HomeMy WebLinkAboutReso 2015-289 RESOLUTION NO. 201�-289
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AI�' OVVNER PARTICIPATIOI�'
AGREEMEI�'T BETN'EEI�' THE CITY AND SUT�iROAD BCV
HOLDII�'G. INC. OR AI�' AFFILIATE: h4AKII`'G CERTAII�'
FII�iDINGS II�T CONI�TECTIOI�T THEREWITH: AI�'D
AUTHORIZING THE E�iECUTION AI�'D IA7PLEA4EI�TTATIOI�'
OF SAID OWI�'ER P.ARTICIPATIOI�' AGREEA4E\'T
�1'HEREAS, the City of Chula Vista ("Citv') is a Califomia municipal corporation and
charter cit��: and
WHEREAS; the City wishes to facilitate and ensure the opening and continued operation
of a ne�v BM�I' automobile dealership (collecti��elv, the "Appro��ed Dealership`) in the Cih� for
at least t���ent}� (20) }�eazs; and
V�'HEREAS, Sunroad BCV Holdina. Inc. (the "Participanr`) is a California corporation
qualified to do business in the State of Califomia; and
WHEREAS, the Participant (or an affiliate) o��ms approximately 3.8� acres of vacant real
propeny; ��hich is located alons the southerl}� side of Main Street, east of Brand}Rti�ine A��enue
and �i�est of MasH-ell Road, ti�ithin the City (the "Site`); and
V�'HEREAS. ihe Site is located �ti�ithin the Chula Vista Auto Mall East. ��hich �i�as
planned as an auto mall in the eazly 1990's and at the time ���as anticipated to be a full}�
developed and operating auto mall within ]0 years; and
�'HEREAS, ��arious em�ironmental conditions and economic obstades prevented the
de�elopment of portions of the Chula Vista Auto Mall East. includine the Site, for many }�eazs;
and
l�'HEREAS. the Participant (or its affilia[e) acquired the Site as part of a larger 29 acre
parcel in 2004 and subsequently developed another portion of that lazger pazcel ���ith a To��ota
dealership in 2006; the To��ota dealership continues to operate in the Citv; and
WHEREAS; Citv and Participant desire for Panicipant to open and operate an Approved
Dealership at the Site and for Participant to convey an Operating Covenant to the Citv
committing the Participant to continue operation of the Appro��ed Dealership for a period of at
least 20 vears: and
Resolution No. 2015-289
Paae No. 2
WHEREAS, operation of the Approved Dealership at the Site will provide the following
benefits to the City and the communit}�:
l. The development of a BMW dealership is estimated to increase the
assessed valuation of the site by approximately $13 million over the current value of
approximately $1,182,327 increasing property tax revenues to the City and other local taxing
agencies by appro�imately 92 percent at full implementation of the project;
2. The operation of the BMW dealership will provide 40 full time
(temporary) construction jobs, 80 permanent full time operational positions and 3 part-time
operational positions;
3. The operation of the BMW dealership over the 20 year period of the
operating covenant is estimated to generate approximately $1.2 billion in taxable sales;
4. The net sales tax to the city over the 20 year period of the operating
covenant is estimated to be approximately $6 million in new revenue to the general fund;
5. The reno��ation of the Improvements at the Site and the operation of the
Approved Dealership at the Sife are anticipated to increase the property values and revitalize the
neighborhood surrounding the Site, by drawing consumers and employees to the area, thereby
stimulating the local economy;
6. The City anticipates that the operation of the Approved Dea]ership at the
Site will help to foster a business and civic environment that will attract additional businesses
and investment in the community due to the increased public and private services resulting from
the generation of jobs, tax revenues, and consumers in the City and the area surrounding the Site;
and
WHEREAS, the City desires to enter into an Owner Participation Agreement (the
"OPA") with the Participant to purchase an Operating Covenant for the operation of the
Approved Dealership at the Site for a period of 20 years for an Operating Covenant Purchase
Price of up to $33 million, to be paid over the course of the Operating Covenant Period in an
annual amount equal to fifry percent of the net Sales and Use Tax revenues actually received by
the City from the operation of the Approved Dealership at the Site; and
WHEREAS, initially capitalized terms used in this Reso]ution without definition shall
have the meanings set forth in the OPA; and
WHEREAS, City has authority to enter into the OPA and provide the Operating
Covenant Purchase Price pursuant to Govemment Code Sections 52200, et seq. and the Charter
of the City of Chula Vista; and
Resolution?�o. ZO1�-289
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R�l-IEREAS. the Cin� (i) made the information required by Go��emment Code Section
�3083(a) a��ailable to the public in Nritten form and on the Cin`s website and (ii) held a noticed
public hearing reearding the OPA and Cit��'s obligation therein to pay the Operating Covenant
Purchase Price as required b} Go��emment Code Section �3083(b); and
�'HEREAS, on June 1. 2004 the Cin� adopted a Mitigated Nesative Declazation (IS-02-
O10) for the Auto Park East project and specific plan. including all future dealership-specific
projects; and
W7-IEREAS. the Cit� has dul}� considered all terms and conditions of the proposed OP.A
and belie�es that de��elopment of the Site and operation of the Approved Dealership thereon
pursuant to the OPA is in the vital and best interest of the Cit�� and the health, safet��. morals, and
�aelfaze of its residents. and in accord H�ith the public purposes and provisions of applicable
requirements of State and local laH�.
NO�I', THEREFORE. BE IT RESOLVED b�� the Cit�� Council oF the Citv of Chula
Vista. as follo��s:
1. The Cit�� Council herebv finds and determines that the recitals set forth above aze true
and correct and aze incorporated herein by reference as if set forth in full.
2. 77�e Cit�� Council hereb}� finds and determines, based upon substantial e��idence provided
in the record before it, that (a) the OPA is an agreement that N711 increase propem� tax
re��enues to all propem tax collectine entities b�� at least 15 percent at full
implementation and operation of the Dealership when compazed to the ��ear prior to the
execution of the OPA; (b) implementation of the OPA ���ill promote the public peace.
health; safetv. and welfare of the Cit�� of Chula Vista and its residents_ (c) the Operatine
Co��enant Purchase Price is reasonabl}� necessar}� to induce and ensure the openine and
operation of the Appro��ed Dealership; and (d) the Approved Dealership is projected to
eenerate appro�imatel�� �1.2 billion in ta�able sales over the course of the 20 vear
Operatine Period.
3. The City Council hereb�� finds and determines; based upon substantial e��idence pro��ided
in the record before it, that the Cit��, as lead agency, has complied ���ith the applicable
requirements of the Califomia Environmental Qualit�� Act (`CEQA") H�ith respect to the
approval of the OPA. The environmental impacts of the Chula Vista Auto Park East
were evaluated in the previously adopted D4itigated Negative Declaration IS-02-010 for
the Auto Pazk East project and specific plan. I�'o additional CEQA findings are required
at this time because the OPA does not approve an�� specific development, but rather is a
eo��emment funding mechanism and fiscal activity that does not invol��e an�� commitment
to anv specific project which may result in a potentialh� si�nificant physical impact on the
em�ironment ��ithin the meaning of Section 1�378(b)(�) of the CEQA Guidelines.
Chapter 3 of Title 14 of the Califomia Code of Regulations; therefore appro��al of the
OPA does not constitute approval of a "projecr` under CEQA. The de��elopment of the
Appro��ed Dealership �vill be subject to compliance with all federal, state and local la�vs,
inciudine the Chula Vista n4unicipal Code and CEQA. prior to approval of entitlements
or issuance of permits b�� the Cin-.
Resolution No. ZO]5-289
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4. The City Council hereby finds and determines, based upon substantial evidence provided
in the record before it, that the development, opening and operation of the Approved
Dealership will be of material benefit to the City and to the citizens of, and property
owners in, the City and surrounding areas, because the construction and operation of the
Approved Dealership ��ill encourage and foster the economic revitalization of the City
for the people in the area and the general public as a whole; increase property tax
available to the City and other taxing agencies; increase sales tas revenues available to
the City; and create jobs within the Cit}�.
5. That the City Council hereby approves the Owner Participation A�;reement between the
Cit}� and Sunroad BCV Holding Ina (or an affiliate), in the form presented, with such
minor modifications as ma}� be required or approved by the City Attorney; a copy of
which shall be kept on file in the Office of the City Clerk, and authorizes and directs the
Mayor to execute same." The City Manager and his authorized designees are authorized
to take such actions as may be necessary or appropriate to implement the OPA, including
executing further instruments and agreements, issuing warrants, and taking other
appropriate actions to perform the obligations and eaercise the riohts of the Citt- under
the OPA.
Presented by Approved as to form by
� `
ric C. Crockett len . oogins
Director of Economic Development � Atto ey
Resolution No. 201�-289
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PASSED. APPROVED. and ADOPTED bv the Cit�� Council of the Cit�� of Chula Vista.
Califomia. this 1�th dav of December 201� bv the followine ��ote:
AYES: Councilmembers: Aeuilar. Bensoussan. McCann. and Salas
NAYS: Councilmembers: None
ABSE?�'T: Councilmembers: Miesen
�,(,�
A4ar}� las, A4a}�or
ATTEST:
/ �
Donna R. Noms. Cn . Citv Clerk
STATE OF CALIFORi\'IA )
COUI`TTY OF SAN DIEGO )
CITY OF CHULA VISTA )
L Donna R. Norris; Cit�� Clerk of Chula Vista, Califomia. do hereby certify that the foregoing
Resolution No. 201�-289 was duh� passed, appro��ed, and adopted by the Cit}� Council at a
reeulaz meetine of the Chula Vista Citv Council held on the 1�th da�= of December 201�.
Executed this 1�th dar of December 201�.
� �'!��
Donna R. Noms. MC. Citv �lerk