July 15, 2025
TO: City Council
REQUESTED BY: Travis Randel, Deputy City Manager, Development Services APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Updated Secured Agreement to Indemnify and Hold Harmless and Fee Reimbursement Agreement Tract 28224
RECOMMENDATION:
Staff recommends that the City Council:
1). Approve and authorize the Mayor to execute the updated Secured Agreement to Indemnify and Hold Harmless between the City of San Jacinto and SanJac 55, LLC, subject to review and revisions by the City Attorney;
2). Approve and authorize the Mayor to execute the Fee Reimbursement Agreement between the City of San Jacinto and SanJac 55, LLC, subject to review and revisions by the City Attorney; and
3). Direct staff to file a Notice of Exemption (NOE) with the Riverside County Clerk pursuant to CEQA Guidelines § 15062(d).
BACKGROUND:
The Maravilla development project is a residential subdivision located generally east of Ramona Expressway, south of 7th Street adjacent to the San Jacinto River Levee. The project was originally entitled through approval of Vesting Tentative Tract Map (VTTM) No. 28224 in September 1995. VTTM 28224 authorized the development of 179 residential lots and associated improvements, and at the time vested the project against changes in local development standards and impact fee programs, consistent with the California Subdivision Map Act.
A portion of the project, designated Tract Map 28224-1, included 86 lots and was recorded in 2001. Forty-six (46) of those lots were developed with single-family homes, all of which have been completed, finaled by the City, and sold to individual homeowners. The remaining forty (40) lots, as well as a common lot with an unfinished community center, remain undeveloped.
The current property owner, SanJac 55, LLC, acquired the site several years ago with the intent to complete the remaining development. In 2022, the City Council approved a Secured Agreement to Indemnify and Hold Harmless in anticipation of recordation of the remaining final map. However, that agreement was never executed by the property owner, and the map remained inactive.
SanJac 55, LLC has now entered into an agreement with LGI Homes, a national residential builder, which has expressed interest in acquiring and completing the build-out of the project.
To support this transition and proceed with recordation of the Final Map, two agreements have been updated and are presented for Council approval: (1) a revised Indemnification Agreement and (2) a Fee Reimbursement Agreement.
DISCUSSION:
Updated Indemnification Agreement
The updated Secured Agreement to Indemnify and Hold Harmless is intended to protect the City against any potential legal challenges arising from the approval and recordation of the Final Map, including but not limited to:
• Claims that the vesting rights of the 1995 Tentative Map have expired; • Challenges under the California Environmental Quality Act (CEQA); • Demands from external agencies for payment of development impact fees (e.g., TUMF or MSHCP) not in effect at the time of original project approval; and • Other litigation related to the implementation or extension of the entitlements.
Notable provisions of the Indemnification Agreement include:
• A commitment by SanJac 55, LLC to indemnify and defend the City and its officials, staff, and consultants from any such claims;
• Provision of a $100,000 security bond, letter of credit, or similar instrument to cover potential litigation costs;
• Recordation of Indemnification against the property to ensure enforceability; and • Termination of the security bond obligation after 120 days from the recordation of the Final Map, assuming no claims are filed.
This agreement updates and replaces the 2022 version previously approved by the Council, which was never executed. Importantly, the updated version narrows the scope of financial security from the prior version (which included prepayment of TUMF/MSHCP fees) and instead transfers fee-related risk management into the separate Fee Reimbursement Agreement.
Fee Reimbursement Agreement
The Fee Reimbursement Agreement is a new document intended to resolve uncertainty over the applicability of the Transportation Uniform Mitigation Fee (TUMF) and Multiple Species Habitat Conservation Plan (MSHCP) fees to the project.
Because VTTM 28224 was approved in 1995, before either of these fee programs was adopted, the City maintains that the project is exempt. However, the parties acknowledge the possibility that WRCOG (TUMF administrator) or RCTC/RCA (MSHCP administrator) may still attempt to collect these fees in connection with building permits for the remaining lots.
Key provisions of the Fee Reimbursement Agreement include:
• The developer agrees to submit payment for the TUMF and MSHCP fees at the time of building permit issuance;
• The City will hold those payments in escrow and not remit them unless formally requested by the appropriate regional agency;
• If no such request is made within three years of permit issuance, the City will refund the fees to the developer; and
• The developer retains the right to challenge any eventual payment demand directly with WRCOG or RCA, and the City agrees to reasonably cooperate in such efforts.
This structure allows development to proceed without delay while insulating the City from potential liability or disputes related to fee remittance. It also respects the City’s long-standing position that the project, as a vested map, is exempt from both programs.
CEQA DETERMINATION:
The proposed Final Map is consistent with the scope and intent of the previously approved VTTM 28224. The environmental impacts of the project were previously analyzed at the time of the original map approval in 1995.
TM 28224-1 was recorded and partially developed, and this current action pertains only to recording the Final Map for the remaining 137 lots authorized under the same vesting map. No substantial changes to the project or its surroundings have occurred that would trigger additional CEQA review.
Pursuant to CEQA Guidelines § 15061(b)(3), the City has determined that this action is exempt from further environmental review under the “common sense” exemption, as there is no possibility that the recordation of the Final Map will have a significant effect on the environment. In addition, the action qualifies for a statutory exemption under CEQA Guidelines § 15268(b)(3) (Approval of final subdivision maps), which exempts ministerial projects from CEQA. The City’s action to record the Final Map does not involve discretion, but rather acknowledges that all conditions of approval for the previously entitled Vesting Tentative Tract Map have been met in accordance with the Subdivision Map Act. Filing a Notice of Exemption will commence a 35-day statute of limitations period for any CEQA-related challenges.
FISCAL IMPACT:
There is no fiscal impact to the City’s General Fund. The Indemnification Agreement protects the City from costs related to litigation or claims associated with project approval, and the Fee Reimbursement Agreement ensures that any disputed fees are paid and held by the City until resolution.
The $100,000 indemnification security provides a limited but sufficient buffer to cover legal expenses should any challenges arise.
ATTACHMENTS:
Secured Agreement to Indemnifiy and Hold Harmless
Fee Reimbursement Agreement