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HomeMy WebLinkAbout2003-05-13 - RESOLUTIONS - APPEAL PORTA BELLA DEVAGMT (2)RESOLUTION NO. 03-61 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, FINDING THAT SANTA CLARITA, LLC AND BERMTTE RECOVERY, LLC HAVE NOT COMPLIED IN GOOD FAITH WITH THE PROVISIONS OF THE PORTA BELLA DEVELOPMENT AGREEMENT THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. FINDINGS OF FACT. The City Council does hereby make the following findings of fact. a. On February 27, 1996, the Porta Bella Development Agreement (the "Agreement") was approved by the Santa Clarita City Council through Ordinance 96-4. The Agreement was formed between the City of Santa Clarita and Whittaker Porta Bella, Inc. and addressed the rights and obligations of both parties in connection with the remediation and development of the property described therein and consisting of Assessor's Parcel Numbers 2836-012-010, 011, 012, and 019, which is known generally as the former Whittaker-Bermite Site (the "Property"). b. In January 1999, ownership of the Property was acquired by Santa Clarita, LLC ("SCLLC"). Remediation Financial, Inc. ("RFI") serves as the managing member of SCLLC. All of the rights and obligations of Whittaker Porta Bella, Inc. under the Agreement were assigned to and assumed by SCLLC at the time of the Property acquisition. Through a series of transactions, Bermite Recovery, LLC. (`Bermite") subsequently acquired ownership of an approximate ten acre, more or less, parcel of the Property, and this parcel is currently used for the parking lot for the Santa Clarita Metrolink Station. RFI also serves as managing member of Bermite. C. On September 25, 2001, the Santa Clarita City Council directed City staff to commence a compliance review of the Agreement in accordance with Section 6(b)(x) of the Agreement. d. On October 3, 2001, the Director of Planning and Building Services sent written notice to SCLLC indicating that the City was initiating a compliance review of the Agreement. e. On October 25, 2001, the Director of Planning and Building Services sent written notice to Bermite indicating that the City was initiating a compliance review of the Agreement. f. Section 6(b)(x) of the Agreement and Section 17.03.010 of Chapter 17.03 of Title 17 of the Santa Clarita Unified Development Code require that SCLLC and Resolution No. 03-61 Page 2 Bermite provide the City with evidence of good faith compliance with the Agreement within 30 days of receipt of notice of the initiation of the compliance review process. g. In a letter dated December 4, 2001, Gary Brown, Director of Development for RFT, writing on behalf of SCLLC, responded to the City's written notice and indicated that SCLLC was "compliant" but did not provide any supporting evidence for this conclusion. The letter was transmitted after the end of the 30 -day response period specified in the Agreement. h. Using all information and evidence available and in accordance with the requirements of the Agreement, the Director of Planning and Building Services performed a review of the performance of SCLLC and Bermite under the terms of the Agreement and determined that these entities had not complied in good faith with the terms of the Agreement. i. In a letter dated December 19, 2001, the Director of Planning and Building Services advised RFI, SCLLC, and Bermite of his finding of noncompliance with the terms of the Agreement. j. On March 14, 2002, the Planning Commission of the City of Santa Clarita conducted a duly noticed public hearing regarding the Director of Planning and Building Services' determination that SCLLC and Bermite have not complied in good faith with the terms of the Agreement. The public hearing was held at 5:00 p.m. at City Hall, Council Chambers, 23920 Valencia Boulevard, Santa Clarita. k. The Planning Commission fully considered the Agreement, various correspondence between the City and SCLLC, and the Director of Planning and Building Services' findings of noncompliance with the Agreement. I. The Planning Commission fully considered all testimony and written comments regarding the performance of SCLLC, and Bermite under the terms of the Agreement. in. At the March 14, 2002 meeting, the Commission directed staff to prepare a resolution for consideration at the Commission's regular meeting of April 2, 2002, which resolution is to indicate that SCLLC and Bermite have not complied in good faith with the provisions of the Agreement and is to contain possible actions to be used as remedies for the areas of noncompliance. Further, the Commission requested that staff meet with SCLLC and Bermite to ensure that SCLLC and Bermite are able to undertake and committed to implementation of the remedies. n. At the April 2, 2002 Planning Commission meeting, the Commission adopted a resolution finding that Santa Clarita, LLC and Bermite Recovery, LLC have not complied in good faith with the provisions of the Porta Bella Development Agreement. The Commission provided direction to staff on possible actions to be Resolution No. 03-61 Page 3 used as remedies for each of the four areas of noncompliance, which were incorporated into the resolution. o. On May 2, 2002, SCLLC submitted a letter to the City of Santa Clarita appealing the Planning Commission's adoption of Resolution P02-12. In their letter, SCLLC states, "We believe we are compliant with our Development Agreement in the four areas particularized by the Planning Commission." P. At the May 7, 2002 Planning Commission meeting, the Commission received a 30 -day status report on SCLLC's actions to remedy the four areas of noncompliance. Per the terms of the Porta Bella Development Agreement, SCLLC has 120 days from April 2, 2002, to come into compliance with the Development Agreement. It was agreed by the Commission that staff will continue to bring monthly status reports to the Planning Commission on SCLLC's progress. q. A duly -noticed hearing was scheduled before the City Council for their June 25, 2002 regularly -scheduled meeting regarding Santa Clarita, LLC's appeal of the Planning Commission's adoption of Resolution P02-12 finding that SCLLC and Bermite Recovery, LLC have not acted in good faith with the terms of the Porta Bella Development Agreement noncompliance. r. At the applicant's request, this item was continued from the June 25, 2002 meeting to October 22, 2002. On September 20, 2002, RFl/SCLLC submitted a letter requesting a further continuance of this hearing. The hearing was continued to the October 22, 2002 City Council meeting. S. At the October 22, 2002 meeting, the Council continued the public hearing on this matter to November 26, 2002. t. At the November 26, 2002 public hearing, the City Council considered a staff presentation, a staff report, a presentation from the appellant, Santa Clarita, LLC, and public testimony. U. At the November 26, 2002 meeting, the Council continued the public hearing on this matter to February 25, 2003. V. At the February 25, 2003 City Council meeting, the Council further continued this item to the May 13, 2003 City Council meeting. W. At the May 13, 2003 public hearing, the City Council considered a staff presentation, a staff report, a presentation from the appellant, Santa Clarita, LLC, and public testimony. X. On May 13, 2003, the City Council took formal action, adopting this resolution which upholds the Commission's finding that Santa Clarita, LLC and Bermite Recovery, LLC have not acted in good faith compliance with the terms of the Porta Bella Development Agreement. Resolution No. 03-61 Page 4 SECTION 2. INDEPENDENT FINDING OF NONCOMPLIANCE. The City Council has determined that SCLLC and Bermite have not complied in good faith with the terms of the Agreement and in making this determination finds as follows: a. Failure to Provide Evidence of Good Faith Compliance. SCLLC and Bermite failed to provide evidence of good faith compliance with the Agreement as required by Section 6(b)(x) of the Agreement. b. Failure to Provide Required Insurance Protection for the City. SCLLC and Bermite failed to have the City named as an additional insured on policies covering the risks of liability from hazardous substances or materials as is required by Paragraph 2 of Exhibit J (the Indemnification Agreement) of the Agreement. C. Failure to Comply with the Requirements of the Department of Toxic Substances Control. The City entered into the Agreement in order to facilitate the achievement of a series of public objectives that are identified in general in Recital F of the Agreement and that are described in additional detail throughout the Agreement. None of these objectives can be achieved without a timely and thorough investigation and remediation of the Porta Bella Project Site. SCLLC executed an Enforceable Agreement with the Department of Toxic Substances Control ("DTSC") on February 14, 2001, addressing the investigation and remediation requirements applicable to the Porta Bella Project. In a letter dated September 10, 2001, the DTSC identified multiple deficiencies in the compliance of SCLLC with the Enforceable Agreement and demanded immediate action to correct the identified deficiencies. In addition, DTSC's letter dated December 11, 2001 specifically determines that Santa Clarita, LLC is not in compliance with the Enforceable Agreement. Thus, SCLLC and Bermite continue to frustrate the objectives of the Agreement to arrange for the timely development of the Porta Bella Project by failing to bring themselves into compliance with the Enforceable Agreement requirements of the DTSC. d. Attempted Termination of the City's Right to Occupy and Use Property adjacent to the Metrolink Station. Bermite and SCLLC, through their managing member RFI, sought to terminate the City's right to occupy and use property underlying the parking lot and access areas of the Metrolink Station by the purported termination of the lease of said property. Under the terms of the Agreement, the City is to have the use and occupancy of the property to support a commuter rail station during the term of the Agreement. (Agreement, p. 25.) Thus, the Notice of Termination of Lease sent by Bermite, RFI and SCLLC on July 31, 2001 to be effective August 31, 2001, breached the developer's obligation under the terms of the Agreement. SECTION 3. DEVELOPMENT OF REMEDIES. The City Council upholds the Planning Commission's finding of noncompliance and remedies to the four areas of Development Agreement noncompliance as described in Section 2 above. Resolution No. 03-61 Page 5 a. The materials contained in the February 18, 2002 letter and the April 15, 2002 letter submitted by SCLLC to City of Santa Clarita regarding compliance with the Agreement, shall serve as a written response to the letter requests made by the Director of Planning and Building Services in October of 2002. The April 15, 2002 letter states, per the Commission's request that SCLLC and Bermite will comply with all future Agreement compliance reviews. The April 15, 2002 letter indicates that SCLLC's and Bermite shall show their commitment to cooperate with the compliance review process each year by submitting information to the City in accordance with the schedule for compliance reviews outlined in the Agreement. b. SCLLC and Bermite shall make an unequivocal and unconditional request to Steadfast Insurance Company, their present insurance carrier, to name the City of Santa Clarita as an additional insured on SCLLC's policy. In addition, SCLLC and Bermite shall advise the City of Santa Clarita in writing of their intent to make this same request of all future insurance carriers that write policies for the Porta Bella Project. SCLLC shall provide to the City written evidence that these requests have been made. The City also encourages SCLLC and Bermite to aggressively pursue appropriate resolution of the existing lawsuit with Steadfast Insurance Company that addresses the coverages available with the current Steadfast policy. c. The City directs SCLLC and Bermite to promptly take positive steps to resolve all issues with the DTSC. To this end, SCLLC and Bermite shall return in 30 days from April 2, 2002, (May 7, 2002) with a strategy that lists a specific sequence of activities to be undertaken by SCLLC, Bermite and others to cause the termination of the enforcement action that DTSC has recommended to the Attorney General's office. It is anticipated that the resolution of this issue will result in revisions to the overall remediation schedule. d. The Planning Commission, at their March 14, 2002 meeting, determined, consistent with the terms of the Agreement, that as long as the Agreement is in effect, the City of Santa Clarita has the right to use the property adjacent to the Metrolink Station for commuter rail station parking and access. The Commission directed that SCLLC and Bermite enter into an agreement with the City to be incorporated into and resolve the currently pending injunction proceedings brought by the City against Bermite, SCLLC and RFI whereby these three parties will agree to forgo any attempt to regain possession of the subject property as long as the Agreements is in effect. In addition, SCLLC and Bermite shall present a written lease proposal to the City within 30 days. This formal, written proposal shall outline the terms of the City's lease of the subject property, specifying the number of years, payment schedule, and option to purchase details. SECTION 4. DEVELOPMENT OF ALTERNATIVE ACTIONS. The City Council directs City staff to develop a series of alternative actions that can be offered to the City Council for the Council's consideration in the event that SCLLC and Bermite do not act to cure their noncompliance within the time period specified in the Agreement. SECTION 5. NOTICE AND ACTIONS REQUIRED BY THE DEVELOPMENT AGREEMENT. The City Council directs City staff to provide notice of the adoption of this Resolution No. 03-61 Page 6 Resolution of the City Council to SCLLC, Bermite, RFI and other parties as may be required by the terms of the Agreement and to take any and all further actions as may be required by the Agreement, applicable law or regulation, specifically including the issuance of a notice(s) of default in accordance with Section 6(b)(vi) of the Agreement. SECTION 6. The City Clerk shall certify the adoption of this Resolution. PASSED, APPROVED AND ADOPTED this 13th day of May, 2003. AYOR ATTEST: CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARTTA ) I, Sharon L. Dawson, CMC, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the 13th day of May, 2003, by the following vote: AYES: COUNCILMEM 3ERS: McLean, Kellar, Weste, Ferry, Smyth NOES: COUNCILMEMBERS: None ABSENT: COUNCII.MEMBERS: None CITY CLERK