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HomeMy WebLinkAbout2012-07-10 - AGENDA REPORTS - ROUND MNTN RIVER VILLAGE AGMTS (2)CONSENT CALENDAR DATE: SUBJECT: DEPARTMENT: Agenda Item: 3 CITY OF SANTA CLARITA AGENDA REPORT City Manager Approval Item to be presented by: July 10, 2012 ROUND MOUNTAIN LEASE AND RIVER VILLAGE QUIMBY AGREEMENTS WITH NEWHALL LAND COMPANY Parks, Recreation, and Community Services RECOMMENDED ACTION City Council authorize the City Manager to enter into an agreement with the Newhall Land Company to share equally in the revenues for the license agreements on the Round Mountain property for a term not to exceed three years from this date. 2. Authorize the City Manager to hold an irrevocable offer of dedication for a staff -approved property at an appraised value of no less than $900,000.00 as security for the net value Villa Metro Project Quimby obligations, 3. Direct staff not to officially accept the dedication as a permanent parkland holding until such time as Newhall Land fails to complete its development of public park spaces within the River Village Project by the end of calendar year 2014. BACKGROUND On June 7, 2012, a duly noticed meeting of the City Council Development Subcommittee was held to discuss topics related to the fulfillment of conditions of approval for two residential subdivision projects in the City entitled by the Newhall Land Company. The subcommittee recommended that the following items be presented to the Council for consideration. The final two entitled residential land developments by the Newhall Land Company within the City of Santa Clarita are called River Village and Villa Metro. These two projects lie on either side of the Santa Clara River east of Bouquet Canyon Road. The River Village Project is partially developed and consists of medium -to -large, single-family dwellings. The construction of small single family homes in Villa Metro is anticipated to commence shortly after the completion of its sale to another home builder. This item is brought before the Council to consider two draft agreements that are intended to satisfy certain conditions of approval for these projects as the Newhall Land Company wraps up its development business within the City limits. Round Mountain is the name used to describe the prominent hill topped by a water tank on the southwestern most corner of the Valencia Industrial Center. The land being dedicated includes the large hill and most of the surrounding undeveloped land below to the south bounded by Interstate 5 and Magic Mountain Parkway to the south, and extending to the west as far as the Christmas Tree Farm. The Newhall Land Company dedicated this property to the City as a condition of the River Village Project in 2007. The acceptance and recording of the documents had been pending awaiting the state's approval of certain environmental preservation easments, the resolution of the subject lease agreements, and the completion of the Iron Horse Trailhead. The agreements at issue involve disputed revenue generated by cellular communication devices installed in the late 1990's. After extended negotiations, staff recommends the Council agree to an even revenue split for the next three years, after which point all further revenue and decisions related to the land revert solely to the City. In conjunction with this agreement, Newhall Land will work with the Valencia Water Company (owner/operator of the water facilities on Round Mountain) to provide written support for any City -generated projects proposed on the land. The second issue brought about by the River Village project involves Park Improvement Fees (Quimby). Newhall Land has requested that the City accept an irrevocable offer of dedication for a parcel of land as security against the satisfaction of Quimby fees for the Villa Metro Project. The various private recreation facilities built and pending in the River Village Project, together with the 5.2 -acre public park that ties Central Park to the Santa Clara River, will nearly satisfy the Quimby obligations for both projects. Even without potential reductions to the the Villa Metro development, the remaining net Quimby fees for both are estimated at a maximum of $700,000.00. In exchange for accelerating the timing of the 5.2 -acre park design and completion into 2014, staff believes that the land dedication will secure the balance of the Quimby obligations while promoting job creation by reducing the large amount of up -front cash that would otherwise be required prior to issuing permits for the Villa Metro Project. Due to unit count triggers for the completion of the new park, the timing for completion could be well beyond 2014. By agreeing to this dedication security, staff feels that several community desires (more parks and jobs) can be achieved in a much shorter time period. ALTERNATIVE ACTIONS In the Round Mountain matter, Council could direct staff to record the dedication deeds without agreeing to further revenue sharing. That action could jeopardize further cooperation from Newhall Land regarding potential impacts to Valencia Water Company facilities in the area. Cooperation would be helpful in implementing future infrastructure improvements on the site, as use of Valencia Water's access roads and utilities could result in fewer impacts to the site and lower costs in the long term. Council could direct staff to reject the irrevocable offer of dedication and require payment in cash for the Quimby fees due for the Villa Metro Project, potentially delaying its commencement I and extending the completion date for the new River Village Park well beyond 2014. Other action as determined by the City Council. FISCAL IMPACT The Round Mountain license agreements currently generate $79,398.84 per year, therefore the City and Newhall Land could each expect $39,699.42 for the next three years, followed by the City receiving the entire amount going forward until termination or renegotiation of the agreements. While the City would not receive the cash Quimby fees owed by the Villa Metro Project under the proposed agreement, this would actually be consistent with all previous residential projects generated by Newhall Land in that they have historically built sufficient qualifying recreational facilities to more than offset the obligations created by their developments. 3