Agenda Item Wording:
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Developer Reimbursement Agreement - Authorize the City Manager to execute the reimbursement agreement for improvements to Caldwell Avenue associated with the Diamond Oaks Unit No. 1 subdivision located at the southeast corner of Caldwell Avenue and Burke Street and authorize the appropriation of $2,500,000 from the Transportation Impact Fee fund.
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Deadline for Action: 10/7/2024
Submitting Department: Community Development
Contact Name and Phone Number: Jason Huckleberry, Director of Eng & Building, (559)713-4495, jason.huckleberry@visalia.city
Department Recommendation:
Staff recommends authorizing the City Manager to execute the reimbursement agreement in the amount of $1,042,494.51 for improvements constructed along Caldwell Avenue associated with the Diamond Oaks Unit No. 1 subdivision and authorize the appropriation of $2,500,000 from the Transportation Impact Fee fund to provide for recent development reimbursements.
Background Discussion:
The Diamond Oaks Unit No. 1 residential subdivision, developed by Diamond Oaks Holdings, LLC, involved the subdivision of 19.5 acres into 54 residential lots. The project constructed improvements to Caldwell Avenue, including the installation of a new traffic signal at Caldwell Avenue and Burke Street. All improvements associated with the Diamond Oaks Unit No. 1 subdivision are complete and have been accepted by the City.
Diamond Oaks Holdings LLC entered into a Subdivision Improvement Agreement with the City for the Diamond Oaks Unit No. 1 subdivision on June 20, 2019. On June 23, 2023 Diamond Oaks Holdings LLC assigned all interest and ownership rights to D.R. Horton CA3, Inc. Prior to executing the reimbursement agreement, Diamond Oaks Holdings LLC shall provide sufficient proof to the City that D.R. Horton CA3, LLC has agreed to transfer all rights to reimbursements for the project.
Caldwell Avenue is an arterial roadway that is funded through the Transportation Impact Fee program. Consequently, portions of the required public improvements on Caldwell are eligible for reimbursement under the City’s impact fee program.
The total amount to be reimbursed to the developer is $1,042,494.51 for arterial roadway pavement, median improvements and new traffic signal installation, along with miscellaneous work associated with adjacent property improvements beyond the developer’s responsibilities. Partial transportation impact fee credits were provided to the developer with building permit issuance. Those credits have been deducted from the reimbursement, the balance of which would be due in the form of a cash payment to the developer of the improvements.
On August 21, 2024, the reimbursement agreement for the Diamond Oaks Unit No. 1 Subdivision was reviewed and recommended for approval by the Development Reimbursement Review Committee (DRRC). The DRRC is comprised of staff from the Community Development and Finance Departments. The DRRC reviewed the reimbursement to ensure that the costs are reasonable compared to the City’s costs for comparable capital projects.
Development reimbursements related to transportation projects on arterial and collector roadways are programmed annually in the CIP program (CIP9130), allocating $1,100,000 annually. To provide for several recent development reimbursement agreements, an additional appropriation from the Transportation Impact Fee fund is necessary. Staff has calculated a total appropriation of $2,500,000 to satisfy this agreement, along with other pending reimbursements.
Fiscal Impact:
Cash reimbursement of $1,042,494.51 will be from the Transportation Impact Fee Fund (241). The Diamond Oaks Unit No. 1 subdivision consisted of 54 residential lots, contributing a total of $262,750 in transportation impact fees for the first phase.
Prior Council Action: Council accepted the final map for the Diamond Oaks Unit No. 1 subdivision at their meeting held on August 5, 2019.
Other: On August 21, 2024, the Development Reimbursement Review Committee reviewed and recommended for approval the reimbursement agreement for the Diamond Oaks Unit No. 1 subdivision.
Alternatives: None
Recommended Motion (and Alternative Motions if expected):
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I move to authorize the City Manager to execute the reimbursement agreement for improvements completed by the Diamond Oaks Unit No. 1 subdivision and authorize the appropriation of $2,500,000 in Transportation Impact Fee funds to CIP9130 (Developer Transportation Impact Fee Reimbursements).
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: 1. Location Map 2. Reimbursement Agreement