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CITY COUNCIL AGENDA REPORT
City of Anaheim
PLANNING AND BUILDING DEPARTMENT
DATE: DECEMBER 20, 2022
FROM: PLANNING AND BUILDING DEPARTMENT
SUBJECT: ANNUAL REVIEW OF DEVELOPMENT AGREEMENT
NO. 99-01 FOR THE ANAHEIM GARDENWALK PROJECT
ATTACHMENT (Y/N): YES ITEM # 06
RECOMMENDATION:
That the City Council, by Motion, determine on the basis of the evidence submitted for the Anaheim GardenWalk Project, located in The Anaheim Resort, by STC GardenWalk LLC; GardenWalk Hotel I, LLC; and, Westgate Resorts Anaheim, LLC, that:
1. The property owners have complied in good faith with the terms and conditions of each of their respective portions of Development Agreement No. 99-01 for the 2022 review period; and,
2. The COVID-19 pandemic warrants an extension of time to comply with the obligations of Development Agreement No. 99-01, and that the deadline identified for Westgate Resorts Anaheim, LLC in said development agreement shall toll for one year.
DISCUSSION:
A Development Agreement is a contract between the City and property owner that provides certainty to the developer that the approved project will be exempt from future changes to zoning laws and requires the developer to provide benefits to the City in exchange for that certainty. In June 1999, the City of Anaheim and Pointe Anaheim, LLC executed Development Agreement No. 99-01 (Agreement), which governs the development of the Anaheim GardenWalk Project. The Agreement is included as Attachment 5.
The Anaheim GardenWalk Project is a specialty retail, dining, and entertainment center integrated with multiple hotels and a transportation center, on approximately
20.3-acres, located between Katella Avenue and Disney Way, west of Clementine Street. At full build-out, the project would consist of up to 439,600 square feet of retail, dining, and entertainment uses; a 3,200-space parking structure and transportation center; three hotels with up to 1,266 hotel rooms (including up to 400 vacation ownership units); and up to 216,820 square feet of hotel accessory uses.
Attachment 1 provides a Map Exhibit identifying the project area and each component of the project.
Anaheim GardenWalk Development Agreement (Annual Review) December 20, 2022
Following the execution of the Agreement, the original developer, Pointe Anaheim, LLC, and its successors in interest, subsequently assigned the Agreement to other responsible parties: STC GardenWalk LLC; GardenWalk Hotel I, LLC; and Westgate Resorts Anaheim, LLC. These three parties are each the property owner for their respective components of the Anaheim GardenWalk Project. In addition, the City Council approved subsequent amendments to the Agreement in February 2002, December 2004, January 2006, April 2006, March 2010, July 2011, August 2011, June 2013, and June 2019. In general, the amendments include modifications to the scope of development based on market realities and extended performance dates to reflect anticipated construction timetables.
Pursuant to the Agreement, the City Council is required to determine annually if the property owners have complied in good faith with the terms and conditions of the Agreement.
Demonstration of good faith compliance includes conformance with all terms and timing schedules set forth in the Agreement. If the Council finds that the property owner has demonstrated good faith compliance, the review for that period is complete. City staff has received Annual Review letters, which summarize each property owner’s status or activities undertaken to maintain good faith compliance with the obligations of the Agreement for the 2022 review period (Attachment Nos. 2, 3, and 4).
STC GardenWalk, LLC is responsible for the retail, dining, and entertainment center, the transportation center, and the parking structure components of the Anaheim GardenWalk project.
The public benefits provided by the Agreement included traffic improvements within The Anaheim Resort and a Police Substation within the Project, which were completed with the construction of the retail concourse. There are no outstanding obligations under the Agreement for STC GardenWalk, LLC.
GardenWalk Hotel I, LLC is responsible for the development of two hotels within the Anaheim GardenWalk Project. Construction of the first hotel, the 466-room JW Marriott Anaheim Resort, was completed and opened in August 2020. The Agreement, which the City Council previously extended by one year due to the COVID-19 pandemic, requires the second hotel to commence construction by November 12, 2023, and open by May 12, 2026. GardenWalk Hotel I, LLC indicates in their letter of request that they have been diligently working with potential hotel brands and are exploring potential layouts for the proposed hotel. They are on track to commence construction by the previously extended deadline.
Westgate Resorts Anaheim, LLC is responsible for the development of a 399-unit vacation ownership resort, which the developer will construct on top of the existing parking structure. The Agreement required the developer to obtain a building permit for construction of the timeshare resort by December 31, 2019; the developer did obtain a building permit on December 27, 2019.
The Agreement, which the City Council previously extended by one year due to the COVID-19 pandemic, requires that the developer complete construction and open for business within two years of the start of construction, or December 27, 2022. Westgate Resorts Anaheim, LLC submitted a letter to the City (Attachment No. 4) on November 30, 2022 citing the force majeure clause of the Development Agreement and requesting an additional one-year extension due to the Anaheim GardenWalk Development Agreement (Annual Review) December 20, 2022
COVID-19 pandemic. In addition, Westgate Resorts Anaheim, LLC indicated that they are exploring modification of prior project approvals, which they would submit to the City in 2023.
Staff confirmed that the property owners have complied with their obligations under the Agreement. Additionally, staff concurs with the assertion that the COVID-19 pandemic warrants an extension of time to comply with the obligations of the Agreement, and recommends that the deadline identified in the Agreement for Westgate Resorts Anaheim, LLC is extended by one year, to December 27, 2023. Therefore, staff recommends that the City Council determine that the property owners have complied in good faith with the terms and conditions of the Agreement for this review period and toll the deadlines identified in the Agreement for Westgate Resorts Anaheim, LLC for one year.
IMPACT ON BUDGET:
There is no budgetary impact. The property owners are paying the cost of this annual review.
Respectfully submitted,
Ted White
Planning and Building Director
Attachments:
1. Map Exhibit
2. STC Management Annual Review Letter
3. GardenWalk Hotel Annual Review Letter
4. Westgate Resorts Anaheim Annual Review Letter
5. Development Agreement No. 99-01 and Amendments