1994-0118_CAPITAL FINANCIAL CONSULTANTS_Completion AgreementOctober 13, 1995
MARBELLA +
WOPERTY ONX'�ERS ASSOCOFION
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City Of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
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RE: Marbella Property Owners Association / y
Marbella Crest Development
Dear Sirs:
This letter is in regard to the Marbella Crest sub -association
currently being developed within the Marbella Property Owners
Association. Marbella is requesting that the City of San Juan
Capistrano notify all Marbella members of any actions relative to
the Marbella Crest developments and in particular, any bond
exonerations.
Thank you for your assistance with this issue. If you should have
any questions regarding this request, please contact me at
(714)727-9090.
Sincerely,
For The Board Of Directors
Marbella Property Owners Association
Diane Mellring
Community Manager
cc: Board
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COMPLETION AGREEMENT
For Marbella Crest
Tract 13846
This Agreement is dated �JCA 1994, by and between CAPITAL
FINANCIAL CONSULTANTS, INC., as 4 ent for the owners of Tract 13846 (hereinafter
"CFC"), the CAPISTRANO VALLEY WATER DISTRICT (hereinafter "Water District")
and the CITY OF SAN JUAN CAPISTRANO, a municipal corporation, (hereinafter
„Cid„ ).
RECITALS
A. CFC is the agent for the owners of the certain real property located within
the City of San Juan Capistrano commonly known as Marbella Crest Estates, Tract 13846.
The owners of Tract 13846 had loaned $2,000,000 to the prior owners, Tropiville, Inc., a
South Carolina corporation, secured by a First Deed of Trust. A default occurred in the
loan, and CFC, on behalf of the owners, completed a non -judicial foreclosure sale on or
about February 26, 1993.
B. The grading on Tract 13846 currently is only partially completed for the
construction of fifteen (15) lots.
C. Water District served a Notice of Default and Calling of Surety Bond on
Golden Eagle Insurance Company on or about March 23, 1993. Pursuant to the default,
Golden Eagle Insurance Company paid the penal sum of that certain water facility bond for
the construction of the water facilities for Tract 13846 in the sum of $95,000 on or about
August 1, 1993.
D. The sum of $71,468 for construction of water service for Tract 13846 has not
been paid by prior owners.
E. CFC, as agent for the owners, is desirous of completing all water facilities for
Tract 13846, and the Water District is desirous of having CFC complete the above -
referenced water facilities.
NOW THEREFORE, for good and valuable consideration and receipt in sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. CFC shall complete the water facilities for Tract 13846 in compliance with the
approved drawings and the Water District's standard specifications.
2. Water District shall deposit monies previously received from Golden Eagle
Insurance Company, in the sum of $91,508.97 ($95,000 less $3,491.03 for delinquent water
bills), into the bank account established by the City of San Juan Capistrano and CFC
Pursuant to that certain Completion Agreement for Marbella Crest Tract No. 13846, dated
June 30, 1993. The City of San Juan Capistrano shall act as the agent for the Water
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District in the disbursement of funds from said account, subject to approval by the Water
District. Checks drawn on said account will be for work inspected and approved by the
Water District as completed to the satisfaction of the Water District.
3. At all times described in this Agreement, the project shall be the property of
CFC and its successors in interest, and all construction thereof shall be under the direction
and control of CFC; at no time shall the Water District be deemed a project partner,
developer, or owner for any purpose. CFC shall defend, hold harmless and indemnify the
Water District for any and all actions or causes of action arising out of CFC's ownership
and control of the subject property and project.
4. CFC shall be required to deposit into the bank account funds equal to the
Water District approved estimate to complete Phase I including the installation of an
isolation valve(s) between Phase I and Phase II and extending the end of the water main
past the limit of paving for Phase I, according to the approved plans, less the balance of the
surety bond proceeds and less any required reimbursements to the Water District. The
deposits by CFC may be on an incremental basis, provided they are deposited in a timely
fashion in compliance with the approved schedule for the commencement and completion
of the work of improvements. The funds deposited by the Water District from the proceeds
of the surety bonds shall not be spent until the total deposits by CFC are expended,
including all incremental deposits due from CFC to complete CFC's required deposit of the
approved estimate for Phase I, including the installation of an isolation valve(s) between
Phase I and Phase II and extending the end of the water main past the limit of paving for
Phase I. Should the cost to complete the project increase due to change orders or other
unforeseen circumstances, the contributions by CFC shall increase to adequately fund the
completion of the project.
The amount of that approved estimate is:
Phase I......... $ 89,896.00
Phase II ........ $ 65,614.00
Total ......... $155,510.00
5. Until such time as all required improvements in Phase I are completed,
appropriate deed restrictions shall be placed on each lot outside of Phase I to prevent
separate sale. Nothing within the deed restrictions shall be intended to preclude bulk sale
of all of Phase II to another entity. The deed restriction shall provide that the Water
District is a party to the document and that the Water District must approve the removal
of this restriction.
6. CFC shall commence the completion of the water facilities improvements for
Tract 13846 for Phase I, including the installation of an isolation valve(s) between Phase I
and Phase II and extending the end of the water main past the limit of paving Phase I, by
2
no later than two (2) business days after this Agreement is approved and executed by the
Water District.
7. CFC shall not be obligated to pay any additional fees, costs or expenses to the
Water District with respect to the completion of the water facilities of Tract 13846 in
conformance with the currently approved drawings and District's standard specifications.
Notwithstanding the aforementioned, the Water District will be reimbursed for all direct
costs incurred for such items as outside plan checking, geotechnical review and similar items
of that nature estimated to be $4,500. Prior to incurring any additional direct costs, the
Water District shall first submit a proposed budget to CFC with respect to direct costs for
CFC's approval.
8. Whoever develops Phase II of Tract 13846 shall be obligated to complete the
water facilities for Phase 11 pursuant to the currently approved drawings or as modified to
account for changing conditions and District's standard specifications in effect at the time
of the development. Furthermore, the Water District shall not be responsible or obligated
to complete and/or pay for the costs of completion of the Phase 1I water facilities for Tract
13846. Notwithstanding the aforementioned, to the extent there are any bond monies left
remaining after the completion of the Phase I improvements as more fully stated in
paragraph four (4) of this Agreement, whatever monies remaining may be used by the
developer to complete Phase II water facilities.
9. In consideration of the terms of this Agreement, CFC hereby irrevocably
agrees to authorize Water District to utilize the sum of the surety bond funds to be
deposited in the project bank account to complete the construction of the water facilities
for Tract 13846 in the event of a default, abandonment or other failure to complete the
project water facilities. CFC agrees to promptly release to Water District all such funds in
the project bank account for this purpose. CFC shall hold Water District harmless for the
exercise of the provisions of this section and hereby releases and assigns any rights to the
use of the surety bond funds and all other bond proceeds on this project in the event of
failure by CFC to perform.
10. Each party has cooperated in the drafting and preparation of this Agreement.
Hence, if any construction is to be made of this Agreement, the same shall not be construed
against any party.
11. This Agreement shall be binding upon the heirs, administrators, executors,
successors and assigns of the respective parties hereto and any parent, subsidiary or
affiliated entity of such parties.
12. This Agreement is the entire Agreement between the parties with respect to
the subject matter hereof and supersedes all prior and contemporaneous oral and written
agreements and discussions. This Agreement may be amended only by an agreement in
writing.
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13. The parties will execute any and all such further and additional documents as
shall be reasonable, convenient or necessary or desirable to carry out the terms of this
Agreement.
14. In the event it becomes necessary to enforce the terms and conditions of this
Agreement, then the prevailing party shall be entitled to reasonable costs, expenses and
attorney's fees in connection therewith.
15. This Agreement may be executed in two (2) or more counterparts, each of
which shall be an original, but all of which shall constitute one (1) in the same instrument.
16. The effective date of this Agreement, consisting of four (4) pages shall be
deemed to be the date upon execution by the Water District.
DATED: /— 7— 94-'
DATED:
DATED: ��0
DATED: .4�
CAPITAL FINANCIAL
CONSULTANTS, INC.
CAPISTRANO VALLEY
W
CITY OF SAN JUAN CAPISTRANO
By:
ayor lene mpbell
APPROVED AS TO FORM:
By: AJ�
'-AZ144
i hard K.Venhalier
City Attorney/Agency Counsel
11
April 5, 1994
Mr. Doug McCrea
Capital Financial Consultants
30448 Rancho Viejo Road, Suite 175
San Juan Capistrano, California 92675
Dear Mr. McCrea:
MEMBERS OF THE CITY COUNCIL
COLLENE CAMPBELL
GARY L. HAUSCORFER
GILJONES
CAROLYN NASH
JEFF VASOUEZ
CITY MANAGER
GEORGESCARBOROUGH
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At their meeting of April 5, 1994, the City Council of the City of San Juan Capistrano approved the
First Amendment to the Completion Agreement for Tract 13846. The Amendment provides that
when Capital Financial Consultants submits to the City a $250,000 completion bond, Capital
Financial Consultants will be entitled to immediately use funds deposited by the City from proceeds
of the surety bonds for purposes specified in the Amendment.
If you have any questions, please contact Bill Huber, Director of Engineering and Building Services.
Very truly yours,
Cheryl Johnson /
City Clerk
Enclosure
cc: Director of Engineering and Building
32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493.1171
• 0
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The List of Demands dated March 1, 1994, in the total amount of $16,600.08 and the List of Demands dated
March 16, 1994, in the total amount of $714,908.49 were received and filed.
;. • •. r.: • 1 ; ; .. r; •. :.I•
As set forth in the Report dated April 5, 1994, from the Director of Engineering and Building, the contract for
the Hilltop Way Sewer Reconstruction and Calle Arroyo Sewer Rehabilitation was awarded to the lowest
responsible bidder, Prkacin Company, in the amount of $54,444. All other bids were rejected. The Mayor and
City Clerk were authorized to execute the contract on behalf of the City.
5. MODIFICATIONS TO MARRELLA CREST COMPLETION A RF MENT TRACT 1 846
(CAPITAL FINANCIAL CONSULTANTS) (60Q,3M
As set forth in the Report dated April_5, 1994, from the Director of Engineering and Building, the First
Amendment to the Completion Agreement for Marbella Crest, Tract 13846, was approved accepting a
$250,000 surety bond from the developer in lieu of the original funding agreement. The bond allows the
developer access to the bond proceeds being held by the City to allow completion of the project. The Mayor
was authorized to execute the Amendment on behalf of the City.
. ';. • .. r;: u•.1 : r...• . 71.1.1. ..rr: .•
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As set forth in the Report dated April 5, 1994, from the Director of Engineering and Building, Contract
Modification No. 2 to Funding Contract No. 75Q749 with Caltrans was approved for six tasks related to the
San Juan Creek Railroad Bridge and Track Realignment. The modifications included the redistribution of
funding for tasks within the contract and the extension of the expiration date to December 31, 1994. The
Mayor was authorized to execute the contract on behalf of the City.
The claim received by the City from Mary Moore in the amount of $5,479 for property damage and personal
injury was denied, as set forth in the Report dated Apri15, 1994, from the City Attorney.
•• • u :•' ; � r Y 1 1 1
The claim received by the City from Gilbert Lee, et at, regarding property dispute was denied, as set forth in
the Report dated April 5, 1994, from the City Attorney.
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As set forth in the Report dated April 5, 1994, from the Director of Engineering and Building, the contract for
the construction of the Goldenridge Storm Drain project was awarded to the lowest responsible bidder, Kunos
Crawler and Backhoe Service, in the amount of $37,625. The formal bid process was waived to expedite the
project based on the fording that an eminent risk to health and safety existed from mosquito infestation and
potential for slope instability. All other bids were rejected. The Mayor and City Clerk were authorized to
execute the contract on behalf of the City.
City Council Minutes -3- 4/5/94
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w AGENDA ITEM April 5, 1994
TO: George Scarborough, City Manager
FROM: William M. Huber, Director of Engineering & Building
SUBJECT: Approval of First Amendment to Completion Agreement, Marbella Crest
(Tract 13846)
0 AL1 1 1
It is recommended that the City Council approve the First Amendment to the Completion Agreement
for Marbella Crest( Tract 13846).
FSI lillm"170
. ii ii . r i � .. inn • i i . i r
In order to provide financial flexibility and keep the Marbella Crest project moving toward
completion, it is recommended that City Council approve the Amendment to the Completion
Agreement.
01019-- 1 IM
On June 15, 1993, City Council approved the Completion Agreement with Capital Financial
Consultants, Inc., for the fulfillment of the grading, landscaping and public improvements
in the Marbella Crest (Tract 13846) subdivision. The agreement provided the developer
would expend their financial resources first; then, the fimds collected by the City on the
previous developer's bonds would be spent to finish the project (approximately $448,000).
The original estimate to complete the project was $1,050,000, which meant Capital
Financial's share was approximately $511,000. To date, the costs have risen to $1,280,000,
with Capital Financial contributing in excess of $570,000.
Capital Financial has requested the City consider an alternative to the original funding
agreement by accepting a $250,000 Surety bond, which would allow them access to the bond
proceeds being held by the City. The proposed arrangement can be viewed in two ways, the
first is that we currently have an all cash arrangement and accepting the bond weakens our
position. However as Council will recall this was a bankrupt project assumed by the primary
lenders, who are trying to finish the project and sell the lots. While the owners have
proceeded with the work, the willingness of the financial partners to risk further capital at
this time is marginal. It is believed that, as Phase I is completed and lots are sold, sufficient
income will be generated to complete the remaining work. The second way to view the
FOR CITY COUNCIL AGEND , DJ -5
9
a AGENDAITEM
-2-
0
April 5, 1994
request is from a purely financial basis. Currently, the City's security is the $448,000. With
the surety bond, the security will increase to $690,000. If the developer should walk on the
project, we would be in a better position financially to complete the remaining work. The
$250,000 bond represents 125% of the estimated work covered by the bond. The bond
covers completion of $100,000 worth of work in Phase I and $100,000 worth of work for
completion of Phase II.
There is no impact to the City's General Fund as a result of this action.
PUBLIC NOTIFICATION
Capital Financial Consultants, Inc.
Approve the staff recommendation.
2. Do not approve the staff recommendation.
Return to staff for further information.
It is recommended that the City Council approve the First Amendment to the Completion Agreement
for Marbella Crest ( Tract 13846).
Respectfully submitted,
William M. Huber
Director of Engineering & Building
-35M
Attachments: 1. Completion Agreement
1 First Amendment to Completion Agreement
0
January 24, 1994
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1776
Mr. Doug McCrea
Capital Financial Consultants
30448 Rancho Viejo Road, Suite 175
San Juan Capistrano, California 92675
Re: Completion Agreement for Marbella Crest Tract 13846Agreement for Marbella Crest Tract 13846
Dear Mr. McCrea:
MEMBERS OF THE CITY COUNCIL
COLLENE CAMPBELL
GARY L. HAUSDORFER
GIL JONES
CAROLYN NASH
JEFF VASOUEZ
CITY MANAGER
GEORGESCARBOROUGH
At their meeting of January 18, 1994, the City Council of the City of San Juan Capistrano
approved the Completion Agreement for Marbella Crest, Tract 13846. The Agreement
between Capital Financial Consultants, Inc., the Capistrano Valley Water District and the
City, provides for Capital Financial Consultants to complete the water facilities for Tract
13846.
A fully -executed copy of the Agreement is enclosed for your files. If you need any further
information, please let us know.
Very truly yours,
Cheryl Johnson
City Clerk
Enclosure
cc: Capistrano Valley Water District
City Attorney
32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 • (714) 499-1171
AGENDA ITEM January 18, 1994
TO: George Scarborough, City Manager
FROM: Richard K. Denhalter, City Attorney
SUBJECT: Approval of Marbella Crest Completion Agreement
RECOMMENDATION:
By motion, approve the completion agreement for Marbella Crest between
Capital Financial Consultants, the Capistrano Valley Water District and the
City of San Juan Capistrano.
SITUATION:
The City entered into an agreement to allocate recovered bond proceeds toward
improvements in the project taken over by Capital Financial. The Water District has a
similar agreement for bond proceeds that it recovered. Since the City manages the holding
accounts for these proceeds, and the same accounts are to be used for both the City and
the District, it is necessary for the City to be a party to the Water District's agreement with
Capital Financial.
COMMISSION/BOARD REVIEW AND RECOMMENDATIONS:
Not applicable.
FINANCIAL CONSIDERATIONS:
There will be no cost to the City.
Not applicable.
ALTERNATE ACTIONS:
1. Approve the agreement.
2. Do not approve the agreement.
3. Request additional information from staff.
FOR CITY COUNCIL AGM 4i: 314
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Agenda Item - 2 - January 18, 1994
RECOMMENDATION:
By motion, approve the completion agreement for Marbella Crest between
Capital Financial Consultants, the Capistrano Valley Water District and the
City of San Juan Capistrano.
Respectfully submitted,
RI HARD K. DENHALTER
City Attorney
Attachment