The URL can be used to link to this page

Home My WebLink About#11 MOU Gray's Crossing AGENDA ITEM #11 Public Utility District m MEETING DATE: June 5, 2024 TO: Board of Directors FROM: Michael Salmon, Chief Financial Officer SUBJECT: Consideration to Approve an 18-month Term Extension of the Memorandum of Understanding Related to Gray's Crossing (APN 043-010-007-000) APPROVED BY: Brian C. Wright, General Manager RECOMMENDATION: Authorize the General Manager to execute an 18-month term extension to the Memorandum of Understanding (MOU) regarding APN# 043-010-007-000. BACKGROUND: At the January 5, 2022, Board of Directors regular meeting, the Board authorized the General Manager to execute a Memorandum of Understanding (MOU) regarding APN# 043-010-007-000 (attachment 1); accepting full payment for all installment special tax amounts past due, in exchange for waiving current Penalty and Interest amounts due. The MOU's Term is specified as follows: 6. Term. The term of this Agreement shall be eighteen (18) months ("Initial Term"). In the event of expiration of any appeals period(s) applicable to the Town's final approval of the Entitlements without legal challenge has not occurred within eighteen (18) months of the Effective Date, the Developer shall have an additional six (6) months to avail itself of the benefits described in Section 2 above ("Extended Term"). The Initial Term and Extended Term are hereinafter collectively referred to as the "Term"). The MOU was signed on June 7, 2022, providing a 24-month expiration date of June 6, 2024. ANALYSIS AND BODY: The developer has indicated that the planning and approval process for the Town of Truckee has taken longer than anticipated. Staff believes that an amendment to the MOU, which provides a term extension of 18 months, would benefit both the developer and the Gray's Crossing Community Services District (CFD). GOALS AND OBJECTIVES: Page 1 of 2 Page 24 of 449 District Code 1 .05.020 Objectives: 1. Responsibly serve the public. 6. Manage the District in an effective, efficient and fiscally responsible manner. District Code 1 .05.030 Goals: 1. Manage for Financial Stability and Resiliency 3. Engage with our customers and communities in a welcoming and transparent way to identify opportunities. 4. Take the best of private sector thinking to modernize the utility and add value to our communities. FISCAL IMPACT: No direct fiscal impact to the District. The Gray's Crossing CFD would benefit if this parcel, through this MOU, makes payment on delinquent tax assessments. ATTACHMENTS: 1. GC - Parcel F - TDPUD MOU (executed) Page 2 of 2 Page 25 of 449 DocuSign Envelope ID:C67BB620-6AFE-4C35-A8F0-38C8CA391239 GRAY'S CROSSING PARCEL F AGREEMENT This GRAY'S CROSSING PARCEL F AGREEMENT("Agreement")dated for reference purposes only as of May 19, 2022, is made by and between the TRUCKEE DONNER PUBLIC UTILITY DISTRICT, a public utility district ("District") and GRAY'S CROSSING F, LLC, a Delaware limited liability company ("Developer"). District and Developer are collectively referred to herein as the "Parties". RECITALS A. An affiliate of Developer has entered into a binding purchase and sale agreement ("PSA") for that certain property located in the Town of Truckee ("Town"), County of Nevada, State of California,known as Assessor's Parcel Number 043-010-007-000 and described in Exhibit A attached hereto ("Property"). B. Such PSA would require Developer at the close of escrow to assume all existing delinquent Mello-Roos special tax liabilities associated with Community Facilities District No. 04-01 (Gray's Crossing) (the"CFD") and applicable to the Property. C. District's Board of Directors, formed the CFD under the provisions of the Mello- Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California. District is authorized to levy special taxes upon land within the CFD, including the Property, and has issued one or more series of bonds to provide financing for infrastructure and other public capital improvements to be owned and operated by District. D. Developer intends to pursue the Entitlements (as defined below) for the Property that would enable Developer to develop the Property and pay the Principal Amount (as defined below). E. District acknowledges that Developer would not close escrow and acquire the Property but for District's agreement to waive all applicable penalties and interest upon payment of the Principal Amount pursuant to the terms and conditions set forth below. NOW, THEREFORE,based on the terms and conditions herein set forth, the Parties agree as follows: AGREEMENT 1. Pursuit of Entitlements. Following execution of this Agreement and acquisition of the Property, Developer intends to seek project level entitlements to develop the Property as desired by Developer from the Town(collectively, "Entitlements"). Obtaining the Entitlements is not a covenant of Developer. 2. Forgiveness of Penalties and Interest. Upon expiration of any appeals period(s) applicable to the Town's final approval of the Entitlements without legal challenge, Developer shall,within ninety(90)days of the expiration of such appeals period(s),pay to District all amounts 1 Page 26 of 449 DocuSign Envelope ID:C67BB620-6AFE-4C35-A8F0-38C8CA391239 necessary to both(a) satisfy the judgment(s) obtained by or on behalf of the District related to the delinquent special taxes less the applicable penalties and interest associated therewith that are forgiven pursuant to the remainder of this Section 2 ("Principal Amount") and (b) any currently due special taxes. Upon such payment, District shall immediately waive all applicable penalties and interest to the maximum extent permitted by law. As December 31, 2021, the Principal Amount totals $1,706,214 and applicable penalties and interest total $1,863,834. The Parties acknowledge that the Principal Amount as well as the applicable penalties and interest will increase before Developer's payment pursuant to the terms and conditions of this Agreement. District hereby agrees that in exchange for Developer's payment of the Principal Amount and any currently due special taxes, District shall waive all applicable penalties and interest accruing with respect to special taxes that were delinquent at the time of Developer's acquisition of the Property until such time as the Principal Amount and any currently due special taxes are paid pursuant to the terms and conditions of this Agreement. Developer hereby represents to District that as of the Effective Date, Developer is not responsible for any portion of the delinquencies or applicable penalties and interest attributable thereto as described herein. 3. District Findings. By its approval of this Agreement, the Board of Directors of District hereby finds and determines that: (a) the waiver of all applicable penalties and interest described herein shall apply only to the Property and the special tax applicable to the Property that was delinquent at the time of the Developer's acquisition of the Property; (b) such waiver shall only be available to the Property at such time as the Principal Amount and currently due special taxes and all other costs (excluding all applicable penalties and interest) are paid in full, which shall occur within the time periods described in Sections 6 below; (c) the Property will have been sold or otherwise transferred to new owners unrelated to the owner(s) responsible for the delinquencies as of the Effective Date; and (d) said waiver is in the best interest of the owners of the bonds in that it will result in the curing of a significant special tax delinquency and facilitate development of the Property thereby reducing the likelihood of future special tax delinquencies. 4. Limitations. Nothing contained in this Agreement is intended in any way to limit District's ability to continue to diligently pursue foreclosure proceedings until the delinquent special taxes applicable to the Property are paid. 5. Effective Date. This Agreement shall become effective upon the date of the last signature below. 6. Term. The term of this Agreement shall be eighteen(18)months("Initial Term"). In the event expiration of any appeals period(s) applicable to the Town's final approval of the Entitlements without legal challenge has not occurred within eighteen(18)months of the Effective Date, Developer shall have an additional six (6)months to avail itself of the benefits described in Section 2 above ("Extended Term"). The Initial Term and Extended Term are hereinafter collectively referred to as the "Term"). 7. Waiver. Waiver by a party of any of the covenants or agreements herein contained on the part of the other party to be kept or performed shall not be construed as constituting a waiver of the same or of any other covenant as to breach or default subsequently arising or as the waiver of a subsequent breach of any of the covenants hereunder. 2 Page 27 of 449 DocuSign Envelope ID:C67BB620-6AFE-4C35-A8F0-38C8CA391239 8. Remedies Cumulative. The rights and remedies of each party under this Agreement are cumulative and not exclusive of any rights or remedies to which such party is entitled by law. The exercise by a party of any right or remedy under this Agreement or under applicable law will not preclude such party from exercising any other right or remedy under this Agreement or to which the Parties are entitled by law. 9. Binding on Heirs and Successors. This Agreement shall be binding on and shall inure to the benefit of the heirs, executors, administrators, successors and assigns of the Parties hereto. 10. Costs of Dispute. In the event of a dispute arising from or relating to the terms of this Agreement or the breach hereof,the party prevailing in such dispute shall be entitled to recover all expenses, including, without limitation, reasonable attorneys' fees and expenses, incurred in ascertaining such parry's rights, in preparing to enforce, and in enforcing such party's rights under this Agreement, whether or not it was necessary for such party to institute adjudicatory proceedings. Expenses shall include but not be limited to, court costs as well as consultants' and experts' fees and costs. 11. Notices. Except as otherwise expressly provided by law, any and all notices or other communication required or permitted by this Agreement or by law to be served on or given to either party hereto by the other party hereto shall be in writing and shall be deemed duly served and given when personally delivered to the party to whom it is directed, sent by facsimile transmission, sent via electronic message to the party's email address(es) set forth below, or when deposited in the United States mail, first-class postage prepaid, addressed as follows. If not sent via electronic message originally, any notice or other communication must also be sent via electronic message to the party's email address(es) set forth below. District: Truckee Donner PUD 11570 Donner Pass Rd Truckee, CA 96161 Attn: Michael Salmon(MichaelSalmon@tdpud.org) Developer: GRAY'S CROSSING F, LLC, P8 GC I, LLC 13051 Fairway Drive Truckee, CA 961616 Attn: Hayes Parzybok (hwp@paradigm8.com) Brian Helm(bhelm@paradigm8.com) Either party may change their address for the purpose of this paragraph by giving written notice of such change to the other party in the manner provided in this paragraph. 12. Time. Time is of the essence of this Agreement and each and all of its provisions in which performance is a factor. 13. No Joint Venture or Partnership. Nothing contained in this Agreement is intended or should be construed to create a partnership or joint venture relationship between the Parties. 3 Page 28 of 449 DocuSign Envelope ID:C67BB620-6AFE-4C35-A8F0-38C8CA391239 14. Entire Agreement. This instrument contains the entire agreement of the Parties relating to the rights granted and obligations assumed in this Agreement. Any oral representations or modifications concerning this instrument not contained herein shall be of no force or effect unless contained in a subsequent written modification signed by the party to be charged. 15. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute but one and the same instrument. An electronic, digital, or facsimile signature shall be deemed an original signature. 16. Further Assurances. Each party agrees that it will execute and acknowledge such documents reasonably requested by the other to carry out the terms, purposes, and intent of this Agreement. 17. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of California. 18. Interpretation. Notwithstanding the fact that one or more provisions of this Agreement may have been drafted by one of the Parties to this Agreement, such provisions shall be interpreted as though they were the product of a joint drafting effort and no provision shall be interpreted against a party on the ground that said party was solely or primarily responsible for drafting the language to be interpreted. 19. Exhibits and Recitals. The exhibits attached to this Agreement and the Recitals are made a part of this Agreement by this reference. The Parties hereto have executed this Agreement on the dates written opposite the signatures of the Parties below. District TRUCKEE DONNER PUBLIC UTILITY DISTRICT, a public utility district 6/9/2022 DocuSigned by: Dated: , 2022 g,� W, �S By: Brian Wright Its: General Manager 4 Page 29 of 449 DocuSign Envelope ID:C67BB620-6AFE-4C35-A8F0-38C8CA391239 6/7/2022 Dated: , 2022 Developer GRAY'S CROSSING F, LLC, a Delaware limited liability company By: P8 Management, Inc., a Nevada corporation its Manager IIlIDocuSigned by: A4C34CDFE746457— By: Hayes Parzybok Its: CEO 5 Page 30 of 449 DocuSign Envelope ID:C67BB620-6AFE-4C35-A8F0-38C8CA391239 Exhibit A Legal Description of Property Real property in the Town of Truckee, County of Nevada, State of California, described as follows: Lot F as shown on the Map entitled "Gray's Crossing Phase 3 - Final Map No. 02-007" filed May 10, 2007 in Book 8 of Subdivisions, Page 168,Nevada County Records. APN: 043-010-007-000 6 Page 31 of 449