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DATE: |
December 11, 2024 |
07 |
SUBJECT
Title
COUNTY OF SAN DIEGO TRACT NO. 4823-1 (FINAL MAP NO. 14462): APPROVAL OF FOURTH AMENDMENT TO AGREEMENT TO IMPROVE MAJOR SUBDIVISION AND LIEN CONTRACT (INCREASE AMOUNT OF SECURITY AND EXTENSION OF TIME) FOR LIVE OAK RANCH LOCATED IN THE FALLBROOK COMMUNITY PLANNING GROUP AREA AND RELATED CEQA FINDING (DISTRICT: 5)
Body
OVERVIEW
The San Diego County Code of Regulatory Ordinances establishes the requirements for time extensions for completion of required improvements on private development projects. As conditions of their permits, applicants are often required to construct specific improvements that benefit the public, such as roads and stormwater drainage systems. In many cases, these improvements are accepted by the County of San Diego (County) into the County-maintained system to be owned, operated, and maintained by the Department of Public Works (DPW). Subdivision Improvement Agreements and their financial security requirements protect the County by ensuring any required improvements are constructed. In the event of a default by the applicant, the financial security can be used by the County to complete the required improvements. However, under certain circumstances, the County can grant time extensions to allow an applicant additional time to complete the improvements, while simultaneously preserving the County’s rights to have the public improvements constructed by the applicant.
The Live Oak Ranch project is a subdivision consisting of nineteen (19) single family residential lots on a 58.03-acre lot. The project site is located south of Live Oak Park Road just northeasterly of Ridge Creel Drive in the Fallbrook Community Plan Area. On September 18, 2002 (20), the Board of Supervisors (Board) approved the Subdivision Map, Improvement Agreement, Lien Contract, and Holding Agreement No. 8131526, which includes public and private improvements such as street and drainage improvements and water facilities. On June 21, 2017 (9), the Board approved a “First Amendment to Agreement to Improve Major Subdivision, County of San Diego Tract No. 4823-1 and Lien Contract” (“First Amendment”) to extend the performance completion date to June 21, 2021. The County and the Owner entered into a “Second Amendment to Agreement to Improve Major Subdivision, County of San Diego Tract No. 4823-1 and Lien Contract” (“Second Amendment”) on June 29, 2022 (1). The County and Owner entered into a “Third Amendment to Agreement to Improve Major Subdivision, County of San Diego Tract No. 4823-1 and Lien Contract” (“Third Amendment”) on September 1, 2023. The subdivision owner has requested an additional two-year extension to complete the public improvements. According to the terms of the Lien Contract and Holding Agreement, construction of any improvements or selling any individual lots are prohibited until substitute security is provided. Although the entire project was sold to a new owner, to date, the project has not been built and no improvements or construction has begun. The new owner intends to proceed with construction and all necessary improvements once the extension is approved. No additional Board action is needed for the project to move forward.
This is a request for the Board of Supervisors (Board) to approve the Fourth Amendment to Agreement to Improve Major Subdivision and Lien Contract (Fourth Amendment to Agreement) which includes an increase in the amount of security from $2,110,050 to $2,384,700 for the Faithful Performance security and an increase from $1,055,025 to $1,192,350 for the Labor & Material security, due to inflation. The request also includes a two-year extension of performance completion date for County Tract No. 4823-1 (Final Map No. 14462), also known as the Live Oak Ranch Subdivision. The County Code allows the Director of Planning & Development Services (PDS) to grant the first extension for up to two additional years. All subsequent extensions require Board approval. Staff recommends approval of the extension to allow the owner time to secure the funding necessary to construct the project, which includes nineteen (19) additional housing units. Extensions are common on subdivisions, which require substantial financial investments in infrastructure improvements, grading, and construction. All subsequent extensions require Board approval. There is no limit in State law or the County’s Subdivision Ordinance on the number of extensions. Staff also recommends granting the extension to allow the applicant to start construction the improvements as required by the conditions of the map, therefore, relieving the County of this responsibility. Once the extension is granted and improvements completed, it will enable the applicant to begin building homes without further delays.
If the Board chooses not to grant the extension as recommended, it may have other options available, including (but not limited to): Approving the recommended extension upon substitution of security; denying the recommended extension and using the existing security to fund the completion of the improvements; denying the recommended extension and seeking a remedy against the developer or surety.
RECOMMENDATION(S)
CHIEF ADMINISTRATIVE OFFICER
1. Find that the approval of the Fourth Amendment to Agreement (Attachment A on file with the Clerk of the Board) and associated actions for County Tract No. 4823-1 is not a project subject to review under the California Environmental Quality Act (CEQA) pursuant to Sections 15061(b)(3) of the CEQA Guidelines because the activity is covered by the commonsense exemption that CEQA applies only to projects which 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, the activity is not subject to CEQA.
2. Approve and authorize the Clerk of the Board of Supervisors (Clerk) to execute the Fourth Amendment to Agreement, including Increase of Security and Extension of Time. This agreement extends the time to construct improvements to two (2) years after the execution of this Fourth Amendment to Agreement.
3. Direct the Clerk, upon execution of the Joint Agreement to Improve Subdivision (Attachment B on file with the Clerk of the Board), to forward the document to the County Recorder for recordation.
EQUITY IMPACT STATEMENT
Planning & Development Services (PDS) ensures that public improvements are constructed as part of new housing developments, such as roads and stormwater drainage systems. PDS ensures the completion of the public improvements through agreements and financial security, which ensures communities are safe. This extension to the improvement agreement will allow the applicant additional time to complete the required public improvements, which will help provide housing for unincorporated communities.
SUSTAINABILITY IMPACT STATEMENT
Planning & Development Services (PDS) is committed to promoting sustainable community growth by ensuring that essential public infrastructure, such as roads and stormwater drainage systems, is appropriately constructed in new housing developments. These improvements are essential for creating safe, resilient, and environmentally responsible communities. The extensions for improvement agreement provide additional time for the applicant to complete essential required improvements for applicable projects. This ensures that housing developments in the unincorporated communities meet current and future sustainability standards.
FISCAL IMPACT
There is no fiscal impact associated with the approval of the requested time extension as presented today. Any costs incurred to continue this project, at such time the owner wishes to move forward, will be paid for by JDLC # 1 LLC, C/O Robert J. Kolodny, Owner. There will be no change in net General Fund costs and no additional staff years.
BUSINESS IMPACT STATEMENT
N/A
Details
ADVISORY BOARD STATEMENT
Staff reached out to the Fallbrook Community Planning Group regarding the extension request. Since the map was already recorded and no changes were made to the approved map, the group raised no concerns on this item.
Staff also provided information on the project to labor union stakeholders in March 2024, and no comments or concerns were received. In addition, the project was presented to environmental stakeholders and the Land Development Technical Working Group stakeholder meeting in March. No comments or concerns were received from the environmental stakeholders and Land Development Technical Working Group.
BACKGROUND
The Live Oak Ranch project is a subdivision consisting of nineteen (19) single family residential lots on a 58.03-acre lot. The project site is located south of Live Oak Park Road just northeasterly of Ridge Creel Drive in the Fallbrook Community Plan Area. On September 18, 2002 (20), the Board of Supervisors (Board) approved the Subdivision Map, Improvement Agreement, Lien Contract, and Holding Agreement No. 8131526, which includes public and private improvements such as street and drainage improvements and water facilities. On June 21, 2017 (9), the Board approved a “First Amendment to Agreement to Improve Major Subdivision, County of San Diego Tract No. 4823-1 and Lien Contract” (“First Amendment”) to extend the performance completion date to June 21, 2017 (9). The County and the Owner entered into a “Second Amendment to Agreement to Improve Major Subdivision, County of San Diego Tract No. 4823-1 and Lien Contract” (“Second Amendment”) on June 29, 2022 (1). The County and Owner entered into a “Third Amendment to Agreement to Improve Major Subdivision, County of San Diego Tract No. 4823-1 and Lien Contract” (“Third Amendment”) on September 1, 2023. The subdivision owner has requested an additional two-year extension to complete the public improvements. No public improvements have been completed at this time.
The California Subdivision Map Act requires developers to have completed required improvements, such as public streets, drainage, sewer, and water facilities, at the time a final map is approved. Alternatively, if improvements are not completed at the time the final map is approved, the County of San Diego (County) may enter into a secured subdivision agreement (Agreement) with the developer for completion of the public improvements. Security for the Agreement can include performance bonds, letters of credit a cash deposit or a lien agreement. In accordance with Section 81.405 of the San Diego County Code of Regulatory Ordinances (County Code), improvements identified in the Agreement are required to be completed within two years from approval of the final map. On occasion, improvements are unable to be completed within that timeframe and applicants may request additional time. The County Code provides authority to the Director of Planning & Development Services (PDS) and the Director of the Department of Public Works (DPW) to grant the first extension for up to two additional years. All subsequent extensions require Board approval. There is no limit in State law or the County’s Subdivision Ordinance on the number of extensions, however, staff ensures that no construction occurs on the site until the improvement agreement is extended with updated financial security. This process ensures the completion of all required improvements by the applicants. In the event of a default, bonding (or other accepted financial security) can be used to finance any remaining required improvements.
This is a request to approve the Fourth Amendment to Agreement for County Tract No. 4823-1 (Final Map No. 14462), which extends the time to construct improvements to two (2) years after the recordation of this Fourth Amendment to Agreement. PDS staff have determined an extension is needed for this Agreement to ensure adequate financial security is in place due to the County’s continued interest in receiving the public improvements. The Improvement Agreement and financial security enable the County to finish the improvements if the developer starts the construction but does not complete it. As part of this process, staff has determined that there is adequate financial security (i.e., capacity through a bond or other financial instrument) to ensure the completion of any outstanding improvement work for the subdivision map. If the applicant fails to meet their obligations, this financial security could be used by the County to finish the public improvements required by the agreement.
Security for this project is furnished by a lien contract over the property that will be increased to cover the updated cost of constructing the public improvements. The security for the Faithful Performance was increased from $2,110,050 to the amount of $2,384,700, due to inflation, in favor of the County has been received to guarantee faithful performance for streets, sewer facilities, water facilities and final monumentation (Attachment B).
The lien contract for the Labor & Material was increased from $1,055,025 to the amount of $1,192,350 in favor of the County has been received to guarantee payment for labor and materials involved in the construction of the improvements (Attachment B).
Subsequent Development Approvals
There may be changes in State and local requirements that may need to be addressed when development permits and approvals are sought. The owner may need to update grading and improvement plans and address any additional environmental review at the time discretionary permits or approvals are sought (e.g., a grading permit) and address any changes to State law, including stormwater regulations.
ENVIRONMENTAL STATEMENT
Section 15061(b)(3) of the CEQA Guidelines provides that the activity is covered by the commonsense exemption that CEQA applies only to projects which 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, the activity is not subject to CEQA. The proposed action is administrative in nature as it involves the extension of performance completion dates in subdivision improvement agreements. CEQA review was completed in connection with the approval of each of the Tentative Maps, which were conditioned on completion of improvements identified in the improvement agreements. The proposed action does not change any improvement obligations imposed at the time of Tentative Map approval. Therefore, the proposed action is not subject to CEQA review pursuant to Sections 15061(b)(3) and 15378(b)(5) of the CEQA Guidelines.
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s proposed action to approve the two-year extension of the secured agreement for this project supports the County of San Diego’s 2024-2029 Strategic Initiatives of Sustainability, Equity, and Community by providing public infrastructure and additional housing opportunities that strengthens the local economy and by securing funding to align the County’s available resources with services to maintain fiscal stability.
Respectfully submitted,
DAHVIA LYNCH
Deputy Chief Administrative Officer
ATTACHMENT(S)
Attachment A - Fourth Amendment to Agreement to Improve Major Subdivision
Attachment B - Endorsement - Lien Contract