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Staff Report
City Council
Item No. 7.C
Meeting Date: May 24, 2023
From: John Corella, Director of Engineering/Public Works Title: Cathedral Cove Center Development: Approval of Improvement Agreement for Parcel Map No. 37876
City Council
RECOMMENDATION:
To conditionally approve the Improvement Agreement for Parcel Map No. 37876 with Cathedral Cove 1.0, LLC, and authorize its execution on behalf of the City by the Mayor and City Clerk when all required surety bonds are received and deemed acceptable.
BACKGROUND:
Fountainhead Shrugged, LLC (Developer), is proposing the development of commercial and residential uses, including restaurants, retail, a convenience market and fueling station, and future multi-family residential on approximately 13.51 acres currently owned by CURC (City Urban Revitalization Corporation) located at the southwest corner of Date Palm Drive and East Palm Canyon Drive (Highway 111), within the MXC (Mixed Use Commercial) and DRN (Downtown Residential Neighborhood) zoning districts. Known as the Cathedral Cove Center (Project), the undeveloped Project site consists of 15 irregular shaped lots and is bounded by East Palm Canyon Drive on the north, Van Fleet Avenue on the west, D Street on the south, and the East Cathedral Canyon Flood Control Channel on the east. The Project site is contiguous, except for a public street/driveway (referred to as A Street on the site plan) to the existing commercial building near the northwest corner of the Project site, separating proposed Parcel 7 and Parcel 8.
The commercial portion of the Project is approximately 5.46 acres and will be located along East Palm Canyon Drive. The remaining 7.69 acres, which is located at the rear of the Project site, south of the proposed commercial portion, will be for a future multi- family residential development. Development plans for this portion have not yet been prepared and this portion of the Project site will remain vacant until such plans are prepared and approved by the City through a separate entitlement process.
The Project has been divided into phases related to the timing of the Developer and infill of the Project site. The phases are as follows:
•Phase 1A: Retail Parcels 1 through 5
•Phase 1B: Retail Parcels 6 through 8
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•Phase 2: Residential Parcel 9
The proposed Project required the approval of a Planned Unit Development (PUD) application, Tentative Parcel Map 37867 (TPM), Conditional Use Permits (CUP), Design Reviews (DR), Zoning Ordinance Amendment and Master Sign Program. The Planning Commission made its approval for the Project on August 3, 2022, and the City Council approved the Zoning Ordinance Amendment on September 28, 2022.
At the April 26, 2023, City Council meeting, the Council approved the final map for Parcel Map 37876, for this division of property owned by the City Urban Revitalization Corporation (“CURC”).
DISCUSSION:
Cathedral Cove 1.0, LLC (the same overall Developer, but different sole entity which will be the buyer and “Owner” of the property), is intending to purchase the Phase 1A parcels (Parcels 1 through 5) being created by this map upon close of escrow, for its initial commercial development. A condition of sale and close of escrow, was the recordation of the Parcel Map No. 37867 and the execution of an Improvement Agreement, secured with sufficient improvement securities, to guarantee completion of the required public and private improvements related to the Parcel Map approval.
The Owner has executed the attached Improvement Agreement and will be posting surety bonds as required by the Subdivision Map Act and the Conditions of the Parcel Map approval. These surety bonds include securities for Faithful Performance for the Public and Private Improvements, Water Improvements and Sewer Improvements, each respectively having a parallel surety bond for Payment for Labor and Materials. These surety bonds will amount to $1,963,183. In addition, a required cash security deposit of $59,800 has been posted (submitted to the City) to guarantee placement of all required survey monuments and lot corners for the new parcels.
At the writing of this Staff Report, the Owner has not provided the City with the surety bonds required to complete and record the Improvement Agreement. If Staff receives the surety bonds necessary for the Improvement Agreement prior to the City Council Meeting, Staff will review the surety bonds and if acceptable will ask the City Council to approve the execution of the Improvement Agreement at the meeting. If the surety bonds are not provided to the City prior to this City Council meeting, Staff is requesting the Improvement Agreement be conditionally approved and be executed upon receipt of acceptable surety bonds.
Staff is recommending this Improvement Agreement for Parcel Map No. 37867 be conditionally approved by the City Council and when all acceptable surety bonds are provided and deemed acceptable, the Improvement Agreement will be executed by the Mayor and City Clerk.
FISCAL IMPACT:
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Execution of this Improvement Agreement will facilitate recordation of Parcel Map No. 37867 and close of escrow on the sale of the parcels for the Phase 1A portion of the commercial development (Parcels 1 through 5). The development will generate sales taxes and other indirect City revenues. The public improvements to be constructed with the development may incrementally increase the maintenance and expense burden on City Public Works budgets as a normal growth consequence of development expansion.
ATTACHMENTS:
PM 37876 - SIA notarized