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HomeMy WebLinkAbout2019-12-30; Purchase of Remaining Habitat Management Plan (HMP) Gnatcatcher Core Area Credits and execution of a Letter of Support to the Wildlife Conservation Board; Gomez, PazTo the members of the: CITY COUNCIL Date\2-,~/14 CA ✓CC ✓ CM __L'COO /ocM (3) / Dec. 30, 2019 Council Memorandum To: From: Honorable Mayor Hall and Members of the City Council Paz Gomez, Deputy City Manager, Public Works Via: Elaine Lu key, Chief Operations Officer L:-~ {city of Carlsbad Memo ID# 2019152 Re: Purchase of Remaining Habitat Management Plan (HMP) Gnatcatcher Core Area Credits and execution of a Letter of Support to the Wildlife Conservation Board This memorandum provides information related to the HMP Gnatcatcher Core Area requirement and recommended next steps. Background One of the city's main goals in adopting the HMP was to allow incidental take of the federally threatened coastal California gnatcatcher in the city through adequate preservation of coastal sage scrub, the preferred habitat of this species. During the preparation of the HMP, the Wildlife Agencies determined there was not enough coastal sage scrub habitat within the city to achieve the necessary acreage for coverage of the gnatcatcher. Therefore, the city was required to cause . the preservation of 307.6 acres of gnatcatcher habitat southeast of the city, within the Gnatcatcher Core Area (Core Area) identified by the Multiple Habitat Conservation Plan1 (MHCP) (See attachment A). The HMP and associated Implementing Agreement (IA) identified the HMP Habitat In-Lieu Mitigation Fee program (also known as the HMP Mitigation Fee) as a funding mechanism to cover the expenses related to this out-of-city habitat preservation. The fee is paid by private developers to mitigate impacts to certain habitat types. It was envisioned that the fee, once established by City Council, would be collected over time and the Core Area acquisitions would occur once a sufficient fee account balance had accumulated. The city is required to complete this Core Area preservation prior to the end of the HMP Take Authorization Permit period, or by November 2054. In 2010, a fee study was conducted to determine if the HMP Mitigation Fee program would be sufficient to cover the cost of the remaining credits (see Attachment B HMP Mitigation Fee Analysis and Core Area Requirements Report, prepared in December 2019, for more details). At that time, a total of 93.1 Core Area credits remained to be acquired by the city at an estimated cost of $3,906,184. Since then, the following Core Area credits have been purchased: 1 The Multiple Habitat Conservation Plan (MHCP) is the regional framework document that guides the development of city-specific Habitat Management Plans (HMPs) for incorporated North County cities. · Public Works Environmental Management Department 1635 Faraday Avenue I Carlsbad, CA 92008 I 760-602-4689 t Honorable Mayor Hall and Members of the City Council Dec.30,2019 .Page 2 • In January 2011 city purchased 50.13 acres of credit on the Alemir property at a cost of $1,353,510 (Council Resolution 2011-011). • In June 2011, 30.09 acres of credit was purchased on the Perkins property at a cost of $868,302 (Council Resolution 2011-159). The purchase ofthese credits required an advance from the General Fund of $230,755 and $755,521, respectively. HMP fees continue to be collected and used to offset this account shortfall. Currently, the account has a remaining liability of $155,754. A total 12.93 acres of Core Area credit remains to be acquired. Discussion The 2010 fee study estimated the cost of the remaining credits to be approximately $55,000/acre, or $64,910 when adjusted for inflation to 2019 dollars. The cost of credits includes land acquisition and long-term management. Actual costs depend on current land prices and long-term management, both of which can vary considerably from site to site. Recent appraisals on land that would qualify for Core Area credit vary from $35,469 per acre to $138,000 per acre · (see attached report for more details). Note that this does not include the cost of long-term management. The city was recently approached by the Wildlife Agencies about an opportunity to purchase credits for the remaining 12.93 acres of the Core Area requirement on the Luchia property, which is located within the Core Area identified by the MHCP, just east of the city boundary (Figure 1). The land will be acquired by the Wildlife Agencies using grant funds. The purchase of these credits would follow the model used to purchase credits on Perkins Property (see Attachment C Final Agreement for purchase of credits on Perkins Property). The per-acre cost of credits would be the total cost of acquisition and long-term management ($2,575,000 + $755,273) divided by the total number of acres (39) = $85,392.62 per acre (rounded to the nearest cent). Therefore, the total cost to purchase the remaining 12.93 credits would be $1,104,126.50 ($85,392.62 x 12.93). Following the Perkins Property model, a portion of these funds would be used to establish an endowment to fund long-term management of the entire property by Center for Natural Lands Management ($755,273). The remaining funds ($348,841) would ·be deposited into escrow to be used toward the property's acquisition. The remaining acquisition costs will be provided by state and federal agencies through grant funding as follows: U.S. Fish and Wildlife Service will provide . $1,447,003 and California Department of Fish and Wildlife will provid~ $779,156. The 2010 fee study estimated the cost of the 93.15 credits that were remaining at that time to be $3,906,184 (see Section 2.3.1). If the Luchia property credits are purchased, the actual total cost for the remaining Core Area credit since 2010 would be $3,158,500. Based on the 2010 fee study, the remaining undeveloped properties are estimated to generate approximately $2,186,828 in fees, which would be sufficient to pay back all advances to the HMP fee account from the Honorable Mayor Hall and Members of the City Council Dec. 30, 2019 Page 3 General Fund, totaling an estimated $1,259,868 (current fund liability of $155,754 plus $1,104, 126.50 for the remaining Core Area credits on the Luchia Property). Land prices are likely to increase significantly faster than inflation and may outpace the HMP Fee structure. In addition, there will be fewer undeveloped properties with coastal sage scrub available for purchase as the area continues to build out. Therefore, it would be prudent to purchase the Core Area credits on the Luchia property now rather than wait until the HMP fee account builds up sufficiently. Staff will request approval of the final Core Area agreement and advance of $1,104,126.50 from the General Fund from city Council. If approved, this transaction would complete the city's Core Area requirement. The City Manager signed the attached letter of support for the purchase of credits from the Luchia Property as described above (Attachment D). The Wildlife Agencies will provide this letter to the Wildlife Conservation Board (provider of grant funds for land acquisition). Next Steps Staff recommends the following actions: • Staff will work with the Wildlife Agencies to draft a formal agreement similar to the · agreement used for the Perkins Property credits. This agreement will be finalized and submitted to the City Council for review and approval by spring 2020. • Staff will request approval from the City Council for the advancement of funds from the General Fund to purchase the Core Area Credits. The dispensation of the funds will be described in the final executed agreement. Attachments: A. Map showing the location of the Luchia Property and the M HCP Core Area. B. HMP Mitigation Fee Analysis and Core Area Requirements Report, prepared in December 2019 C. Agreement Regarding Conservation Credits (for Perkins Property) D. Letter of support from the city to the Wildlife Conservation Board dated Dec. 19,2019 cc: Scott Chadwick, City Manager Celia Brewer, City Attorney James Wood, Environmental Manager Amanda Guy, Deputy City Attorney Rosanne Humphrey, Senior Program Manager SOURCE: SanGIS· . ' City of Carlsbad r-ESA _..,. S.D. COUNTY / SAN MARCOS ~, ~ Attachment A D Luchia Property Cl Gnatcatcher C ~ ore Area ( Habitat Manag per MHCP Vol 1) Co ement Plan . nserved Lands . Luch" ia Property Attachment B HMP Mitigation Fee Analysis and Core Area Requirements Report December 10, 2019 1.0 Background One of the city's main goals in adopting the Habitat Management Plan (HMP) was to allow incidental take of the federally threatened coastal California gnatcatcher (gnatcatcher) in the city through adequate preservation of coastal sage scrub, the preferred habitat of this species. During the preparation of the HMP, the Wildlife Agencies determined there was not enough coastal sage scrub habitat within the city to achieve the necessary acreage for coverage of the gnatcatcher. Therefore, the city was required to cause the preservation of 307.6 acres of gnatcatcher habitat southeast of the city, within the Multiple Habitat Conservation Plan1 (MHCP) Gnatcatcher Core Area (Core Area) (Figure 1). The HMP and associated Implementing Agreement (IA) identified the HMP Habitat In-Lieu Mitigation Fee program (also known as the HMP Mitigation Fee) as a funding mE;!chanism to cover the expenses related to this out-of-city habitat preservation. As described in the HMP, the fee can be paid to mitigate impacts to certain habitat types in lieu of preservation at different mitigation ratios. These habitat types and mitigation ratios, listed below, are noted in Table 11 of the HMP (page D-113): Group D -Unoccupied coastal sage scrub, coastal sage/chaparral mix, chaparral (excluding southern maritime chaparral) -mitigation ratio of 1:1; Group E -Annual (non-native) grassland -mitigation ratio or 0.5:1; and Group F -Disturbed lands, eucalyptus, and agricultural lands -mitigation ratio of 0.1:1. The fee is not applicable to properties that preserve at least 67 percent of the onsite habitat, parcels subject to the Coastal Zone Agricultural Conversion Mitigation Fee, or sites that were graded within five years prior to the establishment of the fee in January 2007. The fee does not apply to city projects that impact Group D, E, or F habitats; instead, such impacts will be mitigated by deducting credits from the Lake Calavera Mitigation Parcel. It was envisioned that the fee, once established by City Council, would be collected over time and the Core Area acquisitions would occur once a sufficient fee account balance had accumulated. The city is required to complete this Core Area preservation prior to the end of the HMP Take Authorization Permit period, or by November 2054. 1 The Multiple Habitat Conservation Plan (MHCP) is the regional framework document that guides the development of city-specific Habitat Management Plans (HMPs) for incorporated North County cities. 2.0 Previous Fee Studies 2.1 2000 Fee Study The HMP was first approved by the Wildlife Agencies in December 1999. That approval triggered the development of an HMP Mitigation Fee Study to determine the appropriate fee amounts for the three habitat types. Planning and GIS staff developed a list of parcels that would be potentially subject to the fee, and Onaka Planning & Economics was contracted to prepare a fee nexus study based upon the list of parcels and the estimated cost of Core Area property acquisition and management. Some .assumptions were needed to estimate the amount of acreage that would be subject to the fee. For example, it was assumed that 25 percent of all coastal sage scrub habitat would be occupied by gnatcatcher, therefore, the estimated fee revenue from coastal sage scrub habitat was reduced by 25 percent. The amount of onsite preservation also needed to be estimated to determine the amount of potential fee. As mentioned below, the estimated on-site preservation had a major influence on the total estimated fee revenue. Based upon the list of properties, assumptions, estimates, and mitigation ratios, the "Fee Study Report for Habitat Management Plan Mitigation Fee Program" was prepared by Onaka Planning and Economics in May 2000. The fees needed to capture enough revenue to cover the expenses of the required Core Area habitat preservation were set as follows: Group D -$7,897 per acre {mitigation ratio of 1:1); Group E -$3,949 per acre (mitigation ratio of 0.5:1, fee 1/2 of Group D); Group F -$790 per acre (mitigation ratio of 0.1:1, fee 1/10 of Group D). This HMP Mitigation Fee was adopted by the City Council in July 2000 and all subsequent development projects were conditioned to pay the fee prior to issuance of grading permit or building permit, whichever occurred first. Since the HMP was not approved by the Coastal Commission and not fully implementable, collection of the fee was deferred until the HMP received final approval. 2.2 2005 Fee Study The final approval of the HMP by the Coastal Commission and subsequently Wildlife Agencies and City Council did not occur until November 2004. During the four-year lapse between initial and final approval, many projects that may have paid the fee received grading and/or building permits and therefore avoided payment of the fee. Also during that time, additional coastal sage scrub acreage was identified for preservation within the City Umit thus lowering the total amount of additional habitat preservation required for gnatcatcher coverage. This loss of potential fee revenue and reduction in the outstanding Core Area acquisition requirement necessitated the revision of the original fee study. In September 2005, Onaka Planning and Economics prepared an updated fee study for the HMP Mitigation Fee. Of the original 307.6 acres of Core Area preservation required, approximately 150 acres was provided and funded through project related mitigation (e.g. Municipal Golf Course, Bressi Ranch, Carrillo Ranch). The City also received credit for an additional 64.19 acres of preservation within the City, leaving an outstanding requirement of 93.15 acres of coastal sage scrub habitat in the Core Area. Of this 93.15 acres, 43.02 was to be acquired by the City and 50.13 acres were to be secured through reimbursement to the developer of the Villages of La Costa Master Plan for already-preserved Core Area habitat. According to the 2005 fee study, the expenses related to the acquisition and preservation of the required Core area, and therefore required fee revenue, were estimated as follows: , 43.02 acres acquisition at $49,500 per acre= $2,129,500 50.13 acres reimbursement at $27,000 per acre= $1,353,510 Fee program administration = $186,574 Total Expenses $3,669,584 Given the amount of development in the intervening period between the initial and revised fee studies, the list of eligible parcels necessitated revision. This revision reduced the acreage of available habitat. Based upon the total expenses needed to cover the outstanding Core Area acquisition and an estimate of the amount of acreage remaining within the City that would be subject to the fee, the HMP Mitigation Fee was adjusted as follows: Group D -$25,683 per acre (mitigation ratio of 1:1); Group E -$12,842 per acre (mitigation ratio of 0.5:1, fee 1/2 of Group D); Group F -'$2,569 per acre (mitigation ratio of 0.1:1, fee 1/10 of Group D). The City Council adopted the HMP Mitigation Pee with an automatic escalation to adjust for inflation. Therefore, unless City Council takes action to not adjust for inflation for a particular year, the fee increases annually. The HMP Mitigation Fee has been collected since its approval in January 2006 and kept in an interest-bearing account. 2.3 2010 Fee Study 2.3.1 Purpose During the early stages of HM P Mitigation Fee implementation, questions arose about which properties were subject to the fee, and some projects paid significantly lower fees than estimated. Based upon the questions offee applicability and the discrepancy between estimated and actual fees paid, Planning staff initiated a follow up fee analysis in 2010 to determine if the total anticipated fee revenue amount would cover the expenses of Core Area property acquisition. Consistent with the previous fee studies, the following assumptions were used: • Onsite habitat is based on the City's 1992 vegetation GIS data layer; • The applicability requirements of the fee are as stated in the HMP (i.e. all privately owned undeveloped property that was not graded within five years prior to fee adoption and does not provide 67% on site habitat conservation) and the 2005 Onaka Fee Study; • Approximately 25 percent of coastal sage scrub Citywide is presumed to be occupied by gnatcatcher and therefore not eligible for the fee; • All parcels will develop within the SO-year HMP Take Authorization Permit period (or before November 2054). The following additional assumptions were also made: • The developers of all parcels five acres or less in area will not provide onsite conservation due to the difficulty and expense in obtaining a Preserve Manager and providing a non-wasting endowment for conservation in perpetuity and, therefore, opt for payment of the fee. • Property owners will maximize conservation on site to lower fee amount; therefore, some undeveloped properties will not pay a fee. • The HMP Mitigation Fee used to calculate the fee revenue was based upon the FY 2009/10 fee and did ncit incorporate the annual automatic fee escalation. This provided a more conservative estimate of fee revenue generated over the life of the program. While the cost of reimbursement and fee program administration remained the same, the value of Core Area property increased to an estimated $55,000 per acre, approximately 11.1% higher than in 2005. Therefore, the total expenses related to acquisition and preservation was estimated to be: 43.02 acres acquisition at $55,000 per acre= $2,366,100 50.13 acres reimbursement at $27,000 per acre= $1,353,510 Fee program administration = $186,574 Total Expenses $3,906,184 2.3.2 2010 Analysis Methods The methodology used for this analysis mimicked the previous HMP Mitigation Fee studies. Using the City's GIS tools, all undeveloped parcels were identified -undeveloped parcels were defined as properties with assessed improvement value of less than $1,000 with developable Zoning and General Plan designations. As stated above, all parcels subject to the Coastal Zone Agricultural Mitigation fee were also eliminated, which included many of the HMP Standards areas within Local Facilities Management Zone 20. Once the undeveloped parcels were identified, aerial photography from 2oq8 was used to verify that the parcels were indeed undeveloped and had development potential. Several parcels were eliminated during this step in the process. The undeveloped parcels were grouped into three categories: parcels containing HMP Standards Areas; parcels currently under development permit review or approved projects that have not yet pulled grading permits or paid a fee; and undeveloped parcels outside of the HMP and not under development review. The latter category constituted the largest number of parcels in the study; however most of these parcels were less than five acres in size and contained agriculture or disturbed lands (i.e. Group . F habitats). This process netted over 200 additional parcels not used in the two previous studies. Once the undeveloped parcels were identified, the different habitat types within the parcel were identified and their acreage quantified using the city's vegetation GIS layer. The habitat types on some properties were adjusted according to more detailed knowledge of the site, including recent site-specific biological reports or field visits. Each habitat type was then assigned its appropriate fee value based the current HMP fee structure. The next step involved an evaluation of the amount of anticipated development and conservation on the property. As mentioned above, all parcels less than five acres in size were assumed to have no on- site conservation and, therefore, 100 percent of all eligible habitat types and their respective values were included. Also, as mentioned above, all coastal sage scrub habitat on properties with five or more acres was reduced in value by 25 percent based upon the assumption that one quarter of coastal sage scrub citywide is occupied by gnatcatcher. For parcels exceeding five acres, staff used site conditions and pending project site designto estimate the amount of development and conservation that would occur on the property. 2.3.3 2010 Results Based upon the methods described above, and the 2010 fee amounts, the total anticipaled fee generation was calculated. The 2010 evaluation concluded that the current fee schedule, even with the automatic annual adjustment factor, was inadequate to cover the full cost of its Core Area obligation. Based on the estimated cost of land acquisition at that time, the shortfall was estimated to be $691,570. 3.0 Current Status of HMP Fee Account and Remaining Credits Since the 2010 fee analysis was conducted, the city has purchased a total of 80.22 credits (acres) as follows: • In January 2011 city purchased 50.13 acres of credit on the Alemir property at a cost of $1,353,510 (Council Resolution 2011-011). • In June, 2011, 30.09 acres of credit was purchased on the Perkins property at a cost of $868,302 (Council Resolution 2011-159). The purchase of these credits required an advance from the General Fund of $230,755 and $755,521, respectively. HMP fees continue to be collected and used to offset this account shortfall. Currently, the account has a shortfall of $155,754. A total 12.93 acres of Core Area credit remains to be acquired. The 2010 fee study estimated the cost of the remaining credits to be approximately $55,000/acre, which is $64,910 when adjusted for inflation to 2019 dollars. The cost of credits includes land acquisition and long-term management. Actual costs depend on current land prices and long-term management, both of which can vary considerably from site to site. Recent appraisals on land that would qualify for Core Area credit vary from $35,469 per acre to $138,000 per acre, as described below. Note that these estimates do not include the cost of long-term management. • Denk Mountain properties (28 acres total), outside of Carlsbad just east of city boundary, within MHCP Core Area: $35,469 per acre, $37,597 per acre and $42, 76 per acre (adjusted for inflation to 2019 dollars). Properties consist of high quality coastal sage scrub and chaparral habitat. Appraisal date -July 2017. This property has been purchased by Center for Natural Lands Management. • Luchia property (39 acres), outside of Carlsbad just east of city boundary, within MHCP Core Area: $66,026/acre. Consists of high quality coastal sage scrub and chaparral habitat. Appraisal date -November 2019. • Aura Circle property (15 acres), in Carlsbad, $138,000/acre. Consists of 5.6 acres of high quality coastal sage scrub; the remainder is mostly disturbed habitat. Appraisal date -December 2019. The cost for this property is much higher than the other properties because it has development entitlements, which would impact only a portion of the property and leave the rest as protected open space. The city was recently approached by the Wildlife Agencies about an opportunity to purchase credits for the remaining 12.93 acres of Core Area credit on the Luchia property. The per-acre cost of credits would be the total cost of acquisition and long-term management ($2,575,000 + $755,273) divided by the total number of acres (39) = $85,392 per acre. Therefore, the total cost to purchase the remaining 12.93 credits would be $1,104,114 ($85,392 x 12.93). The 2010 fee study estimated the cost of the 93.15 credits that were remaining at that time to be $3,906,184 (see Section 2.3.1). If the Lucha property credits are purchased, the actual total cost for the remaining Core Area credit since 2010 would be $3,325,926. Land prices are likely to increase significantly faster than inflation and may outpace the HMP Fee structure. In addition, there will be fewer undeveloped properties with coastal sage scrub available for purchase as the area continues to build out. Therefore, it would be prudent to purchase the Core Area credits on the Luchia property now rather than wait until the HMP fee account builds up sufficiently. Based on the 2010 fee study, the remaining undeveloped properties (including Cantarini Ranch, Holly Springs, Dos Colinas, Rancho Milagro, Villagio, HMP Standards Area properties within Local Facilities Management Zone 15, and vacant parcels outside of the HMP) are estimated to generate approximately $2,186,828 in fees. This would more than cover the estimated shortfall in the HMP fee account, which would be approximately $1,259,868 ($1,104,114 for the remaining credits plus the current shortfall of $155,754). AGREEMENT REGARDING CONSERVATION CREDITS RE: CITY OF CARLSBAD HABITAT MANAGEMENT PLAN OFFSITE CORE AREA This Agreem~nt Regarding Conservation Credits Re: City of Carlsbad Habitat Management Plan Offsite Core Area ("Agreement") is entered into on July _dl....{p_~ 20 L1, by and between the City of Carlsbad ("City") a municipal corporation, The Conservation Fund, Inc., a Maryland non-profit corporation ("Conservation Fund"), the United States Fish and Wildlife Service ("USFWS"), and the California Department of Fish and Game ("CDFG"), collectively referred to as "Parties" herein. RECITALS A. Under the Federal Endangered Species Act section 10 permit for the City of Carlsbad, the USFWS is responsible for approving the location and adequacy of mitigation for impacts to federally listed species and candidate species. Under the California Endangered Species Act, CDFG is responsible for approving the location and adequacy of mitigation for impacts to State listed spe_cies, candidate species, and Species of Special Concern. CDFG and USFWS are collectively referred to as the "Wildlife Agencies". · B. In cooperation with the Wildlife Agencies, on November 9, 2004, the City adopted the Habitat Management Plan for Natural Communities in the City of Carlsbad ("HMP"), a comprehensive city-wide program to identify how the City can preserve the diversity of habitat and protect sensitive biological resources within the City while allowing for additional development under a city-wide permit and authorization for the incidental take of species in conjunction with private development projects, public projects and other activities which are consistent with the HMP. The City's HMP is a subarea of the Regional Multiple Habitat Conservation Plan ("MHCP") adopted in March 2003 by San Diego Association of Governments. C. Pursuant to the HMP, the City's total core area conservation requirement is 307.6 acres, 264.58 of which has been satisfied as acknowledged by the Wildlife Agencies in the letter attached as Exhibit A. The City's remaining conservation requirement is 43.02 acres. D. The Conservation Fund owns approximately 155.77 acres of property in the County core area commonly known as the Perkins Property ("Perkins Property") as depicted in the map attached as Exhibit B. The Wildlife Agencies have approved the City's funding ofan endowment for long-term management of a portion of the Perkins Property ("Conserved Habitat Lands" as generally depicted in Exhibit B) in exchange for 30.09 acres of core area conservation credits. The Conserved Habitat Lands comprise approximately 100 acres. Upon completion of the total payment, the City's remaining core area conservation requirement under the HMP would be 12.93 acres. E. At the time of execution of this Agreement, it is anticipated by the Parties that the Conservation Fund will soon transfer fee title to the Perkins Property to the Center for Natural Lands Management, a California nonprofit public benefit corporation ("CNLM"), a conservation entity that will own and manage the Perkins Property to perpetually conserve and preserve its ecological and biological values. F. Towards partial fulfillment of the City's remaining core area conservation requirement, the City desires to fund an endowment for the preservation in perpetuity of a portion of the Perkins Property in the amount of $868,302.00 in exchange for Wildlife Agencies' agreement that payment of such endowment made over a four-year period will constitute fulfillment of 30.09 acres of City's HMP core area conservation requirement, as more particularly described in this Agreement. G. Execution of this Agreement by USFWS and CDFG acknowledges the Wildlife Agencies' agreement to credit the City with a total of 30.09 acres of conservation toward its HMP requirement upon payment by City in accordance with this Agreement. These credits are only available to the City of Carlsbad, and the City's rights to these credits are not tied to any portion of the Perkins Property. Following each payment by the City, the Wildlife Agencies will confirm conservation credit to the City pursuant to the schedule and requirements below and such credits will be deducted from the City's outstanding core area conservation requirement under the HMP. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged; the Parties agree as follows: 1. Endowment Funding. The City wishes to fund the endowment for the preservation in perpetuity of the Conserved Habitat Lands irt exchange for conservation credit under the HMP. The City shall pay a total of $868,302.00 ( eight hundred sixty eight thousand three hundred two dollars) to the Conservation Fund (or to CNLM, if CNLM has acquired fee title to the Perkins Property from the Conservation Fund) in four installments as follows: (a) $217,075.50 to be paid within ninety (90) calendar days of execution of this Agreement for 7.53 acres of conservation credit; (b) $217,075.50 to be paid on the anniversary of the first payment in the year 2012 for 7 .52 acres of conservation credit; (c) $217,075.50 to be paid on the anniversary of the first payment in the year 2013 for 7.52 acres of conservation credit; and (d) $217,075.50 to be paid on the anniversary of the first payment in the year 2014 for 7.52 acres of conservation credit. i) The annual payment amounts and total payment amount for the credits are not subject to change if for any reason it is subsequently determined by any party that the endowment amount as set forth above is insufficient for any reason. ii) The 30.09 acres of conservation credit is contingent only upon the City's timely payments of the above installments and will not be contingent on the condition of the Perkins Property or its management. 2. Credit Confirmation. Within 24 hours ofreceipt of the above payments, the Conservation Fund or CNLM, as applicable, will provide City and the Wildlife Agencies with written confirmation of payment at the following addresses: Karen Goebel Assistant Field Supervisor United States Fish and Wildlife Service Carlsbad Fish and Wildlife Office 6010 Hidden Valley Road, Suite 101 Carlsbad, CA 92011 Edmund J. Pert Regional Manager, South Coast Region California Department of Fish and Game 3883 Ruffin Road San Diego, CA 92123 The Conservation Fund c/o Lily G. Engle, Associate Counsel 1655 North Ft. Myer Drive, Suite 1300 Arlington, Virginia 22209 With a copy to: Scott Ferguson, Southern California Program Director The Conservation Fund 1.100 South Coast Highway, # 302 Laguna Beach,.CA 92651 David Monroe, General Counsel Center for Natural Lands Management 3074 Heavenly Ridge Street Thousand Oaks, CA 91362 Jane Mobaldi Assistant City Attorney City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 David Hauser Property and Environmental Management Director City of Carlsbad 1635 Faraday Avenue Carlsbad, CA 92008 Within 30 calendar days ofreceipt of notice that the City has made each payment, USFWS and CDFG will provide written confirmation to City and the current property owner of the Perkins Property that the City has been credited with the proportionate amount of conservation credit towards fulfillment of its HMP requirement. 3. Management of Perkins Property and Endowment. The Conservation Fund shall manage the Perkins Property in accordance with a management plan approved by the Wildlife Agencies. The Conservation Fund shall hold, invest and manage the endowment funds received from the City pursuant to this Agreement ("Endowment") pursuant to an Endowment Stewardship Agreement with the Wildlife Agencies. 4. Further Assurances. Whenever requested to do so by another party, each party shall execute, acknowledge, and deliver any further instruments or documents that are reasonably necessary to document the transactions contemplated by this Agreement. 5. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same document. 6. Governing Law. This Agreement shall be'governed by and construed in accordance with the laws of the State of California, without regard to principles of conflicts of laws. 7. Successors. (a) The Conservation Fund shall assign its obligations under this Agreement to CNLM, and cause CNLM to assume such obligations, concurrently with CNLM's acquisition of all or any portion of the Perkins Property. Concurrently with such assignment the Conservation Fund shall transfer the Endowment (including all interest and return earned on such funds) to CNLM. (b) The Conservation Fund (or CNLM, if applicable) agrees to give written notice of this Agreement to any prospective transferee of all or any portion of the Perkins Property at least 30 days prior to the proposed transfer and (unless the City and the Wildlife Agencies otherwise agree in writing) to cause such transferee to assume this Agreement concurrently with its acquisition of such property. In addition, the Conservation Fund ( or CNLM, if applicable) agrees to give written notice of any proposed transfer of the Perkins Property or any portion of it to the Parties at least 30 days prior to the proposed transfer. Any such notice shall describe the proposed handling of the Endowment upon the transfer. · 8. Amendment. This Agreement can only be amended in a writing signed by all of the Parties. 9. Notices. Any notice, request or other communication under this Agreement shall be in writing and addressed as set forth in Section 2. A party shall give notice of change of address by written notice to the other Parties in accordance with this section. l 0. Exhibits. The following Exhibits are attached to this Agreement and incorporated by reference in it as though set forth in full: A-Acknowledgment of Mitigation Credit Letter 5/9/11 B -Map of Perkins Property and General Depiction of Conserved Habitat Lands 11. Interpretation. This Agreement shall be construed as if all Parties prepared it. IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their duly authorized representatives as of the date set forth above. DATED: July 26th, 2011 i .)~ I, I :. DATED: 7-19-Jo II II DATED: ·z-Ir-,, CALIFORNIA DEPARTMENT OF FISH AND GAME • /2 DATED: THE CONSERVATION FUND, INC., a Ma I d Dec. 19, 2019 . John Donnelly Executive Director Wildlife Conservation Board 1807 13th St., Ste. 103 Sacramento, CA 95814 Attachment D ~ ~Cityof Carlsbad Re: Letter of support for the purchase of 12.93 acres of Gnatcatcher Core Area credit to the Wildlife Conservation Board who will be providing grant funqs for property acquisition · Dear Mr. Donnelly: One of the city's main goals in adopting the Habitat Management Plan (HMP) was to · allow incidental take of the federally threatened coastal California gnatcatcher in-the · city through adequate preservation of coastal sage scrub, the preferred habitat of this . . . . . ' . . . species.· During the preparation of the HMP, the Wildlife Agencies d~termined there was not e-ilbug~ coastal sag~ scrub habitat within the city to achieve the necessary a~reage for-coverage of the gnatcatcher. Therefore, the city was required to cause the preservation of 307 .6 acres of gnatcatcher habitat southeast of the city, within the Gnatcatcher Core Area (Core Area). To date, the city has acquired 294.67 acres of . coastal sage scrub habitat toward fulfilling this requirement. The city was recently approached by the Wildlife Agencies about an opportunity to purchase credits for the remaining 12.93 acres of Core Area credit on the 39-acre Luchia property (see attached map). Following the m.odel of the Core Area credits purchased by . the city 6n the Perkins Property in 2011~ the per-acre cost of credits would be the total . cost of acquisit ion plus long-term management divided by th_e total nu·mber of acres. The total cost to purchase the remaining 12.93 credits is estimated to be $1,104,114. City staff will° recommend the use of city General Funds to purchase the 12.93 acres of credit, and seek City Council approval of the Final Agreement with the Wildlife Agencies, which will outline the details of this transaction: City Hall 1200 Carlsbad Village Drive I Carlsbad, CA 9200~ I 760-434--2821 t Mr. Donnelly Dec. 19, 2019 Page 2 If you have any questions or com men.ts pertaining to this letter, please contact Rosanne · Hu phrey, Senior Program Manager for the HMP at 760-602-4689 or . . . R-s ne.Humphrey@carlsbadca.gov. City Manager Attachment: Map of Luchia Property and MHCP Gnatcatcher Core Area cc: Amanda Guy, Carlsbad Deputy City Attorney Elaine Lu key, ·carlsbad Chief Operations Officer James Wood, Carlsbad Environmental Manager Rosanne.Humphrey, Carlsbad Senior Program Manager MaryBeth Woulfe, US. Fish and Wildlife Service David Mayer; California Department of Fish and Wild.life · Sadie Smith, California Department of Fish and Wildlife · W_arren Wong, California Department of Fish and Wildlife