RESOLUTION NO. 2026-084
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA, CALIFORNIA APPROVING A PURCHASE AND SALE AGREEMENT WITH WATER OF LIFE COMMUNITY CHURCH FOR THE ACQUISITION OF LOT C AND LOT D, APPROVING A LOT C GROUND LEASE, APPROVING A PUBLIC BENEFIT USE COVENANT, APPROVING A BINDING MEMORANDUM OF UNDERSTANDING RELATING TO A PUT OPTION FOR THE PROJECT PROPERTY, MAKING FINDINGS UNDER CEQA AND THE SURPLUS LAND ACT, AND AUTHORIZING RELATED ACTIONS WHEREAS, Water of Life Community Church, a California nonprofit religious corporation (“WOL”), owns certain real property identified as APN 1100-091-71-0000 (“Lot C”) and APN 1100-111-51-0000 (“Lot D”); and WHEREAS, WOL also owns and operates the CityLink Campus located at 16029 Arrow Boulevard, Fontana, California, consisting of APN 0232-201-12-000 (“Parcel 1”) and APN 0232-201-13-0000 (“Parcel 2”); and WHEREAS, City and WOL are parties to that certain Promissory Note dated March 22, 2023, in the original principal amount of $3,040,000, secured by a deed of trust recorded against the CityLink Campus; and WHEREAS, City and WOL have negotiated a Purchase and Sale Agreement and Joint Escrow Instructions (the “Purchase Agreement”), pursuant to which City will acquire Lot C and Lot D from WOL in exchange for City’s forgiveness, cancellation, and satisfaction of all amounts owed under the Promissory Note as of closing; and WHEREAS, concurrently with closing under the Purchase Agreement, City, as landlord, and WOL, as tenant, will enter into a Lot C Ground Lease (the “Ground Lease”), pursuant to which City will lease Lot C back to WOL for a term of fifty-five (55) years for parking and related church, ministry, and ancillary uses, subject to City’s reserved rights and the terms of the Ground Lease; and WHEREAS, the Ground Lease provides for Base Rent of Twelve Thousand Dollars ($12,000.00) per month during years 1 through 14, reduced to One Dollar ($1.00) per year so long as CityLink Social Services are continuously operated at the CityLink Campus and WOL is not in default beyond applicable notice and cure periods under the Public Benefit Use Covenant; and WHEREAS, if CityLink Social Services cease prior to year 15 of the Ground Lease and such cessation continues beyond applicable notice and cure periods, Base Rent will revert to Twelve Thousand Dollars ($12,000) per month until services resume and WOL is no longer in default, subject to the terms of the Ground Lease; and WHEREAS, beginning in year 15, rent under the Ground Lease will reset to One Dollar ($1.00) per year for the remainder of the lease term, without limiting WOL’s separate obligations under the Public Benefit Use Covenant; and WHEREAS, as a material component of the transaction, WOL will execute and record a Public Benefit Use Covenant against Parcel 1 (and not against Lot C, Lot D, Parcel 2, or the project property), requiring continued operation of CityLink Social Services for a period of fifteen (15) years; and WHEREAS, City and WOL have also negotiated a Binding Memorandum of Understanding relating to a put option (the “MOU”), pursuant to which WOL may require City to acquire the project property located on a portion of Parcel 2 upon the occurrence of a qualifying triggering event under WOL’s construction financing, subject to the terms, limitations, and maximum purchase price set forth in the MOU; and WHEREAS, the MOU is separate and independent from the Purchase Agreement and the Ground Lease, and City’s obligations under the MOU are limited to the express acquisition obligations set forth therein; and WHEREAS, City’s aggregate exposure under the MOU shall not exceed Twelve Million Dollars ($12,000,000.00), inclusive of the purchase price, lender payoff, lien releases, closing costs, attorneys’ fees, enforcement costs, indemnity amounts, and all other amounts payable by or recoverable from City thereunder; and WHEREAS, the MOU does not make City a borrower, guarantor, indemnitor, lender, loan party, successor borrower, or party to any construction loan document, and does not require City to assume, guarantee, purchase, refinance, repay, reimburse, indemnify, or cure WOL’s construction loan; and WHEREAS, City’s obligations under the MOU are intended to constitute a capped acquisition obligation for a public purpose, and not a guaranty, loan, gift of public funds, pledge of City’s full faith and credit, pledge of tax revenues, or indebtedness or liability in violation of Article XVI, Section 18 of the California Constitution; and WHEREAS, the City Council finds that the transaction serves valid public purposes, including acquisition of real property interests by City, continued operation of services for homeless, disadvantaged, and vulnerable populations within the City, support for transitional housing and related public benefit uses, and protection of City’s interests under the Promissory Note and related transaction documents; and WHEREAS, the City Council further finds that the transaction is supported by adequate consideration to City, including WOL’s conveyance of Lot C and Lot D, WOL’s lease obligations under the Ground Lease, WOL’s obligations under the Public Benefit Use Covenant, and the public benefits arising from continued CityLink Social Services; and WHEREAS, the Ground Lease is part of a concurrent acquisition and leaseback of Lot C and authorizes continued parking and related uses, and this Resolution does not approve any future development, demolition, construction, entitlement, permit, discretionary approval, or CEQA approval for Lot C, which WOL is required to assess independently during the course of the term and any changes it plans to make on the property, and as a condition to the Ground Lease; and WHEREAS, to the extent the Surplus Land Act applies to the Ground Lease or any related disposition of City-owned property, the City Council desires to make all findings and authorize all actions necessary to comply with or confirm an exemption from the Surplus Land Act before final execution and delivery of the Ground Lease.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana, California, as follows:
Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated herein by this reference.
Section 2. CEQA Compliance. The City Council finds that approval of this Resolution, the Purchase Agreement, the Ground Lease, the Public Benefit Use Covenant, and the MOU is not a “project” within the meaning of Section 15378 of the State CEQA Guidelines because the approval does not commit City to any development, construction, demolition, physical alteration, discretionary entitlement, or other activity that may result in a direct or reasonably foreseeable indirect physical change in the environment. The City Council further finds that, even if the approvals are deemed a project, the approvals are exempt from CEQA under the common sense exemption in State CEQA Guidelines Section 15061(b)(3), because it can be seen with certainty that there is no possibility that the approvals, in and of themselves, will have a significant effect on the environment. The approvals will transfer ownership of Lots C and D to the City, lease Lot C back to WOL for continuation of the existing use, and continue the operation of existing CityLink Social Services. The approvals do not authorize any change in land use, new development, or other physical alteration of Lots C or D. Accordingly, it can be seen with certainty that there is no possibility that the approvals may have a significant effect on the environment.
Nothing in this Resolution approves or commits City to approve any future discretionary entitlement, permit, development, construction, demolition, improvement, CEQA determination, or other governmental approval. Any future project, use, improvement, or discretionary approval shall remain subject to all applicable laws, including CEQA, and City retains its full discretion as a governmental agency.
Section 3. Surplus Land Act Findings and Compliance. The City Council finds that the Ground Lease is being entered into as part of City’s concurrent acquisition of Lot C and Lot D and is intended to provide WOL with continued use of Lot C for parking and related uses, subject to City’s reserved rights, and not for the purpose of approving development or demolition of Lot C. The City Council further finds that this Resolution does not approve any development or demolition on Lot C.
To the extent the Ground Lease is determined to be subject to the Surplus Land Act, the City Council hereby authorizes the City Manager, or designee, in consultation with the City Attorney, to take all actions necessary to comply with the Surplus Land Act or confirm an applicable exemption before final execution and delivery of the Ground Lease, including, if appropriate, preparation and submission of any required notices, declarations, findings, or exemption documentation to the California Department of Housing and Community Development. The City Manager shall not finally execute or deliver the Ground Lease unless the City Attorney determines that the City has complied with, or is exempt from, applicable Surplus Land Act requirements.
Section 4. Approval of Purchase Agreement. The City Council hereby approves the Purchase Agreement with WOL for City’s acquisition of Lot C and Lot D. The consideration for the acquisition shall be City’s forgiveness, cancellation, and satisfaction, effective as of closing, of all amounts owed under the Promissory Note dated March 22, 2023, including all unpaid principal, accrued interest, default interest, late charges, and other sums due thereunder, as provided in the Purchase Agreement.
Section 5. Approval of Ground Lease. The City Council hereby approves the Ground Lease for Lot C, pursuant to which City will lease Lot C back to WOL for a term of fifty-five (55) years, subject to the rent structure, service-related rent reduction, reserved City rights, maintenance obligations, default provisions, CEQA, prevailing wage, insurance, indemnity, assignment, and other terms set forth in the Ground Lease.
Section 6. Approval of Public Benefit Use Covenant. The City Council hereby approves the Public Benefit Use Covenant requiring continued operation of CityLink Social Services for a period of fifteen (15) years. The City Council finds that the Public Benefit Use Covenant shall be recorded against Parcel 1 only, and shall not encumber Lot C, Lot D, Parcel 2, or the project property, except to the extent expressly stated in the Public Benefit Use Covenant.
Section 7. Approval of MOU. The City Council hereby approves the MOU. The City Council finds that the MOU is separate and independent from the Purchase Agreement and the Ground Lease, and that approval of the MOU does not make City a borrower, guarantor, indemnitor, loan party, successor borrower, or party to any construction loan document.
Section 8. Maximum City Obligation Under MOU. The City Council hereby approves a maximum City acquisition obligation under the MOU not to exceed Twelve Million Dollars ($12,000,000) for all other amounts payable by or recoverable from City under or in connection with the MOU.
Section 9. Appropriation and Reservation of Funds. The City Council hereby appropriates, reserves, encumbers, or otherwise sets aside funds in an amount not to exceed Twelve Million Dollars ($12,000,000) for the potential acquisition obligation expressly set forth in the MOU. Any payment by City under the MOU shall be payable only from funds lawfully available and appropriated for that purpose, shall be subject to the terms and limitations of the MOU, and shall not exceed Twelve Million Dollars ($12,000,000).
Section 10. Authority to Implement. The City Manager, or designee, is hereby authorized to execute the Purchase Agreement, the Ground Lease, the Public Benefit Use Covenant, the MOU, certificates of acceptance, escrow instructions, closing documents, and such other documents and instruments as are reasonably necessary to implement the transactions approved by this Resolution, subject to approval as to form by the City Attorney. The City Manager’s authority shall not include authority to increase City’s aggregate exposure under the MOU above Twelve Million Dollars ($12,000,000), convert City’s obligations into a guaranty or loan assumption, waive any required Surplus Land Act compliance or exemption determination, or approve any future discretionary entitlement or CEQA determination except through the City’s ordinary governmental approval processes.
Section 11. Independent Agreements. The City Council finds and confirms that the Purchase Agreement, Ground Lease, Public Benefit Use Covenant, and MOU are related components of the overall transaction, but shall operate independently in accordance with their respective terms. No agreement shall be deemed to modify, limit, waive, or supersede another agreement except to the extent expressly stated in the applicable agreement.
Section 12. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable.
Section 13. Effective Date. This Resolution shall become effective immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this Resolution.
APPROVED AND ADOPTED this 8th day of September, 2026.
READ AND APPROVED AS TO LEGAL FORM:
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City Attorney
I, Germaine Key, City Clerk of the City of Fontana, California, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council at a regular meeting of said City Council on the 8th day of September, 2026, by the following vote to-wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
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City Clerk of the City of Fontana
_____________________________________
Mayor of the City of Fontana
ATTEST:
_____________________________________
City Clerk
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