In 2011, the City Council entered into a Development Agreement (Agreement) with a developer, Canon Station LLC, regarding approximately 1,570 acres within the Fairfield Train Station Specific Plan Area (TSSP). Canon Station LLC is the developer of the One Lake neighborhood, known as Planning Area 4 of the TSSP. They are also the developer of a future neighborhood to the east of One Lake, known as Planning Area 5. Key provisions of the agreement include the following:
1. Vested the General Plan, Fairfield Train Station Specific Plan, and PD Overlay Zone District, as they existed on August 16, 2011;
2. Vested the right to develop up to 3,101 dwelling units and 4.6 million square feet of office and industrial building floor area;
3. Provided for the transfer of approximately 100 acres of City-owned land to Canon Station in exchange for the 204-acre Kelley Property for public park and open space uses, cash, and other considerations;
4. Required construction of various public improvements by Canon Station including a new fire station, park improvements, and road improvements;
5. Established various Community Facilities Districts (“CFDs”) to pay for infrastructure and municipal services, including public safety (police and fire), park maintenance, and open space maintenance; and
6. Required that Canon Station preserve more than 1,000 acres in open spaces within and in the vicinity of the Train Station Specific Plan Area. Preservation is to be achieved by, among other provisions, establishing a conservation easement on these lands.
On December 16, 2014, the council adopted an amended and restated agreement. Key provisions as listed above, however, were not modified. Since that time, the council has approved three amendments to the 2014 amended and restated agreement. The City and Canon Station LLC are each seeking a fourth amendment.
Proposed Amendments: The proposed fourth amendment addresses seven topics covered by the agreement, as follows:
1. Construction of a new fire station. During preparation of the TSSP, the City concluded that a new fire station is needed to serve the easternmost portion of Canon Station’s project. The station is only needed to serve Canon Station’s development, not other parts of the TSSP, the existing agreement obligates Canon Station LLC to fund the new station. The agreement also obligates Canon Station to design and construct the station, with delivery of an operable station to occur by the 500th dwelling unit.
The City’s fire and public works staff now prefer to have greater control over the design and construction of new fire stations. Staff also wishes to consider a site for the station on Peabody Road, rather than one on Huntington Drive acquired by the developer. The proposed amendment transfers responsibilities for site acquisition and station design and construction from the developer to the City.
2. Terms for a Community Facilities District that funds construction of the fire station. The existing agreement authorizes Canon Station to form a Community Facilities District (CFD) to fund infrastructure that serves their development. This infrastructure includes the planned fire station. Under the CFD, the developer is able to obtain funds up front to construct infrastructure via bond(s). The bonds are repaid over time by the eventual beneficiaries, the homeowners, as a part of their annual property tax bill.
The proposed amendment modifies terms to ensure that the City, rather than the developer, will get repaid from the CFD for costs to acquire land and construct the fire station. The amendment increases the dollar limits for the City’s repayment from bonds and increases the maximum combined assessment of ad valorum property tax and CFD special taxes from 1.5% to 1.65%. This change accounts for an increase in anticipated costs to construct the fire station since adoption of the original agreement.
3. Timing for establishment of the Conservation Easement. The current agreement requires a conservation easement on approximately 1,000 acres of land surrounding Canon Station’s development to create a permanent undeveloped greenbelt. Canon Station is using the preserved greenbelt to satisfy State laws pertaining to protection of endangered species. As such, various terms pertaining to the conservation easement are subject to State review and approval.
State involvement was not anticipated when the City and developer agreed that the conservation easement be established prior to subdivision. The State process for approval is slow and, through no delay of their own, the developer is still awaiting State approval. As a result, the conservation easement cannot be recorded yet. The proposed amendment modifies the timing requirement for recordation of the conservation easement to the earlier of the 500th unit in the One Lake neighborhood, or the first subdivision Canon Station’s next phase, Planning Area 5.
4. Compensation for Canon Station’s purchase of City property. Through the agreement, Canon Station acquired approximately 100 acres of land from the City. The agreement sets the value for the land, and timing for payment by Canon Station. Payment occurs via a set formula whenever Canon Station subdivides land that was formerly City property. The agreement includes a termination date. It does not, however, specify how the City will be paid if the developer has not subdivided all City land at the time the agreement expires. The proposed amendment makes clear that the developer shall pay any outstanding balance at the time the agreement expires.
5. Timing for construction of certain park and Linear Park improvements. The agreement establishes timing for Canon Station to construct various park and Linear Park improvements. These requirements are contained in Development Agreement Exhibits 13-1 and 13-2. Various circumstances warrant reconsideration of the timing for various park improvements. These include:
• Modified phasing of development within the One Lake neighborhood
• Construction of the One Lake Apartments sooner than anticipated
• Revised planning for the park around the project’s lake
• Unanticipated State approvals for grading of the former railroad bed for the Linear Park
The proposed amendment modifies Exhibits 13-1 and 13-2 to account for these factors.
6. Process for amending the agreement. Currently, amending the Development Agreement requires approval by the council. As noted above, at various points, staff and the developer have learned that matters generally outside the parties’ control can cause unanticipated delay (e.g. requirements for State approval of Conservation Easements and for Linear Park grading). At present, addressing these challenges requires a time-consuming process for the council to amend the agreement, or time-consuming and expensive legal counsel to determine if an alternate path is allowed.
The proposed amendment creates an administrative process that allows the city manager authority for certain amendments. Substantive amendments still require City Council approval. Substantive amendments include those that affect:
• Terms for the agreement such as reservation or dedication of land, future discretionary actions, or development regulations
• Permitted uses or monetary contributions by the developer
• Amendments that affect rights or obligations of assignees, and amendments that affect obligations of Canon Station LLC to its assignees, unless assignee(s) authorize such changes in writing.
7. Force Majeure. The Force Majeure section of the agreement contains terms to ensure that neither the City nor the developer can be deemed in default of the agreement if failure to perform is due to a specified list of actions that are out of a party’s control. In light of COVID-19, the proposed amendment adds matters pertaining to epidemics, pandemics, quarantines, and related matters to the list of reasons a party would not be deemed in breach of the agreement.
Government Code Section 65868.5 requires that a development agreement be consistent with the General Plan and any Specific Plan. The Planning Commission’s April 14, 2021 report for the project contains a detailed consistency analysis for City’s General Plan and the TSSP. The proposed amendments are further within the scope of the impacts analyzed by the Environmental Impact Report for the TSSP.