Successor Agency to the Former Redevelopment Agency
MEETING DATE: 11/16/2015
TITLE:
Title
Property Transfer Agreement and Non-Exclusive Easement Agreement with Maintenance Covenants for Parcels 1, 6, 7, 8, 9, 10, and 11 and Revised Parcels 2 and 5 of Parcel Map No. 36428
End
FROM:
Leisa Lukes, Economic Development Manager
RECOMMENDATION:
Recommendation
Staff recommends that the City Council and the City Council acting as the Successor Agency to the Former Redevelopment Agency of the City of Cathedral City approve the Property Transfer Agreement and Escrow Instructions and the Non-Exclusive Easement Agreement with Maintenance Covenants and direct the City Manager and Executive Director to execute the Agreements.
Body
BACKGROUND:
The former Redevelopment Agency of the City of Cathedral City (Former RDA) entered into a Disposition and Development Agreement (DDA) with M&M Property Company, LLC, (Developer) in 2011 to develop an approximate 3-acre site on the south side of East Palm Canyon for a building shell to be used as an automobile showroom and related facilities. The Developer completed this construction and the facility is currently the location of the Palm Springs Volkswagen dealership. This parcel was part of a larger site owned by the Former RDA.
The Developer also constructed an entry drive, Margot Murphy Way named in honor of his deceased wife, to provide vehicular access to the interior of the remaining land, including land owned by Conneaut Partners, LLC (Conneaut). The DDA contemplated that Margot Murphy Way would serve future development anticipated to include additional automobile dealerships to be developed on the remaining land. In consideration for Conneaut allowing a portion of its land (Parcel 1) to be included within the boundaries of Margot Murphy Way and for its dedication of land (Parcel A) to the City for purposes of widening East Palm Canyon Drive, an approximate 0.62-acre parcel (Parcel 8) within the larger land area is to be transferred to Conneaut (see Attachment 1, Parcel Map No. 36428).
The Property Transfer Agreement formalizes the transfer of Parcel 1 from Conneaut to Developer for the access road and the transfer of Parcel 8 from Developer to Conneaut. Parcel Map No. 36428 dedicates an easement over Parcels 1 and 11 and retains these parcels as a "private access road" for use by the benefitted parties (Developer, Conneaut, and the City of Cathedral City as the Successor Agency to the Former RDA). A Non-Exclusive Easement Agreement with Maintenance Covenants further acknowledges the dedication of an easement over the access drive for the benefit of the Developer's land, as well as the other parcels. This Agreement sets forth the terms for the access easement; reaffirms that the cost of maintaining the street, curbs, gutters and other related improvements of the access road are to be borne by the Developer; and establishes the process and proportions by which the benefitted will share in those costs upon development of the land.
DISCUSSION:
PROPERTY TRANSFER AGREEMENT AND ESCROW INSTRUCTIONS
The Property Transfer Agreement and Escrow Instructions (PTA, Attachment 2) serves to complete the property transfers necessary to satisfy the requirements of the DDA entered into between the Former RDA and Developer in 2011 for the development of an automobile dealership and related facilities on approximately 3 acres of land south of East Palm Canyon and the construction of Margot Murphy Way to provide access to the remainding land owned by the Successor Agency, as well as land owned by Conneaut. The Developer, Conneaut, and the City/Successor Agency are party to the PTA. Both the Developer and Conneaut have agreed to the terms of this Agreement. It is being presented for consideration by the City/Successor Agency. An escrow account will be established for purposes of the property transfer once the Agreement is approved by all parties.
Parcel Map No. 36428 shows the subdivision of land for the access road (Margot Murphy Way) and surrounding parcels. Margot Murphy Way is comprised of Parcel 1, owned by the Developer, and Parcel 11, currently owned by Conneaut. Upon approval of the PTA, Parcel 11 will transfer to Developer thereby giving Developer ownership of the entirety of the private access drive that Developer has constructed and is responsible for maintaining.
Parcel 8, comprised of approximately 0.62 acres of the Former RDA remainder land, was to be transferred from the Former RDA to Conneaut in consideration of Conneaut's transfer of Parcel 11 to Developer and Conneaut's dedication of public right of way to the City as needed to widen East Palm Canyon Drive. The dedication and roadway widening have already occurred. Due to the mishandling of property assets by an escrow transaction, further complicated by a banking transaction, Parcel 8 was previously, and erroneously, transferred to Developer. Approval of the PTA will allow for the transfer of Parcel 8 from Developer to Conneaut.
Approval of the PTA will also result in Conneaut continuing to own Parcels 9 and 10, which the Successor Agency currently leases; Developer retaining ownership of Parcels 1, 2 and 5; and the Successor Agency retaining ownership of Parcels 6 and 7. Parcels 3 and 4 are not a part of the PTA.
NON-EXCLUSIVE EASEMENT AGREEMENT AND MAINTENANCE COVENANTS
A Non-Exclusive Easement Agreement with Maintenance Covenants (Easement Agreement, Attachment 3) acknowledges the easement over the access drive that was dedicated by Parcel Map No. 36428. The DDA requires that the cost of maintaining the access road in a safe and attractive manner is the sole responsibility of the Developer. However, the DDA also states that the Former RDA is to "assist Developer in attempting to work out an equitable arrangement for the sharing of the costs of maintenance" as development occurs on those non-Developer owned parcels that receive benefit from access road. The maintenance covenants in the Easement Agreement serve to establish an equitable arrangement for the sharing of the costs of maintenance in anticipation of future development on these parcels. The Developer, Conneaut, and the City/Successor Agency are party to the Easement Agreement. Both the Developer and Conneaut have agreed to the terms of this Agreement. It is being presented for consideration by the City/Successor Agency. It is included as Exhibit "E" of the PTA; however, it will be a separately implemented Agreement upon approval by all parties.
Exhibit "E" of the Easement Agreement establishes the cost proration percentages used to determine each party's share of the annual maintenance costs. Maintenance costs will continue to be borne by the Developer and shared only by those benefitted parcels that have been developed, if any. Parcels 6 and 7, which are owned by the Successor Agency are included in this cost allocation; however, the Successor Agency would only be responsible for this prorated cost sharing if it retains those parcels after they are developed.
Section 4 of the Easement Agreement establishes the procedure by which the Developer may recover maintenance/repair costs that are due to Developer. Section 5 addresses the recourse that may be taken by any aggrieved party, including a benefitted owner, to the Easement Agreement.
Section 3c of the Easement Agreement addresses the ability for a monument sign to be located at the juncture of Margot Murphy Way and East Palm Canyon for the benefit of those businesses whose primary entrance is located on Margot Murphy Way. Prior to its installation, the parties for all of the benefitted parcels must first agree to its construction and maintenance.
FISCAL IMPACT:
The City is to pay all fees, costs, premiums and charges that are not covered by the payments required of the Developer and Conneaut per the PTA in order to close escrow on the transfer of Parcels 8 and 11. The City's cost obligation is estimated to be less than $2,000.
ATTACHMENTS:
1. Parcel Map No. 36428, Sheet 3
2. Property Transfer Agreement and Escrow Instructions
3. Non-Exclusive Easement Agreement with Maintenance Covenants