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Agreements pave way for UC Merced 2020 Project, other developments

Mike Conway

Post Date:06/23/2016

Last local hurdle finished for UC Merced 2020 Project  

The last milestone on a long regulatory roadway to expand the next development phase of the UC Merced campus and surrounding area to development has been passed.

With the unanimous approval of the Out of Boundary Service Agreement with UC Merced last week by the Local Agency Formation Commission of Merced County (LAFCO) there are no local regulatory hurdles left for UC Merced to overcome before the 2020 Project can proceed.

'It's been a long process, but a rewarding one for the citizens of Merced that will have many benefits for years to come,' said Senior Deputy City Attorney Ken Rozell.

The documents include the Out of Boundary Service Agreement with LAFCO, the Annexation agreement with UC Merced and the tentative Revenue Sharing Agreement with Merced County.

The Out of Boundary Service Agreement approved June 14 allows the City of Merced to provide sewer and water service to the expanded campus area served as part of UC Merced's 2020 Project. The City was already providing those services to the existing campus.

The 2020 Project adds 117 acres to the 102 acre campus and allows it to nearly double in physical capacity by 2020 and grow to 10,000 students shortly thereafter. The university announced last week that it has selected Plenary Properties Merced to oversee the design, engineering, construction, financing, operations and maintenance of the campus expansion.

Before LAFCO would approve the Service Agreement the university needed to sign an Annexation Agreement with the City. In the document signed June 10 by UC Merced Chancellor Dorothy Leland the university agrees to allow the City to annex the new additions to the campus into the City at a later date.

Currently the City limits are more than 2 miles from the campus so any annexation will be a few years away. State law requires annexations to be orderly and not leave unincorporated islands between incorporated lands.

Property owners are usually responsible for initiating the annexation process. There are some landowners who have expressed an interest building near UC Merced, including a developer who wants to construct a 1,000 unit apartment complex opposite the campus. In order to connect to City sewer and water systems, the developer would need to annex his property to the City.

One regulatory piece needed by that developer, Southern California-based AMCAL, was the recently announced revenue sharing agreement between the City and Merced County. The tax sharing agreement has been tentatively agreed upon by the two sides and draft language is being shared by the two sides.

Under state law a revenue sharing agreement must be in place before any land can be annexed into the City. Because the UC campus is state-owned, it doesn't pay property taxes to the City or County, but other developments will pay taxes to help cover the costs of services such as police, fire and recreation provided once they are in the City.

In the case of developers located by the UC Merced campus, and elsewhere, in order to build they need:

  • To get sewer and water connections so that they have utility services for customers.

  • To get sewer and water connections they need to be inside the City limits.

  • To be inside the City limits they need to annex.

  • To annex they must have other annexed properties around them so they have a continuous boundary to the existing city limit and don't create county islands.

  • To have any properties annexed the property needs to be part of a revenue sharing agreement.

Once those steps are taken, a property owner can begins the process to develop land the same as any other landowner in the City.

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