City of Sacramento
City Council - 2PM Report
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File ID: 2025-01675 10/7/2025
First Amendment to Acquisition, Reimbursement and Credit Agreement with M&H Realty Partners VI. L.P. for Construction of Delta Shores Infrastructure File ID: 2025-01675
Location: Districts 7, 8
Recommendation: Pass a Motion authorizing the Interim City Manager or designee to execute the First Amendment to Acquisition, Reimbursement and Credit Agreement for Construction of Delta Shores Infrastructure (ARC Agreement) with M&H Realty Partners VI, L.P. (M&H) adding drainage swales improvements constructed as part of the Delta Shores development to the list of improvements for which M&H is eligible for reimbursement of Delta Shores Impact Fees Contact: Jessica Steinhauer, Senior Development Project Manager, (916) 808-8243, [email protected]; Eric Frederick, Special Districts Manager, (916) 808-5129, [email protected]; Department of Finance
Presenter: None
Attachments:
1-Description/Analysis
2-First Amendment to ARC Agreement
Description/Analysis
Issue Detail: On September 24, 2019, Council approved the updated Delta Shores Finance Plan (Finance Plan) and established the associated Delta Shores Impact Fee (DSIF), whereby the City would collect fees from developers of new construction projects in the Delta Shores development to help pay for public facilities and infrastructure that will be needed as a result of the new development.
Developers or landowners constructing certain public infrastructure in the Delta Shores project area that will be conveyed to the City upon completion are eligible for reimbursements or credits against applicable Delta Shores Impact Fees per the Finance Plan (as updated). As part of implementing the DSIF program, property owners and developers must execute an ARC Agreement before the release of any DSIF credits or funds as payment for public-infrastructure projects that are funded by the DSIF and are needed to develop properties within the Delta Shores Planned Unit Development Area (PUD Area).
File ID: 2025-01675 10/7/2025
To that end, the City and M&H (who is the master developer of the Delta Shores PUD Area) entered into the ARC Agreement on August 18, 2020, as a means to provide credits and reimbursement for public infrastructure included in the DSIF program and constructed by M&H (City Agreement No. 2020-2502). Infrastructure projects in the original ARC Agreement included the I-5 Interchange and Consumnes River Boulevard Extensions, as well as certain roadway, sewer, and storm drain improvements serving the PUD Area.
A component of public infrastructure not included in the original ARC Agreement was drainage swales (Swales) constructed within the PUD Area. At the time the original ARC Agreement was executed, the Swales had yet to meet the required five-year success criteria contained in the Army Corps of Engineers’ 404 Permit regulating the construction and acceptance of the Swales. The success criteria have since been satisfied and the City and M&H now desire to amend the ARC Agreement to add the Swales and their construction costs to that agreement, thus making them eligible for credits/reimbursement under the DSIF program.
Policy Considerations: Amending the ARC Agreement to include the Swales costs will allow the City to issue M&H DSIF credits, or directly reimburse M&H using DSIF funds on hand, for costs related to the construction of the Swales. Credits/reimbursements are limited to the amounts included in the Finance Plan and are issued pursuant to the terms and conditions of the amended ARC Agreement.
Economic Impacts: None.
Environmental Considerations: California Environmental Quality Act (CEQA): Under CEQA Guidelines, administrative proceedings related to implementation of an impact fee program (an impact fee program being a financing mechanism) without commitment to any specific projects which may result in a potentially significant physical impact to the environment does not constitute a project for purposes of CEQA and is therefore exempt from review [14 Cal. Code Regs. § 15378(b)(4)].
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: Approval of the amendment to the ARC Agreement will support new development within the City and will allow for the financing by the City of additional public infrastructure above what was provided for in the original ARC Agreement.
Financial Considerations: M&H previously constructed the Swales using its own funds as part of developing the PUD Area. Construction costs of the Swales are included in the Finance Plan as DSIF funded backbone infrastructure. Reimbursement to M&H for construction of the Swales is consistent
File ID: 2025-01675 10/7/2025
with the DSIF program and the amended ARC Agreement, and the source of reimbursement is limited to development impact fees collected through the DSIF program. There are no impacts on other funds of the City.
Local Business Enterprise (LBE): Not applicable.