HomeMy WebLinkAbout2006-01-10 - AGENDA REPORTS - CHEROKEE SUNCAL MOU (2)Agenda Item: _4— -
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:
Item to be presented by: Carl Newton
DATE: January 10, 2006
SUBJECT: TWO SEPARATE MEMORANDUM OF UNDERSTANDING
AGREEMENTS WITH CHEROKEE SANTA CLARITA, LLC AND
SUNCAL SANTA CLARITA, LLC REGARDING
CLARIFICATION OF PORTA BELLA PROJECT CONDITION OF
APPROVAL DS -12
DEPARTMENT: Community Development
RECOMMENDED ACTION
City Council adopt the proposed two separate Memorandum of Understanding ("MOU")
agreements.
BACKGROUND
On May 9, 1995, Condition of Approval DS -12 ("DS -12"), which is one of a number of final
conditions of approval applicable to the Project which is the subject of the Development
Agreement between the City and Whittaker Porta Bella Development, Inc., dated March 28, 1996
(the "Development Agreement"), was adopted. At the time DS -12 was adopted, Whittaker Porta
Bella, Inc. was the owner of the Porta Bella Site, an approximately 996 -acre property in Santa
Clarita.
In January, 1999, ownership of the Porta Bella property transferred to Santa Clarita, LLC
("SCLLC"), led by its managing member Remediation Financial, hic. ("RFP'). Subsequently, an
approximate 10 acre (more or less) parcel was acquired by Bermite Recovery, LLC (`Bermite").
SCLLC, RFI and Bermite are all presently Debtors in the bankruptcy case pending in the United
States Bankruptcy Court for the District of Arizona (the `Bankruptcy Court") and designated as
Case No. 2-04-bk-10486-CGC, In re: RFI Realty, hic. et al. (the `Bankruptcy Case").
The Porta Bella Site property is currently the subject of a motion to sell filed by the Debtors in
the Bankruptcy Case. Cherokee Santa Clarita, LLC ("Cherokee") and SunCal Santa Clarita, LLC
(SunCal) is seeking to acquire the Porta Bella Site property through the bankruptcy sale process
(the "Sale").
DS -12 was adopted before the discovery of perchlorate contamination in both the soil and the
groundwater under the Porta Bella Site and also before the discovery of unexploded ordnance in
the soil. Both Cherokee and SunCal have requested clarification from the City with respect to
DS -12 in light of the sale process pending before the Bankruptcy Court and the interest of both
Cherokee and SunCal in acquiring the Porta Bella Site.
The text of DS -12 is as follows.
"The Mitigation Monitoring Plan is attached as Exhibit "F". The applicant is
responsible for implementing the measures to the satisfaction of the City for the
life of the project. Mitigation measures RU -1 and RU -3 are superseded by the
following language:
"For the entire 996 -acre site, the applicant and/or future developer shall provide
evidence, to the satisfaction of the City, of proper hazardous waste identification
and remediation, from California Environmental Protection Agency/Department
of Toxic Substances Control prior to the issuance of any grading permits. Until
such evidence has been received, no construction may commence on the entire
site until it is cleared by Cal EPA/DTSC."
It is in the City's interest that prospective purchasers/developers of the Porta Bella Site, who will
be involved in remediation of the property as directed by the Department of Toxic Substances
Control, understand the City's commitment to clarifying that DS -12 was never intended as, nor
should changed circumstances cause it to become, an unreasonable restraint on the development
of the property.
On June 18, 2003, the City entered into a Reimbursement Agreement with Cherokee, which was
authorized by City Council Resolution 03-63 and included among its terms an expressed intent to
clarify DS -12 to better communicate the intent of this condition and to reflect the current
understanding of the cleanup processes to occur on the Porta Bella Site. The Reimbursement
Agreement has since terminated according to its terms without the anticipated clarification of
DS -12 having occurred.
The proposed MOU's with both Cherokee and SunCal restates the City's intent previously
expressed in the June 18, 2003 Reimbursement Agreement to clarify DS -12 as provided therein.
ALTERNATIVE ACTIONS
Other actions as determined by the City Council
FISCAL IMPACTS
No fiscal impacts are anticipated by the recommendation listed in this report.
ATTACHMENTS
Cherokee MOU
Sun Cal MOU