HomeMy WebLinkAbout2019/10/08 Agenda Packet I declare under penalty of perjury that I am employed
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Dated:
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CfTY OF
CHULA VISTA
Mary Casillas Salas, Mayor
John McCann, Councilmember- District 1 Gary Halbert, City Manager
Jill M. Galvez, Councilmember- District 2 Glen R. Googins, City Attorney
Stephen C. Padilla, Councilmember- District 3 Kerry K. Bigelow, City Clerk
Mike Diaz, Councilmember- District 4
Tuesday, October 8, 2019 5:00 PM Council Chambers
276 4th Avenue, Building A
Chula Vista, CA 91910
REGULAR MEETING OF THE CITY COUNCIL
REVISED 10/4/2019
CALL TO ORDER
ROLL CALL:
Councilmembers Diaz, Galvez, McCann, Padilla and Mayor Casi/las Sa/as
PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE
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.
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.
City of Chula Vista Paye 1 Printed on 10/412019
City Council Agenda October 8,2019
1 19-0477 RESOLUTION OF THE CITY COUNCIL F THE CITY OF
CHUL.A VISTA APPROVING THE CHUL.A VISTA BAYFRONT
PROJECT FUNDING AGREEMENT BY AND AMONG THE
COUNTY OF SAN DIEGO, THE CITY OF CHULA VISTA,
THE SAN DIIEGO UNIFIED PORT DISTRICT, AND 'THE
CHUL.A VISTA BAY RONNT FACILITIES FINANCING
AUTHORITY WHEREIN THE COUNTY WILL PROVIDE A
$25,000,0010 LOAN TO THE CHULA VISTA BAYFRONT
PROJECT
Department: Development Services Department,
Environmental Notice: The Project was adequately covered in previously adopted Environmental
Impact Report UPD#83356-EIR- 5B/SCH##200050 077"".
Recommended Action: Coulncil adopt the (resolution.
CITE' MANAGER'S REPORTS
MAYOR'S RES'OR'TS
COU NCILM EMBERS' COMMENTS
CITY ATTORNEY'S REPORTS
ADJOURNMENT
to the regular City Council meeting on October 15 2019, at 5.-00 p.m., in the Council Chambers.
"laterals 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(Mall at 276 Fourth Avenue, Building A, during
normal business hours.
In compliance with the
AMERICANS WITH DISABILITIES ACT
The City of Chula 'lista requests individuals who require special accommodations to access, attend,
ardor participate in a City meeting, activity, or service, contact the City Clerk's office at(61 9)
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Most Chula Vista City Council meetings, including public comments, are video recorded and aired live
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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.
City of Chula Vista Page 2 Printed on 101412019
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CITY OF
C H'U LA V I STA
October B 21019 File ID: 19-0477
'TITLE
IL
RESOLUTION OF THE CITY COUNCIL OF THE CITY of CHULA VISTA APPROVING THE CHULA VISTA
BAYFRONT PROJECT FUNDING AGREEMENT BY AND AMONG THE COUNTY of SAN DINGO, THE CITY O
CHULA VISTA, TIFF SAN DIEGO UNIFIED PORT DISTRICT, AND TIFF CHULA VISTA BAYFRONT FACILITIES
FINANCING AUTHORITY WHEREIN THE COUNTY WILL PROVIDE A $25,0001,000 LOAN TO TIFF CHULA
VISTA BAYFRONT PROJECT
RECOMMEND w
DACTION
Council adopt the resolution.
SUMMARY
On May 8, 2012, the City Council approved the Chula Vista Bayfront Master Plan. Financing Agreement with
the San Diego Unified Port District (the "2012 Financing Agreement''), addressing the financing,
n, ,
development, and construction of public improvements, infrastructure, and a conference center pursuant
to the Chula Vista Bayfront Master Plan CV;B 'IP). The 20,12 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"), including a commitment to jointly
pursue formation of an Enhanced Infrastructure Financing District (EIFD) with the County of San Diego
(the "County"). The proposed funding agreement commits the County to participate in the development of'
the CVBMP by making a 25 million loan to the project,in place of the previously contemplated FIFD.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity for compliance with the California
Environmental Quality Act CLQA and has determined that the activity was covered in previously adopted
Environmental Impact Report UPD#83 56- R-65B/SCH#2oo50810 . 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 ) of the State CLQA Guidelines the activity is not subject to CEQA. Thus, no
environmental review is required.
130ARD/C0MM1SS1ON/C0MMff1'-EE RECOMMENDATION
Not applicable.
Prig .
DISCUSSION
In 2002,the City of Chula Vista and the Unified Port District of'San. Diego (the"Port") began a collaborative
planning process to create a master plan for the approximately 535-acre Chula Vista Bayfront area. The
CVBMP 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 Port,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 2,200 permanent jobs, nearly 7,000 temporary construction
jobs, and numerous,indirect jobs inthe regional economy.
CVBMP Financing Agreement
Approved by City Council in May of 2012 via Resolution 2012-078, the 2012 Financing Agreement
establishes a fiscal foundation for creating a world-class Bayfront that reflects strong planning and design
principles, environmental protection, economic feasibility, and community benefits. The capital projects
and activities to be funded will promote public access to and engagement with the waterfront, while
enhancing the quality and protection of key habitat areas.
The 2012 Financing Agreement identified the revenue sources necessary to construct and maintain public
improvements, infrastructure, and other facilities necessary to implement the CVB,MP in accordance with
the Final Environmental Impact Report(FEIR) approved by the City and the Port on May 16,,2010.
Anticipated sources of funds per the 2012 Financing Agreement include the following:
L Ground lease revenues generated by a planned Resort Hotel and Conference Center project (TCC).
(Port)
2. Other new,long-term ground leases in the CVBMP project area. (Port)
3. Transient Occupancy Taxes (TOT) generated within the CVBMP project area. (City)
4. Tourism Marketing District Assessments. (City)
S. Park Fees. City Developer)
6. Pacifica Unit Contribution per the Chula Vista Bayfront Master Plan Settlement Agreement.
(Developer)
7. Development Impact Fees. (City/Developer)
While the City and Port worked to implement the provisions of the 2012, Financing Agreement, the vision
for the RHCC project and the necessary public investment continued to evolve. As a result,modifications to
the 2012 Financing Agreement to recognize additional rights and obligations of the respective agencies
were negotiated. The City Council and the Port Board of' Commissioners approved the Amended and
Restated Financing Agreement on November 10, 2016 and June 20, 2017, respectively. A key change
incorporated in the Amended and Restated Financing Agreement was an agreement between the agencies
to pursue the formation of an EIFD with the County of San Diego. If an EIFD were formed,the incremental
P zi g e 12
Property 'Tax and Property 'Tai in-Lieu of Motor Vehicle license Fee revenues generated as a result of
increased property valuations (flee "Property Tax Increment")t") in the CVBMP and received by the County
would be dedicated to CVBMP infrastructure. The City's Property"fax increment would also be committed
through the EIFD. The intent was to use these funds to replace the tax increment that would have been
generated under the City's now defunct Redevelopment Agency, as contemplated in the 2012 Financing
Agreement.
Following approval of the .Amended and restated Financing agreement, the Port and City began
discussions with the County relating to the proposed EIFD. At this time, the County is proposing an
alternative method to participate in the success of'the CVBMP project. The proposed Chula Vista Bayfront
Project Funding Agreement (the "Funding agreement") between the County, the City, the Port, and the
Chula Vista Bayfront Facilities Financing Authority (the "Authority") commits the County to contributing
25 million toward the construction of certain CVBMP infrastructure (the "Phase 1A improvements"') (see
Attachment 1 . The proposed participation by the County is critical to the success of the RHCC
development and the CVBMP as a whole. with County participation through the Funding Agreemen.t,.
formation of an iF'D is no longer necessary or required. The City has committed to directly contribute its
Property'"Tax increment revenues generated by the R CC to the project.
The Phase 1A improvements include the public facilities and infrastructure necessary to support the first
phase of development of the CVBMP', consisting of the RHCC and a new RV park. Construction costs are
anticipated to total $63.2 million.,as summarized in the table below.
Table 1 -Phase 1A Improvements
Developer City Sewer
Cost BFDIF Credit Fundffig other
Improvement Desrcri tion Estimate' Eli ib►le Eli ib►le F''uudin 4
Developer's Phase 1A Infrastructure Improvements
F Street (G Street to H Street) , o,000 4,050,000 5801000 21050,0oo
G Street Connection. 950,0100 430,0100 110,0100 410o0010
Street(Pay Blvd to Street A) 430,0100 2 0,0100 _ 160,0010
H Street( 'carina Pkwy to F Street) 513801,000 313501,000 2,030,000
Harbor Park(initial) 19,500,000 310,0100 - 190190,000
_3 Site Prep-9 6,01001,000 - 6,0010,000
-3 Utility Corridor6 115301,000 310,0100 1,220,000
Subtotal 40.,470.,000 8,410,000 1,0100,000 31,0 01000
Cost Estimates are in 2016 dollars. Estimates include hard costs,soft costs,and contingencies.
2 Developer BFDIF Credit Eligible column reflects the estimated value of planned improvements that will be eligible for
credit against Developer's Bayfront Development Impact Fee("BFDIF") obligation. ,Actual BFDIF credit amount may vary.
Developer will be responsible for payment of BFDIF fees in excess of credits earned.
City Fewer Funding Eligible column reflects the estimated value of sewer improvements associated with each project that.
will be eligible for funding by the City through its sewer facility contribution.. Actual sewer funds contributed may vary.
other Funding column reflects the estimated amount to be funded through the issuance of debt,the application of funds on
hand,or such other funding mechanisms as may be most appropriate.
H-3 Site Prep budget of$6 million represents the maximum funds that will be provided by District and City for this
purpose,assuming District provides at least 130,000 cubic yards of imported soil. If District does not deliver sufficient soil,
funding will be increased to$10 million. Actual costs may vary. See Section 4.8 of the Disposition and Development
Agreement.
61-1-3 Utility Corridor budget of$1.53 million represents the maximum funds that will be provided by District and City for
this purpose. Actual costs may vary.
Developer Clty Sewer
Cost BF DIF Credit Fun dlf Other
m rovement Description Estimate' Eli �b►le El" lb►le Fundin 4
Remaining phase IA Infrastructure Improvements
L Street(Bay Blvd to F"Street) 319701,000 _ 60,0010 3,910,000
F Street (Lagoon Drive to g Street) 290,0100 2 o,000
Street(Bay Blvd to F' Street) 115301,000 280,01100 1,250,000
F Street(E Street to gunpowder Pt Dir) 630,0100 _ 50,0010 580)0010
Gunpowder Point Drive Relocation 1,3+ 01,000 - - 1,360,000
S-2 Sweetwater Signature Parr 7,6001,000 7,6010,000
SP-1. Sweetwater Buffer (for S-1) 215701,000 2,570,000
SP-1 Sweetwater Buffer or S-2
1,1601
,000 - - 1,160,000
SP-2 Seasonal Wetlands ° 50,0100 - - 950,0010
SP_4 SDG&E 60,0010 - - 60,0100
Subtotal 201120,000 - 390,000 19,7301000
City Sewer Improvements
G Street Sewer Pump Station 2,6401,000 2,6401,000
Total 631230,0018 8,418,0881 4,838,0881 50170)000
Funding,Agreement
The proposed Funding Agreement commits the County to making three (3) equal payments of$8,333,333
toward the Phase 1A Improvements. The first payment will be made within 30 days of the start of
construction on the RHCC project, or July 1., 2020, whichever comes later. The second payment will be
Ornade on July 1, 2021,with the third payment to be Ornade on July 1., 2022.
As a result of the development of the CVBMP, the County will receive additional property tax revenues as
property valuations increase. Assuming a 15,.88% share of the % total property tax rate, and the
application of 3%interest rate on the principal amount,the parties anticipate that the County will recover
the full $25 million contribution., including interest, through CVBMP Property Tax Increment within 1.5
years. .Actual Property Tax Increment generated by the CVBMP will vary based actual property valuations
and timing of development. The current projection of Property 'Tax Increment has been adopted as a
repayment schedule for purposes of the Funding Agreement and is provided in Attachment 2.
If the Property Tax: Increment generated in a ,given year falls sort of the repayment schedule, the Funding
Agreement commits the Port to offsetting such shortfall by making a payment directly to the County. If the
Property '"Tax Increment generated in a given ,year exceeds the loan repayment schedule, the amount in
excess will be carried forward to offset future annual obligations (until such time as no additional
repayment obligation.exists).
Should the development of the RHCC not proceed as planned,the City and Port retain the right to return the
funds in full to the County,repaying the contribution.
In addition to the payment guarantee being made by the Port, the County is proposing an additional
potential general Fund contribution by the City. The City, along with several other cities in the county, is
P
party to litigation with the County (City of Chula Vista et al., v. Sandoval, Sacramento Superior Court Case
No. 34-2014-80001723-CU-WMGDS and Third District Court of Appeal No. 0080711). The case relates to
the methodology used by the San Diego County Auditor-Controller in calculating each taxing entity's are
of Redevelopment Property Tax Trust Fund (RPTTF funds (the "Disputed Funds Case"). The distribution
of RPTTF (formerly known as tax increment) was mandated following the dissolution of California
redevelopment agencies. The City contends that the County's methodology under allocated funds to the
City(the"Disputed Funds"). The City, including the other cities in the litigation,prevailed in Superior Court
and that decision has been appealed by the County to the Third District Court of Appeal.
Should the City prevail in this case, the County proposes that the value of the Disputed Funds as of the
Court decision be contributed by the City to the County as a partial repayment of the $25 million
contribution. Should the County prevail in the case, the proposed Funding Agreement would not result in
any additional contribution on the part oft e City. Any Disputed Funds contributed by the City pursuant to
this agreement would be considered as payment against principal.
The value of the Disputed Funds as of' June 30, 2019 is estimated to total $1.4 million. This amount is
I
projected to increase annually by approximately$300,0100.
Revenue Sharing Agreement
In April of 2018, the City and Port entered into Disposition and Development Agreement with RIDS Chula
Vista, LLC, for development of the RHCC project and a Revenue Sharing Agreement between the two
agencies. The Revenue Sharing Agreement identified specific revenues to be contributed by the two
agencies and established an order of priority for the use of any contributed funds remaining after payment
of the project's annual debt service obligation (the"Residual Revenues"').
City and Port staff lave agreed to negotiate and bring forward an amended Revenue Sharing Agreement for
consideration by the respective boards. The amended agreement will prioritize (1) repaying the City for
any Disputed Funds contributed to the project and (2) repaying the Port for any annual payments made to
the County due to a Property Tax Increment shortfall.
DECISION-MAKER CONFLICT'
Staff has reviewed the property holdings of the City Council members and has found no property holdings
within 1,0010 feet oft e 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 187012.2(a)(7) or (8),for purposes of the Political Reform Act(Cal. Gov't
Code§871001,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
There is no current year fiscal impact as a result of this action.
P zi g e
ONGOING FISCAL IMPA.CT
Entering into the proposed Funding Agreement secures a County contribution of $25 million toward the
CVBMP Phase 1A Improvements. 'This participation is critical to the successful development of the Chula
Vista Bayfront.
In addition to the Property Tax Increment dollars that will be received by the County as a result of the
successful development of the CVBMP, the County is asking the City to contribute funds which it may be
awarded as a result of pending litigation between the City and County. If the City were to prevail in the
Disputed Funds Case, any awarded funds would be discretionary General Fund monies available to fund
City operations. The value of'tie Disputed Funds as of June 30, 2,019 is estimated to total $1.4 million,
increasing by approximately $300,000 annually. Assuming an additional five years of litigation, and the
City's success in the courts, the City would be contributing an additional $2.9 million to the Bayfront
project. If the City does not prevail in the Disputed Funds, case, the Funding Agreement would have no
fiscal impact to the City.
With the proposed amendment to the Revenue Sharing Agreement, repaying the City for any new General
Fund contribution resulting from this agreement would be a priority expense. While this ensures that the
General Fund is repaid sooner, the repayment will be made using Bayfront generated revenues which
1.
would have eventually flowed to the two agencies on a 50/50 basis.
ATTACHMENTS
1. Chula Vista Bayfront Project Funding Agreement by and Among the County of San Diego, the
City of Chula Vista, the San Diego Unified Port District, and the Chula Vista Bayfront Facilities
Financing Authority
2. Repayment Schedule
Staff Con tact: Tiffany Allen,Developmeet Services Departm e,n t
P zi g e
This, attachment will be uploaded when available
Attachment 1
Exhibit A to resolution
CHULA VISTA BAYFRONT PROJECT FUNDING AGREEMENT BY AND
AMONG THE COUNTY OF SAN DIEGO, THE CITY OF CHULA VISTA, THE
SAN DIEGO UNIFIED PORT DISTRICT, AND THE CHULA VISTA
BAYFRONT FACILITIES FINANCING AUTHORITY
Repayment Schedule
Beginning Interest projected"T"ax
Year Fiscal Year Balance (3%) Increment Ending Balance
a FY 2019-2020
.1. FY 2020-2021 8133 0333 $ 21500000 $ - $ 8)583,333
2 FY 2821-2822 16,91.6,667 50705! 8 - 17,424,1.67
3 FY 2822-2023 25,757,580 7720725 - 26,530,225
4 FY 2823-2024 26,5381225 795,907 - 27,3261132
5 FY 2824-2025 27,3261132 819,784 (1)524,81801) 26,121,91+5
6 FY 2825-2826 26,621.,91.6 7980657 (1,554,81881) 25,866,573
7 FY 2026-2027 25,866,573 7750997 (1,586,888) 25,8156,578
8 FY 2027-2028 25,8156,5" 8 751, 97 1, X17" 01081) 24,191,267
9 FY 2028-2029 24,191,267 725)738 (2)591,81881) 22,326188+5
1.8 FY 2829-2838 22,326188+5 669,788 3,8 ,577) 19,929,289
11 FY 2838-2831 19,929,289 5970876 (3,912)81881) 16,61.5,885
12 FY 2831-2832 16,61.5,885 4980453 (3,992)81881) 13,1.21.,538
1.3 F '2832-2833 13,121,538 393,646 (4)136,81881) 9,379,184
1.4 F '2833-2834 9,379,184 281,376 4, 95,81881) 4,965,559
1.5 F '2834-2835 4,965,55'9 148,96 5,114,526
RESOLUTION NO.
RESOLUTION of THE CITY COUNCIL OF THE CITY of CHULA VISTA APPROVING
THE CHULA VISTA BAYFRONT PROJECT FUNDING AGREEMENT BY AND AMONG
THE COUNTY OF SAN DIEGO, THE CITY OF CHULA VISTA, THE SAN DIEGO
UNIFIED PORT DISTRCT, AND THE CHULA VISTA BAYFRONT FACILITIES
FINANCING AUTHORITY WHEREIN THE COUNTY WILL PROVIDE A $25001000
LOAN TO THE CULA VISTA BAYFRONT PROJECT
WHEREAS, the City of Chula Vista (the "City"), Sara Diego Unified port District (the
"Port
District"), and the Chula Vista Bayfront Facilities Financing Authority (the "Authority")
(collectively, the "deceiving Parties") have undertaken certain common, efforts to create the
Chula Vista Bayfront Master Plan (CVBMP) and promote development of the approximately
535-acre Chula"Nista Bayfront Project Area (the "Bayfront Project"); and
WHEREAS, the Receiving Parties formally requested the County of Sara Diego (the
`County"") contribute $25,000,000 to the Bayfront Project; and
WHEREAS, the County and the Deceiving Parties have negotiated the Chula Vista
Bayfront .Project Funding Agreement by and Among the County of Sara Diego, the City of Chula
Vista, the San Diego Unified Port District, and the Chula Vista Bayfront Facilities Financing
Authority (the "Funding Agreement"); and
WHEREAS, the City Council desires to enter into the Funding Agreement with the
County, the Port District, and the Authority in the form presented in Exhibit 1 to this resolution,
so that it may secure the County's commitment to contribute $25,000,000 (via a loan:) to the
Bayfront Project.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Nista, that it approves the Chula Nista Bayfront .Project Funding Agreement by and Among the
County of San Diego, the City of Chula Vista, the San Diego Unified Port District, and the Chula
Vista Bayfront Facilities Financing Autbority, in substantially 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 Mayor to execute
same.
Presented.by Approved as to form by
Cary Halbert Glen R. Googi s
City Manager City Attorney