HomeMy WebLinkAboutAgenda Packet 2018_05_15May 15, 2018City Council Agenda
PRESENTATION REGARDING TEDx CHULA VISTA BY
L INCOLN ANTWON LORMEN, CHULA VISTA
ELEMENTARY SCHOOL
18-0197C.18-0197
PRESENTATION REGARDING THE SAN DIEGO AIRPORT
AUTHORITY BY IMPERIAL BEACH COUNCILMEMBER
MARK WEST
18-0199D.18-0199
CONSENT CALENDAR (Items 1 - 14)
The Council will enact the Consent Calendar staff recommendations by one motion, without
discussion, unless a Councilmember, a member of the public, or 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.
APPROVAL OF MINUTES of January 16 and 23, 2018.18-01701.18-0170
Council approve the minutes. Staff Recommendation:
WRITTEN COMMUNICATIONS
Letter of resignation from Thomas Doyle, Citizens’ Oversight
Committee
18-02102.18-0210
Council accept the resignation. Staff Recommendation:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AGREEMENTS WITH IBI
GROUP, INC., ITERIS, INC., KIMLEY-HORN AND
ASSOCIATES, INC., AND STC TRAFFIC, INC. TO PROVIDE
ON-CALL TRAFFIC ENGINEERING & INTELLIGENT
TRANSPORTATION SYSTEMS (ITS) CONSULTING
SERVICES FOR VARIOUS CAPITAL IMPROVEMENT
PROGRAM PROJECTS AND OTHER CITY PROJECTS
17-05543.17-0554
Engineering Department Department:
The Project qualifies for a Class 1 Categorical Exemption pursuant to
Section 15301 (Existing Facilities) of the California Environmental
Quality Act State Guidelines.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
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May 15, 2018City Council Agenda
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE GRANT APPLICATION FOR
THE SMART GROWTH INCENTIVE PROGRAM - CYCLE 4
THROUGH THE SAN DIEGO ASSOCIATION OF
GOVERNMENTS FOR PHASE 3 OF THE THIRD AVENUE
STREETSCAPE PROJECT FROM F STREET TO E
STREET, AND STATING THE CITY’S ASSURANCE TO
COMPLETE THE PROJECT
18-01564.18-0156
Engineering Department Department:
The Project was adequately covered in previously adopted/certified
Final Environmental Impact Report, FEIR-06-01 for the Chula Vista
Urban Core Specific Plan (UCSP) and any and all addenda and
amendments.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING BIDS AND AWARDING A
CONTRACT FOR “TRAFFIC SIGNAL SYSTEM
IMPROVEMENTS ALONG EAST H STREET, OTAY LAKES
ROAD, AND TELEGRAPH CANYON ROAD FOR CAPITAL
IMPROVEMENT PROJECT (CIP) TRF0389” TO SELECT
ELECTRIC INC. IN THE AMOUNT OF $584,557; AND
APPROPRIATING $220,000 FROM THE AVAILABLE
BALANCE OF THE TRANSPORTATION DEVELOPMENT
IMPACT FEE (TDIF) FUND TO TRF0389 (4/5 VOTE
REQUIRED)
18-01475.18-0147
Engineering Department Department:
The Project qualifies for a Class 1 Categorical Exemption pursuant to
Section 15301 (Existing Facilities) of the California Environmental
Quality Act State Guidelines.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
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May 15, 2018City Council Agenda
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING VARIOUS AMENDMENTS TO
THE FISCAL YEAR 2017-2018 CAPITAL IMPROVEMENT
PROGRAM BUDGETS AND APPROPRIATING FUNDS
THEREFOR (4/5 VOTE REQUIRED)
18-01666.18-0166
Engineering Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c) (3) no environmental
review is required. Notwithstanding the foregoing, the activity qualifies
for an Exemption pursuant to Section 15061(b) (3) of the California
Environmental Quality Act State Guidelines.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ORDERING THE SUMMARY VACATION OF
AN IRREVOCABLE OFFER OF DEDICATION FOR PUBLIC
PARK PURPOSES OF A PORTION OF LOT “A” PER FINAL
MAP NO. 16094, CHULA VISTA TRACT NO. 11-05, OTAY
RANCH VILLAGE 2 NORTH NEIGHBORHOOD
R-10B/PIPELINE (“V2N”)
18-00427.18-0042
Development Services Department Department:
The Project was adequately covered in previously certified Final
Second Tier Environmental Impact Report, EIR 02-02 and Final
Supplemental Environmental Impact Report, SEIR 12-01 for the Otay
Ranch Village Two Sectional Planning Area (SPA) Plan .
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
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May 15, 2018City Council Agenda
A. RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING A JOINT USE AGREEMENT
BETWEEN THE CITY OF SAN DIEGO AND THE CITY OF
CHULA VISTA FOR THE COLOCATION OF A CITY OF SAN
DIEGO WATERLINE WITHIN THE JOINT USE AREA
LOCATED IN PORTIONS OF SANTA DIANA ROAD, SANTA
VICTORIA ROAD AND THE FUTURE ORTEGA STREET IN
THE OTAY RANCH VILLAGE 2 COMMUNITY AND
AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE
TO EXECUTE THE AGREEMENT
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING A JOINT USE AGREEMENT
BETWEEN THE CITY OF SAN DIEGO AND THE CITY OF
CHULA VISTA FOR THE COLOCATION OF A CITY OF SAN
DIEGO WATERLINE WITHIN THE JOINT USE AREA
LOCATED IN PORTIONS OF OLYMPIC PARKWAY, LA
MEDIA ROAD, OTAY VALLEY ROAD AND ALL TO BE
CONSTRUCTED AND NAMED STREETS IN THE OTAY
RANCH VILLAGE 2, VILLAGE 8 WEST, AND VILLAGE 9
COMMUNITIES AND AUTHORIZING THE CITY MANAGER
OR HIS DESIGNEE TO EXECUTE THE AGREEMENT
18-01428.18-0142
Development Services Department Department:
The Project was adequately covered in previously certified Final
Second Tier Environmental Impact Report (EIR 02-02) and Final
Supplemental Environmental Impact Report (SEIR 12-01) for the Otay
Ranch Village Two Sectional Planning Area (SPA) Plan and Tentative
Map; Final Environmental Impact Report (EIR 10-03) for the Otay Ranch
Village 8 West SPA Plan and Tentative Map; and Final Environmental
Impact Report (EIR 10-04) for the Otay Ranch Village 9 SPA Plan and
Tentative Map.
Environmental Notice:
Council adopt the resolutions. Staff Recommendation:
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May 15, 2018City Council Agenda
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA (1) APPROVING THE 2018/2019 U.S.
DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT ANNUAL ACTION PLAN FOR THE
COMMUNITY DEVELOPMENT BLOCK GRANT, HOME
INVESTMENT PARTNERSHIPS ACT GRANT AND THE
EMERGENCY SOLUTIONS GRANT; (2) AUTHORIZING
THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE
AGREEMENTS WITH EACH SUBRECIPIENT; AND (3)
AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE
TO EXECUTE ANY AND ALL HUD DOCUMENTS RELATED
TO THE GRANTS
18-01539.18-0153
Development Services Department Department:
The Development Services Director has reviewed the proposed
activities for compliance with the California Environmental Quality Act
(CEQA) and National Environmental Policy Act (NEPA). The proposed
activities, with the exception of six, are public services and are not
considered "Projects" as defined under Section 15378(b)(5) of the
State CEQA Guidelines because the proposals consist of a reporting
action, is not for a site specific project(s) and will not result in a direct or
indirect physical change in the environment.
The capital improvement projects are categorically excluded under
NEPA pursuant to 24 CFR 58.35 (a)(1). These projects are also
exempt from CEQA pursuant to §15060(c)(3). The activities will not
affect density or land use and will have no significant effect on the
environment. This item does not include a specific housing
development project. Once an affordable housing project has been
defined, environmental review will be required and a CEQA/NEPA
determination completed prior to initiation of any related project activity.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
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May 15, 2018City Council Agenda
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AND THE HOUSING AUTHORITY (IN ITS
CAPACITY AS THE SUCCESSOR HOUSING ENTITY) (1)
APPROVING A LOAN OF UP TO $858,740 FOR LAND
ACQUISITION AND PRE-DEVELOPMENT EXPENSES AND
$1,036,425 FOR CONSTRUCTION-RELATED COSTS
USING HOME INVESTMENT PARTNERSHIP ACT FUNDS
FROM THE UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT TO WAKELAND HOUSING
AND DEVELOPMENT CORPORATION OR AN AFFILIATED
DEVELOPMENT ENTITY ("DEVELOPER") FOR A NEW
DEVELOPMENT TO BE LOCATED AT 748, 750-752, AND
754-760 ANITA STREET; (2) AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO NEGOTIATE A FIRST
AMENDMENT TO THE EXISTING LOAN DOCUMENTS
FOR 750-752 AND 754-760 ANITA STREET TO
INCORPORATE 748 ANITA STREET, AND EXECUTE ALL
DOCUMENTS RELATED TO THE LOAN AND THE
ACQUISITION AND DEVELOPMENT OF THE ADDITIONAL
SITE; (3) AUTHORIZING THE CITY MANAGER OR HIS
DESIGNEE TO NEGOTIATE AND EXECUTE ALL HOME
INVESTMENT PARTNERSHIP ACT DOCUMENTS
RELATED TO THE HOME LOAN; AND (4)
APPROPRIATING FUNDS IN THE 2017/2018 BUDGET
THEREFOR (4/5 VOTE REQUIRED)
18-018610.18-0186
Development Services Department Department:
The Director of Development Services has reviewed the proposed
Project for compliance with the California Environmental Quality Act
(CEQA) and has determined that the Project qualifies for a Class 32
infill development categorical exemption (15332) for new residential
units on residential property consistent with the Residential Apartment
(R-3) zoning designation, therefore no further environmental review or
documentation is required.
The City’s federal HOME funds from the United States Department of
Housing and Urban Development (HUD) funds will also be a source of
financial assistance. Therefore, as required by the federal entitlement
funds, the project must also be reviewed under the National
Environmental Protection Act (“NEPA”). Funding of the loan will be
conditioned upon the completion of all required review under NEPA.
Environmental Notice:
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May 15, 2018City Council Agenda
Council/Authority adopt the resolution. Staff Recommendation:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $155,967 FROM THE U.S.
DEPARTMENT OF HOMELAND SECURITY AND
APPROPRIATING $77,983 TO THE POLICE GRANTS
SECTION OF THE FEDERAL GRANTS FUND FOR THE
STATE HOMELAND SECURITY PROGRAM (4/5 VOTE
REQUIRED)
18-017711.18-0177
Police Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
C HULA VISTA ACCEPTING $6,007 FROM THE
CALIFORNIA GOVERNOR’S OFFICE OF EMERGENCY
SERVICES AND APPROPRIATING SAID FUNDS TO THE
POLICE GRANTS SECTION OF THE FEDERAL GRANTS
FUND FOR THE COVERDELL FORENSIC SCIENCE
IMPROVEMENT PROGRAM (4/5 VOTE REQUIRED)
18-017812.18-0178
Police Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $225,000 FROM THE U.S.
DEPARTMENT OF HOMELAND SECURITY AND
APPROPRIATING $25,363 TO THE POLICE GRANTS
SECTIONS OF THE FEDERAL GRANT FUND FOR
OPERATION STONEGARDEN (4/5 VOTE REQUIRED)
18-017913.18-0179
Police Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
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May 15, 2018City Council Agenda
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $81,378 FROM THE COUNTY
OF SAN DIEGO AND APPROPRIATING SAID FUNDS TO
THE POLICE GRANTS SECTIONS OF THE FEDERAL
GRANTS FUND FOR REALIGNMENT RESPONSE
EFFORTS (4/5 VOTE REQUIRED)
18-018014.18-0180
Police Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
ITEMS REMOVED FROM THE CONSENT CALENDAR
PUBLIC COMMENTS
Persons speaking during Public Comments may address the Council on any subject matter
within the Council’s jurisdiction that is not listed as an item on the agenda. State law generally
prohibits the Council from discussing or taking action on any issue not included on the agenda,
but, if appropriate, the Council may schedule the topic for future discussion or refer the matter
to staff. Comments are limited to three minutes.
PUBLIC HEARINGS
The following item(s) have been advertised as public hearing(s) as required by law. 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.
RESOLUTION OF NECESSITY OF THE CITY OF CHULA
VISTA TO ACQUIRE CERTAIN REAL PROPERTY OR
INTEREST IN REAL PROPERTY BY EMINENT DOMAIN
FOR THE FIRE STATION 9 REPLACEMENT PROJECT --
LOCATED AT 1095 ALPINE AVENUE (4/5 VOTE
REQUIRED)
18-019115.18-0191
Economic Development Department Department:
The Project qualifies for a Categorical Exemption pursuant to the California
Environmental Quality Act State Guidelines Section(s) 15303 Class 3 (New
Construction or Conversion of Small Structures), Section 15332 Class 32
(In-Fill Development Projects), and Section 15061(b)(3).
Environmental Notice:
Council conduct the public hearing and adopt the resolution. Staff Recommendation:
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May 15, 2018City Council Agenda
A. RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING THE ISSUANCE, SALE AND
DELIVERY OF MULTI-FAMILY HOUSING REVENUE
BONDS OF THE CHULA VISTA HOUSING AUTHORITY
FOR TROLLEY TERRACE AND CORDOVA VILLAGE
AFFORDABLE APARTMENTS
B. RESOLUTION OF THE CHULA VISTA HOUSING
AUTHORITY REGARDING ITS INTENTION TO ISSUE
TAX-EXEMPT OBLIGATIONS FOR A PROPOSED
ACQUISITION AND REHABILITATION OF EXISTING
AFFORDABLE UNITS AT TROLLEY TERRACE AND
CORDOVA VILLAGE AFFORDABLE APARTMENTS
18-007516.18-0075
Development Services Department Department:
The Project qualifies for a Class 1 Categorical Exemption pursuant to
Section 15301 Existing Facilities of the California Environmental
Quality Act State Guidelines because it involves the rehabilitation of
existing facilities which would not result in an expansion of the existing
uses.
Environmental Notice:
Council conduct the public hearing, adopt resolution A, and Authority
adopt resolution B.
Staff Recommendation:
A. RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA MAKING CERTAIN FINDINGS OF FACT;
ADOPTING A STATEMENT OF OVERRIDING
CONSIDERATIONS; ADOPTING A MITIGATION
MONITORING AND REPORTING PROGRAM AND
CERTIFYING THE FINAL ENVIRONMENTAL IMPACT
REPORT (EIR-17-001; SCH NO. 2016041080) FOR THE
OTAY RANCH PORTION OF VILLAGE FOUR SECTIONAL
PLANNING AREA PLAN, GENERAL DEVELOPMENT PLAN
AMENDMENT AND TENTATIVE MAP PURSUANT TO THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING AMENDMENTS TO THE
OTAY RANCH GENERAL DEVELOPMENT PLAN TO
REFLECT LAND USE AND POLICY CHANGES FOR
APPROXIMATELY 166 ACRES WITHIN THE OTAY RANCH
PLANNED COMMUNITY, INCLUDING ASSOCIATED TEXT,
MAPS AND TABLES
18-014517.18-0145
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May 15, 2018City Council Agenda
C. RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA ADOPTING A NEW PORTION OF
VILLAGE FOUR SECTIONAL PLANNING AREA (SPA) PLAN,
AND ASSOCIATED REGULATORY DOCUMENTS
D. RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING TENTATIVE MAP CVT-15-
03 (PCS15-03) FOR THE PORTION OF VILLAGE FOUR
PROJECT, SUBJECT TO THE CONDITIONS CONTAINED
IN THE RESOLUTION
E. ORDINANCE OF THE CITY OF CHULA VISTA
APPROVING THE SECTIONAL PLANNING AREA (SPA)
PLANNED COMMUNITY DISTRICT REGULATIONS FOR
THE OTAY RANCH PORTION OF VILLAGE FOUR (FIRST
READING)
Development Services Department Department:
The proposed Project may have a significant effect on the environment.
Therefore, an Environmental Impact Report has been prepared .
Environmental Notice:
Council conduct the public hearing, adopt the resolutions and place the
ordinance on first reading.
Staff Recommendation:
ACTION ITEMS
The Item(s) listed in this section of the agenda will be considered individually by the Council and
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.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA, ACTING IN ITS CAPACITY AS THE
LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 16-I (MILLENIA), AUTHORIZING AND
PROVIDING FOR THE ISSUANCE OF SPECIAL TAX
BONDS FOR IMPROVEMENT AREA NO. 1 OF SUCH
COMMUNITY FACILITIES DISTRICT, APPROVING THE
FORM OF BOND INDENTURE, BOND PURCHASE
AGREEMENT, PRELIMINARY OFFICIAL STATEMENT AND
OTHER DOCUMENTS RELATED THERETO AND
AUTHORIZING CERTAIN ACTIONS IN CONNECTION WITH
THE ISSUANCE OF SUCH BONDS
18-006218.18-0062
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May 15, 2018City Council Agenda
Finance Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
CITY MANAGER’S REPORTS
MAYOR’S REPORTS
COUNCILMEMBERS’ COMMENTS
CITY ATTORNEY'S REPORTS
ADJOURNMENT
to the Regular City Council Meeting on May 22, 2018, at 5:00 p.m., in the Council Chambers.
Materials provided to the City Council related to any open-session item on this agenda are available for
public review at the City Clerk’s Office, located in City Hall at 276 Fourth Avenue, Building A, during
normal business hours.
In compliance with the
AMERICANS WITH DISABILITIES ACT
The City of Chula Vista requests individuals who require special accommodations to access, attend,
and/or participate in a City meeting, activity, or service, contact the City Clerk’s Office at (619)
691-5041(California Relay Service is available for the hearing impaired by dialing 711) at least
forty-eight hours in advance of the meeting.
Most Chula Vista City Council meetings, including public comments, are video recorded and aired live
on AT&T U-verse channel 99 (throughout the County), on Cox Cable channel 24 (only in Chula Vista),
and online at www.chulavistaca.gov. Recorded meetings are also aired on Wednesdays at 7 p.m. (both
channels) and are archived on the City's website.
Sign up at www.chulavistaca.gov to receive email notifications when City Council agendas are
published online.
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May 15, 2018City Council Agenda
NOTICE OF REVIEW AND PENDING APPROVAL OF FINAL MAP
In accordance with California Government Code Section 66458(d), notice is hereby given that the City Engineer has
reviewed and, immediately following this City Council meeting of May 15, 2018, will approve the following final map:
Chula Vista Tract No. 15-0006, Third Avenue and K Street
Specifically, the City Engineer has caused the map to be examined and has made the following findings:
(1) The map substantially conforms to the approved tentative map, and any approved alterations thereof and any
conditions of approval imposed with said tentative map.
(2) The map complies with the provisions of the Subdivision Map Act and any local ordinances applicable at the
time of approval of the tentative map.
(3) The map is technically correct.
Said map will be finalized and recorded, unless an interested party files a valid appeal of the City Engineer ’s action
to City Council no later than 2:00 p.m., 10 calendar days from the date of this City Council meeting. A valid appeal
must identify the improper/incorrect finding and the basis for such conclusion.
If you have any questions about the map approval findings or need additional information about the map or your
appeal rights, please feel free to contact Boushra Salem at (619) 409-5483.
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City of Chula Vista
Staff Report
File#:18-0192, Item#: A.
PRESENTATION OF A PROCLAMATION TO CHIEF OF POLICE ROXANA KENNEDY
PROCLAIMING TUESDAY, MAY 15, 2018 AS NATIONAL PEACE OFFICERS MEMORIAL DAY IN
THE CITY OF CHULA VISTA
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City of Chula Vista
Staff Report
File#:18-0194, Item#: B.
PRESENTATION OF A PROCLAMATION PROCLAIMING MAY 2018 NATIONAL BIKE MONTH IN
THE CITY OF CHULA VISTA
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City of Chula Vista
Staff Report
File#:18-0197, Item#: C.
PRESENTATION REGARDING TEDx CHULA VISTA BY LINCOLN ANTWON LORMEN, CHULA
VISTA ELEMENTARY SCHOOL
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City of Chula Vista
Staff Report
File#:18-0199, Item#: D.
PRESENTATION REGARDING THE SAN DIEGO AIRPORT AUTHORITY BY IMPERIAL BEACH
COUNCILMEMBER MARK WEST
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City of Chula Vista
Staff Report
File#:18-0170, Item#: 1.
APPROVAL OF MINUTES of January 16 and 23, 2018.
RECOMMENDED ACTION
Council approve the minutes.
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City of Chula Vista
Meeting Minutes - Draft
4:00 PM City Hall - Executive Conference Room
276 4th Avenue, Building A
Chula Vista, CA 91910
Tuesday, January 16, 2018
SPECIAL MEETING OF THE CITY COUNCIL
CALL TO ORDER
A special meeting of the City Council of the City of Chula Vista was called to order at 4:07 p.m. in the
Executive Conference Room, located in City Hall, 276 Fourth Avenue, Chula Vista, California.
ROLL CALL:
Present:Councilmember Aguilar, Councilmember McCann, Councilmember Padilla and Mayor
Casillas Salas
Absent:Deputy Mayor Diaz
Also Present: City Attorney Googins, City Clerk Bigelow, and Deputy City Clerk Larrarte
ACTION ITEMS
1.18-0016 INTERVIEWS AND CONSIDERATION OF APPOINTMENT TO THE
G ROWTH MANAGEMENT OVERSIGHT COMMISSION
(ENVIRONMENTAL REPRESENTATIVE SEAT)
On January 9, 2018, the City Council set a date and time to interview to
following applicants for the vacant Environmental Representative Seat on
the Growth Management Oversight Commission: Mary Ann Saponara,
Andrew Strong, and Sassan Rahimzadeh.
There were no members of the public who requested to speak regarding the item. The Council discussed
the questions that would be asked of each applicant. City Clerk Bigelow provided information on the item.
The Council conducted interviews for the Growth Management Oversight Commission. There were no
members of the public who wished to speak following the interviews.
A motion was made by Mayor Casillas Salas, seconded by Councilmember
McCann, to appoint Andrew Strong. The motion carried by the following vote:
ACTION:
Yes:Aguilar, McCann, Padilla and Casillas Salas4 -
No:0
Abstain:0
ADJOURNMENT
At 4:55 p.m., Mayor Casillas Salas adjourned the meeting to the Regular City Council Meeting on January
16, 2018, at 5:00 p.m., in the Council Chambers.
_______________________________
Kerry K. Bigelow, MMC, City Clerk
Page 1City of Chula Vista
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City of Chula Vista
Meeting Minutes - Draft
5:00 PM Council Chambers
276 4th Avenue, Building A
Chula Vista, CA 91910
Tuesday, January 16, 2018
REGULAR MEETING OF THE CITY COUNCIL
CALL TO ORDER
A regular meeting of the City Council of the City of Chula Vista was called to order at 5:05 p.m. in the
Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California.
ROLL CALL:
Present:Councilmember Aguilar, Councilmember McCann, Councilmember Padilla and Mayor
Casillas Salas
Excused:Deputy Mayor Diaz
Also Present: City Manager Halbert, City Attorney Googins, City Clerk Bigelow, and Deputy City Clerk
Larrarte
PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE
Councilmember McCann led the Pledge of Allegiance.
SPECIAL ORDERS OF THE DAY
A.17-0528 STARLIGHT PARADE SLIDE SHOW AND PRESENTATION OF
AWARDS
Councilmember Aguilar gave a presentation on the item. She and Councilmember Padilla presented
awards to the winners of the Starlight Parade award categories.
B.18-0024 PRESENTATION OF A PROCLAMATION TO THE HUMAN RELATIONS
COMMISSION PROCLAIMING TUESDAY, JANUARY 16, 2018 AS
NATIONAL DAY OF RACIAL HEALING IN THE CITY OF CHULA VISTA
Mayor Salas played a video of a speech by President Reagan.
Mayor Salas read the proclamation and Councilmember Padilla presented it to members of the Human
Relations Commission.
CONSENT CALENDAR (Items 1 - 8)
1.18-0019 APPROVAL OF MINUTES of September 26, 2017.
Recommended Action: Council approve the minutes.
2.17-0556 RESOLUTION NO. 2018-003 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA REQUIRING ELECTRONIC FILING OF FAIR POLITICAL
PRACTICES COMMISSION STATEMENTS OF ECONOMIC
INTERESTS, FORM 700
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Recommended Action: Council adopt the resolution.
3.18-0011 A. RESOLUTION NO. 2018-004 OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA CALLING A GENERAL MUNICIPAL ELECTION TO BE
HELD ON TUESDAY, JUNE 5, 2018, FOR THE ELECTION OF A
MAYOR, TWO MEMBERS OF THE CITY COUNCIL, REPRESENTING
DISTRICTS 1 AND 2, AND A CITY ATTORNEY; CONSOLIDATING THE
ELECTION WITH THE STATEWIDE ELECTION; AND REQUESTING THE
COUNTY OF SAN DIEGO BOARD OF SUPERVISORS TO PERMIT THE
REGISTRAR OF VOTERS TO PERFORM CERTAIN SERVICES FOR
THE CONDUCT OF THE ELECTION
B. RESOLUTION NO. 2018-005 OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA ADOPTING REGULATIONS FOR CANDIDATES FOR
ELECTIVE OFFICE PERTAINING TO MATERIALS SUBMITTED TO THE
ELECTORATE AT THE GENERAL MUNICIPAL ELECTION TO BE HELD
TUESDAY, JUNE 5, 2018
Recommended Action: Council adopt the resolutions.
4.17-0561 RESOLUTION NO. 2018-006 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $609,429 FROM THE CALIFORNIA
GOVERNOR’S OFFICE OF EMERGENCY SERVICES, WAIVING THE
CONSULTANT SELECTION PROCESS, APPROVING A CONSULTANT
SERVICES AGREEMENT WITH SOUTH BAY COMMUNITY SERVICES
TO PROVIDE DOMESTIC VIOLENCE RESPONSE AND ADVOCACY
SERVICES, APPROPRIATING $101,572 TO THE POLICE GRANTS
SECTION OF THE FEDERAL GRANTS FUND FOR THE DOMESTIC
VIOLENCE RESPONSE TEAM, AND DIRECTING STAFF TO INCLUDE
THE BALANCE IN SUBSEQUENT BUDGETS TO THE POLICE GRANTS
FUND FOR THIS TEAM (4/5 VOTE REQUIRED)
Recommended Action: Council adopt the resolution.
5.17-0562 RESOLUTION NO. 2018-007 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $43,289 FROM THE COUNTY OF SAN
DIEGO CALIFORNIA IDENTIFICATION PROGRAM AND
APPROPRIATING SAID FUNDS TO THE FISCAL YEAR 2017/2018
POLICE DEPARTMENT BUDGET (4/5 VOTE REQUIRED)
Recommended Action: Council adopt the resolution.
6.18-0004 A. RESOLUTION NO. 2018-008 OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA AUTHORIZING THE PURCHASE OF TWELVE (12)
HYUNDAI IONIQ BATTERY ELECTRIC VEHICLES FROM US FLEET
SOURCE INC. FOR $365,088 TO REPLACE VEHICLES IN THE POLICE
AND PLANNING AND BUILDING SERVICES DEPARTMENTS
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B. RESOLUTION NO. 2018-009 OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA AUTHORIZING THE PURCHASE OF THREE (3)
CHEVROLET BOLT BATTERY ELECTRIC VEHICLES FROM
COURTESY CHEVROLET CENTER FOR $104,707 TO REPLACE
VEHICLES IN THE ENGINEERING AND PLANNING AND BUILDING
SERVICES DEPARTMENTS
Recommended Action: Council adopt the resolutions.
7.17-0546 RESOLUTION NO. 2018-010 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING A DEED RESTRICTION ON THE TITLE OF
LAUDERBACH PARK THAT IS REQUIRED AS A CONDITION OF
APPROVAL FOR A YOUTH SOCCER AND RECREATION
DEVELOPMENT PROGRAM GRANT FROM THE STATE OF
CALIFORNIA DEPARTMENT OF PARKS AND RECREATION OFFICE
OF GRANTS AND LOCAL SERVICES, AND AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO EXECUTE THE DEED
RESTRICTION
Recommended Action: Council adopt the resolution.
8.18-0017 RESOLUTION NO. 2018-011 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AMENDMENT TO THE CITY’S
EXISTING AGREEMENT WITH TERRIS BARNES WALTERS BOIGON
HEATH, INC. (TBWB) TO INCREASE THE ORIGINAL AGREEMENT
FROM $35,000 TO $70,000 TO FUND AN ADDITIONAL VOTER
SURVEY AND FEASIBILITY STUDY REGARDING THE POSSIBILITY OF
HAVING TWO TAX MEASURES ON THE JUNE 2018 BALLOT
Recommended Action: Council adopt the resolution.
Approval of the Consent Calendar
A motion was made by Councilmember McCann, seconded by Councilmember
Padilla, to approve staff's recommendations on the above Consent Calendar
items, headings read, text waived. The motion carried by the following vote:
Items 1 through 7:
ACTION:
Yes:Aguilar, McCann, Padilla and Casillas Salas4 -
No:0
Abstain:0
Item 8:ACTION:
Yes:Aguilar, Padilla and Casillas Salas3 -
No:McCann1 -
Abstain:0
ITEMS REMOVED FROM THE CONSENT CALENDAR
There were none.
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PUBLIC COMMENTS
Kevin O'Neill, Chula Vista resident, expressed concern regarding the services provided through the
Republic Services contract.
Sandy Soto, Chula Vista resident, expressed appreciation for the City Attorney's efforts to address illegal
marijuana businesses. She spoke in support of upgrading street infrastructure and increasing police
patrols, and expressed concern regarding the City becoming a designated Sanctuary City.
Randy Epstein, Chula Vista resident, representing Crossroads II, spoke regarding the potential public
safety tax measure.
The following members of the public spoke in opposition to commercialization of cannabis:
-Scott Chipman, representing San Diegans for Safe Neighborhoods, and he distributed written
communications.
-Susan Wilcox, representing Safe Neighborhoods
-Kelly McCormick, representing the Consortium of Youth Advocates
-Carol Green, Chula Vista resident
Laura Wilkinson, Coronado resident, spoke in support of commercialization of cannabis.
CITY MANAGER’S REPORTS
There were none.
MAYOR’S REPORTS
9.18-0025 RATIFICATION OF APPOINTMENTS OF THE FOLLOWING:
Edward Legaspi, Sustainability Commission
Robert Quinlivan, Historic Preservation Commission
Kristen Dennis, Historic Preservation Commission
A motion was made by Councilmember McCann, seconded by Councilmember
Aguilar, that the above appointments be ratified. The motion carried by the
following vote:
ACTION:
Yes:Aguilar, McCann, Padilla and Casillas Salas4 -
No:0
Abstain:0
Mayor Casillas Salas spoke regarding the following events: Chula Vista Celebration of Champions and the
All Peoples Celebration. She congratulated Port Commissioner Ann Moore on her appointment as
Secretary.
COUNCILMEMBERS’ COMMENTS
Councilmember Padilla congratulated Port Commissioner Ann Moore. He reported his attendance at an
Alliance San Diego event celebrating Dr. Martin Luther King.
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CITY ATTORNEY'S REPORTS
10.18-0023 Solicit City Council input on desired timing for placing possible Charter
Amendment on ballot.
City Attorney Googins spoke regarding the item.
Councilmember Padilla expressed concern regarding the current processes related to potential charter
amendments and spoke in support of discussing the issue further.
Councilmember Aguilar expressed concern regarding the potential of an appearance of a conflict of
interest if the City Attorney's office advised the Charter Review Commission on potential charter
amendments that would affect the City Attorney position.
There was consensus of the Council to add an item to an upcoming agenda to discuss legal advice for the
Charter Review Commission and City Council on potential charter amendments related to the City
Attorney's office.
There was consensus of the Council to further consider charter amendments for potential placement on
the November ballot.
ADJOURNMENT
At 6:39 p.m., Mayor Casillas Salas adjourned the meeting to the Regular City Council Meeting on January
23, 2018, at 5:00 p.m., in the Council Chambers.
_______________________________
Kerry K. Bigelow, MMC, City Clerk
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City of Chula Vista
Meeting Minutes - Draft
5:00 PM Council Chambers
276 4th Avenue, Building A
Chula Vista, CA 91910
Tuesday, January 23, 2018
REGULAR MEETING OF THE CITY COUNCIL
CALL TO ORDER
A regular meeting of the City Council of the City of Chula Vista was called to order at 5:01 p.m. in the
Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California.
ROLL CALL:
Present:Councilmember Aguilar, Deputy Mayor Diaz, Councilmember McCann, Councilmember
Padilla and Mayor Casillas Salas
Also Present: City Manager Halbert, City Attorney Googins, City Clerk Bigelow, and Records Manager
Turner
PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE
Councilmember Padilla led the Pledge of Allegiance.
SPECIAL ORDERS OF THE DAY
A.18-0026 OATHS OF OFFICE
Andrew Strong Growth Management Oversight Comm.
Edward Legaspi Sustainability Commission
Robert Quinlivan Historic Preservation Commission
City Clerk Bigelow administered the oath of office to Commissioners Strong, Legaspi, and Quinlivan.
B.17-0563 PRESENTATION BY VULCAN AGGREGATE OUTREACH & PUBLIC
AFFAIRS MANAGER BARBARA GOODRICH-WELK AND CHULA
VISTA QUARRY PLANT MANAGER LANE KLASTOW OF A CHECK TO
THE CHULA VISTA FIREFIGHTER FOUNDATION
Barbara Goodrich-Welk and Lane Klastow, representing Vulcan Aggregate, presented a $25,000 check to
the Chula Vista Firefighter Foundation.
C.18-0008 PRESENTATION ON THE FINAL RESULTS OF THE GEORGETOWN
UNIVERSITY ENERGY PRIZE AND RELATED CITY ENERGY
EFFICIENCY PROGRAMS
Conservation Specialist Downs gave a presentation on the item.
CONSENT CALENDAR (Items 1 - 4)
Mayor Casillas Salas announced that Item 4 would be removed from the Consent Calendar.
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1.18-0027 APPROVAL OF MINUTES of October 10, and 12, 2017.
Recommended Action: Council approve the minutes.
2.17-0450 RESOLUTION NO. 2018-012 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AGREEMENT BETWEEN THE CITY OF
CHULA VISTA AND THE CHULA VISTA ELEMENTARY SCHOOL
DISTRICT FOR USE OF THE CIVIC CENTER LIBRARY MULTIPURPOSE
ROOM
Recommended Action: Council adopt the resolution.
3.17-0515 RESOLUTION NO. 2018-013 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE PURCHASE OF ONE (1) WHEELED
EXCAVATOR IN ACCORDANCE WITH THE TERMS AND CONDITIONS
OF NATIONAL JOINT POWERS ALLIANCE CONTRACT NUMBER
032515-CAT FROM CATERPILLAR INC. IN THE AMOUNT OF $272,024
Recommended Action: Council adopt the resolution.
Item 4 was removed from the Consent Calendar.
Approval of the Consent Calendar
A motion was made by Councilmember McCann, seconded by Councilmember
Padilla, to approve staff's recommendations on the above Consent Calendar
items, headings read, text waived. The motion carried by the following vote:
ACTION:
Yes:Aguilar, Diaz, McCann, Padilla and Casillas Salas5 -
No:0
Abstain:0
ITEMS REMOVED FROM THE CONSENT CALENDAR
4.17-0452 A. RESOLUTION NO. 2018-014 OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA ACCEPTING BIDS AND AWARDING A CONTRACT
FOR THE “STREET PAVEMENT REHABILITATION - MEASURE P (CIP#
STL0427)” PROJECT TO ATP GENERAL ENGINEERING
CONTRACTORS, LLC. IN THE BID AMOUNT OF $5,127,997
B. RESOLUTION NO. 2018-015 OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA AMENDING THE FY2017/18 CIP PROGRAM
BUDGET BY ESTABLISHING NEW CIP PROJECTS, “STREET
PAVEMENT REHAB PHASE II - MEASURE P (CIP# STL0430)” AND
“CMP REHAB OUTSIDE RIGHT OF WAY PHASE II - MEASURE P (CIP#
DRN0211)”; TRANSFERRING $8,750,000 IN MEASURE P
APPROPRIATIONS FROM STL0427 TO STL0430; AND
TRANSFERRING $5,639,000 IN MEASURE P APPROPRIATIONS FROM
DRN0209 TO DRN0211 (4/5 VOTE REQUIRED)
Principal Civil Engineer Gomez gave a presentation on the item.
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A motion was made by Councilmember Padilla, seconded by Councilmember
Aguilar, to adopt Resolution Nos. 2018-014 and 2018-015, headings read, text
waived. The motion carried by the following vote:
ACTION:
Yes:Aguilar, Diaz, McCann, Padilla and Casillas Salas5 -
No:0
Abstain:0
PUBLIC COMMENTS
Judi Strang expressed concern regarding teen use of marijuana and spoke in opposition to retail sales of
marijuana in Chula Vista.
Peggy Walker, Chula Vista resident, spoke in opposition to retail sales of marijuana in Chula Vista and
distributed written communication to the Council.
Sandy Sato, Chula Vista resident, stated she had misunderstood issues related to Chula Vista becoming
a sanctuary city and apologized to the Council for her comments at a previous meeting on the topic.
Michael Kootchick, representing Lanshire Housing Partners, spoke regarding a development project in the
City and requested information regarding qualifications for a community facilities district program for the
project.
ACTION ITEMS
5.18-0012 A. RESOLUTION NO. 2018-016 OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA AMENDING THE COMPENSATION SCHEDULE AND
CLASSIFICATION PLAN TO REFLECT CHANGES IN THE
COMPENSATION FOR THE FA DEPUTY EXECUTIVE DIRECTOR AND
FA DIRECTOR OF THE SAN DIEGO LAW ENFORCEMENT
COORDINATION CENTER EFFECTIVE JANUARY 5, 2018
B. RESOLUTION NO. 2018-017 OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING THE REVISED FISCAL YEAR
2017/2018 COMPENSATION SCHEDULE EFFECTIVE JANUARY 5,
2018, AS REQUIRED BY CALIFORNIA CODE OF REGULATIONS, TITLE
2, SECTION 570.5 TO REFLECT SALARY INCREASES FOR THE FA
DEPUTY EXECUTIVE DIRECTOR AND FA DIRECTOR OF THE SAN
DIEGO LAW ENFORCEMENT COORDINATION CENTER
Police Chief Kennedy presented information on the item.
A motion was made by Councilmember McCann, seconded by Deputy Mayor
Diaz, to adopt Resolution Nos. 2018-016 and 2018-017, headings read, text
waived. The motion carried by the following vote:
ACTION:
Yes:Aguilar, Diaz, McCann, Padilla and Casillas Salas5 -
No:0
Abstain:0
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6.17-0539 RESOLUTION NO. 2018-018 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN EXCLUSIVE NEGOTIATING
AGREEMENT WITH THE UNIVERSITY OF SAINT KATHERINE, A
PRIVATE NON-PROFIT UNIVERSITY, FOR A PROPOSED UNIVERSITY
DEVELOPMENT
City Manager Halbert gave a presentation on the item.
Council discussed the item.
J.C. Hurtado-Prater, Chula Vista resident, spoke in opposition to staff's recommendation.
Councilmember Aguilar stated she had inquired with Saint Katherine regarding the university not offering
Cal Grants and reported she had received a reply email from the university's president, Dr. Papatheofanis,
stating that the university had applied to participate in the program and anticipated approval by August.
A motion was made by Councilmember Aguilar, seconded by Councilmember
McCann, to adopt Resolution No. 2018-018, as amended to direct staff to report
back to the City Council regarding the due diligence evaluations that occur
during the initial 90-day term. The heading was read, text waived. The motion
carried by the following vote:
ACTION:
Yes:Aguilar, Diaz, McCann, Padilla and Casillas Salas5 -
No:0
Abstain:0
CITY MANAGER’S REPORTS
There were none.
MAYOR’S REPORTS
Mayor Casillas Salas spoke regarding the following recent events: KUSI segment on Chula Vista's goals
for 2018 and the opening of Rapido Insurance Services. She also spoke regarding the Youth Sports
Council's kickoff of a Measure P improvement project at Chula Vista Community Park and reported that
135 volunteers from the organization had participated in the project.
Mayor Casillas Salas provided information on a recent community meeting regarding SANDAG's executive
director recruitment and she announced the upcoming opening of the exhibit "Fronterizos: A History of
the Spanish-Speaking People of the South Bay" at the Heritage Museum.
COUNCILMEMBERS’ COMMENTS
Councilmember McCann thanked the Youth Sports Council, City staff, and the volunteers who participated
in the Measure P improvement project at Chula Vista Community Park.
Mark Twohey, representing the Youth Sports Council, gave a presentation on the park improvement
project and commended Assistant Director of Public Works Quilantan and the Parks Department staff.
Deputy Mayor Diaz commended the Youth Sports Council for its partnership with the City.
Councilmember Padilla congratulated newly elected chair of the San Diego Metropolitan Transit System
(MTS) Board, Georgette Gómez, and he commended Mayor Casillas Salas for her leadership role at the
meeting.
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Mayor Casillas Salas spoke regarding the women in leadership roles on the MTS Board.
Councilmember Aguilar also spoke regarding the recent MTS Board meeting and commended Mayor
Casillas Salas for her leadership on the board.
CITY ATTORNEY'S REPORTS
City Attorney Googins announced that the Council would convene in closed session to discuss Items 7
and 8B, listed below. He stated Item 8A would not be discussed at that time.
Mayor Casillas Salas recessed the meeting at 6:26 p.m. The Council reconvened in closed session at
6:35 p.m. with all members present.
CLOSED SESSION
Pursuant to Resolution No. 13706 and Council Policy No. 346-03, Official Minutes and records of
action taken during Closed Sessions are maintained by the City Attorney.
7.18-0013 PUBLIC EMPLOYEE PERFORMANCE EVALUATION PURSUANT TO
GOVERNMENT CODE SECTION 54957
Title: City Manager
No reportable action.ACTION:
8.18-0018 CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING
LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9
(d)(1)
A. Name of case: Tommy LaNier v. City of Chula Vista, et al, San Diego
Superior Court, Case No. 37-2014-00019774-CU-DF-CTL
B. Name of case: Mariana Garcia v. City of Chula Vista, et al., San
Diego Superior Court, Case no. 37-2017-00009402-CU-OE-CTL
Item 8A was not discussed.
Item 8B: Reportable action pending finalization of settlement.
ACTION:
ADJOURNMENT
At 9:00 p.m. the meeting was adjourned to the Regular City Council Meeting on February 6, 2018, at 5:00
p.m., in the Council Chambers.
_______________________________
Kerry K. Bigelow, MMC, City Clerk
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City of Chula Vista
Staff Report
File#:18-0210, Item#: 2.
WRITTEN COMMUNICATIONS
Letter of resignation from Thomas Doyle, Citizens’ Oversight Committee
RECOMMENDED ACTION
Council accept the resignation.
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1
Leah Larrarte
Subject:RE: Resignation from COC
From: Thomas Doyle
Sent: Wednesday, May 09, 2018 12:47 PM
To: Sandi Delap
Subject: Resignation from COC
Sandi, I am sorry to say that with other obligations currently going on I do not have the time and
resources to fully commit my time to the COC.
I have enjoyed my time on the COC and being part of the process to rejuvenate Chula Vista. I look
forward to the improvements in Chula Vista that are a direct result of the Measure P money being
spent.
Thank you for your hard work behind the scenes for the COC.
Tom Doyle
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City of Chula Vista
Staff Report
File#:17-0554, Item#: 3.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING
AGREEMENTS WITH IBI GROUP, INC., ITERIS, INC., KIMLEY-HORN AND ASSOCIATES, INC.,
AND STC TRAFFIC, INC. TO PROVIDE ON-CALL TRAFFIC ENGINEERING & INTELLIGENT
TRANSPORTATION SYSTEMS (ITS) CONSULTING SERVICES FOR VARIOUS CAPITAL
IMPROVEMENT PROGRAM PROJECTS AND OTHER CITY PROJECTS
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
City staff has identified the need to enlist highly qualified consultants to assist in the planning, design,
construction management/inspection, and/or implementation of traffic, transportation, general civil
engineering, ITS, telecommunications, and networking projects.
ENVIRONMENTAL REVIEW
Environmental Notice
The Project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing
Facilities) of the California Environmental Quality Act State Guidelines.
Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the
California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Class
1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the State CEQA
Guidelines. Thus, no further environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
Background
On September 12, 2017, Council adopted the City’s first Traffic Signal Communications Master Plan
via Resolution No. 2017-173. This Plan identified deficiencies, needs, and enhancements to the
City’s traffic signal communications network. The Plan also identified new Intelligent Transportation
Systems (ITS) elements and technologies such as adaptive traffic control systems, advanced data
collection systems, and video monitoring systems, which can become extremely valuable traffic
management tools when added onto a robust and efficient communications system. The enhanced
communications system and ITS elements will primarily serve the City’s Traffic Engineering Division
and will provide staff with modern tools to better serve the public utilizing the City's various
transportation modes. These network enhancements and new ITS elements will also create greater
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transportation modes. These network enhancements and new ITS elements will also create greater
connectivity opportunities for other Departments within the City such as the Information Technology
Services, Public Works, Police, and Fire. In addition, the City has been awarded Federal grants to
fund the installation of a fiber optic network to upgrade the traffic signal communications network and
create opportunities for the deployment of Smart City-type applications. Therefore, this Council
action is to establish agreements with four (4) highly qualified consultants to assist staff and provide
specialized technical services for the implementation of components of the Traffic Signal
Communications Master Plan, various Capital Improvement Program projects, Smart City initiatives,
and other City projects.
Currently, most traffic engineering design services are provided by in-house City personnel.
However, the nature of the work required to complete the various elements in the Traffic Signal
Communications Master Plan, Measure P transportation-related projects, certain Federally-funded
projects, and most Smart City applications is so specialized that it is necessary to utilize engineering
firm(s) to complete these tasks in a manner that will meet and exceed today's standards. The City’s
goal is to complete the installation of the new traffic signal communications network and various ITS
elements over the next five to seven years, upon available funding. In addition, the City has made
commitments to expeditiously deliver improvements for failed infrastructure throughout Chula Vista,
under Measure P, that will take significant effort to plan, design, and construct. In order to achieve
these goals, and to stay current with rapidly changing technology, the design work, inspection, and/or
implementation of these components needs to take place at a fast pace by experts in these fields.
Therefore, the Department will use the as-needed consultant(s) in support of City staff, to provide the
specialized technical services it needs in the areas of traffic signal communications, ITS,
telecommunications, networking, traffic and civil engineering.
Consultant Selection Process
In mid-August 2017, the City of Chula Vista requested proposals from qualified firms for Traffic
Engineering and Intelligent Transportation Systems (ITS) Consulting Services in accordance with
Chula Vista Municipal Code Section 2.56.110 and Caltrans Local Assistance Procedure Manual
(LAPM). Note that by following Caltrans LAPM procedures, these on-call contracts may also be used
to support City staff in the successful completion of City projects that are State and/or Federally
funded.
In late September 2017, a total of seven engineering firms submitted proposals pursuant to the
Request for Proposal (RFP). The selection committee determined that all seven engineering firms
were qualified to participate in the interview process. Therefore, in mid-November 2017, the Selection
Panel interviewed the following seven firms and their respective team of sub-consultants:
1. IBI Group, Inc.
2. Iteris, Inc.
3. Kimley-Horn and Associates, Inc.
4. KOA Corporation
5. Rick Engineering Company
6. STC Traffic, Inc.
7. Urban Systems Associates, Inc.
In late November 2017, based on the selection rating criteria, interview, and procedure, the
consultant selection committee, selected IBI Group, Inc., Iteris, Inc., Kimley-Horn and Associates,City of Chula Vista Printed on 5/10/2018Page 2 of 3
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consultant selection committee, selected IBI Group, Inc., Iteris, Inc., Kimley-Horn and Associates,
Inc., and STC Traffic, Inc. as the first ranked and most qualified firms.
The On-Call Traffic Engineering and ITS Consultant Services Agreements with IBI Group, Inc., Iteris,
Inc., Kimley-Horn and Associates, Inc., and STC Traffic, Inc. have a zero dollar minimum aggregate
value and a total not-to-exceed amount of $5,000,000, per consultant team, for the duration of the
contract period. In addition, each consultant Agreement has a duration of two years, from the date of
Council approval, with two optional one-year extensions upon mutual agreement.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section
18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100,
et seq.).
Staff is not independently aware, and has not been informed by any member, of any other fact that
may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community.
CURRENT YEAR FISCAL IMPACT
All fees for Consultant services will be paid from funds already allocated in the CIP Program, other City projects, or
development funded projects. Fee schedules have been successfully negotiated with all four teams (prime and their
subconsultants).
ONGOING FISCAL IMPACT
Funding for future tasks will be funded by the Capital Improvement Program project requiring these services, other City
projects, or development funded projects.
ATTACHMENTS
1. City of Chula Vista Consultant Services Agreement with IBI Group, Inc. to Provide On-Call Traffic Engineering
and Intelligent Transportation Systems Consulting Services
2. City of Chula Vista Consultant Services Agreement with Iteris, Inc. to Provide On-Call Traffic Engineering and
Intelligent Transportation Systems Consulting Services
3. City of Chula Vista Consultant Services Agreement with Kimley-Horn and Associates, Inc. to Provide On-Call
Traffic Engineering and Intelligent Transportation Systems Consulting Services
4. City of Chula Vista Consultant Services Agreement with STC Traffic, Inc. to Provide On-Call Traffic Engineering
and Intelligent Transportation Systems Consulting Services
Staff Contact: Eddie Flores, City Traffic Engineer, Engineering & Capital Projects Department
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AGREEMENTS WITH IBI
GROUP, INC., ITERIS, INC., KIMLEY-HORN AND
ASSOCIATES, INC., AND STC TRAFFIC, INC. TO PROVIDE
ON-CALL TRAFFIC ENGINEERING & INTELLIGENT
TRANSPORTATION SYSTEMS (ITS) CONSULTING
SERVICES FOR VARIOUS CAPITAL IMPROVEMENT
PROGRAM PROJECTS AND OTHER CITY PROJECTS
WHEREAS,City of Chula Vista (City) staff has identified the need to enlist highly
qualified consultants to assist in the planning, design, construction management/inspection,
and/or implementation of traffic, transportation, general civil engineering, ITS,
telecommunications, and networking projects; and
WHEREAS, the City issued a Request for Proposals (RFP) from qualified firms for
Traffic Engineering and Intelligent Transportation Systems (ITS) Consulting Services in
accordance with Chula Vista Municipal Code (CVMC) Section 2.56.110 and Caltrans Local
Assistance Procedure Manual (LAPM); and
WHEREAS, the City received seven (7) proposals in response to the RFP; and
WHEREAS, the City completed the consultant selection process in accordance with
CVMC Section 2.56.110.C and selected IBI Group, Inc., Iteris, Inc., Kimley-Horn and
Associates, Inc., and STC Traffic, Inc. as the firms most qualified to provide the requested
services; and
WHEREAS, the proposed On-Call Traffic Engineering and ITS Consultant Services
Agreement(s) with IBI Group, Inc., Iteris, Inc., Kimley-Horn and Associates, Inc., and STC
Traffic, Inc., respectively, have a duration of two years, from the date of Council approval, with
two optional one-year extensions upon mutual written agreement of the parties; and
WHEREAS, the proposed On-Call Traffic Engineering and ITS Consultant Services
Agreement(s) with IBI Group, Inc., Iteris, Inc., Kimley-Horn and Associates, Inc., and STC
Traffic, Inc., respectively, have a zero dollar minimum aggregate value and a total not-to-exceed
amount of $5,000,000, per consultant team, for the duration of the contract period; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it approves the City of Chula Vista Consultant Services Agreement(s) To Provide On-Call
Traffic Engineering and Intelligent Transportation Systems Consulting Services between the City
of Chula Vista and IBI Group, Inc., Iteris, Inc., Kimley-Horn and Associates, Inc., and STC
Traffic, Inc., respectively, in the form presented, with such minor modifications as may be
approved or directed by the City Attorney, and authorizes and directs the Mayor to execute the
Agreements.
2018-05-15 Agenda Packet Page 110
Presented by Approved as to form by
William S. Valle Glen R. Googins
Director of Engineering & Capital Projects City Attorney
2018-05-15 Agenda Packet Page 111
City of Chula Vista
Staff Report
File#:18-0156, Item#: 4.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE GRANT
APPLICATION FOR THE SMART GROWTH INCENTIVE PROGRAM - CYCLE 4 THROUGH THE
SAN DIEGO ASSOCIATION OF GOVERNMENTS FOR PHASE 3 OF THE THIRD AVENUE
STREETSCAPE PROJECT FROM F STREET TO E STREET, AND STATING THE CITY’S
ASSURANCE TO COMPLETE THE PROJECT
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
On March 6, 2018, per Resolution No. 2018-038, the City Council approved the submittal of a grant
application for the Smart Growth Incentive Program (SGIP) Cycle 4 through the San Diego
Association of Governments (SANDAG) for Phase 3 of the Third Avenue Streetscape Project from F
Street to E Street, and stating the City’s assurance to complete the project. The City is requesting an
amendment to said application to update the listed project cost and the associated local match
required to complete the project.
ENVIRONMENTAL REVIEW
Environmental Notice
The Project was adequately covered in previously adopted/certified Final Environmental Impact
Report, FEIR-06-01 for the Chula Vista Urban Core Specific Plan (UCSP) and any and all addenda
and amendments.
Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the
California Environmental Quality Act (CEQA) and has determined that the project was adequately
covered in previously adopted Final Environmental Impact Report for the Chula Vista Urban Core
Specific Plan (UCSP), Final Environmental Impact Report-06-01 (“FEIR-06-01”). Pursuant to the
California Environmental Quality Act (CEQA) on April 26, 2007 the City, acting as Lead Agency,
certified FEIR-06-01 for the UCSP. On January 25, 2011, the City, acting as Lead Agency, having
found and determined that certain amendments to the UCSP, including the referenced Third Avenue
Streetscape improvements, would not result in significant unmitigated impacts and that only minor
technical changes or additions to FEIR-06-01 were necessary and that none of the conditions
described in Section 15162 of the State CEQA Guidelines calling for the preparation of a subsequent
environmental document had occurred, adopted an Addendum to FEIR-06-01. Therefore, no further
CEQA actions or determinations are necessary.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
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DISCUSSION
On December 15, 2017, the SANDAG Board of Directors released the call for projects for SGIP -
Cycle 4. City staff has already prepared design plans for Third Avenue Streetscape - Phase 3, that
continues the design aspects incorporated into Phases 1 & 2 (from H Street to F Street), but also
addresses new storm water compliance requirements and incorporates additional Complete Streets
and Smart City improvements. The construction of Phase 3 will complete the overall Third Avenue
Streetscape Project.
The initial project cost that was listed in the grant application was estimated at $4,000,000, of which,
the SGIP grant would provide a maximum of $2,500,000 toward the project and would require a
$1,500,000 local fund match. After a more detailed cost estimate was completed, which includes
updated design and construction requirements, the overall project cost increased by $700,000 to a
total of $4,700,000 (Attachment 1). In anticipation of receiving the SGIP grant for this project, the
new required local fund match of $2,200,000 is programmed in the upcoming Fiscal Year 2018/19
Capital Improvement Program (CIP).
In order for SANDAG to accept the grant application for the Third Avenue Streetscape - Phase 3
project, a Council Resolution is required that reflects the updated project cost estimate and
associated local fund match for the project.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found that, Mayor Mary
Salas has real property holdings within 500 feet of the boundaries of the property which is the
subject of this action. Consequently, pursuant to California Code of Regulations Title 2, sections
18700 and 18702.2(a)(11), this item presents a disqualifying real property-related financial
conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.) for the above
-identified member.
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The overall Third
Avenue Streetscape project supports the Strong and Secure Neighborhoods goal. The project
facilitates mixed-use, transit oriented development, that incorporates the City’s Complete Streets
policy that addresses the needs for all modes of transportation for residents and visitors of the City
alike.
CURRENT YEAR FISCAL IMPACT
A total of $2,200,000 in TransNet funds, identified as matching funds in the grant application, will be
budgeted as part of the FY 2018/19 CIP Program. Sufficient TransNet funds will be available in FY
2018/19; therefore, there is no additional impact to this fund.
If any of the grants are awarded, staff will return to City Council with a recommendation to accept and
appropriate the funds as part of the Third Avenue Streetscape Project Phase 3. If the project is not
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File#:18-0156, Item#: 4.
appropriate the funds as part of the Third Avenue Streetscape Project Phase 3. If the project is not
awarded grant funding, the TransNet matching funds will be reprogrammed into the FY 2018/19 CIP
Program into congestion relief eligible projects.
ONGOING FISCAL IMPACT
Upon construction completion, the Third Avenue Village Association (TAVA) and the City will update
an existing maintenance agreement to determine responsibilities for the streetscape’s maintenance.
In general, the roadway, traffic signals, street lighting, street trees, and street pavers (for line and
grade only) will require routine maintenance.
ATTACHMENTS
1. Cost Estimate: Third Av Streetscape - Phase 3
Staff Contact: Patrick C. Moneda, Senior Civil Engineer
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COST ESTIMATE Project Number:STL-406
Project Title:DATE:March 5, 2018
Third Avenue beautification Project PREPARED BY:JosØ Serrato
From 200’ north of "F" Street to "E" Street CHECKED BY:JosØ Gomez
CIVIL (Including Landscape & Electrical) - PHASE III
No.Description Quantity Unit Unit Amount
Price
1 Baseline Data Collection Plan; Raw Bike/Ped Data 1 EA $20,000.00 $20,000.00
Subtotal:$20,000
2 Asphalt Concrete Pavement (5") & Overlay (1 1/2")910 Tons $120.00 $109,200.00
3 Crushed Aggregate Base (8")335 Tons $80.00 $26,800.00
4 Cold Planing/ Grinding 74,110 SF $1.40 $103,754.00
Subtotal:$239,754
5
P.C.C. Monolithic Curb, Gutter and Sidewalk, 6-inch Curb x
4.50-feet thru 9-feet Wide 55 LF $100.00 $5,500.00
6 P.C.C. Curb and Gutter (3-inch)132 LF $30.00 $3,960.00
7 P.C.C. Curb and Gutter (6" & VARIOUS TRANSITIONS)2,171 LF $32.00 $69,472.00
8 P.C.C. Median Curb (6-Inch) Per SDRSD G-6, B-1 952 LF $30.00 $28,560.00
9
P.C.C. Sidewalk 4-inch Thick (Light Broom Finish) (PCC
Strip)215 SF $10.00 $2,150.00
10 P.C.C. Sidewalk 4-inch Thick Natural Grey Concrete w/ 3'
x 3' Square Pattern w/ Light Broom Finish 29,822 SF $10.00 $298,220.00
11
P.C.C. Sidewalk 4-inch Thick Integral Color Concrete w/
1.50' x 1.50' Diagonal Pattern @ 45 degree Angle Medium
Sandblast Finish Davis Color Flagstone Brown
2,530 SF $15.00 $37,950.00
12
P.C.C. Median Walk 4-inch Thick Integral Color Conrete w/
13" x 13" Diagonal Pattern @ 45 egree Angle Medium
Sandblast Finish Davis Color Flagstone brown
70 SF $15.00 $1,050.00
13
P.C.C. Accent Square, 4-inch Thick 8' x 8' Integral Color
Lakeside Brown and Medium Sandblast Finish Flagstone
Brown 641
384 SF $25.00 $9,600.00
14 P.C.C. Sidewalk 4-inch Thick Integral Color Concrete Band
w/ Medium Sandblast Finish 1,125 SF $18.00 $20,250.00
15 P.C.C. Driveway, 6-inch Thick (w/ 3' x 3' Square Pattern,
Liught Broom finish) 644 SF $14.00 $9,016.00
16 P.C.C. Monolithic Crosswalk Band and Base, See Detail
on Sheet No. 8 3,351 SF $30.00 $100,530.00
17 P.C.C. Pedestrian Ramps, CVCS 25 Type A 8 EA $4,000.00 $32,000.00
18 P.C.C. Pedestrian Ramps CVCS 25 Type A Modified 2 EA $5,000.00 $10,000.00
19 P.C.C. Pedestrian Ramps, CVCS 25 Type B 4 EA $4,000.00 $16,000.00
20 P.C.C. Curb/ Wheel Stop per Detail on Sheet 13.17 EA $500.00 $8,500.00
21
Concrete Interlocking Pavers for Crosswalks, 3 1/8-inch
Thick (4" x 8", 6" x 12" & 12" x 12")2,812 SF $30.00 $84,360.00
22 Enhancing Stabilizing Sealer for Pavers (90 SF/ GAL)32 GAL $250.00 $8,000.00
Subtotal:$745,118
Traffic Improvements
Exhibit B
Concrete Improvements
Roadway Improvements
City of Chula Vista
Collect Baseline Data
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No.Description Quantity Unit Unit Amount
Price
Collect Baseline Data
23
Striping in Paint Including Red and Yellow Paint on Curb &
Median, Parking Stall, Disabled Parking in Blue, Removal
of Existing
7,140 LF $3.00 $21,420.00
24 Striping in Thermoplastic (Limit Line, Legends, Disabled
legend) - Including Removal of Existing 1,140 SF $6.00 $6,840.00
25 Furnish and Install Signs on New Posts and Foundations
(One (1) Sign Per Post)9 EA $370.00 $3,330.00
26 Furnish and Install Signs on New Posts and Foundations
(Two (2) Signs Per Post)8 EA $450.00 $3,600.00
27 Relocate Existing Parking Directional Signs with New
Foundation 2 EA $470.00 $940.00
28 Remove and Deliver Existing Street Light Standard to
PWC Yard 6 EA $1,000.00 $6,000.00
29 Remove and Deliver Existing Double Pedestrian
Ornamental Light to PWC Yard 3 EA $1,000.00 $3,000.00
30 Traffic Signal Modifications 1 LS $40,000.00 $40,000.00
31 Replace Existing Traffic Signal Pull Box 13 EA $700.00 $9,100.00
32 Replace Exist. Street Light Pull Box 1 EA $700.00 $700.00
Subtotal:$94,930
33 Curb Inlet, L=5-feet per SDRSD D1 Type A 2 EA $7,000.00 $14,000.00
34 Curb Inlet, L=5-feet per SDRSD D1 Type B 2 EA $7,000.00 $14,000.00
35 Storm Drain Cleanout per SDRSD D-9 Type A4 1 EA $7,000.00 $7,000.00
36 Storm Drain Cleanout per SDRSD D-9 Type A9 Mod.1 EA $8,000.00 $8,000.00
37 Convert Exist. Inlet into Cleanout Per SDRSD d-9 Type A 1 EA $6,000.00 $6,000.00
38 Remove Top 18 inch of Exist. Cleanout, Cap with 6-inch
Concrete Reinforced with #4 Bars @ 8" both ways 1 EA
$6,000.00 $6,000.00
39 PVC Drainage Pipe 18-inch Including Concrete
Encasement 36 LF
$130.00 $4,680.00
40 PVC Drainage Pipe 20-inch Including Concrete
Encasement 254 LF
$140.00 $35,560.00
41 P.V.C. Pipe, 4-Inch 165 LF $30.00 $4,950.00
42 P.V.C. Pipe, 4-Inch Perforated 440 LF $35.00 $15,400.00
43 Roof Drain Outlet Boxes with P.C.C. Water Lid 5 EA $800.00 $4,000.00
44 Sidewalk Underdrain Pipe per SDRSD D-27 26 EA $210.00 $5,460.00
45 Bio-filtration Unit 1 EA $30,000.00 $30,000.00
46 Tree Well Filtration Unit 26 EA $6,000.00 $156,000.00
Subtotal:$311,050
47 Adjustment of Sewer Cleanout 32 EA $600.00 $19,200.00
48 Water Facilities Relocation/Adjustment 1 LS $145,000.00 $145,000.00
Subtotal:$164,200
49 Planting, Irrigation, and Furniture Elements 1 LS $456,020.00 $456,020.00
50 Electrical (From "E" Street North of "F" St) 1 LS $859,699.00 $859,699.00
Drainage Improvements
Utilities
Landscape, Lighting, Decorative Improvements
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No.Description Quantity Unit Unit Amount
Price
Collect Baseline Data
51
Tree Trimming of Existing Trees, Including Removal and
Re-installation of Any Holiday Lights, Décor, Straps and
Signs.
20 EA $800.00 $16,000.00
52
Painting of Existing Ornamental Lights (Single & Double),
Including Preparation, Removal and Re-installation of Any
Holiday Lights, Flag holder, Décor, Straps, Signs.
33 EA $800.00 $26,400.00
53 Adjust to Grade Existing Ornamental Lights, Including Any
Bolt Extention 33 EA $1,600.00 $52,800.00
54 Replace Existing Single Ornamental Light Bulb with
58Watts Induction Lamp 33 EA $1,300.00 $42,900.00
55 Salvage Existing Historic Signs, Dispose Post 2 EA $1,000.00 $2,000.00
56 Replace Existing Flagpole Holder 19 EA $575.00 $10,925.00
57 Furnish & Install Pedestrian Gateway Sign (A)2 EA $50,000.00 $100,000.00
58 Furnish & Install Vehicular Directional Signs ( C )4 EA $8,000.00 $32,000.00
59 Furnish & Install Mast Arm Directional Sign (D)1 EA $4,000.00 $4,000.00
60 Furnish & Install Parking Directional Sign (E)6 EA $10,000.00 $60,000.00
61 Furnish & Install Scooter Parking Sign 1 EA $6,000.00 $6,000.00
Subtotal:$1,668,744
62 Furnish and Install Parking Meter Posts Including painting 2 EA $1,000.00 $2,000.00
63 Relocate Existing Parking Meters, Including painting 3 EA $650.00 $1,950.00
64 Painting of Existing Parking Meter post/ pole 64 EA $200.00 $12,800.00
65 Salvage Existing Parking Meters Dispose Exist. Posts 2 EA $350.00 $700.00
66 Removal and Disposal of Existing Improvements 1 LS $220,000.00 $220,000.00
67 Road Construction and Trans Net Signs 4 EA $1,000.00 $4,000.00
68 Environmental Biological Survey Consultant Services 1 LS $11,000.00 $11,000.00
69 Public Convenience and Safety (Traffic Control)1 LS $190,000.00 $190,000.00
Subtotal:$442,450
Construction Subtotal:3,686,246$
Contingencies 12.0 % $3,686,246.00 442,350$
Total Construction Cost:4,128,596$
Construction Inspection (staff costs) 7.0 % $3,686,246.00 258,037$
Survey Work (staff costs- construction staking) 3.0 % $3,686,246.00 110,587$
Other (soil testing, environmental studies)2.0 % $3,686,246.00 73,725$
Design (staff costs) 2.5 % $3,686,246.00 92,156$
Landscape (Staff costs)1.0 % $3,686,246.00 36,862$
4,699,964$ GRAND TOTAL:
Miscellaneous
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE GRANT APPLICATION
FOR THE SMART GROWTH INCENTIVE PROGRAM –
CYCLE 4 THROUGH THE SAN DIEGO ASSOCIATION OF
GOVERNMENTS FOR PHASE 3 OF THE THIRD AVENUE
STREETSCAPE PROJECT FROM F STREET TO E STREET,
AND STATING THE CITY’S ASSURANCE TO COMPLETE
THE PROJECT
WHEREAS, $27 million of TransNet funding for Smart Growth Incentive Program
(SGIP) projects is available to local jurisdictions and the County of San Diego from Fiscal Years
2017-2019, and up to $1 million of the SGIP funding is available for the preparation of Climate
Action Plans (CAPs) and Complete Streets (CS) Policies; and
WHEREAS, $3.6 million of TransNet and Transportation Development Act (TDA)
funding for Active Transportation Grant Program (ATGP) projects is available to local
jurisdictions and the County of San Diego from Fiscal Years 2017-2019; and
WHEREAS, the City of Chula Vista wishes to receive grant funding from SANDAG; and
WHEREAS, the City of Chula Vista understands that, in order to be eligible to receive
grant funds for SGIP and ATGP projects, jurisdictions must have an adopted Climate Action
Plan (CAP) and Complete Streets (CS) Policy (or the equivalent) in place before grant funds will
be disbursed; and
WHEREAS, the City of Chula Vista certifies that it adopted a CAP in a public meeting
on September 26, 2017, per Resolution 2017-228, that includes measures to reduce greenhouse
gas (GHG) emissions to 1990 levels by 2020 and achieves further reductions beyond 2020
consistent with adopted regional or local GHG emissions reduction targets; and
WHEREAS, the City of Chula Vista certifies that it adopted a CS Policy, per Resolution
2015-198, in a public meeting on August 18, 2015, that is consistent with the California
Complete Streets Act;
WHEREAS, Third Avenue, between “H” Street and “E” Street is designated in the City’s
Urban Core Specific Plan as a Smart Growth area; and
WHEREAS, the goal of the Smart Growth Incentive Program (SGIP) Grant is to fund
comprehensive public infrastructure projects and facilitate compact, mixed-use, transit-oriented
development and increase housing and transportation choices; and
WHEREAS, on December 15, 2017, the SANDAG Board of Directors released the call
for projects for SGIP – Cycle 4; and
2018-05-15 Agenda Packet Page 118
WHEREAS, City staff has already prepared design plans for Third Avenue Streetscape –
Phase 3, that continues the design aspects incorporated into Phases 1 & 2, but also address new
storm water compliance requirements; and
WHEREAS, the construction of Phase 3 will complete the overall Third Avenue
Streetscape Project.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it amends the submittal of the following grant application to SANDAG.
Grant Program Project Name
Total Project Cost
(Grant Request +
Matching Funds)
Grant
Request
Matching
Funds
SGIP - Capital Third Avenue Streetscape
– Phase 3
$4,700,000 $2,500,000 $2,200,000
BE IT FURTHER RESOLVED that, if a grant award is made by SANDAG to fund this
project, the City of Chula Vista commits to providing the total match amounts identified per
project; and
BE IT FURTHER RESOLVED that, if a grant award is made by SANDAG, the City of
Chula Vista authorizes staff to accept the grant funds, execute the grant agreement with no
exceptions in substantially the same form as attached, and complete the Project.
Presented by Approved as to form by
William S. Valle Glen R. Googins
Director of Engineering &City Attorney
Capital Projects
EXHIBIT A - Grant Agreement Template with SANDAG
2018-05-15 Agenda Packet Page 119
GRANT AGREEMENT TEMPLATE for Information Only
SELECT APPLICABLE PROGRAM:
TransNet SMART GROWTH INCENTIVE PROGRAM – CAPITAL / PLANNING
OR TransNet SMART GROWTH INCENTIVE PROGRAM – CLIMATE ACTION PLAN
OR TransNet SMART GROWTH INCENTIVE PROGRAM – COMPLETE STREETS POLICY
OR TransNet ACTIVE TRANSPORTATION GRANT PROGRAM – CAPITAL / NON-CAPITAL
FOURTH FUNDING CYCLE
GRANT AGREEMENT AGREEMENT NUMBER BETWEEN
THE SAN DIEGO ASSOCIATION OF GOVERNMENTS AND
INSERT JURISDICTION NAME
REGARDING INSERT FULL PROJECT TITLE
THIS GRANT AGREEMENT Agreement Number (Agreement) is made this Day day of
Month, 2018, by and between the San Diego Association of Governments, 401 B Street, Suite 800,
San Diego, California, hereinafter referred to as SANDAG, and the Grant Recipient and Address,
hereinafter referred to as Grantee. SANDAG and Grantee are hereinafter collectively referred to as
the Parties. This agreement expires on Month Day, Year.
Note to Grant Recipient: This Agreement Template covers provisions for the Smart Growth Incentive
Program (SGIP) – Capital and Planning; SGIP – Climate Action Plan (CAP); SGIP – Complete Streets
Policy; and Active Transportation Grant Program (ATGP) – Capital and Non-Capital grant programs.
Prior to contract execution, the Grant Agreement will be tailored to reflect the applicable grant
program.
The following recitals are a substantive part of this Agreement:
Smart Growth Incentive Program, SGIP-Climate Action Plan Grant Program, and SGIP-Complete
Streets Policy Grant Program Recitals:
A.The SANDAG Board of Directors allocates funds under the TransNet local sales tax program to
support local transportation-related infrastructure projects in the San Diego region through a
competitive process.
B.The TransNet Extension Ordinance contains provisions to fund the Smart Growth Incentive
Program (SGIP) for which funding began on April 1, 2008. The SGIP encompasses projects that
better integrate transportation and land use and recognizes the comprehensive effort to
integrate smart growth place making, access to transit, and environmental justice.
C.In January 2010, the SANDAG Board of Directors approved Board Policy No. 035: Competitive
Grant Program Procedures, which is included as Attachment B. This Grant Award, Agreement
and the Grantee’s performance thereunder are subject to Board Policy No. 35, which includes
multiple “use it or lose it” provisions.
D.On December 15, 2017, SANDAG issued a call for projects from local jurisdictions in
San Diego County wishing to apply for a portion of the TransNet SGIP funds for use on capital
improvement and planning projects meeting certain criteria, and authorizing up to $1 million
CFP Release Date: December 15, 2017
2018-05-15 Agenda Packet Page 120
2
from the SGIP to be used for the development of climate action plans and complete streets
policies through two new subprograms.
E.On Month, Day, Year, the SANDAG Board of Directors approved a list of recommended SGIP,
SGIP-Climate Action Plan, or SGIP-Complete Streets projects for the fourth competitive grant
cycle, and one of those projects is the subject of this Agreement. The Scope of Work, Project
Schedule, and Approved Project Budget are included as Attachment A.
F.Grantee’s Project is funded with dollar amount in TransNet SGIP funds and is included in the
Regional Transportation Improvement Plan (RTIP). The TransNet MPO ID for the Project is
ID number.
G.The purpose of this Agreement is to establish the terms and conditions for SANDAG to
provide Grantee with funding to implement the Project.
H.Although SANDAG will be providing financial assistance to Grantee to support the Project,
SANDAG will not take an active role or retain substantial control of the Project. Therefore,
this Agreement is characterized as a funding agreement rather than a cooperative agreement.
I.Grantee understands that TransNet funds derive from retail transactions and use tax revenues
which fluctuate. The SANDAG funding commitment to SGIP Projects, including this Project, is
subject to these fluctuations, which may impact funding availability for this Project.
Active Transportation Grant Program Recitals:
A.The SANDAG Board of Directors allocates funds under the TransNet local sales tax program
and the Transportation Development Act (TDA) to support local bicycle and pedestrian
transportation projects in the San Diego region through a competitive process.
B.The TransNet Extension Ordinance contains provisions to fund the Bicycle, Pedestrian, and
Neighborhood Safety Program (BPNSP) for which funding began on July 1, 2008. The BPNSP
encompasses bicycle and pedestrian travel projects and recognizes the comprehensive effort
to integrate smart growth place making, access to transit and environmental justice.
C.Article 3 of the TDA provides funding for Bicycle and Pedestrian Facilities and Programs.
D.Together the TransNet BPNSP and TDA Article 3 funding are commonly referred to as the
SANDAG TransNet Active Transportation Grant Program (ATGP).
E.In January 2010, the SANDAG Board of Directors approved Board Policy No. 035: Competitive
Grant Program Procedures, which is included as Attachment B. This Grant Award, Agreement
and the Grantee’s performance thereunder are subject to Board Policy No. 035, which includes
multiple “use it or lose it” provisions.
F.On December 15, 2017, SANDAG issued a call for projects from local jurisdictions in
San Diego County wishing to apply for SANDAG ATGP funds for use on capital improvement
and planning projects meeting certain criteria.
G.On Month, Day, Year, the SANDAG Board of Directors approved a list of recommended ATGP
projects for the fourth competitive grant cycle, and one of those projects is the subject of this
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Agreement. The Scope of Work, Project Schedule, and Approved Project Budget are included
as Attachment A.
H.The SANDAG Board of Directors approved programming of approximately $3.6 million in TDA
funds on Month, Day, Year, by Resolution Number Resolution Number.
I.Grantee’s Project is funded with dollar amount in ATGP funds, which includes dollar amount
in TransNet BPNSP funds and is included in the Regional Transportation Improvement Plan
(RTIP), and dollar amount in TDA funds. The TransNet MPO ID for the Project is ID number and
the TDA Claim Number is ID number.
J.The purpose of this Agreement is to establish the terms and conditions for SANDAG to
provide Grantee with funding to implement the Project.
K.Although SANDAG will be providing financial assistance to Grantee to support the Project,
SANDAG will not take an active role or retain substantial control of the Project. Therefore,
this Agreement is characterized as a funding agreement rather than a cooperative agreement.
L.Grantee understands that TransNet funds derive from retail transactions and use tax revenues
which fluctuate. SANDAG’s funding commitment to ATGP Projects, including this Project, is
subject to these fluctuations, which may impact funding availability for this Project.
I.GRANT AWARD
A.The total amount payable to Grantee pursuant to this Agreement by SANDAG shall be the
proportion of actual Project costs allocated to grant funding in the Approved Project Budget
and shall not exceed the grant award of dollar amount.
B.It is agreed and understood that this Agreement fund limit is a ceiling and that SANDAG will
only reimburse the allowable cost of services actually rendered as authorized by SANDAG at
or below that fund limitation established herein.
II.APPROVED PROJECT BUDGET
Except to the extent that SANDAG determines otherwise in writing, the Grantee agrees as follows:
The Grantee and SANDAG have agreed to a Project budget that is designated the “Approved
Project Budget.” The Grantee and/or third-party contractor(s) will incur obligations and make
disbursements of Project funds only as authorized by the Approved Project Budget. An amendment
to the Approved Project Budget requires the issuance of a formal amendment to the Agreement
per Board Policy No. 035, unless the re-allocation of funds among budget items or fiscal years does
not increase the total amount of the funding awarded for the Project, does not negatively impact
the benefits obtained from the Project, and is consistent with applicable laws, regulations, and
policies. Prior written SANDAG Project Manager approval is required for transfers of funds between
approved project budget line items.
III.MATCHING FUNDS
Grantee agrees to provide matching funds in an amount of dollar amount percent of the actual cost
of the Project, estimated to be dollar amount based on the Approved Project Budget. If the actual
cost of the Project exceeds the Project budget, Grantee is responsible for 100 percent of the actual
cost greater than the budgeted cost.
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A.Availability of Grant Funding
Except where expressly allowed in writing herein, reimbursement of credits for local matching
funds will be made or allowed only for work performed on and after the Notice to Proceed
date and prior to the termination date of this Agreement, unless expressly permitted by
SANDAG, in writing.
B.Reduction of Matching Funds
The Grantee agrees that no refund of, or reduction in, the amount of matching funds may be
made unless a reduction of the proportional share of the grant funding provided under this
Agreement also is made to SANDAG.
C.Prompt Payment of Matching Funds
The Grantee agrees to complete all proceedings necessary to provide its share of the Project
costs at or before the time the matching funds are needed for Project costs. The Grantee
agrees to provide not less than its required match amount of Project costs on a proportional
basis as Project costs are incurred and coinciding with usual invoicing. Each of Grantee’s
invoices must include its proportional matching fund contribution, along with supporting,
descriptive and/or explanatory documentation for the matching funds provided such that the
Grantee maintains a cumulative match percentage no less than the required match
percentage as specified above.
IV.PROJECT MANAGERS
Grantee’s Project Manager is Project Manager.
The SANDAG Project Manager is Tracy Ferchaw.
Project manager continuity and experience is deemed essential in Grantee’s ability to carry out the
project in accordance with the terms of this Agreement. Grantee shall not change the project
manager without first providing written notice to SANDAG.
V.NOTICE
All notices required to be given, by either party to the other, shall be deemed fully given when
made in writing and received by the parties at their respective addresses:
San Diego Association of Governments
Attention: Tracy Ferchaw
401 B Street, Suite 800
San Diego, CA 92101
Grantee:
Jurisdiction Name
Attention: Project Manager
Address
City, CA, ZIP
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VI.PROJECT IMPLEMENTATION
A.General
The Grantee agrees to carry out the Project as follows:
1.Project Description. Grantee agrees to perform the work as described in the
Scope of Work included as Attachment A.
2.Effective Date. The effective date of this Agreement or any amendment hereto is the
date on which this Agreement or an amendment is fully executed. The Grantee agrees
to undertake Project work promptly after receiving a Notice to Proceed from SANDAG.
3.Grantee's Capacity. The Grantee agrees to maintain or acquire sufficient legal, financial,
technical, and managerial capacity to: (a) plan, manage, and complete the Project as
described in Attachment A and provide for the use of any Project property; (b) carry out
the safety and security aspects of the Project; and (c) comply with the terms of the
Agreement and all applicable laws, regulations, and policies pertaining to the Project
and the Grantee, including but not limited to the TransNet Extension Ordinance and
Board Policy No. 035.
4.Project Schedule. The Grantee agrees to complete the Project according to the
Project Schedule included in Attachment A and in compliance with Board Policy No. 035,
as amended, and included as Attachment B.
5.Project Implementation and Oversight. Grantee agrees to comply with the
Project Implementation and Oversight Requirements, included as Attachment C, and
Board Policy No. 035, as amended.
6.Changes to Project’s Scope of Work. This Agreement was awarded to Grantee based on
the application submitted by Grantee with the intention that the awarded funds would
be used to implement the Project as described in the Scope of Work (included in
Attachment A). Any substantive deviation from Grantee’s Scope of Work during project
implementation may require reevaluation or result in loss of funding. If Grantee knows
or should have known that substantive changes to the Project will occur or have
occurred, Grantee will immediately notify SANDAG in writing. SANDAG will then
determine whether the Project is still consistent with the overall objectives of the grant
program and whether the changes would have negatively affected the Project ranking
during the competitive grant evaluation process. SANDAG reserves the right to have
grant funding withheld from Grantee, or refunded to SANDAG, due to Grantee’s failure
to satisfactorily complete the Project or due to substantive changes to the Project.
7.Media and Community Outreach Coordination. The Grantee agrees to notify and/or
assist SANDAG of/with any media and community outreach efforts, including
presentations to community groups, other agencies, and elected officials and/or
community events related to the Project, such as ground breaking and ribbon cutting
activities. Press materials shall be provided to SANDAG staff for review before they are
distributed. SANDAG logo(s) should be included in press materials and other project
collateral based on SANDAG logo usage guidelines provided by SANDAG, but may never
be included in such documents without advance approval from SANDAG.
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As part of the quarterly reports submitted to SANDAG, the Grantee agrees to provide
project milestone information to support media outreach and communications efforts.
This includes project photos taken throughout the project at program events or as part
of project tasks. The photos should be high resolution (at least 4 inches by 6 inches with
a minimum of 300 pixels per inch) and contain captions with project descriptions, dates,
locations, and the names of those featured, if appropriate. SANDAG reserves the right
to use the information provided by the Grantee for any combination of the following,
including but not limited to: social media posts, online photo albums, videos, press
releases, PowerPoint presentations, web updates, newsletters, and testimonials. In
submitting photos to SANDAG, the Grantee agrees that the photos have been obtained
with the consent of all persons featured in the photo (or that of a parent or guardian of
persons under the age of 18) using the SANDAG Photo and Testimonial Release form to
be provided by SANDAG, or a similar release form developed by Grantee and agreed
upon by SANDAG, and to release the rights of the photos to SANDAG for its use.
8.Project Signage and Designation of TransNet Funded Facilities. Each capital project of
$250,000 or more funded in whole or in part by revenues from the TransNet Extension
Ordinance shall be clearly designated during its construction or implementation as being
provided by revenues from the TransNet Extension Ordinance.
Grantee agrees to follow the project signage specifications and to install appropriately
sized signs in the quantity called for by the TransNet Signage Guide (provided by
SANDAG). Grantee agrees to follow sign specifications and submit proof files to
SANDAG for approval before production.
9.Baseline Data Collection. For capital projects, Grantee is required to coordinate with
SANDAG staff on the development of a baseline data collection plan in accordance with
the Project Implementation and Oversight Requirements.
B.Application of Laws
Should a federal or state law pre-empt a local law, regulation, or the TransNet Extension
Ordinance, the Grantee must comply with the federal or state law and implementing
regulations. No provision of this Agreement requires the Grantee to observe or enforce
compliance with any provision, perform any other act, or do any other task in contravention
of federal, state, territorial, or local law, regulation, or ordinance. If compliance with any
provision of this Agreement violates or would require the Grantee to violate any law, the
Grantee agrees to notify SANDAG immediately in writing. Should this occur, SANDAG and the
Grantee agree that they will make appropriate arrangements to proceed with or, if necessary,
terminate the Project or affected portions thereof expeditiously.
C.Changes in Project Performance
The Grantee agrees to notify SANDAG immediately, in writing, of any change in local law,
conditions (including its legal, financial, or technical capacity), or any other event that may
adversely affect the Grantee's ability to perform the Project in accordance with the terms of
the Agreement and as required by Board Policy No. 035. The Grantee also agrees to notify
SANDAG immediately, in writing, of any current or prospective major dispute, breach, default,
or litigation that may adversely affect SANDAG's interests in the Project; and agrees to inform
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SANDAG, also in writing, before naming SANDAG as a party to litigation for any reason, in
any forum. At a minimum, the Grantee agrees to send each notice to SANDAG required by
this subsection to SANDAG’s Office of General Counsel.
D.Notice Regarding Prevailing Wages
This Project is funded in whole or in part by TransNet revenues consistent with the TransNet
Extension Ordinance adopted by the voters in November 2004 (SANDAG Ordinance 04-01).
Although SANDAG Ordinance 04-01 does not require payment of prevailing wages, California
law may require that Grantee’s public works projects pay prevailing wages for workers.
Grantee acknowledges that SANDAG has strongly encouraged Grantee to seek legal counsel
regarding whether the Project will be subject to prevailing wage laws consistent with Labor
Code Section 1720, et seq. This Agreement requires Grantee’s compliance with all federal,
state, and local laws and ordinances as applicable.
E.Standard of Care
Grantee expressly warrants that the work to be performed pursuant to this Agreement shall
be performed in accordance with the applicable standard of care. Where approval by
SANDAG, its Executive Director, or other representative of SANDAG is indicated in the Scope
of Work, it is understood to be conceptual approval only and does not relieve the Grantee of
responsibility for complying with all laws, codes, industry standards, and liability for damages
caused by negligent acts, errors, omissions, noncompliance with industry standards, or the
willful misconduct of the Grantee or its subgrantees.
F.Third-Party Contracting
Although the Grantee may delegate any or almost all Project responsibilities to one or more
third-party contractors, the Grantee agrees that it, rather than any third-party contractor, is
ultimately responsible for compliance with all applicable laws, regulations, and this
Agreement.
1.Competitive Procurement. Grantee shall not award contracts over $3,000 on the basis of
a noncompetitive procurement for work to be performed under this Agreement without
the prior written approval of SANDAG. Contracts awarded by Grantee, if intended as
local match credit, must meet the requirements set forth in this Agreement regarding
local match funds.
If Grantee hires a third-party contractor to carry out work funded under this Agreement,
Grantee shall: prepare an Independent Cost Estimate prior to soliciting proposals/bids;
publicly advertise for competing proposals/bids for the work; for professional services,
use cost as an evaluation factor in selecting the third-party contractor and for
construction services, award the work to the lowest responsive and responsible bidder;
document a Record of Negotiation establishing that the amount paid by Grantee for the
work is fair and reasonable; and pass through the relevant obligations in this
Agreement to the contractor.
2.Debarment. Grantee shall execute and cause their third-party contractors to execute
debarment and suspension certificates stating they have not been disqualified from
doing business with government entities.
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3.Flowdown. Grantee agrees to take appropriate measures necessary, including the
execution of a subagreement, lease, third-party contract, or other, to ensure that all
Project participants, including alternate payees or third-party contractors at any tier,
comply with all applicable federal laws, regulations, policies affecting Project
implementation and Agreement requirements. In addition, if an entity other than the
Grantee is expected to fulfill any responsibilities typically performed by the Grantee, the
Grantee agrees to assure that the entity carries out the Grantee’s responsibilities as set
forth in this Agreement.
4.No SANDAG Obligations to Third-Parties. In connection with the Project, the Grantee
agrees that SANDAG shall not be subject to any obligations or liabilities to any
subgrantee, lessee, third-party contractor at any tier or other person or entity that is not
a party to the Agreement for the Project. Notwithstanding that SANDAG may have
concurred in or approved any solicitation, subagreement, lease, alternate payee
designation, or third-party contract at any tier, SANDAG has no obligations or liabilities
to any entity other than the Grantee.
5.Equipment Purchases. Grantee shall maintain ownership of any equipment purchased
using Agreement funding and shall use such the equipment only for the purposes set
forth in this Agreement. The parties agree to meet and confer in good faith to ensure
the continued use of the equipment for the purposes intended, which may include
reimbursement to SANDAG when the fair market value of the equipment at Project
completion exceeds $5,000.
SANDAG and Grantee agree that Grantee shall keep an inventory record for each piece
of equipment purchased under this Agreement and maintain each piece of equipment
in good operating order consistent with the purposes for which they were intended.
SANDAG shall have the right to conduct periodic maintenance inspections for the
purpose of confirming the existence, condition, and proper maintenance of the
equipment.
VII.ETHICS
A.Grantee Code of Conduct/Standards of Conduct
The Grantee agrees to maintain a written code of conduct or standards of conduct that shall
govern the actions of its officers, employees, council or board members, or agents engaged in
the award or administration of subagreements, leases, or third-party contracts supported with
grant funding. The Grantee agrees that its code of conduct or standards of conduct shall
specify that its officers, employees, council or board members, or agents may neither solicit
nor accept gratuities, favors, or anything of monetary value from any present or potential
subgrantee, lessee, or third-party contractor at any tier or agent thereof. The Grantee may set
de minimis rules where the financial interest is not substantial, or the gift is an unsolicited
item of nominal intrinsic value. The Grantee agrees that its code of conduct or standards of
conduct shall also prohibit its officers, employees, board members, or agents from using their
respective positions in a manner that presents a real or apparent personal or organizational
conflict of interest or personal gain. As permitted by state or local law or regulations, the
Grantee agrees that its code of conduct or standards of conduct shall include penalties,
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sanctions, or other disciplinary actions for violations by its officers, employees, council or
board members, or their agents, or its third-party contractors or subgrantees or their agents.
B.Personal Conflicts of Interest
The Grantee agrees that its code of conduct or standards of conduct shall prohibit the
Grantee's employees, officers, council or board members, or agents from participating in the
selection, award, or administration of any third-party contract or subagreement supported by
grant funding if a real or apparent conflict of interest would be involved. Such a conflict
would arise when an employee, officer, board member, or agent, including any member of his
or her immediate family, partner, or organization that employs, or intends to employ, any of
the parties listed herein has a financial interest in a firm competing for award.
C.Organizational Conflicts of Interest
The Grantee agrees that its code of conduct or standards of conduct shall include procedures
for identifying and preventing real and apparent organizational conflicts of interest. An
organizational conflict of interest exists when the nature of the work to be performed under
a proposed third-party contract or subagreement may, without some restrictions on future
activities, result in an unfair competitive advantage to the third-party contractor or
subgrantee or impair its objectivity in performing the contract work.
D.SANDAG Code of Conduct
SANDAG has established policies concerning potential conflicts of interest. These policies
apply to Grantee. For all awards by SANDAG, any practices which might result in unlawful
activity are prohibited including, but not limited to, rebates, kickbacks, or other unlawful
considerations. SANDAG staff members are specifically prohibited from participating in the
selection process when those staff have a close personal relationship, family relationship, or
past (within the last 12 months), present, or potential business or employment relationship
with a person or business entity seeking a contract with SANDAG. It is unlawful for any
contract to be made by SANDAG if any individual Board member or staff has a prohibited
financial interest in the contract. Staff also are prohibited from soliciting or accepting
gratuities from any organization seeking funding from SANDAG. SANDAG’s officers,
employees, agents, and board members shall not solicit or accept gifts, gratuities, favors, or
anything of monetary value from consultants, potential consultants, or parties to
subagreements. By signing this Agreement, Grantee affirms that it has no knowledge of an
ethical violation by SANDAG staff or Grantee. If Grantee has any reason to believe a conflict
of interest exists with regard to the Agreement or the Project, it should notify the SANDAG
Office of General Counsel immediately.
E.Bonus or Commission
The Grantee affirms that it has not paid, and agrees not to pay, any bonus or commission to
obtain approval of its grant funding application for the Project.
F.False or Fraudulent Statements or Claims
The Grantee acknowledges and agrees that by executing the Agreement for the Project, the
Grantee certifies or affirms the truthfulness and accuracy of each statement it has made, it
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makes, or it may make in connection with the Project, including, but not limited to, the
Grantee’s grant application, progress reports and invoices.
VIII. PAYMENTS
A.Method of Payment
The method of payment for this Agreement will be based upon actual allowable costs
described herein.
B.Alternate Payee
If the Grantee designates a party as an Alternate Payee, Alternate Payee is authorized to
submit payment requests directly to SANDAG to receive reimbursement for allowable Project
costs. This does not alleviate Grantee from all obligations under this Grant Agreement.
C.Invoicing
Grantee or Alternate Payee is required to submit invoices quarterly. Invoices must be
accompanied by a quarterly report (template to be provided by SANDAG). SANDAG will make
payments for eligible amounts to Grantee or Alternate Payee as promptly as SANDAG fiscal
procedures permit upon receipt of Grantee’s or Alternate Payee’s itemized signed invoice(s).
SANDAG shall retain 10 percent from the amounts invoiced until satisfactory completion of
work. SANDAG shall promptly pay retention amounts to Grantee or Alternate Payee following
satisfactory completion of work, receipt of final invoice, and all required documentation.
D.Eligible Costs
The Grantee agrees that Project costs eligible for grant funding must comply with the following
requirements, unless SANDAG determines otherwise in writing. To be eligible for
reimbursement, Project costs must be:
1.Consistent with the Project Scope of Work, the Approved Project Budget, and other
provisions of the Agreement.
2.Necessary in order to accomplish the Project.
3.Reasonable for the goods or services purchased.
4.Actual net costs to the Grantee (i.e., the price paid minus any refunds, rebates, or other
items of value received by the Grantee that have the effect of reducing the cost actually
incurred, excluding program income). Project generated revenue realized by the
Grantee shall be used in support of the Project. Project generated revenue and
expenditures, if any, shall be reported at the end of the Agreement period.
5.Incurred for work performed on or after the SANDAG Notice to Proceed date, and
before the termination date, and also must have been paid for by the Grantee.
6.Satisfactorily documented with supporting documentation, which is to be submitted
with each invoice.
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7.Treated consistently in accordance with generally accepted accounting principles and
procedures for the Grantee and any third-party contractors and subgrantees,
(see Section entitled “Accounting Records”).
8.Eligible for grant funding as part of the grant program through which the funds were
awarded.
9.Indirect Costs are only allowable with prior SANDAG approval. Grantee must submit the
following documentation as part of the grant application materials: (1) an indirect cost
allocation audit approved by a qualified independent auditor or (2) the applicant’s
proposed method for allocating indirect costs in accordance with federal guidelines.
Indirect cost allocation plans must be reviewed and renewed annually.
E.Excluded Costs
Certain costs associated with bike and pedestrian projects that do not directly benefit people
walking and biking are ineligible. These ineligible expenses include, but are not limited to:
curb, gutter, and other drainage improvements; newly installed driveway ramps; roadway
shoulders, where roadway design standards require a roadway shoulder width at least as wide
as would be required for a standard bike lane; and any required element under a different
capital improvement project other than the Project. Expenses related to the replacement of
existing infrastructure as a result of Project work may be eligible for reimbursement, but
Grantee will be required to justify the necessary inclusion of such improvements prior to
requesting reimbursement.
The Grantee understands and agrees that payment to the Grantee for any Project cost does
not constitute SANDAG’s final decision about whether that cost is allowable and eligible for
payment under the Project and does not constitute a waiver of any violation by the Grantee
of the terms of this Agreement or Board Policy No. 035. The Grantee acknowledges that
SANDAG will not make a final determination about the allowability and eligibility of any cost
until the final payment has been made on the Project or the results of an audit of the Project
requested by SANDAG or its Independent Taxpayers’ Oversight Committee (ITOC) has been
completed, whichever occurs latest. If SANDAG determines that the Grantee is not entitled to
receive any portion of the grant funding requested or paid, SANDAG will notify the Grantee
in writing, stating its reasons. The Grantee agrees that Project closeout will not alter the
Grantee's responsibility to return any funds due to SANDAG as a result of later refunds,
corrections, performance deficiencies, or other similar actions; nor will Project closeout alter
SANDAG's right to disallow costs and recover funds provided for the Project on the basis of a
later audit or other review. Upon notification to the Grantee that specific amounts are owed
to SANDAG, whether for excess payments of grant funding, disallowed costs, or funds
recovered from third parties or elsewhere, the Grantee agrees to promptly remit to SANDAG
the amounts owed, including applicable interest, penalties and administrative charges.
IX. ACCOUNTING, REPORTING, RECORD RETENTION, AND ACCESS
A.Project Accounts
The Grantee and/or Alternate Payee agree to establish and maintain for the Project either a
separate set of accounts or separate accounts within the framework of an established
accounting system that can be identified with the Project. The Grantee and/or Alternate
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Payee also agree to maintain documentation of all checks, payrolls, invoices, contracts,
vouchers, orders, or other accounting documents related in whole or in part to the Project so
that they may be clearly identified, readily accessible, and available to SANDAG upon request
and, to the extent feasible, kept separate from documents not related to the Project.
B.Reports
The Grantee agrees to submit to SANDAG all reports required by law and regulation, policy,
this Agreement, and any other reports SANDAG may specify. SANDAG reserves the right to
specify that records be submitted in particular formats.
C.Quarterly Reports
Grantee shall submit written quarterly reports to SANDAG detailing the progress of its work,
expenditures incurred, and information regarding whether the Project is projected to be
completed within the limits of the Approved Project Budget, Project Schedule, and consistent
with Board Policy No. 035 and any policy amendments thereto. Grantee shall document the
progress and results of work performed under this Agreement to the satisfaction of SANDAG.
This includes progress and final reports, plans, specifications, estimates, and other evidence of
attainment of the Agreement objectives, which are requested by SANDAG or ITOC. Grantee
may be required to attend meetings of SANDAG staff and committees, including but not
limited to ITOC, the Regional Planning Committee, the Transportation Committee, and the
SANDAG Board of Directors, to report on its progress and respond to questions.
D.Record Retention
During the course of the Project and for three years thereafter from the date of
transmission of the final expenditure report, the Grantee agrees to maintain, intact and
readily accessible, all communications, data, documents, reports, records, contracts, and
supporting materials relating to the Project, as SANDAG may require. All communications
and information provided to SANDAG become the property of SANDAG and public records,
as such, may be subject to public review. Please see SANDAG’s Board Policy 015: Records
Management Policy, which is available at www.sandag.org/legal, for information regarding
the treatment of documents designated as confidential.
E.Access to Records of Grantees and Subgrantees
The Grantee agrees to permit, and require its subgrantees to permit, SANDAG or its
authorized representatives, upon request, to inspect all Project work, materials, payrolls, and
other data, and to audit the books, records, and accounts of the Grantee and its subgrantees
pertaining to the Project.
F.Communities Served Data and Reporting
If requested, Grantee shall provide SANDAG with data regarding how the Project’s benefits
and burdens were equitably distributed among socio and economic populations in the area
affected by the Project, and associated smart growth data, and/or any other relevant
information.
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X. PROJECT COMPLETION, AUDIT, SETTLEMENT, AND CLOSEOUT
A.Project Completion
Within 90 calendar days following Project completion or termination by SANDAG, the Grantee
agrees to submit a final certification of Project expenses and final reports, as applicable. All
payments made to the Grantee shall be subject to review for compliance by SANDAG with the
requirements of this Agreement and shall be subject to an audit upon completion of the Project.
B.Project Audit
Note to Grant Recipient: Only the applicable sections will be included.
For TransNet-funded projects:
The Grantee agrees to have financial and compliance audits performed as SANDAG may require
consistent with the TransNet Extension Ordinance. The Grantee agrees that Project closeout will
not alter the Grantee's audit responsibilities. Audit costs are allowable Project costs.
For TDA-funded projects:
The Grantee agrees to have financial and compliance audits performed as SANDAG may require
consistent with Public Utilities Code Section 99245, for TDA funds; and consistent with the
TransNet Extension Ordinance for TransNet funds. The Grantee agrees that Project closeout will
not alter the Grantee's audit responsibilities. Audit costs are allowable Project costs.
C.Performance Audit
The Grantee agrees to cooperate with SANDAG or ITOC with regard to any performance audit
that is performed on the Project pursuant to the TransNet Ordinance.
D.Project Closeout
Project closeout occurs when SANDAG notifies the Grantee that SANDAG has closed the
Project, and, if applicable, either forwards the final grant funding payment and or
acknowledges that the Grantee has remitted the proper refund. The Grantee agrees that
Project closeout by SANDAG does not invalidate any continuing requirements imposed by the
Agreement or any unmet requirements set forth in a written notification from SANDAG.
E.Project Use
Grantee was awarded this Agreement based on representations in its grant application
regarding the Project’s intended use. If the Project is a capital project, Grantee hereby
commits to continued use of the Project for the purposes stated in its application for a period
of at least five years after completion of construction. SANDAG may require Grantee to
refund grant funding provided for the Project in the event Grantee fails to use the Project for
its intended purposes as stated in the grant application or for any disallowed costs.
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XI. TIMELY PROGRESS AND RIGHT OF SANDAG TO TERMINATE
A.Grantee shall make diligent and timely progress toward completion of the Project within the
timelines set forth in the Project Schedule, and consistent with Board Policy No. 035 and any
policy amendments thereto.
B.In the event Grantee encounters or anticipates difficulty in meeting the Project Schedule, the
Grantee shall immediately notify the SANDAG Project Manager in writing, and shall provide
pertinent details, including the reason(s) for the delay in performance and the date by which
Grantee expects to complete performance or delivery. This notification shall be informational
in character only and receipt of it shall not be construed as a waiver by SANDAG of a project
delivery schedule or date, or any rights or remedies provided by this Agreement, including
Board Policy No. 035 requirements.
C.Grantee agrees that SANDAG, at its sole discretion, may suspend or terminate all or any part
of the grant funding if the Grantee fails to make reasonable progress on the Project and/or
violates the terms of the Agreement or Board Policy No. 035, or if SANDAG determines that
the purpose of the laws or policies authorizing the Project would not be adequately served by
the continuation of grant funding for the Project.
D.In general, termination of grant funding for the Project will not invalidate obligations
properly incurred by the Grantee before the termination date to the extent those obligations
cannot be canceled. If, however, SANDAG determines that the Grantee has willfully misused
grant funding by failing to make adequate progress, or failing to comply with the terms of
the Agreement, SANDAG reserves the right to require the Grantee to refund to SANDAG the
entire amount of grant funding provided for the Project or any lesser amount as SANDAG
may determine.
E.Expiration of any Project time period established in the Project Schedule will not, by itself,
automatically constitute an expiration or termination of the Agreement for the Project, however,
Grantee must request and SANDAG may agree to amend the Agreement in writing if the Project
Schedule will not be met. An amendment to the Project Schedule may be made at SANDAG’s
discretion if Grantee’s request is consistent with the provisions of Board Policy No. 035.
XII. CIVIL RIGHTS
The Grantee agrees to comply with all applicable civil rights laws, regulations and policies and shall
include the provisions of this section in each subagreement, lease, third-party contract or other
legally binding document to perform work funded by this Agreement. Applicable civil rights laws,
regulations and policies include, but are not limited to, the following:
A.Nondiscrimination
SANDAG implements its programs without regard to income level, disability, race, color, and
national origin in compliance with the Americans with Disabilities Act and Title VI of the Civil
Rights Act. Grantee shall prohibit discrimination on these grounds, notify the public of their
rights under these laws, and utilize a process for addressing complaints of discrimination.
Furthermore, Grantee shall make the procedures for filing a complaint available to members
of the public and will keep a log of all such complaints. Grantee must notify SANDAG
immediately if a complaint is lodged that relates to the Project or program funded by this
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grant. If Grantee receives a Title VI-related or ADA-related complaint, Grantee must notify
SANDAG in writing within 72 hours of receiving the complaint so that SANDAG can determine
whether it needs to carry out its own investigation.
B.Equal Employment Opportunity
During the performance of this Agreement, Grantee and all of its subcontractors, if any, shall
not unlawfully discriminate, harass, or allow harassment, against any employee or applicant for
employment because of sex, race, color, ancestry, religious creed, national origin, disability
(including HIV and AIDS), mental disability, medical condition (cancer), age (over 40), marital
status, denial of family and medical care leave, denial of pregnancy disability leave, veteran
status, or sexual orientation. Grantee and its subcontractors shall ensure that the evaluation and
treatment of their employees and applicants for employment are free from such discrimination
and harassment. Grantee and its subcontractors shall comply with the provisions of the Fair
Employment and Housing Act (California Government Code Section 12900, et seq.) and the
applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section
7285.0, et seq.). The applicable regulations of the Fair Employment and Housing Commission
implementing California Government Code Section 12990 (a-f), set forth in Chapter 5 of Division
4 of Title 2 of the California Code of Regulations, are incorporated into this Agreement by this
reference and are made a part hereof as if set forth in full. Grantee and its subcontractors shall
give written notice of their obligations under this clause to labor organizations with which they
have a collective bargaining or other agreement.
XIV. DISPUTES AND VENUE
A.Choice of Law
This Agreement shall be interpreted in accordance with the laws of the State of California.
B.Dispute Resolution Process
In the event Grantee has a dispute with SANDAG during the performance of this Agreement,
Grantee shall continue to perform unless SANDAG informs Grantee in writing to cease
performance. The dispute resolution process for disputes arising under this Agreement shall
be as follows:
1. Grantee shall submit a statement of the grounds for the dispute, including all pertinent
dates, names of persons involved, and supporting documentation, to SANDAG’s Project
Manager. The Project Manager and other appropriate SANDAG staff will review the
documentation in a timely manner and reply to Grantee within 20 calendar days. Upon
receipt of an adverse decision by SANDAG, Grantee may submit a request for
reconsideration to SANDAG’s Executive Director. The request for reconsideration must
be received within ten calendar days from the postmark date of SANDAG’s reply. The
Executive Director will respond in writing to the request for reconsideration within ten
working days.
2. If Grantee is dissatisfied with the results following exhaustion of the above dispute
resolution procedures, Grantee shall make a written request to SANDAG for appeal to
the SANDAG Regional Planning Committee for SGIP projects or to the SANDAG
Transportation Committee for ATGP projects. SANDAG shall respond to a request for
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mediation within 30 calendar days. The decision of the Regional Planning Committee or
Transportation Committee shall be final.
C.Venue
If any action is brought to interpret or enforce any term of this Agreement, the action shall be
brought in a state or federal court situated in the County of San Diego, State of California. In
the event of any such litigation between the parties, the prevailing party shall be entitled to
recover all reasonable costs incurred, including reasonable attorney’s fees, litigation and
collection expenses, witness fees, and court costs as determined by the court.
XV. ASSIGNMENT
Grantee shall not assign, sublet, or transfer (whether by assignment or novation) this Agreement or
any rights under or interest in this Agreement.
XVI. INSURANCE
Grantee shall procure and maintain during the period of performance of this Agreement, and for
12 months following completion, policies of insurance from insurance companies authorized to do
business in the State of California or the equivalent types and amounts of self-insurance, as follows:
A.General Liability
Combined single limit of $1,000,000 per occurrence and $2,000,000 general aggregate for
personal and bodily injury, including death, and broad form property damage. The policy
must include an acceptable “Waiver of Transfer Rights of Recovery Against Others
Endorsement.” The policy must name SANDAG as an additional insured in the endorsement. A
deductible or retention may be utilized, subject to approval by SANDAG.
B.Automobile Liability
For personal and bodily injury, including death, and property damage in an amount not less
than $1,000,000.
C.Workers’ Compensation and Employer’s Liability
Policy must comply with the laws of the State of California. The policy must include an
acceptable “Waiver of Right to Recover from Others Endorsement” naming SANDAG as an
additional insured.
D.Other Requirements
Grantee shall furnish satisfactory proof by one or more certificates (original copies) that it has
the foregoing insurance. The insurance shall be provided by an acceptable insurance provider,
as determined by SANDAG, which satisfies the following minimum requirements:
1.An insurance carrier qualified to do business in California and maintaining an agent for
service of process within the state. Such insurance carrier shall maintain a current
A.M. Best rating classification of “A-” or better, and a financial size of “$10 million to
$24 million (Class V) or better,” or
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2.A Lloyds of London program provided by syndicates of Lloyds of London and other
London insurance carriers, providing all participants are qualified to do business in
California and the policy provides for an agent for service of process in California.
E.Certificates of insurance shall be filed with SANDAG. These policies shall be primary insurance
as to SANDAG so that any other coverage held by SANDAG shall not contribute to any loss
under Grantee’s insurance. Insurance policies shall not be canceled without first giving 30 days
advance written notice to SANDAG. For purposes of this notice requirement, any material
change in the policy prior to its expiration shall be considered a cancellation.
XVII. INDEMNIFICATION AND HOLD HARMLESS
A.Generally
With regard to any claim, protest, or litigation arising from or related to the Grantee’s
performance in connection with or incidental to the Project or this Agreement, Grantee
agrees to defend, indemnify, protect, and hold SANDAG and its agents, officers, Board
members, and employees harmless from and against any and all claims, including, but not
limited to prevailing wage claims against the Project, asserted or established liability for
damages or injuries to any person or property, including injury to the Grantee’s or its
subgrantees’ employees, agents, or officers, which arise from or are connected with or are
caused or claimed to be caused by the negligent, reckless, or willful acts or omissions of the
Grantee and its subgrantees and their agents, officers, or employees, in performing the work
or services herein, and all expenses of investigating and defending against same, including
attorney fees and costs; provided, however, that the Grantee’s duty to indemnify and hold
harmless shall not include any claims or liability arising from the established sole negligence
or willful misconduct of SANDAG, its Board of Directors, agents, officers, or employees.
B.Intellectual Property
Upon request by SANDAG, the Grantee agrees to indemnify, save, and hold harmless SANDAG
and its Board of Directors, officers, agents, and employees acting within the scope of their
official duties against any liability, including costs and expenses, resulting from any willful or
intentional violation by the Grantee of proprietary rights, copyrights, or right of privacy,
arising out of the publication, translation, reproduction, delivery, use, or disposition of any
data furnished under the Project. The Grantee shall not be required to indemnify SANDAG for
any such liability caused solely by the wrongful acts of SANDAG employees or agents.
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XVIII. INDEPENDENT CONTRACTOR
A. Status of Grantee
Grantee shall perform the services provided for within this Agreement as an independent
contractor, and not as an employee of SANDAG. Grantee shall be under the control of
SANDAG as to the result to be accomplished and not the means, and shall consult with
SANDAG as provided for in the Scope of Work. The payments made to Grantee pursuant to
this Agreement shall be the full and complete compensation to which Grantee is entitled.
SANDAG shall not make any federal or state tax withholdings on behalf of Grantee. SANDAG
shall not be required to pay any workers’ compensation insurance on behalf of Grantee.
Grantee agrees to indemnify SANDAG for any tax, retirement contribution, social security,
overtime payment, or workers’ compensation payment which SANDAG may be required to
make on behalf of Grantee or any employee of Grantee for work done under this Agreement.
B. Actions on behalf of SANDAG
Except as SANDAG may specify in writing, Grantee shall have no authority, express or implied,
to act on behalf of SANDAG in any capacity whatsoever, as an agent or otherwise. Grantee
shall have no authority, express or implied, to bind SANDAG or its members, agents, or
employees, to any obligation whatsoever, unless expressly provided for in this Agreement.
XIX. SEVERABILITY AND INTEGRATION
If any provision of the Agreement is determined invalid, the remainder of that Agreement shall not
be affected if that remainder would continue to conform to the requirements of applicable laws or
regulations. This Agreement represents the entire understanding of SANDAG and Grantee as to
those matters contained in it. No prior oral or written understanding shall be of any force or effect
with respect to those matters covered herein. This Agreement may not be modified or altered
except in writing, signed by SANDAG and the Grantee.
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XX. SIGNATURES
The individuals executing this Agreement represent and warrant that they have the legal capacity
and authority to do so on behalf of their respective legal entities.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date written above.
SAN DIEGO ASSOCIATION OF GOVERNMENTS JURISDICTION NAME
KIM KAWADA OR DESIGNEE
Chief Deputy Executive Director
FULL NAME
Title
APPROVED AS TO FORM: APPROVED AS TO FORM:
Office of General Counsel Full Name
Title
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ATTACHMENT A
Scope of Work, Schedule, and Approved Project Budget
Project Location
(Specific project location including jurisdiction, community, neighborhood, corridors, and
intersections)
Project Description
(Project type [design and/or construction, master plan, etc.], types of
improvements/recommendations, project goals)
(Insert Scope, Schedule, and Approved Project Budget)
TransNet MPO ID NO._________
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ATTACHMENT B
BOARD POLICY NO. 035
COMPETITIVE GRANT PROGRAM PROCEDURES
Applicability and Purpose of Policy
This Policy applies to all grant programs administered through SANDAG, whether from TransNet or
another source, including but not limited to the Smart Growth Incentive Program, Environmental
Mitigation Program, Bike and Pedestrian Program, Senior Mini Grant Program, Federal Transit
Administration grant programs, and Active Transportation Grant Program.
Nothing in this Policy is intended to supersede federal or state grant rules, regulations, statutes, or
contract documents that conflict with the requirements in this Policy. There are never enough
government grant funds to pay for all of the projects worthy of funding in the San Diego region. For
this reason, SANDAG awards grant funds on a competitive basis that takes the grantees’ ability to
perform their proposed project on a timely basis into account. SANDAG intends to hold grantees
accountable to the project schedules they have proposed in order to ensure fairness in the competitive
process and encourage grantees to get their projects implemented quickly so that the public can
benefit from the project deliverables as soon as possible.
Procedures
1. Project Milestone and Completion Deadlines
1.1. When signing a grant agreement for a competitive program funded and/or administered
by SANDAG, grant recipients must agree to the project delivery objectives and schedules
in the agreement. In addition, a grantee’s proposal must contain a schedule that falls
within the following deadlines. Failure to meet the deadlines below may result in
revocation of all grant funds not already expended. The final invoice for capital, planning,
or operations grants must be submitted prior to the applicable deadline.
1.1.1. Funding for Capital Projects. If the grant will fund a capital project, the project
must be completed according to the schedule provided in the grant agreement,
but at the latest, any necessary construction contract must be awarded within two
years following execution of the grant agreement, and construction must be
completed within eighteen months following award of the construction contract.
Completion of construction for purposes of this policy shall be when the prime
construction contractor is relieved from its maintenance responsibilities. If no
construction contract award is necessary, the construction project must be
complete within eighteen months following execution of the grant agreement.
1.1.2. Funding for Planning Grants. If the grant will fund planning, the project must be
completed according to the schedule provided in the grant agreement, but at the
latest, any necessary consultant contract must be awarded within one year
following execution of the grant agreement, and the planning project must be
complete within two years following award of the consultant contract. Completion
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of planning for purposes of this policy shall be when grantee approves the final
planning project deliverable. If no consultant contract award is necessary, the
planning project must be complete within two years of execution of the grant
agreement.
1.1.3 Funding for Operations Grants. If the grant will fund operations, the project must
be completed according to the schedule provided in the grant agreement, but at
the latest, any necessary services contract for operations must be awarded within
one year following execution of the grant agreement, and the operations must
commence within six months following award of the operations contract. If no
services contract for operations is necessary, the operations project must
commence within one year of execution of the grant agreement.
1.1.4 Funding for Equipment or Vehicles Grants. If the grant will fund equipment or
vehicles, the project must be completed according to the schedule provided in
the grant agreement, but at the latest, any necessary purchase contracts for
equipment or vehicles must be awarded within one year following execution of
the grant agreement, and use of the equipment or vehicles for the benefit of the
public must commence within six months following award of the purchase
contract.
2. Project Milestone and Completion Deadline Extensions
2.1. Schedules within grant agreements may include project scopes and schedules that will
identify interim milestones in addition to those described in Section 1 of this Policy.
Grant recipients may receive extensions on their project schedules of up to six months
for good cause. Extensions of up to six months aggregate that would not cause the
project to miss a completion deadline in Section 1 may be approved by the SANDAG
Executive Director. Extensions beyond six months aggregate or that would cause the
project to miss a completion deadline in Section 1 must be approved by the Policy
Advisory Committee that has been delegated the necessary authority by the Board. For
an extension to be granted under this Section 2, the following conditions must be met:
2.1.1. For extension requests of up to six months, the grantee must request the
extension in writing to the SANDAG Program Manager at least two weeks prior
to the earliest project schedule milestone deadline for which an extension is
being requested. The Executive Director or designee will determine whether the
extension should be granted. The Executive Director’s action will be reported
out to the Board in following month’s report of delegated actions.
2.1.2. A grantee seeking an extension must document previous efforts undertaken to
maintain the project schedule, explain the reasons for the delay, explain why
the delay is unavoidable, and demonstrate an ability to succeed in the extended
time frame the grantee proposes.
2.1.3. If the Executive Director denies an extension request under this Section 2, the
grantee may appeal within ten business days of receiving the Executive
Director’s response to the responsible Policy Advisory Committee by sending the
appeal to the SANDAG Program Manager.
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2.1.4. Extension requests that are rejected by the Policy Advisory Committee will result
in termination of the grant agreement and obligation by the grantee to return
to SANDAG any unexpended funds within 30 days. Unexpended funds are funds
for project costs not incurred prior to rejection of the extension request by the
Policy Advisory Committee.
3. Project Delays and Extensions in Excess of Six Months
3.1. Requests for extensions in excess of six months, or that will cause a project to miss a
completion deadline in Section 1 (including those projects that were already granted
extensions by the Executive Director and are again falling behind schedule), will be
considered by the Policy Advisory Committee upon request to the SANDAG Program
Manager.
3.2 A grantee seeking an extension must document previous efforts undertaken to
maintain the project schedule, explain the reasons for the delay, explain why the delay
is unavoidable, and demonstrate an ability to succeed in the extended time frame the
grantee proposes. The grantee must provide the necessary information to SANDAG
staff to place in a report to the Policy Advisory Committee. If sufficient time is available,
and the grant utilized TransNet funds, the request will first be taken to the Independent
Taxpayer Advisory Committee (ITOC) for a recommendation. The grantee should make
a representative available at the meeting to present the information to, and/or answer
questions from, the ITOC and Policy Advisory Committee.
3.3 The Policy Advisory Committee will only grant an extension under this Section 3 for
extenuating circumstances that the grantee could not have reasonably foreseen.
4. Resolution and Execution of the Grant Agreement
4.1 Two weeks prior to the review by the Policy Advisory Committee of the proposed grants,
prospective grantees must submit a resolution from their authorized governing body
that includes the provisions in this Subsection 4.1. Failure to provide a resolution that
meets the requirements in this Subsection 4.1 will result in rejection of the application
and the application will be dropped from consideration with funding going to the next
project as scored by the evaluation committee. In order to assist grantees in meeting
this resolution deadline, when SANDAG issues the call for projects it will allow at least
90 days for grant application submission.
4.1.1 Grantee governing body commits to providing the amount of matching funds
set forth in the grant application.
4.1.2 Grantee governing body authorizes staff to accept the grant funding and
execute a grant agreement if an award is made by SANDAG.
4.2 Grantee’s authorized representative must execute the grant agreement within 45 days
from the date SANDAG presents the grant agreement to the prospective grantee for
execution. Failure to meet the requirements in this Subsection 4.2 may result in
revocation of the grant award.
5. Increased Availability of Funding Under this Policy
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5.1. Grant funds made available as a result of the procedures in this Policy may be awarded
to the next project on the recommended project priority list from the most recent
project selection process, or may be added to the funds available for the next project
funding cycle, at the responsible Policy Advisory Committee’s discretion. Any project
that loses funding due to failure to meet the deadlines specified in this Policy may be
resubmitted to compete for funding in a future call for grant applications.
Adopted: January 2010
Amended: November 2014
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ATTACHMENT C
PROJECT IMPLEMENTATION AND OVERSIGHT REQUIREMENTS
All Grant Types (Capital, Non-Capital, and/or Planning Projects)
1.Contact Information: Grantee must provide SANDAG with contact information for the project
manager. Grantee must provide SANDAG with updated contact information in a timely manner
if there are any changes to staff assigned.
2.Request for Proposals and Consultant Selection: Upon request by SANDAG, Grantee must
submit draft Request for Proposals or bid solicitation documents to SANDAG staff for review
and comment for consistency with the agreed upon Scope of Work with SANDAG
(Attachment A).
3.Design Development, Stakeholder, and Community Meetings: Grantee must provide
SANDAG with agendas and meeting summaries for all design development (for capital projects
only) and community meetings. SANDAG staff may attend any meetings as appropriate.
4.Quarterly Reports, Invoices, and Deliverables: Grantee must submit quarterly reports and
invoices to SANDAG, detailing accomplishments in the quarter, anticipated progress next
quarter, pending issues and actions toward resolution, and status of budget and schedule.
Furthermore, the Grantee agrees to provide project milestone information (such as
presentations to community groups, other agencies, and elected officials, ground-breakings,
and ribbon-cuttings) to support media and communications efforts. Grantee needs to document
and track in-kind contributions designated as matching funds as part of project management.
Grantee must provide all deliverables identified in the Scope of Work.
5.Media and Community Outreach Coordination: Press materials shall be provided to
SANDAG staff before they are distributed. SANDAG and TransNet logo(s) should be included in
press materials and other project collateral based on logo usage guidelines to be provided by
SANDAG. Grantee agrees to provide project milestone information to support media and
communications efforts.
6.Photo Documentation: Grantees are responsible for the following photo documentation:
Existing conditions photos (as applicable), which should illustrate the current conditions of
the project site and demonstrate the need for improved facilities
Project milestone photos (such as workshops, presentations to community groups, other
agencies, and elected officials)
Photos should be high resolution (at least 4 inches by 6 inches with a minimum of 300 pixels per
inch) and contain captions with project descriptions, dates, locations, and the names of those
featured, if appropriate. Grantees must obtain consent of all persons featured in photos (or that
of a parent or guardian of persons under the age of 18) by using the SANDAG Photo and
Testimonial Release form to be provided by SANDAG, or a similar release form developed by
Grantee and agreed upon by SANDAG.
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Capital Grants Only
1.Baseline Data Collection: Prior to the construction of grant-funded improvements, the
Grantee is responsible for developing a baseline data collection plan with SANDAG to gather
information on pedestrian and bike activity. At a minimum, data should be collected for
observed bike and pedestrian volumes, behavior, and attitudes in the project area. Once the
data collection plan is approved by SANDAG staff, the Grantee is responsible for carrying out
the plan and returning collected data to SANDAG as a deliverable. Standardized forms required
for data collection will be provided by SANDAG.
Grantees are encouraged to use the National Bicycle and Pedestrian Documentation Project
methodology and plan for the following:
Conduct counts prior to project construction, during National Documentation Days in the
second week of September. Supplementary counts and surveys can be conducted during
January, May, and July to provide seasonal data, if desired
Conduct counts for two hours, at peak times relative to the facility. For example, facilities
attracting utilitarian trips should be counted on a Tuesday, Wednesday, or Thursday from
5 to 7 p.m., whereas facilities attracting recreational trips should be counted on a Saturday,
from 9 to 11a.m.
In the case that the above timeframes are deemed infeasible due to the project schedule, the
Grantee and SANDAG will collaborate on an alternative data collection methodology and
procedure.
A subset of project areas may be selected for in-depth evaluation by SANDAG, in which case,
SANDAG will conduct the data collection effort with required participation from Grantee staff.
Such in-depth evaluation conducted by SANDAG will take place solely for the purpose of
SANDAG Active Transportation data collection and monitoring efforts, and will not impact
Grantees’ budgets.
Grantees should plan to budget $5,000 for data collection.
2.Plan Review: Grantee must submit project design drawings and cost estimates (if available) to
SANDAG for review and comment at 30 percent, 60 percent, 90 percent, and 100 percent
design. SANDAG staff may meet with the Grantee to comment on submitted plans and assure
substantial conformance. SANDAG may comment on submitted plans regarding:
Whether the plans are consistent with the Project proposed in the original grant application
Consistency with accepted pedestrian/bike facility and smart growth design standards
3. Project Signage: Each project or program of $250,000 or more funded in whole or in part by
revenues from the TransNet Extension Ordinance shall be clearly designated during its
construction or implementation as being provided by such revenues. SANDAG will provide sign
specifications. Grantee agrees to follow sign specifications in TransNet Signage Guide and
submit proof files to SANDAG for approval before production.
4. Performance Monitoring: SANDAG staff may measure performance of the constructed capital
improvements against stated project objectives, and evaluate the overall grant program.
Grantee is expected to meet with SANDAG staff to identify relevant performance measures and
data sources, and provide available data and feedback regarding the program as appropriate.
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City of Chula Vista
Staff Report
File#:18-0147, Item#: 5.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING BIDS AND
AWARDING A CONTRACT FOR “TRAFFIC SIGNAL SYSTEM IMPROVEMENTS ALONG EAST H
STREET, OTAY LAKES ROAD, AND TELEGRAPH CANYON ROAD FOR CAPITAL IMPROVEMENT
PROJECT (CIP) TRF0389” TO SELECT ELECTRIC INC. IN THE AMOUNT OF $584,557; AND
APPROPRIATING $220,000 FROM THE AVAILABLE BALANCE OF THE TRANSPORTATION
DEVELOPMENT IMPACT FEE (TDIF) FUND TO TRF0389 (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
On February 28, 2018, the Director of the Department of Engineering & Capital Projects received six
(6) sealed bids for the “Traffic Signal System Improvements along East H Street, Otay Lakes Road,
and Telegraph Canyon Road (TRF0389)” project. This is a federally assisted grant project (Federal
No. HSIPL 5203(041)) that proposes the installation/expansion of an adaptive traffic control system in
the City of Chula Vista to enhance safety, reduce traffic delays and improve traffic flow on major
corridors.
ENVIRONMENTAL REVIEW
Environmental Notice
The Project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing
Facilities) of the California Environmental Quality Act State Guidelines.
Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the
California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Class
1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the State CEQA
Guidelines because the project involves negligible or no expansion of an existing use. Thus, no
further environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable.
DISCUSSION
CIP Project TRF0389 is a federal aid project under the Highway Safety Improvement Program (HSIP)
that will install/expand adaptive traffic control systems on major corridors in the City of Chula Vista.
The project’s scope of work consists of the implementation of improvements supporting adaptive
traffic signal systems along East H Street between Hidden Vista Drive and Auburn Avenue, Otay
Lakes Road between Ridgeback Road and Telegraph Canyon Road, and Telegraph Canyon Road
between Canyon Plaza Driveway east of I-805 and Buena Vista Drive, and the intersections of Paseo
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File#:18-0147, Item#: 5.
between Canyon Plaza Driveway east of I-805 and Buena Vista Drive, and the intersections of Paseo
Del Rey and Plaza Court, Tierra Del Rey and private driveway (Costco driveway), and East J Street
and Paseo Ranchero (Attachment 1). These improvements include the installation of modern traffic
signal controllers, high definition traffic monitoring cameras, Ethernet communications, signal
interconnect, and vehicle detection upgrades.
The original scope included adaptive traffic signal control system improvements to 19 signalized
intersections, but was increased to include a total of 29 signalized intersections and the
implementation of new communication network. The scope revision resulted from a need to update a
non-performing adaptive traffic control system surrounding the Southwestern College area. City Staff
determined that the required work to expand the adaptive traffic control system complies with the
original objective of the TRF0389 project. Therefore, the additional work and costs will help
implement a uniform and fully compatible adaptive traffic control system that will improve traffic flow
and reduce traffic delays in the project area.
City Staff prepared plans and specifications and advertised the project on January 19, 2018. The
Director of the Department of Engineering and Capital Projects received and opened six (6) sealed
bid proposals for the project on February 28, 2018. The bid results are as follows (listed in numerical
order of bid total amount):
CONTRACTOR BID AMOUNT
1 SELECT Electric, Inc.$584,557.00*
2 Elecnor Belco Electric, Inc.$639,818.00
3 DBX, Inc.$712,664.00*
4 T & M Electric, Inc.$831,435.00
5 HMS Construction, Inc.$835,378.00*
6 Asplundh Construction, Corp.$836,860.25
*Bid contained
clerical errors
that did not
change the
overall bid
ranking
City Staff reviewed the apparent low bid proposal and found minor clerical errors that changed their
base bid total from $584,737 to $584,557. The minor clerical errors did not change the ranking order
of the lowest bid. SELECT Electric, Inc. submitted a letter acknowledging the clerical errors and
stands by the corrected base bid total price of $584,557 (Attachment 2).
The low bid by SELECT Electric, Inc. of $584,557.00 is $7,579.50 (approximately 1.3%) above the
Engineer’s estimate of $576,997.50 but within the acceptable range.
SELECT Electric, Inc. is currently an active licensed Class “A” - General Engineering Contractor, “B” -
General Building Contractor, “C-7” - Low Voltage Systems and “C-10” - Electrical (License No.
297034) and has performed traffic signal construction work in the region with satisfactory
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297034) and has performed traffic signal construction work in the region with satisfactory
performance. Staff has reviewed the bid submitted by SELECT Electric, Inc. and has determined it to
be responsive.
City Staff is requesting additional funds required for the construction of the adaptive traffic control
system. Although, the low bid by SELECT Electric, Inc. was within the acceptable Engineer’s
estimate range, additional funds are requested to offset the costs incurred by the expansion of the
system, video traffic surveillance system and implementation of new communications network.
Staff recommends that Council award the TRF0389 construction contract to SELECT Electric, Inc. in
the amount of $584,557.00 and approves an additional appropriation of $220,000 from the TDIF fund
to CIP TRF0389 to fund a portion of the new system expansion.
Wage Statement
The Contractor and its subcontractors are required by bid specifications to pay prevailing wages
(“Prevailing Wage Rates”) to persons employed by them for work under this Contract. In accordance
with the provisions of Section 1773 of the Labor Code of the State California, the City of Chula Vista
has ascertained the general prevailing wage scales applicable to the work to be done. The prevailing
wage scales are those determined by the Director of Industrial Relations, State of California.
Disclosure Statement
Attachment 3 is a copy of the Contractor’s Disclosure Statement.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property
holdings within 500 feet of the boundaries of the property which is the subject of this action.
Consequently, this item does not present a disqualifying real property-related financial conflict of
interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the
Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. CIP Project TRF0389
supports two of the five major goals, Operational Excellence and Strong and Secure Neighborhoods.
The proposed project will achieve these goals by leveraging advanced Intelligent Transportation
Systems (ITS) technologies which aim to improve the operational efficiency of traffic signals; thus,
creating an enhanced transportation infrastructure appealing to communities to continually live, work,
and play in the City of Chula Vista. In addition, the deployment of these new adaptive traffic control
systems will include the installation of advanced transportation controllers (ATC) which can
accommodate vehicle-to-infrastructure (V2I) technologies in support of our autonomous vehicle
proving ground efforts.
CURRENT YEAR FISCAL IMPACT
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Approval of the resolution will initiate the construction phase of TRF0389 and appropriate $220,000
in TDIF funds to TRF0389 in order to complete the project. Sufficient funds are available in the TDIF
fund balance for the appropriation.
FUNDS REQUIRED FOR CONSTRUCTION OF TRF0389
A. Contract Amount $584,557
B. Contingency (Approximately 15%) $88,443
C. Construction Inspection Staff Cost $47,000
TOTAL FUNDS REQUIRED FOR CONSTRUCTION $720,000
FUNDING SOURCES
A. TRF0389 - Highway Safety Improvement Program (HSIP Grant) $500,000
B. TRF0389 - TDIF (Appropriation) $220,000
TOTAL FUNDS REQUIRED FOR CONSTRUCTION $720,000
ONGOING FISCAL IMPACT
Upon completion of the project, the adaptive traffic control systems will be under a 3-year
manufacturer maintenance and support agreement. Other traffic signal improvements will require
normal ongoing maintenance which is funded through the traffic signal maintenance budget.
ATTACHMENTS
1. Project Location Map
2. Contractor’s Bid Error Acknowledgement Letter
3. Contractor’s Disclosure Statement
Staff Contact: José Serrato, Assistant Civil Engineer
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA ACCEPTING BIDS AND AWARDING A CONTRACT FOR
“TRAFFIC SIGNAL SYSTEM IMPROVEMENTS ALONG EAST H
STREET, OTAY LAKES ROAD, AND TELEGRAPH CANYON ROAD
FOR CAPITAL IMPROVEMENT PROJECT (CIP) TRF0389” TO
SELECT ELECTRIC INC. IN THE AMOUNT OF $584,557; AND
APPROPRIATING $220,000 FROM THE AVAILABLE BALANCE OF
THE TRANSPORTATION DEVELOPMENT IMPACT FEE (TDIF)
FUND TO TRF0389
WHEREAS, City staff prepared plans and specifications for the “Traffic Signal System
Improvements Along East H Street, Otay Lakes Road, and Telegraph Canyon Road – HSIP
(CIP# TRF0389)” project (Project) and advertised the Project for competitive bids on January
19, 2018 in accordance with Chula Vista Municipal Code (CVMC) Section 2.56.080; and
WHEREAS, on February 28, 2018, the Director of Engineering and Capital Projects
received six (6) sealed bids for the Project; and
WHEREAS, the following base bids were received:
CONTRACTOR BASE BID TOTAL
1 SELECT Electric, Inc. – Vista $584,557.00*
2 Elecnor Belco Electric, Inc. – Chino $639,818.00
3 DBX, Inc. – Temecula $712,664.00*
4 T & M Electric, Inc. – Santee $831,435.00
5 HMS Construction, Inc. – Vista $835,378.00*
6 Asplundh Construction, Corp. – Anaheim $836,860.25
*Contained minor defects that did not change overall bid ranking.
WHEREAS, staff reviewed the low bid proposal in the amount of $ 584,557.00 submitted
by SELECT Electric, Inc. of Vista, California and found that minor defects to its bid did not
change the ranking order of the lowest bid; and
WHEREAS, Section 1009 of the City Charter and CVMC Section 2.56.160 allow the
City to waive minor defects in public works bids where necessary or appropriate for the benefit
of the public;
WHEREAS, SELECT Electric, Inc. submitted a letter acknowledging the minor defects
in its bid and agreeing to stand by their revised grand total bid total price of 584,557.00; and
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WHEREAS, staff recommends waiving minor defects in SELECT Electric Inc.’s bid as it
would not change the ranking order of the lowest bid and would benefit the public by allowing
the Project to be completed for the lowest competitively bid price; and
WHEREAS, staff recommends an appropriation of $220,000 from the available balance
of the TDIF funds to HSIP Grant project “Traffic Signal System Improvements Along East H
Street, Otay Lakes Road, and Telegraph Canyon Road – HSIP (CIP# TRF0389)” for purposes of
completing the project; and
WHEREAS, SELECT Electric, Inc. is currently an active licensed Class A, B, C-7 and
C-10 contractor (License No. 297034) and has performed similar work in the City with
satisfactory performance; and
WHEREAS, SELECT Electric, Inc. and all of its listed subcontractors for the Project
contract are registered as public works contractors with the California Department of Industrial
Relations (DIR); and
WHEREAS, in accordance with the provisions of Section 1773 of the Labor Code of the
State of California, SELECT Electric, Inc. and its subcontractors are required by bid
specifications to pay prevailing wages to persons employed by them for work under the Project
contract; and
WHEREAS, CVMC Section 2.56.162.C.2 authorizes the City Engineer to approve
change orders up to the remaining CIP budget available for any CIP project; and
WHEREAS, the breakdown of anticipated construction costs are as follows:
FUNDS REQUIRED FOR CONSTRUCTION
A. Contract Amount
B. Contingencies (Approx. 15%)
C. Construction Inspection Staff Cost (Approx. 8%)
$584,557
$88,443
$47,000
CONSTRUCTION TOTAL $720,000
WHEREAS, the Director of Development Services has reviewed the proposed project for
compliance with the California Environmental Quality Act (CEQA) and has determined that the
project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing
Facilities) of the State CEQA Guidelines. Thus, no further environmental review is required.
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Resolution No.
Page 3
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it waives irregularities, accepts bids, and awards a contract for the “Traffic Signal System
Improvements Along East H Street, Otay Lakes Road, and Telegraph Canyon Road – HSIP
(CIP# TRF0389)” project to SELECT Electric, Inc. in the amount of $584,557;
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it
appropriates $220,000 from the available balance of the TDIF Fund to CIP TRF0389;
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it
authorizes and directs the Mayor or designee to execute the Project contract on behalf of the City
of Chula Vista and directs that a copy of such contract be kept on file with the City Clerk.
Presented by
William S. Valle
Director of Engineering &
Capital Projects/City Engineer
Approved as to form by
Glen R. Googins
City Attorney
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City of Chula Vista
Staff Report
File#:18-0166, Item#: 6.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING VARIOUS
AMENDMENTS TO THE FISCAL YEAR 2017-2018 CAPITAL IMPROVEMENT PROGRAM
BUDGETS AND APPROPRIATING FUNDS THEREFOR (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
Staff recommends budget adjustments to the FY 2017-2018 Capital Improvement Program (CIP)
budget in order to complete construction of the following projects: Bike Lanes along East H Street
(STM0382); Replacement of Curb & Gutter Citywide (STL0407); and Traffic Signal & Street Light
Upgrade & Modification Program (TRF0366).
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality
Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c) (3) no environmental
review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to
Section 15061(b) (3) of the California Environmental Quality Act State Guidelines.
Environmental Determination
The proposed activity has been reviewed for compliance with the California Environmental Quality
Act (CEQA) and it has been determined that the activity is not a “Project” as defined under Section
15378 of the state CEQA Guidelines because it consists of a governmental fiscal activity that will not
result in adverse impacts to the environment; therefore, pursuant to Section 15060(c) (3) of the State
CEQA Guidelines, the activity is not subject to CEQA. Notwithstanding the foregoing, it has also been
determined that the activity qualifies for an Exemption pursuant to Section 15061(b) (3) of the
California Environmental Quality Act State Guidelines. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
In order to complete construction on the CIP projects listed below, staff recommends the following
adjustments to the FY 2017-2018 CIP budget:
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Bike Lanes along East H Street (STM0382).
On June 14, 2016, the City Council approved Resolution No. 2016-120 awarding a construction
contract to Pal General Engineering, Inc. for the “Bike Lanes along East H Street Project, CIP No.
STM0382. Unforeseen site conditions and design revisions will require extra city staff time and effort
during project construction. Additional funding is also required to complete the project close-out
process. Staff recommends appropriating $50,000 from the Transportation Development Impact
Fees (TDIF) Fund for this additional effort.
Replacement of Curb & Gutter Citywide (STL0407).
This project replaces damaged curb and gutters in public right-of-way. Due to the discovery of
additional damaged sidewalks, ramps, and curb & gutters adjacent to the project locations, additional
work is required to meet design standards. Staff recommends transferring $58,500 in Gas Tax funds
from STL0423, Pavement Minor Rehabilitation, to STL0407 in order to complete the project in
accordance with design standards.
Traffic Signal & Street Light Upgrade & Modification Program (TRF0366).
This project supports the upgrade and maintenance of traffic signal and street lighting systems
Citywide. In order to procure additional equipment and materials to repair unforeseen failures to
components in traffic signal systems throughout the city, additional funding is needed. Staff
recommends transferring $41,500 in Gas Tax funds from STL0423 to TRF0366 to complete the
project.
DECISION-MAKER CONFLICT
STM0382 and STL0407.
Staff has reviewed the property holdings of the City Council members and has found no property
holdings within 500 feet of the boundaries of the property which is the subject of this action.
Consequently, this item does not present a disqualifying real property-related financial conflict of
interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the
Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any member, of any other fact that
may constitute a basis for a decision maker conflict of interest in this matter.
TRF0366.
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section
18702.2(a) (11), is not applicable to this decision for purposes of determining a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100,
et seq.).
Staff is not independently aware, and has not been informed by any member, of any other fact that
may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. TDIF, Gas Tax, andCity of Chula Vista Printed on 5/10/2018Page 2 of 3
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Community, Strong and Secure Neighborhoods and a Connected Community. TDIF, Gas Tax, and
the TransNet program support the Operational Excellence strategy in the City’s Strategic Plan. They
provide funding for new and improved transportation facilities and the maintenance and rehabilitation
of public infrastructure, which is a key City function in providing a safe and efficient transportation
system for residents, businesses and visitors.
CURRENT YEAR FISCAL IMPACT
Approval of the resolution will amend the FY 2017-2018 Capital Improvement Program (CIP) budgets
by appropriating $50,000 from the TDIF Fund to STM0382 and transferring $58,500 and $41,500 in
Gas Tax funds from STL0423 to STL0407 and TRF0366, respectively. Sufficient TDIF and Gas Tax
funding is available for these budget amendments; therefore, there is no additional impact to these
funds.
ONGOING FISCAL IMPACT
Upon completion of the CIP projects, the improvements will require only routine maintenance.
Staff Contact: Eddie Flores, City Traffic Engineer, Engineering & Capital Projects Department
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING VARIOUS AMENDMENTS TO
THE FY 2017-2018 CAPITAL IMPROVEMENT PROGRAM
BUDGETS AND APPROPRIATING FUNDS THEREFOR
WHEREAS,staff recommends budget adjustments to the FY 2017-2018 Capital
Improvement Program (CIP) budget in order to complete construction of the following projects:
Bike Lanes Along East H Street (STM0382); Replacement of Curb & Gutter Citywide
(STL0407); and Traffic Signal & Street Light Upgrade & Modification Program (TRF0366); and
WHEREAS, this action is intended to reallocate funds allocated to CIP projects that have
been completed.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it appropriates $50,000 from the available balance of the TDIF Fund to CIP STM0382;
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it
amends the Fiscal Year 2017-2018 Capital Improvement Program budgets for the following
appropriations:
Summary of CIP Program Budget Amendments:
Project Project Description Amount
STL0423 Pavement Minor Rehabilitation FY 2017/2018 ($100,000)
STL0407 Curb & Gutter Replacement Citywide $58,500
TRF0366 Traffic Signal & Street Light Upgrade & Maintenance $41,500
STM0382 Bike Lanes Along East H Street $50,000
Presented by Approved as to form by
William S. Valle Glen R. Googins
Director of Engineering & Capital Projects City Attorney
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City of Chula Vista
Staff Report
File#:18-0042, Item#: 7.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ORDERING THE
SUMMARY VACATION OF AN IRREVOCABLE OFFER OF DEDICATION FOR PUBLIC PARK
PURPOSES OF A PORTION OF LOT “A” PER FINAL MAP NO. 16094, CHULA VISTA TRACT NO.
11-05, OTAY RANCH VILLAGE 2 NORTH NEIGHBORHOOD R-10B/PIPELINE (“V2N”)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
The area proposed for vacation is park land which has been offered for dedication by the master
developer but which is unusable as a park land. The vacated land will become part of the adjacent
swim club site and will be maintained by its homeowner association. With the proposed vacation, the
remaining park acreage in V2N is fully consistent with adopted V2N Parks Agreement which
contemplates in Section 2.1(d) that minor adjustments to park boundaries may be approved by the
City to improve the interface with adjacent development. This action will vacate a portion of the IOD
recorded with the Final Map No. 16094 in February 22, 2016. In accordance with Section 7050 of the
California Government Code and Chapter 4, Section 8335 of the California Streets and Highways
Code, this type of vacation may be performed summarily through adoption of a resolution of vacation
by the City Council and recordation of a certified copy of the resolution attested to by the City Clerk.
ENVIRONMENTAL REVIEW
Environmental Notice
The Project was adequately covered in previously certified Final Second Tier Environmental Impact
Report, EIR 02-02 and Final Supplemental Environmental Impact Report, SEIR 12-01 for the Otay
Ranch Village Two Sectional Planning Area (SPA) Plan.
Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the
California Environmental Quality Act (CEQA) and has determined that the Project was adequately
covered in previously certified Final Second Tier Environmental Impact Report, EIR 02-02 and Final
Supplemental Environmental Impact Report, SEIR 12-01 for the Otay Ranch Village Two Sectional
Planning Area (SPA) Plan. Thus, no further environmental review or documentation is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
Otay Ranch is a master planned community within the city that consists of various “Villages.” A
portion of Otay Ranch, called Otay Ranch Village 2 North Neighborhood R-10/Pipeline (V2N)
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portion of Otay Ranch, called Otay Ranch Village 2 North Neighborhood R-10/Pipeline (V2N)
consists of residential units, pipeline easements, swim club, and parks, approximately 24.4 acres. In
July 2017, the adjacent lot, Lot “C” of Map 16094 being used as a swim club, was graded at a
steeper grade than what was originally approved creating a steep slope at the edge of the adjacent
park Lot “A”. The City advised the developer that the land is unusable as park land and advised the
owners to revise the park dedication to exclude the unusable area. The City is currently processing a
lot line adjustment to incorporate the unusable land into the neighboring swim club Lot “C”.
This action will vacate a portion of the Irrevocable Offer of Dedication (IOD) in Fee Interest (0.055
acres) from Lot “A” of Final Map 16094 so the resultant swim club parcel, Lot “C” will be
unencumbered by the City’s offer.
The existing size of the park Lot “A” is 4.460 acres and the newly configured lot will be 4.405 acres.
The Developer will compensate the City by dedicating of an additional 0.055 acres parkland or
payment of parkland acquisition fees equivalent to 0.055 acres per Chapter 17.10 of the Chula Vista
Municipal Code. With today’s action, the City will abandon a portion of the IOD recorded with the
Final Map No. 16094 in February 22, 2016 and in accordance with Section 7050 of the California
Government Code and Chapter 4, Section 8335 of the California Streets and Highways Code, this
type of vacation may be performed summarily through adoption of a resolution of vacation by the City
Council and recordation of a certified copy of the resolution attested to by the City Clerk.
This vacation will create an additional 0.055 acres of park land & development obligation that the City
will require Baldwin and Sons to meet prior to the approval of the first final map for Neighborhood R-4
(Village 2 West Tentative Map PCS-12-03) in compliance with Tentative Map condition #32 adopted
by Council on 11-4-14 through dedication & development of park land and/or payment of in lieu fees.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property
holdings within 500 feet of the boundaries of the property which is the subject of this action.
Consequently, this item does not present a disqualifying real property-related financial conflict of
interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the
Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The proposed action
addresses the Operational Excellence goal as it clarifies the responsibility of the Developer for the
construction of parks that will serve the community.
CURRENT YEAR FISCAL IMPACT
All costs associated with processing the summary vacation is borne by the developer, resulting in no
net fiscal impact to the General Fund or the Development Services Fund.
ONGOING FISCAL IMPACT
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There is no ongoing fiscal impact associated with the abandonment of the IOD.
ATTACHMENTS
Attachment 1: Vicinity Map
Staff Contact: Jamal Naji, Associate Civil Engineer, Development Services Department
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ORDERING THE SUMMARY VACATION OF
AN IRREVOCABLE OFFER OF DEDICATION FOR PUBLIC
PARK PURPOSES OF A PORTION OF LOT “A” PER FINAL
MAP NO. 16094, CHULA VISTA TRACT NO. 11-05, OTAY
RANCH VILLAGE 2 NORTH NEIGHBORHOOD R-
10B/PIPELINE (“V2N”)
WHEREAS, Baldwin & Sons, LLC (“Master Developer”) is the owner of a majority of
the real property in the Village 2 portion of the master planned community of Otay Ranch
(“Village 2”); and
WHEREAS, the Otay Ranch General Development Plan, Village of Montecito & Otay
Ranch Business Park Sectional Planning Area (SPA) Plan, Quimby Act (Government Code
section 66477 et seq.), and Chula Vista Municipal Code require Master Developer to, among
other things, dedicate land for public park purposes and/or pay fees to City in connection with its
development; and
WHEREAS, in accordance with the Parks Agreement, City has acknowledged an
Irrevocable Offer of Dedication in Fee Interest of Lot “A” (IOD) for Public Park Purposes as
shown on Final Map No. 16094, filed in the Office of the County Recorder of San Diego County
on February 22, 2016; and
WHEREAS, in July 2017, the adjacent lot, Lot “C” of Final Map No. 16094, which is
being used as a swim club, was graded at a steeper grade than what was originally approved
creating a steep slope at the edge of the adjacent park Lot “A”; and
WHEREAS, City informed Master Developer that as result of the change in grade, 0.055
acres of Lot “A” had become unusable for public park purposes; and
WHEREAS, the boundaries of Lots “A” and “C” need to be reconfigured to incorporate
the unusable land into Lot “C”, and a portion of the offer of dedication needs to be revised to
exclude the unusable area; and
WHEREAS, section 4.5 of the Parks Agreement allows the City to approve minor
adjustments to park boundaries to improve the interface with adjacent development, but does not
allow for a reduction in the overall acreage of parks required for the development for such minor
adjustments; and
WHEREAS, Master Developer is required to meet its overall park acreage dedication and
development obligations, or pay in lieu fees, including but not limited to resolving any deficit
caused by this proposed vacation, in accordance with the approved plans and agreements
pertaining to Village 2 parks and prior to the approval of the first final map for Neighborhood R-
4 (Village 2 West Tentative Map PCS-12-03) in accordance with condition #32 of Tentative
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Subdivision Map within Otay Ranch Village 2 West – Chula Vista Tract 12-03 as adopted by
City Council Resolution 2014-210 on November 4, 2014; and
WHEREAS, in accordance with Section 7050 of the California Government Code, a
portion of the IOD may be terminated and the right to accept such portion of the offer may be
abandoned; and
WHEREAS, in accordance with Section 7050 of the California Government Code and
Chapter 4, Section 8335 of the California Streets and Highways Code, the proposed vacation of a
portion of Lot “A” may be performed summarily through adoption of a resolution ordering said
summary vacation; and
WHEREAS, in accordance with Section 7050 of the California Government Code and
Chapter 4, Section 8335 (4) of the California Streets and Highways Code, that from and after the
date the resolution is recorded, the portion of the IOD that is vacated no longer constitutes an
IOD,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it finds:
a) That the proposed park land which has been irrevocably offered for dedicated to
City by Master Developer is no longer suitable for public park land purposes.
b) The vacated land will become part of the adjacent swim club which will provide a
better interface within the development.
c) That the remaining Lot A site acreage has been determined to be sufficient to
fully implement the park programming and facilities identified for Lot A in the
adopted plans and agreements pertaining to Village 2 parks.
d) That this proposed vacation does not effectuate a reduction in Master Developer’s
overall park acreage dedication or development obligations and Master Developer
will be required to meet its overall park acreage dedication and development
obligations, or pay in lieu fees, in order to comply with the adopted plans and
agreements pertaining to Village 2 parks.
BE IT FURTHER RESOLVED that the City Council of the City of Chula Vista orders
the summary vacation of that portion of the Irrevocable Offer of Dedication in Fee Interest of Lot
“A” of Final Map No. 16094, as more fully described and depicted on Exhibit “A”, which is
attached hereto and incorporated herein by reference.
BE IT FURTHER RESOLVED that the City Council of the City of Chula Vista directs
the City Clerk to cause a certified copy of the resolution of vacation, attested by the Clerk,
without acknowledgement or further proof, to be recorded in the Office of the County Recorder
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Resolution No.
Page 3
of San Diego County. From and after the date this resolution is recorded, the vacation is
complete.
Presented by:Approved as to form by:
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
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City of Chula Vista
Staff Report
File#:18-0142, Item#: 8.
A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A
JOINT USE AGREEMENT BETWEEN THE CITY OF SAN DIEGO AND THE CITY OF CHULA
VISTA FOR THE COLOCATION OF A CITY OF SAN DIEGO WATERLINE WITHIN THE
JOINT USE AREA LOCATED IN PORTIONS OF SANTA DIANA ROAD, SANTA VICTORIA
ROAD AND THE FUTURE ORTEGA STREET IN THE OTAY RANCH VILLAGE 2
COMMUNITY AND AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE
THE AGREEMENT
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A
JOINT USE AGREEMENT BETWEEN THE CITY OF SAN DIEGO AND THE CITY OF CHULA
VISTA FOR THE COLOCATION OF A CITY OF SAN DIEGO WATERLINE WITHIN THE
JOINT USE AREA LOCATED IN PORTIONS OF OLYMPIC PARKWAY, LA MEDIA ROAD,
OTAY VALLEY ROAD AND ALL TO BE CONSTRUCTED AND NAMED STREETS IN THE
OTAY RANCH VILLAGE 2, VILLAGE 8 WEST, AND VILLAGE 9 COMMUNITIES AND
AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE THE AGREEMENT
RECOMMENDED ACTION
Council adopt the resolutions.
SUMMARY
The proposed Joint Use Agreements between the City of San Diego and City of Chula Vista are for
the colocation of City of San Diego water facilities located in portions of Santa Diana Road, Santa
Victoria Road, to be constructed Ortega Street, Olympic Parkway, La Media Road, Otay Valley Road
and to be constructed and named Streets in the Otay Ranch Community in the City of Chula Vista
within the Joint Use Area as depicted in - Joint Use Agreement 1 (Attachment 2) and - Joint Use
Agreement 2 (Attachment 3). Said Agreements outline both Cities’ rights and obligations for the
construction, operation or maintenance of their respective facilities within the Joint Use Areas.
ENVIRONMENTAL REVIEW
Environmental Notice
The Project was adequately covered in previously certified Final Second Tier Environmental Impact
Report (EIR 02-02) and Final Supplemental Environmental Impact Report (SEIR 12-01) for the Otay
Ranch Village Two Sectional Planning Area (SPA) Plan and Tentative Map; Final Environmental
Impact Report (EIR 10-03) for the Otay Ranch Village 8 West SPA Plan and Tentative Map; and Final
Environmental Impact Report (EIR 10-04) for the Otay Ranch Village 9 SPA Plan and Tentative Map.
Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the
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The Director of Development Services has reviewed the proposed project for compliance with the
California Environmental Quality Act (CEQA) and has determined that the Project was adequately
covered in previously certified Final Second Tier Environmental Impact Report (EIR 02-02) and Final
Supplemental Environmental Impact Report (SEIR 12-01) for the Otay Ranch Village Two Sectional
Planning Area (SPA) Plan and Tentative Map; Final Environmental Impact Report (EIR 10-03) for the
Otay Ranch Village 8 West SPA Plan and Tentative Map; and Final Environmental Impact Report
(EIR 10-04) for the Otay Ranch Village 9 SPA Plan and Tentative Map. Thus, no further
environmental review or documentation is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
Resolution A:
The City of San Diego owns potable water pipelines within the Otay Ranch Community in the City of
Chula Vista. One such pipeline is known as the Otay 2nd Pipeline. The Otay 2
nd Pipeline crosses
existing and future public streets in the City of Chula Vista and is also located within City of San
Diego easements in private property.
Baldwin & Sons, LLC (“Baldwin”) is the developer of Otay Ranch Village 2 (“V2”), as amended by the
V2 development plan (“Baldwin Plan Amendment”) on November 4, 2014. The Baldwin Plan
Amendment requires Baldwin to relocate the Otay 2nd Pipeline into portions of existing Olympic
Parkway and La Media Road.
As it stands today, the City of San Diego’s Otay 2nd Pipeline, currently located to the west of La
Media Road, intersects two of the City of Chula Vista’s public streets, Santa Diana Road and Santa
Victoria Road, and will intersect with the future Ortega Street. The areas of intersection, as described
in the Joint Use Agreement 1 (Attachment 2) and depicted in the associated exhibits to the Joint Use
Agreement 1, will be established as a Joint Use Area and will set forth the City of San Diego’s and
the City of Chula Vista’s respective rights and obligations within this Joint Use Area until the Otay 2nd
Pipeline is relocated.
The City of San Diego’s Public Utilities Department agrees to the relocation of the Otay 2
nd Pipeline.
The City of San Diego will continue to operate and maintain the Otay 2
nd Pipeline, in its current
location until it is relocated.
Resolution B:
The City of San Diego owns other potable water pipelines within the Otay Ranch Village 8 West
(“V8W”) and Otay Ranch Village 9 (“V9”) in the City of Chula Vista. These pipelines are known as
the South San Diego Pipeline No. 1, and South San Diego Pipeline No. 2 (“Pipelines”). The Pipelines
cross existing and future public streets in the City of Chula Vista and are also located within City of
San Diego easements in private property.
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Otay Land Company, LLC (“OLC”) is the developer of V8W and V9, as amended by the V8W and V9
development plans on June 3, 2014 (“OLC Plan Amendment”). The OLC Plan Amendment requires
OLC to relocate the portions of Pipelines into portions of La Media Road, Otay Valley Road and to be
constructed and named public streets in the City of Chula Vista.
As development of the Villages occurs, the OLC and Baldwin will relocate portions of the Pipelines to
the City of Chula Vista’s public right-of-way (“Joint Use Areas”) and the City of San Diego will
abandon the Pipelines where they are currently located, in accordance with a Participation
Agreement between the City of San Diego and the Developers, authorized by Ordinance No. O-
20464, included as Attachment 4. The Participation Agreement outlines the City of San Diego’s and
Developer’s responsibilities for the design, construction and cost of relocating the Pipelines.
Baldwin intends to relocate a portion of the Otay 2nd Pipeline into Olympic Parkway and La Media
Road. OLC intends to relocate portions of the Pipelines into portions of the future extension of La
Media Road and the future Otay Valley Road.
The City of San Diego’s Public Utilities Department agrees to the relocation of the Pipelines. The City
of San Diego will continue to operate and maintain the Pipelines, both in their current location until
they are relocated and in their relocated location, for potable water transmission conveyance to San
Diego customers to the north, south, and west.
The intent of the joint use agreement is to set forth the rights and obligations for the City of Chula
Vista and the City of San Diego in the construction, operation and maintenance of their respective
facilities within the Joint Use Areas.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property
holdings within 500 feet of the boundaries of the property which is the subject of this action.
Consequently, this item does not present a disqualifying real property-related financial conflict of
interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the
Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The Strong and
Secure Neighborhoods goal is supported by sustainable infrastructure as detailed in the Otay Ranch
Village 2, Otay Ranch Village 8W and Otay Ranch Village 9 Development Plans.
CURRENT YEAR FISCAL IMPACT
There is no current year fiscal impact cost. All cost for relocating the pipeline will be provided by City
of San Diego, Baldwin and OLC. All costs associated with the negotiation and preparation of the
proposed Agreements has been borne by the respective developers.
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ONGOING FISCAL IMPACT
After completion of the project, maintenance costs of the waterline will be the sole responsibly of City
San Diego.
ATTACHMENTS
Attachment No. 1: Location Map
Attachment No. 2: Joint Use Agreement 1 (Santa Diana-Victoria-Ortega Roads)
Attachment No. 3: Joint Use Agreement 2 (Otay Pipelines)
Attachment No. 4: Ordinance No. O-20464, approving a Participation Agreement between the City of
San Diego and the Developers
Staff Contact: Chris Bauer, Senior Civil Engineer, Development Services Department
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JUA – Santa Diana-Victoria-Ortega Roads 02.01.18 1
Recording Requested by and When
Recorded Return to:
City Clerk
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
No transfer tax is due as this is
a conveyance to a public agency of
less than a fee interest for which
no cash consideration has been paid
or received.
Above Space for Recorder’s Use Only
JOINT USE AGREEMENT BY AND BETWEEN THE CITY OF CHULA VISTA
AND THE CITY OF SAN DIEGO
This JOINT USE AGREEMENT ("Agreement") is made this _____ day of
_________________, 201_, by and between the CITY OF CHULA VISTA, a municipal
corporation ("CV"), and THE CITY OF SAN DIEGO, a municipal corporation ("SD")
(individually referred to as the “Party” and collectively as the “Parties”) and is made with reference
to the following facts:
RECITALS
A. WHEREAS, SD is engaged in the activity of conveying water to the environs
of the City of San Diego, State of California;
B. WHEREAS, the existing water main pipeline commonly known as the Otay 2nd
Pipeline, owned and operated by SD, crosses existing public streets (Santa Diana Road and Santa
Victoria Road) and to be constructed public streets (Ortega Street) in the area commonly known
as Otay Ranch Village 2 (“V2”), as described in attached Exhibit A and shown on attached Exhibit
B: Existing Pipeline Location (“Existing Pipeline Location”);
C. WHEREAS, Baldwin & Sons, LLC (“Baldwin”), is the developer of V2, as
approved by CV pursuant to Resolution No. 2012-013, recorded with the San Diego County
Recorder as Document No. 2012-0196901 on April 4, 2012; and as amended as the V2
development plan (“Baldwin Plan Amendment”) on November 4, 2014;
D. WHEREAS, Baldwin purchased from SD the 11.32 acres of property in the City of
Chula Vista, County of San Diego (APN 644-313-09) depicted in Exhibit A and Exhibit B pursuant
to that certain Purchase and Sale Agreement, on file in the Office of the City Clerk as Document
No. RR-308334 (PSA), subject to the reserved easement to SD for the existing Otay 2nd Pipeline
which crosses Santa Diana Road, Santa Victoria Road and the future Ortega Street.
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JUA – Santa Diana-Victoria-Ortega Roads 02.01.18 2
E. WHEREAS, CV has accepted, on behalf of the public, portions of Santa Diana
Road, Santa Victoria Road, and Ortega Street, all as shown on Chula Vista Tract Map No. 16094
on file in the Office of the County Recorder as Document No. 2016-7000083.
F. WHEREAS, the Baldwin Plan Amendment is in conflict with the Otay 2nd
Pipeline;
G. WHEREAS, CV desires to construct, operate and maintain a future regional public
transportation facility and related improvements, including but not limited to: a bus guideway;
landscape, sewer and storm drain pipelines and appurtenances; traffic signals and signal
interconnections; irrigation lines and irrigation control devices along with existing facilities and
other improvements located in, upon, over, under and across Santa Diana Road, Santa Victoria
Road, and the future extension of Ortega Street rights-of way;
H. WHEREAS, SD operates and maintains the pipeline and associated facilities and
appurtenances for such purpose located in, under and across that certain right-of-way dedicated to
CV by Baldwin as Santa Diana Road and Santa Victoria Road, by Chula Vista Tract Map No.
16094 dated February 22, 2016, and certain right-of-way soon to be constructed by Baldwin as
Ortega Street on property located in City of Chula Vista, State of California (collectively referred
to as the “Joint Use Area”) and depicted on the attached Exhibit B: Joint Use Area;
I. WHEREAS, CV and SD desire to set forth their respective rights and obligations
in the event of actual or potential present or future conflicts in the construction, operation or
maintenance of their respective facilities within the Joint Use Area.
NOW, THEREFORE, for valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, the Parties hereby agree as follows:
1. Non-Interruption of Use or Operation of Facilities. Each Party agrees and
covenants not to interrupt the use or operation of the other Party’s facilities located within that
Joint Use area. Any temporary interference by one Party with the use or operation of the other
Party’s facilities shall be made only with the other Party’s prior written consent. SD specifically
agrees, except as provided in paragraph 9 below, that during any temporary interference it will, as
practical, neither cause any lane of CV’s roadways to be closed for the entire length of such roads
nor cause the flow of traffic to be reduced to less than two lanes on such roads. The Parties agree
and covenant to work in good faith with the other Party to permit such temporary interference, and
the Party whose facilities are being interfered with shall not unreasonably withhold its consent to
such interference. Any and all costs, expenses or losses incurred by the Party whose facilities are
interfered with shall be borne by the Party causing the interference.
2. Neither Party First in Place. Neither SD nor CV shall be deemed the party “First
in Place” or prior in time and superior in title to the other.
3. Future Relocation of Facilities. In the event that future construction (including
expansion), operation or maintenance of SD’s or CV’s facilities shall cause the need for relocation
of some or all of the other’s facilities, the Party causing the relocation shall bear all costs, expenses
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JUA – Santa Diana-Victoria-Ortega Roads 02.01.18 3
and losses of or resulting from the relocation. Any relocation shall not occur without the prior
written consent of the Party whose facilities are being relocated, which consent shall not be
unreasonably withheld.
4. Effective Date. The effective date of this Agreement shall be the date this
Agreement is recorded with the San Diego County Recorder’s Office.
5. Agreement Binding Upon Successors. This Agreement shall be binding upon
and inure to the benefit of the representatives, agents, successors, assigns and interests of the
Parties as to any or all of the Joint Use Area, until released by the mutual consent of the Parties.
6. Agreement Runs with the Land. The covenants and terms contained in this
Agreement shall create equitable servitudes on the property described in attached Exhibit A,
and as shown in attached Exhibit B. If such covenants are breached, each Party shall have the
right to exercise all rights and remedies and to maintain any actions or suits at law or in equity
or other proper proceedings to enforce the curing of such breach to which either Party may be
entitled.
7. Quitclaim of Interests by SD. In the event that SD permanently terminates the
use of the Joint Use Area for the purposes set forth herein, SD shall quitclaim its joint use
interests which were acquired pursuant to this Agreement, at no cost or value, to CV, after the
vacation of SD’s easement pursuant to the PSA. CV shall agree to not approve any
construction or building permits for the property which includes the Existing Pipeline Location
until SD’s easement is vacated pursuant to the PSA. A Form of Quitclaim Deed is attached as
Exhibit C. For purposes of interpreting this Agreement, the term “permanently terminates”
shall mean a willful termination of the use as evidenced by written action or document of either
the governing body or official or employee possessing appropriate authority of SD.
8. Written Consent for Construction or Placement of Structures. No Party
shall place or construct, or permit the placement or construction of, any new structures,
temporary or permanent, on the Joint Use Area, without the prior written consent of the other
Party. Notwithstanding the foregoing, SD acknowledges and agrees that CV shall not be
required to obtain prior written consent to conduct routine maintenance or repairs of pavement,
streets, curbs, gutters, sidewalks, light and sign posts, landscaping, dry utilities, wet utilities,
or traffic signals on or within the Joint Use Area.
9. Emergency Repairs. Notwithstanding any contrary provision of paragraph 1
hereinabove, in the event of damage caused by an act of God, war, or other casualty, or damage
caused under circumstances where it would be impractical or impossible for one Party to notify
the other Party of the necessity for temporary interference with the other Party’s facilities, the
Party creating the temporary interference may, without notice, enter upon the Joint Use Area
and make emergency repairs to restore its service. The Party creating the temporary
interference shall, however, take reasonable and prudent measures to protect the installations
of the other Party and minimize such interference, and, as soon as practically possible, notify
the other Party of such emergency repairs. If permanent repairs are required after such
emergency repairs have been made, reasonable notice shall be given to the other Party. In the
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JUA – Santa Diana-Victoria-Ortega Roads 02.01.18 4
event of any emergency situation, each Party will make all reasonable efforts to notify the other
prior to such construction activities.
10. Mutual Indemnification. SD and CV agree that, except as provided in
Paragraphs 13.e, 13.f, and 13.g herein, each shall indemnify and hold the other harmless from
and against liability, loss, cost, damage and expense arising from (i) any negligent act or
omission of the other, its employees, agents, contractors, successors and assigns or (ii) the
location and existence of the other’s above-described facilities, whether defective or otherwise,
including, but not limited to, any such loss, cost, damage, liability and expense arising from
damage to or destruction of real and personal property or injury to or death of any person, shall
be determined by the law in effect at the time of incident giving rise to such liability, loss,
costs, damages or expense; provided, however, that liability and indemnification obligations
shall not be limited in any way by any limitation on the amount or type of damages,
compensation of benefits payable by or for the other under any Worker’s Compensation Acts,
Disability Benefit Acts or other Employee Benefit Acts. Liability to a third party(ies) shall be
divided between SD and CV in proportion to the measure of SD and CV’s liability.
Notwithstanding the foregoing, each Party shall hold harmless the other against damage to or
destruction of the indemnitor’s facilities caused by an act(s) of a third party(ies).
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be original and all of which shall constitute one and the same
documents.
12. Recording. The Parties hereto shall cause this Agreement to be recorded in the
Official Records of the San Diego County Recorder’s Office.
13. Miscellaneous Provisions.
13. a. Notices. Unless otherwise provided in this Agreement or by law, any and
all notices required or permitted by this Agreement or by law to be served on or delivered to either
Party shall be in writing and shall be deemed duly served, delivered, and received when personally
delivered to the Party to whom it is direct, or in lieu thereof, when three (3) business days have
elapsed following deposit in the U.S. mail, certified or prepaid, addressed to the address indicated
in this Agreement. A Party may change such address for the purpose of this paragraph by giving
written notice of such change to the other Party in the manner provided in this paragraph.
CITY OF CHULA VISTA
Department of Public Works/Engineering Division
276 Fourth Avenue
Chula Vista, CA 91910
Attn: City Engineer
CITY OF SAN DIEGO
Public Utilities Director
9192 Topaz Way
San Diego, CA 92123-1119
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JUA – Santa Diana-Victoria-Ortega Roads 02.01.18 5
CITY OF SAN DIEGO
Attention: Director, Real Estate Assets Department
1200 Third Avenue, Suite 1700 (MS 51A)
San Diego, CA 92101
13.b. Captions. Captions in this Agreement are inserted for convenience of
reference and do not define, describe or limit the scope or intent of this Agreement or any of its
terms.
13.c. Entire Agreement. This Agreement together with any other written
documents referred to herein, embody the entire agreement and understanding between the Parties
regarding the subject matter hereof and any and all prior or contemporaneous oral or written
representations, agreements, understandings, and/or statements shall be of no force and effect.
This Agreement is not intended to supersede or amend any other agreement between the Parties
unless expressly noted.
13.d. Recitals, Exhibits. Any recitals set forth above and any attached
exhibits are incorporated by reference into this Agreement.
13.e. Compliance with Laws. Each Party agrees to comply with all
applicable laws, ordinances, governmental regulations or agreements, regarding the habitat,
protected species, water quality, solid wastes, hazardous wastes, hazardous materials, toxic
substances, and any and all other forms of pollution or nuisance control (herein collectively
referred to as (“Standards”).
13.f. Mutual Indemnification for Abating Violation of Standards by
Other Party. Each Party shall indemnify the other Party for all costs (including, but not
limited to consulting, engineering, mitigation, clean-up, containment, disposal, and legal
costs) incurred by the other Party as a result of abating a violation of Standards in any
proceeding before any authority or court, and paying any fines or penalties imposed because
of a violation of any Standards, which result from a Party failing to comply with the
Standards.
13.g. Mutual Hold Harmless by and between SD and CV. SD and CV
hereby assumes liability for, and shall indemnify and hold harmless the other from any suit,
enforcement action, or claim resulting from or relating to (1) any alleged violation of
Standards, or (2) all injuries to or death of any persons and loss of or damages to property,
including without limitation, employees and property of the other, and which relate to any
alleged violation of Standards which would not have arisen but for the actions, or inactions,
of the other.
13.h. Authority of Signatories. Each signatory and Party hereto hereby
warrants and represents to the other Party that it has legal authority and capacity and
direction from its principal to enter into this Agreement, and that all resolutions and/or other
actions have been taken so as to enable said signatory to enter into this Agreement.
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JUA – Santa Diana-Victoria-Ortega Roads 02.01.18 6
13.i. Modification. This Agreement may not be modified, terminated, or
rescinded, in whole or in part, except by written instrument duly executed and acknowledged
by the Parties hereto, their successors, or assigns and duly recorded in the Office of the San
Diego County Recorder.
13.j. Severability. If any term, covenant or condition of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term, covenant,
or condition to person or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term, covenant, or condition shall be
valid and be enforced to the fullest extent permitted by law.
13.k. Preparation of Agreement. No inference, assumption or presumption
shall be drawn from the fact that a Party or its attorney prepared and/or drafted this
Agreement. It shall be conclusively presumed that both Parties participated equally in the
preparation and/or drafting this Agreement.
[NEXT PAGE IS SIGNATURE PAGE]
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JUA – Santa Diana-Victoria-Ortega Roads 02.01.18 7
SIGNATURE PAGE TO
JOINT USE AGREEMENT BY AND BETWEEN
CITIES OF CHULA VISTA AND SAN DIEGO
IN WITNESS WHEREOF, this Agreement is executed to be effective on the Effective
Date.
CITY OF CHULA VISTA
Gary Halbert, City Manager or Authorized
Designee
Date: _______________________________
CITY OF SAN DIEGO
By:
Vic Bianes
Public Utilities Director
Date: _______________________________
By:
Cybele L. Thompson
Director, Real Estate Assets
Date: _______________________________
Attest:
Kerry Bigelow, City Clerk
Approved as to form:
Glen R. Googins
City Attorney
Date: _______________________________
Approved as to form:
MARA W. ELLIOTT
City Attorney
By:
Hilda Mendoza
Deputy City Attorney
Date:
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Exhibit B: Joint Use Area
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EXHIBIT C
Form of Quitclaim Deed
When Recorded Mail to:
Gary Halbert, City Manager
The City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
SPACE ABOVEFOR RECORDER’S USE ONLY
The undersigned grantor hereby declares the documentary
transfer tax is exempt per Section 11922.
QUITCLAIM DEED
FOR VALUABLE CONSIDERATION, the sufficiency of which is hereby acknowledged,
THE CITY OF SAN DIEGO,
A CALIFORNIA MUNICIPAL CORPORATION (“GRANTOR”),
HEREBY remise, release and forever quitclaim to
THE CITY OF CHULA VISTA,
a California Municipal Corporation (“GRANTEE”),
THE FOLLOWING DESCRIBED PROPERTY in the County of San Diego, State of California,
more particularly described in the attached Exhibit A: Legal Description.
IN WITNESS WHEREOF, this QUITCLAIM Deed is executed to be effective upon its recordation
in the Official Records of San Diego County, California.
San Diego City Council Authorizing Resolution No. ________
Date of Final Passage: ________________
GRANTOR: THE CITY OF SAN DIEGO, a California municipal
corporation
BY:
Cybele L. Thompson
Director, Real Estate Assets
Date:
Approved as to form:
MARA W. ELLIOTT, City Attorney
BY: _____________________________
Name: _______________________
Title: _______________________
Date: _______________________
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2
[Quitclaim Deed]
NOTARY ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)
COUNTY OF ___________________________ )
On_________________________ (date) before me, __________________________________
(name and title of the officer) personally appeared ____________________________________
__________________________________________________________ (name(s) of signer(s)), who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature ______________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
2018-05-15 Agenda Packet Page 186
3
[Quitclaim Deed]
NOTARY ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)
COUNTY OF ___________________________ )
On_________________________ (date) before me, __________________________________
(name and title of the officer) personally appeared ____________________________________
__________________________________________________________ (name(s) of signer(s)), who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature ______________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
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PAGE 1 OF 1
:ML M:\2807\31\Legal Description\A15 JUA Exhibit A-Existing JU Areas-Crossings.docx
WO 2807-0031 7/24/17
EXHIBIT “A”
LEGAL DESCRIPTION
JOINT USE AREA
THOSE PORTIONS OF SANTA DIANA ROAD, SANTA VICTORIA ROAD, AND ORTEGA
STREET AS DEDICATED FOR PUBLIC USE PER CHULA VISTA TRACT NO. 11-05 OTAY
RANCH VILLAGE 2 NORTH NEIGHBORHOOD R-10B/PIPELINE, IN THE CITY OF CHULA
VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF
NO. 16094, FILED IN THE OFFICE OF THE SAN DIEGO COUNTY RECORDER FEBRUARY
22, 2016.
____________________________________________
DOUGLAS B. STROUP L.S. 8553
HUNSAKER & ASSOCIATES SAN DIEGO, INC.
Exhibit A to Quitclaim Deed
2018-05-15 Agenda Packet Page 188
Exhibit B to Quitclaim Deed
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JUA – Otay Pipelines 02.01.18 1
Recording Requested by and When
Recorded Return to:
City Clerk
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
No transfer tax is due as this is
a conveyance to a public agency of
less than a fee interest for which
no cash consideration has been paid
or received.
Above Space for Recorder’s Use Only
JOINT USE AGREEMENT BY AND BETWEEN THE CITY OF CHULA VISTA
AND THE CITY OF SAN DIEGO
This JOINT USE AGREEMENT ("Agreement") is made this _____ day of
_________________, 201_, by and between the CITY OF CHULA VISTA, a municipal
corporation ("CV"), and THE CITY OF SAN DIEGO, a municipal corporation ("SD")
(individually referred to as the “Party” and collectively as the “Parties”) and is made with reference
to the following facts:
RECITALS
A. WHEREAS, SD is engaged in the activity of conveying water to the environs
of the City of San Diego, State of California;
B. WHEREAS, the existing water main pipeline commonly known as the Otay 2nd
Pipeline, owned and operated by SD, crosses existing public streets (Santa Diana Road and Santa
Victoria Road) and to be constructed public streets (Ortega Street) in the area commonly known
as Otay Ranch Village 2 (“V2”), as described in attached Exhibit A and shown on attached Exhibit
B;
C. WHEREAS, Baldwin & Sons, LLC. (“Baldwin”), is the developer of V2, as
approved by CV pursuant to Resolution No. 2012-013, recorded with the San Diego County
Recorder as Document No. 2012-0196901 on April 4, 2012; and as amended as the V2
development plan (“Baldwin Plan Amendment”) on November 4, 2014;
D. WHEREAS, the Baldwin Plan Amendment is in conflict with the Otay 2nd
Pipeline;
E. WHEREAS, as a condition of approval of the Baldwin Plan Amendment and
Tentative Map No. PCS-12-05, Baldwin is required to relocate the Otay 2nd Pipeline into portions
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JUA – Otay Pipelines 02.01.18 2
of Olympic Parkway and La Media Road in the City of Chula Vista, State of California (“Joint
Use Area V2”), as described in attached Exhibit C and shown on attached Exhibit D;
F. WHEREAS, Otay Land, LLC (“OLC”), the developer of certain real property
commonly known as Otay Ranch Village 8 West (“V8W”) and Otay Ranch Village 9 (“V9”),
amended the V8W and V9 development plans on June 3, 2014 (“OLC Plan Amendment”);
G. WHEREAS, the OLC Plan Amendment is in conflict with the Otay 2nd Pipeline
and other water transportation facilities owned by SD and commonly known as Otay 3rd Pipeline,
and South San Diego Pipelines 1 and 2 (collectively referred to as the “Otay Pipelines”), as
described in attached Exhibit G and shown on attached Exhibit H;
H. WHEREAS, as a condition of approval of the OLC Plan Amendment and Tentative
Map No. PCS-12-05, OLC is required to relocate the Otay Pipelines into portions of La Media
Road, Otay Valley Road and to be constructed and named public streets in the City of Chula Vista,
State of California (“Joint Use Area V8W and V9”), as described in attached Exhibit E and shown
on attached Exhibit F for V8W and as described on attached Exhibit G and shown on attached
Exhibit H for V9;
I. WHEREAS, the Joint Use Area V2 and the Joint Use Area V8W and V9 shall be
referred to collectively hereinafter as the “Joint Use Area”;
J. WHEREAS, CV desires to construct, operate and maintain a future regional public
transportation facility and related improvements, including but not limited to: a bus guideway;
landscape, sewer and storm drain pipelines and appurtenances; traffic signals and signal
interconnections; irrigation lines and irrigation control devices along with existing facilities and
other improvements located in, upon, over, under and across Olympic Parkway, La Media Road,
and Otay Valley rights-of way;
K. WHEREAS, SD is willing to allow the relocation of the Otay Pipelines into the
Joint Use Area and will thereafter operate and maintain the pipeline and associated facilities and
appurtenances for such purpose located in, under and across that certain right-of-way previously
dedicated to CV by Baldwin as Olympic Parkway and La Media Road, and certain right-of-way
previously dedicated to CV by OLC as La Media Road and Otay Valley Road on property located
in City of Chula Vista, State of California;
L. WHEREAS, Baldwin and OLC will perform the actual relocation of the Otay
Pipelines which will result in the placement of the Otay Pipelines within the Joint Use Area, as
further set forth in that certain Participation Agreement for the Design and Construction of the
Otay 2nd Pipeline Relocation and Related Facilities, on file in the Office of the San Diego City
Clerk as Document No. OO-20464, and incorporated herein by reference;
M. WHEREAS, CV and SD desire to set forth their respective rights and obligations
in the event of actual or potential present or future conflicts in the construction, operation or
maintenance of their respective facilities within the Joint Use Area.
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JUA – Otay Pipelines 02.01.18 3
NOW, THEREFORE, for valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, the Parties hereby agree as follows:
1. Non-Interruption of Use or Operation of Facilities. Each Party agrees and
covenants not to interrupt the use or operation of the other Party’s facilities located within that
Joint Use area. Any temporary interference by one Party with the use or operation of the other
Party’s facilities shall be made only with the other Party’s prior written consent. SD specifically
agrees, except as provided in paragraph 9 below, that during any temporary interference it will, as
practical, neither cause any lane of CV’s roadways to be closed for the entire length of such roads
nor cause the flow of traffic to be reduced to less than two lanes on such roads. The Parties agree
and covenant to work in good faith with the other Party to permit such temporary interference, and
the Party whose facilities are being interfered with shall not unreasonably withhold its consent to
such interference. Any and all costs, expenses or losses incurred by the Party whose facilities are
interfered with shall be borne by the Party causing the interference.
2. Neither Party First in Place. Neither SD nor CV shall be deemed the party “First
in Place” or prior in time and superior in title to the other.
3. Future Relocation of Facilities. In the event that future construction (including
expansion), operation or maintenance of SD’s or CV’s facilities shall cause the need for relocation
of some or all of the other’s facilities, the Party causing the relocation shall bear all costs, expenses
and losses of or resulting from the relocation. Any relocation shall not occur without the prior
written consent of the Party whose facilities are being relocated, which consent shall not be
unreasonably withheld.
4. Effective Date. The effective date of this Agreement shall be the date this
Agreement is recorded with the San Diego County Recorder’s Office.
5. Agreement Binding Upon Successors. This Agreement shall be binding upon
and inure to the benefit of the representatives, agents, successors, assigns and interests of the
Parties as to any or all of the Joint Use Area, until released by the mutual consent of the Parties.
6. Agreement Runs with the Land. The covenants and terms contained in this
Agreement shall create equitable servitudes on the property described in attached Exhibits C,
E and G, and as shown in attached Exhibits D, F and H. If such covenants are breached, each
Party shall have the right to exercise all rights and remedies and to maintain any actions or
suits at law or in equity or other proper proceedings to enforce the curing of such breach to
which either Party may be entitled.
7. Quitclaim of Interests by SD. In the event that SD permanently terminates the
use of the Joint Use Area for the purposes set forth herein, SD shall quitclaim its interests at
no cost or value, to CV. For purposes of interpreting this Agreement, the term “permanently
terminates” shall mean a willful termination of the use as evidenced by written action or
document of either the governing body or official or employee possessing appropriate authority
of SD.
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JUA – Otay Pipelines 02.01.18 4
8. Written Consent for Construction or Placement of Structures. No Party
shall place or construct, or permit the placement or construction of, any new structures,
temporary or permanent, on the Joint Use Area, without the prior written consent of the other
Party. Notwithstanding the foregoing, SD acknowledges and agrees that CV shall not be
required to obtain prior written consent to conduct routine maintenance or repairs of pavement,
streets, curbs, gutters, sidewalks, light and sign posts, landscaping, dry utilities, wet utilities,
or traffic signals on or within the Joint Use Area.
9. Emergency Repairs. Notwithstanding any contrary provision of paragraph 1
hereinabove, in the event of damage caused by an act of God, war, or other casualty, or damage
caused under circumstances where it would be impractical or impossible for one Party to notify
the other Party of the necessity for temporary interference with the other Party’s facilities, the
Party creating the temporary interference may, without notice, enter upon the Joint Use Area
and make emergency repairs to restore its service. The Party creating the temporary
interference shall, however, take reasonable and prudent measures to protect the installations
of the other Party and minimize such interference, and, as soon as practically possible, notify
the other Party of such emergency repairs. If permanent repairs are required after such
emergency repairs have been made, reasonable notice shall be given to the other Party. In the
event of any emergency situation, each Party will make all reasonable efforts to notify the other
prior to such construction activities.
10. Mutual Indemnification. SD and CV agree that, except as provided in
Paragraphs 13.e, 13.f, and 13.g herein, each shall indemnify and hold the other harmless from
and against liability, loss, cost, damage and expense arising from (i) any negligent act or
omission of the other, its employees, agents, contractors, successors and assigns or (ii) the
location and existence of the other’s above-described facilities, whether defective or otherwise,
including, but not limited to, any such loss, cost, damage, liability and expense arising from
damage to or destruction of real and personal property or injury to or death of any person, shall
be determined by the law in effect at the time of incident giving rise to such liability, loss,
costs, damages or expense; provided, however, that liability and indemnification obligations
shall not be limited in any way by any limitation on the amount or type of damages,
compensation of benefits payable by or for the other under any Worker’s Compensation Acts,
Disability Benefit Acts or other Employee Benefit Acts. Liability to a third party(ies) shall be
divided between SD and CV in proportion to the measure of SD and CV’s liability.
Notwithstanding the foregoing, each Party shall hold harmless the other against damage to or
destruction of the indemnitor’s facilities caused by an act(s) of a third party(ies).
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be original and all of which shall constitute one and the same
documents.
12. Recording. The Parties hereto shall cause this Agreement to be recorded in the
Official Records of the San Diego County Recorder’s Office.
13. Miscellaneous Provisions.
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JUA – Otay Pipelines 02.01.18 5
13. a. Notices. Unless otherwise provided in this Agreement or by law, any and
all notices required or permitted by this Agreement or by law to be served on or delivered to either
Party shall be in writing and shall be deemed duly served, delivered, and received when personally
delivered to the Party to whom it is direct, or in lieu thereof, when three (3) business days have
elapsed following deposit in the U.S. mail, certified or prepaid, addressed to the address indicated
in this Agreement. A Party may change such address for the purpose of this paragraph by giving
written notice of such change to the other Party in the manner provided in this paragraph.
CITY OF CHULA VISTA
Department of Public Works/Engineering Division
276 Fourth Avenue
Chula Vista, CA 91910
Attn: City Engineer
CITY OF SAN DIEGO
Public Utilities Director
9192 Topaz Way
San Diego, CA 92123-1119
CITY OF SAN DIEGO
Attention: Director, Real Estate Assets Department
1200 Third Avenue, Suite 1700 (MS 51A)
San Diego, CA 92101
13.b. Captions. Captions in this Agreement are inserted for convenience of
reference and do not define, describe or limit the scope or intent of this Agreement or any of its
terms.
13.c. Entire Agreement. This Agreement together with any other written
documents referred to herein, embody the entire agreement and understanding between the Parties
regarding the subject matter hereof and any and all prior or contemporaneous oral or written
representations, agreements, understandings, and/or statements shall be of no force and effect.
This Agreement is not intended to supersede or amend any other agreement between the Parties
unless expressly noted.
13.d. Recitals, Exhibits. Any recitals set forth above and any attached
exhibits are incorporated by reference into this Agreement.
13.e. Compliance with Laws. Each Party agrees to comply with all
applicable laws, ordinances, governmental regulations or agreements, regarding the habitat,
protected species, water quality, solid wastes, hazardous wastes, hazardous materials, toxic
substances, and any and all other forms of pollution or nuisance control (herein collectively
referred to as (“Standards”).
13.f. Mutual Indemnification for Abating Violation of Standards by
Other Party. Each Party shall indemnify the other Party for all costs (including, but not
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JUA – Otay Pipelines 02.01.18 6
limited to consulting, engineering, mitigation, clean-up, containment, disposal, and legal
costs) incurred by the other Party as a result of abating a violation of Standards in any
proceeding before any authority or court, and paying any fines or penalties imposed because
of a violation of any Standards, which result from a Party failing to comply with the
Standards.
13.g. Mutual Hold Harmless by and between SD and CV. SD and CV
hereby assumes liability for, and shall indemnify and hold harmless the other from any suit,
enforcement action, or claim resulting from or relating to (1) any alleged violation of
Standards, or (2) all injuries to or death of any persons and loss of or damages to property,
including without limitation, employees and property of the other, and which relate to any
alleged violation of Standards which would not have arisen but for the actions, or inactions,
of the other.
13.h. Authority of Signatories. Each signatory and Party hereto hereby
warrants and represents to the other Party that it has legal authority and capacity and
direction from its principal to enter into this Agreement, and that all resolutions and/or other
actions have been taken so as to enable said signatory to enter into this Agreement.
13.i. Modification. This Agreement may not be modified, terminated, or
rescinded, in whole or in part, except by written instrument duly executed and acknowledged
by the Parties hereto, their successors, or assigns and duly recorded in the Office of the San
Diego County Recorder.
13.j. Severability. If any term, covenant or condition of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term, covenant,
or condition to person or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term, covenant, or condition shall be
valid and be enforced to the fullest extent permitted by law.
13.k. Preparation of Agreement. No inference, assumption or presumption
shall be drawn from the fact that a Party or its attorney prepared and/or drafted this
Agreement. It shall be conclusively presumed that both Parties participated equally in the
preparation and/or drafting this Agreement.
[NEXT PAGE IS SIGNATURE PAGE]
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JUA – Otay Pipelines 02.01.18 7
SIGNATURE PAGE TO
JOINT USE AGREEMENT BY AND BETWEEN
CITIES OF CHULA VISTA AND SAN DIEGO
IN WITNESS WHEREOF, this Agreement is executed to be effective on the Effective
Date.
CITY OF CHULA VISTA
Gary Halbert, City Manager or Authorized
Designee
Date: _______________________________
CITY OF SAN DIEGO
By:
Vic Bianes
Public Utilities Director
Date: _______________________________
By:
Cybele L. Thompson
Director, Real Estate Assets
Date: _______________________________
Attest:
Kerry Bigelow, City Clerk
Approved as to form:
Glen R. Googins
City Attorney
Date: _______________________________
Approved as to form:
MARA W. ELLIOTT
City Attorney
By:
Hilda Mendoza
Deputy City Attorney
Date:
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EXHIBIT “C”
LEGAL DESCRIPTION
JOINT USE AREA
THOSE PORTIONS OF LA MEDIA ROAD DEDICATED TO PUBLIC USE PER CHULA VISTA
TRACT NO. 05-09 OTAY RANCH VILLAGE 7 “A” MAP NO. 1 ACCORDING TO MAP
THEREOF NO. 15134 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY SEPTEMBER 27, 2005 AND CHULA VISTA TRACT NO. 02-05 OTAY RANCH
VILLAGE 6 UNIT 2 “A” MAP NO. 1 ACCORDING TO MAP THEREOF NO. 14447 FILED IN
THE OFFICE OF SAID COUNTY RECORDER SEPTEMBER 18, 2002 AND CITY TRACT NO.
02-03 MCMILLIN OTAY RANCH VILLAGE 6, “A” MAP ACCORDING TO MAP THEREOF NO.
14432 FILED IN THE OFFICE OF SAID COUNTY RECORDED AUGUST 30, 2002
TOGETHER WITH THOSE PORTIONS OF OLYMPIC PARKWAY DEDICATED TO PUBLIC
USE PER CHULA VISTA TRACT NO. 98-04 MCMILLIN OTAY RANCH SPA 1 PHASE 3
ACCORDING TO MAP THEREOF NO. 13884 FILED IN THE OFFICE OF SAID COUNTY
RECORDER DECEMBER 8, 1999 AND CHULA VISTA TRACT NO. 96-04A OTAY RANCH
VILLAGE 1 “A” MAP NO. 2 ACCORDING TO MAP THEREOF NO. 13990 FILED IN THE
OFFICE OF SAID COUNTY RECORDER JUNE 27, 2000, ALL IN THE CITY OF CHULA
VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
BEING A 40.00 FOOT WIDE STRIP OF LAND LYING 20.00 FEET ON BOTH SIDES OF THE
FOLLOWING DESCRIBED CENTERLINE:
COMMENCING AT THE SOUTHEAST CORNER OF LOT “C” OF CHULA VISTA TRACT NO.
06-05 OTAY RANCH VILLAGE 2 AND PORTIONS OF VILLAGE 4 “A” MAP, IN THE CITY OF
CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP
THEREOF NO. 15350 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY MAY 26, 2006, SAID POINT ALSO BEING ON THE WESTERLY SIDELINE OF LA
MEDIA ROAD DEDICATED PER SAID MAP NO. 15134; THENCE ALONG THE SOUTHERLY
SUBDIVISION BOUNDARY OF SAID MAP NO. 15134 NORTH 71°57’57” EAST, 33.40 FEET
TO A LINE LYING 32.00 FEET EASTERLY OF AND PARALLEL WITH SAID WESTERLY
SIDELINE AND THE TRUE POINT OF BEGINNING; THENCE ALONG SAID PARALLEL LINE
NORTH 34°39'20" WEST, 761.41 FEET TO THE BEGINNING OF A 3032.00 FOOT RADIUS
PAGE 1 OF 4
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CURVE CONCAVE EASTERLY; THENCE NORTHERLY ALONG THE ARC OF SAID CURVE
THROUGH A CENTRAL ANGLE OF 35°47'15" A DISTANCE OF 1893.81 FEET; THENCE
NORTH 01°07'54" EAST, 715.03 FEET TO THE BEGINNING OF A 1476.00 FOOT RADIUS
CURVE CONCAVE WESTERLY; THENCE NORTHERLY ALONG THE ARC OF SAID CURVE
THROUGH A CENTRAL ANGLE OF 01°13'17" A DISTANCE OF 31.46 FEET; THENCE
NORTH 00°05'23" WEST, 155.69 FEET TO THE BEGINNING OF A 1524.00 FOOT RADIUS
CURVE CONCAVE EASTERLY; THENCE NORTHERLY ALONG THE ARC OF SAID CURVE
THROUGH A CENTRAL ANGLE OF 01°13'17" A DISTANCE OF 32.49 FEET; THENCE
NORTH 01°07'54" EAST, 109.65 FEET; THENCE NORTH 06°27'23" WEST, 90.87 FEET;
THENCE NORTH 01°07'54" EAST, 161.69 FEET; THENCE LEAVING SAID PARALLEL LINE
NORTH 03°46'28" EAST, 130.12 FEET; THENCE NORTH 01°07'54" EAST, 170.87 FEET TO
THE BEGINNING OF A 95.00 FOOT RADIUS CURVE CONCAVE EASTERLY; THENCE
NORTHERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF
13°06'57" A DISTANCE OF 21.75 FEET TO THE BEGINNING OF A 135.00 FOOT RADIUS
REVERSE CURVE CONCAVE WESTERLY, A RADIAL LINE TO SAID POINT BEARS SOUTH
75°45’09” EAST; THENCE NORTHERLY ALONG THE ARC OF SAID CURVE THROUGH A
CENTRAL ANGLE OF 13°06'57" A DISTANCE OF 30.90 FEET TO A LINE LYING 32.00 FEET
EASTERLY OF AND PARALLEL WITH THE WESTERLY SIDELINE OF SAID LA MEDIA
ROAD; THENCE ALONG SAID PARALLEL LINE NORTH 01°07'54" EAST, 243.29 FEET TO
THE BEGINNING OF A 2020.00 FOOT RADIUS CURVE CONCAVE WESTERLY; THENCE
NORTHERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF
03°20'42" A DISTANCE OF 117.93 FEET TO THE BEGINNING OF A 4368.00 FOOT RADIUS
COMPOUND CURVE CONCAVE WESTERLY, A RADIAL LINE TO SAID POINT BEARS
NORTH 87°47’13” EAST; THENCE NORTHERLY ALONG THE ARC OF SAID CURVE
THROUGH A CENTRAL ANGLE OF 19°47'29" A DISTANCE OF 1508.82 FEET TO THE
BEGINNING OF A 4366.00 FOOT RADIUS NON-TANGENT COMPOUND CURVE CONCAVE
SOUTHWESTERLY, A RADIAL LINE TO SAID POINT BEARS NORTH 66°59'30" EAST,
THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL
ANGLE OF 02°59'43" A DISTANCE OF 228.25 FEET TO THE BEGINNING OF A 4364.00
FOOT RADIUS NON-TANGENT COMPOUND CURVE CONCAVE SOUTHWESTERLY, A
RADIAL LINE TO SAID POINT BEARS NORTH 65°00'02" EAST, THENCE
NORTHWESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF
03°29'52" A DISTANCE OF 266.40 FEET; THENCE NORTH 28°29'50" WEST, 53.50 FEET TO
THE BEGINNING OF A 50.00 FOOT RADIUS CURVE CONCAVE SOUTHERLY; THENCE
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LEAVING SAID PARALLEL LINE WESTERLY ALONG THE ARC OF SAID CURVE THROUGH
A CENTRAL ANGLE OF 89°33'20" A DISTANCE OF 78.15 FEET; THENCE SOUTH 61°56'50"
WEST, 170.24 FEET TO THE BEGINNING OF A 170.00 FOOT RADIUS CURVE CONCAVE
NORTHERLY; THENCE WESTERLY ALONG THE ARC OF SAID CURVE THROUGH A
CENTRAL ANGLE OF 18°33'00" A DISTANCE OF 55.04 FEET TO THE BEGINNING OF A
210.00 FOOT RADIUS REVERSE CURVE CONCAVE SOUTHERLY, A RADIAL LINE TO SAID
POINT BEARS NORTH 09°30’10” WEST; THENCE WESTERLY ALONG THE ARC OF SAID
CURVE THROUGH A CENTRAL ANGLE OF 19°26'50" A DISTANCE OF 71.28 FEET TO A
LINE LYING 32.00 FEET NORTHWESTERLY OF AND PARALLEL WITH THE SOUTHERLY
SIDELINE OF SAID OLYMPIC PARKWAY; THANCE ALONG SAID PARALLEL LINE SOUTH
61°03'00" WEST, 48.95 FEET; THENCE SOUTH 62°00'21" WEST, 45.46 FEET TO THE
BEGINNING OF A NON-TANGENT 2476.00 FOOT RADIUS CURVE CONCAVE
SOUTHEASTERLY, A RADIAL LINE TO SAID POINT BEARS NORTH 28°31'39" WEST,
THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL
ANGLE OF 04°10'44" A DISTANCE OF 180.59 FEET TO THE BEGINNING OF A 3968.00
FOOT RADIUS COMPOUND CURVE CONCAVE SOUTHEASTERLY, A RADIAL LINE TO
SAID POINT BEARS NORTH 32°42’23” WEST; THENCE SOUTHWESTERLY ALONG THE
ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 04°41'07" A DISTANCE OF
324.48 FEET; THENCE SOUTH 52°36'30" WEST, 531.20 FEET TO THE BEGINNING OF A
4032.00 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY; THENCE
SOUTHWESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF
04°35'30" A DISTANCE OF 323.13 FEET; THENCE SOUTH 57°12'00" WEST, 1010.45 FEET
TO THE BEGINNING OF A 9968.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY;
THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL
ANGLE OF 02°04'00" A DISTANCE OF 359.55 FEET; THENCE SOUTH 55°08'00" WEST,
918.09’ FEET TO A POINT IN THE CENTERLINE OF THAT CERTAIN WATER EASEMENT
GRANTED TO THE CITY OF SAN DIEGO PER GRANT DEED-WATER EASEMENT
RECORDED MARCH 7, 2008 AS DOC. NO. 2008-0121847, OF OFFICIAL RECORDS, SAID
POINT LYING 18.00 FEET NORTHWESTERLY FROM THE SOUTHEASTERLY TERMINUS
OF THAT CERTAIN COURSE SHOWN AND DESCRIBED IN PARCEL “B” OF SAID WATER
EASEMENT AS “N34°52’00”W, 20.00’”, SAID POINT ALSO BEING THE POINT OF
TERMINUS.
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0 1000
EXHIBIT "D"
JOINT USE AREA
2000 3000
SCALE 1 " = 1 000'
VILLAGE
OTA Y RAJ\JCH
VILLAGE 2
HERITAGE ROAD
LEGEND: = -=- -= INDICATES FUTURE JOINT USE AREA
SHEET 1 OF 4
OTA Y RAJ\JCH
VILLAGE 6
SANTA
VENETIA
STREET
BIRCH
ROAD
- -INDICATES SHEET LIMITS (THIS SHEET ONLY)[I] INDICATES SHEET NUMBER {THIS SHEET ONLY)
P. 0. C. INDICATES POINT OF COMMENCEMENT
T.P.0.8. INDICATES TRUE POINT OF BEGINNING
LOT C
MAP 15350
P.O.T.
( )
I I
INDICATES POINT OF TERMINUS
INDICATES RECORD DATA PER MAP NO. 15350
INDICATES RECORD DATA PER WATER EASEMENT TO THE CITY OF SAN
DIEGO RECORDED MARCH 7, 2008 AS DOC. NO. 2008-0121847, O.R.
HUNSAKER
& ASSOCIATES
PlNN«i 11117 w.i-... IIOIBNi 5111 DIIFt ca tzlZI
SlavMilC ..... t5IIO• fl181510551.1414
R:\0617\,!tMop\EX JUA Exhibit D-Futurt1 SHT 01.dwgllNov-26-2014:15:50 W.O. 2807-0031
P.O.C. SE COR. LOT C
MAP 15350
2018-05-15 Agenda Packet Page 205
EXHIBIT "D"
JOINT USE AREA
SHEET 2 OF 4
SEE SHEET 3
STATE STREET ) B
1\/JAP 15350
11 --1,1
�
11"11-II� II� ....... 1 11
Lti II en .......
N01 °07'54"E 161.69'
N06 °27'2J·w 90.87'
N01 °07'54.E 109.65'
/J=01 °13'1r R=1524.00' L=32.49'
Noo·o5·2J"W 155. 69'
.IJ.=01 °13'17" R=1476.00' L=31.46'
-
tii�ni
OTA Y RAJ\JCH
VILLAGE 7
MAP 15134
OTA Y RAJ\JCH
VILLAGE 2
PORnON OF LA MEDIA ROAD
DEDICATED PER MAP NO. 15134.
0 500 1000 1500
SCALE 1 " = 500'
LOT
HUNSAKER
& ASSOCIATES
PlMNi 11'117Wlpa ....
BDIBNi s.. DIIFt ca !IZIZI
UVlYNl ...... t5IIO• FlC(ISIGSSP,WM
R:\0617\t!tMop\EX JUA Exhibit D-Futurt1 SHT 02.dwgllNov-26-2014:15:39 W.O. 2807-0031
SANTA
LUNA
STREET
2018-05-15 Agenda Packet Page 206
EXHIBIT "D"
JOINT USE AREA
SHEET 3 OF 4
N62"00'21 "E 45.46' /J=04"10'44" R=2476.00' L=180.59' N32"42'23"Wi R
PORnON OF OLYMPIC---=----
PARKWAY DEDICATED
PER MAP NO. 13990.
HUNSAKER
& ASSOCIATES
IAN DIECQ, INC.
PORnON OF OLYMPIC
PARKWAY DEDICATED PER
MAP NO. 13884.
"'Lo_.......,.!J=03"29'52" R=4364.00' L=266.40'
MAP
JV/AP
N65"00'02"Ef!Jl_ R=4364'
/N63"59'47"E(R) R=4366' ,,��--===--/J=02"59'43" R=4366.00' L=228.25'
N66 °59'30"E.f!J2.. R=4366'
/"f.16 7°59'43"E(R) R=4368'
MAP 14492
PORnON OF LA MEDIA
ROAD DEDICATED PER
MAP NO. 14432.
OTA Y RAJ\JCH
VJLlAGE B
PORTION OF LA MEDIA ROAD
DEDICATED PER MAP NO. 14447.
/J=03"20'42" R=2020.00' L= 117.93'
NO 1 "07'54"E 243.29'
/J=13"06'57" R=135.00' L=30.90'
�'(£J!(Bl ·------,i:�N =13"06 '57" R=95.0 0' L=21.75'
NO 1 "07'54"E 170.87' N03"46'28"E 130. 12' STATE BIRCH ROAD
0 500 1000 1500
PWNIG !11117Wlplll.._ SCALE 1" =500' ENmllllNi 5111 ._, C& IZIZI UffllNG --t50D· ..... 1414
R:\0617\d:Map\EX JUA Exhibit 0-Futun, SHT OJ.dwg[}Nov-26-2014:16:42 W.O. 2807-0031
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0
EXHIBIT "D"
JOINT USE AREA
500 1000
SCALE 1 " = 500'
1500
DTAY RAJ\JCH VILLAGE 1
MAP 13990
PORTION OF OLYMPIC PARKWAY DEDICATED PER MAP NO. 13990.
�-�-
SHEET 4 OF 4
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EXHIBIT "G"
VILLAGE 9 JOINT USE AREA
LEGAL DESCRIPTION
THAT PORTION OF LOT 17 OF THE OTAY RANCHO, IN THE CITY OF CHULA VISTA,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO.
862, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
FEBRUARY 7, 1900, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEING A 38.00 FOOT WIDE STRIP OF LAND LYING 19.00 FEET ON EACH SIDE OF THE
FOLLOWING DESCRIBED CENTERLINE:
COMMENCING AT THE SOUTHWEST CORNER OF SAID LOT 17; THENCE ALONG THE
WESTERLY LINE THEREOF NORTH 18°40'33" WEST, 891.63 FEET TO A POINT ON THE
NORTHERLY LINE OF THAT CERTAIN LAND GRANTED TO OTAY LAND COMPANY, LLC,
SHOWN AND DESCRIBED AS "PORTION 2 DESCRIPTION" IN GRANT DEED RECORDED
AUGUST 16, 2013 AS DOC. NO. 2013-0516511, OF OFFICIAL RECORDS; THENCE
CONTINUING ALONG SAID WESTERLY LINE OF LOT 17 NORTH 18° 40'33" WEST,
44.23 FEET TO THE TRUE POINT OF BEGINNING, SAID POINT BEING THE BEGINNING
OF A NON-TANGENT 2974.00 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A
RADIAL LINE TO SAID POINT BEARS SOUTH 26°40'00" EAST; THENCE LEAVING SAID
WESTERLY LINE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A
CENTRAL ANGLE OF 06°23'05" A DISTANCE OF 331.41 FEET; THENCE NORTH 56°56'55"
EAST, 573.54 FEET TO THE BEGINNING OF A 1226.00 FOOT RADIUS CURVE CONCAVE
SOUTHEASTERLY; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE
THROUGH A CENTRAL ANGLE OF 15°51'33" A DISTANCE OF 339.35 FEET; THENCE
NORTH 72°48'28" EAST, 1424.81 FEET TO THE EASTERLY LINE OF SAID LOT 17 AND THE
POINT OF TERMINUS, SAID POINT LYING 15.33 FEET SOUTHEASTERLY ALONG SAID
EASTERLY LINE FROM THE INTERSECTION OF SAID EASTERLY LINE WITH THE
NORTHERLY LINE OF SAID LAND DESCRIBED AS "PORTION 2 DESCRIPTION".
THE SIDELINES OF THE HEREINABOVE DESCRIBED 38.00 FOOT WIDE STRIP OF LAND
TO BE LENGTHENED OR SHORTENED TO TERMINATE WESTERLY IN SAID WESTERLY
LINE OF LOT 17 AND EASTERLY IN SAID EASTERLY LINE OF LOT 17.
PAGE 1 OF 2
:
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THE HEREINABOVE DESCRIBED PARCEL OF LAND CONTAINS 2.328 ACRES, MORE OR
LESS.
DOU AS B. ROUP L.S. 8553
HUNSAKER & ASSOCIATES SAN DIEGO, INC.
PAGE 2 OF2
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RESOLUTION NO. 2018-_____
RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING A JOINT USE AGREEMENT
BETWEEN THE CITY OF SAN DIEGO AND THE CITY OF
CHULA VISTA FOR THE COLOCATION OF A CITY OF SAN
DIEGO WATERLINE WITHIN THE JOINT USE AREA
LOCATED IN PORTIONS OF SANTA DIANA ROAD, SANTA
VICTORIA ROAD AND THE FUTURE ORTEGA STREET IN
THE OTAY RANCH VILLAGE 2 COMMUNITY AND
AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE
TO EXECUTE THE AGREEMENT
WHEREAS, City of San Diego (“San Diego”) owns potable water pipelines within the
Otay Ranch Community in the City of Chula Vista (“Chula Vista”); and
WHEREAS, certain water conveyance facilities owned by San Diego are located within
Chula Vista, and on occasion, development within Chula Vista may be in conflict with San
Diego’s water transportation facilities; and
WHEREAS, Baldwin & Sons, LLC (“Baldwin”), a developer of a certain real property
within Chula Vista, commonly known as Otay Ranch Village 2 (“V2”) amended the V2
development plan (“Baldwin Plan Amendment”) on November 4, 2014; and
WHEREAS, the Baldwin Plan Amendment is in conflict with certain water transportation
facilities owned and operated by San Diego commonly known as Otay 2nd Pipeline ; and
WHEREAS, San Diego’s Otay 2nd Pipeline, currently located to the west of La Media
Road, intersects two of Chula Vista’s public streets, Santa Diana Road and Santa Victoria Road,
and will intersect with the future Ortega Street; and
WHEREAS, the areas of intersection, as described in the Joint Use Agreement and
depicted in the associated exhibits to the Joint Use Agreement, will be established as joint use
areas and will set forth the San Diego’s and Chula Vista’s respective rights and obligations
within the Joint Use Area (as defined in the Joint Use Agreement) until the Otay 2nd Pipeline is
relocated; and
WHEREAS, San Diego’s Public Utilities Department agreed to allow the relocation of
Otay 2nd Pipeline into the Joint Use Area and will thereafter operate and maintain the pipeline
and all appurtenances for such purposes located in, under and across that certain right-of-way
previously dedicated to Chula Vista by Baldwin as Santa Diana Road and Santa Victoria Road,
and certain right-of-way soon to be constructed by Baldwin as Ortega Street on property located
in San Diego County, California; and
WHEREAS, Chula Vista desires to construct, operate and maintain a future regional
public transportation facility and related improvements, including but not limited to: a bus
guideway; landscape, sewer and storm drain pipelines and appurtenances; traffic signals and
signal interconnections; irrigation lines and irrigation control devices along with existing
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Resolution No. ______
Page 2
facilities and other improvements located in, upon, over, under and across Santa Diana Road,
Santa Victoria Road, and the future extension of Ortega Street rights-of way; and
WHEREAS, Chula Vista and San Diego desire to set forth their respective rights and
obligations in the event of actual or potential present or future conflicts in the construction,
operation or maintenance of their respective facilities within the Joint Use Area.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista approves the Joint Use Agreement between the City of Chula Vista and City of San Diego
for the colocation of a City of San Diego waterline within the Joint Use Area located in portions
of Santa Diana Road, Santa Victoria Road, and future Ortega Street in the Otay Ranch Village 2
community, in the form presented, with such minor modifications as may 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 City Manager or his designee to execute same.
Presented by Approved as to form by
______________________________________________________
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
2018-05-15 Agenda Packet Page 246
RESOLUTION NO. 2018-_____
RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING A JOINT USE AGREEMENT
BETWEEN THE CITY OF SAN DIEGO AND THE CITY OF
CHULA VISTA FOR THE COLOCATION OF A CITY OF SAN
DIEGO WATERLINE WITHIN THE JOINT USE AREA
LOCATED IN PORTIONS OF OLYMPIC PARKWAY, LA
MEDIA ROAD, OTAY VALLEY ROAD AND ALL TO BE
CONSTRUCTED AND NAMED STREETS IN THE OTAY
RANCH VILLAGE 2, VILLAGE 8 WEST, AND VILLAGE 9
COMMUNITIES AND AUTHORIZING THE CITY MANAGER
OR HIS DESIGNEE TO EXECUTE THE AGREEMENT
WHEREAS, City of San Diego (“San Diego”) owns potable water pipelines within the
Otay Ranch Community in the City of Chula Vista (“Chula Vista”); and
WHEREAS, Baldwin & Sons, LLC (“Baldwin”), a developer of a certain real property
within Chula Vista, commonly known as Otay Ranch Village 2 (“V2”) amended the V2
development plan (“Baldwin Plan Amendment”) on November 4, 2014; and
WHEREAS, Otay Land, LLC (“OLC”), the developer of Otay Ranch Village 8 West
(“V8W”) and Otay Ranch Village 9 (“V9”), amended the V8W and V9 development plans on
June 3, 2014 (“OLC Plan Amendment”); and
WHEREAS, the Baldwin Plan Amendment and OLC Plan Amendment conflict with
certain water transportation facilities owned and operated by San Diego commonly known as
Otay 2nd Pipeline, Otay 3
rd Pipeline, and South San Diego Pipelines 1 and 2 (collectively
referred to as the “Otay Pipelines”); and
WHEREAS, the Baldwin Plan Amendment and OLC Plan Amendment required Baldwin
and OLC to relocate the Otay Pipelines into portions of Olympic Parkway, portions of La Media
Road, Otay Valley Road and to be constructed and named public streets in the City of Chula
Vista, State of California within the Joint Use Area (as defined in the Joint Use Agreement); and
WHEREAS, the Joint Use Area, as described in the Joint Use Agreement and depicted in
the associated exhibits to the Joint Use Agreement, will be established and will set forth the San
Diego’s and Chula Vista’s respective rights and obligations within the Joint Use Area until the
Otay Pipelines are relocated; and
WHEREAS, Sans Diego’s Public Utilities Department agreed to allow the relocation of
Otay Pipelines into the Joint Use Areas and will thereafter operate and maintain the pipelines and
all appurtenances for such purposes located in, under and across that certain right-of-way
previously dedicated to Chula Vista by Baldwin as Olympic Parkway and La Media Road, and
certain right-of-way previously dedicated to Chula Vista by OLC as La Media Road and Otay
Valley Road on property located in San Diego County, California; and
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Resolution No. ______
Page 2
WHEREAS, Chula Vista desires to construct, operate and maintain a future regional
public transportation facility and related improvements, including but not limited to: a bus
guideway; landscape, sewer and storm drain pipelines and appurtenances; traffic signals and
signal interconnections; irrigation lines and irrigation control devices along with existing
facilities and other improvements located in, upon, over, under and across Olympic Parkway, La
Media Road and Otay Lakes Road rights-of way; and
WHEREAS, Chula Vista and San Diego desire to set forth their respective rights and
obligations in the event of actual or potential present or future conflicts in the construction,
operation or maintenance of their respective facilities within the Joint Use Area.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista approves the Joint Use Agreement between the City of Chula Vista and City of San Diego
for the colocation of a City of San Diego waterline within the Joint Use Area located in portions
of Olympic Parkway, La Media Road, Otay Valley Road and all to be constructed and named
streets in the Otay Ranch Village 2, Village 8W, and Village 9 communities in the form
presented, with such minor modifications as may 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
City Manager or his designee to execute same.
Presented by Approved as to form by
______________________________________________________
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
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City of Chula Vista
Staff Report
File#:18-0153, Item#: 9.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (1) APPROVING THE
2018/2019 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ANNUAL ACTION
PLAN FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT, HOME INVESTMENT
PARTNERSHIPS ACT GRANT AND THE EMERGENCY SOLUTIONS GRANT; (2) AUTHORIZING
THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE AGREEMENTS WITH EACH
SUBRECIPIENT; AND (3) AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE
ANY AND ALL HUD DOCUMENTS RELATED TO THE GRANTS
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
On an annual basis, the City of Chula Vista receives Community Development Block Grant (CDBG),
HOME Investment Partnerships (HOME) Program, and Emergency Solutions Grant (ESG) Program
funds from the U.S. Department of Housing and Urban Development (HUD) to contribute towards a
number of diverse programs and services to enhance the quality of life for Chula Vista's low to
moderate income residents. To receive these funds, the City prepares an annual Action Plan to fund
specific activities consistent with the housing and community development needs of these residents
and strategies to address these needs as identified in the City’s adopted 2015-2019 Five-Year
Consolidated Plan.
The 2018/19 Annual Action Plan is included in this report for consideration and approval. Approval to
execute implementing documents and appropriate funds is also requested.
ENVIRONMENTAL REVIEW
Environmental Notice
The Development Services Director has reviewed the proposed activities for compliance with the
California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA). The
proposed activities, with the exception of six, are public services and are not considered "Projects" as
defined under Section 15378(b)(5) of the State CEQA Guidelines because the proposals consist of a
reporting action, is not for a site specific project(s) and will not result in a direct or indirect physical
change in the environment.
The capital improvement projects are categorically excluded under NEPA pursuant to 24 CFR 58.35
(a)(1). These projects are also exempt from CEQA pursuant to §15060(c)(3). The activities will not
affect density or land use and will have no significant effect on the environment. This item does not
include a specific housing development project. Once an affordable housing project has been
defined, environmental review will be required and a CEQA/NEPA determination completed prior to
initiation of any related project activity.
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File#:18-0153, Item#: 9.
Environmental Determination
The Development Services Director has reviewed the proposed activities for compliance with the
California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA). The
proposed activities, with the exception of three, are public services and are not considered "Projects"
as defined under Section 15378(b)(5) of the State CEQA Guidelines because the proposals consist
of a reporting action, is not for a site specific project(s) and will not result in a direct or indirect
physical change in the environment. Therefore, pursuant to §15060(c)(3) of the State CEQA
Guidelines, these activities are not subject to CEQA. Under NEPA, the activities qualify for a
Certification of Exemption pursuant to Title 24, Part 58.34(a)(2)&(3) of the Code of Federal
Regulations and pursuant to the U.S. Department of Housing and Urban Development Environmental
Guidelines. Thus, no further environmental review is necessary at this time.
Capital Improvement Projects:
The Anita Street, “D” Street and Norman Park Improvement Projects are categorically excluded
under NEPA pursuant to 24 CFR 58.35 (a)(1) of the NEPA regulations. These projects are also
exempt from CEQA pursuant to CEQA guidelines Section 15301 (existing facilities). The activities
will not affect density or land use and will have no significant effect on the environment.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
As an entitlement community with the U.S. Department of Housing and Urban Development, the City
receives funds under three block grant programs:
• Community Development Block Grant (CDBG)
• Home Investment Partnerships (HOME)
• Emergency Solutions Grant (ESG)
The grant amounts allocated to each jurisdiction are determined using a formula based on statistical
and demographic data. The purpose of these funds is to address HUD's goals of providing decent
housing, a suitable living environment, and to expand economic opportunities principally for
low/moderate-income persons.
As a recipient of these HUD funds, the City is required to prepare a Consolidated Plan (ConPlan)
describing the housing and community development needs of the City's low and moderate income
residents and outlining strategies to address those needs over a five year period. The ConPlan
provides the necessary policy guidance for implementation of programs and services to be funded by
the HUD grants in addressing the identified needs. Those programs and services to be funded each
year of the five year ConPlan are detailed in the City’s Annual Action Plan, submitted to HUD as its
formal application for funding. The City is currently planning for the fourth year of its 2015-2019
ConPlan.
Housing staff has prepared the Action Plan for the 2018/2019 program year and is attached hereto as
Attachment No. 1.
On March 23, 2018, the Congress passed the FY 2018 Omnibus Spending package, which includedCity of Chula Vista Printed on 5/10/2018Page 2 of 6
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File#:18-0153, Item#: 9.
On March 23, 2018, the Congress passed the FY 2018 Omnibus Spending package, which included
a 10 percent increase in spending for the Department of Housing and Urban Development program.
This increase will result in a 15% increase in Community Development Block Grant (CDBG), a 49%
in the Home Investment Partnerships Act Grant (HOME) and a 4% in the Emergency Solution Grant
(ESG).
In addition to the entitlement amounts, the City will be carrying forward an unencumbered balance of
$85,730 from CDBG and $484,189 from HOME (refer to table below for a summary of the total
available funds for the 2018/19 program year).
In developing its 2018/2019 Annual Plan, the City released a Notice of Funding Availability (NOFA)
for the available HUD grant funds in January 2018. A total of twenty-four (24) applications were
received and reviewed for eligibility and funding consideration. The City Council held a public hearing
on March 13, 2018 to review those submitted activities to be included for funding as part of the
Annual Plan.
The Action Plan includes activities grouped into five distinct categories: I) CDBG Planning and
Administration; II) CDBG Public Services; III) CDBG Capital Improvement and Community
Development Projects; IV) ESG Projects; and, V) HOME Projects. The following are 2018/2019
proposed activities and recommended funding levels utilizing all funding resources available.
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File#:18-0153, Item#: 9.
HOME funds are recommended to be partially allocated to the Anita Street affordable housing
development and partially allocated to a Community Housing Development Organization (CHDO)
development.
On October 10, 2017, the City Council approved a $3,300,000 loan to Wakeland Housing and
Development Corporation (Wakeland) for the acquisition of two parcels (750 and 754-760 Anita) and
to provide funding for predevelopment costs incurred for the construction of 46 new affordable rental
housing units.
The developer has the opportunity to now purchase a third parcel (748 Anita) located in the middle of
the two acquired parcels. In order to assemble the necessary financing for the construction of the
project, Wakeland has requested additional funding from the City of Chula Vista. Additional
investment in the project and acquisition of the third parcel will not only increase the number of new
affordable rental units by 27 (increasing the total unit count to 73); but, will promote development
continuity and revitalization along Anita Street.
Lastly, a minimum of 15 percent of HOME funds are required to be set aside for specific activities to
be undertaken by a special type of nonprofit called a CHDO. A CHDO is a private nonprofit,
community-based organization that has staff with the capacity to develop affordable housing for the
community it serves. In order to qualify for designation as a CHDO, the organization must meet
certain requirements pertaining to their legal status, organizational structure, and capacity and
experience. Until now, the City has been unsuccessful in identifying eligible local CHDOs to partner
with. Currently there is three years’ worth of CHDO funds available (refer to table below).
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A portion of the CHDO funds ($89,137) will be allocated to Wakeland for the Anita Street Affordable
Housing Project, as they have now been certified as an eligible CHDO. The remaining available
CHDO funds ($192,343) will be released as part of a Notice of Funding Availability during the
2018/19 program year. Any CHDO funds not committed and allocated within a timely fashion is
subject to de-obligation by HUD and no longer available to the City for allocation.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property holdings
within 500 feet of the boundaries of the capital and park improvement projects. Staff is not
independently aware, and has not been informed by any City Council member, of any other fact that
may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City's Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The activities funded
through the federal grant programs are directed towards the revitalization of neighborhoods,
economic development opportunities, and improved facilities and services. The nature of these
activities is consistent with the Goals, Strategies and Initiatives in Goal 5: Connected Community.
STRATEGY 5. 1: Encourage Residents to Engage in Civic Activities
INITIATIVE 5.1.2: Fosters an Environment of Community Involvement
The City has developed a detailed Citizen Participation Plan (CPP) which
requires the participation of the community. The CPP requires the City to provide
citizens with reasonable and timely access to meetings, information, and records
related to the grantee's proposed and actual use of funds. A minimum of two
public hearings are held annually to obtain citizen participation at all stages of
the Five-Year Consolidated Plan and Action Plan. This includes the identification
of priorities, review of proposed activities, and review of program performance.
STRATEGY 5.2: Provide Opportunities that Enrich the Community's Quality of Life
INITIATIVE 5.2.1: Provide Services and Programs Responsive to Priorities
Consistent with the funding priorities established in the 2015-2019 Consolidated
Plan, the CDBG, HOME and ESG activities selected are aimed at providing
affordable housing opportunities and a suitable living environment with adequate
public facilities, infrastructure and services. Services that support the elderly,
disabled, homeless, and youth all contribute to community's quality of life.
CURRENT YEAR FISCAL IMPACT
Staff recommends the following appropriations be made as part of the 2018/19 City Manager’s
Budget to fund the Annual Action Plan activities previously described and more specifically defined
below:
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File#:18-0153, Item#: 9.
The activities funded through the Community Development Block Grant, Home Investment
Partnerships and Emergency Solutions Grant are fully reimbursable from the Department of Housing
and Urban Development. This results in no fiscal impact to the General Fund. In the remote event
that HUD should withdraw these grant funds, the Subrecipient Agreements provide that the City is not
obligated to compensate the sub-recipients for program expenditures.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact to the City's General Fund as all costs associated with the
administration of the CDBG, HOME and ESG programs are covered by the respective grants.
ATTACHMENTS
1. 2018/19 Annual Action Plan
2. Sample HUD Funding Agreement
3. Sample CDBG Subrecipient Agreement
4. Sample CDBG Interdepartmental MOU
5. Sample ESG Subrecipient Agreement
6. Sample HOME CHDO Agreement
Staff Contact:Angélica Davis, Senior Management Analyst
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2018/19
Annual Action Plan
for the
U.S. Department of Housing and
Urban Development
Grant Programs
CDBG | HOME | ESG
Prepared by:
Angélica Davis, Sr. Management Analyst
adavis@chulavistaca.gov
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Executive Summary
AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b)
1. Introduction
The City Chula Vista 2015-2019 Consolidated Plan outlines the community's strategies for meeting its
identified housing and community development needs, developed through a citizen participation process
as detailed in the 2015-2019 Citizen Participation Plan (Exhibit “E”). The five-year Consolidated Plan
includes a needs assessment, market analysis, and identification of priority needs and long-term
strategies. An Annual Action Plan implements the strategies and provides a basis for allocating
Community Development Block Grant (CDBG), Home Investment Partnerships Act (HOME), and
Emergency Solutions Grant (ESG) resources. This document represents the City of Chula Vista’s program
year 2018-19 CDBG Action Plan. It identifies the goals and programming of funds for activities to be
undertaken in the first year of the five-year Consolidated Plan.
2. Summarize the objectives and outcomes identified in the Plan
This could be a restatement of items or a table listed elsewhere in the plan or a reference to
another location. It may also contain any essential items from the housing and homeless needs
assessment, the housing market analysis or the strategic plan.
During the formulation of the Consolidated Plan, the City of Chula Vista conducted a needs assessment
and market analysis to inform the process on the community's needs. Community input obtained through
public hearings, public meetings and consultation with local stakeholders helped establish Chula Vista’s
priority needs and develop long-term goals and strategies. Through the process, an overall focus for
CDBG activities will be assistance to the most vulnerable population, households with incomes below
50% of median income and persons with disabilities.
3. Evaluation of past performance
This is an evaluation of past performance that helped lead the grantee to choose its goals or
projects.
Each program year of the Consolidated Plan period, the City must submit to HUD, a Consolidated Annual
Performance and Review Report (CAPER) with detailed information on progress towards the priorities,
goals and objectives outlined in the Consolidated Plan. HUD conducts an annual program assessment
and provides feedback on the City’s use of CDBG, HOME and ESG funds.
Annual Action Plan
2018
1
OMB Control No: 2506-0117 (exp. 06/30/2018)
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For Program Years 2014, 2015 and 2016 HUD has determined that the overall performance of the City’s
CDBG program was satisfactory. HUD stated, “the City has addressed the strategic program goals and
objectives which give context and meaning to annual and cumulative accomplishments. All major
program requirements are in compliance with regulatory requirements. “
The City has consistently complied with the CDBG regulation regarding timeliness. 24 CFR 570.902 (a)
states, a grantee may not have more than 1.5 times the entitlement grant amount for the current year
remaining undisbursed from the U.S. Treasury 60 days prior to the end of the grantee’s current program
year.
4. Summary of Citizen Participation Process and consultation process
Summary from citizen participation section of plan.
During the consolidated planning process, the City implemented a process for obtaining input from
citizens through public hearings, public meetings, and an on-line survey to identify the needs and long-
term goals and strategies for use of the federal funds. In drafting the 2018/19 Annual Action Plan,
contact was made with representatives of local social service agencies which serve LMI clients to see
what types of activities they considered a priority for the community they served. In addition, an
advertisement was placed in the local newspaper of general circulation which solicited proposals for
2018/19 CDBG, HOME and ESG projects. Once activities were selected for programming, another
advertisement was published to announce the public hearing date and solicited comments during the 30-
day public comment period on the proposed projects to be funded. A public hearing was held before the
Chula Vista City Council at its regularly televised meeting on March 13, 2018.
5. Summary of public comments
This could be a brief narrative summary or reference an attached document from the Citizen
Participation section of the Con Plan.
The City did not receive any comments during the two City Council Public Hearings or during the 30-day
public review comment period. In the event that comments would have been received, they would have
been incorporated into the Plan.
6. Summary of comments or views not accepted and the reasons for not accepting them
Not applicable as no comments or view were rejected.
7. Summary
As discussed above, the City maximizes on the amount of public input in can receive. This can be in the
form of social media, public hearings, public notices and community meetings/events.
Annual Action Plan
2018
2
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PR-05 Lead & Responsible Agencies – 91.200(b)
1. Agency/entity responsible for preparing/administering the Consolidated Plan
Describe the agency/entity responsible for preparing the Consolidated Plan and those responsible for administration of each grant
program and funding source.
Agency Role Name Department/Agency
CDBG Administrator Angelica Davis, Sr. Management Analyst Development Services Department - Housing Division
HOME Administrator Jose Dorado, Sr. Management Analyst Development Services Department - Housing Division
ESG Administrator Jose Dorado, Sr. Management Analyst Development Services Department - Housing Division
Table 1 – Responsible Agencies
Narrative (optional)
Under the direction of the Development Services Department Director, the grant administrators oversee the three federal grant entitlement
programs (CDBG, HOME and ESG). Oversight and management include preparation of the required planning documents, regulatory compliance,
contract oversight of the partnering agencies, environmental reviews and fiscal management.
Consolidated Plan Public Contact Information
Information on the Consolidated Plan and Annual Action may be obtained through contacting either of the federal grant
administrators. Angelica Davis, Senior Management Analyst: (619) 691-5035; adavis@chulavistaca.gov and/or Jose Dorado, Senior
Management Analyst: (619) 476-5375; jdorado@chulavistaca.gov.
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AP-10 Consultation – 91.100, 91.200(b), 91.215(l)
1. Introduction
Provide a concise summary of the jurisdiction’s activities to enhance coordination between
public and assisted housing providers and private and governmental health, mental health
and service agencies (91.215(l))
Describe coordination with the Continuum of Care and efforts to address the needs of
homeless persons (particularly chronically homeless individuals and families, families with
children, veterans, and unaccompanied youth) and persons at risk of homelessness.
Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in
determining how to allocate ESG funds, develop performance standards for and evaluate
outcomes of projects and activities assisted by ESG funds, and develop funding, policies and
procedures for the operation and administration of HMIS
2. Describe Agencies, groups, organizations and others who participated in the process
and describe the jurisdiction’s consultations with housing, social service agencies and other
entities
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AP-12 Participation – 91.105, 91.200(c)
1. Summary of citizen participation process/Efforts made to broaden citizen participation
Summarize citizen participation process and how it impacted goal-setting
The City acknowledges the value of public participation in the management of the federal grant funds it receives. For this reason, the City utilizes
all available methods to reach as many residents, community memebers, stakesholders and partners. This includes utilizing social media outlets,
local newspapers, televised City Council Public Hearings/Meetings. This ensures that each year, the City is allocating funds to activities meeting
the needs of the community.
Citizen Participation Outreach
Sort Order Mode of Outreach Target of Outreach Summary of
response/attendance
Summary of
comments received
Summary of comments
not accepted
and reasons
URL (If
applicable)
1 Public Hearing
Non-
targeted/broad
community
Public Hearing held
to present the
2017/18
Consolidated Annual
Performance
Evaluation Report
and to solicit public
input on the
2018/2019 program
year needs.
No comments
received. Not applicable.
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Sort Order Mode of Outreach Target of Outreach Summary of
response/attendance
Summary of
comments received
Summary of comments
not accepted
and reasons
URL (If
applicable)
2 Newspaper Ad
Non-
targeted/broad
community
No response
received.
No comments
received. Not applicable.
3 Public Hearing
Non-
targeted/broad
community
Public Hearing held
to present the
proposed 2018/2019
Action Plan Spending
Plan.
No comments
received. Not applicable.
4 Newspaper Ad
Non-
targeted/broad
community
No response
received.
No comments
received. Not applicable.
Table 2 – Citizen Participation Outreach
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Expected Resources
AP-15 Expected Resources – 91.220(c)(1,2)
Introduction
The City is anticipating receiveing a total of $3,416,521 in combined funds from the Community Development Block Grant, the Home Investment
Partnerships Act Grant and the Emergency Solutions Grant. Additionally, prior year resources from CDBG and HOME will be utilized.
Anticipated Resources
Program Source of
Funds
Uses of Funds Expected Amount Available Year 1 Expected
Amount
Available
Remainder
of ConPlan
$
Narrative Description
Annual
Allocation:
$
Program
Income: $
Prior Year
Resources:
$
Total:
$
CDBG public -
federal
Acquisition
Admin and Planning
Economic Development
Housing
Public Improvements
Public Services 2,289,135 0 85,730 2,374,865 0
Funding includes prior year
unencumbered CDBG funds.
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Program Source of
Funds
Uses of Funds Expected Amount Available Year 1 Expected
Amount
Available
Remainder
of ConPlan
$
Narrative Description
Annual
Allocation:
$
Program
Income: $
Prior Year
Resources:
$
Total:
$
HOME public -
federal
Acquisition
Homebuyer assistance
Homeowner rehab
Multifamily rental new
construction
Multifamily rental rehab
New construction for
ownership
TBRA 947,625 0 484,189 1,431,814 0
Funding includes prior year
unencumbered funds.
ESG public -
federal
Conversion and rehab
for transitional housing
Financial Assistance
Overnight shelter
Rapid re-housing (rental
assistance)
Rental Assistance
Services
Transitional housing 179,761 0 0 179,761 0
Table 3 - Expected Resources – Priority Table
Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how
matching requirements will be satisfied
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If appropriate, describe publically owned land or property located within the jurisdiction that
may be used to address the needs identified in the plan
In 2013, the U.S. Department of Housing and Urban Development updated the HOME Investment
Partnerships Program (HOME) regulations. This may severely impact the ability to complete certain
types of affordable housing development projects within the City of Chula Vista. The new funding
regulations state that before the City can commit its HOME funds, the project Sponsor or Developer
must obtain funding commitments from all of the other funding sources before the City is allow to count
those funding commitments in meet HUD’s timeliness deadline.
The City of Chula Vista will continue to work with Sponsors and Developers to ensure that the City’s
ability to provide funding to support the development of affordable rental housing is not impacted by
this new rule. The new rule does not affect the City’s ability to fund smaller projects that do not rely on
substantial private and State funding sources such as Low Income Housing Tax Credits and Tax Exempt
Bond financing projects. The new rule also does not impact the City’s ability to fund a Tenant Based
Rental Assistance Program.
The City of Chula Vista has successfully leveraged funds from federal, state, local and private resources
to complete several Capital Improvement Projects (CIP) and affordable housing developments in the
City’s low income communities. The most recent CIP project with leveraged funds is the Palomar and
Orange infrastructure project. The most recently completed affordable housing development project
which included leveraged funds was Duetta and Volta. This development also used a 4% LIHTC along
with private financing to construct the family and senior units.
Discussion
Reference above section for discussion.
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Annual Goals and Objectives
AP-20 Annual Goals and Objectives
Goals Summary Information
Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
1 Provide
Community and
Supportive
Services
2015 2016 Homeless
Non-Homeless
Special Needs
Non-Housing
Community
Development
City Wide
(Low/Mod
Census Tracts)
Community
Development
Priorities
CDBG:
$689,789
ESG: $0
Public service activities other than
Low/Moderate Income Housing
Benefit: 2215 Persons Assisted
Other: 1 Other
2 Provide
Community
Facilities and
Infrastructure
2015 2016 Non-Housing
Community
Development
City Wide
(Low/Mod
Census Tracts)
Community
Development
Priorities
CDBG:
$1,575,800
HOME: $0
ESG: $0
Public Facility or Infrastructure
Activities other than Low/Moderate
Income Housing Benefit: 7680
Persons Assisted
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Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
3 Provide decent,
affordable
housing.
2015 2016 Affordable
Housing
City Wide
(Low/Mod
Census Tracts)
Housing Priority CDBG:
$109,276
HOME:
$1,431,814
ESG:
$179,761
Rental units constructed: 46
Household Housing Unit
Rental units rehabilitated: 10
Household Housing Unit
Direct Financial Assistance to
Homebuyers: 1 Households Assisted
Tenant-based rental assistance /
Rapid Rehousing: 15 Households
Assisted
Homeless Person Overnight Shelter:
60 Persons Assisted
Overnight/Emergency
Shelter/Transitional Housing Beds
added: 90 Beds
Other: 1 Other
Table 4 – Goals Summary
Goal Descriptions
1 Goal Name Provide Community and Supportive Services
Goal
Description
Provide essential services to the most vulnerable of the population including the elderly, disabled, youth, victims of domestic
violence, homeless and low income.
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2 Goal Name Provide Community Facilities and Infrastructure
Goal
Description
Under this goal, the City plans to address the need for infrastructure improvements in the northwest area of the City. There
are a number of streets that lack in the basic infrastructure such as streets, sidewalks and ADA curb cuts. In addition, there
are a number of parks and public facilities which need improvements.
3 Goal Name Provide decent, affordable housing.
Goal
Description
The City established the goal of providing decent, affordable housing to those most vulnerable of the community. The City
has created housing opportunities through new constsruction projects and rental assistance programs to minimize the
growing affordable housing need. In addition, rehabilitation loans/grants are available to those homeowners in need of
health and safety repairs as well as energy efficiency improvements.
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Projects
AP-35 Projects – 91.220(d)
Introduction
For FY 2018/19, the City will receive $1,996,844 in CDBG entitlement funds. Additionally, $435,409 of unencumbered prior year funds will be
utilized during the program year. The City will also receive $636,695 in HOME funds and $172,909 in Emergency Solutions Grant funds. The City
has categorized the proposed activities into five distinct categories. The HOME program requires that a minimum of 15 percent of the HOME
entitlement be set aside for specific activities to be undertaken by a special type of nonprofit called a Community Housing Development
Organization (CHDO). To meet the requirement, the City issued a Notice of Funding Availability for certified CHDOs in the region. Several
qualified CHDOs have expressed interested in partnering with the City to develop new affordable rental units.
Projects
# Project Name
1 CDBG Planning and Administration Activities
2 CDBG Public Services
3 CDBG Capital Improvement and Community Development
4 HOME Projects
5 ESG Projects
Table 5 - Project Information
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Describe the reasons for allocation priorities and any obstacles to addressing underserved needs
The City has a detailed list of approved Capital Improvement Projects that demonstrate a general public need but, due to the loss of
redevelopment, funding is scarce. Federal funds are used to serve the target community, meet the established goals for these funds, and to serve
the greatest number of members of the community. The City will use its existing HOME Investment Partnership funds to provide First Time
Homebuyer assistance, Acquisition and Rehabilitation of existing housing stock for affordable housing, preservation of affordable housing, and
new construction of affordable housing.
For public services, the City utilizes CDBG funds. CDBG regulations, limit the amount the City can spend on public services and is capped at 15% of
the City’s annual entitlement . The City provides funding to non-profit organizations that demonstrate an ability to provide needed services that
directly benefit the residents of the Chula Vista. The use of the City of Chula Vista CDBG funds for public services enables non-profit organization
and City Departments to leverage these funds with other funding sources for projects and activities that serve the greatest number of residents
with the limited amount of funding.
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AP-38 Project Summary
Project Summary Information
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1 Project Name CDBG Planning and Administration Activities
Target Area City Wide (Low/Mod Census Tracts)
Goals Supported Provide decent, affordable housing.
Provide Community and Supportive Services
Provide Community Facilities and Infrastructure
Needs Addressed Housing Priority
Community Development Priorities
Funding CDBG: $457,827
Description Activities under this project include planning and administration
activities as well as fair housing.
Target Date 6/30/2019
Estimate the number and
type of families that will
benefit from the proposed
activities
Not applicable. Funding under this category will be for administration
activities.
Location Description Not applicable.
Planned Activities 1092: CDBG Administration and Planning
1093: Fair Housing Services
2 Project Name CDBG Public Services
Target Area City Wide (Low/Mod Census Tracts)
Goals Supported Provide Community and Supportive Services
Needs Addressed Community Development Priorities
Funding CDBG: $292,962
Description Activities funded this category include all public services offered to
low/moderate income persons. This includes those with special
needs, homeless, elderly, and youth.
Target Date 6/30/2019
Estimate the number and
type of families that will
benefit from the proposed
activities
It is estimated that approximately 2,275 low/moderate income
families will benefit from the proposed activities (listed below),
including homeless families.
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Location Description Of the activities to be undertaken in 2018/2019, the following two are
site specific:
• 1099: South Bay Food Program (707 F Street; 430 F Street)
• 1102: Family Resource Center Emergency and Basic Services
(540 G Street; 348 L Street; 1450 Loma Lane, 1653 Albany
Avenue; 480 Palomar Street)
Planned Activities • 1094: Short-term Housing Voucher Program: $50,000
• 1095: Interfaith Shelter Network - Rotational Shelter
Network: $11,000
• 1096: SBCS - Homeless Services: $39,550
• 1097: San Diego Food Bank - Food-4-Kids Backpack Program:
$15,000
• 1098: Meals-on-Wheels - Senior Care Program: $12,000
• 1099: South Bay Food Program: $10,000
• 1100: Family Violence Treatment Program: $39,312
• 1101: Therapeutic Program: $20,100
• 1102: Family Resource Center Emergency and Basic Services:
$39,312
• 1103: KidCare Express Mobile Medical Unit: $27,000
• 1104: Norman Park Senior Services: $30,000
3 Project Name CDBG Capital Improvement and Community Development
Target Area City Wide (Low/Mod Census Tracts)
Goals Supported Provide Community Facilities and Infrastructure
Needs Addressed Community Development Priorities
Funding CDBG: $1,624,076
Description Activities under this project will be capital improvement projects and
other community development-related projects.
Target Date 6/30/2019
Estimate the number and
type of families that will
benefit from the proposed
activities
It is estimated that approximately 7,680 persons will benefit from the
infrastructure and park improvements to be completed.
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Location Description The improvements will be completed in census tracts 12402, 13205,
12302.
Planned Activities • 1105: Section 108 Loan Payment: $764,000
• 1111: Anita Street Sidewalk Improvement Project: $300,000
• 1112: D Street Sidewalk Improvement Project: $426,800
• 1113: Norman Park Improvement Project: $85,000
4 Project Name HOME Projects
Target Area City Wide (Low/Mod Census Tracts)
Goals Supported Provide decent, affordable housing.
Needs Addressed Housing Priority
Funding HOME: $1,431,814
Description
Target Date 6/30/2020
Estimate the number and
type of families that will
benefit from the proposed
activities
Approximately 200 low/moderate income households will benefit
from the proposed affordable housing projects.
Location Description Construction of new units will be completed in Anita Street, the
southwest area of the City.
Planned Activities The City will utlize the majority of the HOME funds on the
construction of 46 affordable rental units. The remaining funds will
be used to release a Notice of Funding Availability specifically for
certified local CHDOs.
5 Project Name ESG Projects
Target Area City Wide (Low/Mod Census Tracts)
Goals Supported Provide Community and Supportive Services
Needs Addressed Housing Priority
Community Development Priorities
Funding ESG: $179,761
Description Activities under this project will be ESG-funded and directed towards
homeless services such as transitional housing services, rapid re-
housing, and HMIS.
Target Date 6/30/2019
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Estimate the number and
type of families that will
benefit from the proposed
activities
Approximately 95 homeless and at-risk of homelessness families will
benefit from the proposed activities.
Location Description Not applicable.
Planned Activities • 1106: ESG Administration and Planning
• 1107: Homeless Management Information Systems
• 1108: Casa Nueva Vida Transitional Shelter
• 1109: Rapid ReHousing
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AP-50 Geographic Distribution – 91.220(f)
Description of the geographic areas of the entitlement (including areas of low-income and
minority concentration) where assistance will be directed
The infrastructure and park improvement projects are located in low/moderate income census tracts in
the northwest area of the city. Combined, the three census tracts where the improvements will be
completed, consist of approximately 64% low/moderate income.
Geographic Distribution
Target Area Percentage of Funds
City Wide (Low/Mod Census Tracts) 65
Table 6 - Geographic Distribution
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Rationale for the priorities for allocating investments geographically
The projects located in specific geographical areas consist of the park and capital improvement
projects. The rationale for priority given to these projects and the specific area is due to the high number
of low/moderate income persons and the lack of basic infrastructure such as sidewalks.
Discussion
Investments in parks, capital improvement projects, and services serving special needs populations and
low/moderate income persons can be made throughout the City so long as the activity meets a HUD
National objective and there is demonstrated significant benefit to low and moderate income
persons. The general basis used for prioritizing investments includes the total number of residents
benefited, the urgent need of a given community within the City, environment issues that threaten life or
property, the need for improved access, and other important needs of the community as a whole.
For public services, the City utilizes 15 percent of its Community Development Block Grant (CDBG)
allocation to provide small grants to non-profit organizations that demonstrate an ability to provide
needed services that directly benefit the low and moderate income residents of the City of Chula
Vista. By directing public service funds as grants to these non-profits, the City is able to leverage its
CDBG funds for projects and activities that serve the greatest number of residents with this limited
amount of funding.
Housing assistance will be available to income-qualified households. Due to aging housing stock in
Northwest and Southwest Chula Vista, priority will be given to those households who wish to participate
in owner occupied residential rehabilitation programs to maintain safe housing and for revitalization of
neighborhoods. New construction of affordable housing will likely occur in East Chula Vista with its
available undeveloped land and to provide for a more diverse and varied housing stock in the area.
CDBG funds may also be used to address HUD’s Decent Housing objective (servicing clients who earn less
than 80% of the Area Median Income) by providing rehabilitation loans or grants to assist owner
occupants of single family homes or mobile homes that are built prior to 1980 that are primarily in
Western Chula Vista.
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Affordable Housing
AP-55 Affordable Housing – 91.220(g)
Introduction
The loss of the Chula Vista Redevelopment Agency has significantly impaired the production of
affordable housing in the City of Chula Vista. For FY 2018-2019, the City of Chula Vista’s Successor
Housing Agency (CV-SHA) plans to contribute funding available towards the Production of Affordable
Housing. For rehabilitation of existing housing units, the City expects to fund ten residential
rehabilitation loans to low-and moderate-income homeowners with CDBG funds. In addition, the city
plans to acquire and rehabilitate one unit for the purpose of providing rental opportunties to very low
income households. The City will also utilize prior year funds generated from Inclusionary Housing
obligations to to assist First-time homebuyers.
The tables below indicate the number and type of Households (Table 6) to be supported by affordable
housing projects and/or programs (Table 7) implemented by the City during 2018/19.
One Year Goals for the Number of Households to be Supported
Homeless 155
Non-Homeless 15
Special-Needs 0
Total 170
Table 7 - One Year Goals for Affordable Housing by Support Requirement
One Year Goals for the Number of Households Supported Through
Rental Assistance 155
The Production of New Units 5
Rehab of Existing Units 15
Acquisition of Existing Units 0
Total 175
Table 8 - One Year Goals for Affordable Housing by Support Type
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Discussion
The City's affordable housing goals for 2018/19 are:
• The release a Notice of Funding Availability for use of HOME funds and Succesor Housing Agency
Funds for the creation of new affordable rental units.
• Provide homeowner rehabilitation loans (Existing CDBG funds). For mobile-homes the forgivable
loan may not exceed $8,500 and for single family homes the assistance may not exceed $24,999;
• Assist low/moderate income households with assistance of up to $70,000 for the purchase of
their first home utilizing state funds.
• Provide shelter for homeless clients (ESG & CDBG funds);
• Provide case management and rental assistance funds to homeless persons or at risk of
becoming homeless;
• Assist at risk populations, including displaced households, with up to 12-months tenant based
rental assistance.
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AP-60 Public Housing – 91.220(h)
Introduction
The City of Chula Vista does not operate a public housing agency. The Housing Authority of the County of
San Diego (HACSD) serves as the City’s public housing agency for the four Public Housing projects located
in the City of Chula Vista. Please refer to the County of San Diego’s 2015-2019 Consolidated Plan and
2018-2019 Annual Action Plan and 2018 Public Housing Plan that describes the planned actions during
the next year to address the needs of public housing residents, to encourage participation, and to
increase homeownership. Please visit www.sandiegocounty.gov/sdhcd for more information.
Actions planned during the next year to address the needs to public housing
Refer to introduction above.
Actions to encourage public housing residents to become more involved in management and
participate in homeownership
Refer to introduction above.
If the PHA is designated as troubled, describe the manner in which financial assistance will be
provided or other assistance
Not applicable, agency is not a PHA.
Discussion
Refer to section above.
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AP-65 Homeless and Other Special Needs Activities – 91.220(i)
Introduction
The City of Chula Vista participates in the regional approach to end chronic homelessness and homeless
prevention efforts. This is accomplished through membership of the Regional Continuum of Care Council
(CoC). This organization includes representation from the County of San Diego, the City of Chula Vista,
the Chula Vista Elementary School District and various social service agencies. The CoC’s continues to
implement the Strategic Planning Objectives, which serve as the Homeless Strategic Plan for the region.
A copy of the Strategic Planning Objectives can be found at the RCCCs website at
http://www.sandiegococ.org/.
Describe the jurisdictions one-year goals and actions for reducing and ending homelessness
including
Reaching out to homeless persons (especially unsheltered persons) and assessing their
individual needs
The City will utilize Emergency Solutions Grant funds in accordance with guidelines established by the
RCCC Steering Committee:
• Leverage existing resources to achieve the program’s match and case management
requirements;
• Coordinate across regional entitlement jurisdictions by utilizing standardized eligibility and
assessment tools;
• Support federal and local goals for priority populations, including but not limited to veterans,
families and other special needs populations;
• Allow for variations in the program design that responds to the needs and resources of the
jurisdiction;
• Comply with new eligibility and verification requirements (HMIS, housing status, habitability
standards, homeless definitions, etc.); and
• Allow each program to take responsibility for arranging intake, assessment, case management,
reporting, and meeting public notice requirements.
Addressing the emergency shelter and transitional housing needs of homeless persons
The City will continue to assist homeless service providers proposing to construct transitional housing or
homeless shelters in Chula Vista and find appropriate sites for development. Developers are encouraged
to review the 2013-2020 Housing Element, which includes potential sites or zones for development or to
schedule a consultation meeting with Planning and Housing staff.
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The City will also continue to participate in sub-regional efforts to provide these facilities and may assist
in the development of these types of projects using the following funding sources:
• City’s affordable housing in-lieu fund.
• Community Development Block Grant
• Home Investment Partnership Act funds (note these funds cannot be used to build emergency
shelters)
• Low Moderate Income Housing fund
Helping homeless persons (especially chronically homeless individuals and families, families
with children, veterans and their families, and unaccompanied youth) make the transition to
permanent housing and independent living, including shortening the period of time that
individuals and families experience homelessness, facilitating access for homeless individuals
and families to affordable housing units, and preventing individuals and families who were
recently homeless from becoming homeless again
Funding for on-going operational costs may be include the following funding sources:
• Emergency Solutions Grant (note: cannot be used for transitional housing)
• Community Development Block Grant (note: public service funds are limited)
• Supportive Housing Program
• State Funding
• Charitable foundations
• Fund raising
Helping low-income individuals and families avoid becoming homeless, especially extremely
low-income individuals and families and those who are: being discharged from publicly
funded institutions and systems of care (such as health care facilities, mental health facilities,
foster care and other youth facilities, and corrections programs and institutions); or, receiving
assistance from public or private agencies that address housing, health, social services,
employment, education, or youth needs.
Other Objectives to address these needs includes funding Public Services up to the maximum cap of 15
percent of the annual CDBG entitlement as an available funding source:
The following inventory lists some of the homeless resources located in the South Bay area of the
region.
• Emergency Solutions Grant Program: HUD-funded Emergency Solutions Grant Program
provides funding for shelter outreach, emergency shelter, HMIS services, and Homeless
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Prevention and Rapid Re-Housing.
• South Bay Food Program: This program provides meals to homeless families and low income
individuals.
• Interfaith Shelter Network: Provide rotational winter night time shelter at nine congregations in
the South Bay for approximately 18 weeks. Services include meals, overnight supervision,
showers, and case management.
• Regional Task Force on the Homeless – Regional Task Force on the Homeless: The RTFH
provides information and referral services to homeless service agencies, individuals and local
government jurisdictions and publishes for the public homeless information reports that address
homeless services, the homeless population profile and homeless funding. The RTFH also
operates a HUD mandated Homeless Management Information System that allows service
agencies to track homeless client information through a central database and conducts the
homeless count needed to pursue HUD’s Supportive Housing Program funding for the region.
• South Bay Homeless Services: The Homeless Services Program will build upon the housing and
supportive services available for those individuals and families experiencing homelessness
within the City. It will include assessment utilizing the VI-SPDAT, entry into the Coordinate
Assessment and Housing Placement System, screening for SBCS (and partner) housing
availability, and connection to resources and supportive services which may include: emergency
food and clothing, benefits screening, healthcare enrollment, employment assistance and
hotel/motel vouchers.
• Short-term Voucher Program: As the number of homeless in the region increase, the number
of shelters continue to have limited space and are often at capacity. This program offers a
temporary solution to this problem by providing hotel/motel vouchers to homeless individuals
and families. The participants must be willing to participate in case management with one of
the City's service providers during the transitional phase into permanent, stable housing.
Discussion
The City will utilize Emergency Solutions Grant funds in accordance with guidelines established by the
RCCC Steering Committee:
• Leverage existing resources to achieve the program’s match and case management
requirements;
• Coordinate across regional entitlement jurisdictions by utilizing standardized eligibility and
assessment tools;
• Support federal and local goals for priority populations, including but not limited to veterans,
families and other special needs populations;
• Allow for variations in the program design that responds to the needs and resources of the
jurisdiction;
• Comply with new eligibility and verification requirements (HMIS, housing status, habitability
standards, homeless definitions, etc.); and
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• Allow each program to take responsibility for arranging intake, assessment, case management,
reporting, and meeting public notice requirements.
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AP-75 Barriers to affordable housing – 91.220(j)
Introduction:
The City will utilize Emergency Solutions Grant funds in accordance with guidelines established by the
RCCC Steering Committee:
• Leverage existing resources to achieve the program’s match and case management
requirements;
• Coordinate across regional entitlement jurisdictions by utilizing standardized eligibility and
assessment tools;
• Support federal and local goals for priority populations, including but not limited to veterans,
families and other special needs populations;
• Allow for variations in the program design that responds to the needs and resources of the
jurisdiction;
• Comply with new eligibility and verification requirements (HMIS, housing status, habitability
standards, homeless definitions, etc.); and
• Allow each program to take responsibility for arranging intake, assessment, case management,
reporting, and meeting public notice requirements.
Actions it planned to remove or ameliorate the negative effects of public policies that serve
as barriers to affordable housing such as land use controls, tax policies affecting land, zoning
ordinances, building codes, fees and charges, growth limitations, and policies affecting the
return on residential investment
For FY 2018-19, the City plans to set-aside approximaetly $XXX for the production of affordable housing
activities including new rental housing and programs. In the past, the City has used HOME funds for the
production of affordable housing, first time homebuyer program and tenant based rental
assistance. The City will support developers for the creation of affordable rental housing, and residents
who seek funding opportunities to become first time homebuyers. The following measures may be
taken to alleviate the barriers to affordable housing:
• Apply for State and federal funding to gap finance affordable housing production and
rehabilitation of existing affordable housing stock.
• Continue to support applications for Tax Exempt Bond financing from the California Debt Limit
Allocation Committee.
• Continue to support applications for Low-Income Housing Tax Credits from the California Tax
Credit Allocation Committee.
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• Continue to streamline the environmental review process for housing developments, using
available state categorical exemptions and federal categorical exclusions, when
applicable. Also, send staff to CEQA and NEPA trainings as needed to gain expertise in the
preparation of environmental review documents.
• Continue to apply for State funding to assist First Time Homebuyers.
• Continue to improve the permit processing and planning approval processes to minimize delay in
housing development in general and affordable housing development in particular.
• Continue providing rehabilitation assistance and homeownership assistance, and to assist in the
construction and preservation of affordable housing.
• Encourage public participation when a proposed project is being considered for approval.
Implement policies and strategies identified in the 2013-2020 Housing Element.
Discussion:
No further discussion necessary.
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AP-85 Other Actions – 91.220(k)
Introduction:
This section describes the action the City plans to address the following:
• Obstacles meeting underserved needs;
• Maintenance of affordable housing;
• Lead-based paint hazards;
• Number of poverty-level families;
• Institutional structure;
• Coordination between public and private housing and social service agencies.
Actions planned to address obstacles to meeting underserved needs
Refer to explanation provided above.
Actions planned to foster and maintain affordable housing
Chula Vista has very actively addressed housing needs by increasing (with required voter approval)
participation in future affordable rental developments, approving a mobile home overlay district to
address mobile home redevelopment and loss of affordable units, passing its Affordable Housing Policy
which requires developers to contribute to the affordable housing stock, increasing allowable residential
density in the city’s general plan and by not placing strong limits on residential growth. However, local
and state sources of revenue for affordable housing and community development are inadequate to
address housing and community development needs in the city. The current economic climate is
particularly challenging. On the plus side, home prices have fallen, enabling more moderate income
renters to afford to buy homes-if they are able to get financing. The city will also benefit from new
federal funds to address many of its most acute and community development needs.
Actions planned to reduce lead-based paint hazards
The City of Chula Vista has a two-tiered approach to the evaluation and elimination of lead-Â based
paint hazards where the problem has been determined to be most prevalent. The County of San Diego’s
lead-Â based paint hazard evaluation program, known as the Childhood Lead Poisoning Prevention
Program (CLPPP), involves outreach, screening, case management, and public education.
The overall lead poisoning program is administered through the County of San Diego, Department of
Health Services (DHS). The City of Chula Vista also has in place a loan/grant program to assist
homeowners alleviate lead-based paint hazards through the Community Housing Improvement Program
(CHIP); however, the City utilizes Community Development Block Grant funds for this purpose.
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As part of the City’s HOME First-Â time Homebuy
Program, and CDBG Residential Rehabilitation Program, lead-Â based paint hazard e
remediation is incorporated into these programs as follows: Owners are provided with information
regarding: 1) Sources of LBP, 2) Hazards and Symptoms, 3) Blood Lead Level Screening, 4) Precautions, 5)
Maintenance and Treatment of LBP Hazards, 6) Tenant and Homebuyer responsibilities prior to
rehabilitation loan/grant approval, the homeowner read and sign a copy of information received. In
addition, the City’s Building and Safety Department, City of Chula Vista Housing staff or the City’s First
Time Homebuyer administrator checks for signs of LBP for properties being assisted, and abatement
should occur based on federal guidelines pertaining to the amount of assistance given.
The City will also pursue a Lead Hazard Protection grant funds that are available. The Environmental
Health Coalition is supportive of the City’s interest in obtaining grant funds.
Actions planned to reduce the number of poverty-level families
It is the City of Chula Vista’s goal is to utilize 100% of its entitlement grants to assist low/moderate
income residents break the cycle of poverty through supporting social service programs. Many of the
programs include multi-service programs to assist low income families back into the main stream. They
include help with job readiness, educational training, counseling, child care, food clothing, housing
assistance and a host of other service to help families and individuals escape the cycle of poverty.
Following is a sample of the organizations the City partnered with for the 2018/2019 program year:
• Chula Vista Community Collaborative to provide case management and referral services;
• Family Health Centers of San Diego to provide mobile medical services at various elementary
schools located in low income census tracts;
• Interfaith Shelter Network to provide rotational shelter and case management during the cold
winter months;
• Meals-on-Wheels to provide daily hot meal delivery to seniors in need;
• San Diego Food Bank which delivers weekly backpack with food to children who are at risk of
experiencing hunger through the weekend.
• South Bay Community Services (SBCS) is made up of three distinct departments and has a staff of
over 250 that serve more than 50,000 individuals and families annually in South San Diego
County.
Actions planned to develop institutional structure
Developing institutional and enhancing coordination between public and private agencies:
The City of Chula Vista is a member an organization which relies heavily on public and private
coordination in the region to address the needs of the low income community members. The Chula Vista
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Community Collaborative is collaboration among partners and stakeholders in Chula Vista which
include; Residents and Parents; Schools and School District Staff; Social Service/Non-profit Agencies;
Local Government; Faith-based Community; Health Professionals; and, Business Owners. Together, the
Collaborative works to develop coordinated strategies and systems that protect the health, safety, and
wellness of its residents as well as share information and resources that strengthen families and
communities. Regular meetings are held with the goal of obtaining and sharing information about
services, resources, employment and training opportunities, as well as any events accessible to the Chula
Vista community. The meetings are a useful venue to network and efficiently coordinate activities with
partnering agencies.
Although the City of Chula Vista administers the CDBG, ESG, and HOME programs, the City does engage
in contracts with outside agencies for the delivery of services to the public, other than the required fair
housing services and funding requests received from City Departments. Non-profits apply for public
service funds, capital improvement, and creation of affordable housing. The City monitors the
affordable housing programs for all properties in its portfolio including those owned by private parties,
under a deed restriction between the City and the respective party. The City has developed a strong
relationship with both affordable and for-profit housing developers in not only the creation of affordable
units but the ongoing maintenance of the developments as well.
Actions planned to enhance coordination between public and private housing and social
service agencies
Non-profit social service agencies continue to play an important role in serving the needs of low-and
moderate-income residents in Chula Vista, There is a 15% cap on the amount of public service funds to
be used from its CDBG Allocation.
The City surveyed social service providers who serve Chula Vista during the needs assessment process
and will continue to attend the Chula Vista Community Collaborative meetings to foster networking
among the providers.
Discussion:
No further discussion necessary.
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Program Specific Requirements
AP-90 Program Specific Requirements – 91.220(l)(1,2,4)
Introduction:
The City of Chula Vista, as an entitlement jurisdiction, receives Community Development Block Grant,
Home Investment Partnership Act, and Emergency Solutions Grant from the U.S Department of Housing
and Urban Development. Described below are the Program Specific Requirements for each of these
programs.
Community Development Block Grant Program (CDBG)
Reference 24 CFR 91.220(l)(1)
Projects planned with all CDBG funds expected to be available during the year are identified in the
Projects Table. The following identifies program income that is available for use that is included in
projects to be carried out.
1. The total amount of program income that will have been received before the start of the next
program year and that has not yet been reprogrammed 0
2. The amount of proceeds from section 108 loan guarantees that will be used during the year to
address the priority needs and specific objectives identified in the grantee's strategic plan. 0
3. The amount of surplus funds from urban renewal settlements 0
4. The amount of any grant funds returned to the line of credit for which the planned use has not
been included in a prior statement or plan 0
5. The amount of income from float-funded activities 0
Total Program Income: 0
Other CDBG Requirements
1. The amount of urgent need activities 0
2. The estimated percentage of CDBG funds that will be used for activities that benefit
persons of low and moderate income.Overall Benefit - A consecutive period of one,
two or three years may be used to determine that a minimum overall benefit of 70%
of CDBG funds is used to benefit persons of low and moderate income. Specify the
years covered that include this Annual Action Plan. 100.00%
HOME Investment Partnership Program (HOME)
Reference 24 CFR 91.220(l)(2)
1. A description of other forms of investment being used beyond those identified in Section 92.205 is
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as follows:
Other forms of investment being used by the City is the match provided for HOME-funded housing
activities. The City is required to provide a 25 percent match for HOME funds used for rental
assistance, housing rehabilitation, and acquisition and rehabilitation of housing. Some examples
include, land value (donated), on and off-site improvements, waiver of local and state taxes or fees,
low-interest loans below market, inclusionary housing obligations. Most commonly, the City's match
funds are generally generated through housing developer constributions, prior Low/Moderate
Income Set-Aside funds from the State, and individual first-time homebuyer private funds. Specific
match dollar amounts are reported to HUD in the CAPER though its submittal of the HUD forms
40107-A HOME Match Log.
In 2018/19 the City will be relasing a Notice Funding Availability to all Certified Community Housing
Developer Organizations to leverage with the available HOME funds.
2. A description of the guidelines that will be used for resale or recapture of HOME funds when used
for homebuyer activities as required in 92.254, is as follows:
The City of Chula Vista will invest its HOME funds in accordance with the forms of assistance listed in
§92.205(b)(1). The City will use its HOME funds to assist income eligible household to purchase
single-family, condominiums, townhomes in the City of Chula Vista. The assistance will be in the
form of loans and each borrower must meet the following conditions:
• Must income qualify and meet the First Time Homebuyer Program requirements, as detailed in the
First Time Homebuyer Manual
• Assistance is provided in the form of a deferred payment loan that accrues 3% simple interest;
• The loan documents include provisions to recapture the principal amount and interest upon non-
occupancy/transfer of the unit for a specified affordability period; and
• A HOME Regulatory Agreement will be recorded against the property during the affordability period.
In the event upon transfer where the market value is less than time acquisition costs to repay the City
loan in full, the City shall apply HUD’s net proceeds formula.
3. A description of the guidelines for resale or recapture that ensures the affordability of units acquired
with HOME funds? See 24 CFR 92.254(a)(4) are as follows:
Borrower shall pay principal and all accrued interest (either simple interest or default interest, as the
case may be) on the HOME Note, in one lump sum, to Lender upon the earliest of: (1) a Sale (as
defined in Section 2(b), below); (2) a default after completion of the applicable acceleration
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procedures set forth in Section 3, below; or (3) thirty (30) years from the date first written
above. Borrower shall make any payments at the City of Chula Vista Finance Department’s office
located at 276 Fourth Avenue, Chula Vista, California 91910, or such other place as designated by
Lender. Notwithstanding the foregoing, in the event of a Sale, where the net proceeds available
from the sale are less than the amount that would otherwise be due hereunder, then the Lender shall
be entitled to recapture the net proceeds available from the Sale. Net proceeds are defined as the
sales price minus repayment of all senior loans and any closing costs. “Senior loans” means loans
that are superior to the Deed of Trust. In the event of any Sale which is not a foreclosure or an
arm’s-length transaction, the “sales price” shall be determined by an appraiser holding a MAI
designation from the Appraisal Institute that has at least five (5) years of experience in the
geographic area in which the Property is located, selected by the Lender in its sole discretion.
4. Plans for using HOME funds to refinance existing debt secured by multifamily housing that is
rehabilitated with HOME funds along with a description of the refinancing guidelines required that
will be used under 24 CFR 92.206(b), are as follows:
The following are conditions under which the City may refinance existing debt secured by multifamily
housing that is being rehabilitated:
• Complete a City of Chula Vista affordable housing application and meet City funding
guidelines. Application must describe whether activity consists of maintenance of existing affordable
housing units, creation of new affordable housing units or both.
• Agree to a minimum affordable period of 55 Years
• The property has not previous received HOME funds (exception may be made for trouble projects,
with HUD approval).
• The project must be located in the City of Chula Vista.
• Subsidy amount must not exceed HUD limits.
• Subject to approval by local governing bodies
• May be subject to HUD approval.
• Rehabilitation will be the primary HUD eligible activity with an established minimum level of
rehabilitation per unit or a required ratio between rehabilitation and refinancing.
• Disinvestment in the property will not occurr as a result of activity.
• Demonstration that long-term needs of the project will be met
• HOME funds will not be used to refinance multifamily loans made or insured by any federal program,
including the CDBG program.
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Emergency Solutions Grant (ESG)
Reference 91.220(l)(4)
1. Include written standards for providing ESG assistance (may include as attachment)
Written standards attached as (Attachment XX).
2. If the Continuum of Care has established centralized or coordinated assessment system that
meets HUD requirements, describe that centralized or coordinated assessment system.
The San Diego City and County Continuum of Care (hereinafter referred to as the “CoC” )includes all
of the geography within the County of San Diego, including the City of Chula Vista. The City of Chula
Vista is required to consult with the CoC on funding priorities using ESG funds. The U.S. Department
of Housing and Urban Development (HUD) charges communities that receive funds under the
Homeless Continuum of Care Program (hereinafter referred to as “CoC Program”) of the Homeless
Emergency Assistance and Rapid Transition to Housing Act (HEARTH Act) with specific
responsibilities. Section 578.5ofthe HEARTH Interim Rule published in July2012 (Interim Rule), defines
a Continuum of Care (CoC) as “the group organized to carry out the responsibilities required under
this part and that is composed of representatives of organizations, including nonprofit homeless
providers, victim service providers, faith-based organizations, governments, businesses, advocates,
public housing agencies, school districts, social service providers, mental health agencies, hospitals,
universities, affordable housing developers, law enforcement, organizations that serve homeless and
formerly homeless veterans, and homeless and formerly homeless persons to the extent these groups
are represented within the geographic and are available to participate.” Relevant organizations in
the San Diego CoC Region established the Regional Continuum of Care Council (RCCC) in 1998, which
has served as the CoC coordinating body acknowledged by HUD. Planning and operations of the San
Diego CoC have historically been facilitated through the RCCC, an unincorporated association as
defined under Section 18035 of the California Corporations Code. As a result, the general operations
of the CoC have been guided through the By Laws, structure, and action of the RCCC. The CoC have
adopted the following Governance Charter (Article XI) that describes the oversight of ESG
Entitlements within its jurisdiction.
3. Identify the process for making sub-awards and describe how the ESG allocation available to
private nonprofit organizations (including community and faith-based organizations).
The City of Chula Vista releases a funding of Notice Availability inviting all non-profit organizations
who serve eligible ESG clients to submit a proposal. The process is included in The City’s Federal
Grants Administrative Manual (Attachment X).
4. If the jurisdiction is unable to meet the homeless participation requirement in 24 CFR
576.405(a), the jurisdiction must specify its plan for reaching out to and consulting with
homeless or formerly homeless individuals in considering policies and funding decisions
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regarding facilities and services funded under ESG.
Not applicable.
5. Describe performance standards for evaluating ESG.
The ESG entitlement areas and the RCCC have established the following cross-jurisdictional strategies
for use of the ESG funds in ways that that set performance standards for each subrecipient:
• Further the accomplishment of actions identified in the Consolidated Plan of each jurisdiction.
• Foster greater access to permanent housing, especially helping people access housing that is
affordable at 30% area median income.
• Leverage existing resources to achieve the case management requirements and to avoid duplication
of services.
• Leverage alternate funding sources to meet the funding match requirement . On a typical year,
approximately 85% of the funds utilized for Emergency Solutions Grant programs consist of non-
federal funding. This consist of local general fund, state grants and private contributions.
• Coordinate across jurisdictions for development of standardized eligibility and assessment standards
and by convening semiannual regional planning meetings.
• Support federal and local goals for priority populations, including but not limited to veterans, persons
with disabilities, families and others.
• Allow for variations in ESG entitlement programs that respond to the needs and resources of the
individual jurisdictions.
• Comply with eligibility and verification requirements and locally established standards (HMIS,
housing status, habitability standards, homeless definitions, etc.).
• Allows each program to take responsibility for program administration including compliance with
public notice requirements and timely reporting.
• Encourages all subrecipients to participate in collaborative assessment, coordinated entry, data
management, and reporting systems established by the RCCC in accordance with HEARTH
regulations.
• Supports timely and accurate data collection and reporting through contractual obligations with
subrecipients, and through establishing common standards for vendor relationships with the HMIS
Lead.
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CONTRACT
FOR
MANAGEMENT AND IMPLEMENTATION
OF A
COMMUNITY DEVELOPMENT BLOCK GRANT PROJECT
2018-2019
This contract, numbered «IDIS_IFAS», is entered into by and between «Agency» (“Sub-recipient”) and the City
of Chula Vista (“City”) on July 1, 2018 (“Effective Date”) for the purpose of having Sub-recipient implement
and perform work on the 2018-2019 «Project_Title» as set forth herein and in the incorporated documents
and attachments.
RECITALS
WHEREAS, there has been enacted into law the Housing and Community Development Act of 1974 (the “Act”),
Title I, Part 24, Section 570, Public Law 93-383, 88 Stat. 633, 42 U.S.C 5301-5321 with the primary objective of
development of viable urban communities by providing federal assistance for community development
activities in urban areas through the Community Development Block Grant Program (Catalog of Federal
Domestic Assistance Number 14.218);
WHEREAS, the City, is authorized to apply for and accept Community Development Block Grant funds;
WHEREAS, City incorporated the Sub-recipient’s proposal for the project described in the Scope (hereinafter
referred to as the “Project”) into the City’s Community Development Block Grant/HOME Investment
Partnership/Emergency Shelter Grant Annual Funding Plan which was submitted to the U.S. Department of
Housing and Urban Development (HUD);
WHEREAS, HUD has approved the City Annual Funding Plan for Community Development Block Grant funds;
WHEREAS, it is the desire of the Sub-recipient and the City that the Project be implemented by the Sub-
recipient;
WHEREAS, the Sub-recipient shall undertake the same obligations to the City with respect to the Project in the
City’s aforesaid Annual Funding Plan for participation in the Community Development Block Grant program;
and
WHEREAS, Sub-recipient warrants and represents that they are experienced and staffed in a manner such that
they are and can deliver the services required of Sub-recipient to City within the time frames herein provided
all in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, BE IT RESOLVED that the City and Sub-recipient do hereby mutually agree as follows:
All of the Recitals above are hereby incorporated into this Agreement.
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ARTICLE I. SUB-RECIPIENT OBLIGATIONS
A. General.
1. Work to be Performed. Sub-recipient shall implement the scope of work (“Scope of Work”) described
in Attachment B, hereof fully and in accordance with the terms of the Annual Funding Plan approved
by the City and submitted to HUD in the City’s application for funds to carry out the Project and the
Certifications which were submitted concurrently with the Annual Funding Plan. The Annual Funding
Plan and Certifications form is hereby incorporated by reference into this contract fully as if set forth
herein. Sub-recipient shall also undertake the same obligations to the City that the City has
undertaken to HUD pursuant to said Annual Funding Plan and Certifications. The obligations
undertaken by Sub-recipient include, but are not limited to, the obligation to, as applicable, comply
with each of the following as may be amended from time to time:
a. The Housing and Community Development Act of 1974 (Public Law 93-383, as amended, 42
USC § 5301, et seq.);
b. HUD regulations relating to Community Development Block Grants (24 CFR 570.1, et seq.);
c. The regulations in 24 CFR Part 58 specifying other provisions of the law that further the
purposes of the National Environmental Policy Act of 1969 and the procedures by which
grantees must fulfill their environmental responsibilities;
d. Title VI of the Civil Rights Act of 1964 (42 USC § 2000d); Title VII of the Civil Rights Act of 1964
(Public Law 88-352); Title VIII of the Civil Rights Act of 1968 (Fair Housing Act, 42 USC § 3601,
et seq.); Section 109 of the Housing and Community Development Act of 1974; Executive
Order 11246, as amended (equal employment opportunity); Executive Order 11063 (non-
discrimination), as amended by Executive Order 12259; and any HUD regulations heretofore
issued or to be issued to implement these authorities relating to civil rights;
e. Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u.
All section 3 covered contracts shall include the following clause (referred to as the “section 3
clause”):
i. The work to be performed under this contract is subject to the requirements of section
3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u
(section 3). The purpose of section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects covered by
section 3, shall, to the greatest extent feasible, be directed to low and very low-income
persons, particularly persons who are recipients of HUD assistance for housing. HUD
develops income limits based on Median Family Income estimates and Fair Market
Rent area definitions for each metropolitan area, parts of some metropolitan areas,
and each non-metropolitan county. Refer to Attachment “A” – 2018 Area Median
Income Limits.
ii. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135,
which implement section 3. As evidenced by their execution of this contract, the
parties to this contract certify that they are under no contractual or other impediment
that would prevent them from complying with the part 135 regulations.
iii. The Sub-recipient agrees to send to each labor organization or representative of
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workers with which the Sub-recipient has a collective bargaining agreement or other
understanding, if any, a notice advising the labor organization or workers'
representative of the Sub-recipient's commitments under this section 3 clause, and will
post copies of the notice in conspicuous places at the work site where both employees
and applicants for training and employment positions can see the notice. The notice
shall describe the section 3 preference, shall set forth minimum number and job titles
subject to hire, availability of apprenticeship and training positions, the qualifications
for each; and the name and location of the person(s) taking applications for each of the
positions; and the anticipated date the work shall begin.
iv. The Sub-recipient agrees to include this section 3 clause in every subcontract subject to
compliance with regulations in 24 CFR part 135, and agrees to take appropriate action,
as provided in an applicable provision of the subcontract or in this section 3 clause,
upon a finding that the sub-Sub-recipient is in violation of the regulations in 24 CFR
part 135. The Sub-recipient will not subcontract with any sub-Sub-recipient where the
Sub-recipient has notice or knowledge that the sub Sub-recipient has been found in
violation of the regulations in 24 CFR part 135.
v. The Sub-recipient will certify that any vacant employment positions, including training
positions, that are filled (1) after the Sub-recipient is selected but before the contract is
executed, and (2) with persons other than those to whom the regulations of 24 CFR
part 135 require employment opportunities to be directed, were not filled to
circumvent the Sub-recipient's obligations under 24 CFR part 135.
vi. Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions,
termination of this contract for default, and debarment or suspension from future HUD
assisted contracts.
vii. With respect to work performed in connection with section 3 covered Indian housing
assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450e) also applies to the work to be performed under this contract. Section
7(b) requires that to the greatest extent feasible (i) preference and opportunities for
training and employment shall be given to Indians, and (ii) preference in the award of
contracts and subcontracts shall be given to Indian organizations and Indian-owned
Economic Enterprises. Parties to this contract that are subject to the provisions of
section 3 and section 7(b) agree to comply with section 3 to the maximum extent
feasible, but not in derogation of compliance with section 7(b).
f. The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1979, 42 USC
§ 4601, et seq., and regulations adopted to implement that Act in 49 CFR Part 24;
g. Cost principles have been established for State, Local and Indian Tribal Governments through
2CFR, Part 225 (OMB Circular A-87). This part provides a uniform approach for determining
costs and to promote effective program delivery, efficiency, and better relationships between
governmental units and the Federal Government. The principles are for determining allowable
costs only. They are not intended to identify the circumstances or to dictate the extent of
Federal and governmental unit participation in the financing of a particular Federal award.
Provision for profit or other increment above cost is outside the scope of this part;
h. Additional cost principles have been established for non-profits through 2 CFR part 200,
subpart E, entitled “Cost Principles for Non-Profit Organizations”; 2 CFR part 230 entitled
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“Cost Principles for Non-Profit Organizations” (Circular A–122); and 2 CFR Part 225 entitled
“Cost Principles for State, Local, and Indian Tribal Governments” (OMB Circular A–87); This
part establishes principles for determining costs of grants, contracts and other agreements
with non-profit organizations. The principles are designed to provide that the Federal
Government bear its fair share of costs except where restricted or prohibited by law. The
principles do not attempt to prescribe the extent of cost sharing or matching on grants,
contracts, or other agreements. However, such cost sharing or matching shall not be
accomplished through arbitrary limitations on individual cost elements by Federal agencies;
i. Grant administration requirements as described in 24 CFR 570.504, which requires Sub-
recipient to return any program income earned by Sub-recipient in carrying out the activities
of this Contract to the City. Upon expiration of this Contract, Sub-recipient shall transfer to
the City any Community Development Block Grant funds on hand at the time of expiration and
any accounts receivable attributable to the use of Community Development Block Grant
funds. Any real property under Sub-recipient’s control acquired or improved in whole or in
part with Community Development Block Grant funds in excess of $25,000 will either be:
i. Used to meet one of the CDBG National Objectives, as defined in 24 CFR 570.208, and
outlined by HUD until five years after expiration of the contract; or
ii. Disposed of in a manner that results in the City being reimbursed in the amount of the
current fair market value of the property less any portion of the value attributable to
expenditures of non-Community Development Block Grant funds for acquisition of, or
improvement to, the property. Reimbursement is not required after the five-year period
pursuant to 24 CFR 570.505.
Program income on hand at the time of closeout and subsequently received shall
continue to be subject to all applicable Community Development Block grant Program
eligibility requirements, 24 CFR 570.489, and provisions of this Contract;
j. 24 CFR 570.505 concerning use of real property;
k. The following laws and regulations relating to preservation of historic places: National Historic
Preservation Act of 1966 (Public Law 89-665); the Historical and Archaeological Preservation
Act of 1974 (Public Law 93-291); and Executive Order 11593;
l. The Labor Standards Regulations set forth in 24 CFR 570.603;
m. Labor Code section 1771 and/or Davis Bacon concerning prevailing wages as applicable;
n. The Hatch Act relating to the conduct of political activities (5 U.S.C. § 1501, et seq.);
o. The Flood Disaster Protection Act of 1973 (42 U.S.C. § 4001, et seq., and the implementing
regulations in 44 CFR Parts 59-78);
p. The Rehabilitation Act of 1973 (Public Law 93-112) as amended, including Section 504 which
relates to nondiscrimination in federal programs and HUD 24 CFR Part 8;
q. The Clean Air Act (42 U.S.C. § 7401, et seq.) and the Federal Water Pollution Control Act, as
amended (33 U.S.C. § 1251, et seq.) and the regulations adopted pursuant thereto (40 CFR
Part 6);
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r. The Drug-Free Workplace Act of 1988 (Public Law 100-690);
s. The Lead-Based Paint Poisoning Prevention Act, the Residential Lead-Based Paint Hazard
Reduction Act of 1992, and implementing regulations at 24 CFR Part 35;
t. No member, officer or employee of the Sub-recipient, or its designee or agents, no member of
the governing body of the locality in which the program is situated, and no other public official
of such locality or localities who exercises any functions or responsibilities with respect to the
program during his/her tenure or for one year thereafter, shall have any interest, direct, or
indirect, in any contract or subcontract, or the process thereof, for work to be performed in
connection with the program assisted under the Grant, and that it shall incorporate, or cause
to be incorporated, in all such contracts or subcontracts a provision prohibiting such interest
pursuant to the purposes of this certification;
u. The Sub-recipient certifies, that in accordance with Section 319 of Public Law 101-121, to the
best of his or her knowledge and belief that:
i. No federal appropriated funds have been paid or will be paid, by or on behalf of the
undersigned, to any person for influencing or attempting to influence an officer or
employee of any agency, a member of Congress, an officer or employee of Congress, in
connection with the awarding of any federal contract, the making of any federal grant,
the making of any federal loan, the entering into of any cooperative contract, and the
extension, continuation, renewals, amendment, or modifications of any federal
contract, grant loan, or cooperative contract.
ii. If any funds other than federal appropriated funds have been paid or will be paid to
any person for influencing or attempting to influence an officer or employee of any
agency, a member of Congress, or an employee of a member of Congress in connection
with this federal contract, grant, loan, or cooperative contract, the undersigned shall
complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying”, in
accordance with its instructions;
v. The Architectural Barriers Act of 1968 (42 U.S.C. § 4151, et seq.);
w. The Rehabilitation Act of 1973 (Public Law 93-112) as amended, including section 504 which
related to nondiscrimination in federal programs and HUD regulations set forth in 24 CFR 8.
Section 504 of the Rehabilitation Act of 1973 prohibits discrimination against persons with
disabilities in the operation of programs receiving federal financial assistance. HUD
regulations implementing Section 504 contain accessibility requirements for new construction
and rehabilitation of housing as well as requirements for ensuring that the programs
themselves are operated in a manner that is accessible to and usable by persons with
disabilities. Both individual units and the common areas of buildings must be accessible under
Section 504.
Section 504 states that "no qualified individuals with a disability in the United States shall be
excluded from, denied the benefits of, or be subject to discrimination under" any program or
activity that receives Federal financial assistance. Requirements common to these regulations
include program accessibility; effective communication with people who have hearing or
vision disabilities; and accessible new construction and alterations (See 24 CFR Part 8);
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x. The Americans with Disabilities Act (42 U.S.C. § 12101);
y. The bonding requirements described in 24 CFR Part 85.36 required for construction or facility
improvement contracts or subcontracts that exceed the simplified acquisition threshold
(defined at 41 U.S.C. 403(11)).
z. Prior to award of any contracts or subcontracts, City and Contractor shall verify that
contractor or subcontractor is eligible according to the Federal EPLS and LEIE databases.
Documentation of such eligibility shall be maintained in the project files;
aa. Contractor shall comply with and make good faith and reasonable efforts to carry out the
purposes of Executive Order 12166 relating to “Improving Access to Services by Persons with
Limited English Proficiency (“LEP”);
bb. Grantee shall comply with Federal Funding Accountability and Transparency Act (FFAT)
requirements established by the Office of Management and Budget (OMB) concerning the
Dun and Bradstreet Data Universal Numbering System (DUNS), the Central Contractor
Registration (CCR) database, and the Federal Funding Accountability and Transparency Act,
including Appendix A to Part 25 of the Financial Assistance Use of Universal Identifier and
Central Contractor Registration, 75 Fed. Reg.55671 (Sept. 14, 2010)(to be codified at 2 CFR
part 25) and Appendix A to Part 170 of the Requirements for Federal Funding Accountability
and Transparency Act Implementation, 75 Fed. Reg. 55663 (Sept. 14, 2010)(to be codified at 2
CFR part 170), including any subsequent amendments;
cc. Contractor shall comply with and make good faith and reasonable efforts to carry out the
purposes of Executive Orders 12432 and 11625 related to participation in federal programs by
Minority Business Enterprises (“MBE”) and Executive Order 12138 related to participation in
federal programs by Women’s Business Enterprises (“WBE”); and
dd. Sub-recipient shall hold City of Chula Vista, its elected or appointed officers, officials,
employees, agents, and volunteers (collectively the “Indemnified Parties”) harmless and
indemnify the Indemnified Parties against any harm that it may suffer with respect to HUD on
account of any failure on the part of the Sub-recipient to comply with the requirements of any
such obligation.
B. Compliance with Laws. Sub-recipient shall comply with all applicable federal, state, and local laws,
regulations, and ordinances when doing the work required by this Contract. Sub-recipient shall require
sub-contractors to similarly comply with all applicable federal, state, and local laws, regulations, and
ordinances when doing the work required by this Contract.
C. Insurance. Sub-recipient agrees to comply with the insurance requirements as set forth below:
1. General. Sub-recipient must procure and maintain, during the period of performance of this contract,
and for twelve (12) months after completion, policies of insurance from insurance companies to
protect against claims for injuries to persons or damages to property that may arise from or in
connection with the performance of the work under the contract and the results of that work by the
Contractor, its agents, representatives, employees, volunteers, or subcontractors and provide
documentation of same prior to commencement of work.
2. Minimum Scope of Insurance. Coverage must be at least as broad as:
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(a) CGL. Insurance Services Office Commercial General Liability coverage (occurrence Form
CG0001).
(b) Auto. Insurance Services Office Form Number CA 0001 covering Automobile Liability, Code 1
(any auto).
(c) WC. Workers’ Compensation insurance as required by the State of California and Employer’s
Liability Insurance.
(d) E&O. Professional Liability or Errors & Omissions Liability insurance appropriate to the
Consultant’s profession. Architects’ and Engineers’ coverage is to be endorsed to include
contractual liability.
3. Minimum Limits of Insurance. Sub-recipient must maintain limits no less than those included in the
table below:
i. General Liability: (Including
operations, products and
completed operations, as
applicable)
$1,000,000 per occurrence for bodily injury, personal injury, (including
death), and property damage. If Commercial General Liability insurance
with a general aggregate limit is used, either the general aggregate limit
must apply separately to this project/location or the general aggregate limit
must be twice the required occurrence limit.
ii. Automobile Liability: $1,000,000 per accident for bodily injury, including death, and property
damage.
iii. Workers’ Compensation
Employer’s Liability:
Statutory
$1,000,000 each accident
$1,000,000 disease-policy limit
$1,000,000 disease-each employee
iv. Professional Liability or Errors
& Omissions Liability:
$1,000,000 each occurrence
4. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared
to and approved by the City. At the option of the City, either the insurer will reduce or eliminate such
deductibles or self-insured retentions as they pertain to the Indemnified Parties; or the Sub-recipient
will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related
investigations, claim administration, and defense expenses.
5. Other Insurance Provisions. The general liability, automobile liability, and where appropriate, the
worker’s compensation policies are to contain, or be endorsed to contain, the following provisions:
(a) Additional Insureds. The Indemnified Parties are to be named as additional insureds with respect
all policies of insurance, including those with respect to liability arising out of automobiles owned,
leased, hired or borrowed by or on behalf of the Contractor, where applicable, and, with respect
to liability arising out of work or operations performed by or on behalf of the Contractor, including
providing materials, parts or equipment furnished in connection with such work or operations.
The general liability additional insured coverage must be provided in the form of an endorsement
to the Contractor’s insurance using ISO CG 2010 (11/85) or its equivalent. Specifically, the
endorsement must not exclude Products/Completed Operations coverage.
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(b) Primary Insurance. The Contractor’s General Liability insurance coverage must be primary
insurance as it pertains to the Indemnified Parties. Any insurance or self-insurance maintained by
the Indemnified Parties is wholly separate from the insurance of the Sub-recipient and in no way
relieves the Sub-recipient from its responsibility to provide insurance.
(c) Cancellation. The insurance policies required must be endorsed to state that coverage will not be
canceled by either party, except after thirty (30) days’ prior written notice to the City by certified
mail, return receipt requested. The words “will endeavor” and “but failure to mail such notice
shall impose no obligation or liability of any kind upon the company, its agents, or
representatives” shall be deleted from all certificates.
(d) Active Negligence. Coverage shall not extend to any indemnity coverage for the active negligence
of the additional insureds in any case where an agreement to indemnify the additional insured
would be invalid under Subdivision (b) of Section 2782 of the Civil Code.
(e) Waiver of Subrogation. Sub-recipient insurer will provide a Waiver of Subrogation in favor of the
City for each required policy providing coverage for the term required by this contract.
6. Claims Forms. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors &
Omissions coverage are written on a claims-made form:
(a) Retro Date. The “Retro Date” must be shown, and must be before the date of the
contract or the beginning of the contract work.
(b) Maintenance and Evidence. Insurance must be maintained and evidence of insurance
must be provided for at least five (5) years after completion of the contract work.
(c) Cancellation. If coverage is canceled or non-renewed, and not replaced with another
claims-made policy form with a “Retro Date” prior to the contract effective date, the Sub-
recipient must purchase “extended reporting” coverage for a minimum of five (5) years
after completion of contract work.
(d) Copies. A copy of the claims reporting requirements must be submitted to the City for
review.
7. Acceptability of Insurers. Insurance is to be placed with licensed insurers admitted to transact
business in the State of California with a current A.M. Best’s rating of no less than A V. If insurance
is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible
Surplus Lines Insurers (“LESLI”) with a current A.M. Best’s rating of no less than A X. Exception may
be made for the State Compensation Fund when not specifically rated.
8. Verification of Coverage. Sub-recipient shall furnish the City with original certificates and
amendatory endorsements affecting coverage required by Article I, section C. The endorsements
should be on insurance industry forms, provided those endorsements or policies conform to the
contract requirements. All certificates and endorsements are to be received and approved by the
City before work commences. The City reserves the right to require, at any time, complete, certified
copies of all required insurance policies, including endorsements evidencing the coverage required
by these specifications.
9. Subcontractors. Sub-recipient must include all subcontractors as insureds under its policies or furnish
separate certificates and endorsements for each subcontractor. All coverage for subcontractors is
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subject to all of the requirements included in these specifications.
10. Not a Limitation of Other Obligations. Insurance provisions under this Article shall not be construed
to limit the Consultant’s obligations under this contract, including Indemnity.
ARTICLE II. CITY OBLIGATIONS
A. Compensation.
1. Amounts. City shall reimburse Sub-recipient for the costs it incurs for work performed under this
contract not to exceed a maximum reimbursement of $«Funding_Recommended». Sub-recipient
shall not submit claims to the City nor shall City reimburse Sub-recipient for costs for which Sub-
recipient is reimbursed from a source other than the funds allocated for work under this contract.
2. Limitation. With regard to compensation stated in Article II, section A.1, above, Sub-recipient may be
reimbursed only to the extent and in the amounts that funds have been made available pursuant to
applications for Federal assistance. No City funds in excess of those provided by the Federal
government under such applications may be the source of reimbursement under this Contract.
3. Compensation Schedule. Sub-recipient shall not incur expenditures to be claimed for reimbursement
prior to the Effective Date, indicated above. City shall then pay Sub-recipient quarterly progress
payments upon certification and submittal by Sub-recipient of a statement of actual expenditures
incurred, provided, however, that not more than 90% of the total agreed compensation will be paid
during the performance of this contract. The balance due shall be paid upon certification by Sub-
recipient that all of the required services have been completed. Payment by City is not to be
construed as final in the event HUD disallows reimbursement for the project or any portion thereof.
The 10% retention will not apply to acquisition or service contracts.
a. Claim Due Dates. Contractor shall submit quarterly claims to the City by the deadlines listed
below in order to meet HUD’s strict expenditure standards:
• 1st Quarter (July 1-September 30): Due October 15
• 2nd Quarter (October 1 - December 31): Due January 15
• 3rd Quarter (January1 - March 31): Due April 15
• 4th Quarter (April 1 – June 30): Due July 15
Failure to submit claims by these deadlines may result in recapturing of the grant funds. Any
extension requests must be approved by all parties. However, costs must be incurred prior to June
30, 2018 and said extension shall be within the City’s Finance Department’s Fiscal Year End processing
deadline.
4. Indirect Costs. If indirect costs are charged, the Sub-recipient will develop an indirect cost allocation
plan for determining the appropriate Sub-recipient’s share of administrative costs and shall submit
such plan to the City for approval.
5. Expenditure Standard. In order to insure effective administration and performance of approved CDBG
Projects and to meet HUD performance standards, Sub-recipient agrees that it shall expedite
implementation of the Project described herein expending all contracted funds within the term of the
contract. In the event that reasonable progress has not been made and all funds are not expended
within the term period, the City shall notify the Sub-recipient of the expenditure and implementation
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deficiency. Sub-recipient will have a total of 60 days from the date of the City’s written notification to
correct the deficiency. If the deficiency is not corrected within that time, Sub-recipient agrees that the
City may reallocate the amount of the expenditure deficiency. Sub-recipient understands City may
not reimburse project expenses that are outside the contract term.
6. Budget Adjustments. In order to insure effective administration and performance of approved CDBG
Projects and to meet HUD performance standards, Sub-recipient agrees to submit budget adjustments
for City approval. City will consult its Citizen Participation Plan prior to approving said amendment.
Budget Adjustments received after June 1, 2018 will not be considered.
ARTICLE III. ETHICS
A. Financial Interests of Contractor
1. Disclosure Required. Sub-recipient is required make the disclosures detailed in Attachment “C” -
Statement . Sub-recipient may also be designated as a “Consultant” for the purposes of the Political
Reform Act (“PRA”) conflict of interest and disclosure provisions by the City, and shall report economic
interests as required by the City to the City Clerk on the required Statement of Economic Interests
(“SEI”) in such reporting categories as required by the City or the City Attorney, thereby becoming an
“FPPC filer.”
2. No Participation in Decision. Regardless of whether Sub-recipient is designated as an FPPC Filer, Sub-
recipient shall not make, or participate in making or in any way attempt to use Sub-recipient’s position
to influence a governmental decision in which Sub-recipient knows or has reason to know Sub-
recipient has a financial interest other than the compensation promised by this contract.
3. Search to Determine Economic Interests. Regardless of whether Sub-recipient is designated as an
FPPC Filer, Sub-recipient warrants and represents that Sub-recipient has diligently conducted a search
and inventory of Sub-recipient's economic interests, as the term is used in the regulations
promulgated by the Fair Political Practices Commission, and has determined that Sub-recipient does
not, to the best of Sub-recipient’s knowledge, have an economic interest which would conflict with
Sub-recipient’s duties under this contract.
4. Promise Not to Acquire Conflicting Interests. Regardless of whether Sub-recipient is designated as an
FPPC Filer, Sub-recipient further warrants and represents that Sub-recipient will not acquire, obtain, or
assume an economic interest during the term of this contract which would constitute a conflict of
interest as prohibited by the Fair Political Practices Act.
5. Duty to Advise of Conflicting Interests. Regardless of whether Sub-recipient is designated as an FPPC
Filer, Sub-recipient further warrants and represents that Sub-recipient will immediately advise the City
Attorney of City if Sub-recipient learns of an economic interest of Sub-recipient’s that may result in a
conflict of interest for the purpose of the Fair Political Practices Act, and regulations promulgated
there under.
6. Specific Warranties Against Economic Interests. Sub-recipient warrants, represents and agrees:
(a) That neither Sub-recipient, nor immediate family members, nor Sub-recipient’s employees or
agents ("Sub-recipient Associates") presently have any interest, directly or indirectly, whatsoever in
any property which may be the subject matter, or in any property within 2 radial miles from the
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exterior boundaries of any property which may be the subject matter ("Prohibited Interest"), other
than as listed on the SEI, if one was required.
(b) That no promise of future employment, remuneration, consideration, gratuity or other reward or
gain has been made to Sub-recipient or Sub-recipient’s Associates in connection with Sub-recipient’s
performance of this contract. Sub-recipient promises to advise City of any such promise that may be
made during the term of this contract, or for twelve months thereafter.
(c) That Sub-recipient Associates shall not acquire any such Prohibited Interest within the term of this
contract, or for twelve months after the expiration of this contract, except with the written permission
of City.
(d) That Sub-recipient may not conduct or solicit any business for any party to this contract, or for any
third party that may be in conflict with Sub-recipient’s responsibilities under this contract, except with
the written permission of City.
ARTICLE IV. INDEMNIFICATION
A. Defense, Indemnity, and Hold Harmless.
1. General Requirement. The City, including its elected and appointed officers, agents, employees, and
volunteers (collectively the “Indemnified Parties”) shall not be liable for, and Sub-recipient shall
defend and indemnify the Indemnified Parties, against any and all injury to person, including death
and dismemberment, or property (real or personal), claims, deductibles, self-insured retentions,
demands, liability, judgments, awards, fines, mechanics’ liens or other liens, labor disputes, losses,
damages, expenses, charges or costs of any kind or character, including attorneys’ fees and court costs
(collectively, “Claims”), which arise out of or are in any way connected with the work covered by this
contract arising either directly or indirectly from any act, error, omission or negligence of Sub-
recipient or its officers, employees, agents, volunteers, contractors, licensees or servants, including
without limitation, Claims caused by the concurrent act, error, omission or negligence, whether active
or passive, of the Indemnified Parties. However, Sub-recipient shall have no obligation to defend or
indemnify City from a Claim if it is determined by a court of competent jurisdiction that such Claim
was caused by the sole negligence or willful misconduct of the Indemnified Parties.
2. Additional Requirement. Sub-recipient and its successors, assigns, and guarantors, if any, jointly and
severally agree to indemnify, defend (with counsel selected by City), reimburse, and hold the
Indemnified Parties harmless from any claims, judgments, damages, penalties, fines, costs, liabilities
(including sums paid in settlement of claims), or loss, including attorneys’ fees, consultants’ fees, and
experts’ fees which arise during or after the contract term for any losses incurred in connection with
investigation of site conditions, or any cleanup, remedial, removal or restoration work required by any
hazardous materials laws because of the presence of hazardous materials, in the soil, ground water or
soil vapors on the premises (hereinafter, “Premises”), and the release or discharge of hazardous
materials by Sub-recipient during the course of any alteration or improvements of the Premises of
Sub-recipient, unless hazardous materials are present solely as a result of the gross negligence or
willful misconduct of the Indemnified Parties. The indemnification provided by this section shall also
specifically cover costs incurred in responding to:
(a) Hazardous materials present or suspected to be present in the soil, ground water to or under
the Property before the Commencement date;
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(b) Hazardous materials that migrate, flow, percolate, diffuse, or in any way move on to or under
the Property following the Commencement Date; or
(c) Hazardous materials present on or under the Property as a result of any discharge, release,
dumping, spilling (accidental or otherwise), onto the Property during or after the Term of this
contract by any person, corporation, partnership or entity other than City.
The foregoing environmental indemnities shall survive the expiration or termination of the contract,
any or any transfer of all or any portion of the Premises, or of any interest in this contract, and shall be
governed by the laws of the State of California.
3. Costs of Defense and Award. Included in the obligations to defend indemnify and hold harmless,
above, is the Sub-recipient obligation to defend, at Sub-recipient’ s own cost, expense and risk, any
and all aforesaid suits, actions or other legal proceedings of every kind that may be brought or
instituted against the Indemnified Parties. Sub-recipient shall pay and satisfy any judgment, award or
decree that may be rendered against the Indemnified Parties, for any and all legal expense and cost
incurred by each of them in connection therewith.
4. Insurance Proceeds. Sub-recipient obligation to indemnify shall not be restricted to insurance
proceeds, if any, received by the Indemnified Parties.
5. Declarations. Sub-recipient’s obligations under Article IV shall not be limited by any prior or
subsequent declaration by the Sub-recipient.
6. Enforcement Costs. Sub-recipient agrees to pay any and all costs City incurs enforcing the indemnity
and defense provisions set forth in Section Article IV.
7. Survival. The foregoing indemnities shall survive the expiration or termination of the contract any or
any transfer of all or any portion of the Premises, or of any interest in this contract and shall be
governed by the laws of the State of California.
ARTICLE V. TERMINATION OF CONTRACT
A. Termination for Convenience. Either party may terminate this contract after thirty (30) days’ written
notice of intent to terminate has been given to the other party. However, no notice of termination given
by Sub-recipient shall be effective unless HUD has agreed to release City from its obligations pursuant to
the Project. If the contract is terminated under this paragraph, all finished and unfinished documents and
other materials described herein (including, but not limited to items discussed in Attachment “B”) shall, at
the option of the City, become City's sole and exclusive property. If the contract is terminated by City
under this paragraph, Sub-recipient shall be entitled to receive just and equitable compensation, in an
amount based on available funds under the CDBG Program or the Project, but not to exceed that payable
under this contract, for any satisfactory work completed to the effective date of such termination. Sub-
recipient hereby expressly waives any and all claims for damages or compensation arising under this
contract except as set forth herein.
B. Automatic Termination. This contract shall terminate at the discretion of the City if the United States
Government terminates the CDBG Program or the Project. City shall provide written notice to Sub-
recipient of the intent to terminate under such grounds. In that event, all finished and unfinished
documents and other materials described herein (including but not limited to items discussed in
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Attachment “B”) shall, at the option of the City, become City's sole and exclusive property. If the contract
is terminated by City as provided in this paragraph, Sub-recipient shall be entitled to receive just and
equitable compensation, in an amount based on available funds under the CDBG Program or the Project,
but not in an amount to exceed that payable under this contract, for any satisfactory work completed to
the effective date of such termination. Sub-recipient hereby expressly waives any and all claims for
damages or compensation arising under this Agreement except as set forth herein.
C. Termination of Contract for Cause. Sub-recipient and City recognize that the City is the governmental
entity which executed the grant agreement received pursuant to the City’s application and that City is
responsible for the proper performance of the Project. If Sub-recipient fails to fulfill in a timely and proper
manner its obligations under this contract to undertake, conduct or perform the Project identified in this
contract, or if Sub-recipient violates any state laws or regulations or local ordinances or regulations
applicable to implementation of the Project, or if Sub-recipient violates any provisions of this contract, City
shall have the right to terminate this contract by giving at least five days written notice to Sub-recipient of
the effective date of termination. Even if City terminates the contract, Sub-recipient shall remain liable to
City for all damages sustained by City due to Contractor’s failure to fulfill any provisions of this contract,
and City may withhold any reimbursement payments from Sub-recipient for the purpose of set-off until
the exact amount of damages due to City from Sub-recipient is determined. Sub-recipient hereby
expressly waives any and all claims for damages for compensation arising under this contract except as set
forth in this section in the event of such termination.
ARTICLE VI. RECORDS RETENTION AND ACCESS
A. Records and Reports. The Sub-recipient shall maintain records and make such reports as required by the
City of Chula Vista, to enable the City to analyze Sub-recipient’s project. All records of the Sub-recipient
related to this contract or work performed under the contract shall be open and available for inspection
by HUD and/or City monitors and auditors during normal business hours.
B. Retention. The Sub-recipient shall retain all financial records, supporting documents, statistical records,
and all other records pertinent to the contract for a period of five (5) years. The retention period begins on
the date of the submission of the Grantee’s annual performance and evaluation report to HUD in which
the activities assisted under the contract are reported on for the final time. Notwithstanding the above, if
there is litigation, claims, audits, negotiations or other actions that involve any of the records cited and
that have started before the expiration of the five-year period, then such records must be retained until
completion of the actions and resolution of all issues, or the expiration of the five-year period, whichever
occurs later.
C. Data. The Sub-recipient shall maintain data demonstrating eligibility (low-moderate locations) for services
provided. Such data shall include, but not be limited to exact location of the work performed, and a
description of service provided. Such information shall be made available to City monitors or their
designees for review upon request.
D. Disclosure. The Sub-recipient understands that client information collected under this contract is private
and the use or disclosure of such information, when not directly connected with the administration of the
City’s or Sub-recipient’s responsibilities with respect to services provided under this contract, is prohibited
by federal privacy laws unless written consent is obtained from such person receiving service and, in the
case of a minor, that of a responsible parent/guardian.
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E. Quarterly Reports/Consolidated Annual Performance Evaluation Report (CAPER). Contractor shall
provide the City with a quarterly report, submitted no later than fifteen (15) days after the last day of the
previous quarter, which includes a narrative of the services provided, progress towards meeting the
timeline goals stated in the contract, and an itemized accounting of the expenditures of CDBG funds
during the previous quarter, and number of unduplicated clients served. In addition, Contractor will
submit an annual CAPER report. Failure to submit quarterly reports and CAPER report in a timely manner
will result in withholding of CDBG funds until the report has been submitted. Evidence of match must be
submitted with each quarterly and annual report (CAPER).
a. Due Dates.
• 1st Quarter (July 1-September 30): Due October 15
• 2nd Quarter (October 1 - December 31): Due January 15
• 3rd Quarter (January1 - March 31): Due April 15
• 4th and Final (April 1 – June 30): Due July 15
ARTICLE VII. PROJECT COMPLETION, AUDIT, AND CLOSEOUT
A. Project Completion. Within ninety (90) calendar days following Project completion or termination by City,
Sub-recipient agrees to submit a final certification of Project expenses and audit reports, as applicable.
B. Audit of Consultants. Sub-recipient agrees to perform financial and compliance audits the City may
require. The Sub-recipient also agrees to obtain any other audits required by City. Sub-recipient agrees
that Project closeout will not alter Sub-recipient’s audit responsibilities.
C. Project Closeout. Project closeout occurs when City notifies the Sub-recipient that City has closed the
Project, and either forwards the final payment or acknowledges that the Sub-recipient has remitted the
proper refund. The Sub-recipient agrees that Project closeout by City does not invalidate any continuing
requirements imposed by the contract or any unmet requirements set forth in a written notification from
City.
ARTICLE VIII. MISCELLANEOUS PROVISIONS
A. Contract Administration. The City Manager or designee, shall administer this contract on behalf of the
City. The Executive Director shall administer this contract on behalf of the Sub-recipient. Within a
reasonable time after the City makes a request, Sub-recipient shall give the City progress reports or other
documentation as required by the City’s Contract Administrator to audit Contractor’s performance of this
contract.
B. Term. The term of this contract shall start on the 1st day of July, 2018 and shall continue in effect until
terminated as provided herein or until Sub-recipient has carried out all its obligations under the contract.
Services of the Sub-recipient shall start on the issuance date of the Notice to Proceed from the City of
Chula Vista and end on the 30th day of June, 2019. The term of this Agreement shall not be extended.
Any remaining project funds not invoiced or expended during the deadlines included in this agreement
will be recaptured.
C. Actions on Behalf of the City. Except as City may specify in writing, Sub-recipient shall have no authority,
express or implied, to act on behalf of City in any capacity whatsoever, as an agent or otherwise. Sub-
recipient shall have no authority, express or implied, to bind City or its members, agents, or employees, to
any obligation whatsoever, unless expressly provided in this Agreement.
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D. No Obligations to Third Parties. In connection with the Project, Sub-recipient agrees and shall require
that it’s agents, employees, subcontractors agree that the City shall not be responsible for any obligations
or liabilities to any third party, including its agents, employees, subcontractors, or other person or entity
that is not a party to this contract. Notwithstanding that the City may have concurred in or approved any
solicitation, subcontract, or third party contract at any tier, neither City shall have any obligations or
liabilities to such other party.
E. Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out
of this contract, against the City unless a claim has first been presented in writing and filed with the City
and acted upon by the City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista
Municipal Code, as same may from time to time be amended, the provisions of which are incorporated by
this reference as if fully set forth herein, and such policies and procedures used by the City in the
implementation of same. Upon request by City, Sub-recipient shall meet and confer in good faith with City
for the purpose of resolving any dispute over the terms of this Agreement.
F. Attorney’s Fees. Should a dispute arising out of this contract result in litigation, it is agreed that the
prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable
attorney's fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is
awarded substantially the relief sought.
G. Capacity of Parties. Each signatory and party hereto hereby warrants and represents to the other party
that it has legal authority and capacity and direction from its principal to enter into this contract, and that
all resolutions or other actions have been taken so as to enable it to enter into this contract.
H. Governing Law/Venue. This contract shall be governed by and construed in accordance with the laws of
the State of California. Any action arising under or relating to this contract shall be brought only in the
federal or state courts located in San Diego County, State of California, and if applicable, the City of Chula
Vista, or as close thereto as possible. Venue, to the extent permitted by law, for this contract, and
performance hereunder, shall be the City of Chula Vista.
I. Audit Costs. Sub-recipient shall reimburse City for all costs incurred to investigate and audit Contractor’s
performance of its duties under the Contract if Sub-recipient is subsequently found to have violated the
terms of the contract. Reimbursement shall include all direct and indirect expenditures incurred to
conduct the investigation or audit. City may deduct all such costs from any amount due Sub-recipient
under this contract.
J. Precedence. This contract constitutes the entire agreement of the parties and supersedes any previous
oral or written understandings or contracts related to the matters covered herein. This contract may not
be modified except by written amendment executed by each party.
K. Acknowledgement of Funding. Sub-recipient shall identify the City of Chula Vista as the source of
funding, or, if applicable, one of the sources of funding in public announcements that are made regarding
the Project. Acknowledgement of the City’s funding roles, for example, should be included in publicity
materials related to the Project. In addition, Sub-recipient agrees that the City shall be apprised of any
special events linked to the Project so that a review can be made on what role, if any, the City would
assume.
L. No Waiver. No failure, inaction, neglect or delay by City in exercising any of its rights under this Contract
shall operate as a waiver, forfeiture or abandonment of such rights or any other rights under this Contract.
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M. Notice. Any notice or notices required or permitted to be given pursuant to this contract shall be
personally served by the party giving notice or shall be served by certified mail. Notices shall be sufficient
if personally served on or if sent by certified mail, postage prepaid, addressed to:
Contractor:
City:
«Agency»
«Signator_Title»
«Agency_Address»
«City_State» «Zip»
City of Chula Vista
Housing Manager
276 Fourth Avenue
Chula Vista, CA 91910
IN WITNESS WHEREOF, the Consultant and City have executed this contract as of the date first written above.
CITY OF CHULA VISTA
Gary Halbert,
City of Chula Vista City Manager
APPROVED AS TO FORM
Glen R. Googins,
City Attorney
«Agency»
Employer Federal ID: «Tax_ID»
DUNS ID: «DUNS»
«Signator_Title»
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: 0-30% AMI
: 30.1%-50% AMI
: 50.1-80% AMI
: 80.1%+ AMI
ATTACHMENT “A”
2018 AREA MEDIAN INCOME LIMITS
(San Diego-Carlsbad, CA MSA)
Family
Size
30% of AMI
50% of AMI 80% of
AMI
1 $19,100 $31,850 $50,950
2 $21,800 $36,400 $58,200
3 $24,550 $40,950 $65,500
4 $27,250 $45,450 $72,750
5 $29,450 $49,100 $78,600
6 $31,650 $52,750 $84,400
7 $33,800 $56,400 $90,250
8 $36,000 $60,000 $96,050
Source: U.S. Department of Housing and Urban Development, published
March 2018.
(https://www.hudexchange.info/resource/5334/cdbg-income-limits)
As a reference, a screenshot of the required HUD Integrated Disbursement Information System
reporting screen is included below. The income data is broken down into distinct income categories
including a non-low/moderate category.
2018-05-15 Agenda Packet Page 317
MEMORANDUM OF UNDERSTANDING
FOR USE OF CDBG FUNDS
BETWEEN
CITY OF CHULA VISTA
DEVELOPMENT SERVICES-HOUSING DIVISION
AND
DEPARTMENT OF [ENTER DEPT HERE]
This Memorandum of Understanding (MOU) is entered into this 1st day of July, 2018 between the
Development Services Department Housing Division (DSD-HD) and the Department of [ENTER
DEPARTMENT HERE] to work together toward the mutual goal of developing and improving the
community facilities, infrastructure in the City of Chula Vista by completing the [ENTER PROJECT
HERE].
DSD-HD is the Grantee administrator for the City of Chula Vista receipt of federal Community
Development Block Grant (CDBG) program funds. The City Council allocated CDBG program funds
for a City project as described in “Work to be Performed” (the Project). This Grant is made
pursuant to Title I of the Housing and Community Development Act of 1974 (41 U.S.C. 5301-5320)
as amended, the primary objective of which is the development of viable urban communities by
providing federal assistance for community development activities in urban areas.
This MOU will establish the working parameters for the Project activities to be accomplished with
these funds. This CDBG funded activity has been incorporated into the City’s annual Action Plan
which was submitted and accepted by the U.S. Department of Housing and Urban Development
(HUD). The Action Plan requires [DEPARTMENT HERE] and all its subreceipients and contractors to
meet certain obligations and certifications to the federal government including environmental
review, anti-discrimination, wage requirements and timely expenditure of funds. This Project will
be implemented compliant with CDBG regulations and related federal laws.
IT IS AGREED AS FOLLOWS:
WORK TO BE PERFORMED: [DEPARTMENT] will implement the Project described as follows:
[ENTER PROJECT DESCRIPTION HERE]. The Project will use [$AMOUNT OF FUNDING] of CDBG funds
from FY 2018-2019, further detailed in Attachment “A” - Budget.
PERFORMANCE MEASUREMENT A total of [NUMBER] residents, residing along the [STREET
NAME], 00.00% of which are low/moderate income (further detailed below) and Attachment “B” –
Service Area.
TIMELY COMPLETION AND EXPENDITURE: Timely completion of the Project is the highest priority
of this agreement. To ensure timely completion and expenditures, [DEPARTMENT] will
demonstrate reasonable progress in implementation of a Project by completing and expending
allocated CDBG Project funds by June 30, 2019, further detailed in Attachment “C” – Project
CDBG MOU | PAGE 1 2018-05-15 Agenda Packet Page 318
Timeline.
QUARTERLY REPORTS: In order to more closely monitor Project completion and expenditures, the
PW Project Manager will provide the DSD-HD Project Manager with quarterly reports, submitted
no later than 15 days after the last day of the previous quarter, which includes a narrative of the
activities, and/or progress towards meeting the timeline goals. Report due dates are: October 15,
January 15, April 15, and July 15.
PROJECT REVIEW CONFERENCE: In the event that quarterly reports indicate funds will not be
expended by June 30, 2016, or within the agreed upon schedule, [DEPARTMENT] will notify DSD-
HD of the completion deficiencies and PW will have 45 calendar days to provide its plan for
meeting time and expenditure agreements. Failure to correct the deficiency within 45 calendar
days will require DSD-HD to schedule a Project Review Conference.
Upon failure to develop a plan for meeting completion and expenditure requirements, the DSD-HD
Housing Manager will schedule a Project Review Conference. Either or both Directors may assign
a designee to represent their respective department during a Project Review Conference. The
Project Review Conference will serve to identify reasons for delayed performance and weaknesses
in the project implementation plan. Based on the Project Review Conference discussions both
DSD-HD and PW will generate a remedial plan that may include but is not limited to re-design of
the Project, amendments to the Project, extending the term of the Project, or re-allocation of the
funds to an alternate Project.
CDBG PROGRAMMATIC REQUIREMENTS: Project will be implemented in accordance with
Community Development Block Grant requirements as well as all other additional Federal
Requirements detailed below and all bid documents shall contain the following clauses:
1. Equal Employment Opportunity—All contracts shall contain a provision requiring
compliance with E.O. 11246, “Equal Employment Opportunity,” as amended by E.O. 11375,
“Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and as
supplemented by regulations at 41 CFR part 60, “Office of Federal Contract Compliance
Programs, Equal Employment Opportunity, Department of Labor.”
2. Copeland “Anti-Kickback” Act (18 U.S.C. 874 and 40 U.S.C. 276c)—All contracts and
subgrants in excess of $2000 for construction or repair awarded by recipients and
subrecipients shall include a provision for compliance with the Copeland “Anti-Kickback”
Act (18 U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR part 3,
“Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in
Part by Loans or Grants from the United States”). The Act provides that each contractor or
subrecipient shall be prohibited from inducing, by any means, any person employed in the
construction, completion, or repair of public work, to give up any part of the compensation
to which he is otherwise entitled. The recipient shall report all suspected or reported
violations to HUD.
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3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)—When required by Federal program
legislation, all construction contracts awarded by the recipients and subrecipients of more
than $2000 shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C.
276a to a-7) and as supplemented by Department of Labor regulations (29 CFR part 5,
“Labor Standards Provisions Applicable to Contracts Governing Federally Financed and
Assisted Construction”). Under this Act, contractors shall be required to pay wages to
laborers and mechanics at a rate not less than the minimum wages specified in a wage
determination made by the Secretary of Labor. In addition, contractors shall be required to
pay wages not less than once a week. The recipient shall place a copy of the current
prevailing wage determination issued by the Department of Labor in each solicitation and
the award of a contract shall be conditioned upon the acceptance of the wage
determination. The recipient shall report all suspected or reported violations to HUD.
4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327 through 333)—Where
applicable, all contracts awarded by recipients in excess of $2000 for construction contracts
and in excess of $2,500 for other contracts that involve the employment of mechanics or
laborers shall include a provision for compliance with Sections 102 and 107 of the Contract
Work Hours and Safety Standards Act (40 U.S.C. 327–333), as supplemented by
Department of Labor regulations (29 CFR part 5). Under Section 102 of the Act, each
contractor shall be required to compute the wages of every mechanic and laborer on the
basis of a standard workweek of 40 hours. Work in excess of the standard workweek is
permissible provided that the worker is compensated at a rate of not less than 1 1/2 times
the basic rate of pay for all hours worked in excess of 40 hours in the workweek. Section
107 of the Act is applicable to construction work and provides that no laborer or mechanic
shall be required to work in surroundings or under working conditions which are
unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of
supplies or materials or articles ordinarily available on the open market, or contracts for
transportation or transmission of intelligence.
5. Rights to Inventions Made Under a Contract or Agreement— Contracts or agreements for
the performance of experimental, developmental, or research work shall provide for the
rights of the Federal Government and the recipient in any resulting invention in accordance
with 37 CFR part 401, “Rights to Inventions Made by Nonprofit Organizations and Small
Business Firms Under Government Grants, Contracts and Cooperative Agreements,” and
any implementing regulations issued by HUD.
6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.), as amended—Contracts and subgrants of amounts in excess of $100,000
shall contain a provision that requires the recipient to agree to comply with all applicable
standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 et
seq.) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251 et seq.).
Violations shall be reported to HUD and the Regional Office of the Environmental
Protection Agency (EPA).
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7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)— Contractors who apply or bid for an
award of $100,000 or more shall file the required certification. Each tier certifies to the tier
above that it will not and has not used Federal appropriated funds to pay any person or
organization for influencing or attempting to influence an officer or employee of any
agency, a member of Congress, officer or employee of Congress, or an employee of a
member of Congress in connection with obtaining any Federal contract, grant or any other
award covered by 31 U.S.C. 1352. Each tier shall also disclose any lobbying with non-
Federal funds that takes place in connection with obtaining any Federal award. Such
disclosures are forwarded from tier to tier up to the recipient.
8. Debarment and Suspension (E.O.s 12549 and 12689)—No contract shall be made to parties
listed on the General Services Administration's List of Parties Excluded from Federal
Procurement or Nonprocurement Programs in accordance with E.O.s 12549 and 12689,
“Debarment and Suspension,” as set forth at 24 CFR part 24. This list contains the names of
parties debarred, suspended, or otherwise excluded by agencies, and contractors declared
ineligible under statutory or regulatory authority other than E.O. 12549. Contractors with
awards that exceed the small purchase threshold shall provide the required certification
regarding its exclusion status and that of its principal employees.
9. Drug-Free Workplace Requirements—The Drug-Free Workplace Act of 1988 (42 U.S.C. 701)
requires grantees (including individuals) of federal agencies, as a prior condition of being
awarded a grant, to certify that they will provide drug-free workplaces. Each potential
recipient must certify that it will comply with drug-free workplace requirements in
accordance with the Act and with HUD's rules at 24 CFR part 24, subpart F.
10. Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u.
All section 3 covered contracts shall include the following clause (referred to as the
“section 3 clause”):
a. The work to be performed under this contract is subject to the requirements of section
3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u
(section 3). The purpose of section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects covered by
section 3, shall, to the greatest extent feasible, be directed to low- and very low-
income persons, particularly persons who are recipients of HUD assistance for housing.
b. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135,
which implement section 3. As evidenced by their execution of this contract, the
parties to this contract certify that they are under no contractual or other impediment
that would prevent them from complying with the part 135 regulations.
c. The Sub-recipient agrees to send to each labor organization or representative of
workers with which the Sub-recipient has a collective bargaining agreement or other
understanding, if any, a notice advising the labor organization or workers'
representative of the Sub-recipient's commitments under this section 3 clause, and will
post copies of the notice in conspicuous places at the work site where both employees
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and applicants for training and employment positions can see the notice. The notice
shall describe the section 3 preference, shall set forth minimum number and job titles
subject to hire, availability of apprenticeship and training positions, the qualifications
for each; and the name and location of the person(s) taking applications for each of the
positions; and the anticipated date the work shall begin.
d. The Sub-recipient agrees to include this section 3 clause in every subcontract subject to
compliance with regulations in 24 CFR part 135, and agrees to take appropriate action,
as provided in an applicable provision of the subcontract or in this section 3 clause,
upon a finding that the sub-Sub-recipient is in violation of the regulations in 24 CFR
part 135. The Sub-recipient will not subcontract with any sub-Sub-recipient where the
Sub-recipient has notice or knowledge that the sub Sub-recipient has been found in
violation of the regulations in 24 CFR part 135.
e. The Sub-recipient will certify that any vacant employment positions, including training
positions, that are filled (1) after the Sub-recipient is selected but before the contract is
executed, and (2) with persons other than those to whom the regulations of 24 CFR
part 135 require employment opportunities to be directed, were not filled to
circumvent the Sub-recipient's obligations under 24 CFR part 135.
f. Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions,
termination of this contract for default, and debarment or suspension from future HUD
assisted contracts.
g. With respect to work performed in connection with section 3 covered Indian housing
assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450e) also applies to the work to be performed under this contract. Section
7(b) requires that to the greatest extent feasible (i) preference and opportunities for
training and employment shall be given to Indians, and (ii) preference in the award of
contracts and subcontracts shall be given to Indian organizations and Indian-owned
Economic Enterprises. Parties to this contract that are subject to the provisions of
section 3 and section 7(b) agree to comply with section 3 to the maximum extent
feasible, but not in derogation of compliance with section 7(b).
11. The Architectural Barriers Act of 1968 (42 U.S.C. § 4151, et seq.);
12. The Rehabilitation Act of 1973 (Public Law 93-112) as amended, including section 504
which related to nondiscrimination in federal programs and HUD regulations set forth in 24
CFR 8. Section 504 of the Rehabilitation Act of 1973 prohibits discrimination against
persons with disabilities in the operation of programs receiving federal financial assistance.
HUD regulations implementing Section 504 contain accessibility requirements for new
construction and rehabilitation of housing as well as requirements for ensuring that the
programs themselves are operated in a manner that is accessible to and usable by persons
with disabilities. Both individual units and the common areas of buildings must be
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accessible under Section 504. Section 504 states that "no qualified individuals with a
disability in the United States shall be excluded from, denied the benefits of, or be subject
to discrimination under" any program or activity that receives Federal financial assistance.
Requirements common to these regulations include program accessibility; effective
communication with people who have hearing or vision disabilities; and accessible new
construction and alterations (See 24 CFR Part 8).
13. The Americans with Disabilities Act (42 U.S.C. § 12101);
14. The bonding requirements described in 24 CFR Part 85.36 required for construction or
facility improvement contracts or subcontracts that exceed the simplified acquisition
threshold (defined at 41 U.S.C. 403(11)); and
15. Comply with and make good faith and reasonable efforts to carry out the purposes of
Executive Orders 12432 and 11625 related to participation in federal programs by Minority
Business Enterprises (“MBE”) and Executive Order 12138 related to participation in federal
programs by Women’s Business Enterprises (“WBE”).
ACKNOWLEDGEMENT OF FUNDING: PW shall identify the City of Chula Vista and the Department
of Housing and Urban Development (HUD) Community Development Block Grant Program as the
source of funding, or, if applicable, one of the sources of funding in public announcements that are
made regarding the Project. Acknowledgement of the City’s funding roles, for example, should be
included in publicity materials related to the Project. In addition, DSD-HD agrees that it shall be
apprised of any special events linked to the Project so that a review can be made on what role, if
any, the City and HUD would assume.
TERM: This MOU will commence when executed by both parties and shall remain in effect until
terminated by either party with a 30 day written notice.
IN WITNESS WHEREOF, this Memorandum of Understanding is hereby executed on the day and
the year first above written.
Department of Public Works
Date: _______________________________
By: _________________________________
[DEPARTMENT HEAD],
Director of [DEPARTMENT]
Department of Development Services
Date: _______________________________
By: _________________________________
Kelly Broughton,
Director of Development Services
CDBG MOU | PAGE 6 2018-05-15 Agenda Packet Page 323
ATTACHMENT “A” – BUDGET
No. Description Quantity Unit Unit Amount
Price
1 Clearing and Grubbing, Removal and Disposal of
Existing Improvements
1 LS $8,000.00 $8,000.00
2 Excavation and Grading 1 LS $9,000.00 $9,000.00
3 Root Barrier 200 LF $10.00 $2,000.00
4 Removal of Existing Trees 3 Each $1,000.00 $3,000.00
5 Cold Milling Asphalt Concrete Pavement (Grinding) 16,119 SF $1.00 $16,119.00
6 Asphalt Concrete Pavement 487 Tons $100.00 $48,700.00
7 Crushed Aggregate Base 537 Tons $40.00 $21,480.00
8 PCC Monolithic Curb, Gutter and Sidewalk per
SDRSD G-3
819 LF $40.00 $32,760.00
9 PCC 6-Inch Curb per SDRSD G-1 50 LF $16.00 $800.00
10 PCC Slab, Sidewalk 4-inch Thick, including
Walkways per SDRSD G-7
100 SF $8.00 $800.00
11 PCC 6-inch thick Driveway per CVCS 1A Mod. And
Alley Apron per SDRSD G-17 Mod.
8,811 SF $10.00 $88,110.00
12 PCC Pedestrian Curb Ramps with Truncated Domes 5 Each $2,000.00 $10,000.00
13 Furnish and Install 24x24 Catch Basin-Brooks
Product
1 Each $1,000.00 $1,000.00
14 Furnish and Install 3-Inch PVC Pipe (3x21=63') 10 LF $20.00 $200.00
15 Replace Exist with New USPS approved Mail Box 27 Each $500.00 $13,500.00
16 Furnish and Install 27-feet' STLT Standard with 8'
Mast Arm complete with Foundations, LED
Luminaire equivalent to 150 Watts HPSV Lamp and
Photo Electric Cell
2 Each $5,000.00 $10,000.00
17 Furnish and Install #3 1/2 Pull Box and 3390 Hand
Hole with "Street Light" Lid
6 Each $400.00 $2,400.00
18 Furnish and Install 2-inch Schedule 80 PVC Conduit
with Wires Per Plan
100 LF $18.00 $1,800.00
19 Sandblast Exist. Pavement Striping 400 LF $2.00 $800.00
20 Striping in Paint with Raised Markers 500 LF $1.50 $750.00
21 Striping in Thermoplastic 100 LF $3.00 $300.00
22 Marking Legends in Thermoplastic 4 Each $300.00 $1,200.00
23 Paint Red Curb 100 LF $2.00 $200.00
24 Relocate Exist. Sign Posts on New Foundation 5 Each $200.00 $1,000.00
25 Remove and Salvage Exist. Sign Posts 2 Each $30.00 $60.00
26 Furnish and Install Signs 4 Each $150.00 $600.00
27 Remove and Relocate Exist. Signs 2 Each $30.00 $60.00
28 Remove and Salvage Exist. Signs 3 Each $20.00 $60.00
29 Furnish and Install post with foundation per
CVDTR03
2 Each $150.00 $300.00
2018-05-15 Agenda Packet Page 324
ATTACHMENT “A” – BUDGET
30 Public Convenience and Safety (Traffic Control) 1 LS $5,000.00 $5,000.00
31 Avoidance of Significant Impacts to Migratory Birds
and Occupied Raptor Nests
1 LS $3,000.00 $3,000.00
32 Stormwater Compliane 1 LS $5,000.00 $5,000.00
33 Modular Wetland System 4 Each $18,000.00 $72,000.00
Not Included Traffic Signal Mod at $250k Each
Intersection
Construction Subtotal: $ 359,999.00
Contingencies 15.0% $359,999.00 $ 53,999.85
Total Estimated Contract Construction Cost:
$ 413,998.85
Construction Inspection (staff costs) 15.0% $359,999.00 $ 53,999.85
Soil Testing during Construction Phase 5.0% $359,999.00 $ 17,999.95
Construction Survey 10.0% $359,999.00 $ 35,999.90
Federal/State Expenditure Processing 2.0%
Others 0.0% $359,999.00 $ -
SWA Relocation Cost - $ 20,000.00
Total Estimated Construction Staff Cost
$ 127,999.70
Total Construction and Staff Costs
$541,998.55
CDBG Funded $468,292.00
Alternate Funding Sources $ 73,706.55
2018-05-15 Agenda Packet Page 325
Project Boundaries
ATTACHMENT “B” - SERVICE AREA
STREET/BOUNDARIES CENSUS TRACT(S) LOW/MOD
POPULATION
TOTAL
POPULATION
% LOW/MOD
405-493 Moss St., 1002 Fifth Avenue 013104
4,345 5,900 71.87
507-579 Moss St., 1001 Broadway
2018-05-15 Agenda Packet Page 326
ATTACHMENT “C” – PROJECT TIMELINE
# Task Description Completion
Date
1 Completion of Design Preparation of plans and specifications June 2015
2 Advertisement Placing ad to contractors in newspapers July 2015
3 Award After bid opening, City Council to award project October 2015
4 Notice to Residents Information to residents regarding construction October 2015
5 Begin Construction Contractor to execute contract October 2015
6 Payment Issue last payment and retention to contractor March 2016
7 End Construction City to issue Notice of Completion March 2016
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CONTRACT
FOR
MANAGEMENT AND IMPLEMENTATION
OF AN
EMERGENCY SOLUTIONS GRANT PROJECT
[PROJECT NAME] 2018-2019
This Contract numbered XXXX is entered into by and between South Bay Community Services (“Contractor”)
and the City of Chula Vista (“City”) on May 15, 2018.
RECITALS
WHEREAS, there has been enacted the Emergency Shelter Grants (“ESG”) Program contained in subtitle B of
Title IV of the Stewart B. McKinney Homeless Assistance Act (the “Act”, 42 U.S.C. 11361, et seq.). The ESG
Program authorizes the Secretary, U.S. Department of Housing and Urban Development (“HUD”), to make
grants to States, units of general local government, territories, and Indian Tribes for the rehabilitation or
conversion of buildings for use as emergency shelter for the homeless; for payment of certain operating
expenses and essential services in connection with emergency shelters for the homeless; and for homeless
prevention activities;
WHEREAS, on May 20, 2009, the President signed into law ”An Act to Prevent Mortgage Foreclosures and
Enhance Mortgages Credit Availability” which became Public Law . 111-22. This new law implements a variety
of new measures directed toward keeping individuals and families from losing their homes. Division B of this
new law is the Homeless Emergency Assistance and Rapid Transition to the Housing Act 2009 (HEARTH Act),
which consolidates and amends the three separate homeless assistance programs carried out under title IV of
the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11371 et seq);
WHERAS, the HEARTH Act amendments to the McKinney-Vento Act contains provisions requiring
coordination, collaboration, and consultation between Continuums of Care and ESG State and local
government recipients;
WHEREAS, the HEARTH Act, renames the former Emergency Shelter Grant program to the Emergency
Solutions Grant program to broaden existing emergency shelter and homelessness prevention activities to add
rapid refocusing activities;
WHEREAS, the Catalog of Federal Assistance for the Emergency Solutions Grant program is 14.231;
WHEREAS, the HEARTH Act also codifies in law and enhances the Continuum of Care planning process, the
coordinated response to addressing the needs of homelessness established administratively by HUD in 1995;
WHEREAS, City of Chula Vista is authorized to apply for and accept ESG funds and assist in the undertaking of
ESG activities;
WHEREAS, City incorporated the Contractor’s proposal for the project described in Attachment “A” hereof
(the “Project”) into the City’s Community Development Block Grant/HOME Investment
Partnership/Emergency Solutions Grant Annual Funding Plan (“AFP”) which was submitted to HUD;
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WHEREAS, Chula Vista City Council approved the Project on May 15, 2018 and HUD has approved the City’s
AFP for the ESG funds; and
WHEREAS, Contractor warrants and represents that they are experienced and staffed in a manner such that
they are and can deliver the services required of Contractor to City within the time frames herein provided all
in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, BE IT RESOLVED that the City and Contractor do hereby mutually agree as follows:
All of the Recitals above are hereby incorporated into this Agreement.
ARTICLE I. CONTRACTOR OBLIGATIONS
A. General.
1. Work to be Performed. Contractor shall implement the Project described in Attachment “A” hereof (the
“Scope of Work”) fully in accordance with the term of the AFP approved by the City and submitted to HUD
in its application for funds to carry out the Project and the certifications which were submitted
concurrently with the AFP (“Certifications”). The AFP and Certifications form is hereby incorporated by
reference into this contract fully as if set forth herein. Contractor shall also undertake the same obligations
to the City that the City has undertaken to HUD pursuant to said AFP and Certifications. Contractor’s
obligations include, but are not limited to, compliance with the current and most up-to-date version of
each of the following:
(a) The ESG Program contained in subtitle B of Title IV of the Stewart B. McKinney Homeless Assistance
Act (42 U.S.C. 11361, et seq.) as amended;
(b) The Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009 (HEARTH Act);
(c) HUD regulations relating to ESG Program (24 CFR Part 576), as amended;
(d) HUD regulations relating to environmental review procedures for the ESG Program (24 CFR 576.57,
subd. (e));
(e) Title VI of the Civil Rights Act of 1964 (42 USC § 2000d); Title VII of the Civil Rights Act of 1968 (Public
Law 88-352); Title VIII of the Civil Rights Act of 1968 (Fair Housing Act, 42 USC § 3601, et seq.); § 109 of
the Housing and Community Development Act of 1974; Executive Orders 11246 (equal employment
opportunity) and 11063 (non-discrimination), as amended by Executive Order 12259; and any HUD
regulations heretofore issued or to be issued to implement these authorities relating to civil rights;
(f) Section 3 of the Housing and Community Development Act of 1974, which includes:
(1) The work to be performed under this contract is subject to the requirements of section 3 of
the Housing and Urban Development Act of 1968, as amended (12 U.S.C. 1701u). The purpose
of section 3 is to ensure that employment and other economic opportunities generated by
HUD assistance or HUD-assisted projects covered by section 3, shall, to the greatest extent
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feasible, be directed to low- and very low-income persons, particularly persons who are
recipients of HUD assistance for housing.
(2) The parties to this contract agree to comply with HUD’s regulations in 24 CFR Part 135, which
implement section 3. As evidenced by their execution of this contract, the parties to this
contract certify that they are under no contractual or other impediment that would prevent
them from complying with the Part 135 regulations.
(3) The contractor agrees to send to each labor organization or representative of workers with
which the contractor has a collective bargaining contract or other understanding, if any, a
notice advising the labor organization or workers’ representative of the contractor’s
commitments under this section 3 clause, and will post copies of the notice in conspicuous
places at the work site where both employees and applicants for training and employment
positions can see the notice. The notice shall describe the section 3 preference, shall set forth
minimum number and job titles subject to hire, availability of apprenticeship and training
positions, the qualifications for each; and the name and location of the person(s) taking
applications for each of the positions; and the anticipated date the work shall begin.
(4) Contractor shall include the section 3 clause in every subcontract subject to compliance with
regulations in 24 CFR Part 135, and shall take appropriate action, as provided in an applicable
provision of the subcontract or in this section 3 clause, upon a finding that the subcontractor
is in violation of the regulations in 24 CFR Part 135. Contractor will not subcontract with any
subcontractor where the contractor has notice or knowledge that the subcontractor has been
found in violation of the regulations in 24 CFR Part 135.
(5) Contractor will certify that any vacant employment positions, including training positions, that
are filled (1) after the contractor is selected but before the contract is executed, and (2) with
persons other than those to whom the regulations of 24 CFR Part 135 require employment
opportunities to be directed, were not filled to circumvent Contractor’s obligations under 24
CFR part 135.
(6) Noncompliance with HUD’s regulations in 24 CFR Part 135 may result in sanctions, termination
of this contract for default, and debarment or suspension from future HUD assisted contracts.
(7) With respect to work performed in connection with section 3 covered Indian housing
assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act (25
U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b)
requires that to the greatest extent feasible (i) preference and opportunities for training and
employment shall be given to Indians, and (ii) preference in the award of contracts and
subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises.
Parties to this contract that are subject to the provisions of section 3 and section 7(b) agree to
comply with section 3 to the maximum extent feasible, but not in derogation of compliance
with section 7(b);
(g) The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 USC § 4601,
and implementing regulations at 49 CFR Part 24;
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(h) Office of Management and Budget Circular A-122 entitled “Cost Principles for Non-Profit
Organizations”; Office of Management and Budget Circular A-133 entitled “Audits of States, Local
Governments, and Non-Profit Organizations” and with Office of Management and Budget Circular A-
110 entitled “Uniform Administrative Requirements for Grants and Agreements with Institutions of
Higher Education, Hospitals, and Other Non-Profit Organizations”;
(i) 24 CFR 576.51, which requires each grantee to match the funding provided by HUD as set forth in 42
U.S.C. 11375;
(j) 24 CFR 576.53 concerning use of community facilities as an emergency shelter;
(k) The following laws and regulations relating to preservation of historic places: National Historic
Preservation Act of 1966 (Public Law 89-665); the Archeological and Historical Preservation Act of
1974 (Public Law 93-291); and Executive Order 11593;
(l) The Labor Standards Regulations set forth in 24 CFR 570.603;
(m) The Architectural Barriers Act of 1968 (42 U.S.C. § 4151, et seq.);
(n) The Hatch Act relating to the conduct of political activities (Chapter 15 of Title 5, U.S.C.);
(o) The Flood Disaster Protection Act of 1974 (42 USC § 4106 and the implementing regulations in 44 CFR
parts 59 through 79;
(p) The Rehabilitation Act of 1973 (Public Law 93-112) as amended, including Section 504 which relates to
nondiscrimination in federal programs and HUD regulations set forth in 24 CFR Part 8;
(q) The Clean Air Act (42 U.S.C. § 7401, et seq.) and the Federal Water Pollution Control Act, as amended
(33 U.S.C. § 1251, et seq.) and the regulations adopted pursuant thereto (40 CFR, Part 6);
(r) The Drug-Free Workplace Act of 1988 (Public Law 100-690);
(s) No member, officer or employee of the Contractor, or its designee or agents, no member of the
governing body of the locality in which the program is situated, and no other public official of such
locality or localities who exercises any functions or responsibilities with respect to the program during
his/her tenure or for one year thereafter, shall have any interest, direct, or indirect, in any contract or
subcontract, or the process thereof, for work to be performed in connection with the program
assisted under the Grant, and that it shall incorporate, or cause to be incorporated, in all such
contracts or subcontracts a provision prohibiting such interest pursuant to the purposes of this
certification;
(t) Contractor certifies, that in accordance with Section 319 of Public Law 101-121, to the best of his or
her knowledge and belief that:
(1) No federal appropriated funds have been paid or will be paid, by or on behalf of the
undersigned, to any person for influencing or attempting to influence an officer or employee
of any agency, a member of Congress, an officer or employee of Congress, in connection with
the awarding of any federal contract, the making of any federal grant, the making of any
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federal loan, the entering into of any cooperative contract, and the extension, continuation,
renewal, amendment, or modification of any federal contract, grant, loan, or cooperative
contract.
(2) If any funds other than federal appropriated funds have been paid or will be paid to any
person for influencing or attempting to influence an officer or employee of any agency, a
member of Congress, or an employee of a member of Congress in connection with this federal
contract, grant, loan, or cooperative contract, the undersigned shall complete and submit
Standard Form-LLL, “Disclosure Form to Report Lobbying”, in accordance with its instructions;
(u) The American’s with Disabilities Act (42 U.S.C. sec. 4151. et. seq.);
(v) Contractor shall comply with and make good faith and reasonable efforts to carry out the purposes of
Executive Order 12166 relating to “Improving Access to Services by Persons with Limited English
Proficiency (“LEP”);
(w) Contractor shall comply with and make good faith and reasonable efforts to carry out the purposes of
Executive Orders 12432 and 11625 related to participation in federal programs by Minority Business
Enterprises (“MBE”) and Executive Order 12138 related to participation in federal programs by
Women’s Business Enterprises (“WBE”);
(x) Contractor shall hold City of Chula Vista, its elected or appointed officers, officials, employees, agents,
and volunteers (collectively the “Indemnified Parties”) harmless and indemnify the Indemnified
Parties against any harm that it may suffer with respect to HUD on account of any failure on the part
of the Contractor to comply with the requirements of any such obligation;
(y) Contractor shall comply with Federal Funding Accountability and Transparency Act (FFAT)
requirements established by the Office of Management and Budget (OMB) concerning the Dun and
Bradstreet Data Universal Numbering System (DUNS), the Central Contractor Registration (CCR)
database, and the Federal Funding Accountability and Transparency Act, including Appendix A to Part
25 of the Financial Assistance Use of Universal Identifier and Central Contractor Registration, 75 Fed.
Reg.55671 (Sept. 14, 2010)(to be codified at 2 CFR part 25) and Appendix A to Part 170 of the
Requirements for Federal Funding Accountability and Transparency Act Implementation, 75 Fed. Reg.
55663 (Sept. 14, 2010)(to be codified at 2 CFR part 170), including any subsequent amendments; and
(z) “Cost principles” as follows, but not limited to: 2 CFR part 200, subpart E, entitled “Cost Principles for
Non-Profit Organizations”; 2 CFR part 230 entitled “Cost Principles for Non-Profit Organizations”
(Circular A–122); and 2 CFR Part 225 entitled “Cost Principles for State, Local, and Indian Tribal
Governments” (OMB Circular A–87);
B. Compliance with Laws. Contractor shall comply with all applicable federal, state, and local laws,
regulations, and ordinances when doing the work required by this Contract. Contractor shall require sub-
contractors to similarly comply with all applicable federal, state, and local laws, regulations, and ordinances
when doing the work required by this Contract.
C. Insurance. Contractor agrees to comply with the insurance requirements as set forth below:
1. General. Contractor must procure and maintain, during the period of performance of this contract, and
for twelve (12) months after completion, policies of insurance from insurance companies to protect
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against claims for injuries to persons or damages to property that may arise from or in connection with
the performance of the work under the contract and the results of that work by the Contractor, its
agents, representatives, employees, volunteers, or subcontractors and provide documentation of same
prior to commencement of work.
2. Minimum Scope of Insurance. Coverage must be at least as broad as:
(a) CGL. Insurance Services Office Commercial General Liability coverage (occurrence Form CG0001).
(b) Auto. Insurance Services Office Form Number CA 0001 covering Automobile Liability, Code 1 (any
auto).
(c) WC. Workers’ Compensation insurance as required by the State of California and Employer’s Liability
Insurance.
(d) E&O. Professional Liability or Errors & Omissions Liability insurance appropriate to the Consultant’s
profession. Architects’ and Engineers’ coverage is to be endorsed to include contractual liability.
3. Minimum Limits of Insurance. Contractor must maintain limits no less than those included in the table
below:
i. General Liability:
(Including operations,
products and completed
operations, as
applicable)
$1,000,000 per occurrence for bodily injury, personal injury, (including
death), and property damage. If Commercial General Liability insurance
with a general aggregate limit is used, either the general aggregate limit
must apply separately to this project/location or the general aggregate
limit must be twice the required occurrence limit.
ii. Automobile Liability: $1,000,000 per accident for bodily injury, including death, and property
damage.
iii. Workers’ Compensation
Employer’s Liability:
Statutory
$1,000,000 each accident
$1,000,000 disease-policy limit
$1,000,000 disease-each employee
iv. Professional Liability or
Errors & Omissions
Liability:
$1,000,000 each occurrence
4. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to
and approved by the City. At the option of the City, either the insurer will reduce or eliminate such
deductibles or self-insured retentions as they pertain to the Indemnified Parties; or the Contractor will
provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related
investigations, claim administration, and defense expenses.
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5. Other Insurance Provisions. The general liability, automobile liability, and where appropriate, the worker’s
compensation policies are to contain, or be endorsed to contain, the following provisions:
(a) Additional Insureds. The Indemnified Parties are to be named as additional insureds with respect all
policies of insurance, including those with respect to liability arising out of automobiles owned, leased,
hired or borrowed by or on behalf of the Contractor, where applicable, and, with respect to liability arising
out of work or operations performed by or on behalf of the Contractor, including providing materials, parts
or equipment furnished in connection with such work or operations. The general liability additional insured
coverage must be provided in the form of an endorsement to the Contractor’s insurance using ISO CG 2010
(11/85) or its equivalent. Specifically, the endorsement must not exclude Products/Completed Operations
coverage.
(b) Primary Insurance. The Contractor’s General Liability insurance coverage must be primary insurance as
it pertains to the Indemnified Parties. Any insurance or self-insurance maintained by the Indemnified
Parties is wholly separate from the insurance of the contractor and in no way relieves the contractor from
its responsibility to provide insurance.
(c) Cancellation. The insurance policies required must be endorsed to state that coverage will not be
canceled by either party, except after thirty (30) days’ prior written notice to the City by certified mail,
return receipt requested. The words “will endeavor” and “but failure to mail such notice shall impose no
obligation or liability of any kind upon the company, its agents, or representatives” shall be deleted from all
certificates.
(d) Active Negligence. Coverage shall not extend to any indemnity coverage for the active negligence of
the additional insureds in any case where an agreement to indemnify the additional insured would be
invalid under Subdivision (b) of Section 2782 of the Civil Code.
(e) Waiver of Subrogation. Contractor insurer will provide a Waiver of Subrogation in favor of the City for
each required policy providing coverage for the term required by this contract.
6. Claims Forms. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions
coverage are written on a claims-made form:
(a) Retro Date. The “Retro Date” must be shown, and must be before the date of the contract or the
beginning of the contract work.
(b) Maintenance and Evidence. Insurance must be maintained and evidence of insurance must be
provided for at least five (5) years after completion of the contract work.
(c) Cancellation. If coverage is canceled or non-renewed, and not replaced with another claims-made
policy form with a “Retro Date” prior to the contract effective date, the Contractor must purchase
“extended reporting” coverage for a minimum of five (5) years after completion of contract work.
(d) Copies. A copy of the claims reporting requirements must be submitted to the City for review.
7. Acceptability of Insurers. Insurance is to be placed with licensed insurers admitted to transact business in
the State of California with a current A.M. Best’s rating of no less than A V. If insurance is placed with a
surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers
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(“LESLI”) with a current A.M. Best’s rating of no less than A X. Exception may be made for the State
Compensation Fund when not specifically rated.
8. Verification of Coverage. Contractor shall furnish the City with original certificates and amendatory
endorsements affecting coverage required by Article I, section C. The endorsements should be on
insurance industry forms, provided those endorsements or policies conform to the contract
requirements. All certificates and endorsements are to be received and approved by the City before work
commences. The City reserves the right to require, at any time, complete, certified copies of all required
insurance policies, including endorsements evidencing the coverage required by these specifications.
9. Subcontractors. Contractor must include all subcontractors as insureds under its policies or furnish
separate certificates and endorsements for each subcontractor. All coverage for subcontractors is subject
to all of the requirements included in these specifications.
10. Not a Limitation of Other Obligations. Insurance provisions under this Article shall not be construed to
limit the Consultant’s obligations under this contract, including Indemnity.
ARTICLE II. CITY OBLIGATIONS
A. Compensation.
1. Amounts. City shall reimburse Contractor for the costs it incurs for work performed under this contract
not to exceed a maximum reimbursement of $00,000. Contractor shall not submit claims to the City nor
shall City reimburse Contractor for costs for which Contractor is reimbursed from a source other than
the funds allocated for work under this contract.
2. Limitation. With regard to compensation stated in Article II, section A.1, above, Contractor may be
reimbursed only to the extent and in the amounts that funds have been made available pursuant to
applications for Federal assistance. No City funds in excess of those provided by the Federal
government under such applications may be the source of reimbursement under this Contract.
3. Compensation Schedule. City shall pay Contractor quarterly progress payments upon certification and
submittal by Contractor of a statement of actual expenditures incurred, provided, however, that not
more than 90% of the total agreed compensation will be paid during the performance of this contract.
The balance due shall be paid upon certification by Contractor that all of the required services have
been completed. Payment by City is not to be construed as final in the event HUD disallows
reimbursement for the project or any portion thereof. The 10% retention will not apply to acquisition
or service contracts.
a. Claim Due Dates. Contractor shall submit quarterly claims to the City by the deadlines listed below
in order to meet HUD’s strict expenditure standards:
Q1. July 1 - September 30: Due October 15
Q2. October 1 – December 31: Due January 15
Q3. January 1 - March 31:Due April 15
Q4. April 30- June 30: Due July 15
Failure to submit claims by these deadlines may result in recapturing of the grant funds. Any
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extension requests must be approved by all parties.
4. Expenditure Standard. In order to insure effective administration and performance of approved ESG
Projects and to meet HUD performance standards, Contractor agrees that it shall expedite
implementation of the Project described herein expending all contracted funds within the term of the
contract. In the event that reasonable progress has not been made and all funds are not expended
within the term period, the City shall notify the Contractor of the expenditure and implementation
deficiency. Contractor will have a total of 60 days from the date of the City’s written notification to
correct the deficiency. If the deficiency is not corrected within that time, Contractor agrees that the City
may reallocate the amount of the expenditure deficiency.
ARTICLE III. ETHICS
A. Financial Interests of Contractor
1. Disclosure Required. Contractor is required make the disclosures detailed in Attachment “C”.
Contractor may also be designated as a “Consultant” for the purposes of the Political Reform Act
(“PRA”) conflict of interest and disclosure provisions by the City, and shall report economic interests as
required by the City to the City Clerk on the required Statement of Economic Interests (“SEI”) in such
reporting categories as required by the City or the City Attorney, thereby becoming a ”FPPC filer.”
2. No Participation in Decision. Regardless of whether Contractor is designated as an FPPC Filer,
Contractor shall not make, or participate in making or in any way attempt to use Consultant's position
to influence a governmental decision in which Contractor knows or has reason to know Contractor has
a financial interest other than the compensation promised by this contract.
3. Search to Determine Economic Interests. Regardless of whether Contractor is designated as an FPPC
Filer, Contractor warrants and represents that Contractor has diligently conducted a search and
inventory of Contractor’s economic interests, as the term is used in the regulations promulgated by
the Fair Political Practices Commission, and has determined that Contractor does not, to the best of
Contractor’s knowledge, have an economic interest which would conflict with Contractor’s duties
under this contract.
4. Promise Not to Acquire Conflicting Interests. Regardless of whether Contractor is designated as an
FPPC Filer, Contractor further warrants and represents that Contractor will not acquire, obtain, or
assume an economic interest during the term of this contract which would constitute a conflict of
interest as prohibited by the Fair Political Practices Act.
5. Duty to Advise of Conflicting Interests. Regardless of whether Contractor is designated as an FPPC
Filer, Contractor further warrants and represents that Contractor will immediately advise the City
Attorney of City if Contractor learns of an economic interest of Contractor’s that may result in a
conflict of interest for the purpose of the Fair Political Practices Act, and regulations promulgated
thereunder.
6. Specific Warranties Against Economic Interests. Contractor warrants, represents and agrees:
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(a) That neither Contractor, nor Contractor’s immediate family members, nor Contractor’s
employees or agents ("Contractor Associates") presently have any interest, directly or indirectly,
whatsoever in any property which may be the subject matter of Attachment A, or in any property
within 2 radial miles from the exterior boundaries of any property which may be the subject
matter of the Attachment A, ("Prohibited Interest"), other than as listed on the SEI, if one was
required.
(b) That no promise of future employment, remuneration, consideration, gratuity or other reward
or gain has been made to Contractor or Contractor Associates in connection with Contractor’s
performance of this contract. Contractor promises to advise City of any such promise that may be
made during the term of this contract and for twelve months thereafter.
(c) That Contractor Associates shall not acquire any such Prohibited Interest within the term of
this contract, or for twelve months after the expiration of this contract, except with the written
permission of City.
(d) That Contractor may not conduct or solicit any business for any party to this contract, or for
any third party that may be in conflict with Contractor’s responsibilities under this contract,
except with the written permission of City.
ARTICLE IV. INDEMNIFICATION
A. Defense, Indemnity, and Hold Harmless.
1. General Requirement. The Indemnified Parties shall not be liable for, and Contractor shall defend and
indemnify the Indemnified Parties, against any and all injury to person, including death and
dismemberment, or property (real or personal), claims, deductibles, self-insured retentions, demands,
liability, judgments, awards, fines, mechanics’ liens or other liens, labor disputes, losses, damages,
expenses, charges or costs of any kind or character, including attorneys’ fees and court costs
(collectively, “Claims”), which arise out of or are in any way connected with the work covered by this
Contract arising either directly or indirectly from any act, error, omission or negligence of Contractor
or its officers, employees, agents, contractors, volunteers, licensees or servants, including without
limitation, Claims caused by the concurrent act, error, omission or negligence, whether active or
passive, of the Indemnified Parties. However, Contractor shall have no obligation to defend or
indemnify City from a Claim if it is determined by a court of competent jurisdiction that such Claim
was caused by the sole negligence or willful misconduct of the Indemnified Parties.
2. Additional Requirement. Contractor and its successors, assigns, and guarantors, if any, jointly and
severally agree to indemnify, defend (with counsel selected by City), reimburse, and hold the
Indemnified Parties harmless from any claims, judgments, damages, penalties, fines, costs, liabilities
(including sums paid in settlement of claims), or loss, including attorneys’ fees, consultants’ fees, and
experts’ fees which arise during or after the contract term for any losses incurred in connection with
investigation of site conditions, or any cleanup, remedial, removal or restoration work required by any
hazardous materials laws because of the presence of hazardous materials, in the soil, ground water or
soil vapors on the premises (hereinafter, “Premises”), and the release or discharge of hazardous
materials by Contractor during the course of any alteration or improvements of the Premises of
Contractor, unless hazardous materials are present solely as a result of the gross negligence or willful
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misconduct of the Indemnified Parties. The indemnification provided by this section shall also
specifically cover costs incurred in responding to:
(a) Hazardous materials present or suspected to be present in the soil, ground water to or under
the Property before the Commencement date;
(b) Hazardous materials that migrate, flow, percolate, diffuse, or in any way move on to or under
the Property following the Commencement Date; or
(c) Hazardous materials present on or under the Property as a result of any discharge, release,
dumping, spilling (accidental or otherwise), onto the Property during or after the Term of this
contract by any person, corporation, partnership or entity other than City.
The foregoing environmental indemnities shall survive the expiration or termination of the contract,
any or any transfer of all or any portion of the Premises, or of any interest in this contract, and shall be
governed by the laws of the State of California.
3. Costs of Defense and Award. Included in the obligations to defend indemnify and hold harmless,
above, is the Contractor obligation to defend, at Contractor’ s own cost, expense and risk, any and all
aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted
against the Indemnified Parties. Contractor shall pay and satisfy any judgment, award or decree that
may be rendered against the Indemnified Parties for any and all legal expense and cost incurred by
each of them in connection therewith.
4. Insurance Proceeds. Contractor’s obligation to indemnify shall not be restricted to insurance
proceeds, if any, received by the Indemnified Parties.
5. Declarations. Contractor’s obligations under Article IV shall not be limited by any prior or subsequent
declaration by the Contractor.
6. Enforcement Costs. Contractor agrees to pay any and all costs City incurs enforcing the indemnity and
defense provisions set forth in Article IV.
7. Survival. The foregoing indemnities shall survive the expiration or termination of the contract any or
any transfer of all or any portion of the Premises, or of any interest in this contract and shall be
governed by the laws of the State of California.
ARTICLE V. TERMINATION OF CONTRACT
A. Termination for Convenience. Either party may terminate this contract after thirty days written notice of
intent to terminate has been given to the other party. However, no notice of termination given by Contractor
shall be effective unless HUD has agreed to release City from its obligations pursuant to the Project. If the
contract is terminated under this paragraph, all finished and unfinished documents and other materials
described herein (including, but not limited to items discussed in Attachment “A”) shall, at the option of the
City, become City's sole and exclusive property. If the contract is terminated by City under this paragraph,
Contractor shall be entitled to receive just and equitable compensation, in an amount based on available
funds under the ESG Program or the Project, but not to exceed that payable under this contract, for any
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satisfactory work completed to the effective date of such termination. Contractor hereby expressly waives
any and all claims for damages or compensation arising under this contract except as set forth herein.
B. Automatic Termination. This contract shall terminate at the discretion of the City if the United States
Government terminates the ESG Program or the Project. City shall provide written notice to Contractor of
the intent to terminate under such grounds. In that event, all finished and unfinished documents and other
materials described herein (including but not limited to items discussed in Attachment “A”) shall, at the
option of the City, become City's sole and exclusive property. If the contract is terminated by City as provided
in this paragraph, Contractor shall be entitled to receive just and equitable compensation, in an amount
based on available funds under the ESG Program or the Project, but not in an amount to exceed that payable
under this contract, for any satisfactory work completed to the effective date of such termination. Contractor
hereby expressly waives any and all claims for damages or compensation arising under this Agreement except
as set forth herein.
.
C. Termination of Contract for Cause. Contractor and City recognize that the City is the governmental entity
which executed the grant agreement received pursuant to the City’s application and that City is responsible
for the proper performance of the Project. If Contractor fails to fulfill in a timely and proper manner its
obligations under this contract to undertake, conduct or perform the Project identified in this contract, or if
Contractor violates any state laws or regulations or local ordinances or regulations applicable to
implementation of the Project, or if Contractor violates any provisions of this contract, City shall have the
right to terminate this contract by giving at least five days written notice to Contractor of the effective date
of termination. Even if City terminates the contract, Contractor shall remain liable to City for all damages
sustained by City due to Contractor’s failure to fulfill any provisions of this contract, and City may withhold
any reimbursement payments from Contractor for the purpose of set-off until the exact amount of damages
due to City from Contractor is determined. Contractor hereby expressly waives any and all claims for
damages for compensation arising under this contract except as set forth in this section in the event of such
termination.
ARTICLE VI. RECORDS RETENTION AND ACCESS
A. Records and Reports. The Contractor shall maintain records and make such reports as required by the
City Manager to enable the City to analyze and audit Contractor’s project. All records of the Contractor
related to this Contract or work performed under this Contract shall be open and available for inspection by
HUD and/or City auditors during normal business hours. Records shall be maintained for a period of at least
five (5) years after the end of the grant term. This provision also applies to subcontractors and Contractor
will require subcontractors to comply with this provision.
B. Disclosure. The Contractor understands that client information collected under this contract is private and
the use or disclosure of such information, when not directly connected with the administration of the City’s or
Contractor’s responsibilities with respect to services provided under this contract, is prohibited by federal
privacy laws unless written consent is obtained from such person receiving service and, in the case of a minor,
that of a responsible parent/guardian.
C. Quarterly Reports/Consolidated Annual Performance Evaluation Report (CAPER). Contractor shall
provide the City with a quarterly report, submitted no later than fifteen (15) days after the last day of the
previous quarter, which includes a narrative of the services provided, progress towards meeting the timeline
goals stated in the contract, and an itemized accounting of the expenditures of ESG funds during the previous
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quarter, and number of unduplicated clients served. In addition, Contractor will submit an annual CAPER
report. Failure to submit quarterly reports and CAPER report in a timely manner will result in withholding of
ESG funds until the report has been submitted. Evidence of match must be submitted with each quarterly
and annual report (CAPER).
D. Due Dates.
Q1. July 1 - September 30: Due October 15
Q2. October 1 – December 31: Due January 15
Q3. January 1 - March 31:Due April 15
Q4. April 3 - June 30: Due July 15
ARTICLE VII. PROJECT COMPLETION, AUDIT, AND CLOSEOUT
A. Project Completion. Within ninety (90) calendar days following Project completion or termination by
City, Contractor agrees to submit a final certification of Project expenses and audit reports, as applicable.
B. Audit of Consultants. Contractor agrees to perform financial and compliance audits the City may
require. The Contractor also agrees to obtain any other audits required by City. Contractor agrees that
Project closeout will not alter Contractor’s audit responsibilities.
C. Project Closeout. Project closeout occurs when City notifies the Contractor that City has closed the
Project, and either forwards the final payment or acknowledges that the Contractor has remitted the
proper refund. The Contractor agrees that Project closeout by City does not invalidate any continuing
requirements imposed by the Agreement or any unmet requirements set forth in a written notification
from City
ARTICLE VIII. MISCELLANEOUS PROVISIONS
A. Contract Administration. The City Manager or designee shall administer this contract on behalf of the
City. The Executive Director of South Bay Community Services shall administer this contract on behalf of the
Contractor. Within a reasonable time after the City makes a request, Contractor shall give the City progress
reports or other documentation as required by the City’s Contract Administrator to audit Contractor’s
performance of this contract.
B. Term. This contract shall commence when executed by the parties and shall continue in effect until
terminated as provided herein or until Contractor has carried out all its obligations under the contract.
Services of the Contractor shall start on the 1st day of July, 2018 and end on the 30th day of June 2019. With
City approval, the term of this contract and the provisions herein shall be extended to cover any additional
time period during which the Contractor remains in control of ESG funds.
C. Actions on Behalf of the City. Except as City may specify in writing, Contractor shall have no authority,
express or implied, to act on behalf of City in any capacity whatsoever, as an agent or otherwise. Contractor
shall have no authority, express or implied, to bind City or its members, agents, or employees, to any
obligation whatsoever, unless expressly provided in this Agreement.
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D. No Obligations to Third Parties. In connection with the Project, Contractor agrees and shall require that
it’s agents, employees, subcontractors agree that the City shall not be responsible for any obligations or
liabilities to any third party, including its agents, employees, subcontractors, or other person or entity that is
not a party to this Agreement. Notwithstanding that the City may have concurred in or approved any
solicitation, subcontract, or third party contract at any tier, neither City shall have any obligations or liabilities
to such other party.
E. Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out
of this contract, against the City unless a claim has first been presented in writing and filed with the City and
acted upon by the City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista
Municipal Code, as same may from time to time be amended, the provisions of which are incorporated by
this reference as if fully set forth herein, and such policies and procedures used by the City in the
implementation of same. Upon request by City, Contractor shall meet and confer in good faith with City for
the purpose of resolving any dispute over the terms of this Agreement.
F. Attorney’s Fees. Should a dispute arising out of this contract result in litigation, it is agreed that the
prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable
attorney's fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is
awarded substantially the relief sought.
G. Capacity of Parties. Each signatory and party hereto hereby warrants and represents to the other party
that it has legal authority and capacity and direction from its principal to enter into this contract, and that all
resolutions or other actions have been taken so as to enable it to enter into this contract.
H. Governing Law/Venue. This contract shall be governed by and construed in accordance with the laws of
the State of California. Any action arising under or relating to this contract shall be brought only in the federal
or state courts located in San Diego County, State of California, and if applicable, the City of Chula Vista, or as
close thereto as possible. Venue, to the extent permitted by law, for this contract, and performance
hereunder, shall be the City of Chula Vista.
I. Audit Costs. Contractor shall reimburse City for all costs incurred to investigate and audit Contractor’s
performance of its duties under the Contract if Contractor is subsequently found to have violated the terms
of the contract. Reimbursement shall include all direct and indirect expenditures incurred to conduct the
investigation or audit. City may deduct all such costs from any amount due Contractor under this contract.
J. Precedence. This contract constitutes the entire agreement of the parties and supersedes any previous
oral or written understandings or contracts related to the matters covered herein. This contract may not be
modified except by written amendment executed by each party.
K. Notice. Any notice or notices required or permitted to be given pursuant to this contract shall be
personally served by the party giving notice or shall be served by certified mail. Notices shall be sufficient if
personally served on or if sent by certified mail, postage prepaid, addressed to:
Contractor: City:
South Bay Community Services
Executive Director and CEO
430 F Street
Chula Vista, CA 91910
City of Chula Vista
Housing Manager
276 Fourth Avenue
Chula Vista, CA 91910
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SIGNATURE PAGE
IN WITNESS WHEREOF, the Contractor and City have executed this contract as of the date first written above.
CITY OF CHULA VISTA
Gary Halbert,
City Manager, City of Chula Vista
APPROVED AS TO FORM
Glen R. Googins
City Attorney
SOUTH BAY COMMUNITY SERVICES
Kathryn Lembo, Executive Director and CEO
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AGREEMENT
BY AND BETWEEN THE
CITY OF CHULA VISTA
AND
________________________________________
FOR MANAGEMENT AND IMPLEMENTATION OF
HOME INVESTMENT PARTNERSHIP ACT PROGRAM
COMMUNTY HOUSING DEVELOPMENT ORGANIZATION SET ASIDE FUNDS
This Contract Number ____________ by and between ______________________
(hereinafter referred to as (“Community Housing Development Organization”) and the
City of Chula Vista (hereinafter referred to as “City”) is effective on
____________________ (“Effective Date”).
W I T N E S S E T H:
WHEREAS, the City of Chula Vista has received federal funding pursuant to the
HOME Investment Partnership Program; hereinafter referred to as “HOME” to expand
the supply of decent, safe, sanitary, and affordable housing; and
WHEREAS, the financial assistance to Community Housing Development
Organizations (CHDOs) is a permitted use of HOME funds; and
WHEREAS, the City, is authorized to apply for and accept HOME funds; and
WHEREAS, City incorporated the use of HOME funds described in Attachment
“A” hereof (hereinafter referred to as the “Project”) into the City’s Community
Development Block Grant/HOME Investment Partnership/Emergency Shelter Grant
Annual Funding Plan Amendment that was submitted to the U.S. Department of
Housing and Urban Development (HUD); and
WHEREAS, HUD has approved the City Annual Funding Plan Amendment for the
Home Investment Partnership Act Program; and
WHEREAS, it is the desire of the CHDO and the City that the Project be
implemented by the Developer; and
WHEREAS, the CHDO shall undertake the same obligations to the City with
respect to the Project in the City’s aforesaid Amendment to the Annual Funding Plan
for participation in the HOME Investment Partnership Act Program;
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. WORK TO BE PERFORMED: CHDO shall implement the scope of work (“Scope of
Work”) described in Attachment A, hereof fully and in accordance with the
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terms of the Annual Funding Plan Amendment approved by the City and
submitted to HUD in application for HOME funds to carry out the Project and the
Certifications which were submitted concurrently with the Annual Funding Plan
Amendment. The Annual Funding Plan and Certifications form is hereby
incorporated by reference into this contract fully as if set forth herein.
CHDO shall also undertake the same obligations to the City that the City has
undertaken to HUD pursuant to said Annual Funding Plan Amendment and
Certifications. The obligations undertaken by Developer include, but are not
limited to, the obligation as applicable comply with each of the following as
may be amended from time to time and be amended for specific HOME
funded activities described in 2013 HOME Final Rule (24 CFR Part 92.300-92.303):
a. HUD regulations relating to Home Investment Partnership Act program (24
CFR 92);
b. The regulations in 24 CFR Part 58 specifying other provisions of the law that
further the purposes of the National Environmental Policy Act of 1969 and
the procedures by which grantees must fulfill their environmental
responsibilities;
c. Title VI of the Civil Rights Act of 1964 (42 USC § 2000d); Title VII of the Civil
Rights Act of 1964 (Public Law 88-352); Title VIII of the Civil Rights Act of 1968
(Fair Housing Act, 42 USC § 3601, et seq.); Section 109 of the Housing and
Community Development Act of 1974; Executive Order 11246, as amended
(equal employment opportunity); Executive Order 11063 (non-
discrimination), as amended by Executive Order 12259; and any HUD
regulations heretofore issued or to be issued to implement these authorities
relating to civil rights;
d. Section 3 of the Housing and Urban Development Act of 1968, as
amended, 12 U.S.C. 1701u.
All section 3 covered contracts shall include the following clause (referred
to as the “section 3 clause”):
i. The work to be performed under this contract is subject to the
requirements of section 3 of the Housing and Urban Development Act of
1968, as amended, 12 U.S.C. 1701u (section 3). The purpose of section 3
is to ensure that employment and other economic opportunities
generated by HUD assistance or HUD-assisted projects covered by
section 3, shall, to the greatest extent feasible, be directed to low- and
very low-income persons, particularly persons who are recipients of HUD
assistance for housing.
ii. The parties to this contract agree to comply with HUD's regulations in 24
CFR part 135, which implement section 3. As evidenced by their
execution of this contract, the parties to this contract certify that they
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are under no contractual or other impediment that would prevent them
from complying with the part 135 regulations.
iii. CHDO agrees to send to each labor organization or representative of
workers with which the (CHDO has a collective bargaining agreement
or other understanding, if any, a notice advising the labor organization
or workers' representative of the Developer's commitments under this
section 3 clause, and will post copies of the notice in conspicuous
places at the work site where both employees and applicants for
training and employment positions can see the notice. The notice shall
describe the section 3 preference, shall set forth minimum number and
job titles subject to hire, availability of apprenticeship and training
positions, the qualifications for each; and the name and location of the
person(s) taking applications for each of the positions; and the
anticipated date the work shall begin.
iv. The CHDO agrees to include this section 3 clause in every subcontract
subject to compliance with regulations in 24 CFR part 135, and agrees to
take appropriate action, as provided in an applicable provision of the
subcontract or in this section 3 clause, upon a finding that the sub-
contractor is in violation of the regulations in 24 CFR part 135. The CHDO
will not subcontract with any sub-contractor where the Developer has
notice or knowledge that the sub contractor has been found in violation
of the regulations in 24 CFR part 135.
v. The CHDO will certify that any vacant employment positions, including
training positions, that are filled (1) after the CHDO is selected but before
the contract is executed, and (2) with persons other than those to whom
the regulations of 24 CFR part 135 require employment opportunities to
be directed, were not filled to circumvent the CHDO’s obligations under
24 CFR part 135.
vi. Noncompliance with HUD's regulations in 24 CFR part 135 may result in
sanctions, termination of this contract for default, and debarment or
suspension from future HUD assisted contracts.
vii. With respect to work performed in connection with section 3 covered
Indian housing assistance, section 7(b) of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 450e) also applies to the work
to be performed under this contract. Section 7(b) requires that to the
greatest extent feasible (i) preference and opportunities for training and
employment shall be given to Indians, and (ii) preference in the award
of contracts and subcontracts shall be given to Indian organizations and
Indian-owned Economic Enterprises. Parties to this contract that are
subject to the provisions of section 3 and section 7(b) agree to comply
with section 3 to the maximum extent feasible, but not in derogation of
compliance with section 7(b).
e. The Uniform Relocation Assistance and Real Property Acquisition Policies Act
of 1979, 42 USC § 4601, et seq., and regulations adopted to implement that
Act in 49 CFR Part 24; except as those provisions are modified by the Notice
for the NSP Program published by HUD.
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f. Office of Management and Budget (“OMB”) Cost Principles have been
established for non-profits through 2 CFR part 200, subpart E, entitled
“Cost Principles for Non-Profit Organizations”; 2 CFR part 230 entitled
“Cost Principles for Non-Profit Organizations” (Circular A–122);
g. 24 CFR 221(d) Limits;
h. The following laws and regulations relating to preservation of historic places:
National Historic Preservation Act of 1966 (Public Law 89-665); the Historical
and Archaeological Preservation Act of 1974 (Public Law 93-291); and
Executive Order 11593;
i. Labor standards provisions apply to any contract for the construction of 12
or more HOME-assisted units. (Section 286, National Affordable Housing Act
of 1990, as amended.)
j. Labor Code section 1771 concerning prevailing wages; if applicable
k. The Hatch Act relating to the conduct of political activities (5 U.S.C. § 1501,
et seq.);
l. The Flood Disaster Protection Act of 1973 (42 U.S.C. § 4001, et seq., and the
implementing regulations in 44 CFR Parts 59-78);
m. The Rehabilitation Act of 1973 (Public Law 93-112) as amended, including
Section 504 which relates to nondiscrimination in federal programs and HUD
24 CFR Part 8;
n. The Clean Air Act (42 U.S.C. § 7401, et seq.) and the Federal Water Pollution
Control Act, as amended (33 U.S.C. § 1251, et seq.) and the regulations
adopted pursuant thereto (40 CFR Part 6);
o. The Drug-Free Workplace Act of 1988 (Public Law 100-690);
p. The Lead-Based Paint Poisoning Prevention Act, the Residential Lead-Based
Paint Hazard Reduction Act of 1992, and implementing regulations at 24
CFR Part 35;
q. No member, officer or employee of the CHDO, or its designee or agents, no
member of the governing body of the locality in which the program is
situated, and no other public official of such locality or localities who
exercises any functions or responsibilities with respect to the program during
his/her tenure or for one year thereafter, shall have any interest, direct, or
indirect, in any contract or subcontract, or the process thereof, for work to
be performed in connection with the program assisted under the Grant,
and that it shall incorporate, or cause to be incorporated, in all such
contracts or subcontracts a provision prohibiting such interest pursuant to
the purposes of this certification.
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r. The CHDO certifies, that in accordance with Section 319 of Public Law 101-
121, to the best of his or her knowledge and belief that:
i. No federal appropriated funds have been paid or will be paid, by or on
behalf of the undersigned, to any person for influencing or attempting
to influence an officer or employee of any agency, a member of
Congress, an officer or employee of Congress, in connection with the
awarding of any federal contract, the making of any federal grant, the
making of any federal loan, the entering into of any cooperative
contract, and the extension, continuation, renewals, amendment, or
modifications of any federal contract, grant loan, or cooperative
contract.
ii. If any funds other than federal appropriated funds have been paid or
will be paid to any person for influencing or attempting to influence an
officer or employee of any agency, a member of Congress, or an
employee of a member of Congress in connection with this federal
contract, grant, loan, or cooperative contract, the undersigned shall
complete and submit Standard Form-LLL, “Disclosure Form to Report
Lobbying”, in accordance with its instructions.
s. The Architectural Barriers Act of 1968 (42 U.S.C. § 4151, et seq.);
t. The Americans with Disabilities Act (42 U.S.C. § 12101); and
u. The bonding requirements described in 24 CFR Part 85.36 required for
construction or facility improvement contracts or subcontracts that exceed
the simplified acquisition threshold (defined at 41 U.S.C. 403(11)). These
requirements are further described in Attachment A, which is attached
hereto and incorporated by reference.
v. CHDO shall hold City harmless and indemnify City against any harm that it
may suffer with respect to HUD on account of any failure on the part of the
CHDO to comply with the requirements of any such obligation.
2. COMPLIANCE WITH LAWS: CHDO shall comply with all applicable local, state,
and federal laws, regulations, ordinances, and City Policies when performing
the work required by this Contract.
3. COMPENSATION: City shall reimburse CHDO up to 10% for a CHDO (Developer)
fee for the portfolio of projects (rental units) assistance and with reasonable
gap financing expenses it incurs for work performed under this Contract. Total
reimbursement (developer fee and gap financing) shall not exceed
$________________. CHDO shall not submit claims to the City nor shall City
reimburse Developer CHDO for costs for which Developer CHDO is reimbursed
from a source other than the funds allocated for work under this Contract.
4. COMPENSATION SCHEDULE: City shall pay CHDO monthly progress payments
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upon submittal by CHDO of a certified statement of actual expenditures
incurred, provided, however, that not more than 90% of the total agreed
compensation will be paid during the performance of this Contract. The
balance due shall be paid upon certification by CHDO that all of the required
services have been completed. Payment by City is not to be construed as final
in the event HUD disallows reimbursement for the project or any portion thereof.
The 10% retention will not apply to acquisition or service contracts.
5. INDIRECT COSTS: If indirect costs are charged, the CHDO will develop an
indirect cost allocation plan for determining the appropriate CHDO’s share of
administrative costs and shall submit such plan to the City for approval.
6. EXPENDITURE STANDARD: To insure effective administration and performance of
approved Neighborhood Stabilization Program projects and to meet HUD
performance standards, CHDO shall demonstrate reasonable progress on
implementation of the project, expending all contracted funds within the term
of the contract. In the event all funds are not expended within the term period,
the City shall notify the Developer (CHDO) of the expenditure deficiency.
CHDO will have a total of 30 days from the date of the City’s written notification
to correct the deficiency. If the deficiency is not corrected within that time,
Developer (CHDO) agrees that the City may reallocate the amount of the
expenditure deficiency.
7. TERM: This contract shall commence when executed by the parties and shall
continue in effect until terminated as provided herein or until Developer has
carried out all its obligations under the contract. Services of the Developer
shall start on the 1st day of July 2017 and end on the 30th day of June of 2018.
With City approval, the term of this Agreement and the provisions herein shall
be extended to cover any additional time period during which the Developer
remains in control of HOME CHDO Set Aside funds.
8. TERMINATION FOR CONVENIENCE: The City may permit the agreement to be
terminated for convenience in accordance with 24 CFR 85.44.
9. AUTOMATIC TERMINATION: This Contract shall terminate at the discretion of the
City if the United States Government terminates or recaptures the Home
Investment Partnership Act Program or terminates the Project that is the subject
of this Contract.
10. TERMINATION OF CONTRACT FOR CAUSE: Developer and City recognize that
the City is the governmental entity which executed the grant agreement
received pursuant to the City’s application and that City is responsible for the
proper performance of the Project. If Developer fails to fulfill in a timely and
proper manner its obligations under this Contract to undertake, conduct or
perform the Project identified in this Contract, or if Developer violates any state
laws or regulations or local ordinances or regulations applicable to
implementation of the Project, or if Developer violates any provisions of this
contract, City shall have the right to terminate this contract by giving at least
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five days written notice to Developer of the effective date of termination.
Even if City terminates the Contract, Developer shall remain liable to City for all
damages sustained by City due to Developer’s failure to fulfill any provisions of
this Contract, and City may withhold any reimbursement payments form
Developer for the purpose of set-off until the exact amount of damages due to
City from Developer is determined. Developer hereby expressly waives any
and all claims for damages for compensation arising under this contract
except as set forth in this section in the event of such termination. The City
may also, in lieu of termination and at its discretion, take any action, as stated in
24 CFR 85.43, subdivision (a), sections 1 to 5, to enforce this Agreement.
11. CONTRACT ADMINISTRATION: The Housing Manager of the City of Chula Vista
shall administer this Contract on behalf of the City.
__________________________shall administer this contract on behalf of the
Developer. Within a reasonable time after the City makes a request, Developer
shall give the City progress reports or other documentation as required by the
City’s Administrator to audit Developer’s performance of this Contract.
12. RECORDS AND REPORTS: The Developer shall maintain records and make such
reports as required by the City of Chula Vista to, but not limited to, enable the
City to analyze Developer’s project. All records of the Developer related to this
Contract or work performed under the Contract shall be open and available
for inspection by HUD and/or City monitors and auditors during normal business
hours.
13. RETENTION: The Developer shall retain all financial records, supporting
documents, statistical records, and all other records pertinent to the Agreement
for a period of five (5) years. The retention period begins on the date of the
submission of the Grantee’s annual performance and evaluation report to HUD
in which the activities assisted under the Agreement are reported on for the
final time. Notwithstanding the above, if there is litigation, claims, audits,
negotiations or other actions that involve any of the records cited and that
have started before the expiration of the five-year period, then such records
must be retained until completion of the actions and resolution of all issues, or
the expiration of the five-year period, whichever occurs later.
14. DATA: The Developer shall maintain data demonstrating eligibility (low-
moderate locations) for services provided. Such data shall include, but not be
limited to exact location of the work performed, and a description of service
provided. Such information shall be made available to City monitors or their
designees for review upon request.
15. DISCLOSURE: The Developer understands that client information collected
under this contract is private and the use or disclosure of such information,
when not directly connected with the administration of the City’s or
Developer’s responsibilities with respect to services provided under this
contract, is prohibited by the state of Federal law privacy laws unless written
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consent is obtained from such person receiving service and, in the case of a
minor, that of a responsible parent/guardian.
16. QUARTERLY REPORTS/ANNUAL REPORT: Developer shall provide the City with a
quarterly report, submitted no later than 15 days after the last day of the
previous quarter, which includes a narrative of the services provided, progress
towards meeting the timeline goals stated in the contract, and an itemized
accounting of the expenditures of HOME funds during the previous quarter.
Failure to submit quarterly reports in a timely manner will result in withholding of
HOME funds until the report has been submitted. Quarterly Performance
Reports are due October 15 (1st Quarter), January 15 (2nd Quarter), April 15, (3rd
Quarter) and July 15 (4th Quarter). The Annual Performance Report will also be
due July 15.
17. INDEMNIFICATION: City shall not be liable for, and Developer shall defend,
indemnify, and hold the City, its officers, agents, employees and volunteers
harmless from and against any and all claims, deductibles, self-insured
retentions, demands, liability, judgments, awards, fines, mechanics’ liens or
other liens, labor disputes, losses, damages, expenses, charges or costs of any
kind or character, including attorneys’ fees and court costs by this Contract
arising either directly or indirectly from any act, error, omission or negligence of
Developer or its officers, employees, agents, Developers, licensees or servants,
contractors or subcontractors, including without limitation, claims caused by
the concurrent act, error, omission or negligence, whether active or passive, of
City, and/or its agents, officers, employees or volunteers. However, Developer
shall have no obligation to defend or indemnify City from a claim if it is
determined by a court of competent jurisdiction that such claim was caused by
the sole negligence or willful misconduct of City or its agents or employees.
Developer and its successors, assigns, and guarantors, if any, jointly and
severally agree to indemnify, defend (with counsel selected by City) reimburse
and hold City and its officers, employees and agents harmless from any claims,
judgments, damages, penalties, fines, costs, liabilities (including sums paid in
settlement of claims) or loss, including attorneys’ fees, consultant’s fees, and
experts’ fees which arise during or after the contract term for any losses
incurred in connection with investigation of site conditions, or any cleanup,
remedial, removal or restoration work required by any hazardous materials laws
because of the presence of hazardous materials, in the soil, ground water or
soil vapors on the premises, and the release or discharge of hazardous
materials by Developer during the course of any alteration or improvements of
the Premises by Developer, unless hazardous materials are present solely as a
result of the gross negligence or willful misconduct of City, its officers,
employees or agents. The indemnification provided by this section shall also
specifically cover costs incurred in responding to:
a. Hazardous materials present or suspected to be present in the soil, ground
water to or under the Property before the commencement date;
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b. Hazardous materials that migrate, flow, percolate, diffuse, or in any way
move on to or under the Property following the commencement date;
c. Hazardous materials present on or under the Property as a result of any
discharge, release, dumping, spilling (accidental or otherwise), onto the
Property during or after the term of this Contract by any person,
corporation, partnership or entity other than City.
Funding from this program is a result of a Federal Grant, should Federal funding
be terminated for any reason, City is not liable for any consequence of any
type resulting directly or indirectly from the termination of federal funding and
Developer agrees, in addition to any other indemnification provision set forth in
this agreement, to indemnify, hold harmless, and defend the City against any
claim, cause of action, or any form of liability as a result of, directly or indirectly,
funding termination.
The foregoing indemnities shall survive the expiration or termination of the
contract any or any transfer of all or any portion of the Premises, or of any
interest in this Contract and shall be governed by the laws of the State of
California.
18. AUDIT COSTS: Developer shall reimburse City for all costs incurred to investigate
and audit Developer’s performance of its duties under the Contract if
Developer is subsequently found to have violated the terms of the Contract.
Reimbursement shall include all direct and indirect expenditures incurred to
conduct the investigation or audit. City may deduct all such costs from any
amount due Developer under this Contract.
19. ENTIRE AGREEMENT: This Contract and referenced Attachments and Exhibits
constitutes the entire agreement of the parties and supersedes any previous
oral or written understandings or contracts related to the matters covered
herein.
20. MODIFICATION. This Contract may not be modified except by written
amendment executed by each party.
21. ACKNOWLEDGEMENT OF FUNDING: Developer shall identify the City of Chula
Vista as the source of funding, or, if applicable, one of the sources of funding in
public announcements that are made regarding the Project.
Acknowledgement of the City’s funding roles, for example, should be included
in publicity materials related to the Project. In addition, Developer agrees that
the City shall be apprised of any special events linked to the Project so that a
review can be made on what role, if any, the City would assume.
22. INSURANCE: Developer agrees to comply with the insurance requirement set
forth in Attachment “B” and/or any additional insurance requirements
requested by the City, as the City deems appropriate. Failure to acquire and
maintain the required insurance is a basis to take an enforcement action, or
CHDO Developer Agreement Page # 9
2018-05-15 Agenda Packet Page 351
terminate this agreement.
23. NO WAIVER: No failure, inaction, neglect or delay by City in exercising any of its
rights under this Contract shall operate as a waiver, forfeiture or abandonment
of such rights or any other rights under this Contract.
24. NOTICE: Any notice or notices required or permitted to be given pursuant to
this Contract shall be personally served by the party giving notice or shall be
served by certified mail. Notices shall be sufficient if personally served on or if
sent by certified mail, postage prepaid, addressed to:
Developer/Community Housing
Development Organization:
City:
City of Chula Vista
Housing Manager
276 Fourth Avenue
Chula Vista, CA 91910
CHDO Developer Agreement Page # 10
2018-05-15 Agenda Packet Page 352
IN WITNESS WHEREOF, the Parties have executed this contract as of the date first
written above.
CITY OF CHULA VISTA
Gary Halbert
City Manager, City of Chula Vista
APPROVED AS TO FORM
Glen Goggins
City Attorney
ATTEST
City Clerk
DEVELOPER/CHDO
Attachment A: Scope of Work
Attachment B: Insurance Requirements
Attachment C: Income Limits
Attachment D: Disclosure Form
Exhibit 1: Deed of Trust
Exhibit 2: Note Secured by Deed of Trust
Exhibit 3: Declaration of Covenants, Conditions, and Restrictions (HOME Program)
_________________________________ (DEVELOPER/CHDO) has a certain project to be
implemented with HOME Investment Partnership Act Program Funds (HOME). The work
to be accomplished includes the following:
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Developer/CHDO:
• Shall utilize HOME Investment Partnership Act Program (HOME) CHDO Set Aside
funds for purchase and rehabilitation of CHDO Set Aside funds foreclosed and
abandoned properties for use of permanent rental housing and provide project
management and oversight of services for certain aspects of the HOME,
including management and maintenance of affordable rental properties,
hereinafter referred to as “Project(s).”
• Shall perform a subsidy layering analysis to determine financial feasibility of the
project factoring in affordability period and rent levels as described in the City
Amended Annual Funding Plan.
• If available and timely, obtain additional financing to finance the acquisition
and/or rehabilitation.
• HOME funds will be available for financial assistance up to the 221(d)(3) limit.
• Submit information of each proposed property to be acquired with HOME funds
for City review and approval prior to acquisition.
• Shall negotiate a purchase price in accordance with HOME guidelines and the
Uniform Relocation Act (49 CFR Part 24), and shall perform due diligence to
ensure that all properties acquired have clear marketable title.
• Properties purchased, rehabilitated under this agreement may only be used to
benefit eligible households earning less than fifty 50% (percent) or 60% of the
Area Median Income (AMI) and at Home Investment Partnerships Program rent
levels as defined in 24 CFR Part 92.252.
• The cost of acquisition and/or rehabilitation of properties purchased under the
HOME are eligible expenses under this agreement.
• Shall carry out the Project under this Agreement in accordance with the
guidelines and regulations of the HOME Program and use of CHDO Set Aside
funds.
• Shall use the City of Chula Rehabilitation Standards and at a minimum comply
with applicable laws, codes, and other requirements relating to health and
safety, quality, and habitability in order to rent such homes and properties.
• Shall obtain any needed permits from the City of Chula Vista.
• Shall ensure that all rehabilitation costs meet HUD’s reasonable costs standards.
• Check the Excluded Parties List to ensure Contractors are not debarred or
suspended.
• Developer shall encumber the title to the HOME eligible affordable housing
project(s) using the City’s Deed of Trust (Exhibit 1), Note Secured By Deed of
Trust (Exhibit 2), and Declarations of Covenants, Conditions and Restrictions
(Exhibit 3) to be recorded at time of escrow securing the City’s financial and
property interest in the project(s) and affordability period (minimum 55 years, 15
year minimum HOME Affordability Period).
• With regard to the HOME eligible affordable housing project(s), Developer shall
execute and use, be bound by and abide by the terms of, and cause to be
encumbered the title of property acquired under the Project(s) as stated in the
attached City’s Deed of Trust (Exhibit 1), Note Secured By Deed of Trust (Exhibit
2), and Declarations of Covenants, Conditions and Restrictions (Exhibit 3) to be
recorded at time of escrow securing the City’s financial interest in the project(s)
CHDO Developer Agreement Page # 12
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and affordability period (minimum 55 years, 15 year minimum HOME
Affordability Period). Exhibits 1 to 3 are hereby incorporated by reference into
this agreement.
City:
• The City will provide Developer with a reasonable developer fee (not to exceed
10% of total portfolio of assisted projects), related to HOME-assisted housing
rehabilitation or construction activities, at a level approved by the City.
• The City shall provide Developer with Deed of Trust (Exhibit 1), Promissory Note
(Exhibit 2), and Covenant Agreement (Exhibit 3) to be recorded at time of
escrow securing the City’s financial interest in the project(s) and affordability
period (minimum 55 years, 15 Year Minimum HOME Affordability Period).
• The City shall provide the Voluntary Acquisition form to acquire properties using
HOME funds.
• City shall provide technical assistance to Developer to ensure HOME program is
carried out successfully and in compliance with HUD regulations.
The Scope of Services outlined above shall not be altered without written approval of
the City.
Performance Measurement: Create a minimum of 3 rental unit serving households
earning less than 60% of the Area Median Income for the City of Chula Vista.
HOME Income Requirements: Very Low Income Residents at or below 50 (%) or
60(%) of the Area Median Income
A. TIME SCHEDULE: DEVELOPER will make all good faith and reasonable efforts to
fullfill the project by June 30, 2019, or earlier.
B. BUDGET: DEVELOPER shall make all good faith and reasonable efforts to
complete the work under this Contract within the following budget. In no case
shall DEVELOPER be entitled to, nor shall City reimburse DEVELOPER, more than
10% developer fee and not more than $_________________ for work performed
under this Contract.
In addition to the required quarterly reports identified in Section 12 of this CONTRACT,
the Developer shall document all clients served to ensure that at least 51 percent of
those served are at or below 50 percent of the Area Median Income as established by
the U.S. Department of Housing and Urban Development (HUD). This information is to
be collected and compiled semi-annually and submitted to the City each January 15
and July 15 during the affordability period and shall be submitted to the City of Chula
Vista Development Services Department – Housing Division upon receipt of a written
request and at the time of any monitoring of project records.
Developer shall also submit to the City in a timely manner other reports as
requested/required by HUD and/or the City including, but not limited to
Contractor/Subcontractor: Semi-Annual Labor Standards Enforcement Reports (HUD-
CHDO Developer Agreement Page # 13
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4710), Annual Minority Business Enterprise Activity Reports (HUD-2516), Section 3 Reports
(HUD-60002) and provide, as requested by HUD and/or the City, information necessary
to prepare the Grantee Consolidated Annual Performance and Evaluation Report
(CAPER), Consolidated Plan, Annual Plan and other such reports and/or plans.
CHDO Developer Agreement Page # 14
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ATTACHMENT “B”
INSURANCE REQUIREMENTS
Contractor/Developer must procure insurance against claims for injuries to persons or damages
to property that may arise from or in connection with the performance of the work under the
contract and the results of that work by the Developer/Contractor, his agents, representatives,
employees or subcontractors and provide documentation of same prior to commencement or
work. The insurance must be maintained for the duration of the contract.
Minimum Scope of Insurance
Coverage must be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence Form
CG0001)
2. Insurance Services Office Form Number CA 0001 covering Automobile Liability, code1 (any
auto).
3. Workers’ Compensation insurance as required by the State of California and Employer’s
Liability Insurance.
Minimum Limits of Insurance
Developer/Contractor must maintain limits no less than:
1. General Liability:
(Including operations,
products and completed
operations, as applicable.)
$1,000,000 per occurrence for bodily injury, personal injury and
property damage. If Commercial General Liability insurance
with a general aggregate limit is used, either the general
aggregate limit must apply separately to this project/location
or the general aggregate limit must be twice the required
occurrence limit.
2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.
3. Workers’ Compensation
Employer’s Liability:
Statutory
$1,000,000 each accident
$1,000,000 disease-policy limit
$1,000,000 disease-each employee
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. At
the option of the City, either the insurer will reduce or eliminate such deductibles or self-insured
retentions as they pertain to the City, its officers, officials, employees and volunteers; or the
Developer/Contractor will provide a financial guarantee satisfactory to the City guaranteeing
payment of losses and related investigations, claim administration, and defense expenses.
Other Insurance Provisions
The general liability, automobile liability, and where appropriate, the worker’s compensation
policies are to contain, or be endorsed to contain, the following provisions:
1. The City of Chula Vista, its officers, officials, employees, agents, and volunteers are to
be named as additional insureds with respect to liability arising out of automobiles
owned, leased, hired or borrowed by or on behalf of the Developer/contractor, where
applicable, and, with respect to liability arising out of work or operations performed by
or on behalf of the Developer/contractor including providing materials, parts or
equipment furnished in connection with such work or operations. The general liability
additional insured coverage must be provided in the form of an endorsement to the
Attachment “B” – Insurance Requirements
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2018-05-15 Agenda Packet Page 357
Developer’s/contractor’s insurance using ISO CG 2010 (11/85) or its equivalent.
Specifically, the endorsement must not exclude Products / Completed Operations
coverage.
2. The Developer’s/contractor’s insurance coverage must be primary insurance as it
pertains to the City, its officers, officials, employees, agents, and volunteers. Any
insurance or self-insurance maintained by the City, its officers, officials, employees, or
volunteers is wholly separate from the insurance of the Developer/contractor and in no
way relieves the Developer/contractor from its responsibility to provide insurance.
3. Each insurance policy required by this clause must be endorsed to state that coverage
will not be canceled by either party, except after thirty (30) days’ prior written notice to
the City by certified mail, return receipt requested.
4. Coverage shall not extend to any indemnity coverage for the active negligence of the
additional insured in any case where an agreement to indemnify the additional insured
would be invalid under Subdivision (b) of Section 2782 of the Civil Code.
5. Developers/Contractor’s insurer will provide a Waiver of Subrogation in favor of the City
for each required policy providing coverage during the life of this contract.
Acceptability of Insurers
Insurance is to be placed with licensed insurers admitted to transact business in the State of
California with a current A.M. Best’s rating of no less than A V. If insurance is placed with a
surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines
Insurers (LESLI) with a current A.M. Best’s rating of no less than A X. Exception may be made for
the State Compensation Fund when not specifically rated.
Verification of Coverage
Developer/Contractor shall furnish the City with original certificates and amendatory
endorsements effecting coverage required by this clause. The endorsements should be on
insurance industry forms, provided those endorsements conform to the contract requirements.
All certificates and endorsements are to be received and approved by the City before work
commences. The City reserves the right to require, at any time, complete, certified copies of
all required insurance policies, including endorsements evidencing the coverage required by
these specifications.
Subcontractors
Developer/Contractor must include all subcontractors as insureds under its policies or furnish
separate certificates and endorsements for each subcontractor. All coverage for
subcontractors are subject to all of the requirements included in these specifications.
Attachment “B” – Insurance Requirements
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Bonding Requirements
Prior to commencement of rehabilitation, Developer shall file with the City on the
approved forms, the surety bonds in the amounts and for the purposes noted below.
The surety must posses a minimum rating from A.M. Best Company of A-VII. and be
listed as an acceptable surety on federal bonds by the United States Department of
the Treasury. Developer shall pay all premiums and costs thereof and incidental
thereto, as security for payment of persons named in California Civil Code Section
3181 or amounts due under Unemployment Insurance Code with respect to Work or
Labor performed by any such claimant. All alterations, time extensions, extra and
additional work, and other changes authorized by the Specifications, or any part of
the Contract, may be made without securing consent of the surety or sureties on the
contract bonds. Each bond shall be signed by both Developer and the sureties.
Should any surety or sureties be deemed unsatisfactory at any time by the City, notice
will be given Developer to that effect, and Developer shall forthwith substitute a new
surety or sureties satisfactory to the Developer. No further payment shall be deemed
due or will be made under the Contract until the new sureties qualify and are
accepted by the City.
i. A bid guarantee from each bidder equivalent to five percent of
the bid price. The ``bid guarantee'' shall consist of a firm
commitment such as a bid bond, certified check, or other
negotiable instrument accompanying a bid as assurance that the
bidder will, upon acceptance of his bid, execute such
contractual documents as may be required within the time
specified.
ii. A performance bond on the part of the developer for 100
percent of the contract price, as determined from the prices in
the bid form, and shall insure the faithful performance by
developer of all work under the Contract. It shall also insure the
replacing of, or making acceptable, any defective materials or
faulty workmanship.
iii. A payment bond on the part of the contractor for 100 percent
of the contract price, as determined from the prices in the bid
form, and shall inure to the benefit of persons performing labor or
furnishing materials in connection with the work of the proposed
Contract. This bond shall be maintained in full force and effect
until all work under the Contract is completed and accepted by
the City, and until all claims for materials and labor have been
paid.
Attachment “B” – Insurance Requirements
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ATTACHMENT “C”
2017 San Diego Income Limits
Household Size 1 2 3 4 5 6 7 8 30% LIMITS 19100 21800 24550 27250 29450 31650 33800 36000 50% VERY LOW INCOME 31850 36400 40950 45450 49100 52750 56400 60000 60% LIMITS 38220 43680 49140 54540 58920 63300 67680 72000 LOW INCOME 50950 58200 65500 72750 78600 84400 90250 96050
Attachment “C” – Income Limits
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ATTACHMENT “D”
Disclosure Statement
Pursuant to Council Policy 101-01, prior to any action upon matters that will require
discretionary action by the Council, Planning Commission and all other official bodies of
the City, a statement of disclosure of certain ownership of financial interests, payments,
or campaign contributions for a City of Chula Vista election must be filed. The following
information must be disclosed:
1. List the names of all persons having a financial interest in the project that is
the subject of the application or the contract. e.g., owner, applicant,
contractor, subcontractor, material supplier.
2. If any person* identified pursuant to (1) above is a corporation or partnership,
list the names of all individuals with a $2000 investment in the business
(corporation/partnership) entity.
3. If any person* identified pursuant to (1) above is a non-profit organization or
trust, list the names of any person serving as director of the non-profit
organization or as trustee or beneficiary or trustor of the trust.
4. Please identify every person, including any agents, employees, consultants,
or independent contractors you have assigned to represent you before the
City in this matter.
5. Has any person* associated with this contract had any financial dealings with
an official** of the City of Chula Vista as it relates to this contract within the
past 12 months? Yes____ No____
If Yes, briefly describe the nature of the financial interest the official** may
have in this contract.
Attachment “D” – Disclosure Form
Page 1 of 2
2018-05-15 Agenda Packet Page 361
6. Have you made a contribution of more than $250 within the past twelve (12)
months to a current member of the Chula Vista City Council? No___ Yes___ If
yes, which Council member?
7. Have you provided more than $340 (or an item of equivalent) to an official**
of the City of Chula Vista in the past twelve (12) months? (This includes being
a source of income, money to retire a legal debt, gift, loan, etc.)
Yes______ No_____
If Yes, which official** and what was the nature of item provided?
Date:_______________
Signature of Developer
Print or type name of Developer
* Person is defined as: any individual, firm, co-partnership, joint venture,
association, social club, fraternal organization, corporation, estate, trust,
receiver, syndicate, any other county, city, municipality, district, or other political
subdivision, -or any other group or combination acting as a unit.
** Official includes, but is not limited to: Mayor, Council member, Planning
Commissioner, Member of a board, commission, or committee of the City,
employee, or staff members.
Attachment “D” – Disclosure Form
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RESOLUTION NO. 2018-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA (1) APPROVING THE 2018/2019 U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT ANNUAL ACTION PLAN
FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT, HOME
INVESTMENT PARTNERSHIPS ACT GRANT AND THE
EMERGENCY SOLUTIONS GRANT; (2) AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO EXECUTE AGREEMENTS WITH
EACH SUBRECIPIENT; (3) AUTHORIZING THE CITY MANAGER
OR HIS DESIGNEE TO EXECUTE ANY AND ALL HUD
DOCUMENTS RELATED TO THE GRANTS
WHEREAS, as a Department of Housing and Urban Development (HUD)
entitlement community, the City of Chula Vista receives grant funds under the Community
Development Block Grant (CDBG), Emergency Shelter Grant (ESG), and the Home
Investment Partnerships Program (HOME): and
WHEREAS, Staff has prepared the Fiscal Year 2018/2019 Annual Action Plan
("Action Plan") using the goals set forth in the 2015-2019 Consolidated Plan ("Consolidated
Plan")and per HUD Rules and Regulations; and
WHEREAS, the City will receive a Fiscal Year 2018/2019 CDBG entitlement
of $2,289,135; a HOME entitlement of $947,625; and ESG entitlement of $179,761; and,
WHEREAS, the City has $85,730 in CDBG and $484,189 in HOME un-encumbered, prior
year funds to re-allocate to eligible projects; and,
WHEREAS, the City followed its Citizen Participation Plan and held public
hearings on housing and community needs on December 19, 2017 and March 13, 2018, at
which time public testimony was received and considered by the City Council with respect to
the FY 2018/2019 Action Plan: and
WHEREAS,Staff has determined that the proposed activities are eligible for
CDBG, ESG, and HOME funding.
WHEREAS, each CDBG project and programs meet a national objectives to benefit
primarily low/income households or aid in the elimination of slums and blight; and
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ResolutionNo.2018-
Page No.2
WHEREAS, Staff has determined that the subrecipients identified in the FY 2018/2019
Action Plan and Attachment A (attached hereto) are experienced and staffed in a manner such
that they can prepare and deliver the services required by the City; and
WHEREAS, in the event that HUD withdraws the City's CDBG funding, the City is
not obligated to compensate the sub/recipients/contractors for program expenditures.
NOW,THEREFORE, BE IT RESOLVED, by the City Council of the City of Chula
Vista as follows:
1.That it approves the Fiscal Year 2018/2019 Annual Action Plan ("Action Plan") for
the Community Development Block Grant (CDBG), Home Investment Partnership Act
(HOME),and the Emergency Solutions Grant (ESG) Programs.
2.That it authorizes the City Manager or his designee to execute any and all agreements
and necessary amendments for the management and implementation of the FY
2018/2019 Action Plan, Administration and Public Services programs between the City
of Chula Vista and each subrecipient, identified in the FY 2018/2019 Action Plan, and
it further authorizes the City Manager or his designee to make such minor
modifications as may be approved or required by the City Attorney.
3.That it authorizes the City of Chula Vista Development Services Department Director to
enter into Memorandums of Agreement, in substantially the form presented, for the
management and implementation of the FY 2018/2019 Action Plan Capital Improvement
and Park Improvement projects, with the Directors of Engineering, Public Works and
Community Services, and it further authorizes the City Manager or his designee to make
such minor modifications as may be approved or required by the City Attorney.
4.That it authorizes the City Manager or his designee to execute a HOME Community
Housing Development Organization (CHDO) Agreement, in substantially form presented,
with Wakeland Housing and Development Corporation.
5.That it authorizes the City Manager to execute the HUD Funding Approval
Agreements and any other related documents necessary to obtain the HUD grants.
6.That it authorizes funding the 2018/19 HUD Annual Action Plan activities detailed in the
Agenda Statement in the amount of $3,986,440.
7.That it authorizes an appropriation in the amount of $3,686,440 to be included as part of
the 2018-2019 City Manager’s Budget from the Community Development Block Grant,
Home Investment Partnerships and Emergency Solutions Grant.
Presented by
Approved as to form by
___________________________________________________________
Gary Halbert Glen R. Googins
City Manager City Attorney2018-05-15 Agenda Packet Page 364
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ATTACHMENT A
2018-05-15 Agenda Packet Page 366
City of Chula Vista
Staff Report
File#:18-0186, Item#: 10.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AND THE HOUSING
AUTHORITY (IN ITS CAPACITY AS THE SUCCESSOR HOUSING ENTITY) (1) APPROVING A
LOAN OF UP TO $858,740 FOR LAND ACQUISITION AND PRE-DEVELOPMENT EXPENSES AND
$1,036,425 FOR CONSTRUCTION-RELATED COSTS USING HOME INVESTMENT
PARTNERSHIP ACT FUNDS FROM THE UNITED STATES DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT TO WAKELAND HOUSING AND DEVELOPMENT CORPORATION OR
AN AFFILIATED DEVELOPMENT ENTITY ("DEVELOPER") FOR A NEW DEVELOPMENT TO BE
LOCATED AT 748, 750-752, AND 754-760 ANITA STREET; (2) AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO NEGOTIATE A FIRST AMENDMENT TO THE EXISTING LOAN
DOCUMENTS FOR 750-752 AND 754-760 ANITA STREET TO INCORPORATE 748 ANITA
STREET, AND EXECUTE ALL DOCUMENTS RELATED TO THE LOAN AND THE ACQUISITION
AND DEVELOPMENT OF THE ADDITIONAL SITE; (3) AUTHORIZING THE CITY MANAGER OR
HIS DESIGNEE TO NEGOTIATE AND EXECUTE ALL HOME INVESTMENT PARTNERSHIP ACT
DOCUMENTS RELATED TO THE HOME LOAN; AND (4) APPROPRIATING FUNDS IN THE
2017/2018 BUDGET THEREFOR (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council/Authority adopt the resolution.
SUMMARY
On October 10, 2017, through Resolution No. 2017-188, the City Council and Housing Authority
approved $3.3M in financial assistance for the development of an affordable housing project located
at 750-752 and 754-760 Anita Street to Wakeland Housing and Development Corporation
(“Developer”) in the southwest area of Chula Vista (“Project).
Since the original date of approval, Developer has successfully negotiated a purchase and sale
agreement to acquire 748 Anita Street. The Developer is requesting an additional $858,740 loan
commitment to acquire the additional parcel and for predevelopment costs. In addition, $1,036,425
is requested for construction and related costs for a total of $5,195,165. Approval of the
recommended actions will enable Developer to assemble the necessary financing for the Project and
increases the number of affordable housing units from 47 units to 72 units.
ENVIRONMENTAL REVIEW
Environmental Notice
The Director of Development Services has reviewed the proposed Project for compliance with the
California Environmental Quality Act (CEQA) and has determined that the Project qualifies for a
Class 32 infill development categorical exemption (15332) for new residential units on residential
property consistent with the Residential Apartment (R-3) zoning designation, therefore no further
environmental review or documentation is required.
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The City’s federal HOME funds from the United States Department of Housing and Urban
Development (HUD) funds will also be a source of financial assistance. Therefore, as required by the
federal entitlement funds, the project must also be reviewed under the National Environmental
Protection Act (“NEPA”). Funding of the loan will be conditioned upon the completion of all required
review under NEPA.
Environmental Determination
The Director of Development Services has reviewed the proposed Project for compliance with the
California Environmental Quality Act (CEQA) and has determined that the Project qualifies for a
Class 32 infill development categorical exemption (15332) for new residential units on residential
property consistent with the Residential Apartment (R-3) zoning designation, therefore no further
environmental review or documentation is required.
The City’s federal HUD funds will also be a source of financial assistance. Therefore, as required by
the federal entitlement funds, the project must also be reviewed under the National Environmental
Protection Act (“NEPA”). Funding of the loan will be conditioned upon the completion of all required
review under NEPA.
BOARD/COMMISSION RECOMMENDATION
On April 26, 2018, the Housing Advisory Commission voted (4-0) to recommend the approval of City
housing funds to assist in the Project financing.
DISCUSSION
To facilitate and materially assist the housing industry in providing adequate and affordable housing
shelter for all economic segments of the community and to provide a balance of housing
opportunities for very-low income, low-income and senior households, the City of Chula Vista (“City”)
has adopted Chula Vista Municipal Code (“CVMC”) Chapter 19.90 [Affordable Housing Incentives],
consistent with Sections 65915 and 65918 of the California Government Code. Should an applicant
agree to construct housing units to be restricted for occupancy by very-low and low-income
households as set forth in CVMC §19.90.040, upon the request of the applicant, the City shall make
incentives available, in accordance with CVMC §19.90.050, including paragraph (A)(2)(e) [Financial
Incentives].
Wakeland Housing and Development Corporation (“Developer”) has proposed the development and
construction of an affordable rental housing development for very-low and low-income households on
property located at 748, 750-752 and 754-760 Anita Street in the southwestern area of Chula Vista
(“Project”). To facilitate the development and financing of the Project, Developer has requested, in
accordance with CVMC Chapter 19.90, a land acquisition, predevelopment, and construction loan of
up to (or not to exceed) five million one hundred ninety-five thousand one hundred sixty-five dollars
($5,195,165) to support creation of new affordable rental homes. Project specific predevelopment
costs may include feasibility studies, consulting fees, architects, engineers, legal fees and site control
expenses such as title reports. Land acquisition costs may include costs for the land, title and
recording and any reasonable carrying costs. Construction costs may include building materials,
permit costs, and labor costs.
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In today’s competitive land market, developers have found it difficult to negotiate long option periods
to acquire land necessary for development of affordable housing, which typically involves a minimum
of 18 months to receive a commitment of the differing layers of financing and to secure land-use
entitlements. If a long-term option is negotiated, the land price is costlier because of the extended
period. Nonprofit affordable housing developers, such as Wakeland, have difficulty in accumulating
sufficient cash resources to pay for predevelopment work that can take several years or to acquire
land in a competitive real estate market.
Acquisition of land at the full cost to the developer or with a long-term option can serve as an
impediment to the production of affordable housing. With the Housing Authority’s assistance, the
affordable housing developers' carrying costs are reduced while seeking funding from other sources,
which contributes to lower overall project costs. Staff is supportive of assisting affordable housing
developers with acquisition funding earlier in the predevelopment phase of a project to make them
more competitive in securing site control of land and reduce land acquisition costs.
The Property & Project
Sites A and B were acquired October 2017 using Housing Authority funding. A Loan Agreement and
Related Covenants is recorded against these properties (“A & B”) to ensure they can only be used for
affordable rental housing per previous Council approval (Resolution No. 2017-188). The additional
financial assistance of the Housing Authority’s Low and Moderate-Income Housing Asset Fund
(LMIHAF) totaling $858,740 will be used to acquire Site C. With the acquisition of Site C, the three
separate parcels total approximately 2.06 gross acres as follows (see Attachment 1):
Description Site A Site B Site C
Address 750-752 Anita Street 754-760 Anita Street 748 Anita Street
APN APN 622-072-32-00 APN 622-072-34-00 APN 622-072-33-00
Lot Size 0.62 acres 0.92 acres 0.52 Acres
Zoning Palomar Residential
Village
Palomar Residential Village Palomar Residential
Village
General Plan Residential High Residential High Residential High
Existing Uses
(Attachment
2)
1 single family home 3
bed, 2 baths
7-unit multifamily structure
Totals 11 bedrooms, 8
baths
1 single family home 2
bed, 1 bath
Adjacent Uses Residential homes Residential homes Residential homes
Ownership Wakeland Housing
Acquired October 2017
Wakeland Housing
Acquired October 2017
Acquisition Pending
6/2018
Site C is owner occupied and Wakeland has reached an agreement with the Property Owner for the
sale, with escrow scheduled to close in early June 2018. As part of the escrow process, the City will
record additional loan and related covenants on Site C to ensure that this parcel is used for
affordable rental housing. HOME funds in the amount of $1,036,425 will be used for construction
and related costs.
Zoning for the properties is currently Palomar Gateway District - Palomar Residential Village (PRV)
permitting residential apartments with a General Plan designation of Residential High. The parcels
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permitting residential apartments with a General Plan designation of Residential High. The parcels
are flat and present no significant impediments to future redevelopment of the sites.
The properties are in an ideal location for the convenience of residents and for competitive financing
programs. The Project is within walking and biking distance to recreational and education
opportunities and neighborhood services and has direct access to public transportation. Nearby
amenities and services include:
§½ Mile from Palomar Transit Center
§½ Mile from Food 4 Less and other shopping
§¾ Mile from Elementary and High School and Harborside Park
§1 Mile from South Chula Vista Library
The Project site supports a healthy living environment with its close proximity to amenities and
services.
A Broker Price opinion was used to determine the value of Site C using the September 2017
appraisal from Sites A and B. This value is based on a highest and best use as vacant land for
redevelopment to multifamily residential. The Broker found that the existing improvements contribute
no value to Site C. The Land Acquisition Loan of $858,740 is set at a maximum of the value and
additional costs associated with predevelopment costs associated with the proposed acquisition and
development.
A Phase I Environmental Site Assessment has been prepared. The purchase and sale contract
stipulates that the seller represents to the best of its knowledge that the site is free of contamination
and that the seller is responsible for any contamination of which it is aware or subsequently
discovered on the site.
Future development plans anticipate the removal of all existing buildings to be replaced with 72
affordable rental homes (1-unit reserved for the resident manager) for very low and low-income
households, in a mix of bedroom unit sizes, a small community room and laundry facilities. A small
percentage of the project will be restricted for occupancy by persons with special needs at an
extremely low-income level, such as persons with disabilities or veterans. The Project is proposed as
a joint partnership with Developer to bring their strengths and financing skills to the Project and its
experience in providing housing for a special needs population.
The Applicant
With over 6,000 housing units in its portfolio across California, Developer has significant experience
in developing affordable housing. Developer's developments are diverse in housing type, unit type
and financing structure, and they vary in size from 6 units to 504 units. Recent projects in San Diego
County include: “Atmosphere”, a 205-unit rental project including 51 units for supportive housing for
special needs residents in downtown San Diego and Talmadge Gateway, a 100 percent permanent
supportive housing community for seniors in partnership with City Heights Community Development
Corporation. In Chula Vista, Developer has partnered with the City and Family Health Centers for
“Lofts on Landis”, a 33-unit rental project in the heart of Third Avenue Village in Chula Vista and the
award winning “Los Vecinos”, a 42-unit rental project in Southwest Chula Vista. Developer is well-
qualified and has demonstrated their desire and commitment to partner with the City, to develop a
project that meets the City’s affordable housing objectives and to work cooperatively on the design of
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project that meets the City’s affordable housing objectives and to work cooperatively on the design of
the project.
Project Financing
Project development costs are estimated to total $23,184,474, inclusive of the land acquisition. Major funding for the
Project will be through the Low-Income Housing Tax Credit (LIHTC) program (Attachment 3: Source and Uses). As with
affordable housing developments with restricted rents, leveraging of various financial resources is necessary for financial
feasibility. To assist in closing the financing gap, Wakeland has requested financial assistance from the Housing
Authority’s LMIHAF funds. HOME funds are also being requested for construction and related costs.
The use of LMIHAF funds will necessitate a number of the units be restricted to households with special needs at 30
percent or less of the area median income (AMI), or $25,500 for a family of four, and those households below 50 percent
AMI, or $42,500 for a family of four. As required by State Health and Safety Code 34176.1 (a)(3), at least 30 percent of
the expenditures of the LMIHAF must be used for the development of housing affordable to, and occupied by, households
earning 30 percent or less of the area median income (AMI) and 50 percent of the expenditures for households earning
30-50 percent AMI. HOME funds will require 11-units to be restricted to households servicing less than 50% of the Area
Median Income. With deeper affordability levels, the City and Housing Authority’s business terms will require the
Developer to pursue other available funds for financial feasibility, specifically funds targeted to supportive or special
needs housing development and operations, such as Mental Health Services Act Housing Program (MHSA)or Veterans
Housing and Homelessness Prevention (VHHP) funding, or the Affordable Housing and Sustainable Communities
(AHSC) Grant Program. However, due to the competitive nature of these funding programs, the financial analysis
assumes such funds may not be received.
The Housing Authority’s and City’s financial assistance to fill the financing gap will be necessary to demonstrate local
commitment and leveraging of local funds in Developer’s application for the LIHTC. Additionally, the timely encumbrance
and expenditure of LMIHAF funds is necessary or the funds will be required to be transferred to the State’s Department of
Finance and distributed to taxing entities. In addition, the HOME funds can be subject recapture by HUD if not committed
to an eligible project that is owned by a City certified Community Housing Development Organization.
With the acquisition of the third parcel (Site C), and increasing interest rates and construction costs, additional assistance
of approximately $1.9 million is required to fill the remaining need. Staff is proposing the use of the City’s HOME funds in
an estimated amount of $1,036,425 for constructed and related costs and $858,740 from LMIHAF to acquisition and pre-
development costs for Site C.
The Housing Authority and City's commitment averages $72,155 for each of the 72 units. This cost is consistent with the
per unit subsidy for this type of development in high-cost markets. Given that this Project will also restrict approximately
10 percent of the units to residents with special needs at 30 percent of AMI, the deep affordability of the Project increases
the needed public subsidy. The financial assistance requested by Developer, in accordance with CVMC §19.90.050, is
necessary to provide for affordable rents and to lower development costs. The Project cannot be built without such
assistance. For each dollar of Housing Authority and City subsidy, approximately $4 of other private/public investment is
leveraged. The first mortgage on the project and 9% tax credits would bring approximately $16,751,309 to the project
(approximately 72% of the development costs). Therefore, there remains a financing gap of approximately $6,430,165. A
portion of the developer fee will be contributed back as a source. As a gap lender, the City and Housing Authority total
commitment needed is $5,195,165 to fill the remaining gap. Please see Attachment 3 for a comprehensive listing of the
Project’s sources and uses of funds.
The City and Housing Authority will execute and record a First Amendment to the existing loan agreements and all
associated loan documents, in accordance with the Authority's approval, if granted, for this Project, with terms reviewed
by the City Attorney’s office and satisfactory to the Authority. Assistance will be in the form of a land acquisition,
predevelopment loan, and construction loan, in an amount not to exceed $5,195,165 and secured by a note, deed of
trust, and regulatory agreement recorded against the property. The principal and interest on the loan would be amortized
over fifty-five years and repaid from cash surplus in annual installments. As with all the Housing Authority gap loan
amounts, disbursements are made on a reimbursement basis as evidenced by expenditure receipts; therefore, if the full
approved loan amounts are not needed, the amounts disbursed will be less than the approved amount. The City’s
commitment of HOME Investment Partnership Act funds also requires separate loan and related documents once all of
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the other financing sources have been secured for the Project.
Rents will be restricted for all 72 units for lower income households (except for one unit reserved for the resident
manager) for the required 55-year term, inclusive of serving a special needs population of extremely low-income, and
incorporated into the various deed restrictions for the property and maintained for the full 55-year term known as the
period of compliance. Such restrictions would bind all subsequent owners so that the commitment remains in force
regardless of ownership. Compliance with these restrictions would be subject annually to a regulatory audit and annual
tax credit certification.
Tonight’s action will direct staff and the City Manager, in consultation with the City Attorney’s office, to take the following
actions to meet State and HUD requirements for the use of Low and Moderate-Income Housing Asset funds and HOME
Investment Partnership Act funds:
·Enter into all necessary documents, including but not limited to an amendment of all existing Low and Moderate-
Income Housing Loan Agreements, any associated HOME Investment Partnership Act loan documents and
regulatory agreements to commit additional funds to the project with an amount not to exceed $858,740 from the
Low and Moderate-Income Housing Asset Fund to acquire Site C and $1,036,425 in HOME funds for construction
and related Project costs.
·The total assistance to the project will not exceed $4,158,740 from the Low and Moderate-Income Housing Asset
fund and $1,036,425 in HOME Investment Partnership Act funds from the U.S Department of Housing and Urban
Development for a total of $5,195,165.
Public Outreach
Developer hosted a community meeting on August 8, 2017 to engage with the community, to provide information on their
proposed development, to answer questions, and to better understand the concerns of neighborhood residents and
businesses. Invitations were sent to those residents and property owners within a 500-foot radius of all the Sites.
Approximately 6 persons were in attendance, of which 3 were residents of the subject property. Residents voiced
concerns regarding the timing of development and their rents. Developer communicated their intent to maintain existing
rents and demolition of units not occurring until all financing was secured. In accordance with the financing provided,
relocation assistance would be offered by Developer.
As the Project moves forward, the project will be subject to the City’s public notification process. In addition, Developer
will continue to engage with the community by mailing informational updates on the project and sending an email
newsletter during the construction phase that alerts them to construction-related impacts in the neighborhood.
Conclusion
The Project offers opportunities to provide quality affordable housing to Chula Vista’s working families consistent with City
housing goals in a location within walking distance to neighborhood services, employment centers, and transportation
links. In addition, the Project will revitalize existing underutilized and blighted properties. The requested additional
financial assistance, in an amount not to exceed $1,895,165, provides significant leveraging of the City’s resources and is
necessary to obtain primary financing for the Project. Furthermore, staff recommends approval of a City land acquisition,
predevelopment, and construction loan for the following reasons: 1) Developer has done much of the active advance
work associated with the Development; and 2) a land acquisition and predevelopment loan for Site C is necessary, given
the significant need for advance community communication, consideration of needed community amenities and
development requirements, and competitive real estate market; 3) the proposed LMIHAF and HOME funds are available
and the Project provides an opportunity for these funds to be used for a viable affordable housing costs instead of being
recaptured by the respective agencies; and 4) with the acquisition of Site C, an additional 24 units will be available for
very low income households.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the Housing Authority members and has found no property holdings within
500 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a
disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section
18702.2(a)(11), for purposes of the Political Reform Act (Cal. Gov’t Code §87100,et seq.).
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Staff is not independently aware, and has not been informed by any Housing Authority member, of any other fact that may
constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and
Secure Neighborhoods and a Connected Community. The development and provision of quality affordable housing for
low income households supports the Connected Community goals as it provides housing to meet residents’ needs and
priorities.
CURRENT YEAR FISCAL IMPACT
The funds needed to assist with the acquisition and pre-development costs for the acquisition of Site C, in an amount not
to exceed $858,740, are available from the Housing Authority’s Low and Moderate-Income Housing Asset Fund balance.
Of the requested amount, $358,740 is available in the adopted 2017/18 budget. An additional appropriation of $500,000
to provide the full $858,740 is recommended with this action. The pre-commitment of HOME funds for construction and
related costs is needed with this action; however, the HOME funds will not be spent until fiscal year 2018/19. Hence, no
appropriation of HOME funds is requested in the current fiscal year.
There is no financial impact to the City’s General Fund as the project and staff costs are covered by the available Housing
fund balance.
ONGOING FISCAL IMPACT
The one-time use of Housing Fund balances will result in a negative fiscal impact to the available fund balance.
However, these funds are restricted solely for the creation or improvement of permanent or transitional affordable housing
opportunities. There is no ongoing expense associated with this action. The HOME funds for construction and related
costs will be appropriated as part of the 2018-2019 City Manager’s Budget.
ATTACHMENTS
1. Locator Map
2. Existing Sites
3. Summary of Project Sources & Uses
4. Disclosure Statement
Staff Contact: Leilani Hines, Housing Manager
Jose Dorado, Senior Management Analyst
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RESOLUTION NO. __________
(HOUSING AUTHORITY RESOLUTION NO. __________)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AND THE HOUSING AUTHORITY (IN ITS
CAPACITY AS THE SUCCESSOR HOUSING ENTITY)
APPROVING A LOAN OF UP TO $858,740 FOR LAND
ACQUISITION AND PREDEVELOPMENT EXPENSES AND
$1,036,425 FOR CONSTRUCTION RELATED COSTS USING
HOME INVESTMENT PARTNERSHIP ACT FUNDS FOR THE
US DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT TO WAKELAND HOUSING AND
DEVELOPMENT CORPORATION OR AN AFFILIATED
DEVELOPMENT ENTITY (“DEVELOPER”) FOR A NEW
DEVELOPMENT TO BE LOCATED AT 748, 750-752 AND
754-760 ANITA STREET (“SITES”) AND RELATED
COVENANTS TO OFFER RENT- AND INCOME-
RESTRICTED APARTMENTS FOR LOWER-INCOME
HOUSEHOLDS (“PROJECT”); (2) AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO NEGOTIATE A FIRST
AMENDMENT TO THE EXSITING LOAN AND RELATED
DOCUMENTS FOR 750-752 AND 754-760 ANITA STREET TO
INCORPORATE 748 ANITA STEEET, AND EXECUTE ALL
DOCUMENTS RELATED TO THE LOAN AND THE
ACQUISITION AND DEVELOPMENT OF THE ADDITIONAL
SITE; (3) AUTHORIZING THE CITY MANAGER OR HIS
DESIGNEE TO NEGOTIATE AND EXECUTE ALL HOME
INVESTMENT PARTNERSHIP ACT (HOME) DOCUMENTS
RELATED TO THE HOME LOAN; AND (4) APPROPRIATING
FUNDS IN THE 2017/2018 BUDGET THEREFOR
WHEREAS, to facilitate and materially assist the housing industry in providing adequate
and affordable shelter for all economic segments of the community and to provide a balance of
housing opportunities for very low income, low income and senor households, the City of Chula
Vista (“City”) has adopted Chula Vista Municipal Code (“CVMC”) Chapter 19.90 [Affordable
Housing Incentives], consistent with Sections 65915 and 65917 of the California Government
Code; and
WHEREAS, Wakeland Housing and Development Corporation, utilizing a to-be-formed
limited partnership of which Wakeland Housing and Development Corporation will be a partner,
(the “Developer”) proposes to construct a 72-unit family multifamily rental development, with
units affordable to extremely low, very low and low income households to be located at 748,
750-752 and 754-760 Anita Street in the southwestern area of Chula Vista (the “Project”); and
WHEREAS, Developer is applying for nine percent (9%) tax credits from the Tax Credit
Allocation Committee (TCAC); and
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WHEREAS, in accordance with CVMC section 19.90.050, the Developer has requested
assistance to reduce the development costs for the construction of the Project for its financial
feasibility; and
WHEREAS, the City’s evaluation of the development budget, operating pro forma, and
source and uses for the Project determined that additional financing is appropriate and necessary
in order to make the Project feasible; and
WHEREAS, California Health and Safety Code section 34176(d)( authorize and direct
the Housing Authority (in its capacity as the Successor Housing Entity with the meaning of
Health and Safety Code section 34176; “Housing Authority") to expend Low and Moderate
Income Housing Asset Funds (“LMIHAF”) for the purposes of increasing, improving and
preserving the community's supply of low and moderate income housing available at affordable
housing cost to persons and families of low- and moderate-income, lower income, and very low
income; and
WHEREAS, pursuant to Health and Safety Code section 34176(d) the Housing Authority
has established a LMIHAF; and
WHEREAS, pursuant to Health and Safety Code section 34171(d), in carrying out its
affordable housing activities, the Housing Authority is authorized to provide subsidies to or for
the benefit of very low income and lower income households, or persons and families of low or
moderate income, to the extent those households cannot obtain housing at affordable costs on the
open market, and to provide financial assistance for the construction and rehabilitation of
housing which will be made available at an affordable housing cost to such persons; and
WHEREAS, the City is an entitlement community under the United States Department of
Housing and Urban Development’s (“HUD”) HOME Investment Partnership Act program
(“HOME”) and receives an annual entitlement funding for the provision of housing for lower
income households; and
WHERES, the City/Housing Authority and the Developer entered into various
Agreements to secure the City/Housing Authority financial interest, including but not limited to,
Declaration of Covenants, Conditions, and Restrictions (2), Deed of Trust (2), a Promissory
Note, a Land Acquisition and Pre-Development Loan Agreement, Notice of Affordability
Covenants and an Option of First Right of Refusal (Loan Agreements and Related Covenants);
and
WHEREAS, the Housing Authority wishes to provide Developer with an additional pre-
development and land acquisition loan in an amount of eight hundred fifty-eight thousand seven
hundred and forty dollars ($858,740) from its LMIHAF to assist with the financing gap for the
construction of the Project with the loan to be secured against the Sites; and
WHEREAS, the City wishes to provide the Developer, a Community Housing
Development Organization, with one million thirty-five thousand four hundred twenty-five
dollars ($1,035,425) for constructed related costs using HOME funds from HUD; and
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Resolution No.
Page 3
WHEREAS, the additional funds will bring the total amount of City and Housing
Authority assistance in an amount not to exceed five million one hundred ninety-five thousand
one hundred sixty-five dollars ($5,195,165); and
WHERES, the City/Housing Authority and the Developer will enter into a First
Amendment of the existing Loan Agreements and Related Covenants. In addition, City will
execute HOME Investment Partnership Act Agreements including but not limited to a
Promissory Note, Deed of Trust, and HOME Regulatory Agreement; and
WHEREAS, the Project furthers the goals of the City and the Housing Authority as it will
facilitate the creation of new affordable rental housing which will serve the needs and desires of
various age, income, and ethnic groups of the neighborhood and the City; and
WHEREAS, in order to carry out and implement California Health and Safety Code
section 34176(d) and the City’s Housing Element of the General Plan and the affordable housing
requirements and goals thereof, the City and Housing Authority propose to enter into a Housing
Authority Loan Agreement and Related Restricted Covenants (the “Housing Authority Loan
Agreement”) and City and Housing Authority Declarations of Covenants, Conditions and
Restrictions (the “Declarations”), respectively, with the Developer, to be recorded as
encumbrances to the Project, pursuant to which the Housing Authority would make the loan to
the Developer, and the Developer would agree to develop and operate the Project in accordance
with the requirements of the Housing Authority Loan Agreement and the associated ty and
Housing Authority Declarations, restricting occupancy of approximately 72 of the apartment
units in the Project to extremely low, very-low and low-income households and rent those units
at an affordable housing cost, plus 1 unrestricted apartment units which will be the managers’
units; and
WHEREAS, the Housing Authority and City HOME Loan Agreement will leverage the
investment of the Housing Authority and City by requiring the Developer to obtain additional
financing for the construction and operation of the Project through a combination of a loan
obtained from the proceeds of an equity contribution by a limited partner investor in
consideration for the “9% Tax Credits” to be generated by the Project and other financing
programs; and
WHEREAS, in accordance with the requirements of CEQA, the Environmental Review
Coordinator has determined that the proposed project qualifies for a Class 32 infill development
categorical exemption (15332) for new residential units on residential property consistent with
the Residential Apartment (R-3) zoning designation, therefore no further environmental review
or documentation is required.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City Chula Vista
and the Housing Authority, in its capacity as the Successor Housing Entity within the meaning of
Health and Safety Code section 34176, that the Project is consistent with the provisions of Chula
Vista Municipal Code Chapter 19.90, wherein Developer will construct housing units to be
2018-05-15 Agenda Packet Page 376
restricted for occupancy by very-low and low-income households as set forth in CVMC section
19.90.040; and
BE IT FURTHER RESOLVED by the City, as a HOME entitlement community, and
Housing Authority, in its capacity as the Successor Housing Entity within the meaning of Health
and Safety Code section 34176, that the financial assistance requested by Developer, in
accordance with CVMC section 19.90.050, is necessary to provide for affordable rents and to
lower development costs. The Project cannot be built without such assistance; and
BE IT FURTHER RESOLVED by the City and Housing Authority, in its capacity as the
Successor Housing Entity within the meaning of Health and Safety Code section 34176, that it
does hereby approve loans from its Housing Funds to Developer for a new development to offer
approximately 72 rent-and income-restricted residential units for extremely low, very-low and
low-income households to be located at 748, 750-752 and 754-760 Anita Street in the
southwestern area of Chula Vista in an amount up to (or not to exceed) exceed eight hundred
fifty eight thousand seven hundred and forty dollars ($858,740) from its LMIHAF for
predevelopment and land acquisition costs and one million thirty five thousand four hundred
twenty five dollars ($1,035,425) in HOME Funds for constructions costs to be secured against
the Sites and repaid from cash surplus (residual receipts, if any) in annual installments; and
BE IT FURTHER RESOLVED by the City and Housing Authority, in its capacity as the
Successor Housing Entity with the meaning of Health and Safety Code section 34176, that it
directs staff to prepare all necessary documents and any actions, as required by California Health
and Safety Code section 34176(d) to commit the Housing Funds, and authorizing the City
Manager, or his designee to negotiate and execute a First Amendment to the executed
City/Housing Authority Predevelopment and Land Acquisition Loan Agreement and all
associated loan documents, and regulatory agreements and other actions necessary for the
financing, acquisition and development of the Sites and Project, consistent with the City’s
standard documents as reviewed and approved in form by the City Attorney’s office and execute
the HOME Investment Partnership Act Loan (HOME) Documents and other necessary actions
for financing of the Project, and, at minimum, subject to the following terms and conditions:
1. Certification of the appropriate CEQA documentation is one file prior to any Housing
Authority Loan disbursements for any portion of the Project.
2. Certification of the appropriate NEPA documentation prior to any City loan commitment
and loan disbursements for any portion of the Project, including a Request for Release of
Funds approved by the HUD.
3. Developer shall secure all other financing necessary for the acquisition and development
of the Project within two years of acquisition of the Sites. If Developer is unable to
receive commitment of financing within such period, the Housing Authority Loan shall
become due and payable in full or Sites shall be transferred to the Housing Authority and
the City’s HOME funds shall be reallocated to a new project to avoid a recapture of these
HUD funds.
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Resolution No.
Page 5
4. The loan repayment of the LMIHAF will be secured by a First Amendment to the
existing Deeds of Trust and Promissory Notes for the properties in favor of the Housing
Authority and recorded against the Project property to add 748 Anita Site C and the
additional investment of said funds. The Housing Authority’s loan will be junior to the
Permanent Financing and the deferred developer fees on the Project.
5. The loan repayment of the HOME funds will be secured by a Deed of Trust, Promissory
Note, and Regulatory Agreement in favor of the City and recorded against the Project
property (748, 750-752 and 754-760 Anita Street).
6. The term of the Housing Authority loan covenant and loan term shall be fifty-five (55)
years.
7. The HOME Investment Partnership Act (HOME) loan term shall be fifty-five (55) years,
with a 20-year affordability covenant.
8. The outstanding balances shall all accrue simple interest at 3 percent (3%) per annum.
However, interest shall not accrue during the predevelopment time period.
9. Payment of principal and interest on the Housing Authority loan and City HOME loan
shall be made out of a fund equal to fifty percent (50%) of the “residual Receipts”,
defined as the income which remains after the payment of the debt service on the
permanent loan, deferred developer fee and reasonable operating expenses.
10. Developer will be required to operate the Project consistent with the Regulatory
Agreement required by the Project's tax credit financing, the City's Affordable Housing
Program, and the Housing Authority's/City’s financing, the covenants imposed by these
Agreements, and any other project requirements.
11. The Housing Authority and City assistance is based upon the assumptions presented
within the sources and uses of funds, development budget, development proforma and
other information filed with the Affordable Housing Review Application for the project
as submitted and reviewed by the City’s Development Services Housing Division. The
assistance is a maximum level of participation. It is expected that any substantive
revisions in such financing assumptions which would lead to an increase in other
resources available, would therefore reduce the level of Housing Authority/City
assistance.
12. That it authorizes a budget amendment to the 2017/2018 Housing Authority's Low and
Mod Income Housing and an appropriation of five hundred thousand dollars ($500,000).
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Presented by Approved as to form by
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
2018-05-15 Agenda Packet Page 379
Attachment 1: Locator Map
Current Acquisition:
Site C: 748 Anita Street: APN 622-072-33-00
Chula Vista, CA 91911
Previous Acquisition:
Site A 750-752 Anita Street: APN 622-072-32-00
Site B 754-760 Anita Street: APN 622-072-34-00
2018-05-15 Agenda Packet Page 380
Attachment 2: Existing Uses
2018-05-15 Agenda Packet Page 381
Attachment 3
Cost Funds Financing Gap
Project Cost:
Acquisition 4,093,000
Structures & Site Improvements 11,291,178
Design/Engineering 700,000
Construction Contingency 643,931
Permits & Fees 1,981,000
Fees, Financing Costs 1,642,865
Reserves, Legal, Audit 155,000
Other 439,500
Developer Fees 2,235,000
Subtotal $ 23,181,474 23,181,474$
Sources of Funds
Tax Credit Equity 10,876,309
Permanent Loan 5,875,000
Subtotal $ 16,751,309 (6,430,165)$
Subsidies
Deferred Developer Fee 1,235,000
Special Needs Housing Funds
Housing Authority Loan (LMIHAF)3,300,000
Housing Authority Loan (LMIHAF)858,740
City Loan (HOME)1,036,425
Subtotal 6,430,165$
TOTAL 23,181,474$ 23,181,474$ -$
Project Dus 72
Project Cost 23,181,474$
Cost per Unit 326,499.63$ per unit
City/Housing Authority Subsidy per Unit 14,598$ per unit
City HOME Subsidy per Unit @ 11 Units 94,220$ per unit
Housing Authority Leveraging $1 to $6
TOTAL City/HA Leveraging $1 to $4
ANITA ST AFFORDABLE HOUSING
72 Units
PROFORMA SUBSIDY ANALYSIS-SOURCES AND USES
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City of Chula Vista
Staff Report
File#:18-0177, Item#: 11.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING $155,967
FROM THE U.S. DEPARTMENT OF HOMELAND SECURITY AND APPROPRIATING $77,983 TO
THE POLICE GRANTS SECTION OF THE FEDERAL GRANTS FUND FOR THE STATE
HOMELAND SECURITY PROGRAM (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
The San Diego County Office of Emergency Services, which administers the State Homeland
Security Program (SHSP), has notified the City of the fiscal year 2017 SHSP award in the amount of
$155,967. The State Homeland Security Program is designed to improve domestic terrorism
preparedness of state and local governments by addressing equipment, training, exercises and
planning needs.
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality
Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical
change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
The fiscal year 2017 State Homeland Security Program (SHSP) provides funding for the continued
development of readiness and operational response capacity of emergency first responder
personnel. Funds allocated by the fiscal year 2017 SHSP will allow the Police and Fire Departments
to purchase equipment that will complement existing equipment configurations that were purchased
with previous Homeland Security funds. SHSP grant administrators from the California Governor’s
Office of Emergency Services (Cal OES) have approved the expenditure plan of equipment,
planning, and training needs of the City. The spending plan was submitted in accordance with grant
requirements. Grant funds are restricted in how they can be spent and cannot supplant normal
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File#:18-0177, Item#: 11.
requirements. Grant funds are restricted in how they can be spent and cannot supplant normal
budgetary items for the City. The specific spending plan is as follows:
Equipment & Services
The fiscal year 2017 SHSP funds will purchase equipment and services in the amount of $77,983
that will be used by the Police Department’s Dispatch unit. Equipment funds have been allocated to
purchase a dispatch console and one 911 phone line that complement an existing configuration of
regional communications interoperability. The Fire Department will use $77,984 to purchase
structural firefighting protective garments and monthly notebook computer connectivity service used
by emergency first responders.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section
18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code § 87100,
et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. This resolution
supports the goal of Strong and Secure Neighborhoods by enhancing the readiness and operational
response capacity of emergency first responder personnel.
CURRENT YEAR FISCAL IMPACT
Approval of this resolution will result in the acceptance of $155,967 grant funding from the U.S.
Department of Homeland Security and a one-time appropriation of $46,528 to the capital category
and $31,455 to the supplies and services category of the Police Grants Section of the Federal Grants
Fund. The funding from the U.S. Department of Homeland Security will completely offset these
costs. Therefore, there is no net fiscal impact to the City.
ONGOING FISCAL IMPACT
Adoption of this resolution will also direct staff to include $77,984 in the supplies and services
category of the FY 2018/2019 proposed budget in the Fire Department Grant Section of the Federal
Grants Fund.
ATTACHMENTS
None
Staff Contact: Maritza Vargas, Police Department
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $155,967 FROM THE U.S.
DEPARTMENT OF HOMELAND SECURITY AND
APPROPRIATING $77,983 TO THE POLICE GRANTS
SECTION OF THE FEDERAL GRANTS FUND FOR THE
STATE HOMELAND SECURITY PROGRAM
WHEREAS, the San Diego County Office of Emergency Services, who administers the
State Homeland Security Program (SHSP), has notified the City of the fiscal year 2017 SHSP
award in the amount of $155,967; and
WHEREAS, the State Homeland Security Program is designed to improve domestic
terrorism preparedness of state and local governments by addressing equipment, training,
exercises and planning needs; and
WHEREAS, grant funds from the State Homeland Security Program are restricted in how
they can be spent and cannot supplant normal budgetary items for the City; and
WHEREAS, the fiscal year 2017 SHSP funds will purchase equipment and services that
will be used by the City’s first responders.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it accepts $155,967 from the U.S. Department of Homeland Security and appropriates
$46,528 to the capital and $31,455 to the supplies and services categories of the Police Grants
Section of the Federal Grants Fund, and directs staff to include $77,984 in the supplies and
services category of the FY 2018/2019 budget in the Fire Grants Section of the Federal Grants
Fund.
Presented by Approved as to form by
Roxana Kennedy Glen R. Googins
Police Chief City Attorney
2018-05-15 Agenda Packet Page 388
City of Chula Vista
Staff Report
File#:18-0178, Item#: 12.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING $6,007
FROM THE CALIFORNIA GOVERNOR’S OFFICE OF EMERGENCY SERVICES AND
APPROPRIATING SAID FUNDS TO THE POLICE GRANTS SECTION OF THE FEDERAL GRANTS
FUND FOR THE COVERDELL FORENSIC SCIENCE IMPROVEMENT PROGRAM (4/5 VOTE
REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
The Police Department has been awarded grant funding from the California Governor’s Office of
Emergency Services for the Paul Coverdell Forensic Science Improvement Program. The goal of
this program is to improve the quality, timeliness, and credibility of forensic science services over
current operations.
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality
Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical
change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable.
DISCUSSION
The Paul Coverdell Forensic Sciences Improvement Program, which is administered by the California
Governor’s Office of Emergency Services (Cal OES), provides federal funding to accredited crime
laboratories throughout California. Coverdell funds can be used to provide education and training in
both technical and personal skills to California’s forensic scientists to ensure that they can effectively
perform their laboratory assignments. In order to receive these funds, the crime laboratories must
verify their accreditation status with a Forensic Crime laboratory organization or appropriate certifying
body. The crime laboratories must also certify that they have a plan in place to conduct an
independent external investigation into allegations of serious negligence or misconduct by laboratory
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independent external investigation into allegations of serious negligence or misconduct by laboratory
employees or contractors.
The Police Department has been awarded $6,007 for the 2017 Coverdell Program. This funding will
be used to provide education and training to crime laboratory personnel to ensure that they can
effectively perform their laboratory assignments.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section
18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code § 87100,
et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. Funds received for the
Coverdell Forensic Science Improvement Program support the goal of Operational Excellence by
training crime laboratory personnel to effectively perform their duties.
CURRENT YEAR FISCAL IMPACT
Approval of this resolution will result in the appropriation of $6,007 to the supplies and services
category of the Police Grants section of the Federal Grants Fund. Funding from the California
Governor’s Office of Emergency Services will completely offset the costs of the Coverdell Forensic
Science Improvement Program, resulting in no net fiscal impact.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact
ATTACHMENTS
None
Staff Contact: Maritza Vargas, Police Department
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $6,007 FROM THE
CALIFORNIA GOVERNOR’S OFFICE OF EMERGENCY
SERVICES AND APPROPRIATING SAID FUNDS TO THE
POLICE GRANTS SECTION OF THE FEDERAL GRANTS
FUND FOR THE COVERDELL FORENSIC SCIENCE
IMPROVEMENT PROGRAM
WHEREAS, the Police Department has been awarded $6,007 in grant funding from the
California Governor’s Office of Emergency Services for the Paul Coverdell Forensic Science
Improvement Program; and
WHEREAS, the goal of the Coverdell program is to improve the quality, timeliness, and
credibility of forensic science services over current operations; and
WHEREAS, the Coverdell funds will be used to provide education and training to crime
laboratory personnel to ensure that they can effectively perform their laboratory assignments;
and
WHEREAS, the grant funds provided by the California Governor’s Office of Emergency
Services will be appropriated to the supplies and services category of the Police Grant Fund and
will completely offset the total costs of this program.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it accepts $6,007 from the California Governor’s Office of Emergency Services and
appropriates said funds to the Police Grants Section of the Federal Grants Fund for the Coverdell
Forensic Science Improvement Program.
Presented by Approved as to form by
Roxana Kennedy Glen R. Googins
Chief of Police City Attorney
2018-05-15 Agenda Packet Page 391
City of Chula Vista
Staff Report
File#:18-0179, Item#: 13.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING $225,000
FROM THE U.S. DEPARTMENT OF HOMELAND SECURITY AND APPROPRIATING $25,363 TO
THE POLICE GRANTS SECTIONS OF THE FEDERAL GRANT FUND FOR OPERATION
STONEGARDEN (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
Since the events of September 11, 2001, the interception of terrorists and their weapons attempting
entry across the nation’s borders has become the priority mission of the U.S. Department of
Homeland Security. Grant funding via “Operation Stonegarden” has been awarded to the San Diego
County region to facilitate regional partnerships and enhance border enforcement capabilities. In
coordination with the U.S. Customs Border Protection (CBP) and grant administration by the County
of San Diego, the Police Department has been allocated $225,000 for Operation Stonegarden 2017
funding.
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality
Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical
change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
The mission of Operation Stonegarden is to raise border security by increasing law enforcement
presence along the border, intelligence/information sharing and communication. Participating
agencies in this regional effort include the U.S. Customs and Border Protection (CBP), Immigration
and Customs Enforcement (ICE), San Diego County Sheriff’s Department, California Department of
Motor Vehicles, California Highway Patrol, California Fish and Game, San Diego County Probation
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File#:18-0179, Item#: 13.
Department and San Diego Harbor Police.
The Chula Vista Police Department is in the unique position of being geographically located in close
proximity to the border (5 miles) with three main north/south arteries traversing the city. As a result,
multiple local and federal agencies frequently ask the Police Department for assistance and
interdiction of both north and south bound traffic involved in border-related crimes. The Police
Department will continue to participate in regional efforts of border enforcement on an overtime basis.
The Department was funded $4.2 million in prior Stonegarden awards, and the 2017 funding of
$225,000 will continue those regional efforts.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section
18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code § 87100,
et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. Funds received for
Operation Stonegarden supports the goal of Strong and Secure Neighborhoods by providing
additional law enforcement presence in the community.
CURRENT YEAR FISCAL IMPACT
Approval of this resolution will result in the acceptance of $225,000 from the U.S. Department of
Homeland Security and a one-time appropriation of $25,363 to personnel services of the Police
Grants Section of the Federal Grant Fund. The funding from the U.S. Department of Homeland
Security will completely offset these costs, resulting in no net fiscal impact to the General Fund.
ONGOING FISCAL IMPACT
Adoption of this resolution will also direct staff to include $134,637 in personnel and $65,000 in
capital categories of the FY 2018/2019 proposed budget in the Police Grants Section of the Federal
Grants Fund. The funding from the U.S. Department of Homeland Security will completely offset
these costs, resulting in no net fiscal impact to the General Fund.
ATTACHMENTS
None
Staff Contact: Maritza Vargas, Police Department
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $225,000 FROM THE U.S.
DEPARTMENT OF HOMELAND SECURITY AND
APPROPRIATING $25,363 TO THE POLICE GRANTS
SECTIONS OF THE FEDERAL GRANT FUND FOR
OPERATION STONEGARDEN
WHEREAS, since the events of September 11, 2001, the interception of terrorists and
their weapons attempting entry across the nation’s borders has become the priority mission of the
U.S. Department of Homeland Security; and
WHEREAS, grant funding via “Operation Stonegarden” has been awarded by the U.S.
Department of Homeland Security to the San Diego County region to facilitate regional
partnerships and enhance border enforcement capabilities; and
WHEREAS, the Police Department has been allocated $225,000 for Operation
Stonegarden to participate in regional enforcement efforts and support the mission of the
operation; and
WHEREAS, the grant funds provided by U.S. Department of Homeland Security will
completely offset the total costs of Operation Stonegarden.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it hereby accepts the $225,000 from the U.S. Department of Homeland Security and
appropriates $25,363 to personnel services, and directs staff to include $134,637 to personnel
and $65,000 to capital categories of the FY 2018/2019 budget in the Police Grants Section of the
Federal Grant Fund for Operation Stonegarden.
Presented by Approved as to form by
Roxana Kennedy Glen R. Googins
Police Chief City Attorney
2018-05-15 Agenda Packet Page 394
City of Chula Vista
Staff Report
File#:18-0180, Item#: 14.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING $81,378
FROM THE COUNTY OF SAN DIEGO AND APPROPRIATING SAID FUNDS TO THE POLICE
GRANTS SECTIONS OF THE FEDERAL GRANTS FUND FOR REALIGNMENT RESPONSE
EFFORTS (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
In 2011, Governor Edmund G. Brown Jr. signed Assembly Bill (AB) 109 and AB 117, historic
legislation to enable California to close the revolving door of low-level inmates cycling in and out of
state prisons. This legislation provided funding to counties to develop and implement a targeted,
proactive, intelligence-based approach to control and counteract the risks associated with realigned
offenders released in San Diego County. Amendment No. 3 provides additional funding to continue to
support the efforts delineated within Assembly Bill (AB) 109.
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality
Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical
change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
In 2011, Governor Edmund G. Brown Jr. signed Assembly Bill (AB) 109 and AB 117, historic
legislation to enable California to close the revolving door of low-level inmates cycling in and out of
state prisons. It is the cornerstone of California’s solution to the U.S. Supreme Court order to reduce
the number of inmates in the state’s 33 prisons to 137.5 percent of original design capacity.
Under the Assembly Bill (AB) 109 and AB 117 newly-convicted low-level offenders without current or
prior serious or violent offenses stay in county jail to serve their sentence. This has reduced the
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prior serious or violent offenses stay in county jail to serve their sentence. This has reduced the
annual state prison admissions to less than 35,000 a year. Prior to Realignment, there were
approximately 55,000 to 65,000 new admissions from county courts to state prison. Overall, the
diversion of low-level offenders and parole violators to county jail instead of state prison has resulted
in a population decrease of about 28,000 (-17%).
The intent of the realignment response efforts is to encourage counties to develop and implement
evidence-based practices and alternatives to incarceration to limit future crimes and reduce
victimization.
The San Diego Sheriff Department has been designated as the fiscal agent of realignment response
efforts funds for the San Diego County region. A Memorandum of Agreement between the County of
San Diego and participating cities in the county has been created to outline the disbursement of
realignment funds. Again, the City of Chula Vista has been awarded funding to support operations
starting from July 1, 2017 and ending by December 31, 2019. This would be the third award granted
to the City. If City Council approves the new agreement, the funding would total $81,378 and would
be used to fund overtime operations to conduct compliance checks on San Diego County
Probationers.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section
18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code § 87100,
et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. Funds received for
realignment response efforts support the goal of Strong and Secure Neighborhoods by providing
additional law enforcement presence in the community.
CURRENT YEAR FISCAL IMPACT
Approval of this resolution will result in a one-time appropriation of $81,378 to personnel services of
the Police Grant Section of the Federal Grants Fund. The funding from the County of San Diego will
completely offset these costs, resulting in no net fiscal impact to the General Fund.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact
ATTACHMENTS
None
Staff Contact: Maritza Vargas, Police Department
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING $81,378 FROM THE COUNTY
OF SAN DIEGO AND APPROPRIATING SAID FUNDS TO
THE POLICE GRANTS SECTION OF THE FEDERAL
GRANTS FUND FOR REALIGNMENT RESPONSE EFFORTS
WHEREAS, in 2011, Governor Edmund G. Brown Jr. signed Assembly Bill (AB) 109
and AB 117 legislation which enable California to close the revolving door of low-level inmates
cycling in and out of state prisons; and
WHEREAS, this legislation implemented the 2011 Public Safety Realignment, which
provides funding to counties to develop and implement evidence-based practices and alternatives
to incarceration to limit future crimes and reduce victimization; and
WHEREAS, the San Diego Sheriff’s Department has been designated as the fiscal agent
of the Regional Realignment Response (R3) funds and has allocated an additional $81,378 to the
City of Chula Vista for overtime operations to conduct regional compliance checks on
probationers within the county; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it accepts $81,378 from the County of San Diego and appropriates $81,378 to the
personnel category of the Police Grants Section of the Federal Grants Fund for Realignment
Response efforts.
Presented by Approved as to form by
Roxana Kennedy Glen R. Googins
Chief of Police City Attorney
2018-05-15 Agenda Packet Page 398
City of Chula Vista
Staff Report
File#:18-0191, Item#: 15.
RESOLUTION OF NECESSITY OF THE CITY OF CHULA VISTA TO ACQUIRE CERTAIN REAL
PROPERTY OR INTEREST IN REAL PROPERTY BY EMINENT DOMAIN FOR THE FIRE STATION
9 REPLACEMENT PROJECT -- LOCATED AT 1095 ALPINE AVENUE (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council conduct the public hearing and adopt the resolution.
SUMMARY
This item asks City Council to approve the City’s acquisition by eminent domain of a parcel located at
1095 Alpine Avenue, Chula Vista, for the construction of the Fire Station 9 Replacement Project
(implementation of the Fire Stations Repairs/Replacements (Measure P) project). Purchase of this
property was previously approved by Council Action on December 19, 2017 (Resolution No. 17-0476)
however agreement for a voluntary sale could not be reached with the property owner. Negotiations
will continue with the property owner in an effort to conclude this acquisition in an amicable manner
but it is currently necessary to proceed with the acquisition process in order to construct the new fire
station in a timely manner. Purchase price and valuation are not a part of this Resolution and are not
to be considered in this action.
ENVIRONMENTAL REVIEW
Environmental Notice
The Project qualifies for a Categorical Exemption pursuant to the California Environmental Quality Act
StateGuidelinesSection(s)15303Class3(NewConstructionorConversionofSmallStructures),Section
15332 Class 32 (In-Fill Development Projects), and Section 15061(b)(3).
Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the
California Environmental Quality Act (CEQA) and has determined that the project qualifies for a
CategoricalExemptionpursuanttoStateCEQAGuidelinesSection(s)15303Class3(NewConstruction
or Conversion of Small Structures), Section 15332 Class 32 (In-Fill Development Projects), and Section
15061(b)(3). Thus, no further environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
Built in 1961, the current Fire Station Nine (266 East Oneida Street) is past its useful life. Over the
last few years, this Fire Station has been occupied intermittently due to sewer back up, flooding and
asbestos/mold presence. The facility lacks separate sleeping quarters, appropriate access to
multiple restrooms, and does not meet the code requirements of an Essential Services Building.
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As a result, the City contemplated options for building a new Fire Station. The Fire Department
determined that the current site at one-half acre and only 77 feet wide was not adequately sized or
configured to accommodate a modern Fire Station. The Fire Department used Deccan Software, a
powerful decision support analytics tool used to locate fire resources, to determine the best possible
location for a new Fire Station. The subject property, the preferred site identified by Deccan, and
concurrently validated by the Fire Department's management team, is superior to the current site as
it: a) achieves better geographic distribution relative to other Fire Department resources, and b)
improves the Department's ability to cover the concentration of fire and emergency medical calls for
services. This property is located at 1095 Alpine Avenue and is currently identified as Assessor’s
Parcel No. 619-100-23-00.
The site itself comprises only about 8,700 square feet (0.20 acre) but when combined with excess
City owned right-of-way to the north and west a site of approximately one acre can be created. This
size and configuration will accommodate a modern fire station. A conceptual plot of one possible
layout is attached to this report to show how the sight could be utilized, incorporating the City’s
excess land. If fire station development were determined to be infeasible or undesirable at the site,
alternative City uses include a cellular communications site, a pocket park or a staging site for public
works projects.
Based upon this analysis, staff commenced negotiations with the current owner and reached an
agreement for voluntary sale of the property to City, subject to Council approval. In December, 2017
Council approved this purchase. In the time since that action final agreement to complete the
voluntary sale/purchase could not be reached with the property owner. The City completed an
appraisal of the property and made an Offer to Acquire to the owner as required by Section 7267.2 of
the Government Code. This offer was not accepted and continued negotiations have failed to
produce an agreement.
City has conducted due diligence and investigation regarding the physical condition of the Property,
including but not limited to a Phase 1 analysis, and the legal condition of the property. The City filed
its Notice of Exemption for environmental clearance with the County of San Diego and the period for
public comment has expired. The City is now prepared to move forward with the design of this Fire
Station with the intention of proceeding to construction in late 20198 or shortly thereafter.
At this time Staff is recommending that Council approve this Resolution of Necessity so that the
formal eminent domain acquisition process can begin. Negotiations with the property owner will
continue but this action will ensure that the City can acquire the property in a timely manner so that
construction can proceed.
In order to adopt this Resolution Council must make the following findings:
(a) The public interest and necessity require the proposed Project;
(b) The proposed Project is planned or located in the manner that will be most compatible
with the greatest public good and least private injury;
(c) The property interests shown on Exhibit "A” and legally described in Exhibit “B” both
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attached hereto are necessary for the proposed Project; and
(d) The offer required by section 7267.2 of the California Government Code was made to
the owner or owners of record, or the offer has not been made because the owner(s)
cannot be located with reasonable diligence.
Purchase price and valuation are not a part of his Resolution and are not to be considered in this
action.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property
holdings within 500 feet of the boundaries of the properties which are the subject of this action.
Consequently, these items do not present a disqualifying real property-related financial conflict of
interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the
Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. This decision is in
direct alignment with the City of Chula Vista's Strategic Goal of Strong and Secure Neighborhoods,
which is critical to "ensuring a vibrant and sustainable quality of life for Chula Vista residents and
businesses."
CURRENT YEAR FISCAL IMPACT
Funds for this purchase were appropriated by previous Council Action on December 19, 2017 by
Resolution No. 17-0476. There will be no further fiscal impact in the current year.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact created by this purchase as it is a one-time expenditure. When the
City proceeds with the construction and operation of the proposed new Fire Station, those actions
would be approved by the City Council and funded by separate actions.
ATTACHMENTS
1. Exhibit “A” Legal Description and Exhibit “B” Plat
Staff Contact: Rick Ryals, Real Property Manager
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EXHIBIT "4"
LEGAL DESGRIPTION
The land referred to herein is situated in the State of California, County of San Diego and
described as follows:
All that certain real property situated in the County of San Diego, State of California, described as follows:
That portion of Lot 'l 5 in Quarter Section 120 of Chula Vista, in the City of Chula Vista, County of San
Diego, State of California, according to Map thereof No. 505, filed in the Office of the County Recorder of
San Diego County, March 13, 1 888 lying Northeasterly of the most Easterly line of Robinhood No. 2
according to the Map thereof No. 3488, flled in the Office of the County Recorder of San Diego County,
August 9, 1956 and lying Southerly of the following described center line of an 80.00 foot road:
Beginning at the intersection of Third Avenue and Fifth Street, as shown on the said Map of Chula Vista;
Thence Southeasterly along The arc of a curve tothe right having a radius bearing South 8" East
2740.00 feet from said intersection for a distance of 1498.4 feet to a point in the center line of Fourth
Avenue:
Thence continuing Southeasterly along said center line on a curye to the left, having a radius bearing
North 23"20' East 2740.00 feet from said last mentioned point, for a distance of 1498.4 feet to the
intersection of the center line of Fifth Avenue and Sixth Street.
EXCEPTING from the property described above, that portion thereof lying within the boundaries of the
following described exception Parcels "A" and "B".
PARCELA:
Beginning at the Southeasterly corner of Robinhood No. 2, according to the Map No. 3488, filed in the
Office of the County Recorder of San Diego County, said point being a point on the center line of Naples
Streeti
Thence North 71'23' East along the center line of said Naples Street, a distance of 45.'10 feet;
Thence North 'l 8'37' West a distance of 40.00 feet to a point on the Northerly line of said Naples Street;
Thence Northwesterly along the arc of a circle of 'l 5.00 foot radius, whose center bears North 18"37'
West 'l 5.00 feet from said point on the Northerly line of Naptes Street; a distance of 23.59;
Thence North 18"31' West tangent to said arc a distance of 55.77 feet to the beginning of a tangent
curve to the left with a radius of 130.00 feet;
Thence along said curve a distance of 60.09 feet to an intersection with the center line of Moss Street as
shown on Map No. 3488, said center line being on the arc ol a2740.00 foot radius curve whose center
bears Norih 4"25'33' East 2740.00 feet from said intersection;
Thence Westerly along said 2740,00 foot radius curye a distance ol 17.74 feet to an intersection with the
Easterly line of that portion of Alpine Avenue as shown on Map No. 3488;
Thence South 18'31' East along said Easterly line a distance of 175.80 feet to the point of beginning,
PARCEL B:
Commencing at the Northeasterly corner of Robinhood Subdivision No. 2, according to the Map thereof
File No.: 01180-285898
Prelim Report SCE
EIN
Paare / or Z
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EXHIBIT "A"
No. 3488, on file in the Office of the Recorder of San Diego County, being also a point on the center line
intersection of Moss Street and Alpine Avenue, said point being on the arc of a 2740.00 foot radius circle,
the center of whlch bears North 4"47'51" East a distance of 2740.00 feet from said corner;
Thence Southeasterly along the arc of said circle a distance of 17.74 feet to the TRUE POINT OF
BEGINNING;
Thence continuing along the arc of said circle a distance of 14.85 feet to a point of intersectlon with the
prolongation of the Easterly line of Alpine Avenue;
Thence South 1 8'31 '00' East along the prolongation of the Easterly line of Alpine Avenue, said line being
parallel and 30.00 feet distant from the Easterly line of said Robinhood Subdivision No. 2, a distance of
52.23 feet to a point;
thence Northwesterly along the Easterly line of. Alpine Avenue, as dedicated by Deed, recorded in the
Office of the Recorder of San Diego CountyAugust 22, 1956, Document No. 117331, Book of Official
Records 6230. Page 283, a distance of 60.09 feet to the TRUE POINT OF BEGINNING.
TOGETHER with all that portion of the Southwesterly half of Moss Street, adjoining said land on the
North, which upon vacating and closing would revert to said land by operation of law.
(End of Legal Description)
APN: 619-100-23-00
Forre Z ar l
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8,320 Square Foot Parcel, 1095 Alpine Avenue (125 lulo.rs Str.eet), Chula Viskt, CAPLAT MAP/N01619 - 10oootcorn\.r'di---t-ffitEq05T@TI]IS MAP W'S PREPARED FORtsts$JT€D FOR THE.rcCURACY OF ''}IEDATASHOIU,I- ASSESSORSl,*%"*rrr.HT-G*d-5O5 - CHULA VISTA - POA OSEC I2O7 647 ,t?64?MAPROSGoGrrl.ril corc:I,l;r2o3o5@&/-5-r\vvt'oflokl a,et1IrI7o6,6&@tr@I tfrrcbrir!,uuri----llqtftslqLBr10ob@rcFuqtTilr,..k:,::rttt\\1/PORf rr')\rYre'l- ->rr.e.-- ,!?t .,:s,\.III:"*lR@ttz&IPOR 15@,.w&14Anderson & Brabanl, lnc.t62018-05-15 Agenda PacketPage 404
RESOLUTION _________
RESOLUTION OF NECESSITY OF THE CITY OF CHULA VISTA TO
ACQUIRE CERTAIN REAL PROPERTY OR INTEREST IN REAL
PROPERTY BY EMINENT DOMAIN FOR THE FIRE STATION 9
REPLACEMENT PROJECT -- LOCATED AT 1095 ALPINE AVENUE
WHEREAS, the current Fire Station Nine (266 East Oneida Street) was built in 1961 and
is past its useful life; and
WHEREAS, this Fire Station has been occupied intermittently due to sewer back up,
flooding and asbestos/ mold presence and the facility lacks separate sleeping quarters,
appropriate access to multiple restrooms; and
WHEREAS, this Fire Station does not meet the code requirements of an Essential
Services Building and must be replaced; and
WHEREAS, the Fire Department determined that the current site at one-half acre and
only 77 feet wide was not adequately sized or configured to accommodate a modern Fire Station;
and
WHEREAS, the Fire Department using specialized software, determined this site, located
at 1095 Alpine Avenue (Assessor’s Parcel No. 619-100-23) is superior to the current site, which
cannot be used, as it: a) achieves better geographic distribution relative to other Fire Department
resources, and b) improves the Department's ability to cover the concentration of fire and
emergency medical calls for services; and
WHEREAS, no other available and suitable site could be located within the needed
service area; and
WHEREAS, pursuant to Government Code Section 7267.2 a written Offer to Acquire
was made to the owner of record and that the Offer to Acquire was based upon an approved
Appraisal; and
WHEREAS, the City has not been able to reach agreement with the property owner for
the acquisition of this property; and
WHEREAS, in order to replace the obsolete and failing Fire Station 9 in a timely and
responsible manner it is necessary to acquire this site at this time; and
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WHEREAS, on April 24, 2018 a notice of public hearing was mailed by certified and
first class mail and was hand delivered to the owner of record notifying him of his right to appear
and be heard on the matter of the City’s interest in adopting a resolution of necessity, and
WHEREAS, in accordance with California Code of Civil Procedure Section 1245.235,
the City properly noticed, for May 15, 2018, a public hearing to consider the resolution, and gave
to each person whose property is to be acquired and whose name appears on the last equalized
court assessment roll notice and a reasonable opportunity to appear at said hearing and be heard
on the matters referred to in section 1240.030 of the California Code of Civil Procedure, at which
time the public hearing was properly conducted and each person whose property is to be
acquired by eminent domain was afforded an opportunity to be heard on said matters; and
WHEREAS, at such public hearing the City considered all of the evidence submitted
including public testimony and all relevant staff reports, and all evidence relating to the need for
the Project and for the property, all of which is incorporated herein by reference; and
WHEREAS, providing the citizens of Chula Vista with sufficient and safe fire protection
and related emergency services is of critical importance to the City of Chula Vista, as is
providing safe, modern and code-compliant facilities for City’s fire services staff; and
WHEREAS, the City possess the right to acquire said property by the use of eminent
domain pursuant to the California Constitution and the California Eminent Domain Law,
California Government Code Sections 37350 and 37350.5, Code of Civil Procedure Sections
1230.010 et seq., , and in accordance with California Code of Civil Procedure Section 1240.030
which provides that the power of eminent domain may be exercised to acquire property upon
following all proper procedures and making the required findings.
NOW, THEREFORE, the City Council of the City of Chula Vista does hereby find,
resolve and determine, by a vote of not less than two-thirds of its members, as follows:
SECTION 1. Compliance with California Code of Civil Procedure and California
Environmental Quality Act. This project has been previously analyzed for environmental
impact purposes and a Notice of Exemption was filed pursuant to California Environmental
Quality Act (CEQA) Guidelines Section 15303 Class 3, Section 15332 Class 32 and Section
15061 (b) (3).
SECTION 2. Public Use. The public use for which the real property is to be acquired is for
the construction and operation of a Fire Station in the City of Chula Vista, San Diego County,
California, and all uses necessary, incidental or convenient thereto in connection with the Fire
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Station 9 Replacement Project (implementation of the Fire Stations Repairs/Replacements
(Measure P) project). The Project will replace an obsolete and failing fire station with a new
modern facility which will provide for a higher level of fire service and increase public safety
SECTION 3. Description of Property. Attached and marked as Exhibits “A” and “B” hereto
are the legal descriptions and depictions of the following property interests required for the
Project:FEE INTEREST IN ASSESSOR’S PARCEL NUMBER 619-100-23-00
SECTION 4. Findings. Based upon the evidence presented at the hearing, the City of Chula
Vista hereby finds and determines each of the following:
(a) The public interest and necessity require the proposed Project;
(b) The proposed Project is planned or located in the manner that will be most
compatible with the greatest public good and least private injury;
(c) The subject property interests described in Exhibits "A” and “B", and as further
described and limited in this resolution of necessity, are necessary for the
proposed Project; and
(d) The offer required by section 7267.2 of the California Government Code, together
with the accompanying statement of and summary of the basis for the amount
established as just compensation, was made to the owner or owners of record, or
the offer has not been made because the owner(s) cannot be located with
reasonable diligence, which offer and accompanying statement/summary were in
a form and contained all of the factual disclosures provided by Government Code
Section 7267.2.
(e) All conditions and statutory requirements necessary to exercise the power of
eminent domain (“the right to take”) to acquire the property described herein have
been complied with by City of Chula Vista.
SECTION 5. Use Not Unreasonably Interfering with Existing Public Use(s). Some or all of
the real property to be acquired may be subject to easements and rights-of-way appropriated to
existing public uses. In the event the use or uses will not unreasonably interfere with or impair
the continuance of the public use as it now exists or may reasonably be expected to exist in the
future, counsel for the City of Chula Vista is authorized to acquire the real property subject to
such existing public use(s) pursuant to section 1240.510 of the California Code of Civil
Procedure.
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SECTION 6. More Necessary Public Use. Some or all of the real property to be acquired may
be devoted to other public uses or easements and rights-of-way appropriated to existing public
uses. To the extent that the herein described use or uses will unreasonably interfere with or
impair the continuance of the public use as it now exists or may reasonably be expected to exist
in the future, the City of Chula Vista finds and determines that the herein described use or uses
are more necessary than said existing public use pursuant to section 1240.610 of the California
Code of Civil Procedure.
SECTION 7. Further Activities. Counsel for the City of Chula Vista is hereby authorized to
file legal proceedings necessary to acquire the hereinabove described real property in the name
of and on behalf of the City of Chula Vista by eminent domain, and counsel is authorized to
institute and prosecute such legal proceedings as may be required in connection therewith. Legal
counsel is further authorized to take such steps as may be authorized and required by law, and to
make such deposits as may be required by order of court, to permit the City to take possession of
and use said real property at the appropriate time to ensure timely construction of the public
Project. Counsel is further authorized to correct any errors or to make or agree to non-material
changes in the legal description of the real property that are deemed necessary for the conduct of
the condemnation action or other proceedings or transaction required to acquire the subject real
property. Counsel is further authorized to reduce or modify the extent of the interests or property
to be acquired so as to reduce the compensation payable in the action where such change would
not substantially impair the construction and operation for the Project for which the real property
is being acquired.
SECTION 8. Appropriation of Necessary Proceeds. The proceeds required to fund this
Project are currently budgeted in City’s Capital Improvement Projects (CIP) as Fire Stations
Repairs/ Replacements (Measure P).
SECTION 9. Independent Judgement. The City Council hereby finds and determines that
their approval of eminent domain proceedings, adoption of this resolution and related findings
made in connection therewith, were the product of their exercise of their independent review and
judgement.
PASSED, APPROVED AND ADOPTED this ___ day of May 2018.
______________________
Mayor
ATTEST:
________________________________
CITY CLERK
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Presented by Approved as to form by
Eric Crockett Glen R. Googins
Director of Economic Development City Attorney
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City of Chula Vista
Staff Report
File#:18-0075, Item#: 16.
A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE
ISSUANCE, SALE AND DELIVERY OF MULTI-FAMILY HOUSING REVENUE BONDS OF
THE CHULA VISTA HOUSING AUTHORITY FOR TROLLEY TERRACE AND CORDOVA
VILLAGE AFFORDABLE APARTMENTS
B. RESOLUTION OF THE CHULA VISTA HOUSING AUTHORITY REGARDING ITS
INTENTION TO ISSUE TAX-EXEMPT OBLIGATIONS FOR A PROPOSED ACQUISITION
AND REHABILITATION OF EXISTING AFFORDABLE UNITS AT TROLLEY TERRACE AND
CORDOVA VILLAGE AFFORDABLE APARTMENTS
RECOMMENDED ACTION
Council conduct the public hearing, adopt resolution A, and Authority adopt resolution B.
SUMMARY
The City of Chula Vista has received a request from South Bay Community Services (“Project
Sponsor”) on behalf of Cordova Village L.P. and Trolley Terrace L.P. to consider the issuance of tax
exempt obligations to finance the acquisition and rehabilitation of 58 existing affordable units at
Trolley Terrace and Cordova Village Apartments (The “Project”). The Project is located at 750 ADA
Street and 1280 East J Street. The rehabilitation would improve the properties and extend the term
of the affordable rents for 55 years (currently scheduled to expire in 2018).
ENVIRONMENTAL REVIEW
Environmental Notice
The Project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 Existing
Facilities of the California Environmental Quality Act State Guidelines because it involves the
rehabilitation of existing facilities which would not result in an expansion of the existing uses.
Environmental Determination
The Project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 Existing
Facilities of the California Environmental Quality Act State Guidelines because it involves the
rehabilitation of existing facilities which would not result in an expansion of the existing uses.
BOARD/COMMISSION RECOMMENDATION
On April 25, 2018, the Housing Advisory Commission voted (4-0) to recommend the issuance of tax-
exempt private activity bonds in an aggregate amount not to exceed $8 million for the acquisition and
rehabilitation of the Project and the City Council and Chula Vista Housing Authority take all necessary
actions to facilitate its financing.
DISCUSSION
The Project Sponsor is requesting that the Chula Vista Housing Authority (“Housing Authority”) be the
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The Project Sponsor is requesting that the Chula Vista Housing Authority (“Housing Authority”) be the
conduit bond issuer for tax-exempt private activity bonds for multi-family projects (“tax-exempt
bonds”) in an aggregate amount not to exceed $8 million for the acquisition and rehabilitation of the
Project (Attachment 1: Locator Map). An application will be submitted by May 18, 2018, to the
California Debt Limit Allocation Committee (CDLAC), the State bonding authority, and for the
companion tax credits. The bond allocation and tax credit contributions will be used to substantially
finance the Project.
In compliance with Section 147(f) of the Internal Revenue Service Code of 1986, reflecting the Tax
Equity and Fiscal Responsibility Act of 1982 (TEFRA), a public hearing (the “TEFRA hearing”) by the
elected legislative body of the jurisdiction must be held to provide the public an opportunity to
comment on the use of the tax-exempt funds to finance the Project. Proof of a public hearing to be
held within 30 days of application to CDLAC is required for consideration of a bond allocation.
At this time, the City Council is asked to hold a public hearing regarding whether the Housing
Authority should issue tax exempt bonds to finance the Project and to approve the issuance, sale,
and delivery of multi-family housing revenue bonds by the Housing Authority at such time the bond
allocation is received from CDLAC. Additionally, it is requested that the Housing Authority adopt a
resolution expressing its preliminary intention to issue bonds. Such preliminary actions are
necessary in order to allow the Housing Authority to submit an application to CDLAC on behalf of the
Project Sponsor and to allow the Project Sponsor to receive reimbursement out of bond proceeds for
cost it incurs leading up to the actual sale of the bonds. If successful in obtaining a bond allocation
from CDLAC, the Housing Authority will then consider final approval of loan documents for the
issuance of bonds.
Resolutions presented for the City Council’s and Housing Authority’s consideration have been
prepared by Stradling Yocca Carlson & Rauth, serving as bond counsel for the City of Chula Vista
and its Housing Authority. All future bond documents will also be prepared by bond counsel.
The Development Team
The Project Sponsor, South Bay Community Services (SBCS), is a 501(c)(3) non-profit organization
and the current owner of both Trolley Trestle and Cordova Village apartments. A new partnership is
proposed for the acquisition and rehabilitation of the Project. Upon close of escrow, the Project
Sponsor will create a new limited partnership, Cordova Trolley, LP to own and operate the Project.
The Project Sponsor will serve as the General Partner, retaining a level of ownership and handling
management of the properties. SBCS will be responsible for managing the rehabilitation of the
properties through completion and cost certification, with a general contractor overseeing
construction. SBCS will also be responsible going forward for preparation of annual property-specific
budgets, marketing, leasing, overseeing property management and maintenance, income-
qualification of residents, annual reporting to investor and lender, payments to lenders and provide
resident services. Hyder Property Management will serve as the day to day property manager. Red
Stone Capital Equity Partners, LLC shall serve as the managing general partner, providing the
necessary tax credit equity investment for financing.
Trolley Terrace and Cordova Village represents the only bond financed and tax credit financed
affordable housing developments within SBCS’ portfolio. SBCS currently owns and operates several
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emergency and transitional housing developments for at-risk and homeless youth and families.
The Proposed Project
The Project consists of two affordable housing projects (Trolley Terrace and Cordova Village
Apartments), proposed as a “scattered sites” acquisition and rehabilitation for financing. Trolley
Terrace is located at 750 Ada Street in south western Chula Vista and Cordova Village is located at
1280 East J Street in eastern Chula Vista. These projects were originally built and financed using
former Redevelopment funds and HOME Investment Partnership Act funds from the U.S. Department
of Housing and Urban Development (HUD). The twenty-year HOME affordability requirements
originally set to expire in 2018 will be extended with the refinancing and proposed assumption of the
existing HOME loan. The City and Housing Authority restrictions expire in 2052.
Given the age and the desire to preserve the affordability, the Project Sponsor is proposing the
acquisition and rehabilitation of both properties as “scattered sites” using 4 percent tax credits and
tax-exempt bond financing to ensure continued long-term use and viability. The existing ownership,
Cordova Village L.P. and Trolley Terrace L.P., will sell the project to the new partnership, inclusive of
the Project Sponsor as the General Partner, and complete the rehabilitation. Costs for acquisition of
the Project is estimated at $7.1 million.
Since the original construction of both projects, no comprehensive renovations have been completed.
Both properties are in need of additional capital improvements and repairs.
A Physical Needs Assessment has been completed for the Project, which will serve as the basis for a
more detailed scope of work to be competitively bid by a general contractor and value engineered to
the final sources of funds available for the rehabilitation. The scope of work will address the
immediate physical needs and will extend the useful life of the building systems, reduce operating
costs and improve energy efficiency. Priority items to be addressed across the portfolio include:
1. Site
§Sealing and restriping of parking areas
2. Improved Energy Efficiency
§Replace all appliances with Energy Star rated appliances
§Replace all windows with dual pane windows
§Replace lighting with LED or other high efficiency lighting
3. Other construction/replacement activities
§Replace/repair dry rot and termite infested wood
§Replace/repair roofing to have a 25+ year minimum life
§Repair/replace carpets/tile
§Replace kitchen/bathroom cabinetry and fixtures
§Replacement of water heaters, as needed
§Replace/repair playground equipment
4. Accessibility
§10 percent of units required as fully accessible
§4 percent of units with accommodations for visual and hearing impaired
§ADA compliant handrails
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§Accessible parking stalls
As rehabilitation is performed on each unit, households may require temporary relocation off-site.
Such relocation expenses are contemplated in the rehabilitation costs and will be covered by the
Partnership.
The current estimate of rehabilitation costs is $2,244,616. With 58 units, this equates to an average
of $38,700 per unit. This figure includes the estimated costs to address the scope of work proposed,
temporary relocation, general contactor’s profit/overhead/general requirements, and a construction
contingency of 10 percent of direct costs.
Income & Rent Restrictions
For the bond financing, Section 142 (d) of the Internal Revenue Services Code requires either a
minimum of 20 percent of the rental units in the Project to be available for occupancy by persons or
families whose income does not exceed 50 percent of the area median income (AMI) for the San
Diego Primary Metropolitan Statistical Area, or alternatively, at least 40 percent of the rental units are
required to be available for occupancy by persons or families whose income does not exceed 60
percent of the AMI. The units are made available at affordable rents established by the applicable
State law.
The project will exceed the affordability requirements with 56 units currently restricted as affordable
for very low-income households at 50 percent of AMI and low income households at 60 percent of
AMI, with one unit reserved for the resident manager within each property, see Table 1. The Project
proposes to maintain the existing income and rent restrictions for Cordova Village and Trolley Terrace
for fifty-five years from the effective date of the bond financing agreements, exceeding the existing
affordability period ending 2052. These income and rent restrictions will be outlined within a bond
regulatory agreement to be recorded against the property.
Table 1: Affordability Restrictions
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Compliance with the income and rent restrictions will be subject annually to a regulatory audit and
annual tax credit certification. Compliance with strict property management policies and procedures
will ensure that income and rent restrictions will be maintained for the full 55-year compliance period.
Proposed Financing of Project
The Tax Exempt Multi-Family Revenue Bonds and Low Income Housing Tax Credit financing will
support the majority of the estimated $12.7 million total development cost of the Project. The Project
Sponsor has requested the Housing Authority consider the issuance of a maximum of $8 million in
tax exempt bonds to be privately placed with Red Stone Equity Partners. It is anticipated that the
bonds will be used for both construction and permanent financing of the Project.
The $8,000,000 maximum bond allocation is approximately 15 percent higher than the amount for
which the Project is being underwritten for financing, which is $7,000,000. This maximum allocation
represents a slight cushion to account for possible increases in the bond amount due to increases in
rehabilitation costs or decreases in the assumed interest rate. The bond amount that is ultimately
issued will be based upon project costs, revenues and interest rates prevailing at the time of bond
issuance.
The Project Sponsor will also apply for approximately $3.33 million in Low Income Housing Tax
Credits. The balance of needed funds for the construction and permanent financing of the Project is
proposed to be provided by an assumption of the existing City and Housing Authority loans, with an
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proposed to be provided by an assumption of the existing City and Housing Authority loans, with an
estimated outstanding loan balance of $2,741,200, to be subordinate to the new financing sources,
and other contributions. The final assumption of the City and Housing Authority loans and funds from
other sources will be determined prior to Bond loan closing. A summary of the estimated sources and
uses submitted by the Project Sponsor is provided in Attachment 2.
The bonds will meet all requirements of the Housing Authority’s Multifamily Housing Revenue Bond
Program and will fully comply with the City bond disclosure policies. Ross Financial LLC will serve as
the Housing Authority’s financial advisor and Stradling Yocca Carlson & Rauth LLP as bond counsel
to work on the Project.
Final approval of the issuance of the bonds and the related bond documents will be presented to the
City and its Housing Authority for approval at such time Project Sponsor is successful in receiving a
commitment from CDLAC for a bond allocation.
Article 34
Article 34 of the California Constitution requires that voter approval be obtained before any “state
public body” develops, constructs or acquires a “low rent housing project”. The Project is existing
and therefore,exempt from the requirement.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and Housing Authority and has found no
property holdings within 500 feet of the boundaries of the property which is the subject of this action.
Staff is not independently aware, and has not been informed by any City Council or Housing Authority
member, of any other fact that may constitute a basis for a decision maker conflict of interest in this
matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The development and
provision of quality affordable housing for low-income families and seniors within master planned
communities supports the Economic Vitality goals as it promotes the development quality
neighborhoods that provide a full complement of uses and services in a balanced fashion. With only
16 percent of the housing within the areas east of Interstate-805 available as multifamily housing, the
Cordova Village Apartments and Trolley Terrace Townhomes Project will preserve 40 rental units
within the Rancho Del Rey community and 18 units in the Palomar Gateway Area of Southwest
Chula Vista and will preserve the availability of housing opportunities for all economic segments of
the community for an additional 55 years. With 57 percent of Chula Vista households earning less
than the U.S. Department of Housing and Urban Development’s area median income, the
development of affordable housing addresses the City’s Connected Community goals as it provides
housing to meet residents’ needs and priorities.
CURRENT YEAR FISCAL IMPACT
Bond Financing is a self-supporting program with the borrower responsible for the payment of all
costs of issuance and other costs of the bonds. The Housing Authority will receive compensation for
its services in issuing bonds by charging an origination fee equal to 20 basis points (0.20%) of the
total original principal amount of the bonds to be issued, with a minimum fee of $15,000. The
City of Chula Vista Printed on 5/10/2018Page 6 of 7
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File#:18-0075, Item#: 16.
total original principal amount of the bonds to be issued, with a minimum fee of $15,000. The
issuance fee to be paid to the Housing Authority by the owner will be $15,000.
ONGOING FISCAL IMPACT
The Multifamily Housing Revenue Bond program is self-supporting. Staff costs associated with
monitoring compliance of the regulatory restrictions and administration of the outstanding bonds will
be reimbursed from an annual administrative fee of $17,000 paid to the Housing Authority by the
owner.
ATTACHMENTS
1. Locator Map
2. Summary of Sources and Uses
3. Disclosure Form
Staff Contact: Leilani Hines, Housing Manager, Chula Vista Housing
City of Chula Vista Printed on 5/10/2018Page 7 of 7
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE ISSUANCE, SALE AND
DELIVERY OF MULTIFAMILY HOUSING REVENUE
BONDS OF THE CHULA VISTA HOUSING AUTHORITY
FOR TROLLEY TERRACE AND CORDOVA VILLAGE
AFFORDABLE APARTMENTS
WHEREAS, the Chula Vista Housing Authority (the “Authority”) intends to issue not to
exceed $8,000,000 aggregate principal amount of multifamily housing revenue bonds (the
“Bonds”) to finance the acquisition and rehabilitation of an existing 18-unit multifamily rental
housing project known as Trolley Terrace apartments located at 750 Ada Street and a 40-unit
multifamily rental housing project known as Cordova Village apartments located at 1280 East J
Street (the “Project”) in the City of Chula Vista, California (the “City”); and
WHEREAS, the Project will be owned and/or operated by Cordova Trolley L.P., or
another limited partnership affiliated with South Bay Community Services (the “Owner”); and
WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986, as
amended (the “Code”), the Bonds are required to be approved, following a public hearing, by an
elected representative of the governmental unit having jurisdiction over the area in which the
Project is located; and
WHEREAS, the Project is located wholly within the geographic jurisdiction of the City;
and
WHEREAS, the City Council (the “City Council”) is the elected legislative body of the
City; and
WHEREAS, the City has caused a notice to appear in the Star News, which is a
newspaper of general circulation in the City, on April 27, 2018 to the effect that a public hearing
would be held by the City Council on May 15, 2018, regarding the issuance of the Bonds by the
Authority; and
WHEREAS, on May 15, 2018, the City Council held said public hearing, at which time
an opportunity was provided to present arguments both for and against the issuance of the Bonds.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Chula
Vista, as follows:
Section 1. The City Council does hereby find and declare that the above recitals are true
and correct.
Section 2. Pursuant to Section 147(f) of the Code, the City Council hereby approves
the issuance of the Bonds by the Authority in one or more series, in an aggregate principal
amount not to exceed $8,000,000 and with a final maturity not later than 45 years from the date
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Resolution No. _________
Page 2
of issuance to finance the acquisition, rehabilitation and equipping of the Project. It is the
purpose and intent of the City Council that this Resolution constitutes approval of the issuance of
the Bonds by the applicable elected representative of the governmental unit having jurisdiction
over the area in which the Project is located, in accordance with said Section 147(f).
Section 3. This Resolution shall take effect from and after its adoption.
Presented by Approved as to form by
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
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RESOLUTION NO.
RESOLUTION OF THE CHULA VISTA HOUSING
AUTHORITY REGARDING ITS INTENTION TO ISSUE TAX-
EXEMPT OBLIGATIONS FOR A PROPOSED ACQUISITION
AND REHABILITATION OF EXISTING AFFORDABLE
UNITS AT TROLLEY TERRACE AND CORDOVA VILLAGE
AFFORDABLE APARTMENTS
WHEREAS, the Chula Vista Housing Authority (the “Issuer”) desires to assist Cordova
Trolley, LP, a California limited partnership, or another limited partnership affiliated with South
Bay Community Services (the “Applicant”) in financing the costs of acquiring and rehabilitating
an 18-unit multifamily rental housing project known as Trolley Terrace apartments and a 40-unit
multifamily rental housing project known as Cordova Village apartments, as described in Exhibit
A attached hereto and incorporated herein (the “Projects”); and
WHEREAS, the Issuer intends to assist in the financing of the acquisition and
rehabilitation of the Projects or portions of the Projects with the proceeds of the sale of
obligations the interest upon which is excluded from gross income for federal income tax
purposes (the “Obligations”), which Obligations are expected to be issued pursuant to Chapter
1of Part 2 of Division 24 the Health and Safety Code of the State of California; provided,
however, that this Resolution shall not authorize the issuance of the Obligations and provided
further that neither the faith and credit nor the taxing power of the Issuer shall be pledged to
repay such Obligations if, and when, authorized; and
WHEREAS, prior to the issuance of the Obligations the Applicant expects to incur
certain expenditures with respect to the Project from its own available monies which
expenditures it desires to have reimbursed from a portion of the proceeds of the sale of the
Obligations if, and when, issued; and
WHEREAS, Section 146 of the Internal Revenue Code of 1986, as amended (the
“Code”) limits the amount of multifamily housing revenue bonds that may be issued in any
calendar year by entities within a state and authorizes the governor or the legislature of a state to
provide the method of allocation within the state; and
WHEREAS, Chapter 11.8 of Division 1 of Title 2 of the Government Code of the State
of California (the “Government Code”) governs the allocation of the state ceiling among
governmental units in the State of California having the authority to issue multifamily housing
revenue bonds; and
WHEREAS, Section 8869.85 of the Government Code requires a local agency to file an
application with the California Debt Limit Allocation Committee (“CDLAC”) prior to the
issuance of multifamily housing revenue bonds; and
WHEREAS, the Issuer desires to apply to CDLAC for an allocation for the Project.
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Resolution No. _________
Page 2
NOW, THEREFORE, THE BOARD OF COMMISSIONERS OF THE CHULA VISTA
HOUSING AUTHORITY DOES HEREBY RESOLVE, ORDER AND DETERMINE AS
FOLLOWS:
SECTION 1. The Issuer has received an application for the financing of the Projects on
behalf of the Applicant (the “Application”). The Applicant will incur costs with respect to the
Projects prior to the issuance of the Obligations. The Issuer hereby states its intention and
reasonably expects to reimburse to the Applicant for such costs with proceeds of the Obligations;
provided, however, that nothing herein obligates the Issuer to issue the Obligations or provides
the Applicant with any legal right to compel the issuance of the Obligations, which decision
remains in the final discretion of the Issuer. Exhibit A describes the general character, type,
purpose, and function of the Projects.
SECTION 2. The reasonably expected maximum principal amount of the Obligations is
$8,000,000. This Resolution is being adopted no later than sixty (60) days after the date (the
“Expenditure Date or Dates”) that the Applicant will expend moneys for the portion of Projects
costs to be reimbursed from proceeds of the Bonds.
The expected date of issue of the Bonds is within eighteen (18) months of the later of the
Expenditure Date or Dates and the first date the Projects are placed in service and, in no event,
later than three years after the Expenditure Date or Dates.
SECTION 3. Proceeds of the Bonds to be used to reimburse for Project costs are not
expected to be used directly or indirectly to pay debt service with respect to any obligation or to
be held as a reasonably required reserve or replacement fund with respect to an obligation of the
Issuer or any entity related in any manner to the Issuer, or to reimburse any expenditure that was
originally paid with the proceeds of any obligation, or to replace funds that are or will be used in
such manner.
SECTION 4. This Resolution is consistent with the budgetary and financial
circumstances of the Issuer, as of the date hereof. No monies from sources other than the
Obligations are, or are reasonably expected to be reserved, allocated on a long-term basis, or
otherwise set aside by the Issuer (or any related party) pursuant to their budget or financial
policies with respect to the portion of the Project costs to be financed with the Obligations. This
Board of Commissioners is not aware of any previous adoption of official intents by the Issuer
that have been made as a matter of course for the purpose of reimbursing expenditures relating to
the Projects and for which tax-exempt obligations have not been issued.
SECTION 5. This Resolution is adopted as official action of the Issuer in order to
comply with Treasury Regulation § 1.103-8(a)(5) and Treasury Regulation § 1.150-2 and any
other regulations of the Internal Revenue Service relating to the qualification for reimbursement
of expenditures incurred prior to the date of issue of the Obligations, is part of the Issuer’s
official proceedings, and will be available for inspection by the general public at the main
administrative office of the Issuer.
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Resolution No. _________
Page 3
SECTION 6. The officers and employees of the Authority are hereby authorized and
directed to apply to CDLAC for a portion of the private activity bond allocation set aside for the
calendar year 2018 for the Projects in an aggregate amount not to exceed $8,000,000, to collect
from the Applicant and hold pursuant to CDLAC requirements the required CDLAC deposit for
the requested allocation, and to certify to CDLAC that such amount has been placed on deposit
in an account in a financial institution. Because the amount of private activity bond allocation is
limited, such officers are also authorized to resubmit the application to CDLAC one or more
times during the calendar year 2018 in the event the application is denied by CDLAC.
SECTION 7. The officers and employees of the Issuer are hereby authorized and
directed, jointly and severally, to take any actions and execute and deliver any and all documents
which any of them deem necessary or advisable, with the advice of City Attorney, in order to
effectuate the purposes of this Resolution, and such actions previously taken by such officers and
employees are hereby ratified and confirmed; provided that the terms and conditions under
which the Bonds are to be issued and sold must be approved by this Board in the manner
provided by law prior to the sale of the Bonds.
SECTION 8. All the recitals in this Resolution are true and correct.
SECTION 9. This Resolution shall take effect immediately upon its adoption.
Presented by Approved as to form by
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services Legal Counsel
2018-05-15 Agenda Packet Page 429
EXHIBIT A
DESCRIPTION OF PROJECT
Two multifamily rental housing projects totaling 58 units known as “Trolley Terrace”
apartments (18 units) located at 750 Ada Street and “Cordova Village” apartments (40 units)
located at 1280 East J Street in the City of Chula Vista, California.
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Exhibit A
Location Map
Site A 750 Ada Street
Chula Vista, CA 91911
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Exhibit A
Site B 1280 E J Street
Chula Vista, CA 91910
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Attachment 2
Cost Funds Financing Gap
Project Cost:
Acquisition $7,093,057
Structures & Site Improvements $1,944,056
Design/Engineering $265,000
Construction Contingency $300,560
Permits & Fees $22,400
Fees, Financing Costs $560,530
Reserves, Legal, Audit $684,682
Other $443,000
Developer Fees $1,381,400
Subtotal $12,694,685
Sources of Funds
Tax Credit Equity 3,332,715
Permanent Loan 3,750,000
Subtotal $ 7,082,715 (5,611,970)$
Subsidies
Deferred Developer Fee 79,064
Seller Carryback 2,001,154
Project Reserves 513,057
Project NOI 175,000
Housing Authority Loan (LMIHAF)695,668*
City Loan (HOME) 2,148,027*
Subtotal 5,611,970$
TOTAL 12,694,685$ 12,694,685$ -$
Project Dus 58
Project Cost 12,694,685$
Cost per Unit 218,873.88$ per unit
City/Housing Authority Subsidy per Unit 49,029$ per unit
City HOME Subsidy per Unit @ 11 Units 195,275$ per unit
Housing Authority Leveraging $1 to $18
TOTAL City/HA Leveraging $1 to $4
City HOME Leveraging $1 to $6
TROLLEY/CORDOVA AFFORDABLE HOUSING
58 Units
PROFORMA SUBSIDY ANALYSIS
ESTIMATE
Subsidy Layering SBCS 2018/ Summary Proforma 2018_05 Revised: 05/2018
*The final assumption of the City and Housing Authority loans and funds from other sources will be determined prior to
Bond loan closing.
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D e v e l o p m e n t S e r v i c e s D e p a r t m e n t
Housing Division Development Processing
AFFORDABLE HOUSING APPLICATION | Part V
Disclosure Statement
Pursuant to City Council Policy 101-01, prior to any action on a matter that requires
discretionary action by the City Council, Planning Commission or other official legislative body
of the City, a statement of disclosure of certain ownerships, financial interests, payments, and
campaign contributions must be filed. The following information must be disclosed:
1. List the names of all persons* having a financial interest in the project that is the subject of
the application, project or contract (e.g., owner, applicant, contractor, subcontractor,
material supplier).
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2. If any person* identified in section 1. is a corporation or partnership, list the names of all
individuals with an investment of $2000 or more in the entity.
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3. If any person* identified in section 1. is a non-profit organization or trust, list the names of
any person who is the director of the non-profit organization or the names of the trustee,
beneficiary and trustor of the trust.
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4. Please identify every person,* including any agents, employees, consultants, or independent
contractors, whom you have authorized to represent you before the City in this matter.
William Drewes Click here to enter text.
Babak Sammak Click here to enter text.
Roland Greene Click here to enter text.
2018-05-15 Agenda Packet Page 440
D e v e l o p m e n t S e r v i c e s D e p a r t m e n t
Housing Division Development Processing
AFFORDABLE HOUSING APPLICATION | Part V
Disclosure Statement – Page 2
5. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this
contract, project or application, had any financial dealings with an official** of the City of
Chula Vista as it relates to this contract, project or application within the past 12 months?
☐ Yes ☒ No
If yes, briefly describe the nature of the financial interest the official** may have in this contract.
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6. Has any person* anyone identified in 1., 2., 3., or 4., above, or otherwise associated with this
contract, project or application, made a campaign contribution of more than $250 within the past
twelve (12) months to an official of the City of Chula Vista?
☐ Yes ☒ No
If Yes, briefly describe the nature of the financial interest the official** may have in this
contract.
Click here to enter text.
7. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this contract,
project or application, provided more than $440 (or an item of equivalent value) to an official** of
the City of Chula Vista in the past twelve (12) months? (This includes any payment that confers a
personal benefit on the recipient, a rebate or discount in the price of anything of value, money to
retire a legal debt, gift, loan, etc.)
☐ Yes ☒ No
If Yes, which official** and what was the nature of item provided?
Click here to enter text.
8. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this contract,
project or application, been a source of income of $500 or more to an official** of the City of Chula
Vista in the past twelve (12) months?
☐ Yes ☒ No
If yes, which official** and the nature of the item provided?
Click here to enter text.
2018-05-15 Agenda Packet Page 441
D e v e l o p m e n t S e r v i c e s D e p a r t m e n t
Housing Division Development Processing
AFFORDABLE HOUSING APPLICATION | Part V
Disclosure Statement – Page 3
April 13, 2018
Date Signature of Contractor/Applicant
Babak Sammak
Print or type name of Contractor/Applicant
* Person is identified as: any individual, firm, co-partnership, joint venture, association, social club,
fraternal organization, corporation, estate, trust, receiver, syndicate, any other county, city,
municipality, district, or other political subdivision, or any other group or combination acting as a
unit.
** Official includes, but is not limited to: Mayor, Council member, Planning Commissioner, Member
of a board, commission, or committee of the City, and City employees or staff members.
*** This Disclosure Statement must be completed at the time the project application, or contract, is
submitted to City staff for processing, and updated within one week prior to consideration by the
legislative body.
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Development Services Department
Housing Division I Development Processing
CnYOF
CHULA VISTA
Disclosure Statement
AFFORDABLE HOUSING APPLICATION I Part V
Pursuant to City Council Policy 101-01, prior to any action on a matter that requires
discretionary action by the City Council, Planning Commission or other official legislative body
of the City, a statement of disclosure of certain ownerships, financial interests, payments, and
campaign contributions must be filed. The following information must be disclosed:
1. List the names of all persons* having a financial interest in the project that is the subject of
the application, project or contract (e.g., owner, applicant, contractor, subcontractor,
material supplier).
Advantage Environmental Consultants,
LLC
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2. If any person* identified in section 1. is a corporation or partnership, list the names of all
individuals with an investment of $2000 or more in the entity.
Dan Weis Click here to enter text.
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3. If any person* identified in section 1. is a non-profit organization or trust, list the names of
any person who is the director of the non-profit organization or the names of the trustee,
beneficiary and trustor of the trust.
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4. Please identify every person,* including any agents, employees, consultants, or independent
contractors, whom you have authorized to represent you before the City in this matter.
Dan Weis Click here to enter text.
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enter !c>J. Click here to enter text
2018-05-15 Agenda Packet Page 449
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CllYOF
CHULA VISTA
Development Services Department
Housing Division I Development Processing
AFFORDABLE HOUSING APPLICATION I Part V
Disclosure Statement-Page 2
5. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this
contract, project or application, had any financial dealings with an official** of the City of
Chula Vista as it relates to this contract, project or application within the past 12 months?
0 Yes No
If yes, briefly describe the nature of the financial interest the official** may have in this contract.
6. Has any person* anyone identified in 1., 2., 3., or 4., above, or otherwise associated with this
contract, project or application, made a campaign contribution of more than $250 within the past
twelve (12) months to an official of the City of Chula Vista?
0 Yes No
If Yes, briefly describe the nature of the financial interest the official** may have in this
contract.
7. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this contract,
project or application, provided more than $440 (or an item of equivalent value) to an official** of
the City of Chula Vista in the past twelve (12) months? (This includes any payment that confers a
personal benefit on the recipient, a rebate or discount in the price of anything of value, money to
retire a legal debt, gift, loan, etc.)
0 Yes No
If Yes, which official** and what was the nature of item provided?
8. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this contract,
project or application, been a source of income of $500 or more to an official** of the City of Chula
Vista in the past twelve (12) months?
0 Yes No
If yes, which official** and the nature of the item provided?
Click here to enter text.
2018-05-15 Agenda Packet Page 450
Development Services Department
Housing Division I Development Processing
CllYOF
CHULA VISTA AFFORDABLE HOUSING APPLICATION I Part V
Disclosure Statement-Page 3
4/17/18
Date Signature of Contractor/ Applicant
*
Dan Weis, Branch Manager
Print or type name of Contractor/Applicant
Person is identified as: any individual, firm, co-partnership, joint venture, association, social club,
fraternal organization, corporation, estate, trust, receiver, syndicate, any other county, city,
municipality, district, or other political subdivision, or any other group or combination acting as a
unit.
** Official includes, but is not limited to: Mayor, Council member, Planning Commissioner, Member
of a board, commission, or committee of the City, and City employees or staff members.
***This Disclosure Statement must be completed at the time the project application, or contract, is
submitted to City staff for processing, and updated within one week prior to consideration by the
legislative body.
2018-05-15 Agenda Packet Page 451
Development Services Department
Housing Division Development Processing
AFFORDABLE HOUSING APPLICATION | Part V
Disclosure Statement
Pursuant to City Council Policy 101-01, prior to any action on a matter that requires discretionary
action by the City Council, Planning Commission or other official legislative body of the City, a
statement of disclosure of certain ownerships, financial interests, payments, and campaign
contributions must be filed. The following information must be disclosed:
1. List the names of all persons* having a financial interest in the project that is the subject of
the application, project or contract (e.g., owner, applicant, contractor, subcontractor,
material supplier).
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
2. If any person* identified in section 1. is a corporation or partnership, list the names of all
individuals with an investment of $2000 or more in the entity.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
3. If any person* identified in section 1. is a non-profit organization or trust, list the names of
any person who is the director of the non-profit organization or the names of the trustee,
beneficiary and trustor of the trust.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
4. Please identify every person,* including any agents, employees, consultants, or independent
contractors, whom you have authorized to represent you before the City in this matter.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
Click here to enter text. Click here to enter text.
2018-05-15 Agenda Packet Page 452
Development Services Department
Housing Division Development Processing
AFFORDABLE HOUSING APPLICATION | Part V
Disclosure Statement – Page 2
5. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this contract,
project or application, had any financial dealings with an official** of the City of Chula Vista
as it relates to this contract, project or application within the past 12 months?
☐ Yes ☒ No
If yes, briefly describe the nature of the financial interest the official** may have in this contract.
Click here to enter text.
6. Has any person* anyone identified in 1., 2., 3., or 4., above, or otherwise associated with this
contract, project or application, made a campaign contribution of more than $250 within the past
twelve (12) months to an official of the City of Chula Vista?
☐ Yes ☒ No
If Yes, briefly describe the nature of the financial interest the official** may have in this
contract.
Click here to enter text.
7. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this contract,
project or application, provided more than $440 (or an item of equivalent value) to an official** of
the City of Chula Vista in the past twelve (12) months? (This includes any payment that confers a
personal benefit on the recipient, a rebate or discount in the price of anything of value, money to
retire a legal debt, gift, loan, etc.)
☐ Yes ☒ No
If Yes, which official** and what was the nature of item provided?
Click here to enter text.
8. Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this contract,
project or application, been a source of income of $500 or more to an official** of the City of Chula
Vista in the past twelve (12) months?
☐ Yes ☒ No
If yes, which official** and the nature of the item provided?
Click here to enter text.
2018-05-15 Agenda Packet Page 453
Development Services Department
Housing Division Development Processing
AFFORDABLE HOUSING APPLICATION | Part V
Disclosure Statement – Page 3
April 12th, 2018
Date Signature of Contractor/Applicant
Mark Silva, Project Manager
Print or type name of Contractor/Applicant
* Person is identified as: any individual, firm, co-partnership, joint venture, association, social club,
fraternal organization, corporation, estate, trust, receiver, syndicate, any other county, city,
municipality, district, or other political subdivision, or any other group or combination acting as a
unit.
** Official includes, but is not limited to: Mayor, Council member, Planning Commissioner, Member
of a board, commission, or committee of the City, and City employees or staff members.
*** This Disclosure Statement must be completed at the time the project application, or contract, is
submitted to City staff for processing, and updated within one week prior to consideration by the
legislative body.
2018-05-15 Agenda Packet Page 454
City of Chula Vista
Staff Report
File#:18-0145, Item#: 17.
A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA MAKING
CERTAIN FINDINGS OF FACT; ADOPTING A STATEMENT OF OVERRIDING
CONSIDERATIONS; ADOPTING A MITIGATION MONITORING AND REPORTING
PROGRAM AND CERTIFYING THE FINAL ENVIRONMENTAL IMPACT REPORT (EIR-
17-001; SCH NO. 2016041080) FOR THE OTAY RANCH PORTION OF VILLAGE
FOUR SECTIONAL PLANNING AREA PLAN, GENERAL DEVELOPMENT PLAN
AMENDMENT AND TENTATIVE MAP PURSUANT TO THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING
AMENDMENTS TO THE OTAY RANCH GENERAL DEVELOPMENT PLAN TO
REFLECT LAND USE AND POLICY CHANGES FOR APPROXIMATELY 166 ACRES
WITHIN THE OTAY RANCH PLANNED COMMUNITY, INCLUDING ASSOCIATED
TEXT, MAPS AND TABLES
C. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING A
NEW PORTION OF VILLAGE FOUR SECTIONAL PLANNING AREA (SPA) PLAN, AND
ASSOCIATED REGULATORY DOCUMENTS
D. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING
TENTATIVE MAP CVT-15-03 (PCS15-03) FOR THE PORTION OF VILLAGE FOUR
PROJECT, SUBJECT TO THE CONDITIONS CONTAINED IN THE RESOLUTION
E. ORDINANCE OF THE CITY OF CHULA VISTA APPROVING THE SECTIONAL
PLANNING AREA (SPA) PLANNED COMMUNITY DISTRICT REGULATIONS FOR THE
OTAY RANCH PORTION OF VILLAGE FOUR (FIRST READING)
RECOMMENDED ACTION
Council conduct the public hearing, adopt the resolutions and place the ordinance on first reading.
SUMMARY
Otay Valley Quarry, LLC is proposing to develop an approximately 166-acre site (Assessor’s Parcel
Number 644-060-24) within the Otay Ranch area of the City of Chula Vista.
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As proposed, the project requires amendments to the Otay Ranch General Development Plan, as
well as a new Portion of Village 4 Sectional Planning Area (SPA) Plan, Tentative Map and a Final
Environmental Impact Report (FEIR) 17-0001.
ENVIRONMENTAL REVIEW
Environmental Notice
The proposed Project may have a significant effect on the environment. Therefore, an Environmental
Impact Report has been prepared.
Environmental Determination
The Development Services Director has reviewed the proposed project for compliance with the
California Environmental Quality Act and has determined that there is substantial evidence, in light of
the whole record, that the project may have a significant effect on the environment; therefore, the
Development Services Director has caused the preparation of an Environmental Impact Report, FEIR
17-0001.
BOARD/COMMISSION RECOMMENDATION
On March 28, 2018, the Planning Commission took action and voted 5-0-2 with two Commissioners
being absent that the Council adopt the resolutions and the ordinance.
DISCUSSION
Environmental Impact Report
Section 21002 of the California Environmental Quality Act (CEQA) requires that an environmental
impact report identify the significant effects of a project on the environment and provide measures or
alternatives that can mitigate or avoid those significant effects. This Environmental Impact Report
(EIR) contains an environmental analysis of the potential impacts associated with implementing the
proposed Portion of Village Four SPA Plan.
Pursuant to Section 15161 of the CEQA Guidelines, this document was prepared as a “Project EIR”
and is “focused primarily on the changes in the environment that would result from the
development” (i.e., the build out of the proposed project). Where environmental impacts have been
determined to be potentially significant, this EIR presents mitigation measures directed at reducing
those adverse environmental effects. The development of mitigation measures provides the lead
agency with ways to substantially lessen or avoid the significant effects of the project on the
environment, to the degree feasible. Alternatives to the proposed project are presented to evaluate
whether there are alternative development scenarios that can further minimize or avoid significant
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whether there are alternative development scenarios that can further minimize or avoid significant
impacts associated with the project. The major issues that are addressed in the EIR were determined
based on review by staff, and public comment received on the Notice of Preparation (distributed in
April 2016). The issues analyzed in the EIR include land use, aesthetics, transportation and traffic, air
quality, noise, cultural resources, paleontological resources, biological resources, agricultural
resources, water quality and hydrology, geology and soils, public services and utilities, climate
change, hazards, and housing and population.
The Draft EIR (DEIR) was distributed for a 45-day public review period on October 23, 2017. Public
comment letters were received. The Final EIR (FEIR) includes all comments received, and
responses to them. The DEIR and FEIR identify that the proposed project would result in significant
and unmitigated impacts (please see discussion below). All feasible mitigation measures with respect
to project impacts have been included in the FEIR. As the project would have significant and
unmitigated impacts, approval of a Statement of Overriding Considerations by City Council must
occur prior to approving the project. The FEIR and Findings of Fact and Statement of Overriding
Considerations have been attached for the City Council’s review, post recommendation from the
Planning Commission, to determine that the FEIR is adequate for the project, and so that City
Council can certify the FEIR. For those impacts with associated mitigation, a Mitigation Monitoring
and Reporting Program (MMRP) has been provided with the FEIR (See Attachment 7).
The City has examined a reasonable range of alternatives to the proposed project, other than the
proposed project described in the FEIR. The alternatives include a Reduced Development Alternative
and a No Project/No Build Alternative. The Reduced Development Alternative would result in the
development of 61 single family residential units. The No Project/No Build Alternative would result in
the project site remaining as it exists today. Based on this examination, the City has determined that
the Reduced Development Alternative meets most of the project objectives while reducing project
impacts; therefore, the Reduced Development Alternative has been identified as the environmentally
superior alternative.
Summary of Environmental Impacts
The following discussion contains a summary of the impact conclusions from the FEIR.
Significant and Unmitigated Impacts:
Landform Alteration - Aesthetics
·The proposed project would represent a high visual change at multiple key visual points because the site would
experience a permanent change from an undeveloped state to a developed state.
Because there are no applicable or feasible mitigation measures that the City can impose at this time to reduce impacts
to below a level of significance, direct and cumulative impacts to landform alteration would remain significant and
unmitigated. Adoption of a Statement of Overriding Considerations will be required should the decision makers choose to
approve the project.
Transportation, Circulation, and Access
·Under existing conditions, the proposed project would result in cumulative impacts to the Olympic
Parkway/Interstate 805 (I-805) SB Ramps intersection and Olympic Parkway/I-805 NB Ramps intersection.
·Under the Year 2020 conditions, the proposed project would result in cumulative impacts to the Olympic
Parkway/I-805 SB Ramps intersection; Olympic Parkway/I-805 NB Ramps intersection; Olympic Parkway from I-
805 SB Ramps to I-805 NB Ramps; and I-805 NB Ramps to Oleander Avenue.
·Under the Year 2030 (buildout) conditions, the proposed project would result in cumulative impacts to the Olympic
Parkway/I-805 SB Ramps intersection, Olympic Parkway/I-805 NB Ramps intersection, and Olympic Parkway
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from I-805 NB Ramps to Oleander Avenue.
Because there are no applicable or feasible mitigation measures that the City can impose at this time to reduce impacts
to below a level of significance, cumulative impacts to transportation, circulation, and access would remain significant and
unmitigated. Adoption of a Statement of Overriding Considerations will be required should the decision makers choose to
approve the project.
Prior to issuance of each building permit for the Portion of Village Four project, the applicant or its designee shall pay its
fair share payment, through the Traffic Development Impact Fee program, proportionate to its cumulative impact toward
improvements.
Cultural Resources
·Although the actions of the proposed project would be mitigated through data recovery, curation, and reporting,
the proposed project’s contribution to a cumulatively considerable impact would not be reduced to a less than
significant level. Therefore, the cumulative impact on cultural resources would be cumulatively significant.
Mitigation measure MM-CUL-1 would reduce these identified potentially significant impacts to less than significant at the
project level. While any individual project may avoid or mitigate the direct loss of a specific resource, the effect is
considerable when considered cumulatively and would remain significant and unavoidable.
Because there are no applicable or feasible mitigation measures that the City can impose at this time to reduce impacts
to below a level of significance, cumulative impacts to cultural resources would remain significant and unmitigated.
Adoption of a Statement of Overriding Considerations will be required should the decision makers choose to approve the
project.
Air Quality
·During construction, the proposed project would result in a significant cumulative impact because of construction
activities. The emissions of NOx and CO would exceed the applicable significance threshold
levels during construction. Following implementation of mitigation, emissions would not be
reduced to a level below the City’s significance thresholds. As such, effects regarding NO x and
CO emissions during construction activities would be significant and unavoidable.
·Regarding nitrogen dioxide, according to the construction emissions analysis, construction of
the proposed project would contribute to exceedances of the NAAQS and CAAQS for NO2.
NO2 and NOx health impacts are associated with respiratory irritation. Following
implementation of mitigation, emissions would not be reduced to a level below the City’s
significance thresholds.
The emissions associated with construction would be temporary, lasting approximately 2 years. Daily
construction emissions would still exceed the threshold levels for NOx and CO following
implementation of mitigation measures. Therefore, direct and cumulative impacts would remain
significant and unavoidable.
Because there are no applicable or feasible mitigation measures that the City can impose at this time
to reduce impacts to below a level of significance, impacts to air quality would remain significant and
unmitigated. Adoption of a Statement of Overriding Considerations will be required should the
decision makers choose to approve the project.
Public Services and Utilities - Energy
·San Diego Gas & Electric has indicated that without an increased import capacity, including a
new substation within the Otay Ranch area, future energy needs could not be ensured.
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new substation within the Otay Ranch area, future energy needs could not be ensured.
Impacts would be cumulatively considerable.
The California Public Utilities Commission approved construction of a substation, known as the Salt
Creek Substation, in 2016, with construction expected to be complete in late 2018, prior to
completion of the proposed project. As such, infrastructure for the continued long-term delivery of
energy to the Otay Ranch area would be in place prior to the completion of the project, and would be
in place for full buildout of Otay Ranch. The 120-megavolt amperes substation would provide
infrastructure necessary to provide power to buildout of Otay Ranch, but would not generate
electricity or guarantee that adequate supply would be available. Therefore, because no assurance
can be made that long-term energy would be supplied to the site and other planned sites, at full
buildout and beyond, impacts would be cumulatively considerable and impacts would remain
significant and unavoidable.
Because there are no applicable or feasible mitigation measures that the City can impose at this time
to reduce impacts to below a level of significance, cumulative impacts to energy would remain
significant and unmitigated. Adoption of a Statement of Overriding Considerations will be required
should the decision makers choose to approve the project.
Climate Change
·Construction of the proposed project would result in Green House Gas (GHG) emissions,
which are primarily associated with use of off-road construction equipment, on-road hauling
and vendor (material delivery) trucks, and worker vehicles. Operation of the proposed project
would result in GHG emissions from vehicular traffic, area sources, electrical generation, water
supply, and solid waste. The proposed project’s service population-based emissions would be
more than the City’s proposed efficiency metric of 1.3 MT CO2e /SP/yr.
·Regarding consistency with SB 32 and EO S-3-05, there are no established protocols or
thresholds of significance for future year analysis. However, project-generated GHG emissions
would exceed the efficiency threshold, therefore, the proposed project would potentially
conflict with the state’s trajectory toward future GHG reductions. Most mitigation is not
quantifiable and/or the extent to which some measures would apply to the project is unknown.
Because there are no applicable or feasible mitigation measures that the City can impose at this time
to reduce impacts to below a level of significance, direct impacts to Climate Change would remain
significant and unmitigated. Adoption of a Statement of Overriding Considerations will be required
should the decision makers choose to approve the project.
All feasible mitigation measures have been required of the proposed project with respect to the
above identified impacts. It should be noted that significant and unmitigated impacts for the above
identified issue areas were also identified within the FEIR. Although in some instances the above
identified mitigation measures may substantially lessen these significant impacts, adoption of the
measures will not fully avoid the impacts.
As a Lead Agency, the City must make findings pursuant to CEQA Guidelines Sections 15043,
15091, and 15093 for each significant and unmitigated impact. The attached Findings of Fact and
Statement of Overriding Considerations have been prepared specifically for the project actions for
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Statement of Overriding Considerations have been prepared specifically for the project actions for
which the City has authority to approve or carry out (see Attachment 2, Findings of Fact and
Statement of Overriding Considerations).
Sections 15043, 15091 and 15093 of the CEQA Guidelines state that the adverse environmental
effects are considered “acceptable” and a Lead Agency can approve a project that will result in
significant effects when, based upon substantial evidence, findings have been made that specific
economic, legal, social, technological or other considerations make infeasible the mitigation
measures or project alternatives identified in the FEIR, and benefits of a proposed project outweigh
the policy of reducing or avoiding the significant environmental effects of the project.
Significant and Mitigated to Less than Significant
Significant impacts were identified in the following environmental issue areas, and mitigation measures were required in
the FEIR to reduce the impacts to less than significant. An MMRP (see Attachment 13) has been prepared to ensure that
the mitigation measures will be implemented in accordance with specified monitoring requirements.
Biological Resources
·The proposed project would result in potentially significant direct impacts to both covered and non-covered
species. Mitigation measures MM-BIO-1 through MM-BIO-8 would reduce these identified potentially significant
impacts to a less than significant level.
·The proposed project would result in potentially significant impacts to nesting birds and nesting habitat. Mitigation
measures MM-BIO-9 and MM-BIO-10 would reduce these identified potentially significant impacts to a less than
significant level. To ensure no burrowing owls have migrated to the development area, a preconstruction survey
would be conducted, in accordance with MM-BIO-11. If construction delays occur, additional surveys will be
required.
·The proposed project would result in potentially significant indirect impacts to both covered and non-covered
species. Mitigation measures MM-BIO-4, MM-BIO-5, MM-BIO-6, MM-BIO-15, MM-BIO-16, as well as dust control
measures would reduce these identified potentially significant impacts to a less than significant level.
·The proposed project would result in potentially significant direct impacts to sensitive vegetation communities,
both on- and off-site. Vegetation communities include coastal sage scrub, succulent scrub, non-native grassland,
tamarisk scrub, and unvegetated channel. Mitigation measures MM-BIO-1 through MM-BIO-7, MM-BIO-15, and
MM-BIO-16 would reduce these identified potentially significant impacts to a less than significant level.
·The proposed project would result in potentially significant indirect impacts to jurisdictional waters and wetlands.
Mitigation measures MM-BIO-4 through MM-BIO-6, and MM-BIO-12 through MM-BIO-14 would reduce these
identified potentially significant impacts to a less than significant level.
Cultural Resources
·Under the development of the proposed project there is always potential to encounter previously unidentified
subsurface cultural deposits. Mitigation measure MM-CUL-1 would reduce these identified potentially significant
impacts to a less than significant level.
Transportation, Circulation, and Access
·Under the Year 2020 conditions, the proposed project would result in cumulative impacts to the Olympic
Parkway/Brandywine Avenue intersection; Olympic Parkway/Heritage Road intersection; Olympic Parkway from
Brandywine Avenue to Oleander Avenue; and Olympic Parkway from Oleander Avenue to Heritage Road.
·Under the Year 2030 (buildout) conditions, the proposed project would result in cumulative impacts to Olympic
Parkway from Brandywine Avenue to Oleander Avenue; and Olympic Parkway from Oleander Avenue to Heritage
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Road.
Mitigation measure MM-TCA-1 would reduce these potentially significant impacts to a less than significant level.
Hazards and Risk of Upset
·There is the potential some areas containing contaminated soils exist on the proposed project site from previous
agricultural uses. Mitigation measure MM-HAZ-1 would reduce these identified potentially significant impacts to a
less than significant level.
·Due to the close proximity of Brown Field Airport, impacts would be potentially significant. The proposed project
would be required to comply with all Brown Field Airport Land Use Compatibility Plan conditions. Mitigation
measures MM-HAZ-2, MM-HAZ-3, and MM-HAZ-4 would reduce these identified potentially significant impacts to
a less than significant level.
Noise
·The first row of residences aligned closest to Main Street would be exposed to traffic noise levels ranging from 68
to 73 dBA CNEL from future traffic. This would exceed the exterior noise criterion of 65 dBA CNEL, thus impacts
would be potentially significant. Second-floor exterior uses such as balconies (if these are incorporated into the
residential design) fronting along Main Street would exceed the City’s 65 dBA CNEL noise standard. Additionally,
interior noise levels at residences adjacent to Main Street would have the potential to exceed 45 dBA CNEL.
Mitigation measures MM-N-1, MM-N-2, and MM-N-3 would reduce these identified potentially significant impacts
to a less than significant level.
·Construction related blasting and rock crushing could result in substantial vibration and noise impacts. Mitigation
measures MM-N-4 and MM-N-5 would reduce these identified potentially significant impacts to a less than
significant level.
·The generation of noise from construction activities during noise-sensitive time periods upon completed and
occupied components of the project is considered a significant impact. Mitigation measures MM-N-4, MM-N-5,
and MM-N-6 would reduce this identified potentially significant impact to a less than significant level.
Geology and Soils
·The surficial soil within the proposed project site consists of topsoil, colluvium, alluvium, and compressible
portions of landslide debris. These soils are not considered suitable for the support of the proposed project
development. Underlying geologic soils could also exhibit high expansivity. Mitigation measures MM-GEO-1
would reduce these identified potentially significant impacts to a less than significant level.
Public Services and Utilities
·The proposed project would result in an incremental increase in demand for fire, emergency, police, and library
services, as well as parks. Mitigation measure MM-PUB-1 would reduce these identified potentially significant
impacts to a less than significant level.
·The proposed project would result in an incremental increase in demand for schools. Mitigation measure MM-
PUB-2 would reduce this identified potentially significant impact to a less than significant level.
·The proposed project would also result in an incremental increase in demand for sewer services. Mitigation
measure MM-PUB-3 would reduce this identified potentially significant impact to a less than significant level.
Paleontological Resources
·The proposed project has the potential to impact fossil localities within the Otay Formation, mapped, moderate-
sensitivity deposits within the Mission Valley Formation, and unnamed Quaternary terrace deposits located at the
southernmost extent of the project site. Excavation within these formations would represent a potentially
significant impact. Mitigation measure MM-PAL-1 would reduce this identified potentially significant impact to a
less than significant level.
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Less than Significant Impacts
Less than significant impacts were identified in the following environmental issue areas:
Land Use, Planning and Zoning
Water Quality and Hydrology
Housing and Population
Location, Existing Site Characteristics, and Ownership
The project site is located on the east side of Wolf Canyon, straddling the future extension of Main Street from La Media
Road to the north and to Heritage Road to the southwest. The site is surrounded by Village Three to the west, Village
Two and Four to the north, Village Eight West to the east, and an existing rock quarry to the south. The site currently
consists of vacant, undeveloped land. The project site is approximately 6.15 miles southeast of downtown Chula Vista,
and 12.5 miles southeast of downtown San Diego. The project site is located immediately west of La Media Road, and
approximately 1 mile south of Olympic Parkway.
Portion of Village Four consists of 166 acres owned by Otay Valley Quarry, (see Locator Map, Attachment 1).
Existing General Plan, SPA Plan Land Use Designations and Land Use
Project Description
The proposed project consists of 166 acres within a portion of the overall Otay Ranch Village 4 and
involves the implementation of 350 residential units along with open space, open space preserve and
Community Purpose Facilities or CPF sites.
In order to achieve this, it is necessary to amend the existing Otay Ranch General Development Plan
(GDP), along with approving a new Sectional Planning Area (SPA) Plan (including Planned
Community District Regulations) and a new tentative map, as follows:
General Development Plan Amendment
The existing Village 4 General Development Plan includes 453 residential units approved on 118
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The existing Village 4 General Development Plan includes 453 residential units approved on 118
acres within the Low Medium land use category at a density of 3.8 dwelling units per acre. The
existing land uses include predominantly single family residential north and south of Main Street,
open space and open space preserve. In order to implement the proposed project, an amendment to
the General Development Plan is required. This amendment would include:
1. Add Medium High (MH) and High (H) land use designations to the GDP Land Use
Designation Table for Village 4 (to allow for higher density residential development) as
allowed under the clustering provisions of the City’s General Plan.
2. Reduce the amount of allowable Single Family (SF) Residential Units in Village 4 (from
453 to 176 dwelling units).
3. Allow for 150 Medium High (MH) multi-family dwelling units.
4. Allow for 127 High Density (H) multi-family dwellings units.
5. Increase the overall residential density from 3.8 to 6.6 dwelling units/acre.
The distribution of residential dwelling units by categories will be adjusted while still retaining the
previously adopted overall total dwelling units of 453 in Village 4. Please note that this amendment
to the General Development Plan covers the entire area of Village Four whereas the rest of the
requested approvals address only the Portion of Village Four project.
New Portion of Village Four SPA Plan
The SPA Plan establishes the vision for the Portion of Village 4 and defines the land use character
and mix of uses, design criteria, circulation systems, and public infrastructure requirements for this
166-acre project.
The project design utilizes clustering provisions with the highest density residential use located north
of Main Street and is located directly adjacent to the core of Village 8 West. The remaining mid- to
low residential uses are located south of Main Street, including CPF uses, all of which are
surrounded by open space and open space preserve. The SPA Plan implements the GDP.
The PC District Regulations include the Zoning District Map that identifies the particular zones for the
project and associated development standards such as permitted land uses, lot coverage, height and
bulk requirements. The proposed Zoning District Map and accompanying land use and development
regulations will ensure that the SPA Plan is implemented in accordance with the Otay Ranch GDP
New Tentative Map
A new Tentative Map has been prepared which will implement the proposed land uses and subdivide
166- acres into parcels supporting up to 73 single-family residential units, 277 multi-family residential
units, approximately 2.08 acres of CPF uses, and 20.19 acres of open space uses for the Portion of
Village 4 project. Also included is 97.2 acres of open space preserve.
ANALYSIS
1. Boundary Adjustment
A Multi-Species Conservation Program (MSCP) Boundary Line Adjustment is necessary to match
the approved alignments for Main Street on the adjacent developments. When originally
envisioned with the adoption of the Otay Ranch GDP/Subregional Plan, Main Street (also known
as Otay Valley Road) served as the major east/west roadway connecting Village Three withCity of Chula Vista Printed on 5/10/2018Page 9 of 23
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as Otay Valley Road) served as the major east/west roadway connecting Village Three with
Village Eight. As each village SPA has been adopted, major roadways have been designed to
meet the City’s roadway standards. Consistent with that approach, the applicant processing the
Village Three SPA and map was required to prepare a grading and alignment study for the
portions of Main Street between Villages Three and Eight, which included Village Four. Based on
that study, the western point of Main Street, within Village Three, was established, and the
eastern point of Main Street, within Village Eight West, was established. The intervening land is
known as Village Four, and the alignment of Main Street within Village Four matches the
alignment created and reviewed by the City during the processing of Village Three. The proposed
alignment for the project reflects this new alignment shift to the north, and is the focus of the
MSCP Boundary Line Adjustment. The give/take areas, which collectively compose the Boundary
Line Adjustment Area, include the areas proposed to be given to the MSCP Preserve and those
proposed to be removed from the Preserve. The MSCP Boundary Line Adjustment was approved
by USFWS and CDFW on August 2, 2017 and by the City on August 4, 2017. Section 5.3 of this
FEIR provides a detailed description of the conditions of the “give” and “take” areas separately.
Where it is appropriate to discuss the give and take areas together, the area is referred to as the
Boundary Line Adjustment Area.
2. General Development Plan Amendment
The Otay Ranch GDP was adopted on October 28, 1993, with the concept to create a complete and
balanced community clustered into villages with conveniently located housing, shops, work places,
schools, parks, civic facilities, and open spaces. The entire Village Four area as identified in the Otay
Ranch GDP is comprised of approximately 528 acres and was intended to be a lower-density village
compared to surrounding villages due to its scenic location near Rock Mountain and limited area,
being bound by the Otay River Valley and Wolf Canyon. The proposed project comprises
approximately 166.02 acres within Village Four.
Below is a table showing the existing breakdown of Village Four GDP land uses. The table indicates
a total of 453 single family dwelling units can be developed within this village.
Existing Village Four GDP Land Use
Use Dwelling Units Acreage Appr
ox.
Pop.
SF MF Total Dens Res.Park*CPF**Sch.C'ml.Ind.Open
Sp.
Art.Total
LM 453 453 3.8 118.0 7.0 2.1 127.1 1,495
COMMUNIT
Y PARK
55.8 55.8
OTHER 309.9 35.0 344.9
TOTAL 453 453 3.8 118.0 62.8 2.1 309.9 35.0 527.8 1,495
*Includes required acreage from other residential villages based on park acreage ratio of 3.0 acres per 1,000 persons.
**Actual CPF acreage to be determined at the SPA level; CPF Acreage based on ratio of 1.39-acres per 1,000 persons.
The proposed project is primarily a residential project with associated infrastructure and open
space areas. As shown in the table below, amendments to the GDP are necessary to implement
the proposed Portion of Village Four SPA land plan (See Attachment 4). Proposed amendments
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the proposed Portion of Village Four SPA land plan (See Attachment 4). Proposed amendments
include:
1. Add Medium High (MH) and High (H) land use designations to the GDP Land Use
Designation Table for Village 4 (to allow for higher density residential development).
2. Reduce the amount of allowable Single Family (SF) Residential Units in Village 4 from
453 to 176 dwelling units.
3. Allow for 150 Medium High (MH) multi-family dwelling units in Village 4.
4. Allow for 127 High Density (H) multi-family dwellings units in Village 4.
5. Increase the overall residential density from 3.8 to 6.6 dwelling units/acre for the 68.3
residential acres contained within the entire Village Four.
6. Adjust the distribution of residential dwelling units by category, while retaining the
previous overall total dwelling units of 453.
Proposed Village Four GDP Land Use
Use Dwelling Units Acreage Appro
x.
Pop.
SF MF Total Dens Res.Park*CPF**Sch.C'ml.Ind.Open
Sp.
Art.Total
LM 176 176 3.6 48.9 1.7***0.8 50.7 581
MH 150 150 12.3 12.2 1.2**0.5 12.7 387
H 127 127 17.6 7.2 1**0.5 7.7 328
COMMUNITY
PARK
55.8*55.8
OTHER 233.4 11.4 244.8
TOTAL 176 277 453 6.6 68.3 56.8 1.8 233.4 11.4 371.8 1,296
*Includes required Park acreage from other residential villages based on park acreage ratio of 3.0 acres per 1,000 persons.
**Park land included in residential acreage.
***0.72 acre of park land included in residential acreage.
+ Actual CPF acreage to be determined at the SPA level; CPF Acreage based on ratio of 1.39-acres per 1,000 persons.
The proposed project is designed in conformance with the Otay Ranch GDP. The organization of
the land uses within the SPA area meets the GDP objectives of integration and compatibility of
land uses within the villages and with adjacent communities. The SPA also supports GDP land
use goals and objectives by providing a range of housing and employment opportunities. The
proposed project would be consistent with the vision of planned development of Village Four.
While the GDP envisioned single-family residential throughout Village Four, the proposed project’s
inclusion of higher density multi-family along Main Street is based upon the allowable clustering
provisions of the General Plan. These provisions allow for clustering primarily due to physical
constraints of the site such as: topography; geology; biological resources; or other similar
constraints. In addition, the higher density would better support future transit use contemplated
for this roadway, while also requiring less developed area than solely providing the same amount
of single-family homes. The Project is planned to not include any commercial land uses.
Residents in the Portion of Village Four would provide adequate additional support for commercial
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Residents in the Portion of Village Four would provide adequate additional support for commercial
uses in the adjacent abutting Village Eight West. The project includes bicycle and pedestrian
connections to Village Eight West and provides densities to support mass transit.
The land use plan for the Portion of Village Four supports the goals and objectives of the Otay
Ranch GDP by providing a diverse range of housing opportunities. The organization of the land
uses meets the objectives of integration and compatibility of land uses within villages and with
adjacent communities. The project supports the objective of enhancing the unique environmental
and visual qualities of Otay Ranch by generally conforming to the natural topography of the site
and maintains views toward open space and distant mountains.
According to the Otay Ranch GDP and the Quimby Act, the proposed project is obligated to
provide approximately 2.94 acres of parkland. In Village Four, the park obligation will be
addressed through the payment of the Park In-Lieu fee. Each dwelling unit will pay the Park In-
Lieu fee in accordance with Chula Vista municipal Code (CVMC) Chapter 17.10 Parklands and
Public Facilities, Section 17.10.120, Geographical distribution on in-lieu fees for land dedication.
These contributions cover the Village SPA park obligation.
3. SPA Plan
In accordance with Section 19.48.090 of the CVMC, prior to any development within a sectional
planning area, the developer shall submit a SPA plan to the City for review and approval. The SPA
plan establishes the vison for the Portion of Village Four and defines the land use character and mix
of uses, design criteria, circulation systems, and public infrastructure requirements for the project for
this approximate 166-acre site within Otay Ranch.
Regional and Circulation Network
Regional access to the project site is from State Route (SR) 125, which runs north/south and is
located approximately 1 mile east of the project site. Additional north/south access is provided from
Interstate (I) 805, approximately 3 miles west of the project site, and I-5, located approximately 6
miles west of the project site. SR-54 and SR-905 provide regional east/west circulation,
approximately 5.5 miles north and 3.25 miles south, respectively, of the project site.
East/west access is provided by Olympic Parkway, 1 mile north of the project site, connecting to I-
805 to the west and SR-125 to the east. North/south access would be provided by an extension of
Heritage Road along the western portion of Village Two, and by an extension of La Media Road along
the eastern edge of the project site. La Media Road is a north-south arterial which crosses portions of
Village Eight West. It will be extended from its existing terminus just north of Village Eight West and
become Otay Valley Road within the Village Eight West Town Center. Otay Valley Road will extend
south and then curve to the east, providing a future connection to Village Eight East and a future
Otay Valley Road interchange at SR-125. The primary entry point into Village Four would be from La
Media Road.
Internal Circulation:
The Portion of Village Four circulation system provides a system of roadway and trail corridors to
support both vehicular and non-vehicular modes of transportation to serve the community. This
system includes the extension of existing and planned roads, trails, and transit from adjacent villages
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system includes the extension of existing and planned roads, trails, and transit from adjacent villages
as well as internal systems to serve the SPA.
The Portion of Village Four street pattern organizes traffic into a hierarchy of travel ways, arranged
according to anticipated volumes and modes of travel. This organization is consistent with the
roadway classifications established by the Otay Ranch GDP. In Portion of Village Four, roadways
respond to the landform of Rock Mountain and Wolf Canyon. The southern portions of the Village do
not support a grid pattern of streets; however, the central and northern portions allow for a modified
grid pattern that promotes walkability and supports urban development in the Village Eight West,
Town Center. The street pattern in the southern areas is a suburban street pattern, provides a
transition to the natural open space areas atop Rock Mountain, and reflects the topography of this
portion of the site.
Approximately 12.06 acres of the project site would be used for roadway and circulation right-of-way,
which includes an approximately 2-mile eastern extension of Main Street to provide primary
circulation through the project site. In addition to the extension of Main Street, four internal village
streets (Streets “A,” “B,” “C,” and “D”) are proposed.
Main Street:
Main Street is proposed as an east/west six-lane arterial roadway that would serve as the primary
connection to the surrounding existing and planned regional circulation network. Main Street would
be approximately 124 feet wide (right-of-way) and approximately 100 feet wide spanning from curb-to
-curb. Main Street would include a raised median, three travel lanes in each direction, Class II bicycle
lanes in each direction, and a buffered 5-foot-wide pedestrian walkway on each side of the roadway.
Direct pedestrian links would extend through the proposed project site into Village Eight West, and
future connections would be provided to Village Three via Main Street. Class II bicycle facilities are
planned on Main Street. The Main Street Bridge is not considered part of this project and would be
constructed by others or the City of Chula Vista. Main Street will be extended east to provide a future
connection into/through Village Eight West to the interchange at SR-125 and westerly into/through
Village Three.
Village Roadways:
The balance of the roadway system for Portion of Village Four is made up of Parkway Residential
Streets. These streets provide direct access to single-family homes in the southern portion of the SPA
Area. The street alignments are shown on the Tentative Map and subject to final engineering during
the processing of the Final Maps for Portion of Village Four. Additional private streets and lanes will
be provided for the multi-family planning areas (R-2a, R-2b, and R-3), as part of the site plan review
for the multi-family neighborhoods. The design of these street sections will be determined by the site
plan and shall be subject to design review.
The Secondary Village Entry streets are public streets that provide access to the residential
neighborhoods south of Main Street. Streets ‘B’ and ‘C’ provide egress and ingress from the southern
residential area. Street ‘B’ provides a connection to the multi-family neighborhood on the north side of
Main Street. Driveways along residential street shall be located a minimum of twenty-five-feet (25’)
from any street intersection unless otherwise approved by the City Engineer. The residential street
pattern is designed to provide access into the neighborhoods and promote walkability.
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The SPA plan includes a site utilization plan, Planned Community District Regulations, Design
Guidelines and other supporting documents.
Site Utilization Plan
The proposed project is primarily a residential project with associated infrastructure and open space
areas. The proposed land uses are summarized in the table below:
Portion of Village Four Sectional Planning Area Plan Land Use Summary
Land Use Planning Area Units Gross Acres Target Density
Residential
Single-Family Residential - 3-6 du/ac
SF R-1 73 15.18 4.81
Multi-Family (Medium-High) Residential - 11-18 du/ac
MF R-2a 110 7.91 13.91
MF R-2b 40 4.24 9.43
Multi-Family (High) Residential - 18-27 du/ac
MF R-3 127 7.16 17.74
Residential Totals 350 34.49 10.15
Community Purpose Facility (CPF)
CPF-1 CPF -1.21 -
CPF-2 CPF -0.87 -
CPF Sub-Total -2.08 -
Open Space (OS)
OS-1 OS -0.59 -
OS-2 OS -3.03 -
OS-3 OS -3.08 -
OS-4 OS -1.57 -
OS-5 OS -0.59 -
OS-6 OS -3.11 -
OS-8 OS -1.35 -
OS-9 OS -6.87 -
Total Private Open Space -20.19 -
Open Space Preserve (OSP)
OSP-7 Preserve -1.37 -
OSP-10 Preserve -6.67 -
OSP-11 Preserve -44.27 -
OSP-12 Preserve -44.89 -
Total Preserve Open Space -97.20 -
Open Space Sub-Total -117.39 -
Open Space (OS)
Circulation
Main Street Circulation -10.82 -
Internal Streets Circulation -1.24 -
Circulation Sub-Total -12.06 -
Totals 350 166.02 -
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Portion of Village Four Sectional Planning Area Plan Land Use SummaryLand Use Planning Area Units Gross Acres Target DensityResidentialSingle-Family Residential - 3-6 du/acSFR-1 73 15.18 4.81Multi-Family (Medium-High) Residential - 11-18 du/acMFR-2a 110 7.91 13.91MFR-2b 40 4.24 9.43Multi-Family (High) Residential - 18-27 du/acMFR-3 127 7.16 17.74Residential Totals 350 34.49 10.15Community Purpose Facility (CPF)CPF-1 CPF -1.21 -CPF-2 CPF -0.87 -CPF Sub-Total -2.08 -Open Space (OS)OS-1 OS -0.59 -OS-2 OS -3.03 -OS-3 OS -3.08 -OS-4 OS -1.57 -OS-5 OS -0.59 -OS-6 OS -3.11 -OS-8 OS -1.35 -OS-9 OS -6.87 -Total Private Open Space -20.19 -Open Space Preserve (OSP)OSP-7 Preserve -1.37 -
OSP-10 Preserve -6.67 -
OSP-11 Preserve -44.27 -
OSP-12 Preserve -44.89 -
Total Preserve Open Space -97.20 -
Open Space Sub-Total -117.39 -
Open Space (OS)
Circulation
Main Street Circulation -10.82 -
Internal Streets Circulation -1.24 -
Circulation Sub-Total -12.06 -
Totals 350 166.02 -
MSCP = Multiple Species Conservation Program
* The exact amount of community purpose facility for the project and on the north side of Main
Street will be calculated in conjunction with the processing of Site Plan approval for the High
Density Residential (R-3).
Residential:
As shown in the Table above, the proposed project would introduce 73 single-family low- to medium-
density residential dwelling units on 15.18 acres, 150 multi-family medium- to high-density residential
dwelling units on 12.15 acres, and 127 multi-family high-density residential dwelling units on 7.16
acres, for a total of 350 units on approximately 34.49 acres of the project site. The overall density of
the low- to medium-density residential units would range from 3 to 6 dwelling units per acre, medium-
to high-density would range from 11 to 18 dwelling units per acre, and high-density would range from
18 to 27 dwelling units per acre. The overall target density for the residential portion of the proposed
Portion of Village Four project is 10.15 dwelling units per acre. This is based upon a total of 350 units
on a total of 34.39 residential acres.
The Portion of Village Four Residential District was created to achieve the residential goals and
policies of the Otay Ranch GDP. Three basic residential unit types are anticipated in the Portion of
Village Four SPA: single-family, small-lot single-family/duplexes/townhomes, and attached multi-
family units. One single-family Planning Area (R-1) is provided for traditional single-family home
development. Planning Areas R-2a and R-2b are provided for duplexes/townhomes and other similar
products that allow a variety of housing types. The R-3 Planning Area is anticipated to provide
traditional multi-family products such as stacked flats and grouped parking.
Community Purpose Facility:
CVMC 19.48 requires the provision of 1.39 acres of land per 1,000 persons be zoned for Community
Purpose Facilities (CPF) when creating a SPA Plan. This requirement may be reduced or complied
with in an alternative manner based upon the availability of shared parking for the use or through the
provision of an extraordinary public benefit provided certain requirements are met.
Based on a population of 956, the project requires 1.31 acres of CPF. Approximately 2.08 acres is provided within the
proposed project site dedicated for community purpose facility uses. The CPF areas are provided in the western portion
of Planning Area R-2a and the eastern portion of Planning Area R-2b.
As shown in in the Table above,CPF-1 would be a 1.21-acre site located on the east side of Street
‘A’ and the south side of Street ‘C’ within Planning Area R-2a, and the site is designed to
accommodate future CPF-type development.
CPF-2 would be a 0.87-acre site located on the west side of Street ‘A’ in Planning Area R-2b. This
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CPF-2 would be a 0.87-acre site located on the west side of Street ‘A’ in Planning Area R-2b. This
site is planned for private recreation uses, and provides an overlook of a portion of Wolf Canyon and
the MSCP.
Open Space:
Approximately 117.39 acres of the project site would be designated as open space, consisting of both
common open space areas and preserve open space areas. Approximately 20.19 of those acres
would be for fuel modification areas, perimeter slopes, and passive recreation, and approximately
97.20 acres would be dedicated to the MSCP Preserve.
Open Space Preserve:
The project requires the conveyance of 68.90 acres of Open Space Preserve. Approximately 97.20
acres of Open Space Preserve (Parcels OSP-7, OSP-10, OSP-11, and OSP-12) are available on-site
for conveyance obligation; however, 80.29 acres of on-site Preserve are obligated as conveyance
land to satisfy the Quarry Reclamation plan requirements. Therefore, only 16.91-acres are available
for on-site conveyance into the MSCP Preserve with the Portion of Village Four SPA and Tentative
Map/Final Map. The remaining conveyance obligation acreage (approximately 51.99-acres) will be
provided off-site in Village 14, in accordance with the Resource Management Plan (RMP)
requirements concurrent with recordation of the Final Map. The area of land within Village 14 which
will be conveyed is under the same ownership as the Portion of Village Four Project. An additional
9.98 acres of open space is provided as perimeter slope (OS-6 and OS-9) and consists of the
Preserve Edge. The actual location of perimeter slopes, internal slopes, and the Preserve Edge is
shown on the tentative map, which is being concurrently processed, and ultimately on Final Map(s).
The Open Space Preserve includes all land designated as OSP (lots OSP-7 and OSP-10 through
OSP-12), which would be dedicated to the Preserve Owner Manager (POM) comprised of the City of
Chula Vista and the County of San Diego. Land use and design of these areas is regulated by the
MSCP Subarea Plan and the RMP, as discussed in the SPA Plan. These areas are intended to
remain unimproved with any uses highly restricted. Vegetation would consist of native plants that
already occur on-site. Only under limited circumstances may certain amenities and facilities, as
determined by the City to be compatible with the goals and objectives of the City’s MSCP Subarea
Plan and Otay Ranch RMP, be permitted within the Preserve. Any proposed amenities or facilities
within the Preserve shall be subject to the prior review and approval of the Director of Development
Services.
Other Open Space:
Approximately 20.19 acres of open space within the proposed project site would consist of fuel
modification areas, slopes, and passive recreation areas. Of this amount, a total of 9.98 acres of
perimeter slopes would occur at the edges of development within the project site. Perimeter slopes
refer to the slopes that occur at the edges of development within the SPA (lots OS-9 and portion of
OS-6). The portions of these slopes that are located within 100-feet of the MSCP Preserve are part of
the Preserve Edge and shall be subject to the requirements of Appendix B2 of the Otay Ranch
Village Four SPA Plan FEIR17-0001 - The Village Four Preserve Edge Plan. The intent of the
Preserve Edge is to create a buffer zone between proposed development and the Otay Ranch
Preserve, thereby protecting the Preserve from human activity and non-native species. This area
also includes dedicated right-of-way for a future access road to Otay Valley Regional Park. No
structures would be permitted within perimeter slopes with the exception of walls and fences. Trails
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structures would be permitted within perimeter slopes with the exception of walls and fences. Trails
are permitted within perimeter slope areas, but are subject to the requirements outlined within the
SPA Plan.
The additional 10.20 acres of the overall 20.19 acres of open space consist of interior slopes which
would occur at the edge of roadways and between planning areas within the project site. These lots
include OS-1 through OS-5, OS-8, and a portion of OS-6.
Regardless of zone, all interior slopes are subject to the facilities, landscaping, paving and surfaces,
and lighting requirements outlined within the SPA Plan. Trails, benches, signage, walls, and fences
would be permitted within the interior slope areas.
Planned Community District Regulations
In accordance with Section 19.48.090 of the CVMC, PC District Regulations are being established for
the Portion of Village 4 in order to create development standards for each land use area and
designation depicted on the site utilization plan map and planned community districts map. Said
standards should include permitted land uses, lot coverage, height and bulk requirements. The
proposed Zoning District Map and accompany land use and development regulations will ensure that
the SPA Plan is implemented in accordance with the Otay Ranch GDP.
A total of six zoning designations are proposed. They include: Single Family Residential, two types
of Multi-Family Residential, Community Purpose Facility; Open Space and Open Space Preserve.
There are three residential zoning designations: Single Family (SF-1) which permits densities of 3-6
units/acre; Residential Multi-Family Medium High (RM-1) which permits densities of 11-18 units per
acre including small lot SF, alley homes, duplexes, townhouses, row-houses, courtyard/clusters; and
stacked flats; Residential Multi-Family Medium High (RM-2) which permits densities of 18-27
units/acre including apartments and condominium-type in multiple-story buildings.
There are two open space zoning designations: Open Space (OS) permits developed or usable open
space and park uses; Open Space Preserve (OSP) permits natural, undisturbed and/or restored
open space which is part of the Otay Ranch Preserve.
There is also a CPF designation which allows uses established pursuant to Community Purpose
Facilities requirements contained in Chapter 19.48 (P-C Planned Community Zone) of the CVMC.
Design Guidelines
The Design Guidelines set forth design parameters that pertain to the site planning, landscape
architecture, architecture and signage for all developments within the Portion of Village 4. The Design
Guidelines contain illustrations and requirements to implement the design ideas presented therein.
Old California architectural styles provide the inspiration for the Portion of Village Four Design Plan.
Old California architecture is represented in Spanish, Spanish Eclectic, and Mission styles.
Public Facilities
The SPA Plan describes the public facility needs associated with the Portion of Village Four land
plan. More specifically, the SPA Plan addresses the following facility needs: water supply, sewer
service, storm drain and runoff, dry utilities, development phasing, public schools, childcare facilities,
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service, storm drain and runoff, dry utilities, development phasing, public schools, childcare facilities,
police and fire service, library services, civic facilities, animal control facilities, integrated solid waste
management, regional facilities, roads, and parks and open space.
Water Service:
Water service to the proposed project would be served by the Otay Water District. A water system(s)
would be installed in accordance with the standards of the Otay Water District, and would be
maintained and operated by the Otay Water District.
Sewer Service:
Sewer service for the proposed project would be provided by and connected to City sewers. The
proposed project sewer would extend approximately 0.5 mile southwest from Main Street. All utilities
would be underground, and easements would be provided as necessary. The City operates and
maintains its own sanitary sewer collection system that connects to the City of San Diego’s
Metropolitan Sewer System.
Drainage and Stormwater Facilities:
The approximate 166-acre site is generally located on the northern flank of a ridgeline that slopes to
the northwest toward Wolf Canyon, which eventually flows south toward the Otay River. Site
elevations within the site range from approximately 150 feet above mean sea level at the storm drain
outlet and sewer tie-in at the southwestern corner of the site, to approximately 610 feet above mean
sea level in the southeastern corner. The project site lies within the watershed of the Otay River, a
westerly flowing stream that drains an area of approximately 145 square miles.
The proposed storm drain system and layout would be designed to address peak flows and to
integrate water quality features needed to comply with the City’s Standard Urban Stormwater
Mitigation Plan requirements for water quality. The proposed storm drain system would be designed
to prevent the co-mingling of treated flows with untreated runoff.
A water quality basin with accommodating storm drain lines and an off-site sewer main would be
constructed south of Main Street on the southwest portion of the site. The proposed storm drain
would extend approximately 0.5 mile southwest from Main Street.
Dry Utilities:
Dry utilities would be extended underground throughout the project site, primarily within streets and
other public easements. Telephone, cable television, and internet service would be provided by
companies such as Cox Communications, Time Warner, and AT&T. Gas and electric services would
be provided by San Diego Gas and Electric.
Schools:
Five elementary schools in the Chula Vista Elementary School District serve Otay Ranch residents:
Heritage Elementary, McMillin Elementary, Hedenkamp Elementary, Veterans Elementary, and Wolf
Canyon Elementary. The closest elementary school to the project site is Wolf Canyon Elementary,
approximately 0.6 mile east of the project site.
Middle school and high school requirements would be met by the existing schools within the
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Middle school and high school requirements would be met by the existing schools within the
Sweetwater Union High School District. The schools that serve Otay Ranch residents, including the
project site, are Rancho del Rey Middle School, Otay Ranch High School, and Olympian High. In
addition to public schools, two private schools are located near the project site: High Tech High
School and Mater Dei High School. Otay Ranch High School, Olympian High School, and Mater Dei
High School are all less than 1 mile from the project site. Additionally, Southwestern College is
located 2.3 miles north of the project site.
Police and Fire Services:
The Chula Vista Police Department currently provides police services within the City. Development of
the project site would increase demand for police services. To meet Growth Management Ordinance
service thresholds, additional personnel and facilities may be required at buildout of the project.
The Chula Vista Fire Department would provide fire service for the project. Fire Station Number 7 is
the closest fire station to the project site, located adjacent to the Village Two core at 1640 Santa
Venetia Street. Additional fire equipment, staff, and facilities required to serve the increased
population as a result of the proposed project are identified in the Public Facilities Financing Plan for
the proposed project.
American Medical Response provides emergency medical services on a contract basis within the
City. There are five American Medical Response South County paramedic units: two are located in
Chula Vista, two are in National City, and one is in Imperial Beach. The proposed project would be
served through this contract arrangement by the City of Chula Vista.
Public Facilities Finance Plan and Fiscal Impact Analysis
The Public Facilities Financing Plan (PFFP), prepared for the City by BWE and Atlantis Group Land
Use Consultants, addresses all of the public facility needs associated with the Portion of Village Four.
The PFFP has been prepared under the requirements of the City of Chula Vista’s Growth
Management Program (GMP), Growth Management Ordinance (GMO) (CVMC 19.09) and Chapter 9
- Growth Management of the Otay Ranch GDP. The preparation of the PFFP is required in
conjunction with the preparation of the SPA Plan to ensure that the development is consistent with
the goals and policies of the City’s General Plan, GMP, GMO and the Otay Ranch GDP.
The PFFP analyzes the demand for facilities based upon the project’s land use and transportation
phasing plan. When specific thresholds are projected to be reached or exceeded based upon the
analysis of the development of the project, the PFFP provides recommended mitigation necessary for
continued compliance with the City of Chula Vista’s GMP, GMO and associated Quality of Life
Threshold Standards. The PFFP does not propose a different development phasing from that
proposed by the Portion of Village Four SPA Plan, but may indicate that the development should be
limited or reduced until certain actions are taken to guarantee public facilities will be available or
provided to meet the Quality of Life Threshold Standards.
The PFFP provides an analysis of threshold requirements and a set of recommendations for public
facility needs associated with traffic, police, fire and emergency services, schools, libraries, parks,
water, sewer, drainage, air quality and climate protection, civic center, corporation yard, and other
City administrative facilities.
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The PFFP also includes a Fiscal Impact Analysis (FIA) of the Portion of Village Four SPA Plan and
phasing program that was prepared by HR&A Advisors. The Portion of Village Four FIA has been
prepared using the City’s Fiscal Impact Framework to provide a consistent evaluation of all of the
Chula Vista SPAs. The Framework utilizes the City of Chula Vista budget to identify and allocate
variable revenues and costs that grow proportionally with incremental development, and sets up a
consistent method to calculate revenue and cost impacts that may change according to the specific
development program. Such variables include property taxes, vehicle license fees, sales tax
receipts, and transient occupancy tax receipts.
Based on the FIA and the assumptions contained therein, annual fiscal impacts are negative for Year
1. In the first year there is a net fiscal deficit of approximately $33,174, and turns positive in Year 2
with a surplus of approximately $28,736, followed by surpluses of approximately $61,993 in Year 3,
$100,704 in Year 4, and $143,275 in Year 5.
CVMC Section 19.09.060(J) states that “projects shall be conditioned to provide funding for periods
where expenditures exceed projected revenues.” A condition has been added to the Tentative Map
and SPA conditions requiring that the applicant enter into an agreement to provide such funding.
Please refer to the PFFP, which includes the FIA, for additional details (Appendix A, SPA Plan).
Air Quality Improvement Plan
The City has included a Growth Management Element (GME) in its General Plan. One of the stated
objectives of the GME is to actively plan to meet federal and state air quality standards. This
objective is incorporated into the GME’s action program. In addition, the City’s GMO requires that an
Air Quality Improvement Plan (AQIP) be prepared for all major development projects (50 dwelling
units or greater) as part of the SPA Plan process. The AQIP for the proposed project must comply
with the City’s AQIP Guidelines.
The purpose of the AQIP is to provide an analysis for air pollution impacts that would result from
development of the Portion of Village Four and to demonstrate how the design for the Portion of
Village Four reduces vehicle trips, maintains or improves traffic flow, reduces vehicle miles traveled
and reduces direct or indirect GHG emissions. This AQIP also demonstrates how the Portion of
Village Four has been designed to be consistent with the City’s Green Building Standards (CVMC
15.12) and Energy Code (CVMC 15.26) and represents the best available design in terms of
improving energy efficiency and reducing GHG emissions.
Fire Protection Plan
The City requires the preparation and approval of a Fire Protection Plan (FPP) with every new SPA
Plan. In addition, the California Fire Code requires a FPP with all new development based on its
proximity to the Urban Wildlife Interface. The FPP prepared for this project provides measures for
fire protection that meet California Fire and Building Codes or provide the Fire Department the option
of accepting equivalent protection where the code cannot be strictly achieved. The primary focus of
this FPP is providing an implementable framework for suitable protection of the planned project’s
structures and inhabitants.
Preserve Edge Plan
The purpose of the Preserve Edge Plan is to identify allowable uses within appropriate land use
designations for areas adjacent to the Otay Ranch Preserve. In accordance with Policy 7.2 of the
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Otay Ranch RMP, a Preserve Edge Plan is to be developed for all SPAs that contains areas adjacent
to the Preserve. The Portion of Village Four will border the Otay Ranch Preserve on its northerly and
westerly boundaries adjacent to Wolf Canyon. The Preserve Edge Plan area is a public or privately
owned 100-foot strip of land adjacent to the Preserve. No structure other than fencing and walls shall
be constructed within the 100-foot Preserve Edge.
Water Conservation Plan
The City of Chula Vista’s GMO requires all development projects with 50 or more dwelling units to
prepare a Water Conservation Plan at the time of the SPA Plan preparation. The Water Conservation
Plan prepared for the Portion of Village Four presents a review of presently available technologies
and practices which result in water conservation in primarily residential development. The report
presents water conservation measures that will be incorporated into the planning and design of the
Portion of Village Four project, including the requirements outlined in the Landscape Water
Conservation Ordinance.
Energy Conservation Plan
In compliance with the Otay Ranch GDP requirements for a Non-Renewable Energy Conservation
Plan, the proposed project incorporates transportation design features that encourage energy
conservation. On a regional level, the proposed project is designed to accommodate bus rapid transit
and rapid bus service. In addition, the project proposes a mix of residential densities to complement
the mixed-use environment of the abutting Village Eight West community, and would provide a
walkable and bikeable community that promotes pedestrian activity.
Affordable Housing Plan
The City of Chula Vista Housing Element, Guidelines to the Balanced Communities Policy, and the
Otay Ranch GDP provide that ten percent (10%) of the total units will be affordable to low and
moderate income households. The estimated Portion of Village Four affordable housing unit
obligation is based on the Portion of Village Four SPA entitlement authorization of 350 units within the
Village. The affordable units required for the Portion of Village Four are 17.5 low income and 17.5
moderate-income affordable units. A condition of approval has been included in the SPA and TM
Resolutions requiring the applicant to enter into a “Balanced Communities Affordable Housing
Agreement” to indicate how they will comply with this obligation.
Agricultural Plan
The 1993 Otay Ranch Program EIR requires the preparation of an agriculture plan concurrent with
the processing and approval of a SPA plan where existing or future on-site agricultural uses may
affect contemplated development. The Findings of Fact require that the agriculture plan indicate the
type of agriculture activity allowed as an interim use and that it includes guidelines designed to
minimize land use interface impacts related to noise, odors, dust, insets, rodents, and chemicals that
may be produced or used by agricultural activities and operations.
4. Tentative Map
A Tentative Subdivision Map is required for a division of land resulting in four or more lots or
condominium units, pursuant to Section 2 of the City of Chula Vista Subdivision Manual. The
proposed Tentative Map has been designed to comply with the lot design criteria of the Subdivision
Manual. The proposed Tentative Map would be consistent with surrounding development and would
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support the design of a viable village with mixed uses that create a sense of strong place for
residents of a Portion of Village 4 and the surrounding communities. Overall the subdivision design is
in conformance with the City’s Subdivision Manual, Zoning Ordinance and other associated
regulatory documents. The Tentative Map is consistent with the General Plan and Otay Ranch GDP
densities established for the respective areas.
A Tentative Map is proposed to implement the planned land use changes and subdivide 166.02 acres
into parcels supporting up to 73 single-family residential units, 277 multi-family residential units,
approximately 2.08 acres of CPF uses, and 20.19 acres of open space uses for the Portion of Village
4 project. The analysis presented in the PFFP discussion, which addresses transportation,
circulation, drainage, water, sewer, fire, schools, and parks on pages 22-23 of this staff report are
also applicable to the proposed Tentative Map.
Project Access:
Primary regional access to the Portion of Village Four is from State Route 125 and Interstate 805 via
Olympic Parkway and La Media Road. There is currently no public roadway access to or within the
site. An extension of Main Street is proposed in order to provide access within the project area.
Proposed streets will conform to the guidelines set forth in the Portion of Village 4 SPA Plan and to
applicable City of Chula Vista street design guidelines.
Subdivision Design:
The subdivision design consists of a total of 90 lots served by the extension of Main Street, a public
street. The breakdown of these lots is as follows: 76 residential lots (73 single-family residential lots
and 3 multi-family lots); eight (8) master Homeowners Association (HOA) open space lots; four (4)
open space preserve lots and two (2) CPF lots. The site design of the village follows the undulating
landform of Wolf Canyon. Building sites have been created in terraces and streets are located within
the topography to adhere to City horizontal and vertical curve standards.
Grading:
The site presently is vacant and consists of a hexagonally shaped lot. The site is topographically
diverse, with elevations ranging from approximately 165 feet above mean sea level (msl), the low
point at the storm drain outlet and sewer tie-in located just outside Otay River, to 610 feet msl at the
high point along the southeastern boundary of the Portion of Village Four.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found that no City Council
Member has property holdings within 500 feet of the boundaries of the property which is the subject
of this action. Consequently, this item does not represent a disqualifying real property-related
financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(11), for
purposes of the Political Reform Act (Cal. Gov. Code section 87100 et seq.).
Staff is not independently aware, nor has staff been informed by any City Council Member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The Portion of VillageCity of Chula Vista Printed on 5/10/2018Page 22 of 23
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File#:18-0145, Item#: 17.
Community, Strong and Secure Neighborhoods and a Connected Community. The Portion of Village
Four Project supports the Economic Vitality goal, particularly City Initiative 2.1.3 (Promote and
support development of quality master-planned communities). The SPA Plan implementation
documents (the SPA Plan, Design Guidelines, and TSM) support the development of a high-quality
master-planned community (as described above) adjacent to a park, jobs, transit, shopping, and
other amenities, all within walking distance for residents. The Project implements the Strong and
Secure Neighborhoods Strategic goal by providing construction of a development project in a manner
that ensures code compliance, public health and safety of the community.
CURRENT YEAR FISCAL IMPACT
All costs associated with preparing and processing the GDP amendment, SPA Plan, EIR, Tentative
Subdivision Map, and all supporting documents were borne by the applicant, resulting in no net fiscal
impact to the General Fund or the Development Services Fund.
ONGOING FISCAL IMPACT
The FIA for the Portion of Village 4 SPA reflects the construction of 350 residential units. The FIA
estimates that for Year 1 of Project buildout, the net fiscal impact will be net negative (approximately
$33,174) and by Year 2 of Project buildout, the fiscal impact to the City would be net positive
(approximately $28,736), with increasingly positive impacts through buildout. At buildout (Year 5), the
Project is anticipated to generate a positive net fiscal impact of approximately $143,275 annually.
Fiscal Impact Deficit Fee
In order to mitigate the year one deficit, based upon a total of 350 units, a fiscal impact deficit
mitigation amount of $95 per unit is indicated in the current analysis, which will be collected prior to
building permit issuance (see Attachment 9, Draft City Council PCM Resolution, SPA Condition of
Approval No 8) and Attachment 10, Draft City Council TM Resolution, Tentative Map Condition of
Approval No. 23).
ATTACHMENTS
1. Locator Map
2. Findings of Fact and Statement of Overriding Considerations -Flash Drive “A”
3. Otay Ranch General Development Plan Amendment -Flash Drive “B”
4. Portion of Village Four SPA Plan, including PFFP/FIA -Flash Drive “B”
5. Portion of Village 4 Tentative Map -Flash Drive “B”
6. Planning Commission Resolution FSEIR17-0001 and draft minutes -Flash Drive “A” for Exhibit
1- refer to Attachment 2 of the Staff Report (Resolution only included in Legistar)
7. Planning Commission Resolution MPA17-0006; PCM15-07; PCS15-03
8. Otay Ranch Village Four SPA Plan EIR-Flash Drive “A”
9. Ownership Disclosure Form
10.Public comment letters
Staff Contact: Jeff Steichen, Associate Planner
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ATTACHMENT 9
ATTACHMENT 1
LOCATOR MAP
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ATTACHMENT 2
FINDINGS OF FACT AND
STATEMENT OF OVERRIDING CONSIDERATION
REFER TO FLASH DRIVE “A”
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ATTACHMENT 3
OTAY RANCH
GENERAL DEVELOPMENT PLAN
AMENDMENT
REFER TO FLASH DRIVE “B”
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ATTACHMENT 4
PORTION OF VILLAGE FOUR
SPA PLAN
(INCLUDING PFFP/FIA)
REFER TO FLASH DRIVE “B”
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ATTACHMENT 5
PORTION OF VILLAGE FOUR
TENTATIVE MAP
(INCLUDING LANDSCAPE PLANS)
REFER TO FLASH DRIVE “B”
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Minutes
REGULAR MEETING OF THE CITY OF CHULA VISTA
PLANNING COMMISSION
March 28, 2018 Council Chambers
6:00 p.m. Public Services Bldg A
276 Fourth Avenue
CALL TO ORDER
COMMISSIONERS PRESENT: Anaya, Burroughs, Gutierrez, Milburn, Zaker
COMMISSIONERS ABSENT: Nava and Calvo
MOTIONS TO EXCUSE: Nava and Calvo
MSC: Anaya/
Motion Passed: 5-0-0
PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE
OPENING STATEMENT:
1. APPROVAL OF MINUTES:
Date: March 14, 2018
MSC: Zaker/Burroughs
Motion Passed: 5-0-0
PUBLIC COMMENTS:
An opportunity for members of the public to speak to the Planning Commission on any subject
matter within the Commission’s jurisdiction, but not an item on today’s agenda. Each speaker’s
presentation may not exceed three minutes.
Joseph Raso, businessman and Chula Vista resident made a formal request to have the
Commission request that staff look in to his previous recommendation to eliminate the parking
requirements in the core area of downtown Chula Vista. He submitted a document to the
Commissioners with a brief history of his attempt to open a small café on Broadway.
City of Chula Vista Boards & Commissions
Planning Commission
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Planning Commission Minutes
March 28, 2018
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PUBLIC HEARINGS
The following item(s) have been advertised as public hearing(s) as required by law. 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 Board Secretary prior to the meeting.
PUBLIC HEARING FEIR 17-0001; MPA17-0006; PCM 15-07, PCS 15-03, Consideration of
Final Environmental Impact Report 17-0001, amendments to the Otay
Ranch General Development Plan, a new Portion of the Village 4
Sectional Planning Area Plan, a new Tentative Map for Chula Vista Tract
15-03, and the Planned Community District Regulations for a portion of
Otay Ranch Village 4.
Resolution No. FEIR 17-0001: Recommending that the City Council
make Certain Findings of Fact; Adopt a Statement of Overriding
Considerations; Adopt a Mitigation Monitoring and Reporting Program
and Certify the Final Environmental Impact Report (FEIR17-0001/SCH
2016041080) for amendments to the Otay Ranch General Development
Plan, adopt a new Portion of Village Four Sectional Planning Area Plan,
and associated Tentative Map pursuant to the California Environmental
Quality Act.
Resolution No MPA17-0006; PCM 15-07, PCS 15-03; Recommending
that the City Council 1) Approve amendments to the Otay Ranch General
Development Plan; 2) Approve a new Portion of the Village Four
Sectional Planning Area Plan and Tentative Map; and 4) approve an
Ordinance associated with the Planned Community District Regulations.
QUESTIONS FROM STAFF – Questions from Commissioners included these items:
Will there be any retail or commercial?
What is the elevation?
The difference between open space and open space reserve.
Commissioner Zaker stopped by his house on the way to the meeting and found an anonymous
letter directed to his home address. It was regarding a number of concerns regarding the project.
He brought it so that it could be added to the record and stated it would, by no means, influence
his thoughts or vote regarding the project.
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Planning Commission Minutes
March 28, 2018
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PUBLIC HEARING OPENED
Marcela Escobar Eck (Atlantis Group/Land Use) gave a brief presentation on the project. She
stressed that they are preserving about 70% of the open space on the site. This, in turn, is what
accounts for the higher density in the north of the project. Also, they worked closely with the
resource agency regarding the sensitive wild-life habitat.
Mark Liuag, resident, also received the anonymous letter. The additional 150 units will be
added to the Quarry area at some point. Is there no way to put those 150 units back into the same
area as in the original SPA plan? His second concern was in regards to the Fiscal Impact. Spoke
about single family vs multi-family and how it affects the Fiscal Impact. Doesn’t understand
how you can take single family clustering fees and turn them into apartments. He addressed the
issue of single-family clustering vs apartment units. When you get in to the apartment model,
you change the traffic patterns and the whole impact of everything. He asked the Commission to
consider these concerns, and if need be, ask more questions.
PUBLIC HEARING CLOSED
COMMISSIONER DELIBERATIONS – included questions on:
Questioned financial analysis in that it says it would be positive revenue to
the City within one year – thought it usually take 5-7 years
Public safety availability – what happens if ½ cent sales tax does not pass?
Density
Fees in-lieu of parks
Closeness to the nearest retail center – concerns on Economic Development
Was the Fiscal Analysis compared to the original SPA plan configuration
Roads that lead into and out of the project.
Fiscal model based on old numbers?
Is the .87-acre site for private recreational use – if so, what kind?
Financing of fire stations, sewer system and utilities
The impact of increased density?
Will the City continue to fall behind on the public safety standards?
Concerns regarding the fiscal impact, balance of business land vs residential and the park land
were addressed by Director of Development Services Kelly Broughton. Marcella Escobar Eck
addressed the distance to existing shopping – Otay Ranch Towne Center is about 1.5 miles. It is
too early to tell about the retail adjacent to this project.
Kent Arden, Home Fed, spoke about his project which is adjacent to this project. Ground
breaking to take place this year and that will take care of road problems.
Stan Donn, Sr. Planner and Marcella Escobar Eck spoke on the small, non-city park and the
community amenities. Donn also spoke about zoning and regulations of site.
Director Broughton answered many of the questions regarding fiscal, impacts, roads and density.
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Planning Commission Minutes
March 28, 2018
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Commissioner Zaker had a question regarding Page 77, #14 which addressed funding of a 4th
Fire Fighter after the issuance of the 121st Building Permit.
Commissioner Milburn asked if a cross-analysis for Police and Fire in a new construction site on
a per-unit basis.
Director Broughton assured Zaker that at the issuance of the 121st Building Permit, the applicant
would be held to the funding agreement and he stated that a per-unit cost had not been done, but
that staff was currently working on a study that would also include information on east-side vs
west-side calls for service. That concern is definitely addressed in the new study.
MSC: Gutierrez/Anaya
Vote: 5-0-0 (Nava and Calvo absent)
OTHER BUSINESS
2. DIRECTOR’S REPORT:
The City has completed the draft of the University SPA Plan which is now out for Public
Review. This is an important next step to be able to entice a University to locate here.
3. COMMISSION COMMENTS:
Anaya – would like an update on the K & Third project
Broughton advised the applicant had begun the project and as they got further
along, realized that the cost of construction had gone up so much that they
could not continue at this time. Are still processing some small amendments to
the project, so they appear to be serious about moving forward.
Anaya - driving here on Broadway he realized the former Village Card room is now
gone. The Pho Restaurant is now vacant (corner of F & Broadway) – is there
anything in the cue for that area (between F and Moss)?
Broughton – nothing currently, but hoping that the combination of the Broadway
& Moss project being complete will spark some interest.
Zaker: As the City moves forward with an RFP and hiring a consultant, could Mr. Rasso
be involved in that as he has shown a definite interest.
Broughton – We are actively participating with the Third Avenue Village
Association – he believes Mr. Rasso is part of that group and will be actively
involved.
Also, is there anything at Third & E Streets?
Sr. Planner Donn – is working on that project with a developer who is planning a
Senior Housing Development – (55+) - single unit apartments.
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Planning Commission Minutes
March 28, 2018
Page -5-
Broughton – on the corner – a developer is interested in a nice restaurant.
Kitty-corner to that location – we have an application for a mixed-use project.
ADJOURNMENT at 7:14 p.m. to the next Regular Planning Commission Meeting on
April 11, 2018 at 6:00 p.m., in the Council Chambers.
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ATTACHMENT 8
OTAY RANCH
VILLAGE FOUR SPA PLAN
ENVIRONMENTAL IMPACT REPORT
REFER TO FLASH DRIVE “A”
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MEMORANDUM
DEVELOPMENT SERVICES DEPARTMENT
Date: May 15, 2018
To: Madam Mayor and City Council Members
From: Kelly Broughton, Development Services Director
Stan Donn, Development Services Department, Planning Division
Jeff Steichen, Development Services Department, Planning Division
Subject: MPA17-0006, PCM 15-07, Otay Ranch Portion of Village Four GDP Amendment,
SPA Plan and Tentative Subdivision Map
The following two public comment letters were received by the Planning Commission prior to the
scheduled meeting on March 28, 2018.
The first letter is from an anonymous person addressed to “Concerned Community Member.” The
second letter is from Mr. Peter Watry addressed to “Planning Commission Members, Kelly
Broughton and Staff.”
Staff has prepared responses to both letters. Responses to the anonymous letter are provided within
the body of the letter and shown as italicized under “Staff Response:” Response to Mr. Peter Watry’s
letter is provided in a separate document.
Both letters and staff’s responses are provided.
Attachments:
1. Anonymous Letter with Staff’s Response
2. Mr. Peter Watry Letter
3. Staff’s Response to Mr. Watry’s Letter
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May 15, 2015
The letter below, provided in “regular” font, was received by a Planning Commission
Member and community members prior to the Planning Commission hearing on
Village 4 on March 28, 2018. Staff responses to the letter are provided in “italicized”
font below each issue.
Dear Concerned Community Member,
The City of Chula Vista Planning Commission and City Council will be hearing a
project entitled 'A Portion of Village 4 SPA Plan', along with its Tentative Map and
Environmental Impact Report soon. In fact the Planning Commission hearing has
been set for March 28th at 6:00 p.m. in the Council Chambers. Please come out, and
invite your neighbors and friends too, to share your thoughts and to get some of these
concerning questions answered.
The project seeks to intensify the land uses approved in the City's General Plan and
the Otay Ranch General Development Plan taking the project from a small single-
family village (with a minimum lot-size of 10,000 square-feet along Wolf Canyon) to a
village with single-family, multi-family and high density apartments. This is being
sought through the processing of an Otay Ranch General Development Plan
Amendment, a Sectional Planning Area (SPA) Plan, a Tentative Subdivision Map and
an Environmental Impact Report.
The application does not include a General Plan Amendment, even though IT IS NOT
IN CONFORMANCE WITH THE CHULA VISTA GENERAL PLAN. While Section 7.14
of the General Plan specifically allows for clustering in response to site constraints, it
goes on to say that "the degree of clustering should not result in housing types
inconsistent to the area, such as creating multi-story, multifamily units in a single
family designated area [emphasis added}." Creating medium-high and high density
apartments in a single family designated area is exactly what this project is proposing.
They need a General Plan Amendment to do that.
STAFF RESPONSE:
The project is in conformance with the General Plan (GP) and a General Plan
Amendment is not required. The GP Land Use Diagram for this portion of
Village 4 designates the planned land use as Low-Medium Residential. Per GP
Section 4.9.2 Low-Medium Residential ranges from 3 to 6 dwelling units per
gross acre (du/ac). The gross residential acreage for this portion of Village 4 is
58.0 acres. The project proposes 350 units. The proposed project’s residential
density is therefore 6.0 du/ac (350 units divided by 58 acres) which is
consistent with the GP. The proposed project’s consistency with the clustering
provisions of the GP is described in more detail below.
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Furthermore, the applicant is trying to confuse the above 'clustering' policy by trying to
fabricate ways that high density apartments are allowed in low-density single family
areas. The General Plan implementing zones that the applicant is trying to apply, are
not relevant in the Otay Ranch planning area. The Otay Ranch GDP already
implements the General Plan with a Land Use Designation of Low Medium Density
Residential, which allows for single family residential units on medium sized lots
ranging from 3 to 6 dwelling units per acre (see GDP Land Use Designations Table).
Under clustering concepts, the GDP allows for single-family dwellings on smaller lots,
zero lot line homes and some single-family attached units (townhomes and patio
homes). It does not allow for apartments and requires a General Plan Amendment to
allow them. Unless the project is completely consistent with the GDP (which this one
is not), a General Plan Amendment is required. Almost every SPA Plan processed to
date had a General· Plan Amendment associated with it.
How can this one be different?
STAFF RESPONSE:
The GDP is being amended to include the MH (11-18 du/ac) and H (18-27
du/ac) classifications that would allow for higher density residential uses
including apartments. This is consistent with the GDP Guiding Principles on
page 1-5 of the GDP, which states: “The Plan will: Cluster development in
villages with varying character and density, interrelated on the Otay Valley
Parcel, yet distinct in identity and style.” The proposed project would allow for
varying density and housing development that would be distinct in identity and
style.
The GP provides that “Using a cluster development concept, other housing
types could be consistent with this designation such as single-family attached
units (townhome, row homes, and patio homes) or smaller lot and zero-lot line
detached single-family homes.” GP Policy LUT 29.3 further clarifies the
clustering policy, by stating that “Clustering shall not result in the creation of
dwelling product types that are substantially out of character with the intended
dwelling type of the subject general plan residential classification and the
introduction of some unit types typically applicable to the next highest
residential density classification may be allowed provided that the predominant
character of the project maintains consistency with the applicable residential
classification.” As noted below, only 21% of the overall project area will
accommodate residential apartments, allowing for the predominant character
(79% of the project) to maintain consistency with the applicable RLM
classification.
The project development area is within and proposes to implement the Low-
Medium Residential (RLM) designation by zoning 27.4 acres using R-1 and R2
zoning, both of which are included as appropriate zones within the RLM GP
Land Use Designation and Zoning Table 5-4 as Low-Medium Residential.
These two zones represent 79% of the area designated for residential
2018-05-15 Agenda Packet Page 502
development in the project. The project is proposing to introduce some unit
types typically applicable to the next highest residential density classification –
Medium Residential pursuant to GP Policy LUT 29.3 and GP Land Use
Designation and Zoning Table 5-4. In fact, GP Table 5-4 identifies R-3 zoning
as applicable for implementation of the Medium Residential classification. Only
21% of the residential area (7.2 Acres) of the proposed project will fall within
this next highest residential classification. In addition, the portion of the project
that will include unit types typically found in R-3 zoning is located in proximity to
the Village Eight West Town Center (45 du/acre) to the east, north of Main
Street - a six-lane major Arterial General Plan Circulation Element Road. The
R-3 classification relates more with the higher-density Village Eight Town
Center physically and geographically due to its immediate adjacency, and
separated from the rest of the project.
The project is therefore consistent with the clustering provision of the GP
because the predominant character of the development is consistent with the
GP conforming R-1 and R-2 zoning (79%) and only a small portion of the
project site (21%) R-3 zoning, is adjacent to and consistent in character with
the higher density use in Village 8 West, a product type consistent with the next
highest residential density classification.
There is a reason that the Otay Ranch GDP considered this a "Specialty Village", and
that is because it was intended to be a low density single family neighborhood, not a
dense and intense mixed use village like many of the others. It never included a mixed
use core and higher density housing because it is inappropriate for the isolated large
lot single family development planned for in the GDP and General Plan.
QUESTION 1 that someone should ask of the Planning Commission/Staff-
WHERE IS THE APPLICATION FOR A GENERAL PLAN AMENDMENT GIVEN
THAT THIS PROPOSAL IS NOT IN CONFORMANCE WITH THE CHULA VISTA
GENERAL PLAN, IN THAT IT IS CLUSTERING TO SUCH A DEGREE THAT IT IS
TRYING TO FORCE APARTMENTS INTO SINGLE FAMILY DESIGNATED AREAS?
STAFF RESPONSE:
As described in the staff responses above, the overall residential development
for the project is consistent with the allowable density of 3-6 du/ac in the
General Plan. The clustering proposed by the project also is consistent with
the GP as it implements R-1 and R-2 zoning on 79% of the area designated for
residential development, and allows R-3 zoning on just 21% of the project area
that is in proximity to the Village Eight West Town Center.
Further, Section 7.14 Clustering of Residential Development, on page LUT-125
of the GP allows for clustering primarily due to physical constraints of the site
such as: topography; geology; biological resources; or other similar constraints.
The project utilizes clustering due to the topographical and biological resource
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constraints and as a result of clustering, the project is able to dedicate over
58% of the site (68 acres) for the MSCP Preserve.
QUESTION 2 - WHY DOESN'T THE EIR INLCUDE AN ALTERNATIVE BASED ON
THE EXISTING LAND USE DESIGNATION? The Reduced Alternative is not the
same as utilizing the existing land use designation. How many homes can this site
really hold in conformance with the adopted General Plan and General Development
Plan? Why was this never looked at?
STAFF RESPONSE:
The currently adopted Otay Ranch General Development Plan (GDP) specifies
a designation for 453 single family residential units, and the proposed project
includes a mix of 350 single- and multi-family residential units.
Pursuant to the California Environmental Quality Act (CEQA) Guidelines, an
Environmental Impact Report (EIR) is required to “describe a range of
reasonable alternatives to the project, or to the location of the project, which
would feasibly attain most of the basic objectives of the project but would avoid
or substantially lessen any of the significant effects of the project, and evaluate
the comparative merits of the alternatives” (14 CCR 15126.6(a)). CEQA does
not require that an EIR include an alternative that does not offer a substantial
environmental advantage over a proposed project. (Citizens of Goleta Valley v.
Board of Supervisors (1990) 52 Cal.3d 553, 566.)
An alternative that is in conformance with the adopted GP and GDP would
consist of 350 single family residential units. This alternative would result in
increased traffic impacts (10 vehicle trips per day for single family development
vs. 6-8 vehicle trips per day for medium density residential), and higher
greenhouse gas and air quality impacts (due to increase in trips). Such an
alternative would not meet several project objectives, such as the provision of a
wide variety of housing options (Project Objective #11).
Moreover, a 350-unit project comprised of only single-family homes would not
comply with the vision the City has laid out for itself, which prioritizes the
development of housing opportunities to meet the City's diverse needs
(Housing Element Policy Focus 2.2) and the implementation of smart growth
principles (General Plan, p. LUT-31.) By moving away from the typical single-
family development that was included in the GDP and including clustered multi-
family development in close proximity to the Village Eight West Town Center
and the University/Regional Technology Park, the proposed project creates a
range of housing opportunities and choices, establishes walkable
neighborhoods, develops a distinctive community within the larger Otay Ranch
Community, and preserves open space, natural beauty and critical
environmental areas – all in furtherance of the City's demonstrated goals. (See,
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e.g., General Plan, p. LUT-31.)
In addition, the needs and desires of homebuyers have changed since the GDP
was adopted. To that point, the proposed project modified the breakdown of the
GDP allocation for this site – but did not change the total allocation – in an
effort to satisfy GP Policy LUT 1.9, which directs the City to "[p]rovide
opportunities for development of housing that respond[s] to diverse community
needs in terms of density, size, location, and cost." That City-wide directive was
codified into the Final EIR as Project Objective 12, which states: "Provide a
wide variety of housing options, including affordable housing, to City residents,
future students, and faculty of the planned 4-year university and employees of
the Regional Technology Park, Village Eight West, and Village Nine Town
Center."
For these reasons, and pursuant to the CEQA Guidelines, this alternative was
not analyzed.
QUESTION 3 - AS STATED IN THE STAFF REPORT - IF THE REDUCED
DEVELOPMENT ALTERNATIVE MEETS MOST OF THE PROJECT OBJECTIVES,
REDUCES PROJECT IMPACTS AND IS THE ENVIROMENTALY SUPERIOR
ALTERNATIVE WHY DOESN'T PLANNING COMMISSION SEND STAFF BACK TO
WORK WITH THE APPLICANT ON A SPA PLAN THAT MEETS THAT
ALTERNATIVE?
This seems like a win-win. Less units equals fewer traffic impacts, etc. and it also
might have the added benefit of reducing some of the other Significant and
Unmitigated Impacts to Below a Level of Significance. The applicant will go into
reasons why this alternative does not meet the project objectives, but remember these
objectives are written by the applicant with the intent of only their "project" meeting
them all. Ask staff to explain which of the objectives this alternative does not meet and
why the proposed project is better.
STAFF RESPONSE:
Before addressing the specifics of the comment, it is important to note that the
Final EIR is a City document and the Project Objectives included therein are
those that have been adopted by the City for this project.
The Reduced Development Alternative would include the development of 61
single family residential units, south of Main Street, in a similar location as the
proposed single family residential units of the project. This number of units was
chosen because it would lower the GHG emissions of this alternative to below
the threshold of significance.
Further, as explained in the Final EIR, the Reduced Development Alternative
would meet most of the project objectives, but it meets them to a much lesser
2018-05-15 Agenda Packet Page 505
degree than the proposed project. Specifically, the development of 61 single-
family units – in an area already approved for 350 units – would fail to meet
Project Objectives 10 and 11, which seek to "[e]stablish a land use and facility
plan that ensures the viability of the SPA Plan area in consideration of existing
and anticipated economic conditions," and "[p]rovide a wide variety of housing
options, including affordable housing, to City residents, future students, and
faculty of the planned 4-year university and employees of the Regional
Technology Park, Village Eight West, and Village Nine Town Center,"
respectively. (FEIR, p. 10-10.) CEQA specifically allows a decision maker to
reject an alternative, even if it is the environmentally superior alternative, if the
alternative is inconsistent with the subject agency's goals and policies.
(California Native Plant Society v. City of Santa Cruz (2009) 177 Cal.App.4th
957, 1001.)
Here, staff does not believe a 61-unit single-family residential project is an
appropriate use of the property given the underlying land use designation and
the City's declared intention to diversify its housing stock to accommodate
General Plan Policy LUT 1.9, which directs the City to "[p]rovide opportunities
for development of housing that respond[s] to diverse community needs in
terms of density, size, location, and cost." That policy cannot be met by an
alternative that would remove 289 units from the GDP's already approved
housing stock.
As indicated in the project’s proposed Findings and Statement of Overriding
Considerations, the proposed project brings Village Four planning in-line with
today’s marketplace and homebuyer preference as well as home typologies
attainable to a broader range of buyers and renters. This provides City
residents with a diverse range of housing choices and opportunities which
conform to their preferences. Aligning Village planning and today’s housing
market also facilitates construction and home sales.
Because the Reduced Development Alternative would severely limit the supply
of units in an area that already has been planned for residential development
and it would not offer a range of housing options that comply with today’s
market-place, it would fly directly in the face of the General Plan. For these
reasons, the Reduced Development Alternative should be rejected, and the
proposed project should be approved.
QUESTION 4 - HOW CAN ANYONE KNOW IF THE GDP AMENDMENTS WERE
ADEQUATELY ANALYZED IF THE AMENDMENTS WERE NOT EVEN CREATED
UNTIL FEBRUARY 6, 2018, MONTHS AFTER PUBLIC REIVEW WAS
COMPLETED?
The proposed GDP Amendments were not available to the public at the Planning
counter during public review. They were created after the public review period. In fact
2018-05-15 Agenda Packet Page 506
the GDP Amendment document is dated February 6, 2018, months after the public
review period ended on December 6, 2017. This seems to go completely against
CEQA disclosure principals and the EIR should be re-circulated so that the public has
a chance to see all of its components at the same time. Give the public a chance to
provide comments, rather than hide portions from them and create proposals in the
dark.
STAFF RESPONSE:
The Final EIR describes Village 4, as currently adopted within the Otay Ranch
GDP, in Chapter 3, Environmental Setting; Chapter 4, Project Description;
Section 5.1, Land Use, Planning, and Zoning; and shows the current Village
Four in Figure 5.1-2, Adopted Otay Ranch General Development Plan Land
Uses. The Final EIR describes the proposed project, which provides for
different land uses compared to the adopted Otay Ranch GDP, in detail in
Chapter 4, Project Description, of the Final EIR. Section 4.5, Discretionary
Actions/Approvals, of the Final EIR was revised to clarify that the GDP
amendments will remove the existing description of Village 4 and replace it,
along with revised text and graphics to reflect the proposed project.
As explained in the Final EIR (Responses to Comments), the Otay Ranch GDP
will be amended to reflect the proposed project analyzed in the Final EIR.
Specifically, the description, land use table, and a portion of the policies of
Village Four contained in Part II of the Otay Ranch GDP (beginning on page II-
86 of the Otay Ranch GDP) have been updated based on comments to the
Draft EIR. The land use designation figures contained in the Otay Ranch GDP
will be amended to reflect the proposed project. The proposed revisions to the
Otay Ranch GDP have been included in the application package presented to
the decision makers. The proposed amendments to the Otay Ranch GDP,
including a comparison between existing and proposed figures, tables, and text,
are included in Appendix L to the Final EIR. These revisions to the Final EIR
were available to the Planning Commission and are presented in
strikeout/underline format. Those changes are insignificant as the term is used
in Section 15088.5(b) of the CEQA Guidelines and the Final EIR need not be
recirculated for additional public review.
QUESTION 5 - THERE ARE MULTIPLE OWNERS OF DEVELOPMENT AREAS
WITHIN VILLAGE 4. ASK STAFF TO BREAK DOWN THE OWNERSHIPS AND HOW
MANY UNITS ARE ASSOCIATED WITH EACH OWNERSHIP. This owner does not
own the rights to 350 units in Village 4, unless the adjacent owner waives their rights.
Is there a letter waiving Vulcan Quarry's rights to residential development? Telling a
2018-05-15 Agenda Packet Page 507
property owner that they can go ask for a General Plan Amendment to recoup their
units that you gave to another property owner puts the City in legal jeopardy.
STAFF RESPONSE:
The existing Village Four GDP allows for up to 453 residential units. The
proposed project implements 350 of these units, which is only a portion of the
allowable units. The adjacent ownership is still entitled to the balance of
residential units pursuant to the terms of the Otay Valley Reclamation Plan
(Plan), which was previously approved by the City Council.
QUESTION 6 - ASK STAFF TO IDENTIFY ALL OF THE DEVELOPMENT AREAS IN
VILLAGE 4 (INLCUDING THE VULCAN QUARRY DEVELOPMENT AREAS) There
are other development areas within Village 4 that are not owned by this applicant, but
approval of this Tentative Map will landlock these parcels topographically. Access to
Vulcan Quarry's northern development area needs to come through Village 4 as
accessing it through the Quarry would be topographically infeasible. Until those
development areas are removed from the GDP, Vulcan Quarry has rights to
residential units in two areas, regardless of their Reclamation Plan.
STAFF RESPONSE:
The other owner in Village Four is Brisa Materials, LLC (“Vulcan Materials Co.”
or “Vulcan”), the owner and operator of the quarry. Vulcan’s property has direct
access to Main Street on the south end and vested reclamation rights under the
California Surface Mining and Reclamation Act as acknowledged in Chula Vista
City Council Resolution No. 2008-297. Additionally, per the approved
Reclamation Plan, the access road to the site will remain in place at the
conclusion of the Quarry to provide access to future development areas that
were shown in the Reclamation Plan. The approved Reclamation Plan, which
states that “flat surfaces created by mining would accommodate active
subsequent land uses as provided under the City of Chula Vista General Plan
and Zoning” did not show future development areas adjacent to the portion of
Village Four being proposed for development as a part of the current project.
Before the Vulcan site can be developed, the Reclamation Plan requires the
quarry property owner to amend the GDP and process a SPA plan after the
conclusion of reclamation. The current City GDP also requires future
development within the Quarry to be subject to design review to evaluate visual
impacts on the Otay Valley Regional Park. The development of any remaining
units in Village 4 would only occur as part of these required future approval
processes.
2018-05-15 Agenda Packet Page 508
QUESTION 7 - THE OVERALL VILLAGE IS PROPOSING TO BE SHRUNK FROM
527.8 ACRES TO 371.1 ACRES, WHERE IS THAT LAND GOING AND WHY DIDN'T
THE TOTAL NUMBER OF UNITS ALSO SHRINK?
STAFF RESPONSE:
The total number of allowed units in Village Four is 453 based on the current
GDP. That total remains the same as explained above. There is no requirement
in the GP or GDP to reduce the number of dwelling units based on a land area
reduction.
As described earlier, the GP Land Use Diagram for this portion of Village 4
designates the planned land use as Low-Medium Residential. Per GP Section
4.9.2 Low-Medium Residential ranges from 3 to 6 dwelling units per gross acre
(du/ac). The gross residential acreage for this portion of Village 4 is 58.0 acres.
The project proposes 350 units. The proposed project’s residential density is
therefore 6.0 du/ac (350 units divided by 58 acres) which is consistent with the
GP.
QUESTION 8 - WHY WOULD THE CITY CHOOSE TO TAKE MONEY FOR A PARK
RATHER THAN REQUIRE THE APPLICANT TO PROVIDE ONE? The City has been
collecting money for the community park adjacent to this village for over 20 years and
it still has not been built. The applicant should build the park for its residents to enjoy
at the same time as the development. Why should these residents have to get in their
automobiles and travel to a park in another village?
STAFF RESPONSE:
The City’s Parks and Recreation Master Plan (Master Plan) establishes goals
for the creation of a comprehensive parks and recreation system that meets the
needs of the public by effectively distributing park types, associated recreation
facilities, and programs throughout the City. Consistent with the Master Plan,
the GDP identifies a large-scale Otay Ranch community park within the western
sector of the Otay Ranch Otay Valley Parcel. The recreational needs of the
proposed project as well as the surrounding neighborhoods will be
accommodated by this 70-acre multi-purpose community park located
immediately north of the project.
Because of the availability of the adjacent 70-acre community park and the
difficult biological and steep slope constraints of the project site, the applicant
elected to pay the in-lieu fee for park acquisition and improvement as identified
in the Master Plan, and pursuant to Chula Vista Municipal Code Chapter 17.10,
section 17.10.070.
2018-05-15 Agenda Packet Page 509
QUESTION 8 [sic] - IF OTHER VILLAGES ARE FISCALLY NEGATIVE FOR YEARS,
TYPICALLY UNTIL RETAIL, COMMERCIAL AND/OR OFFICE IS BUILT, HOW CAN
THIS PROJECT BE FISCALLY POSITIVE IN YEAR TWO?
A quick look at the neighboring village's fiscal (for Village 8 West) shows that it will be
fiscally negative for between 9 years and forever (depending on the real inflation rate)
with deficits ranging from $87,000 to $269,500 yearly. What is alarming is that Village
8 West includes 50,000 square feet of office and 250,000 square feet of retail (the
things that drive revenues and help fiscal impacts become positive). Something is
inconsistent in these two fiscal analyses and it seems unlikely that this "residential
only" project would fiscally outperform one with 250,000 square feet of retail. Please
get an explanation as to why that might be. The difference between the Applicant
paying a one-time $85 for each unit to cover supposed deficits (as described briefly in
the staff report) and the $87,000 - $269,500 yearly deficits laid out in the Village 8
West Fiscal Analysis should be considered carefully.
STAFF RESPONSE:
The applicant used the City’s approved financial model to prepare the fiscal
impact analysis (FIA) for the project. This model contained baseline costs that
reflected the City’s assumptions at the time that the project’s FIA was
undertaken. The Village 8 West FIA preceded the proposed Village 4 FIA, and
contained different revenue and expenditure assumptions in that model.
Based on the FIA and the assumptions contained therein, annual fiscal impacts
are negative for Year 1. In the first year there is a net fiscal deficit of
approximately $33,174, and turns positive in Year 2 with a surplus of
approximately $28,736, followed by surpluses of approximately $61,993 in Year
3, $100,704 in Year 4, and $143,275 in Year 5.
CVMC Section 19.09.060(J) states that “projects shall be condit ioned to provide
funding for periods where expenditures exceed projected revenues.” A
condition has been added to the Tentative Map (#24) and SPA (#5) conditions
requiring that the applicant enter into an agreement to provide such funding in
the amount of $85.00 per dwelling unit, and provide funding for the shortfall in
accordance with this requirement.
QUESTION 9 - IF THE CITY HAS DETERMINED THAT THERE IS A CRISIS IN THE
AMOUNT OF STAFFING FOR PUBLIC SAFETY EMPLOYEES, HOW CAN THEY
EVEN CONSIDER THIS PROPOSAL UNTIL AFTER THE ½ CENT SALES TAX
VOTE FOR PUBLIC SAFETY?
STAFF RESPONSE:
2018-05-15 Agenda Packet Page 510
The ½-cent sales tax measure that will be on the June 2018 ballot seeks to
address public safety across the City. The issue cannot and should not be
resolved in the context of the current project, a 350-unit residential subdivision.
Nevertheless, the applicant has agreed to a tentative map condition that
requires the following: “Prior to issuance of the 121st Building Permit, Applicant
shall negotiate with the Chula Vista Fire Department to determine the
contribution by the Applicant and contribute to fully fund a fourth
firefighter. This is to be monitored annually until either the Millenia or Village 8
West fire station is operational.”
PLEASE URGE THE PLANNING COMMISSION TO CONTINUE THIS PROJECT SO
THAT A GENERAL PLAN AMENDMENT CAN BE ADDED, THE EIR CAN BE RE-
CIRCULATED, UNIT COUNTS AND ACCESS TO OFF~SITE PARCELS CAN BE
ADDRESSED, AND THE PROCESS CAN BE DONE RIGHT.
2018-05-15 Agenda Packet Page 511
2018-05-15 Agenda Packet Page 512
1
May 15, 2018
Staff Response to March 28, 2018 letter from Peter Watry to the Planning Commission
regarding Otay Ranch Village 4.
The existing overall Village 4 General Development Plan (GDP) density is 3.8 du/ac for
453 units, consistent with the GDP LM classification of 3-6 du/ac. The project proposes
to implement 350 of the 453 units with corresponding land use classifications and
densities. There are 176 units within the LM designation with a density of 3.6 du/ac;
there are 150 units in the proposed MH designation with a density of 12.3 du/ac, which
is consistent with the allowable 11-18 du/ac; and there are 127 units in the proposed H
designation with a density of 17.6 du/ac which is consistent with the allowable 18-27
du/ac. This results in an average density of 6.6 du/ac. The overall increase from 3.8
du/ac to 6.6 du/ac reflects the density increase that is consistent with the proposed unit
allocations within the respective and corresponding land use classification density
ranges as allowed within the GDP.
The project is also in conformance with the General Plan (GP). The GP Land Use
Diagram for this portion of Village 4 designates the planned land use as Low-Medium
Residential (RLM). Per GP Section 4.9.2 Low-Medium Residential ranges from 3 to 6
dwellings per gross acre. The gross residential acres for this portion of Village 4 is 58.0
acres. The project proposes 350 units. The proposed project’s residential density is
therefore 6.0 dwellings per gross acre (350 units divided by 58 acres) and thus
consistent with the GP.
The proposed project is also consistent with the clustering provisions of the GP. While
the GP provides that “Using a cluster development concept, other housing types could
be consistent with this designation such as sing le-family attached units (townhome, row
homes, and patio homes) or smaller lot and zero-lot line detached single family homes”
could be interpreted to not allow apartments, GP Policy LUT 29.3 further clarifies the
clustering policy. This additional policy states that “Clustering shall not result in the
creation of dwelling product types that are substantially out of character with the
intended dwelling type of the subject general plan residential classification.” The policy
goes on to say that “the introduction of some unit types typically applicable to the next
highest residential density classification may be allowed provided that the predominant
character of the project maintains consistency with the applicable residential
classification.” The project proposes to implement the Low-Medium Residential
designation by zoning 27.4 acres using R-1 and R2 zoning. GP Land Use Designation
and Zoning Table 5-4 identifies these two zoning designations to implement the Low-
Medium Residential land use. This represents 79% of the area designated for
residential development in the project. Because the project uses clustering and to be
consistent with the above GP policy, the project is proposing to introduce some unit
types typically applicable to the next highest residential density classification – Medium
Residential. GP Table 5-4 identifies R-3 zoning to implement the Medium Residential
classification. Only 21% of the residential area (7.2 Acres) of the proposed project uses
this next highest residential classification. In addition, this area is located in proximity to
2018-05-15 Agenda Packet Page 513
2
the Village 8 West Town Center (45 du/acre), north of Main Street - a six-lane major
Arterial General Plan Circulation Element Road. This R-3 classification relates more
with the V-8 Town Center physically and geographically due to its immediate adjacency.
The project is therefore consistent with the clustering provision of the GP because the
predominant character of the development is established by the GP conforming R-1 and
R-2 zoning and uses a product type consistent with the next highest residential density
classification on a small portion of the site, adjacent to and consistent in character with
the higher density land uses in Village 8. The proposed project is situated within only a
portion of the overall Village 4 and is surrounded by other Villages on all sides.
The proposed project is also consistent with the Guiding Principles on Page 1-5 of the
GDP, which states: “Cluster development in villages with varying character and density,
interrelated on the Otay Valley Parcel, yet distinct in identity and style.” The proposed
project would allow for varying density and housing development that would be distinct
in identity and style.
2018-05-15 Agenda Packet Page 514
1
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA MAKING CERTAIN FINDINGS OF FACT;
ADOPTING A STATEMENT OF OVERRIDING
CONSIDERATIONS; ADOPTING A MITIGATION
MONITORING AND REPORTING PROGRAM AND
CERTIFYING THE FINAL ENVIRONMENTAL IMPACT
REPORT (EIR-17-0001; SCH NO. 2016041080) FOR THE
OTAY RANCH PORTION OF VILLAGE FOUR SECTIONAL
PLANNING AREA PLAN, GENERAL DEVELOPMENT PLAN
AMENDMENT AND TENTATIVE MAP PURSUANT TO THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT
WHEREAS, Otay Valley Quarry, LLC (Applicant), submitted applications requesting
approvals for a Sectional Planning Area (SPA) Plan, General Development Plan Amendment
(GDPA) and Tentative Map (TM), for the Portion of Village Four project (Project); and
WHEREAS, a Draft Environmental Impact Report (Draft EIR-17-0001 or Draft EIR) for
the Project was issued for public review on October 23, 2017, and was processed through the
State Clearinghouse; and
WHEREAS, in consideration of the comments received on the Draft EIR and
requirements of the California Environmental Quality Act (CEQA), a Final EIR (Final EIR-17-
0001 or Final EIR) was prepared for the Project; and
WHEREAS, Final EIR-17-0001 incorporates all comments and recommendations
received on the Draft EIR, a list of all persons, organizations, and public agencies commenting
on the Draft EIR, and the City’s responses to all “significant environmental points” raised by
public and agency comments submitted during the review and consultation process, in
accordance with CEQA Guidelines Section 15132; and
WHEREAS, revisions to Final EIR-17-0001 did not result in modifications to
conclusions regarding significance of impacts or the addition of significant new information that
would require recirculation of the EIR pursuant to CEQA Guidelines section 15088.5; and
WHEREAS, the Chula Vista Planning Commission held a duly noticed public hearing for
Final EIR-17-001 and voted ______ to approve a resolution recommending the City Council
make certain Findings of Fact; adopt a Statement of Overriding Considerations; adopt a
Mitigation Monitoring and Reporting Program and certify Final EIR-17-001 for the Project
pursuant to CEQA.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it hereby finds, determines and orders as follows:
2018-05-15 Agenda Packet Page 515
2
I. PLANNING COMMISSION AND CITY COUNCIL RECORD
The proceedings and all evidence introduced before the Planning Commission at their
public hearing on the Project and Final EIR-17-0001 and before the City Council at their
public hearing on the Project and Final EIR-17-0001 as well as the Minutes and
Resolutions resulting therefrom are hereby incorporated into the record of proceedings
pursuant to Public Resources Code Section 21167.6. These documents, along with any
documents submitted to the Planning Commission and City Council, including
documents specified in Public Resources Code Section 21167.6, subdivision (e), shall
comprise the entire record of proceedings for any claims under the CEQA (Public
Resources Code §21000 et seq.) The record of proceedings shall be maintained by the
City Clerk at City Hall.
II. Final EIR-17-0001 CONTENTS
That Final EIR-17-0001 consists of the following:
1. EIR for the Otay Ranch, Portion of Village Four SPA Plan, GDPA and TM
2. Comments received during public review and responses
3. Mitigation Monitoring and Reporting Program
4. Technical Appendices
(All hereafter collectively referred to as “Final EIR-17-0001”)
III. ACCOMPANYING DOCUMENT TO Final EIR-17-0001
1. Findings of Fact and Statement of Overriding Considerations
IV. PRESENTATION TO THE DECISION MAKING BODY
That Final EIR-17-0001 was presented to the City Council as the decision-making body
of the Lead Agency and that the City Council has reviewed and considered the
information contained in Final EIR-17-0001 prior to approving the Project.
V. COMPLIANCE WITH THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
That the Final EIR-17-0001, the Findings of Fact and the Statement of Overriding
Considerations (Exhibit “1” to this Resolution, a copy which is on file with the office of
the City Clerk), and the Mitigation Monitoring and Reporting Program are prepared in
accordance with the requirements of CEQA (Pub. Resources Code, §21000 et seq.), the
CEQA Guidelines (California Code Regs. Title 14 §15000 et seq.), and the
Environmental Review Procedures of the City of Chula Vista.
2018-05-15 Agenda Packet Page 516
3
VI. INDEPENDENT JUDGMENT OF CITY COUNCIL
That it utilized its independent judgment and analysis in reviewing the Final EIR-17-0001
for the City as Lead Agency for the Project.
VII. CEQA FINDINGS OF FACT, MITIGATION MONITORING AND REPORTING
PROGRAM AND STATEMENT OF OVERRIDING CONSIDERATIONS
A. Adoption of Findings of Fact
That the City Council does hereby approve, accept as its own, incorporate as if set
forth in full herein, and make each and every one of the findings contained in
Exhibit “1” to this Resolution, a copy of which is on file in the office of the City
Clerk.
B. Mitigation Measures Feasible and Adopted
That on the basis of the findings set forth in Exhibit “1” to this Resolution and as
more fully identified and set forth in Final EIR-17-0001, the City Council hereby
finds pursuant to CEQA Section 21081 and CEQA Guidelines Section 15091 that
changes or alterations have been required in, or incorporated into the Project
which avoid or substantially lessen the significant environmental effects identified
in Final EIR-17-0001, and that such changes and alterations have eliminated or
substantially lessened all significant effects on the environment where feasible as
shown in the findings set forth in Exhibit “1” to this Resolution. Furthermore,
that the measures to mitigate or avoid significant effects on the environment,
consisting of those mitigation measures set forth in Final EIR-17-0001 and in
Exhibit “1” to this Resolution, are fully enforceable through permit conditions,
agreements or other measures, including but not limited to conditions of approval
of the Project, and will become binding upon the entity (such as the project
proponent or the City) assigned thereby to implement the same.
C. Infeasibility of Mitigation Measures
As more fully identified and set forth in Final EIR-17-0001 and in the Findings of
Fact for the Project, which is Exhibit “1” to this Resolution, certain mitigation
measures described in said documents are infeasible.
D. Statement of Overriding Considerations
That even after the adoption of all feasible mitigation measures and any feasible
alternatives, certain significant or potentially significant environmental effects
caused by the Project, or cumulatively, will remain. However, pursuant to CEQA
Guidelines Section 15092, the City Council hereby finds and determines that any
remaining significant effects on the environment which have been found to be
unavoidable as shown in the findings set forth in Exhibit “1” to this Resolution
2018-05-15 Agenda Packet Page 517
4
are acceptable due to certain overriding considerations. Therefore, the City
Council of the City of Chula Vista hereby approves, pursuant to CEQA
Guidelines Section 15093, a Statement of Overriding Considerations in the form
set forth in Exhibit “1” to this Resolution identifying the specific economic, legal,
social, technological or other considerations that outweigh and render the
unavoidable significant adverse environmental effects acceptable.
E. Infeasibility of Alternatives
As more fully identified and set forth in Final EIR-17-0001 and in Exhibit “1” to
this Resolution, the City Council hereby finds pursuant to Public Resources Code
Section 21081 and CEQA Guidelines Section 15091 that alternatives to the
project, which were identified in Final EIR-17-0001, were not found to reduce
impacts to a less than significant level or meet the Project objectives.
F. Adoption of Mitigation Monitoring and Reporting Program
As required by Public Resources Code Section 21081 and CEQA Guidelines
Section 15091, the City Council hereby adopts the program for reporting on or
monitoring the changes which it has either required in the Project or made a
condition of approval to avoid or substantially lessen significant environmental
effects, consisting of the Mitigation Monitoring and Reporting Program set forth
in Final EIR-17-0001. The City Council further finds that the Mitigation
Monitoring and Reporting Program is designed to ensure that, during Project
implementation, the permittee/Project Applicant and any other responsible parties
implement the Project components and comply with the mitigation measures
identified in the Findings of Fact and the Mitigation Monitoring and Reporting
Program.
G. Findings are Binding and not Merely Advisory
That to the extent that the Findings of Fact and Statement of Overriding
Considerations for the Project (Exhibit “1” of this Resolution) conclude that
proposed mitigation measures outlined in Final EIR-17-0001 are feasible and
have not been modified, superseded or withdrawn, the City Council herby binds
itself and the Applicant and its successors in interest, to implement those
measures. These findings are not merely information or advisory, but constitute a
binding set of obligations that will come into effect when the City Council adopts
the Resolution approving the Project. The adopted mitigation measures contained
within the Mitigation Monitoring and Reporting Program Section of Final EIR-
17-0001 are also expressed as conditions of approval for the Project. Other
requirements are referenced in the Mitigation Monitoring and Reporting Program
that are adopted concurrently with these Findings of Fact and will be effectuated
through the process of implementing the Project.
2018-05-15 Agenda Packet Page 518
5
VIII. NOTICE OF DETERMINATION
That the Development Services Director of the City of Chula Vista is directed to file a
Notice of Determination with the County Clerk of the County of San Diego, should the
City Council approve this Project in accordance with CEQA Guidelines section 15094.
BE IT FURTHER RESOLVED THAT the City Council of the City of Chula Vista on the
basis of the findings as set forth above certifies Final EIR-17-0001, and adopts the Findings of Fact
and Statement of Overriding Considerations (Exhibit “1” to this Resolution), and Mitigation
Monitoring and Reporting Program in accordance with CEQA Guidelines Section 15091.
Submitted by:Approved as to form by:
___________________________________________________
Kelly Broughton, FASLA Glen R. Googins
Development Services Director City Attorney
Exhibit 1 - Findings of Fact and Statement of Overriding Considerations
2018-05-15 Agenda Packet Page 519
RESOLUTION NO. 2018-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AMENDMENTS TO THE OTAY
RANCH GENERAL DEVELOPMENT PLAN TO REFLECT
LAND USE AND POLICY CHANGES FOR APPROXIMATELY
166 ACRES WITHIN THE OTAY RANCH PLANNED
COMMUNITY, INCLUDING ASSOCIATED TEXT, MAPS AND
TABLES
I RECITALS
A. Project Site
WHEREAS, the areas of land which are the subject of this Resolution contain all lands
within the boundaries of Exhibit 1 attached hereto and incorporated herein by this reference, and
include approximately 166 acres of land generally located on the east side of Wolf Canyon,
straddling the future extension of Main Street from La Media Road to the north and to Heritage
Road to the southwest (Project Site); and
B. Project; Application for Discretionary Approvals
WHEREAS, in June, 2017, the City staff deemed the Otay Valley Quarry, LLC (Applicant)
application complete and initiated a Otay Ranch General Development Plan Amendment (GDPA)
(the “Project”); and
WHEREAS, the proposed GDPA involves amending portions of Part II of the Otay Ranch
General Development Plan (GDP), including associated text, maps and tables; and
WHEREAS, the proposed GDPA is contained in a document entitled “Proposed Otay
Ranch General Development Plan Amendments - Portion of Otay Ranch Village 4 as represented
in Exhibit 2 attached hereto and incorporated herein by this reference; and
C. Prior Discretionary Approvals
WHEREAS, the Otay Ranch GDP was approved on October 23, 1993, and most recently
updated on May 12, 2015; and
WHEREAS, the GDPA as presented is necessary to accommodate the land uses anticipated
in the proposed Project; and
WHEREAS, the GDPA was designed to address and accommodate development of a
transit-supportive residential development with ancillary commercial in the adjacent village to the
east; and
2018-05-15 Agenda Packet Page 520
Resolution 2018 - _______
Page 2 of 5
WHEREAS, approval of the Project would require the approval of a new Sectional
Planning Area (SPA) Plan, and a Tentative Map (TM) for the Portion of Village Four; and
D. Planning Commission Record of Application
WHEREAS, pursuant to California Government Code section 65090, the Planning
Commission held a duly noticed public hearing on the GDPA; and
WHEREAS, the proceedings and all evidence introduced before the Planning Commission
at the public hearing on this Project and the minutes and resolution resulting therefrom, are hereby
incorporated into the record subsequent to these proceedings; and
WHEREAS, the Planning Commission voted x-x-x to forward a recommendation to the City
Council on the Project; and
E. City Council Record of Application
WHEREAS, the City Clerk set the time and place for the hearing on the GDPA and notice
of said hearing, together with its purpose, was given by its publication in a newspaper of general
circulation in the City, at least ten days prior to the hearing; and
WHEREAS, pursuant to California Government Code section 65090, the City Council held
a duly noticed public hearing on the subject GDPA.
NOW, THEREFORE, BE IT RESOLVED by the City Council that it hereby finds and
determines as follows:
II. COMPLIANCE WITH THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
That the Development Services Director has reviewed the proposed project for compliance
with the California Environmental Quality Act (CEQA) and has determined, in light of the whole
record before the City, that the proposed Project may have a significant effect on the environment;
therefore, the Development Services Director has caused the preparation of an Environmental
Impact Report, EIR 17-0001.
That the City Council reviewed, analyzed, considered, approved and certified Final EIR 17-
0001, made certain Findings of Fact, adopted a Statement of Overriding Considerations and a
Mitigation Monitoring and Reporting Program for the GDPA, new SPA Plan, and Tentative Map
(TM) pursuant to CEQA.
IV. GENERAL DEVELOPMENT PLAN INTERNAL CONSISTENCY
That the GDP, as amended, is internally consistent and shall remain internally consistent
following amendment thereof by this Resolution.
2018-05-15 Agenda Packet Page 521
Resolution 2018 - _______
Page 3 of 5
V. ADOPTION OF GENERAL DEVELOPMENT PLAN AMENDMENT
That in light of the findings above, the GDPA provisions are hereby approved and adopted
in the form as presented in Attachment 3 (Otay Ranch General Development Plan Amendment) and
incorporated herein by this reference and on file in the City Clerk's office.
Presented by:Approved as to form by:
_________________________________________
Kelly Broughton, FASLA Glen R. Googins
Development Services Director City Attorney
2018-05-15 Agenda Packet Page 522
Resolution 2018 - _______
Page 4 of 5
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this ____ day of ____________, 2018, by the following vote:
AYES: Councilmembers:
NAYS: Councilmembers:
ABSENT: Councilmembers:
ABSTAIN: Councilmembers:
_______________________
Mary Casillas Salas, Mayor
ATTEST:
___________________________
Kelly K. Bigelow, MMC, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Kelly K. Bigelow, City Clerk of Chula Vista, California, do hereby certify that the
foregoing Resolution No. ________ was duly passed, approved, and adopted by the City Council at
a regular meeting of the Chula Vista City Council held on the ____ day of ____________, 2018.
Executed this ____ day of ____________, 2018.
__________________________
Kelly K. Bigelow, City Clerk
2018-05-15 Agenda Packet Page 523
Resolution 2018 - _______
Page 5 of 5
EXHIBIT 1 – SITE LOCATION MAP
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RESOLUTION 2018-__________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ADOPTING A NEW PORTION OF VILLAGE
FOUR SECTIONAL PLANNING AREA (SPA) PLAN, AND
ASSOCIATED REGULATORY DOCUMENTS
I. RECITALS
A. Project Site
WHEREAS, the area of land that is the subject of this Resolution is
diagrammatically represented in Exhibit A, attached hereto and incorporated herein by this
reference, and commonly known as the Portion of Village Four Sectional Planning Area
(SPA) Plan, and for the purpose of general description consists of approximately 166 acres
located on the east side of Wolf Canyon, straddling the future extension of Main Street from
La Media Road to the north and to Heritage Road to the southwest (Project Site); and
B. Project; Application for Discretionary Approvals
WHEREAS, duly verified applications were filed with the City of Chula Vista
Development Services Department on March 12, 2015 by Otay Valley Quarry, LLC (the
“Applicant, Owner, and Developer”) requesting adoption of a new Portion of Village
Four SPA Plan and Portion of Village Four Planned Community District Regulations and
associated regulatory documents (Project); and
C. Planning Commission Record of Application
WHEREAS, the Development Services Director set the time and place for a
Planning Commission hearing on the Project, and notice of the hearing, together with its
purpose, was given by its publication in a newspaper of general circulation in the City, and
its mailing to property owners within 500 feet of the exterior boundary of the Project Site at
least ten (10) days prior to the hearing; and
WHEREAS, the Planning Commission held an advertised public hearing on the
Project and voted xxxx to forward a recommendation to the City Council on the Project; and
WHEREAS, the proceedings and all evidence introduced before the Planning
Commission at the public hearing on the Project and the minutes and resolution resulting
therefrom, are incorporated into the record of these proceedings; and
D. City Council Record of Application
WHEREAS, the City Clerk set the time and place for the hearing on the Project
application and notices of said hearing, together with its purposes given by its publication in
a newspaper of general circulation in the City, and its mailing to property owners within 500
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feet of the exterior boundary of the Project Site at least ten (10) days prior to the hearing;
and
WHEREAS, the duly called and noticed public hearing on the Project was held
before the City Council in the Council Chambers located at Chula Vista Civic Center, 276
Fourth Avenue, at 91910 to receive the recommendations of the Planning Commission, and
to hear public testimony with regard to the same.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista that it hereby finds and determines as follows:
II. CERTIFICATION OF COMPLIANCE WITH THE CALIFORNIA ENVIRONMENTAL
QUALITY ACT
That the Development Services Director has reviewed the proposed Project for
compliance with the California Environmental Quality Act (CEQA) and has determined
that, in light of the whole record, the Project may have a significant effect on the
environment; therefore, the Development Services Director has caused the preparation of
an Environmental Impact Report, EIR 17-0001.
That the City Council of the City of Chula Vista reviewed, analyzed, considered,
approved and certified the Final EIR 17-0001, made certain Findings of Fact, adopted a
Statement of Overriding Considerations and a Mitigation Monitoring and Reporting
Program for the Project pursuant to CEQA.
III. SPA FINDINGS/ APPROVAL
A. THE SECTIONAL PLANNING AREA PLAN IS IN CONFORMITY WITH THE
OTAY RANCH GENERAL DEVELOPMENT PLAN, AS AMENDED, AND
THE CHULA VISTA GENERAL PLAN.
That the SPA Plan for the Portion of Village Four proposes three residential zoning
designations whose density ranges are consistent with the allowable density of the Otay
Ranch GPD (ORGDP), as amended, and the existing General Plan. The current ORGDP
consists of one residential designation for Village Four which is Low Medium Density
Residential (LM); the proposed amendment would add two additional residential
categories: Medium-High (MH) and High-Density (H). All three densities are consistent
with the Chula Vista General Plan designation of Residential Low Medium (RLM),
allowing for a maximum of 453 units within the overall Village Four, of which this SPA
would contain a total of 350 units.
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That the proposed density increase would not result in any significant land use, planning,
or zoning impacts. Such an increase furthers the GDP policy objective for “Urban
Villages” to have “higher densities and mixed uses in the village cores” and to “provide a
wide range of residential housing opportunities…which promotes a blend of multi-family
and single-family housing styles and densities, integrated and compatible with other land
uses in the area.” The proposed density increase would also support Smart Growth
Principles, as it provides compact development oriented to pedestrians, bicyclists and
transit, and would further minimize urban sprawl development patterns. The proposed
changes would also provide more land use diversity, increase pedestrian orientation and
make commercial uses in the immediately adjacent Village 8 West more viable.
That all off-site public streets required to serve the subdivision already exist or will be
constructed or funded by the Applicant in accordance with the Public Facilities Finance
Plan (PFFP) and Conditions of Approval. The on-site public streets are designed in
accordance with the City design standards and/or requirements and provides for vehicular
and pedestrian connections.
B. THE SPA PLAN WILL PROMOTE THE ORDERLY SEQUENTIAL
DEVELOPMENT OF THE INVOLVED SECTIONAL PLANNING AREAS.
That the requested adoption of the Portion of Village Four SPA Plan relies on a combination
of the proposed Portion of Village Four PFFP to outline infrastructure required to serve the
entire Project, along with the timing of installation and the financing mechanisms to
promote the sequential development of the Project. Development of the 350 units will occur
in an orderly, sequential manner as part of the overall development of the Portion of Village
Four.
C. THE OTAY RANCH PORTION OF VILLAGE FOUR SPA WILL NOT
ADVERSELY AFFECT ADJACENT LAND USE, RESIDENTIAL
ENJOYMENT, CIRCULATION OR ENVIRONMENTAL QUALITY.
That the proposed land use and development standard provisions within the Project Site
have been fully analyzed and will not adversely affect the circulation system and overall
land use as previously envisioned in the ORGDP and in the Portion of Village Four SPA
Plan. The existing infrastructure (sewer, water, public services and facilities) has been
determined to be adequate to serve the proposed Project, as described in the PFFP.
Additionally, a Water Quality Technical Report, Traffic Impact Study, Noise Impact
Study, Air Quality and Global Climate Change Report, Water Service Technical
Memorandum and Sewer Service Technical Memorandum have been prepared, reviewed
and approved. An Environmental Impact Report has been prepared and certified and the
City Council has determined that any impacts associated with the proposed Project have
been addressed and that the SPA will not adversely affect the adjacent land uses,
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residential enjoyment, circulation or environmental quality of the surrounding uses.
IV. APPROVAL OF SPA PLAN
BE IT FURTHER RESOLVED, that based on the findings above, the City Council
hereby adopts the new Portion of Village Four SPA Plan shown in Attachment 4 (SPA
Document)on file in the office of the City Clerk, subject to the conditions set forth below:
1. The Project shall comply with all mitigation measures specified in the Final EIR (FEIR
17-0001), to the satisfaction of the Development Services Director, or designee.
2. All the terms, covenants and conditions contained herein shall continue to be binding
upon and inure to the benefit of the heirs, successors, assigns and representatives of the
Developer as to any or all of the Project Site.
3. Prior to approval of Building Permits for each phase of the Project, the Applicant shall
demonstrate that the air quality control measures outlined in the Otay Ranch, Portion of
Village 4 SPA Plan Air Quality Technical Report pertaining to the design, construction
and operational phases of the Project have been incorporated into the Project design.
4. Prior to issuance of the 151
st Building Permit, the Applicant shall construct the CPF-2
site consistent with Figure 4.2 of the Planned Community District Regulations.
5. Prior to issuance of each Building Permit, in order to address projected Project revenue
shortfalls (per Chula Vista Municipal Code Section 19.09.060(J)) as identified in the
Financial Impact Analysis portion of the PFFP, the Applicant shall pay a fee in the
amount of $85.00 per dwelling unit.
6. Prior to approval of the first Final Map for the Project, the Applicant shall enter into a
Balanced Communities Affordable Housing Agreement, in compliance with applicable
City and State of California regulations. Such agreement shall identify methods of
compliance as set forth in Appendix H, “Affordable Housing Program,” including either
providing affordable housing at an “On-Site” location, “Off-Site” location or payment of
an in-lieu housing fee to be paid upon issuance of Building Permits.
7. The Property Owner and Applicant shall and do agree to indemnify, protect, defend and
hold harmless City, its City Council members, Planning Commission members, officers,
employees and representatives, from and against any and all liabilities, losses, damages,
demands, claims and costs, including court costs and attorney’s fees (collectively, liabilities)
incurred by the City arising, directly or indirectly, from (a) City’s approval of the Project;
(b) City’s approval or issuance of any other permit or action, whether discretionary or
nondiscretionary, in connection with the use contemplated on the Project Site; and (c)
approval of any CEQA action, including, certification of Final EIR 17-0001. The Property
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Owner and Applicant shall acknowledge their agreement to this provision by executing a
copy of this Resolution where indicated. The Property Owner’s and Applicant’s compliance
with this provision shall be binding on any and all of the Property Owner’s and Applicant’s
successors and assigns.
V. GOVERMENT CODE SECTION 66020 NOTICE
Pursuant to Government Code Section 66020(d)(1), NOTICE IS HEREBY GIVEN that
the 90-day period to protest the imposition of any impact fee, dedication, reservation, or
other exaction described in this resolution begins on the effective date of this resolution
and any such protest must be in a manner that complies with Section 66020(a) and failure
to follow timely this procedure will bar any subsequent legal action to attack, set aside,
void or annual imposition. The right to protest the fees, dedications, reservations, or other
exactions does not apply to planning, zoning, grading, or other similar application
processing fees or service fees in connection with the project; and it does not apply to any
fees, dedication, reservations, or other exactions which have been given notice similar to
this, nor does it revive challenges to any fees for which the Statute of Limitations has
previously expired.
VI. EXECUTION AND RECORDATION OF RESOLUTION OF APPROVAL
The Property Owner and Applicant shall execute this document signing on the lines
provided below, indicating that the Property Owner and Applicant have each read,
understood and agreed to the conditions contained herein, and will implement same. Upon
execution, this document shall be recorded with the County Recorder of the County of San
Diego, at the sole expense of the Property Owner and/or Applicant, and a signed, stamped
copy returned to the City’s Development Services Department. Failure to return the signed
and stamped copy of this recorded document within 10 days of recordation shall indicate
the Property Owner/Applicant’s desire that the Project, and the corresponding application
for building permits and/or a business license, be held in abeyance.
____________________________________________________
Signature of Property Owner Date
_____________________________
Printed Name of Property Owner
____________________________ ____________________
Signature of Applicant Date
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____________________________
Printed Name of Applicant
VII. CONSEQUENCE OF FAILURE OF CONDITIONS
If any of the forgoing conditions fail to occur, or if they are, by their terms, to be
implemented and maintained over time, and any of such conditions fail to be so
implemented and maintained according to the their terms, the City shall have the right to
revoke or modify all approvals herein granted, deny or further condition issuance of future
building permits, deny, revoke or further condition all certificates of occupancy issued under
the authority of approvals herein granted, instituted and prosecute litigate or compel their
compliance or seek damages for their violations. No vested rights are gained by Applicant or
successor in interest by the City approval of this Resolution.
VIII. INVALIDITY; AUTOMATIC REVOCATION
It is the intention of the City Council that its adoption of this Resolution is dependent upon
enforceability of each and every term, provision and condition herein stated; and that in the
event that any one or more terms, provisions or conditions are determined by a Court of
competent jurisdiction to be invalid, illegal or unenforceable, if the City so determines in its
sole discretion, this resolution shall be deemed to be revoked and no further in force or in
effect ab initio.
Presented by:Approved as to form by:
_____________________________________________
Kelly Broughton, FSALA Glen R. Googins
Development Services Director City Attorney
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EXHIBIT A – SITE LOCATION MAP
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RESOLUTION NO. 2018-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING TENTATIVE MAP CVT-15-03
(PCS15-03) FOR THE PORTION OF VILLAGE FOUR
PROJECT, SUBJECT TO THE CONDITIONS CONTAINED
HEREIN
I. RECITALS
WHEREAS, the parcel of land which is the subject matter of this Resolution is depicted
in Exhibit 1, attached hereto and incorporated herein by this reference and for the purpose of
general description consist of approximately 166 acres located on the east side of Wolf Canyon,
straddling the future extension of Main Street from La Media Road to the north and to Heritage
Road to the southwest (Project Site); and
WHEREAS, on March 13, 2015, duly verified concurrent applications were filed with the
City of Chula Vista by Otay Valley Quarry, LLC (Applicant) requesting amendments to the Otay
Ranch General Development Plan (GDP), a new Portion of Village Four Sectional Planning Area
(SPA) Plan, and an Environmental Impact Report (FEIR 17-001) for the Village Four project;
and
WHEREAS, on March 15, 2015, a duly verified application was submitted requesting
approval of a Tentative Subdivision Map (PCS-15-03) for Chula Vista Tract No. 15-03, to
implement the proposed land use changes and subdivide 166 acres into parcels supporting up to
73 single-family residential units, 277 multi-family residential units, approximately 2.08 acres of
Community Public Facility (CPF) uses, and 20.19 acres of open space uses (the “Project”) for
the Portion of Village Four project; and
WHEREAS, the Development Services Director set the time and place for a Planning
Commission hearing on the Project, and notice of said hearing, together with its purpose, was
given by its publication in a newspaper of general circulation in the City, and its mailing to
property owners and residents within 500 feet of the exterior boundaries of the property, at least
ten (10) days prior to the hearing; and
WHEREAS, the Planning Commission held an advertised public hearing on the Project,
took public testimony, heard staff’s presentation, and thereafter closed the hearing; and
WHEREAS, the proceedings and all evidence introduced before the Planning
Commission at the public hearing on the Project and the minutes and resolution resulting
therefrom, are incorporated into the record of these proceedings; and
WHEREAS, the City Clerk set the time and place for the hearing on the Project
application and notice of said hearing, together with its purpose, was given by its publication in a
newspaper of general circulation in the City and its mailing to property owners within 500 feet of
the exterior boundary of the Project, at least 10 days prior to the hearing; and
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WHEREAS, the duly called and noticed public hearing on the Project was held before the
City Council to receive the recommendations of the Planning Commission and to hear public
testimony with regard to the same.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it hereby finds and determines as follows:
II. CERTIFICATION OF COMPLIANCE WITH THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT
That the Development Services Director has reviewed the proposed Project for
compliance with the California Environmental Quality Act (CEQA) and has determined that, in
light of the whole record, the Project may have a significant effect on the environment; therefore,
the Development Services Director has caused the preparation of an Environmental Impact
Report, EIR 17-0001.
That the City Council of the City of Chula Vista reviewed, analyzed, considered,
approved and certified the Final EIR 17-0001, made certain Findings of Fact, adopted a
Statement of Overriding Considerations and a Mitigation Monitoring and Reporting Program for
the Project pursuant to CEQA.
III. TENTATIVE SUBDIVISION MAP FINDINGS
A. Pursuant to Government Code Section 66473.5 of the Subdivision Map Act, the City
Council finds that the Tentative Subdivision Map, as conditioned herein for the Project, is
in conformance with the elements of the Chula Vista General Plan (CVGP) and
associated regulatory documents, based on the following:
1. Land Use and Transportation
General Plan General Dev Plan SPA Plan
Residential
Low Medium
Residential Low Medium,
Medium and High Density
Residential
Single Family (SF) –permits
densities 3-6 units/acre; Residential
Multi-Family Medium High (MF) –
permits densities of 11-18
units/acre including small lot SF,
alley homes, duplexes, townhouses,
rowhouses, courtyard/clusters, and
stacked flats; Multi-Family
Medium High (MF) – permits
densities of 18-27 units/acre
including apartments and
condominium-type in multiple-
story buildings.
Open Space Open Space Open Space (OS) permits
developed or usable open space and
park uses, may include naturalized
open space; Open Space Preserve
(OSP) permits natural, undisturbed
and/or restored open space which is
part of the Otay Ranch Preserve
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The proposed project is consistent with the CVGP and Otay Ranch General
Development Plan (GDP) land use designations. It contains all the requisite land uses
in accordance with the Otay Ranch Village Four General Plan Land Use Diagram.
The zones in the Project’s Planned Community District Regulations are consistent
with the GDP land use designations, as shown in the Otay Ranch GDP/SRP Land Use
Plan.
The Project is consistent with and implements the CVGP and GDP by establishing
developable parcels, public improvements and public facilities that will create a
village that contains complementary land uses, including community purpose
facilities, preserve open space, and residential neighborhoods that offer a variety of
housing types and densities.
The Project has been designed to include a transportation system that complies with
the requirements of the CVGP, GDP and the Portion of Village Four SPA Plan. The
transportation system includes a hierarchy of streets, each providing accommodations
for pedestrian walkways and bicycle ways. The construction of the transportation
system will be phased in accordance with the Portion of Village Four SPA’s Public
Facilities Financing Plan (PFFP), such that the development of the circulation system
will precede planned growth and maintain acceptable levels of service, as required by
the City’s Growth Management Program.
2. Economic Development
The Project will contribute to the economic base of the City by accommodating a
village that will provide for a range of Single and Multi-family residential product
types that will enhance the image and appearance of the Otay Ranch community and
will benefit the local economy. Approval of the Project will help achieve the CVGP
objectives that seek to promote a variety of job and housing opportunities to improve
the City’s jobs/housing balance, provide a diverse economic base, and encourage the
growth of small businesses.
3. Housing
The Project will provide a variety of housing types, including single-and multi-family
residential home ownership opportunities, as well as affordable housing
opportunities, as required by the Affordable Housing Plan prepared for the Project.
The Project has been conditioned to require that the Applicant enter into an
agreement to provide affordable housing prior to the approval of the first Final Map.
Thus, the Project is consistent with the Housing Element of the CVGP by providing
additional opportunities for high-quality, market-rate single-family and multi-family
residential home ownership in the southeastern portion of the City.
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4. Public Facilities and Services
The project has been conditioned to ensure that all necessary public facilities and
services will be available to serve the Project concurrent with the demand for those
services. A PFFP has been prepared to analyze the demand generated by the Project,
and the phasing needs created by the Project.
Schools – The project is served by the Chula Vista Elementary School District and
Sweetwater Union High School Districts. According to the latest Growth
Management Oversight Committee (GMOC) report, both school districts are able to
accommodate students from the Project. As presented in Table A-1 of the PFFP,
school fees are to be paid and verification of payment is to be provided prior to the
issuance of Building Permits.
Sewer - The Project Site is within the boundaries of the City of Chula Vista
wastewater services area. Sewer capacity will be available to serve the Project subject
to the PFFP requirements, which are included as Conditions of Approval for the
Project. Based on these requirements, no adverse impacts to the City’s sewer system
or City’s sewer threshold standards will occur as a result of the Project.
Parks - The Project generates a demand for 2.94 acres of parkland. In accordance
with the provisions of the Park Land Development Ordinance (PLDO), the Developer
will pay in-lieu fees for the required parkland prior to the issuance of Building
Permits.
Services - The Project has been conditioned to ensure that all necessary public
facilities and services will be available to serve the Project concurrent with the
demand for those services. The City Engineer, Fire and Police Departments have
reviewed the Portion of Village Four SPA Plan for conformance with City safety
policies and have determined that the proposal generates the same demand and
therefore continues to meet those standards. Project construction will be required to
comply with the applicable California Green Building Standards, the City’s Green
Building Standards and the City’s Energy Efficiency Ordinance in affect at the time
of Building Permit issuance, ensuring energy-efficient homes will be developed.
5. Growth Management
The Project is in compliance with applicable Growth Management Element
requirements according to the PFFP that has been prepared as required by the Growth
Management Ordinance. The PFFP requirements have been included in the Project’s
Conditions of Approval.
B. Pursuant to Government Code Section 66473.1 of the Subdivision Map Act, the City
Council finds that the configuration, orientation, and topography of the site allows for the
optimum siting of lots for natural and passive heating and cooling opportunities and that
the development of the site will be subject to site plan and architectural review to ensure
the maximum utilization of natural and passive heating and cooling opportunities.
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C. Pursuant to Government Code Section 66412.3 of the Subdivision Map Act, the City
Council has considered the effect of this approval on the housing needs of the region and
has balanced those needs against the public service needs of the residents of the City and
the available fiscal and environmental resources.
D. Pursuant to Government Code Section 66474 (a)-(g) of the Subdivision Map Act, the
City Council finds that the proposed Project:
1. Is consistent with applicable general and specific plans as specified in
Section 65451. Applicant proposes to amend very limited portions of the
ORGDP to facilitate implementation of the development plan for a Portion of
Otay Ranch Village Four. The proposed amendments are to ORGDP land use
designations for the site, including: the addition of Residential Medium
High; and Residential High. The amendments are consistent with applicable
general and specific plans as specified in Section 65451 because the General
Plan designation Residential Low Medium (RLM, 3-6 dwelling units per
acre) allows for a maximum of 453 units and the Project proposes 350 units.
The Project is within a Sectional Planning Area which is equivalent to a
Specific Plan area. With the proposed amendments, the Village Four project
will remain consistent with the Chula Vista General Plan land use,
transportation, economic development, housing, public facilities and
services, environmental and growth management objectives and policies.
The proposed Portion of Village Four plan remains compatible with the
general and specific plans for the area, and the land uses are compatible with
the CVGP and ORGDP land use designations.
2. Design or improvement is consistent with applicable general and specific
plans. The General Plan establishes the vision for the eastern part of the
City, and the portion of Village Four SPA Plan defines the land use character
and mix of uses, design criteria, circulation system, and public infrastructure
requirements for the Project. The Project’s design of 73 single family lots is
consistent with the Single Family (SF-1) and 3 multi-family lots consisting of
277 units within the (RM-1 and RM-2) zoning classifications which are
consistent with the General Plan’s RLM designation. The Tentative Map is
consistent with the general and specific plans.
3. Site is suitable for the proposed density of development. The Project’s
proposed zoning (Planned Community District Regulations) support the
design of a viable village with residential uses that will create a strong sense
of place for residents of a portion of Village Four and surrounding
communities. The Projects 350 units are equal to the allowed density range
of 3-6 dwelling units per acre with a maximum yield of 350 units. The
densities are in accordance with the General Plan and the SPA Plan for the
area.
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4. Site is physically suitable for the type of development. The Project is
surrounded by adjacent multi- and single- family development, and planned
commercial uses in Village 8 West with available access and infrastructure to
serve the Project.
5. The design of the subdivision or the proposed improvements are not likely to
cause substantial environmental damage or substantially and avoidably injure
fish or wildlife or their habitat. The Project has been designed to minimize
disturbance with cut and fill slopes balance, and a habitat restoration plan has
been prepared that avoids permanent disturbance or injury to wildlife or their
habitat.
6. The design of the subdivision or type of improvements is not likely to cause
serious public health problems because the Project has been designed to have
plenty of separation between homes, able to be served by fire and emergency
services, and located over 500 feet from a major highway.
7. Subdivision or the type of improvements will not conflict with easements,
acquired by the public at large, for access through or use of, property within
the proposed subdivision. The project’s roadways and utilities are within and
are not in conflict with proposed easements.
E. The City Council finds that the site is physically suited for development because it will
be developed in conformance with the Otay Ranch a Portion of Village Four SPA Plan
and FEIR-17-0001, which contain provisions to ensure that the site is developed in a
manner that is consistent with the standards established by the City for a master–planned
community.
F. The City Council finds that the conditions herein imposed on the Project, are
approximately proportional both in nature and extent to the impact created by the Project,
based upon the City’s police powers and evidence provided by the record.
IV. GOVERNMENT CODE SECTION 66020 NOTICE
Pursuant to Government Code Section 66020(d) (1), NOTICE IS HEREBY GIVEN that the
90-day period to protest the imposition of any impact fee, dedication, reservation, or other
exaction described in this resolution begins on the effective date of this resolution and any
such protest must be in a manner that complies with Section 66020(a) and failure to follow in
a timely manner this procedure will bar any subsequent legal action to attack, set aside, void
or annul imposition. The right to protest the fees, dedications, reservations, or other
exactions does not apply to planning, zoning, grading, or other similar application processing
fees or service fees in connection with the project; and it does not apply to any fees,
dedication, reservations, or other exactions which have been given notice similar to this, nor
does it revive challenges to any fees for which the Statute of Limitations has previously
expired.
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V. INDEMNITY PROVISION
The Property Owner and Applicant shall and do agree to indemnify, protect, defend and hold
harmless City, its City Council members, Planning Commission members, officers,
employees and representatives, from and against any and all liabilities, losses, damages,
demands, claims and costs, including court costs and attorney’s fees (collectively, liabilities)
incurred by the City arising, directly or indirectly, from (a) City’s approval of the Project; (b)
City’s approval or issuance of any other permit or action, whether discretionary or
nondiscretionary, in connection with the use contemplated on the Project Site; and (c)
approval of any CEQA action, including, certification of Final EIR 17-0001. The Property
Owner and Applicant shall acknowledge their agreement to this provision by executing a
copy of this Resolution where indicated. The Property Owner’s and Applicant’s compliance
with this provision shall be binding on any and all of the Property Owner’s and Applicant’s
successors and assigns.
VI. EXECUTION AND RECORDATION OF RESOLUTION OF APPROVAL
The Property Owner and the Applicant shall execute this document by signing the lines
provided below, said execution indicating that the property owner and Applicant have each
read, understood, and agreed to the conditions contained herein. Upon execution, this
document shall be recorded with the County Recorder of the County of San Diego, at the sole
expense of the Property Owner and the Applicant, and a signed, stamped copy of this
recorded document shall be returned within ten days of recordation to the City Clerk. Failure
to record this document shall indicate the Property Owner and Applicant’s desire that the
Project, and the corresponding application for building permits and/or a business license, be
held in abeyance without approval. Said document will also be on file in the City Clerk’s
Office and known as Document No. 2018-XXX.
Signature of Applicant:Date
___________________________
Printed Name of Applicant
______________________________________________
Signature of Owner Date:
____________________________
Printed Name of Owner
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Page No. 8
VII. CONSEQUENCE OF FAILURE OF CONDITIONS
If any of the foregoing conditions fail to occur, or if they are, by their terms, to be
implemented and maintained over time, if any of such conditions fail to be so implemented
and maintained according to their terms, the City shall have the right to revoke or modify all
approvals herein granted, deny, or further condition issuance of all future building permits,
deny, revoke, or further condition all certificates of occupancy issued under the authority of
approvals herein granted, institute and prosecute litigation to compel their compliance with
said conditions or seek damages for their violation. The Applicant shall be notified ten (10)
days in advance prior to any of the above actions being taken by the City and shall be given
the opportunity to remedy any deficiencies identified by the City within a reasonable and
diligent time frame.
VIII. INVALIDITY; AUTOMATIC REVOCATION
It is the intention of the City Council that its adoption of this Resolution is dependent upon
the enforceability of each and every term, provision and condition herein stated; and that in
the event that any one or more terms, provision, or conditions are determined by a Court of
competent jurisdiction to be invalid, illegal or unenforceable, this resolution shall be deemed
to be automatically revoked and of no further force and effect ab initio.
BE IT FURTHER RESOLVED that the City Council does hereby approve the Project
subject to the Findings contained herein and subject to the Conditions of Approval set forth in
Exhibit 2 attached hereto and incorporated herein by this reference and on file in the Office of
the City Clerk.
Presented by:Approved as to form by:
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
2018-05-15 Agenda Packet Page 540
Resolution No. 2018-XXX
Page No. 9
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this ___ day of ____________ 20___, by the following vote:
AYES: Councilmembers: ___________________________
NAYS: Councilmembers: ___________________________
ABSENT: Councilmembers: ___________________________
Mary Casillas-Salas, Mayor
ATTEST:
____________________________________
Kerry K. Bigelow, MMC, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Kerry K. Bigelow, City Clerk of Chula Vista, California, do hereby certify that the
foregoing Resolution No. 2018-____ was duly passed, approved, and adopted by the City
Council at a regular meeting of the Chula Vista City Council held on the ____ day of ________
20___.
Executed this ____ day of __________ 20__.
Kerry K. Bigelow, MMC, City Clerk
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Resolution No. 2018
Page No. 10
EXHIBIT 1
SITE LOCATION MAP
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Resolution No. 2018-XXX
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Resolution No. 2018
Page No. 12
EXHIBIT 2
VILLAGE FOUR (CVT-15-03) TENTATIVE MAP CONDITIONS
TENTATIVE MAP CONDITIONS OF APPROVAL:
1.Unless otherwise specified or required by law: (a) the conditions and Chula Vista Municipal
Code requirements set forth below shall be completed prior to the related Final Map as
determined by the Development Services Director and the City Engineer, or designees,
unless otherwise specified, "dedicate" means grant the appropriate easement, rather than fee
title. Where an easement is required the Applicant shall be required to provide subordination
of any prior lien and easement holders in order to ensure that the City has a first priority
interest and rights in such land unless otherwise waived by the City Manager or designee.
Where fee title is granted or dedicated to the City, said fee title shall be free and clear of all
encumbrances, unless otherwise excused by the City.
2. The Project shall incorporate, by reference, all of the City of Chula Vista Standard Tentative
Map Conditions of Approval, as set forth in Section 5-300 of the City of Chula Vista
Subdivision Manual.
3. The Applicant shall obtain approval of a Final Map showing condominium ownership prior
to development of condominiums within any lot proposing multi-family residential uses.
4. The Applicant shall dedicate, with the applicable Final Map, for public uses all the public
streets shown on the Portion of Village 4 Tentative Map (CVT 15-03) within the subdivision
boundary.
5. Prior to issuance of each Final Map, Applicant shall be responsible for assuring right-of-way
improvements necessary for vehicular and pedestrian connection from the subject map area
to existing public roadways to the satisfaction of the City Engineer.
6. Prior to issuance of each Final Map, Applicant shall be responsible for assuring
enhancements within and outside the right-of-way and internal to the subject map area in
addition to applicable off-site infrastructure improvements sized to serve the subject map
area.
7. Prior to the approval of the first Final Map, one of the following shall occur to the
satisfaction of the City Engineer: the Applicant shall provide approved and bonded roadway
Improvement Plans for the roadways that provide direct access to the Project Site,
specifically La Media Road from its existing southern terminus to Main Street and Main
Street from La Media Road to the westerly project boundary and the improvements shall be
constructed prior to issuance of the first Building Permit (other than Building Permits for
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Resolution No. 2018-XXX
Page No. 13
model homes); or Applicant shall cease development of the Project until those assumed
future roadways are constructed by others as presently planned.
8. The Applicant shall request and deliver to the City a service availability letter from the Otay
Water District prior to approval of a Final Map.
9. The Applicant shall comply with the Sewer Utility mitigation measures identified in the
Project Environmental Impact Report.
10. The Applicant shall underwrite the cost of all studies and reports required to support the
addition of sewer flows to existing lines, assume the capital costs of all sewer lines and
connection identified in the Project PFFP, comply with Section 303 of the Subdivision
Manual, and construct off-site connections as required by the City Engineer.
11. The Applicant shall comply with the recommended mitigation measures provided in the
Project Drainage Study, SWQMP, and Project EIR.
12. Prior to the issuance of the first Building Permit (other than for a model home), the Applicant
shall assure the maintenance of drainage facilities by a property owner’s association that
would raise funds through fees paid by each property owner and/or participation in a
Community Facilities District (CFD) established over the entire Project to raise funds
through the creation of a special tax for drainage maintenance purposes.
13. Prior to approval of each Final Map, Applicant shall provide proof that all off-site right of
way, drainage, sewage, and water facilities have been approved and bonded Improvement
Plans necessary to connect said Final Map to existing facilities to the satisfaction of the
Development Services Director and City Engineer. In the case of two separate property
owners utilizing the same plans and bonds of said Improvement Plans and right of ways, both
property owners shall provide written proof to process plans, construct from the same set of
plans, process as-builts, complete punch list items, and have the same bond company listing
them both as principals, all to the satisfaction of the Development Services Director and City
Engineer.
14. Prior to issuance of the 121
st Building Permit, Applicant shall negotiate with the Chula Vista
Fire Department to determine the contribution by the Applicant and contribute to fully fund a
fourth firefighter. This is to be monitored annually until either the Millenia or Village 8
West fire station is operational.
15. The Applicant shall comply with the Air Quality mitigation measure in the Project EIR and
Project Air Quality Improvement Program.
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Resolution No. 2018
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16. Should conflicting wording or standards occur between these Conditions of Approval, any
conflict shall be resolved by the City Manager.
17. The Applicant, or his/her successors in interest, shall improve the Project Site with the
Project as described in the Tentative Subdivision Map, Chula Vista Tract No. 15-03,
generally located adjacent to Main Street.
18. The Project shall comply with the General Development Plan Amendment (MPA17-0006),
and the Sectional Planning Area (SPA) Plan for a Portion of Village Four (PCM-15-07), and
the City of Chula Vista Standard Tentative Map Conditions as outlined in the Subdivision
Manual and incorporated herein.
19. The Applicant shall implement, to the satisfaction of the Development Services Director and
the City Engineer, the associated Mitigation Measures and associated Mitigation Monitoring
and Reporting Program (MMRP) identified in the Final Environmental Impact Report (FEIR-
17-0001: SCH No. 2016041080) for Amendments to the Otay Ranch General Development
Plan (MPA17-0006), adoption of a new Portion of Village Four SPA Plan (PCM-15-07), and
for the Portion of Village Four Tentative Map for CVT-15-03 (PCS15-03), within the
timeframe specified in the MMRP.
20. During any real estate transaction, or prior to lease-signing of any property within the Portion
of Village Four Project, the prospective owners or residents shall be notified of the following
information in disclosure documents and in the Covenants, Conditions & Restrictions
(CC&Rs) for each Homeowners Association (HOA) within the Village:
a. NOTICE OF AIRPORT VICINITY: This property is presently located in the vicinity of an
airport, within what is known as an airport influence area / overflight area. For that reason,
the property may be subject to some of the annoyances or noise, vibration, or odors.
Individual sensitivities to those annoyances can vary from person to person. You may wish to
consider what airport annoyances, if any, are associated with the property before you
complete your purchase or lease and determine whether they are acceptable to you.
b. NOTICE OF MINING OPERATIONS: This property is located near an existing mining
operation that is expected to operate during and after build-out of Village Four and could
subject residents to nuisance noise, blasting, vibration and dust from on-going mining
operations.
c. NOTICE OF LANDFILL: This property is located in the vicinity of the Otay Landfill which
is a solid waste disposal facility. Customary solid waste disposal operations may include, but
are not limited to, noise, odors, dust, vibrations, birds, and vectors. Individual sensitivities to
those annoyances can vary from person to person. You may wish to consider which of these
annoyances, if any, are associated with the property before you complete your purchase or
lease and determine whether they are acceptable to you.
d. NOTICE OF FUTURE EXPANSION OF STATE ROUTE 125 (SR-125): Be advised there
is a plan (per SANDAG RTP) for the widening of SR-125 to improve traffic flows. This
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Resolution No. 2018-XXX
Page No. 15
property may be subject to some of the annoyances related to the construction and operation
of the road.
A copy of these disclosure documents shall be recorded with the County of San Diego
Recorder’s Office as part of Project approval. Each prospective homeowner and or lease
holder shall sign the disclosure document confirming they have been informed of the vicinity
of the airport, mine/quarry, landfill and SR-125 prior to purchase or lease of property and or
occupancy.
21. The Applicant shall construct public facilities in compliance with the Portion of Village Four
PFFP (as amended from time to time) as specified in the Threshold Compliance and
Recommendations section for each public facility chapter. At the Applicant’s request, the
City Engineer and Development Services Director may, at their discretion, modify the
sequence, schedule, alignment and design of improvement construction should conditions
change to warrant such a revision. The Applicant shall provide the applicable
studies/analysis, which may be reviewed by a third party Consultant for the City paid for by
the Applicant, identifying the change in conditions that may warrant a modification of the
sequence, schedule, alignment and design of improvement construction, as well as, amend
the PFFP to match any modification of the sequence, schedule, alignment and design of
improvement construction.
22. Prior to the approval of the Final Map for Planning Areas adjacent to off-site fuel
management areas, the Applicant shall provide an off-site fuel management program in
accordance with Section 4.1.2 “Other Vegetation Management” of the Fire Protection Plan,
and CVMC Chapter 15.38- “Urban Wildland Interface Code.” The Program shall establish
the obligations for fuel management that apply to each of the Planning Areas and adjacent
off-site properties, including required fuel management zones adjacent to structures, consent
from affected off-site property owners, and other applicable requirements to the satisfaction
of the Fire Marshal and Development Services Director. The program requirements shall be
satisfied prior to the delivery of combustible material to the site, to the satisfaction of the Fire
Marshal.
23. A reserve fund program has been established by Resolution No. 18288 for the funding of the
Fiscal Impact of New Development (F.I.N.D.) Model for the Otay Ranch Project. The
Applicant shall provide funds to the Reserve Fund as required by the Reserve Fund Program
(RFP). Pursuant to the provisions of the Growth Management Ordinance and the Otay
Ranch General Development Plan (GDP), the Applicant shall participate in the funding of the
preparation of an annual report monitoring the development of the community of Otay
Ranch. The annual monitoring report will analyze the supply of, and demand for, public
facilities and services governed by the threshold standards. An annual review shall
commence following the first fiscal year in which residential occupancy occurs in the Project
and is to be completed during the second quarter of the following fiscal year. The annual
report shall adhere to the GDP/SRP, as amended from time-to-time.
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Resolution No. 2018
Page No. 16
24. Prior to issuance of Building Permits, in order to address projected Project revenue shortfalls
(in accordance with section 19.09.060(J) of the CVMC), as identified in the Financial Impact
Analysis portion of the PFFP, the Applicant shall pay a fee in the amount of $85.00 per
dwelling unit, to the satisfaction of the Development Services Director.
Public Facilities:
25. Prior to approval of the first Final Map for the Project, the Applicant shall provide the City
with a Portion of Village Four Subarea Master Plan(s) (SAMP) for potable, recycled, and fire
flow water, as approved by Otay Water District (OWD). The Applicant shall bond and
construct for all on-site and off-site water facilities in accordance with the SAMP. The
SAMP shall be consistent with the SPA Plan.
26. Prior to issuance of Improvement Plans, Applicant shall obtain approval from OWD
regarding adequacy of potable and recycled water.
Affordable Housing:
27. Prior to approval of the first Final Map for the Project, the Applicant shall enter into a
Balanced Communities Affordable Housing Agreement, in compliance with City and State of
California regulations. Such agreement shall identify methods of compliance as set forth in
Appendix H, “Affordable Housing Program,” including either providing affordable housing
at an “On-Site” location, “Off-Site” location, or payment of an in-lieu housing fee to be paid
upon issuance of Building Permits.
Parks:
28. The Project generates a demand for 2.94 acres of Parkland. In accordance with the
provisions of the Park Land Development Ordinance (PLDO), the Applicant shall pay in-lieu
fees for the required PAD prior to the issuance of Building Permits.
Trails:
29. The Applicant shall submit and obtain approval of Trail Improvement Plans prior to approval
of a Grading Permit and shall construct all required trails fencing and signage, consistent
with City trail standards, or as required by the Development Services Director. Said
Improvement Plans containing Chula Vista Greenbelt Trail segments or Neighborhood
trails/village pathway connection as depicted on the Portion of Village Four Tentative Map
(CVT 15-03), will include improvements such as fencing and signage.
Landscaping/Walls/Fences:
30. Footings and geo-synthetic reinforcement grid for retaining walls and walls that may be
planted shall not encroach into adjacent properties or public rights-of-way, to the greatest
extent possible, subject to approval of the Development Services Director.
31. Prior to approval of the first Final Map the Applicant shall:
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Resolution No. 2018-XXX
Page No. 17
a. Obtain Development Services Director approval of the Landscape Master Plan for
the Project. The Landscape Master Plan shall identify a funding mechanism to
maintain landscape improvements, trails, open space areas and other improvement
areas subject to approval of the Development Services Director. The contents of
the Landscape Master Plan shall contain the major components listed in Master
Condition 30(a) thru (h) in the Subdivision Standard Conditions unless waived by
the Development Services Director.
b. Submit evidence acceptable to the City Engineer and Development Services
Director of the formation of a Master Homeowner’s Association (MHOA), or
another financial mechanism acceptable to the City Manager, including a CFD or
Open Space District. A CFD is the preferred financial mechanism for a
maintenance district. If another financial mechanism is not formed, the MHOA
shall be responsible for the maintenance of those landscaping improvements that
are not included in the proposed financial mechanism. The City Engineer and the
Development Services Director may require that some improvements be
maintained by the CFD or Open Space District. The final determination of which
improvements are to be included in the CFD or Open Space District and those to
be maintained by the MHOA shall be made during the CFD or Open Space
District Proceedings. The MHOA shall be structured to allow annexation of future
tentative map areas in the event the City Engineer and Development Services
Director requires such annexation of future tentative map areas.
c. The Applicant shall submit for City’s approval the CC&R’s grant of easements
and maintenance standards and responsibility of the MHOA’s for the Open Space
Areas within the Portion of Village Four Project Area. The Applicant shall
acknowledge that the MHOA’s maintenance of public open space, trails, etc. may
expose the City to liability. The Applicant agrees to establish an MHOA that will
indemnify and hold the City harmless from any actions of the MHOA in the
maintenance of such areas.
d. Submit and obtain approval of the City Engineer and Development Services
Director of a list of all facilities and other items to be maintained by the proposed
district(s) or MHOA. Separate lists shall be submitted for the improvements and
facilities to be maintained by the CFD or Open Space District or some other
financing mechanism and those to be maintained by the MHOA. Include a
description, quantity, and cost per year for the perpetual maintenance of said
improvements. These lists shall include but are not limited to the following
facilities and improvements:
i. All facilities located on Open Space lots to include but not be limited to:
walls, fences, water fountains, lighting structures, paths, trails, access
roads, drainage structures, and landscaping. Each Open Space lot shall
also be broken down by the number of acres of: 1) turf, 2) irrigated, and 3)
non-irrigated open space to aid in estimation of a maintenance budget
thereof.
ii. The proportional share of the life cycle and maintenance costs of any
landscaping within the public right of way, including but not limited to the
landscaped medians.
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Resolution No. 2018
Page No. 18
iii. All water quality basins serving the Project.
32. The Applicant shall be required to enter into a “Grant of Easement and Maintenance
Agreement” with the City for all publically owned areas maintained by the MHOA prior
to the approval of the first Final Map.
33. The Applicant agrees to not protest formation or inclusion in a maintenance district or
zone for the maintenance of landscape medians, and scenic corridors along streets, within
or adjacent to the subject subdivision.
34. The Applicant shall submit a detailed wall/fencing plan with the Design Review Site Plan
submittal for each Planning Area showing that all project walls and fences comply with
the approved SPA Plan, Landscape Master Plan, and other applicable City requirements,
to the Development Services Director for approval. Plans shall indicate color, materials,
height and location of freestanding walls, retaining walls, and fences. The plan shall also
include details such as accurate dimensions, complete cross-sections showing required
walls, adjacent grading, landscaping, and sidewalk improvements.
35. Prior to recordation of each applicable Final Map, the Applicant shall convey fee title to
land within the Otay Ranch Preserve to the Otay Ranch Preserve Owner Manager or its
designee at a ratio of 1.188 acres for each acre of development area, as defined in the
Otay Ranch Resource Management Plan. Access to the conveyed property for
maintenance purposes shall also be provided to the satisfaction of the Preserve Owner
Manager.
36. Prior to issuance of the first Building Permit or other discretionary permits for multi-
family developments within the Project Site, the Applicant shall comply with applicable
provisions of Municipal Code Section 8.24 - Solid Waste and Litter, and Section 8.25 –
Recycling, related to development projects, to the satisfaction of the Department of
Public Works, Environmental Services Division. These requirements include, but are not
limited to the following design requirements:
a. The Applicant shall design multi-family projects to comply with the Recycling
and Solid Waste Standards for central collection bin services.
b. The Applicant shall design each single-family lot or residence to accommodate
the storage and curbside pickup of individual trash, recycling and green waste
containers (3 total), as approved for a small-quantity generator (single family
residential use).
37. Prior to recordation of each Final Map, all CFD or Open Space District slope and open
space areas shall be designated as individual lots on said Final Map to the satisfaction of
the Development Services Director.
38. Prior to approval of any Landscape and Irrigation Plans for areas designated Fuel
Modification Zones, the Applicant shall provide proof to the City that a Fire Protection
Planning Firm has reviewed and confirmed that the plans are in conformance with the
requirements of the Fire Protection Plan within the Otay Ranch a Portion of Village Four
SPA Plan,.
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Resolution No. 2018-XXX
Page No. 19
Community Purpose Facility:
39. Prior to issuance of the 151
st Building Permit, Applicant shall construct the CPF-2 site
consistent with the Otay Rach Village Four SPA PC District Regulations Figure 4.2
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ORDINANCE No._______
ORDINANCE OF THE CITY OF CHULA VISTA
APPROVING THE SECTIONAL PLANNING AREA (SPA)
PLANNED COMMUNITY DISTRICT REGULATIONS FOR
OTAY RANCH PORTION OF VILLAGE FOUR
WHEREAS, the property which is the subject matter of this Ordinance is identified as
Exhibit "1" attached hereto and incorporated herein by this reference and commonly known as
Otay Ranch Portion of Village Four, which consists of approximately 166.0 acres located on the
east side of Wolf canyon, straddling the future extension of Main Street from la Media Road to
the north and to Heritage Road to the southeast (the “Property”); and
WHEREAS, an application (PCM-15-07) to consider a new Sectional Planning Area
(SPA) Plan, including Planned Community District Regulations for the Portion of Village Four
(the “Project”) was filed with the City of Chula Vista Development Services Department on
March 12, 2015, by Otay Valley Quarry, LLC (the “Applicant” and “Owner”); and
WHEREAS, the Project is intended to ensure that the Portion of Village Four SPA Plan is
prepared in accordance with the Otay Ranch General Development Plan (GDP) to implement the
City of Chula Vista General Plan for Eastern Chula Vista to promote the orderly planning and
long term phased development of the Otay Ranch GDP and to establish conditions which will
enable Otay Ranch Village Portion of Four to exist in harmony within the community; and
WHEREAS, the development of the Property has also been the subject matter of a
concurrently processed Otay Ranch General Development Plan Amendment (GDPA) (MPA17-
0006), approved by the City Council; and
WHEREAS, the Project is established pursuant to Title 19 of the Chula Vista Municipal
Code, specifically Chapter 19.48 Planned Community (PC) Zone, which is applicable to the
Otay Ranch Portion of Village Four SPA Land Use Plan; and
WHEREAS, the Project establishes a Planned Community District Regulation Code
applicable to the Residential, Open Space and Parks, and Community Purpose Facility Districts,
located in the Otay Ranch Portion of Village Four SPA Land Use Plan; and
WHEREAS, the City’s Development Services Director has reviewed the Project for
compliance with the California Environmental Quality Act (CEQA) and determined that there is
substantial evidence, in light of the whole record before the City of Chula Vista, that the Project
may have a significant effect on the environment; therefore, the Development Services Director
has caused the preparation of an Environmental Impact Report, EIR 17-0001; and
WHEREAS, the development of the Property relied on the Otay Rach Village Four SPA
Plan Project Environmental Impact Report No. 17-0001, SCH # 2016041080 (EIR-17-001); and
the Findings of Fact and Mitigation Monitoring and Reporting Program, Certified by the City
Council on xxxxxxx; and
2018-05-15 Agenda Packet Page 552
WHEREAS, the Planning Commission set the time and place for a hearing on said
Project and notice of said hearing, together with its purpose, was given by its publication in a
newspaper of general circulation in the City and its mailings to property owners within 500 feet
of the exterior boundaries of the Project site at least ten days prior to the hearing; and
WHEREAS; the hearing was held at the time and place as advertised in the City Council
Chambers located at 276 Fourth Avenue, and said hearing was thereafter closed; and
WHEREAS; a duly noticed public hearing was scheduled before the City Council of the
City of Chula Vista to approve the Project; and
WHEREAS, the proceedings and any documents submitted to the Planning Commission
and City Council as the decision makers shall comprise the entire record of the proceedings.
NOW, THEREFORE, THE CITY COUNCIL of the City of Chula Vista does hereby find
and ordain as follows:
I. PLANNING COMMISSION RECORD
That the proceedings and all evidence introduced before the Planning Commission at
their public hearing and the Minutes and Resolutions resulting therefrom are hereby
incorporated into the record of this proceeding. These documents, along with any
documents submitted to the decision-makers, shall comprise the entire record of the
proceedings.
II. ACTION
That the City Council hereby adopts an Ordinance approving the Otay Ranch Portion of
Village Four SPA Planned Community District Regulations, finding that they are
consistent with the City of Chula Vista General Plan, the Otay Ranch General
Development Plan and all other applicable Plans; as set forth in Resolution PCM-xxxxx
adopting the Portion of Village Four SPA Plan, and that the public necessity;
convenience, general welfare and good planning and zoning practice support their
approval and implementation.
III. SEVERABILITY
If any portion of this Ordinance, or its application to any person or circumstance, is for
any reason held to be, invalid, unenforceable or unconstitutional; by a court of competent
jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability
or unconstitutionality shall not affect the validity or enforceability of the remaining
portions of the Ordinance, or its application to any other person or circumstance. The
City Council of the City of Chula Vista hereby declares that it would have adopted each
section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any one
or more other sections, sentences, clauses or phrases of the Ordinance be declared
invalid, unenforceable or unconstitutional.
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IV. CONSTRUCTION
The City Council of the City of Chula Vista intends this Ordinance to supplement, not to
duplicate or contradict, applicable state and federal law and this Ordinance shall be
construed in light of that intent.
V. EFFECTIVE DATE
This Ordinance shall take effect and be in full force on the thirtieth day from and after its
adoption.
VI. PUBLICATION
The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause
the same to be published or posted according to law.
Presented by:Approved as to form by:
________________________________________________
Kelly Broughton, FASLA Glen R. Googins
Development Services Director City Attorney
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EXHIBIT “1”
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City of Chula Vista
Staff Report
File#:18-0062, Item#: 18.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, ACTING IN ITS
CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 16-I
(MILLENIA), AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF SPECIAL TAX BONDS
FOR IMPROVEMENT AREA NO. 1 OF SUCH COMMUNITY FACILITIES DISTRICT, APPROVING
THE FORM OF BOND INDENTURE, BOND PURCHASE AGREEMENT, PRELIMINARY OFFICIAL
STATEMENT AND OTHER DOCUMENTS RELATED THERETO AND AUTHORIZING CERTAIN
ACTIONS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
In September 2016 the City formed Community Facilities District No. 16-I (Millenia) pursuant to the
Mello-Roos Community Facilities Act of 1982, as amended, to finance the acquisition, construction,
expansion, improvement, or rehabilitation of certain public facilities to serve the area within the
District and its neighboring areas. The District is authorized to issue up to $20,000,000 principal
amount of bonds. The City now wants to issue for the District a series of special tax bonds to finance
the public facilities.
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality
Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Determination
The Development Services Director has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the proposed action is not a
“Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a
physical change to the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA
Guidelines the actions proposed are not subject to CEQA.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
Community Facilities District No. 16-I (Millenia) was formed by the City pursuant to the Mello-Roos
Community Facilities Act of 1982 and Improvement Area No. 1 and Improvement Area No. 2 were
designated therein. The District constitutes a governmental entity separate and apart from the City.
City of Chula Vista Printed on 5/10/2018Page 1 of 6
powered by Legistar™2018-05-15 Agenda Packet Page 556
File#:18-0062, Item#: 18.
Pursuant to the Act, on August 2, 2016, the City Council adopted Resolution No. 2016-154 stating its
intention to form the District, designate Improvement Area No. 1 and Improvement Area No. 2
therein, and to authorize the levy of a special tax on the taxable property within each of Improvement
Area No. 1 and Improvement Area No. 2. On August 2, 2016, the City Council also adopted
Resolution No. 2016-155, stating its intention to incur bonded indebtedness in an aggregate principal
amount, with respect to Improvement Area No. 1, not to exceed $20,000,000, for the purpose of
financing the acquisition, construction, expansion, improvement, or rehabilitation of certain public
facilities to serve the area within the District and its neighboring areas.
Subsequent to a noticed public hearing, the City Council adopted Resolution Nos. 2016-184 and
2016-185 on September 13, 2016, which established the District, designated Improvement Area No.
1 and Improvement Area No. 2 therein, authorized the levy of a special tax within each of
Improvement Area No. 1 and Improvement Area No. 2, determined the necessity to incur bonded
indebtedness within the District with respect to each of Improvement Area No. 1 and Improvement
Area No. 2, and called an election within each of Improvement Area No. 1 and Improvement Area No.
2 on the propositions of incurring bonded indebtedness, levying a special tax and setting an
appropriations limit within the District.
On September 13, 2016, an election was held within Improvement Area No. 1 at which the
landowners within Improvement Area No. 1 eligible to vote approved the issuance of bonds for the
District with respect to Improvement Area No. 1 in an amount not to exceed $20,000,000. A Notice of
Special Tax Lien for Improvement Area No. 1 was recorded in the office of the County of San Diego
Recorder on September 22, 2016 as Document No. 2016-0502330. On September 20, 2016, the
City Council, acting as the legislative body of the District, adopted Ordinance No. 3375, which
authorizes the levy within Improvement Area No. 1 of a special tax pursuant to the Rate and Method
of Apportionment of Special Tax for Improvement Area No. 1 approved at the September 13, 2016
election.
The District is located in the eastern portion of the City of Chula Vista approximately 8 miles
southeast of the City of San Diego, within the Otay Ranch master planned community. The District
consists of approximately 67 gross acres of which 42 acres are within Improvement Area No. 1
therein and 25 acres are within Improvement Area No. 2 therein. The District is a portion of a larger
development within Otay Ranch known as “Millenia.” The Millenia development is located south of
Birch Road, east of State Route 125, and west of Eastlake Parkway. The Millenia project covers
approximately 230 gross acres and is planned for a mixed-use development both rental and for-sale
residential units and a maximum of 3.4 million square feet of commercial uses, including a hotel,
retail space and a business district of up to two million square feet of office space. The Millenia
development is expected to be served by a number of parks and a civic core including library
facilities, an elementary school and a City fire station. Existing developments within the Millenia
community include apartments, single family homes and an Ayres Hotel, which is under construction.
Improvement Area No. 1 of the District is made up of six separate project areas, four of which are
planned for residential uses and two of which are planned for commercial uses. 393 residential units
and over 1 million square feet of commercial development are planned within Improvement Area No.
1. The project areas within Improvement Area No. 1 originally consisted of six separate assessor’s
parcels, certain of which have been further subdivided in accordance with the development plans for
such parcels. Approximately 41 acres of property in Improvement Area No. 1 are expected to be
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such parcels. Approximately 41 acres of property in Improvement Area No. 1 are expected to be
subject to the Special Tax at build-out. The property within Improvement Area No. 1 which is not
expected to be subject to the levy of the Special Tax consists primarily of property to be owned by the
property owners associations.
PROPERTY OWNERSHIP: SLF - IV Millenia LLC, a Delaware limited liability company (“SLF”), is the
master developer within the District. SLF has contracted with Meridian Development (“Meridian”), a
land development and homebuilding company, to manage the development of the property within the
Millenia project, including the District. SLF and Meridian are not affiliated entities. Meridian does not
own any property within Improvement Area No. 1.
SLF has conveyed three of the four original assessor’s parcels within Improvement Area No. 1
planned for residential development to Shea Homes Limited Partnership, a California limited
partnership (“Shea Homes”), CalAtlantic Group, Inc., a Delaware corporation (“CalAtlantic”) and KB
HOME California LLC, a Delaware limited liability company (“KB Home California”), respectively.
From the two project areas within Improvement Area No. 1 that are planned for commercial uses,
LMC Millenia Investment Company, L.P. (“LMC Millenia Company”) has acquired one parcel
corresponding with one of such commercial project areas from SLF and is under contract to purchase
the second from SLF (which sale is expected to close in July 2018). The remaining assessor’s
parcel owned by SLF is planned for 60 residential units, which SLF expects to convey to a residential
builder by the end of 2018.
The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) to be installed by
SLF to serve the property within Improvement Area No. 1 is substantially complete. The major
arterial roads which border the Millenia project are Birch Road and Eastlake Parkway. The roads
within the Millenia development from which the property included in Improvement Area No. 1 can be
accessed are complete. The property within Improvement Area No. 1 varies from a mass-graded
land to completed homes. In-tract improvements are expected to be constructed by the
homebuilders and the commercial property developer as development within their respective projects
is completed.
SLF is responsible for constructing six parks within the Millenia development pursuant to the Park
Agreement with the City. The issuance of certificates of occupancy for the residential projects being
constructed by Shea Homes and KB Home California are limited to certain thresholds until certain
requirements with respect to construction of two park sites are satisfied.
DEVELOPMENT STATUS: As of February 1, 2018, the status of the residential developments owned
by homebuilders within Improvement Area No. 1 was as follows: (i) Shea Homes had completed and
conveyed 53 homes within Improvement Area No. 1 to individual homeowners, owned six completed
model homes, had 34 homes under construction (seven of which were over 95% complete) and
owned 83 finished lots; (ii) KB Home California owned two completed model homes, had six homes
under construction and owned 71 partially finished lots; and (iii) CalAtlantic owned one assessor’s
parcel planned for 78 attached townhomes for which grading had commenced. As of such date, the
assessor’s parcel owned by LMC Millenia Company had been finish graded, including the below-
grade excavation for a proposed parking structure. Such assessor’s parcel is planned for an office
campus with two buildings totaling approximately 318,000 square feet of leasable space, an amenity
building of approximately 6,100 square feet and a parking garage of approximately 401,760 square
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building of approximately 6,100 square feet and a parking garage of approximately 401,760 square
feet.
As of February 1, 2018, SLF owned one assessor’s parcel under contract to be sold to LMC Millenia
Company planned for commercial use (which sale is expected to close in July 2018) and one
assessor’s parcel planned for a residential development of 60 homes, which SLF expects to convey
to a homebuilder. As of such date, such property owned by SLF were in a mass graded condition.
The assessor’s parcel under contract to be sold to LMC Millenia Company is expected to be
developed into an office campus with four buildings with approximately 700,000 square feet of
leasable space.
AUTHORIZATION AND SALE: The Bonds are authorized to be issued pursuant to the Mello-Roos
Community Facilities Act of 1982, as amended (Sections 53311 et seq.of the Government Code of
the State of California) and pursuant to a resolution( the “Resolution”) presented for consideration of
adoption by the City Council of the City of Chula Vista, acting as the legislative body of the District
and a Bond Indenture dated as of June 1, 2018, by and between the District and U.S. Bank National
Association, as Fiscal Agent. The resolution approves the form of the following documents in
connection with the financing:
1. Indenture between the Community Facilities District and U.S. Bank National Association (as
Fiscal Agent);
2. Bond purchase agreement between the Community Facilities District and Stifel, Nicolaus &
Company, Incorporated (the underwriter);
3. Preliminary Official Statement;
4. Continuing Disclosure Agreements.
The Resolution also approves the distribution of the preliminary official statement and authorizes the
execution of the Bond Purchase Agreement by the City Manager, the Assistant City Manager, or the
Director of Finance, as well as provides certain sale parameters. These parameters are as follows:
(1) the par amount of the bonds cannot exceed $15,000,000, (2) true interest cost cannot exceed
6%, and (3) the underwriter’s discount cannot exceed 1.25% of the par amount of the Bonds.
Except for the Special Taxes, no other taxes are pledged to the payment of the Bonds and any Parity
Bonds. The Bonds and any Parity Bonds are not general or special obligations of the City nor
general obligations of the CFD, but are special obligations of the CFD payable solely from Special
Taxes and amounts held under the Indenture.
In connection with the issuance of the Bonds, the City has been represented by Best Best & Krieger
LLP as Bond Counsel, Stradling Yocca Carlson and Rauth as Disclosure Counsel, Fieldman Rolapp
& Associates, Inc. as Municipal Advisor, Willdan Financial Services as Special Tax Consultant, Kitty
Siino & Associates as Real Estate Appraiser and Meyers Research LLC as Market Absorption
Analyst. U.S. Bank National Association, Los Angeles, California, will act as Fiscal Agent for the
Bonds. The Bonds, if issued, will be sold on a negotiated sale basis to Stifel, Nicolaus & Company,
Incorporated as investment banker /underwriter.
USE OF PROCEEDS: The amount of bonds to be issued is currently estimated at $13,200,000. The
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USE OF PROCEEDS: The amount of bonds to be issued is currently estimated at $13,200,000. The
proceeds of the Bonds will be used to (a) pay the costs of forming the District; (b) pay the cost and
expense of acquisition and construction of certain public facilities required in connection with the
development of the District; (c) fund capitalized interest on a portion of the Bonds through September
1, 2019; (d) fund a Reserve Fund securing the Bonds; (e) pay costs of issuance of the Bonds; and (f)
make an initial deposit to the City’s Administrative Expense Fund . The major infrastructure (sewer,
water, storm drains, utilities, and arterial roads) to be installed by SLF to serve the property within
Improvement Area No. 1 is substantially complete.
CREDIT FEATURES: The CFD is being actively developed. Existing developments within the
Millenia community include apartments, single family homes and a hotel, which is under construction.
Currently 53% of the Improvement Area No. 1 property is considered developed and 47% considered
undeveloped. Fiscal Year 2018-19 will be the first fiscal year in which Special Taxes are levied within
Improvement Area No. 1 so there are no delinquencies of Special Tax. It is estimated that for Fiscal
Year 2018-2019 only approximately 15% of the Special Tax obligation will be the responsibility of
individual owners with the remaining 85% the responsibility of SLF and homebuilders. Shea Homes
will be responsible for approximately 33% of the total levy, CalAtlantic about 17%, KB Home about
5% and SLF Millenia about 24%. The appraised value of property to the estimated lien is estimated
at 4.62 to 1. As with most Community Facility District bonds, the bonds will not have a rating.
SB 450/GOVERNMENT CODE 5852.1: A recent change to California law now requires prior to
authorization of the issuance of bonds with a term greater than 13 months the governing body of a
public body to obtain and disclose all of the following information in a meeting open to the public:
(A) True Interest Cost of the Bonds: 4.14 %
(B) Finance Charge of the Bonds (Sum of all fees paid to third parties): $ 384,000.00
(C) Net Proceeds to be received (net of finance charges, reserves and capitalized interest, if any):
$9,880,461
(D) Total Payments Amount Through Maturity: $25,047 492
An attachment provides a breakdown of this information.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council / Legislative Body members and has
found no property holdings within 500 feet of the boundaries of the property which is the subject of
this action. Consequently, this item does not present a disqualifying real property-related financial
conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes
of the Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. This action supports
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Community, Strong and Secure Neighborhoods and a Connected Community. This action supports
two City Strategic Plan major goals: Economic Vitality, via additional commercial activities, and a
Connected Community by way of enhanced roadway improvements and pedestrian oriented facilities
and development in the EUC/Millenia area of the City.
CURRENT YEAR FISCAL IMPACT
The estimated costs of issuance associated with this financing, including costs for the underwriting,
bond counsel and financial advisor firms are contingent upon actually selling the bonds and are
payable from the bond proceeds.
ONGOING FISCAL IMPACT
The costs to administer the District, shall be paid from the proceeds of special taxes to be levied
within the District. There is, therefore, no ongoing fiscal impact on the City’s General Fund.
ATTACHMENTS
1. Indenture
2. Bond Purchase Agreement
3. Appraisal
4. Supplement to Appraisal
5. Continuing Disclosure Agreement
6. Preliminary Official Statement
7. Market Absorption Study
8. Market Absorption Study Executive Summary
Staff Contact: Alicia Granados
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60297.00053\30456320.7 1
RESOLUTION NO. ________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA), AUTHORIZING
AND PROVIDING FOR THE ISSUANCE OF SPECIAL TAX BONDS FOR
IMPROVEMENT AREA NO. 1 OF SUCH COMMUNITY FACILITIES
DISTRICT, APPROVING THE FORM OF BOND INDENTURE, BOND
PURCHASE AGREEMENT, PRELIMINARY OFFICIAL STATEMENT AND
OTHER DOCUMENTS RELATED THERETO AND AUTHORIZING CERTAIN
ACTIONS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS
WHEREAS, the City Council (the “City Council”) of the City of Chula Vista (the “City”),
did previously conduct proceedings to form and did form a community facilities district and
designate improvement areas therein for the purpose of financing the acquisition or construction of
certain public improvements pursuant to the terms and provisions of the “Mello-Roos Community
Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the
State of California (the “Act”) and the City of Chula Vista Community Facilities District Ordinance
enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of
Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the Ordinance
may be referred to collectively as the “Community Facilities District Law”), such Community
Facilities District designated as Community Facilities District No. 16-I (Millenia) (the “Community
Facilities District”) and the improvement areas were designated as “Improvement Area No. 1” and
“Improvement Area No. 2” and collectively, the “Improvement Areas”; and
WHEREAS, this City Council has previously declared its intention to issue bonds for the
Community Facilities District for each of the Improvement Areas to finance the acquisition or
construction of such improvements, such bonds to be issued pursuant to the terms and provisions of
the Act, the City of Chula Vista Statement of Goals and Policies Regarding the Establishment of
Community Facilities Districts, as amended to date (the “Goals and Policies”) and the City of Chula
Vista Debt Policy; and
WHEREAS, at this time this City Council desires to set forth the general terms and
conditions relating to the authorization, issuance and administration of such bonds for Improvement
Area No. 1 of the Community Facilities District to be designated as the “City of Chula Vista
Community Facilities District No. 16-I (Millenia) Improvement Area No. 1 2018 Special Tax
Bonds” (the “Improvement Area No. 1 Bonds”); and
WHEREAS, the forms of the following documents have been presented to and considered for
approval by this City Council:
A. Bond Indenture by and between the Community Facilities District and U.S. Bank,
National Association, as fiscalagent (the “Fiscal Agent”) setting forth the terms and
conditions relating to the issuance, sale, delivery and administration of the
Improvement Area No. 1 Bonds (the “Bond Indenture”);
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B. Bond Purchase Agreement by and between the Community Facilities District and
Stifel, Nicolaus & Company, Incorporated, the designated underwriter (the
“Underwriter”) authorizing the sale of the Improvement Area No. 1 Bonds to the
Underwriter (the “Bond Purchase Agreement”);
C. Preliminary Official Statement containing information including but not limited to
the Community Facilities District and the Improvement Area No. 1 Bonds, including
the terms and conditions thereof (the “Preliminary Official Statement”); and
D. Continuing Disclosure Agreement by and between the Community Facilities District
and Willdan Financial Services, as dissemination agent (the “Dissemination Agent”),
pursuant to which the Community Facilities District will be obligated to provide
ongoing annual disclosure relating to the Improvement Area No. 1 Bonds (the
“Continuing Disclosure Agreement”); and
WHEREAS, this City Council, with the aid of City staff, has reviewed and considered the
Bond Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement and the
Preliminary Official Statement and finds those documents suitable for approval, subject to the
conditions set forth in this resolution; and
WHEREAS, Section 5852.1 of the Government Code of the State of California (“Section
5852.1”) provides that the City Council obtain from an underwriter, financial advisor or private
lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the
Improvement Area No. 1 Bonds, good faith estimates of: (a) the true interest cost of the
Improvement Area No. 1 Bonds, (b) the finance charge of the Improvement Area No. 1 Bonds,
meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the
Improvement Area No. 1 Bonds received less the finance charge described above and any reserves or
capitalized interest paid or funded with proceeds of the Improvement Area No. 1 Bonds and (d) the
sum total of all debt service payments on the Improvement Area No. 1 Bonds calculated to the final
maturity of the Improvement Area No. 1 Bonds plus the fees and charges paid to third parties not
paid with the proceeds of the Improvement Area No. 1 Bonds; and
WHEREAS, in accordance with Section 5852.1, the City Council has obtained such good
faith estimates from Fieldman, Rolapp & Associates, Inc., the City’s municipal advisor, and such
estimates are disclosed in Exhibit A attached hereto; and
WHEREAS, all conditions, things and acts required to exist, to have happened and to have
been performed precedent to and in the issuance of the Improvement Area No. 1 Bonds as
contemplated by this resolution and the documents referred to herein exist, have happened and have
been performed or have been ordered to have been performed in due time, form and manner as
required by the laws of the State of California, including the Act and the applicable policies and
regulations of the City.
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NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS:
SECTION 1. Recitals. The above recitals are true and correct.
SECTION 2. Determinations. This legislative body hereby makes the following
determinations pertaining to the proposed issuance of the Improvement Area No. 1 Bonds:
(a) The Goals and Policies generally require that the full cash value of the properties
within Improvement Area No. 1 subject to the levy of the special taxes must be at
least four (4) times the principal amount of the Improvement Area No. 1 Bonds and
the principal amount of all other bonds outstanding that are secured by a special tax
levied pursuant to the Act on property within Improvement Area No. 1 or a special
assessment levied on property within Improvement Area No. 1 (collectively, “Land
Secured Bonded Indebtedness”). The Act authorizes the City Council, acting as the
legislative body of the Community Facilities District, to sell the Improvement Area
No. 1 Bonds only if the City Council has determined prior to the award of the sale of
the Improvement Area No. 1 Bonds that the value of such properties within
Improvement Area No. 1 will be at least three (3) times the amount of such Land
Secured Indebtedness.
The full cash value of the property within Improvement Area No. 1 which will be
subject to the special tax to pay debt service on the Improvement Area No. 1 Bonds
will be at least four (4) times the amount of the Land Secured Bonded Indebtedness
allocable to such properties.
The Goals and Policies further provide that the full cash value of each development
area for which no final subdivision map has been filed must also be at least four (4)
times the Land Secured Bonded Indebtedness allocable to each such property. Final
subdivision maps have been filed for each development area in Improvement Area
No. 1, therefore, there are no unmapped development areas remaining within
Improvement Area No. 1.
The foregoing determinations are based upon the full cash value of such properties
and developmentareas as shown upon an appraisal of the subject properties prepared
by Kitty Siino & Associates, Inc., a state certified real estate appraiser, as defined in
Business and Professions Code Section 11340(c). Such determination was made in a
manner consistent with the Goals and Policies and California Debt and Investment
Advisory Commission guidelines.
(b) The terms and conditions of the Improvement Area No. 1 Bonds as contained in the
Bond Indenture are consistent with and conform to the Goals and Policies.
(c) As a result of the current status of development of the property within Improvement
Area No. 1, the relative overall lack of diversity of ownership of property within such
Improvement Area and the need for the Underwriter to understand fully the status of
the development and other factors that affect the credit worthiness of the
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Improvement Area No. 1 Bonds, the private sale of the Improvement Area No. 1
Bonds will result in a lower overall cost to the Community Facilities District than a
sale upon sealed bid.
SECTION 3. Improvement Area No. 1 Bonds Authorized. Pursuant to the Community
Facilities District Law, this Resolution and the Bond Indenture, Improvement Area No. 1 Bonds in
an aggregate principal amount not to exceed $15,000,000 are hereby authorized to be issued. The
date, manner of payment, interest rate or rates, interest payment dates, denominations, form,
registration privileges, manner of execution, place of payment, terms of redemption and other terms,
covenants and conditions of the Improvement Area No. 1 Bonds shall be as provided in the Bond
Indenture as finally executed.
SECTION 4. Authorization and Conditions. The City Manager, the Assistant City
Manager, the Director of Finance/Treasurer and such other official or officials of the City as may be
designated in writing by this City Council or the City Manager (each, an “Authorized Officer”) are
each hereby authorized and directed to execute and deliver the final form of the various documents
and instruments described in this Resolution, with such additions thereto or changes therein as such
Authorized Officer may deem necessary and advisable provided that no additions or changes shall
authorize an aggregate principal amount of Improvement Area No. 1 Bonds in excess of
$15,000,000, an interest rate on the ImprovementArea No. 1 Bonds in excess of six percent (6.00%)
per year and an underwriter's discount in excess of one and a quarter percent (1.25%) of the par
amount of the Improvement Area No. 1 Bonds (excluding original issue discount, if any). The
approval of suchadditions or changes shall be conclusively evidenced by the execution and delivery
of such documents or instruments by an Authorized Officer, upon consultation with and review by
the City Attorney and Best Best & Krieger LLP, the Community Facilities District’s bond counsel.
SECTION 5. Bond Indenture. The form of Bond Indenture by and between the Community
Facilities District and the Fiscal Agent, with respect to the Improvement Area No. 1 Bonds as
presented to this City Council and on file with the City Clerk is hereby approved. An Authorized
Officer is hereby authorized and directed to cause the same to be completed and executed on behalf
of the Community Facilities District, subject to the provisions of Section 4 above.
SECTION 6. Official Statement and Continuing DisclosureAgreement. The City Council
hereby approves the form of the Preliminary Official Statement as presented to this City Council and
on file with the City Clerk, together with any changes therein or additions thereto deemed advisable
by the Director of Finance/Treasurer or, in the absence of the Director of Finance/Treasurer, another
Authorized Officer. Pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the
“Rule”) the Director of Finance/Treasurer or, in the absence of the Director of Finance/Treasurer,
another Authorized Officer is authorized to determine when the Preliminary Official Statement is
deemed final, and the Director of Finance/Treasurer or such other Authorized Official is hereby
authorized and directed to provide written certification thereof. The execution of the final Official
Statement, which shall include such changes and additions thereto deemed advisable by the Director
of Finance/Treasurer or, in the absence of the Director of Finance/Treasurer, another Authorized
Officer pursuant to the Rule, shall be conclusive evidence of the approval of the final Official
Statement by the Community Facilities District. The City Council hereby authorizes the distribution
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60297.00053\30456320.7 5
of the final Official Statement by the Underwriter as the initial purchaser of the Improvement Area
No. 1 Bonds.
The form of Continuing Disclosure Agreement by and between the Community Facilities
District and the Dissemination Agent as presented to this City Council and on file with the City
Clerk is hereby approved. An Authorized Officer is hereby authorized and directed to cause the same
to be completed and executed on behalf of the Community Facilities District, subject to the
provisions of Sections 3 and 4 above.
SECTION 7. Sale of Improvement Area No. 1 Bonds. This City Council hereby authorizes
and approves the negotiated sale of the Improvement Area No. 1 Bonds to the Underwriter. The form
of the Bond Purchase Agreement is hereby approved and an Authorized Officer is hereby authorized
and directed to execute the Bond PurchaseAgreement on behalf of the Community Facilities District
upon the execution thereof by the Underwriter, subject to the provisions of Section 3 above.
SECTION 8. Improvement Area No. 1 Bonds Prepared and Delivered. Upon the execution
of the Bond Purchase Agreement, the Improvement Area No. 1 Bonds shall be prepared,
authenticated and delivered, all in accordance with the applicable terms of the Community Facilities
District Law and the Bond Indenture, and any Authorized Officer and other responsible City
officials, acting for and on behalf of the Community Facilities District, are hereby authorized and
directed to take such actions as are required under the Bond Purchase Agreement and the Bond
Indenture to complete all actions required to evidence the delivery of the Improvement Area No. 1
Bonds upon the receipt of the purchase price thereof from the Underwriter.
SECTION 9. Actions. All actions heretofore taken by the officers and agents of the City
with respect to the establishment of the Community Facilities District and the sale and issuance of
the Improvement Area No. 1 Bonds are hereby approved, confirmed and ratified, and the proper
officers of the City, acting for and on behalf of the Community Facilities District, are hereby
authorized and directed to do any and all things and take any and all actions and execute any and all
certificates, agreements, contracts, and other documents, which they, or any of them, may deem
necessary or advisable in order to consummate the lawful issuance and delivery of the Improvement
Area No. 1 Bonds in accordance with the Community Facilities District Law, this Resolution, the
Bond Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement, and any
certificate, agreement, contract, and other document described in the documents herein approved.
SECTION 10. Effective Date. This resolution shall take effect from and after its adoption.
Presented by Approved as to form by
David Bilby Glen R. Googins
Director of Finance/Treasurer City Attorney
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EXHIBIT A
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60297.00053\30447001.9
BOND INDENTURE
by and between
Community Facilities District No. 16-I
(Millenia)
and
U.S. Bank National Association,
as Fiscal Agent
Dated as of __________ 1, 2018
Re: $_________
City of Chula Vista
Community Facilities District No. 16-I
(Millenia)
Improvement Area No. 1
2018 Special Tax Bonds
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS....................................................................................................1
SECTION 1.01 Definitions.........................................................................................1
ARTICLE II GENERAL AUTHORIZATION AND TERMS ..............................................12
SECTION 2.01 Amount, Issuance and Purpose.......................................................12
SECTION 2.02 Type and Nature of Bond................................................................12
SECTION 2.03 Terms of the Bonds.........................................................................13
SECTION 2.04 Description of Bonds; Interest Rates ..............................................13
SECTION 2.05 Payment...........................................................................................14
SECTION 2.06 Execution of Bonds.........................................................................14
SECTION 2.07 Order to Print and Authenticate Bonds...........................................14
SECTION 2.08 Books of Registration; Book Entry System....................................15
SECTION 2.09 Exchange of Bonds.........................................................................16
SECTION 2.10 Negotiability, Registration and Transfer of Bonds.........................16
SECTION 2.11 Authentication.................................................................................17
ARTICLE III FUNDS AND ACCOUNTS.............................................................................17
SECTION 3.01 Establishment of Special Funds......................................................17
SECTION 3.02 Special Tax Fund............................................................................17
SECTION 3.03 Debt Service Fund........................................................................... 19
SECTION 3.04 Costs of Issuance Fund ...................................................................19
SECTION 3.05 Project Fund....................................................................................19
SECTION 3.06 Reserve Fund ..................................................................................20
SECTION 3.07 Rebate Fund....................................................................................21
SECTION 3.08 Redemption Fund............................................................................21
SECTION 3.09 Administrative Expense Fund.........................................................21
SECTION 3.10 Investment of Funds........................................................................21
SECTION 3.11 Disposition of Bond Proceeds.........................................................22
ARTICLE IV REDEMPTION.................................................................................................23
SECTION 4.01 Notice of Redemption.....................................................................23
SECTION 4.02 Effect of Redemption......................................................................24
SECTION 4.03 Redemption Prices and Terms........................................................25
ARTICLE V SUPPLEMENTAL INDENTURES.................................................................. 27
SECTION 5.01 Amendments or Supplements.........................................................27
ARTICLE VI MISCELLANEOUS CONDITIONS................................................................28
SECTION 6.01 Ownership of Bonds .......................................................................28
SECTION 6.02 Mutilated, Lost, Destroyed or Stolen Bonds...................................28
SECTION 6.03 Cancellation of Bonds.....................................................................29
SECTION 6.04 Covenants........................................................................................29
SECTION 6.05 Arbitrage Certificate .......................................................................32
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SECTION 6.06 Defeasance......................................................................................32
SECTION 6.07 Fiscal Agent....................................................................................34
SECTION 6.08 Liability of Fiscal Agent .................................................................35
SECTION 6.09 Provisions Constitute Contract .......................................................36
SECTION 6.10 CUSIP Numbers..............................................................................36
SECTION 6.11 Severability.....................................................................................36
SECTION 6.12 Unclaimed Money...........................................................................37
SECTION 6.13 Nonpresentment of Bonds............................................................... 37
SECTION 6.14 Continuing Disclosure ....................................................................37
SECTION 6.15 Execution of Documents and Proof of Ownership by Owners.......37
SECTION 6.16 Notices to and Demands on District and Fiscal Agent...................38
SECTION 6.17 Applicable Law...............................................................................38
SECTION 6.18 Payment on Business Day...............................................................38
SECTION 6.19 Counterparts....................................................................................38
ARTICLE VII BOND FORM...................................................................................................39
SECTION 7.01 Form of Bonds................................................................................39
SECTION 7.02 Temporary Bonds............................................................................39
ARTICLE VIII EVENT OF DEFAULT....................................................................................39
SECTION 8.01 Events of Default............................................................................39
SECTION 8.02 Application of Revenues and Other Funds after Default................40
EXHIBIT “A” – FORM OF BOND..........................................................................................A-1
EXHIBIT “B” – FORM OF REQUISITION FOR COST OF ISSUANCE...............................B-1
EXHIBIT “C” – FORM OF REQUISITION FOR COSTS FROM ACQUISITION
ACCOUNT......................................................................................................C-1
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BOND INDENTURE
This Bond Indenture dated as of __________ 1, 2018, is entered into by and between
Community Facilities District No. 16-I (Millenia), a community facilities district organized and
existing under the laws of the State, and U.S. Bank National Association, as Fiscal Agent, to
establish the terms and conditions and pertaining to the issuance of the Bonds as defined herein.
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. As used in this Indenture, the following terms shall have the
following meanings:
“Acquisition/Financing Agreement” means that certain Acquisition/Financing Agreement
dated as of February 6, 2018 by and between the City, Community Facilities District No. 16-I
(Millenia), and SLF IV- Millenia, LLC, a Delaware limited liability company, as such agreement
may be amended from time to time.
“Act” means the “Mello-Roos Community Facilities Act of 1982”, as amended, being
Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California.
“Administrative Expense Fund” means the fund by that name established pursuant to
Section 3.01 hereof.
“Administrative Expenses” means the expenses directly related to the administration of the
District, including, but not limited to, the following: the costs of computing the Improvement Area
No. 1 Special Taxes and preparing the annual Improvement Area No. 1 Special Tax collection
schedules (whether by the City or a designee thereof or both); the costs of collecting the
Improvement Area No. 1 Special Taxes (whether by the County, the City or otherwise); the costs of
remitting the Improvement Area No. 1 Special Taxes to the Fiscal Agent; the costs of the Fiscal
Agent (including its legal counsel) in the discharge of the duties of the Fiscal Agent required under
this Indenture; the costs of the City, the District or any designee thereof of complying with the
arbitrage rebate requirements or incurred in participating in and responding to an audit by the
Internal Revenue Service; the costs of the City, the District, or any designee thereof of complying
with City or District disclosure requirements associated with applicable federal or state securities
laws and of the Act or otherwise agreed to by the City or property owners developing within
Improvement Area No. 1 ; the costs associated with preparing Improvement Area No. 1 Special Tax
disclosure statements and responding to public inquiries regarding the Improvement Area No. 1
Special Taxes; the costs of the City, District or any designee thereof related to an appeal of the
Improvement Area No. 1 Special Tax; and the costs of any credit enhancement obtained by the City
or the District (but excluding the costs of any credit enhancement required to be provided by SLF IV
– Millenia, LLC and/or its successor). Administrative Expenses shall also include Delinquency
Collection Expenses.
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“Administrative Expense Requirement”means an annual amount equal to $75,000, or such
lesser amount as may be designated by written instruction from an Authorized Representative to the
Fiscal Agent, to be allocated as the first priority of Improvement Area No. 1 Special Taxes received
each Fiscal Year for the payment of Administrative Expenses.
“Annual Debt Service”means, for each Bond Year, the sum of (a) the interest payable on the
Outstanding Bonds in such Bond Year, and (b) the principal amount of the Outstanding Bonds
scheduled to be paid in such Bond Year, including from mandatory sinking fund payments.
“Assistant Director of Finance” means the Assistant Director of Finance of the City.
“Authorized Representative” means the City Manager, Director of Finance/Treasurer or
Assistant Director of Finance of the City, acting on behalf of the District, or any other person
designated in writing by the City Manager or the Director of Finance/Treasurerand authorized to act
on behalf of the District under or with respect to this Indenture and all other agreements related
hereto.
“Average Annual Debt Service” means the average annual debt service on the Bonds based
upon a Bond Year during the term of the Bonds.
“Bond Counsel”means an attorney or firm of attorneys, selected by the District, of nationally
recognized standing in matters pertaining to the tax treatment of interest on bonds issued by states
and their political subdivisions, duly admitted to the practice of law before the highest court of the
State.
“Bondowner”or “Owner”, or any similar term, means any person who shallbe the registered
owner or his duly authorized attorney, trustee, representative or assign of any Outstanding Bond
which shall at the time be registered.
“Bonds” means the $_________ City of Chula Vista Community Facilities District 16-I
(Millenia) Improvement Area No. 1 2018 Special Tax Bonds issued pursuant to this Indenture.
“Bond Year”means each twelve-month period extending from September 2 in one calendar
year to September 1 of the succeeding calendar year, except in the case of the initial Bond Year
which shall be the period from the Delivery Date to and including September 1, 2018.
“Business Day” means a day that is not a Saturday or a Sunday or a day of the year on which
banks in New York, New York and Los Angeles, California, or where the Principal Corporate Trust
Office is located, are not required or authorized to remain open.
“Capitalized Interest Sub-Account” means the sub-account by that name within the Interest
Account of the Debt Service Fund established pursuant to Section 3.01 hereof.
“City” means the City of Chula Vista, California.
“City Manager”means the City Manager of the City, acting for and on behalf of the District.
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“Code” means the Internal Revenue Code of 1986, as amended.
“Costs of Issuance”means all of the costs of formation of the District and the costs of issuing
the Bonds, including but not limited to, all printing and document preparation expenses in
connection with this Indenture and any supplemental indenture, the Bonds, and any and all other
agreements, instruments, certificates or other documents issued in connection therewith; any
computer and other expenses incurred in connection with the Bonds; the initial fees and expenses of
the Fiscal Agent (including without limitation, acceptance fees and first annual fees payable in
advance); and other fees and expenses incurred in connection with the formation of the District and
the issuance of the Bonds, to the extent such fees and expenses are approved by the District.
“Costs of Issuance Fund”means the fund by that name established pursuant to Section 3.01
hereof.
“Comptroller of the Currency” shall mean the Comptroller of the Currency of the United
States.
“Debt Service Fund”means the fund created and established pursuant to Section 3.01 hereof.
“Debt Service on Parity Refunding Obligations” means the gross debt service due in any
Bond Year on any refunding bonds or other refunding obligations which have, or purport to have, a
lien upon the Net Improvement Area No. 1 Special Tax Revenues on a parity with the lien of the
Bonds.
“Delinquency Collection Expenses” means those fees and expenses of the District incurred
by or on behalf of the District in or related to the collection of delinquent Improvement Area No. 1
Special Taxes.
“Delinquency Proceeds” means the amounts collected from the redemption of delinquent
Improvement Area No. 1 Special Taxes including the penalties and interest thereon and from the sale
of property sold as a result of the foreclosure of the lien of the Improvement Area No. 1 Special Tax
resulting from the delinquency in the payment of Improvement Area No. 1 Special Taxes due and
payable on such property.
“Delivery Date” means the date on which the Bonds are issued and delivered to the initial
purchaser thereof.
“Depository” shall mean DTC and its successors and assigns or if (a) the then Depository
resigns from its functions as securities depository of the Bonds, or (b) the District discontinues use of
the Depository pursuant to this Indenture, any other securities depository which agrees to follow
procedures required to be followed by a securities depository in connection with the Bonds and
which is selected by the Treasurer.
“Director of Finance/Treasurer”means the Director of Finance/Treasurerof the City, acting
for and on behalf of the District.
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“District”means Community Facilities District No. 16-I(Millenia) situated in and formed by
the City of Chula Vista, California.
“DTC”shall mean The Depository Trust Company, New York, New York, and its successors
and assigns.
“Fiscal Agent” means U.S. Bank National Association, and any successor thereto.
“Fiscal Year” means the 12 month period beginning July 1 of each year and terminating on
June 30 of the following year, or any other annual accounting period hereinafter selected and
designated by the District as its fiscal year in accordance with applicable law.
“Government Obligations” means obligations described in Paragraph 1 of the definition of
Permitted Investments.
“Gross Proceeds” has the meaning ascribed to such term in Section 148(f)(6) of the Code.
“Improvement Area No. 1” means Improvement Area No. 1 of the District.
“Improvement Area No. 1 Special Tax” means the Improvement Area No. 1 Special Tax
authorized to be levied in the District pursuant to the Act and the Improvement Area No. 1 Special
Tax RMA.
“Improvement Area No. 1 Special Tax Revenues” means (a) the proceeds of the
Improvement Area No. 1 Special Tax levied by the District within Improvement Area No. 1 of the
District pursuant to the Improvement Area No.1 Special Tax RMA and received by the District, and
(b) the Delinquency Proceeds.
“Improvement Area No. 1 Special Tax RMA” means the rate and method of apportionment
of the Improvement Area No. 1 Special Tax originally authorized to be levied on property within
Improvement Area No. 1 of the District as approved at the special election held within Improvement
Area No. 1 of the District on September 13, 2016, and as it may be modified from time to time in
accordance with the Act.
“Indenture” means this Bond Indenture, as amended or supplemented pursuant to the terms
hereof.
“Independent Accountant” means any certified public accountant or firm of such certified
public accountants appointed and paid by the District, and who, or each of whom -
1. is in fact independent and not under domination of the District or the City;
2. does not have any substantial interest, direct or indirect, in the District or the
City; and
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3. is not an officer or employee of the District or the City, but who may be
regularly retained to make annual or other audits of the books of or reports to the City or the
District.
“Information Services” the Electronic Municipal Market Access System (referred to as
“EMMA”), a facility of the Municipal Securities Rulemaking Board (at http://emma.msrb.org); and,
in accordance with then current guidelines of the Securities and Exchange Commission, and such
other addresses and/or such other services providing information with respect to called bonds as the
District may designate in writing to the Fiscal Agent.
“Interest Payment Date” means March 1 and September 1 of each year, commencing
September 1, 2018.
“Investment Agreement”means any investment satisfying the requirements of Paragraph 11
of the definition of Permitted Investments.
“Legislative Body” means the City Council of the City, acting as the legislative body of the
District.
“Maximum Annual Debt Service”means, as of the date of any calculation, the largest Annual
Debt Service during the current or any future Bond Year.
“Moody’s” means Moody’s Investors Service, Inc., its successors and assigns.
“Net Improvement Area No. 1 Special Tax Revenues” means the Improvement Area No. 1
Special Tax Revenues minus amounts applied annually to fund the Administrative Expense
Requirement.
“Nominee” shall mean the nominee of the Depository which may be the Depository, as
determined from time to time by the Depository.
“Outstanding” means as to the Bonds, all of the Bonds, except:
1. Bonds theretofore canceled or surrendered for cancellation in accordance with
Section 6.03 hereof;
2. Bonds for the transfer or exchange of or in lieu of or in substitution for which
other Bonds shall have been authenticated and delivered by the Fiscal Agent pursuant to the
terms hereof; and
3. Bonds for the payment or redemption of which monies shall have been
theretofore deposited in trust (whether upon or prior to the maturity or the redemption date of
such Bonds).
“Participant” shall mean a member of or participant in the Depository.
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“Permitted Investments”means any of the following which at the time of investment are legal
investments under the laws of the State for the moneys proposed to be invested therein (the Fiscal
Agent shall be entitled to rely upon any written investment direction from an Authorized
Representative of the District as a certification to the Fiscal Agent that such investment constitutes a
Permitted Investment):
1. A. Direct obligations (other than an obligation subject to variation in
principal payment) of the United States of America (“United States Treasury Obligations”);
B. Obligations fullyand unconditionally guaranteed as to timely payment
of principal and interest by the United States of America;
C. Obligations fully and unconditionally guaranteed as to timely payment
of principal and interest by any agency or instrumentality of the United States of
America when such obligations are backed by the full faith and credit of the United
States of America, or
D. Evidences of ownership of proportionate interests in future interest
and principal payments on obligations described above held by a bank or trust
company as custodian, under which the owner of the investment is the real party in
interest and has the right to proceed directly and individually against the obligor and
the underlying government obligations are not available to any person claiming
through the custodian or to whom the custodian may be obligated.
2. Federal Housing Administration debentures.
3. The listed obligations of government-sponsored agencies which are not
backed by the full faith and credit of the United States of America:
A. Federal Home Loan Mortgage Corporation (FHLMC)
(1) Participation certificates (excluded are stripped mortgage
securities which are purchased at prices exceeding their principal amounts)
(2) Senior Debt obligations
B. Farm Credit Banks (formerly: Federal Land Banks, Federal
Intermediate Credit Banks and Banks for Cooperatives)
(1) Consolidated system-wide bonds and notes
C. Federal Home Loan Banks (FHL Banks)
(1) Consolidated debt obligations
D. Federal National Mortgage Association (FNMA)
(1) Senior debt obligations
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(2) Mortgage-backed securities (excluded are stripped mortgage
securities which are purchased at prices exceeding their principal amounts)
E. Student Loan Marketing Association (SLMA)
(1) Senior debt obligations (excluded are securities that do not
have a fixed par value and/or whose terms do not promise a fixed dollar
amount at maturity or call date)
F. Financing Corporation (FICO)
(1) Debt obligations
G. Resolution Funding Corporation (REFCORP)
(1) Debt obligations
4. Unsecured certificates of deposit, time deposits, and bankers’ acceptances
(having maturities of not more than 30 days) of any bank the short-term obligations of which
are rated “A-1” or better by S&P.
5. Deposits the aggregate amount of which are fully insured by the Federal
Deposit Insurance Corporation (FDIC), in banks which have capital and surplus of at least $5
million.
6. Commercial paper (having original maturities of not more than 270 days rated
“A-1” by S&P and “Prime-1” by Moody’s.
7. Money market funds rated “AAm-1” or “AAm-G” by S&P, or better.
8. State Obligations, which means:
A. Direct general obligations of any state of the United States of America
or any subdivision or agency thereof to which is pledged the full faith and credit of a
state the unsecured general obligation debt of which is rated “A3” by Moody’s and
“A”by S&P, or better, or any obligation fully and unconditionally guaranteed by any
state, subdivision or agency whose unsecured general obligation debt is so rated.
B. Direct general short-term obligations of any state agency or
subdivision or agency thereof described in (A) above and rated “A-1+” by S&P and
“Prime-1” by Moody’s.
C. Special Revenue Bonds (as defined in the United States Bankruptcy
Code) of any state, state agency or subdivision described in A. above and rated “AA”
or better by S&P and “AA” or better by Moody’s.
9. Pre-refunded municipal obligations rated “AAA” by S & P and “AAA” by
Moody’s meeting the following requirements:
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A. the municipal obligations are (1) not subject to redemption prior to
maturity or (2) the trustee for the municipal obligations has been given irrevocable
instructions concerning their call and redemption and the issuer of the municipal
obligations has covenanted not to redeem such municipal obligations other than as set
forth in such instructions;
B. the municipal obligations are secured by cash or United States
Treasury Obligations which may be applied only to payment of the principal of,
interest and premium on such municipal obligations;
C. the principal of and interest on the United States Treasury Obligations
(plus any cash in the escrow) has been verified by the report of independent certified
public accountants to be sufficient to pay in full all principal of, interest, and
premium, if any, due and to become due on the municipal obligations
(“Verification”);
D. the cash or United States Treasury Obligations serving as security for
the municipal obligations are held by an escrow agent or trustee in trust for owners of
the municipal obligations;
E. no substitution of a United States Treasury Obligation shall be
permitted except with another United States Treasury Obligation and upon delivery
of a new Verification; and
F. the cash or United States Treasury Obligations are not available to
satisfy any other claims, including those by or against the trustee or escrow agent.
10. Repurchase agreements:
With (1) any domestic bank, or domestic branch of a foreign bank, the long term debt
of which is rated at least “A” by S&P and Moody’s; or (2) any broker-dealer with “retail
customers” or a related affiliate thereof which broker-dealer has, or the parent company
(which guarantees the provider) of which has, long-term debt rated at least “A”by S&P and
Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors
Protection Corporation, or (3) any other entity rated “A” or better by S&P and Moody’s,
provided that:
A. The market value of the collateral is maintained at levels and upon
such conditions as would be acceptable to S&P and Moody’s to maintain an “A”
rating in an “A” rated structured financing (with a market value approach);
B. The Fiscal Agent or a third party acting solely as agent therefor or for
the District (the “Holder of the Collateral”) has possession of the collateral or the
collateral has been transferred to the Holder of the Collateral in accordance with
applicable state and federal laws (other than by means of entries on the transferor’s
books);
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C. The repurchase agreement shall state and an opinion of counsel shall
be rendered at the time such collateral is delivered that the Holder of the Collateral
has a perfected first priority security interest in the collateral, any substituted
collateral and all proceeds thereof (in the case of bearer securities, this means the
Holder of the Collateral is in possession);
D. The repurchase agreement shall provide that if during its term the
provider’s rating by either Moody’s or S&P is withdrawn or suspended or falls below
“A-”by S&P or “A3”by Moody’s, as appropriate, the provider must, at the direction
of the District or the Fiscal Agent, within 10 days of receipt of such direction,
repurchase all collateral and terminate the agreement, with no penalty or premium to
the District or Fiscal Agent.
Notwithstanding the above, collateral levels need not be as specified in “A”above, so
long as such collateral levels are 103% or better and the provider is rated at least “A”by S&P
and Moody’s, respectively.
11. Investment agreements with a domestic or foreign bank or corporation the
long-term debt or financial strength of which, it or its guarantor is rated at least “AA-” by
S&P and “Aa3” by Moody’s; provided that, by the terms of the investment agreement:
A. the invested funds are available for withdrawal without penalty or
premium, upon not more than seven days’ prior notice; the District and the Fiscal
Agent hereby agree to give or cause to be given notice in accordance with the terms
of the investment agreement so as to receive funds thereunder with no penalty or
premium paid;
B. the investment agreement shall state that it is the unconditional and
general obligation of, and is not subordinated to any other obligation of, the provider
thereof; or, in the case of a bank, that the obligation of the bank to make payments
under the agreement ranks pari passu with the obligations of the bank to its other
depositors and its other unsecured and unsubordinated creditors;
C. the District and the Fiscal Agent receives the opinion of domestic
counsel that such investment agreement is legal, valid, binding and enforceable upon
the provider in accordance with its terms and of foreign counsel (if applicable);
D. the investment agreement shall provide that if during its term
(1) the provider’s rating by either S&P or Moody’s falls below
“AA-”or “Aa3”, respectively, the provider shall, at its option, within 10 days
of receipt of publication of such downgrade, either (a) collateralize the
investment agreement by delivering or transferring in accordance with
applicable state and federal laws (other than by means of entries on the
provider’s books) to the District, the Fiscal Agent or a Holder of the
Collateral free and clear of any third-party liens or claims the market value of
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which collateral is maintained at levels and upon such conditions as would be
acceptable to S & P and Moody’s to maintain an “A” rating in an “A” rated
structured financing (with a market value approach); or (b) transfer and
assign the investment agreement to a then qualifying counterparty with
ratings specified above; and
(2) the provider’s rating by either S&P or Moody’s is withdrawn
or suspended or falls below “A-”or “A3”, respectively, the provider must, at
the direction of the District or the Fiscal Agent, within 10 days of receipt of
such direction, repay the principal of and accrued but unpaid interest on the
investment;
E. The investment agreement shall state and an opinion of counsel shall
be rendered, in the event collateral is required to be pledged by the provider under the
terms of the investment agreement, at the time such collateral is delivered, that the
Holder of the Collateral has a perfected first priority security interest in the collateral,
any substituted collateral and all proceeds thereof (in the case of bearer securities,
this means the Holder of the Collateral is in possession);
F. the investment agreement must provide that if during its term
(1) the provider shall default in its payment obligations, the
provider’s obligations under the investment agreement shall, at the direction
of the District or the Fiscal Agent, be accelerated and amounts invested and
accrued but unpaid interest thereon shall be repaid to the District or Fiscal
Agent, as appropriate, and
(2) the provider shall become insolvent, not pay its debts as they
become due, be declared or petition to be declared bankrupt, etc. (“Event of
Insolvency”), the provider’s obligations shall automatically be accelerated
and amounts invested and accrued but unpaid interest thereon shall be repaid
to the District or Fiscal Agent, as appropriate.
12. The Local Agency Investment Fund (LAIF) administered by the treasurer of
the State to the extent such deposits remain in the name of and control of the Fiscal Agent.
Whenever reference is made in this definition of Permitted Investments to “collateral,”
collateral shall be limited to (i) cash and securities issued or guaranteed by the United States
Government, including United States Treasury obligations and any other obligations the timely
payment of the principal of and interest on which are guaranteed by the United States Government,
and (ii) bonds, notes, debentures, obligations or other evidences of indebtedness issued or guaranteed
by the Government National Mortgage Association, Federal National Mortgage Association or
Federal Home Loan Mortgage Corporation, or any other agency or instrumentality of the United
States or America including but not limited to, mortgage participation certificates, mortgage pass-
through certificates, and other mortgage-backed securities.
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“Prepayments”means Improvement Area No. 1 Special Tax Revenues identified to the Fiscal
Agent by an Authorized Representative as representing a prepayment of the Improvement Area No. 1
Special Tax.
“Principal Corporate Trust Office” means the office of the Fiscal Agent at 633 West Fifth
Street, 24th Floor, Los Angeles, California 90071 or such other offices as may be specified to the
District by the Fiscal Agent in writing; provided, however for transfer, registration, exchange,
payment and surrender of Bonds means care of the corporate trust office of U.S. Bank National
Association in St. Paul, Minnesota or such other address specified by the Fiscal Agent to the District
in writing.
“Project” means the public improvements as set forth and described in Exhibit A to the
Acquisition/Financing Agreement.
“Project Costs”means all expenses of and incidental to the construction, acquisition, or both,
of the Project.
“Project Fund” means the fund by that name established pursuant to Section 3.01 hereof.
“Rebate Fund” means the fund by that name established pursuant to Section 3.01 hereof.
“Record Date” shall mean the fifteenth (15th) calendar day of the month immediately
preceding an Interest Payment Date.
“Redemption Fund”means the fund by that name established pursuant to Section 3.01 hereof.
“Registration Books” shall have the meaning given such term in Section 2.08 hereof.
“Regulations”means the regulations promulgated under the Internal Revenue Code of 1986,
as amended.
“Reserve Fund” means the fund by that name established pursuant to Section 3.01 hereof.
“Reserve Requirement” means an amount initially equal to $[_________] which amount
shall, as of any date of calculation, be equal to the least of (i) Maximum Annual Debt Service for the
Bonds, (ii) one hundred twenty-five percent (125%) of Average Annual Debt Service for the Bonds,
(iii) ten percent (10%) of the original issue price of the Bonds calculated in accordance with Treasury
Regulations Section 1.148-2(f)(1) and (iv) $[__________].
“Securities Depository”means, as of the DeliveryDate, The Depository Trust Company, 711
Stewart Avenue, Garden City, New York 11530 and, in accordance with then current guidelines of
the Securities and Exchange Commission, such other addressees providing depository services with
respect to bonds as the District may designate in writing to the Fiscal Agent.
“Special Tax Consultant”means any person or firm possessing demonstrated experience and
expertise in the preparation of special tax formulas and/or the administration of special taxes levied
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for community facilities districts. Any such person or firm shall be appointed and paid by the District
and who, or each of whom –
1. is in fact independent and not under domination of the District or the City;
2. does not have any substantial interest, direct or indirect, in the District or the
City; and
3. is not an officer or employee of the District or the City, but who may be
regularly retained by the City or other community facilities districts formed by the City to
administer the levy of special taxes within such community facilities districts.
“Special Tax Fund”means the fund by that name established pursuant to Section 3.01 hereof.
“Standard & Poor’s” or “S&P” means S&P Global Ratings, its successors and assigns.
“State” means the State of California.
“Supplemental Indenture”means any bond indenture then in full force and effect which has
been duly approved by resolution of the Legislative Body under and pursuant to the Act at a meeting
of the Legislative Body duly convened and held, at which a quorum was present and acted thereon,
amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental
Indenture is specifically authorized hereunder.
“Tax Certificate”means the certificate delivered by the District on the Delivery Date relating
to the requirements of Section 148 of the Code, as it may be amended and supplemented from time
to time.
“Tax Exempt” means, with reference to a Permitted Investment, a Permitted Investment the
interest earnings on which are excludable from gross income for federal income tax purposes
pursuant to Section 103(a) of the Code, other than one described in Section 57(a)(5)(C) of the Code.
“Term Bonds”means the Bonds maturing on September 1, 20__ and on September 1, 20__.
“Treasurer” means the Treasurer of the City acting for and on behalf of the District.
“Yield” has the meaning assigned to such term for purposes of Section 148(f) of the Code.
ARTICLE II
GENERAL AUTHORIZATION AND TERMS
SECTION 2.01 Amount, Issuance and Purpose. Pursuant to the provisions of the Act, the
Legislative Body has authorized the issuance of the Bonds in an aggregate principal amount of
$_________. The Bonds shall be designated City of Chula Vista Community Facilities District No.
16-I (Millenia) Improvement Area No. 1 2018 Special Tax Bonds. The purpose of the Bonds shall
be to (a) pay for the acquisition or construction of the Project, (b) fund the Reserve Fund, (c) fund
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capitalized interest on a portion of the Bonds through September 1, 2019 and (d) pay the Costs of
Issuance.
SECTION 2.02 Type and Nature of Bond. The Bonds and interest thereon, together with
any premium paid thereon upon redemption, are not obligations of the City, but are limited
obligations of the District secured by and payable from an irrevocable first lien on the Net
Improvement Area No. 1 Special Tax Revenues and on the monies in the funds and accounts
established herein (including the investment earnings thereon) with the exception of the Project
Fund, the Rebate Fund and the Administrative Expense Fund. Except for the Net Improvement Area
No. 1 Special Tax Revenues, neither the faith and credit nor the taxing power of the District or the
City is pledged for the payment of the Bonds or the interest thereon, and no Owner of the Bonds may
compel the exercise of taxing power by the District, except as to the Improvement Area No. 1
Special Taxes, or the City or the forfeiture of any of their property. The principal of and interest on
the Bonds and premiums upon the redemption thereof, if any, are not a debt of the District or the
City, the State of California or any of its political subdivisions within the meaning of any
constitutional or statutory limitation or restriction. The Bonds are not a legal or equitable pledge,
charge, lien or encumbrance, upon any of the District’s property, or upon any of its income,receipts
or revenues, except the amounts which are, under this Indenture and the Act, set aside for the
payment of the Bonds and interest thereon and neither the members of the Legislative Body, the City
Council of the City, nor any persons executing the Bonds are liable personally on the Bonds by
reason of their issuance.
Notwithstanding anything contained in this Indenture, the District shall not be required to
advance any money derived from any source of income other than the Net Improvement Area No.1
Special Tax Revenues for the payment of the interest on or the principal of the Bonds or for the
performance of any covenants herein contained.
Nothing in this Indenture or in any Supplemental Indenture shall preclude the redemption
prior to maturity of any Bonds subject to call and redemption or the payment of the Bonds from
proceeds of the refunding bonds issued under the Act or under any other law of the State.
SECTION 2.03 Terms of the Bonds. The Bonds shall mature on September 1 in the
years, and in the respectiveprincipal amounts set forth opposite such years, and shall bear interest at
the respective rates per annum, as follows:
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Maturity Date
(September 1)
Principal
Amount
Interest
Rate (%)
Maturity Date
(September 1)
Principal
Amount
Interest
Rate (%)
$$
SECTION 2.04 Description of Bonds; Interest Rates. The Bonds shall be issued in fully
registered form in denominations of $5,000 or any integral multiple thereof within a single maturity
and shall be numbered as desired by the Fiscal Agent. The Bonds shall be dated as of the Delivery
Date, and shall mature and be payable on September 1 in the years and in the aggregate principal
amounts and shall bear interest at the rates set forth in this Indenture. The Bondsshall mature and be
payable in the years and in the aggregate principal amounts and shall bear interest at the rates set
forth in Section 2.03. Interest shall be payable with respect to each Bond on each Interest Payment
Date (commencing September 1, 2018), until the principal sum of that Bond has been paid; provided,
however, that if at the maturity date of any Bond (or if the same is redeemable and shall be duly
called for redemption, then at the date fixed for redemption) funds are available for the payment or
redemption thereof, in full accordance with the terms of this Indenture, such Bond shall then cease to
bear interest.
SECTION 2.05 Payment. The principal of and interest on the Bonds shall be payable in
lawful money of the United States of America. The principal of the Bonds and any premium due
upon the redemption thereof shall be payable upon presentation and surrender thereof at maturity or
the earlier redemption thereof at the Principal Corporate Trust Office of the Fiscal Agent.
Interest on any Bond shallbe payable from the Interest Payment Date next preceding the date
of authentication of that Bond, unless (i) such date of authentication is an Interest Payment Date, in
which event interest shall be payable from such date of authentication, (ii) the date of authentication
is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event
interest shall be payable from the Interest Payment Date immediately succeeding the date of
authentication or (iii) the date of authentication is prior to the close of business on the first Record
Date, in which event interest shall be payable from the date of the Bonds; provided, however, that if
at the time of authentication of a Bond, interest is in default, interest on that Bond shall be payable
from the last Interest Payment Date to which the interest has been paid or made available for
payment. Interest on any Bond shall be paid to the person whose name shall appear in the books of
registration as required by Section 2.08 as the ownerof such Bond as of the close of business on the
Record Date immediately preceding such Interest Payment Date. Such interest shall be paid by
check of the Fiscal Agent mailed to such Bondowner at his or her address as it appears on the books
of registration as required by Section 2.08 or, upon the request in writing prior to the Record Date of
a Bondowner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in
immediately available funds to an account in the United States designated by such Owner. Interest
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with respect to each Bond shall be computed using a year of 360 days comprised of twelve 30-day
months.
SECTION 2.06 Execution of Bonds. The Bonds shall be executed manually or in
facsimile by the Mayor of the City and countersigned by the City Clerk of the City, acting on behalf
of the District. The Bonds shall then be delivered to the Fiscal Agent, for authentication and
registration. In case an officer who shall have signed or attested to any of the Bonds by facsimile or
otherwise shall cease to be such officer before the authentication, delivery and issuance of the Bonds,
such Bonds nevertheless may be authenticated, delivered and issued, and upon such authentication,
delivery and issue, shall be as binding as though those who signed and attested the same had
remained in office.
SECTION 2.07 Order to Print and Authenticate Bonds. The Director of
Finance/Treasurer is hereby instructed to cause Bonds in the form as set forth herein, to be printed,
and to proceed to cause said Bonds to be authenticated and delivered to an authorized representative
of the purchaser, upon payment of the purchase price as set forth in the purchase contract for the sale
of the Bonds.
SECTION 2.08 Books of Registration; Book Entry System. There shall be kept by the
Fiscal Agent, sufficient books for the registration and transfer of the Bonds (the “Registration
Books”) and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable
regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said
register, Bonds as hereinbefore provided. The ownership of the Bonds shall be established by the
Bond registration books held by the Fiscal Agent. Whenever any Bond or Bonds shall be
surrendered for registration of transfer or exchange, the Fiscal Agent shall authenticate and deliver a
new Bond or Bonds of the same maturity, for a like aggregate principal amount of authorized
denominations; provided that the Fiscal Agent shall not be required to register transfers or make
exchanges of (i) Bonds for a period of 15 days next preceding the date of any selection of the Bonds
to be redeemed, or (ii) any Bonds chosen for redemption.
The Bonds shall be initially issued in the form of a single, fully registered Bond for each
maturity (which may be typewritten). Upon initial issuance, the ownership of such Bonds shall be
registered in the name of the Nominee identified below as nominee of the Depository. Except as
hereinafter provided, all of the Outstanding Bonds shall be registered in the name of the nominee of
the Depository, which may be the Depository, as determined from time to time pursuant to this
Section.
With respect to the Bonds registered in the name of the Nominee, neither the District nor the
Fiscal Agent shall have any responsibility or obligation to any Participant or to any person on behalf
of which such a Participant holds an interest in the Bonds. Without limiting the immediately
preceding sentence, neither the District nor the Fiscal Agent shall have any responsibility or
obligation with respect to (i) the accuracy of the records of the Depository, the Nominee, or any
Participant with respect to any ownership interest in the Bonds (ii) the delivery to any Participant or
any other person, other than an Owner of a Bond as shown in the Registration Books, of any notice
with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository
and its Participants of the beneficial interests in the Bonds to be redeemed in the event the District
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redeems the Bonds in part, or (iv) the payment to any Participant or any other person, other than an
Owner of a Bond as shown in the Registration Books, of any amount with respect to principal of or
interest on the Bonds. The District and the Fiscal Agent may treat and consider the person in whose
name each Bond is registered as the holder and absolute Owner of such Bond for the purpose of
payment of principal and interest with respect to such Bond for the purpose of giving notices or
prepayment if applicable, and other matters with respect to such Bond for the purpose of registering
transfers with respect to such Bond, and for all other purposes whatsoever. The District shall pay all
principal of and interest on the Bonds only to or upon the order of the respective Owner of a Bond, as
shown in the Registration Books, or his respective attorney duly authorized in writing, and all such
payments shall be valid and effective to fully satisfy and discharge the District’s obligations with
respect to payment of principal of and interest on the Bonds to the extent of the sum or sums so paid.
No person other than an Owner of a Bond, as shown in the Registration Books, shall receive a Bond
evidencing the obligation of the District to make payments of principal and interest pursuant to this
Indenture. Upon delivery by the Depository to the Owners of the Bond, and the District of written
notice to the effect that the Depository has determined to substitute a new nominee in place of the
Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in
this Indenture shall refer to such nominee of the Depository.
In the event (i) the Depository determines not to continue to act as securities depository for
the Bonds, or (ii) the Depository shall no longer so act and gives notice to the District of such
determination, then the District will discontinue the book-entry system with the Depository. If the
District determines to replace the Depository with another qualified securities depository, the District
shall prepare or direct the preparation of a new, single, separate, fully registered Bond, per maturity,
registered in the name of such successor or substitute qualified securities depository or its nominee.
If the District fails to identify another qualified securities depository to replace the Depository, then
the Bonds shall no longer be restricted to being registered in the register in the name of the Nominee,
but shall be registered in whatever name or names Owners of the Bonds transferring or exchanging
Bonds shall designate, in accordance with the provisions hereof and the District shall prepare and
deliver Bonds to the Owners thereof for such purpose.
In the event of a reduction in aggregate principal amount of Bonds Outstanding or a
refunding of part of the Bonds Outstanding, DTC, in its discretion, (a) may request the District to
prepare and issue a new Bond or (b) may make an appropriate notation on the Bond indicating the
date and amounts of such reduction in principal, but in such event the Registration Books maintained
by the Fiscal Agent shall be conclusive as to what amounts are Outstanding on the Bond, except in
the case of final maturity, in which case the Bond must be presented to the Fiscal Agent prior to
payment.
Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is
registered in the name of the Nominee, all payments of principal and interest with respect to such
Bond and all notice with respect to such Bond shall be made and given respectively, as instructed by
the Depository and acceptable to the District.
The initial Nominee shall be Cede & Co., as Nominee of DTC.
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SECTION 2.09 Exchange of Bonds. Bonds may be exchanged at the Principal Corporate
Trust Office, for a like aggregate principal amount of Bonds of authorized denominations, interest
rate and maturity, subject to the terms and conditions of this Indenture, including the payment of
certain charges, if any, upon surrender and cancellation of a Bond. Upon such transfer and exchange,
a new registered Bond or Bonds of any authorized denomination or denominations of the same
maturity and for the same aggregate principal amount will be issued to the transferee in exchange
therefor.
SECTION 2.10 Negotiability, Registration and Transfer of Bonds. The transfer of any
Bond may be registered only upon the Registration Books upon surrender thereof to the Fiscal Agent,
together with an assignment duly executed by the Owner or his attorney or legal representative, in
satisfactory form. Upon any such registration of transfer, a new Bond or Bonds shall be
authenticated and delivered in exchange for such Bond, in the name of the transferee, of any
denomination or denominations authorized by this Indenture, and in an aggregate principal amount
equal to the principal amount of such Bond or Bonds so surrendered. In all cases in which Bonds
shall be exchanged or transferred, the Fiscal Agent shall authenticate the Bonds in accordance with
the provisions of this Indenture. All Bonds surrendered in such exchange or transfer shall forthwith
be canceled. The Fiscal Agent may make a charge for every such exchange or registration of transfer
of Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with
respect to such exchange or registration or transfer.
SECTION 2.11 Authentication. Only such of the Bonds as shall bear thereon a certificate
of authentication substantially in the form set forth in Exhibit A hereto, manually executed by the
Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture,
and such certificate of the Fiscal Agent shall be conclusive evidence that the Bonds so authenticated
have been duly executed, authenticated and delivered hereunder, and are entitled to the benefits of
this Indenture.
ARTICLE III
FUNDS AND ACCOUNTS
SECTION 3.01 Establishment of Special Funds. The following funds and accounts
identified in this Section 3.01 are hereby created and established and shall be maintained by the
Fiscal Agent:
A. Special Tax Fund;
B. Debt Service Fund, and within the Debt Service Fund, the Interest Account, and
within the Interest Account, the Capitalized Interest Sub-Account, and the Principal Account;
C. Rebate Fund;
D. Redemption Fund;
E. Project Fund;
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F. Reserve Fund;
G. Administrative Expense Fund; and
H. Costs of Issuance Fund.
The District may, through written instructions from an Authorized Representative, direct the
Fiscal Agent to establish such other accounts or sub-accounts, as may be necessary to carry out the
administration of the Bonds and the proceeds of the Bonds.
SECTION 3.02 Special Tax Fund.
A. The District shall, no later than the tenth (10th) Business Day after which
Improvement Area No. 1 Special Tax Revenues have been received by the District and in any event
not later than February 15th and August 15th of each year, transfer such Improvement Area No. 1
Special Tax Revenues to the Fiscal Agent and, except as set forth in the following sentence, such
amounts shall be deposited in the Special Tax Fund. Improvement Area No. 1 Special Tax Revenues
representing Prepayments shall be deposited into the Redemption Fund and the Administrative
Expense Fund as set forth in written instructions from an Authorized Representative.
B. The Improvement Area No. 1 Special Tax Revenues deposited in the Special Tax
Fund shall be held in trust and deposited in the following accounts of the Special Tax Fund or
transferred to the following other funds and accounts on the dates and in the amounts set forth in the
following paragraphs and in the following order of priority:
1. The Fiscal Agent shall each Fiscal Year transfer to the Administrative
Expense Fund from theImprovement Area No.1 Special Tax Revenues received by the Fiscal Agent
during such Fiscal Year an amount equal to the Administrative Expense Requirement.
2. The Fiscal Agent shall transfer to the Interest Account of the Debt Service
Fund, on each Interest Payment Date and date for redemption of the Bonds, an amount required to
cause the aggregate amount on deposit in the Interest Account to equal the amount of interest due or
becoming due and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on
the Bonds being redeemed on such date.
3. The Fiscal Agent shall transfer to the Principal Account of the Debt Service
Fund, on each September 1, an amount required to cause the aggregate amount on deposit in the
Principal Account to equal the principal amount of, and premium (if any) onthe Bonds coming due
and payable on such September 1, whether at maturity or by mandatory sinking fund payments on the
Term Bonds.
4. On or after September 2 of each year after making the deposits and transfers
required under 1. through 3. above, the Fiscal Agent shall transfer the amount, if any, necessary to
replenish the amount then on deposit in the Reserve Fund to an amount equal to the Reserve
Requirement.
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5. On or after September 2 of each year after making the deposits and transfers
required under 1. through 4. above, upon receipt of written instructions from an Authorized
Representative, the Fiscal Agent shall transfer from the Special Tax Fund to the Rebate Fund the
amount specified in such request.
6. On or after September 2 of each year after making the deposits and transfers
required under 1. through 5. above, upon receipt of a written request of an Authorized
Representative, the Fiscal Agent shall transfer from the Special Tax Fund to the Administrative
Expense Fund the amounts specified in such request to pay those Administrative Expenses which the
District reasonably expects will become due and payable during such Fiscal Year or the cost of
which Administrative Expenses have previously been incurred and paid by the District from funds
other than the Administrative Expense Fund in excess of the Administrative Expense Requirement
for such Fiscal Year.
7. If, on or after September 2 of each year, after making the deposits and
transfers required under 1. through 6. above, monies remain in the Special Tax Fund, such monies
shall be transferred to the Project Fund until the Project Fund is closed.
C. The Fiscal Agent shall, upon receipt of Improvement Area No. 1 Special Tax
Revenues representing Prepayments, immediately transfer Prepayments to the Redemption Fund and
utilize such funds to redeem Bonds pursuant to Section 4.03Bas set forth in written instructions to
be delivered to the Fiscal Agent by an Authorized Representative; provided, however, that any
portion of a Prepayment constituting Administrative Expenses shall be deposited into the
Administrative Expense Fund as set forth in such written instructions. The Fiscal Agent may
conclusively rely upon such instructions.
D. When there are no longer any Bonds Outstanding, any amounts then remaining on
deposit in the Special Tax Fund shall be transferred to the District and used for any lawful purpose
under the Act.
SECTION 3.03 Debt Service Fund.
A. Interest Account. All moneys in the Interest Account, including the Capitalized
Interest Sub-Account, shall be used and withdrawn by the Fiscal Agent solely for the purpose of
paying interest on the Bonds as it shall become due and payable (including accrued interest on any
Bonds redeemed prior to maturity). All funds in the Capitalized Interest Sub-Account shall be used
and withdrawn to pay interest on the Bonds prior to using any other funds on deposit in the Interest
Account for such purpose.
B. Principal Account. All moneys in the Principal Account shall be used and withdrawn
by the Fiscal Agent solely for the purpose of (i) paying the principal of the Bonds at the maturity
thereof, or (ii) paying the principal of the Term Bonds upon the mandatory sinking fund redemption
thereof pursuant to this Indenture.
SECTION 3.04 Costs of Issuance Fund. The Fiscal Agent shall, upon receipt of a
payment request in the form set forth in Exhibit B hereto duly executed by an Authorized
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Representative, disburse money from the Costs of Issuance Fund, if any, on such dates and in such
amounts as specified in such requisition to pay the Costs of Issuance related to the Bonds. Any
amounts remaining on deposit in the Costs of Issuance Fund on the earlier of the date on which all
Costs of Issuance have been paid as stated in writing by an Authorized Representative delivered to
the Fiscal Agent or six months after the Delivery Date of the Bonds shall be transferred to the Project
Fund.
SECTION 3.05 Project Fund. The Fiscal Agent shall, from time to time, disburse monies
from the Project Fund to pay the Project Costs. Upon receipt of a payment request in the form set
forth in Exhibit C hereto duly executed by an Authorized Representative (which payment request
shall not exceed the corresponding payment request provided to the City under the
Acquisition/Financing Agreement), the Fiscal Agent shall pay the Project Costs from amounts in the
Project Fund directly to the contractor(s) or such other person(s), corporation(s) or entity(ies)
specified in the payment request (including reimbursements, if any, to the District). The Fiscal Agent
may rely on an executed payment request as complete authorization for said payments.
After the final payment or reimbursement of all Project Costs, as certified by delivery of a
written notice from an Authorized Representative to the Fiscal Agent, the Fiscal Agent shall transfer
excess monies, if any, on deposit in, or subsequently deposited in, the Project Fund to the Special
Tax Fund and the Fiscal Agent shall apply the amount so transferred in accordance with Section 3.02
herein. Upon such transfer the Project Fund shall be closed.
Notwithstanding anything herein to the contrary, if on the date which is three (3) years from
the Delivery Date of the Bonds, any funds derived from the Bonds remain on deposit in the Project
Fund, the Fiscal Agent shall, upon the receipt of written instructions from an Authorized
Representative, immediately restrict the yield on such amounts so that the Yield earned on the
investment of such amounts is not in excess of the Yield on the Bonds, unless in the written opinion
of Bond Counsel delivered to the Fiscal Agent such restriction is not necessary to prevent an
impairment of the exclusion of interest on the Bonds from gross income for federal income tax
purposes.
SECTION 3.06 Reserve Fund. Moneys on deposit in the Reserve Fund shall be used
solely for the purpose of paying the principal of and interest on the Bonds as such amounts shall
become due and payable in the event that the moneys in the Special Tax Fund and the Debt Service
Fund for such purpose are insufficient therefor or redeeming Bonds as described below. The Fiscal
Agent shall, when and to the extent necessary, withdraw money from the Reserve Fund and transfer
such money to the Debt Service Fund or the Redemption Fund for such purpose.
All Permitted Investments in the Reserve Fund shall be valued at their fair market value
semi-annually on March 1 and September 1 and on any other date as requested in writing by an
Authorized Representative. On any date after the transfers required by Section 3.02B(1), (2) and (3)
have been made for any Bond Year, if the amount on deposit in the Reserve Fund is less than the
Reserve Requirement, the Fiscal Agent shall transfer to the Reserve Fund from the first available
monies in the Special Tax Fund an amount necessary to increase the balance therein to the Reserve
Requirement. If on September 1 of each year following the payment of scheduled debt service due
and payable on such date, or the first Business Day thereafter if September 1 is not a Business Day,
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the amount on deposit in the Reserve Fund is in excess of the Reserve Requirement, the Fiscal Agent
shall transfer such excess to the Special Tax Fund. In connection with any optional or extraordinary
mandatory redemption of Bondsfrom Prepayments or a partial defeasance of Bonds, amounts in the
Reserve Fund may be applied to such redemption or partial defeasance so long as the amount on
deposit in the Reserve Fund following such redemption or partial defeasance equals the Reserve
Requirement. The District shall set forth in a written request of an Authorized Representative the
amount in the Reserve Fund to be transferred to the Redemption Fund on a redemption date or to be
transferred pursuant to this Indenture to partially defease Bonds, and the Fiscal Agent shall make
such transfer on the applicable redemption or defeasance date, subject to the limitation in the
preceding sentence.
Upon receipt of written instructions from an Authorized Representative instructing the Fiscal
Agent to transfer certain moneys representing a Reserve Fund credit for the prepayment of a Special
Tax obligation, the Fiscal Agent shall transfer the amount specified in such instructions from the
Reserve Fund to the Redemption Fund for the purpose of redeeming Bonds pursuant to such
instructions.
Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the
Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if
any, due upon redemption, the Fiscal Agent shall transfer the amount in the Reserve Fund to the
Redemption Fund to be applied, on the next succeeding Interest Payment Date, to the payment and
redemption, in accordance with Section 4.03 of all of the Outstanding Bonds. In the event that the
amount so transferred from the Reserve Fund to the Redemption Fund exceeds the amount required
to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred to the
District to be used for any lawful purpose of the District as set forth in the Act.
SECTION 3.07 Rebate Fund. The District shall calculate Excess Investment Earnings as
defined in, and in accordance with, the Tax Certificate, and shall, in writing, direct the Fiscal Agent
to transfer funds to the Rebate Fund from funds furnished by the District as provided for in this
Indenture and the Tax Certificate.
Notwithstanding the foregoing, the Tax Certificate, including the method of computing
Excess Investment Earnings (as defined in the TaxCertificate) may be modified, in whole or in part,
without the consent of the Owners of the Bonds, upon receipt by the District of an opinion of Bond
Counsel to the effect that such modification shall not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the Bonds then Outstanding.
The Fiscal Agent shall not be responsible for calculating rebate amounts or for the adequacy
or correctness of any rebate report or rebate calculations. The Fiscal Agent shall be deemed
conclusively to have complied with the provisions of this Indenture regarding calculation and
payment of rebate if it follows the directions of the District and it shall have no independent duty to
review such calculations or enforce the compliance by the District with such rebate requirements.
SECTION 3.08 Redemption Fund. Monies may be deposited by the District or the Fiscal
Agent pursuant to the terms of Sections 3.02C or 3.06 into the Redemption Fund and shall be set
aside and used solely for the purpose of redeeming Bonds in accordance with Section 4.03A or
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Section 4.03B, as applicable. Following the redemption of any Bonds, if any funds remain in the
Redemption Fund, such funds shall be transferred to the Special Tax Fund.
SECTION 3.09 Administrative Expense Fund. The Fiscal Agent shall deposit from time
to time the amounts authorized for deposit therein pursuant to Section 3.02. The moneys in the
Administrative Expense Fund shall be used to pay Administrative Expenses from time to time upon
receipt by the Fiscal Agent ofa written request executed by an Authorized Representative specifying
the name and address of the payee and the amount of the Administrative Expense and a description
thereof and further stating that such request has not formed the basis of any prior request for
payment.
SECTION 3.10 Investment of Funds. Unless otherwise specified in this Indenture,
monies in the Special Tax Fund, the Debt Service Fund, the Project Fund, the Reserve Fund, the
Costs of Issuance Fund and Administrative Expense Fund shall, at the written direction of an
Authorized Representative given at least two (2) days prior, be invested and reinvested in Permitted
Investments (including investments with the Fiscal Agent or an affiliate of the Fiscal Agent or
investments for which the Fiscal Agent or an affiliate of the Fiscal Agent acts as investment advisor
or provides other services so long as the investments are Permitted Investments). Monies in the
Redemption Fund and the Rebate Fund shall, at the written direction of an Authorized
Representative, be invested in Government Obligations. Notwithstanding anything herein to the
contrary, in the absence of written investment instructions, the Fiscal Agent shall invest solely in
investments identified in paragraph 7 of the definition of Permitted Investments.
The District acknowledges that to the extent regulations of the Comptroller of the Currency
or other applicable regulatory entity grant the District the right to receive brokerage confirmations of
security transactions as they occur, the District specifically waives receipt of such confirmations to
the extent permitted by law. The Fiscal Agent will furnish the District periodic cash transaction
statements, which include detail for all investment transactions made by the Fiscal Agent hereunder.
Obligations purchased as investments of monies in any fund or account shall be deemed at all
times to be a part of such fund or account. Except as provided otherwise herein, any income realized
on or losses resulting from investments in any fund or account shall be credited or charged to such
fund or account. Subject to the restrictions set forth herein and/or any written investment instructions
received by Fiscal Agent pursuant to this Section 3.10, monies in said funds and accounts may be
from time to time invested by the Fiscal Agent in any manner so long as:
(1) Monies in the Project Fund, Administrative Expense Fund and Rebate Fund shall be
invested in obligations which will by their terms mature as close as practicable to the date the
District estimates the monies represented by the particular investment will be needed for withdrawal
from such fund; and
(2) Monies in the Special Tax Fund, the Debt Service Fund, the Redemption Fund and
the Reserve Fund shall be invested only in obligations which will by their terms either mature or
allow for withdrawals at par on such dates so as to ensure the payment of principal and interest on
the Bonds as the same become due; provided, however, that except for Permitted Investments which
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permit withdrawal at par at any time, investment of monies on deposit in the Reserve Fund shall
have an average aggregate weighted term not greater that five (5) years.
The Fiscal Agent shall sell or present for redemption any obligations so purchased whenever
it may be necessary to do so in order to provide monies to meet any payment or transfer for such
funds and accounts or from such funds and accounts. The Fiscal Agent shall not be liable for any
loss from any investments made or sold by it in accordance with the provisions of this Indenture.
SECTION 3.11 Disposition of Bond Proceeds.
Upon the receipt of $___________as the sale proceeds for the Bonds (being the par amount
of $_________less the underwriter’s discount of $_________ and [plus/less] original issue
[premium/discount]of $________), theFiscal Agent shall transfer or set aside and deposit or cause
to be deposited such funds as follows:
$_________ shall be deposited in the Project Fund;
$_________ shall be deposited in the Reserve Fund;
$_________ shall be deposited into the Costs of Issuance Fund;
$__________ shall be deposited in the Capitalized Interest Sub-Account of the Interest
Account of the Debt Service Fund; and
$75,000 shall be deposited in the Administrative Expense Fund.
The Fiscal Agent may establish such temporary funds or accounts on its records, as it may
deem appropriate to facilitate such deposits and transfers.
ARTICLE IV
REDEMPTION
SECTION 4.01 Notice of Redemption.
A. Notice to Bondholders: So long as the Bonds are held in book-entry form by the
Depository, or its Nominee, notice of redemption should be given to the Depository in such manner
as is set forth in the procedures of the Depository, at least thirty (30) days but not more than forty-
five (45) days prior to the redemption date. If the Bonds are no longer registered to the Depository,
or its Nominee, the Fiscal Agent shall mail, at least thirty (30) days but not more than forty-five (45)
days prior to the date of redemption, notice of redemption, by first-class mail, postage prepaid, to the
original purchaser of the Bonds and the respective registered Owners of the Bonds at the addresses
appearing on the Bond registry books. The notice of redemption shall: (a) state the redemption date;
(b) state the redemption price; (c) state the bond registration numbers, dates of maturity and CUSIP
numbers of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part, the
respective principal portions to be redeemed; provided, however, that whenever any call includes all
Bonds of a maturity, the numbers of the Bonds of such maturity need not be stated; (d) state that
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such Bonds must be surrendered at the Principal Corporate Trust Office of the Fiscal Agent; (e) state
that further interest on such Bonds will not accrue from and after the designated redemption date; (f)
state the dateof the issue of the Bonds as originally issued; (g) state the rate of interest borne by each
Bond being redeemed; and (h) state that any other descriptive information needed to identify
accurately the Bonds being redeemed as the District shall direct.
B. Further Notice: In addition to the notice of redemption given pursuant to
Section 4.01A above, further notice shall be given as set out below, but no defect in said further
notice nor any failure to give all or any portion of such further notice shall in any manner defeat the
effectiveness of a call for redemption if notice thereof is given as above prescribed.
Each further notice of redemption shall be sent at least 2 days before the notice of redemption
is mailed to the Bondholders pursuant to Section 4.01A by registered or certified mail or overnight
delivery service to the Securities Depositories and to at least one (1) Information Services that
disseminate notice of redemption of obligations similar to the Bonds or, in accordance with the then-
current guidelines of the Securities and Exchange Commission, such other services providing
information on called bonds, or no such other services, as District may determine in its sole
discretion.
C. Conditional Notice: Any notice of optional redemption of the Bonds delivered in
accordance with Section 4.03A may be conditional and if any condition stated in the notice of
redemption shall not have been satisfied on or prior to the redemption date, said notice shall be of no
force and effect and the District shall not be required to redeem such Bonds and the redemption shall
not be made and the Fiscal Agent shall within a reasonable time thereafter give notice, to the persons
and in the manner in which the notice of redemption was given, that such condition or conditions
were not met and that the redemption was cancelled.
D. Right to Rescind: The District may rescind any optional redemption and notice
thereof for any reason on any date prior to the date fixed for redemption by causing written notice of
the rescission to be given to the owners of the Bonds so called for redemption. Any optional
redemption and notice thereof shall be rescinded if for any reason on the date fixed for redemption
moneys are not available in the Debt Service Fund or otherwise held in trust for such purpose in an
amount sufficient to pay in full on said date the principal of, interest, and any premium due on the
Bonds called for redemption. Notice of rescission of redemption shall be given in the same manner
in which notice of redemption was originally given. The actual receipt by the owner of any Bond of
notice of such rescission shall not be a condition precedent to rescission, and failure to receive such
notice or any defect in such notice shall not affect the validity of the rescission
E. Failure to Receive Notice: So long as notice has been provided as set forth in Section
4.01A above, the actual receipt by the Owner of any Bond of notice of such redemption shall not be a
condition precedent to redemption, and failure to receive such notice shall not affect the validity of
the proceedings for redemption of such Bonds or the cessation of interest on the date fixed for
redemption.
F. Certificate of Giving Notice: The notice or notices required by this Section shall be
given by the Fiscal Agent on behalf of the District. A certificate by the Fiscal Agent that notice of
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call and redemption has been given to the registered Owners of the Bonds as herein provided shall be
conclusive as against all parties, and no Owner whose Bond is called for redemption may object
thereto, or object to cessation of interest on the redemption date, by any claim or showing that he
failed to receive actual notice of call and redemption.
SECTION 4.02 Effect of Redemption. When notice of redemption has been given
substantially as provided for herein, and when the amount necessary for the redemption of the Bonds
called for redemption is set aside for that purpose in the Debt Service Fund or the Redemption Fund,
as provided for herein, the Bonds designated for redemption shall become due and payable on the
date fixed for redemption thereof, and upon presentation and surrender of said Bonds at the place
specified in the notice of redemption, said Bonds shall be redeemed and paid at the redemption price
out of the Debt Service Fund or the Redemption Fund and no interest will accrue on such Bonds or
portions of Bonds called for redemption from and after the redemption date specified in said notice,
and the Owners of such Bonds so called for redemption after such redemption date shall look for the
payment of principal and premium, if any, of such Bonds or portions of Bonds only to the Debt
Service Fund or the Redemption Fund, as applicable. All Bonds redeemed shall be canceled
forthwith by the Fiscal Agent and shall not be reissued. Upon surrender of Bonds redeemed in part,
a new Bond or Bonds of the same maturity shall be registered, authenticated and delivered to the
registered Owner at the expense of the District, in the aggregate principal amount of the unredeemed
portion. All unpaid interest payable at or prior to the date fixed for redemption shall continue to be
payable to the respective registered owners of such Bonds or their order, but without interest thereon.
SECTION 4.03 Redemption Prices and Terms.
A. Optional Redemption. The Bondsmay be redeemed at the option of the District prior
to maturity as a whole, or in part on any [Interest Payment Date/date] from such maturities as are
selected by the District, and by lot within a maturity, from any source of funds, at the following
redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed),
together with accrued interest to the date of redemption:
Redemption Date Redemption Price
September 1, 20__ through March 1, 20__ 103%
September 1, 20__ through March 1, 20__ 102
September 1, 20__ through March 1, 20__ 101
September 1, 20__ and thereafter 100
B. Extraordinary Mandatory Redemption. The Bonds shall be subject to extraordinary
mandatory redemption on any Interest Payment Date, prior to maturity, as a whole, or in part as
nearly as practicable on a pro rata basis among maturities of authorized denominations, from
amounts deposited to the Redemption Fund in connection with a Prepayment of Improvement Area
No. 1 Special Taxes pursuant to the Improvement Area No. 1 Special Tax RMA. An Authorized
Representative shall deliver written instructions to the Fiscal Agent not less than 60 days prior to the
redemption date directing the Fiscal Agent to utilize the Improvement Area No. 1 Special Tax
Revenues transferred to the Redemption Fund pursuant to Section 3.02C and Section 3.06 to redeem
Bonds pursuant to this Section 4.03B. Such extraordinary mandatory redemption of the Bonds shall
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be at the following redemption prices (expressed as percentages of theprincipal amount of the Bonds
to be redeemed), together with accrued interest thereon to the date of redemption:
Redemption Date Redemption Price
September 1, 20__ through March 1, 20__ 103%
September 1, 20__ through March 1, 20__ 102
September 1, 20__ through March 1, 20__ 101
September 1, 20 and thereafter 100
C. Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20__
are subject to mandatory sinking fund redemption, in part by lot, on September 1 in each year
commencing September 1, 20__at a redemption price equal to the principal amount of the Bonds to
be redeemed, plus accrued and unpaid interest thereon to the date fixed for redemption, without
premium, in the aggregate principal amount and in the years shown on the following redemption
schedule:
Redemption Date
(September 1)
Principal
Amount
$
The Bonds maturing on September 1, 20__, are subject to mandatory sinking fund
redemption, in part, by lot, on September 1 of each year commencing September 1, 20__, at a
redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued and
unpaid interest thereon to the date fixed for redemption, without premium, in the aggregate principal
amounts and in the years shown in the following redemption schedule.
Redemption Date
(September 1)
Principal
Amount
$
In the event of a partial optional redemption or extraordinary mandatory redemption of the
Bonds maturing on September 1, 20__, or September 20__, each of the remaining mandatory sinking
fund payments for the applicable maturity of the Bonds so redeemed will be reduced, as nearly as
practicable, on a pro rata basis in integral multiples of $5,000.
D. Purchase in Lieu of Redemption. In lieu of such an optional, extraordinary mandatory
or mandatory sinking fund redemption, the District may elect to purchase such Bonds at public or
private sale at such prices as the District may in its discretion determine; provided, that, unless
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otherwise authorized by law, the purchase price (including brokerage and other charges) thereof shall
not exceed the principal amount thereof, plus the applicable premium, if any, stated above, plus
accrued interest to the purchase date.
E. Notice and Selection of Bonds for Optional Redemption. In the event the District
shall elect to redeem Bonds as provided in Section 4.03A, the District shall give written notice to the
Fiscal Agent of its election so to redeem not less than sixty (60) days prior to the redemption date,
the principal amount of the Bonds to be redeemedand the maturities from which such Bonds are to
be redeemed, and the principal amount of the Bonds to be redeemed from each such maturity.
The notice to the Fiscal Agent shall be given not less than sixty (60) days prior to the
redemption date or such shorter period as shall be acceptable to the Fiscal Agent in its sole
discretion. If less than all of the Bonds Outstanding are to be redeemed, the portion of any Bond of a
denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or a
multiple thereof, and, in selecting portions of such Bonds for redemption, the District shall treat each
such Bond as representing that number of Bonds of $5,000 denomination which is obtained by
dividing the principal amount of such Bond to be redeemed in part by $5,000.
ARTICLE V
SUPPLEMENTAL INDENTURES
SECTION 5.01 Amendments or Supplements. The Legislative Body may, by adoption of
a resolution from time to time, and at any time but without notice to or consent of any of the
Bondholders, approve a Supplemental Indenture hereto for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provision with
respect to matters or questions arising under this Indenture or in any Supplemental
Indenture, provided that such action shall not be materially adverse to the interests of
the Bondowners;
(b) to add to the covenants and agreements of and the limitations and the restrictions
upon the District contained in this Indenture, other covenants, agreements, limitations
and restrictions to be observed by the District which are not contrary to or
inconsistent with this Indenture as theretofore in effect;
(c) to modify, alter, amend or supplementthis Indenture in any other respect which is not
materially adverse to the interests of the Bondowners; and
(d) to amend any provision of this Indenture relating to the Code as may be necessary or
appropriate to assure compliance with the Code and the exclusion from gross income
of interest on the Bonds.
Exclusive of the Supplemental Indentures hereto provided for in the first paragraph of this
Section 5.01, the Owners of not less than 60% in aggregate principal amount of the Bonds then
Outstanding shall have the right to consent to and approve the adoption by the District of such
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Supplemental Indentures as shall be deemed necessary or desirable by the District for the purpose of
waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms
or provisions contained in this Indenture; provided, however, that nothing herein shall permit, or be
construed as permitting, (a) an extension of the maturity date of the principal of, or the payment date
of interest on, any Bond, or (b) a reduction in the principal amount of, or redemption premium on,
any Bond or the rate of interest thereon without the consent of the affected Bondowner(s), or permit,
or be construed as permitting, (x) a preference or priority of any Bond or Bonds over any other Bond
or Bonds, (y) a reduction in the aggregate principal amount of the Bonds the Owners of which are
required to consent to such Supplemental Indenture, or (z) creating of a pledge of or lien or charge
upon the Net Improvement Area No. 1 Special Tax Revenues superior to the pledge provided for in
Section 2.02 hereof, without the consent of the Owners of all Bonds then Outstanding.
If at any time the District shall desire to approve a Supplemental Indenture, which pursuant to
the terms of thisSection 5.01 shall require the consent of the Bondowners, the District shall so notify
the Fiscal Agent and shall deliver to the Fiscal Agent a copy of the proposed Supplemental
Indenture. The District shall, at the expense of the District, cause notice of the proposed
Supplemental Indenture to be mailed, postage prepaid, to all Bondowners at their addresses as they
appear in the Registration Books. Such notice shall briefly set forth the nature of the proposed
Supplemental Indenture and shall state that a copy thereof is on file at the principal office of the
District for inspection by all Bondowners. The failure of any Bondowner to receive such notice shall
not affect the validity of such Supplemental Indenture when consented to and approved as in this
Section 5.01 provided. Whenever at any time within one year after the date of the first mailing of
such notice, the District shall receive an instrument or instruments purporting to be executed by the
Owners of not less than 60% in aggregate principal amount of the Bonds then Outstanding, which
instrument or instruments shall refer to the proposed Supplemental Indenture described in such
notice, and shall specifically consent to the approval thereof by the Legislative Body substantially in
the form of the copy thereof referred to in such Notice as on file with the District, such proposed
Supplemental Indenture, when duly approved by the Legislative Body, shall thereafter become a part
of the proceedings for the issuance of the Bonds. In determining whether the Owners of 60% of the
aggregate principal amount of the Bonds have consented to the approval of any Supplemental
Indenture, Bonds which are owned by the District or by any person directly or indirectly controlling
or controlled by or under the director indirect common control with the District, shall be disregarded
and shall be treated as though they were not outstanding for the purpose of any such determination.
Upon the approval of any Supplemental Indenture hereto and the receipt of consent to any
such Supplemental Indenture from the Owners of the appropriate aggregate principal amount of
Bonds in instances where such consent is required pursuant to the provisions of this Section 5.01,
this Indenture shall be, and shall be deemed to be, modified and amended in accordance therewith,
and the respective rights, duties and obligations under this Indenture of the District and all Owners of
Bonds then Outstanding shall thereafter be determined, exercised and enforced hereunder, subject in
all respects to such modifications and amendments. Notwithstanding anything herein to the contrary,
no Supplemental Indenture shall be entered into which would modify the duties of the Fiscal Agent
hereunder, without the prior written consent of the Fiscal Agent.
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ARTICLE VI
MISCELLANEOUS CONDITIONS
SECTION 6.01 Ownership of Bonds. The person in whose name any Bond shall be
registered shall be deemed and regarded as the absolute Owner thereof for all purposes, and payment
of or on account of the principal and redemption premium, if any, of anysuch Bond, and the interest
on any such Bond, shall be made only to or upon the order of the registered Owner thereof or his
legal representative. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond, including the redemption premium, if any, and interest thereon, to the
extent of the sum or sums so paid.
SECTION 6.02 Mutilated, Lost, Destroyed or Stolen Bonds. If any Bond shall become
mutilated, the Fiscal Agent shall authenticate and deliver a new Bond of like tenor, date and maturity
in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent
of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be
canceled. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft
may be submitted to the Fiscal Agent and, if such evidence is satisfactory to the Fiscal Agent and, if
an indemnity satisfactory to the Fiscal Agent shall be given, the Fiscal Agent shall authenticate and
deliver a new Bond of like tenor and maturity, numbered and dated as the Fiscal Agent shall
determine in lieu of and in substitution for the Bond so lost, destroyed or stolen. Any Bond issued
under the provisions of this Section 6.02 in lieu of any Bond alleged to have been lost, destroyed or
stolen shall be equally and proportionately entitled to the benefits hereof with all other Bonds
secured hereby. The Fiscal Agent shall not treat both the original Bond and any replacement Bond as
being Outstanding for the purpose of determining the principal amount of Bonds which may be
executed, authenticated and delivered hereunder or for the purpose of determining any percentage of
Bonds Outstanding hereunder, but both the original and replacement Bond shallbe treated as one and
the same.
SECTION 6.03 Cancellation of Bonds. All Bonds paid or redeemed, either at or before
maturity, shall be canceled upon the payment or redemption of such Bonds, and shall be delivered to
the Fiscal Agent when such payment or redemption is made. All Bonds canceled under any of the
provisions of this Indenture shall be destroyed by the Fiscal Agent, which shall execute and provide
the District with a certificate of destruction.
SECTION 6.04 Covenants. As long as the Bonds are Outstanding and unpaid, the District
shall (through its proper members, officers, agents or employees) faithfully perform and abide by all
of the covenants and agreements set forth in this Section 6.04; provided, however, that said
covenants do not require the District to expend any funds other than the Net Improvement Area No.
1 Special Tax Revenues.
A. The District will review the public records of the County of San Diego, California, in
connection with the collection of the Improvement Area No.1 Special Taxes not later than July1 of
each year to determine the amount of the Improvement Area No. 1 Special Tax collected in the prior
Fiscal Year and will commence and diligently pursue to completion, judicial foreclosure proceedings
against (i) properties under common ownership with delinquent Improvement Area No. 1 Special
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Taxes in the aggregate of $5,000 or more by October 1 following the close of the Fiscal Year in
which the Improvement Area No. 1 Special Taxes were due, and (ii) against all properties with
delinquent Improvement Area No.1 Special Taxes in the aggregate of $5,000 or more by October 1
following the close of any Fiscal Year if the amount of the Reserve Fund is less than the Reserve
Requirement.
B. The District shall preserve and protect the security of the Bonds and the rights of the
Bondowners and defend their rights against all claims and demands of all persons. Until such time
as an amount has been set aside sufficient to pay Outstanding Bonds at maturity or to the date of
redemption if redeemed prior to maturity, plus unpaid interest thereon and premium, if any, to
maturity or to the date of redemption if redeemed prior to maturity, the District will faithfully
perform and abide by all of the covenants, undertakings and provisions contained in this Indenture or
in any Bond issued hereunder.
C. The District will not issue any other obligations payable, principal or interest, from
the Improvement Area No. 1 Special Taxes which have, or purport to have, any lien upon the
Improvement Area No.1 Special Taxes superior to or, except as permitted in the following sentence,
on a parity with the lien of the Bonds herein authorized. Nothing in this Indenture shall prevent the
District from issuing and selling, pursuant to law, refunding bonds or other refunding obligations
payable from and having a first lien upon the Improvement Area No. 1 Special Taxes on a parity
with the Outstanding Bonds so long as the issuance of such refunding bonds or other refunding
obligations results in a reduction in each Bond Year on the Annual Debt Service on the Bonds when
combined with the Debt Service on Parity Refunding Obligations following the issuance of such
refunding bonds or other refunding obligations.
D. The District will duly and punctually pay or cause to be paid the principal of and
interest on each of the Bonds issued hereunder on the date, at the place and in the manner provided in
said Bonds, but only out of Net Improvement Area No.1 Special Tax Revenues and such other funds
as may be herein provided.
E. The District shall complywith all requirements of the Act so as to assure the timely
collection of the Improvement Area No. 1 Special Taxes in an amount sufficient to pay the Annual
Debt Service on the Bonds when due, Administrative Expenses when due and amounts, if any, to
replenish the Reserve Fund to the Reserve Requirement. Prior to July 1 of each year, the District
shall ascertain the parcels on which the Improvement Area No. 1 Special Taxes are to be levied in
the following Fiscal Year, taking into account any subdivisions of parcels during the current Fiscal
Year. The District shall effect the levy of the Improvement Area No. 1 Special Tax in accordance
with the Improvement Area No. 1 Special Tax RMA and the Act each Fiscal Year so that the
computation of such levy is complete and transmitted to the Auditor of the County of San Diego
before the final date on which the Auditor of the County of San Diego will accept the transmission of
the Improvement Area No. 1 Special Tax for the parcels within Improvement Area No. 1 for
inclusion on the next real property tax roll. Upon completion of the computation of the amount of the
Improvement Area No. 1 Special Tax levy, the District shall prepare or cause to be prepared, and
shall transmit or cause to be transmitted to the Auditor of the County of San Diego, such data as such
Auditor requires to include the levy of the Improvement Area No. 1 Special Tax on the next real
property tax roll.
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The District finds and determines that, historically, delinquencies in the payment of special
taxes authorized pursuant to the Act in community facilities districts in Southern California have
from time to time been at levels requiring the levy of special taxes at the maximum authorized rates
in order to make timely payment of principal of and interest on the outstanding indebtedness of such
community facilities districts. For this reason, the District has determined that, absent the
certification described below, a reduction in the Maximum Special Tax (as such term is defined in
the Improvement Area No. 1 Special Tax RMA) authorized to be levied below the levels provided
would interfere with the timely retirement of the Bonds. The District has determined it to be
necessary in order to preserve the security for the Bonds to covenant, and, to the maximum extent
that the law permits it to do so, the District does covenant, that it shall not initiate proceedings to
reduce the Maximum Special Tax rates (as set forth in the Improvement Area No. 1 Special Tax
RMA), unless, in connection therewith, (i) the District receives a certificate from one or more
Special Tax Consultants which, when taken together, certify that, on the basis of the parcels of land
and improvements existing in Improvement Area No. 1as of the July 1 preceding the reduction, the
Maximum Special Tax which may be levied on all Assessor’s Parcels (as such term is defined in the
Improvement Area No. 1 Special Tax RMA) of taxable property on which a completed structure is
located in each Fiscal Year will equal at least 110% of the largest sum of the Annual Debt Service on
the Bonds to remain Outstanding and the Debt Service on Parity Refunding Obligations outstanding
(“Maximum Debt Service”) after the reduction is approved and will not reduce the Maximum
Special Tax payable from parcels on which a completed structure is located or to be located at
buildout of Improvement Area No. 1 as proposed to less than 110% of the Maximum Debt Service,
and (ii) the City Council, acting as the legislative body of the District, finds pursuant to this
Indenture that any reduction made under such conditions will not adversely affect the interests of the
Owners of the Bonds. Any reduction in the Maximum Special Tax approved pursuant to the
preceding sentence may be approved without the consent of the Owners of the Bonds.
The District covenants that, in the event that any initiative is adopted by the qualified electors
which purports to reduce the Maximum Special Tax below the levels authorized pursuant to the
Improvement Area No. 1 Special Tax RMA or to limit the power or authority of the District to levy
Improvement Area No.1 Special Taxes pursuant to the Improvement Area No. 1 Special Tax RMA,
the District shall, from funds available hereunder, commence and pursue legal action in order to
preserve the authority and power of the District to levy Improvement Area No. 1 Special Taxes
pursuant to the Improvement Area No. 1 Special Tax RMA.
F. The District will at all times keep, or cause to be kept, proper and current books and
accounts (separate from all other records and accounts) in which complete and accurate entries shall
be made of all transactions relating to the Improvement Area No. 1 Special Tax Revenues and other
funds herein provided for.
G. The District will not directly or indirectly use or permit the use of any proceeds of the
Bonds or any other funds of the District or take or omit to take any action that would cause the
Bonds to be “private activity bonds” within the meaning of Section 141 of the Code, or obligations
which are “federally guaranteed” within the meaning of Section 149(b) of the Code. The District
will not allow five percent (5%) or more of the proceeds of the Bonds to be used in the trade or
business of any non-governmental units and will not loan five percent (5%) or more of the proceeds
of the Bonds to any non-governmental units.
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H. The District covenants that it will not take any action, or fail to take any action, if any
such action or failure to take action would adversely affect the exclusion from gross income of the
interest on the Bonds under Section 103 of the Code. The District will not directly or indirectly use
or permit the use of any proceeds of the Bonds or any other funds of the District, or take or omit to
take any action, that would cause the Bonds to be “arbitrage bonds” within the meaning of
Section 148(a) of the Code. To that end, the District will comply with all requirements of
Section 148 of the Code to the extent applicable to the Bonds. In the event that at any time the
District is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield
on the investment of any monies held under this Indenture or otherwise the District shall so instruct
the Fiscal Agent in writing, and the Fiscal Agent shall take such action as may be necessary in
accordance with such instructions.
Without limiting the generality of the foregoing, the District agrees that there shall be paid
from time to time all amounts required to be rebated to the United States of America pursuant to
Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be
applicable to the Bonds from time to time. This covenant shall survive payment in full or defeasance
of the Bonds. The District specifically covenants to pay or cause to be paid to the United States of
America at the times and in the amounts determined under Section 3.07.
Notwithstanding any provision of this Section, if the District shall obtain an opinion of Bond
Counsel to the effect that any action required under this covenant is no longer required, or to the
effect that some further action is required, to maintain the exclusion from gross income of the
interest on the Bonds pursuant to Section 103 of the Code, the Fiscal Agent may rely conclusively on
such opinion in complying with the provisions hereof, and the covenant hereunder shall be deemed
to be modified to that extent.
I. The District shall not directly or indirectly extend the maturity dates of the Bonds or
the time of payment of interest with respect thereto.
J. Not later than October 30 of each year, commencing October 30, 2019, and until
October 30following the final maturity of the Bonds, the District shall supply or cause to be supplied
the information, if any, then required by Government Code Section 53359.5 to the California Debt
and Investment Advisory Commission.
K. The District covenants that it will not adopt any policy pursuant to Section 53341.1 of
the Act permitting tender of Bonds in full payment or partial payment of any Improvement Area
No. 1 Special Taxes unless it first receives a certificate of a Special Tax Consultant that accepting
such tender will not result in the District having insufficient Net Improvement Area No. 1 Special
Tax Revenues to pay the principal of and interest on the Bonds when due.
L. The District shall do and perform or cause to be done and performed all acts and
things required to be done or performed by or on behalf of the District under the provisions of this
Indenture. The District warrants that upon the date of execution and delivery of the Bonds, the
conditions, acts and things required by law and this Indenture to exist, to have happened and to have
been performed precedent to and in the execution and delivery of such Bonds do exist, have
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happened and have been performed and the execution and delivery of the Bonds shall comply in all
respects with the applicable laws of the State.
SECTION 6.05 Arbitrage Certificate. On the basis of the facts, estimates and
circumstances now in existence and in existence on the date of issue of the Bonds, as determined by
the Treasurer, said Treasurer is hereby authorized to certify that it is not expected that the proceeds of
the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds. Such
certification shall be delivered to the purchaser together with the Bonds.
SECTION 6.06 Defeasance. If the District shall pay or cause to be paid, or there shall
otherwise be paid, to the Owner of an Outstanding Bond the interest due thereon and the principal
thereof, at the times and in the manner stipulated in the Indenture, then the Owner of such Bond shall
cease to be entitled to the pledge of the Net Improvement Area No. 1 Special Tax Revenues, and,
other than as set forth below, all covenants, agreements and other obligations of the District to the
Owner of such Bond under the Indenture shall thereupon cease, terminate and become void and
discharged and satisfied. In the event of the defeasance of all Outstanding Bonds, the Fiscal Agent
shall pay over or deliver to the District all money or securities held by it pursuant to the Indenture
which are not required for the payment of the principal of, premium, if any, and interest due on such
Bonds.
Any Outstanding Bond shall be deemed to have been paid within the meaning expressed
in the preceding paragraph if such Bond is paid in any one or more of the following ways:
(a) by paying or causing to be paid the principal of, premium, if any, and interest on such
Bond, as and when the same shall become due and payable;
(b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which,
together with the amounts then on deposit in the funds established pursuant to the
Indenture (exclusive of the Rebate Fund) and available for such purpose, is fully
sufficient to pay the principal of, premium, if any, and interest on such Bond, as and
when the same shall become due and payable; or
(c) by depositing with the Fiscal Agent or an escrow bank appointed by the District, in
trust, noncallable Permitted Investments of the type described in subparagraph 1 of
the definition thereof, in such amount as an Independent Accountant shall determine
(as set forth in a verification report from such Independent Accountant) will be
sufficient, together with the interest to accrue thereon and moneys then on deposit in
the funds established under the Indenture (exclusive of the Rebate Fund) and
available for such purpose, together with the interest to accrue thereon, to pay and
discharge the principal of, premium, if any, and interest on such Bond, as and when
the same shall become due and payable;
then, at the election of the District, and notwithstanding that any Outstanding Bonds shall not have
been surrendered for payment, all obligations of the District under the Indenture with respect to such
Bond shall cease and terminate, except for the obligation of the Fiscal Agent to pay or cause to be
paid to the Owners of any such Bond not so surrendered and paid, all sums due thereon and except
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for the covenants of the District to preserve the exclusion of the interest on the Bonds from gross
income for federal income tax purposes. Notice of such election shall be filed with the Fiscal Agent
not less than ten (10) days prior to the proposed defeasance date, or such shorter period of time as
may be acceptable to the Fiscal Agent.
In connection with a defeasance under (b) or (c) above, there shall be provided to the District and the
Fiscal Agent (i) a report of the Independent Accountant verifying the determination made pursuant to
paragraph (b) or (c) above, as applicable (the “Verification Report”) stating its opinion as to the
sufficiency of the moneys or securities deposited with the Fiscal Agent or the escrow bank, together
with the interest to accrue thereon and moneys then on deposit in the funds established under the
Indenture (exclusive of the Rebate Fund) and available for such purpose, together with the interest to
accrue thereon to pay and discharge the principal of, premium, if any, and interest on all such Bonds
to be defeased in accordance with the Indenture as and when thesame shall become due and payable,
and (ii) an opinion of Bond Counsel (which may rely upon the opinion of the Independent
Accountant) to the effect that the Bonds being defeased have been defeased in accordance with the
Indenture and are no longer Outstanding. The Verification Report and opinion of Bond Counsel
shall be acceptable in form and substance to the District, and addressed to the District and the Fiscal
Agent.
SECTION 6.07 Fiscal Agent. The District hereby appoints U.S. Bank National
Association as Fiscal Agent for the Bonds. The Fiscal Agent is hereby authorized to and shall mail
or otherwise provide for the payment of interest payments to the Bondholders, and upon written
instruction of the District shall select Bonds for redemption, give notice of redemption of Bonds and
maintain the Bond Register. The Fiscal Agent is hereby authorized to pay the principal of and
premium, if any, on the Bonds when the same are duly presented to it for payment at maturity or on
call and redemption, to provide for the registration of transfer and exchange of Bonds presented to it
for such purposes, to provide for the cancellation of Bonds all as provided in this Indenture, and to
provide for the authentication of Bonds, and shall perform all other duties assigned to or imposed on
it as provided in this Indenture. The Fiscal Agent shall keep accurate records of all Bonds paid and
discharged by it.
The District shall from time to time, subject to any agreement between the District and the
Fiscal Agent then in force, pay to the Fiscal Agent compensation for its services, reimburse the
Fiscal Agent for all its advances and expenditures, including, but not limited to, advances to and fees
and expenses of independent accountants or counsel employed by it in the exercise and performance
of its powers and duties hereunder, and indemnify and hold the Fiscal Agent, its officers, directors,
agents and employees, harmless from and against losses, claims, expenses and liabilities not arising
from its own negligence or willful misconductwhich it may incur in the exercise and performance of
its powers and duties hereunder. Such obligations shall survive the termination or discharge of this
Indenture.
The District may at any time at its sole discretion remove the Fiscal Agent initially appointed,
and any successor thereto, by delivering to the Fiscal Agent a written notice of its decision to remove
the Fiscal Agent and may appoint a successor or successors thereto, provided that any such
successor, other than the Treasurer, shall be a bank or trust company having a combined capital
(exclusive of borrowed capital) and surplus of at least fifty million dollars ($50,000,000), and subject
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to supervision or examination by Federal or State authority. Any removal shall become effective
only upon acceptance of appointment by the successor Fiscal Agent or the Treasurer. If any bank or
trust company appointed as a successor publishes a report of condition at least annually, pursuant to
law or to the requirements of any supervising or examining authority above referred to, then for the
purposes of this Section the combined capital and surplus of such bank or trust company shall be
deemed to be its combined capital and surplus as set forth in its most recent report of condition so
published.
The FiscalAgent may at any time resign by giving written notice to the District and by giving
to the Owners notice of such resignation, which notice shall be mailed to the Owners at their
addresses appearing in the Registration Books. Upon receiving such notice of resignation, the
District shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any
resignation or removal of the Fiscal Agent and appointment of a successor Fiscal Agent shall become
effective only upon acceptance of appointment by the successor Fiscal Agent.
SECTION 6.08 Liability of Fiscal Agent. The recitals of fact and all promises, covenants
and agreements contained herein and in the Bonds shall be taken as statements, promises, covenants
and agreements of the District, and the Fiscal Agent assumes no responsibility for the correctness of
the same and makes no representations as to the validity or sufficiency of this Indenture or of the
Bonds, and shall incur no responsibility in respect thereof, other than in connection with its duties or
obligations herein or in the Bonds or in the certificate of authentication on the Bonds. The Fiscal
Agent shall be under no responsibility or duty with respect to the issuance of the Bonds. The Fiscal
Agent shall not be liable in connection with the performance of its duties hereunder, except for its
own negligence or willful misconduct. The Fiscal Agent shall have no responsibility with respect to
any information, statement or recital in any official statement, offering memorandum or any other
disclosure material prepared or distributed with respect to the Bonds.
The Fiscal Agent shall be protected in acting upon any notice, resolution, request, consent,
order, certificate, report, bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. The Fiscal Agent may consult with counsel,
who may be counsel to the District, with regard to legal questions, and the opinion of such counsel
shall be full and complete authorization and protection in respect of any action taken or suffered
hereunder in good faith and in accordance therewith.
Whenever in the administration of its duties under this Indenture, the Fiscal Agent shall deem
it necessary or desirable that a matter be proved or established prior to taking or suffering any action
hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of bad faith on the part of the Fiscal Agent, be deemed to be conclusively proved
and established by a written certificate of the District, and such certificate shall be full warrant to the
Fiscal Agent for any action taken or suffered under the provisions of this Indenture upon the faith
thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such
matter or may require such additional evidence of such matter or may require such additional
evidence as to it may seem reasonable.
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The Fiscal Agent shall have no duty or obligation to enforce the collection of funds to be
deposited with it hereunder or as to the correctness of any amounts received, and its liability shall be
limited to the proper accounting for such funds as it actually receives.
No provision of this Indenture or any other document related hereto shall require the Fiscal
Agent to risk or advance its own funds or otherwise incur any financial liability in the performance
of its duties or the exercise of its rights hereunder.
The permissive right of the Fiscal Agent to do things enumerated in this Indenture shall not
be construed as a duty.
The Fiscal Agent may execute any of the duties of the Fiscal Agent or powers hereof and
perform any of its duties through attorneys, agents and receivers and shall not be answerable for the
conduct of the same if appointed by it with reasonable care.
The Fiscal Agent shall be responsible for only those duties expressly set forth in this
Indenture and no implied duties or obligations shall be read into this Indenture against the Fiscal
Agent.
SECTION 6.09 Provisions Constitute Contract. The provisions of this Indenture shall
constitute a contract between the District and the Bondowners and the provisions hereof shall be
enforceable by any Bondowner for the equal benefit and protection of all Bondowners similarly
situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at
law or in equity that is now or may hereafter be authorized under the laws of the State in any court of
competent jurisdiction. Said contract is made under and is to be construed in accordance with the
laws of the State.
No remedy conferred hereby upon any Bondowner is intended to be exclusive of any other
remedy, but each such remedy is cumulative and in addition to every other remedy and may be
exercised without exhausting and without regard to any other remedy conferred by the Act or any
other law of the State. No waiver of any default or breach of duty or contract by any Bondowner
shall affect any subsequent default or breach of duty or contract or shall impair any rights or
remedies on said subsequent default or breach. No delay or omission of any Bondowner to exercise
any right or power accruing upon any default shall impair any such right or power or shall be
construed as a waiver of any such default or acquiescence therein. Every substantive right and every
remedy conferred upon the Bondowners may be enforced and exercised as often as may be deemed
expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be
brought or taken and should said suit, action or proceeding be abandoned or be determined adversely
to the Bondowners then, and in every such case, the District and the Bondowners shall be restored to
their former positions, rights and remedies as if such suit, action or proceeding had not been brought
or taken.
After the issuance and delivery of the Bonds, this Indenture shall be irrevocable, but shall be
subject to modification to the extent and in the manner provided in this Indenture, but to no greater
extent and in no other manner.
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SECTION 6.10 CUSIP Numbers. CUSIP identification numbers, if available, will be
imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the
Bonds and no liability shall hereafter attach to the District or the Fiscal Agent, or any of the officers
or agents thereof because of or on account of said numbers.
SECTION 6.11 Severability. If any covenant, agreement or provision, or any portion
thereof, contained in this Indenture, or the application thereof to any person or circumstance,is held
to be unconstitutional, invalid or unenforceable, the remainder of this Indenture and the application
of any such covenant, agreement or provision, or portion thereof, to any other persons or
circumstances, shall be deemed severable and shall not be affected, and this Indenture and the Bonds
issued pursuant hereto shall remain valid and the Bondholder shall retain all valid rights and benefits
accorded to them under this Indenture and the Constitution and laws of the State of California. If the
provisions relating to the appointment and duties of a Fiscal Agent are held to be unconstitutional,
invalid or unenforceable, said duties shall be performed by the Treasurer.
SECTION 6.12 Unclaimed Money. All money which the Fiscal Agent shall have
received from any source and set aside for the purpose of paying or redeeming any of the Bonds shall
be held in trust for the respective owners of such Bonds, but any money which shall be so set aside or
deposited by the Fiscal Agent and which shall remain unclaimed by the Owners of such Bonds for a
period of one year after the date on which any payment or redemption with respect to such Bonds
shall have become due and payable shall be transferred to the District; provided, however, that the
Fiscal Agent, before making such payment, shall cause notice to be mailed to the Owners of such
Bonds, by first-class mail, postage prepaid, not less than 90 days prior to the date of such payment to
the effect that said money has not been claimed and that after a date named therein any unclaimed
balance of said money then remaining will be transferred to the District. Thereafter, the Owners of
such Bonds shall look only to the District for payment and then only to the extent of the amount so
received without any interest thereon.
SECTION 6.13 Nonpresentment of Bonds. Except as otherwise provided in Section 6.12
hereof, in the event any Bonds shall not be presented for payment when the principal thereof
becomes due, if funds sufficient to pay such Bonds shall be held by the Fiscal Agent for the benefit
of the Owners thereof, all liability of the District to the Owners thereof shall forthwith cease and be
completely discharged and thereupon it shall be the duty of the Fiscal Agent to hold such funds
(subject to Section 6.12 hereof), without liability forinterest thereon, for the benefit of the Owners of
such Bonds, who shall thereafter be restricted exclusively to such funds for any claim of whatever
nature on, or with respect to, such Bonds.
SECTION 6.14 Continuing Disclosure. The District hereby covenants and agrees that it
will comply with and carry out all of the provisions of that certain Continuing Disclosure Agreement
dated as of __________ 1, 2018 between the District and Willdan Financial Services (the
“Continuing Disclosure Agreement”). Notwithstanding anyother provision of this Indenture, failure
of the District to comply with the Continuing Disclosure Agreement shall not be considered an Event
of Default under the provisions of this Indenture.
SECTION 6.15 Execution of Documents and Proof of Ownership by Owners. Any
request, consent, declaration or other instrument which this Indenture may require or permit to be
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executed by Owners may be in one or more instruments of similar tenor, and shall be executed by
Owners in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any
Owner or his attorney of such a request, consent, declaration or other instrument, or of a writing
appointing such an attorney, may be proved by the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act,
that the person signing such request, declaration or other instrument or writing acknowledged to him
the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such a
notary public or other officer.
Any request, consent, declaration or other instrument or writing of the Owner of any Bond
shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the
District or the Fiscal Agent in good faith and in accordance therewith.
SECTION 6.16 Notices to and Demands on District and Fiscal Agent. Any notice or
demand which by any provision of this Indenture is required or permitted to be given or served by
the Fiscal Agent to or on the District may be given or served by being deposited postage prepaid
(first class, registered or certified) in a post office letter box addressed (until another address is filed
by the District with the Fiscal Agent) as follows:
City of Chula Vista
Finance Department
276 Fourth Avenue
Chula Vista, CA 91910
Attention: Director of Finance/Treasurer
RE: Community Facilities District No. 16-I
(Millenia) Improvement Area No. 1
2018 Special Tax Bonds
Any notice or demand which by any provision of this Indenture is required or permitted to be
given or served by the District to or on the Fiscal Agent may be given or served by being deposited
postage prepaid (first class, registered or certified) in a post office letter box addressed (until another
address is filed by the Fiscal Agent with the District) as follows:
U.S. Bank National Association
Attn: Corporate Trust
633 West Fifth Street, 24th Floor
Los Angeles, CA 90071
Reference: Chula Vista CFD
SECTION 6.17 Applicable Law. This Indenture shall be governed by and enforced in
accordance with the laws of the State of California applicable to contracts made and performed in the
State of California.
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SECTION 6.18 Payment on Business Day. In any case where the date of the payment of
interest on or of principal (and premium, if any) of the Bonds or the date fixed for redemption is
other than a Business Day, the payment of interest or principal (and premium, if any) need not be
made on such date but may be made on the next succeeding day which is a Business Day with the
same force and effect as if made on the date required, and no interest shall accrue for the period from
and after such date.
SECTION 6.19 Counterparts. This Indenture may be executed in counterparts, each of
which shall be deemed an original.
ARTICLE VII
BOND FORM
SECTION 7.01 Form of Bonds. The format of the Bonds as authorized and to be issued
for these proceedings shall be substantially in the form as set forth in the attached, referenced and
incorporated Exhibit “A”.
SECTION 7.02 Temporary Bonds. Any Bonds issued under this Indenture may be
initially issued in temporary form exchangeable for definitive bonds. The Bonds may be issued as
one temporary bond with an attached maturity schedule and interest rate schedule to represent all
Bonds. The temporary bond may be printed, lithographed or typewritten, shall be of such
denominations as may be determined by the District and may contain such references to any of the
provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the
District in substantially the same manner as provided in Section 2.06 hereof. If the District issues one
or more temporary Bonds, it will execute and furnish definitive Bonds without delay upon the
request of any Owner and thereupon the temporary bonds may be surrendered for cancellation at the
Principal Corporate Trust Office of the Fiscal Agent, and the District shall deliver in exchange for
such temporary bonds an equal aggregate principal amount of definitive Bonds of the same interest
rates and maturities. Until so exchanged, the temporary bonds shall be entitled to the same benefits
under this Indenture as definitive Bonds issued hereunder.
ARTICLE VIII
EVENT OF DEFAULT
SECTION 8.01 Events of Default. The following events shall be Events of Default under
this Indenture.
(a) Default in the due and punctual payment of the principal of any Bond when and as
the same shall becomedue and payable, whether at maturity as therein expressed, by
proceedings for redemption, by declaration or otherwise.
(b) Default in the due and punctual payment of interest on any Bond when and as such
interest shall become due and payable.
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(c) Default by the District in the observance of any of the other covenants, agreements or
conditions on its part in this Indenture or in the Bonds contained, if such default shall
have continued for a period of thirty (30) days after written notice thereof, specifying
such default and requiring the same to be remedied, shall have been given to the
District by the Fiscal Agent or to the District and the Fiscal Agent by the Owners of
not less than twenty-five percent (25%) in aggregate principal amount of the Bonds
at the time Outstanding; provided that such default (other than a default arising from
nonpayment of the Fiscal Agent’s fees and expenses, which must be cured within
such 30-day period unless waived by the Fiscal Agent) shall not constitute an Event
of Default under this Indenture if the District shall commence to cure such default
within said thirty (30) day period and thereafter diligently and in good faith shall cure
such default within a reasonable period of time; or
(d) The filing by the District of a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the
United States of America, or if a court of competent jurisdiction shall approve a
petition, filed with or without the consent of the District, seeking reorganization
under the federal bankruptcy laws or any other applicable law of the United States of
America, or if, under the provisions of any other law for the relief or aid of debtors,
any court of competent jurisdiction shall assume custody or control of the District or
of the whole or any substantial part of its property.
SECTION 8.02 Application of Revenues and Other Funds after Default. If a default in
the payment of the Bonds shall occur and be continuing, all revenues and any other funds then held
or thereafter received under any of the provisions of this Indenture shall be applied as follows and in
the following order:
A. To the payment of any expenses necessary in the opinion of the District to protect the
interest of the owners of the Bonds and payment of reasonable charges and expenses of the Fiscal
Agent (including reasonable fees and disbursements of its counsel) incurred in and about the
performance of its powers and duties under this Indenture;
B. To the payment of the principal of and interest then due with respect to the Bonds
(upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially
paid, or surrender thereof if fully paid) subject to the provisions of this Indenture, as follows:
First: To the payment to the persons entitled thereto of all installments of interest then due in
the order of the maturity of such installments, and, if the amount available shall not be sufficient to
pay in full any installment or installments maturing on the same date, then to the payment thereof
ratably, according to the amounts due thereon, to the persons entitled thereto, without any
discrimination or preference; and
Second: To the payment to the persons entitled thereto of the unpaid principal of any Bonds
which shall have become due, whether at maturity or by call for redemption, with interest on the
overdue principal at the rate borne by the respective Bonds on the date of maturity of redemption,
and if the amount available shall not be sufficient to pay in full all the Bonds, together with such
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interest, then to the payment thereof ratably, according to the amounts of principal due on such date
to the persons entitled thereto, without discrimination or preference.
(Remainder of page intentionally left blank)
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IN WITNESS WHEREOF, the District and the Fiscal Agent have executed this Bond
Indenture effective the date first above written.
COMMUNITY FACILITIES DISTRICT NO. 16-I
(MILLENIA)
By:
DIRECTOR OF FINANCE/TREASURER
U.S. BANK NATIONAL ASSOCIATION
as Fiscal Agent
By:
AUTHORIZED OFFICER
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EXHIBIT “A” – FORM OF BOND
R - __$_________
United States of America
State of California
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
Interest Rate Maturity Date Bond Date CUSIP No.
%September 1, 20___ _________ ___, 2018 _____________
Registered Owner: Cede & Co.
Principal Amount:
City of Chula Vista Community Facilities District No. 16-I (Millenia) (the “District”),
situated in Chula Vista, California, for value received, hereby promises to pay, solely from Net
Improvement Area No. 1 Special Tax Revenues (as hereafter defined), to the registered owner named
above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as
hereinafter provided, the principal amount set forth above and to pay interest on such principal
amount semiannually on each March 1and September 1, commencing September 1, 2018, (each an
“Interest Payment Date”) at the interest rate set forth above, until the principal amount hereof is paid
or made available for payment. The principal of and premium, if any, on this Bond are payable to the
registered owner hereof in lawful money of the United States of America upon presentation and
surrender of this Bond at maturity or redemption at the corporate trust office or agency of U.S. Bank
National Association (the “Fiscal Agent”) in Los Angeles, California(or such other office designated
by the Fiscal Agent). Interest on this Bond is payable from the Interest Payment Date next preceding
the date of its authentication, unless (i) such date of authentication is an Interest Payment Date, in
which event interest shall be payable from such date of authentication, (ii) the date of authentication
is after the 15th calendar day of the month preceding the Interest Payment Date (the “Record Date”)
but prior to the immediately succeeding Interest Payment Date, in which event interest shall be
payable from the Interest Payment Date immediately succeeding the date of authentication or (iii) the
date of authentication is prior to the close of business on the first Record Date, in which event
interest shall be payable from the Bond Date above; provided, however, that if at the time of
authentication of this Bond, interest is in default, interest on this Bond shall be payable from the last
Interest Payment Date to which the interest has been paid or made available for payment. Interest on
this Bond shall be payable by check of the Fiscal Agent mailed first class, postage prepaid, to the
registered owner hereof at such registered owner’s address as it appears on the registration books
maintained by the Fiscal Agent as of the close of business on the Record Date preceding the Interest
Payment Date or, upon request in writing prior to the Record Date received from a registered owner
of at least $1,000,000 in aggregate principal amount of the Bonds, by wire transfer in immediately
available funds to an account in the United States of America designated by such registered owner.
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This Bond is one of a duly authorized issue of the “City of Chula Vista Community Facilities
District No. 16-I(Millenia) Improvement Area No. 1 2018Special Tax Bonds”(the “Bonds”) issued
in the aggregate principal amount of $_________pursuant to the Mello-Roos Community Facilities
Act of 1982, constituting Sections 53311, et seq. of the California Government Code, as amended
(the “Act”) andthe City of Chula Vista Community Facilities District Ordinance enacted pursuant to
the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the
Constitution of the State of California(the “Ordinance”), for the purpose offinancing certain public
improvements in and for the District. The creation of the Bonds and the terms and conditions thereof
are provided for by a Bond Indenture (the “Indenture”) dated as of __________ 1, 2018, and this
reference incorporates the Indenture herein, and by acceptance hereof the owner of this Bond assents
to said terms and conditions. All capitalized terms used herein shall have the same meaning as set
forth in the Indenture unless otherwise specified herein. The Indenture is authorized under, this Bond
is issued under, and both are to be construed in accordance with, the laws of the State of California.
Pursuant to the Act and the Indenture, the principal of, premium, if any, and interest on this
Bond are payable solely from, and shall be secured by a pledge of and lien upon, the proceeds of the
Improvement Area No. 1 Special Tax (as defined in the Indenture) levied and received by the District
and the proceeds of the redemption and sale of property sold as a result of foreclosure of the lien of
the Improvement Area No. 1 Special Tax to the amount of such lien and penalties thereon minus
amounts applied annually to fund the Administrative Expense Requirement (together, the “Net
Improvement Area No. 1 Special Tax Revenues”) and certain funds held under the Indenture. The
Bonds are not general obligations of the City of Chula Vista or the District, but are special, limited
obligations of the District, and neither the faith and credit nor the taxing power of the District, the
City of Chula Vista, the State of California, or any political subdivision thereof is pledged to the
payment of the Bonds. Except for the Net Improvement Area No. 1 Special Tax Revenues, no other
revenues or taxes are pledged to the payment of the Bonds.
The District will review the public records of the County of San Diego, California, in
connection with the collection of the Improvement Area No. 1 Special Taxes and will commence and
diligently pursue to completion, judicial foreclosure proceedings against (i) properties under
common ownership with delinquent Improvement Area No. 1 Special Taxes in the aggregate of
$5,000 or more by October 1 following the close of the Fiscal Year in which the Improvement Area
No. 1 Special Taxes were due, and (ii) against all properties with delinquent Improvement Area No.
1 Special Taxes in the aggregate of $5,000 or more by October 1 following the close of any fiscal
year if the amount in the Reserve Fund is less than the Reserve Requirement.
The Bonds may be redeemed at the option of the District prior to maturity as a whole, or in
part on any Interest Payment Date, from such maturities as are selected by the District, and by lot
within a maturity, from any source of funds, at the following redemption prices (expressed as
percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to
the date of redemption:
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Redemption Date Redemption Price
September 1, 20__ through March 1, 20__ 103%
September 1, 20__ through March 1, 20__ 102
September 1, 20__ through March 1, 20__ 101
September 1, 20__ and thereafter 100
The Bonds are subject to extraordinary mandatory redemption on any Interest Payment Date,
prior to maturity, as a whole, or in part as nearly as practicable on a pro rata basis among maturities
in authorized denominations, from the amounts deposited in the Redemption Fund in connection
with the prepayment of Improvement Area No. 1 Special Taxes pursuant to the Improvement Area
No. 1 Special Tax RMA. Such extraordinary mandatory redemption of the Bonds shall be at the
following redemption prices (expressed as percentages of the principal amount of the Bonds to be
redeemed), together with accrued interest thereon to the date of redemption:
Redemption Date Redemption Price
September 1, 20__ through March 1, 20__ 103%
September 1, 20__ through March 1, 20__ 102
September 1, 20__ through March 1, 20__ 101
September 1, 20__ and thereafter 100
The Bonds maturing on September 1, 20__ are subject to mandatory sinking fund
redemption, in part, by lot, on September 1 of each year commencing September 1, 20__ at a
redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued and
unpaid interest thereon to the date fixed for redemption, without premium, in the aggregate principal
amounts and in the years shown in the following redemption schedule.
Redemption Date
(September 1)
Principal
Amount
$
The Bonds maturing on September 1, 20__ are subject to mandatory sinking fund
redemption, in part, by lot, on September 1 of each year commencing September 1, 20__ at a
redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued and
unpaid interest thereon to the date fixed for redemption, without premium, in the aggregate principal
amounts and in the years shown in the following redemption schedule.
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Redemption Date
(September 1)
Principal
Amount
$
Notice of redemption with respect to the Bonds to be redeemed shall be given by the Fiscal
Agent to the registered owner thereof at least 30 days but not more than 45 days prior to the
redemption date, by first class mail, postage prepaid, at their addresses appearing on the Bond
Register; provided, however, so long as the Bonds are registered in the name of the Nominee, notice
shall be given in such manner as complies with the requirements of the Depository.
This Bond shall be issued only in fully registered form in the denominations of $5,000 or any
integral multiple thereof. No transfer hereof shall be valid for any purpose unless made by the
registered owner, by execution of the form of assignment printed hereon, and authenticated as herein
provided, and the principal hereof, interest hereon and any redemption premium shall be payable
only to the registered owner or to such owner’s order. Interest on this Bond shall be payable to the
person whose name appears upon the Bond Register as the registered owner hereof as of the close of
business on the Record Date or to such person’s order. The Fiscal Agent shall require the registered
owner requesting transfer or exchange to pay any tax or other governmental charge required to be
paid with respect to such transfer or exchange. The Fiscal Agent shall not be required to register,
transfer or make exchanges of (i) Bonds for a period of 15 days next preceding the date of any
selection of Bonds to be redeemed or (ii) any Bonds chosen for redemption.
This Bond shall not become valid or obligatory for any purpose until the certificate of
authentication hereon printed shall have been dated and manually signed by the Fiscal Agent.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required by law to exist, happen and be performed precedent to and in the issuance of this
Bond have existed, happened and been performed in due time, form and manner as required by law,
and that the amount of this Bond, together with all other indebtedness of the District, does not
exceed any debt limit prescribed by the laws or Constitution of the State of California.
IN WITNESS WHEREOF, the City of Chula Vista Community Facilities District No. 16-I
(Millenia), has caused this Bond to be dated as of ___________, 2018and to be signed by the Mayor
of the City of Chula Vista by his or her manual signature and attested by the City Clerk by his or her
manual signature.
_____________________________________
City Clerk, City of Chula Vista, for and on
behalf of the City of Chula Vista Community
Facilities District No. 16-I (Millenia)
_____________________________________
Mayor, City of Chula Vista, for and on behalf
of the City of Chula Vista Community
Facilities District No. 16-I (Millenia)
2018-05-15 Agenda Packet Page 616
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60297.00053\30447001.9
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within defined Indenture.
Dated: U.S. Bank National Association,
as Fiscal Agent
By:
Authorized Officer
2018-05-15 Agenda Packet Page 617
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60297.00053\30447001.9
ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address, and Tax Identification or Social Security Number of Assignee)
the within-mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s),
______________________________________________________________________attorney, to
transfer the same on the books of the Fiscal Agent with full power of substitution in the premises.
Dated: _____________________
Signature
Guaranteed:____________________________
NOTICE: Signature must be guaranteed by a
qualified guarantor.
______________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears on the
face of the within Bond in every particular,
without alteration or enlargement or any change
whatsoever
2018-05-15 Agenda Packet Page 618
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EXHIBIT “B”
REQUISITION FOR COSTS OF ISSUANCE
REQUISITION NO. PERTAINING TO DISBURSEMENTS
FROM COSTS OF ISSUANCE FUND FOR COSTS OF ISSUANCE
The undersigned hereby states and certifies:
(i) that the undersigned is the duly appointed, qualified and acting Director of
Finance/Treasurer of the City of Chula Vista (the “City”) and as such is an Authorized
Representative of the District within the meaning of the Bond Indenture hereinafter defined;
(ii) that, pursuant to Section 3.04 of the Bond Indenture, dated as of __________ 1, 2018
(the “Bond Indenture”), between U.S. Bank National Association, as fiscal agent (the “Fiscal
Agent”), by and between the Fiscal Agent and the District, the undersigned hereby requests the Fiscal
Agent to disburse, upon receipt of an invoice or invoices from the payees designated on Attachment
A attached hereto and incorporated herein by this reference, from the from the Cost of Issuance
Fund established under the Bond Indenture to each such payee, amounts not to exceed the respective
sum set forth in Attachment A opposite the designation for each such payee;
(iii) that such payments should be made in accordance with the payment instructions
contained in such invoices; and
(iv) that the amounts to be disbursed are properly chargeable to the Cost of Issuance Fund.
Date: City of Chula Vista Community Facilities District
No. 16-I (Millenia)
By:
David Bilby, Director of Finance/Treasurer
City of Chula Vista
2018-05-15 Agenda Packet Page 619
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60297.00053\30447001.9
ATTACHMENT A
COSTS OF ISSUANCE
Payee Description of Cost of Issuance Amount
2018-05-15 Agenda Packet Page 620
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EXHIBIT “C”
REQUISITION FOR COSTS
REQUISITION NO. ___ PERTAINING TO DISBURSEMENTS
FROM THE PROJECT FUND
TO FUND PROJECT COSTS
The undersigned hereby states and certifies:
(i) that the undersigned is the duly appointed, qualified and acting Director of
Finance/Treasurer of the City of Chula Vista (the “City”) and as such is an Authorized
Representative of the District within the meaning of the Bond Indenture hereinafter defined;
(ii) that, pursuant to Section 3.05of the Bond Indenture, dated as of __________ 1, 2018
(the “Bond Indenture”), between U.S. Bank National Association, as fiscal agent (the “Fiscal
Agent”), by and between the Fiscal Agent and the District, the undersigned hereby requests the Fiscal
Agent to disburse to the payees designated on Attachment A attached hereto and incorporated herein
by this reference, from the Project Fund established under the Bond Indenture to each such payee, the
respective sum set forth in Attachment A opposite the designation for each such payee;
(iii) that such payments should be made in accordance with the payment instructions
contained in Attachment A; and
(iv) that the amounts to be disbursed are properly chargeable to the Project Fund.
Date: City of Chula Vista Community Facilities District
No. 16-I (Millenia)
By:
David Bilby, Director of Finance/Treasurer
City of Chula Vista
2018-05-15 Agenda Packet Page 621
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60297.00053\30447001.9
ATTACHMENT A
PROJECT COSTS
Payee Description of Project Costs Amount
2018-05-15 Agenda Packet Page 622
BOND PURCHASE AGREEMENT
$________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
________, 2018
City of Chula Vista Community Facilities District No. 16-I (Millenia)
c/o City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attention: Director of Finance/Treasurer
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”)
offers to enter into this Bond Purchase Agreement (this “Agreement”) with City of Chula
Vista Community Facilities District No. 16-I (Millenia) (the “District”), which, upon your
acceptance of this offer, will be binding upon the District and the Underwriter. This offer
is made subject to the acceptance by the District of this Agreement on or before 11:59
p.m. on the date set forth above. Terms not otherwise defined herein have the meanings
given them in the Indenture described below.
1. Upon the terms and conditions and in reliance upon the respective
representations, warranties and covenants herein, the Underwriter hereby agrees to
purchase from the District, and the District hereby agrees to sell to the Underwriter, all
(but not less than all) of the above-captioned bonds (the “Bonds”) at a purchase price
(the “Purchase Price”) of $________ (equal to the par amount of the Bonds
($________), plus net original issue premium of $________, less an Underwriter’s
discount of $________).
The Bonds will be issued by the District under the Mello-Roos Community
Facilities Act of 1982 (constituting Section 53311 et seq. of the California Government
Code) (the “Act”), the City of Chula Vista Community Facilities District Ordinance (the
“City CFD Ordinance,” and together with the Act, the “Community Facilities District Law”)
and a resolution adopted on ________, 2018 (the “Bond Resolution”) by the City
Council (the “City Council”) of the City of Chula Vista (the “City”) acting as the
legislative body of the District.
The special taxes that provide a source of payment for the Bonds (the “Special
Taxes”) will be levied on property within Improvement Area No. 1 of the District under
Ordinance No. 2016-3375 adopted by the City Council on September 20, 2016 (the
“Ordinance”). In addition to the Ordinance, the City Council adopted the following in
connection with initial formation of the District and the levy of the Special Taxes: (i)
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Resolution No. 2016-154 (the “Resolution of Intention to Form the District”), (ii)
Resolution No. 2016-155 (the “Resolution of Intention to Incur Bonded
Indebtedness”), (iii) Resolution No. 2016-185 (“Resolution Declaring Necessity to
Incur Bonded Indebtedness”), (iv) Resolution No. 2016-184 (the “Resolution of
Formation”), and (v) Resolution No. 2016-186 (the “Resolution Declaring Election
Results”; together, the “Formation Resolutions and Ordinance”). Together, the City
CFD Ordinance, the Bond Resolution and the Formation Resolutions and Ordinance are
referred to as the “Resolutions and Ordinances.”
The Bonds will be issued under the terms of a Bond Indenture (the “Indenture”),
dated as of ________ 1, 2018, by and between the District and U.S. Bank National
Association, as Fiscal Agent (the “Fiscal Agent”). The proceeds of the sale of the
Bonds will be used by the District to (i) pay the costs of forming the District, (ii) pay the
cost and expense of acquisition and construction of certain public facilities required in
connection with the development of the District, (iii) pay capitalized interest on the Bonds
through September 1, 2018, (iv) fund a Reserve Fund securing the Bonds, (v) pay costs
of issuance of the Bonds, and (vi) make an initial deposit to the Administrative Expense
Fund. Proceeds of the Bonds will be applied in accordance with the Indenture.
The District acknowledges and agrees that: (i) the primary role of the Underwriter
is to purchase securities for resale to investors in an arms-length commercial transaction
between the District and the Underwriter and that the Underwriter has financial and other
interests that differ from those of the District, and in connection therewith and with the
discussions, undertakings and procedures leading up to the consummation of such
transaction, the Underwriter is and has been acting solely as a principal and is not acting
as the agent or fiduciary of the District, (ii) the Underwriter is not acting as a municipal
advisor (within the meaning of Section 15B of the Securities Exchange Act of 1934, as
amended), financial advisor or fiduciary to the District or any other person or entity and
has not assumed any advisory or fiduciary responsibility to the District with respect to the
transaction contemplated hereby and the discussions, undertakings and proceedings
leading thereto (irrespective of whether the Underwriter has provided other services or is
currently providing other services to the District on other matters), (iii) the only
obligations the Underwriter has to the District with respect to the transaction
contemplated hereby expressly are set forth in this Agreement, except as otherwise
provided by applicable rules and regulations of the Securities and Exchange
Commission or the rules of the MSRB or other law, and (iv) the District has consulted its
own legal, accounting, tax, municipal, financial and other advisors, as applicable, to the
extent it has deemed appropriate in connection with the transaction contemplated
herein. The District acknowledges that it has previously provided the Underwriter with an
acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of
the MSRB.
2. The Bonds will mature on the dates and in the principal amounts and will
bear interest at the rates (and have the redemption terms) as set forth in Exhibit A
hereto. The Underwriter agrees to make a bona fide public offering of all of the Bonds at
the offering prices set forth on the cover of the Final Official Statement described below.
Additional details related to the establishment of the issue price of the Bonds is set forth
in Section 14.
3. The District agrees to deliver to the Underwriter as many copies of the Final
Official Statement (defined below), relating to the Bonds, as are requested by the
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Underwriter for delivery to each of its customers purchasing Bonds no later than the
settlement date of the transaction.
The District has authorized and approved the Preliminary Official Statement
dated ________ 1, 2018 (the “Preliminary Official Statement”) and the final Official
Statement dated the date hereof (the “Final Official Statement”) and consents to their
distribution and use by the Underwriter and the execution and approval of the Final
Official Statement by a duly authorized officer of the District. The District deems such
Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 of the
Securities and Exchange Commission (“Rule 15c2-12”), except for information allowed
by Rule 15c2-12 to be omitted, and has executed a certificate to that effect in the form of
Exhibit D.
In connection with issuance of the Bonds, and in order to assist the Underwriter
in complying with Rule 15c2-12, the District will execute a Continuing Disclosure
Agreement, dated as of ________ 1, 2018 (the “Continuing Disclosure Agreement”).
The form of the Continuing Disclosure Agreement is attached as Appendix F to the
Preliminary Official Statement.
4. The District represents and warrants to the Underwriter that:
(a) The District is duly organized and validly existing as a community
facilities district under the laws of the State of California (the
“State”), and has the full legal right, power and authority, among
other things, (i) upon satisfaction of the conditions in this Agreement
and the Indenture, to issue the Bonds as provided herein, and (ii) to
secure the Bonds in the manner set forth in the Indenture.
(b) The City Council has the full legal right, power and authority to
adopt the Resolutions and Ordinances, and the District has the full
legal right, power and authority (i) to enter into this Agreement, the
Indenture, and the Continuing Disclosure Agreement, the
Acquisition/Financing Agreement dated as of February 6, 2018, by
and among the City, the District and SLF IV-Millenia as defined
herein (the “Acquisition Agreement”) (collectively, the “District
Documents”), (ii) to issue, sell and deliver the Bonds to the
Underwriter as provided herein, and (iii) to carry out and
consummate all other transactions on its part contemplated by the
Final Official Statement and each of the District Documents, and the
District and the City Council have complied with all provisions of
applicable law, including the Act, in all matters relating to such
transactions.
(c) The District has duly authorized (i) the execution and delivery by the
District of the Bonds and the execution, delivery and due
performance by the District of its obligations under the District
Documents, (ii) the distribution and use of the Preliminary Official
Statement and execution, delivery and distribution of the Final
Official Statement, and (iii) the taking of any and all such action as
may be required on the part of the District to carry out, give effect to
and consummate the transactions on its part contemplated by such
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instruments. All consents or approvals necessary to be obtained by
the District in connection with the foregoing have been received,
and the consents or approvals so received are still in full force and
effect.
(d) The Resolutions and Ordinances have been duly adopted by the
City Council and are in full force and effect; and the District
Documents, when executed and delivered by the District and the
other party thereto, will constitute a legal, valid and binding
obligation of the District enforceable against the District in
accordance with their terms, except as enforceability thereof may be
limited by bankruptcy, insolvency or other laws affecting creditors’
rights generally.
(e) When delivered to the Underwriter, the Bonds will have been duly
authorized by the City Council and duly executed, issued and
delivered by the District and will constitute legal, valid and binding
special obligations of the District enforceable against the District in
accordance with their respective terms, except as enforceability
thereof may be limited by bankruptcy, insolvency or other laws
affecting creditors’ rights generally, and will be entitled to the benefit
and security of the Indenture.
(f) The information (excluding information relating to The Depository
Trust Company and its book-entry system, CUSIP numbers,
information provided by the Underwriter and information under the
captions “PROPERTY OWNERSHIP AND DEVELOPMENT,”
“IMPROVEMENT AREA NO. 1 - Market Absorption Study” and “–
Appraisal Report and Supplement to Appraisal Report,” together,
the “Excluded Information”) contained in the Preliminary Official
Statement is, and as of the Closing Date such information in the
Final Official Statement will be true and correct in all material
respects, and except for the Excluded Information as to which no
view is expressed, the Preliminary Official Statement does not as of
its date and the Final Official Statement will not as of the Closing
Date contain any untrue or misleading statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(g) If, at any time up to and including 25 days after the End of the
Underwriting Period (as defined below), any event known to the
officers of the District participating in the issuance of the Bonds
occurs with respect to the District or the City as a result of which the
Final Official Statement as then amended or supplemented includes
an untrue statement of a material fact, or omit s to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the
District shall promptly notify the Underwriter in writing of such event
and shall provide a supplement to the Underwriter so that the Final
Official Statement, as supplemented, does not contain an untrue
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statement or omit any material fact. Any information supplied by the
District for inclusion in any amendments or supplements to the Final
Official Statement will not contain any untrue or misleading
statement of a material fact relating to the District or the City or omit
to state any material fact relating to the District or the City necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. As used herein, the
term “End of the Underwriting Period” means the later of such time
as: (i) the Bonds are delivered to the Underwriter; or (ii) the
Underwriter does not retain, directly or as a member of an
underwriting syndicate, an unsold balance of the Bonds for sale to
the public. Unless the Underwriter gives notice to the contrary, the
End of the Underwriting Period shall be deemed to be the Closing
Date (as described in Section 7 below). Any notice delivered
pursuant to this provision shall be written notice delivered to the
District at or prior to the Closing Date, and shall specify a date
(other than the Closing Date) to be deemed the “End of the
Underwriting Period.”
(h) Neither the adoption of the Resolutions and Ordinances, the
execution and delivery of the District Documents, nor the
consummation of the transactions on the part of the District
contemplated herein or therein or the compliance by the District with
the provisions hereof or thereof will conflict with, or constitute on the
part of the District, a violation of, or a breach of or default under,
(i) any material indenture, mortgage, commitment, note or other
agreement or instrument to which the District is a party or by which
it is bound, (ii) any provision of the State Constitution or (iii) any
existing law, rule, regulation, ordinance, judgment, order or decree
to which the District or the City (or the members of the City Council
or any of its officers in their respective capacities as such) is
subject, that would have a material adverse affect on the ability of
the District to perform its obligations under the District Documents.
(i) The District has not previously issued or entered into any obligation
and the District has not entered into any contract or arrangement of
any kind which might give rise to any lien or encumbrance on the
Special Taxes.
(j) Except as is specifically disclosed in the Final Official Statement, to
the best knowledge of the District, there is no action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, pending with respect to which the
District or the District has been served with process or threatened,
which in any way questions the powers of the City Council, the City
or the District referred to in paragraph (b) above, or the validity of
any proceeding taken by the City Council in connection with the
issuance of the Bonds, or wherein an unfavorable decision, ruling or
finding could materially adversely affect the transactions
contemplated by the District Documents, or which, in any way, could
adversely affect the validity or enforceability of the Resolutions and
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Ordinances, the Bonds or the District Documents or, to the
knowledge of the District, which in any way questions the exclusion
from gross income of the recipients thereof of the interest on the
Bonds for federal income tax purposes or in any other way
questions the status of the Bonds under State tax laws or
regulations.
(k) Any certificate signed by an official of the District authorized to
execute such certificate and delivered to the Underwriter in
connection with the transactions contemplated by the District
Documents shall be deemed a representation and warranty by the
District to the Underwriter as to the truth of the statements therein
contained.
(l) The District has not been notified of any listing or proposed listing by
the Internal Revenue Service to the effect that it is a bond issuer
whose arbitrage certifications may not be relied upon.
(m) The Bonds will be paid from Net Improvement Area No. 1 Special
Tax Revenues (as defined in the Indenture) received by the District
and amounts held in certain funds and accounts established and
pledged under the Indenture.
(n) The Special Taxes may lawfully be levied in accordance with the
rate and method of apportionment of the Special Tax relating to
Improvement Area No. 1 of the District (the “Rate and Method”),
the Resolutions and Ordinances as described in the Preliminary
Official Statement and the Final Official Statement, and, when
levied, will be secured by a lien on the property on which they are
levied.
(o) The Indenture creates a valid pledge of, and first lien upon, the Net
Improvement Area No. 1 Special Tax Revenues deposited
thereunder, and the amounts held in certain funds and accounts
established and pledged under the Indenture, subject in all cases to
the provisions of the Indenture permitting the application thereof for
the purposes and on the terms and conditions set forth therein.
(p) Except as disclosed in the Final Official Statement, in the last five
years, neither the City, nor the District, nor any other entity for which
the City Council is the legislative body, has failed to comply with any
undertaking under Rule 15c2-12 in any material respect.
5. The District covenants with the Underwriter that the District will cooperate
with the Underwriter (at the cost of the Underwriter), in qualifying the Bonds for offer and
sale under the securities or Blue Sky laws of such jurisdictions of the United States as
the Underwriter may reasonably request; provided, however, that the District shall not be
required to consent to suit or to service of process, or to qualify to do business, in any
jurisdiction. The District consents to the use by the Underwriter of the District
Documents in the course of its compliance with the securities or Blue Sky laws of the
various jurisdictions.
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6. At 9:00 a.m. on ________, 2018 (the “Closing Date”) or at such other time
and/or date as shall have been mutually agreed upon by the District and the Underwriter,
the District will deliver or cause to be delivered to the Underwriter the Bonds in definitive
form duly executed and authenticated by the Fiscal Agent together with the other
documents mentioned in Section 8 hereof; and the Underwriter will accept such delivery
and pay the Purchase Price of the Bonds by delivering to the Fiscal Agent for the
account of the District a check payable in federal funds or making a wire transfer in
federal funds payable to the order of the Fiscal Agent.
The activities relating to the final execution and delivery of the Bonds and the
Indenture and the payment therefor and the delivery of the certificates, opinions and
other instruments as described in Section 8 of this Agreement shall occur at the offices
of Best Best & Krieger LLP, San Diego, California, as bond counsel to the District
(“Bond Counsel”). The payment for the Bonds and simultaneous delivery of the Bonds
to the Underwriter is herein referred to as the “Closing.” The Bonds will be delivered as
fully registered Bonds initially in denominations of $5,000 each and any integral multiple
thereof. The Bonds will be registered in the name of Cede & Co., as nomine e of The
Depository Trust Company, and will be made available for checking by the Underwriter
at such place as the Underwriter and the Fiscal Agent shall agree not less than 24 hours
prior to the Closing.
7. The Underwriter has the right to cancel its obligations to purchase the
Bonds if between the date hereof and the Closing Date:
(a) the House of Representatives or the Senate of the Congress of the
United States, or a committee of either, shall have pending before it,
or shall have passed or recommended favorably, legislation
introduced previous to the date hereof, which legislation, if enacted
in its form as introduced or as amended, would have the purpose or
effect of imposing federal income taxation upon revenues or other
income of the general character to be derived by the District or by
any similar body under the Indenture or upon interest received on
obligations of the general character of the Bonds, or of causing
interest on obligations of the general character of the Bonds, to be
includable in gross income for purposes of federal income taxation,
and such legislation, in the Underwriter’s reasonable opinion,
materially adversely affects the market price of the Bonds; or
(b) legislation shall be proposed by a committee of the House of
Representatives or the Senate of the Congress of the United States,
or legislation shall be favorably reported or re-reported by such a
committee or be introduced, by amendment or otherwise, in or be
passed by the House of Representatives or the Senate, or
recommended to the Congress of the United States for passage by
the President of the United States, or be enacted or a decision by a
federal court of the United States or the United States Tax Court
shall have been rendered, or a ruling, release, order, circular,
regulation or official statement by or on behalf of the United States
Treasury Department, the Internal Revenue Service or other
governmental agency shall have been made or proposed to be
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made having the purpose or effect, or any other action or event shall
have occurred which has the purpose or effect, directly or indirectly,
of adversely affecting the federal income tax consequences of
owning the Bonds, including causing interest on the Bonds to be
included in gross income for purposes of federal income taxation, or
imposing federal income taxation upon revenues or other income of
the general character to be derived by the District under the
Indenture or upon interest received on obligations of the general
character of the Bonds, or the Bonds and also including adversely
affecting the tax-exempt status of the District under the Code,
which, in the reasonable opinion of the Underwriter, materially
adversely affects the market price of or market for the Bonds; or
(c) legislation shall have been enacted, or actively considered for
enactment with an effective date prior to the Closing, or a decision
by a court of the United States shall have been rendered, the effect
of which is that the Bonds, including any underlying obligations, or
the Indenture, as the case may be, is not exempt from the
registration, qualification or other requirements of the Securities Act
of 1933, as amended and as then in effect, the Securities Exchange
Act of 1934, as amended and as then in effect, or the Trust
Indenture Act of 1939, as amended and as then in effect; or
(d) a stop order, ruling, regulation or official statement by the Securities
and Exchange Commission or any other governmental agency
having jurisdiction of the subject matter shall have been issued or
made or any other event occurs, the effect of which is that the
issuance, offering or sale of the Bonds, including any underlying
obligations, or the execution and delivery of the Indenture as
contemplated hereby or by the Final Official Statement, is or would
be in violation of any provision of the federal securities laws,
including the Securities Act of 1933, as amended and as then in
effect, the Securities Exchange Act of 1934, as amended and as
then in effect, or the Trust Indenture Act of 1939, as amended and
as then in effect; or
(e) any event shall have occurred or any information shall have become
known to the Underwriter which causes the Underwriter to
reasonably believe that the Final Official Statement as then
amended or supplemented includes an untrue statement of a
material fact, or omits to state any material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, and the District fails to amend or
supplement such Final Official Statement to cure such omission or
misstatement under Section 4(g); or
(f) there shall have occurred any outbreak of hostilities or any national
or international calamity or crisis, including a financial crisis, the
effect of which on the financial markets of the United States is such
as, in the reasonable judgment of the Underwriter, would materially
adversely affect the market for or market price of the Bonds; or
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(g) there shall be in force a general suspension of trading on the New
York Stock Exchange, the effect of which on the financial markets of
the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or
market price of the Bonds; or
(h) a general banking moratorium shall have been declared by federal,
New York or State authorities; or
(i) any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the District or the City; or
(j) additional material restrictions not in force as of the date hereof shall
have been imposed upon trading in securities generally by any
governmental authority or by any national securities exchange
which adversely affects the Underwriter’s ability to sell the Bonds; or
(k) the New York Stock Exchange or other national securities
exchange, or any governmental authority, shall impose, as to the
Bonds or obligations of the general character of the Bonds, any
material restrictions not now in force, or increase materially those
now in force, with respect to the extension of credit by, or the charge
to the net capital requirements of, the Underwriter; or
(l) an amendment to the federal or State constitution shall be enacted
or action taken by any federal or State court, legislative body,
regulatory body or other authority materially adversely affecting the
tax status of the District, its property, income or securities (or
interest thereon), the validity or enforceability of the Special Tax or
the ability of the District to issue the Bonds and levy the Special Tax
as contemplated by the Indenture, the Rate and Method, the
Resolution of Formation, the Ordinance and the Final Official
Statement; or
(m) the entry of any order by a court of competent jurisdiction which
enjoins or restrains the City from issuing permits, licenses or
entitlements within the District or which order, in the reasonable
opinion of the Underwriter, otherwise materially and adversely
affects development of the real property located in the District.
8. The obligation of the Underwriter to purchase the Bonds is subject (a) to the
performance by the District of its obligations to be performed by it hereunder at and prior
to the Closing, (b) to the accuracy as of the date hereof and as of the time of the Closing
of the representations and warranties of the District herein, (c) to the accuracy of, and in
reliance on, the representations and covenants of: SLF IV - Millenia, LLC, a Delaware
limited liability company (“SLF IV - Millenia”), LMC Millenia Investment Company, L.P., a
limited partnership existing under the laws of the State of California (“LMC Millenia”),
Shea Homes Limited Partnership, a limited partnership existing under the laws of the
State of California (“Shea Homes”), CalAtlantic Group, Inc., a Delaware corporation
(“CalAtlantic”), and KB HOME California LLC, a California limited liability company (“KB
-10-
Home California” and together with SLF IV - Millenia, LMC Millenia, Shea Homes, and
CalAtlantic, the “Developers”) contained in the Letters of Representation delivered in
connection with the Preliminary Official Statement and Closing Certificates delivered as
of the Closing Date, in substantially the forms attached hereto as Exhibit G, with such
additional changes as may be agreed to by the Developers and the Underwriter, and
(d) to the following conditions, including the delivery by the District of such documents as
are enumerated herein in form and substance satisfactory to the Underwriter:
(a) At the time of Closing, (i) the Final Official Statement and the District
Documents shall be in full force and effect and shall not have been
amended, modified or supplemented except as may have been
agreed to by the Underwriter, and (ii) the District shall have duly
adopted and there shall be in full force and effect such resolutions
and ordinances (including, but not limited to, the Resolutions and
Ordinances) as, in the opinion of Bond Counsel, shall be necessary
in connection with the transactions contemplated hereby.
(b) Receipt of the Bonds, executed by the District and authenticated by
the Fiscal Agent, at or prior to the Closing. The terms of the Bonds,
when delivered, shall in all instances be as described in Final
Official Statement.
(c) At or prior to the Closing, the Underwriter shall receive the following
documents in such number of counterparts as shall be mutually
agreeable to the Underwriter and the District:
(i) A final approving opinion of Bond Counsel dated the Closing
Date in the form attached to the Final Official Statement.
(ii) A letter or letters of Bond Counsel addressed to the
Underwriter, which includes a statement to the effect that Bond
Counsel’s final approving opinion may be relied upon by the
Underwriter to the same extent as if such opinion were
addressed to the Underwriter, and further provides:
(A) the statements contained in the Final Official Statement
on the cover page and under the captions
“INTRODUCTION - Sources of Payment for the Bonds,”
“INTRODUCTION - Description of the Bonds,” “THE
BONDS” (other than information relating to DTC and its
book-entry only system and information in the section
entitled “Debt Service Schedule”, as to which no opinion
need be expressed), “SOURCES OF PAYMENT FOR
THE BONDS (except information mentioned in the
section entitled “Special Taxes - Potential Application of
Backup Special Tax as a result of Development Timing”
and “– Special Taxes Are Not Within Teeter Plan” as to
which no opinion need be expressed),” and “TAX
MATTERS,” and in Appendices C and E thereto,
excluding any material that may be treated as included
under such captions by reference to other documents,
-11-
insofar as such statements expressly summarize certain
provisions of the Indenture, the Rate and Method, the Act
and the form and content of Bond Counsel’s final opinion
are accurate in all material respects;
(B) this Agreement and the Continuing Disclosure
Agreement have been duly executed and delivered by,
and constitute valid and binding obligations of, the
District, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws affecting
enforcement of creditors’ rights in general and to the
application of equitable principles if equitable remedies
are sought; and
(C) the Bonds are not subject to the registration
requirements of the Securities Act of 1933, as amended,
and the Indenture is exempt from qualification under the
Trust Indenture Act of 1939, as amended.
(iii) An letter of Stradling Yocca Carlson & Rauth, a Professional
Corporation addressed to the District and the Underwriter
(“Disclosure Counsel”), to the effect that during the course of
serving as Disclosure Counsel in connection with the issuance
of the Bonds and without having undertaken to determine
independently or assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Final Official Statement, no information came to the attention
of the attorneys in such firm rendering legal services in
connection with the issuance of the Bonds that would lead
them to believe that the Final Official Statement (excluding
therefrom the financial statements, any financial or statistical
data, assessed or appraised valuations, absorption schedules
or forecasts, charts, numbers, estimates, projections,
assumptions or expressions of opinion included in the Final
Official Statement, information regarding DTC, and the
appendices to the Final Official Statement, as to which no
opinion need be expressed), as of the date thereof or the
Closing Date, contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not
misleading.
(iv) A letter of Jones Hall, a Professional Law Corporation,
(“Underwriter’s Counsel”), dated the Closing Date,
addressed to the Underwriter and in form and substance
acceptable to the Underwriter.
(v) The Final Official Statement executed on behalf of the District
by a duly authorized officer.
-12-
(vi) Certified copies of the Resolutions and Ordinances.
(vii) Evidence of recordation in the real property records of the
County of San Diego of the Notice of Special Tax Lien relating
to Improvement Area No. 1 of the District, in the form required
by the Act.
(viii) A certificate of Willdan Financial Services, Temecula,
California (“Special Tax Consultant”), in form and substance
as set forth in Exhibit B hereto, dated as of the Closing Date.
(ix) A certificate of the District, in form and substance as set forth
in Exhibit C hereto, dated as of the Closing Date.
(x) Evidence that Federal Form 8038 has been executed by the
District and will be filed with the Internal Revenue Service.
(xi) Executed copies of the District Documents.
(xii) A non-arbitrage certificate executed by the District in form and
substance satisfactory to Bond Counsel.
(xiii) An opinion, dated the Closing Date and addressed to the
Underwriter, of the City Attorney, as counsel to the District, to
the effect that:
(A) the District is duly organized and validly existing as a
community facilities district under and by virtue of the
Constitution and laws of the State (including the Act);
(B) the City Council of the City, acting as legislative body of
the District, has the full legal right, power and authority to
adopt the Resolutions and Ordinances;
(C) the Resolutions and Ordinances were duly adopted at
meetings of the City Council, acting as legislative body of
the District which were called and held under law and
with all public notice required by law and at which a
quorum was present and acting throughout, and the
Resolutions and Ordinances are in full force and effect
and have not been amended or repealed;
(D) to their best knowledge, based on reasonable due
diligence, no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
regulatory agency, public board or body is pending with
respect to which the District has been served with
process or threatened, in any way affecting the existence
of the City, the District or the titles of the District’s
officials to their respective offices, or seeking to restrain
or to enjoin the issuance, sale or delivery of the Bonds or
-13-
the application of the proceeds thereof in accordance
with the Indenture, or the collection or application of the
Special Taxes to pay the principal of and interest on the
Bonds, or in any way contesting or affecting the validity
or enforceability of the Bonds, the District Documents or
any action of the District contemplated by any of said
documents, or in any way contesting the completeness
or accuracy of the Final Official Statement or the powers
of the District or its authority with respect to the Bonds,
the District Documents or any action on the part of the
District contemplated by any of said documents, wherein
an unfavorable decision, ruling, or finding could
materially adversely affect the validity or enforceability of
the Bonds or the District Documents;
(E) the execution and delivery of the Bonds and the District
Documents, and compliance with the provisions of each,
will not conflict with or constitute a breach of or default
under any loan agreement, note, ordinance, resolution,
indenture, contract, agreement or other instrument of
which the District is a party or is otherwise subject or
bound, a consequence of which could be to materially
and adversely affect the ability of the District to perform
its obligations under the Bonds or the District
Documents; and
(F) all approvals, consents, authorization, elections and
orders of or filings or registrations with any governmental
authority, board, agency or commission having
jurisdiction which would constitute a condition precedent
to, or the absence of which would materially adversely
affect, the ability of the District, to perform its obligations
under the Bonds or the District Documents, have been
obtained or made, as the case may be, and are in full
force and effect.
(xiv) In connection with printing and distribution of the Preliminary
Official Statement, an executed certificate of the District in the
form attached hereto as Exhibit D.
(xv) A certificate of the Fiscal Agent in the form attached hereto as
Exhibit E, and an opinion of its counsel in form and substance
satisfactory to the Underwriter and Bond Counsel.
(xvi) A certificate of Fieldman, Rolapp & Associates, Inc. the City’s
municipal advisor (the “Municipal Advisor”), in the form and
substance attached hereto as Exhibit F.
(xvii) A Letter of Representations for each of the Developers,
addressed to the District and the Underwriter in connection
with the printing of the Preliminary Official Statement dated the
-14-
date of the Preliminary Official Statement, and a Closing
Certificate for each of the Developers, addressed to the
District and the Underwriter, dated the Closing Date, in the
forms attached hereto as Exhibit G.
(xviii) A negative assurance letter or letters regarding the Final
Official Statement from respective counsel to the Developers
addressed to the District and the Underwriter in form and
substance acceptable to Disclosure Counsel and the
Underwriter.
(xix) A Developer Continuing Disclosure Certificate from Shea
Homes, CalAtlantic, KB Home California, SLF-IV Millenia, and
LMC Millenia (collectively, the “Developer Continuing
Disclosure Certificates”), substantially in the forms attached to
the Preliminary Official Statement as Exhibit G.
(xx) A certificate of Kitty Siino &Associates, Inc., the appraiser, in
the form and substance attached hereto as Exhibit H.
(xxi) A certificate of Meyers Research, LLC, the market absorption
consultant, in the form and substance attached hereto as
Exhibit I.
(xxii) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter,
Disclosure Counsel or Bond Counsel may reasonably request
to evidence compliance by the District with legal requirements,
the truth and accuracy, as of the time of Closing, of the
respective representations of the District herein contained and
the due performance or satisfaction by the District at or prior to
such time of all agreements then to be performed and all
conditions then to be satisfied.
If the District is unable to satisfy the conditions to the obligations of the
Underwriter contained in this Agreement, or if the obligations of the Underwriter to
purchase and accept delivery of the Bonds shall be terminated for any reason permitted
by this Agreement, this Agreement shall terminate and neither the Underwriter nor the
District shall be under further obligation hereunder; except that the respective obligations
to pay expenses, as provided in Section 11 shall continue in full force and effect.
9. The obligations of the District to issue and deliver the Bonds on the Closing
Date is subject, at the option of the District, to the performance by the Underwriter of its
obligations to be performed hereunder at or prior to the Closing Date.
10. All representations, warranties and agreements of the District hereunder
shall remain operative and in full force and effect, regardless of any investigations made
by or on behalf of the Underwriter or the District and shall survive the Closing.
11. The District shall pay or cause to be paid all reasonable expenses incident
to the performance of its obligations under this Agreement, including, but not limited to,
-15-
delivery of the Bonds, costs of printing the Bonds, the Preliminary Official Statement and
the Final Official Statement, any amendment or supplement to the Preliminary Official
Statement or Final Official Statement and this Agreement, fees and disbursements of
Bond Counsel and Disclosure Counsel, the Municipal Advisor and other consultants
engaged by the District, including the fees and expenses of the special tax consultant
and fees of the Fiscal Agent.
The Underwriter shall pay the California Debt Investment and Advisory
Commission fee, all advertising expenses in connection with the public offering of the
Bonds, and all other expenses incurred by it in connection with its public offering and
distribution of the Bonds, including fees and expenses of its counsel, meals,
transportation, and lodging (but not entertainment expenses), and fees and
disbursements in connection with the qualification of the Bonds for sale under the
securities or “Blue Sky” laws of the various jurisdictions and the preparation of “Blue
Sky” memoranda.
12. Any notice or other communication to be given to the District under this
Agreement may be given by delivering the same in writing at its address set forth above,
and any notice or other communication to be given to the Underwriter under this
Agreement may be given by delivering the same in writing to the following: Stifel,
Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco,
California 94104, Attention: Sara Oberlies Brown.
13. This Agreement is made solely for the benefit of the District and the
Underwriter (including the successors or assigns of the Underwriter) and no other
person, including any purchaser of the Bonds, shall acquire or have any right hereunder
or by virtue hereof. This Agreement supersedes and replaces all prior negotiations,
agreements and understanding among the parties hereto in relation to the sale of the
Bonds by the District.
14. Establishment of Issue Price.
(a) The Underwriter agrees to assist the District in establishing the issue
price of the Bonds and shall execute and deliver to the District at Closing an “issue price”
or similar certificate, together with the supporting pricing wires or equivalent
communications, substantially in the form attached hereto as Exhibit J, with such
modifications as may be appropriate or necessary, in the reasonable judgment of the
Underwriter, the District and Bond Counsel, to accurately reflect, as applicable, the sales
price or prices or the initial offering price or prices to the public of the Bonds.
(b) The District will treat the first price at which 10% of each maturity of the
Bonds (the “10% test”) is sold to the public as the issue price of that maturity (if different
interest rates apply within a maturity, each separate CUSIP number within that maturity
will be subject to the 10% test). At or promptly after the execution of this Agreement, the
Underwriter shall report to the District the price or prices at which it has sold to the public
each maturity of Bonds. If at that time the 10% test has not been satisfied as to any
maturity of the Bonds, the Underwriter agrees to promptly report to the District the prices
at which it sells the unsold Bonds of that maturity to the public. That reporting obligation
shall continue, whether or not the Closing Date has occurred, until the 10% test has
been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have
been sold to the public. For clarity, and notwithstanding any other condition to Closing
-16-
set forth in this Agreement, the sale of 10% of each maturity of the Bonds to the public
prior to the Closing Date shall not be a condition to Closing.
(c) [The Underwriter confirms that it has offered the Bonds to the public on or
before the date of this Agreement at the offering price or prices (the "initial offering
price"), or at the corresponding yield or yields, set forth in Exhibit A attached hereto,
except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this
Agreement, the maturities, if any, of the Bonds for which the Underwriter represents that
(i) the 10% test has been satisfied (assuming orders are confirmed immediately after the
execution of this Agreement) and (ii) the 10% test has not been satisfied and for which
the District and the Underwriter agree that the restrictions set forth in the next sentence
shall apply, which will allow the District to treat the initial offering price to the public of
each such maturity as of the sale date as the issue price of that maturity (the "hold-the-
offering-price rule"). So long as the hold-the-offering-price rule remains applicable to
any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that
maturity to any person at a price that is higher than the initial offering price to the public
during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5th) business day after the sale date; or
(ii) the date on which the Underwriter has sold at least 10% of that maturity
of the Bonds to the public at a price that is no higher than the initial offering price
to the public.
The Underwriter shall promptly advise the District when it has sold 10% of that
maturity of the Bonds to the public at a price that is no hig her than the initial
offering price to the public, if that occurs prior to the close of the fifth (5th)
business day after the sale date.][Applies only if the Underwriter agrees to apply
the hold-the-offering-price rule]
(d) The Underwriter confirms that any selling group agreement and any retail
distribution agreement relating to the initial sale of the Bonds to the public, together with
the related pricing wires, contains or will contain language obligating each dealer who is
a member of the selling group and each broker-dealer that is a party to such retail
distribution agreement, as applicable, to (A) report the prices at which it sells to the
public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter
that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds
of that maturity have been sold to the public and (B) comply with the hold-the-offering-
price rule, if applicable, in each case if and for so long as directed by the Underwriter.
The District acknowledges that, in making the representation set forth in this subsection,
the Underwriter will rely on (i) in the event a selling group has been created in
connection with the initial sale of the Bonds to the public, the agreement of each dealer
who is a member of the selling group to comply with the hold-the-offering-price rule, if
applicable, as set forth in a selling group agreement and the related pricing wires, and
(ii) in the event that a retail distribution agreement was employed in connection with the
initial sale of the Bonds to the public, the agreement of each broker -dealer that is a party
to such agreement to comply with the hold-the-offering-price rule, if applicable, as set
forth in the retail distribution agreement and the related pricing wires. The District further
acknowledges that the Underwriter shall not be liable for the failure of any dealer who is
a member of a selling group, or of any broker-dealer that is a party to a retail distribution
-17-
agreement, to comply with its corresponding agreement regarding the hold-the-offering-
price rule as applicable to the Bonds.
(e) The Underwriter acknowledges that sales of any Bonds to any person
that is a related party to the Underwriter shall not constitute sales to the public for
purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related
party,
(ii) “underwriter” means (A) any person that agrees pursuant to a
written contract with the District (or with the lead underwriter to
form an underwriting syndicate) to participate in the initial sale of
the Bonds to the public and (B) any person that agrees pursuant
to a written contract directly or indirectly with a person described
in clause (A) to participate in the initial sale of the Bonds to the
public (including a member of a selling group or a party to a retail
distribution agreement participating in the initial sale of the Bonds
to the public),
(iii) a purchaser of any of the Bonds is a “related party” to an
underwriter if the underwriter and the purchaser are subject,
directly or indirectly, to (i) at least 50% common ownership of the
voting power or the total value of their stock, if both entities are
corporations (including direct ownership by one corporation of
another), (ii) more than 50% common ownership of their capital
interests or profits interests, if both entities are partnerships
(including direct ownership by one partnership of another), or (iii)
more than 50% common ownership of the value of the outstanding
stock of the corporation or the capital interests or profit interests of
the partnership, as applicable, if one entity is a corporation and
the other entity is a partnership (including direct ownership of the
applicable stock or interests by one entity of the other), and
(iv) “sale date” means the date of execution of this Agreement by all
parties.
-18-
15. This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Managing Director
Accepted __________, 2018, at
______ a.m./p.m. (California time):
CITY OF CHULA VISTA
COMMUNITY FACILITIES
DISTRICT NO. 16-I (MILLENIA)
By:
Name: David Bilby
Title: Director of Finance/Treasurer
A-1
EXHIBIT A
$________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to Hold-
The-Offering-
Price Rule
_________________
(T) Term Bond.
(C) Priced to optional call at par on _________.
* At the time of execution of this Agreement and assuming orders are confirmed immediately after the
execution of this Agreement.
REDEMPTION TERMS
Optional Redemption. The Bonds may be redeemed at the option of the District on
or prior to maturity as a whole, or in part on any [Interest Payment Date] from such maturities
as are selected by the District, and by lot within a maturity, from any source of funds, at the
following redemption prices (expressed as percentages of the principal amount of the Bonds
to be redeemed), together with accrued interest to the date of redemption:
Redemption Date Redemption
Price
September 1, 20__ through March 1, 20__ 103%
September 1, 20__ through March 1, 20__ 102
September 1, 20__ through March 1, 20__ 101
September 1, 20__ and thereafter 100
Mandatory Redemption from Special Tax Prepayments. The Bonds shall be
subject to mandatory redemption, as a whole or in part on a pro rata basis among maturities,
on any Interest Payment Date, from and to the extent of prepaid Special Taxes required to
A-2
be applied thereto pursuant to the Indenture and any amount required to be applied thereto
pursuant to the Indenture, at the following respective redemption prices (expressed as
percentages of the principal amount of the Bonds to be redeemed), plus accrued interest
thereon to the date of redemption:
Redemption Dates Redemption
Price
September 1, 2018 through March 1, 20__ 103%
September 1, 20__ through March 1, 20__ 102
September 1, 20__ through March 1, 20__ 101
September 1, 20 and thereafter 100
Mandatory Sinking Fund Redemption. The Bonds maturing September 1, 20__
shall be subject to mandatory sinking fund redemption, in part by lot, on September 1 in each
year, commencing September 1, 20__, at a redemption price equal to the principal amount of
the Bonds maturing September 1, 20___ to be redeemed, without premium, plus accrued
and unpaid interest thereon to the date of redemption, in the aggregate respective principal
amounts in the respective years as follows:
Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
The Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund
redemption, in part by lot, on September 1 in each year, commencing September 1, 20__, at
a redemption price equal to the principal amount of the Bonds maturing September 1, 20__
to be redeemed, without premium, plus accrued and unpaid interest thereon to the date of
redemption, in the aggregate respective principal amounts in the respective years as follows:
Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
B-1
EXHIBIT B
$________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
CERTIFICATE OF SPECIAL TAX CONSULTANT
Willdan Financial Services (“Special Tax Consultant”), Temecula, California
was retained as Special Tax Consultant and assisted in the preparation of and has
reviewed the Rate and Method of Apportionment of Special Tax (the “Rate and
Method”) set forth in Appendix A to the Official Statement dated ________, 2018 (the
“Official Statement”) relating to the above-referenced bonds (the “Bonds”) being issued
by City of Chula Vista Community Facilities District No. 16-I (Millenia) (the “Issuer” or
the “District”). Based upon the Special Tax Consultant’s review of the Official
Statement and such other documents as it deems relevant in the circumstances, the
Special Tax Consultant hereby certifies that the Special Tax, if collected in the maximum
amounts permitted under the Rate and Method, would generate at least 110% of the
gross annual debt service on the Bonds, provided that the annual debt service figures on
the attached debt service schedule, which were relied upon by Special Tax Consultant,
are substantially true and correct.
Although the Special Tax if collected in the maximum amounts under the Rate
and Method will generate at least 110% of the gross annual debt service payable with
respect to the Bonds each year, no representation is made herein as to actual amounts
that will be collected in future years.
All information with respect to the Rate and Method and all other information
sourced to the Special Tax Consultant in the Official Statement is true and correct as of
the date of the Official Statement and as of the date hereof, and a true and correct copy
of the Rate and Method is attached to the Official Statement as Appendix A.
Dated: [Closing Date]
WILLDAN FINANCIAL SERVICES
By:
C-1
EXHIBIT C
$________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
ISSUER CLOSING CERTIFICATE
I, the undersigned, hereby certify that I am the ____________ of the City of
Chula Vista (the “City”), the City Council of which is the legislative body for City of Chula
Vista Community Facilities District No. 16-I (Millenia), (the “Issuer” or the “District”), a
community facilities district duly organized and existing under the laws of the State of
California (the “State”) and that as such, I am authorized to execute this Certificate on
behalf of the Issuer in connection with the issuance of the above-referenced bonds (the
“Bonds”).
I hereby further certify on behalf of the Issuer that:
(A) to my best knowledge, after reasonable inquiry, no litigation is
pending with respect to which the Issuer has been served with
process or threatened (1) to restrain or enjoin the issuance of any of
the Bonds or the collection of Net Improvement Area No. 1 Special
Tax Revenues pledged under the Indenture; (2) in any way
contesting or affecting the authority for the issuance of the Bonds or
the validity or enforceability of the Bonds or the Issuer Documents;
or (3) in any way contesting the existence or powers of the Issuer;
(B) the representations and warranties made by the Issuer in the Bond
Purchase Agreement dated _________, 2018, between the Issuer
and Stifel, Nicolaus & Company, Incorporated (the “Agreement”)
are true and correct in all material respects on the Closing Date,
with the same effect as if made on the Closing Date;
(C) no event affecting the Issuer has occurred since the date of the
Final Official Statement that, as of the Closing Date, would cause
any statement or information contained in the Final Official
Statement under the caption “ABSENCE OF LITIGATION” to be
incorrect or incomplete in any material respect or would cause the
information contained under such caption in the Final Official
Statement to contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make such statements
therein, in the light of the circumstances under which they were
made, not misleading;
C-2
(D) as of the date hereof, the Issuer Documents are in full force and
effect in accordance with their terms and have not been amended,
modified or supplemented except in such case as may have been
agreed to by the Underwriter; and
(E) the Issuer has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under the Issuer
Documents prior to issuance of the Bonds.
Capitalized terms not defined herein shall have the same meaning set forth in the
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
date herein below set forth.
Dated: [Closing Date]
CITY OF CHULA VISTA COMMUNITY
FACILITIES DISTRICT NO. 16-I
(MILLENIA)
By:
Name:
Title:
D-1
EXHIBIT D
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
I, the undersigned, hereby certify that I am the _____________ of the City of
Chula Vista (the “City”), the City Council of which is the legislative body for City of Chula
Vista Community Facilities District No. 16-I (Millenia) (the “Issuer” or the “District”), a
community facilities district duly organized and existing under the laws of the State of
California (the “State”) and that as such, I am authorized to execute this Certificate on
behalf of the Issuer in connection with the issuance of the above-referenced bonds (the
“Bonds”).
I further hereby certify on behalf of the Issuer as follows:
(1) This Certificate is delivered in connection with the offering and sale
of the Bonds in order to enable the underwriter of the Bonds to
comply with Rule 15c2-12 of the Securities Exchange Commission
(“Rule 15c2-12”).
(2) In connection with the offering and sale of the Bonds, there has
been prepared a Preliminary Official Statement, setting forth
information concerning the Bonds, the City and the District (the
“Preliminary Official Statement”).
(3) As used herein, “Permitted Omissions” shall mean the offering
price(s), interest rate(s), selling compensation, aggregate principal
amount, principal amount per maturity, delivery dates, ratings and
other terms of the Bonds depending on such matters, all with
respect to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted
Omissions, deemed final within the meaning of Rule 15c2-12.
IN WITNESS WHEREOF, I have hereunto set my hand as of _________, 2018.
CITY OF CHULA VISTA COMMUNITY
FACILITIES DISTRICT NO. 16-I
(MILLENIA)
By:
Name:
Title:
E-1
EXHIBIT E
$________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
CERTIFICATE OF U.S. BANK NATIONAL ASSOCIATION
The undersigned hereby states and certifies that the undersigned is an
authorized officer of U.S. Bank National Association, as Fiscal Agent (the “Fiscal
Agent”) under that certain Indenture, dated as of _______ 1, 2018 (the “Indenture”),
between City of Chula Vista Community Facilities District No. 16-I (Millenia) (the “Issuer”
or the “District”) and the Fiscal Agent, relating to the captioned bonds (the “Bonds”) and
as such, is familiar with the following facts and is authorized and qualified to certify t he
following facts on behalf of the Fiscal Agent:
(1) The Fiscal Agent is duly organized and existing as a national banking
association under the laws of the United States of America, having the full
power and authority to enter into and perform its duties under the
Indenture and the Continuing Disclosure Agreement.
(2) The Indenture and the Issuer Continuing Disclosure Agreement have
been duly authorized, executed and delivered by the Fiscal Agent and the
Bonds have been authenticated by a duly authorized representative of the
Fiscal Agent in accordance with the Indenture.
(3) There is no action, suit, proceeding or investigation, at law or in equity,
before or by any court or governmental agency, public board or body
pending against the Fiscal Agent or threatened against the Fiscal Agent
which in the reasonable judgment of the Fiscal Agent would affect the
existence of the Fiscal Agent or in any way contesting or affecting the
validity or enforceability of the Indenture or the Continuing Disclosure
Agreement or contesting the powers of the Fiscal Agent or its authority to
enter into and perform its obligation under the Indenture or the Continuing
Disclosure Agreement.
Capitalized terms not defined herein have the same meaning as is set forth in the
Bond Purchase Agreement relating to the Bonds.
Dated: [Closing Date] U.S. BANK NATIONAL ASSOCIATION,
as Fiscal Agent
By
Authorized Officer
F-1
EXHIBIT F
$________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
CERTIFICATE OF MUNICIPAL ADVISOR
The undersigned hereby states and certifies as follows:
(1) The undersigned is an authorized officer of Fieldman, Rolapp & Associates, Inc.,
which has acted as municipal advisor (the “Municipal Advisor”) to City of Chula Vista
Community Facilities District No. 16-I (Millenia) (the “Issuer”) in connection with the issuance of
the above-referenced bonds (the “Bonds”), and as such, is familiar with the facts herein
certified and is authorized and qualified to certify the same.
(2) The Municipal Advisor has participated in the preparation of the Preliminary Official
Statement dated ________, 2018 and the final Official Statement dated ________, 2018 (the
“Official Statement”) relating to the Bonds.
(3) Nothing has come to the attention of the Municipal Advisor which would lead it to
believe that the Official Statement contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
Dated: [Closing Date] FIELDMAN, ROLAPP & ASSOCIATES,
INC.,
as Municipal Advisor
By:
Authorized Officer
G-1
EXHIBIT G
$________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
LETTER OF REPRESENTATIONS OF
Developer
__________, 2018
City of Chula Vista Community Facilities District No. 16-I (Millenia)
276 Fourth Avenue
Chula Vista, California 91910
Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, California 94104
In connection with the issuance and sale of the above-captioned bonds (the
“Bonds”), and pursuant to the Bond Purchase Agreement (the “Bond Purchase
Agreement”) to be executed by and between City of Chula Vista Community Facilities
District No 16-I (Millenia) (the “District”), and Stifel, Nicolaus & Company, Incorporated,
as underwriter (the “Underwriter”), the undersigned, on behalf of [DEVELOPER], a
[_______ corporation] (the “Developer”) hereby certifies, represents, warrants and
covenants that:
1. While the Bonds or any refunding obligations related thereto are
outstanding, Developer will not bring any action, suit, proceeding, inquiry or investigation
at law or in equity, before any court, regulatory agency, public board or body, that in any
way seeks to challenge or overturn the formation of the District, to challenge the
adoption of the ordinance levying Special Taxes within the District, to invalidate the
District or any of the Bonds or any refunding obligations, or to invalidate the special tax
liens imposed under Section 3115.5 of the Streets and Highways Code based on
recordation of the notices of special tax lien relating thereto. The foregoing covenant
shall not prevent Developer in any way from bringing any other action, suit, proceeding,
inquiry, or investigation at law or in equity relating to the following: (i) that the Special
Taxes have not been levied in accordance with the methodologies contained in the rate
and method of apportionment of special tax (the “Rate and Method of Apportionment”)
pursuant to which the Special Taxes are levied, (ii) the application or use of the Special
Taxes levied and collected, or (iii) the enforcement of the obligations of the City of Chula
Vista (the “City”) and/or the District under any agreement among or between the
Developer, the City and/or and the District or to which Developer is a party or of which it
is a beneficiary.
2. All information submitted by Developer directly to: (i) Kitty Siino &
Associates, Inc., in connection with the preparation of the Appraisal Report described in
G-2
the Preliminary Official Statement including any updates thereto made prior to the date
hereof, and (ii) Meyers Research, LLC in connection with the preparation of the Market
Absorption Study described in the Preliminary Official Statement including any updates
thereto made prior to the date hereof, in each case as more specifically identified in the
Appendix A and Appendix B hereto, was when given, true and correct in all material
respects and did not omit to state any material fact necessary to make such information,
in light of the circumstances under which it was provided, not misleading; and, except for
any such information that was modified or supplemented by subsequent information
submitted by or on behalf of Developer or the information that is otherwise contained in
the Preliminary Official Statement, no material change has occurred with respect to such
information as of the date hereof.
3. As of the date hereof, the information in the Preliminary Official
Statement under the captions [SLF-IV Millenia: “INTRODUCTION - Property Ownership
and Development Status,” “PROPERTY OWNERSHIP AND THE DEVELOPMENT -
General Description of the Development,” “- SLF and the Contracted Project Manager,”
“- The Development,” and “- Builders in Improvement Area No. 1”] [KB Home
California: “INTRODUCTION - Property Ownership and Development Status,” and
“PROPERTY OWNERSHIP AND THE DEVELOPMENT - KB Home California
Development and Financing Plan”][Shea Homes: “INTRODUCTION - Property
Ownership and Development Status,” and “PROPERTY OWNERSHIP AND THE
DEVELOPMENT - Shea Homes Development and Financing Plan”][CalAtlantic:
“INTRODUCTION - Property Ownership and Development Status,” and “PROPERTY
OWNERSHIP AND THE DEVELOPMENT - CalAtlantic Development and Financing
Plan”] [LMC Millenia: “INTRODUCTION - Property Ownership and Development
Status,” “IMPROVEMENT AREA NO. 1 - Market Absorption Study” (but only with
respect to the statements relating to property owned by LMC Millenia Company) and
“PROPERTY OWNERSHIP AND THE DEVELOPMENT - The Development –
Entitlements for the Overall Millenia Planned Community” and “- LMC Millenia Company
Development and Financing Plan”] solely as such information pertains to Developer, its
Affiliates (as defined below), the property owned by Developer and/or its Affiliates in the
Improvement Area (the “Property”), Developer’s plans for the development of the
Property and Developer’s contractual arrangements with respect thereto and the
Developer’s compliance with its undertakings to provide continuing disclosure pursuant
to the SEC’s Rule 15c2-12 (but in all cases under all captions excluding therefrom (i)
information regarding the Appraisal Report that does not pertain to Developer or the
Property, the Market Absorption Study that does not pertain to Developer or the
Property), market value ratios and annual special tax ratios, and (ii) information which is
identified as having been provided by a source other than the Developer) is true and
correct in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
4. Except as disclosed in the Preliminary Official Statement, Developer has
not been adjudicated as bankrupt or discharged from any or all of its debts or obligations
or granted an extension of time to pay its debts or a reorganization or readjustment of its
debts within the past ten years. Except as disclosed in the Preliminary Official
Statement, Developer does not have any proceedings pending (with service of process
to Developer having been accomplished) or, to the Actual Knowledge of the
Undersigned (as defined below), threatened in which Developer may be adjudicated as
bankrupt, become the debtor in a bankruptcy proceeding, be discharged from any or all
G-3
of its debts or obligations, be granted an extension of time to pay its debts or obligations,
or be granted a reorganization or readjustment of its debts or obligations.
5. Except as disclosed in the Preliminary Official Statement, no action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory
agency, public board or body, is pending against the Developer (with proper service of
process or proper notice to the Developer having been accomplished), or to the Actual
Knowledge of the Undersigned, overtly threatened in writing against the Developer (a)
which, if successful, is reasonably likely to materially and adversely affect the
Developer’s ability to complete the development and sale of the Property as described in
the Preliminary Official Statement, or to pay its Special Taxes, or ordinary ad valorem
property tax obligations related to the Property when due, or (b) which challenges or
questions the validity or enforceability of the Bonds or the Continuing Disclosure
Agreement to be executed by the Developer in connection with the issuance of the
Bonds.
6. Except as disclosed in the Preliminary Official Statement, to the Actual
Knowledge of the Undersigned, no other public debt secured by a tax or assessment on
the Property is in the process of being authorized and no assessment districts or
community facilities districts have been or are in the process of being formed which
include any portion of the Property.
7. Except as disclosed in the Preliminary Official Statement, there are no
events of monetary default or events which with the passage of time would constitute a
monetary default under any loan or similar credit arrangement to which Developer is a
party the result of which could have a material adverse effect on the Developer’s ability
to complete the development and sale of the Property as described in the Preliminary
Official Statement or to pay its Special Taxes related to the Property prior to
delinquency.
8. Except as disclosed below or in the Preliminary Official Statement, with
respect to property owned by Developer or its Affiliates located within the boundaries of
a development project in California, to the Actual Knowledge of the Undersigned, within
the last five years, neither Developer nor any of its Affiliates has (i) intentionally failed to
pay when due any property taxes, special taxes, or assessments levied or assessed
against such property, (ii) had any such property become either tax deeded to any
governmental agency or the subject of judicial foreclosure proceedings for failure to pay
such property taxes, special taxes, or assessments levied or assessed against such
property, or (iii) failed to cure such delinquencies within forty-five days of becoming
aware of such delinquencies. Although it is the policy of Developer to pay all taxes
applicable to property owned by it when due in the absence of a bona fide dispute as to
the amount owned, it is possible that Developer and some of its Affiliates have, within
the past five years, failed to pay property taxes on parcels that at one time or another
were considered to be within the boundaries of a proposed development project, but
were subsequently considered scrap or remnant parcels not suitable for construction of
residences and having minimal or no value or use to Developer or its Affiliates. Such
parcels may have ended up being tax deeded to the state or a local agency. To the
Actual Knowledge of the Undersigned, no such parcels were within a community
facilities district or assessment district.
G-4
9. As used in this Certificate, the term “Actual Knowledge of the
Undersigned” means the knowledge that the undersigned currently has as of the date
of this Certificate or has obtained through (i) interviews with such current officers and
responsible employees of the Developer and its Affiliates (or its members or agents) as
the undersigned has reasonably determined are likely, in the ordinary course of their
respective duties, to have knowledge of the matters set forth in this Certificate including,
if the undersigned is not the chief financial officer of Developer (or, if Developer does not
have a chief financial officer, the person who performs the functions usually associated
with such officer) the chief financial officer or such person (or such other person who
may have been approved by the Underwriter), and (ii) reviews of documents that were
reasonably necessary for the undersigned to obtain knowledge of the matters set forth in
this Certificate. The undersigned has not conducted any extraordinary inspection or
inquiry other than such inspections or inquiries as are prudent and customary in
connection with the ordinary course of the Developer’s financial operations, such as
those interviews and reviews mentioned above. [CalAtlantic: Developer notes that it
completed a merger with Lennar Corporation, a Delaware corporation (the “Lennar
Merger”) on February 12, 2018 and operates as a wholly-owned subsidiary of Lennar
Corporation. The Developer further notes that it completed a merger with The Ryland
Group, Inc., a Maryland corporation (“Ryland Group”) on October 1, 2015 (the “Ryland
Merger”), pursuant to which Ryland Group merged with and into Developer, with
Developer being the surviving entity. Separate and apart from Developer’s due diligence
efforts for purposes of completing the Lennar Merger and Ryland Merger, for purposes
of this Letter of Representations, individuals who were employees and officers of Lennar
Corporation and its subsidiaries prior to the Lennar Merger and Ryland Group and its
subsidiaries prior to the Ryland Merger have not been consulted or contacted and
documents entered into by Lennar Corporation, Ryland Group and their respective
subsidiaries or related to their properties and projects have not been reviewed.]
10. As used in this Certificate, the term “Affiliate” of Developer means any
person directly (or indirectly through one or more intermediaries) that exercises
managerial control over Developer or that is under managerial control of Developer, and
about whom information could be material to potential investors in their investment
decision regarding the Bonds (including without limitation information relevant to the
proposed development of the Property, or to Developer’s ability to pay the special taxes
levied on the Property prior to delinquency).
11. Until the date which is twenty-five days after the “End of the Underwriting
Period” (as defined in Section 4(g) of the Bond Purchase Agreement), if any event shall
occur of which Developer becomes aware, as a result of which it may be necessary to
supplement the Official Statement in order to make the statements in the Official
Statement under the caption referenced in Section 3 hereof regarding Developer, its
Affiliates, the Property, or the development of the Property, in light of the circumstances
existing at such time, not misleading in any material respect, Developer shall forthwith
give written notice thereof to the District and the Underwriter and shall reasonably
cooperate with them in furnishing any information available to Developer for any
supplement to the Official Statement necessary so that the statements in the Official
Statement under the caption referenced in Section 3 hereof, as so supplemented, will
not be misleading in any material respect in light of the circumstances existing at such
time.
G-5
12. Developer agrees to deliver a Closing Certificate dated the date of
issuance of the Bonds at the time of issuance of the Bonds in substantially the form
attached as Appendix C hereto.
13. All capitalized terms not otherwise defined herein shall have the meaning
set forth in the Bond Purchase Agreement.
[Remainder of page intentionally left blank]
G-6
The undersigned has executed this Letter of Representations solely in his or her
capacity as an officer or authorized representative of the Developer and he or she will
have no personal liability arising from or relating to this Letter of Representations. Any
liability arising from or relating to this Letter of Representations may only be asserted
against the Developer.
[DEVELOPER]
By:
[EXECUTION PAGE OF LETTER OF REPRESENTATIONS]
G-1
APPENDIX A TO EXHIBIT G
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
DEVELOPER PROVIDED INFORMATION IN APPRAISAL REPORT
See yellow highlighted information on attached selected pages of the Appraisal Report.
G-2
APPENDIX B TO EXHIBIT G
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
DEVELOPER PROVIDED INFORMATION IN MARKET ABSORPTION STUDY
See Attached.
G-3
APPENDIX C TO EXHIBIT G
$________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
CLOSING CERTIFICATE OF DEVELOPER
[Closing Date]
City of Chula Vista Community Facilities District No. 16-I (Millenia)
276 Fourth Avenue
Chula Vista, California 91910
Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, California 94104
Ladies and Gentlemen:
Reference is made to the above-captioned bonds (the “Bonds”) and to the Bond
Purchase Agreement, dated ________, 2018 (the “Bond Purchase Agreement”), entered into in
connection therewith. This certif icate is delivered pursuant to the Bond Purchase Agreement.
Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in
the Letter of Representations (the “Letter of Representations”), dated _________, 2018,
delivered by [DEVELOPER], a [_________] (the “Developer”), which is attached hereto as
Exhibit A.
The undersigned certifies that he or she is familiar with the facts herein certified and is
authorized and qualified to certify the same as an authorized officer or representative of the
Developer, and the undersigned, on behalf of the Developer, further certifies as follows:
1. The Developer has received the final Official Statement dated _________, 2018
relating to the Bonds (the “Official Statement”). To the Actual Knowledge of the Undersigned,
each statement, representation and warranty made in the Letter of Representations is true and
correct in all material respects on and as of the date hereof with the same effect as if made on
the date hereof, except that all references therein to the Preliminary Official Statement shall be
deemed to be references to the Official Statement.
2. To the Actual Knowledge of the Undersigned, no event has occurred since the
date of the Preliminary Official Statement affecting the statements and information described in
Paragraph 3 of the Letter of Representations (and subject to the limitations and exclusions
contained in Paragraph 3 of the Letter of Representations) relating to the Developer, its
Affiliates, ownership of the Property, the Developer’s development plan as it relates to the
Property, the Developer’s financing plan, the Developer’s lenders, if any, and contractual
arrangements of the Developer or any Affiliates (including, if material to the Developer’s
G-4
development plan or the Developer’s financing plan, other loans of such Affiliates), which should
be disclosed in the Official Statement for the purposes for which it is to be used in order to make
such statements and information contained in the Official Statement not misleading in any
material respect.
3. For the period through 25 days after the ”End of the Underwriting Period” as
defined in the Bond Purchase Agreement (provided the Developer may assume the End of the
Underwriting Period is the Closing Date (as defined in the Purchase Agreement), unless it
receives written notice from the Underwriter that the End of the Underwriting Period is later than
the Closing Date), if any event relating to or affecting the Developer, its Affiliates, the proposed
development of the Property, ownership of the Property, the Developer’s development plan, the
Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the
Developer or any Affiliates (including, if material to the Developer’s development plan or the
Developer’s financing plan, other loans of such Affiliates) shall occur as a result of which it is
necessary, in the opinion of the Underwriter, the District or counsel to the District, to amend or
supplement the Official Statement in order to make the Official Statement not misleading in the
light of the circumstances existing at the time it was delivered to a purchaser, the Developer
shall reasonably cooperate with the District and the Underwriter in the preparation and
publication of a supplement or amendment to the Official Statement, in form and substance
satisfactory to the Underwriter and the District which will amend or supplement the Official
Statement so that it will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
existing at the time the Official Statement is delivered to a purchaser, not misleading.
G-5
The undersigned has executed this Closing Certificate solely in his or her capacity as an
officer of the Developer and he or she will have no personal liability arising from or
relating to this Closing Certificate. Any liability arising from or relating to this Closing
Certificate may only be asserted against the Developer.
Developer,
a [California corporation]
By:
Name:
Title:
H-1
EXHIBIT H
$__________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
CERTIFICATE OF APPRAISER
The undersigned, on behalf of Kitty Siino & Associates, Inc. (the “Appraiser”), was
retained by the City of Chula Vista as Appraiser in connection with the issuance by Community
Facilities District No. 16-I (Millenia) of the above-captioned bonds and has prepared the
Appraisal Report dated as of April 11, 2018 (the “Appraisal”) and the Supplement to Appraisal
Report dated as of April [25], 2018 (the “Appraisal Supplement”), and hereby certifies that:
1. No events or occurrences have been ascertained by the Appraiser or have come
to the Appraiser’s attention that would materially change the opinions set forth in the Appraisal
or the Appraisal Supplement.
2. The Appraiser consents to the reproduction of the Appraisal and the Appraisal
Supplement as Appendix B-1 and Appendix B-2, respectively to the Preliminary Official
Statement dated May __, 2018 (the “Preliminary Official Statement”), and the Official Statement
dated May __, 2018 (the “Official Statement”), and to the references to the Appraiser, the
Appraisal and the Appraisal Supplement made in the Preliminary Official Statement and the
Official Statement.
3. The Appraisal and the Appraisal Supplement attached to the Preliminary Official
Statement and the Official Statement are true and correct copies of such documents.
4. The Appraiser has reviewed the Preliminary Official Statement and the Official
Statement, and the statements concerning the Appraiser, the Appraisal and the Appraisal
Supplement contained in the Preliminary Official Statement and the Official Statement are true,
correct and complete in all material respects and do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not
misleading.
Dated: June __, 2018 KITTY SIINO & ASSOCIATES, INC.
By:
Authorized Officer
I-1
EXHIBIT I
$__________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
CERTIFICATE OF MARKET ABSORPTION ANALYST
The undersigned, on behalf of Meyers Research, LLC, Solano Beach, California
(“Meyers Research”), was retained by the City of Chula Vista as the market absorption analyst
in connection with the issuance by Community Facilities District No. 16-I (Millenia) (the “District”)
of the above-captioned bonds and has prepared a report entitled “Market Absorption Analysis
Chula Vista CFD 16-I (Millenia IA No. 1)” (the “Market Absorption Study”), and an executive
summary thereof entitled Market Absorption Analysis Executive Summary Chula Vista CFD 16-I
(Millenia IA No. 1) (the “Executive Summary”), and certifies that:
1. The assumptions made in the Market Absorption Study are reasonable.
2. Meyers Research is not aware of any event or act that occurred since the date of
the Market Absorption Study which, in its opinion, would materially and adversely affect the
conclusions set forth in the Market Absorption Study.
3. Meyers Research consents to the reproduction of the Executive Summary as
Appendix I to the Preliminary Official Statement dated May __, 2018 (the “Preliminary Official
Statement”), and the Official Statement dated May __, 2018 (the “Official Statement”), and to
the references to Meyers Research, the Market Absorption Study and the Executive Summary
made in the Preliminary Official Statement and the Official Statement.
4. The Executive Summary attached to the Preliminary Official Statement and the
Official Statement is a true and correct copy of such document.
5. Meyers Research has reviewed the Preliminary Official Statement and the
Official Statement, and the statements concerning Meyers Research, the Market Absorption
Study and the Executive Summary contained in the Preliminary Official Statement and the
Official Statement are true, correct and complete in all material respects and do not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
Dated: June __, 2018 MEYERS RESEARCH, LLC
By:
Authorized Officer
J-1
EXHIBIT J
FORM OF ISSUE PRICE CERTIFICATION
$__________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
FORM OF ISSUE PRICE CERTIFICATE
The undersigned, Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as
set forth below with respect to the sale and issuance of the above-captioned obligations (the
“Bonds”).
1. Bond Purchase Agreement. On _________, 2018 (the “Sale Date”), Stifel and the Issuer
executed a Bond Purchase Agreement (the “Purchase Agreement”) in connection with the
sale of the Bonds. Stifel has not modified the Purchase Agreement since its execution on
the Sale Date.
2. Price.
(a) As of the date of this Certificate, for each [Maturity] [of the General Rule Maturities] of
the Bonds, the first price at which at least 10% of [each] such Maturity of the Bonds
was sold to the Public (the “10% Test”) was the respective price for such Maturity
listed in Schedule A attached hereto.
(b) [Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the
respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on
or before the Sale Date. A copy of the pricing wire or equivalent communication for
the Bonds is attached to this certificate as Schedule B.
(c) As set forth in the Bond Purchase Agreement, Stifel has agreed in writing that, (i) for
each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell
any of the Bonds of such Maturity to any person at a price that is higher than the
Initial Offering Price for such Maturity during the Holding Period for such Maturity (the
“hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the
agreement of each dealer who is a member of the selling group, and any retail
distribution agreement shall contain the agreement of each broker-dealer who is a
party to the retail distribution agreement, to comply with the hold-the-offering-price
rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or
sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher
than the respective Initial Offering Price for that Maturity of the Bonds during the
Holding Period.
(d) [** With respect to each of the General Rule Maturities of the Bonds:
J-2
(1) As of the date of this Certificate, Stifel has not sold at least 10% of the Bonds of
these Maturities at any single price.
(2) As of the date of this Certificate, Stifel reasonably expects that the first sale to
the Public of Bonds of these Maturities will be at or below the respective price or
prices listed on the attached Schedule A as the “Reasonably Expected Sale
Prices for Undersold Maturities.”
(3) Stifel will provide actual sales information (substantially similar to the information
contained on Schedule B) as to the price at which the first 10% of each such
Maturity (i.e., the Undersold Maturity or Maturities) is sold to the Public.
(4) On the date the 10% Test is satisfied with respect to all Maturities of the Bonds,
Stifel will execute a supplemental certificate substantially in the form attached
hereto as Schedule C with respect to any remaining Maturities for which the
10% Test has not been satisfied as of the Closing Date.**]
3. Defined Terms.
(a) “General Rule Maturities” means those Maturities of the Bonds listed in Schedule A
hereto as the “General Rule Maturities.”
(b) “Hold-the-Offering-Price Maturities” means those Maturities of the Bonds listed in
Schedule A hereto as the “Hold-the-Offering-Price Maturities.”
(c) “Holding Period” means, with respect to a Hold-the-Offering-Price Maturity, the period
starting on the Sale Date and ending on the earlier of (i) the close of the fifth business
day after the Sale Date ([DATE]), or (ii) the date on which Stifel has sold at least 10%
of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than
the Initial Offering Price for such Hold-the-Offering-Price Maturity.
(d) “Issuer” means the City of Chula Vista Community Facilities District No. 16-I
(Millenia).
(e) “Maturity” means Bonds with the same credit and payment terms. Bonds with
different maturity dates, or Bonds with the same maturity date but different stated
interest rates, are treated as separate Maturities.
(f) “Public” means any person (including an individual, trust, estate, partnership,
association, company, or corporation) other than an Underwriter or a related party to
an Underwriter. The term “related party” for purposes of this certificate generally
means any two or more persons who have greater than 50 percent common
ownership, directly or indirectly.
(g) “Underwriter” means (i) any person that agrees pursuant to a written contract with the
Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in
the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to
a written contract directly or indirectly with a person described in clause (i) of this
paragraph to participate in the initial sale of the Bonds to the Public (including a
member of a selling group or a party to a retail distribution agreement participating in
the initial sale of the Bonds to the Public).
J-3
4. The representations set forth in this certificate are limited to factual matters only. Nothing
in this certificate represents Stifel’s interpretation of any laws, including specifically
Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations thereunder. The undersigned understands that the foregoing
information will be relied upon by the Issuer with respect to certain of the representations
set forth in the Tax Certificate of the Issuer dated [CLOSING DATE] and with respect to
compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in
connection with rendering its opinion that the interest on the Bonds is excluded from gross
income for federal income tax purposes, the preparation of the Internal Revenue Service
Form 8038-G, and other federal income tax advice that it may give to the Issuer from time
to time relating to the Bonds.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:
[Title]
By:
[Title]
Dated: [Closing Date]
J-4
SCHEDULE A
TO
ISSUE PRICE CERTIFICATE
[Schedules to be updated at pricing in the event there are Hold-the-Offering-Price-
Maturities]
Actual Sales Information as of Closing Date
Maturity/CUSIP Coupon Date Sold Time Sold Par Amount Sale Price
[**Reasonably Expected Sales Prices for Undersold Maturities as of Closing Date
Maturity/CUSI
P
Coupon Par Amount Offering
Prices
**]
J-5
[**SCHEDULE B
TO
ISSUE PRICE CERTIFICATE
Actual Sales for Undersold Maturities as of the Closing Date
Maturity/
CUSIP
Date
Sold
Time
Sold
Par
Amount
Sale
Price
**]
J-6
[**SCHEDULE C
TO
ISSUE PRICE CERTIFICATE
SUPPLEMENTAL ISSUE PRICE CERTIFICATE OF UNDERWRITER
$___________
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I
(MILLENIA)
IMPROVEMENT AREA NO. 1 2018 SPECIAL TAX BONDS
The undersigned, Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as
set forth below with respect to the sale and issuance of the above-captioned obligations (the
“Bonds”).
1. Issue Price.
(a) Stifel sold at least 10% of the _______ Maturities of the Bonds to the Public at the
price or prices shown on the Issue Price Certificate dated as of the Closing Date (the
“10% Test”). With respect to each of the ______ Maturities of the Bonds, Stifel had
not satisfied the 10% Test as of the Closing Date (the “Undersold Maturities”).
(b) As of the date of this Supplemental Certificate, Stifel has satisfied the 10% Test with
respect to the Undersold Maturities. The first price or prices at which at least 10% of
each such Undersold Maturity was sold to the Public are the respective prices listed
on Exhibit A attached hereto.
2. Defined Terms.
(a) “Issuer” means the City of Chula Vista Community Facilities District No. 16-I
(Millenia).
(b) “Maturity” means Bonds with the same credit and payment terms. Bonds with
different maturity dates, or Bonds with the same maturity date but different stated
interest rates, are treated as separate Maturities.
(c) “Public” means any person (including an individual, trust, estate, partnership,
association, company, or corporation) other than an Underwriter or a related party to
an Underwriter. The term “related party” for purposes of this certificate generally
means any two or more persons who have greater than 50 percent common
ownership, directly or indirectly.
(d) “Underwriter” means (1) any person that agrees pursuant to a written contract with
the Issuer (or with the lead Underwriter to form an underwriting syndicate) to
participate in the initial sale of the Bonds to the Public, and (2) any person that agrees
pursuant to a written contract directly or indirectly with a person described in clause
(1) of this paragraph to participate in the initial sale of the Bonds to the Public
(including a member of a selling group or a party to a retail distribution agreement
participating in the initial sale of the Bonds to the Public).
J-7
3. The representations set forth in this certificate are limited to factual matters only. Nothing
in this certificate represents Stifel’s interpretation of any laws, including specifically
Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations thereunder. The undersigned understands that the foregoing
information will be relied upon by the Issuer with respect to certain of the representations
set forth in the Tax Certificate of the Issuer dated [CLOSING DATE] and with respect to
compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in
connection with rendering its opinion that the interest on the Bonds is excluded from gross
income for federal income tax purposes, the preparation of the Internal Revenue Service
Form 8038-G, and other federal income tax advice that it may give to the Issuer from time
to time relating to the Bonds.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:
[Title]
By:
[Title]
Dated: ____________
J-8
EXHIBIT A
TO
SUPPLEMENTAL ISSUE PRICE CERTIFICATE**]
APPRAISAL REPORT
COMMUNITY FACILITIES DISTRICT 16-I
IMPROVEMENT AREA NO. 1
(MILLENIA)
OTAY RANCH, CHULA VISTA
Chula Vista, California
(Appraisers’ File No. 2018-1167)
Prepared For
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Prepared By
Kitty Siino & Associates, Inc.
115 East Second Street, Suite 100
Tustin, California 92780
KITTY SIINO & ASSOCIATES, INC.
REAL ESTATE APPRAISERS & CONSULTANTS
April 30, 2018
David Bilby, Director of Finance/Treasurer
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Reference: Appraisal Report
Community Facilities District No. 16-I Improvement Area 1
(Portion of) Millenia, Otay Ranch
Northwest Corner of Hunte and Eastlake Parkways
Chula Vista, California
Dear Mr. Bilby:
At the request and authorization of the City of Chula Vista, we have completed an
Appraisal Report of Improvement Area No. 1 of Community Facilities District No. 16-I of
the City of Chula Vista (“CFD No. 16-I IA 1”) which consists of a portion of the residential
neighborhoods and commercial land known as Millenia in Otay Ranch. The master
developer of Millenia is a related entity to Meridian Development with active on-site
builders/developers being Shea Homes, Cal Atlantic Homes, KB Home and a related
entity to Chesnut Properties. Millenia is proposed for a total of about 3,000 multi-family
high density residential units and 75 acres of commercial use. Improvement Area No. 1,
which is the subject of this appraisal, consists of 393 proposed residential units, 53 of
which have closed to individuals as of February 1, 2018, with the remaining residential
lands ranging from builder-owned model homes and standing inventory to homes under
construction to mass graded pads. In addition, there are two commercial sites within
Improvement Area 1.
The valuation methods used in this report are the Sales Comparison Approach and a
Discounted Cash Flow Analysis along with a mass appraisal technique for the existing
homes as defined within this report. The fee simple estate of the subject property has
been valued subject to the lien of CFD No. 16-I IA 1. This report is written with the special
assumption that the subject properties are enhanced by the improvements to be funded
by and the fee credits to be received as a result of the issuance of the Special Tax Bonds
of CFD No. 16-I IA 1.
115 East Second Street, Suite 100, Tustin, California 92780
(714) 544-9978 - Phone, (714) 544-9985 – Fax, E-Mail: kssiino@msn.com
David Bilby
City of Chula Vista
April 30, 2018
Page Two
As a result of our investigation, the concluded minimum market value for the subject
property is:
(Portion of) Millenia:
SLF-IV-Millenia, LLC Ownership $ 6,030,000
LMC-Millenia Inv. Company, L.P. Ownership 4,000,000
CalAtlantic Ownership 3,900,000
KB Home Ownership 8,750,000
Shea Homes Ownership 14,520,500
Individually Owned Homes Minimum Market Value $ 25,027,554
Aggregate Value for CFD No. 16-I IA 1 $ 62,228,054
The values are stated subject to the Assumptions and Limiting Conditions, the
Hypothetical Condition and the Extraordinary Assumptions of this report, the Appraiser’s
Certification and are as of February 1, 2018.
Some supporting documentation concerning the data, reasoning and analyses may be
retained in the appraiser’s files. The information contained in this report is specific to the
needs of the client and for the intended use stated in this report. This Appraisal Report
is intended to comply with both the Uniform Standards of Professional Appraisal Practice
(“USPAP” January 2016) and with the Appraisal Standards of the California Debt and
Investment Advisory Commission (“CDIAC”). The appraiser is not responsible for
unauthorized use of this report.
This letter of transmittal is part of the attached report, which sets forth the data and
analyses upon which our opinion of value is, in part, predicated.
Respectfully submitted,
KITTY SIINO & ASSOCIATES, INC.
Larry W. Heglar, MAI
Kitty S. Siino, MAI
California State Certified General
Real Estate Appraiser (AG004793)
TABLE OF CONTENTS
Assumptions and Limiting Conditions............................................................................... i
Hypothetical Condition and Extraordinary Assumptions .................................................. iii
Aerial Photo of Millenia including CFD No. 2016-I Improvement Area 1 ......................... iv
Purpose of the Appraisal ................................................................................................ 1
The Subject Property ...................................................................................................... 1
Intended Use of the Report ............................................................................................ 2
Definitions ...................................................................................................................... 2
Property Rights Appraised ............................................................................................. 6
Effective Date of Value ................................................................................................... 7
Date of Report ................................................................................................................ 7
Scope of Appraisal ........................................................................................................ 7
Regional Area Map........................................................................................................ 10
County of San Diego Area Description .......................................................................... 11
City of Chula Vista Area Description ............................................................................. 18
Otay Ranch and Immediate Area Surroundings Description ......................................... 22
Community Facilities District No. 16-I ............................................................................ 27
Subject Property Descriptions ....................................................................................... 28
San Diego County Housing and Office Markets ............................................................ 57
Highest and Best Use Analysis ..................................................................................... 66
Valuation Analyses and Conclusions ............................................................................ 71
Appraisal Report Summary ......................................................................................... 100
Appraiser’s Certification ............................................................................................. 101
ADDENDA
CFD No. 16-I Improvement Area 1 Boundary Map
Map Nos. , 16081, 15942, 16150, Adjustment Plat 17-0006 and Shea and KB Site Plans
Builder-Owned Homes Discounted Cash Flow Analyses
Finished Lot Land Sales Map and Summary Chart
Commercial Land Sales Map and Summary Chart
Improved Residential Sales Map and Summary Chart
Appraisers’ Qualifications
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page i
ASSUMPTIONS AND LIMITING CONDITIONS
1. This report might not include full discussions of the data, reasoning and analyses that
were used in the appraisal process to develop the appraiser’s opinion of value. Some
supporting documentation concerning the data, reasoning and analyses may be
retained in the appraiser’s files. The information contained in this report is specific
to the needs of the client and for the intended use stated in this report. The appraiser
is not responsible for unauthorized use of this report.
2. No responsibility is assumed for legal or title considerations. Title to the property is
assumed to be good and marketable unless otherwise stated in this report.
3. It is assumed that the subject property is subject to the special tax lien of CFD No.
16-I IA 1.
4. Responsible ownership and competent property management are assumed unless
otherwise stated in this report.
5. The information furnished by others is believed to be reliable; however, no warranty
is given for its accuracy.
6. All engineering is assumed to be correct. Any plot plans and illustrative material
used in this report are included only to assist the reader in visualizing the property
and may not be to scale.
7. It is assumed that there are no hidden or unapparent conditions of either property,
subsoil or structures that would render them more or less valuable. No responsibility
is assumed for such conditions or for arranging for engineering studies that may be
required to discover them.
8. It is assumed that there is full compliance with all applicable federal, state and local
environmental regulations and laws unless otherwise stated in this report.
9. It is assumed that all applicable zoning and use regulations and restrictions have
been complied with, unless nonconformity has been stated, defined and considered
in this appraisal report.
10. It is assumed that all required licenses, certificates of occupancy or other legislative
or administrative authority from any local, state or national governmental or private
entity or organization have been or can be obtained or renewed for any use on which
the value estimates contained in this report are based.
11. Any sketch or photograph included in this report may show approximate dimensions
and is included only to assist the reader in visualizing the properties. Maps,
photographs and exhibits found in this report are provided for reader reference
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page ii
purposes only. No guarantee regarding accuracy is expressed or implied unless
otherwise stated in this report. No survey has been made for the purpose of this
report.
12. It is assumed that the utilization of the land and improvements (if any) are within the
boundaries or property lines of the property described and that there is no
encroachment or trespass unless otherwise stated in this report.
13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any
comment by the appraiser that might suggest the possibility of the presence of such
substances should not be taken as confirmation of the presence of hazardous waste
and/or toxic materials. Such determination would require investigation by a qualified
expert relating to asbestos, urea-formaldehyde foam insulation or other potentially
hazardous materials that may affect the value of the property. The appraiser’s value
estimate is predicated on the assumption that there is no such material on or in the
property that would cause a loss in value unless otherwise stated in this report. No
responsibility is assumed for any environmental conditions or for any expertise or
engineering knowledge required to discover them. The appraiser’s descriptions and
resulting comments are the result of the routine observations made during the
appraisal process.
14. Proposed improvements, if any, are assumed to be completed in a good
workmanlike manner in accordance with the submitted plans and specifications.
15. The distribution, if any, of the total valuation in this report between land and
improvements applies only under the stated program of utilization. The separate
allocations for land and buildings, if any, must not be used in conjunction with any
other appraisal and are invalid if so used.
16. The Americans with Disabilities Act (“ADA”) became effective on January 26, 1992
and has been updated several times since then. The appraiser has made no specific
compliance survey and analysis of the property to determine whether they conform
to the various detailed requirements of the ADA, nor is the appraiser a qualified
expert regarding the requirements of the ADA. It is possible that a compliance
survey of the property, together with a detailed analysis of the requirements of the
ADA, could reveal that the property is not in compliance with one or more of the
requirements of the ADA. If so, this fact could have a negative effect upon the value
of the property. Since the appraiser has no direct evidence relating to this issue, a
possible noncompliance with requirements of the ADA in estimating the value has
not been considered.
17. It is assumed there are no environmental concerns that would slow or thwart
development of the subject properties and that the soils are adequate to support the
highest and best use conclusions.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page iii
18. It is assumed that the sales information provided by Shea Homes is true and
accurate. We have reviewed and analyzed the sales along with checking samples
on various public record documents and the information appears to be correct.
19. Possession of this report, or a copy thereof, does not carry with it the right of
publication. It may not be used for any purpose by any person other than the party
to whom it is addressed without the written consent of the appraiser, and in any
event, only with proper qualification and only in its entirety. Permission is given for
this appraisal to be published as a part of the Official Statement or similar document
for the San Diego County CFD No. 16-I IA 1 Special Tax Bonds.
HYPOTHETICAL CONDITION
1. It is assumed that all improvements and benefits to the subject properties, which are
to be funded by the City of Chula Vista CFD No. 16-I IA 1 Special Tax Bond
proceeds, are completed and in place.
EXTRAORDINARY ASSUMPTIONS
1. It is assumed that the remaining costs to develop the various neighborhoods and
the planned non-residential property within the subject property are true and correct.
We have received summarized remaining costs provided by Meridian, the master
developer and the builders and/or their consultants. We have reviewed these costs
and they appear reasonable, however, we are not experts in the cost estimating field
and are relying on these costs in the valuation. If actual remaining costs differ, it
may change the value conclusions.
2. It is assumed that the master developer commences construction on Orion Park and
Strata Park prior to the builders reaching their applicable occupancy thresholds.
This is anticipated per the master builder.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page iv
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 1
PURPOSE OF THE APPRAISAL
The purpose of this appraisal report is to estimate the value of the fee simple interest of
the subject property, subject to the special tax lien of the City of Chula Vista CFD No. 16-
I Improvement Area No. 1 Special Tax Bonds.
THE SUBJECT PROPERTY
The subject property consists of 393 proposed residential units and two commercial
parcels within Millenia, a village within Otay Ranch in the City of Chula Vista. The entire
Millenia project is expected to include about 3,000 proposed residential units and 75 acres
of proposed commercial development. Chula Vista CFD 16-I Improvement Area 1, the
subject of this report includes six planning areas within Millenia, four designated for
residential use and two designated for commercial use. Within the residential parcels, Lot
1 of Map 16150 has been subdivided into separate Assessor Parcels; however, Lots 11,
14 and 17 of Tract 16081 have not been subdivided by the Assessor at this time. The
ownership and condition of the lands is detailed below.
Description
No.
Lots
Ownership
Condition/Status
Element by Shea Homes (portion of Lot
1 of Map 16150)
Units 145-169, 171, 173-174 28 Individuals Completed Houses / Closed
Units 119-122 of Tract 4 Shea Model Homes
Units 170, 172, 175 & 176 4 Shea Homes over 95% Complete (4
In escrow)
Units 131-144 14 Shea Homes U/C (12 In escrow)
Units 107-118 and 123-130 of Tract 20 Shea Finished Lots (5 in escrow)
Subtotal Element 70
Z by Shea Homes (portion of Lot 1 of
Map 16150)
Units 41-42, 44-50, 61-70 and 101-106 25 Individuals Complete Houses / Closed
Units 95-96 2 Shea Model Homes
Unit 43 and 93-94 3 Shea Homes over 95% complete (0
in escrow). Lot 93/94 in model
complex and not released
Unit 75-87 13 Shea Homes U/C (10 in escrow)
Unit 1-40, 51-60, 71-74, 88-92 and 97-100 63 Shea Finished Lots (0 in escrow)
Subtotal Z 106
Skylar by KB Home (generally Lot 14 of
Tract No. 16081)
Units Unit 5 and 6 2 KB Home Model Homes
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 2
Units 8-10 and 62-64 6 KB Home Homes U/C (1 in escrow)
Units 1-4, 7, 11-61, 65-79 71 KB Home Partially F/L (2 in escrow
Subtotal KB Home 79
CalAtlantic (generally Lot 17 of Tract
Map 16081)
Units 1-78 78 CalAtlantic Land under development
Meridian
Lot 11 of Tract 16081 60 SLF IV-
Millenia LLC
Superpad
Commercial Parcels
Lot 7 of Tract 16081 N/A LMC-
Millenia Inv.
Co. LP
7.06 Acre Superpad
Lot 1 of Tract 16081 N/A SLF IV-
Millenia LLC
10.93 Acre Superpad
Total Lots 393
INTENDED USE OF THE REPORT
It is the appraiser’s understanding that the client, the City of Chula Vista, will utilize this
report in disclosure documents related to the sale of the Special Tax Bonds of CFD No.
16-I IA 1. This report may be included in the Official Statement or similar document to be
distributed in connection with the marketing and offering of the bonds. It is the appraiser’s
understanding that there are no other intended uses of this report.
DEFINITIONS
Market Value
The term “Market Value” as used in this report is defined as:
"The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and seller
each acting prudently, knowledgeably and assuming the price is not
affected by undue stimulus. Implicit in this definition is the consummation
of a sale as of a specified date and the passing of title from seller to buyer
under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and each acting in what
he or she considers his or her own best interest;
3. a reasonable time is allowed for exposure in the open market;
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 3
4. payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.”1
Inherent in the Market Value definition is exposure time or the time the subject property
would have been exposed on the open market prior to the appraisal in order to sell at the
concluded values. In the case at hand and considering current market conditions the
exposure time for each individually owned property, each builder’s owned property or the
master developer owned property in a bulk sale, is less than one year.
Aggregate Retail Proceeds
As used in the Discounted Cash Flow Analysis, Aggregate Retail Proceeds is defined:
“The sum of the appraised values of the individual units, as if all of the units
were completed and available for retail sale, at date of value. The sum
includes an allowance for lot premiums, when applicable. This is not the
market value of the project in bulk.”
Bulk Value
Bulk Value is defined as:
The value of a group of lots, parcels, or homes to a single purchaser, on a
specified date, under the terms and conditions of the definition of market
value.
Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow Analysis is:
The procedure in which a discount rate is applied to a set of projected
income streams and a reversion. The analysis specifies the quantity,
variability, timing, and duration of the income streams as well as the
quantity and timing of the reversion and discounts each to its present value
at a specified yield rate.
Subdivision Development Method
The Subdivision Development Method is:
1 The Appraisal of Real Estate, 13th Edition
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 4
A method of estimating land value when subdivision and development are
the highest and best use of the parcel of land being appraised. When all
direct and indirect costs and entrepreneurial incentive are deducted from
an estimate of the anticipated gross sales price of the finished lots, the
resultant net sales proceeds are then discounted to present value at a
market-derived rate over the development and absorption period to
indicate the value of the raw land.
Exposure Time
The Definition of Exposure Time within this report is:
The time a property remains on the market. It is the estimated length of time
the property interest being appraised would have been offered on the
market prior to the hypothetical consummation of a sale at market value on
the effective date of the appraisal.
Finished Lot
The term “Finished Lot” is defined as:
“A parcel which has legal entitlements created by a recorded subdivision
map, whose physical characteristics are a fine graded level pad per lot with
infrastructure contiguous to each individual lot, asphalt paved roads and the
necessary utilities. This term assumes the payment of all applicable
development fees with the exception of building permit and plan check
fees.”
Finished Pad
The term “Finished Pad” is defined as:
“A parcel which has legal entitlements created by a condominium map,
whose physical characteristics are a fine graded level pad with
infrastructure contiguous to each individual unit, asphalt paved roads and
the necessary utilities. This term assumes the payment of all applicable
development fees with the exception of building permit and plan check
fees.”
Gross Site Area
Gross Site Area is defined as:
The area that typically includes the entire boundary of a parcel, including
future dedication, slopes and easements. Sometimes includes to the
centerline of adjacent public roadways even though purchase of the parcel
may be to the sidelines.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 5
Minimum Market Value
The term “Minimum Market Value” as used in this report is defined as:
“The base market value of a new home. That is, most buyers purchase
some upgrades, options and/or lot premiums when purchasing a new home.
The sales price for the new home typically includes the base price for the
plan, plus any upgrades, options or lot premiums, less concessions, if any,
which were given or paid for by the builder. The concluded minimum market
value is for the base value of the plan only, not taking into consideration any
upgrades, options or premiums.”
Mass Appraisal
The term “Mass Appraisal” as used in this report is defined as:
“The process of valuing a universe of properties as of a given date using
standard methodology employing common data and allowing for statistical
testing”2
In the case at hand, the statistical testing included reviewing all original builder sales and
reviewing the Multiple Listing Service (“MLS”) for any re-sales and/or listings of each plan
type. In addition, we have determined the actual range of sales prices for each plan type
which will be utilized in the valuation process. The search of the MLS resulted in no
current listings and no re-sales within the subject property other than builder listings.
Super Pad
A superpad is defined within this report as:
A mass graded pad which is created in order to create earthwork balances
within future subdivision parcels. Requires additional grading prior to
building construction, may require additional mapping and may require
additional entitlements. A rough-graded site with roads and utility lines
extended to the boundary of the parcel.
Hypothetical Condition
The Term “Hypothetical Condition” is defined by USPAP as:
“That which is contrary to what exists but is supposed for the purpose of the
analysis”
2 USPAP 2014-2015 Edition
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 6
The Hypothetical Condition within this report is that subject property is enhanced by the
improvements and/or fee credits to be funded by bonds issued by CFD No. 16-I IA 1.
Extraordinary Assumptions
The term “extraordinary assumption” is defined by USPAP as:
“An assumption, directly related to a specific assignment, which, if found to
be false, could alter the appraiser’s opinions or conclusion”
There are two extraordinary assumptions in this report. The first extraordinary
assumption in this report is that the reported remaining costs as received from the builders
and master developer or their consultants are true and accurate. We have reviewed the
costs and they appear reasonable, however, we are not experts in the field of cost
estimating. It should be noted that these costs were relied upon in the valuation of the
subject property and if the costs change, the values may change.
The second extraordinary assumption is that the master developer commences
construction of Orion Park and Strata Park in a timely manner which does not limit
occupancy on the Shea Homes or KB Home parcels. Until the parks are complete, Shea
Homes is limited to 100 certificates of occupancy and KB Home is limited to 65 certificates
of occupancy. Per the master developer, they expect to commence construction prior to
the respective merchant builders reaching the applicable occupancy thresholds which
appears reasonable.
PROPERTY RIGHTS APPRAISED
The property rights being appraised are of a fee simple estate interest, subject to
easements of record and subject to CFD No. 16-I IA 1. The definition of “fee simple
estate” is defined as:
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 7
“absolute ownership unencumbered by any other interest or estate, subject
only to the limitations imposed by the governmental powers of taxation,
eminent domain, police power, and escheat.”3
EFFECTIVE DATE OF VALUE
The subject properties are valued as of February 1, 2018.
DATE OF REPORT
The date of this report is April 30, 2018.
SCOPE OF APPRAISAL
The purpose of this appraisal is to report the appraiser’s best estimate of the market value
for the subject property, CFD No. 16-I IA 1, which is known as a portion of Millenia.
Millenia is being developed by SLF-IV Millenia LLC into a mixed-use master planned
community previously known as the Otay Ranch Eastern Urban Center (EUC) which is a
portion of Otay Ranch Village 12. Meridian Development has been contracted to manage
all aspects of the remaining lands. The entire Millenia project is proposed for about 3,000
residential units, 75 acres of commercial use and 80 acres of public use while the subject
property includes four proposed residential neighborhoods totaling 393 units and two
commercial parcels. Three of the four residential parcels are sold to builders, one of the
commercial parcels is sold and the other in escrow. This appraisal will be presented in
the following format:
• County of San Diego Description
• Otay Ranch Description
• Immediate Surroundings / Millenia Description
• Brief Description of City of Chula Vista CFD 16-I IA 1
• Subject Property Descriptions
• San Diego County Residential and Commercial Market Analysis
• Highest and Best Use Analysis
3 The Appraisal of Real Estate, 13th Edition
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• Valuation Procedure, Analyses and Conclusions
• Appraisal Report Summary
In valuing the subject property, the value estimates will be based upon the highest and
best use conclusion using the Sales Comparison Approach along with a Development
Analysis (also known as Subdivision Development Method). The Sales Comparison
Approach to value is defined as:
“…a set of procedures in which a value indication is derived by comparing the
property being appraised to similar properties that have been sold recently, then
applying appropriate units of comparison and making adjustments to the sales
prices of the comparables based on the elements of comparison. The Sales
Comparison Approach may be used to value improved properties, vacant land or
land being considered as though vacant; it is the most common and preferred
method of land valuation when an adequate supply of comparable sales is
available.”4
In the Sales Comparison Approach, market value is estimated by comparing properties
similar to the subject that have recently been sold, are listed for sale or are under contract.
Neither a cost or income approach was utilized as they were not considered necessary
to arrive at credible results. A Discounted Cash Flow Analysis will also be completed for
the builder-owned homes. Finally, we will also utilize a mass appraisal technique which
included reviewing all builder sales and searching the MLS for any re-sales and/or
listings.
The due diligence of this appraisal report included the following:
1. Compiled demographic information and related that data to the subject properties to
perform a feasibility/demand analysis.
2. Gathered and analyzed information on the subject marketplace, reviewed several
real estate brokerage publications on historical and projected growth in the subject
market and researched the micro and macro-economic outlook within San Diego
County and the Harmony Grove area.
3. Inspected the subject properties between January 15, 2018 and February 7, 2018.
4. Had the site flown by an aerial photographer on January 28, 2018.
4 Dictionary of Real Estate Appraisal, Fourth Edition, 2002
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5. Interviewed representatives and or consultants from Meridian Development in order
to obtain Millenia information.
6. Reviewed the Eastern Urban Center Sectional Planning Area (“SPA”) Plan.
7. Reviewed the Millenia Bond Issue Request Letter dated October 31, 2017 for status
of other projects within Millenia.
8. Reviewed a Preliminary Title Report on Lots 1, 7, 11, 14 and 17 of Tract No. 09-03
(Lots 14 and 17 adjusted by Chula Vista Adjustment Plat No. 17-006) and a
Preliminary Title Report on Lot 9 of Map 15942.
9. Reviewed a Final EIR for the subject property.
10. Searched the area for relevant comparable residential land sales, inspected and
verified each sale with a buyer or seller or broker familiar with the transaction.
11. Searched the area for relevant comparable commercial land sales, inspected and
verified each sale with a buyer or seller or broker familiar with the transaction.
12. Searched the area for relevant comparable new home residential projects, including
sales prices and concessions and interviewed representatives from each
comparable project.
13. Reviewed sales brochures on the subject neighborhoods.
14. Reviewed developer sales information on each home.
15. Reviewed Multiple Listing Service information to determine if there are any re-sales,
pending sales or listings of existing homes.
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Regional Map
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COUNTY OF SAN DIEGO AREA DESCRIPTION
General Surroundings
The subject property is located in the City of Chula Vista in the southwestern most portion
of the County of San Diego (the “County”). The County is located in the southwest corner
of the State of California bordering Mexico on the south, Imperial County is to the east,
and Riverside and Orange Counties are to the north. The Pacific Ocean is its western
border. The County has approximately 4,525 square miles (325 square miles of which is
water) and includes terrain from ocean beaches to foothills to mountains and deserts.
San Diego County has 70 miles of coastline and the climate ranges from Mediterranean
to semi-arid.
Population
The San Diego region experienced faster growth rates than most of California during the
past several decades. In 2009 the County had a larger population than 20 of the 50 states.
The County has experienced an increasing growth pattern for the past fifty years.
Between January 1990 and January 2000, the population grew from 2,480,072 to
2,813,833 or an annual average growth of approximately 1.15 percent per year.
According to the California Department of Finance, the January 2017 population for the
County is estimated at 3,316,192 suggesting an average annual increase of 0.97 percent
for these seventeen years, which displays a slightly slower rate of population growth than
the previous 10 years. The slowdown in growth appears to be due to the recession which
began in the mid-2000s. Current projections from San Diego Association of Governments
(SANDAG) estimates the county population will increase to 3,435,713 by 2020 (a 1.18
percent annual increase over the next three years), and 3,853,698 by 2035 (a 0.768
percent annual increase over the following fifteen years).
Transportation
Four major interstate freeways bisect the County; these are Interstate 5, Interstate 15,
Interstate 8 and Interstate 805. Interstate 5 is the major north/south arterial throughout
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the State of California. It generally follows the coastal route in the San Diego County area.
Interstate 15 is also a north/south arterial; however, it is located inland and through the
more mountainous regions of the County. Interstate 8 provides east/west access through
the southern portion of the County, while Interstate 805 generally parallels Interstate 5
beginning near Del Mar providing a third north/south route between I-15 and I-5. The
subject area is served by State Route 125, a toll road giving access to the inland areas
of southern San Diego County east of I-15 beginning in Santee about 15 miles north
through the communities of El Cajon, La Mesa, Lemon Grove, La Presa and Chula Vista
and on to the national border with Mexico where it becomes State Route 905.
The County is well served with train service by Amtrak, Metrolink and the regional
Coaster. In addition, downtown San Diego has a trolley which provides access around
the downtown area and to the Mexican border. Air service is provided by San Diego
International Airport (approximately 15 miles northwest), Palomar Airport in Carlsbad
(approximately 40 miles north) and Brown Field, three miles south of the subject in Otay
Mesa near the Mexican border.
Economy
As with the rest of the nation, San Diego County experienced a strong multi-year
recession, now referred to as the Great Recession, between 2006 and 2012. The County,
which had strong employment over the ten previous years saw unemployment rates
increase significantly between December 2006 and early 2010 at which time a leveling
off occurred followed by continued decreases which began in July 2011.
The unemployment rate for the County was estimated at 3.3 percent (per the Employment
Development Department – December 2017), which reflects a rate lower than the low
peak prior to the recession, however a significant decrease from the peak during the
recession of 11.0 percent in 2010. The current unemployment rate for the County of 3.3
percent is lower than the California rate of 4.2 percent and lower than the December 2017
national rate of 3.9 percent. Below is a table depicting San Diego County in relationship
to unemployment rates of the surrounding counties:
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Jurisdiction As of Unemployment Rate
Los Angeles County 12/17 4.2%
Riverside County 12/17 4.3%
San Bernardino County 12/17 3.9%
Orange County 12/17 2.8%
San Diego County 12/17 3.3% Source: State of California E.D.D.
Over the past 20 years, the San Diego County economy has had significant cycles with
home prices almost doubling from 1995 to 2005, then falling by over 50 percent during
the Great Recession taking prices back to 2002/03 levels. Home values appeared to hit
bottom in 2009 then remained essentially flat for two to three years with the majority of
the San Diego County housing market seeing an improvement beginning in mid-2012
with 2013 showing significant appreciation in both the number of sales and pricing.
Between 2014 and 2016 the San Diego County housing market saw a slight slowdown in
the double-digit growth seen in 2013 with sales of homes appearing to stabilize while
prices of homes are still enjoying growth within the County, however at more normal rates
in the annual single-digit range. The past year has seen exceptional growth in building
permits being issued in San Diego County for single-family detached homes.
The Federal Government attempted to correct the struggling economy by implementing
several economic stimulus packages during the Great Recession. The Federal Reserve
Board (“Board”) has kept interest rates below historical averages dropping rates to zero
in December 2008 until the December 2015 Board meeting when interest rates were
raised one quarter of a percent. In 2017, the Board increased its benchmark interest rate
by a total of three quarters of a point, raising it one quarter point each hike. Most
economists opine that there will be three interest rate increases in 2018. This signifies
the possibility for robust growth nationally. Unlike the 2008 to 2015 decisions to maintain
the rates at zero, hikes are anticipated for the foreseeable future depending on the U.S.
economy and global growth. While the U.S. economy has been growing, concerns of
global weakness have emerged. The European Central Bank began its own quantitative
easing in the summer of 2015 while growth in China had been slowing for a couple years
with a correction in China’s stock market of 40 percent followed by a devaluation of their
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currency, also in summer of 2015. The summer of 2016 brought BREXIT (Britain’s exit
of the European Union) which created some volatility in the stock market. In addition, oil
prices plunged between 2013 and 2016, then rose in 2017. While lower oil prices give
U.S. consumers more money, lower prices affect U.S. oil companies and their workers
along with other oil dependent countries. Until these global concerns stabilize, it appears
the Board will not raise interest rates to more normal levels but rather stay near historical
lows.
The 2016 election of Donald Trump into the United States Presidency is anticipated to
have a profound effect on the economy. While the Trump Administration aims to positively
affect the national economy with plans to roll back financial regulations, implement tax
cuts, enact new taxes on imports, and increase infrastructure spending, the national and
international skepticism of the new Administration’s economic policy is abundant. While
the new Administration is suggesting there will be immediate economic changes, time will
tell how quickly these changes occur. With the December 2017 adoption of the Tax Cuts
and Job Act (“TCJA”), uncertainty is proliferating as the Country enters 2018. While the
TCJA aims to save taxes and spur the economy, there are some limitations which may
negatively affect real estate, particularly in California. It is too early to know how the TCJA
will affect homeowners at this time.
California’s labor markets make it easy to understand why the mid-2000s downturn is
being called the Great Recession. After peaking at 15.454 million non-farm jobs in June
2007, the state shed over 1.33 million non-farm positions by February 2010. Since hitting
bottom, California has now added back 2.856 million jobs for a total of 16.980 million non-
farm jobs as of December 2017, per the California Employment Development
Department. This well surpasses the previous peak, however, there are a high number
of part-time jobs included in this number.
According to the most recent UCLA Anderson Forecast (“Forecast” – December 6, 2017),
there is a mixed outlook on the economy. For the nation, the near-term outlook is
optimistic anticipating 3.0 percent growth in 2018, however by the end of 2019 it is
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believed real GDP growth could be running at a rate below 1.5 percent. The Forecast
states the momentum coming from the recent strength in 2017 of strong equipment
spending, the likelihood (now certainty) of a tax cut and consumer confidence, will carry
through 2018. The Forecast also discusses that defense spending will likely be on the
rise over the next several years, increasing by 2.7 percent in 2018 and 2019 respectively.
Possible risks include the consequences of the Fed’s reducing its balance sheet and the
potential failure of the ongoing NAFTA negotiations (which would hit the U.S. automobile
industry). If the US leaves NAFTA, the outlook would deteriorate and the chance of a
recession in late 2018 or 2019 would increase. The Forecast states that in order to “Make
America Great Again,” we need to solve three problems: (1) how to increase the rate of
growth of the working age population; (2) how to increase the rate of growth of hours by
making more of the new jobs full-time and not part-time; and (3) how to increase the rate
of growth of productivity in the nation.
In discussing the national housing outlook, the Forecast notes that the housing industry
continues to slowly grind higher as it has since the cyclical bottom in 2009. The puzzling
thing about the slow recovery is that it is occurring against a backdrop of modest
economic and employment growth as well as a sustained period of very low mortgage
interest rates. Explanations for the long, slow recovery in housing include slow income
growth, much tighter credit standards and the millennial generation’s reluctance to making
long-term commitments. In addition, regressive zoning and environmental regulations
have played a role in reducing the overall supply of housing. The Forecast anticipated
household formations averaged 1.2 million per year from 2012 to 2017, and are forecast
to accelerate to about 1.5 million in 2018 and 2019, well above the forecast of the number
of units.
The UCLA California Forecast for December 2017 explains the State Forecast differs
from the National Forecast in two ways. First, the new tax bill may dampen the California
housing market which would reduce economic growth in the state. Second the
investment incentive (bringing forward investment because of expensing) increases the
forecasted growth rate for employment and income in 2018, though reduces it slightly by
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the end of 2019. The Forecast states California’s unemployment rate will fall to 4.6
percent by the end of the forecast period (2019), however the current rate is below that
benchmark at 4.2 percent.
The Forecast states that homebuilding in California will continue at about 118,000 units
per year. Southern California’s increasingly expensive and unaffordable home prices
(particularly for first-home buyers) is making it tough for both buyers and renters. Housing
market research suggests that limited supply is one of the major causes of high home
prices in coastal California. According to the Forecast, despite its stronger economic
recovery, California has relatively limited housing supply because of its stringent
regulations (such as CEQA – California Environmental Quality Act as well as a NIMBY-
“not in my back yard” culture). Also, it should be noted that the December Forecast was
done prior to the approval of the Tax Cuts and Jobs Act.
Brad Kemp, Beacon Economics’ Director of Regional Research says Southern California
was hit harder during the Great Recession due to the impact of housing. Median housing
prices (all types) increased over 100 percent in San Diego County changing from
$250,000 in 1997 to $517,500 in November 2005. Now median existing single-family
home sale prices have surpassed the pre-recession high and are $605,000 for December
2017 per the California Association of Realtors. New home prices are significantly higher
than existing sales with the average new San Diego County home in the subject’s
submarket $860,660 and the average new condominium price in the submarket is
$671,577. Foreclosures, which played a big part in housing sales during the Great
Recession, are no longer playing a noticeable part in the San Diego real estate market.
Commercial real estate appears to have hit bottom in 2010 with local absorption levels
returning to positive territory in 2012 and generally growth since that time. Office vacancy
rates appear to have stabilized in 2012 with rents rising since 2013. Retail vacancies
which grew during the Great Recession have generally leased up with retail construction
occurring once again. This is evidenced by the successful Otay Ranch Town Center
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adjacent to the north of Millenia along with commercial land sales and escrows within
Millenia.
Conclusion
Population in the County has increased over the past 30 years with predictions for
continued population growth. The nation’s economy stalled starting in 2006 due to the
housing downturn, unemployment and the credit crisis. The housing market saw a
resurgence beginning the second half of 2012 with prices and sales increasing by double
digits thru 2013 with pricing growth slowing to more normal levels and sales essentially
flat until 2017 when both sales and prices began increasing substantially once again. The
economy typically has cycles and most signs are suggesting the U.S. economy is on an
upswing. However, unlike previous recovering economies housing growth has been slow
to come back. While the new Administration is suggesting there will be changes in the
economy, time will tell how fast the changes actually occur. The year 2017 brought a new
optimism from economists in terms of Southern California’s housing market with single
family building permits increasing substantially over 2016 with 2018 projected for an even
larger increase. In conclusion, the County is expected to continue to grow in population
due to its Southern California location and the availability of land.
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CITY OF CHULA VISTA
The subject property is located in the City of Chula Vista (“City”), located in the southern
portion of San Diego County. Chula Vista is the second largest city in San Diego County,
bordered by the San Diego Bay and Coronado to the west, Imperial Beach to the
southwest, the California-Mexico border to the south, unincorporated area to the East,
Lemon Grove to the north, and National City to the northwest. The City contains an
estimated 50.1 square miles of land with Mediterranean and semi-arid climates. San
Diego County averages 10 inches of precipitation annually. Rain occurs mainly between
the months of December and March. Elevation ranges from sea level to 1,591 feet. The
City is located 7 miles southeast of downtown San Diego. The City of Chula Vista was
incorporated in 1911. In 1997, the City annexed 9,100 acres, the largest annexation in
County history. Below is a map outlining the City with the black star representing the
approximate site of the subject property.
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The City began as a 5,000-acre development with the first house being built in 1887 and
by 1889, having 10 homes on the development. The completion of the Sweetwater Dam
in 1888 permitted irrigation after which Chula Vista became, for a while, the largest lemon-
growing center in the world. This agriculture base helped the city get through the Great
Depression. Agriculture does not continue to be as important to the City as it once was
as now over 250,000 people reside in Chula Vista.
Population
Chula Vista is the second largest City in San Diego County. As of January 1, 2017, the
City had a population of 267,917, which is a 1.1 percent increase from the January 2016
estimate of 264,911. Since the year 2000 Chula Vista has experienced almost a 50
percent population increase indicating a very rapid growth in the population over the past
15 years, although it appears to be slowing. Between 2000 and 2010 the City population
increased an average annual growth rate of 3.46 percent while between 2010 and 2016
the rate slowed to just over one percent per year showing the effects of the Great
Recession. In 2016 Chula Vista was one of California’s top 10 cities with the largest
numerical change of cities with a population under 300,000. The City of Chula Vista has
a median age of 34 years old with roughly 60% of the homes in the area owner-occupied.
Economy
Chula Vista has been undergoing business expansion and attraction while collaborating
with Baja California officials to create an environment for economic growth and prosperity.
The City established economic development initiatives that have created quality
infrastructure, a strong consumer base and a well-educated and experienced workforce.
The City has two major malls besides the Otay Ranch Town Center and the historic
downtown shopping district. Otay Ranch Town Center has more than 100 top specialty
stores. According to the City’s 2015/2016 Comprehensive Annual Financial Report (latest
available for review), the top employers in the City are as reported on the following page.
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Employer No. of
Employees
Sweetwater Union High School District 4,385
Chula Vista Elementary School District 3,245
Rohr Inc./Goodrich Aerostructures 2,468
Sharp Chula Vista Medical Center 2,131
Southwestern College 1,409
Wal-Mart 1,239
City of Chula Vista 1,195
Scripps Mercy Hospital – Chula Vista 1,098
Costco 760
Aquatica 513
Education
The City is home to two school districts, one elementary level and one high school level.
The Chula Vista Elementary School District is the largest kindergarten through sixth grade
district in the State of California with 49 campuses. Wolf Canyon Elementary will be
serving the subject property. Sweetwater Union High School District serves as the primary
secondary school district. In addition Mater Dei Catholic High School is located within
Otay Ranch (two miles east of subject) along with the Chula Vista Academy of the Arts
Charter School (K-8th on Mater Dei campus). Southwestern College is a community
college in the city located about two and one-half miles north of the subject. It serves
approximately 19,000 students annually.
Transportation
The City is served by a large network of freeways and highways that include I-5 along the
western edge of the City, which runs south to Tijuana and north to Los Angeles and onto
Northern California. The I-805 serves as a bypass to the I-5. State Route 54 and State
Route 125 serve as highways to East County cities. The San Diego International Airport
serves as the city’s primary commercial airport. The airport is twelve miles northwest of
the city.
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Summary
In summary, the City of Chula Vista experienced substantial growth in the last 20 years
with future growth predicted. The City will play a significant role in the region’s growth
and is emerging as the hub of civic and cultural activity in South San Diego County. As
the second largest City in the County and historically one of the fastest growing cities in
the nation coupled with the business-friendly atmosphere, the are many opportunities for
both growing businesses and growing families in the City of Chula Vista.
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OTAY RANCH AND IMMEDIATE SURROUNDINGS
The Otay Ranch is a 5,300-acre pedestrian friendly master planned community located
in the eastern portion of the City of Chula Vista. Otay Ranch and the City planned a village
planning concept which provides urban villages that are approximately one-mile square
with distinct features defined by an open space system and major arterial streets. The
village planning promotes pedestrian-oriented villages providing essential facilities and
services to be located in each village core. The highest density residential is located in
each core and residential densities decrease towards each village perimeter. Below is a
map showing the overall Otay Ranch with the black star showing the location of the project
property.
The Millenia project in Otay Ranch consists of approximately 206 acres of mixed-use
development that is bounded by Birch Road on the north, Eastlake Parkway on the east,
Hunte Parkway on the south and the State Route 125 Freeway (South Bay Expressway)
on the west. It is fully entitled for about 3,000 residential uses and up to 3.4 million square
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feet of commercial and civic uses. Commercial development is to consist of retail, office
and hospitality land uses. Current, existing development within the Millenia Village
consists of a variety of residential and commercial projects. Below is an artist rendition
of Millenia with the subject sites identified by blue stars and proposed development
summarized on the table.
Name Product Status DU/SF Acres Density
Pulse Apts. Fully
Leased
273 DU 9.28 Ac 29.4/Ac
Volta & Duetta Affordable
Apts.
Open 210 DU 4.02 Ac 52.2/Ac
Evo, Metro & Trio Townhome Open 217 DU 12.8 Ac 17.0/Ac
Element by Shea Homes SFD Open 70 DU 10.26 Ac* 17.2/Ac*
“Z” by Shea Homes SFA Open 106 DU 10.26 Ac* 17.2/Ac*
Skylar by KB Home SFA Open 79 DU 7.27 Ac 10.9/Ac
CalAtlantic Homes SFA Under
Const.
78 DU 3.74 Ac 20.9/Ac
Lot 11 SFA Proposed 60 DU 3.07 Ac 19.54/Ac
Alexan by Trammel Crow Apts. Under
Const.
309 DU 9.25 Ac 33.4/Ac
Sudberry Retail Retail Proposed 131,000 SF 9.85 Ac N/A
Ayres Hotel Hotel Under 2.51 Ac N/A
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Const.
“Invent” Office Proposed 700,000 SF 10.93 Ac N/A
“Think” Office Proposed 324,100 SF 7.06 N/A
“Civic District” Proposed N/A 8.54 Ac N/A
Esplanade, Trammell Crow Apts. Proposed 253 DU 8.27 Ac 30.6/Ac
Future Development Sites N/A Future N/A N/A N/A
*Combined Acreage.
Immediately north of Millenia, on the north side of Birch Road is a large retail center known
as the Otay Ranch Town Center. Major tenants include Macy’s, Anthropologie, DSW
Shoes, AMC Theatres, H & M, Victoria’s Secret, Bath & Body Works, Barnes & Noble,
Aldo, Sephora, Jos. A. Bank, Best Buy and REI. Restaurants include Panera Bread,
Cheesecake Factory, Panda Express and Jersey Mike’s Subs. North of this retail area
and along the northerly side of Olympic Parkway is another retail center with Home Depot,
Walmart, Walgreens, Chase Bank and Chevron. Also, at this location, on the south side
of Olympic Parkway is a new, Residence Inn by Marriott. Further north are residential
neighborhoods consisting of both single family detached and attached product along with
Eastlake High School, Eastlake Country Club and other community related facilities.
Southwestern College (the local community college) is located about two miles northwest.
North of Chula Vista are the communities of Lemon Grove, Springs Valley, Rancho San
Diego and El Cajon.
Most areas east of Millenia consist of existing residential neighborhoods with both single
family detached and attached homes. The “Summit at Eastlake” is a neighborhood retail
center at the southeast corner of Eastlake Parkway and Birch Road. It is anchored by a
Von’s market with supporting tenants that include a Denny’s restaurant, In-and-Out
Burger and Bank of America. “Windingwalk at Otay Ranch” is an attached residential
project located adjacent to the retail center and there is a large vacant land parcel at the
northeast corner of Eastlake Parkway and Hunte Parkway. Approximately two miles to
the east and adjacent of Lower Otay Lake is the U.S. Olympic Training Center. It is on
155 acres and includes living and dining facilities with almost 300 beds as well as the
training facilities. There are six, natural grass athletic fields as well as other training
facilities for athletes. It is one of three such facilities in the country. Most of the land east
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of Otay Lakes consists of vacant unincorporated land. An ecological preserve totaling
11,375 acres is located just east of Otay Lakes.
Land southerly of Millenia is also vacant and proposed for the future Otay Ranch Villages
8 and 9 immediately to the south. Immediately to the southeast is a university site
containing 375 acres of land owned by the City of Chula Vista that are also within the
Otay Ranch master plan. This proposed university is projected for 20,000 students and
would offer cross border programs. The Otay River basin is just over one mile south and
Brown Field Municipal Airport about two miles south. The international border with Mexico
is about 4.5 miles south and the Tijuana Airport, known as General Abelardo I. Rodriguez
International Airport, is adjacent to the border and parallels Brown Field. There are two
international border crossings nearby. One at the termination of Interstate 805 and the
other at the termination of State Route 905.
State Route 125, known as the South Bay Expressway, is a toll road that forms the
westerly boundary of Millenia. On and off-ramps at Birch Road provide immediate access
to Millenia as well as areas to the east and west. Just west of the toll road are existing
residential neighborhoods of Village 6 and Village 7 of Otay Ranch in Chula Vista. Several
schools are located just west of SR 125 including Olympic High School, East Hills
Academy and Mater Dei Catholic High School. Otay Ranch Village 2 is also located west
of SR 125 with seven new home neighborhoods and Village 3 which is also known as
Escaya is about three miles west and has twenty-seven new home models offered for
sale within nine neighborhoods. Of the nine projects currently offering product for sale
seven are larger, single family detached programs that don’t compete directly with the
subject product. The remaining two projects are attached products. Interstate 805 is about
4.5 miles to the west and is a major freeway connecting with the international border to
the south and combining with Interstate 5 to the north. I-5 travels through the City of San
Diego, and the cities of Imperial Beach and National City. Major U.S. Navy facilities
including North Island Naval Air Station are located in San Diego Bay. San Diego
International Airport, also known as Lindbergh Field, is less than twelve miles northwest.
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Millenia is in the path of growth in inland area of southwestern San Diego County. It is in
the heart of the Otay Ranch Master Plan Community with an urbanized development plan
that will be within walking distance to employment, retail shopping and recreation.
Immediate Surroundings
As described, Millenia is a village within the larger master planned community of Otay
Ranch. The community is accessible via SR 125, Birch Road, Olympic Parkway and
Eastlake Parkway, all major improved streets providing access into Millenia.
Adjacent to the north is the Freeway Commercial area within Otay Ranch which has been
developed into the Otay Ranch Town Center. Adjacent to the west is Village 11 which
was developed in the early 2000s while to the south are the future villages of Otay Ranch
Village 8 and 9. SR 125 forms the western border of Millenia beyond which is the existing
Otay Ranch Village 7 which is nearing build-out.
Within Millenia there are existing apartments, new homes, both attached and detached
for sale, over 1,000,000 planned square feet of office space, a new hotel and a 135,000
square foot retail center under construction. Millenia is master planned as a walking
neighborhood making walking to restaurants, shops, parks, the library, on scenic trails
the emphasis of the community. As discussed and shown under the previous section,
the subject property refers to six parcels that are scattered throughout the community.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 27
CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 16-I
A Resolution of Intention to form City of Chula Vista CFD No. 16-I (Millenia) was approved
via Resolution No. 2016-154 by the City Council on August 26, 2016. At that time a CFD
Report was prepared by Willdan Financial Services which included a brief description of
CFD No. 16-I; a brief description of the facilities required at the time of formation to meet
the needs of CFD No. 16-I; a brief description of the boundaries of CFD 16-I and an
estimate of the cost of financing the bonds used to pay for the facilities.
The types of facilities eligible to be financed by CFD 16-I include street and bridge
improvements, sidewalks, trails, medians, traffic signalization and signage, street lights,
utilities, storm water collection and conveyance facilities, off-site storm detention and
treatment facilities, park and recreation facilities, fire facilities and equipment, library
facilities and equipment, transit facilities, fiber optic telecommunication system facilities,
general governmental office, administrative and meeting facilities, bus and rapid transit
facilities and land, rights of way and easements necessary for any of such facilities.
The proposed maximum authorized bonded indebtedness for CFD No. 16-I is
$20,000,000 for Improvement Area No. 1 (subject of this report) and $21,000,000 for
Improvement Area No. 2 (anticipated future bonds). The proceeds of CFD No. 16-I will
be used to fund public facilities as described above. At time of the CFD Report, the
estimated cost of such facilities was approximately $94.4 million, thus the CFD will not
generate sufficient funds to finance all of the costs. Any facilities costs not covered by
CFD bond proceeds and special taxes will remain the responsibility of the developer.
The CFD Report also included the Rate and Method of Apportionment (RMA) which
provides sufficient information to allow a property owner within CFD No. 16-I to estimate
the Maximum Special Tax for his or their property. Per the latest sources and uses report
(dated February 13, 2018), CFD No. 16-I Improvement Area 1 bonds are anticipated to
fund $11,616,514 in Project Fund Deposits by a bond par amount estimated at
$13,240,000 with $1,197,961 in capitalized interest and debt service reserve fund and
$415,000 in issuance costs and underwriter’s discount.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 28
SUBJECT PROPERTY DESCRIPTIONS
The subject property consists of a portion of the community known as Millenia in the
master planned community of Otay Ranch in the City of Chula Vista. Below is a map
showing all of Millenia with the six subject parcels identified by different colored stars.
Color ID Lot/Tract Number Ownership Acres Units
Black Star Lot 1/16081 SLF – IV Millenia
LLC(Meridian)
10.93 N/A
Lt. Blue Star Lot 7/16081 LMC-Millenia Inv..
Company L.P.
7.06 N/A
Orange Star Lot 11/16081 SLF – IV Millenia
LLC(Meridian)
3.07 60
Green Star Lot 1/16150 Shea Homes 10.26 176
Yellow Star Lot 14/16081 KB Home 7.27 79
Dk Blue Star Lot 17/16081 CalAtlantic 3.74 78
Each of the ownerships will be described on the following pages.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 29
SLF IV - Millenia LLC Ownership
SLF IV – Millenia LLC is the master developer ownership entity and has contracted with
Meridian Development to act as development manager. SLF IV – Millenia LLC holds title
to the two parcels shown below which are described in this section.
Location: Parcel 1 (Black Star): North side of Optima Street between Millenia
Avenue and SR 125, Millenia, Otay Ranch, Chula Vista, California.
Parcel 2 (Orange Star): Northeast corner of Optima Street and Orion
Avenue, Millenia, Otay Ranch, Chula Vista, California.
Legal Property
Description: Parcel 1: Lot 1 of Tract Map 16081, City of Chula Vista.
Parcel 2: Lot 11 of Tract Map 16081, City of Chula Vista
Thomas Guide: San Diego 1331 F&G - 2
Property Owner: Both Lot 1 and Lot 11 of Tract 16081 are owned by SLF IV Millenia
LLC, a Delaware limited liability company.
Assessors
Parcel Nos.: Lot 1 of Tract 16081: 643-060-51
Lot 11 of Tract 16081: 643-060-61
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 30
Property Taxes: Lot 1 of Tract 16081: Per the San Diego County Assessor’s Office,
the assessed value for APN 643-060-051 is $2,208,883 and the
2017/18 property taxes are $32,728.36. The total property tax
invoice includes $22,088.82 for the basic levy, $3,198.68 for voter
approved bonds and fixed charged assessments of $7,440.86 which
includes City of Chula Vista CFD 14M in the amount of $4,865.34
and City of Chula Vista CFD 97-2 in the amount of $2,008.48 and
$567.04 in miscellaneous charges.
Lot 11 of Tract 16081: Per the San Diego County Assessor’s Office,
the assessed value for APN 643-060-061 is $852,937 and the
2017/18 property taxes are $10,839.20. The total property tax
invoice includes $8,529.36 for the basic levy, $1,235.15 for voter
approved bonds and fixed charged assessments of $1,074.69 which
includes City of Chula Vista CFD 14M in the amount of $803.10 and
City of Chula Vista CFD 97-2 in the amount of $109.44 and $162.16
in miscellaneous charges.
It should be noted that the subject CFD 16-I is not yet listed or
included in the 2017/18 property tax bill. Per the Rate and Method
of Apportionment for CFD 16-I Lot 1 (located in Zone C) is estimated
to have an assigned tax of $6,000 per Acre (annual) and Lot 11
(located in Zone B) is estimated to have an assigned tax of between
$1,350 to $1,649 per unit depending on house size.
Three-Year
Sales History: SLF IV-Millenia LLC has held title to the subject property for more
than three years.
Lot 1 of Tract 16081 is under contract to be sold to LMC-Millenia
Investment Company L.P., a California limited partnership for
$3,923,554.95. We have reviewed several amendments to the
purchase and sale agreement which included increased grading
costs at buyers request to be passed on to the buyer along with
extension payments. Per Amendment 3 it appears the Lot 1 closing
is extended to July 1, 2018, however there have been several
extensions to date. Included in the Purchase and Sales Agreement
is Lot 19 which is not located within CFD 16-I Improvement Area 1
and thus not a part of this appraisal.
Size and Shape: Lot 1 of Tract 16081 is irregular in shape and totals 10.93 acres per
Tract Map 16081.
Lot 11 of Tract 16081 is generally square in shape and contains 3.07
acres per Tract Map 16081.
Zoning: The subject property is designated Eastern Urban Center (Millenia)
per the current City of Chula Vista Zoning Map. Per the Otay Ranch
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 31
Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan,
Lot 1 is shown as a portion of the Business District, and Lot 11 is
shown as a portion of the Eastern Gateway Neighborhood District.
The Business District which covers Lots 1 and 19 of Tract 16081,
allows for a low of 500,000 square feet and a high of 1,900,000
square feet with a target of 1,362,000 square feet. In addition, the
Business District allows for a lot of 0 dwelling units, a high of 150
dwelling units and a target of 100 dwelling units.
The Eastern Gateway Neighborhood District, which covers Lots 5,
10, 11 and 12 of Tract 16081, allows for a low of 150 dwelling units
and a high of 750 dwelling units with a target of 400 dwelling units.
There is also some service commercial allowed within the Eastern
Gateway Neighborhood District with a low of 5,000 square feet, a
high of 250,000 square feet and a target of 50,000 square feet.
Entitlements: The subject property is encompassed by Chula Vista Tract No. 09-
03 (Otay Ranch Millenia Eastern Urban Center) with further mapping
under Tract Map No. 16081 which is known as Otay Ranch Millenia
Phase 2. A copy of the Tract Map is located in the Addenda. Tract
Map 16081 subdivides the property into 22 buildable lots. Per the
marketing documents Lot 1 is proposed for 700,000 square feet of
office space and Lot 11 is proposed for 60 residential units
suggesting a density of 19.54 dwelling units per acre.
Topography: The subject property has been partially developed with both Lot 1
and Lot 11 mass graded into generally level superpads with the
majority of surrounding infrastructure in place. Drainage for both lots
is proposed within an in-street storm drain system.
Soils Condition: We have reviewed an Updated Geotechnical Report by Geocon
Incorporated prepared for all of Millenia dated February 7, 2012. The
report concluded that it was the opinion of Geocon that the subject
property could be developed as planned provided that the
recommendations made in the report were followed. We also
reviewed the final Report of Testing and Observation Services
Performed During Site Grading for Millenia Phase 2 prepared by
Geocon and dated June 13, 2017. The report states the subject
property was graded during the period of December 2015 through
June 2017. The report documents that the grading of Millenia Phase
2 (covers Lot 1 and Lot 11) has been performed in a substantial
conformance with the recommendations of the project update
geotechnical report and addenda.
It is an assumption of this report that the soils are adequate to
support the highest and best use conclusion and that all
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 32
recommendations made relating to soil conditions within the reports
were adhered to during construction. This is evidenced by City
inspectors on site throughout construction as well as Certificates of
Occupancy permits being obtained within the Millenia project.
Seismic
Information: Per the California Department of Conservation, the subject property
is not located within an Alquist Priolo Earthquake Study Zone.
Environmental
Concerns: We have reviewed a Phase I Environmental Site Assessment for the
entire Millenia project prepared by Coast 2 Coast Environmental, Inc.
of Del Mar, California and dated May 22, 2013. Based on Coast 2
Coast’s observations, the following recognized environmental
conditions were observed:
• Three sites within one-half mile radius of the perimeter of
Millenia appear on the State of California Department of Toxic
Substances Control’s EnviroStor and School databases
and/or the State Water Resources Control Board’s SLIC
database. These sites were listed following soil testing for
past pesticide use associated with agricultural row crops
which were located on these sites from at least mid-1930s
through 1996. Previous Phase I Environmental Site
Assessments of the site have stated that it shared a similar
agricultural history with the adjoining and nearby sites which
were listed in the regulatory databases. In 2006 and 2007 soil
sampling was conducted on the property for organochlorine
pesticides and arsenic. Toxophene, an insecticide, was found
in concentrations above the U.S. EPA Region IX’s Preliminary
Remediation Goals for residential use in the upper one foot of
soil in three areas within Millenia.
The following recommendations were made:
• A soil reuse plan was prepared which recommended special
handling in three areas with all soil reused onsite and no
recommendations for offsite soil disposal necessary.
• Further environmental assessment of the site, beyond what is
listed above, is not warranted at this time.
It is an assumption of this report that the subject property is free and
clear of any environmental issues which would slow or thwart
development of the site and that all recommendations contained in
the FEIR were adhered to. This is suggested by City inspectors on
site throughout construction.
Flood Information: Per the City of Chula Vista Website, the subject property is not
located within a FEMA Flood Zone.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 33
Easements and
Encumbrances: We have reviewed a Preliminary Title Report prepared by First
American Title Company dated December 15, 2017 which covers
Lots 1, 7, 11, 13 and 17 of Tract 16081, five of the six subject parcels.
The exceptions are as follows:
Items Nos. 1-7 and 11 refer to property taxes on the subject property.
Item Nos. 8 and 9 refer to a special tax lien for CFD No. 18 of the
Chula Vista Elementary School District (not showing on tax invoices
at this time). Item No. 10 refers to the subject CFD No. 16-I
Improvement Area 1 (again, not showing on the tax invoices at this
time). Item No. 12 is in regards to an agreement regarding
indemnification, implementation of mitigation and payment of certain
fees in connection with the approval of the General Plan Amendment
for Otay Ranch in 1993. Item No. 13 is in regards to a Development
Agreement recorded on the property. Item No. 14 is in regards to a
Parks Agreement. Item No. 15 pertains to Resolution No. 2009-224
recorded on the site in 2011. Item Nos. 16, 17 and 21 refer to
Subdivision Improvement Agreements and a Supplemental
Subdivision Improvement Agreement recorded on the property. Item
Nos. 18, 24, 34 and 37 refer to CC & Rs recorded on the property.
Item No. 19 pertains to a Grant of Easements, License and
Maintenance for Millenia. Item No. 20 refers to a Maintenance
Agreement for Interim Drainage Improvements. Item No. 22, 23, 25
and 31 refer to easements. Item Nos. 26, 35 and 38 refer to right of
first refusals on the property. Item Nos. 27, 36 and 39 refer to options
in favor of the master developer. Item Nos. 28 and 32 pertain to two
deeds of trust on Lot 7 of Tract 16081 totaling $4,300,000. Item Nos.
29 and 30 pertain to a document entitled Declaration of Restrictions,
Grant of Reciprocal Easements, Joint Use and Maintenance. Item
No. 33 refers to an Encroachment Maintenance Agreement. Item
No. 40 is in regards to a Construction, Easement and Maintenance
Agreement. Item No. 41 pertains to a Joint Use, Easement and
Maintenance Agreement. Item No. 42 refers to water rights while
Item 43 refers to the rights of parties in possession of the lands. Item
Nos. 44, 45 and 46 refer to the items the Title Company will require
prior to the issuance of a policy of title insurance.
It is an assumption of this appraisal report that the subject lands are
free and clear of any liens and/or encumbrances other than CFD 16-
I IA 1 and the aforementioned existing CFDs. The appraisers are not
title experts and it is recommended that any concerns relating to title
should be addressed to the appropriate experts.
Utilities: All normal utilities serve or will serve the subject property by the
following companies:
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 34
Electrical: San Diego Gas & Electric Company
Natural Gas: San Diego Gas & Electric Company
Sewer: City of Chula Vista
Water: Otay Water District
Schools: Chula Vista Elementary School District
Sweetwater Union High School District
Streets/Access: Access to Millenia is via SR 125, exit Birch Road and east to the
subject property. SR 125 is accessible via I-5 or I-805 east on SR
54. Millenia is bounded by SR 125 on the west, Birch Road on the
north and Eastlake Parkway on the east.
Lot 1 of Tract 16081 has frontage along SR 125 with access via Birch
Road to Millenia Avenue (paved the entire length of Millenia) and
south to Lot 1.
Lot 11 of Tract 16081 has access via Birch Road to Orion Avenue
which is paved to the subject site.
Current Condition: Lot 1 of Tract 16081 is highlighted on the aerial map below. It has
been mass graded to a pad with a basement area for future buildings
graded into the south side of the site. The construction immediately
to the north is an Ayres Hotel while the construction to the northeast
is an apartment complex by Trammel Crow. It should be noted that
the development to the north and northeast are not a part of the
subject properties.
Lot 11 of Tract 16081 is highlighted on the aerial map on the following
page. It has been mass graded and surrounding streets are in place.
It appears the site is being used as a storage area for surrounding
construction. Adjacent to the north is an affordable housing project
developed by Chelsea consisting of 210 apartment units. Adjacent
to the east is the currently selling Trio, Evo and Metro, small lot and
attached neighborhoods being developed by Meridian Development
(master developer). It should be noted that the surrounding
development is not a part of the subject property.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 35
Remaining Costs: We have received remaining costs from the master developer
associated with the offsite development of the six parcels within CFD
16-I Improvement Area 1. The remaining development costs are
summarized below.
Description Amount
Signals/Final Lift $500,000
Pedestrian Corridors $453,750
Total $953,750
The above costs are associated with the master developer and will
not be passed through to the various builders. For purposes of this
analysis, the costs will be spread evenly on a per-acre basis over the
two remaining master developer owned parcels. Lot 1 contains
10.93 acres while Lot 11 is 3.07 acres for a total acreage of 14.0.
Dividing the total remaining master development costs over the 14
acres equates to a per acre amount of $68,125.
Lot 1 of Tract 16081 – Commercial lands are typically sold either as
raw land or in a superpad condition. This valuation is for the lands
in their “as is” condition. As the property has already been mass
graded and is in a superpad condition, there are no remaining costs
to complete. The additional grading will be taken into consideration
under the valuation section later within this report. As discussed
above there are remaining master developer costs of $68,125 per
acre. Lot 1 contains 10.93 acres, thus is responsible for $744,606
(say) $745,000 in remaining development costs.
Lot 11 of Tract 16081 – Residential lands are typically sold in either
a finished lot or a superpad condition. We have reviewed cost
estimates to develop Lot 11 into 60 finished lots. The estimate
includes $9,000 per unit for Design and Engineering, $29,000 per
unit for land development and $40,600 per unit for development fees
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 36
for a total estimate of $78,600 per unit or $4,715,000 for the
proposed 60 units. As discussed above there are remaining master
developer costs of $68,125 per acre. Lot 11 contains 3.07 acres,
thus is responsible for $209,143 (say) $210,000 in remaining
development costs.
There is a master developer monthly HOA fee of $45 per residence
and $1,080 per acre for the commercial property.
Proposed
Improvements: Lot 1 of Tract 16081 is proposed for 700,000 square feet of office/Life
Science/High Tech space which can be expandable to over one
million square feet. Current marketing is for “Invent”, Phase II of the
Think, Invent and Discover commercial area on Lot 7 (sold to
Chesnut), Lot 1 (this parcel) and Lot 19 (not a part of the subject
property).
Lot 11 of Tract 16081 is proposed for 60 residential units.
LMC-Millenia Investment Company, L.P. Ownership (Proposed Think Office Campus)
LMC-Millenia Investment Company, L.P. is a related entity to Chesnut Properties.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 37
Location: Northeast corner of Optima Street and Millenia Avenue, Millenia,
Otay Ranch, Chula Vista, California. Identified above by the light
blue star.
Legal Property
Description: Lot 7 of Tract Map 16081, City of Chula Vista
Thomas Guide: San Diego 1331 F&G - 2
Property Owner: LMC-Millenia Investment Company, L.P., a limited partnership
Assessors
Parcel Nos.: 643-060-57
Property Taxes: Per the San Diego County Assessor’s Office, the Assessed value for
APN 643-060-057 is $2,620,005 and the 2017/18 property taxes are
$17,400.87. The total property tax invoice includes $26,200.04 for
the basic levy, $3,794.01 for voter approved bonds and fixed charged
assessments of $4,807.68 which includes City of Chula Vista CFD
14M in the amount of $3,142.66 and City of Chula Vista CFD 97-2 in
the amount of $1,297.32 and $367.70 in miscellaneous charges.
It should be noted that the subject CFD 16-I is not yet listed or
included in the 2017/18 property tax bill. Per the Rate and Method
of Apportionment for CFD 16-I the estimated assigned special tax for
Lot 7 (located in Zone C) is $6,000 per acre annually.
Three-Year
Sales History: LMC-Millenia Investment Company L.P. purchased the property in
February 2016 (per the master developer) from SLF IV-Millenia LLC
for $2,586,633.01 per the purchase and sale agreement.
Size and Shape: Lot 7 of Tract 16081 is irregular in shape and totals 7.06 acres per
Tract Map 16081.
Zoning: The subject property is designated Eastern Urban Center (Millenia)
per the current City of Chula Vista Zoning Map. Per the Otay Ranch
Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan,
Lot 7 is shown as a portion of the Mixed Use Civic/Office Core
District.
The Mixed Use Civic/Office Core District covers lots 7 and 16 of Tract
16081, allows for a low of 100,000 square feet and a high of
1,000,000 square feet with a target of 900,000 square feet. In
addition, the Mixed Use Civic/Office Core District allows for a low of
0 dwelling units, a high of 300 dwelling units and a target of 200
dwelling units.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 38
Entitlements: The subject property is encompassed by Chula Vista Tract No. 09-
03 (Otay Ranch Millenia Eastern Urban Center) with further mapping
under Tract Map No. 16081 which is known as Otay Ranch Millenia
Phase 2. A copy of the Tract Map is located in the Addenda. Tract
Map 16081 subdivides the property into 22 buildable lots. Per the
proposed plans Lot 7 is planned for a 318,000 square feet office
campus with a 6,100 square foot free-standing amenity building and
a parking garage.
Topography: The subject property has been partially developed with Lot 7 mass
graded into a generally level superpad with a below-ground graded
area for the underground parking for a proposed parking garage.
Drainage is proposed within an in-street storm drain system.
Soils Condition: The subject parcel was covered in the Soils Report that was
discussed under the previous property description section.
It is an assumption of this report that the soils are adequate to
support the highest and best use conclusion and that all
recommendations made relating to soil conditions within the reports
were adhered to during construction. This is evidenced by City
inspectors on site throughout construction as well as Certificates of
Occupancy permits being obtained within the Millenia project.
Seismic
Information: Per the California Department of Conservation, the subject property
is not located within an Alquist Priolo Earthquake Study Zone.
Environmental
Concerns: The subject parcel was covered in the Phase I Site Assessment
discussed under the previous property description section.
It is an assumption of this report that the subject property is free and
clear of any environmental issues which would slow or thwart
development of the site and that all recommendations contained in
the FEIR were adhered to. This is suggested by City inspectors on
site throughout construction.
Flood Information: Per the City of Chula Vista Website, the subject property is not
located within a FEMA Flood Zone.
Easements and
Encumbrances: The subject parcel was covered in the Title Report discussed under
the previous property description section.
It is an assumption of this appraisal report that the subject lands are
free and clear of any liens and/or encumbrances other than CFD 16-
I IA 1 and the aforementioned existing CFDs. The appraisers are not
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 39
title experts and it is recommended that any concerns relating to title
should be addressed to the appropriate experts.
Utilities: All normal utilities serve or will serve the subject property by the
following companies:
Electrical: San Diego Gas & Electric Company
Natural Gas: San Diego Gas & Electric Company
Sewer: City of Chula Vista
Water: Otay Water District
Schools: Chula Vista Elementary School District
Sweetwater Union High School District
Streets/Access: Access to Millenia is via SR 125, exit Birch Road and east to the
subject property. SR 125 is accessible via I-5 or I-805 east on SR
54. Millenia is bounded by SR 125 on the west, Birch Road on the
north and Eastlake Parkway on the east.
Access to the subject parcel is via Birch Road to Millenia Avenue,
south to the subject site.
Current Condition: Lot 7 is highlighted on the aerial map below. It has been mass
graded to a pad with a basement area for the proposed parking
structure for the future building. Construction is anticipated to begin
in Fall 2018. The construction immediately to the northwest is an
Ayres Hotel while the construction to the north is a mixed-use project
including apartments by Trammel Crow. It should be noted that the
development to the northwest and north are not a part of the subject
properties.
Remaining Costs: Commercial lands are typically sold in either a raw land or a
superpad condition. This valuation is for the lands in their “as is”
condition. As the property has already been mass graded, there are
no remaining costs to complete. The additional grading will be taken
into consideration under the valuation section later within this report.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 40
There is a master HOA fee of $1,080 per acre per month for
commercial property.
Proposed
Improvements: Lot 7 is proposed for 318,000 square feet of Medical/Office buildings
including a 150,000 square foot building and a 168,000 square foot
building along with a 6,100 square foot amenity space building and
a parking garage. Current marketing is for “Think”, Phase I of the
Think, Invent and Discover commercial area on Lot 7 (subject site),
Lot 1 and Lot 19. Per Chesnut Properties representatives, the
following has been expended on the site through December 29,
2017.
Description Amount
Architect $2,110,286
Capitalized Interest 315,089
Carry Cost 26,142
Civil Engineering 290,883
Closing Costs 7,333
Construction Documents 62,272
Consultants 88,675
DRB 69,887
Engineers 47,430
Landscape Architects 365,576
LEED 291,168
Legal Fees 42,428
Grading 350,000
Land Cost 2,568,633
Marketing 310,672
Property Tax 64,647
Total $7,011,120
While some of the above costs add value to the subject parcel,
items like interest, carrying costs, closing costs and property taxes
do not add value to the land. The above expenditures will be
considered in the final valuation of the site later within this report.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 41
CalAtlantic Ownership (Boulevard)
Location: Southeast corner of Strata Street and Millenia Avenue, Millenia, Otay
Ranch, Chula Vista, California. Identified above by the dark blue
star.
Legal Property
Description: Lot 17 of Tract Map 16081, City of Chula Vista. In addition there was
a lot line adjustment recorded (Adjustment Plat No. 17-0006
recorded 10/20/17) which changed Lot 17 to a total of 3.739 acres.
Per the Adjustment Plat Lot 17 is known as Parcel B.
Thomas Guide: San Diego 1331 F&G - 2
Property Owner: CalAtlantic Group Inc., a Delaware Corporation. (CalAtlantic has
merged with Lennar since this purchase).
Assessors
Parcel Nos.: 643-060-94 (formerly 643-060-67)
Property Taxes: The San Diego County Assessor’s Office does not have information
for APN 643-060-94 however they do have information on the former
APN number. Per the San Diego County Assessor’s Office the
Assessed value for APN 643-060-67 is $1,250,234 and the 2017/18
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 42
property taxes are $18,247.55. The total property tax invoice
includes $12,502.33 for the basic levy, $1,810.47 for voter approved
bonds and fixed charged assessments of $3,934.75 which includes
City of Chula Vista CFD 14M in the amount of $2,003.10 and City of
Chula Vista CFD 97-2 in the amount of $826.90 and $100.82 in
miscellaneous charges. The San Diego County Assessor’s Office
does not yet reflect the June 2017 sale of the property to CatAtlantic
Homes. It appears there will be a supplemental tax bill.
It should be noted that the subject CFD 16-I is not yet listed or
included in the 2017/18 property tax bill. Per the Rate and Method
of Apportionment of CFD 16-I the estimated assigned special tax for
Lot 17 (located in Zone B) is between $1,350 and $1,649 per unit per
year based on the house square footage.
Three-Year
Sales History: CalAtlantic Group Inc., a Delaware Corporation purchased the
property June 9, 2017 from SLF IV Millenia LLC, the master
developer, for $3,510,000.
Size and Shape: Lot 17 of Tract 16081 with lot line adjustment per Adjustment Plat
No. 17-0006, is irregular in shape and totals 3.739 acres.
Zoning: The subject property is designated Eastern Urban Center (Millenia)
per the current City of Chula Vista Zoning Map. Per the Otay Ranch
Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan,
Lot 17 is shown as a portion of the Central Southern Neighborhood
District.
The Central Southern Neighborhood District covers a portion of lots
15 and 22 along with Lots 14 and 17 of Tract 16081, and allows for
a low of 300 dwelling units and a high of 700 dwelling units with a
target of 500 dwelling units. In addition, the Central Southern
Neighborhood District allows for a low of 2,000 square feet of
commercial space, a high of 200,000 square feet of commercial
space and a target of 50,000 square feet of commercial space.
Entitlements: The subject property is encompassed by Chula Vista Tract No. 09-
03 (Otay Ranch Millenia Eastern Urban Center) with further mapping
under Tract Map No. 16081 which is known as Otay Ranch Millenia
Phase 2. A copy of the Tract Map is located in the Addenda. In
addition, Adjustment Plat No. 17-0006 was recorded on the property
which adjusted the lot line between Lot 17 and Lot 14 of Tract 16081.
Tract Map 16081 subdivides the property into 22 buildable lots. Per
the proposed plans Lot 17 is proposed for 78 attached townhomes
suggesting a density of 20.86 dwelling units per acre.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 43
Topography: The subject property has been mass graded with Lot 17 mass graded
into a generally level superpad with surrounding streets on the north
and west (Strata Street and Millenia Avenue) in place. Currently
CalAtlantic is grading the site. Drainage is proposed within an in-
street storm drain system.
Soils Condition: The subject parcel was covered in the Soils Report that was
discussed under the previous property description section. It is an
assumption of this report that the soils are adequate to support the
highest and best use conclusion and that all recommendations made
relating to soil conditions within the report were adhered to during
construction. This is evidenced by City inspectors on site throughout
construction as well as Certificates of Occupancy permits being
obtained within the Millenia project.
Seismic
Information: Per the California Department of Conservation, the subject property
is not located within an Alquist Priolo Earthquake Study Zone.
Environmental
Concerns: The subject parcel was covered in the Phase I Site Assessment
discussed under the previous property description section.
It is an assumption of this report that the subject property is free and
clear of any environmental issues which would slow or thwart
development of the site and that all recommendations contained in
the FEIR were adhered to. This is suggested by City inspectors on-
site during construction.
Flood Information: Per the City of Chula Vista Website, the subject property is not
located within a FEMA Flood Zone.
Easements and
Encumbrances: The subject parcel was covered in the Title Report discussed under
the previous property description section.
It is an assumption of this appraisal report that the subject lands are
free and clear of any liens and/or encumbrances other than CFD 16-
I IA 1 and the aforementioned existing CFDs. The appraisers are not
title experts and it is recommended that any concerns relating to title
should be addressed to the appropriate experts.
Utilities: All normal utilities serve or will serve the subject property by the
following companies:
Electrical: San Diego Gas & Electric Company
Natural Gas: San Diego Gas & Electric Company
Sewer: City of Chula Vista
Water: Otay Water District
Schools: Chula Vista Elementary School District
Sweetwater Union High School District
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 44
Streets/Access: Access to Millenia is via SR 125, exit Birch Road and east to the
subject property. SR 125 is accessible via I-5 or I-805 east on SR
54. Millenia is bounded by SR 125 on the west, Birch Road on the
north and Eastlake Parkway on the east.
Access to the subject parcel is via Birch Road to Millenia Avenue,
south to the subject site.
Current Condition: CalAtlantic has just begun grading its site to be developed into 78
townhome units. Below is an aerial photo of the CalAtlantic site
highlighted in yellow (boundaries approximate) showing the current
status of the lands.
Costs to Complete: We have reviewed the land development costs prepared by
CalAtlantic and/or its consultants. The total project costs along with
the spent to date amounts are shown on the table below.
Total Costs Actuals Thru
1/31/18
Grading $653,050 $27,034
Wet Utilities $1,015,575 $0
Dry Utilities $231,500 $0
Streets (Curb/Gutter/Storm Drain/etc) $343,007 $0
Engineering/Soils, Plan Check & Inspec. $829,543 $205,993
Development Fees $3,298,582 $0
Total $6,371,257 $233,027
According to the above information, in order to develop the subject
property into a true finished lot condition, an additional $6,138,230
needs to be spent. This amount will be taken into account in the
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 45
valuation section for the CalAtlantic owned property later within this
report.
HOA: We have not received the estimated HOA costs for the CalAtlantic
proposed product. The master developer HOA monthly fee is $45
per residence.
Proposed
Improvements: Lot 17 is proposed for 78 attached townhome units with models
slated to begin construction in March 2018. Underground work and
grading is now underway on the site. The project is anticipated to be
known as Boulevard with home sizes ranging from 1,681 to 2,046
square feet and pricing anticipated to be in the $445,000 to $495,000
range.
KB Home Ownership (Skylar)
Location: Southwest corner of Strata Street and Orion Avenue, Millenia, Otay
Ranch, Chula Vista, California. Identified above by the yellow star.
Legal Property
Description: Lot 14 of Tract Map 16081, City of Chula Vista. In addition there was
a lot line adjustment recorded (Adjustment Plat No. 17-0006
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 46
recorded 10/20/17 – copy located in Addenda) which changed Lot
14 to a total of 7.269 acres. Per the Adjustment Plat Lot 14 is known
as Parcel A.
Thomas Guide: San Diego 1331 F&G - 2
Property Owner: KB Home California LLC.
Assessors
Parcel Nos.: 643-060-93 (formerly 643-060-64)
Property Taxes: The San Diego County Assessor’s Office does not have information
for APN 643-060-93 however they do have information on the former
APN number. Per the San Diego County Assessor’s Office, the
Assessed value for APN 643-060-64 is $1,808,673 and the 2017/18
property taxes are $26,396.28. The total property tax invoice
includes $18,086.72 for the basic levy, $2,619.16 for voter approved
bonds and fixed charged assessments of $5,690.40 which includes
City of Chula Vista CFD 14M in the amount of $2,897.84 and City of
Chula Vista CFD 97-2 in the amount of $1,196.26 and $144.06 in
miscellaneous charges. The San Diego County Assessor’s Office
does not yet reflect the June 2017 sale of the property to KB Home
California. It appears there will be a supplemental tax bill.
It should be noted that the subject CFD 16-I is not yet listed or
included in the 2017/18 property tax bill. Per the Rate and Method
of Apportionment of CFD 16-I the estimated assigned special tax for
Lot 17 (located in Zone B) is between $1,350 and $1,649 per unit per
year based on the house square footage.
Three-Year
Sales History: KB Home California LLC purchased the land on June 7, 2017 from
SLF IV Millenia LLC, the master developer, for $7,265,000.
Size and Shape: Lot 14 of Tract 16081 with lot line adjustment per Adjustment Plat
No. 17-0006, is irregular in shape and totals 7.269 acres.
Zoning: The subject property is designated Eastern Urban Center (Millenia)
per the current City of Chula Vista Zoning Map. Per the Otay Ranch
Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan,
Lot 14 is shown as a portion of the Central Southern Neighborhood
District.
The Central Southern Neighborhood District covers a portion of lots
15 and 22 along with Lots 14 and 17 of Tract 16081, and allows for
a low of 300 dwelling units and a high of 700 dwelling units with a
target of 500 dwelling units. In addition, the Central Southern
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 47
Neighborhood District allows for a low of 2,000 square feet of
commercial space, a high of 100,000 square feet of commercial
space and a target of 45,000 square feet of commercial space.
Entitlements: The subject property is encompassed by Chula Vista Tract No. 09-
03 (Otay Ranch Millenia Eastern Urban Center) with further mapping
under Tract Map No. 16081 which is known as Otay Ranch Millenia
Phase 2. A copy of the Tract Map is located in the Addenda. In
addition, Adjustment Plat No. 17-0006 was recorded on the property
which adjusted the lot line between Lot 17 and Lot 14 of Tract 16081.
Tract Map 16081 subdivides the property into 22 buildable lots. Per
the proposed plans Lot 14 is proposed for 79 detached homes on
small lots suggesting a density of 10.87 dwelling units per acre).
Topography: The subject property has been mass graded with Lot 14 mass graded
into a generally level superpad with surrounding streets on the north
and west (Strata Street and Millenia Avenue) in place. KB Home
further graded the property adding finished pads for its proposed
homes. Drainage is proposed within an in-street storm drain system.
Soils Condition: The subject parcel was covered in the Soils Report that was
discussed under the previous property description section.
It is an assumption of this report that the soils are adequate to
support the highest and best use conclusion and that all
recommendations made relating to soil conditions within the reports
were adhered to during construction. This is evidenced by City
inspectors on site throughout construction as well as Certificates of
Occupancy permits being obtained within the Millenia project.
Seismic
Information: Per the California Department of Conservation, the subject property
is not located within an Alquist Priolo Earthquake Study Zone.
Environmental
Concerns: The subject parcel was covered in the Phase I Site Assessment
discussed under the previous property description section.
It is an assumption of this report that the subject property is free and
clear of any environmental issues which would slow or thwart
development of the site and that all recommendations contained in
the FEIR were adhered to. This is suggested by City inspectors on-
site during construction.
Flood Information: Per the City of Chula Vista Website, the subject property is not
located within a FEMA Flood Zone.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 48
Easements and
Encumbrances: The subject parcel was covered in the Title Report discussed under
the previous property description section.
It is an assumption of this appraisal report that the subject lands are
free and clear of any liens and/or encumbrances other than CFD 16-
I IA 1 and the aforementioned existing CFDs. The appraisers are not
title experts and it is recommended that any concerns relating to title
should be addressed to the appropriate experts.
Utilities: All normal utilities serve or will serve the subject property by the
following companies:
Electrical: San Diego Gas & Electric Company
Natural Gas: San Diego Gas & Electric Company
Sewer: City of Chula Vista
Water: Otay Water District
Schools: Chula Vista Elementary School District
Sweetwater Union High School District
Streets/Access: Access to Millenia is via SR 125, exit Birch Road and east to the
subject property. SR 125 is accessible via I-5 or I-805 east on SR
54. Millenia is bounded by SR 125 on the west, Birch Road on the
north and Eastlake Parkway on the east.
Access to the subject parcel is via Birch Road to Millenia Avenue,
south to Strata Street and east to the subject entrance.
Current Condition: Skylar is currently being developed into 79 single family detached
homes on small detached lots. Below is an aerial photo of the Skylar
site highlighted in yellow (boundaries approximate) showing the
current status of the lands.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 49
There are two completed models at the northeast corner of the site
and six production units are under construction. Most of the grading
is complete along with wet utilities. The dry utilities are being
installed as the pads get completed. Internal streets have not been
paved yet due to the utilities not being finalized.
Costs to Complete: We have reviewed the land development costs prepared by KB
Home and/or its consultants. The total project costs along with the
spent to date amounts are shown on the table below.
Total Costs Actuals Thru
1/31/18
Grading $140,000 $120,000
Wet Utilities $1,200,000 $950,000
Dry Utilities $604,229 $30,000
Streets (Curb/Gutter/Storm Drain/etc) $750,000 $0
Plan Check & Inspec. $177,000 $177,000
Engineering/Soils $371,708 $283,433
Development Fees $4,089,406 $93,783
Total $7,332,343 $1,654,216
According to the above information, in order to develop the subject
property into a true finished lot condition, an additional $5,678,127
needs to be spent. This amount will be taken into account in the
valuation section for the KB Home owned property later within this
report.
HOA: Per KB Home’s marketing information the HOA fees will be $146 per
month at completion which covers walls, fencing, recreation area and
common area maintenance. In addition there is a master developer
HOA fee of $45 per residence per month.
Improvement
Description: KB Home is developing detached homes on small lots (under 2,000
square feet). The homes are three-story with a two-car attached
garage, a bonus room and bathroom (can be converted to a fourth
bedroom) on the first floor; a great room and kitchen with a powder
room on the second floor; and, three bedrooms and two bathrooms
on the third floor. The homes are angled with a modern design with
an entrance pathway between the homes. Exteriors are stucco finish
with some decorative stone or wood siding, automatic garage doors
and porches on the first floor and a balcony on the second floor.
Interiors include a walk-in closet in the master bedroom, a separate
water closet in master bath, laundry rooms on the third floor, tankless
water heaters and energy efficient appliances throughout.
There are two plans. The model homes are completed and the first
phase of construction of six homes is underway. The below chart
shows the various plan sizes.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 50
Plan
Room
Count
Floors/
Parking
Sq.
Ft.
Ind.
Owned
Bldr.
Owned
1 4 / 3.5 3 / 2 2,602 0 1*
2 4 / 3.5 3 / 2 2,659 0 1*
Total 0 2
*One of each of these plans is a model home.
Shea Homes Ownership (Element and Z)
Location: South side of Strata Street between Orion Avenue and Eastlake
Parkway, Millenia, Otay Ranch, Chula Vista, California. Identified
above by the green star.
Legal Property
Description: Lot 1 of Map 16150, City of Chula Vista. The property was previously
known as Lot 9 of Map 15942 prior to the current map. These two
lots are generally contiguous.
Thomas Guide: San Diego 1331 F&G - 2
Property Owner: Shea Homes LP as to Units 1-40, 43, 51-60, 71-100, 107-144, 170,
172, 175 and 176 on Lot 1 of Map 16150; Individuals as to Units 41-
42, 44-50, 61-70, 101-106, 145-169, 171 and 173-174 on Lot 1 of
Map 16150.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 51
Assessors
Parcel Nos.: 643-063-07-01 thru 92; 643-063-08-01 thru 84. .
Property Taxes: The San Diego County Assessor’s Office does not have information
available for each APN as they are too new. We have pulled up tax
information on the underlying APN which is 643-063-01-00. Per the
San Diego County Assessor’s Office, the Assessed value for APN
643-060-64 is $10,557,000 and the 2017/18 property taxes are
$255,339.38. The total property tax invoice includes $109,266.01 for
the basic levy, $15,822.80 for voter approved bonds and fixed
charged assessments of $130,250.57 which includes Chula Vista
Elementary School CFD in the amount of $46,335.76, Sweetwater
High School CFD in the amount of $81,276.18, City of Chula Vista
CFD 14M in the amount of $2,141.60 and City of Chula Vista CFD
97-2 in the amount of $278.10 and $218.92 in miscellaneous
charges.
It should be noted that the subject CFD 16-I is not yet listed or
included in the 2017/18 property tax bill. Per the Rate and Method
of Apportionment of CFD 16-I the estimated assigned special tax for
Lot 1 of Map 16150 (located within Zone A) between $1,352 and
$1,799 per unit per year based on the house square footage.
Three-Year
Sales History: Shea Homes Limited Partnership purchased the lands in December
2016 from SLF IV Millenia LLC, the master developer, for
$10,350,000. Fifty-three homes have closed to individual
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 52
homeowners.
Size and Shape: Per Lot 1 of Map 16150 the subject site is irregular in shape and
totals 10.26 acres with entitlements for 176 units.
Zoning: The subject property is designated Eastern Urban Center (Millenia)
per the current City of Chula Vista Zoning Map. Per the Otay Ranch
Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan,
Lot 9 of Tract 19542 is shown as a portion of the Southeastern
Neighborhood District.
The Southeastern Neighborhood District covers Lots 8 and 13 of
Map 16081 along with Lot 9 of Map 15942 (subject – generally
contiguous to Lot 1 of 16150),and allows for a low of 200 dwelling
units and a high of 450 dwelling units with a target of 200 dwelling
units. In addition, the Southeastern Neighborhood District allows for
a low of 2,000 square feet of commercial space, a high of 200,000
square feet of commercial space and a target of 150,000 square feet
of commercial space
Entitlements: The subject property is encompassed by Chula Vista Tract No. 09-
03 (Otay Ranch Millenia Eastern Urban Center) with further mapping
under Map No. 15942 which is known as Otay Ranch Millenia. A
copy of the Map is located in the Addenda. Map 15942 subdivides
a portion of Millenia about seven buildable lots and some larger lots
which were further subdivided by Tract Map 16081. Lot 1 of Map
16150 was then recorded on Lot 9 of Map 15942 on November 30,
2016 creating the usable pad for 176 proposed condominium units.
In addition, two condominium plans were recorded. Document 2017-
0290503 recorded June 27, 2017 allowing for 70 units known as
Element which are numbered lots 107-176. Document 2017-
0288526 recorded June 26, 2017 allowing for 106 units known as Z
which are numbered lots 1-106.
Topography: The subject property has been mass graded into a generally level
superpad with surrounding streets on the north and east (Strata
Street and Eastlake Parkway) in place. The entire Orion Avenue
along the west boundary is not yet paved. The superpad is above
street level of Eastlake Parkway and the southern portion of Orion
Avenue with landscaped berms along the slopes. Shea Homes
further graded the property adding finished pads for their proposed
homes. Drainage is proposed within an in-street storm drain system.
Soils Condition: The subject parcel was covered in the Soils Report that was
discussed under the previous property description section.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 53
It is an assumption of this report that the soils are adequate to
support the highest and best use conclusion and that all
recommendations made relating to soil conditions within the reports
were adhered to during construction. This is evidenced by City
inspectors on site throughout construction as well as Certificates of
Occupancy permits being obtained within the Millenia project.
Seismic
Information: Per the California Department of Conservation, the subject property
is not located within an Alquist Priolo Earthquake Study Zone.
Environmental
Concerns: The subject parcel was covered in the Phase I Site Assessment
discussed under the previous property description section.
It is an assumption of this report that the subject property is free and
clear of any environmental issues which would slow or thwart
development of the site and that all recommendations contained in
the FEIR were adhered to. This is suggested by City inspectors on-
site during construction.
Flood Information: Per the City of Chula Vista Website, the subject property is not
located within a FEMA Flood Zone.
Easements and
Encumbrances: We have reviewed a Preliminary Title Report prepared by First
American Title covering Millenia Lot 9 of Map 15942 (generally
contiguous with Lot 1 of Map 16150) which refers to the subject
property. The report is dated November 16, 2017 (prior to any home
closings). The exceptions are as follows:
Item Nos. 1 thru 7 refer to property taxes including CVESD CFD 18,
CFD No. 18 (Sweetwater), and CFD 16-I. Item No. 7 (a, b and c)
refer to an agreement in connection with the approval for the General
Plan Amendment recorded in 1993. Item No. 8 pertains to a
recorded Development Agreement recorded in 2009. Item No. 9
pertains to a Parks Agreement. Item No. 10 and 10a refer to
Resolution No. 2009-224 an Amended and Restated Interim
Desilation and Maintenance Agreement. Item No. 12 and 13 refer to
the subdivision improvement agreement. Item No. 14 pertains to CC
& Rs on the property. Item No. 15 is in regards to a grant of
easements, license and maintenance agreement. Item Nos. 15a, 17,
22a and 22e refer to easements. Item Nos. 16 and 25 refer to CC &
Rs. Item Nos. 18 and 19 are in regards to an option and a right of
first refusal on the property. Item No. 20 is for a Maintenance
Agreement for Interim Drainage Improvements. Item Nos. 21, 22b,
22c, pertain to the Subdivision Improvement Agreement. Item Nos.
22d and 23 pertain to Storm Water Management Agreements. Item
No. 24 refers to the Condominium Plan for Z@ Millenia. Item Nos.
26 and 27 refer to the Condominium Plan for Element @ Millenia and
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 54
the supplemental declaration of Covenants and Restrictions and
Agreement Establishing Dispute Resolution Procedures for Element
& Z. Item No. 28 pertains to water rights and Item No. 29 refers to
the rights of parties in possession. Item 30 refers to items the title
company will need from Shea Homes before issuing title insurance.
It is an assumption of this appraisal report that the subject lands are
free and clear of any liens and/or encumbrances other than CFD 16-
I IA 1 and the aforementioned existing CFDs. The appraisers are not
title experts and it is recommended that any concerns relating to title
should be addressed to the appropriate experts.
Utilities: All normal utilities serve or will serve the subject property by the
following companies:
Electrical: San Diego Gas & Electric Company
Natural Gas: San Diego Gas & Electric Company
Sewer: City of Chula Vista
Water: Otay Water District
Schools: Chula Vista Elementary School District
Sweetwater Union High School District
Streets/Access: Access to Millenia is via SR 125, exit Birch Road and east to the
subject property. SR 125 is accessible via I-5 or I-805 east on SR
54. Millenia is bounded by SR 125 on the west, Birch Road on the
north and Eastlake Parkway on the east.
Access to the subject parcel is via Birch Road to Eastlake Parkway,
south to Strata Street and west to the subject entrance.
Current Condition: Element and Z are currently being marketed. Element consists of 70
proposed single family detached condos while Z consists of 106
proposed attached homes. Below is an aerial photo of Lot 1 of Mapt
16150 highlighted in yellow (boundaries approximate) showing the
current status of the lands.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 55
Combining Z & Element there are 53 homes which have closed to
homeowners, six models, seven production homes over 95 percent
complete, 27 units under construction and 83 remaining finished lots.
Costs to Complete: We have reviewed the land development costs prepared by Shea
Homes and/or its consultants. The total project costs along with the
spent to date amounts are shown on the table below.
Total Costs Actuals Thru
1/31/18
Grading $474,866 $464,912
Wet Utilities $1,461,664 $1,447,179
Dry Utilities $789,756 $733,844
Streets (Curb/Gutter/Storm Drain/etc) $2,296,321 $885,446
Plan Check & Inspec. $928,895 $928,895
Engineering/Soils $1,697,193 $1,115,518
Development Fees $7,528,195 $2,762,659
Total $15,176,890 $8,338,453
According to the above information, in order to develop the subject
property into a true finished lot condition, an additional $2,072,901 in
land development costs needs to be spent. In addition, there are an
estimated $4,765,536 in land development fees. These amount will
be taken into account in the valuation section for the Shea Homes
owned property later within this report.
HOA: The Element Homeowner’s Association dues are estimated at $210
per month while the Z homeowners will pay $327 per month. The
HOA covers landscaping in common areas, tot lot, dog park, trails,
pool and jacuzzi, BBQ area, restrooms and shower with exterior
insurance for all Z buildings included. In addition there is a master
developer HOA of $45 per month per residence.
Improvement
Description: Shea Homes is developing two products within Lot 1 of Map 16150.
The first product is known as Element, cluster detached units while
the second product is known as Z and are attached homes. Both
products are three-story with a two-car attached garage. Plans vary
with some living space on the bottom floor within Element and a patio
and entry on the bottom floor along with the garage for Z. The homes
are built for modern families with open living spaces and decks and
patios. Exteriors are stucco finish with some decorative stone or
wood siding and automatic garage doors. Interiors include a walk-in
closet in the master bedroom, laundry hook-ups on the second or
third floor, tankless water heaters and energy efficient appliances
throughout.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 56
There are four plans within Element and three plans within Z. The
below chart shows the various plan sizes.
Plan
Room
Count
Floors/
Parking
Sq.
Ft.
Ind.
Owned
Bldr.
Owned
Z-1 2 / 2.5 3 / 2 1,288 3 1
Z-2 3 / 2.5 3 / 2 1,430 10 2*
Z-3 3 / 2.5 3 / 2 1,475 12 2*
E-1 3 / 2.5 3 / 2 1,775 8 1*
E-2 3 / 3.5 3 / 2 1,915 6 3*
E-3 4 / 3.5 3 / 2 2,157 7 2*
E-4 4 / 3.5 3 / 2 2,248 7 2*
Total 53 13
*One of each of these homes is a model home. Plan 1 of Z is not modeled.. One
each of the Builder-Owned Plan E2 and E3 are within the model complex, however
are production homes and not fully upgraded like a model home.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 57
SAN DIEGO COUNTY HOUSING AND OFFICE MARKETS
In reviewing the County’s housing and office market, a study of population and
economic growth needs to be conducted. As of January 1, 2017, the County had
a population of 3,316,192, which indicates an average annual growth rate of 0.9
percent over the past year and an average rate of 0.97 percent over the past 15
years. It should be noted this includes the slowdown during the Great Recession.
Projections are for the County to continue at an annual 1.2 percent growth rate for
the next three years.
Over the past twenty years the County has seen a rocky cycle in the housing market as
with most of Southern California. The recession of the early 1990s impacted San Diego
County; however, the recovery was quicker than inland areas due to the coastal influence.
Median housing prices (all types) in the County increased over 100 percent (from
$250,000 in 1997 to $600,000 in November 2005) then decreased over 50 percent to the
July 2009 low of $290,000. Since bottoming out the market has seen an increase of 77
percent to the current median home price of $605,000 (per the California Department of
Real Estate as of December 2017), which has now surpassed the previous peak.
Economic growth in the San Diego area had been strong between 2000 and 2007 with
job losses occurring during the Great Recession in 2008 through 2010 with an upturn
beginning in 2011. Below is a table depicting job growth in the County over this time
period.
USSan Diego Job Growth
UYear UEmployment UIncrease U% Increase
2017 1,525,400 27,400 1.82%
2016 1,498,000 12,100 0.81&
2015 1,485,900 22,700 1.55%
2015 1,463,200 16,100 1.11%
2014 1,447,100 21,300 1.49%
2013 1,425,800 22,200 1.58%
2012 1,403,600 34,900 2.55%
2011 1,368,700 15,600 1.15%
2010 1,353,100 (55,200) (3.92%)
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2009 1,408,300 (44,500) (3.06%)
2008 1,452,800 6,500 0.45%
2007 1,446,300 9,500 0.66%
2006 1,436,800 11,100 0.78%
2005 1,425,700 16,800 1.19%
2004 1,408,900 26,600 1.92%
2003 1,382,300 13,100 0.96%
2002 1,369,200 19,700 1.46%
2001 1,349,500 26,300 1.99%
2000 1,323,200 N/A N/A
*Based on Preliminary December 2017 numbers per EDD
The unemployment rate for the County was 3.3 percent in December 2017, well below
the high of 11 percent in early 2010 and lower than the current California unemployment
rate of 4.2 percent.
The housing market was a significant factor in increasing the impact of the Great
Recession. Due to increased interest rates and rising home prices between June 2004
and mid-2006, the mortgage lender reaction was to create non-conventional financing
alternatives such as sub-prime and non-conventional mortgages to artificially maintain
the boom housing market of 2004 and 2005. In 2007 the housing market saw a shake-
up due to the problems in the sub-prime and non-conventional mortgage markets. In
March 2007 the Federal Government initiated efforts to stop or limit sub-prime mortgages.
Unfortunately, the damage had already been done with sub-prime mortgages playing a
role in the 2008 shake out of the housing market and contributing significantly to the U.S.
economic downturn. Due to stricter income verification on new loans and the lack of
available credit, coupled with job losses and declining home prices, sales of both new
and existing homes slowed for the next few years. With the exception of a small increase
in 2010, primarily due to government offered homebuyer credits, prices/sales essentially
remained flat until mid-2012 when prices began a steady climb with double-digit increases
into 2013 and a slower appreciation since that time. Over the past year overall home
prices in Chula Vista have increased an average of 6.5 percent on a year over year basis.
There were several factors aiding the recent price appreciation which include limited
supply and constrained lending. The main factor in prices rising is an imbalance in supply
and demand. Near the bottom of this past real estate cycle it was not financially feasible
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to develop land and build a house in portions of San Diego County. Thus, land
development slowed, significantly restricting new housing supply. In addition to limited
supply, home ownership across the U.S. declined to 64.2 percent (Fourth Quarter 2017)
from a high of 69.2 percent in 2004. This downward trend in home ownership was
anticipated to continue to decrease until stabilization which is estimated to occur at 63
percent. It appears the downward trend of home ownership may be stabilizing as home
ownership was 62.9 percent in 2nd quarter 2016.
The December 2017 approval of the Tax Cuts and Job Act (“TCJA”) by the Federal
Government is causing concern that home sales may slow once again. The two largest
changes for home owners is the limitation at $10,000 for the deduction for state income,
sales taxes and property taxes (SALT) along with a limitation on the mortgage deduction
for loans that exceed $750,000. While this amount does not affect most people looking
at subject-type homes (generally in the $380,000 to 600,000 range), the SALT deduction
may limit their deductions. It is still too early to tell how much the TCJA will actually affect
the new home market, however it is thought that it won’t affect the inland Chula Vista
market as much as some other coastal cities where mortgages are generally larger due
to higher home costs and therefore may be affected.
Home loan mortgage rates are a large factor in the housing market. The Federal Reserve
had held mortgage rates at all-time lows for several years in an attempt to assist the
housing market. Low rates appeared to help for quite a while; however, first time buyers
are now having an extremely hard time entering the housing market. The Federal
Reserve Board (“Board”) has kept interest rates below historical averages dropping rates
to zero in December 2008 until the December 2015 Board meeting when interest rates
were raised one quarter of a percent. Future rate hikes are anticipated to be gradual and
will depend on how the U.S. economy and global growth is occurring. In March, June,
and December of 2017, the Board increased its benchmark interest rate one quarter point.
This signifies the possibility for robust growth nationally. Unlike the 2008 to 2015
decisions to maintain the rates at zero, regular hikes are anticipated for the foreseeable
future. The current quoted rates for a 30-year fixed mortgage per FRED (Federal Reserve
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Economic Data) as of December 21, 2017 are 3.94 percent. This is up from an average
of 3.65 percent over 2016, possibly due to the 2017 increases which occurred, plus the
Board suggesting additional future increases.
Chula Vista is benefiting from the new FHA loan limits. FHA financing allows a three
percent down payment which allows first time homebuyers to enter the housing market.
In order to qualify for FHA loans, a mortgage needs to be within the published FHA loan
limits which is currently $649,750 in San Diego County, up from the 2017 amount of
$612,950. While in some coastal areas in San Diego County this severely limits new home
financing, the new homes in Millenia are generally under the approximate $670,000
purchase price limit for FHA financing.
Residential Land Development
While there had been little land development going on in most of San Diego County during
the years 2008-2011, the second half of 2012 saw a resurgence. This was clearly visible
in Otay Ranch. The increase in housing prices coupled with the limited availability of
supply, made land development feasible once again for homebuilders. San Diego and
Otay Ranch saw land development in 2012 and 2013 with a bit of a lull in 2014, then
beginning again in 2015 with Otay Ranch Village Two selling homes and in 2016 and
2017 with Millennia and Otay Ranch Village Three selling homes.
Otay Ranch has three areas currently developing, Millennia (subject property) at the
southeast corner of Birch Road and SR 125, the southern portion of Otay Ranch Village
Two (Montecito) which is nearing build-out and Village Three, located about two miles
west of Millenia. Village Two was developed in two main phases with the northern portion
generally built out and sold in 2015/16 while the southern portion has several new home
projects currently offered for sale. The northern portion of Village Two also houses a new
Elementary School while Village Three has a proposed school on site. Otay Ranch Village
Three began grading in 2016 and is now offering nine new home projects.
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Home Sales and Pricing
The housing market in San Diego County appears to be on the upswing of a cycle. Per
the Case-Shiller index, San Diego has seen either flatness or increases in home values
for the past 72 months. Below is a chart showing median home prices in the County
including both new and existing homes (both detached and attached) over the past
decade. With the current median home price at $540,000 (per Corelogic as of December
2017), the increases are continuing.
It should be noted that the above home prices relate to overall home prices including
existing homes. Our search for comparable new home projects within Chula Vista
resulted in eight new home projects currently selling in Otay Ranch Village Two, nine
additional new home projects selling in Otay Ranch Village Three and six currently selling
in Millennia. All projects are experiencing good sales rates.
According to CoreLogic, within Southern California (Los Angeles, Riverside, San Diego,
Ventura, San Bernardino and Orange counties) the median price paid for a home (both
new and existing) in December 2017 was $507,500, up 8.2 percent from one-year prior.
The current median existing home price has recently surpassed the peak in mid-2007
when the median price was $505,000 and up more than 100 percent from the low point
of the cycle which was a $247,000 median price in April 2009. Home sales in Southern
California were down 3.8 percent overall in Southern California in December 2017 based
on a year-over-year change. Per CoreLogic the drop off in activity is due to the
370 420
550 600 580 580
420
330 355 324 335
400 445 498 525 540
0
100
200
300
400
500
600
700
20022003 2004 2005 200620072008 2009 2010 201120122013 2014 2015 20162017Home Price In $000'sYear
San Diego County Median Home Prices
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constrained supply of homes for sale. Shown below is a table comparing December 2016
to December 2017 for both new and existing home sales and pricing in Southern
California by county and for Southern California as a whole.
Southern California (New and Used) Home Sales
County
No. Sold
Dec 16
No. Sold
Dec 17
Percent
Change
Median
Dec 16
Median
Dec 17
Percent
Change
Los Angeles 6,885 6,597 -4.2% $520,000 $570,000 9.6%
Orange 3,230 3,048 -5.6% $667,500 $698,000 4.6%
Riverside 3,605 3,438 -4.6% $345,000 $365,000 5.8%
San Bernardino 2,462 2,532 2.8% $299,000 $323,000 8.0%
San Diego 3,448 3,390 -1.7% $495,000 $540,000 9.1%
Ventura 904 740 -18.1% $519,000 $559,000 7.7%
SoCal 20,534 19,745 -3.8% $469,000 $507,500 8.2%
Source: CoreLogic December 2017 Data Brief
Based on December 2017 median new and existing homes prices, in comparison to the
majority of the surrounding counties, San Diego County is higher than the Inland Empire
and lower than Ventura, Orange and Los Angeles Counties with a median home price of
$540,000 reflecting a 9.1 percent year over year increase.
In a separate attempt to capture the increase in home prices, the resale activity of existing
homes in the subject area (per CoreLogic) has been reviewed. The number of sales and
sale prices of existing homes within zip codes in the immediate area of the subject are
shown in the table shown below.
Community
Name
ZIP
Code
Border
To
Subject
Sales of
SFD
Homes
Dec
2017
Dec 2017
Price
Median
SFD
Dec 2017
Median
Price/
Sq. Ft.
Price %
Change
from Dec
2016
Otay Ranch West 91913 Subject 30 $572,000 $261 5.5%
Northeastern Chula Vista 91914 North 11 $675,000 $265 -7.2%
Northwest Chula Vista 91910 Northwest 23 $550,000 $291 14.8%
Southwest Chula Vista 91911 Southwest 25 $486,000 $307 11.7%
South – Otay Mesa 92154 South 24 $505,000 $282 16.4%
Otay Ranch East 91915 East 19 $620,000 $267 11.7%
Source: CoreLogic July 2017
The table above depicts price changes over the past year on existing single-family
detached home sales prices. The above price increases relate to CoreLogic’s overall San
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Diego County increase of 9.1 percent increase year over year suggesting the subject area
is having higher price increases than other areas of San Diego County.
According to London Moeder Advisors (December 17, 2017) there is a tsunami of demand
now rising from young families for homes in San Diego County. They propose that, in the
County, 17,000 housing units need to be built per year for the next 10 years in order to
meet that demand. In 2015 and 2016 approximately 10,000 units were built each year
with the previous six years ranging between 2,500 and 7,500 units creating a shortage of
over 40,000 units. Another problem which occurred is that most of the units built in the
current cycle have been multi-family rental units. London Moeder advises that two to
three level townhomes, rowhomes and granny flats are what is needed for the current
shortage. This is what is being built in Millenia, which is enjoying good sales and
absorption rates.
Commercial Market
In reviewing the County’s commercial market, a study of housing growth, vacancy rates
and competition needs to be conducted. As discussed above the County population is
growing and housing growth is gaining strength in the South Bay area which includes
Chula Vista. We have reviewed several studies prepared by commercial brokers in the
area in regards to San Diego’s commercial real estate market including CBRE and
Meyers Group.
CBRE reports that the San Diego unemployment fell to 3.3% in Q4, 2017 and office rents
fell slightly by -$0.01 quarter over quarter but increased by 2.3% year over year. Average
asking rent was $2.79 per square foot county wide with an average rate of $2.52 in the
subject, South San Diego market. CBRE defines the South San Diego market as the area
south and southeast of the downtown market southerly of State Route 54. Average asking
rent was $2.61 per square foot in downtown San Diego. Central San Diego County had
the highest average asking rent of $2.99 per square foot. Central San Diego includes
many of the newer office locations along the interstate 5 and Interstate 805 corridors
including the Sorrento Valley area.
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San Diego’s office market has experienced a wide fluctuation in vacancy over the past 18
years. In 2000 county-wide vacancy was only 5.4% with 2009 showing the highest
vacancy rate at 19.2%, decreasing just about every year to 2016 at 10.7%. Current
vacancy increased slightly to 11.3% but has remained below 12% for five quarters. South
San Diego reports total vacancy at 11.9% including sub-lease space. Net absorption in
the last quarter of 2017 was down slightly by 154,006 square feet but up by 482,241
square feet year over year. The subject South San Diego market had positive absorption
of 12,487 square feet according to CBRE.
In addition to reviewing CBRE statistics we have also reviewed the draft marketing study
completed by Meyers Research on the Millenia community. Meyers indicates that “market
conditions are tight for office space in San Diego County and the South Bay.” They project
average rent levels below what is projected by CBRE at a high of $2.23 in the South Bay
area. They report vacancy rates decreasing from 9.1% in Q1 of 2014 down to 5.0% in
late 2017. This is a very low vacancy rate and not reflected in the CBRE statistics.
However, similar to CBRE, they indicate that 2016 was a particularly strong year with
245,000 square feet absorbed versus no new deliveries.
Meyers Research projects an average of 85,564 square feet of annual office absorption
for the subject office projects to fully absorb 1.018 million square feet by the year 2028.
They project the initial phase to be absorbed in roughly four years. The Meyers Research
projections are based on analyses completed by CalTrans on office-oriented employment
growth and also projections of job growth from Woods and Poole Economics. They project
absorption of office space will accelerate at the subject location as this area of Chula Vista
continues to grow.
In summary, although both San Diego County and the subject submarket saw decreases
in housing prices and sales during the recession, prices have now been increasing over
the past 72 months with substantial appreciation over this time period. While home price
growth has slowed in the past three years, prices are still increasing, however at a more
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normal rate of appreciation. The economy appears to be on an upswing and the subject
submarket is attracting homebuyers, builders and land developers. In 2014 the land
developers increased density within Otay Ranch Village Two in answer to the higher
demand for lower priced starter homes. Millenia is being built out with higher density,
small lot and attached units in order to meet buyer demand. There are currently 25 new
home neighborhoods in Otay Ranch with average to good absorption. Office development
has been minimal in Otay Ranch. Millenia is proposing the first office campus in the
immediate area. While the need appears positive, absorption of the projected
development in the entire community of Millenia (the subject and additional lands) is
estimated at over 20 years. In conclusion, although uncertainty is still clouding the current
economy, the housing market in South San Diego County appears to be a growing at a
sustainable rate. Population is predicted to continue to increase, thus housing growth will
continue.
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HIGHEST AND BEST USE ANALYSIS
The highest and best use is a basic concept in real estate valuation due to the fact that it
represents the underlying premise (i.e., land use) upon which the estimate of value is
based. In this report, the highest and best use is defined as:
"the reasonably probable and legal use of vacant land or an improved
property, which is physically possible, appropriately supported, financially
feasible, and that results in the highest value”5
Proper application of this analysis requires the subject properties to first be considered
“As If Vacant” in order to identify the “ideal” improvements in terms of use, size and timing
of development. The existing improvements (if any) are then compared to the “ideal”
improvements to determine if the use should be continued, altered or demolished
preparatory to redevelopment of the site with a more productive or ideal use.
“As If Vacant”
In the following analysis, we have considered the site’s probable uses, or those uses
which are physically possible; the legality of use, or those uses which are allowed by
zoning or deed restrictions; the financially feasible uses, or those uses which generate a
positive return on investment; and the maximally productive uses, or those probable
permissible uses which combine to give the owner of the land the highest net return on
value in the foreseeable future.
Physically Possible Uses
Millenia has the physical characteristics suitable for a master-planned community. The
site’s topography is generally level, adjacent to SR 125 (to the west) and the successful
Otay Ranch Town Center (to the north). The property was previously used for agriculture
use as row crops.
CFD No. 16-I IA 1 consists of six parcels ranging in size from 3 to 10 acres which are
being developed into 393 single family homes and two commercial sites proposed for
5 The Appraisal of Real Estate, 11th Edition
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over 1,000,000 square feet of office use. The six parcels have all been mass graded and
are generally level with the majority of surrounding streets in place. Three of the
residential sites have been further graded for residential lots and pads. We have reviewed
Geotechnical Reports which cover the subject property and it appears soil conditions are
satisfactory for development. This is further suggested by development on some of the
lands. We have reviewed a Phase One Environmental Site Assessment on the subject
property which concludes that the property is feasible to develop from an environmental
standpoint. It is an assumption of this report that the soils are adequate to support the
highest and best use conclusion, that any environmental concerns have been mitigated
as recommended by technical reports, and that there are no environmental issues which
would slow or thwart development of the site. This is evidenced by City approvals along
with City inspectors on site during construction.
An engineered drainage system is being designed into a street drainage system to
alleviate any potential flooding problems and to control project water runoff. All standard
utilities serve or are available to serve the subject property. The site has good access
from SR 125 and Birch Road.
Based on the physical analysis, the size, access and topography make the subject
property physically suited for numerous types of development; however, the grading and
development that has occurred on each parcel suggests residential use or a use
consistent with the surrounding master-planned community.
Legality of Use
The subject property is located in the master planned community of Millenia (formerly
known as a portion of the Eastern Urban Center “EUC”), in Otay Ranch in the City of
Chula Vista, County of San Diego. Pursuant to the EUC Sectional Planning Area Plan,
the subject six parcels are a portion of the entire 206+ acre property which has approvals
for about 3,000 residential units, 25 acres of parks, 12 acres of Community Purpose
Facility, 35 acres of schools, 76 acres of commercial land use, 1.5 acres of open space
and 8 acres for cultural use. The subject six parcels have been approved for 393
residential units on four parcels and up to 1,030,200 square feet of office use on two
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parcels. Map 09-03 recorded on all of Millenia with further mapping of Maps 15942,
16081 and 16150 covering the subject six parcels. Based on the legality of use analysis,
the type of development for which the subject property can be utilized is narrowed to
residential and commercial land uses. This is consistent with the findings of the physically
possible uses.
Feasibility of Development
The third and fourth considerations in the highest and best use analysis are economic in
nature, i.e., the use that can be expected to be most profitable. First residential land use
will be discussed followed by a discussion on commercial land use. As discussed under
the San Diego County Housing and Office Market section earlier within this report, the
San Diego market has showed good price increases and good absorption.
According to the Market Absorption Study for CFD No. 16-I, IA 1 by Meyers Research,
dated February 2018, there is good demand for ownership housing options, particularly
to family households and empty nester/retirees. New home sales have increased and
are anticipated to continue to do so although they are still below historical averages.
Population growth is still occurring in the area and will continue to create the need for
housing. Most importantly job growth, the primary driver of growth in the new home
market, is still occurring both in San Diego County as well as the more local employment
center in Chula Vista and the City of San Diego. County-wide unemployment is reported
at 3.3%.
There are currently six active, new home communities within Millenia with sales beginning
in late 2016 and 84 units within CFD No. 16-I IA 1 sold. Generally home prices within the
community range from $300,000 to $700,000. Since opening, average sales rates have
ranged from about 1.8 to 3.8 sales per project per month with sales increasing more
recently. All of the open neighborhoods have been well received in the marketplace.
Sales have increased in 2017 suggesting absorption may increase.
Meyers Research projects an average 85,564 square feet of office space will be absorbed
per year suggesting the initial phase of development of 324,100 square feet will be
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absorbed in three to four years. This suggests the second phase will be needed prior to
that time.
Based on the above analysis, the highest and best use for the subject property appears
to be for both residential and commercial development.
Maximum Productivity
The current housing market has stabilized and is forecasted to improve in both sales
prices and pace of sales. Job growth is relatively strong with unemployment at a rate
comparable to prior to the Great Recession. While home sales are still below historic
rates, prices are rising. High prices, limited financing choices and limited credit availability
are making it hard for first time buyers to enter the housing market. However the limited
availability of homes for sale, population growth and low interest rates all point to demand
for new housing in the subject area with upward pressure still being placed on prices.
Based on the current active projects in the area, coupled with population growth projected
in the subject marketplace, it is our opinion that the subject property is feasible for
residential and commercial development.
Highest and Best Use Conclusion – “As If Vacant”
The final determinant of highest and best use, as vacant, is the interaction of the
previously discussed factors (i.e., physical, legal, financial feasibility and maximum
productivity considerations). Based upon the foregoing analysis, it is our opinion that the
highest and best use for the subject property “As if Vacant” is for residential
neighborhoods at the correct price points and commercial land use.
Highest and Best Use – “As Improved”
As earlier detailed, the subject property consists of four residential neighborhoods, two
that are currently being marketed with model homes open. Shea Homes opened its
Element and Z products for sale in December 2016. They have sold 84 homes suggesting
an absorption rate of 6.46 homes per month for the combined projects. KB Home opened
for sale in December 2017 and has sold three suggesting a sales rate of about 2.0 units
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per month. Both absorption rates are considered to be good sales rate for homes in the
South County market. Our search of the local MLS revealed there are no current listings
and no re-sales within the subject property. The homes appear in excellent condition with
no physical depreciation of structures visually apparent. The sales rates within the subject
and competitive projects in the immediate area suggests there is demand for new homes
in the market at the right price points with current financing rates. This is confirmed by
the Meyers Research absorption study. All of the homes are of good design and appear
to be of good quality workmanship. Based on the subject neighborhood’s sales rates, it
is our conclusion that the highest and best use for the subject property is for the continued
use, as improved.
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VALUATION ANALYSES AND CONCLUSIONS
The Sales Comparison Approach will be the primary approach used to value the subject
property. This approach compares similar properties that have recently sold or are in
escrow to the subject parcels. In determining the value for the property, a unit of
comparison needs to be addressed. For detached single-family lots, the lots are typically
sold on a finished lot basis while for attached product, the lands are typically sold on a
per unit basis with the condition of the land taken into consideration. That is, the sales
price is determined by a finished lot value or a per unit value in a superpad condition, then
the remaining costs to develop the property to a finished lot or superpad condition are
taken into account in the sales price. Therefore, in determining a current market value
for the lands, the current condition of the lots will be considered. The same approach will
be used for the commercial properties which are typically sold in a superpad condition
based on a per square foot price. In the case of the existing home valuations, a single
new-home sale is the unit of comparison. Our search will include all new home projects
within Otay Ranch to find comparable new homes for sale. In determining the value for
each house, a base value will be concluded for each plan which will be considered a
minimum market value as most buyers typically purchase some premiums, upgrades or
options which increase the price of the home.
In the case of the completed (over 95 percent complete) builder-owned models and
production units, the homes will be valued using the Sales Comparison Approach to value
to conclude on a retail value for each plan, followed by a Discounted Cash Flow (“DCF”)
Analysis due to the single ownership for each neighborhood. The DCF will take into
account the fair market value of the completed homes (utilizing the Sales Comparison
Approach), remaining development costs (if any), the marketing and carrying costs
associated with selling off the homes, a profit due to the developer of the homes, and a
discount rate reflecting both the risk associated with selling off the homes along with the
time value of money during the estimated absorption period. In the case of the individually
owned homes, a concluded base value will be used for each plan and a mass appraisal
technique will be used. In determining the concluded base value, new home sales in the
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area will be reviewed and compared with sales of the subject completed homes using
standard methodology and statistical testing. All of the value conclusions will assume
that the improvements funded by the CFD No. 16-I IA 1, Special Tax Bonds are completed
and in place and that the property is subject to the Special Tax Lien.
The valuation will be presented as follows: First, a discussion of the comparable
residential market data will be given. Each of the transactions will be detailed along with
a comparison discussion of their relationship to the subject property based on a per lot or
per unit price. A value conclusion for the residential lands will then be concluded. Next
a discussion of the comparable commercial market data will be given. Again each
transaction will be detailed along with a comparison discussion of their relationship to the
subject property. A value conclusion for commercial land will be concluded. Following
the land value conclusions, a value conclusion for each ownership will be completed. A
summary of the final value conclusions will be reported at the end of this valuation section.
Market Data Discussion and Valuation Analysis of Residential Land
The area surrounding the subject was searched for recent sales in this submarket of San
Diego County as well as other locations considered comparable to the South Bay area.
Eleven transactions summarized in the Addenda that have been found to be most
comparable to the subject property. Six of the sales found are located within the subject
Millenia master planned community. Each transaction is discussed in relationship to the
subject property below.
Land Sale No. 1 refers to a recent purchase of an apartment site within the Millenia master
planned community. The site is located just to the west of the CalAtlantic site and is
currently vacant. The buyer, Trammel Crow, is approaching the completion of another
apartment project within Millenia totaling 309 units (outside of subject area) that is
expected to have move-ins starting this May. This project, to be known as “Esplanade” is
expected to soon start construction of 253 units. This is the most recent residential land
sale within the Millenia community as it closed in December 2017. It sold at a total
purchase price of $9,200,000 which is equivalent to $36,364 per dwelling unit with the
project having an overall density of 30.6 dwelling units per acre. In addition to the
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purchase price, the buyer is to pay a Master Marketing Fee of $379,500 ($1,500 per unit)
to go towards the marketing and advertising of the overall community.
Land Sale No. 2 is the sale/acquisition of one of the subject properties located directly
across from Land Sale No. 1. CalAtlantic is a large, publicly held builder that has recently
merged with Lennar now becoming the largest builder in the country. The land purchase
price at $3,510,000 is equivalent to $45,000 per dwelling unit. This transaction closed in
June, 2017 and has an overall density of 20.9 dwelling units per acre. CalAtlantic had
started in-tract infrastructure work at the time of our inspection and will soon be starting
models for an attached townhome product to be called “Boulevard at Millenia.” Units are
expected to range from 1,681 to 2,046 square feet with prices starting at about $445,000.
In addition to the land purchase price, the buyer will pay to the master developer a Master
Marketing Fee based on 1.5% of sale price of the units, as well as profit participation
depending on the profitability of the project.
Land Sale No. 3 is also the sale/acquisition of one of the subject parcels. It is located
adjacent on the east side of Land Sale No. 2, the CalAtlantic project. KB Home purchased
the site which is proposed for 79 single family detached small lots for $7,265,000 or
$91,962 per dwelling unit. The overall density of this project is 10.9 dwelling units per
acre. The sale closed at the same time as Land Sale No. 2 but the builder, KB Home, has
completed the models and homes are currently offered for sale. The product is known as
“Skylar at Millenia” and is a small lot detached program with two floor plans of 2,602 and
2,659 square feet. Current prices, at time of inspection, range from $596,490 to $630,990.
Similar to Land Sale No. 2 the builder will be paying a Master Marketing Fee of 1.5% of
the sale price of units along with profit participation.
Land Sale No. 4 refers to the March 2017 purchase of a 3.14 acre site located at 1630 S.
Melrose Drive in the City of Vista, about 45 miles north of the subject. Lennar Homes
purchased the site from Warmington Land Associates who optioned the site from the First
Church of Christ Scientist, Carlsbad-Vista, per an agreement dated August 26, 2015.
Warmington mapped the site and initiated both engineering and architectural plans for 47
townhomes (3-story) on the site suggesting a 14.97 dwelling unit per acre density. The
map was ready to record and the engineering and architectural plans were in final plan
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check at time of closing to Lennar. The site has an access easement from Melrose and
has frontage on Live Oak, however the site is above grade of Live Oak. Lennar purchased
the site for $4,300,000 or $91,489 per unit. In comparison to the subject, this site is
considered to be slightly superior in location (Vista median home price of $476,250 versus
Chula Vista median home price of $465,000), while inferior due to condition (existing
church on site needing to be demolished).
Land Sale No. 5 pertains to the purchase of a 6.3 acre parcel located in Oceanside
approximately 50 miles northwest of the subject. City Ventures Homebuilding purchased
the site for $6,405,000 which equates to $110,431 per unit. There are 58 townhomes
proposed for the site suggesting a density of 9.2 dwelling units per acre. The site was
a previously graded superpad with surrounding infrastructure in place, across the street
from an existing motel and gas station and adjacent to a vacant Fresh and Easy Market.
Per a broker knowledgeable with the transaction, the price was based on a $230,000
finished lot. In comparison to the subject property this site is considered to be slightly
superior in location (Oceanside median home price is $474,500 versus Chula Vista’s
median home price of $465,000).
Land Sale No. 6 refers to the sale of 9.43 acres within the Millennia master planned
community, across the street from one of the subject commercial parcels. Trammell Crow
purchased the site on March 3, 2016 for $15,350,000 or $49,676 per unit. This site is
entitled for 309 units for a density of 32.8 dwelling units per acre. It is close to being
completed with move-ins expected starting in May, 2018. This site is directly across Birch
Road from the Otay Ranch Town Center. The project is known as “Alexan”, a luxury
apartment complex. This project also has a master marketing fee based on $1,500 per
unit. In comparison to the subject, this site is higher in density to the subject residential
sites.
Land Sale No. 7 refers to the February 2016 closing on a parcel within Otay Ranch Village
Two. The site is located west of the subject property by approximately two miles. The
5.18 acre site is entitled for 94 multi-family units per the SPA Plan suggesting a density
of 18.15 dwelling units per acre. The property is generally level with frontage along Santa
Carolina Road (turns in to Santa Diana Road just east of this site) which is fully improved
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with utilities in the street. RV Management purchased the site for $4,000,000 which
equates to $42,553 per unit. The property was previously foreclosed on during the
recession. The site is not in a superpad condition but rather in a raw land condition which
is considered to be inferior to the superpad condition. The subject sites have the majority
of all surrounding infrastructure in place, are mass graded with utilities stubbed into the
sites. This transaction has a similar density compared to some of the subject parcels.
Other factors of this transaction are considered to be similar to the subject sites.
Land Sale No. 8 refers to the sale of another subject site. It was delivered in a superpad
condition and is located in Millennia at the northwest corner of Hunte and Eastvale
Parkways. Shea Homes purchased the 10.03 acres from the master developer, SLF IV-
Millennia LLC in December 2015. The site has entitlements for 176 units resulting in an
average density of 17.54 dwelling units per acre. Shea Homes paid $10,350,000 which
equates to a blended price of $58,807 per dwelling unit for the two products. Shea has
completed models and is currently marketing two products on the site; “Element” (larger
product with cluster detached units) and “Z” (smaller product with attached units). At the
time of inspection base prices for “Element” started at $498,000 for detached homes that
range from 1,775 to 2,248 square feet. “Z” is an attached, townhome product that ranges
from 1,288 to 1,475 square feet and base prices starting at $386,000. The site was
purchased in a superpad condition with other factors similar including master marketing
fee and profit participation. It is an older sale having closed over two years prior to date
of value.
Land Sale No. 9 pertains to a sixth residential sale located in Millennia although not one
of the subject properties. Genesis New Homes LLC (dba Meridian Development)
purchased the 12.74 acres from the master developer, SLF IV-Millennia LLC (a related
entity) in June, 2015 for $12,000,000 or $55,300 per unit. The site has entitlements for
217 attached homes. This was the first closing of a for sale product within Millennia.
Typically the first land sale closing is a bit lower than later sales, once the project gets the
momentum of new home sales. The 217 homes suggest an overall density of 17.03
dwelling units per acre. Meridian is currently marketing three projects on the site, Metro,
Trio and Evo with homes ranging in size from 1,300 to 1,950 square feet. This is an older
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land sale and was the first for sale product in Millennia. Similar to the other Millenia
projects the buyer pays a Master Marketing Fee based on 1.5% of product sales price.
Land Sale No. 10 refers to the sale of a small infill parcel located in Chula Vista in May
2015. This site is located along Dorothy Street near the I-5 in an older section of the City.
The buyer, Muraoka Enterprises, Inc. purchased the property without entitlements and is
processing the maps on the property now. The property was zoned for multi-family
residential so the proposed project was allowed with existing zoning. There were old
buildings on the site (a few small rental homes) which will be torn down in order to build
condominiums. The buyer is processing a map for 39 units and a clubhouse on the site.
It was purchased for $2.4 million or $93,600 per unit. The density on the property is 22.03
units per acre. In comparison to the subject property this site is considered to be superior
in location as it is an infill product near the major freeways, however inferior in condition.
It should be noted that per public record the property sold for $1,350,000, however per
both the listing and selling broker and other information obtained on the property, the
sales price was $2.4 million.
Land Sale No. 11 pertains to the sale of the old Marion Catholic High School site located
in San Diego adjacent to the City of Imperial Beach about six miles southwest of Chula
Vista. The site is an infill parcel that was sold to Shea Homes for $16,250,000 in February
2015. The 15.74 acre site is under construction with 175 homes on small lots with a
density of 11.12 dwelling units per acre. The sales price equates to $92,857 per unit.
Shea is currently selling the neighborhood known as “Sea Glass” on the property with
home sizes from 1,662 to 1,999 square feet on small lots with pricing from $439,000 to
$472,000. In comparison to the subject property this sale is considered superior in
location and inferior due to the time elapse since the sale.
The market data and comparisons to the subject are summarized on the following page:
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Data
No.
Acres/ Units
Density
Date of
Sale
Price/Unit
Comparison to Subject
1 8.27 / 253
30.6 12/17
$36,364 Similar, Higher Density
2 3.74 / 78
20.9 6/17
$45,000 Subject Parcel, Recent Sale
3 7.27 / 79
10.9 6/17
$91,962 Subject Parcel, Recent Sale
4 3.14 / 47
14.97 3/17
$91,489
Superior - Location
Inferior – Condition
5 6.3 / 58
9.2 1/17
$110,431 Superior in location
6 9.43 / 300
32.8 3/16
$50,000 Similar, Higher Density
7 5.18 / 94
18.1 2/16
$42,553 Inferior – Condition
8 10.03 / 176
17.54 12/15
$58,807 Subject Parcel, Older Sale
9 12.81 / 217
16.93 6/15
$55,300 Similar, Older Sale
10 1.77 / 39
22.03 5/15
$61,538 Inferior – Condition
11 15.74 / 175
11.1 2/15
$92,857 Superior Location, Older Sale
Three of the land sales summarized include subject parcels. These sales reflect prices
per acre that are consistent with the other Millenia sales as well as other market data
researched.
Without making adjustments, the market data has an overall per unit range from $36,364
to $110,431. This wide range is mainly influenced by density as the various project
densities range from 9.2 to 32.8 dwelling units per acre. Lower density product land
typically sells at higher prices per unit and higher density product generally sells at lower
per unit prices with other factors being equal. Subject parcels range in density from 10.9
to 20.9 dwelling units per acre all within the densities of the comparable market data.
Land Sale Nos. 3 (Subject, KB Home), 5 and 11 are the lower density sales (from 9.2 to
11.1 dwelling units per acre) and sold for between $91,962 and $110,431 per unit, the
three highest sales on a per unit basis. These sales provide the best value indications for
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the lower density, single family detached program known as Skylar being developed by
KB Home.
Land Sale Nos. 4, 7, 8 (Subject, Shea Homes) and 9 have a density range from 14.97 to
18.1, and sold on a per unit basis between $42,553 and $91,489. In our opinion these
sales best represent the land value for the Shea Homes project (Data No. 8) which is a
combination of cluster single family detached (Element at Millenia) and townhome (Z at
Millenia) product. This subject site has a merged density of 17.54 dwelling units per acre
which would suggest a per unit value in the mid-range of the sales data between $55,000
and $65,000 per unit, similar to the actual purchase price of $10,350,000 or $58,807 per
unit. This land sale closed in December, 2015 and an adjustment to the upper end of the
range is appropriate reflecting increases in value over the past two years.
Land Sale Nos. 1, 2 (Subject, CalAtlantic), 6 and 10 are the higher density land sales
from the data researched and range from 20.9 to 32.8 units per acre. Sales prices for
these data items range from $36,364 and $61,538 per unit. Data No. 2 ($45,000 per unit)
is the subject property that is being developed by CalAtlantic Homes with a density of
20.9 dwelling units per acre at the lower end of the data densities. Market Data Nos. 7, 8
and 9 have a density from 17.03 and 18.1 dwelling units per acre and range from $42,553
to $58,807 per unity in price. These sales also relate to this subject property. Based on
this comparable data it appears that the purchase price of this subject site represents
market value.
As a secondary review we have looked at the market data on a density basis by inserting
the eleven comparables into a graph and extracting a trend line to suggest the subject
properties value ranges. The chart is shown on the following page.
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Using the above graph suggests the following ranges of value for the subject properties
in a raw land condition.
Lot No.
Builder/Developer
Density
Price Range based on graph
1 Map 16150 Shea Homes 17.62 $60,000 - $80,000 per unit
11 Map 16081 SLF IV-Millenia, LLC 19.54 $50,000 - $70,000 per unit
14 Map 16081 KB Home 10.87 $80,000- $100,000 per unit
17 Map 16081 CalAtlantic Homes 20.86 $50,000 - $70,000 per unit
The sale of the individual subject parcels is a very good indication of market value, in our
opinion, with the comparable market data backing up the value conclusions. Data No. 8
represents the acquisition by Shea Homes over two years ago and suggests an increase
over the purchase price to date of value range due to time.
With the exception of Lot 11 of Map 16081, the subject residential parcels all have had
land development occur. We have reviewed costs to develop proposed attached units
on Lot 11 with finishing costs estimated at $78,600 per unit. Based on the market data,
we have concluded that Lot 11 has a per unit value of $45,000. This suggests the finished
pads would have a value in the $125,000 per unit range.
Lot 17 of Map 16081 refers to the CalAtlantic owned property proposed for 78 attached
homes to be built-out as Boulevard. The site is currently being graded meaning
engineering is complete on the site. The total land development costs are estimated as
$6,371,257 with $233,027 spent to date. This leaves $6,138,230 or $78,695 per lot in
remaining costs. We have concluded that Lot 17 has a per unit value of $50,000. This
suggests the finished pads would have a value in the $130,000 range. While the Lot 17
0
50000
100000
150000
0 5 10 15 20 25 30 35Price/UnitDensity
Price/Unit
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and Lot 11 have similar densities, Lot 17 has engineering complete and has begun
grading suggesting that some of the risk to the builder has been alleviated.
Lot 14 of Map 16081 refers to the KB Home owned property proposed for 79 single family
detached units on small, condominium lots known as Skylar. The site has been graded
and underground utilities are being installed. KB Home has completed two model homes
(valued separately) and six production homes recently began construction. While the six
production homes have begun construction, we will value these as lots rather than give
value to a partially complete improvement. The total land development costs are
estimated at $7,332,343 with $1,654,216 spent to date leaving $5,678,127 or $71,875
per lot in remaining costs. It should be noted that a portion of the costs spent to date are
attributed to the two completed model homes which are valued later within this report.
We have concluded that the Skylar lots have a per lot value of $100,000. This suggests
the finished lots would have a value in the $170,000 range.
Lot 1 of Map 16150 refers to the Shea Homes owned property which is currently being
developed as Element (70 cluster detached units) and Z (106 attached units). Shea has
developed the property into physically finished “lots” (actually a finished pad for a unit to
be built on), with the streets and utilities stubbed to each pad. While the pads are in a
physically finished condition, there are remaining development fees which need to be paid
at certificate of occupancy in order to make them true “finished pads”. The total land
development costs are $15,176,890 with $8,338,453 spent to date leaving $6,838,437 in
remaining costs. This is broken out as $2,072,901 in remaining development costs and
$4,765,536 in remaining fees. We have concluded that the blended price for the Shea
owned pads is $145,000 for the lots in a true finished condition. The concluded values
are shown below.
Lot No.
Builder/Developer
Product
Price/DU
1 Map 16150 Shea Homes Cluster & Attached $145,000
11 Map 16081 SLF IV-Millenia, LLC Attached $45,000
14 Map 16081 KB Home Detached $100,000
17 Map 16081 CalAtlantic Homes Attached $50,000
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Commercial Land Valuation
In addition to revenues generated from residential land uses, there are two commercial
sites located within the subject area of the Millenia master planned community. These
properties along, with proposed development, have been described earlier in this report.
Our search for commercial land sales resulted in eight land transactions consisting of six
sales and two current escrows which have been summarized in the Addenda and are
discussed below.
Land Sale Nos. 1, 2 and 6 refer to three commercially zoned properties located in Millenia
which are planned for a large medical/office campus. Phase I is to be a medical office
project with a proposed total of 324,100 square feet based on marketing information. This
development will be located on Lot 7 of Final Map 16081 (APN: 643-060-57). The site is
one of the subject properties and sold about two years ago at a price equivalent to $8.35
per square foot (Date No. 6). According to the seller, this price was discounted due to the
early close, prior to when development on the site could occur. In addition, the buyer has
paid $350,000 ($1.14 per square foot) for additional grading on the site which included
removing fill dirt for the below-ground floors of a future parking garage. The buyer has
been processing plans through the City on this site. Phase II is proposed to be an office,
life science, high tech campus consisting of four buildings and totaling over 700,000
square feet according to marketing materials. It will be located on Lot 1 of Final Map
16081 (APN: 643-060-51). The property is under contract at a purchase price equivalent
to $8.24 per square foot (Data No. 1). Per the seller this price was negotiated over two
years earlier. In addition to the agreed upon amount, the buyer had expended upwards
of $500,000 ($1.05 per square foot) out of escrow for additional grading on the site
completed by the master developer which included removing fill dirt for the below ground
floors of a future parking garage. Data No. 2 refers to a parcel within Millenia, however
not a subject property but is planned for Phase III of the Millenia Office Campus. This
escrow refers to Lot 19 of Final Map 16081 (APN: 643-060-69). This site is under contract
at a purchase price equivalent to $12.91 per square foot. It should be noted that Data No.
2 includes the possibility of a residential component of 150 units which we believe may
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have affected the sales price. When reviewing the three land sales, which are all being
purchased by LMC-Millenia Investment. Company L.P. (Chesnut Properties) for their
Think, Invent and Discover campuses, the blended price of for the three parcels is $9.69
per square foot. It should be noted that the transactions were all negotiated about two
years ago.
Land Sale Nos. 3 and 5 refer to two additional commercial land sales within Millenia.
Land Sale No. 3 pertains to a retail site (two parcels) that is under construction at this
time. The parcels are located along the south side of Birch Road. MCV23, LLC purchased
the site from SLF-IV – Millenia LLC, the master developer, a related entity to Meridian.
Plans on the site are for 135,000 square feet of retail, services and restaurant space. The
property sold in April 2017 for $5,459,725 which suggests a per square foot amount of
$10.03. The lands were sold in a mass graded condition with surrounding streets in place.
Land Sale No. 5 is the sale of a 2.5 acre parcel located adjacent to Data No. 1 to the
north. Ayres Millenia LP purchased the site and is now under construction with a 135-
room hotel. The site closed in April 2016 for $1,400,000 or $12.83 per square foot. The
site is smaller than Data No. 3 or the subject parcels, which typically commands a higher
price per square foot.
Land Sale No. 4 pertains to the sale of a 15-acre commercial designated parcel located
near the 905 (Otay Mesa) Freeway about five miles southwest of the subject site. The
site was unimproved at time of sale in April 2017 when Blue Merced R 1414 LLC
purchased it from the Roman Catholic Bishop of San Diego for $4,500,000 or for $5.12
per square foot. Raw land is significantly inferior when compared to a superpad within a
development such as Millenia with entitlements in place.
Land Sale Nos. 7 and 8 refer to two land sales within the Village of Eastlake approximately
two and one-half miles northeast of the subject properties. The area is the commercial
section of the Village of Eastlake which includes Eastlake Business Park, several retail
centers along SR 125 and a new development known as the District at Eastlake, a health
and entertainment center. This area has generally been built out over the last 10 years.
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These are two of the three or four final lots within the neighborhood. Land Sale No. 7
sold in May 2015 for $3,300,000 or $19.53 per square foot to a hotel user. There is a
Hampton Inn Suites currently under construction on the 3.88-acre site. Land Sale No. 8
refers to a smaller (1.55-acre) infill site which was purchased for a self-storage site for
$1,800,000 or $16.66 per square foot. Surrounding lands are built-out with the existing
community of Eastlake. In comparison to the subject property these are considered to be
superior due to the build-out of surrounding lands and the minimal amount of land left for
development along with the smaller size in comparison to the subject lands. That is,
typically smaller commercial lots sell on a higher per square foot basis.
The sales are summarized below
Commercial Land Sale Summary
Data
No.
Location
Sale
Date
Size
Acres
Price
Price/
Sq. Ft.
Comments
1 W/S Millenia Ave., S/O
Stylus St., Millenia MPC
Esc. 10.93 $3,923,555 $8.24 “Invent” project
2 W/S Millenia Ave., N/O
Strata St., Millenia MPC
Esc 8.342 $4,623,890 $12.91 “Discover” project
3 SE & SWC Birch Rd. &
Millenia Ave., Millenia MPC
4/17 12.58 $5,459,725 $10.03 Retail site
4 W/S Ocean View Hills; N/O
SR 905, Otay Mesa
4/17 15.68 $3,500,000 $5.12 Raw Comml land
5 W/S Millenia Ave. @
Stylus St., Millenia MPC
4/16 2.505 $1,400,000 $12.83 Ayres Hotel
6 E/S Millenia Ave., S/O
Stylus St., Millenia MPC
2/16 7.062 $2,568,663 $8.35 “Think” project
7 S/S Fenton St. @
Harold Pl., Chula Vista
5/15 3.88 $3,300,000 $19.53 Hotel, adjacent to
business park & retail
8 SEC Fenton St. & Hale Pl,
Chula Vista
4/15 1.55 $1,800,000 $16.66 Multi Tenant Self-storage
The market data has a wide range from $5.12 to $19.53 per square foot. The highest
price refers to a sale in the Eastlake Business area which is reaching build-out. The lowest
price refers to a raw land sale which is significantly inferior in condition to the subject
parcels. Data Nos. 7 and 8 are some of the last sales in the Otay Business area where
the remaining finished sites have asking prices at $30.00 per square foot. In addition to
the land sale data summarized above, we have also investigated six commercial land
sales and listings around Brown Field about four miles to the southwest. Sale prices are
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in the $12.00 per square foot range with asking prices slightly above. In our opinion, this
location is inferior to the subject with land uses generally more industrial in character.
Other land sales were reviewed that are located in northern portions of San Diego County
in the Carlsbad area. These sales range in unit prices from just under $16.00 to $18.00
per square foot. In our opinion these locations are superior to the subject but are good
indications of commercial land values for office locations.
The two subject commercial sites are located on both sides of Millenia Avenue, one of
the main arterial streets through the community and have prominent visibility within the
development as well as from State Route 125 toll road. The commercial sites are
proposed to be medical and high-tech office uses that should enhance the adjacent
properties.
Based on the comparable data and summarized considerations we have estimated the
retail value of the commercial sites at $13.00 per square foot.
SLF-IV Millenia Ownership Valuation
SLF-IV Millenia owns Lot 1 and Lot 11 of Tract 16081. Lot 1 consists of a 10.93 acre
commercial parcel and Lot 11 consists of a 3.07 acre residential parcel entitled for 60
attached dwelling units. As previously discussed under the property description for the
ownership, there are remaining land development costs of $745,000 associated with Lot
1 and $210,000 associated with Lot 11. It is the appraisers’ understanding that these
remaining costs are the responsibility of the master developer, thus they will be included
in the valuation of the master developer owned lands.
As discussed above the commercial parcels have a concluded market value of $13.00
per square foot. Using the Meyers Research absorption tables for office, and assuming
Lot 7 is developed as proposed, it will be leased up in three or four years. This suggests
that Lot 1 will not be developed for approximately three to four years. Using the concluded
current market value of $13.00 per square foot and discounting it for a three to four-year
period at 10 percent per year suggests the parcel’s current market value is $8.88 to $9.77
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per square foot range. We have concluded that the subject Lot 1 has a current market
value of $9.00 per square foot.
Lot 1 Value Conclusion:
10.93 Acres or 476,111 square feet x $9.00 = $4,284,997
Less: Remaining Development Costs (745,000)
Lot 1 Value $3,539,997 (say) $3,540,000
As concluded above, Lot 11 has a current market value of $45,000 per unit with $210,000
in remaining costs associated with Lot 11. The value calculated as follows:
Lot 11 Value Conclusion:
60 units x $45,000 = $2,700,000
Less: Remaining Development Costs (210,000)
Lot 11 Value $2,490,000
Total SLF-IV Millenia Ownership Value Conclusion:
Commercial Parcel (Lot 1) $3,540,000
Residential Lands (Lot 11) $2,490,000
Total SLF-IV Millenia Value $6,030,000
LMC-Millenia Investment Company L.P. Ownership Valuation
LMC-Millenia Investment Company, L.P. owns Lot 7 of Tract 16081. Lot 7 consists of a
7.062-acre commercial parcel. As concluded above the commercial parcels have a
concluded current market value of $13.00 per square foot. The final value calculation for
Lot 7 is as follows:
7.062 Acres or 307,621 square feet x $13.00 = $3,999,073 (say) $4,000,000
CalAtlantic Ownership Valuation
CalAtlantic owns Lot 17 of Tract 16081. Lot 17 consists of a 3.739-acre residential parcel
currently under land development for 78 attached homes. As concluded above Lot 17
has a per lot value of $50,000 per unit. The final value calculation is as follows:
78 units x $50,000 per unit = $3,900,000
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 86
KB Home Ownership Valuation
KB Home owns two model homes and 77 lots which are currently under development.
First the two model homes will be valued followed by the final calculation of the lots.
Retail House Valuation
Due to the single ownership of multiple houses by KB Home, a Discounted Cash Flow
(“DCF”) analysis is needed in order to arrive at a bulk value for the homes. First, a retail
value for each plan will be concluded followed by a DCF for the builder which will take
into account the absorption time to sell off the builder owned houses, the costs associated
with selling off the homes and any remaining costs owed by the builder within each
neighborhood. The resulting revenue will be discounted using an appropriate rate to
determine the builder owned bulk value.
Skylar by KB Home consists of 79 proposed single family detached homes. There are
two completed model homes with the remaining lands under development. In this
analysis we will value each plan within Skylar and then use a discounted cash flow
analysis to conclude at a bulk value for the builder owned homes.
Below is a summary of the floor plans within Skylar. A listing of the improved residential
comparable properties is located in the Addenda of this report.
Skylar by KB Home
Plan
Bd/Ba
Floors/
Parking
Sq. Ft.
Ind.
Owned
Bldr.
Owned
1 4 / 3.5 3 / 2 2,602 0 1*
2 4 / 3.5 3 / 2 2,659 0 1*
Total 0 2
*One of each of these plans is a model home.
The most appropriate new home comparable data for Skylar Plan 1 are shown below.
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 87
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 4 / 3.5 3 / 2 2,602 --
1 4 4 / 3.5 3 / 2 2,248 $261.12
3 2 4 / 3.5 3 / 2 2,659 $230.72
7 3 5 / 3.5 2 / 2 2,438 $241.18
10 2 4 / 3.5 2 / 2 2,788 $234.93
11 3 4 / 3 2 / 2 2,314 $263.61
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data Nos. 7, 10 and 11 are in more conventional neighborhoods
without the urbanization within Millenia. Adjustments were considered (when applicable) for
location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common
area benefits, total square footage, room count, garage space and other amenities. While
there have been three sales within Skylar, we were unable to obtain the information on the
sales prices. As they are not yet closed sales, we are not able to pull from public records.
The new home comparables have a base price range from $230.72 to $263.61 per square
foot. Skylar is a new design of a detached home with a zig-zag site plan. While there have
been no closings within the project, the asking price for Plan 1 is $229.24 per square foot.
It should be noted that most homebuyers purchase some upgrades, premiums and options
and builders typically offer some concessions. Our concluded price is based on the base
price of the home with no upgrades, premiums or options. The two homes appear to be in
excellent condition with no depreciation visible. It has been concluded that Plan 1 has a
base current market value of $225.00 per square foot. This calculates as follows:
2,602 sf x $225.00 = $585,450
The most appropriate new home comparable data for Skylar Plan 2 are shown below.
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 4 / 3.5 3 / 2 2,602 --
1 4 4 / 3.5 3 / 2 2,248 $261.12
3 1 4 / 3.5 3 / 2 2,602 $229.24
7 3 5 / 3.5 2 / 2 2,438 $241.18
10 2 4 / 3.5 2 / 2 2,788 $234.93
11 3 4 / 3 2 / 2 2,314 $263.61
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 88
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data Nos. 7, 10 and 11 are in more conventional neighborhoods
without the urbanization within Millenia. Adjustments were considered (when applicable) for
location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common
area benefits, total square footage, room count, garage space and other amenities. As they
are not yet closed sales, we are not able to pull from public records. The new home
comparables have a base price range from $230.72 to $263.61 per square foot. Skylar is a
new design of a detached home with a zig-zag site plan. While there have been no closings
within the project, the asking price for Plan 2 is $230.72 per square foot. It should be noted
that most homebuyers purchase some upgrades, premiums and options and builders
typically offer some concessions. Our concluded price is based on the base price of the
home with no upgrades, premiums or options. The two homes appear to be in excellent
condition with no depreciation visible. It has been concluded that Plan 2 has a base current
market value of $225.00 per square foot. This calculates as follows:
2,659 sf x $225.00 = $598,275
Builder Owned Retail Value
Within Skylar both builder-owned homes are model homes. Per interviews with builders,
upgrades and landscape/hardscape of up to $100,000 are installed in the model homes,
however, the builders generally consider this a marketing cost and do not anticipate
recovering this investment on a dollar for dollar basis. Based on historical information,
home sizes and fixtures, actual model home sales within the subject area and the current
real estate market, a consideration of a $40,000 premium has been included with each of
the model homes. The retail base value conclusions for the builder-owned homes are
calculated as follows:
Plan 1 (1 x $585,450) $ 585,450
Plan 2 (1 x $598,275) 598,275
Model Upgrades (2 x $40,000) 80,000
Total Skylar $ 1,263,725
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 89
Absorption Period
In order to arrive at an absorption period for the builder owned homes within Skylar, the
absorption rates for the comparable projects have been reviewed. The sales rates within
Millenia range from 1.8 to 3.5 per month. In addition to reviewing actual sales rates, we
have reviewed Meyers Research Market Absorption Study on Skylar which projects a sales
rate in the 2.5 per month range. It is our understanding there were three homes sold
between December 2017 when the project opened and February 1, 2018. We have
concluded that the two model homes will be absorbed over a two-month time period.
Remaining Costs
There are no land development costs associated with the two existing model homes.
Expenses
In determining an expense rate, several builders in the subject area have been interviewed
as to their expenses on selling existing inventory. Expenses include marketing and general
administrative costs. These costs typically range from six to ten percent depending on
varying factors such as absorption period, intensity of marketing, etc. Six percent has been
estimated for marketing expenses and two percent for general and administrative costs for
a total of eight percent in expenses for the subject neighborhoods analyses.
Profit
Several interviews with merchant builders in the area were conducted in order to
determine an appropriate profit percentage for the subject properties. In the early 2000s,
developers typically attempted to achieve a 10 to 12 percent profit based on gross sales
proceeds. During the Great Recession, this range was lowered considerably to six to
eight percent with some builders drastically lowering their profit margins in order to
maintain their work force. As the market improved, so did the profits. This appears to be
occurring once again as prices have increased in the past year. An eight percent profit
is considered appropriate in the analysis for these neighborhoods.
Discount Rate
In selecting a discount rate, the following was completed:
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 90
1. Interviews with merchant builders in the South San Diego market area
2. Review of current market conditions including current market rates as well as yields
reflected in other markets (i.e., municipal bonds, corporate bonds, etc.)
3. The quality, construction, historical sales and product on the subject properties
4. Discussed the project with equity investors and master plan community developers
The homes within Millenia have been well received in the marketplace with average to good
absorption rates. Due to the good sales rates and minimal supply, a ten percent discount
rate is considered appropriate for the subject neighborhoods.
Discounted Cash Flow Summary
The discounted revenue (see DCF Analyses in Addenda) for the builder owned homes
resulted in the value of $1,048,406 (say) $1,050,000.
KB Homes Ownership Final Valuation
KB Home owns two model homes and 77 partially finished lots within Skylar at Millenia
located on Lot 14 of Tract 16081. In the valuation of the residential lands above, the land
improvements to date were considered in the conclusion per lot value of $100,000.
The final value conclusion for the KB Home owned property is shown below.
77 partially finished lots $7,700,000
Two model homes $1,050,000
Total KB Home Ownership Valuation $8,750,000
Shea Homes Ownership Valuation
Shea Homes owns six model homes, seven production homes over 95 percent complete,
27 homes under construction and 83 partially finished lots located on Lot 1 of Map 16150.
The homes are being built out as Element and Z at Millenia with Element being a cluster
product of detached homes and Z being attached homes. First each plan within the
builder owned homes will be valued followed by the final calculation of the lot value in
order to arrive at a Shea Homes Ownership total valuation. Next the concluded value for
each plan will be used to arrive at a minimum market value for the individually owned
homes. That is, typically a homebuyer purchases some upgrades, options or premiums
when purchasing a new home. Our value will be for the base value of the home not taking
into consideration any upgrades, options or premiums.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 91
Retail House Valuation
Element and Z consist of 176 proposed homes, 53 which are individually owned, 13
(including six models) which are over 95 percent complete and owned by the builder (four
in escrow), 27 homes under construction and 83 remaining lots. In this analysis we will
value each plan within Element and Z and then use a discounted cash flow analysis to
conclude at a bulk value for the builder owned homes.
Due to the single ownership of multiple houses by Shea Homes, a Discounted Cash Flow
(“DCF”) analysis is needed in order to arrive at a bulk value for the homes. First, a retail
value for each plan will be concluded followed by a DCF for the builder which will take
into account the absorption time to sell off the builder owned houses, the costs associated
with selling off the homes and any remaining costs owed by the builder within each
neighborhood. The resulting revenue will be discounted using an appropriate rate to
determine the builder owned bulk value. The DCF analyses will be followed by a reporting
of the concluded values for the individually owned homes within each neighborhood using
the concluded base retail value for each plan with a separate check of the analysis
utilizing a mass appraisal technique based on actual sales prices of the homes.
Below is a summary of the floor plans within Element and Z. A listing of the improved
residential comparable properties is located in the Addenda of this report. All of the
improved residential properties are located within Otay Ranch.
Element and Z by Shea Homes
Plan
Bd/Ba
Floors/
Parking
Sq. Ft.
Ind.
Owned
Bldr.
Owned
Z-1 2 / 2.5 3 / 2 1,288 3 1
Z-2 3 / 2.5 3 / 2 1,430 10 2*
Z-3 3 / 2.5 3 / 2 1,475 12 2*
E-1 3 / 2.5 3 / 2 1,775 8 1*
E-2 3 / 3.5 3 / 2 1,915 6 3*
E-3 4 / 3.5 3 / 2 2,157 7 2*
E-4 4 / 3.5 3 / 2 2,248 7 2*
Totals 53 13
*One of each of these plans is a model home.
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 92
The most appropriate new home comparable data for Z Plan 1 are shown on the following
page.
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 2 / 2.5 3 / 2 1,288 --
2 2 3 / 2.5 3 / 2 1,430 $286.01
2 3 3 / 2.5 3 / 2 1,475 $288.81
4 1 2 / 2.5 2 / 2 1,298 $300.46
4 2 3 / 2.5 2 / 2 1,384 $297.68
5 1 3 / 2.5 2 / 2 1,653 $272.83
8 1 3 / 2.5 2 / 2 1,278 $290.30
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data No. 8 is in a more conventional neighborhood without the
urbanization within Millenia. Adjustments were considered (when applicable) for location,
master plan amenities, lot size, stories, sales concessions, CFD taxes, common area
benefits, total square footage, room count, garage space and other amenities. The new
home comparables have a base price range from $272.83 to $300.46 per square foot. Plan
1 within Z has a current base asking price of $299.69 per square foot. There have been
three closings of Plan 1 with sales prices ranging from $283.40 to $304.51 per square foot.
It should be noted that the actual sales prices include upgrades, options and premiums
which were purchased from the builder along with any concessions given by the builder.
Our concluded price is based on the base price of the home with no upgrades, premiums or
options. The homes appear to be in excellent condition with no depreciation visible. It has
been concluded that the Z Plan 1 has a base current market value of $290.00 per square
foot. This calculates as follows:
1,288 sf x $290.00 = $373,520
The most appropriate new home comparable data for Z Plan 2 are shown below.
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 3 / 2.5 3 / 2 1,430 --
2 1 2 / 2.5 3 / 2 1,288 $299.69
2 3 3 / 2.5 3 / 2 1,475 $288.81
4 2 3 / 2.5 2 / 2 1,384 $297.68
4 3 3 / 2.5 2 / 2 1,495 $296.95
5 1 3 / 2.5 2 / 2 1,653 $272.83
8 1 3 / 2.5 2 / 2 1,278 $290.30
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 93
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data No. 8 is in a more conventional neighborhood without the
urbanization within Millenia. Adjustments were considered (when applicable) for location,
master plan amenities, lot size, stories, sales concessions, CFD taxes, common area
benefits, total square footage, room count, garage space and other amenities. The new
home comparables have a base price range from $272.83 to $299.69 per square foot. Plan
2 within Z has a current base asking price of $286.01 per square foot. There have been ten
closings of Plan 2 with sales prices ranging from $268.25 to $286.85 per square foot. It
should be noted that the actual sales prices include upgrades, options and premiums which
were purchased from the builder along with any concessions given by the builder. Our
concluded price is based on the base price of the home with no upgrades, premiums or
options. The homes appear to be in excellent condition with no depreciation visible. It has
been concluded that the Z Plan 2 has a base current market value of $280.00 per square
foot. This calculates as follows:
1,430 sf x $280.00 = $400,400
The most appropriate new home comparable data for Z Plan 3 are shown below.
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 3 / 2.5 3 / 2 1,475 --
2 1 2 / 2.5 3 / 2 1,288 $299.69
2 2 3 / 2.5 3 / 2 1,430 $286.01
4 2 3 / 2.5 2 / 2 1,384 $297.68
4 3 3 / 2.5 2 / 2 1,495 $296.95
5 1 3 / 2.5 2 / 2 1,653 $272.83
8 1 3 / 2.5 2 / 2 1,278 $290.30
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data No. 8 is in a more conventional neighborhood without the
urbanization within Millenia. Adjustments were considered (when applicable) for location,
master plan amenities, lot size, stories, sales concessions, CFD taxes, common area
benefits, total square footage, room count, garage space and other amenities. The new
home comparables have a base price range from $272.83 to $299.69 per square foot. Plan
3 within Z has a current base asking price of $288.81 per square foot. There have been 12
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 94
closings of Plan 3 with sales prices ranging from $269.54 to $298.88 per square foot. It
should be noted that the actual sales prices include upgrades, options and premiums which
were purchased from the builder along with any concessions given by the builder. Our
concluded price is based on the base price of the home with no upgrades, premiums or
options. The homes appear to be in excellent condition with no depreciation visible. It has
been concluded that the Z Plan 3 has a base current market value of $280.00 per square
foot. This calculates as follows:
1,475 sf x $280.00 = $413,000
The most appropriate new home comparable data for Element Plan 1 are shown below.
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 3 / 2.5 3 / 2 1,775 --
1 2 3 / 3.5 3 / 2 1,915 $273.11
1 3 4 / 3.5 3 / 2 2,157 $261.47
3 1 4 / 3.5 3 / 2 2,602 $229.24
7 1 4 / 2.5 2 / 2 2,014 $259.18
9 1 4 / 3 2 / 2 1,950 $277.90
11 1 4 / 3 2 / 2 1,988 $287.17
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data Nos. 7, 9 and 11 are in more conventional neighborhoods
without the urbanization within Millenia. Adjustments were considered (when applicable) for
location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common
area benefits, total square footage, room count, garage space and other amenities. The
new home comparables have a base price range from $229.24 to $287.17 per square foot.
Plan 1 within Element has a current base asking price of $280.56 per square foot. There
have been eight closings of Plan 1 with sales prices ranging from $274.96 to $308.66 per
square foot. It should be noted that the actual sales prices include upgrades, options and
premiums which were purchased from the builder along with any concessions given by the
builder. In a larger product, such as Element, the buyer typically purchases more upgrades
and options. Our concluded price is based on the base price of the home with no upgrades,
premiums or options. The homes appear to be in excellent condition with no depreciation
visible. It has been concluded that the Element Plan 1 has a base current market value of
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 95
$275.00 per square foot. This calculates as follows:
1,775 sf x $275.00 = $488,125
The most appropriate new home comparable data for Element Plan 2 are shown below.
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 3 / 2.5 3 / 2 1,915 --
1 1 3 / 3.5 3 / 2 1,775 $280.56
1 3 4 / 3.5 3 / 2 2,157 $261.47
3 1 4 / 3.5 3 / 2 2,602 $229.24
7 1 4 / 2.5 2 / 2 2,014 $259.18
9 1 4 / 3 2 / 2 1,950 $277.90
11 1 4 / 3 2 / 2 1,988 $287.17
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data Nos. 7, 9 and 11 are in more conventional neighborhoods
without the urbanization within Millenia. Adjustments were considered (when applicable) for
location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common
area benefits, total square footage, room count, garage space and other amenities. The
new home comparables have a base price range from $229.24 to $287.17 per square foot.
Plan 2 within Element has a current base asking price of $273.11 per square foot. There
have been six closings of Plan 2 with sales prices ranging from $265.59 to $280.55 per
square foot. It should be noted that the actual sales prices include upgrades, options and
premiums which were purchased from the builder along with any concessions given by the
builder. In a larger product, such as Element, the buyer typically purchases more upgrades
and options. Our concluded price is based on the base price of the home with no upgrades,
premiums or options. The homes appear to be in excellent condition with no depreciation
visible. It has been concluded that the Element Plan 2 has a base current market value of
$270.00 per square foot. This calculates as follows:
1,915 sf x $270.00 = $517,050
The most appropriate new home comparable data for Element Plan 3 are shown on the
following page.
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 96
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 4 / 3.5 3 / 2 2,157 --
1 2 3 / 3.5 3 / 2 1,915 $273.11
1 4 4 / 3.5 3 / 2 2,248 $261.12
3 1 4 / 3.5 3 / 2 2,602 $229.24
7 1 4 / 2.5 2 / 2 2,014 $259.18
9 3 4 / 3 2 / 2 2,165 $270.62
11 2 4 / 3 2 / 2 2,021 $270.02
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data Nos. 7, 9 and 11 are in more conventional neighborhoods
without the urbanization within Millenia. Adjustments were considered (when applicable) for
location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common
area benefits, total square footage, room count, garage space and other amenities. The
new home comparables have a base price range from $229.24 to $273.11 per square foot.
Plan 3 within Element has a current base asking price of $261.47 per square foot. There
have been seven closings of Plan 3 with sales prices ranging from $246.71 to $281.76 per
square foot. It should be noted that the actual sales prices include upgrades, options and
premiums which were purchased from the builder along with any concessions given by the
builder. In a larger product, such as Element, the buyer typically purchases more upgrades
and options. Our concluded price is based on the base price of the home with no upgrades,
premiums or options. The homes appear to be in excellent condition with no depreciation
visible. It has been concluded that the Element Plan 3 has a base current market value of
$258.00 per square foot. This calculates as follows:
2,157 sf x $258.00 = $556,506
The most appropriate new home comparable data for Element Plan 4 are shown below.
Data Plan Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 4 4 / 3.5 3 / 2 2,248 --
1 2 3 / 3.5 3 / 2 1,915 $273.11
1 3 4 / 3.5 3 / 2 2,157 $261.47
3 1 4 / 3.5 3 / 2 2,602 $229.24
7 2 5 / 3 2 / 2 2,177 $248.96
9 3 4 / 3 2 / 2 2,165 $270.62
11 3 4 / 3 2 / 2 2,314 $263.61
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 97
All new home comparables are located within Otay Ranch. All are of similar quality, design
and appeal; however, Data Nos. 7, 9 and 11 are in more conventional neighborhoods
without the urbanization within Millenia. Adjustments were considered (when applicable) for
location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common
area benefits, total square footage, room count, garage space and other amenities. The
new home comparables have a base price range from $229.24 to $273.11 per square foot.
Plan 4 within Element has a current base asking price of $261.12 per square foot. There
have been seven closings of Plan 4 with sales prices ranging from $255.57 to $292.79 per
square foot. It should be noted that the actual sales prices include upgrades, options and
premiums which were purchased from the builder along with any concessions given by the
builder. In a larger product, such as Element, the buyer typically purchases more upgrades
and options. Our concluded price is based on the base price of the home with no upgrades,
premiums or options. The homes appear to be in excellent condition with no depreciation
visible. It has been concluded that the Element Plan 4 has a base current market value of
$257.00 per square foot. This calculates as follows:
2,248 sf x $257.00 = $577,736
Builder Owned Retail Value
Within Z & Element there are six builder-owned model homes and an additional seven
production homes over 95 percent complete. Per interviews with builders, upgrades and
landscape/hardscape of up to $100,000 are installed in the model homes, however, the
builders generally consider this a marketing cost and do not anticipate recovering this
investment on a dollar for dollar basis. Based on historical information, a consideration
of a $40,000 premium has been included with each of the model homes. The retail base
value conclusions for the builder-owned homes are calculated as shown below.
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 98
Plan Z-1 (1 x $373,520) $ 373,520
Plan Z-2 (2 x $400,400) 800,800
Plan Z-3 (2 x $413,000) 826,000
Plan E-1 (1 x $488,125) 488,125
Plan E-2 (3 x $517,050) 1,551,150
Plan E-3 (2 x $556,506) 1,113,012
Plan E-4 (2 x $577,736) 1,155,472
Model Upgrades (6 x $40,000) 240,000
Total Z & Element $ 6,548,079
Absorption Period
In order to arrive at an absorption period for the builder owned homes within Z and Element,
the absorption rates for both Z and Element have been reviewed along with the comparable
project’s absorption rates. Z and Element opened for sale in December 2016. Z at Millenia
has sold 35 homes suggesting an average sales rate of 2.69 homes per month while
Element has sold 49 homes suggesting an average sales rate of 3.7 sales per month. The
two projects together have sold 84 homes suggesting an average of 6.46 sales per month
for the two projects combined. The other new home project sales rates within Millenia range
from 1.8 to 3.5 per month. In addition to reviewing actual sales rates, we have reviewed
Meyers Research Market Absorption Study on Z and Element which projects a sales rate in
the 3.5 per month for each project or in the 7.0 sales per month range for the combined
projects. We have concluded that the 13 builder-owned homes (including six model homes)
will be absorbed over a three-month time period.
Remaining Costs
As discussed earlier within this report the Shea Homes owned property has some
remaining costs associated with the land development. There are an additional
$2,072,901 in land development costs and an additional $4,765,536 in development fees.
The land development costs should be spread across all builder owned property which
includes the 13 builder-owned homes, the 27 homes under construction and the 83
remaining lots for a total of 123 lots. Dividing the $2,072,901 by the 123 lots suggests a
per lot remaining cost of $16,853 (say) $16,900 per lot. The remaining fees are
associated with the lots only and will be considered in the land valuation below. There
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Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 99
are 13 houses which suggests there are $219,700 ($16,900 x 13) in remaining land
development costs associated with the builder owned completed homes. For purposes of
this analysis we are estimating the remaining land development costs will be spread
evenly over the absorption period.
Expenses
In determining an expense rate, several builders in the subject area have been interviewed
as to their expenses on selling existing inventory. Expenses include marketing and general
administrative costs. These costs typically range from six to ten percent depending on
varying factors such as absorption period, intensity of marketing, etc. Six percent has been
estimated for marketing expenses and two percent for general and administrative costs for
a total of eight percent in expenses for the subject neighborhoods analyses.
Profit
Several interviews with merchant builders in the area were conducted in order to
determine an appropriate profit percentage for the subject properties. In the early 2000s,
developers typically attempted to achieve a 10 to 12 percent profit based on gross sales
proceeds. During the Great Recession, this range was lowered considerably to six to
eight percent with some builders drastically lowering their profit potential in order to
maintain their work force. As the market improved, so did the profits. This appears to be
occurring once again as prices have increased in the past year. An eight percent profit
is considered appropriate in the analysis for these neighborhoods.
Discount Rate
In selecting a discount rate, the following was completed:
1. Interviews with merchant builders in the South San Diego market area
2. Review of current market conditions including current market rates as well as yields
reflected in other markets (i.e., municipal bonds, corporate bonds, etc.)
3. The quality, construction, historical sales and product on the subject properties
4. Discussed the project with equity investors and master plan community developers
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 100
The homes within Millenia have been well received in the marketplace with average to good
absorption rates. Due to the good sales rates and minimal supply, a ten percent discount
rate is considered appropriate for the subject neighborhoods.
Discounted Cash Flow Summary
The discounted revenue (see DCF Analyses in Addenda) for the builder owned homes
resulted in the value of $5,193,882 (say) $5,195,000.
Shea Home Ownership
Shea Homes owns 13 homes over 95 percent complete (including six models), 27 homes
under construction and 83 generally finished lots. The homes under construction will be
valued on the basis of a finished lot rather than give value to a partially completed
improvement, therefore, 110 lots will be valued. We have concluded on a value for the
finished lots of $145,000, however there are some outstanding land development costs
to get to a true finished lot ($16,900 per lot per above discussion). In addition, there are
remaining development fees which need to be paid at building permit or occupancy permit
which total $4,765,536. The land valuation for the Shea Homes owned lots is as follows:
110 Lots x $145,000 $15,950,000
Less: Remaining Development Costs ( 1,859,000)
Remaining Development Fees ( 4,765,536)
Shea Homes Ownership Lot Valuation $9,325,464 (say) $9,325,500
The final value conclusion for the Shea Homes owned property is shown below.
110 partially finished lots $ 9,325,500
13 Builder Owned Houses $ 5,195,000
Total Shea Homes Ownership Valuation $14,520,500
Individual Owners Value Conclusion
In determining the value for the individually owned homes, we have considered the
concluded base price value for the homes which is considered a minimum market value.
This is due to homebuyers typically purchasing some upgrades and options or paying
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 101
premiums for the lot. Within Element and Z there are 53 individually owned homes. The
concluded values are shown below:
Z and Element Individual Owned Homes
Plan Z-1 (3 x $373,520) $ 1,120,560
Plan Z-2 (10 x $400,400) 4,004,000
Plan Z-3 (12 x $413,000) 4,956,000
Plan E-1 (8 x $488,125) 3,905,000
Plan E-2 (6 x $517,050) 3,102,300
Plan E-3 (7 x $556,506) 3,895,542
Plan E-4 (7 x $577,736) 4,044,152
Total Z & Element Individual Ownership $25,027,554
In an additional analysis, we have reviewed the actual builder sales prices for the homes
within Z and Element. Sales occurred between late November 2016 and December 18,
2017 with closings occurring in December 2017. The builder reported closing prices for
the individually owned homes totals $25,547,590. The actual sales prices include any
upgrades, premiums or options purchased by the homeowner while our concluded value
is for the base value of the homes. The actual sales prices further substantiate the
concluded minimum market values for the Z and Element individually owned homes.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 100
APPRAISAL REPORT SUMMARY
The appraisal assignment was to value the subject property within the City of Chula Vista
CFD No. 16-I Improvement Area No. 1 which includes 393 proposed residential units and
two commercial parcels being developed within the master planned community known as
Mellenia. There are currently two builders selling new homes within Improvement Area
No. 1 with a third builder beginning land development. The parcels have all been mass
graded with the currently selling neighborhoods ranging from completed, individually
owned homes to builder owned homes, to homes under construction and finally to
partially finished lots. Closings began in December 2017 with 53 homes closed to
individuals as of February 1, 2018. The currently selling projects are experiencing
average to good sales rates. All structures appear to be in excellent condition with no
visible depreciation. We have reviewed builder sales and reviewed the MLS for re-sales.
The subject property was valued utilizing the Sales Comparison Approach to value to
ascertain the retail values of the lands, then using a Discounted Cash Flow for the homes
owned by the builders that are over 95 percent complete and a mass appraisal technique
for the individually owned homes. A minimum value was determined by concluding at a
base value for the homes. The valuation took into account the improvements/benefits to
be funded by the Special Tax CFD 16-I IA 1 Bond proceeds along with the CFD 16-I IA 1
special tax lien. The concluded aggregate value for the subject properties, subject to their
respective special tax lien, is:
(Portion of) Millenia:
SLF-IV-Millenia, LLC Ownership $ 6,030,000
LMC-Millenia Inv. Company, L.P. Ownership 4,000,000
CalAtlantic Ownership 3,900,000
KB Home Ownership 8,750,000
Shea Homes Ownership 14,520,500
Individually Owned Homes Minimum Market Value $ 25,027,554
Aggregate Value for CFD No. 16-I IA 1 $ 62,228,054
The above values are stated as of said date of value and subject to the attached
Assumptions and Limiting Conditions, Hypothetical Condition and Extraordinary
Assumptions herein, and the attached Appraiser’s Certification.
_________________________________________________________________________________________________________
Appraisal Report
City of Chula Vista CFD 16-I, Improvement Area No. 1 (Millenia)
Kitty Siino & Associates, Inc. Page 101
APPRAISERS’ CERTIFICATION
The appraiser certifies that to the best of his knowledge and belief:
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions and conclusions are limited only by the reported assumptions and
limiting conditions, and are my personal, unbiased, professional analyses, opinions and
conclusions.
3. The appraisers have no present or prospective interest in the property that is the subject of this
report, and no personal interest or bias with respect to the parties involved.
4. The appraisers’ compensation is not contingent upon the reporting of a predetermined value or
direction in value that favors the cause of the client, the amount of the value estimate, the
attainment of a stipulated result or the occurrence of a subsequent event.
5. This appraisal was not based on a requested minimum valuation, a specific valuation or the
approval of a loan.
6. The analyses, opinions and conclusions were developed, and this report was prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice.
7. Kitty Siino and Larry Heglar have made a personal inspection of the property that is the subject of
this report.
8. Kitty Siino and Larry Heglar have performed appraisal services on the subject property in the past
three years. This report is an update to the original report which had a June 28, 2017 date of value.
9. No other appraisers have provided significant professional assistance to the persons signing this
report.
10. The reported analyses, opinions and conclusions were developed, and this report was prepared,
in conformity with the requirements of the Appraisal Institute’s Code of Professional Ethics and
Standards of Professional Appraisal Practice, which include the Uniform Standards of Professional
Appraisal Practice.
11. The use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representatives.
12. As of the date of this report, both Larry Heglar and Kitty Siino have completed the requirements of
the continuing education program of the Appraisal Institute.
Larry W. Heglar, MAI
Kitty S. Siino, MAI
State Certified General
Real Estate Appraiser (AG004793)
ADDENDA
CFD NO. 16-I IMPROVEMENT AREA A
BOUNDARY MAP
TRACT MAP 16081, 15942, 16150,
ADJUSTMENT PLAT 17-0006, SHEA AND KB
SITE PLANS
BUILDER-OWNED HOMES
DISCOUNTED CASH FLOW ANALYSES
Skylar at Millenia Discounted Cash Flow Analysis
MONTH MONTH 1 MONTH 2 TOTAL
INCOME:
Retail Sales $631,863 $631,863 $1,263,725
TOTAL INCOME $631,863 $631,863 $1,263,725
EXPENSES:
Remaining Costs
Marketing & Carrying Expenses ($50,549) ($50,549) ($101,098)
Profit ($50,549) ($50,549) ($101,098)
TOTAL EXPENSES ($101,098) ($101,098) ($202,196)
NET CASH FLOW $530,765 $530,765 $1,061,529
Discount Factor 0.9917 0.9835
DISCOUNTED CASH FLOW $526,378 $522,028 $1,048,406
CUMULATIVE DISCOUNTED $526,378 $1,048,406 $1,048,406
CASH FLOW
Z & Element at Millenia Discounted Cash Flow Analysis
MONTH MONTH 1 MONTH 2 MONTH 3 TOTAL
INCOME:
Retail Sales $2,182,693 $2,182,693 $2,182,693 $6,548,079
TOTAL INCOME $2,182,693 $2,182,693 $2,182,693 $6,548,079
EXPENSES:
Remaining Costs ($73,233) ($73,233) ($73,233) ($219,700)
Marketing & Carrying Expenses ($174,615) ($174,615) ($174,615) ($523,846)
Profit ($174,615) ($174,615) ($174,615) ($523,846)
TOTAL EXPENSES ($422,464) ($422,464) ($422,464) ($1,267,393)
NET CASH FLOW $1,760,229 $1,760,229 $1,760,229 $5,280,686
Discount Factor 0.9917 0.9835 0.9754
DISCOUNTED CASH FLOW $1,745,681 $1,731,254 $1,716,946 $5,193,882
CUMULATIVE DISCOUNTED $1,745,681 $3,476,936 $5,193,882 $5,193,882
CASH FLOW
FINISHED LOT LAND SALES MAP
& SUMMARY CHART
RESIDENTIAL SALES SUMMARY CHART
Location/Seller Buyer
Sales
Date
Acres /
Units
Use/
Density
Sales Price/
Price-Unit Comments
1
W/S Millenia Ave. @ Strata St.,
Millenia, Otay Ranch, Chula Vista/
SLF IV-Millenia, LLC
Trammel Crow
12/19/17
8.27 /
253
MF /
30.6
$9,200,000 /
$36,364
Apartment site sold in superpad condtion. Construction scheduled
to start 1st Qtr, 2018. Buyer to pay Master Marketing Fee of
$379,500. Located just east of CalAtlantic project.
2
SEC Millenia Ave. & Strata St.,
Millenia, Otay Ranch, Chula Vista /
SLF IV-Millenia, LLC
CalAtlantic
Homes
6/9/17
3.74 /
78
MF /
20.9
$3,510,000 /
$45,000
Site delivered in mass-graded condition & fine grading in process
at time on inspection. Master Marketing Fee @ 1.5% of product
price. Builder also to pay profit participation.
3
SWC Orion Ave. & Strata St., Millenia,
Otay Ranch, Chula Visa / SLF IV-
Millenia, LLC
KB Home
6/9/17
7.27 /
79
SFD /
10.9
$7,265,000
$91,962
Site delivered in mass-graded condition. Models open for “Skylar”
product with homes 2,602 & 2,659 SF. Master Marketing Fee @
1.5% of product price. Profit participation based on builder profit to
be paid.
4
1630 S. Melrose Drive, Vista /
Warmington (Christian Science
Church)
Lennar
3/09/17
3.14 /
47
SFA /
14.97
$4,300,000 /
$91,489
Warmington optioned property mapped and began architectural
and engineering plans before selling to Lennar. Existing Church
on site which needs to be demolished.
5
W/S Vine, N/O Oceanside Blvd,
Oceanside / Weseloh Grosse LLC
City Ventures
1/5/2017
6.3 /
58
SFA /
9.2
$6,405,000 /
$110,431
Site in previously graded superpad condition with surrounding
streets in place. Across from existing motel and gas station and
adjacent to empty market.
6
S/S Birch Road between Millenia &
Orion Avenues, Millennia, Otay
Ranch, Chula Vista / SLF IV-Millenia
LLC
Trammel Crow
3/23/16
9.43 /
309
MF /
32.8
$15,350,000 /
$49,676
Site sold in superpad condition. Buyer currently under
construction with a 309 unit apartment site to be known as Alesan.
First units anticipate delivery in March 2018. Adjacent to Otay
Ranch Town Center.
7
S/S Santa Carolina at Santa
Christina, Village Two Planning Area
R-28, Montecito Village at Otay
Ranch / Golden Trust et al
RV
Management
2/2/16
5.18 /
94
MF /
18.1
$4,000,000 /
$42,553
Property sold for $42,553 per unit with estimated finishing costs of
$70,000 per unit. The site was raw land with some of the
surrounding streets in place.
8
NWC Eastlake Parkway & Hunte
Parkway, Millennia, Otay Ranch,
Chula Vista / SLF IV – Millennia LLC
Shea Homes
12/10/15
10.03 /
176
MF /
17.54
$10,350,000 /
$58,807
Sold in superpad condition. Shea homes is now marketing their
Element product (SFD) and Z project (attached) on the site.
9
W/S Eastlake Parkway between
Stylus and Strata Streets, Millennia,
Otay Ranch, Chula Vista / SLF – IV
Millennia LLC
Genesis
(Meridian)
6/30/15
12.74 /
217
MF /
17.03
$12,000,000
$55,300
Meridian Development, is developing the site which was
purchased in a superpad condition. First residential for sale
product in Millennia. Meridian now marketing three products,
Metro, Trio and Evo.
10
South side Dorothy Street between I-
5 and Industrial Blvd, Chula Vista /
MAR Group V LLC / 622-072-08 & 09
Muraoka
Enterprises
5/27/15
1.77 /
39
SFA /
22.03
$2,400,000 /
$61,538
Property had old homes at time of sale with all of the value
attributed to the land. Buyer has processed entitlements for 39
townhomes; 3-4 bedroom with a community clubhouse.
11
1002 18th Street, San Diego / MCP
Ventures Llc / 627-301-16, 17, 18
Shea Homes
2/2/15
15.74 /
175
SFD /
11.1
$16,250,000 /
$92,857
The old Marion High School (Catholic High School) site. Land sat
vacant since 2007 and became a nuisance. Entitled for 175 SFD
homes on small lots. Project now under construction.
COMMERCIAL LAND SALES MAP AND
SUMMARY CHART
Commercial Land Sale Summary
Data
No.
Location / APN / Seller
Buyer
Sale
Date
Size
Acres
Price
Price/
Sq. Ft.
Comments (expand)
1
West side of Millenia Ave.,
south of Stylus St., Millenia,
Chula Vista / 643-060-51-00 /
SLF IV – Millenia LLC
LMC-Millenia Inv.
Co. LP (Chesnut)
Esc.
10.93
$3,923,555
$8.24
“Invent” project – proposed for 700,000 square feet of Class
A Office Space in four 4-7 story buildings along with a
6,100 square foot amenity building. A six-level parking
structure is planned with a four-level additional structure.
Some marketing materials suggest Office/Life Science/High
Tech space expandable to over 1 million square feet.
2
West side of Millenia Ave.,
north of Strata St., Millenia,
Chula Vista / 643-060-79-00 /
SLF IV – Millenia LLC
LMC-Millenia Inv.
Co. LP (Chesnut)
Esc
8.342
$4,623,890
$12.72
“Discover” project. Marketing materials include a proposed
407,100 square foot office space with a 13,250 sf
accessory space and a five-level parking garage. Some
marketing materials propose a Hospital/Life Science
building for 400,000 square feet expandable to 700,000
square feet.(10-stories)/ Site has entitlements to house
150 residential units (not in current plans).
3
South side of Birch Rd.
between Orion and Millenia
Avenues, Millenia, Chula
Vista / 643-060-54. 55 amd
56 / SLF IV – Millenia LLC
MCV23 LLC
4/17
12.58
$5,459,725
$10.03
Retail site Under construction with 135,000 square feet of
retail, services and restaurants. Within Millenia to provide
commercial for surrounding residences.
4
West side of Ocean View Hills
Parkway at Otay Mesa Road,
Otay Mesa, City of San Diego
/ 645-040-41-00 / Roman
Catholic Bishop of S.D.
Blue Merced R 1414
Llc
4/17
15.68
$3,500,000
$5.12
Commercial zoned parcel adjacent to the Playa del Sol
residential planned development consisting of over 1,500
condominiums.
5
West side of Millenia Ave. at
Stylus St., Millenia, Chula
Vista / 643-060-70-00 / SLF
IV – Millenia LLC
Ayers Millenia LP
4/16
2.505
$1,400,000
$12.83
In Millenia with frontage on SR 125. Ayres purchased for to
build a boutique 135-room hotel. Currently under
construction.
6
East side of Millenia Ave.,
south of Stylus St., Millenia,
Chula Vista / 643-060-57-009
/ SLF IV – Millenia LLC
LMC-Millenia Inv.
Co. LP (Chesnut)
2/16
7.062
$2,568,663
$8.35
“Think” project. Building plans in to city for 424,100 square
feet of medical office and amenity building.
7
South side of Fenton St. at
Harold Pl., Eastlake, Chula
Vista / 595-711-19-00 /
Eastlake Corporate Center
Sethi Family Trust /
Baz Family Trust
5/15
3.88
$3,300,000
$19.53
In Eastlake Business area which is generally built-out.
Frontage on Otay Lakes Road. Hampton Suites Inn and
Homewood Suites by Hilton planning a dual hotel on site.
Located adjacent to business park & retail.
8
Southeast corner of Fenton St
& Hale Place, Eastvale, Chula
Vista / 595-232-05-00 /
Fenton Street LLC
Pacific EastLake
LLC
4/15
1.55
$1,800,000
$26.66
In Eastlake Business area which is generally built-out. Self
Storage project currently under construction.
IMPROVED RESIDENTIAL SALES MAP
& SUMMARY CHART
IMPROVED RESIDENTIAL SALES SUMMARY CHART
Data
No.
Project Name
Location/Developer
Plan
Room
Count
Size (SF)
Floors/
Parking
Lot
Size/
Base
Sales Price
Price/SF
1
Element, Millenia, Solstice
Avenue and Strata Street,
Otay Ranch, Chula Vista /
Shea
1
2
3
4
3 / 2.5
3 / 3.5
4 / 3.5
4 / 3.5
1,775
1,915
2,157
2,248
3 / 2
3 / 2
3 / 2
3 / 2
Cluster $498,000
$523,000
$564,000
$587,000
$280.56
$273.11
$261.47
$261.12
2
Z, Millenia, Solstice
Avanue and Strata Street,
Otay Ranch, Chula Vista /
Shea
1
2
3
2 / 2.5
3 / 2.5
3 / 2.5
1,288
1,430
1,475
3 / 2
3 / 2
3 / 2
Att. $386,000
$409,000
$426,000
$299.69
$286.01
$288.81
3
Skylar, Millenia, Orion
Avenue and Strata Street,
Otay Ranch, Chula Vista /
KB Home
1
2
4 / 3.5
4 / 3.5
2,602
2,659
3 / 2
3 / 2
2,000 $596,490
$613,490
$229.24
$230.72
4
Metro, Millenia, Eastlake
Parkway and Optima
Street, Otay Ranch, Chula
Vista / Meridian
1
2
3
4
2 / 2.5
3 / 2.5
3 / 2.5
3 / 2.5
1,298
1,384
1,495
1,694
2 / 2
2 / 2
2 / 2
2 / 2
Att. $390,000
$412,000
$429,000
$465,000
$300.46
$297.68
$296.95
$274.45
5
Trio, Millenia, Eastlake
Parkway and Optima
Street, Otay Ranch, Chula
Vista / Meridian
1
2
3
3 / 2.5
3 / 2.5
4 / 3
1,653
1,662
1,880
2 / 2
2 / 2
2 / 2
Att.
$451,000
$468,000
$499,000
$272.83
$281.59
$265.42
6
Parc Place, Village Two,
Otay Ranch, Chula Vista /
Heritage
1
2
3
2 / 2
2 / 2.5
2 / 2.5
1,116
1,583
1,587
2 / 1
2 / 1
2 / 2
Att. $357,900
$399,000
$421,900
$320.70
$252.62
$265.85
7 Aventine, Village Two,
Otay Ranch, Chula Vista /
Cornerstone
1
2
3
4 / 2.5
5 / 3
5 / 3.5
2,014
2,177
2,438
2 / 2
2 / 2
2 / 2
2,975 $521,990
$541,990
$587,990
$259.18
$248.96
$241.18
8 Flora at Escaya, Village
Three Otay Ranch, Chula
Vista / Brookfield Homes
1
2
3
3 / 2.5
3 / 2.5
3 / 2.5
1,278
1,495
1,710
2 / 2
2 / 2
2 / 2
Att. $371,000
$394,000
$438,000
$290.30
$263.54
$256.14
9 Indigo at Escaya, Village
Three Otay Ranch, Chula
Vista / CalAtlantic
1
2
3
4 / 3
4 / 3
4 / 3
1,950
2,011
2,165
2 / 2
2 / 2
2 / 2
2,940 $541,900
$569,900
$585,900
$277.90
$283.39
$270.62
10 Seville at Escaya, Village
Three Otay Ranch, Chula
Vista / Shea
1
2
3
4 / 3
4 / 3.5
4 / 3.5
2,498
2,788
2,949
2 / 2
2 / 2
2 / 2
3,600 $621,000
$655,000
$662,000
$248.60
$234.93
$224.48
11 Valencia at Escays, Village
Three Otay Ranch, Chula
Vista / CalAtlantic
1
2
3
4 / 3
4 / 3
4 / 3
1,988
2,021
2,314
2 / 2
2 / 2
2 / 2
2,700 $570,900
$563,900
$610,000
$287.17
$270.02
$263.61
APPRAISERS’ QUALIFICATIONS
QUALIFICATIONS OF KITTY S. SIINO, MAI
Education
Bachelor of Arts in Business Administration, Financial Investments, California State
University, Long Beach, California (1980)
Post-Graduate Study, Real Estate Development, University of California, Irvine, California
Appraisal Institute Classes: Uniform Standards of Professional Appraisal Practice, A & B;
Appraisal Principles; Appraisal Procedures; Basic Income Capitalization; Advanced Income
Capitalization; Narrative Report Writing; Advanced Applications, Case Studies.
Successfully completed all classes in addition to successfully completing the writing of a
Demonstration Report and taking the Comprehensive Exam. Became a Member of the
Appraisal Institute in December 1996. Have completed over 100 hours of continuing
education through the Appraisal Institute every five years.
Employment
1988 - Present:
Self-Employed Real Estate Appraiser. Duties include the appraisal of various types
of properties such as commercial, retail, industrial and vacant land. More complex
assignments include easements, right-of-ways and special assessment districts. From
1996 to present, specialized in special assessment districts and community facilities
districts appraisals for public entities, including Jurupa Community Services District,
Corona Norco Unified School District, City of Corona, City of Chula Vista, City of San
Marcos and City of Moreno Valley.
1986-1988:
Project Manager of Development for Ferguson Partners, Irvine, California. Duties
included land acquisitions; review of fee appraisals and valuations; analysis of
proposed development; planning and design; and management of development,
construction and lease-up. The types of properties developed were commercial and
industrial. Duties ranged from raw, vacant site development through property
management of recently developed projects.
1981 - 1986
Manager of Finance, Construction for Community Development Division, The
Irvine Company, Irvine, California. Duties included originating and managing a
newly formed division of finance to bridge between the accounting functions and
project management functions. Worked with analysis and budgets for Community
Development Division. Coordinated with cities in forming new Assessment Districts
and Community Facilities Districts to finance major infrastructure improvements.
Types of properties were apartments and single-family residential lots on a for sale
basis to apartment and homebuilders.
1980 - 1981
Investment Counselor, Newport Equity Funds, Newport Beach, California. Duties
included obtaining private financing for residential properties, working with appraisals
of properties and analyzing the investments.
Licenses
Real Estate Sales Person, State of California, 1980
Certified General Appraiser, State of California (#AG004793)
Organizations
MAI #11145 - The Appraisal Institute
Public Financing
CASTOFF Meetings, 2006, 2007, 2008, 2009, 2010, 2011, 2013, 2014, 2015 and 2016
Speaker, Mello-Roos & Special Assessment Financing, UCLA Extension Public Policy
Program, February 2009 and March 2011
PROFESSIONAL QUALIFICATIONS
LARRY W. HEGLAR, MAI
Professional Experience
Appraisal Mr. Heglar has experience in the appraisal of various residential and income-producing properties
including master-planned communities, commercial, industrial, office, medical buildings,
apartment buildings, planned unit developments, shopping centers, hotels and motels, post office
buildings, corporate headquarters and multi-use projects. He has more than 40 years of real estate
experience.
Consulting Mr. Heglar’s experience has included acquisitions and dispositions of residential subdivision
property, master planned communities, portfolio advice/strategies planning, highest and best use
studies, project feasibility and marketing studies.
Professional Employment
Nov, 2012 to Present-Principal/Owner, Larry W. Heglar & Associates, Huntington Beach, CA
Orange County based appraisal and consulting firm providing a broad scope of real estate services including appraisals,
market studies and litigation support. Projects included master planned communities, subdivisions and large investment
properties. Locations included properties mainly in Southern California.
Mar, 2007 to November 2012-Sage Community Group, Consultant, Newport Beach, CA
Develops strategy/methodology for disposition of land assets in California, Nevada and Arizona. Assists in developing
strategy for institutional investors in the acquisition of land assets during economic slow-down. Assists in management
of land assets for Sage Community Group and for financial institutions on REO assets.
Feb 2001 to Oct 2006 - Pulte Homes, Vice-President of Land Acquisition, Irvine CA
Oversaw the purchase and sale of land for Orange County/South Riverside County Division, as well as North Inland
Empire Division. Transactional experience throughout Southern California in most major markets.
Responsibilities included seeking development opportunities, analysis of potential acquisitions, negotiation of terms,
coordination of legal documentation and internal land purchase approvals.
Hired and trained professional land personnel.
Jan 1993 to Feb 2001 - Principal/Owner, Larry W. Heglar & Associates, Irvine CA
Orange County based appraisal and consulting firm providing a broad scope of real estate services including appraisals,
market studies and feasibility analyses. Projects included master planned communities, military bases, subdivisions,
large investment properties and portfolio properties. Locations included properties mainly in Southern California as
well as Northern California, Colorado, Florida.
Office and associated with Institutional Housing Partners, a CalPers advisor.
April 1984 to Jan 1993 - The Irvine Company, Vice-President Land Sales, Newport Beach CA
Responsible for managing and conducting the analysis, negotiations and documentation of residential subdivision and
institutional land sales for The Irvine Company. Negotiated more that 80 transactions for over $660 million in land
revenue.
Oversaw escrow process and collection of builder payment of price and profit participation.
Jan 1983 to April 1984 - Appraiser, John S. Adams & Associates, Newport Beach CA
Appraisal assignments specializing in income properties located in Southern California
Jan 1979 to Jan 1983 - Manager of Appraisals, The Irvine Company, Newport Beach CA
Coordinated the appraisal requirements with outside valuation consultants and recommended strategies to upper
management.
Feb 1978 to Jan 1979 - Regional Appraiser, United California Mortgage Company, Tustin CA
Chief staff appraiser for the mortgage banking operations of UCB/First Interstate Bank in Orange County. Responsible
for all loan appraisals on income properties.
July 1971 to Feb 1978 - Real Estate Analyst, Coldwell Banker, Los Angeles CA Conducted appraisals on all major types of real estate including residential, commercial, industrial and special use
properties mainly in California but also in Maryland, Washington, New Jersey and Illinois.
Education
San Diego State University - Bachelor of Arts in Geography.
Appraisal Institute Courses –
• Course IA (AIREA) – Principles of Real Estate Appraising, 1972
• Course IB (AIREA) - Principles of Real Estate Appraising, 1974
• Course II (AIREA) – Urban Real Estate Appraisal, 1975
• Course VI (AIREA) – Techniques and Mathematics of Capitalization, 1977
• Course IV (AIREA) – Condemnation Appraisal Practice, 1978
• Standards of Professional Practice, 1990
• Course 410 & 420, Standards of Professional Practice, (Appraisal Institute), 1995
• Continuing Education – The Appraisal Institute and California Office of Real Estate Appraisers provides
numerous seminars and workshops to satisfy continuing education requirements. The Urban Land Institute and
other real estate organizations also provide programs that Mr. Heglar has attended for continuing education requirements.
Professional Affiliations
Urban Land Institute, Associate Member
Lambda Alpha International, Honorary Land Economics Society, Former Chapter President and International Board of
Governors Officer
BIA, Orange County
Board of Directors, Irvine Campus Housing Authority, 1999 to 2008
Appraisal Institute, MAI Designation, (Member No. 6602)
Representative Appraisal Assignments (within past ten years)
Income Property Appraisals
Industrial-
• 17120 Main Street, Gardena, 186,000 square feet in three buildings on 9.40 Acres. Leased to three tenants
• 13226 Alondra Boulevard, Cerritos, 128,000 square feet on 5.42 acress. Single tenant
• LAMBERT PALM BUSINESS CENTER, La Habra, 188,644 square foot, multi-tenant business park
• AIRPORT DISTRIBUTION CENTER, Las Vegas, 69,592 square foot, multi-tenant business park
• 240 SPECTRUM BOULEVARD, Las Vegas, 45,394 square foot, multi-tenant business park
• COMMERCE CENTER, Santa Fe Springs, 81,117 square foot, multi-tenant business park
• PUMICE CARMENITA INDUSTRIAL PARK, 29,808 square foot, multi-tenant business park
• CLAUSET INDUSTRIAL PARK, 103,546 square foot, multi-tenant business park
• 1350 Philadelphia Street, Pomona, 85,851 square foot trucking facility on 11.76 Acres
• 3561 Philadelphia Street, Chino, 14, 360 square foot trucking facility on 4.137 Acres
• 1090 E. Belmont Street, Ontario, 128,552 square foot distribution facility on 11.23 Acres
• 1773 Whittier Avenue, Costa Mesa, 20,800 square foot, multi-tentant business park on 1.137 Acres
•
• Gilead Sciences, San Dimas, Four bio-med/office buildings totalling 191,100 square feet on 12.78 Acres
Apartments-
• THE PARK @ THE IRVINE SPECTRUM, 762 unit apartment project on 13.78 Acres
• SAN CARLO APARTMENTS, Irvine, 354 unit apartment project on 21.398 Acres
• SANTA CLARA APARTMENTS, Irvine, 378 unit apartment project on 16.368 Acres
• HERITAGE POINT APARTMENTS, Irvine, 342 unit apartment project on 15.028 Acres
Retail Centers-
• ALTON SQUARE SHOPPING CENTER, Irvine, 35,451 square foot shopping center on 11.559 acres and
achored by Ralph’s Market and CVS Drug Store
• 17th St. & Newport Blvd., 28,468 square foot leasehold shopping center in Costa Mesa on 2.6 acres.
Office Buildings-
• ONE GOLDEN SHORE, Long Beach, 32,000 square foot office building on 2.42 Acres
• 1601 Avocado Avenue, Newport Beach, 12,547 square foot medical office building on 0.90 acres
• 1928 S. Grand Avenue, Santa Ana. 210,000 square foot, single story building lease to County of Orange
Hotel Properties-
• Portfolio of six hotel properties with following locations: Seal Beach (115 rooms), Corona (171 rooms),
Redlands (107 rooms), Moreno Valley (127 rooms), Chino Hills (124 rooms) & Diamond Bar (125 rooms) Land Appraisals-
• CAPISTRANO UNIFIED SCHOOL DISTRICT, proposed 14 acre school site in Rancho Mission Viejo
• MORENO VALLEY, 52 acres of unentitled land adjacent to freeway
• MOTTE RANCH, 638 acres of unentitled land near San Jacinto, Riverside County
• UCI APARTMENT SITE, Ground lease land valuation of 72.5 acres site improved with 1,753 student apartment
units
• ROWLAND HEIGHTS OPEN SPACE, 168.75 acres of vacant land
• CANYON VIEW, proposed 92 lot residential subdivision in Palm Springs
• 1926 PACIFIC COAST HIGHWAY, proposed 52 unit condominium plus 10,000 square feet of retail in Redondo
Beach
• SOUTH COAST BUILDERS, proposed 28 lot subdivision in Costa Mesa on Harbor Boulevard
• LAKESIDE, RIVERSIDE COUNTY, Master planned community, 450 acres and 334 residential homes
• WEST COYOTE HILLS SPECIFIC PLAN, FULLERTON, Master planned community, 510 acres, approximately
750 residential units
• Land for proposed hotel on UCI Campus
• LOST VALLEY, 1,353 acre property owned by Boy Scounts of America in eastern San Diego County
• LAMB SCHOOL SITE, HUNTINGTON BEACH, new residential subdivision
• WARDLOW SCHOOL SITE, HUNTINGTON BEACH, new residential subdivision
• UNIVERSITY OF CALIFORNIA, IRVINE, Proposed Hotel Site
• MOUNTAIN PARK, ANAHEIM, Portion of Master Planned Community
• CHRISTOPHER DEVELOPMENT GROUP, WESTMINSTER, 80 Lot Subdivision
• HIGHLAND HILLS, SAN BERNARDINO, 543 acres entitled for 1,516 residential units/lots.
• VAIL LAKE RANCHO CALIFORNIA, LLC, 497 acres of vacant, unentitled land. Purpose for bankruptcy
proceedings.
• PARK PLACE, SANTA CLARITA, LOS ANGELES CO., 522 acres of raw land with Approved Tentative Tract
Map for 492 residential lots.
• JP RANCH, CALIMESA, RIVERSIDE CO., 38 acres dedicated for open space/wildlife corridor
• NAKASE NURSERY, LAKE FOREST, ORANGE CO., 120 unentitled land, General Plan for business park use.
• TUSTIN LEGACY, 29.18 acre apartment site developed with 758 units
• CHINO HILLS, CHINO, SAN BERNARDINO CO., 400 acres of open space.
• UNIVERSITY PARK, PALM DESERT, RIVERSIDE CO., 165 Acres partially improved land with Approved
Tentative Tract Map for 169 lots
• ADAMS CANYON RANCH, SANTA PAULA, VENTURA CO., 4,714 acres of vacant land adjacent to the City
of Santa Paula.
• DOS VIENTOS, THOUSAND OAKS, VENTURA CO., 1,000 acres of vacant, raw land.
• CHINO PRESERVE, CHINO, CA-Southerly portion of master planned community consisting of approximately
614 acres and entitlements for 4,566 residential units and commercial development. Purpose was for estate
planning.
• MESA VERDE ESTATES SPECIFIC PLAN, CALIMESA, CA-Master planned community with 1,492 acres and
entitlements for 3,450 units plus commercial development. Purpose was for bankruptcy proceedings.
• SUNSET RIDGE, WILDOMAR, CA-Master planned community consisting of approximately 792 aces and
proposed for about 1,180 residential units. Purpose was for buy-out of partner.
• SHEA TRILOGY, RIVERSIDE CO., CA-Approximately 250 acres of vacant land surrounding an active adult
community and golf course adjacent to Corona in unincorporated Riverside County. Purpose was for dedication of
Open Space Conservation land and dedication of Wetlands Conservation Easement.
• ONTARIO FESTIVAL, ONTARIO, CA-Proposed mixed-use development on approximately 24 acres consisting
of 311 residential units and 2.5 acres of commercial entitlements. Purpose was for bankruptcy proceedings.
• TALEGA VALLEY, SAN CLEMENTE, CA-Orange County, coastal master planned community consisting of
3,479 acres and more than 4,000 residential lots with commercial, support institutional and recreational uses.
• MCAS TUSTIN, CA-Former Tustin Marine Corps Base master planned for a 1,288 acre community to be
improved with more than 1,500 residential units/lots with industrial, commercial support institutional and
recreational uses.
• DANA POINT HEADLANDS, DANA POINT, CA-Raw land with potential for approximately 200 ocean
oriented residential lots plus hotel and commercial site.
• FORSTER RANCH, SAN CLEMENTE, CA-Master planned community with about 534 acres and 1,037
residential lots plus recreational uses.
• PORTA BELLA, SAUGUS/NEWHALL, CA-Specific plan for approximately 2,900 lots along with retail,
commercial & industrial land uses on 996 acres.
• BEL MARIN KEYS V, MARIN COUNTY, CA-Specific plan for approximately 800 residential lots on more than
1,600 acres with access to San Francisco Bay.
• EL DORADO HILLS, EL DORADO COUNTY, CA-Specific plan for approximately 2,700 lots/units on 2,245
acres including about 200 acres of commercial/industrial uses.
• SADDLEBACK MEADOWS, ORANGE COUNTY, CA-Planned for approximately 705 lots on 222 acres.
• SERRANO HEIGHTS, ORANGE COUNTY, CA-Specific plan for 1,210 lots/units on 533 acres including
recreational uses.
• MISSION OAKS RANCH, BUELTON AREA, SANTA BARBARA COUNTY, CA-Approximately 3,900 acres
of raw grazing land planned for “ranchet” development.
• PARADISE HILL, SAN BERNARDINO, CA-Specific plan for 504 lots on approximately 402 acres.
• Two single family subdivisions in the Village of Northwood, Irvine.
• Stonecrest Village, San Diego. Single family residential subdivision with 88 lots with average size of 4,500 square
feet.
• Orangecrest Hills, Riverside. Single family residential subdivision with 132 lots with minimum lot size of 7,200
square feet.
• Laguna Beach/Crystal Cove State Park. Total of approximately 40 acres for possible exchange of land between
State of California, school district and private land owner.
• Peninsula Pointe, Rancho Palos Verdes. Residential subdivisión with 37 lots ranging from 12,000 to 25,000 square
feet.
• Single family subdivision in Tustin Ranch. 162 lots with 6,390 square foot minimum lots sizes.
• Single family subdivision in Aliso Viejo. 154 lots with 5,100 square foot minimum lot size.
• Canyon Vista, Oceanside. Approximately 55 acres approved for 93 lot single family subdivision.
• Santa Rosa Colony II, Ventura Co. Approximately 50 acres of raw land. Potential for development with low
density subdivision.
• Rancho San Clemente. 84 lot single family subdivision with lots 5,000 square foot minimum size.
• Brentwood project in Rancho Cucamonga. Proposed, 90 lot residential subdivision with 9,000 square foot
minimum lot size.
• Willowbrook project in Mountain Gate Planned Community, Corona. Lots in an existing subdivision totaling 51
with a minimum lot size of 7,200 square feet.
• Heather Ridge project in Mountain Gate Planned Community, Corona. Lots in an existing subdivision totaling 58
with a minimum lot size of 4,750 square feet.
• Long Canyon, Simi Valley. Total of 1,813 acres with entitlement for 652 residential units, all single family
detached.
• One Park Place, Irvine. Remaining 26 acre site which is a portion of an existing apartment project.
• Las Flores Planned Community, South Orange County. Proposed 147 lot subdivision with 2,464 square foot
minimum lot size.
• Las Flores Planned Community, South Orange County. Proposed 48 lot subdivision with 6,000 square foot
minimum lot size.
• Twenty mile corridor for Foothill/Eastern Transportation Corridor. Right-of-way runs through unincorporated
Orange County territory and through the cities of Anaheim, Orange and Irvine. Total land area of 468 acres
acquired for right-of-way and approximately 28,800 acres appraised.
Land Dispositions
Responsible for managing and conducting the analysis and negotiations for residential subdivision and institutional land
sales for the Irvine Company. Mr. Heglar negotiated more than 80 transactions for over $660 million in Irvine, Newport
Beach, Tustin and Orange, CA.
• Westpark
• Northwood
• Newport Coast
• Tustin Ranch
• Santiago Hills
Land Acquisitions
Responsible for managing and conducting the analysis and negotiations of residential subdivision land for Pulte Homes in
Orange, Riverside and San Diego Counties, CA. A total of 27 transactions for more than 7,300 lots/units and a total land
purchase of more than $433 million.
• ALDERBROOK, LAKE ELSINORE, CA-Canyon Hills Master Plan Community, 143 SFD lots on approximately
28.6 acres.
• ASHTON HILLS, RIVERSIDE COUNTY, CA-196 SFD lots on approximately 140 acres.
• ST. AUSTELL II, PERRIS, CA-117 SFD lots on approximately 15.6 acres.
• ST. CROIX, PERRIS, CA-155 SFD lots on approximately 20.7 acres.
• AVERLY LANE, SAN DIEGO COUNTY, CA-4S Ranch Master Planned Community, 75 SFD lots on
approximately 20 acres.
• WINCHESTER HILLS, RIVERSIDE COUNTY, CA-Approximately 500 SFD lots & SFA units within
Winchester Hills Specific Plan on about 127 acres.
• BELLA ROSA, IRVINE, CA-104 SFD lots on 14.0 acres on The Irvine Ranch.
• BREMERTON, RIVERSIDE COUNTY, CA-108 SFD lots on approximately 21.6 acres.
• CACHETTE, IRVINE, CA-110 SFD lots in Irvine Ranch master planned community of Woodbury on
approximately 16.9 acres.
• STELLAN RIDGE, RIVERSIDE, CA-104 SFD lots on 204 acres.
• CHASE RANCH, CORONA, CA-217 SFD lots on 160 acres. Approximately 90 lots subsequently sold to another
builder.
• KUNNEY RANCH, RIVERSIDE, CA-149 SFD lots on 143 acres.
• KUO RANCH, RIVERSIDE, CA-23 SFD lots on 49.1 acres.
• CLAIBORNE, LADERA RANCH, MISSION VIEJO, CA-75 SFD lots on approximately 14.8 acres.
• MEADOWS @ MORGAN VALLEY, TEMECULA, CA-67 SFD lots on approximately 16.8 acres.
• MURRIETA HILLS, MURRIETA, CA-Approximately 1,000 lots for a proposed Del Webb active adult
community on 985.2 acres.
• RANCHO DIAMANTE, HEMET, CA-Joint venture for approximately 3,000 SFD lots on about 700 acres.
Approximately half of the project to be a Del Webb active adult community.
• SABELLA, SAN CLEMENTE, CA-75 SFD lots on approximately 16.7 acres in the Talega Valley master planned
community.
• SAN ELIJO RIDGE, SAN DIEGO COUNTY, CA-131 SFD lots in the San Elijo Master Plan on approximately
32.8 acres.
• SOLSTICE, IRVINE, CA-68 SFD lots in the Irvine Ranch master planned community of Quail Ridge on
approximately 20 acres.
• ST. AUSTELL, PERRIS, CA-117 SFD lots in the Avalon master planned community on approximately 17.4
acres.
• STONES THROW, LAKE ELSINORE, CA-126 SFD view lots on approximately 28 acres.
• TIFFANY HILLS, MURRIETA, CA-180 SFD lots on approximately 305 acres.
• VINEYARD ESTATES, MURRIETA, CA-41 lots on approximately 8.2 acres.
• WATERMARK, LAKE ELSINORE, CA-133 SFD view lots on approximately 29.6 acres.
• WEATHERLY @ CANYON HILLS, LAKE ELSINORE, CA-131 SFD lots on approximately 23.8 acres within
master planned community of Canyon Hills.
• RANCHO HIGHLANDS, TEMECULA, CA-210 SFA units on approximately 21.1 acres.
Representative Clients:
Attorneys:
Allen, Matkins, Leck, Gamble, Mallory & Natsis, LLP
Friedman, Stroffe & Gerard, P.C.
Jackson, De Marco, Peckinpaugh & Titus
Miller, Morton, Caillat & Nevis, LLP
Palmieri, Tyler, Wiener, Wilhelm & Waldron
Paul, Hastings, Janofsky & Walker
Rutan & Tucker, LLP
Songstad & Randall, LLP
Winthrop Couchot Professional Corporation
Paul Minerich Professional Corporation
Financial Institutions, Real Estate Management & Development Companies:
Bank of America
First Interstate Mortgage
Housing Capital Company
Wells Fargo Bank
Prudential Insurance Company
Westcap Corportation
Lewis Operating Company
BETEK
The Shopoff Group
Presley Homes
John Laing Homes
Richmond American Homes
Pulte Homes
Standard Pacific Homes
Taylor Woodrow Homes
The Irvine Company
William Lyon Homes
William Lyon Asset Management
Governmental Agencies/Institutions:
Capistrano Unified School District
City of Fullerton
City of Irvine
City of Tustin
City of Los Angeles
Federal Deposit Insurance Corporation
County of Orange
Irvine Ranch Water District
Metropolitan Water District of Southern California
United States Department of Navy
University of California, Irvine
SUPPLEMENT TO APPRAISAL REPORT
COMMUNITY FACILITIES DISTRICT NO. 16-I
IMPROVEMENT AREA NO. 1
(portion of) MILLENIA IN OTAY RANCH
City of Chula Vista, California
(Appraisers’ File No. 2018-1167S)
Prepared For
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Prepared By
Kitty Siino & Associates, Inc.
115 East Second Street, Suite 100
Tustin, California 92780
___________________________________________________________________________________
Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 1
KITTY SIINO & ASSOCIATES, INC.
REAL ESTATE APPRAISERS & CONSULTANTS
April 30, 2018
David Bilby, Director of Finance/Treasurer
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Reference: Supplement to Appraisal Report
Community Facilities District No. 16-I Improvement Area 1
(Portion of) Millenia, Otay Ranch
Northwest Corner of Hunte and Eastlake Parkways
Chula Vista, California
Dear Mr. Bilby:
At the request and authorization of the City of Chula Vista, we have completed a
Supplement to the Appraisal Report (“Supplement”) for City of Chula Vista Community
Facilities District No. 16-I Improvement Area 1 (“CFD No. 16-I IA 1”). This Supplement is
to be used in conjunction with the Original Appraisal Report for the above referenced
property dated April 11, 2018 with a date of value of February 1, 2018 which
encompasses a portion of the mixed-use community known as Millenia in Otay Ranch
(“Original Appraisal”). In lieu of updating the entire appraisal, the purpose of this
Supplement is to bring forward the date of value to April 1, 2018 and conclude if the
property has a value not less than the value concluded in the Original Appraisal. It should
be noted that this report may not be understood properly on its own, but rather should be
used only in conjunction with the Original Appraisal.
The purpose of this Supplement is to ascertain and discuss changes in the subject
property along with any changes that have occurred in the real estate market between
February 1, 2018 (date of value of Original Appraisal) and April 1, 2018.
INTENDED USE OF APPRAISAL - It is the appraiser’s understanding that the client, the
City of Chula Vista, will utilize this Supplement in disclosure documents related to the sale
of the Special Tax Bonds of CFD No. 16-I IA 1. This Supplement may be included in the
Official Statement or similar document to be distributed in connection with the marketing
and offering of the bonds. It is the appraiser’s understanding that there are no other
intended uses of this report.
___________________________________________________________________________________
Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 2
SUBJECT PROPERTY - The subject property consists of 393 proposed single-family
homes and two commercial parcels within the community known as Millenia in the area
known as Otay Ranch in the City of Chula Vista. The subject property consists of four
residential neighborhoods in varying degrees of development and two commercial
parcels. Please refer to the Addenda of this Supplement to view a table showing the
ownership and condition by parcel or unit as of February 1, 2018 (date of value in Original
Appraisal) and as of April 1, 2018 (date of value of this Supplement).
OWNER OF RECORD AS OF APRIL 1, 2018 –
Lot 1 and Lot 11 of Map 16081 are owned by SLF IV Millenia LLC, a Delaware limited
liability company.
Lot 7 of Map 16081 is owned by LMC-Millenia Investment Company, L.P., a limited
partnership.
Lot 17 of Map 16081 is owned by CalAtlantic Group Inc., a Delaware Corporation
(CalAtlantic has merged with Lennar since this purchase).
Lot 14 of Map 16081 is owned by KB Home California LLC.
Shea Homes LP as to Units 1-40, 51-60, 71-100, 107-144 and 176 on Lot 1 of Map 16150;
Individuals as to Units 41-50, 61-70, 101-106, 145-175 on Lot 1 of Map 16150.
PROPERTY RIGHTS APPRAISED - The property rights being appraised are of a fee
simple estate interest, subject to easements of record and subject to the lien of the CFD
No. 16-I IA 1 special tax. The definition of fee simple estate is included in the Original
Appraisal.
DEFINITIONS -
The term “Market Value” as used in this report is defined as:
"The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and seller
each acting prudently, knowledgeably and assuming the price is not
affected by undue stimulus. Implicit in this definition is the consummation
of a sale as of a specified date and the passing of title from seller to buyer
under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and each acting in what
he or she considers his or her own best interest;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted
by anyone associated with the sale.”1
1 The Appraisal of Real Estate, 13th Edition
___________________________________________________________________________________
Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 3
For all other definitions please refer to Original Appraisal.
DATE OF VALUE – April 1, 2018
DATE OF SUPPLEMENT – April 30, 2018
SCOPE OF WORK – The following items were completed in the scope of work for this
assignment.
• Identify additional builder home sales and closings within the subject property and
ascertain if the sales prices have increased, stayed the same or decreased.
• Identify additional construction on the subject property and report additional
expenditures resulting in less remaining costs to complete.
• Review and report on the subject real estate market conditions and identify any
changes since the Original Appraisal.
• Determine if the value is not less than the value conclusion in Original Appraisal.
DISCUSSION – On April 12, 2018 an inspection of the subject property and surrounding
lands was made by the appraiser. In addition, sales offices were contacted and reviews
of current information was conducted. This information included additional sales and/or
closings within the active projects within the subject property. We observed the following
changes in the subject property between February 1, 2018 (date of value within Original
Appraisal) and April 1, 2017 (date of value of Supplement).
1. An additional four homes have closed escrow to individual homebuyers within Shea
Homes’ Element and Z neighborhoods. As of the Original Appraisal there were 53
homes closed to individual homebuyers and as of April 1, 2018 there were 57 homes
closed to individual homebuyers.
2. An additional 23 homes were constructed to over 95 percent complete within Shea
Homes’ Element and Z neighborhoods and an additional 30 homes began
construction. Within Element and Z, as of the Original Appraisal, there were 27 homes
under construction (under 95 percent complete) and 83 remaining finished lots. As of
April 1, 2018, there were 30 homes under construction (under 95 percent complete)
and 53 remaining finished lots.
3. An additional 14 homes were sold (closed and under contract) within Shea Homes’
Element and Z neighborhoods. As of the Original Appraisal there were 84 homes sold
and as of April 1, 2018 there were 98 homes sold. Note that sold homes include
closed homes and homes over 95 percent complete and builder-owned, homes under
construction and finished lots that are in escrow.
4. An additional nine homes were sold within the neighborhood of Skylar by KB Home.
As of the Original Appraisal there were three homes sold and in escrow and, as of
April 1, 2018, there were 12 homes sold and in escrow. Also, an additional 10 homes
began construction within Skylar.
___________________________________________________________________________________
Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 4
5. Within CalAtlantic’s project they began construction on five model homes. In addition,
the 14 first production homes are due to begin construction the first week in April 2018.
6. According to LMC-Millenia Investment Company L.P. they are negotiating with two
large users for space in their proposed commercial building. While there are no signed
leases at this date, this suggests activity that office space is in demand in the subject
area.
7. Within each neighborhood additional hard costs and fees were expended. The master
developer spent an additional $291,000 on its backbone development costs. As of
the Original Report, there were $953,750 in remaining backbone costs associated with
Improvement Area 1 while as of April 1, 2018 there were $662,750 in remaining costs.
Shea Homes spent an additional $1,281,749 in land development costs and
development fees. As of the Original Report Shea Homes had $6,838,437 in
remaining costs while as of April 1, 2018 Shea Homes had $5,556,688 in remaining
costs. KB Home spent an additional $610,576 in land development costs and
development fees. As of the Original Report there were $5,678,127 in remaining costs
for KB Home, while as of April 1, 2018, there were $5,067,551 in remaining costs. Cal
Atlantic Homes spent an additional $704,662 in land development costs and
development fees. As of the Original Report CalAtlantic had $6,138,230 in remaining
costs and as of April 1, 2018 had $5,433,568 in remaining costs. It is the appraiser’s
understanding that LMC-Millenia Investment Company, L.P. spent additional dollars
on the planning for Lot 7 of Map 16081; however, we have not received the accounting
for these dollars. In total, as reported above, an additional $2,887,987 has been spent
on land development and development fees on the subject property between February
1, 2018 and April 1, 2018. While we were not able to review these expenditures in
detail, the amounts appear reasonable per our visual inspection of changes that have
occurred on the sites.
8. Within the actively selling projects, Element, Z and Skylar, prices have either stayed
the same or had increased. Within Element base asking prices were $498,000 -
$587,000 as of February 1, 2018 while current base asking prices are $512,420 -
$592,000 suggesting an increase in the 0.8 to 2.8 percent range over the nine-week
period. Within Z and Skylar, base asking prices have remained the same since
February 1, 2018. The fact that each plan within each active project has either had a
price increase or had prices stay the same suggests that prices are not declining within
the subject area.
9. Our physical inspection of the entire Millenia Project (includes the subject property
and additional lands) showed several signs of progress with the following changes
noted between February 1, 2018 and April 1, 2018. Lot 2 of Map 16081 (not a part of
the subject) is the retail site that now has vertical construction underway. Lot 20 of
Map 16081 (not a part of the subject) is the Ayres Hotel site and the third floor of the
hotel is now being framed. Lot 18 of Map 16081 (not a part of the subject) is proposed
for a new residential project by Trammel Crow and construction has begun on the site.
Additional new homes within Trio, Metro and Evo (not a part of the subject property)
___________________________________________________________________________________
Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 5
have begun construction. Further construction has occurred at Alexan by Trammel
Crow (not a part of the subject property). While these projects are not included in the
subject property, they are all located within Millenia and show progress and major
activity in the subject’s neighborhood.
SUBJECT REAL ESTATE MARKET - The overall regional real estate market has seen
minimal changes over the past nine weeks. Most projects in Otay Ranch are enjoying
slight price increases approximately every three months. We have reviewed CoreLogic’s
monthly update on Southern California which includes the number of sales and median
prices within each County. The reporting of this information lags about six weeks; thus,
for the Original Appraisal, we were able to obtain information through December 2017
while the most current information is through February 2018. In overall Southern
California sales were up 0.6 percent on a year over year basis from February 2017 to
February 2018 and up 2.3 percent over the same time period in San Diego County.
According to CoreLogic, February 2018 sales were the highest February sales in five
years. Sales prices in overall Southern California were up 10.2 percent in February 2018
on a year over year basis while within San Diego County sales prices were up 8.7 percent
on a year over year basis. In reviewing sales prices in December 2017 to sales prices in
February 2018 prices were down 1.4 percent in overall Southern California and down 0.9
percent in San Diego County. It is believed the slight downturn is due to the uncertainty
of the tax changes which occurred in December. Some buyers appear to be waiting to
see how the tax changes will affect the market before buying or listing their homes. It
should be noted that within the subject property, this has not happened and prices have
been increasing.
As we are only in the fourth month of 2018, it is still too early to tell the actual effects of
the Federal tax cuts passed in 2017 on new homes. Builders are anxious that some of
the proposed tax cuts may slow new home sales due to the possible decreases in
deductible mortgage interest and sales and property tax right-offs. The mortgage interest
deduction tax change affects mortgages over $750,000 which does not appear to affect
the subject homes directly due to their pricing.
Finally, we have reviewed the Improved Residential Sales Market Data which was used
in the Original Appraisal (please refer to Addenda of Original Appraisal). Our review
included 34 home plans within the eleven projects surveyed and considered comparable.
One project within Otay Ranch that included three plans (or nine percent) was unavailable
in our updated survey. Out of the remaining ten projects in Otay Ranch, 16 plans (or 47
percent) had price increases, 12 plans (or 35 percent) had the prices stay the same and
three plans (or nine percent) had slight price decreases. The increases ranged from
$2,000 to $14,420 while the decreases were in the $2,000 range. This review of the
subject real estate market suggests that the market is still in an upward cycle as projects
are selling homes and the majority of prices are either staying the same or increasing.
CONCLUSION – This Supplement is intended to be used in conjunction with the Original
Appraisal Report prepared with a February 1, 2018 date of value. This Supplement is to
ascertain whether the value that was concluded as of February 1, 2018 is still valid. While
___________________________________________________________________________________
Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 6
we have not concluded at a new value, it is evident that further land development has
occurred and almost $3,000,000 in additional dollars have been spent to develop the
subject property. Also, additional homes have closed, additional homes have been
constructed and more homes are in escrow, all suggesting the subject’s value has not
decreased. In addition, it has been determined that the subject real estate market has
not experienced any significant negative changes since February 1, 2018. Based upon
our investigation, we have determined that the current market value is not less than the
concluded value as of February 1, 2018.
This Supplement is to be used in conjunction with the Original Appraisal and subject to
the attached Assumptions and Limiting Conditions and the Appraiser’s Certification.
Respectfully submitted,
KITTY SIINO & ASSOCIATES, INC.
Kitty S. Siino, MAI
California State Certified General
Real Estate Appraiser (AG004793)
___________________________________________________________________________________
Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 7
ASSUMPTIONS AND LIMITING CONDITIONS
1. This report might not include full discussions of the data, reasoning and analyses that
were used in the appraisal process to develop the appraiser’s opinion of value. Some
supporting documentation concerning the data, reasoning and analyses may be
retained in the appraiser’s files. The information contained in this report is specific
to the needs of the client and for the intended use stated in this report. The appraiser
is not responsible for unauthorized use of this report.
2. No responsibility is assumed for legal or title considerations. Title to the property is
assumed to be good and marketable unless otherwise stated in this report.
3. It is assumed that the subject property is subject to the special tax lien of CFD No.
16-I.
4. Responsible ownership and competent property management are assumed unless
otherwise stated in this report.
5. The information furnished by others is believed to be reliable; however, no warranty
is given for its accuracy.
6. All engineering is assumed to be correct. Any plot plans and illustrative material
used in this report are included only to assist the reader in visualizing the property
and may not be to scale.
7. It is assumed that there are no hidden or unapparent conditions of either property,
subsoil or structures that would render them more or less valuable. No responsibility
is assumed for such conditions or for arranging for engineering studies that may be
required to discover them.
8. It is assumed that there is full compliance with all applicable federal, state and local
environmental regulations and laws unless otherwise stated in this report.
9. It is assumed that all applicable zoning and use regulations and restrictions have
been complied with, unless nonconformity has been stated, defined and considered
in this appraisal report.
10. It is assumed that all required licenses, certificates of occupancy or other legislative
or administrative authority from any local, state or national governmental or private
entity or organization have been or can be obtained or renewed for any use on which
the value estimates contained in this report are based.
11. Any sketch or photograph included in this report may show approximate dimensions
and is included only to assist the reader in visualizing the properties. Maps,
photographs and exhibits found in this report are provided for reader reference
___________________________________________________________________________________
Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 8
purposes only. No guarantee regarding accuracy is expressed or implied unless
otherwise stated in this report. No survey has been made for the purpose of this
report.
12. It is assumed that the utilization of the land and improvements (if any) are within the
boundaries or property lines of the property described and that there is no
encroachment or trespass unless otherwise stated in this report.
13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any
comment by the appraiser that might suggest the possibility of the presence of such
substances should not be taken as confirmation of the presence of hazardous waste
and/or toxic materials. Such determination would require investigation by a qualified
expert relating to asbestos, urea-formaldehyde foam insulation or other potentially
hazardous materials that may affect the value of the property. The appraiser’s value
estimate is predicated on the assumption that there is no such material on or in the
property that would cause a loss in value unless otherwise stated in this report. No
responsibility is assumed for any environmental conditions or for any expertise or
engineering knowledge required to discover them. The appraiser’s descriptions and
resulting comments are the result of the routine observations made during the
appraisal process.
14. Proposed improvements, if any, are assumed to be completed in a good
workmanlike manner in accordance with the submitted plans and specifications.
15. The distribution, if any, of the total valuation in this report between land and
improvements applies only under the stated program of utilization. The separate
allocations for land and buildings, if any, must not be used in conjunction with any
other appraisal and are invalid if so used.
16. The Americans with Disabilities Act (“ADA”) became effective on January 26, 1992
and have been updated several times since then. The appraiser has made no
specific compliance survey and analysis of the property to determine whether they
conform to the various detailed requirements of the ADA, nor is the appraiser a
qualified expert regarding the requirements of the ADA. It is possible that a
compliance survey of the property, together with a detailed analysis of the
requirements of the ADA, could reveal that the property is not in compliance with
one or more of the requirements of the ADA. If so, this fact could have a negative
effect upon the value of the property. Since the appraiser has no direct evidence
relating to this issue, a possible noncompliance with requirements of the ADA in
estimating the value has not been considered.
17. It is assumed there are no environmental concerns that would slow or thwart
development of the subject properties and that the soils are adequate to support the
highest and best use conclusions.
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Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 9
18. It is assumed that the sales information provided by Shea Homes, KB Homes and
CalAtlantic Homes is true and accurate. We have reviewed and analyzed the sales
along with checking samples on various public record documents, when available,
and the information appears to be correct.
19. Possession of this report, or a copy thereof, does not carry with it the right of
publication. It may not be used for any purpose by any person other than the party
to whom it is addressed without the written consent of the appraiser, and in any
event, only with proper qualification and only in its entirety. Permission is given for
this appraisal to be published as a part of the Official Statement or similar document
for the CFD No. 16-I IA 1 Special Tax Bonds.
HYPOTHETICAL CONDITION
1. It is assumed that all improvements and benefits to the subject properties, which are
to be funded by the City of Chula Vista CFD No. 16-I IA 1 Special Tax Bond
proceeds, are completed and in place.
EXTRAORDINARY ASSUMPTIONS
1. It is assumed that the remaining costs to develop the various neighborhoods and
the planned non-residential property within the subject property are true and correct.
We have received summarized remaining costs provided by Meridian, the master
developer and the builders and/or their consultants. We have reviewed these costs
and they appear reasonable, however, we are not experts in the cost estimating field
and are relying on these costs in the valuation. If actual remaining costs differ, it
may change the value conclusions.
2. It is assumed that the master developer commences construction on Orion Park and
Strata Park prior to the builders reaching their applicable occupancy thresholds.
This is anticipated per the master builder.
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Supplement to Appraisal Report
City of Chula Vista CFD 16-I Improvement Area 1 (portion of Millenia)
Kitty Siino & Associates, Inc. 10
APPRAISER’S CERTIFICATION
The appraiser certifies that to the best of his knowledge and belief:
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal, unbiased, professional
analyses, opinions and conclusions.
3. The appraiser has no present or prospective interest in the property that is the subject of
this report, and no personal interest or bias with respect to the parties involved.
4. The appraiser’s compensation is not contingent upon the reporting of a predetermined
value or direction in value that favors the cause of the client, the amount of the value
estimate, the attainment of a stipulated result or the occurrence of a subsequent event.
5. This appraisal was not based on a requested minimum valuation, a specific valuation or
the approval of a loan.
6. The analyses, opinions and conclusions were developed, and this report was prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice.
7. Kitty Siino has made a personal inspection of the property that is the subject of this report.
8. Kitty Siino has performed appraisal services on the subject property in the past three years
as described within this Supplement. An Original Appraisal of the property was completed
with a February 1, 2018 date of value was completed.
9. No other appraisers have provided significant professional assistance to the persons
signing this report.
10. The reported analyses, opinions and conclusions were developed, and this report was
prepared, in conformity with the requirements of the Appraisal Institute’s Code of
Professional Ethics and Standards of Professional Appraisal Practice, which include the
Uniform Standards of Professional Appraisal Practice.
11. The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
12. As of the date of this report, Kitty Siino has completed the requirements of the continuing
education program of the Appraisal Institute.
Kitty S. Siino, MAI
State Certified General
Real Estate Appraiser (AG004793)
ADDENDA
Subject Property as of February 1, 2018 (from Original Report)
Description
No.
Lots
Ownership
Condition/Status
Element by Shea Homes (portion of Lot
1 of Map 16150)
Units 145-169, 171, 173-174 28 Individuals Completed Houses / Closed
Units 119-122 4 Shea Model Homes
Units 170, 172, 175 & 176 4 Shea Homes over 95% Complete (4
In escrow)
Units 131-144 14 Shea Homes U/C (12 In escrow)
Units 107-118 and 123-130 20 Shea Finished Lots (5 in escrow)
Subtotal Element 70
Z by Shea Homes (portion of Lot 1 of
Map 16150)
Units 41-42, 44-50, 61-70 and 101-106 25 Individuals Complete Houses / Closed
Units 95-96 2 Shea Model Homes
Unit 43 and 93-94 3 Shea Homes over 95% complete (0
in escrow). Lot 93/94 in model
complex and not released
Unit 75-87 13 Shea Homes U/C (10 in escrow)
Unit 1-40, 51-60, 71-74, 88-92 and 97-100 63 Shea Finished Lots (0 in escrow)
Subtotal Z 106
Skylar by KB Home (generally Lot 14 of
Map 16081)
Units Unit 5 and 6 2 KB Home Model Homes
Units 8-10 and 62-64 6 KB Home Homes U/C (1 in escrow)
Units 1-4, 7, 11-61, 65-79 71 KB Home Partially F/L (2 in escrow
Subtotal KB Home 79
CalAtlantic (generally Lot 17 of Map
16081)
Units 1-78 78 CalAtlantic Land under development
SLF IV – Millenia LLC
Lot 11 of Map 16081 60 SLF IV-
Millenia LLC
Superpad
Commercial Parcels
Lot 7 of Map 16081 N/A LMC-
Millenia Inv.
Co. LP
7.06 Acre Superpad
Lot 1 of Map 16081 N/A SLF IV-
Millenia LLC
10.93 Acre Superpad
Total Lots 393
Subject Property as of April 1, 2018
Description
No.
Lots
Ownership
Condition/Status
Element by Shea Homes (portion of Lot
1 of Map 16150)
Units 145-175 31 Individuals Completed Houses / Closed
Units 119-122 4 Shea Model Homes
Units 131-144 and 176 15 Shea Homes over 95% Complete (13
In escrow)
Units 107-118 and 123-130 20 Shea Homes U/C (8 In escrow)
Not applicable 0 Shea Finished Lots
Subtotal Element 70
Z by Shea Homes (portion of Lot 1 of
Map 16150)
Units 41-50, 61-70 and 101-106 26 Individuals Complete Houses / Closed
Units 95-96 2 Shea Model Homes
Unit 75-87 and 93-94 15 Shea Homes over 95% complete (13
in escrow). Lot 93/94 in model
complex and not released
Unit 23-26 and 35-40 10 Shea Homes U/C (7 in escrow)
Unit 1-22, 27-34, 51-60, 71-74, 88-92 and
97-100
53 Shea Finished Lots (0 in escrow)
Subtotal Z 106
Skylar by KB Home (generally Lot 14 of
Map 16081)
Units Unit 5 and 6 2 KB Home Model Homes
Units 7-12 and 61-70 16 KB Home Homes U/C (11 in escrow)
Units 1-4, 13-60, 71-79 61 KB Home Partially F/L (1 in escrow
Subtotal KB Home 79
CalAtlantic (generally Lot 17 of Map
16081)
Units 1-78 78 CalAtlantic Land under development
SLF IV – Millenia LLC
Lot 11 of Map 16081 60 SLF IV-
Millenia LLC
Superpad
Commercial Parcels
Lot 7 of Map 16081 N/A LMC-
Millenia Inv.
Co. LP
7.06 Acre Superpad
Lot 1 of Map 16081 N/A SLF IV-
Millenia LLC
10.93 Acre Superpad
Total Lots 393
Stradling Yocca Carlson & Rauth
Draft dated 5/4/18
1
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement dated as of June 1, 2018 (the “Disclosure
Agreement”) is executed and delivered by the Community Facilities District No. 16-I (Millenia) (the
“District”) and Spicer Consulting Group, LLC (the “Dissemination Agent”) in connection with the
execution and delivery of $___________ City of Chula Vista Community Facilities District No. 16-I
(Millenia) Improvement Area No. 1 2018 Special Tax Bonds (the “Bonds”). The Bonds are being
executed pursuant to a Bond Indenture dated as of June 1, 2018 (the “Indenture”), by and between
the District and U.S. Bank National Association, as trustee (the “Trustee”). The District covenants as
follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the District for the benefit of the Owners and Beneficial Owners of the
Bonds and in order to assist the Participating Underwriter in complying with the Rule (defined
below).
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in thi s
Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the District pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Agreement.
“Beneficial Owner” shall mean any person which has the power, directly or indirectly, to
vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding
Bonds through nominees, depositories or other intermediaries).
“City” means the City of Chula Vista, County of San Diego, California.
“Disclosure Representative” shall mean the City Manager, Assistant City Manager, Deputy
City Manager, Chief Financial Officer, Director of Finance /Treasurer of the City or the designee of
any one of such officers, or such other officer or employee as the City Manager shall designate in
writing from time to time.
“Dissemination Agent” shall mean Spicer Consulting Group, LLC, or any successor
dissemination agent designated in writing by the City Manager or the Director of Finance/Treasurer
of the District and which has filed with the District a written acceptance of such designation.
“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB.
“Improvement Area No. 1” shall mean Improvement Area No. 1 of the District.
“Listed Events” shall mean any of the events listed in Sections 5(a) and 5(b) of this
Disclosure Agreement.
“MSRB” shall mean the Municipal Securities Rulemaking Board and any successor entity
designated under the Rule as the repository for filings made pursuant to the Rule.
2
“Official Statement” shall mean the Official Statement relating to the Bonds dated May __,
2018.
“Participating Underwriter” shall mean Stifel, Nicolaus & Company, Incorporated.
“Repository” shall mean the MSRB or any other entity designated or authorized by the
Securities and Exchange Commission to receive reports pursuant to the Rule. Unless otherwise
designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to
be made through the EMMA website of the MSRB, currently located at http://emma.msrb.org.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“State” shall mean the State of California.
SECTION 3. Provision of Annual Reports.
(a) The District shall, or, upon delivery of the Annual Report to the Dissemination Agent
shall cause the Dissemination Agent to, not later than March 31 of each year, commencing March 31,
2019, provide to the Repository an Annual Report which is consistent with the requirements of
Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document
or as separate documents comprising a package, and may cross-reference other information as
provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of
the District, if any are prepared, may be submitted separately from the balance of the Annual Report
and later than the date required above for the filing of the Annual Report if they are not available by
that date. If the District’s fiscal year changes, it shall give notice of such change in the same manner
as for a Listed Event under Section 5(d). The District shall provide a written certification with each
Annual Report furnished to the Dissemination Agent to the effect that such Annual Report
constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent
may conclusively rely upon such certification of the District and shall have no duty or obligation to
review such Annual Report.
(b) Not later than five (5) days prior to the date for the filing of an Annual Report, the
District shall provide the Annual Report to the Dissemination Agent (if other than the District). If by
five (5) days prior to such date, the Dissemination Agent has not received a copy of the Annual
Report, the Dissemination Agent shall contact the District to inquire if the District is in compliance
with subsection (a).
(c) If the District is unable to provide to the Repository an Annual Report by the date
required in subsection (a), the Dissemination Agent shall send a notice to the Repository in the form
required by the Repository stating that the Annual Report has not been file d and, if provided by the
District, the date the District anticipates the filing to be made.
(d) The Dissemination Agent shall:
(i) determine each year prior to date for providing the Annual Report the
name and address of the Repository if other than the MSRB; and
3
(ii) file a report with the District certifying that the Annual Report has
been provided to the Repository pursuant to this Disclosure Agreement and stating the date it
was provided to the Repository.
SECTION 4. Content of Annual Reports. The District’s Annual Report shall contain or
include by reference the following:
(a) Financial Statements. The audited financial statements of the District for the prior
fiscal year, if any have been prepared and which, if prepared, shall be prepared in accord ance with
generally accepted accounting principles as promulgated to apply to governmental entities from time
to time by the Governmental Accounting Standards Board; provided, however, that the District may,
from time to time, if required by federal or state legal requirements, modify the basis upon which its
financial statements are prepared. In the event that the District shall modify the basis upon which its
financial statements are prepared, the District shall provide the information referenced in Sect ion
8(b) below regarding such modification. If the District is preparing audited financial statements and
such audited financial statements are not available by the time the Annual Report is required to be
filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements, and
the audited financial statements shall be filed in the same manner as the Annual Report when they
become available
(b) Financial and Operating Data. The Annual Report shall contain or incorporate by
reference the following:
(i) the principal amount of the Bonds outstanding as of the September 2
preceding the filing of the Annual Report;
(ii) the balance in each fund under the Indenture and the Reserve Requirement as
of the September 2 preceding the filing of the Annual Report;
(iii) any changes to the Improvement Area No. 1 Special Tax RMA approved or
submitted to the qualified electors for approval prior to the filing of the Annual Report;
(iv) an update of the estimated assessed value-to-lien ratio for Improvement Area
No. 1 substantially in the form of Table 4 in the Official Statement based upon the most
recent Special Tax levy preceding the date of the Annual Report and on the assessed values
of property for the current fiscal year;
(v) a statement regarding the amount of Special Tax prepayments, if any, in the
Fiscal Year for which the Annual Report is prepared;
(vi) the status of any foreclosure actions being pursued by the District in
Improvement Area No. 1 with respect to delinquent Special Taxes;
(vii) a statement as to whether the District participates in the Teeter Plan (as
defined in the Official Statement) and whether the City or the District has entered into an
agreement to sell delinquent installments of Special Taxes to a third party;
(viii) a table showing the total Special Taxes levied and the total Special Taxes
collected for the prior fiscal year and the total Special Taxes that, as of December 31, remain
4
unpaid for each prior fiscal year in which Special Taxes were levied and the number of
delinquent parcels in Improvement Area No. 1; and
(ix) any information not already included under (i) through (viii) above that the
District is required to file in its annual report pursuant to the provisions of the Mello -Roos
Community Facilities Act of 1982, as amended, with the California Debt and Investment
Advisory Commission.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the District or related public entities, which
have been submitted to each of the Repository or the Securities and Exchange Commission. If the
document included by reference is a final official statement, it must be available from the MSRB.
The District shall clearly identify each such other document so included by reference.
In the event that the District shall modify the basis upon which its financial statements are
prepared, the Dissemination Agent shall provide a notice of such modification to the Reposit ory,
including the information set forth in Section 8(b) below.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the District shall give, or cause the
Dissemination Agent to give, notice to the Repository of the occurrence of any of the following
events with respect to the Bonds in a timely manner not more than ten (10) business days after the
occurrence of the event:
1. principal and interest payment delinquencies;
2. unscheduled draws on debt service reserves reflecting financial difficulties;
3. unscheduled draws on credit enhancements reflecting financial difficulties;
4. substitution of credit or liquidity providers, or their failure to perform;
5. adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final determinations of taxability or of a Notice of Proposed Issue
(IRS Form 5701-TEB);
6. tender offers;
7. defeasances;
8. ratings changes; and
9. bankruptcy, insolvency, receivership or similar proceedings.
Note: for the purposes of the event identified in subparagraph (9), the event is
considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent or similar officer for an obligated person in a proceeding under the U.S.
Bankruptcy Code or in any other proceeding under state or federal law in which a
court or governmental authority has assumed jurisdiction over substantially all of the
5
assets or business of the obligated person, or if such jurisdiction has been assumed by
leaving the existing governmental body and officials or officers in possession but
subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement or liquidation by a
court or governmental authority having supervision or jurisdiction over substantially
all of the assets or business of the obligated person.
(b) Pursuant to the provisions of this Section 5, the District shall give, or cause to be
given, notice of the occurrence of any of the following events with respect to the Bonds, if material,
in a timely manner not more than ten (10) business days after the occurrence of such event:
1. unless described in paragraph 5(a)(5) above, notices or determinations by the
Internal Revenue Service with respect to the tax status of the Bonds or other
material events affecting the tax status of the Bonds;
2. the consummation of a merger, consolidation or acquisition involvi ng an
obligated person or the sale of all or substantially all of the assets of the
obligated person, other than in the ordinary course of business, the entry into
a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its
terms;
3. appointment of a successor or additional trustee or the change of the name of
a trustee;
4. nonpayment related defaults;
5. modifications to the rights of Owners of the Bonds;
6. Bond calls; and
7. release, substitution or sale of property securing repayment of the Bonds.
(c) Whenever the District obtains knowledge of the occurrence of a Listed Event under
5(b) above, the District shall as soon as possible determine if such event would be material under
applicable federal securities laws.
(d) If a Listed Event under Section 5(a) has occurred, or if the District determines that
knowledge of the occurrence of a Listed Event under 5(b) above would be material under applicable
federal securities laws, the District shall file a notice of such Listed Event with the Repository in a
timely manner not more than 10 business days after the event. Notwithstanding the foregoing, notice
of the Listed Event described in subsection (b)(6) need not be given under this section any earlier
than the notice (if any) of the underlying event is given to Owners of affected Bonds pursuant to the
Indenture.
(e) The District hereby agrees that the undertaking set forth in this Disclosure Agreement
is the responsibility of the District and that the Dissemination Agent shall not be responsible for
determining whether the District’s instructions to the Dissemination Agent under this Section 5
comply with the requirements of the Rule.
6
SECTION 6. Termination of Reporting Obligation. The District’s obligations under this
Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full
of all of the Bonds.
SECTION 7. Dissemination Agent. The District may, from time to time, appoint or engage
a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement,
and may discharge any such Dissemination Agent, with or without appointing a successor
Dissemination Agent. The Dissemination Agent may resign by providing thirty days written notice
to the District and the Trustee. The Dissemination Agent shall not be responsible for the content of
any report or notice prepared by the District and shall have no duty to review any information
provided to it by the District. The Dissemination Agent shall have no duty to prepare any
information report nor shall the Dissemination Agent be responsible for filing any report not
provided to it by the District in a timely manner and in a form suitable for filing.
SECTION 8. Amendment; Waiver.
(a) Notwithstanding any other provision of this Disclosure Agreement, the District may
amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived,
provided that the following conditions are satisfied:
(1) If the amendment or waiver related to the provisions of Sections 3(a), 4, or 5,
it may only be made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature or statu s of an obligated person with
respect to the Bonds, or the type of business conducted;
(2) The undertaking hereunder, as amended or taking into account such waiver,
would, in the opinion of nationally recognized bond counsel, have complied with the require ments of
the Rule at the time of the original execution and delivery of the Bonds, after taking into account any
amendments or interpretations of the Rule, as well as any change in circumstances; and
(3) The amendment or waiver either (i) is approved by the Owners of the Bonds
in the same manner as provided in the Indenture for amendments to the Indenture with the consent of
Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the
interests of the Owners or Beneficial Owners of the Bonds.
(b) In the event of any amendment or waiver of a provision of this Disclosure
Agreement, the District shall describe such amendment in the next Annual Report, and shall include,
as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on
the type (or, in the case of a change of accounting principles, on the presentation) of financial
information or operating data being presented by the District. In addition, if the amendment is
related to the accounting principles to be followed in preparing financial statements, (i) notice of
such change shall be given in the same manner as for a Listed Event under Section 5(a), and (ii) the
Annual Report for the year in which the change is made should pres ent a comparison (in narrative
form and also, if feasible, in quantitative form) between the financial statements as prepared on the
basis of the new accounting principles and those prepared on the basis of the former accounting
principles.
7
SECTION 9. Format of Filings with Repository. Any report or filing with the Repository
pursuant to this Disclosure Agreement must be submitted in electronic format, accompanied by such
identifying information as is prescribed by the Repository.
SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the District from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event, in
addition to that which is required by this Disclosure Agreement. If the District chooses to include any
information in any Annual Report or notice of occurrence of a Li sted Event in addition to that which
is specifically required by this Disclosure Agreement, the District shall have no obligation hereunder
to update such information or include it in any future Annual Report or notice of occurrence of a
Listed Event.
SECTION 11. Default. In the event of a failure of the District to comply with any provision
of this Disclosure Agreement, any Owner or Beneficial Owner of the Bonds may take such actions as
may be necessary and appropriate, including seeking mandate or specific performance by court order,
to cause the District to comply with its obligations under this Disclosure Agreement. A default under
this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole
remedy under this Disclosure Agreement in the event of any failure of the District to comply with
this Disclosure Agreement shall be an action to compel performance and the District shall have no
monetary liability to any person as a result of any failure to comply with the ter ms of this Disclosure
Agreement.
SECTION 12. Duties, Immunities and Liabilities of Dissemination Agent . The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Agreement, and the District agrees, to the extent permitted by law, to indemnify and save the
Dissemination Agent, its officers, directors, employees and agents, harmless against any loss,
expense and liabilities which it may incur arising out of or in the exercise or performance of its
powers and duties hereunder, including the costs and expenses (including attorney’s fees) of
defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s
negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the
District for its services provided hereunder in accordance with its schedule of fees as amended from
time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent
in the performance of its duties hereunder. In performing its duties hereunder, the Dissemination
Agent shall not be deemed to be acting in any fiduciary capacity for the District, the Owners, or any
other party. The obligations of the District under this Section shall survive resignation or removal of
the Dissemination Agent and payment of the Bonds.
SECTION 13. Notices. Any notices or communications to or among any of the parties to
this Disclosure Agreement may be given as follows:
To the District: Community Facilities District No. 16-I (Millenia)
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attention: Director of Finance/Treasurer
8
To the Dissemination Agent: Spicer Consulting Group, LLC
41619 Margarita Road, Suite 101
Temecula, CA 92591
SECTION 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the City, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners
from time to time of the Bonds, and shall create no rights in any other person or entity.
SECTION 15. Counterparts. This Disclosure Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute
and be but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
9
SECTION 16. Signatures. This Disclosure Agreement has been executed by the
undersigned on the date hereof, and such signature by the City binds the City to the undertaking
herein provided and such signature by the Dissemination Agent binds the Dissemination Agent to the
terms hereof applicable to it.
CITY OF CHULA VISTA
By:
Director of Finance/Treasurer
SPICER CONSULTING GROUP, LLC, as
Dissemination Agent
By:
Authorized Officer
Stradling Yocca Carlson & Rauth
Draft dated 5/4/18
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. PRELIMINARY OFFICIAL STATEMENT DATED MAY __, 2018
NEW ISSUE—BOOK-ENTRY-ONLY NO RATING
In the opinion of Best Best & Krieger, LLP San Diego, California (“Bond Counsel”), subject to certain qualifications described in this Official
Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain coven ants and
requirements described herein, the interest on the Bonds is excluded from gross income for federal income tax purposes an d is not an item of tax preference for
purposes of the federal alternative minimum tax. In the further opinion of Bond Counsel, interest on the Bonds is exempt fro m California personal income tax.
See “TAX MATTERS” herein.
$13,200,000*
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
Dated: Delivery Date Due: September 1, as shown on the inside cover page
This Official Statement describes bonds that are being issued by Community Faciliti es District No. 16-I (Millenia) (the “District”) with respect to
Improvement Area No. 1 therein (“Improvement Area No. 1”). The City of Chula Vista Community Facilities District No. 16-I (Millenia) Improvement Area
No. 1 2018 Special Tax Bonds (the “Bonds”) are being issued by the District to (a) pay the costs of forming the District; (b) pay the cost and expense of
acquisition and construction of certain public facilities required in connection with the development of the District; (c) fund capitalized interest on a portion of
the Bonds through September 1, 2019; (d) fund a Reserve Fund securing the Bonds; (e) pay costs of issuance of the Bonds; and (f) make an initial deposit to the
Administrative Expense Fund.
The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the
Government Code of the State of California), and pursuant to Resolution No. ______ adopted by the City Council of the City of Chula Vista (the “City”), acting
as the legislative body of the District and a Bond Indenture, dated as of June 1, 2018 (the “Indenture”), by and between the District and U.S. Bank National
Association, as Fiscal Agent (the “Fiscal Agent”).
The Bonds are limited obligations of the District and are payable solely from revenues derived from certain annual Special Taxes (as defined
herein) to be levied on and collected from the owners of parcels within Improvement Area No. 1 subject to the Special Taxes and from certain other
funds pledged under the Indenture, all as further described herein. The Special Taxes are to be levied according to the rate and method of
apportionment approved by the City Council of the City and the qualified electors within Improvement Area No. 1. See “SOURCES OF PAYMENT
FOR THE BONDS — Special Taxes.” The City Council of the City is the legislative body of the District.
The Bonds are issuable in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of T he Depository Trust
Company, New York, New York (“DTC”). Individual purchases of the Bonds may be made in principal amounts of $5,000 and integral multiples thereof and
will be in book-entry form only. Purchasers of Bonds will not receive certificates representing their ben eficial ownership of the Bonds but will receive credit
balances on the books of their respective nominees. Interest on the Bonds will be payable semiannually on each March 1 and September 1, commencing
September 1, 2018. The Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described herein.
Principal of and interest on the Bonds will be paid by the Fiscal Agent to DTC for subsequent disbursement to DTC Participants who will remit such payments
to the beneficial owners of the Bonds. See “THE BONDS — General Provisions” and APPENDIX H — “BOOK-ENTRY ONLY SYSTEM” herein.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT, THE CITY OF CHULA VISTA, THE STATE OF
CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET TAXES
(AS DEFINED HEREIN), NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT
GENERAL OR SPECIAL OBLIGATIONS OF THE CITY OR GENERAL OBLIGATIONS OF THE DISTRICT BUT ARE LIMITED OBLIGATIONS OF
THE DISTRICT PAYABLE SOLELY FROM SPECIAL TAXES TO BE LEVIED IN IMPROVEMENT AREA NO. 1 OF THE DISTRICT AND CERTAIN
OTHER AMOUNTS HELD UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.
The Bonds are subject to optional redemption, extraordinary redemption from prepaid Special Taxes, and mandatory sinking fund redemption prior to
maturity as set forth herein. See “THE BONDS — Redemption” herein.
THE BONDS ARE NOT RATED BY ANY RATING AGENCY, AND INVESTMENT IN THE BONDS INVOLVES SIGNIFICANT RISKS
THAT ARE NOT APPROPRIATE FOR CERTAIN INVESTORS. CERTAIN EVENTS COULD AFFECT THE ABILITY OF THE DISTRICT TO
PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS WHEN DUE. SEE THE SECTION OF THIS OFFICIAL STATEMENT ENTITLED
“SPECIAL RISK FACTORS” FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED, IN ADDITION TO THE
OTHER MATTERS SET FORTH HEREIN, IN EVALUATING THE INVESTMENT QUALITY OF THE BONDS.
This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue.
Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision.
MATURITY SCHEDULE
(See Inside Cover Page)
The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Best Best & Krieger LLP,
San Diego, California, Bond Counsel, and subject to certain other conditions. Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California is serving as Disclosure Counsel to the District with respect to the Bonds. Certain legal matters will be passed on for the City and the District by the
Office of the City Attorney, and for the Underwriter by Jones Hall, A Professional Law Corporation, San Francisco, California, as counsel to the Underwriter. It
is anticipated that the Bonds in book-entry form will be available for delivery through the facilities of DTC on or about June __, 2018.
[STIFEL LOGO]
Dated: May __, 2018
* Preliminary, subject to change.
$13,200,000*
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
MATURITY SCHEDULE
Base CUSIP No.†: _________
Serial Bonds
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP No.†
Term Bonds
$_________ _____% Term Bonds due September 1, 2048, Yield: _____% Price: _____ CUSIP No. † __________
* Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global
Services, managed by S&P Global Market Intelligence on behalf of The American Bankers Association. This information is
not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP
numbers have been assigned by an independent company not affiliated with the City, the District or the Underwriter and are
included solely for the convenience of the registered owners of the applicable Bonds. None of the City, the District or the
Underwriter is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their
correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being
changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding
in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement
by investors that is applicable to all or a portion of certain maturities of the Bonds.
CITY OF CHULA VISTA
STATE OF CALIFORNIA
CITY COUNCIL
Serving as the Legislative Body of
Community Facilities District No. 16-I (Millenia)
Mary Casillas Salas, Mayor
John McCann (First District)
Patricia Aguilar (Second District)
Stephen Padilla (Third District)
Mike Diaz (Fourth District)
CITY OFFICIALS
Gary Halbert, City Manager
Maria Kachadoorian, Assistant City Manager
Glen Googins, City Attorney
Kerry K. Bigelow, MMC, City Clerk
David Bilby, Director of Finance/Treasurer
BOND COUNSEL
Best Best & Krieger LLP
San Diego, California
DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth,
a Professional Corporation,
Newport Beach, California
MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates Inc.
Irvine, California
SPECIAL TAX CONSULTANT
Willdan Financial Services
Temecula, California
REAL ESTATE APPRAISER
Kitty Siino & Associates, Inc.
Tustin, California
MARKET ABSORPTION ANALYST
Meyers Research, LLC
Solana Beach, California
FISCAL AGENT
U.S. Bank National Association
Los Angeles, California
Except where otherwise indicated, all information contained in this Official Statement has been provided
by the City and the District. No dealer, broker, salesperson or other person has been authorized by the City, the
District, the Fiscal Agent or the Underwriter to give any information or to make any representations in connection
with the offer or sale of the Bonds other than those contained in this Official Statement and, if given or made, such
other information or representations must not be relied upon as having been authorized by the City, the District, the
Fiscal Agent or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such
person to make such an offer, solicitation or sale.
This Official Statement is not to be construed as a contract with the purchasers or owners of the Bonds.
Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or
not expressly so described in this Official Statement, are intended solely as such and are not to be construed as
representations of fact. This Official Statement, including any supplement or amendment to this Official Statement,
is intended to be deposited with the Electronic Municipal Market Access System of the Municipal Securities
Rulemaking Board, which can be found at www.emma.msrb.org.
The information set forth in this Official Statement which has been obtained from third party sources is
believed to be reliable, but such information is not guaranteed as to accuracy or completeness by the City or the
District. The information and expressions of opinion in this Official Statem ent are subject to change without notice,
and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the City or the District or any other parties
described in this Official Statement since the date of this Official Statement. All summaries of the Indenture or
other documents are made subject to the provisions of such documents respectively and do not purport to be
complete statements of any or all of such provisions. Reference is made by this Official Statement to such
documents on file with the City for further information. While the City maintains an internet website for various
purposes, none of the information on that website is incorporated by reference herein or intended to assist investors
in making any investment decision or to provide any continuing information with respect to the Bonds or any other
bonds or obligations of the City. Any such information that is inconsistent with the information set forth in this
Official Statement should be disregarded.
The Underwriter has provided the following sentence for inclusion in this Official Statement:
The Underwriter has reviewed the information in this Official Statement in accordance
with, and as a part of, its responsibilities to investors under the federal securities laws as applied to
the facts and circumstances of this transaction, but the Underwriter does not guarantee the
accuracy or completeness of such information.
Certain statements included or incorporated by reference in this Official Statement constitute
“forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of
1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the
United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology
used such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words. Such forward-looking
statements include, but are not limited to, certain statements contained in the information under the caption
“IMPROVEMENT AREA NO. 1” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN
SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE
FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT
BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
TABLE OF CONTENTS
Page
i
INTRODUCTION ................................................................................................................................................ 1
The District and Improvement Area No. 1 ..................................................................................................... 1
Property Ownership and Development Status ............................................................................................... 3
Forward Looking Statements ......................................................................................................................... 4
Sources of Payment for the Bonds ................................................................................................................. 4
Appraisal Report and Supplement to Appraisal Report ................................................................................. 6
Description of the Bonds ................................................................................................................................ 6
Tax Exemption ............................................................................................................................................... 7
Professionals Involved in the Offering .......................................................................................................... 7
Continuing Disclosure.................................................................................................................................... 7
Bond Owners’ Risks ...................................................................................................................................... 8
Other Information .......................................................................................................................................... 8
ESTIMATED SOURCES AND USES OF FUNDS ............................................................................................ 9
THE BONDS ........................................................................................................................................................ 9
General Provisions ......................................................................................................................................... 9
Debt Service Schedule ................................................................................................................................. 10
Redemption .................................................................................................................................................. 11
Registration, Transfer and Exchange ........................................................................................................... 13
SOURCES OF PAYMENT FOR THE BONDS ................................................................................................ 13
Limited Obligations ..................................................................................................................................... 13
Special Taxes ............................................................................................................................................... 13
Reserve Fund ............................................................................................................................................... 21
Issuance of Parity Bonds for Refunding Only ............................................................................................. 21
IMPROVEMENT AREA NO. 1......................................................................................................................... 21
General Description of the District and Improvement Area No. 1 .............................................................. 21
Description of Authorized Facilities ............................................................................................................ 22
Direct and Overlapping Indebtedness .......................................................................................................... 23
Expected Tax Burden ................................................................................................................................... 24
Market Absorption Study ............................................................................................................................. 26
Appraisal Report and Supplement to Appraisal Report ............................................................................... 27
Appraised Value-To-Lien Ratios ................................................................................................................. 30
Largest Taxpayers ........................................................................................................................................ 32
Delinquency History .................................................................................................................................... 32
PROPERTY OWNERSHIP AND THE DEVELOPMENT ............................................................................... 32
General Description of the Development ..................................................................................................... 32
SLF and the Contracted Project Manager .................................................................................................... 34
History of Property Tax Payments; Loan Defaults; Litigation; Bankruptcy ................................................ 34
The Development ......................................................................................................................................... 35
Builders in Improvement Area No. 1 ........................................................................................................... 38
Shea Homes Development and Financing Plan ........................................................................................... 40
KB Home California Development and Financing Plan .............................................................................. 43
CalAtlantic Development and Financing Plan ............................................................................................. 45
LMC Millenia Company Development and Financing Plan ........................................................................ 47
SPECIAL RISK FACTORS ............................................................................................................................... 48
Risks of Real Estate Secured Investments Generally ................................................................................... 49
Tax Cuts and Jobs Act ................................................................................................................................. 49
Concentration of Ownership ........................................................................................................................ 49
Limited Obligations ..................................................................................................................................... 50
Insufficiency of Special Taxes ..................................................................................................................... 50
Failure to Develop Properties ...................................................................................................................... 51
TABLE OF CONTENTS
(continued)
Page
ii
Natural Disasters .......................................................................................................................................... 52
Endangered/Threatened Species .................................................................................................................. 53
Hazardous Substances .................................................................................................................................. 53
Payment of the Special Tax is not a Personal Obligation of the Property Owners ...................................... 54
Property Values ............................................................................................................................................ 54
Parity Taxes and Special Assessments ......................................................................................................... 55
Disclosures to Future Purchasers ................................................................................................................. 55
Special Tax Delinquencies ........................................................................................................................... 56
FDIC/Federal Government Interests in Properties ....................................................................................... 56
Bankruptcy and Foreclosure ........................................................................................................................ 57
No Acceleration Provision ........................................................................................................................... 58
Loss of Tax Exemption ................................................................................................................................ 59
Limited Secondary Market ........................................................................................................................... 59
Proposition 218 ............................................................................................................................................ 59
Shapiro Decision .......................................................................................................................................... 60
Ballot Initiatives ........................................................................................................................................... 61
Limitations on Remedies ............................................................................................................................. 61
CONTINUING DISCLOSURE .......................................................................................................................... 61
District Continuing Disclosure ..................................................................................................................... 61
Developer Continuing Disclosure ................................................................................................................ 62
TAX MATTERS................................................................................................................................................. 62
LEGAL MATTERS ............................................................................................................................................ 63
ABSENCE OF LITIGATION ............................................................................................................................ 64
NO RATING ...................................................................................................................................................... 64
UNDERWRITING ............................................................................................................................................. 64
FINANCIAL INTERESTS ................................................................................................................................. 64
PENDING LEGISLATION ................................................................................................................................ 64
ADDITIONAL INFORMATION ....................................................................................................................... 64
APPENDIX A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ................................ A-1
APPENDIX B-1 APPRAISAL REPORT ...................................................................................................... B-1-1
APPENDIX B-2 SUPPLEMENT TO APPRAISAL REPORT ..................................................................... B-2-1
APPENDIX C FORM OF OPINION OF BOND COUNSEL ....................................................................... C-1
APPENDIX D GENERAL INFORMATION CONCERNING THE REGION ............................................ D-1
APPENDIX E SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE ....................... E-1
APPENDIX F FORM OF DISTRICT CONTINUING DISCLOSURE AGREEMENT ...............................F-1
APPENDIX G FORMS OF DEVELOPERS CONTINUING DISCLOSURE AGREEMENTS .................. G-1
APPENDIX H BOOK-ENTRY ONLY SYSTEM ........................................................................................ H-1
APPENDIX I EXECUTIVE SUMMARY OF MARKET ABSORPTION STUDY .................................... I-1
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1
$13,200,000*
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
2018 SPECIAL TAX BONDS
INTRODUCTION
The purpose of this Official Statement, which includes the cover page, the table of contents and the
appendices (collectively, the “Official Statement”), is to provide certain information concerning the issuance by
Community Facilities District No. 16-I (Millenia) (the “District”) of its Community Facilities District No. 16-I
(Millenia) Improvement Area No. 1 2018 Special Tax Bonds (the “Bonds”) in the aggregate principal amount of
$13,200,000*. The proceeds of the Bonds will be used to (a) pay the costs of forming the District; (b) pay the cost
and expense of acquisition and construction of certain public facilities required in connection with the
development of the District; (c) fund capitalized interest on a portion of the Bonds through September 1, 2019; (d)
fund a Reserve Fund securing the Bonds; (e) pay costs of issuance of the Bonds; and (f) make an initial deposit to
the Administrative Expense Fund (as defined herein). See “ESTIMATED SOURCES AND USES OF FUNDS.”
The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as
amended (Sections 53311 et seq. of the Government Code of the State of California) (the “Act”), and pursuant to
Resolution No. ______ adopted by the City Council of the City of Chula Vista (the “City Council”), acting as the
legislative body of the District, on May 15, 2018 and a Bond Indenture dated as of June 1, 2018 (the “Indenture”),
by and between the District and U.S. Bank National Association, as Fiscal Agent (the “Fiscal Agent”).
The Bonds are secured under the Indenture by a pledge of and lien upon Net Taxes (as defined herein)
levied on parcels within Improvement Area No. 1 (as defined and further described below) of the District and all
moneys in the funds and accounts (other than the Project Fund, the Rebate Fund and the Administrative Expense
Fund) established under and as described in the Indenture. See “SOURCES OF PAYMENT FOR THE BONDS.”
The Bonds are being issued and delivered pursuant to the provisions of the Act, Ordinance No. 2730
adopted by the City Council (the “CFD Ordinance”) and the Indenture. The Bonds are being sold to the
Underwriter pursuant to a Bond Purchase Agreement between the Underwriter and the District. See “THE
BONDS — General Provisions” and “UNDERWRITING” herein.
This introduction is not a summary of this Official Statement. It is only a brief description of and guide
to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the
documents summarized or described herein. A full review should be made of the entire Official Statement. The
sale and delivery of Bonds to potential investors is made only by means of the entire Official Statement. All
capitalized terms used in this Official Statement and not defined shall have the meaning set forth in APPENDIX E
— “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE — DEFINITIONS” herein.
The District and Improvement Area No. 1
General. The District is located in the eastern portion of the City of Chula Vista (the “City”),
approximately 8 miles southeast of the City of San Diego, within the master planned community known as “Otay
Ranch.” The District consists of approximately 67 gross acres of which 42 acres are within Improvement Area
No. 1 (“Improvement Area No. 1”) therein and 25 acres are within Improvement Area No. 2 (“Improvement Area
No. 2”) therein. The District is a portion of a larger development within Otay Ranch known as “Millenia.” The
Millenia project is located south of Birch Road, east of State Route 125, and west of Eastlake Parkway. The
Millenia project covers approximately 230 gross acres and is planned for a mixed-use development consisting of
* Preliminary, subject to change.
2
both rental and for-sale residential units and a maximum of 3.4 million square feet of commercial uses, including
a hotel, retail space and a business district of up to two million square feet of office space. The Millenia project
is expected to be served by a number of parks and a civic core including library facilities, an elementary school
and a City fire station. Existing developments within Millenia include apartments, attached and detached
condominiums and a hotel, which is under construction. See “IMPROVEMENT AREA NO. 1 — General
Description of Millenia, the District and Improvement Area No. 1” for a description of the completed and active
developments within the Millenia community as a whole.
Improvement Area No. 1 of the District is made up of six separate project areas, four of which are
planned for residential uses and two of which are planned for commercial uses. 393 residential units and over 1
million square feet of commercial development are planned within Improvement Area No. 1. Approximately
42 acres of property in Improvement Area No. 1 are expected to be subject to the Special Tax (as defined herein)
at build-out.
SLF – IV Millenia LLC, a Delaware limited liability company (“SLF”), is the master developer within
the District. SLF has contracted with Meridian Development (“Meridian”), a land development and homebuilding
company, to manage the development of the property within Millenia, including the District. SLF and Meridian
are not affiliated entities. Meridian does not own any property within Improvement Area No. 1. See
“PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
Formation Proceedings. The District was formed and Improvement Area No. 1 and Improvement Area
No. 2 were designated therein, by the City pursuant to the Act and the CFD Ordinance. The District constitutes a
governmental entity separate and apart from the City.
The Act was enacted by the California legislature to provide an alternative method of financing certain
public capital facilities and services, especially in developing areas of the State. Any local agency (as defined in
the Act) may establish a community facilities district to provide for and finance the cost of eligible public
facilities and services. Generally, the legislative body of the local agency which forms a community facilities
district acts on behalf of such district as its legislative body. Subject to approval by two-thirds of the votes cast at
an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue
bonds for a community facilities district and may levy and collect a special tax within such district or any
improvement area designated therein to repay such indebtedness. The City Council adopted the CFD Ordinance
to make certain provisions applicable to the formation of a community facilities district in addition to those set
forth in the Act.
Pursuant to the Act and the CFD Ordinance, on August 2, 2016, the City Council adopted Resolution
No. 2016-154 (the “Resolution of Intention”), stating its intention to form the District, designate Improvement
Area No. 1 and Improvement Area No. 2 therein, and to authorize the levy of a special tax on the taxable property
within each of Improvement Area No. 1 and Improvement Area No. 2. On August 2, 2016, the City Council also
adopted Resolution No. 2016-155, stating its intention to incur bonded indebtedness in an aggregate principal
amount, with respect to Improvement Area No. 1, not to exceed $20,000,000, for the purpose of financing the
acquisition, construction, expansion, improvement, or rehabilitation of certain public facilities to serve the area
within the District and its neighboring areas. See “IMPROVEMENT AREA NO. 1 — Description of Authorized
Facilities.”
Subsequent to a noticed public hearing, the City Council adopted Resolution Nos. 2016-184 and 2016-
185 on September 13, 2016 (the “Resolution of Formation” and the “Resolution to Incur Debt,” respectively)
which established the District, designated Improvement Area No. 1 and Improvement Area No. 2 therein,
authorized the levy of a special tax within each of Improvement Area No. 1 and Improvement Area No. 2,
determined the necessity to incur bonded indebtedness within the District with respect to each of Improvement
Area No. 1 and Improvement Area No. 2, and called an election within each of Improvement Area No. 1 and
Improvement Area No. 2 on the propositions of incurring bonded indebtedness, levying a special tax and setting
an appropriations limit within the District.
3
On September 13, 2016, an election was held within Improvement Area No. 1 at which the landowners
within Improvement Area No. 1 eligible to vote approved the issuance of bonds for the District with respect to
Improvement Area No. 1 in an amount not to exceed $20,000,000. A Notice of Special Tax Lien for
Improvement Area No. 1 was recorded in the office of the County Recorder of the County of San Diego (the
“County”) on September 22, 2016 as Document No. 2016-0502330. On September 20, 2016, the City Council,
acting as the legislative body of the District, adopted Ordinance No. 3375 (the “Special Tax Ordinance”) which
authorizes the levy within Improvement Area No. 1 of a special tax pursuant to the Rate and Method of
Apportionment of Special Tax for Improvement Area No. 1 approved at the September 13, 2016 election (the
“Rate and Method”), a copy of which is attached hereto as APPENDIX A.
For a summary of the Rate and Method, including certain circumstances under which the Special Tax
may be prepaid, in whole or in part for a parcel, see “SOURCES OF PAYMENT FOR THE BONDS — Special
Taxes.” If Special Taxes are prepaid, such prepayments would be applied to the redemption of Bonds in
accordance with the Indenture. See “THE BONDS — Redemption — Extraordinary Redemption from Special
Tax Prepayments.”
Property Ownership and Development Status
The District and Improvement Area No. 1 therein encompasses a portion of the Millenia project within
the Otay Ranch master planned community of the City. The area within the Millenia project has been divided into
separate project areas, six of which are included in Improvement Area No. 1. Four of the project areas within
Improvement Area No. 1 are planned for for-sale market-rate residential projects totaling 393 residential units and
two are planned for commercial uses. The project areas within Improvement Area No. 1 originally consisted of
six separate assessor’s parcels, certain of which have been further subdivided in accordance with the development
plans for such parcels as further described herein.
SLF has conveyed three of the four original assessor’s parcels within Improvement Area No. 1 planned
for residential development to Shea Homes Limited Partnership, a California limited partnership (“Shea Homes”),
CalAtlantic Group, Inc., a Delaware corporation (“CalAtlantic”) and KB HOME California LLC, a Delaware
limited liability company (“KB Home California”), respectively.
There are two project areas within Improvement Area No. 1 planned for commercial uses. LMC Millenia
Investment Company, L.P. (“LMC Millenia Company”) has acquired one parcel corresponding with one of such
commercial project areas from SLF and is under contract to purchase the second from SLF (which sale is
expected to close in July 2018).
The remaining project area in Improvement Area No. 1 is owned by SLF and is planned for 60 residential
units, which SLF expects to convey to a residential builder by the end of 2018. See “PROPERTY OWNERSHIP
AND THE DEVELOPMENT.”
The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) to be installed by SLF to
serve the property within Improvement Area No. 1 is substantially complete. The major arterial roads which
border the Millenia project are Birch Road and Eastlake Parkway. The roads within the Millenia project from
which the property included in Improvement Area No. 1 can be accessed are complete. The property within
Improvement Area No. 1 varies from mass-graded land to completed homes. The remaining in-tract
improvements are expected to be constructed by the homebuilders and the commercial property developer as
development within their respective projects is completed.
SLF is responsible for constructing six parks within the Millenia project pursuant to the Park Agreement
(as defined herein) with the City. The issuance of certificates of occupancy for the residential projects being
constructed by Shea Homes and KB Home California are limited to certain thresholds until certain requirements
with respect to construction of two of these park sites are satisfied. See “PROPERTY OWNERSHIP AND THE
DEVELOPMENT — The Development — Infrastructure Requirements and SLF Financing Plan.”
4
As of February 1, 2018, the status of the residential developments owned by homebuilders within
Improvement Area No. 1 were as follows: (i) Shea Homes had completed and conveyed 53 homes within
Improvement Area No. 1 to individual homeowners, owned six completed model homes, had 34 homes under
construction (seven of which were over 95% complete) and owned 83 finished lots; (ii) KB Home California
owned two completed model homes, had six homes under construction and owned 71 partially finished lots; and
(iii) CalAtlantic owned one assessor’s parcel planned for 78 attached townhomes for which grading had
commenced. As of such date, the assessor’s parcel owned by LMC Millenia Company had been finish graded,
including the below-grade excavation for a proposed parking structure. Such assessor’s parcel is planned for an
office campus with two buildings totaling approximately 318,000 square feet of leasable space, an amenity
building of approximately 6,100 square feet and a parking garage of approximately 401,760 square feet.
As of February 1, 2018, SLF owned one assessor’s parcel under contract to be sold to LMC Millenia
Company planned for commercial use (which sale is expected to close in July 2018) and one assessor’s parcel
planned for a development of 60 residential units, which SLF expects to convey to a homebuilder by the end of
2018. As of such date, such parcels owned by SLF were in a mass graded condition. The assessor’s parcel under
contract to be sold to LMC Millenia Company by SLF is expected to be developed into an office campus with
four buildings with approximately 700,000 square feet of leasable space.
Between February 1, 2018 and April 1, 2018, additional homes were sold and closed, sold and placed in
escrow and under construction. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT” herein.
Forward Looking Statements
Certain statements included or incorporated by reference in this Official Statement constitute “forward-
looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995,
Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United
States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used
such as a “plan,” “expect,” “estimate,” “project,” “budget” or similar words. Such forward-looking statements
include, but are not limited to certain statements contained in the information under the captions
“IMPROVEMENT AREA NO. 1,” “PROPERTY OWNERSHIP AND THE DEVELOPMENT” and
APPENDIX B-1 — “APPRAISAL REPORT” and APPENDIX B-2 — “SUPPLEMENT TO APPRAISAL
REPORT.”
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN
SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FO RWARD-LOOKING
STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE
FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.
Sources of Payment for the Bonds
Limited Obligations. The Bonds and any Parity Bonds (as defined herein) are not general or special
obligations of the City nor general obligations of the District, but are special obligations of the District payable
solely from Net Taxes (as defined herein) and certain amounts held under the Indenture as more fully described
herein. The interest on and principal of and redemption premiums, if any, on the Bonds and any Parity Bonds are
payable solely from the Net Taxes (as defined herein), and amounts on deposit in certain funds and accounts
under the Indenture, including, to the extent necessary, from the moneys on deposit in the Reserve Fund. As
described herein, the Special Taxes are collected along with ad valorem property taxes on the tax bills mailed to
property owners by the Office of the Treasurer-Tax Collector of the County. Although the Special Taxes will
constitute a lien on the property subject to taxation in Improvement Area No. 1, they will not constitute a personal
indebtedness of the owners of such property. There is no assurance that such owners will be financially able to
5
pay the annual Special Taxes or that they will pay such taxes even if they are financially able to do so. Except for
the Special Taxes, no other taxes are pledged to the payment of the Bonds and any Parity Bonds.
Special Tax. As used in this Official Statement, the terms “Special Tax” and “Special Taxes” is the
“Improvement Area No. 1 Special Tax,” which term is defined in the Indenture as the Special Tax authorized to
be levied in Improvement Area No. 1 pursuant to the Act and the Rate and Method. Under the Indenture, the
District will pledge to repay the Bonds and any Parity Bonds from the “Net Improvement Area No. 1 Special Tax
Revenues” (referred to in this Official Statement as the “Net Taxes”), which term is defined in the Indenture to
mean the Improvement Area No. 1 Special Tax Revenues minus amounts applied annually to fund the
Administrative Expense Requirement. The term “Improvement Area No. 1 Special Tax Revenues” is defined in
the Indenture as: (a) the proceeds of the Special Tax levied by the District within Improvement Area No. 1 of the
District pursuant to the Rate and Method and received by the District, and (b) the Delinquency Proceeds.
“Delinquency Proceeds” is defined in the Indenture as amounts collected from the redemption of delinquent
Special Taxes including the penalties and interest thereon and from the sale of property sold as a result of the
foreclosure of the lien of the Special Tax resulting from the delinquency. See “SOURCES OF PAYMENT FOR
THE BONDS — Special Taxes” and APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF
SPECIAL TAX.”
The Special Taxes are the primary security for the repayment of the Bonds and any Parity Bonds. In the
event that the Special Taxes are not paid when due, the only sources of funds available to pay the debt service on
the Bonds and any Parity Bonds are amounts held by the Fiscal Agent in the funds and accounts under the
Indenture (other than the Project Fund, the Rebate Fund and the Administrative Expense Fund). See “SOURCES
OF PAYMENT FOR THE BONDS — Reserve Fund.”
Foreclosure Proceeds. The District will covenant in the Indenture for the benefit of the owners of the
Bonds and Parity Bonds that it will commence and diligently pursue to completion, judicial foreclosure
proceedings against (i) properties under common ownership with delinquent Special Taxes in the aggregate of
$5,000 or more by October 1 following the close of the Fiscal Year in which the Special Taxes were due, and (ii)
against all properties with delinquent Special Taxes in the aggregate of $5,000 or more by October 1 following the
close of any Fiscal Year if the amount of the Reserve Fund is less than the Reserve Requirement.
The District may, but shall not be obligated to, advance funds from any source of legally available funds
in order to maintain the Reserve Fund at the Reserve Requirement or to avoid a default in payment on the Bonds
and any Parity Bonds. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes” herein and
APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — COVENANTS AND
WARRANTY — Covenants — Commence Foreclosure Proceedings.” There is no assurance that the property
within Improvement Area No. 1 can be sold at foreclosure for the appraised value described herein, or for a price
sufficient to pay the principal of and interest on the Bonds in the event of a default in payment of Special Taxes
by the current landowners or future landowners within Improvement Area No. 1. See “SPECIAL RISK
FACTORS — Property Values” and APPENDIX B-1 — “APPRAISAL REPORT” and APPENDIX B-2 —
“SUPPLEMENT TO APPRAISAL REPORT.”
Special Taxes Are Not Within Teeter Plan. Section 4701 et seq. of the California Revenue and Taxation
Code allows a county to adopt a tax distribution procedure which distributes taxes to taxing agencies on the basis
of the amount of the tax levy, rather than on the basis of actual tax collections. This mechanism is known as a
“Teeter Plan.” The Special Taxes are not subject to the County’s Teeter Plan. The amount of Special Taxes
available to pay debt service on the Bonds will depend on actual tax collections.
Parity Bonds and Liens. Under the terms of the Indenture, the District may issue additional bonds
secured by the Net Taxes on a parity with the Bonds (the “Parity Bonds”) for the purpose of refunding the Bonds.
Parity Bonds may be issued so long as the issuance of such Parity Bonds results in a reduction in each Bond Year
on the Annual Debt Service on the Bonds when combined with the Debt Service on Parity Bonds following the
issuance of such Parity Bonds. See “SOURCES OF PAYMENT FOR THE BONDS — Issuance of Parity Bonds
6
for Refunding Only.” Parity Bonds may be issued by means of a supplemental indenture and without any
requirement for the consent of any Bondowners. See APPENDIX E — “SUMMARY OF CERTAIN
PROVISIONS OF THE BOND INDENTURE — COVENANTS.” Other taxes and/or special assessments with
liens equal in priority to the continuing lien of the Special Taxes have been levied and may also be levied in the
future on the property within Improvement Area No. 1 which could adversely affect the willingness of the
property owners to pay the Special Taxes when due. See “SPECIAL RISK FACTORS — Parity Taxes and
Special Assessments” herein.
Appraisal Report and Supplement to Appraisal Report
An appraisal of the land and existing improvements within Improvement Area No. 1 was prepared by
Kitty Siino & Associates, Inc., Newport Beach, California (the “Appraiser”). The appraisal is dated April 11,
2018, and entitled “Appraisal Report Community Facilities District No. 16-I Improvement Area No. 1 (Millenia)
Otay Ranch, Chula Vista” (the “Appraisal Report”). See APPENDIX B-1 — “APPRAISAL REPORT.” The
Appraisal Report provides an estimate of the approximate minimum market value of the property in Improvement
Area No. 1 subject to the levy of Special Taxes, assuming that development of the property as currently planned
will consist of 393 residential units and the commercial projects described therein. Based on the assumptions and
limiting conditions in the Appraisal Report, the Appraiser concluded that the market value of all of the parcels
within Improvement Area No. 1 subject to the Special Tax was $62,228,054 as of February 1, 2018 (the “Date of
Value”).
The Appraiser has prepared a Supplement to Appraisal Report (the “Appraisal Supplement”) dated April
30, 2018. In the Appraisal Supplement, the Appraiser concludes that the estimated market value of the property
within Improvement Area No. 1 subject to the levy of Special Taxes as of April 1, 2018, was not less than the
concluded value set forth in the Appraisal Report. See APPENDIX B-2 — “SUPPLEMENT TO APPRAISAL
REPORT.”
The Appraisal Report and the Appraisal Supplement are based upon a variety of assumptions and limiting
conditions that are described in APPENDIX B-1 and APPENDIX B-2. The District makes no representation as to
the accuracy of the Appraisal Report or the Appraisal Supplement. See “IMPROVEMENT AREA NO. 1 —
Appraisal Report and Supplement to Appraisal Report” and “— Appraised Value-to-Lien Ratios.” There is no
assurance that property within Improvement Area No. 1 can be sold for the prices set forth in the Appraisal Report
or that any parcel can be sold for a price sufficient to pay the Special Tax for that parcel in the event of a default
in payment of Special Taxes by a property owner. See “IMPROVEMENT AREA NO. 1,” “SPECIAL RISK
FACTORS — Property Values” and APPENDIX B-1 — “APPRAISAL REPORT” and APPENDIX B-2 —
“SUPPLEMENT TO APPRAISAL REPORT” herein.
Description of the Bonds
The Bonds will be issued and delivered as fully registered Bonds, registered in the name of Cede & Co.
as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual
purchasers of the Bonds (the “Beneficial Owners”) in the denominations of $5,000 or any integral multiple
thereof, under the book-entry system maintained by DTC, only through brokers and dealers who are or act
through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery
of the Bonds. In the event that the book-entry-only system described herein is no longer used with respect to the
Bonds, the Bonds will be registered and transferred in accordance with the Indenture. See APPENDIX H —
“BOOK-ENTRY ONLY SYSTEM.”
Principal of, premium, if any, and interest on the Bonds is payable by the Fiscal Agent to DTC.
Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such
payments to the Beneficial Owners is the responsibility of DTC Participants. In the event that the book-entry only
system is no longer used with respect to the Bonds, the Beneficial Owners will become the registered owners of
the Bonds and will be paid principal and interest by the Fiscal Agent, all as described in the Indenture. See
7
APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE — GENERAL
AUTHORIZATION AND BOND TERMS” herein.
The Bonds are subject to optional redemption, extraordinary redemption, and mandatory sinking fund
redemption as described herein. See “THE BONDS — Redemption.” For a more complete descriptions of the
Bonds and the basic documentation pursuant to which they are being sold and delivered, see “THE BONDS” and
APPENDIX E —” SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE” herein.
Tax Exemption
In the opinion of Bond Counsel, subject to certain qualifications described in this Official Statement,
under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and
compliance with certain covenants and requirements described herein, the interest on the Bonds is excluded from
gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal
alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest on the Bonds is
exempt from California personal income tax. Set forth in APPENDIX C is the form of opinion of Bond Counsel
expected to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such
opinion and certain other tax consequences incident to the ownership of the Bonds, including certain exceptions to
the tax treatment of interest, see “TAX MATTERS.”
Professionals Involved in the Offering
U.S. Bank National Association, Los Angeles, California, will act as Fiscal Agent under the Indenture.
Stifel, Nicolaus & Company, Incorporated is the Underwriter (the “Underwriter”) of the Bonds. Certain
proceedings in connection with the issuance and delivery of the Bonds are subject to the approval of Best Best &
Krieger LLP, San Diego, California, Bond Counsel, and Stradling Yocca Carlson & Rauth, a Professional
Corporation, Newport Beach, California, Disclosure Counsel to the District in connection with the issuance of the
Bonds. Certain legal matters will be passed on for the District and the City by the Office of the City Attorney, for
the Underwriter, by Jones Hall, A Professional Law Corporation, San Francisco, California, as counsel to the
Underwriter and for the Fiscal Agent by its counsel. Other professional services have been performed by Kitty
Siino & Associates, Inc., Tustin, California, as the Appraiser, Meyers Research, LLC, Solana Beach, California as
Market Absorption Analyst, Fieldman, Rolapp & Associates, Inc., Irvine, California as municipal advisor to the
City and Willdan Financial Services, Temecula, California, as Special Tax Consultant.
For information concerning respects in which certain of the above-mentioned professionals, advisors,
counsel and consultants may have a financial or other interest in the offering of the Bonds, see “FINANCIAL
INTERESTS” herein.
Continuing Disclosure
The District has agreed to provide, or cause to be provided, pursuant to Rule 15c2-12 (the “Rule”)
adopted by the Securities and Exchange Commission (the “SEC”) certain financial information and operating data
on an annual basis (the “District Reports”). The District has further agreed to provide, in a timely manner, notice
of certain events with respect to the Bonds (the “Listed Events”). These covenants have been made in order to
assist the Underwriter in complying with the Rule. The District Reports will be filed with the Electronic
Municipal Market Access System (“EMMA”) of the Municipal Securities Rulemaking Board (the “MSRB”)
available on the Internet at http://emma.msrb.org. Notices of Listed Events will also be filed with the MSRB.
The District has not entered into any prior continuing disclosure obligations. The City will assist the District in
preparing the District Reports. Within the last five years, the City and certain related entities have failed to
comply in certain respects with prior continuing disclosure undertakings as described under the caption
“CONTINUING DISCLOSURE.”
8
The Underwriter does not consider any of SLF, LMC Millenia Company or the current homebuilders
within Improvement Area No. 1 to be an “obligated person” with respect to the Bonds for purposes of the Rule.
However, to assist in the marketing of the Bonds, SLF, LMC Millenia Company and the homebuilders within
Improvement Area No. 1 have agreed to provide, or cause to be provided on EMMA, updated information with
respect to their respective development within Improvement Area No. 1 (the “Developer Reports”), on a
semiannual basis and notices of certain Listed Events until certain development milestones have been reached.
The termination of such reporting requirements varies between each continuing disclosure undertaking. See
“CONTINUING DISCLOSURE” herein and APPENDIX F and APPENDIX G hereto for a description of the
specific nature of the reports to be filed by the District, SLF, LMC Millenia Company and the current
homebuilders within Improvement Area No. 1 and notices of Listed Events and a copy of the continuing
disclosure undertakings pursuant to which such reports are to be made.
Bond Owners’ Risks
Certain events could affect the ability of the District to pay the principal of and interest on the Bonds
when due. See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of
certain factors which should be considered, in addition to other matters set forth herein, in evaluating an
investment in the Bonds. The Bonds are not rated by any nationally recognized rating agency. The purchase of
the Bonds involves significant risks, and the Bonds are not appropriate investments for certain investors. See
“SPECIAL RISK FACTORS” herein.
Other Information
This Official Statement speaks only as of its date, and the information contained herein is subject to
change.
Brief descriptions of the Bonds and the Indenture are included in this Official Statement. Such
descriptions and information do not purport to be comprehensive or definitive. All references herein to the
Indenture, the Bonds and the constitution and laws of the State as well as the proceedings of the City Council,
acting as the legislative body of the District, are qualified in their entirety by references to such documents, laws
and proceedings, and with respect to the Bonds, by reference to the Indenture. Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Indenture.
Copies of the Indenture, the Appraisal Report, the Appraisal Supplement and other documents and
information are available for inspection and (upon request and payment to the District of a charge for copying,
mailing and handling) for delivery from the City Clerk at 276 Fourth Avenue, Chula Vista, California 91910.
9
ESTIMATED SOURCES AND USES OF FUNDS
The following table sets forth the expected sources and uses of Bond proceeds and Special Tax revenues
collected by the District.
Sources of Funds:
Principal Amount of Bonds
Plus/Less Net Original Issue Premium/Discount
Total Sources
Uses of Funds:
Project Fund
Capitalized Interest Sub-Account(1)
Administrative Expense Fund
Costs of Issuance(2)
Reserve Fund
Total Uses
(1) Amounts deposited to pay a portion of the interest on the Bonds through September 1, 2019.
(2) Includes Bond Counsel fees, Disclosure Counsel fees, Appraiser fees, Special Tax Consultant fees, Municipal Advisor fees,
Fiscal Agent fees, Underwriter’s discount, printing costs and other issuance costs.
Source: The Underwriter.
THE BONDS
General Provisions
The Bonds will be dated as of their date of delivery and will bear interest at the rates per annum set forth
on the inside cover page hereof, payable semiannually on each March 1 and September 1, commencing on
September 1, 2018 (each, an “Interest Payment Date”), and will mature in the amounts and on the dates set forth
on the inside cover page of this Official Statement. Interest on a portion of the Bonds through September 1, 2019
will be paid from a portion of the proceeds of the Bonds.
Interest will be calculated on the basis of a 360-day year comprised of twelve 30-day months. Interest on
any Bond will be payable from the Interest Payment Date next preceding the date of authentication of that Bond,
unless (i) such date of authentication is an Interest Payment Date, in which event interest will be payable from
such date of authentication; (ii) the date of authentication is after a Record Date but prior to the immediately
succeeding Interest Payment Date, in which event interest will be payable from the Interest Payment Date
immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of
business on the first Record Date, in which event interest will be payable from the date of the Bonds; provided,
however, that if at the time of authentication of a Bond, interest is in default, interest on that Bond will be payable
from the last Interest Payment Date to which the interest has been paid or made available for payment.
As used herein, Record Date means the fifteenth calendar day of the month immediately preceding an
Interest Payment Date, regardless of whether such day is a Business Day.
Interest on any Bond will be paid to the person whose name appears in the Registration Books as the
Owner of such Bond as of the close of business on the Record Date. Principal of the Bonds and any premium due
upon redemption is payable upon presentation and surrender of the Bonds at the principal corporate trust office of
the Fiscal Agent in Los Angeles, California.
The Bonds will be issued as fully registered bonds and will be registered in the name of Cede & Co., as
nominee of DTC. DTC will act as securities depository of the Bonds. Ownership interests in the Bonds may be
purchased in book-entry form only in denominations of $5,000 and any integral multiple thereof. So long as DTC
is the securities depository all payments of principal and interest on the Bonds will be made to DTC and will be
10
paid to the Beneficial Owners in accordance with DTC’s procedures and the procedures of DTC’s Participants.
See APPENDIX H — “BOOK-ENTRY-ONLY SYSTEM.”
In the event the Bonds are not held in book-entry form, interest on the Bonds will be paid by check of the
Fiscal Agent mailed by first class mail, postage prepaid, to the Bondowner at its address on the Registration
Books. In addition, with respect to any Bonds owned by the District and upon a request in writing received by the
Fiscal Agent on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount
of the Bonds, payment will be made by wire transfer in immediately available funds to an account in the United
States designated by such Owner.
Debt Service Schedule
The following table presents the annual debt service on the Bonds (including mandatory sinking fund
redemption), assuming there are no optional or extraordinary redemptions. See “SOURCES OF PAYMENT FOR
THE BONDS” and “THE BONDS — Redemption.”
Date
(September 1) Principal Interest Total
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
Total
Source: The Underwriter.
11
Redemption
Optional Redemption.* The Bonds may be redeemed at the option of the District prior to maturity as a
whole, or in part on any [Interest Payment Date] from such maturities as are selected by the District, and by lot
within a maturity, from any source of funds, at the following redemption prices (expressed as percentages of the
principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption:
Redemption Dates Redemption
Price
103%
102
101
100
Extraordinary Redemption from Special Tax Prepayments.* The Bonds are subject to extraordinary
mandatory redemption on any Interest Payment Date, prior to maturity, as a whole or in part on as nearly as
practicable a pro rata basis among maturities of authorized denominations from amounts deposited to the
Redemption Fund in connection with a prepayment of Special Taxes pursuant to the Rate and Method. Such
extraordinary mandatory redemption of the Bonds shall be at the following redemption prices (expressed as
percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the
date of redemption:
Redemption Dates Redemption
Price
Any Interest Payment Date from September 1, 2018 through March 1, 2026 103%
September 1, 2026 and March 1, 2027 102
September 1, 2027 and March 1, 2028 101
September 1, 2028 and any Interest Payment Date thereafter 100
Mandatory Sinking Fund Redemption.* The Bonds maturing on September 1, 20__ are subject to
mandatory sinking fund redemption, in part by lot, on September 1 in each year commencing September 1, 20__
at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued and unpaid interest
thereon to the date fixed for redemption, without premium, in the aggregate principal amount and in the years
shown on the following redemption schedule:
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
(maturity)
In the event of a partial optional redemption or extraordinary redemption from Special Tax prepayments
of the Bonds maturing on September 1, 20__, each of the remaining mandatory sinking fund payments for the
applicable maturity of the Bonds so redeemed will be reduced, as nearly as practicable, on a pro rata basis in
integral multiples of $5,000.
Notice of Redemption. So long as the Bonds are held in book-entry form by the Depository, or its
Nominee, notice of redemption should be given to the Depository in such manner as is set forth in the procedures
* Preliminary, subject to change.
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of the Depository, at least thirty (30) days but not more than forty-five (45) days prior to the redemption date. It is
the responsibility of DTC Participants to provide such notice. See APPENDIX H — “BOOK-ENTRY ONLY
SYSTEM.”
If the Bonds are no longer registered to the Depository, or its Nominee, the Fiscal Agent is required to
mail, at least thirty (30) days but not more than forty-five (45) days prior to the date of redemption, notice of
redemption, by first-class mail, postage prepaid, to the original purchaser of the Bonds and the respective
registered Owners of the Bonds at the addresses appearing on the Registration Books. The notice of redemption
shall state: (a) the redemption date; (b) the redemption price; (c) the bond registration numbers, dates of maturity
and CUSIP numbers of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part, the respective
principal portions to be redeemed; provided, however, that whenever any call includes all Bonds of a maturity, the
numbers of the Bonds of such maturity need not be stated; (d) that such Bonds must be surrendered at the
principal corporate trust office of the Fiscal Agent; (e) that further interest on such Bonds will not accrue from and
after the designated redemption date; (f) the date of the issue of the Bonds as originally issued; (g) the rate of
interest borne by each Bond being redeemed; and (h) that any other descriptive information needed to identify
accurately the Bonds being redeemed as the District shall direct.
Each notice of redemption shall be sent at least 2 days before the notice of redemption is mailed to the
Bondholders by registered or certified mail or overnight delivery service to the Securities Depositories and to at
least one of the Information Services that disseminate notice of redemption of obligations similar to the Bonds or,
in accordance with the then-current guidelines of the SEC, such other services providing information on called
bonds, or no such other services, as District may determine in its sole discretion.
Any notice of optional redemption of the Bonds delivered in accordance with the Indenture may be
conditional and if any condition stated in the notice of redemption shall not have been satisfied on or prior to the
redemption date, said notice shall be of no force and effect and the District shall not be required to redeem such
Bonds. In such event, the redemption shall not be made and the Fiscal Agent shall within a reasonable time
thereafter give notice, to the persons and in the manner in which the notice of redemption was given, that such
condition or conditions were not met and that the redemption was cancelled.
The District may rescind any optional redemption and notice thereof for any reason on any date prior to
the date fixed for redemption by causing written notice of the rescission to be given to the Owners of the Bonds so
called for redemption. Any optional redemption and notice thereof shall be rescinded if for any reason on the date
fixed for redemption moneys are not available in the Debt Service Fund or otherwise held in trust for such
purpose in an amount sufficient to pay in full on said date the principal of, interest, and any premium due on the
Bonds called for redemption. Notice of rescission of redemption shall be given in the same manner in which
notice of redemption was originally given. The actual receipt by the Owner of any Bond of notice of such
rescission shall not be a condition precedent to rescission, and failure to receive such notice or any defect in such
notice shall not affect the validity of the rescission.
So long as notice has been provided as set forth in the Indenture, the actual receipt by the Owner of any
Bond of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such
notice shall not affect the validity of the proceedings for redemption of such Bonds or the cessation of interest on
the date fixed for redemption.
Effect of Redemption. When notice of redemption has been given substantially as provided for in the
Indenture, and when the amount necessary for the redemption of the Bonds called for redemption is set aside for
that purpose in the Debt Service Fund or the Redemption Fund, as provided for in the Indenture, the Bonds
designated for redemption shall become due and payable on the date fixed for redemption thereof, and upon
presentation and surrender of said Bonds at the place specified in the notice of redemption, said Bonds shall be
redeemed and paid at the redemption price out of the Debt Service Fund or the Redemption Fund and no interest
will accrue on such Bonds or portions of Bonds called for redemption from and after the redemption date
specified in said notice, and the Owners of such Bonds so called for redemption after such redemption date shall
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look for the payment of principal and premium, if any, of such Bonds or portions of Bonds only to the Debt
Service Fund or the Redemption Fund, as applicable.
All Bonds redeemed shall be canceled forthwith by the Fiscal Agent and shall not be reissued. Upon
surrender of Bonds redeemed in part, a new Bond or Bonds of the same maturity shall be registered, authenticated
and delivered to the registered Owner at the expense of the District, in the aggregate principal amount of the
unredeemed portion. All unpaid interest payable at or prior to the date fixed for redemption shall continue to be
payable to the respective Owners of such Bonds or their order, but without interest thereon.
Purchase in lieu of Redemption. In lieu of such an optional, extraordinary mandatory or mandatory
sinking fund redemption, the District may elect to purchase such Bonds at public or private sale at such prices as
the District may in its discretion determine; provided, that, unless otherwise authorized by law, the purchase price
(including brokerage and other charges) thereof shall not exceed the principal amount thereof, plus the applicable
premium, if any, stated above, plus accrued interest to the purchase date.
Registration, Transfer and Exchange
Registration. The Fiscal Agent will keep sufficient books for the registration and transfer of the Bonds.
The ownership of the Bonds will be established by the Bond registration books held by the Fiscal Agent. See
APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE — GENERAL
AUTHORIZATION AND TERMS.”
Transfer or Exchange. Whenever any Bond or Bonds shall be surrendered for registration of transfer or
exchange, the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of the same maturity, for a like
aggregate principal amount of authorized denominations; provided that the Fiscal Agent shall not be required to
register transfers or make exchanges of (i) Bonds for a period of 15 days next preceding the date of any selection
of the Bonds to be redeemed, or (ii) any Bonds chosen for redemption.
SOURCES OF PAYMENT FOR THE BONDS
Limited Obligations
The Bonds are special, limited obligations of the District payable only from amounts pledged under the
Indenture and from no other sources.
In the event that the Special Taxes are not paid when due, the only sources of funds available to pay the
debt service on the Bonds are amounts held by the Fiscal Agent in the funds and accounts established in the
Indenture (including the investment earnings thereon) with the exception of the Project Fund, the Rebate Fund and
the Administrative Expense Fund.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT, THE CITY,
THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE
PAYMENT OF THE BONDS. EXCEPT FOR THE NET TAXES, NO OTHER REVENUES OR TAXES ARE
PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL
OBLIGATIONS OF THE CITY OR GENERAL OBLIGATIONS OF THE DISTRICT BUT ARE LIMITED
OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM SPECIAL TAXES TO BE LEVIED IN
IMPROVEMENT AREA NO. 1 AND CERTAIN OTHER AMOUNTS HELD UNDER THE INDENTURE AS
MORE FULLY DESCRIBED HEREIN.
Special Taxes
Authorization and Pledge. In accordance with the provisions of the Act and the CFD Ordinance, the
City established the District and designated Improvement Area No. 1 therein on September 13, 2016, for the
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purpose of financing various public improvements required in connection with the proposed development within
the District. On September 13, 2016, an election was held within Improvement Area No. 1 at which the
landowners eligible to vote approved the issuance of bonds for Improvement Area No. 1 in an amount not to
exceed $20,000,000, and the levy of the Special Taxes on property within Improvement Area No. 1 to repay such
bonds and to finance the Facilities (as defined below). The landowner within Improvement Area No. 1 also voted
to approve the Rate and Method which authorized the Special Tax to be levied to repay indebtedness of the
District with respect to Improvement Area No. 1, including the Bonds.
The District will covenant in the Indenture that it will comply with all requirements of the Act so as to
assure the timely collection of the Special Taxes in an amount sufficient to pay the Annual Debt Service on the
Bonds when due, Administrative Expenses, and any amounts to replenish the Reserve Fund to the Reserve
Requirement.
The Special Taxes are collected in the manner and at the same time as ad valorem property taxes are
collected and are subject to the same penalties and the same procedure, sale, and lien priority in case of
delinquency as is provided for ad valorem property taxes. See APPENDIX A — “RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX.”
The “Net Taxes” pledged by the District to secure the repayment of the Bonds (and any Parity Bonds) are
the Special Tax Revenues minus amounts applied annually to fund the Administrative Expense Requirement.
As used in this Official Statement, the term “Special Tax Revenues” refers to the “Improvement Area No.
1 Special Tax Revenues,” which is defined in the Indenture as: (a) the proceeds of the Special Tax levied by the
District within Improvement Area No. 1 of the District pursuant to the Rate and Method and received by the
District, and (b) the Delinquency Proceeds. “Delinquency Proceeds” is defined in the Indenture as amounts
collected from the redemption of delinquent Special Taxes including the penalties and interest thereon and from
the sale of property sold as a result of the foreclosure of the lien of the Special Tax resulting from the
delinquency.
The District will, no later than the tenth Business Day after which Special Tax Revenues have been
received by the District, and in any event not later than February 15th and August 15th of each year, transfer such
Special Tax Revenues to the Fiscal Agent. Except for Prepayments which shall be deposited to the Redemption
Fund and the Administrative Expense Fund, as set forth in written instructions from the District in accordance
with the Indenture, the Fiscal Agent will deposit the Special Tax Revenues received in the Special Tax Fund. The
Special Tax Revenues deposited in the Special Tax Fund shall be held in trust and deposited in the following
accounts of the Special Tax Fund or transferred to the following other funds and accounts on the dates and in the
amounts set forth in the following paragraphs and in the following order of priority:
(1) The Fiscal Agent will each Fiscal Year transfer to the Administrative Expense Fund from the
Special Tax Revenues received by the Fiscal Agent during such Fiscal Year an amount equal to
the Administrative Expense Requirement;
(2) The Fiscal Agent will transfer to the Interest Account of the Debt Service Fund, on each Interest
Payment Date and date for redemption of the Bonds, an amount required to cause the aggregate
amount on deposit in the Interest Account to equal the amount of interest due or becoming due
and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on the Bonds
being redeemed on such date;
(3) The Fiscal Agent will transfer to the Principal Account of the Debt Service Fund, on each
September 1, an amount required to cause the aggregate amount on deposit in the Principal
Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and
payable on such September 1, whether at maturity or by mandatory sinking fund payments on
Term Bonds;
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(4) On or after September 2 of each year after making the deposits and transfers to the
Administrative Expense Fund and the Debt Service fund described above, the Fiscal Agent shall
transfer the amount, if any, necessary to replenish the amount then on deposit in the Reserve
Fund to an amount equal to the Reserve Requirement;
(5) On or after September 2 of each year after making the deposits and transfers required to the
Administrative Expense Fund, the Debt Service Fund and the Reserve Fund described above,
upon receipt of written instructions from the District, the Fiscal Agent will transfer from the
Special Tax Fund to the Rebate Fund the amount specified in such request;
(6) On or after September 2 of each year after making the deposits and transfers required to the
Administrative Expense Fund, the Debt Service Fund, the Reserve Fund and the Rebate Fund
described above, upon receipt of a written request of the District, the Fiscal Agent will transfer
from the Special Tax Fund to the Administrative Expense Fund the amounts specified in such
request to pay those Administrative Expenses which the District reasonably expects will become
due and payable during such Fiscal Year or the cost of which Administrative Expenses have
previously been incurred and paid by the District from funds other than the Administrative
Expense Fund in excess of the Administrative Expense Requirement for such Fiscal Year; and
(7) If, on or after September 2 of each year, after making the deposits and transfers required to the
Administrative Expense Fund, the Debt Service Fund, the Reserve Fund and the Rebate Fund
described above, monies remain in the Special Tax Fund, such monies shall be transferred to the
Project Fund until the Project Fund is closed.
The Fiscal Agent will, upon receipt of Special Tax Revenues representing Prepayments, immediately
transfer Prepayments to the Redemption Fund and utilize such funds to redeem Bonds pursuant to the Indenture
(see “Redemption — Extraordinary Redemption from Special Tax Prepayments” above) as set forth in written
instructions to be delivered to the Fiscal Agent by the District; provided, however, that any portion of a
Prepayment constituting Administrative Expenses shall be deposited into the Administrative Expense Fund as set
forth in such written instructions.
See APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE.”
The Special Taxes levied in any fiscal year may not exceed the maximum rates authorized pursuant to the
Rate and Method. See APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX”
hereto. There is no assurance that the Special Tax proceeds will, in all circumstances, be adequate to pay the
principal of and interest on the Bonds when due. See the caption “Limitation on Special Tax Levy and Potential
Impact on Coverage” below and “SPECIAL RISK FACTORS — Insufficiency of Special Taxes” herein.
Rate and Method of Apportionment of Special Tax. The District is legally authorized and will covenant
in the Indenture to cause the levy of the Special Taxes in an amount determined according to the Rate and
Method. The Rate and Method apportions the total amount of Special Taxes to be collected among the taxable
parcels in Improvement Area No. 1 as more particularly described below.
The following is a synopsis of the provisions of the Rate and Method for Improvement Area No. 1, which
should be read in conjunction with the complete text of the Rate and Method which is attached as APPENDIX A
— “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The meaning of the defined terms
used in this section are as set forth in APPENDIX A. This section provides only a summary of the Rate and
Method, and is qualified by more complete and detailed information contained in the entire Rate and Method
attached as APPENDIX A.
Assignment to Land Use Categories. Under the Rate and Method, Improvement Area No. 1 is classified
into three tax zone areas (each a “Zone”). Each Fiscal Year, commencing Fiscal Year 2018-19, all Taxable
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Property within Zone A through C of Improvement Area No. 1 shall be classified as Taxable Property or Exempt
Property. In addition, all Taxable Property shall further be classified as Developed Property, Undeveloped
Property or Provisional Property, and all such Taxable Property shall be subject to the levy of Special Taxes
determined pursuant to Sections 3 and 4 of the Rate and Method. The Assigned Special Tax for an Assessor’s
Parcel of Residential Property shall be based on the Zone in which the Assessor’s Parcel is located and the
Building Square Footage of the dwelling units located on the Assessor’s Parcel. The Assigned Special Tax for
Non-Residential Property shall be based on the Zone in which the Assessor’s Parcel is located and the Acreage of
the Assessor’s Parcel.
For Assessor’s Parcels of Non-Residential Property developed with Condominiums (e.g., office or
industrial condos), the Acreage applicable to each such Condominium for purposes of levying Special Taxes shall
be computed from the Acreage of the legal lot created by the Final Map upon which such Condominiums are
entitled to be developed, with the Acreage of such lot allocated to each Condominium on a pro-rata basis using
the Building Square Footage of such Condominium relative to the total Building Square Footage of all
Condominiums entitled to be developed on such lot. The determination of Building Square Footage for each non-
residential Condominium shall be made by reference to the applicable Building Permit, and to the extent a
Building Permit has not been issued for all Condominiums to be located on the applicable legal lot, the building
square footage attributable to any such Condominiums shall be determined from the recorded condominium plan,
or applicable site plan, plot plan, or other appropriate records kept by the City as reasonably determined by the
City. In the event the City takes ownership of a Condominium within Improvement Area No. 1 and such property
in all other respects meets the definition of Public Property as set forth in Section 1 of the Rate and Method, such
property shall be exempt from Special Taxes pursuant to Section 5 of the Rate and Method.
Exemptions. No Special Tax shall be levied on Assessor’s Parcels of Public Property, Property Owner
Association Property, Assessor’s Parcels which are used as places of worship and are exempt from ad valorem
property taxes because they are owned by a religious organization, and Assessor’s Parcels with public or utility
easements making impractical their utilization for other than the purposes set forth in the easement.
Notwithstanding the foregoing, no property within Improvement Area No. 1 will be classified as Exempt
Property if such classification would reduce the sum of all Taxable Property in Improvement Area No. 1 to less
than 9.53 Acres for Zone A, 12.67 Acres for Zone B, or 17.09 Acres for Zone C. Assessor’s Parcels which cannot
be classified as Exempt Property because such classification would reduce the sum of all Taxable Property in
Improvement Area No. 1 to less than the foregoing acreages for each Zone shall be classified as Provisional
Property and will continue to be subject to the Improvement Area No. 1 Special Taxes. Under the Rate and
Method, classification of Exempt Property will be assigned by the City in the chronological order in which
property becomes eligible for classification as Exempt Property.
Maximum Special Tax, Assigned Annual Special Tax and Backup Special Tax.
Maximum Special Tax. The Maximum Special Tax for each Assessor’s Parcel classified as Developed
Property within a particular Zone shall be the greater of (i) the amount derived by application of the Assigned
Special Tax for such Zone or (ii) the amount derived by application of the Backup Special Tax for such Zone. For
Fiscal Year 2018-19, the Maximum Special Tax for an Assessor’s Parcel of Provisional Property and
Undeveloped Property within each Zone will be $28,613 per Acre for Zone A, $30,231 per Acre for Zone B, and
$6,571 per Acre for Zone C.
Section 3F of the Rate and Method provides for the process by which the District may, upon the receipt
of a request from SLF prior to the issuance of the Bonds, reduce the Assigned Special Tax rates, the Backup
Special Tax rates and the Maximum Special Tax (as such terms are defined in the Rate and Method) rates to a
level which will provide not less than the sum of estimated the Administrative Expense Requirement and one
hundred ten percent (110%) of the estimated debt service with respect to the amount of Bonds requested to be
issued in such written request. No request has been made or is expected to be made prior to the issuance of the
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Bonds to reduce the Assigned Special Tax rates, the Backup Special Tax rates or the Maximum Special Tax rates
pursuant to Section 3F of the Rate and Method.
Assigned Special Tax. The Assigned Special Tax for each Land Use Class within each Zone is shown in
Tables 1 through 3 of the Rate and Method attached as APPENDIX A, which rates increase by two percent on
each July 1, commencing July 1, 2017. Assigned Special Tax rates have been established for Residential Property
and Non-Residential Property in the three Zones. The number of units/acres projected in each Zone is as follows:
Zone
Projected Residential
Development (Units)
Projected Non-Residential
Development (Acreage)
A 176 --
B 217 --
C -- 17.99
Total 393 17.99
The Assigned Special Tax levied against Developed Property that is Residential Property will generally
correlate with the residential square footage of the unit in question. For a detailed description of Assigned Special
Taxes for Residential Property in the Zones, see the Rate and Method attached as APPENDIX A.
The Assigned Special Tax levied against Non-Residential parcels of Developed Property within each
Zone will generally be determined on a per acre basis. For a detailed description of Assigned Special Taxes for
Non-Residential Property that is Developed Property, see the Rate and Method attached as APPENDIX A.
Multiple Land Use Classes. In some instances an Assessor’s Parcel of Developed Property may contain
more than one Land Use Class. The Maximum Special Tax that may be levied on such an Assessor’s Parcel shall
only be levied on the Residential Property Land Use Class located on such Assessor’s Parcel.
Backup Special Tax. For each Assessor’s Parcel of Residential Property or for each Assessor’s Parcel of
Undeveloped Property to be classified as Residential Property upon its development within the Final Map area,
the Backup Special Tax is calculated based on a formula that is a function of a per acre rate, multiplied by the
number of acres within such Assessor’s Parcel, divided by the number of lots which are classified or to be
classified as Residential Property. In Fiscal Year 2018-19, the per acre rates for Zones A, B and C will be
$28,613, $30,231 and $6,571, respectively.
For each Assessor’s Parcel of Developed Property classified as Non-Residential Property or for each
Assessor’s Parcel of Undeveloped Property to be classified as Non-Residential Property within the Final Map
area, the Backup Special Tax shall be determined by multiplying the per-acre Backup Special Tax rates as set
forth above for Residential Property by the total Acreage of any such Assessor’s Parcel.
Annual Increases. On each July 1, the Assigned Special Tax and the Backup Special Tax for each
Assessor’s Parcel of Taxable Property within Improvement Area No. 1 will be increased by an amount equal to
two percent (2%) of the amount in effect for the previous Fiscal Year.
Method of Apportionment of Special Tax. Commencing with Fiscal Year 2018-19 and for each
following Fiscal Year, the District shall levy the Special Tax on all Taxable Property in order to satisfy the
Special Tax Requirement in accordance with steps 1 through 4 below. The Rate and Method defines the Special
Tax Requirement as that amount required in any Fiscal Year to: (i) pay regularly scheduled Debt Service on all
Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit
enhancement and rebate payments on the Outstanding Bonds; (iii) pay Administrative Expenses; (iv) pay any
amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) accumulate funds to
pay directly for acquisition or construction of facilities provided that the inclusion of such amount does not cause
an increase in the Special Tax to be levied on Undeveloped Property; and (vi) pay for reasonably anticipated
delinquent Special Taxes based on (a) the average delinquency rate for special taxes levied in the previous Fiscal
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Year in all community facilities districts within the portion of the City commonly known as Otay Ranch for the
first Fiscal Year in which Special Taxes are levied and (b) the delinquency rate for Special Taxes levied in the
previous Fiscal Year within IA1 for all subsequent Fiscal Years in which Special Taxes are levied; less (vii) a
credit for funds available to reduce the Annual Special Tax levy, as determined by the CFD Administrator
pursuant to the Fiscal Agent Agreement:
Step 1: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property
at up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement;
Step 2: If additional monies are needed to satisfy the Special Tax Requirement after Step 1 has been
completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped
Property up to 100% of the Maximum Special Tax for Undeveloped Property;
Step 3: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps
have been completed, then the Special Tax amount determined in Step 1 shall be increased
Proportionately on each Assessor’s Parcel of Developed Property up to 100% of the Maximum Special
Tax for Developed Property.
Step 4: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps
have been completed, then the Special Tax shall be levied Proportionately on each Assessor’s Parcel of
Provisional Property up to 100% of the Maximum Special Tax for Provisional Property.
Notwithstanding the above, under no circumstances will the Special Tax levied in a Fiscal Year against
any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been
issued be increased by more than ten percent (10%) above the amount that would have been levied in that Fiscal
Year as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within Improvement
Area No. 1. To the extent that the levy of the Special Tax on Residential Property is limited by the provision in
the previous sentence, the levy of the Special Tax on all other Assessor’s Parcels shall continue in equal
percentages at up to 100% of the Maximum Special Tax.
Prepayment of Annual Special Taxes. The Annual Special Tax obligation for an Assessor’s Parcel may
be prepaid in full, or in part, provided that the terms set forth under the Rate and Method are satisfied. The
Prepayment Amount is calculated based on the sum of the Bond Redemption Amount, the Redemption Premium,
the Future Facilities Prepayment Amount, the Defeasance Amount, the Prepayment Administrative Fees and
Expenses and less a credit for the resulting reduction in the Reserve Requirement for the Bonds (if any) and less
capitalized interest (if any), all as specified in Section 8 of the Rate and Method attached as APPENDIX A.
Prepayments of Special Taxes will be applied to effect an extraordinary redemption of Bonds and Parity Bonds.
Where the total tax burden exceeds 2.0% of the actual sales price of a home when first sold by a homebuilder, the
Special Tax must be prepaid to the extent described herein. See “THE BONDS — Redemption — Extraordinary
Redemption from Special Tax Prepayments” and “IMPROVEMENT AREA NO. 1 — Expected Tax Burden.”
Estimated Debt Service Coverage. In order to size the Bonds, the District evaluated the maximum
Assigned Special Taxes that could be levied based on projected build out of Improvement Area No. 1. Assuming
an Administrative Expense Requirement of $75,000 and build out within Improvement Area No. 1 as planned,
Net Taxes would not be less than 110% of debt service on the Bonds in each Bond Year which begins in a Fiscal
Year.
While the maximum Special Tax rates, if levied in accordance with the Rate and Method, would produce
coverage levels of Net Taxes which are higher than 110% of debt service in certain circumstances, because of the
limitations imposed by Section 53321(d) of the Government Code, investors should assume that the maximum
amount that could be levied in any Fiscal Year is the amount that would produce Net Taxes equal to 110% of debt
service due on the Bonds in the corresponding Bond Year.
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Government Code Section 53321(d) provides that the special tax levied against any Assessor’s parcel for
which an occupancy permit for private residential use has been issued shall not be increased as a consequence of
delinquency or default by the owner of any other Assessor’s parcel by more than 10% above the amount that
would have been levied in that fiscal year had there never been any such delinquencies or defaults.
Potential Application of Backup Special Tax as a Result of Development Timing. Depending upon
how the homebuilders time the issuance of building permits with the recording of final condominium plans for the
residential projects, it may be necessary to levy the Backup Special Tax which would increase the rates above the
Assigned Special Tax rates for developed residential parcels. KB Home California and CalAtlantic have obtained
building permits for several units but have not yet recorded final condominium plans for their parcels, which
allows for separate assessor’s parcel numbers to be assigned to individual units. In such a scenario, although there
may be several residential units under construction on a parcel, only one assessor’s parcel number exists for each
parcel. Under the Rate and Method, when at least one building permit has been issued for a parcel, the entire
parcel is classified as Developed Property thereby reducing amount of Undeveloped Property subject to the
Special Tax levy by an amount that could trigger the levy of the Backup Special Tax in future years if the
condominium plans are not recorded. It is possible that the homebuilder which purchases the remaining parcel
owned by SLF planned for residential development could also pull building permits without recording a
condominium plan.
KB Home California and CalAtlantic expect to record final condominium plans for their projects in May
2018 and June 2018, respectively. Interest on a portion of the Bonds will be capitalized through September 1,
2019 which reduces the likelihood of a need to levy the Special Taxes on Developed Property at the Backup
Special Tax rates during the initial development period. However, the levy of the Backup Special Tax may be
necessary beginning in Fiscal Year 2019-20 if the condominium plans are not recorded by KB Home California
and CalAtlantic, as planned.
Collection of Special Taxes. The Special Taxes are levied and collected by the Treasurer Tax-Collector
of the County in the same manner and at the same time as ad valorem property taxes. The District may, however,
collect the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations.
The District will make certain covenants in the Indenture for the purpose of ensuring that the current
maximum Special Tax rates and method of collection of the Special Taxes are not altered in a manner that would
impair the District’s ability to collect sufficient Special Taxes to pay debt service on the Bonds and
Administrative Expenses when due. First, the District will covenant that, to the maximum extent that the law
permits it to do so, the District will not initiate proceedings to reduce the Maximum Special Tax rates (as set forth
in the Rate and Method), unless, in connection therewith, (i) the District receives a certificate from one or more
Special Tax Consultants which, when taken together, certify that, on the basis of the parcels of land and
improvements existing in Improvement Area No. 1 as of the July 1 preceding the reduction, the Maximum Special
Tax which may be levied on all Assessor’s Parcels (as such term is defined in the Rate and Method) of taxable
property on which a completed structure is located in each Fiscal Year will equal at least 110% of the largest sum
of the Annual Debt Service on the Bonds to remain Outstanding and the Debt Service on any Parity Bonds
outstanding (“Maximum Debt Service”) after the reduction is approved and will not reduce the Maximum Special
Tax payable from parcels on which a completed structure is located or to be located at buildout of Improvement
Area No. 1 as proposed to less than 110% of the Maximum Debt Service, and (ii) the City Council, acting as the
legislative body of the District, finds pursuant to the Indenture that any reduction made under such conditions will
not adversely affect the interests of the Owners of the Bonds.
The District will also covenant that, in the event that any initiative is adopted by the qualified electors
which purports to reduce the Maximum Special Tax below the levels authorized pursuant to the Rate and Method
or to limit the power or authority of the District to levy the Special Taxes pursuant to the Rate and Method, the
District shall, from funds available under the Indenture, commence and pursue legal action in order to preserve the
authority and power of the District to levy the Special Taxes pursuant to the Rate and Method.
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The District will further covenant that it will not adopt any policy pursuant to Section 53341.1 of the Act
permitting tender of Bonds in full payment or partial payment of any Special Taxes unless it first receives a
certificate of a Special Tax Consultant that accepting such tender will not result in the District having insufficient
Net Taxes to pay the principal of and interest on the Bonds when due. See APPENDIX E — “SUMMARY OF
CERTAIN PROVISIONS OF THE BOND INDENTURE.”
Although the Special Taxes constitute liens on taxed parcels within Improvement Area No. 1, they do not
constitute a personal indebtedness of the owners of property within Improvement Area No. 1. In addition to the
obligation to pay Special Taxes, properties in Improvement Area No. 1 are subject to other assessments and
special taxes as set forth in Table 1 herein. These other special taxes and assessments are co-equal to the lien for
the Special Taxes. Moreover, other liens for taxes and assessments could come into existence in the future in
certain situations without the consent or knowledge of the City or the landowners in Improvement Area No. 1.
See “SPECIAL RISK FACTORS — Parity Taxes and Special Assessments” herein. There is no assurance that
property owners will be financially able to pay the annual Special Taxes or that they will pay such taxes even if
financially able to do so, all as more fully described in the section of this Official Statement entitled “SPECIAL
RISK FACTORS.”
Special Taxes Are Not Within Teeter Plan. Section 4701 et seq. of the California Revenue and Taxation
Code allows a county to adopt a tax distribution procedure which distributes taxes to taxing agencies on the basis
of the amount of the tax levy, rather than on the basis of actual tax collections. This mechanism is known as a
“Teeter Plan.” The Special Taxes are not subject to the County’s Teeter Plan. The amount of Special Taxes
available to pay debt service on the Bonds will depend on actual tax collections.
Proceeds of Foreclosure Sales. The amounts collected from the redemption of delinquent Special Taxes
including the penalties and interest thereon and from the sale of property sold as a result of the foreclosure of the
lien of the Special Tax resulting from the delinquency in the payment of Special Taxes due and payable on such
property, are included within the Special Tax Revenues pledged to the payment of principal and interest on the
Bonds under the Indenture.
Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of any Special
Tax or receipt by the District of Special Taxes in an amount which is less than the Special Tax levied, the City
Council of the City, as the legislative body of the District, may order that Special Taxes be collected by a superior
court action to foreclose the lien within specified time limits. In such an action, the real property subject to the
unpaid amount may be sold at a judicial foreclosure sale. Under the Act, the commencement of judicial
foreclosure following the nonpayment of a Special Tax is not mandatory. However, the District will covenant for
the benefit of the Owners of the Bonds that it will commence and diligently pursue to completion, judicial
foreclosure proceedings against (i) properties under common ownership with delinquent Special Taxes in the
aggregate of $5,000 or more by October 1 following the close of the Fiscal Year in which the Special Taxes were
due, and (ii) against all properties with delinquent Special Taxes in the aggregate of $5,000 or more by October 1
following the close of any Fiscal Year if the amount of the Reserve Fund is less than the Reserve Requirement.
See APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE —
MISCELLANEOUS CONDITIONS — Covenants” herein.
If foreclosure is necessary and other funds (including amounts in the Reserve Fund) have been exhausted,
debt service payments on the Bonds could be delayed until the foreclosure proceedings have ended with the
receipt of any foreclosure sale proceeds. Judicial foreclosure actions are subject to the normal delays associated
with court cases and may be further slowed by bankruptcy actions, involvement by agencies of the federal
government and other factors beyond the control of the City and the District. See “SPECIAL RISK FACTORS
— Bankruptcy and Foreclosure” herein. Moreover, no assurances can be given that the real property subject to
foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the proceeds of such sale will be
sufficient to pay any delinquent Special Tax installment. See “SPECIAL RISK FACTORS — Property Values”
herein. Although the Act authorizes the District to cause such an action to be commenced and diligently pursued
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to completion, the Act does not impose on the District or the City any obligation to purchase or acquire any lot or
parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act provides that, in
the case of a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.
Reserve Fund
In order to secure further the payment of principal of and interest on the Bonds, the District is required,
upon delivery of the Bonds, to deposit in the Reserve Fund an amount equal to the Reserve Requirement and
thereafter to levy Special Taxes to maintain in the Reserve Fund an amount equal to the Reserve Requirement.
The Indenture provides that the amount to be maintained in the Reserve Fund as the Reserve Requirement shall,
as of any date of calculation, equal the lesser of: (i) Maximum Annual Debt Service for the Bonds, (ii) one
hundred twenty-five percent (125%) of Average Annual Debt Service for the Bonds; (iii) ten percent (10%) of the
original issue price of the Bonds calculated in accordance with Treasury Regulations Section 1.148-2(f)(1); or (iv)
$____________, the initial Reserve Requirement.
Subject to the limits on the maximum annual Special Tax which may be levied within Improvement Area
No. 1 in accordance with the Rate and Method, the District will covenant to levy Special Taxes in an amount that
is anticipated to be sufficient, in light of the other intended uses of the Special Tax proceeds, to maintain the
balance in the Reserve Fund at the Reserve Requirement. Amounts in the Reserve Fund are to be applied to
(i) pay debt service on the Bonds and any Parity Bonds, to the extent other moneys in the Interest Account and the
Principal Account are insufficient therefor; and (ii) redeem the Bonds and any Parity Bonds in whole or in part.
See APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE — FUNDS
AND ACCOUNTS — Reserve Fund” herein.
Issuance of Parity Bonds for Refunding Only
The District will not issue any other obligations payable from the Special Taxes which have, or purport to
have, any lien upon the Special Taxes superior to or, except for Parity Bonds, on a parity with the lien of the
Bonds. Nothing in the Indenture prevents the District from issuing and selling, pursuant to law, Parity Bonds
payable from and having a first lien upon the Special Taxes on a parity with the Outstanding Bonds so long as the
issuance of such Parity Bonds results in a reduction in each Bond Year on the Annual Debt Service on the Bonds
when combined with the Debt Service on the Parity Bonds following the issuance of such Parity Bonds.
IMPROVEMENT AREA NO. 1
General Description of the District and Improvement Area No. 1
The District is located in eastern portion of the City, approximately 8 miles southeast of the City of San
Diego, within the master planned community known as “Otay Ranch.” The District is located within a
development of Otay Ranch known as “Millenia.” For a description of the Millenia project and the ongoing
development activity surrounding the District, see “PROPERTY OWNERSHIP AND THE DEVELOPMENT —
General Description of the Development.”
The District consists of separate project areas within the Millenia project totaling approximately 67 gross
acres. Improvement Area No. 1 of the District consists of approximately 42 gross acres and includes six of the
project areas within the Millennia development. Four of the project areas are planned for for-sale market-rate
residential projects totaling 393 units and two are planned for commercial uses and is expected to include over 1
million square feet of office space. The project areas within Improvement Area No. 1 originally consisted of six
separate assessor’s parcels, certain of which have been further subdivided in accordance with the development
plans for such parcels as further described herein.
The District was formed and Improvement Area No. 1 was designated therein in 2016 by the City
Council under the Act and the CFD Ordinance to provide for the financing of public improvements to meet the
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needs of new development. SLF, as the qualified elector of Improvement Area No. 1, authorized the District to
incur bonded indebtedness for Improvement Area No. 1 to finance certain public facilities to meet the needs of
new development within the District and approved the Rate and Method for Improvement Area No. 1 and
authorized the levy of the Special Tax.
At build-out, approximately 42 acres of property in Improvement Area No. 1 are expected to be
developed for residential and commercial uses and be subject to the Special Tax levy. SLF has conveyed three of
the four original assessor’s parcels within Improvement Area No. 1 planned for residential projects to CalAtlantic,
Shea Homes and KB Home California and the remaining assessor’s parcel owned by SLF is planned to include 60
residential units. SLF expects to convey such parcel to a homebuilder by the end of 2018.
There are two project areas within Improvement Area No. 1 planned for commercial uses. LMC Millenia
Company has acquired one parcel corresponding with one of such commercial project areas from SLF and is
under contract to purchase the second from SLF (which sale is expected to close in July 2018). The parcel
currently owned by LMC Millenia Company is planned for an office campus with two buildings totaling
approximately 318,000 square feet of leasable space, an amenity building of approximately 6,100 square feet and
a parking garage of approximately 401,760 square feet. See “PROPERTY OWNERSHIP AND THE
DEVELOPMENT — The Development — Entitlements for the Overall Millenia Planned Community” for a
description of the potential for a public library to be located within the property currently owned by LMC
Millenia Company. The parcel which is under contract to be sold by SLF to LMC Millenia Company is expected
to be developed into an office campus with four buildings totaling approximately 700,000 square feet of leasable
space. Under the Rate and Method, all Non-Residential Property which is not Exempt Property (as such terms are
defined in the Rate and Method) will be subject to the Special Tax levy on a per-acre basis.
The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) to be installed by SLF to
serve the property within Improvement Area No. 1 is substantially complete. The major arterial roads which
border the Millenia project are Birch Road and Eastlake Parkway. The roads within the Millenia project from
which the property included in Improvement Area No. 1 can be accessed are complete. The property within
Improvement Area No. 1 varies from a mass-graded state to completed homes. In-tract improvements are
expected to be constructed by the homebuilders and the commercial property developer as development within
their respective projects is completed. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” A
detailed description of the status of the construction and ownership as of the date of the Appraisal Report is
included in APPENDIX B-1 — “APPRAISAL REPORT.”
Water and sewer service to the property is provided by the Otay Water District and the City, respectively.
Electricity and natural gas is supplied by San Diego Gas and Electric, and police and fire services are provided by
the City.
Description of Authorized Facilities
The expected total cost of the facilities eligible to be financed with the proceeds of the bonds to be issued
by the District (the “Facilities”), which includes the Bonds and any bonds issued by the District for Improvement
Area No. 2, based on the current estimated cost of the Facilities, is approximately $90,000,000. The Facilities
consist of street and bridge improvements, curbs and gutters, sidewalks, trails, medians, traffic signalization and
signage, street lights, utilities, storm water drainage, on and off-site detention and treatment facilities, and
landscaping and irrigation related thereto, sewer collection and conveyance facilities, land and facilities for parks
and recreational uses, fire facilities and equipment, library facilities and equipment, transit facilities, fiber optic
telecommunication facilities, general government office, administrative and meeting facilities, bus and rapid
transit facilities and land, rights of way and easements necessary for any of such facilities.
The estimated cost of the Facilities necessary to serve the property within Improvement Area No. 1,
based on current estimates, will exceed the amount of proceeds of the Bonds and bonds to be issued by the
District for Improvement Area No. 2 available to finance such Facilities. The costs of the Facilities in excess of
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available proceeds from the sale of the Bonds and any bonds to be issued for Improvement Area No. 2 of the
District are expected to be paid for by SLF. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT —
The Development — Infrastructure Requirements and SLF Financing Plan” below.
The District currently expects that a portion of the proceeds of the Bonds will be used to acquire the land
for all or a portion of the six parks planned within the Millenia project as discrete components of the parks in
accordance with the Development Agreement and that certain Acquisition/Financing Agreement dated as of
February 6, 2018, by and among the City, the District and SLF (the “Acquisition Agreement”).
Direct and Overlapping Indebtedness
The ability of an owner of land within Improvement Area No. 1 to pay the Special Taxes could be
affected by the existence of other taxes and assessments imposed upon the property. These other taxes and
assessments consist of the direct and overlapping debt in Improvement Area No. 1 and are set forth in Table 1
below (the “Debt Report”). The Debt Report sets forth those entities which have issued debt and does not include
entities which only levy or assess fees, charges, ad valorem taxes or special taxes. See “—Expected Tax Burden”
below for information regarding other entities levying taxes, assessments or other charges on property in
Improvement Area No. 1. The Debt Report includes the principal amount of the Bonds. The Debt Report has
been derived from data assembled and reported to the District by Willdan Financial Services as of February 1,
2018. None of the District, the City, or the Underwriter has independently verified the information in the Debt
Report and do not guarantee its completeness or accuracy.
In addition to the direct and overlapping debt shown in Table 1 below, the qualified electors within
Community Facilities District No. 18 of the Chula Vista Elementary School District (the “Elementary School
District CFD”) and Community Facilities District No. 18 of the Sweetwater Union High School District (the
“High School District CFD” and together with the Elementary School District CFD, the “School District CFDs”
and each a “School District CFD”) have authorized bonded indebtedness in the maximum principal amounts of
$40,000,000 and $100,000,000, respectively. The boundaries of the School District CFDs are conterminous with
the boundaries of the Millenia project which includes property outside of the District. Each School District CFD
may issue debt payable from special taxes levied by such School District CFD and may covenant in accordance
with the Act to foreclose upon property which is delinquent in the payment of such special taxes. If a School
District CFD issues such debt, a portion of such debt would be payable from special taxes levied on property
within Improvement Area No. 1.
It is not known how much of the authorized debt the School District CFDs might issue or when.
However, assuming buildout of the property within the Millenia project to the levels described herein,
approximately 10.625% of the amount of the Elementary School District CFD debt issued would be paid from
special taxes levied within Improvement Area No. 1 and 7.00% of the amount of the High School District CFD
debt would be paid from special taxes levied within Improvement Area No. 1. Assuming the issuance of the
maximum authorized amounts, this would be approximately $4,250,000 of Elementary School District CFD debt
and $7,000,000 High School District CFD debt.
As discussed under “SPECIAL RISK FACTORS — Parity Taxes and Special Assessments,” the property
within Improvement Area No. 1 may be subject to additional taxes and assessments imposed by other public
agencies in the future. Table 1 below does not include the authorized School District CFDs’ debt or any
authorized and unissued debt of other agencies.
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TABLE 1
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
OVERLAPPING DEBT SUMMARY
Overlapping District(1)
Total Fiscal
Year 2017-18
Levy(2)
Amount of Levy
on Parcels in
Improvement
Area No. 1(2)
Percent of Levy
on Parcels in
Improvement
Area No. 1
Total Debt
Outstanding(3)
Improvement
No. 1 Share of
Total Debt
Outstanding(4)
Metropolitan Water District $16,165,942 $ 688 0.004% $ 74,905,000 $ 538
Otay Water District, I.D. No. 27 536,191 787 0.147 3,390,000 4,912
Southwestern Community College District 25,808,472 9,796 0.038 454,043,676 167,009
Sweetwater Union High School District 22,334,763 10,140 0.045 384,955,090 168,926
Chula Vista Elementary School District 5,122,982 3,316 0.065 44,495,000 28,073
Chula Vista Elementary School District SFID No. 1 2,770,944 3,753 0.135 81,375,000 106,144
Estimated Share of Overlapping Debt Allocable to Improvement Area No. 1 $ 475,602
Plus the Bonds 13,200,000*
Estimated Share of Direct and Overlapping Debt Allocable to Improvement Area No. 1 $ 13,675,602*
* Preliminary, subject to change.
(1) Does not include authorized and unissued debt of the School District CFDs or other entities. See Table 2 be low.
(2) Based on actual Fiscal Year 2017-18 levy.
(3) Represents overlapping general obligation indebtedness as of February 1, 2018.
(4) General obligation debt is allocated based on the assessed value within Improvement Area No. 1 as a percentage of the total
assessed valuation of within the respective taxing jurisdiction.
Source: Willdan Financial Services; California Municipal Statistics, Inc.
Expected Tax Burden
Table 2 below sets forth the estimated total effective tax rates for the average residential unit size for each
residential project currently being developed within Improvement Area No. 1. Table 2 below does not include the
remaining project area owned by SLF within Improvement Area No. 1 that is planned for residential uses. SLF
expects to sell such property to a residential homebuilder by the end of 2018. The expected tax burden of the
Special Taxes and other taxes and assessments on individual parcels located within Improvement Area No. 1 will
vary among parcels. Actual amounts charged and the effective tax rates may vary and may increase or decrease in
future years.
In accordance with City policies, each homebuilder within Improvement Area No. 1 is required to prepay
a portion of the Special Tax at the time a completed home is sold, if, based on the actual sales price of such home,
the annual total effective tax rate on such parcel would exceed 2.00% of the actual sales price. If the 2.00%
threshold is exceeded, the homebuilder is required to prepay that amount of the Special Tax obligation necessary
to reduce the effective tax rate to 2.00% or less of the actual sales price. In determining the overall effective tax
rate, special taxes levied by the City for maintenance and services are excluded, but all other special taxes,
assessments and ad valorem property taxes are included. As of April 1, 2018, no prepayment of the Special Tax
has been required in connection with homes that have closed to individual homeowners to reduce the effective tax
rate thereof to 2.00% or less. Based on the base sales prices of the homes to be constructed by the current
homebuilders as described herein, the District does not expect that any prepayments of Special Taxes will be
required; however, if base prices were to be reduced in the future, it is possible that some prepayments could
occur. Such prepayments, if any, would be applied to the redemption of Bonds in accordance with the Indenture.
See “THE BONDS — Redemption — Extraordinary Redemption from Special Tax Prepayments.”
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TABLE 2
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
ESTIMATED TAX OBLIGATION(1)
Assessed Value and Property Taxes
Percent of
Total
Assessed
Valuation
Z at Millenia
(Shea
Homes)
Element at
Millenia
(Shea
Homes)
Skylar at
Millenia
(KB Home
California)
Boulevard at
Millenia
(CalAtlantic)
Zone
A A B B
Average Unit Size (square feet)(2)
1,432 2,027 2,631 1,857
Value (3)
$428,660 $571,063 $647,598 $493,997
AD VALOREM PROPERTY TAXES (4)
Basic Levy 1.00000% $4,286.60 $5,710.63 $6,475.98 $4,939.97
Metropolitan Water District General Obligation Bonds 0.00350 15.00 19.99 22.67 17.29
Otay Municipal Water District, I.D. No. 27 General Obligation
Bonds 0.00400 17.15 22.84 25.90 19.76
Southwestern Community College District General Obligation
Bonds 0.04981 213.52 284.45 322.57 246.06
Sweetwater Union High School District General Obligation Bonds 0.05156 221.02 294.44 333.90 254.70
Chula Vista City School District General Obligation Bonds 0.01686 72.27 96.28 109.19 83.29
Chula Vista City School District School Facilities Improvement
District No. 1 General Obligation Bonds 0.01908 81.79 108.96 123.56 94.25
Total Ad Valorem Property Taxes 1.14481% $4,907.34 $6,537.59 $7,413.77 $5,655.33
ASSESSMENTS, SPECIAL TAXES AND PARCEL
CHARGES
City of Chula Vista CFD 14M(5)
$267.70 $267.70 $267.70 $267.70
City of Chula Vista CFD 97-2(6)
28.71 40.64 52.75 37.23
CWA Water Availability(7)
10.00 10.00 10.00 10.00
Mosquito Surveillance(8)
2.28 2.28 2.28 2.28
Vector Disease Control(9)
7.07 7.07 7.07 7.07
Otay Water Availability(10)
10.00 10.00 10.00 10.00
MWD Water Standby Charge(11)
11.50 11.50 11.50 11.50
Sweetwater Union High School District CFD No. 18(12)
894.86 1,266.67 1,644.11 1,160.44
Sweetwater Union High School District General Obligation Bonds
Credit(13) (221.02) (294.44) (333.90) (254.70)
Chula Vista Elementary School CFD No. 18(14) 510.36 722.42 937.69 661.83
Chula Vista Elementary School District General Obligation Bonds
Credit(13) (72.27) (96.28) (109.19) (83.29)
City of Chula Vista CFD No. 16-I(15)
1,406.62 1,728.10 1,715.62 1,509.62
Total Assessments, Special Taxes and Parcel Charges
$2,855.81 $3,675.67 $4,215.63 $3,339.68
PROJECTED TOTAL PROPERTY TAXES
$7,763.16 $10,213.26 $11,629.40 $8,995.01
Projected Total Effective Tax Rate (as percentage of Average Sales
Price)
1.81% 1.79% 1.80% 1.82%
* Preliminary, subject to change.
(1) Table does not include the remaining project area owned by SLF within Improvement Area No. 1 that is planned for residential
uses. SLF expects to sell such property to a residential homebuilder by the end of 2018.
(2) Based on the expected average unit size within each residential project.
(3) Based on average base sales prices within each residential project.
(4) Based on Fiscal Year 2017-18 ad valorem rates.
(5) Based on Fiscal Year 2017-18 community facilities district special tax levy for services maximum rate of $267.70 per dwelling
unit.
(6) Based on Fiscal Year 2017-18 community facilities district special tax levy for services maximum rate of $0.02 per building
square foot.
(Footnotes continued on following page)
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(Continued from previous page)
(7) Based on Fiscal Year 2017-18 rate of $10.00 per parcel or per acre, whichever is greater.
(8) Based on the actual Fiscal Year 2017-18 levy of $2.28 per parcel.
(9) Based on the actual Fiscal Year 2017-18 levy of $7.07 per single family equivalent benefit unit.
(10) Based on Fiscal Year 2017-18 rate of $10.00 per parcel (less than one acre).
(11) Based on the actual Fiscal Year 2017-18 levy of $11.50 per parcel or per acre, whichever is greater.
(12) Based on the Fiscal Year 2017-18 maximum rate of $0.6249 per building square foot.
(13) Credit for school districts’ ad valorem general obligation levy per mitigation agreements between the applicable school district
and the developer. Pursuant to the mitigation agreements, such credits are to be provided until the final maturity of the general
obligation bonds which are payable from such ad valorem general obligation levy.
(14) Based on the Fiscal Year 2017-18 maximum rate of $0.3564 per building square foot.
(15) Based on the Fiscal Year 2018-19 Assigned Special Tax rates.
Source: Willdan Financial Services.
Market Absorption Study
In order to determine the projected absorption of the planned residential and non-residential property
within Improvement Area No. 1, the City engaged Meyers Research, LLC (the “Market Absorption Analyst”) to
perform a comprehensive analysis of the product mix characteristics as well as the macroeconomic and
microeconomic factors that are expected to influence the absorption of the forthcoming products within
Improvement Area No. 1. The Market Absorption Analyst delivered its Market Absorption Study titled “Market
Absorption Analysis Chula Vista CFD 16-I (Millenia IA No. 1) (the “Market Absorption Study”).
With respect to the planned residential developments within Improvement Area No. 1, the Market
Absorption Study concludes that the attached and detached condominiums are comparable to other projects within
the south County area, which the Market Absorption Study reports are selling well. The Market Absorption Study
states that new home sales in the region where Improvement Area No. 1 is located have increased by
approximately 108% from 2016 to 2017. The Market Absorption Analyst’s estimated calendar year sales for the
residential units within Improvement Area No. 1 is set forth in the table below.
With respect to the proposed commercial projects within Improvement Area No. 1, the Market
Absorption Analyst concludes that the projects are supportable. The Market Absorption Study states that office
vacancy rates within the County and the Southbay area (including the City) have decreased from approximatel y
15.2% in 2009 to approximately 9.6% in the fourth quarter of 2017. In addition, the Market Absorption Study
notes that office market absorption within the same region has outpaced deliveries in seven of the last eight years.
The Market Absorption Study estimates an average annual absorption rate of 87,800 square feet of leasable space
within the Millenia project as a whole. With respect to the property currently owned by LMC Millenia Company,
which is planned to include approximately 318,000 square feet of leasable office space, the Market Absorption
Study estimates full absorption within approximately four years from the time such property is made available to
the market.
Based on the assumptions and limiting conditions set forth in the Market Absorption Study, the Market
Absorption Analyst has estimated the calendar year sales for the residential units and the demand for commercial
office space as set forth in the table below. With respect to the estimated absorption of the leasable square footage
of commercial space, the table below shows the estimated demand for such space in the market in which
Improvement Area No. 1 is located. LMC Millenia Company expects to commence construction of the office
buildings on the property that it owns within Improvement Area No. 1 in October 2018 and to complete
construction in January 2020. The Market Absorption Analyst concludes that, with pre-leasing efforts of the
planned office space within Improvement Area No. 1, there could be enough demand for such office space to
absorb the square footage per the schedule in the table below prior to construction completion, with occupancy to
begin when completion occurs. LMC Millenia Company expects to pre-lease office space prior to construction
completion, however, no assurances can be made that any leases will be executed. See “PROPERTY
OWNERSHIP AND THE DEVELOPMENT — LMC Millenia Company Development and Financing Plan.”
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PROJECTED FUTURE ABSORPTION
Year Residential
Homes(1)
Commercial
Property (Square
Feet)(2)
2018 114 77,197
2019 107 77,197
2020 76 77,197
2021 12 77,197
2022 -- 90,225
2023 -- 90,225
2024 -- 90,225
2025 -- 90,225
2026 -- 90,225
2027 -- 90,295
2028 -- 90,295
2029 -- 90,295
Total 309 1,018,000
(1) Excludes actual sales of 84 homes which occurred prior to 2018. As of April 1, 2018, there were 57 homes sales which had
closed to individual homeowners.
(2) Reflects estimated demand for office space in the market in which Improvement Area No. 1 is located. The office campus
planned to be constructed on the property owned by LMC Millenia Company is not expected to be complete until January 2020
but has began pre-leasing activities. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT — LMC Millenia
Company Development and Financing Plan.”
Source: The Market Absorption Analyst.
The Market Absorption Analyst notes that actual absorption rates will differ from projections in the
Market Absorption Study. Such differences could be material. Factors which may influence the pace of
absorption of the residential and non-residential products within Improvement Area No. 1 include economic
downturn, a sudden spike in mortgage rates, tax reform policies relating to housing, and competition from
developments within the vicinity of Improvement Area No. 1. See “SPECIAL RISK FACTORS — Risks of Real
Estate Secured Investments Generally” and “—Tax Cuts and Jobs Act.” An executive summary of the Market
Absorption Study is attached hereto as APPENDIX I.
Appraisal Report and Supplement to Appraisal Report
The estimated assessed value of the property within Improvement Area No. 1, as shown on the City’s
assessment roll for Fiscal Year 2017-18, is approximately $19,297,732. However, as a result of the requirements
of Article XIIIA of the California Constitution, a property’s assessed value is not necessarily indicative of its
market value. In order to provide information with respect to the minimum market value of the property within
Improvement Area No. 1, the City engaged Kitty Siino & Associates, Inc., the Appraiser, to prepare the Appraisal
Report. The Appraiser has an “MAI” designation from the Appraisal Institute and has prepared numerous
appraisals for the sale of land-secured municipal bonds. The Appraiser was selected by the City and has no
material relationships with the City, the District, or the owners of the land within Improvement Area No. 1 other
than the relationship represented by the engagement to prepare the Appraisal Report. The City instructed the
Appraiser to prepare its analysis and report in conformity with County-approved guidelines and the Appraisal
Standards for Land Secured Financings published in 1994 and revised in 2004 by the California Debt and
Investment Advisory Commission. A copy of the Appraisal Report is included as APPENDIX B-1 —
“APPRAISAL REPORT” to this Official Statement.
The purpose of the Appraisal Report was to estimate the minimum market value of the property within
Improvement Area No. 1 subject to the lien of the Special Taxes. The estimate of market value takes into
consideration and assumes the improvements to be funded with the proceeds of the Bonds have been installed and
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that the remaining costs to develop each of the projects within Improvement Area No. 1 provided to the Appraiser
by SLF and each of the builders are correct. As a result, the value conclusions are based upon a hypothetical
condition that the Bonds have been sold with proceeds available for construction of improvements of
approximately $11,000,000. The Appraiser also assumes that SLF will commence construction of Orion Park and
Strata Park at such time so as to not limit the ability of Shea Homes and KB Home California to obtain certificates
of occupancy above the thresholds set forth in the Park Agreement. See “PROPERTY OWNERSHIP AND THE
DEVELOPMENT — The Development — Infrastructure Requirements and SLF Financing Plan.”
Subject to the assumptions and limiting conditions set forth in the Appraisal Report, the Appraiser
concluded that, as of the Date of Value (February 1, 2018), the market value of the Taxable Property within
Improvement Area No. 1 was $62,228,054. In valuing the property within Improvement Area No. 1, the
Appraiser used a sales comparison approach for the property to be developed and, with respect to the builder-
owned models and production units more than 95% complete, a discounted cash flow analysis was applied. The
discounted cash flow analysis accounts for remaining development costs, marketing and carrying costs, developer
profit and a discount rate through the estimated absorption period for such models and production units. To arrive
at the absorption schedule for the models and production units, the Appraiser reviewed both the actual sales made
to date and the projection set forth in the Market Absorption Study. For the 53 individual homes that had closed
escrow as of the Date of Value, the Appraiser used a mass appraisal technique identifying the base prices for each
model.
The Appraiser has prepared the Appraisal Supplement dated April 30, 2018. In the Appraisal
Supplement, the Appraiser concludes that the estimated minimum market value of the property within
Improvement Area No. 1 subject to the levy of Special Taxes as of April 1, 2018, was not less than the concluded
value of $62,228,054 set forth in the Appraisal Report. In the Appraisal Supplement, the Appraiser states that
subsequent to the Date of Value, within Improvement Area No. 1, the were additional homes closings and homes
in escrow and additional homes have been constructed. In connection with the preparation of the Appraisal
Supplement, the Appraiser inspected the property within Improvement Area No. 1 and was provided information
with respect to the additional home closings, sales and construction activity by the homebuilders and commercia l
builder within Improvement Area No. 1.
Tables 3A and 3B below show the appraised value of the various parcels owned by SLF, the builders and
the individual homeowners within Improvement Area No. 1 as set forth in the Appraisal Report as of the Date of
Value. In the aggregate, the estimated appraised value of the property owned by SLF as of the Date of Value is
$6,030,000. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT” below.
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TABLE 3A
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
SUMMARY OF APPRAISED VALUES FOR RESIDENTIAL DEVELOPMENTS
Owner(1) Lot Number(2)
Parcel Count as
of the Date of
Value(3)
Projected
Number of Units
at Build-Out (4) Appraised Value
SLF 11 1 60 $ 2,490,000
CalAtlantic 17 1 78 3,900,000
KB Home California 14 1 79 8,750,000
Shea Homes 9 123 123 14,520,500
Individual Homeowners 9 53 53 25,027,554
Total Appraised Value 179 393 $54,688,054
(1) Based on ownership as of the Date of Value set forth in the Appraisal Report. See “PROPERTY OWNERSHIP AND THE
DEVELOPMENT” below.
(2) Lot numbers correspond to those shown on the Site Map on page ___ hereof.
(3) Based on the number of assessor’s parcels as of the Date of Value. As of the Date of Value the final condominium plan and the
final tract map for the property owned by CalAtlantic and KB Home California, respectively, had not been recorded. Individual
assessor’s parcels will be assigned by the County reflecting the projected number of units at buildout for such property when the
applicable map is recorded. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT” below.
(4) Based on the total number of units expected to be developed by the current homebuilders and on Lot 11 owned by SLF, which
SLF expects to convey to a homebuilder. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT” below.
Source: The Appraiser.
TABLE 3B
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
SUMMARY OF APPRAISED VALUES FOR COMMERCIAL DEVELOPMENTS
Owner(1) Lot Number(2)
Parcel Count as
of the Date of
Value
Projected
Leasable Square
Footage at
Build-Out (3)
Appraised
Value(4)
SLF 1 1 700,000 $3,540,000
LMC Millenia Company 7 1 318,000 4,000,000
Total Appraised Value 2 1,018,000 $7,540,000
(1) Based on ownership as of the Date of Value set forth in the Appraisal Report. See “PROPERTY OWNERSHIP AND THE
DEVELOPMENT” below.
(2) Lot numbers correspond to those shown on the Site Map on page ___ hereof.
(3) Based on the estimated leasable square footage of the proposed commercial developments on such property. Excludes the
square footage associated with the parking garage and amenity building expected to be constructed on the property owned by
LMC Millenia Company. Pursuant to the Rate and Method, Non-Residential Property (as such term is defined in the Rate and
Method) is taxed on a per-acre basis. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT” below.
(4) The Appraiser used a sales comparison approach to arrive at the estimated appraised value of the property planned for
commercial use in Improvement Area No. 1. The total estimated appraised value for each parcel was determined by multiplying
the estimated value per square foot by the total square footage within the applicable parcel.
Source: The Appraiser.
Reference is made to APPENDIX B-1 for a complete list of the Appraiser’s assumptions and limiting
conditions and a full discussion of the appraisal methodology and the basis for the Appraiser’s opinions. In the
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event that any of the assumptions and limiting conditions are not actually realized, the value of the property within
Improvement Area No. 1 may be less than the amount reported in the Appraisal Report. In any case, there can be
no assurance that any portion of the property within Improvement Area No. 1 would actually sell for the amount
indicated by the Appraisal Report.
The Appraisal Report is a statement of the Appraiser’s opinion as to the market value of the taxable
property in Improvement Area No. 1 as of the date and under the conditions specified therein. The Appraiser’s
opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser’s opinion
does not predict the future value of the subject property, and there can be no assurance that market conditions will
not change adversely in the future. See “SPECIAL RISK FACTORS — Property Values.”
It is a condition precedent to the issuance of the Bonds that the Appraiser deliver to the District a
certification to the effect that, nothing has come to the attention of the Appraiser subsequent to the date of the
Appraisal Supplement that would cause the Appraiser to believe that the value of the property in Improvement
Area No. 1 is less than the value reported in the Appraisal Report. However, the Appraiser notes that acts and
events may have occurred since the date of the Appraisal Supplement which could result in both positive and
negative effects on market value within Improvement Area No. 1. The Appraiser has reviewed the homebuilder
base prices as of the date of this Official Statement and concluded that those base prices do not cause it to believe
that the value of property listed for any owner in Table 3A above would be reduced.
Appraised Value-To-Lien Ratios
Table 4 below incorporates the values assigned to parcels in the Appraisal Report, the estimated principal
amount of the Bonds allocable to each category of parcels and the estimated appraised value-to-lien ratios for
various categories of parcels based upon the values and property ownership in Improvement Area No. 1 as of Date
of Value as set forth in the Appraisal Report. Based on the principal amount of the Bonds, the estimated
appraised value-to-lien ratio of the Taxable Property within Improvement Area No. 1 is 4.71-to-1*. This ratio
does not include other overlapping debt within Improvement Area No. 1. See “— Direct and Overlapping
Indebtedness” above. Taking that overlapping debt into account, the ratio of the aggregate appraised value of the
Taxable Property within Improvement Area No. 1 to the total principal amount of the Bonds and such overlapping
general obligation debt for Improvement Area No. 1 is approximately 4.55-to-1*.
The share of Bonds set forth in Table 4 below is allocated based on each property’s share of the estimated
Fiscal Year 2018-19 Special Tax levy based on land use and ownership as of the Date of Value. In the District
Reports to be provided pursuant to the District Continuing Disclosure Agreement, Table 4 will not be updated
based on appraised value, but similar information will be provided based on current assessed value. Based on the
Fiscal Year 2017-18 assessed value of $19,297,732, the assessed value-to-lien ratio, taking the Bonds and the
overlapping debt in Table 1 into account, is approximately 1.41-to-1*.
* Preliminary, subject to change.
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TABLE 4
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
APPRAISED VALUE-TO-LIEN RATIOS(1)
Property Classification / Owner(2)
Estimated
Fiscal Year
2018-19
Number of
Units/Lots(2)
City of Chula Vista
CFD No. 16-I
Improvement Area
No. 1 Estimated
Fiscal Year 2018-19
Special Tax Levy(3)
Percentage of
Estimated Fiscal
Year 2018-19
Special Tax Levy
City of Chula Vista
CFD No. 16-I
Improvement Area
No. 1 Bonds(4)*
Appraised
Value(5)
Estimated
Appraised Value-
to-Lien Ratios(6)(7)
Developed Property
KB Home California(8) 16 $ 27,450 4.86% $ 641,884 $ 8,750,000 13.63
Shea Homes 123 188,096 33.32 4,398,404 14,520,500 3.30
Individually Owned 53 84,557 14.98 1,977,277 25,027,554 12.66
Subtotal 192 $ 300,103 53.16% $ 7,017,565 $ 48,298,054 6.88
Undeveloped Property
CalAtlantic(9) 1 $ 93,828 16.62% $ 2,194,052 $ 3,900,000 1.78
SLF-IV Millenia, LLC 2 133,065 23.57 3,111,560 6,030,000 1.94
LMC-Millenia Investment Co. 1 37,497 6.64 876,823 4,000,000 4.56
Subtotal 4 $ 264,389 46.84% $ 6,182,435 $ 13,930,000 2.25
Total 196 $ 564,493 100.00% $ 13,200,000 $ 62,228,054 4.71
* Preliminary, subject to change.
(1) Total may not sum due to rounding.
(2) Based on ownership status as of February 1, 2018 and development status as of March 1, 2018, as provided by SLF, Shea Homes, KB Home California, CalAtlantic and LMC Millenia Company.
Homebuilders within Improvement Area No. 1 have obtained additional building permits for their projects after March 1, 2018. Such property will be classified as Developed Property under the
Rate and Method beginning with the Fiscal Year 2019-20 Special Tax levy.
(3) Based on development status as of March 1, 2018. In Fiscal Year 2018-19, the District expects to levy Special Taxes on Developed Property at the Assigned Special Tax rates and on Undeveloped
Property at approximately 80.83% of the Maximum Special Tax rates for Undeveloped Property. Interest on a portion of the Bonds due through September 1, 2019 will be paid from proceeds of
the Bonds.
(4) Allocated based on the projected Fiscal Year 2018-19 Special Tax levy.
(5) Based on the Appraisal Report as of the Date of Value.
(6) Calculated by dividing the Appraised Value column by the Chula Vista CFD No. 16-I Improvement Area No. 1 Bonds column.
(7) Does not include overlapping general obligation bonded debt. The property within Improvement Area No. 1 is located within the School District CFDs. Such community facilities districts have
not yet issued any bonded indebtedness but are levying special taxes on property classified as developed property under its rate and method of apportionment of special tax. See “— Direct and
Overlapping Indebtedness” above.
(8) KB Home California expects to record the final condominium plan for the 79 units in its project in May 2018 in which case an assessor’s parcel number will be assigned to each unit within such
project and be subject to the Fiscal Year 2019-20 Special Tax levy. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Potential Necessity for Application of Backup
Special Tax as a Result of Development Timing.”
(9) See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Potential Necessity for Application of Backup Special Tax as a Result of Development Timing ” for a discussion on the
potential need for the application of the Backup Special tax rates on Developed Property.
Source: Willdan Financial Services.
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Largest Taxpayers
Table 5 below lists the taxpayers within Improvement Area No. 1 based on ownership as of February
1, 2018 and development status as of March 1, 2018, measured by the percentage of the projected Fiscal Year
2018-19 Special Tax levy. As shown in Table 5 below, based on the ownership status as of February 1, 2018
provided in the Appraisal Report and the number of building permits issued as of March 1, 2018, assuming no
additional conveyance of property by SLF or any transfer of property by homebuilders to individual
homeowners, for Fiscal Year 2018-19, the largest taxpayer within Improvement Area No. 1 will be Shea
Homes. See “SPECIAL RISK FACTORS — Concentration of Ownership.”
TABLE 5
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
ESTIMATED FISCAL YEAR 2018-19 LARGEST TAXPAYERS
Zone Owner(1)
Estimated
Fiscal Year
2018-19
Number of
Units(2)
Estimated
Fiscal Year
2018-19
Taxable
Acreage(2)
Fiscal Year
2018-19 Land
Use Class(2)
Estimated
Fiscal Year
2018-19
Special Tax
Levy(3)
Percent of
Total Levy
A Shea Homes 123 N/A Developed $ 188,096 33.32%
A Individual Owners 53 N/A Developed 84,557 14.98
B KB Home California 16 N/A Developed 27,450 4.86
B CalAtlantic N/A 3.84 Undeveloped 93,828 16.62
C LMC-Millenia Investment Co. N/A 7.06 Undeveloped 37,497 6.64
B SLF-IV Millenia, LLC N/A 3.07 Undeveloped 75,013 13.29
C SLF-IV Millenia, LLC N/A 10.93 Undeveloped 58,051 10.28
SLF-IV Millenia, LLC Subtotal 14.00 $ 133,064 23.57%
Total 192 24.90 $ 564,493 100.00%
* Preliminary, subject to change.
(1) Based on Appraisal Report as of the Date of Value. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT —
Builders in Improvement Area No. 1” below.
(2) Based on the number of units and acreage as provided by SLF, Shea Homes, KB Home California, CalAtlantic and LMC
Millenia Company. Residential Property that is classified as Developed Property under the Rate and Method will be taxed
on a per-residential unit basis. Property that is classified as Undeveloped Property under the Rate and Method will be taxed
per acre. See APPENDIX A attached hereto.
(3) Total may not sum due to rounding.
Source: Willdan Financial Services.
Delinquency History
Fiscal Year 2018-19 will be the first fiscal year in which Special Taxes are levied within Improvement
Area No. 1.
PROPERTY OWNERSHIP AND THE DEVELOPMENT
General Description of the Development
The District is located in eastern portion of the City, approximately 8 miles southeast of the City of
San Diego, within the master planned community known as “Otay Ranch.” The District is located within a
development of Otay Ranch known as “Millenia.” The Millenia project is located south of Birch Road, east of
State Route 125, and west of Eastlake Parkway.
33
The Millenia project is a mixed-use development compassing approximately 230 gross acres.
Pursuant to the EUC Sectional Planning Area (as defined and described below under “The Development —
Entitlements for the Overall Millenia Planned Community”) the area within the Millenia project is organized
into districts with different predominant uses such as residential, civic, office/commercial and retail. As a
whole, the Millenia project is entitled for up to 2,983 multi-family residential units and a maximum of 3.4
million square feet of commercial uses including a hotel, retail space and a business district of up to two
million square feet of office space. The Millenia project, including the property within Improvement Area No.
1, is expected to be served by a number of parks and a civic core including library facilities, an elementary
school and a City fire station. Millenia is accessed via entries along the arterial roads which bound the
development, and access to the individual districts (i.e. the residential neighborhoods and commercial and civic
centers) is via interior streets. Existing developments within the Millenia community include apartments,
attached and detached condominiums and a hotel, which is under construction.
In addition to the active developments within Improvement Area No. 1, development within Millenia
is ongoing. A 273-unit apartment project called “Pulse Millenia” and a 210-unit apartment project called
“Duetta and Volta at Millenia” are complete and fully occupied. Two additional apartment projects consisting
of a 309-unit project marketed as “Alexan Millenia” and a 253-unit project marketed as “Esplanade” by
Trammel Crow Residential are under construction. A condominium project spanning three neighborhoods
being developed and marketed by Meridian as “Metro, Trio and Evo” is under construction. Commercial
developments within Millenia under construction include a 130,000 square foot retail development by
Sudberry Properties, planned for shops and restaurants, and a 135-room hotel by Ayres Group. With respect to
the public facilities planned within Millenia, one of the six parks has been completed, construction of the
second park is expected to begin in mid-2018, and the City fire station is under design with construction
expected to begin in 2019. Construction of a pedestrian bridge crossing Eastlake Parkway to link the Millenia
project to the surrounding developments is expected to begin in late-2018. The foregoing developments are
outside of Improvement Area No. 1 and are not subject to the Special Tax levy.
The District consists of property located within the Millenia project. The area within the Millenia
project has been divided into separate project areas, six of which are included in Improvement Area No. 1.
Four of the project areas within Improvement Area No. 1 are planned for for-sale market-rate residential
projects totaling 393 residential units and two are planned for commercial uses. The project areas within
Improvement Area No. 1 originally consisted of six separate assessor’s parcels, certain of which have been
further subdivided in accordance with the development plans for such parcels.
SLF has conveyed three of the four original assessor’s parcels within Improvement Area No. 1
planned for residential projects to homebuilders. SLF plans to sell the remaining project area within
Improvement Area No. 1 that is planned for a residential project to a homebuilder by the end of 2018.
There are two project areas within Improvement Area No. 1 planned for commercial uses. LMC
Millenia Company has acquired one parcel corresponding with one of such commercial project areas from SLF
and is under contract to purchase the second from SLF (which sale is expected to close in July 2018). The
parcel currently owned by LMC Millenia Company is planned for an office campus with two buildings totaling
approximately 318,000 square feet of leasable space, an amenity building of approximately 6,100 square feet
and a parking garage of approximately 401,760 square feet. The parcel which is under contract to be sold by
SLF to LMC Millenia Company is expected to be developed into an office campus with four buildings totaling
approximately 700,000 square feet of leasable space. SLF expects to convey the remaining parcel planned for
residential development (which is expected to include 60 homes) to a homebuilder by the end of 2018.
Approximately 42 acres of property in Improvement Area No. 1 are expected to be subject to the
Special Tax at build-out.
The major infrastructure (sewer, water, storm drains, utilities, and arterial roads) to be installed by
SLF to serve the property within Improvement Area No. 1 is substantially complete.
34
As of the Date of Value, the status of the residential developments owned by homebuilders within
Improvement Area No. 1 were as follows: (i) Shea Homes had completed and conveyed 53 homes within
Improvement Area No. 1 to individual homeowners, owned six completed model homes, had 34 homes under
construction (seven of which were over 95% complete) and owned 83 finished lots; (ii) KB Home California
owned two completed model homes, had six homes under construction and owned 71 partially finished lots;
and (iii) CalAtlantic owned one assessor’s parcel planned for 78 attached townhomes for which grading had
commenced. As of such date, the assessor’s parcel owned by LMC Millenia Company, which is planned for
commercial uses, had been graded with a basement area for a proposed parking structure. The remaining
property owned by SLF is in a mass graded condition. A description of the progress made by the residential
homebuilders within Improvement Area No. 1 is set forth below.
SLF and the Contracted Project Manager
SLF. The master developer of the Millenia project including the property within Improvement Area
No. 1, is SLF IV-Millenia, LLC, a Delaware limited liability company (previously defined herein as SLF),
formerly known as SLF IV / McMillin Millenia JV, LLC, a Delaware limited liability company. Membership
interests in SLF were formerly held by SLF IV Millenia Investor, LLC, a Texas limited liability company (as
successor to Stratford Land Fund IV, L.P.) and The Corky McMillin Real Estate Group, LLC. In 2014, SLF
IV Millenia Investor, LLC purchased The Corky McMillin Real Estate Group, LLC’s interest in SLF and
became the sole member of SLF. The membership interest in SLF purchased by SLF IV Millenia Investor,
LLC included the title, rights and obligations with respect to the property within the Millenia project, including
the rights and obligations under the Development Agreement (as defined below). In 2015, SLF IV / McMillin
Millenia JV, LLC changed its name to SLF IV-Millenia, LLC.
SLF is an entity funded by an investment fund of Stratford Land (“Stratford”). Established in 1983
and based in the United States, Stratford is a real estate investment manager focusing on high growth corridors
in the “Sunbelt” region from North Carolina to Florida and across to Texas, Arizona and southern California.
Stratford has brokered land transactions in excess of $1.5 billion and invested in approximately $800 million
of land acquisitions and development. Until 1998, Stratford formed and managed a series of 19 separate
single-asset partnerships to invest in land. Since 1998, Stratford’s primary investment management vehicles
include 5 funds that have invested in land investments (equity and debt) such as the Millenia project.
The Contracted Project Manager. Pursuant to a contract with SLF, Meridian manages the
development of the Millenia project, including the property within Improvement Area No. 1. Founded in
2014, Meridian is a land development and homebuilding company led by former longstanding senior
executives of The Corky McMillin Companies. Since 2015, Meridian has been contracted to manage all
aspects of development of the Millenia project for SLF. Meridian Development does not own any property
within Improvement Area No. 1.
History of Property Tax Payments; Loan Defaults; Litigation; Bankruptcy
Each of SLF, Shea Homes, KB Home California, CalAtlantic and LMC Millenia Company has made
certain representations to the District, which, among others, include the following: a) such entity has not
intentionally failed to pay when due any property taxes, special taxes, or assessments levied or assessed against
its property within Improvement Area No. 1 or failed to cure such delinquencies within forty-five days of
becoming aware of such delinquencies; b) there are no events of monetary default or events which with the
passage of time would constitute a monetary default under any loan or similar credit arrangement to which
such entity is a party the result of which could have a material adverse effect on the development and sale of
the property that it owns within Improvement Area No. 1 as described in this Official Statement or its ability to
pay Special Taxes related to such property prior to delinquency; c) such entity has not been adjudicated as
bankrupt or discharged from any or all of its debts or obligations or granted an extension of time to pay its
debts or a reorganization or readjustment of its debts in the past 10 years; and d) such entity does not have any
proceedings pending (with service of process having been accomplished) or, to the actual knowledge of the
35
individual providing the representations on behalf of such entity, threatened in which such entity may be
adjudicated as bankrupt, become the debtor in a bankruptcy proceeding, be discharged from any or all of its
debts or obligations, be granted an extension of time to pay its debts or obligations, or be granted a
reorganization or readjustment of its debts or obligations.
The Development
Infrastructure Requirements and SLF Financing Plan. As of the Date of Value, the backbone
infrastructure improvements to serve the parcels within Improvement Area No. 1 have been substantially
completed. The only remaining improvements to be completed by SLF to serve the parcels within
Improvement Area No. 1 are the installation of two traffic signals on Millenia Avenue and the final lift of
paving on several streets in the second phase of street improvements. SLF estimates that the cost to complete
this work is approximately $500,000. These improvements are expected to be completed by August 2018 and
are not prerequisites to the issuance of building permits in Improvement Area No. 1.
Pursuant to the “Agreement Regarding Construction of Parks in a Portion of Otay Ranch Eastern
Urban Center,” dated as of September 15, 2009, by and between the City and SLF (as successor in interest
thereunder to McMillin Otay Ranch LLC), as amended (the “Park Agreement”), SLF is required to: (i)
commence construction of Orion Park prior to the occupancy of the 100th home within Shea Homes’
development in Improvement Area No. 1, and (ii) commence construction of Strata Park prior to the
occupancy of the 65th home within KB Home California’s development in Improvement Area No. 1. SLF
expects to commence construction of Orion Park in June 2018 and expects to commence construction of Strata
Park in late-2018, which, in each case, is expected to be prior to the occupancy thresholds of each builder’s
project described in the preceding sentence. The issuance of certificates of occupancy for the residential
projects being constructed by Shea Homes and KB Home California will be limited to such thresholds until
SLF commences construction of such parks.
Sidewalks, landscape and irrigation improvements (the “Pedestrian Corridor Improvements”) which
front the two parcels owned by SLF and the parcel owned by CalAtlantic remain to be completed. The
builders are responsible for completing the Pedestrian Corridor Improvements. With respect to the assessor’s
parcel currently under contract to be sold to LMC Millenia Company, however, SLF will reimburse LMC
Millenia Company for the costs of the Pedestrian Corridor Improvements. The costs of the Pedestrian
Corridor Improvements for the remaining assessor’s parcel owned by SLF that is planned for residential
development is expected to be borne by the purchaser of such parcel.
Within the overall Millenia project, as of the Date of Value, mass grading had been completed and
approximately 75% of the project infrastructure had been installed. As of the Date of Value, SLF expects to
spend approximately $41,000,000 in additional site development costs on improvements within the overall
Millenia project, including the third and final phase of street and infrastructure development, construction of
five parks, a fire station, and pedestrian bridge improvements.
Through February 1, 2018, for the Millenia project, SLF has financed its land acquisition costs,
various site development and costs related to home construction participation interests with respect to certain
property in Millenia which is outside of Improvement Area No. 1, through internally generated funds, third-
party loans, and related party loans. SLF expects to use land sales revenue, home sales revenue from SLF’s
homebuilding participation in projects in Millenia outside of Improvement Area No. 1, internal funding,
revenue from the sale of City development impact fee credits, proceeds from bonds issued by the District
(including the Bonds), and various loans to complete its development activities in Millenia. However, land
sale revenue from SLF’s property in Improvement Area No. 1 and proceeds of bonds issued by the District
paid to acquire public facilities from SLF will not be segregated and set aside for the payment of costs required
to complete its activities in Improvement Area No. 1. Such funds along with land sales revenue, home sales
revenue (from SLF’s homebuilding participation in projects outside of Improvement Area No. 1) and fee credit
sales revenues from all projects is accumulated and used to pay costs of operations for SLF and its
36
subsidiaries, to pay debt service on outstanding debt and for other project purposes, and may be diverted to pay
costs other than the costs of completing SLF’s activities in Improvement Area No. 1 at the discretion of SLF’s
management. Notwithstanding the foregoing, SLF believes that it will have sufficient funds available to
complete its development activities within the Millenia project, including the infrastructure for which it is
responsible in order to allow for buildout of the property within Improvement Area No. 1, commensurate with
the development timing described in this Official Statement.
Although SLF expects to have sufficient funds available to complete its development activities in
Improvement Area No. 1 in accordance with the development timing described in this Official Statement, there
can be no assurance, that amounts necessary to finance the remaining development costs will be available from
SLF or any other source when needed. SLF has no legal obligation to the Bondowners to expend funds for the
development of the property within Improvement Area No. 1 or the payment of ad valorem property taxes or
the Special Taxes. SLF has posted improvement bonds for the costs of the backbone infrastructure required
for Improvement Area No. 1. SLF expects to provide improvement bonds for the costs to complete Orion Park
and Strata Park prior to the commencement of construction of each park.
Entitlements for the Overall Millenia Planned Community. The Millenia project is located within
the Otay Ranch General Development Plan (the “Otay Ranch GDP”) approved by the City Council. The Otay
Ranch GDP groups the land within Otay Ranch into villages and established community-wide land use
policies which governs the developments within Otay Ranch. The Otay Ranch GDP is implemented through
the subdivision of land into “Sectional Planning Areas.” Each Sectional Planning Area that is approved by the
City implements the policies and objectives of the Otay Ranch GDP by defining land uses, development
standards, design criteria and the type and amount of development permitted.
The Millenia project comprises the Otay Ranch Eastern Urban Center Sectional Planning Area (the
“EUC Sectional Planning Area”). On October 6, 2009, the City Council adopted an ordinance which found
that the EUC Sectional Planning Area plans were consistent with the City’s general plan and the Otay Ranch
GDP. Pursuant to the EUC Sectional Planning Area, the Millenia project is entitled for up to 2,983 multi-
family residential units, up to 3.4 million square feet of commercial uses, and a civic core with public facilities
such as a library, museum and multipurpose venues. In 2009, the City approved and entered into a
development agreement with McMillin Otay Ranch LLC (the “Development Agreement”), which provided for
the vesting of rights to develop the Millenia Project consistent with the terms of the Development Agreement,
the EUC Sectional Planning Area plan, the Park Agreement and the Final EIR (as defined below). Other than
the construction of Orion Park and Strata Park, which is required prior to certain residential occupancy levels
within the Shea Homes and KB Home California developments, SLF has fulfilled the requirements necessary
to achieve buildout within Improvement Area No. 1 consistent with the EUC Sectional Planning Area plan.
See “The Development — Infrastructure Requirements and SLF Financing Plan” above.
SLF is in the process of amending the EUC Sectional Planning Area plans with respect to certain land
uses and building heights in the Millenia project. Such amendments include reducing the square footage of
commercial uses from 3.4 million square feet to 3.1 million square feet, modifying the minimum average
building height from five stories to four stories in six project areas, and revising the amount and distribution of
commercial uses in the main commercial district within Millenia. The proposed amendments do not affect the
currently active or planned developments within Improvement Area No. 1, however, such amendments, if
approved, would reduce the minimum building height on the lot owned by SLF that is planned for residential
development from five stories to four stories, which allows for more flexibility in building design. Such
amendments are tentatively scheduled for consideration by the City’s planning commission in June 2018 and
by the City Council in July 2018.
The Development Agreement requires that SLF provide land and/or space within a building located in
the Millenia project for a public library to be owned and operated by the City. Pursuant to a Consent to Partial
Assignment and Transfer of Development Agreement dated February 9, 2016 (the “Library Transfer
Agreement”), by and among the City, SLF and LMC Millenia Company, SLF transferred to LMC Millenia
37
Company the obligation under the Development Agreement to provide land and/or space for the public library.
The Library Transfer Agreement provides that such public library will be located on the property currently
owned by LMC Millenia Company within Improvement Area No. 1. However, the City and LMC Millenia
Company are currently discussing potential sites for the library facility, which may include a location outside
of Improvement Area No. 1.
Pursuant to the Development Agreement, the library facility may be located on property to be
transferred to the City or in space to be leased by the City. Based on estimates provided by LMC Millenia
Company, if the library were to be located on the property currently owned by LMC Millenia Company within
Improvement Area No. 1, it would require a site of approximately 0.67 acres. In such event, LMC expects to
subdivide such assessor’s parcel that it currently owns within Improvement Area No. 1 to create a separate
assessor’s parcel for the library site. Upon transfer of ownership to the City, the library site would be
classified as Exempt Property under the Rate and Method and would not be subject to the Special Tax levy
unless the classification as Exempt Property would reduce the acreage of Taxable Property in a Zone below a
certain threshold. In such event, the library site would be classified as Provisional Property and be subject to
the Special Tax levy, if necessary, to meet the District’s obligations with respect to Improvement Area No. 1,
including debt service on the Bonds. Based on the current estimate of the size of the library site provided by
LMC Millenia Company, the classification of such site as Exempt Property in and of itself, would not reduce
the acreage within Zone C (the Zone in which such property is located) below the threshold which would
require Exempt Property within Zone C to be classified as Provisional Property. See SOURCES OF
PAYMENT FOR THE BONDS — Special Taxes — Rate and Method of Apportionment of Special Tax” and
Appendix A hereto.
Rather than becoming the owner of the library site and facility, the City may instead elect to lease
space within a building for the library facility. Pursuant to the Development Agreement, the City would be
required to pay market-rate rental if the City elects to lease space within a building for the library facility. In
such case, the property on which such building is located would be classified as Non-Residential Property
under the Rate and Method and remain subject to the Special Tax levy, payable by the owner of such parcel.
See SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Assignment to Land Use Categories”
and Appendix A hereto.
Environmental Impact Report. In 1993, the City Council and the County Board of Supervisors
approved the final environmental impact report for the Otay Ranch development. In 2009, a Second-Tier
environmental impact report was prepared for the proposed Millenia project within the EUC Sectional
Planning Area (the “Final EIR”). The possible use of pesticides in connection with the prior agricultural use of
portions of the land within Improvement Area No. 1 was noted in the original environmental report for the
Otay Ranch development and the Final EIR. Such issues were addressed during the grading of the land and
included special handling and reuse of soil on-site pursuant to a soil reuse plan. In 2009, the City Council
adopted an ordinance finding that the proposed Millenia project would have no new effects that were not
examined in the Final EIR.
38
Builders in Improvement Area No. 1
The property in Improvement Area No. 1 is planned for four for-sale residential developments and
two developments consisting of for-lease office space. The following table summarizes the planned
developments and the status of the active developments within Improvement Area No. 1.
TABLE 6
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
SUMMARY OF DEVELOPMENTS
Builder Project Name Product Type(1)
Number
of
Units(2)
Number of
Models
Complete/
Under
Construction(3)
Number
of
Building
Permits
Issued(4)
Shea Homes Element Residential – Detached 70 4 70
Shea Homes Z Residential – Attached 106 4 106
KB Home California Skylar Residential – Detached 79 2 16
CalAtlantic Boulevard Residential – Attached 78 0 0
LMC Millenia Company(5) N/A Office Park N/A N/A 0
SLF(6) N/A Office Park N/A N/A 0
SLF(7) N/A Residential 60 0 0
TOTAL 393 10 192
(1) All active residential developments are planned for detached and attached condominiums.
(2) Reflects number of units projected at buildout.
(3) Based on development status as of the Date of Value.
(4) As of March 1, 2018.
(5) Lot is planned for an office campus with two buildings totaling approximately 318,000 leasable square feet, an amenity
building of approximately 6,100 square feet and a parking garage of approximately 401,760 square feet .
(6) Lot is under contract to be sold by SLF to LMC Millenia Company. Planned development on such lot is for an office
campus with four buildings totaling approximately 700,000 square feet of leasable space.
(7) Lot is planned for residential use with 60 homes at buildout. SLF expects to sell such property to a homebuilder by t he end
of 2018.
Source: SLF, Shea Homes, KB Home California, CalAtlantic, LMC Millenia Company.
39
[INSERT SITE MAP]
40
Shea Homes Development and Financing Plan
General. Shea Homes Limited Partnership (previously defined herein as Shea Homes) (as part of the
Shea family of companies) builds homes in California, Arizona, Colorado, Florida, Nevada, North Carolina,
South Carolina, Texas and Washington. Although Shea Homes is a privately held company, it produces
quarterly disclosures similar to a publicly held company for its bondholders and other interested parties which
are available at Shea Homes’ website at www.sheahomes.com. Such Internet address is included for reference
only, and the information on such Internet site is not a part of this Official Statement and is not incorporated by
reference into this Official Statement.
Development Plan. In 2016, Shea Homes purchased Lot 1 of Tract No. 16150 (totaling
approximately 10 acres) within Improvement Area No. 1 from SLF for a purchase price of $10,350,000. Shea
Homes plans to develop this property to include 176 condominiums in two neighborhoods being marketed as
“Element at Millenia” and “Z at Millenia.” As of February 1, 2018, Shea Homes had completed and conveyed
53 homes within Improvement Area No. 1 to individual homeowners. As of such date, Shea Homes owned six
completed model homes, seven homes over 95% complete (four of which were in escrow), 27 homes under
construction (22 of which were in escrow) and 83 finished lots (five of which were in escrow). As shown in
the tables below, between February 1, 2018 and April 1, 2018, Shea Homes has conveyed additional homes to
individual homeowners and has commenced construction of additional homes within Improvement Area No. 1.
Shea Homes expects to complete construction and convey all homes within both neighborhoods to individual
homeowners by the end of 2020.
The commencement of construction of Orion Park by SLF (as described above under “The
Development — Infrastructure Requirements and SLF Financing Plan”) is required prior to the occupancy of
the 100th home within the Shea Homes projects. Shea Homes’ projects will be limited to 100 certificates of
occupancy until the commencement of construction of Orion Park. Other than the foregoing, all approvals and
permits required for development of property within the Shea Homes’ projects within Improvement Area No. 1
have been secured except for the issuance of building permits for residential construction and other approvals
required in the normal course of development. Final condominium plans for the Element at Millenia and Z at
Millenia projects were recorded on June 27, 2017, and June 26, 2017, respectively. As of February 1, 2018,
in-tract improvements which remain to be completed within Shea Homes’ projects consisted primarily of street
paving, curbs, gutters and landscaping. Shea Homes expects to begin home construction on the remaining
finished lots that it owns within Improvement Area No. 1 once the remaining in-tract infrastructure for such
lots is complete.
Shea Homes’ Element at Millenia project is planned to consist of 70 detached condominiums. The Z
at Millenia project is planned to consist of 106 attached condominiums. The tables below summarize, as of
April 1, 2018, the product mix and development status of the Shea Homes projects within Improvement Area
No. 1.
41
TABLE 7
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
SHEA HOMES
ELEMENT AT MILLENIA
Plan Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
April 1, 2018
Completed
Homes/Homes
Under
Construction (1)
Finished
Lots
Homes in
Escrow
Base Home
Prices(2)
1 18 1,775 8 10 0 6 $489,000
2 16 1,915 8 8 0 6 523,000
3 18 2,157 7 11 0 5 554,246
4 18 2,248 8 10 0 4 587,000
Total 70 31 39 0 21
(1) Includes four completed model homes and homes over 95% complete. Excludes homes which have closed to individual
homeowners.
(2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions.
Source: Shea Homes.
TABLE 8
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
SHEA HOMES
Z AT MILLENIA
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
April 1, 2018
Completed
Homes/Homes
Under
Construction (1)
Finished
Lots
Homes in
Escrow
Base Home
Prices(2)
1 14 1,288 4 4 6 2 $386,000
2 44 1,430 10 13 21 9 409,000
3 48 1,475 12 10 26 9 426,000
Total 106 26 27 53 20
(1) Includes two completed model homes and homes over 95% complete. Excludes homes which have closed to individual
homeowners.
(2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions.
Source: Shea Homes.
Financing Plan. Through March 1, 2018, Shea Homes has spent approximately $41,712,294 on land
acquisition, design and construction costs on its projects within Improvement Area No. 1. Shea Homes
expects to spend approximately $31,876,260 in additional site development, permit and impact fees, and direct
and indirect construction costs between March 1, 2018 and full build-out of the homes proposed to be
constructed, which is expected to occur by the end of 2020.
Through March 1, 2018, Shea Homes has financed its land acquisition costs and various site
development and home construction costs related to its property within Improvement Area No. 1 through
internally generated funds. Shea Homes expects to use internal funding to complete its development activities
within Improvement Area No. 1. If necessary, Shea Homes may access additional funding from a revolving
credit facility, as described below.
42
Shea Homes has a $175 million unsecured revolving credit facility (the “Shea Homes Revolving
Facility”), which matures on April 1, 2020. The Shea Homes Revolving Facility is not secured by Shea
Homes’ property in Improvement Area No. 1. The Shea Homes Revolving Facility has an accordion feature
that allows the facility to be increased by up to an additional $125 million, for a total of $300 million. The
Shea Homes Revolving Facility contains certain covenants and conditions that may limit Shea Homes’ ability
to increase the maximum amount available to be drawn and the amount that Shea Homes may borrow or have
outstanding at any time. As of December 31, 2017 Shea Homes has no outstanding borrowings and $20.6
million of issued letters of credit under the Shea Homes Revolving Facility leaving $154.4 million of available
borrowing capacity at that date. Shea Homes’ ability to renew the Shea Homes Revolving Facility in the
future is dependent upon a number of factors including the state of the commercial lending environment, the
willingness of banks to lend to homebuilders and Shea Homes’ financial condition and strength.
The following table shows Shea Homes’ estimated sources and uses of funds for developing the
property that it owns within Improvement Area No. 1.
TABLE 9
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
SHEA HOMES ESTIMATED CASH FLOW
Total Budget
Through March
1, 2018
March 1, 2018
to
December 31,
2018
January 1,
2019 to
December 31,
2019
January 1, 2019
Through
Build-Out
Sources of Funds
Shea Homes Corporate (Internal Funds) $73,588,543 $41,712,294 $20,653,867 $9,229,305 $1,993,088
Total Sources of Funds $73,588,543 $41,712,294 $20,653,867 $9,229,305 $1,993,088
Uses of Funds
Land $10,354,265 $10,354,265 -- -- --
Common Costs/Land Planning/Other 1,995,402 1,478,744 $ 437,835 $ 59,124 $ 19,708
Site Construction (In-tracts) 9,544,850 6,347,125 2,961,756 235,969 --
Direct Construction 30,174,506 15,347,043 8,460,150 5,566,301 801,014
Fees & Permits 8,815,097 3,809,537 3,891,590 1,113,970 --
Service & Warranty 1,085,239 78,407 756,486 157,605 92,741
Field Expenses 2,879,382 1,304,382 855,000 540,000 180,000
Selling & Marketing 4,393,489 1,394,883 1,700,078 817,485 481,044
General & Administrative 3,594,673 1,141,268 1,390,973 668,851 393,581
Property Taxes & Other 751,640 456,640 200,000 70,000 25,000
Total Uses of Funds $73,588,543 $41,712,294 $20,653,867 $9,229,305 $1,993,088
Source: Shea Homes.
Although Shea Homes expects to have sufficient funds available to complete its development activities
in Improvement Area No. 1 in accordance with the development timing described in this Official Statement,
there can be no assurance that amounts necessary to finance the remaining development and home
construction costs will be available from Shea Homes or any other source when needed. For example,
borrowings under the Revolving Facility may not be available, and home sales revenue, which is accumulated
daily for use in operations by Shea Homes, including to fund costs of other direct and indirect subsidiaries, to
pay debt service on outstanding debt and for other corporate purposes, may be diverted to pay costs other than
the costs of completing Shea Homes’ activities in Improvement Area No. 1 at the discretion of Shea Homes’
management. Shea Homes, its lenders, or any of their related entities are not under any legal obligation of
any kind to expend funds for the development of and construction of homes on Shea Homes’ property in
Improvement Area No. 1. Any contributions by Shea Homes to fund the costs of such development and home
construction are entirely voluntary.
43
KB Home California Development and Financing Plan
General. KB HOME California LLC (previously defined as KB Home California), is a wholly-
owned subsidiary of KB Home, a Delaware corporation (“KB Home”), whose principal executive offices are
located in Los Angeles, California. KB Home is a publicly traded company listed on the New York Stock
Exchange (the “NYSE”) under the ticker symbol “KBH.” KB Home files annual, quarterly and current
reports, proxy statements and other information with the SEC. KB Home’s SEC filings are available to the
public at the SEC’s website at www.sec.gov, and at KB Home’s website at www.kbhome.com. Such Internet
address is included for reference only, and the information on such Internet site is not a part of this Official
Statement and is not incorporated by reference into this Official Statement.
Founded in 1957, KB Home constructs and sells homes through its operating divisions under the name
KB Home. KB Home’s ongoing principal operations are in seven states, including California, Arizona,
Nevada, Colorado, Texas, Florida, and North Carolina within 36 major markets. KB Home first developed
homes in California in 1963. KB Home’s homebuilding operations offer a variety of homes designed
primarily for first-time, move-up and active adult homebuyers, including attached and detached single-family
homes, townhomes and condominiums.
Development Plan. In 2017, KB Home California purchased Lot 14 of Tract No. 16081 (totaling
approximately 7.3 acres) within Improvement Area No. 1 from SLF for a purchase price of $7,265,000. KB
Home California plans to develop this property to include 79 detached condominiums in a neighborhood being
marketed as “Skylar at Millenia.” As of February 1, 2018, KB Home California owned two completed model
homes, six homes under construction (one of which was in escrow) and 71 partially finished lots (two of which
were in escrow). As shown in the table below, between February 1, 2018 and April 1, 2018, KB Home
California commenced construction of additional homes within Improvement Area No. 1. KB Home
California expects to complete construction and convey all homes within its development to individual
homeowners by the end of 2019.
The commencement of construction of Strata Park by SLF (as described above under “The
Development — Infrastructure Requirements and SLF Financing Plan”) is required prior to the occupancy of
the 65th home within KB Home California’s project. KB Home California’s project will be limited to 65
certificates of occupancy until the commencement of construction of Strata Park. Other than the foregoing, all
approvals and permits required for development of property within the KB Home California’s project within
Improvement Area No. 1 have been secured and except for the issuance of building permits for residential
construction and other approvals required in the normal course of development. KB Home California recorded
the final condominium plan for the Skylar at Millenia in late May 2018. As of February 1, 2018, in-tract
improvements remaining to be completed within KB Home California’s development consisted primarily of
street paving, curbs, gutters, dry utilities and landscaping. KB Home California expects to begin home
construction on the remaining finished lots that it owns within Improvement Area No. 1 once the remaining in-
tract infrastructure for such lots is complete.
KB Home California’s Skylar at Millenia project is planned to consist of 79 detached condominiums.
The table below summarizes, as of April 1, 2018, the product mix and development status of KB Home
California’s Skylar at Millenia project within Improvement Area No. 1.
44
TABLE 10
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
KB HOME CALIFORNIA
SKYLAR AT MILLENIA
Plan
Total
Units
Planned
Estimated
Home
Square
Footage
Closings as of
April 1, 2018
Homes Under
Construction(1)
Finished
Lots
Homes in
Escrow
Base Home
Prices(2)
1 39 2,602 0 8 31 5 $596,490
2 40 2,659 0 10 30 7 613,490
Total 79 0 18 61 12
(1) Includes two completed model homes.
(2) Base home prices shown exclude lot premiums, options and extras and any incentives or price reductions.
Source: KB Home California.
Financing Plan. Through March 1, 2018, KB Home California had spent approximately $12,814,646
on land acquisition, design and construction costs on its project within Improvement Area No. 1. KB Home
California expects to spend approximately $33,742,348 in additional site development, permit and impact fees,
and direct and indirect construction costs between March 1, 2018 and full build-out of the homes proposed to
be constructed (exclusive of internal financing repayment, sales and marketing, corporate overhead and other
carrying costs), which is expected to occur by the end of 2019.
To date, KB Home California has financed its land acquisition costs and various site development and
home construction costs related to its property within Improvement Area No. 1 through internally generated
funds. KB Home California expects to use internal funding (which may include home sales revenues from its
project within Improvement Area No. 1) to complete its development activities within Improvement Area No.
1. The following table shows KB Home California’s estimated sources and uses of funds for developing the
property that it owns within Improvement Area No. 1:
TABLE 11
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
KB HOME CALIFORNIA ESTIMATED CASH FLOW
Total Budget
Through
March 1, 2018
March 1, 2018 to
December 31, 2018
January 1, 2019
Through Buildout
Sources of Funds
KB Home Corporate (Internal Funds) $ 46,556,994 $ 12,814,646 $ 22,872,372 $ 10,869,977
Uses of Funds
Land $ 7,265,000 $ 7,265,000 -- --
Site Construction (In-tracts) 3,242,937 2,000,000 $ 1,242,937 $ 1,000,000
Direct Construction 21,236,000 1,173,717 12,741,600 7,320,683
Fees & Technical & Permits 5,033,327 1,286,000 3,019,996 727,331
Service & Warranty 432,867 259,720 173,147
Field Expenses 1,200,000 290,194 720,000 189,806
Selling & Marketing 509,000 50,000 305,400 153,600
General & Administrative 2,800,000 677,001 1,680,000 442,999
Property Taxes & Other 4,837,864 72,734 2,902,715 1,862,411
Total Uses of Funds $ 46,556,994 $ 12,814,646 $ 22,872,372 $ 10,869,977
(1) KB Home California does not anticipate obtaining any loan financing for its project in Improvement Area No. 1.
Source: KB Home California.
45
Although KB Home California expects to have sufficient funds available to complete its development
activities in Improvement Area No. 1 in accordance with the development timing described in this Official
Statement, there can be no assurance that amounts necessary to finance the remaining development and home
construction costs will be available from KB Home California or any other source when needed. For example,
home sales revenue, which is accumulated daily for use in operations by KB Home California, including to
fund costs of other direct and indirect subsidiaries, to pay debt service on outstanding debt and for other
corporate purposes, may be diverted to pay costs other than the costs of completing KB Home California’s
activities in Improvement Area No. 1 at the discretion of KB Home California’s management. KB Home
California, its lenders, or any of their related entities are not under any legal obligation of any kind to expend
funds for the development of and construction of homes on KB Home California’s property in Improvement
Area No. 1. Any contributions by KB Home California to fund the costs of such development and home
construction are entirely voluntary.
CalAtlantic Development and Financing Plan
General. CalAtlantic Group, Inc., a Delaware corporation (previously defined as CalAtlantic),
merged with Lennar Corporation, a Delaware corporation (“Lennar Corporation”) in February 2018 and
operates as a wholly-owned subsidiary of Lennar Corporation. CalAtlantic does not expect that its merger
with Lennar Corporation will have an adverse material impact on CalAtlantic’s development in Improvement
Area No. 1 as described herein.
Lennar Corporation, founded in 1954 and publicly traded under the symbol “LEN” since 1971, is one
of the nation’s largest home builders, operating under a number of brand names, including Lennar Homes and
U.S. Home. The company primarily develops residential communities both within the Lennar family of
builders and through consolidated and unconsolidated partnerships in which the company maintains an
interest.
Lennar Corporation is subject to the informational requirements of the Exchange Act and in
accordance therewith files reports, proxy statements and other information with the SEC. Such filings,
particularly the Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, may be
inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such filings set forth, among other things, certain data relative to
the consolidated results of operations and financial position of Lennar and its subsidiaries (including
CalAtlantic). Such files can also be accessed over the internet at the SEC’s website at www.sec.gov. Copies
of Lennar Corporation’s Annual Report and related financial statements, prepared in accordance with generally
accepted accounting standards, are available from Lennar Corporation’s website at www.lennar.com. The
foregoing internet addresses are included for reference only and the information on the internet sites are not a
part of this Official Statement and are not incorporated by reference into this Official Statement. No
representation is made in this Official Statement as to the accuracy or adequacy of the information contained
on such internet sites.
Development Plan. In 2017, CalAtlantic purchased Lot 17 of Tract No. 16081 (totaling
approximately 3.7 acres) within Improvement Area No. 1 from SLF for a purchase price of $3,510,000.
CalAtlantic plans to develop this property to include 78 attached townhomes in a neighborhood expected to be
marketed as “Boulevard at Millenia.” CalAtlantic expects to record the final condominium plan for the
Boulevard at Millenia project by June 2018. All approvals and permits required for development of property
within CalAtlantic’s project in Improvement Area No. 1 have been secured, and except for the issuance of
building permits for residential construction and other approvals required in the normal course of development.
As of February 1, 2018, CalAtlantic had begun grading the lot that it owns within Improvement Area
No. 1 and in March 2018, CalAtlantic commenced construction of the in-tract improvements on its property,
which include street grading and paving, curbs, gutters, wet and dry utilities and landscaping. Initial trenching
for model homes and the first phase of production homes began in March and April 2018, respectively.
46
CalAtlantic projects that it will complete and convey 25 homes in 2018, 40 homes in 2019, and the final 13
homes in 2020.
CalAtlantic’s Boulevard at Millenia project is expected to include three floor plans with home sizes
ranging from approximately 1,681 square feet to 2,046 square feet with initial base sales prices projected to
range from approximately $408,000 to $453,000. Actual base sales prices may vary from the foregoing prices.
Financing Plan. Through March 1, 2018, CalAtlantic had spent approximately $4,807,000 in land
acquisition, site improvement costs, indirect construction costs, permit and impact fees, and other indirect
construction and finance costs on its development within Improvement Area No. 1. As of such date,
CalAtlantic estimated that it would spend approximately $27,305,000 in additional site improvement costs,
direct and indirect construction costs, permit and impact fees, finance costs, sales general and administrative
costs, and other carrying costs (including the payment of property taxes and warranty expense) between March
1, 2018 and full buildout of the homes proposed to be constructed in Improvement Area No. 1, which is
expected to occur by the end of 2020.
Through March 1, 2018, CalAtlantic had financed its land acquisition costs and various site
development costs related to its property within Improvement Area No. 1 through internally generated funds.
CalAtlantic expects to use internal funding (which may include home sales revenues from its project within
Improvement Area No. 1) to complete its development activities within Improvement Area No. 1.
The following table shows CalAtlantic’s estimated sources and uses of funds for developing the
property that it owns within Improvement Area No. 1:
TABLE 12
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
CALATLANTIC BUDGET AND COSTS INCURRED
AS OF MARCH 1, 2018
Total Budget
Actual
Costs Incurred
Through March
1, 2018
Projected
March 1, 2018
Through
December 31,
2018
Projected
January 1,
2019 Through
Build-Out
Sources of Funds
CalAtlantic Corporate (Internal
Funding)
$32,112,000 $4,807,000 $9,978,000 $17,326,000
Uses of Funds
Land $3,560,000 $3,537,000 $23,000 --
Site Improvements 3,902,000 360,000 2,834,000 708,000
Permits & Fees 3,792,000 532,000 978,000 2,282,000
Indirect Construction 1,271,000 273,000 299,000 699,000
Direct Construction & Option Costs 14,704,000 -- 4,411,000 10,293,000
Finance Costs 699,000 105,000 178,000 416,000
Property Taxes 139,000 -- 42,000 97,000
Warranty 113,000 -- 34,000 79,000
Sales, General & Admin. 3,932,000 -- 1,180,000 2,752,000
Total Uses of Funds $32,112,000 $4,807,000 $9,978,000 $17,326,000
(1) CalAtlantic expects to fund future costs from internal working capital funds and homes sales proceeds. CalAtlantic does not
anticipate obtaining any loan financing for its project in Improvement Area No. 1.
Source: CalAtlantic.
Although CalAtlantic expects to have sufficient funds available to complete its development activities
in Improvement Area No. 1 in accordance with the development timing described in this Official Statement,
there can be no assurance that amounts necessary to finance the remaining development and home
47
construction costs will be available from CalAtlantic or any other source when needed. Neither CalAtlantic,
nor any of its related entities are under any legal obligation of any kind to expend funds for the development of
and construction of homes on CalAtlantic’s property in Improvement Area No. 1. Any contributions by
CalAtlantic to fund the costs of such development and home construction are entirely voluntary.
If and to the extent that internal funding, including but not limited to home sales revenues, is
inadequate to pay the costs to complete the planned development by CalAtlantic within Improvement Area No.
1 and other financing by CalAtlantic is not put into place, there could be a shortfall in the funds required to
complete the planned development by CalAtlantic within Improvement Area No. 1.
LMC Millenia Company Development and Financing Plan
General. LMC-Millenia Investment Company, L.P. (previously defined as LMC Millenia Company),
is a limited partnership with LMC-Millenia GP, LLC as its sole general partner. Both entities are solely
owned and controlled by Lee M. Chesnut. Mr. Chesnut is a San Diego-based investor/developer, specializing
in the development and management of commercial real estate. Over the last 25 years, Mr. Chesnut has
acquired, repositioned and/or constructed commercial properties totaling over 1.25 million square feet.
Development Plan. In 2016, LMC Millenia Company purchased Lot 7 of Tract No. 16081 (totaling
approximately 7 acres) within Improvement Area No. 1 from SLF for a purchase price of $2,586,633. LMC
Millenia Company plans to develop this property into a “Class A” (generally regarded as buildings with
higher-end finishes and above-average rental prices for its market) office campus consisting of two four-story
office buildings, an amenity building and a parking garage. The two office buildings are expected to include
approximately 150,000 square feet and 168,000 square feet of leasable space, respectively. The campus is also
expected to include an amenity building of approximately 6,100 square feet. A parking garage, contained in a
separate structure, totaling approximately 401,760 square feet is expected to serve the office campus.
As of February 1, 2018, the parcel owned by LMC Millenia Company had been finish graded,
including the below-grade excavation for a proposed parking structure. LMC Millenia Company expects to
commence vertical construction of the office campus buildings in late 2018 and expects to complete
construction in early 2020. LMC Millenia Company expects to pre-lease office space prior to completion of
construction, however, no assurances can be made that any leases will be executed. As of April 1, 2018, no
leases have been entered into for such office space, however, LMC Millenia Company had entered into a non-
disclosure agreement with a potential lessee of one of the planned office buildings.
See “The Development — Entitlements for the Overall Millenia Planned Community” for information
with respect to the potential of a library site which may be owned by the City and located on the property
currently owned by LMC Millenia Company.
Financing Plan. Through March 1, 2018, LMC Millenia Company had spent approximately $7.0
million in land acquisition, site improvement and design costs on its development within Improvement Area
No. 1. As of such date, LMC Millenia Company expected that it would spend approximately $130,000,000 in
additional site development, permit and impact fees, and direct and indirect construction costs until full build-
out of the project proposed to be constructed on its property within Improvement Area No. 1 (exclusive of
internal financing repayment, sales and marketing, corporate overhead and other carrying costs).
The following table shows LMC Millenia Company’s estimated sources and uses of funds for
developing the property that it owns within Improvement Area No. 1. LMC Millenia Company is currently
considering financing options for a portion of its remaining costs to develop the property that it owns within
Improvement Area No. 1. Such sources may be loans from banks and/or private investors. Such financing
sources have not been secured and LMC Millenia Company can make no assurances as to the availability or
the timing that such financing sources will be available.
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TABLE 13
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
(IMPROVEMENT AREA NO. 1)
LMC MILLENIA COMPANY CASH FLOW
Total Budget
Through
March 1,
2018
March 1, 2018 to
December 31,
2018
January 1, 2019
to December 31,
2019
January 1,
2020 Through
Build-Out
Sources of Funds
LMC Millenia Company (Internal Funding) $ 14,089,973 $ 3,023,340 -- -- $ 11,066,633
SD Private Bank(1) 1,300,000 1,300,000 -- -- --
Trinity Mortgage(1) 3,000,000 3,000,000 -- -- --
Financing Source – Building 1(2) 62,000,000 $ 32,014,147 $ 29,985,853 --
Financing Source – Balance(2) 49,466,530 39,847,404 9,619,126
Total Sources of Funds $ 129,856,503 $ 7,323,340 $ 32,014,147 $ 69,833,257 $ 20,685,759
Uses of Funds
Land $ 2,608,467 $ 2,608,467 -- -- --
Site Construction (In-tracts) 350,000 350,000 -- -- --
Roadway and Frontage (Water Included) -- -- -- --
Direct Construction $ 105,878,197 -- $ 28,189,791 $ 57,688,406 $ 20,000,000
Soft Costs 5,200,000 -- 2,000,000 3,200,000 --
Fees & Permits 157,920 157,920 -- -- --
Service & Warranty 3,285,483 3,285,483 -- -- --
Selling & Marketing 5,280,853 405,853 -- 4,875,000 --
General & Administrative 450,970 450,970 -- -- --
Property Taxes & Other 6,644,613 64,647 1,824,356 4,069,851 685,759
Total Uses of Funds $ 129,856,503 $ 7,323,340 $ 32,014,147 $ 69,833,257 $ 20,685,759
(1) The SD Private Bank loan has been paid off. As of April 1, 2018, the outstanding balance under the Trinity Mortgage was
approximately $1 million, which secured by a first deed of trust on LMC Millenia Company’s property within Improvement
Area No. 1.
(2) LMC Millenia Company is currently considering financing options for a portion of its remaining costs to develop the property
that it owns within Improvement Area No. 1. LMC Millenia Company has not secured such financing and no assurances can
be made as to the availability or the timing that such financing sources will b e available.
Source: LMC Millenia Company.
Although LMC Millenia Company expects to have sufficient funds available to complete its
development activities in Improvement Area No. 1 in accordance with the development timing described in this
Official Statement, there can be no assurance that amounts necessary to finance the remaining development
and home construction costs will be available from LMC Millenia Company or any other source when needed.
LMC Millenia Company, its lenders, or any of their related entities are not under any legal obligation of any
kind to expend funds for the development of and construction of homes on LMC Millenia Company’s property
in Improvement Area No. 1. Any contributions by LMC Millenia Company to fund the costs of such
development and home construction are entirely voluntary.
SPECIAL RISK FACTORS
The purchase of the Bonds involves significant risks that are not appropriate investments for certain
investors. The following is a discussion of certain risk factors which should be considered, in addition to other
matters set forth herein, in evaluating the investment quality of the Bonds. The Bonds have not been rated by a
rating agency. This discussion does not purport to be comprehensive or definitive and does not purport to be a
complete statement of all factors which may be considered as risks in evaluating the credit quality of the
Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or
willingness of property owners in Improvement Area No. 1 to pay their Special Taxes when due. Such failures
to pay Special Taxes could result in the inability of the District to make full and punctual payments of debt
service on the Bonds. In addition, the occurrence of one or more of the events discussed herein could
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adversely affect the value of the property in Improvement Area No. 1. See “—Property Values” and “—
Limited Secondary Market.”
Risks of Real Estate Secured Investments Generally
The Bond owners will be subject to the risks generally incident to an investment secured by real
estate, including, without limitation, (i) adverse changes in local market conditions, such as changes in the
market value of real property in the vicinity of Improvement Area No. 1, the supply of or demand for
competitive properties in such area, and the market value of residential property or buildings and/or sites in the
event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental
rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous
materials) and fiscal policies; and (iii) natural disasters (including, without limitation, earthquakes, fires and
floods), which may result in uninsured losses.
No assurance can be given that SLF, the builders or any future homeowners within Improvement Area
No. 1 will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis.
See “— Bankruptcy and Foreclosure” below, for a discussion of certain limitations on the City’s ability to
pursue judicial proceedings with respect to delinquent parcels.
Tax Cuts and Jobs Act
H.R. 1 of the 115th U.S. Congress, known as the “Tax Cuts and Jobs Act,” was enacted into law on
December 22, 2017 (the “Tax Act”). The Tax Act makes significant changes to many aspects of the Code. For
example, the Tax Act reduces the amount of mortgage interest expense and state and local income tax and
property tax expense that individuals may deduct from their gross income for federal income tax purposes.
These changes could increase the cost of home ownership within Improvement Area No. 1 and could slow the
pace of home sales by Shea Homes, KB Home California and CalAtlantic and the builder selected for the final
residential site or result in price reductions from the current expected levels. However, neither the City nor the
District can predict the effect that the Tax Act may have on the cost of home ownership or the price of homes
in Improvement Area No. 1, the pace at which homes in Improvement Area No. 1 are sold to individual
homeowners by the builders within Improvement Area No. 1, or the ability or willingness of homeowners to
pay Special Taxes or property taxes.
Concentration of Ownership
Based on the ownership status of the property within Improvement Area No. 1 as of February 1, 2018
and the number of building permits issued as of March 1, 2018, assuming no additional conveyance of
property by SLF or any transfer of property by homebuilders to individual homeowners within Improvement
Area No. 1, approximately 23.57% of the Special Taxes estimated to be levied in Fiscal Year 2018-19 would
be payable by SLF, approximately 33.32% would be payable by Shea Homes, approximately 4.86% would be
payable by KB Home California, approximately 16.62% would be payable by CalAtlantic and approximately
6.64% would be payable by LMC Millenia Company. See Table 5 above. Failure of SLF, any of the builders,
or any of their successors, to pay the annual Special Taxes when due could result in a draw on the Reserve
Fund, and ultimately a default in payments of the principal of, and interest on, the Bonds, when due. No
assurance can be given that SLF, the builders or any of their successors, will complete the remaining intended
construction and development in Improvement Area No. 1 or to pay their Special Taxes when due. See “—
Failure to Develop Properties.”
In Fiscal Year 2018-19, the District will levy Special Taxes on property within Improvement Area No.
1 classified as Undeveloped Property which is owned by SLF, CalAtlantic and LMC Millenia Company.
Undeveloped Property is defined in the Rate and Method as property not classified as Developed Property or
Provisional Property. In the event that SLF, entities affiliated with SLF, or any of the builders fail to complete
the remaining intended construction and development in Improvement Area No. 1, Special Taxes will continue
50
to be levied on Undeveloped Property and the risk of concentration of ownership would continue. LMC
Millenia Company expects to retain ownership of its commercial property so it is expected that it will continue
to be a taxpayer within Improvement Area No. 1 beyond the development period. No assurance can be given
that SLF, the builders, or any successors, will pay Special Taxes in the future or that they will be able to pay
such Special Taxes on a timely basis. See “— Bankruptcy and Foreclosure” for a discussion of certain
limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.
Limited Obligations
The Bonds and interest thereon are not payable from the general funds of the City. Except with
respect to the Special Taxes, neither the faith and credit nor the taxing power of the District or the City is
pledged for the payment of the Bonds or the interest thereon, and, except as provided in the Indenture, no
owner of the Bonds may compel the exercise of any taxing power by the District or the City or force the
forfeiture of any County or District property. The principal of, premium, if any, and interest on the Bonds are
not a debt of the City or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s or the
District’s property or upon any of the City’s or the District’s income, receipts or revenues, except the Net
Taxes and other amounts pledged under the Indenture.
Insufficiency of Special Taxes
Under the Rate and Method, the annual amount of Special Tax to be levied on each taxable parcel in
Improvement Area No. 1 will generally be based on the land use class to which a parcel of Developed Property
is assigned. See APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ”
and “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Rate and Method of Apportionment
of Special Tax.”
In order to pay debt service on the Bonds, it is necessary that the Special Taxes be paid in a timely
manner. Should the Special Taxes not be paid on time, the District will establish and fund upon the issuance
of the Bonds a Reserve Fund in an amount equal to the Reserve Requirement to pay debt service on the Bonds
to the extent other funds are not available. See “SOURCES OF PAYMENT FOR THE BONDS — Reserve
Fund.” The District will covenant to maintain in the Reserve Fund an amount equal to the Reserve
Requirement subject, however, to the limitation that the District may not levy the Special Tax in Improvement
Area No. 1 in any fiscal year at a rate in excess of the maximum amounts permitted under the Rate and
Method. As a result, if a significant number of delinquencies occurs, the District could be unable to replenish
the Reserve Fund to the Reserve Requirement due to the limitations on the maximum Special Tax. If such
defaults were to continue in successive years, the Reserve Fund could be depleted and a default on the Bonds
could occur.
The District will covenant in the Indenture that, under certain conditions, it will institute foreclosure
proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on
the Bonds. If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but
would not be required to, advance the amount of the delinquent Special Tax to protect its security interest. See
“SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales” for
provisions which apply in the event of such foreclosure and which the District is required to follow in the
event of delinquencies in the payment of the Special Tax.
In the event that sales or foreclosures of property are necessary, there could be a delay in payments to
owners of the Bonds (if the Reserve Fund has been depleted) pending such sales or the prosecution of such
foreclosure proceedings and receipt by the District of the proceeds of sale. The District may adjust the future
Special Tax levied on taxable parcels in Improvement Area No. 1, subject to the limitation on the maximum
Special Tax, to provide an amount required to pay interest on, principal of, and redemption premiums, if any,
on the Bonds, and the amount, if any, necessary to replenish the Reserve Fund to an amount equal to the
Reserve Requirement and to pay all current expenses; provided, however, that the Act and the Rate and
51
Method provide that under no circumstances will the Special Tax levied in a Fiscal Year against any
Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been
issued be increased by more than ten percent (10%) above the amount that would have been levied in that
Fiscal Year as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within
Improvement Area No. 1. There is, however, no assurance that the total amount of the Special Tax that could
be levied and collected against taxable parcels in Improvement Area No. 1 will be at all times sufficient to pay
the amounts required to be paid by the Indenture, even if the Special Tax is levied at the maximum Special Tax
rates. See “—Bankruptcy and Foreclosure” for a discussion of potential delays in foreclosure actions.
The Rate and Method governing the levy of the Special Tax provides that no Special Tax shall be
levied on public property, property owner association property, property which is used as places of worship
and are exempt from ad valorem property taxes because they are owned by a religious organization, and
parcels with public or utility easements making impractical their utilization for other than the purposes set
forth in the easement; provided however, that no such classification of tax-exempt status shall reduce the sum
of all Taxable Property in Improvement Area No. 1 to less than 9.53 Acres for Zone A, 12.67 Acres for Zone
B, or 17.09 Acres for Zone C. See Section 5 of APPENDIX A — “RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX.” See “The Development — Entitlements for the Overall Millenia
Planned Community” for information with respect to the potential of a library site which may be owned by the
City and located on the property currently owned by LMC Millenia Company.
If for any reason property within Improvement Area No. 1 becomes exempt from taxation by reason
of ownership by a non-taxable entity such as the federal government or another public agency, subject to the
limitations of the maximum authorized rates, the Special Tax will be reallocated to the remaining taxable
properties within Improvement Area No. 1. This would result in the owners of such property paying a greater
amount of the Special Tax and could have an adverse impact upon the ability and willingness of the owners of
such property to pay the Special Tax when due.
The Act provides that, if any property within Improvement Area No. 1 not otherwise exempt from the
Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax
will continue to be levied on and enforceable against the public entity that acquired the property. In addition,
the Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent
domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it
were a special assessment and be paid from the eminent domain award. The constitutionality and operation of
these provisions of the Act have not been tested in the courts. Due to problems of collecting taxes from public
agencies, if a substantial portion of land within Improvement Area No. 1 was to become owned by public
agencies, collection of the Special Tax might become more difficult and could result in collections of the
Special Tax which might not be sufficient to pay principal of and interest on the Bonds when due and a default
could occur with respect to the payment of such principal and interest.
Failure to Develop Properties
Development of property within Improvement Area No. 1 may be subject to unexpected delays,
disruptions and changes which may affect the willingness and ability of SLF, the builders, or any property
owner to pay the Special Taxes when due. Land development is subject to comprehensive federal, State and
local regulations. Approval is required from various agencies in connection with the layout and design of
developments, the nature and extent of improvements, construction activity, land use, zoning, school and
health requirements, as well as numerous other matters. There is always the possibility that such approvals
will not be obtained or, if obtained, will not be obtained on a timely basis. Failure to obtain any such agency
approval or satisfy such governmental requirements would adversely affect planned land development.
Development of land in Improvement Area No. 1 is also subject to the availability of water. Finally,
development of land is subject to economic considerations.
52
SLF reports that the major infrastructure (sewer, water, storm drains, utilities, and arterial roads) to be
installed by SLF to serve the property within Improvement Area No. 1 is substantially complete. In-tract
improvements are expected to be constructed by the current homebuilders and LMC Millenia Company as
development within their respective projects is completed.
A majority of the property owned by SLF and the builders within Improvement Area No. 1 is in a
mass graded or a finished lot condition. No assurance can be given that the remaining proposed development
will be partially or fully completed; and for purposes of evaluating the investment quality of the Bonds,
prospective purchasers should consider the possibility that such parcels will remain unimproved.
Undeveloped or partially developed land is inherently less valuable than developed land and provides
less security to the Bondowners should it be necessary for the District to foreclose on the property due to the
nonpayment of Special Taxes. The failure to complete development of the required infrastructure for
development in Improvement Area No. 1 as planned, or substantial delays in the completion of the
development or the required infrastructure for the development due to litigation or other causes may reduce the
value of the property within Improvement Area No. 1 and increase the length of time during which Special
Taxes will be payable from undeveloped property, and may affect the willingness and ability of the owners of
property within Improvement Area No. 1 to pay the Special Taxes when due.
There can be no assurance that land development operations within Improvement Area No. 1 will not
be adversely affected by future deterioration of the real estate market and economic conditions or future local,
State and federal governmental policies relating to real estate development, an increase in mortgage interest
rates, the income tax treatment of real property ownership, or the national economy. A slowdown of the
development process and the absorption rate could adversely affect land values and reduce the ability or desire
of the property owners to pay the annual Special Taxes. In that event, there could be a default in the payment
of principal of, and interest on, the Bonds when due.
Bondowners should assume that any event that significantly impacts the ability to develop land in
Improvement Area No. 1 would cause the property values within Improvement Area No. 1 to decrease
substantially from those estimated by the Appraiser and could affect the willingness and ability of the owners
of land within Improvement Area No. 1 to pay the Special Taxes when due.
The District will levy Special Taxes on Undeveloped Property for Fiscal Year 2018-19 and expects to
levy Special Taxes on Undeveloped Property in future fiscal years until the Special Taxes levied on Developed
Property are sufficient to fund the Special Tax Requirement. Undeveloped Property is less valuable per unit of
area than Developed Property, especially if there are no plans to develop such land or if there are severe
restrictions on the development of such land. The Undeveloped Property also provides less security to the
Bondowners should it be necessary for the District to foreclose on Undeveloped Property due to the
nonpayment of the Special Taxes. Furthermore, an inability to develop the land within Improvement Area No.
1 as currently proposed will make the Bondowners dependent upon timely payment of the Special Taxes levied
on Undeveloped Property. A slowdown or stoppage in the continued development of Improvement Area No. 1
could reduce the willingness and ability of SLF, the builders, or any successors, to make Special Tax payments
on Undeveloped Property and could greatly reduce the value of such property in the event it has to be
foreclosed upon. See “—Property Values.”
Natural Disasters
Improvement Area No. 1, like all California communities, may be subject to unpredictable seismic
activity, fires, floods, or other natural disasters. No known active or potentially active faults, as defined in the
Alquist-Priolo Earthquake Fault Zone Act, cross the property within Improvement Area No. 1, and
Improvement Area No. 1 is not located in an Alquist-Priolo Earthquake Study Zone. However, Southern
California is a seismically active area; and active faults exist within the vicinity of Improvement Area No. 1.
Seismic activity represents a potential risk for damage to buildings, roads, and property within Improvement
53
Area No. 1. In addition, land susceptible to seismic activity may be subject to liquefaction during the
occurrence of such event. Improvement Area No. 1 is not located in a flood plain area.
In recent years, wildfires have caused extensive damage throughout the State, including within the
County. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases
thousands of homes. In some instances entire neighborhoods have been destroyed. Several fires which occurred in
2017 damaged or destroyed property in areas that were not previously considered to be at risk from such events.
Some commentators believe that climate change will lead to even more frequent and damaging wildfires in the
future. The Millenia project, including the property within Improvement Area No. 1, is not located in an area
which the Department of Forestry and Fire Protection of the State of California has designated as a very high fire
hazard severity zone. However, vacant areas which are adjacent to the Millenia project with brush that is not
controlled could pose a fire risk to the development within the Millenia project.
In the event of a severe earthquake, wildfire, flood or other natural disaster, there may be significant
damage to both property and infrastructure in Improvement Area No. 1. As a result, a substantial portion of
the property owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of
land in Improvement Area No. 1 could be diminished in the aftermath of such a natural disaster, reducing the
resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.
Endangered/Threatened Species
During the 1990s, there was an increase in activity at the State and federal level related to the possible
listing of certain plant and animal species found in the Southern California area as endangered or threatened
species. In response to this activity, several large landowners began an effort to move away from “species by
species” entitlement to multiple species entitlement, in order to minimize the risk of future species listings and
maximize the certainty of development. The Final EIR found that mitigation measures would reduce all
potentially direct and indirect impacts of the Millenia project to plant and wildlife to less than significant. All
open space dedications for the property in Improvement Area No. 1 have been completed.
Hazardous Substances
The presence of hazardous substances on a parcel may result in a reduction in the value of a parcel. In
general, the owners and operators of a parcel may be required by law to remedy conditions of the parcel
relating to releases or threatened releases of hazardous substances. The Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or
the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with
regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator
is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has
anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the
taxed parcels be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the
costs of remedying the condition, because the purchaser, upon becoming the owner, will become obligated to
remedy the condition just as is the seller.
Further, it is possible that liabilities may arise in the future with respect to any of the parcels resulting
from the existence, currently, on the parcel of a substance presently classified as hazardous but which has not
been released or the release of which is not presently threatened, or may arise in the future resulting from the
existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the
future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous
substance but from the method of handling such substance. All of these possibilities could significantly affect
the value of a parcel that is realizable upon a delinquency and the willingness or ability of the owner of any
parcel to pay the Special Tax installments.
54
The value of the taxable property within Improvement Area No. 1, as set forth in the various tables in
this Official Statement, does not reflect the presence of any hazardous substance or the possible liability of the
owner (or operator) for the remedy of a hazardous substance condition of the property. Although due to the
use of pesticides in connection with the prior agricultural use of portions of the land within Improvement Area
No. 1, the grading of the land included special handling and reuse of soil on site pursuant to a soil reuse plan,
SLF has represented to the District that it is not aware of any hazardous substance condition of the property
within Improvement Area No. 1. The District has not independently verified, but is not aware, that any owner
(or operator) of any of the parcels within Improvement Area No. 1 has such a current liability with respect to
any such parcel. However, it is possible that such liabilities do currently exist and that the District is not aware
of them.
Payment of the Special Tax is not a Personal Obligation of the Property Owners
An owner of a taxable parcel is not personally obligated to pay the Special Tax. Rather, the Special
Tax is an obligation which is secured only by a lien against the taxable parcel. If the value of a taxable parcel
is not sufficient, taking into account other liens imposed by public agencies, to secure fully the Special Tax, the
District has no recourse against the property owner.
Property Values
The value of the property within Improvement Area No. 1 is a critical factor in determining the
investment quality of the Bonds. If a property owner is delinquent in the payment of Special Taxes, the
District’s only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to
obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy,
physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development or
other events will adversely impact the security underlying the Special Taxes. See “IMPROVEMENT AREA
NO. 1 — Appraised Value-to-Lien Ratios.”
The Appraiser has estimated, on the basis of certain definitions, contingencies, assumptions and
limiting conditions contained in the Appraisal Report that as of February 1, 2018, the market value of the land
and improvements within Improvement Area No. 1 was approximately $62,228,054. The Appraisal Report is
based on a number of assumptions and limiting conditions as stated in APPENDIX B-1 — “APPRAISAL
REPORT.” The Appraisal Report does not reflect any possible negative impact which could occur by reason
of future slow or no growth voter initiatives, an economic downturn, any potential limitations on development
occurring due to time delays, an inability of any landowner to obtain any needed development approval or
permit, the presence of hazardous substances or other adverse soil conditions within Improvement Area No. 1,
the listing of endangered species or the determination that habitat for endangered or threatened species exists
within Improvement Area No. 1, or other similar situations.
Prospective purchasers of the Bonds should not assume that the land and improvements within
Improvement Area No. 1 could be sold for the amount stated in the Appraisal Report at a foreclosure sale for
delinquent Special Taxes. In arriving at the estimate of market value, the Appraiser assumes that any property
will be sold in a competitive market after a reasonable exposure time, and assuming that neither the buyer or
seller is under duress, which is not always present in a foreclosure sale. See APPENDIX B-1 —
“APPRAISAL REPORT” for a description of other assumptions made by the Appraiser and for the definitions
and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser’s assumptions to
be untrue could result in a reduction of the value of the land within Improvement Area No. 1 from that
estimated by the Appraiser.
The assessed values set forth in this Official Statement do not represent market values arrived at
through an appraisal process and generally reflect only the sales price of a parcel when acquired by its current
owner, adjusted annually by an amount determined by the County Assessor, generally not to exceed an
55
increase of more than 2% per fiscal year. No assurance can be given that a parcel could actually be sold for its
assessed value.
No assurance can be given that any bid will be received for a parcel with delinquent Special Taxes
offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent
Special Taxes. See APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE BOND
INDENTURE — COVENANTS AND WARRANTY — Covenants — Commence Foreclosure Proceedings.”
See “IMPROVEMENT AREA NO. 1 — Expected Tax Burden” for a description the requirement for
a homebuilder prepay a portion of the Special Tax at the time a completed home is sold, if, based on the actual
sales price of such home, the annual total effective tax rate on such parcel would exceed 2.00% of the actual
sales price. Such prepaid Special Taxes would be applied to redeem Bonds. See “THE BONDS —
Redemption — Extraordinary Redemption from Special Tax Prepayments”
Parity Taxes and Special Assessments
Property within Improvement Area No. 1 is subject to taxes and assessments imposed by other public
agencies also having jurisdiction over the land within Improvement Area No. 1. See “IMPROVEMENT
AREA NO. 1 — Direct and Overlapping Indebtedness” for a description of the public agencies that have
issued debt secured by taxes and assessments levied on property within Improvement Area No. 1 and the
School District CFDs, which may issue debt secured by special taxes levied on property within Improvement
Area No. 1 in the future.
The Special Taxes and any penalties thereon will constitute a lien against the lots and parcels of land
on which they will be annually imposed until they are paid. Such lien is on a parity with all special taxes and
special assessments levied by other agencies and is co-equal to and independent of the lien for general property
taxes regardless of when they are imposed upon the same property. The Special Taxes have priority over all
existing and future private liens imposed on the property except, possibly, for liens or security interests held by
the Federal Deposit Insurance Corporation or other federal agencies. See “— FDIC/Federal Government
Interest in Properties” and “— Bankruptcy and Foreclosure.”
Neither the District nor the City has control over the ability of other entities and districts to
issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a
portion of the property within Improvement Area No. 1. In addition, the landowners within
Improvement Area No. 1 may, without the consent or knowledge of the District, petition other public
agencies to issue public indebtedness secured by special taxes and ad valorem taxes or assessments. Any
such special taxes or assessments may have a lien on such property on a parity with the Special Taxes
and could reduce the estimated value-to-lien ratios for the property within Improvement Area No. 1
described herein. See “SOURCES OF PAYMENT FOR THE BONDS” and “IMPROVEMENT AREA
NO. 1— Direct and Overlapping Indebtedness” and “— Appraised Value to Lien Ratios.”
Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Special Tax even if the value is sufficient
may be affected by whether or not the owner was given due notice of the Special Tax authorization at the time
the owner purchased the parcel, was informed of the amount of the Special Tax on the parcel should the
Special Tax be levied at the maximum tax rate and the risk of such a levy and, at the time of such a levy, has
the ability to pay it as well as pay other expenses and obligations. The City has caused a notice of the Special
Tax to be recorded in the Office of the Recorder for the County against each parcel. While title companies
normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if
made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a
property within Improvement Area No. 1 or lending of money thereon.
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The Act requires the subdivider (or its agent or representative) of a subdivision to notify a prospective
purchaser or long-term lessor of any lot, parcel, or unit subject to a special tax under the Act of the existence
and maximum amount of such special tax using a statutorily prescribed form. California Civil Code
Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the
seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a
format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or
failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could
adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.
Special Tax Delinquencies
Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of
principal of, and interest on, the Bonds are derived, will be billed to the properties within Improvement Area
No. 1 on the regular ad valorem property tax bills sent to owners of such properties by the County Tax
Collector. The Act currently provides that such Special Tax installments are due and payable, and bear the
same penalties and interest for non-payment, as do ad valorem property tax installments.
See APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE —
MISCELLANEOUS CONDITIONS — Covenants” for a discussion of the provisions which apply, and
procedures which the District is obligated to follow under the Indenture, in the event of delinquencies in the
payment of Special Taxes. See “— Bankruptcy and Foreclosure” for a discussion of the policy of the Federal
Deposit Insurance Corporation regarding the payment of special taxes and assessment and limitations on the
District’s ability to foreclosure on the lien of the Special Taxes in certain circumstances.
FDIC/Federal Government Interests in Properties
General. The ability of the District to foreclose the lien of delinquent unpaid Special Tax installments
may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the “FDIC”), the
Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest.
The supremacy clause of the United States Constitution reads as follows: “This Constitution, and the
Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be
made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every
State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary
notwithstanding.”
This means that, unless Congress has otherwise provided, if a federal governmental entity owns a
parcel that is subject to Special Taxes within Improvement Area No. 1 but does not pay taxes and assessments
levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on
the parcel to collect the delinquent taxes and assessments.
Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest
in the parcel and the District wishes to foreclose on the parcel as a result of delinquent Special Taxes, the
property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent
taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage
interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit
held that the Federal National Mortgage Association (“FNMA”) is a federal instrumentality for purposes of
this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest
held by FNMA constitutes an exercise of state power over property of the United States.
The District has not undertaken to determine whether any federal governmental entity currently has, or
is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the Special
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Taxes within Improvement Area No. 1, and therefore expresses no view concerning the likelihood that the
risks described above will materialize while the Bonds are outstanding.
FDIC. In the event that any financial institution making any loan which is secured by real property
within Improvement Area No. 1 is taken over by the FDIC, and prior thereto or thereafter the loan or loans go
into default, resulting in ownership of the property by the FDIC, then the ability of the District to collect
interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may
be limited. The FDIC’s policy statement regarding the payment of state and local real property taxes (the
“Policy Statement”) provides that property owned by the FDIC is subject to state and local real property taxes
only if those taxes are assessed according to the property’s value, and that the FDIC is immune from real
property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC
will pay its property tax obligations when they become due and payable and will pay claims for delinquent
property taxes as promptly as is consistent with sound business practice and the orderly administration of the
institution’s affairs, unless abandonment of the FDIC’s interest in the property is appropriate. The FDIC will
pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the
interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of
fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including
interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by
the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the
FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC’s consent. In addition,
the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without
the FDIC’s consent.
The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including
special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that
the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it
purports to secure the payment of any such amounts. Special taxes imposed under the Act and a special tax
formula which determines the special tax due each year are specifically identified in the Policy Statement as
being imposed each year and therefore covered by the FDIC’s federal immunity. The Ninth Circuit has issued
a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from special
taxes under the Act.
The District is unable to predict what effect the application of the Policy Statement would have in the
event of a delinquency in the payment of Special Taxes on a parcel within Improvement Area No. 1 in which
the FDIC has or obtains an interest, although prohibiting the lien of the Special Taxes to be foreclosed out at a
judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a
foreclosure sale. Such an outcome could cause a draw on the Reserve Fund and perhaps, ultimately, if enough
property were to become owned by the FDIC, a default in payment on the Bonds.
Bankruptcy and Foreclosure
Bankruptcy, insolvency and other laws generally affecting creditors’ rights could adversely impact the
interests of owners of the Bonds in at least two ways. First, the payment of property owners’ taxes and the
ability of the District to foreclose the lien of a delinquent unpaid Special Tax pursuant to its covenant to pursue
judicial foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting
creditors’ rights or by the laws of the State relating to judicial foreclosure. See “SOURCES OF PAYMENT
FOR THE BONDS—Special Taxes—Proceeds of Foreclosure Sales.” In addition, the prosecution of a
foreclosure could be delayed due to many reasons, including crowded local court calendars or lengthy
procedural delays.
Second, the Bankruptcy Code might prevent moneys on deposit in the Acquisition and Construction
Fund from being applied to pay interest on the Bonds and/or to redeem Bonds if bankruptcy proceedings were
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brought by or against a landowner or other party and if the court found that the landowner or other party had an
interest in such moneys within the meaning of Section 541(a)(1) of the Bankruptcy Code.
Although a bankruptcy proceeding would not cause the Special Taxes to become extinguished, the
amount of any Special Tax lien could be modified if the value of the property falls below the value of the lien.
If the value of the property is less than the lien, such excess amount could be treated as an unsecured claim by
the bankruptcy court. In addition, bankruptcy of a property owner could result in a delay in prosecuting
Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in
payment of delinquent Special Tax installments and the possibility of delinquent Special Tax installments not
being paid in full.
On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a
bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property
taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a
petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property.
Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes
imposed after the filing of the bankruptcy petition were declared to be “administrative expenses” of the
bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclose on
the property and retain all the proceeds of the sale except the amount of the pre-petition taxes.
The Bankruptcy Reform Act of 1994 (the “Bankruptcy Reform Act”) included a provision which
excepts from the Bankruptcy Code’s automatic stay provisions, “the creation of a statutory lien for an ad
valorem property tax imposed by . . . a political subdivision of a state if such tax comes due after the filing of
the petition [by a debtor in bankruptcy court].” This amendment effectively makes the Glasply holding
inoperative as it relates to ad valorem real property taxes. However, it is possible that the original rationale of
the Glasply ruling could still result in the treatment of post-petition special taxes as “administrative expenses,”
rather than as tax liens secured by real property, at least during the pendency of bankruptcy proceedings.
According to the court’s ruling, as administrative expenses, post-petition taxes would be paid,
assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such
administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy
estate (through foreclosure or otherwise), it would at that time become subject to current ad valorem taxes.
The Act provides that the Special Taxes are secured by a continuing lien which is subject to the same
lien priority in the case of delinquency as ad valorem taxes. No case law exists with respect to how a
bankruptcy court would treat the lien for Special Taxes levied after the filing of a petition in bankruptcy court.
Glasply is controlling precedent on bankruptcy courts in the State. If the Glasply precedent was applied to the
levy of the Special Taxes, the amount of Special Taxes received from parcels whose owners declare
bankruptcy could be reduced.
The various legal opinions to be delivered concurrently with the delivery of the Bonds (including
Bond Counsel’s approving legal opinion) will be qualified, as to the enforceability of the various legal
instruments, by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting the rights
of creditors generally.
No Acceleration Provision
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a
payment default or other default under the terms of the Bonds or the Indenture or in the event interest on the
Bonds becomes included in gross income for federal income tax purposes. Pursuant to the Indenture, an owner
is given the right for the equal benefit and protection of all owners of the Bonds similarly situated to pursue
certain remedies described in APPENDIX E — “SUMMARY OF CERTAIN PROVISIONS OF THE BOND
INDENTURE — EVENTS OF DEFAULT” and “— Limitations on Rights and Remedies of Owners.”
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Loss of Tax Exemption
As discussed under the caption “TAX MATTERS” herein, interest on the Bonds could become
includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were
issued as a result of future acts or omissions of the District in violation of its covenants in the Indenture with
respect to compliance with certain provisions of the Internal Revenue Code of 1986. Should such an event of
taxability occur, the Bonds are not subject to early redemption and will remain outstanding until maturity or
until redeemed under the redemption provisions contained in the Indenture.
Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary
market exists, that such Bonds can be sold for any particular price. Although the District has committed to
provide certain statutorily required financial and operating information, there can be no assurance that such
information will be available to Bondowners on a timely basis. See “CONTINUING DISCLOSURE.” Any
failure to provide annual financial information, if required, does not give rise to monetary damages but merely
an action for specific performance. Occasionally, because of general market conditions, lack of current
information, the absence of a credit rating for the Bonds or because of adverse history or economic prospects
connected with a particular issue, secondary marketing practices in connection with a particular issue are
suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon
then prevailing circumstances. Such prices could be substantially different from the original purchase price.
Proposition 218
An initiative measure commonly referred to as the “Right to Vote on Taxes Act” (the “Initiative”) was
approved by the voters of the State at the November 5, 1996 general election. The Initiative added
Article XIIIC and Article XIIID to the California Constitution. According to the “Title and Summary” of the
Initiative prepared by the California Attorney General, the Initiative limits “the authority of local governments
to impose taxes and property-related assessments, fees and charges.” The provisions of the Initiative as they
may relate to community facilities district are subject to interpretation by the courts. The Initiative could
potentially impact the Special Taxes available to the District to pay the principal of and interest on the Bonds
as described below.
Among other things, Section 3 of Article XIIIC states that “. . . the initiative power shall not be
prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.”
The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the
rate and method of apportionment of an existing special tax. However, the Act prohibits a legislative body
from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax
pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the
reduction or termination of the special tax would not interfere with the timely retirement of that debt. On
July 1, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854,
which states that:
“Section 3 of Article XIIIC of the California Constitution, as adopted at the
November 5, 1996, general election, shall not be construed to mean that any owner or
beneficial owner of a municipal security, purchased before or after that date, assumes the risk
of, or in any way consents to, any action by initiative measure that constitutes an impairment
of contractual rights protected by Section 10 of Article I of the United States Constitution.”
Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not conferred
on the voters the power to repeal or reduce the Special Taxes if such reduction would interfere with the timely
retirement of the Bonds.
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It may be possible, however, for voters or the City Council acting as the legislative body of the
District to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the
Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the
existing levels. Furthermore, no assurance can be given with respect to the future levy of the Special Taxes in
amounts greater than the amount necessary for the timely retirement of the Bonds. Therefore, no assurance
can be given with respect to the levy of Special Taxes for Administrative Expenses. Nevertheless, to the
maximum extent that the law permits it to do so, the District will covenant that it will not initiate proceedings
under the Act to reduce the maximum Special Tax rates on parcels within Improvement Area No. 1 other than
as authorized under the Indenture. The District will also covenant that, in the event an initiative is adopted
which purports to alter the Rate and Method, it will commence and pursue legal action in order to preserve its
ability to comply with the foregoing covenant. However, no assurance can be given as to the enforceability of
the foregoing covenants.
The interpretation and application of Article XIIIC and Article XIIID will ultimately be determined by
the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict
with certainty the outcome of such determination or the timeliness of any remedy afforded by the courts. See
“SPECIAL RISK FACTORS — Limitations on Remedies.”
Shapiro Decision
The California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of
San Diego v. Melvin Shapiro, et al. (D063997) (the “San Diego Decision”). The case involved a Convention
Center Facilities District (the “CCFD”) established by the City of San Diego (“San Diego”). The CCFD is a
financing district much like a community facilities district established under the provisions of the Act. The
CCFD is comprised of all of the real property in San Diego. However, the special tax to be levied within the
CCFD was to be levied only on hotel properties located within the CCFD.
The election authorizing the special tax was limited to owners of hotel properties and lessees of real
property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered
voter election. Such approach to determining who would constitute the qualified electors of the CCFD was
modeled after Section 53326(c) of the Act, which generally provides that, if a special tax will not be
apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by
the landowners of the proposed district whose property would be subject to the special tax. The Court held that
the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4
thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters
within the district.
The facts of the San Diego Decision show that there were thousands of registered voters within the
CCFD (viz., all of the registered voters in San Diego). The election held in Improvement Area No. 1 had less
than 12 registered voters at the time of the election to authorize the Special Tax. In the San Diego Decision,
the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes
pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the
Court’s holding does not apply to the Special Tax election in Improvement Area No. 1. Moreover, Section
53341 of the Act provides that any “action or proceeding to attack, review, set aside, void or annul the levy of
a special tax…shall be commenced within 30 days after the special tax is approved by the voters.” Similarly,
Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the Act
be brought within 30 days of the voters approving the issuance of such bonds. Based on Sections 53341 and
53359 of the Act and analysis of existing laws, regulations, rulings and court decisions, Bond Counsel is of the
opinion that no successful challenge to the Special Tax being levied in accordance with the Rate and Method
may now be brought.
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Ballot Initiatives
Articles XIII A, XIII B, XIII C and XIII D were adopted pursuant to measures qualified for the ballot
pursuant to California’s constitutional initiative process and the State Legislature has in the past enacted
legislation which has altered the spending limitations or established minimum funding provisions for particular
activities. On March 6, 1995, in the case of Rossi v. Brown, the State Supreme Court held that an initiative can
repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the
referendum requirements does not apply to initiatives. From time to time, other initiative measures could be
adopted by California voters or legislation enacted by the legislature. The adoption of any such initiative or
legislation might place limitations on the ability of the State, the City, or local districts to increase revenues or
to increase appropriations or on the ability of SLF or the builders within Improvement Area No. 1 to complete
the remaining proposed development within Improvement Area No. 1.
Limitations on Remedies
Remedies available to the owners of the Bonds may be limited by a variety of factors and may be
inadequate to assure the timely payment of principal of and interest on the Bonds or to preserve the tax-exempt
status of interest on the Bonds.
Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Indenture to the
extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium, or other similar laws affecting generally the enforcement of creditor’s rights, by
equitable principles and by the exercise of judicial discretion and by limitations on remedies against public
agencies in the State of California. The Bonds are not subject to acceleration. The lack of availability of
certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights
of the owners.
CONTINUING DISCLOSURE
District Continuing Disclosure
Pursuant to a Continuing Disclosure Agreement (the “District Continuing Disclosure Agreement”),
the District will agree to provide, or cause to be provided, to the Municipal Securities Rulemaking Board
through its Electronic Municipal Market Access (EMMA) website, or other repository authorized under
Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission, certain annual financial information
and operating data concerning Improvement Area No. 1. The District Reports are to be filed not later than
March 31 of each year, beginning March 31, 2019. The District Reports will include the audited financial
statements of the District, if any are prepared. The District does not currently prepare audited financial
statements and does not anticipate doing so in the future. The full text of the District Continuing Disclosure
Agreement is set forth in APPENDIX F — “FORM OF DISTRICT CONTINUING DISCLOSURE
AGREEMENT.”
Notwithstanding any provision of the Indenture, failure of the District to comply with the District
Continuing Disclosure Agreement shall not be an event of default under the Indenture. However, any Owner
or Beneficial Owner of the Bonds may take such action as is necessary and appropriate, including seeking
mandate or a judgment for specific performance, to cause the District to comply with its obligations with
respect to the District Continuing Disclosure Agreement.
The District has not entered into any prior continuing disclosure obligations. During the last five
years, the City and certain of its related entities, have failed to comply in certain respects described below with
continuing disclosure undertakings related to outstanding bonded indebtedness.
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The City and certain other entities related to the City, including the former Redevelopment Agency of
the City of Chula Vista (“Former Agency”), various community facilities districts and joint powers authorities
(together, the “City Entities”), have entered into previous undertakings pursuant to the Rule. Within the last
five years, the City and certain of the City Entities have failed to comply with their respective prior
undertakings in the following respects: (i) pursuant to the undertakings for certain of the community facilities
districts, such community facilities districts were twelve days late in filing the City’s audited financial
statements in 2013; (ii) pursuant to the undertaking for one series of the Former Agency’s bonds, the Former
Agency’s Fiscal Year 2012 annual report due in February 2013 was not filed until March 2013, 27 days late;
(iii) notice of certain ratings changes relating to several issues resulting from changes in ratings on municipal
bond insurance companies were not promptly filed and one notice of an underlying rating change was filed 37
days after the rating change occurred; and (iv) in certain cases information was timely filed on EMMA under
the applicable base CUSIP number for the issuer but not linked to all of the individual CUSIP numbers for a
series of bonds.
The City has adopted policies and procedures regarding compliance with undertakings made by the
City and the City Entities pursuant to the Rule and has retained the services of outside consultants to assist in
the reporting process. The City’s Finance Department has assigned a specific person to coordinate with the
outside consultants and to monitor compliance.
Developer Continuing Disclosure
To provide updated information with respect to the developments within Improvement Area No. 1,
each of SLF, Shea Homes, KB Home California, CalAtlantic and LMC Millenia Company will enter into a
Continuing Disclosure Agreement (the “Developer Continuing Disclosure Certificates”), and will covenant to
provide separate annual reports not later than March 31 of each year beginning March 31, 2019, and
semiannual reports on each September 30, beginning September 30, 2019, until satisfaction of certain
conditions set forth in the applicable Developer Continuing Disclosure Certificate. Such periodic reports to be
provided by such entities will contain updates regarding their respective development within Improvement
Area No. 1 as outlined in Section 4 of each Developer Continuing Disclosure Certificate attached as
APPENDIX G. In addition to the periodic reports, each of such entities will agree to provide notices of certain
events set forth in its Developer Continuing Disclosure Certificate. The termination of such reporting
requirements varies among such continuing disclosure undertakings. See APPENDIX G hereto.
TAX MATTERS
In the opinion of Best Best & Krieger LLP, San Diego, California, Bond Counsel, under existing
statutes, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for
federal income tax purposes. In the further opinion of Bond Counsel, interest on the Bonds is exempt from
State of California personal income tax. Bond Counsel notes that interest on the Bonds is not an item of tax
preference for purposes of calculating the federal alternative minimum tax.
Bond Counsel’s opinion as to the exclusion from gross income for federal income tax purposes of
interest on the Bonds is based upon certain representations of fact and certifications made by the District, the
Underwriter and others and is subject to the condition that the City complies with all requirements of the
Internal Revenue Code of 1986, as amended (the “Code”) and the regulations adopted pursuant to the Code
(the “Treasury Regulations”) that must be satisfied subsequent to the issuance of the Bonds to assure that
interest on the Bonds will not become includable in gross income for federal income tax purposes. Failure to
comply with such requirements of the Code and the Treasury Regulations might cause interest on the Bonds to
be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds.
The District will covenant in the Indenture and the Tax Certificate to be delivered in connection with the
issuance of the Bonds to comply with all such requirements.
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Should the interest on the Bonds become includable in gross income for federal income tax purposes,
the Bonds are not subject to early redemption as a result of such occurrence and will remain outstanding until
maturity or until otherwise redeemed in accordance with the Indenture.
Future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause
interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or
exempted from state income taxation, or otherwise prevent Bond Owners from realizing the full current benefit
of the tax status of such interest. For example, legislative proposals are announced from time to time which
generally would limit the exclusion from gross income of interest on obligations like the Bonds to some extent
for taxpayers who are individuals and whose income is subject to higher marginal income tax rates. Other
proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from
gross income of interest on obligations like the Bonds. The introduction or enactment of any such legislative
proposals, clarification of the Code or court decisions may also affect, perhaps significantly, the market price
for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors
regarding any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the
impact of future legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Bond Counsel’s opinion may be affected by action taken (or not taken) or events occurring (or not
occurring) after the date of issuance of the Bonds. Bond Counsel has not undertaken to determine, or to inform
any person, whether any such action or events are taken or do occur, or whether such actions or events may
adversely affect the value or tax treatment of a Bond, and Bond Counsel expresses no opinion with respect
thereto.
Although Bond Counsel will render an opinion that interest on the Bonds is excluded from gross
income for federal income tax purposes provided the District continues to comply with certain requirements of
the Code, the accrual or receipt of interest on the Bonds may otherwise affect the tax liability of the recipient.
The extent of these other tax consequences will depend upon the recipient’s particular tax status and other
items of income or deductions. Bond Counsel expresses no opinion regarding any such consequences.
Accordingly, all potential purchasers should consult their tax advisors before purchasing any of the Bonds.
A copy of the proposed form of Bond Counsel opinion is attached hereto as APPENDIX C.
SUBSEQUENT TO THE ISSUANCE OF THE BONDS THERE MIGHT BE FEDERAL, STATE,
OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR
INTERPRETATIONS OF FEDERAL, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL,
STATE, OR LOCAL TAX TREATMENT OF THE BONDS. THESE CHANGES COULD ADVERSELY
AFFECT THE MARKET VALUE OR LIQUIDITY OF THE BONDS. IT IS POSSIBLE THAT
LEGISLATIVE CHANGES WILL BE INTRODUCED WHICH, IF ENACTED, WOULD RESULT IN
ADDITIONAL FEDERAL INCOME OR STATE TAX BEING IMPOSED ON OWNERS OF TAX-
EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE BONDS. NO ASSURANCE CAN BE
GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE BONDS STATUTORY CHANGES WILL
NOT BE INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL
NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE
BONDS, ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING
POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR
INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE
BONDS.
LEGAL MATTERS
The legal opinion of Best Best & Krieger LLP, San Diego, California, Bond Counsel, approving the
validity of the Bonds in substantially the form set forth as APPENDIX C hereto, will be made available to
purchasers at the time of original delivery. Certain legal matters will be passed upon for the District by
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Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure
Counsel and for the Underwriter by Jones Hall, A Professional Law Corporation, San Francisco, California, as
counsel to the Underwriter. Bond Counsel expresses no opinion to the Owners of the Bonds as to the
accuracy, completeness or fairness of this Official Statement or other offering materials relating to the Bonds
and expressly disclaims any duty to do so.
ABSENCE OF LITIGATION
No litigation is pending or, to the knowledge of the District, threatened concerning the validity of the
Bonds and a certificate of the District to that effect will be furnished to the Underwriter at the time of the
original delivery of the Bonds. Neither the City nor the District is aware of any litigation pending or
threatened which questions the existence of the District or the City or contests the authority of the District to
levy and collect the Special Taxes or to issue and retire the Bonds.
NO RATING
The District has not made and does not contemplate making application to any rating agency for the
assignment of a rating to the Bonds.
UNDERWRITING
The Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”).
The Underwriter has agreed to purchase the Bonds at a price of $________ (being $_________ aggregate
principal amount thereof, plus/less net original issue premium/discount of $_______ and less Underwriter’
discount of $________). The purchase contract relating to the Bonds provides that the Underwriter will
purchase all of the Bonds if any are purchased. The obligation to make such purchase is subject to certain
terms and conditions set forth in the purchase contract, the approval of certain legal matters by counsel and
certain other conditions.
Under certain circumstances, the Underwriter may offer and sell the Bonds to certain dealers and
others at prices lower than the offering price stated on the page immediately following the cover page hereof.
The offering prices may be changed from time to time by the Underwriter.
FINANCIAL INTERESTS
The fees being paid to the Underwriter, the Municipal Advisor to the City, the Fiscal Agent and
Underwriter’s Counsel are contingent upon the issuance and delivery of the Bonds. The fees being paid to
Bond Counsel, Disclosure Counsel, the Appraiser, to the Market Absorption Analyst and to the Special Tax
Consultant are not contingent upon the issuance and delivery of the Bonds. From time to time, Bond Counsel
and Disclosure Counsel represent the Underwriter on matters unrelated to the Bonds.
PENDING LEGISLATION
The District is not aware of any significant pending legislation which would have material adverse
consequences on the Bonds or the ability of the District to pay the principal of and interest on the Bonds when
due.
ADDITIONAL INFORMATION
The purpose of this Official Statement is to supply information to prospective buyers of the Bonds.
Quotations and summaries and explanations of the Bonds and documents contained in this Official Statement
do not purport to be complete, and reference is made to such documents for full and complete statements and
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their provisions. Any statements in this Official Statement involving matters of opinion, whether or not
expressly so stated, are intended as such and not as representations of fact.
The execution and delivery of this Official Statement by the Director of Finance/Treasurer has been
duly authorized by the City Council of the City of Chula Vista acting in its capacity as the legislative body of
the District.
COMMUNITY FACILITIES DISTRICT NO. 16-I
(MILLENIA)
By:
Director of Finance/Treasurer
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APPENDIX A
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 16-I (MILLENIA)
IMPROVEMENT AREA NO. 1
A Special Tax shall be levied on all Taxable Property within the boundaries of Improvement Area No. 1 of
Community Facilities District No. 16-I (Millenia) of the City of Chula Vista (“IA1”) and collected each Fiscal
Year commencing in Fiscal Year 2016-17, in an amount determined by the CFD Administrator through the
application of the procedures described below. All of the real property within IA1, unless exempted by law or
by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.
1. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if
the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Map. An
Acre means 43,560 square feet of land. If the preceding maps for a land area are not available, the Acreage of
such land area shall be determined by the City Engineer.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of
Division 2 of Title 5 of the Government Code of the State of California.
“Administrative Expense Requirement” means an annual amount equal to $75,000, or such lesser amount as
may be designated by written instruction from an authorized representative of the City to the Fiscal Agent, to
be allocated as the first priority of Special Taxes received each Fiscal Year for the payment of Administrative
Expenses.
“Administrative Expenses” means the following actual or reasonably estimated costs related to the
administration of IA1 including, but not limited to: the costs of preparing and computing the Annual Special
Tax (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the
City, the County or otherwise); the costs of remitting the Special Taxes to the Fiscal Agent; the costs of the
Fiscal Agent (including its legal counsel) in the discharge of the duties required of it under the Fiscal Agent
Agreement; the costs to the City, CFD No. 16-I, or any designee thereof complying with arbitrage rebate
requirements, including without limitation rebate liability costs and periodic rebate calculations; the costs to
the City, CFD No. 16-I, or any designee thereof complying with disclosure or reporting requirements of the
City or CFD No. 16-I, associated with applicable federal and State laws; the costs associated with preparing
Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs to
the City, CFD No. 16-I, or any designee thereof related to an appeal of the Special Tax; and the City’s annual
administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or
advanced by the City or CFD No. 16-I for any other administrative purposes of CFD No. 16-I, including
attorney’s fees and other costs related to commencing and pursuing any foreclosure of delinquent Special
Taxes.
“Annual Special Tax” means the Special Tax actually levied in any Fiscal Year on any Assessor’s Parcel.
“Assessor” means the Assessor of the County of San Diego.
“Assessor’s Parcel” means a lot or parcel shown on an Assessor’s Parcel Map with an assigned Assessor’s
Parcel Number.
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“Assessor’s Parcel Map” means an official map of the Assessor designating parcels by Assessor’s Parcel
Number.
“Assessor’s Parcel Number” means the number assigned to an Assessor’s Parcel by the County for purposes
of identification.
“Assigned Special Tax” means the Special Tax of that name described in Section 3.A below.
“Backup Special Tax” means the Special Tax of that name described in Section 3.B below.
“Bonds” means any bonds or other debt of CFD No. 16-I issued or incurred for IA1, whether in one or more
series, secured by the levy of Special Taxes.
“Building Permit” means a building permit for construction of a Residential Unit or non-residential structure
within IA1 issued by the City.
“Building Square Footage” means all of the square footage of living area within the perimeter of a residential
structure, not including any carport, walkway, garage, overhang, or similar area. The determination of
Building Square Footage shall be made by the CFD Administrator by reference to the Building Permit(s)
issued for such Assessor’s Parcel and/or by reference to appropriate records kept by the City. Building Square
Footage for a Residential Unit will be based on the Building Permit(s) issued for such Residential Unit prior to
it being classified as Occupied Residential Property, and shall not change as a result of additions or
modifications made to such Residential Unit after such classification as Occupied Residential Property.
“Calendar Year” means the period commencing January 1 of any year and ending the following
December 31.
“CFD Administrator” means an authorized representative of the City, or designee thereof, responsible for
determining the Special Tax Requirement, for preparing the Annual Special Tax roll and/or calculating the
Backup Special Tax.
“CFD No. 16-I” means the Community Facilities District No. 16-I (Millenia) of the City of Chula Vista.
“City” means the City of Chula Vista, California.
“City Council” means the City Council of the City acting as the legislative body of CFD No. 16-I under the
Act.
“Condominium” means a unit, whether attached or detached, meeting the statutory definition of a
condominium contained in the California Civil Code Section 4285.
“County” means the County of San Diego, California.
“Debt Service” means for each Fiscal Year, the total amount of principal and interest payable on any
Outstanding Bonds during the Calendar Year commencing on January 1 of such Fiscal Year.
“Developed Property” means for each Fiscal Year, all Taxable Property, exclusive of Provisional Property,
for which a Building Permit was issued prior to March 1 of the previous Fiscal Year. An Assessor’s Parcel
classified as Developed Property but for which the Building Permit that caused such Assessor’s Parcel to be
classified as Developed Property has been cancelled and/or voided prior to the Fiscal Year for which Special
Taxes are being levied shall be reclassified as Undeveloped Property, provided that the levy of the Annual
Special Tax after such reclassification shall not be less than 1.1 times the annual Debt Service less
Administrative Expenses on all Outstanding Bonds. If Bonds have not been issued, an Assessor’s Parcel
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classified as Developed Property for which such a Building Permit has been cancelled and/or voided shall be
reclassified as Undeveloped Property.
“Development Agreement” means that certain Development Agreement by and between the City of Chula
Vista and McMillin Otay Ranch LLC adopted October 6, 2009 and recorded with the County of San Diego’s
Recorder’s office on October 27, 2009 as Document Number 2009-0595116, as may be amended and/or
supplemented from time to time.
“Exempt Property” means for each Fiscal Year, all Assessor’s Parcels designated as being exempt from
Special Taxes pursuant to Section 5 below.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line
adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or
recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots for
which Building Permits may be issued without further subdivision.
“Fiscal Year” means the period starting on July 1 and ending the following June 30.
“Fiscal Agent” means the fiscal agent, trustee, or paying agent under the Fiscal Agent Agreement.
“Fiscal Agent Agreement” means the fiscal agent agreement, indenture, resolution or other instrument
pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any
instrument replacing or supplementing the same.
“IA1” means Improvement Area No. 1 of CFD No. 16-I.
“Land Use Class” means any of the classes listed in Table 1, 2, or 3 under Section 3A below.
Note: Land Uses Class is not in reference to a property’s zoning designation.
“Lot(s)” means an individual legal lot created by a Final Map for which a building permit for residential
construction has been or could be issued. Notwithstanding the foregoing, in the case of an individual legal lot
created by such a Final Map upon which Condominiums are entitled to be developed, the number of Lots
allocable to such legal lot for purposes of calculating the Backup Special Tax applicable to such Final Map
shall equal the number of Condominiums which are permitted to be constructed on such legal lot as shown on
such Final Map.
“Master Developer” means SLF IV-Millenia, LLC or its successors or assignees with as defined in the
Development Agreement.
“Maximum Special Tax” means for each Assessor’s Parcel, the maximum Special Tax, determined in
accordance with Sections 3.C and 3.D below, which may be levied in a given Fiscal Year on such Assessor’s
Parcel of Taxable Property.
“Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit
has been issued for the purpose of constructing one or more non-residential units or structures.
“Occupied Residential Property” means all Assessor Parcels of Residential Property for which title is held
by an end user (homeowner).
“Outstanding Bonds” means all Bonds which are deemed to be outstanding under the Fiscal Agent
Agreement.
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“Prepayment Amount” means the amount required to prepay the Special Tax Obligation in full for an
Assessor’s Parcel as described in Section 8.A below.
“Property Owner Association Property” means any Assessor’s Parcel within the boundaries of IA1 owned
in fee by a property owner association, including any master or sub-association.
“Proportionately” or “Proportionate” means for Developed Property, that the ratio of the actual Special Tax
levy to the applicable Assigned Special Tax or Backup Special Tax is equal for all Assessor’s Parcels of
Developed Property. For Undeveloped Property, “Proportionately” means that the ratio of the actual Special
Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor’s Parcels of Undeveloped
Property. “Proportionately” may similarly be applied to other categories of Taxable Property as listed in
Section 3 below.
“Provisional Property” means all Assessor’s Parcels of Public Property, Property Owner Association
Property or property that would otherwise be classified as Exempt Property pursuant to the provisions of
Section 5, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all
Taxable Property below the required minimum Acreage as set forth in Section 5.
“Public Property” means any property within the boundaries of IA1, which is owned by, or irrevocably
offered for dedication to the federal government, the State of California, the County, the City or any other
public agency; provided however that any property owned by a public agency and leased to a private entity and
subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use.
“Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has
been issued for the purpose of constructing one or more Residential Units.
“Residential Unit” means each separate residential dwelling unit that comprises an independent facility
capable of conveyance or rental, separate from adjacent residential dwelling units.
“Special Tax” means any special tax levied within IA1 pursuant to the Act and this Rate and Method of
Apportionment of Special Tax.
“Special Tax Obligation” means the total obligation of an Assessor’s Parcel of Taxable Property to pay the
Special Tax for the remaining life of IA1.
“Special Tax Requirement” means that amount required in any Fiscal Year to: (i) pay regularly scheduled
Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not
limited to, credit enhancement and rebate payments on the Outstanding Bonds; (iii) pay Administrative
Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds;
(v) accumulate funds to pay directly for acquisition or construction of facilities provided that the inclusion of
such amount does not cause an increase in the Special Tax to be levied on Undeveloped Property; and (vi) pay
for reasonably anticipated delinquent Special Taxes based on (a) the average delinquency rate for special taxes
levied in the previous Fiscal Year in all community facilities districts within the portion of the City commonly
known as Otay Ranch for the first Fiscal Year in which Special Taxes are levied and (b) the delinquency rate
for Special Taxes levied in the previous Fiscal Year within IA1 for all subsequent Fiscal Years in which
Special Taxes are levied; less (vii) a credit for funds available to reduce the Annual Special Tax levy, as
determined by the CFD Administrator pursuant to the Fiscal Agent Agreement.
“State” means the State of California.
“Taxable Property” means all of the Assessor’s Parcels within the boundaries of CFD, which are not exempt
from the levy of the Special Tax pursuant to law or Section 5 below.
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“Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed
Property or Provisional Property.
“Zone A” means the specific geographic area designated as such within IA1 and as depicted in Exhibit A
attached hereto.
“Zone B” means the specific geographic area designated as such within IA1 and as depicted in Exhibit A
attached hereto.
“Zone C” means the specific geographic area designated as such within IA1 and as depicted in Exhibit A
attached hereto.
2. LAND USE CLASSIFICATION
Each Fiscal Year, beginning with Fiscal Year 2016-17, each Assessor’s Parcel within IA1 shall be classified as
Taxable Property or Exempt Property. In addition, all Taxable Property shall further be classified as
Developed Property, Undeveloped Property or Provisional Property, and all such Taxable Property shall be
subject to the levy of Special Taxes in accordance with this Rate and Method of Apportionment of Special Tax
determined pursuant to Sections 3 and 4 below. Furthermore, each Assessor’s Parcel of Developed Property
shall be classified according to its applicable Land Use Class based on its Building Square Footage.
For Assessor’s Parcels of Non-Residential Property developed with Condominiums (e.g., office or industrial
condos), the Acreage applicable to each such Condominium for purposes of levying Special Taxes shall be
computed from the Acreage of the legal lot created by the Final Map upon which such Condominiums are
entitled to be developed, with the Acreage of such lot allocated to each Condominium on a pro -rata basis
using the building square footage of such Condominium relative to the total building square footage of all
Condominiums entitled to be developed on such lot. The determination of building square footage for each
non-residential Condominium shall be made by reference to the applicable Building Permit, and to the extent a
Building Permit has not been issued for all Condominiums to be located on the applicable legal lot, the
building square footage attributable to any such Condominiums shall be determined from the recorded
condominium plan, or applicable site plan, plot plan, or other appropriate records kept by the City as
reasonably determined by the CFD Administrator. In the event the City takes ownership of a Condominium
within IA1 and such property in all other respects meets the definition of Public Property as set forth in
Section 1, such property shall be exempt from Special Taxes pursuant to Section 5.
3. SPECIAL TAX RATES
A. Assigned Special Tax for Developed Property
The Assigned Special Tax applicable to an Assessor’s Parcel classified as Developed Property commencing
Fiscal Year 2016-17 shall be determined pursuant to Table 1, 2, or 3 below, as applicable.
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Table 1
Assigned Special Tax Rates for
Developed Property within Zone A
Land
Use
Class Land Use Type
Building
Square
Footage Assigned Special Tax
1 Residential Property < 1,500 $1,352 per
Residential Unit
2 Residential Property 1,500 – 2,200 $1,661 per
Residential Unit
3 Residential Property > 2,200 $1,799 per
Residential Unit
4 Non-Residential Property N/A $6,000 per Acre
Table 2
Assigned Special Tax Rates for
Developed Property within Zone B
Land
Use
Class Land Use Type
Building
Square
Footage Assigned Special Tax
1 Residential Property < 1,500 $1,350 per
Residential Unit
2 Residential Property 1,500 – 2,200 $1,451 per
Residential Unit
3 Residential Property > 2,200 $1,649 per
Residential Unit
4 Non-Residential Property N/A $6,000 per Acre
Table 3
Assigned Special Tax Rates for
Developed Property within Zone C
Land
Use
Class Land Use Type
Building
Square
Footage Assigned Special Tax
1 Residential Property < 1,500 $1,350 per
Residential Unit
2 Residential Property 1,500 – 2,200 $1,451 per
Residential Unit
3 Residential Property > 2,200 $1,649 per
Residential Unit
4 Non-Residential Property N/A $6,000 per Acre
On each July 1, commencing July 1, 2017, the Assigned Special Tax for Developed Property shall be
increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
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B. Backup Special Tax for Developed Property
When a Final Map or a condominium plan is recorded within Zone A, Zone B, or Zone C the Backup
Special Tax for Assessor’s Parcels of Developed Property classified as Residential Property shall be
determined as follows:
For each Assessor’s Parcel of Residential Property or for each Assessor’s Parcel of Undeveloped
Property to be classified as Residential Property upon its development within the Final Map area, the
Backup Special Tax for Fiscal Year 2016-17 shall be the rate per Lot calculated according to the
following formula:
Zone A
$27,502 x A
B = ------------------------
L
Zone B
$29,057 x A
B = ------------------------
L
Zone C
$6,316 x A
B = ------------------------
L
The terms have the following meanings:
B = Backup Special Tax per Lot
A = Acreage classified or to be classified as Residential Property in such Final Map. The
land area applicable to a Condominium shall be computed from the Acreage of the
Lot on which the Condominium is located, with the Acreage for such Lot allocated
equally among all of the Condominiums located or to be located on such Lot.
L = For a Final Map, the number of Lots which are classified or to be classified as
Residential Property.
For each Assessor’s Parcel of Developed Property classified as Non-Residential Property or for each
Assessor’s Parcel of Undeveloped Property to be classified as Non-Residential Property within the Final Map
area, the Backup Special Tax for Fiscal Year 2016-17 shall be determined by multiplying $27,502 for Zone A,
$29,057 for Zone B and $6,316 for Zone C by the total Acreage of any such Assessor’s Parcel.
Notwithstanding the foregoing, if Assessor’s Parcels of Residential Property, Non-Residential Property or
Undeveloped Property for which the Backup Special Tax has been determined are subsequently changed or
modified by recordation of a new or amended Final Map, then the Backup Special Tax applicable to such
Assessor’s Parcels shall be recalculated to equal the total amount of Backup Special Tax that would have been
generated if such change did not take place.
On each July 1, commencing July 1, 2017, the Backup Special Tax applicable to each Assessor’s Parcel of
Taxable Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
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C. Maximum Special Tax for Developed Property
Each Fiscal Year, the Maximum Special Tax for an Assessor’s Parcel of Developed Property shall be
the greater of the applicable Assigned Special Tax or Backup Special Tax.
D. Maximum Special Tax for Provisional Property and Undeveloped Property
The Maximum Special Tax for Provisional Property and Undeveloped Property commencing in Fiscal
Year 2016-17 shall be $27,502 per Acre for Zone A, $29,057 per Acre for Zone B, and $6,316 per
Acre for Zone C.
On each July 1, commencing July 1, 2017, the Maximum Special Tax for Provisional Property and
Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior
Fiscal Year.
E. Multiple Land Use Classes
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use
Class. The Maximum Special Tax that may be levied on such an Assessor’s Parcel shall only be
levied on the Residential Property Land Use Class located on such Assessor’s Parcel.
F. Administrative Special Tax Reduction
Prior to the issuance of Bonds, the Assigned Special Tax, Backup Special Tax, and Maximum Special
Tax (collectively the “Special Tax Rates”) on Taxable Property may be reduced in accordance with,
and subject to the conditions set forth in this paragraph. Upon the City’s receipt of a written request
from Master Developer and the CFD Administrator, the Special Tax Rates on Taxable Property may
be reduced to a level which will provide not less than the sum of estimated Administrative Expense
Requirement and one hundred ten percent (110%) of the estimated debt service with respect to the
amount of Bonds requested to be issued in such written request. If it is reasonably determined by the
CFD Administrator that the total effective tax rate on Residential Property, as determined in
accordance with the Development Agreement, exceeds the maximum level allowed in the
Development Agreement, the Special Tax Rates may be reduced to the amount necessary to satisfy the
maximum allowable effective tax rate requirement on Residential Property with the written consent of
Master Developer, which consent shall not be unreasonably withheld, and the CFD Administrator. It
shall not be required that reductions among each “Building Square Footage” range of Residential
Property be proportional. Additionally, the “CFD Public Facilities Costs” amount in Section 8 shall
be reduced commensurate with any reductions to the Special Tax Rates pursuant to this paragraph, as
reasonably determined by the CFD Administrator. A certificate in substantially the form attached
hereto as Exhibit “B” shall be used for purposes of evidencing the required written consent and
effectuating the reduction to the Special Tax Rates. The reductions permitted pursuant to this
paragraph shall be reflected in an amended Notice of Special Tax Lien which the City shall cause to
be recorded.
4. METHOD OF APPORTIONMENT
For each Fiscal Year, commencing Fiscal Year 2016-17, the CFD Administrator shall levy the Special Tax on
all Taxable Property in accordance with the following steps:
Step 1: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed
Property at up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax
Requirement;
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Step 2: If additional monies are needed to satisfy the Special Tax Requirement after Step 1 has been
completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped
Property up to 100% of the Maximum Special Tax for Undeveloped Property;
Step 3: If additional monies are needed to satisfy the Special Tax Requirement after the first two
steps have been completed, then the Special Tax amount determined in Step 1 shall be increased
Proportionately on each Assessor’s Parcel of Developed Property up to 100% of the Maximum
Special Tax for Developed Property.
Step 4: If additional monies are needed to satisfy the Special Tax Requirement after the first three
steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor’s
Parcel of Provisional Property up to 100% of the Maximum Special Tax for Provisional Property;
Notwithstanding the above, under no circumstances will the Special Tax levied in any Fiscal Year against any
Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been
issued be increased as a result of a delinquency or default in the payment of the Special Tax applicable to any
other Assessor’s Parcel within IA1 by more than ten percent (10%) above what would have been levied in the
absence of such delinquencies or defaults.
5. EXEMPTIONS
The CFD Administrator shall classify as Exempt Property (i) Assessor’s Parcels of Public Property,
(ii) Assessor’s Parcels of Property Owner Association Property, (iii) Assessor’s Parcels which are used as
places of worship and are exempt from ad valorem property taxes because they are owned by a religious
organization, and (iv) Assessor’s Parcels with public or utility easements making impractical their utilization
for other than the purposes set forth in the easement, provided that no such classification would reduce the sum
of all Taxable Property in IA1 to less than 9.53 Acres for Zone A, 12.67 Acres for Zone B, or 17.09 Acres for
Zone C. Assessor’s Parcels which cannot be classified as Exempt Property because such classification would
reduce the sum of all Taxable Property in IA1 to less than 9.53 Acres for Zone A, 12.67 Acres for Zone B, or
17.09 Acres for Zone C, shall be classified as Provisional Property and will continue to be subject to the IA1
Special Taxes accordingly. Tax exempt status for the purpose of this paragraph will be assigned by the CFD
Administrator in the chronological order in which property becomes eligible for classification as Exempt
Property.
If the use of an Assessor’s Parcel of Exempt Property changes so that such Assessor’s Parcel is no longer
classified as one of the uses set forth in the first paragraph of Section 5 above that would make such Assessor’s
Parcel eligible to be classified as Exempt Property, such Assessor’s Parcel shall cease to be classified as
Exempt Property and shall be deemed to be Taxable Property.
6. APPEALS
Any landowner who pays the Special Tax and claims the amount of the Special Tax levied on his or her
Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error not later than
thirty-six (36) months after first having paid the first installment of the Special Tax that is disputed. If
following such consultation the CFD Administrator determines that an error has occurred, then the CFD
Administrator shall take any of the following actions, in order of priority, in order to correct the error:
(i) Amend the Special Tax levy on the landowner’s Assessor’s Parcel(s) for the current Fiscal
Year prior to the payment date,
(ii) Require the CFD to reimburse the landowner for the amount of the overpayment to the extent
of available CFD funds, or
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(iii) Grant a credit against, eliminate or reduce the future Special Taxes on the landowner’s
Assessor’s Parcel(s) in the amount of the overpayment.
If following such consultation and action by the CFD Administrator the landowner believes such error still
exists, such person may file a written notice of appeal with the City Council. Upon the receipt of such notice,
the City Council or designee may establish such procedures as deemed necessary to undertake the review of
any such appeal. If the City Council or designee determines an error still exists, the CFD Administrator shall
take any of the actions described as (i), (ii) and (iii) above, in order of priority, in order to correct the error.
The City Council or designee thereof shall interpret this Rate and Method of Apportionment of Special Tax for
purposes of clarifying any ambiguities and make determinations relative to the administration of the Special
Tax and any landowner appeals. The decision of the City Council or designee shall be final and binding as to
all persons.
7. COLLECTION OF SPECIAL TAXES
Collection of the Annual Special Tax shall be made by the County in the same manner as ordinary ad valorem
property taxes are collected and the Annual Special Tax shall be subject to the same penalties and the same
lien priority in the case of delinquency as ad valorem taxes; provided, however, that the City Council may
provide for (i) other means of collecting the Special Tax, including direct billings thereof to the property
owners; and (ii) judicial foreclosure of delinquent Annual Special Taxes.
8. PREPAYMENT OF SPECIAL TAX OBLIGATION
A. Prepayment in Full
Property owners may prepay and permanently satisfy the Special Tax Obligation by a cash settlement
with the City as permitted under Government Code Section 53344. The following definitions apply to
this Section 8:
“CFD Public Facilities Costs” means $12,550,000 or such lower number as (i) shall be determined
by the CFD Administrator as sufficient to acquire or construct the facilities to be financed under the
Act and financing program for IA1, or (ii) shall be determined by the City Council concurrently with a
covenant that it will not issue any more Bonds (except refunding bonds).
“Construction Fund” means the fund (regardless of its name) established pursuant to the Fiscal
Agent Agreement to hold funds, which are currently available for expenditure to acquire or construct
the facilities or pay fees authorized to be funded by CFD No. 16-I for IA1.
“Future Facilities Costs” means the CFD Public Facilities Costs minus (i) costs previously paid from
the Construction Fund to acquire or construct the facilities, (ii) monies currently on deposit in the
Construction Fund, and (iii) monies currently on deposit in an escrow or other designated fund that are
expected to be available to finance CFD Public Facilities Costs.
“Outstanding Bonds” means all Previously Issued Bonds, which remain outstanding as of the first
interest and/or principal payment date following the current Fiscal Year excluding Bonds to be
redeemed at a later date with proceeds of prior Special Tax prepayments.
“Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment.
The Special Tax Obligation applicable to an Assessor’s Parcel of Developed Property, or
Undeveloped Property for which a Building Permit has been issued may be prepaid and the obligation
to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein, provided
A-11
that a prepayment may be made with respect to a particular Assessor’s Parcel only if there are no
delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner
of an Assessor’s Parcel eligible to prepay the Special Tax Obligation shall provide the CFD
Administrator with written notice of intent to prepay, and designate or identify the company or agency
that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a
statement of the Prepayment Amount for such Assessor’s Parcel within thirty (30) days of the request,
and may charge a reasonable fee for providing this service. Prepayment must be made at least 60 days
prior to any redemption date for the Bonds to be redeemed with the proceeds of such prepaid Special
Taxes, unless a shorter period is acceptable to the Fiscal Agent and the City.
The Prepayment Amount (defined below) shall be calculated for each applicable Assessor’s Parcel or
group of Assessor’s Parcels as summarized below (capitalized terms as defined below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Prepayment Amount
plus Defeasance Amount
plus Prepayment Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined in Step 14 below) shall be calculated
as follows:
Step No.:
1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.
2. For Assessor’s Parcels of Developed Property, determine the Maximum Special Tax. For
Assessor’s Parcels of Undeveloped Property for which a Building Permit has been issued,
compute the Maximum Special Tax for that Assessor’s Parcel as though it was already
designated as Developed Property, based upon the Building Permit which has already been
issued for that Assessor’s Parcel.
3. Divide the Maximum Special Tax computed pursuant to paragraph 2 by the total expected
Maximum Special Tax revenue for IA1 assuming all Building Permits have been issued
(build-out) within IA1, excluding any Assessor’s Parcels for which the Special Tax
Obligation has been previously prepaid.
4. Multiply the quotient computed pursuant to paragraph 3 by the Outstanding Bonds and round
that number up to the nearest $5,000 increment to compute the amount of Outstanding Bonds
to be retired and prepaid for all applicable Assessor’s Parcels (the “Bond Redemption
Amount”).
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable
redemption premium (expressed as a percentage), if any, on the Outstanding Bonds to be
redeemed at the first available call date (the “Redemption Premium”).
6. Compute the Future Facilities Costs.
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7. Multiply the quotient computed pursuant to paragraph 3 by the amount determined pursuant
to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the “Future
Facilities Prepayment Amount”).
8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the
expected redemption date for the Outstanding Bonds which, depending on the Fiscal Agent
Agreement, may be as early as the next interest payment date.
9. Compute the amount the CFD Administrator reasonably expects to derive from the
reinvestment of the Prepayment Amount less the Future Facilities Prepayment Amount and
the Prepayment Administrative Fees from the date of prepayment until the redemption date
for the Outstanding Bonds to be redeemed with the prepayment.
10. Subtract the amount computed in paragraph 9 from the amount computed in paragraph 8 (the
“Defeasance Amount”).
11. Calculate the administrative fees and expenses of CFD No. 16-I for IA1, including the costs
of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of
redeeming the Outstanding Bonds to be redeemed with the prepayment, and the costs of
recording any notices to evidence the prepayment and the redemption (the “Prepayment
Administrative Fees”).
12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the reserve
requirement (as defined in the Fiscal Agent Agreement) on the prepayment calculation date, a
reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the
Outstanding Bonds to be redeemed pursuant to the prepayment (the “Reserve Fund Credit”).
No Reserve Fund Credit shall be granted if, after the Prepayment Amount is calculated,
reserve funds are below 100% of the reserve requirement after taking into account such
prepayment.
13. If any capitalized interest for the Outstanding Bonds will not have been expended at the time
of the first interest and/or principal payment following the current Fiscal Year, a capitalized
interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph
3 by the expected balance in the capitalized interest fund after such first interest and/or
principal payment (the “Capitalized Interest Credit”).
14. The amount to prepay the Special Tax Obligation is equal to the sum of the amounts
computed pursuant to paragraphs 4, 5, 7, 10, and 11, less the amounts computed pursuant to
paragraphs 12 and 13 (the “Prepayment Amount”).
15. From the Prepayment Amount, the sum of the amounts computed pursuant to paragraphs 4, 5,
and 10, less the amounts computed pursuant to paragraphs 12 and 13 shall be deposited into
the appropriate fund as established under the Fiscal Agent Agreement and be used to retire
Outstanding Bonds or make Debt Service payments. The amount computed pursuant to
paragraph 7 shall be deposited into the Construction Fund. The amount computed pursuant to
paragraph 11 shall be retained by CFD No. 16-I.
The Prepayment Amount may be sufficient to redeem an amount other than a $5,000 increment of
Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the
appropriate fund established under the Fiscal Agent Agreement to redeem Bonds to be used with the
next prepayment of Bonds.
A-13
The CFD Administrator will confirm that all previously levied Special Taxes have been paid in full.
With respect to any Assessor’s Parcel for which the Special Tax Obligation is prepaid in full, once the
CFD Administrator has confirmed that all previously levied Special Taxes have been paid, the City
Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the
prepayment of the Special Tax Obligation and the release of the Special Tax lien on such Assessor’s
Parcel, and the obligation of the owner of such Assessor’s Parcel to pay the Special Tax shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate
amount of Maximum Special Taxes less the Administrative Expense Requirement that may be levied
on Taxable Property, respectively, after the proposed prepayment is at least 1.1 times the Debt Service
on all Outstanding Bonds in each Fiscal Year.
B. Partial Prepayment
The Special Tax on an Assessor’s Parcel of Developed Property or Undeveloped Property for which a
Building Permit has been issued may be partially prepaid. The amount of the prepayment shall be
calculated as in Section 8.A.; except that a partial prepayment shall be calculated according to the
following formula:
PP = (PE-A) x F+A
These terms have the following meaning:
PP = the partial prepayment
PE = the Prepayment Amount calculated according to Section 8.A
F = the percentage by which the owner of the Assessor’s Parcel(s) is partially
prepaying the Special Tax Obligation
A = the Prepayment Administrative Fees and Expenses from Section 8.A
The owner of any Assessor’s Parcel who desires such partial prepayment shall notify the CFD
Administrator of (i) such owner’s intent to partially prepay the Special Tax Obligation, (ii) the
percentage by which the Special Tax Obligation shall be prepaid, and (iii) the company or agency that
will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a
statement of the amount required for the partial prepayment of the Special Tax Obligation for an
Assessor’s Parcel within sixty (60) days of the request and may charge a reasonable fee for providing
this service.
With respect to any Assessor’s Parcel that is partially prepaid, the City shall (i) distribute the funds
remitted to it according to Section 8.A., and (ii) indicate in the records of CFD No. 16-I for IA1 that
there has been a partial prepayment of the Special Tax Obligation and that a portion of the Special Tax
with respect to such Assessor’s Parcel, equal to the outstanding percentage (1.00 - F) of the Maximum
Special Tax, shall continue to be levied on such Assessor’s Parcel.
Notwithstanding the foregoing, no partial prepayment shall be allowed unless the aggregate amount of
Maximum Special Taxes less the Administrative Expense Requirement that may be levied on Taxable
Property, respectively, after the proposed partial prepayment is at least 1.1 times the Debt Service on
all Outstanding Bonds in each Fiscal Year.
9. TERM OF SPECIAL TAX
The Special Tax shall be levied as long as necessary to meet the Special Tax Requirement for a period not to
exceed forty (40) Fiscal Years commencing with Fiscal Year 2016-17.
A-14
EXHIBIT A
A-15
EXHIBIT B
CITY OF CHULA VISTA AND CFD NO. 16-I CERTIFICATE
1. Pursuant to Section 3F of the Rate and Method of Apportionment of Special Tax (the “RMA”), the
City of Chula Vista (the “City”) and Community Facilities District No. 16-I of the City of Chula Vista
(“CFD No. 16-I”) hereby agree to a reduction in the Special Tax for Developed Property,
Undeveloped Property, and/or Provisional Property:
(a) The information in the RMA relating to the Special Tax for Developed Property,
Undeveloped Property, and Provisional Property shall be modified as follows:
[insert Table 1, 2, and/or 3 showing revised Assigned Special Tax rates for Developed
Property, insert revised Backup Special Tax rates for Developed Property by Zone, and insert
change to Maximum Special Tax rates for Undeveloped Property and Provisional Property by Zone]
(b) The CFD Public Facilities Costs in Section 8 shall be changed to $____________.
2. Special Tax rates for Taxable Property may only be modified prior to the issuance of Bonds.
3. Upon execution of the Certificate by the City and CFD No. 16-I the City shall cause an amended
Notice of Special Tax Lien for IA1 to be recorded reflecting the modifications set forth herein.
By execution hereof, the undersigned acknowledges, on behalf of the City of Chula Vista and CFD No. 16-I,
receipt of this Certificate and modification of the RMA as set forth in this Certificate.
CITY OF CHULA VISTA
By:
CFD Administrator
Date:
COMMUNITY FACILITIES DISTRICT NO. 16-I
OF THE CITY OF CHULA VISTA
By:
Date:
B-1-1
APPENDIX B-1
APPRAISAL REPORT
B-2-1
APPENDIX B-2
SUPPLEMENT TO APPRAISAL REPORT
C-1
APPENDIX C
FORM OF OPINION OF BOND COUNSEL
Bond Counsel will deliver an opinion for the Bonds substantially in the form set forth below:
[Closing Date]
Mayor and City Council
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Re: $________ City of Chula Vista Community Facilities District No. 16-I (Millenia)
Improvement Area No. 1 2018 Special Tax Bonds
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance by Community Facilities District No.
16-I (Millenia) of the City of Chula Vista, County of San Diego, State of California (the “District”), of
$__________ aggregate principal amount of City of Chula Vista Community Facilities District No. 16-I
(Millenia) Improvement Area No. 1 2018 Special Tax Bonds (the “Bonds”). The Bonds are issued pursuant to
the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of
California (the “Act”), a resolution adopted by the City Council of the City of Chula Vista on May 15, 2018
(the “Resolution”), and a Bond Indenture, dated as of June 1, 2018 (the “Bond Indenture”), by and between the
District and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”).
We have examined the Act, the Resolution, the Bond Indenture and certified copies of the proceedings
taken for the issuance and sale of the Bonds. As to questions of fact which are material to our opinions, we
have relied upon the representations of the District and the City of Chula Vista contained in the Bond
Indenture and in certificates of its authorized officers which have been delivered to us for the purpose of
supplying such facts, without having undertaken to verify the accuracy of any such representations by
independent investigation.
Based upon such examination, we are of the opinion, as of the date hereof, that the proceedings
referred to above have been taken in accordance with the laws and the Constitution of the State of California,
and that the Bonds, having been issued in duly authorized form and executed by the proper officials and
delivered to and paid for by the purchaser thereof, and the Bond Indenture having been duly authorized and
executed by the proper official, constitute the legally valid and binding obligations of the District enforceable
in accordance with their terms subject to the qualifications specified below and the Bonds, except where funds
are otherwise available, as may be permitted by law, are payable, as to both principal and interest, solely from
certain special taxes to be levied and collected within Improvement Area No. 1 of the District and other funds
available therefor held under Bond Indenture.
The Internal Revenue Code of 1986, as amended (the “Code”), sets forth certain investment, rebate
and related requirements which must be met subsequent to the issuance and delivery of the Bonds for the
interest on the Bonds to be and remain exempt from federal income taxation. Noncompliance with such
requirements could cause the interest on the Bonds to be subject to federal income taxation retroactive to the
C-2
date of issuance of the Bonds. Pursuant to the Bond Indenture, the District has covenanted to comply with the
requirements of the Code and applicable regulations promulgated thereunder.
We are of the opinion that, under existing statutes, regulations, rulings and court decisions, and
assuming compliance by the District with the aforementioned covenants, the interest on the Bonds is excluded
from gross income for purposes of federal income taxation and is exempt from personal income taxation
imposed by the State of California.
We are further of the opinion that interest on the Bonds is not an item of tax preference for purposes
of calculating the alternative minimum tax provisions of the Code. Although interest on the Bonds is excluded
from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds may
otherwise affect the federal income tax liability of the recipient. The extent of these tax consequences will
depend on the recipient’s particular tax status or other items of income or deduction. We express no opinion
regarding any such consequences.
The opinions expressed herein may be affected by action which may be taken (or not taken) or events
which may occur (or not occur) after the date hereof. We have not undertaken to determine, or to inform any
person, whether any such actions or events are taken or occur or are not taken or do not occur.
The rights of the owners of the Bonds and the enforceability of the Bonds and the Fiscal Agent
Agreement may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors’
rights heretofore or hereafter enacted, and their enforcement may be subject to the exercise of judicial
discretion in accordance with general principles of equity.
Respectfully submitted,
D-1
APPENDIX D
GENERAL ECONOMIC AND DEMOGRAPHIC INFORMATION
FOR THE CITY OF CHULA VISTA AND SAN DIEGO COUNTY
Set forth below is certain demographic information regarding the City of Chula Vista (the “City”) and
the County of San Diego (the “County”). This information is provided for informational purposes only and
general background. The information set forth herein has been obtained from third party sources believed to
be reliable, but such information is not guaranteed by the District, the City or the Underwriter as to accuracy
or completeness. Neither the delivery of this Official Statement nor any sale thereafter of the securities offered
hereby shall under any circumstances create any implication that there has been no change in any information
contained in this Appendix D since the date of the Official Statement. The Bonds are not a debt of the City, the
County, the State, or any of its political subdivisions, and none of the City, the County, the State nor any of its
political subdivisions is liable thereon. The information and data within this Appendix D is the latest data
available; however, the current state of the economy at City, County, State and national levels may not be
reflected in the data discussed below because more up-to-date publicly available information is not available
to the District.
General Information
The City is located on San Diego Bay in Southern California, 8 miles south of the City of San Diego
and 7 miles north of the Mexico border, in an area generally known as “South Bay.” Chula Vista’s city limits
cover approximately 50 square miles. Neighboring communities include the City of San Diego and National
City to the north and the City of Imperial Beach and the communities of San Ysidro and Otay Mesa to the
south. The City, with a total population of approximately 267,917, is the second largest city in the County.
Population
The following table provides a comparison of population growth for the City and the County between
2013 and 2017.
TABLE NO. D-1
POPULATION
2013 - 2017
Year
(January 1) Chula Vista
San Diego
County
2013 256,366 3,195,215
2014 260,416 3,231,651
2015 263,028 3,266,192
2016 264,911 3,286,717
2017 267,917 3,316,192
Source: State of California, Department of Finance, CA; E-4 Population Estimates for Cities, Counties and the State, 2011 -
2017, with 2010 Benchmark, Sacramento, CA
D-2
Employment and Industry
The following table summarizes the civilian labor force, civilian employment and civilian
unemployment figures over the period from 2013 through 2017 in the City, the County, the State of California
and the United States.
TABLE NO. D-2
City of Chula Vista, County of San Diego, State of California and United States
Labor Force, Employment and Unemployment
Yearly Average
Year and Area
Civilian Labor
Force
Civilian
Employment(1)
Civilian
Unemployment(2)
Civilian
Unemployment Rate(3)
2013
Chula Vista 121,100 109,300 11,800 9.8%
San Diego County 1,543,200 1,422,400 120,800 7.8
California 18,625,000 16,958,400 1,666,600 8.9
United States(4) 155,389,000 143,929,000 11,460,000 7.4
2014
Chula Vista 120,700 110,900 9,700 8.1%
San Diego County 1,544,300 1,445,100 99,200 6.4
California 18,758,400 17,351,300 1,407,100 7.5
United States(4) 155,922,000 146,305,000 9,617,000 6.2
2015
Chula Vista 121,000 113,200 7,900 6.5%
San Diego County 1,564,900 1,474,200 80,700 5.2
California 18,896,500 17,724,800 1,171,700 6.2
United States(4) 157,130,000 148,834,000 8,296,000 5.3
2016
Chula Vista 122,200 115,000 7,200 5.9%
San Diego County 1,570,300 1,496,200 74,100 4.7
California 19,093,700 18,048,800 1,044,800 5.5
United States(4) 159,187,000 151,436,000 7,751,000 4.9
2017
Chula Vista 117,300 111,500 5,900 5.0%
San Diego County 1,585,000 1,521,500 63,500 4.0
California 19,312,000 18,393,100 918,900 4.8
United States(4) 160,320,000 153,337,000 6,982,000 4.4
Note: Data is not seasonally adjusted.
(1) Includes persons involved in labor-management trade disputes.
(2) Includes all persons without jobs who are actively seeking work.
(3) The unemployment rate is computed from unrounded data; therefore, it may di ffer from rates computed from rounded
figures in this table.
(4) Not strictly comparable with data for prior years.
Source: California Employment Development Department and U.S. Department of Labor, Bureau of Labor Statistics.
D-3
The following table sets forth the industry employment and the labor force estimates for the years
2013 through 2017 for the San Diego Carlsbad MSA. Annual industry employment information is not
compiled by sector for the City.
TABLE D-3
SAN DIEGO CARLSBAD MSA
INDUSTRY EMPLOYMENT & LABOR FORCE - BY ANNUAL AVERAGE
2013 through 2017
2013 2014 2015 2016 2017
Civilian Labor Force 1,543,200 1,544,300 1,554,900 1,570,300 1,585,000
Civilian Employment 1,422,400 1,445,100 1,474,200 1,496,200 1,521,500
Civilian Unemployment 120,800 99,200 80,700 74,700 63,500
Civilian Unemployment Rate 7.8% 6.4% 5.2% 4.7% 4.0%
Total Farm 9,800 9,400 9,100 8,900 8,600
Total Nonfarm 1,317,700 1,346,600 1,386,800 1,424,600 1,453,200
Total Private 1,088,200 1,114,700 1,150,700 1,182,400 1,205,200
Goods Producing 160,800 166,500 176,400 184,600 188,600
Mining & Logging 300 400 300 300 300
Construction 61,000 63,900 69,900 76,300 79,300
Manufacturing 99,400 102,200 106,200 108,000 109,000
Service Providing 1,157,000 1,180,100 1,210,400 1,240,000 1,264,700
Trade, Transportation &
Utilities
214,800 217,500 221,900 224,800 228,800
Wholesale Trade 46,400 46,200 46,700 47,600 48,200
Retail Trade 141,300 144,300 146,800 147,500 148,700
Transportation, Warehousing
& Utilities
26,200 26,100 26,900 26,600 26,500
Information 24,700 24,800 24,200 24,100 24,400
Financial Activities 70,800 69,400 71,200 72,700 74,100
Professional & Business
Services
218,200 221,400 227,200 231,200 233,500
Educational & Health Services 181,000 186,000 192,700 198,700 204,500
Leisure & Hospitality 168,600 177,000 183,900 191,900 196,400
Other Services 49,300 52,000 53,200 54,400 54,900
Government 229,500 231,900 236,200 242,200 248,100
Total, All Industries 1,327,500 1,356,000 1,395,900 1,433,500 1,461,800
Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households and
persons involved in labor-management trade disputes. Employment reported by place of work. Items may not add to
total due to independent rounding. The “Total, All Industries” data is not directly comparable to the employment data
found in this Appendix C.
Source: State of California, Employment Development Department, San Diego Carlsbad MSA (San Diego County) Industry
Employment & Labor Force - by Annual Average, March 2017 Benchmark.
D-4
The following tables lists the largest employers operating within the City and their respective number
of employees as of June 30, 2017:
TABLE NO. D-4
LARGEST EMPLOYERS
JUNE 30, 2017
Name of Company No. of Employees Type of Business/Product
Sweetwater Union High School District 4,371 Education
Chula Vista Elementary School District 3,370 Education
Rohr Inc./Goodrich Aerospace 2,468 Aerospace Manufacturing
Sharp Chula Vista Medical Center 2,131 Hospital
Wal-Mart 1,523 General Merchandise
Southwestern Community College 1,411 Education
City of Chula Vista 1,202 Government
Scripps Mercy Hospital Chula Vista 1,045 Hospital
Costco Wholesale Group 685 General Merchandise
Aquatica 566 Water Park
Source: City of Chula Vista, Comprehensive Annual Financial Report for the year ended June 30, 2017.
Income
The following table summarizes per capita personal income for San Diego County, California and the
United States for 2007 through 2016.
TABLE NO. D-5
PER CAPITAL PERSONAL INCOME
2007 - 2016
Year San Diego County State of California United States
2007 $44,912 $43,692 $39,821
2008 45,383 44,162 41,082
2009 43,269 42,224 39,376
2010 43,995 43,323 40,278
2011 46,397 45,854 42,463
2012 48,004 48,359 44,283
2013 49,017 48,555 44,489
2014 51,439 51,317 46,486
2015 53,963 54,664 48,429
2016 55,168 56,308 49,204
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
D-5
Commercial Activity
The following table summarizes the volume of retail sales and taxable transactions for Chula Vista for
2012 through first quarter of 2016.
TABLE NO. D-6
CITY OF CHULA VISTA
TOTAL TAXABLE TRANSACTIONS
(in Thousands)
2012 – 2016
Year
Retail Sales
$(000’s)
Retail Sales
Permits
Total
Taxable
Transactions
$(000’s)
Issued Sales
Permits
2012 $2,258,846 2,778 $2,501,497 4,149
2013 1,689,367 2,835 1,879,316 4,182
2014 2,395,041 2,914 2,667,866 4,291
2015 2,394,868 2,974 2,687,701 4,850
2016 2,381,364 2,976 2,676,901 4,896
Source: California State Board of Equalization, Taxable Sales in California (Sales and Use Tax).
Building Activity
The following table summarizes building activity valuations for Chula Vista for the years 2012
through 2016.
TABLE NO. D-7
CITY OF CHULA VISTA
BUILDING ACTIVITY AND VALUATION
(in Thousands)
2012 - 2016
2012 2013 2014 2015 2016
Residential $ 206,328,697 $ 167,858,912 $ 206,642,544 $ 143,176,844 $ 171,212,179
Non-Residential 19,841,124 54,727,472 38,198,063 61,066,094 86,935,526
Total Valuation $ 226,169,821 $ 222,586,384 $ 244,840,607 $ 204,242,938 $ 258,147,505
Total Permits 789 606 1,045 717 1,045
Source: California Homebuilding Foundation and Construction Industry Research Board.
E-1
APPENDIX E
SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE
The following is a summary of certain definitions and provisions of the Indenture which is not
described elsewhere in the Official Statement. This Summary does not purport to be comprehensive and
reference should be made to the Indenture for a full and complete statement of its provisions.
[TO COME FROM BOND COUNSEL]
F-1
APPENDIX F
FORM OF DISTRICT CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement dated as of June 1, 2018 (the “Disclosure Agreement”) is
executed and delivered by the Community Facilities District No. 16-I (Millenia) (the “District”) and Spicer
Consulting Group, LLC (the “Dissemination Agent”) in connection with the execution and delivery of
$___________ City of Chula Vista Community Facilities District No. 16-I (Millenia) Improvement Area No. 1
2018 Special Tax Bonds (the “Bonds”). The Bonds are being executed pursuant to a Bond Indenture dated as
of June 1, 2018 (the “Indenture”), by and between the District and U.S. Bank National Association, as trustee
(the “Trustee”). The District covenants as follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed
and delivered by the District for the benefit of the Owners and Beneficial Owners of the Bonds and in order to
assist the Participating Underwriter in complying with the Rule (defined below).
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any
capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following
capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the District pursuant to, and as described
in, Sections 3 and 4 of this Disclosure Agreement.
“Beneficial Owner” shall mean any person which has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through
nominees, depositories or other intermediaries).
“City” means the City of Chula Vista, County of San Diego, California.
“Disclosure Representative” shall mean the City Manager, Assistant City Manager, Deputy City
Manager, Chief Financial Officer, Director of Finance/Treasurer of the City or the designee of any one of such
officers, or such other officer or employee as the City Manager shall designate in writing from time to time.
“Dissemination Agent” shall mean Spicer Consulting Group, LLC, or any successor dissemination
agent designated in writing by the City Manager or the Director of Finance/Treasurer of the District and which
has filed with the District a written acceptance of such designation.
“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB.
“Improvement Area No. 1” shall mean Improvement Area No. 1 of the District.
“Listed Events” shall mean any of the events listed in Sections 5(a) and 5(b) of this Disclosure
Agreement.
“MSRB” shall mean the Municipal Securities Rulemaking Board and any successor entity designated
under the Rule as the repository for filings made pursuant to the Rule.
“Official Statement” shall mean the Official Statement relating to the Bonds dated May __, 2018.
“Participating Underwriter” shall mean Stifel, Nicolaus & Company, Incorporated.
F-2
“Repository” shall mean the MSRB or any other entity designated or authorized by the Securities and
Exchange Commission to receive reports pursuant to the Rule. Unless otherwise designated by the MSRB or
the Securities and Exchange Commission, filings with the MSRB are to be made through the EMMA website
of the MSRB, currently located at http://emma.msrb.org.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as the same may be amended from time to time.
“State” shall mean the State of California.
SECTION 3. Provision of Annual Reports.
(a) The District shall, or, upon delivery of the Annual Report to the Dissemination Agent shall
cause the Dissemination Agent to, not later than March 31 of each year, commencing March 31, 2019, provide
to the Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure
Agreement. The Annual Report may be submitted as a single document or as separate documents comprising
a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement;
provided that the audited financial statements of the District, if any are prepared, may be submitted separately
from the balance of the Annual Report and later than the date required above for the filing of the Annual
Report if they are not available by that date. If the District’s fiscal year changes, it shall give notice of such
change in the same manner as for a Listed Event under Section 5(d). The District shall provide a written
certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual
Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may
conclusively rely upon such certification of the District and shall have no duty or obligation to review such
Annual Report.
(b) Not later than five (5) days prior to the date for the filing of an Annual Report, the District
shall provide the Annual Report to the Dissemination Agent (if other than the District). If by five (5) days
prior to such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination
Agent shall contact the District to inquire if the District is in compliance with subsection (a).
(c) If the District is unable to provide to the Repository an Annual Report by the date required in
subsection (a), the Dissemination Agent shall send a notice to the Repository in the form required by the
Repository stating that the Annual Report has not been filed and, if provided by the District, the date the
District anticipates the filing to be made.
(d) The Dissemination Agent shall:
(i) determine each year prior to date for providing the Annual Report the name
and address of the Repository if other than the MSRB; and
(ii) file a report with the District certifying that the Annual Report has been
provided to the Repository pursuant to this Disclosure Agreement and stating the date it was provided
to the Repository.
SECTION 4. Content of Annual Reports. The District’s Annual Report shall contain or include by
reference the following:
(a) Financial Statements. The audited financial statements of the District for the prior fiscal year,
if any have been prepared and which, if prepared, shall be prepared in accordance with generally accepted
accounting principles as promulgated to apply to governmental entities from time to time by the Governmental
Accounting Standards Board; provided, however, that the District may, from time to time, if required by
federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the
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event that the District shall modify the basis upon which its financial statements are prepared, the District shall
provide the information referenced in Section 8(b) below regarding such modification. If the District is
preparing audited financial statements and such audited financial statements are not available by the time the
Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited
financial statements, and the audited financial statements shall be filed in the same manner as the Annual
Report when they become available
(b) Financial and Operating Data. The Annual Report shall contain or incorporate by reference
the following:
(i) the principal amount of the Bonds outstanding as of the September 2 preceding the
filing of the Annual Report;
(ii) the balance in each fund under the Indenture and the Reserve Requirement as of the
September 2 preceding the filing of the Annual Report;
(iii) any changes to the Improvement Area No. 1 Special Tax RMA approved or
submitted to the qualified electors for approval prior to the filing of the Annual Report;
(iv) an update of the estimated assessed value-to-lien ratio for Improvement Area No. 1
substantially in the form of Table 4 in the Official Statement based upon the most recent Special Tax
levy preceding the date of the Annual Report and on the assessed values of property for the current
fiscal year;
(v) a statement regarding the amount of Special Tax prepayments, if any, in the Fiscal
Year for which the Annual Report is prepared;
(vi) the status of any foreclosure actions being pursued by the District in Improvement
Area No. 1 with respect to delinquent Special Taxes;
(vii) a statement as to whether the District participates in the Teeter Plan (as defined in the
Official Statement) and whether the City or the District has entered into an agreement to sell
delinquent installments of Special Taxes to a third party;
(viii) a table showing the total Special Taxes levied and the total Special Taxes collected
for the prior fiscal year and the total Special Taxes that, as of December 31, remain unpaid for each
prior fiscal year in which Special Taxes were levied and the number of delinquent parcels in
Improvement Area No. 1; and
(ix) any information not already included under (i) through (viii) above that the District is
required to file in its annual report pursuant to the provisions of the Mello-Roos Community Facilities
Act of 1982, as amended, with the California Debt and Investment Advisory Commission.
Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues of the District or related public entities, which have been submitted
to each of the Repository or the Securities and Exchange Commission. If the document included by reference
is a final official statement, it must be available from the MSRB. The District shall clearly identify each such
other document so included by reference.
In the event that the District shall modify the basis upon which its financial statements are prepared,
the Dissemination Agent shall provide a notice of such modification to the Repository, including the
information set forth in Section 8(b) below.
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SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the District shall give, or cause the Dissemination
Agent to give, notice to the Repository of the occurrence of any of the following events with respect to the
Bonds in a timely manner not more than ten (10) business days after the occurrence of the event:
1. principal and interest payment delinquencies;
2. unscheduled draws on debt service reserves reflecting financial difficulties;
3. unscheduled draws on credit enhancements reflecting financial difficulties;
4. substitution of credit or liquidity providers, or their failure to perform;
5. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or
final determinations of taxability or of a Notice of Proposed Issue (IRS Form 5701-
TEB);
6. tender offers;
7. defeasances;
8. ratings changes; and
9. bankruptcy, insolvency, receivership or similar proceedings.
Note: for the purposes of the event identified in subparagraph (9), the event is considered to
occur when any of the following occur: the appointment of a receiver, fiscal agent or similar
officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has
assumed jurisdiction over substantially all of the assets or business of the obligated person, or
if such jurisdiction has been assumed by leaving the existing governmental body and officials
or officers in possession but subject to the supervision and orders of a court or governmental
authority, or the entry of an order confirming a plan of reorganization, arrangement or
liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the obligated person.
(b) Pursuant to the provisions of this Section 5, the District shall give, or cause to be given,
notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely
manner not more than ten (10) business days after the occurrence of such event:
1. unless described in paragraph 5(a)(5) above, notices or determinations by the Internal
Revenue Service with respect to the tax status of the Bonds or other material events
affecting the tax status of the Bonds;
2. the consummation of a merger, consolidation or acquisition involving an obligated
person or the sale of all or substantially all of the assets of the obligated person, other
than in the ordinary course of business, the entry into a definitive agreement to
undertake such an action or the termination of a definitive agreement relating to any
such actions, other than pursuant to its terms;
3. appointment of a successor or additional trustee or the change of the name of a
trustee;
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4. nonpayment related defaults;
5. modifications to the rights of Owners of the Bonds;
6. Bond calls; and
7. release, substitution or sale of property securing repayment of the Bonds.
(c) Whenever the District obtains knowledge of the occurrence of a Listed Event under 5(b)
above, the District shall as soon as possible determine if such event would be material under applicable federal
securities laws.
(d) If a Listed Event under Section 5(a) has occurred, or if the District determines that knowledge
of the occurrence of a Listed Event under 5(b) above would be material under applicable federal securities
laws, the District shall file a notice of such Listed Event with the Repository in a timely manner not more than
10 business days after the event. Notwithstanding the foregoing, notice of the Listed Event described in
subsection (b)(6) need not be given under this section any earlier than the notice (if any) of the underlying
event is given to Owners of affected Bonds pursuant to the Indenture.
(e) The District hereby agrees that the undertaking set forth in this Disclosure Agreement is the
responsibility of the District and that the Dissemination Agent shall not be responsible for determining whether
the District’s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the
Rule.
SECTION 6. Termination of Reporting Obligation. The District’s obligations under this Disclosure
Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds.
SECTION 7. Dissemination Agent. The District may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may
discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The
Dissemination Agent may resign by providing thirty days written notice to the District and the Trustee. The
Dissemination Agent shall not be responsible for the content of any report or notice prepared by the District
and shall have no duty to review any information provided to it by the District. The Dissemination Agent shall
have no duty to prepare any information report nor shall the Dissemination Agent be responsible for filing any
report not provided to it by the District in a timely manner and in a form suitable for filing.
SECTION 8. Amendment; Waiver.
(a) Notwithstanding any other provision of this Disclosure Agreement, the District may amend
this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that the
following conditions are satisfied:
(1) If the amendment or waiver related to the provisions of Sections 3(a), 4, or 5, it may
only be made in connection with a change in circumstances that arises from a change in legal requirements,
change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or
the type of business conducted;
(2) The undertaking hereunder, as amended or taking into account such waiver, would,
in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the
time of the original execution and delivery of the Bonds, after taking into account any amendments or
interpretations of the Rule, as well as any change in circumstances; and
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(3) The amendment or waiver either (i) is approved by the Owners of the Bonds in the
same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners, or (ii)
does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or
Beneficial Owners of the Bonds.
(b) In the event of any amendment or waiver of a provision of this Disclosure Agreement, the
District shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative
explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of
accounting principles, on the presentation) of financial information or operating data being presented by the
District. In addition, if the amendment is related to the accounting principles to be followed in preparing
financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under
Section 5(a), and (ii) the Annual Report for the year in which the change is made should present a comparison
(in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on
the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
SECTION 9. Format of Filings with Repository. Any report or filing with the Repository pursuant to
this Disclosure Agreement must be submitted in electronic format, accompanied by such identifying
information as is prescribed by the Repository.
SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to
prevent the District from disseminating any other information, using the means of dissemination set forth in
this Disclosure Agreement or any other means of communication, or including any other information in any
Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this
Disclosure Agreement. If the District chooses to include any information in any Annual Report or notice of
occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement,
the District shall have no obligation hereunder to update such information or include it in any future Annual
Report or notice of occurrence of a Listed Event.
SECTION 11. Default. In the event of a failure of the District to comply with any provision of this
Disclosure Agreement, any Owner or Beneficial Owner of the Bonds may take such actions as may be
necessary and appropriate, including seeking mandate or specific performance by court order, to cause the
District to comply with its obligations under this Disclosure Agreement. A default under this Disclosure
Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this
Disclosure Agreement in the event of any failure of the District to comply with this Disclosure Agreement
shall be an action to compel performance and the District shall have no monetary liability to any person as a
result of any failure to comply with the terms of this Disclosure Agreement.
SECTION 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent
shall have only such duties as are specifically set forth in this Disclosure Agreement, and the District agrees, to
the extent permitted by law, to indemnify and save the Dissemination Agent, its officers, directors, employees
and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the
exercise or performance of its powers and duties hereunder, including the costs and expenses (including
attorney’s fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination
Agent’s negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the District
for its services provided hereunder in accordance with its schedule of fees as amended from time to time and
all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its
duties hereunder. In performing its duties hereunder, the Dissemination Agent shall not be deemed to be
acting in any fiduciary capacity for the District, the Owners, or any other party. The obligations of the District
under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
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SECTION 13. Notices. Any notices or communications to or among any of the parties to this
Disclosure Agreement may be given as follows:
To the District: Community Facilities District No. 16-I (Millenia)
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attention: Director of Finance/Treasurer
To the Dissemination Agent: Spicer Consulting Group, LLC
41619 Margarita Road, Suite 101
Temecula, CA 92591
SECTION 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the City,
the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time
of the Bonds, and shall create no rights in any other person or entity.
SECTION 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, all
or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the
same instrument.
SECTION 16. Signatures. This Disclosure Agreement has been executed by the undersigned on the
date hereof, and such signature by the City binds the City to the undertaking herein provided and such
signature by the Dissemination Agent binds the Dissemination Agent to the terms hereof applicable to it.
CITY OF CHULA VISTA
By:
Director of Finance/Treasurer
SPICER CONSULTING GROUP, LLC, as Dissemination
Agent
By:
Authorized Officer
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APPENDIX G
FORMS OF DEVELOPERS CONTINUING DISCLOSURE AGREEMENTS
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APPENDIX H
BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from
sources that the District believes to be reliable, but the District takes no responsibility for the completeness or
accuracy thereof. The following description of the procedures and record keeping with respect to beneficial
ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to
DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds
and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based
solely on information provided by DTC to the District which the District believes to be reliable, but the District and
the Underwriter do not and cannot make any independent representations concerning these matters and do not take
responsibility for the accuracy or completeness thereof. Neither the DTC, Direct Participants, Indirect Participants
nor the Beneficial Owners should rely on the foregoing information with respect to such matters, b ut should instead
confirm the same with DTC or the DTC Participants, as the case may be.
The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the
Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s
partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -
registered Bond will be issued for each annual maturity of the Bonds, each in the aggregate principal a mount of such
maturity, and will be deposited through the facilities of DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New
York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code,
and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues,
corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC ’s
participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post trade settlement among Direct
Participants of sales and other securities transactions in deposited securities, through electronic computerized book -
entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement
of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations. DTC is a wholl y-owned subsidiary of The
Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC
is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both
U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear
through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect
Participants”). DTC has a Standard & Poor’s rating of “AA+.” The DTC Rules applicable to its Participants are on
file with the Securities and Exchange Commission. More informa tion about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond
(“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners
will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to
receive written confirmations providing details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive Bonds representing their
ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the
name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts
H-2
such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their c ustomers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of
significant events with respect to the Bonds, such as prepayments, tenders, defaults, and proposed amendments to
the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the
Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial
Owners may wish to provide their names and addresses to the registrar and request that copies of notices be
provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturit y are being prepaid,
DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be
redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds
unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures,
DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or
such other nominee as may be requested by an authorized representative of DTC. DTC ’s practice is to credit Direct
Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or the
Fiscal Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by
Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or r egistered in “street name,” and will be the
responsibility of such Participant and not of DTC, the Fiscal Agent, or the District, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, di stributions, and
dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of
DTC) is the responsibility of the District or the Fiscal Agent, disbursement of such payments to Direct Participants
will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to
the Fiscal Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the
Participant’s interest in the Bonds, on DTC’s records, to the Fiscal Agent. The requirement for physical delivery of
Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership
rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of
tendered Bonds to the Fiscal Agent’s DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to the District or the Fiscal Agent. Under such circumstances, in the event that a successor
depository is not obtained, physical certificates are required to be printed and delivered.
The District may decide to discontinue use of the system of book-entry only transfers through DTC (or a
successor securities depository). In that event, Bonds will be printed and delivered to DTC.
THE FISCAL AGENT, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE BONDS,
WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY
FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY
ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE
VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE
BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.
I-1
APPENDIX I
EXECUTIVE SUMMARY OF MARKET ABSORPTION STUDY
February 2018 | City of Chula Vista
Millenia Master Plan, Chula Vista, CA
MARKET ABSORPTION ANALYSIS
Chula Vista CFD 16-I (Millenia IA No. 1)
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February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
CONTACT INFORMATION
This market analysis was prepared by Meyers Research,a market research and consulting firm specializing in the real
estate industry.It has been commissioned by the City of Chula Vista.
Peter Dennehy served as Project Director and oversaw all aspects of this assignment.Alexis Wilmot managed the
engagement on a day-to-day basis.Follow-up questions should be directed to Peter Dennehy at (858)381-4380 or
pdennehy@meyersllc.com.
OBJECTIVE
The objective of this analysis is to provide an independent analysis of the residential and commercial market in the San
Diego County and Chula Vista area to determine relevant market trends and to provide conclusions relevant to the Millenia
IA No.1 development plan and the absorption potential for the planned residential units and commercial space.The report
will be used in in conjunction with the sale of bonds for CFD No.16-I (Improvement Area No.1).
LIMITING CONDITIONS
The master developer and builders are responsible for representations about its development plans,marketing expectations
and for disclosure of any significant information that might affect the ultimate realization of the projected results.
There will usually be differences between projections described in this report and actual results because events and
circumstances frequently do not occur as expected,and the differences may be material.
We have no responsibility to update our report for events and circumstances occurring after the date of our report.
Payment of any and all of our fees and expenses is not in any way contingent upon any factor other than our providing
services related to this report.
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February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
TABLE OF CONTENTS
Residential Market Analysis 4
Commercial Market Analysis 20
Location Overview 70
Economic &Demographic Overview 76
Housing Market Overview 86
For-Sale Housing Demand Analysis 104
Appendix 113
4
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Residential Market Analysis
5
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Key Findings
The Millenia master plan is an active mixed-use project in the South County submarket of San Diego County.Improvement Area No.
1 comprises a portion of the Millenia master planned community that is expected to include over 2,500 for-sale and rental units and
over 1.8 million square feet of commercial space at buildout.The Improvement Area No.1 development will consist of 393 residential
units and just over 1.0 million square feet of office in the “Think”(318,000 SF)and “Invent”(700,000 SF)projects.Of the 393
Millenia residential units that are included in Improvement Area No.1,120 units are released and 98 units are sold at the
end of January 2018,with 53 units having closed escrow.
The sale of for-sale products in the overall Millenia master plan started in mid 2016 with +/-217 units at Evo,Metro and Trio (which
are not included in Improvement Area No.1)and additional projects by Shea Homes,KB Home and CalAtlantic/Lennar in
Improvement Area No.1 (sales have started for the Shea and KB Home projects and the CalAtlantic/Lennar project will start sales
later in 2018).There are also completed and in-development rental projects (market-rate and affordable),a hotel and retail
development in Millenia (but not in Improvement Area No.1).A significant office project is planned in Improvement Area No.1,with
campus office space targeted to the technology,life sciences and medical sectors (discussed starting at Slide 19).
The Millenia project is elevated and offers views of the surrounding area,mountains and distant lake/ocean.Some areas of the site
will offer orientations to canyon and open space areas.Millenia is located right off a major north-south freeway (the 125 Toll Road)
and is close to a wide array of existing services,retail,schools,parks,etc.
There is good demand potential in the South County market for ownership housing options,particularly those targeted to family
households of all ages and to empty nester/retirees.South County new home sales increased in 2017 to +/-1,000 units per year and
market capture of County new home sales jumped to 30%.Going forward,South County,which has in the past decade had more
active home building operations,is likely to see increased development and market capture in a region with quite limited residential
land options elsewhere.The majority of active new homes are selling in the $300,000 to $700,000 price categories that are largely
unavailable elsewhere in the region and new projects are selling well.
Development of the 393 residential units in the Improvement Area No.1 began in late 2016 and 84 units had sold by the end of 2017
(and 98 units had sold at the end of January 2018).The remaining units in Improvement Area No.1 are projected to be largely
absorbed by early 2021,with current pricing ranging from the high $300,000s to the mid $600,000s.
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February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Residential and Office Absorption Summary
Our research indicates that the buildout and absorption of residential units within Improvement Area No.1 of Millenia could occur by
early 2021,as shown on the table below (the numbers for 2016 and 2017 are ACTUAL ,the 2018+numbers are PROJECTED).In
the period with the most concurrent product offerings from 2017 to 2020,annual absorption averages 93 units/year (there
were 77 sales with 3 products in 2017,and a 4th product type is expected to be added in 2018).
Project/Subdivision Type Configuration # of Units 2016 2017 2018 2019 2020 2021
Z at Millenia Townhomes ATT 106 2 33 42 29
Element at Millenia Single Family 2,000 70 5 41 24
Skylar at Millenia Single Family 3,250 79 3 30 30 16
Boulevard at Millenia Townhomes ATT 78 18 36 24
Boulevard at Millenia II Townhomes ATT 60 12 36 12
393 7 77 114 107 76 12COMMUNITY SUMMARY
HYPOTHETICAL COMMUNITY SELL OUT
Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 TOTAL
Total Office Demand (SF)77,197 77,197 77,197 77,197 77,197 90,225 90,225 90,225 90,225 93,295 93,295 93,295 1,026,770
Total Office Demand & Suggested Absorption (SF) at Improvement Area No. 1. of Millenia
Our research indicates that the 1.018 million square feet of office space planned within Improvement Area No.1 of Millenia (the sum
of the 318,000 square foot Think campus and the 700,000 square foot Invent campus)could reasonably be absorbed by 2028.
7
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Boundaries of CFD No. 16-I (Millenia, Improvement Area No. 1)
The Millenia master plan is actively in development,with residential,rental,retail and commercial developments underway.The areas
that are included in Improvement Area 1 are noted below,with Residential areas market with a RED star and Commercial areas
marked with a BLUE star.
8
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia IA No. 1 Product Array
The detailed floorplan pricing for the Millenia Improvement Area IA No.1 product array is outlined below.For the active projects (Z,
Element and Skylar)–the pricing is based on actual sales prices offered by the respective builders.For the upcoming Boulevard
project,pricing indicated is our projection based on the other market comparables in Millenia and the overall South County market.
COMMUNITY SPECIFICS FLOORPLANS ACTUAL/EXPECTED PRICING
Subject Property Name Mo Base Incentives Net Base Net Base Assumptions Total Payment Assumptions 80.0%
Location Size Sales Base Price/Options /Price Price ($Price/Options /Estimated Total Price/Monthly Base Addl Tax 4.0%
Product Details Sales Summary Mix SF Bed Bath Level Pkg Pace Price SF Upgrades Reduction Impacting)SF Upgrades Premiums Price SF HOA Tax Rate Assess.Mo. Pmt.
Z at Millenia Shea Homes 14 1,288 2 2.5 3 2 3.5 $386,000 $300 $0 $0 $386,000 $300 $15,000 $0 $401,000 $311 $327 1.14%0.75%$2,364
Chula Vista Millenia 44 1,430 3 2.5 3 2 $409,000 $286 $0 $0 $409,000 $286 $15,000 $0 $424,000 $297 $327 1.14%0.75%$2,481
Product:Townhomes Total Units:106 48 1,475 2 2.5 3 2 $426,000 $289 $0 $0 $426,000 $289 $15,000 $0 $441,000 $299 $327 1.14%0.75%$2,567
Configuration:ATT Units Sold:41
Lot Dimensions:ATT 3 Months Sold:7
Lot 9 Units Remaining:65
% Remaining:61%
Summary Statistics:1,432 3.5 $413,660 $289 $0 $0 $413,660 $289 $15,000 $0 $428,660 $299 $327 1.14%0.75%$2,504
Element at Millenia Shea Homes 18 1,775 2 2.5 3 2 3.5 $498,000 $281 $0 $0 $498,000 $281 $20,000 $10,000 $528,000 $297 $210 1.14%0.75%$2,892
Chula Vista Millenia 16 1,915 3 3.5 3 2 $523,000 $273 $0 $0 $523,000 $273 $20,000 $10,000 $553,000 $289 $210 1.14%0.75%$3,019
Product:Single Family Total Units:70 18 2,157 3 3.5 3 2 $554,246 $257 $0 $0 $554,246 $257 $20,000 $10,000 $584,246 $271 $210 1.14%0.75%$3,178
Configuration:2,000 Units Sold:48 18 2,248 4 3.5 3 2 $587,000 $261 $0 $0 $587,000 $261 $20,000 $10,000 $617,000 $274 $210 1.14%0.75%$3,344
Lot Dimensions:n/a 3 Months Sold:0
Lot 9 Units Remaining:22
% Remaining:31%
Summary Statistics:2,027 3.5 $541,063 $267 $0 $0 $541,063 $267 $20,000 $10,000 $571,063 $282 $210 1.14%0.75%$3,111
Skylar at Millenia KB Home 39 2,602 3 3.5 3 2 2.5 $596,490 $229 $0 $0 $596,490 $229 $35,000 $7,500 $638,990 $246 $146 1.14%0.75%$3,392
Chula Vista Millenia 40 2,659 3 3.5 3 2 $613,490 $231 $0 $0 $613,490 $231 $35,000 $7,500 $655,990 $247 $146 1.14%0.75%$3,478
Product:Single Family Total Units:79
Configuration:3,250 Units Sold:9
Lot Dimensions:n/a 3 Months Sold:9
Lot 14 Units Remaining:70
% Remaining:89%
Summary Statistics:2,631 2.5 $605,098 $230 $0 $0 $605,098 $230 $35,000 $7,500 $647,598 $246 $146 1.14%0.75%$3,435
Boulevard at Millenia CalAtlantic Homes 24 1,681 3 3.0 3 2 3.0 $444,990 $265 $0 $0 $444,990 $265 $15,000 $8,900 $468,890 $279 $327 1.14%0.75%$2,709
Chula Vista Millenia 26 1,816 3 3.0 3 2 $464,990 $256 $0 $0 $464,990 $256 $15,000 $9,300 $489,290 $269 $327 1.14%0.75%$2,812
Product:Townhomes Total Units:78 28 2,046 3 3.0 3 2 $494,990 $242 $0 $0 $494,990 $242 $15,000 $9,900 $519,890 $254 $327 1.14%0.75%$2,968
Configuration:ATT Units Sold:0
Lot Dimensions:ATT 3 Months Sold:0
Lot 17 Units Remaining:78
% Remaining:100%
Summary Statistics:1,857 3.0 $469,605 $253 $0 $0 $469,605 $253 $15,000 $9,392 $493,997 $266 $327 1.14%0.75%$2,836
Boulevard at Millenia II TBD 20 1,681 3 3.0 3 2 3.0 $444,990 $265 $0 $0 $444,990 $265 $15,000 $4,450 $464,440 $276 $327 1.14%0.75%$2,686
Chula Vista Millenia 20 1,816 3 3.0 3 2 $464,990 $256 $0 $0 $464,990 $256 $15,000 $4,650 $484,640 $267 $327 1.14%0.75%$2,789
Product:Townhomes Total Units:60 20 2,046 3 3.0 3 2 $494,990 $242 $0 $0 $494,990 $242 $15,000 $4,950 $514,940 $252 $327 1.14%0.75%$2,943
Configuration:ATT Units Sold:0
Lot Dimensions:ATT 3 Months Sold:0
Lot 11 Units Remaining:60
% Remaining:100%
Summary Statistics:1,848 3.0 $468,323 $253 $0 $0 $468,323 $253 $15,000 $4,683 $488,007 $264 $327 1.14%0.75%$2,806
9
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia IA No. 1 Product Array
The detailed floorplan pricing for the Millenia Improvement Area IA No.1 product array is outlined below.
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750Net Base PriceUnit Size (Square Feet)
Z at Millenia - Townhomes, Shea
Homes, 3.5 sls per mo
Element at Millenia - 2,000 sq ft,
Shea Homes, 3.5 sls per mo
Skylar at Millenia - 3,250 sq ft, KB
Home, 2.5 sls per mo
Boulevard at Millenia - Townhomes,
CalAtlantic Homes, 3.0 sls per mo
Boulevard at Millenia II -
Townhomes, TBD, 3.0 sls per mo
BASE PRICE NET BASE PRICE $ ASSUMPTIONS AVERAGE PRICE
Project/Subdivision Type Configuration # of Units Est % of
Total Units
Average
Unit Size Base Price $/SF
Price
Impacting
Incentives
Net Base Price $/SF Options Premiums Average Price $/SF Estimated
Sales/Month
Z at Millenia Townhomes ATT 106 27%1,432 $413,660 $289 $0 $413,660 $289 $15,000 $0 $428,660 $299 3.50
Element at Millenia Single Family 2,000 70 18%2,027 $541,063 $267 $0 $541,063 $267 $20,000 $10,000 $571,063 $282 3.50
Skylar at Millenia Single Family 3,250 79 20%2,631 $605,098 $230 $0 $605,098 $230 $35,000 $7,500 $647,598 $246 2.50
Boulevard at Millenia Townhomes ATT 78 20%1,857 $469,605 $253 $0 $469,605 $253 $15,000 $9,392 $493,997 $266 3.00
Boulevard at Millenia II Townhomes ATT 60 15%1,848 $468,323 $253 $0 $468,323 $253 $15,000 $4,683 $488,007 $264 3.00
393 100%1,927 $494,284 $261 $0 $494,284 $261 $19,911 $5,868 $520,063 $274 15.50COMMUNITY SUMMARY
10
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia IA No. 1 Projected Absorption
The projected absorption for the Millenia Improvement Area IA No.1 product array is outlined below.
•Z,Element (Shea)and Skylar (KB Home)are open and selling as of early 2018,with +/-84 of the 255 planned units sold at the end of 2017
and remaining units sold-out in the first half of 2020.At the end of January 2018,the sold total was 98 units,with 53 units closed.
•Boulevard at Millenia (Lot 17)is expected to start sales with 78 units in mid 2018 and is projected to sell-out in 2020 (based on that start date).
It is planned to offer 3-story row townhomes and will be developed by CalAtlantic/Lennar.
•Boulevard II (Lot 11)will be similar to the Boulevard product and will come online when that area is largely absorbed.
•Per product absorptions of 2.50 to 3.50 units per month are assumed given the performance to-date of the currently selling programs and
expected market conditions.The actively selling attached and detached projects in South County are typically selling in the +/-3.0 sales per
month range.
Project/Subdivision Type Configuration # of Units 2016 2017 2018 2019 2020 2021
Z at Millenia Townhomes ATT 106 2 33 42 29
Element at Millenia Single Family 2,000 70 5 41 24
Skylar at Millenia Single Family 3,250 79 3 30 30 16
Boulevard at Millenia Townhomes ATT 78 18 36 24
Boulevard at Millenia II Townhomes ATT 60 12 36 12
393 7 77 114 107 76 12COMMUNITY SUMMARY
HYPOTHETICAL COMMUNITY SELL OUT
11
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Conclusion: Base Prices
The base pricing of the Millenia Improvement Area No.1 residential products is in-line with other new housing products in the Otay
Ranch and general South San Diego County market area.
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
$700,000
$750,000
$800,000
1,000 1,500 2,000 2,500 3,000 3,500 4,000Net Base PriceUnit Size (Square Feet)
Z at Millenia - Townhomes, Shea Homes, 3.5 sls per mo
Element at Millenia - 2,000 sq ft, Shea Homes, 3.5 sls per mo
Skylar at Millenia - 3,250 sq ft, KB Home, 2.5 sls per mo
Boulevard at Millenia - Townhomes, CalAtlantic Homes, 3.0 sls per mo
Boulevard at Millenia II - Townhomes, TBD, 3.0 sls per mo
Metro - ATT, Meridian Communities, 2.3/3.7 sls per mo
Trio - ATT, Meridian Communities, 1.8/2.0 sls per mo
Evo - ATT, Meridian Communities, 2.5/2.0 sls per mo
Parc Place - ATT, Pacific Coast Communities, 4.1/4.3 sls per mo
Lovina - ATT, Heritage Building and Development, 4.2/2.7 sls per mo
Aviare - ATT, Sunrise Company, 4.1/3.7 sls per mo
Tosara II - ATT, Pacific Coast Communities, 2.4/0.0 sls per mo
Signature - 5,000 sq ft, Heritage Building and Development, 3.1/2.0 sls per mo
Cantamar - 5,000 sq ft, Pacific Coast Communities, 2.7/2.7 sls per mo
Monte Villa - 3,053 sq ft, Pacific Coast Communities, 2.3/2.7 sls per mo
Aventine - 2,975 sq ft, Cornerstone Communities, 1.9/1.9 sls per mo
Flora at Escaya - ATT, Brookfield Residential, 2.6/3.0 sls per mo
Strata at Escaya - ATT, Shea Homes, 1.9/4.3 sls per mo
Indigo at Escaya - 2,940 sq ft, CalAtlantic Homes, 4.2/3.7 sls per mo
Seville at Escaya - 3,600 sq ft, Shea Homes, 4.2/5.7 sls per mo
Valencia at Escaya - 2,728 sq ft, CalAtlantic Homes, 4.2/2.7 sls per mo
Sierra at Escaya - 2,900 sq ft, Shea Homes, 4.8/4.7 sls per mo
Prado at Escaya - 3,120 sq ft, Brookfield Residential, 4.2/4.7 sls per mo
Castellena at Escaya - 4,500 sq ft, CalAtlantic Homes, 1.8/0.7 sls per mo
Haciendas at Escaya - 4,950 sq ft, Brookfield Residential, 3.4/3.7 sls per mo
Azul at Playa Del Sol - ATT, Pardee Homes, 8.3/10.7 sls per mo
Luna at Playa Del Sol - ATT, Pardee Homes, 7.8/3.7 sls per mo
Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month
12
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Conclusion: Total Prices (SFD Only)
Looking at just the detached product types,the Subject’s total pricing is in-line with other new construction detached for-sale products
in the market.Millenia’s detached products are relatively high-density 3-story detached for-sale products that are selling well in the
competitive market.
$500,000
$525,000
$550,000
$575,000
$600,000
$625,000
$650,000
$675,000
$700,000
$725,000
$750,000
$775,000
$800,000
1,500 2,000 2,500 3,000 3,500 4,000Total PriceUnit Size (Square Feet)
Element at Millenia - 2,000 sq ft, Shea Homes, 3.5 sls per mo
Skylar at Millenia - 3,250 sq ft, KB Home, 2.5 sls per mo
Signature - 5,000 sq ft, Heritage Building and Development, 3.1/2.0 sls per mo
Cantamar - 5,000 sq ft, Pacific Coast Communities, 2.7/2.7 sls per mo
Monte Villa - 3,053 sq ft, Pacific Coast Communities, 2.3/2.7 sls per mo
Aventine - 2,975 sq ft, Cornerstone Communities, 1.9/1.9 sls per mo
Indigo at Escaya - 2,940 sq ft, CalAtlantic Homes, 4.2/3.7 sls per mo
Seville at Escaya - 3,600 sq ft, Shea Homes, 4.2/5.7 sls per mo
Valencia at Escaya - 2,728 sq ft, CalAtlantic Homes, 4.2/2.7 sls per mo
Sierra at Escaya - 2,900 sq ft, Shea Homes, 4.8/4.7 sls per mo
Prado at Escaya - 3,120 sq ft, Brookfield Residential, 4.2/4.7 sls per mo
Castellena at Escaya - 4,500 sq ft, CalAtlantic Homes, 1.8/0.7 sls per mo
Haciendas at Escaya - 4,950 sq ft, Brookfield Residential, 3.4/3.7 sls per mo
Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month
13
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Conclusion: Total Prices (ATT Only)
Looking at the attached products,the Millenia products are positioned in-line with other new construction 2 and 3-story attached
projects in the Otay Ranch and South County market.Attached units in the high $300,000s to low $500,000s are selling well as an
affordable product alternative in a market where new detached options are generally $550,000+.
$350,000
$375,000
$400,000
$425,000
$450,000
$475,000
$500,000
$525,000
$550,000
$575,000
1,000 1,250 1,500 1,750 2,000 2,250 2,500Total PriceUnit Size (Square Feet)
Z at Millenia - Townhomes, Shea Homes, 3.5 sls per mo
Boulevard at Millenia - Townhomes, CalAtlantic Homes, 3.0 sls per mo
Boulevard at Millenia II - Townhomes, TBD, 3.0 sls per mo
Metro - ATT, Meridian Communities, 2.3/3.7 sls per mo
Trio - ATT, Meridian Communities, 1.8/2.0 sls per mo
Evo - ATT, Meridian Communities, 2.5/2.0 sls per mo
Parc Place - ATT, Pacific Coast Communities, 4.1/4.3 sls per mo
Lovina - ATT, Heritage Building and Development, 4.2/2.7 sls per mo
Aviare - ATT, Sunrise Company, 4.1/3.7 sls per mo
Tosara II - ATT, Pacific Coast Communities, 2.4/0.0 sls per mo
Flora at Escaya - ATT, Brookfield Residential, 2.6/3.0 sls per mo
Strata at Escaya - ATT, Shea Homes, 1.9/4.3 sls per mo
Azul at Playa Del Sol - ATT, Pardee Homes, 8.3/10.7 sls per mo
Luna at Playa Del Sol - ATT, Pardee Homes, 7.8/3.7 sls per mo
Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month
14
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Conclusion: Monthly Prices
Looking at monthly housing costs with additional special taxes and HOA fees factored in,the Millenia product pricing is in the upper
range of Otay Ranch area pricing.Millenia offers an established,high-quality urban style master plan with a unique mixed-use land
plan and proximity to the Toll Road and retail/dining.Active new home projects are achieving premium pricing with this location.
$2,000
$2,250
$2,500
$2,750
$3,000
$3,250
$3,500
$3,750
$4,000
$4,250
1,000 1,500 2,000 2,500 3,000 3,500 4,000Estimated Monthly PaymentUnit Size (Square Feet)
Z at Millenia - Townhomes, Shea Homes, 3.5 sls per mo
Element at Millenia - 2,000 sq ft, Shea Homes, 3.5 sls per mo
Skylar at Millenia - 3,250 sq ft, KB Home, 2.5 sls per mo
Boulevard at Millenia - Townhomes, CalAtlantic Homes, 3.0 sls per mo
Boulevard at Millenia II - Townhomes, TBD, 3.0 sls per mo
Metro - ATT, Meridian Communities, 2.3/3.7 sls per mo
Trio - ATT, Meridian Communities, 1.8/2.0 sls per mo
Evo - ATT, Meridian Communities, 2.5/2.0 sls per mo
Parc Place - ATT, Pacific Coast Communities, 4.1/4.3 sls per mo
Lovina - ATT, Heritage Building and Development, 4.2/2.7 sls per mo
Aviare - ATT, Sunrise Company, 4.1/3.7 sls per mo
Tosara II - ATT, Pacific Coast Communities, 2.4/0.0 sls per mo
Signature - 5,000 sq ft, Heritage Building and Development, 3.1/2.0 sls per mo
Cantamar - 5,000 sq ft, Pacific Coast Communities, 2.7/2.7 sls per mo
Monte Villa - 3,053 sq ft, Pacific Coast Communities, 2.3/2.7 sls per mo
Aventine - 2,975 sq ft, Cornerstone Communities, 1.9/1.9 sls per mo
Flora at Escaya - ATT, Brookfield Residential, 2.6/3.0 sls per mo
Strata at Escaya - ATT, Shea Homes, 1.9/4.3 sls per mo
Indigo at Escaya - 2,940 sq ft, CalAtlantic Homes, 4.2/3.7 sls per mo
Seville at Escaya - 3,600 sq ft, Shea Homes, 4.2/5.7 sls per mo
Valencia at Escaya - 2,728 sq ft, CalAtlantic Homes, 4.2/2.7 sls per mo
Sierra at Escaya - 2,900 sq ft, Shea Homes, 4.8/4.7 sls per mo
Prado at Escaya - 3,120 sq ft, Brookfield Residential, 4.2/4.7 sls per mo
Castellena at Escaya - 4,500 sq ft, CalAtlantic Homes, 1.8/0.7 sls per mo
Haciendas at Escaya - 4,950 sq ft, Brookfield Residential, 3.4/3.7 sls per mo
Azul at Playa Del Sol - ATT, Pardee Homes, 8.3/10.7 sls per mo
Luna at Playa Del Sol - ATT, Pardee Homes, 7.8/3.7 sls per mo
Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month
15
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Comparison vs. Competitive Projects
The active competitive projects in South County are again expanding with new development,but are generally selling well with new home sales
in this submarket increasing 108%from 2016 to 2017 and market capture of County new home sales increasing from 20%in 2015/2016 to 30%
in 2017 and matches the peak capture of County sales seen in 2001.South County’s market capture is now once again expanding
considerably because it is the only area of the County with large amounts of developable residential land and able to offer relatively
affordable new home products.
BUILDER /
UNIT COUNT SUMMARY SALES PACE AVERAGE MONTHLY
COMMUNITY DEVELOPER CITY LOT SIZE TOTAL RLSD SOLD AVAIL.REMAIN ALL 3 MO.SF NET PRICE $/SF HOA TAX PAYMENT
Z at Millenia Shea Homes Chula Vista ATT 106 -41 -65 3.5 --1,432 $428,660 $299 $327 1.89%$2,504
Element at Millenia Shea Homes Chula Vista 2,000 70 -48 -22 3.5 --2,027 $571,063 $282 $210 1.89%$3,111
Skylar at Millenia KB Home Chula Vista 3,250 79 -9 -70 2.5 --2,631 $647,598 $246 $146 1.89%$3,435
Boulevard at Millenia CalAtlantic Homes Chula Vista ATT 78 -0 -78 3.0 --1,857 $493,997 $266 $327 1.89%$2,836
Boulevard at Millenia II TBD Chula Vista ATT 60 -0 -60 3.0 --1,857 $489,353 $264 $327 1.89%$2,813
Metro Meridian Communities Chula Vista ATT 70 36 36 N/Av 36 2.3 3.7 1,535 $436,000 $284 $299 1.65%$2,415
Trio Meridian Communities Chula Vista ATT 81 35 34 N/Av 37 1.8 2.0 1,732 $487,667 $282 $299 1.55%$2,665
Evo Meridian Communities Chula Vista ATT 66 51 47 N/Av 26 2.5 2.0 1,824 $508,000 $279 $299 1.55%$2,764
Parc Place Pacific Coast Communit Chula Vista ATT 175 48 36 N/Av 139 4.1 4.3 1,429 $408,233 $286 $285 2.00%$2,388
Lovina Heritage Building and De Chula Vista ATT 78 58 44 N/Av 39 4.2 2.7 1,986 $482,567 $243 $240 2.00%$2,726
Aviare Sunrise Company Chula Vista ATT 171 171 170 N/Av 3 4.1 3.7 1,592 $445,525 $280 $385 2.00%$2,681
Tosara II Pacific Coast Communit Chula Vista ATT 99 99 74 N/Av 74 2.4 0.0 2,114 $465,233 $220 $253 2.00%$2,650
Signature Heritage Building and De Chula Vista 5,000 79 27 23 N/Av 58 3.1 2.0 3,481 $780,045 $224 $48 2.00%$4,067
Cantamar Pacific Coast Communit Chula Vista 5,000 93 14 8 N/Av 89 2.7 2.7 2,768 $677,900 $245 $48 2.00%$3,541
Monte Villa Pacific Coast Communit Chula Vista 3,053 72 26 23 N/Av 52 2.3 2.7 2,814 $606,795 $216 $48 2.00%$3,175
Aventine Cornerstone Communitie Chula Vista 2,975 100 11 10 N/Av 95 1.9 1.9 2,210 $578,190 $262 $160 2.00%$3,139
Flora at Escaya Brookfield Residential Chula Vista ATT 107 16 12 N/Av 98 2.6 3.0 1,494 $413,500 $277 $358 2.00%$2,489
Strata at Escaya Shea Homes Chula Vista ATT 72 18 15 N/Av 59 1.9 4.3 1,608 $450,667 $280 $385 2.00%$2,707
Indigo at Escaya CalAtlantic Homes Chula Vista 2,940 111 41 28 N/Av 83 4.2 3.7 2,042 $588,600 $288 $110 2.00%$3,143
Seville at Escaya Shea Homes Chula Vista 3,600 135 37 30 N/Av 107 4.2 5.7 2,745 $672,500 $245 $108 2.00%$3,573
Valencia at Escaya CalAtlantic Homes Chula Vista 2,728 118 39 29 N/Av 90 4.2 2.7 2,108 $621,900 $295 $125 #REF!$3,329
Sierra at Escaya Shea Homes Chula Vista 2,900 122 43 33 N/Av 90 4.8 4.7 1,970 $561,000 $285 $108 2.00%$2,999
Prado at Escaya Brookfield Residential Chula Vista 3,120 130 39 28 N/Av 102 4.2 4.7 2,417 $629,333 $260 $125 2.00%$3,368
Castellena at Escaya CalAtlantic Homes Chula Vista 4,500 76 27 16 N/Av 64 1.8 0.7 3,021 $750,900 $249 $125 2.00%$3,994
Haciendas at Escaya Brookfield Residential Chula Vista 4,950 76 29 24 N/Av 53 3.4 3.7 3,414 $774,000 $227 $125 2.00%$4,113
Azul at Playa Del Sol Pardee Homes San Diego ATT 121 115 110 N/Av 18 8.3 10.7 1,740 $458,500 $264 $275 1.46%$2,503
Luna at Playa Del Sol Pardee Homes San Diego ATT 96 96 93 N/Av 2 7.8 3.7 1,822 $470,167 $258 $275 1.56%$2,560
2,248 1,076 923 0 1,414 3.6 3.4 2,176 $557,601 $261 $204 1.89%$3,045NEW HOME AVERAGE:
16
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Buildout of South County Projects
The projected buildout of the active new home projects in South San Diego County is shown below.There are 1,671 units left in active master
plans,with quarterly absorption of +/-236 units.The active projects will largely sell out in the 2018-2020 period.There are +/-162 units remaining
in infill projects,with most units selling out in 2018.There were +/-1,000 new homes sold in the submarket in 2017 and +/-890 sales projected in
the active projects excluding the +/111 units in Millenia Improvement Area No.1 –putting the South County submarket on pace for +/-1,000 new
home sales in 2018.
Project Name Builder Master Plan Type
Total
Units
Units
Sold Left Sales/Mo Sales/Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Projects in Master Plans
Flora at Escaya Brookfield Residential Escaya at Otay Ranch ATT 107 12 95 2.54 8 5 8 8 8 8 8 8 8 8 8 8 8 2
Haciendas at Escaya Brookfield Residential Escaya at Otay Ranch SFD 76 24 52 3.41 10 7 10 10 10 10 5
Prado at Escaya Brookfield Residential Escaya at Otay Ranch SFD 130 28 102 3.51 11 7 11 11 11 11 11 11 11 11 7
Seville at Escaya Shea Homes Escaya at Otay Ranch SFD 135 30 105 3.76 11 8 11 11 11 11 11 11 11 11 9
Sierra at Escaya Shea Homes Escaya at Otay Ranch SFD 122 33 89 4.14 12 8 12 12 12 12 12 12 9
Strata at Escaya Shea Homes Escaya at Otay Ranch ATT 72 15 57 1.85 6 4 6 6 6 6 6 6 6 6 5
Indigo at Escaya CalAtlantic Homes Escaya at Otay Ranch SFD 111 28 83 3.59 11 7 11 11 11 11 11 11 10
Valencia at Escaya CalAtlantic Homes Escaya at Otay Ranch SFD 118 29 89 3.73 11 7 11 11 11 11 11 11 11 5
Castellena at Escaya CalAtlantic Homes Escaya at Otay Ranch SFD 76 16 60 2.01 6 4 6 6 6 6 6 6 6 6 6 2
Vista Del Cielo Shea Homes Bella Lago SFD 52 20 32 3.04 9 6 9 9 8
Metro Meridian Communities Millenia ATT 70 36 34 2.08 6 4 6 6 6 6 6
Trio Meridian Communities Millenia ATT 150 34 116 1.80 8 5 8 8 8 8 8 8 8 8 8 8 8 8 8 7
Evo Meridian Communities Millenia ATT 66 47 19 2.36 7 5 7 7
Azul at Playa Del Sol Pardee Homes Ocean View Hills SFD 121 114 7 8.37 25 7
Parc Place Pacific Coast Communities Otay Ranch ATT 175 36 139 3.48 10 7 10 10 10 10 10 10 10 10 10 10 10 10 10 2
Cantamar Pacific Coast Communities Otay Ranch SFD 111 8 103 2.56 8 5 8 8 8 8 8 8 8 8 8 8 8 8 2
Signature Heritage Building and Development Otay Ranch SFD 79 23 56 3.05 9 6 9 9 9 9 9 5
Lovina Heritage Building and Development Otay Ranch ATT 78 44 34 3.87 12 8 12 12 2
Monte Villa Pacific Coast Communities Otay Ranch SFD 72 23 49 2.23 7 4 7 7 7 7 7 7 3
Aventine Cornerstone Communities Otay Ranch SFD 100 10 90 2.51 8 5 8 8 8 8 8 8 8 8 8 8 5
Anacapa Otay Ranch New Homes Otay Ranch SFD 54 35 19 0.43 1 1 2 2 2 2 2 2 2 2 2
Presidio V2 Otay Ranch New Homes Otay Ranch SFD 47 45 2 0.55 2 1 1
Aviare Sunrise Company Otay Ranch ATT 201 170 31 3.96 12 8 12 11
Tosara I & II Pacific Coast Communities Otay Ranch ATT 173 99 74 2.41 7 5 7 7 7 7 7 7 7 7 7 6
Maravilla at Vista Del Sur Cornerstone Communities Vista Del Sur ATT 129 118 11 3.56 11 7 4
Tesoro at Vista Del Sur Cornerstone Communities Vista Del Sur ATT 134 11 123 3.00 9 6 9 9 9 9 9 9 9 9 9 9 9 9 9
2,759 1,088 1,671 236 157 205 199 170 160 155 140 127 99 87 59 48 37 29 9 0
Infill Projects
Norfolk at Bayside Landing Beazer Homes ATT 119 68 51 6.54 20 13 20 18
Hampshire at Bayside Landing Beazer Homes ATT 75 45 30 4.42 13 9 13 8
Blu Strand Shea Homes SFD 84 76 8 3.88 12 8
Sea Glass Shea Homes SFD 91 79 12 3.94 12 8 4
Vista Mar City Ventures ATT 87 63 24 9.46 28 19 5
Parkview Terrace KB Home SFD 37 0 37 3.00 9 6 9 9 9 4
493 331 162 94 62 51 35 9 4 0 0 0 0 0 0 0 0 0 0 0
2018 2019 2020 2021
17
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Projected New Home Supply & Demand
While the amount of development in the South San Diego market is increasing,the demand for housing still outstrips the housing
being produced.The projected demand for housing in the 2018 to 2022 period is 950 to 1,400 units per year,but projected delivery is
in the +/-1,000 units per year for 2018 and drops off in 2019 and beyond (although new units will be added in Millenia and other
active and entitled MPCs as active projects sell out).
PROJECTED NEW HOME SUPPLY & DEMAND
SAN DIEGO MSA & SOUTH COUNTY SUBMARKET: 2008-2022
ACTUAL HISTORICAL SALES PROJECTED NEW HOME SALES DEMAND
DEMAND PROJECTION 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018P 2019P 2020P 2021P 2022P
New Home Sales (1)
San Diego MSA 2,775 2,755 2,277 2,041 2,785 2,340 1,939 2,441 2,323 3,132 3,250 3,500 3,750 4,000 4,250
South County % Capture of MSA 19.4%20.6%15.1%27.1%22.3%18.8%15.4%19.7%19.8%30.5%31.0%32.0%33.0%34.0%35.0%
South County Submarket (Forecast based on historical share)538 567 343 553 620 441 299 482 460 955 1,008 1,120 1,238 1,360 1,488
Less: Estimated 5% for Sales in Misc. Neighborhoods (27)(28)(17)(28)(31)(22)(15)(24)(23)(48)(50)(56)(62)(68)(74)
Potential Absorption for MPC's in South County Submarket 511 539 326 525 589 419 284 458 437 907 957 1,064 1,176 1,292 1,413
SUPPLY PROJECTION (2)ACTIVE PROJECTS INVENTORY ESTIMATED SALES OF REMAINING UNITS
ACTIVE PROJECTS WITHIN MASTER PLANNED PROJECTS Total Units Sold (6)Remaining (2)2018P 2019P 2020P 2021P 2022P
Escaya at Otay Ranch 947 215 732 315 315 100 2
Bella Lago 52 20 32 32 0 0 0 0
Millenia (excludes Improvement Area No. 1)286 117 169 70 44 32 23
Ocean View Hills 950 200 750 150 200 200 200
Otay Ranch-V2 (Montecito)1,090 493 597 253 187 125 32
Vista Del Sur 263 129 134 44 36 36 18
Total Inventory and Future Sales within Active South County Master Planned Projects 3,588 1,174 2,414 864 782 493 275 0
Over Supply / (Under Supply) of Projected Demand (93)(282)(683)(1,017)(1,413)
Cumulative Over Supply / (Under Supply) before Future Proposed Projects Add units to the Market (93)(375)(1,058)(2,075)(3,488)
PROPOSED PROJECTS WITH POTENTIAL HOME SALES IN 2018+ (3)Planned (2)SF MF 2018P 2019P 2017P 2018P 2019P
Otay Ranch-V13 (4)1,938 1,881 57
Otay Ranch-V8 West (5)2,050 331 1,719
Otay Ranch-V4 350 350 0
Otay Ranch-V10 (4)1,740 695 1,045
Otay Ranch-V8 East (4)3,560 943 2,617
Otay Ranch-V9 (5)4,000 166 3,834
Aggregate Estimate of Otay Mesa Future Projects 8,443 1,625 6,818
Total Estimated Proposed / Future Projects with Potential Market Entry by 2018 22,081 5,991 16,090
Footnotes
1) Actual Existing and New Home sales through 2017 per Meyers; projected sales for 2018-2022 per Meyers Research.
2/ Remaining Active supply includes for-sale units in active projects only, some MPCS have future unit count
3) Unit Counts within Future Projects are Estimates Only - Actual Timing is dependent upon variety of factors including: efforts of Applicant, City/Agency Approvals, and capital resources
4) Per materials provided by builder.
5) Per builder.
6) Sold through 2/4/2018 per sales offices
18
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Recommendation: Otay Ranch SFD Resales
The Subject’s detached pricing is in-line with the recent detached sales trendline for “newer”(built since 2000)single-family homes in
the Millenia zip code (91915)and with sales for similar sized homes in surrounding Otay Ranch areas (91914 –the more upscale
Rolling Hills Ranch,Eastlake Woods and San Miguel Ranch neighborhoods and 91913 –the areas of Otay Ranch to the west of the
125 Toll Road and south of Olympic Parkway).
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000Total Price / Closed PriceUnit Size (Square Feet)
Element at Millenia - 2,000 sq ft, Shea Homes, 3.5 sls per mo
Skylar at Millenia - 3,250 sq ft, KB Home, 2.5 sls per mo
91915 Zip Code SFD (Sold L6M)
91914 Zip Code SFD (Sold L6M)
91913 Zip Code SFD (Sold L6M)
Linear (91915 Zip Code SFD (Sold L6M))
Linear (91914 Zip Code SFD (Sold L6M))
Linear (91913 Zip Code SFD (Sold L6M))
Source: Meyers Research
AVERAGE
REFERENCE AREA YEAR BUILT LOT SIZE SALES ALL 3 MO.SF NET PRICE $/SF
91915 Zip Code SFD (Sold L6M)2004 6,040 113 19.2 16.0 2,386 $621,532 $260
91914 Zip Code SFD (Sold L6M)2004 9,673 79 13.8 10.3 2,893 $779,288 $269
91913 Zip Code SFD (Sold L6M)2006 5,064 174 29.4 24.7 2,299 $590,642 $257
122 20.8 17.0 2,526 $663,821 $262
SALES PACE
RESALE MARKET AVERAGE:
19
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Recommendation: Otay Ranch ATT Resales
The Subject’s attached pricing is in the upper range of existing attached resale values in the nearby areas of Otay Ranch.With a
location right off the Toll Road in the premier Millenia mixed-use community,new construction townhomes such as those proposed
can achieve this premium market position.
$300,000
$325,000
$350,000
$375,000
$400,000
$425,000
$450,000
$475,000
$500,000
$525,000
$550,000
750 1,000 1,250 1,500 1,750 2,000 2,250 2,500Total Price / Closed PriceUnit Size (Square Feet)
Z at Millenia - Townhomes, Shea Homes, 3.5 sls per mo
Boulevard at Millenia - Townhomes, CalAtlantic Homes, 3.0 sls per
mo
Boulevard at Millenia II - Townhomes, TBD, 3.0 sls per mo
91915 Zip Code Condo (Sold L6M)
91914 Zip Code Condo (Sold L6M)
91913 Zip Code Condo (Sold L6M)
Linear (91915 Zip Code Condo (Sold L6M))
Source: Meyers Research
AVERAGE
REFERENCE AREA YEAR BUILT LOT SIZE SALES ALL 3 MO.SF NET PRICE $/SF
91915 Zip Code Condo (Sold L6M)2008 #DIV/0!105 18.1 13.0 1,453 $401,160 $276
91914 Zip Code Condo (Sold L6M)2006 #DIV/0!11 2.0 2.0 1,311 $388,591 $296
91913 Zip Code Condo (Sold L6M)2007 #DIV/0!111 18.8 16.3 1,402 $388,282 $277
76 13.0 10.4 1,389 $392,677 $283
SALES PACE
RESALE MARKET AVERAGE:
20
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Commercial Market Analysis
February 2018 | City of Chula Vista
Millenia | San Diego County, California 21
Millenia is a mixed-use,urban oriented community located at Birch Road and SR-125 in Chula Vista,California.The location is proximate to
established residential communities of Eastlake and Otay Ranch as well as parks,schools and retail options—the Otay Ranch Town Center is
located just north of the Millenia Site and offers several Class A restaurant and retail tenants (Best Buy,Macy’s,H&M,Cheesecake Factory,
PF Chang’s).Further,the Otay border crossing is just 5 miles to the south,and Downtown San Diego is 18 miles to the north.
Millenia’s Locational Attributes Create Desirable Office Development
Source: Chesnut Development, Gensler
Tijuana
Otay
Ranch
Town
Center
Imperial Beach Coronado
San Diego
Olympian
High School
Mater Dei
Catholic
High School
All Season
Park
SR-125
Birch
Road
Millenia
Office
Campus
February 2018 | City of Chula Vista
Millenia | San Diego County, California 22
Millenia consists of multiple parcels in an integrated design concept.Plans call for multifamily units,office space,retail/hospitality,civic and
mixed-use projects.In addition there will be six themed urban parks and a variety of tree-lined promenades,gathering places,bikeways and
plazas.The three planned office phases are outlined below,the first of which is Think,which will include two office buildings totaling 318,000
leasable square feet as well as a parking structure and amenity building.Only “Think”and “Invent”are in Improvement Area No.1.
Millenia Calls For Office, Retail and Residential Uses
Source: Chesnut Development, Gensler
Think –Campus 001:Two buildings totaling 318,000 Sq.Ft.designed
to facilitate a new generation of higher education,a collaborative of
multiple domestic and international universities.
Invent –Campus 003:With four buildings totaling 700,000 Sq.Ft.and
the ability to expand to 1,000,000 Sq.Ft.,Invent is the largest campus at
Millenia Office.
Discover –Campus 002:One building of over 400,000 Sq.Ft.,
programmed for research and life science.
February 2018 | City of Chula Vista
Millenia | San Diego County, California 23
Images of the design concepts for the Think,Invent and Discover campuses are below.Think consists of two office buildings of 150,000 and
168,000 square feet,an amenity building with a cafe and fitness center,and a 1,373-car parking garage.The Think campus is targeting LEED
Platinum certification,and also a Gold Rating under the new WELL Building Standard which places emphasis on increasing well-being,health,
and ultimately productivity of the people inside the space.
Millenia Planned for Three Phases of Office Development
Source: Chesnut Development, Gensler
Think Campus –318,000 SF
February 2018 | City of Chula Vista
Millenia | San Diego County, California 24
Key Conclusions
Millenia Office and Residential Analysis, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia | San Diego County, California 25
Based on our research,including visits to the site and new/existing office projects,market trends,broker interviews and supply-demand analysis,the proposed
office development at Millenia appears supportable as planned.The following paragraphs summarize the key conclusions from our office analysis:
•Market conditions are tight for office space in San Diego County and the South Bay.Countywide average office lease rates have increased recently,
to a high of $2.67 per square foot per month in the most recent quarter,exceeding the previous high of $2.60 per square foot per month during 2008—it
should be noted that vacancy was much higher in 2008 (14.4%).The vacancy rate has trended downward as well,from 15.2%in 2009 to 9.6%in the most
recent quarter,which represents a relatively strong office market.San Diego office market absorption has outpaced deliveries in seven out of the past eight
years,with very strong gains in absorption in 2016 in particular (1.487 million square feet absorbed versus only 308,000 square feet delivered).In fact,
absorption has nearly doubled new deliveries since 2010,with a combined 10.8 million square feet of absorption versus 5.6 million square feet of
deliveries—this indicates a supply constrained office market that can support additional new office space.
•Office inventory in Chula Vista and the South Bay has not increased in recent years.Office inventory in the South Bay market has been at just over
10.9 million square feet for the past five years.During this time,there has been minimal increase in inventory in recent years and actually a decrease of
inventory in 2016 and 2017 (likely due to teardowns of older product or office buildings repurposed for other uses).Office market trends are strong in the
South Bay,as average office lease rates have increased in the most recent quarters,to a high of $2.23 per square foot per month in Q4 2017.The vacancy
rate has decreased from 9.1%in Q1 2014 to a low of 5.0%in late 2017,which is a very low office vacancy rate and indicates a supply constrained market.
Annual net absorption has fluctuated as compared to completions in recent years—2016 was particularly strong,with over 245,000 square feet absorbed
versus no new deliveries (per CoStar data).This data indicates that leasing activity was predominantly existing space that was vacant.Last year (2017)has
continued to deliver little to no new completions coupled with 141,000 square feet of positive net absorption.
•Locational characteristics for Millenia are very strong for office development.The location is proximate to established residential communities of
Eastlake and Otay Ranch as well as parks,schools and retail options—the Otay Ranch Town Center is located just north of the Millenia Site and offers
several Class A restaurant and retail tenants (Best Buy,Macy’s,H&M,Cheesecake Factory,PF Chang’s).Further,the Otay border crossing is just 5 miles
to the south,and Downtown San Diego is 18 miles to the north.
•Developer expectations for office space absorption and lease rates are reasonable and inline with demand and the office market.Millenia is
planned for a minimum of 1.425 million square feet among three phases.Our realistic demand model supports an average of 87,800 square feet of office
space at the Subject Project annually,for a total of 1.492 million square feet through 2033.Further,the initial Think office campus is planned for a total of
318,000 square feet of absorbed office space,which could reasonably be absorbed within a +/-4 year timeframe from project completion—a timeline that is
consistent with the lease-up expectations of LMC Millenia Investment Company,LLC.Finally,the 1.018 million square feet of office space planned within
Improvement Area No.1 of Millenia (the sum of the 318,000 square foot Think campus and the 700,000 square foot Invent campus)could reasonably be
absorbed by the end of 2028.
•We estimate land values to be in the $30.00 to $40.00 per square foot range.Commercial land sales transactions average $20.08 per square foot in the
South Bay,and land in Chula Vista has traded at an average of $21.42 per square foot,with the highest price land among these comparables is a small infill
site in Chula Vista,which traded at $76.52 per square foot.It is important to note that there is an inverse relationship between land size and price per square
foot—the previously mentioned infill site that commanded the highest price per square foot is only 1.26 acres,while two of the largest sites commended the
lowest price per square foot (Ocean View Hills Pkwy and an 8th Street site).Commercial land asking prices near Millenia are $30.00 per square foot.There
are two key locations with commercial land for sale in Chula Vista:The District at Eastlake,a business park that can accommodate a number of commercial
uses (office,hotel,flex,medical,technology,manufacturing,showroom retail)and Auto Park Place,which are parcels dedicated to auto dealership uses.
Both of these locations have asking prices for finished commercial lots of $30.00 per square foot.Given the strong locational attributes and design of
Millenia,we believe it could command land values upwards of $30.00 per square foot.
Millenia Phase 1 Office Could Be Absorbed in Four Years, Land Value of $30-$40/SF
February 2018 | City of Chula Vista
Millenia | San Diego County, California 26
The tables below represent realistic demand (average CalTrans job projections and Woods &Poole job projections)for office space annually
over the next 20 years.Millenia is planned for a total of 1.425 million square feet among three phases.Our realistic demand model supports an
average of 87,800 square feet of office space at the Subject Project annually,for a total of 1.492 million square feet through 2033.Further,the
initial Think office campus is planned for a total of 318,000 square feet of office space,which could reasonably be absorbed within a +/-4 year
timeframe—this is consistent with the lease-up expectations of the Project Developer and commercial brokers that are active in the local market.
Finally,the 1.018 million square feet of office space planned within Improvement Area No.1 of Millenia (the sum of the 318,000 square
foot Think campus and the 700,000 square foot Invent campus)could reasonably be absorbed by the end of 2028.
Demand Indicates Millenia Office SF Could be Absorbed in +/-17 Years
Year
San Diego MSA
Office Demand (SF)
South Bay
Demand (SF)
Total Office Demand
(SF) SUBJECT
Sum of Five-Year
Demand (SF)
2017 1,575,449 153,606 77,197
2018 1,575,449 153,606 77,197
2019 1,575,449 153,606 77,197
2020 1,575,449 153,606 77,197
2021 1,575,449 153,606 77,197
2022 1,702,363 178,748 90,225
2023 1,702,363 178,748 90,225
2024 1,702,363 178,748 90,225
2025 1,702,363 178,748 90,225
2026 1,702,363 178,748 93,295
2027 1,680,983 184,908 93,295
2028 1,680,983 184,908 93,295
2029 1,680,983 184,908 93,295
2030 1,680,983 184,908 93,295
2031 1,680,983 184,685 93,146
2032 1,605,960 184,685 93,146
2033 1,605,960 184,685 93,146
AVERAGE:1,647,406 173,851 87,812 373,199
TOTAL:28,005,897 2,955,461 1,492,796 1,492,796
MEYERS Realistic Buildout for MILLENIA (Avg. of CalTrans, Woods & Poole Proj.) -
Office Size and Demand (SF)
385,985
454,196
186,291
466,324
Four Year total =
308,000 SF
Four Year total =
1.028 M SF
February 2018 | City of Chula Vista
Millenia | San Diego County, California 27
Office Demand Analysis
Millenia Office and Residential Analysis, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia | San Diego County, California 28
Our employment-based demand model considers employment in the San Diego MSA employment by industry including current and
employment growth over time.We consider two data sources for this demand:the California Department of Transportation (CalTrans),and
Woods &Poole,a national data source that provides economic data and projections for metro areas throughout the US.
Our experience using these data sources is that CalTrans tends to be conservative in terms of existing jobs and projections,while Woods &
Poole tends to be optimistic in their baseline of jobs and projections.Accordingly,we use the average of both data sources and demand
models to reach a conclusion of job growth and demand for additional office square footage in the MSA and at Millenia specifically.
Note:a local source based in San Diego (SANDAG)provides some data and projections related to job growth,but has limitations:1)the data is
somewhat outdated,with a baseline of 2012 and no jobs by industry are reported in 2012;and 2)projections are in very limited timeframes of
2020,2035 and 2050 only.For these reasons,we elected to use the CalTrans and Woods &Poole data sources since the data is more
complete and more recent (published in 2017 and 2018).
Office Demand Analysis –Methodology and Data Sources
February 2018 | City of Chula Vista
Millenia | San Diego County, California 29
The demand analysis below is based on job growth projections per Woods &Poole by industry for the San Diego MSA,then refined by applying
low and high capture (%)estimates for the appropriate submarkets,and ultimately for the Subject Project.The tables below represent demand
(average of low and high capture %)for office space annually over the next 20 years.Our Woods &Poole based demand model supports
an average of 117,782 square feet of office space at the Subject Project annually,for a total of 1.531 million square feet during a 13
year timeframe.
Woods & Poole Demand Indicates Millenia Office SF Could be Absorbed in +/-13 Years
Year Year
San Diego MSA
Office Demand (SF)
South Bay
Demand (SF)
Total Office Demand
(SF) SUBJECT
Sum of Five-Year
Demand (SF)
Low High Low High 2017 2,137,226 208,380 104,724
2017 - 2022 9.5%10.0%40.0%60.0%2018 2,137,226 208,380 104,724
2022 - 2027 10.0%11.0%40.0%60.0%2019 2,137,226 208,380 104,724
2027 - 2032 10.5%11.5%40.0%60.0%2020 2,137,226 208,380 104,724
2032 - 2037 11.0%12.0%40.0%60.0%2021 2,137,226 208,380 104,724
2037 - 2042 11.5%12.5%40.0%60.0%2022 2,293,860 240,855 121,575
2023 2,293,860 240,855 121,575
2024 2,293,860 240,855 121,575
Market:Capture increases over time, as this is an emerging location and 2025 2,293,860 240,855 121,575
an office market in the "path of growth", likely to increase over time.2026 2,293,860 240,855 130,313
Subject:Capture as a percentage of the South Bay Market is intentionally 2027 2,347,988 258,279 130,313
aggressive (40%-60%) since Millenia's concept and design 2028 2,347,988 258,279 130,313
is unique, location is excellent and is a compelling opportunity 2029 2,347,988 258,279 130,313
to capture a large share of South Bay office demand.
AVERAGE:2,246,107 232,385 117,782 510,391
For Perspective:TOTAL:29,199,394 3,021,010 1,531,172 1,531,172
South Bay Market share of MSA - Costar 9.5%
Average Annual Deliveries in MSA (1982 - 2017) - Costar 2,180,556
Average Annual Deliveries in MSA (2000 - 2017) - Costar 1,694,444
Average Absorption in MSA (2008 - 2017) - Costar 1,013,095
Average Absorption in MSA (2014 - 2017) - Costar 1,218,230
Avg. Annual Deliveries in South Bay Market (2014 - 2017) - Costar 3,987
Avg. Absorption in South Bay Market (2014 - 2017) - Costar 131,044
Source: Meyers Research, Woods & Poole, CoStar
MEYERS Optimistic Buildout for MILLENIA (Woods & Poole Projections) -
Office Size and Demand (SF) Capture Rates
Estimated Annual Capture:
SOUTH BAY (%)
Estimated Annual Capture:
MILLENIA (SUBJECT) (%)
Assumptions/ Rationale:
523,620
MEYERS Optimistic Buildout for MILLENIA (Woods & Poole Projections) -
Office Size and Demand (SF)
616,612
390,940
February 2018 | City of Chula Vista
Millenia | San Diego County, California 30
The demand analysis below is based on job growth projections per the California Department of Transportation (CalTrans)by industry for the
San Diego MSA,then refined by applying low and high capture (%)estimates for the appropriate submarkets,and ultimately for the Subject
Project.The tables below represent demand (average of low and high capture %)for office space annually over the next 27 years.Our
CalTrans-based demand model supports an average of 53,623 square feet of office space at the Subject Project annually,for a total of 1.447
million square feet during a 27 year timeframe.It is important to note that CalTrans job projections are conservative,and we have considered a
demand model based on Woods &Poole projections as well (see the following page).
CalTrans Demand Indicates Millenia Office SF Could be Absorbed in +/-27 Years
Year Year
San Diego MSA
Office Demand (SF)
South Bay
Demand (SF)
Total Office Demand
(SF) SUBJECT
Sum of Five-Year
Demand (SF)
Low High Low High 2017 1,013,671 98,833 49,670
2017 - 2022 9.5%10.0%40.0%60.0%2018 1,013,671 98,833 49,670
2022 - 2027 10.0%11.0%40.0%60.0%2019 1,013,671 98,833 49,670
2027 - 2032 10.5%11.5%40.0%60.0%2020 1,013,671 98,833 49,670
2032 - 2037 11.0%12.0%40.0%60.0%2021 1,013,671 98,833 49,670
2037 - 2042 11.5%12.5%40.0%60.0%2022 1,110,867 116,641 58,876
2042 - 2047 12.0%13.0%40.0%60.0%2023 1,110,867 116,641 58,876
2024 1,110,867 116,641 58,876
2025 1,110,867 116,641 58,876
Market:Capture increases over time, as this is an emerging location and 2026 1,110,867 116,641 56,276
an office market in the "path of growth", likely to increase over time.2027 1,013,979 111,538 56,276
Subject:Capture as a percentage of the South Bay Market is intentionally 2028 1,013,979 111,538 56,276
aggressive (40%-60%) since Millenia's concept and design 2029 1,013,979 111,538 56,276
is unique, location is excellent and is a compelling opportunity 2030 1,013,979 111,538 56,276
to capture a large share of South Bay office demand.2031 1,013,979 101,070 50,974
2032 878,870 101,070 50,974
For Perspective:2033 878,870 101,070 50,974
South Bay Market share of MSA - Costar 9.5%2034 878,870 101,070 50,974
Average Annual Deliveries in MSA (1982 - 2017) - Costar 2,180,556 2035 878,870 101,070 50,974
Average Annual Deliveries in MSA (2000 - 2017) - Costar 1,694,444 2036 878,870 101,070 50,974
Average Absorption in MSA (2008 - 2017) - Costar 1,013,095 2037 877,649 105,318 53,098
Average Absorption in MSA (2014 - 2017) - Costar 1,218,230 2038 877,649 105,318 53,098
Avg. Annual Deliveries in South Bay Market (2014 - 2017) - Costar 3,987 2039 877,649 105,318 53,098
Avg. Absorption in South Bay Market (2014 - 2017) - Costar 131,044 2040 877,649 105,318 53,098
Source: Meyers Research, CA DOT, CoStar 2041 877,649 105,318 53,098
2042 883,011 110,376 55,630
2043 883,011 110,376 55,630
AVERAGE:971,896 106,566 53,623 267,314
TOTAL:26,241,202 2,877,283 1,447,827 1,447,827
265,489
MEYERS Conservative Buildout for MILLENIA (CalTrans Projections) -
Office Size and Demand (SF) Capture Rates
Estimated Annual Capture:
SOUTH BAY (%)
Estimated Annual Capture:
MILLENIA (SUBJECT) (%)
Assumptions/ Rationale:
248,349
MEYERS Conservative Buildout for MILLENIA (CalTrans Projections) -
Office Size and Demand (SF)
291,780
276,078
254,872
111,259
February 2018 | City of Chula Vista
Millenia | San Diego County, California 31
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50Number of Employees (Thousands)Information Finance Activities Prof./ Business Services Government
CalTrans Projections for Office Based Employment Segments
The Government and Professional Business Services sectors represent the largest office-oriented employment base in San Diego County
(485,000 jobs combined).In total,jobs in office oriented fields total 582,000 jobs as of 2017 (Projected),a net increase of 58,000 jobs since 2001
(0.7%annual average increase).Going forward,CalTrans projects a net increase of 87,700 office-oriented jobs in San Diego County through
2030 (a 1.1%annual average increase).
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25
Information 35.59 34.43 33.41 32.50 32.56 31.68 31.27 31.40 28.21 25.08 24.21 24.50 24.34 24.42 23.76 23.64 23.90 23.67 23.65 23.93 24.26 24.56 24.90 25.12 25.62
Finance Activities 72.17 75.07 79.91 81.94 83.22 83.70 80.29 75.23 69.75 67.13 67.39 69.78 70.78 69.43 71.16 73.00 72.81 71.26 70.45 70.71 71.02 71.55 71.61 71.62 71.75
Prof./ Business Services 202.21 205.38 204.95 208.84 215.39 219.32 223.17 222.24 205.34 205.46 207.35 213.43 221.09 224.32 230.23 234.01 242.14 250.79 253.76 257.89 262.53 267.58 272.77 278.01 283.24
Government 213.80 219.69 217.28 214.31 215.11 217.94 222.38 225.12 224.53 230.47 228.96 227.83 229.48 231.92 236.16 242.12 243.28 244.56 246.04 247.43 249.01 250.63 252.39 253.86 256.42
% Change Information ---3.3%-3.0%-2.7%0.2%-2.7%-1.3%0.4%-10.2%-11.1%-3.5%1.2%-0.7%0.3%-2.7%-0.5%1.1%-1.0%-0.1%1.2%1.4%1.2%1.4%0.9%2.0%
% Change Finance Activities --4.0%6.4%2.5%1.6%0.6%-4.1%-6.3%-7.3%-3.8%0.4%3.5%1.4%-1.9%2.5%2.6%-0.3%-2.1%-1.1%0.4%0.4%0.7%0.1%0.0%0.2%
% Change Prof/Bus Services --1.6%-0.2%1.9%3.1%1.8%1.8%-0.4%-7.6%0.1%0.9%2.9%3.6%1.5%2.6%1.6%3.5%3.6%1.2%1.6%1.8%1.9%1.9%1.9%1.9%
% Change Government --2.8%-1.1%-1.4%0.4%1.3%2.0%1.2%-0.3%2.6%-0.7%-0.5%0.7%1.1%1.8%2.5%0.5%0.5%0.6%0.6%0.6%0.6%0.7%0.6%1.0%
'26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50
Information 26.24 26.86 27.33 27.74 28.13 28.48 29.02 29.13 29.31 29.49 29.89 30.26 30.47 30.76 31.02 31.20 31.36 31.51 31.59 31.83 32.04 32.26 32.41 32.52 32.60
Finance Activities 71.88 72.49 72.82 73.24 73.33 73.35 73.12 73.11 73.43 73.64 73.94 74.25 74.52 74.76 75.02 75.26 75.44 75.62 75.72 75.89 76.21 76.16 76.49 76.79 77.00
Prof./ Business Services 287.30 292.31 297.30 302.16 306.89 311.47 315.86 320.07 324.05 327.83 331.64 335.48 339.35 343.25 347.17 351.13 355.12 359.14 363.19 367.27 371.38 375.52 379.70 383.91 388.15
Government 258.45 259.35 260.27 260.97 261.57 262.14 262.74 263.34 263.93 264.51 265.10 265.71 266.36 267.04 267.77 268.54 269.38 270.27 271.22 272.19 273.21 274.26 275.35 276.46 277.58
% Change Information 2.4%2.4%1.8%1.5%1.4%1.2%1.9%0.4%0.6%0.6%1.4%1.2%0.7%1.0%0.8%0.6%0.5%0.5%0.3%0.7%0.7%0.7%0.5%0.3%0.2%
% Change Finance Activities 0.2%0.9%0.5%0.6%0.1%0.0%-0.3%0.0%0.4%0.3%0.4%0.4%0.4%0.3%0.3%0.3%0.2%0.2%0.1%0.2%0.4%-0.1%0.4%0.4%0.3%
% Change Prof/Bus Services 1.4%1.7%1.7%1.6%1.6%1.5%1.4%1.3%1.2%1.2%1.2%1.2%1.2%1.1%1.1%1.1%1.1%1.1%1.1%1.1%1.1%1.1%1.1%1.1%1.1%
% Change Government 0.8%0.3%0.4%0.3%0.2%0.2%0.2%0.2%0.2%0.2%0.2%0.2%0.2%0.3%0.3%0.3%0.3%0.3%0.3%0.4%0.4%0.4%0.4%0.4%0.4%
Source: CA Department of Transportation
February 2018 | City of Chula Vista
Millenia | San Diego County, California 32
0.0
20.0
40.0
60.0
80.0
100.0
120.0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50Number of Employees (Thousands)Construction Manufacturing Wholesale Trade Trans./Warehouse/Utilities
CalTrans Projections for Industrial Based Employment Segments
Manufacturing is the largest industrial oriented sector in San Diego County,though that sector has lost 10,900 jobs since 2001.CalTrans projects
the construction sector to expand the most over the next decade,with 7,000 jobs expected to be added through 2030.Wholesale Trade and
Trade/Transportation/Warehouse/Utilities has been flat since 2001 and is not projected to experience significant gains going forward.
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25
Construction 75.20 76.44 80.24 87.81 90.91 92.70 86.96 76.09 61.20 55.43 55.24 57.03 61.02 63.93 69.92 76.08 77.97 78.88 79.66 80.14 80.68 80.95 81.40 81.90 82.44
Manufacturing 119.23 112.47 105.38 104.40 104.64 104.19 102.75 103.10 97.13 95.59 96.42 98.23 99.44 102.17 106.22 107.82 108.31 109.13 109.47 109.70 109.94 110.16 110.30 110.43 110.79
Wholesale Trade 41.66 41.43 41.68 42.02 43.73 45.15 45.59 44.98 40.63 40.18 41.45 43.48 43.92 43.66 44.04 44.75 45.46 46.30 46.57 46.76 46.93 47.05 47.15 47.22 47.29
Trans./Warehouse/Utilities 30.86 28.78 27.33 28.43 28.35 28.70 28.75 28.95 27.28 26.52 26.08 27.31 27.20 27.00 28.37 29.39 29.81 30.44 30.70 30.82 30.89 30.94 31.01 31.10 31.17
% Change Construction --1.6%5.0%9.4%3.5%2.0%-6.2%-12.5%-19.6%-9.4%-0.3%3.2%7.0%4.8%9.4%8.8%2.5%1.2%1.0%0.6%0.7%0.3%0.6%0.6%0.7%
% Change Manufacturing ---5.7%-6.3%-0.9%0.2%-0.4%-1.4%0.3%-5.8%-1.6%0.9%1.9%1.2%2.7%4.0%1.5%0.5%0.8%0.3%0.2%0.2%0.2%0.1%0.1%0.3%
% Change Wholesale Trade ---0.6%0.6%0.8%4.1%3.2%1.0%-1.3%-9.7%-1.1%3.2%4.9%1.0%-0.6%0.9%1.6%1.6%1.9%0.6%0.4%0.4%0.3%0.2%0.1%0.1%
% Trans./Warehouse/Utilities ---6.7%-5.0%4.0%-0.3%1.2%0.2%0.7%-5.8%-2.8%-1.7%4.7%-0.4%-0.7%5.1%3.6%1.4%2.1%0.8%0.4%0.2%0.2%0.2%0.3%0.2%
'26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50
Construction 82.95 83.52 84.11 84.50 84.98 85.22 85.30 85.31 85.70 86.40 86.88 87.41 88.14 88.87 89.42 90.03 90.64 91.26 91.87 92.58 93.09 93.49 93.99 94.52 94.99
Manufacturing 111.13 111.29 111.45 111.63 111.79 111.96 112.13 112.30 112.46 112.64 112.81 112.98 113.15 113.32 113.49 113.67 113.84 114.02 114.19 114.37 114.54 114.72 114.90 115.08 115.26
Wholesale Trade 47.48 47.62 47.77 47.93 48.08 48.24 48.39 48.54 48.69 48.85 49.00 49.15 49.31 49.46 49.61 49.76 49.92 50.07 50.22 50.38 50.53 50.68 50.83 50.99 51.14
Trans./Warehouse/Utilities 31.25 31.34 31.43 31.52 31.58 31.61 31.74 31.83 31.86 31.94 32.03 32.15 32.24 32.30 32.36 32.42 32.44 32.53 32.62 32.68 32.70 32.73 32.76 32.79 32.82
% Change Construction 0.6%0.7%0.7%0.5%0.6%0.3%0.1%0.0%0.5%0.8%0.6%0.6%0.8%0.8%0.6%0.7%0.7%0.7%0.7%0.8%0.6%0.4%0.5%0.6%0.5%
% Change Manufacturing 0.3%0.1%0.1%0.2%0.1%0.1%0.2%0.1%0.1%0.2%0.1%0.1%0.2%0.2%0.2%0.2%0.2%0.2%0.2%0.15%0.15%0.16%0.15%0.15%0.16%
% Change Wholesale Trade 0.4%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%
% Trans./Warehouse/Utilities 0.3%0.3%0.3%0.3%0.2%0.1%0.4%0.3%0.1%0.3%0.3%0.4%0.3%0.2%0.2%0.2%0.1%0.3%0.3%0.2%0.1%0.1%0.1%0.1%0.1%
Source: CA Department of Transportation
February 2018 | City of Chula Vista
Millenia | San Diego County, California 33
Office Demand Growth From 2017 to 2022 (CalTrans Projections)
Our employment-based demand model,below,considers employment growth projections in the San Diego MSA (per CalTrans)in the near term
and current employment by industry,and translates this growth into additional supportable space by 2022,concluding that approximately 49,670
square feet of office space will be demanded annually at the Subject.
Industry
Total
Employment 1/
Occupied in
Office Buildings
2/
No. Employed
in Office
Buildings
Total
Employment 3/
Occupied in Office
Buildings
No. Employed in
Office Buildings
Total Emp.
Growth in Office
Buildings
New Office Space
Needed 4/
Traditional Office Users
Finance Activities 72,810 75%54,608 71,548 75%53,661 (947)(189,376)
Information 23,904 50%11,952 24,560 50%12,280 328 65,674
Professional/Business Services 242,143 75%181,608 267,583 75%200,687 19,080 3,815,910
Education/Health Services 201,498 25%50,375 211,362 25%52,840 2,466 493,190
Leisure/Hospitality 192,349 15%28,852 202,211 15%30,332 1,479 295,836
Other Services 55,818 20%11,164 60,250 20%12,050 887 177,302
Government 243,283 20%48,657 250,625 20%50,125 1,468 293,680
Non-Traditional Office Users
Mining 277 5%14 273 5%14 (0)(38)
Construction 77,970 5%3,898 80,952 5%4,048 149 29,827
Manufacturing 108,311 5%5,416 110,164 5%5,508 93 18,530
Wholesale Trade 45,457 5%2,273 47,051 5%2,353 80 15,941
Retail Trade 149,442 5%7,472 153,495 5%7,675 203 40,537
Transportation/Utilities 29,807 5%1,490 30,942 5%1,547 57 11,344
Total 1,443,069 24%407,778 1,511,016 24%433,119 25,342 5,068,356
Annual Average 1,013,671
Estimated Annual Capture: SOUTH BAY MARKET (%)9.5% - 10.0%
Notes:Est. Annual Office Space Absorption: SOUTH BAY MARKET (SF)96,299 - 101,367
1/ Per the CA Dept of Transportation and BLS Estimated Annual Capture: MILLENIA SITE (%) 5/40.0% - 60.0%
2/ Meyers Research Estimate Est. Annual Office Space Absorption: MILLENIA SITE (SF)38,520 - 60,820
3/ Per the CA Dept of Transportation projections Annual Average (SF):49,670
4/ Assumes 200 square feet per employee for traditional office users
and 200 square feet per employee for non-traditional office users.
5/ Reflects estimated capture rate of the South Bay capture of office inventory
2017 2022 2017 to 2022
February 2018 | City of Chula Vista
Millenia | San Diego County, California 34
Office Demand Growth From 2022 to 2027 (CalTrans Projections)
According to CalTrans data,by 2027 our employment-based demand model yields supportable space of approximately 58,876 square feet of
office space demanded annually at Improvement Area 1.Demand increases slightly versus the previous demand model due to more aggressive
capture rate estimate for the submarket in the 2022 to 2027 timeframe,as this area evolves and becomes more desirable for office users to
locate to the planned office space at Millenia.
Industry
Total
Employment 1/
Occupied in
Office Buildings
2/
No. Employed
in Office
Buildings
Total
Employment 3/
Occupied in Office
Buildings
No. Employed in
Office Buildings
Total Emp.
Growth in Office
Buildings
New Office Space
Needed 4/
Traditional Office Users
Finance Activities 71,548 75%53,661 72,493 75%54,370 709 141,794
Information 24,560 50%12,280 26,858 50%13,429 1,149 229,739
Professional/Business Services 267,583 75%200,687 292,313 75%219,234 18,547 3,709,455
Education/Health Services 211,362 25%52,840 223,449 25%55,862 3,022 604,335
Leisure/Hospitality 202,211 15%30,332 211,339 15%31,701 1,369 273,858
Other Services 60,250 20%12,050 64,508 20%12,902 851 170,290
Government 250,625 20%50,125 259,346 20%51,869 1,744 348,838
Non-Traditional Office Users
Mining 273 5%14 268 5%13 (0)(47)
Construction 80,952 5%4,048 83,524 5%4,176 129 25,711
Manufacturing 110,164 5%5,508 111,291 5%5,565 56 11,275
Wholesale Trade 47,051 5%2,353 47,623 5%2,381 29 5,716
Retail Trade 153,495 5%7,675 156,435 5%7,822 147 29,395
Transportation/Utilities 30,942 5%1,547 31,339 5%1,567 20 3,977
Total 1,511,016 24%433,119 1,580,785 24%460,891 27,772 5,554,334
Annual Average 1,110,867
Estimated Annual Capture: SOUTH BAY MARKET (%)10.0% - 11.0%
Notes:Est. Annual Office Space Absorption: SOUTH BAY MARKET (SF)111,087 - 122,195
1/ Per the CA Dept of Transportation and BLS Estimated Annual Capture: MILLENIA SITE (%) 5/40.0% - 60.0%
2/ Meyers Research Estimate Est. Annual Office Space Absorption: MILLENIA SITE (SF)44,435 - 73,317
3/ Per the CA Dept of Transportation projections Annual Average (SF):58,876
4/ Assumes 200 square feet per employee for traditional office users
and 200 square feet per employee for non-traditional office users.
5/ Reflects estimated capture rate of the South Bay capture of office inventory
2022 2027 2022 to 2027
February 2018 | City of Chula Vista
Millenia | San Diego County, California 35
Office Demand Growth From 2027 to 2032 (CalTrans Projections)
According to CalTrans data,by 2032 our employment-based demand model yields supportable space of approximately 56,276 square feet of
office space demanded annually at the Subject (Improvement Area 1).
Industry
Total
Employment 1/
Occupied in
Office Buildings
2/
No. Employed
in Office
Buildings
Total
Employment 3/
Occupied in Office
Buildings
No. Employed in
Office Buildings
Total Emp.
Growth in Office
Buildings
New Office Space
Needed 4/
Traditional Office Users
Finance Activities 72,493 75%54,370 73,120 75%54,840 470 94,035
Information 26,858 50%13,429 29,023 50%14,512 1,083 216,561
Professional/Business Services 292,313 75%219,234 315,858 75%236,894 17,659 3,531,840
Education/Health Services 223,449 25%55,862 236,319 25%59,080 3,217 643,495
Leisure/Hospitality 211,339 15%31,701 219,430 15%32,914 1,214 242,709
Other Services 64,508 20%12,902 68,124 20%13,625 723 144,670
Government 259,346 20%51,869 262,745 20%52,549 680 135,934
Non-Traditional Office Users
Mining 268 5%13 271 5%14 0 29
Construction 83,524 5%4,176 85,299 5%4,265 89 17,757
Manufacturing 111,291 5%5,565 112,130 5%5,606 42 8,383
Wholesale Trade 47,623 5%2,381 48,388 5%2,419 38 7,655
Retail Trade 156,435 5%7,822 158,722 5%7,936 114 22,869
Transportation/Utilities 31,339 5%1,567 31,735 5%1,587 20 3,957
Total 1,580,785 24%460,891 1,641,163 24%486,240 25,349 5,069,894
Annual Average 1,013,979
Estimated Annual Capture: SOUTH BAY MARKET (%)10.5% - 11.5%
Notes:Est. Annual Office Space Absorption: SOUTH BAY MARKET (SF)106,468 - 116,608
1/ Per the CA Dept of Transportation and BLS Estimated Annual Capture: MILLENIA SITE (%) 5/40.0% - 60.0%
2/ Meyers Research Estimate Est. Annual Office Space Absorption: MILLENIA SITE (SF)42,587 - 69,965
3/ Per the CA Dept of Transportation projections Annual Average (SF):56,276
4/ Assumes 200 square feet per employee for traditional office users
and 200 square feet per employee for non-traditional office users.
5/ Reflects estimated capture rate of the South Bay capture of office inventory
2027 2032 2027 to 2032
February 2018 | City of Chula Vista
Millenia | San Diego County, California 36
Office Demand Growth From 2032 to 2037 (CalTrans Projections)
According to CalTrans,by 2037 our employment-based demand model yields supportable space of approximately 50,974 square feet of office
space demanded annually at Improvement Area 1.
Industry
Total
Employment 1/
Occupied in
Office Buildings
2/
No. Employed
in Office
Buildings
Total
Employment 3/
Occupied in Office
Buildings
No. Employed in
Office Buildings
Total Emp.
Growth in Office
Buildings
New Office Space
Needed 4/
Traditional Office Users
Finance Activities 73,120 75%54,840 74,250 75%55,688 848 169,506
Information 29,023 50%14,512 30,265 50%15,132 621 124,113
Professional/Business Services 315,858 75%236,894 335,482 75%251,612 14,718 2,943,615
Education/Health Services 236,319 25%59,080 249,359 25%62,340 3,260 652,015
Leisure/Hospitality 219,430 15%32,914 226,166 15%33,925 1,011 202,104
Other Services 68,124 20%13,625 71,255 20%14,251 626 125,236
Government 262,745 20%52,549 265,712 20%53,142 593 118,695
Non-Traditional Office Users
Mining 271 5%14 274 5%14 0 29
Construction 85,299 5%4,265 87,412 5%4,371 106 21,129
Manufacturing 112,130 5%5,606 112,976 5%5,649 42 8,466
Wholesale Trade 48,388 5%2,419 49,153 5%2,458 38 7,644
Retail Trade 158,722 5%7,936 160,484 5%8,024 88 17,627
Transportation/Utilities 31,735 5%1,587 32,152 5%1,608 21 4,172
Total 1,641,163 24%486,240 1,694,941 24%508,212 21,972 4,394,351
Annual Average 878,870
Estimated Annual Capture: SOUTH BAY MARKET (%)11.0% - 12.0%
Notes:Est. Annual Office Space Absorption: SOUTH BAY MARKET (SF)96,676 - 105,464
1/ Per the CA Dept of Transportation and BLS Estimated Annual Capture: MILLENIA SITE (%) 5/40.0% - 60.0%
2/ Meyers Research Estimate Est. Annual Office Space Absorption: MILLENIA SITE (SF)38,670 - 63,279
3/ Per the CA Dept of Transportation projections Annual Average (SF):50,974
4/ Assumes 200 square feet per employee for traditional office users
and 200 square feet per employee for non-traditional office users.
5/ Reflects estimated capture rate of the South Bay capture of office inventory
2032 2037 2032 to 2037
February 2018 | City of Chula Vista
Millenia | San Diego County, California 37
Office Demand Growth From 2037 to 2042 (CalTrans Projections)
According to CalTrans,by 2042 our employment-based demand model yields supportable space of approximately 53,098 square feet of office
space demanded annually at Improvement Area 1.
Industry
Total
Employment 1/
Occupied in
Office Buildings
2/
No. Employed
in Office
Buildings
Total
Employment 3/
Occupied in Office
Buildings
No. Employed in
Office Buildings
Total Emp.
Growth in Office
Buildings
New Office Space
Needed 4/
Traditional Office Users
Finance Activities 74,250 75%55,688 75,436 75%56,577 889 177,811
Information 30,265 50%15,132 31,359 50%15,679 547 109,444
Professional/Business Services 335,482 75%251,612 355,119 75%266,339 14,728 2,945,550
Education/Health Services 249,359 25%62,340 262,625 25%65,656 3,317 663,315
Leisure/Hospitality 226,166 15%33,925 231,891 15%34,784 859 171,729
Other Services 71,255 20%14,251 74,044 20%14,809 558 111,548
Government 265,712 20%53,142 269,378 20%53,876 733 146,644
Non-Traditional Office Users
Mining 274 5%14 277 5%14 0 29
Construction 87,412 5%4,371 90,642 5%4,532 162 32,301
Manufacturing 112,976 5%5,649 113,843 5%5,692 43 8,669
Wholesale Trade 49,153 5%2,458 49,917 5%2,496 38 7,644
Retail Trade 160,484 5%8,024 161,548 5%8,077 53 10,633
Transportation/Utilities 32,152 5%1,608 32,445 5%1,622 15 2,926
Total 1,694,941 24%508,212 1,748,523 24%530,153 21,941 4,388,245
Annual Average 877,649
Estimated Annual Capture: SOUTH BAY MARKET (%)11.5% - 12.5%
Notes:Est. Annual Office Space Absorption: SOUTH BAY MARKET (SF)100,930 - 109,706
1/ Per the CA Dept of Transportation and BLS Estimated Annual Capture: MILLENIA SITE (%) 5/40.0% - 60.0%
2/ Meyers Research Estimate Est. Annual Office Space Absorption: MILLENIA SITE (SF)40,372 - 65,824
3/ Per the CA Dept of Transportation projections Annual Average (SF):53,098
4/ Assumes 200 square feet per employee for traditional office users
and 200 square feet per employee for non-traditional office users.
5/ Reflects estimated capture rate of the South Bay capture of office inventory
2037 2042 2037 to 2042
February 2018 | City of Chula Vista
Millenia | San Diego County, California 38
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50Number of Employees (Thousands)Information Finance Activities Prof./ Business Services Government
Woods & Poole Projections for Office Based Employment Segments
According to Woods &Poole,the Government and Professional Business Services sectors represent the largest office-oriented employment
base in San Diego County,with 821,000 jobs combined.In total,jobs in office oriented fields total 943,000 jobs as of 2017 (Projected),a net
increase of 138,000 jobs since 2001 (1.0%annual average increase).Going forward,Woods &Poole projects a net increase of 170,000 office-
oriented jobs through 2030 (a 1.3%annual average increase).
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25
Information 46.48 44.28 43.11 42.85 44.43 43.94 44.50 38.39 36.49 31.71 31.03 31.27 30.60 31.42 31.18 31.48 31.79 32.09 32.39 32.70 33.00 33.31 33.62 33.93 34.24
Finance Activities 72.38 74.26 77.72 79.17 80.28 80.89 82.96 83.35 87.51 83.14 88.75 90.11 90.68 87.26 87.03 88.67 90.29 91.88 93.43 94.95 96.43 97.87 99.26 100.60 101.90
Prof./ Business Services 361.63 373.54 385.53 397.77 407.91 417.45 427.62 432.69 412.76 419.07 425.54 431.46 444.49 456.96 466.74 472.94 479.57 486.59 493.92 501.52 509.36 517.40 525.59 533.93 542.41
Government 324.86 338.56 343.84 339.20 335.27 335.22 337.32 343.97 344.35 338.50 333.76 330.39 330.89 331.60 335.31 338.81 342.30 345.77 349.23 352.66 356.07 359.44 362.77 366.05 369.30
% Change Information ---4.7%-2.6%-0.6%3.7%-1.1%1.3%-13.7%-5.0%-13.1%-2.1%0.8%-2.2%2.7%-0.8%1.0%1.0%1.0%1.0%0.9%0.9%0.9%0.9%0.9%0.9%
% Change Finance Activities --2.6%4.7%1.9%1.4%0.8%2.6%0.5%5.0%-5.0%6.8%1.5%0.6%-3.8%-0.3%1.9%1.8%1.8%1.7%1.6%1.6%1.5%1.4%1.4%1.3%
% Change Prof/Bus Services --3.3%3.2%3.2%2.5%2.3%2.4%1.2%-4.6%1.5%1.5%1.4%3.0%2.8%2.1%1.3%1.4%1.5%1.5%1.5%1.6%1.6%1.6%1.6%1.6%
% Change Government --4.2%1.6%-1.3%-1.2%0.0%0.6%2.0%0.1%-1.7%-1.4%-1.0%0.2%0.2%1.1%1.0%1.0%1.0%1.0%1.0%1.0%0.9%0.9%0.9%0.9%
'26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50
Information 34.55 34.86 35.18 35.49 35.81 36.13 36.44 36.76 37.09 37.41 37.73 38.06 38.39 38.72 39.05 39.38 39.72 40.05 40.39 40.73 41.07 41.42 41.76 42.11 42.46
Finance Activities 103.14 104.34 105.49 106.59 107.65 108.66 109.63 110.55 111.43 112.26 113.05 113.80 114.52 115.21 115.87 116.51 117.12 117.72 118.30 118.86 119.42 119.96 120.48 121.00 121.51
Prof./ Business Services 550.98 559.64 568.37 577.15 585.97 594.81 603.65 612.50 621.33 630.13 638.90 647.60 656.23 664.77 673.25 681.56 689.71 697.76 705.72 713.59 721.37 729.05 736.69 744.27 751.79
Government 372.50 375.66 378.78 381.85 384.88 387.86 390.79 393.68 396.52 399.31 402.05 404.75 407.42 410.05 412.64 415.21 417.76 420.28 422.79 425.28 427.75 430.20 432.65 435.08 437.50
% Change Information 0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.9%0.8%0.8%0.8%0.8%0.8%0.8%0.8%0.8%
% Change Finance Activities 1.2%1.2%1.1%1.0%1.0%0.9%0.9%0.8%0.8%0.7%0.7%0.7%0.6%0.6%0.6%0.5%0.5%0.5%0.5%0.5%0.5%0.5%0.4%0.4%0.4%
% Change Prof/Bus Services 1.6%1.6%1.6%1.5%1.5%1.5%1.5%1.5%1.4%1.4%1.4%1.4%1.3%1.3%1.3%1.2%1.2%1.2%1.1%1.1%1.1%1.1%1.0%1.0%1.0%
% Change Government 0.9%0.8%0.8%0.8%0.8%0.8%0.8%0.7%0.7%0.7%0.7%0.7%0.7%0.6%0.6%0.6%0.6%0.6%0.6%0.6%0.6%0.6%0.6%0.6%0.6%
Source: Woods & Poole
February 2018 | City of Chula Vista
Millenia | San Diego County, California 39
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50Number of Employees (Thousands)Construction Manufacturing Wholesale Trade Trans./Warehouse/Utilities
Woods & Poole Projections for Industrial Based Employment Segments
Manufacturing is the largest industrial oriented sector in San Diego,though that sector has lost 11,600 jobs since 2001.Woods &Poole projects
the construction sector to expand the most over the next decade,with 22,300 additional jobs expected through 2030.Wholesale Trade and
Trade/Transportation/Warehouse/Utilities are expected to have more modest gains going forward.
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25
Construction 99.72 100.50 105.09 115.36 120.64 121.98 116.93 104.93 89.03 81.29 81.02 83.44 88.20 91.35 97.83 100.39 102.70 104.73 106.70 108.64 110.59 112.56 114.50 116.32 118.02
Manufacturing 128.28 121.47 114.18 112.55 112.25 110.69 111.06 110.36 104.34 100.84 101.40 102.37 104.45 106.43 114.72 115.74 116.59 117.26 117.82 118.30 118.73 119.10 119.42 119.71 119.96
Wholesale Trade 47.47 48.88 49.42 51.08 53.33 55.54 55.30 56.07 51.81 50.57 53.26 55.87 56.99 57.83 60.43 61.58 62.62 63.55 64.41 65.23 66.05 66.86 67.67 68.48 69.30
Trans./Warehouse/Utilities 35.21 35.21 35.19 36.70 37.30 36.91 38.75 38.89 37.22 37.25 36.62 38.66 39.05 42.52 45.27 44.67 44.39 44.34 44.46 44.71 45.04 45.43 45.87 46.33 46.82
% Change Construction --0.8%4.6%9.8%4.6%1.1%-4.1%-10.3%-15.2%-8.7%-0.3%3.0%5.7%3.6%7.1%2.6%2.3%2.0%1.9%1.8%1.8%1.8%1.7%1.6%1.5%
% Change Manufacturing ---5.3%-6.0%-1.4%-0.3%-1.4%0.3%-0.6%-5.5%-3.4%0.6%1.0%2.0%1.9%7.8%0.9%0.7%0.6%0.5%0.4%0.4%0.3%0.3%0.2%0.2%
% Change Wholesale Trade --3.0%1.1%3.4%4.4%4.1%-0.4%1.4%-7.6%-2.4%5.3%4.9%2.0%1.5%4.5%1.9%1.7%1.5%1.3%1.3%1.2%1.2%1.2%1.2%1.2%
% Trans./Warehouse/Utilities --0.0%-0.1%4.3%1.6%-1.1%5.0%0.4%-4.3%0.1%-1.7%5.6%1.0%8.9%6.5%-1.3%-0.6%-0.1%0.3%0.5%0.7%0.9%1.0%1.0%1.1%
'26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50
Construction 119.63 121.11 122.50 123.81 125.06 126.26 127.40 128.51 129.57 130.60 131.62 132.63 133.65 134.69 135.76 136.85 137.97 139.13 140.32 141.54 142.79 144.05 145.34 146.66 148.01
Manufacturing 120.18 120.37 120.55 120.70 120.84 120.96 121.07 121.16 121.25 121.32 121.39 121.44 121.49 121.53 121.56 121.58 121.60 121.61 121.61 121.61 121.60 121.59 121.57 121.55 121.52
Wholesale Trade 70.11 70.92 71.73 72.54 73.35 74.16 74.95 75.73 76.50 77.26 78.01 78.74 79.46 80.17 80.87 81.56 82.23 82.90 83.56 84.22 84.87 85.51 86.15 86.78 87.42
Trans./Warehouse/Utilities 47.33 47.85 48.37 48.90 49.43 49.95 50.48 50.99 51.50 52.00 52.50 52.98 53.46 53.93 54.39 54.84 55.29 55.73 56.16 56.59 57.01 57.43 57.85 58.26 58.66
% Change Construction 1.4%1.2%1.1%1.1%1.0%1.0%0.9%0.9%0.8%0.8%0.8%0.8%0.8%0.8%0.8%0.8%0.8%0.8%0.9%0.9%0.9%0.9%0.9%0.9%0.9%
% Change Manufacturing 0.2%0.2%0.1%0.1%0.1%0.1%0.1%0.1%0.1%0.1%0.1%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.00%-0.01%-0.01%-0.01%-0.02%-0.02%
% Change Wholesale Trade 1.2%1.2%1.1%1.1%1.1%1.1%1.1%1.0%1.0%1.0%1.0%0.9%0.9%0.9%0.9%0.9%0.8%0.8%0.8%0.8%0.8%0.8%0.7%0.7%0.7%
% Trans./Warehouse/Utilities 1.1%1.1%1.1%1.1%1.1%1.1%1.0%1.0%1.0%1.0%0.9%0.9%0.9%0.9%0.9%0.8%0.8%0.8%0.8%0.8%0.7%0.7%0.7%0.7%0.7%
Source: Woods & Poole
February 2018 | City of Chula Vista
Millenia | San Diego County, California 40
Office Demand Growth From 2017 to 2022 (Woods & Poole Projections)
Our employment-based demand model,below,considers employment growth projections in the San Diego MSA (per Woods &Poole)in the near
term and current employment by industry,and translates this growth into additional supportable space by 2022,concluding that approximately
104,724 square feet of office space will be demanded annually at the Subject.
Industry
Total
Employment 1/
Occupied in
Office Buildings
2/
No. Employed
in Office
Buildings
Total
Employment 3/
Occupied in Office
Buildings
No. Employed in
Office Buildings
Total Emp.
Growth in Office
Buildings
New Office Space
Needed 4/
Traditional Office Users
Finance Activities 90,287 75%67,715 97,866 75%73,400 5,684 1,136,850
Information 31,785 50%15,893 33,311 50%16,656 763 152,600
Professional/Business Services 479,574 75%359,681 517,396 75%388,047 28,367 5,673,300
Education/Health Services 252,870 25%63,218 287,702 25%71,926 8,708 1,741,600
Leisure/Hospitality 226,927 15%34,039 245,366 15%36,805 2,766 553,170
Other Services 126,851 20%25,370 136,803 20%27,361 1,990 398,080
Government 342,298 20%68,460 359,435 20%71,887 3,427 685,480
Non-Traditional Office Users
Mining 6,703 5%335 7,222 5%361 26 5,190
Construction 102,699 5%5,135 112,557 5%5,628 493 98,580
Manufacturing 116,588 5%5,829 119,097 5%5,955 125 25,090
Wholesale Trade 62,619 5%3,131 66,860 5%3,343 212 42,410
Retail Trade 192,517 5%9,626 208,852 5%10,443 817 163,350
Transportation/Utilities 44,386 5%2,219 45,429 5%2,271 52 10,430
Total 2,076,104 24%660,650 2,237,896 24%714,081 53,431 10,686,130
Annual Average 2,137,226
Estimated Annual Capture: SOUTH BAY MARKET (%)9.5% - 10.0%
Notes:Est. Annual Office Space Absorption: SOUTH BAY MARKET (SF)203,036 - 213,723
1/ Per Woods and Poole Economics, Inc.Estimated Annual Capture: MILLENIA SITE (%) 5/40.0% - 60.0%
2/ Meyers Research Estimate Est. Annual Office Space Absorption: MILLENIA SITE (SF)81,215 - 128,234
3/ Per Woods and Poole Economics, Inc.Annual Average (SF):104,724
4/ Assumes 200 square feet per employee for traditional office users
and 200 square feet per employee for non-traditional office users.
5/ Reflects estimated capture rate of the South Bay capture of office inventory
2017 2022 2017 to 2022
February 2018 | City of Chula Vista
Millenia | San Diego County, California 41
Office Demand Growth From 2022 to 2027 (Woods & Poole Projections)
According to Woods &Poole,by 2027 our employment-based demand model yields supportable space of approximately 121,575 square feet of
office space demanded annually at the Subject.Demand increases slightly versus the previous demand model due to more aggressive capture
rate estimate for the submarket in the 2022 to 2027 timeframe,as this area evolves and becomes more desirable for office users to locate here.
Industry
Total
Employment 1/
Occupied in
Office Buildings
2/
No. Employed
in Office
Buildings
Total
Employment 3/
Occupied in Office
Buildings
No. Employed in
Office Buildings
Total Emp.
Growth in Office
Buildings
New Office Space
Needed 4/
Traditional Office Users
Finance Activities 97,866 75%73,400 104,339 75%78,254 4,855 970,950
Information 33,311 50%16,656 34,862 50%17,431 776 155,100
Professional/Business Services 517,396 75%388,047 559,640 75%419,730 31,683 6,336,600
Education/Health Services 287,702 25%71,926 327,134 25%81,784 9,858 1,971,600
Leisure/Hospitality 245,366 15%36,805 266,435 15%39,965 3,160 632,070
Other Services 136,803 20%27,361 147,618 20%29,524 2,163 432,600
Government 359,435 20%71,887 375,663 20%75,133 3,246 649,120
Non-Traditional Office Users
Mining 7,222 5%361 7,774 5%389 28 5,520
Construction 112,557 5%5,628 121,108 5%6,055 428 85,510
Manufacturing 119,097 5%5,955 120,373 5%6,019 64 12,760
Wholesale Trade 66,860 5%3,343 70,920 5%3,546 203 40,600
Retail Trade 208,852 5%10,443 224,121 5%11,206 763 152,690
Transportation/Utilities 45,429 5%2,271 47,847 5%2,392 121 24,180
Total 2,237,896 24%714,081 2,407,834 24%771,427 57,347 11,469,300
Annual Average 2,293,860
Estimated Annual Capture: SOUTH BAY MARKET (%)10.0% - 11.0%
Notes:Est. Annual Office Space Absorption: SOUTH BAY MARKET (SF)229,386 - 252,325
1/ Per Woods and Poole Economics, Inc.Estimated Annual Capture: MILLENIA SITE (%) 5/40.0% - 60.0%
2/ Meyers Research Estimate Est. Annual Office Space Absorption: MILLENIA SITE (SF)91,754 - 151,395
3/ Per Woods and Poole Economics, Inc.Annual Average (SF):121,575
4/ Assumes 200 square feet per employee for traditional office users
and 200 square feet per employee for non-traditional office users.
5/ Reflects estimated capture rate of the South Bay capture of office inventory
2022 2027 2022 to 2027
February 2018 | City of Chula Vista
Millenia | San Diego County, California 42
Office Demand Growth From 2027 to 2032 (Woods & Poole Projections)
According to Woods &Poole,by 2032 our employment-based demand model yields supportable space of approximately 130,313 square feet of
office space demanded annually at the Subject.
Industry
Total
Employment 1/
Occupied in
Office Buildings
2/
No. Employed
in Office
Buildings
Total
Employment 3/
Occupied in Office
Buildings
No. Employed in
Office Buildings
Total Emp.
Growth in Office
Buildings
New Office Space
Needed 4/
Traditional Office Users
Finance Activities 104,339 75%78,254 109,629 75%82,222 3,968 793,500
Information 34,862 50%17,431 36,443 50%18,222 791 158,100
Professional/Business Services 559,640 75%419,730 603,653 75%452,740 33,010 6,601,950
Education/Health Services 327,134 25%81,784 370,456 25%92,614 10,831 2,166,100
Leisure/Hospitality 266,435 15%39,965 287,985 15%43,198 3,233 646,500
Other Services 147,618 20%29,524 159,236 20%31,847 2,324 464,720
Government 375,663 20%75,133 390,794 20%78,159 3,026 605,240
Non-Traditional Office Users
Mining 7,774 5%389 8,355 5%418 29 5,810
Construction 121,108 5%6,055 127,404 5%6,370 315 62,960
Manufacturing 120,373 5%6,019 121,067 5%6,053 35 6,940
Wholesale Trade 70,920 5%3,546 74,949 5%3,747 201 40,290
Retail Trade 224,121 5%11,206 240,276 5%12,014 808 161,550
Transportation/Utilities 47,847 5%2,392 50,475 5%2,524 131 26,280
Total 2,407,834 24%771,427 2,580,722 24%830,127 58,700 11,739,940
Annual Average 2,347,988
Estimated Annual Capture: SOUTH BAY MARKET (%)10.5% - 11.5%
Notes:Est. Annual Office Space Absorption: SOUTH BAY MARKET (SF)246,539 - 270,019
1/ Per Woods and Poole Economics, Inc.Estimated Annual Capture: MILLENIA SITE (%) 5/40.0% - 60.0%
2/ Meyers Research Estimate Est. Annual Office Space Absorption: MILLENIA SITE (SF)98,615 - 162,011
3/ Per Woods and Poole Economics, Inc.Annual Average (SF):130,313
4/ Assumes 200 square feet per employee for traditional office users
and 200 square feet per employee for non-traditional office users.
5/ Reflects estimated capture rate of the South Bay capture of office inventory
2027 2032 2027 to 2032
February 2018 | City of Chula Vista
Millenia | San Diego County, California 43
Office Building & Land Valuation
Millenia Office and Residential Analysis, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia | San Diego County, California 44
Commercial Land Sales Transactions Average $20.08/ SF
The table below details relevant commercial land transactions in Chula Vista,National City and select land sales in the city of San Diego over the
past three years.The land in Chula Vista has traded at an average of $21.42 per square foot,with the highest price land among these
comparables is a small infill site in Chula Vista,which traded at $76.52 per square foot.It is important to note that there is an inverse relationship
between land size and price per square foot—the previously mentioned infill site that commanded the highest price per square foot is only 1.26
acres,while two of the largest sites commended the lowest price per square foot (Ocean View Hills Pkwy and an 8th Street site).The Ocean
View Hills Site is (#12 below)is particularly relevant since it is a large commercial parcel that is 5 miles from the site,however it is worth noting
that 1)the Millenia location is superior;2)the Ocean View Hills Pkwy site is larger,thus commanding a lower $/SF value;and 3)that Millenia
parcels are improved land (finished pads),this commanding a higher value than raw land.
No.City Zip Code Address Property Type Notes Lot SF Lot Acreage Sale Price $ / SF Sale Date
1 Chula Vista 91910 371 H St Commercial Acreage Infill Development Site 54,886 1.26 $4,200,000 $76.52 12/13/2016
2 San Diego 92120 Mission Gorge Rd Commercial Acreage Hanover - Mission Gorge Multifamily site 449,539 10 $25,500,000 $56.72 02/08/2016
3 Chula Vista 91914 2380 Fenton Street Commercial Acreage Self Storage Development Site 67,518 2 $1,800,030 $26.66 4/1/2015
4 Chula Vista 91911 3875 Main St Commercial (Nec)LaTerra Select Stone Creek Apartment site 178,596 4.1 $4,626,000 $25.90 01/13/2016
5 Chula Vista 91914 Fenton / Harold Place Commercial Acreage Hotel Development Site 169,013 4 $3,405,608 $20.15 5/1/2015
6 National City 91950 1640 E Plaza Blvd Commercial (Nec)Former Days Inn - Development Site 46,609 1.07 $870,000 $18.67 06/06/2017
7 Chula Vista 91911 116 7th St Commercial (Nec)Large Infill Site near automotive uses 327,571 7.52 $3,000,000 $9.16 08/09/2017
8 National City 91950 1121 National City Blvd Commercial Acreage Infill Dev. Site - Downtown National City 435,600 10 $3,500,000 $8.03 08/05/2015
9 Chula Vista 91911 1880 Auto Park Pl Commercial (Nec)Development Site near auto dealerships 94,525 2.17 $610,000 $6.45 02/28/2017
10 Chula Vista 91911 1864 Auto Park Pl Commercial (Nec)Development Site near auto dealerships 54,014 1.24 $220,000 $4.07 03/11/2016
11 Chula Vista 91911 1860 Auto Park Pl Commercial Acreage Development Site near auto dealerships 102,366 2.35 $250,000 $2.44 11/12/2015
12 San Diego 92154 Ocean View Hills Pkwy Commercial Acreage Large new development site 683,021 15.68 $3,500,000 $5.12 04/03/2017
13 National City 91950 8th St Commercial Acreage Infill site in National City 871,200 20 $1,040,000 $1.19 01/25/2016
Source: Meyers Research, ListSource (CoreLogic), CoStar
Commercial Land Transactions Over 1 Acre - San Diego & South Bay 2015-2017
February 2018 | City of Chula Vista
Millenia | San Diego County, California 45
Commercial Land Asking Prices are $30.00/ SF
There are two key locations with commercial land for sale in Chula Vista:The District at Eastlake,a business park that can accommodate a
number of commercial uses (office,hotel,flex,medical,technology,manufacturing,showroom retail)and Auto Park Place,which are parcels
dedicated to auto dealership uses.Both of these locations have asking prices for finished commercial lots of $30.00 per square foot.See the
following page for aerial images of these properties.
No.City Zip Code Address Property Type Notes Lot SF Lot Acreage Asking Price $ / SF
1 Chula Vista 91914 Fenton Street, Lot 13A Commercial Acreage The District at Eastlake, finished commercial lots 148,104 3.40 $4,443,120 $30.00
2 Chula Vista 91914 Fenton Street, Lot 13B Commercial Acreage The District at Eastlake, finished commercial lots 252,648 5.80 $7,579,440 $30.00
3 Chula Vista 91914 Showroom Place, Lot 5 Commercial Acreage The District at Eastlake, finished commercial lots 121,968 2.80 $3,659,040 $30.00
4 Chula Vista 91914 Showroom Place, Lot 7 Commercial Acreage The District at Eastlake, finished commercial lots 243,936 5.60 $7,318,080 $30.00
5 Chula Vista 91914 Showroom Place, Lot 8 Commercial Acreage The District at Eastlake, finished commercial lots 213,444 4.90 $6,403,320 $30.00
6 Chula Vista 91911 1875 Auto Park Pl Commercial Acreage Development Site near auto dealerships 239,580 5.50 $7,187,400 $30.00
Source: Meyers Research, Loopnet, Colliers
Commercial Land For Sale - Chula Vista
February 2018 | City of Chula Vista
Millenia | San Diego County, California 46
Key Commercial Land Sales/ Listings –Aerial Images
1875 Auto Park Place
5.5 Acres for Sale, $30.00/ SF
Ocean View Hills Parkway
15.68 acres sold for $3.5 million
($5.12/ SF)
The District at Eastlake
3.8 –5.6 Acres for Sale, $30.00/ SF
1.55 acres sold for $26.66/ SF (Self Storage)
3.88 acres sold for $20.15/ SF (Hotel)
1880 Auto Park Place
2.17 Acres Sold for $6.45/ SF
1864 Auto Park Place
1.24 Acres Sold for $4.07/ SF
1860 Auto Park Place
2.35 Acres Sold for $2.44/ SF
February 2018 | City of Chula Vista
Millenia | San Diego County, California 47
Fully Occupied Office Uses at Millenia Valued at $709-$712 Million
Based on our research,including market trends,sales comparables,commercial buildings for lease and conservations with broker
representatives,we conclude that the development Class A office buildings at Millenia could command a value of approximately $712.9 million
($503 per square foot)based on a net operating income and cap rate approach,and $709 million ($500 per square foot)based on a comparable
sales transactions (comps)approach.See the following
Type Square Feet
Estimated Monthly
Lease Rate Per SF
(NNN)*
Estimated Annual
Lease Rate Per SF
(NNN)*
Annual Lease
Revenue
Minus
Stabilized
Vacancy Rate
Minus Marketing,
Commissions,
Legal, Etc.
Minus Property
Taxes (Office Bldg.)
Vacancy and
Credit Loss
Total Estimated
Annual Revenues
Cap Rate
(%)Total Value $/ SF
Think Campus 318,000 $2.72 $32.59 $10,363,059 -10.0%-12.0%($250,000)($2,279,873)$7,833,186 5.00%$156,663,718 $493
Invent Campus 700,000 $2.75 $33.00 $23,100,000 -10.0%-12.0%($250,000)($5,082,000)$17,768,000 5.00%$355,360,000 $508
Discover Campus 400,000 $2.75 $33.00 $13,200,000 -10.0%-12.0%($250,000)($2,904,000)$10,046,000 5.00%$200,920,000 $502
TOTAL 1,418,000 $2.74 $32.91 $46,663,059 -10.0%-12.0%($750,000)($10,265,873)$35,647,186 --$712,943,718 $503
*Assumes all real estate property taxes, insurance, management fees (on or off-site), repairs and maintenance, and utilities are paid by tenant under a Triple Net lease.
Net Operating Income/ Cap Rate Valuation Approach
Type Square Feet
Price Per
Square Foot Total Value
Think Campus 318,000 $500.00 $159,000,000
Invent Campus 700,000 $500.00 $350,000,000
Discover Campus 400,000 $500.00 $200,000,000
TOTAL 1,418,000 $500.00 $709,000,000
Sales Transaction Valuation Approach
February 2018 | City of Chula Vista
Millenia | San Diego County, California 48
Office Sales Transactions Average $314/ SF Locally, $377/ SF in MSA
The tables below detail relevant office building transactions in Chula Vista and the greater San Diego MSA over the past two to three years.The
buildings in Chula Vista have traded at an average of $314 per square foot,while the highest priced/largest office building transactions in San
Diego County averaged $377 per square foot with published cap rates ranging from 4.3%to 8.8%.There is evidence of a premium for newer
construction buildings:the newest office buildings that sold in San Diego County sold for $563-$683 per square foot.Doctor’s Park at East Lake
(959 Lane Ave)was built in 2008 and sold for $500 per square foot.Although this is a medical office building with significant improvements
included in the sale,the fact that Millenia will be new construction with LEED certification and amenities offsets the medical uses at Doctor’s Park.
No.County City Name Address Buyer Year Built Square Feet Lot Acreage Sale Price $/ SF Sale Date
1 San Diego Chula Vista Doctors Park at East Lake 959 Lane Ave CNL Healthcare Properties (Orlando)2008 10,000 5.32 $5,000,000 $500 6/30/2015
2 San Diego Chula Vista Doctors Park at East Lake 971 Lane Ave CNL Healthcare Properties (Orlando)2006 21,500 5.32 $10,000,000 $465 6/30/2015
3 San Diego Chula Vista Park Ridge Prof. Ctr.1415 Ridgeback Rd Mohammad Iqbal 1982 13,280 1.06 $4,675,000 $352 4/16/2015
4 San Diego Chula Vista US Border Patrol Bldg.2411 Boswell Rd EGP CBP (Washington DC)1999 60,328 4.46 $15,426,000 $256 2/12/2015
5 San Diego Chula Vista Eastlake Professional Plaza 2060 Otay Lakes Rd Otay Lakes Prof. Plaza LLC (SD)2005 36,000 2.08 $5,800,000 $161 6/20/2016
6 San Diego Chula Vista Bonita View Office Plaza 690 Otay Lakes Rd DWC ERI Bonita View LLC (SD)1979 30,284 2.45 $4,500,000 $149 10/21/2015
Average:1997 28,565 3.45 $7,566,833 $314
Source: Meyers Research, Loopnet, REIS, San Diego Business Journal
Office Property Transactions - Chula Vista, CA 2015-2017
No.County Submarket Address Name Buyer Year Built Square Feet Sale Price $/ SF Sale Date Cap Rate
1 San Diego Del Mar Hts 12680 High Bluff Dr 12680 High Bluff Dr The Irvine Company 2014 126,560 $86,500,000 $683 9/14/2017
2 San Diego Downtown 350 Tenth Ave DiamondView East Village DivcoWest 2007 313,103 $207,000,000 $661 9/1/2017
3 San Diego La Jolla 3366-3377 N Torrey Pines Cour Torrey Pines Court The Regents of UC San Diego 1977 216,476 $134,150,000 $620 5/18/2016 4.9%
4 San Diego Carmel Valley 7545 Torrey Santa Fe Rd Intuit Campus Intuit, Inc.2007 465,812 $262,252,500 $563 1/21/2016
5 San Diego UTC 4520 Executive Dr 4520 Executive Dr Anchor Health Properties 1988 201,905 $97,000,000 $480 8/22/2017 5.2%
6 San Diego Downtown Manchester Financial CentreManchester Financial Centre Manchester Financial Group 1965 161,430 $71,500,000 $443 11/4/2016
7 San Diego Downtown 9360-9390 Towne Centre Dr 9360-9390 Towne Centre Dr Biomed Realty Trust 1989 144,311 $55,000,000 $381 4/4/2016 8.0%
8 San Diego UTC 6256 Greenwich Dr 6256 Greenwich Dr The Regents of UC San Diego 1990 260,421 $83,560,000 $321 1/13/2017 5.7%
9 San Diego Downtown 610 Ash Street 610 Ash Street Gemini Rosemont 1986 177,489 $55,000,000 $310 4/12/2016
10 San Diego Downtown 600 B Street 600 B Street Rockwood Capital LLC 1974 359,278 $109,500,000 $305 8/30/2017 5.6%
11 San Diego Downtown 525 B St Procopio Tower LaSalle Invetment Mgmt 1969 447,159 $122,200,000 $273 3/17/2016 5.5%
12 San Diego Downtown 402 W Broadway Emerald Plaza PCCP LLC 1990 364,160 $91,670,000 $252 12/19/2016 4.3%
13 San Diego Downtown 530 B St Five Thirty B Swift RE Partners 1966 232,936 $57,700,000 $248 8/24/2017
14 San Diego Mission Valley 591 Camino de La Reina 591 Camino de La Reina The Casey Brown Company 1972 268,453 $63,125,000 $235 1/31/2017 7.0%
15 San Diego Downtown 101 Ash Street 101 Ash Street Cisterra Partners LLC 1968 314,545 $72,440,000 $230 1/3/2017 8.8%
16 San Diego Downtown 530 B St Five Thirty B Bosa Development Corp.1966 232,936 $53,200,000 $228 2/29/2016 4.5%
17 San Diego UTC 1010 2nd Ave The Executive Complex Hammer Ventures 1963 324,341 $54,400,000 $168 6/15/2016
Average:1982 271,254 $98,599,853 $377 6.0%
Source: Meyers Research, CoStar, REIS
Top Office Property Transactions - San Diego MSA 2016-2017
February 2018 | City of Chula Vista
Millenia | San Diego County, California 49
San Diego County Hospital and Outpatient Facility Valuation
There have been several hospital and medical outpatient expansions since 2008.Average price per square foot for hospitals is $1,343,while
outpatient facilities average $723 per square foot.Property taxes are not levied on Palomar and Tri-City,as these are State charter hospitals.
No.Property Name / Address # Rooms Sq. Ft.Healthcare Provider Year Built Property Tax Tax Rate Acreage Land Improvements
Development Cost PP Room Price/ SF Sale Date/Price Price/Acre
1 Escondido Palomar Medical Center 360 740,000 Palomar Health 2012 52.0 35,000,000 89,900,000 934,000,000 $2,594,444 $1,262 $673,077
Escondido
2 Kaiser Permanente Medical Center 450 617,000 Kaiser 2016 7,144,615 1.17%0.71%19.4 115,811,651 550,730,000 1,000,000,000 $2,222,222 $1,621 12/30/2013 $2,956,940
Kearny Mesa $57,305,500
3 Scripps Encinitas Critical Care 63 61,643 Scripps 2014 250,915 1.05%0.27%3.1 2,387,902 94,000,000 $1,492,063 $1,525 $770,291
Encinitas
4 Scripps Health Radiation Center 215 41,000 Scripps 2012 8.0 43,900,000 $204,186 $1,071
La Jolla
2176 Salk Ave
5 Sharp Chula Vista 138 197,000 Sharp 2017 1.12%0.8 244,000,000 $1,768,116 $1,239
Chula Vista
245 331,329 2014 AVERAGE PRICE PER HOSPITAL BED $1,656,206 $1,343 $1,466,769
6 Scripps Clinic Rancho Bernardo 146,000 2008 763,188 1.11%1.11%3.1 6,500,000 62,500,000 69,000,000 $473 $2,124,183
Rancho Bernardo
15004 Innovation Drive
7 Scripps Coastal Medical Center 40,400 Scripps 2008 123,147 1.06%1.06%3.5 1,513,440 10,103,731 11,617,171 $288 $436,150
Carlsbad
2176 Salk Ave
8 John R Anderson V Medical Pavilion 175,000 Scripps 2016 3.0 130,000,000 $743
La Jolla
9 Ramona Ambulatory Care 7,600 Palomar Health 2013 3.0 4,500,000 $592
Ramona
10 Kaiser Permanente Medical Office 71,200 2012 695,647 1.12%1.09%28.2 14,190,315 76,389,294 64,000,000 $899 $502,846
San Marcos
400 Craven Drive
Kaiser
% of Cost
Scripps
Min 63 40,400 2008 0 4,500,000 204,186 287.55 0
Max 450 740,000 2017 0 1,000,000,000 2,594,444 1,620.75 0
Average 245 225,071 2013 0 259,501,717 1,656,206 971.11 0
February 2018 | City of Chula Vista
Millenia | San Diego County, California 50
Recent Office Leases Include Education and Medical Users
Source: CoStar
The table to the right details the top office leases in San Diego
County during 2017.It is worth noting that despite this list
being the top 40 largest leases,roughly half of these leases
are for under 25,000 square feet and only six leases are for
50,000 square feet or more.The larger leases (over 40,000
square feet)are generally medical or education related—
Takeda Pharmaceuticals,Brightwood College,Palomar Health
and California Institute of Technology are among the top
leases in terms of size.The limited number of large spaces that
have been leased recently are a function of a number of
factors,including 1)tenants desire to be cost efficient and
lease the smallest spaces possible and 2)a lack of large,
quality space available in central locations—currently there are
only a few spaces for lease over 30,000 square feet in Central
San Diego and the South Bay.Given the challenges of large
scale office development in central locations of San Diego
(long entitlement timeframes,rising construction costs and lack
of large office development sites),areas such as Chula Vista
and Millenia in particular that can accommodate larger users
are well positioned for office growth and development in the
years to come.
February 2018 | City of Chula Vista
Millenia | San Diego County, California 51
Projected Office Lease Rates by Suite Size
Subject Property Name Tenant
Location Size Base Annual Est. Avg.Average Monthly Improvement
Product Details Lease Summary Mix SF Rent $/SF Premium Rent $/SF Direct Indirect Total Allowance
Millenia Think Campus (SUBJECT) Office Space 4 9,375 $309,375 $33.00 $0 $309,375 $33.00 $0 $0 $0 $60.00 - $65.00
Chula Vista, CA 4 9,400 $310,200 $33.00 $0 $310,200 $33.00 $0 $0 $0 $60.00 - $65.00
Product:Class A Total Est. SF:318,400 1 18,000 $468,000 $26.00 $0 $468,000 $26.00 $0 $0 $0 $60.00 - $65.00
Building Stories:4 Stories Year Built 2020+2 18,750 $618,750 $33.00 $0 $618,750 $33.00 $0 $0 $0 $60.00 - $65.00
Parking (Included):Structured Occupancy %:90.0%2 18,800 $620,400 $33.00 $0 $620,400 $33.00 $0 $0 $0 $60.00 - $65.00
Terms:NNN 2 37,500 $1,237,500 $33.00 $0 $1,237,500 $33.00 $0 $0 $0 $60.00 - $65.00
Op Ex./ SF:$8.00 2 37,600 $1,240,800 $33.00 $0 $1,240,800 $33.00 $0 $0 $0 $60.00 - $65.00
17 18,729 $618,071 $32.59 $0 $618,071 $32.59 $0 $0 $0 $60.00 - $65.00
Rent Concessions
RECOMMENDATIONSCOMMUNITY SPECIFICS
Summary Statistics:
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000Net Base PriceUnit Size (Square Feet)
Millenia Think Campus (SUBJECT) Office Space
Source: Meyers LLC
The projected lease rates for Think Campus office space at Millenia is $33.00 per square foot per year,or $2.75 per square foot per month
(NNN).An 18,000 square foot partial basement space is discounted at +/-$26.00 per square foot per year.The number of suites and suite sizes
shown here are for lease rate positioning purposes only and are subject to change based on the needs of prospective tenants.It may be
possible that a single tenant leases up most or all of a building within the Think Campus—we do not suggest that a discounted lease rate is
necessary for larger space,given the lack of supply of new,large contiguous office spaces available in the San Diego MSA.
February 2018 | City of Chula Vista
Millenia | San Diego County, California 52
Competitive Office Space For Lease Is Typically In the $28.00-$30.00/ SF/ Yr. Range
Our suggested lease rates are near the top of the local market given an expected premium for new construction,quality design and amenities
associated with Millenia,but well below average rents in other San Diego County office markets which are typically in the $36.00 and up to
$54.00 per square foot range annually ($3.00 to $4.50 per square foot per month).A lease rate of $2.75 per square foot per month ($33.00 per
year)at Millenia represents an excellent value for tenants and will help create interest and absorption activity at the project.
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000Base Rent per SF per YearUnit Size (Square Feet)
Millenia Think Campus (SUBJECT) Office Space
Eastlake Business Park - 1-Story, Built 1987, Gross, 90.2% Occ.
Venture Commerce Center - 1-Story, Built 2006, Sublet, 87.0% Occ.
Parkway Professional Plaza - 2-Story, Built 2004, Relet, 92.7% Occ.
Eastlake Business Center - 2-Story, Built 2004, Modified Gross, 90.8% Occ.
Eastlake Medical and Professional Ctr. - 2-Story, Built 2007, Modified Gross,
74.6% Occ.
Eastlake Business Center - 2-Story, Built 2002, Relet, 73.9% Occ.
The Plaza at Eastlake - 2-Story, Built 1992, Relet, 60.0% Occ.
Eastlake Medical Building - 0,002 sq ft, Built 2005, Modified Gross, 70.1% Occ.
910 Hale Place - 0,002 sq ft, Built 2005, Modified Gross, 60.7% Occ.
Source: Meyers LLC; Property Leasing Representatives
February 2018 | City of Chula Vista
Millenia | San Diego County, California 53
Chula Vista Comparable Office Project Detail
MIX
Project Name Management
Location Address Size
Product Details Lease Summary SF Low -High Average Low -High Average
Eastlake Business Park Investcal Realty Corp.1 1,469 $31,730 -$31,730 $31,730 $21.60 -$21.60 $21.60
Chula Vista, CA 900 Lane Ave
Product:Class B Total SF:19,646
Building Stories:1-Story Total Leased SF:17,728
Parking (Included):Surface Vacant SF:1,918
Year Built:1987 Occupancy %:90.2%
Use Office/Flex Terms:Gross
Totals/Averages:1 1,469 $31,730 -$31,730 $31,730 $21.60 -$21.60 $21.60
Venture Commerce Center Cresa 1 2,169 $34,878 -$34,878 $34,878 $16.08 -$16.08 $16.08
Chula Vista, CA 850-880 Jetty Lane
Product:Class B Total SF:16,658
Building Stories:1-Story Total Leased SF:14,485
Parking (Included):Surface Vacant SF:2,173
Year Built 2006 Occupancy %:87.0%
Use Office/Flex Terms:Sublet
$599,000 office condo price
Totals/Averages:1 2,169 $34,878 -$34,878 $34,878 $16.08 -$16.08 $16.08
Parkway Professional Plaza 1 1,636 $35,141 -$35,141 $35,141 $21.48 -$21.48 $21.48
Chula Vista, CA 860 Kuhn Drive
Product:Class B Total SF:22,605
Building Stories:2-Story Total Leased SF:20,965
Parking (Included):Surface Vacant SF:1,640
Year Built:2004 Occupancy %:92.7%
Use Office/Medical Terms:Relet
Totals/Averages:1 1,636 $35,141 -$35,141 $35,141 $21.48 -$21.48 $21.48
Eastlake Business Center Voit 1 1,636 $28,466 -$28,466 $28,466 $17.40 -$17.40 $17.40
Chula Vista, CA 881 Kuhn Dr
Product:Class B Total SF:17,786
Building Stories:2-Story Total Leased SF:16,150
Parking (Included):Surface Vacant SF:1,636
Year Built:2004 Occupancy %:90.8%
Use Flex/ R&D Terms:Modified Gross
Totals/Averages:1 1,636 $28,466 -$28,466 $28,466 $17.40 -$17.40 $17.40
Eastlake Medical and Professional Ctr.Voit 1 3,888 $118,973 -$118,973 $118,973 $30.60 -$30.60 $30.60
Chula Vista, CA 2080-2090 Otay Lakes Rd 1 3,888 $118,973 -$118,973 $118,973 $30.60 -$30.60 $30.60
Product:Class A Total SF:68,000 1 3,319 $101,561 -$101,561 $101,561 $30.60 -$30.60 $30.60
Building Stories:2-Story Total Leased SF:50,707 1 3,319 $101,561 -$101,561 $101,561 $30.60 -$30.60 $30.60
Parking (Included):Surface Vacant SF:17,293 1 2,879 $88,097 -$88,097 $88,097 $30.60 -$30.60 $30.60
Year Built 2007 Occupancy %:74.6%
Use Office/Medical Terms:Modified Gross
Totals/Averages:5 3,459 $105,833 -$105,833 $105,833 $30.60 -$30.60 $30.60
COMMUNITY AND LEASING SPECIFICS COMPETITIVE MARKET PRICING SUMMARY
Asking Rents Current $/SF
February 2018 | City of Chula Vista
Millenia | San Diego County, California 54
Chula Vista Comparable Office Project Detail (Continued)
MIX
Project Name Management
Location Address Size
Product Details Lease Summary SF Low -High Average Low -High Average
COMMUNITY AND LEASING SPECIFICS COMPETITIVE MARKET PRICING SUMMARY
Asking Rents Current $/SF
The Plaza at Eastlake Voit 1 6,802 $191,816 -$191,816 $191,816 $28.20 -$28.20 $28.20
Chula Vista, CA 2300 Boswell Rd 1 2,785 $78,537 -$78,537 $78,537 $28.20 -$28.20 $28.20
Product:Class A Total SF:130,324 1 14,572 $410,930 -$410,930 $410,930 $28.20 -$28.20 $28.20
Building Stories:2-Story Total Leased SF:78,237 1 1,381 $38,944 -$38,944 $38,944 $28.20 -$28.20 $28.20
Parking (Included):Surface Vacant SF:52,087 1 2,949 $83,162 -$83,162 $83,162 $28.20 -$28.20 $28.20
Year Built:1992 Occupancy %:60.0%1 2,915 $82,203 -$82,203 $82,203 $28.20 -$28.20 $28.20
Use Office Terms:Relet 1 11,712 $330,278 -$330,278 $330,278 $28.20 -$28.20 $28.20
1 7,198 $202,984 -$202,984 $202,984 $28.20 -$28.20 $28.20
1 1,773 $49,999 -$49,999 $49,999 $28.20 -$28.20 $28.20
1 1,870 $52,734 -$52,734 $52,734 $28.20 -$28.20 $28.20
1 10,000 $282,000 -$282,000 $282,000 $28.20 -$28.20 $28.20
Totals/Averages:11 5,814 $163,962 -$163,962 $163,962 $28.20 -$28.20 $28.20
Eastlake Business Center Voit 1 1,876 $56,280 -$56,280 $56,280 $30.00 -$30.00 $30.00
Chula Vista, CA 891 Kuhn Dr 1 2,845 $85,350 -$85,350 $85,350 $30.00 -$30.00 $30.00
Product:Class B Total SF:38,236 1 2,887 $86,610 -$86,610 $86,610 $30.00 -$30.00 $30.00
Building Stories:2-Story Total Leased SF:28,262 1 2,366 $70,980 -$70,980 $70,980 $30.00 -$30.00 $30.00
Parking (Included):Surface Vacant SF:9,974
Year Built 2002 Occupancy %:73.9%
Use Office/Medical Terms:Relet
Totals/Averages:4 2,494 $74,805 -$74,805 $74,805 $30.00 -$30.00 $30.00
Eastlake Medical Building 1 10,753 $311,837 -$311,837 $311,837 $29.00 -$29.00 $29.00
Chula Vista, CA 2060 Otay Lakes Rd
Product:Class A Total SF:36,000
Building Stories:2 Total Leased SF:25,247
Parking (Included):Surface Vacant SF:10,753
Year Built:2005 Occupancy %:70.1%
Use Medical Office Terms:Modified Gross
Totals/Averages:1 10,753 $311,837 -$311,837 $311,837 $29.00 -$29.00 $29.00
910 Hale Place Voit 1 2,423 $72,690 -$72,690 $72,690 $30.00 -$30.00 $30.00
Chula Vista, CA 910 Hale Place 1 2,223 $66,690 -$66,690 $66,690 $30.00 -$30.00 $30.00
Product:Class A Total SF:33,954 1 2,123 $63,690 -$63,690 $63,690 $30.00 -$30.00 $30.00
Building Stories:2 Total Leased SF:20,601 1 1,130 $33,900 -$33,900 $33,900 $30.00 -$30.00 $30.00
Parking (Included):Surface Vacant SF:13,353 1 1,660 $49,800 -$49,800 $49,800 $30.00 -$30.00 $30.00
Year Built:2005 Occupancy %:60.7%1 1,256 $37,680 -$37,680 $37,680 $30.00 -$30.00 $30.00
Use Office/Medical Terms:Modified Gross 1 2,538 $76,140 -$76,140 $76,140 $30.00 -$30.00 $30.00
Totals/Averages:7 1,908 $57,227 -$57,227 $57,227 $30.00 -$30.00 $30.00
February 2018 | City of Chula Vista
Millenia | San Diego County, California 55
Office Buildings Surrounding Millenia
Eastlake Business Center
(881 Kuhn Dr)
Class B Flex/ R&D
17,786 SF, Built 2004
$17.40 SF/ Yr. (Relet)
90.8% occupied
Eastlake Business Park
Class B Office/ Flex
19,998 SF, Built 1987
$21.60 SF/ Yr. (Gross)
90.2% occupied
Venture Commerce Center
Class B Office/ Flex
16,658 SF, Built 2006
$16.08/ SF/ Yr. (Sublet)
87.0% occupied
Parkway Professional Plaza
Class B Office/ Medical
22,605 SF, Built 2004
$21.48/ SF/ Yr. (Relet.)
92.7% occupied
Eastlake Business Center
(891 Kuhn Dr)
Class B Office/ Medical
38,236 SF, Built 2002
$30.00 SF/ Yr. (Relet)
73.9% occupied
February 2018 | City of Chula Vista
Millenia | San Diego County, California 56
Office Buildings Surrounding Millenia Are Smaller, Medical
910 Hale Place
Class A Office/ Medical
33,954 SF, Built 2005
$30.00 SF/ Yr. (Relet)
60.7% occupied
Eastlake Medical and Professional Ctr.
Class A Office Condos
68,000 SF, Built 2007
$30.60 SF/ Yr. (Modified Gross)
74.6% occupied
The Plaza at Eastlake
Class A Office
130, 324 SF, Built 1992
$28.20 SF/ Yr. (Sublet)
60.0% occupied
Eastlake Medical Building
Class A Office
36,000 SF, Built 2005
$29.00 SF/ Yr. (Relet.)
70.1% occupied
February 2018 | City of Chula Vista
Millenia | San Diego County, California 57
Commercial Broker Survey
Questions/ Participant
Tony Russell
JLL
858-410-1213
Paul Braun
JLL
858-410-6388
Chris Holder
Colliers
858-677-5372/ 619-871-9028
1. How are overall market conditions for office
space in the Eastern Chula Vista market?
Existing market has been pretty tight market, hasn’t been a huge
concentration. Existing buildings are leased up, its underserved
market, especially all of the housing growth. Office users have to
go Downtown, Mission Valley to find space (which are in low
vacancy). Very rare to find large floor plates, and the reverse
commute is a strong reason to locate here.
No comment There's good activity there, but it's not a very deep market as far as an
office base. Most interest at our commercial development project
(District at Eastlake) is for smaller lots. The market is soft for office
and office land.
2. Would you say rents are rising, falling or
the same as they were a year ago? What
about vacancy rates?
Rents are continuing to increase (4-5% annual rent growth),
vacancy is tightening. Will continue to see rent growth.
No comment No comment
3. Is office space difficult to find in the local
area? Is there a greater need for a certain
type of office space, or a certain location?
Yes, not a lot of developers are willing to go spec, most owners do
not have financing in place, and a lot of tenants don’t have the
patience to wait 2-3 years for building to be built.
Hospital beds are one thing, outpatient care is another, and there are a
variety of needs in terms of location. The only hospital in this area is Sharp
Chula Vista Hospital. There very well may need to be another hospital here.
Its not difficult, for example the Plaza at Eastlake- 2300 Boswell Rd,
130,000 SF total with 50,000 SF available. $28/SF (NNN). Former
North Island FCU building has been on the market for lease for a long
time.
4. What is your reaction to the Millenia office
development at SR125 and Birch Road?
Main thing is tenants want awesome amenities. Tenants want to
walk to great restaurants. Cant find large floor plates, with
amenities. Larger corporate tenants want larger floorplates than
25,000. Also quality design doesn’t even exist in San Diego.
Getting a lot of interest from medical, technology, (amazon,
Facebook, google) could be possibility. Facebook has been in the
market. Quasi government uses. Possibly life science. There is
new quality housing nearby. Corporations that are cross border
manufacturing.
Excited to expose the Millenia project to hospital systems and educate
them as to possibly the largest area of growth as far as housing, future
demographics in that part of the county, and see if they would plant a major
flag here. Approach UCSD, Scripps sharp, Kaiser, Children's. Right now
trying to expose Think Campus to hospitals, but there is a lot of flexibility. If
one of the major hospitals decides to build there, possibly work with a
provider from Mexico.
Class A office users and tech users have always gravitated to central
areas and North County. Talent is already established in northern areas
of the region. Underlying rent is improtant to consider but top firms still
want to locate to the north where their employee base is. Warehosue
will still locate here, because its cheaper, but that isnt the vision for
Millenia. On the other hand, if a major tenant such as Qualcomm
decided to establish a headquarters here, then other tenants would
follow suit and leasing activity could happen very fast.
5. What lease rates could be expected for
new construction here? Medical vs.
traditional?
Today probably be mid $3.50 gross (plus utilities), or $2.75 NNN.
Length of terms 7-10 years). OpEx $0.65. TI $60-$65 for traditional
office. (additional for medical).
Not sure what lease rates would be, but probably parallel to Class A medical
office lease rates around the County. Shell and site costs are $160-$200/
SF. Haven't sold health care land recently, but have been $35-40 / SF
range. Well located piece of dirt for.
There hasn’t been any precedent for office development here, so its
hard to find precedent for land over $30.00/SF. It's a great industrial
market that is almost fully leased, but not the same for office.
6. How long of a lease up period would you
expect?
100,000 to 150,000 SF per year Couldn’t even guesstimate, depends on what range of size and service they
want to provide. Could range from 15,000 to 500,000 SF hospitals.
Hospitals are looking at increments of 20 to 30 year timeframe opportunities.
Hard to say, don’t really have a grasp on that. Look at historical
absorption data for the South Bay.
7. What sort of cap rate could be expected
for new office construction here? Are you
aware of any office/ land sales comp
transactions in the local area?
Will send comps.No comment Two land comparables on Fenton Street, sold for $26.66/ SF and
$20.15/ SF
8. Are there any planned/ proposed office
developments in the area?
Not in the immediate area. Old Union Tribune site, Ampersand,
repurposed in Mission Valley. Couple projects planned in
Downtown but not significant size. But not building until they get a
tenant.
From a regional standpoint, there isn't any competition to Millenia in terms of
a health care location, we don’t see medical/ office sites of this magnitude
with these locational characteristics anywhere else in South County.
Suggested prices at District $30.00 for finished land, (curb, gutter,
graded, roads, utilities). Have to re-grade because of storm water .
Renovation of a 60,000 SF ind building for San Ysidro Health office
building. Non profit health organization.
9. Other comments?No comment There is really no pattern in terms of size that hospitals require. We let
them dictate what their needs are. Could be delivered and acquired in a
number of ways. Chestnut would prefer to retain the property. Amazon,
Berkshire, JP Morgan are creating a healthcare system, and that is a real
unknown that they are trying to get their strategy together.
There are few examples of tech companies in the South Bay. Global
Imaging Technologies is a General Dynamics company (formerly
Axsys Technologies) that is located here, they started with 10,000 SF
and expanded to 40,000 SF. But that’s the prime example. A college
campus would be an excellent user to target for Millenia, but they
would request the land for free or very cheap since they are a major
jobs generator.
February 2018 | City of Chula Vista
Millenia | San Diego County, California 58
Office Market Trends
Millenia Office and Residential Analysis, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia | San Diego County, California 59
Source: CoStar
The San Diego office market is comprised of 39 office submarkets that divide up the greater San Diego area.The Millenia Site is located in the
South Bay Market,which is comprised of six submarkets (in red)—the Chula Vista submarket (location of Site),as well as San Ysidro/Imperial
Beach,East County,Southeast San Diego,National City,and Otay Mesa submarkets.
Definition of South Bay Market
San Diego
Office
Submarkets
South Bay
Market
February 2018 | City of Chula Vista
Millenia | San Diego County, California 60
San Diego Office Inventory Growth Has Slowed in 2016/2017
Source: CoStar
Office inventory in San Diego County had increased by 800,000 square feet annually from 2009 through 2015,but inventory growth has slowed
to 336,000 square feet in 2016 and 147,000 square feet in 2017.The slowing inventory growth is not due to lack of demand,but due in part to
limited land availability for office development and a limited number of groups that are willing and able to secure financing and develop
speculative office buildings.
104.00
106.00
108.00
110.00
112.00
114.00
116.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4QSquare Feet (in Millions)Office Inventory (in Millions Square Feet)
Inventory 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4Q
Total Inventory (SF)107,678,579 109,026,966 109,769,524 110,236,461 110,649,630 111,415,573 112,289,039 113,298,974 113,295,168 113,663,770 113,640,729 113,635,967 113,770,957 113,760,905 114,213,998 114,225,798
Inventory Change 1,348,387 742,558 466,937 413,169 765,943 873,466 1,009,935 -3,806 368,602 -23,041 -4,762 134,990 -10,052 453,093 11,800
% Change 1.3%0.7%0.4%0.4%0.7%0.8%0.9%0.0%0.3%0.0%0.0%0.1%0.0%0.4%0.0%
February 2018 | City of Chula Vista
Millenia | San Diego County, California 61
0.00
1.00
2.00
3.00
4.00
5.00
6.00
'82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17Square Feet (in Millions)Office Deliveries (in Millions Square Feet)
San Diego Office Deliveries Follow Cycles of Development
Source: CoStar
New office deliveries have averaged approximately 2.18 million square feet annually over the past 36 years.Most years have run below this
average,since the average is influenced by select years where deliveries were remarkably high (1980’s and early/mid 2000’s in particular).New
deliveries continue to fall well below the long term average in 2017,marking the ninth consecutive year with deliveries under 2 million square
feet.The limited new deliveries in 2009-2012 were largely due to the Great Recession,but the slowing inventory growth in recent years is not
due to lack of demand,but due in part to limited land availability for office development and a limited number of groups that are able to develop
speculative office buildings.
Average = 2.18 Million SF
Deliveries '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
Total Deliveries (SF)3.60 3.40 5.00 3.70 5.40 3.50 3.30 4.20 4.20 2.10 1.10 0.50 0.20 0.40 0.80 0.80 3.00 2.80 3.20 3.80 2.10 1.10 1.10 2.10 2.80 3.50 3.10 1.40 0.80 0.50 0.80 0.90 1.00 1.20 0.40 0.70
% Change -6%47%-26%46%-35%-6%27%0%-50%-48%-55%-60%100%100%0%275%-7%14%19%-45%-48%0%91%33%25%-11%-55%-43%-38%60%13%11%20%-67%75%
February 2018 | City of Chula Vista
Millenia | San Diego County, California 62
San Diego Lease Rates Are Increasing, Vacancy is Decreasing
Average office lease rates have increased recently,to a high of $2.67 per square foot per month in the most recent quarter,exceeding the
previous high of $2.60 per square foot per month during 2008—it should be noted that vacancy was much higher in 2008 (14.4%).The vacancy
rate has trended downward as well,from 15.2%in 2009 to 9.6%in the most recent quarter,which represents a relatively strong office market.
Source: CoStar
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4QAvg. Asking Lease Rate (Monthly $/ SF)Office Lease Rates and Vacancy Rates
Lease Rates Vacancy Rates
Lease Rates 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4Q
Lease Rate ($/ SF/ Mo.)$2.60 $2.29 $2.16 $2.11 $2.12 $2.18 $2.35 $2.46 $2.45 $2.47 $2.54 $2.59 $2.60 $2.63 $2.64 $2.67
Lease Rate Change ($0.31)($0.13)($0.05)$0.01 $0.06 $0.17 $0.11 ($0.01)$0.02 $0.08 $0.05 $0.01 $0.03 $0.02 $0.02
% Change -12.0%-5.5%-2.3%0.4%2.7%7.9%4.6%-0.5%0.9%3.0%1.8%0.4%1.1%0.6%0.9%
Vacancy Rates 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4Q
Vacancy Rate 14.4%15.2%14.5%13.7%12.4%11.6%11.0%11.1%10.6%11.0%10.5%10.1%9.8%9.7%9.8%9.6%
Vac. Rate Change 0.8%-0.7%-0.8%-1.3%-0.7%-0.7%0.1%-0.5%0.4%-0.5%-0.4%-0.3%-0.1%0.1%-0.3%
% Change 5.6%-4.6%-5.7%-9.5%-5.9%-5.7%1.3%-4.6%3.5%-4.5%-3.9%-2.8%-0.6%0.9%-2.8%
February 2018 | City of Chula Vista
Millenia | San Diego County, California 63
San Diego MSA Absorption is Outpacing Completions
San Diego office market absorption has outpaced deliveries in seven out of the past eight years,with very strong gains in absorption in 2016 in
particular (1.487 million square feet absorbed versus only 308,000 square feet delivered).In fact,absorption has nearly doubled new deliveries
since 2010,with a combined 10.8 million square feet of absorption versus 5.6 million square feet of deliveries—this indicates a supply
constrained office market that can support additional new office space.
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Deliveries (SF)3,083,998 1,324,144 748,785 460,427 751,128 921,731 939,917 801,903 308,970 725,408
Absorption (SF)(1,004,793)275,073 1,398,015 1,311,108 1,787,965 1,490,657 1,514,100 743,316 1,487,205 1,128,299Square FeetSource: Costar
OFFICE MARKET ABSORPTION VS. COMPLETED SPACE
Deliveries (SF)Absorption (SF)
February 2018 | City of Chula Vista
Millenia | San Diego County, California 64
South Bay Achieving Low Vacancy, Average Lease Rates
The South Bay market comprises 9.6%of the San Diego MSA overall,significantly less than North San Diego (UTC,Sorrento Valley,La Jolla)
and Central San Diego (Mission Valley,Kearny Mesa).The South Bay is a more affordable office market than the San Diego MSA,with average
lease rates of +/-$2.23 per square foot per month,and significantly more affordable than Coronado,the I-5 Corridor (Carlsbad,Del Mar)and
North Central County.The vacancy rate is lower than the MSA overall,at 5.0%,indicating there is likely support for additional office development,
albeit at reasonable lease rates.
Central San Diego, 25.5%
Coronado, 0.2%
Downtown, 11.7%
I-15 Corridor, 12.3%
I-5 Corridor, 13.2%
MCAS Miramar, 0.03%North Central County, 0.3%
North San Diego, 22.7%
South Bay, 9.6%
SR-78 Corridor, 4.5%
Total Inventory
Source: CoStar
YTD YTD Avg. Asking Rent
Net Absorption (SF)Deliveries (SF)($/ SF/ Mo.)
Central San Diego 29,089,349 1,772,330 6.1%446,371 10,406 $2.23
Coronado 183,178 16,211 8.8%(4,650)0 $3.00
Downtown 13,411,124 1,469,836 11.0%281,792 0 $2.58
I-15 Corridor 14,042,893 1,508,551 10.7%(447,372)100,000 $2.53
I-5 Corridor 15,128,473 2,228,438 14.7%134,281 130,505 $3.19
MCAS Miramar 31,618 0 0.0%0 0 $0.00
North Central County 327,412 19,163 5.9%12,324 0 $4.45
North San Diego 25,913,427 2,778,764 10.7%501,620 412,697 $2.89
South Bay 10,929,979 547,728 5.0%141,621 0 $2.23
SR-78 Corridor 5,168,345 568,149 11.0%62,312 71,800 $1.98
TOTAL:114,225,798 10,909,170 9.6%1,128,299 725,408 $2.67
Vacancy RateVacant SFTotal SFSubmarket
February 2018 | City of Chula Vista
Millenia | San Diego County, California 65
South Bay Market Office Inventory Growth is Limited
Source: CoStar
Office inventory in the South Bay market has been at just over 10.9 million square feet for the past five years.During this time,there has been
minimal increase in inventory in recent years and actually a decrease of inventory in 2016 and 2017 (likely due to teardowns of older product or
office buildings repurposed for other uses).
10.88
10.89
10.90
10.91
10.92
10.93
10.94
10.95
10.96
10.97
2014 1Q 2014 2Q 2014 3Q 2014 4Q 2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4QSquare Feet (in Millions)Office Inventory (in Millions Square Feet)
Inventory 2014 1Q 2014 2Q 2014 3Q 2014 4Q 2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4Q
Total Inventory (SF)10,910,456 10,922,550 10,963,234 10,963,234 10,938,568 10,938,568 10,938,568 10,942,420 10,942,420 10,942,420 10,943,379 10,935,379 10,935,379 10,935,379 10,929,979 10,929,979
Inventory Change --12,094 40,684 0 -24,666 0 0 3,852 0 0 959 -8,000 0 0 -5,400 0
% Change --0.1%0.4%0.0%-0.2%0.0%0.0%0.0%0.0%0.0%0.0%-0.1%0.0%0.0%0.0%0.0%
February 2018 | City of Chula Vista
Millenia | San Diego County, California 66
South Bay Market Lease Rates Increasing, Vacancy is Very Low
Office market trends are strong in the South Bay,as average office lease rates have increased in the most recent quarters,to a high of $2.23 per
square foot per month in Q4 2017.The vacancy rate has decreased from 9.1%in Q1 2014 to a low of 5.0%in late 2017,which is a very low
office vacancy rate and indicates a supply constrained market.
Source: CoStar
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
2014 1Q 2014 2Q 2014 3Q 2014 4Q 2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4Q Vacancy RateAvg. Asking Lease Rate (Monthly $/ SF)Office Lease Rates and Vacancy Rates
Lease Rates Vacancy Rates
Lease Rates 2014 1Q 2014 2Q 2014 3Q 2014 4Q 2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4Q
Lease Rate ($/ SF/ Mo.)$1.81 $1.82 $1.81 $1.87 $1.92 $1.90 $1.88 $1.93 $1.95 $1.98 $2.00 $2.11 $2.18 $2.15 $2.17 $2.23
Lease Rate Change $0.02 ($0.02)$0.06 $0.05 ($0.01)($0.02)$0.05 $0.02 $0.03 $0.02 $0.11 $0.07 ($0.02)$0.02 $0.06
% Change 0.9%-0.9%3.2%2.6%-0.7%-1.2%2.5%1.1%1.8%1.0%5.5%3.1%-1.1%0.9%2.8%
Vacancy Rates 2014 1Q 2014 2Q 2014 3Q 2014 4Q 2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q 2017 2Q 2017 3Q 2017 4Q
Vacancy Rate 9.1%8.7%8.7%8.6%8.8%8.6%8.6%8.7%7.4%6.9%6.5%6.4%6.1%5.8%6.0%5.0%
Vac. Rate Change -0.4%0.0%-0.1%0.2%-0.2%0.1%0.0%-1.3%-0.4%-0.4%-0.2%-0.3%-0.3%0.3%-1.0%
% Change -4.6%0.1%-1.2%1.9%-2.6%0.8%0.5%-15.1%-5.7%-5.7%-2.8%-4.1%-5.5%4.4%-16.6%
February 2018 | City of Chula Vista
Millenia | San Diego County, California 67
South Bay Market Completions Are Now Outpacing Absorption
Annual net absorption has fluctuated as compared to completions in recent years—2016 was particularly strong,with over 245,000 square feet
absorbed versus no new deliveries (per CoStar data).This data indicates that leasing activity was predominantly existing space that was vacant.
Last year (2017)has continued to deliver little to no new completions coupled with 141,000 square feet of positive net absorption.
-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
2014 2015 2016 2017
Deliveries (SF)12,094 3,852 0 0
Absorption (SF)160,422 (23,610)245,741 141,621Square FeetSource: Costar
OFFICE MARKET ABSORPTION VS. COMPLETED SPACE
Deliveries (SF)
Absorption (SF)
February 2018 | City of Chula Vista
Millenia | San Diego County, California 68
South Bay Market Outlying Dominated by Class B and C Space
Vacancy Absorption (SF)Deliveries (SF)Under Asking Rent
Type Total SF Vacant SF Rate Year to Date Year to Date Construction (SF)($/ SF/ Mo.)
Class A 681,413 103,906 15.2%34,279 0 0 $2.55
Class B 5,136,180 233,274 4.5%92,783 0 13,200 $2.44
Class C 5,112,386 210,548 4.1%14,559 0 0 $1.92
TOTAL:10,929,979 547,728 5.0%141,621 0 13,200 $2.23
Class A
6%
Class B
47%
Class C
47%
Total Inventory
Source: Costar
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
Class A Class B Class C Vacancy RateAvg. Asking Lease Rate (Mo. $/SF) Source: Costar
($/ SF/ Mo.)
Vacancy Rate
Only 6%of office space in the South Bay is regarded as Class A space,indicating an opportunity for additional Class A space in the market.
Although the vacancy rate for Class A is relatively high at 15.2%,this equates to just over 100,000 square feet of vacancy space (which is non
contiguous and is scattered among several smaller spaces).Further,absorption is positive at 34,000 square feet in 2017 and the vacant space is
likely to continue to be absorbed in 2018.Given the unique project concept of Millenia (large floor plates in new,modern buildings with
amenities),the current Class A space that is vacant in the South Bay is not a significant concern.
February 2018 | City of Chula Vista
Millenia | San Diego County, California 69
Chula Vista Submarket Is Primarily Class B and Class C Space
Vacancy Absorption (SF)Deliveries (SF)Under Asking Rent
Type Total SF Vacant SF Rate Year to Date Year to Date Construction (SF)($/ SF/ Mo.)
Class A 447,583 97,980 21.9%29,165 0 0 $2.55
Class B 2,061,032 104,323 5.1%28,501 0 0 $2.64
Class C 1,027,957 78,049 7.6%1,795 0 0 $2.40
TOTAL:3,536,572 280,352 7.9%59,461 0 0 $2.54
Class A
13%
Class B
58%
Class C
29%
Total Inventory
Source: Costar
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
$2.25
$2.30
$2.35
$2.40
$2.45
$2.50
$2.55
$2.60
$2.65
$2.70
Class B Class C Vacancy RateAvg. Asking Lease Rate (Mo. $/SF) Source: Costar
($/ SF/ Mo.)
Vacancy Rate
The Chula Vista office market is comprised of 13%Class A space.Although the vacancy rate for Class A is relatively high at 21.9%,this equates
to just under 100,000 square feet of vacant space (which is non-contiguous and is scattered among several smaller spaces).Further,absorption
is positive at 29,000 square feet in 2017 and the vacant space is likely to continue to be absorbed in 2018.Given the unique project concept of
Millenia (large floor plates in new,modern buildings with amenities),the current Class A space that is vacant in Chula Vista is not a significant
concern.
70
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Location Overview
71
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Regional Location & Proximity to Employment
Millenia is located within a 30-minute commute to employment concentrations in South and Central San Diego County,including
nearby job nodes in Otay Mesa,Chula Vista,Downtown San Diego County and Mission Valley/Kearny Mesa.
15-Min. Drive Time
30-Min. Drive Time
72
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Regional Location and Proximity to Employment
The map below illustrates the geographic
concentration of residents in the 91913 zip code
commuting to jobs,and the direction and destination
of employment for these workers.There are roughly
17,100 employees in the 91913 zip code of Otay
Ranch.Over 29%of these commute less than 10
miles to employment destinations such Chula Vista,
National City,La Mesa and El Cajon.A further 45%
commute between 10 and 25 miles to work in San
Diego.All employment destinations are located to
the northeast of the Subject zip code 91913.
73
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Aerial Location Map of Services and Neighborhood Amenities
Otay Ranch High
Brown Field
Airport
Otay Mesa
Otay Ranch
Town Center
Olympian High
Mater Dei High
Chula Vista
Elementary
Camarena
Elementary
Palermo
(Lennar)
US Olympic
Training Center
SUBJECT
METRO: Two-story townhomes
TRIO: Two-story garden homes
EVO: Two-and three story townhomes/flats.
The first phase of Millenia is currently under
construction,and homes at three neighborhoods
(Evo,Trio and Metro)have recently been
released for sale.Development of Improvement
Area No.1 is also started with active projects by
Shea and KB Home and a planned project by
CalAtlantic/Lennar.
74
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Location of Otay Ranch Village 3 North in Otay Ranch
The actively selling projects at Otay Ranch are located in Village 2,and in the Eastlake area near the Olympic Training Center.Over
the next few years,development will shift south,with further development in planned Otay Ranch Villages east and west of V3,in
Villages 3,8,9 and 10.
75
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
School District Rankings
The Millenia property will be served by Chula Vista Elementary and Sweetwater Union High School Districts,which both rank higher
than the California State average (Chula Vista Elementary School District ranks in the top third of school districts in San Diego
County).There are also charter,private and parochial school options nearby,including Mater Dei Catholic High School and a High
Tech Elementary/High School charter school.
SAN DIEGO COUNTY
School District
2013 Growth
API School District
2013 Growth
API
Rancho Santa Fe Elementary 958 Julian Union Elementary 814
Del Mar Union Elementary 955 Cajon Valley Union 812
Solana Beach Elementary 938 San Diego Unified 809
Cardiff Elementary 917 Lakeside Union Elementary 807
Encinitas Union Elementary 914 San Ysidro Elementary 802
Coronado Unified 897 National Elementary 792
San Dieguito Union High 897 Sweetwater Union High 792
Poway Unified 894 STATE OF CA 790
Bonsall Union Elementary 890 Vista Unified 788
San Pasqual Union Elementary 882 Lemon Grove 787
Spencer Valley Elementary 881 Oceanside Unified 787
Carlsbad Unified 876 SBC - High Tech High 786
San Marcos Unified 870 Julian Union High 785
Chula Vista Elementary 863 Grossmont Union High 769
Vallecitos Elementary 863 South Bay Union Elementary 766
Santee Elementary 862 Escondido Union Elementary 758
Alpine Union Elementary 848 Escondido Union High 745
Jamul-Dulzura Union Elementary 843 Fallbrook Union High 744
Fallbrook Union Elementary 836 Dehesa Elementary 736
La Mesa-Spring Valley 828 Borrego Springs Unified 730
Valley Center-Pauma Unified 819 Warner Unified 728
Ramona City Unified 816 Mountain Empire Unified 722
Source: California Department of Education
ACADEMIC PERFORMANCE INDEX BY SCHOOL DISTRICT
76
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Economic and Demographic Overview
77
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Submarket Map
Economic and demographic trends were analyzed and compared in San Diego County as a whole,South County,91913,91914
and the Subject Zip code of 91915.
91914
9191591913
78
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
San Diego County has sustained regional job gains of 20,000 to 30,000 new jobs per year,and this growth is projected to continue
into 2017.Economy.com projects that unemployment will remain steady at levels below 5%.
Annual Job Growth and Unemployment Rate in San Diego County
San Diego-Carlsbad, CA Metropolitan Statistical Area - Ten Year History Five-Year Forecast*
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F
Non-Farm Employment 1,314,770 1,323,790 1,316,600 1,250,330 1,241,620 1,251,780 1,284,470 1,318,100 1,346,920 1,386,670 1,420,480 1,450,280 1,474,660 1,496,070 1,508,110
Prior Year Change 20,630 9,020 (7,190)(66,270)(8,710)10,160 32,690 33,630 28,820 39,750 33,810 29,800 24,380 21,410 12,040
Annual % Change 1.6%0.7%-0.5%-5.0%-0.7%0.8%2.6%2.6%2.2%3.0%2.4%2.1%1.7%1.5%0.8%
Unemployment Rate 4.0%4.6%6.0%9.4%10.8%10.3%9.1%7.8%6.4%5.2%4.6%4.4%4.1%4.1%4.3%
Employment History
& Forecasts
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
19941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016F2017F2018F2019F2020FUnemployment RateAnnual Non-Farm Employment GrowthSource: Economy.com
79
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
While households in the Less than 15 (Children)and 35 to 44 year categories are dominant and growing steadily in the 91915 zip
codes and in the submarket (3 Zip Codes).The biggest change in household income for the 91915 zip code will be in the $150,000
to $199,999.
Population by Age
Growth By HH Income Group Over the Next 5 Years
Current Population Age Distribution
80
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
For the Subject Zip Code (91915),the population is more diverse than in the overall County,with higher percentages of Asian (Filipino)and
Hispanic households.
Population Race/Ethnicity
81
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Household occupations in the Subject Zip Code (91915)are predominantly White Collar,Management and Professional in nature,
similar to other affluent nodes of new home building in San Diego County.The dominant household income category in the Subject
zip code is $100,000 to $149,999 (incomes over $200,000 are more prevalent in North County areas like Carmel Valley and Del
Sur/4S Ranch.
Household Occupation Detail
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
White Collar Management
Business
Financial
Professional Sales Admin.Services Blue Collar Farming Constr.Installation
Occupation (2016)
United States San Diego County South County Submarket (3 Zip Codes)91915 92130 92127
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Less than
$15,000
$15,000 to
$24,999
$25,000 to
$34,999
$35,000 to
$49,999
$50,000 to
$74,999
$75,000 to
$99,999
$100,000 to
$149,999
$150,000 to
$199,999
$200,000
or Greater
Households by Income (2016)
United States San Diego County South County Submarket (3 Zip Codes)91915 92130 92127
82
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
The 92130 zip code has higher household income’s in 2016 than that of the Subject’s zip code.The Subject zip code household
income is projected to increase by around 6,400 by 2020.
Household Income
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
United States San Diego County South County Submarket (3 Zip
Codes)
91915 92130 92127
HH. Income (2016)
2016 2021
83
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
The median household net worth in the Subject zip code of 91915 is significantly higher than that of the San Diego County at
$242,400.
Household Net Worth
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
United States San Diego County South County Submarket (3 Zip
Codes)
91915 92130 92127
Net Worth (2016)
Median Average
84
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Household occupations in the Subject Zip Code (91915)are predominantly White Collar and Services in nature,similar to other
affluent nodes of new home building in San Diego County.
Household Occupation
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
United States San Diego County South County Submarket (3 Zip
Codes)
91915 92130 92127
Occupation (2016)
White Collar Services Blue Collar
85
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
The psychographic profiles for South County as a whole were analyzed to determine the dominant psychographic Clusters and
Lifestyle groups present in this area,and the buyer profile characteristics.The three most prevalent groups are married couples in
their early thirties with younger kids and a preference for single family homes,in Lifestyle Groups such as Ethnic Enclaves,Next
Wave,Affluent Estates and Upscale Avenues.
Psychographic Tapestry Characteristics: South County
South County
Rank Cluster Lifestyle Group Household Type Diversity
Index
Own vs.
Rent Preferred Housing Age HH
Size
HH
Income Net Worth Home
Value HH %Age HH
Size
HH
Income Net Worth Home Value HH %
1 7B: Urban Villages Ethnic Enclaves Married Couples 86 70%Single Family 33.6 3.8 $58,900 $114,300 $279,400 1.1%29.7 4.9 $61,873 $80,406 $564,239 19.8%
2 1C: Boomburbs Affluent Estates Married Couples 62 84%Single Family 33.7 3.2 $111,200 $348,600 $353,200 1.5%29.8 4.2 $116,812 $245,226 $713,276 12.9%
3 7F: Southwestern Families Ethnic Enclaves Married Couples 65 54%Single Family 34.1 3.2 $27,800 $15,600 $109,300 0.8%30.2 4.1 $29,203 $10,974 $220,728 9.3%
4 13A: International Marketplace Next Wave Married Couples w/ Kids 89 28%High Density Apts; Single 32.6 3.0 $42,900 $15,100 $338,900 1.2%28.8 4.0 $45,065 $10,622 $684,398 8.2%
5 2B: Pleasantville Upscale Avenues Married Couples 60 83%Single Family 42.3 2.9 $89,300 $314,900 $355,600 2.2%37.4 3.7 $93,807 $221,520 $718,123 7.2%
6 13B: Las Casas Next Wave Married Couples 86 35%Single Family; Multi-Unit R 28.0 4.1 $37,200 $14,500 $242,000 0.7%24.8 5.3 $39,078 $10,200 $488,711 6.6%
7 7A: Up and Coming Families Ethnic Enclaves Married Couples 73 74%Single Family 31.2 3.1 $67,700 $114,000 $201,200 2.3%27.6 4.1 $71,117 $80,195 $406,317 6.2%
8 11C: Metro Fusion Midtown Singles Singles 84 24%Multi-Unit Rentals; Single 29.0 2.6 $33,900 $12,300 $149,000 1.4%25.6 3.4 $35,611 $8,653 $300,901 3.8%
9 8A: City Lights Middle Ground Married Couples 75 52%Multi-Units; Single Family 39.0 2.6 $63,600 $77,100 $369,600 1.5%34.5 3.3 $66,810 $54,237 $746,395 3.3%
10 4A: Soccer Moms Family Landscapes Married Couples 49 85%Single Family 36.8 3.0 $88,600 $272,200 $259,400 2.8%32.5 3.8 $93,072 $191,482 $523,850 2.2%
National Cluster Characteristics Locally Adjusted Characteristics
86
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Housing Market Overview
87
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Single-family permit issuance has averaged 2,475 units per year from 2010 to 2016.The projected total for 2017 is +/-8,800 units and
multi-family permit counts are expected to drop with fewer new apartments getting started and an increase in single-family permit
issuance.The downward trend of detached unit construction can only be reversed with new development of detached lots in places
like South San Diego County where entitled land is available.
Residential Building Permits in San Diego County
San Diego County , CA - Ten Year History Economy.com Five-Year Forecast
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F 2021F 2022F
Total Building Permits 5,357 2,946 3,494 5,370 5,666 8,264 6,875 9,883 10,791 8,791 10,417 10,553 11,332 12,186 12,576
Annual % Change -27.9%-45.0%18.6%53.7%5.5%45.9%-16.8%43.8%9.2%-18.5%18.5%1.3%7.4%7.5%3.2%
SFD Building Permits 2,361 1,778 2,270 2,245 2,197 2,565 2,487 3,222 2,351 3,641 3,965 4,707 5,328 5,817 5,925
Annual % Change -31.0%-24.7%27.7%-1.1%-2.1%16.8%-3.0%29.6%-27.0%54.9%8.9%18.7%13.2%9.2%1.8%
MF Building Permits 2,996 1,168 1,224 3,125 3,469 5,699 4,388 6,661 8,440 5,149 6,452 5,847 6,004 6,369 6,651
Annual % Change -25.3%-61.0%4.8%155.3%11.0%64.3%-23.0%51.8%26.7%-39.0%25.3%-9.4%2.7%6.1%4.4%
Residential Building Permit
History & Forecasts
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
19961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018F2019F2020F2021F2022FResidential Building PermitsSource: Economy.com
88
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Historical Residential Building Permits -Chula Vista, San Diego County, CA
Single-Family Detached Multi-Family Attached
Since 1990,there have been an average of 1,278 residential building permits issued in the City of Chula Vista each year.Beginning
in 2007,this number typically fell well under 1,000 units per year.The projected number of single family building permits for 2017 is
+/-1,017 units,which is increasing,but still below long-term averages.The big increase in 2017 was detached permits,which jumped
up to 51%of total permits,or +/-524 units (vs.just 86 units in 2016).
Residential Building Permits in the City of Chula Vista
89
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
South County Submarket
Single family detached and condominium resales were analyzed in the Subject zip code of 91913,and compared to resale values
for homes and condominiums in San Diego County and the overall South County submarket.
90
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Zip Code Map
Single family detached and condominium resales were analyzed in the Subject zip code of 91915,and compared to resale values
for homes and condominiums in San Diego County and the overall South County submarket.
91913
91914
91915
91
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Existing SFD Home Sales Volume by Area
Single family home sales volume have been relatively stable in San Diego County over the past three years,but are still not at the
pre-recession levels observable from 2003-2005.The 12-month average for the three Submarket zip codes indicates an annualized
rate of +/-900 sales/year,which is down slightly since the same time last year (low inventory).Single family sales in the overall South
San Diego County have been at 3,000 to 3,500 existing detached sales per year over the past three years.
41,010
27,190
6,847
3,217
3,094
902
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1/018/013/0210/025/0312/037/042/059/054/0611/066/071/088/083/0910/095/1012/107/112/129/124/1311/136/141/158/153/1610/165/1712/17San Diego CountyRolling 12-Month Total Single Family Sales
San Diego County South County Submarket Otay Ranch Area (3 Zip Codes)
Source: Collateral Analytics South County Submarket & Otay Ranch Area (3 Zip Codes)
92
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Existing SFD Home Sales Price Trends (Average Price)
Home prices have been on the rise across San Diego for the last four years and are approaching the peak prices achieved in
2006/2007.Prices in South County are following a similar trend,with a slightly slower recovery back to peak prices.The average
price in the South County is up 6.4%in the last year and 21.8%in the past 3 years.The average single family sales price in the
Submarket (three zip code)is up 4.6%from a year ago,and 17.2%in the past 3 years.
$723,417
$638,667
$530,250
$797,250
$624,417
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
$700,000
$750,000
$800,000
$850,000
1/01 8/01 3/02 10/02 5/03 12/03 7/04 2/05 9/05 4/06 11/06 6/07 1/08 8/08 3/09 10/09 5/10 12/10 7/11 2/12 9/12 4/13 11/13 6/14 1/15 8/15 3/16 10/16 5/17 12/17
Rolling 12-Month Total Single Family Price
San Diego County South County Submarket Otay Ranch Area (3 Zip Codes)
Source: Collateral Analytics
93
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
The detached price per square foot in South County and the Submarket (three zip codes)is on the rise,but is lower than the overall
county.The price per square foot in the Submarket is at $297 per square foot,up 7.2%in the past 12 months.
Existing SFD Home Sales Price Trends (Price Per SF)
$369
$329
$297$309
$269
$100
$150
$200
$250
$300
$350
$400
1/018/013/0210/025/0312/037/042/059/054/0611/066/071/088/083/0910/095/1012/107/112/129/124/1311/136/141/158/153/1610/165/1712/17Rolling 12-Month Total Single Family Price per Square Foot
San Diego County South County Submarket Otay Ranch Area (3 Zip Codes)
Source: Collateral Analytics
94
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
The lack of inventory of attached units is also constraining sales levels in South County.South County attached sales volume is
running at about +/-1,567 units per year,a slight decrease from last year.The annualized sales volume in the Submarket (3 zip
codes)is at +/-700 units/year.
Existing Condominium Sales Volume by Area
22,491
12,923
3,231
1,567
1,429
699
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
5,000
10,000
15,000
20,000
25,000
1/01 8/01 3/02 10/02 5/03 12/03 7/04 2/05 9/05 4/06 11/06 6/07 1/08 8/08 3/09 10/09 5/10 12/10 7/11 2/12 9/12 4/13 11/13 6/14 1/15 8/15 3/16 10/16 5/17 12/17San Diego CountyRolling 12-Month Total Single Family Sales
San Diego County South County Submarket Otay Ranch Area (3 Zips)
Source: Collateral Analytics South County Submarket & Otay Ranch Area (3 Zips)
95
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Attached home prices in San Diego County and the South County area are on the increase,but still below peak levels.Average
condominium prices in South County and the Submarket (3 zip codes)are in the mid to upper $300,000s,up from the mid $100,000s
to $200,000s in the 2009-2011 timeframe.
Existing Condominium Sales Price Trends (Average Price)
$469,250
$409,250
$352,000
$443,333
$388,833
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
1/01 8/01 3/02 10/02 5/03 12/03 7/04 2/05 9/05 4/06 11/06 6/07 1/08 8/08 3/09 10/09 5/10 12/10 7/11 2/12 9/12 4/13 11/13 6/14 1/15 8/15 3/16 10/16 5/17 12/17
Rolling 12-Month Total Single Family Price
San Diego County South County Submarket Otay Ranch Area (3 Zips)
Source: Collateral Analytics
96
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
The condominium price per square foot in South County and the Submarket (3 zip codes)is on the increase,but is lower than the
overall County.Condominium prices in South County and the Submarket (3 zip codes)are in the $280 per square foot range,up 25%
from 3 years ago and up over 10%in the past year.
Existing Condominium Sales Price Trends (Price Per SF)
$400 $393
$334
$282
$315
$278
$100
$150
$200
$250
$300
$350
$400
$450
1/018/013/0210/025/0312/037/042/059/054/0611/066/071/088/083/0910/095/1012/107/112/129/124/1311/136/141/158/153/1610/165/1712/17Rolling 12-Month Total Single Family Price per Square Foot
San Diego County South County Submarket Otay Ranch Area (3 Zips)
Source: Collateral Analytics
97
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
The table below shows the price distribution of existing detached sales in the South County submarket.Existing SFD sales are
concentrated in the $400,000 to $700,000 price range,moving up from the $300k to $600k focus seen a year or two back.
South County Sales by Price Range
Looking at the price range distribution of condominium sales,the majority of sales are taking place in the $300,000 to $450,000 price
category.29%of the total sales in 2017 are in the $400,000+price categories,up from just 2%in 2013.
Home Sales by Price Range (Condos): South County Submarket
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2 10 459 944 726 565 450 271 100 71 34 26
53 66 384 466 423 441 422 304 154 107 79 42
93 176 415 512 457 337 370 413 275 215 200 138
182 205 361 285 264 221 220 353 341 337 270 206
374 249 236 138 149 102 96 250 344 312 394 339
548 290 132 56 45 10 17 94 161 269 331 346
473 199 40 15 15 3 10 22 66 121 222 283
239 98 8 1 5 1 2 5 18 41 62 120
312 102 8 9 3 9 7 12 13 18 44 67
Total 2,276 1,395 2,043 2,426 2,087 1,689 1,594 1,724 1,472 1,491 1,636 1,567
% Change -38.7%46.5%18.7%-14.0%-19.1%-5.6%8.2%-14.6%1.3%9.7%
$450 - $499k
$500 or Greater
$350 - $399k
$400 - $449k
$250 - $299k
$300 - $349k
$150 - $199k
$200 - $249k
< $150k
Home Sales by Price Range (SFD): South County Submarket
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
9 15 37 185 66 69 105 67 32 47 21 19
11 8 86 346 199 242 234 94 29 21 16 8
26 37 735 1,298 1,169 1,158 1,191 654 324 204 90 51
125 230 1,169 1,414 1,219 1,175 1,495 1,314 997 868 592 354
838 613 796 722 677 613 721 1,012 933 1,082 1,177 1,038
861 506 333 219 241 182 188 373 511 690 725 924
584 271 138 131 99 86 102 141 184 291 412 502
375 151 70 35 29 40 54 96 66 67 125 166
489 223 90 34 39 33 32 50 72 83 115 155
Total 3,318 2,054 3,454 4,384 3,738 3,598 4,122 3,801 3,148 3,353 3,273 3,217
% Change -38.1%68.2%26.9%-14.7%-3.7%14.6%-7.8%-17.2%6.5%-2.4%
$700 - $799k
$800 or Greater
$500 - $599k
$600 - $699k
$300 - $399k
$400 - $499k
$150 - $199k
$200 - $299k
< $150k
98
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
From 1987 to 2017,the South County market had a
total of 40,310 new home sales,or an average of
1,300+new home sales per year (+/-950 SFD and 350
MF).Sales averaged over 2,800 units per year at the
peak of the market from 1999 through 2005.Since
1987,the South County submarket averaged 18%of
total County new home sales and peaked at 30%in
2001.With a lack of product being developed in recent
years,the South County market has only been
delivering an average of +/-527 new sales per year in
the past 5 years and sales actually dropped in 2016
from the prior year.For 2017,activity picked up
considerably to 955 sales (up 108%)and detached
permits represented the majority of permits issued in
Chula Vista for the first time since 2012.
Development activity in South County is on the
upswing.The Escaya at Otay Ranch master plan
opened in mid 2017 and has sold over 200 units to-date.
There are new developments at Millenia,in Village 2
and in the Otay Mesa area near the U.S./Mexico border.
San Diego and South County Permit and Sales History
SAN DIEGO COUNTY CHULA VISTA SOUTH COUNTY
Year Building Permits (1)New Home Sales (2)Building Permits New Sales (2)
SF MF TOTAL TOTAL
Ratio of Sales
to Permits TOTAL
% of
County TOTAL
% of
County
1980 6,254 6,913 13,167 407 3%
1981 3,915 5,083 8,998 77 1%
1982 3,735 3,818 7,553 192 3%
1983 11,052 9,729 20,781 483 2%
1984 12,318 20,862 33,180 1,200 4%
1985 12,890 25,349 38,239 988 3%
1986 16,585 27,545 44,130 2,076 5%
1987 15,466 15,143 30,609 14,253 47%1,028 3%2,124 15%
1988 14,749 13,803 28,552 14,897 52%1,370 5%1,387 9%
1989 10,856 7,854 18,710 10,425 56%1,680 9%952 9%
1990 6,652 9,080 15,732 6,842 43%665 4%681 10%
1991 5,365 2,526 7,891 6,817 86%811 10%677 10%
1992 3,812 2,259 6,071 5,805 96%560 9%648 11%
1993 4,229 1,521 5,750 5,397 94%440 8%621 12%
1994 5,236 1,707 6,943 6,013 87%1,164 17%838 14%
1995 4,765 1,868 6,633 5,482 83%672 10%840 15%
1996 5,831 1,017 6,848 6,064 89%948 14%891 15%
1997 8,236 2,903 11,139 8,275 74%1,050 9%1,127 14%
1998 9,012 2,879 11,891 8,413 71%1,346 11%1,655 20%
1999 10,070 6,225 16,295 8,307 51%2,561 16%1,999 24%
2000 9,287 6,305 15,592 10,824 69%2,639 17%2,779 26%
2001 9,377 6,028 15,405 9,417 61%3,613 23%2,803 30%
2002 8,880 4,804 13,684 11,957 87%2,250 16%2,890 24%
2003 9,758 8,273 18,031 13,242 73%3,143 17%3,347 25%
2004 9,122 6,465 15,587 15,505 99%3,301 21%3,965 26%
2005 7,576 6,730 14,306 13,517 94%1,636 11%2,188 16%
2006 4,743 4,448 9,191 9,477 103%1,180 13%1,562 16%
2007 3,422 4,013 7,435 6,359 86%576 8%1,078 17%
2008 2,361 2,996 5,357 2,775 52%334 6%538 19%
2009 1,778 1,168 2,946 2,755 94%266 9%567 21%
2010 2,270 1,224 3,494 2,277 65%518 15%343 15%
2011 2,245 3,125 5,370 2,041 38%723 13%553 27%
2012 2,197 3,469 5,666 2,785 49%794 14%620 22%
2013 2,565 5,699 8,264 2,340 28%632 8%441 19%
2014 2,487 4,388 6,875 1,939 28%1,086 16%299 15%
2015 3,222 6,661 9,883 2,441 25%679 7%482 20%
2016 2,351 8,440 10,791 2,323 22%1,175 11%460 20%
2017 4,058 6,357 10,415 3,132 30%1,017 10%955 30%
Minimum 1,778 1,017 2,946 1,939 22%77 1%299 9%
Maximum 16,585 27,545 44,130 15,505 103%3,613 23%3,965 30%
Average 6,809 6,807 13,616 7,164 66%1,192 10%1,300 18%
Median 5,598 5,391 10,603 6,359 69%968 10%891 17%
1/ Per SOCDS, Meyers Research
2/ Meyers Research
COMPARISON OF BUILDING PERMITS AND NEW HOME SALES
San Diego County and South Bay Submarket
1980 - 2017
99
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
San Diego County Has Five Distinct Submarket Areas
San Diego County Stats by Submarket
Source: Meyers Research
100
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
The South County new home market is constrained by the current lack of supply.At this time,there are only 9 active new
home projects in South County,with 6 of them being in the Otay Ranch area (3 SFD projects all under 4,000 SF lot size and 3
attached for-sale projects).With only 204 remaining units and +/-23 sales per month –this represents just about 9.0 months of
inventory.There are some upcoming new projects at Otay Ranch Village II,Ocean View Hills and the Millenia project.But from 2000
to 2006 when the market was at its peak,there were an average of 42 active projects each year in just the Otay Ranch area and
there were multiple selling concurrent offerings in the same general product category.During this timeframe,there were numerous
active MPCs open and selling and generating annual sales per MPC in the 200 to 900 units per year range.
South County Products By Lot Size
1999 2000 2001 2002 2003 2004 2005 2006 2007 2016
Attached 4 6 8 10 11 10 7 7 10 3
SFD: Under 4,000 SF 4 6 9 9 7 6 5 8 7 3
SFD: 4,000-4,999 SF 7 9 6 9 9 8 9 9 6 0
SFD: 5,000-5,999 SF 5 5 4 5 13 14 10 6 4 0
SFD 6,000-6,999 SF 0 2 3 5 7 4 5 5 4 0
SFD: 7,000-9,999 SF 0 0 1 1 1 4 4 3 4 0
SFD: 10,000+ SF 1 1 1 2 4 7 7 6 6 0
TOTAL ACTIVE PROJECTS 21 29 32 41 52 53 47 44 41 6
TOTAL ACTIVE SFD 17 23 24 31 41 43 40 37 31 3
TOTAL ACTIVE ATT 4 6 8 10 11 10 7 7 10 3
SUMMARY OF ACTIVE PROJECTS BY LOT SIZE: OTAY RANCH AREA (1999-2007)
Note:Otay Ranch area does not include the projects in the Ocean View Hills/Otay Mesa area.It only includes projects in Eastern Chula
Vista MPC’s like Eastlake,San Miguel Ranch,Rolling Hills Ranch and the various Villages of the Otay Ranch master plan.
101
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New San Diego County Home Sales by Submarket
The following data from Zonda shows a 108%increase in new home sales activity in South County in 2017,with +/-955 sales,up
from +/-460 new sales in 2016.This increase comes from the development of new projects like Escaya at Otay Ranch (200+new
home sales in the last half of 2017)and increased development at Otay Ranch and Millenia.There are also more infill projects.
102
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Active New Single Family Projects by Submarket
The following data from Zonda shows 78 active new home projects selling in San Diego County as of January 2018,with 18 single-
family projects in South County.In all,there are +/-1,075 remaining unsold units in the active projects.For comparison,at market
peak for active number of detached subdivisions –there were +/-220 active detached projects in the overall County.New home
prices have surpassed a prior peak in 2006 in the mid $800,000s and current average base SFD pricing is $861,000 ($326 per
square foot).Per project sales rates are generally averaging in the 2.0 to 4.0 units per month range.South County detached
projects,with a relatively affordable price in the low $600,000s are averaging 3.0+sales per month.
Active Single Family Subdivision by Submarket
Source: Zonda
103
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Active San Diego County Attached Projects by Submarket
The following data from Zonda shows 42 active attached new home projects selling in San Diego County as of January 2018.In all,
there are +/-1,790 remaining units to sell.For comparison,at market peak for active attached for-sale projects in 2006 there were
225 projects County-wide.South County has more active attached projects than detached at this point,reflecting entitlements and
demand for affordable housing in the region.The median South County attached unit price is in the low $400,000s and the per project
sales rate of 4.2+units per month is above the County average (attached projects in the Coastal North and Central areas of the
County are often infill,urban product (including highrise)at higher price points.
Active Attached Subdivision by Submarket
Source: Zonda
104
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
For Sale Housing Demand
105
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
South County Submarket
For the demand analysis we focused on South County which includes the zip codes indicated on the map below.
92154
91911
91913
91932
92173
91950
91910
91902 91914
91915
106
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Overview of Methodology
Our demand analysis projects new home demand by Home Price Range,Age and Income and Life Stage categories (including
Families,Singles,Younger Couples,Empty Nesters and Retirees).This analysis provides insight into the household compositions of
home buyers by price range and what future growth will be in a defined area so that you can adjust land planning to develop the type
of lots and homes that will be in demand in the coming years.
Our objective for this assignment is to estimate the depth of housing demand by Price Point and Life Stage through 2018,by utilizing
current demographic data and projections and actual home sales activity.This model provides an assessment of demand for new
housing only.
NEW HOME DEMAND MODEL FLOW CHART:
Chula Vista / Otay Mesa
Demand Drivers New Home Demand
New Home Demand by Individual Catagories
Estimated Number Total
of Households New Home
(2020)Filters / Ratios Demand
Minus ( - )Total By Price
Buy vs. Rent Annual (Adjusted by By Age By Life Stage
Current Number Demand Market)
of Households
(2016)2016 -413 -Under
25 Young Families
Buy New vs. Resale 2017 -465 -25 to
34 Growing Families
Equals ( = )2018 -495 $350k to $500k 35 to
44 Mature Families
2019 -488 $500k to $750k 45 to
54 Couples
Over 45
Annual New Household Income 2020 -475 $750k to $1.0M 55 to
64 Singles
Household by Avg -468 $1.0M+65 to
74 Empty
Nester
Grow th Age of Householder Total -2,338 75 &
Greater Retirees
Implied Home Sources
Price from * Economy.com
Income Levels * Esri
* Meyers Adjusted
Housing Expenditures * Dataquick
as a Percentage * US Census Meyers Adjustments
of Income * Mortage Rates, Taxes, HOA Dues
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February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Housing Demand by Price Point and Life Stage
The Housing Demand Analysis by Price Point and Life Stage provides insight into the types of buyers that are likely to consider
housing in a specified market area.
For this analysis,we analyzed the demand potential in the entire San Diego County MSA and for the South County submarket
where Millenia is located.
The Housing Demand by Price Point and Life Stage analyzes household composition in defined market areas to determine the
depth of annual home buying demand of each of the following seven household compositions.
•Singles Under 65 Without Children
•Couples Under 45 Without Children (but who may be planning for children)
•Young Families (primarily children under age 5 years)
•Growing Families (oldest children in elementary school)
•Mature Families (oldest children in middle/high school)
•Empty Nesters (45-64 years old)
•Retirees (65+)
The purpose of this analysis is to identify where the most demand from homebuyers exists and define who the buyer will be.The
model provides a projection of total housing transaction activity by price point and life stage annually by filtering current
demographic information from the US Census’American Community Survey and projections from Economy.com and ESRI with
historic new home versus existing home and home ownership ratios.The output is then compared for reasonableness with recent
closing activity by area studied as reported by DataQuick.
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February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Demand Model
To understand the demand potential for Millenia,we estimated new home demand for the South County Area,using the model below,
which starts with expected household growth and turnover by income category,and then filters out those that plan to own a home
(versus rent)and those that plan to purchase a new home (versus a resale).This model was repeated for each year through 2020.
AVERAGE NEW HOME DEMAND FROM 2016 THRU 2020 (SOUTH SAN DIEGO COUNTY)
Demand Generated by Household Growth Demand Generated From Turnover of Existing HH
Income Ranges $35 - $50K $50 - $75K $75 - $100K $100 - $150K $150 - $200K $200K+$200K+$150 - $200K $100 - $150K $75 - $100K $50 - $75K $35 - $50K Income Ranges
Distribution of Households by Income Range 2/13.2%15.7%13.9%17.5%7.6%4.5%4.5%7.6%17.5%13.9%15.7%13.2%Distribution of Households by Income Range 2/
Annual Income Qualified Household Growth 304 363 322 404 176 103 538 917 2,112 1,680 1,897 1,586 Annual Income Qualified Turnover Households
% of Households Purchasing a Home 3/45.3%46.5%67.8%83.1%84.7%84.7%84.7%84.7%83.1%67.8%46.5%45.3%% of Households Purchasing a Home 3/
0.0%0.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%0.0%0.0%
Annual Homebuyer Household Growth 0 0 218 336 149 87 456 776 1,754 1,140 0 0 Annual Homebuyer Turnover Households
Annual Demand from New HH Growth 0 0 33 51 23 13 69 118 267 173 0 0 Annual Demand from Existing HH Turnover
91Total New Home Demand
Primary / Secondary / Investor 0 0 227 349 155
Footnotes
Secondary/Investor
Home Demand 10%
Secondary/Investor New Home Demand 0 0 21 32 14 8
$200K+
Primary New Home Demand 0 0 206 318 141 83
Income Ranges $35 - $50K $50 - $75K $75 - $100K $100 - $150K $150 - $200K
Annual Projected
New Household Growth 1/2,307 12,046 Annual Turnover
Households
Percent of Households
That Purchase a New Home 4/15.2%15.2% Percent of Households
Purchasing a Home 3/
1/ Estimated annual household growth for the area (Per Economy.com with Meyers Research adjustments)
2/ Percentage of households in the study area earning the income range indicated for each column (Per ESRI)
3/ Meyers extrapolation of the average ownership rate by income in the Market per the American Community
Survey
4/ Based on Meyers extrapolation of new versus existing home sales in the study area.
5/ Projected total existing households in the study area (Per Economy.com)
6/ Meyers extrapolation of the American Community Survey data for the average turnover of existing owner
occupied households in the local Market
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February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Demand Projection: (2016 to 2020)
Our model indicates demand by age and income,as well as implied home price.This projection indicates that in the South County
Area,new home demand is expected to range from 727 to 870 units in 2016-2020 (+/-480 new units sold in 2015),with peak demand
in 2018.This demand projecting assumes household patterns and market capture starting with current levels.A market like South
County –with some of the only near-term developable land in the region –can actually attract more demand depending on
product offered (so market capture could actually exceed these levels if more housing is offered).
Over the next five years,the projected average demand of 470 new for-sale units per year is largely focused in the young family,
growing family and empty nester households.
2016 2017 2018 2019 2020
0
100
200
300
400
Hypothetical New Home Demand by Year and LifeStage
Young Families Growing Families Mature Families Couples
Over 45
Singles Empty
Nester
Retirees
727
818
870 857
835
650
700
750
800
850
900
2016 2017 2018 2019 2020
Hypothetical New Home Demand by Year
110
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Demand By Age & Income: (2016 to 2020)
When drilling down to demand by age &household income level,the projected annual demand is focused in the 25 to 64 age
categories (particularly the 35 to 54 age ranges)and in the $75,000 to $150,000 household income categories,implying home
prices ranging from the mid $300,000s to the mid $700,000s.
▬ 2016 to 2020 Avg Demand by Home Price Range ▬Demand
Annual Household
Income Range
HH by
Income
% of Total
HH
Home Price
Purchase Range*
2016 to
2020
% of
Annual
Demand
Income $75,000 - $99,999 21,288 13.9%$350,000 to $500,000 227 28%
Income $100,000 - $149,999 26,767 17.5%$500,000 to $750,000 349 42%
Income $150,000 - $199,999 11,619 7.6%$750,000 to $1,025,000 155 19%
Income $200,000 +6,823 4.5%$1,025,000 or Greater 91 11%
Average Demand ($75K+)66,496 43.6%$350,000 +-822 100%
▬ Demand by Age and Income (Absolute Numbers) ▬
Under
25
25 to
34
35 to
44
45 to
54
55 to
64
65 to
74
75 &
Greater
4 40 49 52 45 22 15
5 61 89 84 67 29 14
1 23 42 45 29 12 3
0 9 24 28 19 8 1
11 133 204 209 160 72 33
111
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Demand By LifeStage: (2016 to 2020)
When looking at demand by life stage,the demand is actually quite diverse,with significant demand from all life stage categories,but
particularly Family Households (of all ages)and Empty Nesters.While South County is typically been seen as a “young,
affordable family”location,this actually suggests a good demand potential for move-down housing products to suit the
needs of move-down households.
Working from an average demand in South San Diego County of +/-820 units/year,43%of annual demand is from Families,24%is
from Couples Over 45 and Singles and 32%of annual demand (261 units)is from Empty Nesters and Retirees.With no actual new
55+housing product other than Auberge at Del Sur (almost sold out and aimed at higher income buyers in North County)
being developed in San Diego County specifically targeted to move-down households,this is a big market void for homes
targeted to move-down buyers,particularly in the south half of the County.It is interesting to note that some initial buyers
▬ 2016 to 2020 Avg Demand by Home Price Range ▬Demand
Annual Household
Income Range
HH by
Income
% of Total
HH
Home Price
Purchase Range*
2016 to
2020
% of
Annual
Demand
Income $75,000 - $99,999 21,288 13.9%$350,000 to $500,000 227 28%
Income $100,000 - $149,999 26,767 17.5%$500,000 to $750,000 349 42%
Income $150,000 - $199,999 11,619 7.6%$750,000 to $1,025,000 155 19%
Income $200,000 +6,823 4.5%$1,025,000 or Greater 91 11%
Average Demand ($75K+)66,496 43.6%$350,000 +-822 100%
▬ Demand by LifeStage (Absolute Numbers) ▬
Young
Families
Growing
Families
Mature
Families
Couples
Over 45 Singles Empty
Nester Retirees
34 32 27 23 31 42 37
56 55 42 38 51 64 43
24 27 21 16 22 30 16
12 16 13 8 12 19 9
126 131 103 84 116 156 105
112
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Demand by Price Point and LifeStage
This illustrates how demand in the market is expected to steadily increase over the next couple of years,the price points the
households can afford,and the distribution by age of the heads of households.The demand focus indicates a demand for residential
products priced in the mid $300,000s to mid $700,000s (although there is demand for homes priced higher and lower).
0
50
100
150
200
250
300
350
400
2016 2017 2018 2019 2020
Hypothetical New Home Demand by Price Point
$350k to $500k $500k to $750k $750k to $1.0M $1.0M+
0
50
100
150
200
250
2016 2017 2018 2019 2020
Hypothetical New Home Demand by Year and Age
Under
25
25 to
34
35 to
44
45 to
54
55 to
64
65 to
74
75 &
Greater
113
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Appendix
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February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Project Detail: Millenia, Ocean View Hills Attached
COMMUNITY SPECIFICS AND SALES PACE FLOORPLAN SUMMARY COMPETITIVE MARKET PRICING SUMMARY
Project Name Builder Name Base Current Incentives Net Base Net Base Typical Total Monthly Payment Inputs 80.0%
Location Master Plan Size Base Price/Price Options /Closing $ /Price ($Price/Options /Total Price/Monthly Base Addl 4.0%
Product Details Sales Summary SF Bed Bath Level Pkg Price Sq. Ft.Reduction Upgrades Other Reduction)Sq. Ft.Upgrades Premiums Price SF HOA Tax Taxes Mo.Pmt.
Metro Meridian Communities 1,298 2 2.5 2 2 $390,000 $300 $0 $0 ($5,000)$390,000 $300 $12,000 $0 $402,000 $310 $299 1.10%0.45%$2,250
Chula Vista Millenia 1,384 3 2.5 2 2 $412,000 $298 $0 $0 ($5,000)$412,000 $298 $12,000 $0 $424,000 $306 $299 1.10%0.45%$2,357
Product:Attached Total Units:70 1,495 3 2.5 2 2 $429,000 $287 $0 $0 ($5,000)$429,000 $287 $12,000 $0 $441,000 $295 $299 1.10%0.45%$2,439
Configuration:ATT Units Sold:36 1,964 3 2.5 3 2 $465,000 $237 $0 $0 ($5,000)$465,000 $237 $12,000 $0 $477,000 $243 $299 1.10%0.45%$2,614
ATT 3 Months Sold:1 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Aug-16 Units Remaining:36 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:2.3 % Remaining:50%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:3.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,535 $424,000 $276 $0 $0 ($5,000)$424,000 $276 $12,000 $0 $436,000 $284 $299 1.10%0.45%$2,415
Trio Meridian Communities 1,653 3 2.5 2 2 $451,000 $273 $0 $0 ($5,000)$451,000 $273 $15,000 $0 $466,000 $282 $299 1.10%0.45%$2,560
Chula Vista Millenia 1,662 3 2.5 2 2 $468,000 $282 $0 $0 ($5,000)$468,000 $282 $15,000 $0 $483,000 $291 $299 1.10%0.45%$2,643
Product:Attached Total Units:81 1,880 4 3.0 2 2 $499,000 $265 $0 $0 ($5,000)$499,000 $265 $15,000 $0 $514,000 $273 $299 1.10%0.45%$2,793
Configuration:ATT Units Sold:34 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
ATT 3 Months Sold:7 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Aug-16 Units Remaining:37 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:1.8 % Remaining:56%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:2.0 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,732 $472,667 $273 $0 $0 ($5,000)$472,667 $273 $15,000 $0 $487,667 $282 $299 1.10%0.45%$2,665
Evo Meridian Communities 1,687 4 2.5 2 2 $454,000 $269 $0 $0 ($5,000)$454,000 $269 $18,000 $0 $472,000 $280 $299 1.10%0.45%$2,589
Chula Vista Millenia 1,827 4 3.0 2 2 $485,000 $265 $0 $0 ($5,000)$485,000 $265 $18,000 $0 $503,000 $275 $299 1.10%0.45%$2,740
Product:Attached Total Units:66 1,958 3 2.0 3 2 $531,000 $271 $0 $0 ($5,000)$531,000 $271 $18,000 $0 $549,000 $280 $299 1.10%0.45%$2,963
Configuration:ATT Units Sold:47 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
ATT 3 Months Sold:11 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Aug-16 Units Remaining:26 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:2.5 % Remaining:39%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:2.0 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,824 $490,000 $269 $0 $0 ($5,000)$490,000 $269 $18,000 $0 $508,000 $279 $299 1.10%0.45%$2,764
Azul at Playa Del Sol Pardee Homes 1,442 3 2.5 2 2 $401,000 $278 $0 $0 ($5,000)$401,000 $278 $20,000 $0 $421,000 $292 $275 1.20%0.36%$2,321
San Diego Ocean View Hills 1,626 3 3.5 3 2 $429,000 $264 $0 $0 ($5,000)$429,000 $264 $20,000 $0 $449,000 $276 $275 1.20%0.36%$2,457
Product:Attached Total Units:121 1,857 4 3.5 3 2 $440,000 $237 $0 $0 ($5,000)$440,000 $237 $20,000 $0 $460,000 $248 $275 1.20%0.36%$2,510
Configuration:ATT Units Sold:110 2,034 4 3.5 3 2 $484,000 $238 $0 $0 ($5,000)$484,000 $238 $20,000 $0 $504,000 $248 $275 1.20%0.36%$2,724
ATT 3 Months Sold:11 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Dec-16 Units Remaining:18 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:8.3 % Remaining:15%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:10.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,740 $438,500 $252 $0 $0 ($5,000)$438,500 $252 $20,000 $0 $458,500 $264 $275 1.20%0.36%$2,503
Luna at Playa Del Sol Pardee Homes 1,643 3 3.0 3 2 $418,000 $254 $0 $0 ($5,000)$418,000 $254 $12,500 $0 $430,500 $262 $275 1.20%0.36%$2,367
San Diego Ocean View Hills 1,768 4 4.0 3 2 $425,000 $240 $0 $0 ($5,000)$425,000 $240 $12,500 $0 $437,500 $247 $275 1.20%0.36%$2,401
Product:Attached Total Units:96 1,769 3 3.0 3 2 $445,000 $252 $0 $0 ($5,000)$445,000 $252 $12,500 $0 $457,500 $259 $275 1.20%0.36%$2,498
Configuration:ATT Units Sold:93 1,831 3 3.5 3 2 $459,000 $251 $0 $0 ($5,000)$459,000 $251 $12,500 $0 $471,500 $258 $275 1.20%0.36%$2,566
ATT 3 Months Sold:3 1,851 4 3.0 3 2 $459,000 $248 $0 $0 ($5,000)$459,000 $248 $12,500 $0 $471,500 $255 $275 1.20%0.36%$2,566
Sales Open Date:Dec-16 Units Remaining:2 2,069 4 3.0 3 2 $540,000 $261 $0 $0 ($5,000)$540,000 $261 $12,500 $0 $552,500 $267 $275 1.20%0.36%$2,960
Overall Sales Rate:7.8 % Remaining:2%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:3.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,822 $457,667 $251 $0 $0 ($5,000)$457,667 $251 $12,500 $0 $470,167 $258 $275 1.20%0.36%$2,560
115
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Project Detail: Otay Ranch Attached
COMMUNITY SPECIFICS AND SALES PACE FLOORPLAN SUMMARY COMPETITIVE MARKET PRICING SUMMARY
Project Name Builder Name Base Current Incentives Net Base Net Base Typical Total Monthly Payment Inputs 80.0%
Location Master Plan Size Base Price/Price Options /Closing $ /Price ($Price/Options /Total Price/Monthly Base Addl 4.0%
Product Details Sales Summary SF Bed Bath Level Pkg Price Sq. Ft.Reduction Upgrades Other Reduction)Sq. Ft.Upgrades Premiums Price SF HOA Tax Taxes Mo.Pmt.
Parc Place Pacific Coast Communities 1,116 2 2.0 2 1 $357,900 $321 $0 $0 ($5,000)$357,900 $321 $15,000 $0 $372,900 $334 $285 1.20%0.80%$2,206
Chula Vista Otay Ranch 1,583 2 2.5 2 1 $399,900 $253 $0 $0 ($5,000)$399,900 $253 $15,000 $0 $414,900 $262 $285 1.20%0.80%$2,423
Product:Attached Total Units:175 1,587 2 2.5 2 2 $421,900 $266 $0 $0 ($5,000)$421,900 $266 $15,000 $0 $436,900 $275 $285 1.20%0.80%$2,536
Configuration:ATT Units Sold:36 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
ATT 3 Months Sold:10 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Mar-17 Units Remaining:139 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:4.1 % Remaining:79%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:4.3 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,429 $393,233 $275 $0 $0 ($5,000)$393,233 $275 $15,000 $0 $408,233 $286 $285 1.20%0.80%$2,388
Lovina Heritage Building and Deve 1,561 3 2.5 2 2 $420,900 $270 $0 $0 ($5,000)$420,900 $270 $12,500 $0 $433,400 $278 $240 1.20%0.80%$2,473
Chula Vista Otay Ranch 1,614 3 2.5 2 2 $438,900 $272 $0 $0 ($5,000)$438,900 $272 $12,500 $0 $451,400 $280 $240 1.20%0.80%$2,566
Product:Attached Total Units:78 1,734 3 2.5 2 2 $458,900 $265 $0 $0 ($5,000)$458,900 $265 $12,500 $0 $471,400 $272 $240 1.20%0.80%$2,669
Configuration:ATT Units Sold:44 2,189 4 3.5 3 2 $485,900 $222 $0 $0 ($5,000)$485,900 $222 $12,500 $0 $498,400 $228 $240 1.20%0.80%$2,808
ATT 3 Months Sold:7 2,341 5 3.5 3 2 $497,900 $213 $0 $0 ($5,000)$497,900 $213 $12,500 $0 $510,400 $218 $240 1.20%0.80%$2,870
Sales Open Date:Mar-17 Units Remaining:39 2,476 6 3.5 3 2 $517,900 $209 $0 $0 ($5,000)$517,900 $209 $12,500 $0 $530,400 $214 $240 1.20%0.80%$2,973
Overall Sales Rate:4.2 % Remaining:50%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:2.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,986 $470,067 $237 $0 $0 ($5,000)$470,067 $237 $12,500 $0 $482,567 $243 $240 1.20%0.80%$2,726
Aviare Sunrise Company 1,098 2 2.0 2 1 $366,900 $334 $0 $0 ($5,000)$366,900 $334 $15,000 $0 $381,900 $348 $385 1.20%0.80%$2,353
Chula Vista Otay Ranch 1,395 3 2.5 2 2 $404,900 $290 $0 $0 ($5,000)$404,900 $290 $15,000 $0 $419,900 $301 $385 1.20%0.80%$2,549
Product:Attached Total Units:171 1,431 3 2.5 2 2 $406,900 $284 $0 $0 ($5,000)$406,900 $284 $15,000 $0 $421,900 $295 $385 1.20%0.80%$2,559
Configuration:ATT Units Sold:170 1,504 2 2.5 3 1 $426,900 $284 $0 $0 ($5,000)$426,900 $284 $15,000 $0 $441,900 $294 $385 1.20%0.80%$2,662
ATT 3 Months Sold:4 1,719 3 2.5 3 2 $424,900 $247 $0 $0 ($5,000)$424,900 $247 $15,000 $0 $439,900 $256 $385 1.20%0.80%$2,652
Sales Open Date:Jul-14 Units Remaining:3 1,778 3 2.5 3 2 $429,900 $242 $0 $0 ($5,000)$429,900 $242 $15,000 $0 $444,900 $250 $385 1.20%0.80%$2,677
Overall Sales Rate:4.1 % Remaining:2%1,882 4 3.5 3 2 $484,900 $258 $0 $0 ($5,000)$484,900 $258 $15,000 $0 $499,900 $266 $385 1.20%0.80%$2,961
3 Mon. Sales Rate:3.7 -1,928 3 3.5 3 2 $498,900 $259 $0 $0 ($5,000)$498,900 $259 $15,000 $0 $513,900 $267 $385 1.20%0.80%$3,033
Totals/Averages:1,592 $430,525 $270 $0 $0 ($5,000)$430,525 $270 $15,000 $0 $445,525 $280 $385 1.20%0.80%$2,681
Tosara II Pacific Coast Communities 1,635 3 2.5 2 2 $394,900 $242 $0 $0 ($5,000)$394,900 $242 $30,000 $5,000 $429,900 $263 $253 1.20%0.80%$2,468
Chula Vista Otay Ranch 2,342 4 3.5 3 2 $443,900 $190 $0 $0 ($5,000)$443,900 $190 $30,000 $5,000 $478,900 $204 $253 1.20%0.80%$2,721
Product:Attached Total Units:99 2,366 4 3.5 3 2 $451,900 $191 $0 $0 ($5,000)$451,900 $191 $30,000 $5,000 $486,900 $206 $253 1.20%0.80%$2,762
Configuration:ATT Units Sold:74 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
ATT 3 Months Sold:0 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Aug-14 Units Remaining:74 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:2.4 % Remaining:43%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:0.0 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:2,114 $430,233 $203 $0 $0 ($5,000)$430,233 $203 $30,000 $5,000 $465,233 $220 $253 1.20%0.80%$2,650
116
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Project Detail: Otay Ranch Cluster and SFD
COMMUNITY SPECIFICS AND SALES PACE FLOORPLAN SUMMARY COMPETITIVE MARKET PRICING SUMMARY
Project Name Builder Name Base Current Incentives Net Base Net Base Typical Total Monthly Payment Inputs 80.0%
Location Master Plan Size Base Price/Price Options /Closing $ /Price ($Price/Options /Total Price/Monthly Base Addl 4.0%
Product Details Sales Summary SF Bed Bath Level Pkg Price Sq. Ft.Reduction Upgrades Other Reduction)Sq. Ft.Upgrades Premiums Price SF HOA Tax Taxes Mo.Pmt.
Signature Heritage Building and Deve 3,340 3 3.5 2 3 $728,900 $218 $0 $0 ($5,000)$728,900 $218 $36,445 $0 $765,345 $229 $48 1.20%0.80%$3,992
Chula Vista Otay Ranch 3,491 4 3.5 2 3 $740,900 $212 $0 $0 ($5,000)$740,900 $212 $37,045 $0 $777,945 $223 $48 1.20%0.80%$4,056
Product:Single Family Total Units:79 3,611 4 3.5 2 2 $758,900 $210 $0 $0 ($5,000)$758,900 $210 $37,945 $0 $796,845 $221 $48 1.20%0.80%$4,154
Configuration:5,000 Units Sold:23 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:50x100 3 Months Sold:8 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:58 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:3.1 % Remaining:73%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:2.0 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:3,481 $742,900 $213 $0 $0 ($5,000)$742,900 $213 $37,145 $0 $780,045 $224 $48 1.20%0.80%$4,067
Cantamar Pacific Coast Communities 2,631 3 2.5 2 2 $657,900 $250 $0 $0 ($10,000)$657,900 $250 $0 $0 $657,900 $250 $48 1.20%0.80%$3,438
Chula Vista Otay Ranch 2,776 4 3.0 2 2 $672,900 $242 $0 $0 ($10,000)$672,900 $242 $0 $0 $672,900 $242 $48 1.20%0.80%$3,515
Product:Single Family Total Units:93 2,896 5 3.0 2 2 $702,900 $243 $0 $0 ($10,000)$702,900 $243 $0 $0 $702,900 $243 $48 1.20%0.80%$3,670
Configuration:5,000 Units Sold:8 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
-3 Months Sold:8 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Oct-17 Units Remaining:89 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:2.7 % Remaining:96%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:2.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:2,768 $677,900 $245 $0 $0 ($10,000)$677,900 $245 $0 $0 $677,900 $245 $48 1.20%0.80%$3,541
Monte Villa Pacific Coast Communities 2,594 4 3.5 3 2 $553,900 $214 $0 $0 ($5,000)$553,900 $214 $27,695 $0 $581,595 $224 $48 1.20%0.80%$3,045
Chula Vista Otay Ranch 2,833 4 4.0 3 2 $576,900 $204 $0 $0 ($5,000)$576,900 $204 $28,845 $0 $605,745 $214 $48 1.20%0.80%$3,169
Product:Single Family Total Units:72 3,016 5 4.0 3 2 $602,900 $200 $0 $0 ($5,000)$602,900 $200 $30,145 $0 $633,045 $210 $48 1.20%0.80%$3,310
Configuration:3,053 Units Sold:23 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
-3 Months Sold:6 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Mar-17 Units Remaining:52 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:2.3 % Remaining:72%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:2.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:2,814 $577,900 $205 $0 $0 ($5,000)$577,900 $205 $28,895 $0 $606,795 $216 $48 1.20%0.80%$3,175
Aventine Cornerstone Communities 2,014 4 2.5 2 2 $521,990 $259 $0 $0 ($5,000)$521,990 $259 $26,100 $0 $548,090 $272 $160 1.20%0.80%$2,984
Chula Vista Otay Ranch 2,177 5 3.0 2 2 $541,990 $249 $0 $0 ($5,000)$541,990 $249 $27,100 $0 $569,090 $261 $160 1.20%0.80%$3,092
Product:Single Family Total Units:100 2,438 5 3.5 2 2 $587,990 $241 $0 $0 ($5,000)$587,990 $241 $29,400 $0 $617,390 $253 $160 1.20%0.80%$3,341
Configuration:2,975 Units Sold:10 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:35x85 3 Months Sold:6 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Oct-17 Units Remaining:95 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:1.9 % Remaining:95%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:1.9 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:2,210 $550,657 $249 $0 $0 ($5,000)$550,657 $249 $27,533 $0 $578,190 $262 $160 1.20%0.80%$3,139
117
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Project Detail: Escaya Cluster and Attached
COMMUNITY SPECIFICS AND SALES PACE FLOORPLAN SUMMARY COMPETITIVE MARKET PRICING SUMMARY
Project Name Builder Name Base Current Incentives Net Base Net Base Typical Total Monthly Payment Inputs 80.0%
Location Master Plan Size Base Price/Price Options /Closing $ /Price ($Price/Options /Total Price/Monthly Base Addl 4.0%
Product Details Sales Summary SF Bed Bath Level Pkg Price Sq. Ft.Reduction Upgrades Other Reduction)Sq. Ft.Upgrades Premiums Price SF HOA Tax Taxes Mo.Pmt.
Flora at Escaya Brookfield Residential 1,278 3 2.5 2 2 $371,000 $290 $0 ($2,500)($5,500)$371,000 $290 $15,000 $0 $383,500 $300 $358 1.20%0.80%$2,334
Chula Vista Escaya at Otay Ranch 1,495 3 2.5 2 2 $394,000 $264 $0 ($2,500)($5,500)$394,000 $264 $15,000 $0 $406,500 $272 $358 1.20%0.80%$2,453
Product:Attached Total Units:107 1,710 3 2.5 2 2 $438,000 $256 $0 ($2,500)($5,500)$438,000 $256 $15,000 $0 $450,500 $263 $358 1.20%0.80%$2,679
Configuration:ATT Units Sold:12 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
ATT 3 Months Sold:5 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Sep-17 Units Remaining:98 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:2.6 % Remaining:92%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:3.0 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,494 $401,000 $268 $0 ($2,500)($5,500)$401,000 $268 $15,000 $0 $413,500 $277 $358 1.20%0.80%$2,489
Strata at Escaya Shea Homes 1,407 3 2.0 3 2 $387,000 $275 $0 $0 ($5,000)$387,000 $275 $15,000 $0 $402,000 $286 $385 1.20%0.80%$2,456
Chula Vista Escaya at Otay Ranch 1,681 3 3.0 3 2 $451,000 $268 $0 $0 ($5,000)$451,000 $268 $15,000 $0 $466,000 $277 $385 1.20%0.80%$2,786
Product:Attached Total Units:72 1,736 4 3.0 3 2 $469,000 $270 $0 $0 ($5,000)$469,000 $270 $15,000 $0 $484,000 $279 $385 1.20%0.80%$2,879
Configuration:ATT Units Sold:15 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
ATT 3 Months Sold:7 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:59 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:1.9 % Remaining:82%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:4.3 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,608 $435,667 $271 $0 $0 ($5,000)$435,667 $271 $15,000 $0 $450,667 $280 $385 1.20%0.80%$2,707
Indigo at Escaya CalAtlantic Homes 1,950 4 3.0 2 2 $541,900 $278 $0 ($2,000)($5,000)$541,900 $278 $20,000 $4,700 $564,600 $290 $110 1.20%0.80%$3,019
Chula Vista Escaya at Otay Ranch 2,011 4 3.0 2 2 $569,900 $283 $0 ($2,000)($5,000)$569,900 $283 $20,000 $4,700 $592,600 $295 $110 1.20%0.80%$3,163
Product:Single Family Total Units:111 2,165 4 3.0 2 2 $585,900 $271 $0 ($2,000)($5,000)$585,900 $271 $20,000 $4,700 $608,600 $281 $110 1.20%0.80%$3,246
Configuration:2,940 Units Sold:28 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:42x70 3 Months Sold:3 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:83 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:4.2 % Remaining:75%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:3.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:2,042 $565,900 $277 $0 ($2,000)($5,000)$565,900 $277 $20,000 $4,700 $588,600 $288 $110 1.20%0.80%$3,143
Seville at Escaya Shea Homes 2,498 4 3.0 2 2 $621,000 $249 $0 $0 ($10,000)$621,000 $249 $25,000 $1,500 $647,500 $259 $108 1.20%0.80%$3,444
Chula Vista Escaya at Otay Ranch 2,788 4 3.5 2 2 $655,000 $235 $0 $0 ($10,000)$655,000 $235 $25,000 $1,500 $681,500 $244 $108 1.20%0.80%$3,620
Product:Single Family Total Units:135 2,949 4 3.5 2 2 $662,000 $224 $0 $0 ($10,000)$662,000 $224 $25,000 $1,500 $688,500 $233 $108 1.20%0.80%$3,656
Configuration:3,600 Units Sold:30 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:48x75 3 Months Sold:4 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:107 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:4.2 % Remaining:79%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:5.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:2,745 $646,000 $235 $0 $0 ($10,000)$646,000 $235 $25,000 $1,500 $672,500 $245 $108 1.20%0.80%$3,573
118
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
New Home Project Detail: Escaya SFD
COMMUNITY SPECIFICS AND SALES PACE FLOORPLAN SUMMARY COMPETITIVE MARKET PRICING SUMMARY
Project Name Builder Name Base Current Incentives Net Base Net Base Typical Total Monthly Payment Inputs 80.0%
Location Master Plan Size Base Price/Price Options /Closing $ /Price ($Price/Options /Total Price/Monthly Base Addl 4.0%
Product Details Sales Summary SF Bed Bath Level Pkg Price Sq. Ft.Reduction Upgrades Other Reduction)Sq. Ft.Upgrades Premiums Price SF HOA Tax Taxes Mo.Pmt.
Valencia at Escaya CalAtlantic Homes 1,988 4 3.0 2 2 $570,900 $287 $0 ($2,500)($5,500)$570,900 $287 $37,500 $5,000 $610,900 $307 $125 1.20%0.80%$3,273
Chula Vista Escaya at Otay Ranch 2,021 4 3.0 2 2 $563,900 $279 $0 ($2,500)($5,500)$563,900 $279 $37,500 $5,000 $603,900 $299 $125 1.20%0.80%$3,237
Product:Single Family Total Units:118 2,314 4 3.0 2 2 $610,900 $264 $0 ($2,500)($5,500)$610,900 $264 $37,500 $5,000 $650,900 $281 $125 1.20%0.80%$3,479
Configuration:2,728 Units Sold:29 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:44x62 3 Months Sold:4 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:90 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:4.2 % Remaining:76%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:2.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:2,108 $581,900 $276 $0 ($2,500)($5,500)$581,900 $276 $37,500 $5,000 $621,900 $295 $125 1.20%0.80%$3,329
Sierra at Escaya Shea Homes 1,833 3 2.5 2 2 $516,000 $281 $0 $0 ($7,000)$516,000 $281 $25,000 $3,000 $544,000 $297 $108 1.20%0.80%$2,911
Chula Vista Escaya at Otay Ranch 1,899 4 3.0 2 2 $530,000 $279 $0 $0 ($7,000)$530,000 $279 $25,000 $3,000 $558,000 $294 $108 1.20%0.80%$2,983
Product:Single Family Total Units:122 2,179 4 3.0 2 2 $553,000 $254 $0 $0 ($7,000)$553,000 $254 $25,000 $3,000 $581,000 $267 $108 1.20%0.80%$3,102
Configuration:2,900 Units Sold:33 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:34x79 3 Months Sold:9 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:90 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:4.8 % Remaining:74%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:4.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:1,970 $533,000 $271 $0 $0 ($7,000)$533,000 $271 $25,000 $3,000 $561,000 $285 $108 1.20%0.80%$2,999
Prado at Escaya Brookfield Residential 2,289 4 3.0 2 2 $587,000 $256 $0 $0 ($8,000)$587,000 $256 $25,000 $3,000 $615,000 $269 $125 1.20%0.80%$3,294
Chula Vista Escaya at Otay Ranch 2,392 4 3.0 2 2 $599,000 $250 $0 $0 ($8,000)$599,000 $250 $25,000 $3,000 $627,000 $262 $125 1.20%0.80%$3,356
Product:Single Family Total Units:130 2,569 4 3.5 2 2 $618,000 $241 $0 $0 ($8,000)$618,000 $241 $25,000 $3,000 $646,000 $251 $125 1.20%0.80%$3,454
Configuration:3,120 Units Sold:28 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:48x65 3 Months Sold:4 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:102 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:4.2 % Remaining:78%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:4.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:2,417 $601,333 $249 $0 $0 ($8,000)$601,333 $249 $25,000 $3,000 $629,333 $260 $125 1.20%0.80%$3,368
Castellena at Escaya CalAtlantic Homes 2,902 4 3.0 2 2 $675,900 $233 $0 ($5,000)($5,000)$675,900 $233 $45,000 $5,000 $720,900 $248 $125 1.20%0.80%$3,840
Chula Vista Escaya at Otay Ranch 2,986 4 3.0 2 3 $699,900 $234 $0 ($5,000)($5,000)$699,900 $234 $45,000 $5,000 $744,900 $249 $125 1.20%0.80%$3,963
Product:Single Family Total Units:76 3,176 4 3.0 2 3 $741,900 $234 $0 ($5,000)($5,000)$741,900 $234 $45,000 $5,000 $786,900 $248 $125 1.20%0.80%$4,180
Configuration:4,500 Units Sold:16 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:50x90 3 Months Sold:3 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:64 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:1.8 % Remaining:84%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:0.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:3,021 $705,900 $234 $0 ($5,000)($5,000)$705,900 $234 $45,000 $5,000 $750,900 $249 $125 1.20%0.80%$3,994
Haciendas at Escaya Brookfield Residential 3,138 4 3.5 2 3 $696,000 $222 $0 $0 ($8,000)$696,000 $222 $45,000 $5,000 $746,000 $238 $125 1.20%0.80%$3,969
Chula Vista Escaya at Otay Ranch 3,401 5 3.5 2 3 $727,000 $214 $0 $0 ($8,000)$727,000 $214 $45,000 $5,000 $777,000 $228 $125 1.20%0.80%$4,129
Product:Single Family Total Units:76 3,704 5 4.5 2 3 $749,000 $202 $0 $0 ($8,000)$749,000 $202 $45,000 $5,000 $799,000 $216 $125 1.20%0.80%$4,242
Configuration:4,950 Units Sold:24 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Lot Dimensions:55x90 3 Months Sold:6 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Sales Open Date:Jun-17 Units Remaining:53 #N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Overall Sales Rate:3.4 % Remaining:70%#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
3 Mon. Sales Rate:3.7 -#N/A #################N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Totals/Averages:3,414 $724,000 $212 $0 $0 ($8,000)$724,000 $212 $45,000 $5,000 $774,000 $227 $125 1.20%0.80%$4,113
February 2018 | City of Chula Vista
Millenia Master Plan, Chula Vista, CA
MARKET ABSORPTION ANALYSIS
Chula Vista CFD 16-I (Millenia IA No. 1)
February 2018 | City of Chula Vista
Millenia Master Plan, Chula Vista, CA
MARKET ABSORPTION ANALYSISExecutive Summary
Chula Vista CFD 16-I (Millenia IA No. 1)
2
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Overall Conclusions
3
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Boundaries of CFD No. 16-I (Millenia, Improvement Area No. 1)
The Millenia master plan is actively in development,with residential,rental,retail and commercial developments underway.The areas
that are included in Improvement Area No.1 are noted below,with Residential areas market with a RED star and Commercial areas
marked with a BLUE star.
4
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Residential and Office Absorption Summary
Our research indicates that the buildout and absorption of +/-393 planned residential units within Improvement Area No.1 of Millenia
could occur by early 2021,as shown on the table below (the numbers shown for 2016 and 2017 are actual sales,the 2018+
numbers are projected).
The first phase of the Millenia office project is expected to start construction in October 2018,with estimated completion in January
2020.The office absorption projection outlined below includes 2 years of pre-leasing in 2018-2019.Our conclusion is that the
1,018,000 square feet of office planned in Improvement Area No.1 of Millenia could be pre-leased/absorbed in the 2018-2029
period and that pre-leased space will start to be occupied in early 2020 when the first office building completion is projected.
YEAR
Residential
Units Office SF
2016 7
2017 77
2018 114 77,197
2019 107 77,197
2020 76 77,197
2021 12 77,197
2022 77,197
2023 90,225
2024 90,225
2025 90,225
2026 90,225
2027 93,295
2028 93,295
2029 84,525
TOTAL 393 1,018,000
5
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Residential Market Analysis
6
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Key Findings
The Millenia master plan is an active mixed-use project in the South County submarket of San Diego County.Improvement Area No.
1 comprises a portion of the Millenia master planned community that is expected to include over 2,500 for-sale and rental units and
over 1.8 million square feet of commercial space at buildout.The Improvement Area No.1 development will consist of 393 residential
units and just over 1.0 million square feet of office in the “Think”(318,000 SF)and “Invent”(700,000 SF)projects.Of the 393
Millenia residential units that are included in Improvement Area No.1,at the end of January 2018 120 units had been
released with 98 units sold and 53 units closed escrow.
The sale of for-sale products in the overall Millenia master plan started in mid 2016 with +/-217 units at Evo,Metro and Trio (which
are not included in Improvement Area No.1)and additional projects by Shea Homes,KB Home and CalAtlantic/Lennar in
Improvement Area No.1 (sales have started for the Shea and KB Home projects and the CalAtlantic/Lennar project will start sales
later in 2018).There are also completed and in-development rental projects (market-rate and affordable),a hotel and retail
development in Millenia (but not in Improvement Area No.1).A significant office project is planned in Improvement Area No.1,with
campus office space targeted to the technology,life sciences and medical sectors.
The Millenia project is elevated and offers views of the surrounding area,mountains and distant lake/ocean.Some areas of the site
will offer orientations to canyon and open space areas.Millenia is located right off a major north-south freeway (the 125 Toll Road)
and is close to a wide array of existing services,retail,schools,parks,etc.
There is good demand potential in the South County market for ownership housing options,particularly those targeted to family
households of all ages and to empty nester/retirees.South County new home sales increased in 2017 to +/-1,000 units per year and
market capture of County new home sales jumped to 30%.Going forward,South County,which has in the past decade had more
active home building operations,is likely to see increased development and market capture in a region with quite limited residential
land options elsewhere.The majority of active new homes are selling in the $300,000 to $700,000 price categories that are largely
unavailable elsewhere in the region and new projects are selling well.
Development of the 393 residential units in the Improvement Area No.1 began in late 2016 and 84 units had sold by the end of 2017
(and 98 units had sold at the end of January 2018).The remaining units in Improvement Area No.1 are projected to be largely
absorbed by early 2021,with current pricing ranging from the high $300,000s to the mid $600,000s.
7
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia IA No. 1 Product Array
The detailed floorplan pricing for the Millenia Improvement Area IA No.1 product array is outlined below.For the active projects (Z,
Element and Skylar)–the pricing is based on actual sales prices offered by the respective builders.For the upcoming Boulevard
project,pricing indicated is our projection based on the other market comparables in Millenia and the overall South County market.
COMMUNITY SPECIFICS FLOORPLANS ACTUAL/EXPECTED PRICING
Subject Property Name Mo Base Incentives Net Base Net Base Assumptions Total Payment Assumptions 80.0%
Location Size Sales Base Price/Options /Price Price ($Price/Options /Estimated Total Price/Monthly Base Addl Tax 4.0%
Product Details Sales Summary Mix SF Bed Bath Level Pkg Pace Price SF Upgrades Reduction Impacting)SF Upgrades Premiums Price SF HOA Tax Rate Assess.Mo. Pmt.
Z at Millenia Shea Homes 14 1,288 2 2.5 3 2 3.5 $386,000 $300 $0 $0 $386,000 $300 $15,000 $0 $401,000 $311 $327 1.14%0.75%$2,364
Chula Vista Millenia 44 1,430 3 2.5 3 2 $409,000 $286 $0 $0 $409,000 $286 $15,000 $0 $424,000 $297 $327 1.14%0.75%$2,481
Product:Townhomes Total Units:106 48 1,475 2 2.5 3 2 $426,000 $289 $0 $0 $426,000 $289 $15,000 $0 $441,000 $299 $327 1.14%0.75%$2,567
Configuration:ATT Units Sold:41
Lot Dimensions:ATT 3 Months Sold:7
Lot 9 Units Remaining:65
% Remaining:61%
Summary Statistics:1,432 3.5 $413,660 $289 $0 $0 $413,660 $289 $15,000 $0 $428,660 $299 $327 1.14%0.75%$2,504
Element at Millenia Shea Homes 18 1,775 2 2.5 3 2 3.5 $498,000 $281 $0 $0 $498,000 $281 $20,000 $10,000 $528,000 $297 $210 1.14%0.75%$2,892
Chula Vista Millenia 16 1,915 3 3.5 3 2 $523,000 $273 $0 $0 $523,000 $273 $20,000 $10,000 $553,000 $289 $210 1.14%0.75%$3,019
Product:Single Family Total Units:70 18 2,157 3 3.5 3 2 $554,246 $257 $0 $0 $554,246 $257 $20,000 $10,000 $584,246 $271 $210 1.14%0.75%$3,178
Configuration:2,000 Units Sold:48 18 2,248 4 3.5 3 2 $587,000 $261 $0 $0 $587,000 $261 $20,000 $10,000 $617,000 $274 $210 1.14%0.75%$3,344
Lot Dimensions:n/a 3 Months Sold:0
Lot 9 Units Remaining:22
% Remaining:31%
Summary Statistics:2,027 3.5 $541,063 $267 $0 $0 $541,063 $267 $20,000 $10,000 $571,063 $282 $210 1.14%0.75%$3,111
Skylar at Millenia KB Home 39 2,602 3 3.5 3 2 2.5 $596,490 $229 $0 $0 $596,490 $229 $35,000 $7,500 $638,990 $246 $146 1.14%0.75%$3,392
Chula Vista Millenia 40 2,659 3 3.5 3 2 $613,490 $231 $0 $0 $613,490 $231 $35,000 $7,500 $655,990 $247 $146 1.14%0.75%$3,478
Product:Single Family Total Units:79
Configuration:3,250 Units Sold:9
Lot Dimensions:n/a 3 Months Sold:9
Lot 14 Units Remaining:70
% Remaining:89%
Summary Statistics:2,631 2.5 $605,098 $230 $0 $0 $605,098 $230 $35,000 $7,500 $647,598 $246 $146 1.14%0.75%$3,435
Boulevard at Millenia CalAtlantic Homes 24 1,681 3 3.0 3 2 3.0 $444,990 $265 $0 $0 $444,990 $265 $15,000 $8,900 $468,890 $279 $327 1.14%0.75%$2,709
Chula Vista Millenia 26 1,816 3 3.0 3 2 $464,990 $256 $0 $0 $464,990 $256 $15,000 $9,300 $489,290 $269 $327 1.14%0.75%$2,812
Product:Townhomes Total Units:78 28 2,046 3 3.0 3 2 $494,990 $242 $0 $0 $494,990 $242 $15,000 $9,900 $519,890 $254 $327 1.14%0.75%$2,968
Configuration:ATT Units Sold:0
Lot Dimensions:ATT 3 Months Sold:0
Lot 17 Units Remaining:78
% Remaining:100%
Summary Statistics:1,857 3.0 $469,605 $253 $0 $0 $469,605 $253 $15,000 $9,392 $493,997 $266 $327 1.14%0.75%$2,836
Boulevard at Millenia II TBD 20 1,681 3 3.0 3 2 3.0 $444,990 $265 $0 $0 $444,990 $265 $15,000 $4,450 $464,440 $276 $327 1.14%0.75%$2,686
Chula Vista Millenia 20 1,816 3 3.0 3 2 $464,990 $256 $0 $0 $464,990 $256 $15,000 $4,650 $484,640 $267 $327 1.14%0.75%$2,789
Product:Townhomes Total Units:60 20 2,046 3 3.0 3 2 $494,990 $242 $0 $0 $494,990 $242 $15,000 $4,950 $514,940 $252 $327 1.14%0.75%$2,943
Configuration:ATT Units Sold:0
Lot Dimensions:ATT 3 Months Sold:0
Lot 11 Units Remaining:60
% Remaining:100%
Summary Statistics:1,848 3.0 $468,323 $253 $0 $0 $468,323 $253 $15,000 $4,683 $488,007 $264 $327 1.14%0.75%$2,806
8
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia IA No. 1 Product Array
The detailed floorplan pricing for the Millenia Improvement Area IA No.1 product array is outlined below.
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750Net Base PriceUnit Size (Square Feet)
Z at Millenia - Townhomes, Shea
Homes, 3.5 sls per mo
Element at Millenia - 2,000 sq ft,
Shea Homes, 3.5 sls per mo
Skylar at Millenia - 3,250 sq ft, KB
Home, 2.5 sls per mo
Boulevard at Millenia - Townhomes,
CalAtlantic Homes, 3.0 sls per mo
Boulevard at Millenia II -
Townhomes, TBD, 3.0 sls per mo
BASE PRICE NET BASE PRICE $ ASSUMPTIONS AVERAGE PRICE
Project/Subdivision Type Configuration # of Units Est % of
Total Units
Average
Unit Size Base Price $/SF
Price
Impacting
Incentives
Net Base Price $/SF Options Premiums Average Price $/SF Estimated
Sales/Month
Z at Millenia Townhomes ATT 106 27%1,432 $413,660 $289 $0 $413,660 $289 $15,000 $0 $428,660 $299 3.50
Element at Millenia Single Family 2,000 70 18%2,027 $541,063 $267 $0 $541,063 $267 $20,000 $10,000 $571,063 $282 3.50
Skylar at Millenia Single Family 3,250 79 20%2,631 $605,098 $230 $0 $605,098 $230 $35,000 $7,500 $647,598 $246 2.50
Boulevard at Millenia Townhomes ATT 78 20%1,857 $469,605 $253 $0 $469,605 $253 $15,000 $9,392 $493,997 $266 3.00
Boulevard at Millenia II Townhomes ATT 60 15%1,848 $468,323 $253 $0 $468,323 $253 $15,000 $4,683 $488,007 $264 3.00
393 100%1,927 $494,284 $261 $0 $494,284 $261 $19,911 $5,868 $520,063 $274 15.50COMMUNITY SUMMARY
9
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia IA No. 1 Projected Absorption
The projected absorption for the Millenia Improvement Area IA No.1 product array is outlined below.
•Z,Element (Shea)and Skylar (KB Home)are open and selling as of early 2018,with +/-84 of the 255 planned units sold at the end of 2017
and remaining units projected to be sold-out in the first half of 2020.At the end of January 2018,the sold total was 98 units,with 53 units
closed.
•Boulevard at Millenia (Lot 17)is expected to start sales with 78 units in mid 2018 and is projected to sell-out in 2020 (based on that start date).
It is planned to offer 3-story row townhomes and will be developed by CalAtlantic/Lennar.
•Boulevard II (Lot 11)will be similar to the Boulevard product and will come online when that area is largely absorbed.
•Per product absorptions of 2.50 to 3.50 units per month are assumed given the performance to-date of the currently selling programs and
expected market conditions.The actively selling attached and detached projects in South County are typically selling in the +/-3.0 sales per
month range.
Project/Subdivision Type Configuration # of Units 2016 2017 2018 2019 2020 2021
Z at Millenia Townhomes ATT 106 2 33 42 29
Element at Millenia Single Family 2,000 70 5 41 24
Skylar at Millenia Single Family 3,250 79 3 30 30 16
Boulevard at Millenia Townhomes ATT 78 18 36 24
Boulevard at Millenia II Townhomes ATT 60 12 36 12
393 7 77 114 107 76 12COMMUNITY SUMMARY
HYPOTHETICAL COMMUNITY SELL OUT
10
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Conclusion: Total Prices (SFD Only)
Looking at just the detached product types,the Subject’s total pricing is in-line with other new construction detached for-sale products
in the market.Millenia’s detached products are relatively high-density 3-story detached for-sale products that are selling well in the
competitive market.
$500,000
$525,000
$550,000
$575,000
$600,000
$625,000
$650,000
$675,000
$700,000
$725,000
$750,000
$775,000
$800,000
1,500 2,000 2,500 3,000 3,500 4,000Total PriceUnit Size (Square Feet)
Element at Millenia - 2,000 sq ft, Shea Homes, 3.5 sls per mo
Skylar at Millenia - 3,250 sq ft, KB Home, 2.5 sls per mo
Signature - 5,000 sq ft, Heritage Building and Development, 3.1/2.0 sls per mo
Cantamar - 5,000 sq ft, Pacific Coast Communities, 2.7/2.7 sls per mo
Monte Villa - 3,053 sq ft, Pacific Coast Communities, 2.3/2.7 sls per mo
Aventine - 2,975 sq ft, Cornerstone Communities, 1.9/1.9 sls per mo
Indigo at Escaya - 2,940 sq ft, CalAtlantic Homes, 4.2/3.7 sls per mo
Seville at Escaya - 3,600 sq ft, Shea Homes, 4.2/5.7 sls per mo
Valencia at Escaya - 2,728 sq ft, CalAtlantic Homes, 4.2/2.7 sls per mo
Sierra at Escaya - 2,900 sq ft, Shea Homes, 4.8/4.7 sls per mo
Prado at Escaya - 3,120 sq ft, Brookfield Residential, 4.2/4.7 sls per mo
Castellena at Escaya - 4,500 sq ft, CalAtlantic Homes, 1.8/0.7 sls per mo
Haciendas at Escaya - 4,950 sq ft, Brookfield Residential, 3.4/3.7 sls per mo
Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month
11
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Conclusion: Total Prices (ATT Only)
Looking at the attached products,the Millenia products are positioned in-line with other new construction 2 and 3-story attached
projects in the Otay Ranch and South County market.Attached units in the high $300,000s to low $500,000s are selling well as an
affordable product alternative in a market where new detached options are generally $550,000+.
$350,000
$375,000
$400,000
$425,000
$450,000
$475,000
$500,000
$525,000
$550,000
$575,000
1,000 1,250 1,500 1,750 2,000 2,250 2,500Total PriceUnit Size (Square Feet)
Z at Millenia - Townhomes, Shea Homes, 3.5 sls per mo
Boulevard at Millenia - Townhomes, CalAtlantic Homes, 3.0 sls per mo
Boulevard at Millenia II - Townhomes, TBD, 3.0 sls per mo
Metro - ATT, Meridian Communities, 2.3/3.7 sls per mo
Trio - ATT, Meridian Communities, 1.8/2.0 sls per mo
Evo - ATT, Meridian Communities, 2.5/2.0 sls per mo
Parc Place - ATT, Pacific Coast Communities, 4.1/4.3 sls per mo
Lovina - ATT, Heritage Building and Development, 4.2/2.7 sls per mo
Aviare - ATT, Sunrise Company, 4.1/3.7 sls per mo
Tosara II - ATT, Pacific Coast Communities, 2.4/0.0 sls per mo
Flora at Escaya - ATT, Brookfield Residential, 2.6/3.0 sls per mo
Strata at Escaya - ATT, Shea Homes, 1.9/4.3 sls per mo
Azul at Playa Del Sol - ATT, Pardee Homes, 8.3/10.7 sls per mo
Luna at Playa Del Sol - ATT, Pardee Homes, 7.8/3.7 sls per mo
Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month
12
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Millenia Product Comparison vs. Competitive Projects
The active competitive projects in South County are again expanding with new development,but are generally selling well with new home sales
in this submarket increasing 108%from 2016 to 2017 and market capture of County new home sales increasing from 20%in 2015/2016 to 30%
in 2017 and matches the peak capture of County sales seen in 2001.South County’s market capture is now once again expanding
considerably because it is the only area of the County with large amounts of developable residential land and able to offer relatively
affordable new home products.
BUILDER /
UNIT COUNT SUMMARY SALES PACE AVERAGE MONTHLY
COMMUNITY DEVELOPER CITY LOT SIZE TOTAL RLSD SOLD AVAIL.REMAIN ALL 3 MO.SF NET PRICE $/SF HOA TAX PAYMENT
Z at Millenia Shea Homes Chula Vista ATT 106 -41 -65 3.5 --1,432 $428,660 $299 $327 1.89%$2,504
Element at Millenia Shea Homes Chula Vista 2,000 70 -48 -22 3.5 --2,027 $571,063 $282 $210 1.89%$3,111
Skylar at Millenia KB Home Chula Vista 3,250 79 -9 -70 2.5 --2,631 $647,598 $246 $146 1.89%$3,435
Boulevard at Millenia CalAtlantic Homes Chula Vista ATT 78 -0 -78 3.0 --1,857 $493,997 $266 $327 1.89%$2,836
Boulevard at Millenia II TBD Chula Vista ATT 60 -0 -60 3.0 --1,857 $489,353 $264 $327 1.89%$2,813
Metro Meridian Communities Chula Vista ATT 70 36 36 N/Av 36 2.3 3.7 1,535 $436,000 $284 $299 1.65%$2,415
Trio Meridian Communities Chula Vista ATT 81 35 34 N/Av 37 1.8 2.0 1,732 $487,667 $282 $299 1.55%$2,665
Evo Meridian Communities Chula Vista ATT 66 51 47 N/Av 26 2.5 2.0 1,824 $508,000 $279 $299 1.55%$2,764
Parc Place Pacific Coast Communit Chula Vista ATT 175 48 36 N/Av 139 4.1 4.3 1,429 $408,233 $286 $285 2.00%$2,388
Lovina Heritage Building and De Chula Vista ATT 78 58 44 N/Av 39 4.2 2.7 1,986 $482,567 $243 $240 2.00%$2,726
Aviare Sunrise Company Chula Vista ATT 171 171 170 N/Av 3 4.1 3.7 1,592 $445,525 $280 $385 2.00%$2,681
Tosara II Pacific Coast Communit Chula Vista ATT 99 99 74 N/Av 74 2.4 0.0 2,114 $465,233 $220 $253 2.00%$2,650
Signature Heritage Building and De Chula Vista 5,000 79 27 23 N/Av 58 3.1 2.0 3,481 $780,045 $224 $48 2.00%$4,067
Cantamar Pacific Coast Communit Chula Vista 5,000 93 14 8 N/Av 89 2.7 2.7 2,768 $677,900 $245 $48 2.00%$3,541
Monte Villa Pacific Coast Communit Chula Vista 3,053 72 26 23 N/Av 52 2.3 2.7 2,814 $606,795 $216 $48 2.00%$3,175
Aventine Cornerstone Communitie Chula Vista 2,975 100 11 10 N/Av 95 1.9 1.9 2,210 $578,190 $262 $160 2.00%$3,139
Flora at Escaya Brookfield Residential Chula Vista ATT 107 16 12 N/Av 98 2.6 3.0 1,494 $413,500 $277 $358 2.00%$2,489
Strata at Escaya Shea Homes Chula Vista ATT 72 18 15 N/Av 59 1.9 4.3 1,608 $450,667 $280 $385 2.00%$2,707
Indigo at Escaya CalAtlantic Homes Chula Vista 2,940 111 41 28 N/Av 83 4.2 3.7 2,042 $588,600 $288 $110 2.00%$3,143
Seville at Escaya Shea Homes Chula Vista 3,600 135 37 30 N/Av 107 4.2 5.7 2,745 $672,500 $245 $108 2.00%$3,573
Valencia at Escaya CalAtlantic Homes Chula Vista 2,728 118 39 29 N/Av 90 4.2 2.7 2,108 $621,900 $295 $125 #REF!$3,329
Sierra at Escaya Shea Homes Chula Vista 2,900 122 43 33 N/Av 90 4.8 4.7 1,970 $561,000 $285 $108 2.00%$2,999
Prado at Escaya Brookfield Residential Chula Vista 3,120 130 39 28 N/Av 102 4.2 4.7 2,417 $629,333 $260 $125 2.00%$3,368
Castellena at Escaya CalAtlantic Homes Chula Vista 4,500 76 27 16 N/Av 64 1.8 0.7 3,021 $750,900 $249 $125 2.00%$3,994
Haciendas at Escaya Brookfield Residential Chula Vista 4,950 76 29 24 N/Av 53 3.4 3.7 3,414 $774,000 $227 $125 2.00%$4,113
Azul at Playa Del Sol Pardee Homes San Diego ATT 121 115 110 N/Av 18 8.3 10.7 1,740 $458,500 $264 $275 1.46%$2,503
Luna at Playa Del Sol Pardee Homes San Diego ATT 96 96 93 N/Av 2 7.8 3.7 1,822 $470,167 $258 $275 1.56%$2,560
2,248 1,076 923 0 1,414 3.6 3.4 2,176 $557,601 $261 $204 1.89%$3,045NEW HOME AVERAGE:
13
Millenia Master Plan, Chula Vista, CA
February 2018 | City of Chula Vista
Millenia, Chula Vista, CA
Commercial Market Analysis
February 2018 | City of Chula Vista
Millenia | San Diego County, California 14
Millenia is a mixed-use,urban oriented community located at Birch Road and SR-125 in Chula Vista,California.The location is proximate to
established residential communities of Eastlake and Otay Ranch as well as parks,schools and retail options—the Otay Ranch Town Center is
located just north of the Millenia Site and offers several Class A restaurant and retail tenants (Best Buy,Macy’s,H&M,Cheesecake Factory,
PF Chang’s).Further,the Otay border crossing is just 5 miles to the south,and Downtown San Diego is 18 miles to the north.
Millenia’s Locational Attributes Create Desirable Office Development
Source: Chesnut Development, Gensler
Tijuana
Otay
Ranch
Town
Center
Imperial Beach Coronado
San Diego
Olympian
High School
Mater Dei
Catholic
High School
All Season
Park
SR-125
Birch
Road
Millenia Office
Campus (artist
projection)
February 2018 | City of Chula Vista
Millenia | San Diego County, California 15
Millenia consists of multiple parcels in an integrated design concept with multifamily units,office space,retail/hospitality,civic and mixed-use
projects.In addition there will be six themed parks and a variety of tree-lined promenades,gathering places,bikeways and plazas.The three
planned office phases are outlined below,the first of which is Think,which will include two office buildings totaling 318,000 leasable square
feet as well as a parking structure and amenity building.“Think”and “Invent”(1,018,000 SF total)are the only office space included in
Improvement Area No.1.
Millenia Calls For Office, Retail and Residential Uses
Source: Chesnut Development, Gensler
Think –Campus 001:Two buildings totaling 318,000 Sq.Ft.designed
to facilitate a new generation of higher education,a collaborative of
multiple domestic and international universities.
Invent –Campus 003:With four buildings totaling 700,000 Sq.Ft.and
the ability to expand to 1,000,000 Sq.Ft.,Invent is the largest campus at
Millenia Office.
Discover –Campus 002:One building of over 400,000 Sq.Ft.,
programmed for research and life science (the Discover building is not
included in Improvement Area No.1).
February 2018 | City of Chula Vista
Millenia | San Diego County, California 16
Images of the design concepts for the Think,Invent and Discover campuses are below.Think consists of two office buildings of 150,000 and
168,000 square feet,an amenity building with a cafe and fitness center,and a 1,373-car parking garage.The Think campus is targeting LEED
Platinum certification,and also a Gold Rating under the new WELL Building Standard which places emphasis on increasing well-being,health,
and ultimately productivity of the people inside the space.
Millenia Planned for Three Phases of Office Development
Source: Chesnut Development, Gensler
Think Campus –318,000 SF
Artist projection
Artist projection Artist projection
Artist projection
February 2018 | City of Chula Vista
Millenia | San Diego County, California 17
Based on our research,including visits to the site and new/existing office projects,market trends,broker interviews and supply-demand analysis,the proposed
office development at Millenia appears supportable as planned.The following paragraphs summarize the key conclusions from our office analysis:
•Market conditions are tight for office space in San Diego County and the South Bay.Countywide average office lease rates have increased recently,
to a high of $2.67 per square foot per month in the most recent quarter,exceeding the previous high of $2.60 per square foot per month during 2008—it
should be noted that vacancy was much higher in 2008 (14.4%).The vacancy rate has trended downward as well,from 15.2%in 2009 to 9.6%in the most
recent quarter,which represents a relatively strong office market.San Diego office market absorption has outpaced deliveries in seven out of the past eight
years,with very strong gains in absorption in 2016 in particular (1.487 million square feet absorbed versus only 308,000 square feet delivered).In fact,
absorption has nearly doubled new deliveries since 2010,with a combined 10.8 million square feet of absorption versus 5.6 million square feet of
deliveries—this indicates a supply constrained office market that can support additional new office space.
•Office inventory in Chula Vista and the South Bay has not increased in recent years.Office inventory in the South Bay market has been at just over
10.9 million square feet for the past five years.During this time,there has been minimal increase in inventory in recent years and actually a decrease of
inventory in 2016 and 2017 (likely due to teardowns of older product or office buildings repurposed for other uses).Office market trends are strong in the
South Bay,as average office lease rates have increased in the most recent quarters,to a high of $2.23 per square foot per month in Q4 2017.The vacancy
rate has decreased from 9.1%in Q1 2014 to a low of 5.0%in late 2017,which is a very low office vacancy rate and indicates a supply constrained market.
Annual net absorption has fluctuated as compared to completions in recent years—2016 was particularly strong,with over 245,000 square feet absorbed
versus no new deliveries (per CoStar data).This data indicates that leasing activity was predominantly existing space that was vacant.Last year (2017)has
continued to deliver little to no new completions coupled with 141,000 square feet of positive net absorption.
•Locational characteristics for Millenia are very strong for office development.The location is proximate to established residential communities of
Eastlake and Otay Ranch as well as parks,schools and retail options—the Otay Ranch Town Center is located just north of the Millenia Site and offers
several Class A restaurant and retail tenants (Best Buy,Macy’s,H&M,Cheesecake Factory,PF Chang’s).Further,the Otay border crossing is just 5 miles
to the south,and Downtown San Diego is 18 miles to the north.
•Developer expectations for office space absorption and lease rates are reasonable and inline with demand and the office market.Millenia is
planned for a minimum of 1.425 million square feet among three phases.Our realistic demand model supports an average of 87,800 square feet of office
space at the Subject Project annually,for a total of 1.492 million square feet through 2033.Further,the initial Think office campus is planned for a total of
318,000 square feet of absorbed office space,which could reasonably be absorbed within a +/-4 year timeframe from project completion—a timeline that is
consistent with the lease-up expectations of LMC Millenia Investment Company,LLC.Finally,the 1.018 million square feet of office space planned within
Improvement Area No.1 of Millenia (the sum of the 318,000 square foot Think campus and the 700,000 square foot Invent campus)could reasonably be
absorbed by the end of 2028.
•We estimate land values to be in the $30.00 to $40.00 per square foot range.Commercial land sales transactions average $20.08 per square foot in the
South Bay,and land in Chula Vista has traded at an average of $21.42 per square foot,with the highest price land among these comparables is a small infill
site in Chula Vista,which traded at $76.52 per square foot.It is important to note that there is an inverse relationship between land size and price per square
foot—the previously mentioned infill site that commanded the highest price per square foot is only 1.26 acres,while two of the largest sites commended the
lowest price per square foot (Ocean View Hills Pkwy and an 8th Street site).Commercial land asking prices near Millenia are $30.00 per square foot.There
are two key locations with commercial land for sale in Chula Vista:The District at Eastlake,a business park that can accommodate a number of commercial
uses (office,hotel,flex,medical,technology,manufacturing,showroom retail)and Auto Park Place,which are parcels dedicated to auto dealership uses.
Both of these locations have asking prices for finished commercial lots of $30.00 per square foot.Given the strong locational attributes and design of
Millenia,we believe it could command land values upwards of $30.00 per square foot.
Millenia Phase 1 Office Could Be Absorbed in Four Years, Land Value of $30-$40/SF
February 2018 | City of Chula Vista
Millenia | San Diego County, California 18
The tables below represent realistic demand (average CalTrans job projections and Woods &Poole job projections)for office space annually
over the next 20 years.Millenia is planned for a total of 1.425 million square feet among three phases.Our demand model supports an average
of 87,800 square feet of office space at the Subject Project annually,for a total of 1.492 million square feet through 2033.Further,the initial
Think office campus is planned for a total of 318,000 square feet of office space,which could reasonably be absorbed within a +/-4 year
timeframe—this is consistent with the lease-up expectations of the Project Developer and commercial brokers that are active in the local market.
Finally,the 1.018 million square feet of total office space planned within Improvement Area No.1 of Millenia (the sum of the 318,000
square foot Think campus and the 700,000 square foot Invent campus)could reasonably be absorbed in the 2018-2029 period (the
actual office occupancy is scheduled to occur starting in Q1 2020).
Demand Indicates Millenia Office SF Could be Absorbed in +/-17 Years
Year
San Diego MSA
Office Demand (SF)
South Bay
Demand (SF)
Total Office Demand
(SF) SUBJECT
Sum of Five-Year
Demand (SF)
2017 1,575,449 153,606 77,197
2018 1,575,449 153,606 77,197
2019 1,575,449 153,606 77,197
2020 1,575,449 153,606 77,197
2021 1,575,449 153,606 77,197
2022 1,702,363 178,748 90,225
2023 1,702,363 178,748 90,225
2024 1,702,363 178,748 90,225
2025 1,702,363 178,748 90,225
2026 1,702,363 178,748 93,295
2027 1,680,983 184,908 93,295
2028 1,680,983 184,908 93,295
2029 1,680,983 184,908 93,295
2030 1,680,983 184,908 93,295
2031 1,680,983 184,685 93,146
2032 1,605,960 184,685 93,146
2033 1,605,960 184,685 93,146
AVERAGE:1,647,406 173,851 87,812 373,199
TOTAL:28,005,897 2,955,461 1,492,796 1,492,796
MEYERS Realistic Buildout for MILLENIA (Avg. of CalTrans, Woods & Poole Proj.) -
Office Size and Demand (SF)
385,985
454,196
186,291
466,324
The pre-leasing/absorption
of the 1.018 million SF of
office in Improvement Area
No. 1 is projected for 2018-
2029, with building
occupancy starting at the
time of first building
completion projected for Q1
2020
February 2018 | City of Chula Vista
Millenia Master Plan, Chula Vista, CA
MARKET ABSORPTION ANALYSISExecutive Summary
Chula Vista CFD 16-I (Millenia IA No. 1)