HomeMy WebLinkAboutReso 2021-128RESOLUTION NO. 2021-128
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA, ACTING AS THE LEGISLATIVE BODY OF
THE BAYFRONT PROJECT SPECIAL TAX FINANCING
DISTRICT AUTHORIZING THE EXECUTION AND
DELIVERY BY THE BAYFRONT PROJECT SPECIAL TAX
FINANCING DISTRICT OF A PROJECT IMPLEMENTATION
AGREEMENT, BOND PURCHASE AGREEMENT AND LOAN
AGREEMENT IN CONNECTION WITH THE ISSUANCE OF
CHULA VISTA BAYFRONT FACILITIES FINANCING
AUTHORITY REVENUE BONDS AND AUTHORIZING THE
EXECUTION OF NECESSARY DOCUMENTS AND
CERTIFICATES AND RELATED IMPLEMENTING ACTIONS
WHEREAS, the City of Chula Vista (the “City”) is a municipal corporation and charter
city duly organized and existing under a charter pursuant to which the City has the right and power
to make and enforce all laws and regulations with respect to municipal affairs and certain other
matters in accordance with and as more particularly provided in Sections 3, 5, and 7 of Article XI
of the Constitution of the State of California and the Charter of the City; and
WHEREAS, the City and the San Diego Unified Port District (the “Port District”), are
undertaking a collaborative planning process with the community to develop a comprehensive
Chula Vista Bayfront Master Plan (the “CVBMP”) for the Chula Vista Bayfront Project; and
WHEREAS, Chapter 3.61 of the Chula Vista Municipal Code (“Chapter 3.61”) was
enacted for the purpose of establishing a procedure for finan cing certain public and private
improvements and maintenance and services to serve the Chula Vista Bayfront Project through the
establishment of a financing district, the levy and collection of special taxes within such district
and the issuance of bonds of such district secured by such special taxes for the purpose of financing
a Convention Center Facility (as defined in Chapter 3.61) and certain other public and/or private
improvements; and
WHEREAS, the City Council of the City, has previously initiated proceedings, held a
public hearing, formed the Bayfront Project Special Tax Financing District (the “District”),
conducted an election and received a favorable vote from the qualified electors of the District,
authorizing the levy of special taxes in the District, a bonded indebtedness of the District in an
amount not to exceed $175,000,000 and an appropriations limit for the District, all as auth orized
pursuant to Chapter 3.61; and
WHEREAS, the City and the Port District have established the Chula Vista Bayfront
Facilities Financing Authority (the “Authority”) a joint exercise of powers entity created pursuant
to Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code
(the “Act”) to assist the Authority in financing of certain public capital improvements related to
the CVBMP through the issuance of one or more series of bonds of the Authority pursuant to the
Act; and
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WHEREAS, the Convention Center Facility will be owned by the Authority and is to be
constructed for the Authority by RIDA Chula Vista, LLC (“RIDA”) as further set forth in the
Project Implementation Agreement (the “Project Implementation Agreement”) to be entered into
by and among the Authority, the City, the Port District, RIDA and the District; and
WHEREAS, the Project Implementation Agreement will set forth certain provisions
regarding the construction of the Convention Center by RIDA on behalf of the Authority and the
construction of the Phase 1A Infrastructure Improvements (defined therein) by RIDA which will
be conveyed to the City and the Port, as applicable, as described in the Project Implementation
Agreement; and
WHEREAS, by the adoption of Resolution No. 2019-221 on November 19, 2019
(“Resolution No. 2019-221”), the City Council, acting as the legislative body for the District,
expressly deemed that the public convenience and necessity require that a bonded indebtedness of
the District be incurred as authorized under the terms and provisions of Chapter 3.61 to contribute
to the financing of the Improvements (as such term is defined in Resolution No. 2019-221), such
indebtedness to be incurred pursuant to the terms and provisions of Chapter 3.61 and the City of
Chula Vista Debt Policy; and
WHEREAS, the Convention Center and the Phase 1A Infrastructure Improvements
constitute Improvements within the meaning set forth in Resolution No. 2019-221 and are eligible
for financing by the District; and
WHEREAS, at this time the City Council desires to set forth the general terms and
conditions relating to the authorization, issuance and administration of such indebtedness of the
District; and
WHEREAS, the financing of the Convention Center and the Phase 1A Infrastructure
Improvements (together, the “Project”) will be accomplished through the issuance by the Authority
of its Chula Vista Bayfront Facilities Financing Authority Revenue Bonds (Chula Vista Bayfront
Convention Center) Series 2021A (Federally Taxable) (the “2021A Bonds”) and its Chula Vista
Bayfront Facilities Financing Authority Revenue Bonds (Chula Vista Bayfront Phase 1A
Infrastructure Improvements) Series 2021B (Tax-Exempt) (the “2021B Bonds” and, together with
the 2021A Bonds, the “Authority Bonds”) pursuant to the terms of an Indenture of Trust by and
between Wilmington Trust, National Association (the “Trustee”) and the Authority (the
“Indenture”), which will be payable, in part, from the repayment by the District of a loan made by
the Authority to the District from a portion of the proceeds of the Authority Bonds (the “Loan”)
pursuant to the terms of a Loan Agreement (the “Loan Agreement”) to be entered into by and
between the District, the Authority and Wilmington Trust, National Association, as trustee; and
WHEREAS, the Authority Bonds will be sold to J.P. Morgan Securities LLC (the
“Underwriter”) pursuant to the terms of a Bond Purchase Agreement (the “Bond Purchase
Agreement”) by and among the Underwriter, the City, the Port District, the Authority and the
District; and
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WHEREAS, prior to or in connection with the issuance of the Authority Bonds, a number
of documents will be executed and delivered including the Ground Lease, the Site Lease, the
Facility Lease, the Sublease, the Bond Purchase Agreement, the Authority Indenture, the Loan
Agreement, the Project Implementation Agreement, the Support Agreement, the Enforcement
Agreement, the Amendment No. 1 to the JEPA Agreement, the Third Amended and Restated
Revenue Sharing Agreement and the Amended and Restated Joint Community Facilities
Agreement and any exhibits thereto, such as the Completion Guaranty (as defined in the Project
Implementation Agreement) (collectively, the “Chula Vista Bayfront Documents”); and
WHEREAS, the City Council has been presented with the form of each document referred
to above relating to the proposed financing of the Project, and the City Council , with the aid of
City staff, has reviewed and considered the Project Implementation Agreement, the Loan
Agreement and the Bond Purchase Agreement 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 execution of the
Loan Agreement, good faith estimates of: (a) the true interest cost of the Loan, (b) the finance
charge of the Loan, meaning the sum of all fees and charges paid to third parties, (c) the amount
of proceeds of the Loan to be received less the finance charge described above and any reserves
or capitalized interest paid or funded with proceeds of the Loan and (d) the sum total of all debt
service payments on the Loan calculated to the final maturity of the Loan plus the fees and charges
paid to third parties not paid with the proceeds of the Loan; and
WHEREAS, in accordance with Section 5852.1, the City Council has obtained such good
faith estimates from Harrell & Company Advisors, LLC, the City’s municipal advisor, and such
estimates are disclosed in Exhibit A attached hereto based on interest rates and financing
assumptions provided by the Underwriter; and
WHEREAS, the proposed approvals described herein with respect to the Project have been
analyzed for compliance with the California Environmental Quality Act (CEQA) and the City has
determined that the activities involved with such approvals are covered in the previously adopted
Environmental Impact Report UPD#83356-EIR-65B/SCH#2005081077 related to the CVBMP,
and the addendums thereto (collectively, the “Project EIR”) and that the proposed City Council
actions included herein are merely a step-in furtherance of the original project for which
environmental review was performed and that no circumstances have arisen triggering the
requirement for any supplemental or subsequent CEQA analysis as a result of the adoption of this
Resolution and the actions approved herein in that: 1) no substantial changes are proposed to the
project analyzed in the Project EIR and no substantial changes have occurred that require major
revisions to the Project EIR due to the involvement of new significant environmental effects or an
increase in severity of previously identified significant effects; 2) no new information of
substantial importance has come to light that (a) shows the Project will have one or more
significant effects not discussed in the Project EIR, (b) identifies significant impacts would not be
more severe than those analyzed in the Project EIR, or (c) shows that mitigation measures or
alternatives are now feasible that were identified as infeasible and those mitigation measures or
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alternatives would reduce significant impacts, and 3) no changes to mitigation measures or
alternatives have been identified or are required, and, accordingly, pursuant to CEQA Guidelines
§15162(b), the City Council finds that no further analysis or environmental documentation is
necessary; and
WHEREAS, all acts, conditions and things required by the laws of the State of California
to exist, to have happened and to have been performed precedent to and in connection with the
consummation of the financing of the Project authorized hereb y do exist, have happened and have
been performed in regular and due time, form and manner as required by law, and the District is
now duly authorized and empowered, pursuant to each and every requirement of law, to undertake
the actions described herein related to the financing of the Project for the purpose, in the manner
and upon the terms herein provided.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista,
acting as the legislative body of the Bayfront Project Special Tax Financing District, that:
SECTION 1. Each of the above recitals is true and correct.
SECTION 2. Pursuant to Chapter 3.61, the Loan in an aggregate principal amount not to
exceed $175,000,000 is hereby authorized to be entered into. 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 Loan shall be as provided in the Loan Agreement as finally executed.
SECTION 3. The forms of the Project Implementation Agreement, Loan Agreement and
Bond Purchase Agreement (the “District Agreements”) presented to the City Council at this
meeting, are hereby approved, and each of the Mayor of the City (the “Mayor”), the City Manager
of the City (the “City Manager”), any Deputy City Manager of the City (the “Deputy City
Manager”) and the Director of Finance/Treasurer of the City (the “Director of Finance”) and their
designees (collectively, the “Authorized Officers”), acting alone, is hereby authorized and
directed, for and in the name and on behalf of the District, to execute and deliver the District
Agreements in substantially said forms, with such changes, with such changes as may be made in
accordance with the delegation authority provided in the following paragraph.provided, however,
that (a) the authorization to execute the District Agreements is contingent upon the approval by
the Authority of a resolution authorizing the issuance of the Authority Bonds and approving the
District Agreements to which it is a party, (b) the term of the Loan Agreement shall not exceed
forty years, and (c) the principal amount of the Loan shall not exceed $175,000,000.
The City Council hereby delegates to the Authorized Officers the authority to make and
consent to changes to one or more of the Chula Vista Bayfront Documents to facilitate the
financing and construction of the Hotel, the Phase 1A Infrastructure Improvements, and the
Convention Center which an Authorized Officer determines are needed (i) to eliminate any
inconsistencies among any of the Chula Vista Bayfront Documents; (ii) to cure any ambiguity or
defective provision in any of the Chula Vista Bayfront Documents; (iii) to respond to market
conditions related to the structuring and marketing of the Authority Bonds as identified by the
Underwriter, including, but not limited to, rating requirements; (iv) to reflect the final terms of the
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sale by the Underwriter of the Authority Bonds; and (v) to facilitate the required private financing
for the Hotel and Convention Center or otherwise necessary to facilitate the issuance of the
Authority Bonds and the construction of the Hotel, Phase 1A Infrastructure Improvements, and
the Convention Center; provided, however that such changes shall not (x) increase the
indemnification obligations of the City; (y) result in an additional contribution of funds by the City
(except to a de minimis amount (not to exceed $500,000 in total)); or (z) materially increase the
obligations of the City, which changes shall be based on the advice of the City Attorney, and
approved by an Authorized Officer through the Authorized Officer’s execution (or as to documents
to which the City is not a party, such Authorized Officer’s written consent) of the Chula Vista
Bayfront Documents incorporating the changes proposed, and shall be conclusively evidenced by
the delivery by the City of the executed Chula Vista Bayfront Documents with the changes or its
written consent to such changes, as applicable.
SECTION 4. The Authorized Officers and the City Attorney are authorized to take
whatever steps are necessary and appropriate for a judicial validation action to be filed pursuant to
Code of Civil Procedure Section 860 et seq. to obtain a court ruling on the validity of some or all
of the District Agreements and of the Authority Bonds.
SECTION 5. The Authorized Officers and other officers, employees and agents of the
City, acting for and in the name and on behalf of the District are hereby au thorized and directed,
jointly and severally, to do any and all things which they may deem necessary or advisable in order
to consummate the transactions herein authorized and otherwise to carry out, give effect to and
comply with the terms and intent of this Resolution, including, but not limited to, other certificates
or agreements required pursuant to the terms of the Bond Purchase Agreement or by the Authority,
the City and the Port District as a condition to their consummating the transactions herein
authorized. In addition, following the issuance of the Authority Bonds, each of the Authorized
Officers, acting alone, is authorized to take any and all actions required of the District under the
District Agreements including, but not limited to, executing required certificates, granting
consents, filing reports and sending notices on behalf of the District in forms approved by the City
Attorney. All actions heretofore taken by the Authorized Officers and other officers, employees
and agents of the City, acting for and in the name and on behalf of the District with respect to the
CVBMP and the matters described herein are hereby approved, confirmed and ratified.
SECTION 6. This Resolution shall take effect immediately upon its passage.
[SIGNATURES ON THE FOLLOWING PAGE]
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Presented by Approved as to form by
Tiffany Allen Glen R. Googins
Director of Development Services City Attorney
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 15th day of June 2021 by the following vote:
AYES: Councilmembers: Cardenas, Galvez, Padilla, and Casillas Salas
NAYS: Councilmembers: None
ABSENT: Councilmembers: McCann
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. 2021-128 was duly passed, approved, and adopted by the City Council at a regular
meeting of the Chula Vista City Council held on the 15th day of June 2021.
Executed this 15th day of June 2021.
Kerry K. Bigelow, MMC, City Clerk
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EXHIBIT A
SB 450 GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Authority Bonds
in accordance with California Government Code Section 5852.1. Such good faith estimates have
been provided to the City Council, acting as the legislative body of the Bayfront Project Special
Tax Financing District (the “District”) by Harrell & Company Advisors, LLC, the municipal
advisor (the “Municipal Advisor”), based on interest rates and financing assumptions provided by
J.P. Morgan Securities LLC (the “Underwriter”).
Principal Amount. The Municipal Advisor has informed the District that, based on the
financing plan and current market conditions, its good faith estimate of the aggregate principal
amount of the Loan is $135,900,000 (the “Estimated Principal Amount”).
True Interest Cost of the Loan. The Municipal Advisor has informed the District that,
assuming that the Estimated Principal Amount of the Loan is sold, and based on market interest
rates prevailing at the time of preparation of such estimate, its good faith estimate of the true
interest cost of the Loan, which means the rate necessary to discount the amounts payable on the
respective principal and interest payment dates to the purchase price received for the Loan, is
5.00%.
Finance Charge of the Loan. The Municipal Advisor has informed the District that,
assuming that the Estimated Principal Amount of the Loan is sold, and based on market interest
rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance
charge for the Loan, which means the sum of all fees and charges paid to third parties (or costs
associated with the Loan), is $3,400,000.
Amount of Proceeds to be Received. The Municipal Advisor has informed the District that,
assuming that the Estimated Principal Amount of the Loans is sold, and based on market interest
rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount
of proceeds expected to be received by the District for sale of the Loan, less the finance charge of
the Loan, as estimated above, and any reserves or capitalized interest on the Loan paid or funded
with proceeds of the Loan, is $102,600,000.
Total Payment Amount. The Municipal Advisor has informed the District that, assuming
that the Estimated Principal Amount of the Loan is sold, and based on market interest rates
prevailing at the time of preparation of such estimate, its good faith estimate of the total payment
amount, which means the sum total of all payments the District will make to pay the Loan,
calculated to the final maturity of the Loan, is $388,000,000 and the annual cost to administer the
Loan, not paid with the proceeds of the Loan is $25,000.
The foregoing estimates constitute good faith estimates only and are based on market
conditions prevailing assumed by the Underwriter at the time of preparation of such estimates on
May 11, 2021. The actual principal amount of the Loan, the true interest cost thereof, the finance
charges thereof, the amount of proceeds received therefrom and total payment amount with respect
thereto may differ from such good faith estimates due to (a) the actual date of the Loan being
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different than the date assumed for purposes of such estimates, (b) the actual principal amount of
the Loan being different from the Estimated Principal Amount, (c) the actual amortization of the
Loan being different than the amortization assumed for purposes of such estimates, (d) the actual
market interest rates at the time of sale of the Loan being different than those estimated for
purposes of such estimates, (e) other market conditions, or (f) alterations in the District’s financing
plan, or a combination of such factors. The actual date of sale of the Loan and the actual principal
amount of the Loan will be determined by the District based on various factors. The actual interest
rates borne by the Loan will depend on market interest rates at the time of sale thereof. The actual
amortization of the Loan will also depend, in part, on market interest rates at the time of sale
thereof. Market interest rates are affected by economic and other factors beyond the control of the
District or the Municipal Advisor.
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