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HomeMy WebLinkAbout03 - Uptown Newport Development Agreement Amendment Located at 4311-4321 Jamboree Road - Second Reading (PA2015-015)CTY OF F NEWPORT BEACH City Council Staff Report May 12, 2015 Agenda Item No. 3 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Kimberly Brandt, Community Development Director — (949) 644 -3226, kbrandt @newportbeachca.gov PREPARED BY: Rosalinh Ung, Associate Planner PHONE: (949) 644 -3208 TITLE: Uptown Newport Development Agreement Amendment Located at 4311 -4321 Jamboree Road - Second Reading (PA2015 -015) ABSTRACT: The second reading and adoption of Ordinance 2015 -11, approving an Amendment to Uptown Newport Development Agreement No. DA2012 -003 (DA) pertaining to the timing of the payment of public benefit fees and fees in -lieu of parkland dedication (park fees). RECOMMENDATION: Conduct second reading and adopt Ordinance No. 2015 -11, An Ordinance of the City Council of the City of Newport Beach, California, Approving First Amendment to Development Agreement No. DA 2012 -003 for the 25.05 Acre Planned Community Known as Uptown Newport Located at 4311 -4321 Jamboree Road (PA2015 -015) (Staff Report Attachment No. CC 1). FUNDING REQUIREMENTS: The proposed DA amendment includes an 18 to 24 -month postponement of the public benefit fee payment to the City. However, the DA does provide for an annual increase to the public benefit fee based on a cost of living escalator. Therefore, the proposed fee payment deferral will result in an overall higher fee payment to the City. Based on 1,244 units, the total public benefit fee payment to the City is $40,430,000, prior to the application of any cost of living escalator. The proposed amendment also includes a payment deferral of the park fees, for which the current DA does not include a cost of living escalator. To offset the proposed delay of the park fee payment in each phase, staff has negotiated with the applicant to include in the DA the addition of a four percent (4 %) annual interest rate on any deferred park fees due for Phase 1. For Phase 2, the proposed annual interest rate is five percent (5 %) on any deferred park fees. Staff believes that these rates will reflect the City's average cost of borrowing in these development timeframes. Based on the DA's terms, the project's total park land dedication requirement is 13.62 acres. The established fair market value for the park land is $2,500,000 per acre, which results in a total park land 3 -1 value of $34,050,000. This is the total value before the application of any credits for park land dedication and public and private recreational improvements as allowed by the DA terms. DISCUSSION: On April 28, 2015, after a noticed public hearing, the City Council introduced and passed to second reading Ordinance No. 2015 -11 that approved First Amendment to Development Agreement No. DA2012 -003. ENVIRONMENTAL REVIEW: All significant environmental concerns for the Uptown Newport project have been addressed in the previously certified Environmental Impact Report No. ER2012 -001 (SCH No. 2010051094), and the City of Newport Beach intends to use said document for the above noted project, and further that there are no additional reasonable alternative or mitigation measures that should be considered in conjunction with said project. Copies of the previously prepared environmental document are available for public review and inspection at the Planning Division or at the City of Newport Beach website at www.newportbeachca.gov/cegadocuments. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Description Attachment M - Ordinance No. 2015 -11 3 -2 Attachment No. CC 1 Ordinance No. 2015 -11 3 -3 ORDINANCE NO. 2015- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH APPROVING FIRST AMENDMENT TO DEVELOPMENT AGREEMENT NO. DA2012 -003 FOR THE 25.05 ACRE PLANNED COMMUNITY KNOWN AS UPTOWN NEWPORT LOCATED AT 4311- 4321 JAMBOREE ROAD (PA2015 -015) THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS FOLLOWS: SECTION 1. STATEMENT OF FACTS. 1. An application was filed by TSG- Parcel 1, LLC. ( "Uptown Newport') with respect to a 25.05 -acre property located at 4311 and 4321 Jamboree Road which has already been approved for the development of up to 1,244 residential dwelling units, 11,500 square feet of retail commercial uses and 2.05 acres of parklands (the "Project "), legally described as Parcels 1 through 4 of Parcel Map No. 2013 -108, requesting an amendment to Development Agreement No. DA2012 -003. 2. The applicant proposes to amend the following sections of Development Agreement No. DA2012 -003: a. Section 3.1: To defer the payment of public benefit fees to the City from the issuance of building permits to the issuance of certificates of occupancy, as an option; and b. Section 3.2.1: To defer the payment of fees in -lieu of parkland dedication for all units at the issuance of the first building permit for any unit in a final subdivision map to the issuance of building permits on a per -unit basis. 3. The subject property is located within the Uptown Newport Planned Community Zoning District (PC -58) and the General Plan Land Use Element category is Mixed - Use Horizontal 2 (MU -1­12). 4. The subject property is not located within the coastal zone. 5. On February 26, 2013, the Newport Beach City Council ( "City ") held first reading of Ordinance No. 2013 -6 for approval of Development Agreement No. DA2012 -003. In addition, on March 12, 2013, the City Council held second reading and adopted Ordinance No. 2013 -6 approving Development Agreement No. DA2012 -003. Ordinance No. 2013 -6 became effective on or around April 11, 2013. 6. Development Agreement No. DA2012 -003 is dated March 12, 2013, for reference purposes, and was recorded in the Official Records of Orange County on March 26, 2013, as document number 2013000180939 (the "Development Agreement'). 3 -4 7. On or around February 14, 2014, Uptown Newport transferred ownership of the Property and assigned the Development Agreement to TSG- Parcel 1, LLC, a Delaware limited liability company, Uptown Newport Jamboree, LLC, a Delaware limited liability company, and TPG/TSG Venture I Acquisition, LLC, a Delaware limited liability company (collectively, the "Property Owners "). 8. Section 3.1 of the Development Agreement requires the payment of a Public Benefit Fee to the City in the sum of Thirty -Two Thousand Five Hundred Dollars ($32,500.00) (subject to an inflationary escalator at the time of payment) per residential dwelling unit developed as part of the Project at the time a building permit is issued for each residential dwelling unit. 9. In addition to constructing and improving two (2) approximately one (1) acre parks, Property Owners are also required to pay fees in -lieu of parkland dedication to the City, based on the pro -rated gross acreage of the final map minus any parkland dedication and applicable credits, for all units included on a final map at the time that the first building permit is issued for a unit within that final map. 10. On January 27, 2015, the Property Owners submitted an application to amend the Development Agreement as set forth in the First Amendment to Development Agreement, attached hereto as "Exhibit A" and incorporated herein by reference (the "First Amendment'). 11. The Uptown Newport Final Environmental Impact Report (SCH No. 2010051094), which consists of the Comments, Responses to Comments, and Revisions to the DEIR (Draft Environmental Impact Report), a Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program was prepared for the Project in compliance with the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and City Council Policy K -3. 12. The Newport Beach City Council, having final approval authority over the Project, adopted and certified as complete and adequate, the Uptown Newport Final Environmental Impact Report, and adopted "Findings and Facts in Support of Findings for the Uptown Newport Project Final Environmental Impact Report' ( "CEQA Findings ") contained within Resolution No. 2013 -21 on February 26, 2013, which are hereby incorporated by reference. 13. The Planning Commission held a public hearing for the First Amendment on March 19, 2015. At the public hearing with a vote of 3 ayes, 2 noes, 1 recused and 1 absent, the Planning Commission adopted Resolution No. 1976, recommending the City Council approve the First Amendment and consider the imposition of additional financial incentives benefitting the City in exchange for the delay in the fee payments. 14. On April 14, 2015, the City Council continued the consideration of First Amendment to the April 28, 2015, City Council meeting. ICS1 15. A public hearing was held on April 28, 2015 in the Council Chambers at 100 Civic Center Drive, Newport Beach. A notice of time, place and purpose of the meeting was given in accordance with the Newport Beach Municipal Code. Evidence, both written and oral, was presented to, and considered by, the City Council at this meeting. SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION. All significant environmental concerns for the proposed project have been addressed in the previously certified Environmental Impact Report No. ER2012 -001 (SCH No. 2010051094), and the City of Newport Beach intends to use said document for the above -noted project, and further that there are no additional reasonable alternative or mitigation measures that should be considered in conjunction with said project. Copies of the previously prepared environmental document are available for public review and inspection at the Planning Division or at the City of Newport Beach website at www.newportbeachca.gov/cegadocuments. SECTION 3. FINDINGS. In accordance with Chapter 15.45 of the Newport Beach Municipal Code, the following findings and facts in support of such findings are set forth: Finding: A. The First Amendment is consistent with the General Plan and the Uptown Newport Planned Community Development Plan (PCDP), Municipal Code and Subdivision Map Act. Facts in Support of Finding: 1. The Amendment will continue to allow the development of a residential community, containing a mix of housing types, supporting retail and active parklands, consistent with the land uses, densities and intensities of the PCDP which is the zoning document for the Project, the General Plan Land Use designation of Mixed -Use Horizontal -2 and the Airport Business Area Integrated Conceptual Development Plan. 2. The changes included in the Amendment are to defer the timing for the payment of the Public Benefit Fee to be on a per -unit basis upon issuance of certificates of occupancy, instead of building permits, and to change the timing of the payment of fees in -lieu of parkland dedication to a per -unit basis at the time a building permit for an individual Project is issued, rather than issuance of the first building permit for all units within a final map. 3. These changes do not add any lots, units, building sites or structures to the Project and does not change the approved design or uses allowed by the 3 -6 Uptown Newport Planned Community. The fee payments and parkland dedication will remain a requirement for the project. 4. The Uptown Newport project approval included detailed findings and facts in support of these findings that demonstrate the Project's conformity with, among other things, the General Plan, PCDP, Municipal Code and the Subdivision Map Act. All of those findings are still applicable to the Project, and are incorporated by reference into this Resolution. SECTION 4. DECISION. THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DOES HEREBY ORDAIN AS FOLLOWS: 1. The Statement of Facts, CEQA Determination and Required Findings set forth above are true and correct and incorporated herein by reference. 2. The First Amendment to Development Agreement No. DA2012 -003 shall be adopted as depicted in Exhibit "A" attached hereto and incorporated by reference. 3. If any section, subsection, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that anyone or more sections, subsections, sentences, clauses or phrases be declared unconstitutional. 4. This action shall become final and effective thirty (30) days after the adoption of this Ordinance. 5. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. This Ordinance shall be published once in the official newspaper of the City, and the same shall become effective thirty (30) days after the date of its adoption. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 28th of April, 2015, and adopted on the 12th day of May, 2015, by the following vote, to wit: 3 -7 AYES, COUNCIL MEMBERS NOES. COUNCIL MEMBERS ABSENT. COUNCIL MEMBERS MAYOR Edward D. Selich, Mayor r_IIIIIIIIr0020 Leilani I. Brown, City Clerk APPROVED AS TO FORM, CITY P RNEY'S OFFICE: Aaron . Harp, City Attorney for the City of Newport Beach m EXHIBIT A FIRST AMENDMENT TO DEVELOPMENT AGREEMENT 3 -9 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 Attn: City Clerk Above This Line Is for Recorder's Use Only) This Agreement is recorded at the request and for the benefit of the City of Newport Beach and is exempt from the payment of a recording fee pursuant to Government Code Sections 6103 and 27383. FIRST AMENDMENT TO DEVELOPMENT AGREEMENT between CITY OF NEWPORT BEACH and TSG- PARCEL 1, LLC, TPG /TSG VENTURE I ACQUISITION, LLC, AND UPTOWN NEWPORT JAMBOREE, LLC CONCERNING UPTOWN NEWPORT PROPERTY a.S0'_ms,2 1251052.2 3 -10 FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (Pursuant to Newport Beach Municipal Code Chapter 15.45 and California Government Code sections 65864- 65869.5) This FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (the "First Amendment ") is dated for reference purposes as of the _ day of 2015 (the "Amendment Date"), and is being entered into by and between the CITY OF NEWPORT BEACH (`City "), on the one hand, and TSG- Parcel 1, LLC, a Delaware limited liability company, TPG /TSG Venture I Acquisition, LLC, a Delaware limited liability company and Uptown Newport Jamboree, LLC, a Delaware limited liability company (collectively, the "Landowner" or "Landowners "), on the other. City and Landowners are sometimes collectively referred to in this First Amendment as the "Parties" and individually as a "Party.' RECITALS A. Landowners are the owners of that certain real property located in the City of Newport Beach, County of Orange, State of California commonly referred to as Uptown Newport, located at 4311 -4321 Jamboree Road (APN Nos. 445 - 131 -02 and 445 - 131 -03), and generally located on the west side of Jamboree Road, between Birch Street and Fairchild Road (the "Property'). The Property is more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by reference. B. City and Uptown Newport LP, a Delaware limited partnership, entered into that certain Development Agreement dated March 12, 2013, for reference purposes and recorded in the Official Records of Orange County on March 26, 2013, as document number 2013000180939 (the "Agreement "). All terms not otherwise defined in this First Amendment shall have the meanings given them in the Agreement. C. On or around February 14, 2014, Uptown Newport, LP, a Delaware limited partnership, transferred ownership of the Property and assigned the Agreement to TSG - Parcel 1, LLC, a Delaware limited liability company, TPG /TSG Venture I Acquisition, LLC, a Delaware limited liability company and Uptown Newport Jamboree, LLC, a Delaware limited liability company. D. Under the Agreement, Landowners must pay a Public Benefit Fee to the City in the sum of Thirty -Two Thousand Five Hundred Dollars ($32,500.00), as adjusted according to the Agreement, per residential dwelling unit developed as part of the Project at the time each residential building permit is issued. The Parties now desire to amend the Agreement as set forth in this First Amendment to require payments of the Public Benefit Fee at the issuance of building permits, or at Landowner's option, at the issuance of certificates of occupancy per residential dwelling unit. E. In addition to constructing and improving two (2) approximately one (1) acre parks, Landowners are also required to pay certain parkland dedication in -lieu fees to the City, based on the pro -rated gross acreage of the final map minus any parkland dedication and applicable credits, for all units included on a final map at the time that the first building permit is issued for a unit on that final map. The Parties now desire to amend the Agreement as set forth in 4 20 2019 c2 -1- 12510522 3 -11 this First Amendment to allow the Landowner, as an alternative, to defer payment of all or a portion of the parkland dedication in -lieu fees, but an interest charge will accrue and be applied at time of payment(s), as more specifically described below. Additionally, the Parties now desire to amend the Agreement as set forth in this First Amendment to require payment of parkland dedication in -lieu fees, as applicable, on a per -unit basis at the issuance of a building permit for individual buildings in the Project. F. On March 13, 2007, the City Council adopted Ordinance No. 2007 -6, entitled "Ordinance Amending Chapter 15.45 of City of Newport Beach Municipal Code Regarding Development Agreements" (the "Development Agreement Ordinance "). This First Amendment is consistent with the Development Agreement Ordinance. G. This First Amendment is consistent with the City of Newport Beach General Plan, including without limitation the General Plan's designation of the Property as "Mixed -Use Horizontal -2," Airport Business Area Integrated Conceptual Development Plan, and the Uptown Newport Planned Community Development Plan. H. On March 19, 2015, the Planning Commission held a properly noticed public hearing on this First Amendment and considered the testimony and information submitted by City staff, Landowners, and members of the public. On March 19, 2015, consistent with applicable provisions of the Development Agreement Statute and Development Agreement Ordinance, the Planning Commission adopted Resolution No. 1976, recommending the City Council approve this First Amendment. 1. In recognition of the significant public benefits that the Agreement, as amended, provides, the City Council has found that this First Amendment: (i) is consistent with the City of Newport Beach General Plan as of the date of the Agreement and this First Amendment; (ii) is in the best interests of the health, safety, and general welfare of City, its residents, and the public; (iii) is entered into pursuant to, and constitutes a present exercise of, City's police power; (iv) is consistent and has been approved consistent with the final Environmental Impact Report (No. ER2012 -001) (SCH #2010051094) ("EIR ") that has been certified by the City Council on or before the Agreement Date, which analyzed the environmental effects of the proposed development of the Project on the Property, and all of the findings, conditions of approval and mitigation measures related thereto; and (v) is consistent and has been approved consistent with provisions of California Government Code section 65867 and City of Newport Beach Municipal Code chapter 15.45. J. On April 28, 2015, the City Council held a properly noticed public hearing on this First Amendment and considered the testimony and information submitted by City staff, Landowners, and members of the public. On May 12, 2015, consistent with applicable provisions of the Development Agreement Statute and Development Agreement Ordinance, the City Council held second reading and adopted Ordinance No. 2015 -8, finding the First Amendment to be consistent with the City of Newport Beach General Plan and approving this First Amendment. 4 20 2015 c2 2 1251052.2 It FFA AGREEMENT NOW, THEREFORE, City and Landowners agree as follows: I. Public Benefit Fee. Section 3.1 is hereby amended in its entirety to read as follows: "As consideration for City's approval and performance of its obligations set forth in this Agreement, Landowner shall pay to City a fee that shall be in addition to any other fee or charge to which the Property and the Project would otherwise be subject (herein, the "Public Benefit Fee ") in the sum of Thirty -Two Thousand Five Hundred Dollars ($32,500.00) per residential dwelling unit Developed as part of the Project, with the unpaid balance of said Public Benefit Fee increased beginning on January 1, 2015, by the percentage increase in the CPI Index between the Effective Date and said January I st date (the first "Adjustment Date ") and thereafter with the unpaid balance of said Public Benefit Fee increased on each subsequent January I during the Tenn of this Agreement (each, an "Adjustment Date ") by the percentage increase in the CPI Index in the year prior to the applicable Adjustment Date. The amount of the percentage increase in the CPI Index on the applicable Adjustment Dates shall in each instance be calculated based on the then most recently available CPI Index figures such that, for example, if the Effective Date of this Agreement falls on July 1 and the most recently available CPI Index figure on the first Adjustment Date (January 1 of the following year) is the CPI Index for November of the preceding year, the percentage increase in the CPI Index for that partial year (a 6 -month period) shall be calculated by comparing the CPI Index for November of the preceding year with the CPI Index for May of the preceding year (a 6 -month period). In no event, however, shall application of the CPI Index reduce the amount of the Public Benefit Fee (or unpaid portion thereof) below the amount in effect prior to any applicable Adjustment Date. Landowner shall pay the Public Benefit Fee on a per unit basis at the time each residential building permit is issued, or at Landowner's option and in Landowner's sole discretion, at the time each certificate of occupancy is issued. Notwithstanding any other provision set forth in this Agreement to the contrary, during the Term of this Agreement City shall not increase the Public Benefit Fee except pursuant to the CPI Index as stated in this Section 3.1. Landowner acknowledges by its approval and execution of this Agreement that it is voluntarily agreeing to pay the Public Benefit Fee, that its obligation to pay the Public Benefit Fee is an essential tern of this Agreement and is not severable from City's obligations and Landowner's vesting rights to be acquired hereunder, and that Landowner expressly waives any constitutional, statutory, or common law right it might have in the absence of this Agreement to protest or challenge the payment of such fee on any ground whatsoever, including without limitation pursuant to the Fifth and Fourteenth Amendments to the United States Constitution, California Constitution Article I Section 19, the Mitigation Fee Act (California Government Code Section 66000 et seq.), or otherwise. In addition to any other remedy set forth in this Agreement for Landowner's default, if Landowner shall fail to timely pay any portion of the Public Benefit Fee when J 201015 Q 3 1251052.2 3 -13 due City shall have the right to withhold issuance of any further building permits, occupancy permits, or other development or building permits for the Project." 2. Park Fees. Section 3.2.1, subdivision (iv), is hereby amended in its entirety to read as follows: "In -lieu of parkland dedication fees ("Park In -Lieu Fees ") shall be paid to the City prior to the issuance of building permits. Payment of Park In -Lieu Fees shall be made for all units included on any final map(s) at the time that the first building permit is issued for any single unit included on a final map(s). However, at Landowner's option and in Landowner's sole discretion, Landowner may elect to defer payment(s) of Park In -Lieu Fees for some or all units contained on any final map(s) (the "Deferred Units ") until building permits are sought for the building or buildings containing those Deferred Units. In such cases, Landowner shall pay, in addition to the Park In -Lieu Fees for the Deferred Units, an interest charge in the amount of four percent (4 %) per annum for any Deferred Units in Phase I (as Phase I is shown on the approved phasing plan for the Project), and five percent (5 %) per annum for any Deferred Units in Phase 2 (as Phase 2 is shown on the approved phasing plan for the Project). The period in which the interest charge(s) shall apply to any particular Deferred Units shall begin at Landowner's election to defer payment of Park In -Lieu Fees for those Deferred Unit(s), and shall continue to accrue on a per annum basis until such time that Landowner actually pays the Park In -Lieu Fees for those particular unit(s) (the "Deferral Period"). The Park In -Lieu Fees for any Deferred Units shall be paid on a per -unit basis no later than upon the issuance of a building permit per individual building(s) in the Project. For example, if a building permit is sought for a building in Phase I that includes 100 Deferred Units, Park In -Lieu Fees plus the interest charge of four percent (4 %) per annum that accrued over the Deferral Period for those Deferred Units must be paid for those 100 Deferred Units before the building permit for that building can be issued. As another example, if a building permit is sought for a building in Phase 2 that includes 300 Deferred Units, Park In -Lieu Fees plus the interest charge of five percent (5 %) per annum that accrued over the Deferral Period for those Deferred Units must be paid for those 300 Deferred Units before the building pen-nit for that building can be issued. The fee amount for Park In- Lieu Fees shall be calculated on a per -unit basis based on the pro -rated gross acreage of the final map minus any parkland dedication and applicable credits for recreational improvements approved by the City pursuant to the General Plan and the Subdivision Code within the area encompassed by the final map, then dividing the balance by the number of units contained in the area encompassed by that final map. For example, if a final map encompasses 10 acres of the 25.05 acre planned community (or 39.92% of the total acreage), the amount of the Park In- lieu Fees required to be paid on a per -unit would be 39.92% of the 13.62 acre parkland dedication requirement minus any parkland dedication and any approved credits for recreational improvements, divided by the number of units contained within that final map." 3. Full Force and Effect. Except as modified by this First Amendment, the Agreement shall remain in full force and effect. 4202015,2 2 1251052.2 3 -14 4. Recitals. The Recitals set forth above are true and correct and incorporated herein by reference. 5. Counterparts. This First Amendment may be signed by the Parties in different counterparts and the signature pages combined shall create a single document binding on all Parties. 6. Recordation. The City Clerk of City shall record this First Amendment in the Office of the County Recorder of the County of Orange within the period required by California Government Code section 65868.5 and City of Newport Beach Municipal Code section 15.45.100. The date of this First Amendment and the date of recordation of this First Amendment shall not modify or amend the Effective Date or the Termination Date of the Agreement. +102013 [SIGNATURE PAGE FOLLOWS[ 5 12.51052 .2 3 -15 LANDOWNERS SIGNATURE PAGE TO FIRST AMENDMENT TO DEVELOPMENT AGREEMENT "LANDOWNERS" UPTOWN NEWPORT JAMBOREE, LLC, a Delaware limited liability company By: Name: TPG /TSG VENTURE I ACQUISITION, LLC, a Delaware limited liability company M TSG - PARCEL I, LLC, a Delaware limited liability company 0 Name: Title: 4201015 r'- I ?5105 ?S 3 -16 CITY SIGNATURE PAGE TO FIRST AMENDMENT TO DEVELOPMENT AGREEMENT "CITY" CITY OF NEWPORT BEACH m ATTEST: Leilani I. Brown, City Clerk APPRO TO FORM: ((or) Aaron C. Hasp, City Attorney a ^_0'015 0 Edward D. Selich, Mayor 1251052.2 3 -17 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached. and not the truthfulness. accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 2015, before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he /she executed the same in his/her authorized capacity, and that by his /her signature(s) on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 2015, before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he /she executed the same in his/her authorized capacity, and that by his /her signature(s) on the instrument die person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: l� 1251052.2 3 -18 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Being a subdivision of Lots I and 2 of Tract No. 7953, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 310, Pages 7 to 11 inclusive, of Miscellaneous Maps, recorded of said County. a 202015 Q 1251052.2 [OINK RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 Attn: City Clerk (Space Above This Line Is for Recorder's Use Only) This Agreement is recorded at the request and for the benefit of the City of Newport Beach and is exempt from the payment of a recording fee pursuant to Government Code Sections 6103 and 27383. FIRST AMENDMENT TO DEVELOPMENT AGREEMENT between CITY OF NEWPORT BEACH and TSG- PARCEL 1, LLC, TPG /TSG VENTURE I ACQUISITION, LLC, AND UPTOWN NEWPORT JAMBOREE, LLC CONCERNING UPTOWN NEWPORT PROPERTY 4/29/2015 v2 1251052.2 3 -20 FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (Pursuant to Newport Beach Municipal Code Chapter 15.45 and California Government Code sections 65864- 65869.5) This FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (the "First Amendment ") is dated for reference purposes as of the _ day of 2015 (the "Amendment Date "), and is being entered into by and between the CITY OF NEWPORT BEACH ( "City"), on the one hand, and TSG- Parcel 1, LLC, a Delaware limited liability company, TPG /TSG Venture I Acquisition, LLC, a Delaware limited liability company and Uptown Newport Jamboree, LLC, a Delaware limited liability company (collectively, the "Landowner" or "Landowners "), on the other. City and Landowners are sometimes collectively referred to in this First Amendment as the "Parties" and individually as a "Party." RECITALS A. Landowners are the owners of that certain real property located in the City of Newport Beach, County of Orange, State of California commonly referred to as Uptown Newport, located at 4311 -4321 Jamboree Road (APN Nos. 445- 131 -02 and 445- 131 -03), and generally located on the west side of Jamboree Road, between Birch Street and Fairchild Road (the "Property"). The Property is more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by reference. B. City and Uptown Newport LP, a Delaware limited partnership, entered into that certain Development Agreement dated March 12, 2013, for reference purposes and recorded in the Official Records of Orange County on March 26, 2013, as document number 2013000180939 (the "Agreement "). All terms not otherwise defined in this First Amendment shall have the meanings given them in the Agreement. C. On or around February 14, 2014, Uptown Newport, LP, a Delaware limited partnership, transferred ownership of the Property and assigned the Agreement to TSG - Parcel 1, LLC, a Delaware limited liability company, TPG /TSG Venture I Acquisition, LLC, a Delaware limited liability company and Uptown Newport Jamboree, LLC, a Delaware limited liability company. D. Under the Agreement, Landowners must pay a Public Benefit Fee to the City in the sum of Thirty-Two Thousand Five Hundred Dollars ($32,500.00), as adjusted according to the Agreement, per residential dwelling unit developed as part of the Project at the time each residential building permit is issued. The Parties now desire to amend the Agreement as set forth in this First Amendment to require payments of the Public Benefit Fee at the issuance of building permits, or at Landowner's option, at the issuance of certificates of occupancy per residential dwelling unit. E. In addition to constructing and improving two (2) approximately one (1) acre parks, Landowners are also required to pay certain parkland dedication in -lieu fees to the City, based on the pro -rated gross acreage of the final map minus any parkland dedication and applicable credits, for all units included on a final map at the time that the first building permit is issued for a unit on that final map. The Parties now desire to amend the Agreement as set forth in 429/2015 v2 -1- 1251052.2 3 -21 this First Amendment to allow the Landowner, as an alternative, to defer payment of all or a portion of the parkland dedication in -lieu fees, but an interest charge will accrue and _be applied at time of payment(s), as more specifically described below. Additionally, the Parties now desire to amend the Agreement as set forth in this First Amendment to require payment of parkland dedication in -lieu fees, as applicable, on a per -unit basis at the issuance of a building permit for individual buildings in the Project. F. On March 13, 2007, the City Council adopted Ordinance No. 2007 -6, entitled "Ordinance Amending Chapter 15.45 of City of Newport Beach Municipal Code Regarding Development Agreements" (the "Development Agreement Ordinance "). This First Amendment is consistent with the Development Agreement Ordinance. G. This First Amendment is consistent with the City of Newport Beach General Plan, including without limitation the General Plan's designation of the Property as "Mixed -Use Horizontal -2," Airport Business Area Integrated Conceptual Development Plan, and the Uptown Newport Planned Community Development Plan. H. On March 19, 2015, the Planning Commission held a properly noticed public hearing on this First Amendment and considered the testimony and information submitted by City staff, Landowners, and members of the public. On March 19, 2015, consistent with applicable provisions of the Development Agreement Statute and Development Agreement Ordinance, the Planning Commission adopted Resolution No. 1976, recommending the City Council approve this First Amendment. I. In recognition of the significant public benefits that the Agreement, as amended, provides, the City Council has found that this First Amendment: (i) is consistent with the City of Newport Beach General Plan as of the date of the Agreement and this First Amendment; (ii) is in the best interests of the health, safety, and general welfare of City, its residents, and the public; (iii) is entered into pursuant to, and constitutes a present exercise of, City's police power; (iv) is consistent and has been approved consistent with the final Environmental Impact Report (No. ER2012 -001) (SCH #2010051094) ( "EIR ") that has been certified by the City Council on or before the Agreement Date, which analyzed the environmental effects of the proposed development of the Project on the Property, and all of the findings, conditions of approval and mitigation measures related thereto; and (v) is consistent and has been approved consistent with provisions of California Government Code section 65867 and City of Newport Beach Municipal Code chapter 15.45. J. On April 28, 2015, the City Council held a properly noticed public hearing on this First Amendment and considered the testimony and information submitted by City staff, Landowners, and members of the public. On May 12, 2015, consistent with applicable provisions of the Development Agreement Statute and Development Agreement Ordinance, the City Council held second reading and adopted Ordinance No. 2015 -8, finding the First Amendment to be consistent with the City of Newport Beach General Plan and approving this First Amendment. 4/29/2015 v2 2 1251052.2 3 -22 AGREEMENT NOW, THEREFORE, City and Landowners agree as follows: 1. Public Benefit Fee. Section 3.1 is hereby amended in its entirety to read as follows: "As consideration for City's approval and performance of its obligations set forth in this Agreement, Landowner shall pay to City a fee that shall be in addition to any other fee or charge to which the Property and the Project would otherwise be subject (herein, the "Public Benefit Fee ") in the sum of Thirty -Two Thousand Five Hundred Dollars ($32,500.00) per residential dwelling unit Developed as part of the Project, with the unpaid balance of said Public Benefit Fee increased beginning on January I, 2015, by the percentage increase in the CPI Index between the Effective Date and said January 1st date (the first "Adjustment Date ") and thereafter with the unpaid balance of said Public Benefit Fee increased on each subsequent January I during the Term of this Agreement (each, an "Adjustment Date ") by the percentage increase in the CPI Index in the year prior to the applicable Adjustment Date. The amount of the percentage increase in the CPI Index on the applicable Adjustment Dates shall in each instance be calculated based on the then most recently available CPI Index figures such that, for example, if the Effective Date of this Agreement falls on July 1 and the most recently available CPI Index figure on the first Adjustment Date (January 1 of the following year) is the CPI Index for November of the preceding year, the percentage increase in the CPI Index for that partial year (a 6 -month period) shall be calculated by comparing the CPI Index for November of the preceding year with the CPI Index for May of the preceding year (a 6 -month period). In no event, however, shall application of the CPI Index reduce the amount of the Public Benefit Fee (or unpaid portion thereof) below the amount in effect prior to any applicable Adjustment Date. Landowner shall pay the Public Benefit Fee on a per unit basis at the time each residential building permit is issued, or at Landowner's option and in Landowner's sole discretion, at the time each certificate of occupancy is issued. Notwithstanding any other provision set forth in this Agreement to the contrary, during the Term of this Agreement City shall not increase the Public Benefit Fee except pursuant to the CPI Index as stated in this Section 3.1. Landowner acknowledges by its approval and execution of this Agreement that it is voluntarily agreeing to pay the Public Benefit Fee, that its obligation to pay the Public Benefit Fee is an essential term of this Agreement and is not severable from City's obligations and Landowner's vesting rights to be acquired hereunder, and that Landowner expressly waives any constitutional, statutory, or common law right it might have in the absence of this Agreement to protest or challenge the payment of such fee on any ground whatsoever, including without limitation pursuant to the Fifth and Fourteenth Amendments to the United States Constitution, California Constitution Article I Section 19, the Mitigation Fee Act (California Government Code Section 66000 et seq.), or otherwise. In addition to any other remedy set forth in this Agreement for Landowner's default, if Landowner shall fail to timely pay any portion of the Public Benefit Fee when 4/29/2015 v2 3 1251052.2 3 -23 due City shall have the right to withhold issuance of any further building permits, occupancy permits, or other development or building permits for the Project." 2. Park Fees. Section 3.2.1, subdivision (iv), is hereby amended in its entirety to read as follows: "In -lieu of parkland dedication fees ( "Park In -Lieu Fees ") shall be paid to the City prior to the issuance of building permits. Payment of Park In -Lieu Fees shall be made for all units included on any final map(s) at the time that the first building permit is issued for any single unit included on a final map(s). However, at Landowner's option and in Landowner's sole discretion, Landowner may elect to defer payment(s) of Park In -Lieu Fees for some or all units contained on any final map(s) (the "Deferred Units ") until building permits are sought for the building or buildings containing those Deferred Units. In such cases, Landowner shall pay, in addition to the Park In -Lieu Fees for the Deferred Units, an interest charge in the amount of four percent (4 %) per annum for any Deferred Units in Phase 1 (as Phase I is shown on the approved phasing plan for the Project), and five percent (5 %) per annum for any Deferred Units in Phase 2 (as Phase 2 is shown on the approved phasing plan for the Project). The period in which the interest charge(s) shall apply to any particular Deferred Units shall begin at Landowner's election to defer payment of Park In -Lieu Fees for those Deferred Unit(s), and shall continue to accrue on a per annum basis until such time that Landowner actually pays the Park In -Lieu Fees for those particular unit(s) (the "Deferral Period "). The Park In -Lieu Fees for any Deferred Units shall be paid on a per -unit basis no later than upon the issuance of a building permit per individual building(s) in the Project. For example, if a building permit is sought for a building in Phase 1 that includes 100 Deferred Units, Park In -Lieu Fees plus the interest charge of four percent (4 %) per annum that accrued over the Deferral Period for those Deferred Units must be paid for those 100 Deferred Units before the building permit for that building can be issued. As another example, if a building permit is sought for a building in Phase 2 that includes 300 Deferred Units, Park In -Lieu Fees plus the interest charge of five percent (5 %) per annum that accrued over the Deferral Period for those Deferred Units must be paid for those 300 Deferred Units before the building permit for that building can be issued. The fee amount for Park In- Lieu Fees shall be calculated on a per -unit basis based on the pro -rated gross acreage of the final map minus any parkland dedication and applicable credits for recreational improvements approved by the City pursuant to the General Plan and the Subdivision Code within the area encompassed by the final map, then dividing the balance by the number of units contained in the area encompassed by that final map. For example, if a final map encompasses 10 acres of the 25.05 acre planned community (or 39.92% of the total acreage), the amount of the Park In- lieu Fees required to be paid on a per -unit would be 39.92% of the 13.62 acre parkland dedication requirement minus any parkland dedication and any approved credits for recreational improvements, divided by the number of units contained within that final map." 3. Full Force and Effect. Except as modified by this First Amendment, the Agreement shall remain in full force and effect. 4/29/2015 v2 M 1251052.2 3 -24 4. Recitals. The Recitals set forth above are true and correct and incorporated herein by reference. 5. Counterparts. This First Amendment may be signed by the Parties in different counterparts and the signature pages combined shall create a single document binding on all Parties. 6. Recordation. The City Clerk of City shall record this First Amendment in the Office of the County Recorder of the County of Orange within the period required by California Government Code section 65868.5 and City of Newport Beach Municipal Code section 15.45.100. The date of this First Amendment and the date of recordation of this First Amendment shall not modify or amend the Effective Date or the Termination Date of the Agreement. 4/29/2015 v2 [SIGNATURE PAGE FOLLOWS] 5 1251052.2 3 -25 LANDOWNERS SIGNATURE PAGE TO FIRST AMENDMENT TO DEVELOPMENT AGREEMENT "LANDOWNERS" UPTOWN NEWPORT JAMBOREE, LLC, a Delaware limited liability company IRZ Name: Title: TPG /TSG VENTURE I ACQUISITION, LLC, a Delaware limited liability company IC Title: TSG - PARCEL 1, LLC, a Delaware limited liability company IC 4/29/2015 v2 1251052.2 3 -26 CITY SIGNATURE PAGE TO FIRST AMENDMENT TO DEVELOPMENT AGREEMENT "CITY" CITY OF NEWPORT BEACH IC ATTEST: Leilani I. Brown, City Clerk APPROVED AS TO FORM: Aaron C. Harp, City Attorney 4/29/2015 v2 Edward D. Selich, Mayor 1251052.2 3 -27 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 2015, before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he /she executed the same in his/her authorized capacity, and that by his/her signature(s) on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 2015, before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he /she executed the same in his/her authorized capacity, and that by his/her signature(s) on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: 4/29/2015 v2 10 1251052.2 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Being a subdivision of Lots I and 2 of Tract No. 7953, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 310, Pages 7 to 11 inclusive, of Miscellaneous Maps, recorded of said County. 4/29/2015 v2 1 1251052.2 3 -29