FROM:
Planning Department
TITLE:
Title
Master Case (MCN) No. 23-0100R3: Development Agreement (AGR) No. 23-0085R3 - A request for Modifications to the First Amendment and Restatement of Development Agreement No. 23-0085, Applicable to the Acacia Property, located north of Santa Ana Avenue, east of Oleander Avenue, and west of Cypress Avenue
End
RECOMMENDATION:
Based on information in the staff report, staff recommends that the Planning Commission adopt Resolution No. PC 2026-___, and forward a recommendation to the City Council to:
1. Determine that the recommended development agreement modifications are categorically exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15060(c), 15061(b)(3) (the common-sense exemption), and 15378 and Sections No. 3.01, 3.22, and 10.59 of the 2019 Local Guidelines for Implementing CEQA, in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA;
2. Determine that the development agreement modifications together with the underlying project were adequately analyzed in the previously certified Citrus and Oleander Avenue at Santa Ana Avenue Project Environmental Impact Report (EIR) (State Clearinghouse No. 2022110389) and its subsequent Addendum, and pursuant to CEQA Guidelines Section 15162, no subsequent or supplemental EIR is required because there are no substantial changes in the project or its circumstances, and no new information of substantial importance has been identified that would result in any new or more severe significant environmental impacts; and
3. Adopt an Ordinance approving modifications to the First Amendment to and Restatement of Development Agreement No. 23-0085, Applicable to the Acacia Property, located north of Santa Ana Avenue, east of Oleander Avenue, and west of Cypress Avenue (Acacia Development Agreement Amendment).
APPLICANT:
Acacia Real Estate Group, Inc
David B. Pittman
260 Newport Center Drive, Suite No. 100
Newport Beach, CA 92660
LOCATION:
The subject property includes Assessor’s Parcel Number 0255-021-17 (Acacia Property), which is located north of Santa Ana Avenue, east of Oleander Avenue, and west of Cypress Avenue.
REQUEST:
Development Agreement No. 23-0085R3 - a request to further amend and restate the previously approved Development Agreement No. 23-0085 to modify the public benefit obligations and ownership obligations applicable to the Acacia Property and make associated revisions.
PROJECT PLANNER:
DiTanyon Johnson, Planning Manager
BACKGROUND INFORMATION:
In late 2023, the City of Fontana granted entitlements for the Citrus/Oleander Industrial Commerce Center Project through its approvals of a General Plan Amendment (22-004), Zone Change (22-005), Specific Plan Amendment (22-002), Tentative Parcel Maps (TPMs 22-009, -030, and -031), and Design Reviews (22-029, -061, and -062). Concurrent with those approvals, the City Council approved Ordinance No. 1935, which authorized the City to enter into Development Agreement No. 23-0085 (DA) with Acacia Real Estate Group, Inc. (Acacia). The DA gave Acacia vested rights to develop the Citrus/Oleander Industrial Commerce Center Project consistent with the entitlements, and in exchange obliged Acacia to provide specified public benefit fees to the City.
On October 21, 2025, the Planning Commission considered and approved Design Review 22-062-R2, to reduce the size of one of the industrial commerce center buildings (originally approved in Design Review 22-062) from 193,462 square feet to approximately 83,632 square feet, and to reduce the size of that property from 8.7 acres to 4.6 acres. The resolution approving Design Review 22-062-R2 required two separate amendments to the DA - one for the Acacia Property and one for the adjoining property covered by the DA (North Palisades Property). Those separate amendments were approved by the City Council on May 26, 2026.
The Acacia DA Amendment included the following two provisions that the project applicant now seeks to further revise. First, the Acacia DA Amendment required that Acacia be the fee owner of the Acacia Property before the Acacia DA Amendment can be executed and recorded. Acacia seeks to change that requirement, so that (i) the City will be mandated to execute the Acacia DA Amendment within 10 business days after City Council approval, and (ii) the Acacia DA Amendment be recorded after Acacia, or any fee simple owner, submits reasonable proof of ownership of the Acacia Property to the City. Acacia reports that this modification is necessary to allow flexibility in the financing and ownership structure for the Acacia Property.
Second, the prior version of the Acacia DA Amendment included a commitment by Acacia to advance $618,322 in public benefit payments to the City if the final certificate of occupancy for the Acacia Property is issued before the first building permit for the North Palisades Property is issued. Acacia seeks removal of the fee advance and reports that unless the requirement is removed, the Acacia Property cannot be sold or included in a joint venture.
Staff has evaluated Acacia’s requests and recommends acceptance of both modifications as necessary to facilitate the implementation of the Acacia project.
PROJECT DESCRIPTION:
The item currently before the Commission is a modification to the Acacia DA Amendment. Land use approvals and entitlements for the underlying property have been granted through prior Planning Commission and City Council actions.
ANALYSIS:
Development Agreements are voluntary, negotiated contracts between cities and property developers. They vest development rights by freezing existing land-use regulations, ensuring the project can proceed under rules in place at approval. In exchange for vested rights, property developers often provide public benefits through the payment of fees or the provision of public improvements.
When the City and Acacia entered into the DA in December 2023, the Citrus/Oleander Industrial Commerce Center Project was envisioned as a single coordinated development effort led by a single developer. Circumstances have changed, and it is now more likely that the project will proceed through multiple ownership groups. To accommodate this change while preserving most of the DA benefits, the City authorized and directed amendments to the DA as approved on May 26, 2026.
Subsequent to those approvals, Acacia Real Estate Group, Inc. identified the need for two further modifications to the Acacia DA. As outlined above, one modification creates flexibility with regard to the ownership structure and the timing of demonstrated ownership of the Acacia Property. This revision is intended to ensure that the City is fully committed to the DA Amendment (and the associated vested rights) before the ultimate owner of the property commits to purchase the land and finance development consistent with the City-approved entitlements. The second modification is based on Acacia’s representation that the land cannot be sold or included in a joint venture if, in addition to its public benefit commitments, it must advance $618,322 in public benefit fees associated with the North Palisades DA Amendment. Staff has evaluated Acacia’s claims and is satisfied that this amendment is necessary if the development on the Acacia Property is to move forward successfully.
Based on the foregoing, City staff recommends that the Planning Commission recommend that the City Council approve the modifications to the Acacia DA.
MOTION:
Approve staff’s recommendation
ATTACHMENTS:
Attachment No. 1 - Vicinity Map
Attachment No. 2 - Planning Commission Resolution
Attachment No. 3 - Development Agreement
Attachment No. 4 - Notice of Exemption
Attachment No. 5 - Public Hearing Notice