Report Prepared by: Leah Brown, Management Analyst, Development Services Department
Title
SUBJECT: Approval of a First Amendment to the Deposit and Reimbursement Agreement with UC Village, LLC, Relating to the Annexation of Approximately 37.2 Acres of Land at the Southwest Corner of Bellevue and Lake Roads Called the UC Villages Annexation Project to the City of Merced and Approval of a First Amendment to the Professional Services Agreement with De Novo Planning Group
REPORT IN BRIEF
Considers approving amendments to the Deposit and Reimbursement Agreement with UC Village, LLC, and the Professional Services Agreement with De Novo Planning Group to increase the amount of the contract for environmental services and to reimburse for City staff time to manage said contract.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the First Amendment to the Deposit and Reimbursement Agreement with UC Village, LLC, in the amount of $12,100, which includes the increase in contracted environmental services ($11,000) and management time by City staff (1,100); and,
B. Approving the First Amendment to the Professional Services Agreement with De Novo Planning Group in the amount of $11,000; and,
C. Approving an increase of revenue in the amount of $11,000 to Fund 3000-Development Services, Developer Capital Fees account and appropriating the same to Fund 3000-Development Services, Professional Services account for payment to De Novo Planning Group; and,
D. Approving an increase in revenue in the amount of $1,100 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 Deposit and Reimbursement Agreement and the Professional Services Agreement; or,
2. Direct staff to make changes and return to Council at a later late; or,
3. Deny; or,
4. 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 annexed. UC Merced was fully annexed in 2024, which clears the way for this action to proceed.
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 is proceeding with the environmental review process.
Consultant Selection
In November 2023, De Novo Planning Group was selected as the consultant 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.
The original budget for the scope of services was $308,774 and the work was expected to take approximately 12 months to complete. The developer entered into a Deposit and Reimbursement Agreement to pay for De Novo Planning Group’s services and the City management fee.
Due to additional evaluation and revisions to the traffic study the environmental work exceeded the initial expectation. Additional efforts to prepare the Draft EIR include coordinating biological resources, responses to comments, numerous meetings regarding the Traffic Study Report and facilitation between the various subcontractors, the City, and applicant team lead to an overall budget adjustment request of $11,000 by De Novo Planning Group. The city’s management fee is 10% of the total amount of the environmental work, this fee is captured in the Amended Deposit and Reimbursement Agreement (Attachment 5).
City Council Action
City staff is recommending that the City Council approve the Amended Professional Services Agreement (Attachment 4) in the amount of $11,000 to De Novo Planning Group to perform the environmental services for the UC Villages Annexation to the City of Merced. Staff is also recommending the approval of the Amended Deposit and Reimbursement Agreement (Attachment 5) with UC Village, LLC, to cover the costs of the contract ($11,000) as well as City staff time involved in managing the contract ($1,100).
IMPACT ON CITY RESOURCES
The City is not responsible for the cost of preparing the EIR document. UC Village, LLC, will fund the entire cost of De Novo Planning Group’s contract amendment as well as paying for City staff time to manage the contract.
This item requires 5 affirmative votes for approval.
ATTACHMENTS
1. Location Map
2. Original Professional Agreement for Services with De Novo Planning Group
3. Original Deposit and Reimbursement Agreement with UC Village, LLC
4. First Amendment to the Professional Services Agreement with De Novo Planning Group
5. First Amendment to the Deposit and Reimbursement Agreement with UC Village, LLC