FROM:
Planning Department
SUBJECT:
Title
Amendment No. 1 to a Settlement Agreement between the City of Fontana and Prime Point Property Corp.
End
RECOMMENDATION:
Recommendation
Approve the amendment to a 2019 Settlement Agreement between the City of Fontana and Prime Point Property Corp regarding the use of properties located at 15252, 15244, 15170, 15132 Valley Boulevard, and 9987 Fontana Avenue (APNs: 0235-072-09, -10, -11, -12, and 0235-063-15).
End
COUNCIL GOALS:
• Promote economic development by being business friendly at all levels and striving to constantly improve the city's competitiveness.
• Create and maintain a dynamic team by communicating Goals and Objectives to all commissions and employees.
• Enhance the local environment for future generations and create a healthy economic and environmental future by creating neighborhoods that are attractive, safe and convenient for walkers and bicyclists.
DISCUSSION:
On June 19, 1991, the subject properties were annexed into the City of Fontana. There was previously a dispute regarding grandfathered uses on the properties between the City, the previous property owner, and the current property owner. At the time of annexation, the properties bore different addresses, which changed in recent years due to lot line adjustments and other actions by the property owner.
On September 23, 2008, the City Council approved a Settlement Agreement with the previous property owner, Cole & Cole, LLC for a seven (7)-year term so that the property owner could bring the uses and property into compliance with the City’s land use regulations or the uses would terminate. The Settlement Agreement was recorded on November 13, 2008 (Doc#: 2008-0496496) and would have expired on November 10, 2015.
Prior to the expiration date, Cole & Cole, LLC requested a two (2)-year time extension citing their difficulty in marketing and developing the property due to the “great recession”. The Council approved a one (1) year extension on March 24, 2015 with a new expiration date of November 10, 2016. The Settlement Agreement extension was recorded on April 3, 2015 (Doc#: 201-0131852).
On or about June 2016, the City was notified that Prime Point Property Corp was the new owner of the subject properties. The new owner’s representative, Jesse Harb, intended to develop the properties at that time. The City Council was amenable to allowing the new owner to extend the Settlement Agreement so that the developer could work with City staff to bring the uses and property into compliance with the City’s regulations. On September 13, 2016, the City Council extended the Settlement Agreement with the new owner, Prime Point Property Corp, for a one (1) year term to November 10, 2017. The Settlement Agreement was recorded on October 3, 2016 (Doc#: 2016-0411106).
On October 27, 2017, Prime Point Property Corp. submitted an entitlement application for the development of a truck stop/industrial park. However, due to non-performance of the stated milestones outlined in the prior extension agreement, the City declined to process an additional extension. Thereafter, on November 30, 2017, the City Attorney’s office sent a “cease and desist” letter to owner .
On March 2, 2018, the City received a letter from the owner requesting a five (5) year extension to re-market the property under a new concept (see attached). The City denied this request.
On July 5, 2018, the owner applied for a new entitlement package for a proposed truck sales and industrial park development.
On September 5, 2018, the City Attorney’s office on behalf of the City, sent a “Notice to Cease and Desist” to each of the various businesses that were illegally operating on the Prime Point properties due to the owner’s failure to take the necessary steps to obtain all the necessary City approvals and entitlements to allow said businesses to lawfully operate on the property.
On September 24, 2018, the representative of Prime Point Property Corp submitted an estimated timeline for completion of the necessary land use entitlements for a truck sales, repair and industrial park use. The property timeline proposed three (3) phases: Phase 1 to be completed by May 31, 2021, Phase 2 to be completed by December 31, 2022 and Phase 3 to be (the final phase) to be completed by May 31, 2024.
On January 24, 2019, the City and Prime Point Property Corp. entered into a new Settlement Agreement (the “2019 Settlement Agreement”) related to the development of the properties which provided Prime Point Corp. until December 31, 2021 to seek entitlements for the property consistent with a development schedule included therein.
On December 17, 2019, the planning commission approved Master Case No. 18-000069, which includes one design review approval for the establishment of two (2) industrial parks within 2 parcels (0235-072-12 and 0235-063-15) and three conditional use permits for three (3) truck sales sites on 3 parcels (0235-072-09, -10, and -11).
Phase 1 was completed as of December 2024. Phase 2 was under construction at that time, however, the conditional use permits expired. Prime Point Property Corporation requested to make minor site plan changes to Phase 2 and Phase 1. Prime Point Property Corp applied for the necessary entitlements and on May 20, 2025, the Planning Commission approved Prime Point Property Corp’s request.
Phase 2 is still under construction and Phase 3 is expected to be entitled and complete construction by January 1, 2028.
Proposed Amendment
Since the 2019 Settlement Agreement was recorded, Prime Point Property Corp has completed Phase 1 of the project. On February 26, 2026 the City received a request from Prime Point Property Corp to remove Phase 1, consisting of 15252 and 15244 Valley Boulevard (APNs: 0235-072-11, and -12), from the Settlement Agreement as construction for those properties were completed as of December 2024.
The proposed Amendment to the Settlement Agreement would:
1. Clarify the new addresses for the property subject to the 2019 Settlement Agreement, since the addresses have changed in recent years;
2. Release the Phase 1 completed properties from the scope of the agreement;
3. Require the timely completion and entitlement of Phases 2 and 3 of the project by January 31 2027 and January 31 2028 respectively, and provide for liquidated damages in the event work is not timely completed; and
4. Authorize the City Manager or designee to approve other similar releases of properties subject to the agreement upon satisfactory completion of development and entitlement, and approve other amendments which do not impact material deal terms.
Staff is in support of the Settlement Agreement amendment due to the developer’s intention to bring the remaining properties into compliance, and the additional clarification provided by the amendment.
FISCAL IMPACT:
None
MOTION:
Approve staff recommendation.