,000. Grant funding is not available for these efforts. Due to the scope of efforts related to the SOI and MSR update, projects that are either under review or anticipated to be reviewed in the near term might benefit from the technical studies being completed by APPROVED: Steve Schwabauer Stephen Schwabauer, City Manager Encore Supplemental Funding Agreement November' 2.121 Page 2 of 2 PlaceWorks and City Staff. Based upon this potential benefit, City Staff defined a proportional benefit for three currently anticipated projects in the South Study Area and assigned each a share of the unfunded $55,000 related to City Staff efforts on the SOI and MSR updates. Encore may seek annexation and subsequent entitlements for land located in the South Study Area. The contribution by Encore is not associated with the processing of any annexation or project, but rather recognizes the benefits to Encore of an update to the SOI and MSR. In recognition of the potential benefits resulting from these efforts, Encore has agreed to provide a one- time payment of $23,900 to assist the City with the unfunded portion of the MSR, SOI, and related CEQA efforts. Staff recommends that the City Council authorize the City Manager to execute a Supplemental Funding Agreement with Encore Housing Opportunity Fund, III, LLC. FISCAL IMPACT. No Impact FUNDING AVAILABLE. The Funding Agreement assists the City with funding a portion of an unfunded obligation of approximately $55,000 associated with the SOI and MSR updates. Andrew Keys Andrew Keys Deputy City Manager/Internal Services Director John R. Della Monica, Jr. Community Development Director ENCORE HOUSING OPPORTUNITY FUND III, LLC SUPPLEMENTAL FUNDING AGREEMENT This Supplemental Funding Agreement ("Agreement") is made the _ day of November, 2021 by and among the City of Lodi, a municipal corporation, hereafter referred to as "CITY", Encore Housing Opportunity Fund III, LLC, a Delaware Limited Partnership, qualified to do business in California, hereafter referred to as "DEVELOPER", collectively the "Parties". RECITALS A. CITY has initiated certain planning efforts related to updating the City of Lodi's Sphere of Influence ("SOI") and Municipal Services Review ("MSR") for approval by the San Joaquin County Local Agency Formation Commission ("LAFCo"). These efforts will include but are not limited to evaluating the availability of municipal services in the City of Lodi SOI and adjacent lands and evaluating certain environmental impacts associated with potential development in the SOI and on adjacent lands. B. CITY's updated MSR, SOI, and environmental impact analysis, if approved and adopted, will benefit DEVELOPER if it should pursue future entitlements with the CITY because these steps are necessary to allow any future annexation approvals by LAFCo. Further, should DEVELOPER submit a future project application, it will be able to utilize some of the environmental analysis to meet California Environmental Quality Act ("CEQA") requirements which will provide considerable cost savings to DEVELOPER by not having to individually fund such work. C. CITY has secured grant funding for the majority of costs associated with updating the SOI and MSR and estimates that there will be approximately $55,000 in currently unfunded costs associated with completing the update of the SOI and MSR and the associated CEQA environmental review. D. CITY has identified three projects in and adjacent to the SOI that might benefit from the update of the SOI and MSR and the associated environmental review and has completed an analysis of the proportional benefits accruing to each property. It has been determined that the proportional benefit accruing to DEVELOPER is $23,900. E. The Parties acknowledge that they may enter into a future reimbursement agreement related to direct costs incurred by CITY in the processing of applications for the annexation of certain real property to the City of Lodi and subsequent entitlements associated with future development. F. The Parties further acknowledge that the California Fair Political Practices Act requires that DEVELOPER have no direction or control over the response times, selection, supervision, activities, recommendations or decisions of any outside consulting services retained by the City. AGREEMENT NOW THEREFORE in consideration of the mutual covenants made herein, and other good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, the Parties hereto agree as follows: 1. Recitals True and Correct. The Parties agree that the Recitals contained hereinabove are true and correct. 2. Supplemental Funding_. Upon execution of this Agreement, DEVELOPER shall deposit $23,900.00 cash (or other equivalent security in a form approved by the City Manager) with CITY. Such funds shall be expended by CITY for payment of actual cost of services associated with updating the MSR, SOI, and associated environmental review. 3. Contribution Not Contingent on Project Approval/No Entitlements Granted. The payment of the contribution identified herein is not contingent upon the approval of any entitlement. DEVELOPER understands that the update of the City of Lodi SOI and MSR and the associated environmental review is undertaken at a citywide level and will not result in the approval of any specific project. 4. No Damages. CITY, its elected and appointed officials, officers, agents, or employees shall not be responsible or liable to DEVELOPER for any damages of any type or description which may result from any delays associated with completion of the City of Lodi SOI and MSR update and associated environmental review, whether caused by the negligence of CITY, its elected and appointed officials, officers, agents, employees, or otherwise. 5. Notices. All notices required by this Agreement shall be in writing, signed by the authorized representative of the sender and shall be deemed to have been given when the same is personally served or upon receipt by express or overnight delivery, postage prepaid, or three (3) days from the mailing if sent by first class or certified mail, postage prepaid, addressed as follows: TO CITY City of Lodi Stephen Schwabauer City Manger 221 West Pine Street Lodi, CA 95240 TO DEVELOPER Trang TuNguyen, Project Manager Partnership 1566 David Street San Jose, CA 95126 6. California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of San Joaquin, State of California, or any other appropriate court in such county, and DEVELOPER covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 7. Waiver. No delay or omission in the exercise of the right or remedy by a non - defaulting party on any default shall impair such right or remedy or be construed as a waiver. Any waiver by either party or any default must be in writing and shall not be a waiver of any other default concerning the same and any other provision of this Agreement. 8. Attorney Fees. If either party to this Agreement is required to initiate or defend or is made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorneys' fees. Attorneys' fees shall include attorneys' fees on any appeal, and in addition a party entitled to attorneys' fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery, and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. 9. Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 10. Integration, Amendment. It is understood that there are no oral agreements between the Parties hereto affecting this Agreement and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements, and understandings, if any, between the Parties, and none shall be used to interpret this Agreement. This Agreement may be amended at any time by the mutual consent of the Parties by an instrument in writing and executed by the Parties. 11. Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the Parties hereunder unless the invalid provision is so material that its validity deprives either party of the basic benefit of their bargain or renders this Agreement meaningless. 12. Corporate Authority. The persons executing this Agreement on behalf of the Parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) that entering into this Agreement does not violate any provision of any other agreement to which said party is bound. 13. Indemnification, Defense and Hold Harmless. a. DEVELOPER agrees to and shall indemnify, defend and hold CITY, its council members, appointed officials, officers, agents, employees and representatives ("Indemnitees") harmless from liability for damage or claims of damage, for personal injury, including death, and claims for property damage which may arise from CITY's hiring of outside consultants andthe services. b. DEVELOPER's obligation under this section to indemnify, defend, and hold harmless Indemnitees shall not extend to liability for damage or claims for damage arising out of the sole negligence or willful act of CITY, its council members, appointed officials, officers, agents, employees or representatives. In addition, DEVELOPER's obligation shall not extend to any award of punitive damages against CITY resulting from the conduct of CITY, its council members, appointed officials, officers, agents, employees or representatives. C. With respect to any action challenging the validity of this Agreement or any environmental, financial, or other documentation related to approval of this Agreement, DEVELOPER further agrees to defend, indemnify, hold harmless, pay all damages, costs and fees, if any incurred to either Indemnitees or plaintiff(s) filing such an action should a court award plaintiff(s) damages, costs and fees, and to provide a defense for Indemnitees in any such action. d. This obligation in indemnify and defend City as set forth is binding on the successors, assigns or heirs of Developer and shall survive the termination of this Agreement or this Section 13. e. This Section 13 shall survive termination of this Agreement and is in addition to any other rights or remedies that the Indemnities may have under the law or under any other contract or agreements. In the event of any claim or demand made against any party which is entitled to be indemnified hereunder, City may, in its sole discretion, reserve, retain or apply any monies owing to the Developer under this Agreement, if any, for the purpose of resolving such claims; provided, however, City may release such funds if the Developer provides City with reasonable assurance of protection of the Indemnitees' interests. City shall, in its sole discretion, determine whether such assurances are reasonable. 14. No Waiver. Failure of City to monitor compliance with the requirements of this Agreement imposes no additional obligations on City and will in no way act as a waiver of any rights hereunder. (SIGNATURES TO FOLLOW ON NEXT PAGE) IN WITNESS WHEREOF, the Parties have executed and entered into this Agreement as of the date first written above. ATTEST: Jennifer Cusmir, City Clerk APPROVED AS TO FORM: LM Janice D. Magdich, City Attorney CITY OF LODI, a municipal corporation Stephen Schwabauer, City Manager Encore Housing Opportunity Fund III, LLC, a Delaware Limited Partnership, By: Name: Title: Address: RESOLUTION NO. 2021-295 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE A SUPPLEMENTAL FUNDING AGREEMENT WITH ENCORE HOUSING OPPORTUNITY FUND III, LLC, A DELAWARE LIMITED PARTNERSHIP QUALIFIED TO DO BUSINESS IN CALIFORNIA, TO PAY ITS PROPORTIONAL BENEFIT OF THE COSTS RELATED TO THE CITY OF LODI SPHERE OF INFLUENCE, MUNICIPAL SERVICES REVIEW UPDATES, AND ASSOCIATED ENVIRONMENTAL REVIEW ------------------------------------------------------------------------ WHEREAS, the City of Lodi has initiated certain planning efforts related to updating the Sphere of Influence (SOI) and Municipal Services Review (MSR) for approval by the San Joaquin County Local Agency Formation Commission (LAFCo); and WHEREAS, these efforts will include, but are not limited to, evaluating the availability of municipal services in the City of Lodi SOI and adjacent lands, and evaluating certain environmental impacts associated with potential development in the SOI and on adjacent lands; and WHEREAS, the updated MSR, SOI, and environmental impact analysis, if approved and adopted, would benefit applicants that might pursue future entitlements, possibly including Encore Housing Opportunity Fund III; and WHEREAS, the City has secured grant funding for the majority of costs associated with updating the SOI, MSR, and environmental impact analysis, and estimates that there will be approximately $55,000 in currently unfunded costs associated with completing the update of the SOI, MSR, and associated environmental review; and WHEREAS, the City has identified three projects in and adjacent to the SOI that might benefit from the update of the SOI, MSR, and the associated environmental review, and has completed an analysis of the proportional benefits accruing to each project; determining that there is a proportional benefit accruing to Encore Housing Opportunity Fund III in the amount of $23,900. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize the City Manager to execute a Supplemental Funding Agreement with Encore Housing Opportunity Fund III, LLC, a Delaware Limited Partnership, qualified to do business in California, for purposes of funding its proportional benefit of the City's direct costs related to the SOI and MSR updates and associated environmental review; and BE IT FURTHER RESOLVED, pursuant to Section 6.3q of the City Council Protocol Manual (Res. No. 2019-223), the City Attorney is hereby authorized to make minor revisions to the above -referenced document(s) that do not alter the compensation or term, and to make clerical corrections as necessary. Dated: November 3, 2021 ------------------------------------------------------------------------ ------------------------------------------------------------------------ I hereby certify that Resolution No. 2021-295 was passed and adopted by the City Council of the City of Lodi in a regular meeting held November 3, 2021 by the following vote: AYES: COUNCIL MEMBERS — Chandler, Hothi, Khan, Kuehne, and Mayor Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS — None "IENNIFE USMIR City Clerk 2021-295 Jennifer Cusmir From: G Funamura <gumph09@comcast.net> Sent: Tuesday, November 2, 2021 4:23 PM To: City Council Comments Subject: November 3, 2021 Meeting, Agenda Items C-13 & C-14 Honorable Councilmembers: I am a homeowner in the Legacy Estates subdivision, which borders on Harney Lane, west of Mills Avenue. The rear of my home borders Harney Lane. I recognize that these Agenda Items relate only to reimbursement agreements between the developer and the city, however I would like to express my concerns as they relate to the scope of the potential agreements. My interest in these Agenda Items centers on the issue of potential traffic and sound impacts of the proposed development on existing homeowners in the vicinity of Harney Lane. At present, Harney Lane is a heavily -used artery between Reynolds Ranch/Highway 99 and Lower Sacramento Road. The road is used by commuters as well as many tractor -trailers. Speed limits seem to be rarely enforced and the traffic noise is often so loud that normal conversations are sometimes difficult in my backyard. Due to heavy traffic, it is not uncommon to have to wait 2-3 minutes to turn from Legacy Way onto Harney Lane. The proposed 762 housing unit proposal will not only increase the traffic load on Harney Lane, but will certainly exacerbate the traffic noise in our neighborhood. Because of these issues, I suggest that the estimated cost of $15,000 for city staff to examine the Offsite Traffic and Circulation Improvements is inadequate for the seriousness of this issue. Thank you for your consideration of these comments. Sincerely, Gary Funamura 2304 Olson Drive Lodi, CA 95242