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HomeMy WebLinkAbout2024-10-08 - AGENDA REPORTS - AMEND CONDITIONS FOR MC 24 176O Agenda Item: 1 CITY OF SANTA CLARITA AGENDA REPORT PUBLIC HEARINGS CITY MANAGER APPROVAL: DATE: October 8, 2024 SUBJECT: PROPOSED AMENDMENTS TO THE TESORO DEL VALLE PROJECT - MASTER CASE 24-176 DEPARTMENT: Community Development PRESENTER: David Peterson RECOMMENDED ACTION City Council: 1. Receive staff presentation; 2. Open the public hearing to receive testimony from the public; 3. Adopt a resolution amending the conditions of approval for the Tesoro Del Valle project; 4. Approve a modification to the Pre -Annexation Agreement between BLC Tesoro, LLC, and the City of Santa Clarita affecting the timing for the completion of the construction of the Copper Hill Bridge widening as it relates to the issuance of Certificates of Occupancy for the development; 5. Adopt a resolution approving amendments to the Joint Community Facilities Agreement and Acquisition Funding Agreement; and 6. Find the modifications to conditions of approval, the pre -annexation agreement, and community facilities district are exempt from review under the California Environmental Quality Act (CEQA) pursuant to the General Rule Exemption Section 15061(b)(3) of CEQA. BACKGROUND On November 12, 2019, the City Council authorized the submittal of an application requesting the Local Area Formation Commission initiate proceedings for the annexation of the Tesoro Del Valle project (Project). Originally approved by the County of Los Angeles, the completed Project included approvals for two separate phases. The first phase included approximately 1,786 Page 1 Packet Pg. 9 O acres, an elementary school, and the 2.25-acre Tesoro Adobe Historic Park, as well as private recreational amenities, such as a community swimming pool, clubhouse, a private park, and trails. The second phase, commonly known as the Tesoro Highlands, includes 820 units that are currently under construction. To date, just over 200 units have been completed. The second phase also includes additional recreation areas, amenities, parks, and trails. On May 24, 2022, the City Council approved a Pre -Annexation Agreement (PAA) between BLC Tesoro, LLC (Developer), and the City of Santa Clarita (City). The PAA accepted the development of the Tesoro Highlands project, as approved by Los Angeles County, upon annexation to the City in exchange for support of the City's annexation efforts. In addition, there were a number of agreements between the Developer and the City regarding the transfer of open space to the City, the Copper Hill Bridge (Bridge) widening construction, the construction of trails, as well as authorization to allow for the creation and administration of a Mello -Roos Community Facilities District (CFD) and levy special taxes for the Tesoro Highlands development via the California Municipal Finance Authority (CMFA) Bond Opportunities for Land Development (BOLD) Program, as well as approving a Joint Community Facilities Agreement (JCFA) with CMFA and an Acquisition Funding Agreement with CMFA and the Developer (Acquisition Agreement). The CFD was formed within the City's jurisdiction by CMFA. The CMFA administers the CFD and oversees the issuance of CFD bonds. Staff worked with CMFA to ensure the BOLD Program met City goals. The CFD includes a separate service special tax over the project to be levied in perpetuity to fund the management and maintenance of the open space, generating approximately $50,000 per year in revenue each year with a Consumer Price Index escalator. The annexation of Tesoro Del Valle became effective on November 14, 2022. An amendment to the PAA was approved by the City Council on January 24, 2023, to provide more certainty to prospective home builders regarding the number of units that could be completed prior to the completion of the Bridge widening, as well as to address uncertainties of the economy and the global supply chain. The PAA originally identified the Bridge expansion being completed prior to the issuance of the first certificate of occupancy in Tesoro Highlands. The adopted amendment to the PAA identified that the Bridge had to be completed prior to the issuance of the 342nd certificate of occupancy. REQUEST AND ANALYSIS The Developer is requesting the following amendments to the Project: Amendment to the Original Conditions of Approval: The Developer is proposing an amendment to Condition of Approval 50 (COA50). Currently, COA50 requires the construction of 254 age -restricted housing units within Tesoro Highlands to be constructed prior to the recordation of a future phase map that would allow the construction of an additional 108 market -rate units within the Project. The proposed amendment would allow the recordation of the map once building permits for at least 198 of the 254 age -restricted units have been issued. It would also require the additional 108 market -rate units to be converted to age -restricted units. The amendment Page 2 Packet Pg. 10 O would allow the Developer to begin construction sooner than currently allowed by COA50, and the request is based on the Developer's intent to be ready to construct the additional 108 units prior to completing all 254 age -restricted units. Proposed amendment language to COA50 is attached. 2. Second Amendment to the PAA: Section H.2. of the first amendment to the PAA details the agreement between the Developer and the City regarding the commencement and completion of the Bridge widening project. The current PAA allows up to a maximum of 342 Certificates of Occupancy (COOs) of the approved 820 units to be issued prior to completion of the Bridge widening. The Developer is requesting to obtain up to 585 COOs upon completion of the bridge deck concrete pour. The City will not issue any of the remaining COOs (units 586 through 820) until the completion of the Bridge widening, which is defined as all improvements per approved plans, excluding Bridge lights and streetlights on Copper Hill Drive. A proposed redline-strikethrough version of the PAA is attached. Amendment to the Community Facilities District: Improvements, including fees for improvements, to be financed by the CFD pursuant to the JCFA and Acquisition Agreement included the extension of Avenida Rancho Tesoro (estimated cost $4.5 million), storm drain improvements in Avenida Rancho Tesoro (estimated cost $3.5 million), storm drain improvements, In -tracts (estimated cost $13.9 million), debris basins (estimated cost $2.3 million), and a portion of the Valencia Bridge and Major Thoroughfare Construction Fee District fees imposed upon the Project (estimated $11.2 million - amount calculated at time less credit for the Bridge). At the time of CFD formation, the Bridge improvements were estimated to cost approximately $4.8 million and were not included as part of improvements to be financed by the CFD. However, now based on bids received by the Developer, those costs are expected to be in excess of $12.7 million. The Developer has requested an amendment to the JCFA and the Acquisition Agreement to add the Copper Hill Bridge as an eligible improvement to be financed through the CFD bond issuance with a corresponding reduction of anticipated Bridge & Thoroughfare (B&T) fees that will be financed by the CFD (now estimated at $4.5 million). Additionally, the Developer has requested CFD eligible improvements including the addition of trail improvements (estimated $2.5 million), and the removal of all storm drain improvements (estimated $17.4 million). All requirements of the Developer to be responsible for the improvements and B&T fees remain the same. The amendments would move the Bridge improvements to a CFD- financed improvement and lower the amount of B&T fees to be financed by the CFD. It would also recognize the increased B&T fee credit to be given for the increased cost of the Bridge and reconcile B&T fees already paid to date, as well as outline how and when surplus B&T credits will be issued. Such amendments do not increase the special tax amounts breviously authorized for the CFD nor the authorized amount of special tax bonds. Special taxes are currently being levied on the CFD. Page 3 Packet Pg. 11 O ENVIRONMENTAL An Environmental Impact Report was certified for this Project by the County of Los Angeles. The proposed revisions are exempt from CEQA under the General Rule Exemption as the proposed changes are minor in nature and do not have any potential to cause significant impacts. ALTERNATIVE ACTION Other actions as determined by the City Council. FISCAL IMPACT There is no fiscal impact to the General Fund associated with the recommeded action. All requirements of the Developer to be responsible for improvements and Bridge & Thoroughfare fees remain the same. The amendments do not increase the special tax amounts previously authorized for the CFD nor the authorized amount of special tax bonds. ATTACHMENTS Resolution - Conditons of Approval Resolution - Community Facilities District Condition of Approval 50 Pre -Annexation Agreement Page 4 Packet Pg. 12 1.a RESOLUTION NO. 24- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, APPROVING MASTER CASE 24-176 INCLUDING MINOR USE PERMIT 24-022 TO ALLOW FOR A MODIFICATION TO CONDITION OF APPROVAL 50 FOR THE TESORO DEL VALLE PROJECT, IN THE CITY OF SANTA CLARITA THE CITY COUNCIL OF THE CITY OF SANTA CLARITA DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. FINDINGS OF FACT. The City Council does hereby make the following findings of fact: A. On November 12, 2019, the City Council authorized the submittal of an application requesting the Local Area Formation Commission (LAFCO) initiate proceedings for the annexation of the Tesoro Del Valle project (Project); B. The Project was originally approved by the Los Angeles County Board of Supervisors in 1998 under Project No. 92074-(5), Vesting Tentative Tract Map (VTTM) 51644, and amended in 2018 as VTTM 51644-1. The project included a certified environmental impact report; C. The Project included approximately 1,786 acres, an elementary school, and the 2.25-acre Tesoro Adobe Historic Park, as well as private recreational amenities, such as a community swimming pool, club house, a private park, and trails. The second phase, commonly known as Tesoro Highlands, included 820 units that are currently under construction; D. On August 14, 2024, the Developer filed for Master Case 24-176 with the City, consisting of Minor Use Permit 24-022, to amend the Project. Proposed Amendments include (1) amending a condition of approval regarding the timing of recording a future phase map; (2) amending the pre -annexation agreement regarding the timing associated with the completion of the Copper Hill Bridge widening; and (3) amending the Joint Community Facilities Agreement and Acquisition Funding Agreement relating to Community Facilities District No. 2022-25; E. No additional analysis under the California Environmental Quality Act (CEQA) is required as the proposed modification will not result in any additional environmental impacts not already examined under the Final Environmental Impact Report adopted by the County Board of Supervisors for the Project; F. On October 8, 2024, a duly noticed public hearing was held before the City of Santa Clarita City Council at or after 6:00 p.m. at City Hall, Council Chambers, 23920 Valencia Boulevard, Santa Clarita, California; and G. At this public hearing, the City Council considered the staff report, staff presentation, Page 1 of 4 Packet Pg. 13 1.a applicant's presentation, and public testimony. SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT FINDINGS. Based upon the foregoing facts and findings, the City Council hereby finds as follows: A. No further analysis under the California Environmental Quality Act is required as the proposed modification to the conditions of approval do not create any changes that would warrant any further study; and B. The location of the documents and other material which constitutes the record of proceedings upon which the decision of the City Council is based is the Master Case 24-176 project file within the Planning Division and is in the custody of the Director of Community Development. SECTION 3. GENERAL FINDINGS FOR MASTER CASE 23-182. Based upon the foregoing facts and findings for Master Case 23-182, the City Council hereby determines the following: 1. The proposal is consistent with the General Plan: The Project is a revision to the timing of construction for a residential component of a previously -approved project. The proposed revision is consistent with all applicable portions of the General Plan, and all other elements of the originally approved Project remain in effect. 2. The Proposal is contemplated within the applicable underlying land use and zoning designation: The Project includes land uses contemplated by the underlying land use and zoning designations and are substantially similar to those approved under the original Project. The proposal will not endanger, jeopardize, or otherwise constitute a hazard to the public convenience, health, interest, safety, or general welfare, or be materially detrimental or injurious to the improvements, persons, property, or uses in the vicinity and zone in which the property is located; and The proposed amendments are a revision to a project previously approved by the Los Angeles County Board of Supervisors which was later annexed into the City of Santa Clarita. No uses included in the previous proposal were found to constitute a hazard, and the use types included in the proposed project are substantially similar to those included in the previous approval. The proposed revision to the conditions of approval would not create any additional impact to the public health, safety, or general welfare. 4. The proposal is physically suitable for the site. The factors related to the proposal's physical suitability for the site shall include, but are not limited to, the following: Page 2 of 4 Packet Pg. 14 1.a A. The design, location, shape, size, and operating characteristics are suitable for the proposed use; B. The highways or streets that provide access to the site are ofsufcient width and are improved, as necessary, to carry the kind and quantity of trafc such a proposal would generate; C. Public protection services (e.g., Fire protection, Sheriprotection, etc) are readily available; and D. The provision of utilities (e.g., potable water, schools, solid waste collection and disposal, storm drainage, wastewater collection, treatment, and disposal, etc.) is adequate to serve the site. The proposed amendments are a revision to a project previously approved by the Los Angeles County Board of Supervisors which was later annexed into the City of Santa Clarita. The Project will continue to be within the allowed floor area ratio of the zone and is substantially consistent with the size and scope of the previously approved Project. No changes to highways or streets are included in the proposal other than those included in the widening of Copper Hill Bridge which will serve to more efficiently accommodate traffic associated with the Project. No additional protective services are required, and the demand for the provision of utilities has not changed. SECTION 4. The City Council hereby approves Master Case 24-176 including Minor Use Permit 24-022 to allow for a modification to Condition of Approval 50 of the approval of the Tesoro Del Valle project: SECTION 5. Modifications. 1. Condition of Approval 50 is amended in its entirety to read as follows: A minimum of 257 senior citizen housing set -aside dwelling units and 108 senior citizen bonus density housing set -aside dwelling units shall be built as part of this project. The recording of the unit map for 108 bonus density units shall be allowed once at least 198 building permits for the 257 senior citizen units have been issued. 2. No other changes to the conditions of approval are intended or authorized. SECTION 6. This Resolution will remain effective until superseded by a subsequent resolution. SECTION 7. A copy of this Resolution will be mailed to the Applicant and to any other person requesting a copy. Page 3 of 4 Packet Pg. 15 1.a SECTION 8. This Resolution is the City Council's final decision and will become effective immediately upon adoption. SECTION 9. The City Clerk shall certify to the adoption of this Resolution and certify this record to be a full, complete, and correct copy of the action taken. PASSED, APPROVED, AND ADOPTED this day of , 2024. MAYOR ATTEST: CITY CLERK DATE: STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss CITY OF SANTA CLARITA ) I, Mary Cusick, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution No. 24- was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of , 2024, by the following vote AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK Page 4 of 4 Packet Pg. 16 1.b RESOLUTION NO. 24 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, APPROVING AMENDMENTS TO A JOINT COMMUNITY FACILITIES AGREEMENT AND ACQUISITION FUNDING AGREEMENT IN CONNECTION WITH CALIFORNIA MUNICIPAL FINANCE AUTHORITY BOLD PROGRAM COMMUNITY FACILITIES DISTRICT NO. 2022-25 (SANTA CLARITATESORO HIGHLANDS) WHEREAS, California Municipal Finance Authority (CMFA) has established its California Municipal Finance Authority BOLD Program Community Facilities District No. 2022-25 (Santa Clarita—Tesoro Highlands), (CFD) at the request of BLC Tesoro LLC (Developer) encompassing the Developer's Tesoro Highlands project (Project), prior to the annexation of the Project into the City of Santa Clarita (City); WHEREAS, pursuant to CMFA's Resolution No. 22-369, (Resolution of Formation), the CFD is authorized to finance, among other improvements serving the Project and development impact fees to be paid with respect to the Project, the Copper Hill Bridge improvements; WHEREAS, in connection with the CFD and the Project, the City approved and entered into (a) Joint Community Facilities Agreement dated November 18, 2022, (JCFA) by and among CMFA, the City, and the Developer, and (b) an Acquisition Funding Agreement dated November 18, 2022, (Acquisition Agreement) by and between the City and the Developer; and WHEREAS, the Developer has requested amendments to the JCFA and Acquisition Agreement to reflect the increased cost of Copper Hill Bridge improvements, to remove storm drain improvements, and to add the Copper Hill Bridge improvements and trail improvements as improvements eligible to be financed through the CFD bond issuance, and to clarify use of Valencia Bridge and Major Thoroughfare Construction Fee District fee credits for the Project resulting from the construction of the Copper Hill Bridge. NOW, THEREFORE, the City Council of the City of Santa Clarita, California, does hereby resolve as follows: SECTION 1. The above recitals are all true and correct. SECTION 2. The City Council hereby approves the Form of Amendments to Joint Community Facilities Agreement and Acquisition Funding Agreement attached hereto (Exhibit A) by and among the City, CMFA, and BLC Tesoro LLC, and authorizes the City Manager or designee to execute the amended agreements on behalf of the City with such changes, additions or deletions as may be approved by the City Manager and City Attorney. The City hereby finds that the Amendment will be beneficial to the residents of the City. SECTION 3. This Resolution shall take effect immediately upon its adoption. The City Clerk shall certify to the adoption of this resolution. The City Clerk is hereby authorized and directed to transmit a certified copy of this resolution to the Secretary of the CMFA. Packet Pg. 17 1.b PASSED, APPROVED, AND ADOPTED this day of 2024. MAYOR ATTEST: CITY CLERK DATE: STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Mary Cusick, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution 24- was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of 2024, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK Packet Pg. 18 1.b EXHIBIT A AMENDMENT TO EXHIBIT A OF JOINT COMMUNITY FACILITIES AGREEMENT AND AMENDMENT TO ACQUISITION FUNDING AGREEMENT This Amendment to Exhibit A of Joint Community Facilities Agreement and Amendment to Acquisition Funding Agreement ("Amendment") is executed as of , 2024 (the "Effective Date") by and among the California Municipal Finance Authority ("CMFA"), the City of Santa Clarita ("City") and BLC Tesoro LLC ("Developer"). RECITALS A. CMFA has established its California Municipal Finance Authority BOLD Program Community Facilities District No. 2022-25 (Santa Clarita—Tesoro Highlands) (the "CFD") at the request of the Developer encompassing the Developer's Tesoro Highlands project (the "Project"). The CFD was established prior to the annexation of the Project into the City. B. Pursuant to CMFA's Resolution No. 22-369 (the "Resolution of Formation"), the CFD is authorized to finance, among other improvements serving the Project and development impact fees to be paid with respect to the Project, the Copper Hill Bridge improvements. C. The CMFA and the City entered into a Joint Community Facilities Agreement relating to the Tesoro Highlands Project in the City dated as of November 18, 2022 (the "JCFA") and CMFA, the City and the Developer entered into an Acquisition Funding Agreement dated as of November 18, 2022 (the "Acquisition Agreement"). Both the JCFA and Acquisition Agreement relate to the CFD and, although the CFD is authorized to finance the Copper Hill Bridge improvements and trail improvements pursuant to the Resolution of Formation, those improvements are not described as some of the eligible improvements in Exhibit A to the JCFA and Exhibit B to the Acquisition Agreement. D. At the time of CFD formation, the Copper Hill Bridge improvements were estimated to cost approximately $4.8 million. However, now based on bids received by the Developer, those costs are expected to be in excess of $12.7 million. Therefore, it is necessary to amend Exhibit A to the JCFA and amend the Acquisition Agreement to (i) add the Copper Hill Bridge improvements and trail improvements dedicated as improvements eligible to be financed through the CFD bond issuance secured by the lien of special taxes on the land within the CFD as well as remove all storm drain improvements; and (ii) clarify use of Valencia Bridge and Major Thoroughfare Construction Fee District fee credits for the Project resulting from the construction of the Copper Hill Bridge. The financing of the Copper Hill Bridge improvements through the CFD shall not preclude the Project's receipt of such fee credits pursuant to the Project conditions of approval in accordance with the Acquisition Agreement. Such amendments shall not require or permit an increase in the special tax amounts previously authorized for the CFD nor the authorized amount of special tax bonds. 3 Packet Pg. 19 1.b AGREEMENT NOW, THEREFORE, in consideration of the faithful performance of the terms set forth in this Amendment, the parties hereto agree as follows: 1. Incorporation of Recitals. The foregoing Recitals are true and correct and are hereby incorporated into and form a material part of this Amendment. 2. Amendment of Exhibit A to JCFA. CMFA and the City agree that Paragraph 2 of Exhibit A to the JCFA is hereby revised to read as follows: "2. The City Improvements shall include: (i) the extension of Avenida Rancho Tesoro ("A" Street") improvements, (n) various debris basins, (iii) the Copper Hill Bridge improvements, and (iv) trail improvements, all as further described in the Acquisition Agreement." 3. Addition of sentence to Section 5.11 of the Acquisition Agreement. CMFA, the City and the Developer agree that the Acquisition Agreement is hereby amended by adding an additional sentence to the end of Section 5.11, to reflect the reduction of the estimated Financed Fees due to the addition of the Copper Hill Bridge as a City Improvement and to reflect a portion of the cash deposits already made for the Project and possible reimbursement to Developer from bond proceeds, as follows: "As of June 1, 2024, the parties acknowledge that the Developer (or merchant builders) has paid cash deposits in the amount of $6,478,248, of which $4,086,348 shall be considered Financed Fees made prior to Available Amounts being available, which Financed Fees are eligible to be reimbursed by the CFD to the Developer when Available Amounts become available. There may be additional Financed Fees which are eligible to be reimbursed by the CFD to the Developer, provided the total amount of Financed Fees shall not exceed the total B&T Fee obligation for the Project (the "Total B&T Fee Obligation") minus the Acquisition Price paid by the CFD for the Copper Hill Bridge improvements." 4. Addition of Section 5.12 of the Acquisition Agreement. CMFA, the City and the Developer agree that the Acquisition Agreement is hereby amended by adding an additional Section 5.12, to acknowledge cash deposits and construction credits to date, and the estimated remaining B&T Fee obligation as calculated in Exhibit B to the Acquisition Agreement, as follows: "Section 5.12. Remaining B&T Obligation and Credits. The Project is within the Valencia Bridge and Major Thoroughfare Construction Fee District (the "B&T District"). As of June 1, 2024, the parties agree that a portion of the Total B&T Fee Obligation has been partially satisfied in the amount of $7,636,991 consisting of (a) $4,086,348 of Financed Fees referenced in Section 5.11 from previous cash payment of B&T Fees to the City, (b) $2,391,900 of previous cash payment of B&T fees to the County, and (c) $1,158,743 of issued B&T credits for the initial 4 Packet Pg. 20 1.b construction of the Copper Hill Bridge project. The Total B&T Fee Obligation minus such amounts is defined as the "Remaining B&T Fees." As of June 13, 2024, $1,016,334 of the $1,158,743 issued B&T credits has been utilized to pay for B&T Fee obligations for the Project at the time of building permit issuance. This leaves a balance of $142,409 to be applied toward future B&T Fees required at building permit issuance. With each subsequent approved construction credit for Copper Hill Bridge, credits will be given for the exclusive use to satisfy on a dollar for dollar basis all or a portion of the Remaining B&T Fees for the Project. If there are not sufficient credits available to be used for the payment of Remaining B&T Fees when due, the Developer (or a merchant builder) shall pay Remaining B&T Fees to the B&T District as deposits (the "Deposits") as provided in Section G of the Amended and Restated Pre -Annexation Agreement. Any moneys paid as Deposits by the Developer (or a merchant builder) to the B&T District shall be made with the understanding that once the Copper Hill Bridge is completed, such Deposits, less Deposit amounts needed to satisfy Remaining B&T Fees, will be returned to the payor of record (either Developer or merchant builder), in the form of B&T District credit issued by the B&T District in accordance with B&T District policies (the "B&T District Credits") to be used in accordance with B&T District policies." 5. Amendment to Exhibit B to Acquisition Agreement. CMFA, the City and Developer agree that Sections I and II of Exhibit B to the Acquisition Agreement are revised to read as follows: L Acquisition Improvements A. Extension of Avenida Rancho Tesoro ("A" Street) (subject to annexation) (est. cost $4,500,000) B. Trail improvements (est. cost $2,500,000) C. Debris basins, Lots 2421-2435, Lot 2537 (est. cost $2,300,000) D. Copper Hill Bridge improvements (est. cost of $12,700,000) II. Financed Fees The B&T Fees that constitute Financed Fees shall include the Valencia Bridge and Major Thoroughfare Construction Fee District fees imposed upon the Project, less the Acquisition Price for the Copper Hill Bridge. 5 Packet Pg. 21 1.b III. Calculations The tables below summarize the Developer's B&T obligation and application of Cash Deposits. Estimated B&T Obligation as of June 1, 2024 Est B&T Fee Obligation $17,233,000 LESS B&T Cash -Financed Fees & Deposits ($ 6,478,248) $4,086,348 Cash Paid to City of Santa Clarita $2,391,900 Cash Paid to County of Los Angeles LESS B&T Fees - Construction Credits ($ 1,158,743) Est Remaining B&T Fees Obligation $ 9,596,009 Estimated Application of Developer Cash and Construction Credits Est B&T Fee Obligation $ 17,233,000 Est Financed Fees —Cash as of 6/1/24 ($ 4,533,000) hondproceedreimhursement Est Cash Deposits —Cash as of 6/1/24 ($ 1,945,248) deposits held until Bridge completed Est Construction Credits (Bridge costs) ($12.700,000) Acquisition Price Est Deposits On Hand at Project Close ($ 1,945,248)* *Estimated Valencia B&T Credits to he issued upon Copper Hill Bridge project completion to payor of record Summary of Restricted Construction Credits as of June 13, 2024 B&T Construction Credits Issued for Tesoro Project $1,158,743 B&T Construction Credits Applied to Tesoro Building Permits ($1,016,334) B&T Credits Available for Future Tesoro Building Permits $ 142,409** **B&TCredits are required to he applied to the Tesoro project until the Copper Hill Bridge construction is complete and the total B&Tfee obligation is fulled. Upon project completion and confirmation of B&T Obligation being fulfilled, unrestricted Valencia B&T Credits will he issued to the payor of record in accordance with B&TDistrict policies. [SIGNATURE PAGE FOLLOWS] M Packet Pg. 22 1.b IN WITNESS WHEREOF, CMFA, the City and Developer have executed this Amendment as of the Effective Date. ATTEST: Mary Cusick, City Clerk 7 "CITY" CITY OF SANTA CLARITA, a political subdivision of the State of California By: Kenneth W. Striplin, City Manager "DEVELOPER" BLC TESORO LLC, a Delaware limited liability company By Its: By Its: "AUTHORITY" CALIFORNIA MUNICIPAL FINANCE AUTHORITY, a joint powers authority By: Name: Title: Authorized Signatory Packet Pg. 23 1.c ATTACHMENT A: AMENDMENT TO CONDITION OF APPROVAL 50 REDLINE/STRIKETHROUGH A minimum of 2-54 257 senior citizen housing set -aside dwelling units shall be toe 108 fn r et ra-te ,aond 108 senior citizen bonus densi . housing set -aside dwelling units, shall be built as Part of this Project. The recordingof f the unit map for 108 bonus density units shall be allowed once at least 198 building permits for the 257 senior citizen units have been issued. Packet Pg. 24 1.d ATTACHMENT B: SECOND AMENDED AND RESTATED PRE -ANNEXATION AGREEMENT BETWEEN THE CITY OF SANTA CLARITA, CALIFORNIA, AND BLC TESORO, LLC, REGARDING ANNEXATION TO THE CITY OF SANTA CLARITA Pursuant to Section 17.27.100(B) of the City's Municipal Code and except as otherwise stated in this Pre -Annexation Agreement, the City of Santa Clarita (City) and BLC Tesoro, LLC (Owner), hereby agree to the following terms, covenants, and conditions: A. On November 12, 2019, the City Council adopted a Resolution of Application, Resolution No. 19-57, pursuant to Government Code Section 56700, to initiate annexation proceedings affecting the Tesoro del Valle Annexation area, including Revised Vesting Tentative Tract Map (VTTM) 51644-1 (Project). B. The Owner agrees to support the City's annexation of the Project and any associated properties, and to work with and support City planning efforts where such efforts promote and advance the objectives set forth in this Pre -Annexation Agreement. C. The City agrees to recognize and continue to treat the Los Angeles County (County) approvals, which are part of Revised VTTM 51644-1, its amendments, and its associated entitlements which have been approved by the County prior to the effective date of the annexation, as a vested right to proceed in accordance with applicable County ordinances in effect on the date the application for the County approvals was deemed complete for the term of such map, including permitted uses, parking, setbacks, right of way improvements, landscaping, and hillside development. County approvals can be found in Exhibit A to this Pre -Annexation Agreement. Revised VTTM 51644-1 is attached as Exhibit B to this Pre -Annexation Agreement. The City will not impose any other or additional requirements on the Owner or the property in connection with the subdivision of the property, pursuant to the County approvals, provided the approved Project is not substantially modified. Any modifications beyond those permitted by Chapter 17.09 of the Unified Development Code (UDC) shall comply with City requirements and ordinances. If the Owner seeks to modify a specific item or condition approved by the County, the City will not review or seek to modify any unrelated approval or condition previously approved by the County. The Owner agrees to pay any fees, costs, or impact fees generated by substantial modifications to the Project. D. The City agrees to provide the Owner with a Planning Division liaison to assist in expediting the Project through all City departments in connection with future submittals, and to make reasonable efforts to minimize delays associated with any City policies or standards that may differ from those of the County. E. The City will accept dedication of the public streets as each street is completed, with completion being determined by the City's Public Works Director. The acceptance of Packet Pg. 25 1.d dedication by the City will include the assumption of the maintenance and liability responsibility of these public roads. Roads will be constructed in accordance with the County approvals, to County standards. F. The County approvals may be extended by the Owner, pursuant to Section 66452.6 of the Subdivision Map Act, including one administrative extension, as well as up to six years through action of the Planning Commission, as provided for in Section 17.06.230 of the City's Municipal Code and the Subdivision Map Act. The City shall not impose any new requirements in connection therewith, other than payment of the City's then -standard extension fees; however, the City may deny any requested extension on the grounds set forth in Government Code Section 66498.1(c). Any future minor modifications to the approved Project, as determined under UDC Section 17.09, would be subject to the City's UDC as applicable. G. The Project is in the Valencia Bridge and Thoroughfare (B&T) District and the City acknowledges the applicant will be constructing the widening of Copper Hill Drive and the bridge over the San Francisquito Creek, which will be eligible for B&T fee credits that shall be applied against the B&T obligation at Building Permit issuance. If B&T credit for bridge construction is not issued prior to Building Permits, then a Letter of Credit or Bond may be posted to temporarily satisfy B&T fees up to the amount of the estimated credit as determined by the City. H. Copper Hill Bridge Widening Upon first submittal of the construction plans and related documents for the Copper Hill Drive and bridge over the San Francisquito Creek, the Owner agrees to provide the City payment for design/permitting review and construction management in an amount established and approved by the Director of Public Works. Upon receipt of payment by the City, the Owner will receive an equal amount in B&T fee credits which shall be applied against the B&T obligation at Building Permit issuance. The City agrees that the amount established by the Director of Public Works will be a "not to exceed" payment, and the Owner will not be responsible for additional costs associated with design review and construction management unless there are substantial changes made to the scope or schedule of the bridge widening over San Francisquito Creek. The Owner represents that the construction schedule will be e ment4s twelve (12) months. 2. The City will not issue Certificates of Occupancy (COO) for the Tesoro Highlands project until the construction of the bridge widening commences, as determined by the Director of Public Works. Once the construction of the bridge widening has commenced, the City will begin issuing COO's for the project up to a maximum of 342 COO's of the approved 820 units. Once the bridge widening has met the substantial completion milestone of the completion of the bridge deck closure pour, the City will begin issuing additional COO's for the project up to a maximum of 585 COO's of the aproved 820. It is expected that the bridge widening project will take approximately 12 months to complete. The City will not issue any of the remaining Packet Pg. 26 1.d COO's (units 443-586 through 820) until the bridge widening has been completed, to toe satin faetio of *he''i-ter --' P !ie Wed which is defined as all improvements constructed except the bridge lights and street lights on Copper Hill Drive. 3. Applicant agrees to obtain all applicable jurisdictional approvals, comply with all applicable federal, state, and local laws, rules, codes, and regulations, and obtain, coordinate and pay for all studies, permits, fees, and agency inspections required to build the Copper Hill Bridge. The Owner agrees to offer in dedication land for the purpose of open space to the City per Exhibit C to this Pre -Annexation Agreement. All open space dedications shall be recorded with each applicable final map phase, or by separate instrument at the recording of the applicable final map phase. The City understands that a portion of the open space being dedicated to the City is required habitat mitigation as part of the approval and will have restricted use. The City shall accept the open space offered for dedication by the applicant, subject to the terms and conditions of the Open Space Management and Maintenance Agreement (Open Space Agreement), attached as Exhibit D to this Agreement. The Owner shall construct a Class 1 trail connection from the sidewalk on the north side of Copper Hill Drive west of the Copper Hill Drive Bridge to the northerly terminus of the westerly San Francisquito Creek Trail on the southside of the Copper Hill Drive Bridge. In addition, the Owner shall construct a Class I trail connection from the northerly terminus of the easterly San Francisquito Creek Trail on the southside of the Copper Hill Drive Bridge. The trail connection shall pass under the Copper Hill Drive Bridge and loop around to the northside of Copper Hill Drive at the intersection with McBean Parkway. All new or modified trail striping and markings shall be the responsibility of the owner. All new and existing inaccessible trail facilities shall be designed and constructed to the satisfaction of the City Engineer. The City represents that the City already has easement rights for the existing Class 1 trails and that the Owner is not being required to obtain any additional ownership or easement rights for the existing Class 1 trails. The existing Class 1 trails refers to the sections on easterly and westerly San Francisquito Creek Trail that extend under the Copper Hill Bridge from the north side of the bridge to the trails on the south side of the bridge. Finally, the Owner agrees to pay for the cost of posting signage on the existing Cliffie Stone Trail south of the Copper Hill Bridge and north of the Copper Hill Bridge on the existing trail alignment set by the City and the County of Los Angeles, along with contribution to the City upon the annexation to the City for any necessary brush clearance on this portion of the Cliffie Stone Trail in the amount of $500. 1. The applicant shall secure, at the applicant's expense, sufficient title or interest in land to permit construction of any required off -site improvements. 2. If the applicant is unable to acquire sufficient title or interest to permit construction of the required off -site improvements, the applicant shall notify the City of this inability not more than six months after the annexation is complete. In such case, the City may Packet Pg. 27 1.d thereafter acquire sufficient interest in the land, which will permit construction of the off -site improvements by the applicant. The applicant shall pay all of the City's costs of acquiring said off -site property interests. The cost of acquisition may include, but is not limited to, acquisition prices, damages, engineering services, expert fees, title examination, appraisal costs, acquisition services, relocation assistance services and payments, legal services and fees, mapping services, document preparation, expenses and/or damages (as provided under Code of Civil Procedures Sections 1268.510-.620), and overhead. 4. If required, the City shall commence an eminent domain action to acquire the property to be improved within 120 days of the notification set forth in Section J.2. (J.2.) above. The applicant shall have no further obligations to pay for the acquisition of the property nor to install or pay for the improvements on the property if the City has not commenced an eminent domain action to obtain the necessary property within 120 days of the notification set forth in J.2. 5. At the time the applicant notifies the City, as provided in J.2., the applicant shall simultaneously submit to the City, in a form acceptable to the City, all appropriate appraisals, engineering specifications, legal land descriptions, plans, and other documents deemed necessary by the City to commence its acquisition proceedings. 6. The applicant agrees to deposit with the City, within five days of request by the City, such sums of money as the City estimates to be required for the costs of acquisition. The City may require additional deposits from time -to -time. 7. If the City dismisses the eminent domain action referred to in J.4. above, or if the Superior Court rules in a final judgment that the City may not acquire the necessary property, the applicant shall have no further obligations to pay for the acquisition of the property, nor to install or pay for the improvements on the property. Notwithstanding the foregoing, the applicant shall reimburse the City for all costs incurred to the point of dismissal or to obtain the final judgement, including any court ordered payment amounts included in or resulting from such dismissal or judgement. 8. The applicant shall execute any agreements mutually agreeable prior to providing the notice described in J.2. as may be necessary to assure compliance with the foregoing conditions, including, but not limited to, a property acquisition and reimbursement agreement. 9. Failure by the applicant to notify the City, as required by J.2., or simultaneously submit the required and approved documents specified in J.5. above, or make the deposits specified in J.6. above, shall, with the exception of J.7. above, constitute applicant's waiver of the requirements otherwise imposed upon the City to acquire necessary interests in the property referred to hereinabove. 4 Packet Pg. 28 1.d K. The City agrees to accept all public trails within any City -owned open space and the additional City trails required by the County approvals and constructed to County standards, and maintain said trails to City standards, including the Cliffie Stone Trail and Outpost East Trail Rest Area which will be transferred to City ownership as part of the annexation. L. The City agrees that the parks developed as part of the County approvals will be constructed to County standards and dedicated to and maintained by the HOA, except the Outpost East Trail Rest Area, which will be a City facility. M. The City understands the Owner has formed a Mello -Roos Community Facilities District (CFD) with the California Municipal Finance Authority (CMFA) that is authorized to levy annual special taxes and issue bonds to finance approximately $38,000,000 in public improvements and impact fees associated with the Project. Owner included within the formation of such CFD a separate service special tax over the Project to be levied in perpetuity to fund the management and maintenance of the open space described in Section I of this Agreement. This will generate a minimum of $50,000 per year in revenue, which amount shall be adjusted annually for inflation as described in the County approvals and the Open Space Agreement to be entered into by the City and the Owner. The City presented to the City Council, for its consideration, a resolution to (a) allow the CFD to be established by CMFA, pursuant to CMFA's Bond Opportunities for Land Development (BOLD) Program, and to be authorized to levy the services special tax described above and a special tax to finance certain improvements that will be City improvements before the annexation, and certain ones that will be City improvements following the annexation, including those improvements listed in Exhibit E (City Improvements), and a portion of the Project's B&T Fees listed in Exhibit E (Financed Fees); (b) authorize the CFD to finance the Stewardship Costs in the amount of $59,000 and remit to the City the CFD services special tax for use by the City as Stewardship Funds, pursuant to the Open Space Agreement (as such terms are defined in the Open Space Agreement); and (c) approve the form and authorize the execution of a joint community facilities agreement with CMFA and the Owner relating to the CFD and an Acquisition Funding Agreement with CMFA and the Owner relating to the City Improvements and the Financed Fees. Should the CFD not be formed, the HOA shall be responsible to cover the applicable costs of maintenance of the open space described in Section I of this Agreement. N. The Developer shall be required to form a Drainage Benefit Assessment Area to fund maintenance of any water quality devices within the Project that the Los Angeles County Flood Control District will not maintain as part of the Storm Drain transfer process. O. The Developer may opt to form a Benefit Assessment District over the Project, such as a Lighting and Landscape Maintenance District (LLMD), to fund the services conditioned by and described in the County approvals where a HOA or County -formed Benefit Assessment District has not been formed over the Project or the Project not been annexed into an existing County -formed Benefit Assessment District. The City agrees to conduct Packet Pg. 29 1.d such assessment district proceedings. Such services include, but are not limited to, streetlighting and landscape maintenance. P. Miscellaneous. Severability. If any provision of this Agreement is held, to any extent, invalid, the remainder of this Agreement shall not be affected, except as necessarily required by the invalid provision, and shall remain in full force and effect. 2. Waiver or Modification. Any waiver or modification of the provisions of this Agreement must be in writing and signed by the authorized representative(s) of each party. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of the party's right to insist upon and demand strict compliance by the other party with the terms of this Agreement. Binding upon Heirs, Successors and Assigns. The terms, covenants, and conditions of this Agreement shall be binding upon all heirs, successors, and assigns of the parties hereto. 4. Governing Law, Venue. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without reference to choice of law provisions. Any legal actions under this Agreement shall be brought only in the Superior Court of the County of Los Angeles, State of California. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original. The parties agree that this Agreement may be transmitted and signed by facsimile or 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. 6. Interpretation. This Agreement shall be construed according to its fair meaning, and not strictly for or against any party. No presumptions or rules of interpretation based upon the identity of the party preparing or drafting the Agreement, or any part thereof, shall apply to the interpretation of this Agreement. 7. Effective Date, Termination, and Enforcement. This Agreement shall become effective following approval by the City Council and upon signature by all parties, and shall continue in full force and effect for the duration of the entitlements described in Paragraph C herein, unless terminated by mutual agreement of the parties in writing. An individual party may terminate this Agreement for default, but only after written notice of default and a failure by the defaulting party to cure the default within 30 days, or if not possible within 30 days, within a reasonable time thereafter, so long as a cure is commenced within 30 days and thereafter diligently pursued until completion. In addition to Ci Packet Pg. 30 1.d the right to terminate, as well as any other remedy provided at law, a non - defaulting party may also pursue specific performance as a remedy. SIGNATURES ON THE NEXT PAGE Packet Pg. 31 1.d NOW THEREFORE, the parties hereby execute this Pre -Annexation Agreement as authorized by the City Council of the City of Santa Clarita and BLC Tesoro, LLC. Dated: ATTEST: Mary Cusick, City Clerk APPROVED AS TO FORM: City Attorney CITY OF SANTA CLARITA Cameron Smyth, Mayor BLC TESORO LLC, a Delaware limited liability company By: Name: Title: Name: Title: Packet Pg. 32 1.d EXHIBIT A LOS ANGELES COUNTY APPROVALS FOR VTTM 51644-01 APPROVED NOVEMBER 7, 2018, and AMENDED JUNE 23, 2020, and JUNE 15, 2021, INCORPORATED BY REFERENCE Packet Pg. 33 1.d EXHIBIT B REVISED VTTM 51644-01 INCORPORATED BY REFERENCE Q r Q Packet Pg. 34 1.d EXHIBIT C VTTM 51644-01 OPEN SPACE EXHIBIT INCORPORATED BY REFERENCE Q r Q Packet Pg. 35 1.d EXHIBIT D OPEN SPACE AGREEMENT INCORPORATED BY REFERENCE Q r Q Packet Pg. 36 1.d EXHIBIT E VTTM 51644-01 COMMUNITY FACILITIES DISTRICT EXHIBIT I. Acquisition Improvements' A. Extension of Avenida Rancho Tesoro ("A" Street) (subject to annexation) (est cost $4,500,000) B. Trail improvements (est. cost $2,500,000) C. Debris basins, Lots 2421-2435, Lot 2537 (est. cost $2,300,000) D. Copper Hill Bridge Improvements (est. cost $12,700,000) II. Financed Fees The B&T fees shall include the Valencia Bridge and Major Thoroughfare Construction Fee District development impact fees imposed and collected by the City, as it may be amended or superseded, net of applicable credits. Packet Pg. 37