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24-0507_ADVANCED GROUP 99-SJ & 03-79-2 (ARES)_Agenda Report_E9City of San Juan Capistrano Agenda Report TO: Honorable Mayor and Members of the City Council FROM: Benjamin Siegel, City Manager SUBMITTED BY: Joel Rojas, Development Services Director PREPARED BY: Paul M. Garcia, AICP, Principal Planner DATE: May 7, 2024 SUBJECT: Extension of Development Agreement No. 21-001 Between the City of San Juan Capistrano and Advanced Group Related to the Distrito La Novia - San Juan Meadows 154-acre Mixed Use Residential and Commercial Project to Extend its Duration by Three Years; and, a Finding That Said Action is Consistent with the Environmental Impact Report (EIR) Prepared and Approved for the Distrito La Novia – San Juan Meadows Project (SCH #2008061078), Therefore, the EIR Serves as the Environmental Documentation for This Action Under Provisions of Public Resources Code Section 21166 and State CEQA Guidelines Section 15162 and no Further CEQA Review is Required (Property Owner: Robb Cerruti, Advanced Group 99-SJ & Advanced Group 03-79-2) RECOMMENDATION: 1.Authorize the Mayor to execute a First Operating Memoranda to Development Agreement 21-001 (Attachment 1) between the City of San Juan Capistrano and Advanced Group Related to the Distrito La Novia,- San Juan Meadows Project, to extend its duration by three years to June 7, 2027; and 2. Make a determination that no further environmental review is required for said action pursuant to Public Resources Code section 21166 and State CEQA Guidelines Section 15162. EXECUTIVE SUMMARY: The Distrito La Novia – San Juan Meadows project is an approved 154-acre mixed use residential/commercial development that encompasses two sites separated by La Novia Avenue (Attachment 2). The project entitlements and a Development Agreement (“DA”) between the City and property owner (“Applicant”) were approved in 2010. Pursuant to Section 5.4 of the DA, changes and adjustments to the DA can be made without 5/7/2024 E9 City Council Agenda Report May 7, 2024 Page 2 of 6 amendment, and rather through an operating memorandum. The DA has been extended twice since 2010 and is currently set to expire on June 7, 2024. The proposed First Operating Memoranda would extend the duration of the DA for an additional three years, to June 7, 2027. DISCUSSION/ANALYSIS: Project History The 154-acre Distrito La Novia – San Juan Meadows project encompasses two sites separated by La Novia Avenue. The Distrito La Novia site is 18.7 acres located between San Juan Creek Road southward to La Novia Avenue, eastward from Valle Road to the San Juan Hills Golf Club. The San Juan Meadows site is 137 acres located south of La Novia Avenue and north of McCracken Hill and the Pacifica San Juan project. A 75-acre portion of the San Juan Meadows project area was the site of the former Forster Canyon Landfill, which was operated by the County of Orange between 1958 and 1975. In 2010, the City approved project entitlements allowing the development of 130 attached residential unit and 75,100 square feet of commercial space and 16,000 square feet of office space on the Distrito site, and 94 single-family residential dwellings and an equestrian facility on the San Juan Meadows site (Attachment 3). In 2011, the approved project was subject to a referendum that forced a ballot measure asking voters to consider overturning the Council’s decision to grant a General Plan Amendment for the project. In June 2011, Ballot Measure B was passed by the voters, affirming the City Council’s decision to approve the General Plan Amendment that allowed the project to proceed as approved in 2010. During that same year, the Applicant began working to put forth a water quality control plan to the California Regional Water Quality Control Board (“CRWQB”) for the post-closure of the Forster Canyon Landfill site. In December 2016, the project’s water quality control plan was approved by the CRWQB, allowing the Applicant to move forward with the project as originally proposed. In approving the project in 2010, the City Council conditioned the project to decrease the density and commercial square footage. As a result, City approval of a revised Architectural Control (“AC”) application for the Distrito portion of the project is required to occur prior to the issuance of a grading permit for the Distrito site. In addition, approval of an AC application will also be required for development of the single-family homes within the San Juan Meadows site. Furthermore, approval of a Conditional Use Permit is required for the equestrian facility. In December 2022, rough grading plans for the San Juan Meadows site were issued and grading activities commenced shortly thereafter and continue to this day. The rough grading plan allows the Applicant to rough-grade and “balance” the site prior to the issuance of a precise grading permit. Project Development Agreement City Council Agenda Report May 7, 2024 Page 3 of 6 On November 16, 2010, the DA between the City of San Juan Capistrano and Advanced Group 99-SJ & Advanced Group 03-79-2 for the Distrito La Novia – San Juan Meadows project was entered into (Attachment 4). The DA includes a description of the approved entitlements, a legal description for both project sites and a list of the public benefits to the City and obligations of the developer. The term of the DA was originally set to expire on November 16, 2016. In 2017, the Applicant asserted that the term of the DA was extended to June 2017 due to the “Force Majeure” clause in Section 12.3 of the DA, which makes provisions for extension of time of performance due to “delays and defaults due to… voter initiative or referenda” among other factors. The City Attorney agreed that a Force Majeure delay was caused by the 2011 referendum and concurred that the delay resulted in an extension of the DA to June 7, 2017. Subsequently, on June 6, 2017, the parties entered into a First Amendment to the DA that extended the duration of DA from June 7, 2017, to June 7, 2021 (Attachment 5). Thereafter, on June 1, 2021, the Parties entered into a Second Amendment to the DA which extended the duration of the DA again from June 7, 2021, to June 7, 2024 and required the developer to pay the City an in-lieu fee if the project’s equestrian facility is not constructed, with the in-lieu fee utilized for equestrian uses (Attachment 6). First Operating Memoranda to Development Agreement The current DA as amended by the Second Amendment, is set to expire on June 7, 2024. Pursuant to Section 2.3 of the DA, as amended by the Second Amendment, the City has the unilateral right to extend the term of the current DA for an additional three years beyond June 7, 2024, for the purpose of enforcing the property owner’s DA obligations. Staff believes that the DA should be extended under this provision since the property owner has invested material resources in moving the project forward and has been subject to certain weather-related delays. The extension would be memorialized through the execution of a First Operating Memoranda pursuant to DA Section 5.4. Said section allows the use of a memoranda to document mutually agreed upon changes, adjustments or clarifications to the DA without a formal DA amendment. The proposed First Operating Memoranda extends the duration of the DA by three years, from June 7, 2024 to June 7, 2027. Except as outlined within the First Operating Memoranda, the remainder of the terms and conditions of the DA would remain unchanged and are in full force and effect. The property owner has signed the Memoranda. Staff is recommending that the City Council approve and authorize the Mayor to execute the Memoranda. FISCAL IMPACT: There is no fiscal impact associated with the recommended action. The costs associated with this action are being funded by the Applicant through a developer deposit account. ENVIRONMENTAL IMPACT: City Council Agenda Report May 7, 2024 Page 4 of 6 This project has been reviewed in accordance with the California Environmental Quality Act (“CEQA”). A previous Environmental Impact Report (EIR) was prepared and approved for the Distrito La Novia – San Juan Meadows project and was certified by the City Council (Resolution 10-11-02-01) on November 2, 2010 (SCH #2008061078). Once an EIR has been certified, the lead agency may not require preparation of a subsequent or supplemental EIR unless one of three triggering conditions exists: (1) substantial changes are proposed in the project that will require major revisions of the EIR, (2) substantial changes occur in circumstances under which the project is being undertaken that will require major revisions in the EIR, or (3) new information of substantial importance to the project that was not known and could not have been known when the EIR was certified as complete becomes available. (State CEQA Guidelines, § 15162; Pub. Resources Code, § 21166.) Staff recommends that no further environmental review is required because, except as outlined within the First Operating Memoranda, no changes have been made to the project. The proposed actions are consistent with the previously certified Environmental Impact Report (EIR) for the Distrito La Novia – San Juan Meadows project (SCH #2008061078). The action would not: 1. Constitute a substantial change to the project that will require major revisions of the certified Final Environmental Impact Report for the Distrito La Novia – San Juan Meadows project (State Clearinghouse No. 2008061078) due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; 2. Constitute a substantial change with respect to the circumstances under which the project is administered that will require major revisions of the certified Final Environmental Impact Report for the Distrito La Novia – San Juan Meadows project (State Clearinghouse No. 2008061078) due to the involvement of new significant environmental effects or a substantial increase in the severity of the previously identified significant effects; and 3. Involve new information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the Final Environmental Impact Report for the Distrito La Novia – San Juan Meadows project (State Clearinghouse No. 2008061078) was certified that shows any of the following: (a) the project will have one or more significant effects not discussed in the certified Final Environmental Impact Report for the Distrito La Novia – San Juan Meadows project (State Clearinghouse No. 2008061078); (b) significant effects previously examined will be substantially more severe than shown in the certified Final Environmental Impact Report for the Distrito La Novia – San Juan Meadows project (State Clearinghouse No. 2008061078); (c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the project, but the project proponents decline to adopt the mitigation measure or alternative; or (d) mitigation measures or alternatives which are considerably different from those analyzed in the certified Final Environmental Impact Report for the Distrito La Novia – San Juan Meadows project (State Clearinghouse No. City Council Agenda Report May 7, 2024 Page 5 of 6 2008061078) would substantially reduce one or more significant effects on the environment, but the project proponents decline to adopt the mitigation measure or alternative. A Notice of Determination (NOD) will be filed with the County Recorder's Office and submitted to the State Clearinghouse within 5 days should the project receive final approval. PRIOR CITY COUNCIL REVIEW: • On June 1, 2021, the City Council approved the Second Amendment to the DA which extended the DA from June 7, 2021 to June 7, 2024, and became effective July 15, 2021. • On June 6, 2017, the City Council approved the First Amendment to the DA which extended the DA from June 7, 2017 to June 7, 2021,and became effective July 6, 2017. • On June 7, 2011, the voters passed Measure B, upholding the City Council’s decision to approve the project. • On February 15, 2011, the City Council called a Special Municipal Election to be held June 7, 2011, for the purpose of submitting to the voters “Measure B” which asked the voters to consider the City Council’s November 2, 2010 approval of the Distrito Project. • On November 2, 2010, the City Council adopted four ordinances and several Resolutions approving the project, including the original DA. COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS: • On April 27, 2021, the Planning Commission adopted a resolution recommending that the City Council approve the Applicant’s requested three-year extension to the DA and require the developer to pay the City an in-lieu fee if the project’s equestrian facility is not constructed, with the in-lieu fee utilized for equestrian uses. • On April 25, 2017, the Planning Commission adopted a resolution recommending City Council approval of a four-year DA extension pursuant to the terms of the original DA. • On April 27, 2010, the Planning Commission forwarded a recommendation of denial for the various project entitlements to the City Council. The main reasons given for the negative recommendation were concerns regarding increased traffic generated by the proposed residential uses, and the loss of a previously approved 300-room hotel on the site. NOTIFICATION: The following individuals have received a courtesy notification of this item: Robb Cerruti, Advanced Group 99-SJ & Advanced Group 03-79-2 (Applicant) ATTACHMENTS: City Council Agenda Report May 7, 2024 Page 6 of 6 Attachment 1 – First Operating Memoranda to Development Agreement Attachment 2 – Aerial Photo of the Project Attachment 3 – Approved Conceptual Plans Attachment 4 – Development Agreement Attachment 5 - Development Agreement Amendment #1 Attachment 6 - Development Agreement Amendment #2 ATTACHMENT 1 Aerial PhotoProject Site Distrito La Novia Conceptual Site Plan ATTACHMENT 3 San Juan Meadows Conceptual Site Plan ATTACHMENT 5 ATTACHMENT 6