CITY COUNCIL AGENDA REPORT
MEETING DATE: 6/17/2025
DEPARTMENT: City Manager
SUBJECT:
APPROVAL OF FIRST AMENDMENT TO SUBDIVISION IMPROVEMENT
AGREEMENT FOR TRACT NO. 19124
RECOMMENDED ACTION(S):
1. Approve the First Amendment to the Subdivision Improvement Agreement for Completion of Public/Private Improvements for Tract No. 19124.
2. Authorize the Mayor to sign, and Clerk to Attest, the First Amendment to the Subdivision Improvement Agreement.
EXECUTIVE SUMMARY:
On August 17, 2021, the City Council approved Final Tract Map No. 19124 for a nine-lot subdivision on the former Nakase Nursery site located at 20261 Lake Forest Drive, including Lot 7 for an affordable senior housing project. In conjunction with the map approval, the City entered into a Subdivision Improvement Agreement (“SIA”) with Toll West Inc. dba Toll Brothers West Inc. (“Toll”) (Attachment 1, Exhibit A).
Toll has now requested that Lot 7 be released from the scope of the original agreement (Attachment 2). While improvements on Lot 7 have been completed, the continued inclusion of this lot in the agreement is no longer necessary from Toll’s perspective and creates administrative and title-related complications. The proposed First Amendment removes Lot 7 from the scope of the SIA. All other lots remain fully subject to its terms.
BACKGROUND:
On August 17, 2021, the City Council approved Final Tract Map No. 19124, which established a subdivision consisting of 9 numbered lots and 28 lettered lots on the former Nakase Nursery site located at 20261 Lake Forest Drive. The numbered lots were designated for various uses, including single-family residential development (Lots 1–5), affordable senior housing (Lot 7), public parks (Lots 6 and 9), and a potential school site (Lot 8). Of the 28 lettered lots, three were designated for private streets, 21 for open space and landscaping,
and four for public streets. All streets and open space lots are maintained by the Homeowners Association (HOA).
On March 9, 2023, Saddleback Valley Unified School District (“SVUSD”) notified the City and Toll that a new school would not be pursued. Pursuant to the Development Agreement, SVUSD’s rejection of the site allowed Toll to build additional homes on the site. In addition, when the SIA was approved by the City Council, it was anticipated there would be public streets because of the school site. Since the school district declined the school site, all streets became private and there are no public streets.
As part of the City Council’s approval of the Final Tract Map, Toll was required to enter into a SIA with the City. The SIA requires Toll to construct and complete public and private improvements such as streets and storm drains for the tract. It also requires Toll to provide bonds to the City as security if the work is not completed. The Agreement was recorded against the entire tract.
DISCUSSION:
Toll partnered with C&C to develop the affordable senior housing units on Lot 7.
C&C has since completed all required improvements on Lot 7. However, because Lot 7 is still encumbered by the Subdivision Improvement Agreement, it has created a title issue that is now affecting C&C’s ability to secure permanent financing for that site.
Toll approached City staff with a request to remove Lot 7 from the SIA (Attachment 2). Section 20.5 of the original SIA permits modifications upon mutual written consent. The proposed First Amendment removes Lot 7 from the scope of the SIA. All other lots within Tract No. 19124 will remain fully subject to the terms and obligations of the SIA, ensuring that the public/private improvements are completed by Toll, as required.
This amendment clarifies the parties’ obligations and resolves administrative issues without affecting the City’s ability to enforce completion of the remaining improvements.
FISCAL IMPACT:
There is no fiscal impact to the City. The proposed amendment facilitates private financing and does not alter the City’s responsibilities or obligations under the original SIA.
ATTACHMENTS:
1. First Amendment to Subdivision Improvement Agreement for Tract No. 19124
2. Letter from Toll
Initiated By: Adrian Grijalva, Economic Development/Housing Manager Submitted By: Keith Neves, Assistant City Manager
Approved By: Debra Rose, City Manager