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HomeMy WebLinkAbout14-253 Res. Approving Agreement for Southshore Project ( CFD 2014-1)CITY OF f t LAKT � LSINOU '+ DREAM EXTREME. REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: GRANT YATES CITY MANAGER DATE: AUGUST 26, 2014 SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVING A DEPOSIT AND REIMBURSEMENT AGREEMENT RELATING TO THE FORMATION OF A COMMUNITY FACILITIES DISTRICT FOR THE SOUTHSHORE PROJECT. Recommendation Adopt Resolution No. 2014 -_ approving the Deposit and Reimbursement Agreement. Background The Southshore Project development is generally located south of highway 74, directly south of the Ramsgate community, east of Interstate 15, and north of the Spyglass community. The development is approximately 227 acres and is subject to the Southshore Project (Tract No. 31593 — Approved October 2008). The project proposes the construction of 490 single family homes. The current developer, SAM - Elsinore, LLC ( "Developer "), acquired the project and has begun taking steps to complete the development. Discussion The Developer has requested that the City Council consider the formation of Community Facilities District, tentatively designated as CFD No 2014 -1, to facilitate financing and development of the project. The attached Deposit and Reimbursement Agreement will fund the necessary costs of formation and is before the City Council for consideration. Resolution Approving Deposit and Reimbursement Agreements (Southshore CFD) August 26, 2014 Page 2 The Developer requests the City Council to consider the attached Deposit and Reimbursement Agreement between the City and the Developer that acknowledges the deposit by the Developer of $61,000 in order to defer the City's costs related to these formation proceedings for the proposed CFD No. 2014 -1. Such costs include legal and consultants fees, the costs of publication of notices and mailings, along with reasonable charges for City staff time. The attached Resolution authorizes approval of the deposit agreement and further authorizes the Mayor, City Manager, and Director of Administrative Services to execute the agreement. The deposit agreement does not authorize the issuance of bonds. Such authorization will necessarily be subject to the City Council's full review at a future meeting date. Fiscal Impact None. The Developer has already deposited $61,000 and the Deposit and Reimbursement Agreement allows the City to require an additional deposit if the available deposited funds fall below $10,000 and additional funds are needed to cover the City's expenses. Prepared by: David Bilby Finance Manager Jason Simpson Director of Administrative Services Barbara Leibold City Attorney Approved by: Grant Yates City Manager Attachments: 1. Deposit and Reimbursement Agreement 2. Resolution No. 2014- RESOLUTION NO. 2014- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVING A DEPOSIT AND REIMBURSEMENT AGREEMENT RELATING TO THE FORMATION OF A COMMUNITY FACILITIES DISTRICT FOR THE SOUTHSHORE PROJECT. WHEREAS, the City of Lake Elsinore (the "City ") has determined to initiate proceedings to create a community facilities district tentatively designated "City of Lake Elsinore Community Facilities District No. 2014 -1 (Southshore) (the "Community Facilities District ") under the Mello -Roos Community Facilities Act of 1982, as amended (the "Act "), and WHEREAS, the developer with respect to the Community Facilities District intends to make a security deposit with the City to cover certain District formation costs which are eligible for refund upon the sale of bonds by the Community Facilities District and the payment of such District formation costs from the proceeds of such bonds; and WHEREAS, such developer will provide for the advancement of funds to be used to pay costs incurred in connection with the preparation of the agreement being considered by the Council. NOW, THEREFORE, the City Council of the City of Lake Elsinore, California, does hereby resolve as follows: Section 1. The City Council hereby approves the Deposit and Reimbursement Agreement (the "Agreement ") in substantially the form presented to the Council at this meeting. The Mayor, the City Manager, and the Director of Administrative Services are hereby authorized to execute the Agreement with such revisions, amendments, and 79279644.1 City Council Resolution No 2014 -_ Page 2 completions as shall be approved by the officer executing the same, such approval to be conclusively evidenced by the execution and delivery thereof. Section 2. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, this day of 2014. 1,.9 ATTEST: VIRGINIA BLOOM CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY CITY OF LAKE ELSINORE 79279644.1 City Council Resolution No 2014 -_ Page 3 STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF LAKE ELSINORE SS I, VIRGINIA J. BLOOM, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2014- was adopted by the City Council of the City of Lake Elsinore at a regular meeting held on the 26th day of August, 2014 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Virginia J. Bloom, CMC City Clerk 79279644.1 DEPOSIT AND REIMBURSEMENT AGREEMENT SAM - Elsinore, LLC Community Facilities District Formation — Southshore Project This DEPOSIT AND REIMBURSEMENT AGREEMENT (this "Deposit Agreement "), dated as of _, 2014, is by and between the City of Lake Elsinore, a municipal corporation (the "City "), and SAM - Elsinore, LLC, a California limited liability company (the "Owner "). RECITALS A. The City has determined to initiate proceedings to create a community facilities district tentatively designated "City of Lake Elsinore Community Facilities District No. 201_ -1 (Southshore) (the "Community Facilities District ") under the Mello -Roos Community Facilities Act of 1982 (the "Act "). B. The Owner is the owner of the real property within the proposed Community Facilities District. C. In accordance with City's policy regarding use of the Act, the Owner is required to compensate the City for all costs incurred in the formation of the Community Facilities District and issuance of bonds for the Community Facilities District. Accordingly, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district (including the issuance of bonds thereby). D. Section 53314.9 of the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest under all of the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53521 of the Act and in the resolution of formation to establish the community facilities district pursuant to Section 53325.1 of the Act (including the issuance of bonds thereby), (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the funds. E. The City and the Owner desire to enter into this Deposit Agreement in accordance with Section 53314.9 of the Act in order to provide for the advancement of funds by the Owner to be used to pay costs incurred in connection with the formation of the Community Facilities District and issuance of special tax bonds for the Community Facilities District (the "Bonds "), and to provide for the reimbursement to the Owner of such funds advanced, without interest, from the proceeds of any Bonds. CFD201_ 1(Southshore) Deposit & Reimbur Agmt 081914.doc 1 AGREEMENT The Deposits and Application Thereof. a. The Owner has previously deposited with the City the amount of sixty -one thousand dollars ($61,000.00) on March 4, 2014 (the "Initial Deposit "). The City, by its execution hereof, acknowledges receipt of, and accepts, the Initial Deposit. b. The Initial Deposit, together with any subsequent deposit required to be made by the Owner pursuant to the terms hereof (collectively, the "Deposits "), are to be used to pay for any costs incurred for any authorized purpose in connection with the formation of the Community Facilities District and the issuance of the Bonds (other than costs, fees and expenses to be paid out of the proceeds of the Bonds), including, without limitation, (i) the fees and expenses of any consultants to the City employed in connection with the formation of the Community Facilities District and the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (ii) the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the formation of the Community Facilities District and issuance of the Bonds, (iii) the costs of publication of notices, preparation and mailing of ballots and other costs related to any hearing, election or other action. or proceeding undertaken in connection with the formation of the Community Facilities District and issuance of the Bonds, (iv) reasonable charges for City staff time incurred in connection with the formation of the Community Facilities District and the issuance of the Bonds by the Community Facilities District, including a reasonable allocation of City overhead expense related thereto, and (v) any and all other actual costs and expenses incurred by the City in connection with the formation of the Community Facilities District and the issuance of the Bonds (collectively, the "Initial Costs "). The City may draw upon the Deposits from time to time to pay the Initial Costs. C. If, at any time, the unexpended and unencumbered balance of the Deposits is less than $10,000, the City may request, in writing, that the Owner make an additional deposit in an amount estimated to be sufficient, together with any such unexpended and unencumbered balance, to pay for all Initial Costs. The Owner shall make such additional deposit with the City within two weeks of the receipt by the Owner of the City's written request therefor. If the Owner fails to make any such additional deposit within such two week period, the City may cease all work related to the change proceedings with respect to the Community Facilities District and issuance of the Bonds. d. The Deposits may be commingled with other funds of the City for purposes of investment and safekeeping, but the City shall at all times maintain records as to the expenditure of the Deposits. e. The City shall provide the Owner with a written summary of expenditures made from the Deposits, and the unexpended balance thereof, within ten business days of receipt of the City of a written request therefor submitted by the Owner. The cost of providing any such summary shall be charged to the Deposits. 2. Return of Deposits; Reimbursement. a. As provided in Section 53314.9 of the Act, the approval by the qualified electors of the Community Facilities District of the proposed special tax to be levied therein is a 2 condition to the repayment to the Owner of the funds advanced by the Owner pursuant hereto. Therefore, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied thereon, the City shall have no obligation to repay the Owner any portion of the Deposits expended or encumbered to pay Initial Costs. In accordance with Section 53314.9 of the Act, if the qualified electors of the Community Facilities District do not approve the proposed special tax to be levied therein, the City shall return to the Owner any portion of the Deposits which have not been expended or encumbered to pay Initial Costs by the time of the election on said proposed special tax. b. If proceedings for the issuance of the Bonds are terminated, the City shall, within ten business days after official action by the City or the Community Facilities District to terminate said proceedings, return the then unexpended and unencumbered portion of the Deposits to the Owner, without interest. C. If the Bonds are issued by the Community Facilities District, the City shall reimburse the Owner, without interest, for the portion of the Deposits that has been expended or encumbered, said reimbursement to be made within ten business days after the issuance of such Bonds, solely from the proceeds of such Bonds and only to the extent otherwise permitted under the Act. The City shall, within ten business days after the issuance of such Bonds, return the then unexpended and unencumbered portion of the Deposits to the Owner, without interest. 3. Abandonment of Proceedings. The Owner acknowledges and agrees that the issuance of the Bonds shall be in the sole discretion of the City. No provision of this Deposit Agreement shall be construed as an agreement, promise or warranty of the City to issue the Bonds. 4. Deposit Agreement Not Debt or Liability of City. This Deposit Agreement does not constitute a debt or liability of the City, but shall constitute a debt and liability of the Community Facilities District. The City shall not be obligated to advance any of its own funds to pay Initial Costs or any other costs incurred in connection with the Community Facilities District and issuance of the Bonds. No member of the City Council of the City and no officer, employee or agent of the City shall to any extent be personally liable hereunder. 5. Notices. Any notices, requests, demands, documents, approvals or disapprovals given or sent under this Deposit Agreement from one Party to another (collectively, "Notices ") may be personally delivered, or deposit with the United States Postal Service for mailing, postage prepaid, to the address of the other Party as stated in this Section, and shall be deemed to have been given or sent at the time of personal delivery or, if mailed, seventy -two hours following the date of deposit in the course of transmission with the United States Postal Service. Notices shall be sent as follows: If to City: City of Lake Elsinore Attn: City Manager 130 South Main Street Lake Elsinore, CA 92530 With a copy to: City of Lake Elsinore Attn: City Clerk 130 South Main Street Lake Elsinore, CA 92530 3 If to Owner: SAM - Elsinore, LLC 1200 Quail Street, Suite 220 Newport Beach, California 92660 Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (c) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. 6. California Law. This Deposit Agreement shall be governed and construed in accordance with the laws of the State of California. The Parties shall be entitled to seek any remedy available at law and in equity. All legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in Riverside County, or in the United States District Court for the District of California in which Riverside County is located. 7. Successors and Assigns. This Deposit Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. 8. Counterparts. This Deposit Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. 9. Other Agreements. The obligations of the Owner hereunder shall be that of a party hereto. Nothing herein shall be construed as affecting the City's or Owner's rights, or duties to perform their respective obligations, under other agreements, use regulations or subdivision requirements relating to the development. This Deposit Agreement shall not confer any additional rights, or waive any rights given, by either party hereto under any development or other agreement to which they are a party. 10. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Deposit Agreement or of any of its terms. Reference to section numbers are to sections in this Deposit Agreement, unless expressly stated otherwise. 11. Interpretation. As used in this Deposit Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Deposit Agreement shall be interpreted as though prepared jointly by both Parties. 12. No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Deposit Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Deposit Agreement. rd 13. Modifications. Any alteration, Agreement, in order to become effective, shall on behalf of each Party. change or modification of or to this Deposit be made in writing and in each instance signed 14. Severability. If any term, provision, condition or covenant of this Deposit Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Deposit Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 15. Legal Advice. Each Party represents and warrants to the other the following: they have carefully read this Deposit Agreement, and in signing this Deposit Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Deposit Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Deposit Agreement; and, they have freely signed this Deposit Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or their respective agents, employees, or attorneys, except as specifically set forth in this Deposit Agreement, and without duress or coercion, whether economic or otherwise. 16. Cooperation. Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Deposit Agreement including, but not limited to, releases or additional agreements. 17. Conflicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Deposit Agreement, nor shall any such member, official or employee participate in any decision relating to the Deposit Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. [Signatures on next page] 5 IN WITNESS WHEREOF, the Parties have executed this Deposit Agreement as of the date set forth on the first page hereof. "CITY" CITY OF LAKE ELSINORE, a municipal corporation Natasha Johnson, Mayor ATTEST: City Clerk APPROVED AS TO FORM: City Attorney N "OWNER" SAM- ELSINORE, LLC, a California limited liability company ?FT7ai Title: