Banning City Council
March 10, 2026

SPECIAL PROVISIONS TO BASE CONTRACT FOR
SALE AND PURCHASE OF NATURAL GAS (FORM NAESB Standard 6.3.1)

BY AND BETWEEN MAAS ENERGY WORKS, LLC AND CITY OF BANNING DATED MARCH 14, 2026
The following Special Provisions shall govern and control over the foregoing provisions of the General Terms and Conditions to the Base Contract between Maas Energy Works, LLC (“Party A”) and City of Banning (“Party B”) dated March 14, 2026, and shall be considered incorporated therein for all purposes. Any reference to this Base Contract shall include the following Special Provisions. Capitalized terms used, but not otherwise defined, in the following Special Provisions shall have the meanings ascribed to them in the Contract.

The General Terms and Conditions of the Base Contract are modified as follows:

1.2 Replace Section 1.2 (Written Transaction Procedure) with the following:

Written Transaction Procedure:

1.2.The parties will use the following Transaction Confirmation procedure. Should the parties come to an agreement regarding a Gas purchase and sale transaction for a particular Delivery Period, the parties shall execute a Transaction Confirmation for such transaction. The parties acknowledge that their agreement will not be binding until both parties have executed the Transaction Confirmation, and neither party shall have a right, interest or claim with respect to such agreement prior to the mutual execution of the Transaction Confirmation.

1.3 Delete the first three sentences of Section 1.3.

3.5 Add the following after Section 3.4 as new Section 3.5:
“No amount shall be due by Seller to Buyer under Section 3.2 with respect to any Month in any calendar quarter during the Delivery Period unless Seller delivers to Buyer less than eighty percent (80%) of the aggregate Contract Quantity for such calendar quarter. If Seller delivers to Buyer less than eighty percent (80%) of the aggregate Contract Quantity for any calendar quarter during the Delivery Period, then solely for purposes of calculating the Lost Generation for each Month of such calendar quarter, Seller shall be deemed to have been obligated to deliver a quantity of RNG equal to eighty percent (80%) of the lesser of (a) the Contract Quantity for the applicable Month, or (b) one-third (1/3) of the aggregate Contract Quantity for such calendar quarter.”

7.6 Add the following phrase to the end of the next to last sentence of Section 7.6:
“; provided, however, that the finality of all invoices and billings shall not apply to taxes, and the responsible party under this Contract shall continue to be responsible for such amounts”.

8.2 Delete the last sentence of Section 8.2 and replace it with the following:
“EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED IN THIS CONTRACT,

SELLER HEREBY NEGATES ALL EXPRESS, IMPLIED, OR STATUTORY REPRESENTATIONS AND

WARRANTIES OF ANY KIND, INCLUDING THOSE RELATING TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.”

8.3 Add the following to the end of Section 8.3:
“(a) Party A. Notwithstanding any other provisions in this Contract, including, without limitation, any and all limitations on damages, Party A agrees to indemnify Party B and save it harmless from all Claims from any and all third parties, to the extent arising from or out of: (a) any Party A-provided falsehood, material inaccuracy or misleading statement or information in any supporting documentation, including, without limitation, in registrations or any attestation related to the eligibility or qualification of RINs or LCFS Credits, based on RNG sold to Party B under this Contract; (b) Party A’s gross negligence or willful misconduct or violation of law; or (c) Party A’s breach of this Contract. (b) Party B. Notwithstanding any other provisions in this Contract, including, without limitation, any and all limitations on damages, but subject to applicable law, Party B agrees to indemnify Seller and save it harmless from all Claims from any and all third parties, to the extent arising from or out of: (a) any Party B-provided falsehoods, misrepresentations, material inaccuracies or misleading statement in any supporting documentation, including, without limitation, registrations or any attestation related to RINs or LCFS Credits, based on RNG purchased from Party A 891

under this Contract; (b) Party B’s gross negligence or willful misconduct or violation of law; or (c) Party B’s breach of this Contract.

Neither party shall be obligated to indemnify the other party and save such other party harmless to the extent any Claim arises out of or in connection with any intentional act, grossly negligent act or failure to act on the part of such other party, its officers, agents, or employees.”

10.1 Add the following after the second sentence Section 10.1:
“Neither party shall have reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party unless the other party has failed to timely pay or perform its obligations to the other party under this Contract.”

10.3.1 Insert the following at the end of Section 10.3.1 (Early Termination Damages Apply):
“If the determination pursuant to clauses (x) and (y) above of the difference between the Market Value(s) and Contract Value(s) of all the Terminated Transactions does not result in an amount being owed to the Non-Defaulting Party, it shall be deemed that such difference is zero.”

11.2 Add the following to the end of the first sentence of Section 11.2:
“; and (vi) any cause (including, but not limited to, any of the causes described in this Section 11.2) that (a) affects the production of RNG by any RNG Source for which the fueling supply equipment at the CNG Station has been registered in connection with a LCFS Pathway for such RNG Source and (b) is not reasonably within the control of the owner or operator of such RNG Source”.
12 Delete the second sentence of Section 12 and replace it with the following:
“The rights of either party pursuant to: (i) Section 7.6, (ii) Section 10, (iii) Section 13, (iv) Section 15, (v) the obligations to make payment hereunder, (vi) the obligation of either party to indemnify the other pursuant hereto, and (vii) any other provisions of this Contract that, by their nature or as set forth in this Contract, survive the termination of the Base Contract or any transaction, shall survive the termination of the Base Contract or any transaction.”

15.8 Delete Section 15.8 in its entirety and replace it with the following:
“(a) Each party represents and warrants to the other party as follows on the date it executes any Transaction Confirmation hereunder:
(i) General. It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; the execution, delivery and performance of this Contract are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like to which it is subject; this Contract constitutes its legally valid and binding obligations enforceable against it in accordance with its terms (subject to applicable bankruptcy, reorganization, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application regardless of whether enforcement is sought in a proceeding in equity or at law); there is not pending or, to its knowledge, threatened against it any legal or regulatory proceedings that could materially adversely affect its ability to perform its obligations under this Contract. (ii) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction Confirmation and as to whether that Transaction Confirmation is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as a recommendation to enter into such Transaction Confirmation; it being understood that information and explanations related to the terms and conditions of a Transaction Confirmation shall not be considered a recommendation to enter into such Transaction Confirmation.

No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction Confirmation. (iii) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts the terms, conditions and risks of that Transaction Confirmation. It is also capable of assuming, and assumes, the risks of that Transaction Confirmation. (iv) Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction Confirmation. Each party understands and acknowledges that the other party may, either in connection with 892

entering into a transaction or from time to time thereafter, engage in open market transactions that are designed to hedge or reduce the risks incurred by it in connection with such transaction and that the effect of such open market transactions may be to affect or reduce the value of such transaction. (b) Each party agrees and acknowledges that it is not a “utility” as such term is used in the United States Bankruptcy Code (including 11 U.S.C. § 366) nor a provider of last resort. (c) Each party acknowledges that it has had the opportunity to review and negotiate this Contract with the benefit of legal counsel of its own choice, and this Contract shall be considered for all purposes as prepared through the joint efforts of the parties and shall not be construed against one party or the other as a result of the manner in which this Contract was negotiated, prepared, drafted or executed.”

15.9 Insert the following at the end of Section 15.9:
“In this Contract, unless otherwise required by the context in which any term appears: (i) all monetary figures are in United States dollars, (ii) the singular shall include the plural and vice versa; (iii) each tense shall be construed to include the masculine, feminine and neuter tenses; (iv) “person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency; (v) the words “including”, “include” and “includes” shall be deemed to be followed by the phrase “without limitation;” (vi) unless otherwise provided, references in a Transaction Confirmation to “Special Conditions” shall be to the special conditions of such Transaction Confirmation; (vii) the words “herein,” “hereof,” and “hereunder” shall refer to the Transaction Confirmation in which they appear as a whole and not to any particular section; and (viii) reference to any document, statute, regulation or other law means such document, or law, in each case as the same may be amended, modified, supplemented or replaced from time to time.”

15.10 Add (a) in the second line of Section 15.10, the words “or any financial information provided by a party under the terms of this Contract” after the words “the terms of any transaction”, (b) in the third line of Section 15.10, the word “Affiliates, consultants, financing and credit providers and secured parties” before the word “employees”, and (c) the following after the last sentence of the first paragraph of Section 15.10:
“With respect to any financial statements provided in connection with the Contract, the receiving party shall keep such financial statements confidential for a period of three years following the date such financial statements were received from the disclosing party. Notwithstanding anything to the contrary, (a) with the consent sent of the disclosing party (not to be unreasonably withheld), each party may provide such information to financial institutions and other persons providing or expressing interest in providing debt financing or refinancing, lease financing and/or credit support in connection with such party’s operations, and to persons that are potential equity participants or transferees or purchasers of such party, provided that such person executes a confidentiality agreement limiting further disclosure and use of such information substantially consistent with the obligations under the confidentiality agreements to which the parties (or their Affiliates) are bound (the “Confidentiality Obligations”), and (b) each receiving party may provide such information to its board members, equity owners, employees, legal counsel, and accountants consistent with its internal governance practices, subject to the Confidentiality Obligations. For the purposes of this Section 15.10, an Affiliate shall not be considered a third party, provided that such Affiliate agrees to be bound by the Confidentiality Obligations. Each party shall be responsible for compliance with the Confidentiality Obligations by each person to whom such party discloses any confidential information of the other party.” 15 Add the following after Section 15.12 as new Section 15.13 through new Section 15.14:
“15.13. Commodity Trade Option Representations. The parties agree that all transactions under this Contract are not derivative contracts and each shall either be a forward contract within the meaning of the Commodity Exchange Act, as amended, (the “Act”) and the regulations of the Commodity Futures Trading Commission (“CFTC”), or qualify for the commodity trade option exemption under CFTC Regulation § 32.3, and in reliance upon such agreement:
(a) Forward Contract. The parties agree that as of the date any transaction is entered into between the parties:
(i) each party represents to the other that it is a commercial market participant with respect to the specified commodity;
(ii) each party represents to the other that it intends to make or take physical delivery of the specified nonfinancial commodity; and
(iii) to the extent a transaction includes any volumetric optionality, the holder of such optionality represents to the other party (a) that such optionality is primarily intended to address physical factors (such as weather, environmental factors, customer demand, available production, transport, 893

shipping, operational constraints, or other physical factors) or regulatory requirements that reasonably influence demand for, or the supply of, the specified nonfinancial commodity; and (b) that such optionality is not primarily intended to address price risk. (b) Commodity Trade Option. To the extent the transaction is, or is deemed to be, a commodity option, the parties agree that as of the date the transaction is entered into between the parties:
(i) the seller of the option represents to the buyer of the option that in connection with this transaction, the seller of the option is either (a) an eligible contract participant as defined in section 1a(18) of the Act and the regulations of the CFTC, or (b) a producer, processor, commercial user of or a merchant handling the commodity that is the subject of this transaction, or the products or byproducts thereof, and is offering or entering into this transaction solely for purposes related to its business as such;
(ii) the buyer of the option represents to the seller of the option that in connection with this transaction the buyer of the option is a producer, processor, commercial user of or a merchant handling the commodity that is the subject of this transaction or the products or byproducts thereof and is offering or entering into this transaction solely for purposes related to its business as such; and
(iii) each party represents to the other that the option, if exercised, would result in the sale of an exempt commodity for immediate or deferred delivery.

15.14. Counterparts; Electronic Signatures. This Contract, including any Transaction Confirmations, may be executed in as many counterparts as are necessary and all executed counterparts together shall constitute one and the same agreement. The electronic transmission of a signed original counterpart of this Contract and transmission, or re-transmission, of an electronically-signed counterpart shall be deemed to be the same as delivery of a signed original counterpart of this Contract.”

15.15 Insurance. The parties acknowledge that Party A will have no physical presence at facilities owned or operated by Party B in connection with this Contract. Party A shall be solely responsible for the health and safety of its employees, agents, and subcontractors and shall comply with all applicable federal, state, and local laws relating to worker safety, including without limitation Cal-OSHA. Throughout the term of this Contract and any Transaction Confirmation, Party A shall procure and maintain, at its own expense commercially reasonable insurance coverage customarily maintained by companies engaged in the business of producing and marketing renewable natural gas, including commercial general liability, automobile liability (if applicable), and workers’ compensation insurance as required by law. Such insurance shall be maintained in amounts consistent with Party A’s standard corporate insurance program. a. Commercial General Liability. Commercial general liability insurance maintained by Party A in the ordinary course of its business, with limits of not less than $2,000,000 per occurrence and $4,000,000 aggregate, covering bodily injury, property damage, contractual liability, and products/completed operations. b. Automobile Liability. Business automobile liability insurance maintained by Party A in the ordinary course of its business, with limits of not less than $1,000,000 per accident for owned, hired, and non-owned vehicles used, to the extent Party A performs physical activities in connection with this Contract. c. Workers’ Compensation and Employer’s Liability. Workers’ compensation insurance in compliance with California statutory requirements and employer’s liability insurance as required by law. Such coverage shall be maintained in accordance with applicable law.

15.16 General Insurance Conditions.
a. Waiver of Subrogation. To the extent Party A performs physical activities at any facilities owned by Party B in connection with this Contract, Party A shall use commercially reasonable efforts to obtain a waiver of subrogation in favor of Party B under its applicable insurance policies. b. Evidence of Insurance. Upon request, Party A shall provide Party B with certificates of insurance, required endorsements required under this Section, and upon request, complete copies of policies evidencing compliance with this Section when necessary to verify coverage following a claim. c. Insurer Qualifications and Notice of Cancellation. All policies shall be issued by insurers admitted in California with a minimum A.M. Best rating of A:VII. Party A shall use commercially reasonable efforts to provide prompt notice of cancellation or material reduction.
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d. Primary and Non-Contributory. To the extent Party A performs physical activities at Party B owned facilities in connection with this Contract, Party A’s insurance required under this Contract shall be primary and non-contributory to any insurance maintained by Party B with respect to claims arising from such physical activities.. e. No Reduction Without Consent. Party A shall maintain the minimum insurance limits required under this Section during the term of this Contract. Nothing herein shall require Party B consent for routine renewal, replacement, or modification of policies, provided that Party A maintains insurance consistent with this Section f. Notice of Claims. Party A shall promptly notify Party B of any third party claim arising from Party A’s performance under this Contract that seeks recovery from Party B or alleges liability on the part of Party B. g. No Special Limitations; Higher Limits. Party A’s insurance policies shall satisfy the minimum coverage requirements set forth in this Section. Nothing herein shall require Party A to provide coverage beyond the limits expressly required herein, and any broader coverage or higher limits maintained by Party A shall not increase its obligations under this Contract.
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TRANSACTION CONFIRMATION
Effective Date: March 14, 2026
Contract No. City of Banning-01
This Transaction Confirmation is subject to that certain Base Contract for Sale and Purchase of Natural Gas, including the Special Provisions attached thereto, dated concurrent herewith, between Seller and Buyer (the “Base Contract”).

Buyer and Seller may each be referred to in this Transaction Confirmation as a “Party” and collectively as the “Parties”. This Transaction Confirmation is binding upon execution by the Parties. Capitalized terms used in this Transaction Confirmation have the respective meaning given in this Transaction Confirmation (including in Special Condition 13) or in the General Terms and Conditions. For purposes of this Transaction Confirmation, “Gas,” as used in the General Terms and Conditions, includes RNG.

SELLER:

Maas Energy Works, LLC
1730 South Street
Redding, CA 96001
Attn: Daryl Maas
Phone: (530) 710-8545
BUYER:

City of Banning
Attn: Department of Transportation
99 E. Ramsey Street
Banning, CA 92220
Phone: (951) 922-3100
Contract Price:

The “Contract Price” ($/MMBtu) equals the Gas Index Price plus the EA Value. “Gas Index Price” means, for each MMBtu of RNG delivered hereunder in a given Month during the Delivery Period, the price published on the first Business Day of such Month in Platts Gas Daily in the table “Final Daily Price Survey – Platts Locations” under the column “Midpoint” for the geographic location closest in proximity to the Delivery Point for such MMBtu of RNG.
“EA Value” means, for each MMBtu of RNG delivered hereunder in a given Month during the Delivery Period, the sum of the following:
(a) For each RIN generated from such MMBtu and separated by Buyer, twenty and one-half percent (20.5%) of the gross proceeds received by Seller from its sale of such RIN; (b) For each Brown Gas LCFS Credit generated by Seller (or its designee) from such MMBtu, if any, one hundred percent (100%) of the gross proceeds received by Seller from its sale of such Brown Gas LCFS Credit; and (c) For each Green Gas LCFS Credit generated by Seller (or its designee) from such MMBtu, twenty and onehalf percent (20.5%) of the gross proceeds received by Seller from its sale of such Green Gas LCFS Credit.

Table 1 below summarizes EA Value percentages and the number of Green Gas LCFS Credits to be generated from each MMBtu of RNG purchased, sold, and dispensed in accordance with this Transaction Confirmation based on the annual carbon intensity benchmarks under the LCFS as of the Effective Date.

Delivery Period: Begin: March 14, 2026 End: March 13, 2031. Upon expiration of the Delivery Period, this Agreement shall automatically terminate and shall not renew or extend. Any renewal, extension, or new agreement for continued deliveries shall require the prior approval of the City Council of the City of Banning and must be set forth in a new written agreement executed by the parties.
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Performance Obligation:

Subject to the terms of this Transaction Confirmation, Seller shall have a Firm obligation to sell and deliver, and Buyer shall have a Firm obligation to purchase and receive, the Contract Quantity of RNG (including all associated Environmental Attributes) at the Delivery Points on each Day of the Delivery Period. Notwithstanding anything to the contrary in this Contract, Buyer acknowledges that neither RNG nor Gas will be purchased and sold hereunder at the CNG Station Meter, and Buyer is solely responsible for procuring the Gas to be dispensed as CNG at the CNG Station.

Contract Quantity:

The “Contract Quantity” for each Month of the Delivery Period is the quantity of RNG (in MMBtus) equal to one hundred percent (100%) of the CNG (in MMBtus) dispensed as Transportation Fuel at the CNG Station in such Month, provided that the Contract Quantity for each Month shall not exceed an amount equal to the then-current Maximum Daily Quantity multiplied by the number of calendar days in such Month. “Maximum Daily Quantity” means, subject to adjustment pursuant to Special Condition 2(b), 156 MMBtus per day.

Delivery Point(s):

The Delivery Point for RNG shall be the applicable Receiving Transporter’s meter located at the interconnection between the Commercial Distribution System and the RNG Source that produced the applicable RNG, such interconnection being the location where such RNG is first introduced into a Commercial Distribution System, provided that with respect to any RNG being stored by or for the benefit of Seller in a Gas storage facility in accordance with RFS, Seller can elect for the Delivery Point to be the meter used to nominate Gas stored at such facility into a Commercial Distribution System.

SPECIAL CONDITIONS

1. Invoices and Payments: The Gas Index Price portion of the Contract Price shall be paid pursuant to Section 7 of the General Terms and Conditions. With respect to the EA Value portion of the Contract Price, the “Payment Date” for purposes of Section 7.2 of the General Terms and Conditions and with respect to any proceeds received by Seller in any Month from the sale of RINs or LCFS Credits generated from the RNG purchased and sold hereunder shall be the last Day of the Month immediately following each Month. With respect to each Month during the Delivery Period, Seller shall, on or before the last Day of the immediately following Month, provide to Buyer a report substantiating its calculation of EA Value for such Month with respect to RNG purchased and sold to Buyer hereunder, including any reconciliation with respect to amounts previously paid to Buyer hereunder (with any overpayments to Buyer either deducted by Seller from its next payment to Buyer or promptly repaid by Buyer).

2. Forecasts, CNG Station Meter Statements, and CNG Station:
a. Forecasts and CNG Station Meter Statements. Prior to the start of each Month during the Delivery Period, Buyer shall provide to Seller a non-binding estimate of the Contract Quantity for such Month. On the twentieth (20th) day of each Month during the Delivery Period, Buyer shall provide to Seller a non-binding update to such estimate. As soon as possible after the end of each Month during the Delivery Period, Buyer shall notify Seller of the amount of CNG (in MMBtus) dispensed as Transportation Fuel at the CNG Station in such Month, as measured by the CNG Station Meter and reported to Buyer on its utility invoice for such Month. Buyer shall make commercially reasonable efforts to provide Seller with access to (i) Gas delivery data from the CNG Station Meter prior to Buyer’s receipt of utility invoices, including authorizing utilities to provide Seller with real-time access to such data, and/or (ii) Gas receipt and/or CNG dispensing data that Buyer has or develops at the CNG Station, including real-time access to such data. 897

b. Adjustments to Maximum Quantity. Effective upon the first day of each calendar quarter during the Delivery Period, Seller shall have the right, exercisable by giving Notice thereof to Buyer, to adjust the Maximum Daily Quantity, provided that in no event shall the adjusted Maximum Daily Quantity be less than 156 MMBtus per day.

3. RINs and LCFS Credits: The Parties acknowledge and agree that the separation of K2 RINs and the generation of LCFS Credits from the RNG and Environmental Attributes purchased and sold hereunder is of fundamental importance for each Party to realize commercial benefit from the transactions contemplated by this Transaction Confirmation. To that end with respect to the Contract Quantity:
a. Seller shall cause the applicable party (e.g., the owner or operator of an RNG Source) to timely perform all requirements of a “biogas producer” and “RNG producer”, as applicable, under the RFS, including (i) generating K1 RINs, and (ii) transferring such K1 RINs; b. Buyer shall timely perform all the requirements of a “RNG RIN separator” under the RFS, including (i) promptly separating in Buyer’s EMTS Account K2 RINs from the K1 RINs transferred to Buyer, and (ii) transferring – free and clear of all liens, encumbrances, and claims – all such K2 RINs to Seller’s EMTS Account within three (3) Business Days after separation. If Buyer fails, in Seller’s reasonable discretion, to timely perform all such “RNG RIN separator” requirements, then to the extent allowed under the RFS Seller shall be automatically deemed appointed as Buyer’s agent for all purposes of carrying out all such “RNG RIN separator” requirements as deemed necessary by Seller, provided that (x) Seller’s cost to perform such requirements, including third-party verification costs, will be withheld from any amounts owed to Buyer hereunder, (y) to the maximum extent allowed by applicable law, Buyer releases and waives any and all claims of any kind, known or unknown, past or future, against Seller, its Affiliates, and their respective employees and representatives, for Seller’s acts or omissions in the course of performing such requirements (with respect to such waiver Buyer certifies that it has read and understood California Civil Code § 1542 – “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” – and knowingly and voluntarily waives the provisions of California Civil Code § 1542, if in any way applicable, as well as the provisions of all comparable, equivalent, or similar principles of the common or statutory law), and (z) nothing in Special Condition 3(b) shall be construed as releasing or waiving Buyer from its obligations under this Contract, including, but not limited to, Section 8.3(b) of the General Terms and Conditions; and
c. Subject to Buyer’s timely performance of its obligations under this Transaction Confirmation that are necessary for the generation of LCFS Credits, Seller (or its designee(s)) shall quarterly generate LCFS Credits in accordance with the LCFS.

Seller shall use commercially reasonable efforts to maximize the gross dollar amount received by Seller from the sale by Seller of the K2 RINs separated from, and LCFS Credits generated from, the RNG and Environmental Attributes purchased and sold hereunder, taking into account (i) market circumstances existing at the time, (ii) any separate agreement or strategy agreed upon in writing by the Parties relating to the sale of RINs and LCFS Credits, and (iii) all other variables that a reasonably prudent person professionally marketing RINs and LCFS Credits in the United States of America would consider in evaluating transactions (including, but not limited to, delaying the sale of any K2 RINs and LCFS Credits that have a reasonable likelihood of invalidation as a result of a pending or anticipated EPA or CARB enforcement action or other objective criteria until such issues have been conclusively resolved), with Buyer acknowledging that the foregoing covenant does not require Seller to obtain the highest possible price. Seller is authorized to aggregate and sell the K2 RINs and LCFS Credits generated from the RNG delivered and received hereunder with other K2 RINs and LCFS Credits, as applicable, that Seller owns. If, concurrent with its marketing and selling of K2 RINs and LCFS Credits generated from RNG and Environmental Attributes purchased and sold 898

hereunder, Seller is marketing and selling K2 RINs and LCFS Credits generated from other RNG, Seller shall treat RINs and LCFS Credits generated from RNG purchased and sold hereunder no less favorably than RINs and LCFS Credits generated from other RNG.

With respect to all RNG and Environmental Attributes purchased and sold hereunder, (A) Seller shall be responsible for securing and maintaining Pathways in order to generate K1 RINs and LCFS Credits therefrom, (B) as between the Parties, (1) Seller shall be the “first fuel reporting entity” for purposes of the LCFS and accepts all LCFS responsibilities as such, (2) Buyer shall be responsible for the Registration of the CNG Station under the RFS, (3) Seller shall be responsible for registering all fueling supply equipment at the CNG Station pursuant to Section 95483.2(b)(8) of the LCFS, and (4) Seller shall be responsible for all record keeping and reporting under the RFS and LCFS, provided that Buyer shall be responsible for any record keeping and reporting under the RFS and LCFS to the extent the same must be performed by a party eligible to separate K2 RINs under the RFS and/or the owner or operator of the CNG Station, (C) Seller (or its designee) and not Buyer shall be the “generator” of LCFS Credits, (D) Buyer shall have no right to the K2 RINs separated and LCFS Credits generated therefrom, (E) Buyer shall timely provide to Seller all information, documentation and support – including, but not limited to, affidavits and attestations signed by Buyer, site visits of the CNG Station – as may be necessary for any Registration, regulatory reporting, and credit generation or verification (including under a quality assurance plan) under the RFS and/or LCFS, (F) each Party shall take such action as is reasonably required consistent with this Transaction Confirmation for each Party to timely and efficiently perform its obligations under this Special Condition 3 and for Seller to market and sell the K2 RINs and LCFS Credits, and (G) each Party shall not take any action that results in the invalidity of RINs or LCFS Credits generated therefrom.

4. Alternative RNG Supply: Notwithstanding anything to the contrary in this Transaction Confirmation or the General Terms and Conditions, Seller may at its sole discretion deliver RNG sourced from any facility, including projects other than Seller’s own RNG Source (“Alternative Source RNG”), provided that such RNG otherwise qualifies as renewable natural gas under Applicable Law and meets the gas quality specifications hereunder of the receiving transporter.

To the extent that any MMBtu of Alternative Source RNG delivered hereunder (i) does not generate California Low Carbon Fuel Standard (LCFS) Credits, (ii) generates LCFS Credits with a Carbon Intensity score greater than -250 gCO₂e/MJ, or (iii) generates Renewable Identification Numbers (RINs) with any designation other than D3 RINs, Seller shall provide Buyer with a cash settlement intended to place Buyer in the same economic position it would have been in had such MMBtu generated LCFS Credits with a Carbon Intensity of -250 gCO₂e/MJ and generated D3 RINs (collectively, the “Make-Whole Payment”).

The Make-Whole Payment for each applicable Month shall be calculated as follows:
a. Seller shall determine (i) the number of LCFS Credits that would have been generated from such Alternative Source RNG assuming a Carbon Intensity of -250 gCO₂e/MJ, using the applicable energy conversion factors under the LCFS regulations in effect for such Month, and (ii) the number of D3 RINs that would have been generated from such Alternative Source RNG using the applicable energy equivalency values and methodologies under the Renewable Fuel Standard regulations in effect for such Month; b. Such deemed LCFS Credits and deemed D3 RINs shall be valued, respectively, at the simple average of the LCFS Credit prices and D3 RIN prices actually realized by Seller from the sale of LCFS Credits and D3 RINs (if any) during such Month, or, if Seller did not sell LCFS Credits or D3 RINs, as applicable, during such Month, at the simple average of the prices published as LCFS Credit or D3 RIN price for the current quarter and year under the heading “Carbon” in the “Biofuels and Blending Components” section of the daily Argus US Products reports in such Month. The Make-Whole Payment for each applicable Month shall equal (x) the sum of (A) the value of such deemed LCFS Credits multiplied by the applicable “Green Gas LCFS Credits” percentage set forth in Table 1, plus (B) the value of such deemed D3 RINs multiplied by the applicable “RIN” 899

percentage set forth in Table 1, minus (y) the EA Value actually calculated and payable to Buyer for such Alternative Source RNG for such Month. In no event shall the Make-Whole Payment be less than zero.

Any Make-Whole Payment shall be included in the EA Value reconciliation and paid to Buyer on the applicable Payment Date in accordance with Section 1 (Invoices and Payments) above. For the avoidance of doubt, Buyer shall experience no reduction in amounts otherwise payable to Buyer under this Transaction Confirmation as a result of the delivery of Alternative Source RNG in lieu of Seller’s own RNG Source.

5. Seller’s Representations and Warranties: In addition to the representations and warranties elsewhere in this Contract, Seller represents and warrants to Buyer at the time of any delivery of RNG to Buyer under this Transaction Confirmation that:
a. Seller has not (directly or indirectly) traded, remarketed, given away, claimed, or otherwise sold separately, and shall not trade, remarket, give away, or otherwise sell separately, the Environmental Attributes from the RNG delivered hereunder;
b. the RNG delivered to Buyer hereunder has been generated and injected into a Commercial Distribution System at the applicable Delivery Point in accordance with the requirements of the RFS and LCFS; c. the RNG Source(s) that produced the RNG delivered to Buyer hereunder meet the eligibility standards for Registration under the RFS and LCFS; and
d. Seller has not (directly or indirectly) taken any action that would invalidate Environmental Attributes associated with RNG delivered hereunder (or the K1 RINs or LCFS Credits generated therefrom or the K2 RINs separated therefrom), including the ability to generate, separate, or transfer RINs and/or LCFS Credits therefrom.

6. Buyer’s Representations and Warranties: In addition to the representations and warranties elsewhere in this Contract, Buyer represents and warrants to Seller at the time of any delivery of RNG to Buyer under this Transaction Confirmation that:
a. Buyer has not (directly or indirectly) traded, remarketed, given away, claimed, or otherwise sold separately, and shall not trade, remarket, give away, or otherwise sell separately, the Environmental Attributes from the RNG delivered hereunder;
b. the Registration of the CNG Station under the RFS is complete, and the CNG Station meets the eligibility standards for Registration under the LCFS; and
c. Buyer has not (directly or indirectly) taken any action that would invalidate Environmental Attributes associated with RNG delivered hereunder (or the K1 RINs or LCFS Credits generated therefrom or the K2 RINs separated therefrom), including the ability to generate, separate, or transfer RINs and/or LCFS Credits therefrom.

In addition to the representations and warranties elsewhere in this Contract, Buyer represents and warrants to Seller that, at the time Buyer transfers any K2 RINs to Seller, Buyer holds the title to such K2 RINs free and clear of any liens or other encumbrances or title defects, and Buyer will warrant and defend such title against the claims of any third party or parties.

7. Performance Failures Prior to Early Termination: In the event of a breach by a Party of its obligation to deliver or receive, as applicable, RNG or any other covenant, representation, or warranty hereunder resulting in a complete or partial inability or failure to generate K1 RINs or LCFS Credits from the Contract Quantity or separate K2 RINs therefrom and transfer such K2 RINs to Seller, it shall be deemed a breach for purposes of Section 3.2 of the General Terms and Conditions. In such event, the amount due to the non-breaching Party under Section 3.2 of the 900

General Terms and Conditions and subject to Section 3.5 of the General Terms and Conditions (if applicable) shall be calculated as follows:
a. For any such breach by Seller (which shall not constitute an Additional Event of Default under Special Condition 8(a) provided Seller timely pays the amount due under this Special Condition 7), an amount equal to the positive difference, in any, between (i) the EA Value that Buyer did not realize due to such breach by Seller, with such unrealized EA Value calculated using the Lost Generation, RIN Price, and LCFS Price, and (ii) an amount equal to (A) the net proceeds received by Buyer in connection with any RINs and LCFS Credits generated, if any, outside this Transaction Confirmation from Gas that Buyer procures, if any, following such breach by Seller to replace the RNG associated with Seller’s breach minus (B) the additional reasonable costs Buyer incurs in connection with generating and selling such RINs and LCFS Credits; and
b. For any such breach by Buyer, an amount equal to the positive difference, if any, between (i) the gross sale proceeds that Seller did not realize due to such breach by Buyer minus the associated EA Value that Buyer would have received, with such proceeds and associated EA Value calculated using the Lost Generation, RIN Price, and LCFS Price, and (ii) an amount equal to (A) the net proceeds received by Seller in connection with any RINs and LCFS Credits generated, if any, outside this Transaction Confirmation from the RNG associated with Buyer’s breach minus (B) the additional reasonable costs Seller incurs in connection with generating and selling such RINs and LCFS Credits.

For purposes of this Special Condition 7, the following definitions shall be used:
“Lost Generation” means the number of RINs or LCFS Credits, as applicable, that would have been generated or separated, as applicable, if the breaching Party had not so breached its obligation to deliver or receive, as applicable, RNG or its other covenant, representation, or warranty hereunder. “RIN Price” means the simple average of the D3 RIN mean price published by the Oil Price Information Service in the OPIS Carbon Market Report under the heading “U.S. RINs (cts/RIN)” for the Month or Months in which the breach occurred.
“LCFS Price” means the simple average of the LCFS Credits mean prices published by the Oil Price Information Service in the OPIS Carbon Market Report under the heading “California Low Carbon Fuel Standard” for the Month or Months in which the breach occurred.

The amount of compensation due under this Special Condition 7 shall be payable four Business Days after presentation of the performing Party’s invoice, which shall set forth the basis upon which such amount was calculated.

8. Additional Events of Default and Remedies for Events of Default:
a. Additional Events of Default. Subject to Special Condition 7(a), the following are Additional Events of Default (each being an Event of Default under Section 10.2(ix) of the General Terms and Conditions) for purposes of this Transaction Confirmation:
i. a breach by Buyer of its obligations hereunder to take delivery of and purchase the Contract Quantity from Seller each Month, dispense such quantity as CNG Transportation Fuel at the CNG Station in such Month in accordance with the RFS and LCFS, and separate and transfer the K2 RINs from such quantity to Seller;
ii. a breach by Buyer of any other Buyer covenant, representation, or warranty hereunder resulting in an inability or failure to generate LCFS Credits or separate K2 RINs from the Contract Quantity and transfer such K2 RINs to Seller;
901

iii. a breach by Seller of its obligation hereunder to deliver and sell the Contract Quantity to Buyer each Month;
iv. a breach by Seller of any other Seller covenant, representation or warranty hereunder resulting in an inability or failure to generate K1 RINs or LCFS Credits from the Contract Quantity; v. a Party committing any fraudulent act or making any misrepresentation or material inaccuracy or misleading statement in any supporting documentation delivered by such Party under this Transaction Confirmation; or
vi. a breach by a Party of any representation, warranty, or covenant of this Transaction Confirmation, other than as addressed in this Special Condition 8(a), and a failure to cure such breach within thirty (30) days after receiving Notice of such breach from the other Party. b. Early Termination Damages.
i. The second (2nd) sentence of the first (1st) paragraph of Section 10.3.1 of the General Terms and Conditions (Early Termination Damages Apply) shall be deleted in its entirety and replaced with the following text:
“The Non-Defaulting Party shall liquidate and accelerate each Terminated Transaction at its Market Value, so that the positive difference, if any, of the Contract Value minus the Market Value of such Terminated Transaction(s) shall be due to:
(a) the Buyer under the Terminated Transaction(s), if Buyer is the Non-Defaulting Party and Seller is the Defaulting Party with respect to such Terminated Transactions, and (b) the Seller under the Terminated Transaction(s), if Seller is the Non-Defaulting Party and Buyer is the Defaulting Party with respect to such Terminated Transactions.” ii. If Buyer terminates this Transaction Confirmation due to an Event of Default by Seller, then for the operation of Special Condition 8(b)(i) the second paragraph of Section 10.3.1 of the General Terms and Conditions (Early Termination Damages Apply) shall be deleted in its entirety and replaced with the following text:
“(i) For the purposes of this Section 10.3.1, “Contract Value” means the monetary value of the EA Value had the Parties performed in accordance with this Transaction Confirmation until the end of the Termination Performance Term, with (A) the historical Monthly average quantity of the RNG purchased and sold hereunder during the twelve (12) Months prior to the Early Termination Date (and without considering any period prior to the commencement of the Delivery Period) used to determine the number of RINs and LCFS Credits that would have been generated during the Termination Performance Term, and (B) such RINs and LCFS Credits being deemed monetized at the applicable RIN Market Price and LCFS Credits Price. (ii) For the purposes of this Section 10.3.1, “Market Value” means the monetary value of RINs and LCFS Credits allocated to Buyer under a replacement contract(s) similar to this Transaction Confirmation for the purchase of the RNG that would have been sold by Seller hereunder, for the period beginning on the Early Termination Date and ending at the end of the Termination Performance Term, that Buyer was able to secure after exercising commercially reasonable efforts to enter into a replacement contract(s) with a creditworthy seller and using the same quantity of RNG as used to calculate the Contract Value and with such RINs and LCFS Credits being deemed monetized at the applicable RIN Market Price and LCFS Credits Price. If, after exercising commercially reasonable efforts to enter into a replacement contract(s) with a 902

creditworthy seller for ninety (90) days after the Early Termination Date, Buyer is unable to enter into a commercially reasonable replacement contract(s) with a creditworthy seller for any portion of such RNG or period of time remaining in the Termination Performance Term, the “Market Value” with respect to such portion or period of time shall be deemed to be zero. (iii)Any extension(s) of the term of a transaction to which parties are not bound as of the Early Termination Date (including but not limited to “evergreen provisions”) shall not be considered in determining Contract Values and Market Values.
(iv) “RIN Market Price” means 95% of the simple average of the D3 RIN mean prices for the newest available RIN vintage published by the Oil Price Information Service in the OPIS Carbon Market Report under the heading “U.S. RINs (cts/RIN)” for the one-year period ending on the Early Termination Date.
(v) “LCFS Credits Price” means 95% of the simple average of the LCFS Credits mean prices published by the Oil Price Information Service in the OPIS Carbon Market Report under the heading “California Low Carbon Fuel Standard” for the one-year period (or portion thereof to the extent such prices have not been so published for such one-year period) ending on the Early Termination Date.
(vi) “Termination Performance Term” means the shorter of (a) the one-year period immediately following the Early Termination Date, or (b) the remainder of the Delivery Period.” iii. If Seller terminates this Transaction Confirmation due to an Event of Default by Buyer, then for the operation of Special Condition 8(b)(i) the second paragraph of Section 10.3.1 of the General Terms and Conditions (Early Termination Damages Apply) shall be deleted in its entirety and replaced with the following text:
“(i) For the purposes of this Section 10.3.1, “Contract Value” means the gross sale proceeds from the sale of RINs and LCFS Credits generated from RNG purchased and sold hereunder had the Parties performed in accordance with this Transaction Confirmation until the end of the Termination Performance Term minus the associated EA Value that Buyer would have been entitled to, with (A) the historical Monthly average quantity of the RNG, and the weightedaverage carbon intensity of such RNG (using the reasonably anticipated carbon intensity to the extent a carbon intensity has not yet been approved under the LCFS for any portion of such RNG), purchased and sold hereunder during the twelve (12) Months prior to the Early Termination Date (and without considering any period prior to the commencement of the Delivery Period) used to determine the number of RINs and LCFS Credits that would have been generated during the Termination Performance Term, and (B) such RINs and LCFS Credits being deemed monetized at the applicable RIN Market Price and LCFS Credits Price. (ii) For the purposes of this Section 10.3.1, “Market Value” means the monetary value of RINs and LCFS Credits allocated to Seller under a replacement contract(s) similar to this Transaction Confirmation for the sale of the RNG that would have been sold to Buyer hereunder, for the period beginning on the Early Termination Date and ending at the end of the Termination Performance Term, that Seller was able to secure after exercising commercially reasonable efforts to enter into a replacement contract(s) with a creditworthy buyer and using the same quantity of RNG and carbon intensity as used to calculate the Contract Value and with such RINs and LCFS Credits being monetized at the applicable RIN Market Price and LCFS Credits Price.

If, after exercising commercially reasonable efforts to enter into a replacement contract(s) with a creditworthy buyer for ninety (90) days after the Early Termination Date, Seller is unable to enter into a commercially reasonable replacement contract(s) with a creditworthy buyer for any 903

portion of such RNG or period of time remaining in the Termination Performance Term, the “Market Value” with respect to such portion or period of time shall be deemed to be zero. (iii)Any extension(s) of the term of a transaction to which parties are not bound as of the Early Termination Date (including but not limited to “evergreen provisions”) shall not be considered in determining Contract Values and Market Values.
(iv) “RIN Market Price” means 95% of the simple average of the D3 RIN mean prices for the newest available RIN vintage published by the Oil Price Information Service in the OPIS Carbon Market Report under the heading “U.S. RINs (cts/RIN)” for the one-year period ending on the Early Termination Date.
(v) “LCFS Credits Price” means 95% of the simple average of the LCFS Credits mean prices published by the Oil Price Information Service in the OPIS Carbon Market Report under the heading “California Low Carbon Fuel Standard” for the one-year period (or portion thereof to the extent such prices have not been so published for such one-year period) ending on the Early Termination Date.
(vi) “Termination Performance Term” means the shorter of (a) the one-year period immediately following the Early Termination Date, or (b) the remainder of the Delivery Period.”

9. No-Fault Early Termination Rights:
a. Change in Law. If a legislative, executive, judicial, administrative, or regulatory body materially changes or updates any applicable law, regulation, rule, protocol, or interpretative guidance that results either in a material adverse impact on a Party’s ability to comply with the RFS or LCFS without incurring substantial and material additional costs or reduced benefits or in a material reduction in the number of RINs or LCFS Credits capable of being generated from the RNG purchased and sold hereunder (each, a “Change in Law”), then, promptly upon written request by the affected Party, the Parties shall enter into good faith negotiations to amend this Transaction Confirmation to address the effects of the Change in Law for the purpose of maintaining the original intent and relative allocation of risk, benefits, and rewards under this Transaction Confirmation prior to the Change in Law. If the Parties fail to agree upon such an amendment to this Transaction Confirmation within sixty (60) days after the affected Party’s written request, or such other time period as agreed in writing by the Parties, the affected Party may terminate this Transaction Confirmation by providing Notice to the other Party to such effect. b. Prohibitive Action. Upon the occurrence of (i) any action by a governmental authority that renders the RFS or LCFS illegal, unconstitutional, or unenforceable, or (ii) the issuance of an order, legislation, decision, or other legally binding action (outside of either Party’s control, and through no fault or failure of either Party) that makes it impossible for the RNG purchased and sold hereunder to generate RINs or LCFS Credits, then either Party may terminate this Transaction Confirmation by providing Notice to the other Party to such effect.
c. Early Termination Damages Do Not Apply. With respect to an early termination under this Special Condition 9, (i) termination damages with respect to this Transaction Confirmation shall be limited to any amounts owed (whether or not then due) by each Party with respect to all RNG delivered and received between the Parties under this Transaction Confirmation on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts, for which payment has not yet been made by the Party that owes such payment under this Transaction Confirmation, and (ii) there shall be no damages with respect to this Transaction Confirmation for the difference between the Market Value and Contract Value as set forth in Section 10.3.1 of the General Terms and Conditions. 904

10. Section 45Z: To the extent dispensation as CNG at the CNG Station of RNG purchased and sold hereunder could generate any production tax credits under Section 45Z of the Internal Revenue Code (or any successor or replacement provisions thereto), Buyer shall have no right to such production tax credits and Buyer shall reasonably cooperate with Seller (or its designee) so that Seller (or its designee) can generate and realize the value of such production tax credits.

11. Indexes: If an index used to calculate a price or value under this Transaction Confirmation (“Original Index”) ceases to be published or is not published for any period applicable to calculation of such price, the Parties shall in good faith meet and promptly agree on a replacement index within ten Business Days after the date the Original Index ceases to be published. Such replacement index shall be as comparable as possible to the Original Index.

12. Disputes: Unless otherwise agreed in writing signed by the Parties, each Party shall diligently continue to perform its obligations under the Contract during the pendency of any disputes or arbitration proceedings so long as all undisputed amounts payable hereunder have been paid.

13. Definitions:
“Book and Claim” means indirect accounting as set forth in Section 95488.8(i)(2) of the LCFS. “Brown Gas LCFS Credit” means the number of LCFS Credits that would have been generated by Seller from the dispensation as CNG by Buyer at the CNG Station of a MMBtu of RNG purchased and sold hereunder if such MMBtu had a carbon intensity equal to the then-current carbon intensity as determined by CARB for “Compressed Natural Gas from Pipeline Average North American Fossil Natural Gas” or, if such carbon intensity is no longer determined by CARB, its functional equivalent. Buyer acknowledges that because the carbon intensity standards under Section 95484 of the LCFS decline each year, Brown Gas LCFS Credits may not be generated from the entire Contract Quantity purchased and sold hereunder. “CARB” means the California Air Resources Board or its successor. “CNG” means compressed natural Gas.
“CNG Station” means the CNG fueling station at the location set forth in Table 2 below, at which Gas is withdrawn from a Commercial Distribution System physically connected to the applicable Delivery Point, converted into CNG and dispensed for use in California as a Transportation Fuel, wherein such facility would meet the requirements for K2 RIN separation and LCFS Credits generation if the withdrawn Gas is matched and bundled with Environmental Attributes of RNG.
“CNG Station Meter” means the utility meter that is (a) located at the physical connection between the CNG Station and the local Gas distribution system, and (b) used to measure withdrawals of Gas dispensed as CNG at the CNG Station.
“Commercial Distribution System” means a commercial Gas distribution system physically connected by pipeline to the applicable Delivery Point.
“EMTS Account” means the EPA Moderated Transaction System Account for RINs. “Environmental Attributes” means, for each MMBtu of RNG, renewable fuel attributes and/or greenhouse gas emission reduction recognition in any form (including verified emission reductions, voluntary emission reductions, offsets, allowances, credits, avoided compliance costs, emission rights, and authorizations under any law or regulation, or any emission reduction registry, trading system, or reporting or reduction program for greenhouse gas emissions that is established, certified, maintained, or recognized by any international, governmental, or nongovernmental agency) associated with RNG and necessary to separate K2 RINs under the RFS or generate LCFS Credits under the LCFS. “Environmental Attributes” do not include (i) any energy, capacity, reliability, or other power 905

attributes from a generating project; (ii) investment tax credits, production tax credits, or other tax credits associated with the construction or operation of energy projects and other financial incentives in the form of credits, reductions, or allowances associated with an energy project that are applicable to a state or federal income taxation obligation; (iii) fuel-related subsidies or “tipping fees” that may be paid to accept certain fuels, or local subsidies received by the dairy operator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits; or (iv) emission reduction credits encumbered or used by a generating project for compliance with local, state or federal operating and/or air quality permits.
“EPA” means the United States Environmental Protection Agency or its successor. “Green Gas LCFS Credit” means (a) the number of LCFS Credits generated by Seller from the dispensation as CNG by Buyer at the CNG Station of a MMBtu of RNG purchased and sold hereunder assuming, assuming such RNG has a carbon intensity equal to -250 gCO2e/MJ minus (b) the number of Brown Gas LCFS Credits, if any, associated with such MMBtu of RNG.
“K1 RIN” means a RIN that is an “Assigned RIN” under the RFS. “K2 RIN” means a RIN that is a “Separated RIN” under the RFS. “LCFS” means the California Low Carbon Fuel Standard, or as the context may require, the regulations thereunder, as set forth in §95480 et seq. of Title 17 of the California Code of Regulations, as may be subsequently amended, modified, or restated from time to time.
“LCFS Credit” means a credit generated and traded under the LCFS, with each credit representing one metric ton of carbon dioxide equivalent emissions reduced.
“LCFS Pathway” means a CARB-approved fuel pathway pursuant to the LCFS for RNG purchased and sold hereunder (including any applicable Book and Claim requirements) as necessary for the generation of LCFS Credits associated with the dispensation of such RNG as CNG Transportation Fuel. “Pathways” means each of the LCFS Pathway(s) and the RFS Pathway. “Registration” means registration of any RNG Source, Parties, RNG, the CNG Station, or Pathways, as applicable, with the EPA, CARB, or other governmental or certifying entity, as applicable, such that the RNG purchased and sold hereunder is eligible to generate K1 RINs and separate K2 RINs under the RFS and to generate LCFS Credits under the LCFS.
“RFS” means the federal Renewable Fuel Standard Program under the Energy Policy Act of 2005, and the Energy Independence and Security Act of 2007 and implementing regulations, including, without limitation, 40 C.F.R.

Part 80, Subparts A, E and M, as the same may be amended, modified, restated from time to time. “RFS Pathway” means an EPA-approved renewable fuel pathway pursuant to the RFS for RNG purchased and sold hereunder as necessary for the generation of K1 RINs therefrom. “RIN” means a renewable identification number generated to represent a volume of renewable fuel under and in accordance with the RFS.
“RNG” means methane derived from biogas, or synthetic natural gas derived from renewable resources, including the organic portion of municipal solid waste, which (a) has been upgraded to meet standards for injection to a natural gas common carrier pipeline, or for use in natural gas vehicles, natural gas equipment, or production of renewable hydrogen, and (b) satisfies (i) the definition of “RNG” under the RFS, and (ii) the definition of “biomethane” under the LCFS.
906

“RNG Source” means, with respect to a MMBtu of RNG purchased and sold hereunder, the RNG production facility that produced such MMBtu.
“Transportation Fuel” means CNG derived from RNG that qualifies for the separation of K2 RINs under the RFS and the generation of LCFS Credits under the LCFS.

TABLE 1
RINs and LCFS Credits
Year
Percentage Used to Calculate EA Value
Green Gas
RIN Brown Gas LCFS Credits**
LCFS Credits*
Green Gas
LCFS Credits
2026 20.50% 100% 20.50% 0.30687
2027 20.50% 100% 20.50% 0.30555
2028 20.50% 100% 20.50% 0.30424
2029 20.50% 100% 20.50% 0.30293
2030 20.50% 100% 20.50% 0.30161
2031 20.50% 100% 20.50% 0.29753
* because the carbon intensity standards under the LCFS decline each year, Brown Gas LCFS Credits may not be generated each year
** per MMBtu of RNG dispensed as CNG Transportation Fuel based on a carbon intensity of -250 gCO2e/MJ and the annual carbon intensity benchmarks under the LCFS as of the Effective Date; does not include Brown Gas LCFS Credits
TABLE 2
CNG Stations
CNG Station
Meter ID
Distribution
Company Location Approximate Daily CNG Dispensation
16248679 SoCalGas 176 E. Lincoln St. Banning,
CA 92220 156 MMBtus
[Remainder of Page Intentionally Left Blank; Signature Page Follows] 907

IN WITNESS WHEREOF, the Parties have signed this Transaction Confirmation in multiple counterparts, effective as of the Effective Date.

Seller: Maas Energy Works, LLC
By: Daryl Maas
Title: CEO
Date:

Buyer: City of Banning
By: City Manager
Title: Elizabeth Gibbs
Date:
908

TRANSACTION CONFIRMATION
Effective Date: March 14, 2026
Contract No. City of Banning-01
This Transaction Confirmation is subject to that certain Base Contract for Sale and Purchase of Natural Gas, including the Special Provisions attached thereto, dated concurrent herewith, between Seller and Buyer (the “Base Contract”).

Buyer and Seller may each be referred to in this Transaction Confirmation as a “Party” and collectively as the “Parties”. This Transaction Confirmation is binding upon execution by the Parties. Capitalized terms used in this Transaction Confirmation have the respective meaning given in this Transaction Confirmation (including in Special Condition 5) or in the General Terms and Conditions. Concurrent with the execution of this Transaction Confirmation, the Parties are executing that certain Transaction Confirmation, dated concurrent herewith, under which Seller purchases RNG from Buyer at the Delivery Points (the “RNG TC”).

SELLER:

City of Banning
Attn: Department of Transportation
99 E. Ramsey Street
Banning, CA 92220
Phone: (951) 922-3100
BUYER:

Maas Energy Works, LLC
1730 South Street
Redding, CA 96001
Attn: Daryl Maas
Phone: (530) 710-8545
Contract Price ($/MMBtu): Gas Index Price
Delivery Period: Begin: Concurrent with the
commencement of the “Delivery Period” under the RNG
TC
End: Concurrent with the end of the “Delivery Period”
under the RNG TC
Performance Obligation:

Subject to the terms of this Transaction Confirmation, Seller shall have a Firm obligation to sell and deliver, and Buyer shall have a Firm obligation to purchase and receive, the Contract Quantity of Gas at the Delivery Points on each Day of the Delivery Period.

Contract Quantity:

The “Contract Quantity” on each Day of the Delivery Period and with respect to each Delivery Point shall be the quantity of Gas equivalent to the quantity of RNG delivered and sold under the RNG TC at such Delivery Point on such Day.

Delivery Points:

The Delivery Point(s) shall be the same as the Delivery Point(s) under the RNG TC.

SPECIAL CONDITIONS

1. No Environmental Attributes: The Gas that Seller sells and delivers and Buyer purchases and receives under this Transaction Confirmation shall not include any Environmental Attributes. 909

2. Scheduling and Nominations: The quantities of Gas nominated and delivered hereunder at each Delivery Point on each Day of the Delivery Period shall be identical to the quantities of RNG nominated and delivered under the RNG TC at such Delivery Point on such Day.

3. Invoices and Netting: Buyer, rather than Seller, shall be responsible for invoicing under Section 7.1 of the General Terms and Conditions for any Gas delivered and received under this Transaction Confirmation in the preceding Month. Amounts due under this Transaction Confirmation shall be subject to netting under Section 7.7 of the General Terms and Conditions with amounts due under the RNG TC.

4. Termination: This Transaction Confirmation shall terminate, without any further action of the Parties, concurrently with any early termination of the RNG TC. Upon any such early termination of this Transaction Confirmation, (a) termination damages with respect to this Transaction Confirmation shall be limited to any amounts owed (whether or not then due) by each Party with respect to all Gas delivered and received between the Parties under this Transaction Confirmation on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts, for which payment has not yet been made by the Party that owes such payment under this Transaction Confirmation, and (b) there shall be no damages with respect to this Transaction Confirmation for the difference between the Market Value and Contract Value as set forth in Section 10.3.1 of the General Terms and Conditions.

5. Definitions:
“Environmental Attributes” shall have the meaning set forth in the RNG TC. “Gas Index Price” shall have the meaning set forth in the RNG TC. “RNG” shall have the meaning set forth in the RNG TC.
[Remainder of Page Intentionally Left Blank; Signature Page Follows] 910

IN WITNESS WHEREOF, the Parties have signed this Transaction Confirmation in multiple counterparts, effective as of the Effective Date.

Seller: City of Banning
By: Elizabeth Gibbs
Title: City Manager
Date:

Buyer: Maas Energy Works, LLC
By: Daryl Maas
Title: CEO
Date:
911

CNG DISPENSER AFFIDAVIT

STATE OF CALIFORNIA

COUNTY OF RIVERSIDE
I the undersigned, Elizabeth Gibbs, City Manager of the City of Banning, hereby attest to the following statements to the best of my knowledge and belief:
1) I oversee the supply and distribution of CNG for vehicle fuel use at the City of Banning; 2) The City of Banning owns and operates the following station that sells CNG as a transportation fuel (“Qualified CNG Facilities”):

Table 1: Qualified CNG Facilities
Site Name Street Address City State Postal Code Meter ID LDC Supplying Gas City of Banning
CNG Station
176 E. Lincoln Banning California 92220 16248679 SoCalGas Company 3) The City of Banning has entered into a purchase and sale agreement with Maas Energy Works, LLC (“MEW”) for the supply of biogas-derived pipeline quality gas that is used at the Qualified CNG Facilities, such agreement as follows:
a. The delivery period is March 14, 2026 to March 13, 2031; b. The Maximum Daily Quantity (“Max DQ”) of the agreement is 156 MMBTU per day; c. The delivery points include the meters identified at the Qualified CNG Facilities; 4) Pipeline quality gas purchased at the Delivery Points noted above is converted at the Qualified CNG Facilities into Renewable CNG, as defined in 40 CFR §80.1401, for use as a transportation fuel; 5) At each of the Qualified CNG Facilities, the volume of biogas-derived pipeline quality gas withdrawn from the commercial distribution system to produce renewable CNG for use as a transportation fuel is measured by continuous metering, and after such meter, the CNG is used as transportation fuel and for no other purpose; 6) The City of Banning has not and will not generate RINs nor represent the fuel for sale as biogas with the ability to generate RINs to any other party;
7) The capacity of the Qualified CNG Facilities to produce and dispense CNG as transportation fuel is greater than 156 MMBTU/day.
912

DATED THIS ___ DAY OF ______, 2026
______________________________
Elizabeth Gibbs
City Manager
City of Banning

STATE OF CALIFORNIA
COUNTY OF ________________
On _______________________________ before me, _______________________________________________________________, Date Name of Notary
personally appeared __________________________________________________________________________________________, Name of Signer
who proved to me on the basis of satisfactory evidence to be the person described herein and who has signed this Affidavit and acknowledged that he/she signed the Affidavit freely and voluntarily for the purposes and uses herein described.

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: ________________________________________
Signature of Notary Public
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.
913
Resolution 2026-50

RESOLUTION 2026-50

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA,

AUTHORIZING THE CITY MANAGER TO EXECUTE A BASE CONTRACT FOR SALE AND PURCHASE OF NATURAL GAS WITH MAAS ENERGY WORKS, LLC.

WHEREAS, the City of Banning operates a Compressed Natural Gas (CNG) fueling program that supports the City’s municipal fleet and the Banning Unified School District fleet; and
WHEREAS, the City is nearing completion of construction of a new CNG fueling facility that will expand fueling capacity and offer CNG for sale to the public; and WHEREAS, Maas Energy Works, LLC is a developer and supplier of Californiaproduced Renewable Natural Gas (RNG), which is gas derived from dairy farms; and WHEREAS, RNG qualifies as a low-carbon transportation fuel under federal and California regulatory programs and can generate environmental credits when used as transportation fuel; and
WHEREAS, these environmental credits include Renewable Identification Numbers (RINs) generated under the federal Renewable Fuel Standard administered by the United States Environmental Protection Agency, and Low Carbon Fuel Standard (LCFS) credits generated under the California Air Resources Board’s Low Carbon Fuel Standard program; and WHEREAS, under the proposed agreement the City will receive a share of environmental credit value generated from the renewable natural gas as follows:
- 20.5 percent of Renewable Identification Number (RIN) credits; - 20.5 percent of Green Gas Low Carbon Fuel Standard (LCFS) credits; and WHEREAS, revenues generated through CNG fuel sales and environmental credit value associated with renewable natural gas purchases will support the City’s responsibility to meet the required ten percent (10%) farebox recovery match associated with the City’s Transit operations; and
WHEREAS, entering into the agreement will help ensure a reliable supply of natural gas to support the City’s CNG fueling operations while also providing the opportunity to participate in environmental credit markets.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. The City Council authorizes the City Manager to execute the Base Contract for Sale and Purchase of Natural Gas with Maas Energy Works, LLC.

SECTION 2. The City Council authorizes the City Manager, or designee, to make necessary budget adjustments, appropriations, and transfers related to this resolution as well as to record incoming revenues to the appropriate fund (Transit).
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Resolution 2026-50

SECTION 3. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED AND ADOPTED this 10th day of March 2026. .

Richard Royce, Mayor
City of Banning
ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning
APPROVED AS TO FORM:

John Pinkney, City Attorney
Slovak, Baron, Empey, Murphy & Pinkney,
LLP
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Resolution 2026-50

CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk of the City of Banning, California, do hereby certify that the foregoing Resolution 2026-50, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 10th day of March 2026 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sandra Calderon, Deputy City Clerk
City of Banning, California
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CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Elizabeth Gibbs, City Manager
PREPARED BY: Mark Staples, Planning Manager
MEETING DATE: March 10, 2026
SUBJECT: Continued from the February 26, 2026, and January 28, 2026, meetings - Consideration of Applications By NP Banning Industrial, LLC for the Sunset Crossroads Project, including (1) a Specific Plan (Case No. SP 20-2002) to Allow for the Development of Industrial and Commercial Uses on 533.8-acres of Land Located South of I-10 and the Union Pacific Railroad, and West of Sunset Avenue (Specific Plan Area); (2) a General Plan Amendment (Case No. GPA 20 -2501) and Zone Change (Case No.

ZC 20-3502) to Amend the General Plan Land Use and Zoning of the Specific Plan Area to General Commercial (GC), Industrial (I), Opens Space- Parks (OS-P), and Open Space-Resources (OS- R), including Prezoning for Annexation of Portions of the Specific Plan Area into the City of Banning’s Jurisdictional Boundary; (3) a Development Agreement to Establish Vested Development Rights in Exchange for Public Benefits as Specified in the Agreement; (4) a Tentative Parcel Map (Case No. TPM 38118) for a Subdivision of the Specific Plan Area into Thirty-four Parcels and Five Lettered Lots Ranging in Size from One Acre to Seventy -eight Acres Consistent with the Nineteen Planning Areas in the Specific Plan; and (5) a Final Environmental Impact Report (Sch No. 2021020011) Including Findings of Fact, a Statement of Overriding Considerations, and a Mitigation Monitoring and Reporting Program pursuant to the California Environmental Quality Act.

RECOMMENDATION:

STAFF RECOMMENDATION:

Conditioned upon approval of Agenda Item No. 7.2, approve the Project Applications as Recommended by Staff by Adopting:

Resolution No. 2026-28 Certifying the Environmental Impact Report (EIR), SCH No. 2021020011, Including Related Findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program; and
Resolution No. 2026-29 Approving General Plan Amendment (No. 20-2501) and Specific Plan (No. 20-2002); and
Resolution No. 2026-30 Approving Annexation of 253.7 Acres into the City of Banning; and Resolution No. 2026-31 Approving the Tentative Parcel Map (TPM 38118); and Introducing by Title Only the Following Ordinances:

Ordinance No. 1618, Approving Zone Change (No. 20-3502) 917
Ordinance No. 1620, Approving a Development Agreement between NP Banning Industrial LLC and the City of Banning
PLANNING COMMISSION RECOMMENDATION:

Deny the Project Applications as Recommended by the Planning Commission by Adopting:

Resolution No. 2026-26 Rejecting the Certification of an Environmental Impact Report (EIR), SCH No. 2021020011, Including Related Findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program; and
Resolution No. 2026-27Denying Applications by NP Banning Industrial LLC for the Sunset Crossroads Project, Including General Plan Amendment (No. 20-2501), Zone Change (No. 20- 3502), Specific Plan (No. 20-2002), Tentative Parcel Map (TPM 38118) and a Development Agreement, for the Development of Industrial and Commercial Uses on a 533.8-acre Project Site Located South of I-10/Union Pacific Railroad and West of Sunset Avenue BACKGROUND:

PROJECT APPLICANT:

NP Banning Industrial, LLC
12977 N. Outer 40 Road, Suite 203
St. Louis, MO 63141

BELOW IS A SUMMARY OF PREVIOUS COUNCIL HEARINGS
FEBRUARY 26, 2026, CITY COUNCIL MEETING SUMMARY:

At the February 26, 2026, City Council meeting, City Attorney John Pinkney announced that there were additional revisions to the proposed Development Agreement that had not been made available for review by the City Attorney, City Council, or the public. Mayor Royce made a motion to table the item to the next regular meeting on March 10, 2026, Councilmember Miller seconded the motion and the motion passed 5-0.

The Applicant has since made changes to the Development Agreement, including the following items from the redline version of the DA:

Commercial retail uses have been reduced from 268,400 sf down to 223,753 sf (page 1-2 of DA) Industrial uses have been reduced from 5,545,000 sf down to 4,749,000 (pg 2 of DA) A $3million Public Benefit Fee regardless of whether the Project is developed (pg 4 of DA) Provision regarding the future decision of LAFCO regarding the county portion of the project being annexed to the City of Banning (pg 17-18 of DA)
Revision to Permitted Uses (pg 24)
Revisions to the Retail Development Obligations regarding obtaining permit approval timelines (Provision 3.11, pg 29)
Revisions to Planning Area 2 application submittal timeline (Provision 3.12, pg 29) Modifications to the Project to Decrease Environmental Impacts by reducing Industrial square footage in Planning Area 7, removal of the Trailer Storage Yard, construction of a Truck Barrier System, modified improvements to Highland Home Road, modified improvements of Lincoln Avenue in project area, a Public Bypass Route to access the Retail Development in Area 1, and Prohibition of Cold Storage and Freestanding Travel Center Uses. (Provision 3.14, pg 30-31) Addition to the Public Benefit Fee (Provision 5.2.1, pg 32) Deletion of Special Account provision regarding the SLB Extension (Provision 5.2.4, pg 33) Revision to the Electrical Substation provisions (Provisions 5.9.1 and 5.9.1(b), pg 39 and 41) 918
Increase of Fire Station Payment to $16,000,000 (Provision 5.10.4, pg 43) Including an Animal Shelter Grant of $500,000 (Provision 5.10.8, pg 44) Default and Remedies revisions (Provision 8.1.3, pg 50) Deleted the Force Majeure provision (Provision 11.5, pg 55) Updated Exhibit G-1 with the update Site Plan showing the removed Industrial Uses in northwest corner of project area (pg 79 of PDF)
Updated Exhibit H Development Fees in Effect as of Effective Date to match those adopted by City Council on February 24, 2026. (Last page of DA)
FEBRUARY 26, 2026, CITY COUNCIL MEETING SUMMARY:

Of significant relevance to the proposed project before you tonight, City Council adopted “Banning 2030 —Designing our Future TODAY!” (Attachments 7.3j3 and 7.3j4). This was a comprehensive effort by City Council to adopt a 5-year plan that includes very specific Strategic Initiatives. These initiatives were approved by the Council only after considering a lengthy discussion of the City’s Strengths, Weaknesses, Opportunity and Threats (SWOTs). Additionally, City Council directed that these initiatives be completed or at least started within this 5-year period. The initiatives were prioritized into Tiers (1— the highest priority, 2 and 3). Staff have extracted three Tier 1 initiatives that align with and support staff’s recommendation to City Council to approve this proposed project.

These 3 relevant top priority initiatives include:

Strategic Goal 2—Protecting and Improving Quality of Life Address the Lack of Animal Control and Shelter
Strategic Goal 3 – Strengthen Local Economy
Inventory & Activate Underutilized Land in Downtown
Strategic Goal 4—Maintaining Effective and Efficient Services Develop and Implement Banning’s Financial Workout Plan to Sustainability Animal Control and Shelter
Within the SWOT discussion under the City Manager’s Office there was a “threat” discussion about the lack of dedicated animal control services in coordination with an operational shelter, presenting a significant threat to public health, safety, and community confidence. Without these resources, the City faces increased risks of uncontrolled stray animal populations, potential spread of disease, and heightened incidents of aggressive or dangerous animal behavior in public areas.

Strategic Initiative 2a proposes a phased strategy that addresses Animal Shelter & Control restoration needs in the near-term while evaluating long-term regional Shelter & Animal Control service delivery options. This effort will likely need $600K to $800K for operations and an unknown amount for capital improvements. There is very little money set aside for this project.

Revitalize Downtown
The Strategic Plan identifies undeveloped and underutilized land as an important opportunity for the City (Appendix A). Banning has a significant amount of land that is either vacant or not being used to its full potential. Combined with the City’s location near regional job centers and increasing interest from industrial and retail developers, this creates a strong opportunity to attract new businesses, expand housing options, and revitalize key commercial areas.

The downtown area, in particular, reflects many years of limited investment. Strategic Initiative 3b— 919
Inventory and Activate Underutilized Land in Downtown—calls for identifying properties that could be redeveloped and creating a plan to bring new activity to the area. Implementing this initiative requires at least $100,000 in General Fund funding, which is currently not budgeted.

The long-term goal is to transform downtown into a walkable, mixed-use destination that includes housing, shops, restaurants, and gathering spaces that residents and visitors can enjoy.

Develop and Implement “Banning’s Financial Workout Plan to Sustainability” The City Council has been briefed several times on Banning’s serious financial challenges. Background on this issue is included in the Finance and Accounting section of the SWOT analysis (Appendix A, page 16). During the Strategic Planning Workshop on November 25, 2025, the City Council also received a detailed explanation of how the City gradually reached its current financial position.

There is shared understanding that addressing the City’s financial challenges is the most urgent priority facing Banning today. Without stable finances, the City’s ability to consistently deliver reliable, highquality services to residents is at risk. The long-term success of the City Council’s Strategic Plan and vision for the community depends on restoring financial stability.

For this reason, the City Council has directed staff to prepare a comprehensive plan to restore the City’s financial stability. This work will move forward once the City’s accounting records are fully updated and current financial data is available, which is expected later this spring.

JANUARY 28, 2006, SPECIAL CITY COUNCIL MEETING SUMMARY:

At the January 28, 2026, City Council meeting, a public hearing was opened and closed for this project, comments from the public were received, and the Council asked questions of the project applicant.

Council Member Flynn motioned to continue the item to the next meeting, with Council Member Barrington seconding the motion. North Point in their effort to address questions and concerns raised in the January 28 meeting, particularly potential local impacts to traffic congestion include:

Reducing the total Industrial square footage from 5,545,000sf down to 4,749,000sf, by removing the two western most warehouse buildings should reduce visual and traffic impacts. (Covenant

3.14 of Development Agreement)
An updated traffic memorandum (trip generation assessment, dated February 18, 2026) is provided as an attachment
A $16,000,000 payment towards the construction of a new fire station (Section 5.10.4 and Recital 22 of Development Agreement) and $1,000,000 for fire equipment (Section 5.10.5) Retail Development Obligations of constructing a 100,000sf commercial building, clarified schedule and fees ($500,000 every 6 months) for not meeting the retail threshold within 36 months of effective date (Covenant 3.11 of Development Agreement) Updated Public Benefit, Public Improvements, and Development Impact Fees (Section 5 of Covenants, Development Agreement)
Animal Shelter Grant of $500,000 (Covenant 5.10.8 of Development Agreement)

BELOW IS A SUMMARY OF PREVIOUS PLANNING COMMISSION HEARINGS PLANNING COMMISSION MEETINGS SUMMARY:

The Sunset Crossroads project was first reviewed at a duly noticed public hearing at a special Planning Commission meeting on September 10, 2025. The meeting involved a lengthy public hearing that included a staff presentation, the applicant presentation, and public testimony from interested persons in support of and in opposition of the proposed project. The Commission made a motion to adopt the 920
proposed Resolution, with 2 votes in support and 3 votes opposed, which resulted in a failed motion.

The Commission made another motion to continue review of the second related project, to continue the hearing past midnight, but the motion failed with 4 votes in favor and 1 opposed. Thus, the meeting was adjourned.

The project was brought back to the Planning Commission at the November 5, 2025, regular meeting with direction from staff that the Commission needed to make a formal denial motion to deny the project and to direct staff to come back at a future meeting with stated findings by the Commissioners choosing to recommend denial of the project. Community Development staff brought back Resolution No. 2025- 06 with the findings provided by the Commission and was adopted as stated above.

At the November 17, 2026, the Planning Commission held their continued public hearing from the regular meeting on November 5, 2025, adopted Resolution No. 2025-16 to recommend that the City Council deny the project applications and reject the certification of the EIR SCH No. 2021020011, including the related findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program.

Related Actions:

On May 8, 2025, the City Council and Planning Commission held a joint special meeting with the subject applications introduced at a public hearing; however, neither body took any action. *********************************************************************************************************************

PROJECT SUMMARY/TECHNICAL INFORMATION AS ORIGINALLY PROPOSED This is a request to establish allowable uses and a development plan for 533-acres of land within and adjacent to the City of Banning through the establishment of the Sunset Crossroads Specific Plan (“Specific Plan”) and related entitlements. The Specific Plan provides the regulatory framework for development of up to 268,400 square feet of medical office, professional office, education, recreation, and commercial uses, a travel center with refueling uses, plus a 125-room hotel (approximately 90,000 square feet) on 47.9-acres; up to 5,545,000 square feet of industrial uses (including up to 330,000 square feet of cold storage uses) on 392- acres; and approximately 65 acres of open spaces, including a

12.6 -acre park amenity. Table 2-1 in the Specific Plan summarizes the proposed planning areas, and their land use designation, overall acreage and maximum building square footage for the Project. The location of the planning areas is shown in the Land Use Plan, Figure 2-1, of the Specific Plan. The Specific Plan further identifies the permitted land uses, development standards, design guidelines, and implementation provisions and is further described later in this report.

The applications that have been filed in conjunction with this project and the scope of the Planning Commission’s review are the following:

Specific Plan application, Case SP 20-2002, to establish the Sunset Crossroads Specific Plan for the development of industrial and commercial uses on a 533.8-acre site, including up to 268,400 square feet of medical office, professional office, education, recreation, and commercial uses, a travel center with refueling uses, and a 125-room hotel (approximately 90,000 sf) on 47.9-acres; and up to 5,545,000 square feet of industrial uses (including up to 330,000 square feet of cold storage uses) on 392.0 acres.

The Specific Plan text identifies the permitted land uses, development standards, design guidelines, and implementation provisions. The Specific Plan Area includes land located south of Interstate 10 between Highland Home Road and Sunset Avenue extending south to include land south of the City’s current border (Assessor Parcel Numbers (APNs): 537- 110-003 through -005, 537-110-011 through -014, 537- 120-013, 537- 120-025, and 537-120-028 through - 036). The City Council shall review the Specific Plan application for conformance to the criteria listed in Banning Zoning Ordinance (BZO) Section

17.96.060.General Plan Amendment and Zone Change for Specific Plan Area (GPA 20-2501 & ZC 20- 3502) to amend the General Plan land use designations and re -zoning of the Specific Plan Area to General Commercial (GC), Industrial (I), Open Space – Parks (OS-P), and Open Space – Resources 921
(OS -R), including pre-zoning for annexation of approximately 254- acres of land of the Specific Plan Area into the City of Banning. The City Council shall review the General Plan Amendment for conformance to the criteria listed in BZO Section 17.64.070.

Development Agreement (DA) between the City and Applicant to establish terms and obligations for the development of the Project and financing, acquisition, and construction of infrastructure. The DA grants the Applicant vested rights to develop the Project and other City approvals in exchange for certain financial contributions and other considerations received by the City. The City Council shall review the Development Agreement application for conformance to the criteria listed in BZO Section 17.60.030.

Tentative Parcel Map application, Case TPM 38118, for the subdivision of the 533.8 -acre site into 34 lots for development purposes ranging in size from one acre to 78.7 acres in size and five lettered lots for common area or public purposes. The City Council shall review the Tentative Parcel Map application for conformance to the criteria listed in Section 66474 of the Subdivision Map Act and Banning Municipal Code Title 16.

Environmental Impact Report (EIR), Case EA 20- 1506, (SCH No. 2021020011) for the Project to analyze its potentially significant environmental impacts, identify discuss mitigation measures for those impacts found to be significant, and discuss feasible alternatives to the Project. A Draft EIR was posted and circulated for review and comment from December 15, 2023 through January 30, 2024. The Final EIR incorporates responses to all written comments that the City received on the Draft EIR. Before approving the Project, the City must certify the Final EIR and adopt certain required findings and a Mitigation Monitoring and Reporting Program. Because the Final EIR concludes that the Project would cause certain significant and unavoidable impacts, the City must also adopt a Statement of Overriding Considerations. The City Council shall review the document and make a determination whether to certify the Final EIR.

If the above applications are approved, subsequent development applications, including Design Reviews and Conditional Use Permits as applicable, within the Sunset Crossroads Specific Plan will be required for the individual planning areas as specified in the Specific Plan.

PROJECT DESCRIPTION:

Existing Conditions:

The subject site is generally located in the southwest area of the City of Banning and the City’s Sphere of Influence (SOI) and generally south of the Union Pacific Railroad and Interstate 10, east of Highland Home Road, west of Sunset Avenue, and north of Bobcat Road. The Development Site is bisected by the existing Westward Avenue right of way (Existing ROW), the centerline of which divides the land within the Project site into two approximate halves, the northern portion of the project being located with the existing corporate City limits, and the southern portion of the project area being located with unincorporated County land in the City’s SOI area. The Existing ROW and adjoining 0.8 acres of land owned by the City and used for water wells are not part of the Development Site or the Development Project.

The Development Site is crossed by various natural drainages. Pershing Creek flows in a northwest to southeast direction through the eastern portion of the Development Site. Vegetation cover on the Development Site reflects a history of dry farming and cattle grazing disturbance over a majority of the site and consists primarily of non -native grasslands, with patches of Riverside and sage scrub, mixed ornamental woodland, and sandy wash. The sandy wash habitat is associated with two deeply incised drainage courses and a tributary that flows through the Development Site. Pershing Creek flows in a northwest to southeast direction through the eastern portion of the Development Site and Smith Creek flows in a north-south direction. Highland Wash is a smaller drainage course and tributary to Smith Creek that confluences with Smith Creek near Westward Avenue.

Specific Plan:
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The vision for the Sunset Crossroads Specific Plan is to create a new commercial/industrial master plan for the benefit of the entire community. The Specific Plan was created using an integrated, multidisciplinary approach. The team assembled to undertake this project included the City, land planners, civil engineers, environmental resource specialists, historians, architects, landscape architects, geotechnical specialists, hydrology specialists, and market analysts. This team worked together to create a comprehensive development plan for the approximately 533.8 -acre site, which provides land uses that take advantage of the site’s proximity to access to Interstate 10 and responds to economic trends in the City of Banning. The Specific Plan is intended to conform with the intent, goals and policies set forth by the City of Banning General Plan. Future development plans, site plans, and tentative tract and parcel maps must be consistent with both the Sunset Crossroads Specific Plan and the City of Banning General Plan. In keeping with regulatory provisions of the Specific Plan, the Project is designed to ensure that development occurs in a manner that is responsive to site characteristics and community goals and objectives. A number of the Project’s objectives are listed below:

Provide a mix of commercial and industrial uses that create new job opportunities and reduce the need for City residents to commute outside of the City of Banning for employment, thereby improving the City’s jobs to housing ratio.

Establish a mix of commercial and industrial uses that result in economic benefits to the City through increased sales taxes and other revenue which can be used to provide City services.

Maintain the integrity of the natural environment through the preservation and conservation of open space and natural drainage courses.

Locate businesses that rely on transportation efficiency in a location offering superior access to the local and regional transportation network.

Identify capital improvements for potable water, reclaimed water, sewer, drainage and water quality, and circulation facilities that serve planned land uses within and adjacent to Sunset Crossroads.

Establish a unified thematic concept for Sunset Crossroads through design elements such as architecture, monumentation, theme walls, landscaping using a long-range comprehensive planning approach that cannot be accomplished on a parcel-by-parcel basis.

Create a development-wide landscape concept that features drought-tolerant plant materials to provide for an aesthetically pleasing outdoor environment, while minimizing the demand for water resources.

Land Use:

The Sunset Crossroads Specific Plan proposes the future orderly development of the site in four basic land use categories which include General Commercial, Industrial (including public infrastructure), and Open Space– Parks and Open Space– Resources as follows:

General Commercial (GC) . The 47.9-acre commercial district of the Development Site (Planning Area 1) is bordered on the east by Sunset Avenue and stretches along the northeast portion of the Development Site between Lincoln Street and Interstate 10. A maximum of 268,400 square feet of commercial uses, which may include leisure, retail, medical office, professional office, education, wellness, recreation, entertainment, restaurant, and other retail uses, operating out of a number of buildings aligned along an internal road that would be accessed from Sunset Avenue. This portion of the Development Project is designed as a regional commercial and entertainment attraction, providing multigenerational activity and wellness-based retail destination uses including, but not limited to, stationary wave surfing, indoor skydiving, indoor go-karting, obstacle gyms and a large indoor/outdoor climbing wall, yoga studios, dance studios, and other athletic activities. Sit-down restaurants with outdoor dining, a food court, and specialty retail uses that would orient inwards to central open space areas are proposed to allow for outdoor activities, ancillary to the on-site leisure/recreation uses or to allow on-site vendors/concessionaires to use connections along an internal network of pedestrian walkways. Table 3- 1 of the Sunset Crossroads Specific Plan provides a detailed list of permitted, conditionally permitted, ancillary, and prohibited uses within the Specific Plan area. In addition, the proposed commercial uses may include a freeway accessible 125-room (approximately 90,000-square-foot) and a fueling station. 923
Development standards for the GC district are identified in Section 3.3 of the Specific Plan and include maximum building heights of 60 feet (plus additional 10 feet for solar arrays), maximum 50% lot coverage, street setbacks for building heights over 35 feet. There is also criteria for freeway signs (80 feet maximum).

Industrial (I). The Specific Plan provides for the development of up to 5,450,000 square feet of industrial land uses on approximately 392.0 acres within the Development Site. Based on its proximity to the Sunset Avenue interchange at I-10, the Development Project would facilitate the development of warehousing, distribution, manufacturing, and other industrial uses. To accommodate future tenants, the Specific Plan allows the size of individual buildings to vary within an established range (increasing or decreasing by up to 20 percent); however, the overall square footage of buildings in the industrial Planning Areas is not to exceed the above maximum square footage. The Development Project considered in the EIR comprises industrial buildings ranging in size from 44,000 square feet up to 1,420,000 square feet and accommodating uses such as general industrial, manufacturing, parcel hub, warehouse/storage, truck/trailer parking and storage, recreational vehicle (RV) storage, high cube warehouse, cold storage warehouse (up to 330,000 square feet proposed for Phase 2 [Buildings 5 and 6]), fulfillment center, and e-commerce operations. The industrial building sites within the Development Project may include outdoor employee break areas with tables affixed to the ground to provide employees with a location to eat, gather, and enjoy being outside. Shading of these areas may be achieved through a combination of shade trees, umbrellas, or fabricated shade structures. Other open space amenities within the industrial areas may include pedestrian walkways, seating areas, overhead structures, and open space areas. Development of the industrial Planning Areas shall be subject to the applicable Infrastructure Improvement Standards, Development Standards, and Planning Area Standards set forth in the Specific Plan. A proposed 65 MWh battery energy storage facility (BESS) would be a permitted use in any of the industrial use planning areas. Development standards for the Industrial district are identified in Section 3.4 of the Specific Plan and include maximum building heights of 60 feet (plus additional 10 feet for solar arrays), maximum 60% lot coverage, and front yard street setbacks of 25 feet among other requirements. Certain heights are allowed in Planning Areas 2 (additional screening height above 60 feet) and 5 (up to 80 feet). There is also criteria for freeway signs (80 feet maximum).

Open Space- Parks and Open Space-Resources. The Specific Plan identifies two open space designations. Planning Area 11 designates 12.6 acres of Open Space -Parks located at the northwest corner of Highland Home Road and the Sun Lakes Boulevard Extension, including a 5.0- acre passive public park, with the remainder of the 12.6-acre site reserved for Open Space and trails. Planning Areas 12 through 19, which combined total approximately 53 acres of the overall site, are designated Open Spece-Resources. Approximately 12.5 acres (Planning Area 12, which is located southeast of Highland Home Road and the Sun Lakes Boulevard Extension) are reserved for passive open space uses which may include trails. The remaining 41.5 acres (Planning Areas 13 through 19) contain three existing natural drainage watercourses, Smith Creek, Pershing Creek, and Highland Wash, which traverse the Specific Plan in a northwesterly to southeasterly direction. To preserve these areas, they are designated Open Space–Resource and no development or land uses are permitted, except those activities required to cross these areas with roads (Lincoln Street, Highland Home Road) and utilities.

Circulation:

As illustrated in Figure 2, Conceptual Circulation Plan, of the Sunset Crossroads Specific Plan, regional access to the Project is provided via I-10 from the Sunset Avenue interchange located approximately ¼- mile to the northeast of the Specific Plan. The site is approximately 3.5 miles east of the junction of CA60 Freeway and Interstate 10 and approximately 22 miles east of Interstate 215. Primary local access from the north and south is provided via Sunset Avenue which forms the site’s eastern boundary.

Additional access is provided by Bobcat Road which forms the site’s southern boundary, and from Highland Home Road, which forms the site’s western boundary. In addition, consistent with the City’s Circulation Element, the City is separately processing the construction of an extension of Sun Lakes Boulevard (SLB Extension) that would bisect the Development Site, which is expected to begin 924
construction in 2026.

The Specific Plan identifies the following roadway segment improvements to be constructed as part of the project:

1. Sunset Avenue (Interstate 10 to Lincoln Street) – Arterial Highway (110’ ROW) . As depicted in Figure 2-2, Conceptual Circulation Plan, the primary access point for Sunset Crossroads is Sunset Avenue, which connects the site to the regional transportation network. The segment of Sunset Avenue between Interstate 10 and the SLB Extension is designated by the General Plan as an Arterial Highway (110’ ROW) and forms the project’s eastern boundary. As shown in Figure 2-3 of the Specific Plan document, Conceptual Roadway Cross-Sections, the 110-foot of right of way comprising Sunset Avenue consists of 68 feet of paving, an 18-foot-wide center raised or painted median, with a 4-foot-wide landscaped parkway and 8-foot-wide parkway-adjacent sidewalk on the west side of the street, and an 8-foot-wide curb-adjacent sidewalk and 4-foot-wide landscaped parkway on the east side of the street. An eight-foot-wide Class II bike lane is provided on both sides of the paving, adjacent to the curb. As a result of the westward shift in alignment of Sunset Avenue between Lincoln Street and SLB Extension, the alignment in this location will also shift to the west from the existing centerline.

2. Sunset Avenue (Lincoln Street to SLB Extension) – Modified Secondary Highway (110’ ROW) . As depicted in Figure 2-2, Conceptual Circulation Plan, the segment of Sunset Avenue between Lincoln Street and the SLB Extension is designated as a Modified Secondary Highway (110’ ROW). As shown in Figure 2-3, Conceptual Roadway Cross-Sections, the 110-foot of right of way comprising Sunset Avenue consists of 68 feet of paving, an 18-foot-wide center raised or painted median, with a 4-foot-wide landscaped parkway and 8-foot-wide parkway-adjacent sidewalk on the west side of the street, and a 4-foot-wide parkway and 8-foot-wide parkway-adjacent sidewalk on the east side of the street. An eight-foot-wide Class II bike lane is provided on both sides of the paving, adjacent to the curb. To address noise impacts along Sunset Avenue, the alignment of this portion of Sunset Avenue is shifted to the west from its previously proposed location to provide additional distance from sensitive receptors east of Sunset Avenue. More specifically, the centerline of Sunset Avenue between Lincoln Street and Sun Lakes Boulevard would be adjusted 42 feet to the west from the existing centerline with implementation of the Development Project, new centerline being 72 feet from the nearest residential property line and 115 feet from the school at the MSJC Site. The resulting 17 feet of excess right of way to the east will be landscaped.

3. Sunset Avenue (SLB Extension to Bobcat Road) – Secondary Highway (88’ ROW). As depicted on Figure 2-2, Conceptual Circulation Plan, the segment of Sunset Avenue between the SLB Extension and Bobcat Road is designated by the City General Plan as a Secondary Highway (88’ ROW). As shown in Figure 2-3, Conceptual Roadway Cross-Sections, the 88-foot of right of way comprising Sunset Avenue consists of 64 feet of paving with a 4-foot-wide landscaped parkway and 8-foot-wide parkway-adjacent sidewalk provided on both sides of the street. As a result of the westward shift in alignment of Sunset Avenue between Lincoln Street and SLB Extension, the alignment in this location will also shift to the west from the existing centerline.

4. Bobcat Road – Divided Collector Street (78’ ROW). As depicted on Figure 2-2, Conceptual Circulation Plan, Bobcat Road is designated as a Divided Collector Street (78’ ROW) and forms the project’s southern boundary along the south side of Planning Area 4. As shown in Figure 2-3, Conceptual Roadway Cross-Sections, the 78-foot of right of way comprising Bobcat Road consists of 56 feet of paving with a 6 -foot-wide landscaped parkway and a 5-foot-wide parkway-adjacent sidewalk on the south side of the street, and a 6-foot-wide curb-adjacent sidewalk and 5-foot-wide landscaped parkway on the north side of the street. The Specific Plan and future applications submitted within this Specific Plan will dedicate and construct the northern halfwidth plus 10’ improvements of Bobcat Road along the project frontage. To address the potential for impacts to residences on the south side of Bobcat Road from on-site Development Project operations, on-site project operations will require: (i) Cold storage equipment previously allowed on industrial building rooftops to be shielded or relocated to the ground floor; and (ii) Construction of 10 -foot high “wing walls” on the south end of warehouse buildings in Planning Area 4, and 6-foot high walls that surround the automobile parking lots south of warehouse buildings in Planning Area 4 as depicted 925
in the Specific Plan in Attachment A to the Supplemental Noise Analysis (Final EIR, Appendix I-2, Attachment A).

5. Lincoln Street – Divided Collector Street (78’ ROW). As depicted on Figure 2-2, Conceptual Circulation Plan, Lincoln Street is designated as a Divided Collector Street (78’ ROW) within the project, providing access to the Development Site from Sunset Avenue. As shown in Figure 2-3, Conceptual Roadway Cross-Sections, the 78 feet of right of way comprising Lincoln Street consists of 56 feet of paving with a 6-foot-wide landscaped parkway and 5-foot-wide parkwayadjacent sidewalk on the south side of the street and a 6-foot wide curb-adjacent sidewalk and 5- foot-wide landscaped parkway on the north side of the street. An eight-foot-wide Class II bike lane is provided on both sides of the paving, adjacent to the curb. The Specific Plan and future applications submitted within this Specific Plan will construct full-width improvements along the length of Lincoln Street on the Development Site. Lincoln Street will cross two existing natural drain courses via box culverts to be constructed by the project and maintained by the City. In Planning Area 7, a 24’-wide Secondary Access Connection will link Lincoln Street to Highland Home Road via a private roadway.

6. Highland Home Road (north of SLB Extension Street)– Modified Secondary Highway (66’ ROW).

As depicted on Figure 2-2, Conceptual Circulation Plan, the segment of Highland Home Road north of SLB Extension is designated as a Modified Secondary Highway (66’ ROW) within the project. Highland Home Road forms a portion of the Specific Plan’s western boundary. As shown in Figure 2-3, Conceptual Roadway Cross-Sections, Highland Home Road consists of 66 feet of right-of-way within a 110-foot dedication. The Specific Plan and future applications submitted within this Specific Plan will dedicate the full 110-foot width of Highland Home Road as from the existing eastern property boundary of the Sun Lakes community. The Specific Plan will construct the full width of Highland Home Road with a 5-footwide curb-adjacent sidewalk, a 6-foot-wide landscaped parkway, and 44 feet of paving along the western boundary of the right of way, from the SLB Extension to Planning Area 7, where it will terminate in a cul-de-sac and provide secondary access to Planning Area 7 via a 24’ wide Secondary Access Connection.

7. Highland Home Road (south of SLB Extension)– Modified Collector Street (66’ ROW). As depicted in Figure 2-2, Conceptual Circulation Plan, the segment of Highland Home Road south of SLB Extension is designated as a Modified Collector Street (66’ ROW) within the project. Highland Home Road forms a portion of the Specific Plan’s western boundary. As shown in Figure 2-3, Conceptual Roadway Cross-Sections, Highland Home Road consists of a 66-foot right of way within a 110-foot dedication. The Specific Plan and future applications submitted within this Specific Plan will dedicate the full 110-foot width of Highland Home Road from the existing eastern property boundary of the Sun Lakes community. The Specific Plan will construct the remaining half-width (33 feet) of Highland Home Road including a 5-foot Class III bikeway, a 6-foot-wide curb-adjacent sidewalk, and a 5-foot-wide landscaped parkway to complete the road section based on existing curb location adjacent to the Sun Lakes Community, from the southwest corner of PA 12 to the SLB Extension. Truck traffic shall be restricted on Highland Home Road south of the SLB Extension.

Infrastructure – Potable Water:

Potable water infrastructure would be provided using existing, planned and proposed facilities. The Specific Plan is subject to the design requirements of the City of Banning Public Works Department and the demand criteria guidelines outlined in the City’s Integrated Master Plan (IMP). Existing potable water lines within Pressure Zone 2721 exist in Sunset Avenue (24”) and in the future SLB Extension (18”). The proposed Potable Water Plan creates a looped system and includes locations, alignments, and sizes of facilities shown conceptually in Figure 2-4 of the Specific Plan.

Infrastructure – Recycled Water:

A recycled water system would be provided, consisting of existing, planned and proposed recycled water lines. The Specific Plan recycled water system is subject to the design requirements for the City of Banning Public Works Department and the demand criteria guidelines outlined in the City’s Integrated 926
Master Plan (IMP). A 24” recycled water line exists in Sunset Avenue from Lincoln Street to the SLB Extension and a 24” recycled water line exists within the SLB Extension easement area. Future nonpotable Well R1 on Westward Avenue near the City’s wastewater treatment facility will be the source for the Development Site, once completed. The well and its respective facilities are in design and under construction. The locations, alignments, and sizes of recycled water facilities are conceptually shown in Figure 2-5 of the Specific Plan.

Infrastructure – Sewer:

The sewer system would consist of existing, planned and proposed sewer lines and be subject to the design requirements for the City of Banning Public Works Department and the demand criteria guidelines outlined in the City’s Integrated Master Plan (IMP). Sewer lines exist in the SLB Extension (12”) and along the westside Planning Areas 13 and 14 (15”). The existing 12” sewer line in the SLB Extension flows until it reaches the SLB Extension Lift Station, where wastewater is conveyed through an existing 10” force main toward the existing manhole at the intersection of Sunset Avenue and the SLB Extension.

The proposed sewer system facilities required to serve the Specific Plan are depicted in Figure 2-6, Conceptual Sewer Plan, of the Specific Plan.

Development Agreement:

NOTE: Below were the key provisions and terms of the Development Agreement presented to the Planning Commission at their September 10, November 5, and November 17, 2025, meetings. The Development Agreement has been significantly amended and negotiated between staff and the applicant. Please refer to the attached current Development Agreement (redline and clean versions) along with the updated provisions outlined on Page 2 and 3 of this staff report.

California Government Code, §65864 through 65869.5, establish procedures for cities and counties to enter into development agreements; BZO Chapter 17.60 implements the requirements of state law and specifies the required content and process for review and approval of development agreements.

Development agreements establish a vested right to proceed with development in conformation with the regulations in effect at the time of approval. This provides assurance to a developer that the project may proceed as originally approved, and not be affected by future changes in land uses regulations. In exchange for this assurance, the developer may agree to provide additional dedications, construction of public improvements, or other similar public benefits.

The proposed Development Agreement is included as an attachment to this report. Some highlights that have been negotiated between the City and the Applicant are as follows:

1. Term of Agreement. The agreement has a term of thirty (30) years (Section 2.3 of Agreement).

2. Public Benefit Fee. The Applicant will pay $8,000,000 (or $1.44 per square foot of warehouse space) over installments as the industrial buildings are occupied (Section 5.2)

3. Land Dedication.
a. Fire Station. The Applicant will reserve and dedicate 2.5 to 3 acres of land for a fire station (Section 5.8.1).
b. Water Tank Property. The Applicant will reserve and dedicate up to two acres of land for a water reservoir (Section 5.8.2).
c. Electric Substation. The Applicant will reserve and dedicate property for City use as a substation (Section 5.8.3).

4. Reverse Osmosis Facility. The Applicant will reserve and dedicate property for City use as a reverse osmosis facility (Section 5.8.4).

5. Facility Funding.
a. New Fire Station. The Applicant will contribute $15,000,000 to the City for construction of the fire station within the Project boundary (Section 5.10.4). b. Fire Station Equipment. The Applicant will contribute $1,000,000 to the City for use to acquire fire equipment for the fire station (Section 5.10.5). 927
c. Electric Substation. The Applicant will contribute a total of $10,000,000 toward the anticipated $12,500,000 total expected cost to design and construction of Electric Substation within Project boundary (Section 5.9).

6. City Grant. The Applicant will provide $750,000 to aid in downtown beautification or small business assistance for small businesses located in the City.

7. Retail Development Obligation. The Applicant is required to obtain approvals and construct a minimum of 100,000 square feet of commercial/retail within 24 months of obtaining the first certificate of occupancy for warehouse. If the Applicant misses this deadline, the Applicant is required to pay $500,000 to the City and an additional $500,000 every six months thereafter if the commercial/retail threshold is not satisfied. The Applicant is also required to construct a minimum of two, 100,000 square foot (or larger) retail/commercial buildings (Section 3.11).

8. Additional Commercial/Retail. After the joint hearing on May 8, 2025, the Applicant agrees to submit an application to the City to amend the Specific Plan, including CEQA review, to authorize retail/commercial within Planning Area 2 (Section 3.12).

9. Buffer along Bobcat Rd. After the joint hearing on May 8, 2025, the Applicant will provide a buffer of at least 50 feet between industrial buildings and Bobcat Rd, including a minimum of twenty feet of landscaped area.

10. Formation of a Community Facilities District (CFD). An annual special tax for industrial/warehouse buildings will be required in the amount of $0.20 per square foot the first year and adjusted annually (with an annual CPI escalator) for use towards City services in the CFD District.

11. Tax Sharing. The Applicant may seek tax sharing and reimbursement for some of the costs funded by the development.

The above includes public benefits previously negotiated by the City and additional benefits that have been provided after the Applicant received input at the public hearing that occurred on May 8, 2025 with the Planning Commission and City Council.

JUSTIFICATION:

FINDINGS:

To approve the proposed Project applications, the City Council must first make all of the following findings in the affirmative. The basis for making such findings can be found in the attached Resolutions and Ordinances, and the General Plan Consistency Analysis contained in the Final EIR. An analysis of the Project applications is also below.

General Plan Amendment:

BZO Section 17.64.070 requires that four findings be met to justify approval of a General Plan Amendment application. Staff analyzed the application against these findings for General Plan Amendment, Case No. 20-2501, below:

Finding A: The proposed amendment is internally consistent with the General Plan.

Finding of Fact: California Government Code Section 65302 requires that a General Plan consists of seven (7) State-mandated elements, including Land Use, Circulation, Housing, Conservation, Open Space, Noise, and Safety. The Land Use Element is one of the seven State-mandated elements of the General Plan and includes the Land Use Map for the City of Banning. The Land Use map and the Zoning map are 100% consistent with one another and, therefore, the same map doubles to serve both purposes. The proposed Project will not create an incompatible land use as discussed in Table 4.11.A:

Development Project Consistency Analysis with the City of Banning General Plan, found in the Draft EIR.

This Table evaluates how the proposed Project is internally consistent with each element of the General Plan.

Finding B: The proposed amendment would not be detrimental to the public interest, health, safety, convenience, or welfare of the City.

Finding of Fact: The proposed General Plan Land Use Map Amendment and Zone Change will allow for the orderly development of the proposed Sunset Crossroads development project in an industrial area, further strengthening economic development and job opportunities, while not damaging the public interest, health, safety, convenience, or welfare of the City. As set in the Final EIR, the related CEQA 928
Findings, and Statement of Overriding Considerations, the adverse significant environmental effects of the Project would be reduced to the extent feasible by incorporation of project design features, taking into account required regulatory measures and adopting the mitigation measures identified in the MMRP, and the social, economic and other benefits of the Project outweigh the potential unavoidable significant impacts and render those potential significant impacts acceptable.

Finding C: The proposed amendment would maintain the appropriate balance of land uses within the City.

Finding of Fact: Table III-3, of the Community Development Chapter of the City General Plan details that 252.1 acres of vacant land is designated as General Commercial, and 274.1 acres of vacant land is designated as Industrial. The Project will increase the amount of vacant General Commercial land by

47.9 acres, and will increase the amount of vacant Industrial land by 392 acres which provide a statistically significant positive change in the balance of vacant non-residential land uses within the City.

A transfer of the residential density currently identified within the Sunset Crossroads Specific Plan boundary will transfer to another nearby location, resulting in no net loss of residential density, as required under state law and General Plan Housing Element goals and programs. As such, the balance of land use designations will not be negatively impacted by the Project.

Finding D : The amendment is physically suitable for the surrounding environment; including, but not limited to site access, the provision of utilities, and compatibility with adjoining land uses, including the absence of any physical constraints, for the requested land use designation(s) and the anticipated land use development(s).

Findings of Fact: The Sunset Crossroads Project envisions the development of industrial and commercial uses on a 533.8-acre site through adoption of the Sunset Crossroads Specific Plan, including up to 268,400 square feet of medical office, professional office, education, recreation, and commercial uses, a travel center with refueling uses, and a 125-room hotel on 47.9-acres; and up to 5,545,000 square feet of industrial uses (including up 330,000 square feet of cold storage uses) on 392.0 acres. The Specific Plan text identifies the permitted land uses; development standards, design guidelines; and implementation provisions. The Development Project includes a General Plan Amendment and Zone Changes amending the land use designations on-site to General Commercial (GC), Industrial (I), Open Space Parks (OS-P), and Open Space Resources (OS-R). Approximately 65.6 acres of the Project site would be retained as Open Space - Resources (OS -R) and/or Open Space Parks (OS-P) use, including a five-acre passive park. Approximately 253.7 acres of the site are located outside the current City boundary within the City sphere of influence (SOI); therefore, the Project envisions annexation of this area into the city. A Plan of Services and a Water Supply Assessment prepared for the project indicates that site access and infrastructure for utility conveyances is available and provisions for service have been planned. The Project will implement Policy 8 of the Community Development Chapter of the General Plan, which requires that the City assure the provision of adequate utilities, infrastructure, and other capital facilities" (General Plan, Page III -44). The Project will implement Program 4.B, which requires the City make regular assessments of infrastructure capacity and evaluate the necessary expansion and improvements needed to carry out responsible growth management (General Plan, Page VI-19).

Specific Plan:

BZO Section 17.96.040 requires that four findings be met to justify approval of a Specific Plan application. Staff analyzed the application against these findings for Specific Plan, Case SP 20-2002, below:

Finding A: The proposed plan is consistent with the General Plan.

Finding of Fact: The Specific Plan is consistent with the City's General Plan by allowing additional economic growth opportunities, while balancing land use, circulation, housing, and economic development with the corresponding general plan amendments to establish the use at the project site and transfer residential to an off-site location adjacent to a higher-education campus. The Specific Plan supports development and job creation as outlined in the General Plan goals and policies and aligns with policies related to walkability, infrastructure upgrades, and community amenities. 929
Finding B: The proposed plan would not be detrimental to the environment, or to the public interest, health, safety, convenience, or welfare of the City.

Finding of Fact: The Environmental Impact Report (EIR) prepared for the Project identifies potentially significant impacts but includes mitigation measures to reduce impacts to less than significant where feasible. The City determined that, with mitigation and overriding considerations, the plan will not be detrimental to the environment or public interest, health, safety, or welfare. The Statement of Overriding Considerations justifies this by citing long-term economic and community benefits. Additionally, consistent with state law requirements, the proposed Specific Plan describes a comprehensive plan for land use, circulation and infrastructure to ensure the plan accommodates necessary utilities and services to protect the public interest, health safety, convenience and welfare.

Finding C: The subject property is physically suitable for the requested land use designation(s) and the anticipated development(s).

Finding of Fact: The property is physically suitable for the intended land uses. The site is largely undeveloped, has appropriate access to major roadways, and will be served by necessary infrastructure improvements (e.g., sewer, water, traffic). The project underwent geotechnical, hydrology, and environmental analyses that confirmed suitability for the scale and type of development.

Finding D: The proposed plan shall ensure development of desirable character which will be compatible with existing and proposed development in the surrounding neighborhood.

Finding of Fact: The project design reflects a desirable and compatible character, incorporating landscaping, architectural standards, buffers, and traffic planning. Adjacent uses include residential, commercial, and institutional land uses, and the project includes transitions in use intensity and design to ensure compatibility.

Zone Change:

BZO Section 17.116.050 requires that three findings be met to justify approval of a Zoning Ordinance Amendment application. Staff analyzed the application against these findings for Zoning Ordinance Amendment, Case No. 20-3502, below:

Finding A: The proposed Amendment is consistent with the goals and policies of the General Plan.

Finding of Fact: The proposed amendment will establish a land use pattern consistent with the corresponding general plan amendment, allowing for General Commercial and Industrial districts while preserving natural on -site arroyos and open spaces with Open Space designations. The proposed zoning will also create economic opportunities consistent with the goals and policies in the General Plan Economic Development Element, such as the following:

Goal: A balanced, broadly-based economy that provides a full range of economic and employment opportunities, while maintaining high standards of development and environmental protection.

Policy 2 The City shall take a proactive role in the retention of existing businesses and the recruitment of new businesses, particularly those that generate and broaden employment opportunities, increase discretionary incomes, and contribute to City General Fund revenues.

Program 6.B Preserve highway commercial land use designations at interchange locations, and encourage the location of high-quality freeway-serving businesses.

Finding B: The proposed Amendment is internally consistent with the Zoning Ordinance.

Finding of Fact: The proposed Project shall require an amendment to Banning Municipal Code Section

17.96.080 - Specific plan zoning districts and zoning map designations. Inclusion of the Sunset Crossroads Specific Plan in the BMC will immediately make it consistent with the zoning ordinance. A key element of the project involves a transfer of residential density from Sunset Crossroads development project site to the Mt. San Jacinto Community College site to accommodate the commercial/industrial development project. The transfer of residential development capacity is consistent with state housing law in that it ensures no net loss in the residential development capacity identified in the City's General Plan. The proposed density transfer can be accommodated on an approximately 41-acre site as the proposed density range is from 24 to 30 dwelling units per acre, consistent with the Zoning Ordinance and development standards for the Very High Density Residential zone. 930
Finding C : The City Council has independently reviewed and considered the requirements of the California Environmental Quality Act.

Finding of Fact: The Sunset Crossroads FEIR has been prepared for the Project in accordance with the California Environmental Quality Act (CEQA). The City Council has conducted an independent review and is moving to certify the Sunset Crossroads FEIR and adopt the related CEQA Findings, Statement of Overriding Consideration, and Mitigation Monitoring and Reporting Program for the Project.

Development Agreement:

BZO Section 17.60.030 requires that two findings be met to justify approval of a Development Agreement application. Staff analyzed the application against these findings for Zoning Ordinance Amendment below:

Finding A: The Development Agreement is consistent with the General Plan, any applicable Specific Plans, and the Zoning Ordinance.

Finding of Fact : In accordance with the Banning Municipal Code, the Development Agreement contains provisions that set forth a defined term, the specific types, density, and intensity of uses allowed, reservations or dedication of land for public purposes, a limited stay on future development fee increases; and processes for reviewing related future approvals and amending the Development Agreement. Approval of the Development Agreement would provide for the orderly development of the Project and necessary infrastructure improvements.

Finding B: The Development Agreement will promote the welfare and public interest of the City.

Finding of Fact : The Development Agreement incorporates provisions for financing, acquisition, and construction of infrastructure, for the Sunset Crossroads Specific Plan, as well as acquisition and development of adequate levels of open space. The Agreement would grant the applicant vested rights to develop the Project in exchange for certain financial contributions, including substantial public benefit fees and land dedications, and other consideration to be received by the City.

Tentative Parcel Map:

Pursuant to Section 66474 of the Subdivision Map Act, there are seven findings that must be met to justify approval of a Tentative Map application. Staff analyzed the application against these findings for Tentative Parcel Map, Case TPM 38118, below:

Finding A: The proposed Tentative Parcel Map is consistent with all applicable general and specific plans.

Finding of Fact: The City's General Plan land use designation and Zoning Map will be amended as part of the overall project approvals. The proposed tentative map will be consistent with the designation of the project site as "Specific Plan," and the proposed map provides for the accommodation of nineteen (19) planning areas, consisting of a variety of commercial and industrial uses, lot types and sizes ranging from 1-acre to 194.3-acres, common open spaces, and circulation and other public improvements. The proposed map furthers the objectives and policies of the General Plan in that 440 acres of the project area is dedicated to commercial and industrial development, with no net loss of residential density.

Finding B: The design and improvements of the proposed Tentative Parcel Map is consistent with the zone in which the property is located.

Finding of Fact: The corresponding Specific Plan establishes criteria for circulation and rights-of-way for public street accessing each of the developable parcels proposed within the Tentative Map. Proposed street widths and sections are consistent with the Specific Plan criteria. Utilities will be provided consistent with the Specific Plan.

Finding C: The site is physically suited for this type of development.

Finding of Fact: The 533.8- acre Project site is currently vacant and undeveloped. The site's elevation ranges from approximately 2,399-2,523 feet above mean sea level (amsl) . There is a difference of approximately 124 feet of elevation change from the southeast extent of the site to northwest extent of 931
the Project site. The topography is fairly level with gentle slopes, and several watercourses transect the site. Pershing Creek flows in a northwest to southeast direction through the eastern portion of the Development Site and Smith Creek flows in a north-south direction. Highland Wash is a smaller drainage course and tributary to Smith Creek that confluences with Smith Creek near Westward Avenue. The subject site encompasses 533.8 acres, including 253.7 acres making up approximately the south half of the development project is presently outside of the current City limits and within the City's Sphere of Influence. These 253.7 acres will be annexed into the City of Banning upon approval of the Sunset Crossroads Specific Plan. The proposed map as conditioned, including the mitigation measures contained within the Final Environmental Impact Report and the Mitigation Monitoring Reporting Program will ensure that the Project's development is in accordance with and will implement the public improvements and mechanisms whereby the necessary facilities and resources will be available for future uses.

Finding D: The subject site is physically suitable for the proposed density of development.

Finding of Fact: The subject site consists of 533.8-acres of vacant and undeveloped land and is planned to provide development opportunities for commercial/retail and industrial uses. However, no residential density is proposed.

Finding E: The design of the subdivision or the proposed improvements are not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat.

Finding of Fact: With the exception of the significant and unavoidable environmental effects of the project identified in the FEIR and the MMRP, the design of the subdivision and proposed improvements are not expected to cause substantial environmental damage or to substantially injure fish or wildlife or their habitat. The project site is not in a linkage designated under the MSHCP that is a connection between substantial habitat blocks with adequate size, configuration, and vegetation characteristics to generally provide for "live-in" habitat and/or provide for genetic flow for identified covered species. Significant cumulative effects of the project on the MSHCP-covered plans and wildlife, wildlife movement, riparian/riverine areas and habitat connectivity are fully mitigated by the City of Banning's signatory status under the MSHCP and the requisite measures for mitigation of project -specific impacts to the burrowing owl, Los Angeles pocket mouse and Stephens' kangaroo rat and these species' habitat.

Cumulative effects not specially covered under the MSHCP are nevertheless mitigated to less than significant levels by the broad range of habitats covered by the MSHCP, project design features and mitigation measures required for the proposed project, and payment of the MSHCP mitigation fee.

Finding F: The design of the subdivision or type of improvements is not likely to cause serious public health problems.

Finding of Fact: All parcels planned for development within the subdivision will have access to utilities, including water, wastewater and electricity. Emergency services such as police and fire, are also available to serve the properties as these parcels develop. As a result, no public health problems are anticipated.

Finding G: The design of the subdivision or type of improvements will not conflict with easements, acquired by the public at large, for access through or use of the property within the proposed subdivision.

Finding of Fact : The subdivision proposes to dedicate public streets that will be consistent with the criteria planned by the Sunset Crossroads Specific Plan. With the improvement of the development, this will allow safe access through the site and provide each newly established parcel with access.

ENVIRONMENTAL DETERMINATION:

Environmental Impact Report (EIR):

Pursuant to Section 15060(d) of the California Environmental Quality Act (CEQA) Guidelines, "If the lead agency can determine that an EIR will be clearly required for a project, the agency may skip further initial review of the project and begin work directly on the EIR process described in Article 9, commencing with Section 15080. In the absence of an initial study, the lead agency shall still focus the EIR on the significant effects of the project and indicate briefly its reasons for determining that other effects would 932
not be significant or potentially significant." Based upon the complexity and magnitude of the proposed project, the City determined that an Environmental Impact Report should be prepared for the project, and an Initial Study was not necessary. A Notice of Preparation (NOP) was therefore completed and distributed to the State Clearinghouse, as well as agencies and organizations that may provide comment on the Project's potential impacts on the environment. The State of California Clearinghouse issued a project number for the project, SCH No. 2021020011. The 30 -day public comment period extended from February 1 to March 3, 2021. An electronic copy of the NOP was made available on the City's website.

Comments received during the public review of the NOP were utilized to assist in identifying potential environmental impacts addressed in Chapter 4.0 of the Draft EIR.

Scoping Meeting: Due to COVID-19 restrictions, the Public Scoping meeting was held virtually on February 18, 2021 at 5:30 p.m. via Zoom. Notice of the Public Scoping Meeting was published in the Banning Record Gazette on February 5, 2021 providing the appropriate instructions for public participation in the Scoping Meeting. The Public Scoping Meeting included a presentation providing a summary of the Project, required actions, and the environmental review process. No public comments were received during the Scoping Meeting.

Tribal Consultation: The Development Project includes a General Plan Amendment and implementation of a Specific Plan for the Development Project; therefore, Native American consultation pursuant to both SB 18 and Assembly Bill 52 (AB 52) are required. On November 30, 2020 the City reached out to 31 Native American contacts to formally invite participation in tribal consultation pursuant to AB 52 and SB 18 required for the Development Project. The City received responses from the Morongo Band of Mission Indians (MBMI), the Soboba Band of Luiseno Indians (SBLI), and the Agua Caliente Band of Cahuilla Indians (ACBCI) requesting formal consultation with the City regarding the Development Project.

The City provided a separate consultation invitation to these same 31 Native American contacts on August 25, 2022, specifically identifying the entitlement actions related to the MSJC Site. In this 2022 consultation, the City stated the MSJC Site Entitlements proposed only changes to the City's land use and zoning maps, and that no construction or physical alterations were proposed or would be authorized under the MSJC Entitlements. The MBMI acknowledged the City's actions and noted the MSJC Site is located within the ancestral territory and traditional use area of the Cahuilla and Serrano people of the MBMI and that any future construction or alterations to the MSJC Site would be of interest to the MBMI.

The San Manuel Band of Mission Indians (SMBMI) stated the MSJC Site is outside of Serrano ancestral territory and, as such, SMBMI would not request consulting party status with the City.

Draft EIR : A Notice of Availability (NOA) of the Draft EIR was provided to responsible and trustee agencies, as well as the organizations, and persons who have previously requested notification. The NOA was distributed via priority mail with confirmed receipt. The NOA identified the State mandated 45- day public review period extending from December 15, 2023 to January 30, 2024 and included a weblink to the City's public noticing page providing further access to the Draft EIR, project material, and related technical appendices. Emails advising of the availability of the Draft EIR were sent by the City on December 15, 2023 to those parties requesting electronic notification. These emails provided the same weblink leading to the Draft EIR. Public Comments: The following comment letters were submitted to the City during the public review period: State Agencies:

A-1: State of California, California Air Resources Board, Stanley Armstrong, Air Pollution Specialist (January 12, 2024)
A-2: State of California, Department of Fish and Wildlife, John Dempsey, Environmental Scientist (January 26, 2024)
A-3: State of California, California Air Resources Board, Matthew O'Donnell, Chief, Rish Reduction Branch, Transportation and Toxics Division (January 30, 2024) A-4: State of California, Department of Fish and Wildlife, Kim Freeburn, Environmental Program Manager (February 5, 2024)
A-5: State of California, Department of Justice, Rob Swanson, Deputy Attorney General, Bureau of Environmental Justice (December 21, 2023)
Regional Agencies:

B-1: South Coast Air Quality Management District, Sahar Ghadimi, Air Quality Specialist (January 2, 2024)
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B-2: South Coast Air Quality Management District, Sam Wang, Program Supervisor (January 30, 2024)
Local Agencies:

C-1: Riverside County Flood Control and Water Conservation District, Amy McNeill, Engineering Project Manager (January 10, 2024)
C-2: Riverside County Airport Land Use Commission, Jackie Vega, Urban Regional Planner II (December 19, 2023)
Organizations:

D-1: Sierra Club, George Hague (December 22, 2023)
D-2: Sierra Club, George Hague (December 22, 2023)
D-3: Golden State Environmental Justice Alliance, Represented by Blum, Collins & Ho LLP, Matt Hagemann and Paul Rosenfeld (January 29, 2024) (withdrawn April 23, 2024) D-4: Golden State Environmental Justice Alliance, Adam Salcido (January 29, 2024) (withdrawn April 23, 2024)
D-5: Sierra Club, Represented by Law Office of Abigail Smith, Abigail Smith (January 30, 2024) D-6: Sierra Club, Represented by Law Office of Abigail Smith, Abigail Smith (January 30, 2024) D-7: Western States Regional Council of Carpenters, Represented by Mitchell Tsai Law Firm, Matt Hagemann and Paul Rosenfeld (January 30, 2024)
Individuals:

E-1: Gary and Jan Wilhelmson (December 12, 2023)
E-2: Steve and Raelene Kretchman (January 5, 2024)
E-3: Michael Volz (January 5, 2024)
E-4: Steve and Raelene Kretchman (January 8, 2024)
E-5: Carl and Tara Pueschel (January 8, 2024)
E-6: Janet and Martin Sherman (January 11, 2024)
E-7: Mary Ann Malleby (January 15, 2024)
E-8: Charles Friese (January 19, 2024)
E-9: Patricia Naylor (January 20, 2024)
E-10: Barbara Elness (January 21, 2024)
E-11: Frances Valenzuela (January 21, 2024)
E-12: Nick and Mary Goralsky (January 22, 2024)
E-13: Korrie Gartzke (January 23, 2024)
E-14: Rick and Lori Kaminsky (January 23, 2024)
E-15: Bernet Roth (January 14, 2024)
E-16: Timothy and Francisca Hanrathy (January 25, 2024) E-17: David and Ruth Madon (January 27, 2024)
E-18: John and Shirley Creviston (January 28, 2024)
E-19: Armando Aranda (January 29, 2024)
E-20: Kathleen Aranda (January 29, 2024)
E-21: Andrea Arthuholtz (January 29, 2024)
E-22: Julie Austin (January 29, 2024)
E-23: Gary Burkel (January 29, 2024)
E-24: Nora Burkel (January 29, 2024)
E-25: Randy Robbins, Jim Corrigan, and Diane Berley, Concerned Citizens (January 29, 2024) E-26: Ginny June (January 29, 2024)
E-27: Tennie Boggs and Jack Marty (January 29, 2024)
E-28: Richard McHard (January 29, 2024)
E-29: Michael Volz (January 29, 2024)
E-30: Sudan Walsh (January 29, 2024)
E-31: Kathleen Dale (January 30, 2024)
E-32: Cindy Medley (January 30, 2024)
E-33: T. Gae Rush (January 31, 2024)
E-34: Robert Messiet (January 30, 2024)
E-35: Diane Nethercott (January 30, 2024)
934
E-36: Ron Roy (January 30, 2024)
E-37: Winona Williams (January 30, 2024)
E-38: Ron Roy (January 30, 2024)
Responses to the comments have been prepared and are included in the Final EIR for the Sunset Crossroads Specific Plan Project.

Less Than Significant Impacts: Of the 20 environmental factors analyzed in the Environmental Impact Report, specific categories associated with these factors were determined to be less than significant and were not further analyzed in the Draft EIR. The categories in these specific factors include:

Aesthetics (Thresholds 4.1.1, 4.1.2, 4.1.3, 4.1.4)
Agriculture and Forestry Resources (Thresholds 4.2.1, 4.2.2, 4.2.3, 4.2.4, 4.2.5) Air Quality (Thresholds 4.3.3, 4.3.4)
Biological Resources (Thresholds 4.4.3, 4.4.4)
Cultural Resources (Threshold 4.5.3)
Energy (Threshold 4.6.1, 4.6.2)
Geology and Soils (Thresholds 4.7.1(i), 4.7.1(ii), 4.7.1(iii), 4.7.1(iv), 4.7.2, 4.7.3, 4.7.4, 4.7.5) Hazards and Hazardous Materials (Thresholds 4.9.1, 4.9.2, 4.9.3, 4.9.4, 4.9.5, 4.9.6, 4.9.7) Hydrology and Water Quality (Thresholds 4.10.1, 4.10.2, 4.10.4, and 4.10.5) Land Use and Planning (Thresholds 4.11.1, 4.11.2)
Mineral Resources (Thresholds 4.12.1, 4.12.2)
Noise (Thresholds 4.13.1, 4.13.2, 4.13.3)
Population and Housing (Thresholds 4.14.1, 4.14.2)
Public Services (Thresholds 4.15.1, 4.15.2, 4.15.3, 4.15.4, 4.15.5) Recreation (Thresholds 4.16.1, 4.16.2)
Transportation (Thresholds 4.17.1, 4.17.3, 4.17.4)
Utilities and Service Systems (Thresholds 4.19.1, 4.19.2, 4.19.3, 4.19.4, 4.19.5) Wildfire (Thresholds 4.20.1, 4.20.2, 4.20.3, 4.20.4)
Impacts Mitigated to Less Than Significant: Mitigation measures are proposed to reduce impacts to less than significant for the various categories analyzed in the EIR. These mitigation measures are included in the Mitigation Monitoring and Reporting Program (MMRP) for the following:

Biological Resources (Thresholds 4.4.1, 4.4.2, 4.4.5, and 4.4.6) Cultural Resources (Threshold 4.5.1)
Geology and Soils (Threshold 4.7.6.)
Hydrology and Water Quality (Threshold 4.10.3)
Tribal and Cultural Resources (Thresholds 4.18.1 and 4.18.2) The MMRP is included as an attachment to this report.

Significant and Unavoidable Impacts: Section 15126 of the CEQA Guidelines requires that the EIR identify the significant environmental effects that cannot be avoided if the proposed project should be implemented (CEQA Guidelines Section 15126(b)), and the significant irreversible environmental changes that would be involved if the proposed project is implemented (CEQA Guidelines Section 15126(c)). Below are the significant and unavoidable impacts identified in the EIR.

Air Quality. Emissions associated with the operation of the Development Project would remain significant and unavoidable, even with implementation of the planned project design features Greenhouse Gas Emissions. Based upon the analysis presented in Section 4.8, Greenhouse Gas Emissions of the EIR, mitigation measures GHG-1 through GHG-7 have been identified to address this impact are feasible and made binding through the MMRP. In addition, MM AIR-1 and AIR-2, as revised, would also be applicable and reduce GHG impacts to the extent feasible (Draft EIR Section 4.8.5.1) and reduce air quality emissions. Despite imposition of these feasible mitigation measures, the volume of GHG emissions generated by
Noise. Noise generated by project construction activities would be reduced to a less than significant level with the implementation of the Mitigation Measure NOI-1. Mitigation Measure NOI-1 includes the installation of minimum 10-foot high temporary construction barriers when Development Project construction activities are within 100 feet from the nearest residential structure and other measures to reduce noise impacts will reduce construction noise impacts associated with on- site construction of the 935
Development Project to less than significant. However, because it is yet to be determined if a noise barrier can be constructed on City right-of-way during construction of roadway and utilities on Sunset Avenue, the City finds that construction noise impacts for construction of the roadway and utilities on Sunset Avenue is considered significant and unavoidable.

Transportation. Mitigation measures require the preparation of a Transportation Demand Management (TDM) strategy report to reduce employee Vehicle Miles Traveled (VMT). While the inclusion of mitigation measures T-1 through T-3 would reduce VMT by 8.4 percent, Project generated VMT per employee still exceeds the City’s adopted VMT impact threshold. Therefore, even with the implementation of MM TRA-1, Transportation threshold 4.17.2 would remain significant and unavoidable.

Findings of Fact and Statement of Overriding Considerations:

The California Environmental Quality Act provides provisions for an agency to approve a project when such a project will cause one or more significant environmental effects. In conjunction with the certification of the EIR, findings of fact are required pursuant to Section 15091 of the Public Resources Code (PRC) which provides that no public agency shall approve or carry out a project for which an Environmental Impact Report (EIR) has been certified that identifies one or more significant environmental effects of the project, unless, the public agency makes one or more written findings for each of those significant effects, accompanied by a brief explanation of the rationale for each finding.

The possible findings are:

1. Changes or alterations have been required in, or incorporated into, the project, which avoid or substantially lessen the significant environmental effects as identified in the Final EIR.

2. Such changes or alterations are within the responsibility and jurisdiction of another public agency and not the agency making the finding. Such changes have been adopted by such other agency or can and should be adopted by such other agency.

3. Specific economic, legal, social, technological, or other considerations, including provisions of employment opportunities for highly trained workers, make infeasible the mitigation measures or project alternatives identified in the Final EIR.

Additionally, the Lead Agency must not approve a project that will have a significant effect on the environment unless it finds that specific overriding economic, legal, social, technological, or other benefits of the project outweigh the unavoidable adverse environmental effects (PRC § 21081(b)).

Therefore, a Statement of Overriding Considerations and Findings of Fact have been prepared for the Project and will allow the City to find and declare that the Project benefits outweigh the impacts as justified and described in these documents, which are attached to this report.

PUBLIC COMMUNICATION:

On January 2, 2026, a notice of public hearing was mailed to owners within 300 feet of the project site, notifying the public that the subject applications would be considered by the City Council at a public hearing on January 28, 2026. This notice was also published in the Record Gazette, a newspaper of general circulation within the City of Banning, on January 2, 2026. Several comment letters were received and are included as an attachment to this report.

FISCAL IMPACT:

Increased property tax and sales tax revenues to the City from the development of commercial and industrial properties, including development impact fees and other fee revenue outlined in the Development Agreement.

BANNING NEEDS DEVELOPMENT AGREEMENT AS PROPOSED
Build back General Fund-Fund Balance and 1. Initial $3M upfront payment – no strings 936
Eliminate negative $12.9 ISF Net Position 2. Additional Public Benefit Fees - $3.8M Eliminate General Fund $4M Structural Annual
Deficit

1. Potential “big box” retail would produce $1M-
$2M in annual sales tax

2. Potential CFD payments up to $1M annually
after build-out dedicated to public safety
Animal Control (Strategic Plan Tier-1 initiative)
$500,000 grant prior to the 1st grading permit for an
industrial building
Downtown Revitalization (Strategic Plan Tier-1
Initiative
$750,000 grant that will consist of 3 payments of
$250,000 at 2 months, 12 months and 24 months
after effective date
Fire Station and apparatus south of I-10
Land dedication, $16M for a new fire station (with
CPI between 1% and 5%), $1M for fire apparatus =
improved response times
Needed construction & funding for project mitigation
Various dedications of land, commitment for
construction and payments of Impact Fees
Improved quality of life amenities
Dedication of open space, trails and construction of
a park
ALTERNATIVES:

BUDGETED?:

No
CONTRACT/AGREEMENT:

No
ATTACHMENTS:

1. 7.3a GPA20-2501 ZC20-3502 TPM38118 CA CC EIR SOC MMRP REJECT Reso 2026-26.pdf

2. 7.3b GPA20-2501 ZC20-3502 SP20-2002 TPM38118 DA CC DENIAL Reso 2026-27.pdf

3. 7.3c GPA20-2501 ZC20-3502 TPM38118 DA CC EIR SOC MMRP CERTIFICATION Reso 2026-

28.pdf

4. 7.3d GPA 20-2501 SP 20-2002 APPROVAL Reso 2026-29.pdf

5. 7.3e GPA20-2501 ANNEXATION Reso 2026-30.pdf

6. 7.3f TPM38118 CC APPROVAL Reso 2026-31.pdf

7. 7.3g GPA20-2501 ZC20-3502 SP20-2002 TPM38118 EA20-1506 CC ExA COA AMENDED.pdf

8. 7.3h ZC CC Ordinance No. 1618.pdf

9. 7.3i DA CC Ordinance 1620.pdf

10. 7.3j1 REDLINE - Banning Sunset Crossroads DA 4861-3845-1024 v.132-152.pdf

11. 7.3j2 CLEAN - Banning Sunset Crossroads DA 4861-3845-1024 v.152.pdf

12. 7.3j3 Banning Strategic Plan 2-24-26.pdf

13. 7.3j4 Banning Strategic Plan Appendix A 2-24-26.pdf

14. 7.3k Sunset Crossroads Specific Plan 2024-09-25.pdf

15. 7.3l TPM 38118 2024_09_16.pdf

16. 7.3m Link to Draft and Final EIR Documents Online.pdf

17. 7.3n CEQA Findings and SOOC - Sunset Crossroads.pdf

18. 7.3o Sunset Crossroads - Supplemental CEQA Technical Memorandum.pdf

19. 7.3p SunsetCrossroads - Modified Project v2.1 CEQA Tech Memo - Trip Generation Assessment AMENDED.pdf
937

20. 7.3q Sunset Crossroads Aerial Vicinity GP Zoning Maps.pdf

21. 7.3r PHN CC Meeting 01-28-26 Sunset Crossroads SP.pdf

22. 7.3s Sunset Crossroads Ltr to City Council 01.23.26.pdf

23. 7.3t Letters received in Support of Sunset Crossroads SP.pdf

24. 7.3u Letters received in Opposition of Sunset Crossroads SP.pdf

25. 7.3v Supplemental Correspondence Received After Public Hearing - January 28, 2026.pdf

26. 7.3w 2026 01 28_Special Meeting_Minutes_DRAFT.pdf

27. 7.3x 2025 09 10_Special PC Meeting Minutes_DRAFT.pdf

28. 7.3y 2025 11 17_PC Minutes_DRAFT.pdf

29. 7.3z Staff Report Complete Text Pgs 19-20 - Significant and Unavoidable Impacts.pdf 938
Resolution 2026-26
March 10, 2026

RESOLUTION 2026-26

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING,

CALIFORNIA, REJECTING THE CERTIFICATION OF AN
ENVIRONMENTAL IMPACT REPORT (EIR SCH NO. 2021020011)

INCLUDING RELATED FINDINGS, STATEMENT OF OVERRIDING

CONSIDERATIONS, AND MITIGATION MONITORING AND REPORTING PROGRAM (“MMRP”) FOR THE NP BANNING INDUSTRIAL LLC

INDUSTRIAL AND COMMERCIAL DEVELOPMENT PROJECT
INVOLVING SPECIFIC PLAN NO. 20-2002, GENERAL PLAN
AMENDMENT NO. 20-2501, ZONE CHANGE 20-3502, TENTATIVE
PARCEL MAP NO. 38118, AND A DEVELOPMENT AGREEMENT, ON A 533.8 ACRE PROJECT SITE LOCATED SOUTH OF I-10 AND THE UNION

PACIFIC RAILROAD AND WEST OF SUNSET AVENUE
WHEREAS, an application for Specific Plan 20-2002, General Plan Amendment (GPA) 20-2501, Zone Change (ZC) 20-3502, Tentative Parcel Map (TPM) 38118, and a Development Agreement with the City of Banning (collectively, the "Project"), for the development of industrial and commercial uses on a 533.8-acre project site located south of I-10 and the Union Pacific Railroad, and west of Sunset Avenue (assessor’s parcel numbers (APNS): 537-110-003 through -005, 537-110-011 through -014, 537-120-013, 537- 120-025, and 537-120-028 through -036), including 253.7 acres located in unincorporated riverside county and the city’s southerly sphere of influence, has been duly filed by NP Banning Industrial, LLC; and
WHEREAS, concurrently with consideration of the Project, the City is considering General Plan Amendment (GPA) 22-2502, and Zone Change (ZC) 22-3502, to amend the existing land use designation on twelve parcels of land from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), and amending the Zoning District classification from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), for 40.9 acres of a 49.2-acre site located at the southeast corner of Westward and Sunset Avenues (APNs: 537-140-004, 537-140-006 through -012, 537-150-001, 537- 150-003 and -004, 537-150-008, and 537-140-001 through -003 (collectively the “MSJC Site”) to ensure that approval of the Project will not result in a net loss of residential housing capacity; and
WHEREAS, pursuant to Section 17.04.060.A. of the Banning Municipal Code, the City Council has the authority to review and approve or conditionally approve the subject applications SP 20-2002, GPA 20-2501, ZC 20-3502, TPM 38118, a DA between NP Banning Industrial, LLC and EA 20-1506 (SCH# 2021020011, FEIR for the Project); and WHEREAS, pursuant to the California Environmental Quality Act (CEQA) and State CEQA Guidelines Sections 15064(f)(2) and 15070, the proposal constitutes a project as defined by CEQA and Community Development Department staff has determined that the Project is likely to have a significant effect on the environment; and 939
Resolution 2026-26
March 10, 2026

WHEREAS, based upon the complexity and magnitude of the proposed project, staff determined that an Environmental Impact Report should be prepared for the Project.

A Notice of Preparation (NOP) was subsequently completed and distributed to the State Clearinghouse, as well as agencies and organizations that may provide comments on the Project’s potential impact(s) on the environment; and
WHEREAS, the State of California Clearinghouse issued a project number for the project, SCH No. 2021020011. The 30-day public comment period extended from February 1 to March 3, 2021. An electronic copy of the NOP was made available on the City’s website. Comments received during the public review of the NOP were utilized to assist in identifying potential environmental impacts; and WHEREAS, due to COVID-19 restrictions, the Public Scoping meeting was held virtually on February 18, 2021, via Zoom. Notice of the Public Scoping Meeting was published in the Banning Record Gazette on February 5, 2021, providing the appropriate instructions for public participation in the Scoping Meeting. The Public Scoping Meeting included a presentation providing a summary of the Project, required actions, and the environmental review process. No public comments were received during the Scoping Meeting; and
WHEREAS, the Sunset Crossroads development project includes a General Plan Amendment and implementation of a Specific Plan for the Project; therefore, Native American consultation pursuant to both SB 18 and Assembly Bill 52 (AB 52) were conducted. On November 30, 2020, the City reached out to 31 Native American contacts to formally invite participation in tribal consultation pursuant to AB 52 and SB 18 required for the Project. The City received responses from the Morongo Band of Mission Indians (MBMI), the Soboba Band of Luiseño Indians (SBLI), and the Agua Caliente Band of Cahuilla Indians (ACBCI) requesting formal consultation with the City regarding the Development Project; and
WHEREAS, a Notice of Availability (NOA) of the Draft EIR was provided to responsible and trustee agencies, as well as the organizations, and persons who have previously requested notification. The NOA was distributed via priority mail with confirmed receipt. The NOA identified the State mandated 45-day public review period extending from December 15, 2023, to January 30, 2024, and included a weblink to the City’s public noticing page providing further access to the Draft EIR, project material, and related technical appendices. Emails advising of the availability of the Draft EIR were sent by the City on December 15, 2023, to those parties requesting electronic notification. These emails provided the same weblink leading to the Draft EIR; and WHEREAS, during the public review and comment period, the City received 54 letters from Resource Agencies, Trustee Agencies, and other interested parties. The City prepared a response to each comment letter received and prepared a Final Environmental Impact Report for the Project; and
940
Resolution 2026-26
March 10, 2026

WHEREAS, in accordance with the disclosure requirements of CEQA Guidelines Section 15072(g)(5), the Project site is not listed as a hazardous property as designated under Section 65962.5 of the Government Code; and
WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on August 15, 2025, the City provided public hearing notice by advertisement in the Record Gazette newspaper of a public hearing concerning the Project, before the Planning Commission to consider the Project and to recommend that the City Council adopt a Final Environmental Impact Report (FEIR) for the Project. The public hearing notice was also mailed to the owners of the subject properties within 300-feet of the Project boundary; and
WHEREAS, in accordance with Government Code Sections 65353 and 65855, on September 10, 2025, the Planning Commission held the duly noticed public hearing at which interested persons had an opportunity to testify in support of, or opposition to the Project and at which time the Planning Commission considered the entirety of the Project.

At the conclusion of the hearing, the Commission voted 2 in support and 3 opposed to adopt the draft resolution recommending approval, resulting in a failed motion; and WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on October 10, 2025, the City provided notice by advertisement in the Record Gazette newspaper of a public hearing concerning the Project, before the Planning Commission to consider the Project and to recommend that the City Council adopt a Final Environmental Impact Report (FEIR) for the Project. The public hearing notice was also mailed to the owners of the subject properties within 300-feet of the Project boundary; and
WHEREAS, in accordance with Government Code Sections 65353 and 65855, on November 5, 2025 the Planning Commission considered any new information received on the project and voted 3 in support and 2 opposed to not re-open the public hearing, in accordance with the City of Banning’s Manual of Procedural Guidelines, Section 7.3(e), before continuing its deliberation and considering the entirety of the record for the Project; and
WHEREAS, at the November 5, 2025, regular meeting, the Planning Commission voted 5-0 instructing staff to prepare a resolution making findings supporting a denial recommendation to the City Council of the Projects and rejection of the certification of the EIR; and
WHEREAS, at the November 17, 2025, special meeting, the Planning Commission voted 3-2 adopting Resolution No. 2025-16 recommending the City Council deny Project applications and rejecting the certification of the EIR SCH No. 2021020011, including Related Findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program; and
WHEREAS, a public notice for the January 28, 2026, City Council special meeting 941
Resolution 2026-26
March 10, 2026

was published in accordance with State law and the Banning Municipal Code, and written notice was mailed to property owners within 300 feet of the project site; and WHEREAS, in accordance with Government Code Section 65353 and 65855, on January 28, 2026, the City Council held the duly noticed special public hearing at which interested persons had an opportunity to testify in support of, or opposition to the Project and at which time the City Council considered the entirety of the Project. At the conclusion of the hearing, the Council voted unanimously 5-0 to continue the item to a special public hearing date of February 26, 2026; and
WHEREAS, in accordance with Government Code Section 65353 and 65855, on February 26, 2026, the City Council voted unanimously 5-0 to continue the item to a regular meeting date of March 10, 2026; and
WHEREAS, the City Council has reviewed the staff report, Planning Commission recommendation, environmental documentation, proposed general plan amendment and zone change, supporting materials, and public testimony and finds the project in conformance with the requirements of the Banning Municipal Code, the City’s General Plan, and the Zoning Ordinance.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. RECITALS.

The preceding Recitals are true and correct and made a part of this Resolution.

SECTION 2. ENVIRONMENTAL DETERMINATION.

A. Pursuant to the California Environmental Quality Act (CEQA) (Cal. Pub. Res. Code § 21000 et seq.), the State Guidelines (14 Cal. Code Regs. § 15000 et seq.), City Staff prepared an Environmental Impact Report evaluating the potential environmental effects of the Sunset Crossroads development project, and a programmatic analysis of the proposed MSJC entitlements.

B. Thereafter, City Staff provided public notice of completion of a DEIR and establishing the 45-day public review and comment period as required by law. The public comment period began on December 15, 2023, and expired on January 30, 2024. Copies of the documents are available for public review and inspection at City Hall, 99 E. Ramsey Street, Banning, California 92220, the Banning Public Library, located at 21 West Nicolet Street, Banning, California 92220, and the City of Banning website. The City received 54 comment letters during the public review period.

C. The City Council reviewed the Final EIR, inclusive of the Draft EIR, which is on file with the Planning Department and incorporated herein by this reference, and all comments received regarding the Sunset Crossroads Specific Plan EIR. In light of the whole record, the City Council determines and finds that: the project will result in 942
Resolution 2026-26
March 10, 2026

significant and unavoidable impacts on the environment, including the degradation of air quality and increases in vehicles miles travelled, noise and greenhouse gas emissions as a result of the Project. The City Council finds that the overriding considerations related to the social, economic and other benefits of the Project, including the eight identified in the Statement of Overriding Considerations as part of the record, do not outweigh the potential unavoidable significant impacts.

D. Based on the findings set forth in this Resolution and the whole of the administrative record in this matter, the City Council rejects the certification of the Sunset Crossroads FEIR, rejects adoption of the related CEQA Findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program for the Project.

SECTION 3. DENIAL
The City Council hereby affirms the Planning Commission’s recommendation and DENIES the Project applications and REJECTS the certification of the EIR SCH No. 2021020011, including Related Findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program.

SECTION 4. CERTIFICATION
The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book or original resolutions.

PASSED, APPROVED AND ADOPTED this 10th day of March, 2026.

Richard Royce, Mayor
City of Banning
ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning

APPROVED AS TO FORM
John Pinkney, City Attorney
Slovak, Baron, Empey, Murphy, & Pinkney LLP
943
Resolution 2026-26
March 10, 2026

CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk for the City of Banning City Council, do hereby certify that the foregoing Resolution No. 2026-26, was duly adopted by the City Council of the City of Banning, California, at a special meeting thereof held on the 10th day of March, 2026, by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sandra Calderon, Deputy City Clerk
City of Banning
944
Resolution 2026-27
March 10, 2026

RESOLUTION 2026-27

A RESOLUTION OF THE CITY COUNDIL OF THE CITY OF BANNING, CA, DENYING THE SUNSET CROSSROADS SPECIFIC PLAN NO. 20- 2002, GENERAL PLAN AMENDMENT NO. 20-2501, ZONE CHANGE 20- 3502, TENTATIVE PARCEL MAP NO. 38118, AND A DEVELOPMENT

AGREEMENT BETWEEN THE CITY AND NP BANNING INDUSTRIAL

LLC FOR THE DEVELOPMENT OF INDUSTRIAL AND COMMERCIAL
USES ON A 533.8-ACRE PROJECT SITE LOCATED SOUTH OF I-10

AND THE UNION PACIFIC RAILROAD, AND WEST OF SUNSET
AVENUE (ASSESSOR’S PARCEL NUMBERS (APNS): 537-110-003
THROUGH -005, 537-110-011 THROUGH -014, 537-120-013, 537-120- 025, AND 537-120-028 THROUGH -036), INCLUDING 253.7 ACRES

LOCATED IN UNINCORPORATED RIVERSIDE COUNTY AND THE
CITY’S SOUTHERLY SPHERE OF INFLUENCE
WHEREAS, an application for Specific Plan 20-2002, General Plan Amendment (GPA) 20-2501, Zone Change (ZC) 20-3502, Tentative Parcel Map (TPM) 38118, and a Development Agreement with the City of Banning (collectively, the "Project"), for the development of industrial and commercial uses on a 533.8-acre project site located south of I-10 and the Union Pacific Railroad, and west of Sunset Avenue (assessor’s parcel numbers (APNS): 537-110-003 through -005, 537-110-011 through -014, 537-120-013, 537-120-025, and 537-120-028 through -036), including 253.7 acres located in unincorporated riverside county and the city’s southerly sphere of influence, has been duly filed by NP Banning Industrial, LLC; and
WHEREAS, concurrently with consideration of the Project, the City is considering General Plan Amendment (GPA) 22-2502, and Zone Change (ZC) 22-3502, to amend the existing land use designation on twelve parcels of land from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), and amending the Zoning District classification from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), for 40.9 acres of a 49.2-acre site located at the southeast corner of Westward and Sunset Avenues (APNs: 537-140-004, 537-140-006 through -012, 537-150-001, 537- 150-003 and -004, 537-150-008, and 537-140-001 through -003 (collectively the “MSJC Site”) to ensure that approval of the Project will not result in a net loss of residential housing capacity; and
WHEREAS, pursuant to Section 17.04.060.C. of the Banning Municipal Code, the City Council has the authority to review and approve or conditionally approve the subject applications SP 20-2002, GPA 20-2501, ZC 20-3502, TPM 38118, a DA between NP Banning Industrial, LLC and EA 20-1506 (SCH# 2021020011, FEIR for the Project); and WHEREAS, pursuant to Section 17.76.020 of the Banning Municipal Code, the City Council has the authority to interpret the General Plan; and 945
Resolution 2026-27
March 10, 2026

WHEREAS, pursuant to the California Environmental Quality Act (CEQA) and State CEQA Guidelines Sections 15064(f)(2) and 15070, the proposal constitutes a project as defined by CEQA and Community Development Department staff has determined that the Project is likely to have a significant effect on the environment; and WHEREAS, based upon the complexity and magnitude of the proposed project, staff determined that an Environmental Impact Report should be prepared for the project, and an Initial Study was not necessary. A Notice of Preparation (NOP) was therefore completed and distributed to the State Clearinghouse, as well as agencies and organizations that may provide comment on the Project’s potential impact(s) on the environment; and
WHEREAS, the State of California Clearinghouse issued a project number for the project, SCH No. 2021020011. The 30-day public comment period extended from February 1 to March 3, 2021. An electronic copy of the NOP was made available on the City’s website. Comments received during the public review of the NOP were utilized to assist in identifying potential environmental impacts; and WHEREAS, due to COVID-19 restrictions, the Public Scoping meeting was held virtually on February 18, 2021, via Zoom. Notice of the Public Scoping Meeting was published in the Banning Record Gazette on February 5, 2021, providing the appropriate instructions for public participation in the Scoping Meeting. The Public Scoping Meeting included a presentation providing a summary of the Project, required actions, and the environmental review process. No public comments were received during the Scoping Meeting; and
WHEREAS, the Sunset Crossroads development project includes a General Plan Amendment and implementation of a Specific Plan for the Project; therefore, Native American consultation pursuant to both SB 18 and Assembly Bill 52 (AB 52) were conducted. On November 30, 2020, the City reached out to 31 Native American contacts to formally invite participation in tribal consultation pursuant to AB 52 and SB 18 required for the Project. The City received responses from the Morongo Band of Mission Indians (MBMI), the Soboba Band of Luiseño Indians (SBLI), and the Agua Caliente Band of Cahuilla Indians (ACBCI) requesting formal consultation with the City regarding the Development Project; and
WHEREAS, a Notice of Availability (NOA) of the Draft EIR was provided to responsible and trustee agencies, as well as the organizations, and persons who have previously requested notification. The NOA was distributed via priority mail with confirmed receipt. The NOA identified the State mandated 45-day public review period extending from December 15, 2023, to January 30, 2024, and included a weblink to the City’s public noticing page providing further access to the Draft EIR, project material, and related technical appendices. Emails advising of the availability of the Draft EIR were sent by the City on December 15, 2023, to those parties requesting electronic notification. These emails provided the same weblink leading to the Draft EIR; and 946
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WHEREAS, during the public review and comment period, the City received 54 letters from Resource Agencies, Trustee Agencies, and other interested parties. The City prepared a response to each comment letter received and prepared a Final Environmental Impact Report for the Project; and
WHEREAS, in accordance with the disclosure requirements of CEQA Guidelines Section 15072(g)(5), the Project site is not listed as a hazardous property as designated under Section 65962.5 of the Government Code; and
WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on August 15, 2025, the City provided public hearing notice by advertisement in the Record Gazette newspaper of a public hearing before the Planning Commission to consider the Project, and related environmental documentation. The public hearing notice was also mailed to the owners of the subject properties within 300-feet of the Project boundary; and
WHEREAS, in accordance with Government Code Sections 65353 and 65855, on September 10, 2025, the Planning Commission held the duly noticed public hearing at which interested persons had an opportunity to testify in support of, or opposition to the Project and at which time the Planning Commission considered the entirety of the Project.

At the conclusion of the hearing, the Commission voted 2 in support and 3 opposed to adopt the draft resolution recommending approval, resulting in a failed motion; and WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on October 10, 2025, the City provided notice by advertisement in the Record Gazette newspaper of a public hearing before the Planning Commission for further deliberation to consider the Project and related environmental documentation. The notice was also mailed to the owners of the subject properties within 300 feet of the Project boundary; and
WHEREAS, in accordance with Government Code Sections 65353 and 65855, on November 5, 2025 the Planning Commission considered any new information received on the project and voted 3 in support and 2 opposed to not re-open the public hearing, in accordance with the City of Banning’s Manual of Procedural Guidelines, Section 7.3(e), before continuing its deliberation and considering the entirety of the record for the Project; and
WHEREAS, after further deliberation the Planning Commission voted 3 in support and 2 opposed to instruct staff to prepare a resolution making findings supporting a denial recommendation to the City Council and said resolution was considered at a Special Meeting of the Planning Commission on November 17, 2025.

WHEREAS, at the November 17, 2025, special meeting, the Planning Commission voted 3-2 adopting Resolution No. 2025-16 recommending the City Council deny Project applications and rejecting the certification of the EIR SCH No. 2021020011, including 947
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Related Findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program; and
WHEREAS, a public notice for the January 28, 2026, City Council special meeting was published in accordance with State law and the Banning Municipal Code, and written notice was mailed to property owners within 300 feet of the project site; and WHEREAS, in accordance with Government Code Section 65353 and 65855, on January 28, 2026, the City Council held the duly noticed special public hearing at which interested persons had an opportunity to testify in support of, or opposition to the Project and at which time the City Council considered the entirety of the Project. At the conclusion of the hearing, the Council voted unanimously 5-0 to continue the item to a special public hearing date of February 26, 2026; and
WHEREAS, in accordance with Government Code Section 65353 and 65855, on February 26, 2026, the City Council voted unanimously 5-0 to continue the item to a regular meeting date of March 10, 2026; and
WHEREAS, the City Council has reviewed the staff report, Planning Commission recommendation, environmental documentation, proposed general plan amendment and zone change, supporting materials, and public testimony and finds the project in conformance with the requirements of the Banning Municipal Code, the City’s General Plan, and the Zoning Ordinance.

NOW, THEREFORE, the City Council of the City of Banning does hereby resolve, determine, find, and order as follows:

SECTION 1. RECITALS:

The preceding Recitals are true and correct and made a part of this Resolution.

SECTION 2. FINDINGS FOR GENERAL PLAN AMENDMENT:

Section 17.64.070 of the Banning Municipal Code (BMC) requires that General Plan Amendment applications meet four required findings. The City Council does hereby find and determine that General Plan Amendment, Case No. GPA 20-2501, be denied as a legislative act based on information in the record and because at least one of the required findings cannot be met in the affirmative for the following reasons:

Finding A: That the proposed amendment is internally consistent with the General Plan.

Findings of Fact: The Project seeks to amend the allowable land use of approximately 400 acres of land from residential to industrial in an area that is primarily surrounded by existing and planned residential land uses, to allow an industrial development of approximately 5 million square feet of building area in buildings ranging in size up to 1.4- million square feet. The proposed Amendment to the General Plan would create internal 948
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inconsistencies with the General Plan Vision Statement, the Circulation Element and the Land Use Element for the following reasons:

1. Vision Statement. We see evenly distributed residential development of all types which provides quality housing for all our residents. To accomplish this, we commit to respecting and enhancing the character of our existing neighborhoods, securing more open space, and encouraging high quality development proposals.

The proposed reduction of Residential Land Use to accommodate the proposed amendment and several hundred acres of Industrial Land Use conflicts with this Vision statement by placing Industrial Land Uses into an area characterized by existing and planned Residential Land Uses and distributing too much Industrial Land Use in the City. As described further below, the amendment will increase overall Industrial acreage in the City by approximately 40%, which is inconsistent with the above vision statement. The truck-intensive nature of the proposed industrial uses and associated routing of trucks past established and planned residential neighborhoods does not respect or enhance the character of existing neighborhoods surrounding the land proposed for amendment to industrial, due to significant impacts as described in the EIR and further described below.

2. Community Development – Land Use Element
a. Residential Goal 1. Preserve and enhance the City’s neighborhoods. b. Residential Policy 2. Projects adjacent to existing neighborhoods shall be carefully reviewed to ensure that neighborhood character is protected.

The proposed amendment conflicts with the above goal and policy in the General Plan. The proposed truck-intensive impacts from the industrial/warehouse uses will not respect the character of existing and proposed residential neighborhoods that surround the Project site. Residential uses adjacent to the east side of Sunset Avenue will be impacted by the increase in truck traffic from the proposed Amendment to allow Industrial Land Uses, because of the anticipated 1,850 trucks using Sunset Avenue and the resulting degradation of air quality, increase in greenhouse gas emissions and increase in noise and visual blight impacts to these residents. Consequently, the proposed Amendment does not protect, nor enhance, the existing and planned residential uses in the adjacent and surrounding neighborhoods. The amendment is inconsistent with Residential Goal 1 and Residential Policy 2.
c. Industrial Goal. A balanced mix of non-polluting industrial land uses which provide local jobs for the City’s residents.

The proposed amendment conflicts with the above goal. The Environmental Impact Report identifies significant and unavoidable impacts to air quality and greenhouse gases as a result of the amendment. Significant impacts include both construction and operational from the Industrial Land Use that cannot be mitigated 949
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to less than significant. Therefore, the amendment conflicts with the above Industrial Goal by introducing polluting industrial uses. d. Commercial and Industrial Policy 7. The land use map shall include sufficient industrial lands for manufacturing, warehousing and distribution, while carefully considering compatibility with adjacent lands.

In addition to increasing traffic adjacent to residential neighborhoods, the building mass, building scale, noise and general operating characteristics of the proposed industrial warehouses are incompatible with the established and proposed residential neighborhoods in the surrounding area. Buildings within the development will reach up to 60 feet in height, which is incompatible with the character of the residential neighborhood to the west, south and east of the site proposed under this amendment. Consequently, the amendment is inconsistent with Commercial and Industrial Policy 7.
e. Commercial and Industrial Policy 8. Industrial lands shall be located on major roadways with good access to Interstate 10, to assure that potential traffic impacts associated with tractor-trailers are minimized.

The amendment would introduce approximately 1,850 truck trips per day on Sunset Avenue, where there is currently essentially no truck traffic and where existing, adjacent residential developments and the Rancho San Gorgonio project, a planned residential development with 3,400 units, will utilize Sunset Avenue to access the I-10 freeway and surrounding businesses. The I-10 and Sunset Ave interchange is not suited to the projected volume of heavy-duty truck traffic considering space between intersections, ramp grades, and proximity to the I-10 and 22nd Avenue interchange. As a result, the amendment is inconsistent with Commercial and Industrial Policy 8, due to the potential traffic impacts associated with tractor-trailers accessing the Project. The amendment conflicts with Commercial and Industrial Policy 8.

3. Community Development – Circulation Element
a. Policy 6. The City shall maintain peak hour Level of Service D or better at all local intersections.

The EIR traffic analysis (Draft EIR Appendix J-2, Table 5.4 and Table 6-3) finds that six study area intersections would operate at a Level of Service less than D as a result of project-level and cumulative traffic generation, which is inconsistent with General Plan Policy 6 of the Circulation Element requiring an LOS of D or better.
b. Program 14.A. The Public Works Department shall prioritize the need for bridges listed in this Element, develop preliminary cost estimates, identify and pursue sources of funding, including developer funding for each facility. 950
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c. Program 14.B. All new development proposals shall pay their fair share of bridge construction needed to serve their project.

Fair-share payment for improvements for impacted roads, particularly the Sunset Bridge at Pershing Creek is not provided as part of the Project. The Project is inconsistent with this provision requiring fair-share payments for bridges. d. Program 28.A. The City shall develop a non-motorized trail system and associated ordinances and other required implementation programs.

The 2010 Parks & Recreation Master Plan identifies an equestrian trail and urban trail loop which are not incorporated into the Project. The amendment is inconsistent with Circulation Element Program 28.A.

For the above reasons, this finding cannot be made.

Finding B: That the proposed amendment would not be detrimental to the public Interest, health, safety, convenience, or welfare of the City.

Findings of Fact: As described in the EIR, the proposed Amendment will result in significant and unavoidable impacts on the environment, including the degradation of air quality and increases in noise and greenhouse gas emissions as a result of the Project, due to the anticipated 1,850 truck trips on Sunset Avenue as well as within the project boundary. As a result, the proposed amendment to the General Plan would be detrimental to the public interest, health, safety, convenience and welfare.

The City has designated certain streets for use by commercial vehicles (in excess of 10,000 pounds) to protect the public health, safety and welfare from potential effects and impacts of commercial trucks (Resolution 2005-091), such streets being designated as Sunset Ave north of Lincoln St, and Lincoln St east of Sunset Ave. However, the amendment to the General Plan would introduce commercial trucks on area roadways that are not designated for use by commercial vehicles in excess of 10,000 pounds.

Consequently, the amendment is inconsistent with Resolution 2005-091 and would be detrimental to the public health, safety and welfare.

For the above reasons, this finding cannot be made.

Finding C: That the proposed amendment would maintain the appropriate balance of land uses within the City.

Findings of Fact: The General Plan designates 940 acres for Industrial uses, which was deemed adequate for a balance of land uses (Economic Development Element, III31). The amendment would increase the amount of land designated for Industrial land use by approximately 390 acres, which is a 40% increase from the balanced condition anticipated by the 2006 General Plan. Further, the amendment would alter the distribution and diversity of planned residential uses by consolidating areas currently planned for a variety of densities onto a much smaller site at substantially higher density. These actions create an imbalance of land uses in the General Plan and disrupt the residential density 951
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ranges anticipated and desired in the City. Consequently, the proposed amendment would not maintain the appropriate balance of land uses within the City. This finding cannot be made.

Finding D: The subject parcels are physically suitable for the requested land use designation(s) and the anticipated land use development(s).

Findings of Fact: The amendment and proposed Project would introduce commercial truck traffic to the adjacent streets, including Sunset Avenue, conflicting with established and planned residential neighborhoods. The additional truck traffic will utilize the I-10 / Sunset Avenue interchange as the sole access point to the I-10 freeway; however, this interchange is not physically suited for the type and volume of traffic anticipated by the amendment and Project. The Project conflicts with multiple fundamental provisions of the adopted General Plan and related City policies and programs. These conflicts arise primarily due to the truck-intensive nature of the proposed industrial uses and proximity to established and future neighborhoods. Therefore, the subject parcels are not suitable for the requested land use designation and land use development due to incompatibility with the surrounding land uses and due to site access, which requires substantial volumes of truck traffic passing by existing and planned residential neighborhoods and use of a single freeway interchange that is not physically suited to use by substantial volumes of heavy trucks. This finding cannot be made.

SECTION 3. FINDINGS FOR AMENDMENT TO TITLE 17 (ZONING):

Per Section 17.116.040, and per the Planning Commission’s recommendation, the City Council finds and determines that Zone Change, Case No. ZC 20-3502, be denied because at least one of the following required findings cannot be met in the affirmative for the following reasons:

Finding A: The proposed amendment is consistent with the goals and policies of the General Plan.

Findings of Fact: The Zone Change amends the zoning to allow the Sunset Crossroads Specific Plan. The Specific Plan proposes 392 acres of Industrial land uses, which is inconsistent with the existing General Plan. The Land Use Plan of the General Plan currently identifies the property as a combination of residential uses (Low Density Residential, Medium Density Residential and High Density Residential), commercial (General Commercial), and open space uses (Open Space-Resources and Open SpaceParks), which are inconsistent with the proposed Specific Plan zone change. Further, the Planning Commission and City Council considered re-designating the allowable land uses for the site to conform to the proposed Specific Plan, but has found that request is inconsistent with the required findings for approval for the reasons stated in Section 3, above. Consequently, the proposed zone change/amendment is inconsistent with the General Plan, including goals and policies identified in Section 3 of this Resolution. This finding cannot be made.

Finding B: The proposed Amendment is internally consistent with the Zoning Ordinance.
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Finding C: That the City Council has independently reviewed and considered the requirements of the California Environmental Quality Act.

Findings of Fact: Per the Planning Commission recommendation, the City Council considered the EIR and determined the project result will result in significant and unavoidable impacts to the environment, including the degradation of air quality and increases in noise and greenhouse gas emissions as described in the EIR. In their review of these impacts, the City Council rejects certification of the EIR, as detailed in Section 2, above.

SECTION 4. FINDINGS FOR SPECIFIC PLAN:

BZO Section 17.96.050 requires that four findings be met to justify approval of a Specific Plan application. The City Council finds and determines that Specific Plan, Case No. SP 20-2002, be denied because at least one of the following required findings cannot be met in the affirmative for the following reasons:

Finding A: The proposed plan is consistent with the General Plan.

Finding of Fact: The Specific Plan proposes 392 acres of Industrial land uses, which is inconsistent with the existing General Plan. The Land Use Plan of the General Plan currently identifies the property as a combination of residential uses (Low Density Residential, Medium Density Residential and High Density Residential), commercial (General Commercial), and open space uses (Open Space-Resources and Open SpaceParks), which are inconsistent with the proposed Specific Plan. Further, the Planning Commission and City Council considered re-designating the allowable land uses for the site to conform to the proposed Specific Plan, but has found that request inconsistent with the required findings for approval for the reasons stated in Section 3 of this Resolution.

Consequently, the proposed Specific Plan is inconsistent with the General Plan, including goals and policies identified in Section 3 of this resolution.

Finding B: The proposed plan would not be detrimental to the environment, or to the public interest, health, safety, convenience, or welfare of the City;
Finding C: The subject property is physically suitable for the requested land use designation(s) and the anticipated development(s);
Finding D: The proposed plan shall ensure development of desirable character which will be compatible with existing and proposed development in the surrounding neighborhood.

SECTION 5. FINDINGS FOR TENTATIVE PARCEL MAP 38118:

Pursuant to Section 66474 of the Subdivision Map Act, there are seven findings that must be met to justify approval of a Tentative Map application. The City Council finds and has determined that Tentative Parcel Map, Case No. TPM 38118, be denied because at least one of the following required findings cannot be met in the affirmative for the following reasons:
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Finding A: The proposed Tentative Parcel Map is consistent with all applicable general and specific plans.

Findings of Fact: The Tentative Parcel Map proposes subdividing 392 acres of land for the purposes of Industrial land uses, which is inconsistent with the existing General Plan. The Land Use Plan of the General Plan currently identifies the property as a combination of residential uses (Low Density Residential, Medium Density Residential and High Density Residential), commercial (General Commercial), and open space uses (Open Space-Resources and Open Space-Parks), which are inconsistent with the proposed Tentative Parcel Map. Further, the Planning Commission and City Council considered re-designating the allowable land uses for the site to conform to the proposed Specific Plan, but has found that request inconsistent with the required findings for approval as provided in Section 3 of this Resolution. Consequently, the proposed Tentative Parcel Map is inconsistent with the General Plan, including goals and policies identified in Section 3 of this Resolution.

Finding B: The design and improvements of the proposed Tentative Parcel Map is consistent with the zone in which the property is located.

Finding C: The site is physically suited for this type of development.

Finding D: The subject site is physically suitable for the proposed density of development.

Finding E: The design of the subdivision or the proposed improvements are not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat.

Finding F: The design of the subdivision or type of improvements is not likely to cause serious public health problems.

Finding G: The design of the subdivision or type of improvements will not conflict with easements, acquired by the public at large, for access through or use of the property within the proposed subdivision.

SECTION 6. FINDINGS FOR DEVELOPMENT AGREEMENT:

BZO Section 17.60.030 provides in pertinent part that a Development Agreement is a legislative act, that two findings be met to justify approval of a Development Agreement application, and that it be consistent with Article 25 of Chapter 4 of Division I of Title 7 (Commencing with Section 65864) of the California Government Code. The City Council finds and has determined that the Development Agreement be denied because of information contained in the record and because at least one of the required findings cannot be met in the affirmative for the following reasons:

Finding A: The Development Agreement is consistent with the General Plan, any applicable Specific Plans, and the Zoning Ordinance.

Findings of Fact: The Development Agreement proposes establishing 392 acres of Industrial land uses, which is inconsistent with the existing General Plan. The Land Use Plan of the General Plan currently identifies the property as a combination of residential 954
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uses (Low Density Residential, Medium Density Residential and High Density Residential), commercial (General Commercial), and open space uses (Open SpaceResources and Open Space-Parks), which are inconsistent with the proposed Development Agreement. Further, the Planning Commission and City Council considered re-designating the allowable land uses for the site to conform to the proposed Project, but has found that request inconsistent with the required findings for approval as provided in Section 3 of this Resolution. Consequently, the proposed Development Agreement is inconsistent with the General Plan, including goals and policies identified in Section 3 of this Resolution.

Finding B: The proposed Development Agreement would promote the welfare and the interest of the City.

SECTION 3. DENIAL
The City Council hereby affirms the Planning Commission’s recommendation and DENIES Specific Plan 20-2002, General Plan Amendment (GPA) 20-2501, Zone Change (ZC) 20- 3502, Tentative Parcel Map (TPM) 38118, and the associated Development Agreement and rejects the certification of the EIR SCH No. 2021020011, including Related Findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program.

SECTION 4. CERTIFICATION
The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book or original resolutions.

PASSED, APPROVED AND ADOPTED this 10th day of March 2026 Richard Royce, Mayor
City of Banning
ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning

LEGAL AS TO FORM
John Pinkney, City Attorney
SBMEP
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CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk for the City of Banning City Council, do hereby certify that the foregoing Resolution No. 2026-27, was duly adopted by the City Council of the City of Banning, California, at a special meeting thereof held on the 10th day of March, 2026, by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sandra Calderon, Deputy City Clerk
City of Banning
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RESOLUTION 2026-28

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING,

CALIFORNIA, CERTIFYING AN ENVIRONMENTAL IMPACT REPORT (EIR SCH NO. 2021020011) INCLUDING RELATED FINDINGS, STATEMENT

OF OVERRIDING CONSIDERATIONS, AND MITIGATION MONITORING AND REPORTING PROGRAM (“MMRP”) FOR THE NP BANNING

INDUSTRIAL LLC INDUSTRIAL AND COMMERCIAL DEVELOPMENT
PROJECT INVOLVING, GENERAL PLAN AMENDMENT NO. 20-2501,
ZONE CHANGE 20-3502, SPECIFIC PLAN NO. 20-2002, TENTATIVE PARCEL MAP NO. 38118, AND A DEVELOPMENT AGREEMENT, ON A 533.8 ACRE PROJECT SITE LOCATED SOUTH OF I-10 AND THE UNION

PACIFIC RAILROAD AND WEST OF SUNSET AVENUE AND INCLUDING

A PROGRAMMATIC ANALYSIS OF GENERAL PLAN AMENDMENT (GPA) 22-2502, AND ZONE CHANGE (ZC) 22-3502 IN CONNECTION WITH A

TRANSFER OF RESIDENTIAL DENSITY ON PROPERTY LOCATED AT
THE SOUTHEAST CORNER OF WESTWARD AND SUNSET AVENUES.

WHEREAS, NP Banning Industrial, LLC has filed an application for General Plan Amendment (GPA) 20-2501, Zone Change (ZC) 20-3502, Specific Plan 20-2002, Tentative Parcel Map (TPM) 38118, and a Development Agreement with the City of Banning (collectively, the "Project"), for the development of industrial and commercial uses on approximately 533.8 acres of real property located in the City of Banning and the County of Riverside south of I-10 and the Union Pacific Railroad, and west of Sunset Avenue with 253.7 acres of this property located in unincorporated Riverside County in the City’s southerly sphere of influence. The property is comprised of assessor’s parcel numbers (APNS): 537-110-003 through -005, 537-110-011 through -014, 537-120-013, 537-120- 025, and 537-120-028 through -036 and more specifically described on Exhibit A attached hereto and incorporated herein by this reference (“Project site”); and WHEREAS, concurrently with consideration of the Project, the City is considering General Plan Amendment (GPA) 22-2502, and Zone Change (ZC) 22-3502, to amend the existing land use designation on twelve parcels of land from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), and amending the Zoning District classification from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), for 40.9 acres of a 49.2-acre site located at the southeast corner of Westward and Sunset Avenues (APNs: 537-140-004, 537-140-006 through -012, 537-150-001, 537- 150-003 and -004, 537-150-008, and 537-140-001 through -003 (collectively the “MSJC Site”) to ensure that approval of the Project will not result in a net loss of residential housing capacity; and
WHEREAS, pursuant to Sections 17.60.030, 17.64.060, 17.96.050, 17.116.040 and 16.14.050.A of the Banning Municipal Code, the City Council has the authority to review and approve or conditionally approve the subject applications GPA 20-2501, ZC 20-3502, SP 20-2002, TPM 38118, a DA between NP Banning Industrial, LLC and EA 20- 1506 (SCH# 2021020011); and
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WHEREAS, pursuant to the California Environmental Quality Act (CEQA) and State CEQA Guidelines Sections 15064(f)(1) and 15378, the proposal constitutes a project as defined by CEQA and Community Development Department staff has determined that the Project is likely to have a significant effect on the environment; and WHEREAS, based upon the complexity and magnitude of the proposed project, staff determined that an Environmental Impact Report should be prepared for the Project and an Initial Study was not necessary. A Notice of Preparation (NOP) was subsequently completed and distributed to the State Clearinghouse, as well as agencies and organizations that may provide comments on the Project’s potential impact(s) on the environment; and
WHEREAS, the State of California Clearinghouse issued a project number (SCH No. 2021020011) for an EIR evaluating the Project and the concurrent entitlement of the MSJC Site to accommodate State law required transfer of residential density from the Project site. The NOP 30-day public comment period extended from February 1 to March 3, 2021. An electronic copy of the NOP was made available on the City’s website.

Comments received during the public review of the NOP were utilized to assist in identifying potential environmental impacts; and
WHEREAS, due to COVID-19 restrictions, the Public Scoping meeting was held virtually on February 18, 2021, via Zoom. Notice of the Public Scoping Meeting was published in the Banning Record Gazette on February 5, 2021, providing the appropriate instructions for public participation in the Scoping Meeting. The Public Scoping Meeting included a presentation providing a summary of the Project, required actions, and the environmental review process. No public comments were received during the Scoping Meeting; and
WHEREAS, the Project includes a General Plan Amendment and a Specific Plan for the Project; therefore, Native American consultation pursuant to both SB 18 and Assembly Bill 52 (AB 52) was conducted. On November 30, 2020, the City reached out to 31 Native American contacts to formally invite participation in tribal consultation pursuant to AB 52 and SB 18 required for the Project. The City received responses from the Morongo Band of Mission Indians (MBMI), the Soboba Band of Luiseño Indians (SBLI), and the Agua Caliente Band of Cahuilla Indians (ACBCI) requesting formal consultation with the City regarding the Project with all correspondence received indicated that their respective tribal groups did not have any responses or that no specific archival information at the Development Site indicated that it may be a sacred site or other site of Native American traditional cultural value; and
WHEREAS, the City provided a separate consultation invitation to these same 31 Native American contacts on August 25, 2022, specifically identifying the entitlement actions related to the MSJC Site. In this 2022 consultation, the City stated the MSJC site entitlements proposed only changes to the City’s land use and zoning maps, and that no construction or physical alterations were proposed or would be authorized under the MSJC entitlements. The MBMI acknowledged the City’s actions and noted the MSJC Site is located within the ancestral territory and traditional use area of the Cahuilla and Serrano people of the MBMI and that any future construction or alterations to the MSJC Site would be of interest to the MBMI. The San Manuel Band of Mission Indians (SMBMI) stated the 958
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MSJC Site is outside of Serrano ancestral territory and, as such, SMBMI would not request consulting party status with the City; and
WHEREAS, a Notice of Availability (NOA) of the Draft EIR was provided to responsible and trustee agencies, as well as the organizations, and persons who have previously requested notification. The NOA was distributed via priority mail with confirmed receipt. The NOA identified the State mandated 45-day public review period extending from December 15, 2023 to January 30, 2024, and included a weblink to the City’s public noticing page providing further access to the Draft EIR, project material, and related technical appendices. Emails advising of the availability of the Draft EIR were sent by the City on December 15, 2023, to those parties requesting electronic notification. These emails provided the same weblink leading to the Draft EIR; and WHEREAS, during the public review and comment period, the City received 54 letters from Resource Agencies, Trustee Agencies, and other interested parties. The City prepared a response to each comment letter received and prepared a Final Environmental Impact Report for the Project (the DEIR and Final EIR, collectively, “FEIR”); and
WHEREAS, in accordance with the disclosure requirements of CEQA Guidelines Section 15072(g)(5), the Project site is not listed as a hazardous property as designated under Section 65962.5 of the Government Code; and
WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on August 15, 2025, the City provided public notice by advertisement in the Record Gazette newspaper of a public hearing at a September 10, 2025 Planning Commission special meeting convened to consider the Project and to recommend that the City Council adopt a Final Environmental Impact Report, inclusive of the Draft EIR (“FEIR”) for the Project. The public hearing notice was also mailed to the owners of the subject properties within 300-feet of the Project boundary; and WHEREAS, in accordance with Government Code Sections 65353 and 65855, at the September 10, 2025 special meeting the Planning Commission held the duly noticed public hearing at which interested persons had an opportunity to testify in support of, or opposition to the Project and at which time the Planning Commission considered the entirety of the Project. At the conclusion of the hearing, the Planning Commission voted 2 in support and 3 opposed to adopt the draft resolution recommending approval, resulting in a failed motion; and
WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on October 10, 2025, the City provided notice by advertisement in the Record Gazette newspaper of continuation of the September 10, 2025 Planning Commission special meeting to the regular meeting of the Planning Commission on November 5, 2025 to continue deliberations and make recommendations to the City Council regarding the Project entitlements. including the FEIR. The public hearing notice was also mailed to the owners of the subject properties within 300-feet of the Project boundary; and WHEREAS, the City supplemented the FEIR with a Sunset Crossroads Project— Supplemental CEQA Memorandum prepared by Urban Crossroads, Inc. dated October 959
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23, 2025 (“Initial Supplemental CEQA Memorandum”) to address revisions to the Project described therein; and
WHEREAS, in accordance with Government Code Sections 65353 and 65855, at the November 5, 2025 regular meeting, the Planning Commission considered any new information received on the Project and voted 3 in support and 2 opposed to not re-open the public hearing, in accordance with the City of Banning’s Manual of Procedural Guidelines, Section 7.3(e), before continuing its deliberation and considering the entirety of the record for the Project; and
WHEREAS, at the November 5, 2025 regular meeting, the Planning Commission by a vote of 3 in support and 2 opposed as to the Project and 5 in support and none opposed as to the MSJC Site density transfer, instructed staff to prepare resolutions making findings supporting a denial recommendation to the City Council of the projects and rejection of the certification of the FEIR and continued the matters to November 17, 2025; and
WHEREAS, at a November 17, 2025 special meeting, the Planning Commission voted 3 in support and 2 opposed to adopt Resolution No. 2025-15 recommending the City Council deny Project applications and rejecting the certification of the FEIR, and voted 5 in support and none opposed to adopt Resolution No. 2025-16 recommending the City Council deny applications with respect to the MSJC Site entitlements, each including related findings, and
WHEREAS, a public notice for the January 28, 2026, City Council special meeting was published in accordance with State law and the Banning Municipal Code, and written notice was mailed to property owners within 300 feet of the Project site; and WHEREAS, at the January 28, 2026, special meeting, the City Council held a public hearing, commenced deliberation and voted 5-0 to continue deliberation of the matter at a special meeting on February 26, 2026; and
WHEREAS, at the February 26, 2026, special meeting, the City Council voted unanimously 5-0 to continue the item to a regular meeting date of March 10, 2026; and WHEREAS, the City further supplemented the FEIR with a Sunset Crossroads Project—Modified Project V2.1 Trip Generation Assessment prepared by Urban Crossroads, Inc. dated February 20, 2026 (collectively with the Initial Supplemental CEQA Memorandum, the “Supplemental CEQA Memoranda”) to address further reductions in Project industrial square footage and related traffic impacts; and WHEREAS, all the requirements of CEQA and the State CEQA Guidelines have been satisfied by the City in the FEIR as supplemented by the Supplemental CEQA Memoranda, which are sufficiently detailed so that all of the potentially significant environmental effects of the Project have been adequately evaluated; and WHEREAS, the modifications the Project identified in the Supplemental CEQA Memoranda and the Development Agreement do not increase the environmental impacts of the Project and do not meet any of the criteria set forth in Section 15088.5 of the State CEQA Guidelines requiring recirculation and therefore the FEIR does not need to be recirculated prior to its certification; and
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WHEREAS, the Project reduces environmental impacts by incorporating the reduction in industrial uses generally as contemplated by Alternative 4, the Reduced Industrial Alternative, which was identified as the Environmentally Superior Alternative in the FEIR, including by (1) eliminating the extension of Lincoln Street over the Smith Creek drainage, buildout of Highland Home Road north of Sun Lakes Boulevard and the related fire road access and (2) eliminating Industrial buildings in Planning Areas 2, 3, 7, 8 and 9 and all cold-storage uses, thereby reducing overall Industrial square footage to a maximum of 4,749,000 square feet, which is an even greater reduction in square footage and elimination of more buildings than considered in Alternative 4. The Project also modifies and reduces impacts to the Commercial land uses by removing construction of the truck fueling operation, modifying the mix of commercial uses, and reducing the maximum commercial square footage to approximately 223,753 square feet, including up to 200,000 square feet discount club use, plus 125 hotel rooms; and WHEREAS, the City, as “Lead Agency” under the California Environmental Quality Act (“CEQA”) and the CEQA Guidelines, concurrently with adoption of this Resolution, certified the FEIR as supplemented by the Supplemental CEQA Memoranda and adopted Findings and Statement of Overriding Consideration and a Mitigation Monitoring and Reporting Program and determined that the FEIR as so supplemented sufficiently analyzes both the feasible Mitigation Measures necessary to avoid or substantially lessen the Project's potential environmental impacts and a range of feasible alternatives capable of eliminating or reducing these effects while feasibly attaining most of the basic objectives of the Project in accordance with CEQA and the State CEQA Guidelines, and has determined that the General Plan Amendment and Specific Plan have been fully analyzed per CEQA under the FEIR as so supplemented and all other legal prerequisites to the adoption of this Resolution have occurred; and
WHEREAS, all of the findings and conclusions made by the City Council pursuant to this Resolution and in the accompanying staff report, are based on the facts, analysis and conclusions in the FEIR as supplemented by the Supplemental CEQA Memoranda, all of which are incorporated herein by this reference, and the oral and written evidence presented to it as a whole, and not based solely on the information provided in this Resolution; and
WHEREAS, environmental impacts which the City finds are less than significant and do not require mitigation are described in the FEIR and Supplemental CEQA Memoranda; and
WHEREAS, environmental impacts that are potentially significant but which the City finds can be mitigated to a level of less than significant through the imposition of feasible Mitigation Measures are identified in the FEIR and the Supplemental CEQA Memoranda; and
WHEREAS, certain environmental impacts that are potentially significant and the City finds cannot be fully mitigated to a level of less than significant despite the imposition of all feasible Mitigation Measures are identified in the FEIR and the Supplemental CEQA Memoranda; and
WHEREAS, alternatives to the Project that might eliminate or reduce significant environmental impacts are described in the FEIR; and
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WHEREAS, prior to taking action, the City Council has heard, been presented with, reviewed and considered all of the information and data in the administrative record, including the FEIR, the Findings and Statement of Overriding Considerations, the Mitigation Monitoring and Reporting Program, the Supplemental CEQA Memoranda, and all oral and written evidence presented to it during all meetings and hearings; and WHEREAS, the FEIR, the Supplemental CEQA Memoranda, the Findings and Statement of Overriding Considerations and the Mitigation Monitoring and Reporting Program reflect the independent judgment of the City Council and are deemed adequate for purposes of making decisions on the merits of the Project; and WHEREAS, no comments made in the public hearings conducted by the City or any additional information submitted to the City following publication of the FEIR have produced substantial new information requiring recirculation or additional environmental review under State CEQA Guidelines section 15088.5 and do not change the findings and conclusions in the Final EIR, the Supplemental CEQA Memoranda, the Findings or the Statement of Overriding Considerations; and
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, the City Council of the City of Banning does hereby resolve, determine, find and order as follows:

SECTION 1. RECITALS.

The preceding Recitals are true and correct and made a part of this Resolution.

SECTION 2. ENVIRONMENTAL DETERMINATION.

A. Pursuant to the California Environmental Quality Act (CEQA) (Cal. Pub. Res. Code § 21000 et seq.), the State Guidelines (14 Cal. Code Regs. § 15000 et seq.), City Staff prepared an Environmental Impact Report evaluating the potential environmental effects of the Sunset Crossroads development project, and a programmatic analysis of the proposed MSJC entitlements.

B. Thereafter, City Staff provided public notice of completion of a DEIR and establishing the 45-day public review and comment period as required by law. The public comment period began on December 15, 2023, and expired on January 30, 2024. Copies of the documents are available for public review and inspection at City Hall, 99 E. Ramsey Street, Banning, California 92220, the Banning Public Library, located at 21 West Nicolet Street, Banning, California 92220, and the City of Banning website. The City received 54 comment letters during the public review period.

C. The City Council has reviewed the Final EIR, inclusive of the Draft EIR, and the Supplemental CEQA Memoranda, which are on file with the Planning Department and incorporated herein by this reference, and all comments received regarding the FEIR.

In light of the whole record, the City Council determines and finds that: (1) the FEIR as supplemented by the Supplemental CEQA Memoranda was prepared in compliance with CEQA; (2) where the Final EIR as supplemented by the Supplemental CEQA Memoranda determines that impacts cannot be mitigated to less than significant for the Project, the City Council has carefully considered and balanced the benefits of the Project against its unavoidable environmental risk and determined 962
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that the benefits outweigh the unavoidable adverse environmental effects and that the adverse environmental effects may be considered acceptable as further set forth in the Statement of Overriding Considerations, (3) except as set forth in the FEIR, Supplemental CEQA Memoranda and the Findings and Statement of Overriding Considerations, with the incorporation of mitigation measures, there is no substantial evidence that the Sunset Crossroads Specific Plan and MSJC density transfer entitlements will have a significant effect on the environment; and (3) the FEIR reflects the independent judgement and analysis of the City Council.

D. Based on the findings set forth in this Resolution and the whole of the administrative record in this matter, the City Council CERTIFIES the Sunset Crossroads FEIR as supplemented by the Supplemental CEQA Memoranda, and adopts the related CEQA Findings, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program for the Project, which are hereby incorporated into this Resolution.

SECTION 3. MULTIPLE SPECIES HABITAT CONSERVATION PLAN (MSHCP):

The Sunset Crossroads Project site and the MSJC Site are located outside of MSHCP criteria cell areas and plan compliance is provided through payment of the MSHCP Mitigation Fee at the time of building permit issuance.

SECTION 4. CERTIFICATION
The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book or original resolutions.

PASSED, APPROVED AND ADOPTED this 10th day of March, 2026.

Richard Royce, Mayor
City of Banning
ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning

APPROVED AS TO FORM
John Pinkney, City Attorney
SBEMP
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CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk for the City of Banning City Council, do hereby certify that the foregoing Resolution No. 2026-28, was duly adopted by the City Council of the City of Banning, California, at a special meeting thereof held on the 10th day of March, 2026, by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sandra Calderon, Deputy City Clerk
City of Banning
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RESOLUTION 2026-29

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING,

CA, APPROVING THE SUNSET CROSSROADS GENERAL PLAN
AMENDMENT NO. 20-2501 AND SPECIFIC PLAN NO. 20-2002 FOR THE

DEVELOPMENT OF INDUSTRIAL AND COMMERCIAL USES ON A
533.8-ACRE PROJECT SITE LOCATED SOUTH OF I-10 AND THE UNION PACIFIC RAILROAD, AND WEST OF SUNSET AVENUE (ASSESSOR’S PARCEL NUMBERS (APNS): 537-110-003 THROUGH -005, 537-110-011 THROUGH -014, 537-120-013, 537-120-025, AND 537-120-028 THROUGH -036), INCLUDING 253.7 ACRES LOCATED IN UNINCORPORATED
RIVERSIDE COUNTY AND THE CITY’S SOUTHERLY SPHERE OF
INFLUENCE.

WHEREAS, NP Banning Industrial, LLC has filed an application for Specific Plan 20-2002, General Plan Amendment (GPA) 20-2501, Zone Change (ZC) 20-3502, Tentative Parcel Map (TPM) 38118, and a Development Agreement with the City of Banning (collectively, the "Project"), for the development of industrial and commercial uses on approximately 533.8-acres of real property located in the City of Banning and the County of Riverside south of I-10 and the Union Pacific Railroad, and west of Sunset Avenue with 253.7 acres of this property located in unincorporated Riverside County in the City’s southerly sphere of influence. The property is comprised of assessor’s parcel numbers (APNS): 537-110-003 through -005, 537-110-011 through -014, 537-120-013, 537-120-025, and 537-120-028 through -036 and more specifically described on Exhibit A attached hereto and incorporated herein by this reference (“Project Site”); and WHEREAS, concurrently with consideration of the Project, the City is separately and independently considering General Plan Amendment (GPA) 22-2502, and Zone Change (ZC) 22-3502, to amend the existing land use designation on twelve parcels of land that are not part of the Project Site from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), and amending the Zoning District classification from Public Facilities – School (PF-S) to Very High Density Residential (VHDR) (collectively the “MSJC Site Entitlements”), for 40.9 acres of a 49.2-acre site located at the southeast corner of Westward and Sunset Avenues (APNs: 537-140-004, 537-140-006 through - 012, 537-150-001, 537-150-003 and -004, 537-150-008, and 537-140-001 through -003 (collectively the “MSJC Site”) to ensure that approval of the Project will not result in a net loss of residential housing capacity; and
WHEREAS, pursuant to Section 17.64.060 of the Banning Municipal Code, the City Council has the authority to review and approve or conditionally approve the subject applications GPA 20-2501 and the related CEQA documents (SCH# 2021020011); and WHEREAS, pursuant to Article 8 of Chapter 3 of Division 1 of Title 7 of the California Government Code (“Specific Plan Statute”) and Section 17.94.050 of the 965
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Banning Municipal Code, the City Council has the authority to review and approve or conditionally approve the subject application SP 20-2002; and WHEREAS, pursuant to the California Environmental Quality Act (CEQA) and State CEQA Guidelines Sections 15064(f)(1) and 15378, the proposal constitutes a project as defined by CEQA and Community Development Department staff has determined that the Project is likely to have a significant effect on the environment; and WHEREAS, based upon the complexity and magnitude of the proposed project, staff determined that an Environmental Impact Report should be prepared for the Project, and an Initial Study was not necessary. A Notice of Preparation (NOP) was subsequently completed and distributed to the State Clearinghouse, as well as agencies and organizations that may provide comments on the Project’s potential impact(s) on the environment; and
WHEREAS, the State of California Clearinghouse issued a project number (SCH No. 2021020011) for an EIR evaluating the Project subject to City Council approval of the proposed MSJC Site Entitlements to accommodate State law required transfer of residential density from the Project site. The NOP 30-day public comment period extended from February 1 to March 3, 2021. An electronic copy of the NOP was made available on the City’s website. Comments received during the public review of the NOP were utilized to assist in identifying potential environmental impacts; and WHEREAS, due to COVID-19 restrictions, the Public Scoping meeting was held virtually on February 18, 2021, via Zoom. Notice of the Public Scoping Meeting was published in the Banning Record Gazette on February 5, 2021, providing the appropriate instructions for public participation in the Scoping Meeting. The Public Scoping Meeting included a presentation providing a summary of the Project, required actions, and the environmental review process. No public comments were received during the Scoping Meeting; and
WHEREAS, the Project includes a General Plan Amendment and a Specific Plan for the Project; therefore, Native American consultation pursuant to both SB 18 and Assembly Bill 52 (AB 52) was conducted. On November 30, 2020, the City reached out to 31 Native American contacts to formally invite participation in tribal consultation pursuant to AB 52 and SB 18 required for the Project. The City received responses from the Morongo Band of Mission Indians (MBMI), the Soboba Band of Luiseño Indians (SBLI), and the Agua Caliente Band of Cahuilla Indians (ACBCI) requesting formal consultation with the City regarding the Project with all correspondence received indicated that their respective tribal groups did not have any responses or that no specific archival information at the Project Site indicated that it may be a sacred site or other site of Native American traditional cultural value.; and
WHEREAS, the City provided a separate consultation invitation to these same 31 Native American contacts on August 25, 2022, specifically identifying the entitlement 966
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actions related to the MSJC Site. In this 2022 consultation, the City stated the MSJC Site Entitlements proposed only changes to the City’s land use and zoning maps, and that no construction or physical alterations were proposed or would be authorized under the MSJC Site Entitlements. The MBMI acknowledged the City’s actions and noted the MSJC Site is located within the ancestral territory and traditional use area of the Cahuilla and Serrano people of the MBMI and that any future construction or alterations to the MSJC Site would be of interest to the MBMI. The San Manuel Band of Mission Indians (SMBMI) stated the MSJC Site is outside of Serrano ancestral territory and, as such, SMBMI would not request consulting party status with the City; and
WHEREAS, a Notice of Availability (NOA) of the Draft EIR was provided to, responsible and trustee agencies, as well as the organizations, and persons who have previously requested notification. The NOA was distributed via priority mail with confirmed receipt. The NOA identified the State mandated 45-day public review period extending from December 15, 2023 to January 30, 2024, and included a weblink to the City’s public noticing page providing further access to the Draft EIR, project material, and related technical appendices. Emails advising of the availability of the Draft EIR were sent by the City on December 15, 2023 to those parties requesting electronic notification. These emails provided the same weblink leading to the Draft EIR; and WHEREAS, during the public review and comment period, the City received 54 letters from Resource Agencies, Trustee Agencies, and other interested parties. The City prepared a response to each comment letter received and prepared a Final Environmental Impact Report for the Project (the DEIR and Final EIR, collectively, “FEIR”); and
WHEREAS, in accordance with the disclosure requirements of CEQA Guidelines Section 15072(g)(5), the Project site is not listed as a hazardous property as designated under Section 65962.5 of the Government Code; and
WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on August 15, 2025, the City provided public notice by advertisement in the Record Gazette newspaper of a public hearing at a September 10, 2025 Planning Commission special meeting convened to consider the Project. The public hearing notice was also mailed to the owners of the subject properties within 300-feet of the Project boundary. In accordance with Government Code Sections 65353 and 65855, at the September 10, 2025 special meeting the Planning Commission held a public hearing at which interested persons had an opportunity to testify in support of, or opposition to the Project and at which time the Planning Commission considered the entirety of the Project.

At the conclusion of the hearing, the Planning Commission voted 2 in support and 3 opposed to adopt the draft resolution recommending approval, resulting in a failed motion; and
WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on October 10, 2025, the City provided notice by advertisement in the Record 967
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Gazette newspaper of continuation of the September 10, 2025 Planning Commission special meeting to the regular meeting of the Planning Commission on November 5, 2025 to continue deliberations and make recommendations to the City Council regarding the Project entitlements, including the FEIR. The public hearing notice was also mailed to the owners of the subject properties within 300-feet of the Project boundary; and WHEREAS, the City supplemented the FEIR with a Sunset Crossroads Project— Supplemental CEQA Memorandum prepared by Urban Crossroads, Inc. dated October 23, 2025 (“Initial Supplemental CEQA Memorandum”) to address revisions to the Project described therein; and
WHEREAS, in accordance with Government Code Sections 65353 and 65855, at the November 5, 2025 regular meeting, the Planning Commission considered any new information received on the Project and voted 3 in support and 2 opposed to not re-open the public hearing, in accordance with the City of Banning’s Manual of Procedural Guidelines, Section 7.3(e), before continuing its deliberation and considering the entirety of the record for the Project; and
WHEREAS, at the November 5, 2025 regular meeting, the Planning Commission by a vote of 3 in support and 2 opposed as to the Project and 5 in support and none opposed as to the MSJC Site Entitlements, instructed staff to prepare resolutions making findings supporting a recommendation of denial to the City Council of the Project and the MSJC Site Entitlements and rejection of the certification of the FEIR and continued the matters to a special meeting on November 17, 2025; and
WHEREAS, at a November 17, 2025 special meeting, the Planning Commission voted 3 in support and 2 opposed to adopt Resolution No. 2025-15 recommending the City Council deny Project applications and rejecting the certification of the FEIR, and voted 5 in support and none opposed to adopt Resolution No. 2025-16 recommending the City Council deny applications with respect to the MSJC Site Entitlements, each including related findings, and
WHEREAS, a public notice for the January 28, 2026, City Council special meeting was published in accordance with State law and the Banning Municipal Code, and written notice was mailed to property owners within 300 feet of the Project site; and WHEREAS, at the January 28, 2026 special meeting, the City Council held a public hearing, commenced deliberation and voted 5-0 to continue deliberation of the matter at a special meeting on February 26, 2026; and
WHEREAS, at the February 26, 2026, special meeting, the City Council voted unanimously 5-0 to continue the item to a regular meeting date of March 10, 2026; and WHEREAS, the City further supplemented the FEIR with a Sunset Crossroads Project—Modified Project V2.1 Trip Generation Assessment prepared by Urban 968
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Crossroads, Inc. dated February 20, 2026 (collectively with the Initial Supplemental CEQA Memorandum, the “Supplemental CEQA Memoranda”) to address further reductions in Project industrial square footage and related traffic impacts; and WHEREAS, the City Council has reviewed the staff report, Planning Commission recommendation, environmental documentation, proposed General Plan Amendment and zone change, Sunset Crossroads Specific Plan, Development Agreement, Parcel Map and supporting materials, and public testimony and finds the Project in conformance with the requirements of the Banning Municipal Code and the City’s General Plan; and WHEREAS, adoption of General Plan Amendment 20-2501 and Specific Plan 20- 2002 would result in designation of the Project site in the City of Banning Official General Plan Map as “Specific Plan - Sunset Crossroads” and would provide General Commercial (GC), Industrial (I), Open Space – Parks (OS-P), and Open Space – Resources (OS-R) land uses as depicted on Figure 2.1 of the Specific Plan. Approximately 65.6 acres of the Project site would be retained as Open Space - Resources (OS-R) and/or Open Space – Parks (OS-P) use, including a five-acre passive park; and WHEREAS, the Project reduces environmental impacts by incorporating the reduction in industrial uses generally as contemplated by Alternative 4, the Reduced Industrial Alternative, which was identified as the Environmentally Superior Alternative in the FEIR, including by (1) eliminating the extension of Lincoln Street over the Smith Creek drainage, buildout of Highland Home Road north of Sun Lakes Boulevard and the related fire road access and (2) eliminating Industrial buildings in Planning Areas 2, 3, 7, 8 and 9 and all cold-storage uses, thereby reducing overall Industrial square footage to a maximum of 4,749,000 square feet, which is an even greater reduction in square footage and elimination of more buildings than considered in Alternative 4. The Project also modifies and reduces impacts to the Commercial land uses by removing construction of the truck fueling operation, modifying the mix of commercial uses, and reducing the maximum commercial square footage to 223,753 square feet, including up to 200,000 square feet of discount club use, plus a 125 room hotel; and WHEREAS, the City, as “Lead Agency” under the California Environmental Quality Act (“CEQA”) and the CEQA Guidelines, concurrently with adoption of this Resolution pursuant to adoption of Resolution 2026-28, certified the FEIR as supplemented by the Supplemental CEQA Memoranda and adopted Findings and Statement of Overriding Consideration and a Mitigation Monitoring and Reporting Program and determined that the FEIR as so supplemented sufficiently analyzes both the feasible Mitigation Measures necessary to avoid or substantially lessen the Project's potential environmental impacts and a range of feasible alternatives capable of eliminating or reducing these effects while feasibly attaining most of the basic objectives of the Project in accordance with CEQA and the State CEQA Guidelines, and has determined that the General Plan Amendment and Specific Plan have been fully analyzed per CEQA under the FEIR as so supplemented and all other legal prerequisites to the adoption of this Resolution have occurred; and
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WHEREAS, all of the findings and conclusions made by the City Council pursuant to this Resolution and in the accompanying staff report, are based on the facts, analysis and conclusions in the FEIR as supplemented by the Supplemental CEQA Memoranda, all of which are incorporated herein by this reference, and the oral and written evidence presented to it as a whole, and not based solely on the information provided in this Resolution; and
WHEREAS, the City concurrently with adoption of this Resolution is adopting Ordinance 1618 approving Zone Change Case No. 20-2502, and Ordinance 1620 approving a Development Agreement for the Project (“Development Agreement”) and it is the intent of the City that the General Plan Amendment and Specific Plan become effective concurrently with the effective date of the Development Agreement Ordinance and Zone Change;
NOW, THEREFORE, the City Council of the City of Banning does hereby resolve, determine, find, and order as follows:

SECTION 1. RECITALS:

The preceding Recitals are true and correct and made a part of this Resolution.

SECTION 2. FINDINGS FOR GENERAL PLAN AMENDMENT:

Section 17.64.070 of the Banning Municipal Code (BMC) requires that a General Plan Amendment may be adopted only if the four findings specified there are made. The Planning Commission did not recommend that the City Council could find and determine that the General Plan Amendment be approved. As it is authorized to do pursuant to Section 17.64.060 of the Banning Municipal Code, the City Council nonetheless finds and determines that General Plan Amendment, Case No. GPA 20-2501 can be approved because the following required findings can all be met in the affirmative:

Finding A: That the proposed amendment is internally consistent with the General Plan.

Findings of Fact: California Government Code Section 65302 requires that a General Plan consist of seven (7) State-mandated elements, including Land Use, Circulation, Housing, Conservation, Open Space, Noise, and Safety. The Land Use Element is one of the seven State-mandated elements of the General Plan and includes the Land Use Map for the City of Banning. The General Plan Land Use map and the Zoning map are 100% consistent with one another and, therefore, the same map doubles to serve both purposes. The Project will not create an incompatible land use as discussed in Table

4.11.A: Project Consistency Analysis with the City of Banning General Plan, found in the Draft EIR. This Table evaluates how the Project is internally consistent with each element of the General Plan. The Project is also consistent for the following reasons with the goals and policies of the General Plan:
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• Land Use Residential Goal 1 and Residential Policy 2 regarding compatibility with adjacent residential neighborhoods because the FEIR, as supplemented by the Supplemental CEQA Memoranda, analyzed and did not identify any significant localized air quality impact, health risk, noise impacts, or greenhouse gases from Project operations or Project truck and auto traffic along Sunset Avenue or other streets adjoining residential use and the FEIR found no significant visual impacts.

The buildings are spread over 530 acres and the FEIR’s visual analyses of the impacts of the building sizes found no significant impact because of their height or mass. The additional buffering provided by the proposed modified Project described in the Supplemental CEQA Memoranda further lessens visual impacts. • Land Use Element Policy 1 requiring the City to maintain a land use map which assures a balance of residential, commercial, industrial open space and public lands and Land Use Element Commercial and Industrial Policy 7 requiring the land use map to contain sufficient land for industrial uses including warehousing and distribution while carefully considering compatibility with adjacent lands.

Since adoption of the 2006 General Plan, residential development has outpaced commercial and industrial development resulting in a jobs-housing ratio that is skewed toward residential development, creating a current need for more industrial and commercial development that the Project addresses while considering compatibility with adjacent lands and reducing impacts through adoption of the Mitigation Monitoring and Reporting Plan and project design features adopted as part of the Project;
• Land Use Element Industrial Goal requiring a balanced mix of non-polluting industrial land uses which provide local jobs for the City’s residents because the industrial uses proposed are not manufacturing or polluting industries, non-mobile impacts are not a significant source of pollution and the Project would provide a significant number of local jobs for City residents;
• Land Use Element Commercial and Industrial Policy 8, because the Project’s industrial uses are located on major roadways with good access to Interstate 10 minimizing impacts from truck traffic, Sunset Avenue, which provides a direct route to Interstate 10 was designated as an arterial/secondary highway in the 2013 General Plan Circulation Element and the General Plan indicates that arterial/secondary highways are appropriate for truck traffic. The design and width of Sunset Avenue provides more than sufficient capacity for Project vehicles and City projected traffic increases. The Project also incorporates appropriate traffic planning including a truck route management plan to minimize impacts on adjacent residential neighborhoods and limit truck traffic to streets allowing such use under the General Plan
• Circulation Element Policy 6 in that the LOS D or better is maintained at all studied local intersections with the Project. The Project includes requirements that the developer dedicate land for right of way, widen roadways, provide other infrastructure and pay transportation fees.
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• The General Plan’s City Wide Goals, Policies, and Programs and Policy 1, Economic Development Element Program 1.A which require the City to report on and maintain a balance of residential, commercial and industrial lands, by authorizing additional industrial and commercial land use on a large acreage within the City to balance the large scale residential buildout being undertaken elsewhere in the City,
• Economic Element Policy 2 requiring the City to recruit new businesses, particularly those that generate and broaden employment opportunities, increase discretionary incomes, and contribute to City General Fund revenues by providing the opportunity for new revenue and job creating businesses to operate in the City providing approximately 3,500 construction jobs and over 4,000 permanent local jobs and ensuring land area is made available for uses that generate revenue to the City through tax dollars and other means to support the fiscal needs of the City.

Finding B: That the proposed amendment would not be detrimental to the public interest, health, safety, convenience, or welfare of the City.

Findings of Fact: The proposed General Plan Land Use Map Amendment and Zone Change will allow for the orderly development of the Project, strengthening City economic development and job opportunities, while not damaging the public interest, health, safety, convenience, or welfare of the City. As set forth in the FEIR certified by the City Council, as supplemented by the Supplemental CEQA Memoranda, the related CEQA Findings, Statement of Overriding Considerations, and the Mitigation Monitoring and Reporting Program adopted by the City Council in Resolution 2026-28:
• the adverse significant environmental effects of the Project would be reduced to the extent feasible by incorporation of project design features, required regulatory measures and adopting the mitigation measures identified in the Mitigation Monitoring and Reporting Program;
• construction noise impacts can be mitigated to less than significant with the consent of the City;
• impacts that were found not to be mitigated to less than significant are comprised of regional impacts related to air quality and greenhouse gas emissions and not local air quality and health impacts, which are found to be less than significant; and
• all significant and unavoidable impacts of the Project are outweighed as set forth in the Statement of Overriding Considerations by the social, economic and other benefits of the Project including the extensive public benefits to the City such as

12.6 acres of public parks, $5.1 million for the construction of Sun Lakes Boulevard, construction of general plan roadways at no cost to the City, creation of 3,500 construction jobs and over 4,000 permanent local jobs that will be available for Banning residents, land and $16 million toward the potential future development of a fire station, $1 million annually for a special facilities tax, a $7.2 million public benefit fee, $10 million toward the Banning Electric substation cost, 972
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$750,000 to be used for Banning downtown beautification or small business assistance for small businesses located in Banning, and 13 acres for public facilities as set forth in the Development Agreement, and render those potential significant impacts acceptable.

Finding C: That the proposed amendment would maintain the appropriate balance of land uses within the City.

Findings of Fact: Table III-3, of the Community Development Chapter of the City’s General Plan details that 252.1 acres of vacant land is designated as General Commercial, and 274.1 acres of vacant land is designated as Industrial. The Project will continue to retain vacant General Commercial land by preserving 47.9 acres for commercial uses, and will increase the amount of vacant Industrial land by 392 acres, which provides a statistically significant positive change in the balance of vacant nonresidential land uses within the City. A transfer of the residential density from the Project site to the MSJC Site to comply with State law and General Plan Housing Element goals and programs will transfer that density within the City, resulting in no net loss of residential density, and will be consistent with General Plan Housing Element goals and programs which require the City to create very high density zoning with a range of 24-30 du/acre and to facilitate RHNA increases in multifamily, high density residential sites (p. 67, and Program 4 at pp. 87-88) for the City. As such, the balance of land use designations will not be negatively impacted by the Project.

Finding D: The amendment is physically suitable for the surrounding environment; including, but not limited to site access, the provision of utilities, and compatibility with adjoining land uses, including the absence of any physical constraints, for the requested land use designation(s) and the anticipated land use development(s).

Findings of Fact: The Project site is physically suitable for the surrounding environment.

The Project site is undeveloped, has appropriate access to major roadways, including Sunset Avenue which will be expanded to full City design standards providing direct access to Interstate 10 and conservation as open space of drainages and adjoining land throughout the Project site. The Project underwent geotechnical, hydrology, and environmental analyses that confirmed suitability for the scale and type of development.

The proposed Specific Plan establishes design guidelines and standards, incorporating landscaping, architectural standards, buffers, and traffic planning and providing transitions in use, intensity and design to surrounding lands to ensure compatibility with adjoining land uses. A Plan of Services and a Water Supply Assessment prepared for the Project indicates that site access and infrastructure for utility conveyances are available and provisions for service have been planned. The Project will implement Policy 8 of the Community Development Chapter of the General Plan, which requires that the City assure the provision of adequate utilities, infrastructure, and other capital facilities” (General Plan, Page III-44). The Project will implement Program 4.B, which “requires the City make regular assessments of infrastructure capacity and evaluate the necessary expansion and improvements needed to carry out responsible growth management” (General Plan, Page VI-19).
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SECTION 3. FINDINGS FOR SPECIFIC PLAN:

Section 17.96.060 of the Banning Municipal Code requires that a Specific Plan may be adopted only if the four findings specified there are made. The Planning Commission did not recommend that the City Council could find and determine that the Specific Plan be adopted. As it is authorized to do pursuant to Section 17.96.050 of the Banning Municipal Code the City Council nonetheless finds and determines that General Plan Amendment, Case No. GPA 20-2501, and the Specific Plan, Case No. 20-2002, can be approved because the following required findings can all be met in the affirmative:

Finding A: The proposed plan is consistent with the General Plan; Finding of Fact: The Specific Plan is consistent with the proposed General Plan amendment. It is also consistent with the City’s General Plan by allowing additional economic growth opportunities, while balancing land use, circulation, and economic development with the corresponding general plan amendment and zoning amendment to establish the use at the Project site. The Specific Plan supports development and job creation as outlined in the General Plan goals and policies and aligns with policies related to walkability, infrastructure upgrades, and community amenities. The transfer of residential capacity to an off-site location adjacent to a higher-education campus is required by State law and consistent with General Plan Housing Element goals and Programs 4 which require the City to create very high density zoning with a range of 24- 30 du/acre.

Finding B: The proposed plan would not be detrimental to the environment, or to the public interest, health, safety, convenience, or welfare of the City; Finding of Fact: The Environmental Impact Report (EIR) prepared for the Project identifies potentially significant impacts but includes mitigation measures to reduce impacts to less than significant where feasible. The only impacts that cannot be mitigated to less than significant are regional air quality impacts, greenhouse gas emissions, and construction noise impacts. Local air quality and health impacts are less than significant, and construction noise impacts can be mitigated to less than significant with the consent of the City. As for the three impacts that remain significant , the Project provides extensive public benefits to the City which include 12.6 acres of public parks, $5.1 million for the construction of Sun Lakes Boulevard, construct general plan roadways at no cost to the City, 3500 construction jobs and over 4,000 permanent local jobs for Banning residents, land and $16 million toward the potential future development of a fire station, $1 million annually for a special facilities tax, a $7.2 million public benefit fee, $10 million toward the Banning Electric substation cost, $750,000 to be used for Banning downtown beautification or small business assistance for small businesses located in Banning, and 13 acres for public facilities and other long-term economic and community benefits set forth in the Statement of Overriding Considerations. Therefore, the City determined that, with mitigation and overriding considerations, the plan will not be detrimental to the 974
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environment or public interest, health, safety, or welfare. Additionally, consistent with state law requirements, the proposed Specific Plan describes a comprehensive plan for land use, circulation and infrastructure to ensure the plan accommodates necessary utilities and services to protect the public interest, health safety, convenience and welfare.

Finding C: The subject property is physically suitable for the requested land use designation(s) and the anticipated development(s);
Finding of Fact: The Project Site is physically suitable for the intended land uses. It is undeveloped, has appropriate access to major roadways, including Sunset Avenue which will be expanded to full City design standards providing direct access to Interstate 10, and conservation as open space of drainages and adjoining land throughout the Project site.

The Project Site underwent geotechnical, hydrology, and environmental analyses that confirmed suitability for the scale and type of development. The proposed Specific Plan establishes design guidelines and standards, incorporating landscaping, architectural standards, buffers, and traffic planning, providing transitions in use intensity and design to surrounding lands to ensure compatibility and that the Project will be served by necessary infrastructure improvements (e.g., sewer, water, traffic).

Finding D: The proposed plan shall ensure development of desirable character which will be compatible with existing and proposed development in the surrounding neighborhood.

Finding of Fact: The Project design reflects a desirable and compatible character with adjacent uses which include residential, commercial, and institutional land uses. The proposed Project incorporates landscaping, architectural standards, and buffers. The EIR found no significant visual impacts. The buildings are spread over 530 acres, the EIR’s visual analyses of the impacts of the building sizes found no significant impact because of their height or mass. The proposed Project includes transitions in use intensity and design including additional buffering provided by the proposed modified Project to ensure compatibility. The Project also incorporates appropriate traffic planning including a truck route management plan to minimize impacts on adjacent residential neighborhoods and limit truck traffic to streets allowing such use under the General Plan. The Project includes transitions in use intensity and design to ensure compatibility.

SECTION 4. APPROVAL
The City Council Hereby Approves General Plan Amendment No. 20-2501 and directs the Community Development Director to amend the City of Banning Official General Plan Map as depicted on Exhibit B to this Resolution and incorporated herein by this reference to amend the land use designations for the Project Site from High Density Residential, Medium Density Residential, Low Density Residential, General Commercial and Open Space - Resource and Open Space - Parks to “Specific Plan – Sunset Crossroads” subject to termination of this approval as set forth in the Development Agreement if the First Installment 975
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of the Public Benefit Fee (each as defined in the Development Agreement) is not timely paid in accordance with the terms of Section 5.2.1 of said Development Agreement.

The City Council Hereby Approves Specific Plan 20-2002 attached to this Resolution as Exhibit C and incorporated herein by this reference as the same is amended by the terms of Section 3 inclusive of the Development Agreement approved by the City concurrently with approval of this Resolution pursuant to Ordinance 1620 subject to the terms and provisions of the Development Agreement. The Sunset Crossroads Specific Plan constitutes the zoning regulations for the Specific Plan area and will be established as a Specific Plan zoning district to be shown upon the City of Banning Official Zoning Map as set forth in Banning Municipal Code Section 17.96.080.

SECTION 5. CERTIFICATION
The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book or original resolutions.

SECTION 6. EFFECTIVENESS
This Resolution shall become effective upon the effective date of Ordinance 1620.

PASSED, APPROVED AND ADOPTED this 10th day of March, 2026.

Richard Royce, Mayor
City of Banning
ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning

APPROVED AS TO FORM
John Pinkney, City Attorney
SBEMP
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CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk for the City of Banning City Council, do hereby certify that the foregoing Resolution No. 2026-29, was duly adopted by the City Council of the City of Banning, California, at a special meeting thereof held on the 10th day of March, 2026, by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sandra Calderon, Deputy City Clerk
City of Banning
977
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EXHIBIT A
Legal Description of Project Site
PARCEL A:

PARCELS 1 THROUGH 4, INCLUSIVE OF MAPS AND LETTERED LOTS A THROUGH J, INCLUSIVE, OF PARCEL MAP NO. 25541, IN THE CITY OF BANNING, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ON FILE IN BOOK 166 PAGES 27 THROUGH 35,

INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA PARCEL B:

PARCELS 1 THROUGH 9 AND LETTERED LOTS "A" THROUGH "O", ALL INCLUSIVE OF PARCEL MAP 28971, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 198 PAGES 8 THROUGH 10 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM PARCELS 3 AND 7, THOSE PORTIONS CONVEYED TO THE CITY OF BANNING BY A DEED RECORDED JANUARY 15, 1998 AS INSTRUMENT NO. 015506 OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.

ALSO EXCEPTING THEREFROM PARCEL 3 ALL THAT PORTION CONVEYED TO THE CITY OF BANNING BY A DEED RECORDED MARCH 22, 2002 AS INSTRUMENT NO. 2002-146041.

PARCEL C:

PARCELS 1 AND 2 AND LETTERED LOTS A, B, AND C OF PARCEL MAP 13521, IN THE

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 83, PAGES 13 THROUGH 15, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM THOSE PORTIONS CONVEYED TO THE CITY OF BANNING, A MUNICIPAL CORPORATION, BY DEED RECORDED JANUARY 15, 1998, AS INSTRUMENT NO. 98-015506, OFFICIAL RECORDS.
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EXHIBIT B
Existing General Plan/Zoning Map
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EXHIBIT C
Specific Plan
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March 10, 2026

RESOLUTION NO. 2026-30

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING,

CA, APPROVING A PLAN OF SERVICE AND ANNEXATION REQUEST

AND REQUESTING THE RIVERSIDE LOCAL AGENCY FORMATION

COMMISSION TO FAVORABLY CONSIDER ANNEXATION OF THE

SUBJECT PROPERTY
WHEREAS, the affected territory is located on approximately 253.7 acres of land in the unincorporated area of the County of Riverside and is legally described on Exhibit A attached hereto and by this reference incorporated herein (the “Property”) is in the Sphere of Influence (as such term is defined in Govt. Code Section 56076) of the City of Beaumont (“City”) and is uninhabited; and
WHEREAS, the City Council of the City of Banning desires that the Riverside County Formation Commission (“LAFCO”) accept the Owner’s application for annexation of the Property into the City and upon completion thereof take proceedings required for the annexation of the Property pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, commencing with Section 56000 of the California Government Code; and
WHEREAS, the City Council of the City of Banning concurrently with the consideration of this Resolution has adopted Resolution No. 2026-28 certifying Final Environmental Impact Report SCH No. 2021020011, inclusive of the Draft EIR (“FEIR”), and the Supplemental CEQA Memorandum dated October 23, 2025 to address revisions to the Project and the Sunset Crossroads Project—Modified Project V2.1 Trip Generation Assessment dated February 20, 2026 to address further reductions in Project industrial square footage and related traffic impacts, each prepared by Urban Crossroads, Inc. (collectively, “Supplemental CEQA Memoranda”), which together consider the City’s General Plan Amendment and pre-zoning of the Property and the annexation of the Property into the City; has adopted environmental findings pursuant to the California Environmental Quality Act, a Statement of Overriding Considerations and a Mitigation Monitoring and Reporting Program; and has also adopted a General Plan Amendment, pre-zoning of the Property to Specific Plan, the Sunset Crossroads Specific Plan (“Specific Plan”), General Plan Amendment, Zone Change, a Development Agreement between the City of Banning and NP Banning Industrial LLC, and Tentative Parcel Map No. 38118 with respect to the Property and an adjoining 280.1 acres of land in the City also to be governed by the Specific Plan (“Project Entitlements”); and WHEREAS, upon application therefor by the owner of the Property and approval by LAFCO of the application, the City desires to annex the Property into the City of Banning consistent with this Resolution; and
WHEREAS, this proposal is consistent with the sphere of influence of the City of Banning and the policies of LAFCO including to ensure the establishment of an 981
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appropriate and logical municipal government structure for the distribution of efficient and appropriate public services, and does not affect prime agricultural land; and WHEREAS, the Property shares a common boundary and is contiguous (as defined by Govt. Code §56031(a)) with the existing boundary of the City to the north, west, and east of the Property; and
WHEREAS, the reasons for the proposed annexation are as follows:
(i) This annexation is in the public interest, in that the Property is in the sphere of influence of the City, is contiguous to land in the City on three sides, is part of a larger Specific Plan area that includes substantial land in the City and that there will be a community benefit resulting from the amendment:
(ii) It will provide for more efficient public service; (iii) It preserves open space within urban development patterns; and (iv) It is compatible with surrounding land uses and is consistent with the existing industrial character of the area; and
WHEREAS, it is desired to provide that the proposed annexation be subject to the following terms and conditions:

The annexation is subject to the provisions in the LAFCO approval.

NOW, THEREFORE, the City Council of the City of Banning does hereby resolve, determine, find, and order as follows:

SECTION 1. RECITALS:

The preceding Recitals are true and correct and made a part of this Resolution.

SECTION 2. FINDINGS FOR ANNEXATION:

Approve an Annexation based on the following findings included herein for the City Council to initiate the annexation of 253.7 acres of unincorporated property located within the City’s Sphere of Influence and which is intended to be incorporated as part of the Sunset Crossroads Specific Plan development project.

Finding A: That the annexation has been considered and analyzed in accordance with CEQA as part of the Sunset Crossroads Specific Plan EIR.

Finding of Fact: The annexation area has been evaluated and analyzed in accordance with CEQA. Changes and/or alterations have been required and incorporated in the EIR to avoid or substantially lessen the significant environmental effects as identified in the EIR within both the annexation and Project Area. Where significant project impacts cannot be mitigated below a level of insignificance, a Statement of Overriding Considerations provides that the economic, social, planning and other benefits of the Project outweigh the significant and unavoidable impacts that could not be mitigated 982
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below a level of significance. Consequently, the Statement of Overriding Considerations and adoption of the Findings of Fact is required.

Finding B: The proposed annexation is consistent with the Sunset Crossroads Specific Plan development project.

Finding of Fact: The 253.7 acres of unincorporated area is an integral component of the Sunset Crossroads Specific Plan development project in that the area proposed for annexation will change land uses from High Density Residential, Very Low Density Residential, Low Density Residential, and Open Space zoning districts to industrial land uses. Moreover, the 253.7 acres interconnects the vehicle circulation through the development project site and improves surrounding roadways with circulation improvements that will make access better for existing residential uses to the south, east and west of the private site. The annexed area combines seven Planning Areas that altogether represent nearly 50% percent of the Sunset Crossroads Specific Plan.

Finding C: Adequate public utilities, infrastructure and public services will be available upon annexation of the area.

Finding of Fact: The development of major utility facilities within the Sunset Crossroads Specific Plan area will follow the City’s technical requirements. Drainage, sewer, and Public Services Plans will be phased in line with each development phase planned for the project to facilitate the timely and cost effective extension of services within the project area. Both water and sewer service are currently provided by the City.

The Specific Plan is in conformance with the plans of local purveyors and structured to ensure that necessary roads, utilities, landscape elements, and other infrastructure facilities are installed when needed to accommodate the needs of the project as it builds out. Utility facilities, including power and other transmission towers, cellular communication towers will be sited to ensure minimal environmental impacts and land is proposed to be dedicated to accommodate City public services including an electrical substation, potable water reservoir, reverse osmosis facility and fire station.

SECTION 3. APPROVAL
The City Council hereby approves the Annexation request and requests the Riverside Local Agency Formation Commission to favorably consider Annexation of the subject property comprising approximately 253.7 acres of land in the unincorporated area of the County of Riverside as legally described in Exhibit A subject to the other Project Entitlements including the Development Agreement.
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SECTION 4. CERTIFICATION
The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book or original resolutions.

PASSED, APPROVED AND ADOPTED this 10th day of March, 2026.

Richard Royce, Mayor
City of Banning
ATTEST:

Sandra Calderon, Administrative City Clerk
City of Banning

APPROVED AS TO FORM
John Pinkney, City Attorney
SBEMP
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CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk for the City of Banning City Council, do hereby certify that the foregoing Resolution No. 2026-29, was duly adopted by the City Council of the City of Banning, California, at a special meeting thereof held on the 10th day of March, 2026, by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sandra Calderon, Deputy City Clerk
City of Banning
985
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EXHIBIT A
Legal Description of Property

LEGAL DESCRIPTION OF THE PROPERTY PROPOSED TO BE ANNEXED PARCEL B:

PARCELS 1 THROUGH 9 AND LETTERED LOTS "A" THROUGH "O", ALL INCLUSIVE OF PARCEL MAP 28971, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 198 PAGES 8 THROUGH 10 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM PARCELS 3 AND 7, THOSE PORTIONS CONVEYED TO THE CITY OF BANNING BY A DEED RECORDED JANUARY 15, 1998 AS INSTRUMENT NO. 015506 OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.

ALSO EXCEPTING THEREFROM PARCEL 3 ALL THAT PORTION CONVEYED TO THE CITY OF BANNING BY A DEED RECORDED MARCH 22, 2002 AS INSTRUMENT NO. 2002-146041.

PARCEL C:

PARCELS 1 AND 2 AND LETTERED LOTS A, B, AND C OF PARCEL MAP 13521, IN

THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 83, PAGES 13 THROUGH 15, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM THOSE PORTIONS CONVEYED TO THE CITY OF BANNING, A MUNICIPAL CORPORATION, BY DEED RECORDED JANUARY 15, 1998, AS INSTRUMENT NO. 98-015506, OFFICIAL RECORDS.
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RESOLUTION 2026-31

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING,

CA, APPROVING THE SUNSET CROSSROADS TENTATIVE PARCEL
MAP NO. 38118, FOR THE DEVELOPMENT OF INDUSTRIAL AND
COMMERCIAL USES ON A 533.8-ACRE PROJECT SITE LOCATED
SOUTH OF I-10 AND THE UNION PACIFIC RAILROAD, AND WEST OF SUNSET AVENUE (ASSESSOR’S PARCEL NUMBERS (APNS): 537-
110-003 THROUGH -005, 537-110-011 THROUGH -014, 537-120-013, 537-120-025, AND 537-120-028 THROUGH -036), INCLUDING 253.7

ACRES LOCATED IN UNINCORPORATED RIVERSIDE COUNTY AND
THE CITY’S SOUTHERLY SPHERE OF INFLUENCE
WHEREAS, an application for General Plan Amendment (GPA) 20-2501, Zone Change (ZC) 20-3502, Specific Plan 20-2002, Tentative Parcel Map (TPM) 38118, and a Development Agreement with the City of Banning (collectively, the "Project"), for the development of industrial and commercial uses on a 533.8-acre project site located south of I-10 and the Union Pacific Railroad, and west of Sunset Avenue (assessor’s parcel numbers (APNS): 537-110-003 through -005, 537-110-011 through -014, 537-120-013, 537-120-025, and 537-120-028 through -036), including 253.7 acres located in unincorporated Riverside County and the City’s southerly sphere of influence (“Project Site”), has been duly filed by NP Banning Industrial, LLC; and WHEREAS, concurrently with consideration of the Project, the City is considering certification of Final EIR SCH No. 2021020011, including a Draft EIR, and the Supplemental CEQA Memorandum dated October 23, 2025 to address revisions to the Project and the Sunset Crossroads Project—Modified Project V2.1 Trip Generation Assessment dated February 20, 2026 to address further reductions in Project industrial square footage and related traffic impacts, each prepared by Urban Crossroads, Inc. (“collectively the “Supplemental CEQA Memoranda”) prepared in accordance with State law considering the environmental effects of the Project, and of the concurrent adoption of a General Plan Amendment (GPA) 22-2502, and Zone Change (ZC) 22-3502, to amend the existing land use designation on twelve parcels of land that are not within the Project Site from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), and amending the Zoning District classification from Public Facilities – School (PF-S) to Very High Density Residential (VHDR), for 40.9 acres of a 49.2-acre site located at the southeast corner of Westward and Sunset Avenues (APNs: 537-140-004, 537-140- 006 through -012, 537-150-001, 537-150-003 and -004, 537-150-008, and 537-140-001 through -003 (collectively the “MSJC Site Entitlements”) to ensure that approval of the Project will not result in a net loss of residential housing capacity; and WHEREAS, pursuant to Section 16.14.050.A of the Banning Municipal Code, the City Council has the authority to review and approve or conditionally approve TPM 38118; and
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WHEREAS, in accordance with Government Code Sections 65353 and 65855, at the September 10, 2025 special meeting the Planning Commission held the duly noticed public hearing at which interested persons had an opportunity to testify in support of, or opposition to the Project and at which time the Planning Commission considered the entirety of the Project including TPM 38118. At the conclusion of the hearing, the Planning Commission voted 2 in support and 3 opposed to adopt the draft resolution recommending approval, resulting in a failed motion; and WHEREAS, in accordance with Government Code Sections 65353, 65854, 65090, and 65091, on October 10, 2025, the City provided notice by advertisement in the Record Gazette newspaper of continuation of the September 10, 2025 Planning Commission special meeting to the regular meeting of the Planning Commission on November 5, 2025 to continue deliberations and make recommendations to the City Council regarding the Project entitlements, including TPM 38118. The public hearing notice was also mailed to the owners of the subject properties within 300-feet of the Project boundary; and WHEREAS, in accordance with Government Code Sections 65353 and 65855, at the November 5, 2025 regular meeting, the Planning Commission considered any new information received on the Project and voted 3 in support and 2 opposed to not re-open the public hearing, in accordance with the City of Banning’s Manual of Procedural Guidelines, Section 7.3(e), before continuing its deliberation and considering the entirety of the record for the Project; and
WHEREAS, at the November 5, 2025 regular meeting, the Planning Commission by a vote of 3 in support and 2 opposed as to the Project and 5 in support and none opposed as to the MSJC Site Entitlements, instructed staff to prepare resolutions making findings supporting a recommendation of denial to the City Council of the Project and the MSJC Site Entitlements and rejection of the certification of the FEIR and continued the matters to November 17, 2025; and
WHEREAS, at a November 17, 2025 special meeting, the Planning Commission voted 3 in support and 2 opposed to adopt Resolution No. 2025-15 recommending the City Council deny Project applications and rejecting the certification of the FEIR, and voted 5 in support and none opposed to adopt Resolution No. 2025-16 recommending the City Council deny the MSJC Site Entitlements, each including related findings; and WHEREAS, a public notice for the January 28, 2026, City Council special meeting was published in accordance with State law and the Banning Municipal Code, and written notice was mailed to property owners within 300 feet of the Project Site; and WHEREAS, at the January 28, 2026 special meeting, the City Council held a public hearing, commenced deliberation of the Project and voted 5-0 to continue deliberation of the matter at a special meeting on February 26, 2026; and 988
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WHEREAS, at the February 26, 2026, special meeting, the City Council voted unanimously 5-0 to continue the item to a regular meeting date of March 10, 2026; and WHEREAS, the City Council has reviewed the staff report, Planning Commission recommendation, environmental documentation, proposed General Plan Amendment and Zone Change, Sunset Crossroads Specific Plan, Development Agreement, Parcel Map and supporting materials, and public testimony and finds the Project in conformance with the requirements of the Banning Municipal Code and the City’s General Plan; and WHEREAS, the City, as “Lead Agency” under the California Environmental Quality Act (“CEQA”) and the CEQA Guidelines, concurrently with adoption of this Resolution pursuant to adoption of Resolution 2026-28, certified the FEIR as supplemented by the Supplemental CEQA Memoranda and adopted Findings and Statement of Overriding Considerations and a Mitigation Monitoring and Reporting Program and determined that the FEIR as so supplemented sufficiently analyzes both the feasible Mitigation Measures necessary to avoid or substantially lessen the Project's potential environmental impacts and a range of feasible alternatives capable of eliminating or reducing these effects while feasibly attaining most of the basic objectives of the Project in accordance with CEQA and the State CEQA Guidelines, and has determined that the General Plan Amendment and Specific Plan have been fully analyzed per CEQA under the FEIR as so supplemented and all other legal prerequisites to the adoption of this Resolution have occurred; and
WHEREAS, all of the findings and conclusions made by the City Council pursuant to this Resolution and in the accompanying staff report, are based on the facts, analysis and conclusions in the FEIR as supplemented by the Supplemental CEQA Memoranda, all of which are incorporated herein by this reference, and the oral and written evidence presented to it as a whole, and not based solely on the information provided in this Resolution; and
WHEREAS, the City concurrently with adoption of this Resolution is adopting Resolution 2026-29 adopting a General Plan amendment and Specific Plan, Ordinance 1618 approving Zone Change Case No. 20-2502, and Ordinance 1620 approving a Development Agreement for the Project (“Development Agreement”) and it is the intent of the City that the General Plan Amendment, Specific Plan and this Resolution 2026-31 become effective concurrently with the effective date of the Development Agreement Ordinance subject to termination of this approval as set forth in the Development Agreement if the First Installment of the Public Benefit Fee (each as defined in the Development Agreement) is not timely paid in accordance with the terms of Section 5.2.1 of said Development Agreement;
NOW, THEREFORE, the City Council of the City of Banning does hereby resolve, determine, find, and order as follows with respect to Tentative Parcel Map 38118:
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SECTION 1. RECITALS:

The preceding Recitals are true and correct and made a part of this Resolution.

SECTION 2. FINDINGS FOR TENTATIVE PARCEL MAP 38118:

Pursuant to Section 66474 of the Subdivision Map Act, there are seven findings that must be met to justify approval of a Tentative Map application. The City Council of the City of Banning has determined that Tentative Parcel Map, Case No. TPM 38118, can be approved because the following required findings can all be met in the affirmative:

Finding A: The proposed Tentative Parcel Map is consistent with all applicable general and specific plans.

Findings of Fact: The City’s General Plan land use designation and Zoning Map will be amended as part of the overall Project approvals. The proposed TPM 38118 will be consistent with the designation of the Project Site as “Specific Plan,” and the proposed TPM 38118 provides for the accommodation of nineteen (19) planning areas, consisting of a variety of commercial and industrial uses, lot types and sizes ranging from 1-acre to 194.3-acres, common open spaces, and circulation and other public improvements. The proposed TPM 38118 furthers the objectives and policies of the General Plan in that 440 acres of the Project Site is dedicated to commercial and industrial development, with no net loss of residential density, provided that the MSJC Site Entitlements are adopted by the City Council.

Finding B: The design and improvements of the proposed Tentative Parcel Map is consistent with the zone in which the property is located.

Finding of Fact: The Specific Plan identifies the permitted land uses; development standards, design guidelines; and implementation provisions applicable the Project. The Project includes a General Plan Amendment amending the land use designations on-site to General Commercial (GC), Industrial (I), Open Space – Parks (OS-P), and Open Space – Resources (OS-R).establishes criteria for circulation and rights-of-way for public street accessing each of the developable parcels proposed within the TPM 38118. Proposed street widths and sections are consistent with the Specific Plan criteria. The Specific Plan is in conformance with the plans of local purveyors and structured to ensure that necessary roads, utilities, landscape elements, and other infrastructure facilities are installed when needed to accommodate the needs of the Project as it builds out. A Plan of Services and a Water Supply Assessment prepared for the Project indicates that site access and infrastructure for utility conveyances is available and provisions for services have been planned. TPM 38118 is consistent with the Commercial and Industrial uses proposed in the Specific Plan in that it is located on major roadways with good access to Interstate 10 including Sunset Avenue identified in the Banning General Plan as an arterial/secondary highway appropriate for truck traffic.

Finding C: The site is physically suited for this type of development. 990
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Finding of Fact: The 533.8-acre Project Site is currently vacant and undeveloped.

The site’s elevation ranges from approximately 2,399–2,523 feet above mean sea level (amsl). There is a difference of approximately 124 feet of elevation change from the southeast extent of the Project Site to northwest extent of the Project Site. The topography is fairly level with gentle slopes, and several watercourses transect the site. Pershing Creek flows in a northwest to southeast direction through the eastern portion of the Development Site and Smith Creek flows in a north-south direction. Highland Wash is a smaller drainage course and tributary to Smith Creek that confluences with Smith Creek near Westward Avenue. The subject site encompasses 533.8 acres, including 253.7 acres making up approximately the south half of the development project that is presently outside of the current City limits and within the City’s Sphere of Influence. These 253.7 acres are intended to be annexed into the City of Banning upon approval of the Sunset Crossroads Specific Plan. The proposed map as conditioned, including the mitigation measures contained within the Mitigation Monitoring Reporting Program adopted concurrently with FEIR certification to ensure that the Project’s development is in accordance with and will implement the public improvements and mechanisms whereby the necessary facilities and resources will be available for future uses.

Finding D: The subject site is physically suitable for the proposed density of development.

Finding of Fact: The subject site consists of 533.8-acres of vacant and undeveloped land and is planned to provide development opportunities for commercial/retail and industrial uses. The buildings are spread over 530 acres and the FEIR’s visual analyses of the impacts of the building sizes found no significant impact because of their height or mass. Due to its acreage, the Project Site is able to accommodate the Project while keeping buildings within more interior portions of the site with setbacks, walls and open space and parks separating the Project from surrounding uses and the FEIR did not identify any significant visual impacts.

Finding E: The design of the subdivision or the proposed improvements are not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat.

Finding of Fact: With the exception of the significant and unavoidable environmental effects of the Project identified in the FEIR, as modified by the Supplemental CEQA Memoranda and the Mitigation Monitoring and Reporting Program, the design of the subdivision and proposed improvements are not expected to cause substantial environmental damage or to substantially injure fish or wildlife or their habitat. The Project Site is not in a linkage designated under the MSHCP that is a connection between substantial habitat blocks with adequate size, configuration, and vegetation characteristics to generally provide for “live-in” habitat and/or provide for genetic flow for identified covered species. Significant cumulative effects of the Project on the MSHCPcovered plans and wildlife, wildlife movement, riparian/riverine areas and habitat 991
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connectivity are fully mitigated by the City of Banning’s signatory status under the MSHCP and the requisite measures for mitigation of project-specific impacts to the burrowing owl, Los Angeles pocket mouse and Stephens’ kangaroo rat and these species’ habitat.

Cumulative effects not specially covered under the MSHCP are nevertheless mitigated to less than significant levels by the broad range of habitats covered by the MSHCP, project design features and mitigation measures required for the proposed project, and payment of the MSHCP mitigation fee.

Finding F: The design of the subdivision or type of improvements is not likely to cause serious public health problems.

Finding of Fact: All parcels planned for development within the subdivision will have access to utilities, including water, wastewater and electricity. Emergency services such as police and fire are also available to serve the properties as these parcels develop. The Project incorporates landscaping, architectural standards, and buffers to surrounding land uses. As described in the Final EIR and Supplemental CEQA Memoranda, the Project does not result in significant unavoidable localized air quality, health risk, noise impacts, greenhouse gas or noise impacts from Project operations, including truck trips, and construction noise impacts can be mitigated to less than significant levels with the consent of the City and to the extent that there are other unavoidable impacts the same are permitted by a Statement of Overriding Considerations. Significant and unavoidable impacts are regional in nature only: air quality and greenhouse gas impacts. As a result, no public health problems are anticipated.

Finding G: The design of the subdivision or type of improvements will not conflict with easements, acquired by the public at large, for access through or use of the property within the proposed subdivision.

Finding of Fact: The subdivision proposes to dedicate public streets that will be consistent with the criteria planned by the Sunset Crossroads Specific Plan. With the improvement of the development, this will allow safe access through the site and provide each newly established parcel with access. The applicant has dedicated land for the City’s Sun Lakes Boulevard Extension program to facilitate east-west traffic across the Project Site and proposes to build out, as specified in the Specific Plan, Lincoln Street and areas of Sunset Avenue, Bobcat Road and Highland Home Road to facilitate traffic south of I10 in the City.

SECTION 5. APPROVAL
The City Council hereby approves the Tentative Parcel Map, Case No. TPM 38118, subject to the Conditions of Approval attached as Exhibit A, subject to termination of this approval as set forth in the Development Agreement if the First Installment of the Public Benefit Fee (each as defined in the Development Agreement) is not timely paid in accordance with the terms of Section 5.2.1 of said Development Agreement. 992
Resolution 2026-31
March 10, 2026