REPORT TO THE CITY COUNCIL
October 10, 2019
FROM: JENNIFER K. CLARK, AICP, Director
Planning and Development Department
BY: LUPE PEREZ, Downtown Revitalization Manager
Planning and Development Department
SUBJECT
Title
Actions pertaining to the Disposition and Development Agreement between the City of Fresno and Upside Enterprises, LLC for property located at 1517 L Street and 2139 Stanislaus:
1. Approve an Amended and Restated Disposition and Development Agreement between the City of Fresno and Upside Enterprises, LLC, and
2. Approve an Assignment and Assumption of Amended and Restated Disposition and Development Agreement between Upside Enterprises, LLC and Uptown, LP
Body
RECOMMENDATION
Staff recommends the City Council (1) approve an Amended and Restated Disposition and Development Agreement between the City of Fresno and Upside Enterprises, LLC; (2) approve an Assignment and Assumption of Amended and Restated Disposition Development Agreement between Upside Enterprises, LLC and Uptown, LP to construct a mixed use residential and commercial development at 1517 L Street and 2139 Stanislaus (Project Property); and (3) authorize the City Manager to execute all implementing documents approved as to form by the City Attorney.
EXECUTIVE SUMMARY
Upside Enterprises, LLC (Developer) is requesting approval to amend and restate the Disposition and Development Agreement (DDA) approved by the City Council in November 2015 and enter into an Assignment and Assumption of the Restated DDA with Uptown, LP to construct a multi-story, mixed-use development consisting of 58 market rate residential units with commercial/retail space on the ground-floor with a community facility, and fitness amenities with total project costs estimated at $15 million (Project). The Amended and Restated DDA proposes a few changes to the Project’s design and revises the Performance Schedule in the current DDA to allow an additional 24 months to construct the Project. The Assignment and Assumption of Amended and Restated DDA will transfer Developer’s obligation to construct the Project to Uptown, LP.
BACKGROUND
In 2015, Developer purchased several properties adjacent to the City’s parcels bounded by Van Ness and Stanislaus. At the time, Developer also owned the marketing firm, Catalyst Marketing Company at 1466 Van Ness. The Project Property is within close proximity to the LEDE, Brio, Fulton Village, Broadway Studios, Vagabond Lofts, H Street Lofts, Crichton Place, and Iron Bird Lofts which is the most intensive corridor of mixed-income residential development in downtown Fresno.
Developer, together with Mr. Ed Kashian, approached the City with a vision to redevelop the sites bounded by Van Ness and Stanislaus that included the Project Property. Developer submitted an offer to purchase the land for the appraised value in order to redevelop the Project Property into a mixed use development. In November 2015, the City Council approved a DDA with Developer.
Developer purchased the Project Properties when they were blighted and underutilized with remnants of a burned historic single family home known as the Nestel Home on one site while the other parcel at Van Ness and Stanislaus contained a dilapidated vacant gas station with numerous code violations. The Project Properties were consistently vandalized and had become a shelter for transients. The Project will enhance the vacant site and complement the City’s revitalization efforts in the Cultural Art’s District.
Although construction has not commenced, Developer has completed significant pre-development and due diligence work including Phase 1 and 2 environmental assessments, removal of underground gas tanks, razing the building and clearing the site, and negotiations, while ultimately unsuccessful, with KVPT to acquire the adjacent parcel. The site plan went through several renditions before it was approved in 2016 by the City’s Development Review Committee and the Lowell Committee. Finally, in 2018, Developer entered into a Limited Partnership Agreement with River Park Properties II to create Uptown, L.P.
The Amended and Restated DDA proposes a few changes to the Project’s design and revises the Performance Schedule in the current DDA to allow an additional 24 months to construct the Project. The Assignment and Assumption of Amended and Restated DDA will transfer Developer’s obligation to construct the Project to Uptown, LP.
Subject to Council’s approval, Uptown, LP is committed to expeditiously moving forward and completing construction of the Project within 24 months of issuance of building permits. If Developer defaults under the terms of the Amended and Restated DDA, the Project Property will revert to the City.
ENVIRONMENTAL FINDINGS
In November 2015, Staff performed a preliminary environmental assessment of this Project and determined it falls within the Categorical Exemption under Section 15332 Class 32 of the California Environmental Quality Act (CEQA) as Infill Development. Furthermore Staff has determined that none of the exceptions to the Categorical Exemptions in the CEQA guidelines, section 15300.2 apply to this Project.
LOCAL PREFERENCE
Local preference does not apply because this agreement does not include a bid or award of a construction services contract.
FISCAL IMPACT
Sale proceeds of $147,000 will payoff the $147,000 Note, and the interest will be deposited into the General Fund.
Attachments:
Amended and Restated Disposition and Development Agreement
Assignment and Assumption of Amended and Restated Disposition and Development Agreement