HomeMy WebLinkAboutO-1639 Approving the Development agreement between the City of San Luis Obispo and Avila Ranch LLCORDINANCE NO. 1639 (2017 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING THE DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO, A
CHARTER CITY, AND AVILA RANCH LLC
WHEREAS, on May 4, 2015, Avila Ranch, LLC ("Applicant") submitted a development
plan proposal for a new, primarily residential development with up to 720 dwelling units ("the
Project") on a 150 -acre site north of Buckley Road, located within the Airport Area Specific Plan
("AASP") boundaries. The Project also includes 15,000 square feet of neighborhood -serving retail
and office uses next to a neighborhood park, as well as the preservation of agricultural uses and
open space. The development plan contains the specific development proposal for the site,
including a land use framework, design guidelines and concepts, circulation plan, and
infrastructure plan. The Project as proposed is envisioned to implement the policies and
development parameters as articulated in the recent Land Use and Circulation Elements (LUCE)
update, other elements of the General Plan, the AASP, and the City's Community Design
Guidelines; and
WHEREAS, on May 16, 2017, the City Council authorized the City Manager to initiate
discussions with the Applicant for a Development Agreement and to execute a third -party
reimbursement Agreement for the Applicant to reimburse the City for the costs of any outside legal
or technical consultants the City may require to assist with the negotiation or review of the Avila
Ranch application for a Development Agreement; and
WHEREAS, the City retained both outside legal and financial consultants to assist with
negotiations and analysis of the proposed development agreement at the Applicant's expense; and
WHEREAS, the financial analysis prepared for this project concludes that extraordinary
public benefits that the City will receive from the Development Agreement exceed the value to the
Applicant by approximately $30 million; and
WHEREAS, a Draft Environmental Impact Report dated November 2016 and a Final
Environmental Impact Report dated June 2017 have been prepared analyzing the environmental
effects of the proposed development Project; and
WHEREAS, the proposed Development Agreement provides for the orderly development
of the Project and outlines financing mechanisms to construct infrastructure, identifies funds for
potential reimbursement for certain infrastructure costs, requires sustainable building features and
technology that have the potential to reduce greenhouse gas emissions, establishes an offsite
agricultural mitigation strategy, requires funds for transit improvements to offset air quality
emissions, and incorporates affordable housing requirements that exceed those standards as set
forth in the City's applicable housing policies, ordinances and programs; and
WHEREAS, the Development Agreement for the Project implements the Avila Ranch
Development Plan and related entitlements as evaluated in the Final Environmental Impact Report
and does not introduce any new potential environmental impacts; and
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Ordinance No. 1639 (2017 Series) Page 2
WHEREAS, the Development Agreement does authorize the project to accelerate
buildout of the project above the phasing schedule so long as there is outstanding indebtedness
owed to Avila Ranch for offsite improvements as determined by findings by the Community
Development Director and that the phasing will not exceed the City's Growth Management
Ordinance; and
WHEREAS, an acceleration in the buildout of the project schedule will not introduce any
environmental impacts because: 1) the acreage and boundaries of each phase of development will
remain the same as that analyzed in the EIR; 2) the sequence of development will remain the same
as that analyzed in the EIR; 3) project components such as road improvements that serve to
mitigate impacts as well as mitigation measures identified in the EIR will continue to apply to
each phase of development; 4) the cumulative buildout of the project was analyzed in combination
with other projects under development and analyzed with the full buildout of the City as forecasted
in the 2014 LUCE General Plan Update and related Final Environmental Impact Report for the
project; and 5) all applicable mitigation measures for each phase of development would also be
accelerated to coincide with any phased portion of development under construction; and
WHEREAS, on June 28, June 29, July 12, and August 9, 2017, the City's Planning
Commission held duly noticed public hearings on the Project and the Development Agreement.
On August 9, 2017, the Planning Commission recommended that the City Council: 1) certify the
Environmental Impact Report, adopt appropriate CEQA findings and Statement of Overriding
Considerations, and adopt a Mitigation and Monitoring and Reporting Plan; 2) approve the Airport
Area Specific Plan Amendment, General Plan Amendment and Rezone; 3) approve the Avila
Ranch Development Plan based on findings that the project is consistent with the General Plan and
Airport Area Specific Plan, as amended; 4) approve the Vesting Tentative Tract Map No. 3089;
and 5) approve the Development Agreement; and
WHEREAS, on September 19, 2017, the City Council adopted a resolution certifying the
Final Environmental Report for the Project and adopting CEQA findings and a statement of
overriding considerations and a mitigation monitoring plan; and
WHEREAS, the City Council finds that the Development Agreement is consistent with
the objectives, policies, general land uses and programs specified in the General Plan of the City
of San Luis Obispo, as described below, and as further detailed in the accompanying City Council
staff report prepared for this project and the exhibits thereto:
a) The proposed Development Agreement is consistent with the objectives, policies, general
land uses and programs specified in the general plan and any applicable specific plan, in
that Land Use and Circulation Element (LUCE) Policy 8.1.6. SP -4, Avila Ranch Specific
Plan Area. Specifically, the project:
i.) incorporates a variety of housing types and affordability levels;
ii.) Modification of the Airport Area Specific Plan to either exclude this area or
designate it as a special planning area within the Airport Area Specific Plan.
iii.) Provision of buffers along Buckley Road and along eastern edge of property from
adjacent agricultural uses.
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iv.) Provision of open space buffers along northern and western boundaries to separate
this development from adjacent service and manufacturing uses.
v.) Provision of open space buffers and protections for creek and wildlife corridor that
runs through property.
vi.) Safety and noise parameters described in this General Plan and the purposes of the
State Aeronautics Act; or other applicable regulations relative to the San Luis
Obispo Regional Airport.
vii.) Fully funding Buckley Road and the connection of Buckley Road to South Higuera
Street.
viii.) Appropriate internal and external pedestrian, bicycle, and transit connections to the
City's circulation network.
ix.) Implementation of the City's Bicycle Transportation Plan including connections to
the Bob Jones Trail.
x.) Water and wastewater infrastructure needs as detailed in the City's Water and
Wastewater Master Plans.
xi.) Provides funding for fire protection and impacts to emergency response times.
xii.) Includes architectural design that relates to the pastoral character of the area and
preserves view of agrarian landscapes.
xiii.) Provision of neighborhood parks that exceed applicable General Plan Policies.
b) Furthermore, the Project is consistent with LUCE's overall land use policies by providing
community benefits for the area, including but not limited to, affordable and workforce
housing, and contributions thatt would support transportation, parks and recreation, multi
modal infrastructure, and recycled water infrastructure programs in the City.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Findings. In addition to the findings set forth in the recitals, which are
incorporated herein by this reference, the City Council hereby finds based on evidence described
above, as follows:
a) The proposed Development Agreement attached hereto as Exhibit "1" is consistent
with the general plan and the Airport Area Specific Plan;
b) The proposed Development Agreement complies with zoning, subdivision and other
applicable ordinances and regulations;
c) As described in the recitals above, the proposed Development Agreement promotes
the general welfare, allows more comprehensive land use planning within the airport
area, and provides substantial public benefits and necessary public improvements for
the region, making it in the city's interest to enter into the Development Agreement
with the applicant; and
d) The proposed Avila Ranch project and Development Agreement:
i.) Will not adversely affect the health, safety or welfare of persons living or working
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in the surrounding area; and
ii.) Will be appropriate at the proposed location and will be compatible with adjacent
land uses.
SECTION 2. Action. The Development Agreement is hereby approved subject to such
minor, confirming and clarifying changes consistent with the terms thereof as may be approved by
the City Manager, in consultation with the City Attorney, prior to the execution thereof.
SECTION 3. Upon the effective date of this Ordinance as provided in Section 7 hereof,
the Mayor and City Clerk are hereby authorized and directed to execute the Development
Agreement and, upon full execution, record the Development Agreement in the Official Records
of San Luis Obispo County.
SECTION 4. The City Manager is hereby authorized and directed to perform all acts
authorized to be performed by the City Manager in the administration of the Development
Agreement pursuant to the terms of the Development Agreement.
SECTION 5. CEQA determination. The City Council hereby finds that the Development
Agreement has been environmentally reviewed pursuant to the provisions of the California
Environmental Quality Act (Public Resources Code Sections 21000, et seq. ("CEQA"), the State
CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000, et seq.) and the
City's local standards. The City prepared an Initial Study and, based on information contained in
the initial study, concluded that there was substantial evidence that the Project might have a
significant environmental impact on certain resources. Pursuant to CEQA Guidelines Section
15064 and 15081, and based upon the information contained in the Initial Study, the City ordered
the preparation of an Environmental Impact Report ("EIR") for the Project to analyze potential
impacts on the environment. The City Council certified the EIR on September 19, 2017, pursuant
to Resolution No. 10832 (2017 Series) made certain CEQA findings and determinations and
adopted a Statement of Overriding Considerations and Mitigation and Monitoring Program.
Resolution No. 10832 (2017 Series) is incorporated herein by this reference, and made a part
hereof as if fully set forth herein. The City Council finds that accelerated buildout of the project
as authorized by the Development Agreement will not cause any new significant environmental
effects or a substantial increase in the severity of previously identified effects because, among
other things: 1) the acreage and boundaries of each phase of development will remain the same as
that analyzed in the EIR; 2) the sequence of development will remain the same as that analyzed
in the EIR; 3) project components such as road improvements that serve to mitigate impacts as
well as mitigation measures identified in the EIR will continue to apply to each phase of
development; 4) the cumulative buildout of the project was analyzed in combination with other
projects under development and analyzed with the full buildout of the City as forecasted in the
2014 LUCE General Plan Update and related Final Environmental Impact Report for the project;
and 5) all applicable mitigation measures for each phase of development would also be accelerated
to coincide with any phased portion of development under construction. The documents and other
material that constitute the record on which this determination is made are located in the
Community Development Department located at 919 Palm Street, San Luis Obispo, California.
The City Council hereby directs staff to file a Notice of Determination with the San Luis Obispo
County Clerk Recorder's Office.
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Ordinance No. 1639 (2017 Series) Page 5
SECTION 6. If any section, subsection, sentence, clause, or phrase of this Ordinance is
for any reason held to be invalid or unconstitutional by a decision of any court of any competent
jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.
The City Council hereby declares that it would have passed this Ordinance, and each and every
section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without
regard to whether any portion of the Ordinance would be subsequently declared invalid or
unconstitutional.
SECTION 7. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least five (5) days prior to its final passage, in The
Tribune, a newspaper published and circulated in this City. This ordinance shall go into effect at
the expiration of thirty (30) days after its final passage.
INTRODUCED on the 19th day of September, 2017, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the 3rd day of October, 2017, on the following vote:
AYES:
NOES:
ABSENT:
ATTEST:
Council Members Christianson, Gomez and Pease,
Vice Mayor Rivoire and Mayor Harmon
None
None
Carrie Gallagher, City Clerk
AS
stine Dietrick, Cit� Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this a y�j day of _()_
Carrie Gallagher
City Clerk
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Ordinance No. 1639 (2017 Series)
EXHIBIT 1
Recording Fees Exempt Pursuant to
Government Code § 27383.
Recording Requested By And
When Recorded Mail to:
City of San Luis Obispo
c/o City Clerk
990 Palm Street
San Luis Obispo, California 93401
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF SAN LUIS OBISPO
F0�
AVILA RANCH, LLC
RELATING TO
THE AVILA RANCH SPECIFIC PLAN
(The "AVILA RANCH DEVELOPMENT AGREEMENT")
As Adopted by the San Luis Obispo City Council
on by Ordinance No. -
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EXHIBIT I
TABLE OF CONTENTS
RECITALS AND DEFINITIONS...................................................................................................1
AGREEMENT.................................................................................................................................4
ARTICLE 1. GENERALLY..........................................................................................................4
Section 1.01.
Definition of "Avila Ranch".............................................................4
Section 1.02.
Effective Date...................................................................................4
Section1.03.
Term..................................................................................................4
Section 1.04.
Execution and Recordation of Agreement........................................5
ARTICLE 2. DESCRIPTION OF THE PROJECT............................................................6
Section2.01.
In General.........................................................................................6
Section 2.02.
Project Approvals.............................................................................6
Section 2.03.
Subsequent Approvals......................................................................6
Section 2.04.
Subsequent Approval Documents.....................................................6
Section2.05.
Approvals..........................................................................................6
ARTICLE 3. DEVELOPMENT OF PROJECT IN GENERAL........................................6
Section 3.01.
Consideration to Avila Ranch...........................................................6
Section 3.02.
Consideration to City........................................................................7
Section 3.03.
Rights of Avila Ranch Generally......................................................7
Section 3.04.
Rights of City Generally...................................................................7
Section 3.05.
Project Parameters............................................................................8
ARTICLE 4. APPLICABLE LAW....................................................................................8
Section4.01.
In General.........................................................................................8
Section 4.02.
Application of Other City Laws.......................................................8
Section 4.04.
State and Federal Law......................................................................9
ARTICLE 5. FINANCIAL COMMITMENTS OF CITY AND AVILA RANCH ...........9
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Section 5.01. In General..........................................................................................9
Section 5.02.Basic Principles..................................................................................9
Section 5.02.2. Financing of Infrastructure; Operation and Maintenance ............ 10
Section 5.03. Establishment of Financing Mechanisms.......................................11
Section 5.04. Imposition of and Increases in Fees, Taxes, Assessments
andOther Charges.....................................................................................12
Section 5.05. Other Commitments of City and Avila Ranch Related to
Financing...................................................................................................14
Section 5.05.4. Other Shortfalls of City...............................................................17
ARTICLE 6. COMMITMENTS OF CITY AND AVILA RANCH RELATED TO
PUBLICIMPROVEMENTS.............................................................................................18
Section 6.01. Backbone Infrastructure Phasing Plan.............................................18
Section 6.02. Construction and Dedication of Project Facilities and
Infrastructure..............................................................................................18
Section 6.03. Dedications.....................................................................................19
Section 6.04. Cooperation with Respect to Project Facilities and
Infrastructure...............................................................................................19
ARTICLE 7. OTHER COMMITMENTS OF CITY AND AVILA RANCH..................21
Section 7.01. Mutual Cooperation for Other Governmental Permits ...................21
Section 7.02. Timing of Development..................................................................21
Section 7.03. Dedication of Park Lands................................................................22
Section 7.04. Dedication of Open Space and Agricultural Lands .........................22
Section 7.05. Affordable Housing and Workforce Housing.................................23
Section7.07. Energy............................................................. ......23
Section7.08. Water................................................................................................23
Section 7.09. Storm Drain Facilities......................................................................24
Section 7.10. Interim Fire Station..........................................................................24
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Section 7.11. Traffic and Circulation Improvements...........................................24
Section 7.12. Bicycle and Multimodal Transportation Improvements.................25
Section 7.13. Miscellaneous..................................................................................25
ARTICLE 8. CONSIDERATION OF PERMITS AND APPROVALS ...........................26
Section8.01. In General...................................................................................................26
Section 8.02. General Plan and AASP Amendments...........................................26
Section 8.03. CEQA Compliance......................................................................................27
Section 8.04. Life of Approvals............................................................................27
Section 8.05. Vesting Maps..................................................................................27
Section 8.06. Need for Flexibility.........................................................................27
ARTICLE 9. AMENDMENTS........................................................................................27
Section 9.01. Amendments of Agreement........................................................................27
ARTICLE 10. ANNUAL REVIEW.................................................................................28
Section 10.01. Annual Review.............................................................................28
ARTICLE 11. MITIGATION MONITORING AND REPORTING PROGRAM
EVALUATION; DEVELOPMENT AGREEMENT REVIEW ...........................28
Section 11.01. Mitigation Monitoring and Reporting Program Evaluation. . ........ .......... 28
Section 11.02. Development Agreement Review.................................................29
ARTICLE 12. DEFAULT, REMEDIES, TERMINATION OF DEVELOPMENT
AGREEMENT.......................................................................................................29
Section 12.01. Defaults.........................................................................................30
Section 12.01.1. Notice and Cure.........................................................................30
Section 12.01.2. Actions during Cure Period.......................................................30
Section 12.02. Remedies of Non -Defaulting Party..............................................30
Section 12.03. Termination Due to Default..........................................................32
Section 12.03.2. Procedures for Termination.......................................................32
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ARTICLE 13. ASSIGNMENT, TRANSFER AND NOTICE.........................................33
Section 13.02.
Transfers In General.....................................................................33
Section 13.02.02. City Review of Release Provisions..........................................33
ARTICLE 14. MORTGAGEE PROTECTION...............................................................34
ARTICLE 15. GENERAL
PROVISIONS.......................................................................35
Section 15.01.
Incorporation of Recitals and Exhibits.........................................35
Section 15.02.
Project is a Private Undertaking...................................................35
Section 15.03. Cooperation in the Event of Legal Challenge...........................................35
Section 15.04.
Defense and Indemnity.................................................................36
Section 15.05.
Governing Law; Attorneys' Fees..................................................36
Section 15.06.
Force Majeure...............................................................................37
Section15.07.
Waiver...........................................................................................37
Section 15.08.
Notices..........................................................................................38
Section 15.09.
No Joint Venture or Partnership...................................................39
Section 15.10.
Severability...................................................................................39
Section 15.11.
Estoppel Certificate......................................................................39
Section 15.12.
Further Assurances.......................................................................39
Section 15.13. Construction..............................................................................................39
Section 15.14.
Other Miscellaneous Terms..........................................................40
Section 15.15.
Counterpart Execution..................................................................40
Section15.16.
Time..............................................................................................40
Section 15.17,
Good Faith/Fair Dealing...............................................................40
Section15.18. Exhibits.....................................................................................................40
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DEVELOPMENT AGREEMENT
BY AND BETWEEN THE CITY OF SAN LUIS OBISPO AND AVILA RANCH, LLC
RELATING TO THE AVILA RANCH DEVELOPMENT PLAN
THIS DEVELOPMENT AGREEMENT is entered into this day of , 2017
("Execution Date"), by and between the CITY OF SAN LUIS OBISPO, a municipal corporation
and charter city ("City"), and AVILA RANCH, LLC, a California limited liability company
("Avila Ranch" or "Developer"), hereinafter referred to in this Development Agreement
individually as a "Party" and collectively as the "Parties," as appropriate.
RECITALS AND DEFINITIONS
A. The "Project," as referenced in this Development Agreement, consists of the
development of housing, neighborhood commercial buildings, parks, agricultural and open space
uses, and various public infrastructure facilities located within the Avila Ranch subarea of the
Airport Area Specific Plan area on the southwestern boundary of the City, as more particularly
described and defined in Section 2.01 below.
B. The "Property," as referenced in this Development Agreement, consists of
approximately 150 acres of land that has been designated for development as part of the Airport
Area Specific Plan (the "AASP Area"). The property comprising the Property is more fully
shown on Exhibit A attached hereto and incorporated herein by this reference. Exhibit B
attached hereto sets forth the legal description for the Property. Avila Ranch represents and
warrants to City that as of the Execution Date, Avila Ranch has a legal or equitable interest in the
Property.
C. Upon the effective date of the City ordinance approving this Development
Agreement, this Development Agreement becomes Effective, as defined in Section 1.02 below,
as to the Property and the City will record it against the Property.
D. On December 9, 2014, City adopted an update to the Land Use and Circulation
Elements of the City's General Plan that included the AASP Area. The City's General Plan
designates the Property for a variety of land uses including residential, neighborhood
commercial, open space, and agricultural, and provides for the development of these uses so as to
benefit the City and its residents
E. City and Avila Ranch have engaged in a cooperative and successful relationship
to establish a development plan for the Property (the "Development Plan"). These efforts have
culminated in the City's adoption and approval of the following entitlements:
(1) The Final Environmental Impact Report and associated Mitigation Monitoring
and Reporting Plan (including all mitigation measures therein) for the project
certified and adopted, respectively, by Resolution No. , on
(2) The Amendment to Airport Area Specific Plan as amended by Resolution No.
adopted
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(3) The City's zoning map as amended by Ordinance No. , adopted
(4) The Development Plan approved by Resolution No. , on
(5) Vesting Tentative Tract Map #3089 (Avila Ranch approved
(6) Ordinance No. dated , 2017 adopting this Development Agreement
("the Adopting Ordinance").
(7) The amendment to the City General Plan, as amended by Resolution No. ,
adopted
(8) The conditions of approval of each of the foregoing.
These approvals described in this Recital E, together with the Environmental Impact Report and
related Findings, Statement of Overriding Considerations and Mitigation Monitoring and
Reporting Plan described in Recital F below, are referred to herein, collectively, as the
"Entitlements" or "Project Entitlements."
F. Before approving the Entitlements described in Recital E above, the City Council
of the City of San Luis Obispo: (i) reviewed and considered the significant environmental
impacts of the Project and several alternatives to the Project, as described in that certain Final
Environmental Impact Report (the "Project EIR") and (ii) adopted Resolution No. - on
2017 to certify the Project EIR, making Findings Concerning Mitigation Measures and
Alternatives (the "Findings"), adopting a Statement of Overriding Considerations, and adopting a
Mitigation Monitoring and Reporting Plan (the "MMRP"), all in accordance with the provisions
of the California Environmental Quality Act, California Public Resources Code section 21000 et
seq. ("CEQA").
G. One of the principal purposes of this Development Agreement is to further the
cooperative relationship between City and Avila Ranch for the benefit of all residents of San
Luis Obispo during the implementation of the Project. The City and Avila Ranch join as Parties
to this Development Agreement to ensure the requirements of the Development Agreement
Statute (California Government Code section 65864 et. seq.) are satisfied. As more fully set forth
below, this Development Agreement contains both covenants of a personal nature and covenants
and/or servitudes that run with title to the Property.
H. This Development Agreement is based upon and was written to achieve these
purposes:
(1) that the City shall be kept and/or made "whole" by Avila Ranch as to the Property
and by other property owners with respect to their respective properties with
respect to all aspects (e.g., fiscal impacts, etc.) of the planning, development,
maintenance and operation of the AASP Area including, among other things, the
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costs to the City of providing the Project with public services and facilities, the
payment of City's costs associated with the implementation of the Development
Agreement, the Entitlements, all other planning and environmental efforts
described and envisioned by the Development Agreement, the Subsequent
Approvals (as defined in Section 2.04 below) and the Project, and the mitigation
of the Project's environmental impacts.
(2) that once this Development Agreement has taken legal effect, Avila Ranch shall
have a full and vested right, throughout the term of this Development Agreement,
to the Rights and Obligations as to the Property;
(3) that this Development Agreement is intended to reduce the uncertainty in
planning and implementation for and, and to secure the orderly development of,
the Project, ensure a desirable and functional community environment, provide
effective and efficient development of public facilities, infrastructure and services
appropriate for the development of the Project, ensure maximum effective
utilization of resources within the City, and provide other significant benefits to
the City and its residents;
(4) to secure Project features and Development conditions above and beyond those
that may be levied by the City under existing zoning and development regulations
and the FEIR;
(5) to provide Developer with a reliable and definitive form of reimbursement for
offsite and onsite infrastructure beyond its fair share;
(6) that this Development Agreement is intended to be consistent with and to
implement the City's General Plan, and more particularly the achievement of the
community's development objectives for the Property as set forth in Policy 8.1.6
of the Land Use Element;
(7) that the development of the Project will enable the City to capture sales taxes that
are being leaked to other communities because of the jobs -housing imbalance;
(8) that the development of the Project would result in the capture of an estimated
540 households that commute to jobs in San Luis Obispo, resulting in the
reduction of Countywide vehicle miles traveled for those trips by approximately
4.0 million miles per year; and
(9) that the value of the obligations of the Developer pursuant to this Development
Agreement are anticipated to be above and beyond those necessary to serve the
Project.
The Rights and Obligations of the Parties to this Development Agreement shall be construed and
interpreted so as shall give full effect to each and all of these purposes.
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I. As used in this Development Agreement, "Rights" shall mean all of the vested
and other rights and benefits of the Development Agreement, and the term "Obligations" shall
mean all of the duties, obligations, responsibilities and other burdens of the Development
Agreement. References to lot numbers in this Development Agreement refer to lots as numbered
in Vesting Tentative Tract Map. No. 3089 dated April 26, 2017.
J. As used in this Development Agreement, the terms, phrases and words shall have
the meanings and be interpreted as set forth in this Development Agreement (the meaning given
the term in the singular shall include the term in the plural and vice versa) unless the context
clearly indicates the Parties intended another meaning. To the extent that any capitalized terms
contained in this Development Agreement are not defined within it, then such terms shall have
the meaning ascribed to them in the City Laws, other applicable law or, if no meaning is given a
term in any of those sources, the common understanding of the term shall control.
AGREEMENT
NOW, THEREFORE, in consideration of the promises, covenants and provisions set
forth in this Development Agreement, the Parties hereby agree as follows:
ARTICLE 1. GENERALLY
Section 1.01. Definition of "Avila Ranch." As used herein, "Avila Ranch" means Avila Ranch,
LLC, as that business entity existed on the Effective Date and any permitted successor, assign, or
transferee of Avila Ranch, LLC.
Section 1.02. Effective Date. This Development Agreement is entered into by and between the
City and Avila Ranch and takes legal effect on , 2017, the date that Ordinance No.— -
approving the Development Agreement takes legal effect ("Effective Date"). The terms and
conditions of this Development Agreement shall be for the benefit of or a burden upon the
Property, shall run with title to the Property, and shall be binding upon Avila Ranch and its
permitted successors, assigns and transferees during their respective ownerships of any portion
of the Property.
Section 1.03. Term.
Section 1.03.1. In General.
(a) The term of this Development Agreement shall commence upon the Effective
Date and shall continue until, and terminate upon, the earliest of the following
dates ("Termination Date"):
(1) 12:01 a.m. on the anniversary of the Effective Date, 2037, unless Avila Ranch
requests, and the City approves, an extension of the Term for an additional 10 -
year period, in which case the Termination Date shall be 12:01 on the anniversary
of the Effective Date, 2047. Such request for extension shall be submitted, in
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writing, to the City Manager at least 180 days, but no earlier than 365 days, before
the 2037 Termination Date. The City may deny the request if Avila Ranch is not in
compliance with all of its Obligations under this Development Agreement;
(2) 12:01 a.m. on the anniversary of the Effective Date, 2024, should Avila Ranch fail
to substantially complete the Backbone Infrastructure for Phases 1 and 2 of the
Project in accordance with the Project's Phasing Plan as set forth in Section 6.01,
below. As used herein, "substantially complete" means that all of the Backbone
Infrastructure required for Phases 1 and 2 listed in the phasing schedule is actively
under construction and is being diligently prosecuted to completion, with all
bonds in place.
(3) This Development Agreement may be terminated with respect to the property
included in a recorded final subdivision map creating residential lots on any
portion of the Property, provided that no further on-site or off-site infrastructure is
required and no conditions remain to be satisfied before building permits can be
issued for the development of lots depicted on that map. Concurrently with or
following recordation of such a subdivision map as to any portion of the Property,
Avila Ranch may request in writing and the Community Development Director
shall not unreasonably withhold a certificate of termination of this Development
Agreement, in recordable form, solely as to the property included in such a final
recorded map which meets the foregoing requirements; provided that no such
certificate need issue if obligations to the City under this Development Agreement
remain unfulfilled which are not made conditions of the approval of the
subdivision map. Upon the Community Development Director's recordation of
such a certificate, this Development Agreement shall terminate as to the land
covered by such final map. If Avila Ranch does not request or the Community
Development Director does not issue such a certificate, this Development
Agreement shall continue to apply to any lot depicted on such a subdivision map
until this Development Agreement otherwise expires or terminates according to its
terms.
(b) This Development Agreement shall be of no further force, effect or operation
upon the Termination Date. Subject to the provisions of Section 8.04 below, in no
event shall the expiration or termination of this Development Agreement result in
expiration or termination of any Approval without further action of City.
Section 1.04. Execution and Recordation of Agreement.
Section 1.04.1. Execution and Recordation. Avila Ranch shall execute this Development
Agreement, in conformance with Section 15.15 of this Development Agreement, within five
business days of date of adoption of the Adopting Ordinance referenced in Recital E above.
Provided Avila Ranch has so executed this Development Agreement, City shall execute this
Agreement, in conformance with Section 15.15 of this Agreement, within five business days of
execution of this Development Agreement by Avila Ranch.
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Section 1.04.2. Recordation. City shall deliver this Development Agreement to the
County Recorder for recordation within 10 days following its execution.
ARTICLE 2. DESCRIPTION OF THE PROJECT
Section 2.01. In General. As used herein, "Project" means the development of the
Property as described in the "Project Approvals" (defined in Section 2.02 below), including all
on-site and off-site "Project Facilities and Infrastructure" (defined in Section 5.02.1 below).
Section 2.02. Project Approvals. As used herein, "Project Approvals" include, but are not
limited to: (i) those provisions of City's General Plan that relate to or affect the Property, as the
General Plan existed on the Effective Date and as it may be amended from time to time
consistently with this Development Agreement (the "General Plan"), (ii) those provisions of the
Development Plan (including the Design Guidelines) that relate to or affect the Property, as
incorporated into the Specific Plan, as the Development Plan existed on the Effective Date and as
it may be amended from time to time consistently with this Development Agreement (the
"Development Plan"), (iii) the zoning of the Property, as it existed on the Effective Date and as it
may be amended from time to time consistently with this Development Agreement thereafter
(the "Zoning") and (iv) the other entitlements listed in Recital E above; provided that "Project
Approvals" shall not mean or include amendments to the General Plan, AASP or Zoning of the
Property that conflict with the Project Approvals as they existed on the Effective Date unless
Avila Ranch consents in writing to such conflicting amendments.
Section 2.03. Subsequent Approvals. As used herein, "Subsequent Approvals" mean
those permits and approvals (other than the Project Approvals and amendments thereto)
necessary or desirable for the development of the Project including, without limitation, those
identified in Section 2.04 below.
Section 2.04. Subsequent Approval Documents. The "Subsequent Approvals" defined in
Section 2.03 above include, but are not limited to: (i) subdivision maps and related or similar
approvals issued under the California Subdivision Map Act, (ii) development permits (including
Site Plan Reviews and Conditional Use Permits as described in the Specific Plan), (iii)
architectural review and design review approvals (as described in the Specific Plan), (iv) any
other discretionary or ministerial permits or approvals of City necessary or appropriate for build-
out of the Project and Property, and (vi) any amendments to any of the foregoing necessary or
appropriate for the development of the Project.
Section 2.05. Approvals. Project Approvals, amendments to Project Approvals, and
Subsequent Approvals are sometimes referred to in this Development Agreement collectively as
the "Approvals" and each individually as an "Approval."
ARTICLE 3. DEVELOPMENT OF PROJECT IN GENERAL
Section 3.01. Consideration to Avila Ranch. The Parties acknowledge and agree that
City's agreement to perform and abide by the covenants and Obligations of City set forth herein
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is material consideration for Avila Ranch's agreement to perform and abide by the covenants and
Obligations of Avila Ranch set forth herein.
Section 3.02. Consideration to City. The Parties acknowledge and agree that Avila
Ranch's agreement to perform and abide by the covenants and Obligations of Avila Ranch set
forth herein is material consideration for City's agreement to perform and abide by the covenants
and Obligations of City set forth herein.
Section 3.03. Rights of Avila Ranch Generally. Avila Ranch shall have a fully vested right to
develop the Project and to use the Property consistently with this Development Agreement and
Applicable Law.
(a) During the Term of this Development Agreement, the Developer shall have a
vested right to develop the Property to the full extent permitted by the
Entitlements and this Development Agreement. Except as provided within this
Development Agreement, the Entitlements shall exclusively control the
development of the Property, including the uses of the Property, the density or
intensity of use, the maximum height and size of proposed buildings, the
provisions for reservations or dedications of land for public purposes and the
design, improvement and construction standards and specifications applicable to
the Project. The maximum number of residential units authorized to be
constructed hereunder and the approximate acreage of commercial development is
720 residential units and approximately 15,000 square feet of commercial
development. In furtherance of the foregoing, the Developer retains the right to
apportion the uses, intensities and densities, between itself and any other owners
of the Property, upon the sale, transfer or assignment of any portion of the
Property, so long as such apportionment is consistent with the Entitlements and
this Development Agreement.
(b) Subject to the City's exercise of its police power authority the Developer shall
have a vested right to: (i) receive from the City all future development approvals
for the Property that are consistent with and implement the Entitlements and this
Development Agreement; (ii) not have such approvals be conditioned or delayed
for reasons which are inconsistent with the Entitlements or this Development
Agreement; and (iii) develop the Property in a manner consistent with such
approvals in accordance with the Entitlements and this Development Agreement.
All future development approvals for the Property, including without limitation
general plan amendments, zoning changes, or parcel maps or tract maps, shall
upon approval of the City be vested in the same manner as provided in this
Development Agreement as for the Entitlements.
Section 3.04. Rights of City Generally. City shall have a right to regulate development of
the Project and use of the Property consistently with this Development Agreement and
Applicable Law.
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Section 3.05. Project Parameters. The permitted uses of the Property, the density and
intensity of use of the Property, the maximum height and size of buildings included in the
Project, and provisions for the reservation and dedication of land shall be as set forth herein and
in the Project Approvals.
ARTICLE 4. APPLICABLE LAW
Section 4.01. In General.
Section 4.01.1. Applicable Law Defined. Except as the Parties may otherwise agree, the
rules, regulations and official policies applicable to the Project and the Property during the Term
of this Development Agreement shall be those set forth in this Development Agreement and,
except as otherwise set forth herein, the rules, regulations and official policies of City (including
the plans, municipal codes, ordinances, resolutions and other local laws, regulations, capital
facilities fees and policies of City) in force and effect on the Effective Date (collectively,
"Applicable Law").
Section 4.01.2. Approvals as Applicable Law. Applicable Law shall include, without
limitation, Approvals as they may be issued from time to time consistently with this Agreement.
Section 4.02. Application of Other City Laws.
Section 4.02.1. No Conflicting City Laws.
(a) City may apply to the Project and the Property any rule, regulation or official
policy of City (including any plan, municipal code, ordinance, resolution or other
local law, regulation, capital facility fee or policy of City) (each a "City Law")
that does not conflict with Applicable Law or this Agreement. City shall not,
however, without the written consent of Avila Ranch apply to the Project or the
Property (whether by initiative, referendum, imposition of mitigation measures
under CEQA or otherwise) any City Law that is in conflict with Applicable Law
or this Agreement.
(b) If City attempts to apply to the Project a City Law which Avila Ranch believes to
conflict with Applicable Law or this Agreement, Avila Ranch shall give City
written notice describing the legal and factual basis for Avila Ranch's position.
The Parties shall meet and confer within 30 days of City's receipt of such written
notice to seek to resolve any disagreement. If no mutually acceptable solution can
be reached, either Party may take such action as may be permitted under
Article 12 below.
Section 4.03. Uniform Codes and Standard Specifications.
(a) Nothing herein shall prevent City from applying to the Project standards
contained in uniform building, construction, fire or other uniform codes, as the
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same may be adopted or amended from time to time by City, provided that the
provisions of any such uniform code shall:
(1) Apply to the Project only to the extent that such code is in effect on a City-
wide basis; and
(2) With respect to those portions of any such uniform code that have been
adopted by City without amendment, be interpreted and applied consistently
with the generally prevailing interpretation and application of such code in
California.
(b) Nothing herein shall prevent City from applying to the Project standards and
specifications for public improvements (e.g., streets, storm drainage, parking lots,
and driveway widths) adopted or amended from time to time by City, provided
that such standards and specifications shall apply to the Project and the Property
only to the extent that they are in effect on a City-wide basis.
Section 4.04. State and Federal Law.
(a) Nothing herein shall prevent City from applying to the Project or the Property any
change in City Law required by: (i) state or federal law; or (ii) any governmental
agency that, due to the operation of state law (and not the act of City through a
memorandum of understanding, joint exercise of powers or other agreement entered
into after the Effective Date), has binding legal authority on City.
(b) If the application of such changes prevents or precludes performance of one or more
provisions of this Development Agreement, City and Avila Ranch shall take any and
all such actions as may be necessary or appropriate to ensure the provisions of this
Development Agreement shall be implemented to the maximum extent practicable.
ARTICLE 5. FINANCIAL COMMITMENTS OF CITY AND AVILA RANCH
Section 5.01. In General. This Article 5 establishes a framework for the imposition and
allocation to the extent permitted by law of fees, taxes, assessments and other revenues to be
generated and/or paid by the Project and/or the Property. The provisions of this Article 5 are
intended to prevent the Project from resulting in negative fiscal impacts on City as determined by
the fiscal impact analysis prepared for the Project; to facilitate the construction, operation and
maintenance of infrastructure and facilities to avoid or limit the physical impacts of
development; and to assist in the development of the Project so as to provide long-term fiscal and
other benefits to City, including increased employment opportunities, an increased tax base and
revenues to City, and an enhanced quality of life for the City's residents.
Section 5.02. Basic Principles.
Section 5.02.1. General.
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(a) This Article 5 is intended to serve two basic purposes: first, that there shall be no
cost to City for the construction of the fair share allocation of public facilities and
infrastructure needed to serve the Project or the Property or for the provision of
municipal services to the Project or the Property, including the operation and
maintenance of facilities and infrastructure to serve the Project (collectively, the
"Project Facilities and Infrastructure"); and second, that all costs associated with
the construction of Project Facilities and Infrastructure, and the provision of
municipal services to the Project and the Property (including the operation and
maintenance of Project Facilities and Infrastructure) shall be borne by the Project
alone.
(b) The cost of providing Project Facilities and Infrastructure to the Project or the
Property shall be consistent with the following principles: Except as otherwise
specifically permitted by this Development Agreement and not in limitation of
any other provisions hereof, (i) there shall be a reasonable relationship between
any municipal cost required to be borne by the Project and the type of
development within the Project to which such cost is attributable; (ii) there shall
be a reasonable relationship between the need to incur any such municipal cost
and the type of development within the Project to which such cost is attributable;
(iii) no municipal cost required to be borne by the Project shall exceed the
estimated reasonable cost of providing the service or facility to which such
municipal cost relates; and (iv) with respect to any fee required to finance Project
Facilities and Infrastructure, there shall be a reasonable relationship between the
amount of the fee and the cost of the Project Facilities and Infrastructure funded
by such fee. Wherever this Development Agreement requires a "reasonable
relationship" between the Project and any requirement imposed thereon, there
shall be required an essential nexus between the Project and such requirement and
rough proportionality in the allocation of a municipal cost or fee both internally to
various portions of the Property and as between the Project and other projects
within the City.
(c) As used herein, the term "Project Facilities and Infrastructure" shall include
public facilities and infrastructure only to the extent they serve the Project, and
shall not include public facilities or infrastructure to the extent such facilities or
infrastructure serve projects or areas other than the Project or the Property, unless
the public facilities and infrastructure serving the Project or Property are required
to be oversized to serve other projects or areas in accordance with the provisions
of Section 6.02.2 below.
Section 5.02.2. Financing of Infrastructure; Operation and Maintenance. Prior to or
concurrent with the adoption of this Development Agreement City shall consider in good faith
establishing and forming a mechanism or mechanisms to finance Project Facilities and
Infrastructure and Project -related municipal services or the operation and maintenance portion of
the Project Facilities and Infrastructure, such as a Mello -Roos District, Landscaping and Lighting
Districts, or other Maintenance Assessment Districts, in accordance with the following
principles:
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(1) The level of municipal services provided to the Project, including the level of
operation and maintenance of Project Facilities and Infrastructure, shall be at least
equal or superior to the level of service provided elsewhere in the City.
(2) Any costs associated with such mechanism shall be borne by the Project, which
may be reimbursed by the financing mechanism.
(3) The City may require as a condition of approval of a tentative subdivision or
parcel map a financing mechanism or mechanisms to finance the operation and
maintenance of Project Facilities and Infrastructure.
(4) In accordance with and subject to Section 7.13.1 below, Avila Ranch shall include
within the Covenants, Conditions and Restrictions (CC&Rs) required for each
subdivision of the Property a requirement that the Master Homeowners'
Association, and or each Homeowners' Association for a subdivision within the
Property (each, an "HOA"), shall assume responsibilities to maintain, repair and
insure the following items in the event that such financing mechanism is dissolved
or in the event that the fees, assessments, or taxes generated thereby are repealed
or reduced other than by discretionary action by the City Council. In such event
the HOA shall assume responsibility to maintain, repair and insure for the
publiclyowned facilities within the Property (as to a Master HOA) or subdivision
(as to another HOA), including but not limited to, Parks A through F, H and I, and
"Stevenson Park"; landscaped parkways and trees; low -impact -development
treatment facilities; and riparian open space, but expressly shall not assume
responsibility to maintain, repair and insure streets, curbs, gutters, sidewalks,
regional park (Park G), farmed agricultural open space, landscape paseos
connecting the public parks, retaining walls adjacent to the open space corridors,
bike paths, bike path bridges and bike path facilities (including bike paths and
bike path facilities in the County). Avila Ranch shall include the City as a third -
party beneficiary of these CC&Rs in language acceptable to the City Attorney,
which shall grant the City the right to perform the maintenance, repair and
insurance obligations and to impose assessments against the affected parcels in
the event an HOA fails to perform its obligations under this subparagraph (4).
Section 5.03. Establishment of Financing Mechanisms.
Section 5.03.1. Procedures for Establishment. The establishment of any mechanism to
finance the operation or maintenance of Project Facilities and Infrastructure (each a "Financing
Mechanism") shall be initiated upon Avila Ranch's written request to the City's Finance
Director. Such request shall outline the purposes for which the Financing Mechanism is to be
established and the general terms and conditions upon which the establishment of the Financing
Mechanism will be based. City's consideration of Avila Ranch's request shall be consistent with
the criteria set forth in Section 5.02 above. If Avila Ranch requests the City form a Mello -Roos
Community Facilities District to finance the operation or maintenance of Project Facilities and
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Infrastructure, City shall use its best efforts to cause such district to be formed and special taxes
to be levied to the extent permitted by Applicable Law.
Section 5.03.2. Nature of City Participation. City's participation in the formation of any
Financing Mechanism approved by City (and its operation thereafter) and in the issuance of any
Project Debt approved by the City shall include all of the usual and customary municipal
functions associated with such tasks including, without limitation, the formation and
administration of special districts; the issuance of Project Debt; the monitoring and collection of
fees, taxes, assessments and charges such as utility charges; the creation and administration of
enterprise funds; the enforcement of debt obligations and other functions or duties authorized or
mandated by Applicable Law.
Section 5.04. Imposition of and Increases in Fees, Taxes, Assessments and Other Charges.
Section 5.04.1. Taxes and Assessments.
(a) During the Term of this Development Agreement, Avila Ranch shall be bound to
and shall not protest, challenge, or cause to be protested or challenged, any City
tax in effect on the Effective Date.
(b) No assessment shall be imposed on the Project or the Property other than through
a Financing Mechanism as set forth above.
(c) No new debt shall be issued that affects the Project or the Property without Avila
Ranch's approval, unless such debt otherwise conforms with the requirements of
Articles XIII C and D of the California Constitution and any requisite voter
approval is achieved, in which case the City may issue debt even if Avila Ranch
votes against the matter.
Section 5.04.2. Other Fees and Charges; Credits and Reimbursements.
(a) City shall impose against or apply to the Project or the Property only those
financial obligations (other than taxes and assessments) described in this Section
5.04.2. Except as otherwise specifically stated below, any financial obligation
imposed against or applied to the Project under this Section 5.04.2 shall be
consistent with the provisions of controlling California law, including California
Government Code section 66000 et seq. and California Constitution, article XIII
A and its implementing statutes.
(b) The Developer shall be required to pay all City-wide, Airport Area Specific Plan,
Los Osos Valley Road ("L.O.V.R.") Interchange Impact Fees, and Project -specific
development impact fees, excluding sewer and water impact fees addressed in
section 5.04.2(c) immediately below, for the Project's fair share of the cost to
mitigate Project impacts as identified in the Final Environmental Impact Report
(FEIR), Specific Plan, conditions of approval or otherwise specified in the
Development Agreement in effect when each final map is recorded in accordance
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with AB 1600 analysis. City may adjust development impact fees not more than
once a year with changes no greater than the inflation index identified upon
imposition of the fee.
(c) The Developer shall be required to pay sewer and water impact fees in accordance
with the AB 1600 analysis in effect when each Final Map is recorded plus any
adjustments based on CPI until issuance of each building permit. Subsequent
payments shall be adjusted annually by the inflation index identified upon
imposition of the fee as determined by the City.
(d) Fees imposed by City, including but not limited to planning, engineering, building
permit, fire plan check and development impact fees, but excluding sewer and
water impact fees governed by section 5.04.2(c) immediately above, shall be in
accordance with the fees in effect as of the date of when the Final Map is recorded
plus any adjustments based on the inflation index identified upon imposition of
the fee until issuance of each building permit.
(e) If the City amends any existing Development Impact Fee (DIF) program to
include additional projects or costs for the benefit of the Project (either new
projects or increased costs for projects included in the analysis supporting existing
fees) for improvements necessary to satisfy Project requirements, Developer will
be required to pay the amended fees. Credits applied towards infrastructure costs
advanced by Developer shall apply when building permits are issued or fees are
otherwise due and shall arise only from Developer -funded construction of
infrastructure or community facilities included in the project list on which a
particular fee was based. Credits applied when building permits are issued or fees
are otherwise due pursuant to this section shall be adjusted for inflation
consistently with such adjustments of the fees against which credits are allowed.
(f) The Developer shall pay all then -current processing fees for any subsequent
planning applications and permits as adopted by the City Council.
(g) City acknowledges that Developer may dedicate property and install
infrastructure improvements beyond its "fair share" cost. The City agrees to grant
fee credits and reimbursements, funded by Development Impact Fees paid by
Developer and other developers, and traffic impact fees, where eligible, but
excluding sewer and water impact fees. If and to the extent that the Developer
constructs or installs any infrastructure and/or facilities that have a capacity or
size in excess of that required to serve the Project or mitigate its impacts, and one
or more undeveloped properties will be benefitted by such infrastructure and
facilities, the City shall enter into a reimbursement agreement with the Developer,
in a form mutually acceptable to City and Developer, which provides for the
reimbursement of all excess costs and expenses incurred by the Developer in
constructing such improvements in accordance with California Government Code
section 66485 et seq. and section 16.20. 110 of the City's municipal code, the
City's zoning ordinance, and in accordance with Section 5.05.3 below.
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(h) The City's rates for monthly retail utility service (e.g., water and sewer) may be
applied to the Project and increased from time to time during the term of this
Development Agreement; provided, however, that any such increase shall be
imposed only to the extent permitted by law.
(i) Avila Ranch shall pay City reasonable staff and consultant time and other
reasonable costs (including reasonable consultant costs) associated with: (i) the
MMRP Evaluation and the Development Agreement Review, (ii) the
establishment of any Financing Mechanism (to the extent such costs are not
included in the Financing Mechanism), including any necessary election costs,
and (iii) all other administrative tasks associated with City's adoption and
implementation of this Development Agreement and the Project.
(j) Avila Ranch shall pay all required fees of the California Department of Fish and
Wildlife ("CDFW"). CDFW fees shall be submitted to the City's Planning
Division before filing of any required Notice of Determination under CEQA,
along with any fee required by the County Clerk/Recorder. The City may require
proof of payment of such fees before issuing building permits or filing of a Final
Subdivision Map.
(k) During the term of this Development Agreement, fees and charges other than
those specifically described in subsections (a) through 0) above may be imposed
against or apply to the Project or the Property only as City and Avila Ranch agree.
Section 5.05. Other Commitments of City and Avila Ranch Related to Financing.
Section 5.05.1. Arrangements with Other Governmental Agencies. City and Avila Ranch
acknowledge and agree that City may from time to time enter into joint exercise of power
agreements, memoranda of understanding or other agreements with other governmental agencies
consistent with and to further the purposes of this Development Agreement.
Section 5.05.2. Other Funding Sources.
(a) City and Avila Ranch agree to pursue outside sources of funding for the
construction, operation and maintenance of Project Facilities and Infrastructure
including, in particular, facilities and infrastructure which serve the region. City
shall not be obligated, however, to apply for county, state or federal funds if the
use of such funds for the Project would reduce the availability of that resource for
other City projects.
(b) Any obligation of Avila Ranch under this Development Agreement to fund or
otherwise bear the costs of the construction of improvements, the provision of
services or any other item, whether or not the sole obligation of Avila Ranch, may
be satisfied through the use of funds provided by, from or through any third party
(including other non -City, governmental) sources.
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Section 5.05.3. Reimbursement.
(a) City shall reimburse, or provide for the reimbursement by other landowners or
developers, the actual hard and soft costs associated with Avila Ranch's funding
or construction of that portion of any oversized or accelerated improvements or
facilities that is attributable to a project or area other than the Project or Property
as required by this section. Hard and soft costs eligible for reimbursement shall
include, without limitation: reasonable direct costs of construction and materials,
soft costs including bonds, architecture and engineering fees, and professional
fees. Such reimbursement shall be based on a fair share allocation of costs
determined by calculating the pro rata share of the capacity in such improvements
that is attributable to other projects or properties as reflected in the allocation
percentages in Exhibit C, which reimbursement shall be timely provided in
accordance with Applicable Law, following City's collection of funds from the
sources identified in subsection 5.05.3(a)(1)—(4) below. Avila Ranch and City
acknowledge that the amounts specified in Exhibit C for each improvement are
estimates only and that total reimbursable costs shall be based on Avila Ranch's
actual costs as set forth in this Section 5.05.3.
(1) Development Impact Fees paid by the Project for the improvements specified
from the AASP impact fees, L.O.V.R. Interchange impact fees, or the Citywide
transportation impact fees, as applicable;
(2) Development Impact Fees paid to the City on behalf of other development in the
AASP area that are not committed to repayment obligations under prior
Reimbursement Agreements;
(3) Development Impact Fees paid to City from developers who contribute to the
impact associated with the improvements installed by Avila Ranch; and
(4) Taxes or assessments in a Community Facilities District.
(5) Separate reimbursement agreement. For purposes of such agreement, backbone
infrastructure that is larger than the minimum size or standard as identified in the
Standard Specifications and Engineering Design Standards may be considered to
be oversized and shall be subject to prior review and approval by the City prior to
being included in a separate reimbursement agreement.
(b) Under no circumstances shall the City be obligated to fund reimbursement from
its own resources, from funds it does not yet possess, or from funds which may
not be lawfully used for that purpose.
(c) Failure or error by the City to collect funds from the sources identified in
subsection 5.05.3(a) above shall not subject the City to any liability, obligation, or
debt to Avila Ranch. Notwithstanding the foregoing, the City shall reimburse
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Avila Ranch pursuant to the terms of this Agreement with respect to all such funds
actually collected by the City. Failure by the City to reimburse Avila Ranch after
the City collects such funds shall entitle Avila Ranch to exercise its remedies in
accordance with Article 12.
(d) For any improvement subject to reimbursement under this section, Avila Ranch
shall provide City with evidence of the actual hard and soft costs of each of the
improvements in the form of receipted bills, canceled checks, and contracts.
Approval of reimbursement may occur in phases as projects are accepted by City.
Regardless of Avila Ranch's claimed costs incurred in constructing the
reimbursable improvements, City has the authority, through its Director or
designee, in the exercise of his or her reasonable discretion, to determine the
amount subject to possible reimbursement for each improvement.
(e) In the event any owner or developer pays all or a portion of the fees or
assessments identified in subsection 5.05.3(a)(1)—(4) above under protest, the City
shall not be required to make reimbursements under this Development Agreement
until the limitation period for instituting court action to seek a refund of such
funds paid under protest has passed, and no court action ("Action") has been
instituted. If an Action is instituted seeking refund of funds paid under protest, or
to prevent the City from collecting such funds, or challenging any provision of
this Development Agreement, the City shall not pay over such funds to Avila
Ranch until the Action has been finalized and the authority of the City to collect
such funds and reimburse the Developer has been sustained. The City shall
promptly notify Avila Ranch in writing of the Action. The City shall reasonably
support Developer's efforts to participate as a party to the Action, to defend the
Action or settle the Action. Furthermore, the City shall have the right to tender
defense of the Action to Avila Ranch. If, within 15 days of the City's mailing a
notice in compliance with Section 15.08 below requesting that Avila Ranch
defend the Action, should Avila Ranch thereafter fail to undertake the defense of
the Action at Avila Ranch's sole cost and expense, the City may stipulate to return
of the funds collected under protest, to cease collecting such funds, or enter into
any other settlement of the Action acceptable to the City, and Avila Ranch shall
lose any right to reimbursement under this Development Agreement of the
amount contested in the Action. Avila Ranch shall further reimburse the City for
its costs and attorneys' fees incurred in defense of the Action, including
reasonable payment for legal services performed by the City's City Attorney, and
for any liability the City incurred in the Action. In addition, if the City fails to
impose a requirement upon development projects to pay their respective prorated
share of the improvements specified in Exhibit C or fails to collect such funds,
Avila Ranch may exercise all of its legal rights to attempt to collect such funds
from the owners or developers of the benefitted properties, which legal rights
shall not be interpreted to include an action against the City. In the event Avila
Ranch attempts to collect such funds from such owners or developers, the City
shall assign to Avila Ranch all of its rights to collect such funds under this
Development Agreement.
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(f) The City reserves the right to offset any funds it collects from the sources
identified in this Section 5.03.3 against any unpaid fees, debts or obligations of
Avila Ranch owed to the City. The City shall provide Avila Ranch with notice, in
accordance with Section 15.08 and Article 12, of its intent to offset any collected
funds against unpaid fees, debts or obligations described in the notice, and
provide Avila Ranch with a reasonable opportunity to cure such unpaid fees,
debts, or obligations.
(g) Avila Ranch's rights to reimbursement under this Section 5.05.3 shall survive
termination of this Development Agreement for a period of 15 years from the date
of termination or until Developer has been fully reimbursed, whichever occurs
first.
Section 5.05.4. Other Shortfalls of City.
(a) Avila Ranch understands and acknowledges that the costs to City of serving the
Project and the Property and otherwise carrying out its Obligations under this
Development Agreement may exceed the fees, charges and revenues generated by
or as a result of the Project. Accordingly, prior to or concurrently with this
Development Agreement, the City shall establish a Financing Mechanism to
mitigate potential annual shortfalls to the City's General Fund resulting from the
provision of municipal services to the Project, the costs of which exceed the
General Fund revenues generated by development within the Property (the
"General Fund Shortfalls"). The Funding Mechanism shall be designed to remain
in place until annual General Fund revenues generated by development within the
Property are at least equal to the annual General Fund costs incurred by City in
providing municipal services to the Project.
(b) A Financing Mechanism shall be established to generate revenues sufficient to
offset such potential shortfall, if requested by the City, and shall only be effective
if a fiscal impact analysis shows a General Fund Shortfall. The shortfall Financing
Mechanism may consist of a Mello -Roos Community Facilities District ("CFD").
(c) City may annually monitor the fiscal impacts of development within the Property
to determine the extent to which development generates sufficient General Fund
Revenues to eliminate the General Fund Shortfall. When and if the City
determines as a result of annual monitoring that sufficient development has
occurred within the Property to generate General Fund revenues to cover the
annual costs to the City's General Fund of providing municipal services to the
Project (the "Break -Even Point"), the shortfall Financing Mechanism shall be
discontinued and all revenues that have been collected to fund the projected
General Fund Shortfall but have not been used for such purpose shall be refunded
to Avila Ranch, if permissible pursuant to Applicable Law, or otherwise used to
defray Project Costs in the City's reasonable discretion and pursuant to law.
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(d) Avila Ranch's obligation to fund projected General Fund Shortfalls under Section
5.05.4 above shall be limited by the provisions of Section 5.02.1 above and, in
any event, shall not survive the expiration or termination of this Development
Agreement. If Developer requests, and City grants, an extension of this
Development Agreement as set forth in Section 1.03.1(a)(1) above, Avila Ranch's
obligation to fund projected General Fund Shortfalls shall be extended
accordingly.
ARTICLE 6. COMMITMENTS OF CITY AND AVILA RANCH RELATED TO PUBLIC
IMPROVEMENTS
Section 6.01. Backbone Infrastructure Phasing Plan. The Project Backbone Infrastructure is
planned to be designed and constructed in six (6) phases.
Section 6.01.1. Development Plan Phasing Plan. The improvements described in the
Avila Ranch Development Plan and Exhibits E-1 through E-4 and J to this Development
Agreement constitute the Project "Backbone Infrastructure." The Parties acknowledge that
further analysis may result in a more cost-effective approach to the provision of such
infrastructure to adequately serve development within the Project Area, and that Exhibits E-1
through E-4 and J may be revised accordingly by agreement of the Parties and that such
revisions shall not require amendment to this Development Agreement.
Section 6.01.2. Phasing Plan. The phasing plan for the project is attached to this
Agreement as Exhibit D.
Section 6.01.3. Phasing Plan Amendments. The Phasing Plan may be amended by
agreement of the Parties to take advantage of new technologies, to respond to changes in the
underlying land use assumptions upon which the plan is based, or for such other reasons as the
Parties may agree.
Section 6.02. Construction and Dedication of Project Facilities and Infrastructure.
Section 6.02.1. Construction and Funding of Project Facilities and Infrastructure by
Avila Ranch. The City may, in any manner consistent with the terms and provisions of this
Development Agreement, require Avila Ranch to construct or fund the construction of any
Project Facilities and Infrastructure when needed to satisfy the Backbone Infrastructure Phasing
Plan.
Section 6.02.2. Oversizing of Project Facilities and Infrastructure.
(a) In addition to requiring Avila Ranch to construct or fund the construction of
Project Facilities and Infrastructure, City may require any Project Facilities and
Infrastructure constructed or funded by Avila Ranch under Section 6.01 above to
be oversized to serve projects or areas other than the Project or the Property;
provided that:
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(i) City shall consider in good faith the establishment of a Financing Mechanism to
provide such additional funding;
(ii) City shall reimburse the costs associated with Avila Ranch's funding or
construction of that portion of any such oversized improvements that is
attributable to projects or areas other than the Project or the Property, pursuant to
section 5.05.3 of this Agreement above.
(b) If the phasing or incremental construction of facilities would involve significant
inefficiencies that are unacceptable to City for a sub -phase implemented by Avila
Ranch, Avila Ranch may be required to construct or provide advance funding for
the construction of oversized improvements. For example, if the Project generates
a need for an 18 -inch sanitary sewer line, but other projects reasonably may be
expected to use that sewer line and thereby increase the required capacity of such
line to 24 inches, City may require Avila Ranch to construct or fund the
construction of a 24 -inch sewer line (but shall provide reimbursement as
described in section 5.05.3 above). Notwithstanding the foregoing, City shall
exercise its best good faith efforts to reasonably limit Avila Ranch's obligation to
construct or provide advance funding of oversized improvements and may in
certain instances, in the interest of fairness to Avila Ranch, tolerate certain
inefficiencies.
Section 6.03. Dedications.
(a) To the extent rights-of-way or other interests in real property owned by Avila
Ranch within the Property are needed for the construction, operation or
maintenance of Project Facilities and Infrastructure, Avila Ranch shall dedicate or
otherwise convey such rights-of-way or other interest in real property to City, or
as necessary to the County of San Luis Obispo. Such rights-of-way shall be
dedicated or otherwise conveyed in the widths set forth in the AASP or in the
Avila Ranch Development Plan.
(b) Any public improvements constructed by Avila Ranch and conveyed to City, and
any right-of-way or other real property conveyed to City, shall be dedicated or
otherwise conveyed (i) free and clear of any liens unacceptable to the City and
(ii) except as otherwise agreed to by City, in a condition free of any toxic
materials. Nothing herein shall prevent City's right to pursue third parties under
applicable law.
Section 6.04. Cooperation with Respect to Project Facilities and Infrastructure.
Section 6.04.1 Off -Site Improvements. Avila Ranch acknowledges that certain off-site
improvements are required as part of the project's conditions of approval and mitigation
measures which include, but may not be limited to:(i) a right-of-way along Buckley Road and/or
the Buckley Extension; (ii) a right-of-way necessary to implement the Horizon Extension from
the project to Suburban Road: (iii) the Earthwood Extension to Suburban; (iv) improvements to
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Suburban Road between Earthwood and Horizon; (v) improvement of the intersection of Vachell
and Venture; (vi) pedestrian improvements along Higuera and Vachell; (vii) intersection
improvements at Higuera/Buckley, L.O.V.R./Higuera, Suburban/Higuera, Tank Farm/Higuera,
Prado/ Higuera and South/Higuera; and (viii) bicycle improvements required by the City and
consistent with the City Bicycle Master Plan, all of which are more particularly described in the
Project's approved plans (the "Off -Site Improvements"). A schedule of all Off -Site
Improvements for which Avila Ranch is responsible is attached as Exhibit C to this Agreement.
Avila Ranch shall exhaust all reasonable efforts and diligently pursue acquisition of all necessary
easements and/or rights of way not currently owned or controlled by City or Avila Ranch which
are required to construct the Off -Site Improvements. For purposes of this Section 6.04.1, the
term "reasonable efforts" shall include proof that the Avila Ranch has made a commercially
reasonable written offer to purchase the property interest at fair market value, in accordance with
an appraisal conducted by an MAI appraiser.
If after exercising reasonable efforts Avila Ranch is unable to acquire the necessary easements
and/or rights of way, City, upon written request of Avila Ranch, may either: (1) require Avila
Ranch to construct functionally equivalent alternative improvements to those previously
approved, provided that such alternative improvements are equally or more effective in
addressing the impact; or (2) pursue acquisition of the real property interests by means of
eminent domain. City and Avila Ranch acknowledge that eminent domain is a discretionary
process and that City cannot commit to its use unless and until all appropriate notifications,
hearings and proceedings have been undertaken. If City chooses to pursue acquisition of the real
property interests by means of eminent domain, City shall take all reasonable steps necessary
towards that endeavor, including undertaking appraisals, noticing property owners, noticing and
holding required public hearings and meetings, and following any other procedures required for
pre judgment possession and Avila Ranch shall pay all costs reasonably incurred by City related
to, arising from, or associated with such acquisition or condemnation proceedings, including but
not limited to, attorneys' fees, expert witness fees, settlement costs, and jury awards of any kind.
In addition, Avila Ranch shall indemnify, defend and hold City harmless from and against any
and all claims, liabilities or causes of action of any kind associated with City's acquisition of
such real property interests, excluding therefrom any claims, liabilities or causes of action arising
from City's gross negligence or willful misconduct.
If and to the extent this Section 6.04.1 demands more of Avila Ranch than does Section 66462.5
of the Subdivision Map Act, this section shall apply in addition to the Developer's obligations
under that statute.
Upon acquisition of the necessary interest in land, or upon obtaining right of entry, either by
agreement or court order, Avila Ranch shall commence and complete the public improvements.
This requirement shall be included, and, if necessary, detailed, in any subdivision improvement
agreement entered between the Developer and the City pursuant to Government Code
section 66462.
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ARTICLE 7. OTHER COMMITMENTS OF CITY AND AVILA RANCH
Section 7.01. Mutual Cooperation for Other Governmental Permits. City and Avila Ranch, as
appropriate, shall each be responsible to apply to other governmental or quasi -governmental
agencies for necessary permits and approvals for development and use of the Property (e.g.,
agencies having jurisdiction over water supply; wastewater treatment, reuse and disposal; access
to the Property; wetlands -related and other biological issues). City and Avila Ranch each shall
take any and all actions as may be necessary or appropriate to process successfully such permits
and approvals, provided such permits and approvals are consistent with the Development Plan
and AASP and agreed by the City and Avila Ranch to be reasonably necessary or desirable for
the construction, maintenance or operation of the Project.
Section 7.02. Timing of Development.
Section 7.02.1. Timing Requirements.
(a) Avila Ranch shall be obligated to comply with the terms and conditions of the
Project Approvals, the Development Plan, the AASP, and this Development
Agreement when specified in each. The Parties acknowledge that the rate at which
phases of the Project develop depends upon numerous factors and market
conditions that are not entirely within Avila Ranch's or the City's control such as
market demand, interest rates, absorption rates, completion schedules, availability
of labor, and other factors. The Parties wish to avoid the result of Pardee
Construction Co. a City of Camarillo, 37 Cal. 3d 465 (1984), where the failure of
the parties therein to consider and expressly provide for the timing of
development resulted in the court's determination that a later -adopted initiative
restricting the timing of development prevailed over the parties' agreement.
Accordingly, the Parties acknowledge that Avila Ranch shall have the right to
develop the Project at such time Avila Ranch deems appropriate in the exercise of
its subjective business judgment except as provided in this section below and the
City shall not attempt to limit or restrict the timing of development of the Project
except in accordance with the terms of this Development Agreement.
(b) Avila Ranch shall complete the first two phases of development depicted in
Exhibit D to this Agreement, including the installation of those certain
improvements required under either the Development Plan or FEIR, by seven
years after the Effective Date. Otherwise, Avila Ranch may proceed with the
development of any portion of the Project, or make any financial commitment
associated with any such development when, in Avila Ranch's sole and absolute
discretion, Avila Ranch determines that it is in Avila Ranch's best financial or
other interest to do so. The foregoing sentence shall not, however, limit any
obligation of Avila Ranch under this Development Agreement with respect to any
development activities that Avila Ranch chooses to undertake hereunder.
(c) Avila Ranch shall pursue buildout of the project in conformance with the phasing
schedule below. The Parties acknowledge that, except as expressly required by
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Section 1.03.1(a)(2), the actual timing of buildout will vary from year to year due
to a variety of factors such as market demand, economic conditions, etc. Avila
Ranch may accelerate buildout of the Project ahead of the schedule so long as
there is outstanding indebtedness owed to Avila Ranch for Off -Site Improvements
under section 5.05.3 of this Agreement. The Project shall be permitted to develop
at a rate up to the cumulative total of 150% of the annual number of dwelling
units shown in the phasing schedule immediately below. The Project shall not
exceed the cumulative maximum shown for each year in the phasing schedule
below, unless authorized by the Community Development Director upon a finding
that there is outstanding debt owed to Avila Ranch and that such development
and/or rate of development will not exceed the City's Growth Management
Ordinance.
Section 7.03. Dedication of Park Lands. Avila Ranch shall dedicate land in excess of that
ordinarily required by the City to construct public parks in South San Luis Obispo, an area that
presently has a deficiency of park area. In particular, Avila Ranch shall provide 18.25 acres of
public park land, 1.76 acres in excess of City requirements, to bring the total park acreage for
South San Luis Obispo to five and a -half acres per 1,000 persons. Said parks shall be reviewed
and approved by the City's Parks and Recreation Commission before dedication. Ongoing
maintenance and operation of these park facilities shall be funded by the Project residents
pursuant to a Financing Mechanism established pursuant to Sections 5.03 or 5.04 above and shall
not be payable from the General Fund or other community -wide resources.
Section 7.04. Dedication of Open Space and Agricultural Lands. To compensate for the loss of
onsite agricultural lands and to meet the open space objectives of the General Plan, Avila Ranch
shall dedicate at least 50 acres of on-site open space and/or agricultural land and shall preserve at
least 50 acres of off-site open space and/or agricultural land. Said lands shall be dedicated within
the City's "Greenbelt" area depicted in Figure 5 of the Conservation and Open Space Element, a
copy of which figure is attached here as Exhibit F. The land to be dedicated or reserved may be
comprised of multiple properties, and may be located in the City or unincorporated County
territory. Avila Ranch may satisfy a portion of this requirement through the payment of an in lieu
fee to the City or, with the City's approval, to a land conservation organization. If land is
dedicated in the form of a Conservation Easement, the terms and conditions shall be approved by
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Phase 1
Phase 3
Phase 4
Phase 5
Phase 2
Year>>>
2020
2021
2022
2023_
2.024
2025
2026 2027
2028 2029
R-1
101
50 51
R-2 Standard
221
44
44
45
44
44
R-2 Pocket Cottage
76
16
16
15
16
13
R -3 -Duplex
38
38
R-3 Town Home
159
52
52 55
R-4 Apartments
125
65
60
Total Subject to Limit
720
60
60
60
125
117
90
52 55
50 51
Maximum
90
180
270
458
633
720
Cumulative Limit
Section 7.03. Dedication of Park Lands. Avila Ranch shall dedicate land in excess of that
ordinarily required by the City to construct public parks in South San Luis Obispo, an area that
presently has a deficiency of park area. In particular, Avila Ranch shall provide 18.25 acres of
public park land, 1.76 acres in excess of City requirements, to bring the total park acreage for
South San Luis Obispo to five and a -half acres per 1,000 persons. Said parks shall be reviewed
and approved by the City's Parks and Recreation Commission before dedication. Ongoing
maintenance and operation of these park facilities shall be funded by the Project residents
pursuant to a Financing Mechanism established pursuant to Sections 5.03 or 5.04 above and shall
not be payable from the General Fund or other community -wide resources.
Section 7.04. Dedication of Open Space and Agricultural Lands. To compensate for the loss of
onsite agricultural lands and to meet the open space objectives of the General Plan, Avila Ranch
shall dedicate at least 50 acres of on-site open space and/or agricultural land and shall preserve at
least 50 acres of off-site open space and/or agricultural land. Said lands shall be dedicated within
the City's "Greenbelt" area depicted in Figure 5 of the Conservation and Open Space Element, a
copy of which figure is attached here as Exhibit F. The land to be dedicated or reserved may be
comprised of multiple properties, and may be located in the City or unincorporated County
territory. Avila Ranch may satisfy a portion of this requirement through the payment of an in lieu
fee to the City or, with the City's approval, to a land conservation organization. If land is
dedicated in the form of a Conservation Easement, the terms and conditions shall be approved by
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the City, together with a correspondent and contemporaneous baseline conditions report. If land
is to be dedicated in fee simple title, the City shall have the opportunity to conduct due diligence
inspections, including but not limited to, Phase I Environmental Site Assessment (and subsequent
assessment as may be necessary), title review, and physical site inspections; the City may reject
any such dedications based on its due diligence inspections, which shall not be construed as a
waiver of the dedication requirements herein.
Section 7.05. Affordable Housing and Workforce Housing and Related Programs. Avila Ranch
shall provide affordable housing for the Project as described in Exhibit G. Avila Ranch shall also
provide workforce housing and shall implement the local preference "SLO Workers First"
program, owner occupancy restrictions and down payment assistance program as described in
Exhibit G.
Section 7.07. Energy.
(a) Avila Ranch shall provide for accelerated compliance with the City's Energy
Conservation Goals and its Climate Action Plan by implementing energy
conservation measures significantly above City standards and norms by providing
for solar PV energy generation for 100 percent of onsite electrical demand as
described in Section 13 of the Design Framework of the Development Plan. The
Project shall also include energy efficiency standards in excess of the current
Building Code.
(b) Developer shall provide sustainability features as described in Section 13 of the
Design Framework of the Development Plan, including: (i) housing that meets the
2019 net zero building and energy codes or, if the 2019 building and energy codes
are not yet adopted upon building permit application, the equivalent to the
satisfaction of the Community Development Director, (ii) implementing any
future city-wide policy regarding carbon emissions reduction, (iii) solar electric
panels, (iv) integrated power outlets for electric vehicles and electric bicycles, (v)
building design that maximizes grey water usage, and (vi) work -at-home options
with high-speed internet connectivity.
Section 7.08. Water.
(a) Avila Ranch shall provide for accelerated compliance with the Climate Action
Plan through by implementing special water conservation measures to reduce the
usage of potable water by Avila Ranch households to 35 percent below the
current City-wide average as described in Section 13 of the Development Plan.
(b) Avila Ranch shall comply with the California Water Code and the regulations
imposed by the City before or after the Effective Date in its capacity as the
Groundwater Sustainability Agency pursuant to the Sustainable Groundwater
Management Act ("SGMA").
(c) Avila Ranch shall install water improvements necessary to serve the Project and
future annexation areas of the AASP and County fringe areas in and around
Buckley and Broad Streets as shown in Exhibit H.
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(d) Avila Ranch shall offer to dedicate to the City a well site for future municipal use
on Lot 594, 406 or 398, with area buffers acceptable to the City and consistent
with drinking water standards. If the water well is located in a public park, the
design shall be consistent with the project's Parks Plan, and may be subject to
review and approval by the City Parks and Recreation Commission. The well site
shall have a footprint with an area measuring 20' x 40', plus a buffer as shown
more particularly in Exhibit I.
(e) Except as provided in paragraph (b) of this section above, Avila Ranch reserves
all groundwater or other water rights with respect to the Property and shall be
entitled to irrigate agricultural or open space land with ground or well water, to
the extent that such reservation and action does not violate Applicable Law and so
long as such water meets or exceeds all applicable water quality standards. Avila
Ranch shall have the option, but shall not be required, to connect to the City's
water system to irrigate agricultural/open space land with reclaimed water.
Section 7.09. Storm Drain Facilities. Before approval of a Final Subdivision Map or building
permit for a use that does not require a map, Avila Ranch shall cause to be provided storm drain
facilities adequate to accommodate the storm water runoff from the area subject to the Final
Subdivision Map or building permit.
Section 7.10. Interim Fire Station. Avila Ranch shall construct, and dedicate to the City, an
interim fire station on Lot 302 to serve all property in South San Luis Obispo. Per the
requirements of the Fire Station Master Plan, the interim fire station shall be provided at the
buildout of the 361 st dwelling unit. After the interim fire station has been constructed, the site
shall be dedicated to the City for use as a City park or affordable housing site, as deemed
appropriate by the City. Avila Ranch shall be entitled to credits against fire development impact
fees in an amount reasonably determined by the City's fiscal impact consultant to reflect (i) the
value of the land donated to the City under this section and (ii) the lesser of (a) Avila Ranch's
actual cost to improve the interim fire station and (b) the reasonable cost of that construction.
Section 7.11. Traffic and Circulation Improvements. Avila Ranch shall construct or fund the traffic
and circulation improvements as established in the FEIR and Development Plan as further
described in Exhibit C. City and Avila Ranch acknowledge that these improvements are necessary
to mitigate project impacts, improve access to and from the project, relieve existing or future traffic
deficiencies, and bring such intersections into compliance with the General Plan in advance of
impacts associated with the Project. In addition, Avila Ranch shall construct or fund the following
improvements:
a. Buckley/227 Intersection Improvements. Avila Ranch shall commit $200,000 above its fair share
allocation of costs to facilitate design of the roundabout improvements for the Buckley Road/227
intersection called for in the 227 corridor study.
b. Operational Improvements to the Davenport Creek and Buckley Road Intersection. The Project's
fair share of these improvements is 2.7 percent, based on the Project's share of additional traffic on
Buckley Road. Avila Ranch shall provide funding to the City in the amount of $230,000 for these
improvements (90 percent of projected costs), including the costs for initial design, construction
documents, and right-of-way acquisition. In the event actual costs are less than what has been
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projected, Avila Ranch may apply the remaining funds ($230,000 less 90 percent of actual costs of
construction) to the Buckley/227 intersection improvements. The City shall work with the County
of San Luis Obispo and enter into any necessary agreements to act as a conduit for the Avila Ranch
funding contribution to the Davenport Creek and Buckley Road intersection improvements.
Section 7.12. Bicycle and Multimodal Transportation Improvements. Avila Ranch shall
construct or fund the construction of bicycle and multimodal transportation improvements as
established in the FEIR and Development Plan as further described in Exhibit J. City and Avila
Ranch acknowledge that these improvements are necessary to mitigate Project impacts, improve
access to and from the Project, encourage multimodal transportation, relieve existing or future
traffic deficiencies, and bring such intersections into compliance with the General Plan in
advance of impacts associated with the Project. In addition, if prior to the termination of this
Development Agreement, City acquires all or a portion of right of way through the Chevron site
immediately adjacent to the Property as contemplated in the City's Circulation element, Avila
Ranch agrees to improve, at its sole cost and expense, subject to reimbursement, such right of
way as a Class 1 bicycle facility and pedestrian walkway. Avila Ranch shall be obligated to
construct such improvements upon written notice by City that it has acquired all or a portion of
the right of way through the Chevron property and such obligation shall survive termination of
this Development Agreement. Actual construction of the bicycle and pedestrian improvements
shall be coordinated with build -out of the Project, but in no event shall it be later than one year
after completion of phase 4 of the Project or City's written notice to Avila Ranch of its
acquisition of such right-of-way, whichever is later.
Section 7.13. Miscellaneous.
Section 7.13.1. Covenants, Conditions, and Restrictions. CC&Rs for each subdivision
within the Property shall state substantially the following: "This project is within the boundaries
of the San Luis Obispo Airport Area Specific Plan, and as such, is subject to design guidelines
and development standards which have been incorporated into the Airport Area Specific Plan and
the Avila Ranch Development Plan Design Guidelines, both on file with the Community
Development Department of the City of San Luis Obispo." Before the City approves a Final
Subdivision Map or issues a building permit for a land use that does not require a Map, the
CC&R disclosure statement referenced above shall be provided to the City Attorney for review
and approval.
Section 7.13.2. Ownership and Maintenance of Public Improvements. Unless otherwise
mutually agreed, the City shall own and maintain, or cause to be maintained, the following
public improvements:
(a) Potable water system and water tank within public properties or public easements;
(b) Sanitary sewer system within public properties or public easements;
(c) Recycled water system within public properties or public easements;
(d) Storm drain system, including continuous deflective separation (CDS) vaults or
other BMP facilities, within public properties or public easements;
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(e) Public roadways;
(f) Public parks; and,
(g) Public access, landscape, and utility easements.
Section 7.13.3. Public Utilities Easements. All land subject to public utilities easements
(PUEs); public water, sewer, or storm drain easements; and public access easements shall be
open and accessible to the City at all times.
Section 7.13.4. Design Review of Major Surface Facilities. Design Review shall be
completed for all major surface public facilities for which it is required before construction.
Section 7.13.5. Design and Construction Standards for Sewer and Water Facilities. All
sewer, water and recycled water facilities shall conform to the Design and Construction
Standards in effect for the Project when improvement plans are submitted. The submittal shall
include all pertinent engineering analysis and design calculations. The plans shall be subject to
the Director of Public Works' review and approval.
Section 7.13.6. Communications Requirements. Developer shall provide cable or suitable
conduit to each City facility, public park, or other lot designated for City or public use for high
speed internet connectivity. The cable or suitable conduit shall be shown on the joint trench
improvement plans and constructed before the final lift of asphalt is placed on the adjacent street.
ARTICLE 8. CONSIDERATION OF PERMITS AND APPROVALS
Section 8.01. In General.
Section 8.0 1.1 Review and Action Generally. Upon Avila Ranch's submission of any complete
application for an Approval together with any fees permitted under Article 5 and required by
City in accordance with Applicable Law, City shall use its best efforts to commence and
complete promptly and diligently all steps necessary to act on the application. Avila Ranch
promptly shall provide to City all information reasonably requested by City for its consideration
of any such application.
Section 8.01.2. Applicable Law. Except as otherwise specifically provided in this Article 8, all
applications for Approvals submitted by Avila Ranch shall be considered by City in accordance
with Applicable Law. To the extent an approval would amend Applicable Law as set forth in
Section 4.01.1, the aspect of Applicable Law to be amended by the approval shall not apply to
the City's consideration of the application.
Section 8.02. General Plan and AASP Amendments. The parties anticipate that Avila Ranch may
request amendments to the General Plan or the AASP to respond to changing circumstances and
conditions. City is not obligated to approve any such application and may, in the exercise of its
legislative discretion, approve, deny or propose conditions or modifications thereto, including
conditions or modifications that might otherwise be prohibited by the vested rights provided by
this Development Agreement. Avila Ranch shall be afforded a reasonable opportunity to review
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any such proposed conditions and modifications and to withdraw its application for a General
Plan amendment or AASP amendment (in which case neither Avila Ranch's proposed
amendments nor the City's proposed modifications shall become effective).
Section 8.03. CEQA Compliance.
Section 8.03.01. MMRP Application. When conducting an environmental review of any
application for an Approval, City shall review the Mitigation Monitoring and Reporting Program
adopted in connection with the Development Plan and Avila Ranch EIR (the "MMRP") to
determine if any mitigation measure contained in the MMRP as to the portion of the Property
subject to this Development Agreement should be incorporated into the design of, or added as a
condition of approval to, such Approval.
Section 8.04. Life of Approvals. Any Approval issued by City, including vesting maps as
defined in Section 8.05 below, shall continue in effect without expiration until the later of: (i) the
expiration or earlier termination of this Development Agreement or (ii) the date upon which such
Approval would otherwise expire under the laws of the State of California.
Section 8.05. Vesting Maps. The ordinances, standards and policies applicable to any vesting
tentative map, vesting parcel map, vesting subdivision map or any other type of vesting map
("Vesting Map") under California Government Code section 66474.2, and the ordinances,
policies and standards vested under any Vesting Map pursuant to California Government Code
section 66498.1(b) shall be those established as Applicable Law under this Agreement. If this
Development Agreement terminates before the expiration of any Vesting Map or the vested rights
provided thereby, such termination of this Development Agreement shall not affect Avila Ranch's
right to proceed with development under such Vesting Map in accordance with the ordinances,
policies and standards so vested under the Vesting Map. Notwithstanding the foregoing, no
Vesting Map shall extend Applicable Law beyond the stated term of this Development
Agreement (and the rules, regulations and official policies of City applicable to that portion of
the Property covered by such Vesting Map shall become those in effect as of the expiration of
such term) except as otherwise agreed by City and Avila Ranch; provided, however, that City and
Avila Ranch may agree to an extension of the term of this Development Agreement with respect
to the area covered by any such Vesting Map.
Section 8.06. Need for Flexibility. The provisions of this Development Agreement require a
close degree of cooperation between the City and Developer. Implementation of the Project may
require minor modifications of the details of the Development Plan and affect the performance of
the Parties to this Development Agreement. The anticipated refinements of the Project and the
development of the Property may require that appropriate clarifications and refinements are
made to this Development Agreement and the Entitlements with respect to the details of the
performance of the City and the Developer. The Parties desire to retain a certain degree of
flexibility with respect to those items covered in general terms under this Development
Agreement.
ARTICLE 9. AMENDMENTS
Section 9.01. Amendments of Agreement.
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Section 9.01.1. General. This Development Agreement maybe amended from time to time only
upon the mutual written consent of City and Avila Ranch and in compliance with section
17.94.190 of the City's zoning ordinance; provided, however, that in connection with the transfer
of any portion of Avila Ranch's Rights and/or Obligations under this Development Agreement to
another person, entity, or organization pursuant to the provisions of Article 13 below, Avila
Ranch, such transferee and City may agree that the signature of such transferee may be required
to amend this Development Agreement insofar as such amendment would materially alter the
Rights and/or Obligations of such transferee hereunder. In no event shall the signature or consent
of any "Non -Assuming Transferee" (as defined in Section 13.03 below) be required to amend
this Agreement.
Section 9.01.2. Future Approvals Do Not Require Amendments to Agreement. Except as the
Parties may otherwise agree, no amendment of this Development Agreement shall be required in
connection with the issuance of any Approval, or an amendment to the MMRP. Any Approval
issued after the Effective Date as to a portion of the Property shall be incorporated automatically
into this Development Agreement and vested hereby. City shall not, however, amend or issue
any Approval unless Avila Ranch requests such an amendment or issuance from City unless
otherwise permitted by this Agreement.
ARTICLE 10. ANNUAL REVIEW
Section 10.01. Annual Review
(a) The Community Development Director shall annually and concurrently conduct
(i) the MMRP Evaluation as set forth in Section 11.01; and (ii) the Development
Agreement Review as set forth in Section 11.02 (collectively, the "Annual
Review"). With respect to the MMRP Evaluation, if the Community Development
Director determines that mitigation measures adopted by City in connection with
its approval of the AASP and the Zoning are not being implemented as set forth in
the MMRP, the Community Development Director shall take any appropriate
remedial action as described in Section 11.01 below. Further, the Community
Development Director shall incorporate the results of the MMRP Evaluation into
the review of any applications for Approvals that are submitted following
completion of an Annual Review.
(b) Other Investigations and Evaluations. City may from time to time, whether or not
as a part of an Annual Review, investigate or evaluate any matter that is properly
the subject of an Annual Review.
ARTICLE 11. MITIGATION MONITORING AND REPORTING PROGRAM
EVALUATION; DEVELOPMENT AGREEMENT REVIEW
Section 11.01. Mitigation Monitoring and Reporting Program Evaluation.
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Section 11.01.1. In General. During its Annual Review, City shall evaluate (the "MMRP
Evaluation") whether the mitigation measures adopted by City in connection with its approval of
the AASP and the Zoning are being implemented as set forth in the MMRP as to the Property.
Section 11.01.2. MMRP Implementation. As set forth in the MMRP, City shall consider
in connection with any application for an Approval the extent to which mitigation measures
described in the MMRP should be incorporated into the design of the project under consideration
or set forth in conditions to the City's approval of the application. During an MMRP Evaluation,
the City shall evaluate its overall success over the prior year in implementing such mitigation
measures, as set forth above, and consider any additional steps that may be appropriate to ensure,
as Approvals are considered over the following year, successful implementation of such
mitigation measures (including, in particular, mitigation measures that are the responsibility of
City or other agencies with regulatory authority over the Project).
Section 11.01.03. Enforcement. Avila Ranch shall be responsible only for those
mitigation measures the City requires to be incorporated into the design of the Project, including
those that are attached as conditions to any Approval. Failure to comply with any such design
requirement or any condition of approval shall be enforced in any manner authorized by
Applicable Law.
Section 11.02. Development Agreement Review
Section 11.02.01. In General. The Community Development Director shall review this
Development Agreement annually as required by section 17.94.200 of the City's zoning
ordinance (the "Development Agreement Review"). The Development Agreement Review shall
be conducted concurrently with MMRP Evaluation, pursuant to Article 10 above and this Section
11.02. In connection with the Development Agreement Review, Avila Ranch shall provide
information as reasonably requested by City.
Section 11.02.02. Director's Findings of Compliance. If the Community Development
Director finds good faith compliance by Avila Ranch with this Agreement, the Community
Development Director shall issue a "Finding of Development Agreement Compliance," which
shall be in recordable form and may be recorded by Avila Ranch or any "Mortgagee" (as defined
in Section 14.01 below). Issuance of a Finding of Development Agreement Compliance and
expiration of the appeal period specified below without appeal, or confirmation by the City
Council of the issuance of the Finding of Development Agreement Compliance upon such
appeal, shall finally determine the Development Agreement Review for the applicable period.
Section 11.02.03. Finding of Development Agreement Noncompliance. If the
Community Development Director finds that Avila Ranch and/or a Transferee has not complied
in good faith with this Agreement, the Community Development Director shall proceed as
specified in section 17.94.200 of the City's zoning ordinance.
ARTICLE 12. DEFAULT, REMEDIES, TERMINATION OF DEVELOPMENT
AGREEMENT
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Section 12.01. Defaults.
Section 12.01.1. Notice and Cure.
(a) Any failure by a Party to perform any term or provision of this Development
Agreement, which failure continues uncured for 60 days following written notice
of such failure from the other Party (unless such period is extended by written
mutual consent), shall constitute a default under this Development Agreement.
Any such notice shall specify the nature of the alleged failure and, where
appropriate, how such alleged failure may be cured. If the nature of the alleged
failure is such that it cannot reasonably be cured within 60 days, then
commencement of the cure within that time, and diligent prosecution to
completion of the cure thereafter, shall be timely. If the alleged failure is cured,
then no default shall exist and the noticing Party shall take no further action and
acknowledge the cure in writing to the other Party. If the alleged failure is not
cured, then a default shall exist under this Development Agreement and the
noticing Party may exercise any of the remedies available under Sections 12.02
through 12.04 below.
(b) No failure or delay in giving notice of default shall constitute a waiver of default;
provided, however, that the provision of notice and opportunity to cure is a
prerequisite to the enforcement or correction of any default.
Section 12.01.2. Actions during Cure Period.
(a) During any cure period specified under Section 12.01.1 and before delivery of a
notice of failure or default, the Party charged shall not be considered in default of
this Development Agreement. If there is a dispute as to the existence of a default,
the Parties shall otherwise continue to perform their obligations hereunder, to the
maximum extent practicable in light of the disputed matter, pending its resolution
or formal termination of the Development Agreement.
(b) City shall continue to process in good faith applications for Approvals during any
cure period, but need not approve any such application if it relates to a
development project as to which there is an alleged default hereunder.
Section 12.02. Remedies of Non -Defaulting Party.
Section 12.02.01. In General. If any Party is in default under the terms of this
Development Agreement, the non -defaulting Party may elect, in its sole and absolute discretion,
to pursue any of the following courses of action: (i) waive such default; (ii) in City's case, pursue
administrative remedies as provided in Section 12.02.3 below, (iii) pursue judicial remedies as
provided for in Section 12.02.4 below; and/or (iii) terminate this Development Agreement as and
to the extent permitted by Section 12.04 below and consistently with section 17.94.2 10 and
17.94.220 of the City's zoning ordinance. In no event shall City modify this Development
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Agreement as a result of a default by a defaulting Party except in accordance with the provisions
of Section 9.01 above.
Section 12.02.2. Severability of Default. City acknowledges that the development of the
Project may be carried out by more than one person, entity or organization under this
Development Agreement (e.g., portions of Avila Ranch's interest in the Property and this
Development Agreement may be transferred to another person, entity or organization, a
"Transferee" under Article 13 below). Accordingly, (i) if City determines to terminate or
exercise any other remedy under this Development Agreement due to a default by Avila Ranch
or any Transferee (hereinafter "Defaulting Developer"), such termination or other remedy shall
apply only with respect to the Rights and Obligations of such Defaulting Developer, (ii) City
shall, to the extent possible, refrain from seeking any termination of this Development
Agreement or other remedy if such remedy would affect materially the ability of a non -
defaulting Developer and / or a Transferee (hereinafter "Non -Defaulting Developer") to realize
the Rights provided hereunder, and (iii) any termination of this Development Agreement as to
any Defaulting Developer shall be deemed to terminate only those Rights and Obligations arising
hereunder between City and such Defaulting Developer. The Parties acknowledge and agree that,
in accordance with Article 13 below, more than one Transferee may be responsible for certain
actions required or forbidden by this Development Agreement, and that more than one
Transferee therefore may be in default with respect thereto. The Parties further acknowledge and
agree that, notwithstanding the provisions of (ii) in this Section above, in certain instances it may
not be possible for City to exercise remedies against the Defaulting Developer of one portion of
the Project without affecting in some way a Non -Defaulting Developer of the same or of some
other portion of the Project.
Section 12.02.3. Administrative Remedies. Except as otherwise specifically stated in this
Development Agreement, City may exercise any and all administrative remedies to the extent
necessary or appropriate to secure compliance with this Development Agreement. Such
administrative remedies may include, among others, withholding building permits, certificates of
occupancy or other Approvals relating to that portion of the Project in default of this
Development Agreement.
Section 12.02.04. Judicial Remedies. Except as otherwise specifically stated in this
Development Agreement, either Party may, in addition to any other rights or remedies, institute
legal action to cure, correct, or remedy any default, enforce any covenant or agreement herein,
enjoin any threatened or attempted violation hereof, enforce by specific performance the
Obligations and Rights of the Parties hereto or obtain any other remedy consistent with this
Development Agreement; provided, however, that in no event shall any person be entitled
hereunder to monetary damages for any cause, including breach of contract by a Party to this
Development Agreement provided, however, that City may enforce payment obligations under
Applicable Law, including this Development Agreement. Nothing in this section shall be deemed
to limit either Party's rights under the Government Claims Act, California Government Code
section 810 et seq. For purposes of instituting a legal action under this Agreement, any City
Council determination under this Development Agreement shall be deemed final agency action
unless expressly stated otherwise.
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Section 12.03. Termination Due to Default.
Section 12.03.1. In General. Either Party may terminate this Development Agreement
pursuant to Section 12.03.2 below and sections 17.94.190-17.94.220 of the City's zoning
ordinance in the event of a default by the other Party, provided: (i) such default is prejudicial to
the interests of the non -defaulting Party and is neither minor nor technical and (ii) in the case of
any termination by City, City first shall have exercised any and all administrative or other
remedies short of filing suit available to secure Avila Ranch's compliance with this Development
Agreement. Notwithstanding clause (ii) of this Section 12.03.1, City shall not be required, as a
prerequisite to initiating the termination of this Development Agreement, to exercise its
administrative and other non judicial remedies for more than 180 days or, if the Parties are
making reasonable progress towards resolution of the matter claimed to be a default hereunder,
such longer period to which the Parties may agree. Termination of this Development Agreement
by Avila Ranch or a Transferee as to any portion or portions of the Property shall not affect the
Rights or Obligations of Avila Ranch or any other Transferee as to any other portion or portions
of the Property.
Section 12.03.2. Procedures for Termination.
(a) Before any proposed termination of this Development Agreement pursuant to this
Section 12.03, and following the 180 -day period specified in Section 12.03.1
above to the extent applicable, a non -defaulting Party intending to seek
termination of this Development Agreement shall deliver to the defaulting Party
(or Parties) a written "Preliminary Notice of Intent to Terminate" this
Development Agreement, and all Parties shall meet and confer in good faith effort
to agree upon an alternative to termination that will afford the non -defaulting
Party the benefit of its bargain in this Development Agreement. If those
discussions are not successful in resolving the dispute, the non -defaulting Party
desiring to terminate this Development Agreement shall deliver to the defaulting
Party a written "Final Notice of Intent to Terminate" this Development
Agreement.
(b) Within 60 days after the City delivers a Final Notice of Intent to Terminate to a
defaulting Party, the City Council shall review the matter as set forth in California
Government Code sections 65865, 65867, and 65868 and sections 17.94.210-
17.94.220 of the City's zoning ordinance. Termination shall be effective 30 days
after such City Council review, unless the default is sooner resolved to the mutual
satisfaction of the Parties.
(c) Within 60 days after Avila Ranch delivers a Final Notice of Intent to Terminate to
City, the City Council shall consider whether City should take any further
curative action. Termination shall be effective 30 days following such City
Council consideration (or 90 days following delivery by Avila Ranch of a Final
Notice of Intent to Terminate if the City Council fails to complete its
consideration by that date), unless the default is sooner resolved to the mutual
satisfaction of the Parties.
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ARTICLE 13. ASSIGNMENT, TRANSFER AND NOTICE
Section 13.01. Assignment of Interests, Rights and Obligations. Avila Ranch may transfer or
assign ("Transfer") all or any portion of its Rights and Obligations under this Development
Agreement as to any portion of the Property (the "Transferred Property") to any person acquiring
an interest in such Transferred Property, including, without limitation, purchasers or ground
lessees of lots, parcels or facilities on such portion of the Property (a "Transferee"). Any such
Transfer shall relieve the transferring party (a "Transferor") of any and all Rights and
Obligations under this Development Agreement insofar as they pertain to the Transferred
Property, as provided in this Article 13.
Section 13.02. Transfers In General.
Section 13.02.1. In General. In connection with any Transfer of all or any portion of the
Project or the Property, other than a transfer or assignment to a "Non -Assuming Transferee" as
described in Section 13.03 below, or a "Mortgagee" as defined in Section 14.01 below, the
Transferor and the Transferee may enter into a written agreement regarding their respective
Rights and Obligations in and under this Development Agreement (a "Transfer Agreement").
Any such Transfer Agreement may contain provisions: (i) releasing the Transferor from any
Rights and Obligations under this Development Agreement that relate to the Transferred
Property, provided the Transferee expressly assumes all such Rights and Obligations,
(ii) transferring to the Transferee rights to improve the portion of the Property transferred and
any other Rights and Obligations of the Transferor arising under this Agreement, and
(iii) addressing any other matter deemed necessary or appropriate in connection with the
Transfer.
Section 13.02.02. City Review of Release Provisions.
(a) A Transferor shall have the right, but not the obligation, to seek City's consent to
those provisions of any Transfer Agreement purporting to release such Transferor
from any Rights and Obligations arising under this Development Agreement (the
"Release Provisions"). If a Transferor fails to seek City's consent or City does not
consent to any such Release Provisions, then such Transferor may nevertheless
transfer to the Transferee any and all Rights and Obligations of such Transferor
arising under this Development Agreement (as described in Section 13.02.1,
clauses (i) and (ii) above) but, with respect to City, shall not be released from
those Rights and Obligations described in the Release Provisions to which City
has not consented. If City consents to any Release Provisions, then: (i) the
Transferor shall be free from any and all Rights and Obligations accruing on or
after the date of the Transfer with respect to those Rights and Obligations
described in such Release Provisions and (ii) no default hereunder by Transferee
with respect to any Rights and Obligations from which the Transferor has been
released shall be attributed to the Transferor. City may consent, or conditionally
consent, to all, none, or some of the Release Provisions.
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(b) City shall review and consider promptly, reasonably and in good faith any request
by a Transferor for City's consent to any Release Provisions. City's consent to
any such Release Provisions may be withheld only if. (i) reliable evidence
supports a conclusion that the Transferee will be unable to perform the Rights and
Obligations proposed to be assumed by the Transferee pursuant to the Transfer
Agreement, (ii) the Rights and Obligations are not reasonably allocable among
particular portions of the Project and Property, such as the Transferred Property,
(iii) the Transferor or Transferee fails to provide acceptable security, as and if
reasonably requested by City, to ensure the performance of the Rights and
Obligations proposed to be assumed by the Transferee pursuant to the Transfer
Agreement, or (iv) the Transferor or Transferee fail to provide information
reasonably requested by the City to assist it in making the determinations
described in this paragraph. In no event shall City unreasonably withhold consent
to any Release Provisions. City shall respond within 30 days to any request by a
Transferor for consent to any Release Provisions.
(c) Subject to the provisions of subsection (b) above, because and to the extent
certain obligations arising under this Development Agreement may not
reasonably be allocable among portions of the Project, City may refuse to release
the Transferor of one portion of the Project from such Rights and Obligations
under this Development Agreement even though the Rights and Obligations are
being or have been assumed by the Transferee of some other portion of the
Project.
Section 13.03. Non -Assuming Transferees. Except as otherwise required by a Transferor, the
Obligations of a Transferor shall not apply to any purchaser of any property that has been
established as a single legal parcel for nonresidential use that does not require any further on-site
or off-site infrastructure. The Transferee in such a transaction and the successors and assigns of
such a Transferee ("Non -Assuming Transferees") shall be deemed to have no Obligations under
this Agreement, but shall continue to benefit from the Rights provided by this Development
Agreement for the duration of its term. Nothing in this section shall exempt any Non Assuming
Transferee from the payment of applicable fees, taxes and assessments or from having to comply
with applicable conditions of an Approval or with Applicable Law.
ARTICLE 14. MORTGAGEE PROTECTION
Section 14.01. In General. The provisions of this Development Agreement shall not limit Avila
Ranch's right to encumber the Property or any portion thereof, or any improvement thereon by
any mortgage, deed of trust or other device securing financing with respect to such portion. City
acknowledges that lenders providing such financing and other "Mortgagees" (defined below)
may require certain interpretations and modifications of this Development Agreement and agrees
upon request, from time to time, to meet with Avila Ranch and representatives of such lenders to
negotiate in good faith any such request for an interpretation or modification. City shall not
unreasonably withhold its consent to any such requested interpretation or modification provided
such interpretation or modification is consistent with the intent and purposes of this Agreement.
Any person holding a mortgage, deed of trust or other security instrument on all or any portion of
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the Property made in good faith and for value (each, a "Mortgagee"), shall be entitled to the
rights and privileges of this Article 14.
Section 14.02. Impairment of Mortgage or Deed of Trust. Except as otherwise specifically stated
in the terms of any security instrument held by a Mortgagee, no default under this Development
Agreement shall defeat, render invalid, diminish, or impair the lien of any mortgage or deed of
trust on the Property made, or other interest in the Properly acquired, by any Mortgagee in good
faith and for value.
Section 14.03. Notice of Default to Mortgagee. If a Mortgagee has submitted a written request
to City as specified herein for notice, City shall use its best efforts to provide to such Mortgagee
written notification of any failure or default by Avila Ranch in the performance of Avila Ranch's
obligations under this Agreement, which notification shall be provided to such Mortgagee when
such notification is delivered to Avila Ranch.
Section 14.04. Right of Mortgagee to Cure. Any Mortgagee shall have the right, but not the
obligation, to cure any failure or default by Avila Ranch during the cure period allowed Avila
Ranch under this Agreement, plus an additional 90 days if, to cure such failure or default, the
Mortgagee must obtain possession of the property as by seeking appointment of a receiver or
other legal process. Any Mortgagee that undertakes to cure any such failure or default shall
provide written notice to City of that fact; provided that no initiation of any such efforts by a
Mortgagee shall obligate such Mortgagee to complete or succeed in any such curative efforts.
Section 14.05. Liability for Past Defaults or Obligations. Subject to the foregoing, any
Mortgagee, including the successful bidder at a foreclosure sale, who comes into possession of
the Project or the Property or any part thereof, shall take such property subject to the Rights and
Obligations of this Development Agreement and in no event shall any such property be released
from any Obligations. Nothing in this Article 14 shall prevent City from exercising any remedy it
may have for a default under this Development Agreement; provided, however, that in no event
shall such Mortgagee be liable personally for any defaults or monetary obligations of Avila
Ranch arising before such Mortgagee acquires or possesses such property.
ARTICLE 15. GENERAL PROVISIONS
Section 15.01. Incorporation of Recitals and Exhibits. The Recitals set forth above and the
Exhibits A—J attached hereto are incorporated herein as though set forth in full.
Section 15.02. Project is a Private Undertaking. The development Avila Ranch proposes to
undertake is a private development, and Avila Ranch shall exercise full dominion and control
over the Project subject only to Avila Ranch's limitations and Obligations contained in this
Agreement.
Section 15.03. Cooperation in the Event of Legal Challenge.
Section 15.03.1. In General. If any person not party to this Development Agreement
institutes any administrative, legal or equitable action or other proceeding challenging the
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validity of any provision of this Agreement, any Approval or the sufficiency of any review of
this Development Agreement or any Approval under CEQA (each a "Third Party Challenge"),
the Parties promptly shall meet and confer as to the most appropriate response to such Third
Party Challenge; provided, however, that any such response shall be consistent with Sections
15.03.2 and 15.03.3 below.
Section 15.03.2. Tender to and Conduct of Defense by Avila Ranch. City shall tender the
complete defense of any Third Party Challenge to Avila Ranch, and upon acceptance of such
tender by Avila Ranch: (i) Avila Ranch shall indemnify City against any and all fees and costs
arising out of the defense of such Third Party Challenge; and (ii) Avila Ranch shall control the
defense and/or settlement of such Third Party Challenge and may take any and all actions it
deems necessary and appropriate in its sole discretion in connection therewith; provided,
however, that Avila Ranch shall seek and secure City's consent to any settlement of such Third
Party Challenge, which consent shall not unreasonably be withheld or delayed.
Section 15.03.03. Defense by City. If Avila Ranch should fail to accept City's tender of
defense as set forth in Section 15.03.2 above, City shall defend such Third Party Challenge and
control the defense and/or settlement of such Third Party Challenge as City decides (in its sole
discretion), and City may take any and all actions it deems necessary and appropriate (in its sole
discretion) in connection therewith; provided, however, that City shall seek and secure Avila
Ranch's consent to any settlement of such Third Party Challenge, which consent shall not
unreasonably be withheld or delayed. Avila Ranch shall indemnify City against any and all fees
and costs arising out of the City's defense of such Third Party Challenge. Notwithstanding the
foregoing, if Avila Ranch determines for any reason that it no longer intends to develop the
Project, then it may deliver notice of such determination to City and shall not be liable for any
defense costs incurred by City more than 90 days following the delivery of such notice.
Section 15.04. Defense and Indemnity. Avila Ranch shall defend and indemnify City from and
against any and all damages, claims, costs and liabilities arising out of the personal injury or
death of any person, or damage to the property of any person, to the extent such damages,
claims, costs or liabilities result from the construction of the Project by Avila Ranch or by Avila
Ranch's contractors, subcontractors, agents or employees, except as caused by the negligence or
willful misconduct of City, its officers, employees, contractors, consultants or agents. Nothing in
this Section 15.04 shall be construed to mean that Avila Ranch shall defend or indemnify City
from or against any damages, claims, costs or liabilities arising from, or alleged to arise from,
activities associated with the maintenance or repair by City or any other public agency of
improvements that have been offered for dedication and accepted by City or such other public
agency. City and Avila Ranch may from time to time enter into subdivision improvement
agreements, as authorized by the Subdivision Map Act, which agreements may include defense
and indemnity provisions different from those contained in this Section 15.04. If any conflict
appears between such provisions in any such subdivision improvement agreement and the
provisions set forth above, the provisions of such subdivision improvement agreement shall
prevail.
Section 15.05. Governing Law; Attorneys' Fees. This Development Agreement shall be
construed and enforced in accordance with the laws of the State of California. Venue for any
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dispute arising under this Agreement lies in the county of San Luis Obispo and Avila Ranch
hereby consents to personal jurisdiction there for that purpose. The Parties will cooperate to
facilitate venue for any Third Party Challenge set forth in Section 15.03 above in San Luis
Obispo County. Should any legal action be brought by either Party because of any default under
this Development Agreement, to enforce any provision of this Development Agreement, or to
obtain a declaration of rights hereunder, the prevailing Party shall be entitled to such reasonable
and actual attorneys' fees, and costs as may be fixed by the Court. The standard of review for
determining whether a default has occurred under this Development Agreement shall be the
standard generally applicable to contractual obligations in California. The terms and provisions
of this Section 15.05 shall survive any termination of this Agreement.
Section 15.06. Force Majeure. Performance by any Party of its Obligations hereunder shall be
excused during any period of "Permitted Delay" as hereinafter defined. For purposes hereof,
Permitted Delay shall include delay beyond the reasonable control of the Party claiming the
delay (and despite the good faith efforts of such Party) including, but not limited to: (i) acts of
God, (ii) civil commotion and acts of terrorism, (iii) riots, (iv) strikes, picketing or other labor
disputes, (v) shortages of materials or supplies, (vi) damage to work in progress by reason of fire,
floods, earthquake or other casualties, (vii) failure, delay or inability of the other Party to act,
(viii) as to Avila Ranch only, the failure, delay or inability of City to provide adequate levels of
public services, facilities or infrastructure to the Property, (ix) as to City only, with respect to
completion of the Annual Review or processing applications for Approvals, the failure, delay or
inability of Avila Ranch to provide adequate information or substantiation as reasonably required
to complete the Annual Review or process applications for Approvals; (x) delay caused by
restrictions imposed or mandated by governmental entities other than the City; (xi) enactment of
conflicting state or federal laws or regulations, (xii) judicial decisions or similar legal incapacity
to perform, and (xiii) litigation brought by a third party attacking the validity of this
Development Agreement. Any Party claiming a Permitted Delay shall notify the other Party (or
Parties) in writing of such delay within 30 days after the commencement of the delay, which
notice ("Permitted Delay Notice") shall include the estimated length of the Permitted Delay. A
Permitted Delay shall be deemed to occur for the time set forth in the Permitted Delay Notice
unless a Party receiving the Permitted Delay Notice objects in writing within 10 days after
receiving the Permitted Delay Notice. Upon such an objection, the Parties shall meet and confer
within 30 days after the date of the objection in a good faith effort to resolve their disagreement
as to the existence and length of the Permitted Delay. If no mutually acceptable solution can be
reached, either Party may take action as may be permitted under Article 12 above.
Section 15.07. Waiver
Section 15.07.1. Legal Rights. Avila Ranch acknowledges and agrees that the terms and
provisions of this Development Agreement specifically permit City in some instances to impose
requirements upon the Project that City would not otherwise be able to impose due to a lack of
nexus, rough proportionality or reasonable relationship between the Project and such requirement
or other reasons. To the extent any such requirement is imposed by City upon the Project
consistently with the terms and provisions of this Agreement, Avila Ranch waives any right to
challenge judicially the imposition of such requirement by City. Except as otherwise provided in
this Section 15.07.1, City shall comply with Applicable Law.
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Section 15.07.2. Other Rights. While Section 15.07.1 prohibits Avila Ranch from
challenging judicially certain City requirements imposed consistently with this Agreement,
nothing in this Development Agreement shall be deemed to abrogate or limit, nor be deemed to
be a waiver by Avila Ranch of, any right of Avila Ranch (whether arising under the United States
Constitution, the California Constitution or otherwise) to request City to refrain from imposing
upon Avila Ranch, the Project or the Property any requirement that this Development Agreement
permits City so to impose or otherwise petition City with respect to any matter related to the
Project or the Property.
Section 15.08. Notices. Any notice or communication required hereunder between the Parties
must be in writing, and may be given either personally, by facsimile (with original forwarded
promptly by regular U.S. Mail) or by Federal Express or other similar courier promising
overnight delivery. If personally delivered, a notice or communication shall be deemed to be
given and received when delivered to the Party to whom it is addressed. If given by facsimile
transmission, a notice or communication shall be deemed to be given and received upon receipt
of the entire document by the receiving Party's facsimile machine. Notices transmitted by
facsimile after 5:00 p.m. on a business day or on a Saturday, Sunday or holiday shall be deemed
to have been given and received on the next business day. If given by Federal Express or similar
courier, a notice or communication shall be deemed to be given and received when delivered as
shown on a receipt issued by the courier. Such notices or communications shall be given to the
Parties at their addresses set forth below:
If to City to: City Manager
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Telecopy/Facsimile: (805) 781-7109
With a courtesy copy to: City Attorney
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 95330
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If to Avila Ranch to: Avila Ranch, LLC
C/O Andy Mangano, Managing Member
3596 South Broad Street, Suite 140
With a courtesy copy to: Meyers Nave
Attn: Jon Goetz
707 Wilshire Blvd., 24th Floor
Los Angeles, CA 90017
Telecopy/Facsimile: (213) 626-2906
Any Party may at any time, change its address or facsimile number for notice by giving 10 days'
written notice to the other.
Section 15.09. No Joint Venture or Partnership. Nothing in this Development Agreement or in
any document executed in connection with it shall be construed as creating a joint venture,
partnership or any agency relationship between City and Avila Ranch. City shall have no
responsibility for public improvements unless and until they are accepted by City in the manner
required by law.
Section 15.10. Severability. If any provision of this Development Agreement is held invalid,
void or unenforceable but the remainder of this Development Agreement can be enforced
without failure of material consideration to any Party, then this Development Agreement shall
not be affected and shall remain in full force and effect, unless amended by mutual consent of the
Parties.
Section 15.11. Estoppel Certificate. Any Party and any Mortgagee may, at any time, and from
time to time, deliver written notice to the other Party or Parties requesting such Party or Parties
to certify in writing that, to the knowledge of the certifying Party: (i) this Development
Agreement is in full force and effect and a binding obligation of the Parties, (ii) this
Development Agreement has not been amended or modified either orally or in writing, and if so
amended, identifying the amendments, and (iii) as of the date of the last Annual Review, the
requesting Party (or any Party specified by a Mortgagee) is not in default in the performance of
its obligations under this Agreement, or if in default, to describe therein the nature and amount of
any such defaults. A Party receiving a request hereunder shall execute and return such certificate
or give a written, detailed response explaining why it will not do so within 30 days of receipt of a
request. Each Party acknowledges that such a certificate may be relied upon by third parties
acting in good faith. A certificate provided by City establishing the status of this Development
Agreement shall be in recordable form and may be recorded at the expense of the recording
Party.
Section 15.12. Further Assurances. Each Party shall execute and deliver to the other Party or
Parties all such other further instruments and documents and take all such further actions as may
be reasonably necessary to carry out this Development Agreement and the Approvals and to
provide and secure to the other Party or Parties the full and complete enjoyment of its Rights
hereunder.
Section 15.13. Construction.
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(a) All Parties have been represented by counsel in the preparation of this
Development Agreement and no presumption or rule that ambiguity shall be
construed against a drafting party shall apply to its interpretation or enforcement.
Captions on sections and subsections are provided for convenience only and shall
not be deemed to limit, amend or affect the meaning of the provision to which
they pertain. If any conflict appears between this Development Agreement and the
rules, regulations or official policies of City, the provisions of this Development
Agreement shall prevail and be deemed to have amended any such conflicting
rules, regulation or official policy as of the Effective Date.
(b) The Parties intend this Development Agreement to be consistent with the
requirements of Chapter 17.94 of the City's zoning ordinance and it shall be
construed consistently with that intent. Should any conflict arise between this
Agreement and that Chapter 17.94 as it exists on the Effective Date, that Chapter
17.94 shall control.
Section 15.14. Other Miscellaneous Terms. In construing this Agreement, the singular includes
the plural; the masculine gender includes the feminine and the neuter; "shall" is mandatory;
"may" is permissive.
Section 15.15. Counterpart Execution. This Development Agreement may be executed in any
number of counterparts and shall be deemed duly executed when each of the Parties has executed
such a counterpart.
Section 15.16. Time. Time is of the essence of each and every provision of this Agreement.
Section 15.17. Good Faith/Fair Dealing. The Parties agree that a covenant of good faith and fair
dealing shall apply to all actions of the Parties. As used herein, this covenant shall mean that the
Parties shall act reasonably, and no Party shall do anything which shall have the effect of
destroying or injuring the rights of any other Party to receive the benefit of its bargain in this
Agreement. Nothing in this Section 15.17 shall detract from the principle of Section 12.02.4 that
neither Party shall be entitled to damages for breach of this Agreement.
Section 15.18. Exhibits.
List of Exhibits:
A —Avila Ranch SP Site Plan
B — Legal Description
C — Financing Plan
D — Phasing Plan
E-1— Backbone Water Infrastructure
E-2 — Backbone Sewer Infrastructure
E-3 — Backbone Recycled Water Infrastructure
E-4 —Backbone Drainage Infrastructure
F — Figure 5 of Conservation & Open Space Element
G — Affordable/Workforce Housing Plan
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H — Water Improvements
I — Water Well Site Plan
J — Bicycle Improvements
IN WITNESS WHEREOF, the Parties have executed this Development Agreement as
of the Execution Date above.
CITY:
CITY OF SAN LUIS OBISPO, a municipal
corporation
Heidi Harmon, Mayor
APPROVED AS TO FORM:
J. Christine Dietrick, City Attorney
AVILA RANCH:
[Avila Ranch signature block]
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