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17-1205_KNAPE, JAMES AND DORIAN_F20_Agenda ReportCity of San Juan Capistrano Agenda Report TO : Honorable Mayor and Members of the City Council FROM : ~njamin Siegel, City Manager SUBMITTED BY : Joel Rojas, Development Services Directo ¥" PREPARED BY: David Contreras, Senior Planner ~ DATE: December 5, 2017 12/5/2017 F20 SUBJECT: Consideration of an Urban Agriculture Incentive Zones Act Property Agreement for the Knape Property Organic Lemon Grove located at 27112 Highland Drive (James W. Knape and Dorian D . Knape). RECOMMENDATION : Approve an Urban Agriculture Incentive Zones Act Property Agreement for the Knape Property Organic Lemon Grove located at 27112 Highland Drive, and authorize the City Manager to execute the Agreement. EXECUTIVE SUMMARY: On October 17, 2017, the City Council conducted a public hearing and approved the introduction and first reading of an Ordinance to amend the San Juan Capistrano Municipal Code to allow Urban Agriculture Incentive Zones Act agreements in zoning districts that allow agriculture uses . On November 7, 2017, the City Council approved the second reading and adoption of the ordinance . Pursuant to the ordinance, James W. Knape and Dorian D. Knape ("Applicant") are requesting approval of an Urban Agriculture Incentive Zones Act Property Agreement ("Agreement") for the Knape Property Organic Lemon Grove located at 271 .12 Highland Drive (Attachment 1 ). DISCUSSION/ANALYSIS: The City Attorney's office has prepared the attached Agreement for the Knape Property Organic Farm . The Agreement, which is between the Applicant and the City, requires the Applicant to maintain their agricultural property consistent with the Urban Agriculture Incentive Zones Act so that they are eligible for a property tax reduction. In response to the comments provided at the September 12, 2017, Planning Commission meeting, the proposed Agreement includes provisions that address property maintenance (§ 4.5), City Council Agenda Report December 5, 2017 Page 2 of 2 fallen fruit and foliage (§ 4.6), invasive species and plants (§ 4.7), and prohibits the cultivation of marijuana and cannabis (§ 4.8). FISCAL IMPACT: Costs associated with the preparation of the Agreement are funded by the applicant through a developer deposit account. ENVIRONM ENTAL IMPACT: The action is not a project under State CEQA Guidelines § 15378(a) because it has no potential to result in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Further, the action is exempt from CEQA under the commonsense exemption in State CEQA Guidelines section 15061 (b), which exempts any activity for which it can be seen with certainty that there is no possibility of a significant effect on the environment. PRIOR CITY COUNCIL REVIEW: October 17, 2017, the City Council conducted a public hearing and approved the introduction and first reading of an Ordinance. On November 7, 2017, the City Council approved the second reading and adoption of the ordinance. COMMISSION/COMMITIEE/BOARD REVIEW AND RECOMMENDATIONS: Not applicable. NOTIFICATION: James W. Knape and Dorian D. Knape ATTACHMENT(S): Attachment 1 -Urban Agriculture Incentive Zones Act Property Agreement RECORDING REQUESTED BY: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 AND WHEN RECORDED, MAIL TO : Maria Morris, City Clerk City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Exempt from Recording Fees: Gov Code 27383 & 6103 City of San Juan Capistrano This Space for Recorder's Use Only Title of Document: URBAN AGRICULTURE INCENTIVE ZONES ACT PROPERTY AGREEMENT 27112 HIGHLAND DRIVE SAN JUAN CAPISTRANO, CA 92675 ("KNAPE PROPERTY -ORGANIC LEMON GROVE") ATTACHMENT 1 URBAN AGRICULTURE INCENTIVE ZONES ACT PROPERTY AGREEMENT 27112 HIGHLAND DRIVE SAN JUAN CAPISTRANO, CA 92675 ("KNAPE PROPERTY -ORGANIC LEMON GROVE") ORANGE COUNTY, CALIFORNIA PARTIES AND DATE This Urban Agriculture Incentive Zones Act Property Agreement "Agreement" is made and entered into as of , 2017 by and between the City of San Juan Capistrano, a municipal corporation organized and operating under the laws of the State of California with its principal place of business at 32400 Paseo Adelanto, San Juan Capistrano, CA 92675 ("City"), and James W. Knape and Dorian D. Knape , real property owners at 27112 Highland Drive, San Juan Capistrano, CA 92675 (hereinafter referred collectively to as "Owner"). The City and the Owner are sometimes individually referred to as "Party" and collectively as "Parties" in this Agreement. RECITALS A. The State of California ("State") adopted the Urban Agriculture Incentive Zones Act (California Government Code Section 51040, et seq., and California Revenue & Taxation Code, Article 1.5 [Section 422 .7 et seq.]) ("UAIZ Act"). The UAIZ Act authorizes cities and counties to establish an urban agriculture incentive zone ("UAIZ") for purpose of entering into voluntary agreements with property owners of vacant, unimproved, or blighted lands within the zone. Through these agreements, the property owners commit to use their property for a sustainable small-scale agricultural use in exchange for lower property taxes during the term of the agreement. B . Pursuant to the UAIZ Act, Orange County ("County") adopted Resolution No. 17- 031, Item No. 43, which authorizes the City to establish a UAIZ within the City's jurisdiction. The City amended the San Juan Capistrano Municipal Code to add Section 9-3.558 to establish a UAIZ. C . Owner is the owner of the property located at 27112 Highland Drive, San Juan Capistrano, CA 92675, in Orange County, California (Tract 10103, Lot 23, and APN 650-501-11) ("Property") The Property is more particularly described in the Property Description included as Exhibit A and incorporated herein. The City has determined that the Property is within the City's UAIZ and is eligible for an agreement under the UAIZ Act. D. The Owner desires to enter into this Agreement to implement on the Property an organic lemon grove ("Project")-a sustainable small-scale urban agricultural use consistent with the requirements of the UAIZ Act and the San Juan Capistrano Municipal Code-which is more particularly described in the Project Description included as Exhibit B and incorporated herein as well as the Site Plan included as Exhibit C and incorporated herein. In exchange to the Owner's commitment to 2 the Project, the Owner will receive reduced property taxes as authorized by the UAIZ Act. E. The City desires to enter into this Agreement to promote the use of vacant, undeveloped land for sustainable small-scale urban agricultural use and to provide public benefits to the City, such as connecting residents to the broader food system, providing green space and recreational opportunities, and building community, as well as promoting food access, public health, and economic development. TERMS 1. Timing. 1.1. Effective Date. Once executed, this Agreement shall be effective from the date of its recordation ("Effective Date"). 1.2. Term. This Agreement is effective upon the date of execution by the City and remains in full force and effect for a term of five (5) years from the Effective Date. 1.3. Extension. 1.3.1. The Owner may apply to extend the Agreement for additional terms of five (5) years, provided that the UAIZ Act and the San Juan Capistrano Municipal Code allow such an extension. 1.3.2. The extension shall be subject to the same requirements as the Agreement as set forth in the UAIZ Act and San Juan Capistrano Municipal Code Section 9-3.558. The extension shall be effectuated as an Amendment in accordance with Section 12. 2. Applicat ion of the UAIZ Act and Property Taxes . The benefits, privileges, restrictions and obligations of the UAIZ Act and San Juan Capistrano Municipal Code Section 9-3.558 shall apply to the Property while this Agreement is in effect. Accordingly, the Property shall be assessed pursuant to California Revenue and Taxation Code section 422.7. 3. Property Size. The Owner represents that the Property's size is within the allowable range under the UAIZ Act of one tenth (0.1) acres to three (3) acres. 4. Use of the Property. 4.1. Dedication to Agriculture Use. 4.1.1. The Owner shall dedicate the entire Property to an agricultural use in accordance with the UAIZ Act; the San Juan Capistrano Municipal Code; and this Agreement, including the approved Project Description shown in Exhibit B and approved Site Plan 3 shown in ' Exhibit C; and any other applicable law, regulation, or policy. 4.1.2. The Owner shall proceed diligently in commencing agricultural use and shall commence such use not less than thirty (30) days after recordation of this Agreement if not already using the Property for agricultural use. 4 .2. Structures Supporting Agricultural Activates . This Agreement does not prohibit the use of structures that support agricultural activity, including, but not limited to, toolsheds, greenhouses, produce stands, and instructional space . 4.3 . No Residential Dwellings. The Property may not include any residential dwellings. 4.4 . Pesticides and Fertilizers. Use of pesticides and fertilizers on the Property shall be restricted to those allowed by the United States Department of Agriculture's National Organic Program. 4.5. Property Maintenance . The Owner shall maintain the Property in a clean and sanitary condition at all times and shall not allow the Property to fall into a blighted condition. 4.6 . Fallen Fruit and Foliage . The Owner shall properly discard all fallen fruit and foliage within a timely manner. 4.7. Invasive Species. Invasive Plants. and Noxious Weeds. The Project shall in no way include the cultivation of invasive species, invasive plants, or noxious weeds identified by the California Department of Food and Agriculture. 4 .8. Marijuana and Cannabis. Pursuant to Orange County Resolution No. 17- 013, this Agreement in no way allows the cultivation of marijuana or cannabis. The Project shall in no way include the cultivation of marijuana or cannabis. 5. Cessation or Change in Use . 5.1 . Notice of Cessation or Change in Use. The Owner shall provide written notice to the City of, and within fourteen (14) days of, the following: 5.1.1. Any cessation of the agricultural use for any reason, including, but not limited to, the loss of a tenant who was conducting the use; or 5.1.2. Any change in the agricultural use for any reason from that approved under this Agreement. 4 5.2. Must Resume Use. The Owner must resume the agricultural use consistent with this Agreement within thirty (30) days of the cessation or change. 6 . Implementation Fees. The Owner agrees to pay any fee imposed by the City for the reasonable costs of implementing this Agreement as authorized by the UAIZ Act, including, but not limited to, the costs of inspecting the Property and determining compliance with the Agreement ("Implementation Fees"). The Owner shall pay the Implementation Fees within thirty (30) days of the date provided on the written notice of the fee and shall pay the Implementation Fees in such a manner as the City shall prescribe. 7 . Inspect ions . The Owner consents, upon the seventy two (72) hours written notice, to periodic inspection of the Property by appropriate representatives of the City, County, or State to monitor the Owner's compliance with the terms of this Agreement and other applicable laws, regulations, and policies. The Owner shall provide all reasonable information and documentation about the Property to demonstrate such compliance as requested by any of the above-referenced entities. 8. Cancelation. 8.1. Default. 8.1.1. Should the Owner violate any provision of this Agreement or fail to perform under this Agreement in any way, the City shall provide the Owner with written notice describing the violation or failure to perform ("Notice of Violation"). 8.1.2. The Owner shall diligently work to cure the violation within fourteen (30) days of the date of the Notice of Violation. The City, at its discretion, may allow a longer time period to cure. The City, at its discretion, may, at any time extend the time period to cure. 8.1.3. If the Owner fails to cure the violations as provided in this Section 5.1, then the Owner shall be in "Default." 8.2. Cancelation by the City. If the Owner is in Default, then the City may cancel this Agreement. The City shall send written notice of the cancellation to the Owner and the County Assessor-Recorder. The City shall record notice of the cancellation. 8.3 . Cancelation by the Owner. The Owner may cancel this Agreement prior to the Agreement's expiration by sending written notice of the cancellation to the City and to the County Assessor-Recorder. The Owner shall record notice of the cancellation. 5 8.4. Cancelation Fee. 8.4.1. If this Agreement is cancelled prior to the expiration of this Agreement, then the City shall impose on the Owner a fee equal to the cumulative value of the tax benefit received during the duration of this Agreement, as determined by the County Assessor- Recorder, plus interest ("Cancelation Fee"). The Cancelation Fee shall be paid to the City at such a time and in such a manner as the City shall prescribe. 8.4 .2. The Cancellation Fee shall be waived if the City Manager or his or her designee determines that the cancellation was caused by extenuating circumstances despite good faith efforts by the Owner. 9. Indemnification . 9.1 . Inde m nification of the City by the Owne r. The Owner shall defend, indemnify and hold the City, its officials, officers, employees, and agents (the "Indemnified Parties") free and harmless from any and all liability from loss, damage, or injury to property or persons, including wrongful death, in any manner arising out of or incident to acts, omissions, and/or operations by the Owner, its officials, officers, personnel, employees, invitees, licenses, guests, contractors, and/or subcontractors as well as its contractors' and/or subcontractors' officials, officers, employees, and agents. Further, the Owner shall defend at its own expense, including attorneys' fees, the Indemnified Parties in any legal action based upon such acts, omissions and/or operations. 9.2. The Owner's Obligations. The Owner's obligations under this Section 12 shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered, regardless of whether or not the City has prepared, supplied, or approved any plans or for the uses allowed by this Agreement, and regardless of whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages. 9.3. T he Ci t y's Righ t s. The City does not and shall not waive any rights against the Owner that the City may have under the indemnification provision in this Section 12 because of the City's acceptance of any security deposits or insurance policies. 9.4. Survival. The indemnification provision in this Section 12 shall survive the termination or expiration of this Agreement. 10 . Insurance. The Owner shall secure adequate liability insurance to cover activities on the Property under this Agreement, including coverage for any third parties on the Property. 6 11 . Recorda t ion. Within thirty (30) days from the date of execution of this Agreement, The Owner shall cause this Agreement to be recorded with the Office of the Recorder of the County of Orange. 12 . Amendment. This Agreement may be amended, in whole or in part, only by a written instrument executed by the Parties in the same manner as this Agreement and recorded pursuant to Section 11. No supplement, modification, and/or amendment of this Agreement shall be binding unless executed as provided in this Section 10. 13 . Notices . All notices to be given hereunder shall be in writing and may be made either by personal delivery or by registered or certified mail, postage prepaid, return receipt requested. Mailed notices shall be addressed to the parties at the addresses listed below, but each party may change the address by written notice in accordance with this Section 12.6. To City: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attn: City Manager To Owner: Attn : __________ _ 14. Attorneys ' Fees. If any legal action or proceeding arising out of or relating to this Agreement is brought by either party to this Agreement, the prevailing party shall be entitled to receive from the other party, in addition to any other relief that may be granted, the reasonable attorneys' fees, costs, and expenses incurred in the action or proceeding by the prevailing party. 15 . Governing Law and Venue. This Agreement shall be governed by the laws of the State of California. Venue shall be in Orange County. 16. No Waiver. The City's failure to insist upon strict compliance with any provision of this Agreement or to exercise any right or privilege provided herein, or the City's waiver of any breach hereunder, shall not relieve the Owner of any of its obligations hereunder, whether of the same or similar type. The foregoing shall be true whether the City's actions are intentional or unintentional. Further, the Owner agrees to waive as a defense, counterclaim, or setoff any and all defects, irregularities, or deficiencies in the authorization, execution, or performance of this Agreement as well as any laws, rules, regulations, ordinances, or resolutions of the City with regard to this Agreement. 17 . Construction. References , and Cap t ions. 17 .1. Simp le Construction. It being agreed the Parties or their agents have participated in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. 7 17.2. Section Headings. Section headings contained in this Agreement are for convenience only and shall not have an effect in the construction or interpretation of any provision. 17.3. Calendar Days . Any term referencing time, days, or period for performance shall be deemed calendar days and not work days. 18 . Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements, either written or oral, express or implied. 19. Severability. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement. 20. Third Parties. This Agreement is made and entered into for the sole protection and benefit of the Parties and their successors and assigns, and no other person or entity is a third-party beneficiary of, or has any direct or indirect cause of action or claim in connection with the Agreement or any other related document to which that person or entity is not a party. 21 . Binding on Successors and Assigns. The covenants, benefits, restrictions, and obligations contained in this Agreement shall be deemed to run with the land and shall be binding upon and inure to the benefit of all successors and assigns in interest of the Owner. 22. Authority. If the Owner sign as a corporation or a partnership, each of the persons executing this Agreement on behalf of the Owner does hereby covenant and warrant that such entity is a duly authorized and existing entity, that such entity has and is qualified to do business in California, that the Owner has full right and authority to enter into this Agreement, and that each and all of the persons signing on behalf of the Owner are authorized to do so. 23. Signatures . This Agreement may be signed and dated in parts. Signatures on next page. 8 SIGNATURE PAGE TO URBAN AGRICULTURE INCENTIVE ZONES ACT PROPERTY AGREEMENT 27112 HIGHLAND DRIVE SAN JUAN CAPISTRANO, CA 92675 ("KNAPE PROPERTY -ORGANIC LEMON GROVE") ORANGE COUNTY, CALIFORNIA In witness thereof, the Parties here to have executed this Agreement: City of San Juan Capistrano Owner By: By: City Manager ATTEST: By : City Clerk APPROVED AS TO FORM: By: City Attorney 9 EXHIBIT A PROPERTY DESCRIPTION A-1 650-501-11, CA, Orange County EX HIBIT A owner Information Owner Name: Mall Owner Name: Ta x Billing Address: Location Information Tract Number: School District: Comm College District Code: Tax Information APN: Tax Area: Legal Description: N/A N/A 64,865 N/A Beds Bldg Sq Ft Lot Sq Ft Sale Price N/A N/A SFR N/A Baths Yr Built Type Sale Date Knape James W .James W Knape 27112 Highland Dr Tax Billing City & State: 10103 capistrano S Orange Co Tax Billing Zip: Tax Billing Zlp+4: TGNO: Census Tract: ---------·-----· 650-501-11 Lot: 23065 Water Tax Dist: TRACT NO 10103 LOT 23 POR OF LOT RECEIVED MAY 0 5 2015 PLANNING DEPT. San Juan Capistrano, CA 92675 1454 952-C4 320.61 23 Orange Co Property Detail Pr;ge ; <·I;; owner Name: Knape James W RECEIVED Recording Date 10/01/2007 08/02/2001 Sale Date 07/19/2001 MAY 0 5 2015 Nominal y Buyer Name Owner Record Pochlrowskl William J Seller Name owner Record Pochlrowskl Dana L PLANNING DEPT. Document Number 592017 529584 Document Type Deed (Reg) Interspousal Deed Transfer 336' / I 547' 271' lSZ' ~. I 200 ftrds 1 a.l.•i;o\) C 4:·j·~ '•l>:r~tofl ::or~r•~i:·• ~ ~~4 N:Mtil ''Lo)t Dimensions are E~tioTlated Courte!">y •Jf Rebecca Pappas, Profes~innal Reill Estate Sales, California RegiCinal MLS Property Detail Generated Qn 01 /2J/2014 Page 2 of J. EXHIBIT 8 PROJECT DESCRIPTION B-1 EXHIBIT B PROJECT DESCRIPTION Property Owner: James W. Knape and Dorian D. Knape "Knape Property-Organic Lemon Grove" Address : 27112 Highland Drive APN #: 650-501-11, Lot 23 Site Acreage: 1.48 acres Property Use: The property is and is dedicated to producing organic lemons. The property contains approximately 420 Lisbon lemon trees. The only structures are two plastic sheds that store our equipment and organic materials. The property has a dedicated water meter and uses a landscape irrigation system that was approved by the City of San Juan Capistrano Public Works Department in 2010. The water is controlled by a smart system and power is driven by a solar system on the property. EXHIBIT C SITE PLAN C-1 EXHIBIT C 27112 HIGHLAND DRIVE APN 650-501-11 LOT23 © 2012-2017 Digital Map Products. All rights reserved. 1