City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Fernando Ulloa, City Manager
BY: Nubia Goldstein, City Attorney
MEETING DATE: September 16, 2025
ITEM NO: 6.8
SUBJECT: Adopt Resolution No. 2025-56 Approving the Settlement Agreement Between the City of Patterson and VOP North LLC for Reimbursement of the Mejia Property Public Improvements in the Villages of Patterson Development.
RECOMMENDATION
Motion to Adopt Resolution 2025-56 Approving the Settlement Agreement Between the City of Patterson and VOP North LLC for Reimbursement of the Mejia Property Public Improvements in the Villages of Patterson Development.
BACKGROUND
On December 12, 2006, the Patterson City Council adopted Resolution No. 2006-122 approving a Combined Preliminary and Final Development Plan and other entitlements for the project known as the Villages of Patterson, which is comprised of approximately 692 gross acres located south of Eucalyptus Avenue, east of State Highway 33, west of Sycamore Avenue, and north of Walnut Avenue (the “Villages Project”).
On December 19, 2006, the City Council adopted Ordinance No. 681 approving a Development Agreement for the Villages Project (the “DA”). VOP North LLC (“VOP North”) is an owner and developer of certain parcels within the Villages Project including the property known as Assessor’s Parcel Number 047-031-013 (the “Mejia Property”). As a developer of the Villages Project, VOP North is a party to the DA and is subject to its benefits and obligations.
VOP North constructed certain public improvements as part of the development obligations for the Mejia Property which are reimbursable from “CFD 2018-1” (the infrastructure CFD formed for the Villages Project), further described as follows:
Surface improvements along Sycamore Avenue, approximately 660-linear feet between Walnut Ave and Somerset Lane, including the following: rough grading and finish grading; concrete sidewalks, curb and gutter; median curbs; moisture barrier behind median curb and curb/gutter; 4” Hotmix asphalt/20” aggregate base; aggregate base shoulder
Upon constructing the public improvements, VOP North subsequently requested reimbursement from the City through CFD 2018-1. Under dispute between the parties is the timing at which reimbursement is due to VOP North, based on the provisions of the DA and the priority of public improvements to be financed by CFD 2018-1.
As described in the Settlement Agreement, the City acknowledges the reimbursement obligation to VOP North, but disputes the timing at which point the reimbursement obligation is due. To resolve the dispute, the Settlement Agreement is before the Council for approval.
DISCUSSION
The terms of the Settlement Agreement are as follows:
· The City shall pay VOP North a total sum of Two Hundred Seventy-Seven Thousand Eight Hundred Six and 39/100 Dollars ($277,806.39) (“Reimbursement Payment”). The Reimbursement Payment is based on the total cost of the Mejia Property public improvements ($437,500.00), reduced by the outstanding funding account balance of VOP North owed to the City ($159,693.61) (i.e., $437,500.00 - $159,693.61 = $277,806.39). The Reimbursement Payment shall constitute payment of the full CFD 2018-1 monies owed to VOP North for the Mejia Property public improvements. · The total cost of the Mejia Property public improvements is confirmed to have been reviewed by the City Engineer.
· As noted in the payment provision above, the outstanding funding account balance of VOP North ($159,693.61) is factored into the Reimbursement Payment that will be made to VOP North.
· VOP North irrevocably grants all of its right, title, and interest in a sum equal to the Reimbursement Payment amount from CFD 2018-1 to the City. · VOP North agrees to release all claims, know or unknown, against the City related to this reimbursement dispute.
FISCAL IMPACT
Upon execution of the Settlement Agreement, the City will pay VOP North the Reimbursement Payment, and VOP North will no longer be eligible to receive reimbursement for the Mejia Property public improvements from CFD 2018-1. Payment will be made to VOP North from the City’s General Fund, which will be reimbursed in the future when funds are available in CFD 2018-1.
ALTERNATIVE ACTIONS
The City Council may:
1. Adopt the Resolution No. 2025-56 Approving the Settlement Agreement between the City and Developers; or
2. Reject the proposed Resolution No. 2025-56 ; or
3. Continue the matter to a future meeting of the City Council and provide further direction to staff.
ATTACHMENTS
1. City Council Resolution No. 2025-56
EXHIBIT A: Settlement Agreement