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Ordinance 2004-13 ORDINANCE NO. 2004-13 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GILROY APPROVING AN AMENDMENT TO THE DEVELOPMENT AGREEMENT BETWEEN THE CITY OF GILROY AND COUNTRY ESTATES VENTURE DATED JULY 17, 1989. WHEREAS, the City of Gilroy ("City") and Country Estates Venture, a joint venture between Pyramid Associates, a General Partnership, and DJ. Partnership, ("Country Estates") are currently parties to a Development Agreement entitled "Development Agreement by and between the City of Gilroy and South County Venture Relative to the Development Known As Country Estates" dated July 17, 1989 ("Development Agreement"); and WHEREAS, the City of Gilroy's Resolution No. 2002-61 sets forth the procedures for the processing of a development agreement or an amendment thereto pursuant to California Government Code sections 65864 through 65869.5 ("State Law"), and WHEREAS, pursuant to Section I of the Development Agreement, the term of the Development Agreement will expire on or about July 17, 2004; and WHEREAS, Country Estates has requested that the City extend certain reimbursements beyond the term of the Development Agreement for fifteen (15) years; and WHEREAS, the City has determined that an amendment to the Development Agreement ("Amendment") is required to accommodate Country Estates' request; and WHEREAS Government Code section 65865.2 provides that a development agreement may include terms and conditions relating to financing of necessary public facilities and subsequent reimbursement over time. THE CITY COUNCIL OF THE CITY OF GILROY DOES HEREBY ORDAIN AS FOLLOWS: WH\627659.3 01-062404-04706084 -1- Ordinance No. 2004-l3 SECTION I RECITALS A. Notice of the City's intention to amend the Development Agreement has been given as provided by State Law and pursuant to City Resolution No. 2002-61. B. Pursuant to the California Environmental Quality Act ("CEQA"), the City prepared an Environmental Impact Report ("EIR") for the Project, which EIR was certified by the City Council on March 1, 1982, pursuant to CEQA by adoption of Resolution No. 82-26. This amendment to the Development Agreement relates only to the reimbursement of certain fees, and does not include any action affecting the environment. C. A public hearing on the proposed Development Agreement amendment was held before the Planning Commission on July 1,2004, for which public notice was given as provided by law and at which all persons desiring to be heard were given an opportunity to be heard, and following the hearings, the Planning Commission recommended approval of it. D. A public hearing on the proposed Development Agreement amendment was held before the City Council on July 6, 2004, for which public notice was given as provided by law, and at which all persons desiring to be heard were given an opportunity to be heard. The City Council has duly considered all testimony received, both oral and written. SECTION 11. FINDINGS AND DETERMINATIONS Therefore, on the basis of the foregoing Recitals and the specific conclusions set forth below, the City Council finds and determines that: 1. This Amendment is consistent with the objectives, policies, general land uses and programs specified and contained in the City's General Plan. IJH1627659.3 01-062404-04706084 -2- Ordinance No. 2004-13 2. The City has taken all steps required by State law III order to approve this Amendment. SECTION III. APPROVAL The City Council hereby approves entering into the Amendment and authorizes the Mayor to execute the Amendment between the City of Gilroy and Country Estates, a copy of which is attached hereto as Exhibit "A" SECTION IV. EFFECTIVE DATE This ordinance shall take effect and be in full force thirty (30) days from and after the date of its adoption, except that the extension for fifteen (15) years of those certain provisions of the Development Agreement for reimbursement of certain fees as set forth in the Amendment shall become effective on July 17, 2004. PASSED AND ADOPTED this 2nd day of August, 2004 by the following vote: AYES: COUNCILMEMBERS: CORREA, DILLON, GARTMAN, MORALES, VALIQUETTE, VELASCO and PINHEIRO NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ~~ Rhonda Pellin, City Clerk IJH1627659.3 01-062404-04706084 -3- Ordinance No. 2004-13 EXHIBIT A AMENDMENT TO THE DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF GILROY AND SOUTH COUNTY VENTURE RELATIVE TO THE DEVELOPMENT KNOWN AS COUNTRY ESTATES DATED JULY 17, 1989 This amendment to the Development Agreement ("Amendment") shall be effective on July 17, 2004, ("Effective Date") by and between the City of Gilroy, California, a Municipal Corporation of the State of California ("City") and Country Estates Venture ("Country Estates"), a joint venture between Pyramid Associates, a General Partnership, and D.l Partnership. RECIT ALS A. City and Country Estates are currently parties to a Development Agreement entitled "Development Agreement by and between the City of Gilroy and South County Venture Relative to the Development Known As Country Estates" dated July 17, 1989 ("Development Agreement"), and effective on or about that same date, which shall terminate by its own terms on July 17, 2004. B. Country Estates has requested that the City extend certain reimbursements beyond the term of the Development Agreement for an additional fifteen (15) years, or until July 17, 2019. C. The City has determined that an amendment to the Development Agreement (hereinafter "Amendment") is required to accommodate Country Estates' request. D. Notice of the City's intention to amend the Development Agreement has been given pursuant to Government Code Section 65867. E. The Development Agreement provides that as a condition of approval a Second Zone II Booster Pump Station will be constructed and allow Country Estates to be partially reimbursed for its estimated costs for the reimbursable portion of costs for the Sewer Trunk and the Water production facilities. Reimbursements shall be made over a fifteen (15) year period. F. The Development Agreement further provides that the remaining balance for the Sewer Trunk Main shall be funded by Country Estates or through a separate agreement among the benefiting property owners. The remaining balance shall be eligible for reimbursement during the fifteen (15) year term of the Development Agreement. Each participant in the remaining balance shall receive a reimbursement based on their percentage of contribution. Fees eligible for reimbursement shall be listed in the City of Gilroy Comprehensive Fees Schedule and adjusted annually for inflation. The City will collect said reimbursable fees for each new building permit that benefits :from Zone II or III water pressure system of the Sewer Trunk Main. G. Country Estates has requested that the City extend the period of time for reimbursement of a portion of the costs for the Second Zone II Booster Pump Station described above for an additional fifteen (15) years. This Amendment to the Development Agreement is to \.IH\6?710R 4 accommodate that request, which will extend the reimbursement period for fifteen (15) years from July 17, 2004. Said extension shall be specifically applied to the reimbursement of a portion of the costs for the Second Zone II Booster Pump Station only, and shall not extend in any manner any other provisions of the Development Agreement unless otherwise stated below, which Agreement shall expire and be deemed terminated and of no further force and effect on July 17, 2004. H. Government Code section 65865.2 provides that a development agreement may include terms and conditions relating to financing of necessary public facilities and subsequent reimbursement over time. NOW, THEREFORE, in consideration of the factual premises and the covenants and conditions set forth in this Amendment, City and County Estates hereby agree as follows: 1. That SECTION 1 of the Development Agreement, is hereby repealed in its entirety and shall be replaced by a new SECTION 1 to read as follows: "SECTION I. General Provisions. Term. For only that certain provision of the Development Agreement in Section 4 B, concerning the reimbursement of a portion of the costs for the Second Zone II Booster Pump Station, the term of the Development Agreement shall be extended for fifteen (15) years, or until July 17, 2019. Said extension shall not extend in any manner any other provisions of the Development Agreement, which shall expire on July 17, 2004, and shall be deemed terminated and of no further force and effect; provided, however, such termination shall not effect any vested right or any duty or obligation of Country Estates arising from City entitlements previously granted on the project site." 2. That the Development Agreement be amended by adding a new SECTION 11 and shall read as follows: "SECTION 11. Reimbursement for Section Zone II Booster Station. The conditions of approval require that a Second Zone II Booster Pump Station be constructed and allow Country Estates to be partially reimbursed for a portion of costs for the Second Zone II Booster Pump Station. The reimbursement calculation for the Second Zone II Booster Pump Station is set forth in Exhibit "A" attached hereto and incorporated by this reference. Reimbursements for the Second Zone II Booster Pump Station shall be made over a fifteen (15) year period. Fees eligible for reimbursement are those applicable that are listed in the City of 1.1H\fi?710R 4 "l Gilroy Comprehensive Fee Schedule and adjusted annually for inflation. The City will collect in its normal course of business said reimbursable fees from each new building permit that benefits from the Second Zone II Booster Pump Station as identified in the "Northwest Quadrant Second Zone 2 Pump Station Lot Identification" map dated June 2004, attached hereto as Exhibit "B" and incorporated by the reference, and will remit to Country Estates its portion of said fees within a reasonable period of time following City's actual receipt of said fees. The maximum reimbursement during the fifteen (15) year term of this Amendment shall be limited to the 456 units as depicted in Exhibit "B. " City shall have no obligation to reimburse Country Estates for fees that it has not actually received, nor to reimburse fees that are received under protest pursuant to State law, nor to reimburse fees that are subject or involved in any claim against the City." 2. That SECTION 8 of the Development Agreement, is hereby repealed in its entirety and shall be replaced by a new SECTION 8 to read as follows: "SECTION 8. Defense and Indemnity of Legal Action. In the event of a legal action by a third party challenging the validity, interpretation, or effectiveness of all or any part of this Amendment or contesting any alleged actions or omissions of the City relating to, or forming part of, the enactment of the ordinance adopting this Amendment, if City elects to defend such action, or if Country Estate requests that the City defend such action within five (5) days after City notifies Country Estates of such legal action, City shall have the right to submit a demand for a deposit, in an amount to be determined by City, toward costs to be incurred by City in connection with such action, including, without limitation, staff time and all court costs, litigation expenses, and attorneys' fees (hereinafter "Litigation Costs"). Said deposit, as well as reimbursement for all Litigation Costs incurred by City in connection with such action, shall be paid by Country Estates within ten (10) days after written demand. City shall have the right from time to time to reasonably estimate the amount it expects to incur in connection with such action, and to demand from Country Estates an additional deposit for such amounts, which additional deposit shall be paid to the City within ten (10) days after written demand. Upon the final conclusion of such action, any unused deposit provided by Country Estates shall be returned to Country Estates. Nothing contained herein shall be construed to limit the discretion of City, in the interest of the public welfare, to settle, defend or appeal, or to decline settlement or to terminate or forego \,IH\6?710R 4 " defense or appeal of, such legal action. In no event shall City be required to continue litigation, although City shall have the right to do so, in the event Country Estates fails to pay any amounts owing to the City pursuant to this Section within the time required by this Section. In no event shall City have any obligation or liability to Country Estates in connection with City's defense of such action, including without limitation the outcome thereof, or in the event the City elects not to defend such action or terminates said defense. 4. The Parties acknowledge that this Section 8 constitutes a separate agreement entered into coricurrently with this Amendment, and that if any other provision of this Amendment or the Amendment as a whole is invalidated, rendered null or set aside by a court of competent jurisdiction as a result of any such litigation or other proceeding, the Parties shall nevertheless be bound by the terms of this Section 8. which shall survive such invalidation, nullification or setting aside by such court. In case of a conflict in the terms of the Development Agreement and this Amendment, the provisions of this Amendment shall control. The parties acknowledge and accept the terms of this Amendment as evidenced by the following signatures of their duly authorized representatives. 5. Dated: CITY OF Grr...ROY AI Pinheiro, Mayor Approved as to form: COUNTRY ESTATES Linda Call on, City Attorney Attest: Rhonda Pellin, City Clerk by Its Dated: Dated: \.IH\6?71OR 4 A I, RHONDA PELLIN, City Clerk of the City of Gilroy, do hereby certify that the attached Ordinance No. 2004-13 is an original ordinance, or a true and correct copy of a city ordinance, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council held on the 2nd day of August, 2004, at which meeting a quorum was present, and has been published or posted pursuant to law. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this 19th day of August, 2004. ~ .~ City Clerk of the City of Gilroy , (Seal)