City Council Agenda Report
March 17, 2026
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Alex Hamilton, Interim Director of Community Development SUBJECT: CONSIDERATION OF A SETTLEMENT AGREEMENT FOR THE PROPERTY LOCATED AT 12500 FIRESTONE BOULEVARD
Background:
On October 2, 2024, the California Department of Housing and Community Development (“HCD”) revoked the City’s Housing Element certification.
On February 19, 2025, Brandywine Homes (“Brandywine”) submitted to the City a Senate Bill (“SB”) 330 (“Preliminary Application”), proposing a 161 unit condominium complex, with 21 units set aside for low-income households, along with density bonuses pursuant to state law, inclusive of waivers and concessions (“Project”), on property located at 12500 Firestone Boulevard (“Subject Site”, currently developed as Saddleback Hotel), which was within the C-3 zoning district at the time (the Subject Site has since been rezoned to the Heart of Norwalk Specific Plan area).
On May 22, 2025, Brandywine submitted its formal land use entitlement applications for the Project (“Builder’s Remedy Application”), seeking entitlements to proceed with the development and construction of the Project and invoking Brandywine’s rights to proceed under Builder’s Remedy (see Government Code, § 65589.5(h)(11).).
On June 13, 2025, the City issued a Notice of Filing Status and Notice of Incomplete Application (“NOI”) in response to the Builder’s Remedy Application. Brandywine disputed that the Builder’s Remedy Application was incomplete, and disputed some or all of the comments contained in the NOI. The City disagreed with such contentions.
On August 28, 2025, Brandywine submitted a revised Builder’s Remedy Application.
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On September 19, 2025, HCD recertified City’s Housing Element.
On September 26, 2025, the City issued a further NOI and advised Brandywine that the City had determined the Preliminary Application submitted by Brandywine submitted on February 19, 2025 was not in compliance with Government Code Section 65941.1, which was disputed by Brandywine.
Brandywine asserted eligibility for the Project to proceed under a Builder’s Remedy Application. Brandywine also asserted that they have claims to recovery of associated attorney’s fees and costs and alleged damages resulting from alleged development delay, all of which may continue to accrue (“Claims”). While the City disagrees with Brandywines assertion of such claims, the Parties acknowledge that a dispute exists between the Parties as to the merits of the Claims and any fees, costs and damages resulting therefrom.
In an effort to avoid the cost and uncertainty of any further disputes and potential litigation concerning the Project, the Builder’s Remedy Application, and the NOI (“Disputes”), and in consideration of the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by all Parties, the Parties agree to the following terms:
Agreement Effective Date. This Agreement shall be deemed effective upon the execution by the Parties after the approval of same by City Council (“Agreement Effective Date”). Term. The term of this Agreement shall commence on the Agreement Effective Date and shall automatically terminate if the Settlement Effective Date does not occur on or before August 26, 2026 (“Term”) unless extended by mutual written agreement of the Parties. Settlement Effective Date. Within 30 days after the satisfaction of all Conditions as set forth in the Agreement, prior to expiration of the Term, the Parties will exchange the following documents: (i) Brandywine will provide to City a written withdrawal of the Builder’s Remedy Application in a form satisfactory to City; and (ii) City will issue the Entitlements (“Settlement Effective Date”).
Parcel Map. Concurrently with the Revised Project Application, Brandywine must process a parcel map pursuant to the Subdivision Map Act to subdivide the Master Property into two legal parcels in accordance with (a) the general depiction set forth on the Parcel Depictions which depicts and generally defines the New Hotel Parcel and the Residential Parcel (with the New Hotel Parcel being not less than 1.8 acres and in a configuration appropriate for a hotel); and (ii) all applicable laws, ordinances and regulations (“Parcel Map”).
Entitlements & Settlement Condition. The term “Entitlements” shall mean (i) the Parcel Map; (ii) a vesting tentative tract map; and (iii) entitlements for the Revised Project (as defined in the Agreement for the Residential Parcel and the Hotel Parcel as evidenced by a “Precise Development Plan” issued by the Planning Commission which includes all the conditions of approval for the Project as imposed by City including the Settlement Agreement conditions. Brandywine voluntarily agrees to permit City to include the following condition in the conditions of approval for all Entitlements City may impose related to development on the Master Property (“Settlement Condition”). If Brandywine City Council March 17, 2026
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objects to the Settlement Condition as part of the approval process, or initiates any sort of litigation to challenge the Settlement Condition after the Entitlements are approved, City may immediately terminate this Agreement, or declare Brandywine in breach of this Agreement and immediately initiate proceedings to revoke all Entitlements approved for the Master Property.
Hotel Covenant. As material consideration for this Agreement, and in accordance with conditions in the Entitlements (including the Settlement Condition), the Hotel Parcel as legally created by the filed Parcel Map shall be encumbered by the Declaration of Covenants, Conditions and Restrictions executed by the fee owner of the Hotel Parcel in a form attached to the Settlement Agreement whereby the development of the New Hotel Parcel is restricted solely for the use of the Hotel.
Settlement Effective. As of the Settlement Effective Date, the Parties shall be deemed to have resolved all Builders Remedy claims and a mutual release is provided in the Settlement Agreement. However, other Brandywine’s obligations shall survive the Settlement Effective Date.
Revised Project. Within 30 days of the Agreement Effective Date (“Application Period”) subject to extension pursuant to Section 4.2, Brandywine will submit to City a revised complete application together with payment of application fees (“Revised Project Application”), for a revised project as set forth in attached in the Settlement Agreement. Extension of Application Period. Provided that Brandywine is diligently working to provide the complete Revised Project Application, Brandywine may request in writing that City consent to one or more extension of the Application Period which extensions may not exceed a cumulative amount of an additional 60 days and City will not unreasonably withhold consent to such extension requests. City’s consent to an extension must be in writing pursuant to Section 14 to be effective.
Processing of Revised Project. While retaining all applicable discretion pursuant to Section 5.2 except for any subdivisions required for the Revised Project, which shall be processed consistent with the requirements of Norwalk Municipal Code, Title 16, entitled “Subdivisions” as expeditiously as reasonably possible, City will process the Revised Project and submit same to the Planning Commission for consideration of approval and notwithstanding City Municipal Code Sections 17.02.203 and 17.02.205, approval will not be issued by the Director. Upon City’s receipt of the complete Revised Project Application, City will expedite the processing of development permits and plans for the Revised Project and will continue to process such permits and plans on an expedited basis, and will not seek reimbursement for any costs incurred by City for expediting processing, except the Reimbursement Amount as set forth in Section 9. City staff has determined that the conceptual plans for the Revised Project is substantially consistent with the Heart of Norwalk Specific Plan approved December 16, 2025 (“Specific Plan”). The Parties acknowledge that the Specific Plan provides that “Design guidelines are not binding, however, they do provide strong suggestions that a developer may follow to share City’s commitment to quality design.” (Specific Plan, p.288.) City staff has determined that the Revised Project is in furtherance of City’s commitment to quality design pursuant to the Specific Plan and is substantially consistent in all respects with the Specific Plan, including, but not limited to, parking ratios, setbacks, building separation, open space requirements, and/or all other design guidelines.
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Process Schedule. Brandywine and City agree to use good faith and reasonable efforts to comply with the schedule set forth in the Settlement Agreement. Right to Terminate. Notwithstanding anything to the contrary if prior to the expiration of the Term (as it may be extended pursuant to Section 2), (i) the Entitlements have not been issued, (ii) any required milestone of the Schedule are not met, or (iii) all the Conditions set forth in the Settlement Agreement have not been fulfilled, either Party may terminate this Agreement by written notice to the other Party. Stay in Processing of Project Builder’s Remedy Application. As of the Agreement Effective Date, any and all development application processing and submittal timelines and deadlines for both City and Brandywine pertaining to the Builder’s Remedy Application (i.e. Development Application review and processing deadlines applicable City and submittal deadlines applicable to Brandywine) under California and local law, including the Norwalk Municipal Code, shall be stayed. The stay shall remain in place for the duration of this Agreement and end on the first to occur of: (i) the Termination Date, or (ii) the Settlement Effective Date. Upon termination of this Agreement pursuant to Section
6.3, the time between the Agreement Effective Date and Termination Date shall not count towards any statutory development application processing and submittal deadlines under state or local law. Brandywine agrees that for the duration of this stay, it shall not refer City to HCD for enforcement action for any reason, including based on an alleged delay in processing the Builder’s Remedy Application as a result of this Agreement. City and Brandywine Settlement Conditions Precedent. All of the conditions precedent set forth in the Settlement Agreement for both parties must be met. These obligations include performance measures designed to ensure that Brandywine expeditiously submits their entitlement package for the revised project and ensures that a parcel of approximately 1.8 acres is devoted to a hotel use with an appropriate covenant to ensure that performance.
Reimbursement Amount. Within 10 days of the Agreement Effective Date, Brandywine will deliver to City the sum of $200,000 as reimbursement for processing fees, costs and expenses (including third party contractors advising City) incurred by City with respect to the Revised Project Application and City’s attorneys’ fees incurred with the BRA Claims and this Agreement (“Reimbursement Amount”). The Reimbursement Amount may be used by City in its discretion with respect to the Revised Project. City shall refund any unused funds from the Reimbursement Amount no later than 15 days after first to occur of: (i) the Termination Date; or (ii) the Settlement Effective Date. City’s final consideration of the Revised Project. Brandywine may request in writing an accounting of City’s use of the Reimbursement Amount and, in such event, City shall provide the accounting within 10 business days of the written request. Payment of the Reimbursement Amount does not limit or waive Brandywine of any and all other City-wide permit or standard fees applicable to the Revised Project.
Mutual Release. As of the Settlement Effective Date, and except for the obligations created by this Agreement including those specified in the Settlement Agreement, the Parties hereby fully release and forever discharge each other and each other’s respective successors, assigns, employees, agents, representatives, and attorneys from and against any and all claims, demands, actions, causes of action, proceedings, obligations, liabilities, damages, losses, costs, and expenses of any nature whatsoever, in law or in City Council March 17, 2026
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equity, known or unknown, foreseen or unforeseen, contingent or non-contingent, that the Parties now have based upon or in any way arising out of or in connection with the matters set forth in the Preliminary Application, the Builder’s Remedy Application, the Project and/or the Revised Project.
Environmental
The settlement agreement is not subject to the California Environmental Quality Act (CEQA) guidelines section 15061(b)(3) where it can be seen with certainty that there is no possibility that the active in question may have a significant effect on the environment.
Fiscal Impact:
Development of the Proposed Project with a hotel component outlined in the settlement agreement terms would result in a positive property tax, building permit, parkland dedication, and transient occupancy tax gains for the City.
Citizens Advised:
N/A
Strategic Plan 2023 Implementation:
Goal 3 – Create and sustain a resilient and economically prosperous City The development opportunities outlined in the settlement agreement terms and development opportunities that exist
Recommended Action:
Staff recommend the City Council approve the Settlement Agreement with Brandywine Homes; and authorize the City Manager to execute the Settlement Agreement and any ancillary documents consistent with and reasonably necessary to effectuate the intent of this Settlement Agreement or make such necessary amendments to the Settlement Agreement and associated exhibits, in a form approved by the City Attorney.
Attachments:
None