HomeMy WebLinkAbout39A - DEVELOPMENT RIGHTS 1901 E FIRSTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
SEPTEMBER 16, 2014
TITLE:
ASSIGNMENT OF DEVELOPMENT RIGHTS
FOR THE LYON COMMUNITIES RESIDENTIAL
DEVELOPMENT PROJECT TO BE LOCATED
AT 1901 EAST FIRST STREET
CITY MANA R
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 1" Reading
❑ Ordinance on 2n° Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Direct the City Manager to authorize the assignment of development rights for the Lyon
Communities residential development project to 1901 First Street Owner, LLC, with such non -
substantive changes as may be approved by the City Manager and City Attorney.
DISCUSSION
In October and November 2013, the City Council approved the entitlements for a new mixed -use
development project by Lyon Communities at 1901 East First Street. These entitlements
included the approval of the First Amended and Restated Development Agreement, a vesting
tentative tract map and site plan review that allowed the construction of a 264 -unit residential
development by Lyon Communities. Since the project's approval, Lyon has been finalizing the
financing for the project and recently decided to accept limited investors to the project. These
new investors, in conjunction with the complexities of the financing for the project, have led to the
creation of a new entity, 1901 First Street Owner, LLC, to own the project. The current owners,
Lyon Communities, operating as Lyon Housing (First Street) XLVIII, LLC, will still retain majority
control over the project.
Section 4.2 of the development agreement (Development Agreement No. 2007 -01) allows the
assignment of the property, in whole or in part, to any person, entity, partnership, joint venture,
firm or corporation at any time with City Council approval. Further, the assignment of rights will
include an assignment and assumption agreement confirming that the duties, obligations and
liabilities from this development agreement are assumed by the new owner. This will ensure that
the plans approved by the Planning Commission and City Council, together with all conditions
and requirements, are fully satisfied. Since the project owner is creating a new ownership entity
for the project, Council approval of the assignment is needed.
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Assignment of Development Rights for
the Lyon Communities Residential Project
September 16, 2014
Page 2
Lyon Communities is an experienced, fiscally sound company that has the capabilities to
construct and manage the proposed development project. The assignment of development rights
to the new entity will still result in the construction of the project by the Lyon Communities team,
which has successfully completed a similar project in south Santa Ana. Therefore, staff
recommends that the City Council authorize the City Manager to execute documents assigning
the development rights for the 264 -unit development project to 1901 First Street Owner, LLC.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal No. 5 Community Health, Livability,
Engagement & Sustainability, Objective No. 3 (facilitate diverse housing opportunities and
support efforts to preserve and improve the livability of Santa Ana neighborhoods).
FISCAL IMPACT
There is no fiscal impact associated with this action
K 04n&-
Haluza
Interim Executive Director
Planning & Building Agency
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