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EN 
Sparks City Council Meeting 2/11/2013 2:00:00 PM
Monday, February 11, 2013 2:00 PM745 Fourth St, Sparks, NV 89431
General Business: 6.4
Title: FIRST READING and possible discussion of Bill No. 2653, an ordinance canceling the 2004 Development Agreement (Kiley Ranch North Project) between the City of Sparks and Kiley Ranch Communities and other matters properly relating thereto.
Petitioner/Presenter: Community Services/Armando Ornelas, City Planner
Recommendation: This is a first reading of the proposed ordinance; no action is typically taken at this time.
Financial Impact: None
Business Impact (Per NRS 237):
A Business Impact Statement is not required. This is a rule but does not impose a direct and significant economic burden on a business, or directly restrict the formation, operation or exemption of a business.
A Business Impact Statement is not required. This is a rule but does not impose a direct and significant economic burden on a business, or directly restrict the formation, operation or exemption of a business.
Agenda Item Brief: The proposed ordinance provides for cancellation of the Development Agreement for the Kiley Ranch North Project approved in 2004 for development of approximately 808 acres of land. In 2010, Kiley Ranch Communities filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code. The bankruptcy proceedings involving Kiley Ranch Communities constitute a default under the terms of the Development Agreement, a deficiency that cannot be rectified. In 2012, the City Attorney’s office sent written notice to the Kayfam Corporation and Kiley Ranch Communities of the default and of the City’s intent to cancel the Development Agreement. Approval and recording of this ordinance will result in its cancellation.
Background: The City of Sparks entered into the Development Agreement in 2004 with the Kayfam Corporation, Kiley Ranch LLC, the Lazy 5 Company, and David A. and Carol Kiley as Trustees of the Kiley Living Trust for development of approximately 808 acres of land. In 2005, Kayfam assigned its interests in the Development Agreement to Kiley Ranch North Communities. Kiley Ranch LLC and the Lazy 5 Company subsequently acknowledged Kiley Ranch Communities as the master developer for Kiley Ranch North Project. In 2010, Kiley Ranch Communities filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code. The bankruptcy proceedings involving Kiley Ranch Communities constitute a default under the terms of the Development Agreement, a deficiency that cannot be rectified. As per the terms of the Development Agreement the City Attorney’s office sent written notice in 2012 to the Kayfam Corporation and Kiley Ranch Communities of the default and of the City’s intent to cancel the Development Agreement.
Analysis: The 2004 Development Agreement permits the phased development of the Kiley Ranch North Project. A Planned Development Handbook was tentatively approved for the entire project in 2004. Final handbooks can be approved beyond the one year period that would otherwise apply per Nevada law. A specific basis for the City entering into the agreement was to assure a planned community that would include a mixture of residential products, business park facilities, common area, open space and the public facilities contemplated by the Tentatively Approved Handbook for Kiley Ranch North. For the owners and master developer, the agreement was intended to assure a degree of certainty for the duration of the build out the project, particularly as to approval processes and the law that applies. Kiley Ranch Communities’ bankruptcy put them in default of the Development Agreement and their subsequent loss of ownership of the property negated the need for this agreement with Kiley Ranch Communities. The City Attorney’s office sent written notice in 2012 to the Kayfam Corporation and Kiley Ranch Communities of the default and of the City’s intent to cancel the Development Agreement. The City Council’s approval and recording of the proposed ordinance will cancel the agreement. A separate ordinance, addressed in a companion City Council agenda item, has been prepared for a proposed replacement development agreement between the City and the new owners and master developer of a portion of the Kiley Ranch North property.
Alternatives: The City Council can defer the first reading of the ordinance or opt not to cancel the Development Agreement.
Recommended Motion: None
Attached Files:
(2004) Kiley North Development Agreement.pdf Ordinance to terminate 2004 Kiley North Dev Agreement 2-11-13 (2).pdf
