TO: LINDA REICH, CITY MANAGER
FROM: WARREN MORELION, AICP, DEVELOPMENT SERVICES DIRECTOR
SUBJECT
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Public Improvement Agreement with CarMax Auto Superstores, Inc.
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RECOMMENDATION
Approve a Public Improvement Agreement with CarMax Auto Superstores, Inc. for the CarMax Vehicle Wholesale Auction Facility located at 11708 East End Avenue; and authorize the City Manager to execute all the necessary documents on behalf of the City.
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FISCAL IMPACT
The property owner will be required to pay the City’s Sewer Service Charge, the Sewer Facilities Development Fee (a pass-through fee to the Inland Empire Utilities Agency), and Sewer Development Impact Fees as applicable.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above will further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Responsible Long-Range Planning
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BACKGROUND
Chino East End Industrial, LLC (“Developer”) submitted its application to the County of San Bernardino (“County”) to develop existing parcels (APNs: 1013-271-01 and 1013-261-17) for the future construction of a CarMax Vehicle Wholesale Auction Facility (“Project”) in the Light Industrial General Plan land-use designation zone. The Project, located at 11708 East End Avenue, was within the City’s Sphere of Influence (“SOI”) prior to its annexation into the City in October 2024, as shown in Exhibit A.
At the Developer’s request, the City analyzed the existing sewer facilities contiguous to the subject property that could potentially provide sanitary sewer service to the Project. The City requested that the Developer provide a sewer study to ensure that the 8-inch sewer main in East End (fronting the proposed development) is adequate to handle the additional flows generated from the subject property, and the tributary properties that will connect to the sewer line in East End Avenue in the future. The analysis also evaluated the proposed point of connection and determined that no system deficiencies or needed improvements to up-size downstream facilities for the purpose of taking on the additional flows is necessitated by the proposed development.
ISSUES/ANALYSIS
The Developer requested the Sewer “As-Built” Drawings from the City and submitted a revised plan to incorporate a new sewer lateral connection for the Project. Construction then began after the Developer secured an encroachment permit from the City. During excavation, significant utility conflicts were identified, primarily due to insufficient vertical clearances. As a result, the Developer submitted a revised design to reconstruct a section of the existing sewer line along East End Avenue to avoid the existing utility conflicts. Due to the expanded scope of work within the City's right-of-way, execution of a Public Improvement Agreement (PIA) and the posting of securities is required.
CarMax Auto Superstores has a leasehold interest in the property with the Developer. CarMax Auto Superstores intends to develop the Property for use as a wholesale auction. The attached letter (Exhibit B) serves as an authorization for CarMax Auto Superstores to sign, obtain any permits, and pay all fees as necessary to develop the Project on the Property during the term of its lease. The foregoing authorization includes the ability to enter into ancillary documents with the City and/or provide security for the completion of improvements, including, without limitation, entering into a public improvement agreement with the City for the completion of work relating to the Project. CarMax Auto Superstores shall remain solely responsible for all obligations under such agreements and permits, all as subject to CarMax Auto Superstores' leasehold interest, and such obligations and agreements shall not otherwise burden or be binding on the Developer or the property.
CarMax Auto Superstores has provided the required performance and labor/material bonds and will furnish a warranty bond upon final acceptance by the City Council. All costs associated with the public improvements are borne by the leaseholder, CarMax Auto Superstores.
Additionally, the project was not conditioned under the City's entitlement authority but falls under the jurisdiction of the County. The only public infrastructure improvements subject to the City's engineering oversight are the sewer system modifications. All other off-site improvements required as conditions of approval will be administered and facilitated by the County.
Attachments: Exhibit A - Location Map
Exhibit B - Authorization Letter
Exhibit C - Public Improvement Agreement