HomeMy WebLinkAbout01/17/2006, C8 - REIMBURSEMENT AGREEMENT WITH SOURCE COMMERCIAL GROUP FOR PUBLIC IMPROVEMENTS AT THE INTERSECTION OF r
Co un V I LJanuJams
azy 17,2006
j acEnaa izepont 1�Nb`C g'
C ITY O F SAN LUIS OBISPO
FROM: Jay D. Walter, Director of Public Works
Prepared By: Timothy Scott Bochum, Deputy Director of Public Works
SUBJECT: REIMBURSEMENT AGREEMENT WITH SOURCE COMMERCIAL GROUP
FOR PUBLIC IMPROVEMENTS AT THE INTERSECTION OF ORCUTT
ROAD AT BROAD STREET
CAO RECOMMENDATION
1. Approve a reimbursement agreement (Attachment 1) with Source Commercial Group in an
amount not to exceed $ 204,625,56 for "oversizing" of public improvements at the
intersection of Orcutt Road at Broad Street.
DISCUSSION
Occasionally the City requests that private development projects construct additional
improvements to public infrastructure beyond those normally required to build their project. This
"oversizing" of public improvements is encouraged to complete necessary infrastructure sooner
rather than later and allow orderly development to occur without additional disruptions to the
public, or numerous construction projects to complete needed improvements. In order to ensure
this work, the City has normally agreed to reimburse these private projects for the oversized
improvements, recognizing that if the City was to undertake the improvements itself, it would
require similar expenditures of public funds.
One such case has been street and signal improvements performed by Minor Subdivision 99-214
(Source Commercial Group) at the intersection of Broad Street at Orcutt Road. This commercial
project was built on the southeast corner of the intersection, and as part of that development
approval, was required to complete frontage improvements that included curb, gutter and
sidewalk along with additional paving on Broad Street and Orcutt Road. As part of the approvals
of the project, the City requested that the developer complete additional improvements to
construct the dual left turn lanes in the southbound direction from Broad Street to Orcutt Road.
The timing of this improvement made sense in that the project would be widening Orcutt Road,
and the second receiving lane could be constructed to allow the dual left turn lane to be
completed. The dual left turn lane (including changes to the traffic signal) was not a project
specific requirement of the development project and as such, was considered an "oversizing" of
public infrastructure. The costs for this improvement are eligible for reimbursement from the
City Transportation Impact Fee (TIF) fund, which is impact mitigation money collected from all
new development.
Q i. � p•
tk
;� ♦ � licT c.Txcn � �
d1 ,x ..41•: r'p! .� :i�•'�'. O _0 0ca
,� •���, �'� �'
a '
rA
} 3 E E
i
4 Kr yy
to
N � "' ",• t,'~`• ciy p \• Tyr / (%� 2U �/' �,' ! ,�.� W
CL
bo
7 !f , f �,"♦�TTT O
V •� sF
d
U
L
Q
C �-z
l )
Source Commercial Group Reimbursement Agreement. Page 3
The physical improvements to the intersection were completed in late 2004 and accepted by the
City. Since the project was a minor subdivision, these improvements can be accepted by the City
Engineer and did not require Council approval. Since that time, the City has been negotiating the
final reimbursement amount with the developer. Those negotiations are now complete and the
final agreed upon reimbursement amount is $204,625.56. This amount reflects the cost for
widening Broad Street only, and doing the necessary median modification and traffic signal
changes to construct the SB dual left turn lane. It does not include any costs associated with the
project specific perimeter improvements that were the responsibility of the private developer.
Finally, there is one final building permit yet to be secured by the developer. Depending upon
how the developer wishes to proceed, the final TIF fee associated with that development may be
credited towards the final costs of the project, and the City's reimbursement amount under the
reimbursement agreement reduced accordingly.
FISCAL IMPACT
The 2005-07 Financial Plan anticipated the need for reimbursement for this project. However,
because the CIP for that project was developed well in advance of the final determination of the
total costs, the amount approved in the Plan is significantly lower ($40,600) than the final
reimbursement amount. Because all TIF monies have been programmed in the two year Financial
Plan, we do not have the ability to fully fund this amount at this time. Therefore, the
reimbursement agreement allows for reimbursement of the monies (in excess of the already
budgeted $40,600) to be paid over a period not to exceed fifteen years. It is anticipated that this
remaining amount may be proposed as a future CIP in the next two year financial plan.
The development has one final building permit to be secured, with an estimated TIF fee
requirement of $14,406.23. It is not known at this time if the developer will want to request
credit of this remaining amount or keep the full reimbursement amount of$204,625.56 whole. If
a credit is requested, the $204,625.56 provided for under the reimbursement agreement will be
reduced accordingly.
ATTACHMENTS
Reimbursement Agreement
i:\—car reports\2006\devrev\car reimbursement agreement with source commercial.doc
ATTACHMENT
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement is entered into this_day of January 2006 by
and between the City of San Luis Obispo ("City"), a chartered California municipal
corporation, and Dan M. Lemburg("Subdivider").
Recitals
A. Subdivider is the subdivider of property located at 3210 Broad Street, San Luis
Obispo ("Subject Property");
B. Subject Property was granted approval by the City's Community Development
Director of a tentative map for a minor subdivision(MS 137-99; SLO 99-2.14;
Director's Action 99-07) on November 19, 1999, which approval was conditioned
upon Subdivider or its predecessor in interest installing certain public
improvements within the public rights of way;
C. Subdivider or its predecessor in interest entered into a Subdivision Agreement
dated August 28, 2000, whereby it agreed to perform certain public improvements
Within the public right of way;
D. Subdivider entered into an agreement with City dated February 3, 2000, accepting
the mitigation measures required of the project in accordance with environmental
review performed as required by the California Environmental Quality Act(ER
193-99), and said measures included construction of various public improvements
in the public right of way;
E. Subdivider caused the various public improvements required under the
Subdivision Agreement to be installed;
F. Subdivider's approximate costs for such public improvements were $424,789;
G. Chapter 4.56 (Transportation Impact Fees (TIF)) of the San Luis Obispo
Municipal Code provides a person whose new development is subject to impact
fees may within 10 days of their imposition appeal to the city council for
reduction or adjustment of those fees, or a waiver of those fees, based on the
absence of any reasonable relationship between the impacts of that new
development and the amount of fees or types of improvements funded by those
fees;
H. Subdivider did not appeal the imposition of such transportation impact fees;
I. Chapter 4.56 also provides if an applicant is required as a condition of approval to
construct facilities whose cost has been used in the calculation of impact fees
which apply to that project, the applicant shall receive a credit for that portion of
the total fees otherwise payable that are attributable to those facilities; and if the
ATTACHMENT;.
credit exceeds the amount of transportation impact fee due on the development, a
reimbursement agreement with the applicant shall be offered;
J. Section 16.44.091 of the San Luis Obispo Municipal Code provides that
whenever improvements are required to be installed adjacent to property other
than that being developed or in greater size or capacity than that required for the
development, the developer of the improvements may be eligible for
reimbursement upon the satisfaction of certain conditions;
K. Subdivider made a demand on December 23, 2003 for reimbursement for certain
public improvements it installed pursuant to the Subdivision Agreement;
L. Subdivider and City have been negotiating since that time about exactly which
improvements warrant reimbursement and to what extent;.
M. Subdivider has already received $47,654.54 in TIF credits from City;
N. The parties through this Reimbursement Agreement seek to clarify how much is
to be reimbursed to Subdivider and when, and to settle all of Subdivider's claims
against City.
The parties hereby agree as follows:
1. Subdivider has substantiated his claim in the amount of$204,625.56. City
shall make payment of$40,600 to Subdivider within 30 days of execution of
this agreement by both parties. The remainder will be paid over time as costs
of improvements are collected from developers of other projects that benefit
from the improvements installed by developer, in accordance with Municipal
Code section 16.44.91 C (Payment of Reimbursement).
2. City shall give Subdivider first priority over any other developer when
utilizing TIF monies to reimburse developers for their costs of installation of
public improvements that are eligible for reimbursement.
3. City shall endeavor to complete reimbursement of all monies to Subdivider no
later than 15.years from the date of this Reimbursement Agreement in
accordance with Municipal Code section 16.44.91 C (Payment of
Reimbursement).
4. Subdivider does hereby fully and forever release City and its officers,
employees, agents or representatives, and all other persons and concerns, from
all claims and causes of action, known or unknown, past or present, which
have arisen or will arise as a result of the installation of public improvements
in conjunction with City's approval of a tentative map for a minor subdivision
(MS 137-99; SLO 99-214; Director's Action 99-07) for the project at 3210
Broad Street.
ATTACHMENT, ,
5, It is further agreed and understood by Subdivider that all rights under Section
1542 of the California Civil Code and any similar laws of any state or territory
of the United States are hereby expressly waived by Subdivider. Section 1542
of the California Civil Code reads as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with
the debtor."
6. Subdivider understands and acknowledges that the significance and
consequence of this waiver of California Civil Code Section 1542, is that even
if it should eventually suffer additional damages because of acts and/or
omissions of another party, it will not be able to make any claim for those
damages. Further, Subdivider acknowledges and intends these consequences
even as to claims for damages that may exist as of the date of this release but
which it does not know exist, and which, if known;would materially affect his
decision to execute this release, regardless of whether his lack of knowledge is
the result of ignorance, oversight, error, negligence, or any other cause.
7. This release provided for in this Reimbursement Agreement shall not be
treated as an admission of liability by any party for any purpose.
8. Subdivider agrees that it will not at any time hereafter commence,.maintain or
prosecute any action at law or equity or otherwise, or assert any claim against
the CITY, or any of its officers, employees, agents or representatives by
reason of the matters relating to approval of the tentative map for a minor
subdivision(MS 137-99; SLO 99-214; Director's Action 99-07) and the
installation of public improvements in conjunction thereof.
9. This Reimbursement.Agreement and the release it contains shall be binding
upon City, Subdivider and the latter's successors, purchasers and assigns.
C - ATTACHMENT '!-
10.
TTACHMENT '!10. Any notice or other communication hereunder shall be in writing and shall be
-given personally or by prepaid registered mail, with return receipt requested,
addressed as follows`
To Subdivider:
Dan M. Lemburg
3212 Broad Street, Suite 200
San Luis Obsipo, California 93401
To City:
Director of Public Works
990 Palm Street
San Luis Obispo, California 93401
11. In the event any party hereto brings or commences litigation for a declaration
of the rights of the parties under this Reimbursement Agreement, for
injunctive relief, or for an alleged breach or default of this Reimbursement
Agreement, or any other action arising out of this Reimbursement.Agreement,
the prevailing party in any such action shall be entitled to an award of
reasonable attorneys' fees and any court costs incurred in such action or
proceeding, in addition to any other damages or relief awarded, regardless of
whether such action proceeds to final judgment.
12. This Reimbursement Agreement constitutes the final and complete agreement
and supersede all prior correspondence, memoranda or agreements. This
Reimbursement Agreement cannot be changed or modified other than by a
written agreement executed by both parties.
13. This Reimbursement Agreement shall be governed by and construed in
accordance with the laws of the State of California.
14. If any term or provision of this Reimbursement Agreement shall,to any
extent, be held invalid or unenforceable, the remaining terms and provisions
of this Reimbursement Agreement shall not be affected thereby, but each
remaining term and provision shall be valid and enforced to the fullest extent
permitted by law.
THIS REIMBURSEMENT AGREEMENT is executed as of the date and year first above
written.
CITY OF SAN LUIS OBISPO
By:
ATTRCHMEW
Ken Hampian
City Administrative Officer
ATTEST:
Audrey Hooper; City Clerk
APPROVED AS TO FORM:
at—an P. Lowell, City Attorney
SUBDIVIDER:
DAN M. MBUR
By:
Dan M. Lembur