09-15-2020 - AGENDA ITEM 08 CONSIDERATION OF A QUITCLAIM DEED FOR PARTIAL RELEASE OF FORMER WEST COVINA REDEVELOPMENT AGENCY INTERESTS AT THE MARKETPLACE AT THE LAKES TO ZELMEN W12/1 /2020
Print Staff Report
AGENDA ITEM NO. 8
DATE: September 15, 2020
TO: Mayor and City Council
FROM: David Carmany
City Manager
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
SUBJECT: CONSIDERATION OF A QUITCLAIM DEED FOR PARTIAL RELEASE OF FORMER
WEST COVINA REDEVELOPMENT AGENCY INTERESTS AT THE MARKETPLACE
AT THE LAKES TO ZELMEN WEST COVINA PARTNERS
RECOMMENDATION:
It is recommended that they City Council, acting as the Successor Agency to the former West Covina
Redevelopment Agency (Agency), approve a quitclaim deed to remove partial Agency interest at the
Marketplace at the Lakes by adopting the following resolution:
RESOLUTION NO.2020-97 - RESOLUTION OF THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA APPROVING AND DIRECTING
EXECUTION AND RECORDING OF A QUITCLAIM DEED (ZELMAN GROUP PARTNERS/LAKES
MARKETPLACE)
BACKGROUND:
On May 17, 1994, the Agency entered into a Disposition and Development Agreement with Zelman
Development Co. (Zelman) for the sale of Agency land and development of a commercial center located at
960 Lakes Drive (what is now the Marketplace at the Lakes shopping center). Tenants at the Marketplace at
the Lakes include Jerome's Furniture and Michael's store.
As part of the conveyance of the Agency property to Zelman, the Grant Deed recorded on September 29, 1994
requires the property to be used for retail purposes only, and remain a retail use no less than expiration of the
Redevelopment Plan (December 21, 2028). It also provides the Agency with interest in oil, gas, hydrocarbon
substances and minerals more than 500 feet below the surface.
In December 2016, the City of West Covina adopted a General Plan Update and Downtown Plan & Code as
well as a Final Environmental Impact Report (EIR). The Downtown Plan & Code was designed to allow for
higher density and mixed uses within the downtown district, including mixed -use projects such as residential
and commercial. Pursuant to the vision of the Downtown Plan & Code, the site could be developed with
residential uses. The General Plan Update changed the land use designation from Regional Commercial to
Commercial and the Downtown Plan & Code changed zoning from Regional Commercial to General Urban
Zone.
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While the Marketplace at the Lakes is subject to the Downtown Plan & Code, which allows mixed -use and
residential, the Grant Deed restricts the land use to retail only. The Grant Deed restriction
negatively impacts the development potential for the site including affecting opportunities for much -
needed residential in our community.
DISCUSSION:
On August 14, 2020, a representative from Waterford Property Company (Waterford), the prospective buyer
for the Marketplace at the Lakes shopping center, contacted the City inquiring as to the development
opportunities, entitlement process as well as requesting removal of the land use restriction on the Grant Deed.
Waterford also owns the Lakes Office Buildings. Waterford's representatives were part of the General Plan
Update, attending several community meetings, and were excited to see the City's proactive efforts in
establishing a Downtown District and encouraging development. Since purchasing the office properties,
Waterford has invested in the Lakes Office Buildings, having completed various upgrades and improvements
to their buildings just this past year. In addition, Waterford worked with City staff to extend the Sublease
Agreement for the use of the parking structure and parking lots owned by the City.
As the prospective buyer of the Marketplace at the Lakes, Waterford is interested in developing the site to its
highest and best use. Unfortunately, the Grant Deed would continue to restrict the site to remain retail use
only. In order to take advantage of the Downtown Plan & Code that the property is subject to, Waterford is
requesting that the Agency remove the land use restriction. In addition, current development trends are moving
towards mixed -use and higher density residential developments.
As the Grant Deed restriction is inconsistent with the Downtown Plan & Code, staff recommends approving
the removal of the land use restriction.
LEGAL REVIEW:
The Agency's legal counsel has prepared the quitclaim deed and reviewed the resolution and approved it as to
form.
OPTIONS:
Options available to the Successor Agency include:
1. Adopt the staff recommendation; or
2. Leave the deed restriction in place; or
3. Provide alternative direction.
Additional Thomas Duarte, City Attorney
Approval:
Fiscal Impact
FISCAL IMPACT:
There is no fiscal impact in removing the land use restriction from the Grant Deed.
Attachments
Attachment No. 1 - Successor Agency Resolution No. 2020-97 and Quitclaim Deed
CITY Respond to the Global COVID-19 Pandemic
COUNCIL Engage in Proactive Economic Development
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GOALS &
OBJECTIVES:
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ATTACHMENT NO.1
ITi9CY1]Sly�l (1]�■�[Ixi631b�d
RESOLUTION OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF WEST COVINA APPROVING AND DIRECTING
EXECUTION AND RECORDING OF A QUIT CLAIM DEED (ZELMAN GROUP
PARTNERS /LAKES MARKETPLACE)
The Successor Agency of the Redevelopment Agency of the City of West Covina does
resolve as follows:
Section 1. The Successor Agency of the Redevelopment Agency of the City of
West Covina approves and directs the City Manager/Executive Director to execute on its
behalf the Quitclaim Deed relating to apartial release of interests in and to, and specifically
section 2 of the Grant Deed recorded as Document No. 94-1795435 in the Official Records
of the Los Angeles County Recorder, which restricts the use of the property to retail only,
in substantially the form attached hereto as Exhibit A and by this reference incorporated
herein.
Section 2. The Agency Secretary is authorized and directed to take all steps
and execute all documents necessary to record and/or cause the recordation of the
Quitclaim Deed attached as Exhibit A to this resolution, in the office of the Los Angeles
County Recorder when fully executed and notarized.
Section 2. The Boardmembers shall authorize the Executive Director to
negotiate and finalize any and all docments necessary to finalize the Quit Claim Deed
removing the land use restriction.
PASSED AND ADOPTED this 15th day of September, 2020, by the following roll
call vote:
AYES: Boardmembers:
NOES: Boardmembers:
ABSENT: Boardmembers:
ABSTAIN: Boardmembers:
ATTEST:
Secretary
Tony Wu, Chairman
Exhibit A
Recording Requested by
and Return to:
City Clerk
City of West Covina
1444 West Garvey Ave. South
West Covina, CA 91790
Exempt from Documentary Transfer Tax
pursuant to Revenue & Tax Code .q 11922.
CORPORATION QUITCLAIM DEED
For valuable consideration, receipt of which is acknowledged, the SuccessorAgency
to the Redevelopment Agency of the City of West Covina, a municipal corporation
("Grantor") does hereby REMISE, RELEASE ANDQUITCLAIM to Zehnan WestCovina
Partners ("Grantee') their right title and interest in the Grant Deed recorded as Document
No. 94-1795435 on September 29, 1994 (the "Deed'), and the real property in the City of
West Covina, Los Angeles County, California, described on the attached Exhibit A,
incorporated into this Grant Deed (the 'Property'), excepting therefrom, the Successor
Agency of the City of West Covina expressly retains the rights, title and interest stated in
Section 1 of the Deed as restated below.
1. Agency excepts and reserves from the conveyance herein described an interest of
the Agency in oil, gas, hydrocarbon substances and minerals of every kind and character
lying more than five hundred (500) feet below the surface, together with the right to drill
into, through, and to use and occupy all parts of the Site lying more than five hundred (500)
feet below the surface thereof for any and all purposes incidental to the exploration for and
production of oil, gas, hydrocarbon substances, or minerals from said Site or other lands, but
without, however any right to use either the surface of the Site or any portion thereof within
five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the
Site in such a manner as to create a disturbance to the use or enjoyment of the Site.
Dated as of
GRANTOR: CITY OF WEST COVINA
David Carmany, City Manager / Executive Director
EXHIBIT A TO QUITCLAIM DEED
Legal Description
THAT REAL PROPERTY LOCATED IN THE STATE OF CALIFORNIA.
COUNTY OF LOS ANGELES, CITY OF WEST COVINA, DESCRIBED AS
FOLLOWS:
PARCEL 1 OF PARCEL MAP NO.20049 AS RECORDED ON MAY 3, 1989 IN
BOOK 217, PAGE 5, IN THE OFFICIAL RECORDS OF SAID COUNTY AS
INSTRUMENT NO.89-706701.
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California
County of Los Angeles
On before me,
(insert name of notary)
Notary Public, personally appeared
who 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.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seat
Signature (Seal)