CITY OF MENIFEE
SUBJECT: Replacement Agreement and Bonds for Legado Phase 1 Backbone Infrastructure Improvements, Tract Map No.
37391, Lennar Homes of California, LLC.
MEETING DATE: June 19, 2024
TO: Mayor and City Council
PREPARED BY: Chet Robinson, Principal Engineer
REVIEWED BY: Nick Fidler, Public Works Director
APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Approve and authorize the City Manager to execute the replacement Subdivision Improvement Agreement with Lennar Homes of California, LLC to guarantee the completion of required public improvements associated with the Legado Phase 1 Backbone Infrastructure Improvements associated with Tract Map No. 37391, located east of Encanto Drive, south of Rouse Road, west of Antelope Road, and north of Chambers Avenue; and
2. Authorize the City Engineer to release 100% of the originally posted securities with BLC Fleming, LLC for the Legado Phase 1 Backbone Infrastructure Improvements, Tract Map No. 37391.
DISCUSSION
Tract Map No. 37391 (“TM37391”), also known as Legado (“Project”), is a proposed subdivision of 331 gross acres of land into 18 large lots for residential, commercial, and park use and 28 lots for roads and utilities. This map was recorded to establish the Project’s planning areas that will be further subdivided in the future. TM37391 is part of the Legado Specific Plan by BLC Fleming, LLC, a Delaware Limited Liability Company (BLC Fleming). The Project is located east of Encanto Drive, south of Rouse Road, west of Antelope Road, and north of Chambers Avenue.
On December 2, 2023, the City Council approved and entered into Public Improvement Agreements (“Original Agreements”) with BLC Fleming for the Project’s phases 1, 2, and 3, to guarantee the construction of the public backbone street, drainage, utility, and landscaping improvements as required by the Project’s conditions of approval. BLC Fleming posted all required improvement securities for all three phases of the Project at that time (“Original Securities”).
City of Menifee Staff Report
Tract Map 37391, Legado Phase 1 - Replacement Agreement June 19, 2024
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Following the City’s approval of the Original Agreements and Original Securities, BLC Fleming provided the City with Increase Riders to the Original Securities’ amounts related to flood control drainage for the Project. The amount of the increased drainage securities that were provided resulted from updated cost estimates prepared by the Riverside County Flood Control & Water Conservation District (RCFC&WCD) after City approval of the Project. A summary of the Original Securities for drainage and the associated Increase Riders received is provided in Table 1 below.
TABLE 1 – STORM DRAIN INFRASTRUCTURE IMPROVEMENTS INCREASE RIDERS TM 37391
Improvement Security No.
Original Faithful
Performance
Amount
Increased Faithful
Performance
Amount (Rider)
IP21-030 – Drainage PB03010409619 $ 362,000 $1,895,863 IP21-031 – Drainage PB03010409620 $1,872,000 $5,977,099 IP21-032 – Drainage PB03010409621 $ 516,500 $1,135,983 IP21-033 – Drainage PB03010409622 $3,893,000 $9,426,731 IP21-034 – Drainage PB03010409623 $ 215,500 $ 638,810 IP21-035 - Drainage PB03010409656 $1,093,500 $3,380,790 IP21-036 – Drainage PB03010409624 $2,149,000 $4,844,108 IP21-037 - Drainage PB03010409657 $ 340,500 $ 680,491 IP21-038 – Drainage PB03010409625 $ 308,500 $ 724,399 IP21-039 - Drainage PB03010409666 $ 382,500 $1,636,405 IP21-040 – Drainage PB03010409626 $1,092,500 $2,557,402 Total $12,225,500 $32,898,081
Phase 1 of the Project has now been transferred to a new developer, Lennar Homes of California, LLC, a California Limited Liability Company (“Developer”). The Developer has requested approval of a Subdivision Improvement Agreement (“Replacement Agreement”) to replace the Original Agreement associated with the Project’s Phase 1 backbone infrastructure improvements. The Replacement Agreement requires that improvement securities (“Replacement Securities”) are posted to guarantee the completion of the required backbone street, drainage, water, recycled water, and sewer improvements, and the placement of survey monuments, within 24 months from the City Council agreement approval date. Based on transfer of ownership for Phase 1 of the Project, BLC Fleming has also requested release of the Original Securities and Increase Riders held for Phase 1, as they would be replaced by the Developer with approval of this item.
Staff has reviewed the Replacement Agreement, determined that it meets the requirements of the Project’s conditions, confirmed that the Replacement Securities have been posted, and verified that the Original Securities and Increase Riders held for Phase 1 may be released.
Summaries of the Replacement Securities are provided in Table Nos. 2 and 3 on the following page. All Replacement Securities provided by the Developer for Phase 1 drainage improvements have been established in the full amounts previously required by RCFC&WCD.
City of Menifee Staff Report
Tract Map 37391, Legado Phase 1 - Replacement Agreement June 19, 2024
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TABLE 2 – REPLACEMENT PHASE 1 BACKBONE INFRASTRUCTURE IMPROVEMENTS TM 37391
Improvement Security Faithful
Performance
Material and
Labor
IP21-026 – Street,
Drainage, Water, Recycled
Water, Sewer
SU1200192 $9,169,000 $4,584,500
IP21-028 – Street,
Drainage, Water, Recycled
Water, Sewer
024275899 $4,809,000 $2,404,500
IP21-030 – Drainage 30217710 $1,895,863 $ 947,931
IP21-031 – Drainage 800176309 $5,977,099 $2,998,549
IP21-032 – Drainage 30217718 $1,135,983 $ 567,991
IP21-033 – Drainage 30217731 $9,426,731 $4,713,365
IP21-034 – Drainage 024275900 $ 638,810 $ 319,405
IP21-036 – Drainage 9448375 $4,844,108 $2,422,054
IP21-038 – Drainage 72BSBJE0679 $ 724,399 $ 362,199 IP21-040 – Drainage 024275891 $2,557,402 $1,278,701
IP21-059 - Landscape SU1200190 $5,237,000 $2,618,500
IP21-060 – Traffic Signal 0809090 $1,088,500 $ 544,250 IP21-068 – Drainage 024275897 $ 19,500 $ 9,750 IP21-069 – Drainage 0809093 $ 69,000 $ 34,500
IP21-078 – Landscape 024275896 $ 616,000 $ 308,000
IP21-079 – Landscape 0809091 $1,161,000 $ 580,500
IP21-088 – Traffic Signal 0809092 $ 471,000 $ 235,500 Total $49,840,395 $24,930,195
TABLE 3 – REPLACEMENT SURVEY MONUMENTS TM 37391
Improvement Security
Survey Monument 024275895 $ 53,640
Total $ 53,640
Original Securities to be released, pending City Council approval, are provided in Table Nos. 4 and 5 below and on the following page.
TABLE 4 – ORIGINAL PHASE 1 BACKBONE INFRASTRUCTURE IMPROVEMENTS TM 37391
Improvement Security Faithful
Performance
Material and
Labor
IP21-026 – Street,
Drainage, Water, Recycled
Water, Sewer
PB03010409617 $9,169,000 $4,584,500
IP21-028 – Street,
Drainage, Water, Recycled
Water, Sewer
PB03010409618 $4,809,000 $2,404,500
IP21-030 – Drainage PB03010409619 $1,895,863 $ 947,931 IP21-031 – Drainage PB03010409620 $5,977,099 $2,998,549 City of Menifee Staff Report
Tract Map 37391, Legado Phase 1 - Replacement Agreement June 19, 2024
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8 7
IP21-032 – Drainage PB03010409621 $1,135,983 $ 567,991 IP21-033 – Drainage PB03010409622 $9,426,731 $4,713,365 IP21-034 – Drainage PB03010409623 $ 638,810 $ 319,405 IP21-036 – Drainage PB03010409624 $4,844,108 $2,422,054 IP21-038 – Drainage PB03010409625 $ 724,399 $ 362,199 IP21-040 – Drainage PB03010409626 $2,557,402 $1,278,701 IP21-059 - Landscape PB03010409627 $5,237,000 $2,618,500 IP21-060 – Traffic Signal PB03010409628 $1,088,500 $ 544,250 IP21-068 – Drainage PB03010409629 $ 19,500 $ 9,750 IP21-069 – Drainage PB03010409630 $ 69,000 $ 34,500 IP21-078 – Landscape PB03010409631 $ 616,000 $ 308,000 IP21-079 – Landscape PB03010409632 $1,161,000 $ 580,500 IP21-088 – Traffic Signal PB03010409633 $ 471,000 $ 235,500 Total $49,840,395 $24,930,195
All Original Security drainage amounts shown above include any associated Increase Rider amounts.
TABLE 5 – ORIGINAL SURVEY MONUMENTS TM 37391
Improvement Security
Survey Monument PB03010409616 $ 53,640
Total $ 53,640
Due to the volume of security documents referenced in this report, only the Replacement Agreement and Replacement Securities have been provided as attachments. The Original Agreements, Original Securities, and Increase Riders are available, and on file, in the Office of the City Clerk.
It is important to note that only the Original Securities associated with Phase 1 of the Project are being replaced by the Developer and all Replacement Securities provided by the Developer for Phase 1 drainage improvements have been established in the full amounts previously required by RCFC&WCD. The Original Agreements and Original Securities posted by BLC Fleming for Phases 2 and 3 would remain in place.
STRATEGIC PLAN OBJECTIVE
Safe and Vibrant Community
FISCAL IMPACT
There is no fiscal impact associated with the recommended action. The Developer has paid all necessary fees associated with the recommended action.
ATTACHMENTS
1. Project Map
2. Replacement Agreement
3. Replacement Improvement Bonds