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HomeMy WebLinkAbout2013-09-10; City Council; 21360; Approve Reimbursement Agreement Formation DepositsCITY OF CARLSBAD - AGENDA BILL AB# 21.360 APPROVE REIMBURSEMENT AGREEMENT FOR SPECIAL FINANCING DISTRICT FORMATION DEPOSITS DEPT.DIRECTOR C4^ MTG. 9/10/13 APPROVE REIMBURSEMENT AGREEMENT FOR SPECIAL FINANCING DISTRICT FORMATION DEPOSITS CITY ATTY. DEPT. FIN APPROVE REIMBURSEMENT AGREEMENT FOR SPECIAL FINANCING DISTRICT FORMATION DEPOSITS CITY MGR. RECOMMENDED ACTION: Adopt Resolution No. 2013-226 approving a reimbursement agreement for special financing district formation deposits. ITEM EXPLANATION: The City of Cartsbad is divided into 25 Locat Facilities Management Zones. One goat ofthe Local Facilities Management Zones is to ensure the provision of public facilities and improvements corresponds to the pace of devetopment in the appticabte zone. The Local Facilities Management Plan ("LFMP") for Zone 15 outlines the specific improvements, such as sewer, water, drainage, and circulation improvements, necessary to support the allowable growth in the zone. In order to proceed with devetopment, any currently undeveloped property within Zone 15 is required to complete College Boulevard between Cannon Road and Et Camino Real. Per the LFMP, the financing requirement of College Boulevard for one devetopment area of Zone 15 is as follows: Prior to the approval of the first final map within the Devetopment Area 2 of Zone 15, the participating property owners' must devetop and agree to the formation of a comprehensive financing program that guarantees the construction of full width improvements of College Boulevard between Cannon Road and El Camino Reat. Said financing mechanism can include such programs as a Bridge and Thoroughfare District, Assessment District, or private reimbursement agreements. The ultimate financing program must receive City Council approval prior to the recordation of the first final map. In order to pursue some of the referenced financing mechanisms, like the Assessment District, the property owners' are required to follow Council Policy No. 33. City Council created Council Policy No. 33 (the "Policy") as a mechanism to determine whether or not forming a special financing district woutd serve the public interest. Per the Policy, property owners are required to follow specific steps to petition the formation of a special financing district with City Council. The initiat steps of the special financing district formation process are listed on the foltowing page and generally described as follows: DEPARTMENT CONTACT: Aaron Beanan 760-602-2414 Aaron.Beanan(5)carlsbadca.gov FOR CLERK USE. COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC • DENIED • CONTINUED TO DATE UNKNOWN • CONTINUED • RETURNED TO STAFF • WITHDRAWN • OTHER - SEE MINUTES • AMENDED • REPORT RECEIVED • PAGE 2 1. The applicant must prove they have the consent ofthe owners of not less than 65 percent, by area, ofthe property proposed to be subject to the levy ofthe assessments. 2. The applicant must submit a business plan for the devetopment of the property within the proposed special financing district. 3. The applicant must provide a deposit to cover the pre-formation costs associated with attempting to form the district. 4. City staff must form a special district review committee to determine whether or not the applicant's submittal conforms to Council Policy No. 33. 5. The city selected Assessment Engineer completes a preliminary Engineer's Report to indicate the proposed improvements, method of assessment allocation, and preliminary assessments. Most applicants represent one developer controlling alt property within the proposed special financing district. This allows the applicant to easity satisfy the first requirement: have 65 percent of the property owners consent to the formation, tf this requirement is not satisfied, applicants cannot move on in the approval process. The applicant in Zone 15, Bent West, LLC, is having challenges obtaining concurrence from 65 percent of the property owners. These challenges are due to several unique characteristics in Zone 15. This zone is characterized by fractured ownership and offsite ownership. The fact there are numerous ownership interests, versus the common situation of having only one owner, and the fact several large owners are out of state and hard to communicate with, make it a challenge for Bent West, LLC to obtain the requisite 65 percent, by area, approvat from the Zone 15 property owners. Bent West, LLC betieves having preliminary numbers to share with the other ownership interests would solidify the requisite 65 percent ownership approval. As such, staff is requesting that Bent West, LLC be allowed to temporarily bypass the Policy's initiat approvat steps and post a deposit with the city. The deposit woutd pay for a city selected Assessment Engineer and bond counsel to devetop a preliminary Engineer's Report. The preliminary Engineer's Report would provide a preliminary tist of proposed improvements, a provisional method of assessment allocation, and estimated assessments. Bent West, LLC woutd share this information with the other property owners in an effort to obtain concurrence from 65 percent of the property owners. The preliminary Engineer's Report created for Bent West, LLC is a working document and is based on the information Bent West, LLC has provided, tt does not inctude information or input from any other potential interests in a Zone 15 assessment district. Bent West, LLC, is stilt required to obtain approval from not less than 65 percent, by area, ofthe property proposed to be subject to the levy of assessments. Compteting a preliminary Engineer's Report does not remove this condition. If this approvat threshold is not satisfied, the formation of a special financing district wilt not proceed. If this approvat threshold is satisfied, the formation of a special financing district wilt proceed as outlined in the Policy. As indicated above, the preliminary Engineer's Report is based on data Bent West, LLC provided. If the other participating owners have additionat information or input, the improvements and or method of assessment allocation and or preliminary assessments may change based on input from the other property owners. z PAGE 3 FISCAL IMPACT: Per the Policy, the cost to form a special financing district ties solely with the applicant. The applicant is required to deposit sufficient funds with the city to cover all formation costs. If a special financing district is formed and bonds are issued, the Policy allows the formation costs to be reimbursed to the applicant from bond proceeds. If, for any reason, a special financing district is not formed and bonds are not issued, the city wilt refund any unexpended deposits to the applicant per the Policy. There is no fiscat impact to the city if Bent West, LLC is allowed to temporarily bypass the initial Policy approvat steps. The attached reimbursement agreement memorializes the Policy formation cost rules and creates the mechanism for Bent West, LLC to deposit sufficient funds for the information they are requesting. Staff estimates $30,000 witl initially cover the time of staff, an assessment engineer, and bond counsel to create a preliminary Engineer's Report. Staff requests City Council altow Bent West, LLC to temporarily bypass the initiat Policy approvat steps and approve the attached reimbursement agreement for special fmancing district formation deposits. Council approval onty allows the completion of a draft preliminary Engineer's Report. It does not approve the formation ofa special financing district, the improvements included in the special financing district, the method of assessment allocation, the preliminary assessments, or the issuance of bonds. Staff will return to Council at a later date if Bent West, LLC receives the requisite owner approvat after this initial step. ENVIRONMENTAL IMPACT: An Environmental Impact Report (EIR 98-02 -SCH No. 99111082) was prepared forthe Calavera Hilts Master Plan Phase II, Bridge and Thoroughfare District No. 4, & Detention Basins. The EIR analyzed the construction ofthe missing section of College Boulevard between Cannon Road and El Camino Reat. Furthermore, approving a reimbursement agreement for special financing district formation deposits is exempt from the requirements of CEQA pursuant to Public Resources Code Section 21065. This action does not constitute a "project" within the meaning of CEQA in that it has no potentiat to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. EXHIBITS: 1. Resolution No. 2013-226 approving a reimbursement agreement for special financing district formation deposits. 2. Area Map - Locat Facilities Management Plane: Zone 15 3. Reimbursement Agreement for Special Financing District Formation Deposits. 5 Exhibit 1 9 10 11 12 13 28 RESOLUTION NO. 2013-226 1 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A REIMBURSEMENT AGREEMENT FOR 4 SPECIAL FINANCING DISTRICT FORMATION DEPOSITS WHEREAS, the CITY COUNCIL ofthe CtTY OF CARLSBAD, CALIFORNIA, (hereinafter 5 6 7 referred to as the "legislative body"), has outlined the steps necessary for the financing of public improvements in Council Policy No. 33 (the "Policy"); and, WHEREAS, the Policy requires the applicant prove they have consent ofthe owners of not less than 65 percent, by area, ofthe property proposed to be subject to the levy of assessments before proceeding through the formation process of a special financing district; and, 14 WHEREAS, Zone 15 is uniquely characterized by fractured ownership and offsite 15 ownership which has made it challenging for Bent West, LLC to obtain the necessary ownership 16 17 18 19 2Q WHEREAS, the Policy stipulates that all formation costs are the responsibility ofthe 21 applicant; and, WHEREAS, the attached Reimbursement Agreement for Special Financing District Formation Deposits ("Agreement") creates the mechanism for Bent West, LLC to assume the responsibility for formation costs; and, WHEREAS, the city will incur no costs in the potentiat formation of a special financing consent; and, WHEREAS, Bent West, LLC believes having a preliminary Engineer's Report would help them obtain the necessary 65 percent ownership consent; and. 23 24 25 26 27 district in Zone 15; and. Exhibit 1 1 WHEREAS, staff requests that Council allow Bent West, LLC to temporarily bypass the initiat formation steps given the unique characteristics of Zone 15, the fact that Bent West, LLC is required to pay for alt formation costs per the attached Agreement, and the fact that Council is not approving the formation of a special financing district, the improvements included in the special financing district, the method of assessment allocation, the preliminary assessments, or 3 4 5 6 7 the issuance of bonds NOW, THEREFORE, BE IT RESOLVED by the City Coundt of the City of Cartsbad, California, as follows: 1. That the above recitations are true and correct. 2. That Bent West, LLC is allowed to temporarily bypass the initial formation 9 10 11 12 ^2 steps outlined in the Policy, specifically the requirement ofthe applicant to prove 14 they have the consent of the owners of not less than 65 percent, by area, of the 15 property proposed to be subject to the levy of the assessments, with the 16 understanding that Bent West, LLC, or any future applicant, is still required to 17 meet the requisite 65 percent approvat threshold before proceeding with the rest 18 ofthe formation process 19 2Q 3. That the Agreement, Exhibit 3 attached hereto, is hereby approved. 21 4. That the City Manager, or his designee, is hereby authorized to sign the Agreement. 5. That the City Clerk is hereby authorized and directed to record the futty executed Agreement with the San Diego County Recorder's Office. 23 24 25 26 27 // 28 // s 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Coundl ofthe City of Carlsbad on the 10*^ day of September, 2013, by the following vote to wit: AYES: NOES: Council Members Hall, Packard, Wood, Blackburn and Douglas. None. ABSENT: None. ATTEST: BARBARAiEIHGLESO^City Clerk (^f Local Facilities Management Plan Zone 15 1 EXHIBITS REIMBURSEMENT AGREEMENT FOR SPECIAL FINANCING DISTRICT FORMATION DEPOSITS BENT WEST, LLC This Reimbursement Agreement dated as of S^tcH^ryCJir 13 . 2013 ("Agreement") is by and between the City of Carisbad, a municipal corporation ("City), for itself and on behalf of the proposed City of Carlsbad, California, Assessment District for Local Fadlities Management Plan Zone 15 ("AD") and Bent-West, LLC, a Califomia Limited Liability Company ("Developer"), collectively ("the Parties"), with reference to the following recitals: RECITALS WHEREAS, the Developer has requested that the City consider the formation of the AD and the issuance of bonds for the AD ("Bonds") under the Municipal Improvement Act of 1913 and the Improvement Bond Act of 1915 (collectively, the "Act"); and WHEREAS, the Developer is willing to deposit funds with the City to ensure payment of the costs of the City in forming the AD and otherwise in connection with the issuance of Bonds for the AD and the proposed expenditure of the proceeds thereof, provided that such funds so advanced are reimbursed to the Developer from the proceeds of any Bonds issued by the City for the AD to the extent provided herein; and NOW, THEREFORE, the City and Developer agree as follows: 1 • Recitals. The Recitals are true and correct and Incorporated herein by this reference. 2. Deposits. The Developer hereby agree to advance amounts necessary ("Deposit" and collectively "Deposits") to be used by the City to pay the costs in conducting proceedings for the formation of the AD and the issuance of Bonds for the AD (as more fully described in Section 3 below, the "Initial Costs"). The Deposit(s) shall be kept in a separate fund and the City shall maintain records as to the expenditure ofthe Deposit(s). (a) The Developer hereby agrees to advance amounts within ten (10) business days upon written demand by the Finance Director of the City. The City Manager, in his/her sole discretion, may direct City staff and consultants to cease all work related to the formation of the AD and the issuance of Bonds until all monies, so demanded, have been received by the City. If the City Manager, in his/her sole discretion, directs City staff and consultants to cease all work related to the fomiation of the AD and the issuance of Bonds, the Finance Director ofthe City shall, within ten (10) business days after receipt of such direction, return the then unexpended Deposits to the Developer, without interest, less an amount equal to any costs incurred by the City or that the City is othenA/ise committed to pay, which costs would be subject to payment under Section 3(a) below but have not yet been so paid, and terminate the proceedings. 3- Use of Funds. The Deposits shall be administered as follows: (a) The Finance Director of the City may draw upon the Deposits from time to time to pay the Initial Costs, including but not limited to: (i) the fees and expenses of any consultants to the City employed In connection with the formation of the AD, the issuance ofthe Bonds, and the proposed expenditure of the proceeds thereof (such as assessment engineering, legal counsel, including the City Attorney, Bond Counsel, and financial advisory fees); (ii) the costs of market absorption, appraisal and feasibility studies and other reports necessary or deemed advisable by City staff or consultants in connection with the AD or Bonds; (iii) the costs of publication of notices, preparation and mailing of ballots and other costs related to any election with respect to the AD, the assessments to be levied therein, and any bonded indebtedness thereof; (iv) a reasonable charge for City staff time, as determined by the Finance Director in their sole discretion, in analyzing the AD, the Bonds, and the expenditure of the proceeds thereof, including a reasonable allocation of City overhead expense related thereto; and (v) any and all other actual costs and expenses incurred by the City with respect to the AD or the Bonds after the date of execution of this Agreement. (b) If the Bonds are issued under the Act by the City secured by assessments levied upon the land within the AD, the City shall provide for reimbursement to the Developer, without interest, of all amounts charged against the Deposits, said reimbursement to be made solely from the proceeds of the Bonds and only to the extent othenwise permitted under the Act. On or within ten (10) business days after the date of issuance and delivery of the Bonds, the Finance Director of the City shall return the then unexpended Deposits to the Developer, without interest, less an amount equal to any costs incurred by the City of that the City is otherwise committed to pay, which costs would be subject to payment under Section 3(a) above, but have not yet been so paid. (c) If the Bonds are not issued, or the City decides to terminate proceedings under the Act with respect to the formation of the AD and the issuance of the Bonds, the Finance Director of the City shall, within ten (10) business days after receipt of a request by the Developer, return the then unexpended Deposits to the Developer, without interest, less an amount equal to any costs incurred by the City or that the City is othenwise committed to pay, which costs would be subject to payment under Section 3(a) above but have not yet been so paid. 4. Agreement Not Debt or Liabilitv of Citv. It is hereby acknowledged and agreed that this Agreement is not a debt or liability of the City. The City shall not in any event be liable hereunder other than to return the unexpended and uncommitted portions of the Deposits as provided in Section 3 above and provide an accounting under Section 6 below. The City shall not be obligated to advance any of its own funds with respect to the AD or for any of the other purposes listed in Section 3(a) hereof No member of the City Council, or officer, employee or agent of the City shall to any extent be personally liable hereunder. 5. No Obligation to Issue Bonds. The provision of this Agreement shall in no way obligate the City to form the AD, to issue Bonds, or to expend any of its own funds in connection with the AD. 6. Accounting. The City Finance Director shall provide the Developer with a written accounting of moneys expended under this Agreement, within ten (10) business days of receipt by the Finance Director of the City of a written request therefore submitted by an authorized officer of the Developer. No more than one accounting will be provided in any calendar month and the cost of providing the accounting shall be charged to the Deposits. 7. Notices. Unless othenwise specifically provided herein, all notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly delivered upon personal delivery, or served by certified mail postage prepaid. Delivery of notice to Developer shall be presumed to have been made on the date of mailing regardless of receipt by Developer. Notices shall be address as follows: Notices to the City shall be delivered to: City of Carlsbad Attn: Finance Director 1635 Faraday Avenue Carlsbad, CA 92008-7314 Notices to Developer shall be delivered to: Bent-West, LLC Attn: Steve Powell, Project Manager 5796 Armada Drive, Suite 300 Carlsbad, CA 92008 Phone: 520-331-1720 Email: PoweH(S)theriver.com 8. Successor and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. The Parties agree and acknowledge that the Developer may, in its sole discretion, assign its rights and obligations under this Agreement to a third-party (a "Successor Developer"). In the event of such assignment, all previously advanced Deposits shall be deemed to have been made by such Successor Developer and any unexpended Deposits shall, to the extent provided for in the Agreement, be returned to such Successor Developer. In the event of such assignment and within 14 calendar days of such assignment, Developer shall notify City, in writing, of such assignment and provide City with Successor Developer's complete contact information. 9. Counterparts. This Agreement may be execute in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute one and the same instrument. 10. Governing Law and Venue. This Agreement shall be interpreted and enforced under the laws of the State of California and venue shall be in San Diego County, California. 11. Council Policv No. 33. The process to form the AD and issue Bonds shall comply with Council Policy No. 33: Policy for Use of Assessment Districts, Community Facilities Districts, and Bridge and Thoroughfare Districts. 12. Complete Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter contained herein, and supersedes all negotiations, discussions, and prior drafts with respect to this subject matter. 13. Amendment. This Agreement may be amended only by a written instrument executed by the City and Developer. 14. Severabilitv. The invalidity or unenforceability of any provision of this Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity or enforceability of any other provision hereof REMAINDER OF PAGE INTENTIONALLY LEFT BLANK IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. DEVELOPER CITY OF CARLSBAD, a munidpal corporation ofthe State of California By: (sign here) Dennis O'Brien, Member/Manager (print name/title) dobrien@westpartners.com (Email address) By: (sign here) (print name/title) By: City Manager •ef-Mayon.opBtfeetop ATTEST: BARBARA ENGLESON City Clerk If required by City, proper notarial acknowledgment of execution by Developer must be attached. If a corporation. Agreement must be signed by one corporate officer from each of the following two groups: Group A. Chairman, President, or Vice-President Group B. Secretary, Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. APPROVED AS TO FORM: CELIA A. BREWER, City Attorney By:_ ssistant City Attorney ACKNOWLEDGMENT State of California -..^ * County of imDp ) On PaniBi"(gH^,2a^ before me, l>H^A\Uoqht. {QrfajKJ 9M[\C^ ^ (Insert name a'nd4iite of the officer) ^ personally appeared l^ehnfE> O&KlCJn who proved to me on the basis of satisfactory evidence to be the person^ whose name(^(j^aFe subscribed to the within instrument and acknowledged to me that(^Jst*e/they executed the same in (^hoF/their authorized capacity(l39«^, and that b/^lhef/their signalure^ on the instrument the personOs^, or the entity upon behalf of which the piSi^oo^ acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is tme and correct. WITNESS my hand and offidal seal. 1 jOX^ oai^A.VO Committioa # 1961218 Notary fHiMc - CiUfonilt !18 I mlt 1 1 ^"'^ voumy Signature T>:HQULJ^ 5^X:^Ci:^ (Seal) fj Stn Dit90 County ^ MyComm.EttifftOct3.2018l CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT State of Califomia County of On 1 l'^|'3-0>'2) before me, r^ev^ -fvH, )^D-i7iui^u\ ^uXixt^ , I (Here ii'tsfert name and title of dW6fficer) personally appeared dojlV^ CxJK^'t^ , who proved to me on the basis of satisfactory evidence to be the person(-9-) whose name^) is/are subscribed to the within instrument and acknowledged to me that he/sh©/the)f executed the same in his/h^fi^their authorized capacity(t©*), and that by his/her/their signature's) on the instrument the person(9), or the entity upon behalf of which the person^e-) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of Califomia that the foregoing paragraph is true and correct. [ESS my hand and official seal Signature of Notary Pub (Notary Seal) MORGEN FRY Commission* 1918442 | Notary Public - California z « - "jMir- County J I ^^SBB»^ MV Comm. Expires Dec 24.20141 ADDITIONAL OPTIONAL INFORMATION DESCRIPTION OF THE ATTACHED DOCUMENT (Title or description ofattached document) (Title or description of attacncd document continued) (Title or description Number of Pages ; continued) Document Date (Additional information) CAPACITY CLAIMED BY THE SIGNER • Individual (s) • Corporate Officer (Title) • Partner(s) • Attorney-in-Fact • Trustee(s) • Other INSTRUCTIONS FOR COMPLETING THIS FORM Any acknowledgment completed in Califomia must contain verbiage exactly as appears above in the notary section or a separate acknowledgment form mmt be properly completed and attached to that document. 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