Agenda Item Wording:
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Reimbursement Agreement Amendment - Authorize the City Manager to execute an amendment to the existing reimbursement agreement with Visalia Shirk, LLC., established with the development of the apartment complex “Tuscany Villas”, located at the northeast corner of Shirk Street and Doe Avenue.
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Prepared by:
Adrian Rubalcaba, Sr. Project Manager, adrian.rubalcaba@visalia.city, (559)713-4507
Jason Huckleberry, Engineering & Building Director, jason.huckleberry@visalia.city, (559)713-4495
Department Recommendation:
Staff recommends that City Council authorize the City Manager to execute the amendment to the existing reimbursement agreement established with Visalia Shirk, LLC.
Summary:
Visalia Shirk, LLC (developer) is requesting an amendment to its existing reimbursement agreement for the Tuscany Villas apartment project, originally approved by Council in June 2020 for $1,009,433.63. Actual public improvement costs exceeded the estimate by $379,993.44, a figure verified by the Development Reimbursement Review Committee (DRRC) in March 2025. The project is complete, and the original reimbursement has been fulfilled through a mix of cash payment and impact fee credits. If approved, the developer now requests to transfer the remaining reimbursable balance to a newly planned multi-family project at Shirk Street and Ferguson Avenue. Per the reimbursement agreement provisions, an amendment setting forth the transfer and final adjusted reimbursement costs is required. Staff recommends Council authorize the City Manager to execute the amendment.
Background Discussion:
Tuscany Villas is a 200-unit apartment complex that was developed by Visalia Shirk, LLC., located at the northeast corner of Shirk Street and Doe Avenue. Per the conditions of approval, under Conditional Use Permit No. 2017-08, the project was required to widen its adjacent public street frontages and install storm and sewer infrastructure in accordance with the City’s Circulation Element and Storm Sewer Master Plans. Shirk Street, an arterial roadway, and Doe Avenue, a collector roadway, are identified in the City’s current Transportation Impact Fee (TIF) program and portions of the required widening improvements qualified for reimbursement. Additionally, a 48-inch sanitary sewer trunk main was planned along Shirk Street alignment per the City Sewer master plan and therefore required to be installed by the developer. Reimbursement of the sewer trunk main would also fall under City Storm Sewer master plan programs. The reimbursement total for this project was estimated at $1,009,433.63 for the excess in pavement, striping, median installation and streetlights, sewer trunk line, and any other additional work beyond the typical developer responsibilities. The City’s Development Reimbursement Review Committee (DRRC) reviewed and recommended approval of the estimated reimbursement in January 2019 and Council approved the reimbursement agreement during a meeting held on June 21, 2020. The final reimbursement amount was to be in the form of credits and cash payments from their respective funding sources.
The reimbursement agreement allows for adjustments to the reimbursement costs based on actual costs to construct the improvements, provided that the developer submits all supporting documentation as stipulated in the agreement. The actual costs of constructing the improvements resulted in a cost increase of $379,993.44 over the original reimbursement amount, bringing the final reimbursement total to $1,389,427.07. To date, a cash payment of $145,157.00 was issued and a total of $864,276.63 was applied as impact fee credits towards building permits for Tuscany Villas. If approved, the remaining balance of $379,993.44 will be due and transferred to a newly planned multi-family development project located at the northeast corner of Shirk Street and Ferguson Avenue, according to the new amendment stipulations. The “Parkview Apartments” complex was submitted by the developer and received a “Revise & Proceed” through Site Plan Review on April 9, 2025. The amendment provides for the transfer of $316,812.94 to be applied as impact fee credits towards building permits for the new complex and a final cash payout of $63,180.50. Cash reimbursements are due once the all required improvements have been completed and accepted by the City.
The amendment to the reimbursement agreement was reviewed and recommended for approval by the DRRC. The DRRC is comprised of staff from the Engineering & Building, Community Development, Finance, and Public Works Departments. The DRRC reviewed the reimbursement to ensure that costs are reasonable compared to the City’s costs for comparable capital projects and to a unit cost schedule focused on Visalia’s construction market. The amendment was also reviewed and approved as to form by the City Attorney.
Fiscal Impact:
Impact fee credits totaling $316,812.94 will be applied towards fee assessments due at time of building permits for the Parkview Apartments. A cash payment of $63,180.50 from the Sewer Fund will be due at time of completion of the Parkview Apartments project.
Prior Council Action:
On June 21, 2020, Council authorized the City Manager to execute the Project Improvement and Reimbursement Agreements associated with the Visalia Apartments project.
Other: N/A
Alternatives: None recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to execute the amendment to the existing reimbursement agreement established with Visalia Shirk, LLC.
Environmental Assessment Status: Complete.
CEQA Review: Mitigated Negative Declaration No. 2017-13 adopted October 16, 2017
Deadline for Action: 8/18/2025
Attachments:
1. Location Map
2. Reimbursement Agreement
3. Amendment No. 1