By: Libi Uremovic | Original Article at patch.com
Beaumont City Attorneys use Distraction and Phony Threat of Lawsuit to Gain Approval of Pardee Bond Debt and Mitigation Fee Reimbursement.
On July 21, 2015 the Beaumont City Council Approved Bond Debt for Pardee Homes Areas 8E, 8F, and 17D. Council also approved Reimbursement of ALL Mitigation Fees.
Lena Wade from the Law Firm of Slovak Baron Empey Murphy & Pinkney gave a presentation referencing a 2004 Agreement between the City of Beaumont and Pardee Homes. Wade stated: “When reviewing such agreements you make certain that the requirements set forth in the law are followed in the development agreement and that’s what we reviewed here.”
Wade then referenced a lawsuit that had no connection to the Pardee Agreement. Both City Attorney and Council referenced ‘threat of a lawsuit’ as their excuse to Approve the Bond Debt.
However; the Agreement is clear that Pardee can only sue the City for performance, not monetary damages. The Agreement also allows for a moratorium to comply with State and Federal Laws and numerous other clauses that allow the City to retain control.
When voting to Approve the Reimbursement of Mitigation Fees to Pardee Acting City Attorney Pinkney distracted from the Item on the table instead of clarifying to Council that they were giving up the City’s Mitigation Fees.
At the July 28th Special Meeting Urban Futures submitted a copy the City’s Mitigation Fees in their Presentation with as estimated Revenue of $9.8 Million. Councilman Mike Lara commented that the Mitigation Fees seemed low. It was the same list of Mitigation Fees that Council had voted to reimburse Pardee the week before.
$9.8 Million would have been better than nothing, and nothing will be the amount of Mitigation Fees the City receives from Pardee Homes. Not because of the 2004 Agreement, but because of the 2015 Agreement approved by the sitting Council.
2004 Pardee Agreement http://publicdocs.beaumontcares.com/weblink8/0/doc/92114/Page1.aspx
Page 1 Recital E: “..in order to make the Project economically and fiscally feasible, requires major commitment to and investment in public facilities and on-site and off-site infrastructure improvements prior to the construction and sale or leasing of residential and commercial buildings.”
Page 3 “EIR” January 14, 1991 (Resolution No. 1991-03)
Page 4: 9 VESTED RIGHT: “.. it is the intent of the Developer and the City that no moratorium, whether relating to the rate, type, manner density, timing, or sequencing of the Project and whether or not enacted by initiative or otherwise, except a moratorium imposed by the City to implement State or Federal laws, statutes, regulations, policies, or orders as provided in Section 11.2…”
Page 4/5 “Notwithstanding the foregoing, should an ordinance, general plan or zoning amendment, measure, moratorium, policy, rule, regulation or other limitation enacted by the citizens of the City through the initiative process be determined by a court of competent jurisdiction to invalidate or prevail over all or any part of the Development Plan, the Developer shall have no recourse against the City pursuant to this Agreement.”
Page 6: PUBLIC SERVICES AND FACILITIES
10.6 “The Project and Development Plan requires an integrated roadway system, and other pubic facilities including parks, schools, storm drains, and water and sewer facilities.”
Page 8: RULES REGULATIONS
11.1.4 “Regulations which are necessary to protect public health and safety…”
11.2 State and Federal Laws. “In the event that State and Federal laws or regulations enacted after this Agreement is executed present or preclude compliance with one or more of the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations..”
Page 8: PERIODIC REVIEW OF COMPLIANCE WITH AGREEMENT
14. “The City shall review the Agreement at least once every year from the date of this Agreement is executed…’
Page 9 SPECIFIC PERFORMANCE REMEDY
15.3. “…the City and the Developer agree that damages alone would not be an adequate remedy if the City fails to carry out its obligations under this Agreement. … The parties agree that specific performance of this Agreement is an appropriate remedy if either party defaults and fails to perform its non-monetary obligations under this Agreement.”
Area 17D has nothing to do with Area 8 Agreement
Original 1991 Agreement included. Pages 90-105 specifically list with signatures the actual owners of the property regardless of the property owners’ corporations.
2015 Pardee Areas 8E, 8F, 17D: http://www.ci.beaumont.ca.us/DocumentCenter/View/24528
Beaumont City Council Meeting July 21, 2015 Transcript: http://podcast.ci.beaumont.ca.us/CC_2015-07-21_agenda.htm
22:15 Pinkney: The Item before you tonight is two-fold. One would be the 2nd Reading, you’ve already voted on three Ordinances that would levy a Tax in the Improvement Areas. The second Item is to Approve Fee Agreements that are contained within your Council Packet. Council, when this Item came up in June, requested that my office review the Development Agreement with Pardee Homes.
23:00 Pinkney: You’ll recall that during the dialogue that occurred here in Council Chambers; the question was asked as to whether it’s an enforceable Agreement. As a result of that question and the discussion that ensued with the Council requesting our office and also two of the Consultants to the City review the development agreement between the City and Pardee Homes and provide you with an Opinion as to whether that is an enforceable and binding
development agreement. There is a lengthy history of how the City has financed infrastructure an facilities in this City. There’s a great deal of history to consume.
24:45 Wade: The Developer, Pardee Homes, has approached the City regarding Improvement Areas 8E 8F and 17D. This is for the purpose of bond financing for the public improvements.
25:00 Wade: The underlying development agreement was entered into on August 17, 2004: http://publicdocs.beaumontcares.com/weblink8/0/doc/92114/Page1.aspx In the State of California development agreements follow a development agreement law. When reviewing such agreements you make certain that the requirements set forth in the law are followed in the development agreement and that’s what we reviewed here. We believe it is a legal binding development agreement. Let me refer you to an Opinion in the matter of Mammoth Lakes vs Town of Mammoth Lakes. In this case; there was a development agreement between a developer and a city, the Town of Mammoth.
26:00 Wade: In that development agreement they contemplated changes or additions to the air port in addition to the development of a hotel. The Town at some point decided that it no longer wanted to move forward with this development agreement. The Town petitioned the FAA to make some changes, which prohibited the changes to the air port. However, pursuant to the Court’s Opinion, they believed, the Court believed, with retrospect to the hotel, the Town had an obligation to move forward. And because it didn’t the Court actually found the town liable and assessed $30 Million damages against the Town and also $2.4 Million in attorney fees. That’s just by way of background. Upon reviewing the documents in respect to these three particular improvement areas;
27:00 Wade: One thing I want to point out is that some of the documents, inadvertently include four other improvement areas and those need to be excluded because those improvement areas have not been created. The only improvement areas at issue here are areas 8E, 8F, and 17D. So we’re going to exclude those four, they were improperly included. In reviewing these documents and working with the CFD Advisor/Consultant retained by the City, it was our Opinion that the maximum bond allocation were overestimated. After working with your consultant and also engaging in negotiations with developers’ counsel we have agreed to lower maximum amounts and I will tell you what those are:
Improvement Area 17D Maximum Amount $10 Million
Improvement Area 8E Maximum Amount $13 Million
Improvement Area 8F Maximum Amount $9 Million
28:00 Wade: If the City chose to move forward with the facility and fee agreements we would ask that the City do so instructing Staff to amend or edit the documents to reflect these new maximum amounts.
Beaumont City Council Meeting June 16, 2015: http://www.ci.beaumont.ca.us/index.aspx?NID=212
Pardee: We have a development agreement that’s in place right now with the City that set a lot of these programs up for us. We’ll be investing in..
White: Does the development agreement require that the financing for this project be done exactly as we’re doing it here?
Pardee: As we requested; the City shall follow.
White: The development agreement says that you tell us how we will finance?
Pardee: No, at our request the City shall assist us in financing.
White: Okay. I looked at the development agreement that you emailed me. I’m not an attorney. Lots of stuff to read there, but I couldn’t find it.
98:00 White: I saw a mention of financing, but I couldn’t see where the CFDs in improvement areas. Maybe that’s another reason we need to put this on hold; to get a full review of the …
Pinkney: I’ve actually reviewed the development agreement and here’s what it provides Section 10.5. “Mello Roos CFD’s, other assessment districts, and financing mechanisms.” Page 6, Section 10.5 “The developer may, at his sole election, petition the City Council of the City or Joint Powers Authority in which the City is a member, to establish a communities facilities district in accordance with the City’s policies in existence on the effective date…. If so requested by the developer, the City SHALL cooperate with the developer or for matters beyond its control shall use its best efforts in taking all steps necessary to cause the CFD or alternative financing mechanism to issue bonds for such purposes.”