1997-0805_FLUIDMASTER, INC._D10_Agenda Report :•
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AGENDA ITEM August 5, 1997
TO: George Scarborough, City Manager
FROM: John Shaw, City Attorney
SUBJECT: Approval of Fluidmaster Deferral of Fees and Taxes Agreement
RECOMMENDATION
That the City Council approve the proposed Fluidmaster Deferral of Fees and Taxes Agreement.
SITUATION
A. Summary and Recommendation
Pursuant to City Council direction, the proposed Deferral of Fees and Taxes Agreement with
Fluidmaster has been negotiated by this office as a companion agreement with the
Redevelopment Agency's previous agreement with Fluidmaster regarding allocation of tax
increment for Fluidmaster's project.
B. Background
Under this Deferral of Fees and Taxes Agreement, Fluidmaster will be required to pay the
applicable fees and taxes for this project one year following the date a certificate of occupancy
has been issued to it.
Total Fees and Taxes for the project are $480,760 based upon previously approved
development plans for the project.
However, Fluidmaster will be required to post financial security acceptable to the City
Attorney in an amount equal to the total of the fees and taxes for the purpose of guaranteeing
the payment of these fees and taxes in the event of a default by the Developer.
ALTERNATE ACTIONS
1. Approve the staff recommendation;
2. Do not approve the staff recommendation; or
3. Return to staff for further information.
FOR CITY COUNCIL AGEN . I 0
a.
r
Agenda Item -2- August 5, 1997
RECOMMENDATION
Move to approve the Fluidmaster Deferral of Fees and Taxes Agreement, and authorizing the City
Manager to execute same.
Respectfully submitted,
6&- --'
J R. Shaw,
C Attorney
Attachment: Deferral of Fees and Taxes Agreement
DEFERRAL OF DEVELOPMENT TAXES
AND FEES AGREEMENT
THIS AGREEMENT is made by and between the CITY OF SAN JUAN
CAPISTRANO, a municipal corporation, hereinafter referred to as "City," and
FLUIDMASTER, INC., a California corporation, hereinafter referred to as "Developer".
WITNESSETH:
WHEREAS, Developer proposes to construct its corporate headquarters and a
manufacturing facility, hereinafter referred to as "Project," on certain real property legally
known as Parcel 2 of Parcel Map 83-861, commonly referred to as 30800 Rancho Viejo
Road, in the City of San Juan Capistrano, California; and,
WHEREAS, Developer has requested that City defer certain taxes and fees to
accommodate the Project construction; and,
WHEREAS, Developer has requested that deferment of said taxes and fees be
extended to one year after issuance of Certificate of Occupancy for the Project; and
WHEREAS, Developer will provide guarantee for payment of said taxes and fees
as set forth herein.
NOW, THEREFORE, in consideration of the premises and promises hereinafter
contained, City and Developer agree as follows:
1. Developer's Payment Obligations. Developer shall pay the following development
fees and taxes for the Project by not later than 365 days from the date that a formal
Certificate of Occupancy has been issued by City to Developer:
Sewer Capacity $158,250
CIP Water Fees $203,046
Construction Tax (.05 sq. ft.) $ 9,152
Agricultural Preservation ($1 ,000 per acre) $ 9,300
Drainage Area Fees ($860 per acre) $ 7,998
System Development Tax (1% Building Value) $ 85,531
$473,277
These fees and taxes are subject to change in the event that Developer amends its
development application upon which the above-stated fees and taxes have been
calculated.
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2. Security to Guarantee Developer's Tax and Fee Obligations. Developer may
choose from among the following security devices to guarantee performance of the
Developer's tax and fee obligation under Section 1 of this Agreement.
(a) Security Options:
(i) Letter of Credit with a major bank organized under the laws of the
State of California. The letter of credit form shall be provided to
Developer and approved by the City Attorney;
(ii) Cash bank deposit filed with a major bank authorized to do business
in California. It shall be filed in the name of the City of San Juan
Capistrano in a manner to allow immediate cash withdrawal by City
should Developer fail to perform its one-year obligation under this
Agreement.
(iii) A corporate Surety Bond drawn on a corporate surety acceptable to
the City Attorney. The bond form shall be furnished and approved by
the City Attorney.
(iv) A Certificate of Deposit approved by the City Attorney.
(b) Amount and Timing of Security:
(i) The amount of the security, regardless of which of the above-stated
options is utilized, shall be $473,277, subject to the provisions of
paragraph 1.
(ii) The security shall be posted at the time the building permits are
obtained from the City Building Department.
(c) City's Right to Call the Security:
City shall have the right to immediately call the cash security (in the case of
the letter of credit or bank deposit or other negotiable paper), or make
demand on the corporate security, upon Developer's failure to pay the
deferred taxes and fees as specified in Section 1 of this Agreement.
3. Term of Agreement. This Agreement shall remain in full force and effect until
mutually rescinded by the parties.
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4. Attorney's Fees. Developer agrees to pay City such sum as the court may adjudge
as reasonable for the legal services of an attorney representing City in an action brought
to enforce this Agreement, and such sum shall be made a part of any judgment in such
action against Developer if such action is determined in favor of City.
5. Authorized Signatures. The parties to this Agreement hereby acknowledge and
represent that the persons signing this Agreement have full legal authority to sign on
behalf of each party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of June 17,
1997, at San Juan Capistrano, California.
FLUIDMASTER, INC. CITY OF SAN JUAN CAPISTRANO
By: Robert Anderson Schoepe By: George Scarborough
Senior Vice President City Manager
ATTEST:
By: Cheryl Johnson
City Clerk
APPROVED AS TO FORM:
By: John Shaw
City Attorney
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