Exhibit 10.22
RECORDING REQUESTED BY:
AND WHEN RECORDED RETURN TO:
Susie Vasquez, City Clerk
City of San Marcos
1 Civic Center Drive
San Marcos, CA 92069
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Exempt from filing fee per Gov. Code ss.27383
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AMENDMENT NO. 1 TO FIRST AMENDED AND RESTATED DEVELOPMENT
AGREEMENT AND OWNER PARTICIPATION AGREEMENT
BETWEEN
THE CITY OF SAN MARCOS,
THE SAN MARCOS REDEVELOPMENT AGENCY,
AND
SAN ELIJO HILLS DEVELOPMENT COMPANY, LLC
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AMENDMENT NO. 1 TO FIRST AMENDED AND RESTATED DEVELOPMENT
AGREEMENT AND OWNER PARTICIPATION AGREEMENT BETWEEN THE CITY OF
SAN MARCOS, THE SAN MARCOS REDEVELOPMENT AGENCY, AND SAN ELIJO
HILLS DEVELOPMENT COMPANY, LLC
This Amendment No. 1 to First Amended and Restated Development
Agreement and Owner Participation Agreement ("Amendment") is entered into by and
between the City of San Marcos, a municipal corporation ("City"), the San Marcos
Redevelopment Agency ("Agency"), and San Elijo Hills Development Company, LLC, a
Delaware limited liability company ("Owner"), with regard to the development of
real property in the City of San Marcos.
RECITALS
A. On August 15, 1997, the parties hereto or their
predecessors-in-interest caused to be recorded in the Office of the San Diego
County Recorder as document no. 1997-0395018 that certain First Amended and
Restated Development Agreement and Owner Participation Agreement between the
City of San Marcos, the San Marcos Redevelopment Agency, and San Elijo Ranch,
Inc. ("Development Agreement") concerning the real estate development commonly
known as San Elijo Hills located in the City of San Marcos, California, more
particularly described therein (the "Project");
B. Section 4.4 of the Development Agreement authorizes its amendment in
the manner provided for in Government Code Section 65868;
C. This Amendment is necessary and desirable to insure the financing
and installation of public infrastructure consistent with the Circulation
Element of the San Marcos General Plan.
D. The terms and conditions of this Amendment have undergone extensive
review by the City and its City Council, and have been found to be fair, just,
reasonable and will advance the health, safety and welfare of San Marcos
residents;
E. This Amendment is consistent with the San Marcos General Plan and
San Elijo Hills Specific Plan;
F. The requirements of the California Environmental Quality Act have
been satisfied in connection with this Amendment; and
G. All actions taken and approvals given by the City have been in
accordance with applicable legal requirements for notice, public hearings,
findings, and other procedural matters.
H. It is the intention of the parties that this Amendment shall be
binding upon those portions of the Project identified in the Specific Plan as
Project Planning Areas C2 (Subareas a, b and c), F2, I1, I2, J, K1, K2, O, S, T,
V1, and V2. No other portions of the Project are affected or bound hereby.
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NOW, THEREFORE, in consideration of the above recitals and of the
mutual covenants hereinafter contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
AGREEMENT
1. Purpose and Effect. The purpose and effect of this Amendment shall
be to modify and supplement the provisions of the Development Agreement. Except
as modified or supplemented herein, the provisions of the Development Agreement
shall remain in full force and effect. In the event of any inconsistency, the
terms and conditions of this Amendment will prevail. Capitalized terms not
otherwise defined in this Amendment shall have the meaning ascribed to them in
the Development Agreement.
2. San Elijo Road Improvements. The provisions below are hereby
inserted following subparagraph "m" of Section A.1 at page 5 of Exhibit "B,"
entitled "Schedule of Performance":
n. Upon the earlier of thirty (30) days from the effective date of the
Amendment, or the issuance of a residential building permit for the
1,350th equivalent single family dwelling unit, excluding therefrom
building permits issued for Area R, construction offices, model homes
or affordable units as described in the first full paragraph of page 1
of this Exhibit "B" (hereafter "Equivalent Building Permit"), Owner
will submit to CDFG and USF&WS (as defined in Section 5.11 of the
Development Amendment and hereafter referred to as "Resource
Agencies"), and any other governmental agency with lawful jurisdiction
(collectively "Regulatory Agencies"), applications necessary for the
improvement of that portion of San Elijo Road (formerly known as
Questhaven Road) westerly of the Project's western boundary and
easterly the eastern boundary of the University Commons Specific Plan
(hereafter, the "San Elijo Road Dip") necessary to construct the
segment to the standards identified in City Resolution 99-5317, adopted
October 26, 1999 (hereafter, the "Mitigation Monitoring Program").
o. Upon the earlier of December 1, 2003, or the issuance of the 2,000th
Equivalent Building Permit, Owner will submit to the Resource Agencies
all applications necessary for the improvement of that portion of San
Elijo Road easterly of the Project's eastern boundary and westerly of
the existing terminus of Twin Oaks Valley Road (hereafter, "San Elijo
Road East"), necessary to construct the segment to the standards
identified in the Mitigation Monitoring Program.
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p. Owner will submit to the City an application to amend CFD 99-01 as
needed to generate the San Elijo Road CFD Funds, defined in Exhibit
"C", Section 11 hereof, upon the earlier of January 31, 2004, or the
issuance of the 2000th Equivalent Building Permit (the "CFD
Amendment"). The CFD Amendment will not propose to exceed an aggregate
1.75% maximum tax rate for the projected home sales prices. In the
event the City and/or Agency do not timely approve the CFD Amendment in
the form submitted by Owner, Owner shall have no obligation to provide
Owner's Advance or Owner's Contribution pursuant to Sections 11.2 and
11.3 of Exhibit "C".
q. Upon the earlier of March 30, 2004, or the issuance of the 2000th
Equivalent Building Permit, Owner will submit to the City a complete
design for the San Elijo Road Dip and San Elijo Road East in a form
substantially consistent with existing draft plans exchanged by the
City and Owner. The City will determine whether the submittal is
complete pursuant to existing plan check application procedures. Owner
will promptly respond to the City's reasonable requests for additional
information necessary to insure a complete design submittal. City plan
check and inspection fees are inapplicable to the subject improvements
and will not be imposed.
r. Owner will construct the San Elijo Road Dip improvements upon the
earlier of July 30, 2004, or the issuance of the 2,000th Equivalent
Building Permit. Owner's obligation to commence physical construction
is conditioned upon the City's acquisition of all required rights of
way, the issuance of all necessary Regulatory Agency permits and
approvals, including without limitation those required from the
Resource Agencies, and the City/Agency approval of the CFD Amendment.
s. Possession of rights-of-way necessary for the construction of San
Elijo Road East will be acquired by the City, using its powers of
eminent domain if necessary, at no expense to Owner, upon the earlier
of September 30, 2004, or the issuance of the 2,100th Equivalent
Building Permit. Owner will cause plats and legal descriptions to be
prepared, the cost of which shall be reimbursed as a component of
Owner's Advance, defined at Section 11.3 of Exhibit "C" hereof.
t. Owner will commence construction of San Elijo Road East not later
than January 31, 2005, provided that the City has acquired all
necessary rights of way, and all necessary permits and approvals,
including without limitation (i) permits and approvals necessary for
the grading of all of Phase 3 of the Project, and (ii) the CFD
Amendment, have been issued by all governmental agencies with
jurisdiction over the improvements, including without limitation the
City, Agency and Resource Agencies. Following commencement of
construction Owner thereafter will diligently pursue construction to
completion in accordance with the Development Agreement. Owner's
obligation to continue construction once commenced is conditioned upon
the availability of the City/Agency Contribution, as defined in Section
11.1 of Exhibit "C," sufficient to complete the improvements.
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3. Satisfaction of Fair Share Funding Requirement. The parties agree
that this Amendment constitutes satisfaction of the "Fair Share Funding
Mechanism" requirement contained in Section A.1.h at page 4 of Exhibit "B" of
the Development Agreement.
4. Tolling Extension. The following provision is added as Section A.3
at page 6 of Exhibit "B":
3. Tolling Extension. Owner's obligations, the building permit
thresholds and target dates set forth in Section A.1, Subparagraphs "n"
through "t" of this Exhibit "B" are deemed extended and excused in the
event Owner is unable to satisfy its obligations thereunder due to
circumstances beyond the reasonable control of Owner ("Tolling
Extension"). The Tolling Extension will be limited to the time period
during which the obligation(s) at issue may not reasonably be
satisfied. For example, the inability to timely obtain Regulatory
Agency or other governmental permits and approvals necessary to grade
all of Phase 3 of the Project or to construct the San Elijo Road Dip or
San Elijo Road East will activate the Tolling Extension. During the
Tolling Extension Owner may continue to develop the Project and obtain
building permits uninterrupted provided, however, that under no
circumstances may Owner exceed the building permit thresholds contained
in the Development Agreement and related Project entitlements, and
further provided that Owner continues to diligently pursue the
satisfaction of the item(s) delayed during the Tolling Extension. The
parties acknowledge that pursuant to the Development Agreement Owner
had no affirmative duty to perform the obligations contained in Section
A.1, Subparagraphs "n" through "t" on the terms and conditions
established in this Amendment.
5. San Elijo Road Financing. The provisions below are hereby inserted
following Section 10 at page 11 of Exhibit "C," entitled "Questhaven/Twin Oaks
Valley Corridor Public Facilities Financing Plan":
11. SAN ELIJO ROAD DIP/SAN ELIJO ROAD EAST FINANCING.
In satisfaction of the "fair share funding mechanism" requirement
contained in Section A.1.h at page 4 of Exhibit "B" of the Development
Agreement, the parties have agreed upon the financing of San Elijo Road
improvements, including the San Elijo Road Dip and San Elijo Road East
(collectively, "San Elijo Road Improvements") as follows:
11.1 City/Agency Contribution. The City and Agency will fund the Actual
Costs, as defined in Exhibit "D", Section 4.3 of the Development
Agreement, of the San Elijo Road Improvements ("City/Agency
Contribution"), less Owner's Contribution, defined below, in a timely
manner so as not to impede or delay development of the Project.
11.2 Owner's Contribution. Owner will contribute an amount not to
exceed eleven million dollars ($11,000,000) towards the costs of the
San Elijo Road Improvements ("Owner's Contribution"), consisting of ten
million dollars ($10,000,000) allocated to physical construction costs,
and one million dollars ($1,000,000) allocated to Owner's Advance,
defined in Section 11.3, below. Owner's Contribution will be funded
through CFD No. 99-01 proceeds ("San Elijo Road CFD Funds") generated
from those portions of the Project undeveloped as of the effective date
of this Amendment, including Project Planning Areas C2 (Subareas a, b
and c), F2, I1, I2, J, K1, K2, O, S, T, V1, and V2. To the extent
Owner's Advance is less than one million dollars ($1,000,000) for any
reason, Owner's Contribution allocated to physical construction funding
may exceed ten million dollars ($10,000,000). In no event will Owner's
Advance and CFD 99-01 proceeds allocated to physical construction
funding collectively exceed eleven million dollars ($11,000,000).
Regardless of the Actual Costs of the San Elijo Road Improvements and
the amount of the City/Agency Contribution required to ensure
completion of the San Elijo Road Improvements, the parties agree that
Owner's Contribution will not exceed $11,000,000.
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11.3 Owner's Advance. Subject to the right of reimbursement from
proceeds of CFD No. 99-01, as part of Owner's Contribution Owner will
advance up to one million dollars ($1,000,000) for the design,
application processing, Resource Agency permitting, and other soft
costs associated with the San Elijo Road Improvements, excluding
construction costs and right of way acquisition ("Owner's Advance").
11.4 Owner's Financial Assurances. In the event a financial consultant
mutually acceptable to the parties determines, in his or her
professional judgment, that CFD No. 99-01 will not generate Owner's
Contribution, Owner will provide financial assurances to the City and
Agency, acceptable to all parties in their reasonable discretion,
demonstrating Owner's ability to fund the shortfall.
11.5 City/Agency Financial Assurances. The City and Agency represent
and warrant the availability of the City/Agency Contribution to ensure
timely completion of the San Elijo Road Improvements.
IN WITNESS WHEREOF, this Amendment has been executed by the City of San
Marcos, acting by and through its City Manager pursuant to Ordinance No. 90-04
(2003MOD), and by the San Marcos Redevelopment Agency acting by and through its
Executive Director pursuant to Resolution No. RDA 2003-341, and by Owner.
Dated this 11th day of February, 2004.
SAN MARCOS REDEVELOPMENT AGENCY THE CITY OF SAN MARCOS
By: /s/ Rick Gittings By: /s/ Rick Gittings
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Rick Gittings, Executive Director Rick Gittings, City Manager
OWNER:
APPROVED AS TO FORM:
SAN MARCOS CITY ATTORNEY SAN ELIJO HILLS DEVELOPMENT
COMPANY, LLC, a
Delaware limited liability
company
By: /s/ Helen Holmes Peak By: /s/ Curt R. Noland
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Helen Holmes Peak, City Attorney Curt R. Noland, Vice President
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