Hemet council conditionally approves reassignment of subdivision improvement agreement for Parcel Map 36566

The Hemet City Council voted 5-0 on May 27 to conditionally approve the assignment of a subdivision improvement agreement for Parcel Map 36566 from Frontier California Inc. to the Simon Chu and Kiki Chu Family Trust, with new security requirements and an updated city cost estimate.

City staff described the unfinished public improvements tied to the agreement as six street lights; installation of 1,143 square feet of landscaping and irrigation; removal and replacement of a 60-square-foot curb ramp; and removal and replacement of 1,549 square feet of driveway approaches. Deputy public works director Jolene Ferris said the owner wants to sell one parcel and the buyer has supplied new bonds and requested to assume the existing agreement.

Council members pressed staff and the city attorney on the best forms of security, citing the requestor's track record on completing prior work. The council adopted a motion that conditions the assignment on submission, within 30 days, of an updated engineer's estimate and security in a form approved by the city attorney: either an irrevocable letter of credit from a financial institution approved by the city attorney or a cash deposit to the city or an escrow company approved by the city. The motion also authorizes the city engineer, in their reasonable discretion, to increase the estimate and require additional security later if costs escalate or improvements remain incomplete.

Council members said the city must be able to complete any unfinished work using the security if the party on the hook fails to do so. The city attorney described five common security types (surety bonds, cash, letters of credit, liens, or other acceptable instruments) and said the council may require cash or irrevocable letters of credit based on the facts of this case.

The original agreement's deadline was described as a two-year term from February, with an expected completion date in October 2026. Staff and council noted that construction costs have risen since the original estimate and recommended a new engineer's estimate before finalizing the assignment.

The motion to conditionally approve the assignment passed unanimously, 5-0.

The action directs staff to (1) obtain a new city engineer cost estimate within 30 days, (2) accept security in the form of an irrevocable letter of credit or cash deposit in an amount not to exceed 100% of that new estimate, and (3) retain authority for the city engineer to require additional security if the estimate proves insufficient.