Title
Department of Transportation recommending the Board approve and authorize the Chair to sign Amendment II to Subdivision Improvement Agreement 21-54978 for Campobello Unit 1, TM 05-1403R, with Campobello 24-8, LLC , amending the owner to KB Home Sacramento, Inc., replacing the bonds held on the project, and extending the performance period to June 24, 2026.
(District 2)
FUNDING: Developer Funded.
Body
DISCUSSION / BACKGROUND
On June 14, 2022 (Legistar file 22-0958), the Board approved the Subdivision Improvement Agreement (SIA) and Final Map for the development known as Campobello Unit 1, TM 05-1403R (“Project”), with Campobello 24-8, LLC (“Original Owner”). The SIA required completion of all subdivision improvements no later than June 14, 2024.
Resolution 96-95 authorizes the Department of Transportation (Transportation) director to sign a one-time, twelve (12) month extension of improvement agreement performance periods. This authority was used to execute the First Amendment to the SIA on June 6, 2024, which extended the performance period one year to June 14, 2025. Subsequent extensions must be approved by the Board.
On February 20, 2025, the Project was sold to KB Home Sacramento, Inc. (“Successor Owner”). Transportation staff coordinated with Successor Owner during their due diligence phase and were aware of the potential sale of the project. The proposed Second Amendment to the SIA updates the ownership on the project and transfers all rights and obligations to the Successor Owner. Due to the change in ownership, there have been delays in the completion of the project and the Successor Owner has requested a one year extension of the performance period to June 24, 2026. The construction of this subdivision is substantially complete; however, the Developer needs to be within the performance period of the agreement in order to complete any remaining items and finalize the project. Transportation requires a valid performance period at the time of project completion and acceptance.
Further, the change in ownership necessitates the replacement of the bonds held on the project. The total estimated project cost is $2,117,167.71, but some of the work was completed under a previous Subdivision Grading Agreement and developers are required to bond only for improvements that have not yet been completed. The Performance Bond was previously reduced to the amount of $211,716.77, which represents 100% of the total remaining improvements, and the replacement Performance Bond reflects the same amount. As this amount represents 10% of the total estimated cost, no additional reductions will be made upon acceptance of the project as complete. Upon approval of the proposed amendment, the bonds currently held will be returned to the Original Owner and the replacement bonds held in their place.
ALTERNATIVES
N/A
PRIOR BOARD ACTION
See Discussion / Background section above.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel
CAO RECOMMENDATION
Approve as recommended.
FINANCIAL IMPACT
There is no fiscal impact or change to Net County Cost associated with this Board action. Costs related to this action are borne by the developer.
CLERK OF THE BOARD FOLLOW UP ACTIONS
1) The Clerk of the Board will obtain the Chair's signature on the two (2) originals of the Amendment.
2) The Clerk of the Board will return one (1) signed original Amendment to Department of Transportation, attn. Lindsay Tallman, for further processing.
3) The Clerk of the Board will return Performance Bond 800120174 and Laborers & Materialmens Bond 800120174 to the Original Owner, Campobello 24-8, LLC, 9940 Business Park Drive, Suite 165, Sacramento, CA 95827.
STRATEGIC PLAN COMPONENT
Priority: N/A
Action Item: N/A
CONTACT
Rafael Martinez, Director
Department of Transportation