1 AGREEMENT FOR THE RESTRICTED PROPERTY OF
THE SYCAMORE HILLS DISTRIBUTION CENTER PROJECT
This Agreement (“Agreement”) is between KB Sycamore Hills I, LLC, a Delaware limited liability company as to an undivided 50% interest and KB Sycamore Hills II, LLC a Delaware limited liability company as to an undivided 40% interest and KB Sycamore Hills III, LLC, a Delaware limited liability company as to an undivided 10% interest as tenants in common (collectively, “ Owner”) and the City of Ri verside (“City ”), as of the date set forth below.
Developer and City are sometimes referred to in this Agreement individually as a “ Party,” or collectively as the “Parties.”
RECITALS
A. WHEREAS, Owner is the current sole owner in fee simple of certain real property consisting of 48.24 gross acres, located in the City of Riverside, County of Riverside, State of California (the “Property”).
B. WHEREAS, on January 25, 2022, City approved Owner’s proposal to subdivide the Property into three lettered and two numbered parcels for the construction of two warehouse distribution buildings totaling 603,100 square feet on 34.63 acres (“Sycamore Hills Distribution Center Project”), a 1.18 trailhead for the Sycamore Canyon Wilderness Park (“Trailhead”), and
12.23 acres of restricted property designated as Parcels A and B on Parcel Map 37789 (“Restricted Property”) (collectively, “Project”).
C. WHEREAS, the Restricted Property, which is described and depicted in Exhibit “A” attached hereto and incorporated by this reference, provides, among other things, compensatory mitigation for impacts associated with the Project pursuant to requirements of the following state and Federal approvals (collectively, “Agency Approvals ”): (1) United States Army Corps of Engineers (“ ACOE”) Section 404 Permit No. SPL -2018-00769 and any amendments thereto, and (2) the California Department of Fish and Wildlife ( “Department”) Lake or Streambed Alteration EPIMS Notification No. RIV-20405-R6 Operation of Law Letter.
D. W
HEREAS , the City’s approvals were made subject to certain Conditions of Approval (COA), including Condition 75, which made the City’s acceptance of fee title to the Restricted Property conditional on the satisfaction of certain requirements. Condition 75 is attached hereto and incorporated by reference as Exhibit “B.” E. WHEREAS, the Property was originally intended as a site for a different use (the Grove Church), which use was subsequently relocated, leaving onsite conditions of approval where the City agreed to accept underlying fee title to the Restricted Property, all of which is an extraordinary circumstance.
F. WHEREAS, Condition 75 requires, in part, the Restricted Property to be designated as a conservation easement designed to satisfy the Agency Approvals and requires the successful completion of a minimum five (5) year mitigation and monitoring program, after which, ownership transfer of the property to the City will occur. The Condition anticipates that the Rivers & Lands Conservancy ( “RLC”) will maintain the Restricted Property in perpetuity after the 2 successful completion by the owner of the five year mitigation and monitoring program and t he satisfaction of the Agency Approvals requirements pursuant to the terms of a Conservation Easement.
G. WHEREAS, Condition 75(c) also contemplates that RLC will approve final acceptance of a conservation easement over the Restricted Property and incorporate all costs associated with mitigation and management of the land including, but not limited to any additional cost associated with corrective actions required from violations of the conservation easement and or natural causes, such as homeless encampments, dumping, vandalism, etc. (collectively, “Owner Obligations”).
H. WHEREAS, Rivers and Land Conservancy is agreeable to accepting a conservation easement over the restricted property, but not any responsibility for corrective actions required from homeless encampments, dumping, and vandalism, as recited in Condition 75(c).
I. WHEREAS, the Owner desires the City to accept, and the City is willing to accept considering the extraordinary history of the site, that limited responsibility for corrective actions required from homeless encampments, dumping, and vandalism, as recited in Condition 75(c), as set forth in the Terms below.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owner and City do hereby agree as follows:
AGREEMENT
1. City’s Obligations
In exchange for the Payment listed below, the City agrees to remove homeless encampments, dumping, and vandalism, as required in Condition 75(c), from the Restricted Property, for the sole purpose of satisfying that condition. City’s obligations would begin upon transfer of the underlying fee interest in the Restricted Property to the City, following the successful completion of a minimum five (5) year mitigation and monitoring program.
2. Payment
(a) The Parties agree that ONE MILLION SEVEN HUNDRED THOUSAND DOLLARS ($1,700,000.00) is a reasonable amount to cover the estimated costs of satisfying the Owner Obligations of Condition 75(c) (“Payment”).
(b) This Payment represents consideration to be used by the City in its discretion, regardless of whether any Owner Obligations on the Property are ever required, as long as the City approves this Agreement and assumes responsibility for the Owner Obligations identified in Condition 75(c); the Parties agree that City may use Payment funds on the Restricted Property itself and in the public area local to the Restricted Property to mitigate, avoid, or prevent homeless encampments on the Restricted Property.
5 Exhibit A
Restricted Property
6 Exhibit B
Condition 75 of City’s Original Conditions of Approval
“As required by Instrument 2009-030 3932 6-15-2009 Army Corps, Owner will transfer ownership in fee title of Parcels A & B (conservation easements) to City. City’s acceptance of Parcels A& B is contingent upon:
a. Owner’s successful completion of all regulatory agency requirements and any related mitigation measures.
b. Owner’s provision of maintenance and land management services for the conservation easement areas, performed by a qualified and city - approved land management organization, funded by Owner in perpetuity with a non-wasting endowment.
c. Prior to City’s acceptance of property interest for open space lots APN 263-060-022, 024 and 026, the Rivers and Land Conservancy Board of Directors sh all approve final acceptance of a conservation easement over the property. The conservation easement shall incorporate all cost associated with mitigation and management of the land including, but not limited to any additional cost associated with correcti ve actions required from violations of conservation easement and or natural causes, e.g. – homeless encampments, dumping, vandalism, fire, flood, etc.”