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HomeMy WebLinkAbout4. PLN-19-00005 - 12214 LakewoodSTAFF REPORT PLANNING DIVISION DATE: TO: SUBMITTED BY: REVIEWED BY: PREPARED BY: SUBJECT: LOCATION: ZONING: FEBRUARY 6, 2019 PLANNING COMMISSION ALDO E. SCHINDLER, DIRECTOR OF COMMUNITY DEVELOPMENT DAVID BLUMENTHAL, CITY PLANNER DAVID BLUMENTHAL, CITY PLANNER PLN-19-00005 (DEVELOPMENT AGREEMENT AMENDMENT) – A REQUEST FOR A SECOND AMENDMENT THE TIERRA LUNA (AKA, THE PROMENADE AT DOWNEY) DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DOWNEY, PCCP IRG DOWNEY, LLC., IRG DOWNEY, LLC., AND US VI DOWNEY, LLC. 12214 LAKEWOOD BLVD DOWNEY LANDING SPECIFIC PLAN REPORT SUMMARY The City of Downey previously entered into a Development Agreement with the developer and owner of the Promenade at Downey shopping center. At the August 2, 2017 Planning Commission meeting, staff recommended, and the Commission subsequently recommended an amendment to the Development Agreement, which was approved by the City Council on August 22, 2017. The owner has now requested a second amendment to the Development Agreement. The center is now 94% leased; as a result, the developer is working on conceptual plans for the next phase of development. Accordingly, ownership is asking for a second amendment to the Development Agreement to extend the term by 10 years. Based on the analysis contained in this report, staff is recommending the Planning Commission adopt the following titled resolution: A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF DOWNEY RECOMMENDING THAT THE CITY COUNCIL APPROVE A SECOND AMENDMENT TO THE TIERRA LUNA DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DOWNEY, AND PCCP IRG DOWNEY, LLC, IRG DOWNEY, LLC, AND US VI DOWNEY, LLC TO AMEND THE TERM OF THE AGREEMENT. BACKGROUND The City of Downey (“City”) sold the property now known as The Promenade at Downey shopping center to PCCP IRG Downey, LLC, and IRG Downey, LLC (collectively “Developer”) on November 30, 2003. The City and the Developer entered into a Development Agreement for Agenda Page 1 12214 Lakewood Blvd. – PLN-19-00005 February 6, 2019 – Page 2 the Promenade at Downey shopping center on March 15, 2012. The Development Agreement dictated the land to be developed, the timeline for development, the scope of development and covenants on various aspects of the development. “Development Agreements” are tools used by government agencies and private parties to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of developments. The Legislature of the State of California adopted the "Development Agreement Statute" Sections 65864, et seq., of the Government Code. The Development Agreement Statute authorizes municipalities to enter into an agreement with any person having a legal or equitable interest in real property, to provide for the development, of such property, and to establish certain development rights therein. The partnership between the City and Developer produced the Promenade at Downey shopping center, which hosts a 656,000-square-foot shopping center and entertainment district, and has emerged as the area’s new gathering spot and destination by merging retail, dining, and entertainment use on one site. The development also created 1,000 jobs through construction and continual operation of retail and restaurants. The Planning Commission, acting in an advisory capacity, must review the proposed amendments to the Development Agreement to ensure that the amendments are consistent with the City’s General Plan and the Downey Landing Specific Plan. Based on its consideration of the proposed amendments to the Development Agreement, the Planning Commission shall make a recommendation to the City Council. The City Council will consider the Planning Commission’s recommendations in reviewing the proposed amendments. Under state law, to approve an amendment to a Development Agreement, the City Council must find that the proposed amendments are consistent with the City’s General Plan and the Downey Landing Specific Plan (Government Code section 65967.5(b)). Pursuant to these requirements, notice of the pending public hearing was published in the Downey Patriot and mailed to all property owners within 500’ of the subject site on January 24, 2019. DISCUSSION The developer and former owner of the Promenade, PCCP IRG Downey, LLC and IRG Downey, LLC (“Former Owner”) sold the property to US VI Downey, LLC (“New Owner”) on September 21, 2018 and entered into an Operating Agreement with the New Owner to cooperatively develop the remaining 21 acres of vacant land adjacent to the Promenade fronting Bellflower Boulevard. The Former Owner currently leases the remaining 21 acres adjacent to the Promenade from the City of Downey. The Former Owner wishes to start the conceptual site plan, design, marketing, and land assembly of the vacant 21 acres to compliment the Promenade. With this in mind, they have requested additional time to develop the site. The Development Agreement provides for the build-out of the adjacent 21 acres and the adaptive reuse of the former NASA and Vultee buildings that front onto Lakewood Boulevard. The City has been interested in retaining the historical context of the NASA and Vultee buildings and providing an end use that could serve the community and compliment the center. The Operating Agreement entered into between the New and Former Owners allows them to work cooperatively in the future build out of the entire Promenade area. Currently, the Development Agreement is set to expire on March 14, 2019; however, in order to plan appropriately for a project of this size they have requested a 10-year extension of the term of the Development Agreement, which would start if the City Council approves the request. A time extension will Agenda Page 2 12214 Lakewood Blvd. – PLN-19-00005 February 6, 2019 – Page 3 also allow the City to work with the New and Former Owners on the final conceptual development plans for the total combined site. DEVELOPMENT REVIEW COMMITTEE This request did not require review by the City’s Development Review Committee. ENVIRONMENTAL ANALYSIS Staff has reviewed the proposed application for compliance with the California Environmental Quality Act (CEQA). Upon completion of this review, it has been determined that this request is categorically exempt from CEQA, pursuant to Guideline Section No. 15301 (Class 1, Existing Facilities). Categorical Exemptions are projects, which have been determined not to have a significant effect on the environment and have been exempted from the requirements of CEQA. Class 1 consists of projects that involve no or negligible expansion of the existing building or use. Inasmuch as amending the Development Agreement will not alter the permitted uses for the site, result in the construction of new buildings, or increase the intensity of the existing uses, staff feels that this request qualifies for this exemption. FINDINGS In order to approve the amendment to the Development Agreement, the following two findings need to be adopted: A.The requested amendment to the Development Agreement is consistent with the City’s adopted General Plan. The subject site has a General Plan Land Use Designation of Mixed Use, which is intended to provide a variety of uses (retail, office, restaurant, entertainment) within close proximity to each other. Amending the development agreement achieves this goal by allowing the continual growth of the Promenade at Downey shopping center. Particularly, this amendment will allow the City, New and Former Owners time to work on the development plan for the vacant 21-acres and ensure the appropriate mix of uses is provided. B.The requested amendment to the Development Agreement is consistent with the Specific Plan. The development agreement is for the construction and operation of the Promenade at Downey shopping center. This amendment will extend the timeframe of the Development Agreement, but will not alter the permitted uses, building locations, parking requirements, landscaping, or other development standard. CORRESPONDENCE As of the date that this report was printed, staff has not received any correspondence regarding this application. Agenda Page 3 12214 Lakewood Blvd. – PLN-19-00005 February 6, 2019 – Page 4 CONCLUSION Based on the analysis contained within this report staff is concluding that allowing a second amendment to the Development Agreement would be a prudent measure to ensure the continual growth of the Promenade at Downey shopping center. Furthermore, staff is concluding that the proposed amendment is consistent with the General Plan and the Downey Landing Specific Plan. As such, staff is recommending that the Planning Commission recommend that the City Council approve a second amendment to the Tierra Luna Development Agreement between the City of Downey, PCCP IRG Downey, LLC, IRG Downey, LLC and US VI Downey, LLC to add a 10-year extension of the term of the Development Agreement. EXHIBITS A.Maps B.Draft Resolution C.Amendment to Tierra Luna Development Agreement D.Second Amendment to the Tierra Luna Development Agreement Agenda Page 4 12214 Lakewood Blvd. – PLN-19-00005 February 6, 2019 – Page 5 MAPS Location Aerial Photograph Agenda Page 5 RESOLUTION NO. 19- A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF DOWNEY RECOMMENDING THAT THE CITY COUNCIL APPROVE A SECOND AMENDMENT TO THE TIERRA LUNA DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DOWNEY, AND PCCP IRG DOWNEY, LLC, IRG DOWNEY, LLC, AND US VI DOWNEY, LLC TO AMEND THE TERM OF THE AGREEMENT. THE PLANNING COMMISSION OF THE CITY OF DOWNEY DOES RESOLVE AS FOLLOWS: SECTION 1. The Planning Commission of the City of Downey does hereby find, determine and declare that: A. On November 30, 2003, the City of Downey (“City”) sold the property now known as the Promenade at Downey shopping center to PCCP IRG Downey, LLC, and IRG Downey, LLC (collectively “Developer”); and, B. On March 15, 2012 the City and the Developer entered into a Development Agreement for the Promenade at Downey shopping center; and, C. On August 22, 2017, the City Council of the City of Downey approved the first amendment to the Development Agreement; and, D. The developer and former owner of the Promenade, PCCP IRG Downey, LLC and IRG Downey, LLC (“Former Owner”) sold the property to US VI Downey, LLC (“New Owner”) on September 21, 2018; and, E. The City and Former and Current Owners now wish to extend the Development Agreement for ten years; and, F. On January 24, 2019, notice of the pending application published in the Downey Patriot and mailed to all property owners within 500' of the subject site; and, G. The Planning Commission held a duly noticed public hearing on February 6, 2019, and after fully considering all oral and written testimony and facts and opinions offered at the aforesaid public hearing adopted this resolution. SECTION 2. The Planning Commission further finds, determines and declares the environmental impact of the proposed project has been reviewed and has been found to be in compliance with the California Environmental Quality Act (CEQA) and is categorically exempt from CEQA, pursuant to Guideline Section No. 15301 (Class 1, Existing Facilities). SECTION 3. Having considered all of the oral and written evidence presented to it at said public hearings regarding the amendment to the development agreement, the Planning Commission further finds, determines and declares that: 1. The requested amendment to the Development Agreement is consistent with the City’s adopted General Plan. The subject site has a General Plan Land Use Designation of Mixed Use, which is intended to provide a variety of uses (retail, office, restaurant, Agenda Page 6 Resolution No. 19- Downey Planning Commission 12214 Lakewood Blvd. – PLN-19-00005 February 6, 2019 – Page 2 entertainment) within close proximity to each other. Amending the development agreement achieves this goal by allowing the continual growth of the Promenade at Downey shopping center. Particularly, this amendment will allow the City and New and Former Owners time to work on the development plan for the vacant 21-acres and ensure the appropriate mix of uses is provided. 2.The requested amendment to the Development Agreement is consistent with the Specific Plan. The development agreement is for the construction and operation of the Promenade at Downey shopping center. This amendment will extend the timeframe of the Development Agreement, but will not alter the permitted uses, building locations, parking requirements, landscaping, or other development standard. SECTION 4. Based upon the findings set forth in Sections 1 through 3 of this resolution, the Planning Commission of the City of Downey hereby recommends that the City Council of the City of Downey approve the amendments to the Development Agreement, which are outlined in Exhibit A. SECTION 5. The Secretary shall certify the adoption of this Resolution. PASSED, APPROVED AND ADOPTED this 6th day of February, 2019. Steven Dominguez, Chairman City Planning Commission I HEREBY CERTIFY that the foregoing is a true copy of a Resolution adopted by the Planning Commission of the City of Downey at a regular meeting thereof, held on the 6th day of February, 2019, by the following vote, to wit: AYES: COMMISSIONERS: NOES: COMMISSIONERS: ABSENT: COMMISSIONERS: ABSTAIN: COMMISSIONERS: Mary Cavanagh, Secretary City Planning Commission Agenda Page 7 Agenda Page 8 Agenda Page 9 Agenda Page 10 Agenda Page 11 Agenda Page 12 Agenda Page 13 Agenda Page 14 Agenda Page 15 Agenda Page 16 Agenda Page 17 Agenda Page 18 Agenda Page 19 Agenda Page 20 Agenda Page 21 Agenda Page 22 Agenda Page 23 Agenda Page 24 Agenda Page 25 Agenda Page 26 Agenda Page 27 Agenda Page 28 Agenda Page 29 Agenda Page 30 Agenda Page 31 Agenda Page 32 Agenda Page 33 Agenda Page 34 Agenda Page 35 Agenda Page 36 Agenda Page 37 Agenda Page 38 Agenda Page 39 Agenda Page 40 Agenda Page 41 Agenda Page 42 Agenda Page 43 Agenda Page 44 Agenda Page 45 Agenda Page 46 Agenda Page 47 Agenda Page 48 Agenda Page 49 Agenda Page 50 Agenda Page 51 Agenda Page 52 Agenda Page 53 Agenda Page 54 Agenda Page 55 Agenda Page 56 Agenda Page 57 Agenda Page 58 Agenda Page 59 Agenda Page 60 Agenda Page 61 Agenda Page 62 Agenda Page 63 Agenda Page 64 Agenda Page 65 Agenda Page 66 Agenda Page 67 Agenda Page 68 Agenda Page 69 Agenda Page 70 Agenda Page 71 Agenda Page 72 Agenda Page 73 Agenda Page 74 Agenda Page 75 Agenda Page 76 Agenda Page 77 Agenda Page 78 Agenda Page 79 Agenda Page 80 Agenda Page 81 Agenda Page 82 Agenda Page 83 Agenda Page 84 Agenda Page 85 Agenda Page 86 Agenda Page 87 Agenda Page 88 Agenda Page 89 Agenda Page 90 Agenda Page 91 Error! 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Unknown document property name. 12908308.2 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Downey Attn: City Clerk 11111 Brookshire Avenue Downey, CA 90241 ______________________________________________________________________________ SECOND AMENDMENT TO TIERRA LUNA DEVELOPMENT AGREEMENT by and among CITY OF DOWNEY, PCCP IRG DOWNEY, LLC, IRG DOWNEY, LLC, and US VI DOWNEY, LLC This Second Amendment to Tierra Luna Development Agreement ("Second Amendment") is made and entered into effective as of ____________, 2019, by and among the CITY OF DOWNEY, a California charter city ("City"), PCCP IRG DOWNEY, LLC, a Delaware limited liability company, as to an undivided 90% interest, IRG DOWNEY, LLC, a California limited liability company, as to an undivided 10% interest (collectively, "Developer"), and US VI Downey, LLC, a Delaware limited liability company ("Buyer"). City, Developer and Buyer are collectively referred to herein as the "Parties." RECITALS A. Whereas, on March 15, 2012, the Parties entered into the Tierra Luna Development Agreement ("Development Agreement"); B. Whereas, the Development Agreement allowed Developer to develop the Property with either the Base Project or the Enhanced Project; C. Whereas, on September 13, 2017, the parties entered into the First Amendment to the Tierra Luna Development Agreement ("First Amendment"); D. Whereas, Developer was required by Section 6.1 of the Development Agreement to make an election in writing during the first five years of the Development Agreement's term if Developer wished to develop the Enhanced Project on the Property; E. Whereas, Developer did not make such an election and Developer codified in writing its decision to develop the Base Project on the Property in the First Amendment; Agenda Page 92 12908308.2 2 F. Whereas, the Developer Owned Property has been sold to Buyer, but Developer has retained the Developer Leased Property; and G. Whereas as part of the sale of the Developer Owned Property, Developer and Buyer have entered into an Operating Agreement, dated September 21, 2018 ("Operating Agreement"). NOW, THEREFORE, based upon the foregoing Recitals, which are incorporated herein by reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 1. TERM OF THE AGREEMENT 1.1 Extension of Term. City, Developer and Buyer hereby agree to extend the Term of the Development Agreement pursuant to the authorization in Section 2.1.1 of the Development Agreement. The extended term of the Development Agreement shall commence upon the Effective Date of this Second Amendment and shall continue thereafter for ten (10) years. 2. MISCELLANEOUS 2.1 Notices. Section 15.28 of the Development Agreement, which was previously amended in the First Amendment, shall be further amended to add a notice address for Buyer. Such notices and communications as described in Section 15.28 shall be given to Buyer at the address set forth below: If to Buyer: c/o Northwood Investors LLC 11355 W. Olympic Blvd., Suite 100 Los Angeles, California 90064 Attn: Daniel Palmieri Facsimile: (310) 943-1685 With a copy to: Pircher Nichols & Meeks LLP 1901 Avenue of the Stars, Suite 1200 Los Angeles, California 90067 Attn: Real Estate Notices (DBG/ADK/5080001.5) Facsimile: (310) 201-8922 2.2 Defined Terms: Capitalized terms that are not specifically defined in this Second Amendment shall have the meaning assigned to those terms in the Development Agreement or the First Amendment. 2.3 Full Force and Effect. All applicable terms and provisions of the Development Agreement, the First Amendment and the Operating Agreement remain in full force and effect, except those that are specifically modified in this Second Amendment. [SECOND AMENDMENT CONTINUED ON NEXT PAGE] Agenda Page 93 12908308.2 3 2.4 Counterparts: This Second Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. IN WITNESS WHEREOF, City, Developer and Buyer hereto have executed this Second Amendment the date and year first above written. "CITY" CITY OF DOWNEY, a Municipal corporation of the State of California By: Name: Its: "DEVELOPER" PCCP IRG DOWNEY, LLC, a Delaware limited liability company By: PCCP LB IRG Downey, LLC, its Managing Member By: Name: Its: "DEVELOPER" IRG DOWNEY, LLC, a California limited liability company By: IRG III, LLC By: S.L. Properties, Inc. By: Name: Its: Agenda Page 94 12908308.2 4 "BUYER" US VI DOWNEY, LLC, a Delaware limited liability company By: US VI CP, LP, a Delaware limited partnership, its Sole Member By: BVK US VI CA GP, LLC, a Delaware limited liability company, its General Partner By:______________________ Name: __________________ Title: ___________________ By:______________________ Name: ___________________ Title: _____________________ Agenda Page 95 12908308.2 5 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 ____________________, before me, ____________________________, a Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Agenda Page 96 12908308.2 6 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 ____________________, before me, ____________________________, a Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Agenda Page 97 12908308.2 7 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 ____________________, before me, ____________________________, a Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Agenda Page 98 12908308.2 8 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 ____________________, before me, ____________________________, a Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Agenda Page 99 12908308.2 9 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 ____________________, before me, ____________________________, a Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Agenda Page 100