HomeMy WebLinkAbout03 - Fire Station & Community Center in Santa Ana HeightsCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 3
July 13, 2004
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Fire Department
Fire Chief Tim Riley, 644 -3101
triley(a. city. newport- beach. ca. us
City Managers Office
Assistant City Manager Dave Kiff, 644 -3002
dkif (a-)city.newport- beach.ca.us
SUBJECT: Amended Agreement between the City, the County of Orange, and
the Orange County Development Agency Regarding a Fire Station
and Community Center in Santa Ana Heights
ISSUE:
Should the City (CITY) amend an existing agreement with the County of Orange
(COUNTY) and its Orange County Development Agency (AGENCY) to construct a fire
station and community center in Santa Ana Heights?
RECOMMENDATION:
Adopt the attached amendment to an existing agreement between the City, the County
of Orange ( "COUNTY ") and the Orange County Development Agency ( "AGENCY ") to
acquire real property for a regional community center and fire station and to construct a
permanent fire station in Santa Ana Heights.
DISCUSSION:
Background:
On July 8, 2003 the City Council entered into an agreement with County of Orange,
acting as the Orange County Development Agency to acquire real property for a
regional community center and to construct a permanent fire station in Santa Ana
Heights. The eastern portion of the unincorporated area known as Santa Ana Heights
was annexed into the corporate limits of the City of Newport Beach on July 1, 2003. The
western portion of Santa Ana Heights is currently subject to possible annexation. Both
Santa Ana Heights Fire Station Agreement
July 13, 2004
Page 2
of these areas are within the Santa Ana Heights Redevelopment Project Area, which is
a component of the AGENCY'S Redevelopment Plan.
The agreement establishes the means and methods by which the CITY will acquire and
operate a regional community center and fire station to serve the Project Area and
surrounding areas. Specifically, the agreement identifies three possible alternative sites
that the CITY is considering for the location of the fire station, identified in Exhibit A.
Since the execution of the agreement, the CITY has determined that two parcels not
listed in Exhibit A are the most desirable location for a fire station. The adoption of this
First Amendment would replace Exhibit A as it exists today with a new Exhibit A that
specifically identifies the CITY's preferred site to be used for the Santa Ana Heights Fire
Station as envisioned by the Agreement.
The Orange County Board of Supervisors, acting on behalf of the County and the
Agency, is expected to act on this same amendment in late July, 2004. Special
Counsel for the Agency has reviewed the Amendment and agreed that its form and
substance was correct.
Environmental Review:
This amendment to the agreement has no requirement for environmental review.
Eventually, the construction project will be subject to normal public works environmental
review requirements.
Prepared by:
Submitted by
TimothylRiley, Fire Chief
Davqy, Assistant City Manager
Attachments: First Amendment to Memorandum of Agreement
Santa Ana Heights Fire Station Agreement
July 13, 2004
Page 3
FIRST AMENDMENT TO THE
MEMORANDUM OF AGREEMENT
SANTA ANA HEIGHTS FIRE STATION
AND
SANTA ANA HEIGHTS RECREATION FACILITY
This FIRST AMENDMENT ( "I" Amendment ") to the July 8, 2003 MEMORANDUM OF
AGREEMENT ( "Agreement') is made and entered into this _th day of , 2004, by and
between the COUNTY OF ORANGE ( "County ") and the ORANGE COUNTY
DEVELOPMENT AGENCY ( "Agency ") and the CITY OF NEWPORT BEACH ( "City ") (the
"Parties ").
RECITALS
WHEREAS, the Parties entered into the Agreement on July 8, 2003 to expend Agency
revenue for the purposes of:
1. Purchasing land for a Fire Station in Santa Ana Heights
2. Designing and Constructing a Fire Station in Santa Ana Heights
3. Purchasing land for a Recreation Facility in Santa Ana Heights; and
4. Designing and Constructing a Recreation Facility in Santa Ana Heights.
WHEREAS, the Agreement identified three separate parcels that the City might purchase
for the purposes of constructing a Fire Station; and
WHEREAS, the City has entered into proceedings to purchase two parcels of land that
were not identified as alternative Fire Station Property within Exhibit A of the July 8, 2003
Agreement; and
WHEREAS, the Parties seek to amend the Agreement to expressly allow for the parcels
to be used for the Santa Ana Heights Fire Station envisioned by the Agreement;
NOW, THEREFORE, the Parties hereto state and agree to amend the Agreement as
follows:
Exhibit A of the July 8, 2003 Agreement shall be replaced by Exhibit A attached hereto.
IN WITNESS WHEREOF, the County, Agency, and City have approved the foregoing
FIRST AMENDMENT to the MEMORANDUM OF AGREEMENT and caused the same to be
executed by their duly authorized officers as set forth below.
COUNTY
Santa Ana Heights Fire Station Agreement
July 13, 2004
Page 4
County Executive Officer
ICfINNOW
Lo
CITY
I
Executive Director
City Manager
APPROVED AS TO FORM APPROVED AS TO FORM
Goldfarb and Lipman
Special Counsel to the County and Agency
By: By:
City Attorney
Santa Ana Heights Fire Station
July Agreement
Page 5
Exhibit A
MEMORANDUM OF AGREEMENT
SANTA ANA HEIGHTS FIRE STATION
AND
SANTA ANA HEIGHTS RECREATION FACILITY
p� THIS MEMORANDUM OF AGREEMENT ( "Agreement "), is made and entered into this
1 day of July, 2003 by and between the COUNTY OF ORANGE ( "County "), the ORANGE
COUNTY DEVELOPMENT AGENCY ( "Agency ") and the CITY OF NEWPORT BEACH ( "City ")
(the "Parties ").
RECITALS
WHEREAS, the County Board of Supervisors has previously approved Ordinance No. 3595
on July 15, 1986 adopting a Redevelopment Plan (the "Redevelopment Plan ") for a redevelopment
project area known as the Santa Ana Heights Redevelopment Project (the "Project Area ") which
Project Area included a portion of the City at the time of adoption of the Redevelopment Plan in
1986; and
WHEREAS, the City has annexed an additional portion of the Santa Ana Heights area
effective July 1, 2003 and is considering annexation of additional territory in Santa Ana Heights
effective July 1, 2004; and
WHEREAS, the Orange County Fire Authority's fire station located on Campus Drive in the
Airport/Santa Ana Heights area was severely damaged by a fire in December 2000 and service has
been provided by the City since that event with only a temporary fire station; and
WHEREAS, to replace the temporary fire station, the City seeks to construct the Santa Ana
Heights Fire Station (the "Fire Station Project ") to provide fire and emergency response services to
areas both in the City today, in the area to be, annexed to the City as of July 1, 2003, and in the
unincorporated area of the County previously served by the Orange County Fire Authority; and
WHEREAS, there is an existing privately owned recreation facility in the Santa Ana Heights
Project Area that is in need of substantial repair and improvement to properly serve recreation needs
in the area; and
WHEREAS, the City seeks to acquire that existing recreation facility and repair and improve
it (the "Recreation Facility Project ") to provide recreation services to areas both in the City today, in
the area to be annexed to the City as of July 1, 2003, and in the unincorporated area of the County;
and
WHEREAS, the construction of the Fire Station Project and the Recreation Facility Project
will benefit the Santa Ana Heights Project Area by providing needed fire service in a permanent
building strategically located to provide optimum response time to the area and by providing needed
and improved recreation facilities; and
WHEREAS, the Agency is willing to fund land purchase costs and site development costs for
the Fire Station Project and the Recreation Facility Project subject to the limits set out in this
Agreement; and
758 \08 \168920.6
WHEREAS, the City is willing to purchase the needed property for the Fire Station Project
and the Recreation Facility Project, coordinate design and construction of the improvements for the
projects using Agency funding as described in this Agreement, and operate the Fire Station Project
and the Recreation Facility Project; at no cost to the County or the Agency; and
WHEREAS, the Parties have reached concurrence on the manner in which the Fire Station
Project and the Recreation Facility Project will be financed and developed and wish to utilize this
Agreement to commit said understanding to writing; and
WHEREAS, the Parties desire that the provisions of this Agreement supercede and replace
Paragraphs 4 and 5 of the Pre - Annexation Agreement dated September 30, 2002, among the Parties,
which paragraphs pertained to Agency assistance to the City for the fire station and recreation
facility; and
WHEREAS, prior to approval of this Agreement, in accordance with Health and Safety Code
Section 33679, the City Council of the City, the Board of Supervisors of the County acting as the
Board of Supervisors of the County and as the Governing Board of the Agency have published notice
of and held public hearings on the Agency's expenditure of funds for the Fire Station Project and the
Recreation Facility Project, the Agency has made available to the public the information required by
Health and Safety Code Section 33679, and the City Council and the Board of Supervisors have
made the findings required pursuant to Health and Safety Code Section 33445 necessary to authorize
the Agency to spend its funds for the Fire Station Project and the Recreation Facility Project.
NOW, THEREFORE, the Parties hereto state and agree as follows:
1. The purpose of this Agreement is to set forth the understanding and agreement of the
Parties with respect to the Fire Station Project and the Recreation Facility Project. The contents of
this Agreement are intended to be as comprehensive as possible yet not necessarily exhaustive with
respect to the issues that may arise relative to the development of the Fire Station Project and the
Recreation Facility Project. In the event that issues occur that are not identified in this Agreement,
the Parties agree to work together in good faith to resolve each matter.
2. Concurrent with the execution of this Agreement, the City shall commence and
complete the acquisition of property for the Fire Station Project. The County, Agency, and City
agree that the City may exercise the power of condemnation or eminent domain associated with any
property acquisition in the event that condemnation becomes necessary. The County, Agency, and
City agree to cooperate fully in any acquisition effort. As the first step in that effort, the City has
identified three possible alternative sites for the location of the station, all of which are in the Project
Area. The proposed sites are shown on the map attached to this Agreement as Exhibit A. Promptly
following execution of this Agreement, the City shall, after consultation with the Agency, select the
site for the Fire Station Project (which selected site is referred to in this Agreement as the "Fire
Station Property "). Promptly following selection of the Fire Station Property, the City shall obtain an
appraisal of the fair market value of the parcel or parcels that constitute the Fire Station Property
from an appraiser approved by the Agency. Upon completion of the appraisal, the City shall submit
it to the Agency for review and approval. Once the appraisal has been approved, the City shall make
good faith efforts to acquire the parcel or parcels by voluntary acquisition. If the City is unable to
acquire a parcel or parcel by voluntary agreement, the City may proceed to use its eminent domain
authority to acquire the parcel or parcels, provided, however, that nothing in this Agreement is
intended to limit the City's discretion as to whether or not it should exercise its eminent domain
758 \08 \168920.6
authority. Once the City has obtained Agency approval for the appraisal, the City shall not agree to
purchase a parcel or offer to purchase a parcel for more than its appraised value or settle an eminent
domain lawsuit for more than the appraised value of the parcel without the consent of the Agency.
The total amount that the Agency shall be required to pay for the acquisition costs of the Fire Station
Property shall not exceed the lesser of the City's acquisition costs or $2.5 million. Acquisition costs
shall include the purchase price the City pays for the parcel or parcels to be acquired, relocation costs
the City is required to pay by law to owners or occupants of the parcels, and reasonable transaction
costs for attorneys, experts, consultants, closing costs and other similar costs.
3. Following or concurrent with the acquisition of the Fire Station Property, the County
and Agency herewith appoint, direct and empower the City to act on their behalf to undertake or
cause to be undertaken the development, including design, construction and related activities of the
Fire Station Project on the Fire Station Property. The estimated costs of the Fire Station Project
(excluding acquisition of the Fire Station Property) are reflected in the Fire Station Project Cost
Estimate attached to this Agreement as Exhibit B. The Parties acknowledge that this cost estimate
represents only an estimate of the Fire Station Project's cost and that the actual costs may exceed the
amount of this estimate. The City has responsibility for managing all aspects of the Fire Station
Project's design and construction. The Agency shall fund the development costs -- exclusive of
acquisition costs identified above -- up to and including $1.6 million. In the event that actual
development costs are less than $1.6 million, the Agency shall pay only the actual development
costs. In the event that actual development costs are more than $1.6 million, the City shall pay any
amount over $1.6 million. Once final plans for the Fire Station Project have been completed, the
City shall prepare a cost estimate and budget for the remaining costs of the Fire Station Project and
submit the estimate and budget to the Agency for approval.
4. Following completion of the Fire Station Project and until such time as the Parties
agree that these services are not necessary, the City agrees to provide fire suppression and emergency
medical services to the Santa Ana Heights Project Area and to neighboring jurisdictions (including,
but not limited to, County unincorporated areas) per existing mutual aid and automatic aid
agreements between the County and the City. If necessary, the County and City shall amend those
existing agreements to make clear that the City is responsible for first response for calls for fire
suppression and emergency medical services from the Santa Ana Heights Project Area and adjoining
unincorporated areas (but excluding John Wayne Airport aircraft and aircraft- related improvements).
The Fire Station Project and the Fire Station Property shall be owned by the City.
5. Concurrent with the execution of this Agreement, the City shall commence and
complete the acquisition of property for the recreation facility. The County, Agency, and City agree
to cooperate fully in any acquisition effort. As the first step in that effort, the Parties have jointly
identified the property where the recreation facility would be located (the "Recreation Facility
Property "). The proposed Recreation Facility Property is shown on the map attached to this
Agreement as Exhibit C. The Parties expect that the City will be able to enter into a voluntary
purchase agreement for the City's purchase of the Recreation Facility Property from its current
owner. Promptly following execution of this Agreement, the City shall make good faith and diligent
efforts to enter into an agreement with the current owner to purchase the Recreation Facility
Property. The total amount that the Agency shall be required to pay for the acquisition costs of the
Recreation Facility Property shall not exceed the lesser of the City's acquisition costs or $4 million.
Acquisition costs shall include the purchase price the City pays for the Recreation Facility Property
and reasonable closing costs for the acquisition. The current owner of the Recreation Facility
Property is a nonprofit entity that operates a recreation program on the property.
758 \08 \168920.6
6. Following or concurrent with the acquisition of the Recreation Facility Property, the
County and Agency herewith appoint, direct and empower the City to act on their behalf to undertake
or cause to be undertaken the development, including design, construction and related activities of
the Recreation Facility Project on the Recreation Facility Property. The estimated costs of the
Recreation Facility Project (excluding acquisition of the Recreation Facility Property) are reflected in
the Recreation Facility Project Cost Estimate attached to this Agreement as Exhibit D. The Parties
acknowledge that this cost estimate represents only an estimate of the Recreation Facility Project's
cost and that the actual costs may exceed the amount of this estimate. The City has responsibility for
managing all aspects of the Recreation Facility Project's design and construction. The Agency shall
fund the development costs -- exclusive of acquisition costs identified above -- up to and including
$7.5 million. In the event that actual development costs are less than $7.5 million, the Agency shall
pay only the actual development costs. In the event that actual development costs are more than $7.5
million, the City shall pay any amount over $7.5 million. Once final plans for the Recreation Facility
Project have been completed, the City shall prepare a cost estimate and budget for the remaining
costs of the Recreation Facility Project and submit the estimate and budget to the Agency for
approval.
7. Following completion of the Recreation Facility Project and until such time as the
Parties agree that these services are not necessary, the City agrees to provide recreation facilities and
services on and from the Recreation Facility Property and the buildings and facilities thereon to those
who live and work in the Santa Ana Heights Project Area and to neighboring jurisdictions (including,
but not limited to, County unincorporated areas). The Recreation Facility Project and the Recreation
Facility Property shall be owned by the City. At the time the City obtains fee title to the Recreation
Facility Property, the City shall execute and record a covenant running with the Recreation Facility
Property land requiring that the Recreation Facility Property and the improvements thereon be
operated and used as a recreation facility, and that, if not so used and operated for a continuous
period of six (6) months or more, title to the Recreation Facility Property and all improvements
thereon shall be conveyed to the Agency.
S. The Agency Executive Director and the City Manager shall cooperate to design
payment procedures for the Agency's funding of the acquisition of the Fire Station Property and the
Recreation Facility Property and for the development of the Fire Station Project and the Recreation
Facility Project. Those procedures shall provide for the City's submittal to the Agency of detailed
documentation of expenditures or expected expenditures and for the County's prompt payment of
costs after receipt of the necessary documentation.
9. The City understands and agrees that the source of funds that the Agency will use to
fund the acquisition of the Fire Station Property and the Recreation Facility Property and to fund the
development costs for the Fire Station Project and the Recreation Facility Project will include the
proceeds of tax exempt bonds secured by the tax increment revenue the Agency receives pursuant to
Health and Safety Code Section 33670 (the "Bonds "). In light of the funding sources, the City
covenants and agrees with respect to the Fire Station Property and the Recreation Facility Property
and the Fire Station Project and the Recreation Facility Project to comply with all applicable
requirements of the federal Internal Revenue Code (the "Code ") necessary to preserve the tax - exempt
status of the interest on the Bonds and specifically covenants, without limiting the generality of the
foregoing, as follows:
768 \08 \168920.6 4
(a) Private Activity. The City will take no action or refrain from taking any
action or make any use of the proceeds of the Bonds or of any other monies or property which would
cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Code;
(b) Arbitrage. The City will make no use of the proceeds of the Bonds or of any
other amounts or property, regardless of the source, or take any action or refrain from taking any
action which will cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Code;
(c) Federal Guaranty. The City will make no use of the proceeds of the Bonds or
take or omit to take any action that would cause the Bonds to be "federally guaranteed" within the
meaning of Section 149(b) of the Code;
(d) Information Reporting. The City will cooperate with the Agency in providing
information that the Agency needs to comply with the informational reporting requirement of
Section 149(e) of the Code;
(e) Hedge Bonds. The City will make no use of the proceeds of the Bonds or any
other amounts or property, regardless of the source, or take any action or refrain from taking any
action that would cause the Bonds to be considered "hedge bonds" within the meaning of
Section 149(g) of the Code unless the City takes all necessary action to assure compliance with the
requirements of Section 149(g) of the Code to maintain the tax exempt status of interest on the Bonds
for federal income tax purposes and such action has been approved by the Agency.
In addition, the City shall, prior to entering into an operating or management agreement or
lease for the Recreation Facility Property and/or the facilities thereon, provide to the Agency an
opinion of counsel acceptable to the Agency that the execution and performance of that operating or
management agreement or lease will not affect the tax exempt status of the interest on the Bonds.
10. In contemplation of the provisions of Section 895.2 of the California Government
Code imposing certain tort liability jointly upon public entities solely by reason of such entities being
Parties to an Agreement as defined in Section 895 of said code, the Parties hereto, as between
themselves pursuant to the authorization contained in Sections 895.2 and 895.6 of said code, will
each assume the full liability imposed upon it or any of its officers, agents or employees by law for
personal injury, property damage or loss to third Parties caused by a negligent or wrongful act or
omission of that party occurring in the performance of the Agreement. To achieve the above stated
purpose, each party indemnifies and holds harmless the other party for any damage, loss, cost or
expense arising out of its own negligent or wrongful acts or omissions.
11. This Agreement shall be governed by the laws of California and together with the
attached exhibits represents the entire agreement of the Parties as to the subject matter of this
Agreement. The Parties intend that this Agreement supercede and replace the provisions of
Paragraphs 4 and 5 of the Pre - Annexation Agreement dated September 10, 2002 and entered into
among the Parties, and, upon execution of this Agreement, said provisions of Paragraph 4 and 5 of
the Pre- Annexation Agreement shall have no further force or effect.
758 \08 \168920.6 c
IN WITNESS WHEREOF, the County, Agency and City have approved the foregoing
MEMORANDUM OF AGREEMENT and caused the same to be executed by their duly authorized
officers as set forth below.
APPROVED AS TO FORM
Goldfarb & Lipman
Special Couns to the County and Agency
By:
Lee C. Rosenthal
758 \08 \168920.6
COUNTY
By: 9/ Q.r.� j •/"> �
tl County Executive Officer
AGENCY
By: ar/
Executive Director
CITY
By: �Z•
y Manager
APPROVED AS TO FORM
Stradling Yocca Carlson & Rauth, A Professional
Corporation
By:
Special Counsel to the City
AN.
EXHIBIT B
FIRE STATION PROJECT COST ESTIMATE
LAND ACQUISITION COSTS NOT TO EXCEED $2,500,000
IMPROVEMENT COSTS NOT TO EXCEED $1,600,000
TOTAL $4,100,000
''.r'...
`'yJ• `'� ^�'' .'•��1'./ ��. j:` y 1{f ^� {c':J'c V�cisu A
Ja .:, -jl:; .. .J tl . �.�.�� \;;`.i 'fit /.. `�`` " ->; +' y:. '♦ /' -• "r �,WW.
:_xv'����.'.`�.. .. .. ........ �.iti'.1 ,._- JC3^triSvntt::.y... ....J. ... !,rl::r..%a .,:a'A!�A'd {�: •: ,_...,,\ `�. -. /i.'f
EXHIBIT D
RECREATION FACILITY PROJECT COST ESTIMATE
ACQUISITION COSTS $4,000,000
IMPROVEMENT COSTS $7,500,000
TOTAL DEVELOPMENT COSTS NOT TO EXCEED $11,500,000