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HomeMy WebLinkAboutSMR Ventures, LLC-2006-09 AGREEMENT PROVIDING FOR REIMBURSEMENT OF DEVELOPMENT FEES FROM BOND PROCEEDS (TRACT NOS.29741,29597,29598,29600,29740,AND 29599) THIS AGREEMENT is entered into as of the 1st day of February, 2006, by and between SMR VENTURES, LLC, a Delaware limited liability company ("Developer"), and the CITY OF GRAND TERRACE, a municipal corporation ("City"). RECITALS: (A) Developer is the owner and developer of the Spring Mountain Ranch project which includes the land within Riverside County Tract Nos. 29741, 29597, 29598, 29600, 29740, and 29599 (the "Tracts"), located in the unincorporated portion of the County of Riverside (the "County"). (B) City has entered into an agreement with Riverside Unified School District (the "School District") entitled "Joint Community Facilities Agreement Between Riverside Unified School District and the City of Grand Terrace (Spring Mountain Ranch Community Facilities District)," dated as of February 1, 2006 (the "JCFA"). All capitalized terms used herein and not defined shall have the meanings given to such terms in the JCFA. (C) The JCFA provides for the formation by the School District of a community facilities district for the Spring Mountain Ranch project (currently identified as Community Facilities District No. 23 of Riverside Unified School District) (as however ultimately designated, the "CFD") to finance with the proceeds of the sale of the bonds of the CFD, among other facilities, certain facilities of City (the "City Facilities") which would otherwise be financed with development fees which would be paid by the owner of the property in the Tracts. Such development fees (the "Development Fees") — consisting of certain Traffic Mitigation Fees (as set forth in the conditions of development for the project) - are identified in Exhibit"A" attached hereto. The Tracts will be located within the boundaries of the CFD. (D) In order for Developer to obtain approval from City for the recording of the subdivision map for the Tracts and proceed with the construction of improvements within the Tracts, it has been and will be necessary for Developer to pay Development Fees for the Tracts to City before the bonds of the CFD will be sold and City will receive proceeds thereof for financing the construction and installation of the City Facilities. Developer also seeks assurance from City that if Developer has not paid all of the Development Fees for the Tracts before and after the bonds of the CFD are sold, the proceeds of the sale of such bonds which are allocated to City for the City Facilities will also be utilized by City, as hereinafter provided, to reimburse Developer the Development Fees which are thereafter paid or for the construction and acquisition of the City Facilities. The purpose of this Agreement is to memorialize the understanding between Developer and City with respect to the reimbursement of the Development Fees which Developer has paid and may pay to City before and/or after such bonds are sold. (E) The CFD will be formed with two or more improvement areas (each, an `Improvement Area"). At different times, the CFD will issue one or more series of bonds (the 20561482 "Bonds") for each Improvement Area for the financing of the City Facilities financed by the Development Fees. The JCFA authorizes the financing of the City Facilities in each Improvement Area. NOW, THEREFORE, it is agreed as follows: 1. Among other uses, the proceeds from the sale of one or more series of Bonds may be allocated to the payment of the City Facilities (the "Available Proceeds"). Upon receiving the Available Proceeds from any series of Bonds, City shall reimburse Developer for Development Fees which it has paid with respect to Tracts in any Improvement Area. It is estimated by City and Developer that the Available Proceeds from all series of Bonds will be in the approximate amount of$803,550. 2. After a series of Bonds are sold and the Available Proceeds from that series of Bonds have been allocated to or received by City, City shall as soon thereafter as is reasonably possible reimburse Developer for the Development Fees which have been previously paid for the Tracts in an amount which shall not exceed the Available Proceeds. Any remaining portion of the Available Proceeds, after City has reimbursed Developer, shall thereafter be utilized by City to the extent thereof, together with investment earnings thereon, if any, (i) to reimburse to Developer, for the Development Fees which are thereafter paid by Developer or(ii) for the construction and acquisition of the City Facilities, as City, with a credit against Development Fees otherwise due from the Tracts. 3. The sole source of funds from which Developer will be entitled to receive reimbursement from City for Development Fees paid to City and which will be utilized by City for reimbursing to Developer the Development Fees shall be the Available Proceeds. If the Available Proceeds from all series of Bonds are in an amount which is less than the total amount of the Development Fees which are paid by Developer with respect to the Tracts, upon payment by City to Developer of the total amount of the Available Proceeds for all series of Bonds, City shall have fully satisfied its obligations pursuant to this Agreement. 4. Developer is the master developer of the Tracts, and, as part of its business plan, may sell all or a portion of the Tracts to merchant builders. In such a case, it is the merchant builders who may pay the Development Fees for the Tracts owned by such merchant builder. Notwithstanding that the merchant builders may have paid the Development Fees, City shall reimburse Developer (and Developer only) from the Available Proceeds. If City requires evidence that the merchant builders who paid the Development Fees have consented to Developer receiving reimbursement from Available Proceeds, Developer shall provide such evidence, which may include a written letter signed by the merchant builder or a copy of the fully-executed purchase agreement containing such consent. City shall not reimburse any party other than Developer for Development Fees from the Available Proceeds without the written direction of Developer. 5. This Agreement contains the entire agreement between the parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the parties with respect to the subject matter of this Agreement. 2 20561482 6. This Agreement may be amended at any time by a subsequent written agreement signed on behalf of both parties. 7. No person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than City and Developer any rights, remedies, obligations or liabilities under or by reason of this Agreement. 8. If either party commences a court action or proceeding against the other party with respect to the rights and obligations of the parties under this Agreement, the prevailing party in such action or proceeding shall be entitled to receive from the losing party reasonable attorney's fees, as determined by the court, and costs incurred by it in prosecuting or defending such action or proceeding. 9. This Agreement shall be governed and interpreted in accordance with the laws of the State of California. 10. This Agreement may be executed in counterparts, each which shall be deemed an original, but all of which shall constitute but one agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. CITY OF GRAND TERRACE By: < City Manager A llEST: ity Clerk [SIGNATURES CONTINUED ON NEXT PAGE] 3 20561482 [SIGNATURES CONTINUED FROM PREVIOUS PAGE] • SMR VENTURES, LLC, A Delaware limited liability company By: TROXLER RESIDENTIAL VENTURES XII, LLC, a Delaware Limited Liability Company, Managing Member By: Troxler Ventures Partners, Inc., a California corporation, Its: Operating Member By: Name: Bryan P. Troxler Its: President 4 20561482 EXHIBIT A DESCRIPTION OF DEVELOPMENT FEES 1. Traffic Mitigation Fee $550 per unit * * These amounts are provided for informational purposes only and are the amounts currently due. Notwithstanding the amounts shown above,the JCFA authorizes the financing of the City Facilities in the amount of the fees that are due at the time of payment of such fees.