Administrative
Report
H.8., File # 24-0988 Meeting Date: 6/11/2024
To: MAYOR AND CITY COUNCIL
From: MARC WIENER, COMMUNITY DEVELOPMENT DEPARTMENT DIRECTOR TITLE
APPROVE THE FIFTH AMENDMENT TO THE REIMBURSEMENT AGREEMENT WITH SOUTH
BAY CENTER SPE, LLC TO PREPARE AN ADDENDUM TO THE PROJECT EIR CERTIFIED BY CITY COUNCIL IN 2019 FOR THE CONSTRUCTION OF AN ADDITIONAL 350 RESIDENTIAL
UNITS STUDIED IN THE ORIGINAL EIR BUT NOT INCLUDED IN THE INITIAL PROJECT APPLICATION INCREASING THE TOTAL REIMBURSEMENT AMOUNT BY $31,934
EXECUTIVE SUMMARY
The South Bay Galleria (South Bay Social District) renovation project is nearing completion of the building permit plan check process for Phase 1A (existing mall renovations and development of a great lawn and skate park) and Phase 1B (300 residential dwelling units - apartments with ground floor commercial). Phase 1C (hotel) of the entitled South Bay Galleria redevelopment project is still in the design process with a plan check submittal date yet to be determined.
As a next step (Phase 2), the South Bay Center SPE, LLC is pursuing the development of an additional 350 residential units at the site, which was contemplated and studied in the 2019 Environmental Impact Report (EIR), but was not included in the initial 300-unit project application approved by the City Council in 2019.
In order to accommodate the addendum EIR review for the additional 350 units, an amendment to the reimbursement agreement between the City and the Developer (South Bay Center SPE, LLC) is needed to increase the amount of authorized reimbursement expenses by $31,934. The agreement was previously amended to include $28,000 of additional project application costs, which brings the total for Phase 2 reimbursement to $59,934.
BACKGROUND
The South Bay Galleria property owners are currently in the pre-construction execution phase (plan check and permitting) of their planned and approved redevelopment of the South Bay Galleria site.
The approved development required the preparation of an EIR and additional staff and legal resources to review and process what was ultimately approved by Council on January 15, 2019.
On December 16, 2014, the City Council approved a contract with Environmental Science Associates (ESA) that included the full scope of project services including public scoping, EIR preparation and circulation, responses to comments, and Final EIR delivery. Council also approved a corresponding reimbursement agreement with the project developer, South Bay Center SPE, LLC (Developer), which provided for the full cost reimbursement of all anticipated consultant, legal, and staff costs
H.8., File # 24-0988 Meeting Date: 6/11/2024
which provided for the full cost reimbursement of all anticipated consultant, legal, and staff costs associated with the environmental review for the project.
Through the review and approval process of the project, the City and the Developer entered into five amendments to the environmental services contract with ESA and three amendments to the Reimbursement Agreement. The final amendments to the environmental services and Reimbursement Agreement were approved by the City Council on December 19, 2017. Below is a breakdown of the total amount of the consulting services associated with the Project:
EIR Preparation - ESA $ 926,147
CEQA Legal Consultant - Sohagi Law Group $ 450,000
City Administrative Costs $ 206,422
Total $1,582,569
All contract costs noted above for the South Bay Galleria Project have been fully reimbursed to the City pursuant to the terms of the Reimbursement Agreement with South Bay Center SPE, LLC.
On November 21, 2023, the City Council approved a fourth amendment to the Reimbursement Agreement between the City and the Developer to increase the amount of the authorized reimbursable costs by $28,000 to account for additional City review to determine whether the Galleria expansion project EIR (certified by City Council with the original approval of the project in 2019) would need further revisions if the Developer were to add back the additional 350 residential units.
These units were contemplated and studied in the 2019 EIR but not included in the ultimate Project approval. The matter was evaluated by the Community Development Director and City Attorney’s Office, and it was determined that an addendum to the EIR would be necessary, which will require an additional $31,934 in funding to complete. Staff recommends that the City Council approve a fifth amendment to the Reimbursement Agreement, which would bring the total to $59,934 ($28,000 + $31,934).
COORDINATION
The Community Development Department coordinated the preparation of the recommended amendment to the Reimbursement Agreement with the City Attorney’s Office.
FISCAL IMPACT
The total costs associated with the City’s review of the Galleria expansion project EIR for the additional 350 residential units are estimated not to exceed $59,934 and will be fully reimbursed to the City through the proposed Reimbursement Agreement amendment.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Fifth Amendment to Reimbursement Agreement South Bay Assoc SPE · Administrative Report - City Council, November 21, 2023 · Fourth Amendment to Reimbursement Agreement South Bay Assoc SPE, LLC, November 21, 2023
· Administrative Report - City Council, December 19, 2017
H.8., File # 24-0988 Meeting Date: 6/11/2024
· Agmt - Third Amendment to Reimbursement Agreement Galleria, December 19, 2017 · Administrative Report - City Council, March 21, 2017
· Agmt - Second Amendment to Reimbursement Agreement, March 21, 2017 · Administrative Report - City Council, April 5, 2016
· Agmt - First Amendment to Reimbursement Agreement, April 5, 2016 · Administrative Report - City Council, December 16, 2014 · Agmt - Reimbursement Agreement with South Bay Association December 16, 2014