HomeMy WebLinkAbout2021-09-28 - AGENDA REPORTS - TCU FUNDING (2)8
Agenda Item:7
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL:
DATE: September 28, 2021
APPROVAL OF TRANSITIONAL CARE UNIT FUNDING FOR A
SUBJECT:
SKILLED NURSING FACILITY
DEPARTMENT: Community Development
PRESENTER: Tracy Sullivan
RECOMMENDED ACTION
City Council:
1. Approve the remittance of transitional care unit funding, obtained by the City of Santa
Clarita though Development Agreement 06-001 (Henry Mayo Newhall Hospital Master Plan
Project), to Stone Creek Corporation for the construction of a 51,000 square-foot Residential
Healthcare Facility (skilled nursing facility), contingent upon confirmation of a Certificate of
Occupancy and a State of California license to operate.
2. Appropriate $275,000 from the Developer Fee Fund 306 to Development Agreement
Expenditure Account 3063112-516101.
3. Authorize the City Manager or his designee to execute all documents, subject to City
Attorney approval.
BACKGROUND
On December 9, 2008, the City Council approved Development Agreement (DA) 06-001 under
Master Case 04-325, for the development of the Henry Mayo Newhall Hospital (Henry Mayo
Hospital) Master Plan Project. Pursuant to Section 5.9 of DA 06-001, Henry Mayo Hospital and
G&L Realty (Developers) were conditioned to contribute $250,000 to the City of Santa Clarita
(City)
Transitional Care Unit (TCU) Task Force for the feasibility, siting, and construction of a TCU
facility or other senior health care needs. The TCU Task Force, although no longer active, was
designed to ensure that a suitable location and operator for a TCU facility be provided within the
Santa Clarita Valley.
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The contribution provided to the City and dedicated to a future TCU facility, per the terms of DA
06-001, was deposited into an interest-bearing account within the Developer Fee Fund. The
current balance, inclusive of interest, is approximately $275,000.
On August 17, 2021, the Planning Commission approved Master Case 21-041, providing for the
construction and operation of a 51,000 square-foot, 120-bed Residential Healthcare Facility
located at 26650 Valley Center Drive. While the project is categorized as a Residential
Healthcare Facility under Section 17.42.010.12 of the Unified Development Code, the level of
care provided would be consistent with a skilled nursing facility, which is a higher level of care
than what is offered at a typical assisted living facility or group home. At a skilled nursing
facility, some patients receive acute care, some reside in the facility temporarily as they heal
after surgery, and others receive medical treatment for chronic health issues or end-of-life care.
Residents do not live independently and nursing care is available 24 hours a day.
Stone Creek Corporation (Stone Creek), the Applicant, provided a letter requesting that the City
Council consider allocating the TCU funds for their project, given its compatibility with the type
of care envisioned by DA 06-001. With the TCU Task Force no longer in active status to provide
a recommendation, Henry Mayo Hospital also provided a letter of support for the dedication of
funds to Stone Creek. Both letters are attached for your reference.
The provision of funds would be subject to the terms and conditions specified in the attached
agreement. This includes a requirement that the facility be fully constructed, with both a
certificate of occupancy and a license to operate issued, prior to the remittance of payment. In the
event it ceases operating as a skilled nursing facility, Stone Creek would be subject to repayment
provisions for the length of five years.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
There is no impact on the General Fund. The funding needed to support the recommended
actions was collected by the City as a condition within Development Agreement 06-001 and is
available in the Developer Fee Fund 306.
ATTACHMENTS
Agreement
Request Letter
Henry Mayo Newhall Memorial Hospital Letter of Support
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AGREEMENT BETWEEN
THE CITY OF SANTA CLARITA
AND
STONE CREEK CORPORATION
THIS AGREEMENT between the CITY OF SANTA CLARITA, a municipal corporation,
hereinafter referred to as City, and STONE CREEK INVESTMENT CORPORATION, a
California Corporation, hereinafter referred to as Stone Creek is dated and entered into as of
W I T N E S S E T H
WHEREAS, on December 9, 2008, the City of Santa Clarita City Council (City Council)
approved Development Agreement 06-001 for Master Case 04-325, for the development of the 15-
year Henry Mayo Newhall Hospital Master Plan Project;
WHEREAS, on April 27, 2021, the City Council approved an extension to Development
Agreement 06-001 for an additional 10 years;
WHEREAS, Section 5.9 of Development Agreement 06-001 required Henry Mayo
Newhall Hospital, a California non-profit public benefit corporation, and G&L Valencia, LLC, a
California limited liability company, to contribute Two Hundred and Fifty Thousand Dollars
($250,000) to City, to be used at the discretion of the City Council, following a recommendation
facility or other senior health care needs;
WHEREAS, the sum of $250,000 was paid to City, per the terms of Development
Agreement 06-001, where it has been held in an interest-bearing account;
WHEREAS, on August 17, 2021, the City Planning Commission approved Master Case
21-041 for the construction and operation of a 51,000 square-foot Residential Healthcare Facility
(skilled nursing facility) located at 26650 Valley Center Drive in the City;
WHEREAS, Stone Creek, the Applicant for Master Case 21-041, formally requested the
above-referenced funds for the purposes envisioned by Development Agreement 06-001;
WHEREAS,
Henry Mayo Newhall Hospital was formerly an active participant in the Task Force and provided
a letter in support of Stone Creek;
WHEREAS, City has deemed it appropriate to allocate the $250,000, plus accrued interest,
to Stone Creek for the development of a skilled nursing facility under Master Case 21-041.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL
PROMISES, COVENANTS, AND CONDITIONS HEREIN CONTAINED, THE PARTIES
HERETO AGREE AS FOLLOWS: Buubdinfou;!Bhsffnfou!!)BQQSPWBM!PG!USBOTJUJPOBM!DBSF!GVOEJOH!GPS!TLJMMFE!OVSTJOH!GBDJMJUZ!QSPKFDU*
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1. City agrees to award to Stone Creek, and Stone Creek agrees to accept from City,
the $250,000 deposit made as part of Development Agreement 06-001, plus accrued interest. Stone
Creek furthermore agrees to use the funds solely and exclusively on the skilled nursing facility
approved by the Planning Commission under Master Case 21-041 and for no other purpose.
2. The sum of $250,000, plus any accrued interest, shall be paid upon receipt of a
Certificate of Occupancy, issued by the California Office of Statewide Health Planning and
Development, and a license to operate, issued by the California Department of Public Health, for
the project approved under Master Case 21-041.
3. For five years following the date of payment to Stone Creek, City retains the right
to receive reimbursement from Stone Creek in the event the facility ceases operating as a skilled
nursing facility. City shall also be entitled to recover any costs and attorney fees incurred in pursuit
of such reimbursement. Reimbursement shall be prorated according to the period in which the
skilled nursing facility remains operational:
A. Full reimbursement of the total sum if operations cease Year 0 to Year 1
B. 80% reimbursement of the total sum if operations cease Year 1 to Year 2
C. 60% reimbursement of the total sum if operations cease Year 2 to Year 3
D. 40% reimbursement of the total sum if operations cease Year 3 to Year 4
E. 20% reimbursement of the total sum if operations cease Year 4 to Year 5
4. City and Stone Creek shall not be deemed to be joint venturers or in any way
affiliated with regards to S operations. Stone Creek agrees to defend (with counsel
of Cityindemnify and hold City, its officers, agents, and employees harmless from
any and all claims, demands, suits, or damages arising out of or related to this Agreement or the
operations by Stone Creek of the skilled nursing facility contemplated herein.
5. Without limiting CityStone Creek shall
secure or have its contractor completing the work, or any operator of the facility, secure prior to
commencing any activities under this Agreement, and maintain during the term of this Agreement,
insurance coverage (if applicable) and consistent with standards in such agencies as follows:
A. alifornia statutes or
qualified self-insurance as allowed under California law
B. Comprehensive General Liability Insurance, or Commercial General
Liability Insurance, including coverage for Premises and Operations,
Contractual Liability, Personal Injury Liability, Products/Completed
Operations Liability, Broad-Form Property Damage (if applicable) and
than one million dollars ($1,000,000) per occurrence, combined single limit
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C. Comprehensive Automobile Liability coverage (if applicable) including
owned, non-owned and hired autos, in an amount of not less than one
million dollars ($1,000,000) per occurrence, combined single limit
6. This Agreement supersedes any and all agreements, either oral or written, between
the parties hereto with respect to payments by City to Stone Creek, and contains all of the
covenants and agreements between the parties with respect to the payment of funds in any manner
whatsoever. Each party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, either orally or otherwise, have been made by any party, which are not
embodied herein, and that no other agreement, statement, or promise not contained in this
Agreement shall be valid or binding.
7. The term of this Agreement shall extend from the Effective Date until five (5) years
after the date of payment contemplated by paragraph 2 herein, or, if the payment has not been
made within 36 months of the Effective Date, in which case City will have no further obligations
under this Agreement. Notwithstanding the foregoing, the obligations of paragraph 4 shall survive
the expiration of this Agreement.
8. The rights and obligations of Stone Creek under this Agreement may be transferred
or assigned in whole or in part to any person or entity acquiring or operating the skilled nursing
unreasonably withheld, on a written assignment and assumption agreement. Express assumption
release Stone Creek from the obligations so assigned and the City shall look solely to the transferee
or assignee for performance of the assigned obligations under this Agreement.
9. This Agreement may be terminated at any time by either party upon giving thirty
(30) days written notice, provided that the payment contemplated in paragraph 2 has not yet been
made. Once the payment is made, City shall be entitled to recover payment as contemplated by
paragraph 3 herein in the event of any termination.
10. ELECTRONIC TRANSMISSION OF CONTRACT AND SIGNATURE. The
parties agree that this Agreement may be transmitted and signed by electronic mail by either/any
or both/all parties, and that such signatures shall have the same force and effect as original
signatures, in accordance with California Government Code section 16.5 and Civil Code section
1633.7.
(SIGNATURES ON NEXT PAGE)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on this date of October , 2021.
FOR STONE CREEK INVESTMENT CORPORATION:
CLAY CORWIN,
By:
President
Date:
FOR CITY:
KENNETH W. STRIPLIN, CITY MANAGER
By:
City Manager
Date:
APPROVED AS TO FORM:
JOSEPH M. MONTES, CITY ATTORNEY
By:
City Attorney
Date:
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hbraly@pooleshaffery.com
September 1, 2021
Via email: bmiranda@santa-clarita.com
Mayor Bill Miranda
City of Santa Clarita
23920 W. Valencia Blvd. Ste. 300
Santa Clarita, CA
Re: Request for Transitional Care Funding from City of Santa Clarita
Dear Mayor Miranda,
I am writing on behalf the Stone Creek Skilled Nursing project which was approved by the Planning
Commission on August 17, 2021.
a higher level of care than what is offered at a typical assisted living facility. This is a skilled nursing
facility which provides enhanced care for its patients and is distinguishable from the number of
assisted living centers the City has recently seen built and approved in the City of Santa Clarita.
Skilled nursing patients receive acute care, with some patients residing in the facility for a short term
as they heal after surgery while others receive medical treatment for chronic health issues or end-of-
life care. These residents do not live independently, and nursing care is available 24 hours a day.
When the Henry Mayo Newhall Hospital Specific Plan and Expansion was approved over 10 years
ago, there was a requirement that the Hospital deposit $250,000 with the City for a future transition
care facility due to the Hospital closing those beds in the hospital. Our Skilled Nursing Facility
provides the type of care envisioned by this condition and the only other facility which provides this
type of care in the Santa Clarita Valley is more than three decades old.
Please schedule this request for the earliest possible City Council meeting since we understand that
the Council must consider and approve the release of these funds to our project.
Thank you for your consideration.
Very truly yours,
Poole Shaffery & Koegle, LLP
Hunt C. Braly
Attorney at Law
cc: Members of the City Council
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Clayton Corwin, Stone Creek ĭĭƚƩǞźƓθƭƷƚƓĻĭƩĻĻƉĭƚƒƦğƓǤ͵ĭƚƒ
Tom Cole, Director of Community Development tcole@santa-clarita.com
Jason Crawford, Director of Planning jcrawford@santa-clarita.com
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;�'�•, Henry Mayo
:16J64 Newhall Hospital
September 10, 2021
Mayor Bill Miranda
City of Santa Clarita
23920 Valencia Boulevard, # 300
Valencia, CA 91355
Dear Mayor Miranda:
On behalf of Henry Mayo Newhall Hospital, I am writing to communicate our support of Stone
Creek's application to build and operate a 120-bed Skilled Nursing Facility (SNF) in the City of
Santa Clarita.
As you know, several years ago we dedicated $250,000 toward a community fund with the
intention that the money be applied to offset costs of opening a transitional care or skilled
nursing facility within Santa Clarita. We are supportive of the funds being held by the City for
transitional care being applied to the Stone Creek project, to be released once it is constructed
and obtains SNF licensing status.
We believe the project before you will meet many of our community needs for skilled nursing
beds. The builder is well -respected and the identified operator has a positive track record. We
welcome them into the Santa Clarita Valley.
Thank you for the consideration of this project. Henry Mayo Newhall Hospital is pleased to be
part of the successful delivery of additional skilled nursing beds in this community.
Si ,
y e
Rogerger Seaver
President & CEO
Henry Mayo Newhall Hospital
RES-.nr
(661) 200-2000 1 www.henrymayo.com 123845 McKean Parkway I Valencia, CA 91355-2083
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