HomeMy WebLinkAboutAgenda Statement 1985/07/02 Item 15 COUNCIL AGENDA STATEMENT
Item 15
Meeting Date 7/2/85
EM TITLE: Resolution 42-07/Authorizing the issuance of $3 million principal amount
of bonds of the City of Chula Vista to provide financing for commercial
facilities to be developed by Home Depot, Inc.
BMITTED BY: Community Development Director- (4/5ths Vote: Yes No X )
:VIEWED BY: City Manager g/
is the opinion of our bond counsel , Jones Hall Hill & White, that the proposed bond
sue for the Home Depot project, located at I-805 and H Street, should be judicially
lidated in the San Diego County Superior Court under Sections 860 and following
.ctions of the Civil Procedure Code. These sections require that the validation pro-
!eding be filed within 60 days following the authorization of bonds. The attached
!solution authorizes the issuance of bonds, and is therefore the necessary first step
swards the validation proceedings which will take from 45 to 60 days to complete.
ice all the financing documents are in final form, they will be returned to the City
â–ºuncil for review, public hearing, and final approval . The sole purpose of the
;tached resolution is to permit the initiation of the validation so that further pro-
!ssing of the bond documents may proceed.
:COMMENDATION: That the City Council approve the resolution authorizing the issuance
$3 million principal amount of bonds of the City of Chula Vista to provide financing
it commercial facilities to be developed by the Home Depot, Inc.
)ARDS/COMMISSIONS RECOMMENDATION: On March 21, 1985, the City Council approved an
iducement resolution for the Home Depot for $2.5 million. This amount was increased
$3 million at the City Council meeting of May 7, 1985.
[SCUSSION:
)me Depot wishes to finance its proposed project through the issuance of tax exempt
idustrial revenue bonds under the City's procedural ordinance (Chapter 3.48 of the
anicipal Code) . This financing can only be done under this chapter because the pro-
?ct is not located within a redevelopment project area which would permit the Rede-
elopment Agency to undertake the financing under the Community Redevelopment Law.
ince this project is not a manufacturing facility, it cannot be financed under the
athority of the California Industrial Development Financing Authority law.
]though the City has previously issued industrial revenue bonds under Chapter 3.48
Dr Bay General Hospital and for the surgical center, the Home Depot financing would
e the first "commercial" project under this chapter. Bond Counsel in California has
raditionally required that commercial or industrial financing under Charter City pro-
edural ordinances be validated in Superior Court. The Bay General and surgical center
inancings were not validated because they were health facilities and clearly authorized
or Charter City action. Since Home Depot is a commercial facility, bond counsel
trongly recommends that the City validate the bonds at this time.
by the Ci:y of
Chula Vista, California
A-113 (Rev. 11/79 Dated
Page 2, Item 15
Meeting Date 7/2/85
FINANCIAL IMPACT:
The City of Chula Vista has been authorized to issue up to $4,649,000 in private
activity bonds for 1985. The Home Depot project will use $3 million of that
capacity.
The City receives a fee of one-eighth of one percent for the issuance of industrial/
commercial development bonds. The proposed $3 million bond issue would result in
fees to the City totaling $3,750.
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