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19-0402_C & C DEVELOPMENT CO., LLC_F1a_Agenda Report 4/2/2019 Fla City 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 Director PREPARED BY: Laura Stokes, Housing Supervisor/ Associate Planner DATE: April 2, 2019 SUBJECT: Exclusive Negotiation Agreement Between the City of San Juan Capistrano and C&C Development Co., LLC for Potential Development of a Senior Affordable Housing Project at the City- owned Groves Property Located at the Northwest Corner of Camino Capistrano and Junipero Serra Road (Portion of Assessor Parcel Number 121-050-21) RECOMMENDATION: Approve and authorize the City Manager to execute an Exclusive Negotiation Agreement ("ENA") with C&C Development Co., LLC for potential development of a senior affordable housing project at the City-owned Groves property. EXECUTIVE SUMMARY: Prior to dissolution in 2012, the City's Redevelopment Agency contemplated development of an affordable housing project on a four-acre portion of City-owned property located at the northwest corner of Camino Capistrano and Junipero Serra Road (Attachment 1). The project site was referred to as "the Groves" since the property was once the site of an orange grove, In 2014, the City Council changed the zoning and General Pian Land Use Designation of the Groves site from Office Commercial to Very High Density Residential, and identified the site in the City's Housing Element as being able to accommodate 48 affordable housing units. Since that time, staff has been in contact with affordable housing developers that have remained interested in the site, and is recommending that the City Council enter into an Exclusive Negotiation Agreement(ENA) with C&C Development Co., LLC {C&C} to explore the possibility of developing the Groves site with up to 68 units of affordable senior housing (age 62 and oven, including City Council Agenda Report April 2, 2019 Page 2 of 5 up to ten Permanent Supportive Housing units for seniors. The proposed ENA would establish a period during which the City and C&C can assess the viability of an affordable housing project for seniors and negotiate the terms of a Disposition and Development Agreement (Attachment 2), Approval of the ENA would not hind the City in any way to a specific project or future sale of the property to C&C. D I SCID SS I ONIANALYSI S: Pursuant to state law, the Southern California Association of Governments (SCAG) is responsible for developing the Regional Housing Needs Assessment (RHNA) for the six- county SCAG region. Taking into account population projections and economic forecasts, SCAG calculates the future housing need for every city and county within its jurisdiction for a specified eight-year planning period. The calculated RHNA represents the existing and future housing need of different income groups in each city. Below is the City of San Juan Capistrano's RHNA calculated by SCAG in 2012 for the current eight-year planning period of October 2013 through October 2021: RHNA 2013-2021 Income Group Percentage of Family of Four tncomei 2013 Total ;Percentage of County Area Categories (2018) Housing Units Units Median Income Allocated Extremely/Very Low 0-50% $0-$54,650 � 147 23% Low 51-80% $54,651-$87,450 104 16% Moderate 81%-120% $87,450-$111,250 120 19% Above Moderate 120%+ $111,251 + 267 42% Total 638 100% City's Housing Element State law requires that each city plan for the existing and future housing need identified in its RHNA allocation. This is done through the Housing Element of a city's General Plan. Once a city receives its RHNA allocation from SCAG, it must amend its Housing Element to demonstrate that the projected housing needs identified in its RHNA can be accommodated for all income groups. In order to accommodate San Juan Capistrano's RHNA allocation, the City Council amended the City's Housing Element in 2014 and 2016 to identify a list of sites where the City's RHNA allocation (638 housing units) could be built (Attachment 3). The list includes four sites that could accommodate the 371 "affordable" housing units designated for Very Low, Low and Moderate income groups. As part of this effort, the City Council approved General Plan Amendments and Rezones to allow very high density residential development on the following three sites: Ventanas (which is now referred to as Tirador), the Groves and a portion of the current City Hall site. City Council Agenda Report April 2, 2019 Page 3 of 5 The Groves Site The Groves site is a 4.4-acre portion of the larger 31.48-acre City-owned Northwest Open Space property that was acquired by the City in 1990. The site is referred to as "the Groves" since the property was once the site of an orange grove. The Groves site is separated from the remainder of the City-owned property by Trabuco Creek, The site is bounded by Trabuco Creek on the north, railroad tracks on the west, Junipero Serra Road on the south and Camino Capistrano on the east. Across Camino Capistrano from the site is JSerra High School, and across Junipero Serra Road from the site is Silverado San Juan Capistrano Memory Care Community. At one time, the City's Redevelopment Agency contemplated developing the site with an affordable housing project. However, once the Agency was dissolved in 2012, the affordable housing project was not advanced. In 2014, the City Council changed the zoning and General Plan Land Use Designation of the site from Office to Very High Density Residential, and identified the site in the City's Housing Element as being able to accommodate 48 affordable housing units. Since that time, staff has maintained informal conversations with affordable housing developers regarding potential development of an affordable housing project on the site. C&C's Proposal C&C is a full-service real estate development company with more than 35 years of experience, specializing in the construction, acquisition, and management of affordable housing for families and seniors, C&C has developed, managed, and maintained ownership of over 2,200 residential units for lower income families and seniors throughout California. C&C has evaluated the Groves site and is proposing to construct a three-story, 68-unit affordable housing development project restricted to seniors age 62 and over. The three- story element is being considered for the site due to the significant change in grade between the adjoining street (Camino Capistrano) and the developable pad, which effectively results in the appearance of a two-story structure from the right-of-way. The proposal would include 72 parking spaces (which would meet the City's parking requirements), recreational amenities, and adequate setbacks from Trabuco Creek (Attachment 4). The senior-only residences are anticipated to require fewer vehicle trips; resulting in fewer traffic impacts. The 68 units are proposed to house 55 lower income households (earning between 51% - 80% of the county's median income, or $54,651 - $87,450), 12 very low income households (earning below 50% of the county's median income, or less than $54,650), and one on-site manager. Additionally, ten of the units intended for very low income households are proposed to be Permanent Supportive Housing units for seniors. C&C would work closely with the County of Orange to identify ten qualified seniors who would be eligible for the Permanent Supportive Housing units. Additionally, C&C has informed staff that tenanting of the proposed development can City Council Agenda Report April 2, 2019 Page 4 of 5 include a local preference so that San Juan Capistrano residents have a higher priority for vacancies. Based on C&C's preliminary financial analysis, the project would cost approximately $23.2 million. C&C provided the City with their anticipated financing structure, which includes approximately $7 million from tax credits, $9 million from partnership equities, $1.5 million from the County's special needs housing programs, and a $500,400 deferred developer fee. These funding sources result in an approximate $5 million gap in financing, which C&C proposes to cover using the City's housing funds. The City currently has $4.8 million of accumulated Housing In-Lieu fees, and approximately $5.9 million of Successor Agency housing bond monies. Due to the housing funds from the Successor Agency being restricted to non-senior housing until 51% has been spent on non-age restricted housing, the only City funding which could be used on this project is the $4.8 million from Housing In-Lieu fees. Proposed Exclusive Negotiation Agreement The ENA provides that the City and C&C would negotiate diligently and in good faith toward the goal of producing a mutually acceptable Disposition and Development Agreement (DDA). The proposed ENA includes the parameters for negotiations, a $25,000 deposit from C&C to cover staff and legal costs to prepare the DDA, term of the agreement, City and C&C obligations, and a milestone schedule. Staff recommends entering into an ENA with C&C development due to the quality of similar C&C developments throughout the region, the proposed product and financing structure, and the schedule proposed by the C&C development team. The City is in a unique position to advance its housing goals as there is available land, sufficient funding, and a highly qualified developer. Timely construction of the proposed project, including ten Permanent Supportive Housing units for seniors, would assist the City in meeting its RHNA requirements and the diverse housing needs of our local senior community. With that said, an action by the City Council to enter into an ENA should not be interpreted as an intent to approve such a housing project. Entering into the proposed ENA would allow staff and C&C to negotiate a DDA, and allow C&C to file the appropriate development applications. Once the applications are filed, staff would commence the required environmental review process of the proposed project for compliance with the California Environmental Quality Act (CEQA), and conduct a project review with the Design Review Committee and Planning Commission. The Planning Commission's recommendation on the matter would be presented to the City Council for a final decision. FISCAL IMPACT: Approval of the ENA would have no fiscal impact to the City. All expenses during the term of this ENA for consultants and other professional planning/engineering services, as well as any costs associated with CEQA documentation, Would be the sole responsibility of City Council Agenda Report April 2, 2019 Page 5 of 5 the applicant. C&C would also provide a $25,000 deposit to cover initial staff and City Attorney costs. ENVIRONMENTAL REVIEW: In accordance with the California Environmental Quality Act (CEQA) the recommended action is exempt from CEQA per Section 15061(b)(3), the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Should the development project move forward for discretionary actions, the appropriate documentation will be provided consistent with CEQA Guidelines. PRIOR CITY COUNCIL REVIEW: On January 21, 2014, the City Council changed the zoning and General Plan Land Use Designation of the Grove's site from Office to Very High Density residential, and identified the site in the City's Housing Element as being able to accommodate 48 affordable housing units. COMM ISSIONICOMMITTEEIBOARD REVIEW AND RECOMMENDATIONS: Not Applicable. NOTIFICATION,- • C&C Development Co., LLC • Jamboree Housing • Families Forward • Habitat for Humanity • National CORE • Community Development Partners • AMCAL Multi-Housing, Inc. • The Olson Company ■ Bridge Housing Corp • Love Funding • Veioce Partners Inc. • Meta Housing Corporation • Payne Development • Palm Communities • Irvine Housing Opportunities • Eden Housing • Mercy Housing • JSerra High School • Silverado Senior Living ATTACHMENT: Attachment 1 — Site Map Attachment 2 — Exclusive Negotiation Agreement Attachment 3 — Housing Opportunity Sites Attachment 4 — C&C Proposed Site Plan Site Maps Aerial- i f � i M `. 4 r jp � r Page 1 ATTACHMENT 1 Zoning- s. ti w oC it .s �t .1� 41 in VHG e.� '► � y� � - _ ;w�it ■�...� ►�. .11 ► r- . '� ..a•-- � . •S• til p P&I ' 3 M ' Page 2 Land Use- r c(3) UNIFY paRK t. DFFICE;'I�ESEARCH VE H,GH DEN IT' Y` �r 5 IEIGGH50RHOOD COMIMERCIAL to lI+1► r _ -• . r - GPE ERAL C-OMMERC--IAL ASSINED CAF7fRAG ILITIES [ 1•'1 Wi .i •.AJUNED CDMMUNITY Page 3 THE CITY OF SAN JUAN CAPISTRANO EXCLUSIVE NEGOTIATION AGREEMENT (The Groves at Williams Ranch) THIS EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is dated as of , 2019, for reference purposes only, and is entered into by and between the City of San Juan Capistrano, a public body corporate and politic ("City") and C & C Development Co., LLC, a California limited liability company, and The Waterford Group, Inc., a California corporation (collectively,"Developer"),to provide a specified period of time to attempt to negotiate a disposition and development agreement. The City and the Developer are sometimes referred to in this Agreement individually, as a "Parry' and, collectively, as the "Parties." This Agreement is entered into by the Parties with reference to the following recited facts(each, a"Recital'): RECITALS A. The City is the owner of that certain real property located at the northeast corner of Camino Capistrano and Ainipero Serra Road, San Juan Capistrano (APN 121-050-21) and more specifically described in Exhibit A("Property");and a. The City has unmet goals for law income 110USing units under its current Housing Element and regional housing needs assessment goals for the 2014-2021 planning.period. C. Approximately 2 to 2-'/z acres of the approximately 20 acres of the Property are developable.The City has an interest in developing the developable portion of the Property("Developable Property")for affordable housing and accepted development proposals from interested developers;and D. The Developer has proposed the redevelopment of the Developable Property with a high quality senior multi-family affordable rental complex of approximately 50-68 units and related improvements, which maximize the available parking that can be accommodated on the triangular parcel and retain the existing parking dedicated to the adjacent assisted living facility, as generally depicted in the conceptual site plan attached to this Agreement as Exhibit `B" and incorporated into this Agreement by this reference("Project"); and E. The intent of both the City and the Developer in entering into this Agreement is to establish a specific, limited period of time to negotiate regarding a future agreement between them governing the potential acquisition of the Developable Property and development of the Project on the Developable Property, all subject to mutually agreeable terms, conditions, covenants, restrictions and agreements to be negotiated and documented a future disposition and development agreement("DDA"). NOW, THEREFORE, IN VIEW OF THE GOALS AND OBJECTIVES OF THE CITY RELATING TO T13E SALE AND DEVELOPMENT OF THE DEVELOPABLE PROPERTY AND THE PROMISES OF THE CITY AND THE DEVELOPER SET FORTH IN THIS AGREEMENT,THE CITY AND THE DEVELOPER AGREE,AS FOLLOWS: 1. Incorporation of Recitals. The Recitals of fact set forth above are true and correct and are incorporated into this Agreement, in their entirety, by this reference. 2_ Deposits. Concurrent with the Developer's execution of this Agreement, the Developer shall provide to the City a single deposit in the amount of Twenty-Five Thousand Dollars ($25,000) in 1603\01\2553627.2 i ATTACHMENT 2 immediately available funds("Deposit")to ensure that the Developer will proceed diligently and in good faith to fulfill its obligations under this Agreement during the Negotiation Period (as defined in Section 3(a)), as part of the consideration for the City's agreement not to negotiate with other persons during the Negotiation Period, and to defray some if not all of the legal costs of the City in pursuing the contemplated negotiations with the Developer during the Negotiation Period, pursuant to this Agreement. The City shall charge attorney fees associated with review and implementation of this Agreement or preparation of the DDA) against the Deposit. The City shall provide monthly accountings to the Developer as to the amount of legal fees paid from the Deposit. The Developer will not be required to deposit additional funds beyond the initial Deposit even if the City's total legal fees exceed the amount of the Deposit. At the termination of this Agreement, any remaining funds shall, at the Developer's option, either be applied to the purchase price or returned to the Developer. Developer acknowledges that the Deposit shall be in addition to those fees and expenses required by the City for any permit,other required entitlement or project processing. A portion of the Initial Deposit in an amount equal to One Hundred Dollars ($100) shall immediately become non-refundable upon Developer's transfer of the Initial Deposit to the City under this Agreement as consideration for the City's agreement not to negotiate with other persons during the Negotiation Period. 3. Term of Agreement. (a) The rights and duties of the City and the Developer established by this Agreement shall commence on the first date on which all of the following have occurred (the "Effective Date"): (1)execution of this Agreement by the authorized representative(s)of the Developer and delivery of such executed Agreement to the City, (2) payment of the Deposit to the City by the Developer, in accordance with Section 2, (3) approval of this Agreement by the City governing body and execution of this Agreement by the authorized representative(s) of the City and (4) delivery of such fully executed Agreement to the Developer, the exact date of which shall be mutually agreed to by the Parties promptly after Developer's receipt of the fully executed Agreement from the City as evidenced in writing signed by their respective authorized representatives. The City shall deliver a fully executed counterpart original of this Agreement to the Developer, within ten (10) calendar days following the City governing body's approval of this Agreement, if approved, and the execution of this Agreement by the authorized representative(s) of the City. This Agreement shall continue in effect for the period of two hundred forty (240)consecutive calendar days immediately following the Effective Date("Negotiation Period"), subject to the limitations of Section 3(b). (b) The Negotiation Period may be extended upon the mutual written agreement of the City's City Manager and the Developer for no more than two (2) additional consecutive ninety (90) calendar day periods. Notwithstanding the immediately preceding sentence or any other part of this Agreement, in no event shall the Negotiation Period exceed four hundred twenty (420) consecutive calendar days from the Effective Date; provided however, that the City Manager may extend the Negotiation Period for any additional time as necessary for the sole purpose of completing any necessary process and review under the California Environmental Quality Act. (c) This Agreement shall automatically expire and be of no further force or effect at the end of the Negotiation Period, unless, prior to that time, both the City and the Developer-approve and execute a DDA acceptable to bath the City and the Developer, in their respective sole and absolute discretion, in which case this Agreement will terminate on the effective date of such DDA. 4, Obligations of Developer. During the Negotiation Period, and pursuant to the attached Milestone Schedule (Exhibit C), Developer shall proceed diligently and in good faith to develop and present to City staff and, subsequently,to the City governing body,for review, all of the following: MOM]%2553627.2 (a) Developer shall pay for an appraisal to determine the flair market value of the Developable Property by an appraiser mutually acceptable to the Developer and the City; (b) A proposed complete conceptual development plan for the Project on the Developable Property that describes and depicts; (1) the location and placement of proposed buildings and(2)the architecture and elevations of the proposed buildings; (c) A proposed time schedule for the development of the Project on the Developable Property;and (d) A proposed financing plan identifying financing sources and cost estimates for the Project. S. Obligations of City. During the Negotiation Period, and pursuant to the attached Milestone Schedule (Exhibit C), City shall proceed diligently and in good faith complete all of the following: (a) Deliver to the Developer all records and documents in the City's possession that related to the Property; ('b) Prepare fee estimates based on Developer's conceptual development plan for Development Impact Fees,Planning Entitlement Processing Fees, and Building Permit Fees; and (c) Initiate the preparation of a Lot Line Adjustment to create the parcel of the Developable Property for the Project. 6, Negotiation of DDA. (a) During the Negotiation Period, the City and the Developer shall proceed diligently and in goad faith to negotiate a DDA between them. The City and the Developer shall generally cooperate with each other and supply such available documents and information as may be reasonably requested by the other to facilitate the conduct of the negotiations. Both the City and the Developer shall exercise commercially reasonable efforts to complete discussions relating to the terms and conditions of a DDA and such other matters, as may be mutually acceptable to both the City and the Developer, in their respective sole discretion. The exact terms and conditions of a DDA, if any, shall be determined during the course of these negotiations. Nothing; in this Agreement shall be interpreted or construed to be a representation or agreement by either the City or the Developer that a mutually acceptable DDA will be produced from negotiations under this Agreement. Nothing in this Agreement shall impose any obligation on either Party to agree to a definitive DDA in the future. Nothing in this Agreement shall be interpreted or construed to be a guaranty, warranty or representation that any proposed DDA that may be negotiated by City staff and the Developer will be approved by the City governing body. The Developer acknowledges and agrees that the City's consideration of any DDA is subject to the sole and absolute discretion of the City governing body and all legally required public hearings,public meetings, notices,factual findings and other determinations required by law. (b) Based upon Developer's proposal the Parties have come to a tentative agreement on the following terms, subject to future negotiation during the Negotiation Period: (i) Developer shall purchase the Developable Property from the City for fair market value as determined by the appraisal to be prepared pursuant to Section 4(a). 3 1W;IU V553627.2 (ii) The City shall prepare and fully process a Lot Line Adjustment to form the parcel for the Developable Property and the City shall retain approximately 17-`/s to 18_acres of undevelopable land that is part of the Property. The City shall record the Lot Line Adjustment prior to any closing on the Developable Property with the Developer. (iii) City shall take back a residual receipts loan in the amount of the fair market value of the Developable Property for(lie purchase of the Developable Property and shall provide a residual receipts loan in the amount of the impact fees for the Project as well as for development costs for the Project in an amount to be determined by the City and the Developer during the Negotiation Period, 7. Restrictions Against Change in Ownership, Management and Control of Developer and Assignment of Agreement. (a) The qualifications and identity of the Developer and its principals are of particular concern to the City. It is because of these qualifications and identity that the City has entered into this Agreement with the Developer. During the Negotiation Period, no voluntary or involuntary successor-in-interest of the Developer shall acquire any rights or powers under this Agreement, except as provided in Section 7(c). (b) The Developer shall promptly notify the City in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in Control (as defined in Section 7(d)) of the Developer, as well as any and all changes in the interest or the degree of Control of the Developer by any such person, of which information the Developer or any of its shareholders, partners, members, directors, managers or officers are notified or may otherwise have knowledge or information. Upon the occurrence of any significant or material change, whether voluntary or involuntary, in ownership, management or Control of the Developer (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the City, prior to the time of such change,the City may terminate this Agreement, without liability to the Developer or any other person and refund any remaining Deposit funds provided by the Developer to the pursuant to Section 2, above, by sending written notice of termination to the Developer, referencing this Section 77(b). (c) The Developer may assign its rights under this Agreement to an Affiliate (as defined in Section 7(d)), on the condition that such Affiliate expressly assumes all of the obligations of the Developer under this Agreement in a writing reasonably satisfactory to the City, and further provided that C & C Development Co., LLC, a California limited liability company, and The Waterford Group, Inc., a California corporation (or their Affiliate),together with a nonprofit partner or its Affiliate„Control any such Affiliate. 'rhe City acknowledges that the entity to develop the Property will be in the form of a limited partnership in which an Affiliate of C & C Development Co., LLC, a California limited liability company, and The Waterford Group, Inc., a California corporation, will serve as a general partner and an Affiliate of a nonprofit corporation will serve as the managing general partner (the "Partnership"). The Developer may assign it rights under this Agreement or under the DDA to the Partnership without the consent of the City provided that the Partnership expressly assumes all of the obligations of the Developer under this Agreement in a writing reasonably satisfactory to the City (d) For the purposes of this Agreement, the terra "Affiliate" means any person, directly or indirectly, controlling or controlled by or under common control with the Developer, whether by direct or indirect ownership of equity interests, by contract, or otherwise. For the purposes of this agreement, "Control" means possession, directly or indirectly, of the power to direct or cause the 4 I&MOV-7553627.2 direction of the management and policies of an entity, whether by ownership of equity interests, by contract_or otherwise. 8. Obligations to Review Draft Agreements and Attend Meetings. (a) During the Negotiation Period, each Parry shall diligently review and comment on draft versions of a DDA provided by the other Party and, if the terms and conditions ot'such a DDA are agreed upon between City staff and the Developer, the Developer shall submit the DDA fully executed by the authorized representative(s) of the Developer to the City/Manager for submission to the City governing,body for review and approval or disapproval. Any future DDA shall consist of terms and conditions acceptable to both the Developer and the City governing body, in their respective sole and absolute discretion. (b) During the Negotiation Period, the Developer shall also keep City staff advised on the progress of the Developer in performing its obligations under this Agreement, on a regular basis or as requested by City staff, including, without limitation, having one or more of the Developer's employees or consultants who are knowledgeable regarding this Agreement, the design and planning of the Project and the progress of negotiation of a DDA, such that such person(s) can meaningfully respond to City and/or City staff questions regarding the progress of the design and planning of the Project or the negotiation of a DDA, attend both: (1) periodic meetings with City staff, as reasonably scheduled and requested by City staff during the Negotiation Period, and (2) meetings of the City governing body, when reasonably requested to do so by City staff. 9. Developer to Pay All Costs and Expenses. All fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by the Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Developable Property or the Project or negotiation of a DDA that may be undertaken by the Developer during the Negotiation Period, pursuant to or in reliance upon this Agreement or in the Developer's discretion, regarding any matter relating to a DDA, the Developable Property or the Project, shall be the sole responsibility of and undertaken at the sole cost and expense of the Developer and no such activity or matter shall be deemed to be undertaken for the benefit of, at the expense of or in reliance upon the City. The Developer shall also pay all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the City and/or the City of any and all applications and other documents and information to be submitted to the City and/or the City by the Developer pursuant to this Agreement or otherwise associated with the Project. The City shall not be obligated to pay or reimburse any expenses, fees, charges or costs incurred by the Developer in pursuit of any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Developable Property or the Project or negotiation of DDA that may be undertaken by the Developer during the Negotiation Period, whether or not this Agreement is, eventually, terminated or extended or a DDA is entered into between the City and the Developer, in the future. 10. City Not To Negotiate With Others. During the Negotiation Period, the City and City staff shall not negotiate with any other person regarding the sale or redevelopment of the Developable Property. The term "negotiate," as used in this Agreement, means and refers to engaging in any discussions with a person other than the Developer, regardless of how initiated, with respect to the availability of the Developable Property or that person's redevelopment of the Developable Property, without the Developer's prior written consent. Developer acknowledges that City may receive and retain unsolicited offers regarding redevelopment of the Developable Properly, but shall not entertain any offer or negotiate with the proponent of any such offer during the Negotiation Period; provided, however, that 5 160310112553627.2 the City may notify such proponent that it is a party to this Agreement . Developer acknowledges that the City is a public agency and subject to the provisions of the California Public Records Act, Government Code Section 6254, et. seq. (the "Act"). The City shall use its best efforts to inform Developer of any request for information received pursuant to the Act. if Developer believes the information requested is confidential, Developer may pursuant a court order preventing the release of the requested information. 11. Acknowledgments and Reservations. (a) The City and the Developer agree that, if this Agreement expires or is terminated for any reason, or a future DDA is not approved and executed by both the City and the Developer, for any reason, neither the City nor the Developer shall be under any obligation, nor have any liability to each other or any other person regarding the sale or other disposition of the Developable Property or the redevelopment of the Project or the Developable Property; provided, however, that in the event this Agreement terminates, the City shall return to the Developer within ten (10) business days of such termination any and all Deposits due to be refunded pursuant to Section 2 of this Agreement, (b) The Developer acknowledges and agrees that no provision of this Agreement shall be deemed to be an offer by the City, nor an acceptance by the City of any offer or proposal from the Developer for the City to convey any estate or interest in the Developable Property to the Developer or for the City to provide any financial or other assistance to the Developer for redevelopment of the Project or the Developable Property. (c) The Developer acknowledges and agrees that the Developer has not acquired,nor wit[ acquire, by virtue of the terms of this Agreement, any legal or equitable interest in real or personal property from the City. (d) Certain development standards and design controls for the Project may be established between the Developer and the City, but it is understood and agreed between the City and the Developer that the Project and the redevelopment of the Developable Property must conform to all City, City and other applicable governmental development, land use and architectural regulations and standards. Drawings, plans and specifications for the Project shall be subject to the approval of the City through the standard development application process for projects of this nature. Nothing in this Agreement shall be considered approval of any plans or specifications for the Project or of the Project itself by the City. (e) The City reserves the right to reasonably obtain further available information and data to ascertain the ability and capacity of the Developer to acquire or lease, develop and operate the Developable Property and/or the Project. The Developer acknowledges that it may be requested to make certain financial disclosures to the City, its staff, legal counsel or other consultants, as part of the Financial due diligence investigations of the City relating to the potential sale of the Developable Property and redevelopment of the Project on the Developable Property by the Developer and that any such disclosures may become public records. The City shall maintain the confidentiality of financial information of the Developer to the extent allowed by law, as determined by the City Attorney. 12. Nondiscrimination. The Developer shall not discriminate against nor segregate any person, or group of persons on account of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry in undertaking its obligations under this Agreement. 6 1603\01\2553627.2 13. Limitation on Damages and Remedies. (a) THE DEVELOPER AND THE CITY ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY THE DEVELOPER UPON THE BREACH OF THIS AGREEMENT BY THE CITY, HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL DAMAGES THE DEVELOPER WOULD SUFFER UPON THE BREAC14 OF THIS AGREEMENT BY THE CITY, THE DEVELOPER AND THE CITY AGREE THAT A REASONABLE ESTIMATE OF THE DEVELOPER'S DAMAGES IN SUCH EVENT IS TWENTY-FIVE THOUSAND DOLLARS ($25,000) (THE "LIQUIDATED DAMAGES AMOUNT"), THEREFORE, UPON THE BREACH OF THIS AGREEMENT BY THE CITY, THE CITY SHALL PAY THE LIQUIDATED DAMAGES AMOUNT TO THE DEVELOPER AND THIS AGREEMENT SHALL TERMINATE, RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL BE THE DEVELOPER'S SOLE AND EXCLUSIVE REMEDY ARISING FROM ANY BREACH OF THIS AGREEMENT BY THE CITY. Initials of Authorized Initials of Authorized Representative of City Representative of Developer (b) THE CITY AND THE DEVELOPER EACH ACKNOWLEDGE AND AGREE THAT THE CITY WOULD NOT HAVE ENTERED INTO THIS AGREEMENT, IF IT WERE TO BE LIABLE TO THE DEVELOPER FOR ANY MONETARY DAMAGES, MONETARY RECOVERY OR ANY REMEDY OTHER THAN TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE LIQUIDATED DAMAGES AMOUNT. ACCORDINGLY, THE CITY AND THE DEVELOPER AGREE THAT THE DEVELOPER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY UPON THE BREACH OF THIS AGREEMENT BY THE CITY IS TO TERMINATE THIS AGREEMENT AND RECEIVE THE LIQUIDATED DAMAGES AMOUNT. (c) THE DEVELOPER ACKNOWLEDGES THAT IT IS AWARE OF THE MEANING AND LEGAL EFFECT OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. (d) CALIFORNIA CIVIL CODE SECTION 1542 NOTWITHSTANDING, IT IS THE INTENTION OF THE DEVELOPER TO BE BOUND BY THE LIMITATION ON DAMAGES, RECOVERY AND REMEDIES SE'T FORTH IN THIS SECTION 13, AND THE DEVELOPER HEREBY RELEASES ANY AND ALL CLAIMS AGAINST THE CITY FOR MONETARY DAMAGES, MONETARY RECOVERY OR OTHER LEGAL OR EQUITABLE RELIEF RELATED TO ANY BREACH OF THIS AGREEMENT, EXCEPT RECEIPT OF THELIQUIDATED DAMAGES AMOUNT, WHETHER OR NOT ANY SUCH RELEASED CLAIMS WERE KNOWN OR UNKNOWN TO THE DEVELOPER AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. THE DEVELOPER SPECIFICALLY WAIVES THE BENEFITS OF CALIFORNIA CIVIL CODE SECTION 1542 AND ALL OTHER STATUTES AND JUDICIAL DECISIONS (WHETHER STATE OR FEDERAL) OF SIMILAR EFFECT WITH REGARD TO THE LIMITATIONS ON DAMAGES AND 7 1603101 USS3627.? REEMEDIES AND WAIVERS DP ANY SUCH DAMAGES AND REMEDIES CONTAINED IN THIS SECTION 13. Initials of Authorized Initials of Authorized Representative of City Representative of Developer 14. Default. (a) Failure or delay by either Party to perform any material term or provision of this Agreement shall constitute a default under this Agreement. If(lie Party who is receives notice of a default from the other Party cures, corrects or remedies the alleged default within fifteen (15) calendar days after receipt of written notice by the other Parry specifying such default, such Party shall not be in default under this Agreement. The notice and cure period provided in the immediately preceding sentence shall not, tinder any circumstances, extend the Negotiation Period. If there are less than fifteen (15) days remaining in the Negotiation Period, the cure period allowed pursuant to this Section 14(a) shall be automatically reduced to the number of days remaining in the Negotiation Period. (b) The Party claiming that a default has occurred shall give written notice of default to the Party claimed to be in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. However,the injured Party shall have no right to exercise any remedy for a default under this Agreement, without first delivering written notice of the default and allowing the applicable period to cure any such default as set forth in Section 14(a). (c) Any failure or delay by a Party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. (d) If a default of either Party remains uncured for more than fifteen (15) calendar days following receipt of written notice of such default, a "breach" of this Agreement by the defaulting Party shall be deemed to have occurred. In the event of a breach of this Agreement, the sole and exclusive remedy of the Party who is not in default shall be to terminate this Agreement by serving written notice of termination on the Party in breach and, in the case of a breach by the City,the Developer shall also be entitled to receive the Liquidated Damages Amount. 15. Compliance with Law. The Developer acknowledges that any future DDA, if approved by the governing body of the City, will require the Developer (among other things) to carry out the development of the Project in conformity with all applicable laws, including all applicable building, planning and zoning laws,environmental laws, safety laws and federal and state labor and wage laws. 16. Press Releases. The Developer agrees to obtain the approval of the City Manager or his or her designee or successor in function of any press releases Developer may propose relating to the lease or redevelopment:of the Developable Property or negotiation of a DDA with the City, prior to publication. The rights and obligations in this provision shall not apply to leasing and marketing brochures and/or information distributed by email or placed online on a brokerage website or real estate website such as LoopNet.com. 17. Notice. All notices required under this Agreement shall be presented in person, by nationally recognized overnight deliveryservice or by facsimile and confirmed by first class certified or registered United Slates Mail, with return receipt requested, to the address for the Party set forth in this Section 17. Notice shall be deemed confirmed by United States Mail effective the third (3rd) business 8 16031D 112553627.2 day after deposit with the United States Postal Service. Notice by personal service or nationally recognized overnight delivery service shall be effective upon delivery. Either Party may change its address for receipt of notices by notifying the other Party in writing. Delivery of notices to courtesy copy recipients shall not be required for valid notice to a Party. TO DEVELOPER: C_&C Development Co_. LLC 14211 Yorba Street,Suite 200 Tustin California 92780 Atte; Todd R. Cottle AND The Waterford Group PO Box 10175 Newport Beach,CA 92658 Attn: Sean Rawson COPY TO Goldfarb& Lipman LLP 1300_Clair Street, I l th Floor Oakland CA 94612 Attn: Lynn Hutchins TO CITY: City of San Juan CaDistrana 32400 Paseo Adelanto San Juan Capistrano,CA 92675 Attu: City Manager 18. Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section 8, shall not include persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects, brokers and other consultants, when such fees are considered necessary by the Developer. 19. Acceptance of Agreement by Developer. The Developer shall acknowledge its acceptance of this Agreement by delivering to the City three (3) original counterpart executed copies of this Agreement signed by the authorized representative(s)of the Developer, 20. Counterpart Originals. This Agreement may be executed by the City and the Developer in multiple counterpart originals, all of which together shall constitute a single agreement. 21. No Third-Party Beneficiaries. ]Nothing in this Agreement is intended to benefit any person or entity other than the City or the Developer. 22. Governing Law. The City and the Developer acknowledge and agree that this Agreement was negotiated, entered into and is to be fully performed in the City of San Juan Capistrano, California. The City and the Developer agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California, without application of such laws' conflicts of laws principles. 9 150310 055307 2 23. Waivers. No waiver of any breach of any term or condition contained in this Agreement shall be deemed a waiver of any preceding or succeeding breach of such term or condition,or of any other term or condition contained in this Agreement. No extension of the time for performance of any obligation or act, no waiver of any teen or condition of this Agreement, nor any modification of this Agreement shall be enforceable against the City or the Developer, unless made in writing and executed by both the City and the Developer. 24. Construction. Headings at the beginning of each section and sub-section of this Agreement are solely for the convenience of reference of the City and the Developer and are not a part of this Agreement. Whenever required by the context of this Agreement,the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one or the other of the City or the Developer,but rather as if both the City and the Developer prepared this Agreement. Unless otherwise indicated, all references to sections are to this Agreement. All exhibits referred to in this Agreement are attached to this Agreement and incorporated into this Agreement by this reference. If the date on which the City or the Developer is required to take any action pursuant to the terms of this Agreement is not a business day of the City, the action shall be taken on the next succeeding business day of the City. 24. Attorneys' Fees. If either Party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, then the prevailing Party shall be entitled to recover as an element of its costs of suit,and not as damages, its reasonable attorneys' fees as fixed by the court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees" mean and include, in the case of either Party, salaries and expenses of the lawyers working for or employed by such Party (allocated on an hourly basis) to the extent they provide legal services to such Party in connection with the representation of that Party in any such matter. [Signatures on Following page] 10 16033\0112553627,2 THE CITY OF SAN JUAN CAPISTRANO EXCLUSIVE NEGOTIATION AGREEMENT (The Groves at Williams Ranch) IN WITNESS WHEREOF, the City and the Developer have executed this Negotiation Agreement on the dates indicated next to each of the signatures of their authorized representatives, as appear below. DEVELOPER: C&C Development Co.,LLC,a California limited liahil' parry f - Dazed: 312 "� I I G. r__- By: _ Todd R.Cottle,Trustee of the 2007 Todd R. Cattle and Jennifer N.Cottle Revocable Tru_ Dated: '?z 17 '� I ei I3arry A.Cottle,Trustee of-The Cottle Family Trust Dated 31$11987 THE WATERFORD GROUP,I\'C..a California c o r pra'wn By. - Dated: Z I l� Sea ', son, President CITY: THE CITY OF SAKI JUAN C- PISTR_ANO Dated: ATTEST: 6y: City Clerk APPROVED AS TO FORM: BEST BEST& KRIEGER, LLP By. City Attorney ll 16030 1 125 53627 2 EXHIBIT"A" TO NEGOTIATION AGREEMENT Property Ix g� I Description Exhibit A Page 1 16001\553627.2 EX141BIT"B" To NEGOTIATION AGREEMENT Project Site Plan [To lie Attached Behind This Cover Page] Exhibit S Page 1 1603\01\2553627.2 PROJECT SUMMARY 4HMy"9 1MA 46 IS:Y sspsi 7.w.w.va.-as awl+glw sY5/w. i�iC �� r , L , fZ ®F' Dm4opm¢rn IDEArc ,-. ARCHITECTURAL SITE PLAN Exhibit B Page 2 1603\012553627.2 EXHIBIT C MILESTONE SCHEDULE Exclusive Negotiating Agreement Timeline MILESTONEDESCRIPTION Within 30 Days of Effective Date of ENA Initial Pro Forma Submit initial pro forma forth e proposed project. Project Development Submit projected development schedule for the proposed project. Schedule Due Diligence City to provide all documents and records it has related to the Property.- Within 60 Days of Effective Date of ENA Conceptual Development Developer submits complete conceptual development plan for the Project on the Plan Submittal Developable Property that describes and depicts: (1)the location and placement of proposed buildings and (2) the architecture and elevations of the proposed buildings. Within 90 Days of Effective Date of ENA City to prepare fee estimates based on Developer's conceptual development plan for Fee Estimates Development Impact Fees, Planning Entitlement Processing Fees, and Building Permit Fees based on conceptual development plan Appraisal Developer to contract for and submit appraisal of fair market value of Developable Property. Within_120 Days of Effective Date of ENA `Revised Proforma and Submit refined proforma and development schedule based on City's estimated fees. Development Schedule Lot Line Adjustment City to initiate processing for the Lot line Adjustment. Within 210 Days of Effective Date of ENA Draft DDA Complete negotiations and draft Disposition and Development Agreement. Final Revisions Finalize revisions to development proposal and all relevant materials Within 240 Days of Effective Date of ENA City Council Hearing Present development proposal and DDA to City Council for final review and approval. Exhibit C Page 1 16031[}Q553G27.2 Exhibit C Page 2 150310112553527.2 Sites Inventory Table 25 below indicates that the 2014-2021 RHNA can be accommodated based on the current availability of vacant and underutilized land. Table 25 Sites Inventoy Table Realistic Capacity by RHNA AffordabilityLeval Size/ Very Above Environments General Allowed Low Low Moderate Moderate or Plan/ Maximum [0-50% [51-80% (81-120°k (12041.+of Infrastructure Site Name Zoning Densi of AMI* of AMI) of AMI AMI) Total Constraints 10.2 ac Medium Low DensitylRS- 3.5 units 1:The Oaks 10,000 per acre — - 32 32 No 1.89 acres Medium High 2; Calle Density/ RS- 8 units per Lorenzo 4,000 acre - 12 12 No Planned CommJPlann ed 0.35 ac Comm. {CDP 3:C. Romer 78-1 -Very 30 units Homestead Hi0h Density) r acre 8 - — — 8 No No.- constrained portion of the site is 2 acres not included Very High in the 4: The Density/ Very 30 units capacity Groves High Density per acre 48 — — 48 calculation Planned Comm.){CDP 78-01- Mixed 9 acres Use & Very 5: High 30 units Ventanas* Densit er acre 230 -- 230 No 21.5 acres Low Density) Hillside 3.5 units 6: Oliva Residential per acre — 40 40 No 1.8 acres Medium High 7:The Cove Densityl RS- 8 units per Estates 4,000 acre — 4 4 No San Juan Capistrano Housing Element 58 ATTACHMENT 3 Table 25 Sites Inventory Table Realistic Capacity by'REINA Affordabil- level Size/ Very Above Environmental General Allowed Low Low Moderate Moderate or Plant Maximum (0-50% (51.80% (81-120% (120%+of Infrastructure Site Dame Zoning Density of AMI)* of AMI) of AMI AME Total Constraints 257 acres Planned 8: Pacifica Comm./ CDP 3.7 units San Juan*" 81-01 per acre 39 282 3211 1 Yes 2.10 acres 9: Don Juan Medium High Duplex Density/ S units per Property MRD-4,040 acre -- - 8 8 Yes 3 acres 10: Hidden Medium Low Creek Density/ RS- 3.5 units Estates 10,000 per acre - - - 8 8 Yes 2-52 acres Very High Density/ Very 30 units ll-. CftyHall KghDensi!y per acre 61 61 No 311.36 Total acres 347 - 39 386 772 Notes: Housing Element law allows focal governments to utilize"default"density standards determined by HCD.Per HCD's determination,cities in Orange County(including San Juan Capislranoy with sites allowing a density of at least 30 dwelling units per acre can be used to meet lower-income RHNA requirements "Calculations of realistic capacity assume that properties will achieve a density that is 80 percent of the maximum allowed density with the exception of the Ventenas site(Site 5).For Site 5,realistic capacity calculations use a slightly higher percent(85 percent) of the maximum allowed density based on recent deveioper interest in the site. Discussions with potential developers indicate that realistic capacity for the site is closer to 83 percent of maximum allowed density(in excess of 258 units). Affordability of units for the Pacific San Juan site is based on the Planned Community zoning 7.4 acres for a multi-family development proposing 10.5 dulac and able to accommodate Moderate Income housing based on affordability levels presented in the General Plan Housing Element- *Sites#6-10 were previously included in the 2008 Housing Element. Site Details Site i— The Oaks(APN:664-041-091-101--12) This site is a 14.2 acre on the edge of the City's eastern border and south of Ortega Highway.The current use on the site is an equestrian stable.A residential development would be a more efficient use of the site and given the potential units that can be built, may be a financial incentive for the current owners to redevelop.There is a pending development proposal on this site for 32 units with RS-10,400 zoning. San Juan Capistrano Housing Element 59 Site 2—Calle Lorenzo(APN:649-052-08& 649-053-13) This site is a 1.89 acre lot east of Camino Capistrano and south of Junipero Serra Road. It contains the potential for a total of 12 units in RS-4,000 zoning. The current use on the site is one single family unit. The site is zoned to permit a larger capacity, and over the last year the site been investigated for development. No applications for development have been received to date. Given the potential units that can be built, redevelopment to the sites full potential is expected. Site 3— C. Romer Homestead(APN: 666-241-12) This site is a 0.35 acre lot east of Rancho Viejo Road and south of Ortega Highway. It contains the potential for a total of 8 units at densities that can accommodate affordable housing. The site is zoned to permit a larger capacity, and over the last year the site been investigated for development. No applications for development have been received to date. Given the potential units that can be Built, redevelopment to the sites full potential is expected. Site 4— ;rhe Groves(APN: 121-050-21) This 2.0 acre vacant site is located on the northwest corner of Camino Capistrano and Junipero Serra Road. The site has a potential development capacity for 48 units at densities that can accommodate affordable housing. Environmental constraints that would have limited development have already been accounted for in the site analysis. With the required 75 foot set back from the creek as part of the Resource Agency permitting requirements and the full right-of-way for Camino Capistrano, the site provides two net useable acres. Only 2 acres are used to calculate realistic capacity. Site 5-- Ventanes fAPN: 666-131-091-131-15) This 9 acre vacant site located east of Interstate 5 and north of San Juan Creek, has been identified as a potential site for housing development due to access to transit. schools, etc. The site additionally has a potential for mixed use. The site has a potential development capacity for 230 units.The realistic capacity of 230 units is supported by a recent developer analysis which determined that 253 units could be accommodated on the site with a mixed use element. For the purposes of this site inventory, capacity for the Ventanas site is based solely on the portion of the site allowing Very High Density residential and does not include portions of the site allowing commercial development. Sites 6— 10 Opportunities far moderate or above moderate income housing are available on sites 96 -#10. These five sites were previously included in the 2008 Housing [dement, have appropriate zoning in place and have not been developed. Site#6. Oliva, has the potential for 40 low-density units on 3.5 acres. Site#7, The Cove Estates (referred to as Village Alipaz in the 2008 Housing Element), has the capacity for 4 units in 1.8 acres zoned RS-4,000. Affordability of units for the Pacific San Juan site (Site #8) is based on the Planned Community zoning 7.4 acres for a multi-family development proposing 10.5 du/ac and able to accommodate moderate income housing based on affordability levels presented in the Housing Element. Site # 9, the Don Juan Duplexes property, is located at the terminus of Andres Pico west of Interstate 5. The site has the potential development of 8 units on a total of 2.1 acres in MRD-4000 zoning. Site # 10, Hidden Creek Estates, is located west of Camino Capistrano and has the potential for the development of 8 units on a total of 3.0 acres in RS-10,000 zoning. Site 11;City Hall(APN: 668-101-10) Site 11 is zoned for high density residential development and currently houses City Hall and a Public Works & Utility Department equipment storage building. The site has a capacity for 61 units at densities appropriate to accommodate lower-income housing The site is owned by the City of San Juan Sari Juan Capistrano Housing Element 0I 1 s ,f F T '1 Loll r. !� / ! IrA I Ile �r A F 'r�ry,�:i r+•7�ir if r+r ��f!1sr}r) Fc3•I 1t f1C7 JUAN ■ \ . . �µ" ` ARCHITECTURAL SkTE PLAN ` OR CSC Development 2. SITE PLAN & ELEVATIONS i� �- tiK �• y• f•' .�� ke, } ._ C C cc cc C C cc cc CAr w Lk LEF -.M61 C r Development ® WAT ER FO R D 1 13