Agenda Report
Fullerton City Council
MEETING DATE: NOVEMBER 15, 2022
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: SUNAYANA THOMAS, INTERIM DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT PREPARED BY: WILLIAM IRKHE, SPECIAL COUNSEL
SUNAYANA THOMAS, INTERIM DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT SUBJECT: FOX BLOCK COMMERCIAL AND RETAIL PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT
SUMMARY
Fox Harbor LLC, affiliate of NFRED LLC, has contracted to purchase approximately 0.33 acres improved with “Angelo’s and Vinci’s Ristorante” building located at 550 Harbor Boulevard. The building is adjacent to several other parcels owned by the City proposed for development pursuant a Disposition and Development Agreement.
RECOMMENDATION
Adopt the following resolutions:
As City Council:
RESOLUTION NO. 2022-XXX – A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FULLERTON, CALIFORNIA, APPROVING THE FORM OF A DISPOSITION AND DEVELOPMENT AGREEMENT (FOX BLOCK COMMERCIAL AND RETAIL PROJECT) FOR APPROXIMATELY 0.49 ACRES AND PORTION OF ADJACENT PARCELS LOCATED AT THE NORTHEAST CORNER OF ELLIS PLACE AND HARBOR BOULEVARD (APNS 029-032-21, 029-033-24, 029-033-38) AND APPROXIMATELY 0.64 ACRES LOCATED AT THE NORTHWEST CORNER OF CHAPMAN AVENUE AND POMONA AVENUE (APNS 029-033-03, 029-033-04, 029-033-05, 029-033-06) As Successor Agency:
RESOLUTION NO. SA 2022-XX – A RESOLUTION OF THE SUCCESSOR AGENCY OF THE CITY OF FULLERTON, CALIFORNIA, APPROVING THE FORM OF A DISPOSITION AND DEVELOPMENT AGREEMENT (FOX BLOCK COMMERCIAL AND RETAIL PROJECT) FOR APPROXIMATELY 0.49 ACRES AND PORTION OF ADJACENT PARCELS LOCATED AT THE NORTHEAST CORNER OF ELLIS PLACE AND HARBOR BOULEVARD (APNS 029-032-21, 029-033-24, 029-033-38) AND APPROXIMATELY 0.64 ACRES LOCATED AT THE NORTHWEST CORNER OF CHAPMAN AVENUE AND POMONA AVENUE (APNS 029-033-03, 029-033-04, 029-033-05, 029-033-06) Authorize City Manager to execute the Disposition and Development Agreement.
Authorize City Manager, or authorized designee, to execute any additional agreements or documents, including recorded instruments, to perform City obligations under the DDA and other applicable permits and entitlements.
CITY MANAGER REMARKS:
The City Manager recommends approval of the Development Agreement.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Infrastructure and City Assets.
FISCAL IMPACT
Fiscal impact determined pending appraisal, which City Council will discuss on November 15, 2022.
DISCUSSION
General Summary of Project on Properties Subject to DDA The project consists of various components to create a food destination consisting of 14 restaurants, a microbrewery, landscaped outdoor common dining area, live entertainment and a lounge. The project would involve construction of a new 6,830 square-foot building on the adjoining parcel, further referred to as the “Triangle Parcel”, generally located at the corner of Harbor Boulevard and Ellis Place, on the north side of Ellis Place and to the southeast of the Orange County Flood Control drainage channel. The City owns this parcel. The City would sell the parcel to the applicant to develop pursuant to the DDA.
Angelo’s and Vinci’s property will undergo an extensive interior renovation and exterior modification to accommodate new restaurant uses on the ground level (both with shared indoor dining area and outdoor patio space) and a lounge with a full-liquor bar on the second level within the existing building. This site has operated under an Alcoholic Beverage Control (ABC) Type 47 license (On-Sale General – Eating Place) since at least 1992. The DDA includes applicant improvements to the Angelo’s and Vinci’s property.
Parcels of an existing parking lot located at the northwest corner of Pomona Avenue and East Chapman Avenue would provide parking for the proposed building. The City of Fullerton, in its capacity as the Successor Agency, owns these four parcels. The City would sell the parking lot parcels, along with the Triangle Parcel, to the applicant to develop pursuant to the DDA.
The proposed project includes the potential street vacation of a portion of Ellis Place to provide pedestrian and use connectivity. The City will process the street vacation separately, pursuant to State and City law, but the DDA includes contingent terms and conditions that would allow the conveyance of the vacated portion of Ellis Place, if the City approves the street vacation. The conveyance of the vacated portion of Ellis Place may occur post-closing of escrow pursuant to the DDA.
The applicant has requested specified easements for vehicular and pedestrian circulation, trash enclosures and other ancillary uses over two commercial condominium units adjacent to Angelo’s and Vinci’s property. The City owns the two commercial condominium units in its capacity as the Successor Agency and subject to that certain Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for the Fox Theatre (Fox Block CC&Rs) recorded in January 2011. The Fox Block CC&Rs were recorded as part of the requirements under a separate agreement between the former Fullerton Redevelopment Agency and Fullerton Historic Theatre Foundation that resulted in the subdivision of the Fox Theatre and surrounding buildings into five separate condominium units, with the Fox Theatre Foundation owning the theater condominium and the City (as Successor Agency) owning the remaining four, including Unit 4 known as the “East Airspace Condominium Unit” and Unit 5 known as the “Parking Condominium Unit” that would be subject to the applicant’s requested ancillary use easements. The DDA governs the conveyance of the ancillary use easements and, like the vacated portion of Ellis Place, may occur post-closing of escrow. If City does not convey the easements, the DDA allows the applicant to modify the site plan so it may still fully realize the project’s intended uses.
Lastly, the project includes a variety of off-site including an improved crosswalk across Harbor Boulevard for improved pedestrian access and increased safety.
The applicant held a community meeting on October 12, 2022, to present the proposed project to any interested persons and to notify community members of the requested applications. The City published notice of the community meeting in the Fullerton Observer in the Early October Edition. Approximately 20 people attended the meeting, several affiliated with the Fox Theatre. Comments were generally positive and supportive towards the project. Some comments pertained to the exterior improvements to the Angelo’s and Vinci’s building, with some questioning the improvements while others believed the new appearance would complement the Fox Theatre.
The Planning Commission held a duly noticed public hearing on October 26, 2022 and approved the following:
Major Site Plan (ZON-2022-0053) for review of site, architectural and landscape plans Conditional Use Permit (ZON-2022-0054) to allow a microbrewery within the proposed new building located on the Triangle Parcel and two newly proposed restaurants (eating establishments) with on-site alcohol sales on the upper level of the renovated building at 550 North Harbor Boulevard Conditional Use Permit (ZON-2022-0055) to allow off-site parking at the existing parking located at Pomona Avenue and Chapman Avenue for the newly constructed building and uses on the Triangle Parcel Vacation (SUB-2022-00003) approved a recommendation to City Council to allow a partial vacation of Ellis Place to allow a publicly accessible outdoor dining, gathering space and public access through the vacated area.
Staff informed the Planning Commission that, should they approve the recommended action items, staff would present the DDA currently before the City Council to memorialize the disposition and development of the project.
Project Description and Background
Angelo’s and Vinci’s Ground Floor
The project would reconfigure the westerly portion of the ground level of the Angelo’s and Vinci’s building to have two full-service restaurant spaces of approximately 2,300 square feet each. Both restaurants will have front entrances facing onto Harbor Boulevard. The applicant would develop final floor plans for these uses once it has selected final tenants.
The easterly portion of the ground floor within the building will accommodate five restaurants and/or food vendors. The spaces range in size from approximately 427 square feet to 708 square feet, arranged with an internal common dining area separating three of the vendor spaces from the other two. The common dining area would be approximately 1,483 square feet with approximately 42 seats arranged around three tables. Patrons would have the ability to take their food items outside to sit and eat in a common area on the north side of the building.
Angelo’s and Vinci’s Second Floor
The applicant would renovate the upper floor of the building to create a new 5,088 square-foot lounge area. The proposed lounge anticipated having live entertainment such as live music, dancing and DJ. The applicant has not developed floor plans for this space since it has not yet leased the space to an operator. The area, as permitted, could have a lounge use with full liquor service and entertainment. The entertainment would require Fullerton Police Department review and approval and an established security plan.
As conditioned, the City would not issue permits for interior build-out of the lounge area until the applicant has an approved Entertainment Permit and associated security plans to the satisfaction of the Community and Economic Development Department and Police Department. The lounge would also have an approximately 662 square-foot balcony area open to the rear of the building to the east. An external staircase would allow for exit from the balcony directly to the ground level.
In total, the renovated building contains roughly 16,420 square feet, including both levels, an attic and a basement. The owner and tenants would utilize the attic and basement for equipment and storage space and would not be publicly accessible.
Ellis Place Vacation
The City proposes vacating the western portion of Ellis Place abutting Harbor Boulevard to create pedestrian connectivity between the Angelo’s and Vinci’s property and the Triangle Parcel to the north across Ellis Place. This portion of the street is approximately 161 feet long by 28 feet wide. This portion of abandoned street will create a grade-separated pedestrian space utilized as a large outdoor dining area. The project would construct a new cul-de-sac near the northeast corner of the Angelo’s and Vinci’s building and will provide vehicular access to the Fox Theatre alley running along the east side of the building.
The applicant will use the newly created public space for outdoor dining and entertainment and outfit with a variety of high-quality amenities to include picnic-style tables and benches, fiber optic overhead “string lights”, decorative pavers, over-sized pots with plants and trees and wall decorations. Raised curbs along Harbor Boulevard and at the new cul-de-sac would protect the space. Large planters with trees placed at the east and west ends of the outdoor dining area would provide a visual delineation to the edge of the streets and prevent vehicles from trying to enter the space.
The applicant proposed to modify the Fox Theatre alley to both dedicate a portion of its property to the new Ellis Place cul-de-sac and receive a portion of land from the vacated Ellis Place. The vacation of Ellis Place will not impact the City’s General Plan as the Plan does not characterize the street as a collector street and the street is not part of any designated bicycle path. The Public Works Department will process a map when required.
Triangle Parcel Development
The Triangle Parcel, located directly north of Angelo’s and Vinci’s across Ellis Place, is a City-owned parcel currently used as a parking lot. The northwesterly portion of the parcel abuts the Brea Creek drainage canal, the eastern portion abuts a privately-owned parking lot and the southern edge abuts Ellis Place. The development of this site consists of constructing a new single-story structure arranged in a “V” shape, with a mezzanine level. A proposed microbrewery business and seven food vendors would utilize this space.
The new building proposes to contain 6,830 square feet of floor space with a height of 32 feet at its highest point (the mezzanine space). The building would accommodate the new restaurants, a full production brewery that will produce approximately 3,000 barrels per year and a tasting bar counter.
The proposed building have a “V” shape configuration which generally follows the shape of the underlying parcel. The closest residential property is approximately 60 feet to the east of the subject parcel and fronts on Ellis Place. Residential properties to the west are over 180 feet from the site across Harbor Boulevard and buffered by an existing commercial building. The east and north walls of the new building will not have any openings and therefore will act as a solid buffer to help contain noise on the site.
Pomona Avenue and Chapman Avenue Parking Lot
The project would leave the four parcels consisting of the existing parking lot at the northwest corner of Pomona Avenue and Chapman Avenue as a public parking lot to serve as the required parking for the new development and uses. This parking lot will require the approval of a Conditional Use Permit, since the required parking will not be located on the same parcel as the proposed building. Staff believes this is appropriate, given the approximately 400-500 foot proximity of the parking lot to the project sites. The Pomona Avenue and Chapman Avenue parking lots would satisfy the parking requirements for the new building, as allowed within the Restaurant Overlay District and confirmed through the requirements of the DDA and conditional use permits.
The project proposed landscaping in such a manner as to provide connectivity between the entire project area and cohesively tie the project into the existing uses.
CEQA Determination
Categorical Exemption, Section 15332 “In-Fill Development Projects” of the California Environmental Quality Act (CEQA).
The City, as Lead Agency, has determined that the project qualifies for a CEQA Exemption under the provisions of Class 15332 (Class 32) “In-Fill Development Projects.” The City hired Harris and Associates to prepare an analysis to ensure no impacts from the project associated with Noise, Air Quality, Traffic or Water Quality in accordance with the Class 32 criteria. This analysis yielded no impacts in these areas and therefore the Class 32 exemption is appropriate. Staff recommends the City Council accept this CEQA determination.
Analysis
Disposition and development agreements combine contractual provisions from real property purchase and sale agreements with project-specific construction and use obligations. Redevelopment Agencies commonly used these types of agreements prior to the dissolution of redevelopment agencies in 2012. Cities continue to use them (as is the case with the DDA before City Council) hen a city and/or city acting in its capacity as the successor agency to a former redevelopment agency have real properties to sell for a specific development and use.
The DDA for the proposed project includes several terms and conditions common to real property disposition agreements for a particular project, including purchase prices for acquiring the various properties from the City and Successor Agency, a due diligence period, conveyance facilitated through an independent escrow officer, limitations on transfers of the properties from the approved developer (or affiliate of developer) prior to completion of development, a schedule of performance to commence and complete construction and use restrictions and obligations that apply for several years after the completion of development.
Some of the material terms in the attached DDA include:
Fox Harbor LLC, affiliate of NFRED LLC, is Buyer and Developer of the properties City is Seller of Triangle Parcel and Successor Agency is Seller of Pomona Avenue / Chapman Avenue parking lot parcels Escrow closing date no later than the end of this year for the Triangle Parcel and parking lot parcels at Pomona Avenue and Chapman Avenue Allowance for the conveyance / acquisition of the vacated portion of Ellis Place after the end of this year and contingent on completion of the street vacation process by the City Allowance for granting of easements over the Parking Condominium and East Airspace Condominium Units after the end of the year and contingent on obtaining the requested amendment to the Fox Theatre CC&Rs Completion of the quitclaim of a gas pipe easement over the Triangle Parcel, held by Chevron and to convey to the Buyer, all as part of the escrow and requiring the Buyer to indemnify the City with the obtaining of the Triangle Parcel A requirement for good faith negotiations to plan for and fund a bus shelter on Harbor Boulevard just north of the channel that borders the Triangle Parcel Limitations on transfers to any entity not affiliated with the Buyer as the developer for the project A Schedule of Performance that requires submittal of construction drawings for plan check within 12 to 36 months following the close of escrow and an outside date of December 31, 2027 for completion of the entire project Ten-year use restrictions for the project once completed.
The DDA results from extensive negotiations over the project pursuant to an Exclusive Negotiation Agreement between the City and applicant (NFRED LLC, affiliate of Fox Harbor LLC) dated May 21, 2020, as amended (ENA). If City Council approves the DDA, the ENA no longer has any force or effect and the DDA thereafter governs the applicant’s obligations with respect to the purchase and development of the project on the properties.
The property disposition also complies with the State Surplus Land Act, Government Code Section 54220 et seq. (SLA). On May 19, 2021, the City issued a notice of availability for the potential negotiation and purchase of the City-owned Triangle Parcel prior to declaring this property as “Surplus Land” in accordance with Section 54222 and the process set forth in the SLA. The City received no responses of interest in negotiating or the potential purchasing or leasing the Triangle Parcel by July 18, 2021, or within 60 days after the City’s notice of availability sent pursuant to the Surplus Land Act, as recorded by the California Department of Housing and Community Development at the Internet web link: https://www.hcd.ca.gov/community-development/public-lands-for-affordable-housing-development.shtml. The four parcels that constitute the former Fullerton Redevelopment Agency property and serve as the parking lot on the corner of Pomona Avenue and Chapman Avenue are subject to the ENA. The prior land use disposition provisions under the SLA, in effect prior to the enactment of Assembly Bill 1486 (Stats. 2019, Ch. 664), apply to these former RDA parcels and have been complied with under the prior SLA.
In conclusion, the DDA memorializes the contractual obligations of the applicant to acquire and use the properties for the project as described in this report.
Attachments:
Attachment 1 – Draft City Resolution No. 2022-XX
Attachment 2 – Draft SA Resolution No. SA 2022-XXX
cc: City Manager Eric J. Levitt
Fox Block Disposition and Development Agreement
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