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PCRES 2005-049PLANNING COMMISSION RESOLUTION 2005-049 A RESOLUTION OF THE OF THE PLANNING COMMISSION OF THE CITY OF LA QUINTA, CALIFORNIA, RECOMMENDING TO THE CITY COUNCIL APPROVAL OF AN AMENDMENT TO A DEVELOPMENT AGREEMENT BY AND AMONG THE CITY OF LA QUINTA AND CP DEVELOPMENT LA QUINTA, LLC CASE NO.: DEVELOPMENT AGREEMENT 2003-006, AMENDMENT #2 WHEREAS, the Planning Commission of the City of La Quinta, California did, on the 111" day of October, 2005, hold a duly noticed Public Hearing to consider an amendment to a Development Agreement by and among the City of La Quinta and CP Development La Quinta, LLC for property located at the southeast corner of Washington Street and Miles Avenue; and WHEREAS, said General Plan Amendment application has complied with the requirements of "The Rules to Implement the California Environmental Quality Act of 1970" as amended (Resolution 83-68), in that the La Quinta Community Development Department has completed Environmental Assessment (EA) 2005-551, an Addendum to EA 2001-436. The Community Development Director has determined that the amended Development Agreement will not have a significant adverse impact on the environment and therefore, recommends an Addendum to the previously certified Mitigated Negative Declaration of environmental impact be certified; and WHEREAS, at the Public Hearing upon hearing and considering all testimony and arguments of all interested persons desiring to be heard, said Planning Commission did make the following Mandatory Findings to justify a recommendation to the City Council for approval of said Development Agreement Amendment: 1. The proposed Development Agreement Amendment is internally consistent with the goals, objectives, and policies of the General Plan and Specific Plan 2001-055, Amendment #2, in that it will result in promoting commercial development in a controlled and logical manner that is compatible with the neighborhood. 2. The land uses authorized and regulations prescribed for the Development Agreement are compatible with the zoning and its related regulations applicable to the property. 3. The proposed Development Agreement conforms with the public convenience and general welfare by providing for extensive public PAReports - PC\2005\10-11-05\Centre Pointe\da 2003-006 amend #2 pc res.doc Planning Commission Resolution 2005-049 Development Agreement 2003-006, Amendment #2 Adopted: October 11, 2005 improvements and conforms to good land use practice by encouraging a long-range comprehensive approach to the development of major hotel facilities, medical facilities and residential complexes. 4. Approval of this Development Agreement Amendment will not be detrimental to the health, safety and general welfare since adequate provisions have been made in previous City approvals to provide for necessary and desirable improvements which are incorporated herein. 5. Approval of this Development Agreement Amendment Will not adversely affect the orderly development of the subject or surrounding properties nor preservation of area -wide property values, but rather will enhance them by encouraging planned -phased growth. 6. Consideration of this Development Agreement Amendment has been accomplished pursuant to California Government Code Section 65864 et seq. and the City of La Quinta Municipal Code Section 9.250.030, which governs Development Agreements. NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of La Quinta, California as follows: 1. That the above recitations are true and correct and constitute the findings of said Planning Commission in this case; and 2. That it does hereby recommend to the City Council approval of Development Agreement, Amendment #2 for the reasons set forth in this Resolution. PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta Planning Commission, held on this 111h day of October, 2005, by the following vote, to wit: AYES: Commissioners Alderson, Ladner, Quill and Chairman Kirk NOES: None ABSENT: Commissioner Daniels ABSTAIN: None P:\Reports - PC\2005\1 0-1 1-05\Centre Pointe\da 2003-006 amend #2 pc res.doc Planning Commission Resolution 2005-049 Development Agreement 2003-006, Amendment #2 Adopted: October 11, 2005 VKIRK, Chairman of La Quinta, California ATTEST: DOUGLA .EVANS Community Development Director City of La Quinta, California P:\Reports - PC\2005\10-11-05\Centre Pointe\da 2003-006 amend #2 pc res.doc RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk (Exempt from Recording Fee per Gov't Code § 27383) AMENDMENT NO. 2 TO DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 2 TO DEVELOPMENT AGREEMENT ("Amendment No. 2") is made and entered into as of , 2005 ("Effective Date") by and between the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California (the "City"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the La Quinta Redevelopment Agency ("Agency") and Developer entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency agreed to sell to Developer, and Developer agreed to purchase from Agency, that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Site"), and to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single- family residential developments, with forty (40) of the single-family homes restricted for sale to "Eligible Buyers" at an "Affordable Housing Cost" (as those terms are defined in the DDA (collectively, the "Project"). The Site is legally described in Exhibit "A", which is attached hereto and incorporated herein by this reference. B. Concurrently with the execution of the Original DDA, the City and Developer entered into that certain Development Agreement dated December 18, 2003, and recorded on January 5, 2004, as Instrument No. 2004-0005256, in the Official Records of the County of Riverside (the "Original Development Agreement"), for purposes of (i) identifying the terms, conditions, and regulations for the construction of the Project, certain components of which constitute a Planned Development (as defined in Civil Code Section 1351(k)); (ii) setting forth a payment schedule for the Developer's payment to the City of certain amounts designed to compensate the City in the event that certain components of the Project fail to generate specified levels of transient occupancy tax (as that term is used in La Quinta Municipal Code Chapter P:\Reports - PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement_v2.DOC 3.24); (iii) setting forth a payment schedule for the Developer's payment to the City of Three Hundred Forty -Six Thousand Eleven Dollars ($346,011), to cover the Developer's contribution towards the cost of certain landscaping improvements installed within certain portions of the real property adjacent to the Site; (iv) requiring the Developer, at its sole cost, to construct a neighborhood park on certain real property owned in fee by the City; and (v) setting forth the extent to which Developer may construct, develop, use and operate the Project. C. On or about October 28, 2004, (i) Agency and Developer entered into that certain Amendment No. 1 to Disposition and Development Agreement ("Amendment No. 1 to DDA") to revise (a) certain timeframes in the schedule of performance attached to the Original DDA; (b) certain conditions that had to be satisfied prior to the Agency's conveyance to Developer of the Site; and (c) the transfer and assignment provisions in the Original DDA, and (ii) City and Developer entered into that certain Amendment No. 1 to Development Agreement (Amendment No. 1 to Development Agreement") to revise the transfer and assignment provisions in the Original Development Agreement. The Original Development Agreement, as modified by Amendment No. 1 to Development Agreement, is hereinafter referred to as the "Development Agreement." D. On or about December 7, 2004, Agency and Developer entered into that certain Amendment No. 2 to Disposition and Development Agreement ("Amendment No. 2 to DDA") which amended the Original DDA, as amended by Amendment No. 1 to DDA, to provide for the Agency's agreement to subordinate Repurchase Option I in the same manner, and subject to the same terms and conditions, as the Agency had agreed to subordinate Repurchase Option III in order to accommodate Developer's acquisition and development lender. Concurrently with the parties' execution of Amendment No. 2 to DDA, Agency conveyed to Developer the Property. The Original DDA, as modified by Amendment No. 1 and Amendment No. 2, is hereinafter referred to as the "DDA." E. On or about April 4, 2005, Parcel Map No. 31116, in the City of La Quinta, was filed in the Official Records of the County of Riverside in Book 212 of Parcel Maps at pages 60- 66, inclusive (the "Parcel Map"). The Parcel Map created legal parcels within the Site that differ from the parcels depicted on the Site Map attached to the Development Agreement. In particular: (i) the Parcel Map created one legal parcel for development thereon of the Casitas Development (identified thereon as "Parcel 2"), where the Site Map had depicted the Casitas Development on three parcels; (ii) the Parcel Map created one legal parcel for development thereon of the Sanctuary Villas Development (identified thereon as "Parcel 7"), where the Site Map had depicted the Sanctuary Villas Development on two parcels; and (iii) the Parcel Map created one legal parcel for development thereon of the Medical Office/Surgical Facility (identified thereon as "Parcel 6"), where the Site Map had depicted the Medical Office/Surgical Facility on four parcels. The Parcel Map also created "Parcel 1" and "Parcel 5" for development thereon of the Restaurants, "Parcel 3" for development thereon of the Villas Residential Development, "Parcel 4" for development thereon of the Suites Hotel, "Parcel 8" for development thereon of the Cluster/Perimeter Residential Development, and "Parcel 9" for development thereon of a public park. A copy of the Parcel Map is attached hereto and incorporated herein as Exhibit `B". All further references herein to a "Parcel" shall mean the parcel created on the Parcel Map. PAReports - PC\2005\1 0- 1 1-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement_v2.DOC -2- F. Concurrently with the preparation and processing through the City hereof, (i) the Developer has prepared and is processing through the City an amendment to the Center Point Specific Plan, also known as Specific Plan No. SP 2001-055, as previously amended by City Council Resolution No. 2003-035, on June 3, 2003, to modify the uses permitted on certain portions of the Property (the "Specific Plan Amendment"), and (ii) the Agency and Developer have prepared that certain Amendment No. 3 to Disposition and Development Agreement ("Amendment No. 3 to DDA") to modify certain components of the Project and revise the timeframe set forth in the DDA for Developer's completion of the Suites Hotel. G. The City and Developer now desire to amend the Development Agreement to modify the description of the Project and certain obligations of the Developer set forth therein. The parties contemplate that, concurrently with the City Council's consideration of this Amendment No. 2, the City Council will consider the Specific Plan Amendment and the Agency Board will consider Amendment No. 3 to DDA. H. The City Council has determined that this Amendment No. 2 is consistent with the City's General Plan and the Specific Plan, including the goals and objectives thereof. I. All actions taken by City have been duly taken in accordance with all applicable legal requirements, including the California Environmental Quality Act (Public Resources Code Section 21000, et seq.) ("CEQA"), and all other requirements for notice, public hearings, findings, votes and other procedural matters. J. On , 2005, the City Council adopted its Ordinance No. approving this Amendment No. 2. Unless otherwise specified herein, all capitalized terms in this Amendment No. 2 shall have the meaning ascribed in the Development Agreement. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. The Development Agreement is hereby amended as follows: 1.1 To replace Section 3.1 with the following: 3.1 Development of the Project: Planned Development. Developer shall construct the Project on the Site in accordance with the Development Plan. The Project shall consist of a mixed -use residential and commercial development with the following components: (A) a mid -price suites hotel containing approximately one hundred twenty-nine (129) guest rooms ("Suites Hotel") to be constructed on Parcel 4; P:\Reports - PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement_v2.DOC -3- (B) a resort -style condominium/casitas project containing approximately one hundred sixty-four (164) condominium/casitas units ("Casitas Development") to be constructed on Parcel 2 and Parcel 3; (C) a residential development containing approximately sixty (60) detached, single family homes (the "Residential Development"), to be constructed on Parcel 8; with (i) fourteen (14) of the homes ("Unrestricted Homes") within the Residential Development to be sold on a market rate basis; and (ii) forty (40) of the homes ("Affordable Homes") within the Residential Development to be marketed and sold to moderate income buyers at an affordable housing cost (as those terms are defined in Health & Safety Code Section 50093); (D) two (2) restaurants (the "Restaurants"), with one Restaurant to be constructed on Parcel I and one Restaurant to be constructed on Parcel 5; (E) a medical office/surgical facility ("Medical Office/Surgical Facility") to be constructed on Parcel 6 and Parcel 7; and The Residential Development and the Casitas Development shall each constitute a Planned Development, and shall be developed and operated in compliance with Section 1350, et seq. of the Civil Code. 1.2 To revise Section 3.3.1 to replace the phrase "the Casitas Development Parcel" with "Parcel 2 and Parcel 3." 1.3 To delete, in its entirety, Section 3.3.2. 1.4 To replace, in their entirety, Sections 3.4.1 through 3.4.7 with the following: 3.4.1 General. During the Term of this Agreement, Developer or the Casitas Development HOA, as applicable, shall make the payments to City described in this Section 3.4. The payments under this Section 3.4 are not the exclusive development impact fees for the Project and nothing in this Section 3.4 shall be construed as a limitation on the right of the City to impose, levy, or assess the Site other development fees as permitted by applicable law. 3.4.2 Developer's Payments of One -Time Mitigation Fees. Developer shall pay to the City, for each unit in the Casitas Development, with such payment due upon the first close of escrow for each such unit, the sum of One Thousand Five Hundred Eighty -Five Dollars ($1,585). P:\Reports - PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement_v2.DOC 4- 3.4.3 Casitas Development Annual Mitigation Fee; Termination. During the term of this Agreement, on each July Ist following the Effective Date ("Annual Mitigation Payment Date"), the Casitas Development HOA shall pay to the City an annual mitigation fee ("Casitas Development Annual Mitigation Fee") covering the annual period of the prior July I through the June 30 occurring immediately preceding the Annual Mitigation Payment Date (the "Operative Year") [provided, however, the first Operative Year shall commence on the Effective Date of this Agreement and end on the next occurring June 30). The Casitas Development Annual Mitigation Fee shall be the collective sum of One Hundred Fifty Dollars ($150) [as the same may increase by the CPI in accordance with Section 3.4.7] for each unit ("Casitas Development Unit Fee") in the Casitas Development that has been sold to a purchaser, as evidenced by the close of escrow for such unit, prior to the applicable Annual Mitigation Payment Date regardless of when or in which Operative Year the unit was sold. Notwithstanding anything herein to the contrary, the Casitas Development Annual Mitigation Fee shall not be required to be paid for any Operative Year in which the City has received transient occupancy taxes derived from, collectively, the Suites Hotel and the Casitas Development, which equal or exceed Five Hundred Forty -Six Thousand One Hundred Thirty -One Dollars ($546,131) [as the same may increase by the CPI in accordance with Section 3.4.7] (the "Minimum Annual TOT Amount") for the applicable Operative Year. Notwithstanding the paragraph above, if the City has received the Minimum Annual TOT Amount in each of three (3) consecutive Operative Years, the Casitas Development HOA's obligation to pay the Casitas Development Annual Mitigation Fee shall be terminated and shall be of no further force or effect. 3.4.4 [Intentionally Omitted] 3.4.5 Payment of Casitas Development Public Facilities Fee. In addition to the other payments required to be paid pursuant to this Section 3.4, the Casitas Development HOA shall be required to pay to the City the sum of five percent (5%) of any rental amount charged for occupancy of a unit in the Casitas Development which is rented for a period of more than thirty (30) days (the "Casitas Development Public Facilities Fee"). The Casitas Development Public Facilities Fee shall be due and payable to the City within thirty (30) days after any such occupancy terminates, regardless of whether the rent, or any amount thereof, was collected. If the unit is provided free of charge or at a discount, as consideration for a service provided to the owner of the unit or to the Casitas Development HOA and/or for promotional or marketing purposes, the rent shall be deemed to be the higher of (i) the value of the services received; or (ii) the average rent of all of the units in the Casitas Development during the period the unit was provided. Notwithstanding the foregoing, the requirement to pay the Casitas Development Public Facilities Fee shall not apply in the case where an owner of a Casitas Development unit provides his or her Casitas P:\Reports - PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement_v2.DOC -5- Development unit to a person who is a relative of the owner, for no consideration, for a period of more than thirty (30) days. 3.4.6 [Intentionally Omitted] 3.4.7 Consumer Price Index Adjustments. Each of the Casitas Development Annual Mitigation Fee, the Casitas Development Unit Fee, and the Minimum Annual TOT Amount shall be adjusted annually, on each May Ist during the term of this Agreement, by the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles - Riverside -Orange County average, All Items, 1982-84 = 100, published by the United States Department of Labor, Bureau of Labor Statistics (the "CPI"), by comparing the CPI existing on the immediately prior March lst to the CPI existing on the March 1st of the previous year. No adjustment shall be made in any year in which there has been a decrease in the CPI. If the CPI is no longer published at any point during the Term of this Agreement, a comparable index shall be selected by the parties. 1.5 To revise Section 3.4.10 to replace the phrase "on the Villas Residential Development Parcel or the Cluster/Perimeter Residential Development Parcel" with the phrase "within the Residential Development." 1.6 To replace, in its entirety, Section 3.5 with the following: 3.5 Park Improvements. Developer agrees to develop a neighborhood park on Parcel 9, in accordance with the list of park improvements set forth in Exhibit "D" hereto (the "Park Improvements") and all applicable City and State laws and regulations. Prior to Developer's entry onto Parcel 9, Developer shall enter into an Early Entry Agreement with the City substantially in the form of which is attached hereto as Exhibit "E". The Park Improvements shall be completed and accepted by the City prior to, and as a condition of, the City's final inspection of the first unit in the Residential Development. 2. Developer acknowledges that it has transferred and assigned, or intends to transfer and assign, the rights and obligations under the DDA to develop the Casitas Development to Lennar Homes of California, Inc., a California corporation ("Lennar") and that Lennar intends to prepare a new tract map (the "New Tract Map") that merges Parcel 2 with Parcel 3. 3. Developer intends to prepare a lot line adjustment that merges Parcel 6 with Parcel 7, and transfers a portion of Parcel 7 to Parcel 8 (the Lot Line Adjustment"). The Developer contemplates that the new Parcel created by merging Parcel 6 with Parcel 7 will consist of approximately 13.63 acres, and that Parcel 8 will, after the Lot Line Adjustment, consist of approximately 9.45 acres. Within thirty (30) days after the later of (i) the date the Lot Line Adjustment has been processed, or (ii) the date the New Tract Map has been approved by the La Quinta City Council, the Developer's engineers shall prepare and submit to the City a new site map (the "New Site Map") that reflects the changes effected by the New Tract Map and the Lot PAReports - PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement_v2.DOC -6- Line Adjustment. Upon confirmation by the City that the New Site Map accurately reflects said changes, the New Site Map shall automatically replace the Site Map currently attached to the Development Agreement as Exhibit A-2. 4. This Amendment No. 2 shall not be effective unless and until (i) the City Council has approved the Specific Plan Amendment; (ii) the Agency Board has approved Amendment No. 3 to DDA; and (iii) Agency and Developer have executed Amendment No. 3 to DDA. 5. Except as otherwise expressly provided in this Amendment No. 2, all of the terms and conditions of the Development Agreement shall remain in full force and effect. 6. In the event of any action between City and Developer seeking enforcement of any of the terms and conditions to this Amendment No. 2, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 7. This Amendment No. 2 shall be construed according to its fair meaning and as if prepared by both parties hereto. 8. This Amendment No. 2 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Municipal and Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 2. Service of process on City shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 9. Time is of the essence of this Amendment No. 2 and of each and every term and provision hereof. 10. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both City and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 11. Signatures of the parties transmitted by facsimile shall be deemed binding. However, each party agrees to submit their original signature to the other party within five (5) business days after execution hereof. 12. This Amendment No. 2 may be executed in counterparts, each of which, when this Amendment No. 2 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 13. The person(s) executing this Amendment No. 2 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 2 on behalf of said party, (iii) by so executing this Amendment No. 2 such party is formally bound to the provisions of this P:\Reports - PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement v2.DOC -7- Amendment No. 2, and (iv) the entering into this Amendment No. 2 does not violate any provision of any other agreement to which such party is bound. IN WITNESS WHEREOF, City and Developer each hereby represents that it has read this Amendment No. 2, understands it, and hereby executes this Amendment No. 2 to be effective as of the day and year first written above. Date: .2005 01111 ji "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard Oliphant Its: President "City" CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California Date: 2005 By: City Manager ATTEST: June Greek, City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP I� M. Katherine Jenson, City Attorney PAReports - PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreementy2.DOC -g- STATE OF CALIFORNIA ) ss COUNTY OF ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss COUNTY OF ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] PARepons- PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement_v2.DOC -9- STATE OF CALIFORNIA ) ) ss COUNTY OF ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] PAReports - PC\2005\10-11-05\Centre Pointe\Amendment No. 2 to Center Point Development Agreement_v2. DOC -1 0' EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE Parcels 1-8 of Parcel Map 31116, in the City of La Quinta, as per Map filed in Book 212, Pages 30-66, inclusive, of Parcel Maps, in the Office of the County Recorder of Riverside County. 882/015610-0061 620306.02 a 10/17/05 -1- EXHIBIT "B" PARCEL MAP [See Following Pages] 882/015610-0061 620306.02 a10/17/05