DISCUSSION:
Over the years, the City has collected impact fees as a condition of approval for multiple development projects. These funds are designed for specific future improvements. On occasion, these future improvements are not able to be constructed in the year in which the fees were collected and therefore, the City must retain these funds.
Currently, the City is retaining funds deposited for the following 3 projects:
#1 1024 Florence Avenue – Fuentes Construction
On January 14, 2000, the City issued a building permit for the construction of a new single-family dwelling located at 1024 Florence Avenue. At that time, City sewer service was not available. As a condition of approval, the applicant was required to deposit a security for future improvements along its property including connection to the City sewer system, once available, and installation of curb, gutter and sidewalk improvements. On March 8, 2001, based on a cost estimate approved by the City Engineer at that time, a deposit in the amount of $2,500 was made into the City’s Trust Account.
City sewer service is not available in this area and therefore, connection cannot be made. The funds on deposit will remain in the Trust Account until City sewer service is available.
The monies are held in Fund 3510 – Securities for Future Improvements and are identified as Project No. 100782 – Florence Avenue Improvements. #2 Shadow Creek Apartments (3055 Floyd Avenue) – American Home Builders On April 19, 2004, the Planning Commission adopted Resolution No. 2004-21, approving a Final Development Plan for a 232-unit apartment complex on property located near the northeast corner of Floyd and Roselle Avenues. As a condition of approval, the applicant was required to deposit a security for the construction of its portion of the Beta Street extension on the north side of the property. (The additional funds for the Beta Street extension will be provided by the adjacent property when development occurs.) An Agreement for Contribution to Future Street Improvements was executed on September 2, 2005, between the developer, American Home Builders, and the City of Modesto. On September 2, 2005, based on cost estimates approved by the City Engineer at the time, a deposit in the amount of $29,393.72 was made into the City’s Trust Account.
Development has not yet occurred on the adjacent property; therefore, the additional funds required for the construction of the Beta Street extension are not yet available.
The deposit made by the developer in 2005 will remain in the Trust Account until development occurs on the adjacent property.
The monies are held in Fund 3510 – Securities for Future Improvements and are identified as Project No. 100783 – Shadow Creek Apartments. #24..
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City Council, December 3, 2024
Fiscal Year 2023-24 Annual Report of Funds Held for Future Improvements
#3 Walgreens Pharmacy (3019 Floyd Avenue) – Best Modesto Partners On March 3, 2008, the Planning Commission adopted Resolution No. 2008-19, approving a Final Development Plan for the Walgreens Pharmacy located on the north side of Floyd Avenue and on the east side of Roselle Avenue. The existing driveway on Roselle Avenue provides access to the site; however, the driveway is located in a bus turnout and does not meet the 350-foot required distance from the intersection. The project was approved with the existing driveway in its current location until development of the property to the north occurs. The applicant entered into a Reciprocal Access Agreement with the City and, as a condition of approval, deposited funds for future improvements. Future improvements include the construction of the new on-site driveway and the reconstruction of the bus turnout and the off-site driveway access.
Development has not yet occurred on the property to the north. On September 30, 2008, Best Modesto Partners deposited $27,165 into the City’s Trust Account. The funds will remain in the Trust Account until development occurs on the neighboring parcel.
The monies are held in Fund 3510 - Securities for Future Improvements and are identified as Project No. 100784 – Floyd Avenue Walgreens.
Table 1 details the original deposit amounts for the above-mentioned projects, the total interest accrued to-date, the ending balance as of June 30, 2024, the total percentage of the improvement cost funded by the fee, as well as the estimated construction start and end dates, as required by California Government Code section 66006(b). The below projects will be funded by the developer, and have no estimated construction timeline to-date.
Table 1: Developer Deposits as of June 30, 2024
FISCAL IMPACT:
Acceptance of the Fiscal Year 2023-24 Annual Report of Funds Held for Future Improvements has no fiscal impact to the General Fund.
COMMITTEE RECOMMENDATION:
Date of
Deposit
Provided
By Description
Original
Deposit
Amount
Interest
Accrued to
Date
End Balance
(Includes
Interest)
3/8/2001 Fuentes
Construction
Security for Future Work - Frontage
Improvements at 1024 Florence $ 2,500.00 $ 750.90 $ 3,250.90 6/20/2005
American
Home
Builders
Security for Future Work - Construction of
Beta Street on the north side of the
Shadow Creek Apartments
$ 29,393.72 $ 13,659.96 $ 43,053.68
9/30/2008
BestModesto
Partners
Security for Future Work - On-Site
Driveway Improvements for future
reciprocal access way at the Walgreens
located on the corner of Floyd & Roselle
and Bus TurnOut Reconstruction
$ 27,165.00 $ 7,576.31 $ 34,741.31
TOTAL SECURITIES ON
FILE
$ 59,058.72 $ 21,987.17 $ 81,045.89
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City Council, December 3, 2024
Fiscal Year 2023-24 Annual Report of Funds Held for Future Improvements
The Annual Report for Securities Held for Future Improvements does not require a committee action to proceed to Council.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution accepting the Fiscal Year 2023-24 Annual Report of Funds Held for Future Improvements and making findings related to each security on file.
Approved by:
Jessica Hill, Director of Community and
Economic Development
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
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12/3/2024/CEDD/EGarcia/Item XX 1 2024-
MODESTO CITY COUNCIL
RESOLUTION NO. 2024-
RESOLUTION ACCEPTING THE FISCAL YEAR 2023-24 ANNUAL REPORT
OF FUNDS HELD FOR FUTURE IMPROVEMENTS AND MAKING FINDINGS
RELATED TO EACH SECURITY ON FILE
WHEREAS, California Government Code Sections 66000 and 66006 require that the City make certain information available to the public and findings relating to the necessity of collecting fees for new development; and
WHEREAS, the City is collecting impact fees as security for future improvements that will be needed as a condition of approval for new development; and WHEREAS, $2,500 in impact fees were paid by Fuentes Construction on March 8, 2001, as a condition of approval for Project #100782 located at 1024 Florence Avenue, Modesto, for future improvements including connection to the City sewer system and the installation of curb, gutter and sidewalk improvements; and WHEREAS, $29,393.72 in impact fees were collected from American Home Builders as a condition of approval for Project #100783 located at 3055 Floyd Avenue, Modesto, on June 20, 2005, for future improvements including the expansion of Beta Street to the north of the property; and
WHEREAS, $27,165 in impact fees were collected from Best Modesto Partners on September 30, 2008, as a condition of approval for Project #100784 located at 3019 Floyd Avenue, Modesto, for future improvements including the construction of an on-site driveway and the reconstruction of the nearby bus turnout and off-site driveway; and WHEREAS, it has been determined that full funding for the various improvements has not yet been received; and
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12/3/2024/CEDD/EGarcia/Item XX 2 2024-
WHEREAS, it has been determined by staff that the impact fees collected for all three projects should be retained until additional funding can be obtained; and WHEREAS, a public hearing notice was posted in the Modesto Bee in accordance with Government Code 66002 and
WHEREAS, a public hearing at the City Council in the Tenth Street Place Chambers located at 1010 Tenth Street, Modesto, California was set for December 3, 2024, to enable the public to have the opportunity to comment on the impact fees collected.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto that it hereby accepts the Fiscal Year 2023-24 Annual Report of Funds Held for Future Improvements and making findings related to each security on file. That the revenue anticipated for the full development of infrastructure improvements required for these projects have not been fully collected to complete the financing of said improvements. It is presently anticipated that there will be no regular sources of funding to develop the required improvements apart from impact fees collected from neighboring properties.
1. That the anticipated dates for the full collection of fees is unknown at this time as impact fees are based on development activity which is not controlled by the City.
2. That the funding for the future improvements to include connection to the City sewer system and the installation of curb, gutter and sidewalk improvements located at 1024 Florence Avenue, Modesto, is not yet known, but there is still a need; and therefore fees should still be retained for these purposes.
3. That the timing for the future improvements including the expansion of Beta Street to the north of the property located at 3055 Floyd Avenue, Modesto, is not #24..
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12/3/2024/CEDD/EGarcia/Item XX 3 2024-
yet known, but there is still a need; and therefore fees should still be retained for these purposes.
4. That the timing for the future improvements including the construction of an onsite driveway and the reconstruction of the nearby bus turnout and off-site driveway located at 3019 Floyd Avenue, Modesto, is not yet known, but there is still a need; and therefore fees should still be retained for these purposes. #24..
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12/3/2024/CEDD/EGarcia/Item XX 4 2024-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 3rd day of December, 2024, by Councilmember_____, who moved its adoption, which motion being duly seconded by Councilmember_____, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers: Name, Name, Name, Name, Name, Name, Mayor Name
NOES: Councilmembers: None
ABSENT: Councilmembers: None
ATTEST: ______________________________
DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: __________________________________
JOSE M. SANCHEZ, City Attorney
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
December 3, 2024
Date: October 14, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Community and Economic Development Director SUBJECT: Mills Act Contract for the Modesto State Theatre CONTACT: Michael Hren, AICP, Principal Planner
Contact Info: 209-577-5273, [email protected]
DESCRIPTION:
Hearing to consider a Historic Property Preservation Agreement (Mills Act Contract #13) for the State Theatre at 1307 J Street (owner: State Theatre of Modesto, Inc), Modesto Landmark Preservation Site #22. (Funding Source: Applicant Funded) STRATEGIC PLAN ELEMENT:
This project relates to Strategic Plan Goal B: Invest in Beautification Efforts. The Goal is to increase pride in Modesto’s diverse neighborhoods and business districts through beautification efforts and by investing in community assets and amenities. This project invests in a community asset, the State Theatre, to maintain, preserve, and beautify it.
BACKGROUND:
The State Theatre of Modesto was designated as Modesto Landmark Preservation Site #22 by Modesto City Council Resolution No. 95-11 on January 10, 1995. On May 9, 2024, State Theatre of Modesto, Inc. submitted an application for a Mills Act contract.
History of the Mills Act:
Enacted in 1972, the Mills Act legislation grants participating local governments (cities and counties) the authority to enter into contracts with owners of qualified historic properties who actively participate in the restoration and maintenance of their historic properties while receiving property tax relief. Mills Act contracts are for ten (10) years initially with automatic yearly extensions and stay with the property when ownership is transferred. Owners of historic buildings may qualify for property tax relief if they pledge to rehabilitate and maintain the historical and architectural character of their properties for at least a ten-year period.
A “Qualified historic property” meets either of the following criteria:
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City Council, December 3, 2024
Mills Act Contract for the Modesto State Theatre
Listed in the National Register of Historic Places or located in a registered historic district, as defined in Section 1.191-2(b) of Title 26 of the Code of Federal Regulations, or
Listed in any state, city, county, or city and county official register of historical or architecturally significant sites, places, or landmarks.
DISCUSSION:
The Mills Act contract is authorized under California Government Code Section 50280, et seq., which permits a local government to enter into a contract with an owner of a qualified historic property. California Government Code Section 502801, et seq., allows the City to offer property tax reductions to property owners in return for their agreement to restore, maintain, and protect the historical character of their properties. The State Theatre of Modesto, as a designated historic landmark, qualifies for such an agreement under this section. The applicant has provided the required documentation to the satisfaction of the Director of Community and Economic Development. The proposed contract is designated as Mills Act Contract #13.
General Plan Consistency:
The property is located at 1307 J Street, also known as Assessor’s Parcel Number 105- 016-008. The General Plan designation for the parcel is Downtown (D). The General Plan’s purpose and intent for the downtown designation is for it to be the focal point of community life and the social, cultural, business, governmental, and entertainment center of Stanislaus County. This vision will be achieved through partnerships between private enterprises and government agencies. The application for a Mills Act contract for the State Theatre is compatible with this purpose and intent and is thus consistent with the General Plan designation.
Zoning Conformance:
The State Theatre is a movie theatre, which is a permitted use in the Transition Downtown (TD) zone for a building with a shopfront frontage per Sections 10-7.5072 and 10-7.5143 of the Modesto Municipal Code.
FISCAL IMPACT:
Costs to the City related to reviewing and approving the contract are paid for by the application fees submitted by the applicant. The contract itself will reduce the tax revenue received by the City related to this property to provide for the use, maintenance, and restoration of the property to retain its characteristics as a property of historical significance. The County Assessor’s Office has provided staff with an estimated tax savings for the property of $6,030.95.
1 https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV§ionNum=50280 2 https://library.municode.com/ca/modesto/codes/code_of_ordinances?nodeId=TIT10ZORE_CH7OTZO_ ART5DOZO_10-7.507TRDOTDZO
3 https://library.municode.com/ca/modesto/codes/code_of_ordinances?nodeId=TIT10ZORE_CH7OTZO_ ART5DOZO_10-7.514USTY
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City Council, December 3, 2024
Mills Act Contract for the Modesto State Theatre
COMMITTEE RECOMMENDATION:
On September 16, 2024, this item was heard by the Landmark Preservation Commission at a Public Hearing. The Landmark Preservation Commission recommended that the City Council approve the contract as presented.
CEQA REQUIREMENTS:
This project is classified as categorically exempt pursuant to Section 15301 of the California Environmental Quality Act (CEQA) guidelines, which exempts existing facilities including the operation, repair, and maintenance of existing public or private structures and facilities. Staff have prepared a notice of exemption, and it is provided as Attachment
3. RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution approving a Historic Property Preservation Agreement (Mills Act Contract #13) for the State Theatre at 1307 J Street (owner: State Theatre of Modesto, Inc), Modesto Landmark Preservation Site #22, and authorizing the City Manager or designee to execute the Agreement.
Approved by:
Jessica Hill, Director of Community
and Economic Development
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
2. Historic Property Preservation Agreement
3. Notice of Exemption C&ED 2024-16
4. Landmark Preservation Commission Minutes, September 16, 2024 #25..
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MODESTO CITY COUNCIL
RESOLUTION NO. 2024-XX
RESOLUTION APPROVING A HISTORIC PROPERTY PRESERVATION
AGREEMENT (MILLS ACT CONTRACT #13) FOR THE STATE THEATRE AT 1307 J STREET (OWNER: STATE THEATRE OF MODESTO, INC), MODESTO LANDMARK PRESERVATION SITE #22, AND AUTHORIZING THE CITY
MANAGER OR DESIGNEE TO EXECUTE THE AGREEMENT
WHEREAS, California Government Code Section 50280, et seq., permits local governments to enter into contracts with the owners of qualified historical properties for the purpose of historic preservation, more commonly known as Mills Act contracts; and WHEREAS, Mills Act contracts require a property to first have been a Landmark Site prior to the creation of said contracts; and
WHEREAS, 1307 J Street, more commonly known as the State Theatre, was designated as a Modesto Landmark Preservation Site by Resolution 95-11; and WHEREAS, State Theatre of Modesto, Inc., owner of the property at 1307 J Street, has applied for a Mills Act contract for this site; and WHEREAS, Chapter 10 of Title IX of the Modesto Municipal Code establishes the authority for the Landmark Preservation Commission to recommend and the City Council to approve landmark preservation contracts, such as Mills Act contracts after benefit of a public hearing; and
WHEREAS, a Mills Act contract was prepared for 1307 J Street, which met State law and garnered staff support, given a reasonable relationship of past and future #25..
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estimates of improvement and maintenance to tax savings as a result of contract completion; and
WHEREAS, a public hearing was held by the Landmark Preservation Commission on September 16, 2024, in Room 3001, City Hall, 1010 10th Street, Modesto, at which the Commission recommended approval of Mills Act Contract #13 for State Theatre of Modesto, Inc. at 1307 J Street; and
WHEREAS, a public hearing was held by the Landmark Preservation Commission on September 16, 2024, in Room 3001, City Hall, 1010 10th Street, Modesto, at which the Commission determined that the proposed contract was exempt under Section 15301 of the CEQA Guidelines, Existing Facilities, which exempts the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use; and WHEREAS, after a public hearing held on December 03, 2024, in Council Chambers, 1010 10th Street, Modesto, the City Council found and determined that the Mills Act contract for the property at 1307 J Street, meets the requirements of Government Code Section 50280, et seq., and should be approved.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Modesto that the Historic Property Preservation Agreement (Mills Act Contract #13) for the State Theatre at 1307 J Street, more particularly described in Exhibit “A” attached hereto and incorporated by reference, is hereby approved, a copy of which is presented in Exhibit “B” attached hereto and incorporated by reference. #25..
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BE IT FURTHER RESOLVED that the City Manager or designee is hereby authorized to execute the agreement, in a form approved by the City Attorney.
BE IT FURTHER RESOLVED that the City Clerk shall cause the agreement to be recorded in the office of the County Recorder of the County of Stanislaus no later than twenty days after the execution of the agreement by the parties. #25..
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The foregoing resolution was introduced at a regular meeting of the City Council of the City of Modesto held on the 3rd day of December, 2024, by Councilmember _____, who moved its adoption, which motion being duly seconded by Councilmember _____, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: ________________________________
DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:
By: ______________________________
JOSE M. SANCHEZ, City Attorney
#25..
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“Exhibit A”
Legal description of 1307 J St.
Lots 17 thru 23 in Block 107 of the City of Modesto, according to the official map thereof, filed in the office of the recorder of Stanislaus County, California, on December 21, 1942 in Book 15 of Maps.
Exhibit “B”
#25..
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Historic Property Preservation Agreement (Mills Act Contract #13) for the State Theatre at 1307 J Street
#25..
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HISTORIC PROPERTY PRESERVATION AGREEMENT
This Historic Property Preservation Agreement ("Agreement"), made and entered into the City of Modesto, State of California, this _______ day of ___________, _______, by and between the CITY OF MODESTO, a municipal corporation of the State of California ("CITY") and State Theatre of Modesto, Inc ("OWNERS"). CITY and OWNERS may be referred to herein individually as a "Party" or collectively as the "Parties" or the "Parties to this Agreement." A. RECITALS.
1. California Government Code Section 50280, et seq., authorizes the CITY to enter into contracts an owner of qualified Historic Property to provide for the use, maintenance, and restoration of such Historic Property so as to retain its characteristics as property of historical significance.
2. OWNERS possess fee title in and to that certain real property, together with associated structures and improvements thereon, commonly known as the "State Theatre of Modesto" and shown on the Stanislaus County Property Tax Rolls as Assessor’s Parcel Number 105-016-008 and generally located at the street address 1307 J Street, Modesto, CA 95354 in the City of Modesto, ("Historic Property"). A legal description of the Historic Property is attached hereto as "Legal Description," marked as "Exhibit 1," and incorporated herein by reference.
3. On the 10th of January, 1995, the City Council adopted Resolution No. 95-11 designating the Historic Property as a Modesto Landmark Preservation Site pursuant to the terms and provisions of Chapter 10 of Title 9 of the Modesto Municipal Code.
4. CITY and OWNERS, for their mutual benefit, now desire to enter into this Agreement both to protect and preserve the characteristics of historical significance of the Historic Property and to qualify the Historic Property for an assessment of valuation pursuant to Section 439.2 of the California Revenue and Taxation Code.
B. AGREEMENT.
NOW, THEREFORE, CITY and OWNERS, in consideration of the mutual covenants and conditions set forth herein, do hereby agree as follows:
#25..
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1. Effective Date and Term of Agreement. This Agreement shall be effective and commence on ________________________, ("Effective Date"), and shall remain in effect for a term of ten (10) years thereafter. Each year upon the anniversary of the effective date, such initial term shall automatically be extended as provided in paragraph 2, below.
2. Renewal.
a. Each year on the anniversary of the Effective Date of this Agreement, ("renewal date"), one (1) year shall automatically be added to the initial term of this Agreement unless notice of nonrenewal is mailed as provided herein.
b. If OWNERS or CITY desires in any year not to renew the Agreement, that party shall serve written notice of nonrenewal of the Agreement on the other party in advance of the annual renewal date of the Agreement. Unless the notice is served by the OWNER at least ninety (90) days prior to the renewal date or by the CITY at least sixty (60) days prior to the renewal date, one (1) year shall automatically be added to the term of the Agreement as provided herein. c. Upon receipt by the OWNERS of a notice from the CITY of nonrenewal, the OWNERS may make a written protest of the notice of nonrenewal. The CITY may, at any time prior to the renewal date, withdraw the notice of nonrenewal.
d. If the CITY or the OWNERS serves notice of intent in any year not to renew the Agreement, the Agreement shall remain in effect for the balance of the period remaining since the original execution or the last renewal of the Agreement, as the case may be.
3. Standards for Historic Property. During the term of this Agreement, the Historic Property shall be subject to the following conditions, requirements, and restrictions:
a. OWNERS shall preserve and maintain the characteristics of historical significance of the Historic Property. "The Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings" dated 1990 includes minimum standards and conditions for maintenance, use, and preservation of the Historic Property, which shall apply to such property throughout the term of this Agreement.
#25..
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b. OWNERS shall, when necessary, restore and rehabilitate the Historic Property to conform to the rules and regulations, where applicable, of the Office of Historic Preservation of the State Department of Parks and Recreation, the United States Secretary of the Interior's Standards for Rehabilitation, and the State Historical Building Code and in accordance with the attached schedule of potential home improvements, drafted by the OWNERS and approved by the City Council, attached hereto as " Landmark Preservation Contract Plan for Improvements," marked as “Exhibit 2" and incorporated herein by reference. c. OWNERS shall allow for the examinations of the interior and exterior of the premises by the assessor, the State Department of Parks and Recreation, the State Board of Equalization, the CITY Landmark Preservation Commission, and the CITY prior to a new agreement, and every five years thereafter to determine the OWNERS' compliance with the Agreement.
4. Provision for Information.
a. OWNERS hereby agree to furnish CITY with any and all information requested by the CITY to determine compliance with the terms and provisions of this Agreement.
b. It shall be the duty of the OWNERS to keep and preserve, for the term of the Agreement, all records as may be necessary to determine the eligibility of the property involved, and the OWNERS' compliance with the terms and provisions of this Agreement, including, but not limited to blueprints, permits, historical and/or architectural review approvals, and schedules of potential home improvements drafted by the OWNERS and approved by the City Council.
5. Cancellation.
a. CITY, following a duly noticed public hearing as set forth in California Government Code Section 50280, et seq., may cancel this Agreement if it determines any one of the following:
i) the OWNERS breached any of the terms or conditions of this Agreement;
ii) the OWNERS have allowed the property to deteriorate to the point that it no longer meets standards for a qualified historic property;
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iii) the OWNERS have allowed the property to deteriorate to the point that it no longer meets standards as provided for in the Uniform Codes as adopted by the City Code,
which include, but are not limited to, the Uniform
Housing Code, the California State Historical Building
Code, the Uniform Fire Code, and the Uniform Code for
the Abatement of Dangerous Buildings;
b. CITY may also cancel this Agreement if it determines that the OWNERS have failed to restore or rehabilitate the property in the manner specified in subparagraph 3(b) of this Agreement.
c. In the event of cancellation, OWNERS shall be subject to payment of those cancellation fees set forth in Government Code Section 50280, et seq.
6. No Waiver of Breach.
a. No waiver by CITY of any breach under this Agreement shall be deemed to be a waiver of any other subsequent breach. CITY does not waive any claim of breach by OWNERS if CITY does not enforce or cancel this Agreement. All other remedies at law or in equity which are not otherwise provided for under the terms of this Agreement or in the CITY's laws and regulations are available to the CITY.
7. Binding Effect of Agreement.
a. The OWNERS hereby subject the Historic Property described in “Exhibit 1” hereto to the covenants, reservations, and restrictions as set forth in this Agreement. CITY and OWNERS hereby declare their specific intent that the covenants, reservations, and restrictions as set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the OWNERS' successors and assigns in title or interest to the Historic Property. Each and every contract, deed, or other instrument hereinafter executed, covering, encumbering, or conveying the Historic Property, or any portion hereof, shall conclusively be held to have been executed, delivered, and accepted subject to the covenants, reservations, and restrictions expressed in this Agreement, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed, or other instrument.
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b. CITY and OWNERS hereby declare their understanding and intent that the burden of the covenants, reservations, and restrictions set forth herein touch and concern the Historic Property.
c. CITY and OWNERS hereby further declare their understanding and intent that the benefit of such covenants, reservations, and restrictions touch and concern the land by enhancing and maintaining the historical characteristics and significance of the Historic Property for the benefit of the CITY, public, and OWNERS.
8. Notice.
a. Any notice required to be given by the terms of this Agreement shall be provided at the address of the respective parties as specified below or at any other address as may be later specified by the parties hereto.
CITY: City of Modesto
Attn: City Clerk
Post Office Box 642
Modesto, California 95353
OWNERS: State Theatre of Modesto, Inc.
Attn: General Manager
1307 J Street
Modesto, California 95354
b. Within thirty (30) days after OWNERS have entered into a contract of sale of the Historic Property, OWNERS shall give notice to CITY as provided herein.
9. Hold Harmless and Indemnification. To the extent permitted by law, OWNERS agree to protect, defend, hold harmless and indemnify CITY, its City Council, commissions, officers, agents, and employees from and against any claim, injury, liability, loss, cost, and/or expense or damage, however same may be caused, including all costs and reasonable attorney's fees in providing a defense to #25..
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any claim arising therefrom for which OWNERS shall become legally liable arising from OWNERS' acts, errors, or omissions with respect to or in any way connected with the prosecution of the work performed by OWNERS pursuant to this Agreement.
10. Restrictive Covenants Binding. All of the agreements, rights, covenants, reservations, and restrictions contained in this Agreement shall be binding upon and shall inure to the benefit of the parties herein, their heirs, successors, legal representatives, assigns and all persons acquiring any part or portion of the Historic Property, whether by operation of law or in any manner pursuant to this Agreement, who shall have the same rights and obligations under the Agreement as the OWNERS.
11. Recordation. No later than twenty (20) days after the parties execute and enter into this Agreement, the CITY shall cause this Agreement to be recorded in the office of the County Recorder of the County of Stanislaus.
12. OWNERS Notice. The OWNERS shall provide written notice of the Agreement to the State of California Office of Historic Preservation within six (6) months of entering into the Agreement.
13. Ordinary Maintenance. Nothing in this contract shall be construed to prevent the ordinary maintenance or repair of any exterior architectural feature in or on any Historic Property covered by this Agreement that does not involve a change in design, material, or external appearance thereof, nor does this Agreement prevent the construction, reconstruction, alteration, restoration, demolition, or removal of any such external architectural feature when the Director determines that such action is required for the public safety due to an unsafe or dangerous condition which cannot be rectified through the use of the California State Historical Building Code and when such architectural feature can be replaced according to the Secretary of Interior's Standards.
14. California State Historical Building Code. The California State Historical Building Code ("SHBC") provides alternative building regulations for the rehabilitation, preservation, restoration, or relocation of structures designated as Historic Properties. The SHBC shall be used in the CITY's building permit procedure for the Historic Property. Nothing in this Agreement shall be deemed to prevent any fire, building, health, or safety official from enforcing laws, ordinances, rules, regulations, and standards to protect the health, safety, welfare, and property of the OWNERS or occupants of the Historic Property or the public. #25..
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15. Modifications.
a. As required in Modesto Municipal Code Section 4-4.305, applications for tentative or parcel map approval which include the Historic Property will be deemed complete only when proof of project approval by the City Landmark Preservation Commission has been submitted with the application. b. As required by Modesto Municipal Code Section 9-10.06, applications for rezonings, variances, plot plan approvals, and tentative or parcel map approvals, or applications for building permits for proposed alterations, additions, relocations, demolition, removal or new construction within the boundaries of the Historic Property will be referred to the Modesto Landmark Preservation Commission for their review and written approval or disapproval.
16. Relationship of Parties. Nothing contained in this Agreement shall be interpreted or understood by any of the parties, or by any third person, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between CITY and OWNERS or its agents, employees or contractors.
17. Amendments. This Agreement, including any exhibits hereto, shall not be amended except in writing, signed by the Parties. Any amendment or addendum to this Agreement shall expressly refer to this Agreement.
18. Non-Liability of CITY Officials, Employees and Agents. No member, official, employee or agent of CITY shall be personally liable to OWNERS in the event of any default or breach by CITY or for any amount which may become due to OWNERS or its successor or on any obligation under the terms of this Agreement.
19. Applicable Law. This Agreement shall be interpreted under and be governed by the laws of the State of California.
20. Venue. Should either party institute suit or arbitration for enforcement or interpretation of any provision contained herein, the venue of such action shall be in Stanislaus County, California.
21. Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and #25..
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enforceability of the remaining provisions shall not in any way be affected or impaired.
22. Title of Parts and Sections. Any titles of the sections or subsections of Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of Agreement's provisions.
23. Language Construction. The language of each and all paragraphs, terms and/or provisions of this Agreement, shall, in all cases and for any and all purposes, and in any way and all circumstances whatsoever, be construed as a whole, according to its fair meaning, and not for or against any party hereto and with no regard whatsoever to the identity or status of any person or persons who drafted all or any portion of this Agreement.
24. Discretion of City. CITY's execution of this Agreement in no way limits the discretion of CITY in the permit and approval process in connection with any improvements by OWNERS.
25. Entire Agreement. This Agreement and any exhibits attached hereto constitute the sole and entire Agreement of the parties hereto with respect to the matters herein and correctly sets forth the rights, duties, and obligations of each to the other as of the date first written above. There are no other agreements or understandings, written or oral, between the parties regarding this Agreement other than those set forth herein.
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IN WITNESS WHEREOF, the CITY, a municipal corporation, has authorized the execution of this Agreement in duplicate by its City Manager and attestation by its City Clerk (under authority of Resolution No. , adopted by the Council of the City of Modesto) on the day of ,
and OWNERS, has caused this Agreement to be duly executed. #25..
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‘Exhibit 1’
Legal description of 1307 J St.
Lots 17 thru 23 in Block 107 of the City of Modesto, according to the official map thereof, filed in the office of the recorder of Stanislaus County, California, on December 21, 1942 in Book 15 of Maps.
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‘Exhibit 2’
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City of Modesto Landmark Preservation Commission
Minutes
September 16, 2024
1 Being the hour of 1:00 pm, the meeting was called to order by Chairperson Power I. ROLL CALL
Commissioners Bedford, Clendenin, Lopina, and Power present II. CONFLICT OF INTEREST DECLARATION
Chairman Power asked if any Commissioners had conflicts of interest or ex parte communications on any of the agenda items to declare.
Commissioner Power declared that he as a member of the Board of Directors for the State Theatre. Inc. has a conflict of interest. He would normally recuse himself of the vote, however the extenuating circumstances of the Landmark Preservation Commission not having been able to meet quorum if Commissioner Power could not vote, allows him to remain for Item B.
III. CONSENT ITEMS
Item A Minutes of the regular meeting of August 19, 2024.
Motion (Carried)
It was moved by Commissioner Clendenin, seconded by Commissioner Bedford, and carried unanimously (4-0) that the minutes of the regular meeting of August 19, 2024, be approved.
Item B Mills Act Application for the State Theatre of Modesto located at 1307 J street, submitted by State Theatre of Modesto, Inc.
Motion/Action (Carried)
It was moved by Commissioner Clendenin, seconded by Commissioner Bedford, and carried unanimously (4-0) that the Mills Act Application for the State Theatre of Modesto be accepted and forwarded it to the City Council for consideration.
IV. PUBLIC HEARINGS
None.
V. OTHER BUSINESS
VI. ORAL COMMUNICATIONS
City Staff informed the Commission 3 new Commissioners have been chosen and are being forwarded to City Council for confirmation. Considering the additional Commissioners coming forward, we have delayed the Mills Act Inspection until those members have a chance to join our regular meetings.
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Landmark Preservation Commission Minutes 2 September 16, 2024 Staff brought in a Building Permits of Landmark Preservation Properties graph to allow the Commission to review any projects that have been applied for since August 2021, only one (1) new permit was added to list from the last meeting.
VII. MATTERS TOO LATE FOR THE AGENDA
None.
VIII. ADJOURNMENT
The meeting was adjourned at 1:18 pm.
Signed copy on file in CEDD
Tristan Osborn, AICP, Planning Manager
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
December 3, 2024
Date: November 20, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions CONTACT: Sean Rando, Business Analyst
[email protected], 209-577-5473
DESCRIPTION:
Consider approving the submission of a Grant Application for the Governor’s Office of Business and Economic Development (GO-Biz) Cannabis Equity Grants Program for Local Jurisdictions for an amount up to $250,000 without a local match requirement. (Funding Source: Not Applicable)
STRATEGIC PLAN ELEMENT:
Expanding opportunity and reducing barriers to enter the regulated commercial cannabis market promotes economic vitality consistent with the City Council 2020-2025 Strategic Plan Goal E, Drive Economy Vitality.
BACKGROUND:
Individuals convicted of a cannabis offense during the era of prohibition and criminalization policies have a more difficult time entering the new adult-use cannabis industry due, in part, to a lack of access to capital, business space, technical support, and regulatory compliance assistance. The State of California’s Cannabis Equity Grants Program for Local Jurisdictions is designed to promote economic opportunity for individuals negatively impacted by cannabis prohibition and criminalization policies by reducing barriers to enter the regulated cannabis industry for equity applicants and licensees.
On December 13, 2022, by Resolution No. 2022-478, Council accepted the findings in the City of Modesto Cannabis Equity Assessment Report and on the same date by Resolution No. 2022- 479, Council adopted a City of Modesto Cannabis Equity Program. To fund this adopted #26..
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City Council, December 3, 2024
Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions
program, GO-Biz provides a Type 2 grant1 to aid local equity program participants in the form of grants for eligible startup expenses as well as direct technical assistance.
On January 31, 2023, GO-Biz informed the City that it was deemed eligible to receive a grant award in the amount of $350,000.
On March 14, 2023, by Resolution No. 2023-110, Council formally authorized a grant agreement with GO-Biz to secure this funding. The award required applying the funds as follows:
1. Providing grants, no-interest loans, or low interest loans to local equity applicants.
2. No more than ten (10) percent may be used to provide direct technical assistance in the amount of $35,000.
3. No more than ten (10) percent may be used for administrative expenses related to the operation of the cannabis equity program in the amount of $35,000.
DISCUSSION:
Following the receipt of grant funding form GO-Biz, Staff worked diligently on implementing the City of Modesto’s local cannabis equity program known as the Cannabis Program Providing Local Equity Development Grants and Education (PLEDGE). Applications to participate in the PLEDGE program were accepted and reviewed by staff in April 2024. Twelve (12) applications were received in total with five (5) being deemed eligible to participate. The verified PLEDGE participants were required to complete a technical assistance workshop to qualify for grant funding for any business venture they may be interested in pursuing. The City of Modesto partnered with Tulip & Oak Consulting to provide a six (6) week direct technical assistance workshop which covered general business and cannabis industry specific skills to assist applicants in becoming successful entrepreneurs in the newly legalized commercial cannabis market.
The City requested applications for grant funding from the PLEDGE program participants immediately after the conclusion of the direct technical assistance workshops. The applicants were required to submit a grant application form, and a complete commercial cannabis permit application which met the minimum requirements pursuant to Modesto Municipal Code section 10-3.704 (g)(4). Staff received four (4) complete applications for the following businesses owned by PLEDGE program participants:
Owner: Joshua
Burrow
Jacob
and
Modesto
Resendez
Eric
Washington
LaPrice
Reynolds
Business
Name:
CLD, LLC Modesto’s
Finest, LLC
Que Tees, LLC Power High 99,
Inc.
Business
Type:
Distribution Distribution Distribution Cultivation
Address: 903
Kansas Avenue
1006 Lone Palm
Ave
1127
Kansas Avenue
Suite 47
1127
Kansas Avenue
Suite 52
Zoning: M-2 M-1 M-1 M-1
1 GO-Biz Cannabis Equity Grants Program for Local Jurisdictions Webpage-https://business.ca.gov/cannabis-equity-grantsprogram-for-local-jurisdictions/ #26..
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City Council, December 3, 2024
Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions
Heavy Industrial Light Industrial Light Industrial Light Industrial Grant Amount: $70,000 $70,000 $70,000 $70,000
On October 22, 2024, by Resolution No. 2024-385, Council approved the grant agreements to provide funding to the four (4) commercial cannabis businesses owned by verified PLEDGE participants in amounts not exceeding $70,000. On October 31, 2024, the current grant agreement with GO-Biz expired. The current roster of PLEDGE businesses has indicated that they would seek additional funding through the City’s local equity program to fund their new enterprises. Additional funding from the State is required to continue the operation of the PLEDGE program.
A total of $15,000,000 is available for fiscal year 2024-2025 through the GO-Biz cannabis equity grants program for local jurisdictions. The City grant application would be for a type two (2) funding request for the purpose of aiding local equity applicants and licensees. Type two (2) applications are subject to a maximum request of $3,000,000. The final award will be allocated using a point-based scoring system and funding formula based on total equity applicants that a jurisdiction currently has enrolled in their programs. Beginning this fiscal year, type two (2) applications will be subject to a newly implemented match requirement:
Grant awards exceeding $500,000 will require a 100% match from the local jurisdiction during the grant term for the amount above $500,000.
Awards up to $500,000 will not require any matching funds from the local jurisdiction during the grant term.
GO-Biz’s funding formula will also limit the total award that would be made available to the City of Modesto. According to the fiscal year 2024-2025 grant solicitation guide, jurisdictions may not be awarded an amount exceeding $50,000 multiplied by the total number of equity applicants or licensees reported by the grant applicant. The City of Modesto currently has five (5) verified equity applicants at this time. The maximum grant award that could be made available to the City would be $250,000 at GO-Biz’s discretion.
Should the City be awarded grant funding, the payment would take place over four (4) equal installments of 25% of the total award. For example, if the City were to be approved for $250,000 then the expected payment schedule would be the following:
Installment Amount
First Installment-paid after the execution of
the grant agreement.
$62,500
Second installment-paid after the first
installment is expended.
$62,500
Third Installment-paid after the second
installment is expended.
$62,500
Fourth and final installment-paid after the
third installment is expended. This final
payment will be provided to the City on a
reimbursement basis.
$62,500
Total $250,000
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City Council, December 3, 2024
Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions
The grant would also be further allocated to cover direct technical assistance, administrative costs, and grants or loans to equity program participants. This allocation may be illustrated with the following breakdown.
Amount
per Installment
Total
Grant Award
10% allocation to direct technical
assistance
$6,250 $25,000
10% allocation to administrative
costs
$6,250 $25,000
Subtotal-City related costs $12,500 $50,000
Grants and loans to program
participants.
$50,000 $200,000
Grand Total $62,500 $250,000
If awarded, future program considerations will include grant awards to program participants being significantly less, whether two (2) remaining commercial cannabis retail permits will be made available to the public at large or only to PLEDGE participants, whether to issue assistance in the form of grants or loans, as well as the potential impact to the General Fund if City administrative costs exceeded the allowable $25,000 under the GO-Biz grant program.
Cost recovery through the GO-Biz grant will be directly affected by these decision points previously mentioned.
FISCAL IMPACT:
There may be administrative costs associated with carrying out the commitments of the award should costs exceed the amount awarded; however, these expenditures are unknown at this time. If awarded, City administrative costs would be recovered up to a maximum amount of $25,000. Administrative costs beyond this amount, should they be incurred, would be paid for through the General Fund. Separate from general administrative expenses, an allocation of $25,000 may also be dedicated to providing program participants with direct technical assistance services. Anticipated administrative staff costs are adequately budgeted within the current fiscal year 2025 operating budget.
COMMITTEE RECOMMENDATION:
This grant opportunity was presented to the Cannabis Program and Permit Review Committee on November 19, 2024. A motion was passed with Vice-Chair Zwahlen and Committee Member Ricci voting in the affirmative and Chair Wright voting in the negative to direct staff to submit a Grant Application for the GO-Biz Cannabis Equity Grants Program for Local Jurisdictions for an amount up to $250,000 without a local match requirement and to forward to Council for consideration of final approval.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution approving the submission of a Grant Application for the Governor’s Office of Business and Economic Development (GO-Biz) Cannabis Equity Grants Program for Local Jurisdictions for an amount up to $250,000 without a local match requirement, and authorizing the City Manager, or his Designee, to submit the application. #26..
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City Council, December 3, 2024
Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions
Approved by:
Jessica Hill,
Director of Community and Economic Development
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
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12/03/2024/CED/SRando/Item 1 2024-
MODESTO CITY COUNCIL
RESOLUTION NO. 2024-
RESOLUTION APPROVING THE SUBMISSION OF A GRANT APPLICATION FOR THE GOVERNOR’S OFFICE OF BUSINESS AND ECONOMIC
DEVELOPMENT (GO-BIZ) CANNABIS EQUITY GRANTS PROGRAM FOR LOCAL JURISDICTIONS FOR AN AMOUNT UP TO $250,000 WITHOUT A
LOCAL MATCH REQUIREMENT, AND AUTHORIZING THE CITY
MANAGER, OR HIS DESIGNEE, TO SUBMIT THE APPLICATION
WHEREAS, on November 8, 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA); and WHEREAS, funding has been allocated to the Governor’s Office of Business and Economic Development (GO-Biz) to provide grant funds to local governments pursuant to AB 97 (Stats. 2019, Ch. 40), for Cannabis Equity program purposes; and WHEREAS, the City Council has adopted a Commercial Cannabis Ordinance, Ordinance 3684-C.S., that established the City’s regulatory framework for commercial cannabis businesses; and
WHEREAS, on December 13, 2022, by resolution No. 2022-478, The City Council accepted the City of Modesto Cannabis Equity Assessment Report, and by Resolution No. 2022-479, adopted a City of Modesto Cannabis Equity Program and authorized the City Manager, or designee, to take all actions as may be required to implement the resolution and program, including but not limited to the establishment of internal controls, administrative functions, and application submittal processes as necessary; and
WHEREAS, on December 13, 2022, by resolution No. 2022-480, Council authorized the application for a Type 2 grant to fund the newly adopted City of Modesto Cannabis Program Providing Local Equity Development Grants and Education #26..
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12/03/2024/CED/SRando/Item 2 2024-
(PLEDGE). On January 31, 2023, GO-Biz informed the City that it was deemed eligible to receive a grant award in the amount of three hundred and fifty thousand dollars ($350,000); and
WHEREAS, on March 14, 2023, by Resolution No. 2023-110, Council formally authorized a grant agreement with GO-Biz to secure this funding. The award is required to be spent towards providing grants or loans to equity applicants, direct technical assistance, as well as internal administrative costs; and WHEREAS, the PLEDGE program received applications for participation in April of 2024 with a total of five (5) individuals qualifying for assistance in the form of a six (6) week direct technical assistance course as well as grants for startup and ongoing business expenses; and
WHEREAS, following the conclusion of the workshops, the City received four (4) grant applications from verified PLEDGE participant owned businesses; and WHEREAS, on October 22, 2024, by Resolution No. 2024-385, Council approved Grant Agreements to provide funding to four (4) commercial cannabis businesses owned by verified PLEDGE participants in amounts not exceeding seventy thousand dollars ($70,000) for CLD LLC, Que Tees LLC, Modesto’s Finest LLC, and Power High 99 LLC; and
WHEREAS, program participants and community members have indicated support for additional program funding to provide assistance to local cannabis equity program participants; and
WHEREAS, GO-Biz has released the fiscal year 2025 grant solicitation period for the Cannabis Equity Grants Program for Local Jurisdictions, with the City of Modesto #26..
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12/03/2024/CED/SRando/Item 3 2024-
being eligible to potentially receive an award of two-hundred and fifty thousand dollars ($250,000) due to having less than six (6) verified equity program participants; and WHEREAS, the topic of applying for additional program funding was presented to the Cannabis Program and Permit Review Committee on November 19, 2024 with a motion passed recommending to direct staff to submit a Grant Application for the GOBiz Cannabis Equity Grants Program for Local Jurisdictions and forwarding to Council for approval.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves the submission of a Grant Application for the Governor’s Office of Business and Economic Development (GO-Biz) Cannabis Equity Grants Program for Local Jurisdictions for an amount up to $250,000 without a local match requirement.
BE IT FURTHER RESOLVED that the City Manager, or his Designee, is authorized to submit the application.
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12/03/2024/CED/SRando/Item 4 2024-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 3rd day of December, 2024, by Councilmember ,, who moved its adoption, which motion being duly seconded by Councilmember ,, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _____________________________
DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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