HomeMy WebLinkAboutCity~HFC background NarrativeBackground Narrative–University MDA:
LOA History
In April 2008, the City and Otay Land Company, an affiliate of HomeFed, entered into a
contract known as the “Land Offer Agreement” or “LOA.”In sum, the LOA set the
parameters for Otay Land Company to process entitlements that would significantly change
the future of Otay Ranch.Shortly thereafter, another developer in Otay Ranch entered into a
similar agreement with the City. HomeFed has since acquired that property. Under the LOA,
Otay Land Company agreed to process an assortment of entitlements, such as GPA’s,
GDPA’s, SPA plans, tentative maps, and associated EIRs, which would allow for the
development of 6,050 residential units and 1.8 million square feet of commercial
development, among other uses, public and private. If approved, Otay Land Company
would dedicate to the City 50 acres for future university use and 160 acres of open space.
To jumpstart the university planning and marketing efforts, OLC donated $2 million to the
City for those purposes. In the event the City ultimately does not utilize the dedicated land
for university or university-related uses, OLC has the right to repurchase the land. The LOA
envisioned a long-term public/private partnership for the development of a university in Otay
Ranch beneficial to both parties, the current and future residents of Chula Vista, as well as
the region as a whole. The City Council later approved the proposed entitlements. As a
result, Otay Ranch was reshaped with the vision of a four-year university, with
complimentary land uses at densities appropriate to support the City’s vision for a vibrant,
job-rich, and amenity filled Otay Ranch.
Entity Goals:
HomeFed is a master planned community developer operating in a for-profit model.
O HomeFed’s villages were purchased, planned and entitled for development of a
broad range of market rate uses, enabled by market rate development revenue
projections.
O Land value is enhanced through the planning, positioning and development of
successful master planned communities, resulting in revenue from the sale and
lease of parcels for homes, businesses, schools and parks in these communities.
O Revenue from the sale and/or lease of various parcels must be sufficient to offset
the initial investment of development costs and leave profits commensurate with the
risk.
O HomeFed’s Village 9 and 10 have approved SPA and tentative maps.
The City of Chula Vista is a non-profit municipality.
O The City has a longstanding goal of causing a University District to be established
at the University and Innovation District/EUC Corridor.
Any potential revenue generated from the University and Innovation
development effort has always been planned to be retained for the benefit of
the UID and/or CVUP (for the purpose of offsetting development expenses of
University parcels and/or to be used for incentive offerings for anchor tenant
attraction).
It was the City’s intention that revenue generated from University
development was to be used ‘toward the UID cause’, and not allocated to the
City’s general fund. Additionally, potential revenue from development was not
thought to be of an amount sufficient to cover the necessary expenses of
building the entire University and Innovation district.
O Educational, Social and Economic Benefit to the City of Chula Vista from an established
University and Innovation District are anticipated to be from:
Access to four-year degree offerings, workforce training
Regional Spending by University Anchor Tenants and related partners
Local Tax Revenue generated by University Anchor Tenants and related partners
Increased local earnings by Alumni of the University Anchor Tenants
Jobs created in the region by University Anchor Tenants, related partners and
subsequent graduates