2018/06/16 Meritage Homes of California, Inc. Pre-payment agreement for development impact feesPRE-PAYMENT AGREEMENT FOR DEVELOPMENT IMPACT FEES
THIS DEVELOPMENT IMPACT FEES PRE-PAYMENT AGREEMENT
("Agreement") is executed this 16ft day ofJune, 2018 ("Effective Date"), by and between the
CITY OF MENIFEE, a Califomia municipal corporation ('City'), and MERITAGE HOMES
OF CALIFORNIA, INC,, a Califomia corporation ("Developer"). City and Developer may be
refened to, individually or collectively, as "Party" or "Parties."
RECITALS
WHEREAS, on November t5,2017, the City Council held a duly noticed public hearing
conceming the proposed adoption ofan ordinance and resolution establishing certain Development
Impact Fees ("DIFs") in accordance with the Mitigation Fee Act (Gov. Code $$ 66000 et seq.),
and replacing the County of Riverside's Ordinance No. 659, which initially set DIFs within the
City after the City was incorporated on October l, 2008; and
WHEREAS, following the November 15, 2017 public hearing, the City Council
authorized City staffto, between November 15,2017 and the effective date of the ordinance and
resolution establishing the DIFs, enter into DIF prepayment agreements, which would allow
development applicants to pre-pay DIFs applicable to their projects at the fee rates established
pursuant to Ordinance No. 659, subject to qualifications and limitations (the "Prepayment
Motion"); and
WHEREAS, the City Council further directed in the Prepayment Motion that developers
shall only be eligible for DIF pre-payment if: (l) the amount and categories ofpre-paid fees are
demonstrably consistent with existing entitlement (as shown, for example, in a tentative tract map,
tentative parcel map, plot plan, or conditional use permit), (2) such fees are paid to the City on a
non-refundable basis, (3) pre-pal.rnent ofsuch fees are otherwise permissible under and consistent
with existing agreements applicable to the development project, and (4) the prepayment offees is
made pursuant to a Pre-Payment Agreement in a form approved by the City Attorney; and
WHEREAS, on the 2nd day of October, 2012, an application was duly filed with the City
by Developer, with respect to real property described in Exhibit A and further depicted on Exhibit
B, requesting approval ofTract 36485-4, and said application was approved by the City of Menifee
Planning Commission on 28thday of January, 20'14; and
WHEREAS, the proposed Final Tract Map for Traci 36485-4 was approved by the City
Council on the 2nd day of August 2017, and recorded on August 29,2017; and
WHEREAS, prior to July l, 2018, Developer intends to pay all applicable DIF for 47 of
the lots (models and phases l-4) within Tract 36485-4; and
WHEREAS, Developer seeks to make DIF pre-payments for the remaining 55 lots (phases
5-l I ) within Tract 36485.4; and
WHEREAS, the City has determined that, based on representations by Developer, at this
time Developer is eligible for DIF pre-payment pursuant to the Prepayment Motion; and
WHEREAS, the City intends by execution and delivery of this Agreement to accept the
pre-payment DIFs liom Developer subject to the terms and conditiosn specified herein.
NOW, THEREFORE, for the purposes set forth herein, and for good and valuable
consideration, the adequacy of which is hereby acknowledged, the Parties hereby agree as follows:
0 I 007.0005/366 I 99. I
L lncorporation of Recitals. The Parties hereby incorporate the Recitals as though
fully set forth herein.
2. DIF Prepayment. Within fourteen (,l4) days after Effective Date (and in no event
later than June 30, 2018), Developer shall deliver Two Hundred Eighty Five Thousand One
Hundred Seventy Five and 00/100 Dollars (5285,175.00) ("Prepaid DIF Amount") to the City in
the form ofa cashiers' check or by wire transfer date (pursuant to wire instructions given by the
City to Developer); provided, however, that ifthe Prepaid DIF Amount is not delivered within said
fourteen (14) day period, this Agreement shall have no further force or effect. Deposit of the
Prepaid DIF Amount shall fully satisfy Developer's obligation to pay DIF fees with regard to 55
Residential Units at the current rate of Five Thousand One Hundred Eighty-Five and 00/100
Dollars ($5,185.00) per residential unit ("Prepaid Units"). DIF Amount is determined on a per
unit basis.
2.1 Excess Unit DIF Payments. Developer shall remain responsible for the
payment of DIFs for any development over and above the Prepaid Units ("Excess Unils"). The
amount of DIF applicable to the Excess Units shall be the DIF rate in effect at the time DIF
payment for the Excess Units is tendered to the City.
2.2 No Right To Refund. Developer hereby agrees that the Prepaid DIF
Amount is paid to the City on a non-refundable basis. Developer waives its right to recover Prepaid
DIF Amounts fiom the City for any reason.
3. Discretionary. The determination to authorize prepayment of DIFs pursuant to
this Agreement is a discretionary decision of the City. The City shall have no obligation to enter
into additional DIF prepayment(s) agreements for this, or any other project.
4. City Release; Termination. This Agreement shall remain in effect for a period of
ten years from the Effective Date.
5.Indemnification.
5.1 nification and Hold Harml
a. Non-liabili tv of Ci tv . The Parties acknowledge that there may be
challenges to the legality, validity, and adequacy ofthis Agreanent in the future; and ifsuccessful,
such challenges could delay or prevent the performance of this Agreement and the development
of the Project.
b. Participation in Litieation: Indemnity. Devel oper agrees to
indemnify, protect, defend, and hold harmless the City and its officials, officers, employees,
agents, elected boards, commissions, departments, agencies, and instrumentalities thereof, from
any and all actions, suits, claims, demands, writs of mandamus, liabilities, losses, damages,
penalties, obligations, expenses, and any other actions or proceedings (whether legal, equitable,
declaratory, administrative, or adjudicatory in nature), and altemative dispute resolution
procedures (including, but not limited to, arbitrations, mediations, and other such procedures)
TERMS
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asserted by third parties against the City that challenge, or seek to void, set aside, or otherwise
modifu or annul, the action of, or any approval by, the City for or conceming this Agreement
(including, but not limited to, reasonable attomeys' fees and costs) (herein the "Claims and
Liabilities") whether such Claims and Liabilities are arise out ofunder planning and zoning laws,
the Subdivision Map Act, code of civil Procedure Sections 1085 or 1094.5, or any other federal,
state, or local statute, law, ordinance, rule, regulation, or any decision of a competent jurisdiction.
In the event any action for any Claims and Liabilities are brought against the City and/or related
parties, upon City's notification to Developer of the pendency of a claim or suit, Developer shall
make a minimum deposit sufficient to pay all of Developer's indemnification obligations for the
following 90 days, which includes legal costs and fees anticipated to be incurred as reasonably
determined by the City. Developer shall make deposits required under this section within 5 days
of the City's written request. At no point during the pendency of such claim or suit, shall the
minimum balance ofthe deposit fall below fifteen thousand dollars ($ 15,000).
If Developer fails to timely pay such funds, the city may abandon the action without
liability to Developer and may recover from Developer any attorneys' fees and other costs for
which the City may be liable as a result of abandonment of the action. It is expressly agreed that
the City shall have the right to utilize the City Attorney's office or use other legal counsel of its
choosing. Developer's obligation to pay the defense costs of the City shall extend until final
judgrnent, including any appeals. City agrees to fully cooperate with Developer in the defense of
any matter in which Developer is defending and/or holding the city harmless. The City may make
all reasonable decisions with respect to its representation in any legal proceeding, including its
inherent right to abandon or to settle any litigation brought against it in its sole and absolute
discretion.
c. Exception. The obligations ofDeveloper under this Section shall not
apply to any claims, actions, or proceedings arising through the sole negligence or willful
misconduct of the City, its members, officers, or employees'
5.2 of Indernnificati . The obligations for indemnity under this Section
5 shall begin upon the Effective Date and shall survive termination of this Agreement.
6. Relationship Between the Parties. The Parties hereby mutually agree that this
Agreement shall not operate to create the relationship of partnership, joint venture, or agency
between City and Developer. Nothing herein shall be deemed to make Developer an agent of City.
7. Authority to Enter Agreement. Developer hereby warrants that it has the legal
capacity to enter into this Agreement. Each Party warrants that the individuals who have signed
this Agreement have the legal power, right, and authority to make this Agreement and bind each
respective Party.
8. Notices. All notices, demands, invoices, and communications shall be in writing
and delivered to the following addresses or such other addresses as the Parties may designate by
written notice:
To City City of Menifee
29714 Haun Road
Menifee, CA 92586
Attn: City Manager
Copy to:Rutan & Tucker, LLP
6l I Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Attn: Jeffiey T. Melching
Meritage Homes
5 Peters Canyon, Suite 310
Irvine, CA 92606
Attn: Rick Rush, Forward Planning Manager
Depending upon the method of transmittal, notice shall be deemed received as follows: by
facsimile, as of the date and time sent; by messenger, as of the date delivered; by U.S. Mail first
class postage prepaid, as of72 hours after deposit in the U.S. Mail; and by email, upon the sender's
receipt of an email fiom the recipient acknowledging receipt.
9. Cooperation; Further Acts. The Parties shall fully cooperate with one another,
and shall take any additional acts or sign any additional documents as may be necessary,
appropriate, or convenient to attain the purposes of this Agreement.
10. Amendmentl Modification. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing and signed by both Parties.
I I . Waiver. No waiver of any default shall constitute a waiver of any other default or
breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or
service voluntarily given or performed by a Party shall give the other Party any contractual right
by custom. estoppel. or otherwise.
12. Binding Effect. Each and all ofthe covenants and conditions shall be binding on
and shall inure to the benefit ofthe Parties, and their successors, heirs, personal representatives, or
assigns. This section shall not be construed as an authorization for any Party to assign any right or
obligation.
13. No Third Party Beneficiaries. There are no intended third party beneficiaries of
any right or obligation assumed by the Parties.
14. Invalidity; Severability. [f any portion of this Agreement is declared invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions
shall continue in full force and effect.
15. Governing Law. This Agreement shall be construed in accordance with and
govemed by the laws of the State of Califomia.
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To Developer:
16. Counterparts. This Agreement may be signed in counterparts, each ofwhich shall
constitute an original and which collectively shall constitute one instrument.
17. Entire Agreement. This Agreernent, along with its exhibits, contains the entire
agreement between City and Developer and, supersedes any prior oral or written statements or
agreements between City and Developer with respect to the subject matter of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day
and year first above written.
DEVELOPER:
MERITAG HOMES OF CALI IA, INC., A
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EXHIBIT A
Lesal Description of Proiect Site
All that certain real property situated in the County of Riverside, State of California, described as
follows:
LOTS l THROUGH 102 INCLUSSIVE OF TRACT NO. 36485-4, IN THE CITY OF MENIFEE,
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 457,
PAGES 13 THROUGH 21, OF MAPS, RECORDS OF RIVERSIDE COUNW.
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