CITY COUNCIL AGENDA ITEM NO.
Meeting Date: March 26, 2002
Subject/Title: Approve Standard Payment Plan Agreement
Submitted by: Howard Sword, Director of Economic Development
Approved by: John Stevenson, City Manager
Authorize the City Manager to execute the attached Standard Payment Plan Agreement between the City of Brentwood and Commonwealth Development for four buildings located on 550 Valdry Court, Building A, B, C, and D, Brentwood, CA 94513 (APN 010-160-028).
On February 8, 2000, City Council passed Resolution No. 2016 which established a policy and approved a Standard Form of Agreement for payment of development fees through property tax special assessments for new commercial, office and industrial developments.
The following Development Fees for new commercial, industrial and/or office projects are calculated based on the actual building square footage and are collected at the time building permits are issued. These fees are controlled by the City for the development of internal infrastructure systems.
1. Water Storage and Transmission
2. Water Treatment and Supply
3. Wastewater Treatment
4. Wastewater Collection
6. Community Facilities
The attached Standard Agreement allows eligible commercial, industrial and office development to pay 10% of the development fees at the time of building permit issuance. The remaining 90% of the fees plus an interest charge of 3%, a City Administration charge of 1% and an Administration charge by the County Assessor’s Office would be collected as a special assessment, payable as part of the property tax bill over the following nine-year period.
Attachments: Exhibit 1 – Development Fees
Exhibit 2 – Legal Description
None. City fees will be collected over a nine-year period. The City Budget assumes no revenue from Commercial/Industrial Projects.
Agreement – Commonwealth Development
550 Valdry Court, Buildings A, B, C and D, Brentwood, CA 94513
[Attach cover sheet for recording this agreement with County Recorder]
CITY OF BRENTWOOD
STANDARD COMMERCIAL, OFFICE AND INDUSTRIAL DEVELOPMENT FEE PAYMENT AGREEMENT
This Agreement is entered into as of the 26th day of March 2002 by and between the City of Brentwood (“City”) and Commonwealth Development. (“Owner”), the Owner of Property located on 550 Valdry Court, Buildings A, B, C, and D in the City of Brentwood (the “Property”). The Property is further described by A.P.N. 010-160-028, and its legal description is attached hereto as Exhibit 2.
WHEREAS, the Property is permitted under the City’s laws, or has obtained entitlements from the City, to develop for new commercial, office or industrial uses and the Owner desires to develop a project consistent with such uses (“project”); and
WHEREAS, the Property is obligated under the City’s laws to pay development fees to offset the impacts of the project on the community’s system of infrastructure such as roads, water facilities and sewer facilities; and
WHEREAS, the Owner accepts this obligation and desires to enter into this agreement whereby a portion of the development fees will be payable immediately by the Owner and the City will allow the Owner to pay the balance of the fees over time. Payment over time will be accomplished by imposing the balance as a special assessment upon the secured real property tax roll, creating a lien to secure payment, and collecting the balance in the same manner as ordinary municipal taxes are collected; and
WHEREAS, the Owner acknowledges his obligation to pay the fees in full, and through this agreement, consents to making part of such obligation a special assessment against the Property, with a lien imposed against the Property to further secure collection. This Agreement shall be recorded in the Contra Costa County Recorder’s Office to provide record notice of the special assessment, lien and other provisions herein.
WHEREAS, this agreement is authorized by, and shall be interpreted consistently with, the City’s standard form agreement adopted by Resolution No. 2016 adopted on February 8, 2000.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS OF THE PARTIES HERETO, THE PARTIES AGREE AS FOLLOWS:
1. DEVELOPMENT FEE OBLIGATION.
1.1 Owner is obligated to pay to City the amount of $334,643.99 in developer impact fees. Provided the pre-conditions set forth in Section 2 are met, Owner and City shall be bound to the payment plan set forth in Section 3, as is summarized in Exhibit 1. In all other respects, Owner shall pay such developer fees in accordance with the City’s laws and City’s conditions placed upon the project.
2.1 As a precondition to City’s obligations hereunder, Owner shall have obtained all necessary permits and entitlements needed for the project, that is the office, commercial or industrial development of the Property, with the exception of building permits and certificates of occupancy. As a further precondition, Developer shall submit one or more applications for building permits in a manner satisfactory to the City.
2.2 The Owner shall deliver sufficient proof of ownership of the Property to the City, with a title report showing all right, title and interests held in the Property and encumbrances against the Property.
2.3 The Owner shall be current on all other financial obligations, which may be owing to City and shall be current in the payment of all property taxes for the Property. In addition, the Owner shall not have or allow encumbrances against the Property which are senior to the obligations to pay development fees set forth in this agreement (for example, federal or state tax liens). At the request of the City, the Owner shall submit proof to the City of compliance with this Section 2.3.
3. DEVELOPMENT FEE PAYMENT PLAN.
3.1 The Owner shall pay to the City, concurrently with the issuance of the first building permit, an amount equal to 10% of the development fee obligation set forth in Section 1.1. This amount is $33,464.40 which is also shown on the summary sheet attached hereto as Exhibit 1. The remaining 90% of the fees plus an annual interest charge of 3% and an annual City Administration charge of 1% shall be compounded on the outstanding principal. An administration charge by the County Assessor’s Office shall be collected annually as a special assessment. The annual interest charge and the special assessment shall be payable as part of the property tax bill over the following nine-year period.
3.2 The City and Owner agree that the remaining development fee balance is denominated a special assessment and shall be placed by City on the Contra Costa County Secured Real Property Tax Roll as a special assessment to be imposed, collected and enforced in the same manner as ordinary municipal and other taxes. Including the amounts set forth in Sections 3.3 and 3.4, the total amount of this special assessment is $301,179.59. This total amount is subject to change if additional sums are incurred pursuant to Sections 3.3 and 3.4. This total amount shall be apportioned to be fully paid by Owner in nine (9) years, with each pro rata payment due at the same time as Owner pays ordinary municipal and other taxes and assessments, twice each year. The schedule for each pro rata payment of the special assessment is shown on Exhibit 1. Notwithstanding the schedule, Owner shall pay the special assessment and other property taxes on time and in the manner required by the County Auditor-Controller.
3.3 The Owner agrees to pay any and all costs, fees, penalties, late charges or interest imposed by the County Auditor-Controller and the costs of recordation of this agreement imposed by the County Recorder’s Office.
3.4 The Owner agrees to pay the City’s administrative and or legal costs in preparing, administering and enforcing this agreement, which amounts may be imposed upon the issuance of each building permit or placed as additional amounts to the special assessment.
3.5 A lien for the amounts provided for in this agreement is hereby established upon the Property.
3.6 All amounts provided for in this agreement shall be fully paid to the City within nine (9) years of the effective date of this agreement, as set forth above.
3.7 Any and all amounts due hereunder shall be immediately due and payable, at City’s election, upon the sale of the Property. This due on sale clause shall not inhibit the City’s choice of alternate remedies available by law.
3.8 In the event Owner fails to pay any amount owing hereunder, the City and/or the County on its own or the City’s behalf, has the right to exercise all rights and remedies and to maintain any action in law or equity to enforce the terms and covenants of this agreement. Without limiting the foregoing, the City shall have the right to proceed with foreclosure of the lien against the Property and the sale of the Property on execution as in other cases of the sale of real Property for all delinquent amounts, including interest, costs, attorneys’ fees and costs of the foreclosure proceedings.
3.9 The Owner and all persons claiming a right, title or interest to the Property shall be forever barred from any equity of redemption in and to the Property if the Property is sold as a result of foreclosure proceedings.
4.1 The covenants made in this agreement, particularly the special assessment and lien, shall be covenants which run with the land and shall bind all successors in interest to Owner, if applicable. This section does not limit the effect of Section 3.7, nor the effect of Section 4.2.
4.2 This agreement shall not be assigned without the express written consent of the City. It is understood that the personal financial history of Owner and promises made by Owner in this agreement are some of the inducements for City to enter into this agreement. There are no third party beneficiaries to this agreement, except for the County of Contra Costa.
4.3 If any action or proceeding is instituted by either party to interpret, challenge, enforce or which relates in any other way to this agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and costs in addition to any other relief adjudged by the court.
4.4 In the event that an action or proceeding shall be brought by either party hereunder, the parties agree that venue of such action shall be held exclusively in a state court in the County of Contra Costa, California. This agreement shall be interpreted in accordance with, and governed by, the laws of the State of California.
4.5 If any provision of this agreement is for any reason held to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and shall remain valid and fully enforceable.
4.6 Owner shall defend, indemnify and hold harmless the City, its officials, employees and agents for any and all actions, proceedings, damages, claims, costs and attorneys’ fees arising out of, or related to this Agreement, or for personal injury or property damage which may occur which is not solely attributable to the intentional misconduct or sole, active negligence of the City.
4.7 All parties have been invited to seek legal counsel in the review of this agreement. Should disputes arise concerning this agreement, the agreement shall be deemed to have been drafted mutually by all parties herein. This agreement including its attachments represents the entire, fully integrated, understanding of the parties and supersedes any prior understandings. It shall not be amended in any way except through a separate writing executed by all parties.
IN WITNESS WHEREOF, the City and the Owner have executed this Agreement as of the date first above written.
COMMONWEALTH DEVELOPMENT. - OWNER [Attach Notarial Acknowledgments]
CITY OF BRENTWOOD