TO:Andrew P. Powers, City Manager
FROM:Tracy M. Noonan, City Attorney
Jaime Boscarino, Finance Director
DATE:October 7, 2025
SUBJECT: Development Agreement and Purchase and Sale Agreement Amendments for Mixed-Use Project (The Lakes); Applicant: T.O.
Lakes, LLC
RECOMMENDATION:
1. Read ordinance in title only, waive further reading, and if no objection, introduce ordinance to approve First Amendment to Development Agreement (DAGR-2021- 70437/Contract No. 13633-2024) extending the term of the Agreement to March 29, 2031 (DAGR-2025-70002).
2. Consider T.O. Lakes, LLC’s request for a third-year extension option related to the closing date for consideration as outlined below and choose one of the two following options:
a. Option 1:
i. Approve the Third Amendment to the Purchase and Sale Agreement and Joint Escrow Instructions (Contract No. 13146-2022) dated December 9, 2022, between City and T.O. Lakes, LLC, (T.O. Lakes) granting T.O. Lakes an option to extend the purchase date one additional year (from June 30, 2027 to June 30, 2028) in consideration of $100,000 monetary contribution to City by T.O. Lakes.
ii. If the third-year option is exercised by T.O. Lakes, direct monetary contribution by T.O Lakes to be used to fund the Navigation Center‘s annual operating expenditure gap for FY 2027-28.
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b. Option 2:
Deny request by T.O. Lakes to amend the Purchase and Sale Agreement and Joint Escrow Instructions to provide a third one-year option to close escrow.
3. Find that amending the Development Agreement to extend the term of the Development Agreement, and, if applicable, amending the Purchase and Sale Agreement to extend the time to close escrow an additional year is/are exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3).
LEVINE ACT ITEM: Yes
FINANCIAL IMPACT:
Financial Impact To Be Determined. Staff time to process the requested amendment and to prepare this report are included in the Adopted FY 2025-26 General Fund Budget. A $100,000 monetary contribution would be contributed towards the City’s Navigation Center operating costs in the General Fund in FY 2027-28 if approved by City Council.
BACKGROUND:
On January 25, 2000, the former Thousand Oaks Redevelopment Agency (City’s predecessor in interest), and T.O. Civic Arts LLC, (a corporation under the Caruso portfolio of shopping centers in Southern California), agreed to enter into a Disposition and Development Agreement (Contract No. 4704-2000) that outlined the development and operation of The Lakes retail operation. The parties also entered into a Maintenance, Use, and Reciprocal Easement Agreement (Contract No. 6475-2004) and a Mixed-Use Ground Lease (Contract No. 6425-2004).
The project site encompasses a 7.58-acre parcel located at 2200 East Thousand Oaks Boulevard, at an easterly portion of the approximate 27-acre Civic Arts Plaza Specific Plan (SP 11).
On November 30, 2021, City Council held a public hearing on a proposed mixed- use project on the subject site. At the conclusion of the hearing, City Council took the following actions:
Adopted a resolution approving a General Plan Amendment to change the land use on the subject parcels from commercial to commercial-residential; Approved a Development Permit authorizing the construction of up to a 165- Development Agreement & Purchase & Sale Agreement Amendments for The Lakes October 7, 2025
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unit apartment building and associated site improvements; Approved a land division to create two air parcels and one master parcel; Approved a Protected Tree Permit;
Accepted a Mitigated Negative Declaration (MND);
Approved an Amended and Restated Maintenance, Use, and Reciprocal Easement Agreement;
Adopted an ordinance (Ordinance No. 1691-NS) approving a Development Agreement between City and T.O. Lakes, LLC (a newly formed corporation under the Caruso portfolio of shopping centers); and
Approved the sale of the property to T.O. Lakes for a price of $2,000,000 and future community benefit payments of up to $13,095,238.20 pursuant to the terms and conditions set forth in the Development Agreement and Purchase and Sale Agreement and Joint Escrow Instructions (PSA).
The Development Agreement has an effective date of March 29, 2022, and contains various contractual obligations that bind each party, including a five-year term, and various actions T.O. Lakes must take to effectuate the purchase of the property and build the project. Based on the current term, the Development Agreement expires on March 29, 2027, unless actions taken or obligations met as set forth under the Agreement language extend the term.
The PSA also contains various contractual obligations that bind each party, including a deadline for T.O. Lakes to exercise the purchase option, and a closing date by which T.O. Lakes must satisfy certain conditions, including the timely deposit into an escrow account of the $2,000,000 purchase price. T.O. Lakes, has timely exercised the purchase option, but has yet to purchase the property.
Section 6.3 of the PSA had an initial closing deadline of December 9, 2024. The parties entered into a First Amendment to the PSA on July 24, 2024, that extended the closing date to June 30, 2025. On June 10, 2025, City Council granted T.O.
Lakes’ request for two one-year options to extend the closing date in consideration of $100,000 for each year the option is exercised. After City Council’s approval of the request, T.O. Lakes exercised its first-year option and timely paid the City $100,000.
Based on the extension of the closing date contained in the PSA up to June 30, Development Agreement & Purchase & Sale Agreement Amendments for The Lakes October 7, 2025
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2027, staff reached out to Caruso representatives to discuss amending the term of the Development Agreement for a period of time after the last date for T.O.
Lakes to purchase the property under the PSA. T.O. Lakes also requests City Council agree to amend the PSA that would give T.O. Lakes an additional one- year option to extend the closing date (from June 30, 2027, to June 30, 2028) in consideration of an additional $100,000 for the extension.
DISCUSSION/ANALYSIS:
During the June 10, 2025, presentation on this project, City staff advised that if City Council approved T.O. Lakes’ request to enter into a Second PSA Amendment to extend the closing date, staff may bring a request to extend the term of the Development Agreement for City Council’s consideration. Staff supports an extension of the Development Agreement term to ensure it remains valid and enforceable after the closing date, which may occur by June 30, 2027, or June 30, 2028, if T.O. Lakes’ request for another one-year option is approved. Staff wants to ensure the rights and obligations contained in the Development Agreement are maintained while T.O. Lakes starts and completes the construction of the project.
While T.O. Lakes must submit building plans and pay all development fees owed to City and other public agencies before it can close escrow on the property, starting and completing construction is estimated to take between 18 to 20 months.
Extending the term of the Development Agreement past this window of time is a logical step. A First Amendment to the Development Agreement that extends the term of the Agreement to March 29, 2031, is attached to this staff report (Attachment #1).
T.O. Lakes is also requesting the parties enter into a Third Amendment to the PSA (Attachment #2), granting T.O. Lakes another one-year option to extend the closing date. If approved, T.O Lakes would have until June 30, 2028, to purchase the property.
In consideration for City Council granting the request, T.O. Lakes is offering to pay the City $100,000 for the additional one-year option to purchase the property. The terms of the proposed amendment would require T.O. Lakes to pay City $100,000 through an escrow account within two days of its decision to exercise the third- year option. Thus, if T.O. Lakes exercises its option to extend the closing deadline an additional year, it will notify City and pay City an additional $100,000 on or before May 29, 2027. The extension payments will be non-refundable and will not be applied toward the purchase price at closing.
LEVINE ACT (California Government Code § 84308):
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This item is subject to the Levine Act. City Councilmembers who have received a campaign contribution of more than $500 (aggregated) within the preceding 12 months from a party or their agent/representative, or a financially-interested participant involved in this proceeding may do either of the following: (1) disclose the contribution on the record and recuse themselves from this proceeding; or if applicable (2) return the portion of the contribution that exceeds $500 within 30 days from the time the official knew or should have known about the contribution, and participate in the proceeding.
All parties and their agents/representatives must disclose on the record of this proceeding any aggregated contribution of more than $500 made to any Councilmember within the preceding 12 months. Councilmembers are prohibited from accepting, soliciting, or directing a campaign contribution of more than $500 (aggregated) from a party, their agent/representative, or a financially-interested participant during a proceeding and for 12 months following the date a final decision is made. In addition, a party, their agent/representative, or a financially- interested participant is prohibited from contributing more than $500 (aggregated) to a Councilmember during a proceeding and for 12 months following the date a final decision is made (Attachment #3).
ENVIRONMENTAL ANALYSIS:
This agenda item was analyzed in conformance with CEQA. The underlying mixed-use residential project was previously analyzed under the principles and policies contained in the CEQA, and a Mitigated Negative Declaration was adopted by City Council when it approved the proposed project. As the only action to be taken by City Council on October 7, 2025, is to extend the term of the Development Agreement and, if applicable, extend the closing date, the limited action(s) is/are exempt from CEQA pursuant to CEQA Guidelines, Section 15061(b)(3). CEQA applies only to projects that 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 activity is not subject to CEQA. It has been determined that approving an extension of the term of the Development Agreement and, if approved, granting an additional one-year option for T.O. Lakes to extend the closing date, are actions that would not possibly have a significant effect on the environment and therefore are exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3).
COUNCIL GOAL COMPLIANCE:
Meets City Council Goals C:
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C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
Attachments:
Attachment #1 – Ordinance Adopting First Amendment to Development Agreement
Attachment #2 – Third Amendment to Purchase and Sale Agreement Attachment #3 – Levine Act Disclosure
CAO:420-46\pjh\Legal Files\The Lakes Residential Project\Staff Report