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Home My WebLink AboutAGENDA REPORT 2021 1006 CCSA REG ITEM 09ACITY OF MOORPARK,  CALIFORNIA City Council Meeting of October 6, 2021 ACTION UNANIMOUS CONSENSUS TO APPOINT MAYOR PARVIN AND COUNCILMEMBER CASTRO TO SERVE ON THE DALY GROUP, INC. AD HOC COMMITTEE. (COUNCILMEMBER GROFF ABSENT; COUNCILMEMBER ENEGREN ABSTAINED). BY B. Garza. A. Consider the Establishment of an Ad Hoc Committee to Re-Negotiate the Terms of the Disposition and Development Agreement between the City and the Daly Group, Inc. for the High Street Depot Project. Staff Recommendation: Appoint two members of the City Council to serve on the Daly Group, Inc. subcommittee to consider the terms of the existing development agreement and review proposed changes related to the Residential Planned Development 2018-01 that do not affect the current density or any substantive elements impacting the approved project. (Staff: Troy Brown, City Manager) Item: 9.A. MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: Troy Brown, City Manager DATE: 10/06/2021 Regular Meeting SUBJECT: Consider the Establishment of an Ad Hoc Committee to Re-Negotiate the Terms of the Disposition and Development Agreement between the City and the Daly Group, Inc. for the High Street Depot Project BACKGROUND On October 21, 2020, the City Council adopted Ordinance No. 484 approving a Development Agreement (No. 2018-01) and on October 7, 2020, Resolution Nos. 2020- 3949 and 3950 were adopted approving a Disposition and Development Agreement (DDA), a Mitigated Negative Declaration, and a Residential Planned Development (RPD) Permit (No. 2018-01) for a mixed-use development consisting of 79 residential units, 13,628 square feet of commercial and associated land improvements located at 226 High Street in the Downtown Specific Plan on an application of Daly Group, Inc. Since approval of the project, completion of the terms outlined in the Disposition and Development Agreement has been in effect. Due diligence has occurred by the developer including soils testing and implementation of certain mitigation measures. A property appraisal has been completed setting the price of the land and the developer has completed their construction plans. The final deliverable before the property transfers to the developer is proof of construction financing to the satisfaction of the City Manager. Certain terms of the DDA are creating a hinderance to the developer in obtaining construction financing. A finding resulting from due diligence identifies soils remediation and the need to remove certain hazardous materials as well as demolish existing structures on the site as a prerequisite to construction financing. The Daly Group, Inc. has provided documentation from Berkadia - their prospective lender – noting that prior to receiving financing, a No Final Action on soils remediation is needed from the Ventura County Environmental Health. The developer seeks to discuss and renegotiate certain elements of the DDA to provide relief for funding requirements which have arisen. Consideration of such requests have no material impacts on architectural elements, density, or other elements of the project approvals. Additionally, the applicant has completed a Phase I environmental analysis of the site which found high concentrations of lead on the property. Remediation of the site is Item: 9.A. 30 Honorable City Council 10/06/2021 Regular Meeting Page 2 projected to add significant costs to the overall projected construction costs and the applicant is seeking solutions to working with the City to participate in the costs to remove contaminants from the site. Although estimations for soil remediation were included in the original construction estimates, the amount of contamination on the site exceeds projected costs due to a higher concentration of hazardous materials present. DISCUSSION To date, the High Street Depot project has met all required elements of performance and is nearing the final stage of seeking project funding. In August 2021, the applicant approached the City to explore pathways toward receiving construction funding for the project. The applicant has identified a potential pathway forward that enables the project to be constructed as proposed in the approved Residential Planned Development. None of the solutions proposed by the applicant will involve increasing or decreasing density, eliminating any fees, or present substantive changes to the project as originally proposed. In addition, the applicant completed a Phase I environmental report which identified potential contamination on the site. Following the Phase I, a soil and gas assessment (SGA) was conducted on the property. The findings of the SGA conclusively found the presence of lead prominent throughout the site. Remediation costs for the lead are estimated to be approximately $800,000 and the applicant is seeking to have a discussion with the City on potential solutions to mitigate this unexpected expense. Staff is requesting that the City Council form a subcommittee comprised of two members of the City Council to work with staff and the applicant on renegotiating certain terms of the Disposition and Development Agreement to facilitate the disposition of the property to allow for financing and ultimate development of the project. FISCAL IMPACT There is no financial impact associated with formation of the City Council subcommittee. COUNCIL GOAL COMPLIANCE This action is consistent with City Council Strategy 3 (Economic Development), Goal 3 (3.3): “Place an Emphasis on Economic Development with a Focus on Historic High Street to Enhance a Destination and Sense of Community.” STAFF RECOMMENDATION Appoint two members of the City Council to serve on the Daly Group, Inc. subcommittee to consider the terms of the existing development agreement and review proposed changes related to the Residential Planned Development 2018-01 that do not affect the current density or any substantive elements impacting the approved project. Attachment: September 24, 2021, Correspondence from George Spadier, Senior Director, Berkadia 31 11111 Santa Monica Boulevard Suite 400, Los Angeles, CA 90025 | T: +1 (310) 209-3228 | M: +1 (818) 987-5612 9/24/2021 Troy Brown, City Manager City of Moorpark 799 Moorpark Ave. Moorpark, CA 93021 Re: 192-226 High Street, Moorpark, CA Dear Mr. Brown: I’ve had the pleasure of working with Vince and his team over the last few years. Berkadia placed Vince’s most recent construction loan (in Ventura) for which we had a lot of interest. The project is looking great and progressing nicely. We are looking forward to financing the construction of the High Street development, 192-226 High Street in Moorpark. I am very familiar with this location, and I think the project will be a catalyst for new development on High Street. Given the Daly Group’s experience, skill set, and financial resources I am confident that we will have a financing solution for this development. Having said that, we will need the environmental situation to be resolved before we can procure formal LOI’s (Letters of Interest) and/or Applications/Commitments. This is an exciting project and I believe our financing sources will see that, but again, an NFA letter will need to be issued first. Thanks, and please let me know if you have any questions. Sincerely, George Spadier Senior Director CA BRE #01825949 ATTACHMENT 32