ORDINANCE NO. 2025-149
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GONZALES
APPROVING A DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF
GONZALES AND CIELO GRANDE RANCH, LLC RELATIVE TO THE
DEVELOPMENT KNOWN AS VISTA LUCIA
WHEREAS, the City of Gonzales has received a request to consider a Development Agreement initiated by Cielo Grande Ranch, LLC, establishing relevant property development rights associated with proposed development on 771 acres of property located east of Fanoe Road adjacent to the eastern edge of the City of Gonzales city limits; and WHEREAS, the City and Cielo Grande Ranch, LLC, believe that execution of a Development Agreement will assist in the timely, efficient, orderly and proper development of the property; and
WHEREAS, the City Council complied with the requirements of the California Environmental Quality Act (“CEQA”), and has independently reviewed and considered the Final Environmental Impact Report for the City of Gonzales 2010 General Plan, the 2014 General Plan EIR Sphere of Influence Expansion Addendum and the City Council has certified the Final Environmental Impact Report, and adopted CEQA Findings of Fact and Statement of Overriding Consideration for the proposed Vista Lucia Project; and
WHEREAS, on March 10th, 2025, the Planning Commission conducted a duly noticed public hearing to consider a recommendation to the City Council on the proposed Development Agreement, and considered the Staff Report and oral report for this item, and all public comments; and
WHEREAS, on September 2nd, 2025, the City Council conducted a duly noticed public hearing to consider the Planning Commission recommendation on the proposed Development Agreement, and considered the written and oral Staff Report, and all public comments and correspondence received.
NOW, THEREFORE BE IT ORDAINED that the City Council of the City of Gonzales adopts an ordinance that approves the Development Agreement as follows:
SECTION 1. All of the recitals set forth above are true and correct to the best of the Council’s knowledge, and by this reference, are incorporated herein.
SECTION 2. The City Council accepts the Planning Commission’s recommendation concerning adoption of a Development Agreement between the City of Gonzales and Cielo Grande Ranch, LLC.
SECTION 3. The City Council has evaluated the consistency of the proposed Development Agreement with the City’s procedures and requirements for development agreements as set forth in City Council Resolution No. 2003-42 and has determined that the Development Agreement:
1. Is consistent with the objectives, policies, general land uses and programs specified in the City of Gonzales General Plan. The Development Agreement does not expand, diminish, or modify in any way the scope of uses or the development potential established by adoption of the Vista Lucia Specific Plan, Vesting Tentative Map 2023-01, or the PreZoning designation assigned to the property in the Gonzales City Code.
2. Is in conformity with public convenience, general welfare and good land use practices.
Nothing in the Development Agreement is adverse to the public convenience or welfare.
To the contrary, adoption of the Agreement and acceptance by the parties will improve the likelihood for successful development of the Vista Lucia Project which will be of broad public benefit in terms of job and economic growth, and the orderly development of the City. Use of development agreements is a land use regulatory practice established by the State legislature and confirmed by City Council adoption of Resolution No. 2003-42.
3. Will not be detrimental to the health, safety and general welfare of persons residing in the immediate area nor detrimental or injurious to property or persons in the general neighborhood or to the general welfare of the residents of the City as a whole. The area addressed by the Development Agreement is unoccupied by residents at this time and there are no businesses currently in operation. The Development Agreement will provide certainty with respect to responsibilities for and financing of certain public improvements associated with the Vista Lucia Project and will therefore benefit not only the project site, but the entire vicinity by assisting in the timely completion of these improvements.
4. Will not adversely affect the orderly development of property or significantly impact the preservation of property values. The Development Agreement is intended to enhance the orderly development of the Vista Lucia Project site and off-site road improvements and is fully consistent with the conditions and requirements of Vesting Tentative Map 2023-01.
5. Is consistent with the provisions of Government Code Section 65864 through 65869.5. The Development Agreement has been prepared to address the required elements of content and the findings established by the Government Code, has been processed in the manner required by the Government Code and has been subject to properly noticed hearings before the Planning Commission and City Council. Moreover, City Council Resolution No. 2003- 42 was adopted to establish procedures in compliance with Government Code Sections 65864 through 65869.5 and this Development Agreement has been processed in substantial compliance with Resolution 2003-42.
SECTION 4. The Development Agreement, a copy of which is attached hereto as Exhibit A and by this reference incorporated herein, is hereby approved, and the Mayor is hereby authorized and directed to execute the same on behalf of the City of Gonzales. The City Clerk is directed to record an executed copy of the Development Agreement with the County Clerk.
SECTION 5. This Ordinance shall be in full force and effect commencing thirty (30) days after the date of its final passage and a summary hereof shall be published once within fifteen (15) days of passage in the Salinas Valley Tribune, a newspaper of general circulation printed and published in the County of Monterey and circulated in the City of Gonzales.
This Ordinance was introduced and first read by the City Council of the City of Gonzales at a regular meeting on the 2nd of September 2025, and adopted at a regular meeting of the City Council on the 15th day of September 2025, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
______________________________
Jose L. Rios, The Honorable Mayor
ATTEST:
___________________________________
Mary Villegas, Deputy City Clerk
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Development Agreement
by and between
the City of Gonzales and Cielo Grande Ranch, LLC,
relative to the Development known as
Vista Lucia
This Development Agreement (hereinafter “Agreement”) is entered into as of the City Approval Date (hereinafter defined) by and among the CITY OF GONZALES, a municipal corporation (the “City”), and CIELO GRANDE RANCH, LLC, a California limited liability company (“CGR”).
RECITALS
WHEREAS, to strengthen the public land use planning process, to encourage private participation in the process, to reduce the economic risk of development, and to reduce the waste of resources, the California Legislature adopted the Development Agreement Statutes (California Government Code §65864, et seq.), which authorizes the City to enter into an agreement with any person having a legal or equitable interest in real property regarding the development of such property; WHEREAS, on June 2, 2003, the City adopted Resolution No. 2003-42 which established procedures and requirements for Development Agreement pursuant to Government Code Sections 65864-65869.5; WHEREAS, this Agreement relates to the development known as the Vista Lucia Project (Project), a mixed-use residential, commercial, and public use community planned by CGR on that certain 771 acres of real property identified in Exhibit A attached hereto and incorporated herein (the Project Area); WHEREAS, the Project Area is presently located outside the City’s limits but within the City’s Sphere of Influence;
WHEREAS, CGR holds an equitable interest in the Project Area and has requested that the Project Area be annexed into city limits, and that the Planning Commission (hereinafter defined) and the Council (hereinafter defined) take certain actions relating to development of the Project Area, all as more particularly set forth herein;
WHEREAS, the Project includes buildout of two neighborhoods, the western Santa Lucia Neighborhood and the eastern Gabilan Neighborhood, which may contain up to 3,498 units; WHEREAS, given the significant size and scope of the Project, the City and CGR desire to confirm the rights and obligations of the Parties respective to the Project buildout and to ensure that the Project is diligently constructed in a safe and efficient manner; and WHEREAS, the terms and conditions of this Agreement have undergone extensive review by the City staff, the Planning Commission, and the Council and have been found to be fair, just, and reasonable; WHEREAS, the best interests of the residents of the City of Gonzales and the public health, safety and welfare will be served by entering into this Agreement; WHEREAS, this Agreement will eliminate uncertainty in planning and provide for the orderly development of the Project Area, ensure installation of necessary improvements, provide for public services Exhibit A
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appropriate to the development of the Project (hereinafter defined), and generally serve the purposes for which development agreements under California Government Code §65864, et seq., are intended; and WHEREAS, in exchange for these benefits to the City, together with the public benefits to be served by the development of the Project Area, CGR desires to receive the assurance that it may proceed with development of the Project Area in accordance with certain existing ordinances, resolutions, policies and regulations of the City pursuant to the terms and conditions contained in this Agreement, based on both Development Approvals and Subsequent Development Approvals (hereinafter defined).
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS AND EXHIBITS.
1.1 Definitions. The following terms when used in this Agreement shall be defined as follows:
1.1.1 “Agreement” means this Development Agreement, as amended from time to time.
1.1.2 “Annexation” means approval by the Monterey County Local Agency Formation (LAFCo) Commission of the City’s application to annex the Project Area into the city limits of the City of Gonzales.
1.1.3 “Block” means a portion of the Santa Lucia Neighborhood or Gabilan Neighborhood presently identified by numbers 1 through 30 in the Land Use Plan of the Specific Plan.
1.1.4 “City” means the City of Gonzales, a municipal corporation.
1.1.5 “City Approval Date” means _____________ 2025, which is the date this Agreement was approved by the Council pursuant to Ordinance No. .
1.1.6 “City Attorney” means the person holding the office of the same name or the equivalent in the City.
1.1.7 “City Clerk” means the person holding the office of the same name or the equivalent in the City.
1.1.8 “City Manager” means the person holding the office of the same name or the equivalent in the City.
1.1.9 “Council” means the elected members of the public serving as the City Council of the City of Gonzales.
1.1.10 “Development” means (i) the division of a parcel of land into two (2) or more parcels; (ii) the construction, reconstruction, conversion, structural alteration, relocation, or enlargement of any structure; (iii) any excavation, landfill, or land disturbance; and (iv) any use or extension of the use of land.
1.1.11 “Development Approvals” means the Project’s permits, approvals, and entitlements approved or issued on the City Approval Date which are listed in Exhibit B attached hereto and incorporated herein by this reference. “Subsequent Development Approvals” are permits, approvals, and entitlements obtained after the City Approval Date but prior to the _____ City _____ Master Developer Page 3 of 46
expiration of the Term of this Agreement, which are consistent with the General Plan and the Specific Plan.
1.1.12 “Development Exaction” means any requirement of the City in connection with or pursuant to any Land Use Regulations and Ordinances or Development Approvals for the dedication of land, the construction or increase in size of improvements or public facilities, or the payment of fees in order to lessen, offset, mitigate, or compensate for the impacts of Development on the environment or other public interests and does not include processing fees.
1.1.13 “Effective Date” means the date a Certificate of Completion for any portion of or all of the Project Area is recorded in the Official Records.
1.1.14 “Enacting Ordinance” means Ordinance No. of the Council adopted by the Council on , 2025, as set forth in Resolution No. 2025- authorizing the City to enter into this Agreement.
1.1.15 “Environmental Impact Report” means the Environmental Impact Report for the Vista Lucia Specific Plan certified by the Council on , 2025, as set forth in Resolution No. - , and on file with the City Clerk.
1.1.16 “Existing Land Use Regulations and Ordinances” means all Land Use Regulations and Ordinances in effect and a matter of public record as of the City Approval Date.
1.1.17 “General Plan” means The City of Gonzales General Plan adopted by the Council on , as set forth in Resolution No. , and on file with the City Clerk.
1.1.18 “Lender” means any bank, savings and loan association, insurance company, private equity firm or other source of financing for the acquisition, development, construction, and/or operation of the Project Area.
1.1.19 “LSDF” means Land Secured Debt Financing, a financing mechanism whereby real property secures funds obtained by a public entity for the purpose of constructing and/or maintaining improvements.
1.1.20 “Land Use Regulations and Ordinances” means the City’s rules, regulations, Ordinances, and official policies governing permitted use, density, design, improvement, and construction of the Project Area.
1.1.21 “Low Income Housing Unit” means a residential housing unit required by a deed restriction to be offered for rent or sale to a qualified low-income household identified by the California Department of Housing and Community Development and/or the Monterey County Housing Authority.
1.1.22 “Master Developer” means Cielo Grande Ranch, LLC, a California limited liability company, or any individual or entity which acquires all or a portion of the Project Area and which assumes the obligations of Master Developer set forth in this Agreement, all as more particularly set forth in the Assignment Agreement executed by Master Developer and the individual or entity assuming the obligations of Master Developer as to all or a portion of the Project Area (see Section 2.5.1 below). Only those individuals or entities to which Master Developer has assigned the title of Master Developer shall be recognized by the City as being a Master Developer.
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1.1.23 “Ordinances” means the ordinances, resolutions, and codes of the City governing the permitted uses of land, density, design, improvement, construction standards and specifications applicable to the Development and use of the Project Area. Specifically, but without limiting the generality of the foregoing, Ordinances shall include the City’s General Plan, the Specific Plan, and Zoning Titles of the Gonzales City Code (“City Code”) of the City, and the City’s Building, Electrical, Mechanical, Plumbing, and Fire Codes.
1.1.24 “Owner” means Master Developer, and/or any entity that succeeds to the interest of Master Developer with respect to all or any portion of the Project Area and has not been identified as Master Developer pursuant to Section 1.1.22 above.
1.1.25 “Planning Commission” means the appointed members of the public serving as the Planning Commission of the City of Gonzales.
1.1.26 “Project” means Development of the Project Area contemplated by the Specific Plan, as such Specific Plan may be further defined, enhanced, amended, or modified.
1.1.27 “Project Area” means the real property described on Exhibit A to this Agreement, attached hereto and incorporated herein by this reference.
1.1.28 “Specific Plan” means the Vista Lucia Specific Plan, including all exhibits and appendices, adopted for the Project Area by the Council on , 2025, and on file with the City Clerk, as amended, pursuant to Ordinance No. 2025- , adopted by the Council on , 2025, and on file with the City Clerk.
1.1.29 “Subsequent Land Use Regulations and Ordinances” means those Land Use Regulations and Ordinances adopted and effective after the Effective Date of this Agreement.
1.1.30 “Very Low Income Housing Unit” means a residential housing unit required by a deed restriction to be offered for rent or sale to a qualified very low-income household identified by the California Department of Conservation and Development and/or the Monterey County Housing Authority.
1.1.31 “Vest”, “Vesting”, “Vested” mean the conferring of the rights granted to Master Developer under this Agreement and subject to all the terms, conditions and requirements of this Agreement, to proceed with the Development of the Project Area based on the agreement of the City hereunder that certain regulations and requirements in the Development Approvals pertaining to the Development of the Project Area are fixed and, except as permitted by this Agreement, that they cannot be subsequently modified, changed or augmented so as to impose additional requirements or burdens on the Development of the Project Area without Master Developer’s consent.
1.2 Undefined Terms. Terms not defined in Section 1.1 shall have the meanings set forth in this Agreement, the Specific Plan, the General Plan, or the Environmental Impact Report, in that order of priority.
1.3 Exhibits. The following documents are attached to this Agreement as exhibits hereto:
Exhibit A Legal Description of the Project Area
Exhibit B Development Approvals
Exhibit C The Road Improvements
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2. GENERAL PROVISIONS.
2.1 City Approval Date/Effective Date. Following the City Approval Date, the City shall submit an application to the Monterey County Local Formation Commission (“LAFCo”) requesting that LAFCo approve the City’s request for Annexation of the Project Area into city limits (the “Application for Annexation”). Provided LAFCo approves the Application for Annexation, the Agreement shall become effective on the Effective Date. Any and all references to obligations related to a certain date shall run from the Effective Date. In the event LAFCo denies the Application for Annexation or fails to act within two (2) years of the City Approval Date, this Agreement shall never become effective and shall be null and void.
2.2 Binding Effect of Agreement. This Agreement shall become a covenant running with the land and binding on the City and Master Developer as of the Effective Date.
2.3 Ownership of the Project Area. Master Developer represents and covenants that it holds an equitable interest in the Project Area.
2.4 Term. Notwithstanding any other provision of this Agreement, the term of this Agreement shall commence on the Effective Date and shall continue for a period of twenty (20) years thereafter (the “Term”), unless sooner terminated or extended as hereinafter provided.
2.4.1 Extensions. Master Developer may submit two (2) requests to extend the Term by five (5) years each by providing the City with a written request no later than sixty (60) days prior to expiration of the Term. Prior to expiration of the Term, the Council shall consider the Master Developer’s request for an extension during a public meeting, at which Master Developer shall be provided the opportunity to present the reasoning and supporting documentation for the request. The Council may grant Master Developer’s request for each request for an extension of the Term if the Council finds that Master Developer is not in default under this Agreement and that Master Developer has demonstrated efforts to advance and construct the Project, including but not limited to the number of applications for grading or building permits, any marketing materials, and any other evidence that Master Developer is diligently pursuing the Project. The Council may consider market conditions in determining whether to grant any extension.
2.4.2 Effect of an Extension of the Term. An extension of the Term of this Agreement pursuant to the foregoing provisions shall not be deemed an amendment of this Agreement.
2.4.3 Tolling. If any litigation affecting the Project Area is filed challenging any of the Development Approvals or this Agreement (including but not limited to any environmental determinations relating to any of the foregoing), or otherwise raising issues of the validity of the Development Approvals or the valid or binding nature of this Agreement, the Term of this Agreement, as the same may be extended pursuant to Section 2.4.1 above, shall be extended for the period of time such litigation is pending, and upon the conclusion of such litigation by dismissal or final entry of judgment, Master Developer and the City shall record notice to such effect; provided, however, and subject to Section 11.3 below, if such litigation results in a final determination of invalidity of any such actions, the City may terminate this Agreement to the extent necessary to comply with any such final determination.
2.4.4 Reasonable Estimate. The Term has been established by the parties as a reasonable estimate of the time required to implement the necessary requirements of the Development Approvals and to obtain the public benefits of this Agreement. The City finds that a term of such duration is reasonably necessary to assure the City of the realization of the public benefits _____ City _____ Master Developer Page 6 of 46
from the Project, particularly, but not limited to Development of affordable housing, the public facilities, educational facilities, and major infrastructure elements of the Project as set forth in the Specific Plan. In establishing and agreeing to such Term, the City has determined that the Development Approvals and this Agreement incorporate sufficient provisions to permit the City to monitor adequately and respond to changing circumstances and conditions in undertaking actions to carry out the Development Approvals, the Specific Plan, and this Agreement.
2.4.5 Effect of Expiration. Expiration of the Term shall not affect any rights of the Master Developer and Owners arising from the Development Approvals.
2.4.5.1 If any tentative map, final map, or parcel map heretofore or hereafter approved in connection with Development of the Project Area is a vesting map under the Subdivision Map Act, and this Agreement is determined by a final judgment to be invalid or unenforceable insofar as it grants a Vested right to develop to an Owner, then and to the extent the rights and protections afforded such Owner under the laws and Ordinances applicable to vesting maps shall supersede the provisions of this Agreement.
2.4.5.2 Pursuant to California Government Code §66452.6(a), the term of tentative maps, final maps, parcel maps, or any re-subdivision or amendment to the tentative maps or final maps (including any lot line adjustment or merger of lots within the tentative maps or final maps) for the Project Area, or any part thereof, or any other tentative maps or parcel maps filed subsequent to the City Approval Date of this Agreement shall automatically be extended for the Term of this Agreement.
2.5 Assignment. No sale or transfer of the Project Area or any portion thereof shall require an amendment to this Agreement when performed in accordance with the provisions of this Agreement.
2.5.1 Assignment. Neither Master Developer nor any Owner shall have an obligation to seek the consent of the City Manager or the Council prior to assigning, transferring, or selling any portion of the Project Area. Within sixty (60) days of any such assignment, transfer, or sale of any portion of the Project Area, Master Developer or the Owner shall deliver to the City Manager a written assignment and assumption agreement (“Assignment Agreement”) fully executed by Master Developer or the Owner, and the buyer, whereby buyer assumes those obligations of Master Developer or the Owner identified in the Assignment Agreement relating to that portion of the Project Area acquired by buyer. The Assignment Agreement shall identify not only that portion of the Project Area acquired by the buyer, but the total number of residential dwelling units and/or commercial square footage assigned to the buyer.
Upon delivery of the Assignment Agreement to the City Manager, Master Developer or the Owner shall be relieved of the terms and conditions of this Agreement as they relate to that portion of the Project Area transferred to buyer by Master Developer or the Owner, except as otherwise set forth in the Assignment Agreement.
2.5.2 Release of Purchaser or Transferee of a Residential or Commercial Lot. A purchaser or transferee of a parcel or lot which has been finally subdivided and improved and for which a certificate of occupancy has been granted by the City shall be released from the obligations under this Agreement. The City Manager shall, upon written request made by Master Developer or an Owner to the City Manager, determine if the Agreement has been terminated with respect to any parcel or lot within the Project Area, and shall not unreasonably withhold, condition, or delay termination as to that lot or parcel. Upon termination of this Agreement _____ City _____ Master Developer Page 7 of 46
as to any lot or parcel, the City Manager shall upon Master Developer’s or an Owner’s request record a notice of termination that the Agreement has been terminated as to that parcel or lot within the Property. The aforesaid notice may specify, and Master Developer and each Owner agrees, that termination shall not affect in any manner any continuing obligation to pay any item specified by this Agreement. Termination of this Agreement as to any parcel or lot within the Property shall not affect Master Developer’s or any Owner’s rights or obligations under any of the Development Approvals, including but not limited to, the General Plan, Specific Plan, Existing Land Use Regulations and Ordinances, and all other City policies, regulations, and ordinances applicable to the Project Area. City may charge all costs for the preparation and recordation of any notices of termination requested by Master Developer or an Owner.
3. AMENDMENT.
3.1 Amendment of this Agreement. This Agreement may be amended or canceled in whole or in part from time to time by the mutual written agreement of the City and Master Developer.
3.1.1 Notice and Public Hearing Requirements. Prior to amending or cancelling this Agreement, in whole or in part, the City shall provide the notice and/or conduct a public hearing required pursuant to California Government Code §65868. Such amendment shall be approved by City ordinance. Notwithstanding the foregoing, no public notice or hearing shall be required for any amendment which does not substantially affect (i) the Term of this Agreement, (ii) permitted uses of the Project Area, (iii) provisions for the reservation or dedication of land, (iv) the density or intensity of use of the Project Area, (v) the maximum height or size of proposed structures, or (vi) any conditions, terms, restriction and requirements relating to subsequent discretionary actions relating to design, improvement, construction standards and specifications, improvement and construction standards, or any other condition or covenant relating to the use of the Project Area.
3.1.2 Amendment to the Development Approvals. No amendment to this Agreement shall be required as the result of any amendment to the Development Approvals as long as any such amendment is consistent with this Agreement. All Subsequent Development Approvals shall be automatically incorporated into this Agreement, shall be deemed Vested upon approval, and shall be an integral part hereof.
3.1.3 Conditions of Approval. The City shall not impose as a condition to any amendment to this Agreement, any new Development Exaction or other imposition not otherwise permitted under this Agreement, except to the extent the amendment will directly result in new burdens or impacts requiring additional mitigation or insofar as the amendment results in new or additional unmitigated significant environmental impacts.
3.2 Interpretation. The Parties acknowledge that this Agreement, like all agreements, may be subject to interpretation. This Agreement is the product of mutual negotiations and participation by both the City and Master Developer (each a “Party” and collectively, the “Parties”). For purposes of construing the meaning or effect of this Agreement, or any portion hereof, it shall be presumed this Agreement was drafted by both Parties and not as if it had been prepared by one Party or the other. Each Party to this Agreement specifically acknowledges that it had sufficient opportunity to review the Agreement, confer with its separate legal counsel regarding the meaning of this Agreement and any provision contained herein, and negotiate revisions to this Agreement. Notwithstanding the foregoing, the City Manager (with the advice and consent of the City Attorney’s office) may issue written interpretations of this Agreement. A copy of any such written interpretation shall be given to _____ City _____ Master Developer Page 8 of 46
Master Developer and any Owners. If Master Developer or any Owners disagrees with any such interpretation, Master Developer and/or any Owner may appeal that interpretation to the Planning Commission by means of a notice in writing delivered to the Planning Commission within thirty (30) days of receipt of the City’s Manager’s interpretation which notice shall specify the basis of the disagreement with the interpretation. The Planning Commission shall, within thirty (30) days after receipt of the written appeal of the interpretation, hold a hearing at which the City Manager’s interpretation will be reviewed. The Planning Commission shall then determine, within thirty (30) days after completion of the hearing, whether the Planning Commission agrees with the interpretation or if it deems it appropriate to modify or withdraw the interpretation of the City Manager. Either party may appeal the decision of the Planning Commission to the Council, which shall follow the Planning Commission process set forth above in reviewing any appeal to a Planning Commission decision. The decision of the Council as to an interpretation shall be considered a final determination of the issue and, therefore, an exhaustion of administrative remedies.
3.3 Termination. This Agreement shall be deemed terminated and of no further effect upon the occurrence of any of the following events:
3.3.1 Expiration of the stated Term of this Agreement, including all extensions of the same permitted pursuant to Section 2.4 of this Agreement;
3.3.2 Entry of a final judgment by a court of competent jurisdiction setting aside, voiding, or annulling the adoption of the Enacting Ordinance approving this Agreement; provided, however, that so long as the judgment of any such court is on appeal to a higher court, this Agreement shall remain in full force and effect;
3.3.3 Except as provided in Section 4.6.2 below, the adoption of a referendum measure overriding or repealing the Enacting Ordinance approving this Agreement;
3.3.4 Completion of the Project in accordance with the terms of this Agreement including issuance of all required certificates of occupancy and acceptance by the City or applicable public agency of all required dedications;
3.3.5 Master Developer elects not to acquire any portion of the Project Area; or
3.3.6 Cancellation pursuant to a Non-Compliance Finding, all as more particularly set forth in Section 8.4 below.
As allowed by law, termination of this Agreement shall not constitute termination of any Development Approvals effective as of the date of termination. Upon the termination of this Agreement, no party shall have any further right or obligation hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination or with respect to obligations which expressly survive termination of this Agreement.
3.4 Notices. All notices, demands and correspondence required or provided for under this Agreement shall be in writing and delivered via email (followed by another method of delivery), in person, or dispatched by overnight delivery, certified mail, postage prepaid. Notice required to be given to the City shall be addressed as follows:
City of Gonzales
P.O. Box 647
147 Fourth St.
Gonzales, CA 93926
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Attn: City Manager
[email protected]
(831) 675-5000
With a copy to:
Jarvis Fay LLP
555 12th St., Suite 1630
Oakland, CA 94607
Attn: City Attorney for the City of Gonzales
[email protected]
(510) 238-1400
Notices required or provided for under this Agreement to be given to Master Developer shall be addressed as follows:
Cielo Grande Ranch, LLC
305 Vineyard Town Center #295
Morgan Hill, CA 95037
Attn: Manager
[email protected]
(408) 210-3190
With a copy to:
Hardt Mason Law
1145 Teresa Lane
Morgan Hill, CA 95037
Attn: Katharine Hardt-Mason
[email protected]
(408) 373-3770
A Party may change its address by giving notice in writing to the other Party. In the event the City or Master Developer retains different counsel, the Party retaining different counsel shall provide notice thereof to the other Party. Thereafter, notices, demands, and other pertinent correspondence shall be addressed and transmitted to the new address.
3.5 Applicable Law: Except as otherwise provided herein, the rules, regulations, official policies, standards, and specifications applicable to the Project shall be the Existing Land Use Regulations and Ordinances, and those set forth in this Agreement and the Development Approvals. With respect to matters not addressed by this Agreement or the Development Approvals, those rules, regulations, official policies, standards and specifications (including Ordinances and resolutions) governing permitted uses, building locations, timing of construction, densities, design, heights, fees, exactions, and taxes in force and effect on the Effective Date of this Agreement, as long as such rules are consistent with this Agreement, the Development Approvals, and the Project, shall be applicable to the Project.
3.6 Conflict of City and State or Federal Laws: As provided in California Government Code §65869.5, this Agreement shall not preclude the application to the Project of changes in laws, regulations, plans or policies, to the extent that such changes are specifically mandated and required by changes in state or federal laws or regulations (“Changes in Law”). In the event Changes in Law prevent or preclude _____ City _____ Master Developer Page 10 of 46
compliance with one or more provisions of this Agreement and provided the terms and conditions set forth in Section 11.3 below can be met, such provisions of the Agreement shall be modified or suspended, or performance thereof delayed, as may be necessary to comply with Changes in Law, and City and Master Developer shall take such action as may be required pursuant to this Agreement. City shall cooperate with Master Developer and the Owners in the securing of any permits or approvals that may be required as a result of such modification or suspensions.
3.7 Hold Harmless Agreement. Throughout the Term of this Agreement, Master Developer and each successor Owner shall indemnify, defend, and hold the City and the City’s elected and appointed officials, officers, agents, employees, contractors, consultants, and other third parties retained by the City (the “City Parties”) harmless from any and all claims, actions, or proceedings against the City or City Parties to challenge, attack, set aside, void, or annul this Agreement and/or any approval by the City concerning the Project, including any challenges to the Environmental Impact Report, associated environmental review, and for any and all costs, attorneys fees, and/or damages arising therefrom, and from any and all claims, liability, and damages of any kind, including but not limited to personal injury or property damage, which may arise from the performance, failure to perform, or operations of Master Developer and each successor Owner, and all contractors, subcontractors, agents, or employees of Master Developer and each successor Owner under this Agreement, whether such operations be by Master Developer, a successor Owner, or by any of the contractors, subcontractors, or any one or more persons directly or indirectly employed by, or acting as agent for Master Developer or a successor Owner, except to the extent of any liability for damage which may arise from the negligence or willful misconduct of the City or the City Parties. The City reserves the right to participate in the defense and may recover its own reasonable attorney fees, court costs, and staff costs from Master Developer or such successor Owners of all or any portion of the Project Area. However, Master Developer or any such successor Owners of all or any portion of the Project Area may at any time elect to abandon the benefits of this Agreement, or any part thereof that is the subject of a legal challenge, and upon such abandonment, the party abandoning the benefits of this Agreement shall have no further obligation to defend or indemnify the City for its defense beyond costs incurred up to and including the date of abandonment should the City elect to continue to litigate the particular issue. The preceding sentence shall in no way limit Master Developer’s and each successor Owner’s indemnity obligations for liability or damages of any kind as otherwise provided in this Section 3.7.
4. USE AND DEVELOPMENT OF THE PROPERTY.
4.1 Use of the Project Area. Subject to the terms of this Agreement, including the Reservations of Authority set forth in Section 4.6 below, the Project Area shall be used and developed only for those uses set forth in the Development Approvals, and for such other uses that may be mutually agreed upon by the parties hereto, whether as a result of amendments to this Agreement or amendments to the Development Approvals.
4.2 Right to Develop. Subject to the terms of this Agreement, including the Reservations of Authority, Master Developer and the Owner(s) shall have the Vested right to develop the Project Area in accordance with the development plan set forth in the Specific Plan as it appeared on the City Approval Date, which permits the construction of up to 3,498 residential dwelling units and up to 96,000 square feet of commercial space, all as more particularly set forth in the Specific Plan.
Notwithstanding the foregoing, the City and Master Developer may modify the development plan set forth in the Specific Plan, including an increase in the number of residential dwelling units and total square feet of commercial space as set forth below, provided any such actions comply with the Land Use Regulations and Ordinances.
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4.2.1 The 3,498 residential dwelling units identified in the Specific Plan are intended for the uses and at the zoning densities set forth in the Specific Plan. Each Assignment Agreement between Master Developer and an Owner shall indicate the number of dwelling units and/or commercial square footage included with the sale of the property identified in the Assignment Agreement. Within thirty (30) days of any application, or amendment of any application, made by an Owner for development of any portion of the Project Area, the City shall notify Master Developer in writing if the number of dwelling units or commercial square footage identified on an Assignment Agreement are increased or decreased by the Owner, the total of which shall be added to or subtracted from the remaining number of dwelling units or commercial square footage within the Project Area which are available for Master Developer to assign to an Owner. The Parties agree that the construction of accessory dwelling units shall not count against the total number of residential dwelling units identified in the development plan set forth in the Specific Plan and as permitted by this Agreement.
4.2.2 The Temporary 200 ft Ag Buffers set forth on the development plan in the Specific Plan are intended to serve as buffers between new residential development and existing agricultural uses adjacent to the Project Area. For the purposes of this Section 4.2.2, “agricultural uses” shall mean those uses set forth in Section 12.08.020 of the City Code. In the event the agricultural uses adjacent to a Temporary 200 ft Ag Buffer are (i) modified to consist of wholly one or more uses that are not agricultural uses, or (ii) terminated, Master Developer shall have the right to request either residential or commercial development of the Temporary 200 ft Ag Buffer provided that any such development complies with the Land Use Regulations and Ordinances and this Agreement. Notwithstanding the limitations on use of the Temporary 200 ft Ag Buffers, the Parties hereby acknowledge that the County Agricultural Commissioner has approved use of a portion of the Temporary 200 ft Ag Buffers adjacent to Block 6 for a parking lot.
4.2.3 The Educational Sites set forth on the development plan in the Specific Plan have been set aside for educational purposes. If entities responsible for educational purposes elect not to use the Educational Sites, Master Developer shall have the right to request and the City shall cooperate in planning for and considering approval of either residential or commercial development of the Educational Site(s), subject to compliance with the Land Use Regulations and Ordinances and this Agreement.
4.3 Maximum Height. The maximum height and size of structures to be constructed within the Project Area shall be governed by the Specific Plan.
4.4 Development of the Project Area. Subsequent Development Approvals necessary to develop the Project, including amendments to Development Approvals, shall be reviewed for approval by the City in accordance with the Specific Plan, the Existing Land Use Regulations and Ordinances, and any restrictions or other limitations set forth in this Agreement. Once the City has approved a tentative map and associated improvement plan for any part of the Project Area, prior to recordation of the final map for such subdivision or portion thereof, the City may issue permits for grading and construction of infrastructure, and may at its discretion issue building permits for construction of residential dwelling units, for the relevant area at the subdivider’s risk prior to recordation of the final map.
4.4.1 To maintain the integrity of the Project consistent with the Specific Plan during development of the Project Area, Master Developer shall include in all contracts for sale or transfer of any portion of the Project Area to an Owner the obligation of the Owner to seek _____ City _____ Master Developer Page 12 of 46
and obtain Master Developer’s approval of all tentative maps, site development plans, improvement plans, and architectural plans, including landscape plans, related to development of that portion of the Project transferred to an Owner prior to submission or modification of the same (each an “Owner Application”) to the City. Concurrent with submission of each Owner Application to the City, the Owner shall submit written approval of the Owner Application by Master Developer.
4.4.2 All Owners shall cooperate with Master Developer and all other Owners in coordinating the construction and installation of infrastructure improvements, including without limitation the alignment of roads and installation of utilities. To the extent necessary, Master Developer and each Owner shall grant a license for temporary use of an Owner’s property for the purpose of constructing and installing all improvements necessary for another Owner’s property.
4.4.3 Nothing in this Section 4.4 shall be construed to place an affirmative obligation on the City to provide Master Developer or Owners with any maps or application materials or otherwise obligate the City to take any action whatsoever.
4.5 No Additional Reservations or Dedications of Land for Public Purposes. The terms and conditions set forth in Section 6.1 of the Specific Plan shall control with regard to additional reservations and dedications of land, except to the extent that Master Developer may transfer Block 6 and Block 25 to the City, all as more particularly set forth in Section 4.9.1 and Section 4.9.3 below.
4.6 Reservations of Authority.
4.6.1 Limitations, Reservations and Exceptions. Notwithstanding the intent of the Parties to enable Master Developer and the Owners of the Project Area to develop the Project Area in accordance with the Development Approvals and the Existing Land Use Regulations and Ordinances, to the extent legally permissible, and notwithstanding any other provision of this Agreement, the City and Master Developer acknowledge and agree that the following Subsequent Land Use Regulations and Ordinances shall apply to the Development of the Project Area:
4.6.1.1 Processing, inspection and similar fees and charges imposed by the City to cover the estimated actual costs to the City of processing applications for Development Approvals or for monitoring compliance with any Development Approvals granted or issued;
4.6.1.2 Except as otherwise set forth in this Agreement, procedural regulations relating to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure;
4.6.1.3 Regulations governing construction standards and specifications, including without limitation, the City’s adopted Building Code, Plumbing Code, Mechanical Code, Electrical Code, Fire Code and Grading Code; and
4.6.1.4 Regulations which may be in conflict with the Existing Land Use Regulations and Ordinances, but which are reasonably necessary to protect the public health, safety, and welfare. To the extent possible, any such regulations shall be applied and construed so as to provide Master Developer with the rights and assurances provided under this Agreement.
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4.6.2 Development Control Limitations. To the extent allowed by law, no other land use regulations, rules, or policies enacted or adopted subsequent to the City Approval Date of this Agreement, whether enacted by action of the City or by initiative, referendum or otherwise, including, without limitation, those which limit or restrict the rate, timing, or sequencing of development of the Project, affordable housing, or any inclusionary housing ordinance (collectively, “Development Control Limitations”) shall apply to the Project. The City agrees to cooperate with Master Developer and the Owners of the Project Area in a reasonable manner in order to keep this Agreement in full force and effect notwithstanding any such Development Control Limitations.
4.6.3 Intent. The Parties acknowledge and agree that the City is restricted in its authority to limit its police power by contract and that the foregoing limitations, reservations and exceptions are intended to reserve to the City all of its police power which cannot be so limited in accordance with California Government Code §65866 and §65869.5. This Agreement shall be construed, contrary to its stated terms if necessary, to reserve to the City all such power and authority which cannot be restricted by contract.
4.7 Provision of Real Property Area Interests by City. In any instance where Master Developer or an Owner is required to construct any public improvement on land not owned by Master Developer or such Owner, Master Developer or the Owner shall, at its sole cost and expense, use reasonable efforts to provide or cause to be provided, the real property interests necessary for the construction of such public improvements. In the event Master Developer or the Owner is unable after exercising reasonable efforts, including, but not limited to, the rights under California Civil Code §§1001 and 1002, to acquire the real property interests necessary for the construction of such public improvements, if requested by Master Developer or the Owner and upon Master Developer’s or the Owner’s provision of adequate security for costs the City may reasonably incur, the City may negotiate the purchase of the necessary real property interests to allow Master Developer or such Owner to construct the public improvements as required by this Agreement or the Development Approvals, and/or, in accordance with the procedures established by law, the City may use its power of eminent domain to acquire such required real property interests, in City’s sole discretion and without any obligation to purchase or acquire by eminent domain any real property interest. Master Developer or the Owner shall pay all costs associated with such acquisition or condemnation proceedings. This Section 4.7 is not intended by the Parties to impose upon Master Developer or any Owner an enforceable duty to acquire land or construct any public improvements on land not owned by Master Developer or an Owner, except to the extent that Master Developer or such Owner elects to proceed with Development of the Project, and then only in accordance with valid conditions imposed by the City upon the Development of the Project under the Subdivision Map Act or other legal authority. The requirement for such nonowned or off-site improvements may be waived by the City at its sole discretion. However, in accordance with California Government Code §66462.5,
(a) A city, county, or city and county shall not postpone or refuse approval of a final map because the subdivider has failed to meet a tentative map condition which requires the subdivider to construct or install offsite improvements on land in which neither the subdivider nor the local agency has sufficient title or interest, including an easement or license, at the time the final map is filed with the local agency, to permit the improvements to be made. In such cases, unless the city, county, or city and county requires the subdivider to enter into an agreement pursuant to subdivision (c), the city, county or city and county shall, within 120 days of the filing of the final map, pursuant to Section 66457, acquire by negotiation or commence proceedings pursuant to Title 7 (commencing with Section 1230.010) of Part 3 of the Code of Civil Procedure to acquire _____ City _____ Master Developer Page 14 of 46
an interest in the land which will permit the improvements to be made, including proceedings for immediate possession of the property under Article 3 (commencing with Section 1255.410) of Chapter 6 of that title.
(b) If a city, county, or city and county has not required the subdivider to enter into an agreement pursuant to subdivision (c) and if a city, county, or city and county fails to meet the 120-day time limitation, the condition for construction of offsite improvements shall be conclusively deemed to be waived. The waiver shall occur whether or not the city, county, or city and county has postponed or refused approval of the final map pursuant to subdivision (a). (c) Prior to approval of the final map the city, county, or city and county may require the subdivider to enter into an agreement to complete the improvements pursuant to Section 66462 at such time as the city, county, or city and county acquires an interest in the land that will permit the improvements to be made.
The Parties agree that should Master Developer or any Owner seek approval of a final map prior to completion of any offsite improvements as described in Government Code section 66462.5, subdivision (a), this Agreement shall constitute an agreement to complete such improvements as contemplated in Government Code section 66462.5, subdivision (c), as described above.
4.8 Regulation by Other Public Agencies. It is acknowledged by the Parties that other public agencies not within the control of the City possess authority to regulate aspects of the Development of the Project separately or jointly with the City and this Agreement does not limit the authority of such other public agencies. Notwithstanding the foregoing, the City agrees that it shall assist Master Developer and all Owners in obtaining those approvals necessary to develop the Project Area.
4.9 Owner Affordable Housing Obligations. The Parties agree that the development of the Project shall include or promote affordable housing consistent with the requirements of this Section
4.9. 4.9.1 Block 6. The Parties do hereby agree that Block 6 is intended for and shall be used for the construction of affordable homes thereon.
4.9.1.1 Master Developer shall request that LAFCo incorporate the area known as Block 6, an approximately 10-acre site, into City limits in its first incorporation request.
4.9.1.2 Within one (1) year of acquiring title to Block 6, Master Developer shall record a parcel/final map for Block 6 and use its best efforts, with the City’s cooperation, to reach a binding agreement for donation of Block 6 to a qualified affordable housing developer approved by the City (the “Block 6 Donation Agreement”), a copy of which shall be delivered to the City within ten (10) days of full execution thereof. The Block 6 Donation Agreement shall include assignment to the affordable housing builder of a total of 211 affordable units, including both Low Income Housing Units and Very Low Income Housing Units.
4.9.1.3 If Master Developer does not deliver the Block 6 Donation Agreement to the City within one (1) year of Master Developer acquiring title to Block 6, Master Developer shall execute an irrevocable offer of dedication offering to transfer Block 6 to the City and assign a combined total of 211 Low Income Housing Units and Very Low Income Housing Units, which offer shall remain open for one (1) year. The City shall have the right, but not the obligation, to accept such offer. In the event the City accepts the offer and Master Developer transfers Block 6 to the City, (i) this Agreement shall become null and void as to the transferred Block 6, except as to the _____ City _____ Master Developer Page 15 of 46
Parties’ obligations related to Block 6 Infrastructure in Section 4.9.2 below, and (ii) the City shall provide Master Developer notice of any application for development of Block 6 within thirty (30) days of receipt thereof. Master Developer shall have the right to comment on and object to any application for development of Block 6 which does not comply with the Specific Plan, including the design guidelines. The City shall make a good faith effort to address any of Master Developer’s comments or objections to any plan for development of Block 6.
4.9.1.4 In the event the Block 6 Donation Agreement is terminated for any reason or the City elects not to accept dedication of Block 6 pursuant to Section 4.9.1.3 above, for the period of one (1) year from the date the Block 6 Donation Agreement is terminated or the date the City elects not to accept dedication of Block 6 pursuant to Section 4.9.1.3 above, Master Developer shall use its best efforts to enter into a new Block 6 Donation Agreement with a qualified affordable housing builder. If Master Developer is unable to enter into a Block 6 Donation Agreement with a qualified affordable housing building within one (1) year of the date the Block 6 Donation Agreement is terminated or the City elects not to accept dedication of Block 6 pursuant to Section 4.9.1.3 above, within thirty (30) days of expiration of Master Developer’s obligations set forth in this Section 4.9.1.4, Master Developer shall deliver a Block 6 grant deed to the City, transfer of which shall be subject to the terms and conditions set forth in Section 4.9.1.3 above.
4.9.2 Block 6 Infrastructure and Utilities. Master Developer shall be responsible for including in any agreement for development of Block 2 or Block 3, whichever is developed first, the obligation of the Owner thereof to construct the Gabilan Promenade from the Project entrance at Fanoe Road to the northeast corner of Lot M, the proposed public park immediately adjacent to Block 6. Construction of the Gabilan Promenade shall include all infrastructure and utilities necessary to develop Block 6 including but not limited to roads, water, wastewater, stormwater, fiber optic pipes and lines, and related utilities (“Block 6 Infrastructure”). The last building permit for Block 2 or Block 3 (as shown on the Santa Lucia Neighborhood Phase I Tentative Map), shall include all such Block 6 Infrastructure or, alternatively, the Block 6 Infrastructure shall be completed by the issuance of the last Certificate of Occupancy for Block 2 or Block 3, whichever is completed first.
4.9.3 Block 25. The Parties do hereby agree that Block 25 is intended for and shall be used for the construction of affordable homes thereon.
4.9.3.1 Within one (1) year of acquiring title to Block 25, Master Developer shall record a parcel/final map for Block 25 and use its best efforts, with the City’s assistance, to reach a binding agreement for donation of Block 25 to a qualified affordable housing developer approved by the City (the “Block 25 Donation Agreement”), a copy of which shall be delivered to the City within ten (10) days of full execution thereof. The Block 25 Donation Agreement shall include assignment to the affordable housing builder of a combined 211 Low Income Housing Units and Very Low Income Housing Units.
4.9.3.2 If Master Developer does not deliver the Block 25 Donation Agreement to the City within one (1) year of Master Developer acquiring title to Block 25, Master Developer shall execute an irrevocable offer of dedication offering to transfer Block 25 to the City and assign a combined total of 211 Low Income Housing Units and _____ City _____ Master Developer Page 16 of 46
Very Low Income Housing Units, which offer shall remain open for one (1) year. The City shall have the right, but not the obligation, to accept such offer. In the event the City accepts the offer and Master Developer transfers Block 25 to the City, (i) this Agreement shall become null and void as to the transferred Block 25, and (ii) the City shall provide Master Developer notice of any application for development of Block 25 within thirty (30) days of receipt thereof. Master Developer shall have the right to comment on and object to any application for development of Block 25 which does not comply with the Specific Plan, including the design guidelines. The City shall make a good faith effort to address any of Master Developer’s comments or objections to any plan for development of Block 25.
4.9.3.3 In the event the Block 25 Donation Agreement is terminated for any reason or the City elects not to accept dedication of Block 25 pursuant to Section 4.9.3.2 above, for the period of one (1) year from the date the Block 25 Donation Agreement is terminated or the date the City elects not to accept dedication of Block 25 pursuant to Section 4.9.3.2 above, Master Developer shall use its best efforts to enter into a new Block 25 Donation Agreement with a qualified affordable housing builder. If Master Developer is unable to enter into a Block 25 Donation Agreement with a qualified affordable housing building within one (1) year of the date the Block 25 Donation Agreement is terminated or the City elects not to accept dedication of Block 25 pursuant to Section 4.9.3.2 above, within thirty (30) days of expiration of Master Developer’s obligations set forth in this Section 4.9.3.3, Master Developer shall deliver a Block 25 grant deed to the City, transfer of which shall be subject to the terms and conditions set forth in Section 4.9.3.2 above.
4.9.4 Block 3. Master Developer shall set aside thirty (30) lots in Block 3 for the purpose of offering these thirty (30) lots (the “Block 3 Self Help Lots”) for sale at market rate to a “self-help” builder participating in a program that allows future residents to participate in building their own homes or other participants’ homes, commonly known as a “sweat equity” program. Prior to processing the Block 3 final map, Master Developer and the City shall meet and discuss the location of the Block 3 Self Help Lots, it being the preference of Master Developer that the Block 3 Self Help Lots be in a single location. Notwithstanding the foregoing, Master Developer shall consider dividing and placing the Block 3 Self Help Lots in more than one (1) location if requested by a “self-help” builder engaged in discussions for development of the Block 3 Self Help Lots. Master Developer shall cooperate with City to market the Block 3 Self Help Lots for three (3) years from the date of approval of the Block 3 final map (the “Block 3 Self Help Term”). Upon expiration of the Block 3 Self Help Term, if the Block 3 Self Help Lots, or any portion thereof, have not been conveyed to any such selfhelp builder, Master Developer shall have the right to sell and convey the Block 3 Self Help Lots, or any portion thereof, to a market rate builder.
4.9.5 Block 20. Master Developer shall set aside nineteen (19) lots in Block 20 for the purpose of offering these nineteen (19) lots (the “Block 20 Self Help Lots”) for sale at market rate to a “self-help” builder participating in a program that allows future residents to participate in building their own homes or other participants’ homes, commonly known as a “sweat equity” program. Prior to processing the Block 20 final map, Master Developer and the City shall meet and discuss the location of the Block 20 Self Help Lots, it being the preference of Master Developer that the Block 20 Self Help Lots be in a single location. Notwithstanding the foregoing, Master Developer shall consider dividing and placing the Block 20 Self Help _____ City _____ Master Developer Page 17 of 46
Lots in more than one (1) location if requested by a “self-help” builder engaged in discussion for development of the Block 20 Self Help Lots. Master Developer shall cooperate with City to market the Block 20 Self Help Lots for three (3) years from the date of approval of the Block 20 final map (the “Block 20 Self Help Term”). Upon expiration of the Block 20 Self Help Term, if the Block 20 Self Help Lots, or any portion thereof, have not been conveyed to any such self-help builder, Master Developer shall have the right to sell and convey the Block 3 Self Help Lots, or any portion thereof, to a market rate builder.
4.9.6 Block 4. The Block 4 final map must consist of at least 169 single family lots, as the Parties recognize that this number of lots will ensure lot sizes generally suitable for residential units that could be marketed to moderate income and market rate households.
4.9.7 Gabilan Neighborhood Medium/Medium High Density Blocks. Two blocks within the Gabilan Neighborhood zoned for medium or medium high density must include lots that are generally between 3,000 and 4,000 square feet as the Parties recognize that such lots will generally be suitable for residential units that could be marketed to moderate income and market rate households.
4.9.8 Affordable Housing Agreement. The Owner of Block 6 and the Owner of Block 25 must execute an Affordable Housing Agreement with the City for any affordable housing units constructed on Block 6 and Block 25. The Affordable Housing Agreements shall require, at minimum, a homebuyer education program; a targeted marketing campaign to alert households which are eligible for affordable housing units; preparation of a list, to be maintained by the City, of households which are interested in affordable housing; a prequalification program offered by a qualified bank/mortgage broker; and agreement by the Owner of Block 6 and the Owner of Block 25 to fund the staff of third party services required for the City to administer and oversee the affordable housing units to be constructed on Block 6 and Block 25.
4.9.10 Other Obligations for Residential Development.
4.9.10.1 Block 7. Master Developer shall include Block 7 in its second request to LAFCO for incorporation. Block 7 shall include a minimum of 218 multifamily “for rent” and/or “for sale” market rate residential units.
4.9.10.2 Block 8. Master Developer shall include Block 8 in its second request to LAFCO for incorporation.
5. CITY DEVELOPMENT IMPACT FEES, TAMC FEES, AGRICULTURAL MITIGATION, GUSD FEES, AND VISTA LUCIA COMMUNITY CONTRIBUTION.
5.1 City Development Impact Fees, TAMC fees, Agricultural Mitigation, GUSD Fee, and Community Improvement Contribution - Intent of the Parties. Except as set forth in Section 5.7.2 below, Master Developer and the Owners shall only be responsible for (i) the payment of the development impact fees set forth in Section 5.2 below, as increased or decreased as set forth in Section 5.2.3 below (the “City Development Impact Fees”), the TAMC Fees identified in Section
5.3 below, the school impact fees assessed by Gonzales Unified School District (the “GUSD Fees”), and the Community Improvement Contribution identified in Section 5.5 below, and (ii) compliance with the LAFCo Ag. Policy identified in Section 5.4 below. The parties hereby acknowledge and agree that (i) the City Development Impact Fees are the same as the Future Growth Area development impact fees set forth in the Development Impact Fee Study Update, dated April 5, 2022, prepared by _____ City _____ Master Developer Page 18 of 46
Willdan Financial Services which was approved by the City on June 6, 2022, and set forth in Ordinance No. 2022-133 (the “DIF Study”), a copy of which is available from the City Clerk, (ii) payment of the City Development Impact Fees, the TAMC Fees, the GUSD Fees, and compliance with the LAFCo Ag. Policy (hereinafter defined) are intended to satisfy all fee obligations for Project impacts.
5.2 City Development Impact Fees. As of the Effective Date, the City Development Impact Fees applicable to the Project Area, subject to all citywide development impact fee increases and decreases throughout the Term of this Agreement as more particularly set forth in the City’s Cost of Service Fee Schedule effective each July 1st are the: Circulations System Impact Fee; Sanitary Sewer Facilities Mitigation Fee; Water Facilities Mitigation Fee; Police Capital Facilities Mitigation Fee; Fire Capital Facilities Mitigation Fee; Parkland and Park Facilities Mitigation Fee; and General City Facilities Mitigation Fee.
5.2.1 Payment of the City Development Impact Fees. The following City Development Impact Fees shall be paid to the City prior to issuance of a building permit for each structure within that portion of the Project Area being developed by Master Developer or an Owner:
Circulation System Impact Fee, Sanitary Sewer Facilities Mitigation Fee, and Water Facilities Mitigation Fee. All other City Development Impact Fees shall be paid to the City concurrent with issuance by the City of a certificate of occupancy for each structure within that portion of the Project Area being developed by Master Developer or an Owner. The City may refuse to issue a building permit or a certificate of occupancy for any structure within the Project Area for which the City Development Impact Fees have not been paid as required by this Section 5.2.1.
5.2.2 Credit against the Parkland and Park Facilities Mitigation Fees/Deferral, Decrease, or Waiver of City Development Impact Fees. Master Developer and each Owner shall be entitled to a credit against payment of the Parkland and Park Facilities Mitigation Fees for all public parks constructed and dedicated to the City by Master Developer or an Owner. For example, if a builder constructs a public neighborhood park which, including the cost of the land, exceeds the total Parkland and Park Facilities Mitigation Fees that the builder is required to pay, the builder will not be required to pay any Parkland and Park Facilities Mitigation Fee. In addition to the foregoing, in the event the City elects to defer, decrease, or waive any or all of the City Development Impact Fees for certain types of development (i.e. affordable housing,) the Owner of any development within the Project Area which qualifies for a deferral, decrease, or waiver of any or all of the City Development Impact Fees shall be entitled to the same.
5.2.3 Increases and Decreases to the City Development Impact Fees. The City Development Impact Fees set forth above shall be subject to any and all increases or decreases to the Future Growth Area development impact fees adopted by the City. In the event the City changes the names or purposes of the Future Growth Area development impact fees or reorganizes the Future Growth Area development impact fees in effect as of the Effective Date, the same shall apply to the City Development Impact Fees set forth above. Unless agreed to by Master Developer, the Project Area shall not be subject to new development impact fees outside of the categories set forth in this Section 5.2 which are adopted by the City during the Term of this Agreement, including without limitation any stormwater impact fees.
5.2.4 Use and Availability of the City Development Impact Fees. The City shall have the right to use the City Development Impact Fees for (i) those purposes identified by the City in the DIF Study, as amended or updated from time to time, including for those uses set forth in Section 6 below, and (ii) those obligations set forth in this Agreement and the Development _____ City _____ Master Developer Page 19 of 46
Approvals, capital facilities improvement plans, a specific plan or a general plan, or as otherwise permitted by law. Those projects and facilities identified in the DIF Study which are directly related to development of the Project and the Project Area shall be given priority by the City in determining how to use City Development Impact Fees collected pursuant to this Agreement.
5.3 Regional Transportation Agency for Monterey County (TAMC) RDIF Impact Fees. (the “TAMC RDIF Fees” levied fees can be found at tamcmonterey.org).
5.3.1 Payment of the TAMC RDIF Fees. The TAMC RDIF Fees shall be calculated by the City per the Regional Fee Implementation Guidelines (the “Guidelines”) and paid through the City concurrent with issuance by the City of building permits for each structure within that portion of the Project Area being developed by Master Developer or an Owner. The City may refuse to issue a building permit for any structure within the Project Area for which the TAMC RDIF Fees have not been paid.
5.3.2 Credit against the TAMC RDIF Fees. Master Developer and each Owner shall be entitled to any and all credits against the TAMC RDIF Fees identified in the Guidelines, as amended or updated from time to time at the discretion of the Transportation Agency of Monterey County, subject to the terms and conditions set forth therein.
5.3.3 Increases and Decreases to the TAMC RDIF Fees. The TAMC RDIF Fees shall be subject to the increases or decreases set forth in the Guidelines, as amended from time to time.
5.3.4 Use and Availability of the TAMC RDIF Fees. The TAMC RDIF Fees shall be used only for those purposes set forth in the Guidelines, as amended from time to time.
5.4 Agricultural Mitigation. On April 3, 2023, the City adopted that certain Agricultural Mitigation Resources Ordinance codified as Chapter 12.150 in the City Code. On February 26, 2024, LAFCo adopted that certain Resolution Amending the Commission’s Adopted Policy for Preservation of Open Space and Agricultural Lands (the “LAFCo Ag. Policy”). The Parties have agreed and do hereby agree that Master Developer shall comply with the LAFCo Ag. Policy.
5.5 Community Improvement Contribution. Master Developer has voluntarily offered and hereby agrees to support the beautification of Gonzales through payment of a contribution to be paid by Master Developer or an Owner to the City concurrent with issuance of a certificate of occupancy for each residential structure. Unless stated otherwise in an Assignment Agreement, the Owner identified thereon shall be responsible for the Community Improvement Contribution. The “Community Improvement Contribution” shall be Two Hundred and no/100th Dollars ($200.00) per residential dwelling unit, which sum shall remain constant throughout the Term of the Agreement.
The Community Improvement Contribution may not be increased without the written consent of Master Developer, which consent may be withheld in Master Developer’s sole and absolute discretion.
The City may refuse to issue a certificate of occupancy for any structure within the Project Area for which the Community Improvement Contribution has not been paid. The Community Improvement Contribution shall be deposited in a segregated account and used by the City for public projects throughout the City of Gonzales, such as the planting of trees or landscaping and supporting the improvement of public facilities and infrastructure. The parties hereby agree that the Community Improvement Contribution is not a development impact fee and thus is not subject to any laws, rules, or regulations relating to the payment of development impact fees. Rather, the Community _____ City _____ Master Developer Page 20 of 46
Improvement Contribution has been agreed upon as valid and fair consideration to the City for entering into and approval of this Agreement.
5.6 Right to Object. Notwithstanding anything to the contrary set forth herein, to the extent otherwise allowed by law, Master Developer and the Owners shall have the right to object to or comment on any new development impact fees or agricultural mitigation fees which are proposed by Council during the Term of this Agreement, as well as any new or revised regional traffic impact fees which are proposed by the Transportation Agency of Monterey County during the Term of this Agreement.
5.7 Miscellaneous Fees.
5.7.1 Processing Fees. The City may charge processing fees for land use approvals, building permits, and other similar permits and entitlements which fees are in force and effect on a citywide basis at the time an application is submitted for those permits, except as provided to the contrary in this Agreement. Such fees shall not be increased after submission of the application unless justified by an increase in the estimated reasonable cost to the City for performing the work for which the particular fee is paid and limited to an amount which will compensate the City for the estimated reasonable cost and increases incurred, as permitted pursuant to California Government Code §66104, et seq.
5.7.2 Additional Fees. In addition to payment of the City Development Impact Fees and the TAMC Fees, and compliance with the LAFCo Ag. Policy, the City may collect additional fees or exactions which meet one of the following definitions: (1) they are directly imposed by another governmental agency and the City is required to collect the additional fees; or (2) they are uniformly imposed on all comparable residential or commercial development projects within the City and are required solely to provide capital infrastructure facilities or improvements needed for health and safety reasons as a direct result of the Project and are otherwise consistent with California Government Code §66000 et seq., the General Plan, and the Specific Plan.
5.7.3 New Citywide Taxes and Liens. Except for any agreement for special taxes, and liens, contemplated by this Agreement (see Section 7 below) or the Development Approvals, the City shall not subject the Project Area, or any part thereof, to any special taxes or liens not applicable to the residents of the City as a whole unless approved in accordance with applicable State law by Master Developer and the affected Owners or imposed by a vote of Master Developer and the Owners or electors in the area to be taxed. The City shall give Master Developer and the Owners not less than sixty (60) days’ notice of any City proposal to impose such a special tax or lien, and an opportunity to be heard.
5.7.4 Construction of Public Improvements. Except as set forth in this Agreement, no fees shall be due in connection with the construction of any structure or improvements built on property to be donated or dedicated to the City or any other public or quasi-public entity regardless of who builds any such structure.
6. PUBLIC IMPROVEMENTS AND DEDICATIONS.
6.1 Project Development and Construction of Public Improvements. Master Developer and the Owners shall construct and develop certain public infrastructure improvements within and adjacent to the Project Area in conjunction with the various phases of construction and Development activity on the Project Area, all as more particularly set forth in the Specific Plan. _____ City _____ Master Developer Page 21 of 46
6.2 Phasing. The Project has been designed generally for public infrastructure construction concurrent with residential neighborhood construction and commercial center construction. The phasing, timing, and rate of Development, however, depend on numerous factors that are not within the control of Master Developer or the City. In Pardee Construction Co. v. City of Camarillo (1984) 37 Cal. 3d 465, the California Supreme Court held that a construction company was not exempt from a city’s growth control ordinance notwithstanding that the construction company and the city had entered into a consent judgment (tantamount to a contract under California law) establishing the company’s vested rights to develop its property in accordance with the zoning. The California Supreme Court reached this result on the basis that the consent judgment failed to address the timing of development.
It is the intent of the parties to this Agreement to avoid the result of the Pardee case by acknowledging and providing in this Agreement that Master Developer shall have the Vested right to develop the Project Area in accordance with the terms of this Agreement and those set forth in the Specific Plan relating to construction of public improvements in such order and at such rate and at such time as Master Developer deems appropriate within the exercise of Master Developer’s sole subjective business judgment, notwithstanding the adoption of an initiative after the City Approval Date by the City’s electorate to the contrary or any City moratorium or other similar limitation.
6.3 Infrastructure and Public Facilities to be Constructed by Master Developer or Owners. Master Developer or the Owners (identified as Builders in the Specific Plan) shall be responsible for the construction of the following public and private infrastructure and public facilities, all of which are located within the Project Area: Internal Local Streets and Lanes; Internal Street Lighting and Landscaping; Transit Pullouts and Shelters, Park and Ride Lot; Internal Street Water Supply Mains; Internal Sanitary Sewer Mains; Internal Storm Drainage Mains and Basins; BMPs and Drainage Swales; Neighborhood Park(s), Trails, Promenades, and Agricultural Buffers; Private Parks; and Temporary or Permanent Agricultural Buffers (collectively, the “Project Area Improvements”), all as more particularly set forth in Section 6.5 and Table 6-1 of the Specific Plan, using those funding sources set forth in Section 6.6 and Table 6-1 of the Specific Plan.
6.3.1 Timing of Construction of the Project Area Improvements by Master Developer/Owners. Master Developer or the Owners shall construct the Project Area Improvements associated with each residential and commercial use concurrent with development of the residential and commercial use, provided nothing in this Agreement, the Specific Plan, or the Development Approvals shall prevent Master Developer or the Owners from constructing one or more of the Project Area Improvements for which Master Developer or the Owners are responsible ahead of construction of other Project Area Improvements for which Master Developer or the Owners are responsible (for example, one or more roads or parks may be constructed ahead of development of the adjacent residential neighborhoods to provide access to other non-adjacent neighborhoods within which development may occur or recreation for another residential neighborhood). Each tentative map shall indicate whether any of the Project Area Improvements identified thereon shall be private.
6.3.1.1 Public Infrastructure. The Master Developer and the Owners shall construct the Project Area Improvements necessary to support the development of Block 6 to ensure affordable housing construction is developed in concurrence with the development of the first residential and commercial blocks, all as more specifically set forth in Section 4.9.2 above.
6.3.2 Dedication/Donation. All public Project Area Improvements constructed by Master Developer and/or the Owners shall be dedicated to the City as set forth in Section 6.5 of the _____ City _____ Master Developer Page 22 of 46
Specific Plan and this Section 6.3.2. Except as set forth elsewhere in this Agreement, no consideration shall be due to Master Developer and/or the Owners for any public Project Area Improvements or land underlying those public improvements dedicated, donated, or conveyed to the City pursuant to Section 6.5 of the Specific Plan and this Section 6.3.2.
6.3.2.1 Timing of Dedication/Donation. Upon completion of construction of each public Project Area Improvement, the same shall be conveyed by Master Developer and/or the Owners to the City. Any public Project Area Improvement conveyed to the City shall be subject to a warranty period of one (1) year.
6.3.2.2 Permanent and Temporary Agricultural Buffers. All Permanent Agricultural Buffers shall be dedicated/donated to the City and improved per a Screening Plan, all as more particularly set forth on Page B17 of Appendix B to the Specific Plan under the heading “Agricultural Buffer Areas.” Master Developer shall have the right, at its sole and absolute discretion, to (i) dedicate any Temporary Agricultural Buffer to the City, as set forth in Section 6.3.2.1 above, or (ii) retain any Temporary Agricultural Buffer, provided that said Temporary Agricultural Buffer shall not be used for any purpose other than an agricultural buffer until such time as the agricultural use of the adjacent property is modified or terminated, all as more particularly set forth in Section
4.2.1 above (the “Point of Eligible Use”). At the Point of Eligible Use, Master Developer shall have the right to apply for additional entitlements related to development of the Temporary Agricultural Buffer area.
6.3.2.3 Rolling Agricultural Buffers. In addition to the Permanent Agricultural Buffers and Temporary Agricultural Buffers identified in the Specific Plan, a 200’ agricultural buffer (each, a “Rolling Agricultural Buffer”) is required between those areas of the Project Area being developed and those areas of the Project Area which remain in agricultural production. Master Developer or an Owner shall identify the location of each Rolling Agricultural Buffer concurrent with each development plan.
No agricultural production shall be permitted within a Rolling Agricultural Buffer, the location of which may or may not be on property owned by Master Developer or Owner.
6.4 Infrastructure and Public Facilities to be Constructed by the City. The City shall be responsible for the construction of the following public infrastructure and public facilities whether located within or outside of the Project Area: Water Supply Tank(s); Well(s); Existing Wastewater Treatment Plant Improvements; External Street Sanitary Sewer Mains; Public Safety Facility; and Public Community Parks (collectively, the “City Improvements”), all as more particularly set forth in Section 6.5 and Table 6-1 of the Specific Plan, and subject to the terms and conditions set forth in this Section 6.4.
6.4.1 Timing of Construction of City Improvements. Subject to the discretion provided in Subsection 6.4.1.2., the City shall use its best efforts to construct those City Improvements necessary for the Project to proceed in advance of demand for the same by the Project. All other public improvements for which the City is responsible may be constructed as determined by the City. With regard to the timing of construction of City Improvements located within the Project Area, Master Developer and the Owners shall only be responsible for providing the road and utility infrastructure improvements to the edge of the property to be developed by the City when the adjacent residential neighborhood or commercial use is developed.
6.4.1.1 In the event the City wishes to develop one or more of the City Improvements within the Project Area prior to the road and utility infrastructure improvements to be _____ City _____ Master Developer Page 23 of 46
constructed by Master Developer or an Owner being available at the edge of the property to be developed by the City, the City shall, at its sole cost and expense, be responsible for installing the road and utility infrastructure improvements necessary to proceed with development of the City Improvements. At the election of Master Developer, the improvement plans for the road and utility infrastructure improvements the City wishes to construct pursuant to this Section 6.4.1.1 may be prepared by Master Developer in accordance with the Specific Plan.
If the City elects to install the road and utility infrastructure improvements in connection with development of one or more of the City Improvements, and the road and utility infrastructure improvements installed by the City serve the Project Area, Master Developer shall enter into a mutually agreeable reimbursement agreement with the City whereby Master Developer or the Owners shall reimburse the City for the road and infrastructure improvements installed by the City which serve the Project Area at such time that the residential or commercial uses adjacent to the road and utility infrastructure improvements are developed. Master Developer shall not be responsible for any costs expended by the City which are associated with installing road and utility infrastructure improvements which do not benefit the Project Area.
For example, if Master Developer grants the City an easement for a temporary access road to a water tank site which is not adjacent to an area being developed and the City installs a temporary access road over such easement area for use until such time as the nearest public street is constructed, the cost of installing the temporary access road will not be reimbursed by Master Developer.
6.4.1.2 In the event the City is unable to, whether financially or otherwise, or elects not to develop/construct any of the City Improvements, excluding the Existing Wastewater Treatment Plant Improvements and the Public Safety Facility, in advance of demand for the same by the Project, Master Developer or Owners may, at its sole and absolute discretion, elect to fund or develop/construct any of the City Improvements in accordance with the Specific Plan and the Land Use Laws and Ordinances in advance of the demand for any City Improvement for Development of the Project. Master Developer or Owners may make an election to fund or construct a City Improvement by delivering written notice thereof to the City, which the City may accept or reject. The cost to design, permit, manage and construct any such City Improvement shall be paid for from (i) funds available in the Vista Lucia CFD, see Section 7.2 below, or (ii) private funds made available by Master Developer or an Owner. If Master Developer or an Owner elects to fund or construct a City Improvement and the City accepts such offer, prior to design, permitting, management, and construction of such City Improvement, the City and Master Developer or the Owner shall enter into a reimbursement agreement which provides for reimbursement by the City to Master Developer or an Owner from (a) any City Development Impact Fees allocated to pay for design, permitting, management, and construction of the City Improvement, (b) the Vista Lucia CFD, or (c) such other funds as determined by City to be available to the City for the purpose of funding or construction of the City Improvement. The terms of the reimbursement agreement shall provide for repayment of the funds due to Master Developer or an Owner for funding or, design, permitting, management, and construction of the City Improvement over a period of time and dependent upon receipt by the City of funds _____ City _____ Master Developer Page 24 of 46
collected by the City and allocated to the City Improvement or funds received through the Vista Lucia CFD. The parties agree that any reimbursement shall contain terms which limit the City’s liability to repay Master Developer or an Owner to those funds received by the City for the City Improvement or through the Vista Lucia CFD, which could result in Master Developer or an Owner not receiving the full sum of the private funds expended on the design, permitting, management, and construction of the City Improvement. The City shall cooperate with Master Developer or the Owner in obtaining any and all licenses, permits, or other rights required to develop/construct the City Improvement which Master Developer elects to develop/construct.
6.4.1.3 In the event the City is unable to or elects not to construct a City Improvement, and neither Master Developer nor an Owner elects to do so pursuant to Section 6.4.1.2 above, the City shall have the right to deny issuance of additional grading or building permits for Development until such time as the necessary City Improvement is constructed. Master Developer understands and agrees that although construction of City Improvements necessary for Development within the Project Area are the responsibility of the City, the City may not be in a position to construct such City Improvements prior to the same being needed for Development to continue and that Development of the Project Area may be delayed as a result of the same.
Neither Master Developer nor an Owner shall have the right to claim that the City is in default of this Agreement as a result of the failure to construct a City Improvement, provided (i) the City has complied with the terms set forth in Section 6.4.1.2 above which require the City to consider any offer by Master Developer or an Owner to fund or construct the City Improvement, and (ii) once the City initiates construction of a City Improvement, it shall diligently pursue completion thereof. The terms and conditions set forth in Section 3.7 above shall apply to any claims, actions, or proceedings arising out of the City’s election not to proceed with construction of a City Improvement, including any claims, actions, or proceedings relating to the City’s denial of additional grading or building permits as the result of a City Improvement not being constructed when necessary for development to proceed.
6.4.2 Dedication/Donation. City Improvements constructed by Master Developer and/or the Owners shall be dedicated to the City as set forth in Section 6.5 of the Specific Plan and this Section 6.4.2. Except as set forth elsewhere in this Agreement, no consideration shall be due to Master Developer and/or the Owners for any land within the Project Area upon which any City Improvements are constructed pursuant to Section 6.4.1.
6.4.2.1 Water Tank and Well Site. If the City determines that a water tank site is needed, at the request of the City, Master Developer shall convey to the City a one (1) acre site in a mutually agreeable location within the Project Area that is owned by Master Developer for the purpose of constructing a water tank thereon. Additionally, if the City determines that a well site is needed, upon request of the City, Master developer shall convey to the City a site in a mutually agreeable location within the Project Area for the purpose of the City drilling and constructing a well thereon, the exact size of which shall be determined and agreed upon by both the City and Master Developer, but in no event shall exceed one-half (1/2) of an acre. To the extent necessary, Master Developer shall grant the City easements for ingress and egress thereto, as well as for the construction of any public utilities therein. _____ City _____ Master Developer Page 25 of 46
6.4.2.2 Public Safety Site. At the request of the City, Master Developer shall convey to the City the one (1) acre site identified in the Specific Plan and right of entry for a public safety facility for the purpose of constructing a public safety facility thereon.
To the extent necessary, as determined by the City, Master Developer shall grant the City easements for ingress and egress thereto, as well as for the construction of any public utilities therein.
6.4.2.3 Community Parks. Master Developer shall offer to dedicate to the City the land for (i) the Community Park within the Santa Lucia Neighborhood (the “Santa Lucia Neighborhood Community Park”) prior to issuance by the City of the One Thousandth (1,000th) residential building permit, and (ii) the Community Park within the Gabilan Neighborhood (the “Gabilan Neighborhood Community Park”) prior to issuance by the City of the Two Thousand Five Hundredth (2,500th) residential building permit. Master Developer shall deliver (a) written notice and an offer of dedication to the City upon acquisition of the Santa Lucia Neighborhood Community Park (the “Santa Lucia Neighborhood Community Park Offer of Dedication”), and (b) written notice and an offer of dedication to the City upon acquisition of the Gabilan Neighborhood Community Park (the “Gabilan Neighborhood Community Park Offer of Dedication”). The City may elect to accept the Santa Lucia Neighborhood Community Park Offer of Dedication and the Gabilan Neighborhood Community Park Offer of Dedication at any time following receipt of said offers of dedication by delivering written notice thereof to Master Developer (each an “Acceptance”). Upon receipt of an Acceptance, Master Developer shall convey the land underlying the applicable Community Park to the City, and the City shall maintain the land, including regularly removing weeds and any debris from the same, until the respective Community Park is constructed thereon by the City using funds available to the City, including without limitation City Development Impact Fees.
6.5 Fanoe Road and Vista Lucia Parkway. Future development within the City requires improvements to Fanoe Road and Vista Lucia Parkway (aka Associated Lane). For purposes of this Agreement, the Fanoe Road and Vista Lucia Parkway improvements have been broken down into two phases. The first, or interim, phase consists of improving Fanoe Road along the frontage of the Project Area, terminating use of Fanoe Road from the point where it currently turns northeasterly, near Burgundy Way, and extending it northwesterly to Vista Lucia Parkway (the “Fanoe Road Extension”), as well as improving Vista Lucia Parkway from the point of connection of the Fanoe Road Extension to the Alta interchange (the “Interim Improvements”), the locations of which are shown on Exhibit C-1 attached hereto and incorporated herein by this reference. The second, or ultimate, phase consists of widening Fanoe Road along the frontage of the Project Area, and expanding the Fanoe Road Extension and Vista Lucia Parkway from the point of connection of the Fanoe Road Extension to the Alta interchange (the “Ultimate Improvements”, and together with the Interim Improvements, the “Fanoe Road and Vista Lucia Parkway Improvements”), the locations of which are shown on Exhibit C-2 attached hereto and incorporated herein by this reference. Separately, and directly related to development of the Project Area, Vista Lucia Parkway will be improved and expanded from the Fanoe Road Extension easterly to the Project Area (the “Vista Lucia Parkway/Project Area Improvements”, and together with the Fanoe Road and Vista Lucia Parkway Improvements, the “Road Improvements” ), the locations of which are shown on Exhibit C-3 attached hereto and incorporated herein by this reference. _____ City _____ Master Developer Page 26 of 46
6.5.1 Responsibility for construction of the Fanoe Road and Vista Lucia Parkway Improvements. The City is generally responsible for the construction of all public improvements, including without limitation the construction of public roads needed for expansion of the City. Notwithstanding the foregoing, the City has requested and Master Developer has agreed to divide construction of the Fanoe Road and Vista Lucia Parkway Improvements as follows: (i) Master Developer shall be responsible for construction of the Interim Improvements, all as more particularly set forth in Section 6.5.3 below; (ii) the City shall be responsible for construction of the Ultimate Improvements, all as more particularly set forth in Section 6.5.4 below, and (iii) Master Developer shall be responsible for construction of the Vista Lucia Parkway/Project Area Improvements, all as more particularly set forth in Section 6.5.5 below.
6.5.2 Acquisition of Property for the Road Improvements. Construction of the Road Improvements requires acquisition of certain real property. Master Developer has, at its sole cost and expense, worked towards acquisition of the property required to construct the Road Improvements (the “Road Improvement Expansion Property”), the terms and conditions of which are more particularly set forth in a separate agreement with the property owner (the “Purchase Agreement”). Pursuant to the terms of the pending Purchase Agreement, the Road Improvement Expansion Property required for construction of the Road Improvements will be acquired prior to construction of the Interim Improvements. The cost to acquire the Road Improvements Expansion Property, including the costs associated with acquisition, were included in the DIF Study and incorporated into the Circulation System Impact Fee. Provided the Purchase Agreement is executed and Master Developer acquires the Road Improvement Expansion Property, the City shall reimburse Master Developer for all costs associated with acquiring the Road Improvement Expansion Property pursuant to the terms and conditions set forth in Section 6.4.1.2 above, all of which will be more particularly set forth in the Interim Improvements Agreement, as defined in Section 6.5.3 below.
6.5.3 Construction of the Interim Improvements. Master Developer shall be responsible for construction of the Interim Improvements subject to the terms and conditions of a separate agreement to be entered into between Master Developer and the City (the “Interim Improvements Agreement”) and this Section 6.5.3.
6.5.3.1 The property upon which all of the Road Improvements will be constructed, including the Road Improvement Expansion Property, is located within the jurisdiction of the County. The County has agreed to enter into a separate agreement with the City post Annexation which gives the City full jurisdiction over the design, construction, and maintenance of the Road Improvements (the “County Agreement”). Master Developer shall seek all permits necessary to construct the Interim Improvements from the City. The City shall deliver a copy of the County Agreement to Master Developer within ninety (90) days of Annexation.
6.5.3.2 The Interim Improvements shall be constructed by Master Developer pursuant to the terms of the Interim Improvements Agreement which shall, among other things, allow for the phased issuance of building permits and certificates of occupancy for residential units within the Project Area at set milestones, all as more particularly set forth in the Interim Improvements Agreement. _____ City _____ Master Developer Page 27 of 46
6.5.3.3 All costs and expenses associated with the design, permitting, construction, and project management of the Interim Improvements shall be paid per the terms set forth in Section 6.4.1.2 above, all as more particularly set forth in the Interim Improvements Agreement.
6.5.4 The Ultimate Improvements. The Ultimate Improvements shall be constructed by the City following construction of the Interim Improvements. The cost of constructing the Ultimate Road Improvements was included in the DIF Study and shall be funded by Circulation System Impact Fees. Except for payment of the Circulation System Impact Fees set forth in Section 5.2 above, neither Master Developer nor any Owner shall be required to contribute to construction of the Ultimate Road Improvements.
6.5.5 Construction of the Vista Lucia Parkway/Project Area Improvements. Master Developer shall be responsible for funding and constructing the Vista Lucia Parkway/Project Area Improvements when required to meet the traffic demand resulting from development of the Project. Master Developer shall have a traffic trigger analysis prepared prior to approval of a tentative map for the northwest corner of the Project Area for the purpose of determining when the Vista Lucia Parkway/Project Area Improvements need to be constructed to meet Project demands. The City shall have the right to condition approval of tentative maps applied for after preparation of the traffic trigger analysis on construction of the Vista Lucia Parkway/Project Area Improvements by Master Developer.
6.6 Timing of Construction of Public Improvements for the US 101/North Alta Interchange. All public improvements at the US 101/North Alta Interchange related to development of the Project Area which sit within CalTrans’ area of responsibility shall be at the sole discretion of CalTrans, and coordinated, improved and developed by CalTrans (the “CalTrans Improvements”) with cooperation of the City. A portion of the Circulation System Impact Fees which the City identified in the DIF Study as being for the construction of the CalTrans Improvements (the “CalTrans DIF”), which will be collected by City pursuant to Section 5.2 above, can be used to support the CalTrans Improvements. The parties acknowledge and agree that payment of the CalTrans DIF, as required by Section 5.2 above, is the only feasible mitigation that can be required by the City of Master Developer given the CalTrans Improvements are outside of the City’s jurisdiction and that payment of the City Development Impact Fees required by Section 5.2 above is considered by the City as full and complete mitigation of all impacts to the CalTrans Improvements resulting from development of the Project.
Notwithstanding anything to the contrary set forth above, in the event the City elects to initiate design and construction of the CalTrans Improvements prior to such time that the CalTrans DIF is available for such efforts, the City may request and Master Developer may agree, at its sole and absolute discretion, to (i) provide such funds as are necessary to initiate design and construction of the CalTrans Improvements in accord with the terms set forth in Section 6.4.1.2 above, or (ii) use of funds available from the Vista Lucia CFD to initiate design and construction of the CalTrans Improvements.
6.6.1 Interim Improvements. In order to maintain the Level of Service standards set forth in the General Plan, certain interim road improvements are required near the US 101/North Alta Interchange and within/adjacent to the Project Area along Fanoe Road at the Gabilan Promenade/Burgundy Way Intersection (the “Interim LOS Improvements”). As of the Effective Date it is not known (i) whether CalTrans approval will be necessary for the Interim LOS Improvements near the US 101/North Alta Interchange, (ii) the exact configuration of the Interim LOS Improvements, or (iii) exactly when the Interim LOS Improvements will be _____ City _____ Master Developer Page 28 of 46
required to maintain the Level of Service standards set forth in the General Plan, although it is anticipated that the Interim LOS Improvements will be required prior to construction of the 1,091st dwelling unit and 24,000 square feet of commercial use within the Project Area.
Following the Effective Date, the City and Master Developer shall continue to meet and reach agreement regarding construction of the Interim LOS Improvements, including funding thereof. Master Developer acknowledges and agrees that failure to reach an agreement with the City and construction of the Interim LOS Improvements agreed upon by the parties may result in the City refusing to issue grading or building permits for Development of the Project Area after the 1,090th certificate of occupancy is issued, which could result in delay of the Project.
6.7 Construction of Public Improvements for the Benefit of Future Land Development. Neither Master Developer nor any Owners shall be required to install public improvements or increase the size of any public improvements that are intended to benefit the property surrounding the Project Area unless funding for the same from the City or another source is made available to Master Developer or the Owners prior to the work being initiated.
6.8 Ownership and Maintenance of Private and Public Facilities and Infrastructure.
6.8.1 Private Property Improvements. Master Developer, an Owner, an Owners Association, or a group of individuals governed by contract shall own and maintain the private property and improvements, if any, located within the Project Area, which may include a gated community and/or an active adult community, which the respective entity constructed or became responsible therefore by means of a separate written agreement. The agreement entered into by the parties shall require that the private property be maintained to no less than City standards. The City shall have the right, but not the obligation, to review any such agreements prior to execution.
6.8.2 Public Property Improvements. Upon acceptance of property and each public improvement, conveyed, donated, or dedicated to the City, neither Master Developer nor an Owner shall have any further obligation for the maintenance of such improvements except as set forth in this Agreement, unless agreed to otherwise pursuant to separate agreement, it being the agreement of the Parties that the City shall maintain all public improvements conveyed, donated, or dedicated to the City and keep such public improvements free of waste and safe for public use. Until such time as the City accepts the transferred, dedicated, or donated property and each public improvement, Master Developer or the Owner shall maintain and operate the same to no less than City standards.
7. FINANCING AND PROVISION OF PUBLIC IMPROVEMENTS.
7.1 Formation of Financing District. City acknowledges that the Specific Plan contemplates the use of public financing districts, including LSDF, to finance the design, construction, and maintenance of certain public improvements. The City is not, however, obligated to form such financing districts as a result of its approval of the Specific Plan. In addition, the City may consider the formation of public financing districts which will include the entirety of the Project Area, or a portion thereof, for the purpose of funding certain public facilities more particularly described in the Specific Plan, with the expectation that the public financing districts will (i) issue, from time to time, bonds to provide sufficient funds to construct the public facilities so financed, and/or (ii) provide for the maintenance of public facilities.
_____ City _____ Master Developer Page 29 of 46
7.1.1 Consideration Limited by Policy. Upon the request of Master Developer or an Owner, with the consent of Master Developer, the parties shall cooperate in exploring the use of one or more financing districts or other means for financing development within the Project Area, subject to then-existing City debt financing policies.
7.1.2 City Not Required to Form District. Notwithstanding the foregoing, it is acknowledged by the parties that nothing contained in this Agreement shall be construed as requiring the City or the Council to form a financing district or cause a public financing district to issue bonds.
7.1.3 Master Developer/Owner Vote. Master Developer or an Owner, with the consent of Master Developer, shall cooperate with the City in the formation and establishment of one or more financing districts, as contemplated in the Specific Plan, provided that nothing herein shall prevent Master Developer or an Owner, in its sole discretion, from voting against the formation of any public financing district initiated by the City.
7.2 Community Facilities District for Construction of Public Improvements, Public Services and Maintenance of Public Amenities within the Project Area. Master Developer has requested that the City initiate those actions necessary to form a Mello-Roos Community Facilities District (the “Vista Lucia CFD”) to provide (i) funding for construction of certain public improvements, and (ii) funding for certain city services and maintenance of public improvements within the Project Area which will encumber all or portions of the Project Area.
The Vista Lucia CFD may be used to fund public improvements necessary for development of the Project Area, including without limitation, the construction of streets, lanes, and road improvements; streetlighting and landscaping; transit facilities; water supply mains; sanitary sewer mains; storm drainage mains, basins, and related improvements; parks, trails, promenades, and agricultural buffers; water tank(s); well(s); and the public facilities located within and outside of the Project Area necessary for development of the Project. The Vista Lucia CFD may also be used to fund certain city services which are necessary for development of the Project Area including without limitation: police and fire services; parks and recreation services; and public works services, as well as maintenance of the public improvements within and outside of the Project Area which are necessary for the Project. Master Developer has engaged a public financing consulting team to assist in the process of forming the Vista Lucia CFD should Council elect to proceed.
8. REVIEW FOR COMPLIANCE.
8.1 Annual Review. Throughout the Term of this Agreement and at least every twelve (12) months (the “Annual Review”), the Council shall review the extent of good faith compliance by Master Developer and the Owners with the terms of this Agreement, including without limitation construction of the Interim Improvements set forth in Section 6.5.3 above until such time as the Interim Improvements are constructed and accepted by the City. The review shall be limited in scope to compliance with the terms of this Agreement pursuant to California Government Code §65865.1. The City Clerk shall set the date for the Annual Review.
8.1.1 Notice. At least twenty (20) days prior to the Annual Review, the City Manager shall make available to Master Developer and the Owners a copy of any staff reports and documents to be used or relied upon in conducting the review and, to the extent practical, related documents concerned Master Developer’s and the Owners’ compliance with this Agreement. _____ City _____ Master Developer Page 30 of 46
8.1.2 Burden of Proof. The burden of proof by substantial evidence of compliance is upon Master Developer and the Owners in accordance with California Government Code §65865.1 and the applicable City ordinance. Master Developer and the Owners shall be permitted an opportunity to respond to the evaluation of compliance with this Agreement, either orally at the public hearing or in a written statement.
8.1.3 No Additional Fees, Conditions, or Development Exactions. The City shall not impose any conditions, fees, or other Development Exactions as a condition to a finding of good faith compliance with the terms of this Agreement.
8.2 Special Review. The Council may, for cause, order a special review of compliance with this Agreement. The Council shall conduct such special review consistent with the terms of an Annual Review, as set forth in Section 8.1 above. A special review may be used to replace the next Annual Review, at the sole discretion of the Council.
8.3 Compliance Finding by Council. If the Council finds and determines on the basis of substantial evidence that Master Developer and the Owners have complied in good faith with the terms and conditions of this Agreement during the period under review, the review for that period is concluded.
8.4 Non-Compliance Finding by Council. If as a result of an Annual Review or special review which resulted in a Non-Compliance Finding by the Council, the Council finds and determines on the basis of substantial evidence that Master Developer and the Owners have not complied in good faith with the terms and conditions of this Agreement, the Council may terminate or modify this Agreement, written notice whereof shall be delivered to Master Developer and the Owners either at the end of the public hearing required by Section 8.1 above or within three (3) days of the NonCompliance Finding.
8.4.1 Notice of Non-Compliance. The notice shall provide (i) the time and place of the public hearing; (ii) a statement as to whether the Council proposes to terminate or to modify this Agreement; and (iii) such other information which the Council considers appropriate to inform the other part of the nature of the proceedings.
8.4.2 Conclusion of Non-Compliance Public Hearing. At the conclusion of the public hearing, the Council shall take final action on the proposed modification or termination of this Agreement by ordinance, or may refer the matter to the Planning Commission for further proceedings or for a report and recommendation. In the event the matter is referred to the Planning Commission, the Council may take final action by ordinance after receipt of any recommendation or report from the Planning Commission. As part of that final determination, the Council may impose conditions which it considers necessary and appropriate to protect the interests of the City. The decision of the Council is final. Master Developer and the Owners shall not be required to appeal such decision in order to exhaust its (their) administrative remedies and seek all legal remedies. Any court action or proceeding to review, set aside, void or annul any decision of the determination by the Council shall be commenced within (30) days of the Council’s decision.
8.5 Deemed Approval. In the event the Council fails to either (1) hold the annual review meeting or (2) notify Master Developer and the Owners in writing (following the scheduled date of the Annual Review) of the City’s determination as to compliance or noncompliance with the terms of this Agreement, and such failure remains uncured as of December 31st of the same year, such failure shall _____ City _____ Master Developer Page 31 of 46
be deemed an approval by the City of the good faith compliance with the terms of this Agreement by Master Developer and the Owners.
8.6 Certificate of Agreement Compliance. At the conclusion of an Annual Review or special review, or as requested by Master Developer and the Owner(s) throughout the Term of this Agreement, and assuming that Master Developer and the Owner(s) are found to be in compliance with this Agreement, City shall issue a Certificate of Agreement Compliance (“Certificate”) to Master Developer and the Owner(s) stating that after the most recent Annual Review or special review and based upon the information made known to the City Manager and the Council (1) this Agreement remains in effect; and (2) Master Developer and the Owner(s) are not in default. The Certificate shall be in recordable form, shall contain information intended to communicate constructive record notice of the finding of compliance, shall state whether the Certificate is issued after an Annual Review or special review and shall state the anticipated date of commencement of the next Annual Review.
Master Developer and the Owner(s) may record the Certificate with the County Recorder.
9. DEFAULT AND REMEDIES.
9.1 Default by Master Developer/Owner(s) or the City. Subject to extensions of time by mutual consent in writing or as provided herein, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default. In the event of an alleged default or breach of any terms or conditions of this Agreement, the party alleging such default or breach shall give the other party not less than thirty (30) days’ notice in writing specifying the nature of the alleged default and the manner in which said default may be satisfactorily cured (the “Notice of Agreement Default”); provided, however, if the alleged default stated in the Notice of Agreement Default can be corrected, but not reasonably within such thirty (30) day period, the non-defaulting party shall not unreasonably withhold its consent to an extension of such time, not to exceed one hundred eighty (180) days, if corrective action is instituted by the defaulting party within the thirty (30) day period and diligently pursued until the failure is corrected. During any such thirty (30) day period, subject to extension up to one hundred eighty (180) days as provided herein, the party charged shall not be considered in default for purposes of termination or institution of legal proceedings. Any extension of time beyond one hundred eighty (180) days for a default by Master Developer or the Owners of the Project Area requires the consent of the Council after a noticed public hearing. Default may be enforced against only the applicable defaulting party which, in the case of Master Developer or the Owners of the Project Area, may be less than all of the Owners of the Project Area.
9.1.1 Failure to Cure. After notice and expiration of the thirty (30) day period (which period is subject to extension as provided herein), the party alleging default may, at its option, institute legal proceedings pursuant to this Agreement, or give notice of intent to terminate the Agreement pursuant to California Government Code §65868 and City regulations implementing said Government Code section. Following notice of intent to terminate, the matter shall be scheduled for consideration and reviewed in the manner set forth in California Government Code §65867 and City regulations implementing said section.
9.1.2 Council Hearing. Following consideration of the evidence presented in said review before the Council, either party alleging the default by the other party may give written notice of termination of this Agreement to the other party.
9.2 Default by City. In the event the City defaults under the terms of this Agreement, the City agrees that Master Developer and the Owners shall not be obligated to proceed with or complete any _____ City _____ Master Developer Page 32 of 46
phase of the Project directly affected by the default, nor shall resulting delays in performance by Master Developer and the Owners constitute grounds for termination or cancellation of this Agreement.
9.3 Limitation on Remedies. Following expiration of the cure periods set forth in Section 9.1 above, in addition to any other rights or remedies, either party may institute legal action to cure, correct, or remedy any default, to enforce any covenant or agreement herein, or to enjoin any threatened or attempted violation; provided, however, that neither the City, Master Developer, nor the Owners shall be liable for money damages to the non-defaulting party for breach of contract, and Master Developer, on behalf of itself and all successor Owners, and the City each covenant not to sue in contract for money damages.
9.4 Enforced Delay – Extension of Times of Performance. Performance by either party under this Agreement shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine, restrictions, freight embargoes, unusually severe weather, inability (when either party is faultless) of any contractor, subcontractor or supplier, acts of the other party, acts or the failure to act, of any public or governmental agency or entity, except the City, or any other causes beyond the control, or without the fault of the party claiming an extension of time to perform. An extension of time of any such cause shall only be for the period of the enforced delay, which period shall commence to run from the time of the cause. If, however, notice by the party claiming such extension is sent to the other party more than thirty (30) days after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the giving of such notice.
Times of performance under this Agreement may also be extended in writing by the joint agreement of the City and Master Developer and, to the extent applicable, the Owners. Litigation attacking the validity of this Agreement, or any permit, ordinance, or entitlement or other action of a governmental agency necessary for the development of the Project Area pursuant to this Agreement shall be deemed to create an excusable delay under this Section 9.4 only as to Master Developer and the Owner and only for the period of such litigation. Nothing in this paragraph shall be construed to extend the term of this Agreement.
10. MORTGAGE PROTECTION.
10.1 Encumbrance of Master Developer’s Interest. Master Developer and each successor Owner of all or any portion of the Project Area (hereinafter, “Mortgagor”) shall have the right to encumber and/or collaterally assign or grant a security interest in such Mortgagor’s right, title and interest in, to and under this Agreement and the Project Area (or any portion thereof) pursuant to one or more mortgages (each a “Permitted Mortgage”), provided that (a) each such Permitted Mortgage shall be in favor of a Lender, and (b) the loan documents executed in connection with each such Permitted Mortgage shall provide that the City shall have the right to receive notices of default by the Mortgagor thereunder.
10.2 Mortgagee Protections. Provided that a mortgagee of any Permitted Mortgage (each a “Mortgagee”), provides the City with a conformed copy of each Permitted Mortgage which contains the name and address of such Mortgagee, the City hereby covenants and agrees to faithfully perform and comply with the following provisions with respect to such Permitted Mortgage:
10.2.1 No Termination. No action by Mortgagor, or the City to cancel, surrender, or materially modify the terms of this Agreement or the provisions of this Article 10 shall be binding upon a Mortgagee without written notice.
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10.2.2 Notices. If the City shall give a Notice of Agreement Default to any Mortgagor hereunder, the City shall simultaneously give a copy of such Notice of Agreement Default to the Mortgagee at the address theretofore designated by it. No Notice of Agreement Default given by the City or Mortgagor shall be binding upon or affect said Mortgagee unless a copy of said Notice of Agreement Default shall be given to Mortgagee pursuant to Section 10.2.7 hereof. In the case of an assignment of such Permitted Mortgage or change of such Mortgagee, said assignee or Mortgagee, by written notice to City, may change the address to which such copies of Notices are to be sent.
10.2.3 Performance of Covenants. The Mortgagee shall have the right to perform any term, covenant, or condition and to remedy any default by Mortgagor hereunder, within the time periods specified herein, and the City shall accept such performance with the same force and effect as if furnished by Mortgagor; provided, however, that said Mortgagee shall not thereby or hereby be subrogated to the rights of the City.
10.2.4 Default by Mortgagor. In the event of a default by Mortgagor which has not been cured by Mortgagor, or as to which there is no cure period hereunder, the City agrees not to terminate this Agreement (1) unless and until the City provides written notice of such default to any Mortgagee and such Mortgagee shall have failed to cure such Default within sixty (60) days after the later of delivery of such notice or expiration of any applicable Mortgagor cure period, and (2) in the case of a default which cannot practicably be cured by the Mortgagee without taking possession of the Project Area, if the Mortgagee has delivered to the City, prior to the date on which the City shall be entitled to give notice of termination, a written instrument wherein the Mortgagee unconditionally agrees that (subject to such delays as may be incident to obtaining a relief from stay in the case of a bankruptcy/dissolution event) it will commence and diligently pursue cure of such default promptly following its obtaining possession of the Project Area, or portion thereof (including possession by receiver) (subject to such delays as may be incident to obtaining a relief from stay in the case of a bankruptcy/dissolution event) and, upon obtaining such possession, the Mortgagee shall proceed diligently to cure such default.
10.2.4.1 The Mortgagee shall not be required to obtain possession or to continue in possession as Mortgagee of the Project Area, or portion thereof, if and when such default shall be cured. Nothing herein shall preclude the City from exercising any of its rights or remedies with respect to any other default by Mortgagor during any period of such forbearance, but in such event the Mortgagee shall have all of its rights provided for herein.
10.2.5 Foreclosure. Foreclosure of any Permitted Mortgage, or any sale thereunder, whether by judicial proceedings or by virtue of any power contained in a Permitted Mortgage, or any conveyance from the Mortgagor to a Mortgagee or its designee through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof, shall not require the consent of the City or constitute a breach of any provision of or a default under this Agreement, and upon such foreclosure, sale or conveyance the City shall recognize the purchaser or other transferee in connection therewith as Master Developer, if applicable, or such successor Owner of the Project Area, or any portion thereof, hereunder provided that such purchaser or transferee assumes, subject to the terms of Section 10.2.4 above, each and all of the obligations of Master Developer or such successor Owner of the Project Area, or any portion thereof, hereunder pursuant to an assumption agreement satisfactory to the City.
If any Mortgagee or its nominee or assignee shall acquire its Mortgagor’s right, title and interest _____ City _____ Master Developer Page 34 of 46
hereunder as a result of a judicial or non-judicial foreclosure under any Permitted Mortgage, or by means of a deed in lieu of foreclosure, or through settlement of or arising out of any pending or contemplated foreclosure action, such Mortgagee shall thereafter have the right to assign or transfer such Mortgagor’s right, title and interest hereunder to an assignee in accordance with Section 2.5 hereof. Upon execution and delivery of an Assignment Agreement in accordance with Section 2.5 hereof, the City shall cooperate with the new Master Developer or the new successor Owner of the Project Area, or any portion thereof, at the sole expense of said new Master Developer or said new successor Owner of the Project Area, or any portion thereof, in taking such action as may be necessary to remove Master Developer or such other Owner of the Project Area, or any portion thereof, named herein from the Project Area.
10.2.6 No Obligation to Cure. Any Mortgagee who comes into possession of the Project Area, or any portion thereof, pursuant to foreclosure of a mortgage or deed of trust, or deed in lieu of such foreclosure, shall take the Project Area, or portion thereof, subject to the terms of this Agreement. Notwithstanding any provision of this Agreement to the contrary, no Mortgagee shall have an obligation or duty under this Agreement to perform any of the obligations or other affirmative covenants of Master Developer or any successor Owner of all or any portion of the Project Area hereunder, or to guarantee such performance; provided, however, that to the extent that any covenant to be performed by Master Developer or any such successor Owner of the Project Area or any portion thereof, is a condition precedent to the performance of a covenant by the City, the performance thereof shall continue to be a condition precedent to the City’s performance hereunder, and further provided that any sale, transfer or assignment by any Mortgagee in possession shall be subject to the provisions of Section 2.5 of this Agreement.
10.2.7 Form of Notice. Any Mortgagee under a Permitted Mortgage shall be entitled to receive the notices required to be delivered to it hereunder provided that such Mortgagee shall have delivered to each party a notice substantially in the following form:
The undersigned, whose address is
does hereby certify that it is the Mortgagee (as such term is defined in that certain Development Agreement dated as of , 2025,
between Cielo Grande Ranch, LLC, and the City of Gonzales), of the parcel of land described on “Exhibit A” attached hereto, which parcel is owned by , a party to the Development Agreement (the “Party”). In the event that any notice shall be given of a default to the Party under the Development Agreement, a copy thereof shall be delivered to the undersigned that shall have the rights of a Mortgagee to cure the same, as specified in the Development Agreement. Failure to deliver a copy of such notice shall in no way affect the validity of the notice to the Party, but no such notice shall be effective as it relates to the rights of the undersigned under the Development Agreement with respect to the Permitted Mortgage, including the commencement of any cure periods applicable to the undersigned, until actually received by the undersigned.
10.2.8 Estoppel Certificate. The City shall execute an estoppel certificate in form and substance reasonably satisfactory to either an actual or a prospective Mortgagee at appropriate times (by way of example, but not limitation, prior to issuance of a commitment letter, prior to execution of loan documents, and/or prior to loan funding) in connection with the _____ City _____ Master Developer Page 35 of 46
construction financing and from time to time thereafter, upon the reasonable request of the Mortgagee.
10.2.9 Limitation of Liability. Upon acquiring title to the Project Area or any portion thereof, Mortgagee shall have no obligations or liability to the City beyond the Mortgagee’s interest if any, in the Project Area or such portion thereof, and the City shall look exclusively to such interest in the Project Area or such portion thereof for payment and discharge of any obligations imposed upon the Mortgagee under this Agreement or any other document entered into in connection therewith. Mortgagee shall be released and relieved of any liability under this Agreement and under any other document entered into in connection therewith upon the assignment of Mortgagee’s rights upon or subsequent to foreclosure of its collateral or acquisition in lieu of foreclosure.
11. MISCELLANEOUS PROVISIONS.
11.1 Recordation of Agreement. Within thirty (30) days of the Effective Date, the City Clerk shall record with the Monterey County Recorder a fully executed copy of this Agreement and the ordinance approving its adoption. Subject to the terms and conditions set forth in Section 2.2 above, the Agreement shall be binding upon, and the benefits of the Agreement shall inure to, the parties and all successors in interest to the parties to the Agreement. The City and Master Developer shall execute the Agreement within twenty (20) days of the City Approval Date.
11.2 Entire Agreement. Except to the extent future agreements between the parties are specifically referenced or contemplated in this Agreement, this Agreement sets forth and contains the entire understanding and agreement of the parties as to the subject matter hereof, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements which are not contained or expressly referred to herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceedings of any kind or nature to interpret or determine the terms or conditions of this Agreement.
11.3 Severability. If any term, provision, covenant, or condition of this Agreement shall be determined invalid, void, or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement. Notwithstanding the foregoing, the provision of the public benefits set forth in Section 4, Section 5, and Section 6 of this Agreement, including the payment of the fees set forth therein, are essential elements of this Agreement and the City would not have entered into this Agreement but for such provisions, and therefore in the event such provisions are determined to be invalid, void, or unenforceable, this entire Agreement shall be null and void and of no force and effect whatsoever.
11.4 Interpretation and Governing Law. This Agreement and any dispute arising hereunder shall be governed and interpreted, in accordance with the laws of the State of California. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement, all parties having been represented by counsel in the negotiation and preparation hereof.
11.5 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.
11.6 Singular and Plural. As used herein, the singular of any word includes the plural and the plural of any word includes the singular.
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11.7 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element.
11.8 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Agreement thereafter.
11.9 No Third-Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the Parties and their successors and assigns. Except as expressly set forth herein, no other person shall have any right of action based upon any provision of this Agreement.
11.10 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the party benefited thereby of the covenants to be performed hereunder by such benefited party.
11.11 Successors in Interest. The burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement, including, without limitation, assignees (directly or by merger), heirs, or transferees by operation of law.
11.12 Counterparts. This Agreement may be executed by the Parties in counterparts, which counterparts shall be construed together and have the same effect as if all the Parties had executed the same instrument.
11.13 Jurisdiction, Venue and Statute of Limitations. Any action at law or in equity arising under this Agreement or brought by a party hereto for the purpose of enforcing, construing, or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Monterey, State of California, and the parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court. The use of the term “substantial evidence” in this ordinance with respect to the quantum of proof necessary in connection with a finding of non-compliance is not intended to limit, nor impose a standard of review upon, any court pursuant to a proceeding initiated for that purpose.
11.14 Project as a Private Undertaking. It is specifically understood and agreed by and between the Parties hereto that the Development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement.
No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between City and Master Developer and any successor Owner(s) of all or any portion of the Project Area is that of a government entity regulating the development of private property and the owner of such property, which development separately may require the construction of public improvements as fair consideration hereunder or as conditions of approval of the development as required by City ordinances and policies.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and the satisfaction of the conditions of the Agreement. Upon the request of either party at any time, the other party shall promptly execute, with acknowledgement or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement.
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11.16 Authority to Execute. The person or persons executing this Agreement on behalf of Master Developer warrants and represents that he/she/they have the authority to execute this Agreement on behalf of his/her/their corporation, partnership or business entity and warrants and represents that he/she/they has/have the authority to bind Master Developer to the performance of its obligations hereunder.
11.17 Findings of Support. The City hereby finds and determines that execution of this Agreement is in the best interest of the public health, safety, and general welfare and that the provisions of this Agreement are consistent with the General Plan and the Specific Plan.
11.18 Incorporation of Recitals. The recitals are specifically incorporated into this Agreement.
11.19 Compliance with Laws. Master Developer shall carry out the design, construction and operation of the Project and the public improvements identified in this Agreement in substantial conformity with all applicable laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of Monterey, the City or any other political subdivision in which the Property is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the City, the Master Developer, or the Property, including all applicable federal, state and local occupation, safety and health laws, rules, regulations and standards; applicable state and labor standards, including prevailing wage requirements as they apply to the public improvements; the Existing Land Use Regulations and Ordinances as they apply to the Project and the public improvements; building, plumbing, mechanical and electrical codes, as they apply to the Project and the public improvements; all other provisions of the City of Gonzales and the City Code as they apply to the Project and the public improvements; and all applicable disabled and handicapped access requirements, including, without the limitation, the Americans With Disability Act, 42 U.S.C. §12101 et seq., California Government Code §4450 et seq., and the Unruh Civil Rights Act, Civil Code §51 et seq.. Notwithstanding the foregoing, Master Developer shall be solely responsible for determining and effectuating compliance with such laws, and the City makes no representation as to the applicability or non-applicability of any of such laws and Master Developer shall bear the risk of any compliance or non-compliance with such laws. Notwithstanding, Master Developer shall not be in default under the provisions of this Section 11.19 unless Master Developer’s non-compliance with such provisions results in a material and adverse effect on Master Developer’s ability to comply with the Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year set forth below, as authorized by Ordinance No. of the Council.
Date: , 2025
CITY:
CITY OF GONZALES,
a Municipal Corporation
By:
, Mayor of the City of Gonzales
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ATTEST:
, City Clerk
APPROVED AS TO CONTENT:
Community and Economic Development Department
By:
, Director of Community and Economic Development
APPROVED AS TO FORM:
By:
, City Attorney
MASTER DEVELOPER:
CIELO GRANDE RANCH, LLC,
a California limited liability company
By:
Glenn M. Pace, its Manager
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Exhibit A
Legal Description of Project Area
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE UNINCORPORATED AREA IN COUNTY OF MONTEREY, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
PARCEL I:
All that portion of Lot 5 of the Rincon De La Punta Del Monte Rancho as per Lou G. Hare's Official Map of Monterey County, described as follows:
Beginning at the most Northern corner of said Lot 5 on the Southern side of the end of a 25-foot lane; thence (Var. 15° 55' East) following the Southern line of said lane; and the Northern line of said Lot 5, (1) South 50° 16' West, 75.50 chains to a 3" x 4" redwood post marked B.C.T., C.J., L.G.H.; thence leaving said lane,
(2) South 38° 36' East, 32.40 chains to a 3" x 4" redwood post marked B.C.T., C.J., L.G.H., standing on the Northwestern boundary of the land of David Jacks; thence along said boundary, (3) North 51° 20' East, 75.50 chains to an old 2 x 2 stake standing in fence corner; thence following fence on Northeastern boundary of said Lot 5,
(4) North 38° 36' West, 33.83 chains to the point of beginning.
EXCEPT THEREFROM that portion thereof conveyed in the Deed to County of Monterey for road purposes, recorded February 1, 1915, in Volume 138 of Deeds, at Page 16, of Official Records.
PARCEL II:
That portion of the Rancho Rincon De La Punta Del Monte, being a part of that certain 215.62 acre tract conveyed in the Deed to Edward H. Anderson, et al., recorded September 21, 1917, in Volume 151 of Deeds,
Beginning at a 3 x 4 inch post marked BCT, CJ, LGH standing at the most Northern corner of the above mentioned 215.62 acre tract; thence along the Southeast side of a 25 foot lane and the boundary of said 215.62 acre tract,
(1) South 50° 16' West, 1957.1 feet to a 4 x 4 inch post marked EHA, F, BR, 1; thence leave the boundary of said 215.62 acre tract and running,
(2) South 75° 57' East, 447.1 feet to a 4 x 4 inch post marked EHA, F, BR, 2; thence (3) South 55° 17' East, 741.65 feet to a 4 x 4 inch post marked EHA, F, BR, 3; thence (4) South 39° 50' East, 1039.60 feet to a 4 x 4 inch post marked EHA, F, BR, 4 standing in the boundaries of the above mentioned 215.62 acre tract on the Southeast side of a 40 foot county road; thence along the boundaries of said 215.62 acre tract,
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(5) North 51° 20' East, 1449.5 feet to the old post BCT, CJ, LGH; thence (6) North 38° 36' West, 2143.4 feet to the point of beginning.
Courses all true, variation of magnetic needle being 17° 30' East.
EXCEPT THEREFROM that portion thereof conveyed in the Deed to County of Monterey, recorded September 14, 1950, in Book 1245, Page 342, Official Records of Monterey County, California.
ALSO EXCEPT THEREFROM that portion thereof conveyed in the Deed to Neil Fanoe, et ux., recorded July 20, 1954, in Book 1540, Page 285, Official Records of Monterey County, California.
PARCEL III:
An easement for road purposes over a strip of land 20 feet wide along, adjacent to and to the Northeast of the Southwesterly boundary of Course (4) as set forth in the Deed executed by Anker P. Fanoe, et ux., recorded July 20, 1954, in Book 1540, Page 285, Official Records of Monterey County, California.
PARCEL IV:
That portion of Rancho Rincon De La Punta Del Monte and being all that portion of that certain strip of land 25 feet wide conveyed in the Deed to Monterey County, dated April 18, 1893, recorded September 18, 1893, in Volume 41 of Deeds, at Page 202, Official Records of Monterey County, California, described as follows:
A strip of land 25 feet wide lying along, adjacent and contiguous to and Northwesterly from the following described line:
Beginning at a point in the Southeasterly line of the above described 25 foot wide strip of land from which a 4" x 4" post marked E.H.A., F., B.R., l standing in the most Westerly corner of that certain 76.30 acre tract of land conveyed in the Deed to Anker P. Fanoe, et al., dated October 3, 1929, recorded October 14, 1929 in Volume 210, Page 182, Official Records of Monterey County, California, bears S. 50° 16' W., 49.58 feet; thence running along the Southeasterly line of said strip of land, N. 50° 16' E., 4878.18 feet; thence N. 50° 15' E., 2016.96 feet to a point in the Southwesterly line of the Iverson County Road (50 feet wide).
PARCEL V:
That portion of Rancho Rincon Del La Punta Del Monte and being a portion of that certain strip of land 40 feet wide, conveyed in the Deed to Monterey County, dated November 30, 1914, recorded December 4, 1914, in Volume 136 of Deeds, at Page 304, Official Records of Monterey County, California, described as follows:
Beginning at a 3" x 4" post marked B.C.T., C.J., L.G.H. standing in the most Easterly corner of that 76.30 acre tract of land conveyed in the Deed to Anker P. Fanoe, et al., dated October 3, 1929, recorded October 14, 1929 in Volume 210, Page 182, Official Records of Monterey County, California; thence running along the Southeasterly line of the above described 40 foot strip of land, (1) S. 51° 20' W., 1409.49 feet to a point from which a 4" x 4" post marked E.H.A, F., B.R.4 bears S. 51° 20' W., 40.01 feet; thence leave Southeasterly line of said road, (2) N. 39° 50' W., 40.01 feet; thence
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(3) N. 51° 20' E., 1410.35 feet to a point in the Northeasterly line of the above mentioned 76.30 acre tract of land;
thence along the Northeasterly line of said tract,
(4) S. 38° 36' E., 40.00 feet to the point of beginning.
EXCEPT THEREFROM that portion thereof described in the Grant Deed to Neil Fanoe, et ux., recorded July 20, 1954, in Book 1540, Page 285, Official Records of Monterey County, California.
PARCELS I, II, IV and V above are also shown as Parcels "1" and "2" on that certain Map filed October 1, 1992, in Volume 17 of Surveys, at Page 150, Official Records of Monterey County, California.
PARCEL VI:
Beginning at a point in the Southeasterly line of the 4069.539 acre tract of land conveyed in the Deed to Alfred Gonzales, recorded May 12, 1892 in Volume 35 of Deeds, at Page 449, Official Records of Monterey County, California; distant thereon, South 49° 30' West, 103.96 chains from a four inch by four inch stake marked "A.G." and "M.E.G." at the most Easterly corner of said 4069.539 acre tract of land conveyed to Alfred Gonzales as aforesaid; thence running along the Southeasterly line of said 4069.539 acre tract, (1) South 49° 30' West, 114.30 chains to the most Easterly corner to the 600 acre tract of land conveyed in the Deed to Edward L. Hooper, recorded January 6, 1893, in Volume 38 of Deeds, at Page 112, Official Records of Monterey County, California; thence along the Northeasterly line of said Hooper tract, (2) North 39° 44' West, 46.56 chains to a stake; thence (3) North 51° 29' East, 115.09 chains to the Southwesterly line of the 806 acre tract of land conveyed in the Deed to John L. Bradbury, recorded March 2, 1893, in Volume 38 of Deeds, at Page 238, Official Records of Monterey County, California; thence along the Southwesterly line of said Bradbury tract, (4) South 38° 31' East, 42.60 chains to the point of beginning, and being a portion of the Rancho Rincon De La Punta Del Monte.
EXCEPT THEREFROM all that portion described as follows: Beginning at a point in the Southeasterly line of the 4069.539 acre tract of land conveyed in the Deed to Alfred Gonzales, recorded May 12, 1892 in Volume 35 of Deeds, at Page 449, Official Records of Monterey County, California; distant thereon, South 49° 30' West, 103.96 chains from a 4" x 4" stake marked "A.C." and "M.E.G." at the most Easterly corner of said 4069.539 acre tract of land conveyed to Alfred Gonzales as aforesaid; thence running along the Southeasterly line of said South 49° 30' West, 4069.539 acre tract 13.18 chains; thence leaving said line, North 38° 13' West,
43.00 chains to station in fence; thence following fence, North 51° 29' East, 13.00 chains to the Southwesterly line of the 806 acre tract of land conveyed in the Deed to John L. Bradbury, dated February 24, 1893 and recorded March 2, 1893 in Volume 38 of Deeds, at Page 238, Official Records of Monterey County, California; thence along the Southwesterly line of said Bradbury tract, South 38° 31' East, 42.60 chains to the point of beginning.
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ALSO EXCEPT THEREFROM that 1.00 acre tract conveyed in the Deed to Anker P. Fanoe Jr., et ux., recorded March 16, 1953 in Volume 1442, Page 185, Official Records of Monterey County, California.
ALSO EXCEPT THEREFROM Parcel "3" as said parcel is shown and designated on that certain Map filed October 1, 1992, in Volume 17 of Surveys, at Page 150, Official Records of Monterey County, California.
Said parcel is also shown as Parcel "4" on that certain Map filed October 1, 1992, in Volume 17 of Surveys, at Page 150, Official Records of Monterey County, California _____ City _____ Master Developer Page 43 of 46
Exhibit B
Development Approvals
The City of Gonzales General Plan adopted by the Council on , a copy of which is on file with the City Clerk.
The Vista Lucia Specific Plan adopted by the Council on , as set forth in Resolution No. , a copy of which is on file with the City Clerk.
The Vista Lucia Annexation to the City of Gonzales by Monterey County Local Agency Formation Commission (LAFCO), pursuant to Resolution No. , which was adopted on , and subsequently approved by the Council on , as set forth in Resolution No. , copies of which are on file with the City Clerk.
The Vista Lucia Specific Plan Environmental Impact Report certified by the Council on , as set forth in Resolution No. , a copy of which is on file with the City Clerk.
The Mitigation Monitoring Plan for the Project adopted by the Council on , as set forth in Resolution No. , a copy of which is on file with the City Clerk.
Tentative Map No. , including the Conditions of Approval attached thereto, adopted by the Council on , pursuant to Resolution No. , a copy of which is on file with the City Clerk.
Parcel Map No. , including the Conditions of Approval attached thereto, adopted by the Council on , pursuant to Resolution No. , a copy of which is on file with the City Clerk.
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Exhibit C-1
Interim Improvements Area
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Exhibit C-2
The Ultimate Improvements Area
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Exhibit C-3
The Vista Lucia Parkway/Project Area Improvements Area