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HomeMy WebLinkAboutCVRC Agenda Packet 07/24/2008BOARD OF ANNUAL MEETING OF THE DIRECTORS CHULA VISTA REDEVELOPMENT CORPORATION (CVRC) Thursday, July 24, 2008, 5:00 — 6:00 P.M. Christopher H. Lewis, Chair Reception 6:00 — 7:30 p.m. Paul Desrochers, Vice Chair South Bay Fish & Grill Rafael Munoz = 570 Marina Parkway CHULA VISTA, CA 91910 Doug Paul Hector Reyes CALL TO ORDER Christopher Rooney ROLL CALL Salvador Salas, Jr. Directors Desrochers, Munoz, Paul, Reyes, Rooney, Salas, and Chair Lewis OFFICERS PLEDGE OF ALLEGIANCE, MOMENT OF SILENCE David R. Garcia, CEO 1. ELECTION OF CHAIR AND VICE CHAIR Maria Kachadoorian, CFO CONSENT CALENDAR Bart Miesfeld, General Counsel (Items 1) Eric C. Crockett, Secretary The CVRC will enact the Consent Calendar staff recommendations by one motion, without discussion, unless a CVRC Director, a member of the public, or City staff requests that an item be removed for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak" form (available in the lobby) and submit it to the City Clerk prior to the meeting. Items pulled from the Consent Calendar will be discussed immediately following the Consent Calendar. 2. WRITTEN COMMUNICATION A. Memorandum from Paul Desrochers requesting an excused absence from the CVRC meeting of June 12, 2008. B. Memorandum from Sal Salas requesting an excused absence from the CVRC meeting of July 24, 2008. Staff Recommendation: That the CVRC excuse the absences. • • PUBLIC COMMENTS Persons speaking during Public Comments may address the CVRC on any subject matter within the CVRC's jurisdiction that is not listed as an item on the agenda. State law generally prohibits the CVRC from taking action on any issue not included on the agenda, but, if appropriate, the CVRC may schedule the topic for future discussion or refer the matter to staff. Comments are limited to three minutes. 3. DISCUSSION ITEMS A. DISCUSSION OF DEVELOPER AND BROKER FORUM B. ANNUAL REDEVELOPMENT WORKPLAN ACTION ITEMS The item(s) listed in this section of the agenda will be considered individually by the CVRC, and is /are expected to elicit discussion and deliberation. If you wish to speak on any item, please fill out a "Request to Speak" form (available in the lobby) and submit it to the City Clerk prior to the meeting. None 4. CHIEF EXECUTIVE OFFICER'S REPORTS 5. CHAIRMAN'S REPORTS 6. DIRECTORS' COMMENTS ADJOURNMENT The Chula Vista Redevelopment Corporation will adjourn to their regularly scheduled meeting on August 14, 2008 at 6:00 p.m. "I un er ,,enalty of perjury that I am r !Ie City of Chula Vista in the peveioprnent Departmmont and that I posted on the Bulle m Board at the u _services Building and at City Hall on ., - ICINr✓ Materials provided to the Chula Vista Redevelopment Corporation related to any item on this agenda are available for public review in Redevelopment & Housing at 430 F Street, Chula Vista, CA, 91910 during normal business hours. In compliance with the AMERICANS WITH DISABILITIES ACT The Chula Vista Redevelopment Corporation requests individuals who require special accommodations to access, attend, and /or participate in a CVRC meeting, activity, or service request such accommodation at least forty -eight hours in advance for meetings and five days for scheduled services and activities. Please contact the Community Development Department for specific information at (619) 691- 5047, or Telecommunications Devices for the Deaf (TDD) at (619) 585 -5655. California Relay Service is also available for the hearing impaired. Page 2 of 2 CVRC — Agenda — July 24, 2008 • June 9, 2008 Paul Desrochers requesting an excused absence from the regularly scheduled CVRC meeting of June 12, 2008. as -� tC meeting of i 4 an CORPORATION ('�1L 1 A \ 1'TA DATE: July- 14, 2008 INFORMATIONAL MEMO TO: CVRC Board of Directors VIA: David Garcia, CEO /Executive Director t, FROM: Maria Kachadoorian, CFO /Treasurelk- SUBJECT: Standard & Poor's Credit upgrade for Redevelopment Agency As part of the refinancing of the 2000 Tax Allocation Bonds (TABS) during the past month, Finance and RDA staff provided updated financial information to Standards & Poors (S &P). Based on the positive trends in the Merged Chula Vista Redevelopment Project Area, the credit agency raised its underlying rating from A- to A. This increase of one investment grade reflects an improved outlook since 2000 for the Redevelopment Agency's outstanding TABS issued for the Merged Chula Vista Redevelopment Project Area (Otay Valley, Southwest, and Town Centre II). Per S &P's report (attached), the improved credit rating reflects the project area's continued growth, diversification, and strong debt coverage. The improved credit rating translated into significant interest rate savings for the recent Jule 10 refinancing of the 2000 TABS. Below is a summary about the refimancing: Interest rates locked on July 10 for the 2008 Bonds Bonds sold at a true interest cost of 4.75° o • Par Amount of Issue totaled $21,625,000 • Paid off $15,110,000 of 2000 Bonds which had an average rate of 5.3 %, plus a redemption premium of $370,000 • Raised $4,532,000 ($800,000 for Agenci- and $3,732,000 to repay the City- for prior loans) Balance of the bond proceeds used to fund a reserve fund ($1,540,000) and cover costs to issue the bonds, including the FSA bond insurance premium For more information or questions, please contact Maria Kachadoorian, CFO /Treasurer, at (619) 691 -5051. Summary: Chula vista Redevelopment Agency, California; Tax Increment Primary Credit Analyst: Paul Dyson, San Francisco (1; 415 - 371 -5079, paul_dyson@standardandpoors -con, Secondary Credit Analyst: Misty Newland, San Francisco (11415- 371 -5073; misty _newland @standardandpoors.com Table Of Contents Rationale Outlook www. standardandpoors .com /ratingsdirect Standard & Poor's- All rights reserved- No reprint or dissemination without S &P 's permission. See Terms of Use /Disclaimer on the last page 0 • Summary: Chula vista Redevelopment Agencv, California; Tax Increment USS21.22 mil Tax alloc rfdg bnds (Merged Redev Proj) ser 2008 due 09/01/2036 Long Term Rating A /Stable New Chula Vista Redev Agy 2000 Tax Increment (Merged Redev Proi) Unenhanced Rating A(SPUR) /Stable Upgraded Many issues are enhanced by bono insurance. Rationale Standard & Poor's Ratings Services raised its underlying rating (SPUR) to 'A' from 'A-' on the Chula Vista Redevelopment Agency, Calif.'s outstanding tax allocation bonds (TABS) issued for the merged project area. In addition, Standard & Poor's assigned its 'A' rating to the agency's series 2008 tax allocation refunding bonds, issued for the merged project area. The raised rating reflects the project area's continued strong growth and diversification. Average annual assessed valuation (AV) growth between fiscal 2004 and 2008 has been 24 %'), or a likewise robust 90ro, excluding additional AV related to the amended area added in fiscal 2006. In addition, concentration within the leading 10 taxpayers has declined, as they represent 28 of incremental AV, down from 37 1i0 in 2006 and 54 n 2000. Additional credit factors supporting the raised rating include • A large, primarily commercial, 2,576 -acre project area located in the City of Chula Vista, with convenient employment access to the Cite and Countv of San Diego; • Very strong coverage of maximum annual debt service (MADS) at 3.2x, given 2008 pledged revenues, and • Strong legal provisions with a 1.50x additional bonds test, and no current additional bonding plans. These strengths are offset by: • A moderate volatility ratio of 0.46, suggesting moderate sensitivity in tax increment revenues, due to fluctuations in total AV; and Increased AV appeal activity, although the maximum potential AV decline of 4% of incremental AV is manageable. Tax increment revenues from the agency's merged project area secure the bonds. The bonds are being issued to refund the agency's series 2000 tax allocation bonds, issued for the merged project area, and to fund generate S3.7 million in proceeds to pay a portion of a loan due to the city. Located eight miles south of San Diego and seven miles north of the Mexican border, Chula Vista is a rapidly growing city of about 224,000 as of 2007, up a strong 29% since just 2000. Population growth averaged 3.7% annually between 2000 and 2007. Although the city participates in the San Diego County '_VISA, its proximity to Standard & Poor's RatingsDirect I June 20, 2008 Standard & Poors all rights reserved- No reprint or dissemination without S &P 's permission. See Terms of Use , /Disclaimer on the lest page 2 • • Summary: Chula Vista Redevelopment Agency, California; Tax Increment Mexico also creates a strong economic link to nearby Tijuana, Mexico, as well as other border cities such as San Ysidro. In addition, the relatively more affordable real estate market in the cite versus areas to the north and west has made the area an attractive area for business and residential development. Median household and per capita buying income levels as of 2007 were 117% and 93% of the national averages, respectively. Chula Vista's 2005 unemployment rate averaged 5 %, below that of the state (5.3 %) and nation (5.2 %). The nearly built -out (94 %) project area is primarily commercial by AV (55 %), but also including a significant industrial component (25 %) with 14% of AV residential. The merged project area includes the city's major retail mall, as well as two other shopping centers in addition to many other major retail and office properties. Formed in August 2000 from the merger of three existing project areas, the merged project area had an initial AV of $596 million, and has since grown to $1.52 billion as of fiscal 2008. AV growth for the merged project area has been very strong, with an average annual growth rate of 24% between 2004 and 2008. The merged project area was amended in fiscal 2004 to include other properties within Chula Vista, the amendment area, with the AV increase of $471 million from this newly created project area in fiscal 2006. Excluding the addition of this area, AV growth has still been a strong, average 9% annually. As growth has occurred, concentration in ANA' among the 10 leading taxpayers has declined, and as of fiscal 2008, it accounted for a still moderately concentrated 28% of incremental AV, which is down from a moderate 37% in 2006 and 54% in 2000. The leading taxpayer, a 65 -acre regional shopping mall, accounted for 80//0 of 2008 incremental AV, down from 12% in 2006. A strong additional bonds test of 1.50x MADS and very strong current coverage somewhat offsets the concentration in the leading taxpayers. In addition, future growth prospects are good, with additional commercial development planned including retail, an auto dealership, and a large -scale commercial office space. Pledged revenues for fiscal 2008 cover MADS (under an extremely conservative no growth scenario) by 3.2x, with annual debt service coverage in 2014, when MADS occurs, assuming a 2 %, growth rate stronger at 3.8x. The base -to- incremental AV tax volatility ratio, a reflection of the rate at which tax allocation revenues would rise or decline with small changes in AV, measured 0.46 in fiscal 2008, also improving from 0.56 in 2006. There are several tax- sharing agreements with underlying taxing entities. A tax- sharing agreement with the counrn° will cause only a slight reduction in agency revenues in 2015. Each of the former project areas that formed the merged project area has a separate cumulative limit on the amount of tax increment that can be collected for the life of the project area. The agency has covenanted that it will not allow the aggregate amount of annual debt service remaining to exceed 95% of the aggregate amount of tax allocation revenues that the project area is permitted to receive. The agency currently has no additional bonding plans. Outlook The stable outlook reflects the expectation of continued very strong coverage of MADS, given no additional bonding plans, good growth prospects and given the project areas favorable location in southern San Diego County. Although appeal activity has increased, the maximum decline in AV appears manageable given the size of the tax base, strong coverage and the strong 1.50x additional bonds test. Complete ratings information is available to subscribers of RatingsDirect, the real -time Web -based source for Standard & Poor's credit ratings, research, and risk analysis, at www =.ratingsdirect.com. 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SB 343 provides that when a writing relating to an agenda item for an open session of a regular meeting of a legislative body is distributed less than 72 hours prior to that meeting, the writing shall be made available for public inspection upon request, without delay. In an effort to ensure your compliance with this new law, I suggest that you inform the board/commission members, as well as any staff that may distribute writings to the board/commission members of the new requirements. In addition, please request that they provide you with a copy of any and all documents and writings prior to the meeting. Agendas should also include language such as the following: "Materials provided to the [name of board/commission] related to any item on this agenda are available for public review in the [name of office] at [address] during normal business hours." You may continue to charge the standard photocopying fee for copies of these documents. I have attached the text of SB 343 for your reference. If you have any questions, please feel free to call me at extension 3006. 4 0 • BILL NUMBER: SB 343 CHAPTERED BILL TEXT CHAPTER 298 FILED WITH SECRETARY OF STATE OCTOBER 5, 2007 APPROVED BY GOVERNOR OCTOBER 5, 2007 PASSED THE SENATE AUGUST 30, 2007 PASSED THE ASSEMBLY AUGUST 27, 2007 AMENDED IN ASSEMBLY JUNE 21, 2007 AMENDED IN SENATE MAY 25, 2007 AMENDED IN SENATE APRIL, 9, 2007 AMENDED IN SENATE MARCH 27, 2007 INTRODUCED BY Senator Negrete McLeod (Coauthor: Assembly Member Jones) FEBRUARY 20, 2007 An act to amend Section 54957.5 of the Government Code, relating to local agencies. LEGISLATIVE COUNSEL'S DIGEST SB 343, Negrete McLeod. Local agencies: open meetings: documents. The Ralph M. Brown Act requires that any meeting of a legislative body of a local agency be open and public and all persons be permitted to attend. The act requires the body to post an agenda at least 72 hours before a regular meeting and provides that agendas and any other writings, when distributed to all, or a majority of all, of the members of a legislative body of a local agency by any person in connection with a matter subject to discussion or consideration at a meeting of the body are public records subject to the public disclosure requirements of the California Public Records Act. This bill would provide that if a writing that is a public record under these provisions, and that relates to an agenda item for an open session of a regular meeting of the legislative body of a local agency, is distributed less than 72 hours prior to that meeting, the writing shall be made available for public inspection at a public office or location that the agency shall designate for this purpose. It would require each local agency to list the address of this office or location on the agendas for all meetings of the legislative body of that agency. It also would authorize a local agency to post a writing that is a public record under these provisions on the agency's Internet Web site. It would make these provisions effective on July 1, 2008. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 54957.5 of the Government Code is amended to read: 54957.5. (a) Notwithstanding Section 6255 or any other provisions of law, agendas of public ,K meetings and any other writings, when distributed to all, or a majority of all, of the members of a legislative body of a local agency by any person in connection with a matter subject to discussion or consideration at an open meeting of the body, are disclosable public records under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and shall be made available upon request without delay. However, this section shall not include any writing exempt from public disclosure under Section 6253.5, 6254, 6254.3, 6254.7, 6254.15, 6254.16, or 6254.22. (b) (1) If a writing that is a public record under subdivision (a), and that relates to an agenda item for an open session of a regular meeting of the legislative body of a local agency, is distributed less than 72 hours prior to that meeting, the writing shall be made available for public inspection pursuant to paragraph (2) at the time the writing is distributed to all, or a majority of all, of the members of the body. (2) A local agency shall make any writing described in paragraph (1) available for public inspection at a public office or location that the agency shall designate for. this purpose. Each local agency shall list the address of this office or location on the agendas for all meetings of the legislative body of that agency. The local agency also may post the writing on the local agency's Internet Web site in a position and manner that makes it clear that the writing relates to an agenda item for an upcoming meeting. (3) This subdivision shall become operative on July 1, 2008. (c) Writings that are public records under subdivision (a) and that are distributed during a public meeting shall be made available for public inspection at the meeting if prepared by the local agency or a member of its legislative body, or after the meeting if prepared by some other person. These writings shall be made available in appropriate alternative formats upon request by a person with a disability, as required by Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in implementation thereof. (d) Nothing in this chapter shall be construed to prevent the legislative body of a local agency from charging a fee or deposit for a copy of a public record pursuant to Section 6253, except that no surcharge shall be imposed on persons with disabilities in violation of Section 202 of the Americans with Disabilities Act of 1990 (42U.S.C. Sec. 12132), and the federal rules and regulations adopted in implementation thereof. (e) This section shall not be construed to limit or delay the public's right to inspect or obtain a copy of any record required to be disclosed under the requirements of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1). Nothing in this chapter shall be construed to require a legislative body of a local agency to place any paid advertisement or any other paid notice in any publication. ,.