City Council
MEETING DATE: 9/28/2016
TITLE:
Title
First Amendment to the Purchase and Performance Agreement for the Verano Residential Project
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FROM:
Leisa A. Lukes, Economic Development Manager
RECOMMENDATION:
Recommendation
Staff recommends the City Council approve the First Amendment to the Purchase and Performance Agreement with Verano Recovery, LLC
Body
BACKGROUND:
The City entered into a Purchase and Performance Agreement (P&PA) with Verano Recovery, LLC (Verano Recovery) on June 2, 2015, for the transfer of land within the Verano residential community that was under City control at that time. Previously, Verano Recovery had acquired much of the remaining available property in that community. In exchange for the transfer of City-owned parcels to Verano Recovery, the Agreement obligated Verano Recovery to provide a cash payment and to complete a number of development improvements within a specified timeframe. The Amendment being presented for Council consideration primarily modifies the timeframe in which a number of these obligations are required to be completed.
DISCUSSION:
Upon entering into the P&PA with the City of Cathedral City on June 2, 2015, Verano Recovery completed its acquisition of much of the remaining available land within the Verano residential community. Their intent in acquiring the property was to bring the project back to the standards envisioned when the project was approved in 1998 and to develop the remaining lots and parcels for new home construction. A Community Facilities District had been established for the area (CFD 2000-01) and over the years, the "Great Recession", developer defaults, and other factors, resulted in a high rate of non-payment of assessments in the CFD. The land sale to Verano Recovery resulted in cash payments sufficient to restore the CFD to financial viability. Through the P&PA, Verano Recovery committed to a number of obligations consistent with the original plans approved...
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