Report Prepared by: Francisco Mendoza-Gonzalez, Acting Principal Planner, Development Services Department
Title
SUBJECT: Approval of a First Amendment to Professional Services Agreement with Dudek for Environmental Services, and a First Amendment to a Deposit and Reimbursement Agreement with Gardner Ranch 2, LLC, and Gardner Commercial, LP, for the Reserve Annexation (Annexation #16-01) Consisting of Approximately 70 Acres of Land, Generally Located at the Northeast Corner of Yosemite Avenue and Gardner Avenue
REPORT IN BRIEF
Considers approving a First Amendment to the Professional Services Agreement with Dudek in the amount of $58,290 (from $202,820 to $261,110) to complete environmental services for the Reserve Annexation (Annexation #16-01),consisting of approximately 70 acres of land, generally located at the northeast corner of Yosemite Avenue and Gardner Avenue, and approving an amendment to the Deposit and Reimbursement Agreement with Gardner Ranch 2, LLC, and Gardner Commercial, LP, to increase by $64,119 to (from $223,102 to $287,221) to fund the Dudek contract and to reimburse for City staff time to manage the contract.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the First Amendment to the Professional Services Agreement with Dudek to complete environmental services for the Reserve Annexation (Annexation #16-01), an increase in the amount of $58,290; and,
B. Approving the First Amendment to the Deposit and Reimbursement Agreement with Gardner Ranch 2, LLC, and Gardner Commercial, LP, in the amount of $64,119 to cover the additional cost of the consultant contract ($58,290) and additional staff time ($5,829) for the administration of the environmental review process and contract; and,
C. Approving an increase of revenue in the amount of $58,290 to Fund 3000-Development Services, Developer Capital Fees account and appropriating the same to Fund 3000-Development Services, Professional Services account for payment to Dudek; and,
D. Approving an increase in revenue in the amount of $5,829 to Fund 3000-Development Services, Cost Recovery account; and,
E. Authorizing the City Manager to execute the agreements.
Body
ALTERNATIVES
1. Approve the First Amendment to the Professional Services Agreement, and Deposit and Reimbursement Agreement; or,
2. Amend the First Amendment Professional Services Agreement, and or the Deposit and Reimbursement Agreement (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 October 19, 2020, the City Council indicated general support for moving forward with the proposed annexation at the northeast corner of Yosemite Avenue and Gardner Avenue, renamed the Reserve Annexation in 2024.
On October 2, 2023, the City Council approved the original Professional Service Agreement with Dudek for what is now called the Reserved Annexation (Annexation #16-01), and the original Deposit and Reimbursement Agreement with Gardner Ranch 2, LLC, and Gardner Commercial, LP, for this project.
DISCUSSION
Status of the Reserve Annexation
The Reserve Annexation consist of approximately 70 acres of land located at the northeast corner of Yosemite Avenue and Gardner Avenue. This application initially started around 2016, and included the beginning stages of environmental review. However, the applicant put the proposal on hold for a few years. The property owner(s) at that time decided to sell the subject site to the current property owners (Gardner Ranch 2, LLC, and Gardner Commercial, LP) with the environmental review work done up to that moment.
The current property owners elected to keep Dudek on the project to continue working on the environmental review. On October 2, 2023, the City Council approved a Professional Service Agreement and a Deposit and Reimbursement Agreement for the Reserve Annexation (Annexation #16-01) for Dudek to continue processing the annexation.
In early 2024, the project description was updated to reflect the applicants’ specific proposal, which includes approximately 426 multi-family residential units and eight commercial buildings totaling approximately 88,298 square feet of commercial space. In Spring 2024, technical studies were completed to various sections of the environmental review which included Biological Resources, Archaeological Resources, and Built Environment Resources. In Summer 2024, the Notice of Preparation was released for public review, including routing to various Stage agencies for comments.
First Amendment to Professional Service Agreement
Subsequent to the Notice of Preparation being released for the Reserve Annexation, staff received several comments from various State agencies. This included a request to provide supplemental studies for the project, such as soil testing. In addition, the transportation impact analysis needs to be updated include quick service restaurants with drive-throughs. Dudek’s Proposed Additional Scope of Work is provided at Exhibit 1 of Attachment 4. Dudek has indicated that they will need to augment the project budget by $58,290 in order to complete the project.
Staff is recommending that the City Council approve the First Amendment to the Professional Services Agreement (Attachment 4) to augment the budget in the amount of $58,290. It is anticipated that the annexation will be ready for City Council public hearings by early 2026.
First Amendment to Deposit and Reimbursement Agreement
An amendment to the Professional Service Agreement for the Reserve Annexation (Annexation #16-01) environmental services would also require an amendment to the Deposit and Reimbursement Agreement. The current Deposit and Reimbursement Agreement between the City and the property owner is for $223,102.
Staff is recommending that the City Council approve the First Amendment to the Deposit and Reimbursement Agreement (Attachment 6) to $287,221. This would be an increase of $64,119 of which $58,290 would fund Dudek’s Proposed Additional Scope of Work, and $5,829 would pay for City staff time to manage the contract (or ten percent of the contract amount per the Planning and Development Fee Schedule).
City Council Action
The City Council is being asked to approve the contract amendment for Dudek in the amount of $58,290 at Attachment 4 to continue performing environmental services for the Reserve Annexation (Annexation #16-01). The City Council should also approve the amendment for the Deposit and Reimbursement Agreement for this same project to fund Dudek’s contract ($58,290) as well as City staff time involved in managing the contract ($5,829) as shown at Attachment 6.
IMPACT ON CITY RESOURCES
An additional $64,119, increasing the total project budget to $287,221 (the original contract was for $223,102), will need to be appropriated to accomplish the fee update.
This item requires 5 affirmative votes from Council for approval.
ATTACHMENTS
1. Location Map
2. Site Plan
3. Renderings
4. First Amendment to Professional Services Agreement with Dudek
5. Original Professional Services Agreement
6. First Amendment to Deposit and Reimbursement Agreement
7. Original Deposit and Reimbursement Agreement