PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.G
SUBJECT/TITLE:
ADOPTION (SECOND READING) OF AN ORDINANCE APPROVING A
DEVELOPMENT AGREEMENT WITH PISMO BEACH SELF STORAGE, LP FOR THE PROPERTY LOCATED AT 100 FIVE CITIES DRIVE
RECOMMENDATION:
Adopt an Ordinance approving a Development Agreement with Pismo Beach Self Storage, LP.
BACKGROUND:
On December 5, 2023 the City Council introduced an ordinance (Attachment 1) that will approve a Development Agreement with Pismo Beach Self-Storage for development at 100 5 Cities Drive, and authorize the City Manager to execute the agreement on behalf of the City.
The ordinance was introduced as presented without amendment. The agenda report for the December 5, 2023 agenda item, which includes background and analysis, is provided as Attachment 2.
Recommendation
Staff recommends that the Council adopt an ordinance (Attachment 1) that will approve a Development Agreement with Pismo Beach Self-Storage for development at 100 5 Cities Drive, and authorize the City Manager to execute the agreement on behalf of the City. If the Council acts to adopt the Ordinance at this time, it will become effective by statute on January 18, 2024.
FISCAL IMPACT:
As outlined in the staff report for the introduction of this ordinance (Attachment 2).
ALTERNATIVES:
1. Modify, and then re-introduce, the proposed Ordinance.
2. Do not adopt the Ordinance.
3. Provide staff with alternative direction.
ATTACHMENTS:
1. Ordinance as introduced, including Development Agreement
2. December 5, 2023 staff report (without ordinance attachment) Submitted by: Erica Inderlied, City Clerk Meeting Date: December 19, 2023 City Manager Approval:
9.G-1Council Agenda 12-19-2023
ORDINANCE NO. O-2023-XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA ADOPTING A DEVELOPMENT AGREEMENT WITH PISMO BEACH
SELF-STORAGE, LP
WHEREAS, Pismo Beach Self-Storage, LP (“PBSS”) is the owner of real property located at 100 Five Cities Drive within the City of Pismo Beach (the “Property”).
WHEREAS, in 2008, PBSS applied for and received land use entitlements to construct a three-phase development project (“Project”) that included a self-storage facility (“Phase 1”), industrial condominiums (“Phase 2”) and a retail site (“Phase 3”); and WHEREAS, PBSS constructed the self-storage facility on the Property, but to date, PBSS has not constructed either the industrial condominiums or retail site; and WHEREAS, subsequent to the 2008 land use entitlements, a dispute arose between the City of Pismo Beach and PBSS as to the impact fees owed by PBSS for development of the self-storage facility; and
WHEREAS, PBSS subsequently filed litigation against the City, alleging various claims against the City over the City’s application of development impact fees to the self-storage facility; and
WHEREAS, the City Council agreed to accept and process an application for a development agreement as part of a settlement agreement with PBSS arising out of the litigation commenced by PBSS against the City; and
WHEREAS, the settlement agreement provided that the development agreement would be processed pursuant to Chapter 17.48 of the Pismo Beach Municipal Code notwithstanding the fact that the project site is located in the Coastal Zone; and WHEREAS, Chapter 17.48 requires the Planning Commission to conduct a public hearing prior to recommending approval of a development agreement; and WHEREAS, on November 14, 2023, the Pismo Beach Planning Commission held a public hearing to consider the draft development agreement, at which time all interested parties were given the opportunity to be heard and to comment on the draft development agreement; and
WHEREAS, after due study and deliberation, the Planning Commission found that the draft development agreement is consistent with the General Plan, and that it contains those matters required in a development agreement under Chapter 17.48 of the Pismo Beach Municipal Code; and
Attachment 1
9.G-2Council Agenda 12-19-2023
WHEREAS, pursuant to Planning Commission Resolution PC-R-2023-026, the Planning Commission recommended City Council adoption of the draft development agreement; and
WHEREAS, Government Code Section 65865 allows the City to enter into development agreements with any person having a legal or equitable interest in real property; and
WHEREAS, Government Code Section 65867.5 requires a development agreement be adopted by ordinance; and
WHEREAS, pursuant to Government Code Section 65867.5, the City Council finds that the provisions of the development agreement are consistent with the General Plan; and
WHEREAS, notice of the City Council’s intention to consider adoption of the Development Agreement has been given as provided in Government Code Sections 65090 and 65091.
NOW, THEREFORE, the City Council of the City of Pismo Beach does ordain as follows:
SECTION 1.
The foregoing recitals are adopted as findings of fact in support of this ordinance.
SECTION 2.
The Development Agreement attached hereto as Exhibit A is hereby approved and the City Manager is directed to execute the Agreement on behalf of the City. The City Manager is further authorized to make such minor amendments to the Development Agreement as are necessary to carry out the intent of the Development Agreement. Not later than ten (10) business days after the effective date of this Ordinance, the City Clerk is directed to record the Development Agreement with the San Luis Obispo County Recorder’s office.
SECTION 3.
Under the provisions of the California Environmental Quality Act (CEQA) Guidelines Section 15061 (b) (3), this ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, such as the adoption the regulations contained herein, the activity is not subject to CEQA. Furthermore, the Project contemplated by the Development Agreement adopted hereby is categorically exempt from CEQA pursuant to CEQA Guidelines Section 15332.
Attachment 1
9.G-3Council Agenda 12-19-2023
SECTION 4.
This ordinance shall not be interpreted in any manner to conflict with controlling provisions of state or federal law, including, without limitation, the Constitution of the State of California. If any section, subsection, or clause of this ordinance shall be deemed to be unconstitutional or otherwise invalid, the validity of the remaining sections, subsections and clauses shall not be affected thereby. If this ordinance, or any section, subsection or clause of this ordinance shall be deemed unconstitutional or invalid as applied to a particular appeal, the validity of this ordinance and its sections, subsections, and clauses in regard to other contracts shall not be affected.
SECTION 5.
This ordinance shall become effective on the thirtieth (30th) day following passage and adoption hereof.
SECTION 6.
The City Clerk shall certify to the passage and adoption of this Ordinance, shall enter the same in the book of original ordinances of the City and shall make a minute of the passage and adoption thereof in the records of the meeting at which the same is passed and adopted.
Before the expiration of fifteen (15) days after the passage of this Ordinance, the City Clerk shall cause the same to be posted in three public places within the City of Pismo Beach, to wit: 1) City Hall, 760 Mattie Road, Pismo Beach, 2) U.S. Post Office, Shell Beach Road, Pismo Beach, 3) U.S. Post Office, Crest Drive, Pismo Beach.
INTRODUCED at a regular meeting of the City Council held this 5th day of December, 2023, on motion of Council Member Guthrie, seconded by Council Member Newton, and on the following roll call vote, to wit:
AYES: 4 Guthrie, Newton, Reiss, Waage
NOES: 0
ABSENT: 0
ABSTAIN: 0
RECUSED: 1 Inman
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
Attachment 1
9.G-4Council Agenda 12-19-2023
ADOPTED at a regular meeting of the City Council held this th day of , 2023, on motion of Council Member , seconded by Council Member , and on the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
APPROVED AS TO FORM:
______________________________
David M. Fleishman, City Attorney
Attachment 1
9.G-5Council Agenda 12-19-2023
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (hereafter “Agreement”) is made and entered into on _________________, by and between the City of Pismo Beach, a California general law city (hereafter “City”), and Pismo Beach Self-Storage, LP, a California limited partnership (hereafter “Developer”), pursuant to the authority of California Government Code Section 65864 et seq. City and Developer are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.
RECITALS
A. WHEREAS, California Government Code Section 65864 et seq. authorizes the City to enter into a binding agreement for the development of real property with any person having a legal or equitable interest in such property in order to establish certain development rights in such property.
B. WHEREAS, this Agreement constitutes a current exercise of the City’s police powers to provide predictability to City and Developer in the development approval process by vesting the permitted uses, density, intensity of use, and timing and phasing of development in exchange for Developer’s commitments under this Agreement.
C. WHEREAS, Developer has submitted an proposal setting forth a plan of development of real property owned by Developer within the City (the “Project”).
D. WHEREAS, in a meeting of the Planning Commission of the City of Pismo Beach (“Planning Commission”) on November 14, 2023, the Planning Commission conducted a public hearing pursuant to Government Code Section 65867 to consider the Agreement.
E. WHEREAS, the purpose of this Agreement is to facilitate the implementation of the Project, thereby realizing the public benefits to City and private benefits to Developer. The development of the Project requires a substantial front-end investment by Developer, and substantial commitments of resources to achieve both private benefits of the Project for the Developer and the public purposes and benefits of the Project for the City. This Agreement strengthens the public planning process, encourages private participation in comprehensive planning and reduces costs of development and government.
The best interests of the citizens of the City and the public health, safety, and welfare will be served by entering into this Agreement.
F. WHEREAS, some or all of those expenditures and commitments by Developer are different than those that City could require of Developer in the normal course of granting project approvals, and as such, City and Developer wish to expressly set forth the expenditures and commitments expected of Developer. Developer is willing to pay such expenditures and commit to such actions set forth herein in return for receiving the benefits conferred on Developer by this Agreement.
G. WHEREAS, the City Council has found that, among other things, this Agreement is in conformity with public convenience, general welfare, and good land use practice; that this Agreement will not be detrimental to the health, safety, or general welfare; and that this Agreement will not adversely affect the orderly development of property or the preservation of property values.
H. WHEREAS, on _________________, the City Council adopted Ordinance No. O-2023- ___ approving this Agreement, attached as Exhibit “A”.
Exhibit A Attachment 1
9.G-6Council Agenda 12-19-2023
I. WHEREAS, one of the principal purposes of this Agreement is to ensure the requirements of the Development Agreement Statute (California Government Code section 65864 et. seq.) are satisfied. As more fully set forth below, this Agreement contains both covenants of a personal nature and covenants and/ or servitudes that run with title to the Property.
J. WHEREAS, this Agreement and the Project are consistent with the City’s General Plan and zoning code.
K. WHEREAS, all actions taken and recommendations required for City to approve the Agreement have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters.
L. WHEREAS, this Agreement has been analyzed pursuant to California Environmental Quality Act (“CEQA”), and the Agreement is categorically exempt from further review pursuant because it meets each of the standards set forth in Title 14 California Code of Regulations Section 15332 as a Class 32 in-fill project.
NOW, THEREFORE, with reference to the above recitals and in consideration of the mutual promises, obligations and covenants herein contained, City and Developer agree as follows:
AGREEMENT
1. Description of Property. The Property which is the subject of this Agreement is described as San Luis Obispo County Assessor’s Parcel Nos. 005-242-073 and 005-242-074 (the “Property”).
Developer also owns San Luis Obispo County Assessor’s Parcel No. 005-242-072, which is adjacent to the Property and may be affected by the Project. The Developer has a legal or equitable interest in the Property.
2. Effective Date and Term.
2.1. The effective date of this Agreement (“Effective Date”) shall be the 31st day following the date on which the ordinance approving this Agreement is adopted by City.
2.2 The term of this Agreement (“Term”) shall commence on the Effective Date and extend seven (7) years thereafter, unless this Term is otherwise terminated or extended as set forth in this Agreement. If any person not party to this Agreement institutes any administrative, legal, or equitable action or other proceeding challenging the validity of any provision of this Agreement, the Term shall be extended for the period of time required for the administrative, legal, or equitable action or other proceeding to come to a conclusion.
3. Use of the Property. The permitted uses of the Property, the maximum density and intensity of use, the maximum height, bulk and size of proposed buildings, provisions for reservation or dedication of land for public purposes and location and maintenance of on-site and off-site improvements, location of public utilities, and other terms and conditions of development applicable to the Property, shall be those set forth in this Agreement, the Project approvals, any amendments to this Agreement or the Project approvals, and applicable laws, ordinances and regulations.
3.1. Specific Development Authorized. During the Term of this Agreement, the Developer shall have a vested right to develop the Property to the full extent permitted by this Development Attachment 1
9.G-7Council Agenda 12-19-2023
Agreement. Except as provided within this Development Agreement, the entitlements hereinafter obtained by Developer shall exclusively control the development of the Property during the Term, including the uses of the Property, the density or intensity of use, the maximum height and size of proposed buildings, the provisions for reservations or dedications of land for public purposes and the design, improvement and construction standards and specifications applicable to the Project.
3.1.1 Parcel 005-242-073 shall be developed as recreational vehicle, watercraft, and recreational trailer storage in accordance with standards set forth in Title 17 of the City’s Coastal Zoning (1983) code (“New Phase 2”). Except for previously permitted outdoor irrigation and use during any construction activities, outdoor water use shall be prohibited in connection with New Phase 2. The maximum number of recreational vehicle, watercraft, and recreational trailer storage spaces authorized to be constructed on Parcel 005-242-073 is 122. The site plan for New Phase 2 is attached hereto as Exhibit “B”. City has requested and received all information necessary for consideration and approval of New Phase 2.
3.1.2 Parcel 005-242-074 shall be developed as a self-storage facility no larger than forty thousand (40,000) square feet, in accordance with standards set forth in Title 17 of the City’s Coastal Zoning (1983) code (“New Phase 3”). Except for previously permitted outdoor irrigation and during any construction activities, outdoor water use shall be prohibited in connection with New Phase 3. The site plan for New Phase 3 is attached hereto as Exhibit “C”..
3.2. Entitlements. Subject to the City’ s exercise of its police power authority and applicable limitations on development agreements in state law, the Developer shall have a vested right to: (i) receive from the City all future development approvals for the Property that are consistent with the development described in Sections 3.1.1 and 3.1.2; (ii) not have such approvals be conditioned or delayed for reasons which are inconsistent with this Development Agreement; and (iii) develop the Property in a manner consistent with such approvals in accordance with this Development Agreement. Any future development approvals for the Property, including without limitation general plan amendments, zoning changes, or parcel maps or tract maps, shall upon approval of the City be vested in the same manner as provided in this Development Agreement. In furtherance of the foregoing, the Developer retains the right to apportion the uses, intensities and densities, between itself and any other owners of the Property, upon the sale, transfer or assignment of any portion of the Property, so long as such apportionment is consistent with the future entitlements obtained from the City, and this Development Agreement.
3.3. Rights of City Generally.
3.3.1 City shall have a right to regulate development of the Project and use of the Property consistent with this Agreement and Applicable Law. As set forth herein, “Applicable Law” shall include, but not be limited to all state and federal statutory and regulatory provisions governing use of the Property, the California Coastal Act, the California Environmental Quality Act (“CEQA”), and the rules, regulations and official policies of City, including the plans, municipal codes, ordinances, resolutions and other local laws, regulations, fees and policies of City in force and effect on the Effective Date. The Parties expressly agree that Pismo Beach Municipal Code Chapter 17.48 shall be applicable to the Project and this Agreement notwithstanding the fact that Chapter 17.48 applies only to parcels outside the Coastal Zone. City may apply to the Project and the Property any rule, regulation or official policy of City (including any plan, municipal code, ordinance, resolution or other local law, regulation, capital facility fee or policy of City) (each a “City Law”) that does not conflict with Applicable Law or this Agreement. City shall not, however, without the written consent of Developer apply to the Project or the Property (whether by initiative, Attachment 1
9.G-8Council Agenda 12-19-2023
referendum, imposition of mitigation measures not otherwise required under CEQA or otherwise) any City Law that is in conflict with Applicable Law or this Agreement.
3.3.2 Nothing herein shall prevent City from applying to the Project standards contained in uniform building, construction, fire or other uniform codes, as the same may be adopted or amended from time to time by City, provided that the provisions of any such uniform code shall: (i) Apply to the Project only to the extent that such code is in effect on a City-wide basis; and (ii) With respect to those portions of any such uniform code that have been adopted by City without amendment, be interpreted and applied consistently with the generally prevailing interpretation and application of such code in California.
3.3.3 Nothing herein shall prevent City from applying to the Project those standards and specifications for public improvements (e.g., streets, storm drainage, parking lots, and driveway widths) that are in effect on a City-wide basis, as they are adopted or amended from time to time by City, provided that such standards and specifications shall apply to the Project and the Property only to the extent that they are in effect on a City-wide basis.
3.3.4 Upon Developer’s submission of any complete application for a Project approval, together with any fees permitted under Section 4 and required by City in accordance with Applicable Law, City shall use its best efforts to commence and complete promptly and diligently all steps necessary to act on the application. Developer promptly shall provide to City all information reasonably requested by City for its consideration of any such application. Except as otherwise specifically provided in this Section, all applications for Project approvals submitted by Developer shall be considered by City in accordance with Applicable Law.
4. Project Scope and Conditions.
4.1 In addition to such generally applicable conditions as are typically imposed in the development review process, and subject to the condition precedent that Developer receive all approvals of governmental entities required to develop the Project and that the Project is developed, Developer shall perform the following:
4.1.1. For New Phase 2, Developer shall pay as, and in complete satisfaction for planning, engineering, building permit, fire plan check and development impact fees, the lump sum of four hundred forty-one thousand dollars ($441,000.00) when Developer applies for a building permit for New Phase 2. City may not require any additional fees for the development of New Phase 2.
4.1.2. For New Phase 3, Developer shall have six months after the City’s issuance of the final discretionary permits for New Phase 3 to obtain building permits with development impact fees for New Phase 3 fixed at six thousand seven hundred sixty-one dollars ($6,761.00) per one thousand square feet of self-storage development or portion thereof with no outdoor water use.
Thereafter, the impact fees applicable to New Phase 3 shall be annually increased by a cost escalator equal to the Consumer Price Index for the Los Angeles-Long Beach-Anaheim area, all urban consumers, all items (CPI-U) for the month most recently published preceding the anniversary date of the Fixed Fee Date (as defined herein) over the same month in the preceding year(s). The first annual increase shall occur six months plus one day after the City’s issuance of the final discretionary permits for New Phase 3 (“Fixed Fee Date”), and annually thereafter.
PBSS’s obligation to City for building permit and inspection fees for New Phase 3 shall be those fees in effect at the time building permits are issued for New Phase 3.
Attachment 1
9.G-9Council Agenda 12-19-2023
4.2. Developer’s obligation to perform the actions described in Section 4.1 are strictly conditioned upon approval of the respective phase of the Project as set forth in the Application by all governmental entities of proper jurisdiction as may be necessary to construct and use the Project, and development of the Project at Developer’s sole discretion.
4.3. The Parties acknowledge that the rate at which the two phases of the Project develop depends upon numerous factors and market conditions that are not entirely within Developer’s or the City’s control such as market demand, interest rates, completion schedules, availability of labor, and other factors. The Parties wish to avoid the result of Pardee Construction Co. v. City of Camarillo, 37 Cal. 3d 465 (1984), where the failure of the parties therein to consider and expressly provide for the timing of development resulted in the court’s determination that a later-adopted initiative restricting the timing of development prevailed over the parties’ agreement. Accordingly, the Parties acknowledge that Developer shall have the right to develop the Project at such time Developer deems appropriate in the exercise of its subjective business judgment except as provided in this section below, and the City shall not attempt to limit or restrict the timing of development of the Project except in accordance with the terms of this Agreement. Developer shall complete both New Phase 2 and New Phase 3, not later than seven (7) years after the Effective Date. Should Developer fail to initiate construction on both New Phase 2 and New Phase 3 within this time period, absent an agreed-upon extension of this Agreement, which shall not be unreasonably withheld by City, Developer’s right to develop the Property as set forth herein shall lapse and be of no further force or effect.
5. Amendment or Cancellation.
5.1. Modification Because of Conflict with State or Federal Laws. In the event that State or Federal laws or regulations enacted after the Effective Date of this Agreement prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps, or permits approved by the City, the parties shall meet and confer in good faith in a reasonable attempt to modify this Agreement only to the extent necessary to comply with such State or Federal laws or regulations; provided, however, that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions illegal or impractical to enforce. Any such amendment or suspension of the Agreement shall be approved by the City Council which approval shall be within the City Council’s reasonable discretion. If the parties cannot agree to such modification or suspension, then either party may elect any one or more of the following in any sequence:
5.1.1. To terminate this Agreement by written notice to other party;
5.1.2. To challenge the new law preventing compliance with the terms of this Agreement and extend the Term of this Agreement for the period of time required to pursue and complete such challenge. If such challenge is successful, this Agreement shall remain unmodified, except for the extension of the Term and shall remain in full force and effect.
5.2. Amendment by Mutual Consent. This Agreement may be amended in writing from time to time by mutual consent of the parties to this Agreement and in accordance with the procedures of State law.
5.3. Cancellation by Mutual Consent. Except as otherwise permitted in this Agreement, this Agreement may be cancelled in whole or in part only by the mutual consent of the parties and Attachment 1
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their successors in interest, in accordance with the same procedure used when entering into this Agreement.
5.4 Continuing Cooperation. The provisions of this Agreement require a close degree of good faith cooperation between the City and Developer. Implementation of the Project may require minor modifications of the details of the Project and affect the performance of the Parties to this Agreement. The anticipated refinements of the Project and the development of the Property may require that appropriate clarifications and refinements are made to this Agreement with respect to the details of the performance of the City and the Developer which shall be considered by both parties in good faith. The Parties desire to retain a certain degree of flexibility with respect to those items covered in general terms under this Agreement so long as the exercise of such flexibility does not result in a material change to either of the Parties’ reasonable expectations consistent with the purpose of this Agreement. Except as the Parties may otherwise agree, no amendment of this Development Agreement shall be required in connection with the issuance of any future Project approval. Any Project approval issued during the Term as to a portion of the Property shall be incorporated automatically into this Development Agreement and vested hereby. City shall not, however, amend or issue any Project approval unless Developer requests such an amendment or issuance from City unless otherwise permitted by this Agreement.
6. Annual Review.
6.1. Review date Pursuant to Government Code Section 65865.1, the annual review date for this Agreement (the “Review Date”) shall be one year following the Effective Date and the annual anniversary of said date each year thereafter.
6.2. Annual Review Process. The City’s Planning Division shall initiate the annual review by giving to Developer, no later than sixty (60) days following the Review Date, written notice that the City intends to undertake such review for the annual period ending with the Review Date.
Developer shall be required to pay to City such fees as are established by City Council resolution for the annual review of a development agreement, if any. Such fees shall be limited to the reasonable costs incurred by the City in conducting the Annual Review, if any. Developer shall provide evidence of good faith compliance with the terms and conditions of this Agreement to the Planning Division within thirty (30) days following receipt of the Planning Division’s notice. The Planning Division shall review the evidence submitted by Developer and shall, within thirty (30) days following receipt of Developer’s evidence, make a recommendation to the City Council either (1) that the City Council find that Developer has demonstrated good faith compliance with the terms and conditions of this Agreement, or (2) that the City Council finds that Developer has not demonstrated good faith compliance with the terms and conditions of this Agreement, setting forth with specificity the basis on which the Planning Division makes its recommendation of a finding of non-compliance. In the event the City Council finds that Developer has not demonstrated good faith compliance with the terms and conditions of this Agreement, City may terminate this agreement pursuant to Government Code Section 65865.1 and the hearing requirement in Section 6.3 of this Agreement.
6.3. Hearing. The Planning Division’s recommendation shall be considered by the City Council at a regularly scheduled meeting following the City Council’s receipt of the Planning Division’s recommendation. In the event the City Council finds that Developer has not demonstrated good faith compliance with the terms and conditions of this Agreement, City shall provide notice to Developer and provide Developer forty-five (45) days to cure and correct such Attachment 1
9.G-11Council Agenda 12-19-2023
non-compliance. If Developer fails to cure and correct the non-compliance specified in the notice, the City Council shall, at the time and place set for the hearing on modification or termination, Developer shall be given an opportunity to be heard and represented. If the City Council finds, in its good faith determination based upon substantial evidence, that Developer has not materially complied with the terms or conditions of the Agreement, the City Council may terminate or modify this agreement pursuant to Government Code Section 65865.1 to the extent reasonably necessary to protect the City’s interests under this Agreement.
6.4. Determination of Compliance. If the City Council finds and determines that the Developer has complied in good faith with the terms and conditions of this Agreement during the period under review, the review for that period shall be concluded. City shall, upon request by Developer, issue a Certificate of Agreement Compliance (“Certificate”) to Developer and Developer’s mortgagee, if any, stating that after the most recent annual review and based upon the information known or made known to the City, that: (1) this Agreement remains in effect; (2) there is no pending or threatened exercise of City’s police power with respect to the Project and the Property; and (3) Developer is not in default and there are no matters that, with the giving of notice or the passage of time, would constitute a default. The Certificate shall be in recordable form and shall contain information necessary to communicate constructive record notice of the finding of compliance. Developer may record the Certificate with the County Recorder. Whether or not the Certificate is relied upon by assignees or other transferees or Developer and/or Developer’s mortgagee, City shall not be bound by a Certificate if a default existed at the time of the annual review, but was intentionally concealed from or otherwise not actually or constructively known to the City.
6.5. Failure to Hold Review. In the event that City does not initiate an annual review or that the City Council does not make its determination within six months of the Review Date for a given year, then it shall be deemed conclusively that Developer has complied in good faith with the terms and conditions of this Agreement during the period under review. City shall issue a Certificate pursuant to Section 6.4 upon request of Developer.
7. Default and Notice and Cure. Default and Notice. On the occurrence of an event of default by either party, the non-defaulting party shall serve written notice of such default on the defaulting party.
If the default is not cured by the defaulting party within thirty (30) days after service of such notice of default, the non-defaulting party may then commence any legal or equitable action to enforce its rights under this Agreement; provided, however, that if the default cannot be cured within the thirty (30) day period, the non-defaulting party shall refrain from any such legal or equitable action so long as the defaulting party begins to cure such default within the thirty (30) day period and diligently pursues such cure to completion. Failure to give notice shall not constitute a waiver of any default. In the case of a default by the City that results in delays to the Project, the Term shall be extended for a period of time commensurate with those delays caused by the default by the City.
8. Transfers and Assignments.
8.1. Right to Assign. Developer’s rights under this Agreement may be transferred, sold, or assigned in conjunction with the transfer, sale, or assignment of all or a portion of the Property, provided that no such partial transfer shall violate the Subdivision Map Act, Government Code Section 66410 et seq.
Attachment 1
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8.2. Release Upon Transfer. Upon the transfer, sale, or assignment of Developer’s rights and interests hereunder pursuant to the preceding subparagraph of this Agreement, Developer shall be released from the obligations under this Agreement with respect to the Property transferred, sold, or assigned, arising after the date of such transfer, sale, or assignment; and Developer shall be released with respect to all such assumed obligations.
9. Agreement Runs with the Land. All of the provisions, rights, terms, covenants, and obligations contained in this Agreement shall be binding on, and inure to the benefit of, the parties and their respective heirs, successors, and assignees, representatives, lessees, and all other persons acquiring the Property, or any portion of the Property, or any interest therein, whether by operation of law or in any manner whatsoever. All of the provisions of this Agreement shall be enforceable as equitable servitudes and shall constitute covenants running with the land pursuant to applicable laws, including, but not limited to, California Civil Code Section 1468.
10. Recordation of Development Agreement, Amendment, or Cancellation. Within ten (10) days after the Effective Date of this Agreement, the City Clerk shall submit a fully-executed original of this Agreement for recording with the County Recorder. If the parties to the Agreement or their successors-in-interest amend or cancel the Agreement or if the City terminates or modifies the Agreement for failure of the Developer to comply in good faith with the terms or conditions of the Agreement, the City Clerk shall submit for recording the notice of such action with the County Recorder.
11. Miscellaneous Provisions. The following miscellaneous provisions shall apply to this Agreement:
11.1. Further Documents. The parties agree that they will execute such other instruments and documents as are or may become necessary or convenient to carry out the intent and purposes of this Agreement.
11.2. Relationship of City and Developer. This Agreement is a contract that has been negotiated and voluntarily entered into by City and Developer. The Developer is not an agent of City. The City and Developer hereby renounce the existence of any form of joint venture or partnership between them and agree that nothing contained in this Agreement or in any document executed in connection with this Agreement shall be construed as making the City and Developer joint venturers or partners.
11.3. Headings. All headings in this Agreement are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement.
11.4. Attorneys’ Fees.
11.4.1 If any legal proceeding or other action is brought or threatened for the enforcement or interpretation of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, and the prevailing party in any such action(s) should incur any legal fees, including, but not limited to, attorneys’ fees, paralegal fees, expert witness fees and other similar costs, the successful or prevailing party or parties to any such dispute or action shall be entitled to recover their reasonable attorneys’ fees and additional legal costs incurred, together with any other relief to Attachment 1
9.G-13Council Agenda 12-19-2023
which they may otherwise be entitled, as determined by a referee, judge at trial, or upon appeal or petition.
11.4.2. If any person not party to this Agreement institutes any administrative, legal or equitable action or other proceeding challenging the validity of any provision of this Agreement, any Project approval or the sufficiency of any review of this Agreement, or any Project approval under CEQA (each a “Third-Party Challenge”), the Parties promptly shall meet and confer as to the most appropriate response to such Third-Party Challenge. City shall tender the complete defense of any Third-Party Challenge to Developer, and upon such tender: (i) Developer shall indemnify City against any and all fees and costs of whatever description arising out of the defense of such Third-Party Challenge including but not limited to reasonable attorneys’ fees or costs of litigation, and all financial judgments or other monetary relief awarded against City; and (ii) Developer shall control the defense and/or settlement of such Third-Party Challenge and may take any and all actions it deems necessary and appropriate in its sole discretion in connection therewith; provided, however, that Developer shall seek and secure City' s consent to any settlement of such Third-Party Challenge only if such settlement materially changes the Project or the Property, which consent shall not unreasonably be withheld or delayed. If Developer should fail to accept City’s tender of defense as set forth above, City shall defend such Third-Party Challenge and control the defense and/or settlement of such Third-Party Challenge as City decides (in its sole discretion), and City may take any and all actions it deems necessary and appropriate (in its sole discretion) in connection therewith.
Developer shall indemnify City against reasonable fees and costs arising out of the City’s defense of such Third-Party Challenge. In any action or proceeding challenging the approval of this Agreement, the City shall reasonably cooperate with Developer in defending such action or proceeding. Notwithstanding the foregoing, if Developer determines for any reason that it no longer intends to develop the Project, then it may deliver notice of such determination to City, and Developer shall not be liable for any defense costs incurred by City more than 90 days following the delivery of such notice.
11.4.3 Developer shall defend and indemnify City from and against any and all damages, claims, costs and liabilities arising out of the personal injury or death of any person, or damage to the property of any person, to the extent such damages, claims, costs or liabilities result from the construction of the Project by Developer or by Developer’s contractors, subcontractors, agents or employees, except as caused by the sole negligence, active negligence or willful misconduct of City, its officers, employees, contractors, consultants or agents.
11.5 Applicable Law/Venue. This Agreement shall be construed and enforced in accordance with the laws of the State of California. Venue for any dispute arising under this Agreement lies in the county of San Luis Obispo and Developer hereby consents to personal jurisdiction there for that purpose. Developer acknowledges and agrees that the terms and provisions of this Agreement specifically permit City in some instances to impose requirements upon the Project that City would not otherwise be able to impose due to a lack of nexus, rough proportionality or reasonable relationship between the Project and such requirement or other reasons. To the extent any such requirement is imposed by City upon the Project consistently with the terms and provisions of this Agreement, Developer waives any right to challenge the imposition of such requirement by City.
11.6. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed duly given (i) if delivered personally, when received; (ii) if transmitted by facsimile, upon the generation by the transmitting facsimile machine of a confirmation that the entire document has been successfully transmitted; (iii) if sent by Attachment 1
9.G-14Council Agenda 12-19-2023
recognized courier service, on the business day following the date of deposit with such courier service, or (iv) if sent by registered mail, postage prepaid, return receipt requested, on the third business day following the date of deposit in the United States mail. All such notices shall be addressed to a party at its address as set forth below, or to such other address or facsimile number as a party shall notify the other of in accordance with this Section.
IF TO CITY: City of Pismo Beach
Attn: City Manager
760 Mattie Road
Pismo Beach, CA 93449
IF TO DEVELOPER: Pismo Beach Self-Storage, LP
Attn: William Kendall
1601 Eastman Avenue, Suite 100
Ventura, CA 93003
WITH A COPY TO: Adamski, Moroski, Madden, Cumberland & Green Attn: Michelle L. Gearhart
P.O. Box 3835
San Luis Obispo, CA 93403-3835
11.7. Invalid Provisions. If any one or more of the provisions contained in this Agreement are held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect any other provision hereof, and the intent manifested thereby shall be recognized.
11.8. Time. Time is of the essence of each and every provision of this Agreement.
11.9 Force Majeure. Performance by any Party of its obligations hereunder shall be excused during any period of “Permitted Delay” as hereinafter defined. For purposes hereof, Permitted Delay shall include delay beyond the reasonable control of the Party claiming the delay (and despite the good faith efforts of such Party) including, but not limited to: (i) acts of God, (ii) civil commotion and acts of terrorism, (iii) riots, (iv) strikes, picketing or other labor disputes, (v) shortages of materials or supplies, (vi) damage to work in progress by reason of fire, floods, earthquake or other casualties, (vii) failure, delay or inability of the other Party to act, (viii) as to Developer only, the failure, delay or inability of City to provide adequate levels of public services, facilities or infrastructure to the Property, (ix) as to City only, with respect to completion of the annual review or processing applications for Approvals, the failure, delay or inability of Developer to provide adequate information or substantiation as reasonably required to complete the Annual Review or process applications for Approvals; (x) delay caused by restrictions imposed or mandated by governmental entities other than the City; (xi) enactment conflicting state or federal laws or regulations, (xii) judicial decisions or similar legal incapacity to perform, and (xiii) litigation brought by a third party attacking the validity of this Development Agreement. Any Party claiming a Permitted Delay shall notify the other Party in writing of such delay within 30 days after the commencement of the delay, which notice, (“Permitted Delay Notice"), shall include the estimated length of the Permitted Delay. A Permitted Delay shall be deemed to occur for the time set forth in the Permitted Delay Notice unless a Party receiving the Permitted Delay Notice objects in writing within 10 days after receiving the Permitted Delay Notice. Upon such an objection, the Parties shall Attachment 1
9.G-15Council Agenda 12-19-2023
meet and confer within 30 days after the date of the objection in a good faith effort to resolve their disagreement as to the existence and length of the Permitted Delay.
11.10. No Third-party Beneficiaries. This Agreement is not intended to create duties, obligations, or rights of third parties beyond the Parties to this Agreement.
11.11. Successors in Interest. The terms and conditions of this Agreement shall be for the benefit of or a burden upon the Property, shall run with title to the Property, and shall be binding upon Developer and its permitted successors, assigns and transferees during their respective ownerships of any portion of the Property.
11.12. Entire Agreement. This instrument contains all the understandings and agreements of whatsoever kind and nature existing between the parties hereto with respect to this Agreement, and the rights, interests, understandings, agreements and obligations of the respective parties and their prior oral agreements, if any.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.
City of Pismo Beach:
By: _____________________________
Jorge E. Garcia, City Manager
APPROVED AS TO FORM:
_____________________________
Dave Fleishman
City Attorney
Pismo Beach Self-Storage, LP:
____________________________________
William Kendall, Partner
APPROVED AS TO FORM:
____________________________
Michelle L. Gearhart
Counsel for Pismo Beach Self-Storage, LP
(NOTARIZATION ATTACHED)
EXHIBIT SCHEDULE:
EXHIBIT “A”: City Council Ordinance No. O-2023-___ approving Development Agreement.
EXHIBIT “B”: Site Plan for New Phase 2 and New Phase 3.
Attachment 1
9.G-16Council Agenda 12-19-2023
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TOTAL
(2 STORY)(1 STORY)35,530 SF3,964 SF
39,494 SF
SITE PLAN
SCALE : 1" = 30'-0"
110.26.2023
13-350
PISMO BEACH STORAGE - PHASE 3: SELF STORAGE ADDITION
PISMO BEACH, CA
G R O U P
V A L L I
ARCHITECTURAL
REPRESENTATIVE/ARCHITECT
PHONE:E-MAIL:
VALLI ARCHITECTURAL GROUP924-D NORTH ART VILLAGE WAYIVINS, UT 84738 [email protected]
ARIEL L. VALLI
APPLICANT
MIKE ROSS
PISMO BEACH SELF STORAGE, LP1601 EASTMAN AVE. #100VENTURA, CA 93003 [email protected]
LAND OWNER
BILL KENDALLPISMO BEACH SELF STORAGE, LP1601 EASTMAN AVE. #100VENTURA, CA 93003 805-642-4773
[email protected]
PHONE:E-MAIL:
PHONE:
E-MAIL:
PROJECT DATA
SITE AREA s.f.32,546
acres.747
Item 7.A - 18
Attachment 1
Attachment 1
9.G-17Council Agenda 12-19-2023
PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #11.%
SUBJECT/TITLE:
INTRODUCTION (FIRST READING) OF AN ORDINANCE APPROVING A
DEVELOPMENT AGREEMENT WITH PISMO BEACH SELF STORAGE, LP FOR THE PROPERTY LOCATED AT 100 FIVE CITIES DRIVE
RECOMMENDATION:
Introduce an Ordinance approving a Development Agreement with Pismo Beach Self Storage, LP.
BACKGROUND:
On October 17, 2023, the City Council approved a settlement agreement with Pismo Beach Self Storage, LP (“PBSS”) that resolved various lawsuits brought by PBSS against the City to challenge the City’s application of development impact fees to PBSS’s self- storage facility project on Five Cities Drive. Under that settlement agreement, the City is required to process a Development Agreement for the project to allow changes to Phases 2 and 3 of the project, from the currently approved industrial condominium and retail uses to recreational vehicle parking and additional self-storage uses.
Pursuant to Government Code Section 65867 and Pismo Beach Municipal Code (PBMC) Section 17.48.030, the Planning Commission conducted a public hearing on November 14, 2023, to review the draft Development Agreement and provide its written recommendation to the City Council. The Planning Commission adopted Resolution PC- R-2023-026 (Attachment 2) recommending that the City Council approve the Development Agreement.
Under Government Code Section 65867.5, a Development Agreement must be adopted via ordinance, and the ordinance must contain findings that the Development Agreement is consistent the General Plan, and any applicable specific plans. There are no specific plans applicable to the project site.
PBMC Section 17.48.040 requires a Development Agreement to contain the following elements:
1. Duration of the agreement;
2. Permitted uses for the subject property;
3. Density or intensity of the permitted uses;
4. Approved site plans, elevations, floor plans, and sections;
5. Provisions, if any, for reservation or dedication of land for public purposes; and
6. Any other provisions required by state law.
Staff prepared the draft Development Agreement (Attachment 1.A) to incorporate these provisions, as well as other permissive provisions. The Development Agreement has also been approved as to form by legal counsel for PBSS.
Council Agenda 12-5-2023 11.B-1
Attachment 2
December 5, 2023 Introduction Staff Report
9.G-18Council Agenda 12-19-2023
The project site is currently zoned C-2 (General Commercial), and it is designated commercial in the Pismo Marsh Planning Area of the General Plan. In 2007, the Planning Commission determined that the project was consistent with the General Plan and Local Coastal Plan. Since the modifications contemplated in the development agreement are similar in nature to those approved for the project site, staff recommends that the City Council find the proposed changes to be consistent with the General Plan.
In approving the development agreement, the Council would not be approving the final layout or details of Phases 2 and 3 of the Project. Those would be returned to the Planning Commission for consideration and approval at a later date. The Development Agreement is simply a tool to vest in PBSS a right to develop the Project site with uses different than those currently approved for the site.
Conclusion and Recommendation
Staff recommends that the Council introduce an Ordinance (Attachment 1) approving the Development Agreement and authorizing the City Manager to execute the agreement on behalf of the City. If the Council acts to introduce the Ordinance as recommended, it will be returned for adoption at the next available meeting and will become effective by statute 30 days thereafter.
FISCAL IMPACT:
The fiscal impact of approving the development agreement itself is expected to be neutral.
However, pursuant to the settlement agreement with PBSS previously approved by the City Council, the City has received the $400,000 payment called for by that agreement, and staff anticipates the $441,000 payment required by the settlement agreement for Phase 2 of the project will be paid upon issuance of the final discretionary permit for that phase. The timing and amount of impact fees and other fees payable for Phase 3 will be dependent on when the plans for Phase 3 are submitted and on the size of the self- storage facility proposed by PBSS.
ALTERNATIVES:
1. Modify and then introduce the ordinance.
2. Do not introduce the ordinance; provide direction to staff.
ATTACHMENTS:
1. Ordinance O-2023-XXX
1.A. Exhibit A to Resolution: Development Agreement
2. Planning Commission Resolution PC-R-2023-026
Submitted by: Meeting Date: December 5, 2023
Dave Fleishman, City Attorney
City Manager Approval:
Council Agenda 12-5-2023 11.B-2
Attachment 2
December 5, 2023 Introduction Staff Report
9.G-19Council Agenda 12-19-2023