2004 AGN APR 20 I10 - Laserfiche WebLink

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Mr. Rodde has obtained a tentative commitment from the Community Reinvestment Fund (CRF) for a $3,000,000 loan. No action is necessary by the City Council this evening, but when final approval is received, the related documents must be approved by the City and BLD. It must be emphasized that just because the commitment is $500,000 greater than the BLD obligation, the City does not have to borrow that sum. It is available if we need it. Land Acquisition from EVLC Per City Council direction in closed session, staff was to enter into a purchase and sale agreement and subsequent escrow with EVLC for the acquisition of 11.2 acres along Driver's World Parkway and Cooley Drive. The City Council gave specific directions and parameters to staff pursuant to City Attorney recommendations. Over the past few months there has been much negotiation and discussion between EVLC legal counsel and the City Attorney. The City's transaction with EVLC has been complicated by the fact that escrow closed and a sale was finalized between EVLC and Canyon Coach RV on 5.6 acres of property adjoining the sports park site. Certain easement conditions and indemnity language acceptable to our City Attorney were changed as a result of the Canyon Coach transaction. The materiality of these changes is perhaps in the "eye of the beholder", but nevertheless staff and the City Attorney have worked with EVLC in an attempt to rectify this matter. We understand the changes were required by Canyon Coach's lender. The primary outstanding matter as a result of the Canyon Coach transaction is a change in indemnity language. While it may be debatable as to how material/significant this impact is, EVLC has contacted Canyon Coach to see if their lender can make language changes acceptable to our City Attorney. Alternatively, EVLC could indemnify the City and/or purchase an insurance policy to protect the City against liability that may occur as a result of this matter. To resolve this issue staff recommends: 1. Urge EVLC and Canyon Coach to diligently pursue an indemnity language change acceptable to the City Attorney; or 2. Require EVLC to indemnify the City relative to this matter and purchase an insurance policy or other security of a type and amount acceptable to the City Attorney to protect the City. Another issue came to light during the City Attorney's due diligence in pursuing the land acquisition transaction. The covenants, conditions, and restrictions (CC&R's) that attach to all 56 acres of the EVLC property (including the occupied Ashley Furniture site) contain a provision that no property owner, within the 56 acre site, may apply for a zone change that is inconsistent with the City's General Plan or the permitted uses within the Cooley Ranch Specific Plan. While on the surface this does not seem problematic (in fact, one would think it is preferable since the CC&R's reinforce the City's planning criteria), in our City Attorney's opinion such provisions in the CC&R's attach to the land forever and could pose future problems for any related property owner (including the City) in the 56 acre site if they desired a zone change. Because the Cooley Ranch Specific Plan permitted uses are rather broad, and staff see no reason why a zone change would be necessary for several years, if even at all, this is not a material issue in staffs opinion. Furthermore, EVLC insists this provision in the CC&R's was promulgated by Ashley Furniture, and it would be time consuming and difficult to work with their corporate office back East to negotiate a change. Also, this condition existed prior to the City's pursuit of the 11.2 acre acquisition. Therefore, staff recommends that the CC&R modification not be a condition in the purchase and sale agreement nor escrow closure. However, staff does recommend that they be directed to continue to work with EVLC and/or Ashley Furniture to rectify this matter at a later date. There also remain a few language changes that are needed relative to easements, access, sign and display issues that staff believes can be worked out with EVLC. FINANCIAL IMPACT Approval of staffs ensuing recommendations will result in the additional commitment of $1,022,422 from General Fund unappropriated fund balance to CIP reserves. There are available funds in the General Fund reserves to meet this increase with no adverse impacts on policy requirements or other approved CIP projects. ENVIRONMENTAL IMPACT There is a previous environmental impact report (EIR) adopted / approved by the Planning Commission.