HomeMy WebLinkAboutHolly Seacliff Infrastructure Reimbursement and Obligations lit-ITY OF HUNTINGTON BEAC
MEETING DATE: January 20, 1998 DEPARTMENT ID NUMBER: PW 98=016
Council/Agency Meeting Held: J��f 9� qV0.So
Deferred/Continued to:
®"Approved ❑ ConditionaY Ap rov d Denie 9 City Clerk'f Signature Ie
Council Meeting Date: January 20, 1998 Department ID Number: PW 98-016
c._- _
CITY OF HUNTINGTON BEACH _
REQUEST FOR ACTION C-
ND 1 r'
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS a i I rn
SUBMITTED BY: RAY SILVER, Acting City AdministratoraeAoo
ems.
PREPARED BY: MELANIE S. FALLON, Community Development Director
LES M. JONES II, Public Works Director
MIKE DOLDER, Acting Assistant City Administra or / Fire Chief
GAIL HUTTON, City Attorney
SUBJECT: RECEIVE AND FILE REPORT ON HOLLY SEACLIFF
INFRASTRUCTURE REIMBURSEMENT AND OBLIGATIONS
IFStatement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue:
In the process of reviewing infrastructure reimbursement for PLC, the City Council has
requested information on: 1) the timing for completion of reimbursement determination, 2)
the timing for completion of the infrastructure obligations and 3) the feasibility of guarantees,
e.g. bonds, to insure that the infrastructure is completed.
Fundinq Source: Not applicable.
Recommended Action:
Motion to: A. "Receive and File Report on Holly Seacliff Infrastructure Reimbursement
and Obligations."
i
0029796.01 -2- 01/16/98 9:24 AM
• REQUEST FOR ACTION
MEETING DATE: January 20, 1998 DEPARTMENT ID NUMBER:PW 98-016
Alternative Action(s):
The City Council may make the following alternative motion(s):
A. "Continue discussion on Holly Seacliff infrastructure reimbursement and obligations
and direct staff accordingly."
B. "Do not require bond or similar security and continue proceedings per the
Development Agreement."
C. "Require a letter of credit or bond, or similar security, as a condition of future sales of
Development Agreement property from PLC to another party.
Analysis:
A. BACKGROUND
At the December 8, 1997 City Council Study Session, staff presented the results of
approximately eight months of work on reimbursement to PLC for costs of infrastructure that
may provide excess capacity. Staff was directed to present timelines to the City Council in
January for completion of determination for reimbursement and for completion of the water
reservoir.
Subsequently, at the December 15, 1997 City Council meeting, the City Council had several
questions relating to the City's ability to cause PLC to complete the remaining infrastructure
pursuant to the Holly Seacliff Development Agreement as it sold its entitled property to
merchant builders. Specifically, the City Council inquired about requiring a bond for
infrastructure items such as the nine million gallon water reservoir.
B. STAFF ANALYSIS:
Reimbursement Schedule:
1. Process Outlined in Development Agreement
The Development Agreement provides that upon acceptance of the public improvements
constructed by the Developer, the Developer will be eligible for reimbursable costs. At the
time of the establishment of the reimbursement agreement, the Director of Public Works
shall verify the Developer's actual costs and determine reimbursable costs. (Sections
2.2.40); 2.2.5(g); 2.2.5(h); 2.2.11.) If the Developer disputes either the amount or
percentage of Reimbursable Costs as determined by the Director, the Developer can appeal
the Director's decision to the City Administrator. Any decision of the City Administrator can
be appealed to the City Council. Any further dispute is subject to the binding arbitration
0029796.01 -3- 01/16/98 11:28 AM
• REQUEST FOR ACTION
MEETING DATE: January 20, 1998 DEPARTMENT ID NUMBER: PW 98-016
process set forth in the Agreement. (Sections 2.2.11; 3.4.) The Developer is then
reimbursed for the excess capacity improvements from fees generated by subsequent
development. (See Flow Chart, Attachment 2)
2. Proposal for Early Determination of Excess Capacity
The problem with the process set forth in the Development Agreement is that excess
capacity decisions are delayed until after the construction of the improvements. This does
not allow the Developer any certainty, prior to construction, as to what percentage of its
actual costs may eventually be reimbursable.
Therefore, to accommodate the Developer's concerns, and to comply with the City's
obligation to use its best efforts to the extent allowed by law to obtain for the Developer the
maximum reimbursable costs available, the City hired Boyle Engineering Corporation to
provide assistance in estimating the amount of excess capacity in the public improvements
constructed by the Developer.
Boyle has completed their analysis of excess capacity of completed and pending
infrastructure improvements. The staff proposes that the Public Works Director send to PLC
a "Letter of Preliminary Determination of Excess Capacity" in support of the subject
infrastructure analyses (water, sewer, storm drain, arterials, public safety facilities) provided
by Boyle. This letter will be sent by February 28, 1998 (see flow chart, Attachment No. 3).
Upon receipt of the Letter, the staff proposes that PLC be given 60 calendar days to review
the Letter. If PLC agrees with the Letter, or any portions thereof, staff will return to the City
Council with a Preliminary Excess Capacity Agreement for consideration and adoption within
60 calendar days. The city will then establish reimbursement accounts to segregate fees
from benefiting properties as they develop. Subsequent reimbursement agreements will be
based on the Preliminary Excess Capacity Agreement, and reimbursement to PLC will be
made after actual costs are submitted by PLC and reviewed by the City.
If PLC does not agree with the Letter or a portion thereof, the staff proposes that PLC and
the City seek advisory arbitration as to the areas of disagreement, and continue negotiations
based upon the result of the advisory arbitration process. If the advisory process is
successful, another Preliminary Excess Capacity Agreement covering the remaining issues
will then be submitted to the City Council for adoption. If the advisory process does not
succeed, the Director will determine the excess capacity and other reimbursement issues
after the acceptance of the improvements as provided by the Development Agreement.
Although this advisory process is not specifically addressed in the Development Agreement,
the staff believes that it is the quickest and fairest method to accommodate the Developer
and provide for the maximum reimbursement opportunity.
0029796.01 -4- 01/16/98 11:28 AM
• REQUEST FOR ACTION
MEETING DATE: January 20, 1998 DEPARTMENT ID NUMBER: PW 98-016
To date, PLC has submitted copies of bills and requested reimbursement based on a fair
share analysis for several completed portions of the infrastructure, including such items as
Gothard Street between Ellis and Garfield, and miscellaneous master storm drains. The
Public Works staff will review the billings and provide the Public Works Director with
information so that actual reimbursement amounts may be used to replace the estimated
amounts presently contained in the Boyle analysis. Upon adoption of reimbursement
agreements, this analysis will be completed, and will allow for reimbursement to PLC as
benefiting properties develop.
Com letion of Infrastructure Obligations
Edwards Fire Station/Water Reservoir
On January 5, 1998, the City Council approved the contract with RRM Design Group, Inc. for
design of the fire station along with the overall site plan for the water reservoir and the fire
station. RRM Design Group will oversee construction of the fire station which is targeted for
completion in August 1999. PLC is responsible for construction of the water reservoir and
related equipment. The Public Works Department is responsible for providing PLC with
design standards for the water reservoir and approving construction drawings. A project
team, consisting of consultants, staff and PLC, has been formed to keep both projects on
track. Attachment No. 4 shows the water reservoir construction scheduled for completion by
September 1999.
Police Facilities
In the initial Holly Seacliff Development Agreement, the Police Department proposed
increasing resources and its facilities to better meet the needs of the residents in this
development and the surrounding area. The original agreement funded $642,000 plus the
annual ENR Inflationary Index for this purpose until such time that revenues from property
tax from this development could adequately support the increased cost of police service.
Police service needs in the Holly Seacliff area have changed since the cross-gap connector
will no longer be constructed. As a result, staff is recommending that the Development
Agreement's police substation funds be redirected towards the construction of a new 911
Communications Center for reviewing police and fire 911 calls and dispatching police calls
for service. The current communications facility was completed in 1974 and cannot handle
the increase in calls for service to be generated by Holly Seacliff area and other growth in
the City. The new communications facility, proposed to be located adjacent to the Holly
Seacliff area, would provide space for additional workstations to handle current and future
dispatching workload as well as providing space for field officers to complete reports and
conduct office assignments. The Holly Seacliff development funds will augment the
construction project costs.
0029796.01 -5- 01/16/98 11:28 AM
• REQUEST FOR ACTION •
MEETING DATE: January 20, 1998 DEPARTMENT ID NUMBER:PW 98-016
Remaining Infrastructure Obligations
Approximately 44 percent of the expected infrastructure costs have been incurred. It is
anticipated that the remaining infrastructure costs will be expended by the end of 2000.
Attachment No. 5 itemizes infrastructure completed through 1997 and outstanding
obligations by year. Attachment No. 6 summarizes expenses through 1997 in comparison to
the amount of building permits that have been issued; indicating that completion of
infrastructure improvements is ahead of building activity. This pattern is expected to
continue through the year 2000. The Annual Review of the Holly Seacliff Development
Agreement will be presented to the City Council in February or March 1998. The report will
detail the status of infrastructure improvements.
Bondina
Several years have passed since the adoption of the Holly/Seacliff Development Agreement.
The original developer, Pacific Coast Homes, has sold the property to PLC and MS Vickers.
They have, subsequently, sold portions of their holdings to other parties. Many of the public
improvements required by the Agreement have been built and dedicated; however,
construction has not yet begun on several substantial items, such as the police facilities, fire
station and the water reservoir. The City needs firm assurance that the public improvements
will be completed as required by the Development Agreement.
The approval of the City Council must be obtained prior to any transfer of property subject to
the Development Agreement. Staff believes that the City can require, as a condition of
approval of any future sales, a letter of credit or some other acceptable security such as a
bond to guarantee the completion of the remaining public improvements. Given the amount
of property that PLC and MS Vickers have sold, and that significant public improvements
remain unbuilt, the staff believes that this may be a reasonable condition precedent to any
future sales of Development Agreement property(see Alternative Action C). Attachment No.
7 provides a summary of outstanding infrastructure costs for improvements not associated
with a specific project or entitlement. These costs could be used to determine the
appropriate amount for the letter of credit or bond.
PLC's Response to City Council Questions
PLC has summarized their responses to the questions raised by the City Council in
Attachment No. 8. The City Attorney has reviewed PLC's responses and has clarified some
items in Attachment No. 9.
Environmental Status:
Not applicable.
0029796.01 -6- 01/16/98 11:28 AM
REQUEST FOR ACTION
MEETING DATE: January 20, 1998 DEPARTMENT ID NUMBER: PW 98-016
Attachment(sl:
City Clerk's
Page Number No. Description
1. Section 2.2.11 of Development Agreement and Definition of
Reimbursable Costs
2. Diagram of Holly Seacliff Reimbursement Schedule Including Appeal &
Approval Process
3. Diagram of Proposed Modification for Early Development of Excess
Capacity and Reimbursement and Acceptable Process
4. Construction Schedule for Water Reservoir
5. Status of Infrastructure Obligations
6. Summary of Infrastructure Costs and Development
7. Costs for Outstanding Infrastructure Obligations
8. Letter from John Erskine on behalf of PLC, dated January 9, 1998
9. 1 Memorandum from City Attorney, dated January 14, 1998
RCA Fallon/Eichblatt:
0029796.01 -7- 01/16/98 11:28 AM
(9) 01/20/98 - Council/Agency Agenda - Page 9
E-913. (City Council) Adopt Resolution No. 98-6 -Amends Previous Resolution Re:
Acquisition Of Street Right-Of-Way For Goldenwest Street Widening -(Holly-Seacliff
Development Agreement Area) - Borghetti -Adopt Resolution No. 98-6 - A Resolution
of the City Council of the City of Huntington Beach Amending Resolution No. 97-52 Relating
to the Public Interest and Necessity of Acquisition of Portions of Property Located on
Goldenwest Street in the City of Huntington Beach, California Identified as Assessor's
Parcel NO. 110-211-02, for the Purposes of Conducting Roadway Improvements."
Submitted by the City Attorney (Amended resolution includes specific statutory language
relating to acquisition of remnant property.)
(Adopted 5-0 (Green: Absent, Garofalo absent from room]
F. Administrative Items
F-1. (City Council) Receive And File Bolsa Chica Report Update
Transmittal of a Bolsa Chica Report Update requested by the City Council at its December
15, 1997 Council meeting. The report relates to the proposed Koll development of the Bolsa
Chica and updates the City Council on four aspects of the Bolsa Chica project, specifically;
the Water Pipeline, Environmental Processing, the role of the Local Agency Formation
Commission (LAFCO), and Service Agreements.
The report was prepared by the City Attorney, Community Development Department, Public
Works Department, Acting City Administrator/Fire Chief and the Library Services Director.
Recommended,Action: Motion.to: Receive and.File Bolsa Chica Update Report. land
direct the Acting City Administrator to return to Council with a cost-benefit
analysis of annexation and authorize .the Acting City Administrator to write
Koll Co, regarding their receptiveness to annexation and request a written
response -- 7-01
'y F-2. (City Council) Receive And File Report On Holly-Seacliff Infrastructure
Reimbursement And Obligations
Communication from the Community Development Director, Public Works Director, Acting
Assistant City Administrator-Fire Chief, and City Attorney transmitting a Report on the Holly-
Seacliff Infrastructure Reimbursement and Obligations including: 1. the timing for
completion of reimbursement determination; 2. the timing for completion of the infrastructure
obligations; and 3. the feasibility of guarantees, e.g. bonds, to insure that the infrastructure
is completed.
Recommended Action: Motion to: [M]Receive and file Report on Holly-Seacliff
Infrastructure Reimbursement and Obligations. [and that the City Council subcommittee
meet in the next 30 days and formulate a plan according to items in the
Slide Report which is to be used as a working outline -- 6-0 -- Green: Absent)
(2) If requested by Acting City Administrator Retain outside legal counsel to
interpret City's obligation under the Holly-Seacliff Development Agreement,
in particular evaluate what the term "Best Effort" and "Fair Share" mean
and if necessary assist in preparation of the City's case should the city go to
arbitration 6-0 (Green: Absent)]
(9)
0019517.01
2 . 2 . 11 Reimbursement Agreements . When in the
performance of this Agreement Developer is eligible for
Reimburseable Costs the following shall apply to any
agreement for reimbursement :
(a) Upon receipt of funds generated by fees or
exactions from other development served by the excess
capacity of public facilities paid for by the Developer, the
City shall reimburse Developer for its verified
Reimburseable Costs ;
(b) The Director of Public Works shall at the time
of establishment of the reimbursement agreement verify the
Developer ' s actual costs and determine Reimburseable Costs .
(c) If the Developer disputes either the amount or
percentage of the Reimburseable Costs as determined by the
Director of Public Works, based on review of all pertinent
data, the City Administrator will determine the disputed
item. Any decision of the City Administrator may be
appealed to the City Council ; ,a
(d) Reimburseable Costs shall be determined on a
complete buildout of 3 , 780 units and shall not be reduced if
the Developer fails to achieve the maximum build out allowed;
(e) If in the event that the cost of any facility
necessary to serve the Project and the cost necessary to
serve •subsequent development (e'ligible cost) is less tFian
the total , verified cost of such facility; then City, to the
extent lawful, shall apportion any unrecoverable cost in an
equitable manner between the Developer and any subsequent
�- developer's) which is found to benefit from the improvements;
25
I '
(f) The City shall use its best efforts to the
extent allowed by law to obtain for Developer the maximum
Reimburseable Costs available under this Sub-Section from
future development served by any facility, a portion of the
cost of which is reimburseable hereunder . Developer
acknowledges that City is limited in the manner in which it
may collect or require such reimbursement and that City may .
be unable to cause Developer to be reimbursed for such costs;
(g) On the anniversary o.f any reimbursement
agreement , the balance of any amount originally determined
to be reimburseable shall be increased by an Annual
Adjustment based on the ENR index. In no event shall the
amount reimbursed exceed two hundred percent (200%) of the
original amount determined to be reimburseable .
. 2 . 12 Approval a o Form b CityAtt rn 1J
Instruments c nveying all dedications shall be bject to
approval as to fo m by the City Attorney a required by the
City Charter .
2 . 3 Development Sta ar an S hedule .
2 .3 . 1 Permitted DelopmentOn and Uses of the
Property. . The permitted ses of he Property, the density
and intensity of use - the maximum he ht, bulk, and size of
proposed buildi s , parking requirements other develoment
and buildin standards, provisions for rese ation or-
dedicati of land for public purposes , the loc ion and
desi of public improvements, and all other terms d
c ditions applicable to Development of the Property s 11
26
3 . Industrial Uses, including business park,
resea ch and development, production, assembly, distr' ution
and stor a uses ; and
4 . Mixed-Use Development, including esidential
uses , retail us s and office uses .
"Property" mea the real property escribed on Exhibit
"A" and depicted on E ibit "B. " T e "County Portion of the
Property" means the appr imate ten ( 10) acre portion of
the Property located west o Edwards Street and north of
Ellis Avenue that is wi in th unincorporated area of the
County of Orange, a described as arcel 18 on Exhibit "A"
and depicted on xhibit "B" .
The ter of this Agreement shall a ly to the entire
Property provided, however, pursuant to vernment Code
Sect ' ons 65865 (b) , this Agreement shall beco effective
th respect to the County Portion of the Prope ty only at
such time that said portion of the Property is ann xed into
the City of Huntington Beach. �,
"Reimburseable Costs" shall mean costs to be reimbursed
to Developer through a Reimbursement Agreement as specified
in 2 . 2 . 11 for improvements in excess of those required to
service the proposed •Project .
equent Land Use Regulations" shall me all
ordinances , resolu s, codes,' rules regulations`,-which'
are adopted by-City Council, r approved initiative, or
otherwise become effect ' after the ective Date of this
Agreement and wh' govern the development, a and
9
ATTACHMENT 21l
Verification of Factual Costs Diagram of Holly Seacliff
& Determination of PLC
Reimbursement Costs by Review & response Reimbursement Development
Department of Public Works Agreement Appeal & Approval
Process
PLC Attachment 2
Appeals Accept
Completed Infrastructure
Accepted by the City
( Step 1 )
City Administrator's Agreement on excess PLC Reimbursement
Review&decision Accept 9 P. from Subsequent Developm ent
capacity to City Council Fees from Subject Properties
PLC
Appeals Accept
City Council's
Review&decision
PLC
Appeals
Arbitrator's
Review& Decision
ATTACHMENT 3
Diagram of Proposed Process
Modification for Early Development
Department of Public Works PLC of Excess Capacity &
Determination of Excess
Capacity per Boyle Report by Review & response Reimbursement & Acceptance
February 28, 1998 within 60 calendar days
Process
(Attachment 3)
PLC Accept
Rejects (Partial OK)
At Project Completion
Verification of Factual Costs &
Agreement on Preliminary Determination of Exact
Advisory Arbitration Both Parties Accept Excess Capacity Determined Reimbursable Cost by
within 60 calendar days (Partial OK) to City Council within 60 Department of Public Works as
calendar days per Agreement&
Reimbursement is made to
PLC
Not Acceptable IF
to at least one party
City Establishes
Reimbursement Account to
Segregate Fees from
Benefiting Properties as they
Develop
Follow Exact Development
Agreement Process Described
in Attachment 2
Beginning at Step 1 at the time
Infrastructure is Complete
2000 -2001
ATTACHMENT 411
Dec. 16, 1997
BY: AA F
110194DJECT T1,19HE LINE
Eiili'ANRDS @ ELLIS
WON 1 OM%
Time Line based on assumption of City Council authorizing design contract on Jan. 5,1998
TASK NAME DUR. START END
PLC DEPOSIT PHASE l FUNDS($137,074) 1 d 12/19/97 12/19/97
CITY COUNCIL AUTHORIZE DESIGN CONTR. 1d 01/05/98 01/05/98
NOTICE TO PROCEED 1d 01/06/98 01/06/98
PHASE I - PLANNING PHASE 147d 01/06/98 07/29/98
PARCEL MAP PREP &APPRV 40d 01/06/98 03/03/98
BUILDING PROGRAM PREP 25d 01/06/98 02/10/98
SCHEMATIC DESIGN 35d 02/11/98 04/01/98
ENVIRONMENTAL CLEARANCE 20d 03/25/98 04/22/98
CONDITIONAL USE PERMIT 72d 04/23/98 07/31/98
PLC DEPOSIT PHASE li FUNDS($232,553) 1d 5/01/98 5/01/98
PHASE II - DESIGN PHASE 140d 07/06/98 01/13/99
CONSTRUCTION DOCUMENT PREP 100d 07/06/98 11/16/98
PLC DEPOSIT PHASE//I FUNDS ($543,000) 1d 11/06/98 11/06/98
BUILDING PERMIT APPROVAL 40d 11/17/98 01/13/99
PHASE III - BIDDING & CONSTR 185d 01/14/99 09/29/99
PROJECT BIDDING 25d 01/14/99 02/17/99
1
OWNER NEGOTIATION AND APPROVAL 10d 02/18/99 03/03/99
CONSTRUCTION 150d 03/04/99 09/29/99
File#29290
ATTACHMENT 5
x
Holly Seacliff Area
Development Agreement Obligations Timetable
i �e
�,r a i i�5► � ��#�i a d r dig tia �� � i �, a a �t� e'� � � � �i � " � � +° i � �y i r r r� � ' � a ' , r
Year Obligations Completed Year Obligations Under Construction or To Be Completed
1992 Dedicate 14 4 ac for Linear Park 1997 Garfield(Goldenwest to Main)
Edwards(Ellis to Garfield)
Garfield(Seapoint to Goldenwest) 1998 Dedicate&Improve 4 ac of Neighborhood Park
Seapoint(Garfield to Dora[) Edwards(Ellis to Inlet)
Domestic Water(9)(Garfield&Seapoint) Goldenwest(Ellis to Yorktown)
Nondomestic Water(4 5 6&14)(Garfield Edwards&Seapoint) Public Safety Facility(Edwards)
Right of Way Acquisition(Garfield&Edwards Phase 1) Water Reservoir&Booster Station(Edwards)
Sewer(1 &6)(Seapoint&Garfield) Domestic Water(1 8 3 13)(Ellis/Gothard/Huntington Goldenwest future street &Saddlebac
Storm Drain(1)(Garfield&Seapoint) Nondomestic Water(15&17)(Goldenwest&Garfield)
Traffic Signals(GarfieldlEdwards Garfield/Saddleback) Right of Way Acquisition(Gothard Phase 38 Goldenwest Phase 2C&2D)
Traffic Beacon(Seapoint/Garfield) Storm Drain(713 7C 3 2A)(Belmont Goldenwest&Saddleback)
Traffic Signals(Edwards/Ellis Goldenwest/Garfield)
1993 None Water Well
1994 Dedicate 8 8 ac for Linear Park 1999 Ellis(Edwards to Goldenwest)
Sewer(2C&2D)(Gothard) Gothard(Garfield to Main)
Storm Drain(6B)(Gothard) Main(Huntington to Clay)
Nondomestic Water(7&10)(Ellis&Gothard)
1995 Dedicate 19 6 ac for Linear Park Sewer(3)(Stewart)
Ellis(Goldenwest to Gothard) Traffic Signals(Gothard/Clay)
Domestic Water(4A 4B&5)(Ellis&Gothard)
Nondomestic Water(8 11 &12)(Ellis and Gothard) 2000 Dedicate&improve 4 ac of Neighborhood Park
Sewer(2A 2B&4)(Ellis&Gothard)
Storm Drain(6A 7A 7D 4A 4B 5 2)(Gothard Sherwood&Saddleback)
Crossing&Outlet Storm Drain(8)(Ellis)
1996 Sewer Lift Station
Sewer(5)(Hamptons 14007&Sherwood)
Traffic Signals(Goldenwest/Ellis)
1997 Dedicate&Improve 4 ac of Neighborhood Park
Gothard(Ellis to Garfield)
Domestic Water(2 6 7 10 11.12&14)(Garfield Main Clay Edwards&Promenade)
Nondomestic Water(16 13&9)(Garfield Promenade&Sherwood)
Right of Way Acquisition(Garfield Phase 4A&4B Edwards Phase lA Ellis)
Sewer(7)(Main)
Storm Drain(9)(Garfield)
Traffic Signals(Main/Garfield Garfield/Gothard Goldenwest/Clay&Ellis/Gothard)
g\status doc 12/23/97
ATTACHMENT 611
_ Holly Seacliff Area
Status of Development Agreement Obligations -
Development
Obligation' Agreement
Cost Percent of Housing Percent of
Year (millions $) Total Permits2 Total
1992 145 20 0% 0 0 0%
1993 --- 0 0% 0 0 0%
1994 1 7 2 3% 21 0 9%
1995 92 12 7% 50 2 2%
1996 03 0 4% 45 2 0%
1997 63 8 7% 599 26 1%
Subtotal $32 0 44 1% 715 31 2%
1998 369 50 9% 420 18 3%
1999 25 3 4% 420 18 3%
2000 1 1 1 5% 350 15 3%
Subtotal $40 5 55 9% 1190 51 9%
Total ��$72 5 100 0% 1906' ���83 2%
' See accompanying table for list of Development Agreement Obligations
2 Only includes Development Agreement Units To date a total of 892
permits have been issued in the Holly Seacliff area for new units
g\status As 1/12/98
ATTACHMENT 7
• i
CITY OF HUNTINGTON BEACH
2000 Main Street P . O . Box 190 California 92648
Les M. Jones It Public Works Department
Director Ra E E I V E (714) 536-5431
TO: Distribution J A N U 9 1998
FROM: IVN avid Webb,Actin
J�J� T�- ` r gineer, Public Works Department
- 1�
SUBJECT: Status Report on Outstanding Infrastructure Improvements Required Under
Holly Seacliff Development Agreement
DATE: January 8, 1998
As of this date, the status of the remaining infrastructure improvements required under the Holly
Seacliff Development Agreement that are not directly tied to a CUP or other entitlement requiring
separate bonding are as follows::
Golden West Street-Between Yorktown Street and Ellis Avenue
Construction of Golden West Street improvements are being delayed until all remaining rights-of-way
is acquired. This is necessary because the entire street grade will require modification of up to a few
feet in places. As a result of this grade differential, a hazard to motorists would exist if the
construction were to be undertaken in pieces. Presently, City staff is still negotiating on eight parcels.
Right-of-way acquisition is taking longer then originally anticipated due to some contaminated soil
issues on several of the parcels. PLC has requested their Engineering Consultant begin to revise the
original improvement plans to get then permit ready.
Items: street, storm drain, domestic and reclaimed water improvements
Estimated Cost for out-standing R/W $531,000
Estimated Cost for Improvements: $6,178,000
Garfield Avenue Improvements -Between Goldenwest Street and HuntinFrton Street
Improvements to Garfield Avenue between Goldenwest and Main are currently under construction and
should be completed in Spring 1998. Improvements to the north side of Garfield between Main and
Huntington are now the responsibility of Heritage Homes (bonded for) and should begin in the next
couple of months.
After the scheduled street work is completed, some drop-back storm drain work will need to be
completed after the new main line storm drain is installed in Goldenwest Street.
Estimated Cost for drop-back drainage work: $20,000
Gothard Street (Crystal Lane) -Between Garfield Avenue and Main Street
There are still six parcels to acquire prior to commencement of street improvements. Final street
improvement plans have not been submitted. Estimated completion date is early 1999.
Items: street, water and sewer improvements
Estimated Cost for out-standing R/W $157,000
Estimated Cost for Improvements: $1,321,000
PLC Infrastructure Status • •
1/8198
Page 2
Gothard Street-Between Garfield Avenue and Ellis Avenue
These improvements are 95% complete and the new street is open to the public. The remaining minor
construction items will be completed within the next few months.
Edwards Street-Between Ellis Avenue and Inlet Drive
PLC is currently preparing the Edwards Street improvement plans while City staff is processing the
Environmental Assessment application for the project. Paul Larkin is proceeding on securing a slope
easement from the Koll Company. Construction of the new improvements should be able to begin in
three or four months.
Items: street improvements
Estimated Cost for Improvements: $3,614,000
Ellis Avenue -Between Golden West Street and Edwards Street
Ellis Avenue, as with Edwards Street, will be constructed using accumulated TIF's produced by the
development. As development proceeds, the developer is credited the required TIF. When substantial
credits have accumulated, PLC will construct the improvements. Ellis Avenue will be constructed
after Edwards Street. PLC estimates construction of these improvements sometime in 1999.
Items: street improvements
Estimated Cost for Improvements: $873,000
Main Street-Huntington Street to Clay Street
PLC plans'to begin design of this portion of Main street in the next few months. There is a right-of-
way control issue on one parcel to be resolved prior to allowing the improvements to begin.
Construction is planned for some time in 1998.
Items: street, and water improvements
Estimated Cost for Improvements: $2,121,000
Construct Traffic Signals
Several traffic signals are required to be constructed or modified as part of the infrastructure
improvements. The outstanding signal improvements are as follows:
Estimated Cost for Improvements.
Main/Gothard (Clay) $150,000
Goldenwest/Garfield $150,000
Edwards/Ellis $130,000
Goldenwest/Ellis (modify) $60,000
Construct 9 Million Gallon Water Reservoir and Booster Pump
The site has been purchased and City staff is currently processing the environmental documents and
Conditional Use Permit necessary for construction of both the Reservoir and the adjacent Fire Station..
Items: Design and Construct Reservoir
Estimated Cost for Improvements: $11,750,000
0029480.01
PLC Infrastructure Status• •
1/8/98
Page 3
Construct Water Well
PLC is obligated to construct a domestic water supply well on a site provided by the City as part of
their development obligation. This has not been completed as of this date.
Items: Design and Construct well
Estimated Cost for Improvements: $1,780,000
Construct Public Safetv Facilitv (Fire)
PLC is obligated to construct/equip a public safety facility on land purchased by the City. This facility
is planned to be located adjacent to the new water reservoir discussed above. The site has been
purchased and City staff is currently processing the environmental documents and Conditional Use
Permit necessary for construction of both the Reservoir and the adjacent Fire Station.
Items: Design and Construct Public Safety Facility
Estimated Cost for Improvements: $3,150,000 (capped plus annual adjustment)
Construct Police Sub-station
PLC is obligated to construct/equip a Police Sub-station
Items: Design and Construct Public Safety Facility
Estimated Cost for Improvements: $654,000 (capped plus annual adjustment)
In order to insure these obligations are meet, consideration should be given to requiring a guarantee
bond for 150% of the total estimated outstanding cost for these improvements as part of the approval
of any further sale of property covered under the development agreement. Using the above cost, there
are an estimated $32,639,000 in obligations currently not covered by entitlement bonds. The
necessary bonding amount would be approximately $48,958,000.
cc: Les M. Jones II, Director of Public Works
Robert Eichblatt, City Engineer
Daryl Smith, PTL Superintendent
Mary Beth Broeren, Senior Planner
29480
0029480.01
ATTACHMENT 811
LAW OFFICES
NOSSAMAN, GUTHNER, KNOX & ELLIOTT, LLP
WALTER L. NOSSAMAN SUITE 1800 JOHN T. KNOX
(1886.1964) 18101 VON KARMAN AVENUE WARREN G. ELLIOTT
OF COUNSEL
P.O. BOX 19772
IRVINE. CALIFORNIA 92623-9772
SAN FRANCISCO WASMINGTON,D.C.
THIRTY-FOURTH FLOOR TELEPHONE (714) 833.7800 SUITE 370-S
50 CALIFORNIA STREET FACSIMILE (714) 833-7878 601 13T. STREET N-W.
SAN FRANCISCO. CA 94111.4709 WASHINGTON. D.C. 20005
(415)398.3600 (202) 793.7272
LOS ANGELES SACRAMENTO
THIRTY-FIRST FLOOR SUITE 1000
445 SOUTH FIGUEROA STREET January
9 1998 915 L STREET
LOS ANGELES,CA 90071-1602 SACRAMENTO.CA 95814.3701
(213)612.7300 �a
i 11 (915)442.8388
CE V 15+ '�s�' REFER TO FILE NUMBER
160458-001
J A N 1 21998
VIA FACSIMILE AND U.S. MAIL 0EPARTM,.r A'1-01
C0 MUM UN11 T Y 0EVE:L0P:.-'I T
William D. Holman
Planning & Government Relations
PLC
23 Corporate Plaza, Ste. 250
Newport Beach, CA 92660
Re: Response to City Council Questions Re Holly Seacliff Infrastructure
Financing
Dear Bill:
I am transmitting our responses(prepared by PLC and our firm)to City Council
questions raised at their meetings of December 8 and 15, 1997. The responses provide both
factual data and, where appropriate,references to applicable sections of the Holly Seacliff
Development Agreement and Specific Plan.
It is my understanding that City Staff intends to utilize this information, and the
Holly Seacliff Development Agreement 1997 Annual Monitoring Report to address the
referenced issues at the City Council meeting regarding Holly Seacliff on January 20, 1998.
Please contact me if you have further questions or input regarding the attached.
Sincer ,
John . Erskine
o OSSAMAN, GUTHNER,KNOX&ELLIOTT, LLP
JPFJcjd
Enclosure
cc: Christopher Gibbs
Daren Groth
Not Checked-In
PLC RESPONSE TO CITY COUNCIL
QUESTIONS RE HOLLY SEACLIFF
INFRASTRUCTURE FINANCING - JANUARY 9, 1998
COUNCILPERSON QUESTION ANSWER
• Mayor Dettloff (1) What's the timeline After nearly a year of negotiations, the
on acquisition, City acquired a site on Edwards Street,
design and south of Ellis. Design of the site for
construction of the the reservoir and fire station will take
reservoir? 6-9 months. Construction will begin
once environmental analysis,
entitlements,plans and permits
approved.
(2) Has PLC kept pace Yes. Infrastructure has been
with its general completed as expeditiously as
infrastructure possible. Significant improvements
obligations(vis-a- for Peninsula area are complete
vis units (Seapoint, Garfield, Summit,
constructed)? Peninsula). 460/1,100 units entitled.
Remaining improvements include
Goldenwest Street and Peninsula
Neighborhood Park, in design for start
in fall 1998.
Majority of Seagate area
improvements are complete (Ellis,
Gothard, Main, Promenade). Garfield
complete March 1998. Neighborhood
park and restored wetlands complete.
560/1,100 units entitled. Remaining
improvements include Goldenwest
Street and Promenade Neighborhood
Park(1999 completion). Bluffs area
improvements complete. Edwards
widening scheduled for completion in
1998.
00980080003
COUNCILPERSON QUESTION ANSWER
(3) Can Council review Yes. Advance report to Council will
PLC Annual be provided. PLC's annual report
Compliance Report submitted to staff in October 1997.
on Jan. 20? Public hearing at Planning
Commission Jan. 13. Formally to
Council in February.
(4) Do we have an Yes. See Holly Seacliff Specific Plan,
obligation to Section IV, which was incorp. into
estimate fair share? Development Agreement by mutual
(Question consent of the City and Pacific Coast
addressed to City Homes in 1992. See Section 2.4 (pg.
Attorney.) 29) of Development Agreement
(specifically 2.4.1 Mutually Approved
Changes . The specific fair share
determination language is contained in
Section IV.B,pg. IV-1 (see
attachment).
(5) Is the Development City Attorney Hutton: "Specific Plan
Agreement the only appears to be an amendment to the
pertinent document Development Agreement which comes
to look to in into play—I recognize that." (City
resolving the Attorney answer to Mayor Dettloff on
reimbursement December 8, 1997.).
dispute, or are there PLC Comment: The Specific Plan
others?(To City requires fair share analysis and
Attorney) allocation in advance of construction,
and also requires the creation of a
"Public Facilities Fee Ordinance,"
which to date has not been completed
by City(see attachment).
• Councilman Bauer (1) May City send Yes. City may, but for what reason?
notice to purchasers Buyers perform extensive due
of property from diligence prior to purchase and are
PLC that familiar with terms of Development
Reimbursement Agreement, Specific Plan and
Agreement with individual project conditions of
City has not been approval.
accomplished?
-2-
I
COUNCILPERSON QUESTION ANSWER
(2) Are these PLC land No. PLC disclosures and ongoing
purchasers being negotiations with purchasers
misled? represented by experienced staff and
legal counsel makes the status of
infrastructure and reimbursement
agreement clear.
(3) Can the City No. Development Agreement
withhold issuance evidences City's acknowledgment that
of C of O if there is developer could not control City's
no agreement on actions and timing re reservoir site
water acquisition and,therefore, specifically
reimbursement? states no permits or occupancies shall
be withheld. Development Agreement
Section 2.2.5(h) states (pg. 21):
"Developer will not be denied any
building releases or building permits
due to lack of water services provided
by these facilities.
(4) Can the City No, since City's consent to sale may
require security not be unreasonably withheld and the
bonds as a part of City has not demonstrated that PLC is
City's consent to behind schedule on infrastructure
sale? obligations or there has been a
demonstrable lack of progress on any
part of the project. PLC believes such
a security mechanism is not
reasonable, under such circumstances.
Such a security device is not required
under Existing Land Use Regulations
or any other terms imposed by
Development Agreement, and
Subdivision Map Act conditions re
infrastructure are enforced in any
event on property purchasers'tentative
map approvals.
(5) Is PLC entitled to Yes. See Development Agreement
interest on unpaid Section 2.2.11(g),up to 200%of
reimbursement Actual Cost allowed for interest on
funds? cost of non-reimbursed infrastructure.
-3
COUNCILPERSON QUESTION ANSWER
(6) Is the City required Yes. Specific Plan and State law
to segregate fees (Gov. Code §66000 et seg.)require
from other builders where other builders benefit from
with which to pay advance construction of public
requested facilities beyond those necessary to
reimbursement? serve the subject development.
(7) Has PLC repudiated No. See Bill Holman's testimony on
their obligation to 12/8/97 and 12/15/97 on behalf of
build the water PLC which unequivocally states that
reservoir? PLC will build the reservoir,has
budgeted for same, and will
commence work as soon as City's site
design is complete and plans have
been approved.
• Councilman Harman (1) Will PLC keep its Yes. See Bill Holman's testimony on
commitment to 12/8/97 and 12/15/97. City has
build the obligation to acquire
infrastructure? property/right-of-way for PLC to
install infrastructure and obligation to
provide estimate of PLC's fair share,
even though PLC builds 100%of
infrastructure and receives a
percentage return from other builders
using that infrastructure.
i
(2) Will PLC complete Yes. See answer to Question 1.
reservoir without
regard to whether
we have an
agreement complete
regarding
reimbursement?
(3) Is PLC saying that No. But,the City is obligated to
you're not going to identify PLC's fair share in advance of
start construction construction. (See Question 1.)
until PLC knows its
fair share of the
reservoir?
-4-
COUNCILPERSON QUESTION ANSWER
(4) When PLC states Do the following:
that there is 1. Approve design of facilities,
agreement on acquire right-of-way where
police, fire, necessary;
reclaimed water and 2. Execute Reimbursement
arterial Agreements with PLC;
improvements, 3. Determine appropriate fees or
what else must the conditions for other developers
City do to finalize based on fair share
this "agreement"? determination;
4. Segregate fees collected from
other builders at time of
development;
5. Public Works Director
determines PLC's actual cost
for building the items;
6. Reimburse PLC.
• Councilman Garofalo When did the City acquire Chief Dolder: September 16, 1997;
the reservoir site, and is it a Les Jones: "There's no delay on PLC's
fair statement that there is part; fire station must be designed and
no delay on PLC's part? boundary defined."
Melanie Fallon: "PLC is ahead of
schedule."
• Councilperson Julien What's the timeline for PLC/City staff provide(see answer to
reservoir completion? question 1 of Mayor Dettloff).
i
-5.
r
4.7 Enhance the visual quality of the area by developing community
theme landscaping and undergrounding utility service lines within
new development.
7.4 Provide phased storm drain facilities to protect future development
from the potential of flooding from the 100 year storm high water mark.
7.5 Construct water supply, distribution and pressure systems to provide
adequate fire protection for new development.
7.6 Mello—Roos or other potential funding mechanisms shall be explored
for the purpose of providing Police, Fire and other community services,
facilities and infrastructure. (emphasis added)
11nApril, 1992, the Huntington Beach City Council adopted the Holly Seacliff Specific Plan,
establishing new zoning and development controls consistent with the amended General Plan.
Section IV. B, Public Facilities Improvements Responsibilities, found on page IV-1, states:
"In order to provide for public facilities improvements necessary to serve all
future development within the Holly Seacliff area, developers will have a
fair—share responsibility for either (1) constructing the necessary improvements
required as described in the Specific Plan concurrent with project development,
or (2) funding such necessary improvements if constructed by other developers.
The City will determine and administer the fair—share responsibility for the
master public facilities improvements, including sewer, water, drainage, roads,
traffic controls, fire and police capital facilities as described in the Specific Plan.
If a developer provides the necessary facilities beyond his fair—share responsibility,
that developer shall be reimbursed from funds collected from other developers.
If a developer is required to pay fees, those fees will be based on the City's
fair—share responsibility determination. This determination will be based on a
development's proportional use of the master public facilities improvements
necessary to serve the development utilizing assessment on a dwelling unit,
acreage, building square footage or front footage basis.
All development projects to be served by the master public facilities improvements
shall be conditioned to construct facilities or pay fees per a Holly Seacliff Public
Facilities Fee Ordinance. Such construction or payment of fees shall be based on
a fair—share responsibility program as administered by the City Public Works
Department.
Development Agreement No. 90-1 describes certain public facilities improvements
to be constructed by Pacific Coast Homes and Garfield Partners." (emphasis added)
2
i
ATTACHMENT 91l
CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
TO: Honorable Shirley Dettloff,Mayor, and
Members of the City Council
FROM: Gail Hutton, City Attorney
DATE: January 14, 1998
SUBJECT: PLC responses to Council questions dated 1/9/98
RLS 98-0023
We have reviewed the responses to the City Council's questions from PLC dated 1/9/98. While the
responses are accurate for the most part, some of them need clarification and/or correction.
1. Timing of Fair Share Analysis
PLC contends that the Holly-Seacliff Specific Plan requires the City to perform fair share
analysis and allocation Ln advance-of the construction of the infrastructure required by the
Development Agreement. (Letter, page 2, response to Item 5; and page 4,response to Item 3.)
This contention is simply not true. The Specific Plan contains no language relating to the
timing of the City's performance of this task. Further, the Development Agreement requires this
determination to be made�e the public improvements have been constructed, dedicated and
accepted. (See, e.g., Development Agreement Sections 2.2.40); 2.2.5(g); and 2.2.11.) Finally,we note
that if this contention were true, all the public improvements constructed by the Developer of the
Holly-Seacliff project since 1990 would have been installed in violation of the Specific Plan.
Obviously, this is not the case.
2. Requirement of security bonds as condition to consent to sale.
PLC also contends that the City cannot require security bonds as a condition of the City's
consent to any subsequent sales of the property.
Again, this contention is simply not true. The Agreement provides that the City Council's
approval cannot be unreasonably withheld. (Section 4.2.) This means that the Council can adopt
reasonable conditions to its consent. The Council has discretion, as the elected representatives of the
public,to determine what constitutes a"reasonable"•condition for the promotion of the public's health,
safety and welfare. Such decisions are usually sustained by the courts if supported by substantial
evidence.
Several years have passed since the adoption of the Holly-Seacliff Development Agreement.
The original Developer, Chevron, has sold the Property to PLC and MS Vickers. They have sold
portions of their holdings to other parties. Many of the public improvements required by the
4/s:4-98Mem0s:H-S-0114
Agreement have been built and dedicated;however,construction has not yet begun on several
substantial items, like the public safety facility, fire station,and water reservoir. Since the
Development Agreement Property is essentially the collateral for the performance of these obligations,
as the Property is transferred to third parties,the City needs alternative security to assure that the public .
improvements will be completed as required by the Agreement.
Since approval of the City Council must be obtained prior to any transfer of the Property,we
recommend that the City require, as a condition of approval of any future sales, the posting of a bond
or some other acceptable security to guarantee the completion of the remaining public improvements.
Given the amount of property that PLC and MS Vickers have sold,that many significant public
improvements still remain to be built, and that PLC is now apparently disputing the timing of certain
obligations under the Agreement, we believe that this is a reasonable, necessary and appropriate
condition precedent to any future sales of the Property.
If the cost of a bond is an impediment, another type of security,like a letter of credit, may be
submitted. Any such security should be reviewed by the City Attorney's Office for approval.
We are pleased to have provided the Council with this information and welcome any comments or
questions the Council may have.
Gail Hutton
City Attorney
I
I
s
4/s:4-98Memos:H-S-0114
AGENDA
RCA
2 Accept the Boyle Report on
Holly/Seacliff Reimbursement
BOYLE ENGINEERING REPORT
3 Holly/Seacliff Cost Reimbursement
for Excess Capacity Task 2 Cost
Analysis
MINUTES
4 Holly/Seacliff Construction Financing
D Committee - 9/30/97
On
Crfy G'�erl�.s
P., HOLLY SEACLIFF
5 DEVELOPMENT AGREEMENT
6 HOLLY SEACLIFF SPECIFIC PLAN
HOLLY SEACLIFF GENERAL
7 PLAN AMENDMENT
8 NOTES 3y
1AV-ZRy READY INDEX" INDEXING SYSTEM
Holly Acliff Infrastructure ReimbVement
ULU
Holly Seacliff Development
Status Report
Infrastructure
Reimbursement & Obligations
-411W I
Holly Seacliff
Status Report
1) Reimbursement to PLC
*Development Agreement
*Proposal for Early Determination
2) Status of infrastructure obligations
*Completed projects
*Schedule for remaining projects
3) Guarantee of infrastructure completion
*Bonding
*Letter of Credit 2
1/20/98 1
Holly Acliff Infrastructure Reimboement
411W
Reimbursement to PLC
for Excess Capacity
♦ PLC is eligible reimbursement for public
improvements which may provide capacity in
excess of those required to serve the Holly
Seacliff development.
(water, sewer, drainage, streets, public safety facilities)
♦ "Excess capacity" of infrastructure was
analyzed by Boyle Engineering Corp..
3
I.Ulil I
Reimbursement Process
in Development Agreement
1) Public improvements are accepted by the City
2) Developer submits actual cost of improvements
3) Public Works Director verifies; then determines
amount and percentage reimbursable costs
4) If Developer disputes Director's decision, the
issue may be appealed to the City Administrator
5) City Administrator decision may be appealed to
the City Council
6) Further dispute is subject to binding arbitration. a
1/20/98 2
Holly SOcliff Infrastructure ReimbVement
Inadequacies of Current Process
1) Development Agreement delays process
until improvements are completed
2) Developer has no certainty of percentage
of actual costs will be reimbursable
s
Proposal for Early Determination of
Excess Capacity
♦Public Works Director to send PLC a
"Letter of Preliminary Determination of
Excess Capacity" by February 28, 1998
♦ PLC has 60 days to review and respond
♦For areas of agreement, a Preliminary
Excess Capacity Agreement will be
presented to Council for adoption and
reimbursement accounts will be established.
6
1/20/98 3
Holly Acliff Infrastructure ReimbVement
ML
Preliminary Excess
Capacity Agreement
♦ Subsequent reimbursement agreements will
be based on the Preliminary Agreement and
actual costs.
♦ In areas of disagreement, the City and PLC
will seek advisory arbitration.
♦If agreement cannot be reached, excess
capacity reimbursement will proceed as
provided by the Development Agreement
PLC Reimbursement Requests
♦Bills have been submitted for some
completed projects
♦Actual costs of facilities will be substituted
for estimated costs in Boyle Analysis
♦When agreement on excess capacity is
reached, the reimbursement process can
proceed
x
1/20/98 4
Holly Acliff Infrastructure Reimboement
====�Wii�___
Infrastructure Obligations
Fire Station/Water Reservoir
♦ Contract awarded for RRM Design Group
♦ Will design fire station & overall site plan
♦ Public Works is providing design standards
& will approve construction plans for the
reservoir
♦ PLC will construct reservoir & equipment
♦Completion scheduled September 1999
IT
1-11W L
Infrastructure Obligations
Police Facilities
♦Elimination of cross-gap connector road
changed police service needs
♦ Staff recommends funds be redirected to
augment construction of new 911
Communications Center
♦Facility to be adjacent to Holly Seacliff area
io
1/20/98 5
Holly Acliff Infrastructure Reimboement
Remaining Infrastructure
Obligations
♦Infrastructure completion currently ahead of
housing permit activity (44% compared to 3t%)
♦Pattern expected to continue through 2000
♦Annual Review of the Holly Seacliff
Development Agreement to be presented in
February or March 1998
♦Annual Review will detail infrastructure
status
Bonding of Infrastructure
Completion
♦ Properties are being sold to other developers
♦Council must approve all property sales
subject to Development Agreement
♦City should assure completion of required
infrastructure
♦Alternatives are available to guarantee
completion of the remaining infrastructure
12
1/20/98 6
I
Holly S*cliff Infrastructure Reimbpement
ULI
Bonding of Infrastructure
♦City may require letter of credit, bonds or
similar security from PLC for
system-wide infrastructure, including the
fire station and reservoir
♦Estimated costs for improvements not
associated with a specific project or
entitlement can be used to determine
appropriate amount for bond or credit letter
13
1/20/98 7