FROM:
Development Services
SUBJECT:
First Amendment to Disposition and Development Agreement (Arrow & Nuevo) with New Legacy Development Corp.
RECOMMENDATION:
1. Approve a First Amendment to Disposition and Development Agreement (Arrow & Nuevo) with New Legacy Development Corp.
2. Authorize the City Manager to execute any documents necessary or appropriate to execute the First Amendment to Disposition and Development Agreement (Arrow & Nuevo); and
3. Determination that the City Council’s actions are exempt from the California Environmental Quality Act (“CEQA”).
COUNCIL GOALS:
• To promote economic development by concentrating on job creation.
• To promote economic development by pursuing business retention, expansion, and attraction.
• To invest in the City’s infrastructure (streets, sewers, parks, etc.) by providing for the development of new infrastructure.
• To promote affordable housing by construction of high-quality multi-family housing which also serves to address the affordability needs of this community.
BACKGROUND:
On July 28, 2020, the City Council of the City of Fontana adopted Resolution No. 2020-16, approving a Disposition and Development Agreement (Arrow & Nuevo) (“Agreement”) between the City of Fontana (“City”) and New Legacy Development Corp.(“New Legacy”) regarding the disposition and development of real property located at Arrow Boulevard and Nuevo Avenue (the “Property”).
New Legacy is currently in default of several provisions of the Agreement, including provisions related to the timeline for pre-construction and construction on the Property.
New Legacy has requested a First Amendment to the Agreement to allow for additional time for pre-construction and construction on the Property and to revise the provisions related to payment in lieu of sales tax for the proposed ground floor restaurant.
ANALYSIS:
The Development Services Department and New Legacy have negotiated a First Amendment to the Agreement, which is attached as Exhibit A. The proposed amendment includes:
1. New Legacy shall pay to City $20,000 in lieu of sales tax for the period from January 1, 2023, through November 14, 2025.
2. New Legacy shall obtain City approval of building plans by October 26, 2023.
3. New Legacy shall commence site work by November 30, 2023.
4. New Legacy shall commence vertical construction by February 2, 2024.
5. New Legacy shall complete construction and receive Certificates of Occupancy for all residential and commercial units by November 14, 2025.
FISCAL IMPACT:
Per the original agreement, effective October 1, 2021, the developer was to pay the City $2,000 per quarter in the event retail sales had not commenced. As proposed, the amendment requires the developer to pay the City $2,000 per quarter commencing January 1, 2023, thru November 14, 2025, thus forgiving five quarters of payments in lieu of sales tax or $10,000, due to the impact COVID would have had on those quarters. The fiscal impact associated with the approval of this item is $20,000 of payments in lieu of sales tax by the developer to the City.
ENVIRONMENTAL IMPACT:
On January 15, 2019, the Fontana Planning Commission determined that the project is categorically exempt from the CEQA and, therefore, no further action is required.
MOTION:
A motion to adopt staff’s recommendation