HomeMy WebLinkAbout2019-08-13 Item 02
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August 13, 2019 File ID: 19-0324
TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A REIMBURSEMENT
AGREEMENT BETWEEN THE CITY AND CHULA VISTA BAYFRONT RV LLC TO CONSTRUCT SPECIFIED
BAYFRONT DEVELOPMENT IMPACT FEE AND SEWER IMPROVEMENTS AND APPROPRIATING FUNDS
THEREFOR (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
On April 24, 2018, the City of Chula Vista and the San Diego Unified Port District (the “District”) approved a
Disposition and Development Agreement (DDA) with RIDA Chula Vista, LLC (“RIDA”) for the development of
a large-scale destination resort and convention center project on parcel H-3 of the Chula Vista Bayfront
Master Plan (also known as the “CVBMP”, “Chula Vista Bayfront”, or “CVB”). Per the Chula Vista Bayfront
Development Policies certified by the California Coastal Commission in August 2012, development of the H-
3 site requires the relocation of the existing recreational vehicle (RV) park. The developer selected for the
relocation of the RV park (“Sun Communities”) has committed to not only building the replacement RV park,
but also constructing a portion of the initial infrastructure required to serve the CVB that would otherwise
have been constructed by RIDA, the City, or the District (the “Remaining Phase 1A Infrastructure
Improvements”). Approval of the proposed reimbursement agreement is recommended in order to
implement commitments made in the DDA and to facilitate related procurement and credit award processes.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity for compliance with the California
Environmental Quality Act (CEQA) and has determined that the activity was covered in previously adopted
Environmental Impact Report UPD#83356-EIR-65B/SCH#2005081077. The Development Services Director
has also reviewed the proposed activity for additional compliance with CEQA and has determined that there
is no possibility that the activity may have a significant effect on the environment; therefore, pursuant to
Section 15061(b)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental
review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
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DISCUSSION
In 2002, the City of Chula Vista and the District began a collaborative planning process to create a master
plan for the approximately 535-acre Chula Vista Bayfront area. The master plan was designed to transform
Chula Vista’s underutilized industrial Bayfront landscape into a thriving residential and world-class
waterfront resort destination. The CVBMP represents the last significant waterfront development
opportunity in Southern California and is the result of a decade-long joint planning effort by a broad coalition
of stakeholders, the District, the City, and Pacifica Companies.
The CVBMP will create thousands of new jobs, create new public parks, protect natural coastal resources,
provide conference and visitor-serving amenities and build an important asset for the San Diego region, the
South Bay, Chula Vista residents, and coastal visitors. At buildout, more than 40% of the CVBMP project area
will be dedicated to parks, open space, and habitat restoration/preservation. Anticipated economic benefits
include the creation of more than 4,400 permanent jobs, nearly 7,000 temporary construction jobs, and
numerous indirect jobs in the regional economy.
The master plan will be implemented jointly by the City and the District in four major phases over a 24-year
period. Phase one of implementation includes the development of the previously described resort hotel and
convention center project and RV park relocation, the creation of public parks and open space, the
restoration of habitat areas, a mixed-use residential development, and ancillary public infrastructure.
CVBMP Financing Agreement
In furtherance of developing the CVBMP, the City and the District entered into a Bayfront Master Plan
Financing Agreement (the “Financing Agreement”) on May 8, 2012. The Financing Agreement identified the
rights and obligations of each agency, with respect to the financing, development, and construction of public
improvements, infrastructure, and the planned convention center in the CVBMP. The Financing Agreement
was subsequently amended and restated to recognize additional rights and obligations of the respective
agencies, effective June 20, 2017 (the “Amended and Restated Financing Agreement”). Per the Amended and
Restated Financing Agreement and the DDA, the City will fund specified in-road sewer facilities included in
the Phase 1A Infrastructure Improvements (the City’s “Sewer Facility Contribution”).
Sun Communities
On October 24, 2016, the District issued a Request for Proposals (RFP) for the development and operation of
a destination RV park, with a minimum of 237 stalls and associated infrastructure improvements. Sun
Communities’ highly-qualified response was selected by the District Board on April 11, 2017 and initial lease
negotiations began soon thereafter.
The District and Sun Communities have worked collaboratively since 2017 to develop a project description
and plans, obtain a Coastal Development Permit (CDP), and negotiate a ground lease. As part of the ground
lease negotiations, Sun Communities has committed to constructing the following Remaining Phase 1A
Infrastructure Improvements surrounding their project site:
1. E Street (Bay Boulevard to F Street)
2. F Street (Bay Boulevard to E Street)
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3. F Street (E Street to Gunpowder Point Drive)
4. Gunpowder Point Drive Relocation
5. SP-1 Sweetwater Buffer for S-1
6. SP-2 Seasonal Wetlands
7. SP-4 SDG&E Trail
Projects 1 through 3 above are roadway segments that include: (i) improvements eligible for reimbursement
via the City’s Sewer Facility Contribution; (ii) improvements that are included in the Bayfront Development
Impact Fee (BFDIF) program; and (iii) improvements that are solely the responsibility of Sun Communities.
Projects 4 through 7 are solely funded by Sun Communities. Because the estimated cost of their planned
BFDIF facilities exceed their estimated BFDIF fee obligation, Sun Communities is eligible to both earn credits
against their BFDIF fee obligation and to receive cash reimbursement from the BFDIF program in the future
(as funds are available). The City has negotiated a reimbursement agreement with Sun Communities to
address both their in-road sewer improvements and BFDIF eligible facilities, each discussed in further detail
below.
Sewer Improvements
Per the DDA, in-road sewer improvements (the “Sewer Improvements”) to be constructed by RIDA, the City,
the District, and others will be funded by the City’s Sewer Facility Contribution. Sun Communities’ Sewer
Improvements are estimated to cost approximately $390,000, including design. Actual costs will be
determined during the bidding and construction process. The City has identified sufficient funds to
reimburse Sun Communities for these expenses in the City’s Sewer Income Fund. Per Chula Vista Municipal
Code (CVMC) Section 13.14.030, the Sewer Income Fund is a repository for one-time fees collected from
persons connecting, directly or indirectly, to the City’s sewer system. CVMC Chapter 3.16 provides that these
funds may be used, in the discretion of the City Council and pursuant to written contract, to reimburse any
person who constructs sewer facilities that benefit other properties. Sun Communities’ Sewer
Improvements are qualifying facilities. An agreement to allow for the reimbursement of eligible Sewer
Improvement expenses has been negotiated with Sun Communities (see Attachment 1).
Adoption of the resolution approves the proposed Reimbursement Agreement and implements the City’s
related commitments in the DDA.
BFDIF Improvements
As previously described, Sun Communities will be constructing three roadway segments that are included in
the City’s BFDIF program. Per the BFDIF Ordinance, any developer that constructs a BFDIF facility is eligible
for credit against the BFDIF fees that would otherwise be due with their building permits. Sun Communities’
BFDIF obligation is currently estimated to total approximately $1.3 million. Their BFDIF eligible
improvements are estimated to total approximately $4.9 million, indicating a future reimbursement from the
BFDIF program of approximately $3.6 million. The proposed reimbursement agreement provides a
mechanism for the City to reimburse Sun Communities for this eligible BFDIF expense as funds become
available.
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DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings
within 1,000 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)(7) or (8), 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.
CURRENT-YEAR FISCAL IMPACT
All costs associated with the preparation of this report and the associated agreement are included in the
operating budget for the Development Services Fund. There is no current fiscal year impact to the General
Fund as a result of this action. Approval of the resolution authorizes the City to enter into a Reimbursement
Agreement with Sun Communities for construction of specified BFDIF and sewer improvements in the
CVBMP and appropriates $390,000 from the Sewer Income Fund for this purpose.
ONGOING FISCAL IMPACT
All funds are anticipated to be expended in the current fiscal year. There is no ongoing fiscal impact as a
result of this action.
ATTACHMENTS
1. Reimbursement Agreement with Chula Vista Bayfront RV LLC to Construct Specified Bayfront
Development Impact Fee and Sewer Improvements
Staff Contact: Tiffany Allen, Assistant Director of Development Services
C:\Users\shereek\Desktop\19-0324 Sun Reso 2019-08-09.docx
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A REIMBURSEMENT
AGREEMENT BETWEEN THE CITY AND CHULA VISTA
BAYFRONT RV LLC TO CONSTRUCT SPECIFIED
BAYFRONT DEVELOPMENT IMPACT FEE AND SEWER
IMPROVEMENTS AND APPROPRIATING FUNDS
THEREFOR (4/5 VOTE REQUIRED)
WHEREAS, Sun Chula Vista Bayfront RV LLC (“Developer”) is negotiating and
anticipates securing lease rights (the “Lease”) to certain real property held by the San Diego
Unified Port District (the “District”) for the development of two hundred and forty-seven (247)
recreational vehicle stalls, together with related amenities, to be located in the Chula Vista
Bayfront Master Plan Area (the “Private Improvements”); and
WHEREAS, as part of the consideration for the District to enter into the Lease, Developer
agreed to develop and maintain certain real property located adjacent to the Private Improvements;
and
WHEREAS, Developer and District have negotiated and anticipate entering into a
Development and Maintenance Agreement (the “Development and Maintenance Agreement”);
and
WHEREAS, Section 4 of the Development and Maintenance Agreement provides that the
Developer shall construct certain roadway improvements, consisting of E Street from Bay
Boulevard to F Street, F Street from Bay Boulevard to E Street, and F Street from E St reet to
Gunpowder Point Drive (together the “Project Improvements” or “Project”); and
WHEREAS, pursuant to Chula Vista Municipal Code (“CVMC”) Section 3.54.010
(Transportation Development Impact Fees – General Intent), the City Council of the City of Chula
Vista has determined that (i) new development will create adverse impacts on the City’s existing
public facilities, which must be mitigated by the financing and construction of certain
transportation facilities that are the subject of CVMC Chapter 3.54; and (ii) a reasonable means of
financing the impacted transportation facilities is to charge a fee on all developments located
within the following subareas of the City of Chula Vista: the Eastern Area, the Western Area, and
the Bayfront Area, as defined in CVMC Section 3.54.020 (Transportation Development Impact
Fees – Definitions); and
WHEREAS, pursuant to CVMC Section 3.54.140 (Transportation Development Impact
Fees – Developer Construction of Facilities), developers may construct or finance Transportation
Facilities, subject to the provisions of CVMC Chapter 3.54 and CVMC Section 2.56.160(H); and
WHEREAS, CVMC Section 3.54.150 (Transportation Development Impact Fees –
Procedure for Issuance of Credits or Tender of Reimbursement Offer) establishes cert ain terms
Resolution No.
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and conditions for the award of credit or the tender of a reimbursement offer for developer
construction of transportation facilities; and
WHEREAS, the Private Improvements are located in the Bayfront Area and will be subject
to payment of the Bayfront Transportation Development Impact Fee (BFDIF) to the City upon
building permit issuance; and
WHEREAS, certain portions of the Project Improvements are transportation facilities of
the BFDIF, as identified in CVMC Section 3.54.030 (the “Developer’s BFDIF Improvements”);
and
WHEREAS, pursuant to CVMC Section 3.54.110 (Transportation Development Impact
Fees – Authority for Accounting and Expenditures), all BFDIF funds collected shall be deposited
into a Bayfront Transportation Development Impact Fee fund (the “BFDIF Fund”); and
WHEREAS, CVMC Section 3.54.080 (Transportation Development Impact Fees –
Purpose and Use of Fee) provides that fees collected pursuant to CVMC Chapter 3.54 shall be
used by the City for the following purposes, in such order and at such time as determined by the
City Council: (i) to pay for such of the Transportation Facilities that the City Council determines
shall be constructed, installed or purchased at that time, or to reimburse the City for Transportation
Facilities funded by the City from other sources; (ii) to reimburse developers who have been
required or permitted by CVMC Section 3.54.140 to construct, install or purchase approved
Transportation Facilities identified in the Engineer’s Reports, in such amounts as the City Council
deems appropriate; and (iii) to pay for costs associated with the administration of the fees; and
WHEREAS, Developer’s BFDIF Improvements are eligible for a combination of credits
against Developer’s future BFDIF obligation and cash reimbursements from the BFDIF Fund; and
WHEREAS, upon contract award for Developer’s BFDIF Improvements, Developer will
be eligible for credits against a future BFDIF obligation pursuant to CVMC Section 3.54.150
(Transportation Development Impact Fees – Procedure for Issuance of Credits or Tender of
Reimbursement Offer) in an amount not to exceed Developer’s BFDIF obligation for the Private
Improvements, estimated to total approximately $1.3 million (“Developer’s BFDIF Credits”); and
WHEREAS, in the future, the City will have sufficient funds in the BFDIF Fund to
reimburse Developer for the design and construction of Developer’s BFDIF Improvements, less
Developer’s BFDIF Credits (the “Developer’s BFDIF Reimbursement”); and
WHEREAS, pursuant to CVMC Section 13.14.030.B (Connection to Public Sewer – Fee),
any person desiring to connect, directly or indirectly, any parcel or any building thereon to any
public sewer which has been constructed at no cost to the parcel to be connected shall pay the one-
time required fee for sewer connection to the City, with all revenue derived from such fees to be
deposited into the Sewer Income Fund; and
WHEREAS, pursuant to CVMC Chapter 3.16 (Sewer Income Fund), all revenues collected
under CVMC Section 13.14.030.B shall be deposited into the “Sewer Income Fund” and may be
Resolution No. _________
Page 3
used, in the discretion of the City Council (as defined below) and pursuant to a written contract, to
reimburse any person who has constructed sewer facilities to the extent, as determined by the City
Council, that such sewer facilities have benefited other properties; and
WHEREAS, certain in-road sewer facilities are included in the Project Improvements (the
“Developer’s Sewer Improvements”); and
WHEREAS, construction of the Developer’s Sewer Improvements will provide a public
benefit to other property owners within the Chula Vista Bayfront Master Plan area; and
WHEREAS, the Developer’s Sewer Improvements are estimated to total $390,000 and are
eligible for reimbursement from the Sewer Income Fund; and
WHEREAS, the City has sufficient funds in the Sewer Income Fund to reimburse
Developer for the design and construction of Developer’s Sewer Improvements; and
WHEREAS, certain portions of the Project Improvements are neither transportation
facilities of the BFDIF, nor eligible for reimbursement from the Sewer Income Fund (the
“Developer’s Public Improvement Contribution”); and
WHEREAS, Developer desires to enter into a Reimbursement Agreement with the City in
the form presented in Exhibit 1 to this resolution, so that it may obtain reimbursement for the
eligible costs of designing and constructing the Project Improvements, excluding Developer’s
Public Improvement Contribution; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista,
that it approves the Reimbursement Agreement, between the City and Chula Vista Bayfront RV
LLC to Construct Specified Bayfront Development Impact Fee and Sewer Improvements, 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 to execute same.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista, that
approval of the Reimbursement Agreement shall be contingent upon the Developer and the District
executing the Lease.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista, that it
appropriates funds from the Sewer Income Fund to reimburse Developer pursuant to the
Reimbursement Agreement between the City and Chula Vista Bayfront RV LLC to Construct
Specified Bayfront Development Impact Fee and Sewer Improvements.
C:\Users\shereek\Desktop\19-0324 Sun Reso 2019-08-09.docx
Presented by
Kelly G. Broughton, FASLA
Director of Development Services
Approved as to form by
Glen R. Googins
City Attorney