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02-04-1992 - Tract 47815 - Approval of Park Fee Agreement - Taico Properties, Inc.0 TO: City Manager and City Council FROM: Harry W. Thomas • SUBJECT: Tract 47815 - Approval of Park Fee Agreement - Taico Properties, Inc. City of West Covina Memorandum AGENDA ITEM NO. D-2 DATE February 4, 1992 Summary: Taico Properties, Inc. is requesting approval of a Park Fee Agreement for phased payment of park fees and credit for on -site active recreational areas in developing a 53-unit development on Aroma Drive. Background: Tentative Map No. 47815 has previously been approved by the Planning Commission as a 53-unit subdivision. As with all subdivisions, dedication of land for parks or payment of a Park Fee is required. State law provides that the City Council shall permit a credit for on - site active recreation areas to be applied towards the payment of the required Park Fee. The subdivider has requested such a credit and the Planning Commission has recommended City Council approval. Also, State law provides for the payment of the Park Fee at the time of recording the final map or at a later time as may be prescribed by local ordinance. Although the City does not have an ordinance governing later payment of park fees, the City Attorney has indicated that the City Council may contractually agree to allow payment of park fees at a time other than recordation of the final map. The developer has requested the City Council approve an agreement allowing the payment of the required park fee in three phases. Analysis: The request for a credit for the on -site active recreational areas is a means by which an acknowledgement can be made that on -site recreational facilities can substitute for public recreational facilities that would otherwise be used by the residents of the subdivision. The on -site recreational facilities are a requirement of the "Specific Plan" zoning that was approved on this property. The amount of the credit is based upon the value of the land usable for active recreational purposes as provided by State law. Section 66007 of the Government Code does not allow the collection of fees levied on residential development, with the exception of park fees, until final inspection of the residential units or the date of the certificate of occupancy, whichever occurs first. These events typically occur many months or even years after the approval of the final subdivision map. The statute allows certain exceptions to this requirement where the City has appropriated funds or incurred costs on behalf of the development that will be reimbursed from these fees. The subdivider has requested that he be allowed to pay the park fee in three phases so that he can reduce his "carrying costs" and pay the fee incrementally as the project is developed and additional burden is placed upon City recreational facilities. The subdivider is proposing payment of the park fee in accordance with the following schedule: a) $87,695 upon recordation of the Final Map; b) $87,695 upon issuance of the 16th building permit (30% of 53 units); c) $87,695 upon issuance of the 32nd building permit (60% of 53 units). ngreemen: ee47815 • 7 City Manager and City Council Tract 47815 - Approval of Park Fee Agreement February 4, 1992 Page 2 Analysis - contd. If any increment of the park fee remains unpaid after three years from the date of Final Map approval, the park fee shall be recalculated based on the entire project but any increase shall be paid only on those lots for which the park fee remains unpaid. Staff has reviewed the developer's request and is recommending that the City Council approve an agreement with the subdivider granting a credit of $48,555 against the gross park fee of $311,640 and allowing a phased payment of the net $263,085 fee as outlined above. Staff feels that the subdivider's request for the Park Fee Agreement is reasonable based upon the following factors: a) The current economic climate especially with respect to the construction industry has made it difficult to obtain financing for new construction and has significantly slowed the absorption period for new residential units thus :increasing the subdivider's carrying costs. b) The City would benefit economically from a more rapid absorption period through earlier payment of construction tax and an earlier increase in assessed valuation of the property. c) The proposed park fee payment schedule would provide for full payment at the time of issuance of 60% of the building permits. Thus City recreation facilities would not be unduly burdened before all of the fee was in hand. d) Any unpaid portion of the park fee remaining after three years can be recalculated to reflect any increase in future land values and/or unit population density and thus provide protection against devaluation .of the park fee if the project absorption period is excessively long. e) The City has not yet appropriated any funds nor incurred any costs for recreation facilities that would be built to benefit the future residents of the project. The proposed Park Fee Payment schedule is expected to adequately address any increased need for recreation facilities created by this project. The proposed agreement is consistent with the Park Fee Agreement recently approved by Council for the Lewis Homes project on, Sunset Avenue and the Proposed Park Fee Policy recommended for adoption. Fiscal Impact: The fiscal impact of approving a credit for the on -site active recreational areas is that the City will not receive $48,555 in Park Fees. The fiscal impact of approving the phasing of the payment of the Park Fee is primarily related to cash flow. As requested, the subdivider will pay one-third ($87,695) of the Park Fee ($311,640 less the $48,555 credit) after the City Council approves the Final Map but prior to recordation of the Final Map. Subject to possible adjustments due to increases in land values and/or subsequent Federal Census data, one-third of the Park Fee will be paid at 30% building.permit issuance and the final one-third of the Park Fee will be paid at 60% building permit issuance. agreemen:r6c47815 City Manager and City Council Tract 47815 - Approval of Park Fee Agreement February 4, 1992 Page 3 Alternatives: There are several alternatives available to the City Council, as follows: 1) Require payment of the full amount of the park fee less allowable credit at recordation of the Final Map. This alternative could result in an immediate payment of the entire park fee. Or this alternative could result in delay of the project and deferral of any payment of the park fee. 2) Require phased payment at specific times rather than at certain stages of development. The City could then be assured of the payments within a time certain rather than be dependent only on the rate of sales of the units. This ,provision would require an improvement security to guarantee payment. 3) Use a different payment schedule to accelerate the payments to the City. 4) Adopt an ordinance pursuant to Section 66477 of the Government Code providing for payment of park fees at a later time than recordation of the final map. Since the City may now contractually negotiate park fee payment schedule agreements reflecting both the interests of the City and.the needs of a particular project, adoption of_a,new ordinance is at best superfluous and at worst introducing an unnecessary element of inflexibility into the development process. Staff has reviewed all of these alternatives in negotiating .the attached agreement and feels that the proposal outlined in the Analysis section best balances the interests of the subdivider and the City while facilitating the development of the project. RECOMMENDATION: Staff recommends that the City Council: a) Approve Planning Commission recommendation for Park Fee credit in the amount of $48,555. b) Authorize the Mayor and City Clerk to execute a Park Fee Agreement with Taico Properties, Inc. providing for phased payment of park fees in the total amount of $263,085. W. Thomas Public Works Division Manager/City Engineer HWT:AGV:cn Attachments agreemenJee47815 TAICO PROPERTIES, INC. 350 S. FIGUEROA ST SUITE 233 LOS ANGELES, CAL. 90071 PHONE: (213) 628-4893 FAX NO. (213) 613-1630 January 23, 1992 Mr. Harry W. Thomas Public Works Division, Manager/City Engineer CITY OF WEST COVINA 1444 West Garvey Avenue Post Office Box 1440 West Covina, California 91793 Re: Tract No. 47815 Dear Mr. Thomas: Enclosed are two executed copies of the Park Fee Agreement. Other than the modifications on items pertinent to the subject tract, this agreement is identical to the Lewis Home agreement. The date for such council action was left blank because the Council has not yet acted on the agreement. Provided that you find the agreement satisfactory and after we have paid the first scheduled park fee payment and the amount to acquire Lot 9, I would like to suggest that the City Council consider approval of the following items in the same session: 1. The park fee credit of $48,555.00; 2. The Park Fee Agreement; 3. The sale of Lot 9 to Taico Properties; and 4. Tract No. 4*5 for recordation. Thank you for your attention to this matter. Sincerely, r J< V JP/kkv Enclosures cc: Mr, Tom Mayer RECORDING REQUESTED BY, AND WHEN RECORDED, MAIL'TO: CITY OF WEST COVINA ATTENTION: CITY ENGINEER 1444 W. GARVEY AVENUE WEST COVINA, CA 91793 PARK FEE AGREEMENT BETWEEN TAICO PROPERTIES, INC. ("Developer") AND CITY OF WEST COVINA PARK FEE AGREEMENT Tract 47815 (West Covina Garden Homes) This Park Fee Agreement ('Agreement") is entered into on 1992, between TAICO PROPERTIES INC., a. California corporation ("Developer") the owner of the property herein described, and :the CITY OF .WEST COVINA, a .municipal corporation organized. and existing under the laws of the State of California ("City") pursuant to California Government Code Section 66477 and the City of West Covina Municipal:Code Sections 20-40 and 26-204. Developer and.City are sometimes collectively referred to herein as the "parties." R E- C I T A L S This Agreement is.predicated upon the following facts: A. Pursuant to Government Code Section 66477 and other provisions of applicable law,. the City adopted Ordinance Nos. 1144' and 1651 (Municipal Code Sections 20-40 and 26-204) (collectively, the "Park -Fee Laws") which requires- the' dedication of land or payment of fees in lieu thereof for park. or recreational purposes as a condition to approval .of a tentative map. B. Developer is the owner and developer. of, the real property (the "Property") described in Exhibit "A", attached • hereto and incorporated herein by this reference, which Property .'is located within the .City. C. The City has approved Tentative Map 47815 (the "Map") for the Property which provides for the development of 53 attached residential units (the "Project").. D. As,a condition . gf -approval of the Map, Developer is required to.,pay a park fee (the "Park Fee") to the City in .-accordance with the Park Fee Laws. E. The. City has determined that, subject.to increase as provided herein, the amount of the. Park Fee shall be Two Hundred Sixty -Three Thousand Eighty -Five Dollars -($263,085.00), which amount is equal to a base fee of. Three Hundred Eleven Thousand Six Hundred Forty Dollars ($311,640.00) minus a credit in the amount.of-Forty-Eight Thousand Five Hundred Fifty -Five Dollars ($48,555.00). The credit is authorized by the Park Fee Laws based upon the value of 3237 square feet of private open space within the Project whichshallbe usable for active .recreational uses. F. Developer has requested that the City provide a phasing schedule for payment of -the Park .Fee. G. This Agreement will secure Developer's obligation to pay the Park Fee and will otherwise achieve the goals and purposes for which the Park Fee Laws were enacted. H. The Planning Commission of the City, after conducting a duly noticed public hearing on'December 9, 1991, recommended to the City Council approval of'a Park Fee, credit*as part of 2 an agreement for the phasing of the -Park Fee, in accordance with the Park Fee Laws.. 'Thereafter, ' on the City. Council of the City found•this.Agreement to.be'consistent with the Park Fee Laws; found that the Agreement. is not 'detrimental to, and is in the best interest'of the public health, safety, and general welfare of the City and its residents and a proper exercise,of its police power,'and found that the Agreement will ,''facilitate the development of the Pro3-ect. .,The City' Council thereafter approved this Agreement and`authorized its execution by the Mayor and.City.Clerk. NOW,, THEREFORE,'"the Parties agree,as follows: 1. Effect.of Agreement. This Agreement shall apply to the . property. described on Exhibit. "All .( legal -description) ` and shall be recorded in the Office- of the County Recorder as provided by. law., 2 Park Fee Payment. (a) "'Developer shall; -make payment of the Parke Fee in, the. { sum of .Two' Hundred. -Sixty -Three Thousand Eighty -Five Dollars (.$263,085.00)1,as- increased pursuant to Subsection (b) of this Section, -for use by.the City for park. and recreational purposes as required 'by and .in full and complete satisfaction. of Developer's obligation under the Park Fee Laws. (b)_The Park Fee shall not be :increased by City.for three {3) years from the date of'recordation of Final Tract.Map.No. 47815 (the "Final Map"). Any portion of the Park:Fee"payable. 3 i after that time may, be increased by City as allowed by the Park Fee Laws. in the effect on the date of payment. The increase in the Park Fee shall be,recalculated based on the entire Project but any increase shall be paid only as to those lots for which the Park Fee remains unpaid, e.g., if one-third of the Park Fee remains unpaid, remaining installments shall increase by an amount equal to one-third of the increase in the total Park Fee for the entire Project. Developer shall not be required to pay any portion of that increase applicable to those lots within the Property for which payment was previously made. (c) This sum paid by Developer shall be expended by the City only in compliance with the restrictions and requirements of the Park Fee Laws. 3. Payment Schedule. The Park Fee shall be paid by Developer according to the following schedule: (a) Eighty -Seven Thousand Six Hundred Ninety -Five ($87,695.00) upon recordation of the Final Map. (b) Eighty -Seven Thousand Six Hundred Ninety -Five ($87,695.00), or such greater amount as permitted under Section 2'(b) above, upon issuance of the sixteenth (16th) building permit for the Project (30% of 53 units). (c) Eighty -Seven Thousand Six Hundred Ninety -Five ($87,695.00), or such greater amount as permitted under Section 2(b) above, upon issuance of the thirty-second (32nd) building permit for the Project (60% of 53 units). 4 (d) Notwithstanding.Sections 3(a), (b), or (c) above, in the event Developer sells any lot in the Project not covered by ' the prior payment"of any portion of the Park Fee as described in Section 4, the. next installment of the Park Fee under Section 3 shall be paid in full upon the close of escrow for the sale of the lot. Developer shall designate those lots in addition to the lot sold, covered by this payment of the Park Fee. Developer shall notify City upon opening of escrow for the sale of the lot. The provisions of. this Subsection (d) shall not be'applicable to the bulk sale of. lots in the Project. A bulk .sale is defined as the sale of all of the remaining lots in the Property not covered by the prior payment of any portion of the Park Fee to a single person or entity. 4. Description of Applicable Lots. At the time a payment is made under Section 3, Developer shall notify the City of i writing of those residential lots within the Project covered by the payment and the City shall.acknowledge'its receipt thereof by executing the notice, in recordable form and returning the notice to Developer. Developer may then record the notice, at Developer's election, to release any encumbrance created by this Agreement as to those lots for which payment of the Park Fee is .designated by Developer. City shall, from time to time, at Developer's request, amend thenotice to change the lots designated to conform to Developer's development plans. 5 Further, in. the event that the building permit for. a designated lot expires, Developer shall not be required to pay any additional Park Fees for that lot upon the issuance of the new building permit. 5. City Remedies. In the event Developer fails to pay the Park Fee, as and when required by Sections 3(a), (b) or (c), the City, may withhold recordation of the Final Map, or withhold approval or issuance of any further building permits until the requisite portion of the Park Fee is paid. In the event Developer fails to pay the Park Fee upon the sale of lots, other than a Bulk Sale, as set forth in Section 3(d), the Park Fee shall become all due. and payable and the City, in addition to any other right or remedies at law or in equity, may record a notice of lien in the amount of the remaining balance of the Park Fee in the Office of the County Recorder of Los Angeles County which shall establish a lien on those residential lots within the Property for which the Park Fee has not been paid. The lien shall secure payment of the .Park Fee together with all reasonable costs and expenses of enforcing the lien together with interest at the rate of ten percent (10%) per annum and may be foreclosed in accordance with the laws pertaining thereto. No lien shall be deemed to exist until the notice is recorded, and the priority of .such lien shall be determined as of the date of recording the notice; provided that the lien shall be senior to any trust deeds or other encumbrances recorded to secure financing for the subject 0 .lot sale or construction of residences on those lots after the sale, or recorded after the subject 'lot sale for any purpose whatsoever. The lien shall continue until fully discharged. 6. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, and failure by a party to exercise its rights upon default by the other party hereto shall not constitute a waiver of such party right to demand strict compliance by such other party in -the future. 7. Notices. All notices required or provided for under this Agreement shall be in writing.and delivered in person or sent by certified mail, return receipt requested, .and addressed as follows: To the City: City of West Covina Attention: City Manager 1444 W. Garvey Avenue West Covina, CA 91793 To the Developer: Taico Properties, Inc. Attention: Joe Poon 350 S. Figueroa Street, #233 Los Angeles, Ca 90071 With copy to: The first trust deed holder (under Section.l8). Either..party may change the address stated herein by giving notice, in writing, to the other party and thereafter notices shall be addressed and submitted to.the new address. Notices shall be deemed delivered upon personal delivery or deposit in the U.S., Mail, first class,. certified, return receipt requested. 7 • 8. Bindinq Effect of Agreement. Except as provided in Section 18, the burdens of this Agreement bind and the benefits of this Agreement inure to the successors in interest to the parties hereto. 9. Enforceability of Park Fee Laws. The parties -intend that Developer and City enjoy all of the rights, protections, and benefits afforded by the Park Fee Laws, except as otherwise provided in this Agreement. As such, the parties hereby agree that such rights, protections, and benefits afforded by the Park Fee Laws for the benefit of Developer and City shall apply unless expressly modified by this Agreement. 10. Attorneys' Fees. If legal action is brought by either party against the other for breach of this Agreement, or to compel performance under this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys' fees and costs. 11. Cooperation in the Event of Lecial Challencte. In the event of any legal action instituted by a third party or other. governmental entity or official challenging the validity of any provision.of this Agreement (except as set out in (a) below), the parties hereby agree to cooperate in defending such action including the selection of mutually agreeable counsel for City. Developer shall pay reasonable attorneys fees, expert witness costs, court costs, and expenses in connection with such defense. In the event of any litigation challenging the effectiveness of this Agreement, or any portion hereof, this Agreement shall remain in full force and effect while such litigation, including any appellate review, is pending. (a) Notwithstanding the foregoing, this section shall. not require the .Developer to defend the City, were the City to be sued by a third party developer.for its failure or refusal to grant a similar park fee phasing agreement to that third party developer. 12. No Personal Obligation/No Completion Oblictation. This Agreement does not represent a personal obligation of individual members of the Developer or of its -successors or assigns. Further, nothing herein contained shall in and of itself be .deemed to create an obligation of the. Developer, its successors or assigns to complete the development of the entire Project as contemplated, or any particular portion thereof. 13.. Duplicate Originals. Two or more duplicate originals of this Agreement may be signed by the parties, each of which shall.be an original and'all of which together shall constitute one and the same instrument. 14. No Third Party Benefit: No third party shall be the express or.implies beneficiary of this Agreement or any of its provisions, and no such third party may bring any action in law or in equity with. -respect hereto. 15. Rules of Construction and Miscellaneous Terms. (a) Gender. The singular includes the plural; the masculine gender includes the feminine; "shall" is mandatory, "may" is permissive. W r n (b) Time of Essence. Time is of the essence regarding each provision of -this Agreement in which.time is an element. (c) Cooperation. Each party covenants to take such reasonable actions and execute any documents that may be necessary to achieve the purposes and objections of this Agreement. (d) Severability of Terms. If any term, provision, covenant, or condition of this.Agreement shall be determined invalid, void, or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to enforce. (e) Interpretation and Governing Law. This Agreement and any dispute'. -arising hereunder shall be governed and interpreted in accordance with the laws of the State of California. (f) Section Heading. All section headings and sub- ' headings are inserted for convenience only and shall not affect any construction -or interpretation of this Agreement. 16. Effect on Title. This Agreement shall be deemed to contain covenants and conditions running with the Property to benefit and burden the Property, provided that. Developer and City agree that any encumbrance created by this Agreement shall be deemed released as to any lot for which payment of the Park Fee is made as set forth in the notice described in Section 4 above, and this Agreement shall terminate as to that lot on the date of payment.of the Park Fee.. The City"agrees to execute 10 0 -any documents necessary to effectuate that release of any such encumbrance.. 17.. Advice of Legal Counsel. Each party and its counsel have cooperated. in the drafting and preparation of this Agreement. This Agreement shall be deemed the parties '. joint work product and may not be construed against any party by reason of its preparation. 18. Mortggage Holders. Notwithstanding the provisions of Section 7, no -Mortgagee shall have any obligation to make or guarantee the payments required under Sections 2 and 3 herein, unless the -Mortgagee obtains fee title to any lots covered by this Agreement whereupon the Mortgagee shall be subject to the terms hereof' as. to those lots adquired.by the Mor-tgagee. -No breach- of this Agreement by Developer shall defeat, render invalid, diminish. or impair the lien of a Mortgagee. "Mortgagee" includes the benefidiary under a deed of.trust, and "mortgagee" includes a deed of trust made .in good faith and for value. City shall notify, any first trust deed, holder of record of any event, -of default by Developer as set forth in Section 5, but failure to do so shall not effect the City's remedies.. 11 i • The parties have executed this Agreement on the date and year first written above. Dated • V ' `' , jqz, Dated: "Developer" TAICO PROPERT California:,co By: "City" IES INC., a rp r tion CITY OF WEST COVINA a municipal corporation of the State of California By: Mayor ALL-PURPOSE ACKNOWLEDGMENT NO209 State of ,County of On Q� before me, 1 L''"4�� DATE NAME, TITLE OF OFFICER - E.G.. 'JANE DOE. NOTARY PURL personally appeared I c VN_ —/ NAME(S) OF SIGNER(S) 0 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 ac- knowledged 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), OFFICIAL SEAL orthe entity upon behalf of which the person(s) `u'A" W. C"M acted, executed the instrument. AITARY PWL!C- 41FOMA Itness rpy hand and official seal. ;Iii!'F;;I• FEB It, 1992 -. mow--y.�--4 _.�� 1Y 1 • � / CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUAL(S) Q�CORPORATE OFFICER(S) TITLE(S) ❑ PARTNER(S) ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ SUBSCRIBING WITNESS ❑ GUARDIAN/CONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: NAME OF PERSON( ) OR ENTITY(IES) 1 "��t' '':i �t f� i 1 �• �DL� ATTENTION NOTARY: Although the information re st below is OPTIONAL. it could tfI ent fraudulent attachment of this certificate to unauthorized document. 9 p tr. r THIS CERTIFICATE Itle or Type o ocument aC �C MUST BE ATTACHED '( TO THE DOCUMENT Number of Pages `1r Date of Document 2 DESCRIBED AT RIGHT: Signer(s) Other Than Named Above tv 1991 NATIONAL NOTARY ASSOCIATION • 8236 Remmet Ave. • P.O. Box 7184 - Canoga Park. CA 91304.7184 EXHIBIT "A" DESCRIPTION LOT 2 OF TRACT NO. 29126, IN THE CITY OF WEST COVINA,.IN THE COUNTY OF.LOS.ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 816, PAGE(S) 60 TO 62 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID. COUNTY. EXCEPT THEREFROM ONE-HALF OF ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER .THAT PORTION OF SAID LAND LYING SOUTHEASTERLY OF. THE FOLLOWING DESCRIBED LINE: BEGINNING.AT A POINT IN THE WESTERLY LINE OF .SAID LOT 116, DISTANT THEREON SOUTH 1°.04' WEST, 2300:00 FEET.FROM THE MOST WESTERLY CORNER OF LOT 19, SAID TRACT 9 3 0 ; THENCE NORTH 590 21' EAST.9343.27 FEET, MORE OR LESS, TO A POINT IN THE SOUTHERLY SAID MAP DISTANT THEREON SOUTHERLY FROM ITS INTERSECTION WITH THE CENTER LINE ON CAMERON AVENUE, 1000.00 FEET, AS RESERVED BY TITLE. -INSURANCE AND .TRUST COMPANY, BE DEED RECORDED FEBRUARY 21, 1944 IN BOOK 20687 PAGE 153, OFFICIAL RECORDS. BY DEED -DATED JANUARY 22,1964,:RECORDED JANUARY 22, 1964 IN BOOK D2332 PAGE 80, OFFICIAL RECORDS, JOSEPH DOBLE MULLENDER AND VIVIAN P..MULLENDER, QUITCLAIMED TO BRATOCO DEVELOPMENT COMPANY, A CORPORATION, THE RIGHT TO ENTER UPON THE SURFACE OR THE SUBSURFACE TO.A DEPTH OF 500 FEET BELOW THE SURFACE OF THE GROUND BUT RESERVING THE RIGHT TO TRAVERSE ANY PORTION BELOW 500 FEET.