City Council
MEETING DATE: 9/26/2018
TITLE:
Title
Tract No. 32559 Portales Recovery, LLC: Approval of Improvement Agreement for the Completion of Improvements, and the Release of Obligations of Previous Subdivider, Far West Industries.
End
FROM:
John Corella, City Engineer
RECOMMENDATION:
Recommendation
Staff recommends the City Council approve the Improvement Agreement with Portales Recovery, LLC, for the completion of public improvements within Tract No. 32559; and authorize the execution of the Improvement Agreement by the Mayor and City Clerk; and in consideration of the new Improvement Agreement and posted securities, authorize the release of any and all obligations of the previous Subdivider under prior Subdivision Agreements.
Body
BACKGROUND:
The Final Map for Tentative Tract Map No. 32559 (Tract) was approved by the City and was recorded on September 26, 2005. This was a 72-lot residential tract in the Rio Vista-Verano area. The original Subdivider was Rio Vista Nevada, LLC.
Work began on the Tract but was not completed. Far West Industries subsequently acquired the entire Subdivision from Rio Vista Nevada, and assumed the obligations of its Subdivision Agreement by the execution of a Novation Agreement, in February 2008. Far West Industries (Far West) posted substitute securities to guarantee completion of Public Improvements. Work on the Tract progressed, but again was not completed. Far West was given two time extensions to complete the work, but failed to do so. The surety company which posted their bonds went bankrupt and Far West stopped all work.
In 2012, Portales Recovery, LLC, an affiliate of Inland Communities, Corp., acquired the Tract through a purchase and sale agreement with Far West. A condition of that agreement was that Portales Recovery, LLC would take over the public improvement obligations from Far West, and that Portales Recovery, LLC would assure that Far West’s obligations under the previous Subdivision Agreement and Novation Agreement would be released by the City. A Performance Deed of Trust was recorded in 2012 between Far West and Portales Recovery, LLC as an assurance that this release would occur.
DISCUSSION:
Portales Recovery, LLC is now in a position to take over such obligations, and has executed a new Improvement Agreement, secured with good and sufficient surety bonds, to guarantee completion of the remaining public improvements in the Tract.
The terms of the Improvement Agreement include provisions that upon its execution and the posting of the new securities, the City will approve the release of Far West from any and all remaining obligations under the terms of the previous Subdivision Agreement and Novation Agreement. This would then allow for the performance trust deed to be released and cleared from title on the Tract.
Portales Recovery, LLC is in escrow with a major builder to acquire and do a phased build-out of the lots within the Tract and on other properties in the same area owned by Portales Recovery, LLC and its affiliates. Approval of this new Improvement Agreement and its terms will facilitate these transactions.
FISCAL IMPACT:
None
ATTACHMENTS:
TR 32559 sketch
TR 32559 Portales Improvement Agreement w Attachments