2023/06/05 LI Acquisitions, LLC Developers Reimbursement AgreementJune 5, 2023
LI Acquisitions, LLC
Attn: Tyler Banton 120 Newport Center Drive.,
Suite 217
Newport Beach, CA 92660
Re: Agreement for the Deposit and Reimbursement of fees incurred by the City of
Menifee in Conducting and Processing Analysis under the California
Environmental Quality Act of the Northern Gateway Logistics Center Project.
Dear Mr. Banton,
LI Acquisitions, LLC (“Developer”) has requested that the City of Menifee
(“City”) consider (“Northern Gateway Logistics Center Project”). Northern Gateway
Logistics Center proposes two concrete tilt up warehouses located south of Ethanac, east of
Evans Road, West of Barnett Road and north of McLaughlin on 5 parcels (APN’s:
331-060-020,331-060-023, 331-060-007, 331-060-030, 331-060-008). Building 1 is proposed to
be 105,537 square feet and is located on the north side of the project. Building 2 is on the
southern end of the project and is 292,715 square feet. The project will have access off of
Barnett Road and Evans Road. The site will also consist of 351 auto parking spaces and frontage
improvements along Evans, Barnett and a future truck corridor along the southern property line
for westbound truck traffic. Associated facilities and improvements of the Project sites include
loading dock doors, on-site landscaping, and related on-site and off-site improvements
(including relocation of an underground storm drain that connects to a flood channel). The
proposed building is speculative in nature. The Applicant does not know the future building
occupant, hours of operation, number of employees, number of shifts, type of equipment or
processes used, or on-site activities (“Project”). To conduct its review and analysis of the
Project, the City is required to conduct an environmental analysis (“CEQA Analysis”) as
required by the California Environmental Quality Act, Public Resources Code section 21000
et seq., and its implementing guidelines found at Title 14 of the California Code of Regulations
section 15000 et seq.
The City will commence to take the steps necessary, at Developers sole expense
so that the City will be able to conduct and complete the CEQA Analysis. Developer is prepared
to reimburse the City for all costs associated with the City’s conduct, processing, and
consideration of the CEQA Analysis including without limitation in-house staff time
and resources, environmental consultant time and resources, City’s legal counsel’s time and
resources, and other third-party cost items. For example, the costs incurred by the City to
engage an environmental review consultant, and any necessary sub-consultants or technical
consultants, to conduct the
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June 5, 2023
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CEQA Analysis shall be borne by the Developer. This letter serves as an “Initial Deposit
Agreement” by and between Developer and the City.
To assist the City in undertaking their consideration of whether or not to approve the
Project, Developer agrees to provide the City with an initial deposit, consisting of at least 50% of
the contract amount plus, an administrative cost of 15% of the professional services agreement or
$5,000, whichever is less, in the amount of $194,882 (“Initial Deposit”). The Initial Deposit plus
any remaining balance due of the total of the Professional Services Agreement and administrative
cost is to be incurred by the City in connection with the conduct, processing, review, evaluation,
and action taken on the CEQA Analysis (“Analysis Costs”). Developer deposited the Initial
Deposit with the City, to the attention of the Finance Director, on or before May 30, 2023
(“Effective Date”), which is at least one (1) week in advance of the Professional Services
Agreement being fully executed by the City of Menifee with the selected consultant.
The remaining 50% or balance, if applicable, of the Analysis Costs $189,882 (“Second
Deposit Payment”) shall be due at the halfway point of completion of the Analysis , but no later
than prior to public release of the CEQA documents. The Community Development Department
shall notify the Developer once the halfway point of completion of the Analysis has been reached.
The Second Deposit payment shall be deposited with the City, to the attention of the Finance
Director, within and no later than two (4) weeks, twenty (20) business days of receiving
notification from the Community Development Department. If Developer fails to timely provide
a Second Deposit Payment, the City may without further notice cease all work on the CEQA
Analysis and order that all consultants, attorneys and third parties do the same (“Stop Work
Order”) until the Second Deposit Payment is received. Developer understands and acknowledges
that, even if the Second Deposit Payment has not yet been received, it shall remain fully
responsible for Analysis Costs incurred by the City up to the date that the City issues a Stop Work
Order.
The Initial Deposit and Second Deposit Payment shall be used to reimburse the Analysis
Costs. If at any time the City determines that the Analysis Costs will exceed the amount of the
Initial Deposit and Second Deposit Payment, then the City shall give written notice to the
Developer describing the additional scope and cost of work, and Developer shall, within two (2)
business days approve such additional scope of work or amendment(s) to subconsultants scope.
Within twenty (20) business days of receipt of written approval from the Developer, Developer
will supplement the deposit amount so that the amount remaining on deposit with the City equals
all remaining estimated Analysis Costs (“Deposit Supplement”). The City may from time to time
repeat the process of revising the estimated Analysis Costs and requiring a revised deposit amount
from Developer (upon twenty (20) business days written notice) (“Further Deposit
Supplement”). If Developer fails to timely provide a Deposit Supplement or Further Deposit
Supplement, the City may without further notice cease all work on the CEQA Analysis and order
that all consultants, attorneys and third parties do the same and issue a Stop Work Order. Developer
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understands and acknowledges that, even if the deposit is fully exhausted, it shall remain fully
responsible for Analysis Costs incurred by the City up to the date that the City issues a Stop Work
Order. Any unspent monies will be reimbursed within thirty (30) days upon receipt of the
project’s final accounting. LI Acquisitions, LLC has made an Initial Deposit and possibly
a Deposit Supplement and Further Deposit Supplements (the “Deposit”). If DEVELOPER
terminates in writing the CEQA Analysis, or once the project is entitled, City will refund to
DEVELOPER the remaining funds from the Deposit within thirty (30) days upon receipt of
the project’s final accounting.
PAYMENT SCHEDULE:
Payment Description Amount Due Description Due Date
Initial Deposit At least 50% Analysis Costs
+ Lesser of 15% of Analysis
Costs OR $5,000
At least one (1) week before
Professional Services
Agreement Signed
Second Deposit 50% or balance of Analysis
Costs
Within twenty (20) business
days of Notification from
Community Development
Department of halfway point
of Analysis Completion
Deposit Supplement/
Further Deposit
Supplement
TBD, if applicable, for
additional contract
amendment costs identified.
Within twenty (20) business
days of Notification from
Community Development
Department of need for
Deposit Supplement.
Developer understands and acknowledges that City and Developer shall mutually agree in
selecting and providing direction to any consultants or other third parties in connection with the
CEQA Analysis. Notice to proceed and mutual agreement can be accepted through e-mail approval
from both parties.
It is anticipated that the CEQA Analysis will be presented to the Menifee Planning
Commission and City Council for consideration and potential action in the future. Developer and
the City understand that the City is reserving the right to exercise its sole and absolute discretion
as to all matters over which the City is, by law, entitled or required to exercise discretion. By
executing this Initial Deposit Agreement, the City is not committing or agreeing to undertake any
activity requiring the subsequent discretion of the City, or any department of the City. The City’s
execution of this Initial Deposit Agreement is merely an agreement to allow the necessary work to
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be completed, at Developer’s expense, to bring the CEQA Analysis forward for City consideration.
Nothing in this Initial Deposit Agreement shall be deemed to constitute a commitment by the City
to approve or certify the CEQA Analysis, or a prejudgment of the matters required to be considered
as part of the decision whether or not to approve the Project.
Please document Developer’s concurrence with these terms and limitations by signing
below and returning the originally executed letter to me, along with the Initial Deposit.
Very truly yours,
CITY OF MENIFEE
Cheryl Kitzerow, AICP
Community Development Director
APPROVED AS TO FORM:
By:
Jeffrey Melching, City Attorney
ACCEPTANCE OF INITIAL DEPOSIT
AGREEMENT: LI Acquisitions, LLC
By: Date:
Ted Hart
DocuSign Envelope ID: 07B7EAF2-B539-4777-8377-E49CDE909744
6/6/2023
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