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CITY COUNCIL AGENDA REPORT
City of Anaheim
PLANNING AND BUILDING DEPARTMENT
DATE: DECEMBER 17, 2024
FROM: PLANNING AND BUILDING DEPARTMENT
SUBJECT: ANNUAL REVIEW OF DEVELOPMENT AGREEMENT
NO. 99-01 FOR THE ANAHEIM GARDENWALK PROJECT
ATTACHMENT (Y/N): YES ITEM # 08
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion, determine on the basis of the evidence submitted by STC GardenWalk LLC; GardenWalk Hotel I, LLC; and, Westgate Resorts Anaheim, LLC, that 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 2024 review period for the Anaheim GardenWalk Project located in The Anaheim Resort.
DISCUSSION:
A Development Agreement is a contract between the City of Anaheim (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 No. 4 provides a Map Exhibit identifying the project area and each component of the project.
Annual Review of Development Agreement No. 99-01 for the Anaheim GardenWalk Project December 17, 2024
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 and modifications to the Agreement in February 2002, December 2004, January 2006, April 2006, March 2010, July 2011, August 2011, June 2013, June 2019, and March 2024. In general, these updates include amendments 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 2024 review period (Attachment Nos. 1, 2, and 3).
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. The Anaheim Police Department and STC GardenWalk are currently collaborating on the relocation of the Police Substation to a more visible area 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 and subsequently extended by another two years due to an increase in financing costs, requires the second hotel to commence construction by November 12, 2025, and open by May 12, 2028. GardenWalk Hotel I, LLC indicates in their letter of request that they have been diligently working with potential hotel brands and have completed initial site plans and layouts for the proposed hotel. They have indicated that they are monitoring interest rates and will keep the City apprised of efforts to submit construction drawings.
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. In March 2024, the City Council approved a new performance timeframe which requires Westgate Resorts Anaheim, LLC to obtain building permits by April 15, 2025, and open two years after the commencement of construction. Westgate Resorts Anaheim, LLC submitted a letter to the City (Attachment No. 3) on November 15, 2024 stating that while they are currently in Annual Review of Development Agreement No. 99-01 for the Anaheim GardenWalk Project December 17, 2024
compliance with the Agreement terms, they will submit an application to amend the Agreement prior to the April 2025 deadline in order to extend the timeframes for performance. Westgate Resorts Anaheim, LLC indicates that they are continuing to pursue a national hotel “Flag” and exploring innovative building design types to submit to the City for permitting.
Staff confirmed that the property owners have complied with their obligations under the Agreement. Therefore, staff recommends that the City Council determine that the property owner has complied in good faith with the terms and conditions of the Agreement relevant for this review period.
IMPACT ON BUDGET:
There is no budgetary impact. The property owners are paying for the processing costs associated with this annual review.
Respectfully submitted,
Heather Allen
Acting Planning and Building Director
Attachments:
1. STC Management Annual Review Letter
2. GardenWalk Hotel Annual Review Letter
3. Westgate Resorts Anaheim Annual Review Letter
4. Map Exhibit
5. Development Agreement No. 99-01 and Amendments