Agenda Report
Fullerton City Council
MEETING DATE: May 17, 2022
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: eric j. levitt, City Manager
PREPARED BY: gregory pfost, interim DIRECTOR OF COMMUNITY and economic DEVELOPMENT
KELLEE FRITZAL, CONSULTANT / SPECIALIST FOR COMMUNITY AND ECONOMIC DEVELOPMENT SUBJECT: EXCLUSIVE NEGOTIATION AGREEMENT BY AND BETWEEN CITY OF FULLERTON AND nfred, llc (FRONTIER REAL ESTATE INVESTMENTS) regarding THE fox block development - FINAL EXTENSION
SUMMARY
Consideration of a final extension of Exclusive Negotiation Agreement (ENA) by and between City of Fullerton and NFRED, LLC (Frontier) to allow review of development plans for a public market style commercial development generally located on east side of North Harbor Boulevard and west side of Pomona Avenue between Chapman Avenue and just north of Ellis Place. The extension would continue through December 31, 2022, with presentation of a Disposition and Development Agreement for City Council consideration planned to occur before the requested extension deadline.
RECOMMENDATION
Approve proposed Extension to the ENA through and including December 31, 2022, by and between the City of Fullerton and NFRED, LLC on property located on the east side of North Harbor Boulevard and west side of Pomona Avenue between Chapman Avenue and just north of Ellis Place, including the Pomona Avenue Parking Lot (Pomona Lot), Ellis Parking Lot and Triangle Lot (APNs 029-033-03, 04, 05, 06, APNs 029-033-09, 27, 28 and APN 029-032-21).
Authorize City Manager to execute ENA Extension Letter (form attached) by and between the City of Fullerton and NFRED, LLC for extension of the Exclusive Negotiation period for development of a public market, small format retail and restaurants with outdoor amenities on properties.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Infrastructure and City Assets
Fiscal and Organizational Stability.
FISCAL IMPACT
The City has no obligation to pay or reimburse the NFRED, LLC (“Developer”) for any costs or expenses incurred as a result of the ENA, preparation and submittal of the development plan, negotiation of a Disposition and Development Agreement (DDA) or other agreement(s), retention of any consultant, development of the property or any other matter concerning the property, except as otherwise agreed to by the City in writing, prior to incurring costs or expenses. The City has incurred legal fees for ENA preparation and could incur professional service fees for review of the Developer’s proposal. Staff anticipates incurring such costs within budget.
DISCUSSION
The properties subject to the ENA originally included APNs for the area commonly referred to as the Fox Block, including (in part) APNs for the properties referred to as the Ellis Parking Lot, Pomona Lot and Triangle Lot. All of the properties subject to the ENA have Commercial General (C-3) zoning. The Successor Agency to the City of Fullerton and the City of Fullerton split property ownership. The Department of Finance (DOF) approved a Long-Range Property Management Plan (LRPMP) as required by State redevelopment dissolution law for the properties held by the Successor Agency. State dissolution law does not require the LRPMP to cover the City-owned properties subject to the ENA (namely, the Triangle Lot). The LRPMP approved the Ellis Parking Lot as subject to a DOF-approved “enforceable obligation” (namely, the Peck OPA).
City Council entered into an ENA with Frontier Development (NFRED, LLC) on May 19, 2020 to review the feasibility of the development and to submit project entitlements. As permitted by the ENA, the Director of Community and Economic Development has twice extended the Negotiation Period due to the amount of due diligence required, the changing scope of the properties to include in the proposed development as well as the impact of the coronavirus pandemic. The current ENA, as extended, expires on May 21, 2022. City Council may approve extending the Negotiation Period under the ENA.
The City and Developer have reviewed numerous designs and plans, met with the Fullerton Historic Theater Foundation regarding development options and performed due diligence on the properties regarding soils and the location and use of an existing Chevron pipeline over the last two years. Frontier submitted a preliminary proposed project to the City, which staff internally reviewed at the Development Coordination Review Committee (DCRC). In addition, the City has worked with Frontier on the DDA between the City, the Successor Agency and Frontier. The parties will complete a draft DDA with presentation to City Council for its consideration anticipated to occur in the next few weeks.
Frontier submitted the formal entitlement application for a Major Site Plan approval and related entitlements for the Pomona Lot and Triangle Lot properties on May 6, 2022. The City is processing the application. The Ellis Parking Lot property may be subject to a separate project application or condition of regulatory approval.
As stated, the City has listed the Pomona Lot and Triangle Lot properties within the development area in the LRPMP or completed the notice of availability process for Surplus Land in accordance with applicable state law. As the LRPMP covers the Pomona Lot asset, the Surplus Land Act governs the timing of and process for disposition of this property. Because the property remains subject to an ENA in effect since May 2020, the City can continue to negotiate and enter into a DDA for disposition without complying with recently enacted new requirements of the Surplus Land Act, including no restrictions on land use, provided the parties complete the sale no later than December 31, 2022. Should the City not execute the DDA for the property disposition before December 31, 2022, the Surplus Land Act’s more rigorous disposition requirements would govern.
Attachments:
Attachment 1 – Exclusive Negotiation Agreement Extension Letter Form Fox Block Exclusive Negotiation Agreement
May 17, 2022 - Page 3