RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Menifee
29844 Haun Road
Menifee, California 92586
Attn: City Clerk
AMENDMENT NO. 1 TO THE DEVELOPMENT AGREEMENT
BY AND BETWEEN
CITY OF MENIFEE
AND
BLC FLEMING LLC, AND LENNAR HOMES OF CALIFORNIA, LLC,
REGARDING THE LEGADO SPECIFIC PLAN PROJECT
This Amendment No. 1 to the Development Agreement (hereinafter “Agreement”) by and between the CITY OF MENIFEE (hereinafter “CITY”'), a municipal corporation of the State of California, and LENNAR HOMES OF CALIFORNIA, LLC, a California limited liability company, who is successor-in-interest to BLC FLEMING LLC, a Delaware limited liability company (“D EVELOPER”) for a portion of this Agreement is entered into on the ___ day of _________, 2025 (“EFFECTIVE DATE”) is made with reference to the following facts and objectives:
RECITALS
A. On or about June 3, 2020, the City and BLC Fleming, LLC entered into that certain Development Agreement By and Between the City of Menifee and BLC Fleming, LLC regarding the Legado Specific Plan Project (“Original DA”).
B. On or about March 8, 2024, Lennar Homes of California, LLC (“Developer”) became the successor in interest to the rights and obligations of certain portion of BLC Fleming, LLC under the Original DA.
C. The Developer has encountered delays outside of its control in relation to the parks and paseos construction costs that have delayed the parks and paseos construction as previously contemplated in the Original Development DA and the park construction costs have increased from the maximum developer contribution identified in the Development Agreement Original DA. The City desires to accommodate the Developer’s request to facilitate the continued successful development of the Project and provision of park and paseo amenities consistent with the vision of the Specific Plan, and therefore, the parties now desire to amend the Original DA as set forth is this first amendment:
In consideration of the foregoing and pursuant to Section 3.5 of the Development Agreement, the Development Agreement is hereby further amended as follows:
AGREEMENT
1. Use of Capitalized Terms. Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meaning assigned to such terms in the Original DA.
2. “Agreement” References. Unless the context requires otherwise, refences to the “Agreement” or the “Development Agreement” in this Amendment shall mean and refer to the Original DA.
3. Revision to Section 1.1. Definitions of the Development Agreement is amended to add 1.1.58:
1.1.58 “Lennar Phase 1” means the development of the following lots: Tracts 37408-1 (Lots 1-73); Tracts 37408-2 (Lots 1-49); Tracts 37408-3 (Lots 1-115); Tracts 37408-4 (Lots 1-42); Tract 37409-1 (Lots 1-86); Tract 37409-2 (Lots 1-67); and Tract 37409-3 (Lots 1-59).
4. Revision to Section 5.1 of the Development Agreement is amended to read in its entirety as follows:
5.1 Development Fees. The current Development Fees applicable to the Project are in the amount set forth in Exhibit E, DEVELOPER agrees that all Development Approvals and Subsequent Development Approvals that do not require an amendment to this Agreement under Section 3.5 shall be subject to the Development Fees. DEVELOPER and CITY further agree that the Development Fees (shown on and subject to adjustments as allowed in Exhibit E) shall remain fixed for a period of seven (7) years from the Effective Date, except for lots located within Lennar Phase 1. If the CITY incorporates automatic periodic increases of the Development Fees applicable to all CITY development projects, following the seven (7) year fixed period, the Project will be subject to only 50% of such accrued periodic increases for a three (3) year period whether the periodic increase occurred within the initial seven (7) year fixed period or after, except within Lennar Phase 1. Lots within Lennar Phase 1 are subject to the Development Fees applicable to the fixed amounts shown in Exhibit E for a period of ten (10) years following the Effective Date. Any Development Fees that are due ten (10) or more years following the Effective Date shall be subject to the full Development Fees in effect at the time due.
5. Revisions to Section 6.2.2 Tentative Tract Map No. 37408 Neighborhood Park and Paseo Legado West Improvements (c) and (d) of the Development Agreement is are amended to read in its entirety as follows:
c) Review of Bid. Prior to entering into a construction contract for the 37408 Park Improvements, DEVELOPER shall deliver to CITY DEVELOPER'S 37408 Park Selected Contract which, when combined with a fifteen five percent (15%) contingency and all other categories of Actual Costs of Construction, shall not exceed the amount specified as the Project Cost for the 37408 Park and the Paseo Legado West Improvements in Exhibit F-3. CITY shall have fifteen (15) days from the delivery of the 37408 Park Selected Contract to approve or reject the 37408 Park Selected Contract through the delivery of the 37408 Park Contract Notice. CITY's acceptance or rejection of the 37408 Park Selected Contract shall be based on (i) commercially reasonable considerations that are consistent with CITY's historic practices and/or facts or concerns disclosed upon a reasonable review of the bid documents, or (ii) concern that the costs of the 37408 Park Improvements will exceed DEVELOPER's obligations under this Agreement, thereby resulting in a potential financial exposure to the CITY. If CITY 37408 Park Selected Contract, it shall identify reasonable requested changes in such contract in the 37408 Contract Notice (including, without limitations, requests to modify or value engineer park features to reduce the overall cost as necessary to remove any financial exposure of CITY) and DEVELOPER shall make reasonable efforts to obtain a revised bid that addresses the issues identified in the 37408 Park Contract Notice and submit the same to the CITY. CITY shall have fifteen (15) days from the delivery of the revised bid to approve or reject the revised bid in its reasonable discretion. If CITY rejects the revised 37408 Park Selected Contract and any revised bid, then DEVELOPER may either shall make further modifications to address CITY's concerns, or may demand the engagement of a neutral third party, selected upon the mutual agreement of the Parties, that will perform an expedited evaluation of the CITY's concerns and DEVELO:PER's responses thereto; said expedited review shall be completed within sixty (60) days of DEVELOPER's demand for a review. If CITY refuses to accept and implement the conclusions and recommendations of the neutral third party, DEVELOPER's sole obligation related to the 37408 Park shall be to assign the 37408 Park Construction Drawings to CITY and to pay applicable Development Fee fees subject to credits for DEVELOPER's cost in preparing the 37408 Park Construction Drawings. CITY' s failure to provide DEVELOPER a 37408 Park Contract Notice within fifteen (15) days of delivery shall be deemed CITY's approval of the 37408 Park Selected Contract, so long as concurrent with DEVELOPER's delivery of the proposed 37408 Park Selected Contract (and any revisions thereto) to CITY DEVELOPER includes a cover letter that states in the first paragraph as follows: "IMPORTANT, DELIVERY OF THIS
CONTRACT FOR CITY REVIEW IS SUBJECT TO SPECIFIC OBLIGATION IN SECTION 6.2.2(c) OF THE LEGADO DEVELOPMENT AGREEMENT.
SPECIFICALLY, IF CITY FAILS TO EITHER APPROVE OR REJECT THE ATTACHED CONTRACT WITHIN 15 DAYS OF THE RECEIPT OF THIS LETTER, CITY WILL BE DEEMED TO HAVE APPROVED THE CONTRACT". For the avoidance of doubt, nothing in this Section shall require that the CITY contribute any general funds or other funds (except as specified in the Reimbursement Agreement for the 37408 Park Improvements) toward the 37408 Park Improvements. Further, DEVELOPER agrees to bear all costs of design, planning, and construction of the 37408 Park Improvements in a manner consistent with the Plot Plan conceptual designs (as modified to comply with all applicable building and fire codes) without any additional reimbursements or contributions from the CITY. DEVELOPER further agrees that payment of applicable Development Fees subject to credits for DEVELOPER’s cost in preparing the 37408 Park Construction Drawings does not meet DEVELOPER’s obligations under this Agreement or meet the conditions of approval associated with this Agreement.
(d) Completion of Improvement. The 37408 Park Improvements shall be completed prior to the issuance of the certificate of occupancy for the 140th 200th Project dwelling unit in Planning Areas 1, 2, 3, and 4 of Tentative Tract Map No. 37408 (or final inspection if no certificates of occupancies are issued for dwelling units) unless the Director of Public Works approves a later completion date to address construction compatibility and safety issues related to occupied residences. For purposes of this subsection, "completed" means the 37408 Park Improvements shall be open to the public after passing all required inspections and completing a 90-day maintenance and landscape establishment period. CITY shall promptly grant all required approvals and conduct all necessary inspections related to the 37408 Park Improvements. City's unreasonable delay in making an approval or inspection related to the 37408 Park Improvements shall not serve as a basis for CITY in delaying the filing or recordation of any Project final map, issuing a building permit, or issuing a certificate of occupancy.
6. Revisions to Section 6.2.3 Tentative Tract Map (No. 37409) Neighborhood Park and Paseo Legado East Improvements (c) and (d) of the Development Agreement is are amended to read in its entirety as follows:
(c) Review of Bid. Prior to entering into a construction contract for the 37409 Park Improvements, DEVELOPER shall deliver to CITY DEVELOPER'S 37409 Park Selected Contract, which, when combined with a fifteen five percent (15%) contingency and all other categories of Actual Costs of Construction, shall not exceed the amount specified as the Project Cost for the 37409 Park and the Paseo Legado East Improvements in Exhibit F-3. CITY shall have fifteen (15) days from the delivery of the 37409 Park Selected Contract to approve or reject the 37409 Park Selected Contract through the delivery of the 37408 Park Contract Notice. CITY's acceptance or rejection of the 37409 Park Selected Contract shall be based on (i) commercially reasonable considerations that are consistent with CITY's historic practices and/or facts or concerns disclosed upon a reasonable review of the bid documents, or (ii) concern that the costs of the 37409 Park Improvements will exceed DEVELOPER's obligations under this Agreement, thereby resulting in a potential financial exposure to the CITY. If CITY refuses to accept the 37409 Park Selected Contract, it shall identify reasonable requested changes in such contract in the 37409 Contract Notice (including, without limitations, requests to modify or value engineer park features to reduce the overall cost as necessary to remove any financial exposure of CITY) and DEVELOPER shall make reasonable efforts to obtain a revised bid that addresses the issues identified in the 37409 Park Contract Notice and submit the same to the CITY. CITY shall have fifteen (15) days from the delivery of the revised bid to approve or reject the revised bid in its reasonable discretion. If CITY rejects the revised 37409 Park Selected Contract and any revised bid, then DEVELOPER may either shall make further modifications to address CITY's concerns, or may demand the engagement of a neutral third party, selected upon the mutual agreement of the Parties, that will perform an expedited evaluation of the CITY's concerns and DEVELOPER's responses thereto; said expedited review shall be completed within sixty (60) days of DEVELOPER's demand for a review. If CITY refuses to accept and implement the conclusions and recommendations of the neutral third party, DEVELOPER's sole obligation related to the 37409 Park shall be to assign the 37409 Park Construction Drawings to CITY and to pay applicable Development Fee fees subject to credits for DEVELOPER's cost in preparing the 37409 Park Construction Drawings. CITY' s failure to provide DEVELOPER a 37409 Park Contract Notice within fifteen (15) days of delivery shall be deemed CITY's approval of the 37409 Park Selected Contract, so long as concurrent with DEVELOPER's delivery of the proposed 37409 Park Selected Contract (and any revisions thereto) to CITY DEVELOPER includes a cover letter that states in the first paragraph as follows:
"IMPORTANT, DELIVERY OF THIS CONTRACT FOR CITY REVIEW IS SUBJECT TO SPECIFIC OBLIGATION IN SECTION 6.2.3(c) OF THE LEGADO DEVELOPMENT AGREEMENT. SPECIFICALLY, IF CITY FAILS TO EITHER APPROVE OR REJECT THE ATTACHED CONTRACT WITHIN 15 DAYS OF THE RECEIPT OF THIS LETTER. CITY WILL BE DEEMED TO HAVE APPROVED THE CONTRACT". For the avoidance of doubt, nothing in this Section shall require that the CITY contribute any general funds or other funds (except as specified in the Reimbursement Agreement for the 37409 Park Improvements) toward the 37409 Park Improvements. Further, DEVELOPER agrees to bear all costs of design, planning, and construction of the 37409 Park Improvements in a manner consistent with the Plot Plan conceptual designs (as modified to exclude the bathroom facility and comply with all applicable building and fire codes) without any additional reimbursements or contributions from the CITY. DEVELOPER further agrees that payment of applicable Development Fees subject to credits for DEVELOPER’s cost in preparing the 37409 Park Construction Drawings does not meet DEVELOPER’s obligations under this Agreement or meet the conditions of approval associated with this Agreement.
(d) Completion of Improvements. The 37409 Park Improvements shall be completed prior to the issuance of the certificate of occupancy for the 140 th 95th Project dwelling unit in Planning Areas 8, 9, 10, and 11 of Tentative Tract Map No. 37409 (or final inspection if no certificates of occupancies are issued for dwelling units) unless the Director of Public Works approves a later completion date to address construction compatibility and safety issues related to occupied residences. For purposes of this subsection, "completed" means the 37409 Park Improvements shall be open to the public after passing all required inspections and completing a 90-day maintenance and landscape establishment period. CITY shall promptly grant all required approvals and conduct all necessary inspections related to the 37409 Park Improvements. CITY's unreasonable delay in making an approval or inspection related to the 37409 Park shall not serve as a basis for CITY in delaying the filing or recordation of any Project final map, issuing a building permit, or issuing a certificate of occupancy.
7. Section 9.1.3 Prevailing Wage Increases to Developer’s Financial Obligations to Complete Park and Paseos as Contemplated in Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409 is added to the Development Agreement as follows:
Section 9.1.3 Prevailing Wage Increases to Developer’s Financial Obligations to Complete Park and Paseos as Contemplated in Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409. In additional DEVELOPER’S indemnification responsibilities under Section 9.1 of this Agreement, DEVELOPER understands and agrees that any costs to planning and constructing the park and paseos required under Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409 may surpass DEVELOPER’S original contribution maximum as contemplated under this Agreement. Moreover, should DEVELOPER’S compliance with any state or federal law, including, but not limited to, Labor Code Section 1781 regarding prevailing wage, require additional payments or expenditures by DEVELOPER to complete the parks and paseos required under Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409, DEVELOPER agrees to bear the full cost of performance without any contribution from the City or changes to the conceptual park and paseos plan outlined in Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409.
8. Section 3.12 Bonds and Acceptance of Parks and Points of Connection/Rights of Way Maintenance is added to the Development Agreement to read in its entirety as follows:
Section 3.12 Bonds and Acceptance of Parks and Points of Connection/Right of Way Maintenance. The City Manager or his/her designee shall be authorized to review, amend, and approve any and all bonds or instruments necessary to allow DEVELOPER to transfer maintenance responsibility of the 37408 Park Improvements and the 37409 Park Improvements as well as any Points of Connection to the CITY after the 90-day maintenance and landscape establishment period but before the one-year warranty period required by the Menifee Municipal Code.
9. Section 9.1.1 General Indemnity of the Development agreement is amended to read in its entirety as follows:
Section 9.1.1 General Indemnity. DEVELOPER agrees to indemnify, protect, defend, and hold harmless the CITY Parties as well as Community Facilities District 2022-3 (“CFD 2022-3”) from and against any and all Claims which may arise, directly or indirectly, from the acts, omissions, or operations of DEVELOPER or DEVELOPER's agents, contractors, subcontractors, agents, or employees pursuant to this Agreement, but excluding any loss resulting solely from the intentional or active negligence of the CITY Parties or CFD 2022-
03. Notwithstanding the foregoing, (i) CITY and CFD 2022-03 shall have the right to select and retain counsel to defend any such action or actions and DEVELOPER shall pay the cost thereof; provided, however, that the Parties and CFD 2022-03 agree to attempt in good faith to coordinate and/or consolidate their defense of any Claim that is subject to the indemnification provisions of this Section; and (ii) this indemnity obligation shall not apply to any Claim for which DEVELOPER has provided a separate indemnity to the CITY and/or CFD 2022-03 by way of a separate instrument mutually accepted by the Parties and CFD 2022-03.
10. Section 9.1.2 Prevailing Wage Indemnity and Notice to Developer of Labor Code Section 1781 of the Development Agreement is amended to read in its entirety as follows:
9.1.2 Prevailing Wage Indemnity and Notice to Developer of Labor Code Section 1781. In connection with, but without limiting, the indemnification obligations set forth in Section 9 .1.1, DEVELOPER hereby expressly acknowledges and agrees that the CITY and CFD 2022-03 is are not by this Agreement affirmatively representing, and has have not previously affirmatively represented, to the DEVELOPER or any contractor(s) of DEVELOPER for any construction on or development on or adjacent to the Property, in writing or otherwise, in a call for bids or any agreement or otherwise, that any work to be undertaken on the Property, as may be referred to in this Agreement or construed under this Agreement, including, but not limited to, Tentative Tract Map No. 37408 Neighborhood Park and Paseo Legado West Improvements, Tentative Tract Map (No. 37409) Neighborhood Park and Paseo Legado East Improvements, and those improvements receiving reimbursements or funding from CFD 2022-3, is not a "public work," as defined in Section 1720 of the Labor Code, or under any similar existing or hereinafter enacted law or regulation. The Parties agree that, in connection with the Development and construction (as defined by Applicable Law) of the Project, including, without limitation, any and all public works (as defined by Applicable Law), DEVELOPER shall bear all risks of payment or non-payment of prevailing wages under California law and/or federal law and/or the implementation of Labor Code Section 1781, as the same may be amended from time to time, and/or any other similar law. With respect to the foregoing, DEVELOPER shall be solely responsible, expressly or impliedly and legally and financially, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, and labor laws and standards, and CITY and CFD 2022-3 makes no representation, either legally and/or financially, as to the applicability or non-applicability of any federal, state and local laws to the construction of the Project as it may be amended pursuant hereto or otherwise.
Without limiting the foregoing, DEVELOPER shall indemnify, protect, defend and hold harmless the CITY Parties and CFD 2022-3, with counsel reasonably acceptable to CITY and CFD 2022-3, from and against "increased costs" as defined in California Labor Code Section 1781 (including CITY's reasonable attorneys' fees, cost and litigation costs, and fees of expert witnesses) in connection with the Development or construction (as defined by Applicable Law) of or on the Property, that results or arises in any way from (1) noncompliance by DEVELOPER of the requirement, if and to the extent applicable, to pay federal or state prevailing wages and hire apprentices, or (2) failure by DEVELOPER to provide any required disclosure or identification as required by California Labor Code Sections l 720 et seq. including without limitation specifically Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive the expiration or earlier termination of this Agreement.
11. Cooperation: Further Acts. Each party agrees to provide reasonable assistance to the other and cooperate to carry out the intent and fulfill the provisions of this Amendment. Each of the parties shall promptly execute and deliver all documents and perform all acts necessary to carry out the matters contemplated by this Amendment.
12. Integration; Interpretation; Recordation. The Original DA and this Amendment reflect the complete understanding of the parties with respect to the subject matter thereof. To the extent this Amendment conflicts with the Original DA, or any prior interpretation thereof, this Amendment supersedes the Original DA and any prior interpretations thereof. In all other respects, the parties hereto re-affirm and ratify all other provisions of the Original DA. This First Amendment shall be duly recorded following its full execution.
13. Counterparts. This First Amendment may be executed in counterparts, each of which shall be deemed an original, and all such counterparts, when taken together, shall constitute one agreement.
14. Authority. The person or persons executing this First Amendment ton behalf of the City and Developer warrant and represent that they have the authority to execute this First Amendment and the authority to bind the City and Developer, as applicable, to the performance of their respective obligations hereunder
IN WITNESS WHEREOF, the City and the Developer have signed this First Amendment, by and through the signatures of their authorized representative as of the day and year first hereinabove written.
CITY OF MENIFEE, LENNAR HOMES OF CALIFORNIA, LLC
a California municipal corporation a California Limited Liability Corporation By:__________________________ By:_______________________________ Mayor
ATTEST:
_______________________________
City Clerk
APPROVED AS TO FORM:
_______________________________
Jeffrey Melching, Esq.
Rutan & Tucker, LLP
City Attorney