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HomeMy WebLinkAbout02/01/1994, C-7 - AMENDMENT TO THE SUBDIVISION AGREEMENT FOR TRACT NO. 1750 (UNITS 1 & 2), EXTENDING THE TIME TO SUBMIT THE SURETY. (ROB ROSSI, SUBDIVIDER) I'INM1III�IIIIIII�I II MEETING DATE: city or san lugs oBispo Feb. 1, 1994 COUNCIL AGENDA REPORT ITEM NUMBER:L7 FROM: +� Michael McCluskey, Public Works Director Prepared by: Gerald W. Kenny, Supervising ivil Engineer SUBJECT: Amendment to the subdivision agreement for Tract No. 1750 (Units 1 & 2), extending the time to submit the surety. (Rob Rossi, Subdivider) CAO RECOMMENDATION: Adopt resolution amending the subdivision agreement to allow for an additional 90 days to submit the surety guaranteeing the subdivision improvements for Tract No. 1750 (Units 1 & 2). BACKGROUND: Tract No. 1750 (Units 1 & 2) was "conditionally approved" on November 10, 1992 per Resolution No. 8086 (1992 Series). All conditions were met to allow the recordation of the final map except submittal of the surety. The Subdivider had been working on securing bonds and was confident that they would be issued soon after that approval. The recordation was conditioned upon submittal of the surety within 90 days. Due to the economy and other factors, 90 days was not adequate to complete the issuance of the bonds and the Council granted four additional 90 day extensions in order to secure the bonds per Resolution No. 8241 (1993 Series). The current expiration date is February 6, 1994. The Subdivider had a conditional agreement with Centex-Mangano Homes, but it ultimately failed to result in a sale of the property and submittal of the necessary bonds. Another developer, Kaufman & Broad has been negotiating with Mr. Rossi and it was expected that an agreement would be reached and bonds would be secured prior to the February 6th deadline. However, a principal negotiator for Kaufman & Broad had a heart attack recently during a meeting with the title company on the matter which has delayed completion of the transaction. Mr. Rossi has requested another 90 day extension of the subdivision agreement. The Faithful Performance and Labor & Materials bonding amounts are $1,966,500.00 and $ 983,250.00, respectively. As mentioned above, the final map has not yet been recorded, nor have the Islay Hill open-space and Islay Park deeds, pending the submittal of the surety. All fees have been received as noted on the Fee and Bond List. If the time extension is not granted, certain fees would also need to be returned to the Subdivider. The Subdivider has executed the attached additional amendment to the Subdivision Agreement providing for a 90 day extension to February 6, 1994. �����►����IIIIIII81�� I city of San tins OBISPO MIEN ,one COUNCIL AGENDA REPORT Tract No. 1750 (Units 1 & 2) Meeting of February 1, 1994 Page Two ALTERNATIVES: Option 1: Deny extension of the time to submit the subdivision surety. CONSEQUENCES OF NOT TAKING THE RECOMMENDED ACTION: The final map would not be recorded and the Subdivider would need to process a new tentative and final map. A question of validity of the recently approved tentative map (Tract 2134) would be an issue, since that map was processed as a re-subdivision of this tract. Under the Subdivision Agreement, the Subdivider agrees to install "all' of the park improvements without any City capital funds. This savings to the City of several thousand dollars, as compared to the phasing and financial plan approved with the tentative map for this tract and provided for in the Edna-Islay Specific Plan would be lost. The residents in the existing homes in the Arbors development have been eagerly awaiting the park development, having contributed towards its development via $ 750 per lot assessments, paid to the City through escrow, as the homes were sold. The Open-Space easement deed for Islay Hill would be returned. It would still be a condition of a new subdivision, but may not be dedicated as early in the development of the area per the Specific Plan. . The lot for the Housing Authority would not be created for development until a new subdivision was processed and recorded. FISCAL IMPACT: There are no new fiscal impacts related to the recommended action. CONCURRENCES: The Community Development Director and City Attorney concur with the recommended action. Attachments: 1 - Draft resolution and agreement amendment 2 - Map 3 - Resolution No. 8241 (1993 Series) 4 - Rob Rossi letter (1-19-94) Ilk P:\WP51\0Rev1evAT1750\5XT.wp c- �-a RESOLUTION NO. (1994 SERIES) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING AN AMENDMENT TO THE SUBDIVISION AGREEMENT FOR TRACT NO. 1750 (UNITS 1 & 2) EXTENDING THE TIME TO SUBMIT SURETY (Rob Rossi, Subdivider) WHEREAS, the City Council conditionally approved the final map for Tract 1750 (Units 1 & 2) per Resolution No. 8086 (1992 Series), subject to submittal of adequate surety by February 10, 1993, guaranteeing installation of the required subdivision improvements , and WHEREAS, the City Council approved amendments to the subdivision agreement, the last of which extended the time to submit required surety to February 6, 1994 pursuant to Resolution No. 8241 (1993 Series), and WHEREAS, the Subdivider has requested an additional 90 days in order to provide said surety. NOW THEREFORE, BE IT RESOLVED that the attached amendment (Exhibit A) to the Subdivision Agreement for Tract No. 1750 (Units 1 & 2) is hereby approved and the Mayor is authorized to sign the amendment. The surety shall be submitted on, or before May 7, 1994 or this approval shall become null and void. The final map shall not be recorded until submittal and approval of the surety, to the satisfaction of the City Attorney. On motion of seconded by and on the following roll call vote: C - 7J Resolution No. (1994 Series) Page Two AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of , 1994. ATTEST: MAYOR CITY CLERK APPROVED AS TO FORM: GAW P57\DRWevAT175G5XT.wp . �- / EXHIBIT A SUBDIVISION AGREEMENT AMENDMENT THIS AGREEMENT, dated this day of , 1994 by and between Robin L. Rossi, herein referred to as "SUBDIVIDER", and the City of San Luis Obispo, herein referred to as "City". WITNESSETH: Reference is hereby made to that certain real property in the City of San Luis Obispo, County of San Luis Obispo, State of California, as shown on the final map of Tract No. 1750 (Units 1 & 2) , as approved by the City Council on November 10, 1992 . WHEREAS, a Subdivision Agreement was entered into between the above-mentioned parties to guarantee completion of the subdivi- sion requirements, and WHEREAS, the subdivision agreement provided for satisfactory surety to be submitted by February 10, 1993, and WHEREAS, the City Council approved an amendment to the subdivision agreement per Resolution No. 8241 (1993 Series) which extended the time to submit the surety to February 6, 1994, and WHEREAS, the subdivider has requested an additional 90 days to submit said surety. Subdivision Agreement Amendment Tract No. 1750 (Units 1 & 2) Page Two NOW THEREFORE BE IT RESOLVED that the subdivision agreement dated November 10, 1992 for Tract No. 1750 (Units 1 & 2) is hereby modified to extend the time to submit the required Faithful Performance and Labor & Materials surety by an additional 90 days to May 7, 1994 . All other provisions of the aforementioned Subdivision Agreement shall remain in force. IN WITNESS WHEREOF, this agreement has been executed by: S ID R Rin L. Rossi APPROVED: City of San Luis Obispo MAYOR - Peg Pinard ATTEST: CITY CLERK - Diane Gladwell 7R? AS TO F RM: of y J rgen n City Att ney G:IV W51\OReNevAT1750\5XT.wp _ t� •'• _ _ • �',�• _tip_� .�^��.�'. - Vh low •�� 71. 0� 3� 611 1lt iy. �ir Vi/. zj tit: ail 40 1.: gni :.; 4 . a�a ` .44 im- N j;F .; :� - _ ..- r�;• _ � - � rte_.::- -'G._•� �. �� L_� _. - IN :tat • ._. __ _ s ® � • tit Is C-7- 7 (,4 �. Is RESOLUTION N08241(1993 SERIES) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING AN AMENDMP. SUB GREEMENT FOR NO. 1750 (UNITS 1 & 2) EXTENDING (Rob Rossi, Subdivider) WHEREAS, the City Council conditionally approved the final map for Tract 1750 (Units 1 & 2) per Resolution No. 8086 (1992 Series), subject to submittal of adequate surety by February 10, 1993, guaranteeing installation of the required subdivision improvements , and WHEREAS, the City Council approved amendments to the subdivision agreement, the last of which extended the time to submit required surety to November 8, 1993 per Resolution No. 8200 (1993 Series), and WHEREAS, the Subdivider has requested an additional 90 days in order to provide said surety. NOW THEREFORE, BE IT RESOLVED that the attached amendment (Exhibit A) to the Subdivision Agreement for Tract No. 1750 (Units 1 & 2) is hereby approved and the Mayor is authorized to sign the amendment. The surety shall be submitted on, or before February 6, 1994, or this approval shall become null and void. The final map shall not be recorded until submittal and approval of the surety, to the satisfaction of the City Attorney. On motion of Rappa seconded.by Romero and on the following roll call vote: R-8241 Resolution No.824k1993 Series) Page Two AYES: Council Members Rappa, Romero, Roalman, Settle, and Mayor Pinard INTOES: . None ABSENT: None the foregoing Resolution was passed and adopted this 2nd day of November, 1993. ATTEST: MAYOR PEG PINARD LERK IANE GLADWELL APPROVED AS TO FORM: *iAtt rney G:%W P51\DRemewVM7506XT.wp C- 7 EXHIBIT A SUBDIVISION AGREEMENT AMENDMENT THIS AGREEMENT, dated this 2nd day of November 1993 by and between Robin L. Rossi, herein referred to as "SUBDIVIDER", and the City of San Luis Obispo, herein referred to as "City" . WITNESSETH: Reference is hereby made to that certain real property in the City of San Luis Obispo, County of San Luis Obispo, State of California, as shown on the final map of Tract No. 1750 (Units 1 & 2) , as approved by the City Council on November 10, 1992 . WHEREAS, a Subdivision Agreement was entered into between the above-mentioned parties to guarantee completion of the subdivi- sion requirements, and WHEREAS, the subdivision agreement provided for satisfactory surety to be submitted by February 10, 1993 , and WHEREAS, the City Council approved an amendment to the subdivision agreement per Resolution No. 8220 (1993 Series) which extended the time to submit the surety to November 8, 1993 , and WHEREAS, the subdivider has requested an additional 90 days to submit said surety. Tract No. 1750 (Units 1 & 2) Page Two NOW THEREFORE BE IT RESOLVED that the subdivision agreement dated November 10, 1992 for Tract No. 1750 (Units 1 & 2) is hereby modified to extend the time to submit the required Faithful Performance and Labor & Materials surety by an additional 90 days to February 6, 1994. All other provisions of the aforementioned Subdivision Agreement shall remain in force. IN WITNESS WHEREOF, this agreement has been executed by: SU D R bin L. Rossi APPROVED: City of San Luis Obispo MAYOR - g Pinard i ST: CF LERK -I Di n ladwel APPROVED AS TO FORM: JJ rge se riAtt rn . G:\WP51\DRevlevAT1750\4XT.wp 81/28/94 8931 3 885 595 7927 ROSSI ENTERPRISE P.82 i _ : . Enterprises 1 P.D.Ra 1119 _ Avila Reach.U 93424 i January 19, 1994 Mr. Jerry Kinney City of San Luis 990 Palm Street San Luis Obispo, CA 93401 RE: Tract 1750, Units 1 and 2 Final Map Dear Jerry: We again find ourselves in a position of needing to extend our agreement regarding Tract 1750 Units.1 and 2 . As I know you are aware, we have been in detailed negotiations with the two largest building companies in the country. Unfortunately, a number of circumstances has resulted.in our not completing an agreement as of this date. Most recently in working with Kaufman-Broad (K-B), we had arranged for meetings in San Luis Obispo during January. Unfortunately, the K-B regional manager suffered a heart attack postponing further negotiations at this time. We intend to leave the door open with K-B while at the same time reinstituting our own bonding, which had been approved just prior to the negotiations with these other home builders. Unfortunately, this Is unlikely to be completed prior to the expiration of our present agreement on February 6. Therefore, we respectfully request the City grant an additional extension of 90 days during which time we believe that either an arrangement will be finalized with a joint venture partner or we intend to finance-and bond the project on our own. We are anxious to see the project under construction for obvious business reasons as well as the fact that Islay Hill will provide a variety of housing types for residents of our community. Many of the people presently moving into the Clover Creek Project, adjoining Islay Hill, are present residents of the county who would rather live in San Luis Obispo. We believe this will be our primary market from every Indication and study that has been conducted. 605/585-7777 FAX 805/595.7077 A ONWO0 Wiah hai m len 81/20/94 89132 E 805 595 7927 ROSSI ENTERPRISE P.03 Mr. Jerry Kinney Page 2 January 19, 1994 Again, we appreciate your efforts. Please let us know if we can provide any additional Information. We sincerely intend to have the project under construction by early spring. Best regards, Rob Rossi Attachment: Jerry Kinney Letter of June 22, 1993 cc: GMC Partners, do Fred Glick, Esq. 01/20/94 09s32 S 803 593 7927 ROSSI ENTERPRISE P.04 Enterprises P.O.Bac 2119 Avila Bade,CA 93424 June 22, 1993 Mr..Jerry Mnney City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 RE: Islay Hill Tract 1750, Phases 1 and 2, Bonding Dear Jerry: I am writing this letter following our discussion last week regarding our request to modify the required surety amount for Tract 1750, Units 1 and 2. The original engineer's estimate, as approved by your department, estimated the cost for these Improvements (including .contingency) in an amount of $1,966,500. Attached are the actual bids received from our contractor, John Madonna Construction. As you can see, the actual costs came In far below what was estimated at $19380,000. Additionally, the cost of some of the improvements are not actually required with Units 1 and 2. The complete landscaping of the park was allowed to be delayed. It was at our option that these improvements be included In the development of Units 1 and 2, and we Intend to do so. However, from the standpoint of surety (given the economic climate which exists and the difficulty in meeting large surety requirements), we'thlnk it would also be appropriate to delete the costs attributable to that portion of the park not required for Units 1 and 2. From Madonna's bid, those costs are approximately $150,000 relating to landscaping and irrigation. With this modification using the $11380,000 bid adjusted down to delete $150,000 for land saving, the result would be $1,230,000. Adding back In a 10% contingency of $120,000, the net surety amount would be $1,350,000 or approximately $600,000 less than the present surety requirement. The reason for this request Is the fact that the bonding company and banks are having difficulty understanding the disparity between the actual cost and those requested as surety by City agreement. Unfortunately, at the time that the estimate was used, it was done to be conservative (as it should have). But, now we would like it to reflect actual cost by the contractor. We will also post the required labor and material bond of 50% or $675,000 based on this actual cost. FAX 80805/595-7777 • FAX 805/595.7927 A Ald it d Id6ds MW bm 01/20/94 09:33 E 805 595 7927 ROSSI ENTERPRISE P.05 / Mr. Jerry Kinney Page 2 June 22, 1993 We appreciate your consideration of this request and hope that it can be accommodated expeditiously so that we can complete the surety arrangements in the next two weeks prior to the next expiration of' the . .. .... Subdivision Agreement, which Is August 9, 1993. If .you have any questions, please give me a call. Respectfully submitted, Rob Rossi Attachment: John Madonna Construction Contract - Attachment "A" cc: GMC Partners John Wallace & Associates Roger Picquet, Esq.