Report Prepared by: Julie Nelson, Acting Planning Manager, Development Services Department
Title
SUBJECT: Approval of a Professional Services Agreement with De Novo Planning Group in the Amount of $308,774 and a Deposit and Reimbursement Agreement with UC Village, LLC, in the Amount of $339,651.40 Relating to the Annexation of the Approximately 37.2 Acres of Land at the Southwest Corner of Bellevue and Lake Roads (UC Villages Annexation)
REPORT IN BRIEF
Considers approving a Professional Services Agreement with De Novo Planning Group, in the amount of $308,774 to perform environmental services for the annexation of approximately 37.2 acres at the southwest corner of Bellevue and Lake Roads (UC Villages Annexation) to the City of Merced and entering into a Deposit and Reimbursement Agreement with UC Villages, LLC, in the amount of $339,651.40 to fund the De Novo Planning Group contract and to reimburse for City staff time to manage the contract.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving an Agreement for Services with De Novo Planning Group, in the amount of $308,774 to perform environmental services for the annexation of the UC Villages project to the City of Merced; and,
B. Approving a Deposit and Reimbursement Agreement with UC Villages, LLC, in the amount of $339,651.40 to cover the cost of the consultant contract ($308,774) and staff time ($30,877.40) for the administration of the environmental review process and contract; and,
C. Approving an increase of revenue in the amount of $308,774 to Fund 3000-Development Services, Developer Capital Fees account and appropriating the same to Fund 3000-Development Services, Professional Services account for payment to Environmental Science Associates; and,
D. Approving an increase in revenue in the amount of $30,877.40 to Fund 3000-Development Services, Cost Recovery account; and,
E. Authorizing the City Manager or Deputy City Manager to execute the agreements; and,
F. Authorizing the Finance Officer to make the necessary budget adjustments.
Body
ALTERNATIVES
1. Approving the Services and Reimbursement Agreements as recommended by staff; or,
2. Amending the Services and Reimbursement Agreements (with specific amendments to be specified in Council motion); or,
3. Direct staff to make changes and return to Council at a later late; or,
4. Deny; or,
5. Continue the matter to a future Council meeting (date and time to be specified in motion).
AUTHORITY
The Cortese-Knox-Hertzberg Act of 2000 establishes procedures for city annexations and other local government changes in organization. Merced Municipal Code Title 19 spells out environmental review procedures for the City.
CITY COUNCIL PRIORITIES
On August 18, 2022, the City Council indicated general support for moving forward with the proposed annexation at the southwest corner of Bellevue and Lake Roads.
DISCUSSION
Background
A Pre-annexation application for the southwest corner of Bellevue and Lake Roads was submitted in 2022. On August 18, 2022, the City Council reviewed the Preliminary application and indicated general support for the annexation. However, per the provisions of AB 3312, this property was not eligible for annexation until the UC Merced Campus is annexed. Now that the UC Merced annexation is moving forward and was approved by City Council on October 16, 2023, this application is ready to move forward as well. Although the annexation cannot be approved until the UC Campus is fully annexed (it is still pending approval from LAFCO), it is appropriate to move forward with the Environmental Review process for this proposed annexation.
Proposed Annexation
The proposed annexation consists of approximately 37 acres at the southwest corner of Bellevue and Lake Roads (Attachment 1). Based on the preliminary application, the proposed UC Villages annexation would consist of a mixed-use development providing an estimated 922 dwelling units comprised of 852 5-story apartments, 51 2-story apartments, and 49 4-story apartments geared toward student housing. Additionally, the project would provide over one-million square feet of retail and hospitality uses such as a hotel. The formal annexation application may vary slightly from the pre-application, in the total number of units provided, number of stories for the proposed buildings, and the total square feet dedicated to retail and hospitality uses. The developer is still finalizing the plans, but he is ready to move forward with the environmental review process.
Recommended Consultant Selection
De Novo Planning Group was the environmental consultant selected to do the environmental review work for this annexation. The developer has worked with the De Novo Planning Group in the past and indicated they had the skills and experience to handle this project. City Staff reviewed De Novo’s qualifications and concur with that opinion. After discussing the project with the developer and City staff, De Novo Planning Group prepared a scope of work (Exhibit A of the Agreement for Professional Services at Attachment 2) for the preparation of an Environmental Impact Report (EIR) for the UC Villages annexation.
The scope of work includes project management, preparation of an initial study, the preparation of Notice of Preparation (NOP), the preparation of the Draft EIR for circulation for public review, the preparation of the Final EIR and Responses to Comments on the Draft EIR, and participation in public hearings on the project. The budget for the scope of services is $308,774 and the work is expected to take approximately 12 months to complete. The developer will enter into a Deposit and Reimbursement Agreement to pay for De Novo Planning Group’s services. The City is not responsible for the cost of preparing the EIR document.
The City Attorney’s office has prepared an Agreement for Professional Services with De Novo Planning Group at Attachment 2 for $308,774 and a Deposit and Reimbursement Agreement with UC Villages, LLC, at Attachment 3 for a total of $339,651.40. The $308,774 for the consultant contract will be paid in four installments within 30 days, 120 days, 180 days, and 270 days of execution of the contract respectively; and the $30,877.40 for staff time will be paid in one installment within 30 days of execution. The developer has already provided a check for the first installment of $69,122.60.
City Council Action
City staff is recommending that the City Council award the contract at Attachment 2 in the amount of $308,774 to De Novo Planning Group to perform the environmental services for the UC Villages Annexation to the City of Merced. The City Council should also approve the Deposit and Reimbursement Agreement at Attachment 3 with UC Villages, LLC, to cover the costs of the contract ($308,774) as well as City staff time involved in managing the contract ($30,877.40).
IMPACT ON CITY RESOURCES
UC Villages, LLC, through the Deposit and Reimbursement Agreement at Attachment 3 will fund the entire cost of De Novo Planning Group’s contract ($308,774) as well as paying for City staff time to manage the contract ($30,877.40) or ten percent of the contract amount per the Planning and Development Fee Schedule).
ATTACHMENTS
1. Location Map
2. Agreement for Services with De Novo Planning Group
3. Deposit and Reimbursement Agreement with UC Villages, LLC