HomeMy WebLinkAbout04-15-2014 PH 5 Reimbursement Agreement Interfund Loan
FROM: Derek Johnson, Community Development Director
Daryl Grigsby, Public Works Director
Prepared by: Derek Johnson, Community Development Director
Tim Bochum, Deputy Director, Public Works
SUBJECT: REVISED MARGARITA AREA IMPACT FEE CREDIT AGREEMENT
FOR PRADO ROAD EXTENSION
RECOMMENDATION
1. Approve a Revised Reimbursement and Impact Fee Credit Agreement with Rescal LLC for
the purpose of reimbursing and crediting costs for the construction of Prado Road
improvements consistent with the Margarita Area Specific Plan and Resolution No. 9776
and the corresponding conditions of Vesting Tentative Tract Map No. 2353.
2. Approve a Resolution authorizing the Finance and Information Technology Director to
cause an interfund loan for the purposes of constructing a portion of Prado Road.
REPORT IN BRIEF
On February 19, 2013, the Council Approved a Reimbursement and Impact Fee Credit Agreement
with Rescal LLC for the purpose of reimbursing and crediting costs for the construction of Prado
Road improvements for Tract 2342. The agreement dealt specifically with costs associated with that
tract and the first phase of Prado Road extension in the Western Enclave area of the Margarita area.
The agreement also set the stage for future revisions as Prado Road improvements continue to be
built by the Western Enclave projects. This item addresses revisions of the reimbursement
agreement associated with Tract 2353, also owned by Rescal, and issues of reimbursement and
crediting. Council is directed to Attachment 2 which includes the entire staff report for the February
2013 approval. Since most of the issues remain the same, background issues will not be reiterated in
this report.
Staff is recommending that the City Council approve a revision to the Reimbursement and Impact
Fee Credit Agreement (“Agreement”) approved last year and to authorize the Finance and
Information Technology Director to cause an interfund loan regarding fees for Tract 2353.
DISCUSSION
Project History
The Margarita Area Specific Plan (MASP) and associated Environmental Impact Report were
approved and certified by the City Council in October 2004 with the primary goals of facilitating
the production of housing and a mix of business park and neighborhood commercial uses.
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Margarita Area Impact Fee Credit and Reimbursement Agreement
For Prado Road Extension Page 2
The Council has approved vesting tentative maps for the three “Western Enclave” properties in the
Margarita Area following the adoption of the MASP. Rescal is the developer that acquired the
entitlements of two subdivisions in the Margarita Area (Tract 2342 and Tract 2353 – formerly
known as Cowan and DeBlauw). The City has been actively working with the developers to
finalize the Vesting Tentative Tract Map and comply with all conditions. The primary condition
which presents a considerable challenge and is the subject of the proposed Agreement is the
construction of the westerly portion of Prado Road and related frontage improvements.
A summary of the two approved vesting tentative tract maps currently owned by Rescal, Inc. are
summarized as follows:
Property
Owner
Map No.
Date
Approved
BP
KSF1
MF
Housing
Units
SF Housing
Units
Rescal 2342 3-7-06 20.11 56
Rescal 2253 3-7-06 18.29 23 123*
Total * 38.40 23 179
*Assumes revised tentative map for Tr. 2353 is approved by Council
In addition to residential units, these properties also include mixed uses. Based on typical lot and
floor area assumptions for commercial uses, it is estimated that approximately 38,409 ft² of business
park/mixed use development will eventually be constructed within the two projects. It is likely that
Rescal will sell off these business park components of the subdivision at a future time rather than
develop them.
Prado Road Extension Costs and Phasing
The MASP acknowledged that establishing the east-west connection of Prado Road between Broad
Street and Higuera Street at the earliest possible stage of development is a goal of the Specific Plan
and City development process. The MASP recognized that due to multiple property ownership
issues as well as development phasing of individual properties, plans for phased implementation of
Prado Road would be necessary.
As contained in the public financing program of the MASP the total estimated costs for Prado Road
Extension (PRE) are $21.48 million, summarized as follows by phase:
Estimated Prado Road Extension Costs
Phase 1: 4 Lane to M Street 5,881,028
Phase 2: Partial improvements: M to Broad (2 lanes)11,185,000
Phase 3: Remaining improvements: M to Broad (4 Lanes) 4,415,000
Total $21,481,028
These phases were developed in cooperation with the three subdivision owners in the western area
of the MASP known as the “Western Enclave”. They reflected perceived phases that were
achievable based upon the housing market at the time and the ability to privately finance a large
portion of infrastructure at early stages of development.
1 KSF=Thousand Square Feet
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Margarita Area Impact Fee Credit and Reimbursement Agreement
For Prado Road Extension Page 3
The previously identified first phase of Prado Road (PRE-WE) is now being developed in seven
sub-segments as outlined in the revised delivery plan submitted by Rescal. The new “first” segment
being completed by Tract 2342 is called Segment A and is substantially complete. This Segment is
currently estimated to cost $2,120,250.
As part of last year’s approval, Council allowed Tract 2342, the smallest residential unit subdivision
in the WE, to move forward constructing Segment A and using a combination of MASP credits for
Transportation and Park impact fees to help offset their financial burden. The agreement allowed
crediting and reimbursement of up to the $2,120,249 for this work.
Figure 1 – Prado Road Improvements Segment A
(Completed Roundabout constructed by Tract 2342 as part of the
Reimbursement agreement approved by Council last year)
Tract 2353 (adjacent to Tract 2342) is now moving forward and will be constructing its own portion
of Prado Road. These improvements will be completed in two phases commonly referred to as
Segments D and E, respectively. Because Tract 2353 has many more residential lots (123) the
difference between costs for road improvements and total MASP fees used for crediting is much
more balanced than it was for Tract 2342. The new segments of Prado Road will add another
$1,371,954 to the previous segment cost of Prado Road.
As stated previously, Rescal is only moving forward at this time with the single family phases of
the projects that they own. This further complicates the ability of those projects to advance
substantial funding for needed improvements such as the significant capital outlay for the PRE.
The Reimbursement Agreement
Attachment 1 is the revised reimbursement agreement for Tracts 2342 and 2353. The majority of
terms remain the same, but costs have been updated to include all three phases of Prado Road. The
agreement covers costs incurred for permitting, project design, construction and other issues
associated with completing this segment of the road.
Pursuant to the approved agreement, the modified agreement is based upon the following basic
principles:
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Margarita Area Impact Fee Credit and Reimbursement Agreement
For Prado Road Extension Page 4
1. Rescal is responsible for making and funding all Segment A, D & E improvements,
including related costs for design, permitting and construction of the roadway. These costs
are estimated to be $3,492,203.
2. Rescal (Tract 2342 & 2353) is responsible for its “fair share” of these costs: $2,045,623; of
which, the single family residential component’s share is: $1,366,857.
3. There is a difference in these amounts (particularly for the residential component of tracts)
that requires the development to “carry” these up-front costs and await reimbursements from
others for the improvements.
4. Total MASP Transportation Add on Fees (includes other projects besides Prado Road
extension) for the residential component of Tracts 2342 & 2353 are projected to be
$1,729,555.
5. However, since both Tract 2342 & 2353 are responsible for advancing all costs, crediting
and reimbursements should be given to reflect fair share participation by the City and others
to ameliorate the substantial fronting of these costs by the development.
6. Reimbursement and crediting will come solely from subsequent MASP sub-area fee
collections from the MASP Transportation and MASP Park fees. In essence the City will
“loan” potential fees from the MASP Park fees for the project rather than collecting and
holding them for future use in the MASP area.
7. The City receives “first” repayment of credited MASP Park fees used to assist Tract 2342 &
2353 in offsetting their up-front costs for Prado Road improvements from all development.
As drafted, the Agreement specifies that funds will be credited and/or reimbursed to the developer
for actual costs from developer paid MASP Park Fees, and MASP Transportation Fees.
The Agreement satisfies both the eligibility and conditional requirements found in Section
16.20.110 et seq. of the City’s Municipal Code. While the improvements offer a benefit to the
subdivision or site area, connecting Prado Road from Higuera to Broad Street provides
enhancements to the overall circulation system. The Agreement has been reviewed and approved by
the City Attorney and specifies that reimbursements will only be for actual costs based upon the
review of cost documentation verified by the City Engineer. The proposed Agreement has been
prepared in accordance with the tentative map approvals for these two properties and the Section
16.20.110 et seq. of the City’s Municipal Code.
Estimated Impact Fees
The following table itemizes Prado Road costs and fees that would be available for credit and
reimbursement and the outstanding reimbursement, after all eligible fees have been applied.
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Margarita Area Impact Fee Credit and Reimbursement Agreement
For Prado Road Extension Page 5
Residential Units Constructed by Resmark for Tracts 2342 & 2353
Tract 2342Tract 2353Total
Estimated Costs Triggered - Prado Road
Segment A Triggered by Tract 2342 (2,120,249)$ (2,120,249)$
Segment D&E/Resmark - Tract 2353 (Ph 1, 2)(1,371,954)$ (1,371,954)$
Total Costs Triggered by 177 Single Family Units (2,120,249)$ (1,371,954)$ (3,492,203)$
Eligible Fees:20132014
Fee Obligation (Prior to Credits or Reimbursements)Fee Fee
MASP Transportation Add On 9,551$ 9,713$ 534,856$ 1,194,699$ 1,729,555$
MASP Park Add on Fee 8,109$ 8,247$ 454,128$ 1,014,381$ 1,468,509$
Subtotal 988,984$ 2,209,080$ 3,198,064$
Fees Applied Against Prado Road Extension Costs
MASP Transportation Add On 534,856$ 1,194,699$ 1,729,555$
MASP Park Add on Fee 454,128$ 1,014,381$ 1,468,509$
Subtotal 988,984$ 2,209,080$ 3,198,064$
Tract 2342 Credit/obligaion (1,131,265)$
Remaining Fee Obligations -$ -$ -$
MASP Transportation Add On -$ -$ -$
MASP Park Add on Fee -$ -$ -$
Subtotal -$ -$ -$
Costs not covered by fee offset (Remaining Credit/Reimbursement)(1,131,264.69)$ (294,139)$ (294,139)$
Business Park Component (Transportation Add on Fee Only)363,550$ 330,500$ 694,050$
Multi Family Tr 2353 (MASP Transportation Add Only)5,993$ 137,839$ 137,839$
831,889$
Other Eligible Fees: (To be Credited/Used if BP or MFR Uses occur prior to
completion of Residential components of Tr 2342 & 2353)
As shown in the table, even with crediting of the MASP Park fees, the residential component of the
two tracts incurs costs beyond its fair share for work it will complete on the Prado Road extension.
If the business park components of either tract comes come forward sooner than expected this
would minimize the excess amounts incurred by the developer, but may not fully cover the
remaining expense ($294,139) advanced by Rescal.
The outstanding reimbursement would be repaid by future development after all interfund loans
have been repaid with interest, most likely from Tract 2428 which is seeking its amendments to the
tentative tract map at this same meeting.
The City’s Municipal Code provides that at the end of 15 years, if funds are not available to
reimburse Rescal for their unreimbursed costs that no additional reimbursement will occur. The
reimbursement condition is consistent with section 16.20.110 (B) (4) of the City’s Municipal Code.
Interfund Loan Resolution
As part of last year’s agreement approval, Council authorized the Finance and Information
Technology Director to issue the interfund loan to advance reimbursement of Prado Road costs
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Margarita Area Impact Fee Credit and Reimbursement Agreement
For Prado Road Extension Page 6
from the MASP Park Fee account. The revised agreement maintains this provision and extends the
same loan for Tract 2353 fees. This interfund loan poses no risk to the General Fund. If repayment
has not occurred at the conclusion of the loan, then the terms can be extended by City Council.
FISCAL IMPACT
No impact to the General Fund will occur as part of Agreement. The use of the interfund loan will
delay some revenue to the City for use in constructing park facilities in the MASP area, however,
all park facilities are located on the Damon Garcia property and it is years away from development.
As such, delay of collection of these fees is not anticipated to cause any adverse impact to the
impact fee funds, since the use of these Park fees, while programmed, would occur many years
from now.
CONCURRENCES
The Public Works, Finance and Information Technology, and City Attorney concur with the
recommendations contained in this report.
ALTERNATIVES
1. Do not revise the Agreement. Given the provisions of the tentative map approvals and
policies in the MASP, staff does not recommend this option.
2. Approve Agreement with Different Terms. Based on in-depth discussions with the property
owners, staff recommends that the proposed agreement as it best implements the vesting
tentative map approvals and intentions of the MASP.
ATTACHMENTS
1. Reimbursement Agreement
2. 2-19-2013 Council Agenda Report
3. Interfund Loan Resolution
AVAILABLE FOR REVIEW IN THE COUNCIL OFFICE
Goodwin Group: January 4, 2013 Reimbursement, Fiscal, and Economic Analyses
t:\council agenda reports\2014\2014-04-15\reimbursement agreement interfund loan (johnson-bochum)\e-car tract2353 reimbursement agreement.doc
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Attachment 1
REIMBURSEMENT AND IMPACT FEE CREDIT AGREEMENT
FOR PRADO ROAD EXTENSION COSTS
This Agreement is made on _______________, 2014, by and between the City of San Luis
Obispo and ResCal SLO 193, LLC (“Developer"”).
Recitals
A. WHEREAS, on October 12, 2004, the San Luis Obispo City Council adopted the
Margarita Area Specific Plan by City Council Resolution Number 9615; and
B. WHEREAS, on March 7, 2006, the City Council adopted Resolutions No. 9776 and
No. 9917 (2006 Series) approving Vesting Tentative Tract Maps No. 2342 and 2353,
respectively; and,
C. WHEREAS, Chapter 2.3 of the City’s General Plan Land Use Element identifies the
Margarita Area as a Residential Expansion Area intended to accommodate San Luis
Obispo’s planned residential growth for the near future; and,
D. WHEREAS, Section 5.7.2 of the Margarita Area Specific Plan states that
establishing the east-west connection of Prado Road between Broad Street and
Higuera Street at the earliest possible stage is a goal of the Specific Plan since
construction of Prado Road will facilitate housing development in the Margarita
Area; and,
E. WHEREAS, Section 5.7.2 of the Margarita Area Specific Plan and Vesting Tentative
Tract Maps No. 2342 and 2353 Condition of Approval 1.g. provided that the City
will consider a reimbursement agreement to help distribute and pay the costs of
designing, permitting and constructing portions of Prado Road; and,
F. WHEREAS, the Developer is responsible for completing design, permitting and
construction of portions of Prado Road that are beyond its fair share, are necessary
for orderly development of the Margarita Area and are contained in the MASP public
financing program; and,
G. WHEREAS, Pursuant to condition 1e of Resolution No. 9776 and 9917, the City
reserves the right and the Property Owner, either current or future, shall not oppose
the formation of a community facilities district or other such financing mechanism
that would fund any final project costs for the construction of Prado Road Extension
that are not contained in the Margarita Area Specific Plan Impact Fee estimates.;
and,
H. WHEREAS, the City has determined that the most efficient, expedient, and effective
approach to coordinate the construction of Prado Road concurrent with the housing
developments of Tracts 2342 and 2353 is for the Developer to construct Prado Road
in conformance with the City approved Delivery Plan of Prado Road; and,
I. WHEREAS, Section 66485 et seq. of the Subdivision Map Act authorizes a local
ordinance requirement that improvements installed by the subdivider for the benefit
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REIMBURSEMENT AND IMPACT FEE CREDIT
AGREEMENT FOR PRADO ROAD EXTENSION COSTS
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of the subdivision shall contain supplemental size, capacity, number, or length for
the benefit of property not within the subdivision, and that those improvements be
dedicated to the public; and
J. WHEREAS, the City adopted Chapter 16.20. of San Luis Municipal Code in 2006
to require physical improvements including supplemental capacity for subdivisions
consistent with Section 66485 et seq. of the Subdivision Map Act; and,
K. WHEREAS, Chapter 16.20 of the San Luis Municipal Code was adopted to specify
the conditions and eligibility for reimbursement and this agreement meets these
requirements, provided that, if this Agreement is determined to be in conflict with
Chapter 16.20 of the San Luis Municipal Code, then San Luis Municipal Code shall
prevail; and,
L. WHEREAS, the City of San Luis Obispo has adopted Chapter 16.20 of the San Luis
Obispo Municipal Code to set forth the procedure and conditions for physical
improvement standards and procedures, including the reimbursement of costs
whenever improvements are required to be installed adjacent to property other than
that being developed or in greater size or capacity than required for the development
of the property under consideration; and,
M. WHEREAS, Section 9.6.1 and 9.7.2 of the Margarita Area Specific Plan and the
Conditions of Approval for Tract 2342 and 2353 identified a reimbursement
agreement as one instrument to reimburse developers for costs to construct public
facilities in excess of those necessary to accommodate project requirements and,
N. WHEREAS, Section 9.6.1 of the Margarita Area Specific Plan identified
development impact fee credits and other impact fees (interfund loans) as potential
mechanisms to fund such public infrastructure improvements and their
reimbursements; and,
O. WHEREAS, the City’s Economic Development Strategic Plan’s (adopted October
16, 2012) primary goal is creation of head-of-household jobs through developing
strategies for infrastructure, focusing on promising growth sectors, and expediting
desired economic activity; and,
P. WHEREAS, Section 3.1 of the Economic Development Strategic Plan designates the
Business Park zone of the Margarita Area as accommodating professional-service,
research, and light manufacturing jobs that can support local households; and,
Q. WHEREAS, Sections 1.4 and 1.5 of the Economic Development Strategic Plan call
for exploring financing strategies for infrastructure that address timing/costs and
ensure that that new development is responsible for infrastructure costs only to the
extent there is a nexus between infrastructure requirements and project impacts; and,
R. WHEREAS, Section 1.9 of the Economic Development Strategic Plan contains a
strategy to work with developers that are willing to install infrastructure beyond the
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REIMBURSEMENT AND IMPACT FEE CREDIT
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new development’s “fair share’ requirement as an expedient way to provide new
infrastructure in the City’s Expansion Areas; and,
S. WHEREAS, the Economic Development Strategic Plan made findings that, in the
City’s expansion areas, there are limited “shovel ready” sites for new construction
due to the scale and cost of required public infrastructure and that key opportunity
sites need to be subdivided and/or lack infrastructure. These constraints add to the
time and complexity to bring projects online and have resulted in limited built office
and business park space large enough to accommodate the expansion of some
companies currently in the City and companies looking to relocate to the area.
T. WHEREAS, a report prepared by the Goodwin Consulting Group estimated that the
total jobs created by the buildout of the MASP to be approximately 7,081.5 and
472.1 new ongoing jobs at buildout; and
U. WHEREAS, Developer has constructed a drainage detention basin as required by the
VTTM Conditions of Approval and the Margarita Area Specific Plan at its sole
expense. The basin has been designed specifically to include surplus capacity
available for other parcels located in the Margarita Area Specific Plan as well as
drainage from the Prado Road improvements with the intent that said parcels and
roadway will be allowed to use such basin and, that Developer shall be reimbursed
with fair share contributions when other benefitting parcels develop, including the
Prado Road improvements as defined in this agreement; and,
V. WHEREAS, it is in the interest of orderly development that parcels in the Margarita
Area Specific Plan be able to connect to this drainage detention facility and that the
Developer recover a proportion of actual costs from other owners in the Margarita
Area Specific Plan for constructing the detention basin and related facilities, in
excess of its project needs; and,
W. WHEREAS, the construction of Prado Road and the internal roadway network for
Vesting Tentative Tract Maps No. 2342 and 2353 will provide access to adjacent
parcels and it is in the interest of public health and safety and orderly development to
provide reasonable access to these parcels prior to the City accepting Prado Road
improvements into the maintained City system; and,
X. WHEREAS, the Goodwin Report, dated January 4, 2013, has determined that the
allocated Fair Share of Prado Improvements for VTTM 2342 is $731,643 and
specifically $534,856 for the residential component of Tract 2342. This same report
has determined that the allocated Fair Share of Prado Improvements for VTTM 2353
is $1,313,980 and specifically $934,405 for the single family residential component
of Tract 2353. The Report also identified the cost of the initial phase(s) of Prado to
be constructed by Developer are significantly in excess of that Fair Share. As an
inducement for Developer to construct desired improvements in excess of its fair
share, City concludes it is appropriate to accelerate repayment to Developer through
the allocation of impact fee credits from VTTM Nos. 2342 and 2353, and from other
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REIMBURSEMENT AND IMPACT FEE CREDIT
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residential and non-residential properties in the Margarita Area benefitting from the
improvements.
Y. WHEREAS, the Prado Road Extension is to be designed and constructed in phases
as defined in this Agreement, the Delivery Plan, and Conditions of Approval 1.a-f.
Prado Road adjacent to Tract 2342 and 2353 has been designed at Developer’s
expense, and plan checked and approved by the City. It is the intent of this
Agreement to credit or reimburse developer for all of the related design expenses.
Final design of portions of Prado Road at the easternmost edge of the Western
Enclave will require additional coordination with adjacent property owners as part of
final public improvement plan preparation of Phase II of Tract 2353; and,
Z. WHEREAS, if this Agreement is determined to be inconsistent with the Conditions
of Approval, the Conditions of Approval shall prevail; and
AA. WHEREAS, the City of San Luis Obispo has determined that the Prado Road
Improvements must be undertaken by Developer in Phases as defined in this
Agreement and according to the Delivery Plan.
BB. WHEREAS, Exhibit “A” to the Agreement and attached hereto provides the plan
schematic for the phases of construction (Segments A, D, E) as defined in this
Agreement and approved and permitted by the City, which are incorporated herein
by reference; and
CC. WHEREAS, Exhibit “A” to the Agreement and attached hereto provides conceptual
plans for subsequent phases of Prado Road Improvements as defined in the
Agreement and to be constructed by Developer or others; and,
DD. WHEREAS, in connection with obtaining a building permit for each business park,
office, single-family, multi-family unit, or other allowed land use within the
Margarita Area Specific Plan, Margarita Area Specific Plan owners and/or
developers are required to pay certain City-wide Transportation Impact Fees and
Margarita Specific Plan Area Add-On Traffic Fees and Park In-Lieu (?) Fees to the
City of San Luis Obispo; and
EE. WHEREAS, in order to induce the Developer to incur the Developer Costs (a
schedule of which, is attached hereto and incorporated herein by reference as Exhibit
“B”) the City of San Luis Obispo agrees to issue to the Developer Eligible Fee
credits or, as needed, reimbursement as established in this Agreement and authorized
under Section 16.20.110 of the City of San Luis Obispo Municipal Code with an
intent to compensate Developer for actual Developer Costs of Prado Road in excess
of its fair share. A schedule specifying the Eligible Fees for the construction of
single family units is attached as Exhibit “C”.
FF. WHEREAS, Developer has or will post a payment and performance bond, or other
security, as may be reasonably approved by the Public Works Director and Finance
Director (“Segments A, D and E Security Bond”), in the amount sufficient to secure
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Developer’s obligation to design and construct the individual segments of the Prado
Road Improvements for VTTM 2342 and 2353. After completion of improvements,
City agrees to release each Segment’s Bonds in accordance with the City Municipal
Code; and,
GG. WHEREAS, The City has found in connection with its review and consideration of
this Agreement that no subsequent or supplemental Environmental Impact Report is
necessary or required under CEQA because the terms and conditions of this
Agreement are consistent with and within the scope of and contemplated by the
FEIR adopted for the MASP and VTTM’s as required for implementation of the
mitigation measures thereunder; and
HH. WHEREAS, an east-west connection between South Higuera and Broad Street has
been formal City policy since the early 1960’s when it was included in the City’s
first General Plan; and
II. WHEREAS, several Environmental Impact Reports have been certified that included
Prado Road extension, including the 1994 Land Use and Circulation Elements, the
2000 Amendment to the Circulation Element, and the Airport and Margarita Specific
Plans. These EIR’s have analyzed the impacts associated with adding the road to the
circulation system and Circulation Element and its current alignment. Project
specific impacts were addressed in each environmental documents prepared for
Vesting Tract Maps; and
JJ. WHERAS, Developer and City entered into a Reimbursement Agreement for Tract
2342 covering reimbursements for Segment A of Prado Road, and the parties now
wish to amend and restate that agreement to include Segments A, D and E of Prado
Road that are necessary for Tracts 2342 and 2353.
Based on the foregoing, the parties agree as follows:
AGREEMENT
1. Terms. The foregoing recitals are deemed by both parties to be a material part of this
Agreement and are incorporated herein and binding on the parties by this reference.
2. Capitalized terms used in this Agreement will have the following meanings:
(a) “Agreement” means this agreement as executed by the Developer and the
City of San Luis Obispo.
(b) “Bonds” means a guaranty by a surety company acceptable to the City,
securing that if a contractor fails to perform the work required to comply with the approved Prado
Road Plans, the surety company will complete the work.
(c) “City “means the City of San Luis Obispo, a municipal corporation.
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(d) “Conditions of Approval (“COA”)” means the required Developer actions as
shown in Resolution 9776 and 9917 as adopted by the City of San Luis Obispo on March 7, 2006
and as modified on September 28, 2011, February 19th, 2013 and revisions, if any, as adopted by
Council on April 15th, 2014.
(e) “Developer” means ResCal SLO 193, LLC, a Delaware limited liability
company.
(f) “Developer Costs” means those costs specified in Exhibit “B” related to the
estimated cost of designing, permitting and constructing the Prado Road Improvements which shall
include the costs of the Goodwin Consulting Group Margarita Area Specific Plan analysis, and all
right-of-way acquisitions secured by Developer, for Segment A, if any. These costs shall not exceed
$3,492,203 unless they are decreased or increased, based upon the actual costs of construction after
bidding or for cost changes established in this Agreement with prior approval by the City Engineer,
or as authorized based upon Section 8 of this Agreement.
(g) “Eligible Fees” means the estimated Impact Fees for Tracts 2342 and 2353
that are eligible for credit or to reimburse the Developer for the actual costs of constructing road
infrastructure, which are in excess of the Project’s fair share as specified herein. Eligible Fees are
limited to Margarita Area Add On Transportation Impact Fees and Margarita Area Specific Plan
Add On Park Impact Fees as specified in Exhibit “C” for buildout of single family homes,
multifamily homes and business park properties in VTTM’s 2342 and 2353. No City Impact Fees
or Connection Fees not specifically included herein as Eligible Fees, as described above, shall be
available for credit or reimbursement.
(h) “Non Eligible Fees” All city impact fees or connection fees not specifically
included as Eligible Fees as describe above. Non Eligible fees include, but are not limited to,
Citywide Transportation Impact Fees for all other MASP projects.
(i) “Impact Fees” means fees as defined under Section 66000 (b) of the
California Government Code that were adopted by the City of San Luis Obispo and which apply to
the proposed development in the Margarita Area Specific Plan.
(j) “Plan Fees” means all Inspection and Processing Fees imposed by the City in
its review of the Prado Road Plans and Prado Road Improvements.
(k) “VTTM” means “Vesting Tentative Tract Map”. VTTM No. 2342 was
approved by Resolutions 9776 on March 7, 2006. VTTM No. 2353 was approved by Resolutions
9917 on March 7, 2006.
(l) “Margarita Area Specific Plan (“MASP”)” means the specific plan adopted
by the City of San Luis Obispo on October 12, 2004 by City Council Resolution Number 9615.
(m) “Segment A” is that portion of Prado Road designated as Segment A of the
Delivery Plan and shall consist of street frontage improvements including curb, gutter, sidewalk,
parkway landscaping, two 12-foot travel lanes, and a 5-foot bike lane/shoulder on the north side of
Prado and a 5-foot bike lane/shoulder on the south side of Prado. Segment A shall also include all
storm drainage, water, sewer and dry utilities per plan along its frontage along with a stub of
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REIMBURSEMENT AND IMPACT FEE CREDIT
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necessary utilities to the south side of Prado Road. and the improvements will include a transition
from the “Serra Meadows Road” entrance of Tract 2342 to the existing paved road section on the
south side of Prado Road.
(n) “Segment D” and “Segment E”consists of those portions of Prado Road
designated as Segment D and Segment E, respectively, of the Delivery Plan, a component of the
Prado Road Improvements, which is the street widening to accommodate up to 2 lanes and various
infrastructure, past the roundabout to east of the easterly most entry to VTTM 2353. These
segments of improvements will be constructed as part of development of Tract 2353 and shall
consist of street frontage improvements including curb, gutter, sidewalk, parkway landscaping on
the north side of the street, two 12-foot travel lanes, and a 5-foot bike lane/shoulder on the north
side of Prado. A 5-foot bike lane/shoulder on the south side of Prado shall be included in Segment
D. “Prado Road Plans” means plans and commensurate physical improvements approved by the
City of San Luis Obispo to construct Segments A, D, E of Prado Road as required by this
Agreement, the VTTMs for Tract 2342 and 2353 as depicted in Exhibit “A”.
3. City Obligations. In consideration of Developer’s agreement to design and
construct the Prado Road improvements, the City agrees:
(a) To cooperate and work with Developer to promptly secure all necessary
rights-of-way at Developer’s cost.
(b) Upon Developer’s completion (both full and partial) of the Prado Road
improvements as specified in the approved Prado Road Plans for each segment of improvements,
and upon notification to the City, the City shall inspect Prado Road improvements to determine
compliance with approved Prado Road Plans, engineering standards, and COAs. The City’s
inspection shall determine if there has been substantial conformance with approved Prado Road
Plans, engineering standards and the conditions of approval of VTTM 2342 and 2353. The City
agrees that satisfactory completion of Segment A shall constitute substantial conformance with
COA 1.a-h of VTTM 2342. The City also agrees that satisfactory completion of Segments D and E
shall constitute substantial conformance with COA 1.a-h of VTTM 2353. If the City determines
that the Prado Road Improvements do not meet the requirements of the approved Prado Road Plans,
engineering standards, and/or Agreement, then the City will provide written notice to Developer and
Developer will have sixty (60) days to correct or make substantial progress on addressing identified
deficiencies. If, after sixty (60) days, the deficiencies are not addressed and the City, at its sole
discretion, has determined that no substantial progress has occurred to address identified
deficiencies, the City can use the Bond to correct any deficiencies. If the City determines that the
Prado Road Improvements meet the requirements of the approved Prado Road Plans, engineering
standards, and Agreement, then the City shall take action within forty-five (45) days to accept Prado
Road improvements into the City’s maintained street system.
(c) To promptly provide credit against Eligible Fees due from Developer for
reimbursement to Developer for its Developer Costs pursuant to this Agreement, subject to the
terms and limitations set forth in this Agreement.
(d) To pay itself with fees paid for Inspection and Processing Fees (“Plan Fees”)
for the costs of inspecting the construction of Prado Road Improvements and for costs to review and
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REIMBURSEMENT AND IMPACT FEE CREDIT
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April 15, 2014
approve Prado Road Plans and specifications for Segment A, with these Plan Fees capped at
($148,350) and for Segments D and E, with these Plan Fees estimated at ($140,564) as specified in
Exhibit “B.”. Final Plan Check and Inspection fees for Tract 2353 improvements will be determined
at final improvement plan approval and for sake of this approval are currently estimated at $89,200.
These amounts reflects a credit for previous plan review fees collected from the prior applicant for
Tract 2342 that processed plans and specifications for a different Prado Road delivery project.
(e) To promptly release the Segment A Bond when Segment A is completed,
promptly release the Segment D Bond when Segment D is completed, and promptly release the
Segment E Bond when Segment E is completed.
(f) To inspect Prado Road improvements, review Prado Road Plans and approve
said plans, provided they are in compliance with approved conditions and engineering standards.
4. Developer Obligations. In consideration of City’s entering into the Agreement,
Developer agrees to:
(a) To construct Segments A, D and E of Prado Road Improvements according
to the approved plans or according to change orders approved pursuant to this agreement.
(b) Acquire all necessary rights-of-way, as specified in condition COA 1c, to
construct Segment A, D and E of the Prado Road Improvements consistent with approved Prado
Road Plans. If the Developer is unable to secure all necessary rights-of-way after demonstrating
that the Developer has reasonably exhausted negotiations, Developer shall pay the City’s costs to
acquire all necessary rights-of-way and shall be reimbursed with credits against Eligible Fees. If the
City is unable to acquire said rights-of-way or if the City Council ultimately decides not to pursue
acquisition, the City will work with the developer to modify Prado Road plans accordingly.
(c) Complete construction of Segment A, per approved plans, prior to occupancy
of the 31st unit within Tract 2342 or within twelve (12) months of issuance of the first building
permit (except for model homes), whichever occurs first, or within such longer period of time to
which both parties subsequently may agree in writing. Complete Segment D, per approved plans
prior to occupancy of the 15th unit of Phase I of Tract 2353 and Segment E prior to occupancy of
phase II of Tract 2353.
(d) Allow adjacent property owners to connect to the sub-regional basin,
provided that adjacent property owners pay Developer an amount not to exceed the actual real
property and construction costs incurred by Developer for the construction, maintenance and
operation of the detention basin. The sub-regional ponding basin is essential to provide adequate
drainage in the Western Enclave and to support planned residential development. The City agrees
prior to approving a project that has been designated to drain into said facility; it will give
Developer notice of said approval and any alternative drainage proposals in conflict with the
concept of the sub-regional basin.
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REIMBURSEMENT AND IMPACT FEE CREDIT
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(e) Reasonably allow vehicles for the purposes of construction requiring access
to APN’s 053-022-016 (King), 053-441-001(Davis), 053-441-002(L. Martinelli), and 053-441-003
(A. Martinelli), to travel on Prado Road and internal roads constructed on VTTMs prior to the
City’s acceptance of Prado Road and the internal roads at no cost until such time as Prado Road and
internal roads located on VTTM’s are accepted into the City’s maintained Road system, at which
time they will be open to the public. Such access shall not interfere with Developer’s construction
of the Project and will be subject to reasonable requirements as agreed upon by the property owners.
5. Terms of Construction. The parties agree that time is of the essence as to the
installation of the Prado Road Improvements. To that end, the following obligations and procedures
govern timing of the installation of the Prado Road Improvements:
(a) The Segment A, D and E Prado Road Improvements shall be completed in a
timely manner established in Section 4(C) above, all in a good and workmanlike manner, in
accordance with the Agreement and the approved Prado Road Plans, engineering standards, and
COAs. The City shall reconcile the amount of Eligible Fee credits, compared to the Developer
Costs actually incurred by Developer pursuant to this Section, within sixty (60) days after Segment
A of the Prado Road Improvements are complete and accepted by the City as specified in this
Agreement, in accordance with the Prado Road Plans, engineering standards, and this Agreement;
and
(i) The City Engineer has verified the Developer Costs, based on
documentation of actual costs incurred to be provided to the City by Developer, and approved the
Prado Road Improvements, as provided in Section 4 of this Agreement. Determination of eligible
costs for fee credit and reimbursement shall be within the City’s sole reasonable discretion.
(b) The Developer may request in writing that the City extend the milestones
established in this Agreement (“Milestone Completion Event(s)”) due to circumstances beyond
Developer’s control including:
(i) City submission of a substantial change order for the Prado Road
Improvements; or
(ii) The City’s or Developer’s inability to obtain the necessary rights-of-
way to construct the Prado Road Improvements; or
(iii) The City’s processing time to revise the approved Prado Road Plans,
if the City chooses to revise the scope of the Prado Road Improvements; or
(iv) Any City permitting delays, or if clearances or approvals are not
promptly issued by any federal, state, regional or local agency; or
(v) If any Force Majeure event, as provided in Section 10 of this
Agreement, occurs.
(vi) If through no act or omission of the City, Developer does not comply
with the Milestone Completion Event(s), City shall notify Developer, in writing that Developer has
not complied with the Milestone Completion Event(s). If Developer does not cure this failure to
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REIMBURSEMENT AND IMPACT FEE CREDIT
AGREEMENT FOR PRADO ROAD EXTENSION COSTS
April 15, 2014
satisfy the Milestone Completion Events within thirty (30) days, City shall withhold issuance of
certificates of occupancy and fee credits or reimbursement until Developer complies with the
Milestone Completion Events.
6. Proof of Developer Costs; Limits. Developer is entitled to fee credits and
reimbursements of documented Developer Costs for the Prado Road Improvements, as verified by
the City Engineer. It is intended that both City and Developer expenses shall be cost controlled and
limited in completing improvements to Prado Road. In no event shall the Developer Costs eligible
for reimbursement for Segment A exceed $1,131,265 of the available Eligible Fees from VTTM
2342. As shown in Exhibit C, the differential between the Developer Costs and Eligible Fees for
the residential component of VTTM 2342 is $1,131,265. If final Developer Costs should increase
or decrease pursuant to change orders or other cost modifications allowed in this Agreement, the
parties shall meet and confer to reach agreement on allocation of costs, which may be modified in
accordance with paragraph 8.
In no event shall the Developer Costs eligible for reimbursement from other entities for Segment D
and E exceed $294,139 of the available Eligible Fees from VTTM 2353 after full crediting for
single family residential units within that tract. In essence this is the anticipated remaining amount
of road improvments needing to be reimbursed after all single family residential credits have been
issued for both tracts. If final Developer Costs should increase or decrease pursuant to change
orders or other cost modifications allowed in this Agreement, the parties shall meet and confer to
reach agreement on allocation of costs, which may be modified in accordance with paragraph 8.
(a) Within thirty (30) days after submittal of documentation by Developer, the
City Engineer shall verify the Developer Costs, or shall submit a request in writing to Developer for
additional information deemed necessary by the City Engineer to verify Developer Costs. Such
additional information shall be submitted by the Developer to the City Engineer within thirty (30)
days from receipt of the written request by the City Engineer.
(b) The City Engineer shall complete all verification and approvals of each of the
three Segments of the Prado Road Improvements within thirty (30) days after Developer has
submitted any requested additional information to the City Engineer and the submittals are deemed
“Complete” by the City Engineer. The City Engineer shall determine “Final Developer Costs” and
shall reconcile the amount of Eligible Fee credits issued with the amount of Developer Costs
actually incurred for each Segment of the Prado Road Improvements upon verification of
completion of each Segment.
(c) City shall issue further fee credits for reimbursement payments to Developer
if the City collects Eligible Fees from Developer for future multi-family or non-residential phases of
project as approved in Vesting Tentative Tract Map No. 2342 and Tract 2353. In such a situation,
Developer shall not be obligated to pay the Eligible Fees upon issuance of building permits by the
City. If Developer sells or conveys these parcels to others, City shall collect the fees and pay to
Developer quarterly such collection after provisions in Section (d) are satisfied.
PH5 - 16
REIMBURSEMENT AND IMPACT FEE CREDIT
AGREEMENT FOR PRADO ROAD EXTENSION COSTS
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(d) City shall issue such reimbursements to Developer after it collects Eligible
Fees from other Western Enclave developers and property owners after paying any City interfund
loan obligations related to this agreement. The interest rate on the interfund loan charged from one
fund to the other shall be as close as administratively practical to the average rate of return for City
investments during the period of such interfund loan, as determined by the City Finance and
Information Technology Director. After repayment of the interfund loans the City then shall insure
that Developer shall be the first to receive such cash payments for reimbursement when Eligible
Fees are paid to the City by others up to the maximum reimbursement amount.
(e) The parties acknowledge that, except for right of way to be acquired for the
construction of the roundabout from the L Martinelli and Byron Davis properties, and the south side
of Prado Road across the Davis parcel, no right of way acquisition is required for the
implementation of the Delivery Plan for Segment A. The Developer shall work with property
owners on the south side of Prado Road to acquire ROW or easements (as necessary) to construct
Segments D and E of Prado Road improvements subject to approval of the Director of Public
Works. Transitions from new segments of Prado Road to existing development on the south side of
Prado Road (A. Martinelli) shall be installed pursuant to approved plans subject to approval of the
Director of Public Works.
7. Fee Credits and Developer Costs. In connection with Developer’s application for
building permits to be issued in connection with development of VTTM 2342 and Tract 2353, City
shall not impose or collect those fees otherwise due, but eligible for fee credits up to developer’s
documented costs of construction until such time as fee amounts due exceed Eligible Fee credits
for actual Prado Road improvement costs contained within this agreement. If MASP fee credits
applied to the two tracts exceed actual costs of Prado Road improvements, the City shall charge and
the developer shall pay as part of each subsequent building permit pertinent MASP impact fees.
Developer shall pay all other City Impact Fees in full.
In addition, the City acknowledges and agrees that issuance of some of the Eligible Fee credits may
require the City to issue loans, credits or charges, internally, from one or more City accounts to
other City accounts. Such internal City reconciliation shall have no impact upon Developer’s
entitlement to receive Eligible Fee credit issuance for all of Developer’s Cost as provided in Section
6 of this Agreement. Upon completion of each Segment of the Prado Road Improvements, City
shall reconcile and issue final confirmation of the amount of previously-issued Eligible Fee credits
and Developer Costs. If at the completion of any phase of development, the combination of
Eligible Fees are less than or do not equal the accumulated Developer Costs for all Phases, the
City’s obligation to issue subsequent Eligible Fee Credits is specified in Section 6(c) of this
Agreement. If at the completion of any phase of Development, the combination of Eligible Fees are
more than or exceed the accumulated Developer Costs for Segment A, the City’s obligation to issue
subsequent Eligible Fee Credits or reimbursement will be considered satisfied and this Agreement
will be considered complete, except that the Developer shall then be required to pay to the City all
remaining Eligible Fees that are greater than the costs to construct improvements as specified in this
agreement. All other Development Impact Fees shall be paid at time of the issuance of Building
Permits.
8. Scope of Agreement. This Agreement shall not be construed to limit the right of the
City to enlarge, relocate, alter or extend the Prado Road Improvements. However, it is understood
PH5 - 17
REIMBURSEMENT AND IMPACT FEE CREDIT
AGREEMENT FOR PRADO ROAD EXTENSION COSTS
April 15, 2014
that any changes to the Prado Road Improvements may result in corresponding adjustments to the
Developer Costs and the amount of Eligible Fee credits as set forth in the Agreement.
(a) There shall be no increase or decrease in cost from the Developer Cost unless
the increase is reflected in a change order submitted by Developer and approved by the City or vice
versa. The only change orders excepted from City approval are (a) those in which Developer shifts
cost savings from one line item of a component of the Developer Costs to another line item
(excluding use of project contingency), or (b) those for which Developer does not seek
reimbursement from the City. Project line item transfers shall be reported to the City.
(b) Furthermore, Developer and the City Engineer, together, may approve a
change order if the total Developer Cost increase is Twenty-Five Thousand Dollars ($25,000) or
less and the net total of the change orders theretofore approved does not exceed the contingency
amount. Developer and the City Manager together may approve a change order if the cost increase
is One Hundred Thousand Dollars ($100,000) or less and the net total of the change orders
theretofore approved does not exceed the contingency amount. Any change order in excess of
$100,000 above the Development Costs, shall require City Council approval.
(c) The City’s approval shall not be unreasonably withheld, delayed or
conditioned; provided it shall be reasonable for the City to deny any change order resulting from a
cause other than unforeseen conditions or City-initiated changes. The City shall accompany any
rejection with a written statement of the basis therefor. To the extent the change order does not
require City approval, Developer may proceed with the work covered by the change order pending
City approval of the change order, or even after City rejection of the change order, but Developer
shall do so at its own risk to the extent that the City raises valid objections to the change order
proposal. Any change order that is submitted to the City for approval shall be deemed accepted if
not accepted or rejected by the City within ten (10) working days of such submittal. Any change
order submitted that needs City Council approval shall be placed upon the first available City
Council agenda after the change order request has been deemed complete by the City Engineer.
9. Release. The Developer hereby releases and agrees to indemnify and save the City
harmless from and against any and all injuries to and deaths of persons and damage to property, and
all claims, costs, damages, demands, liability and losses howsoever the same may be caused and
whenever the same may appear, resulting directly or indirectly from the performance or
nonperformance of any work to design, construct, and/or install the Prado Road Improvements, and
also from any and all injuries to and deaths of persons and injuries to property or other interests and
all claims, costs damages, demands, liability and losses howsoever same may be caused and
whenever the same may appear, either directly or indirectly made or suffered by the Developer, the
Developer’s agents, employees, and subcontractors, while engaged in the performance of the
construction and installation of said Prado Road Improvements. Such release and indemnification
by the Developer is in effect only for acts or omissions by Developer arising from or relating to
construction of the Prado Road Improvements up until the time the City accepts each segment of the
Prado Road Improvements, or until thirty (30) days from the time the City receives: 1)notice from
the Developer that the Prado Road Improvements are complete and 2) they are accepted by the City
as set forth in Section 3 of this Agreement, whichever occurs first.
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REIMBURSEMENT AND IMPACT FEE CREDIT
AGREEMENT FOR PRADO ROAD EXTENSION COSTS
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10. Indemnification. Developer shall indemnify and hold City, its officers, employees
and agents harmless from and against any and all liability, claims, suits, actions, damages, and
causes of action arising out of any personal injury, bodily injury, loss of life, or damage to property,
or any violation of any federal, state or municipal law or ordinance, or other cause in connection
with the acts or omissions of Developer, its employees, subcontractors, or agents, or on account of
the performance or character of construction and installation of the Prado Road Improvements.
Such indemnification by Developer shall cease upon acceptance of the Prado Road Improvements
by the City. It is understood that the duty of Developer to indemnify and hold City harmless
includes the duty to defend City as set forth in section 2778 of the California Civil Code. Within
fifteen (15) days of City’s notice that it has been made a party to an action arising out of
Developer’s acts or omissions under this Agreement, Developer shall provide a defense to the City
in that action. In the event Developer fails to provide such a defense to City, Developer shall be
liable to the City for its attorneys'’ fees and litigation costs incurred to defend itself beginning on the
sixteenth (16th) day from the date of the City’s notice and request for a defense. Acceptance of
insurance certificates and endorsements required under this Agreement does not relieve Developer
from liability under this indemnification and hold harmless clause. This indemnification and hold
harmless clause shall apply whether or not such insurance policies shall have been determined to be
applicable to any of such damages or claims for damages.
11. Acceptance of the Prado Road Improvements. The Prado Road Improvements to be
constructed shall become the sole exclusive property of the City upon acceptance of said Prado
Road Improvements by the City. Developer shall notify City in writing when the Prado Road
Improvements are complete. Such notice shall be submitted to the City by personal delivery and
shall be deemed received by the City on the date of delivery. Such written notification shall include
a request that the City accept the Prado Road Improvements. The City shall accept the Prado Road
Improvements if it is determined that it was constructed consistent with the approved Prado Road
Plans, engineering standards, and Agreement within sixty (60) days from receipt of such
notification by Developer. If the City determines that the Prado Road Improvements do not meet
the requirements of the approved Prado Road Plans, engineering standards, or Agreement, then the
City will provide written notice to Developer and Developer will have sixty (60) days to correct or
make substantial progress on addressing identified deficiencies. If after sixty (60) days, the
deficiencies are not addressed and the City at its sole discretion has determined that no substantial
progress has occurred to address identified deficiencies, the City can use the performance and
payment bond to correct any deficiencies. Developer shall be responsible for securing a bond for
10% of the cost of said improvements to be held for one year, to ensure the work is adequately
guaranteed.
12. Legal Challenges. Nothing herein shall be construed to require City to defend any
third party claims and suits challenging any action taken by the City with regard to any procedure or
substantive aspect of the City’s approval of development of the Property, the environmental
process, the proposed uses of the Property, or the approval of this Agreement. The Developer may,
however, in its sole and absolute discretion appear as real party in interest in any such third party
action or proceeding. If such legal challenge is filed, City and Developer shall meet and confer to
mutually agree upon the appropriate actions to be undertaken by the parties. If the City defends
such action or proceeding, the Developer shall be responsible to reimburse the City for whatever
legal fees and costs, in their entirety, which may be incurred by the City in defense of such action or
proceeding. In the event the City, in its sole discretion, opts to defend any such action, the City,
PH5 - 19
REIMBURSEMENT AND IMPACT FEE CREDIT
AGREEMENT FOR PRADO ROAD EXTENSION COSTS
April 15, 2014
after consultation with Developer, shall retain such legal counsel as the City deems necessary and
appropriate. Applicant shall reimburse City in the event an award of court costs or attorney fees is
made against City in favor of any third party challenging any matter herein.
13. Force Majeure. The Term of this Agreement and the time within which Developer
shall be required to perform any act under this Agreement shall be extended by a period of time
equal to the number of days during which performance of such act is delayed unavoidably by
strikes, lock-outs, Acts of God, failure or inability to secure materials or labor by reason of priority
or similar regulations or order of any governmental or regulatory body, initiative or referenda,
moratoria, litigation filed attacking execution or performance of this Agreement, severe economic
downturn, enemy action, civil disturbances, fire, unavoidable casualties, or any other cause beyond
the reasonable control of Developer.
14. Successors and Assigns. Each and every provision of this Agreement shall be
binding and inure to the benefit of the successors in interest of the Parties hereto.
15. Term. This Agreement shall expire fifteen (15) years after the date of execution or
when reimbursements and credits are complete as identified in Section 7, whichever occurs first.
16. Integration. This is an integrated Agreement containing all of the consideration,
understandings, promises and covenants exchanged between the parties, notwithstanding the
Developer’s obligations as specified in the approved Conditions of Approvals as adopted in
Resolution Nos. 9776, 9917 and 9777, approving, respectively, Vesting Tentative Tract Map Nos.
2342 and 2353.
17. Construction and Interpretation. It is agreed and acknowledged by the parties that
the provisions of this Agreement have been arrived at through negotiation, and that the parties have
had a full and fair opportunity to revise the provisions of this Agreement and to have such
provisions reviewed by legal counsel. Therefore, the normal rule of construction that any
ambiguities are to be resolved against the drafting party shall not apply in construing or interpreting
this Agreement.
18. Jurisdiction. Any action by any party to this Agreement, or any action concerning a
security furnished pursuant thereto, shall be brought in the appropriate court of competent
jurisdiction within the County of San Luis Obispo, State of California, notwithstanding any other
provision of law which may provide that such action may be brought in some other location.
19. Choice of Law. This Agreement is made under and in all respects will be
interpreted, enforced and governed by the laws of the State of California.
20. Amendment. This Agreement cannot be altered, amended or modified in any way
without the express written consent of each party hereto or their authorized successor-in-interest.
21. Third Party Beneficiaries. Property owners, their heirs, successors and assigns, of
those properties to be benefitted by the provisions of paragraphs 4(e) and 4(f) (“Third Party
Owners”) of this Agreement are intended to be third party beneficiaries of this Agreement solely as
to those two sections. As such, said Third Party Owners shall have the right, at their sole cost and
discretion, to bring an action to enforce those two sections only. Nothing in this Agreement is
PH5 - 20
REIMBURSEMENT AND IMPACT FEE CREDIT
AGREEMENT FOR PRADO ROAD EXTENSION COSTS
April 15, 2014
intended or shall be construed to require the City to bring any action to enforce said provisions on
behalf of any Third Party Owner and the City shall not be liable to any party, beneficiary or Third
Party Owner for any costs, damages, liabilities, fees, or awards of any kind related to or arising
from the failure of a party to this Agreement to abide by or enforce the terms of paragraphs 3(f)
and/or 3(g). Except as specifically provided herein, this Agreement is made and entered into for the
sole protection and benefit of the parties and any successors or assign of the parties. No other
person shall have any right of action based upon any provisions of this Agreement.
22. Time is of Essence. Time is of the essence for this Agreement.
23. Notice. Notices under this Agreement shall be deemed given when delivered by
First Class Mail, Postage Prepaid, as follows:
City of San Luis Obispo City Clerk
990 Palm Street
San Luis Obispo, CA 93401
with a copy to:
City Attorney
990 Palm Street
San Luis Obispo, Ca 93401
Counterparts. This Agreement may be executed in one of more
Developer: ResCal SLO 193, LLC
Robert N. Goodman
10880 Wilshire Boulevard, Suite 1420
Los Angeles, CA 90024
with a copy to:
Allen Matkins Leck Gamble Mallory & Natsis LLP
John Condas, Esq.
1900 Main Street, 5th Floor
Irvine, CA 92614
24. Counterparts. This Agreement may be executed in one of more counterparts, each of
which shall be deemed an original, but all of which together shall constitute a single agreement.
25. Severability. If any one or more of the provisions contained in this Agreement shall
be found to be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not, in any way, be affected or impaired.
PH5 - 21
REIMBURSEMENT AND IMPACT FEE CREDIT
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26. Authority. The parties hereby represent that the persons executing this Agreement
are expressly authorized to do so for and on behalf of the parties.
27. Captions. The captions of the Sections of this Agreement are for convenience and
reference only, and are not intended and shall not be construed to define or limit the provision to
which they relate.
28. Recitals and Exhibits. The Recitals first set forth herein and all Exhibits attached
hereto are incorporated in this Agreement.
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REIMBURSEMENT AND IMPACT FEE CREDIT
AGREEMENT FOR PRADO ROAD EXTENSION COSTS
April 15, 2014
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the
day and year first above written.
ATTEST:
City Clerk
CITY OF SAN LUIS OBISPO
By:
Mayor Jan Marx
APPROVED AS TO FORM:
City Attorney
RESCAL SLO 193, LLC, a Delaware limited
liability company
By:
Name:
Title:
PH5 - 23
EXHIBIT “A”
DEPICTION AND SPECIFICATION OF PRADO ROAD IMPROVEMENTS
PH5 - 24
Bids
Units Quantity
Demolition and Earthwork
Sawcut LF 200.00
Asphalt Grind/Stockpile SF 29,500.00
Demo Storm Drain EA 1.00 27,125.00$
Demo Power Poles EA 5.00
Dem SD Culvert EA 1.00
Relocate Siren Pole(PGE & ATT) 2 EA 1.00 50,497.41$
Demo Fence LF 1,560.00
Misc Demolition LS 1.00
Rough Cut/Fill CY 12,500.00 79,250.00$
Rough Cut/Fill for Extended Shoulder1 CY 1,100.00 5,225.00$
Subgrades SF 75,000.00
Subtotal162,097.41$
Erosion Control
Hydroseed AC 0.50 29,150.00$
Stabilized Construction EntranceEA 1.00
Concrete Waste Area EA 1.00
Soil Stabilization SF 50,000.00
Storm Drain inlet Protection EA 3.00
Gravel BagsEA25.00
Fiber Rolls LF 2,500.00
Silt Fencing LF 1,350.00
Erosion Control Repair (Allowance)LS 1.00 10,000.00$
Subtotal39,150.00$
Water Lines
8" Water Lines LF 200.00 64,750.00$
8" Recycled Water Mains LF 150.00 29,450.00$
8" Valves EA 6.00
20" Valve EA 1.00
Recycled Water Service EA 1.00
Fire HydrantsEA 2.00
Subtotal94,200.00$
Sewer Lines
8" Sewer Lines LF 1,100.00
Sewer Manholes EA 7.00
Sewer Tie InEA 1.00
Subtotal50,800.00$
Storm Drains
Curb Inlets EA 3.00
2342
Exhibit B
Prado Road Segment "A" Developer Costs
Engineers Estimate 1/25/2013
PH5 - 25
Bids
Units Quantity
2342
Exhibit B
Prado Road Segment "A" Developer Costs
Engineers Estimate 1/25/2013
54" HDPE SD LF 287.00
48" HDPE SD LF 2,015.00
48" RCP SD LF 95.00
42" HDPE SD LF
36" HDPE SD LF
24" HDPE SD LF
18" SD LF 125.00
Headwall LS
Misc Connectors LS 1.00
Storm Drain Manholes EA 3.00
Storm Drain Junction Box (Large)EA 1.00
Storm Drain Junction Box (Medium)EA
Subtotal319,265.00$
PH5 - 26
Bids
Units Quantity
2342
Exhibit B
Prado Road Segment "A" Developer Costs
Engineers Estimate 1/25/2013
Street Improvements
Curb and Gutter LF 1,025.00 139,933.00$
Cross Gutter LF
Curbs LF 1,075.00
ADA Access Ramps EA 4.00
Street Lights EA 4.00
Street Light Circuits EA 4.00
Sidewalks SF 11,500.00
Pavers SF 3,700.00 72,200.00$
Street Signs EA 21.00 9,925.00$
Barricade EA 1.00
Street Striping LS 1.00 16,922.00$
AC Dike LF 900.00 444,300.00$
AC Paving 3 Tons 2,800.00
Class II Base Tons 9,200.00
Subtotal683,280.00$
Landscaping 1
Irrigation Sleeves 9,280.00$
Irrigation Controller 5,000.00$
Water Meter 564.00$
Trees EA 20.00 6,500.00$
Landscaping/Irrigation SF 16,500.00 66,000.00$
Subtotal87,344.00$
Hard Cost Subtotal1,436,136.41$
Contingency @ 5%71,806.82$
Estimated Hard Cost1,507,943.23$
Soft Costs
Mobilization 5 LS 1.00 5,000.00$
Civil Engineering (Full Design)LS 1.00 133,119.00$
Hydrology LS 1.00 4,000.00$
Landscape Architecture LS 1.00 7,912.50$
Survey LS 1.00 8,500.00$
Water meter connection fee 4 1.00 18,260.00$
Soils Engineering/Material Testing LS 1.00 15,000.00$
SWPP Monitoring LS 1.00 7,500.00$
Traffic Control with K-Rail5 LS 1.00 16,000.00$
Bonding Fees LS 1.75%26,389.01$
PH5 - 27
Bids
Units Quantity
2342
Exhibit B
Prado Road Segment "A" Developer Costs
Engineers Estimate 1/25/2013
Allocated Insurance LS 1.75%26,389.01$
Supervision/Construction Ovhd LS 2.25%33,928.72$
Blueprints LS 0.50%7,539.72$
City Plan Check and Inspection LS 1.00 191,370.00$
Credit Plan Check Fees for Prior Work LS 1.00 (43,020.00)$
Goodwin Report 5 LS 1.00 60,000.00$
Allocated Pond Cost (see detail)4.30%65,260.11$
Subtotal583,148.06$
Contingency @ 5%29,157.40$
Total Soft Costs612,305.46$
Total Costs:2,120,248.69$
PH5 - 28
TOTAL
CAT.
MOBILIZATION
MOVE IN COMPLETE JOB1 EA-$ -$ 1 EA -$ -$ -$
Mobilization Subtotal:-$ -$ -$
DEMO
SAWCUT 700 LF 1.50$ 1,050$ 500 LF 1.50$ 750$ 1,800$
ASPHALT REMOVAL 5,700 SF 1.00$ 5,700$ 4,500 SF 1.00$ 4,500$ 10,200$
CONCRETE CURB 10 LF 30.00$ 300$ 10 LF 30.00$ 300$ 600$
ADJUST WATER METER BOX TO GRADE 1 EA 300.00$ 300$ 300$
REMOVE FENCE 750 LF 1.50$ 1,125$ 500 LF 1.50$ 750$ 1,875$
REMOVE WARNING SIGNS 1 LS 500.00$ 500$ 500$
RELOCATE ARV VALVE 1 EA 1,500.00$ 1,500$ 1,500$
ABANDON WATER METER 1 EA 1,000.00$ 1,000$ 1,000$
ABANDON EXISTING WELL 1 EA 2,000.00$ 2,000$ 2,000$
REMOVE CONCRETE STORM DRAIN ENTRANCE 1 EA 1,500.00$ 1,500$ 1,500$
SLURRY EXIST 48" STORM DRAINS 1 LS 2,000.00$ 2,000$ 1 LS2,000.00$ 2,000$ 4,000$
Demo Subtotal:16,975$ 8,300$ 25,275$
EARTHWORK
Cut and Fill as Needed 1 LS25,000.00$ 25,000$ 1 LS20,000.00$ 20,000$ 45,000$
Remove Wet Area at Culverts 1 LS 2,500.00$ 2,500$ 1 LS2,500.00$ 2,500$ 5,000$
Finish Grade 1 LS 3,500.00$ 3,500$ 1 LS3,500.00$ 3,500$ 7,000$
Subgrade for Asphalt and Concrete 1 LS10,000.00$ 10,000$ 1 LS8,500.00$ 10,000$ 20,000$
Earthwork Subtotal:41,000$ 36,000$ 77,000$
SEWER
8" SDR 17 HDPE FUSED PIPE 550 LF 30.00$ 16,500$ 500 LF 30.00$ 15,000$ 31,500$
48" MANHOLES 1 Each3,200.00$ 3,200$ 2 Each3,200.00$ 6,400$ 9,600$
CLEANOUT 1 Each 800.00$ 800$ 1 Each 800.00$ 800$ 1,600$
Sewer Subtotal:20,500$ 22,200$ 42,700$
STORM DRAIN
18" HDPE 25 LF 42.00$ 1,050$ LF 42.00$ -$ 1,050$
36" HDPE 720 LF 60.00$ 43,200$ 700 LF 60.00$ 42,000$ 85,200$
48" HDPE 310 LF 95.00$ 29,450$ 150 LF 95.00$ 14,250$ 43,700$
54" HDPE 280 LF 130.00$ 36,400$ LF 130.00$ -$ 36,400$
TIE IN CUPLERS 2 EA 500.00$ 1,000$ 2 EA 500.00$ 1,000$ 2,000$
36" FLARED END SECTIONS 2 EA 700.00$ 1,400$ 2 EA 700.00$ 1,400$ 2,800$
7' WIDE CURB INLET 1 EA 4,200.00$ 4,200$ 2 EA4,200.00$ 8,400$ 12,600$
JUNCTION STRUCTURE 13.83 X 5.45'1 EA18,000.00$ 18,000$ 1 EA18,000.00$ 18,000$ 36,000$
JUNCTION STRUCTURE 14' X 6'1 EA19,000.00$ 19,000$ EA19,000.00$ -$ 19,000$
RIP RAP AT FLARED END SECTIONS 1 LS 500.00$ 500$ LS 500.00$ -$ 500$
TESTING 1 LS 2,500.00$ 2,500$ 1 LS2,500.00$ 2,500$ 5,000$
Storm Drain Subtotal:156,700$ 87,550$ 244,250$
WATER
8" DIP PIPE DOMESTIC 100 LF 55.00$ 5,500$ 150 LF 55.00$ 8,250$ 13,750$
6" DIP PIPE 80 LF 55.00$ 4,400$ LF 55.00$ -$ 4,400$
FIRE HYDRANT 1 EA 3,000.00$ 3,000$ 1 EA3,000.00$ 3,000$ 6,000$
8" FITTINGS 10 EA 500.00$ 5,000$ 5 EA 500.00$ 2,500$ 7,500$
8" GATE VALVES 3 EA 1,500.00$ 4,500$ 1 EA1,500.00$ 1,500$ 6,000$
6" GATE VALVES 2 EA 1,300.00$ 2,600$ EA1,300.00$ -$ 2,600$
8" PIPE RESTRAINTS / MEGA LUGS 35 EA 425.00$ 14,875$ EA 425.00$ -$ 14,875$
4" BLOW OFF 2 EA 2,000.00$ 4,000$ 1 EA2,000.00$ 2,000$ 6,000$
8" DIP PIPE RAW WATER LF 35.00$ -$ LF 35.00$ -$ -$
20" X 8" TAPPING SLEEVE / HOT TAP EA 5,000.00$ -$ EA5,000.00$ -$ -$
18" X 8" TAPPING SLEEVE / HOT TAP 1 EA 5,000.00$ 5,000$ EA5,000.00$ -$ 5,000$
1" ARV VALVE 2 EA 2,000.00$ 2,000$ EA2,000.00$ 2,000$ 4,000$
THRUST BLOCKS 13 EA 150.00$ 1,950$ 2 EA 150.00$ 300$ 2,250$
TESTING 1 LS 2,500.00$ 2,500$ 1 LS2,500.00$ 2,500$ 5,000$
SLURRY OVER WATERLINE 1 LS 1,000.00$ 1,000$ 1 LS1,000.00$ 1,000$ 2,000$
Water Subtotal:56,325$ 23,050$ 79,375$
SITE CONCRETE
6" CURB AND 24" GUTTER 675 LF 12.00$ 8,100$ 450 LF 12.00$ 5,400$ 13,500$
6" X 24" A CURB 530 LF 12.00$ 6,360$ LF 12.00$ -$ 6,360$
SIDEWALK 6,575 SF 4.00$ 26,300$ 3,500 SF 4.00$ 14,000$ 40,300$
HANDICAP RAMPS 2 EA 850.00$ 1,700$ 2 EA 850.00$ 1,700$ 3,400$
TRUNCATED DOMES 150 SF 35.00$ 5,250$ 150 SF 35.00$ 5,250$ 10,500$
BIKE RAMPS 250 SF 4.50$ 1,125$ 250 SF 4.50$ 1,125$ 2,250$
BASE AND SAND UNDER CONCRETE 1 LS 2,750.00$ 2,750$ 1 LS2,500.00$ 2,500$ 5,250$
Site Concrete Subtotal:51,585$ 29,975$ 81,560$
UNITCOST/UNITCOST
SEGMENT E
BASED ON SEGMENT E QUANTITIES AND SEGMENT D
UNIT COSTS; ADDED CONTINGENCY
ITEM COSTQT.UNITCOST/UNIT
SEGMENT D
QT.
Prado Construction Cost Estimate
BASED ON BIDS
PH5 - 29
TOTAL
CAT.UNITCOST/UNITCOST
SEGMENT E
BASED ON SEGMENT E QUANTITIES AND SEGMENT D
UNIT COSTS; ADDED CONTINGENCY
ITEM COSTQT.UNITCOST/UNIT
SEGMENT D
QT.
Prado Construction Cost Estimate
BASED ON BIDS
STREETS
8.125" ASPHALT24,020 SF4.60$ 110,492$ 20,500 SF4.60$ 94,300$ 204,792$
29.63" CLASS 2 BASE24,020 SF3.20$ 76,864$ 20,500 SF3.20$ 65,600$ 142,464$
TYPE A BERM525 LF7.00$ 3,675$ 500 LF7.00$ 3,500$ 7,175$
TACK COAT BETWEEN LIFTS24,020 SF0.03$ 721$ 20,500 SF0.03$ 615$ 1,336$
FOG SEAL24,020 SF0.05$ 1,201$ 20,500 SF0.05$ 1,025$ 2,226$
TEMPORARY PAVING1 LS1,500.00$ 1,500$ LS1,500.00$ -$ 1,500$
SOUTH SIDE AC TACK AND 3" CAP10,000 SF2.65$ 26,500$ SF2.65$ -$ 26,500$
Streets Subtotal:220,953$ 165,040$ 385,993$
DRY UTILITIES
STREET LIGHTS3 EA4,000.00$ 12,000$ 2 EA4,000.00$ 8,000$ 20,000$
2" CONDUIT FOR LIGHTS1 LS7,000.00$ 7,000$ 1 LS7,000.00$ 7,000$ 14,000$
JOINT TRENCHLF12.00$ -$ LF12.00$ -$ -$
2 - 6" PG&E CONDUITSLF12.00$ -$ LF12.00$ -$ -$
2 - 4" PHONE CONDUITSLF8.00$ -$ LF 8.00$ -$ -$
2 - 2" CATV CONDUITS LF 4.00$ -$ LF 4.00$ -$ -$
NO BOXES AT THIS TIME ( UNKNOWN )-$ -$ -$
GAS TRENCH 0 -$ -$ 0 -$ -$ -$
Dry Utilities Subtotal:19,000$ 15,000$ 34,000$
EROSION CONTROL
GRAVEL BAGS 50 EA 8.00$ 400$ 50 EA 8.00$ 400$ 800$
SILT FENCE 660 LF 2.00$ 1,320$ 660 LF 2.00$ 1,320$ 2,640$
STRAW WATTLES 510 LF 2.00$ 1,020$ 510 LF 2.00$ 1,020$ 2,040$
Erosion Control Subtotal:2,740$ 2,740$ 5,480$
MISCELLANEOUS
LANDSCAPING AND IRRIGATION 6,700 SF $3.2521,775$ 3,085 SF 3.25$ 10,026$ 31,801$
PAVERS/STAMPED CONCRETE 500 SF 10.00$ 5,000$ 500 SF 10.00$ 5,000$ 10,000$
LANDSCAPE SLEEVES 200 LF 15.00$ 3,000$ 200 LF 15.00$ 3,000$ 6,000$
STRIPING 1 LS 7,500.00$ 7,500$ 1 LS7,500.00$ 7,500$ 15,000$
TEMPORARY STRIPING 1 LS 1,500.00$ 1,500$ 1 LS1,500.00$ 1,500$ 3,000$
TRAFFIC CONTROL 1 LS 3,500.00$ 3,500$ 1 LS3,500.00$ 3,500$ 7,000$
TRAFFIC MARKINGS 1 LS 700.00$ 700$ 1 LS 700.00$ 700$ 1,400$
SIGNAGE 1 LS 2,800.00$ 2,800$ 1 LS2,800.00$ 2,800$ 5,600$
Miscellaneous Subtotal:45,775$ 34,026$ 79,801$
HARD COST TOTAL 631,553$ 423,881$ 1,055,434$
Contingency 5.0%31,578$ 15.0%63,582$ 95,160$
Total Hard Cost 663,130$ 487,463$ 1,150,594$
SOFT COSTS
Civil Engineering 18,000$ 13,232$ 31,232$
Landscape Architecture 5,240$ 3,852$ 9,092$
Survey 5,000$ 3,675$ 8,675$
Soils Engineering/Material Testing 5,000$ 3,675$ 8,675$
SWPP Monitoring 1,500$ 1,103$ 2,603$
Bonding Fees 1.75%11,605$ 1.75%8,531$ 20,135$
Allocated Insurance 1.75%11,605$ 1.75%8,531$ 20,135$
Supervision/Construction Ovhd 2.25%14,920$ 2.25%10,968$ 25,888$
Blueprints 0.50%3,316$ 0.50%2,437$ 5,753$
City Plan Check and Inspections 7.75%51,393$ 7.75%37,778$ 89,171$
Soft Cost Subtotal:127,578$ 93,782$ 221,360$
GRAND TOTAL 790,708$ 581,246$ 1,371,954$
PH5 - 30
EX
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PH5 - 31
FROM: Derek Johnson, Community Development Director
Daryl Grigsby, Public Works Director
Prepared by: Derek Johnson, Community Development Director
Tim Bochum, Deputy Director, Public Works
SUBJECT: MARGARITA AREA IMPACT FEE CREDIT AGREEMENT
FOR PRADO ROAD EXTENSION
RECOMMENDATION
1. Approve a Reimbursement and Impact Fee Credit Agreement with Rescal LLC. for the
purpose of reimbursing and crediting costs for the construction and oversizing of Prado
Road improvements consistent with the Margarita Area Specific Plan and Resolution No.
9776 and the corresponding conditions of Vesting Tentative Tract Map No. 2342.
2. Approve a Resolution authorizing the Finance and Information Technology Director to
cause an interfund loan for the purposes of constructing a portion of Prado Road.
REPORT IN BRIEF
This item requests City Council approval of a Reimbursement and Impact Fee Credit Agreement
(“Agreement”) and to authorize the Finance and Information Technology Director to cause an
interfund loan. Constructing Prado Road is the first critical step to realizing the land uses,
circulation, and economic benefits associated with the build out of the Margarita Area Specific
Plan (“MASP”). Without Prado Road, development cannot occur, and the circulation and
economic benefits will not be realized by the community.
The MASP was adopted in 2004 at the acme of the development boom. The MASP assumed a
coordinated, consistent, and comprehensive approach to public and private facilities. Three
vesting tract maps were approved in 2005 (known as the “western enclave”) and it was expected
that development would advance eastward. For a variety of reasons, including the economic
recession, the coordinated approach to development never occurred and two properties (formerly
Cowan and Deblauw) were eventually acquired by a new development team, Rescal LLC.
Rescal has been in frequent communications with City staff since doing its due diligence on the
property. The focus has been how to comply with the Prado Road conditions of approval.
Specifically, the question has been how to construct the western portion of Prado Road pursuant
to conditions of approval that were established under a different economic climate and
development market. The cost of building this portion of Prado Road exceeds the fair share
responsibility of the approved subdivisions. Therefore, Rescal must spend far more money to
complete portions of Prado Road than is their fair share in the MASP transportation fees. Thus
they have expressed concern about the timing associated with reimbursement for the work
PH5 - 32
through fee payments from other development in the MASP. In order to understand the financial
challenges and options associated with constructing the western portion and eventually the entire
Prado Road facility, a comprehensive reimbursement, fiscal and economic analysis was prepared
by Goodwin Consulting Group (“Goodwin”). Goodwin assisted the City in preparing the
original public facilities financing plan and was uniquely qualified to take on the task.
The reimbursement analysis compares the costs of extending Prado Road from its existing
terminus to Broad Street, which will be constructed by MASP developers. In addition, it
compares those costs to the transportation and park (citywide and MASP area specific) impact
fee obligations associated with future development within the MASP area. The report
specifically focuses on the advanced cost requirements and reimbursement needs of the
residential components of tracts 2342 and 2353. The analysis, which is based on market rate
representations of the developer, shows that fee credits and early reimbursement help advance
the project but are not necessary for the Rescal project to be financially feasible. This conclusion
leads to the proposed reimbursement agreement, and staff is recommending the use of MASP
Park fees to do early reimbursement as the park funds are not immediately needed.
Consequently, the proposed interfund loan will help the project advance and also provide a
greater investment return than the funds remaining in the developer impact fee fund.
There is a substantial capital outlay of Tract 2342 to build the first segment of the Prado Road
extension – approximately $2,120,250. This amount is slightly lower than the construction cost
estimate used in the Goodwin report since the developer has now obtained bids from their
contractor and they believe the costs of the improvements for Segment A will be a little less than
those used in the report. The report determined that the allocated Fair Share of Prado
Improvements for VTTM 2342 is $731,643 and specifically $432,452 for the residential
component of the tract. The Report also identified the cost of the initial phase of Prado Road
(Segment A) to be constructed by Developer are significantly in excess of that Fair Share. As an
inducement for Developer to construct desired improvements in excess of its fair share, staff
concludes it is appropriate to accelerate repayment to Developer through the allocation of MASP
Park impact fee credits from VTTM Nos. 2342, and from MASP Transportation fees other
residential and non-residential properties in the Margarita Area benefitting from these
improvements.
Finally, the Goodwin report reanalyzed the fiscal impacts and potential economic activity that
will be created by the buildout of the MASP area. As discussed later in this report the final
conclusions determined there are short and long term economic benefits for getting the MASP
development started and then completed. As such, City assistance in moving Prado Road
construction forward is an essential first step in MASP development.
PH5 - 33
DISCUSSION
Project History
The Margarita Area Specific Plan (MASP) and associated Environmental Impact Report were
approved and certified by the City Council in October 2004 with the primary goals of facilitating
the production of housing and a mix of business park and neighborhood commercial uses.
The MASP incorporates a comprehensive Public Facilities Financing Plan (Chapter 9) that was
created in alignment with the City’s 2003-05 Financial Plan policies. Up to 868 housing units are
accommodated in the plan which anticipated build-out within approximately 15 years (2019). A
portion of the area annexed and subdivided in 2003 with the remainder of the specific plan area
incorporated into the City in 2008.
The Council has approved vesting tentative maps for the three “Western Enclave” properties in
the Margarita Area following the adoption of the MASP. Rescal is the developer that acquired
the entitlements of two subdivisions in the Margarita Area (Tract 2342 and Tract 2353 –
formerly known as Cowan and DeBlauw). The City has been actively working with the
developers to finalize the Vesting Tentative Tract Map and comply with all conditions. The
primary condition which presents a considerable challenge and is the subject of the proposed
Agreement is the construction of the westerly portion of Prado Road and related frontage
improvements.
A summary of the two approved vesting tentative tract maps currently owned by Rescal, Inc. are
summarized as follows:
Property
Owner
Map No.
Date
Approved
BP
KSF 1
MF
Housing
Units
SF Housing
Units
Rescal 2342 3-7-06 20.11 56
Rescal 2253 3-7-06 18.29 23 121
Total * 38.40 23 177
* Excludes 23 affordable units to be developed by the Housing Authority as part of Tr 2353.
In addition to residential units, these properties also include mixed uses. Based on typical lot and
floor area assumptions for commercial uses, it is estimated that approximately 38,409 ft² of
business park/mixed use development will eventually be constructed within the two projects. It is
likely that Rescal will sell off these business park components of the subdivision at a future time
rather than develop them.
1 KSF=Thousand Square Feet
PH5 - 34
Prado Road Extension Costs and Phasing.
The MASP acknowledged that establishing the east-west connection of Prado Road between
Broad Street and Higuera Street at the earliest possible stage of development is a goal of the
Specific Plan and City development process. The MASP recognized that due to multiple
property ownership issues as well as development phasing of individual properties, plans for
phased implementation of Prado Road would be necessary.
As contained in the public financing program of the MASP the total estimated costs for Prado
Road Extension (PRE) are $21.48 million, summarized as follows by phase:
Estimated Prado Road Extension Costs
Phase 1: 4 Lane to M Street 5,881,028
Phase 2: Partial improvements: M to Broad (2 lanes)11,185,000
Phase 3: Remaining improvements: M to Broad (4 Lanes) 4,415,000
Total $21,481,028
These phases were developed in cooperation with the three subdivision owners in the western
area of the MASP known as the “Western Enclave”. They reflected perceived phases that were
achievable based upon the housing market at the time and the ability to privately finance a large
portion of infrastructure at early stages of development.
Approved vesting tentative maps for the WE properties established the following phasing of the
Prado Road extension (PRE) based on total WE housing units, subject to availability of right of
way:
Unit Occupancy PRE Improvements Phasing
1. Occupancy of 50 units Complete full PRE improvements to “M Street” (PRE-WE)
2. Occupancy of 100 units Complete construction plans & specs for full PRE improvements
to Broad Street (PRE-MB)
3. Occupancy of 200 units Start construction of 2 lanes to Broad Street (PRE-MB)
4. Occupancy of 300 units Complete construction of 2 lanes to Broad Street (PRE-MB)
Significant changes in economic conditions since the establishment of the MASP and conditions
of approval for the WE properties now make it infeasible to keep these phases and milestones for
initial delivery of the PRE.
Tract 2342, the smallest residential unit subdivision in the WE, is ready to move forward. It is,
however, unable to fully fund the previously established segments of Prado Road and carry a
reimbursement of over $4.9 million dollars of costs in excess of their fair share obligations. A
separate item on tonight’s agenda will ask Council to modify those conditions of approval and
establish Prado Road improvement requirements for Tract 2342 that are commensurate with the
size of their development. The significant changes proposed will be the further phasing of the
first segments of Prado Road improvements with relaxing of the milestone units required to
PH5 - 35
complete the PRE to “M Street”. In essence, the developer has requested, and staff concurs, with
breaking this portion of PRE into seven rather than three segments based upon current economic
and market conditions.
The previously identified first phase of Prado Road (PRE-WE) is now being developed in seven
sub-segments as outlined in the revised delivery plan submitted by Rescal. The new “first”
segment being completed by Tract 2342 is called Segment A and will complete substantial
improvements of Prado Road along the projects frontage that are more commensurate with that
developments true fair share of construction. This Segment is currently estimated to cost
$2,120,250.
As stated previously, Rescal is only moving forward at this time with the single family phases of
the projects that they own. This further complicates the ability of those projects to advance
substantial funding for needed improvements such as the significant capital outlay for the PRE.
The reimbursement agreement discussed in this report addresses the immediate reimbursement
and crediting needs for the first tract of single family homes (Tract 2342). Additional
reimbursement and crediting will be necessary when Tract 2353 moves forward with
development.
Why is a Reimbursement and Crediting Agreement needed?
Even with the reduction in initial costs for the first segment of PRE and the relaxed milestones
for delivery, the residential component of Tract 2342 is being required to fund a substantial
amount of improvements beyond (approximately $1,687,800) their fair share of the roadway
improvements.
The vesting tentative maps for all WE projects call for reimbursement agreements to provide for
credits (i.e. MASP Transportation Fees) and reimbursement (i.e. other impact fees) as necessary
for the substantial difference in the amount of Prado Road construction costs and the amount of
MASP transportation fees due under the adopted fee program 2. The MASP3 identified the use of
fee credits and other impact fees to advance reimbursement for projects that build public
improvements for construction costs that exceed the estimated amount of “fair share” impact
fees.
2 As a part of the submittal of the plan for improvements to Prado Road, the subdivider shall submit a reimbursement proposal and schedule for
the costs associated with the environmental, engineering and construction of Prado Road in its entirety, as established by the MASP. Subject to
final approval of the City, the proposal may include fee credits and/or other appropriate mechanisms that may be applied against non-TIF city-
wide and MASP impact fees as development occurs, to facilitate completion of the Prado Road extension.
3 9.5.3 Developer Financing: In many cases, developers fund facilities or dedicate land as a means of mitigating the impact of their
developments. For example, the City may impose, as a condition of development, construction of a facility that is needed, such as a roadway.
Once the roadway is constructed and accepted by the City, fee credits equal to the amount of the cost of the facility or the cost of the facility as
estimated in the capital improvement plan, can be issued to the developer. The developer can then apply them to offset fees imposed on his
development or enter into a reimbursement agreement for any constructed facility that is oversized.
PH5 - 36
Section 16.20.110 of the City’s Municipal Code defines the process and purpose of
reimbursement agreements. This section provides that reimbursement agreements are eligible
for projects that are in accordance with the following conditions:
1. Eligibility For improvements that that do not benefit a subdivision or site area;
2. Entered into a form approved by the City Attorney;
3. Accompanied by evidence so that reimbursement is limited to actual costs based on receipted
bills, canceled checks, or contracts.
Conditions
1. Improvements are installed by the developer of an adjoining or nearby property;
2. The improvements directly benefit the property currently being developed;
3. An agreement for reimbursement has been entered into by the city and developer who
installed these improvements;
4. Not more than fifteen years have elapsed since the execution of the reimbursement
agreement (i.e. if reimbursement is not made within 15 years, no reimbursement will be
made)
Under Section 16.20.110, funds are collected or credits and reimbursements are made in
accordance with the agreements. In no case does the City credit or reimburse more money than
it actually collects or for verifiable eligible costs than are expended to construct public
improvements. Any amounts not immediately reimbursed through credits or early
reimbursement loans are made with future funds collected from developers.
The Reimbursement Agreement
Attachment 1 is the proposed reimbursement agreement for Tract 2342 and Segment A
construction of the Prado Road Extension. The agreement covers costs incurred for permitting,
project design, construction and other issues associated with completing this segment of the road.
It is based upon the following basic principles:
1. Rescal is responsible for making and funding all Segment A improvements, including
related costs for design, permitting and construction of the roadway. These costs are
estimated to be $2,120,250.
2. Tract 2342 is responsible for its “fair share” of these costs: $731,643; of which, the
residential component’s share is: $432,452.
3. There is a substantial difference in these amounts (particularly for the residential
component of Tract 2342) that requires the development to “carry” these up-front costs
and await reimbursements from others for the improvements.
4. Total MASP Transportation Add on Fees (includes other projects besides Prado Road
extension) for the residential component of Tract 2342 are projected to be $534,556.
PH5 - 37
5. However, since Tract 2342 is responsible for advancing all costs crediting and
reimbursements should be given to reflect fair share participation by the City and others
to ameliorate the substantial fronting of these costs by the development.
6. Reimbursement and crediting will come solely from subsequent MASP sub-area fee
collections from the MASP Transportation and MASP Park fees. In essence the City will
“loan” potential fees from the MASP Park fees for the project rather than collecting and
holding them for future use in the MASP area.
7. The City receives “first” repayment of credited MASP Park fees used to assist Tract 2342
in offsetting their up-front costs for Prado Road improvements from all development in
the MASP except for Tract 2353 which will be used to first reimburse the Developer.
As drafted, the Agreement specifies that funds will be credited and/or reimbursed to the
developer for actual costs from developer paid MASP Park Fees, and MASP Transportation
Fees.
The Agreement satisfies both the eligibility and conditional requirements found in Section
16.20.110 et seq. of the City’s Municipal Ordinance. While the improvements offer a benefit to
the subdivision or site area, connecting Prado Road from Higuera to Broad Street provides
enhancements to the overall circulation system. The Agreement has been reviewed and approved
by the City Attorney and specifies that reimbursements will only be for actual costs based upon
the review of evidence by the City Engineer. The proposed Agreement has been prepared in
accordance with the tentative map approvals for these two properties and the Section 16.20.110
et seq. of the City’s Municipal Code.
Estimated Impact Fees
A study prepared by Goodwin Consulting Group, Inc. (January 4, 2013), concluded that
construction and related costs to design Prado Road as required by the conditions of approval
would be approximately $2,241,007.The project was recently competitively bid by the developer
and actual costs for Segment A will now be approximately $2,120,250. Tract 2342 MASP
Transportation fee contribution for its residential component towards these improvements is
$534,856. This amount is based on the MASP fees that took effect on July 1, 2012 and leaves an
estimated reimbursement amount of $1,585,394.
The proposed interfund loan proposes to advance $$454,128 from the MASP Park Improvement
account to the MASP Transportation account to help reduce this out of pocket cost. This will be
done via credits given to Tract 2342. This approach would result in an immediate credit of
$988,984 and remaining reimbursement due of $1,131,265. It is anticipated that this amount will
continue to be credited or reimbursed after additional Prado Road expenses are incurred for Tract
2353 and responsible construction of Segments D and E of the PRE. MASP Transportation and
Park Fees will be first credited and then used to reimburse Tract 2342 for outstanding balance of
Segment A costs. If Rescal sells off the business park components of their project, or if other
PH5 - 38
development occurs in the MASP, the reimbursement to the City for our interfund loan and to
Rescal will occur when that development happens.
The following table itemizes Prado Road costs and fees that would be available for credit and
reimbursement and the outstanding reimbursement after all eligible fees have been applied.
Single Family Units Constructed by Resmark for Tracts 2342 & 2353
Tract 2342Tract 2353Total
Estimated Costs Triggered - Prado Road
Segment A Triggered by Tract 2342 (2,120,249)$ (2,120,249)$
Segment D&E/Resmark - Tract 2353 (Ph III, IV)(1,031,200)$ (1,031,200)$
Total Costs Triggered by 177 Single Family Units (2,120,249)$ (1,031,200)$ (3,151,449)$
Eligible Fees:
Fee Obligation (Prior to Credits or Reimbursements)Fee
MASP Transportation Add On 9,551$ 534,856$ 1,155,671$ 1,690,527$
MASP Park Add on Fee 8,109$ 454,128$ 981,241$ 1,435,369$
Subtotal 988,984$ 2,136,912$ 3,125,896$
Fees Applied Against Prado Road Extension Costs
MASP Transportation Add On 534,856$ 1,155,671$ 1,690,527$
MASP Park Add on Fee 454,128$ 981,241$ 1,435,369$
Subtotal 988,984$ 2,136,912$ 3,125,896$
Remaining Fee Obligations -$ -$ -$
MASP Transportation Add On -$ -$ -$
MASP Park Add on Fee -$ -$ -$
Subtotal -$ -$ -$
Costs not covered by fee offset (Remaining Credit/Reimbursement)1,131,265$ 25,553$ 25,553$
Business Park Component (Transportation Add on Fee Only)(363,550)$ (330,500)$ (694,050)$
Other Eligible Fees: (To be Credited/Used if BP Uses occur prior to completion of
Residential components of Tr 2342 & 2353)
As shown in the table, even with crediting of the MASP Park fees, the residential component of
Tract 2342 has a substantial cost beyond their fair share of costs for Segment A of the Prado
Road extension. If the business park component of that tract were to come forward sooner than
expected this would help the situation but would not fully cover the remaining expense advanced
by Rescal.
Information for Tract 2353 has been shown in the above table to illustrate how the crediting will
come close to balancing costs and fees when all residential units in the two tracts (owned by
Rescal) are completed.
PH5 - 39
As Tract 2353 moves forward and receives its own conditions modifications and crediting
arrangement , reimbursement to Tract 2342 will be able to occur even after credit has been given
for Segment D & E construction cost. The final outcome that there will be close to a balancing
between fees credits and actual road construction costs incurred (a slight difference of $25,553).
The outstanding reimbursement would be repaid:
1. When Rescal builds out the entire project (i.e., the first phase of construction includes
177 single-family homes, future phases allow for the development of 23 multifamily
homes and 38,000 ft² of business park development), and
2. By future development after all interfund loans have been repaid with interest, and/or
3. A combination of 1. and 2.
The City’s Municipal Code provides that at the end of 15 years, if funds are not available to
reimburse Rescal for their unreimbursed costs that no additional reimbursement will occur. This
condition is consistent with section 16.20.110 (B) (4)4 of the City’s Municipal Code.
Rationale for Use of MASP Park and City-Wide Transportation Fees
AB 1600 allows interfund loans of one type of impact fee to fund unrelated improvements if the
loan is accompanied by a term and an interest rate. Interfund loans provide the ability to fund
improvements earlier than if the City had to wait to completely collect each specific type
development impact fee. Providing an interfund loan to advance the early repayment of
transportation costs from other impact fee funds has not been a common practice of the City
historically.
This approach is commonly applied in California to fund public improvements as the need for
one type of improvement does not always coincide with the timing of payment of impact fees
necessary to construct the improvement. The MASP identified this form of financing to construct
4 Conditions of Reimbursement Payments. Whenever property develops where:
1. Improvements have been installed by the developer of an adjoining or nearby property;
2. The improvements directly benefit the property currently being developed;
3. An agreement for reimbursement has been entered into by the city and developer who installed these improvements;
4. Not more than fifteen years have elapsed since the execution of the reimbursement agreement; and
5. The original developer has submitted satisfactory documentation. The city will attempt to collect from the benefiting party, prior to the
issuance of the development permits, a prorated share of the documented cost of improvements described in the reimbursement
agreement. Reimbursement will be in accordance with Section 66485 et seq. of the Subdivision Map Act as amended from time to time.
PH5 - 40
public infrastructure under the Other Financing Options 5 section. The MASP identified the
need to advance partial or full reimbursement of funds where a developer’s costs far exceed the
fair share.
Providing an interfund loan will not disrupt the timing of viability of the neighborhood park or
the delivery of planned citywide transportation improvements. If the interfund loan is
authorized, future MASP Transportation Fees from other development would 1) repay the MASP
Park Add-On Fee Fund and 2) then Rescal.
Interfund Loan Resolution
Concurrent with the Agreement, staff is recommending that the Finance and Information
Technology Director be authorized to cause the interfund loan to advance early reimbursement
of Prado Road costs from the MASP Park Fee account. This interfund loan poses no risk to the
General Fund. If repayment has not occurred at the conclusion of the loan, then the terms can be
extended by City Council. However, it is expected that the recovery of the housing market and
resurgence of the economy over the next decade will generate fees to repay this loans.
The term of the interfund loans are 15 years with an interest rate set at the average rate of return
for City investments as determined by the Finance and Information Technology Director.
Prepayment of the interfund loan can be made without any penalty. Interest costs will be offset
by future CPI adjustments to MASP development impact fees.
FISCAL IMPACT
No impact to the General Fund will occur as part of Agreement. The use of the interfund loan
will delay some revenue to the City for use in constructing park facilities in the MASP area
however, all park facilities are located on the Damon Garcia property and it is year away from
development. As such, delay of collection of these fees is not anticipate to cause and impact to
the impact fee funds since the use of these Park fees would occur many years from now.
Fiscal Impact Analysis
Goodwin completed a fiscal analysis to evaluate the recurring fiscal impacts of the entire MASP
building out. The conclusions of this analysis are that the additional development in the MASP
is expected to generate a slight annual surplus of approximately $125,000 to the City at full
buildout. The fiscal impacts of the MASP are estimated over a 15-year development period and
may vary depending on the types of development completed and the types of services required at
any given point in time.
5 Page 74: The City could also provide the necessary funding and then be reimbursed as impact fee revenue is collected. This could
be accomplished by borrowing from other City capital improvement funds and then repaying, with interest, the fund when impact fee
revenues are collected from the Airport and Margarita areas.
PH5 - 41
The estimated annual surplus at MASP buildout uses current (fiscal year 2011-12) revenue and
expense multipliers. If City expenses increase at a rate that exceeds the proportional rate of
revenue growth, the projected surplus will only materialize with reductions to service costs or an
actual reduction in services.
Economic Impact Analysis
Goodwin also summarizes the economic impacts of the buildout of the MASP area on the City’s
private sector economy. During construction, anticipated to transpire over a 15-year period, an
average of 472 new jobs per year will be needed and $726 million in direct impacts on industry
output in the City. Over a period of approximately 15 years to complete, construction-related
impacts will amount to 1% of the City economy on an annual basis.
After construction, all of the businesses operating in the City, including new businesses in the
MASP, will generate 4,530 jobs and will produce $537 million in economic activity, which is
approximately 8% of the current level of economic activity in the City.
Feasibility Analysis
Goodwin also produced a feasibility analysis of Tract 2342 based on the applicant’s pro forma.
Since this analysis contains confidential information it is not part of the agenda package. The
report conducts two tests of feasibility (burden-to-value and residual land value) to ascertain if
total infrastructure costs of Prado Road will place too heavy a burden on Resmark for the project
to be successful. The analysis concludes that the project is still feasible without the interfund
loan.
Nonetheless, staff recommends the interfund loan as a tool to “kick-start” the construction of
Prado Road to advance the development objectives of the MASP. The MASP is a Residential
Expansion Area designated to meet a major piece of the City’s future housing needs (868 units
total) and the Business Park component of the MASP is highlighted in the Economic
Development Specific Plan as a prime location for head-of-household jobs. Neither of these City
objectives can be realized without construction of Prado Road.
The MASP specifically envisions the need for reimbursement agreements and interfund loan.
The Goodwin reimbursement analysis assumes the interfund loan in the financing of Prado Road
construction. Tract 2342 as the first phase of the project is the critical link and “pioneer” for
development of the entire Margarita Area. This reimbursement agreement and interfund loans
are an incentive for Resmark to move forward into Tract 2353 as soon as possible. The quickest
way for Resmark to get reimbursed is start construction on the Tract 2353 project.
CONCURRENCES
The Public Works, Finance and Information Technology, and City Attorney concur with the
recommendations contained in this report.
PH5 - 42
ALTERNATIVES
1. Do not enter into the Agreement. Given the provisions of the tentative map approvals and
policies in the MASP, staff does not recommend this option.
2. Approve Agreement with Different Terms. Based on in-depth discussions with the
property owners, staff recommends that the proposed agreement as it best implements the
vesting tentative map approvals and intentions of the MASP.
ATTACHMENTS
1. Reimbursement Agreement
2. Interfund Loan Resolution
3. MASP Map
AVAILABLE FOR REVIEW IN THE COUNCIL OFFICE
Goodwin Group: January 4, 2013 Reimbursement, Fiscal, and Economic Analyses
t:\council agenda reports\2013\2013-02-19\reimbursement agreement_interfund loan agreement (johnson-bochum)\e-car tract2342 reimbursement agreement.doc
PH5 - 43
REIMBURSEMENT AND IMPACT FEE CREDIT AGREEMENT
FOR PRADO ROAD EXTENSION COSTS
This Agreement is made on _______________, 2013, by and between the City of San Luis
Obispo and ResCal SLO 193, LLC (“Developer"”).
Recitals
A. WHEREAS, on October 12, 2004, the San Luis Obispo City Council adopted the
Margarita Area Specific Plan by City Council Resolution Number 9615; and
B. WHEREAS, on March 7, 2006, the City Council adopted Resolution No. 9776 (2006
Series) approving Vesting Tentative Tract Map No. 2342; and,
C. WHEREAS, Chapter 2.3 of the City’s General Plan Land Use Element identifies the
Margarita Area as a Residential Expansion Area intended to accommodate San Luis
Obispo’s planned residential growth for the near future; and,
D. WHEREAS, Section 5.7.2 of the Margarita Area Specific Plan states that
establishing the east-west connection of Prado Road between Broad Street and
Higuera Street at the earliest possible stage is a goal of the Specific Plan since
construction of Prado Road will facilitate housing development in the Margarita
Area; and,
E. WHEREAS, Section 5.7.2 of the Margarita Area Specific Plan and the Vesting
Tentative Tract Map No. 2342 Condition of Approval 1.g. provide that the City will
consider a reimbursement agreement to help distribute and pay the costs of
designing, permitting and constructing portions of Prado Road; and,
F. WHEREAS, the Developer is responsible for completing design, permitting and
construction of portions of Prado Road that are beyond its fair share, are necessary
for orderly development of the Margarita Area and are contained in the MASP public
financing program; and,
G. WHEREAS, Pursuant to condition 1e of Resolution No. 9776, the City reserves the
right and the Property Owner, either current or future, shall not oppose the formation
of a community facilities district or other such financing mechanism that would fund
any final project costs for the construction of Prado Road Extension that are not
contained in the Margarita Area Specific Plan Impact Fee estimates.; and,
H. WHEREAS, the City has determined that the most efficient, expedient, and effective
approach to coordinate the construction of Prado Road concurrent with the housing
development Tract 2342 is for the Developer to construct Prado Road in
conformance with the City approved Delivery Plan of Prado Road; and,
I. WHEREAS, Section 66485 et seq. of the Subdivision Map Act authorizes a local
ordinance requirement that improvements installed by the subdivider for the benefit
of the subdivision shall contain supplemental size, capacity, number, or length for
PH5 - 44
the benefit of property not within the subdivision, and that those improvements be
dedicated to the public; and
J. WHEREAS, the City adopted Chapter 16.20. of San Luis Municipal Code in 2006
to require physical improvements including supplemental capacity for subdivisions
consistent with Section 66485 et seq. of the Subdivision Map Act; and,
K. WHEREAS, Chapter 16.20 of the San Luis Municipal Code was adopted to specify
the conditions and eligibility for reimbursement and this agreement meets these
requirements, provided that, if this Agreement is determined to be in conflict with
Chapter 16.20 of the San Luis Municipal Code, then San Luis Municipal Code shall
prevail; and,
L. WHEREAS, the City of San Luis Obispo has adopted Chapter 16.20 of the San Luis
Obispo Municipal Code to set forth the procedure and conditions for physical
improvement standards and procedures, including the reimbursement of costs
whenever improvements are required to be installed adjacent to property other than
that being developed or in greater size or capacity than required for the development
of the property under consideration; and,
M. WHEREAS, Section 9.6.1 and 9.7.2 of the Margarita Area Specific Plan and the
Conditions of Approval for Tract 2342 identified a reimbursement agreement as one
instrument to reimburse developers for costs to construct public facilities in excess of
those necessary to accommodate project requirements and,
N. WHEREAS, Section 9.6.1 of the Margarita Area Specific Plan identified
development impact fee credits and other impact fees (interfund loans) as potential
mechanisms to fund such public infrastructure improvements and their
reimbursements; and,
O. WHEREAS, the City’s Economic Development Strategic Plan’s (adopted October
16, 2012) primary goal is creation of head-of-household jobs through developing
strategies for infrastructure, focusing on promising growth sectors, and expediting
desired economic activity; and,
P. WHEREAS, Section 3.1 of the Economic Development Strategic Plan designates the
Business Park zone of the Margarita Area as accommodating professional-service,
research, and light manufacturing jobs that can support local households; and,
Q. WHEREAS, Sections 1.4 and 1.5 of the Economic Development Strategic Plan call
for exploring financing strategies for infrastructure that address timing/costs and
ensure that that new development is responsible for infrastructure costs only to the
extent there is a nexus between infrastructure requirements and project impacts; and,
R. WHEREAS, Section 1.9 of the Economic Development Strategic Plan contains a
strategy to work with developers that are willing to install infrastructure beyond the
new development’s “fair share’ requirement as an expedient way to provide new
infrastructure in the City’s Expansion Areas; and,
PH5 - 45
S. WHEREAS, the Economic Development Strategic Plan made findings that, in the
City’s expansion areas, there are limited “shovel ready” sites for new construction
due to the scale and cost of required public infrastructure and that key opportunity
sites need to be subdivided and/or lack infrastructure. These constraints add to the
time and complexity to bring projects online and have resulted in limited built office
and business park space large enough to accommodate the expansion of some
companies currently in the City and companies looking to relocate to the area.
T. WHEREAS, a report prepared by the Goodwin Consulting Group estimated that the
total jobs created by the buildout of the MASP to be approximately 7,081.5 and
472.1 new ongoing jobs at buildout; and
U. WHEREAS, Developer has constructed a drainage detention basin as required by the
VTTM Conditions of Approval and the Margarita Area Specific Plan at its sole
expense. The basin has been designed specifically to include surplus capacity
available for other parcels located in the Margarita Area Specific Plan as well as
drainage from the Prado Road improvements with the intent that said parcels and
roadway will be allowed to use such basin and, that Developer shall be reimbursed
with fair share contributions when other benefitting parcels develop, including the
Prado Road improvements as defined in this agreement; and,
V. WHEREAS, it is in the interest of orderly development that parcels in the Margarita
Area Specific Plan be able to connect to this drainage detention facility and that the
Developer recover a proportion of actual costs from other owners in the Margarita
Area Specific Plan for constructing the detention basin and related facilities, in
excess of its project needs; and,
W. WHEREAS, the construction of Prado Road and the internal roadway network for
Vesting Tentative Tract Map No. 2342 will provide access to adjacent parcels and it
is in the interest of public health and safety and orderly development to provide
reasonable access to these parcels prior to the City accepting Prado Road
improvements into the maintained City system; and,
X. WHEREAS, the Goodwin Report, dated January 4, 2013, has determined that the
allocated Fair Share of Prado Improvements for VTTM 2342 is $731,643 and
specifically $534,856 for the residential component of Tr 2342. The Report also
identified the cost of the initial phase(s) of Prado to be constructed by Developer are
significantly in excess of that Fair Share. As an inducement for Developer to
construct desired improvements in excess of its fair share, City concludes it is
appropriate to accelerate repayment to Developer through the allocation of impact
fee credits from VTTM Nos. 2342, and from other residential and non-residential
properties in the Margarita Area benefitting from the improvements.
Y. WHEREAS, the Prado Road Extension is to be designed and constructed in phases
as defined in this Agreement, the Delivery Plan, and Conditions of Approval 1.a-f.
Prado Road adjacent to Tract 2342 has been designed at Developer’s expense, and
plan checked and approved by the City. It is the intent of this Agreement to credit or
PH5 - 46
reimburse developer for all of the related design expenses. Final design of portions
of Prado Road at the easternmost edge of the Western Enclave will require additional
coordination with adjacent property owners as part of development of Tract 2353;
and,
Z. WHEREAS, if this Agreement is determined to be inconsistent with the Conditions
of Approval, the Conditions of Approval shall prevail; and
AA. WHEREAS, the City of San Luis Obispo has determined that the Prado Road
Improvements must be undertaken by Developer in Phases as defined in this
Agreement and according to the Delivery Plan.
BB. WHEREAS, Exhibit “A” to the Agreement and attached hereto provides the plan
schematic for the initial phase of construction (Segment A) as defined in this
Agreement and approved and permitted by the City, which are incorporated herein
by reference; and
CC. WHEREAS, Exhibit “A” to the Agreement and attached hereto provides conceptual
plans for subsequent phases of Prado Road Improvements as defined in the
Agreement and to be constructed by Developer or others; and,
DD. WHEREAS, in connection with obtaining a building permit for each business park,
office, single-family, multi-family unit, or other allowed land use within the
Margarita Area Specific Plan, Margarita Area Specific Plan owners and/or
developers are required to pay certain City-wide Transportation Impact Fees and
Margarita Specific Plan Area Add-On Traffic Fees and Park In -Lieu (?) Fees to the
City of San Luis Obispo; and
EE. WHEREAS, in order to induce the Developer to incur the Developer Costs (a
schedule of which, is attached hereto and incorporated herein by reference as Exhibit
“B”) the City of San Luis Obispo agrees to issue to the Developer Eligible Fee
credits or, as needed, reimbursement as established in this Agreement and authorized
under Section 16.20.110 of the City of San Luis Obispo Municipal Code with an
intent to compensate Developer for actual Developer Costs of Prado Road in excess
of its fair share. A schedule specifying the Eligible Fees for the construction of
single family units is attached as Exhibit “C”.
FF. WHEREAS, Developer has or will post a payment and performance bond, or other
security, as may be reasonably approved by the Public Works Director and Finance
Director (“Segment A Security Bond”), in the amount sufficient to secure
Developer’s obligation to design and construct Segment A of the Prado Road
Improvements for VTTM 2342. After completion of Segment A improvements, City
agrees to release the Segment A Bonds in accordance with the City Municipal Code;
and,
GG. WHEREAS, The City has found in connection with its review and consideration of
this Agreement that no subsequent or supplemental Environmental Impact Report is
PH5 - 47
necessary or required under CEQA because the terms and conditions of this
Agreement are consistent with and within the scope of and contemplated by the
FEIR adopted for the MASP and VTTM’s as required for implementation of the
mitigation measures thereunder; and
HH. WHEREAS, an east-west connection between South Higuera and Highway 227 has
been formal City policy since the early 1960’s when it was included in the City’s
first General Plan; and
II. WHEREAS, several Environmental Impact Reports have been certified that included
Prado Road extension, including the 1994 Land Use and Circulation Elements, the
2000 Amendment to the Circulation Element, and the Airport and Margarita Specific
Plans. These EIR’s have analyzed the impacts associated with adding the road to the
circulation system and Circulation Element and its current alignment. Project
specific impacts were addressed in each environmental documents prepared for
Vesting Tract Maps. The impending EIR for the Land Use and Circulation Elements
will look at the entire circulation network and consider the current alignment and
inclusion of Prado Road.
Based on the foregoing, the parties agree as follows:
AGREEMENT
1. Terms. The foregoing recitals are deemed by both parties to be a material part of this
Agreement and are incorporated herein and binding on the parties by this reference.
2. Capitalized terms used in this Agreement will have the following meanings:
(a) “Agreement” means this agreement as executed by the Developer and the
City of San Luis Obispo.
(b) “Bonds” means a guaranty by a surety company acceptable to the City,
securing that if a contractor fails to perform the work required to comply with the approved Prado
Road Plans, the surety company will complete the work.
(c) “City “means the City of San Luis Obispo, a municipal corporation.
(d) “Conditions of Approval (“COA”)” means the required Developer actions as
shown in Resolution 9776 as adopted by the City of San Luis Obispo on March 7, 2006 and as
modified on September 28, 2011 and revisions, if any, as adopted by Council on February 19th,
2013.
(e) “Developer” means ResCal SLO 193, LLC, a Delaware limited liability
compan y.
(f) “Developer Costs” means those costs specified in Exhibit “B” related to the
estimated cost of designing, permitting and constructing the Prado Road Improvements which shall
PH5 - 48
include the costs of the Goodwin Consulting Group Margarita Area Specific Plan analysis, and all
right-of-way acquisitions secured by Developer, if any. These costs shall not exceed $2,120,250
unless they are decreased or increased, based upon the actual costs of construction after bidding or
for cost changes established in this Agreement with prior approval by the City Engineer, or as
authorized based upon Section 8 of this Agreement.
(g) “Eligible Fees” means the estimated Impact Fees for Tract 2342 that are
eligible for credit or to reimburse the Developer for the actual costs of constructing road
infrastructure, which are in excess of the Project’s fair share as specified herein. Eligible Fees are
limited to Margarita Area Add On Transportation Impact Fees and Margarita Area Specific Plan
Add On Park Impact Fees as specified in Exhibit “C” for buildout of single family homes,
multifamily homes and business park properties in VTM 2342. No City Impact Fees or Connection
Fees not specifically included herein as Eligible Fees, as described above, shall be available for
credit or reimbursement. “Non Eligible Fees” All city impact fees or connection fees not
specifically included as Eligible Fees as describe above. Non Eligible fees include, but are not
limited to, Citywide Transportation Impact Fees for all other MASP projects..
(h) “Impact Fees” means fees as defined under Section 66000 (b) of the
California Government Code that were adopted by the City of San Luis Obispo and which apply to
the proposed development in the Margarita Area Specific Plan.
(i) “Plan Fees” means all Inspection and Processing Fees imposed by the City in
its review of the Prado Road Plans and Prado Road Improvements.
(j) “VTTM” means “Vesting Tentative Tract Map”. VTTM No. 2342 was
approved by Resolutions 9776 on March 7, 2006.
(k) “Margarita Area Specific Plan (“MASP”)” means the specific plan adopted
by the City of San Luis Obispo on October 12, 2004 by City Council Resolution Number 9615.
(l) “Segment A” is that portion of Prado Road designated as Segment A of the
Delivery Plan and shall consist of street frontage improvements including curb, gutter, sidewalk,
parkway landscaping, two 12-foot travel lanes, and a 5-foot bike lane/shoulder on the north side of
Prado and a 5-foot bike lane/shoulder on the south side of Prado. Segment A shall also include all
storm drainage, water, sewer and dry utilities per plan along its frontage along with a stub of
necessary utilities to the south side of Prado Road. and the improvements will include a transition
from the “Serra Meadows Road” entrance of Tr 2342 to the existing paved road section on the south
side of Prado Road.
(m) “Segment D” and “Segment E”consists of those portions of Prado Road
designated as Segment D and Segment E, respectively, of the Delivery Plan, a component of the
Prado Road Improvements, which is the street widening to accommodate up to 2 lanes and various
infrastructure, past the roundabout to east of the westerly most entry to VTTM 2353. These
segments of improvements will be constructed as part of development of Tract 2353 and may be
subject to their own reimbursement agreement with the City .
PH5 - 49
(n) “Prado Road Plans” means plans and commensurate physical improvements
approved by the City of San Luis Obispo to construct Segment A of Prado Road as required by this
Agreement, the VTTMs for Tract 2342 as depicted in Exhibit “A”.
3. City Obligations. In consideration of Developer’s agreement to design and
construct the Prado Road improvements, the City agrees:
(a) To cooperate and work with Developer to promptly secure all necessary
rights-of-way at Developer’s cost.
(b) Upon Developer’s completion (both full and partial) of the Prado Road
improvements as specified in the approved Prado Road Plans, and upon notification to the City, the
City shall inspect Prado Road improvements to determine compliance with approved Prado Road
Plans, engineering standards, and COAs. The City’s inspection shall determine if there has been
substantial conformance with approved Prado Road Plans, engineering standards and the conditions
of approval of VTTM 2342. The City agrees that satisfactory completion of Segment A shall
constitute substantial conformance with COA 1.a-h of VTTM 2342. If the City determines that the
Prado Road Improvements do not meet the requirements of the approved Prado Road Plans,
engineering standards, and/or Agreement, then the City will provide written notice to Developer and
Developer will have sixty (60) days to correct or make substantial progress on addressing identified
deficiencies. If, after sixty (60) days, the deficiencies are not addressed and the City, at its sole
discretion, has determined that no substantial progress has occurred to address identified
deficiencies, the City can use the Bond to correct any deficiencies. If the City determines that the
Prado Road Improvements meet the requirements of the approved Prado Road Plans, engineering
standards, and Agreement, then the City shall take action within forty-five (45) days to accept Prado
Road improvements into the City’s maintained street system.
(c) To promptly provide credit against Eligible Fees due from Developer for
reimbursement to Developer for its Developer Costs pursuant to this Agreement, subject to the
terms and limitations set forth in this Agreement.
(d) To pay itself with fees paid for Inspection and Processing Fees (“Plan Fees”)
for the costs of inspecting the construction of Prado Road Improvements and for costs to review and
approve Prado Road Plans and specifications for Segment A, with these Plan Fees capped at
($148,350). as specified in Exhibit “B.”. This amount reflects a credit for previous plan review fees
collected from the prior applicant for Tr 2342 that processed plans and specifications for a different
Prado Road delivery project.
(e) To promptly release the Segment A Bond when Segment A is completed,
promptly release the Segment D Bond when Segment D is completed, and promptly release the
Segment E Bond when Segment E is completed.
(f) To inspect Prado Road improvements, review Prado Road Plans and approve
said plans, provided they are in compliance with approved conditions and engineering standards.
4. Developer Obligations. In consideration of City’s entering into the Agreement,
Developer agrees to:
PH5 - 50
(a) To construct the Segment A Prado Road Improvements according to the
approved plans or according to change orders approved pursuant to this agreement.
(b) Acquire all necessary rights-of-way, as specified in condition COA 1c, to
construct Segment A of the Prado Road Improvements consistent with the approved Prado Road
Plans. If the Developer is unable to secure all necessary rights-of-way after demonstrating that the
Developer has reasonably exhausted negotiations, Developer shall pay the City’s costs to acquire all
necessary rights-of-way and shall be reimbursed with credits against Eligible Fees. If the City is
unable to acquire said rights-of-way or if the City Council ultimately decides not to pursue
acquisition, the City will work with the developer to modify Prado Road plans accordingly.
(c) Complete construction of Segment A, per approved plans, prior to occupancy
of the 31st unit within Tract 2342 or within twelve (12) months of issuance of the first building
permit (except for model homes), whichever occurs first, or within such longer period of time to
which both parties subsequently may agree in writing.
(d) Allow adjacent property owners to connect to the sub-regional basin,
provided that adjacent property owners pay Developer an amount not to exceed the actual real
property and construction costs incurred by Developer for the construction, maintenance and
operation of the detention basin. The sub-regional ponding basin is essential to provide adequate
drainage in the Western Enclave and to support planned residential development. The City agrees
prior to approving a project that has been designated to drain into said facility; it will give
Developer notice of said approval and any alternative drainage proposals in conflict with the
concept of the sub-regional basin.
(e) Reasonably allow vehicles for the purposes of construction requiring access
to APN’s 053-022-016 (King), 053-441-001(Davis), 053-441-002(L. Martinelli), and 053-441-003
(A. Martinelli), to travel on Prado Road and internal roads constructed on VTTMs prior to the
City’s acceptance of Prado Road and the internal roads at no cost until such time as Prado Road and
internal roads located on VTTM’s are accepted into the City’s maintained Road system, at which
time they will be open to the public. Such access shall not interfere with Developer’s construction
of the Project and will be subject to reasonable requirements as agreed upon by the property owners.
5. Terms of Construction. The parties agree that time is of the essence as to the
installation of the Prado Road Improvements. To that end, the following obligations and procedures
govern timing of the installation of the Prado Road Improvements:
(a) The Segment A Prado Road Improvements shall be completed in a timely
manner established in Section 4(C) above, all in a good and workmanlike manner, in accordance
with the Agreement and the approved Prado Road Plans, engineering standards, and COAs. The
City shall reconcile the amount of Eligible Fee credits, compared to the Developer Costs actually
incurred by Developer pursuant to this Section, within sixty (60) days after Segment A of the Prado
Road Improvements are complete and accepted by the City as specified in this Agreement, in
accordance with the Prado Road Plans, engineering standards, and this Agreement; and
PH5 - 51
(i) The City Engineer has verified the Developer Costs, based on
documentation of actual costs incurred to be provided to the City by Developer, and approved the
Prado Road Improvements, as provided in Section 4 of this Agreement. The City shall have sole
determination to reasonably determine eligible costs for fee credit and reimbursement.
(b) The Developer may request in writing that the City extend the milestones
established in this Agreement (“Milestone Completion Event(s)”) due to circumstances beyond
Developer’s control including:
(i) City submission of a substantial change order for the Prado Road
Improvements; or
(ii) The City’s or Developer’s inability to obtain the necessary rights-of-
way to construct the Prado Road Improvements; or
(iii) The City’s processing time to revise the approved Prado Road Plans,
if the City chooses to revise the scope of the Prado Road Improvements; or
(iv) Any City permitting delays, or if clearances or approvals are not
promptly issued by any federal, state, regional or local agency; or
(v) If any Force Majeure event, as provided in Section 10 of this
Agreement, occurs.
(vi) If through no act or omission of the City, Developer does not comply
with the Milestone Completion Event(s), City shall notify Developer, in writing that Developer has
not complied with the Milestone Completion Event(s). If Developer does not cure this failure to
satisfy the Milestone Completion Events within thirty (30) days, City shall withhold issuance of
certificates of occupancy and fee credits or reimbursement until Developer complies with the
Milestone Completion Events.
6. Proof of Developer Costs; Limits. Developer is entitled to fee credits and
reimbursements of documented Developer Costs for the Prado Road Improvements, as verified by
the City Engineer. It is intended that both City and Developer expenses shall be cost controlled and
limited in completing improvements to Prado Road. In no event shall the Developer Costs eligible
for reimbursement for Segment A exceed $1,131,265 of the available Eligible Fees from VTTM
2342. As shown in Exhibit C, the differential between the Developer Costs and Eligible Fees for
the residential component of VTTM 2342 is $1,131,265. If final Developer Costs should increase
or decrease pursuant to change orders or other cost modifications allowed in this Agreement, the
parties shall meet and confer to reach agreement on allocation of costs and may be modified in
accordance with paragraph 8.
(a) Within thirty (30) days after submittal of documentation by Developer, the
City Engineer shall verify the Developer Costs, or shall submit a request in writing to Developer for
additional information deemed necessary by the City Engineer to verify Developer Costs. Such
additional information shall be submitted by the Developer to the City Engineer within thirty (30)
days from receipt of the written request by the City Engineer.
PH5 - 52
(b) The City Engineer shall complete all verification and approvals of each of the
three Segments of the Prado Road Improvements within thirty (30) days after Developer has
submitted any requested additional information to the City Engineer and the submittals are deemed
“Complete” by the City Engineer. The City Engineer shall determine “Final Developer Costs” and
shall reconcile the amount of Eligible Fee credits issued with the amount of Developer Costs
actually incurred for each Segment of the Prado Road Improvements upon verification of
completion of each Segment.
(c) City shall issue further fee credits for reimbursement payments to Developer
if the City collects Eligible Fees from Developer for future multi-family or non-residential phases of
project as approved in Vesting Tentative Tract Map No. 2342. In such a situation, Developer shall
not be obligated to pay the Eligible Fees upon issuance of building permits by the City. Currently
the Developer owns adjacent Tract 2353 and it is intended that credits against Eligible Fees from
that development will also be used to reimburse Developer for advance costs in constructing
Segment A Prado Road improvements. In such a situation, Developer shall not be obligated to pay
the Eligible Fees upon issuance of building permits by the City. If Developer sells or conveys
these parcels to others, City shall collect the fees and pay to Developer quarterly such collection
after provisions in Section (d) are satisfied.
(d) City shall issue such reimbursements to Developer after it collects Eligible
Fees from other Western Enclave developers and property owners after paying any City interfund
loan obligations related to this agreement, notwithstanding any provision of any law, San Luis
Obispo Municipal Code or this reimbursement agreement. The interest rate on the interfund loan
shall be as close as administratively practical to the average rate of return for City investments
during the period of such interfund loan, as determined by the City Finance and Information
Technology Director. After repayment of the interfund loans the City then shall insure that
Developer shall be the first to receive such cash payments for reimbursement when Eligible Fees
are paid to the City by others up to the maximum reimbursement amount.
(e) The parties acknowledge that, except for right of way to be acquired for the
construction of the roundabout from the L Martinelli and Byron Davis properties, and the south side
of Prado Road across the Davis parcel, no right of way acquisition is required for the
implementation of the Delivery Plan for Segment A.
7. Fee Credits and Developer Costs. In connection with Developer’s application for
building permits to be issued in connection with development of VTTM 2342, City shall not impose
or collect Eligible Fee credits for documented costs of construction, based upon the Developer
Costs. Developer shall pay all other Impact Fees in full.
In addition, the City acknowledges and agrees that issuance of some of the Eligible Fee credits may
require the City to issue loans, credits or charges, internally, from one or more City accounts to
other City accounts. Such internal City reconciliation shall have no impact upon Developer’s
entitlement to receive Eligible Fee credit issuance for all of Developer’s Cost as provided in Section
6 of this Agreement. Upon completion of each Segment of the Prado Road Improvements, City
shall reconcile and issue final confirmation of the amount of previously-issued Eligible Fee credits
and Developer Costs. If at the completion of any phase of development, the combination of
Eligible Fees are less than or do not equal the accumulated Developer Costs for all Phases, the
PH5 - 53
City’s obligation to issue subsequent Eligible Fee Credits is specified in Section 6(c) of this
Agreement. If at the completion of any phase of Development, the combination of Eligible Fees are
more than or exceed the accumulated Developer Costs for Segment A, the City’s obligation to issue
subsequent Eligible Fee Credits or reimbursement will be considered satisfied and this Agreement
will be considered complete, except that the Developer shall then be required to pay to the City all
remaining Eligible Fees that are greater than the costs to construct improvements as specified in this
agreement. All other Development Impact Fees shall be paid at time of the issuance of Building
Permits.
8. Scope of Agreement. This Agreement shall not be construed to limit the right of the
City to enlarge, relocate, alter or extend the Prado Road Improvements. However, it is understood
that any changes to the Prado Road Improvements may result in corresponding adjustments to the
Developer Costs and the amount of Eligible Fee credits as set forth in the Agreement.
(a) There shall be no increase or decrease in cost from the Developer Cost unless
the increase is reflected in a change order submitted by Developer and approved by the City or vice
versa. The only change orders excepted from City approval are (a) those in which Developer shifts
cost savings from one line item of a component of the Developer Costs to another line item
(excluding use of project contingency), or (b) those for which Developer does not seek
reimbursement from the City. Project line item transfers shall be reported to the City.
(b) Furthermore, Developer and the City Engineer, together, may approve a
change order if the total Developer Cost increase is Twenty-Five Thousand Dollars ($25,000) or
less and the net total of the change orders theretofore approved does not exceed the contingency
amount. Developer and the City Manager together may approve a change order if the cost increase
is One Hundred Thousand Dollars ($100,000) or less and the net total of the change orders
theretofore approved does not exceed the contingency amount. Any change order in excess of
$100,000 above the Development Costs, shall require City Council approval.
(c) The City’s approval shall not be unreasonably withheld, delayed or
conditioned; provided it shall be reasonable for the City to deny any change order resulting from a
cause other than unforeseen conditions or City-initiated changes. The City shall accompany any
rejection with a written statement of the basis therefor. To the extent the change order does not
require City approval, Developer may proceed with the work covered by the change order pending
City approval of the change order, or even after City rejection of the change order, but Developer
shall do so at its own risk to the extent that the City raises valid objections to the change order
proposal. Any change order that is submitted to the City for approval shall be deemed accepted if
not accepted or rejected by the City within ten (10) working days of such submittal. Any change
order submitted that needs City Council approval shall be placed upon the first available City
Council agenda after the change order request has been deemed complete by the City Engineer.
9. Release. The Developer hereby releases and agrees to indemnify and save the City
harmless from and against any and all injuries to and deaths of persons and damage to property, and
all claims, costs, damages, demands, liability and losses howsoever the same may be caused and
whenever the same may appear, resulting directly or indirectly from the performance or
nonperformance of any work to design, construct, and/or install the Prado Road Improvements, and
also from any and all injuries to and deaths of persons and injuries to property or other interests and
PH5 - 54
all claims, costs damages, demands, liability and losses howsoever same may be caused and
whenever the same may appear, either directly or indirectly made or suffered by the Developer, the
Developer’s agents, employees, and subcontractors, while engaged in the performance of the
construction and installation of said Prado Road Improvements. Such release and indemnification
by the Developer is in effect only for acts or omissions by Developer arising from or relating to
construction of the Prado Road Improvements up until the time the City accepts each segment of the
Prado Road Improvements, or until thirty (30) days from the time the City receives: 1)notice from
the Developer that the Prado Road Improvements are complete and 2) they are accepted by the City
as set forth in Section 3 of this Agreement, whichever occurs first.
10. Indemnification. Developer shall indemnify and hold City, its officers, employees
and agents harmless from and against any and all liability, claims, suits, actions, damages, and
causes of action arising out of any personal injury, bodily injury, loss of life, or damage to property,
or any violation of any federal, state or municipal law or ordinance, or other cause in connection
with the acts or omissions of Developer, its employees, subcontractors, or agents, or on account of
the performance or character of construction and installation of the Prado Road Improvements.
Such indemnification by Developer shall cease upon acceptance of the Prado Road Improvements
by the City. It is understood that the duty of Developer to indemnify and hold City harmless
includes the duty to defend City as set forth in section 2778 of the California Civil Code. Within
fifteen (15) days of City’s notice that it has been made a party to an action arising out of
Developer’s acts or omissions under this Agreement, Developer shall provide a defense to the City
in that action. In the event Developer fails to provide such a defense to City, Developer shall be
liable to the City for its attorneys'’ fees and litigation costs incurred to defend itself beginning on the
sixteenth (16th) day from the date of the City’s notice and request for a defense. Acceptance of
insurance certificates and endorsements required under this Agreement does not relieve Developer
from liability under this indemnification and hold harmless clause. This indemnification and hold
harmless clause shall apply whether or not such insurance policies shall have been determined to be
applicable to any of such damages or claims for damages.
11. Acceptance of the Prado Road Improvements. The Prado Road Improvements to be
constructed shall become the sole exclusive property of the City upon acceptance of said Prado
Road Improvements by the City. Developer shall notify City in writing when the Prado Road
Improvements are complete. Such notice shall be submitted to the City by personal delivery and
shall be deemed received by the City on the date of delivery. Such written notification shall include
a request that the City accept the Prado Road Improvements. The City shall accept the Prado Road
Improvements if it is determined that it was constructed consistent with the approved Prado Road
Plans, engineering standards, and Agreement within sixty (60) days from receipt of such
notification by Developer. If the City determines that the Prado Road Improvements do not meet
the requirements of the approved Prado Road Plans, engineering standards, or Agreement, then the
City wi ll provide written notice to Developer and Developer will have sixty (60) days to correct or
make substantial progress on addressing identified deficiencies. If after sixty (60) days, the
deficiencies are not addressed and the City at its sole discretion has determined that no substantial
progress has occurred to address identified deficiencies, the City can use the performance and
payment bond to correct any deficiencies. Developer shall be responsible for securing a bond for
10% of the cost of said improvements to be held for one year, to ensure the work is adequately
guaranteed.
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12. Legal Challenges. Nothing herein shall be construed to require City to defend any
third party claims and suits challenging any action taken by the City with regard to any procedure or
substantive aspect of the City’s approval of development of the Property, the environmental
process, the proposed uses of the Property, or the approval of this Agreement. The Developer may,
however, in its sole and absolute discretion appear as real party in interest in any such third party
action or proceeding. If such legal challenge is filed, City and Developer shall meet and confer to
mutually agree upon the appropriate actions to be undertaken by the parties. If the City defends
such action or proceeding, the Developer shall be responsible to reimburse the City for whatever
legal fees and costs, in their entirety, which may be incurred by the City in defense of such action or
proceeding. In the event the City, in its sole discretion, opts to defend any such action, the City,
after consultation with Developer, shall retain such legal counsel as the City deems necessary and
appropriate. Applicant shall reimburse City in the event an award of court costs or attorney fees is
made against City in favor of any third party challenging any matter herein.
13. Force Majeure. The Term of this Agreement and the time within which Developer
shall be required to perform any act under this Agreement shall be extended by a period of time
equal to the number of days during which performance of such act is delayed unavoidably by
strikes, lock-outs, Acts of God, failure or inability to secure materials or labor by reason of priority
or similar regulations or order of any governmental or regulatory body, initiative or referenda,
moratoria, litigation filed attacking execution or performance of this Agreement, severe economic
downturn, enemy action, civil disturbances, fire, unavoidable casualties, or any other cause beyond
the reasonable control of Developer.
14. Successors and Assigns. Each and every provision of this Agreement shall be
binding and inure to the benefit of the successors in interest of the Parties hereto.
15. Term. This Agreement shall expire fifteen (15) years after the date of execution or
when Tract 2342 reimbursements and credits are complete as identified in Section 7, whichever
occurs first..
16. Integration. This is an integrated Agreement containing all of the consideration,
understandings, promises and covenants exchanged between the parties, notwithstanding the
Developer’s obligations as specified in the approved Conditions of Approvals as adopted in
Resolution Nos. 9776 and 9777, approving, respectively, Vesting Tentative Tract Map Nos. 2342.
17. Construction and Interpretation. It is agreed and acknowledged by the parties that
the provisions of this Agreement have been arrived at through negotiation, and that the parties have
had a full and fair opportunity to revise the provisions of this Agreement and to have such
provisions reviewed by legal counsel. Therefore, the normal rule of construction that any
ambiguities are to be resolved against the drafting party shall not apply in construing or interpreting
this Agreement.
18. Jurisdiction. Any action by any party to this Agreement, or any action concerning a
security furnished pursuant thereto, shall be brought in the appropriate court of competent
jurisdiction within the County of San Luis Obispo, State of California, notwithstanding any other
provision of law which may provide that such action may be brought in some other location.
PH5 - 56
19. Choice of Law. This Agreement is made under and in all respects will be
interpreted, enforced and governed by the laws of the State of California.
20. Amendment. This Agreement cannot be altered, amended or modified in any way
without the express written consent of each party hereto or their authorized successor-in-interest.
21. Third Party Beneficiaries. Property owners, their heirs, successors and assigns, of
those properties to be benefitted by the provisions of paragraphs 4(e) and 4(f) (“Third Party
Owners”) of this Agreement are intended to be third party beneficiaries of this Agreement solely as
to those two sections. As such, said Third Party Owners shall have the right, at their sole cost and
discretion, to bring an action to enforce those two sections only. Nothing in this Agreement is
intended or shall be construed to require the City to bring any action to enforce said provisions on
behalf of any Third Party Owner and the City shall not be liable to any party, beneficiary or Third
Party Owner for any costs, damages, liabilities, fees, or awards of any kind related to or arising
from the failure of a party to this Agreement to abide by or enforce the terms of paragraphs 3(f)
and/or 3(g). Except as specifically provided herein, this Agreement is made and entered into for the
sole protection and benefit of the parties and any successors or assign of the parties. No other
person shall have any right of action based upon any provisions of this Agreement.
22. Time is of Essence. Time is of the essence for this Agreement.
23. Notice. Notices under this Agreement shall be deemed given when delivered by
First Class Mail, Postage Prepaid, as follows:
City of San Luis Obispo City Clerk
990 Palm Street
San Luis Obispo, CA 93401
with a copy to:
City Attorney
990 Palm Street
San Luis Obispo, Ca 93401
Counterparts. This Agreement may be executed in one of more
Developer: ResCal SLO 193, LLC
Robert N. Goodman
10880 Wilshire Boulevard, Suite 1420
Los Angeles, CA 90024
with a copy to:
Allen Matkins Leck Gamble Mallory & Natsis LLP
John Condas, Esq.
PH5 - 57
1900 Main Street, 5th Floor
Irvine, CA 92614
24. Counterparts. This Agreement may be executed in one of more counterparts, each of
which shall be deemed an original, but all of which together shall constitute a single agreement.
25. Severability. If any one or more of the provisions contained in this Agreement shall
be found to be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not, in any way, be affected or impaired.
26. Authority. The parties hereby represent that the persons executing this Agreement
are expressly authorized to do so for and on behalf of the parties.
27. Captions. The captions of the Sections of this Agreement are for convenience and
reference only, and are not intended and shall not be construed to define or limit the provision to
which they relate.
28. Recitals and Exhibits. The Recitals first set forth herein and all Exhibits attached
hereto are incorporated in this Agreement.
PH5 - 58
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the
day and year first above written.
ATTEST:
City Clerk
CITY OF SAN LUIS OBISPO
By:
Mayor Jan Marx
APPROVED AS TO FORM:
City Attorney
RESCAL SLO 193, LLC, a Delaware limited
liability company
By:
Name:
Title:
PH5 - 59
EXHIBIT “A”
DEPICTION AND SPECIFICATION OF PRADO ROAD IMPROVEMENTS
PH5 - 60
Bids
Units Quantity
Demolition and Earthwork
Sawcut LF 200.00
Asphalt Grind/Stockpile SF 29,500.00
Demo Storm Drain EA 1.00 27,125.00$
Demo Power Poles EA 5.00
Dem SD Culvert EA 1.00
Relocate Siren Pole(PGE & ATT) 2 EA 1.00 50,497.41$
Demo Fence LF 1,560.00
Misc Demolition LS 1.00
Rough Cut/Fill CY 12,500.00 79,250.00$
Rough Cut/Fill for Extended Shoulder1 CY 1,100.00 5,225.00$
Subgrades SF 75,000.00
Subtotal162,097.41$
Erosion Control
Hydroseed AC 0.50 29,150.00$
Stabilized Construction EntranceEA 1.00
Concrete Waste Area EA 1.00
Soil Stabilization SF 50,000.00
Storm Drain inlet Protection EA 3.00
Gravel BagsEA25.00
Fiber Rolls LF 2,500.00
Silt Fencing LF 1,350.00
Erosion Control Repair (Allowance)LS 1.00 10,000.00$
Subtotal39,150.00$
Water Lines
8" Water Lines LF 200.00 64,750.00$
8" Recycled Water Mains LF 150.00 29,450.00$
8" Valves EA 6.00
20" Valve EA 1.00
Recycled Water Service EA 1.00
Fire Hydrants EA 2.00
Subtotal94,200.00$
Sewer Lines
8" Sewer Lines LF 1,100.00
Sewer Manholes EA 7.00
Sewer Tie In EA 1.00
Subtotal50,800.00$
Storm Drains
Curb Inlets EA 3.00
2342
Exhibit B
Prado Road Segment "A" Developer Costs
Engineers Estimate 1/25/2013
PH5 - 61
Bids
Units Quantity
2342
Exhibit B
Prado Road Segment "A" Developer Costs
Engineers Estimate 1/25/2013
54" HDPE SD LF 287.00
48" HDPE SD LF 2,015.00
48" RCP SD LF 95.00
42" HDPE SD LF
36" HDPE SD LF
24" HDPE SD LF
18" SD LF 125.00
Headwall LS
Misc Connectors LS 1.00
Storm Drain Manholes EA 3.00
Storm Drain Junction Box (Large)EA 1.00
Storm Drain Junction Box (Medium)EA
Subtotal319,265.00$
PH5 - 62
Bids
Units Quantity
2342
Exhibit B
Prado Road Segment "A" Developer Costs
Engineers Estimate 1/25/2013
Street Improvements
Curb and Gutter LF 1,025.00 139,933.00$
Cross Gutter LF
Curbs LF 1,075.00
ADA Access Ramps EA 4.00
Street Lights EA 4.00
Street Light Circuits EA 4.00
Sidewalks SF 11,500.00
Pavers SF 3,700.00 72,200.00$
Street Signs EA 21.00 9,925.00$
Barricade EA 1.00
Street Striping LS 1.00 16,922.00$
AC Dike LF 900.00 444,300.00$
AC Paving 3 Tons 2,800.00
Class II Base Tons 9,200.00
Subtotal683,280.00$
Landscaping 1
Irrigation Sleeves 9,280.00$
Irrigation Controller 5,000.00$
Water Meter 564.00$
Trees EA 20.00 6,500.00$
Landscaping/Irrigation SF 16,500.00 66,000.00$
Subtotal87,344.00$
Hard Cost Subtotal1,436,136.41$
Contingency @ 5%71,806.82$
Estimated Hard Cost1,507,943.23$
Soft Costs
Mobilization 5 LS 1.00 5,000.00$
Civil Engineering (Full Design)LS 1.00 133,119.00$
Hydrology LS 1.00 4,000.00$
Landscape Architecture LS 1.00 7,912.50$
Survey LS 1.00 8,500.00$
Water meter connection fee 4 1.00 18,260.00$
Soils Engineering/Material Testing LS 1.00 15,000.00$
SWPP Monitoring LS 1.00 7,500.00$
Traffic Control with K-Rail5 LS 1.00 16,000.00$
Bonding Fees LS 1.75%26,389.01$
PH5 - 63
Bids
Units Quantity
2342
Exhibit B
Prado Road Segment "A" Developer Costs
Engineers Estimate 1/25/2013
Allocated Insurance LS 1.75%26,389.01$
Supervision/Construction Ovhd LS 2.25%33,928.72$
Blueprints LS 0.50%7,539.72$
City Plan Check and Inspection LS 1.00 191,370.00$
Credit Plan Check Fees for Prior Work LS 1.00 (43,020.00)$
Goodwin Report 5 LS 1.00 60,000.00$
Allocated Pond Cost (see detail)4.30%65,260.11$
Subtotal583,148.06$
Contingency @ 5%29,157.40$
Total Soft Costs612,305.46$
Total Costs:2,120,248.69$
PH5 - 64
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PH5 - 65
RESOLUTION NO. (2013 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORIZING THE FINANCE AND INFORMATION TECHNOLOGY DIRECTOR
TO CAUSE AN INTERFUND LOAN
FOR THE PURPOSES OF CONSTRUCTING A PORTION OF PRADO ROAD
FOR TRACT 2342.
WHEREAS, on October 12, 2004 the San Luis Obispo City Council adopted the
Margarita Area Specific Plan (“MASP”) by City Council Resolution Number 9615; and
WHEREAS, Chapter 2.3 of the City’s General Plan Land Use Element identifies the
Margarita Area as a Residential Expansion Area intended to accommodate San Luis Obispo’s
planned residential growth for the near future; and,
WHEREAS, Prado Road is intended to serve as the primary east-west arterial serving
citywide and vehicle, transit, and bicycle traffic, relieving congestion along South Street & Tank
Farm Road, and providing improved emergency response times in those areas; and
WHEREAS, establishing the east-west connection of Prado Road between Broad Street
and Higuera Street at the earliest possible stage of development is a goal of the MASP and City
development process. However, because this goal is hindered by multiple and changing property
ownerships and development phasing of individual properties, revised plans for phased
implementation of Prado Road are necessary; and
WHEREAS, on March 7, 2006, the City Council adopted Resolution Nos. 9776 and
9777, approving, respectively, Vesting Tentative Tract Map (“VTTM’s”)Nos. 2342 and 2353;
and
WHEREAS, Section 5.7.2 of the Margarita Area Specific Plan and the Vesting Tentative
Tract Map Nos. 2342 Condition of Approval 1.g. provide that the Developer is to pay the costs of
designing, permitting and constructing Prado Road; and
WHEREAS, the City has determined that the most efficient, expedient, and effective
approach to coordinate the construction of Prado Road concurrent with the housing development
is for the Developer to construct Prado Road; and
WHEREAS, Sections 1.4 and 1.5 of the Economic Development Strategic Plan call for
exploring financing strategies for infrastructure that address timing/costs and ensure that that new
development is responsible for infrastructure costs only to the extent there is a nexus between
costs and project impacts; and,
WHEREAS, Section 1.9 of the Economic Development Strategic Plan contains a strategy
to work with developers that are willing to install infrastructure beyond their “fair share’
requirement as an expedient way to provide new infrastructure in the City’s Expansion Areas;
and,
PH5 - 66
WHEREAS, in connection with obtaining a building permit for each office, single-family
and multi-family unit within the Margarita Area Specific Plan area, Margarita Area Specific Plan
owners and/or developers are required to pay certain City-wide and Margarita Area Specific Plan
area Impact Fees to the City of San Luis Obispo; and
WHEREAS, the City of San Luis Obispo has adopted Chapter 16.20 of the San Luis
Obispo Municipal Code to set forth the procedure and conditions for physical improvement
standards and procedures, including the reimbursement of costs whenever improvements are
required to be installed adjacent to property other than that being developed or in greater size or
capacity than required for the development of the property under consideration; and
WHEREAS, Rescal LLC. (hereinafter “Developer”) will construct a portion of Prado
Road as required by the conditions of approval and that this portion of Prado Road is in greater
capacity as required for the development of the property under consideration; and
WHEREAS, Section 9.53 of the MASP provides that the roadway is constructed and
accepted by the City, fee credits equal to the amount of the cost of the facility or the cost of the
facility as estimated in the capital improvement plan, can be issued to the developer. The
Developer can then apply them to offset fees imposed on his development or enter into a
reimbursement agreement for any constructed facility that is oversized; and
WHEREAS, a study prepared by Goodwin Consulting Group, Inc., concluded that
construction and related costs to design Prado Road as required by the conditions of approval
would be approximately $2,241,007 and that Tract 2342 MASP transportation fee contribution
for their residential component towards these improvements is approximately $534,856 based on
the MASP fees that took effect on July 1, 2012, leaving an estimated reimbursement amount of
$1,706,151; and
WHEREAS, subsequent to the preparation of the Goodwin Consulting Group, Inc. report,
the developer has received construction bid estimates for the Segment A section of the Prado
Road extension that will reduce this cost to $2,120,250 but will still leave a significant amount of
crediting and reimbursement necessary to compensate developer for advanced costs beyond their
fair share; and
WHEREAS, Section 66006 (b)(G) of the California Government Code allows for the
Interfund loan of development impact fees as defined under California Government Code 66000
et seq. if public improvements on which the Interfund loans will be expended is established, the
date on which the loan will be repaid and the rate of interest for the Interfund loan is established;
and
WHEREAS, an Interfund loan of $434,128 in Margarita Area Park Fees for the
residential component of Tract 2342 will reduce the estimated amount of reimbursement to
$1,131,265 and that the loan of Margarita Area Park Fee account to the Margarita Area
Transportation Fee account will not impair or delay the delivery of the future park contemplated
PH5 - 67
in the MASP as it is estimated that the payment of Margarita Area Park Fees from other
development with the MASP will be collected prior to the future date when these funds will be
needed to construct this park; and
WHEREAS, The City has found in connection with its review and consideration of this a
Interfund loan that no subsequent or supplemental Environmental Impact Report is necessary or
required under CEQA because the credit of fees and reimbursement was analyzed and within the
scope of activities contemplated by the FEIR adopted for the MASP and VTTM’s as required for
implementation of the mitigation measures thereunder.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows/or that (whatever action is needed):
SECTION 1. Authorize the Finance and Information Technology Director to loan up to
$454,128 of Tract 2342 MASP Park Improvement Fees account (via crediting) to the MASP
Transportation account for the reimbursement of actual eligible costs for the construction of
Prado Road as determined by the City Engineer, consistent with the approved reimbursement
agreements under the terms specified in this Resolution.
SECTION 2. The loan contemplated under this agreement shall be for no more than 15
years and the interest rate shall be as close as administratively practical to the average rate of
return for City investments during the period of said loans as determined by the Finance and
Information Technology Director. Repayment of the loans made under this resolution may be
made at any time without penalty.
SECTION 3. Direct the Director of Finance & Information Technology to establish one
or Margarita Area Specific Plan account, or other accounts, as necessary to properly account for
and track the Interfund loans described and authorized herein.
SECTION 4. As required under Section 66006 et seq; the Finance and Information
Technology Director is hereby required to include in the City’s annual Comprehensive Annual
Financial Report, outstanding Interfund loan amounts, a description of the improvements on
which the Interfund loan will be expended, repayment amounts and terms of Interfund loans,
including but not limited to the date on which the Interfund loan will be repaid.
SECTION 5. This Interfund loan does not constitute a debt on behalf of the General
Fund and the City does not pledge the full faith and credit of the General Fund in approving these
Interfund loans as described in this resolution. The Interfund loan shall not directly or indirectly
or contingently obligate the City to levy or pledge any form of taxation whatsoever or make any
appropriations for payments.
SECTION 6. The City reserves the right pursuant to conditions 1e of Tracts Resolution
Nos. 9776 and 9777, approving, respectively, Vesting Tentative Tract Map Nos. 2342 and 2353
to form a community facilities district or other such financing mechanism that would fund any
final project costs for the construction of Prado Road as authorized under the approved VTTM’s
PH5 - 68
conditions of approval that are not contained in the Margarita Area Specific Plan Impact Fee
estimates or to repay the Interfund loan if not repaid during the term as specified in this
agreement.
SECTION 7. Repayment of the interfund loan shall be made from MASP Transportation
account fees collected from future development located in the Margarita Area. Collected MASP
Transportation Funds from future development other than the Developer shall first repay the
MASP Park Improvement account and once satisfied, may be used to reimburse developer for
any remaining obligation.
Upon motion of _______________________, seconded by _______________________,
and on the following vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 19th day of February 2013.
____________________________________
Jan Marx
Mayo r
ATTEST:
____________________________________
Maeve Kennedy Grimes
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
PH5 - 69
PH5 - 70
Attachment 3
R ______
RESOLUTION NO. (2014 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORIZING THE FINANCE AND INFORMATION TECHNOLOGY DIRECTOR
TO ISSUE AN INTERFUND LOAN
FOR THE PURPOSES OF CONSTRUCTING A PORTION OF PRADO ROAD
FOR TRACT 2342 AND 2353.
WHEREAS, on October 12, 2004 the San Luis Obispo City Council adopted the
Margarita Area Specific Plan (“MASP”) by City Council Resolution Number 9615; and
WHEREAS, Chapter 2.3 of the City’s General Plan Land Use Element identifies the
Margarita Area as a Residential Expansion Area intended to accommodate San Luis Obispo’s
planned residential growth for the near future; and,
WHEREAS, Prado Road is intended to serve as the primary east-west arterial serving
citywide and vehicle, transit, and bicycle traffic, relieving congestion along South Street & Tank
Farm Road, and providing improved emergency response times in those areas; and
WHEREAS, establishing the east-west connection of Prado Road between Broad Street
and Higuera Street at the earliest possible stage of development is a goal of the MASP and City
development process. However, because this goal is hindered by multiple and changing property
ownerships and development phasing of individual properties, revised plans for phased
implementation of Prado Road are necessary; and
WHEREAS, on March 7, 2006, the City Council adopted Resolution Nos. 9776 and
9777, approving, respectively, Vesting Tentative Tract Map (“VTTM’s”)Nos. 2342 and 2353;
and
WHEREAS, Section 5.7.2 of the Margarita Area Specific Plan and the Vesting Tentative
Tract Map Nos. 2342 Condition of Approval 1.g. provide that the Developer is to pay the costs of
designing, permitting and constructing Prado Road; and
WHEREAS, the City has determined that the most efficient, expedient, and effective
approach to coordinate the construction of Prado Road concurrent with the housing development
is for the Developer to construct Prado Road; and
WHEREAS, Sections 1.4 and 1.5 of the Economic Development Strategic Plan call for
exploring financing strategies for infrastructure that address timing/costs and ensure that that new
development is responsible for infrastructure costs only to the extent there is a nexus between
costs and project impacts; and,
WHEREAS, Section 1.9 of the Economic Development Strategic Plan contains a strategy
to work with developers that are willing to install infrastructure beyond their “fair share’
requirement as an expedient way to provide new infrastructure in the City’s Expansion Areas;
and,
PH5 - 71
Resolution No. _______________ (2014 Series)
Page 2
WHEREAS, in connection with obtaining a building permit for each office, single-family
and multi-family unit within the Margarita Area Specific Plan area, Margarita Area Specific Plan
owners and/or developers are required to pay certain City-wide and Margarita Area Specific Plan
area Impact Fees to the City of San Luis Obispo; and
WHEREAS, the City of San Luis Obispo has adopted Chapter 16.20 of the San Luis
Obispo Municipal Code to set forth the procedure and conditions for physical improvement
standards and procedures, including the reimbursement of costs whenever improvements are
required to be installed adjacent to property other than that being developed or in greater size or
capacity than required for the development of the property under consideration; and
WHEREAS, Rescal LLC (hereinafter “Developer”) will construct a portion of Prado
Road as required by the conditions of approval and this portion of Prado Road is of greater
capacity than required for the development of the property under consideration; and
WHEREAS, Section 9.53 of the MASP provides that when the roadway is constructed
and accepted by the City, fee credits equal to the amount of the cost of the partial facility, or the
cost of the facility as estimated in the MASP public facilities financing plan can be issued to the
developer. The Developer can then apply them to offset fees imposed on his development or
enter into a reimbursement agreement for any constructed facility that is oversized; and
WHEREAS, a study prepared by Goodwin Consulting Group, Inc., and as modified by
actual public improvements costs, concluded that construction and related costs to design
Segments A, D and E of Prado Road as required by the conditions of approval would be
approximately $3,492,203 and that Tract 2342 and Tract 2353 MASP transportation fee
contribution for their single family residential components towards these improvements is
approximately $1,729,555 based on the MASP fees that took effect on July 1, 2012 and as
modified on July 1, 2013, leaving an estimated reimbursement amount of $1,762,648; and
WHEREAS, Section 66006 (b)(G) of the California Government Code allows for the
Interfund loan of development impact fees as defined under California Government Code 66000
et seq. if public improvements on which the Interfund loans will be expended, the date on which
the loan will be repaid and the rate of interest for the Interfund loan have all been established;
and
WHEREAS, an Interfund loan of $1,468,509 in Margarita Area Park Fees for the
residential component of Tracts 2342 and 2353 will reduce the estimated amount of remaining
reimbursement to $294,139 and the loan of Margarita Area Park Fee account to the Margarita
Area Transportation Fee account will not impair or delay the delivery of the future park
contemplated in the MASP as it is estimated that the payment of Margarita Area Park Fees from
other development with the MASP will be collected prior to the date when these funds will be
needed to construct this park; and
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Resolution No. _______________ (2014 Series)
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WHEREAS, The City has found in connection with its review and consideration of this a
Interfund loan that no subsequent or supplemental Environmental Impact Report is necessary or
required under CEQA because the credit of fees and reimbursement was analyzed and within the
scope of activities contemplated by the FEIR adopted for the MASP and VTTM’s and in the
Negative Declaration adopted for the proposed modifications to conditions regarding the
construction and phasing of Prado Road as required for implementation of the mitigation
measures thereunder.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows/or that (whatever action is needed):
SECTION 1. Authorize the Finance and Information Technology Director to loan up to
$1,468,509 of Tract 2342 and Tract 2353 MASP Park Improvement Fees account (via crediting)
to the MASP Transportation account for the reimbursement of actual eligible costs for the
construction of Prado Road as determined by the City Engineer, consistent with the approved
reimbursement agreements under the terms specified in this Resolution.
SECTION 2. The loan contemplated under this agreement shall be for no more than 15
years and the interest rate shall be as close as administratively practical to the average rate of
return for City investments during the period of said loans as determined by the Finance and
Information Technology Director. Repayment of the loans made under this resolution may be
made at any time without penalty.
SECTION 3. Direct the Director of Finance & Information Technology to establish one
or more Margarita Area Specific Plan accounts, or other accounts, as necessary to properly
account for and track the Interfund loans described and authorized herein.
SECTION 4. As required under Section 66006 et seq; the Finance and Information
Technology Director is hereby required to include in the City’s annual Comprehensive Annual
Financial Report, outstanding Interfund loan amounts, a description of the improvements on
which the Interfund loan will be expended, repayment amounts and terms of Interfund loans,
including but not limited to the date on which the Interfund loan will be repaid.
SECTION 5. This Interfund loan does not constitute a debt on behalf of the General
Fund and the City does not pledge the full faith and credit of the General Fund in approving these
Interfund loans as described in this resolution. The Interfund loan shall not directly or indirectly
or contingently obligate the City to levy or pledge any form of taxation whatsoever or make any
appropriations for payments.
SECTION 6. The City reserves the right pursuant to conditions 1e of Tracts Resolution
Nos. 9776 and 9777, approving, respectively, Vesting Tentative Tract Map Nos. 2342 and 2353
to form a community facilities district or other such financing mechanism that would fund any
final project costs for the construction of Prado Road as authorized under the approved VTTM’s
conditions of approval that are not contained in the Margarita Area Specific Plan Impact Fee
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Resolution No. _______________ (2014 Series)
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estimates or to repay the Interfund loan if not repaid during the term as specified in this
agreement.
SECTION 7. Repayment of the interfund loan shall be made from MASP Transportation
account fees collected from future development located in the Margarita Area. Collected MASP
Transportation Funds from future development other than the Developer shall first repay the
MASP Park Improvement account and once satisfied, may be used to reimburse developer for
any remaining obligation.
Upon motion of _______________________, seconded by _______________________,
and on the following vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 15th day of April 2014.
____________________________________
Jan Marx
Mayor
ATTEST:
____________________________________
Anthony Mejia
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
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