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Contract No.: ____________________
Approval Date: ___________________
CONSTRUCTION CREDIT AND REIMBURSEMENT AGREEMENT
THE PRESERVE
WATER STORAGE & DISTRIBUTION DEVELOPMENT IMPACT FEE PROGRAM
(Various Water Facilities Constructed between 2004-2019)
This CONSTRUCTION CREDIT AND REIMBURSEMENT AGREEMENT
(“Agreement”) is entered into this 2nd day of April 2024 (“Effective Date ”), by and between CITY OF CHINO , a California municipal corporation (“ City”), and CHINO DEVELOPMENT CORPORATION, a California corporation and CHINO PRESERVE DEVELOPMENT CORPORATION, a California corporation (collectively, “Developer”). City and Developer are sometimes hereinafter referred to individually as “Party” and jointly as “Parties”.
RECITALS
A. Pursuant to that certain Preserve Development Agreement No. 2004-073, effective July 1, 2004, as amended by those certain First, Second and Third Amendments thereto and that certain Amended and Restated Development Agreement No. 2023-0182285 approved by Ordinance 2023- 011, effective July 21, 2023 (“ Amended and Restated Development Agreement ”), among City and Developer, and the conditions of approval for Tracts 16419, 16419 -1, 16420, 16420-1, 17057, 17571, 17572, and 19994 , Developer wa s required to design a nd construct various Water and Reclaimed Water Facilities as a condition to the development of The Preserve community.
B. Pursuant to a Construction, Credit and Reimbursement Agreement For Phase One of the Eastside Water Treatment Facility (3500 GMP) (Projects WT-02, WT-05 and WT-06) entered into September 20, 2016, between City , Lennar Communities, Inc., LS College Park, LLC, Developer, and Developer’s affiliate, Lewis Management Corp., and as amended by that letter dated October 7, 2019 (collectively, the “ Initial Reimbursement Agreement ”), City and Developer agreed that Developer would receive a credit or be reimbursed for the “Total DIF Cost” as defined therein in the amount of Seven Million Eight Hundred Fifty-Four Thousand Five Hundred Dollars ($7,854,500.00).
C. In addition to the improvements referred to in the preceding Recital B above which were the subject of the Initial Reimbursement Agreement, Developer has completed additional work required in connection with the design and construction of those certain water and reclaimed water improvements and facilities which also service The Preserve, as more particularly described on Exhibit 1 attached hereto (the “ Additional Improvements ”) and, in connection therewith, has expended an additional Eighteen Million Seven Hundred Twenty-four Thousand T hree Hundred Sixty-nine and 28/100 Dollars ($18,724,369.28).
D. Developer has completed all work required in connection with the design and construction of the Additional Improvements according to the specifications of the City and under the inspection of, and to the satisfaction of the City Engineer of the City.
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E. The Additional Improvements comprise a master-planned facility and are included in the City’s Preserve Water Storage and Distribution (“Water”) Development Impact Fee (“DIF”) program. The Additional Improvements are eligible for reimbursement to Developer by the City and credits against development i mpact fees (“DIFs”) per the Chino Municipal Code, Chapters 3.45 entitled “Preserve Development Impact Fees” (the “ DIF Ordinance”) and, specifically, Section
3.45.130 thereof.
F. The DIF Ordinance provides that if, as a condition of approval of a development project, a developer constructs a public facility identified in the Nexus Reports, for which a DIF is imposed, Developer shall be eligible to receive reimbursement and a fee credit toward the DIFs imposed on the project for the same type of public facility so constructed, and shall be entitled to credit for eligible costs of constructing the public facilities.
G. City and Developer desire to enter into this Agreement (i) to memorialize the ir agreement as to the Total DIF Cost (defined in Section 2.1 below) to which Developer is entitled for its design and construction of the Additional Improvements, (ii) to confirm the amount of the Used Credits (defined in Section 2.3 below) and the Remaining Water DIF Credit and Reimbursement Amount (also defined in Section 2.3 below), to provide the methodology for the City’s future reimbursement to Developer and crediting to Water DIFs (defined in Section 2.2 below) of the Remaining Water DIF Credit and Reimbursement Amount so as to be consistent with Section
6.5.5(a) of the Amended and Restated Development Agreement and (i ii) to establish the requirements for Developer’s transfer or application of all or any portion of available Credits (defined in Section 2.3 below) to a third party.
H. Developer and City also desire to memorialize herein Developer’s right to the highest priority reimbursement of funds from The Preserve Water DIF fund.
NOW, THEREFORE, for the purposes set forth herein, Developer and City hereby agree as follows:
AGREEMENT
1. Incorporation of Recitals. The Parties hereby affirm the facts set forth in the Recitals above and agree to the incorporation of the Recitals as though fully set forth herein.
2. Preserve DIF Credit and Reimbursement.
2.1 Total DIF Cost. The City Engineer has determined that the total costs of the Additional Improvements, including the Additional Improvements that are eligible for credit and reimbursement pursuant to the DIF Ordinance, is Eighteen Million Seven Hundred Twenty Four Thousand Three Hundred Sixty Nine and 28/100 Dollars ($18,724,369.28) (“Total DIF Cost”).
2.2 Credits and Reimbursements From Reimbursement Agreement.
Pursuant to the Initial Reimbursement Agreement, City previously approved of the issuance of credits to Developer or its assignees in the amount of Seven Million Eight Hundred Fifty Four Thousand Five Hundred Dollars ($7,854,500.00) against The Preserve Water DIFs (“Water DIFs”) otherwise due and payable in connection with development within that certain real property owned by Developer and/or its affiliates within The Preserve community (“Developer’s Properties ”) pursuant to the DIF Ordinance. Such credits and reimbursements approved for issuance pursuant to the Initial Reimbursement Agreement are separate and apart from and inapplicable to the Total DIF
DIF Project Nos. Project DIF Validated Costs Deductions / Additions Subtotal Costs WT-102 Eastside Water Treatment Facility Phase I (1) $ 7,854,500.00 $ - 7,854,500.00$ WT-103 Eastside Water Treatment Facility Phase II (2) $ 1,492,388.11 $ 20,381.52 1,512,769.63$ WT-102/103 Eastside Water Treatment Facility Site Planning (3) $ 566,818.02 $ - 566,818.02$ WT-101 Eastside Water Treatment Facility Well No. 16 (4) $ 2,110,105.53 $ (2,110,105.53) -$ WT-101 Eastside Water Treatment Facility Wells No. 17 (5) $ 624,964.00 $ 79,801.19 704,765.19$ WT-113 Schaefer Avenue Water Main (well connection line) $ 1,065,616.20 $ 26,645.00 1,092,261.20$ WT-101 Bon View Well Site $ 238,496.24 $ - 238,496.24$ WT-108 / 109 / 110 Tract Map No. 16419-1 Potable & Recycled Water Lines (6) $ 5,076,176.24 $ (1,631,718.80) 3,444,457.44$ WT-108 / 109 / 110 Tract Map No. 16419 Potable & Recycled Water Lines $ 2,403,121.45 $ - 2,403,121.45$ WT-108 / 109 / 110 Tract Map No. 17571 Potable & Recycled Water Lines $ 1,097,344.57 $ - 1,097,344.57$ WT-109 & Special Draw Kimball Avenue Airport Loop Water Project (7) $ 1,650,000.00 $ - 1,650,000.00$ WT-108 / 109 Tract Map No. 16797 Potable & Recycled Water Lines $ 333,015.03 $ - 333,015.03$ WT-109 Tract Map No. 16420-1 - Potable & Recycled Water Lines (Phase I) $ 928,571.97 $ - 928,571.97$ WT-108 / 109 Tract Map Nos. 17057/17572 - Potable & Recycled Water Lines $ 760,330.41 $ - 760,330.41$ WT-109 Tract Map No. 16420-1 - Potable & Recycled Water Lines (Phase II) $ 885,366.68 $ - 885,366.68$ WT-109 Tract Map No. 18480 - Potable & Recycled Water Lines $ 405,898.11 $ 21,363.06 427,261.17$ WT-109 Tract Map No. 19994 - Potable & Recycled Water Lines $ 2,013,859.55 $ - 2,013,859.55$ WT-201 Water Master Planning $ 413,586.90 $ - 413,586.90$ WT - 108 / 109 Various Potable & Recycled Water Lines $ 252,343.83 $ - 252,343.83$ Total Validated Costs Lewis 26,578,869.28$
2,174,813.74$
28,753,683.02$
Exhibit 1
Credits Purchased per Agreement No. 2020-07
Note 7: In 2004, at the City's request, Lewis advanced the sum payment to the City for the Kimball Ave. Airport Loop project. In return, the City issued DIF credits to Lewis Note 5: Accepted by the City Council on 10-20-2020; validated costs approved by City Council $624,964 Note 4: May 18, 2020, the City Council approved an immediate reimbursement to Lewis for Well No. 16 in the amount of $2,110,105.53. The reimbursement was allocated to both DIF programs with $1,225,000.53 programmed to The Preserve & $885,105 programmed to the Citywide DIF Water DIF Credit & Reimbursement Amount
Note 1: Total not to exceed $13,500,000 per Agreement No. 2017-177; Lewis's cost share is $7,854,500 Note 2: Total not to exceed $7,712,600.03 per Agreement No. 2020-07; Lewis's cost share is $1,492,388.11 Note 6: Deduction for 30" Water Line due to Reimbursement from IEUA to Lewis Note 3:Site planning costs for 12+ acre Eastside Water Treatment Facility site. The site includes Wells 16 & 17, a 4 Million gallon water reservoir, the water treatment facility Phase I, roads, maintenance buildings, water and other utility service lines throughout the site. ($18,724,369.28 Additional Improvements & $7,854,500.00 Initial Improvements)