FROM:
Development Services
SUBJECT:
Title
Consideration of Release Agreement (“Release Agreement”) by and between the City of Fontana and HDO4, LLC to release certain property from the land subject to that certain Disposition Agreement entered into by the City of Fontana and HDO4, LLC approved by the City on July 2, 2020 (“Disposition Agreement”) in furtherance of promoting buildout of the Ventana at Duncan Canyon Specific Plan (“Specific Plan”).
End
RECOMMENDATION:
Recommendation
1. Adopt Resolution No. 2024-114, Approving an Agreement Releasing Certain Real Property From the Obligations, Conditions, and Restrictions of that Certain Disposition Agreement Approved by the City Council of the City of Fontana on July 2, 2020, by and between the City of Fontana and HDO4, LLC
2. Determination that the City Council’s actions are exempt from the California Environmental Quality Act (“CEQA”).
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COUNCIL GOALS:
• To concentrate on job creation.
• To pursue business retention, expansion, and attraction.
• To construct high-quality multi-family housing which also serves to address the affordability needs of the community.
• To provide for the development of new infrastructure.
• To improve the aesthetics of the community.
• To promote compact and efficient development in new and existing communities.
DISCUSSION:
On July 2, 2020, the City Council of the City of Fontana adopted Resolution No. 2020-78, approving a Disposition Agreement by and between the City of Fontana and HDO4, LLC (“HDO4”) regarding the disposition and development of real property located along Duncan Canyon Road between Citrus Avenue and the I-15 Freeway (the “Property”) more specifically described on Exhibit A-1 of the Disposition Agreement.
The Disposition Agreement includes certain covenants, obligations, restrictions, and servitudes pertaining to the Property, including obligations placed on the developer of the Property and restrictions on transfer of the Property.
HDO4 is developing a portion of the Property for various residential and commercial uses associated with the Specific Plan. This portion of the Property is described on Exhibit “B” of the proposed Release Agreement as the “Subject Property.” The development of the Specific Plan is anticipated to be a significant economic driver in the City in furtherance of the City’s General Plan goals and Council Objectives outlined above.
Market and economic conditions in the City have changed since the parties approved the Disposition Agreement, such that the Disposition Agreement now imposes several barriers on the development of the Subject Property, which, if kept in place, would materially delay the development thereof.
ANALYSIS:
The proposed Release Agreement would release the Subject Property from restrictions in the Disposition Agreement while maintaining certain preserved claims identified in the Release Agreement. The Disposition Agreement would continue to apply in full to all other portions of the Property. Staff believes that the release reflected in the Release Agreement will remove barriers to development of the Subject Property and promote earlier completion of the Specific Plan, resulting in direct economic and other benefits to and within the City.
In the alternative, the City Council could vote not to approve the Release Agreement, which would result in the Subject Property remaining subject to all terms and conditions of the Disposition Agreement.
ENVIRONMENTAL IMPACT:
As more specifically set forth in the Resolution, approval of the Release Agreement does not constitute approval by the City of any development of the Property or of other activity on the Property that would have a direct or reasonably foreseeable indirect environmental impact pursuant to the California Environmental Quality Act (CEQA). (Pub. Res. Code, § 21065; 14 Cal. Code Regs., §§ 15060(c)(2), 15064(d), & 15378.)
Moreover, in accordance with CEQA, the City Council of the City of Fontana certified the Specific Plan Environmental Impact Report (SCH No. 2005111048) on March 27, 2007 (“Certified EIR”). The Certified EIR adequately addressed the project impacts associated with the adoption of the Specific Plan. The requirements of the Specific Plan run with the Property regardless of ownership and are not impacted by the Disposition Agreement or the release therefrom. Accordingly, no further environmental review is required for the Disposition Agreement or the proposed Release Agreement pursuant to CEQA Guidelines Sections 15162 through 15164. (14 Cal. Code Regs., §§ 15162-15164.)
FISCAL IMPACT:
Approval of the Release Agreement will have no direct fiscal impact on the City.
MOTION:
Approve the staff recommendation.
1. Resolution No. 2024-114, including Release Agreement
2. 2020 Disposition Agreement