HomeMy WebLinkAbout1988-07-12; City Council; 9521; SUBDIVISION IMPROVEMENT AGREEMENT EXTENSION FOR SYCAMORE CREEK - CARLSBAD TRACT 83-36e
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MTG. 7-12-88 SUBDIVISION IMPROVEMENT AGREEMENT CITY AT
CITY M( EXTENSION FOR SYCAMORE CREEK - CARLSBAD DEPT. ENG. TRACT 83-36
RECOMMENDED ACTION:
Adopt Resolution No. ff--LgL approving a conditional extension for completion of Improvements required by the Subdivision Improvement A! for Carlsbad Tract 83-36, the Sycamore Creek Project.
ITEM EXPLANATION:
On May 8th 1985 the developers of the Sycamore Creek Project, H & D Pari General Partnership, entered into an agreement with the City of Carl construct improvements required by the resolution of approval for the 1 Performance in accordance with the Agreement was secured by Letters 01 issued by State Federal Savings and Loan Association, Portland, Oregon.
The Agreement stipulates a 24 month term for completion of the improveme also makes provision to have the term for completion of the improvements ( by the City Council in the event good cause is shown therefor.
The developer has not performed in accordance with the terms of the a! because State Federal Savings and Loan, the institution financing the I was in dire financial straits. The matter is explained in more detail in
No. 3 (copy of letter to Mr. Marty Orenyak, Community Development Direc.
State Federal Savings and Loan Association went into federal receive)
December of 1985.
The Federal Savings and Loan Insurance Corporation (FSLIC) has indicatl intent to honor the Letters of Credit issued by State Federal Savings a
Therefore it is recommended to extend the performance term of said agre May 8th, of 1990 provided that the City receives written notice from FS FSLIC will honor the letters of credit, or alternate securities approve City Engineer are filed with the City.
FISCAL IMPACT:
No detailed economic impact analysis of this development has been co While increased operating expenses related to this development are exp be offset from increased tax or fee revenue, no exact percentage of of be predicted.
EXHIBITS:
1. Location Map.
2. Resolution No. ffl232 approving an extension of time for compl improvements in accordance with the subdivision improvement agree
3. Copy of letter from N. Banche to M. Orenyak dated June 22, 1988.
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RESOLUTION NO. 88-232
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, APPROVING AN EXTENSION OF TIME FOR COMPLETION OF IMPROVEMENTS FOR SYCAMORE CREEK PROJECT (CT 83-36).
WHEREAS, the City Council of the City of Carlsbad approved with (
Tentative Map CT 83-36; and
WHEREAS, the City Council of the City of Carlsbad enterec
Subdivision Improvement Agreement with H & D Partners, subdivider of CT
construction of improvement required as condition of said approval; ar
WHEREAS, the time limit for completion of the improvements as es
by the agreement has elapsed; and
WHEREAS, the subdivider has requested an extension of the time
performance in accordance with the agreement; and
WHEREAS the City Council has determined it is in the public in
extend the performance time limit of the agreement;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
California, as follows:
1. The above recitations are true and correct.
2. That the time limit for performance in accordance
Subdivision Improvement Agreement with H & D Partners, subdivider of C1
hereby extended to May 8, 1990 subject to the following condition:
A. This approval is expressly conditioned on the receival by
of written notification from the Federal Savings and Loan
Corporation (FSLIC) that FSLIC will honor the exiting 11
credit that secure performance in accordance with the agre
alternate securities approved by the City Engineer are file(
City.
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3. The extension is approved in reliance upon said conditio1
to perform accordingly shall render th-is approval void.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Carl
day of July 9 1' Council held on the 12th
following vote, to wit:
AYES:
NOES: None
ABSENT: None
Council Members Lewis, Kulchin, Pettine, Mamaux ai
ATTEST:
ALETHA L. RAUTENKRANZ, City Cleh
(SEAL)
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LAW OFFICES OF
DAUBNEY AND BANCHE
PROFESSIONAL CORPORATIONS AREA COI
TELEPHONE
WILLIAM H OAUBNEY
NICHOLAS C BANCHE 810 MISSION AVENUE, SUITE 201
POST OFFICE BOX 390
OCEANSIDE. CALIFORNIA 92054
June 22, 1988
Marty Orenyak Community Development Director
City of Carlsbad
2075 Las Palmas Carlsbad, California 92009
RE: Sycamore Creek
SP-190, CT 83-36
Dear Mr. Orenyak:
A member of the Engineering Staff has asked that I provide
explanation as support for my request contained in my letter of Ju 14, 1988, requesting that the Subdivision Agreement which cove
Drawing Nos, 251-6 and involves the above referenced project, extended by action of the City Council.
It is absolutely imperative that that matter be set before t
Council in order to insure that the exemptions, previously confirme
are not jeopardized.
As you are no doubt aware, the project was approved by actio]
In November of 1984, the Sycamore Creek Company met with Sta, Federal Savings andLoan Association in Portland, Oregon and discusst State Federal's financing Unit 1 of the Sycamore Creek project. addition, State Federal was requested to provide constructic financing for the first office building and the inn. State Feder? confirmed their interest in late November of 1984.
of the City of Carlsbad occurring in 1983 and 1984.
Shortly thereafter, Sycamore Creek submitted a proposal to
potential equity partner in order to meet credit requirement established by State Federal as a condition to their financing c
Unit 1. That equity partner would have also provided the capite requirements for Sycamore Creek Unit 2 acquisition and development StateFederal then informedSycamoreCreekthatitwantedtheexclusib
right to finance the project or arrange financing and/or equit partners. The Sycamore Creek Company abandoned any further effort to find other funds.
/ e e
f
Marty Orenyak
Community Development Director June 22, 1988 Page 2
State Federal became Sycamore Creek’s exclusive agent for te
ofmaking,orarranging,constructionandtermfinancing. Inadditi
State Federal became an equity participant for both Units 1 an1
and continued in this posture through March of 1985.
In early 1985, State Federal decided to become an equ
participant in both phases of the Sycamore Creek project and St
Federal agreed to post approximately 4 million dollars in lett. of credit required by the City of Carlsbad for the development
Sycamore Creek Unit 1.
On the 15th of March, 1985, State Federal and the Sycamore Crc
Company entered into a written agreement confirming the intent.
to form a joint venture for purposes of developing Sycamore Crc Units 1 and 2.
~n April of 1985, State Federal sent a loan commitment lettc committing State Federal to lending 21.7 million dollars to t
Sycamore Creek project,
During this period of time, the Sycamore Creek Company advanc
its own funds in the nature of making non-refundable deposits
parcels of land in Unit 2 and also made substantial expenditures f
planning the development of Unit 2 in reliance that the loan h
been committed. It was also anticipated that the monies bei
advanced by the Sycamore Creek Company would be reimbursed out’
the State Federal Loan.
On May 5, 1985, State Federal notified Sycamore Creek that
was withdrawing from the joint venture and was not in a position
make the loan previously committed.
Sycamore Creek Company advised State Federal that in the eve
that they failed to make the loan, the institution would lose portion Of its collateral securing the original 3.9 million doll advance. Sycamore Creek also informed State Federal that they wou
file a lawsuit over the breach of the joint venture commitment. i
this point, State Federal reassessed its position andadvanced certa. funds, and Sycamore Creek Tract Map No. 83-36 was recorded. Howeve:
the loan was funded only to the extent necessary to protect Stai Federal’s existing financial stake in the project. After that limit( loan closing State Federal failed and neglected to live up to tl terms of its commitment.
-I I) e
Marty Orenyak
Community Development Director June 22, 1988
Page 3
Intense meetings occurred in Corvallis with the President i
Board of the Federal institution, and it was becoming increasinl
apparent that State Federal was in dire financial straits.
In November of 1985, State Federal tried to withdraw its lettc of credit from the City of Carlsbad. Carlsbad refused to relei
the institution.
StateFederal wen tinto federal receivership in December of19L
Since that time, Sycamore Creek has been engaged in acti
litigation with both State Federal and the FSLIC.
Also, during this period of time, Carlsbad's moratorium and t subsequently enacted Growth Management Plan were effected, obvious having a chilling effect, especially on an agency such as FSLIC.
A settlement has now been reached with FSLIC which allows t
project to go forward.
In short, the Sycamore Creek project was a much discussed, a
favored project when it was approved by the City. Nothing has chang
during that period of time, and from the facts which I have outline you can see that the proponents were diligently attempting to procee
There is absolutely no reason as to why these agreements shou not be extended, particularly in light of the fact that a portion
the public improvements have already been constructed, albeit
another developer.
We respectfully request that the matter be set at your earlie!
convenience and that the Staff support our request for extension
Sincerely,
NIC 6?-& OLAS C. BANCHE +
NCB: jp
cc: Mike O'Hara
Russell Grosse
James Panther