HomeMy WebLinkAboutCVRC Agenda Packet 2006/06/22
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CORPORATION
CHULA VISTA
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REGULAR MEETING OF THE
CHULA VISTA REDEVElOPMENT CORPORATION (CVRC)
MEETING JOINTLY WITH THE
REDEVElOPMENT AGENCY AND CITY COUNCIL
OF THE CITY OF CHULA VISTA
Thursday, June 22, 2006, 6:00 p.m.
COUNCIL CHAMBERS
276 FOURTH AVENUE
CHULA VISTA, CA 91910
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CALL TO ORDER
CVRC ROLL CALL
Board Members Castaneda, Chavez, Desrochers, Lewis,
McCann, Paul, Rindone, Rooney and Chairman Padilla
CITY COUNCILlREDEVELOPMENT AGENCY ROLL CALL
Council/Agency Members Castaneda, Chavez, McCann,
Rindone, and Mayor/Chair Padilla
PLEDGE OF ALLEGIANCE, MOMENT OF SILENCE
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CONSENT CALENDAR
(Item 1)
1. APPROVAL OF MINUTES
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Staff Recommendation: That the CVRC approve the minutes
of May 25, 2006.
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PUBLIC COMMENTS
ACTION ITEMS
2. CONSIDERATION OF ISSUANCE AND SALE BY THE
REDEVELOPMENT AGENCY OF TAX ALLOCATION
REFUNDING BONDS, IN TWO OR MORE SERIES, IN
THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO
EXCEED $28.5 MILLION IN CONNECTION WITH THE
BAYFRONTrrOWN CENTRE I REDEVELOPMENT
PROJECT
2. Continued
The Chula Vista Redevelopment Corporation is a recommending body to the Chula
Vista Redevelopment Agency on financial matters involving redevelopment funds. The
refunding of the 1994 Senior Tax Allocation Refunding Bonds, Series A and D, and the
1994 Subordinate Tax Allocation Refunding Bonds, Series C, based on current
projections, would provide an annual debt service savings to the Redevelopment
Agency of $500,000, or a total savings of $4.8 million over the remaining 20 years of
the bonds (20% of the par amount of the bonds).
Staff Recommendation:
The CVRC adopt the foJ/owing resolutions (2.a.) and (2.b.)
a. RESOLUTION OF THE CHULA VISTA REDEVElOPMENT CORPORATION
RECOMMENDING THE ISSUANCE BY THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA OF TAX ALLOCATION REFUNDING
BONDS, IN TWO OR MORE SERIES, IN THE AGGREGATE PRINCIPAL
AMOUNT OF NOT TO EXCEED $28,500,000 (BAYFRONTITOWN
CENTRE)
b. RESOLUTION OF THE CHULA VISTA REDEVELOPMENT CORPORATION
RECOMMENDING THAT THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA WAIVE THE
CONSULTANT SElECTION PROCESS AND APPROVE A FIRST
AMENDMENT TO THE AGREEMENT WITH E.). DE LA ROSA & CO. AS
UNDERWRITERS FOR THE REFUNDING OF THE CITY OF CHULA VISTA
REDEVElOPMENT AGENCY 1994 SUBORDINATE TAX AllOCATION
REFUNDING BONDS, SERIES C AND 1994 SENIOR TAX ALLOCATION
REFUNDING BONDS, SERIES D; WAIVE THE CONSULTANT SELECTION
PROCESS AND APPROVE THE SECOND AMENDMENT TO THE
AGREEMENT WITH HARREll & COMPANY ADVISORS, llC TO SERVE AS
FINANCIAL ADVISORS
The City Council adopt resolution (2.c)
c. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE ISSUANCE BY THE REDEVElOPMENT AGENCY OF THE
CITY OF CHULA VISTA OF TAX AllOCATION REFUNDING BONDS, IN
TWO OR MORE SERIES, IN THE AGGREGATE PRINCIPAL AMOUNT OF
NOT TO EXCEED $28,500,000 (BAYFRONTITOWN CENTRE)
Page 2 of 6 CVRC - Agenda - 06/22/06
2. Continued
The Redevelopment Agency adopt resolution (2.d)
d. RESOLUTION OF THE REDEVElOPMENT AGENCY OF THE CITY OF
CHULA VISTA AUTHORIZING THE ISSUANCE AND SALE OF TAX
ALLOCATION REFUNDING BONDS, IN TWO OR MORE SERIES, IN THE
AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $28,500,000 IN
CONNECTION WITH THE BAYFRONTrrOWN CENTRE REDEVElOPMENT
PROJECT, AND APPROVING RElATED DOCUMENTS AND ACTIONS
The City Council and Redevelopment Agency adopt resolution (2.e)
e. JOINT RESOLUTION OF THE CITY COUNCIL AND THE
REDEVElOPMENT AGENCY OF THE CITY OF CHULA VISTA WAIVING
THE CONSULTANT SElECTION PROCESS AND APPROVING A FIRST
AMENDMENT TO THE AGREEMENT WITH E.J. DE LA ROSA & CO. AS
UNDERWRITERS FOR THE REFUNDING OF THE CITY OF CHULA VISTA
REDEVElOPMENT AGENCY 1994 SUBORDINATE TAX ALLOCATION
REFUNDING BONDS, SERIES C AND 1994 SENIOR TAX AllOCATION
REFUNDING BONDS, SERIES D; WAIVING THE CONSULTANT
SElECTION PROCESS AND APPROVING THE SECOND AMENDMENT TO
THE AGREEMENT WITH HARRElL & COMPANY ADVISORS, llC TO
SERVE AS FINANCIAL ADVISORS; AND AUTHORIZING THE MAYOR TO
EXECUTE THE AMENDMENTS TO THE AGREEMENTS
3. CONSIDERATION OF EXClUSIVE NEGOTIATING AGREEMENT AND
FINANCIAL ASSISTANCE FOR AN AFFORDABLE RENTAL HOUSING
DEVElOPMENT WITHIN THE MERGED REDEVELOPMENT AREA
Wakeland Housing and Development Corporation is interested in developing an
affordable, family rental project on the former Tower Lodge Motel site located at 1151
Broadway. Currently vacant, the former Tower Lodge Motel, represents an opportunity
to remove an existing blighted property and the provision of new housing opportunities
for predominately very low income households. In order to determine the feasibility of
this project, staff is proposing financial assistance in the form of a predevelopment loan.
The Agency is requested to consider a Predevelopment Loan Agreement for $200,000.
Staff Recommendation:
The CVRC adopt the following resolutions (3.a.) and (3.b.):
a.
RESOLUTION OF THE CHULA VISTA REDEVElOPMENT CORPORATION
APPROVING AN EXCLUSIVE NEGOTIATING AGREEMENT BETWEEN THE
Page 3 of 6
CVRC - Agenda - 06/22/06
3. Continued
REDEVELOPMENT AGENCY AND WAKELAND HOUSING AND
DEVELOPMENT CORPORATION REGARDING THE POTENTIAL
DEVELOPMENT OF A REAL ESTATE PROJECT LOCATED AT 1501
BROADWAY IN THE CITY OF CHULA VISTA
b. RESOLUTION OF THE CHULA VISTA REDEVELOPMENT CORPORATION
RECOMMENDING [A] APPROVAL OF A PREDEVELOPMENT LOAN
AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY AND
WAKELAND HOUSING AND DEVELOPMENT CORPORATION FOR THE
DEVELOPMENT OF AN AFFORDABLE RENTAL HOUSING
DEVELOPMENT TO BE LOCATED AT 1501 BROADWAY IN THE CITY OF
CHULA VISTA AND AUTHORIZING THE CHAIRMAN OF THE
REDEVELOPMENT AGENCY TO EXECUTE SAID AGREEMENT; AND [B]
APPROPRIATION OF $200,000 FROM THE UNAPPROPRIATED BALANCE
IN THE LOW AND MODERATE INCOME HOUSING FUND FOR SAID
PREDEVELOPMENT LOAN TO WAKELAND HOUSING AND
DEVELOPMENT CORPORATION
The Redevelopment Agency adopt resolution (3.e):
c. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA APPROVING [A] A PREDEVELOPMENT LOAN
AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY AND
WAKELAND HOUSING AND DEVELOPMENT CORPORATION FOR THE
DEVELOPMENT AND OPERATION OF AN AFFORDABLE RENTAL
HOUSING DEVELOPMENT TO BE LOCATED AT 1501 BROADWAY IN
THE CITY OF CHULA VISTA AND AUTHORIZING THE CHAIRMAN OF
THE REDEVELOPMENT AGENCY TO EXECUTE SAID AGREEMENT; AND
[B] APPROPRIATION OF $200,000 FROM THE UNAPPROPRIATED
BALANCE IN THE LOW AND MODERATE INCOME HOUSING FUND
FOR THE PREDEVELOPMENT LOAN TO WAKELAND HOUSING AND
DEVELOPMENT CORPORATION
4. CONSIDERATION OF THE PROCEDURAL FRAMEWORK FOR THE CHULA
VISTA REDEVELOPMENT CORPORATION PROJECT/APPLICATION REVIEW
PROCESS
Second phase of a three-part discussion to propose a framework of step-by-step
procedures for the Chula Vista Redevelopment Corporation's review and consideration
of development projects and applications, including when the CVRC and public should
be involved in the process. Phase I - Review of the Roles and Responsibilities of the
CVRC was discussed March 9, 2006.
Page 4 of 6
CVRC - Agenda - 06/22/06
4. Continued
Staff Recommendation: That the CVRC adopt the following resolution:
RESOLUTION OF THE CHULA VISTA REDEVELOPMENT CORPORATION
APPROVING A PROCEDURAL FRAMEWORK FOR CVRC REVIEW AND
CONSIDERATION OF DEVELOPMENT PROJECTS AND APPLICATIONS
5. CONSIDERATION OF CVRC PUBLIC PARTICIPATION PROCESS
Final phase of a three-part discussion to adopt a public participation process for the
CVRe.
Staff Recommendation: That the CVRC adopt one of the following resolutions (5.a.) or
(5.b.):
a. RESOLUTION OF THE CHULA VISTA REDEVELOPMENT CORPORATION
ADOPTING A PUBLIC PARTICIPATION POLICY ESTABLISHING A
COMMUNITY-WIDE REDEVELOPMENT ADVISORY COMMITTEE TO
GATHER PUBLIC INPUT AND MAKE RECOMMENDATIONS TO THE
CHULA VISTA REDEVELOPMENT CORPORATION ON DEVELOPMENT
PROJECTS AND APPLICATIONS
-or-
b. RESOLUTION OF THE CHULA VISTA REDEVELOPMENT CORPORATION
ADOPTING A PUBLIC PARTICIPATION POLICY ESTABLISHING THE
CHULA VISTA REDEVELOPMENT CORPORATION AS THE PUBLIC
PARTICIPATION VEHICLE TO GATHER PUBLIC INPUT ON
DEVELOPMENT PROJECTS AND APPLICATIONS
6. CHIEF EXECUTIVE OFFICER'S REPORTS
a. Status of the Recruitment Process for the CVRC Chief Executive Officer
7. CHAIRMAN'S REPORTS
8. DIRECTORS' COMMENTS
Page 5 of 6
CVRC - Agenda - 06/22/06
ADJOURNMENT
The Chula Vista Redevelopment Corporation will adjourn to its next regularly scheduled
meeting on July 13, 2006, at 6:00 p.m. The City Council will adjourn to its next regularly
scheduled meeting on July 11, 2006, at 6:00 p.m. The Redevelopment Agency will
adjourn to its next regularly scheduled meeting on July 18, 2006, at 6:00 p.m.
In compliance with the
AMERICANS WITH DISABILITIES ACT
The Chula Vista Redevelopment Corporation requests individuals who require special accommodations to
access, attend. and/or participate in a CVRC meeting, activity, or service request such accommodation at
least forty-eight hours in advance for meetings and five days for scheduled services and activities. Please
contact the Community Development Department for specific information at (619) 691-5047, or
Telecommunications Devices for the Deaf (TDD) at (619) 585-5655. California Relay Service is also
available for the hearing impaired.
Page 6 of 6
CVRC - Agenda - 06/22/06
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CORPORATION
CHUL/\ VISTA
CVRC Board
Staff Report - Page 1
Item No. 2
DATE:
June 22, 2006
FROM:
CVRC Board Directors, Mayor and Council members, RDA Chair and RDA
Board Members
Maria Kachadoorian, Chief Financial Officetl~~
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Jim Thomson, Interim Chief Executive Officer (jI
TO:
VIA:
SUBJECT:
Recommendation to the Redevelopment Agency and City Council
regarding Issuance and Sale of Tax Allocation Refunding Bonds
BACKGROUND:
On March 22, 2005, City Council and Agency approved agreements with Harrell & Co.
and E.J. De La Rosa & Co. (see attached B) to determine the feasibility of refunding the City
of Chula Vista Redevelopment Agency 1994 Senior Tax Allocation Refunding Bonds,
Series A. Based on current market rates at the time, the refinancing of these obligations
would have resulted in an estimated savings of $ 2.3 million or 17.9% of the par amount
over the life of the bonds based on an assumed interest rate of 4.93%. Due to unforeseen
circumstances, the refunding was delayed. However, at this time, the 1994 Senior Tax
Allocation Refunding Bonds, Series D and the 1994 Subordinate Tax Allocation Refunding
Bonds, Series C are also eligible for refunding. This was not the case in March 2005. Staff
has now determined that it is feasible to refinance all three outstanding bond issues. Based
on the current market rate, the refunding should result in an estimated total savings of $4.B
million, or 20% of the par amount of the bonds.
RECOMMENDATION:
1) That the Board of Directors of the Corporation adopt a resolution recommending to
the Redevelopment Agency and City Council to proceed with the issuance of Tax
Allocation Refunding Bonds in two or more series, in the aggregate principal amount
of not to exceed $28.5 million.
2) That the Board of Directors of the Corporation adopt a resolution recommending to
the Redevelopment Agency and the City Council to enter into the second amendment
to the City's contract with Harrell & Co. Advisors, financial advisor and the first
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Staff Report - Item No.2
June 22, 2006
Page 2
amendment to the agreement with E.J. De La Rosa, underwriter which are necessary to
facilitate the C and D series refundings.
3) That the City Council adopt a resolution approving the issuance of Tax Allocation
Refunding Bonds in two or more series, in the aggregate principal amount of not to
exceed $28.5 million by the Redevelopment Agency.
4) That the Redevelopment Agency adopt a resolution authorizing the issuance of Tax
Allocation Refunding Bonds in two or more series, in the aggregate principal amount
of not to exceed $28.5 million.
5) That the Redevelopment Agency and the City Council adopt a resolution approving
entering into the second amendment to the City's contract with Harrell & Co.
Advisors, financial advisor and the first amendment to the agreement with E.J. De La
Rosa, underwriter which are necessary to facilitate the C and D series refundings.
DISCUSSION:
On September 20, 1994, the Redevelopment Agency authorized the issuance of the 1994
Senior Tax Allocation Refunding Bonds, Series A and Band 1994 Subordinate Tax
Allocation Refunding Bonds, Series C, to advance refund the 1986 Tax Allocation Bonds
previously issued by the Agency for the BayfrontITown Centre I Redevelopment Project
Area. The Series B Bonds were issued on a taxable basis and were subsequently refunded
on a tax-exempt basis with the issuance of the 1994 Senior Tax Allocation Refunding
Bonds, Series D.
As of May 1, 2006, there was $24.4 million in outstanding bonds of all series with an
average net interest cost of 8.0% and a final maturity date of 2024. The 1994 Senior Tax
Allocation Refunding Bonds, Series A and Series D are callable on September 1, 2006 and
can be refunded up to 90 days prior, beginning June 1, 2006. The 1994 Subordinate Tax
Allocation Refunding Bonds, Series C are callable on November 1, 2006 and can be
refunded up to 90 days prior, beginning August 1, 2006. Based on preliminary research
conducted by Harrell & Co. Advisors, strictly on a contingent fee basis, it appears that the
Agency would save approximately $500,000 per year on their annual debt service
payments as a result of a refunding under current market conditions with an assumed
average interest rate of 5.00%. The savings between the series are broken down as
follows:
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Staff Report - Item No.2
June 22, 2006
Page 3
Current Estimated Estimated Annual
Series Amount Rate Rate Savings
1994 Series A $12,590,000 7.625% 4.50%* $240,000
1994 Series C 6,855,000 8.22% 5.25% $160,000
1994 Series D 4,945,000 8.625% 5.25% $100,000
Totals $24,390,000 $500,000
* Based on obtaining bond insurance for the 2006 Series A Bonds only.
The City Finance Director will continue working with Harrell and Co., financial advisors,
and Stradling, Yocca, Carlson & Rauth, bond counsel, analyzing the feasibility of the
refunding, determine the optimum structure and market timing of this refunding. At this
time, it is anticipated that the Agency would issue 2006 Senior Tax Allocation Refunding
Bonds, Series A to refinance the 1994 Series A Bonds and would issue 2006 Subordinate
Tax Allocation Refunding Bonds, Series B to refinance the 1994 Series C Bonds and 1994
Series D Bonds. However, this second series may be further split into two separate series
depending on the closing date selected for the transaction, but will not add to the costs of
issuing the bonds.
A resolution will be presented for the Redevelopment Agency's consideration which will
authorize the Finance DirectorfTreasurer to enter into the Bond Purchase Agreement with
E.J. De La Rosa & Co. finalizing the pricing of the 2006 Senior Tax Allocation Refunding
Bonds, Series A and the 2006 Subordinate Tax Allocation Refunding Bonds, Series B at not
to exceed interest rate for either series of 6.5%: Although, the actual expected interest rate
is an average of 5.0% (2006 Senior Bonds at 4.5% and 2006 Subordinate Bonds at 5.25%).
Adoption by the Redevelopment Agency of the financing-related resolution would approve
the negotiated sale of the 2006 Senior Bonds in ,a total amount not to exceed $14.5 million
and the 2006 Subordinate Bonds (whether in one series or two series) in a total amount not
to exceed $14 million, approve the necessary documents in the form on file, and authorize
them to be executed and distributed in connection with the sale of the bonds.
In addition, the resolution would authorize the Director of Finance to solicit and obtain
municipal bond insurance on the transaction if it is found to be economically
advantageous. Finally, th\resolution would authorize the Director of Finance to take all
actions as may be necessary to close the financing, including the execution of all required
closing documents.
A resolution will also be presented for the City Council's consideration which will
authorize the Agency issuance of debt, in accordance with the requirements of the
Redevelopment Law.
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Staff Report - Item No.2
June 22, 2006
Page 4
Included with the staff report is the Preliminary Official Statement (Attachments B and C).
All other refunding documents in connection with the refunding are available for review
with the City Clerk.
Contract Amendments
In March 2005, the City and Agency approved agreements with E.). De La Rosa &
Company to serve as underwriter and with Harrell & Co. Advisors to serve as financial
advisor for the original refunding that was contemplated at the time, an approximate $14.5
million financing to refund the 1994 Senior Tax Allocation Refunding Bonds, Series A.
Since the City Council and Agency are being asked to consider approval of a combined
refunding in the amount of $28.5 million, in separate series with different credit
characteristics, an amendment to those agreements in also required.
Appointment of Financial Advisor
Redevelopment Agency financing is complex in nature due to the various project areas,
long-term revenue projections and rating agency coordination. Suzanne Harrell, the
principal representative of Harrell & Co. Advisors has previously performed quite
extensive reviews of the City/Agency outstanding debt in an effort to determine if there
were any economically viable candidates for refinancing. Ms. Harrell has served as
financial advisor on the 2000 Tax Allocation Bonds for the Redevelopment Agency and
various City Certificates of Participation over the past 5 years. In 2000, Ms. Harrell
prepared the Agency's Financial Plan used in determining the bonding capacity for the
Agency by project area.
Harrell & Co. will prepare the bond official statements, project tax increment necessary to
satisfy rating agencies, bond insurers and investors of the availability of sufficient tax
increment revenue to pay debt service, taking into account the dismantling of the power
plant and the implementation of the first stages of the Bayfront Master Plan, assist the
Agency in negotiating the interest rates on the bonds with the underwriter to assure that
the Agency achieves market interest rates. The cost of serving as a Financial Advisor to
refund these bonds will be approximately $85,000 plus expenses.
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Appointment of Underwriter
E. ). De La Rosa & Co. ranks as one of the top underwriters of California municipal bonds.
Since 2000, E.). De La Rosa & Co. has underwritten over 41 tax allocation bond
financings, with a total par amount of over $2 billion. Over the last four years, E.). De La
Rosa & Co. has served as senior manager on more than 22 redevelopment financings. As a
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Staff Report - Item No.2
June 22, 2006
Page 5
result the firm has vast knowledge of redevelopment in California. Following are examples
of some of the most recent redevelopment related financings the Firm has underwritten:
· $191,795,041 Long Beach Finance Authority Revenue Bonds, 2005 Series A (Tax
Exempt) and 2005 Series B (Taxable) (Senior Managers)
· $87,260,000 Redevelopment Agency of the City of Burbank 2003 Refunding Tax
Allocation Bonds, Series A (Golden State Redevelopment Project) (Senior Managers)
· $35,045,000 Long Beach Bond Finance Authority, Tax Allocation Revenue Bonds
(Downtown & North Long Beach Project Areas), Series 2005C
· $34,815,000 Norwalk Redevelopment Agency, Tax Allocation Bonds, 2005 Series
A&B
· $76,225,000 Redevelopment Agency of the City of San Diego, Centre City
Redevelopment Project 2006A (50% Co-Senior Manger)
· $300,015,000 Community Redevelopment Agency of the City of Los Angeles
Bunker Hill Project Revenue Bonds, Series A, 2004B (Taxable) and 2004L (Co-
Senior Managers)
Also, Raul Amezcua, underwriter with E.J. De La Rosa, served as the underwriter for the
San Diego Port Authority in the acquisition of the power plant. His extensive knowledge
related to the power plant and Bayfront will be instrumental in communicating with
potential investors.
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FISCAL IMPACT:
Based on current projections, the refunding would provide an annual debt service savings
to the Redevelopment Agency of $500,000 or a net present value of $4.8 million over the
remaining 20 years of the bonds based on an assumed average interest rate of 5.00%. The
debt service on the 2006 Senior and Subordinate'Tax Allocation Refunding Bonds will be
paid from Tax Increment Revenues generated within the BayfrontITown Centre I Project
Area.
All costs of issuance, including the cost of the underwriter, bond counsel, disclosure
documents etc. will be pai~ from the bond proceeds. The amended fees are summarized
as follows:
Financial Advisor - A fee of $55,000 for the issuance of the 2006 Series A Bonds and a fee
of $30,000 for the issuance of the 2006 Series B Bonds is contingent on refunding of the
bonds.
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Staff Report - Item No.2
June 22, 2006
Page 6
Underwriter - The average fee is estimated at 1.21% of the par amount of the bonds or
$315,000 based on an estimated bond sizing of $26 million. Specifically, the fee
proposed by the Underwriter is 0.9% of the par amount of the bonds based that have a
AAA-insured rating, 1.1 % of the par amount of the bonds based that have a BBB rating for
the bonds and 1.55% of the par amount of the bonds if unrated.
Bond Counsel and Disclosure Counsel - A combined fee of approximately $71,000 for
Bond Counsel services and a combined fee of approximately $32,000 for Disclosure
Counsel services based on an existing two-party agreement.
ATTACHMENTS:
A - Approved March 22, 2005 Joint City Council and Redevelopment Agency Consultant
Agreement Staff Report
B - Preliminary Official Statement, Series A
C - Preliminary Official Statement, Series B
PREPARED BY: Phillip Davis, Assistant Director of Finance
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CVRC RESOLUTION NO.
RESOLUTION OF THE CHULA VISTA REDEVELOPMENT
CORPORATION RECOMMENDING THE ISSUANCE BY THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
OF TAX ALLOCATION REFUNDING BONDS, IN TWO OR
MORE SERIES, IN THE AGGREGATE PRINCIPAL AMOUNT OF
NOT TO EXCEED $28,500,000 (BA YFRONTrrOWN CENTRE)
WHEREAS, the Redevelopment Agency of the City of Chula Vista (the "Agency") has
detennined at this time to issue its not to exceed $28,500,000 aggregate initial principal amount
of tax allocation bonds, in up to three series, consisting of (a) the Redevelopment Agency of the
City of Chula Vista Bayfrontffown Centre Redevelopment Project 2006 Senior Tax Allocation
Refunding Bonds, Series A in the aggregate principal amount of not to exceed $14,500,000 (the
"Senior"Bonds"), (b) the Redevelopment Agency of the City of Chula Vista Bayfrontffown
Centre Redevelopment Project 2006 Subordinate Tax Allocation Refunding Bonds, Series Band,
if necessary, Series C (the "Series B Bonds" and the "Series C Bonds") in the aggregate principal
amount~fnot to exceed $14,000,000 to provide funds to refinance the Agency's Bayfrontffown
Centre Redevelopment Project 1994 Senior Tax Allocation Refunding Bonds, Series A and D
and its- Bayfrontffown Centre Redevelopment Project 1994 Subordinate Tax Allocation
Refunding Bonds, Series C and will consider on the date hereof its resolution (the "Agency
Resolution") providing for such issuance, a copy of which has been furnished to this Board; and
WHEREAS, the Senior Bonds, the Series B Bonds and Series C Bonds are referred to
herein as the "Bonds"); and
WHEREAS, the Board of Directors of the Chula Vista Redevelopment Corporation (the
"Corporation") wishes at this time to recommenq to the Agency Board the issuance and sale of
the Bonds by the Agency. '
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the
Board o'!'Directors of the Chula Vista Redevelopment Corporation as follows:
Section 1. Approval of the Bonds. The issuance and sale of the Bonds by the
Agency in the aggregate principal amount of not to exceed $28,500,000 in accordance with the
Agency Resolution be and is hereby recommended to the governing board of the Agency.
Section 2. Official Actions. The Chief Executive Officer, Chief Financial Officer
and the Secretary, and any 8(ld all other officers of the Corporation, are hereby authorized and
directed, for and in the name 'and on behalf of the Corporation, to do any and all things and take
any and all actions, including execution and delivery of any and all certificates, agreements,
notices, consents, warrants and other documents which they, or any of them, may deem
necessary or advisable in order to assist the Agency with the lawful issuance and sale of the
Bonds, as described herein.
Section 3. Effective Date. The Secretary shall certify to the passage and adoption of
this Resolution, which shall take effect immediately upon its adoption.
DOCSOCll175311v1/024212-0009
0<.-7
CYRC Resolution No.
Page 2
I HEREBY CERTIFY that the foregoing Resolution was introduced at a regular meeting
of the Board of Directors of the Chula Vista Redevelopment Corporation held June 22, 2006, by
Board member who moved its adoption and passage, by the following vote:
AYES:
NOES:
ABSENT:
SECONDED:
ATTEST:
APPROVED:
Secretary
DOCSOC/1175311 v1l024212-0009
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CVRC RESOLUTION NO.
RESOLUTION OF THE CHULA VISTA REDEVELOPMENT
CORPORATION RECOMMENDING THAT THE CITY COUNCIL
AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA WAIVE THE CONSULTANT SELECTION PROCESS AND
APPROVE A FIRST AMENDMENT TO THE AGREEMENT WITH
EJ. DE LA ROSA & CO. AS UNDERWRITERS FOR THE
REFUNDING OF THE CITY OF CHULA VISTA REDEVELOPMENT
AGENCY 1994 SUBORDINATE TAX ALLOCATION REFUNDING
BONDS, SERIES C AND 1994 SENIOR TAX ALLOCATION
REFUNDING BONDS, SERIES D; WAIVE THE CONSULTANT
SELECTION PROCESS AND APPROVE THE SECOND
AMENDMENT TO THE AGREEMENT WITH HARRELL &
COMPANY ADVISORS, LLC TO SERVE AS FINANCIAL
ADVISORS
. WHEREAS, on September 20,1994, the Redevelopment Agency of the City ofChula Vista (the
"Agency") approved a resolution authorizing the issuance of the 1994 Senior Tax Allocation Refunding
Bonds, Series A, 1994 Senior Tax Allocation Refunding Bonds, Series B (Taxable), 1994 Subordinate
Tax Allocation Refunding Bonds, Series C and 1994 Senior Tax Allocation Refunding Bonds, Series D
(collectively the " 1994 Bonds") to advance refund the 1986 Tax Allocation Bonds previously issued by
the Agency for the BayfrontITown Centre I Redevelopment Project Area; and
WHEREAS, the 1994 Senior Tax Allocation Refunding Bonds, Series D, were issued to refund
the 1994 Senior Tax Allocation Refunding Bonds, Series B (Taxable) in 1996 and the 1994 Senior Tax
Allocation Refunding Bonds, Series B (Taxable) are no longer outstanding; and
WHEREAS, as of June I, 2006, there was $24.4 million in outstanding 1994 Bonds with an
average net interest cost of 8% and a final maturity date of 2024; and
C WHEREAS, the 1994 Series A Bonds and the 1994 Series D Bonds are callable on September I,
2006, and the 1994 Series C Bonds are callable on November I, 2006 and all Bonds can be refunded 90
days prior to such dates; and
WHEREAS, based on preliminary research conducted by Harrell & Co. Advisors, LLC ("Harrell
& Co."), it appears that the Agency would save approximately $500,000 per year on its annual debt
service payments as a result of a refunding under current market conditions with an assumed interest rate
of 5%; and
\
WHEREAS, Agency fmancing is complex in nature due to various project areas, long term
revenue projections and rating agency coordination; and
WHEREAS, Harrell & Co. principal, Suzanne Harrell, has obtained an in-depth understanding of
City and Agency financing matters through worked performed for the City and the Agency during the
past five years, including serving as financial advisor on the 2000 Tax Allocation Bonds, preparing the
cJ.-1
CVRC Resolution No.
Page 2
Agency's Financial Plan in 2000 and reviewing outstanding debt to determine viable candidates for
refinancing; and
WHEREAS, Harrell & Co.'s prior experience and extensive knowledge of City and Agency
bond fmancing matters makes it uniquely qualified to serve as the financial advisor on refunding the
Bonds; and
WHEREAS, E.J. De La Rosa & Co. ("De La Rosa") is qualified to serve as the underwriter for
refunding the 1994 Bonds because it ranks among the top underwriters of California Municipal bonds, it
has served as senior manager on 19 redevelopment financings in California over the last four years and
one of its underwriters, Raul Amezcua, has experience as an underwriter for the San Diego Port
Authority; and
WHEREAS, applying the City's competitive bid process to the selections of a financial advisor
and an underwriter for the refunding would be impractical because of the short time rrame in which the
City and Agency must act to take advantage of the cost savings available under current interest rates;
and
WHEREAS, it is in the City's best interest to waive the competitive bid process in accordance
with Chula Vista Municipal Code 2.56.070.B3, in order to proceed with the refunding in a timely
manner and take advantage of the current favorable interest rates.
NOW, THEREFORE, BE IT RESOLVED, that the Chula Vista Redevelopment Corporation
recommend that the City Council and the Redevelopment Agency of the City of Chula Vista waive the
consultant selection process and approve the First Amendment to the Agreement with E.J. De La Rosa
& Co. as underwriters for the refunding of the City ofChula Vista Redevelopment Agency 1994 Bonds.
BE IT FURTHER RESOLVED, that the, Chula Vista Redevelopment Corporation
recommending that the City Council and the Redevelopment Agency of the City of Chula Vista waive
the consultant selection process and approve the Second Amendment to the Agreement with Harrell &
Company Advisors, LLC to serve as financial advisors for the refunding of the City of Chula Vista
Redevelopment Agency 1994 Bonds.
Presented by
Approved as to form by
Maria Kachadorian
Director of Finance/Treasurer
Ann Moore
City Attorney and Agency Counsel
. .
J;lAttomeyIRESOIAGREEMENTSVOINT Reso Harrell and DeLaRosa June 22, 2006.doc
d2 --10
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE ISSUANCE BY THE REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA OF TAX ALLOCATION REFUNDING
BONDS, IN TWO OR MORE SERIES, IN THE AGGREGATE PRINCIPAL
AMOUNT OF NOT TO EXCEED $28,500,000 (BA YFRONT/TOWN CENTRE)
WHEREAS, the Redevelopment Agency of the City of Chula Vista (the "Agency") has
determined at this time to issue its not to exceed $28,500,000 aggregate initial principal amount
of tax allocation bonds, in up to three series, consisting of (a) the Redevelopment Agency of the
City of Chula Vista Bayfi-ont/Town Centre Redevelopment Project 2006 Senior Tax Allocation
Refwjding Bonds, Series A in the aggregate principal amount of not to exceed $14,500,000 (the
"Senior Bonds"), (b) the Redevelopment Agency of the City of Chula Vista Bayfront/Town
Centre Redevelopment Project 2006 Subordinate Tax Allocation Refunding Bonds, Series Band,
if necessary, Series C (the "Series B Bonds" and the "Series C Bonds") in the aggregate principal
amount of not to exceed $14,000,000 to provide funds to refinance the Agency's Bayfi-ont/Town
Centre Redevelopment Project 1994 Senior Tax Allocation Refunding Bonds, Series A and D
and its Bayfi-ont/Town Centre Redevelopment Project 1994 Subordinate Tax Allocation
Refunding Bonds, Series C and has adopted its resolution (the "Agency Resolution") providing
for such issuance; and
WHEREAS, the Senior Bonds, the Series B Bonds and Series C Bonds are referred to
herein as the "Bonds"); and
WHEREAS, in accordance with the requirements of Section 33640 of the California
Health and Safety Code, the City Council wishes,!!t this time to approve the issuance and sale of
the Bonds by the Agency.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the
City Council of the City of Chula Vista as follows:.
Section 1. ADDroval of the Bonds. The issuance and sale of the Bonds by the
Agency in the aggregate principal amount of not to exceed $28,500,000 in accordance with the
Agency Resolution be and is hereby approved.
Section 2. Effective Date. The City Clerk shall certify to the passage and adoption of
this Resolution, which shall take effect immediately upon its adoption.
"
Section 3. Official Actions. The City Manager and the City Clerk, and any and all
other officers of the City of Chula Vista, are hereby authorized and directed, for and in the name
and on behalf of the City of Chula Vista, to do any and all things and take any and all actions,
including execution and delivery of any and all assignments, certificates, requisitions,
agreements, notices, consents, instruments of conveyance, warrants and other documents which
they, or any of them, may deem necessary or advisable in order to consummate the lawful
issuance and sale of the Bonds, as described herein. Specifically and without limiting the
DOCSOC/l102788v5/024212-0009
d-tl
preceding sentence, the City Manager may evidence the subordination of any right of the City to
payments pursuant to the Tax Sharing Statutes (Cal. Health and Safety Code Section 33607.5,
33607.7) to the pledge of Tax Revenues to the Bonds and any Parity Debt.
* * * * * * * * * * * * * * * * * * *
I HEREBY CERTIFY that the foregoing Resolution was introduced at a regular meeting
of the City Council of the City of Chula Vista held , 2006, by Council member
who moved its adoption and passage by the following vote:
AYES:
NOES:
ABSENT:
SECONDED:
APPROVED:
Stephen C. Padilla, Mayor
ATTEST:
Susan Bigelow, City Clerk
. .
I I
DOCSOC/1102788v5/024212-0009
~-/~
RESOLUTION NO.
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA AUTHORIZING THE ISSUANCE AND SALE OF TAX
ALLOCATION REFUNDING BONDS, IN TWO OR MORE SERIES, IN THE
AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $28,500,000 IN
CONNECTION WITH THE BAYFRONTITOWN CENTRE
REDEVELOPMENT PROJECT, AND APPROVING RELATED
DOCUMENTS AND ACTIONS
WHEREAS, in connection with the Redevelopment Agency of the City ofChula Vista's
activities related to its merged Bayfront Redevelopment Project and Town Centre
Redevelopment Project (collectively, the "Redevelopment Project"), and pursuant to the
Community Redevelopment Law of the State of California, the Redevelopment Agency of the
City of Chula Vista (the "Agency") has issued its Bayfront/Town Centre Redevelopment Project
1994 Senior Tax Allocation Refunding Bonds, Series A in the initial aggregate principal amount
of $14,810,000 (the "1994A Bonds"), its Bayfront/Town Centre Redevelopment Project 1994
Subordinate Tax Allocation Refunding Bonds, Series C in the initial aggregate principal amount
of $8,195,000 (the "1994C Bonds") and its Bayfront/Town Centre Redevelopment Project 1994
Senior Tax Allocation Refunding Bonds, Series D in the initial aggregate principal amount of
$5,680,000 (the "1994D Bonds," the 1994A Bonds, the 1994C Bonds and the 1994D Bonds are
collectively referred to as the "1994 Bonds"); and
WHEREAS, in order to refmance the 1994 Bonds with resulting debt service savings, the
Agency has determined at this time to issue its not to exceed $14,500,000 aggregate principal
amount of Redevelopment Agency of the City of Chula Vista, Bayfront/Town Centre
Redevelopment Project 2006 Senior Tax Allocation Refunding Bonds, Series A (the "Series A
Bonds"), and its not to exceed $14,000,000 aggregate principal amount of Redevelopment
Agency of the City of Chula Vista, Bayfront/Town Centre Redevelopment Project 2006
Subordinale Tax Allocation Refunding Bonds, Series B and Series C, (to the extent provided
under Section &1 hereof) (collectively, the "Series B Bonds") under the provisions of the
Community Redevelopment Law of the State of California (constituting Part 1 of Division 24 of
the California Health and Safety Code) (the "Law"); and
WHEREAS, the principal of and interest on the Series A and Series B Bonds will be
payable from the tax increment revenues received by the Agency from the Redevelopment
Project to the extent described in the Senior Indenture and the Subordinate Indenture described
below; and \
WHEREAS, it is intended that the Bonds be sold at a negotiated sale to the underwriter
identified herein pursuant to the authority of Articles 10 and 11 of Chapter 3, Part 1, Division 2
of Title 5 of the California Govemment Code on the terms set forth in the Bond Purchase
Agreement described below, and in connection with the offering thereof the Agency has caused
to be prepared an Official Statement describing the Bonds, the preliminary form of which is on
file with the Secretary; and
DOCSOC/ll 02785v~024212-0009
d. -/3
WHEREAS, the Agency has duly considered the transactions described above and to
authorize proceedings for the issuance and sale of the Bonds.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the
Redevelopment Agency of the City of Chula Vista as follows:
Section 1. Issuance of the Bonds: Approval of the Senior Indenture and the
Subordinate Indenture.
(a) The Agency hereby authorizes the issuance of the Series A Bonds in the
aggregate principal amount of not to exceed $14,500,000. The Bonds shall be issued pursuant to
the Law and pursuant to an Indenture of Trust, dated as of July 1, 2006 (the "Senior Indenture"),
by and between the Agency and U.S. Bank National Association, as trustee (the "Trustee"). The
Agency hereby approves the Senior Indenture in the fonn on file with the Secretary, together
with such additions thereto and changes therein as the Chainnan shall deem necessary, desirable
or appropriate, and the execution thereof by the Chainnan shall be conclusive evidence of the
approval of any such additions and changes. The Chainnan is hereby authorized and directed to
execute, and the Secretary is hereby authorized and directed to attest and affix the seal of the
Agency to, the final fonn of the Senior Indenture for and in the name and on behalf of the
Agency. The Agency hereby authorizes the delivery and perfonnance of the Senior Indenture.
(b) The Agency hereby authorizes the issuance of the Series B Bonds in the
aggregate principal amount of not to exceed $14,000,000. The Bonds shall be issued pursuant to
the Law and pursuant to an Indenture of Trust, dated as of July 1, 2006 (the "Subordinate
Indenture''), by and between the Agency and U.S. Bank National Association, as trustee (the
"Trustee"). The Agency hereby approves the Subordinate Indenture in the fonn on file with the
Secretary, together with such additions thereto and changes therein as the Chainnan shall deem
necessary, desirable or appropriate, and the execution thereof by the Chainnan shall be
conclusive evidence of the approval of any such additions and changes. The Chainnan is hereby
authorized and directed to execute, and the Secretary is hereby authorized and directed to attest
and affix the seal of the Agency to, the final fonn of the Subordinate Indenture for and in the
name and on behalf of the Agency. The Agency hereby authorizes the delivery and perfonnance
of the Subordinate Indenture.
Section 2. Escrow A~eement. The Escrow Agreement (the "Escrow Agreement")
by and between the Agency and U.S. Bank National Association, as Escrow Agent, with respect
to the 1994A Bonds and 1994D Bonds, on the one hand. and the 1994C Bonds on the other hand,
~ hereby approved in substantially the fonn presented, together with such changes therein or
additions thereto as the Executive Director shall deem necessary, desirable or appropriate, the
Executive Director's executiop iliereof to be conclusive evidence of such approval.
Section 3. Bond Purchase A~eement. The Bond Purchase Agreements (the
"Purchase Agreement") by and among the Agency and E.J. De la Rosa & Co., Inc. (the
"Underwriter") with respect to the Series A Bonds, on the one hand and the Series B Bonds on
the other hand, are hereby approved in substantially the fonn presented, together with such
changes therein or additions thereto as the Executive Director shall deem necessary, desirable or
appropriate, the Executive Director's execution thereof to be conclusive evidence of such
DOCSOCll102785v~024212-OO09
2.;2 _ I c..J.
approval. In no event shall such Purchase Agreements provide for underwriter's discount
(exclusive of original issue discount) in excess of 0.9% of the principal amount of the Bonds that
have a AAA rating, 1.1 % of the principal amount of the Bonds that have a BBB rating, or 1.55%
of the principal amount of Bonds that do not have a rating, or for an average interest rate for any
series in excess of 6.5% per annum. Moreover, the sale of the Bonds shall result in net present
value interest savings to the Agency in an amount at least equal to $4 million.
Section 4. Official Statements. The Agency hereby authorizes the Executive
Director to approve and deem final within the meaning of Rule l5c2-l2 of the Securities
Exchange Act of 1934, except for permitted omissions, a fonn of Official Statement describing
the Series A Bonds in the preliminary fonn on file with the Secretary and a fonn of Official
Statement describing the Series B Bonds in the preliminary fonn on file with the Secretary.
Distribution of such preliminary Official Statements by the Underwriter to prospective
purchasers of the Bonds, with such modifications as may be approved by the Executive Director,
is hereby approved. The Executive Director is hereby authorized to execute the final fonn of
each of the Official Statements, including as each may be modified by such additions thereto and
changes therein as the Executive Director shall deem necessary, desirable or appropriate, and the
execution of the final Official Statements by the Executive Director shall be conclusive evidence
of the approval of any such additions and changes. The Agency hereby authorizes the
distribution of the fmal Official Statements by the Underwriter. The fmal Official Statements
shall be executed in the name and on behalf of the Agency by the Executive Director.
The Executive Director is hereby authorized to execute a certificate or certificates to the
effect that each of the Official Statements and such preliminary official statements were deemed
"fmal" as of their respective dates for purposes of Rule 15c2-12 of the Securities Exchange Act
of 1934, and is authorized to so deem such statements final.
Section 5. Delivery of the Bonds. The Bonds, when executed, shall be delivered to
the Trustee for authentication. The Trustee is heFeby requested and directed to authenticate the
Bonds by executing the Trustee's certificate of authentication and registration appearing thereon,
and to deliver the Bonds, when duly executed and authenticated, upon the written instructions
executed on behalf of the Agency by the Executive Director, which instructions such officer is
hereby authorized and directed, for and in the name and on behalf of the Agency, to execute and
deliver to the Trustee. Such instructions shall provide for the delivery of the Bonds to the
purchaser thereof upon payment of the purchase price therefor.
Section 6. Continuing Disclosure Certificate. The Continuing Disclosure Certificate
for the Series A Bonds and the Series B Bonds, in the fonns on file with the Secretary, are
hereby approved. The Executive Director is hereby authorized and directed, for and in the name
of and on behalf of the Agenty, to execute and deliver each Continuing Disclosure Certificate in
said fonn, with such additions thereto or changes therein as are deemed necessary, desirable or
appropriate by the Executive Director, the approval of such changes to be conclusively
evidenced by the execution and delivery by the Executive Director of the Continuing Disclosure
Certificate.
Section 7. Official Actions. The Chairman, the Executive Director, the Treasurer
and the Secretary of the Agency, and any and all other officers of the Agency, are hereby
DOCSOC/II02785v~024212-0009
3
c:>? ~/ ~
authorized and directed, for and in the name and on behalf of the Agency, to do any and all
things and take any and all actions, including execution and delivery of any and all assignments,
certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and
other documents which they, or any of them, may deem necessary or advisable in order to
consummate the lawful issuance and sale of the Bonds, as described herein. Such actions may
include, but shall not be limited to, negotiating investment agreement(s) relative to funds to be
invested pursuant to the Indenture, the obtaining of bond insurance if available at a net present
value savings to the Agency and the obtaining of a surety for reserve to be issued by a major
bond insurer in lieu of a cash-funded reserve relative to the Bonds if in the judgment of the
Executive Director such surety is financially advantageous to the Agency. If a surety for reserve
is obtained, the Executive Director may execute a reimbursement agreement relative to such
surety in a form required by such insurer, subject to the approval as to form by Bond Counsel.
The Series B Bonds authorized herein may be divided in to two series comprised of a Series B
and Series C to be delivered at different times, to the extent the Executive Director determines it
is necessary or appropriate to the timely, efficient refunding of the 1994 Bonds or any of them.
Such respective Series B Bonds and Series C Bonds shall be secured on a parity with each other,
and each of the Series B Indenture, the applicable Bond Purchase Agreement, Continuing
Disclosure Certificate, Official Statement and Escrow Agreement shall be modified to reflect the
terms of such revised Series B Bonds and additional Series C Bonds. Whenever in this
resolution any officer of the Agency is authorized to execute or countersign any document or
take any action, such execution, countersigning or action may be taken on behalf of such officer
by any person designated by such officer to act on his or her behalf in the case such officer shall
be absent or unavailable.
Section 8. Effective Date. The Secretary shall certify to the passage and adoption of
this Resolution, which shall take effect immediately upon its adoption.
, '
, i
DOCSOClII 02785v~024212-0009
4
Ol-Ifo
I HEREBY CERTIFY that the foregoing Resolution was introduced at a regular meeting
of the Redevelopment Agency of the City of Chula Vista held , 2006, by Agency
member who moved its adoption and passage by the following vote:
AYES:
NOES:
ABSENT:
SECONDED:
APPROVED:
Stephen C. Padilla, Chairman
ATTEST:
Susan Bigelow, Secretary
,
,
\
5
c::l. - /7
DOCSOC/lI02785v~024212-0009
AGENCY RESOLUTION NO.
AND
COUNCIL RESOLUTION NO.
JOINT RESOLUTION OF THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
WAIVING THE CONSULTANT SELECTION PROCESS AND
APPROVING A FIRST AMENDMENT TO THE AGREEMENT
WITH E.J. DE LA ROSA & CO. AS UNDERWRITERS FOR THE
REFUNDING OF THE CITY OF CHULA VISTA
REDEVELOPMENT AGENCY 1994 SUBORDINATE TAX
ALLOCATION REFUNDING BONDS, SERIES C AND 1994
SENIOR TAX ALLOCATION REFUNDING BONDS, SERIES D;
WAIVING THE CONSULTANT SELECTION PROCESS AND
APPROVING THE SECOND AMENDMENT TO THE
AGREEMENT WITH HARRELL & COMPANY ADVISORS, LLC
TO SERVE AS FINANCIAL ADVISORS; AND AUTHORIZING
THE MAYOR TO EXECUTE THE AMENDMENTS TO THE
AGREEMENTS.
WHEREAS, on September 20, 1994, the Redevelopment Agency of the City of Chula Vista (the
"Agency") approved a resolution authorizing the issuance of the 1994 Senior Tax Allocation Refunding
Bonds, Series A, 1994 Senior Tax Allocation Refunding Bonds, Series B (Taxable), 1994 Subordinate
Tax Allocation Refunding Bonds, Series C and 1994 Senior Tax Allocation Refunding Bonds, Series D
(collectively the " 1994 Bonds") to advance refund the 1986 Tax Allocation Bonds previously issued by
the Agency for the BayfrontITown Centre I Redevelopment Project Area; and
WHEREAS, the 1994 Senior Tax Allocation Refunding Bonds, Series D, were issued to refund
the 1994 Senior Tax Allocation Refunding Bonds, Senes B (Taxable) in 1996 and the 1994 Senior Tax
Allocation Refunding Bonds, Series B (Taxable) are no longer outstanding; and
WHEREAS, as of June I, 2006, there was $24.4 million in outstanding 1994 Bonds with an
average net interest cost of 8% and a [mal maturity date of2024; and
WHEREAS, the 1994 Series A Bonds and the 1994 Series D Bonds are callable on September I,
2006, and the 1994 Series C Bonds are callable on November 1,2006 and all Bonds can be refunded 90
days prior to such dates; and
WHEREAS, based on pr~liminary research conducted by Harrell & Co. Advisors, LLC ("Harrell
& Co."), it appears that the Agl!ncy would save approximately $500,000 per year on its annual debt
service payments as a result of a refunding under current market conditions with an assumed interest rate
of 5%; and
WHEREAS, Agency financing is complex in nature due to various project areas, long term
revenue projections and rating agency coordination; and
c::o< - I 'I
WHEREAS, Harrell & Co. principal, Suzanne HarreJl, has obtained an in-depth understanding of
City and Agency fmancing matters through worked performed for the City and the Agency during the
past five years, including serving as fmancial advisor on the 2000 Tax AJlocation Bonds, preparing the
Agency's Financial Plan in 2000 and reviewing outstanding debt to determine viable candidates for
refmancing; and
WHEREAS, HarreJl & Co.'s prior experience and extensive knowledge of City and Agency
bond fmancing matters makes it uniquely qualified to serve as the fmancial advisor on refunding the
Bonds; and
WHEREAS, EJ. De La Rosa & Co. ("De La Rosa") is qualified to serve as the underwriter for
refunding the 1994 Bonds because it ranks among the top underwriters of California Municipal bonds, it
has served as senior manager on 19 redevelopment financings in California over the last four years and
one of its underwriters, Raul Amezcua, has experience as an underwriter for the San Diego Port
Authority; and
WHEREAS, applying the City's competitive bid process to the selections of a financial advisor
and an underwriter for the refunding would be impractical because of the short time frame in which the
City and Agency must act to take advantage of the cost savings available under current interest rates;
and
WHEREAS, it is in the City's best interest to waive the competitive bid process in accordance
with Chula Vista Municipal Code 2.56.070.B3, in order to proceed with the refunding in a timely
manner and take advantage of the current favorable interest rates.
NOW, THEREFORE, BE IT RESOLVED, that the City Council and the Redevelopment
Agency of the City of Chula Vista waive the consultant selection process and approve the First
Amendment to the Agreement with E.J. De La Rosa & ~o. as underwriters for the refunding of the City
of Chula Vista Redevelopment Agency 1994 Bonds. .
BE IT FURTHER RESOLVED, that the City Council and the Redevelopment Agency of the
City of Chula Vista waive the consultant selection process and approve the Second Amendment to the
Agreement with HarreJl & Company Advisors, LLC to serve as financial advisors for the refunding of
the City of Chula Vista Redevelopment Agency 1994 Bonds.
BE IT FURTHER RESOLVED, that the City Council and Redevelopment Agency of the City of
Chula Vista authorize the Mayor to execute the First Amendment to the Agreement with E.J. De La
Rosa & Co. and the Second Amendment to the Agreement with HarreJl & Company Advisors, LLC on
behalf of the City of Chula Vista ~an1 the Redevelopment Agency of the City of Chula Vista.
Presented by
Approved as to form by
Maria Kachadorian Ann Moore
Director of Finance/Treasurer City Attorney and Agency Counsel
J :\Attomey\RESO\AGREEMENTS\JOINT Reso Harrell and DeLaRosa June 22, 2006.doc
c;;2. - I 9
FIRST AMENDMENT TO
AGREEMENT BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AND
E. J. DE LA ROSA & CO., INC.
RECITALS
WHEREAS, the Redevelopment Agency of the City ofChula Vista ("the
Agency") is contemplating the refunding of existing debt; and
WHEREAS, the Agency requires underwriting services related to refunding the
Bayfront/Town Centre I Redevelopment 1994 Subordinate Tax Allocation Refunding
Bonds, Series C and 1994 Senior Tax Allocation Refunding Bonds, Series D ("the
Financing"); and
WHEREAS, the Consultant represents it is qualified to perform these services
under this First Amendment; and
WHEREAS, on March 22, 2005, at a joint meeting of the Agency and the City
Council of the City of Chula Vista ("the Council"), the Agency and the Council approved
an Agreement between the Agency and E. J. De La Rosa & Co. Inc. to provide
underwriting services related to refunding the Bayfront/Town Centre I Redevelopment
1994 Senior Tax Allocation Refunding Bonds, Series A.
NOW THEREFORE, the Agency and Consultant agree as follows:
AGREEMENT
.
I. Section 4, Term, is deleted in its entirety and replaced with the following: "This
Agreement shall terminate on December 31, 2006."
2. Section 7, Hold Harmless, is deleted in its entirety and replaced with the following:
"Consultant shall defend, indemnify, protect and hold
harmless the City and the Agency, their elected and
appointed officers and employees, from and against all
claims for damages, liability, cost and expense (including
without limitation attorneys fees) arising out of or alleged
by third p~es to be the result of the negligent acts, errors
or omissiohs or the willful misconduct of the Consultant,
and Consultant's employees, subcontractors or other
persons, agencies or firms for whom Consultant is legally
responsible in connection with the execution of the work
covered by this Agreement, except only for those claims,
damages, liability, costs and expenses (including without
limitations, attorneys fees) arising from the sole negligence
I .;l,-.;J...O
or sole willful misconduct of the City or the Agency, their
officers, employees. Also covered is liability arising from,
connected with, caused by or claimed to be caused by the
active or passive negligent acts or omissions of the City or
the Agency, their agents, officers, or employees which may
be in combination with the active or passive negligent acts
or omissions of the Consultant, its employees, agents or
officers, or any third party.
With respect to losses arising from Consultant's
professional errors or omissions, Consultant shall defend,
indemnify, protect and hold harmless the City and the
Agency, their elected and appointed officers and
employees, from and against all claims for damages,
liability, cost and expense (including without limitation
attorneys fees) except for those claims arising from the
negligence or willful misconduct of City or the Agency,
their officers or employees.
Consultant's indemnification shall include any and all
costs, expenses, attorneys fees and liability incurred by the
City or the Agency, their officers, agents or employees in
defending against such claims, whether the same proceed to
judgment or not. Consultant's obligations under this
Section shall not be limited by any prior or subsequent
declaration by the Consultant. Consultant's obligations
under this Section shall survive the termination of this
Agreement.
, '
For those professionals who are required to be licensed by
the state (e.g. architects and engineers), the following
indemnification provisions should be utilized:
I. Indemnification and Hold Harmless Agreement.
With respect to any liability, including but not limited
to claims asserted or costs, losses, attorney fees, or
payments for injury to any person or property caused or
claimed to be caused by the acts or omissions of the
Consultant, ot Consultant's employees, agents, and
officers, arising out of any services performed involving
this project, the Consultant agrees to defend, indemnify,
protect, and hold harmless the City and the Agency, their
agents, officers, or employees from and against all liability.
Also covered is liability arising from, connected with,
caused by, or claimed to be caused by the active or passive
2 .;z-.R./
negligent acts or omissions of the City or the Agency, their
agents, officers, or employees which may be in
combination with the active or passive negligent acts or
omissions of the Consultant, its employees, agents or
officers, or any third party. The Consultant's duty to
indemnify, protect and hold harmless shall not include any
claims or liabilities arising from the sole negligence or sole
willful misconduct of the City or the Agency, their agents,
officers or employees. This section in no way alters, affects
or modifies the Consultant's obligation and duties under
Section Exhibit A to this Agreement.
2. Indemnification for Professional Services.
As to the Consultant's professional obligation, work or
services involving this Project, the Consultant agrees to
indemnify, defend and hold harmless the City and the
Agency, their agents, officers and employees from and
against any and all liability, claims, costs, and damages,
including but not limited to, attorneys fees, losses or
payments for injury to any person or property, caused
directly or indirectly from the negligent acts, errors or
omissions of the Consultant or Consultant's employees,
agents or officers; provided, however, that the Consultant's
duty to indemnify shall not include any claims or liability
arising from the negligence or willful misconduct of the
City or the Agency, their agents, officers and employees."
,
3. Exhibit A, Section I, Effective Date of Agreement, is deleted in its entirety and
replaced with the following:" June 22, 2006."
4. Exhibit A, Section 7, General Duties, add the following:
"Consultant shall provide investment banking services to
assist in the refunding of the Bayfrontffown Centre I
Redevelopment 1994 Subordinate Tax Allocation
Refunding Bonds, Series C and 1994 Senior Tax Allocation
Refunding Bonds, Series D, evaluate fmancial alternatives,
conduct dqe diligence, and underwrite bonds to be issued
by the Redhelopment Agency. In its capacity at the
Agency's investment banker, Consultant shall act as a
principal in the anticipated purchase of municipal bonds
from the Agency and not as an advisor or other fiduciary of
the Agency or the City."
3 bl. - .;J. ~
5. Exhibit A, Section 8, Scope of 'Work and Schedule, Subsection A, Detailed Scope of
Work, add the following:
"1.5) Consultant will work with City staff and outside
professionals to develop a refinancing plan for the
Bayfront/Town Centre I Redevelopment 1994 Subordinate
Tax Allocation Refunding Bonds, Series C and 1994 Senior
Tax Allocation Refunding Bonds, Series D."
6. Exhibit A, Section 8, Scope of Work and Schedule, Subsection C, Dates or Time
Limits for Delivery of Deliverab1es, Deliverable is deleted in its entirety and replaced
with the following: "Items 1-6 under Section 8, Scope of Work and Schedule,
Subsection A. Detailed Scope of Work, shall be completed by September 15,2006."
7. Exhibit A, Section 11, Compensation, Subsection A, add the following:
"3) Consultant's underwriting fees for the refunding of the
Bayfront/Town Centre I Redevelopment 1994 Subordinate
Tax Allocation Refunding Bonds, Series C and 1994 Senior
Tax Allocation Refunding Bonds, Series D shall be 0.9% of
the principal amount of the Bonds that have an AAA rating,
1.1 % of the principal amount of the Bonds that have a BBB
rating, or 1.55% of the principal amount of the Bonds that
do not have a rating."
All other terms of the Agreement shall remain in full force and effect.
[END OF PAGE. THE NEXT PAGE IS THE SIGNATURE PAGE]
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4 ..;2 --;;. 3
JUN-lb-~ 1"'':>0
~ .J .I.I~ L...M """""""" T"11'Uoo> ........ .."...
SIGNATURE PAGE
TO
FIRST AMENDMENT TO
AGREEMENT BETWEEN
REDEVEl,OPMENT AGENCY OF THE CITY OF CHULA VISTA AND
E. J. DE LA ROSA & CO., INC.
rn WITNESS WHEREOF, the Agency and Consultant have executed this
Agreement thereby indicating that they bave read and understood same, and indicate their
full and complete consent to its terms.
Attest:
RedevelOpment Agency of the City of Chula
Vl$ta
By:
Stephen Padilla, Mayor
SUSan Bigelow
Approved as to form:
E. J. De La Rosa &. Co., Inc,
By:
R~., (J ~C<- -
Raul Amezcua, Principal
Ann Moore, City AttQn1cy
Exhibit List to Amendlnent:
(X) Agreement (Exhibit A)
,
,
1:1AUom~A1ACJREEMI!/fl'S\D L. RooI FIIIt_1Ioo
t
5
.;1.. _ ~ t.'"
TOTFIL P.06
SECOND AMENDMENT TO
AGREEMENT BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AND
HARRELL & COMPANY ADVISORS, LLC
RECITALS
WHEREAS, the Redevelopment Agency of the City of Chula Vista ("the
Agency") is contemplating the refunding of existing debt; and
WHEREAS, the Agency requires financial consulting services related to
refunding the BayfrontfTown Centre I Redevelopment 1994 Subordinate Tax Allocation
Refunding Bonds, Series C and 1994 Senior Tax Allocation Refunding Bonds, Series D
("the Financing"); and
WHEREAS, the Consultant represents it is qualified to perform these services
under this Second Amendment; and
WHEREAS, on March 22, 2005, at ajoint meeting of the Agency and the City
Council of the City ofChula Vista ("the Council"), the Agency and the Council approved
a First Amendment to the Agreement between the Agency and Harrell and Company
Advisors, LLC.
NOW THEREFORE, the Agency and Consultant agree as follows:
AGREEMENT
I. Section 4, Term, is deleted in its entirety !Illd replaced with the following: "This
Agreement shall terminate on December 31, 2006."
2. Section 7, Hold Harmless, is deleted in its entirety and replaced with the following:
"Consultant shall defend, indenuiify, protect and hold
harmless the City and the Agency, their elected and
appointed officers and employees, from and against all
claims for damages, liability, cost and expense (including
without limitation attorneys fees) arising out of or alleged
by third parties to be the result of the negligent acts, errors
or omissilWs or the willful misconduct of the Consultant,
and Conscltant's employees, subcontractors or other
persons, agencies or firms for whom Consultant is legally
responsible in connection with the execution of the work
covered by this Agreement, except only for those claims,
damages, liability, costs and expenses (including without
limitations, attorneys fees) arising from the sole negligence
or sole willful misconduct of the City or the Agency, their
1
~ -..<S-
officers, employees. Also covered is liability arising from,
connected with, caused by or claimed to be caused by the
active or passive negligent acts or omissions of the City or
the Agency, their agents, officers, or employees which may
be in combination with the active or passive negligent acts
or omissions of the Consultant, its employees, agents or
officers, or any third party.
With respect to losses arising from Consultant's
professional errors or omissions, Consultant shall defend,
indemnify, protect and hold harmless the City and the
Agency, their elected and appointed officers and
employees, from and against all claims for damages,
liability, cost and expense (including without limitation
attomeys fees) except for those claims arising from the
negligence or willful misconduct of City or the Agency,
their officers or employees.
Consultant's indemnification shall include any and all
costs, expenses, attorneys fees and liability incurred by the
City or the Agency, their officers, agents or employees in
defending against such claims, whether the same proceed to
judgment or not. Consultant's obligations under this
Section shall not be limited by any prior or subsequent
declaration by the Consultant. Consultant's obligations
under this Section shall survive the termination of this
Agreement.
For those professionals who are'required to be licensed by
the state (e.g. architects and engineers), the following
indemnification provisions should be utilized:
1. Indemnification and Hold Haimiess Agreement.
With respect to any liability, including but not limited
to claims asserted or costs, losses, attorney fees, or
payments for injury to any person or property caused or
claimed to be caused by the acts or omissions of the
Consultant, or Consultant's employees, agents, and
officers, adsu\g out of any services performed involving
this project, the Consultant agrees to defend, indemnify,
protect, and hold harmless the City and the Agency, their
agents, officers, or employees from and against all liability.
Also covered is liability arising from, connected with,
caused by, or claimed to be caused by the active or passive
negligent acts or omissions of the City or the Agency, their
2 cQ-~.G:.
agents, officers, or employees which may be in
combination with the active or passive negligent acts or
omissions of the Consultant, its employees, agents or
officers, or any third party. The Consultant's duty to
indemnify, protect and hold harmless shall not include any
claims or liabilities arising from the sole negligence or sole
willful misconduct of the City or the Agency, their agents,
officers or employees. This section in no way alters, affects
or modifies the Consultant's obligation and duties under
Section Exhibit A to this Agreement.
2. Indemnification for Professional Services.
As to the Consultant's professional obligation, work or
services involving this Project, the Consultant agrees to
indemnify, defend and hold harmless the City and the
Agency, their agents, officers and employees from and
against any and all liability, claims, costs, and damages,
including but not limited to, attorneys fees, losses or
payments for injury to any person or property, caused
directly or indirectly from the negligent acts, errors or
omissions of the Consultant or Consultant's employees,
agents or officers; provided, however, that the Consultant's
duty to indemnify shall not include any claims or liability
arising from the negligence or willful misconduct of the
City or the Agency, their agents, officers and employees."
3. Exhibit A, Section 1, Effective Date of Agreement, is deleted in its entirety and
replaced with the following: " June 22, 2006."
4. Exhibit A, Section 8, Scope of Work and Schedule, Subsection A.1, Revenue
Projections, add the following:
"Consultant will analyze and project tax increment
revenues of the Redevelopment Agency for use in
structuring debt and for presentation in the Official
Statement for the refunding of the Bayfront/Town Centre I
Redevelopment 1994 Subordinate Tax Allocation
Refundin~Bonds, Series C and 1994 Senior Tax Allocation
Refunding'Bonds, Series D."
5. Exhibit A, Section 8, Scope of Work and Schedule, Subsection C, Dates or Time
Limits for Delivery of Deliverables, Deliverable No. I, is deleted in its entirety and
replaced with the following: "Deliverable No.1: Items 1,3,4,5,6,7,8,9, andlO
under Section 8, Scope of Work and Schedule, Subsection A. Detailed Scope of Work
shall be completed by September 1, 2006. Item 2 under Section 8, Scope of Work and
3 c2-~7
Schedule, Subsection A. Detailed Scope of Work shall be completed by
December 31, 2006."
6. Exhibit A, Section II, Compensation, Subsection A, add the following:
"a fixed fee of $5,000 for the preparation of preliminary
and final official statements for the BayftontiTown Centre I
Redevelopment 1994 Subordinate Tax Allocation
Refunding Bonds, Series C and 1994 Senior Tax Allocation
Refunding Bonds, Series D, payable at bond closing;
a fixed fee of$25,000 based on an assumed par value of the
bonds at $14 million for the BayftontiTown Centre I
Redevelopment 1994 Subordinate Tax Allocation
Refunding Bonds, Series C and 1994 Senior Tax Allocation
Refunding Bonds, Series D, payable at bond closing."
All other terms of the Agreement as modified by the First Amendment to the Agreement
shall remain in full force and effect.
[END OF PAGE. THE NEXT PAGE IS THE SIGNATURE PAGE]
. '
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4
cJ-~~
SIGNATURE PAGE
TO
SECOND AMENDMENT TO
AGREEMENT BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AND
HARRELL & COMPANY ADVISORS, LLC
IN WITNESS WHEREOF, the Agency and Consultant have executed this
Agreement thereby indicating that they have read and understood same, and indicate their
full and complete consent to its terms.
Attest:
Redevelopment Agency of the City of Chula
Vista
By:
Stephen Padilla, Mayor
Susan Bigelow
Approved as to form:
Harrell & Company Advisors
~~~
Ann Moore, City Attorney
By:
Suzanne Q. Harrell, President
.
Exhibit List to Second Amendment:
(X) Agreement (Exhibit A)
J :\Attomey\EUSA\AGREEMENTS\Harre1l Second Amendmentdoc
\
5 ~-~'j
Item Title:
Submitted By:
ATTACHMENT A
Joint City Council/Redevelopment Agency
Item
Meeting Date March 22. 2005
Resolution waiving the consultant selection process' as
impractical and approving an agreement with EJ. De La Rosa &
Co. .as underwriters for the refunding of the City of Chula Vista
Redevelopment Agency 1994 Senior Tax Allocation Bonds, Series
. A; waiving the consultant selection process and approving the first
amendment to the agreement with Harrell & Company Advisors,
LLC to serve as financial advisors; and authorizing the Mayor to
execute the contracts
. Director of Financerrreasurer1"/}(.
Executive Director/City Manage~~ ..J (4/5ths Vote:Yes_No.lU
bQ\
. .
With the assistance of Harrell & Co. we are exploring the feasibility of refunding the Oty
of Chula Vista Redevelopment Agency 1994 Senior Tax Allocation Refunding Bonds,
Series A. Based on preliminary projections, the refunding would provide an annual debt
service savings q'jt~~~Q'Ql~;. a net present value savings <:>f1'!?ii3;~ii1inj9n,;pt!1:j.9~ of
the par amount over the life of the bonds based on an assumed interest rate 9.f4.93~.
Reviewed By:
The 1994 Senior Tax Allocation Refunding Bonds Series A are callable on September 1,
2005 and can be refunded 90 days prior, or June 1, 2005. In order to proceed with the
refunding in a timely manner and take advantage of the current favorable interest rates,
a waiver of the consultant selection process is requested in accordance with Chula Vista
Municipal Code 2.56.070.B3.
EJ.' De La Rosa & Co. has extensive experience in structuring and marketing tax
allocation obligations for California cities. Since January 1, 2000, EJ. De La Rosa & Co.
has served as senior or co-senior manager for 33 tax allocation bond issues totaling over
$1.6 billion. They possess the expertise and knowledge to assist the Agency in
providing requisite underwriting services for this refunding.
Harrell & Co. has previously performed quite extensive reviews of the Oty/Agency
outstanding debt in al\ effort to determine if, there were any economically viable
candidates for refinandng. Harrell and Co. has;i;erved as financial advisor on the 2000
Tax Allocation Bonds for the Redevelopment Agency and various City Certificates of
Participation over the past 5 years. Their knowledge of the Agency and expertise in the'
area of financial consulting will as~ist .the Agency in refunding these bonds.
0< -.3 0
Recommendation:
That Council adopt the resolutio.n waiving the consultant selection process as impractical
and approving an agreemerit with EJ. De La Rosa & Co. as underwriters for the
.refunding of the City of Chula Vista Redevelopment Agency i994 Senior Tax Allocation
Bonds, Series Ai waiving the consultant selectipn process and approving the first
amendment to the. agreement with Harrell & Company Advisors, LLC to serve as
financial advisors; and authorizing the Mayor to execute the contracts.
Boards/Commissions Recommendations: None
Discussion:
On September 20, 1994, the Redevelopment Agency approved a resolution authorizing
the issuance of the 1994 Senior Tax Allocation Refunding Bonds, Series A to advance.
refund the 1986 Tax Allocation Bonds previOusly issued by. the Agency for the
Bayfront,ITown Centre I Redevelopment Project Area. .
As of December 31, 2004, there was $12.9 million in outstanding bonds with a net
interest cost of 8.17% and a final maturity date of 2024. The 1994 Senior Tax
Allocation RefundiT')g Bond$, Sfi!ries A .~re callable on. September 1, 2005 and can be
refunded 90 days prior I or June 1, 2005. Based on preliminary research conducted by
Harrell & Co. Advisors, strictly on a contingent fee basis, it appears that the Agency
would save approximately $185,000 per year on !heir annual debt service payments as a
result of a refunding under current market conditions with an assumed interest rate of
4.9~%. If this resolution is approved, staff will work with Harrell and Co., E.J. De La
Rosa and the Agency's Bond Counsel firm of Stradling, Yocca, Carison & Rauth to
analyze all facets of the potential refunding, and if necessary will proceed with
preparation of the necessary legal documents fur Agency approval to authorize the sale
of the refunding bonds on a "negotiated basis".
A negotiated sale is best described as a "pre-marketed" sale given the ample time
provided to a) structure the bonds to meet (ever changing) investor preferences b)
explain the credit of the Agency to the complete satisfaction of prospective investors,
and c) create Investor capacity to purchase the bonds by working with investors to sell
current holdings to generate investable cash. A negotiated sale indudes a pre-selection
of an Linderwriter and a negotiated Interest cost, based on market conditions at the time
of the sale. Due to the various complexities surrounding the Bayfront project area this
potential refunding lends Itself to a negotiated sale. This will allow ample time and
opportunities to address an'\{ ql.iestlons.
Accointment of Financial Advisor
Redevelopment AgenCy financing Is complex in nature due to the various project areas,
long-term revenue projections arid rating agency coordination. Suzanne Harrell, the
prindpal representative of Harrell & Co. has previously perfurmed quite extensive
reviews of the aty/Agency outstanding debt in an effort to determine if there were any
economically viable candidates for refinancing. Ms. Harrell has served as finandal
eJ.-31
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advisor on the 2000 Tax Allocation Bonds for the Redevelopment Agency and various
City Certificates of Participation over the past 5 years. In 2000, Ms. Harrell prepared the
Agency's Financial Plan used in determining the bonding capacity for the Agency by
project area. As part of this' amended agreement, Ms. Harrell will provide the Agency
with an updated Financial Plan incorporating changes in the project areas and the
potential impacts related to the dismantling of the power plant.
Due to Harrell & Co's. in-depth understanding of the City and Agency, staff is requesting
Council waive the normal selection process as impractical. Harrell & Co. will assist the
Agency in negotiating the interest rates on the. bonds with the underwriter to assure
that the Agency achieves market interest rates. The cost of serving as a Financial
Advisor to refund these bonds will be approximately $55,000 pius expenses. A fixed fee
of $10,000 will be incurred for updating the Agency's financial plan.
Aooolntment of Underwriter
E. J. De La Rosa & Co. ranks as one of the top underwriters of California municipal
bonds. Since 2000, EJ. De La Rosa & Co. has underwritten 33 tax a!location bond
financings, with a total par amount of almost $1.8 billion. Over the last four years, EJ.
De La Rosa & Co. has served as senior manager on 19 redevelopment financings. As a
result the firm has vast knowledge of redevelopment in California. Following are
examples of some of the most recent redevelopment related financings the Firm has
underwritten:
. $191,795,041 Long Beach Finance Authority Revenue Bonds, 2005 Series A (Tax
Exempt) and 2005 Series B (Taxable) (Senior Managers)
· $87,260,000 Redevelopment Agency of the City of Burbank 2003 Refunding Tax
A!location Bonds, Series A (Goiden State Redevelopment Project) (Senior
Managers) .
. $300,015,000 Community Redevelopment Agency of the Oty of Los Angeles
Bunker Hill Project Revenue Bonds, Series A, 2004B (Taxable) and 2004L (Co-
Senior Managers) .
Also, Raul Amezcua, underwriter with EJ. De La Rosa, served as the underwriter for the
San Diego Port Authority in the acquisition of the power plant. His extensive knowledge
related to the. power plant and Bayfront will be instrumental in communicating with
potential Investors. The fee proposed by the Underwriter is 1.1% of the par amount of
the bonds based on obtljning a BBB rating (GOOd,credit quality) for the bonds.
Fiscal Impact: There Is no net impact to the:General Fund. Based on preliminary
projections, the refunding would provide an annual debt service savings to the
Redeveiopment Agency of $185,000 or a net present value of $2.3 million over the
remaining 20 years of the bonds cased on an assumed interest rate of 4.93%.
02 -3 ~
All costs of issuance, including the cost of the underwriter, bond counsel, disclosure
documents etc. will be paid from the bond proceeds. The fees are summarized as
foilows: . .
Financial Advisor - A fixed fee of $10,000 wiil be incurred for updating the
Agency's financial plan. A fee of $55,000 is contingent on refunding of the
bonds.
Underwriter - The fee is 1.1% of the par amount of the bonds or $151,800 based
on an estimated bond sizing of~~(:i'il~~~!
Bond Counsel - A fee of approximately $65,000 based on an existing two-party
agreement.
Further detail of costs and projected savings will be provided to Council when staff'
. returns for final approval of the refunding proposal.
, ,
i i
c2- 33
AGENCY RESOLUTION NO.
AND
COUNCIL RESOLUTION NO.
JOINT RESOLUTION OF THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
W.A:rVrnG THE CONSULTANT SELECTION PROCESS AS
IMPRACTICAL AND APPROVJNG AN AGREEMENT WITH E.J.
DE LA ROSA & CO. AS UNDERWRITERs FOR THE REFUNDING
OF THE CITY OF CHULA VISTA REDEVELOPMENT AGENCY
1994 SENIOR TAX ALLOCATION BONDS, SERIES A; W.A:rVrnG
THE CONSULTANT SELECTION PROCESS AND APPROVJNG
THE FIRST AMENDMENT TO THE AGREEMENT WITH
HARRELL &. COMPANY ADVISORS, LLC TO SERVE AS
FINANCIAL ADVISORS; AND AUTHORIZING THE MAYOR TO
EXECUTE THE CONTRACTS
WHEREAS, on September 20, 1994, the Redevelopment Agency (the "Agency'')
approved a resolution authorizing the issuance of the 1994 Senior Tax Allocation Refunding
Bonds, Series A (the "Bonds'') to advance refund the 1986 Tax Allocation Bonds previously
issued by the Agency for the Bayfront/Town Centre I Redevelopment Project Area; and
WHEREAS, as of December 31, 2004, there was $12.9 million in outstanding bonds with
"' ", ;"....., ..Jd'
a,J'!~!ji;p;terest'costibf8~17%'and a final maturity date of2024; and .
WHEREAS, the Bonds, are callable on September 1, 2005 and can be refunded 90 days
prior, or June 1,2005; and .
.
WHEREAS, based on preliminary research conducted by Harrell & Co., LLC ("Harrell
& Co:'') Advisors, it appears that the Agency would save approximately $185,000 per year on its
annual debt service payments as a result of a refunding under current market conditions with an
assumed interest rate of 4.93%; and . .
WHEREAS, Agency financing is complex in nature due to various project areas, long
term revenue projections and rating agency coordination; and
WHEREAS, Harrell & Co. principal, Suzanne Harrell, has obtained an in-depth
understanding of City and A,gency financing matters ~ugh worked performed for the City and
the Agency during the past \five years, including serVing as financial advisor on the 2000 Tax
Allocation Bonds, preparing the Agency's Financial: Plan in 2000 and reviewing outstanding
debt to determine viable candidates for refinancing; and
WHEREAS, Harrell & Co.'~' prior experience and extensive knowledge of City and
Agency bond financing matters makes it uniquely qualified tb serve as the financial advisor on
refunding the Bonds; and
dl-3Y
ft ~
..
WHEREAS, EJ. De La Rosa & Co. (''De La Rosa") is qualified to serve as the
'underwriter for refunding the Bonds, in that, it ranks among the top underwriters of California
Municipal bonds, it has served as senior manager on 19 redevelopment fiIDmcings in California
over the last four years and one of its underwriters, Raul Amezcua, has experience as an
underwriter for the San Diego Port Authority; and
WHEREAS, applying the City's competitive bid process to the selections of a financial
advisor and an underwriter for the refunding would be impractical because of the short time
n-ame in which the City and Agency must act to take advantage of the cost savings available
under cUIrent interest rates; and
WHEREAS, it is in the City's best interest to waive the competitive bid process in
accordance with Chula Vista Municipal Code 2.56.070.B3, in order to proceed with the
refunding in a timely manner and take advantage of the cUIrent favorable iJ;lterest rates.
NOW, THEREFORE, BB IT RESOLVED, that the City Council and the Redevelopment
Agency of the City of Chula Vista adopt the resolution waiving the consultant selection proc~ss
as impractical and approving an agreement with B.J. De La Rosa & Co. as underwriters for the
refunding of the City of Chula Vista Redevelopment Agency 1994 Senior Tax Allocation Bonds,
Series A; waiving the consultant selection process and approving the first amendment to the
agreement with Harrell & Company Advisors, LLC to serve as financial advisors.
BB IT FURTHER RESOLVED, that the City Council and Redevelopment Agen,cy of the
City of Chula Vista authorize the Mayor to execute the contracts on behalf of the City of Chula
Vista.
Presented by
Approved as to form by
Maria Kachadorian
Director ofFinance/Treasurer
J:Attamoy/&solAgrccmmt31Joint&so DeLaRosa
, ,
.
02 - 3S'
~ -
AGREEMENTBEnNEEN
REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA
- AND
E. J. DE LA ROSA & CO., INC.
for underwriting services related to refunding the BayfrontITown Centre J Redevelopment
1994 Senior Tax Allocation Refunding Bonds, Series A.
This agreement C'Agreement"), dated March 22, 2005 for the purposes of
reference only, and effective as of the date last executed unless another date is otherwise
specified in Exhibit A, Paragraph 1 is between the City of Chula Vista-related entity as is
indicated on Exhibit A, paragraph 2, as such C'City'1, whose business form is set forth on
Exhibit A, paragraph 3, and the entitY indicated on the attached Exhibit A, paragraph 4, as
Consultant, whose business form is set forth on Exhibit A, paragraph 5, and whose place
of business and telephone numbers are set forth on Exhibit A, paragraph 6
C'Consultant"), and is made with reference to the following facts:
Recitals
Whereas, E. J. De La Rosa & Co., Inc., hereafter referred to as .Consultant,'
possesses the requisite expertise and knowledge to assist the City in providing requisite
underwriting services; and,
Whereas, Redevelopment Agency of the City of Chula Vista, hereafter referred
to as "City" is desirous of taking advantage of said knowledge and expertise; and,
,
Whereas, Consultant warrants and' represents that they are experienced and
staffed in a manner such that they are and cari prepare and deliver the services
required of Consultant 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 Consultant do hereby
mutually agree as follows: .
1. Consultant's Duties
A. General Duties \
Consultant shall perform all of the services described on the attached Exhibit
A, Paragraph 7, entitled "General Duties".
B. Scope of Work and Schedule
~-d.~
In the process of performing and delivering said "General Duties", Consultant
shall also perform all of the services described in Exhibit A, Paragraph 8,
entitled " Scope of Work and Schedule", not inconsistent with the General
Duties, according to, and within the time frames set forth in Exhibit A,
Paragraph 8, and deliver to City such Deliverables as are identified in Exhibit A,
Paragraph 8, within the time frames set forth therein, time being of the essence
of this agreement. The General Duties and the work and deliverables required
in the Scope of Work and Schedule shall be herein referred to as the "Defined
Services". Failure to complete the Defined Services by the times indicated
does not, except at the option of the City, operate to terminate this Agreement.
C. Reductions in Scope of Work
City may independently, or upon request from Consultant, from time to time
reduce the Defined Services to be performed by the Consultant under this
Agreement. Upon doing so, CitY and Consultant agree to meet in good faith
and confer' for the purpose of negotiating a corresponding reduction in the
compensation associated with said reduction.
D. Additional Services
In addition to performing the Defined Services herein set forth, City may require
Consultant to perform additional consulting services related to the Defined
Services ('Additional Services"), and upon doing so in writing, if they are within
the scope of services offered by Consultant; Consultant shall perform same on
a time and materials basis. at the rates set forth in the "Rate Schedule' in
Exhibit A, Paragraph 11 (C), unless a separate fixed fee is otherwise agreed
upon. All compensation for AdditionarServices shall be paid monthly as billed.
E. Standard of Care .
Consultant, in performing any Services 'under this. agreement, 'whether Defined
Services or Additional Services, shall perform in a manner consistent with that
level of. care and skill ordinarily exercised by members of the profession
currently practicing under similar conditions and in similar locations.
F. Insurance
, . .
Consultant represen\s that it and its agents, staff and subconsultants employed
by it in connection with the Services required to be rendered, are protected
against the risk of loss by the following insurance coverages,in the following
categories, and to the .limits specified, policies of which are issued by
Insurance Companies that have a Best's Rating of "A, Class V' or better, or
E.J. DelaRosa Co. Inc.
. Page 2 (Revised 31(912005)
c::2 - .3 7
shall meet with the approval of the City;
Statutory Worker's Cl?mpensation Insurance and Employer's Liability Insurance
coverage in the amount set forth in the attached Exhibit A, Paragraph 9.
Commercial General Liability Insurance including Business Automobile
Insurance coverage in the amount set forth in Exhibit A, Paragraph 9,
combined single limit applied separately to each project away from premises
owned or rented by Consultant, which names City as an Additional Insured,
and which is primary to any policy which the City may otherwise carry ("Primary
Coverage"), and which treats the employees of the City in the same manner as
members of the general public ("Cross-liability Coverage"). .
Errors and Omissions. insurance, in the amount set forth in Exhibit A,
Paragraph 9, unless Errors and Omissions coverage is irrcluded in the General
Liability policy. ,
G. Proof of Insurance Coverage.
(1) ,Certificates of Insurance.
Consultant shall demonstrate proof of coverage herein required, prior to
the commencement of services required under this Agreement, by
delivery of Certificates of Insurance demonstrating same, and further
indicating that the policies may not be canceled without at least thirty (30)
days written notice to the Additional Insured.
.
(2) Policy Endorsements RequireCl.
In order to demonstrate. the Additional Insured Coverage, Primary
Coverage "and Cross-liability, Coverage required under Consultant's
Commercial General Liability Insurance Policy, Consultant shall deliver a
policy endorsement to the City demonstrating same, which shall be
reviewed and approved by the Risk Manager.
H. Security for Performance.
E.J. DelaRosa Co. Inc.
. Page 3
(1) PerformanCf Bond.
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide a Performance Bond (indicated by a check mark in
the parenthetical space immediately preceding the subparagraph entitled
"Performance Bond"), then Consultant shall provide to the City a
(Revised 310912005)
d-,3~
performance bond by a surety and in a form and amount satisfactory to
the Risk Manager or City Attorney which amount is indicated in the space
adjacent to the term, "Performance Bond", in said Paragraph 19, Exhibit
A.
(2) Letter of Credit.
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide a Letter of Credit (indicated by a check mark in the
parenthetical space immediately preceding the subparagraph entitled
"Letter of Credit'?, then COnsultant shall provide to the City an irrevocable
letter of credit callable by the City at their unfettered discretion by
submitting to the bank a letter, signed by the City Manager, stating that
the Consultant is in breach of the .terms of this Agreement. The letter of
credit shall be issued by a bank, and be in a form and .amount satisfactory
to the Risk Manager or City Attorney which amount is indicated in the
space adjacent to the term, "Letter of Credit", in said Paragraph 19,
Exhibit A.
(3) Other Security
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide security other than a Performance Bond or a Letter of
Credit (indicated by a check mark in the parenthetical space immediately
preceding the subparagraph entitled nOther Security"), then" Consultant shall
provide to the City such other security therein listed in a form and amount
satisfactory to the Risk Manager or City Attorney.
, .
I. Business License.
Consultant agrees to obtain a business license from the City and to otherwise
comply with Title 5 of the Chula Vista Municipal Code.
. 2. Duties of the City
A. Consultation and Cooperation
City shall regularly c:qnsult the Consultant for the purpose of reviewing the
progress of the DE!fined Services and Schedule therein contained, and to
provide direction and guidance to. achieve the objectives of this agreement.
The City shall permit access to its office facilities, files and records by
Consultant throughout the term of the agreement In addition, thereto, City
agrees to provide the information, data, items and materials set forth on Exhibit
E.J. DelaRosa Co. Inc.
. Page 4 (Revised 310912005)
c2-.3'J
A, Paragraph 1 D, and with the further understanding that delay in the provision
of these materials beyond 30 days after authorization to proceed, shall
constitute a basis for the justifiable delay in the Consultant's performance of
this agreement
B. Compensation
Upon receipt of a properly prepared billing from Consultant submitted to the
City periodically as indicated in Exhibit A, Paragraph 18, but in no event more
frequently than monthly, on the day of the period indicated in Exhibit A,
Paragraph 18, City shall compensate Consultant for all services rendered by
Consultant according to the terms and conditions set forth in Exhibit A,
Paragraph 11, adjacent to the governing compensation relationship indicated
by a "checkmark" next. to the appropriate arrangement, subject to the
requirements for retention set forth in paragraph 19 of. Exhibit A, and shall
compensate Consultant for out of pocket expenses as provided in Exhibit A,
Paragraph 12. .
All billings submitted by Consultant shalf contain sufficient information as to the
propriety of the billing to permit the City to evaluate that the amount due and
payable thereunder is proper, and shalf specifically contain the City's account
number indicated on Exhibit A, Paragraph 18 (C) to be charged upon making
such payment. .
3. Administration of Contract
Each party designates the individ~ls ("Contract Administrators") indicated on
Exhibit A, Paragraph 13, as said party's contract administrator who is authorized
by said party to represent them in the routine administration of this agreement.
4. Term
This Agreement shalf terminate when the Parties have complied with all executory
provisions hereof.
5. Liquidated Damages
The provisions of fi;Jis section apply if a Liquidated Damages Rate is provided in
Exhibit A, Paragrapn 14. .
'.
It is acknowledged by both parties that time is of the esSence in the completion of
this Agreement. It is difficu'Jt to estimate the amount of damages resulting from
delay in performance. The parties have used their jUdgment to arrive at a
E.J. DelaRosa Co. Inc.
. Page S (RevIsed 31C91200S)
.;{ -40
reasonable amount to compensate for delay.
Failure to complete the Qefined Services within the allotted time period specified in
this Agreement shall result in the following penalty: For each consecutive calendar
day in excess of the time specified for the completion of the respective work
assignment or Deliverable, the consultant shall pay to the City, or have withheld
from monies due, the sum of Liquidated Damages Rate provided in Exhibit A,
Paragraph 11 ("Liquidated Damages Rate").
Time extensions for delays beyond the consultant's control, other than delays
caused by the City, shall be requested in writing to the, City's Contract
Administrator, or designee, prior to the expiration of the specified time. Extensions
of time, when granted, will be based upon the effect of delays to the work and will
not be granted for delays to minor portions of work unless it can be shown that
such delays did or will delay the progress of the work.
6. Financial Interests of Consultant
A. Consultant is Designated as an FPPC Filer.
If Consultant is designated on Exhibit A, Paragraph 15, as an "FPPC filer",
Consultant is deemed to be a "Consultant" for the purposes of the Political
Reform Act conflict of interest and disclosure provisions, and shall report
economic interests to the City Clerk on the required Statement of Economic
Interests in such reporting categories as are specified in Paragraph 15 of
Exhibit A, or if none are specified, then as determined by the City Attorney.
B. Decline to Participate.
, '
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
shall not make, Qr participate in making or in any way attempt to use
Consultant's position to influence a governmental decision in which Consultant
knows or has reason to know consultant has a financial interest other than the
compensation promised by this Agreement
C. Search to Determine Economic Interests.
Regardless of whet~er ~Consultant is desig.nated as an FPPC Filer, Consultant
warrants and represents that Consultant has diligently conducted a search and
inventory of Consultant's economic interests, as the. term is used in the
regulations promulgated by the Fair Political Practices Commission, and has
determined that Cons41tant -does not, to the best of Consultant's knowledge,
have an economic interest which would conflict with Consultant's duties under
E.J. DeLaRosa Co.lnc.
. Page 6
(Revised 310912005)
~-41
this agreement.
D. Promise Not to Acquire Conflicting Interests.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
further warrants and represents that Consultant will not acquire, obtain, or
assume an economic interest during the term of this Agreement which would
constitute a conflict of interest as prohibited by the Fair Political Practices Act.
E. Duty to Advise of Conflicting Interests.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
further warrants and represents that Consultant will immediately advise the City
Attorney of City if Consultant learns of an economic interest of Consultant's
which may result in a conflict of interest for the purpose of the Fair Political
Practices Act, and regulations promulgated thereunder.
F. Specific Warranties Against Economic Interests.
Consultant warrants and represents that neither Consultant, nor Consultant's
immediate family members, nor Consultant's employees or agents ("Consultant
Associates") presently have any interest, directly or indirectly, whatsoever in
any property which may be the subject matter of the Defined Services, or in
any property within 2 radial miles' from the exterior boundaries of any property
which may be the subject matter of the Defined Services, C'Prohibited
Interest"), other than as fisted in Exhibit A, Paragraph 15.
,
Consultant further warrants and represents that no promise of future
employment, remuneration, consideration, gratuity or other reward or gain has
been made to Consultant or Consultant Associates in connection with
Consultant's performance of this Agreement Consultant promises to advise
City of any such promise that may be made during the Term of this Agreement.
or for 12 months thereafter.
Consultant agrees that Consultant Associates shall not acquire any such
Prohibited Interest within the Term of this Agreement, or for 12 months after
the expiration of this Agreement, except with the written permission of City.
Consultant may\ not conduct or sOlic~ any bu~iness for any party to this
Agreement, or for any third party whicj1 may be in conflict with Consultant's
responsibilities under this Agreement, .except with the written permission of
City.
E.J. DeLaRosa Co. Ine.
. Page 7
(Revised 310912005)
d.-cia.
7. Hold Harmless
Consultant shall defend, jndemnify, protect and hold harmless the City, its elected
appointed officers and employees, from and against all claims for damages,
liability, cost and expense .(including without limitation attorneys fees) arising out of
or alleged by third parties to be the result of the negligent acts, errors or omissions
or the willful misconduct of the Consultant, and Consultant's employees,
subcontractors or other persons, agencies or firms for whom Consultant is legally
responsible in connection with the execution of the work covered by this
Agreement, except only for those claims, damages, liability, costs and expenses
(including without limitations, attorneys fees) arising from the sole negligence or
sole willful misconduct of the C!tY, its officers, employees. Also covered is liability
arising from, conne.cted with, caused by or claimed to be caused by the active or
passive negligent acts or omissions of the City, its agents, officers, or employees
which may beln combination with the active or passive negligent. acts or omissions
of the Consultant, its employees, agents or officers, or any third party.
With respect to losses arising from Consultant's professional errors or omissions,
Consultant shall defend, indemnify, protect and hold harmless the City, its elected
and appointed officers and employees, from and against all claims for damages,
liability, cost and expense (Including without limitation attomeys fees) except for
thosfil claims arising from the negligence or willful misconduct of City, its officers or
employees. .
Consultant's indemnification shall include any and all costs, expenses, attorneys
fees and liability incurred by the City, its officers, agents or employees in
defending against such claims, whether the same proceed to judgment or not.
Consultant's obligations under this SectiOn' shall not be limited by any prior or
subsequent declaration by the Consultant. Consultant's obligations under this
Section shall survive the termination of this Agreement.
For those professionals who are required to be licensed by' the state (e.g.
architects and engineers), the following indemnification provisions should be
utilized:
1. Indemnification and Hold Harmless Agreement.
With respect to an~ Ii~bility, including ;~~t not limited to claims asserted or
costs, losses, attorney fees, or payments 'for injury to any person or property
caused or claimed to be caused by the acts or omissions of the Consultant, or
Consultant's employees,. agents, and officers, arising out of any services
performed involving this' project, except liability for Professional Services
E.J. DeLaRosa Co. Inc.
. Page B (Revised 310912005)
~-43
covered under Section X.2, the Consultant agrees to defend, indemnify,
protect, and hold harmless the City, its agents, officers, or employees from and
against all liability. Also covered is liability arising from, connected With, caused
. by, or claimed to be caused by the active or passive negligent acts or
omissions of the City, its agents, officers, or empJoyees which may be in
combination with the active or passive negligent acts or omissions of the
Consultant, its employees, agents or officers, or any third party. The
Consultant's duty to indemnify, protect and hold harmless shall not include any
claims or liabilities arising from the sole negligence or sole willful misconduct of
the City, its agents, officers or employees. This section in no way alters,
affects or modifies the Consultant's obligation and duties under Section Exhibit
A to this Agreement.
2. Indemnification for Professional Services.
As to the Consultant's professional obligation, work or services involving this
Project, the Consultant agrees to indemnify, defend and hold harmless the
City, its agents, officers and employees from and against any and all liability, .
claims, costs, and damages; including but not limited to, attorneys fees, losses
or payments for injury to any person or property, caused directly or indirectly
from the negligent acts, errors or omissions of the Consultant or Consultant's
employees, agents or officers; provided, however, that the Consultant's duty to
indemnify shall not include any cJaims or liability arising from the negligence or
willful misconduct of the City, its agents, officers and employees.
8. . Termination of Agreement for Caus~
If, through any cause, Consultant shall fail to fulfill in a timely and proper manner
Consultant's obligations under this Agreement, or if Consultant shall violate any of
the covenants, agreements or stipulations of this Agreement, City shall have the
right to terminate this Agreement by giving written notice to Consultant of such
termination and specifying the effective date thereof at least five (5) days before
the effective date of such termination. In that event, all finished or unfinished
documents, data, studies, surveys, drawings, maps, reports and other materials
prepared by Consultant shall, at the option of the City, become the property of the
City, and Consultant shall be entitled to receive just and equitable compensation
for any work satisfactorily completed on such documents and other materials up to
the effective date o~ Notice of Terminatio.n, not to exceed the amounts payable
hereunder, and less any damages caused City by Consultant's breach.
9. Errors and Omissions
E.J. DelaRosa Co. Inc.
. Page 9
(Revised 310912005)
.;l.. - 44.
In the event that the CitY Administrator determines that the Consultants'
negligence, errors, or omissions in the performance of work under this Agreement
has resulted in expense to City greater than would have resulted if there were no
such negligence, errors, omissions, Consultant shall reimburse City for any
additional expenses incurred by the City. Nothing herein is intended to limit City's
rights under other provisions of this agreement.
10. Termination of Agr:eement for Convenience of City
City may terminate this Agreement at any time and for any reason, by giving
specific written notice ~o Consultant of such termination and specifying the
effective date thereof, at least thirty (30) days before the effective date of such
termination. In that event, all finished and unfinished documents and ather
materials described hereinabove shall, at the option of the City, become City's sole
and exclusive property. If the Agreement is terminated by City as provided in this
paragraph, Consultant shall be entitled to receive just and equitable compensation
for any satisfactory work completed on such documents and other materials to the
effective date of such termination. Consultant hereby expressly waives any and all
claims for damages or compensation arising under this Agreement except as set
. forth herein.
11. Assignability
The services of Consultant are personal to the City, and Consultant shall not
assign any interest in this Agreement, and, shall not transfer any interest in the
same (whether by assignment or novationj, without prior written consent of City.
City hereby consents to the assignment of the portions of the Defined Services
identified in Exhibit A, Paragraph 17 to the .subconsultants identified thereat as
"Permitted Subconsultants".
12. Ownership, Publication, Reproduction and Use of Material
All reports, studies, information, data, statistics, forms, designs, plans, procedures,
systems and any othe~ l11aterials or prop~rties produced under this Agreement
shall be the sole and exclusive property of C!t;'. No such materials or properties
produced in whole or in part under this Agreement shall be subject to private use,
copyrights. or patent rights by Consultant in the United States or in any other
country without the express written consent of City. City shall have unrestricted
authority to publish, disclose (except as may be limited by the provisions of the
E.J. DelaRosa Co. Inc.
. Page 10 (Revised 310912005)
c2-4-S- .
Public Records Act), distribute, and otherwise use, copyright or patent, in whole or
in part, any such reports, studies, data, statistics, forms or other materials or
properties produced undj9r this Agreement.
.13. Independent Contractor
City is interested only in the results obtained and Consultant shall perform as an
independent contractor with sole control. of the manner and means of performing
the services required under this Agreement. City maintains the right only to reject
or accept Consultant's work: products. Consultant and any of the Consultant's
ag~nts, employees or representatives are, for all pUrposes under this Agreement,
an Independent contractor and shall not be deemed to be an employee of City,
and none of them shall be entitled to any benefits to which City employees are
entitled including but not limited to, overtime, retirement benefits, worker's
compensation benefits, injury leave or other leave benefits. Therefore, City will not'
withhold state or federal income tax, social security tax or any other payroll tax,
and Consultant shall be solely responsible for the payment of same and shall hold
the City harmless with regard thereto.
14. Administrative Claims Requiremel1ts and Procedures
No suit or arbitration shall be brought arising out of this agreement, 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 ChuJa 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, Consultant shall meet and confer in good faith with City for
the purpose of resolving any dispute over the terms of this Agreement.
15. Attorney's Fees
Should a dispute arising out of this Agreement result in litigation, it is agreed that
the prevailing part){ shall be entitled to a ju~gment against the other for an amount
equal to reasonabte attomey's fees and . court costs. incurred. The "prevailing
party" shall be deemed to be the party who is awarded sUbstantially the relief
sought.
E.J. DeLaRosa Ca. Inc.
. Page 11
(Revised 3I09J2005)
~-L/-fc
16. Statement of Costs
In the event that Consultant prepares a report or document, or participates in the
preparation of a report or document in performing the Defined Services,
Consultant shall include, or cause the inclusion of, in said report or document, a
statement of the numbers and cost in dollar amounts of all contracts and
subcontracts relating to the preparation of the report or document.
17. Miscellaneous
A. Consultant not authorized to Represent City
Unless specifically authorized in writing by City, Consultant shall have no
authority to act as City's agent to bind City to any contractuli' agreements
whatsoever. "
B. Consultant is Real Estate Broker and/or Salesman
If the box on Exhibit A, Paragraph 16 is marked, the Consultant and/or their
principals is/are licensed with the State of California or some other state as a
licensed real estate broker or salesperson. Otherwise, Consultant, represents
that neither Consultant, nor their principals are licensed real estate brokers or
salespersons.
C. Notices
All notices, demands or requests provided for or permitted to be given pursuant
to this Agreement must be in writing. All notices, demands and requests to be
sent to any party shall be deemed to have been properly given or served if
personally served or deposited in the l,Inited States mail, addressed to such
'party, postage prepaid, registered or certified, with return receipt requested, at
the addresses identified herein as the places of business for each of the
designated parties.
D. Entire Agreement
This Agreement, to~ether with any other written document referred to or
contemplated herein, embody the entire Agreement and understanding
between the parties relating to the ~ubject matter hereof. Neither this
, Agreement nor any provision hereof may be amended, modified, waived or
discharged except by an. instrument in writing executed by the party against
which enforcement of such amendment, waiver or discharge is sought.
E.J. DelaRosa Co. Inc.
. Page 12 (Revised 310912005)
~- V7
E. 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 Agreement. and that all resolutions or other actions have been
. taken so as to enable it to enter into this Agreement.
F. Governing LawNenue
This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any action arising under or relating to this
Agreement shall be broLight only in the federal or state courts located in San
Diego County, State of California, and if applicable. the City of Chu/a Vista, or
as .close thereto as Possible. Venue for this Agreement. and performance
hereunder, shall be the City of Chuta Vista.
\
E.J. DelaRosa Co. Inc.
. paae 13
(ReviSed 3ICS12005)
.;<- 4g
SIGNATURE PAGE
To
AGRE5MENTBFnNE~N
, .
REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA,
AND "E. J. DE LA ROSA & CO.,INe.
FOR UNDERWRmNG SERVIces;
IN WITNESS WHEREOF, City and Consultant have eXecuted this Agreement
thereby Indicatil1g that they have read and Understood same. and Indicate. theIr fun and
complete consent to its terms:
Attest
-
SUS13n 8Jgelqw, City Clerk
ApproVed' a:; to form:
RecJevelopment City of the City of Chu/a VISta
By.
Stephen PadIlICl, Mayor
E.J. De La ROsa & Co. Ine.
Ann Mccre,CIty A~mE!1Y
Exhibit list to Agreement
(X) exhibit A
..
E.J. oQr.aRosa Co.. Joe.
'~14
..
F
B;Y: p~..J /J elvc(..- ::...
Raul Ain8ZOl.ls, PrlncJpaJ
)0
i i
(ReY"cl3/DQ02D?~) .
cX-4-f
, ,
,
I
.' !
,
EXHIBIT A
TO
. . AGREEMENT BETWEEN
REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA
AND
E.J. DE LA ROSA & CO., INC.
1. Effective Date of Agreement: March 22, 2005
2. City-Related Entity:
(X) Redevelopment Agency of the City of Chula Vista, a political subdivision of the
State of California ("City") .
3. Place of Business for City:
City of Chula Vista,
276 Fourth Avenue,
Chula Vista, CA 91910
4. Consultant: E.J. De La Rosa & Co., Inc.
5. Business Form of Consultant:
( ) Sole Proprietorship
( ) Partnership
( X ) Corporation
.
,
6. Place of Business, Telephone and Fax Number of Consultant
E.J. De La Rosa & Co., Inc.
11900 W. Olympic Boulevard
Los Angeles, CA 90064
(310) 207-1975
7. General Duties:
"Consultanr shalf prqvide investment banking services to assist in the refunding of
the 1994 Series A t~ aJlocation refunding' -bonds evaluate financial altematives,
conduct due diligence and to und~r'-Yrit~ bonds to be issued by the City. In its
capacity as the City's investmenf banker, Consultant will be acting as a principal in
the 'anticipated purchase of municipal bonds from the City and not as an advisor or
other fiduciary of the City. '
E.J. DelaRosa Co. Inc.
. Page 15 (Revised 310912005)
0<- SV
~ ~.
As. investment banker to the City, Consultant will commit its full resources and
energies to assist the City.in.developing, evaluating and implementing a refinancing
plan.
Consultant will use its best professional efforts to accomplish the formal marketing
of any securities sold to the public, which will be accomplished in a manner and on a
schedule consistent with sound investment banking and underwriting principles.
8. Scope of Work and Schedule:
A. Detailed Scope of Work
The following is a list of investment banking services. to be provided by
Consultant. This list is not meant to be all-inclusive, but does represent typical
services required for the refinancing of debt.
1) Consultant will work with City staff and outside professionals to develop a
refinancing plan for the 1994 Series A tax allocation refunding bonds.
2) Completeness or accuracy of documents prepared by the City or other
professionals, consultant will review and comment on such documents
which are delivered to Consultant and are necessary for the proper
execution of Consultanfs responsibilities as the City's investment banker.
Consultant, in conjunction with its counsel,. will assist the City,its counsel
and advisors in preparing the Official Statement(s) (preliminary and final
versions, respectively) for sale of tne securities in accordance with the
standards of Rule 15c2-12 of the Securities Exchange Commission and
other applicable securities laws. The City agrees to participate in the
preparation of the Official Statement by providing pertinent information to be
included.therein and agrees to review the Official Statement(s) for accuracy
and completeness. . The. Official Statement(s) will include a description of
the securities, the issuer and pertinent financial. and economic data relating
to the City and the surrounding area. The approval, execution and delivery
of the Official Statement(s) will be duly authorized by the City for use by
Consultant in marketing the securities.
3) Consultant will isstst the City in pr~p'aring material for review by credit
rating agencies, bond insurance companies and investors as appropriate.
E.J. DelaRosa Co. Inc.
. Page 16
(Revised 3I09J2D05)
..
c::) - S- J
4) Consultant will conduct such bond marketing activities as the City
Consultant agree are necessary or desirable in marketing the bond issue.
The goal will be .to distribute securities to suitable investors at the most
favorable interest rates practicable under the market conditions existing at
the time of their sale. The City agrees to assist Consultant in making
presentations and information available to investors and others as
Consultant reasonably requests.
5) Consultant will assist in the preparation and documentation necessary to
timely close each bond issue and shall timely deliver the necessary funds to
purchase each bond issue in accordance with the terms of the respective
Bond Purchase Agreements.
6) The City and Consultant will meet as required to inform each other on
economic, environmental, financial or other conditions affecting the
successful completion of the refinancing.
B. Date for Commencement of Consultant Services:
(X) Same as Effective Date of Agreement
( ) Other;
C. Dates or Time Limits for Delivery of DeJiverables:
Deliverable: Consists of Items 1 -a under detail scope of work to be completed
by September 1,2005. .
,
D. Date for completion of all Consultant services:
After completion of bond refunding or termination of agreement by thirty days
written notice from either' party.
9. Insurance Requirements:
(X) Statutory Worker's Compensation Insurance
(X) Employer's Liability Insurance coverage: $1,000,000.
(X) Commercial GenElral Liability Insurance: $1,000,000.
( )Errors and Omissibns insurance: None R~uired (included in Commercial General
Liability coverage). .
10. Materials Required to be Supplied by City to Consultant:
E.J. DeLaRosa Co. Inc.
. Page 17
(Revised 310912005)
ot-S~
The City agrees to make available to Consultant without cost sufficient copies of
any applicable reports, agreements, contracts, resolutions and other relevant
documents regarding th~ issuer of the securities as reasonably may be required
from time to time for the prompt and efficient performance by Consultant of its
obligations hereunder.
11. Compensation:
A. (X) Single Fixed Fee Arrangement.
For performance of all of the Defined Services by Consultant as herein required,
City shall pay a single fixed fee in the amounts and at the times or milestones or
for the Deliverables set forth below:
Fixed Fee Amount Payable only at closing of bond sale from bond proceeds:
1) The City and Consultant expect to enter into a Bond Purchase Agreement
relating to the bonds to be sold from the City to Consultant.
2) Consultant's underwriting fees will be 1.1 % of the par amount of the bond
issue. The City and Consultant agree to negotiate in good faith regarding
the bond interest rates and purchase price based on the size of bond
issue, credit quality, market conditions and other factors determined to be
relevant by the City and Consultant at the time of the bond sale. It is
intended that once purchased, the securities will be re-offered to the
public on the basis of an immediate bona fide public offering.
, .
12. Materials Reimbursement Arrangement:
For the cost of out-of-pocket expenses inc'urred by Consultant in the performance
of services required by this Agreement, City will pay Consultant at the rates or in
. I
the amounts set forth below: . .
(X) None, the compensation includes all costs.
13. Contract Administrators~ ~
City: Maria V. Kachadoorian, Director of Financerrreasurer
Consultant: Raul Amezcua, E.J. De La Rosa & Co., Inc.
E.J. DelaRosa Co. Inc.
. Page 18
(Revised 3/0912005)
0:<'- S~
14. Liquidated Damages Rate:
( X) Other: None
15. Statement of Economic Interests, Consultant Reporting Categories, per Conflict of
Interest Code:
(X ) Not Applicable. Not an FPPC Filer.
16. () Consultant is Real Estate Broker and/or Salesman
17. Permitted SubconsuJtants: After consultation with City, Consultant may select and
retain legal counsel to provide legal advice related to structuring and marketing of
securities and, with approval of the City, to draft the preliminary and final Official
Statements.
18. Bill Processing:
A. Compensation is payable at bond closing out of bond proceeds.
B. City's Account Number: Bond Proceeds.
,
19. Security for Performance: N/A
\
E.J. DelaRosa Co. Inc.
. Page 19
(Revised 310912005)
~-.s;t)
AGREEMENTBE~EEN
THE REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA
, AND
HARRELL & COMPANY ADVISORS, LLC
(First Amendment)
for financial consulting services related to refunding the Bayfrontrrown Centre I
Redevelopment 1994 Senior Tax AJ/ocation Refunding Bonds, Series A
This agreement ("Agreement'1, dated March 22, 2005 for the purposes of
reference only, and effective as of the date last executed unless another date is otherwise
specified in Exhibit A, Paragraph 1 is between the City of ChuJa Vista-related entity as is
indicated on Exhibit A, paragraph 2, as such C'City"), whose busine!ss form is set forth on
Exhibit A, paragraph 3, and the entity indicated on the attached Exhibit A, paragraph 4, as
Consultant. whose business form is set forth on Exhibit A, paragraph 5, and whose place
of business and telephone numbers are set forth on Exhibit A, paragraph 6
C'Consultant'1, and is made with reference to the foJ/owing facts:
Recitals
Whereas, the City is contemplating the refunding of existing debt (liThe
Financing'1; and,
Whereas, the City requires assistanCe from a financing consultant in the
development of a sound and practical financing plan to implement the financing by
taking into consideration, program requirements, sources of capital funds, cash flow
requirements, annual costs, the aJ/ocation of those costs, statutQry requirements and
restrictions; and,
Whereas, Consultant represents it is qualified to perform the services under this
Agreement and;
Whereas, the City, at a regular meeting held on March 22, 2005, waived the
consultant selection process as impractical bas~d on Consultant's unique qualifications
to perform the services rtqtired hereunder, haying recently completed similar services
for the City's Redevelopment City in an exemplary manner, and authorized the Mayor to
enter into this Agreement.
NOW, THEREFORE, BE It RESOLVED that the City and Consultant do hereby
mutuaJ/y agree as follows:
ol.-5S"
1. Consultant's Duties
A. General Duties
Consultant shall perform all of the services described on the attached Exhibit
A, Paragraph 7, entitled "General Duties".
8. Scope of Work and Schedule
In the process of performing and delivering said "General Duties", Consultant
shall also perform all of the services described in Exhibit A, Paragraph 8,
entitled " Scope of Work and Schedule", not inconsistent with the General
Duties, according to, and within the time frames set forth in Exhibit. A,
Paragraph 8, and deliver to City such .Deliverables as are identified in Exhibit A,
Paragraph S, within the time frames set forth therein, time being of the essence
of this agreement. The General Duties and the work and deliverables required
in the Scope of Work and Schedule shall be herein referred to as the "Defined.
Services". Failure to complete the Defined Services by the times indicated
does not, except at the option of the City, operate to terminate this Agreement.
C. Reductions in Scope of Work
City may independently, or upon request from Consultant, from time to time
reduce the Defined Services to be performed by the Consultant under this
Agreement. Upon doing so, City and Consultant agree to meet in good faith
and confer for the purpose of negotiating a corresponding reduction in the
compensation associated with said reduction.
D. Additional Services
In addition to performing the Defined Services herein set forth, City may require
Consultant to perform additional consulting services related to the Defined
Services ("Additional Services''), and upon doing so in writing, if they are within
the scope of services offered by C'onsultant, Consultant shall perform same on
a time and materials basis at the rates set forth in the "Rate Schedule" in
Exhibit A, Paragraph 11 (C), unless a separate fixed fee is otherwise agreed
upon. All compensiltion for Additional ~eryices shaH be paid monthly as billed.
.
.
,
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E. Standard of Care
Consultant, in perfOlT)1ing any Services under this agreement, whether Defined
Services or Additional Services, shall perform in a manner consistent with that
level of care aAd skill ordinarily exercised by. members of the profession
currentJy practicing under similar conditions and in similar locations.
F. .Insurance
Consultant represents that it and its agents, staff and subconsultants employed
by it in connection With the Services required to be rendered, are protected
against the risk of loss by the following insurance coverages, in the following
categories, and to the limits specified, policies of which are issued by
InsLirance Companies that have. a Best's Rating of "A, Class V' or better, or
shall meet with the approval of the City: .
Statutory Worker's Compensation Insurance and Employer's Liabifity Insurance
coverage in the amount set forth in the attached Exhibit A, Paragraph 8.
Commercial General Liabifity Insurance including Business Automobile
Insurance coverage in the amount set forth in Exhibit A, Paragraph 9,
combined single limit applied separately to each project away from premises
owned or rented by Consultant, which names City as an Additional Insured,
and which is primary to any policy which the City may otherwise carry C'Primary
Coverage'?, and which treats the employees of the City in the same manner as
members of the general public C'Cross-liability Coverage").
Errors and Omissions insurance, 'in the amount set forth in exhibit A,
Paragraph 9, unless Errors and Omissions coverage is included in the General
Liabifity policy.
G. Proof of Insurance Coverage.
(1) Certificates of Insurance.
Consultant shall demonstrate proof of coverage herein required, prior to
the commencement of services required under this Agreement, by
delivery of C~rtjficates of Insural)ce demonstrating same, and further
indicating t~anhe policies may not be canceled without at least thirty (30)
days written notice to the Additiona1lnsured.
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(2) . Policy Endorsements Required.
In order to dl?monstrate the Additional Insured Coverage, Primary
Coverage and Cross-liability Coverage required under Consultant's
Commercial General Liability Insurance Policy, Consultant shall deliver a
policy endorsement to the City demonstrating same, which shall be
reviewed and approved by the Risk Manager.
H. Security for Performance.
(1) Performance Bond.
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide a Performance Bond (indicated by a check mark in
the parenthetical space immediately preceding the $ubparagraph entitled
"Performance Bond"), then. Consultant shall provide to the Citys'
performance bond by a surety and in a form and amount satisfactory to
the Risk Manager or City Attomey which amount is indicated in the space
adjacent to the term, "Performance Bond", in said Paragraph 19, Exhibit
A.
(2) Letter of Credit.
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide a Letter of Credit (indicated by a check mark in the
parenthetical space immediately preceding the subparagraph entitled
"Letter of Credit'), then Consultant shall provide to the City an irrevocable
letter of credit callable by the' City at their unfettered discretion by
submitting to the bank a letter, signed by the City Manager, stating that
the Consultant is in breach of the terms of this Agreement. The letter of
credit shall be issued by a bank, and be in a form and amount satisfactory
. to the Risk Manager or City Attorney which amount is indicated in the
space adjacent to the term, "Letter of Credit", in said Paragraph 19,
Exhibit A.
(3) Other Security
In the event that Exhibit A, at Paragraph 19, indicates the need for
Consultant to provide security other th,m a Performance Bond or a Letter of
Credit (indicateCf by a check mark',in the parenthetical space immediately
preceding the subparagraph entitled "Other Security'), then Consultant shall
provide to the City such other security thereiri listed in a form and amount
. satisfactory to the Risk Manager or City Attomey.
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· Page 4 (Revised 0310912005)
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I. Business License.
Consultant agrees to' obtain a business license from the' City and to otherwise
comply with Title 5 of the Chula Vista Municipal Code.
2. Duties of the City
A. Consultation and Cooperation
City shall regularly consult the Consultant for the pUrpose of reviewing the
progress of the Defined Services and Schedule therein contained, and to
provide direction and guidance to achieve the objectives of this agreement.
The City shall permit access to its office facilities, files and recoJtjs by
Consultant throughout the term of the-agreement. - In 'addition thereto, City
agrees to provide the information, data, items and materials set forth on Exhibit
A, Paragraph 10, and with the further understanding that delay in the provision
of these materials beyond 30 days after authorization to proceed, shall
constitute a basis for the justifiable delay in the Consultant's performance of
this agreement.
B. Compensation
Upon receipt of a properly prepared billing from Consultant submitted to the
City periodically as indicated in Exhibit A, Paragraph 18, but in no event more
frequently than monthly, on the day of the period indicated in Exhibit A,
Paragraph 18, City shall compensat~ Consultant for all services rendered by
Consultant according to the terms and conditions set forth in Exhibit A,
Paragraph 11, adjacent to the governing compensation relationship indicated
by a 'checkmark" next to the appropriate arrangement, subject to the
requirements for retention set fort/1 in paragraph 19 of Exhibit A, and shall
- compensate Consultant for out of pocket expenses as provided in Exhibit A,
Paragraph 12.
All billings submitted by Consultant shall contain sufficient information as to the
propriety of the billing to permit the City to evaluate that the amount due and
payable thereunder is proper, and shall specifically contain the City's account
number indicated op Exhibit A, Paragraph 18 (C) to be charged upon making
such payment. ~ .
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3. Administration of Contract
Each party designates ~he individuals ('Contract Administrators") indicated on
Exhibit A, Paragraph 13, as said party's contract administrator who is authorized
by said party to represent them in the routine administration of this agreement.
4. Term
This Agreement shall terminate when the Parties have .complied with all executory
provisions hereof.
5. Liquidated Damages
The provisions of this section apply if a Liquidated Damages Rate is provided in
Exhibit A, Paragraph 14.
It is acknowledged by both parties that time is of the essence in the completion of
this Agreement. It .is difficult to estimate the amount of damages resulting from
delay in performance. The parties have used their jUdgment to arrive at a
reasonable amount to compensate for delay. .
Failure to complete the Defined Services within the allotted time period specified in
this Agreement shall result in the following penalty: For each consecutive calendar
day in excess of the time specified for the completion of the respective work
assignment or Deliverable, the consultant shall pay to the City, or have withheld
from monies due, the sum of Liquidated Damages Rate provided in Exhibit A,
Paragraph 14 ('Liquidated Damages Rat~?
Time extensions for delays beyond the consultant's control, other than delays
caused by the City, shall be requested in writing to the City's Contract
Administrator, or designee, prior to the expiration of the specified time. Extensions.
of time, when granted. will be based upon the effect of delays to the work and will
not be granted for delays to .minor portions of work unless it can be shown that
such delays did or will delay the progress of. the work.
6. Financial Interests of Consultant
A. Consultant is Desig~ated as an FPPC Filer,
If Consultant is designated on Exhibit A.' Paragraph 15, as an "FPPC filer",
Consultant is deemed to be a "Consultant" for the purposes of the Political
Reform Act conflict of interest and disclosure provisions, and shall report
Harrell &Company, LLC Financial Consulting Services Agreement
· Page 6 (Revised 03lO912oo5J
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economic interests to the City Clerk on the required Statement of Economic
Interests in such reporting categories as are specified in P~ragraph 15 of
Exhibit A, or if none .are specified, then as determined by the City Attomey.
B. Decline to Participate.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
shall not make, or participate in making or in any' way attempt to Use
Consultant's position to influence a governmental decision in which Consultant
knows or has reason to know Consultant has a financial interest other than the
compensation promised by this Agreement.
C. Search to Detennine Economic Interests.
Regardless Qf whether Consultant is designated as an FPPC Filer, Consultant
warrants and represents that Consultant has diligently conducted a search and
inventory of Consultant's economic interests, as the tenn is used in the
regulations promulgated by the Fair Political Practices Commission, and has
determined that Consultant does not, to the best of Consultant's knowledge,
have an economic interest which would conflict with Consultant's duties under
this agreement.
D. Promise Not to Acquire Conflicting Interests.
Regardless of whether Consultant is designated as an FPPC Filer, Consultant
further warrants and represents that Consultant will not acquire, obtain, or
assume an economic interest during, the term of this Agreement which would
constitute a conflict of interest as prohibited by the Fair Political Practices Act.
E. Duty to Advise of Conflicting Interests.
. .
Regardless of whether Consultant is designated' as an FPPC Filer, Consultant
further warrants and represents that Consultant will immediately advise the City
Attorney of City if Consultant learns of an economic interest of Consultant's
which may result in a conflict of interest for the purpose of the Fair Political
Practices Act, and regulations promulgated thereunder.
F. Specific Warranties Against Economic Interests.
" . ,
. .
Consultant warrants and represents that neither Consultant, nor Consultant's
immediate family members, nor Consultant's employees or agents f'Consultant
Associates") presently have any interest, directly or indirectly, whatsoever in
Harrell &Company, LLC Financial Consulting Services Agreement
· Page 7 . . (Revised 03109/2005)
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any property which may be the subject matter of the Defined Services, or in
any property within 2 radial miles from the exterior boundaries of any property
which may be the ,subject matter of the Defined Services, C'Prohibited
Interesf'), other than as listed in Exhibit A, Paragraph 15.
. .
Consultant further warrants and represents that no promise of future
employment, remuneration, consideration, gratuity or other reward or gain has
been made to Consultant or Consultant Associates in connection with
Consultant's performance of this Agreement. Consultant promises to advise
City of any such promise that may be made during the Term of this Agreement,
or for 12 months thereafter. .
Consultant agrees that Consultant. Associates shall not acquire any such
Prohibited Interest within the Term of this Agreement, or for 12 months. after
the expiration of this Agreement, except with the written permission of City.'
Consultant may not conduct or solicit any business for any party to this
Agreement, or for any third party which may be in conflict with Consultant's
responsibilities under this Agreement, except with the written permission of
City.
7. Hold Harmless
Consultant shall defend, indemnify, protect and hold harmless the City, its elected
appointed officers and employees, from and against all claims for 9amages,
liability, cost and expense (including without limitation attomeys fees) arising out of
or alleged by third parties to be the resul~ of the negligent acts, errors or omissions
or the willful misconduct. of the Consultant, and Consultant's employees,
. subcontractors or other persons, agencies or firms for whom Consultant is legally
responsible in connection with the execution' of the work covered by this
Agreement, except only for those claims, . damages, liability, costs and expenses
(including without limitations, attomeys fees) arising from the sole negligence or
sole willful misconduct of the City, its officers, employees. Also covered is liability
arising from, connected with, caused by or claimed to be caused by the active or .
passive negligent acts or omissions of the City, its agents, officers, or employees
which may be in combination with the active or passive negligent acts or omissions
of the Consultant, its empl~yees, agents or officers, or any third party.
With respect to losses ~rising from Consu~ant's professional elTors or omissions,
Consultant shall defend, indemnify, protect arid hold harmless the City, its elected
and appointed officers and employees, from and against all claims for damages,
liability, cost and expense (including without limitation attorneys fees) except for
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those claims arising from the negligence or willful misconduct of City, its officers or
employees.
Consultant's indemnification shall include any and all costs, expenses, attomeys
fees and liability incurred by the City; its officers, agents or employees in
defending against such claims, whether the same proceed to jUdgment or not.
Consultant's obligations under this Section shall not ba limited by any prior or
subsequent declaration by the Consultant. Consultant's obligations under this
Section shall survive the termination of this Agreement.
For those professionals who are required to be licensed by the state (e.g.
architects and engineers), the following indemnification provisions should be
utilized: . .
1. Indemnification and Hold Harmless Agreement.
With respect to any liability, including but not limited to claims asse.rted or
costs, losses, attorney fees, or payments for injury to any person or property
caused or claimed to be caused by the acts or omissions of. the Consultant, or
Consultant's employees, agents, and officers, arising out of any services
performed invoMng this project, except liability for Professional Services
covered under Section X.2, the Consultant agrees to defend, indemnify,
protect, and hold harmless the City, its agents, officers, or employees from and
against all liability. Also covered is liability arising from; connected with, caused
'by, or claimed to be caused by the active or passive negligent acts or
omissions of the City, its agents, officers, or employees which may be in
combination with the active or passive negligent acts or omissions of the
Consultant; its employees, agents. or officers, or any third party. The
Consultant's duty to indemnify, protect and hold harmless shall not include any
claims or liabilities arising from the sole negligence or sole willful misconduct of
the City, its agents, officers or elT!ployees. This section in no way alters,
affects or modifies the Consultant's obligation and duties under Section Exhibit
A to this Agreement.
2. Indemnification for Professional Services.
As to the Consultant's professional obligation, work or services involving this
Project, the Consultant agrees to indemnify, defend and hold harmless the
City, its agents, bfftcers and employe~ from and against any and all liability;
claims, costs, and damages, including but not limited to, attorneys fees, losses
or payments for injury to any person or property, caused directly or indirectly
from the negligent acts, errors or omissions of the Consultant or Consultant's
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employees, agents or officers; provided, however, that the Consultant's duty to
indemnify shall not include any claims or liability arising from the negligence or
willful misconduct of \ha City, its agents, officers and employees.
8. - Termination of Agreement for Cause
If, through any cause, Consultant shall fail to fulfill in a timely and proper manner
Consultant's obligations under this Agreement, or if Consultant shall violate any of
the covenants, agreements or stipulations of this Agreement, City shall have the
right to terminate this Agreement by giving written notice to Consultant of such
termination and specifying the effective date thereof at least five (5) days before
the effective date of such termination. In that event, all finished or unfinished
documents, data, studies, surveys, drawings, maps, reports and other materials
prepared by Consultant shall, at the option of the City, become the property of the
City, and Consultant shall be entitled to receive just and equitable compensation
for any work satisfactorily completed on- such docum'ents and other materials up to
the effective date of Notice of Termination, not to exceed the amounts payable
hereunder, and less any damages caused City by Consuttant's breach.
9. Errors and Omissions
In the event that the City Administrator _ determines that the Consultants'
negligence, errors, or omissions in the performance of work under this Agreement
has resulted in expense to City greater than would have resulted if there were no
such negligence, errors, omissiohS, Consultant shall reimburse City for any
additional expenses incurred by the City. Nothing herein is intended to limit City's
rights under other provisions of this agre~ment. ' I
10. Termination of Agreement for Convenience of City
City may terminate this Agreement at any time and for any reason, by giving
specific written notice to _ Consultal'lt of' such' termination IiInd specifying the
effective date thereof, at least thirty (30) days before the effective date of such
termination. In that. event, all finished and unfinished documents and other
materials described hereinabove shall, at the option of the City, become City's sole
and exclusive property. If the Agreement is terminated by City as provided in this
paragraph, Consultant shall be entitled to receive just and equitable compensation
for any satisfactory wor~ completed on suc~ d,acuments and other materials to the
effective date of such termination. Consultant hereby expressly waives any and all
claims for damages or compensation arising 'under this Agreement except as set
forth herein.
.
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11. Assignability
The services of Consultant are personal to the City, and Consultant shall not
assign any interest in this Agreement, and shall not transfer any interest in the
same (whether by assignment or novation), without prior written consent of City.
City hereby consents to the assignment of the portions of the Defined Services
identified in Exhibit A, Paragraph 17 to the subconsultants identified thereat as
"Permitted Subconsultants".
12. Ownership, Publication, Reproduction and Use of Material
All reports, studies, information, data, statistics, forms, designs, plans, procedures,
systems and any other materials or properties prodUced under this Agreement
shall be the sole and exclusive property of City. No such materials or properties
produced in whole or in part under this Agreement shall be subject to private use,
copyrights or patent rights by Consultant in the United States or in any other
country without the express written consent of City. City shall have unrestricted
authority to publish, disclose (except as may be limited by the provisions of the
Public Records Act), distribute, and otherwise use, copyright or patent, in whole or
in part, any such reports, studies, data, statistics, forins or other materials or
properties produced under this' Agreement.
13. Independent Contractor
City is interested oniy in the results obtained and Consultant shall perform as an
independent contractor with sole control of the manner and means of performing
the services required under this Agreement. City maintains the right only to reject
or accept Consultant's work products, Consultant ;;Ind any of the Consultant's
;;Igents, employees or representatives are, for all purposes under this Agreement,
an independent contractor and . shall not be deemed to be an employee of City,
and none of them shall be entitled to 'any benefits to which City employees are
entitled including but not limited to, overtime, retirement benefits, worker's
compensation benefits, injury leave or other leave benefits. Therefore, City will not
withhold state or federal income tax, social security tax or any other payroll tax,
and Consultant shall br solely responsible for the payment of same and shalf hold
the City harmless w~h regard thereto. .' .
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14. Administrative Claims Requirements and Procedures
No suit or arbitration shall be brought arising out of this agreement, 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, Consultant shall meet and confer in good faith with City for
the purpose of resolving any dispute over the terms of this Agreement
15. Attorney's Fees
Should a dispute arising out of this Agreement result in litigation, it is agreed that
the prevailing party shall be entitled to a judgment against the other for an amount
equal to reas'onable attorney's fees and court costs incurred. The "prevailing
party" shall be deemed to be the party who is ,awarded substantially the relief
sought.
16. Statement of Costs
In the event that Consultant prepares a ~eport or document, or participates in'the
preparation of a report or document. in performing the Defined Services,
Consultant shall include, or cause the inclusion of, in said report or document, ,a
statement of the numbers and cost in dollar amounts of all contracts and
subcontracts relating to the preparation of the report or document.
17. Miscellaneous
A. Consultant not authorized to Represent City
Unless specifically ,r:uthorized in writj~g ,by City, Consultant shall have no
authority to act as "City's agent to bind City to any contractual agreements
whatsoever. . .
B. Consultant is Real Estate.Broker and/or Salesman
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(Revised 0310912005)
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If the box on Exhibit A, Paragraph 16 is marked, the Consultant and/or their
principals islare licenj>ed With the State of California or some other state as a
licensed real estate broker or salesperson. Otherwise, Consultant represents
that. neither Consultant, nor their principals are licensed real estate brokers or
salespersons.
C. Notices
All notices, demands or requests provided for or permitted to be given pursuant
to this Agreement must be in writing. All notices, demands and requests to be
sent to any party shall be deemed to have been properly given or served if
personally served or deposited in the United States mail, addressed to such
. party, postage prepaid, registered or certified, with return receipt requested, at
the addresses identified herein as the places of business for each of the
designated parties.
D. Entire Agreement
This Agreement, together with any other written document referred to or
contemplated herein, embody the. entire Agreement and understanding
between the parties relating to the subject matter hereof. Neither this
Agreement nor any provision hereof may be amended, modified, waived or
discharged except by an instrument in writing executed by the party against
which enforcement of such amendment, waiver or discharge is sought.
E. 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 Agreement, and that al] resolutions or other actions have been
taken s6 as to enable it to enter into this Agreement.
F. Governing LawNenue
This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any action arising under or relating to this
Agreement shall be brought only in the. federal or state courts located In San
Diego County, stat~ of California, and if applicable, the City of Chula Vista, or
as close thereto as possible. Venue for this Agreement, and performance
hereunder, shall be the City of Chula Vista.
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,
SIGNATURE PAGE
, TO, ' ,
, AGREEMENT SETWEEN THE,.., '
REDEVELOPMENT CiTY OF THE CITY OF CHULA VISTA AND
HARRELL. & COMPANY ADVJSOR~'LLC
(Firet Amjlndment)
i
, ,
FOR FINANCIAL CONSULTING SERVICES
, "
, 1r('NJTNESS wHEREOF, CIty'and Conaultant have exeCuted thrll'Ag~ment
therscy in~!cating that they have read a.nd understood same, and indicate their full al1d
C9mplete 'Consent to Its terms: .."
Attest
Redevelopmel1t city of the City of ChuJa Vl8ta
Susan Bigelow. City Clerk
By:
S~phen Padilla, r.-tayer
Approved as to form:
HaIIi'ef1 & Company AdviaolS, U.C
Ann Moore" CJIy Attorney
~
' , ~
a ne Q. HarreR, President ,
exhibIt list to Agreement '
(X) ExhlbitA
\
. .
HarreR &Company, L.L.C financial Ccl18ullins SSNlcas Agreement
· Pags 14
(RevIsed 03I09I2005)
.
02-"8
EXHIBIT A
TO
,AGREEMENTBEnNEEN
REDEVELOPMENT CITY OF THE CITY OF CHULA VISTA
AND
HARRELL & COMPANY ADVISORS, LLC
(First Amendment)"
1. Effective Date of Agreement: March 22, 2005
2. City-Related Entity:
(X) Redevelopment Agency of the City of Chura Vista, a political subdivision of the
State of California ("City") .
3. Place of Business for City:
City of Chura Vista,
276 Fourth Avenue,
Chula Vista, CA 91910
4. Consultant: HARRELL & COMPANY ADVISORS, LLC
5. Business Form of Consultant:
( ) Sole Proprietorship
( ) Partnership
( ) Corporation
(X) Umited Liability Company
6. Pliice of Business, Telephone and Fax Number of Consultant:
Harrell & Company Advisors, LLC .
The City Tower
333 City Boulevard West, Suite 1430
Orange, CA 92868
(714) 939-1464
(714) 939-1462 (FAX)
I I
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7. General Duties:
Provide all necessary fin..ancial advisory services to assist in the issuance or
refunding of debt by the City in accordance with the City's Financial Plan.
8. Scope of Work and Schedule:
A Detailed Scope of Work:
Consultant will be responsible for performing the following:
1) Revenue Projections.
Consultant will analyze and project tax increment revenUeS .of the City for use
in structuring debt and for presentation in the Official Statement.
2) Financing Plan.
The review of the City to address the annual financial requirements, including
payments under other bonded indebtedness, housing set-aside requirement of
the City, amounts the City may owe the City, levels of funding required for
administration etc. The financial analysis for the Financing will address sizing
considerations for any proposed bonded debt, the financial implications,
strategies for submitting the financing to the rating agencies and/or bond
insurance companies (this will include a review of the financial imppci!tions of
different bond ratings and bond insurpnce).
,
3) Bond Structure.
Size the bond issue, structure those terms and conditions which most
advantageously meets demands or current market conditions and the
objectives of the City. .
4) Document Review.
Review and comment on all legal documents prepared by bond counsel to
ensure conformante with the proposed.finpncing structure.
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. Page .16
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5) Timing of Sale.
Advise City of market movements, trends and developments and offer
recommendations as to the timing of the sale of the bonds in relation to market
conditions.
6) Official Statement.
At the direction of the. City, prepare the preliminary and final Official Statement.
The Official Statement will be prepared in conformance with the adopted
guidelines of Securities and Exchange Commission Rule 15c2-12.
7) Disclosure Issues.
Provide technical support in defining disclosure issues' necessary to meet
GFOA guidelines, as well as work with the City to fulfill its continuing disclosure
responsibilities under Securities and Exchange Commission Rule 15c2-12.
B) Rating and Insurance Agencies.
Assist in submitting documents, conducting negotiations and attending
meetings with rating agencies and bond insurance companies as may be
required. Assist the City in preparing for dialogue with the rating analyst.
9) Pricing.
Review the Purchase Contract prepared by the Disclosure Counsel and advise
on the proposed pricing by the Underwriter. Revise cash flows for final pricing
information and order securities for bond defeasance escrow.
10) Bond Closing.
Review and coordinate the arrangements for closing and delivery of the bonds
paying particular attention to needed certificates and representations of other
parties to ensure certification of information relied upon in the financing.
11) Bond Administration.
~ ~
Advise the City in administration of th~ financing after bond closing, Working
closely with the Finance Department a,!~ the City's auditors.
.
Harrell &Company, LLC Financial Consulting Services Agreement
. Page 17
(Revised 03/0912005)
~-'7(
B. Date for Commencement of Consultant Services:
(X) Same as Effective Date of Agreement
( ) Other:
C. Dates or Time Umits for Delivery of Deliverables:
Deliverable No.1: Consists of Items 1 -10 under detail scope of work. Delivery
of items will be completed by September 1. 2005.
Deliverable No.2: Consists of Item 11 under detail scope of work. Delivery of
item will be on an ongoing basis as needed.
D. Date for completion of all Consultant services:
After completion of bond refunding or termination of agreement by thirty days
written notice from either party.
9. Insurance Requirements:
(X) Statutory Worker's Compensation Insurance
(X) Employer's Liability Insurance coverage: $1,000,000.
(X) Commercial General Liability Insurance: $1.000,000.
(X) Errors and Omissions Insurance: $250;000 (not included in Commercial General
Liability coverage). '
10. Materials Required to be Supplied by City to, Consultant:
The City agrees to make available to Consultant, without cost, sufficient copies of
any applicable reports, agreements, contracts, resolutions and other relevant
documents regarding the issuer of the securities as reasonably may be ~quired
from time to time for the prompt and efficJent performance by Consultant of its
obligations hereunder.
11. Compensation:
\
A (X) Single FIXed Fee Agreement
Harrell &Company, LLC Financial Consulting Services Agreement
. Page 18
(Revised 03/09/2005)
cJ. -' 7 d-.
. The fee quoted below includes performing an the tasks listed above. Consultant's
fees are contingent and payable out of bond proceeds at bond closing. In the
event that the projected bond issue does not occur for any reason, Consultant
shall not be entitled to any compensation hereunder. Consultant fees Will be as
follows;
a fixed fee of $10,000 for preparation of preliminary and final official statements
(not applicable if Disclosure Counsel prepares these documents), payable at bond
closing;
a fIXed fee of $45,000 paid based on an assumed par value of the bonds at $13.8
million, payable at bond closing.
a fIXed fee of $10,000 for the update of Agency's finElncial plan, payable within 30
days after completion of the Financing Plan (as detailed in .item no. 2 of section
SA.: above): .
12. Materials Reimbursement Arrangement:
The City will pay from the proceeds of the securities, or otherwise, an costs and
expenses customariJy. paid there from including the cost of printing the securities
and the Official Statement(s), and any other documents, the fees and expenses of
its legal counsel, bond counsel, fees to rating agencies, bond insurance
companies, accountants, and costs of any other experts or consultants retained by
the City in connection With the financing.
13. .Contract Administrators:
. '
City: Maria V. Kachadoorian, Director of FinancefTreasurer
Consultant: Suzanne Q. Harren, President.
14. Liquidated Damages Rate: Not applicable.
15. Statement of Economic Interests, Consultant Reporting Categories, per Conflict of
Interest Code: ~ ~ ;
(X) Not Applicable. Not an FPPC Filer.
Harrell &Company, LLC Financial Consulting Services Agreement
. Page 19
(ReviSed 0:31(912005)
02-73
16. () Consultant is Real Estate Broker and/or Salesman: Not applicable.
17. Permitted Subconsultants: Not applicable.
18. Bill Processing:
Submitted in accordance with payment milestones set forth in Section 11, above.
19. SecuritY for Performance: Not applicable.
,
,
\
.
Harrell &Company, LLC Financial Consulting Services Agreement
. Page 20
(Revised 0310912005)
~-7.J-
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ATTACHMENT B
DRAFT AS OF JUNE 11,2006
NEW ISSUE - BOOK-ENTRY-ONLY
RATINGS
S&P:
Moody's: _
(See "CONCLUDING INFORMATION - Ratings on the Bonds" herein)
In the opinion of Stradling Yocca Carlson & Rauth, Q Professional Corporation, Newport Beach, California, Bond Counsel,
subject, under existing law, statutes, regulations, rulings and judicial decisions, and assuming the accuracy of 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 calculating the federal
alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, the interest on the
Bonds is exempt from State of California personal income taxes. See "LEGAL MATTERS _ Tax Matters" herein.
SAN DIEGO COUNTY
STATE OF CALIFORNIA
$13,350,000*
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
BAYFRONTITOWN CENTRE REDEVELOPMENT PROJECT
2006 SENIOR TAX ALLOCATION REFUNDING BONDS, SERIES A
Dated: Date of Delivery
Due: September 1 as Shown on the Inside Front Cover
The cover page contains certain information for quick reference only. It is Dot a summary of the issue. Potential
investors must read the entire Official Statement to obtain information essential to the making of an informed investment
decision. See "BONDHOLDERS' RISKS" herein for a discussion of special risk factors that should be considered in
evaluating the investment quality ofthe Bonds.
Proceeds from the sale of the Redevelopment Agency of the City of Chula Vista (the "Agency"), Bayfront'Town Centre
Redevelopment Project, 2006 Senior Tax AIJocation Refunding Bonds, Series A (the "Bonds'.) will be used to (i) refinance
existing obligations of the Agency, (ii) satisfy the reserve requirement for the Bonds and (iii) provide for the costs of issuing the
Bonds.
The Bonds will be issued under an Indenture of Trust, dated as of July I, 2006, by and between the Agency and U.S. Bank
National Association, as Trustee (the .'Trustee"). The Bonds are special obligations of the Agency and are payable solely from
and secured by a pledge of certain tax increment revenues (}f the Agency's BayfrontfTown Centre Project Area (the "Project
Area") and a pledge of amounts in certain funds and accounts established under the Indenture, as further discussed herein.
Interest on the Bonds is payable on March I, 2007, and semiannually thereafter on September 1 and March 1 of each year until
maturity or earlier sinking account payment or optional redemption (see "THE BONDS - General Provisions" and "THE BONDS-
Redemption" herein).
The schedu-led payment of principal of and interest on the Bonds when due will be guaranteed under a financial guaranty
insurance policy to be issued concurrently with the delivery of the Bonds by . See "SOURCES OF PAYMENT
FOR THE BONDS - Bond Insurance.'.
[LOGO]
The Bonds are being offered when. as and if issued, subject to the approval as to their legality by Stradling Yocca Carlson &
Rauth, a Professional Corporation,~ewpott Beach, California, Bond Counsel. Certain legal matters will be passed on for the
Agency by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel and
by the City Attorney and for the Underwriter by its counsel, Best, Best & Krieger LLP, Riverside, California. It is anticipated
that the Bonds will be available for delivery through the facilities of The Depository Trust Company on or about August 3, 2006
(see "APPENDIX G - BOOK-ENTRY-ONLY SYSTEM'. herein).
The date of the Official Statement is
,2006.
E. J. DE LA ROSA & CO., INC.
~-7~
. Preliminary, subject to change.
$13,350,000*
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
BAYFRONTITOWN CENTRE REDEVELOPMENT PROJECT
2006 SENIOR TAX ALLOCATION REFUNDING BONDS, SERIES A
MATURITY SCHEDULE
(Base CUSIP@t )
Serial Bonds
Maturity Date
Sentember I
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Principal
Amount
Interest
Rate
Reoffering
Yield
CUSIP@t
$
% Term Bond maturing September I, 2027, Yield _% CUSIPt_
· Preliminary, subject to change.
t CUSIP@ A registered trademark of the American Bankers Association. Copyright @ 1999-2006 Standard &
Poor's, a Division of The McGraw-Hill Companies, Inc. CUSIP@ data herein is provided by Standard & Poor's
CUSIP@ Service Bureau. This p.t3 in not intended to create a database and does not serve in any way as a
substitute for the CUSIP@ Service Bureau. CUSIP@ numbers are provided for convenience of reference only.
Neither the Agency, the Financial Advisor nor the Underwriter takes any responsibility for the accuracy of such
numbers.
02 -7h
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement This Official Statement is submitted in connection with the offer and sale of
the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other
purpose. This Official Statement is not to be construed as a contract with the purchasers of the Bonds.
Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the
Agency in any press release and in any oral statement made with the approval of an authorized officer of
the Agency or any other entity described or referenced herein, the words or phrases "will likely result,"
"are expected to," ~'will continue," "is anticipated," "estimate," ')JToject," "forecast," "expect," "intend"
and similar expressions identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in such forward-looking
statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop
the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there
are likely to be differences between forecasts and actual results, and those differences may be material.
Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the Agency to
give any information or to make any representations in connection with the offer or sale of the Bonds
other than those contained herein and if given or made, such other information or representation must not
be relied upon as having been authorized by the Agency, the Financial Advisor 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.
Involvement of Underwriter. The Underwriter has submitted 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.
Information Subject to Change. The information ,and expressions of opinions herein are subject to
change without notice and neither 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 Agency
or any other entity described or referenced herein since the date hereof. All summaries of the documents
referred to in this Official Statement are made subject to the provisions of such documents, respectively,
and do not purport to be complete statements of any or aU of such provisions.
Stabilization of Prices. In connection with this offering, the UnderWriter may overallot or effect
transactions which stabilize or maintain the market price of the 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 Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public
offering prices set forth on the inside front cover page hereof and said public offering prices may be
changed from time to time by the Underwriter.
I
THE BONDS HAVE NOT BI!EN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
~ -'~r7
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
CHULA VISTA, CALIFORNIA
CITY COUNCIL AND AGENCY GOVERNING BOARD
Stephen C. Padilla, Mayor
John McCann, Mayor Pro Tem
Steve Castaneda, Councilmember
Patricia E. Chavez, Councilmember
Jerry Rindone, Councilmember
CITY AND AGENCY STAFF
Jim Thomson, Interim City Manager
Laurie A. Madigan, Assistant City Manager, Special Projects
David Palmer, Assistant City Manager, Community Services
Dana Smith, Assistant City Manager, Development Services/Director of Community Development
Maria Kachadoorian, Director of Finance/Treasurer
Ann Moore, City Attorney
Susan Bigelow, City Clerk
PROFESSIONAL SERVICES
Bond Counsel and Disclosnre Counsel
Stradling Yocca Carlson & Rauth
a Professional Corporation
Newport Beach, California
Financial Advisor
Harrell & Company Allvisors, LLC
Orange, California
Underwriter
E. J. De La Rosa & Co., Inc.
Los Angeles, California
Trustee and Escrow Bank
U.S. Bank National Association
Los Angeles, California
Verifications
Grant Thornton LLP
" Minneapolis, Minnesota
dl.-7<6
TABLE OF CONTENTS
INTRODUCTION ......................................................1
The Agency ...................................,............................1
The City .....................................................................1
Security and Sources of Repayment ..........................!
Purpose.. ....... ............ ................................ ..... ............2
Tax Exemption...........................................................2
Professional Services .................................................2
Offering of the Bonds ................................................3
Information Concerning this Official Statement........3
THE BONDS...............................................................4
General Provisions .............. .............. ......................... 4
Redemption................................................................5
Scheduled Debt Service on the Bonds .......................6
THE FINANCING PLAN .......................................... 7
The Refunding Program............................................. 7
Estimated Sources and Use of Funds......................... 8
SOURCES OF PAYMENT FOR THE BONDS .......9
Tax Allocation Financing ...........................................9
Tax Revenues............... ............. ......... ..... ...... ...... ....... 9
Pledge of Tax Revenues........................................... 10
Reserve Account ......................................................1 0
Issuance of Additional Deb!..................................... 10
Bond Insurance ........................................................11
THE AGENCY.......................................................... 12
Government Organization....................................... .12
Agency Powen; ........................................................ 12
The Chula Vista Redevelopment Corporation ......... I3
Redevelopment Plans...............................................13
Plan Limitations....................................................... 14
Low and Moderate Income Housing........................ 14
THE PROJECT AREA............................................15
Description of the Project Area................................ 15
Assessed Valuations .................................................17
Major Taxpayen; ......................................................19
Assessment Appeals........ ..................... ........ ............20
Tax Collections'.. .......... ......... ..................... ............. .20
Outstanding Indebtedness of the Project Area .........21
Projected Tax Revenues and Debt Service
Coverage ................. ............. ............................. ....22
FINANCIAL INFORMATION ...............................25
Agency Budgetary Process and Administration.......25
\
Agency Accounting Records and Financial
Statements............ ....... ......... ..... ........ .......... .......... 25
Tax Increment Revenues .........................................27
Tax Sharing Agreements.......................................... 30
Tax Sharing Statutes ................................................ 30
BONDHOLDERS' RISKS....................................... 32
Factors Which May Affect Tax Revenues ...............32
State of California Fiscal Issues .............................. 34
Legislation Affecting Redevelopment Agencies...... 35
Secondary Marke!.................................................... 36
Loss of Tax Exemption............................................36
LEGAL MATTERS.................................................. 37
Enforceability of Remedies ..................................... 37
Approval of Legal Proceedings ............................... 37
Tax Matters .....................,........................................ 37
Absence of Litigation .............................................. 38
CONCLUDING INFORMATION .......................... 39
Ratings on the Bonds...............................................39
The Financial Advisor ............................................. 39
Continuing Disclosure ................... ......... ........... ......39
Underwriting.. ........ ............. .............. ......................40
Verifications of Mathematical Computations ..........40
Additional Information................. ...........................40
References....... .................... ................ .................... 40
Execution....... .......... ........................ ........................ 40
APPENDIX A- SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE
APPENDIX B - CITY OF CHULA VISTA
INFORMATION STATEMENT
APPENDIX C -AGENCY AUDITED FINANCIAL
. STATEMENTS FOR THE FISCAL YEAR
ENDING JUNE 30, 2005
APPENDIX D - FORM OF CONTINUING
DISCLOSURE CERTIFICATE
APPENDIX E - FORM OF BOND COUNSEL
OPINION
APPENDIX F - SPECIMEN MUNICIPAL BOND
INSURANCE POLICY
APPENDIX G - BOOK-ENTRY-ONLY SYSTEM
d}.-79
OFFICIAL STATEMENT
$13,350,000*
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
BAYFRONTITOWN CENTRE REDEVELOPMENT PROJECT
2006 SENIOR TAX ALLOCATION REFUNDING BONDS, SERIES A
This Official Statement which includes the cover page and appendices (the "Official Statement") is
provided to furnish certain information concerning the.sale of the Redevelopment Agency of the City of
Chula Vista BayrrontfTown Centre Redevelopment Project 2006 Senior Tax Allocation Refunding Bonds,
Series A (the "Bonds"), in the aggregate principal amount of $13,350,000..
INTRODUCTION
This Introduction contains only a brief description of this issue and does not purport to be complete. The
Introduction is subject in all respects to more complete information in the entire Official Statement and
the offering of the Bonds to potential investors is made only by means of the entire Official Statement and
the documents summarized herein. Potential investors must read the entire Official Statement to obtain
information essential to the making of an informed investment decision.
The Agency
The Redevelopment Agency of the City of Chula Vista (the "Agency") is a public body, corporate and
politic, existing under and by virtue of the Community Redevelopment Law of the State, constituting Part
1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State (the
"Redevelopment Law"). The Agency was activated by the City Council of the City of Chula Vista in
1972. The City Council, at the same time, declared itself to be the members of the Agency and appointed
the City Manager to be the Agency's Executive Director (see "THE AGENCY" herein).
The City
, '
The City of Chula Vista (the "City") is located along the San Diego Bay in Southern California, 8 miles
south of San Diego and 7 miles north of the Mexico border in an area generally known as "South Bay."
The City encompasses approximately 50 square miles. Based on population, Chu1a Vista is the second
largest city in San Diego County (see "APPENDIX' B - CITY OF CHULA VISTA lNFORMATION
STATEMENT" herein).
Security and Sources of Repayment
The Bonds. The Bonds are issued and secured under an Indenture of Trust, dated as of July 1,2006, (the
"Indenture"), by and between the Agency and U.S. Bank National Association, as trustee (the "Trustee")
(see "APPENDIX A - SUMMAR~ OF, CERTAIN PROVISIONS OF THE INDENTURE" herein).
The Agency has pledged to the repayment of the Bonds, and has secured by a lien on, all of the Tax
Revenues, as defmed herein. Tax Revenues means all of the Tax Increment Revenues allocated to the
Agency's BayrrontfTown Centre Project Area excluding (i) amounts required to be deposited in the
Agency's low and moderate income housing fund pursuant to Section 33334.3 of the Redevelopment
Law, (ii) amounts payable to the Agency by the State pursuant to Section 16112.7 of the California
Government Code, and (iii) amounts required to be paid pursuant to the Tax Sharing Statutes, as defined
· Preliminary, subject to change.
1
~...;.<6{)
herein to the extent not subordinated to the payment of debt service on the Bonds. Tax Increment
Revenues consist of tax increment revenues receivable by the Agency with respect to the Project Area
pursuant to Article 6 of Chapter 6 of the Redevelopment Law. See "THE AGENCY - Low and Moderate
Income Housing," "TIlE PROJECT AREA - Outstanding Indebtedness of the Project Area," "FINANCIAL
INFORMATION - Tax Increment Revenues" and "BONDHOLDERS' RISKS" herein.
The Project Area. The Bayfrontffown Centre Project Area (the "Project Area") was created through an
amendment of the Redevelopment Plans for the Agency's Bayfront Redevelopment Project and Town
Centre Redevelopment Project on July 5, 1979. The Bayfront Redevelopment Project component of the
Project Area (the "Bayfront Redevelopment Project") was originally created in 1974 and is comprised of
637 acres between the City's north and south boundaries, bounded by Interstate 5 to the east and the San
Diego Bay to the west. The Agency amended the Bayfront Project Area in 1998 to add 398 acres to the
Project Area (the "Bay front Amended Area"). The Town Centre Redevelopment Project component of
the Project Area (the "Town Centre Redevelopment Projecf') was created in 1976 and comprises
approximately 138 acres in the City's central business district. See "TIlE PROJECT AREA" herein
The Bonds are special obligations of the Agency. The Bonds do not constitute a debt or liability of
the City of Chula Vista, the County of San Diego, the State of California or of any political
subdivision thereof, other than the Agency. The Agency shall only he obligated to pay the principal
of the Bonds, or the interest thereon, from the funds described herein, and neither the faith and
credit nor the taxing power of the City of Chula Vista, the County of San Diego, the State of
California or any of its political subdivisions is pledged to the payment of the principal of or the
interest on the Bonds. The Agency has no taxing power.
Purpose
The Bonds are being issued to (i) refmance certain obligations of the Agency, (ii) satisfy the Reserve
Requirement for the Bonds and (iii) provide for the costs of issuing the Bonds. See "TIlE FINANCING
PLAN" herein.
Tax Exemption
,
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California ("Bond Counsel"), under existing statutes, regulations, rulings and judicial decisions, and
assuming certain representations and compliance with certain covenants and requirements described
herein, the interest (and original issue discount) on the Bonds is excluded from gross income for federal
income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative
minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, the
interest (and original issue discount) on the Bonds is exempt from State of California personal income
tax. See "LEGAL MATTERS - Tax Exemption" herein.
Professional Services
The legal proceedings relating to the issuance of the Bonds are subject to the approving opinion of
Stradling Yocca Carlson & RautJ., a Professional Corporation, Newport Beach, California, Bond Counsel.
Certain legal matters will be passed on for the Agency by Ann Moore, City Attorney and by Stradling
Yocca Carlson & Rauth, a Professional Corporation, as Disclosure Counsel.
U.S. Bank National Association, serves as Trustee under the Indenture. The Trustee will act on behalf of
the Bondholders for the purpose of receiving all moneys required to be paid to the Trustee, to allocate, use
and apply the same, to hold, receive and disburse the Tax Revenues and other funds held under the
Indenture, and otherwise to hold all the offices and perform all the functions and duties provided in the
Indenture to be held and performed by the Trustee.
2
dl.-g(
Harrell & Company Advisors, LLC (the "Financial Advisor") advised the Agency as to the financial
structure and certain other rmancial matters relating to the Bonds.
The Agency's audited general purpose rmancial statements for the fiscal year ended June 30, 2005,
attached hereto as "APPENDIX C" have been audited by Caporicci & Larson, Certified Public
Accountants, Costa Mesa, California. The Agency's audited rmancial statements are public documents
and are included within this Official Statement without the prior approval of the auditor. Accordingly, the
auditor has not performed any post-audit of the rmancial condition of the Agency.
Offering of the Bonds
Authority for Issuance. The Bonds are to be issued and secured pursuant to the Indenture, as authorized
by Resolution No. of the Agency adopted on ,2006 and the Redevelopment Law.
Offering and Delivery of the Bonds. The Bonds are offered, when, as and if issued, subject to the
approval as to their legality by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport
Beach, California, as Bond Counsel. It is anticipated that the Bonds, in book-entry form, will be available
for delivery through the facilities of The Depository Trust Company on or about August 3, 2006. See
"APPENDIX G - BOOK-ENTRY-ONLY SYSTEM."
Information Concerning this Official Statement
This Official Statement speaks only as of its date. The information set forth herein has been obtained by
the Agency with the assistance of the Financial Advisor from sources other than the Agency which are
believed to be reliable and such information is believed to be accurate and complete, but such information
is not guaranteed as to accuracy or completeness, nor has it been independently verified and is not to be
construed as a representation by the Financial Advisor or the Disclosure Counsel. Statements contained
in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not
expressly so described herein, are intended as such and are not to be construed as representations of fact.
Preliminary Official Statement Deemed Final. The information set forth herein is in a form deemed
rmal, as of its date, by the Agency for the purpose of Rule 15c2-12 under the Securities Exchange Act of
1934, as amended (except for the omission of certain llformation permitted to be omitted under the Rule).
The information herein is subject to revision, amendment and completion in a Final Official Statement.
The information and expressions of opinion herein are subject to change without notice and the delivery
of this Official Statement shall not, under any circumstances, create any implication that there has been no
change in the information or opinions set forth herein or.in the affairs of the Agency since the date hereof.
Availability of Legal Documents. The summaries and references contained herein with respect to the
Indenture, the Bonds and other statutes or documents do not purport to be comprehensive or dermitive
and are qualified by reference to each such document or statute, and references to the Bonds are qualified
in their entirety by reference to the form thereof included in the Indenture. Copies of the documents
described herein are available for inspection during the period of initial offering of the Bonds at the
offices of the Financial Advisor. Copies of these documents may be obtained after delivery of the Bonds
at the trust office of the Trustee, V,S. Bank National Association, 633 West Fifth Street, 24th Floor, Los
Angeles, California, 90017 or from the Agency at 276 Fourth Avenue, Chula Vista, California 91910.
3
~ -8 ;;.,
THE BONDS
General Provisions
Repayment of the Bonds. Interest on the Bonds is payable at the rates per annum set forth on the inside
front cover page hereof. Interest on the Bonds will be computed on the basis of a year consisting of 360
days and twelve 30-day months.
Interest on the Bonds shall be payable commencing March I, 2007 and each September I and March I
(each an "Interest Payment Date,") next preceding the date of authentication thereof unless (i) a Bond is
authenticated on or before an Interest Payment Date and after the close of business on the preceding
Record Date, in which event it shall bear interest from such Interest Payment Date, (ii) a Bond is
authenticated on or before the first Record Date, in which event interest thereon shall be payable from the
Closing Date, or (iii) interest on any Bond is in default as of the date of authentication thereof, in which
event interest thereon shall be payable from the date to which interest has been paid in full, or made
available for payment. Interest shall be paid on each Interest Payment Date to the persons in whose
names the ownership of the Bonds is registered on the Registration Books at the close of business on the
immediately preceding Record Date, except as provided below. Interest on any Bond which is not
pupctually paid or duly provided for on any Interest Payment Date shall be payable to the person in whose
name the ownership of such Bond is registered on the Registration Books at the close of business on a
special record date for the payment of such defaulted interest to be fixed by the Trustee, notice of which
shall be given to such Owner not less than ten (10) days prior to such special record date.
Transfer or Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred or
exchanged, pursuant to the provisions of the Indenture, upon surrender of such Bond for cancellation at
the principal corporate trust office or agency of the Trustee. Whenever any Bond or Bonds shall be
surrendered for transfer or exchange, the Trustee shall authenticate and deliver a new Bond or Bonds for a
like aggregate principal amount and of like maturity. The Trustee may require the Bondholder requesting
such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer
or exchange. Transfer or exchange of any Bond shall not be permitted by the Trustee during the period
established by the Trustee for selection of Bonds for redemption or if such Bond has been selected for
redemption. '-
Book-Entry Only System. 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. Interest on and principal of the Bonds will be payable when due by
wire of the Trustee to DTC which will in turn remit such interest and principal to DTC Participants (as
defmed herein), which will in turn remit such interest and principal to Beneficial Owners (as defined
herein) of the Bonds (see "APPENDIX G - BOOK-ENTRY-ONLY SYSTEM" herein). As long as DTC is the
registered owner of the Bonds and DTC's book-entry method is used for the Bonds, the Trustee will send
any notices to bondholders only to DTC.
Discontinuance of Book-Entry System. DTC may discontinue providing its services as securities
depository with respect to the l3t(nds at any time by giving reasonable notice to the Agency or the Trustee.
Under such circumstances, in tlie event that a successor securities depository is not obtained, Bonds are
required to be printed and delivered as described in the First Supplement. The Agency may decide to
discontinue use of the system of book-entry transfers through DTC (or a successor securities depository).
In that event, the Bonds will be printed and delivered as described in the First Supplement. In addition,
the following provisions shall apply: interest on the Bonds will be paid on each Interest Payment Date by
check of the Trustee mailed on such Interest Payment Date by first class mail, to the person appearing on
the registration books of the Trustee as the Owner thereof as of the close of business on the preceding
Record Date, at such Owner's address as it appears on the registration books of the Trustee; provided
however, that at the written request of the Owner of Bonds in an aggregate principal amount of at least
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$1,000,000, which request is on file with the Trustee as of any Record Date, interest with respect to such
Bonds shall be paid on each succeeding Interest Payment Date by wire transfer in immediately available
funds to such account within the Urnted States of America as shall be specified in such request. The
principal and prepayment price represented by any Bond at maturity or upon prepayment will be payable
upon presentation and surrender of such Bond at the Office of the Trustee, or at such place as may be
designated by the Trustee.
Redemption
Optional Redemption. The Bonds maturing on or before September 1,2016, shall not be subject to
optional redemption prior to their respective maturities. The Bonds maturing on or after September 1,
2017 shall be subject to redemption in whole, or in part among such maturities as shall be determined by
the Agency, and in any case by lot within a maturity, at the option of the Agency, on any date on or after
September 1, 2016, at the option of the Agency ITom any available source of funds, at a redemption price
equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date of
redemption, without premium.
Notice of Redemption. The Trustee on behalf and at the expense of the Agency shall mail (by first class
mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their
respective addresses appearing on the Registration Books, at least thirty (30) but not more than sixty (60)
days prior to the date fixed for redemption; provided, however, that neither failure to receive any such
notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of
such Bonds or the cessation of the accrual of interest thereon.
Additionally, on the date on which the notice of redemption is mailed to the Owners of the Bonds
pursuant to the provisions above, such notice of redemption shall be given by (i) first class mail, postage
prepaid, (ii) confirmed facsimile transmission, or (iii) overnight delivery service to the Agency, to each of
the Securities Depositories and to one or more of the Information Services as shall be designated in
writing by the Agency to the Trustee.
Rescission. The Agency shall have the right to rescind any optional redemption by written notice to the
Trustee on or prior to the dated fixed for redemption. Any' notice of optional redemption shall be
cancelled and annulled if for any reason funds wit! not or are not available on the date fixed for
redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall
not constitute an Event of Default under the Indenture. The Agency and the Trustee shall have no liability
to the Owners or any other party related to or arising ITom such rescission of redemption. The Trustee
shall mail notice of such rescission of redemption in the,same manner as the original notice of redemption
was sent.
Effect of Redemption. From and after the date fIXed for redemption, if notice of redemption shall have
been duly mailed and funds available for the payment of the principal of and interest on the Bonds so
called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled to any
benefit under the Indenture other than the right to receive payment of the redemption price, and no
interest shall accrue thereon ITom and after the redemption date specified in such notice.
Partial Redemption. In the htnt only a portion of any Bond is called for redemption, then upon
surrender of such Bond the Agency shall execute and the Trustee shall authenticate and deliver to the
Owner thereof, at the expense of the Agency, a new Bond or Bonds of the same series and maturity, of
authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to
be redeemed.
5
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Scheduled Debt Service on the Bonds
The following is the scheduled annual Debt Service on the Bonds.
Bond Year Ending
Sentember I
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Total
Princinal
\
Interest
'-
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Annual Debt Service
THE FINANCING PLAN
The Refunding Program
The Agency has previously issued its $14,810,000 BayfTont/Town Centre Redevelopment Project 1994
Senior Tax Allocation Refunding Bonds, Series A (the "1994A Bonds") and $5,680,000 BayfTont/Town
Centre Redevelopment Project 1994 Senior Tax Allocation Refunding Bonds, Series D (the "1994D
Bonds") pursuant to an Indenture of Trust dated as of November I, 1994 by and between the Agency and
U.S. Bank National Association, successor-in-interest to First Interstate Bank of California (the "1994
Senior Bonds Indenture"). In addition, the Agency has previously issued its $8,195,000 BayfTont/Town
Centre Redevelopment Project 1994 Subordinate Tax Allocation Refunding Bonds, Series C (the "1994C
Bonds") pursuant to an Indenture of Trust dated as of November I, 1994 by and between the Agency and
U.S. Bank National Association, successor-in-interest to First Interstate Bank of California (the "1994
Subordinate Bonds Indenture," and together with the 1994 Senior Bonds Indenture, the "1994
Indentures"). As of the Delivery Date, $12,590,000 aggregate principal amount of 1994A Bonds remains
outstanding, $4,945,000 aggregate principal amount of I 994D Bonds remains outstanding and $6,855,000
aggregate principal amount of I 994C Bonds remains outstanding.
Concurrent with the delivery of the Bonds, the Agency will issue its BayfTont/Town Centre
Redevelopment Project 2006 Subordinate Tax Allocation Refunding Bonds, Series B (the "Series B
Bonds") in the principal amount of$12,500,000*.
On the Delivery Date, a portion of the proceeds of the Bonds and the Series B Bonds, together with
certain other funds, will be deposited in trust with, as escrow holder (the "Escrow Bank") pursuant to the
Indenture and an Escrow Agreement dated as of July I, 2006, between the Agency and the Escrow Bank
(the "Escrow Agreement").
The deposit will be in an amount sufficient to pay principal and interest on the 1994A Bonds and the
I 994D Bonds through and including September 1,2006, to pay the redemption price of the I 994A Bonds
and 1994D Bonds remaining outstanding on September I, 2006, to pay principal and interest on the
1994C Bonds through and including November 1,2006 and to pay the redemption price of the 1994C
Bonds remaining outstanding on November 1,2006. As a result of the deposits, the lien of the 1994A
Bonds, the I 994D Bonds and 1994C Bonds created by the 1994 Indentures, including, without limitation,
the pledge of the Tax Revenues to repay the I 994A Bonds, the I 994D Bonds and 1994C Bonds, will be
discharged, tenninated and of no further force and effect upon the deposit with the Escrow Bank of the
amounts required pursuant to the Escrow Agreement.
~ ~
· Preliminary, subject to change.
7
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Estimated Sources and Use of Funds
The Trustee will receive the proceeds tram the sale of the Bonds and the Series B Bonds and, together
with other fmds received, will apply them as shown below.
Sources of Funds
The Bonds
Tbe Series B Bonds
Par Amount
Funds held for the 1994 Bonds
Total Sources
Use of Funds
Transfer to Escrow Bank
Original Issue Discount
Underwriter's Discount
Costs ofIssuance Fund (1)
Reserve Account
Total Uses
(1) Expenses include fees and expenses of Bond Counsel, the Financial Advisor, Disclosure Counsel and the
Trustee, costs of printing the Official Statement, and other costs of issuance of the Bonds.
,
\
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SOURCES OF PAYMENT FOR THE BONDS
Tax Allocation Financing
The Redevelopment Law and the California Constitution provide a method for fmancing and refinancing
redevelopment projects based upon an allocation of taxes collected within a redevelopment project area.
First, the assessed valuation of the taxable property in a project area, as last equalized prior to adoption of
the redevelopment plan, is established and becomes the base roll. Thereafter, except for any period
during which the assessed valuation drops below the base year level, the taxing agencies, on behalf of
which taxes are levied on property within the project area, will receive the taxes produced by the levy of
the then current tax rate upon the base roll. Taxes collected upon any increase in the assessed valuation of
the taxable property in a project area over the levy upon the base roll may be pledged by a redevelopment
agency to the repayment of any indebtedness incurred in financing the redevelopment project.
Redevelopment agencies themselves have no authority to levy taxes on property and must look
specifically to the allocation of taxes as indicated above.
Tax Revenues
As provided in each of the Redevelopment Plans for the constituent project areas, and pursuant to Article
6 of Chapter 6 of the Redevelopment Law, and Section 16 of Article XVI of the Constitution of the State,
taxes levied upon taxable property in the Redevelopment Projects each year by or for the benefit of the
State, for cities, counties, districts or other public corporations (collectively, the "Taxing Agencies") for
fiscal years beginning after the effective date of each constituent Redevelopment Plan, will be divided as
follows:
I. To Taxing Agencies: The portion of the taxes which would be produced by the rate upon which
the tax is levied each year by or for each of said Taxing Agencies upon the total sum of the
assessed value of the taxable property in the project area as shown upon the assessment roll used
in connection with the taxation of such property by such Taxing Agency last equalized prior to the
establishment of the project area will be allocated to, and when collected will be paid into, the
funds of the respective Taxing Agencies as taxes by or for said Taxing Agencies; and
2. To the Agencv: The portion of such levied tax~s each year in excess of such amount will be
allocated to, and when collected, will be paid into a special fund of the Agency to the extent
necessary to pay indebtedness of the Agency, including but not limited to its obligation under the
respective Indenture, to pay the principal of, prepayment premium (if any) and interest on the
Bonds and to replenish the Reserve Account established under the respective Indenture.
The Agency has no power to levy and collect property taxes, and any property tax limitation, legislative
measure, voter initiative or provisions of additional sources of income to Taxing Agencies having the
effect of reducing the property tax rate could reduce the amount of Tax Revenues that would otherwise be
available to pay the Agency's obligations under the Indenture and thus reduce the amount of Tax
Revenues available to pay the principal of and Interest on the Bonds. Likewise, broadened property tax
exemptions could have a similar effect. See "BONDHOLDERS' RISKS" and "FINANCIAL INFORMATION
- Tax Increment Revenues" herein. I
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Pledge of Tax Revenues
The Tax Revenues are pledged to the payment of principal of and interest on the Bonds pursuant to the
Indenture until the Bonds and any Parity Debt have been paid, or until moneys have been set-aside
irrevocably for that purpose. The Trustee will covenant to exercise such rights and remedies as may be
necessary to enforce the payment of the Tax Revenues when due under the Indenture, and otherwise to
protect the interests of the Bondholders in the event of default by the Agency.
The Bonds are limited ohligations of the Agency. The Bonds do not constitute a debt or liability of
the City of Chula Vista, the State of California or of any political subdivision thereof, other than the
Agency. The Agency shall only be obligated to pay the principal of the Bonds, or the interest
thereon, from the funds described herein, and neither the faith and credit nor the taxing power of
the City of Chula Vista, the State of California or any of its political subdivisions is pledged to the
payment of the principal of or the interest on the Bonds. The Agency has no taxing power.
The Agency has irrevocably granted a pledge of, lien on, and security interest in the Tax Revenues for the
repayment of the Bonds. Tax Revenues consist of all of the Tax Increment Revenues allocated to the
Project Area excluding (i) amounts required to be deposited in the Agency's low and moderate income
housing fund pursuant to Section 33334.3 of the Redevelopment Law and (ii) amounts payable by the
State pursuant to Section 16112.7 of the Government Code and (iii) amounts required to be paid pursuant
to the Tax Sharing Statutes, as defmed herein unless subordinated to the payment of debt service on the
Bonds. Tax Increment Revenues consist of tax increment revenues receivable by the Agency with respect
to the Project Area pursuant to Article 6 of Chapter 6 of the Redevelopment Law. See "THE PROJECT
AREA - Outstanding Indebtedness of the Project Area," "THE AGENCY - Low and Moderate Income
Housing," "FINANCIAL INFORMATION - Tax Increment Revenues" and "Tax Sharing Statutes," and
"BONDHOLDERS' RISKS" herein.
Reserve Account
A Reserve Account for the Bonds has been funded under the Indenture to be held by the Trustee to further
secure the timely payment of principal and Interest on the Bonds. The amount required to be maintained
in the Reserve Account for the Bonds is the least of(i) 10% of the original proceeds (within the meaning
of section 148 of the Code) of the Bonds, (ii) 125% of the average Annual Debt Service for that and every
subsequent Bond Year, or (iii) Maximum Annual Debt Service (the "Reserve Requirement"). The
Indenture provides that in lieu of a cash deposit, the Agency may satisry all or a portion of a Reserve
Requirement by means of a Qualified Reserve Account Credit Instrument (see "APPENDIX A _
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE" herein).
Issuance of Additional Debt
Parity Debt. The Agency may issue or incur additional Parity Debt on a parity with the Bonds subject to
the following specific conditions.
(a) The Agency shall be in compliance with all covenants set forth in the Indenture, and all
Supplemental Indenturf:\.
(b) The Tax Revenues (excluding Tax Revenues allocated to the Agency ITom the Power Plant, as
defmed herein) estimated to be received for the then current Bond Year shall be at least equal to
175% of Maximum Annual Debt Service on all Bonds and any existing Parity Debt which will be
Outstanding immediately following the issuance of such additional Parity Debt. The Power Plant
is defmed as that facility currently owned by LSP South Bay, LLC (see "THE PROJECT AREA"
herein).
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(c) The Supplemental Indenture providing for the issuance of such additional Parity Debt shall
provide that interest thereon shall not be payable on any dates other than March I and September
I, and principal thereof shall be payable on September I in any year in which principal is
payable.
(d) The Supplemental Indenture providing for the issuance of such additional Parity Debt shall
provide for the deposit into the Reserve Account of an amount required to cause the balance
therein to equal the full amount of the Reserve Requirement (which may be maintained in whole
or in part in the form of a Qualified Reserve Account Credit Instrument).
(e) The issuance of such additional Parity Debt shall not cause the Agency to exceed any applicable
Plan Limit.
(f) The Agency shall deliver to the Trustee and the Bond Insurer a Certificate of the Agency
certifYing that the conditions precedent to the issuance of such additional Parity Debt set forth in
the foregoing paragraphs (a), (b), (c), (d) and Ce) have been satisfied.
Subordinate Debt. If the Agency is in compliance with all covenants set forth in the Indenture, the
Agency may for any purpose issue or incur obligations having a lien on the Tax Revenues which is
subordinate to the pledge of the Tax Revenues to the Bonds.
Bond Insurance
[To be completed]
, ,
II
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THE AGENCY
Government Organization
The Agency is a public body, corporate and politic, existing under and by virtue of tbe California
Community Redevelopment Law, being Part I of Division 24 (commencing witb Section 33000) of tbe
Healtb and Safety Code oftbe State (tbe "Redevelopment Law"). The Agency was activated in 1972, and
is governed by a five-member board (tbe "Agency Board") which consists of all members of tbe City
Council. The Chairman and Vice Chairman are appointed to a one-year term by tbe Agency Board from
among its members. The Agency's members and term expiration dates are as follows:
AGENCY GOVERNING BOARD
Board Member
Stephen C. Padilla, Mayor and Chairman
Steve Castaneda, Councilmember
Patricia E. Chavez, Councilmember
John McCann, Councilmember
Jerry Rindone, Councilmember
Term Expires
December 2006
December 2008
December 2006
December 2006
December 2008
The City performs certain general administrative functions for the Agency and tbe Chula Vista
Redevelopment Corporation (see "The Chula Vista Redevelopment Corporation" below). The City
Manager serves as tbe Agency's Executive Director, tbe City's Director of Community Development
serves as the Agency's Secretary and the City's Finance Director serves as Agency's Treasurer. The costs
of such functions, as well as additional services performed by City staff are allocated annually to tbe
Agency. The Agency reimburses tbe City for such allocated costs out of available Tax Increment
Revenues. Such reimbursement is subordinate to any outstanding bonds, loans and other indebtedness of
tbe Agency. Current City Staff assigned to administer the Agency and tbe Chula Vista Redevelopment
Corporation include:
,
Jim Thomson, Interim City Manager
Laurie A. Madigan, Assistant City Manager, Special Projects
David Palmer, Assistant City Manager, Community Services
Dana Smith, Assistant City Manager, Development Services/Director of Community Development
Maria Kachadoorian, Directdr of Finance/Treasurer
Ann Moore, City Attorney
Susan Bigelow, City Clerk
Agency Powers
All powers of tbe Agency are vested in its members. Pursuant to tbe Redevelopment Law, tbe Agency is
a separate public body and exercises governmental functions, including planning and implementing of tbe
Project Area. \
The Agency may exercise the right to issue or incur loans, advances or otber indebtedness for autborized
purposes and to expend tbeir proceeds, and tbe right to acquire, sell, rehabilitate, develop, administer or
lease property. The Agency may demolish buildings, clear land and cause to be constructed certain
improvements, including streets, sidewalks and utilities, and can further prepare for use as a building site
any real property which it owns or administers.
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The Agency may, from any funds made available to it for such purposes, and subject to certain conditions,
pay for all or part of the value of land and the cost of buildings, facilities or other improvements to be
publicly owned and operated. The Agency may not construct or develop buildings, with the exception of
public buildings and housing, and must sell or lease cleared property which it acquires within a
redevelopment project for redevelopment in conformity with a particular redevelopment plan, and may
further specify a period within which such redevelopment must begin and be completed.
The Chula Vista Redevelopment Corporation
The City formed the Chula Vista Redevelopment Corporation (the "Corporation") on June 15, 2005. The
Corporation is a 50 I c3 Public Benefit Corporation, whose board of directors consists of the Mayor,
Mayor Pro Tem, the three remaining City Council Members, and four members of the public meeting
certain criteria for selection. The Corporation was formed to focus the City's redevelopment activities in
certain areas, and carry out all City planning and zoning activities within such areas, including planning
commission responsibilities and functions, design review committee responsibilities and functions and
environmental review commission responsibilities and functions. The City Manager, the City's Director
of Financefrreasurer and the City's Director of Community Development serve as Chief Executive
Officer, Chief Financial Officer and Secretary of the Corporation respectively.
Redevelopment Plans
Under the Redevelopment Law the governing board is required to adopt, by ordinance, a redevelopment
plan for each redevelopment project. A redevelopment agency may only undertake those activities within
a redevelopment project specifically authorized in the adopted redevelopment plan. A redevelopment
plan is a legal document, the content of which is largely prescribed in the Redevelopment Law rather than
a "plan" in the customary sense of the word. The general objectives of the Agency's Redevelopment
Plans for the component areas of the Project Area are to encourage investment in the Project Area by the
private sector. The Project Area provides for the acquisition of property, the demolition of buildings and
improvements, the relocation of any displaced occupants, and the construction of streets, parking
facilities, utilities and other public improvements. The Redevelopment Plans also allow the
redevelopment of land by private enterprise, the rehabilitation of structures, the rehabilitation or
construction of low and moderate income housing" anP participation by owners and the tenants of
properties in the Project Area.
The City Council approved and adopted the Redevelopment Plan for the Bayfront Redevelopment Project
on July 16, 1974, pursuant to Ordinance No. 1541. It was subsequently amended on July 17, 1979 to
merge it with the Town Centre Redevelopment Project.. The Redevelopment Plan was also amended on
April 22, 1986 to include certain financial limitations, again on January 4, 1994 and November 8, 1994 to
add limitations prescribed by AB 1290 (see "Plan Limitations" below), on July 7, 1998 to include
additional territory (the "Bayfront Amended Area") and amend financial limits, on January 13, 2004 to
eliminate the time limit on establishing debt and on January 27, 2004 to extend the duration of the
Redevelopment Plan.
The City Council approved and adopted the Redevelopment Plan for the Town Centre Redevelopment
Project on July 6, 1976, pursuaIt tC\Ordinance No. 1691. It was subsequently amended on July 17, 1979
to merge it with the Bayfront Redevelopment Project, on April 22, 1986 to include certain fmancial
limitations, on January 4, 1994 and November 8, 1994 to add limitations prescribed by AB 1290, on July
7, 1998 to amend fmanciallimits, on January 13,2004 to eliminate the time limit on establishing debt and
on January 27, 2004 to extend the duration of the Redevelopment Plan (see "Plan Limitations" below).
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Plan Limitations
The Redevelopment Plans for the constituent redevelopment projects impose certain limitations on the
amount of Tax Increment Revenues that the Agency may be allocated from such constituent
redevelopment projects. In 1993, the State Legislature adopted Assembly Bill 1290 (AB 1290), which
imposed certain time limitations on (I) the allocation of Tax Increment Revenues to a redevelopment
project, (2) the effectiveness of a redevelopment plan and (3) the incurrence of debt. Prior to subsequent
changes, Section 33333.6 of the Redevelopment Law provided that a redevelopment agency may not pay
indebtedness or receive property taxes pursuant to Section 33670 of the Redevelopment Law after ten
years from the termination of the effectiveness of a redevelopment plan (which was limited to the later of
January I, 2009 or 40 years after the adoption of such redevelopment plan). In 1998, the State
Legislature adopted Assembly Bill 1342 (AB 1342), which allowed redevelopment agencies to extend
plan limitations to such maximum terms without having to comply with the statutory plan amendment
process if such agency's existing plan limits were shorter. In 2002, the State Legislature adopted Senate
Bill 211 (SB 211), allowing the elimination of the Agency's time limitation on incurring debt.
More recently, Senate Bill 1045 (SB 1045) and Senate Bill 1096 (SB 1096) provided that the governing
body could adopt an ordinance to extend the limits on the termination of redevelopment plans approved
prior to 1994 and the authority to collect Tax Increment Revenues by one additional year each time the
Agency was required to make a payment to ERAF in fiscal years 2003/04, 2004/05 and 2005/06 (see
"BONDHOLDERS' RISKS - State of California Fiscal Issues" herein). Even though the constituent
redevelopment projects have been merged, the limitations established with respect to a constituent
redevelopment project continue to apply to such constituent redevelopment project, except with respect to
the limitation on the maximum Tax Increment Revenues and on maximum outstanding bonded
indebtedness as described below.
The current limitations imposed by the respective Redevelopment Plans are as follows:
Proiect Area
Bayfront
Original Area
Amended Area
Town Centre
Plan EXDiration Date
Last Date to Collect
Tax Increment
Total Tax Increment
Limitation
July 16,2015
July 7, 2029
July 6,2017
July 16,2025
June 23 2044
July 6, 2027
$210,000,000
N/A
$84,000,000
The maximum bonded indebtedness for the Project Area, with the exception of the Bayfront Amended
Area, which has no limit, is $50,000,000. The Agency'has eliminated the limits in each Redevelopment
Plan on incurrence of debt in accordance with SB 211. The Agency has also extended the Redevelopment
Plan for the Original Bayfront Redevelopment Project and the Town Centre Redevelopment Project by
one year in accordance with SB 1045, but has not yet adopted any extensions on plan limits pursuant to
SB 1096.
Low and Moderate Income Housing
In 1976, the Redevelopment La~ was amended to require that for every redevelopment plan adopted after
January I, 1977, or any area which is added to a redevelopment project by an amendment to a
redevelopment plan after January I, 1977, not less than twenty percent (20%) of Tax Increment Revenues
must be set aside annually for the purpose of increasing and improving the community's supply of low
and moderate income housing available at affordable housing costs to persons and families of very low,
low or moderate income households. In 1985, the Redevelopment Law was further amended to add
substantially the same requirements with respect to plans adopted prior to January I, 1977. No portion of
the Tax Increment Revenues required to be set aside for low and moderate income housing is available to
pay debt service on the Bonds.
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THE PROJECT AREA
Description of the Project Area
The Project Area is comprised of the Agency's Bayfront Redevelopment Project and Town Centre
Redevelopment Project. The relative acreage from each of the constituent redevelopment projects
comprising the Project Area is shown below:
Original Bayfront Area
Bayfront Amended Area
Town Centre
637 Acres
398 Acres
13 8 Acres
1,173 Acres
As noted above, the Agency has a different limit on the time to collect Tax Revenues from each separate
area. See "BONDHOLDERS' RISKS - Plan Limitations" herein.
The Bayfront Redevelopment Project. The Original Bayfront Redevelopment Project, formed in 1974,
is comprised of 637 acres of property located between Interstate 5 and the mean high tide line along the
Chula Vista Bayfront. The Bayfront Amended Area was created in 1998 and encompasses 398 acres of
property west of the mean high tide line to the water line. Of the total property in the Bayfront
Redevelopment Project, 45 acres are developed with a marina, and 513 acres are designated the
Sweetwater Marsh National Wildlife Refuge. The goal of the Agency is to encourage development along
the City's bayfront while maintaining recreational access to the waterfront.
The Unified Port District of San Diego (the "Port District") administers 420 acres of state public tidelands
within the Bayfront Redevelopment Project under a Tidelands Trust that guides how the land is to be
used. The Port District and the City have entered into a joint venture to work together on developing the
waterfront under the Chula Vista Bayfront Master Plan ("CVBMP"). The objectives of the CVBMP are
to create an active commercial harbor with public space at the water's edge, redevelop underutilized and
vacant areas on Port tidelands, provide a continuous shoreline pedestrian walkway, and establish
ecological buffers to protect environmentally sensitive resources.
After much public participation in the plan developmeut, the environmental impact report ("ElR") for the
CVBMP is now in process. Once the ErR is complete, public hearings will be scheduled to receive public
comment. The CVBMP must also be approved by the State Lands Commission and the California
Coastal Commission. Since the Port and the Agency would like residential development to occur in the
Bayfront area, they also need approval by those two commissions, since residential development is not a
permitted use for the tidelands controlled by the Pbrt: With the permission of the State Lands
Commission, Pacifica Companies, a residential developer that already owns 128 acres of property
adjacent to the tidelands, could substitute such property for a like amount of tidelands property so that the
proposed residential development could occur.
Overall, if approved by all agencies, the CVBMP contemplates development of 1,700 condominiums, a
1,500 to 2,000 room resort hotel and adjacent 400,000 square foot conference facility, over 200 acres of
open space including a signature City park, 570,000 square feet of retail and other development, office
space, and a new marina with 11001) boat slips. The City and the Port will also need to invest in needed
infrastructure and public improvements to support the developments. The Port intends to relocate an
existing RV park located in the Bayfront Amended Area as part of the overall development in the CVBMP
area. The 2005/06 tax roll includes approximately $15 million of secured value and $11.7 million of
unsecured value relating to this property. The Agency expects that if and when the relocation occurs, the
tax roll will be reduced by approximately $26.7 million.
The largest development that has occurred in the Original Bayfront Redevelopment Project is the
completion of a 245,000 square foot BF Goodrich corporate headquarters, called the North Campus. This
15
c:;2 - 9cJ
taxpayer accounts for 36% of the total assessed value of the Project Area. The facility was completed in
_ and consolidated aviation and industrial manufacturing operations that had been spread across 83
acres and 63 buildings in the Original Bayfront Redevelopment Project. The Port has commenced with
demolition of the 63 blighted industrial buildings. The value of these buildings has already been removed
from the tax roiL
The South Bay Power Plant (the "Power Plant") is also located in the Original Bayfront Redevelopment
Project, on 150 acres leased from the Port District. The Power Plant includes four steam-powered
generation turbines, an electrical switching station, above ground fuel storage tanks, a formed liquefied
natural gas facility and extensive open areas to the north and south. The Port District has a lease
agreement for the facility with LSP South Bay, LLC, a subsidiary of LS Power Group. LSP South Bay,
LLC acquired the Power Plant from Duke Energy on May 4, 2006. The lease is set to expire in 2010
dependent upon the status of the "Reliability Must Run" designation imposed by the State. The Power
Plant is to be dismantled at the end of the lease term, which is predicated on the removal of the Reliability
Must Run designation. The City and the Port District have supported the concept of building a newer,
cleaner, more efficient power plant on Port District property near the existing Power Plant (but most
likely outside the boundaries of the Project Area) as a means to assure that the Reliability Must Run status
will be removed from the Power Plant and it can be decommissioned and dismantled. The dismantling of
the Power Plant is an integral part of the CVBMP.
The tax roll is already reflecting a reduction in assessed value of the Power Plant as the end of the lease
term gets closer. The chart below details the assessed value of the Power Plant over time.
Year
2002/03
2003/04
2004/05
2005/06
Assessed Value
$102,736,000
57,579,000
60,194,000
51,893,000
The Agency anticipates that the value of the Power Plant will decline by 25% each year until the final
year of the existing lease, at which time all value associated with the Power Plant will be eliminated from
the tax roll. ~
The Town Centre Redevelopment Project. The Town Centre Redevelopment Project is an area of
approximately 138 acres encompassing the City's central business district. The Town Centre
Redevelopment Project is urbanized and developed with a mix of public and private uses. Such uses
include the San Diego South County Superior and Municipal Court Complex, the Norman Park Senior
Center, Memorial Park as well as a variety of commercial office space, retail, retail service and residential
uses.
The Agency is in the process of developing an Urban Core Specific Plan which encompasses
development in the Town Centre Redevelopment Project as well as surrounding areas. The Urban Core
has three components - "The Villages," to be developed with additional multi-family housing, "The
Boulevard," which is the prim~ commercial corridor, and "The Promenade," a pedestrian-oriented retail
area. \
Renewed developer interest in the City's urban core has brought the first upscale Class A office
development to the downtown marketplace. The Gateway Chula Vista project will be developed in three
phases. The first phase consists of 149,000 square feet of office with ground floor retail and a four-level
parking structure and was completed in 2002. The second phase of 105,000 square feet and second
parking structure was completed in April 2006. The fmal phase is anticipated to contain 93,000 square
feet with construction commencing July 2006. This major mixed-use project anchors the southern entry
into Downtown Chula Vista, and the Gateway project's two five-story and one six-story office building
16
cX-9S"
are designed specificaIly for high tech office use, with ground floor retail. The second phase is expected
to add $21,000,000 to the 2007/08 tax roIl and the third phase is expected to add $18,600,000 to the
2009/10 tax roIl.
In addition to this major project, many infiIl projects are proposed in the Town Centre Redevelopment
Project. On the southeast corner of 3'" and E Street, a mixed use residential development comprised of
approximately 85 residential units and 6,000 square feet of retail on an 11,500 square foot lot is proposed
by Avion. It is estimated that construction of this project could commence in January 2007 and be
completed within 18 months. Estimated value at the time of completion is $30.35 million. At the
intersection of 3'" and G Street, the Agency anticipates a mixed use commercial development proposed to
contain approximately 150 residential units and 15,000 square feet of retail space on a 41,000 square foot
site which could be under development as early as December 2006. Estimated value at the time of
completion is $54 million and the development is anticipated to be complete in December 2007.
Intergulf-Mar is the developer of this project. City Mark is proposing to build approximately 120
condominiums along Landis and Douglas Wilson is proposing to build another 35 units along Church.
Estimated value at the time of completion of both projects is $54.25 million, based on an average sale
price of $350,000 per unit. Completion of these housing. projects is expected to occur in mid-2008.
Assessed Valuations
Assessed value of the constituent project areas comprising the Project Area between fiscal years 2001/02
and 2005/06 are shown in the tables below.
TABLE NO. I
ORIGINAL BAYFRONT REDEVELOPMENT PROJECT
mSTORICALASSESSED VALUATIONS AND TAX INCREMENT REVENUES
2001/02 through 2005/06
2001/02 2002/03 2003104 2004/05 2005/06
State Assessed (I) $ 88,500 $ 80,513 $ 57,579,396 $ 60,282,256 $ 51,892,582
Secured (1) 196,706,307 320,843,655 ~18,107,587 202,238,967 203,441,607
,
Unsecured 1089842]4 22010429 6678731 4 363 477 4 921 464
Total (2) $305,779,021 $342,934,597 $282,365,714 $266,884,700 $260,255,653
Less: Base year (187648 628) (187648628) (187648628) (187648628) (187648 628)
Incrementallncrease $118,130,393 $155,285,969 . $ 94,717,086 $ 79,236,072 $ 72,607,025
Tax Rate 1.009425% 1.007468% 1.006682% 1.005616% 1.005081 %
Tax Increment Revenues $ 1,192,438 $ 1,564,457 $ 953,500 $ 796,811 $ 729,759
Unitary Revenues (]) 737 954 703162 1 335057 I 351 039 1 358 970
Total Tax Revenues (4) $ 1 (nO ,92 ~ , 267 619 ~ '281'( ;')7 ~ '14780;0 ~ , 088 7'19
Source: San Diego County Auditor-Controller.
(I) The value of the Power Plant ~ ~cluded in the local secured and unsecured tax roIl value prior to 2003/04.
(2) Taxable Valuation as of August 20 equalized roll.
(3) See "FINANCIAL INFORMATION - Tax Increment Revenues - Unitary Property" herein for a discussion of the
method of allocating UnitaIy Revenues.
(4) The "Total Tax Revenues" are based on data furnished by the San Diego County Auditor-Controller's Office.
Actual Tax Increment Revenues received vary fi'om Total Tax Revenues shown herein because of supplemental
taxes, appeals or refunds, deductions for delinquencies and tax-sharing statutes and administrative charges by
the County.
17
.;l-q~
TABLE NO.2
BAYFRONT AMENDED AREA REDEVELOPMENT PROJECT
HISTORICAL ASSESSED VALUATIONS AND TAX INCREMENT REVENUES
2001102 through 2005/06
2001/02 2002/03 2003/04 2004/05 2005/06
Secured $ 36,141,469 $ 36,036,600 $ 34,004,113 $ 36,614,166 $ 37,433,140
Unsecured 18722215 21380926 21314709 23 953 992 24 844 436
Total (2) $ 54,863,684 $ 57,417,526 $ 55,318,822 $ 60,568,158 $ 62;1.77,576
Less: Base year (43834980) (43834 980) (43834980) (43834980) (43834980)
Incremental Increase $ 11,028,704 $ 13,582,546 $ 11,483,842 $ 16,733,178 $ 18,442,596
Tax Rate 1.009158% 1.008125% 1.007267% 1.006444% 1.005589%
Tax Increment Revenues $ 111;1.97 $ 136,929 $ 115,673 $ 168,410 $ 185,457
Unitary Revenues (3) 158 150 221 223 225
Total Tax Revenues (4) $ Jll 4ii $ 1 ~7 079 $ 11'1894 $ lI'iRti'n $ lRitiR7.
Source: San Diego County Auditor-Controller. See footnotes following Table No. I.
TABLE NO.3
TOWN CENTRE REDEVELOPMENT PROJECT
HISTORICAL ASSESSED VALUATIONS AND TAX INCREMENT REVENUES
2001102 through 2005/06
2001/02 2002/03 2003/04 2004/05 2005/06
Secured $114,629,075 $124,721,541 $145,423,308 $155,900,245 $175,586,050
Unsecured 26 130337 17 907486 25418173 25253 645 23 507591
Total (2) $140,759,412 $142,629,027 $170,841,48) $181,153,890 $199,093,641
,
Less: Base year (21 227600) (21227600) , (21 227 (jom (21227 6001 (21227 600)
Incremental Increase $119,531,812 $121,401,427 $149,613,881 $159,926;1.90 $177,866,041
Tax Rate 1.008749% 1.007574% 1.006867% 1 005929% 1 005265%
Tax Increment Revenues $ 1,205,776 $ 1,223,209 $ 1,506,413 $ 1,608,745 $ 1,788.026
Unitary Revenues (3) 114076 108467 108197 109630 110372
Total Tax Revenues (4) $ 1119 R"i? $ ] III l'i7() $ 1614610 $ 1718375 $ 1 R9R 39R
Source: San Diego County Auditor-Controller. See footnotes following Table No.1.
\
18
r:;;J - 9. 7
Major Taxpayers
Not including the Power Plant, sited on land leased from the Port District and operated by LSP South Bay,
LLC, the ten largest property taxpayers represent 59.7% of the 2005/06 total assessed value of the Project
Area. If the Power Plant is included, the ten largest property taxpayers represent 62.9% of the 2005/06
total assessed value of the Project Area. As discussed above, the Agency anticipates that the value of the
Power Plant will be eliminated from the tax roll by 2009.
TABLE NO.4
PROJECT AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 2005/06 ASSESSED VALUE
Not Including Power Plant
TaX08ver
Rohr Inc. (dba BF Goodrich)
Gateway Chula Vista I LLC
Chula Vista Marina RV Park
Chula Vista Capital
EASLLC
One Park Apartments LP
Foster Properties
780 Bay Boulevard
California Yacht Marina Chula Vista
Marine Group LLC South Bay Boat
Good Nite Inn Chula Vista Inc.
Total
2005/06
Assessed Value
$167,783,109
34,584,362
14,]80,878
14,003,275
9,195,536
8,893,731
8,192,498
7,966,189
6,064,525
5,417,747
4 234 468
$280,516,318
%of
Assessed
Value
35.7%
7.4%
3.0"/0
3.0%
2.0%
1.9%
1.7%
1.7%
1.3%
1.2%
0.9%
59.7%
Proiect Location
Original Bayftont
Town Centre
Bayfront Amended
Original Bayfront
Town Centre
Town Centre
Original Bayfront
Original Bayfront
Bayfront Amended
Bayfront Amended
Original Bayfront
Land Use
Manufacturing
OfficelRetail
RV Park
Vacant Land
Retail
Apartments
Warehouses
Warehouses
Marina
Industrial
Hotel
TABLE NO.5
PROJECT AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 2005/06 ASSESSED VALUE
Including Power'Plant
TaXD8ver
Rohr Inc. (dba BF Goodrich)
Duke Energy (now LSP)
Gateway Chula Vista I LLC
Chula Vista Marina RV Park
Chula Vista Capital
EASLLC
One Park Apartments LP
Foster Properties
780 Bay Boulevard
California Yacht Marina Chula Vista
Marine Group LLC South Bay Boat
Total
Source: City of Chula Vista.
2005/06
Assessed Value
$167,783,109
51,892,582
34,584,362
14,180,878
14,003,275
9,195,536
8,893,731
~ ~ 8,192,498
7,966,189
6,064,525
5417.747
$329,766,085
%of
Assessed
Value
32.20/0
9.9%
6.6%
2.7%
2.7%
1.8%
1.7%
1.6%
1.5%
1.2%
1.0%
62.9%
19
~---;o"'h -:-
Proiect Location
Original Bayfront
Original Bayfront
Town Centre
Bayfront Amended
Original Bayfront
Town Centre
Town Centre
Original Bayfront
Original Bayfront
Bayftont Amended
Bayfront Amended
.;)- q~
Land Use
Manufacturing
Energy Generation
OfficelRetail
RV Park
Vacant Land
Retail
Apartments
Warehouses
Warehouses
Marina
Industrial
Assessment Appeals
As of December 2005, Rohr Inc. has an appeal pending for its property in the Original Bayfront
Redevelopment Project. Rohr Inc. is seeking a 79% reduction in assessed value of such property to
approximately $35 million. Rohr previously filed appeals for the 2002/03 tax year, seeking a 71 %
reduction from the then assessed value of $187,049,496, for the 2003/04 tax year, seeking a 79%
reduction from the then assessed value of $184,593,505, and for the 2004/05, seeking a 67% reduction
from the then assessed value of $167,813,961. All prior appeals were withdrawn in February 2005 prior
to action by the Appeals Board.
For the 2005/06 tax year, there are also appeals pending on 2 parcels in the Town Centre Redevelopment
Project with a total assessed value of $742, 116.
Tax Collections
The table below represents the collection rates for taxes paid in the year levied in the Project Area.
TABLE NO.6
PROPERTY TAX COLLECTIONS
2000/01 2001102 2002/03 2003/04 2004/05
Original Bayrront 98.7% 98.5% 98.4% 98.7% 99.3%
Amended Area 98.5% 98.5% 98.6% 98.6% 98.5%
Town Centre 98.5% 98.5% 98.6% 98.8% 98.5%
Source: San Diego Cotmty Auditor-Controller.
\
\
20 ~ _ (( 'f
Outstanding Indebtedness of the Project Area
The Agency had the following obligations with respect to the Project Area as of May 5, 2006:
Original Amount Final
Description Issue Outstanding Maturity
(I) 1994 Senior Tax Allocation Refunding Bonds, Series A $14,810,000 $12, 905,000 2024
(2) 1994 Senior Tax Allocation Refunding Bonds, Series D 5,680,000 4,945,000 2024
(3) 1994 Subordinate Tax Allocation Refunding Bonds, Series C 8,195,000 6,855,000 2024
(4) City Advances N/A
(5) 2005 ERAF Loan 765,000 710,000 2015
(6) 2006 ERAF Loan 930,000 930,000 2016
(1) In 1994, the Agency issued its BayfrontITown Centre Redevelopment Project 1994 Tax
Allocation Refunding Bonds, Series A (the "1994A Bonds"). The 1994A Bonds are to be
refunded with the proceeds of the Bonds.
(2) In 1994, the Agency authorized the issuance of its BayfrontITown Centre Redevelopment
Project 1994 Tax Allocation Refunding Bonds, Series D (the "1994D Bonds"). The 1994D
Bonds were issued in 1996. The I 994D Bonds are to be refunded with the proceeds of the
Bonds.
(3) In 1994, the Agency issued its BayfrontITown Centre Redevelopment Project 1994
Subordinate Tax Allocation Refunding Bonds, Series C (the "1994C Bonds"). The 1994C
Bonds are to be refunded with the proceeds of the Bonds..
(4) The Agency has entered into various promissory notes with the City. Repayment is to be
made as funds become available. The City Advances have a lien on the tax increment
revenues subordinate to all other indebtedness of the Project Area.
, '
(5) and (6) The Agency satisfied its obligation to pay its share ofERAF in both 2004/05 and 2005/06 by
borrowing the amounts required through the California Statewide Communities Development
Authority. The repayment of each year's loan is payable in 20 approximately equal semi-
annual installments. The repayment obligation-has no lien on Tax Revenues but is payable on
an unsecured basis from any available Agency funds.
Source: Agency Annual Financial Report.
I I
21
~-IOO
Projected Tax Revenues and Debt Service Coverage
Receipt of projected Tax Revenues in the amounts and at the times projected by the Agency depends on
the realization of certain assumptions relating to the Tax Increment Revenues. The projections of Tax
Increment Revenues and the corresponding Tax Revenues ,uom the component areas of the
Redevelopment Projects shown on the following table were based on the assumptions shown below. The
Agency believes the assumptions upon which the projections are based are reasonable; however, some
assumptions may not materialize and unanticipated events and circumstances may occur (see
"BONDHOLDERS' RISKS"). To the extent that the assumptions are not actually realized, the Agency's
ability to timely pay principal of and interest on the Bonds may be adversely affected.
Following is a discussion of assumptions used in the projection of Tax Revenues:
(a) For the purposes of the projections, it was assumed that the following assessed value would be
added to the secured tax rolls in the Town Centre Redevelopment Project as a result of anticipated
new construction:
Tax Roll Year
2007/08
2008/09
2009/10
Value
$21,000,000
54,000,000
103,200,000
See "THE PROJECT AREA - Description of the Project Area - The Town Centre Redevelopment
Project" herein.
(b) For the purposes of the projections, it was assumed that $15 million would be eliminated uom the
2008/09 secured tax roll and $11. 7 million would be eliminated uom the 2008/09 unsecured tax
roll of the Bayuont Amended Area as a result of the possible relocation of the RV park. See
"THE PROJECT AREA - Description of the Project Area - The Bayfront Redevelopment Project"
herein.
(c) For the purposes of the projections, the state assessed utility property value for Power Plant is
included in the projections in the following ''!!1IIounts, reflecting the anticipated closure of the
Power Plant:
Tax Roll Year
2006/07
2007/08
2008/09
Value
$25,946,000
12,973,000
o
See "THE PROJECT AREA - Description of the Project Area - The Bayuont Redevelopment
Project."
(d) After the adjustments described in (a) and (b) above, the secured roll was assumed to increase 2
percent annually for inflation in future years through 2015116, with the exception of the secured
roll in the Original B~uont Redevelopment Project, which is not projected to increase (see
"FINANCIAL INFORMATION - Tax Increment Revenues - Manner in Which Property Valuations
and Assessments are Determined (Article XIIIA)" herein).
(e) After the adjustments described in (b) above, the values of unsecured personal property and the
amount of unitary revenues have been maintained throughout the projections at their .2005/06
levels.
22
0< ~I D f
(f) A tax rate of $1.00 per $100 of assessed value applied to the taxable property in the component
areas of the Redevelopment Projects was used to determine Tax Increment Revenues (see
"FINANCIAL INFORMATION - Tax Increment Revenues - Property Tax Rate" herein).
(g) Projected Tax Increment Revenues do not reflect delinquencies (see "FINANCIAL INFORMATION
- Tax Increment Revenues" and "TIIE PROJECT AREA - Tax Collections" herein).
(h) Projected Tax Increment Revenues do not reflect any potential decreases resulting from pending
assessment appeals or potential Proposition 8 adjustments (see "TIIE PROJECT AREA _
Assessment Appeals" and "FINANCIAL INFORMATION - Tax Increment Revenues - Proposition
8 Adjustments" herein).
(i) Projected Tax Revenues include a deduction for administrative costs charged by San Diego
County (see "FINANCIAL INFORMATION - Tax Increment Revenues - Administrative Costs"
herein).
(j) Projected Tax Revenues include a deduction for payments due to taxing agencies under applicable
Tax Sharing Statutes, to the extent such payments are not subordinate to the Bonds (see
"FINANCIAL INFORMATION - Tax Increment Revenues," and "Tax Sharing Statutes" herein).
(k) Projected Tax Increment Revenues do not include supplemental property tax revenues which may
be received by the Agency.
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FINANCIAL INFORMATION
Agency Budgetary Process and Administration
The Redevelopment Law requires redevelopment agencies to adopt an annual budget containing tbe
following:
(1) The proposed expenditures oftbe agency.
(2) The proposed indebtedness to be incurred by the agency.
(3) The anticipated revenues oftbe agency.
(4) The work program for tbe coming year, including goals.
(5) An examination of tbe previous years' achievements and a comparison of the achievements with
tbe goals oftbe previous years' work program.
All expenditures and indebtedness of tbe Agency are required to be in conformity witb the adopted or
amended budget.
The Executive Director of tbe Agency is responsible for preparing tbe proposed budget and submitting it
to tbe Agency. After reviewing tbe proposed budget at a public meeting, tbe Agency holds a public
hearing. The Agency adopts the budget prior to tbe start of each fiscal year. The Director of Finance is
responsible for controlling expenditures witbin budgeted appropriations.
Agency Accounting Records and Financial Statements
Every redevelopment agency is required to present an annual report to its legislative body (being tbe city
council) witbin six montbs of tbe end of each fiscal year. The annual report is required, among other
things, to include an independent financial "audit report" and a fiscal statement for tbe previous fiscal
year. The California Health and Safety Code dermes "audit report" to mean an examination of and
opinion on the rmancial statements of tbe agency which presents tbe results of tbe operations and
rmancial position of tbe agency. The independent rmancial audit is required to be conducted in
accordance witb generally accepted auditing standards and tbe rules governing audit reports promulgated
by the Governmental Accounting Standards Board. The independent rmancial audit report is also
required to include an opinion of the agency's compliance with laws, regulations and administrative
requirements governing activities of tbe agency. The Redevelopment Law requires the fiscal statement to
contain tbe following information:
(I) The amount of outstanding indebtedness ofthe agency and each project area.
(2) The amount of tax increment revenues generated in the agency and in each project area.
(3) The amount of tax increment revenues paid to a taxing agency pursuant to a tax sharing
agreement, otber tban scf1o~1 or community college district.
(4) The rmancial transactions report required to be submitted to tbe State Controller.
(5) The amount allotted to school or community college districts pursuant to tbe Redevelopment
Law.
(6) The amount of existing indebtedness and tbe total amount of payments required to be paid on
existing indebtedness for tbat fiscal year.
25 dJ. - IG-rf
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(7) Any other fiscal infonnation which the agency believes is useful to describe its programs.
In addition, the annual report is required to include detailed infonnation regarding the Agency's housing
program to assist low and moderate income households and deposits and expenditures from the Low and
Moderate Income Housing Fund required pursuant to the Redevelopment Law.
The Indenture requires the Agency to keep, or cause to be kept, proper books and accounts separate from
all other records and accounts of the Agency and the City in which complete and correct entries are made
of all transactions relating to the Tax Revenues. The Indenture requires the Agency to file with the
Trustee annually, within 180 days after the close of each fiscal year, so long as any of the Bonds are
Outstanding, its audited [mancial statements showing the Tax Revenues and all disbursements from the
Special Fund as of the end of such fiscal year. The Agency covenants under the Indenture to furnish a
copy of such statements upon reasonable request to any Bondholder.
Basis of Accounting and Financial Statement Presentation. The government-wide [mancial statements
are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund [mancial statements are reported using the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to
be available when they are collectible within the current period or soon enough thereafter to pay liabilities
of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures are recorded only when payment is due.
GASB No. 34. The Governmental Accounting Standards Board (GASB) published its Statement No. 34
"Basic Financial Statements - and Management's Discussion and Analysis - for State and Local
Governments" on June 30, 1999. Statement No. 34 provides guidelines to auditors, comptrollers, and
[mancial officers on requirements for [mancial reporting for all governmental agencies in the United
States. Retroactive reporting is required four years after the effective date on the basic provisions for all
major general infrastructure assets that were acquired or significantly reconstructed, or that received
significant improvements, in fiscal years ending after rune 30, 1980.
The Agency was required to implement the provision of GASB 34 for the fiscal year ending June 30,
2003.
The Agency retained the finn of Lance, Caporicci & Larson, Certified Public Accountants, Costa Mesa,
California, to examine the component unit financial statements of the Agency as of and for the fiscal year
ended June 30, 2005, the most recent fiscal year for which audited financial statements have been
prepared, which are included as "APPENDIX c." The finn's examination was made in accordance with
auditing standards generally accepted in the United States of America, the standards applicable to
[mancial audits contained in Governmental Auditing Standards issued by the Comptroller General of the
United States and the Guidelinesfor Compliance Audits of California Redevelopment Agencies issued by
the State Controller and as interpreted in the Suggested A uditing Procedures for Accomplishing
Compliance Audits of Californl~ Redevelopment Agencies issued by the Governmental Accounting and
Auditing Committee of the California Society of Certified Public Accountants. The firm reported after
their examination that the Agency's [mancial statements present fairly its [mancial position and results of
operations in confonnity with generally accepted accounting principles and that they noted no instances
of non-compliance for the fiscal year ended June 30, 2005. The Agency's audited financial statements are
public documents and are included within this Official Statement without the prior approval of the
auditor. Accordingly, the auditor has not perfonned any post-audit of the [mancial condition of the
Agency.
26
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Tax Increment Revenues
Procedure for the Allocation and Payment of Tax Increment Revenues. The portion of taxes required
to be allocated to the Agency is allocated and paid to the Agency by the County Auditor pursuant to the
following procedure:
Not later than the first day of October of each year, the Agency is required to file with the County Auditor
a statement of indebtedness certified to by the chief fiscal officer of the Agency for each project area.
The statement of indebtedness is required to contain for each such project area:
(a) The date on which each loan, advance, or indebtedness was incurred or entered into;
(b) The principal amount, term, purpose, and interest rate, of each loan, advance or indebtedness; and
(c) The outstanding balance and amount due or to be paid by the Agency of each loan, advance or
indebtedness.
At the same time or times as the payment of taxes into the funds of the respective taxing agencies of the
County, the County Auditor-Controller is required to allocate and pay Tax Increment Revenues to the
Agency in an amount not to exceed the amount of loans, advances and indebtedness as shown on the
Agency's Statement of Indebtedness.
Manner in Which Property Valuations and Assessments are Determined (Article XIIIA). On June 6,
1978, California voters approved an amendment (commonly known as both Proposition 13 and the Jarvis-
Gann Initiative) to the State Constitution which imposes certain limitations on taxes that may be levied
against real property. This amendment, which added Article XlIIA to the State Constitution, among other
things, defmes full cash value of property to mean "the county assessor's valuation of real property as
shown on the 1975/76 tax bill under 'full cash value', or, thereafter, the appraised value of real property
when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment."
This full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per
year, or any reduction in the consumer price index or comparable local data, or any reduction in the event
of declining property value caused by substantial damage, destruction or other factors. The amendment
further limits the amount of any ad valorem tax on real property to one percent of the full cash value of
that property, except that additional taxes may be levied to pay debt service on indebtedness approved by
the voters prior to July 1, 1978 and on any bonded indebtedness for the acquisition or improvement of
real property which is approved after July 1, 1978 by two-thirds of the votes cast by voters voting on such
indebtedness. However, pursuant to an amendment' to the California Constitution, redevelopment
agencies are prohibited ITom receiving any of the tax increment revenue attributable to tax rates levied to
fmance bonds approved by the voters on or after January 1, 1989 (see "Property Tax Rate" below).
In the general election held November 4, 1986, voters of the State of California approved two measures,
Propositions 58 and 60, which further amend the terms "purchase" and "change of ownership," for
purposes of determining full cash value of property under Article XIIIA, to not include the purchase or
transfer of (1) real property between spouses and (2) the principal residence and the first $1,000,000 of
other property between parent~ abd children. Proposition 60 amends Article XIIlA to permit the
Legislature to allow persons over age 55 who sell their residence and buy or build another of equal or
lesser value within two years in the same county (or in certain cases, another county), to transfer the old
residence's assessed value to the new residence.
27
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For each fiscal year since Article XIllA has become effective (the 1978/79 fiscal year), the annual
increase for inflation has been at least two percent except in six fiscal years. For the 1981182 fiscal year,
the annual increase for inflation was I %; for the 1994/95 fiscal year, the annual increase for inflation was
1.0119%; for the 1995/96 fiscal year, the annual increase for inflation was 1.19%; for the 1996/97 fiscal
year, the annual increase for inflation was 1.11 %, for the 1998/99 fiscal year, the annual increase for
inflation was 1.853% and for the 2004/05 fiscal year, the annual increase for inflation was 1.867%
reflecting the actual increase in the State Consumer Price Index, as reported by the State Department of
Finance.
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real
property at the lesser of its originally determined (base year) full cash value compounded annually by the
inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to
damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based
on Proposition 8 do not establish new base year values, and the property may be reassessed as of the
following lien date up to the lower of the then-current fair market value or the factored base year value.
The State Board of Equalization has approved this reassessment formula and such formula has been used
by county assessors statewide. However, in 200 I an Orange County Superior Court held that such
reassessment formula violates the inflationary rate increase limitation of Article XIllA of the California
Constitution. The Court held that once the assessed value of a property is reduced pursuant to Proposition
8, any subsequent increase in assessed value may not exceed the inflationary rate limitation (not to exceed
2%) of Article XIlIA. On April 18, 2003, the Superior Court entered its final judgment. On June 12,
2003, the Orange County Assessor, together with the Tax Collector and the County of Orange filed notice
of appeal of the Superior Court Judgment. The Appellate Court held a hearing on the matter on January
7, 2004, and issued its opinion on March 26, 2004, reversing the holding of the Orange County Superior
Court. The Plaintiffs filed an appeal with the California State Supreme Court and on July 21, 2004, the
California State Supreme Court by a 5-2 vote decided not to hear an appeal, ending this litigation.
Unsecured and Secured Property. In California, property which is subject to ad valorem taxes is
classified as "secured" or "unsecured." The secured classification includes property on which any
property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does
not become a lien against the taxed unsecured property, but may become a lien on certain other property
owned by the taxpayer. Every tax which becomes a, lien on secured property, arising pursuant to State
law, has priority over all other liens on the secured property, regardless of the time of the creation of the
other liens.
Property in the Redevelopment Project is assessed by the San Diego County Assessor except for public
utility property which is assessed by the State Board of Equalization.
The valuation of secured property is determined as of January I each year for taxes owed with respect to
the succeeding fiscal year. The tax rate is equalized during the following September of each year, at
which time the tax rate is determined. Taxes are due in two equal installments. Installments of taxes
levied upon secured property become delinquent on the following December 10 and April I O. Taxes on
unsecured property are due January I and become delinquent August 31, and such taxes are levied at the
prior year's secured tax rate.
"
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Secured and unsecured property is entered on separate parts of the assessment roll maintained by the
county assessor. The method of collecting delinquent taxes is substantially different for the two
classifications of property. The taxing agency has four ways of collecting unsecured property taxes: (I) a
civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifYing certain
facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of
delinquency for record in the county recorder's office, in order to obtain a lien on certain property of the
taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or
assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes with respect
to property on the secured roll is the sale of the property securing the taxes for the amount oftaxes which
are delinquent.
Currently, a 10% penalty is added to delinquent taxes which have been levied with respect to property on
the secured roll. Property on the secured roll with respect to which taxes are delinquent is sold to the
State on or about June 30 ofthe fiscal year. Under State law, from time of the sale of the property to the
State for nonpayment of taxes, owners have five years to redeem, during which time legal title remains in
the owners as taxpayers subject to a lien in favor of the County. The amount necessary to redeem the
property is equal to the sum of the delinquent taxes, delinquency penalties and redemption penalties of
I \12% per month. Five years after the property is in default of taxes, the tax collector has the authority to
sell property which has not been redeemed.
A 10% penalty also attaches to delinquent taxes with respect to property on the unsecured roll, and
further, an additional penalty of I \12% per month accrues with respect to such taxes beginning the first day
of the third month following the delinquency date.
Supplemental Assessments. Legislation adopted in 1984 (Section 75, et seq. of the Revenue and
Taxation Code of the State of California) provides for the supplemental assessment and taxation of
property at its full cash value as of the date of a change of ownership or the date of completion of new
construction (the "Supplemental Assessments"). To determine the amount of the Supplemental
Assessment the County Auditor applies the current year's tax rate to the supplemental assessment roll and
computes the amount of taxes that would be due for the full year. The taxes due are then adjusted by a
proration factor to reflect the portion of the tax year remaining as determined by the date on which the
change in ownership occurred or the new construction was completed. Supplemental Assessments
become a lien against the real property on the date "f the change of ownership or completion of new
construction.
Unitary Property. Commencing in the 1988/89 fiscal year, the Revenue and Taxation Code of the State
of California changed the method of allocating property tax revenues derived from state assessed utility
properties. It provides for the distribution of state assessed values to tax rate areas by a county-wide
mathematical formula rather than assignment of state assessed value according to the location of those
values in individual tax rate areas.
Commencing with the 1988/89 fiscal year, each county has established one county-wide tax rate area.
The assessed value of all unitary property in the county has been assigned to this tax rate area and one tax
rate is levied against all such property ("Unitary Revenues").
The property tax revenue deriv6d itom the assessed value assigned to the county-wide tax rate area shall
be allocated as follows: (I) each jurisdiction will be allocated up to two percent of the increase in Unitary
Revenues on a pro rata basis county-wide; and (2) any decrease in Unitary Revenues or increases less
than two percent, or any increase in Unitary Revenues above two percent will be allocated among
jurisdictions in the same proportion of each jurisdiction's Unitary Revenues received in the prior year to
the total Unitary Revenues county-wide.
29
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Property Tax Rate. There are numerous tax rate areas within the Project Area. The differences between
the $1.00 tax rate and those actually levied (referred to as the "tax override rate") represents the tax levied
by overlapping entities to pay debt service on bonded indebtedness approved by the voters.
Tax override rates typically decline each year. A declining tax override rate is the result of several factors:
an effective limit, established by Article XIIlA of the California Constitution, on the amount of property
taxes that can be levied; rising taxable values within the jurisdictions of taxing entities levying the
approved override rate (which reduces the tax rate needed to be levied by the taxing entity to meet debt
service requirements); and the eventual retirement, over time, of the voter-approved debt.
For fiscal year 2004/05 the effective tax rate, including effective the tax override rate, for the majority of
the property in the Project Area was approximately $1.005 per $100 of taxable value. Future Tax
Increment Revenues have been projected in "TABLE NO.7 - PROJECTED TAX REVENUES AND DEBT
SERVICE COVERAGE" by applying only the general levy $1.00 per $100 of taxable value) to incremental
taxable values.
Administrative Costs. In 1990, the Legislature enacted SB 2557 (Chapter 466, Statutes of 1990) which
allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local
government jurisdictions on a prorated basis. For fiscal year 2004/05 the County charged administrative
fees totaling approximately $41,000 to the Project Area.
Tax Sharing Agreements
Pursuant to prior Section 33401(b) of the Redevelopment Law, a redevelopment agency could enter into
an agreement to pay tax increment revenues to any taxing agency that has territory located within a
redevelopment project to alleviate any financial burden or detriment caused by the redevelopment project.
These agreements are commonly referred to as "tax sharing agreements" or "pass through agreements."
The Agency has not entered into any tax sharing agreements with respect to the Redevelopment Project.
Tax Sharing Statutes
Certain provisions were added to the Redevelopment Law by the adoption of AB 1290 in 1994. A
discussion of these provisions as they relate to the Project Area follows. If new territory should be added
to the Project Area, under Section 33607.5 of the Redevelopment Law, any affected taxing entity will
share in the Tax Increment Revenues generated by such added area pursuant to a statutory formula
("Statutory Tax Sharing").
In addition, (i) pursuant to Section 33333.6(e)(2) of the Redevelopment Law, if the Agency deletes the
time limit to incur indebtedness in the Redevelopment Project (pursuant to SB 211 or through a plan
amendment) or (ii) pursuant to Section 33607.7 of the Redevelopment Law, as to any redevelopment plan
adopted prior to January I, 1994, if the Agency increases the total amount of Tax Increment Revenues to
be allocated to the project area or increases the duration of the Redevelopment Plan and the period for
receipt of Tax Increment Revenues, Statutory Tax Sharing will also be required under Section 33607.7 of
the Law with all affected taxing agencies not already a party to a tax sharing agreement, once the original
limitations have been reached. f general, the amounts to be paid pursuant to Statutory Tax Sharing are as
follows:
(a) commencing in the first fiscal year after the limitation has been reached, an amount equal to 25%
of tax increment revenues generated by the incremental increase of the current year assessed
valuation over the assessed valuation in the fiscal year that the limitation had been reached, after
the amount required to be deposited in the Low and Moderate Income Housing Fund has been
deducted;
30
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(b) in addition to amounts payable as described in (a) above, commencing in tbe 11th fiscal year after
tbe limitation has been reached, an amount equal to 21 % of tax increment revenues generated by
tbe incremental increase of tbe current year assessed valuation over the assessed valuation in tbe
preceding (lOth) fISCal year tbat tbe limitation had been reached, after the amount required to be
deposited in tbe Low and Moderate Income Housing Fund has been deducted; and
(c) in addition to amounts payable as described in (a) and (b) above, commencing in tbe 31~ fiscal
year after the limitation has been reached, an amount equal to 14% of tax increment revenues
generated by tbe incremental increase of the current year assessed valuation over the assessed
valuation in tbe preceding (30th) fiscal year tbat tbe limitation had been reached, after the amount
required to be deposited in tbe Low and Moderate Income Housing Fund has been deducted.
(d) The City may elect to receive a portion of tbe tax increment generated in (a) above, after tbe
amount required to be deposited in tbe Low and Moderate Income Housing Fund has been
deducted.
(e) The Agency may subordinate tbe amount required to be paid to an affected taxing entity to any
indebtedness after receiving the consent of the taxing entity.
Witb respect to a taxing entity tbat is a party to a tax sharing agreement, tax sharing payments would
continue pursuant to such tax sharing agreement after the original limitations in tbe Redevelopment Plan
were passed unless otberwise terminated pursuant to tbe terms of tbe tax sharing agreement.
Tax Increment Revenue generated in tbe BayfTont Amended Area has been subject to Statutory Tax
Sharing since tbe Agency first received revenue in 1998/99.
In 1998, tbe Agency also amended an existing time limit on incurring debt in botb tbe Original Bayftont
Redevelopment Project and tbe Town Centre Redevelopment Project. As a result, Statutory Tax Sharing
has been payable witb respect to tbe Tax Increment Revenue generated by such areas, using tbe 1999/00
tax roll as the first fiscal after tbe limitation had been reached, as discussed in (a) above. The additional
Statutory Tax Sharing calculation described in (b) above will begin in 2009/1 O.
~ ~
31
ol-If[)
BONDHOLDERS' RISKS
The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it
could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include,
but are not limited to, the following matters and should be considered, along with other i'!formation in
this Official Statement, by potential investors.
Factors Which May Affect Tax Revenues
The ability of the Agency to pay principal of and interest on the Bonds depends on the timely receipt of
Tax Revenues as projected herein (see "THE PROJECT AREA - Projected Tax Revenues and Debt Service
Coverage" herein). Projections of Tax Revenues are based on the underlying assumptions relating to Tax
Increment Revenues of each of the constituent redevelopment projects that comprise the Project Area. A
number of factors which may affect Tax Increment Revenues, and consequently, Tax Revenues, are
outlined below.
Reductions in Assessed Value. The projections of Tax Increment Revenues contained in this Official
Statement are based on current assessed valuations within the component areas of the Project Area, a tax
rate equal to $1.00 per $100 of assessed value applied to the taxable property in the component areas of
the Project Area and certain projected increases in property values due to inflation allowed under Article
XIIIA of the California Constitution. The Agency believes that the projections of Tax Increment
Revenues and the assumptions upon which the projections are based are reasonable. However, any future
decrease in the assessed valuation of the component areas of the Project Area (or any increase at a rate
less than assumed), any general decline in the economic stability of the area, a relocation out of a
component area of the Project Area by one or more major property owners, successful appeals by
property owners for a reduction in a property's assessed value, or other events that permit reassessment of
property at lower values, either on a case by case basis or as a blanket reduction due to a general decline
in property values and any property tax refunds which may result therefrom, the destruction of property
caused by natural disasters or any delinquencies in the payment of property taxes and any potential
acquisition of property by the Agency will reduce the Tax Increment Revenues allocated to, or received
by, the Agency and correspondingly may have an adverse impact on the Tax Revenues and ability of the
Agency to pay principal and interest on the Bonds.
Article XIIIA. Pursuant to the California voter initiative process, on June 6, 1978, California voters
approved Proposition 13 which added Article XIIIA to the California Constitution. This amendment
imposed certain limitations on taxes that may be levied against real property to I % of the full cash value
of the property, adjusted annually for inflation at a rate not exceeding 2% annually. Full cash value is
determined as of the 1975/76 assessment year, upon change in ownership (acquisition) or when newly
constructed (see "FINANCIAL INFORMATION - Tax Increment Revenues" herein for a more complete
discussion of Article X1IIA). Article X1IIA has subsequently been amended to permit reduction of the
"full cash value" base in the event of declining property values caused by substantial damage, destruction
or other factors, and to provide that there would be no increase in the "full cash value" base in the event
of reconstruction of property damaged or destroyed in a disaster and in other special circumstances.
Reduction in Inflationary Ra~. The annual inflationary adjustment, while limited to 2%, is determined
annually and may not exceed !'he percentage change in the California Consumer Price Index (CCPI).
Since Article XIIIA was approved, the annual adjustment for inflation has fallen below the 2% limitation
six times: for 1981182, 1%; for 1994/95,1.0119%, for 1995/96,1.19%; for 1996/97,1.11%, for 1998/99,
1.853% and for 2004/05, 1.01867%. The Financial Advisor has projected Tax Increment Revenues based
on inflationary increases in real property values.
32
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Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real
property at the lesser of its originally detennined (base year) full cash value compounded annually by the
inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to
damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based
on Proposition 8 do not establish new base year values, and the property may be reassessed as of the
following lien date up to the lower of the then-current fair market value or the factored base year value.
The State Board of Equalization has approved this reassessment fonnula and such fonnula has been used
by county assessors statewide. However, in 200 I an Orange County Superior Court held that such
reassessment fonnula violates the inflationary rate increase limitation of Article XIIIA of the California
Constitution. The Court held that once the assessed value of a property is reduced pursuant to Proposition
8, any subsequent increase in assessed value may not exceed the inflationary rate limitation (not to exceed
2%) of Article XIILA. On April 18, 2003, the Superior Court entered its [mal judgment. On June 12,
2003, the Orange County Assessor, together with the Tax Collector and the County of Orange filed notice
of appeal of the Superior Court Judgment. The Appellate Court held a hearing on the matter on January
7, 2004, and issued its opinion on March 26, 2004, reversing the holding of the Orange County Superior
Court. The Plaintiffs filed an appeal with the California State Supreme Court and on July 21, 2004, the
California State Supreme Court by a 5-2 vote decided not to hear an appeal, ending this litigation (see
"FINANCIAL INFORMATION - Tax Increment Revenues - Proposition 8 Adjustments" herein).
The Agency's ability to generate sufficient Tax Revenues to pay debt service on the Bonds will be
dependent on the economic strength of the component areas of the Project Area. Since Proposition 8
adjustments are closely tied to the economics of an area, and primarily, real estate development, factors
which adversely affect real estate development may adversely affect Tax Revenues. Such factors include
general economic conditions, fluctuations in the real estate market, fluctuations in interest rates,
unexpected increases in development costs and other factors. If further Proposition 8 adjustments are
made by the County Assessor in future years because of declines in the fair market value of properties
caused by the lack of real estate development in the area generally, Tax Revenues may be adversely
affected and as a possible consequence its ability to repay the Bonds may be adversely affected.
Assessment Appeals. Assessment appeals may be filed by property owners seeking a reduction in the
assessed value of their property. After the property owner files an appeal, the County's Appeals Board
will hear the appeal and make a detennination as to whether or not there should be a reduction in assessed
value for a particular property and the amount of the reduction, if any. To the extent that any reductions
are made to the assessed valuation of such properties with appeals currently pending, or appeals
subsequently filed, Tax Increment Revenues, and correspondingly, Tax Revenues will be reduced. Such
reductions may have an adverse affect on the Agency's ability to pay debt service on the Bonds. As of
December 2005, appeals have been filed by 3 property qwners within the Project Area for the 2005/06 tax
year (see "TIlE PROJECT AREA - Assessment Appeals" herein).
Earthquake, Fire and Other Risks. Natural and man-made disasters and hazards, including, without
limitation, earthquakes, fires, floods, mudslides and other calamities, may have the effect of reducing Tax
Increment Revenues through reduction of aggregate assessed valuations within the boundaries of the
Project Area. According to the Public Safety Element of the City's General Plan, the City is located in a
seismically active region and could be impacted by a major earthquake originating from the numerous
faults in the area. The City is tra~ersed by two potentially active faults, the Sweetwater Fault and La
Nacion Fault and three inferreh faults, the Otay River Fault, the Telegraph Canyon Fault and the San
Diego Bay- Tijuana Fault. Seismic hazards encompass potential surface rupture, ground shaking,
liquefaction and landslides. The City recently adopted its Natural Hazards Mitigation Plan. This plan
includes a hazard analysis for earthquake, flood, landslide and fire risk and is required to comply with
FEMA requirements for disaster relief funding.
33
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Hazardous Substances. An additional environmental condition that may result in the reduction in the
assessed value of parcels would be the discovery of a hazardous substance that would limit the beneficial
use of a property within the component areas of the Project Area. In general, the owners and operators of
a property may be required by law to remedy conditions of the property relating to releases or threatened
releases of hazardous substances. The owner (or operator) may be required 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 property within component
areas of the Project Area be affected by a hazardous substance would be to reduce the marketability and
value of the property, perhaps by an amount in excess of the costs of remedying the condition.
Certain Bankruptcy Risks. The enforceability of the rights and remedies of the Owners and the
obligations of the Agency may become subject to the following: the federal bankruptcy code and
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the
enforcement of creditors' rights generally, now or hereafter in effect; usual equitable principles which
may limit the specific enforcement under state law of certain remedies; the exercise by the United States
of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary
exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of
California and its governmental bodies in the interest of servicing a significant and legitimate public
purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if
initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or
otherwise and consequently may entail risks of delay, limitation, or modification of their rights.
Limited Obligations. The Agency has no power to levy and collect property taxes, and any property tax
limitation, legislative measure, voter initiative or provision of additional sources of income to taxing
agencies having the effect of reducing the property tax rate must necessarily reduce the amount of Tax
Increment Revenues, and consequently, Tax Revenues that would otherwise be available to pay the
principal of, interest on the Bonds,
Voter Initiatives - State Constitutional Amendment. California's voter initiative process allows
measures which qualitY for the ballot to be approved or disapproved by voters in a State of California
statewide election. Future voter initiatives could be enacted which adversely affect the Tax Increment
Revenues and, therefore, the security for the Bonds.
State of California Fiscal Issues
In connection with its approval of the budget for the 1992/93, 1993/94 and 1994/95 Fiscal Years, the State
Legislature enacted legislation which, among other. things, reallocated funds from redevelopment
agencies to school districts by shifting a portion of each agency's tax increment, net of amounts due to
other taxing agencies, to school districts for such fiscal years for deposit in the Education Revenue
Augmentation Fund ("ERAF"). Faced with a projected $23.6 billion budget gap for Fiscal Year 2002/03,
the State Legislature adopted and the Governor signed, AB 1768 requiring redevelopment agencies to pay
into ERAF in Fiscal Year 2002/03 an aggregate amount of $75 million. AB 1768 required the payment
into ERAF in Fiscal Year 2002/03 only.
In 2003, the State Legislature '4lopted SB 1045 which required redevelopment agencies to make ERAF
transfers in Fiscal Year 2003/0f, based on a statewide aggregate transfer by redevelopment agencies of
$135 million. SB 1045 required the Agency to transfer approximately $489,000 to ERAF in Fiscal Year
2003/04 and to make this transfer payment by May 10, 2004. In enacting SB 1045, the State Legislature
also amended Section 33333.6 of the Redevelopment Law. Section 33333.2(c) and Section 33333.6(e)
now provide that the City Council may adopt an ordinance to extend the limits required by AB 1290 or
AB 1342, as applicable, by one additional year. The City Council has adopted an ordinance under the
provisions of SB 1045.
34
~-113
The 2004/05 State Budget included a $1.3 billion shift of local government property taxes to the ERAF.
The 2004/05 State Budget apportioned the $1.3 billion among cities ($350 million), counties ($350
million), special districts ($350 million) and redevelopment agencies ($250 million) and limited the $1.3
billion ERAF transfer to the two fiscal years 2004/05 and 2005/06. The Agency's share of this additional
shift of property taxes was $743,000 in 2004/05 and $900,000 in 2005/06. The Agency funded its ERAF
payments in these two years by borrowing ITom the California Statewide Communities Development
Authority (CSCDA). The Joans ITom CSCDA are payable over 10 years. As a trailer bill to the 2004/05
State Budget, the State Legislature adopted SB 1096, allowing redevelopment agencies to extend certain
plan limitations one year for each ERAF payment in 2004/05 and 2005/06 if certain criteria are met. The
City Council has not yet adopted an ordinance under the provisions of SB 1096.
Future legislation could be enacted and Tax Revenues available for payment of the Bonds may be
impaired.
Legislation Affecting Redevelopment Agencies
AB 1290. The California Legislature enacted Assembly Bill 1290 effective January I, 1994, as amended
by Senate Bill 732, effective January I, 1995 (as amended, "AB 1290,") which contained several
significant changes in the Redevelopment Law. Certain of the changes affected the times for incurrence
and repayment of loans, advances and indebtedness of redevelopment agencies. Further, the Legislature
enacted Assembly Bill 1342 effective January I, 1999 ("AB 1342,") which contains provisions that
allowed the Agency to extend certain provisions of the Redevelopment Plans, such as the time limit on
the collection of Tax Increment Revenues. The limitations currently contained in the Redevelopment
Plans of the component areas of the Redevelopment Projects conform to the requirements of AB 1290.
See "TIffi AGENCY - Plan Limitations" for a further discussion of AB 1290 and AB 1342.
SB 211. The California Legislature also enacted SB 211, Chapter 741, Statutes 2001, effective January I,
2002 ("SB 211 "). SB 211 provides, among other things, that, at anytime after its effective date, the
limitation on incurring indebtedness contained in a redevelopment plan adopted prior to January I, 1994,
may be deleted by ordinance of the legislative body. However, such deletion triggers statutory tax sharing
with those taxing entities that do not have tax sharing agreements or if not already due to any other plan
amendment. Tax sharing will be calculated based on the increase in assessed valuation after the year in
which the limitation would otherwise have become effective. See "TIffi AGENCY - Plan Limitations"
describing the elimination of the limitations on the Agency's incurring of indebtedness.
SB 211 also authorizes the amendment of a redevelopment plan adopted prior to January I, 1994 to
extend for not more than 10 years the effectiveness of the redevelopment plan and the time to receive tax
increment revenues and to pay indebtedness. Any such extension must meet certain specified
requirements, including the requirement that the redevelopment agency establish the existence of both
physical and economic blight within a specified geographical area of the redevelopment project and that
any additional tax increment revenues received by the redevelopment agency because of the extension be
used solely within the designated blighted area. SB 211 authorizes any affected taxing entity, the
Department of Finance, or the Department of Housing and Community Development to request the
Attorney General to participate in the proceedings to effect such extensions. It also authorizes the
Attorney General to bring a civi\ a'\tion to challenge the validity of the proposed extensions.
SB 211 also prescribes additional requirements that a redevelopment agency would have to meet upon
extending the time limit on the effectiveness of a redevelopment plan, including requiring an increased
percentage of new and substantially rehabilitated dwelling units to be available at affordable housing cost
to persons and families of low or moderate income prior to the termination of the effectiveness of the
plan. The Agency currently has no expectations of undertaking proceedings to extend the effectiveness of
the redevelopment plan or to extend the time to receive tax increment revenues and to pay indebtedness.
35
dJ. -II-V-
SB 1045. In enacting SB 1045 (see "State of California Fiscal Issues" above), the State Legislature
amended Section 33333.2 and Section 33333.6 of the Redevelopment Law. As amended, Section
33333.2(c) and Section 33333.6(e) provided that the City Council may adopt an ordinance to extend the
limits required by AB 1290 by one additional year for redeveJopment plans adopted prior to 1994. The
City Council has adopted an ordinance pursuant to the authorization contained in SB 1045 to extend the
limits required by AB 1290 by one additional year with respect to all constituent redevelopment projects
except the Bayfront Amended Area, to which SB 1045 is not applicable.
SB 1096. SB 1096 further amended Section 33333.6(e) to provide that the City Council may adopt an
ordinance to extend the limits required by AB 1290 by an additional year for redevelopment plans
adopted prior to 1994 for each year that a payment is made to ERAF by a redevelopment agency.
However, SB 1096 includes criteria that must be met for redevelopment plans that have a remaining plan
life between 10 and 20 years. The City Council has not yet adopted such an amendment to the
redevelopment Plans pursuant to the authorization contained in SB 1096 to extend the limits required by
AB 1290 by one additional year, for each of the ERAF payments made in 2004/05 and 2005/06. As noted
above, this extension does not apply to the Bayfront Amended Area.
Proposed Eminent Domain Legislation. On June 23, 2005, the U.S. Supreme Court decided in Kelo v.
City o/New London, 126 S. Ct. 24 (2005) that the compensated taking of private property for the purpose
of economic development satisfies the "public use" requirement of the Fifth Amendment of the U.S.
Constitution. While many governmental agencies have previously used the power of eminent domain for
the purpose of assembling property for economic development, the U.S. Supreme Court had never prior to
Kelo considered whether the practice was constitutional under the Fifth Amendment. As a reaction to
Kelo, a number of bills have been introduced in the U.S. Congress and State Legislature which propose to
restrict the use of eminent domain by public agencies to varying degrees. In addition, a number of voter
initiatives which also propose to restrict the use of eminent domain have been filed with the State
Attorney General to prepare for petition for signatures to qualify for the ballot. The Agency is not able to
predict whether any of such bills or initiatives, or other bills or initiatives restricting the use of eminent
domain will be passed, or if passed, whether there would be a significant effect upon the ability of the
Agency to exercise its power of eminent domain. Although the Agency has previously utilized eminent
domain proceedings for certain redevelopment projects for economic development and blight removal and
may consider utilizing eminent domain proceedings iJ1 future projects, the Agency does not anticipate any
of the bills or initiatives, even if passed, will have a material adverse effect on the Agency's
redevelopment activities within the Project Area.
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. Occasionally, because of general market
conditions 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.
Loss of Tax Exemption \
As discussed under the caption "LEGAL MATTERS - 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 Agency in violation of its covenants
contained in the Indenture. Should such an event of taxability occur, the Bonds are not subject to special
redemption or any increase in interest rate and may remain outstanding until maturity.
36
c2-11 S;
LEGAL MATTERS
Enforceability of Remedies
The remedies available to the Trustee and the Owners of the Bonds upon an event of default under the
Indenture or any other document described herein are in many respects dependent upon regulatory and
judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions,
the remedies provided for under such documents may not be readily available or may be limited. The
various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the
extent that the enforceability of certain legal rights related to the Indenture is subject to limitations
imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors
generally and by equitable remedies and proceedings generally.
Approval of Legal Proceedings
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Bond
Counsel, will render an opinion which states that the Indenture is a valid and binding obligation of the
Agency and enforceable in accordance with its terms. Tbe legal opinion of Bond Counsel will be subject
to the effect of bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights and
to the exercise of judicial discretion in accordance with general principles of equity. See "APPENDIX E"
for the proposed form of Bond Counsel's opinion.
The Agency has no knowledge of any fact or other information which would indicate that the Indenture is
not so enforceable against the Agency, except to the extent such enforcement is limited by principles of
equity and by state and federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights
generally.
Certain legal matters will be passed on for the Agency by the City Attorney, acting as Agency General
Counsel and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California, as Disclosure Counsel. Fees payable to Bond Counsel and Disclosure Counsel are contingent
upon the sale and delivery of the Bonds.
Tax Matters
, '
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest on
the Bonds is excluded ITom gross income for federal" income tax purposes and is not an item of tax
preference for purposes of calculating the federal alternative minimum tax imposed on individuals and
corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt trom State of
California personal income tax. Bond Counsel notes that, with respect to corporations, interest on the
Bonds will be included as an adjustment in the calculation of alternative minimum taxable income, which
may affect the alternative minimum taxable liability of such corporations.
Bond Counsel's opinion as to the exclusion ITom gross income for federal income tax purposes of interest
on the Bonds is based upon cenait! representations of fact and certifications made by the Agency, the
Underwriter and others and is subject to the condition that the Agency complies with all requirements of
the Internal Revenue Code of 1986, as amended (the "Code"), 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 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 Agency has covenanted to comply with all such requirements.
37
OJ-lIto
Bond Counsel's opinion may be affected by actions 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. The Indenture, the First
Supplement and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be
omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses
no opinion as to the exclusion from gross income for federal income tax purposes of interest due on the
Bonds, if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca
Carlson & Rauth, a Professional Corporation.
The Internal Revenue Service (the "IRS") has initiated an expanded program for the auditing of tax-
exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be
selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a
result of such an audit of the Bonds (or by audit ofsirnilar securities).
Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross
income for federal income tax purposes provided that the Agency 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 certain persons. Bond Counsel expresses no opinion regarding any such tax consequences.
Accordingly, before purchasing the Bonds, all potential purchasers should consult their tax advisors with
respect to collateral tax consequences with respect to the Bonds.
The form of Bond Counsel's opinion is set forth in "APPENDIX E" hereto.
Absence of Litigation
The Agency will furnish a certificate dated as of the Delivery Date that there is not now known to be
pending or threatened any litigation restraining or enjoining the execution or delivery of the Indenture or
the sale or delivery of the Bonds or in any manner questioning the proceedings and authority under which
the Indenture was executed and delivered or the Bonds are to be issued or affecting the validity thereof.
,
,
\
38
<:::)-117
CONCLUDING INFORMATION
Ratings on the Bonds
Standard & Poor's and Moody's have assigned their ratings of "AAA" and "Aaa," respectively, to the
Bonds with the understanding that a Municipal Bond Insurance Policy insuring payment when due of the
principal of and interest on the Bonds will be issued on the closing date by
In addition, Standard & Poor's has assigned their underlying municipal bond rating of "_"
notwithstanding the delivery of the Municipal Bond Insurance Policy. Such ratings reflect only the views
of the rating agency and any desired explanation of the significance of such rating should be obtained
from the rating agency. Generally, a rating agency bases its rating on the insurance and the information
and materials furnished to it and on investigations, studies and assumptions of its own. There is no
assurance such rating will continue for any given period of time or that such rating will not be revised
downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency,
circumstances so warrant. Any such downward revision or withdrawal of such rating may have an
adverse effect on the market price of the Bonds.
The Financial Advisor
The material contained in this Official Statement was prepared by the Agency with the assistance of the
Financial Advisor, who advised the Agency as to the fmancial structure and certain other fmancial matters
relating to the Bonds. The information set forth herein received from sources other than the Agency has
been obtained by the Agency from sources which are believed to be reliable, but such information is not
guaranteed by the Agency or the Financial Advisor as to accuracy or completeness, nor has it been
independently verified. Fees paid to the Financial Advisor are contingent upon the sale and delivery of
the Bonds.
Continuing Disclosure
The Agency will covenant to provide annually certain financial information and operating data relating to
the Project Area by not later than March 31 each year commencing March 31, 2007, to provide the
audited Financial Statements of the Agency for the. fiscal year ending June 30, 2006 and for each
subsequent fiscal year when they are available (together, the "Annual Report"), and to provide notices of
the occurrence of certain other enumerated events. The Annual Report will be filed by the Trustee on
behalf of the Agency with each Nationally Recognized Municipal Securities Information Repository
certified by the Securities and Exchange Commission (the "Repositories") and a State repository, if any.
The notices of material events will be timely filed' by the Agency with the Municipal Securities
Rulemaking Board, the Repositories and a State repository, if any. The specific nature of the information
to be contained in the Annual Report or the notices of material events and certain other terms of the
continuing discJosure obligation are summarized in "APPENDIX D . FORM OF CONTINUING
DISCLOSURE CERTIFICATE."
The Agency has never failed to comply, in all material respects, with its undertaking, to provide
continuing disclosure under the Federal Securities laws. However, the City had delivered to U.S. Bank
National Association in FebruaJly !O04 its continuing discJosure filings for fiscal year ending June 30,
2003 required under Rule 15c2. I 2 in connection with its Certificates of Participation, Series A of 2000
(2000 Financing Project), its 2002 Certificates of Participation (Police Facility Project), and its 2003
Refunding Certificates of Participation (Town Centre II Parking Project) with the intention that U.S. Bank
National Association would disseminate the City's continuing discJosure filings for fiscal year ending
June 30, 2003 on or before March I, 2004. On May 19, 2004, U.S. Bank National Association had
disseminated all of the City's continuing disclosure filings for fiscal year ending June 30, 2003, and the
City has been current on all filings required pursuant to its previous continuing discJosure undertakings
since that time.
39
02-II~
.~
Underwriting
E. J. De La Rosa & Co., Inc., (the "Underwriter") is offering the Bonds at the prices set forth on the inside
cover page hereof. The initial offering prices may he changed from time to time and concessions from the
offering prices may he allowed to dealers, banks and others. The Underwriter has purchased the Bonds at
a price equal to $ , which amount represents the principal amount of the Bonds
($ ), less a net original issue discount of $ , and less an Underwriter's
discount of $ L%). The Underwriter will pay certain of its expenses relating to the
offering.
Verifications of Mathematical Computations
Grant Thornton LLP will verify from the information provided to them the mathematical accuracy as of
the date of the closing on the Bonds of (1) the computations contained in the provided schedules to
determine that the anticipated receipts from the securities and cash deposits listed in the schedules
prepared by the Financial Advisor, to be held in escrow, will be sufficient to pay, when due, the principal,
redemption premium and interest requirements of the 1994 Bonds, and (2) the computations of yield on
both the securities and the Bonds contained in the provided schedules used by Bond Counsel in its
determination that the interest with respect to the Bonds is exempt from federal taxation. Grant Thornton
LLP will express no opinion on the assumptions provided to them, nor as to the exemption from taxation
of the interest with respect to the Bonds.
Additional Information
The summaries and references contained herein with respect to the Indenture, the Bonds, statutes and
other documents, do not purport to be comprehensive or defmitive and are qualified by reference to each
such document or statute and references to the Bonds are qualified in their entirety by reference to the
form hereof included in the Indenture. Copies of the Indenture are available for inspection during the
period of initial offering on the Bonds at the offices of the Financial Advisor. Copies of this document
may be obtained after delivery of the Bonds from the Agency at 276 Fourth Avenue, Chula Vista,
California 9191 O.
'-
References
All 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. .This Official Statement is not to be construed as a
contract or agreement between the Agency and the purchasers or Owners of any of the Bonds.
Execution
The execution and delivery of this Official Statement by the Treasurer has been duly authorized by the
Redevelopment Agency of the City of Chula Vista.
II
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
By:
Treasurer
40
~-/l9
APPENDIX A
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
, '
, ,
A-I
..;2 - /2.D
APPENDIX B
CITY OF CHULA VISTA INFORMATION STATEMENT
General Information
Chula Vista 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 know 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. With a January 2006 estimated population of 223,423, Chula Vista is the second
largest city in the County.
General Organization
The City ofChula Vista was incorporated as a general law city on March 17, 1911, and operates under the
counciVmanager form of government. It became a charter city in 1949. The City is governed by a five-
member council consisting of four members and a Mayor, each elected at large for four-year alternating
terms. The positions of City Manager and City Attorney are filled by appointments of the Council. The
City of Chula Vista currently employs approximately 1,547 staff members including sworn officers and
fire personnel.
Governmental Services
Public Safety and Welfare
The City of Chula Vista Police Department consists of 340 sworn officers and non-sworn personnel
providing patrol, traffic, animal control and investigations. There are eight fire stations located in and
operated by the City, staffed by 141 fire personnel.
Community Services
Services provided by the City include building permit and inspection, planning and zoning, landscape and
public intTastructure maintenance, street cleaning, traffic signal maintenance and municipal code
compliance.
Public Services
Water is supplied to Chula Vista by the Otay Water District and the Sweetwater Water District. Sewer
service is provided by the City. Electric power and natural gas are provided by San Diego Gas and
Electric.
Parks and Recreation
The Chula Vista Public Librmv. is comprised of three individual libraries with over 432,000 volumes
available and connected by a mde-area network. The Library delivers books in English and Spanish,
videos and CDs, and community programming to the City's residents nearly every day of the year. The
Library contains an Office of Cultural Arts dedicated to advancing the arts and culture in a manner
designed to preserve the diverse cultures of the area.
In addition, Chula Vista provides a variety of cultural and educational facilities such as the Chula Vista
Heritage Museum, Onstage Playhouse, and the San Diego Junior Theater.
B-1
~-IJ...'.
The Chula Vista Recreation Department provides citizens with a variety of park and recreational services
on a year round basis. Facilities include nine community and recreation centers, including a youth
community center and a senior center. The City also has two community pools open year round, 46
community and neighborhood parks, and a Memorial Bowl with seating for 700 at which the City's
Summer Concert Series is hosted. The City also has after-school programs throughout the community.
The City will open three new parks and community centers this year.
Community Facilities and Services
Public educational instruction for kindergarten through high school is provided by the Chula Vista
Elementary School District and Sweetwater Union High School District. These districts administer 42
elementary schools, one junior high school, ten middle schools, II senior high schools, one continuation
high school, one alternative program school and one charter school. Southwestern College, a two year
Community College, has enrollment of approximately 19,000. There are also four adult education
schools and 16 private schools. There are seven universities or colleges within 30 minutes commuting
distance :!Tom Chula Vista in the San Diego metropolitan area. The City is currently planning a four-year
college campus, to be located on a 400 acre property adjoining the Olympic Training Center.
There are two acute-care hospitals, two psychiatric hospitals and three convalescent hospitals, and more
than 400 medical doctors and allied professionals in Chula Vista.
There are two daily, one weekly and one semi-weekly newspapers published and circulated in Chula
Vista.
Chula Vista has more than 60 churches and nearly 100 service, :!Taternal and civic organizations.
The City's mediterranean climate lends itself to many outdoor recreational activities. Chula Vista is home
to the 20,000 seat Coors Amphitheatre, the Chula Vista Nature Center, Knotts Soak City USA, four golf
courses, numerous parks and open spaces, and a harbor which includes two marinas, an RV park, and
several restaurants.
In addition, Chula Vista is the location of the United States Olympic Training Center. This is the third
such training center in the nation and the only year round training facility. The center is located on a 150-
acre property donated by EastLake Development Company adjacent to the Otay Lake reservoir.
Transportation
U.S. Highways 5 (along the coast) and 805 (inland) provide full freeway access from Chula Vista north to
San Diego and south to the Mexican border. Commuter rail service is provided by the San Diego Trolley,
a light rail system started in 1981 and II bus routes serve Chula Vista.
The City has recently introduced Chula Vista Express, a three-part pilot commuting program to promote
public transportation, carpooling, vanpooling, biking and walking to work as alternatives to driving alone.
If offers free bus service :!Tom eastern Chula Vista to downtown San Diego, a :!Tee shuttle from eastern
Chula Vista to the H Street Trolley Station to a cash incentive for riding or joining a vanpool or carpool.
I I
San Diego's Lindbergh International Airport is IS minutes to the north of Chula Vista, providing air cargo
and passenger flights is served by all major airlines. Cargo shipping is available at the Unified Port of
San Diego, which serves as a transshipment facility for the region, which includes San Diego, Orange,
Riverside, San Bernardino and Imperial counties, plus northern Baja California, Arizona and points east.
B-2
02-12.2-
Population
The following table provides a comparison of population growth for Chu]a Vista, surrounding cities and
San Diego County between 2002 and 2006.
TABLE NO. B-1
CHANGE IN POPULATION
CHULA VISTA, SURROUNDING CITIES AND SAN DIEGO COUNTY
2002 - 2006
CHULA VISTA SURROUNDING CITIES SAN DIEGO COUNTY
Percentage Percentage Percentage
Year Population Change Population Change Population Change
2002 ]91,132 180,747 2,92],390
2003 200,472 4.9% 183,456 1.5% 2,972,932 1.8%
2004 208,407 4.0% 183,708 0.]% 3,011,244 1.3%
2005 2]6,694 4.0% 187,802 2.2% 3,039,277 0.9%
2006 223,423 3.]% ] 86,652 (0.6)% 3,066,820 0.9%
% Increase Between
2002 - 2006 16.9% 3.3% 5.0%
Surrounding cities include EI Cajon, Coronado and National City.
Source: State of California, Department of Finance, "E-4 Population Estimates for Cities, Counties and the State,
2001-2006, with 2000 Benchmark."
Effective Buying Income
~
The most recently available effective buying income information for the City of Chu]a Vista, San Diego
County, the State of California and the United States is summarized in the following table.
TABLE NO. B-2
EFFECTIVE BUYING INCOME
CITY OF CHULA VISTA, SAN DIEGO COUNTY, CALIFORNIA AND UNITED STATES
2000 - 2004
Year Chula Vista San Diego County State of California United States
2000 $42,55~ $44,292 $44,464 $39,129
2001 42,22 44,146 43,532 38,365
2002 40,578 42,315 42,484 38,035
2003 42,389 43,346 42,924 38,201
2004 45,]45 44,506 43,915 39,324
Source: Sales and Marketing Management, "Survey of Buying Power."
B-3
0<.. -/2...3
Employment and Industry
The City is located in the San Diego-Carlsbad-San Marcos MSA labor market. Six major job categories
constitute 76.6% of the work force. They are government (16.7%), professional and business services
(16.3%), service producing (14.5%), leisure and hospitality (11.6%), educational and health services
(9.6%) and manufacturing (7.9%). The March 2006 unemployment rate in the San Diego-Carlsbad-San
Marcos area was 3.9%. The State of California March 2006 unemployment rate (unadjusted) was 5.0%.
TABLE NO. B-3
SAN DIEGO-CARLSBAD-SAN MARCOS MSA
WAGE AND SALARY WORKERS BY INDUSTRY (1)
(in Thousands)
Ind ustry 2002 2003 2004 2005 2006
Government 223.7 222.2 216.7 217.6 218.3
Other Services 44.5 46.0 47.1 48.7 48.8
Leisure and Hospitality 127.0 136.8 141.3 144.9 151.3
Educational and Health Services 120.3 121.2 123.0 122.5 125.8
Professional and Business Services 201.7 201.8 203.5 208.8 212.7
Financial Activities 73.4 78.6 81.4 82.3 83.7
Infonnation 38.2 37.3 36.2 37.3 37.1
Transportation, Warehousing and Utilities 30.5 26.6 28.1 28.5 28.5
Service Producing
Retail Trade 134.9 137.0 141.1 144.4 145.2
Wholesale Trade 40.9 41.4 41.4 42.7 45.0
Manufacturing
Nondurable Goods 28.0 26.6 26.4 25.0 25.3
Durable Goods 87.1 ' , 79.8 77.4 79.7 78.5
Goods Producing
Construction 73.9 76.2 84.8 88.5 93.7
Natural Resources and Mining --.Qd --.Qd ----.M ----.M ----.M
Total Nonfann 1,224.4 1,231.8 1,248.8 1,271.3 1,294.3
Fann ---1.Qd ----1Q.2 -----1!..,2 ----1Q1 --1.M
Total (all industries) ~ ~ ~ ~ ~
(I) Annually, as of March.
Source: State of California Employment Development Department, Labor Market Infonnation Division, "Indu.<try
Employment & Labor FO'ie ,by month March 2005 Benchmark. "
B-4
02",/~Y
The major employers operating within the City and their respective number of employees as of June 30,
2005 are as follows:
Name ofComnanv
Rohr DBA Goodrich Aerospace
Sharp Chula Vista Medical Center
Scripps Memorial Hospital
United Parcel Service
Emnlovment
1,903
1,410
890
637
400
340
285
284
275
250
Walmart 2291
Sears Roebuck & Co.
Costco Wholesale Corp. #781
ATC Vancom Inc.
Costco Wholesale Corp. #460
Walmart Store #3516
Source: City ofChula Vista.
Commercial Activity
Tvne of Business /Product
Aerospace Manufacturing
Hospital
Hospital
Parcel Delivery Service
General Merchandise
General Merchandise
General Merchandise
General Merchandise
General Merchandise
General Merchandise
The following table summarizes the most recently available published information of volume of retail
sales and taxable transactions for the City of Chula Vista for 2000 through 2004 (the most recent year for
which statistics are available). The City's reported sales tax has increased 20% since 2003. This increase
is primarily due to continued growth in the eastern section of the City, which led to the opening of
significant new commercial developments.
TABLE NO. B-4
CITY OF CIru;LA VISTA
TOTAL TAXABLE TRANSACTIONS
(in Thousands)
2000 - 2004
Total Taxahle
Retail Sales Retail Sales Transactions Issued Sales
Year ($000' s) % Change Permits ($OOO's) % Change Permits
2000 $1,401,401 1,780 $1,608,290 3,609
2001 1,463,409 4.4% 1,823 1,688,665 5.0% 3,690
2002 1,513,809 \,.4% 1,883 1,729,158 2.4% 3,737
2003 1,642,889 8.5% 2,092 1,857,233 7.4% 3,921
2004 1,845,573 12.3% 2,199 2,073,340 11.6% 4,166
Source: State Board of Equalization, "Taxable Sales in California. "
B-5
~ - / i.S:
The following table compares taxable transactions for the City of Chula Vista and surrounding cities for
the years 2000 through 2004 (the most recent year for which statistics are available).
TABLE NO. B-5
CHANGE IN TOTAL TAXABLE TRANSACTIONS
CHULA VISTA AND SURROUNDING CITIES
(in Thousands)
2000 - 2004
% Change from
City 2000 2001 2002 2003 2004 2000 - 2004
CHULA VISTA $1,608,290 $1,688,865 $1,729,158 $1,857,233 $2,073,340 28.9%
EI Cajon 1,597,168 1,725,001 1,817,568 1,939,482 2,103,099 31.7%
Coronado 172,631 168,147 175,648 179,418 188,172 9.0%
National City 1,179,111 1,231,562 1,301,407 1,389,D42 1,551,301 31.6%
Source: State Board of Equalization, "Taxable Sales in California. "
Taxable transactions by type of business for the City of Chula Vista for 2000 through 2004 (the most
recent year for which statistics are available) are summarized in Table No. B-6.
TABLE NO. B-6
CITY OF CHULA VISTA
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in Thousands)
2000 - 2004
2000 2001 2002 2003 2004
Retail Stores
Apparel Stores $ 66,598 $ 61,937 $ 67,035 $ 67,114 $ 82,165
General Merchaodise Stores 495,679 524,942 525,423 553,979 609,028
Food Stores 90,487 92,224 99,897 103,155 106,056
Eating/Drinking Places 155,583 164,4i7 169,892 188,675 213,412
Home Furnishings aod
Appliaoces 66,365 67,827 74,255 78,561 87,203
Building Materials aod
Farm Implements 102,370 97,897 91,235 100,504 142,321
Auto Dealers/Suppliers 145,923 151,812 156,872 178,733 191,185
Service Stations I J21,244 119,050 123,636 148,318 174,968
Other Retail Stores 157.152 183.303 205.564 223.850 239.235
Total Retail Stores 1,401,401 1,463,409 1,513,809 1,642,889 1,845,573
All Other Outlets 206.889 225.256 215.349 214.344 227.767
Total All Outlets $1 60R 290 $1 6RR 66~ $1 7291~R $1 R~7 233 $2 073 340
Source: State Board of Equalization, "Taxable Sales in California. "
B-6
02-/~"
Building Activity
The following table summarizes building activity valuations for the City ofChula Vista for the years 2001
through 2005.
TABLE NO. B-7
CITY OF CHULA VISTA
BillLDING ACTIVITY AND VALUATION
(in Thonsands)
2001 - 2005
2001 2002 2003 2004 2005
Residential $482,131,012 $467,349,014 $569,435,026 $703,847,604 $440,321,520
N on-Residential 91.667.827 81.298.075 92.855.876 123.793.323 111.908.460
Total Valuation $573 798 839 $548647.089 $662 290 902 $827 640 927 $552 229 980
Total Permits ~ ~ ~ ~ ~
Source: City of Chula Vista
,
,
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B-7
02-101.7
APPENDIX C
AGENCY AUDITED FINANCIAL STATEMENTS FOR THE
FISCAL YEAR ENDING JUNE 30, 2005
, ,
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
[to be provided by Disclosure Counsel]
,
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02-/:1-?
APPENDIX E
FORM OF BOND COUNSEL OPINION
[to be provided by Bond Counsel]
, '
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APPENDIX F
SPECIMEN MUNICIPAL BOND INSURANCE POLICY
,
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APPENDIX G
BOOK-ENTRY-ONLY SYSTEM
The Depasitary Trust Campany ("DTC"), New Yark, NY, will act as securities depasitary far the Bands.
The Bands will be issued as fully-registered securities registered in the name af Cede & Ca. (DTC's
partnership naminee) ar such ather name as may be requested by an autharized representative af DTC.
One fully-registered certificate will be issued far each maturity af the Bands, each in the aggregate
principal amaunt af such maturity, and will be depasited with DTC.
DTC is a limited-purpase trust campany arganized under the New Yark Banking Law, a "banking
arganizatian" within the meaning af the New Yark Banking Law, a member af the Federal Reserve
System, a "clearing carparatian" within the meaning afthe New Yark Unifarm Cammercial Cade, and a
"clearing agency" registered pursuant to. the pravisians af Sectian 17 A af the Securities Exchange Act af
1934. DTC halds and provides asset servicing far aver 2.2 millian issues afU.S. and nan-U.S. equity
issues, carparate and municipal debt issues, and maney market instruments fram aver 100 cauntries that
DTC's participants ("Direct Participants") depasit with DTC: DTC also. facilitates the past-trade
settlement amang Direct Participants af sales and ather securities transactians in depasited securities,
thraugh electranic camputerized baak-entry transfers and pledges between Direct Participants' accaunts.
This eliminates the need far physical mavement af securities certificates. Direct Participants include bath
U.S. and nan-U.S. securities brakers and dealers, banks, trust campanies, clearing carparatians, and
certain ather arganizatians. DTC is a whally-awned subsidiary af The Depasitary Trust & Clearing
Carparatian ("DTCC"). DTCC, in turn, is awned by a number af Direct Participants af DTC and
Members af the Natianal Securities Clearing Carparatian, Fixed Incame Clearing Carparatian and
Emerging Markets Clearing Carparatian (NSCC, FICC, and EMCC, also. subsidiaries af DTCC), as well
as by the New Yark Stack Exchange, Inc., the American Stack Exchange LLC, and the Natianal
Assaciatian af Securities Dealers, Inc. Access to. the DTC system is also. available to. athers such as bath
U.S. and nan-U.S. securities brokers and dealers, banks, trust campanies, and clearing carparatians that
clear thraugh ar maintain a custadial relatianship with a Direct Participant, either directly ar indirectly
("Indirect Participants"). DTC has Standard & Paar's highest rating: AAA. The DTC Rules applicable to.
its Participants are an file with the Securities and Exchange Cammissian. Mare infarmatian abaut DTC
can be faund at www.dtcc.cam and www.dtc.arg.
Purchases af Bands under the DTC system must be made by ar thraugh Direct Participants, which will
receive a credit far the Bands an DTC's recards. The awnership interest af each actual purchaser af each
Band ("Beneficial Owner") is in turn to. be recarded an the Direct and Indirect Participants' recards.
Beneficial Owners will nat receive written canfirmatian fro.m DTC af their purchase. Beneficial Owners
are, hawever, expected to. receive written canfirmatian's praviding details af the transactian, as well as
periadic statements aftheir haldings, fram the Direct ar Indirect Participant through which the Beneficial
Owner entered into. the transactian. Transfers af awnership interests in the Bands are to. be accamplished
by entries made an the baaks af Direct and Indirect Participants acting an behalf af Beneficial Owners.
Beneficial Owners will nat receive certificates representing their awnership interests in Bands, except in
the event that use af the baak-entry system far the Bands is discantinued.
To. facilitate subsequent transfers, all Bands depasited by Direct Participants with DTC are registered in
the name af DTC's partnershiJfnahtinee, Cede & Ca., ar such ather name as may be requested by an
autharized representative af DTC. The depasit af Bands with DTC and their registratian in the name af
Cede & Ca. ar such ather DTC naminee do. nat effect any change in beneficial awnership. DTC has no.
knawledge af the actual Beneficial Owners af the Bands; DTC's recards reflect anly the identity af the
Direct Participants to. whase accaunts such Bands are credited, which may ar may nat be the Beneficial
Owners. The Direct and Indirect Participants will remain respansible far keeping accaunt af their
haldings an behalf af their custamers.
G-l
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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.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being
redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in
such issue 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 Procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to the Agency 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).
Principal, premium (if any), and interest 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
Agency or the Trustee, 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
registered in "street name," and will be the responsibility of such Participant and not ofDTC, the Agency,
or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time.
Principal, premium (if any), and interest payments with respect to the Bonds to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of the Agency
or the Trustee, 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.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to the Agency or the Trustee. Under such circumstances, in the event that a successor
depository is not obtained, Bond certificates are required to be printed and delivered.
The Agency may decide to discontinue use of the system of book-en try-only transfers through DTC (or a
successor securities depository). In that event, Bond certificates will be printed and delivered in
accordance with the provisions of the Indenture.
,
,
The information in this section concerning DTC and DTC's book-entry system has been obtained from
sources that the Agency believes to be reliable, but the Agency takes no responsibility for the accuracy
thereof.
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ATTACHMENT C
DRAFT AS OF JUNE 12,2006
NEW ISSUE - BOOK-ENTRY-ONLY
NO RATING
(See '''CONCLUDING INFORMATION - No Rating on the Bonds" herein)
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel,
subject, under existing law, statutes, regulations, rulings and judicial decisions, and assuming the accuracy of 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 calculating the federal
alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, the interest on the
Bonds is exempt from State of California personal income taxes. See "LEGAL MATTERS - Tax Matters" herein.
SAN DIEGO COUNTY
STATE OF CALIFORNIA
$12,500,000*
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
BAYFRONTITOWN CENTRE REDEVELOPMENT PROJECT
2006 SUBORDINATE TAX ALLOCATION REFUNDING BONDS, SERIES B
Dated: Date of Delivery
Due: September 1 as Shown on the Inside Front Cover
The cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors
must read the entire Official Statement to obtain information essential to the making of an informed investment decision.
See "BONDHOLDERS' RISKS" herein for a discussion of special risk factors that should be considered in evaluating the
investment quality ofthe Bonds.
Proceeds from the sale of the Redevelopment Agency of the City of Chula Vista (the "Agency"), Bay1TontfTown Centre
Redevelopment Project, 2006 Subordinate Tax Allocation Refunding Bonds, Series B (the "Bonds") wilJ be used to (i) refinance
existing obligations of the Agency, (ii) satisfy the reserve requirement for the Bonds and (Hi) provide for the costs of issuing the
Bonds.
The Bonds will he issued under an Indenture of Trust, dated as of July 1,2006, by and between the Agency and U.S. Bank National
Association, as Trustee (the "Trustee'"). The Bonds are speciai obligations of the Agency and are payable solely from and secured
by a pledge of certain tax increment revenues of the Agency's BayfrontfTown Centre Project Area (the "Project Area'") on a basis
subordinate to the Agency's BayfrontfTown Centre Redevelopment Project 2006 Senior Tax Allocation Refunding Bonds, Series A,
as described below and a pledge of amounts in certain funds and accounts established under the Indenture, as further discussed
herein.
Interest on the Bonds is payable on March I, 2007, and semiannually thereafter on September 1 and March I of each year until
maturity or earlier sinking account payment or optional redemption (see "THE BONDS - General Provisions" and "THE BONDS _
Redemption'" herein).
The Bonds are being offered when, as and if issued, subject to the approval as to their legality by Stradling Yocca Carlson & Rauth,
a Professional Corporation, Newport Beach, California, Bond Counsel. Certain legal matters wil1 be passed on for the Agency by
SIradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel and by the City
Attorney and for the Underwriter tt' its counsel, Best, Best & Krieger LLP, Riverside, California. It is anticipated that the Bonds
will be available for delivery throu~ the facilities of The Depository Trust Company on or about August 3, 2006 (see "APPENDIX
G - BOOK-ENTRY-ONLY SYSTEM" herein).
The date of the Official Statement is
.2006.
E. J. DE LA ROSA & CO., INe.
. Preliminary, subject 10 change.
.;;;. - I .a t/
$12,500,000*
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
BAYFRONTrrOWN CENTRE REDEVELOPMENT PROJECT
2006 SUBORDINATE TAX ALLOCATION REFUNDING BONDS, SERIES B
MATURITY SCHEDULE
(Base CUSIP@t )
Serial Bonds
Maturity Date
Seotember 1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Principal
Amouot
Interest
Rate
Reoffering
Yield
CUSIP@t
$
% Term Bond maturing September 1, 2027, Yield _ % CUSIPt _
I I
. Preliminary, subject to change.
t CUS!P@ A registered trademark of the American Bankers Association. Copyright I!:i 1999-2006 Standard &
Poor's, a Division of The McGraw-Hill Companies, Inc. CUS!P@ data herein is provided by Standard & Poor's
CUS!P@ Service Bureau. This data in not intended to create a database and does not serve in any way as a
substitute for the CUS!P@ Service Bureau. CUS!P@ numbers are provided for convenience of reference only.
Neither the Agency, the Financial Advisor nor the Underwriter takes any responsibility for the accuracy of such
numbers.
d.";'13~
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement This Official Statement is submitted in connection with the offer and sale of
the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other
purpose. This Official Statement is not to be construed as a contract with the purchasers of the Bonds.
Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the
Agency in any press release and in any oral statement made with the approval of an authorized officer of
the Agency or any other entity described or referenced herein, the words or phrases "will likely result,"
"are expected to," '''will continue," "is anticipated," "estimate," "project," "forecast," "expect," "intend"
and similar expressions identifY "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that
could cause actual results to differ materially ITom those contemplated in such forward-looking
statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop
the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there
are likely to be differences between forecasts and actual results, and those differences may be material.
Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the Agency to
give any information or to make any representations in connection with the offer or sale of the Bonds
other than those contained herein and if given or made, such other ioformation or representation must not
be relied upon as having been authorized by the Agency, the Financial Advisor 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.
Involvement of Underwriter. The Underwriter has submitted 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.
Information Subject to Change. The information !'l1d expressions of opinions herein are subject to
change without notice and neither 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 Agency
or any other entity described or referenced herein since the date hereof. All summaries of the documents
referred to in this Official Statement are made subject to the provisions of such documents, respectively,
and do not purport to be complete statements of any or a,ll of such provisions.
Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect
transactions which stabilize or maintain the market price of the 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 Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public
offering prices set forth on the inside ITont cover page hereof and said public offering prices may be
changed ITom time to time by the Underwriter.
THE BONDS HAVE NOT B~EN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
c:; - ( 3-'-
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
CHULA VISTA, CALIFORNIA
CITY COUNCIL AND AGENCY GOVERNING BOARD
Stephen C. Padilla, Mayor
John McCann, Mayor Pro Tem
Steve Castaneda, Councilmember
Patricia E. Chavez, Councilmember
Jerry Rindone, Councilmember
CITY AND AGENCY STAFF
Jim Thomson, Interim City Manager
Laurie A. Madigan, Assistant City Manager, Special Projects
David Palmer, Assistant City Manager, Community Services
Dana Smith, Assistant City Manager, Development Services/Director of Community Development
Maria Kachadoorian, Director of Finance/Treasurer
Ann Moore, City Attorney
Susan Bigelow, City Clerk
PROFESSIONAL SERVICES
Bond Counsel aud Disclosure Counsel
Stradling Yocca Carlson & Rauth
a Professional Corporation
Newport Beach, California
Financial Advisor
Harrell & Company-Advisors, LLC
Orange, California
Underwriter
E. J. De La Rosa & Co., Inc.
Los Angeles, California
Trustee and Escrow Bank
U.S. Bank National Association
Los Angeles, California
Verifications
Grant Thornton LLP
~ ~ Minneapolis, Minnesota
~_137
TABLE OF CONTENTS
INTRODUCTION ......................................................1
The Agency ................................................................1
The City .....................................................................1
Security and Sources of Repayment ..........................1
Purpose... ... .... ............. .......... .......... ...........................2
Tax Exemption...........................................................2
Professional Services.... ............... ... .............. .............3
Offering of the Bonds ................................................3
Infonnation Concerning this Official Statement........3
THE BONDS...............................................................5
General Provisions..... ................... .............................5
Redemption................................................................6
Scheduled Debt Service on the Bonds .......................7
THE FINANCING PLAN ..........................................8
The Refunding Program.............................................8
Estimated Sources and Use of Funds......................... 9
SOURCES OF PAYMENT FOR THE BONDS .....10
Tax Allocation Financing......................................... 10
Tax Revenues. ............. ......... ..... .......................... ..... I 0
Pledge of Tax Revenues........................................... II
Reserve Account ...................................................... II
Issuance of Additional Deb!..................................... II
THE AGENCY..........................................................13
Government Organization........................................13
Agency Powers ........................................................13
The Chula Vista Redevelopment Corporation .........14
Redevelopment Plans............................................... 14
Plan Limitations.......................................................15
Low and Moderate Income Housing........................ 15
THE PROJECT AREA............................................ 16
Description of the Project Area................................ 16
Assessed Valuations .................................................18
Major Taxpayers ......................................................20
Assessment Appeals........... .................................. ....21
Tax Collections ........................................................21
Outstanding Indebtedness of the Project Area ....... ..22
Projected Tax Revenues and Debt Service
Coverage .......... ....... ........................................... ...23
FINANCIAL INFORMATION ...............................26
Agency Budgetary Process and Administration.......26
\
Agency Accounting Records and Financial
Statements............................. .............. ........... ....... 26
Tax Increment Revenues .........................................28
Tax Sharing Agreements.......................................... 31
Tax Sharing Statutes ................................................31
BONDHOLDERS'RISKS.......................................33
Factors Which May Affect Tax Revenues ...............33
Subordinate Lien ofBonds......................................35
State of California Fiscal Issues ..............................35
Legislation Affecting Redevelopment Agencies...... 36
Secondary Market..................... ........................ .......37
Loss of Tax Exemption............................................38
LEGAL MATTERS.................................................. 39
Enforceability of Remedies .....................................39
Approval of Legal Proceedings...............................39
Tax Matters........... ......................... ............. .............39
Absence of Litigation ..............................................40
CONCLUDING INFORMATION .......................... 41
No Rating on the Bonds ..........................................41
The Financial Advisor .............................................41
Continuing Disclosure ........... ........................ ..........41
Underwriting .... ........ ..................... .......................... 42
Verifications of Mathematical Computations ..........42
Additional Infonnation.................. .............. ............42
References ... ....... ......................... ............... .............42
Execution.............. ........... .................................. ...... 42
APPENDIX A - SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE
APPENDIX B - CITY OF CHULA VISTA
INFORMATION STATEMENT
,
APPENDIX C -AGENCY AUDITED FINANCIAL
STATEMENTS FOR THE FISCAL YEAR
ENDING JUNE 30, 2005
AfPENDIX D - FORM OF CONTlNUlNG
DISCLOSURE CERTIFICATE
APPENDIX E - FORM OF BOND COUNSEL
OPINION
APPENDIX F - SPECIMEN MUNICIPAL BOND
INSURANCE POLICY
APPENDIX G - BOOK-ENTRY-ONLY SYSTEM
0< -I.a~
OFFICIAL STATEMENT
$12,500,000*
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
BAYFRONTffOWN CENTRE REDEVELOPMENT PROJECT
2006 SUBORDINATE TAX ALLOCATION REFUNDING BONDS, SERIES B
This Official Statement which includes the cover page and appendices (the "Official Statement") is
provided to furnish certain information concerning the sale of the Redevelopment Agency of the City of
Chula Vista Bayfront/Town Centre Redevelopment Project 2006 Subordinate Tax Allocation Refunding
Bonds, Series B (the "Bonds"), in the aggregate principal amount of$12,500,000*.
INTRODUCTION
This Introduction contains only a brief description of this issue and does not purport to be complete. The
Introduction is subject in all respects to more complete information in the entire Official Statement and
the offering of the Bonds to potential investors is made only by means of the entire Official Statement and
the documents summarized herein. Potential investors must read the entire Official Statement to obtain
information essential to the making of an informed investment decision..
The Agency
The Redevelopment Agency of the City of Chula Vista (the "Agency") is a public body, corporate and
politic, existing under and by virtue of the Community Redevelopment Law of the State, constituting Part
I of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State (the
"Redevelopment Law"). The Agency was activated by the City Council of the City of Chula Vista in
1972. The City Council, at the same time, declared itself to be the members of the Agency and appointed
the City Manager to be the Agency's Executive Director (see "THE AGENCY" herein).
The City
, ,
The City of Chula Vista (the "City") is located along the San Diego Bay in Southern California, 8 miles
south of San Diego and 7 miles north of the Mexico border in an area generally known as "South Bay."
The City encompasses approximately 50 square miles. Based on population, Chula Vista is the second
largest city in San Diego County (see "APPENDIX' B" - CITY OF CHULA VISTA INFORMATION
STATEMENT" herein).
Security and Sources of Repayment
The Bonds. The Bonds are issued and secured under an Indenture of Trust, dated as of July 1,2006, (the
"Indenture"), by and between the Agency and U.S. Bank National Association, as trustee (the "Trustee")
(see "APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE" herein).
~ ~
* Preliminary, subject to change.
I
~ - /-.3 'I
The Agency has pledged to the repayment of the Bonds, and has secured by a lien on, an of the Tax
Revenues, as defined herein on a basis subordinate to the pledge of and lien on Tax Revenues of the
Agency's Bayfront/Town Centre Redevelopment Project 2006 Senior Tax Allocation Refunding Bonds,
Series A (the "Senior Bonds") being issued concurrently wit the Bonds. Tax Revenues means all of the
Tax Increment Revenues allocated to the Agency's Bayfront/Town Centre Project Area excluding (i)
amounts required to be deposited in the Agency's low and moderate income housing fund pursuant to
Section 33334.3 of the Redevelopment Law, (ii) amounts payable to the Agency by the State pursuant to
Section 16112.7 of the California Government Code, and (iii) amounts required to be paid pursuant to the
Tax Sharing Statutes, as defmed herein to the extent not subordinated to the payment of debt service on
the Bonds. Tax Increment Revenues consist of tax increment revenues receivable by the Agency with
respect to the Project Area pursuant to Article 6 of Chapter 6 of the Redevelopment Law. See "THE
AGENCY - Low and Moderate Income Housing," "THE PROJECT AREA - Outstanding Indebtedness of
the Project Area," "FINANCIAL INFORMATION - Tax Increment Revenues" and "BONDHOLDERS'
RISKS" herein.
The Project Area. The Bayfront/Town Centre Project Area (the "Project Area") was created through an
amendment of the Redevelopment Plans for the Agency's Bayfront Redevelopment Project and Town
Centre Redevelopment Project on July 5, 1979. The Bayfront Redevelopment Project component of the
Project Area (the "Bayfront Redevelopment Project") was originally created in 1974 and is comprised of
637 acres between the City's north and south boundaries, bounded by Interstate 5 to the east and the San
Diego Bay to the west. The Agency amended the Bayfront Project Area in 1998 to add 398 acres to the
Project Area (the "Bayfront Amended Area"). The Town Centre Redevelopment Project component of
the Project Area (the "Town Centre Redevelopment Project") was created in 1976 and comprises
approximately 138 acres in the City's central business district. See "THE PROJECT AREA" herein
The Bonds are special obligations of the Agency. The Bonds do not constitute a debt or liability of
the City of Chula Vista, the County of San Diego, the State of California or of any political
subdivision thereof, other than the Agency. The Agency shall only be obligated to pay the principal
of the Bonds, or the interest thereon, from the funds described herein, and neither the faith and
credit nor the taxing power of the City of Chnla Vista, the County of San Diego, the State' of
California or any of its political subdivisions is pledged to the payment of the principal of or the
interest on the Bonds. The Agency has no taxing po~er.
,
Purpose
The Bonds are being issued to (i) refinance certain obligations of the Agency, (ii) satisfY the Reserve
Requirement for the Bonds and (iii) provide for the costs of issuing the Bonds. See "THE FINANCING
PLAN" herein.
Tax Exemption
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California ("Bond Counsel"), under existing statutes, regulations, rulings and judicial decisions, and
assuming certain representations and compliance with certain covenants and requirements described
herein, the interest (and original\issue discount) on the Bonds is excluded from gross income for federal
income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative
minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, the
interest (and original issue discount) on the Bonds is exempt from State of California personal income
tax. See "LEGAL MATTERS - Tax Exemption" herein. '
2
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Professional Services
The legal proceedings relating to the issuance of the Bonds are subject to the approving opinion of
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel.
Certain legal matters will be passed on for the Agency by Ann Moore, City Attorney and by Stradling
Yocca Carlson & Rauth, a Professional Corporation, as Disclosure Counsel.
U.S. Bank National Association, serves as Trustee under the Indenture. The Trustee will act on behalf of
the Bondholders for the purpose of receiving all moneys required to be paid to the Trustee, to allocate, use
and apply the same, to hold, receive and disburse the Tax Revenues and other funds held under the
Indenture, and otherwise to hold all the offices and perform all the functions and duties provided in the
Indenture to be held and performed by the Trustee.
Harrell & Company Advisors, LLC (the "Financial Advisor") advised the Agency as to the fmancial
structure and certain other financial matters relating to the Bonds.
The Agency's audited general purposefmancial statements for the fiscal year ended June 30, 2005,
attached hereto as "APPENDIX C" have been audited by Caporicci & Larson, Certified Public
Accountants, Costa Mesa, California. The Agency's audited financial statements are public documents
and are included within this Official Statement without the prior approval of the auditor. Accordingly, the
auditor has not performed any post-audit of the financial condition of the Agency.
Offering of the Bonds
Authority for Issuance. The Bonds are to be issued and secured pursuant to the Indenture, as authorized
by Resolution No. of the Agency adopted on . 2006 and the Redevelopment Law.
Offering and Delivery of the Bonds. The Bonds are offered, when, as and if issued, subject to the
approval as to their legality by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport
Beach, California, as Bond Counsel. It is anticipated that the Bonds, in book-entry form, will be available
for delivery through the facilities of The Depository Trust Company on or about August 3, 2006. See
"APPENDIX G - BOOK-ENTRY-ONLY SYSTEM."
Information Concerning this Official Statement
This Official Statement speaks only as of its date. The information set forth herein has been obtained by
the Agency with the assistance of the Financial Advisor from sources other than the Agency which are
believed to be reliable and such information is believed to be accurate and complete, but such information
is not guaranteed as to accuracy or completeness, nor has it been independently verified and is not to be
construed as a representation by the Financial Advisor or the Disclosure Counsel. Statements contained
in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not
expressly so described herein, are intended as such and are not to be construed as representations of fact.
Preliminary Official Statement Deemed Final. The information set forth herein is in a form deemed
fmal, as of its date, by the Age~y Cor the purpose of Rule l5c2-12 under the Securities Exchange Act of
1934, as amended (except for the omission of certain information permitted to be omitted under the Rule).
The information herein is subject to revision, amendment and completion in a Final Official Statement.
The information and expressions of opinion herein are subject to change without notice and the delivery
of this Official Statement shall not, under any circumstances, create any implication that there has been no
change in the information or opinions set forth herein or in the affairs of the Agency since the date hereof.
3
02-I'ff
Availability of Legal Documents. The summaries and references contained herein with respect to the
Indenture, the Bonds and other statutes or documents do not purport to be comprehensive or definitive
and are qualified by reference to each such document or statute, and references to the Bonds are qualified
in their entirety by reference to the form thereof included in the Indenture. Copies of the documents
described herein are available for inspection during the period of initial offering of the Bonds at the
offices of the Financial Advisor. Copies of these documents may be obtained after delivery of the Bonds
at the trust office of the Trustee, U.S. Bank National Association, 633 West Fifth Street, 24th Floor, Los
Angeles, California, 90017 or from the Agency at 276 Fourth Avenue, Chula Vista, California 91910.
,
\
4
02. - I c/- ^-
THE BONDS
General Provisions
Repayment of the Bonds. Interest on the Bonds is payable at the rates per annum set forth on the inside
tront cover page hereof. Interest on the Bonds will be computed on the basis of a year consisting of 360
days and twelve 30-day months.
Interest on the Bonds shall be payable commencing March 1, 2007 and each September I and March I
(each an "Interest Payment Date,") next preceding the date of authentication thereof unless (i) a Bond is
authenticated on or before an Interest Payment Date and after the close of business on the preceding
Record Date, in which event it shall bear interest tram such Interest Payment Date, (ii) a Bond is
authenticated on or before the first Record Date, in which event interest thereon shall be payable tram the
Closing Date, or (iii) interest on any Bond is in default as of the date of authentication thereof, in which
event interest thereon shall be payable tram the date to which interest has been paid in full, or made
available for payment. Interest shall be paid on each Interest Payment Date to the persons in whose
names the ownership of the Bonds is registered on the Registration Books at the close of business on the
immediately preceding Record Date, except as provided below. Interest on any Bond which is not
punctually paid or duly provided for on any Interest Payment Date shall be payable to the person in whose
name the ownership of such Bond is registered on the Registration Books at the close of business on a
special record date for the payment of such defaulted interest to be fixed by the Trustee, notice of which
shall be given to such Owner not less than ten (10) days prior to such special record date.
Transfer or Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred or
exchanged, pursuant to the provisions of the Indenture, upon surrender of such Bond for cancellation at
the principal corporate trust office or agency of the Trustee. Whenever any Bond or Bonds shall be
surrendered for transfer or exchange, the Trustee shall authenticate and deliver a new Bond or Bonds for a
like aggregate principal amount and of like maturity. The Trustee may require the Bondholder requesting
such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer
or exchange. Transfer or exchange of any Bond shall not be permitted by the Trustee during the period
established by the Trustee for selection of Bonds for redemption or if such Bond has been selected for
redemption.
, '
Book-Entry Only System. 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. Interest on and principal of the Bonds will be payable when due by
wire of the Trustee to DTC which will in turn remit such interest and principal to DTC Participants (as
defined herein), which will in turn remit such interest and principal to Beneficial Owners (as defined
herein) of the Bonds (see "APPENDIX G - BOOK-EN1RY-ONLY SYSTEM" herein). As long as DTC is the
registered owner of the Bonds and DTC's book-entry method is used for the Bonds, the Trustee will send
any notices to bondholders only to DTC.
Discontinuance of Book-Entry System. DTC may discontinue providing its services as securities
depository with respect to the Bon,\s at any time by giving reasonable notice to the Agency or the Trustee.
Under such circumstances, in th'e event that a successor securities depository is not obtained, Bonds are
required to be printed and delivered as described in the First Supplement. The Agency may decide to
discontinue use of the system of book-entry transfers through DTC (or a successor securities depository).
In that event, the Bonds will be printed and delivered as described in the First Supplement. In addition,
the following provisions shall apply: interest on the Bonds will be paid on each Interest Payment Date by
check of the Trustee maiJed on such Interest Payment Date by first class maiL to the person appearing on
the registration books of the Trustee as the Owner thereof as of the close of business on the preceding
Record Date, at such Owner's address as it appears on the registration books of the Trustee; provided
however, that at the written request of the Owner of Bonds in an aggregate principal amount of at least
5
d2 -I '-13
$1,000,000, which request is on file with the Trustee as of any Record Date, interest with respect to such
Bonds shall be paid on each succeeding Interest Payment Date by wire transfer in immediately available
funds to such account within the United States of America as shall be specified in such request. The
principal and prepayment price represented by any Bond at maturity or upon prepayment will be payable
upon presentation and surrender of such Bond at the Office of the Trustee, or at such place as may be
designated by the Trustee.
Redemption
Optional Redemption. The Bonds maturing on or before September 1,2016, shall not be subject to
optional redemption prior to their respective maturities. The Bonds maturing on or after September 1,
2017 shall be subject to redemption in whole, or in part among such maturities as shall be determined by
the Agency, and in any case by lot within a maturity, at the option of the Agency, on any date on or after
September 1,2016, at the option of the Agency from any available source of funds, at a redemption price
equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date of
redemption, without premium.
Notice of Redemption. The Trustee on behalf and at the expense of the Agency shall mail (by first class
mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their
respective addresses appearing on the Registration Books, at least thirty (30) but not more than sixty (60)
days prior to the date fixed for redemption; provided, however, that neither failure to receive any such
notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of
such Bonds or the cessation ofthe accrual of interest thereon.
Additionally, on the date on which the notice of redemption is mailed to the Owners of the Bonds
pursuant to the provisions above, such notice of redemption shall be given by (i) first class mail, postage
prepaid, (ii) confirmed facsimile transmission, or (iii) overnight delivery service to the Agency, to each of
the Securities Depositories and to one or more of the Information Services as shall be designated in
writing by the Agency to the Trustee.
Rescission. The Agency shall have the right to rescind any optional redemption by written notice to the
Trustee on or prior to the dated fixed for redemption. Any notice of optional redemption shall be
cancelled and annulled if for any reason funds wil1 not or are not available on the date fixed for
redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall
not constitute an Event of Default under the Indenture. The Agency and the Trustee shall have no liability
to the Owners or any other party related to or arising from such rescission of redemption. The Trustee
shall mail notice of such rescission of redemption in the .same manner as the original notice of redemption
was sent.
Effect of Redemption. From and after the date fixed for redemption, if notice of redemption shall have
been duly mailed and funds avaiJable for the payment of the principal of and interest on the Bonds so
called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled to any
benefit under the Indenture other than the right to receive payment of the redemption price, and no
interest shall accrue thereon from and after the redemption date specified in such notice.
Partial Redemption. In the ~ent only a portion of any Bond is called for redemption, then upon
surrender of such Bond the Agency shall execute and the Trustee shall authenticate and deliver to the
Owner thereof, at the expense of the Agency, a new Bond or Bonds of the same series and maturity, of
authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to
be redeemed.
6
t2-/4':/
Scheduled Debt Service on the Bonds
The folJowing is the scheduled annual Debt Service on the Bonds.
Bond Year Ending
Sentember I
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Total
Princioal
I I
Interest
7
02 -j 45:
Annual Debt Service
THE FINANCING PLAN
The Refunding Program
The Agency has previously issued its $14,810,000 Bayfront/Town Centre Redevelopment Project 1994
Senior Tax Allocation Refunding Bonds, Series A (the "I 994A Bonds") and $5,680,000 Bayfrontffown
Centre Redevelopment Project 1994 Senior Tax Allocation Refunding Bonds, Series D (the "1994D
Bonds") pursuant to an Indenture of Trust dated as of November I, 1994 by and between the Agency and
U.S. Bank National Association, successor-in-interest to First Interstate Bank of California (the "1994
Senior Bonds Indenture"). In addition, the Agency has previously issued its $8,195,000 Bayfrontffown
Centre Redevelopment Project 1994 Subordinate Tax Allocation Refunding Bonds, Series C (the "1994C
Bonds") pursuant to an Indenture of Trust dated as of November I, 1994 by and between the Agency and
U.S. Bank National Association, successor-in-interest to First Interstate Bank of California (the "1994
Subordinate Bonds Indenture," and together with the 1994 Senior Bonds Indenture, the "1994
Indentures"). As of the Delivery Date, $12,590,000 aggregate principal amount of 1 994A Bonds remains
outstanding, $4,945,000 aggregate principal amount of 1 994D Bonds remains outstanding and $6,855,000
aggregate principal amount of 1994C Bonds remains outstanding.
Concurrent with the delivery of the Bonds, the Agency will issue the Senior Bonds in the principal
amount of $13,500,000"
On the Delivery Date, a portion of the proceeds of the Bonds and the Senior Bonds, together with certain
other funds, will be deposited in trust with, as escrow holder (the "Escrow Bank") pursuant to the
Indenture and an Escrow Agreement dated as of July I, 2006, between the Agency and the Escrow Bank
(the "Escrow Agreement").
The deposit will be in an amount sufficient to pay principal and interest on the 1994A Bonds and the
1994D Bonds through and including September 1,2006, to pay the redemption price of the I 994A Bonds
and 1994D Bonds remaining outstanding on September I, 2006, to pay principal and interest on the
1994C Bonds through and including November 1,2006 and to pay the redemption price of the 1994C
Bonds remaining outstanding on November I, 2006. As a result of the deposits, the lien of the 1994A
Bonds, the 1994D Bonds and 1994C Bonds created bX the 1994 Indentures, including, without limitation,
the pledge of the Tax Revenues to repay the I 994A Bonds, the 1994D Bonds and 1994C Bonds, will be
discharged, terminated and of no further force and effect upon the deposit with the Escrow Bank of the
amounts required pursuant to the Escrow Agreement.
\
.. Preliminary, subject to change.
8
c2-/4(P
Estimated Sources and Use of Funds
The Trustee will receive the proceeds from the sale of the Bonds and the Senior Bonds and, together with
other frods received, will apply them as shown below.
Sources of Funds
The Bonds
The Senior Bonds
Par Amount
Funds held for the 1994 Bonds
Total Sources
Use of Funds
Transfer to Escrow Bank
Original Issue Discount
Underwriter's Discount
Costs ofIssuance Fund (I)
Reserve Account
Total Uses
<') Expenses include fees and expenses of Bond Couosel, the Financial Advisor, Disclosure Couosel and the
Trustee, rating fees and bond insurance premiums with respect to the Senior Bonds, costs of printing the
Official Statement, and other costs of issuance of the Bonds.
~ ~
9
c!;1.-1..J.1
SOURCES OF PAYMENT FOR THE BONDS
Tax Allocation Financing
The Redevelopment Law and the California Constitution provide a method for financing and refinancing
redevelopment projects based upon an allocation of taxes collected within a redevelopment project area.
First, the assessed valuation of the taxable property in a project area, as last equalized prior to adoption of
the redevelopment plan, is established and becomes the base roll. Thereafter, except for any period
during which the assessed valuation drops below the base year level, the taxing agencies, on behalf of
which taxes are levied on property within the project area, will receive the taxes produced by the levy of
the then current tax rate upon the base roll. Taxes collected upon any increase in the assessed valuation of
the taxable property in a project area over the levy upon the base roll may be pledged by a redevelopment
agency to the repayment of any indebtedness incurred in financing the redevelopment project.
Redevelopment agencies themselves have no authority to levy taxes on property and must look
specifically to the allocation of taxes as indicated above.
Tax Revenues
As provided in each of the Redevelopment Plans for the constituent project areas, and pursuant to Article
6 of Chapter 6 of the Redevelopment Law, and Section 16 of Article XVI of the Constitution of the State,
taxes levied upon taxable property in the Redevelopment Projects each year by or for the benefit of the
State, for cities, counties, districts or other public corporations (collectively, the "Taxing Agencies") for
fiscal years beginning after the effective date of each constituent Redevelopment Plan, will be divided as
follows:
I. To Taxing Agencies: The portion of the taxes which would be produced by the rate upon which
the tax is levied each year by or for each of said Taxing Agencies upon the total sum of the
assessed value of the taxable property in the project area as shown upon the assessment roll used
in connection with the taxation of such property by such Taxing Agency last equalized prior to the
establishment of the project area will be allocated to, and when collected will be paid into, the
funds of the respective Taxing Agencies as taxes by or for said Taxing Agencies; and
2. To the Agencv: The portion of such levied taxes each year in excess of such amount will be
allocated to, and when collected, will be paid into a special fund of the Agency to the extent
necessary to pay indebtedness of the Agency, including but not limited to its obligation under the
respective Indenture, to pay the principal of, prepayment premium (if any) and interest on the
Bonds and to replenish the Reserve Account established under the respective Indenture.
The Agency has no power to levy and collect property taxes, and any property tax limitation, legislative
measure, voter initiative or provisions of additional sources of income to Taxing Agencies having the
effect of reducing the property tax rate could reduce the amount of Tax Revenues that would otherwise be
available to pay the Agency's obligations under the Indenture and thus reduce the amount of Tax
Revenues available to pay the principal of and Interest on the Bonds. Likewise, broadened property tax
exemptions could have a similar effect. See "BONDHOLDERS' RISKS" and "FINANCIAL INFORMATION
- Tax Increment Revenues" herep,.
10
02. ~ / cj. '6
Pledge of Tax Revenues
The Tax Revenues are pledged to the payment of principal of and interest on the Bonds pursuant to the
Indenture until the Bonds and any Parity Debt have been paid, or until moneys have been set-aside
irrevocably for that purpose on a basis subordinate to the Senior Bonds. The Trustee will covenant to
exercise such rights and remedies as may be necessary to enforce the payment of the Tax Revenues when
due under the Indenture, and otherwise to protect the interests of the Bondholders in the event of default
by the Agency.
The Bonds are limited ohligations of the Agency. The Bonds do not constitute a debt or liability of
the City of Chuta Vista, the State of California or of any political subdivision thereof, other than the
Agency. The Agency shall only be obligated to pay the principal of the Bonds, or the interest
thereon, from the funds described herein, and neither the faith and credit nor the taxing power of
the City of Chula Vista, the State of California or any of its political subdivisions is pledged to the
payment of the principal of or the interest on the Bonds. The Agency has no taxing power.
The Agency has irrevocably granted a pledge of, lien on, and security interest in the Tax Revenues for the
repayment of the Bonds on a basis subordinate to the pledge and lien on the Tax Revenues of the Senior
Bonds. Tax Revenues consist of all of the Tax Increment Revenues allocated to the Project Area
excluding (i) amounts required to be deposited in the Agency's low and moderate income housing fund
pursuant to Section 33334.3 of the Redevelopment Law and (ii) amounts payable by the State pursuant to
Section 16112.7 of the Government Code and (iii) amounts required to be paid pursuant to the Tax
Sharing Statutes, as defined herein unless subordinated to the payment of debt service on the Bonds. Tax
Increment Revenues consist of tax increment revenues receivable by the Agency with respect to the
Project Area pursuant to Article 6 of Chapter 6 of the Redevelopment Law. See "THE PROJECT AREA _
Outstanding Indebtedness of the Project Area," "TIIE AGENCY - Low and Moderate Income Housing,"
"FINANCIAL INFORMATION - Tax Increment Revenues" and "Tax Sharing Statutes," and
"BONDHOLDERS' RISKS" herein.
Reserve Account
A Reserve Account for the Bonds has been funded under the Indenture to be held by the Trustee to further
secure the timely payment of principal and Interest on'the Bonds. The amount required to be maintained
in the Reserve Account for the Bonds is the least of (i) 10% of the original proceeds (within the meaning
of section 148 of the Code) of the Bonds, (ii) 125% of the average Annual Debt Service for that and every
subsequent Bond Year, or (iii) Maximum Annual Debt Service (the "Reserve Requirement"). The
Indenture provides that in lieu of a cash deposit, the Agency may satisfy all or a portion of a Reserve
Requirement by means of a Qualified Reserve Account Credit Instrument (see "APPENDIX A _
SUMMARY OF CERTAIN PROVISIONS OF TIIE INDENTURE" herein).
Issuance of Additional Debt
Parity Debt. The Agency may issue or incur additional Parity Debt on a parity with the Bonds subject to
the following specific conditions.
I ,
(a) The Agency shall be m compliance with all covenants set forth in the Indenture, and all
Supplemental Indentures.
(b) The Tax Revenues estimated to be received for the then current Bond Year shall be at least equal
to 120% of Maximum Annual Debt Service on all Bonds and any existing Parity Debt which will
be Outstanding immediately following the issuance of such additional Parity Debt.
(c) The Supplemental Indenture providing for the issuance of such additional Parity Debt shall
provide that interest thereon shall not be payable on any dates other than March I and September
11
c::.2 -/ c./-'1
I, and principal thereof shall be payable on September I in any year in which principal is
payable.
(d) The Supplemental Indenture providing for the issuance of such additional Parity Debt shall
provide for the deposit into the Reserve Account of an amount required to cause the balance
therein to equal the full amount of the Reserve Requirement (which may be maintained in whole
or in part in the form of a Qualified Reserve Account Credit Instrument).
(e) The issuance of such additional Parity Debt shall not cause the Agency to exceed any applicable
Plan Limit.
(f) The Agency shall deliver to the Trustee and the Bond Insurer a Certificate of the Agency
certif'ying that the conditions precedent to the issuance of such additional Parity Debt set forth in
the foregoing paragraphs (a), (b), (c), (d) and (e) have been satisfied.
Subordinate Debt. If the Agency is in compliance with all covenants set forth in the Indenture, the
Agency may for any purpose issue or incur obligations having a lien on the Tax Revenues which is
subordinate to the pledge of the Tax Revenues to the Bonds.
,
,
"
12
c2-ISO
THE AGENCY
Government Organization
The Agency is a public body, corporate and politic, existing under and by virtue of tbe California
Community Redevelopment Law, being Part I of Division 24 (commencing witb Section 33000) oftbe
Healtb and Safety Code oftbe State (tbe "Redevelopment Law"). The Agency was activated in 1972, and
is governed by a five-member board (tbe "Agency Board") which consists of all members of tbe City
Council. The Chairman and Vice Chairman are appointed to a one-year term by tbe Agency Board from
among its members. The Agency's members and term expiration dates are as follows:
AGENCY GOVERNING BOARD
Board Member
Stephen C. Padilla, Mayor and Chairman
Steve Castaneda, Councilmember
Patricia E. Chavez, Councilmember
John McCann, Councilmember
Jerry Rindone, Councilmember
Term Expires
December 2006
December 2008
December 2006
December 2006
December 2008
The City performs certain general admmistrative functions for tbe Agency and tbe Chula Vista
Redevelopment Corporation (see "The Chula Vista Redevelopment Corporation" below). The City
Manager serves as tbe Agency's Executive Director, tbe City's Director of Community Development
serves as the Agency's Secretary and tbe City's Finance Director serves as Agency's Treasurer. The costs
of such functions, as well as additional services performed by City staff are allocated annually to tbe
Agency. The Agency reimburses tbe City for such allocated costs out of available Tax Increment
Revenues. Such reimbursement is subordinate to any outstanding bonds, loans and otber indebtedness of
tbe Agency. Current City Staff assigned to administer tbe Agency and tbe Chula Vista Redevelopment
Corporation include:
Jim Thomson., Interim City Manager
Laurie A. Madigan, Assistant City Manager, Special Projects
David Palmer, Assistant City Manager, Community Services
Dana Smitb, Assistant City Manager, Development Services/Director of Community Development
Maria Kachadoorian, Director ofFinancelTreasurer
Ann Moore, City Attorney
Susan Bigelow, City Clerk
Agency Powers
All powers of tbe Agency are vested in its members. Pursuant to tbe Redevelopment Law, tbe Agency is
a separate public body and exercises governmental functions, including planning and implementing of tbe
Project Area. ~ ~
The Agency may exercise tbe right to issue or incur loans, advances or otber indebtedness for autborized
purposes and to expend tbeir proceeds, and tbe right to acquire, sell, rehabilitate, develop, administer or
lease property. The Agency may demolish buildings, clear land and cause to be constructed certain
improvements, including streets, sidewalks and utilities, and can further prepare for use as a building site
any real property which it owns or administers.
I3
0.2 -/.:s I
The Agency may, from any funds made available to it for such purposes, and subject to certain conditions,
pay for all or part of the value of land and the cost of buildings, facilities or other improvementS to be
publicly owned and operated. The Agency may not construct or develop buildings, with the exception of
public buildings and housing, and must sell or lease cleared property which it acquires within a
redevelopment project for redevelopment in conformity with a particular redevelopment plan, and may
further specify a period within which such redevelopment must begin and be completed.
The Chula Vista Redevelopment Corporation
The City formed the Chula Vista Redevelopment Corporation (the "Corporation") on June 15,2005. The
Corporation is a 501c3 Public Benefit Corporation, whose board of directors consists of the Mayor,
Mayor Pro Tem, the three remaining City Council Members, and four members of the public meeting
certain criteria for selection. The Corporation was formed to focus the City's redevelopment activities in
certain areas, and carry out all City planning and zoning activities within such areas, including planning
commission responsibilities and functions, design review committee responsibilities and functions and
environmental review commission responsibilities and functions. The City Manager, the City's Director
of Finance/Treasurer and the City's Director of Community Development serve as Chief Executive
Officer, Chief Financial Officer and Secretary of the Corporation respectively.
Redevelopment Plans
Under the Redevelopment Law the governing board is required to adopt, by ordinance, a redevelopment
plan for each redevelopment project. A redevelopment agency may only undertake those activities within
a redevelopment project specifically authorized in the adopted redevelopment plan. A redevelopment
plan is a legal document, the content of which is largely prescribed in the Redevelopment Law rather than
a "plan" in the customary sense of the word. The general objectives of the Agency's Redevelopment
Plans for the component areas of the Project Area are to encourage investment in the Project Area by the
private sector. The Project Area provides for the acquisition of property, the demolition of buildings and
improvements, the relocation of any displaced occupants, and the construction of streets, parking
facilities, utilities and other public improvements. The Redevelopment Plans also allow the
redevelopment of land by private enterprise, the rehabilitation of structures, the rehabilitation or
construction of low and moderate income housing" and participation by owners and the tenants of
properties in the Project Area.
The City Council approved and adopted the Redevelopment Plan for the Bayfront Redevelopment Project
on July 16, 1974, pursuant to Ordinance No. 1541. It was subsequently amended on July 17, 1979 to
merge it with the Town Centre Redevelopment Project.'. The Redevelopment Plan was also amended on
April 22, 1986 to include certain fmanciallimitations, again on January 4,1994 and November 8,1994 to
add limitations prescribed by AB 1290 (see "Plan Limitations" below), on July 7, 1998 to include
additional territory (the "Bayfront Amended Area") and amend financial limits, on January 13, 2004 to
eliminate the time limit on establishing debt and on January 27, 2004 to extend the duration of the
Redevelopment Plan.
The City Council approved and adopted the Redevelopment Plan for the Town Centre Redevelopment
Project on July 6, 1976, pursuat1 to Ordinance No. 1691. It was subsequently amended on July 17, 1979
to merge it with the Bayfront Redevelopment Project, on April 22, 1986 to include certain fmancial
limitations, on January 4,1994 and November 8, 1994 to add limitations prescribed by AB 1290, on July
7,1998 to amend financial limits, on January 13,2004 to eliminate the time limit on establishing debt and
on January 27, 2004 to extend the duration of the Redevelopment Plan (see "Plan Limitations" below).
14
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Plan Limitations
The Redevelopment Plans for the constituent redevelopment projects impose certain limitations on the
amount of Tax Increment Revenues that the Agency may be allocated from such constituent
redevelopment projects. In 1993, the State Legislature adopted Assembly Bill 1290 (AB 1290), which
imposed certain time limitations on (1) the allocation of Tax Increment Revenues to a redevelopment
project, (2) the effectiveness of a redevelopment plan and (3) the incurrence of debt. Prior to subsequent
changes, Section 33333.6 of the Redevelopment Law provided that a redevelopment agency may not pay
indebtedness or receive property taxes pursuant to Section 33670 of the Redevelopment Law after ten
years from the termination of the effectiveness of a redevelopment plan (which was limited to the later of
January I, 2009 or 40 years after the adoption of such redevelopment plan). In 1998, the State
Legislature adopted Assembly Bill 1342 (AB 1342), which allowed redevelopment agencies to extend
plan limitations to such maximum terms without having to comply with the statutory plan amendment
process if such agency's existing plan limits were shorter. In 2002, the State Legislature adopted Senate
Bill 211 (SB 211), allowing the elimination of the Agency's time limitation on incurring debt.
More recently, Senate Bill 1045 (SB 1045) and Senate Bill 1096 (SB 1096) provided that the governing
body could adopt an ordinance to extend the limits on the termination of redevelopment plans approved
prior to 1994 and the authority to collect Tax Increment Revenues by one additional year each time the
Agency was required to make a payment to ERAF in fiscal years 2003/04, 2004/05 and 2005/06 (see
"BONDHOLDERS' RISKS - State of California Fiscal Issues" herein). Even though the constituent
redevelopment projects have been merged, the limitations established with respect to a constituent
redevelopment project continue to apply to such constituent redevelopment project, except with respect to
the limitation on the maximum Tax Increment Revenues and on maximum outstanding bonded
indebtedness as described below.
The current limitations imposed by the respective Redevelopment Plans are as follows:
Proiect Area
Bayfront:
Original Area
Amended Area
Town Centre
Plan EX1)iration Date
Last Date to Collect
Tax Increment
Total Tax Increment
Limitation
JuJy 16,2015
July 7, 2029
July 6, 2017
July 16, 2025
June 23 2044
July 6, 2027
$210,000,000
N/A
$84,000,000
The maximum bonded indebtedness for the Project Area, with the exception of the Bayfront Amended
Area, which has no limit, is $50,000,000. The Agency 'has eliminated the limits in each Redevelopment
Plan on incurrence of debt in accordance with SB 211. The Agency has also extended the Redevelopment
Plan for the Original Bayfront Redevelopment Project and the Town Centre Redevelopment Project by
one year in accordance with SB 1045, but has not yet adopted any extensions on plan limits pursuant to
SB 1096.
Low and Moderate Income Housing
In 1976, the Redevelopment LaJ wb amended to require that for every redevelopment plan adopted after
January I, 1977, or any area which is added to a redevelopment project by an amendment to a
redevelopment plan after January I, 1977, not less than twenty percent (20%) of Tax Increment Revenues
must be set aside annually for the purpose of increasing and improving the community's supply of low
and moderate income housing available at affordable housing costs to persons and families of very low,
low or moderate income households. In 1985, the Redevelopment Law was further amended to add
substantially the same requirements with respect to plans adopted prior to January I, 1977. No portion of
the Tax Increment Revenues required to be set aside for low and moderate income housing is available to
pay debt service on the Bonds.
15
02-/~.:J'
THE PROJECT AREA
Description of the Project Area
The Project Area is comprised of the Agency's Bayftont Redevelopment Project and Town Centre
Redevelopment Project. The relative acreage from each of the constituent redevelopment projects
comprising the Project Area is shown below:
Original Bayftont Area
Bayftont Amended Area
Town Centre
637 Acres
398 Acres
138 Acres
1,173 Acres
As noted above, the Agency has a different limit on the time to collect Tax Revenues ftom each separate
area. See "BONDHOLDERS' RISKS - Plan Limitations" herein.
The Bayfront Redevelopment Project. The Original Bayfront Redevelopment Project, formed in 1974,
is comprised of 637 acres of property located between Interstate 5 and the mean high tide line along the
Chula Vista Bayftont. The Bayfront Amended Area was created in 1998 and encompasses 398 acres of
property west of the mean high tide line to the water line. Of the total property in the Bayfront
Redevelopment Project, 45 acres are developed with a marina, and 513 acres are designated the
Sweetwater Marsh National Wildlife Refuge. The goal of the Agency is to encourage development along
the City's bayftont while maintaining recreational access to the waterfront.
The Unified Port District of San Diego (the "Port District") administers 420 acres of state public tidelands
within the Bayfront Redevelopment Project under a Tidelands Trust that guides how the land is to be
used. The Port District and the City have entered into a joint venture to work together on developing the
waterfront under the Chula Vista Bayfront Master Plan ("CVBMP"). The objectives of the CVBMP are
to create an active commercial harbor with public space at the water's edge, redevelop underutilized and
vacant areas on Port tidelands, provide a continuous shoreline pedestrian walkway, and establish
ecological buffers to protect environmentally sensitive resources.
After much public participation in the plan developmcut, the environmental impact report ("EIR") for the
CVBMP is now in process. Once the EIR is complete, public hearings will be scheduled to receive public
comment. The CVBMP must also be approved by the State Lands Commission and the California
Coastal Commission. Since the Port and the Agency would like residential development to occur in the
Bayfront area, they also need approval by those two commissions, since residential development is not a
permitted use for the tidelands controlled by the Port. With the permission of the State Lands
Commission, Pacifica Companies, a residential developer that already owns 128 acres of property
adjacent to the tidelands, could substitute such property for a like amount of tidelands property so that the
proposed residential development could occur.
Overall, if approved by all agencies, the CVBMP contemplates development of 1,700 condominiums, a
1,500 to 2,000 room resort hotel and adjacent 400,000 square foot conference facility, over 200 acres of
open space including a signature City park, 570,000 square feet of retail and other development, office
space, and a new marina with 1'1>00 boat slips. The City and the Port will also need to invest in needed
inftastructure and public improvements to support the developments. The Port intends to relocate an
existing RV park located in the Bayfront Amended Area as part of the overall development in the CVBMP
area. The 2005/06 tax roll includes approximately $15 million of secured value and $11.7 million of
unsecured value relating to this property. The Agency expects that if and when the relocation occurs, the
tax roll will be reduced by approximately $26.7 million.
The largest development that has occurred in the Original Bayftont Redevelopment Project is the
completion of a 245,000 square foot BF Goodrich corporate headquarters, called the North Campus. This
16 c:;( -JO'/-
taxpayer accounts for 36% of the total assessed value of the Project Area. The facility was completed in
_ and consolidated aviation and industrial manufacturing operations that had been spread across 83
acres and 63 buildings in the Original Bay!Tont Redevelopment Project. The Port has commenced with
demolition of the 63 blighted industrial buildings. The value of these buildings has already been removed
!Tom the tax roll.
The South Bay Power Plant (the "Power Plant") is also located in the Original Bay!Tont Redevelopment
Project, on 150 acres leased !Tom the Port District. The Power Plant includes four steam-powered
generation turbines, an electrical switching station, above ground fuel storage tanks, a formed liquefied
natural gas facility and extensive open areas to the north and south. The Port District has a lease
agreement for the facility with LSP South Bay, LLC, a subsidiary of LS Power Group. LSP South Bay,
LLC acquired the Power Plant !Tom Duke Energy on May 4, 2006. The lease is set to expire in 20 10
dependent upon the status of the "Reliability Must Run" designation imposed by the State. The Power
Plant is to be dismantled at the end of the lease term, which is predicated on the removal of the Reliability
Must Run designation. The City and the Port District have supported the concept of building a newer,
cleaner, more efficient power plant on Port District property near the existing Power Plant (but most
likely outside the boundaries of the Project Area) as a means to assure that the Reliability Must Run status
will be removed !Tom the Power Plant and it can be decommissioned and dismantled. The dismantling of
the Power Plant is an integral part of the CVBMP.
The tax roll is already reflecting a reduction in assessed value of the Power Plant as the end of the lease
term gets closer. The chart below details the assessed value of the Power Plant over time.
Year
2002/03
2003/04
2004/05
2005/06
Assessed Value
$102,736,000
57,579,000
60,194,000
51,893,000
The Agency anticipates that the value of the Power Plant will decline by 25% each year until the final
year of the existing lease, at which time all value associated with the Power Plant will be eliminated !Tom
the tax roll. , ,
The Town Centre Redevelopment Project. The Town Centre Redevelopment Project is an area of
approximately 138 acres encompassing the City's central business district. The Town Centre
Redevelopment Project is urbanized and developed with a mix of public and private uses. Such uses
include the San Diego South County Superior and Municipal Court Complex, the Norman Park Senior
Center, Memorial Park as well as a variety of commercial office space, retail, retail service and residential
uses.
The Agency is in the process of developing an Urban Core Specific Plan which' encompasses
development in the Town Centre Redevelopment Project as well as surrounding areas. The Urban Core
has three components - "The Villages," to be developed with additional multi-family housing, "The
Boulevard," which is the primary commercial corridor, and "The Promenade," a pedestrian-oriented retail
area. , ,
Renewed developer interest in the City's urban core has brought the first upscale Class A office
development to the downtown marketplace. The Gateway Chula Vista project will be developed in three
phases. The first phase consists of 149,000 square feet of office with ground floor retail and a four-level
parking structure and was completed in 2002. The second phase of 105,000 square feet and second
parking structure was completed in April 2006. The fmal phase is anticipated to contain 93,000 square
feet with construction commencing July 2006. This major mixed-use project anchors the southern entry
into Downtown Chula Vista, and the Gateway project's two five-story and one six-story office building
17
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are designed specifically for high tech office use, with ground floor retail. The second phase is expected
to add $21,000,000 to the 2007/08 tax roll and the third phase is expected to add $18,600,000 to the
2009/1 0 tax roll.
In addition to this major project, many infill projects are proposed in the Town Centre Redevelopment
Project. On the southeast comer of 3m and E Street, a mixed use residential development comprised of
approximately 85 residential units and 6,000 square feet of retail on an 11,500 square foot lot is proposed
by Avion. It is estimated that construction of this project could commence in January 2007 and be
completed within 18 months. Estimated value at the time of completion is $30.35 million. At the
intersection of 3,4 and G Street, the Agency anticipates a m;xed use commercial development proposed to
contain approximately 150 residential units and 15,000 square feet of retail space on a 41,000 square foot
site which could be under development as early as December 2006. Estimated value at the time of
completion is $54 million and the development is anticipated to be complete in December 2007.
Intergulf-Mar is the developer of this project. City Mark is proposing to build approximately 120
condominiums along Landis and Douglas Wilson is proposing to build another 35 units along Church.
Estimated value at the time of completion of both projects is $54.25 million, based on an average sale
price of$350,000 per unit. Completion of these housing projects is expected to occur in mid-2008.
Assessed Valuations
Assessed value of the constituent project areas comprising the Project Area between fiscal years 2001/02
and 2005/06 are shown in the tables below.
TABLE NO.1
ORIGINAL BAYFRONT REDEVELOPMENT PROJECT
mSTORICALASSESSED VALUATIONS AND TAX INCREMENT REVENUES
2001/02 through 2005/06
200]/02 2002/03 2003/04 2004105 2005106
State Assessed (I) $ 88,500 $ 80,513 $ 57,579.396 $ 60,282,256 $ 51,892,582
Secured (I) 196,706,307 320,843,655 ~ 218,107,587 202,238,967 203,441,607
Unsecured 108984214 22010 429 6678731 4363477 4921464
Total (2) $305,779,021 $342,934,597 $282,365,714 $266,884,700 $260,255,653
Less: Base year (lR7 648 6281 (} 87 648 628) (187 648 628) (187648628) ( J 87 648 628)
Incremental Increase $1l8,130,393 $155,285,969 . $ 94,717,086 $ 79,236,072 $ 72,607,025
Tax Rate I 009425% I 007468% I 006682% 1.005616% 1005081%
Tax Increment Revenues $ 1,192,438 $ 1,564,457 $ 953,500 $ 796,811 $ 729,759
Unitary Revenues (3) 737 954 703 ]62 I 335057 1351039 1358970
Total Tax Revenues (4) $ 1910197 $ ? 7';7 fi19 $ 7. 7.88 ))7 $ '1478)0 $ , ORB 779
Source; San Diego Couniy Auditor-Controller.
\
(I) The value of the Power Plant was mcluded m the local secured and unsecured tax roll value prior to 2003/04.
(2) Taxable Valuation as of August 20 equalized roll.
(3) See "FINANCIAL INFORMATION - Tax Increment Revenues - Urutary Properly" herem for a discussion of the
method of allocatillg Unitary Revenues.
(4) The "Total Tax Revenues" are based on data furnished by the San Diego Couniy Auditor-Controller's Office.
Actual Tax Increment Revenues received vary ITom Total Tax Revenues shown herem because of supplemental
taxes, appeals or refunds, deductions for delmquencies and tax-sharmg statutes and admmistrative charges by
the Couniy.
18
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TABLE NO.2
BAYFRONTAMENDED AREA REDEVELOPMENT PROJECT
mSTORICALASSESSED VALUATIONS AND TAX INCREMENT REVENUES
2001102 through 2005/06
2001102 2002/03 2003/04 2004105 2005/06
Secured $ 36.141.469 $ 36.036.600 $ 34.004,113 $ 36.614,166 $ 37.433,140
Unsecured 18722 215 21380926 21314709 23 953 992 24 844 436
Total (2) $ 54,863.684 $ 57,417,526 $ 55,318,822 $ 60,568,158 $ 62,277,576
Less: Base year (43834980) (438349801 (438349801 (43834 9801 (43 834 980)
Incrementallncreasc $ 11,028,704 $ 13,582,546 $ 11,483,842 $ 16,733,178 $ 18,442,596
Tax Rate 1.009158% 1.008125% 1.007267% 1.006444% 1.005589%
Tax Increment Revenues $ 111,297 $ 136,929 $ 115,673 $ 168,410 $ 185,457
Unitary Revenues (3) 158 150 221 223 225
Tota] Tax Revenues (4) $ 111 411 $ 11707<<:1 $ IJ'ii RQ4 $ )nR n11 $ lR'i fiR'
Source: San Diego County Auditor-Controller. See footnotes following Table No.1.
TABLE NO.3
TOWN CENTRE REDEVEWPMENT PROJECT
mSTORICALASSESSED VALUATIONS AND TAX INCREMENT REVENUES
2001102 through 2005/06
2001102 2002103 2003/04 2004/05 2005/06
Secured $lJ4,629,075 $124,721,541 $145,423,308 $155,900,245 $175,586,050
Unsecured 26 130337 17 907486 25418173 25253 645 23507 591
Total (2) $140,759,412 $142,629,027 $170,841,481 $181,153,890 $199,093,641
Less: Base year (21227600\ (212276001 (21 227 600) (21 227 6001 (21 227 6001
Incrementallncrease $lJ9,531,812 $121,401,427 $149,613,881 $159,926,290 $177,866,041
Tax Rate 1.008749% 1.007574% 1.006867% 1.005929% 1.005265%
Tax Increment Revenues $ 1,205,776 $ 1,223,209 $ 1,506,413 $ 1,608,745 $ 1,788,026
Unitary Revenues (3) 114 076 108 467 108 197 109630 110372
Total Tax Revenues (4) $ 111<<:1 8'i2 $ 111167n $ I 614/i1O $ 171817'i $ 1898198
Source: San Diego County Auditor-Controller. See footnotes following Table No.1.
, ,
19
e:J -IS 7
Major Taxpayers
Not including the Power Plant, sited on land leased from the Port District and operated by LSP South Bay,
LLC, the ten largest property taxpayers represent 59.7% ofthe 2005/06 total assessed value of the Project
Area. If the Power Plant is included, the ten largest property taxpayers represent 62.9% of the 2005/06
total assessed value of the Project Area. As discussed above, the Agency anticipates that the value ofthe
Power Plant will be eliminated from the tax roll by 2009.
TABLE NO.4
PROJECT AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 2005106 ASSESSED VALUE
Not Including Power Plant
0/0 of
2005/06 Assessed
TaxD3ver Assessed Value Value Proiect Location Land Use
Rohr Inc. (dba BF Goodrich) $167,783,109 35.7% Original Bayfront Manufacturing
Gateway Chula Vista I LLC 34,584,362 7.4% Town Centre OfficelRetail
Chula Vista Marina RV Park ]4,180,878 3.0% Bayfront Amended RV Park
Chula Vista Capital 14,003,275 3.0% Original Bayfront Vacant Land
EASLLC 9,195,536 2.0% Town Centre Retail
One Park Apartments LP 8,893,731 1.9% Town Centre Apartments
Foster Properties 8,]92,498 1.7% Original Bayfront Warehouses
780 Bay Boulevard 7,966,] 89 1.7% Original Bayfront Warehouses
California Yacht Marina Chula Vista 6,064,525 1.3% Bayfront Amended Marina
Marine Group LLC South Bay Boat 5,4]7,747 1.2% Bayfront Amended Industrial
Good Nite Inn Chula Vista Inc. 4.234468 0.9% Original Bayfront Hotel
Total $280,5]6,318 59.7%
TABLE NO.5
PROJECT AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 2005/06 ASSESSED VALUE
Including Power Plant
% of
2005/06 Assessed
TaxD3ver Assessed Value Value Proiect Location Land Use
Rohr Inc. (dba BF Goodrich) $167,783,109 32.2% Original Bayfront Manufacturing
Duke Energy (now LSP) 5],892,582 9.9% Original Bayfront Energy Generation
Gateway Cbula Vista I LLC 34,584,362 6.6% Town Centre OfficelRetail
Chula Vista Marina RV Park 14,]80,878 2.7% Bayfront Amended RV Park
Chula Vista Capital 14,003,275 2.7% Original Bayfront Vacant Land
EASLLC 9,195,536 1.8% Town Centre Retail
One Park Apartments LP \ 8,893,73] 1.7% Town Centre Apartments
Foster Properties 8,192,498 1.6% Original Bayfront Warehouses
780 Bay Boulevard 7,966,189 1.5% Original Bayfront Warehouses
California Yacht Marina Chula Vista 6,064,525 1.2% Bayfront Amended Marina
Marine Group LLC South Bay Boat 5.4] 7747 1.0% Bayfront Amended Industrial
Total $329,766,085 62.9%
Source: City of Chula Vista.
20 .;;J, ,..../.:s-g
Assessment Appeals
As of December 2005, Rohr Inc. has an appeal pending for its property in the Original Bayfront
Redevelopment Project. Rohr Inc. is seeking a 79% reduction in assessed value of such property to
approximately $35 million. Rohr previously filed appeals for the 2002/03 tax year, seeking a 71%
reduction from the then assessed value of $187,049,496, for the 2003/04 tax year, seeking a 79%
reduction from the then assessed value of $184,593,505, and for the 2004/05, seeking a 67% reduction
from the then assessed value of $167,813,961. All prior appeals were withdrawn in February 2005 prior
to action by the Appeals Board.
For the 2005/06 tax year, there are also appeals pending on 2 parcels in the Town Centre Redevelopment
Project with a total assessed value of $742,116.
Tax Collections
The table below represents the collection rates for taxes paid in the year levied in the Project Area.
TABLE NO.6
PROPERTY TAX COLLECTIONS
2000/01
2001/02
2002/03
2003/04
2004/05
Original Bayfront
Amended Area
Town Centre
98.7%
98.5%
98.5%
98.5%
98.5%
98.5%
98.4%
98.6%
98.6%
98.7%
98.6%
98.8%
99.3%
98.5%
98.5%
Source: San Diego County Auditor-Controller.
, .
~ ~
21
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Outstanding Indebtedness of the Project Area
The Agency had the following obligations with respect to the Project Area as of May 5, 2006:
Original Amount Final
Description Issue Outstanding Maturity
(1) 1994 Senior Tax Allocation Refunding Bonds, Series A $14,810,000 $12, 905,000 2024
(2) 1994 Senior Tax Allocation Refunding Bonds, Series D 5,680,000 4,945,000 2024
(3) 1994 Subordinate Tax Allocation Refunding Bonds, Series C 8,195,000 6,855,000 2024
(4) City Advances N/A
(5) 2005 ERAF Loan 765,000 710,000 2015
(6) 2006 ERAF Loan 930,000 930,000 2016
(I) In 1994, the Agency issued its Bayuont/Town Centre Redevelopment Project 1994 Tax
Allocation Refunding Bonds, Series A (the "1994A Bonds"). The 1994A Bonds are to be
refunded with the proceeds of the Senior Bonds.
(2) In 1994, the Agency authorized the issuance of its Bayuont/Town Centre Redevelopment
Project 1994 Tax Allocation Refunding Bonds, Series D (the "1994D Bonds"). The 1994D
Bonds were issued in 1996. The 1994D Bonds are to be refunded with the proceeds of the
Bonds.
(3) In 1994, the Agency issued its Bayuont/Town Centre Redevelopment Project 1994
Subordinate Tax Allocation Refunding Bonds, Series C (the "1994C Bonds"). The 1994C
Bonds are to be refunded with the proceeds of the Bonds.
(4) The Agency has entered into various promissory notes with the City. Repayment is to be
made as funds become available. The City Advances have a lien on the tax increment
revenues subordinate to all other indebte~ess of the Project Area.
,
(5) and (6) The Agency satisfied its obligation to pay its share ofERAF in both 2004/05 and 2005/06 by
borrowing the amounts required through the California Statewide Communities Development
Authority. The repayment of each year's loan is payable in 20 approximately equal semi-
annual installments. The repayment obligation has no lien on Tax Revenues but is payable on
an unsecured basis from any available Agency funds.
Source: Agency Annual Financial Report.
\
22 c:::.J-1 b 0
Projected Tax Revenues and Debt Service Coverage
Receipt of projected Tax Revenues in the amounts and at the times projected by the Agency depends on
the realization of certain assumptions relating to the Tax Increment Revenues. The projections of Tax
Increment Revenues and the corresponding Tax Revenues &om the component areas of the Project Area
shown on the following table were based on the assumptions shown below. The Agency believes the
assumptions upon which the projections are based are reasonable; however, some assumptions may not
materialize and unanticipated events and circumstances may occur (see "BONDHOLDERS' RISKS"). To
the extent that the assumptions are not actually realized, the Agency's ability to timely pay principal of
and interest on the Bonds may be adversely affected.
Following is a discussion of assumptions used in the projection of Tax Revenues:
(a) For the purposes of the projections, it was assumed that the following assessed value would be
added to the secured tax rolls in the Town Centre Redevelopment Project as a result of anticipated
new construction:
Tax Roll Year
2007/08
2008/09
2009/1 0
Value
$21,000,000
54,000,000
103,200,000
See "THE PROJECT AREA - Description of the Project Area - The Town Centre Redevelopment
Project" herein.
(b) For the purposes of the projections, it was assumed that $15 million would be eliminated &om the
2008/09 secured tax roll and $11. 7 million would be eliminated &om the 2008/09 unsecured tax
roll of the Bay&ont Amended Area as a result of the possible relocation of the RV park. See
"THE PROJECT AREA - Description of the Project Area- The Bay&ont Redevelopment Project"
herein.
(c) For the purposes of the projections, the state assessed utility property value for Power Plant is
included in the projections in the following 'WIIounts, reflecting the anticipated closure of the
Power Plant:
Tax Roll Year
2006/07
2007/08
2008/09
Value
$25,946,000
12,973,000
o
See "THE PROJECT AREA - Description of the Project Area - The Bay&ont Redevelopment
Project."
(d) After the adjustments described in (a) and (b) above, the secured roll was assumed to increase 2
percent annually for inflation in future years through 2015/16, with the exception of the secured
roll in the Original B~&"nt Redevelopment Project, which is not projected to increase (see
"FINANCIAL INFORMATION - Tax Increment Revenues - Manner in Which Property Valuations
and Assessments are Detennined (Article XIllA)" herein).
(e) After the adjustments described in (b) above, the values of unsecured personal property and the
amount of unitary revenues have been maintained throughout the projections at their 2005/06
levels
23
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......
(f) A tax rate of $1.00 per $100 of assessed value applied to the taxable property in the component
areas of the Redevelopment Projects was used to determine Tax Increment Revenues (see
"FINANCIAL INFORMATION - Tax Increment Revenues - Property Tax Rate" herein).
(g) Projected Tax Increment Revenues do not reflect delinquencies (see "FINANCIAL INFORMATION
- Tax Increment Revenues" and "THE PROJECT AREA - Tax Collections" herein).
(h) Projected Tax Increment Revenues do not reflect any potential decreases resulting from pending
assessment appeals or potential Proposition 8 adjustments (see "THE PROJECT AREA _
Assessment Appeals" and "FINANCIAL INFORMATION - Tax Increment Revenues - Proposition
8 Adjustments" herein).
(i) Projected Tax Revenues include a deduction for administrative costs charged by San Diego
County (see "FINANCIAL INFORMATION - Tax Increment Revenues - Administrative Costs"
herein).
(j) Projected Tax Revenues include a deduction for payments due to taxing agencies under applicable
Tax Sharing Statutes, to the extent such payments are not subordinate to the Bonds (see
"FINANCIAL INFORMATION - Tax Increment Revenues," and "Tax Sharing Statutes" herein).
(k) Projected Tax Increment Revenues do not include supplemental property tax revenues which may
be received by the Agency.
,
24
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(I)
(2)
(3)
(4)
(5)
(6)
FINANCIAL INFORMATION
Agency Budgetary Process and Administration
The Redevelopment Law requires redevelopment agencies to adopt an annual budget containing tbe
following:
(I) The proposed expenditures of the agency.
(2) The proposed indebtedness to be incurred by tbe agency.
(3) The anticipated revenues of the agency.
(4) The work program for tbe coming year, including goals.
(5) An examination of tbe previous years' achievements and a comparison of tbe achievements witb
the goals oftbe previous years' work program.
All expenditures and indebtedness of the Agency are required to be in conformity witb the adopted or
amended budget.
The Executive Director of tbe Agency is responsible for preparing the proposed budget and submitting it
to tbe Agency. After reviewing the proposed budget at a public meeting, tbe Agency holds a public
hearing. The Agency adopts tbe budget prior to tbe start of each fiscal year. The Director of Finance is
responsible for controlling expenditures witbin budgeted appropriations.
Agency Accounting Records and Financial Statements
Every redevelopment agency is required to present an annual report to its legislative body (being tbe city
council) within six montbs of tbe end of each fiscal year. The annual report is required, among other
things, to include an independent financial "audit report" and a fiscal statement for the previous fiscal
year. The California Healtb and Safety Code defmes "audit report" to mean an examination of and
opinion on tbe financial statements of tbe agency which presents the results of the operations and
fmancial position of tbe agency. The independent fmancial audit is required to be conducted in
accordance witb generally accepted auditing standards and the rules governing audit reports promulgated
by the Governmental Accounting Standards Board. The independent fmancial audit report is also
required to include an opinion of tbe agency's compliance witb laws, regulations and administrative
requirements governing activities of tbe agency. The Redevelopment Law requires tbe fiscal statement to
contain the following information:
The amount of outstanding indebtedness of tbe agency and each project area.
The amount of tax increment revenues generated in the agency and in each project area.
The amount of tax inqrement revenues paid to a taxing agency pursuant to a tax sharing
agreement, otber than scltool or community college district.
The fmancial transactions report required to be submitted to tbe State Controller.
The amount allotted to school or community college districts pursuant to tbe Redevelopment
Law.
The amount of existing indebtedness and tbe tota! amount of payments required to be paid on
existing indebtedness for tbat fiscal year.
26
c;:J - / to lj
(7) Any other fiscal information which the agency believes is useful to describe its programs.
In addition, the annual report is required to include detailed information regarding the Agency's housing
program to assist low and moderate income households and deposits and expenditures iTom the Low and
Moderate Income Housing Fund required pursuant to the Redevelopment Law.
The Indenture requires the Agency to keep, or cause to be kept, proper books and accounts separate iTom
all other records and accounts of the Agency and the City in which complete and correct entries are made
of all transactions relating to the Tax Revenues. The Indenture requires the Agency to file with the
Trustee annually, within 180 days after the close of each fiscal year, so long as any of the Bonds are
Outstanding, its audited fmancial statements showing the Tax Revenues and all disbursements iTom the
Special Fund as of the end of such fiscal year. The Agency covenants under the Indenture to furnish a
copy of such statements upon reasonable request to any Bondholder.
Basis of Accounting and Financial Statement Presentation. The government-wide fmancial statements
are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund fmancial statements are reported using the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to
be available when they are collectible within the current period or soon enough thereafter to pay liabilities
of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures are recorded only when payment is due.
GASB No. 34. The Goverrunental Accounting Standards Board (GASB) published its Statement No. 34
"Basic Financial Statements - and Management's Discussion and Analysis - for State and Local
Governments" on June 30, 1999. Statement No. 34 provides guidelines to auditors, comptrollers, and
fmancial officers on requirements for fmancial reporting for all goverrunental agencies in the United
States. Retroactive reporting is required four years after the effective date on the basic provisions for all
major general iniTastructure assets that were acquired or significantly reconstructed, or that received
significant improvements, in fiscal years ending after June.30, 1980.
The Agency was required to implement the provision of GASB 34 for the fiscal year ending June 30,
2003.
The Agency retained the firm of Lance, Caporicci & Larson, Certified Public Accountants, Costa Mesa,
California, to examine the component unit financial statements of the Agency as of and for the fiscal year
ended June 30, 2005, the most recent fiscal year for which audited fmancial statements have been
prepared, which are included as "APPENDIX C." The firm's examination was made in accordance with
auditing standards generally accepted in the United States of America, the standards applicable to
fmancial audits contained in Governmental Auditing Standards issued by the Comptroller General of the
United States and the Guidelinesfor Compliance Audits of California Redevelopment Agencies issued by
the State Controller and as interpreted in the Suggested Auditing Procedures for Accomplishing
Compliance Audits of Californirl Rtdevelopment Agencies issued by the Governmental Accounting and
Auditing Committee of the California Society of Certified Public Accountants. The fmn reported after
their examination that the Agency's fmancial statements present fairly its fmancial position and results of
operations in conformity with generally accepted accounting principles and that they noted no instances
of non-compliance for the fiscal year ended June 30, 2005. The Agency's audited fmancial statements are
public documents and are included within this Official Statement without the prior approval of the
auditor. Accordingly, the auditor has not performed any post-audit of the financial condition of the
Agency.
27
cJ-I"'S-
Tax Increment Revenues
Procedure for the Allocation and Payment of Tax Increment Revenues. The portion of taxes required
to be allocated to tbe Agency is allocated and paid to tbe Agency by tbe County Auditor pursuant to the
following procedure:
Not later tban tbe first day of October of each year, tbe Agency is required to fiJe witb tbe County Auditor
a statement of indebtedness certified to by tbe chief fiscal officer oftbe Agency for each project area.
The statement of indebtedness is required to contain for each such project area:
(a) The date on which each loan, advance, or indebtedness was incurred or entered into;
(b) The principal amount, term, purpose, and interest rate, of each loan, advance or indebtedness; and
(c) The outstanding balance and amount due or to be paid by tbe Agency of each loan, advance or
indebtedness.
At tbe same time or times as the payment of taxes into tbe funds of tbe respective taxing agencies of tbe
County, tbe County Auditor-Controller is required to allocate and pay Tax Increment Revenues to the
Agency in an amount not to exceed tbe amount of loans, advances and indebtedness as shown on tbe
Agency's Statement of Indebtedness.
Manner in Which Property Valuations and Assessments are Determined (Article XIIIA). On June 6,
1978, California voters approved an amendment (commonly known as botb Proposition 13 and the Jarvis-
Gann Initiative) to tbe State Constitution which imposes certain limitations on taxes that may be levied
against real property. This amendment, which added Article XIllA to tbe State Constitution, among other
things, defines full cash value of property to mean "tbe county assessor's valuation of real property as
shown on tbe 1975/76 tax bill under 'full cash value', or, tbereafter, tbe appraised value of real property
when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment."
This full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per
year, or any reduction in tbe consumer price index or comparable local data, or any reduction in the event
of declining property value caused by substantial damage, destruction or otber factors. The amendment
further limits the amount of any ad valorem tax on real property to one percent of tbe full cash value of
that property, except that additional taxes may be levied to pay debt service on indebtedness approved by
the voters prior to July I, 1978 and on any bonded indebtedness for the acquisition or improvement of
real property which is approved after July I, 1978 by two-thirds oftbe votes cast by voters voting on such
indebtedness. However, pursuant to an amendment' to tbe California Constitution, redevelopment
agencies are prohibited from receiving any of tbe tax increment revenue attributable to tax rates levied to
finance bonds approved by the voters on or after January I, 1989 (see "Property Tax Rate" below).
In the general election held November 4, 1986, voters of tbe State of California approved two measures,
Propositions 58 and 60, which further amend tbe terms "purchase" and "change of ownership," for
purposes of determining full cash value of property under Article XIIIA, to not include tbe purchase or
transfer of (1) real property between spouses and (2) tbe principal residence and tbe first $1,000,000 of
otber property between parent~ and children. Proposition 60 amends Article XIIIA to permit the
Legislature to allow persons over age 55 who sell tbeir residence and buy or build anotber of equal or
lesser value witbin two years in tbe same county (or in certain cases, anotber county), to transfer tbe old
residence's assessed value to the new residence.
28
01-1""
For each fiscal year since Article XIIIA has become effective (the 1978/79 fiscal year), the annual
increase for inflation has been at least two percent except in six fiscal years. For the 1981/82 fiscal year,
the annual increase for inflation was 1 %; for the 1994/95 fiscal year, the annual increase for inflation was
1. 0 119%; for the 1995/96 fiscal year, the annual increase for inflation was 1.19%; for the 1996/97 fiscal
year, the annual increase for inflation was 1.11 %, for the 1998/99 fiscal year, the annual increase for
inflation was 1.853% and for the 2004/05 fiscal year, the annual increase for inflation was 1.867%
reflecting the actual increase in the State Consumer Price Index, as reported by the State Department of
Finance.
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real
property at the lesser of its origioally determined (base year) full cash value compounded annually by the
inflation factor, or its full cash value as of the lien date, taking into account reductions io value due to
damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based
on Proposition 8 do not establish new base year values, and the property may be reassessed as of the
following lien date up to the lower of the then-current fair market value or the factored base year value.
The State Board of Equalization has approved this reassessment formula and such formula has been used
by county assessors statewide. However, in 2001 an Orange County Superior Court held that such
reassessment formula violates the inflationary rate increase limitation of Article XIIIA of the California
Constitution. The Court held that once the assessed value of a property is reduced pursuant to Proposition
8, any subsequent iocrease in assessed value may not exceed the inflationary rate limitation (not to exceed
2%) of Article XIIlA. On April 18, 2003, the Superior Court entered its final judgment. On June 12,
2003, the Orange County Assessor, together with the Tax Collector and the County of Orange filed notice
of appeal of the Superior Court Judgment. The Appellate Court held a heariog on the matter on January
7,2004, and issued its opioion on March 26, 2004, reversiog the holding of the Orange County Superior
Court. The Plaintiffs filed an appeal with the California State Supreme Court and on July 21, 2004, the
California State Supreme Court by a 5-2 vote decided not to hear an appeal, ending this litigation.
Unsecured and Secured Property. In California, property which is subject to ad valorem taxes is
classified as "secured" or "unsecured." The secured classification includes property on which any
property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does
not become a lien against the taxed unsecured property, but may become a lien on certain other property
owned by the taxpayer. Every tax which becomes a lien on secured property, arising pursuant to State
law, has priority over all other liens on the secured pwperty, regardless of the time of the creation of the
other liens.
Property in the Redevelopment Project is assessed by the San Diego County Assessor except for public
utility property which is assessed by the State Board of Equalization.
The valuation of secured property is determined as of January 1 each year for taxes owed with respect to
the succeeding fiscal year. The tax rate is equalized during the following September of each year, at
which time the tax rate is determined. Taxes are due in two equal installments. Installments of taxes
levied upon secured property become delinquent on the following December 10 and April 10. Taxes on
unsecured property are due January 1 and become delinquent August 31, and such taxes are levied at the
prior year's secured tax rate.
~ ~
29
~-/~1
Secured and unsecured property is entered on separate parts of the assessment roll maintained by the
county assessor. The method of collecting delinquent taxes is substantially different for the two
classifications of property. The taxing agency has four ways of collecting unsecured property taxes: (J) a
civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifYing certain
facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of
delinquency for record in the county recorder's office, in order to obtain a lien on certain property of the
taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or
assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes with respect
to property on the secured roll is the sale of the property securing the taxes for the amount oftaxes which
are delinquent.
Currently, a 10% penalty is added to delinquent taxes which have been levied with respect to property on
the secured roll. Property on the secured roll with respect to which taxes are delinquent is sold to the
State on or about June 30 of the fiscal year. Under State law, ITom time of the sale of the property to the
State for nonpayment of taxes, owners have five years to redeem, during which time legal title remains in
the owners as taxpayers subject to a lien in favor of the County. The amount necessary to redeem the
property is equal to the sum of the delinquent taxes, delinquency penalties and redemption penalties of
I Y2% per month. Five years after the property is in default of taxes, the tax collector has the authority to
sell property which has not been redeemed.
A 10% penalty also attaches to delinquent taxes with respect to property on the unsecured roll, and
further, an additional penalty of I Y2% per month accrues with respect to such taxes beginning the first day
of the third month following the delinquency date.
Supplemental Assessments. Legislation adopted in 1984 (Section 75, ef seq. of the Revenue and
Taxation Code of the State of California) provides for the supplemental assessment and taxation of
property at its full cash value as of the date of a change of ownership or the date of completion of new
construction (the "Supplemental Assessments"). To determine the amount of the Supplemental
Assessment the County Auditor applies the current year's tax rate to the supplemental assessment roll and
computes the amount of taxes that would be due for the full year. The taxes due are then adjusted by a
proration factor to reflect the portion of the tax year remaining as determined by the date on which the
change in ownership occurred or the new construction was completed. Supplemental Assessments
become a lien against the real property on the date Gf the change of ownership or completion of new
construction.
Unitary Property. Commencing in the ] 988/89 fiscal year, the Revenue and Taxation Code of the State
of California changed the method of allocating property tax revenues derived ITom state assessed utility
properties. It provides for the distribution of state assessed values to tax rate areas by a county-wide
mathematical formula rather than assignment of state assessed value according to the location of those
values in individual tax rate areas.
Commencing with the ] 988/89 fiscal year, each county has established one county-wide tax rate area.
The assessed value of all unitary property in the county has been assigned to this tax rate area and one tax
rate is levied against all such property ("Unitary Revenues").
The property tax revenue deriv&l ITom the assessed value assigned to the county-wide tax rate area shall
be allocated as follows: (J) each jurisdiction will be allocated up to two percent of the increase in Unitary
Revenues on a pro rata basis county-wide; and (2) any decrease in Unitary Revenues or increases less
than two percent, or any increase in Unitary Revenues above two percent will be allocated among
jurisdictions in the same proportion of each jurisdiction's Unitary Revenues received in the prior year to
the total Unitary Revenues county-wide.
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Property Tax Rate. There are numerous tax rate areas within the Project Area. The differences between
the $1.00 tax rate and those actually levied (referred to as the "tax override rate") represents the tax levied
by overlapping entities to pay debt service on bonded indebtedness approved by the voters.
Tax override rates typically decline each year. A declining tax override rate is the result of several factors:
an effective limit, established by Article XIIIA of the California Constitution, on the amount of property
taxes that can be levied; rising taxable values within the jurisdictions of taxing entities levying the
approved override rate (which reduces the tax rate needed to be levied by the taxing entity to meet debt
service requirements); and the eventual retirement, over time, of the voter-approved debt.
For fiscal year 2004/05 the effective tax rate, including effective the tax override rate, for the majority of
the property in the Project Area was approximately $1.005 per $100 of taxable value. Future Tax
Increment Revenues have been projected in "TABLE NO.7 - PROJECTED TAX REVENUES AND DEBT
SERVICE COVERAGE" by applying only the general levy $1.00 per $100 of taxable value) to incremental
taxable values.
Administrative Costs. In 1990, the Legislature enacted SB 2557 (Chapter 466, Statutes of 1990) which
allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local
government jurisdictions on a prorated basis. For fiscal year 2004/05 the County charged administrative
fees totaling approximately $41,000 to the Project Area.
Tax Sharing Agreements
Pursuant to prior Section 33401(b) of the Redevelopment Law, a redevelopment agency could enter into
an agreement to pay tax increment revenues to any taxing agency that has territory located within a
redevelopment project to alleviate any financial burden or detriment caused by the redevelopment project.
These agreements are commonly referred to as "tax sharing agreements" or "pass through agreements."
The Agency has not entered into any tax sharing agreements with respect to the Redevelopment Project.
Tax Sharing Statutes
Certain provisions were added to the Redevelopment Law by the adoption of AB 1290 in 1994. A
discussion of these provisions as they relate to the ProJect Area follows. If new territory should be added
to the Project Area, under Section 33607.5 of the Redevelopment Law, any affected taxing entity will
share in the Tax Increment Revenues generated by such added area pursuant to a statutory formula
("Statutory Tax Sharing").
In addition, (i) pursuant to Section 33333.6(e)(2) of the Redevelopment Law, if the Agency deletes the
time limit to incur indebtedness in the Redevelopment Project (pursuant to SB 211 or through a plan
amendment) or (ii) pursuant to Section 33607.7 of the Redevelopment Law, as to any redevelopment plan
adopted prior to January I, 1994, if the Agency increases the total amount of Tax Increment Revenues to
be allocated to the project area or increases the duration of the Redevelopment Plan and the period for
receipt of Tax Increment Revenues, Statutory Tax Sharing will also be required under Section 33607.7 of
the Law with all affected taxing agencies not already a party to a tax sharing agreement, once the original
limitations have been reached. Ip g'ineral, the amounts to be paid pursuant to Statutory Tax Sharing are as
follows:
(a) commencing in the first fiscal year after the limitation has been reached, an amount equal to 25%
of tax increment revenues generated by the incremental increase of the current year assessed
valuation over the assessed valuation in the fiscal year that the limitation had been reached, after
the amount required to be deposited in the Low and Moderate Income Housing Fund has been
deducted;
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(b) in addition to amounts payable as described in (a) above, commencing in tbe 11th fiscal year after
tbe limitation has been reached, an amount equal to 21 % of tax increment revenues generated by
tbe incremental increase of tbe current year assessed valuation over the assessed valuation in tbe
preceding (lOth) fiscal year tbat tbe limitation had been reached, after tbe amount required to be
deposited in tbe Low and Moderate Income Housing Fund has been deducted; and
(c) in addition to amounts payable as described in (a) and (b) above, commencing in tbe 31" fiscal
year after the limitation has been reached, an amount equal to 14% of tax increment revenues
generated by tbe incremental increase of the current year assessed valuation over the assessed
valuation in tbe preceding (30th) fiscal year tbat tbe limitation had been reached, after tbe amount
required to be deposited in tbe Low and Moderate Income Housing Fund has been deducted.
(d) The City may elect to receive a portion of tbe tax increment generated in (a) above, after tbe
amount required to be deposited in tbe Low and Moderate Income Housing Fund has been
deducted.
(e) The Agency may subordinate tbe amount required to be paid to an affected taxing entity to any
indebtedness after receiving tbe consent of tbe taxing entity.
Witb respect to a taxing entity that is a party to a tax sharing agreement, tax sharing payments would
continue pursuant to such tax sharing agreement after tbe original limitations in tbe Redevelopment Plan
were passed unless otberwise terminated pursuant to tbe terms of tbe tax sharing agreement.
Tax Increment Revenue generated in tbe Bayfront Amended Area has been subject to Statutory Tax
Sharing since tbe Agency first received revenue in 1998/99.
In 1998, tbe Agency also amended an existing time limit on incurring debt in botb the Original Bayfront
Redevelopment Project and the Town Centre Redevelopment Project. As a result, Statutory Tax Sharing
has been payable witb respect to the Tax Increment Revenue generated by such areas, using tbe 1999/00
tax roll as the first fiscal after the limitation had been reached, as discussed in (a) above. The additional
Statutory Tax Sharing calculation described in (b) above will begin in 2009110.
,
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BONDHOLDERS' RISKS
The purchase of the Bond.! involves investment risk. If a risk factor materializes to a sufficient degree, it
could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include,
but are not limited to, the following matters and should be considered, along with other information in
this Official Statement, by potential investors.
Factors Which May Affect Tax Revenues
The ability of the Agency to pay principal of and interest on the Bonds depends on the timely receipt of
Tax Revenues as projected herein (see "TIffi PROJECT AREA - Projected Tax Revenues and Debt Service
Coverage" herein). Projections of Tax Revenues are based on the underlying assumptions relating to Tax
Increment Revenues of each of the constituent redevelopment projects that comprise the Project Area. A
number of factors which may affect Tax Increment Revenues, and consequently, Tax Revenues, are
outlined below.
Reductions in Assessed Value. The projections of Tax Increment Revenues contained in this Official
Statement are based on current assessed valuations within the component areas of the Project Area, a tax
rate equal to $1.00 per $100 of assessed value applied to the taxable property in the component areas of
the Project Area and certain projected increases in property values due to inflation allowed under Article
XIIIA of the California Constitution. The Agency believes that the projections of Tax Increment
Revenues and the assumptions upon which the projections are based are reasonable. However, any future
decrease in the assessed valuation of the component areas of the Project Area (or any increase at a rate
less than assumed), any general decline in the economic stability of the area, a relocation out of a
component area of the Project Area by one or more major property owners, successful appeals by
property owners for a reduction in a property's assessed value, or other events that permit reassessment of
property at lower values, either on a case by case basis or as a blanket reduction due to a general decline
in property values and any property tax refunds which may result therefi'om, the destruction of property
caused by natural disasters or any delinquencies in the payment of property taxes and any potential
acquisition of property by the Agency will reduce the Tax Increment Revenues allocated to, or received
by, the Agency and correspondingly may have an adverse impact on the Tax Revenues and ability of the
Agency to pay principal and interest on the Bonds.
Article XIIIA. Pursuant to the California voter initiative process, on June 6, 1978, California voters
approved Proposition 13 which added Article XIIIA to the California Constitution. This amendment
imposed certain limitations on taxes that may be levied against real property to I % of the full cash value
of the property, adjusted annually for inflation at a rate not exceeding 2% annually. Full cash value is
determined as of the 1975/76 assessment year, upon change in ownership (acquisition) or when newly
constructed (see "FINANCIAL INFORMATION - Tax Increment Revenues" herein for a more complete
discussion of Article XIIIA). Article XIIIA has subsequently been amended to permit reduction of the
"full cash value" base in the event of declining property values caused by substantial damage, destruction
or other factors, and to provide that there would be no increase in the "full cash value" base in the event
of reconstruction of property damaged or destroyed in a disaster and in other special circumstances.
Reduction in Inflationary Ratt. 1he annual inflationary adjustment, while limited to 2%, is determined
annually and may not exceed the percentage change in the California Consumer Price Index (CCPI).
Since Article XllIA was approved, the annual adjustment for inflation has fallen below the 2% limitation
six times: for 1981/82,1%; for 1994/95, 1.0119%, for 1995/96, 1.19%; for 1996/97, 1.11%, for 1998/99,
1.853% and for 2004/05, 1.01867%. The Financial Advisor has projected Tax Increment Revenues based
on inflationary increases in real property values.
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Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real
property at the lesser of its originally determined (base year) full cash value compounded annually by the
inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to
damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based
on Proposition 8 do not establish new base year values, and the property may be reassessed as of the
following lien date up to the lower of the then-current fair market value or the factored base year value.
The State Board of Equalization has approved this reassessment formula and such formula has been used
by county assessors statewide. However, in 200 I an Orange County Superior Court held that such
reassessment formula violates the inflationary rate increase limitation of Article XIIIA of the California
Constitution. The Court held that once the assessed value of a property is reduced pursuant to Proposition
8, any subsequent increase in assessed value may not exceed the inflationary rate limitation (not to exceed
2%) of Article XIIIA. On April 18, 2003, the Superior Court entered its fmal judgment. On June 12,
2003, the Orange County Assessor, together with the Tax Collector and the County of Orange filed notice
of appeal of the Superior Court Judgment. The Appellate Court held a hearing on the matter on January
7, 2004, and issued its opinion on March 26, 2004, reversing the holding of the Orange County Superior
Court. The Plaintiffs filed an appeal with the California State Supreme Court and on July 21, 2004, the
California State Supreme Court by a 5-2 vote decided not to hear an appeal, ending this litigation (see
"FINANCIAL INFORMATION - Tax Increment Revenues - Proposition 8 Adjustments" herein).
The Agency's ability to generate sufficient Tax Revenues to pay debt service on the Bonds will be
dependent on the economic strength of the component areas of the Project Area. Since Proposition 8
adjustments are closely tied to the economics of an area, and primarily, real estate development, factors
which adversely affect real estate development may adversely affect Tax Revenues. Such factors include
general economic conditions, fluctuations in the real estate market, fluctuations in interest rates,
unexpected increases in development costs and other factors. If further Proposition 8 adjustments are
made by the County Assessor in future years because of declines in the fair market value of properties
caused by the lack of real estate development in the area generally, Tax Revenues may be adversely
affected and as a possible consequence its ability to repay the Bonds may be adversely affected.
Assessment Appeals. Assessment appeals may be filed by property owners seeking a reduction in the
assessed value of their property. After the property owner files an appeal, the County's Appeals Board
will hear the appeal and make a determination as to wpether or not there should be a reduction in assessed
value for a particular property and the amount of the reduction, if any. To the extent that any reductions
are made to the assessed valuation of such properties with appeals currently pending, or appeals
subsequently filed, Tax Increment Revenues, and correspondingly, Tax Revenues will be reduced. Such
reductions may have an adverse affect on the Agency's ability to pay debt service on the Bonds. As of
December 2005, appeals have been filed by 3 property qwners within the Project Area for the 2005/06 tax
year (see "THE PROJECT AREA - Assessment Appeals" herein).
Earthquake, Fire and Other Risks. Natural and man-made disasters and hazards, including, without
limitation, earthquakes, fires, floods, mudslides and other calamities, may have the effect of reducing Tax
Increment Revenues through reduction of aggregate assessed valuations within the boundaries of the
Project Area. According to the Public Safety Element of the City's General Plan, the City is located in a
seismically active region and could be impacted by a major earthquake originating from the numerous
faults in the area. The City iSf,traversed by two potentially active faults, the Sweetwater Fault and La
Nacion Fault and three inferre~ faults, the Otay River Fault, the Telegraph Canyon Fault and the San
Diego Bay- Tijuana Fault. Seismic hazards encompass potential surface rupture, ground shaking,
liquefaction and landslides. The City recently adopted its Natural Hazards Mitigation Plan. This plan
includes a hazard analysis for earthquake, flood, landslide and fire risk and is required to comply with
FEMA requirements for disaster relief funding.
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Hazardous Substances. An additional environmental condition that may result in the reduction in the
assessed value of parcels would be the discovery of a hazardous substance that would limit the beneficial
use of a property within the component areas of the Project Area. In general, the owners and operators of
a property may be required by law to remedy conditions of the property relating to releases or threatened
releases of hazardous substances. The owner (or operator) may be required 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 property within component
areas of the Project Area be affected by a hazardous substance would be to reduce the marketability and
value of the property, perhaps by an amount in excess of the costs of remedying the condition.
Certain Bankruptcy Risks. The enforceability of the rights and remedies of the Owners and the
obligations of the Agency may become subject to the following: the federal bankruptcy code and
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the
enforcement of creditors' rights generally, now or hereafter in effect; usual equitable principles which
may limit the specific enforcement under state law of certain remedies; the exercise by the United States
of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary
exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of
California and its governmental bodies in the interest of servicing a significant and legitimate public
purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if
initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or
otherwise and consequently may entail risks of delay, limitation, or modification of their rights.
Limited Obligations. The Agency has no power to levy and collect property taxes, and any property tax
limitation, legislative measure, voter initiative or provision of additional sources of income to taxing
agencies having the effect of reducing the property tax rate must necessarily reduce the amount of Tax
Increment Revenues, and consequently, Tax Revenues that would otherwise be available to pay the
principal of, interest on the Bonds.
Voter Initiatives - State Constitutional Amendment. California's voter initiative process allows
measures which qualifY for the ballot to be approved or disapproved by voters in a State of California
statewide election. Future voter initiatives could be enacted which adversely affect the Tax Increment
Revenues and, therefore, the security for the Bonds.
, '
Subordinate Lien of Bonds
Payment of the principal and interest on the Bonds is payable on a basis subordinate to the payment of the
Senior Bonds. Accordingly, the Senior Bonds and the reserve requirement for the Senior Bonds must be
maintained in each debt service year before any Tax Revenues may be set aside under the Indenture for
payment of the Bonds and any Parity Debt.
State of California Fiscal Issues
In connection with its approval ofthe budget for the 1992/93, 1993/94 and 1994/95 Fiscal Years, the State
Legislature enacted legislation which, among other things, reallocated funds from redevelopment
agencies to school districts by ihifting a portion of each agency's tax increment, net of amounts due to
other taxing agencies, to school districts for such fiscal years for deposit in the Education Revenue
Augmentation Fund ("ERAF"). Faced with a projected $23.6 bilJion budget gap for Fiscal Year 2002/03,
the State Legislature adopted and the Governor signed, AB 1768 requiring redevelopment agencies to pay
into ERAF in Fiscal Year 2002/03 an aggregate amount of $75 milJion. AB 1768 required the payment
into ERAF in Fiscal Year 2002/03 only.
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In 2003, the State Legislature adopted SB 1045 which required redevelopment agencies to make ERAF
transfers in Fiscal Year 2003/04, based on a statewide aggregate transfer by redevelopment agencies of
$135 million. SB 1045 required the Agency to transfer approximately $489,000 to ERAF in Fiscal Year
2003/04 and to make this transfer payment by May 10, 2004. In enacting SB 1045, the State Legislature
also amended Section 33333.6 of the Redevelopment Law. Section 33333.2(c) and Section 33333.6(e)
now provide that the City Council may adopt an ordinance to extend the limits required by AB 1290 or
AB 1342, as applicable, by one additional year. The City Council has adopted an ordinance under the
provisions of SB 1045.
The 2004/05 State Budget included a $1.3 billion shift of local government property taxes to the ERAF.
The 2004/05 State Budget apportioned the $1.3 billion among cities ($350 million), counties ($350
million), special districts ($350 million) and redevelopment agencies ($250 million) and limited the $1.3
billion ERAF transfer to the two fiscal years 2004/05 and 2005/06. The Agency's share of this additional
shift of property taxes was $743,000 in 2004/05 and $900,000 in 2005/06. The Agency funded its ERAF
payments in these two years by borrowing from the California Statewide Communities Development
Authority (CSCDA). The loans from CSCDA are payable over 10 years. As a trailer bill to the 2004/05
State Budget, the State Legislature adopted SB 1096, allowing redevelopment agencies to extend certain
plan limitations one year for each ERAF payment in 2004/05 and 2005/06 if certain criteria are met. The
City Council has not yet adopted an ordinance under the provisions of SB 1096.
Future legislation could be enacted and Tax Revenues available for payment of the Bonds may be
impaired.
Legislation Affecting Redevelopment Agencies
AB 1290. The California Legislature enacted Assembly Bill 1290 effective January I, 1994, as amended
by Senate Bill 732, effective January I, 1995 (as amended, "AB 1290,") which contained several
significant changes in the Redevelopment Law. Certain of the changes affected the times for incurring
and repaying loans, advances and indebtedness of redevelopment agencies. Further, the Legislature
enacted Assembly Bill 1342 effective January I, 1999 ("AB 1342,") which contains provisions that
allowed the Agency to extend certain provisions of the Redevelopment Plans, such as the time limit on
the collection of Tax Increment Revenues. The limitations currently contained in the Redevelopment
Plans of the component areas of the Redevelopment l>rojects conform to the requirements of AB 1290.
See "THE AGENCY - Plan Limitations" for a further discussion of AB 1290 andAB 1342.
SB 211. The California Legislature also enacted SB 211, Chapter 741, Statutes 2001, effective January I,
2002 ("SB 211 "). SB 211 provides, among other things, that, at anytime after its effective date, the
limitation on incurring indebtedness contained in a redevelopment plan adopted prior to January I, 1994,
may be deleted by ordinance of the legislative body. However, such deletion triggers statutory tax sharing
with those taxing entities that do not have tax sharing agreements or if not already due to any other plan
amendment. Tax sharing will be calculated based on the increase in assessed valuation after the year in
which the limitation would otherwise have become effective. See "THE AGENCY - Plan Limitations"
describing the elimination of the limitations on the Agency's incurring of indebtedness.
SB 211 also authorizes the ~endment of a redevelopment plan adopted prior to January I, 1994 to
extend for not more than 10 years the effectiveness of the redevelopment plan and the time to receive tax
increment revenues and to pay indebtedness. Any such extension must meet certain specified
requirements, including the requirement that the redevelopment agency establish the existence of both
physical and economic blight within a specified geographical area of the redevelopment project and that
any additional tax increment revenues received by the redevelopment agency because of the extension be
used solely within the designated blighted area. SB 211 authorizes any affected taxing entity, the
Department of Finance, or the Department of Housing and Community Development to request the
Attorney General to participate in the proceedings to effect such extensions. It also authorizes the
Attorney General to bring a civil action to challenge the validity of the proposed extensions.
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SB 2]] also prescribes additional requirements that a redevelopment agency would have to meet upon
extending the time limit on the effectiveness of a redevelopment plan, including requiring an increased
percentage of new and substantially rehabilitated dwelling units to be available at affordable housing cost
to persons and families of low or moderate income prior to the termination of the effectiveness of the
plan. The Agency currently has no expectations of undertaking proceedings to extend the effectiveness of
the redevelopment plan or to extend the time to receive tax increment revenues and to pay indebtedness.
SB 1045. In enacting SB ]045 (see "State of' California Fiscal Issues" above), the State LegislatUre
amended Section 33333.2 and Section 33333.6 of the Redevelopment Law. As amended, Section
33333.2(c) and Section 33333.6(e) provided that the City Council may adopt an ordinance to extend the
limits required by AB ] 290 by one additional year for redevelopment plans adopted prior to ] 994. The
City Council has adopted an ordinance pursuant to the authorization contained in SB ] 045 to extend the
limits required by AB ] 290 by one additional year with respect to all constituent redevelopment projects
except the BaYITont Amended Area, to which SB ] 045 is not applicable.
SB 1096. SB 1096 further amended Section 33333.6(e) to provide that the City Council may adopt an
ordinance to extend the limits required by AB ] 290 by an additional year for redevelopment plans
adopted prior to ] 994 for each year that a payment is made to ERAF by a redevelopment agency.
However, SB ] 096 includes criteria that must be met for redevelopment plans that have a remaining plan
life between ] 0 and 20 years. The City Council has not yet adopted such an amendment to the
redevelopment Plans pursuant to the authorization contained in SB ] 096 to extend the limits required by
AB ] 290 by one additional year, for each of the ERAF payments made in 2004/05 and 2005/06. As noted
above, this extension does not apply to the BaYITont Amended Area.
Proposed Eminent Domain Legislation. On June 23, 2005, the U.S. Supreme Court decided in Kelo v.
City of New London, ]26 S. Ct. 24 (2005) that the compensated taking of private property for the purpose
of economic development satisfies the "public use" requirement of the Fifth Amendment of the U.S.
Constitution. While many governmental agencies have previously used the power of eminent domain for
the purpose of assembling property for economic development, the U.S. Supreme Court had never prior to
Kelo considered whether the practice was constitutional under the Fifth Amendment. As a reaction to
Kelo, a number of bills have been introduced in the U.S. Congress and State Legislature which propose to
restrict the use of eminent domain by public agencies to varying degrees. In addition, a number of voter
initiatives which also propose to restrict the use of' eminent domain have been filed with the State
Attorney General to prepare for petition for signatures to qualify for the ballot. The Agency is not able to
predict whether any of such bills or initiatives, or other bills or initiatives restricting the use of eminent
domain will be passed, or if passed, whether there would be a significant effect upon the ability of the
Agency to exercise its power of eminent domain. A]thpugh the Agency has previously utilized eminent
domain proceedings for certain redevelopment projects for economic development and blight removal and
may consider utilizing eminent domain proceedings in future projects, the Agency does not anticipate any
of the bills or initiatives, even if passed, will have a material adverse effect on the Agency's
redevelopment activities within the Project Area.
Secondary Market
There can be no guarantee that tberf will be a secondary market for the Bonds or, if a secondary market
exists, that such Bonds can be sold for any particular price. Occasiona.lly, because of general market
conditions 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 ITom the original purchase price.
37
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Loss of Tax Exemption
As discussed under the caption "LEGAL MATfERS - Tax Marters" 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 Agency in violation of its covenants
contained in the Indenture. Should such an event of taxability occur, the Bonds are not subject to special
redemption or any increase in interest rate and may remain outstanding until maturity.
t
38
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LEGAL MATTERS
Enforceability of Remedies
The remedies available to the Trustee and the Owners of the Bonds upon an event of default under the
Indenture or any other document described herein are in many respects dependent upon regulatory and
judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions,
the remedies provided for under such documents may not be readily available or may be limited. The
various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the
extent that the enforceability of certain legal rights related to the Indenture is subject to limitations
imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors
generally and by equitable remedies and proceedings generally.
Approval of Legal Proceedings
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Bond
Counsel, will render an opinion which states that the Indenture is a valid and binding obligation of the
Agency and enforceable in accordance with its terms. The legal opinion of Bond Counsel will be subject
to the effect of bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights and
to the exercise of judicial discretion in accordance with general principles of equity. See "APPENDIX E"
for the proposed form of Bond Counsel's opinion.
The Agency has no knowledge of any fact or other information which would indicate that the Indenture is
not so enforceable against the Agency, except to the extent such enforcement is limited by principles of
equity and by state and federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights
generally.
Certain legal matters will be passed on for the Agency by the City Attorney, acting as Agency Genera]
Counsel and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California, as Disclosure Counsel. Fees payable to Bond Counsel and Disclosure Counsel are contingent
upon the sale and delivery of the Bonds.
Tax Matters
, '
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest on
the Bonds is excluded fTom gross income for federal' income tax purposes and is not an item of tax
preference for purposes of calculating the federal alternative minimum tax imposed on individuals and
corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt fTom State of
California personal income tax. Bond Counsel notes that, with respect to corporations, interest on the
Bonds will be included as an adjustment in the calculation of alternative minimum taxable income, which
may affect the alternative minimum taxable liability of such corporations.
Bond Counsel's opinion as to the exclusion fTom gross income for federal income tax purposes of interest
on the Bonds is based upon certa!! representations of fact and certifications made by the Agency, the
Underwriter and others and is subject to the condition that the Agency complies with all requirements of
the Internal Revenue Code of 1986, as amended (the "Code"), 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 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 Agency has covenanted to comply with all such requirements.
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Bond Counsel's opinion may be affected by actions 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. The Indenture, the First
Supplement and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be
omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses
no opinion as to the exclusion ITom gross income for federal income tax purposes of interest due on the
Bonds, if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca
Carlson & Rauth, a Professional Corporation.
The Internal Revenue Service (the "IRS") has initiated an expanded program for the auditing of tax-
exempt bond issues, including both random and targeted audits. It is possible that the Bonds wil1 be
selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a
result of such an audit of the Bonds (or by audit of similar securities).
Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded ITOm gross
income for federal income tax purposes provided that the Agency 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 certain persons. Bond Counsel expresses no opinion regarding any such tax consequences.
Accordingly, before purchasing the Bonds, all potential purchasers should consult their tax advisors with
respect to collateral tax consequences with respect to the Bonds.
The form of Bond Counsel's opinion is set forth in "APPENDIX E" hereto.
Absence of Litigation
The Agency will furnish a certificate dated as of the Delivery Date that there is not now known to be
pending or threatened any litigation restraining or enjoining the execution or delivery of the Indenture or
the sale or delivery of the Bonds or in any manner questioning the proceedings and authority under which
the Indenture was executed and delivered or the Bonds are to be issued or affecting the validity thereof.
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CONCLUDING INFORMATION
No Rating on the Bonds
The Agency has not made, and does not contemplate making, any application for a rating on the Bonds.
No such rating should be assumed based upon any other Agency rating that may be obtained. Prospective
purchasers of the Bonds are required to make independent determinations as to the credit quality of the
Bonds and their appropriateness as an investment. Should a Bondholder elect to sell a Bond prior to
maturity, no representations or assurances can be made that a market will have been established or
maintained for the purchase and sale of the Bonds. The Underwriter assumes no obligation to establish or
maintain a market for the purchase and sale of the Bonds and is not obligated to repurchase any of the
Bonds at the request of the holder thereof
The Financial Advisor
The material contained in this Official Statement was prepared by the Agency with the assistance of the
Financial Advisor, who advised the Agency as to the fmancial structure and certain other financial matters
relating to the Bonds. The information set forth herein received from sources other than the Agency has
been obtained by the Agency from sources which are believed to be reliable, but such information is not
guaranteed by the Agency or the Financial Advisor as to accuracy or completeness, nor has it been
independently verified. Fees paid to the Financial Advisor are contingent upon the sale and delivery of
the Bonds.
Continuing Disclosure
The Agency will covenant to provide annually certain financial information and operating data relating to
the Project Area by not later than March 31 each year commencing March 31, 2007, to provide the
audited Financial Statements of the Agency for the fiscal year ending June 30, 2006 and for each
subsequent fiscal year when they are available (together, the "Annual Report"), and to provide notices of
the occurrence of certain other enumerated events. The Annual Report will be filed by the Trustee on
behalf of the Agency with each Nationally Recognized Municipal Securities Information Repository
certified by the Securities and Exchange Commission'(th1: "Repositories") and a State repository, if any.
The notices of material events will be timely filed by the Agency with the Municipal Securities
Rulemaking Board, the Repositories and a State repository, if any. The specific nature of the information
to be contained in the Annual Report or the notices of material events and certain other terms of the
continuing disclosure obligation are summarized in '~APPENDIX D - FORM OF CONTINUING
DISCLOSURE CERTIFICATE." .
The Agency has never failed to comply, in all material respects, with its undertaking, to provide
continuing disclosure under the Federal Securities laws. However, the City had delivered to U.S. Bank
National Association in February 2004 its continuing disclosure filings for fiscal year ending June 30,
2003 required under Rule l5c2-12 in connection with its Certificates of Participation, Series A of 2000
(2000 Financing Project), its 2002 Certificates of Participation (police Facility Project), and its 2003
Refunding Certificates of Participation (Town Centre II Parking Project) with the intention that U.S. Bank
National Association would d~en\inate the City's continuing disclosure filings for fiscal year ending
June 30, 2003 on or before March 1, 2004. On May 19, 2004, U.S. Bank National Association had
disseminated all of the City's continuing disclosure filings for fiscal year ending June 30, 2003, and the
City has been current on all filings required pursuant to its previous continuing disclosure undertakings
since that time.
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Underwriting
E. J. De La Rosa & Co., Inc., (the "Underwriter") is offering the Bonds at the prices set forth on the inside
cover page hereof. The initial offering prices may be changed from time to time and concessions from the
offering prices may be allowed to dealers, banks and others. The Underwriter has purchased the Bonds at
a price equal to $ , which amount represents the principal amount of the Bonds
($ ), less a net original issue discount of $ , and less an Underwriter's
discount of $ L%). The Underwriter will pay certain of its expenses relating to the
offering.
Verifications of Mathematical Computations
Grant Thornton LLP will verifY from the information provided to them the mathematical accuracy as of
the date of the closing on the Bonds of (I) the computations contained in the provided schedules to
determine that the anticipated receipts from the securities and cash deposits listed in the schedules
prepared by the Financial Advisor, to be held in escrow, will be sufficient to pay, when due, the principal,
redemption premium and interest requirements of the 1994 Bonds, and (2) the computations of yield on
both the securities and the Bonds contained in the provided schedules used by Bond Counsel in its
determination that the interest with respect to the Bonds is exempt from federal taxation. Grant Thornton
LLP will express no opinion on the assumptions provided to them, nor as to the exemption from taxation
of the interest with respect to the Bonds.
Additional Information
The summaries and references contained herein with respect to the Indenture, the Bonds, statutes and
other documents, do not purport to be comprehensive or defmitive and are qualified by reference to each
such document or statute and references to the Bonds are qualified in their entirety by reference to the
. form hereof included in the Indenture. Copies of the Indenture are available for inspection during the
period of initial offering on the Bonds at the offices of the Financial Advisor. Copies of this document
may be obtained after delivery of the Bonds from the Agency at 276 Fourth Avenue, Chula Vista,
California 91910.
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References
All 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. This Official Statement is not to be construed as a
contract or agreement between the Agency and the purchasers or Owners of any of the Bonds.
Execution
The execution and delivery of this Official Statement by the Treasurer has been duly authorized by the
Redevelopment Agency of the City of Chula Vista.
\
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
By:
Treasurer
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APPENDIX A
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
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APPENDIX B
CITY OF CHULA VISTA INFORMATION STATEMENT
General Information
Chula Vista 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 know 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 Y sidro and Otay
Mesa to the south. With a January 2006 estimated population of 223,423, Chula Vista is the second
largest city in the County.
General Organization
The City of Chula Vista was incorporated as a general law city on March 17, 1911, and operates under the
council/manager form of government. It became a charter city in 1949. The City is governed by a five-
member council consisting of four members and a Mayor, each elected at large for four-year alternating
terms. The positions of City Manager and City Attorney are filled by appointments of the Council. The
City of Chula Vista currently employs approximately 1,547 staff members including sworn officers and
fire personnel.
Governmental Services
Public Safety and Welfare
The City of Chula Vista Police Department consists of 340 sworn officers and non-sworn personnel
providing patrol, traffic, animal control and investigations. There are eight fire stations located in and
operated by the City, staffed by 141 fire personnel.
Community Services
Services provided by the City include building permit and inspection, planning and zoning, landscape and
public inftastructure maintenance, street cleaning, traffic signal maintenance and municipal code
compliance.
Public Services
Water is supplied to Chula Vista by the Otay Water District and the Sweetwater Water District. Sewer
service is provided by the City. Electric power and natural gas are provided by San Diego Gas and
Electric.
Parks and Recreation
The Chula Vista Public Librarx is comprised of three individual libraries with over 432,000 volumes
available and connected by a "'ide-area network. The Library delivers books in English and Spanish,
videos and CDs, and community programming to the City's residents nearly every day of the year. The
Library contains an Office of Cultural Arts dedicated to advancing the arts and culture in a manner
designed to preserve the diverse cultures of the area.
In addition, Chula Vista provides a variety of cultural and educational facilities such as the Chula Vista
Heritage Museum, Onstage Playhouse, and the San Diego Junior Theater.
B-1
d-/82..
The Chula Vista Recreation Department provides citizens with a variety of park and recreational services
on a year round basis. Facilities include nine community and recreation centers, including a youth
community center and a senior center. The City also has two community pools open year round, 46
community and neighborhood parks, and a Memorial Bowl with seating for 700 at which the City's
Summer Concert Series is hosted. The City also has after-school programs throughout the community.
The City will open three new parks and community centers this year.
Community Facilities and Services
Public educational instruction for kindergarten through high school is provided by the Chula Vista
Elementary School District and Sweetwater Union High School District. These districts administer 42
elementary schools, one junior high school, ten middle schools, II senior high schools, one continuation
high school, one alternative program school and one charter school. Southwestern College, a two year
Community College, has enrollment of approximately 19,000. There are also four adult education
schools and 16 private schools. There are seven universities or colleges within 30 minutes commuting
distance from Chula Vista in the San Diego metropolitan area. The City is currently planning a four-year
college campus, to be located on a 400 acre property adjoining the Olympic Training Center.
There are two, acute-care hospitals, two psychiatric hospitals and three convalescent hospitals, and more
than 400 medical doctors and allied professionals in Chula Vista.
There are two daily, one weekly and one semi-weekly newspapers published and circulated in Chula
Vista.
Chula Vista has more than 60 churches and nearly 100 service, fraternal and civic organizations.
The City's mediterranean climate lends itself to many outdoor recreational activities. Chula Vista is home
to the 20,000 seat Coors Amphitheatre, the Chula Vista Nature Center, Knotts Soak City USA, four golf
courses, numerous parks and open spaces, and a harbor which includes two marinas, an RV park, and
several restaurants.
In addition, Chula Vista is the location of the United States Olympic Training Center. This is the third
such training center in the nation and the only year round fraining' facility. The center is located on a 150-
acre property donated by EastLake Development Company adjacent to the Otay Lake reservoir.
Transportation
U.S. Highways 5 '(along the coast) and 805 (inland) provide full freeway access from Chula Vista north to
San Diego and south to the Mexican border. Commuter rail service is provided by the San Diego Trolley,
a light rail system started in 1981 and II bus routes serve Chula Vista.
The City has recently introduced Chula Vista Express, a three-part pilot commuting program to promote
public transportation, carpooling, vanpooling, biking and walking to work as alternatives to driving alone.
If offers free bus service from eastern Chula Vista to downtown San Diego, a free 'shuttle from eastern
Chula Vista to the H Street TrollfY ~tation to a cash incentive for riding or joining a vanpool or carpool.
San Diego's Lindbergh International Airport is 15 minutes to the north of Chula Vista, providing air cargo
and passenger flights is served by all major airlines. Cargo shipping is available at the Unified Port of
San Diego, which serves as a transshipment facility for the region, which includes San Diego, Orange,
Riverside, San Bernardino and Imperial counties, plus northern Baja California, Arizona and points east.
B-2
07-183
Population
The fonowing table provides a comparison of population growth for Chula Vista, surrounding cities and
San Diego County between 2002 and 2006.
TABLE NO. B-1
CHANGE IN POPULATION
CHULA VISTA, SURROUNDING CITIES AND SAN DIEGO COUNTY
2002 - 2006
CHULA VISTA SURROUNDING CITIES SAN DIEGO COUNTY
Percentage Percentage Percentage
Year Population Change Population Change Population Change
2002 191,132 180,747 2,921,390
2003 200,472 4.9% 183,456 1.5% 2,972,932 1.8%
2004 208,407 4.0% 183,708 0.1% 3,011,244 1.3%
2005 216,694 4.0% 187,802 2.2% 3,039,277 0.9%
2006 223,423 3.1% 186,652 (0.6)% 3,066,820 0.9%
% Increase Between
2002 - 2006 16.9% 3.3% 5.0%
Surrounding cities include EI Cajon, Coronado and National City.
Source: State of California, Department of Finance, "E-4 Population Estimates for Cities, Counties and the State,
2001-2006, with 2000 Benchmark."
Effective Buying Income
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The most recently available effective buying income information for the City of Chula Vista, San Diego
County, the State of California and the United States is summarized in the following table.
TABLE NO. B-2
EFFECTIVE BUYING INCOME
CITY OF CHULA VISTA, SAN DIEGO COUNTY, CALIFORNlAAND UNITED STATES
2000 - 2004
Year Ch ula Vista San Diego County State of California United States
2000 $42,55~ $44,292 $44,464 $39,129
2001 42,229 44,146 43,532 38,365
2002 40,578 42,315 42,484 38,035
2003 42,389 43,346 42,924 38,201
2004 45,145 44,506 43,915 39,324
Source: Sales and Marketing Management, "Survey of Buying Power."
B-3
o? -I 84
Employment and Industry
The City is located in the San Diego-Carlsbad-San Marcos MSA labor market. Six major job categories
constitute 76.6% of the work force. They are government (16.7%), professional and business services
(16.3%), service producing (14.5%), leisure and hospitality (11.6%), educational and health services
(9.6%) and manufacturing (7.9%). The March 2006 unemployment rate in the San Diego-Carlsbad-San
Marcos area was 3.9%. The State of California March 2006 unemployment rate (unadjusted) was 5.0%.
TABLE NO. B-3
SAN DIEGO-CARLSBAD-SAN MARCOS MSA
WAGE AND SALARY WORKERS BY INDUSTRY (1)
(in Thousands)
Industry 2002 2003 2004 2005 2006
Government 223.7 222.2 216.7 217.6 218.3
Other Services 44.5 46.0 47.1 48.7 48.8
Leisure and Hospitality 127.0 136.8 141.3 144.9 151.3
Educational and Health Services 120.3 121.2 123.0 122.5 125.8
Professional and Business Services 201.7 201.8 203.5 208.8 212.7
Financial Activities 73.4 78.6 81.4 82.3 83.7
Infonnation 38.2 37.3 36.2 37.3 37.1
Transportation, Warehousing and Utilities 30.5 26.6 28.1 28.5 28.5
Service Producing
Retail Trade 134.9 137.0 141.1 144.4 145.2
Wholesale Trade 40.9 41.4 41.4 42.7 45.0
Manufacturing
Nondurable Goods 28.0 26.6 26.4 25.0 25.3
Durable Goods 87.1 ' , 79.8 77.4 79.7 78.5
Goods Producing
Construction 73.9 76.2 84.8 88.5 93.7
Natura1 Resources and Mining ~ ~ ----.M ----.M ----.M
Total Nonfann 1,224.4 1,231.8 1,248.8 1,271.3 1,294.3
Fann 10.5 ----1.Q.2 ---1.!d ---1Q.,1 --1.M
Total (all industries) ~ ~ ~ ~ 13047
(I) Annually, as of March.
Source: State of California Employment Development Department, Labor Market Infonnation Division, "Industry
Employment & Labor Fo"(e - I>y month March 2005 Benchmark"
B-4
eX-I S'S
The major employers operating within the City and their respective number of employees as of June 30,
2005 are as follows:
Name of Com pan v
Rohr DBA Goodrich Aerospace
Sharp Chula Vista Medical Center
Scripps Memorial Hospital
United Parcel Service
Emplovment
1,903
1,410
890
637
400
340
285
284
275
250
Walmart 2291
Sears Roebuck & Co.
Costco Wholesale Corp. #781
ATC Vancom Inc.
Costco Wholesale Corp. #460
Walmart Store #3516
Source; City of Chula Vista.
Commercial Activity
Type of BusinesslProduct
Aerospace Manufacturing
Hospital
Hospital
Parcel Delivery Service
General Merchandise
General Merchandise
General Merchandise
General Merchandise
General Merchandise
General Merchandise
The following table summarizes the most recently available published information of volume of retail
sales and taxable transactions for the City of Chula Vista for 2000 through 2004 (the most recent year for
which statistics are available). The City's reported sales tax has increased 20% since 2003. This increase
is primarily due to continued growth in the eastern section of the City, which led to the opening of
significant new commercial developments.
TABLE NO. B-4
CITY OF CHtILA VISTA
TOTAL TAXABLE TRANSACTIONS
(in Thousands)
2000 - 2004
Total Taxable
Retail Sales Retail Sales Transactions Issued Sales
Year ($000' s) % Change Permits ($OOO's) % Change Permits
2000 $1,40 I ,40 I 1,780 $1,608,290 3,609
2001 1,463,409 4.4% 1,823 1,688,665 5.0% 3,690
2002 1,513 ,809 \3.4% 1,883 1,729,158 2.4% 3,737
2003 1,642,889 8.5% 2,092 1,857,233 7.4% 3,921
2004 1,845,573 12.3% 2,199 2,073,340 11.6% 4,166
Source: State Board of Equalization, "Taxable Sales in California. "
B-5
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The following table compares taxable transactions for tbe City of Chula Vista and surrounding cities for
tbe years 2000 through 2004 (the most recent year for which statistics are available).
TABLE NO. B-5
CHANGE IN TOTAL TAXABLE TRANSACTIONS
CHULA VISTA AND SURROUNDING CITIES
(in Tbousands)
2000 - 2004
% Cbange from
City 2000 2001 2002 2003 2004 2000 - 2004
CHULA VISTA $1,608,290 $1,688,865 $1,729,158 $1,857,233 $2,073,340 28.9%
EI Cajon 1,597,168 1,725,001 1,817,568 1,939,482 2,103,099 31.7%
Coronado 172,631 168,147 175,648 179,418 188,172 9.0%
National City 1,179,1ll 1,231,562 1,301,407 1,389,G42 1,551,301 31.6%
Source: State Board of Equalization, "Taxable Sales in California. "
Taxable transactions by type of business for tbe City of Chula Vista for 2000 through 2004 (the most
recent year for which statistics are available) are summarized in Table No. B-6.
TABLE NO. B-6
CITY OF CHULA VISTA
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in Tbousands)
2000 - 2004
2000 2001 2002 2003 2004
Retail Stores
Apparel Stores $ 66,598 $ 61,937 $ 67,035 $ 67,114 $ 82,165
General Merchandise Stores 495,679 524,942 525,423 553,979 609,028
Food Stores 90,487 92,224 99,897 103,155 106,056
Eating/Drinking Places 155,583 164,417 169,892 188,675 213,412
Home Furnishings and
Appliances 66,365 67,827 74,255 78,561 87,203
Building Materials and
Farm Implements 102,370 97,897 91,235 100,504 142,321
Auto Dealers/Suppliers 145,923 151,812 156,872 178,733 191,185
Service Stations I 121 ,244 119,050 123,636 148,318 174,968
Other Retail Stores 157.152 183.303 205.564 223.850 239.235
Total Retail Stores 1,401,401 1,463,409 1,513,809 1,642,889 1,845,573
All Other Outlets 206.889 225.256 215.349 214.344 227.767
Total All Outlets $1 608 290 $1 688 665 $1729158 $1 R57 233 $2 073 340
Source: State Board of Equalization, "Taxable Sales in California. "
B-6 ~-187
Building Activity
The following table swnmarizes building activity valuations for the City of Chula Vista for the years 2001
through 2005.
TABLE NO. B-7
CITY OF CHULA VISTA
BillLDING ACTIVITY AND VALUATION
(in Thousands)
2001 - 2005
2001 2002 2003 2004 2005
Residential $482,131,012 $467,349,014 $569,435,026 $703,847,604 $440,321,520
Non-Residential 91.667.827 81.298.075 92.855.876 123 793.323 111.908.460
Total Valuation $573 79R R39 $54R 647 /lR9 $66229/1 9112 $R27 64/1 927 $552 229 9R/I
Total Permits ~ ~ ~ ~ ~
Source: City of Chula Vista
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APPENDIX C
AGENCY AUDITED FINANCIAL STATEMENTS FOR THE
FISCAL YEAR ENDING JUNE 30, 2005
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
[to be provided by Disclosure Counsel]
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APPENDIX E
FORM OF BOND COUNSEL OPINION
[to be provided by Bond Counsel]
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APPENDIX F
SPECIMEN MUNICIPAL BOND INSURANCE POLICY
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APPENDIX G
BOOK-ENTRY-ONLY SYSTEM
The Depository Trust Company ("DTC"), New York, NY, 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 certificate will be issued for each maturity of the Bonds, each in the aggregate
principal amount of such maturity, and will be deposited with DTC.
DTC 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 17 A of the Securities Exchange Act of
1934. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-U.S. equity
issues, corporate and municipal debt issues, and money market instruments trom 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 wholly-owned subsidiary of The Depository Trust & Clearing
Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and
Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and
Emerging Markets Clearing Corporation (NSCC, FlCC, and EMCC, also subsidiaries ofDTCC), as well
as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National
Association of Securities Dealers, Inc. 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 Standard & Poor's highest rating: AAA. The DTC Rules applicable to
its Participants are on file with the Securities and Exchange Commission. More information about DTC
can be found at www.dtcc.com and www.dtc.org.
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.trom 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, trom 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 certificates 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 transfe~, 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 such Bonds are credited, which mayor may not be the Beneficial
Owners. The Direct and Indirect Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
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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.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being
redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in
such issue 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 Procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to the Agency 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).
Principal, premium (if any), and interest 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
Agency or the Trustee, 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
registered in "street name," and will be the responsibility of such Participant and not of DTC, the Agency,
or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time.
Principal, premium (if any), and interest payments with respect to the Bonds to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of the Agency
or the Trustee, 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.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to the Agency or the Trustee. Under such circumstances, in the event that a successor
depository is not obtained, Bond certificates are requir~d to be printed and delivered.
The Agency may decide to discontinue use of the system of book-en try-only transfers through DTC (or a
successor securities depository). In that event, Bond certificates will be printed and delivered in
accordance with the provisions of the Indenture.
The information in this section concerning DTC and DTC's book-entry system has been obtained from
sources that the Agency believes to be reliable, but the Agency takes no responsibility for the accuracy
thereof.
\
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rORPORA1ION
CHUL/, VIST/,
CVRC Board
Staff Report - Page 1
Item No. 3
DATE:
June 22, 2006
TO:
CVRC Board Directors
FROM:
//
Jim Thomson, Interim Chief Executive Officer 'Ii
Amanda Mills, Housing Manager~~VV-
Consideration of Exclusive Negotiating Agreement and Financial Assistance
for an Affordable Rental Housing Development within the Merged
Redevelopment Area
VIA:
SUBJECT:
Project Area: Merged
Agreement: Exclusive Negotiating Agreement (ENA)
Developer: Wakeland Housing and Development Corporation
Project Site: 1501 Broadway (Tower Lodge Motel Site)
Project Type: Affordable Rental
Project Description: 1-3 bedroom affordable rental units for households earning 30%
to 60% of the area median income
BACKGROUND:
The Community Development Department has been looking at new opportunities for the
development of affordable housing within the City's redevelopment project areas to meet
critical housing needs for the community and to advance the Redevelopment Agency's
goals. Currently vacant, the former Tower Lodge Motel, located at 1501 Broadway,
represents an opportunity to remove an existing blighted property and to provide new
housing opportunities for predominately very low-income households. Wakeland Housing
and Development Corporation (Wakeland) has been pre-qualified by staff for the
redevelopment of this 1.35 acre site into an affordable family rental project with 1, 2 and 3
bedroom units for households earning 30 to 60 percent of the area median income (AMI).
In order to determine the feasibility of this project, Wakeland must complete a number of
reports, studies and analyses. To facilitate the development of affordable housing at this
location, staff is proposing entering into an Exclusive Negotiating Agreement (ENA) with
.3-(
Staff Report - Item No.3
June 22, 2006
Page 2
Wakeland and providing financial assistance, in the form of a predevelopment loan, for the
completion of the project feasibility studies. Staff is, therefore, presenting the attached
ENA for consideration and a Predevelopment Loan Agreement for $200,000 to cover those
necessary soft costs related to the feasibility analysis.
The following provides a brief overview of the site, information about Wakeland, and
issues regarding the project.
ENVIRONMENTAL REVIEW:
The Environmental Review Coordinator 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; therefore,
pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to
CEQA. Thus, no environmental review is necessary.
RECOMMENDATION:
Staff recommends that the Chula Vista Redevelopment Corporation adopt the following
resolutions:
1) Approving and authorizing the Chair to execute an Exclusive Negotiating
Agreement with Wakeland Housing and Development Corporation for an
affordable rental project located within the Merged Redevelopment Project Area of
the City of Chula Vista, and
2) Approving a recommendation that the Redevelopment Agency appropriate up to
$200,000 of Redevelopment Low and Moderate Housing Set-Aside Funding for a
predevelopment loan to Wakeland, and execute any agreements necessary
Staff recommends that the Redevelopment Agency adopt a resolution [A] Approving and
executing a Predevelopment Loan Agreement with Wakeland Housing and Development
Corporation for the development and operation of an affordable rental housing project to
be located at 1501 Broadway in the City of Chula Vista and authorizing the Chairman of
the Redevelopment Agency to execute said Agreement; and, [B] Approving the
appropriation of $200,000 from the Redevelopment Agency's Low and Moderate Income
Housing Set-Aside Fund for a predevelopment loan to Wakeland.
BOARDS/COMMISSION RECOMMENDATION:
On May 24, 2006, the Housing Advisory Commission recommended that the
Redevelopment Agency provide financial assistance in the form of a $200,000
'"
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Staff Report - Item No.3
June 22, 2006
Page 3
predevelopment loan and additional financing in an approximate amount of $5 million for
the development and operation of an affordable housing development.
DISCUSSION:
Affordable Housing Requirements in a Redevelopment Area
Redevelopment agencies playa vital role in the funding and production of affordable
housing. Within adopted project areas, redevelopment agencies receive a higher level of
property tax revenues that would normally be allocated to the state and other taxing
entities. In exchange, the state requires that 20 percent of all of these "tax increment"
revenues be set aside (Redevelopment Set-Aside) for the development of affordable
housing and funds are to be expended in proportion to the needs of very low, low and
moderate income households. To ensure that these monies are in fact used for the
production of affordable housing, the state requires that 15 percent of all new residential
units built in an adopted project area be restricted to households of very low- and low- and
moderate incomes. Based upon these requirements, of critical importance is the provision
of housing opportunities specifically for very low-income households.
The Council's/Agency's leadership to proactively plan for affordable housing opportunities
in the redevelopment project areas is critical to meeting the Redevelopment Agency's legal
obligations. The timely production of affordable units is a priority because of the nearing
expiration dates of the various project areas. .
Development Proposal
Wakeland is interested in developing approximately 40 units for an affordable, family
rental project on the former Tower Lodge Motel site located at 1501 Broadway within the
Merged Chula Vista Redevelopment Project Area. It is proposed that the project will serve
primarily large families (3 bedroom units) and predominately extremely low and very low-
income households (30 to 50 percent of the AMI), meeting the City's critical housing
needs and the expenditure and production requirements of the Redevelopment Agency for
very low income housing. Based upon FY 2006 HUD Income limits, monthly rents would
average from approximatel\ $449 to $610.
Site
The property located at 1 SOl Broadway, just north of Anita Street, currently has a closed
and blighted motel on the site. The motel has a long history of community complaints,
code violations and police calls for service. In 2004, Tower Lodge had the highest calls for
service per room ratio in the City according to the Chula Vista Police Department, six
times the median. Dating back to 1987, the motel has been issued numerous Notices of
..3 -..E
Staff Report - Item No.3
June 22, 2006
Page 4
Code Violations. On April 29, 2005, the Tower Lodge Motel was posted as a substandard
building, all tenants were ordered to vacate, and the owner secured the building, which
has remained vacant since that time.
The property has a General Plan designation of Mixed Use Residential (MUR) and is within
the South Broadway District. The zoning for the property is Thoroughfare Commercial
with a Precise Plan modifier (CTP) and is currently inconsistent with the General Plan
designation. To implement this designation, a rezone of the property will be required to
allow land uses compatible with the MUR designation (residential, retail and office). A
mix of compatible and complementary land uses are envisioned for the district, with the
MUR designation contemplating a mix of land uses within one development proposal/site.
Development of anyone of these land uses separately could still be in keeping with the
General Plan vision and policies for the district. This approach would constitute a
"horizontal mixed use" and may be deemed acceptable in this area. Through the
application for rezoning of the property, the development proposal and the desire to
provide horizontal mixed use in this area would be evaluated for consistency with the
General Plan. For more information regarding the proposed development site, please refer
to Exhibit A, as attached.
Financial Assistance
Financing and development of this project is proposed as a joint private-public partnership.
Wakeland is proposing the use of Low Income HQusing Tax Credit financing to support the
majority ($7.1 million) of the estimated $13.8 million cost of constructing the project.
At this time, staff is recommending the appropriation of a maximum of $200,000 in
Redevelopment Low/Moderate Income Housing Funds to fund the predevelopment costs
of the project. Predevelopment expenses are an eligible use of Redevelopment Set-Aside
funding, provided that the affordable units are actually constructed.
The Predevelopment Loan will be made on the following loan terms:
1. No interest shall accrue upon the loan.
2. The Predevelopment Ldan'shall be due and payable if Wakeland and the Agency are
not able to enter into a subsequent Development and Loan Agreement within the
Negotiating Period as set forth in the attached ENA. Should Wakeland execute such
agreement for the development of the site, repayment of the Predevelopment Loan
shall be set forth within this Agreement. The Predevelopment Loan repayment is
unsecured.
..3 - c.j
Staff Report - Item No.3
June 22, 2006
Page 5
3. Loan proceeds shall be used to pay for actual and reasonable costs related to the
preparation of plans, studies, and reports for the project site.
As stipulated within the Agreement, Wakeland will be responsible for repayment of any
and all predevelopment funds expended in relation to the project in the event that the
affordable units are not constructed. If an affordable project is successfully completed, the
Agency may roll the predevelopment loan into any loan that may be provided by the
Agency.
Pending completion of due diligence, Wakeland is estimating a remaining financing gap of
$5.24 million. To close this gap, Wakeland has committed to deferring part of their fee as
developer of the project. Additionally, they are anticipating a request for direct financial
assistance of approximately $5,000,000 or $125,000 per unit from the Redevelopment
Agency to close this financing gap. The Redevelopment Agency will consider this request
at such time as a preliminary evaluation of the property and project has been completed
and financing costs have been more clearly identified.
Agency financial support will be essential to the successful completion of an affordable
project on this site. In recent years, land and construction costs have risen dramatically.
As an example, in September 2005, the City approved additional financing for the 40-unit
Seniors on Broadway development due to significant cost increases, amounting to a total
assistance level of approximately $90,000 per ~nit.
Affordable housing developments are not able to adapt to higher costs. These
developments are limited in their ability to generate income based upon the restricted
rents. In turn, this affects Wakeland's ability to qualify for additional financing and absorb
higher construction costs. With the proposed development targeting deeper affordability
levels of extremely low and very low income households, the project will not be able to
generate sufficient revenues to support the predevelopment and development costs.
While the subsidy anticipated is high, this development provides the Agency with an
opportunity to commit and expend redevelopment funds on an affordable housing
development that is locate~ in a redevelopment project area and which assists extremely
low and very low income. Both of these factors are noteworthy given the Agency's
requirement to provide 6 percent of the housing within Redevelopment Project Areas as
affordable to very low income households (California Health & Safety Code 9 33413) and
to expend its Redevelopment Low and Moderate Income Set-aside funds in relation to the
community's need for very low income households and the population under the age of
65 (California Health & Safety Code 9 33334.4).
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Staff Report - Item No.3
June 22, 2006
Page 6
Article XXXIV
Article XXXIV of the California Constitution (Article 34) requires that voter approval be
obtained before any "state public body" develops, constructs or acquires a "low rent
housing project". This project is applicable under Article XXXIV of the State Constitution.
Proposition C, passed on April 11, 1978, authorized the development, construction and
acquisition of 400 units of housing for persons of low-income in the City of Chula Vista.
Currently, there are 66 units remaining as authorized under Proposition C. The restriction
of the approximately 40 units will be counted towards this remaining authorization thus
leaving the City with only 26 remaining units before the City would need to consider
taking the issue of low-income housing back to the voters. In previous projects the Agency
has only restricted a portion of the units within a project and therefore not triggered the
Article XXXIV provisions. The Agency will restrict all units within the proposed
development to satisfy its affordable housing obligations under Health and Safety Code
Sections 33413 and 33334.4.
Developer Qualification
As previously presented to the CVRC, on May 11, 2006, staff described the newly
established ENA process which seeks to match highly reputable developers with -a site
rather than looking at specific development proposals. The Agency is interested in finding
quality developers with a proven track record who are committed to working with Chula
Vista and understanding Chula Vista's interests, history, and vision for the future. By
selecting highly reputable developers with experience building and designing in an urban
market and matching them with appropriate sites, the end result will be a development
that better meets the goals of the City, and Agency and community. Although Wakeland
approached the Agency after getting the property under contract, staff has pre-qualified
Wakeland based on the required qualification criteria and the suitability of the developer's
qualifications to the respective development site, as summarized below. For a complete
Developer biography and list of projects please refer to Exhibit B.
Wakeland has significant experience in developing in-fill affordable housing in
redevelopment areas such as a 74-unit project ("Lillian Place") in the East Village and
("Town Square Row Homes") a 6-unit, for-sale project in downtown National City.
Wakeland is well qualified1antj has demonstrated their desire and commitment to partner
with the City and Chula Vista Redevelopment Corporation, to develop a project that meets
the City's affordable housing objectives and to work cooperatively with the public in the
design of the project.
.3 -(p
Staff Report - Item No.3
June 22, 2006
Page 7
Exclusive Negotiating Agreement
An ENA is a road map for the evolution of a redevelopment project. ENAs establish a
predictable and agreed upon process, timeline, and parameters for developers and the
CVRC to cooperatively design and process redevelopment proposals that meet the goals
and objectives of both parties. For the CVRC, the ENA process strategically evolves a
proposal from initial concept to a defined project that is consistent with relevant and
applicable plans and policies, aligned with community character, and designed to meet
the City's strategic and economic goals for public amenities and community revitalization.
As crahed, the ENA generally describes the proposed development site, establishes a
timeline for milestones and public participation, defines the negotiation period, and
establishes a maximum predevelopment loan amount. The ENA timeframe is
approximately 300 days, which encompasses the predevelopment work through formal
review and approval.
CONCLUSION
The approval of an ENA between Developer and the CVRC is the first step in the process
for the cooperative development of the Tower Lodge Motel site. As proposed, the
development of affordable housing on the site will meet a critical housing shortage of
rental housing for extremely low and very low income households and remove a currently
blighting influence on the community. The Agency's participation will fulfill its
requirements to expend its funds and produce housing for very low-income households. If
predevelopment financing is approved, staff will begin working with the development
team to commence the predevelopment tasks, including the pre-design public workshop.
If discussions, negotiations, and tasks under the ENA process are successful, the Agency
and Wakeland may consider entering into a Development and Loan Agreement or Owner
Participation Agreement (OPA) for construction of the approved development project and
the Predevelopment Loan may be incorporated into this Agreement. If no Agreement is
executed, the Predevelopment Loan shall be immediately due and repaid. Under a
successful process, the overall timeframe for construction and completion of a
development project is bEtWeen 18 to 36 months from execution of the Development
Agreement or OPA.
FISCAL IMPACT:
The Predevelopment Loan of $200,000 will be set aside from the available balance in
Redevelopment Agency's Low and Moderate-Income Housing Set-aside Fund and
appropriated in the Agency's Budget. Should Wakeland and the Agency enter into a
..3-7
Staff Report - Item No.3
June 22, 2006
Page 8
subsequent Development and Loan Agreement within the Negotiating Period as set forth
in the attached ENA, the Predevelopment Loan may be incorporated into this Agreement.
The Predevelopment Loan shall be immediately due and repaid if no Development and
Loan Agreement for the site is executed. Any repayment of the loan will be deposited into
the Redevelopment Agency's Low and Moderate Income Housing Set-aside fund for
further use in providing affordable housing programs.
EXHIBITS:
A. Map of Proposed Site
B. Wakeland Housing and Development Corporation Biography and Projects
PREPARED BY: Leilani Hines, Senior Community Development Specialist
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EXHIBIT "A"
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Wakeland Housing and Development Corporation
Exhibit B - Staff Biographies
Ken Sauder, President
Ken Sauder is president of Wakeland Housing and Development Corporation. He was the
organization's founding executive director in 1999. Under Mr. Sauder's leadership and assisted
by a strong staff and board of directors, Wakeland has grown its development portfolio to 4,000
units in 19 projects throughout California and Washington.
Mr. Sauder has over 25 years of community development and affordable housing experience,
working exclusively for non-profits, both internationally and nationally. He has extensive
expertise in working with a variety of funding sources - tax credits, tax exempt bonds,
municipal bonds, HOME funds, CDBG funds, set-aside money and foundation funds.
He previously held positions as director of community development for South Bay Community
Services; founding director of Latin American Program for Habitat for Humanity International;
and the first director of Tijuana-San Diego Habitat for Humanity. Mr. Sauder holds a master's
degree in city planning from the University of Pennsylvania, and a bachelor's degree in social
work from Temple University. He is active in a variety of organizations promoting affordable
housing and serves on the board of Directors fQ~ the San Diego Housing Federation.
Barry Getzel, Senior Project Manager
Barry Getzel has over 25 years of experience in real estate acquisitions, development and
finance, including 18 years in community development and affordable housing. He has worked
as: director of a $200 million downtown redevelopment project for the Oty of Seattle,
Washington; Director of Acquisitions for Home Capital, once a major investor in market-rate
housing development throughout the United States; a planning and low-income housing tax
credit consultant; and as Southwest manager of community development lending for Bank of
America, where he oversaw\J1e lending of over $150 million to affordable housing developers
in Southern California, Arizona, New Mexico and Texas. At Wakeland, Mr. Getzel is
responsible for new project feasibility analysis, conceptualization and design, finance and
development.
J-IO
Wakeland Housing and Development Corporation
Exhibit B - Staff Biographies
Page 2
Emily Monahan, Director of Asset Management
Emily Monahan has nearly 10 years experience in the affordable housing industry and oversees
a diverse project portfolio at Wakeland. Her experience includes property management,
construction management, asset management, project management and resident services. She
worked for several years as a real estate development coordinator for a non-profit developer in
central California. She spent two years as a regional manager for a well-known San Diego
property management firm. Ms. Monahan has a strong background in the development and
oversight of tax-credit and bond-financed projects. She holds a bachelor's degree in social
science.
Rebecca Davis, Project Manager
Ms. Davis serves as a project manager for several of Wakeland developments. Before coming to
Wakeland she spent six years as an associate regional planner at the San Diego Association of
Governments (SANDAG), where she gained expertise in affordable housing issues, including
the preparation of housing elements for local jurisdictions and the detemunation and allocation
of regional housing needs. She also developed and implemented an outreach program to
educate elected officials, community members <3?d,the media about affordable housing. Ms.
Davis has also worked as development director at the Center on Policy Initiatives, a social and
economic justice research and policy development non-profit, and project manager at United
Indian Nations CDC, a non-profit working to increase culturally-based community organizing
and development in the Bay Area's American Indian community. She received her masters
degree in city and regional planning from the University of California, Berkeley in 1998, where
she focused on community and economic development.
Tracy Borhart, Accounting Manager
Tracy Borhart provides fiscakmanagement for Wakeland's operations. Previously, she served
as assistant director of finance for Hospice of the Comforter, a community-based, non-profit
hospice serving terminally ill patients in Central Florida. Ms. Borhart has 16 years of
accounting experience. Her experience includes budgeting, financial analysis and project
management. She holds a bachelor's degree in accounting.
..,3-11
Wakeland Housing and Development Corporation
Exhibit B - Staff Biographies
Page 3
Shonna Irving, Resident Services Coordinator
Shonna Irving has 13 years of experience working with youth, families and seniors. She
manages multiple resident services programs for Wakeland properties, designing programs and
activities that reflect the educational, cultural and social needs of each affordable housing
community. Her broad experience in education and community development helps generate
and strengthen partnerships that bring resources to the residents, including ESL and GED
preparation, computer training, job skill development classes, health literacy and onsite medical
support services. Her focus is to support residents as they become self sufficient in school,
home and work environments.
Doreen Kartes, Project Administrator
Doreen Kartes. has many years experience in tax credit and bond applications. She is the contact
person responsible for packaging tax credit/bond and other funding applications. Ms. Kartes is
also responsible for administrative office operations. She has been involved in the development
field since 1985, working with Starboard Development Corporation for 10 years and Catellus
Developm"eht Corporation for three years.
t
J - 1.2
WAKELAND HOUSING AND DEVELOPMENT CORPORATION
TOWN SQUARE ROWHOMES
. Town Square Rowhomes is located in the "Brick Row" Neighborhood at 9th
Street and "A" Avenue in National City.
. Town Square Row Homes is a new construction project of 6 detached homes. The
homes were sold to families earning approximately 90% area median income.
Two units are income restricted at 120% area median income.
. The development is in the Redevelopment Area of National City, and is consistent
with the objective of the City's Redevelopment Plan - to promote home
ownership.
. The units are approximately 1,500 square feet, three bedrooms and three baths.
. Each unit is based on a three story neo- Victorian design that includes a large room
for a ground level business use, if desired by the owner.
. The property was developed by Town Square Rowhomes, LLC.
. Sources of funds for the development are Low-Income Housing Fund, National
City Community Development Commission, with conventional take-out financing
being offered to the homeowners through Wells Fargo Bank.
Construction began in July 2001, and was completed in June, 2002.
..3-13
WAKELAND HOUSING AND DEVELOPMENT CORPORATION
BEYER COURTYARDS
-, ,
/
,
. Located at 3300 Beyer Blvd in San Ysidro.
. New construction development of 60 units, primarily targeting very low income
households.
. 2 and 3 bedroom rental units.
. Financing sources are Bonds and 3% Tax Credits.
. Construction was recently completed in April 2006.
..3-/'1-
WAKELAND HOUSING AND DEVELOPMENT CORPORATION
LILLIAN'S PLACE
. Located at 1401 J Street in Downtown San Diego.
. 4 story (on J Street) and 3 Story new structures, plus a rehabilitated historic 2 story
building (on the comer of 14th and J), surrounding a series of connected courtyards and
recreation spaces.
. 74 units with a planned unit mix as follows: 23 one bedroom, 27 two bedroom, 23 three
bedroom and I manager's unit. Three of the 3 bedroom units will be three story
townhomes, suitable as a live /work environment, targeted to 110% AMI households.
. A community center will include the property manager's office, a computer learning
center and and other resident services activities.
. A separate room will be set-aside to show an exhibit commemorating the history of the
site (to be open to the public on a scheduled basis)
. Lillian Place is ajoint venture between Wakeland and Interfaith Housing Assistance
Corporation.
. Financing sources are the City of San Diego (NOF A funding), 9% tax credits, Affordable
Housing Program funding, Wells Fargo Bank construction loan, CCRC permanent
financing.
. Construction began in November 2004 and is expected to be completed by Summer 2006.
-3 -IS-
RESOLUTION NO.
RESOLUTION OF THE CHULA VISTA REDEVELOPMENT
CORPORATION RECOMMENDING [A] APPROVAL OF A
PREDEVELOPMENT LOAN AGREEMENT BY AND BETWEEN THE
REDEVELOPMENT AGENCY AND WAKELAND HOUSING AND
DEVELOPMENT CORPORATION FOR THE DEVELOPMENT OF AN
AFFORDABLE RENTAL HOUSING DEVELOPMENT TO BE LOCATED
AT 1501 BROADWAY IN THE CITY OF CHULA VISTA AND
AUTHORIZING THE CHAIRMAN OF THE REDEVELOPMENT AGENCY
TO EXECUTE SAID AGREEMENT; AND [B] APPROPRIATION OF
$200,000 FROM THE UNAPPROPRIATED BALANCE IN THE LOW AND
MODERATE INCOME HOUSING FUND FOR SAID PREDEVELOPMENT
LOAN TO WAKELAND HOUSING AND DEVELOPMENT
CORPORATION
WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6
authorize and direct the Redevelopment Agency of the City of Chula Vista (the "Agency") to
expend a certain percentage of all taxes which are allocated to the Agency pursuant to Section
33670 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 applicable law the Agency has established a Low and
Moderate Income Housing Fund (the "Housing Fund''); and
WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out
its affordable housing activities, the Agency 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, pursuant to Section 33413(b), the Agency is required to ensure that at
least 15 percent of all new and substantially rehabilitated dwelling units developed within a
project area under the jurisdiction of the Agency by private or public entities or persons other
than the Agency shall be available at affordable housing cost to persons and families of low or
moderate income; and
WHEREAS, WJeland Housing and Development Corporation ("Developer")
proposes to construct an affordable rental housing development targeting predominately
extremely low and very low households at 50 percent or less of the Area Median Income (AMI)
to be located at 1501 Broadway within the Merged Chula Vista Project Area ("Project"); and
WHEREAS, in order to 'carry out and implement the Redevelopment Plan for the
Agency's redevelopment projects and the affordable housing requirements and goals thereof, the
..3-1'-
Page 2
CVRC Resolution No.
Agency and City propose to enter into an Agency Predevelopment Loan Agreement (the
"Predevelopment Loan Agreement") with the Developer, pursuant to which the Agency would
make a predevelopment loan to the Developer (the "Predevelopment Loan"), and the Developer
would agree to develop the Project for occupancy of all apartment units in the Project to very
low and lower income households and rent those units at an affordable housing cost; and
WHEREAS, the Agency Predevelopment Loan Agreement will leverage the
investment of the Agency and City by requiring the Developer to obtain additional financing for
the construction and operation of the Project through such resources as "9% Tax Credits" to be
generated by the Project; and
WHEREAS, the Project is located within the Agency's Merged Chula Vista
Redevelopment Project Area and development and operation of the Project pursuant to the
Agency Agreement would benefit the Agency's redevelopment project areas by providing
affordable housing for persons who currently live and work within those redevelopment project
areas; and
WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and
Safety Code Section 33490, which sets forth the objective of providing housing to satisfy the
needs and desires of various age, income and ethnic groups of the community, and which
specifically provides for the new construction of rental housing units through Agency assistance;
and
WHEREAS, the Agency Agreement furthers the goals of the Agency to facilitate the
creation of affordable housing which will serve the residents of the neighborhood and the City as
set forth in the Implementation Plan; and , '
WHEREAS, the Agency have duly considered all terms and conditions of the proposed
Predevelopment Loan Agreement and believes that this Agreement is in the best interests of the
Agency and the health, safety, and welfare of its residents, and in accord with the public
purposes and provisions of applicable State and local law requirements;
NOW, THEREFORE, THE CHULA VISTA REDEVELOPMENT CORPORATION
DOES RESOLVE AS FOLLOWS:
Section 1. The Chula Vista Redevelopment Corporation hereby fmds that the use of
funds from the Agency's Lllw and Moderate Income Housing Fund pursuant to the
Predevelopment Loan Agree~ent, to facilitate the development and operation of real property
will be of benefit to the Agency's redevelopment project areas for the reasons set forth above.
Section 2. The Chula Vista Redevelopment Corporation hereby recommends the [A]
approval of the Agency Predevelopment Loan Agreement in substantially the form presented to
the Agency, subject to such revisions as may be made by the Agency Executive Director/City
-3-f7
Page 3
CYRC Resolution No.
Manager or his designee subject to the review and approval of the Agency/City Attorney, with
Wakeland Housing and Development Cmporation for the development of an affordable rental
housing development located at 1501 Broadway and; [B] appropriation of $200,000 from the
unappropriated balance in the Low And Moderate Income Housing Fund for said
Predevelopment Loan to Wakeland.
PRESENTED BY
APPROVED AS TO FORM BY
Dana M. Smith
Secretary
Ann Moore
General Counsel
Lhines (J:ICOMMDEVlCVRClCVRC MeetingslStaffReports\2006\06-22-06IWakelandICVRC Reso Wakeland Loan 2006.06.22.doc)
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EXCLUSIVE NEGOTIATING AGREEMENT
This Exclusive Negotiating Agreement ("Agreement"), dated as of this day of June
2006 ("Effective Date"), is made by and between the Chula Vista Redevelopment Corporation, a
California nonprofit public benefit corporation ("CVRC), on behalf of and for the City of Chula Vista
Redevelopment Agency, a public body, corporate and politic ("Agency") and Wakeland Housing and
Development Corporation, a California non-profit corporation ("Developer"), with reference to the
following facts:
RECITALS
In furtherance of the objectives of the California Community Redevelopment Law, the
Agency has undertaken a program for the redevelopment of certain areas within the City of Chula Vista
("City"), and in connection therewith is undertaking and carrying out activities for redevelopment in the
Town Center I Redevelopment Project Area ("Project Area") pursuant to and in furtherance of the
redevelopment plan for the Project Area ("Redevelopment Plan").
To assist in the carrying out of planning and redevelopment activities the City of Chula
Vista created the Chula Vista Redevelopment Corporation ("CVRC"). Pursuant to Chula Vista
Municipal Code Section 2.52, the CVRC is authorized to enter into this Agreement on behalf of the
Redevelopment Agency.
The subject matter of this Agreement concerns that certain real property located within the
Project Area as depicted on Exhibit "N hereto ("Property"). The Property is located at 1501 Broadway,
known as the Tower Lodge Motel site. The site totals approximately 1.35 acres.
The Developer is proposing to develop a residential development ("Project") and desires to
obtain predevelopment funding from the Agency.
The Agency has received an unsolicited proposal for the redevelopment of the
Property from Developer, who is a qualified and interested developer. Therefore, the Agency
desires to enter into this Agreement with the Developer with the objective of determining the
feasibility of the proposed project and considera.tion of entering into a mutually acceptable
Development and Loan Agreement for the development of the Property consistent with the
terms and conditions of this Agreement at the earliest practical date.
The Developer anticipates that, following execution of this Agreement and through the
period of negotiation and preparation of a Development and Loan Agreement with respect to the
Project, it will devote substantial time and effort in preparing plans, preparing project proformas,
contacting financial institutiofJ.s, engaging appropriate consultants, and meeting with the City and
various other necessary third j}arties in connection with the proposed Project, and in negotiating and
preparing a Development and Loan Agreement consistent with the basic terms and mutual
understandings established in this Agreement.
The CVRC and the Developer ("Parties") desire to enter into this Agreement in order to set forth
the rights and duties of the Parties during the term of the Exclusive Negotiating Period subject to the
Owner Participation rules and regulations established for the Project Area.
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Now, therefore, the Parties mutually agree as follows:
1. Good Faith Negotiations
A. Agency and Developer agree (for the period stated below) to negotiate in good faith
pursuant to the terms of this Agreement, a Development and Loan Agreement or other form of
agreement or agreements to be entered into between the Agency and Developer concerning the
purchase and development of the Property. Agency agrees not to negotiate with any other person
or entity regarding development of the Property without the prior written consent of Developer.
Nothing in this Agreement shall be deemed a covenant, promise or commitment by Agency, the
City of Chula Vista, or any agency of the City, with respect to the acquisition of property or the
approval of development. Agency's acceptance of this Agreement is merely an agreement to enter
into a period of exclusive negotiations according to the terms hereof, reserving final discretion and
approval by Agency Or Chula Vista Redevelopment Corporation as to any actions required of it.
B. Notwithstanding the foregoing, if the Property incorporates parcels not under Agency or
Developer control, Developer acknowledges that Agency may receive from time to time,
unsolicited alternative proposals for the development of the Property. Agency shall notify
Developer within ten days after receiving an unsolicited development proposal for all or any
portion of the Property. Agency and Developer shall confer in good faith to assess the benefits of
the unsolicited proposal.
2. Negotiation Period
A. Agency and Developer agree to negotiate for an initial 300 days, which shall
commence on the Effective Date unless earlier terminated in accordance with the provisions hereof
("Initial Negotiation Period").
B. If, upon the expiration of such Initial Negotiation Period, the Parties have not each
approved and executed a Development and Loan Agreement, then the Executive Director, in his
sole discretion, on behalf of the Agency, is auttiorized to, in writing, extend the term of this
Agreement for up to an additional 90 days ("Extended Negotiation Period") provided that at the
end of the Initial Negotiation Period, the Agency has not exercised its right to terminate as herein
provided, the Developer is in full compliance with all terms and conditions hereof, the Developer
concurs with such extension of the negotiation period, 'and the Executive Director has determined
that there is a reasonable likelihood that the Developer will agree to terms and conditions for the
development of the Project on the Property required for the development of the Project that
Agency staff will be able to recommend to Agency prior to the expiration of the Extended
Negotiation Period.
C. If, after expiration of the Initial Negotiation Period, or after the Extended
Negotiation Period if this Agreelllfnt is extended, the Parties have not each approved and executed
a Development and Loan Akreement, then this Agreement shall automatically terminate and
Developer shall have no further rights regarding the subject matter of this Agreement or the
Property, and Agency shall be free to negotiate with any other persons or entities with regard to the
Property .
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3. Obligations of Developer
A. Schedule
Agency and Developer agree and acknowledge that all submittals required by this
Agreement shall be submitted pursuant to the timeline attached hf!ff!to as Exhibit "B." Exhibit UB"
shall include, but is not limited to, submittals of Project plans, pro forma, marketing and feasibility
studies, and evidence of financing that are required by the Agency; and commencement of good
faith negotiations with Agency designated prospective owner participants in the Project.
The Parties agree and acknowledge that the Executive Director shall have the
authority to reasonably modify submittal dates contained within Exhibit B provided that the Initial
Negotiation Period shall not be modified or extended except as set forth in Paragraph 2 above.
B. Development and Design Plans
During the negotiation period, Developer shall submit development and design
plans for the Project. Developer shall also furnish such information to Agency regarding the
proposed project as may be required by Agency to perform an environmental review pursuant to
the California Environmental Quality Act (CEQA). All fees and expenses for engineers, architects,
financial consultants, legal, planning or other consultants retained by Developer to perform
Developer's obligations set forth in this Agreement shall be the sole responsibility of Developer.
C. Reports, Studies and Public Participation
Developer shall make quarterly written reports to the Agency on the Developer's progress
toward meeting its obligations under this Agreement, and if requested by the Agency, Developer
shall make periodic oral progress reports on all matters and all studies being made related to the
acquisition and development of the Project and other matters under negotiation to the extent that
they do not include confidential matters. As Agef)CY deems reasonably necessary or appropriate,
presentations may be requested at public forums to solicit input from citizens, businesses,
stakeholders and relevant interest groups.
D. Financing
Developer shall, consistent with Exhibit UB," develop a program of financing that provides
the Agency with reasonably satisfactory evidence that financing will be available for acquisition
and development of the Property.
4. Agency Obligations and Due Diligence
A. During the t-regotiation Period, the Agency shall conduct a due diligence
investigation of the Develo~er's ability to purchase, own and/or operate the Project in a
responsible manner. If the Agency Executive Director determines in his sole discretion that
Developer does not have the ability to successfully purchase, own, and/or manage the Project in a
responsible manner, the Agency Executive Director may terminate this Agreement by delivering
written notice thereof to Developer. Agency's due diligence efforts may include, without limitation,
the following:
,. Assessment of the proposed financing and the capacity of Developer to
qualify for financing for the Project; and
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2. Assessment of the capacity of Developer and their principal staff to
effectively own and/or manage the Project, including the ability to carry out any ongoing
management oversight responsibilities
B. Agency agrees to cooperate with Developer in providing equity partner(s) and/or
lender(s) of Developer with appropriate and necessary information for the Developer to fulfill its
obligations hereunder, which information is not otherwise privileged.
C. The Agency shall also cooperate with Developer's professional consultants and
associates in providing them with any information and assistance, so far as such information is not
otherwise privileged, reasonably within the capacity of the Agency in connection with the
preparation of the Developer's submissions to the Agency.
5. Development and Loan Agreement
The Parties hereby acknowledge and agree that, during the Negotiation Period of this
Agreement the Parties shall use their respective good faith efforts to negotiate and enter into a
Development and Loan Agreement which shall include (but not be limited to) the following: (i) the
design of the Project by the Developer, which design shall be subject to the approval by the
Agency and/or City, (ii) the construction of the Project by the Developer in accordance with final
plans and specifications to be provided by the Developer and approved by the Agency and/or City,
pursuant to a detailed schedule of performance by the Developer, (iii) the operation and
management of the Project by the Developer in a good and professional manner and subject to the
covenants required by law, (iv) the maintenance of landscaping, buildings, and improvements in
good condition and satisfactory state of repair so as to be attractive to the community, (v) the
operation of the Project by the Developer in compliance with all equal opportunity standards
establ ished by federal, state and local law, (vi) provision by each contractor and/or subcontractor
(as the case may require and as appropriate) performing work on the Project of the requisite
performance bond and labor and materials payment bond to assure completion of the Project free
of mechanics' liens, (vii) the Project shall be of the a quality consistent with plans and renderings
provided by Developer and approved by the Ager'\cy; (viii) the terms and conditions upon which
Developer shall acquire the parcel(s), and (ix) the terms and conditions upon which either party
may terminate the Development and Loan Agreement (e.g., the discovery of environmental
issueslhazardous substances on the Site, unexpected development or construction costs, inability to
acquire parcels).
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6. ADDITIONAL TERMS AND OBLIGATIONS
A. No Competing Development.
Developer shall not commence the construction of any parcels comprising the Property
owned or controlled by the Developer until this Agreement has been properly terminated
according to its terms or the Agency/City has approved the Project.
B. Real Estate Commissions.
Neither Agency nor Developer shall be liable for any real estate commission or brokerage
fees, which may arise here from. Agency and Developer represent that they have engaged no
broker, agent or finder separately in connection with this transaction and each party agrees to
indemnify, hold harmless and defend the other against claims for commissions or fees made
through such party.
C. Each Party to Bear its Own Cost.
Each party shall bear its own costs incurred in connection with the negotiation of a
Development and Loan Agreement, and the implementation of this Agreement, except as
otherwise expressly provided herein or expressly agreed in writing.
D. Confidentiality.
Agency and Developer recognize that disclosures made by Developer pursuant to this
Agreement may contain sensitive information and that the disclosure of such information to third
parties could impose commercially unreasonable and/or uncompetitive burdens on Developer and,
may correspondingly, diminish the value or fiscal benefit that may accrue to the Agency upon the
redevelopment of the Property by the Developer, if a future Development and Loan Agreement is
entered into by the Parties. Developer acknowledg,es and agrees that Agency is a public entity with
a responsibility and, in many cases, legal obligatioh to conduct its business in a manner open and
available to the public. Accordingly, any information provided by Developer to Agency with
respect to the Property, the Project or Developer may be disclosed to the public either purposely,
inadvertently, or as a result of a public demand or order. With respect to any information provided
that Developer reasonably deems and identifies in writing as proprietary and confidential in nature,
Agency agrees to exercise its best efforts to keep such information confidential. In addition, if
Agency determines that it is required under applicable law to disclose any information identified
by Developer as proprietary and confidential in nature, Agency shall notify Developer at least three
business days before disclosure of such information which will provide Developer the opportunity
to seek a protective order preventing such disclosure.
Notwithstanding the above, AEency's failure to provide said notice shall not constitute a breach of
this agreement or grounds for ~ claim or cause of action of any nature against the Agency as a
result of the release of said claimed proprietary or confidential information.
E. Assignment
1. Agency would not have entered into this Agreement but for Developer's unique
qualifications and experience. Therefore, Developer's rights and obligations under this Agreement
may not be assigned without the prior written approval of Agency in its sole discretion.
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Notwithstanding the foregoing, subject to the prior written approval of the Executive Director,
Developer may assign its rights hereunder to a new entity comprised of the Developer for purposes
of developing the Project. Such new entity may include additional parties provided that the
Developer retains responsibility for fulfilling its obligations hereunder and Developer retains
management control and authority over the entity and the Project.
2. Upon the occurrence of any change, whether voluntary or involuntary, in
membership, ownership, management or control of the Developer (other than such changes
occasioned by the death or incapacity of any individual) that has not been approved by the
Agency, prior to the time of such change, the Agency may terminate this Agreement, without
liability, by sending written notice of termination to Developer.
F. Nondiscrimination
Developer shall not discriminate against nor segregate any person, or group of persons on
account of race, color, creed, religion, sex, marital status, disability, national origin or ancestry in
undertaking its obligations under this Agreement.
G. Owner Participation Requirements
This Agreement and the obligations of the Parties set forth herein are subject to the
applicable Owner Participation rules and regulations established for the Project Area and California
Community Redevelopment Law.
7. RETENTION OF DISCRETION
A. By its execution of this Agreement, Agency is not committing itself or agreeing to
undertake any activity requiring the subsequent exercise of discretion by Agency or City, or any
department thereof including, but not limited to, the approval and execution of a Development
and Loan Agreement; the proposal, amendment, or approval of any land use regulation governing
the Property; the provision of financial assistance' for the development of any public or private
interest in real property; the authorization or obligation to use the Agency's eminent domain
authority; or, any other such activity.
B. Consideration of Entitlements and Policy Documents. Developer understands and
agrees that the Agency and City, in their respective legislative roles, reserve the right to exercise
their discretion as to all matters which the Agency and City are by law entitled or required to
exercise such discretion, including but not limited to, Entitlements for the development of the
Property and adoption of any amendments to policy documents (including the General Plan and
Redevelopment Plans). In addition, Developer understands and agrees that the Entitlements and
any other documents shall be subject to and brought to the Agency or City, as appropriate, for
consideration in accordance witp applicable legal requirements, including laws related to notice,
public hearings, due process <h1d'the California Environmental Quality Act.
C. Developer acknowledges that any plans processed for the Property will be based
upon the current General Plan and Zoning Code of the City.
D. Consideration by the Agency of the final Project as contained in the Development
and Loan Agreement. This Agreement does not constitute a disposition of property or exercise of
control over property by Agency and does not require a public hejlring. Agency execution of this
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Agreement is merely an agreement to enter into a period of exclusive negotiations according to the
terms hereof, reserving final discretion and approval by Agency as to any proposed Development
and Loan Agreement and all proceedings and decisions in connection therewith. The parties
understand that Agency has the complete and unfettered discretion to reject a Development and
Loan Agreement without explanation or cause. The risk of loss of all processing, design and
developmental costs incurred by the Developer prior to Development and Loan Agreement
approval shall be absorbed entirely by Developer except unless expressly assumed, by the terms of
this Agreement by the Agency. As to any matter, which the Agency may be required to exercise its
unfettered discretion in advancing the Project to completion, nothing herein shall obligate the
Agency to exercise its discretion in any particular manner, and any exercise of discretion reserved
hereunder or required by law, shall not be deemed to constitute a breach of Agency duties under
this agreement.
8. TERMINATION RIGHTS
Notwithstanding the Initial or Extended Negotiating Periods hereinabove set forth, either
party may terminate this Agreement if the other party has materially defaulted in its obligations
herein set forth, and the terminating party has provided defaulting party with written notification of
such determination, and the defaulting party has refused to cure same. The written notification
shall set forth the nature of the actions required to cure such default if curable. Defaulting party
shall have 15 days from the date of the written notification to cure such default. If such default is
not cured within the 15 days, the termination shall be deemed effective. Any failure or delay by a
party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any
default or of any rights or remedies associated with a default. Each party shall also have the right to
terminate this Agreement in the event that Agency or Developer determines that (a) the Project is
infeasible or not in the public interest; or (b) the parties reach an impasse in their negotiation of the
Development and Loan Agreement which cannot be resolved after good faith efforts.
9. GENERAL PROVISIONS
A. Address for Notice.
Developer's Address for Notice:
Kenneth Sauder
Wakeland Housing and Development Corporation
625 Broadway, Ste. 1000
San Diego, CA 92101
Telephone: 619-235-2296
Fax: 619-235-5386
Agency's Add~ss for Notice:
Redevelopment Agency of the City of Chula Vista
Community Development Department
Attn: Director of Community Development
Copy to: City Attorney
276 Fourth Avenue
Chula Vista, CA 91910
Telephone: (619) 691-5047
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Fax:
(619) 476-5310
B. Authority.
Each party represents that it has full right, power and authority to execute this Agreement
and to perform its obligations hereunder, without the need for any further action under its
governing instruments, and the parties executing this Agreement on the behalf of such party are
duly authorized agents with authority to do so.
C. Counterparts.
This Agreement may be executed in multiple copies, each of which shall be deemed an
original, but all of which shall constitute one Agreement after each party has signed such a
counterpart.
D. Entire Agreement.
This Agreement together with all exhibits attached hereto and other agreements expressly
referred to herein, constitutes the entire Agreement between the parties with respect to the subject
matter contained herein. All prior or contemporaneous agreements, understandings,
representations, warranties and statements, oral or written, are superseded.
E. Further Assurances.
The parties agree to perform such further acts and to execute and deliver such additional
documents and instruments as may be reasonably required in order to carry out the provisions of
this Agreement and the intentions of the parties.
F. No Third Party Beneficiaries.
There are no other parties to this Agreemen1, express or implied, direct or indirect. Agency
and Developer acknowledge that it is not their intent to create any third party beneficiaries to this
Agreement.
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G. Exclusive Remedies.
1. In the event of default by either party to this Agreement, the parties shall have the
remedies of specific performance, mandamus, injunction and other equitable remedies. Neither
party shall have the remedy of monetary damages against the other; provided, however, that the
award of costs of litigation and attorneys' fees shall not constitute damages based upon breach of
this Agreement where such an award is limited to reasonable costs of litigation incurred by the
Parties.
2. Each party acknowledges that it is aware of the meaning and legal effect of
California Civil Code Section 1542, which provides:
A general release does not extend to claims which the creditor does not know or suspect to
exist in his favor at the time of executing the release, which if known by him would have
materially affected his settlement with debtor.
California Civil Code Section 1542 notwithstanding, it is the intention of the Parties to be
bound by the limitation on damages and remedies set forth in this Section 7G, and the Parties
hereby release any and all claims against each other for monetary damages or other legal or
equitable relief related to any breach of this Agreement, whether or not any such released claims
were known to either of the Parties as of the date of this Agreement. The Parties each waive the
benefits of California Civil Code Section 1542 and all other statutes and judicial decisions of
similar effect with regard to the limitations on damages and remedies and waivers of any such
damage and remedies contained in this Section 7G.
H. Indemnity.
Developer shall indemnify, protect, defend and hold harmless Agency, its elected officials,
employees and agents from and against any and all challenges to this Agreement, or any and all
losses, liabilities, damages, claims or costs (including attorneys' fees) arising from Developer's
negligent acts, errors, or omissions with respett its obligations hereunder or the Property,
excluding any such losses arising from the sole negligence or sole willful misconduct of Agency or
the conduct of third parties outside the control of the Developer. This indemnity obligation shall
survive the termination of this Agreement. Notwithstanding the foregoing, in the event of a third
party challenge to the validity of this Agreement, Developer shall have the option to terminate this
Agreement in lieu of its indemnity obligation.
I. Time is of the Essence.
Time is of the essence for each of Developer's obligations under this Agreement.
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[NEXT PAGE IS SIGNATURE PAGE]
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Signature Page
To
Exclusive Negotiating Agreement
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date set
forth above, thereby indicating the consent of their principals.
CHULA VISTA
REDEVELOPMENT CORPORATION
WAKELAND HOUSING & DEVELOPMENT
CORPORATION
A California Non-Profit Corporation
By:
Stephen C. Padilla
Chair
By:
Kenneth l. Sauder
President and CEO
Date:
Date:
APPROVED AS TO FORM:
By:
Ann Moore
General Counsel
. .
Date:
ATTEST:
Susan Bigelow
City Clerk
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ALTA Survey
Site Feasibility Study
Soils Report
Phase i
Environmental
Phase II
Environmental
(if necessary)
Preliminary Civil
Engineering Analysis
Site Adequacy
Public Workshop #1
Entitlement
Applications
Project Description,
Site Plans and
Elevations
Zoning Amendment
Environmental
Review
Project Development
Schedule
Housing Advisory
Commission
Agency Funding
Application
Agency Funding
EXHIBIT NB"
Exclusive Negotiating Agreement Timeline/Budget
Completed Within 90 Days of ENA Execution
Developer to obtain a AL T A Survey on the subject Property
Developer to perform a Site Feasibility Study on the subject Property
Developer to obtain a Soils Report on the subject Property
Developer to obtain a Phase I Environmental on the subject Property
Developer to obtain a Phase II Environmental on the subject Property (if necessary)
Developer to perform a Preliminary Civil Engineering Analysis on the subject
Property
Developer shall provide written determination of whether the subject Property is
physically suitable for development taking into account regulatory and
environmental conditions that are deemed relevant
Developer to conduct a pre-design workshop to gather input from the public and
stakeholders on the design parameters and framework for the subject Property
Completed Within 150 Days of ENA Execution
Developer to submit applicatiohs for Initial Study and Rezone
$25,000
Developer to submit project description, preliminary site plans and elevations
based on pre-design review with staff and public input received at Public
Workshop #1 .
City shall initiate an amendment to the zoning on the site to allow an all
residential, multi-family development
City shall initiate the environmental review of the project
Developer to submit projected timeline and schedule for the construction of the
propos d development
Developer to present project proposal to the Housing Advisory Commission
Developer to submit application for Agency funding on the subject property
Agency to decide on funding commitment for project (need 30 days between
appl ication and Agency meeti ng)
...3 -;z. 9
Workshop #2
Final Site Plans and
Elevations
Final Pro Forma
Funding Partners and
Structure
Environmental
Review
CVRC Presentation
Redevelopment
Agency
Funding Application
Project Design
Developer to Workshop to present proposed development
Within 210 Days of ENA Execution
Developer to Final site plans and elevations
$50,000
Developer to submit final pro forma based on revised site plans and elevations
Developer to Identification of lenders and financing commitment
City to issue environmental and zoning approvals
Within 240 Days of ENA Execution
Developer to present development proposal and Affordable Housing Agreement
for review and consideration. CVRC adopts advisory recommendations for Agency
and/or Council consideration.
Developer to present development proposal to Agency for final review and
consideration.
Within 300 Days of ENA Execution $100,000
Developer to prepare and submit outside funding applications
Developer to complete construction drawings based on pre-design review with
staff and public input received at Public Workshops
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RESOLUTION NO.
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA APPROVING [A] A PREDEVELOPMENT LOAN
AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY
AND WAKELAND HOUSING AND DEVELOPMENT CORPORATION
FOR THE DEVELOPMENT AND OPERATION OF AN AFFORDABLE
RENTAL HOUSING DEVELOPMENT TO BE LOCATED AT 1501
BROADWAY IN THE CITY OF CHULA VISTA AND AUTHORIZING
THE CHAIRMAN OF THE REDEVELOPMENT AGENCY TO EXECUTE
SAID AGREEMENT; AND [B] APPROPRIATION OF $200,000 FROM THE
UNAPPROPRIATED BALANCE IN THE LOW AND MODERATE
INCOME HOUSING FUND FOR THE PREDEVELOPMENT LOAN TO
WAKELAND HOUSING AND DEVELOPMENT CORPORATION
WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6
authorize and direct the Redevelopment Agency of the City of Chula Vista (the "Agency") to
expend a certain percentage of all taxes which are allocated to the Agency pursuant to Section
33670 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 applicable law the Agency has established a Low and
Moderate Income Housing Fund (the "Housing Fund"); and
WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out
its affordable housing activities, the Agency 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 fmancial assistance for the construction and rehabilitation of
housing which will be made available at an affordable housing cost to such persons; and
WHEREAS, pursuant to Section 33413(1)), the Agency is required to ensure that at
least 15 percent of all new and substantially rehabilitated dwelling units developed within a
project area under the jurisdiction of the Agency by private or public entities or persons other
than the Agency shall be available at affordable housing cost to persons and families of low or
moderate income; and
WHEREAS, W~eland Housing and Development Corporation ("Developer")
proposes to construct an Affordable rental housing development targeting predominately
extremely low and very low households at 50 percent or less of the Area Median Income (AMI)
to be"located at 1501 Broadway within the Merged Chula Vista Project Area ("Project''); and
WHEREAS, in order to carry out and implement the Redevelopment Plan for the
Agency's redevelopment projects and the affordable housing requirements and goals thereof, the
Agency and City propose to enter into an Agency Predevelopment Loan Agreement (the
..3 -.3 I
Resolution No.
Page 2
"Predevelopment Loan Agreement") with the Developer, pursuant to which the Agency would
make a predevelopment loan to the Developer (the "Predevelopment Loan"), and the Developer
would agree to develop the Project for occupancy of all apartment units in the Project to very
low and lower income households and rent those units at an affordable housing cost; and
WHEREAS, the Agency Predevelopment Loan Agreement will leverage the
investment of the Agency and City by requiring the Developer to obtain additional financing for
the construction and operation of the Project through such resources as "9% Tax Credits" to be
generated by the Proj ect; and
WHEREAS, the Project is located within the Agency's Merged Chula Vista
Redevelopment Project Area and development and operation of the Project pursuant to the
Agency Agreement would benefit the Agency's redevelopment project areas by providing
affordable housing for persons who currently live and work within those redevelopment project
areas; and
WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and
Safety Code Section 33490, which sets forth the objective of providing housing to satisfy the
needs and desires of various age, income and ethnic groups of the community, and which
specifically provides for the rehabilitation of rental housing units through Agency assistance; and
WHEREAS, the Agency Agreement furthers the goals of the Agency to facilitate the
creation of affordable housing which will serve the residents of the neighborhood and the City as
set forth in the Implementation Plan; and
, '
WHEREAS, the Agency have duly considered all terms and conditions of the proposed
Agency Loan Agreement and believes that this Loan Agreement is in the best interests of the
Agency and the health, safety, and welfare of its residents, and in accord with the public
purposes and provisions of applicable State and 10caJ law requirements;
NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CIlliLA
VISTA DOES RESOLVE AS FOLLOWS:
Section 1. The Agency hereby finds that the use of funds from the Agency's Low
and Moderate Income Housin~ Fund pursuant to the Predevelopment Loan Agreement, to
facilitate the development m\d operation of real property will be of benefit to the Agency's
redevelopment project areas for the reasons set forth above.
Section 2. The Agency hereby approves [A] A Predevelopment Loan Agreement in
substantially the form presented to the Agency, subject to such revisions as may be made by the
Agency Executive Director/City Manager or his designee subject to the review and approval of
the Agency/City Attorney, with Wakeland Housing and Development Corporation for the
..3-,3,;}.
Resolution No.
Page 3
development of an affordable rental housing development located at 1501 Broadway and; [B]
appropriation of $200,000 from the unappropriated balance in the Low And Moderate Income
Housing Fund for said Predevelopment Loan to Wakeland.
PRESENTED BY
APPROVED AS TO FORM BY
Ann Hix
Assistant Director of Community
Development
Ann Moore
Agency Attorney
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PREDEVELOPMENTLOANAGREEMENT
TillS PREDEVELOPMENT LOAN AGREEMENT (the "Agreement") is entered
into as of , 2006, by and between the REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA, a public body, corporate and politic (the
"Agency"), and WAKELAND HOUSING AND DEVELOPMENT CORPORATION, a
California nonprofit public benefit corporation ("Developer").
RECITALS
The following recitals are a substantive part of this agreement:
A. Agency is a public body, corporate and politic, exercising governmental functions
and powers and organized and existing under the Community Redevelopment Law of the State
of California (Health and Safety Code Section 33000, et seq.). City is a municipal corporation,
organized and existing under the laws of the State of California. Agency and City are authorized
to enter into binding agreements for the purpose of protecting public health, safety, and welfare.
B. Agency has available funds from the Agency's Low and Moderate-Income
Housing Fund which can be used for the purposes of funding the obligations of the Agency
under this Agreement in accordance with the Community Redevelopment Law of the State of
California.
C. Developer proposes to construct multifamily apartment units, affordable to
extremely low and very low families at or below 50 percent of the Area Median Income ("AMI")
(the "Project") on a certain parcel of land identified as 1501 Broadway in the City of Chula Vista
(the "Site").
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D. Pursuant to Health and Safety Code Section 33413(b), the Agency is required to
ensure that at least 15 percent of all new and substantially rehabilitated dwelling units developed
within a project area under the jurisdiction of the Agency by private or public entities or persons
other than the Agency shall be available at affordable housing cost to persons and families oflow
or moderate income. .
E. Pursuant to Health and Safety Code Section 33334.4, Agency's expenditure of
Housing Funds must be in proportion to the community's need for very low and low income
housing and housing for its population under the age of 65, as specified within the City's
Housing Element
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F. The Project ihocated within the Agency's Merged Chula Vista Redevelopment
Project Area and development and operation of the Project would benefit the Agency's
redevelopment project areas by providing affordable housing for persons who currently live and
work within those redevelopment project areas.
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G. The Project achieves several of the City's Comprehensive Housing Plan
Objectives, which are expressly noted in the Housing Element as priorities for the City. The
objectives this Project serves are:
(1) Pursue housing opportunities for lower income households, with attention to those
who have special needs, such as extremely low and very low income households.
(2) The provision of adequate rental housing opportunities and assistance to
households with low and very low incomes.
(3) The provision of incentives for the construction of low income housing.
H. The Agency and the Developer have entered into an Exclusive Negotiating
Agreement, dated as "of June 22, 2006 (the "ENA"). The ENA provides for the Developer and
the Agency to negotiate towards a mutually acceptable Development and Loan Agreement for
the purpose of developing the Project.
1. Through the development and operation of the Project, Agency and Borrower
desire to provide extremely low, very low, lower income households with affordable housing
opportunities within the City in accordance with the Community Redevelopment Law, the
Agency's redevelopment plans, and the Housing Element of the City General Plan. In order to
accomplish this goal, the Agency desires to make a loan from its Low and Moderate Income
Housing Fund to Developer for those costs associated with predevelopment expenses which are
to be incurred during the parties' negotiation of a Development and Loan Agreement for the
Project, subject to certain conditions designed to assure the implementation of the Project in
accordance with the redevelopment plans, the General Plan, state and federal law, and as
otherwise provided herein.
1. The Agency's making of the Agency Loan to the Developer is in the vital and
best interest of the City and the health, safety, and welfare of its residents, and in accord with
public purposes and provisions of applicable sate and local laws.
NOW, THEREFORE, the Agency and the' Developer hereby agree as follows;
1. Predevelopment Loan. Subject to Developer's performance of all of the terms,
covenants and conditions which are set forth herein, the Agency hereby agrees to loan to the
Developer, and the Developer agrees to borrow from the Agency, the sum of Two Hundred
Thousand Dollars ($ 200,000) (the "Predevelopment Loan"). No interest shall accrue upon the
Predevelopment Loan.
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2. Disbursement of Predevelopment Loan. The proceeds of the Predevelopment Loan
shall be disbursed only to pay for actual and reasonable costs related to the preparation of plans,
studies and reports for the Development as more particularly described in Exhibit "A" attached
hereto. Agency's obligation to commence disbursement of the Predevelopment Loan proceeds is
subject to the fulfillment or waiver by Agency of each and all of the conditions precedent (a)
through (f) inclusive, described below ("Conditions Precedent") which are solely for the benefit
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of Agency, any of which may be waived by the Agency's Executive Director in his or her sole
and absolute discretion:
2a. Execution of Documents. Developer shall have executed and delivered to the
Agency the Assignment of Plans, substantially in the form attached hereto as Exhibit "B" and
incorporated herein, the consent to the Assignment of Plans of each person or entity for which
payment is sought, and any other documents required hereunder shall be executed prior to any
commencement of work by the subcontractor and disbursement of any loan funds.
2b. Contract. Developer shall have provided to the Agency a signed copy of each
contract between the Developer and each provider of predevelopment services to be funded
hereunder, certified by the developer to be true and correct copies thereof.
2c. No default. Developer shall not be in default in any of its obligations under the
terms of this Agreement or the ENA. All covenants of Developer which are required hereunder
or in the ENA to be performed prior to the disbursement of the Predevelopment Loan shall have
been performed by such date.
2d. Application for Payment. The Developer shall have submitted a request for
payment to the Agency (the "Application for Disbursement"), at least ten (lO) business days
prior to the requested disbursement. The Application for Disbursement shall be completed and
certified to be accurate by the Developer. The Application for Disbursement shall specifically
identify the nature of each expense, and shall identify the status of completion of such item of
work. Each application for Disbursement shall be accompanied by copies of paid invoices or the
original invoices, if to be paid directly by the Agency, from contractors and subcontractors and
any other information and documents reasonably requested by the Agency.
2e. Frequency. Agency shall noL be obligated to make disbursements more
frequently than twice per month.
2f. Use of Disbursements. Developer shall use or apply all Predevelopment Loan
disbursements solely for the purposes described in.the Application for Disbursement pursuant to
which the disbursement was made, and in accordance with all of the requirements of this
Agreement.
3. Repayment of Predevelopment Loan. Should Developer and the Agency approve and
execute a Development and Loan Agreement within the Negotiating Period as set forth in the
ENA, such Agreement shall set forth the manner and provide for the Developer's repayment of
the amount of the Predevel<y'ment Loan disbursed hereunder,. If the Development and Loan
Agreement is not approved or executed within the Negotiating Period as set forth in the ENA,
the Predevelopment Loan shall be immediately due and payable from any and all assets and
resources legally available to the developer. Additionally, Developer shall assign to the Agency
any and all of the Developer's rights in and to the plans, studies, and analyses which are funded
through the Predevelopment Loan. In order to secure the Developer's obligation hereunder, the
developer agrees to execute the Assignment of Plans.
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4. Insurance. Developer must procure insurance against claims for injuries to persons or
damages to property that may arise ITom or in connection with the performance of the work
under the contract and the results of that work by the Developer, 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.
a. Minimum Scope of Insurance. Coverage must be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence Form
CGOOOI)
u. Insurance Services Office Form Number CA 0001 covering Automobile Liability, codel
(any auto).
iii. Workers' Compensation insurance as required by the State of California and Employer's
Liability Insurance.
b. Minimum Limits of Insurance. Developer must maintain limits no less than:
1.
General Liability:
(Including operations,
products and
completed operations,
as applicable.)
ll.
Automobile Liability:
Ill.
Workers'
Compensation
Employer's Liability:
$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.
$1,000,000 per accident for bodily injury and property damage.
Statutory
$1,000,000 each accident
$1,000,000 disease-policy limit
$1,000,000 disease-each employee
c. 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 will provide a financial guarantee
satisfactory to the City guaranteeing payment of losses and related investigations, claim
administration, and defense expenses.
d. Other Insurance P~ovi~ions. 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, where applicable,
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and, with respect to liability arising out of work or operations perfonned by or on behalf
of the Developer 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 Developer's insurance
using ISO CG 2010 (11/85) or its equivalent. Specifically, the endorsement must not
exclude Products / Completed Operations coverage.
H. The Developer'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 and in no way relieves the
Developer from its responsibility to provide insurance.
HI. 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.
IV. 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.
v. Developer'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.
e. 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 Compemation Fund when not specifically rated.
f. Verification of Coverage. Developer shall furnish the City with original certificates and
amendatory endorsements effecting coverage required by this clause. The endorsements should
be on insurance industry fonns, provided those endorsements confonn 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.
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g. Subcontractors. Developer 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.
5. Indemnification and Hold Harmless. Developer shall indemnify, hold harmless,
protect, and defend, with attomey(s) reasonably acceptable to the Agency, the Agency and its
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officers, elected and appointed boards and officials, employees, representatives and agents, from
and against any and all liability, damages, costs, losses, claims and expenses, suits, actions,
proceedings and judgments, including without limitation, reasonable attorney fees and court
costs" however caused, resulting directly or indirectly from or connected with the Development,
the Site and/or the approval of or the performance under this Agreement alleged by third parties
to be the result of or related to errors, omissions, or misconduct by Developer or its contractors,
subcontractors, agents, employees or other persons action on its behalf, except to the extent
caused by the sole negligence or sole willful misconduct of the Agency, or its officers, boards,
officials, employees representative or agents.
This indemnity obligation shall survive the termination of this Agreement. Notwithstanding the
foregoing, in the event of a third party challenge to the validity of this Agreement, Developer
shall have the option to terminate this Agreement in lieu of its indemnity obligation.
6. Compliance with Laws. The Developer for itself and its obligations hereunder in
conformity with all applicable laws, including without limitation all provisions of the City
Municipal Code, all applicable environmental laws, all state and federal fair housing laws, and
all applicable disabled and handicapped access requirements, including without limitation the
Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section
4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil
Code Section 51, et seq.
7. Nondiscrimination. Developer for itself and its successors and assigns, agrees that there
shall be no discrimination against or segregation of any person or group of persons, on account
of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing,
subleasing, rental, transferring, use, occupancy" tenure, or enjoyment of the Site nor shall the
Developer or any person claiming under or through the Developer establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, leases, sublessees, subtenants, contractors or vendess in
the Site.
8. Condition of the Site. Developer shall take. all necessary precautions to prevent the
release into the Site of Hazardous Materials (as defined below). Such precautions shall include
compliance with all Government Requirements (as defined below) with respect to Hazardous
Materials. In addition to any and all other indemnities, Developer shall indemnify, defend and
hold Agency harmless from and against any claim, action, suit, proceeding, loss, cost, damage,
liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation,
attorney's fees), resulting from, arising out of, or based upon (i) the release from the Site, use on
the site, generation on the Site, liischarge from the Cite, storage on the Site, disposal on or from
the Site, or transportation to Ar :t!om the Site, of any Hazardous Materials during the term of this
Agreement, which is caused by the Developer or its officers, employees or agents, or (ii) the
violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment
or license relating to the use, generation, release, discharge, storage, disposal or transportation of
Hazardous materials on, under, in or about, to or from, the Site, which is cause by the Developer
or its officers, employees, or agents. This indemnity shall include, without limitation, any
damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or
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proceeding, including injunctive, mandamus, equity or action at law, for personal injury
(including sickness, disease or death), tangible or intangible property damage, compensation for
lost wages, business income, profits or other economic loss, damage to the natural resources or
the environment, nuisance, contamination, leak, spill, release or other adverse effect on the
environment.
For the purposes of this Agreement, "Governmental Requirements" means all laws, ordinances,
statutes, code, rules, regulations, orders, and decrees of the United States, the State of California,
San Diego County, the City of Chula Vista, or any other political subdivision in which the Site is
located, and of any other political subdivision, agency, or instrumentality exercising jurisdiction
over the Developer or the Site.
For the purposes of this Agreement, "Hazardous Materials" means any substance, material, or ate
which is or becomes regulated by any local governmental authority, the County, the State of
California, regional governmental authority, or the United States Government, including, but not
limited to, any material or substance which is (i) defmed as a "hazardous waste," "extremely
hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or
listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter
6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section
25316 of the California Health and Safety Code, division 20, chapter 6.8 (Carpenter-Presley-
Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous
substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv)
defmed as a "hazardous substance" under Section 25281 of the California Health and Safety
Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum,
(vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) methyl tertiary butyl ether, (ix) listed
under Article 9 or defmed as "hazardous" or "extremely hazardous" pursuant to Article 11 of
title 22 of the California Code of Regulations, Division 4, (x) designated as "hazardous
substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. g1317), (xi) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42
U.S.C. g690l et seq. (42 U.S.C. g6903), or (xii) defined as "hazardous substances" pursuant to
Section 101 of the Comprehensive Environmental, Response, Compensation, and Liability Act,
42 U.S.C. g690l et seq. Notwithstanding the forgoing, "Hazardous Materials" shall not include
such products in quantities as are customarily use in construction, maintenance, rehabilitation or
management of residential developments or associated buildings and grounds, or typically used
in residential activities in a manner typical of other comparable residential developments, or
substance commonly ingested by a significant population living within the Development,
including without limitation alcohol, aspirin, tobacco and saccharine.
9. Liens and Stop Noti~es. Developer shall use its best efforts to prevent any lien or stop
notice ITom being place on the Site of the Development or any part thereof. If a claim of a lien or
stop notice is given or recorded affecting the Site the Developer shall within thirty (30) days of
such recording or service:
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a. pay and discharge the same; or
b. effect the release thereof by recording and delivering to Agency a surety bond in
sufficient form and amount, or otherwise; or
c. provide Agency with indemnification from a title insurance company reasonably
acceptable to the Agency against such lien or other assurance which Agency deems, in its sole
discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full
and continuous protection of Agency from the effect of Agency from the effect of such lien or
bonded stop notice.
10. Developer's Representations and Warranties. Developer represents and warrants to
Agency as follows:
a. Authority. Developer has full right, power and lawful authority to undertake all
obligations as provided herein, and the execution, performance and delivery of this Agreement
by Developer has been fully authorize by all requisite actions on the part of the Developer. The
parties who have executed this Agreement on behalf of Developer are authorized to bind
Developer by signature hereto.
b. Litigation. To the best of the Developer's knowledge, there are no actions, suits,
material claims, legal proceedings, or any other proceedings affecting the Developer or any
parties affiliated with Developer, at law on in equity before any court or governmental agency,
domestic or foreign, which if adversely determined, would materially impair the right or ability
of Developer to execute or perform its obligations under this Agreement or any documents
required herby to be executed by Developer, or which would materially adversely affect the
financial condition of Developer or any parties affiliated with Developer.
c. No Conflict. To the best of the Dev~loper's knowledge, Developer's execution,
delivery, and performance of its obligations under this Agreement will not constitute a default or
a breach under any contract, agreement or order to which Developer or any parties affiliated with
Developer is a party or by which it is bound.
d. No Bankruptcy. No attachment, execution proceedings, assignments for the
benefit of creditors, insolvency, bankruptcy, reorganization, receivership or other proceedings
have been filed or are pending or threatened against the Developer or any parties affiliated with
Developer, nor are any of such proceedings contemplated by Developer or any parties with
Developer.
e. Notice of Chin~ed Conditions. Developer shall, upon learning of any fact or
condition which would cause any warranties and representations in this Section 10 not to be true
in any material respect, immediately give written notice of such fact or condition to Agency.
Such exceptiones) to a representation shall not be deemed breach of Developer hereunder, but
shall constitute an exception which Agency shall have the right to approve or disapprove. If
Agency elects to disburse the Predevelopment Loan to the Developer following disclosure of
such information, Developer's representations and warranties contained herein shall be deemed
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to have been made as of the date of the disbursement of the Predevelopment Loan, subject to
such exceptiones). If following the disclosure of such infonnation the Developer fails to cure
such matter within the time set forth in Section II hereof for the cure of defaults, Agency may
elect in its sole and exclusive discretion to terminate this Agreement by written notice to the
Developer.
11. Prohibition Al!:ainst Assimment and Transfer. Agency would not have entered into
this Agreement but for Developer's unique qualifications and experience. Therefore, Developer's
rights and obligations under this Agreement may not be assigned, whether voluntarily,
involuntarily, or by operation of law, without the prior written approval of Agency in its sole
discretion.
Upon the occurrence of any change, whether voluntary or involuntary, in membership,
ownership, management or control of the Developer (other than such changes occasioned by the
death or incapacity of any individual) that has not been approved by the Agency, prior to the
time of such change, the Agency may tenninate this Agreement, without liability, by sending
written notice of tennination to Developer. If Agency exercises said right to terminate, all funds
shall be immediately due and payable.
12. Remedies for Default. A failure by either party to perfonn any action or covenant
required by this Agreement, within the time periods provided herein following notice and failure
to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a
Default shall give written notice of Default to the other party specifying the Default complained
of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any
proceeding against any other party, and the other party shall not be in Default if such party cures
such default within thirty (30) days from receipt of such notice. However, in the event that such
Default is of such a nature that it cannot reasonably be cured within thirty (3) days from receipt
of such notice, the claimant shall not institute any proceeding against the other party, and the
other party shall not be in Default is such party Immediately upon receipt of such notice, with
due diligence, commences to cure, correct or remedy such failure or delay and completes such
cure, correction or remedy with diligence as soon as reasonably possible thereafter.
13. Termination. Either party may terminate this Agreement if the other party has
materially defaulted in its obligations herein set forth, and the tenninating party has provided
defaulting party with written notification of such determination, and the defaulting party has
refused to cure same as set forth above.
Each party shall also have the right to terminate this Agreement in the event that Agency or
Developer detennines that (\I) the Project is infeasible or not in the public interest; or (b) the
parties reach an impasse in their negotiation of the Development and Loan Agreement which
cannot be resolved after good faith efforts. 13. Institution of Legal Actions. In addition to
any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement,
either party may institute and action at law or equity to seek specific perfonnance of the tenns of
this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or
to obtain any other remedy consistent with the purpose of this Agreement. Legal actions must be
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instituted in the Superior Court of the County of San Diego, State of California located in the
City of Chula Vista..
14. Acceptance of Service of Process. In the event that any legal action is commenced by
the Developer against Agency, service of process on Agency shall be made by personal service
upon the Secretary or executive Directory of Agency or in such other manner as may be provided
by law. In the event that any legal action is commenced by Agency against the Developer,
service of process shall be made in such a manner as may be provided by law and shall be
effective whether served inside or outside California.
15. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this
Agreements, the rights and remedies of the parties are cumulative, and the exercise by either
party of one or more of such rights or remedies shall not preclude the exercise by it, at the same
or different times, of any other rights or remedies for the same Default or any other Default by
the other party.
16. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any
of its rights and remedies as to any Default shall not operate as a waiver of any default or of any
such rights or remedies, or deprive either such party of its right to statute and maintain such
actions or proceeding which it may deem necessary to protect, assert or enforce any such rights
or remedies.
17. Applicable Law. The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.
18. Attorney's Fees. In any action between the parties to interpret, enforce, reform, modify,
rescind, or otherwise in connection with any of the term or provisions of this Agreement, the
prevailing party in the action shall be entitled, in addition to any other relief to which it might be
entitled, whether legal or equitable, its actual anci' reasonable costs and expenses including,
without limitation, litigation costs and reasonable attorney's fees. The parties hereto
acknowledge and agree that each such party shall bear its own legal costs incurred in connection
with the negotiation, approval, and execution of this Agreement.
19. General Provisions.
a. Notices, Demands and Communications Between Parties. Any approval,
disapproval, demand, document or other notice ("Notice") which either party may desire to give
to the other party under this Agreement must be in writing and may be given either by (i)
personal service, (ii) delivel( bl reputable document delivery service such as Federal Express
that provides a receipt shoWIng date and time of deliver, or (iii) mailing in the United States
mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the
party as set forth below, or at any other address as that party may later designate by Notice:
To Agency:
Agency's Address for Notice:
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Redevelopment Agency of the City ofChula Vista
Community Development Department
Attn: Director of Community Development
Copy to: City Attorney
276 Fourth Avenue
Chula Vista, CA 91910
Telephone: (619) 691-5047
Fax: (619) 476-5310
To Developer:
Developer's Address for Notice:
Kenneth Sauder
Wakeland Housing and Development Corporation
625 Broadway, Ste. 1000
San Diego, CA 92101
Telephone: 619-235-2296
Fax: 619-235-5386
Any written notice, demand or communication shall be deemed received immediately
upon receipt; provide, however, that refusal to accept delivery after reasonable attempts thereto
shall constitute receipt. Any notices attempted to be delivered to an address from which the
receiving party has moved without notice shall be effective on the third day from the date of the
attempted delivery or deposit in the United States mail.
b. Non-Liability of Officials and Employees of Agency and City. No member,
official, officer or employee of Agency of the City of Chula Vista shall be personally liable to
the Developer, or any successor in interest, in the event of any Default or breach by Agency or
for any amount which may become due to the Developer or its successors, or on any obligations
under the terms of this Agreement. The City is not a party to this Agreement and shall have no
obligations hereunder.
c. Counterparts. This Agreement may be signed in multiple counterparts which,
when signed by all parties, shall constitute a binding agreement. This Agreement is executed in
three (3) originals, each of which is deemed to be an original.
d. Integration. I[his Agreement, together with the ENA, contains the entire
understanding between parties relating to the Predevelopment Loan contemplated by this
Agreement. All prior or contemporaneous agreements, understanding, representations and
statements, oral or written, related to the Predevelopment Loan are merged in this Agreement
and shall be of no further force or effect. Each party is entering this Agreement base solely upon
the representation set forth herein and upon each party's own independent investigation of any
and all facts such party deems material.
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e. No Waiver. A waiver by either party of a breach of any of the covenants,
conditions or agreement under this Agreement to be performed by the other party shall not be
construed as a waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions of this Agreement.
f. Modifications. Any alteration, change, or modification of or to this Agreement,
in order to become effective, shall be made in writing and in each instance signed on behalf of
each party.
g. Severability. If any term, provision, condition, covenant of this Agreement or its
application to any party or circumstances shall be held, to any extent, invalid or unenforceable,
the remainder of this Agreement, or the application of the term, provisions, condition or
covenant to persons or circumstances other than those as to whom or which it is held invalid or
unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent
permitted by law.
h. Legal Advice. Each party represents and warrants to the other the following: they
have carefully read this Agreement, and in signing this Agreement, they do so with full
knowledge of any right which they may have; they have received independent legal advice from
their respective legal counsel as to the matters set forth in this Agreement, or have knowingly
chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have
freely signed this Agreement without any reliance upon any agreement, promise, statement or
representation by or on behalf of the other party, or their respective agents, employees, or
attorneys, except as specifically set forth in this Agreement, and without duress or coercion,
whether economic or otherwise.
i. Time of Essence. Time is expressly made of the essence with respect to the
performance by the parties of each and every obli~atipn and condition of this Agreement.
j. Cooperation. Each party shall cooperate with the other in this transaction and, in
that regard, sign any and all documents which may be reasonably necessary, helpful, or
appropriate to carry out the purposes and intent of this ,Agreement including, but not limited to,
releases or additional agreements. '
k. Def"mitions. Any terms used in this Agreement but not separately defined herein
shall have the meaning given to such terms in the ENA.
I I
[NEXT PAGE IS SIGNATURE PAGE]
3-4~
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date specified herein.
"AGENCY"
REDEVELOPMENT AGENCY OF TIIE CITY OF
CHULA VISTA, a public body, corporate and politic
By:
Stephen C. Padilla, Chair
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Ann Moore, Agency Attorney
,
,
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8-1 3- 4 iD
(HINES) J:\COMMDEV\CVRC\CVRC MeetingslStaff Reports\2006\06-22-o6\Wekeland\Wakeland Prede\i loan Agreement - Clean - 2006.06.16.doc [6I1612006 1:59 PM]
[SIGNATURE PAGE CONTINUED]
"BORROWER"
WAKELAND HOUSING
CORPORATION
&
DEVELOPMENT
a California Nonprofit Public Benefit Corporation
By:
Kennetb 1. Souder, President and CEO
, '
I I
..3-47
S-l
(HINES) J:\COMMDEV\CVRC\CVRC Meetings\StafJ Report5\2006\06-22-Q6\Wakeland\Wskaland Predev Lo., Agreement _ Clean _ 2006.06.16.doc [6I16l2OO6 1:59 PMI
EXHIBIT "A"
Exclusive Negotiating Agreement Timeline/Budget
ALTA Survey
Site Feasibility Study
Soils Report
Phase I Environmental
Phase II
Environmental
(if necessary)
Preliminary Civil
Engineering Analysis
Site Adequacy
Public Workshop #1
Entitlement
Applications
Project Description,
Site Plans and
Elevations
Zoning Amendment
Environmental
Review
Project Development
Schedule
Housing Advisory
Commission
Agency Funding
Application
Agency Funding
Workshop #2
Final Site Plans and
Elevations
Completed Within 90 Days of ENA Execution
Developer to obtain a ALTA Survey on the subject Property
Developer to perfonn a Site Feasibility Study on the subject Property
Developer to obtain a Soils Report on the subject Property
Developer to obtain a Phase I Environmental on the subject Property
Developer to obtain a Phase II Environmental on the subject Property (if necessary)
Developer to perfonn a Preliminary Civil Engineering Analysis on the subject Property
Developer shall provide written determination of whether the subject Property is
physically suitable for development taking into account regulatory and environmental
conditions that are deemed relevant
Developer to conduct a pre-design workshop to gather input rrom the public and
stakeholders on the design parameters and rramework for the subject Property
Completed Within 150 Days orENA Execution
Developer to submit applications for Initial Study and Rezone
$25,000
Developer to submit project description, preliminary site plans and elevations based on
pre-design review with staff and public input received at Public Workshop #1
City shall initiate an amendment to the zoning on the site to allow an all residential,
multi-family development
City shall initiate the environmental review of the project
Developer to submit projected timeline and schedule for the construction of the
proposed development
Developer to present project proposal to the Housing Advisory Commission
Developer to submit application for Agency funding on the subject property
Agency\o decide on funding committnent for project (need 30 days between application
and Agency meeting)
Within 180 Da s of ENA Execution
Developer to Workshop to present proposed development
Within 210 Days of ENA Execution
Developer to Final site plans and elevations
$50,000
.E -4 g
MILESTONE DESCRIPTION Agency ContnbUtlon
Final Pro Fonna Developer to submit final pro fonna based on revised site plans and elevations
Funding Partners and Developer to Identification oflenders and fmancing commitment
Structure
Environmental City to issue environmental and zoning approvals
Review
Within 240 Davs of ENA Execution I
CYRC Presentation Developer to present development proposal and Affordable Housing Agreement for
review and consideration. CYRC adopts advisory recommendations for Agency and/or
Council consideration.
Redevelopment Developer to present development proposal to Agency for fmal review and
Agency consideration.
Within 300 Days of ENA Execution I $100,000
Funding Application Developer to prepare and submit outside funding applications
Project Design Developer to complete construction drawings based on pre-design review with staff and
public input received at Public Workshops
L L
.3 -4~
EXIllBIT "B"
ASSIGNMENT OF PLANS
The undersigned, WAKELAND HOUSING AND DEVELOPMENT CORPORATION, a
California nonprofit public benefit corporation ("Developer"), as of this day of
, 2006, hereby assigns to the REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA, a public body, corporate and politic ("Agency"), all of its
rights, title and interest in and to:
1. All architectural, design, engineering and development agreements, and any and all
amendments, modifications, supplements, addenda and general conditions thereto
(collectively, "Architectural Agreements"); and,
2. All plans and specifications, shop drawings, working drawings, amendments,
modifications, changes, supplements, general conditions and addenda thereto
(collectively "Plans and Specifications")
heretofore or hereafter entered into or prepared by any architect, engineer or other person or
entity (collectively "Architect"), for or on behalf of Developer in connection with the
development of the multifamily housing project (the "Project") referenced in the Predevelopment
Loan Agreement" between Developer and Agency dates as of ,
2006. The Plans and Specifications, as of the date hereof, include, but are not limited to
, and those which Developer has heretofore, or with hereafter
deliver to Agency. The Architectural Agreements include, but are not limited to,
, and those which Developer has heretofore, or will hereafter deliver
to Agency.
This Assignment of Plans ("Assignment") constitutes a present and absolute assignment to
Agency as of the Effective Date; provided, however, Agency conferes upon Developer the right
to enforce the terms of the Architectural Agreements and Developer's right to the Plans and
Specifications so long as the Predevelopment Loan has not become due and payable. Upon the
date that the Predevelopment loan becomes due and payable, the Agency may, in its sole
discretion, give notice to Architect of its intent to enforce the rights of Developer under the
Architectural Agreements and of its rights to the Plans and Specifications and may initiate or
participate any legal proceedings respecting the enforcement of said rights. Developer
acknowledges that by accepting this Assignment, Agency does not assume any of Developer's
obligations under the Architectural Agreements or with respect to the Plans and Specifications.
Developer represents and wiITants to Agency, as of the date hereof, that: (a) all Architectural
Agreements entered into b1 Developer are in full force and effect and are enforceable in
accordance with their terms and no default , or event which would constitute a default after
notice or the passage of time, or both, exists with respect to said Architectural Agreements; (b)
all copies of the Architectural Agreements and Plans and Specifications delivered to Agency are
complete and correct; and (c) Developer has not assigned any of its rights under the Architectural
Agreements or with respect to the Plans and Specifications.
J-sD
Developer agrees: (a) to pay and perfonn all obligations of Developer under the Architectural
Agreements; (b) to enforce the payment and perfonnance of all obligations of any other person
or entity under the Architectural Agreements; (c) not to modify the existing Architectural
Agreements nor to enter into any future Architectural Agreements without Agency's prior
written approval, except as otherwise may be permitted in the Predevelopment Loan Agreement;
and (d) not to further assign, for security or any other purpose, its rights under the Architectural
Agreements or with respect to the Plans and Specifications without Agency's prior written
consent.
This Assignment secures payment and perfonnance by Developer of all obligations of Developer
under the Predevelopment Loan Agreement. This Assignment is supplemental by any applicable
provisions of the Predevelopment Loan Agreements and said provisions are incorporated herein
by reference.
This Assignment shall be governed by the laws of the State of California, and Developer
consents to the jurisdiction of any State Court with the State of California having proper venue
for the filling and maintenance of any action arising hereof under and agrees that the prevailing
party in any such action shall be entitled, in addition to any other recovery, to reasonable
attorney's fees and costs. This Assignment shall be binding upon and inure to the benefit of the
heirs, legal representatives, assigns, and successor's in interest of Developer and Agency.
The attached ArchitectslEngineer's consent(s) is/are inc9rporated by reference.
"DEVELOPER"
WAKELAND HOUSING & DEVELOPMENT
CORPORATION, a. California Nonprofit Public Benefit
Corporation ' '
By:
Kenneth L. Souder, President and CEO .
Date:
~ ~
....3 - ~I
Signature Page Continued
"AGENCY"
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA,
a public body, corporate and politic
By:
Stephen C. Padilla, Chair
Date:
ATTEST:
Secretary
,
\
..3 -S2.
.
..
C:ORPORATION
CHULA VISTA
CVRC Board
Staff Report - Page 1
Item No. 4
DATE:
June 22, 2006
TO:
CVRC Board of Directors ~'
Jim Thomson, Interim Chief Executive Officer II
VIA:
FROM:
Eric Crockett, Redevelopment Manager @I
SUBJECT:
Procedural Framework for CVRC Project/Application Review Process
On March 9, 2006, staff presented the first of two reports to the Board of Directors on the design
and development of a project/application review process for the Chula Vista Redevelopment
Corporation (CVRC). The first report (Attachment 1) provided a foundational overview of the
functions and duties of the CVRC, including the role of the Corporation in the review of
development projects, programs, and policies. This second report continues the discussion by
further breaking down the procedural steps of the CVRC project/application review process.
More importantly, this report presents alternatives on the key strategic elements of a CVRC
procedural framework that will shape how development is treated and processed within the
City's redevelopment project areas. This report will be followed by a third report entitled
"CVRC Public Participation Process" (CVRC Board Staff Report Item No.5 of June 22, 2006
Agenda), which will present alternative processes for public input and participation on project
design.
BACKGROUND
At the Board's March 9th meeting, staff presented illustrative flowcharts of the City's
project/application review process before and after formation of the CVRe. The flowcharts
described the general procedural steps required for a typical entitlement application involving
design review, environmental review, and land use approvals (e.g., general plan amendment,
zone change, conditional use permit, variance, etc.).
WITHOUT CYRC
-.. ... ... ... ...-
WITH CYRC
4--1
Staff Report - Item No.4
June 22, 2005
Page 2
The purpose of the flowcharts was to elicit discussion by the Board about when and how the
CVRC and public should actively participate in the project/application review process. The
flowcharts did not elaborate on procedural details or differentiate among the various types and
complexities of projects that are under the purview of the CVRC. Those details are provided in
this report, including in-depth discussion and recommendations on the following three key
strategic elements of the process:
o Early CVRC involvement in project design and development
6 Public input and participation
€) CVRC project review and decision-making
Please refer to the corresponding procedural steps in the flowchart on Page 4. Please also refer
to Attachment 2 for a list of pending projects that are located within redevelopment project
areas. For purposes of this report, those projects are categorized into two groups that should be
distinguished from one another:
1. ENA Projects. These are projects that are located within a redevelopment project
area for which the CVRC has entered into an Exclusive Negotiating Agreement
("ENA") with the developer/applicant. ENAs are an important redevelopment tool
when a development site is under Agency ownership or when there is some form of
Agency involvement requested by the developer/applicant. These projects are
typically of substantial size and complexity and are anticipated to generate significant
tax increment revenues to the Redevelopment Agency and create public benefit for
the local community (e.g., public improvements, amenities, affordable housing, etc.).
ENAs provide a structured process upfront in the design and development stages of a
project concept for early CVRC and public involvement, prior to formal filing of a
development application with the City.
2. Non-ENA Projects. These are projects that are located within a redevelopment
project area for which an ENA has not been entered into by the CVRC and
developer/applicant. These projects encompass a wide range of applications varying
in size and complexity, from minor proposals requiring administrative approval (e.g.,
signs, variances, use permits) to larger development proposals requiring discretionary
approvals of the CVRC, Planning Commission, and City Council (e.g., general plan
amendment, zone change, specific plan). Applicants can seek early, pre-application
technical input and feedback from staff. Prior to the formal filing of a development
application with the City, however, a mechanism or structured process does not
currently exist to provide for early involvement by the CVRC or the public during the
design stages of major development proposals. Almost all of the projects listed and
described in Attachment 2 fall under the category of non-ENA projects.
Many of the minor, small-scale projects listed in Attachment 2 will be reviewed at the
administrative level by the CVRC Chief Executive Officer (CEO), similar to a zoning
1-d.-
Staff Report - Item No.4
June 22, 2005
Page 3
administrator. The administrative review of these projects will continue to be
processed in accordance with the City's existing regulations contained in the Chula
Vista Municipal Code (CVMC). For example, CVMC 19.14.582 establishes the design
review duties and responsibilities of the CVRC, including the administrative role of
the CEO. In accordance with CVMC 19.14.582, the CEO has the discretion, with the
concurrence of the applicant, to act in place of the CVRC in the case of minor
projects, including signs; commercial, industrial, or institutional additions which
constitute less than a 50 percent increase in floor area or 20,000 square feet,
whichever is less; and residential projects of four units or less. These minor projects
will continue to be governed by existing rules and regulations and are not the primary
focus of th is report.
This report focuses on major, large-scale development projects that are anticipated to attract
broader public interest and involvement. The report presents a proposed framework for a
project/application review process for these major projects, including alternative procedural
steps for discussion and consideration by the Board.
RECOMMEN DATION
Staff recommends that the Board:
1. Approve the proposed procedural framework in Attachment 3 for CVRC review and
consideration of development projects and applications.
DISCUSSION
The following sections of this report describe and analyze the key strategic elements of a CVRC
project/application review process. Combined, the elements make up a framework for CVRC
review and consideration of ENA and non-ENA projects and applications. The strategic
elements should:
Q Provide applicants and the public clear and concise information throughout the review
process.
Q Establish easy-to-understand, user-friendly procedural steps.
Q Promote efficient and results-oriented processes and procedures that reduce risk and
encourage high-quality development.
Q Enable early and often public input and participation.
The flowcharts on the following page illustrate the general procedural steps for major ENA and
non-ENA projects/applications which require discretionary approvals of the CVRC, Planning
Commission, and City Council and/or Redevelopment Agency. The strategic elements of the
project/application review framework that are the focus of the rest of this report are highlighted
and numbered in the flowcharts and discussed in the pages that follow.
4-3
Staff Report - Item No.4
June 22, 2005
Page 4
ENA PROJECTS
Issue Request for Qualifications
or
Receive Unsolicited Proposal
Qualify and Select Developer for Site
Project Design Concept
...d-.-1-
Project Description Finalized
CEQA Review
...d-.-1-
PLANNING COMMISSION HEARING
Advisory Review of land Use and
E nvironmental/Resources
( VRC III AI{INC
Iln,1I !)I.~i\',11 I<r>vi('w ,md Advi...nry R('\/iI'W of
I )rdit i\~_;I('('!II{'IIj<,,! l!ldtH ("", I ,Inti U<'('i ,md
flll/ltl )rln1('11t,)I!R(,~0lIJU'"
CITY COUNCIL/ RDA HEARINGS
Final Review of Draft Agreements, Finances,
land Use, and Environmental/Resources
,
, '::.
,
,
,
,
,
,
, ,
, ,
, ,
--
, ,
, ,
, ,
,
,
"./
,. "
,
,
NON-ENA PROJECTS
Application
Subm ittal
Project Design Concept
...d-.-1-
Project Description Finalized
CEQA Review
...d-.-1-
,
PLANNING COMMISSION HEARING
Advisory Review of land Use and
Environmental/Resources
,
,
CVRC IIFARINC
r in,1I D('"ign R{'virw dnt! Advl"ory Rf'vipw of
Lmd U"'I', ,md f:llvirl)nllH'nl,ll/R('<,ourc('<,
,
CITY COUNCIL
Final Review of Draft land Use, and
E nvironmentallResources
4-4
060 SEE CORRESPONDING STRATEGIC ELEMENTS DESCRIBED ON PAGE 2 AND DISCUSSED ON PAGES 5 THROUGH 7
. Blue boxes indicate opportunities for public input on project design.
Staff Report - Item No.4
June 22, 2005
Page 5
o Early CYRC Involvement in Project Design and Development
Background
At the March 9th CVRC meeting, several Directors emphasized the importance of CVRC
involvement in the early stages of a project. Projects under ENAs provide for the earliest
possible involvement of the CVRC Board through the developer selection process and the
review and approval of the ENAs. A similar type of mechanism does not exist, however,
for non-ENA projects. The Board may want to consider structuring a process that requires
early coordination with staff and/or the CVRC for all non-ENA projects.
Applicants can proactively seek early, pre-application input and feedback from staff on
the technical aspects of their proposed projects. Pre-submittal coordination meetings
with staff or the CVRC, however, are not mandatory. To provide applicants upfront
clarity about CVRC processing requirements and identify potential issues early in the
process, the Board may want to consider requiring pre-submittal meeting(s) with staff for
all CVRC projects. The Board may want to additionally require some form of preliminary
design review to facilitate early CVRC involvement in project design and issues
identification immediately following application submittal. Preliminary design review
could be used to gather public input on the high-level goals and objectives for a
development site, and identify potential issues or public concerns about project design.
Alternatives
ENA PROJECTS
Projects under an ENA will provide for early
CVRC involvement through the qualification
and selection of a developer for a site, and
the Board's consideration of an ENA with that
developer. During these stages, the Board
will review in detail the developer's
development experience, financial capacity,
references, commitment to working with the
local community, and their overall fit for a
particular development site.
ALTERNATIVES:
NONE.
NON-ENA PROJECTS
Prior to formal submittal of a development
application, projects without ENAs do not
have a mechanism or requirement for early
staff coordination or CVRC involvement in
project design and issues identification. The
Non-ENA Project Flowchart on Page 4
illustrates this by the empty gray boxes before
and after the "Application Submittal" step.
The Board may want to consider requiring
pre-submittal coordination meeting(s) with
staff and preliminary design review for all
projects.
ALTERNATIVES:
A. Require pre-submittal meeting(s) with
staff and preliminary design review to
determine the high-level goals and
objectives of the developer, CVRC, and
community for the subject site.
4-~
Staff Report - Item No. -4
June 22, 2005
Page 6
f} Public Input and Participation
Background
The importance of public input and participation within the CVRC process was clearly
emphasized by the Board at its first two meetings. Within the CVRC project/application
review framework, the Board should consider when public input and participation is
appropriate and should occur. The adoption of this procedural framework will set the
stage for the Board's subsequent consideration and adoption of a policy for how public
input and participation should occur. (See CVRC Board Staff Report item No.5 of the
June 22, 2006 Agenda.)
in July 2005, the Agency entered into ENAs with developers for five different
development sites located along the Third Avenue downtown business corridor. Each of
those ENAs required two community workshops - one before project design and one
after. (See ENA Project Flowchart on Page 4.) The first workshop provides the developer
and CVRC early public input on the community's goals and objectives for the site before
the developer and architect begin drawing design concepts. The workshop is intended to
assist in project design by identifying the opportunities and challenges of the
development site and location. The second workshop provides an opportunity for the
developer to present a preliminary project design concept to the public for additional
input and participation prior to finalizing the project description for formal application
processing. Although ENAs can provide a contractual vehicle for public input and
participation on a project-by-project basis, a formal policy framework does not exist to
consistently direct when public involvement should occur for all projects. The Board
may want to consider formalizing the public involvement steps within the ENA Project
Flowchart in Attachment 3.
Community workshops are not mandatory elements of the development application
process for non-ENA projects. Prior to formation of the CVRC, the first opportunity for
public input and participation on a development application typically occurred during
the environmental (CEQA) review process, after the project description had been
finalized. Consistent with ENA projects, the Board may want to consider requiring a
public involvement step earlier in the process for all non-ENA projects. This procedural
step would facilitate early public input on project design after an application is submitted
but before the project description is finalized and the environmental (CEQA) review
process begins. This procedural step would also provide the appropriate forum for a
formal CVRC public participation vehicle, upon adoption of a public participation policy
by the Board of Directors.
~ - t,
.
Staff Report - Item No.4
June 22, 2005
Page 7
Alternatives
ENA PROJECTS
ALTERNATIVES:
A. Formalize the public input and
participation steps outlined in the ENA
Project Flowchart (Attachment 3) to
require workshops for all future ENA
projects, before and after the project
design stage of the process.
B. Explore alternative vehicles and formats
for public input and participation.
NON-ENA PROJECTS
Al TERNA JIVES:
A. Require a procedural step for public
input and participation on all Non-ENA
Projects after application submittal but
before finalization of the project
description.
B. Explore alternative vehicles and formats
for public input and participation.
@) CYRC Project Review and Decision-Making
Background
At the March 9th CYRC meeting, the Board received an overview of the functions and
duties of the Resource Conservation Commission (RCC), Design Review Committee
(DRC), Planning Commission, and Redevelopment Agency that are delegable and non-
delegable to the CyRe. All functions and duties of the RCC and DRC have been
delegated to the CyRC within redevelopment project areas. While all of the
administrative and quasi-judicial functions of the Planning Commission within the project
areas have also been delegated to the CyRC, the Commission will continue to play an
important role in the CYRC process for non-delegable, discretionary functions and duties
it is statutorily mandated to carry out, including advisory recommendations to the City
Council on land use decisions (e.g., general plan amendments, zone changes, etc.). To
facilitate these functions and duties, the ENA and Non-ENA Project Flowcharts on Page 4
include a Planning Commission Hearing step in the process prior to the CyRC Hearing.
This will ensure that the CyRC receives all input from the Planning Commission and the
public on land use, design, and CEQA prior to the Board's review and consideration of a
project. The Board should consider establishing a framework for all CyRC projects that
provides for Planning Commission review and consideration of projects, when required,
prior to the CyRe.
Alternatives
ENA PROJECTS
ALTERNATIVES:
A. Establ ish a framework that provides for
Planning Commission review and
consideration of projects prior to the
CVRe.
NON-ENA PROJECTS
Al TERNA JIVES:
A. Establish a framework that provides for
Planning Commission review and
consideration of projects prior to the
CVRe.
4-7
Staff Report - Item No.4
June 22, 2005
Page 8
CONCLUSIONS & NEXT STEPS
The key concepts and strategic elements of the CVRC Project/Application Review Process
described in this report are assembled and organized in the flowcharts in Attachment 3. Staff is
recommending that the Board review and consider the various alternatives identified in this
report, and approve the flowcharts in Attachment 3 as a Procedural Framework for CVRC
Project/Application Review. This framework sets the stage for the Board's subsequent
discussion on alternative methods and vehicles for public input and participation.
ATTACHMENTS
, . CVRC Board Staff Report Item No.3 of March 9, 2006 Agenda - "CVRC Roles and
Responsibilities"
2. List of Pending CVRC Projects
3. Proposed Procedural Framework for CVRC Project/Application Review
PREPARED BY: Ken Lee, Principal Community Development Specialist
~-~
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~~
r~ ~rc~::~
ATTACHMENT 1
TO ITEM #4
June 22, 2006
CORPORi~TIO~j
C'ULi', ViSTA
CVRC Board
Staff Report - Page 1
Item No. 3
DATE:
March 9, 2006
TO:
FROM:
CVRC Board Directors
t<v,I< ,..,-~ t,c,
:\0,1 :r-:-. 1.1\ .
Dana M. Smith, Secr'etar-y,
David D. Rowlands, J~hief Executive Officer
VIA:
SUBJECT:
Review of the Roles and Responsibiiities of the CVRC
The following informational report provides a summary overview of the functions and
duties of the CVRC related to the review of development projects, programs, and polices,
including the responsibilities of the Corporation and the role of the Board of Directors.
This report is for discussion purposes only and is intended to engage the Board in high-
level dialogue to set the stage for developing strategies, methods, and frameworks for
processing future projects, including a formal project review process and a model for
public input and participation. As an informational report, no formal action is required by
the Board on this Agenda Item.
BACKGROUND
For more than two years, the City of Chula Vista worked with the Urban Development
Committee (UDC), local leaders, stakeholders, and community groups to develop a
framework for the formation and establishment of the Chula Vista Redevelopment
Corporation. The creation of the CVRC is an important milestone in the City's efforts to
facilitate the re-planning and revitalization of western Chula Vista. The CVRC provides the
City and the public an important, independent forum and decision-making body solely
dedicated to planning and redevelopment activities within the City's redevelopment
project areas (Attachment A). By consolidating the functions and duties of the Design
Review Committee (DRC), Resource Conservation Commission (RCC), Planning
Commission, and Redevel~pment Agency into a single review body, the CVRC provides
continuity, consistency, and clarity for development activities within redevelopment
project areas. The technical depth and professional expertise of the nine-member CVRC
Board also supports well-informed, balanced decisions to ensure development projects of
the highest quality in Chula Vista.
,
,
This report is an extension of the May 24, 2005 Joint City Council/Redevelopment Agency
Agenda Statement and outlines in greater detail the various functions and responsibilities
of the DRC, RCC, Planning Commission, and Agency that will be assumed by the CVRe.
4-1
Staff Report - Item No.3
Page 2
It also begins a discussion about how these critical functions interrelate and should be
carried out to create a clear, understandable development process that provides
opportunities for civic engagement consistent with the following CVRC Principles of Public
Participation (adopted by the City Council on May 24,2005):
<=:> Early and often
<=:> Open, inclusive, and accessible
<=:> Educational and informative
RECOMMEN DATION
Staff recommends that the Board:
1. Receive and file this report.
2. Direct staff to return in March and April with comprehensive staff reports on:
a. Alternative processes and procedures for CVRC review and consideration
of development projects, including financial review, design review,
resource conservation, and land use.
b. Alternative strategies and methods of public input and participation in
the CVRC process.
DISCUSSION
. .
The CVRC will set the tone for how redevelopment occurs through the decision-making
processes it establishes. An understanding of the roles and responsibil ities of the CVRC is
fundamental in shaping a process that clearly distinguishes what types of projects the
CVRC will review, how those projects are reviewed and analyzed, and the importance of
on-going public participation. The following sections of this report provide an overview of
the various functions of the various commissions and committees that have been delegat€d
to the CVRC Board and outline the development application process as it exists today.
REDEVELOPMENT AGENCY
The goal of the Redevelqplllent Agency is to create a vital community through the
establishment of collaborative publidprivate partnerships. This requires a strategic focus
on creating economic vitality, market confidence, vibrant environments, robust commerce,
and a sense of community. The CVRC can provide that focus through its unique and
independent forum, and by making final decisions and advisory recommendations to the
Agency on plans, policies, and agreements, as shown in the chart below. It is important
to note that certain fiduciary responsibilities or statutory authorities of the Agency are non-
delegable functions that the CVRC cannot make independent and final decisions on. For
those items, the CVRC serves in an advisory capacity to the Agency.
~-IO
Staff Report - Item No.3
Page 3
REDEVELOPMENT
FUNCTIONS
DEcisioNS RECOMMENDA:[I(}NS _ "
.~ , . - -'
CVRC shall assume and carry out
planning and redevelopment functions of
the Redevelopment Agency with respect
to the following items ICVMC
92.55.060IBII:
. Exclusive negotiating agreements
. Replacement housing plans
. Loans and expenditures involving
CVRC funds
CVRC shall review and make
recommendations to the Redevelopment
Agency on the following legis!ative
ICVMC 92.55.060IA)) and/or fiduciary
IBylaws) items:
. Disposition and development
agreements
. Owner participation agreements
. Purchase and sale agreements
. Eminent domain
. Redevelopment plans and
implementation plans
. Relocation plans
. Financial transadions not involving
CVRC funds Isuch as issuance of tax
increment bonds)
PLANNING COMMISSION
The purpose of the Planning Commission is to enhance the quality of life in the
community by planning for sound infrastructure, public services, protection of the
environment, and promotion of high quality social and economic growth. The
Commission evaluates major land use propospls; conducts public hearings on significant
planning, zoning, and land subdivision matters; and recommends actions and policies to
the City Council. The Planning Commission plays an important role in land use decisions,
including certain state-mandated functions of the Commission that are non-delegable to
the CVRe. The administrative and quasi-judicial functions of the Planning Commission
that are delegable to the CVRC are listed below under "DECISIONS." The following chart
illustrates a sample list of planning functions that have been assigned to the CVRC for final
decisions and advisory recommendations to the City Council.
PLANNING
FUNCTIONS
DECISIONS RECOMMENDATIONS
CYRC shall assume and carry out the
plannin~functions of the Planning
Commission within redevelopment areas
with respect to the following
administrative and quasi-judicial items
192.55.050IB)):
. Variances
. Conditional use permits
. Lot line adjustments
. Historical perm its
. Other administrative and quasi-
judicial nlanning: items
L/-If
CVRC shall review and make
recommendations to the City Council
within redevelopment areas on the
following legislative items*
192.55.050IA)):
. General plan, specific plans, general
development plans, precise plans, and
sectional planning areas
. Loca! coastal plan
. Zoning regulations
. Planning-related development
agreements
Staff Report - Item No.3
Page 4
. DECISIONS . . RECOMMEN6AIIONS .'
. Environmental documents or
exemptions for the above
. Environmental documents or
exemptions for the above
"'/n addition to recommendation by the
Planning Commission
DESIGN REVIEW COMMITTEE
The role of the Design Review Committee (DRC) is to ensure that development is orderly,
of high quality, and consistent with city-approved design guidelines. The primary function
of the DRC is to review projects for aesthetics and the exterior design of buildings,
including landscaping and architecture. The CVRC will playa critical role in ensuring that
development projects are consistent with the City's vision for urban Chula Vista and are of
highest quality and community benefit. The basis for this review and consideration is the
City's Design Manual, adopted on September 6, 1994 (Attachment B), and other design
guidelines contained with applicable specific plans (e.g., Auto Park Specific Plan, the
pending Urban Core Specific Plan). In accordance with the Manual and guidelines, the
review process includes site plans, elevations, signs, landscape areas, and materials.
The following chart reflects the purpose of the Design Review Committee and provides a
general list of functions that the CVRC will assume within redevelopment project areas:
RECOMMENDATIONS
DESIGN REVIEW CVRC shall review and make recommendations to the City
FUNCTIONS Council andlor Redevelopment Agency on the following
Design Review Committee functions within redevelopment
areas (1j2.SS.080):
. Plans for the establishment, location, expansion or
alteration of uses or structures in all R-3 zones,
commercial and industrial zones and within
redevelopment project area boundaries
. Plans for the establishment, location, expansion or
alteration of multiple-family dwelling uses, major use
permits and commercial or industrial projects or structures
located within the 1985 Montgomery annexation area,
~ ~ and governed by Chapter 19.70 CVMC
. Site plans, landscaping and the exterior design of
buildings for consistency with city-approved design
guidelines
. Appeals filed to contest sign design rulings of the zoning
administrator
4-/2.
Staff Report - Item No.3
Page 5
RESOURCE CONSERVATION COMMISSION
The Resource Conservation Commission (RCC) provides recommendations to the City
Council in the areas of energy conservation, resource recovery, environmental quality,
historic and prehistoric site protection. The RCC also makes recommendations on the
adequacy of environmental documents prepared under the California Environmental
Quality Act. The RCC studies legislation and issues regarding the environment, and works
with other agencies and citizen groups to provide the City Council with information on
natural resources, energy conservation, and historical sites. These roles and
responsibilities are complementary to the CVRC's redevelopment, planning, and design
review functions and will be important to the City's conservation goals and policies.
The following is a general list of the Resource Conservation Commission functions that the
CVRC will assume within redevelopment project areas.
RESOURCE
CONSERVATION
FUNCTIONS
ENERGY
CONSERVATON
& RESOURCE
RECOVERY
HISTORIC
PRESERVATION
ENVIRONMENTAL
QUALITY
RECOMMENDATIONS
CVRC shall review and make recommendations to the City Council
and/or Redevelopment Agency on the following Resource
Conservation Commission functions within redevelopment areas
192.55.070):
. Assessment ofthe goals, policies, procedures and regulations of
the City in relation to resource conservation
. Review of aJ I proposed energy or resource conservation or
recovery policies, pr!?grams or regu lations
. Inspect any site whicn the Commission believes could meet the
criteria for a historical site
. Explore means for the protection, retention and preservation of
any historical site, including but not lim ited to, appropriate
legislation and financing
. Provide direction to staff for the preparation and maintenance of
a register of all designated historical sites
. Coordinate its activities with the county, state and federal
government as appropriate
. Recommend to the City Council designation of any site, which it
has found to meetthe criteria as a historical site
. Review all CEQA environmental documents and make
\ recommendations on adequacy
PROJECT REVIEW
Each of the functions of the Planning Commission, DRC, RCC, and Redevelopment
Agency (RDA) play an important role in the City's goals to promote revitalization and high-
quality development. It is not only important for the CVRC Board to understand what
these functions are, but also understand how they interact or should interact. The City's
development application process, prior to formation of the CVRC, is illustrated in the
following flowchart.
4-/3
Staff Report - Item No.3
Page 6
The next flowchart illustrates the development application process as it functionally exists
today under the CVRC within redevelopment project areas.
At the CVRC's March 23, 2006 Regular Meeting, staff will be presenting a report with
alternatives and recommendations for creating a CVRC review process for Box #3 (above).
At that ti me, staff wi II askith~ Board to adopt a CVRC review process that supports the
goals of redevelopment while providing opportunities for public input and participation.
The CVRC should consider the integration of the procedural steps above into a more
streamlined process wherever possible, with the goal to create the most thorough, but
efficient and timely, project review process possible. As discussed by the Board at the
February 23, 2006 Regular Meeting, this could include the use of smaller technical
advisory committees to work with staff and developers on project details, and to make
recommendations to the full Board.
4 -11
Staff Report - Item No.3
Page 7
PUBLIC INPUT AND PARTlClPA TlON
In crafting a CVRC project review process, the Board will also need to consider when and
how public input and participation should occur in the process. The importance of this
step in the process was strongly emphasized by the Board at its inaugural kickoff meeting.
On May 24, 2005 staff presented an extensive report on public participation strategies for
the CVRC, including guiding principles and a conceptual framework for participation. The
Council adopted the CVRC Principles of Public Participation as formal policy statements
and directed staff to prepare a comprehensive recommendation package on a formal CVRC
public participation process for final review and consideration by the full nine-member
Board of Directors.
Staff is currently in the process of contracting with a consultant, the Institute for Local
Government (lLG), to work with the Council, staff, and the public on a civic engagement
program for the City of Chula Vista. The consultant's scope of work includes community
and stakeholder interviews and data gathering, an assessment of the existing public
involvement opportunities, analysis of alternative methods for greater public engagement
(we expect the consultants to examine a broad range of tools and structures that expands
the access of the public to city decision-making), and a recommended public involvement
and education plan. ILG, a nonprofit research arm of the League of California Cities,
would begin work April 1, and conclude at the end of September. During the process of
developing this citywide public involvement plan, the consultant will be available to
advise and support staff and the CVRC Board on the development and adoption of a formal
public participation process consistent with the goals of the council policy of early and
often public input.
Staff will be returning in April with subsequent reports that will discuss how the public
involvement process, both formal and informal, is critical to the CVRe's project review
process, policy determinations, and long range planning efforts. Staff will provide public
input/dialogue alternatives and recommendations for discussion and action by the Board.
CONCLUSIONS & NEXT STEPS
Your Board will be maki~g several important procedural decisions over the next few
months. These actions will set the precedent for the future work of the CVRC and build
capacity for high performance as an efficient and effective organization. At the Board's
next meeting on March 23, staff will be presenting a comprehensive report with
alternatives and recommendations on a formal CVRC project review process. The project
review process will set the stage for the Board's review and consideration of alternative
strategies for public input and participation within the CVRC project review process. Staff
will be presenting staff reports and a comprehensive recommendation package on public
participation in April.
4 -I S-
Staff Report - Item No.3
Page 8
A IT ACHMENTS
A. Map of Redevelopment Project Areas
B. Design Guidelines
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Civic Engagement Assessment and Strategy
Displacement Study
Information/Education materials to community
Resource Plan
TCPAC Elimination
Inclusionary Housing
\
Audience
City CVRC
,
,
4-~q.
PROCEDURAL FRAMEWORK FOR
CVRC PROJECT/APPLICATION REVIEW
ATTACHMENT 3
TO ITEM #4
June 22, 2006
ENA PROJECTS
NON-ENA PROJECTS
Issue Request for Qualifications
or
Receive Unsolicited Proposal
Pre-Submittal
Meeting!s) with Staff
Qualify and Select Developer for Site
Application
Submittal
COMMUNITY WORKSHOP
Public Input on
Preliminary Project Design
Project Design Concept
Project Design Concept
~
~
Project Description Finalized
Project Description Finalized
CEQA Review
CEQA Review
~
~
PLANNING COMMISSION HEARING
Advisory Review of Land Use and
Environ mental/Resources
PLANNING COMMISSION HEARING
Advisory Review of Land Use and
Environ mental/Resources
(VRC HEARING
rill.1I Df'sign I{pvipw ,md Advisory Review of
Ur,lfl AgrpPllwnh, Fin,Jnn"'1 Land USE', dnd
[IW ironll1Pll1 d IIR{'sources
CVRC HEARING
Findl Design Review dnd Advisory Review of
Land Use dnd Enyironnwlltdl/Resources
CITY COU NCI L
Final Review of Land Use and
E nvironmental/Resources
CITY COUNCIL / RDA HEARINGS
Final Review of Draft Agreements, Finances,
Land Use, and Environmental/Resources
. Blue boxes indicate opportunities for public input on pr~ d~i:l:.s:
ITEM #4
CVRC RESOLUTION NO.
RESOLUTION OF THE CHULA VISTA REDEVELOPMENT
CORPORATION APPROVING A PROCEDURAL FRAMEWORK
FOR CVRC REVIEW AND CONSIDERATION OF DEVELOPMENT
PROJECTS AND APPLICATIONS
WHEREAS, on March 9, 2006, the Chula Vista Redevelopment Corporation ("CVRC")
received the first of two staff reports that provided a comprehensive overview of the functions
and duties of the CVRC; and
WHEREAS, the March g, 2006 staff report provided an informational foundation for
discussion and consideration by the Board of Directors of a procedural framework for
processing and reviewing development projects and applications; and
WHEREAS, the purpose and intent of the procedural framework are to: 1) Provide
applicants and the public clear and concise information throughout the review process; 2)
Establish easy-to-understand, user-friendly procedural steps; 3) Promote efficient and results-
oriented processes and procedures that reduce risk and encourage high-quality development;
and 4) Enable early and often public input and participation; and
WHEREAS, projects under CVRC jurisdiction within redevelopment project areas are
categorized as ENA (Exclusive Negotiating Agreement) Projects and Non-ENA Projects; and
WHEREAS, ENA Projects are typically of substantial size and complexity and create a
public benefit for the local community, and an Exclusive Negotiating Agreement ("ENA') has
been entered into by and between the CVRC and the developer/applicant; and
WHEREAS, Non-ENA Projects encompa~s a wide range of applications varying in size
and complexity, and an ENA is not necessary or required; and
WHEREAS, the procedural framework for the CVRC project/application review process
for both ENA Projects and Non-ENA Projects (attached as Exhibit 1) includes the following key
strategic elements:
1. Early CVRC involvement in project design and development;
2. Public input and participation;
3. CVRC project review and decision-making; and
4. Thresholds fo~ early design review and public participation.
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Chula Vista
Redevelopment Corporation does hereby:
1. Approve the procedural framework for CVRC review and consideration of
development projects and applications as illustrated in Exhibit 1.
Presented by:
Approved as to form by
G 'Y'V\~
Ann Moore
General Counsel
Dana M. Smith
Secretary
t
.
..
CORPORATION
(HULA VISTt\
CVRC Board
Staff Report - Page 1
Item No. 5
DATE:
June 22, 2006
TO:
CVRC Board of Directors
/'
'j!
VIA:
Jim Thomson, Interim Chief Executive Officer
FROM:
Eric Crockett, Redevelopment Manager @)
SUBJECT:
CVRC Public Participation Process
At the CVRe's May 25, 2006 regular meeting, the Board directed staff to return on June 22 with
a proposed model for public participation. This report is the final phase of a three-part
discussion to: (1) establish the roles and responsibilities of the CVRC (Attachment 1 of CVRC
Board Staff Report Item No.4 of June 22, 2006 Agenda); (2) adopt a procedural framework for
the CVRe's project/application review process (CVRC Board Staff Report Item No.4 of June 22,
2006 Agenda); and (3) adopt a public participation process for the CVRe. This report provides a
comprehensive background discussion on public input and participation and makes a
recommendation on a public participation process.
BACKGROUND:
On May 24, 2005, the City Council and Redevelopment Agency took several joint actions to
officially form the Chula Vista Redevelopment Corporation. A large focus of the staff report, and
the Council and Agency's discussion that evening, centered on public input and participation
within the CVRC framework. To lay the appropriate context for those discussions, the joint
bodies adopted three "Principles of Public Participation" to guide the civic engagement efforts of
the CVRC:
1. Public input and participation should occur early and often.
2. Public input and participation should be open, inclusive, and accessible.
3. Public input and participation should be educational and informative.
Under these overarching principles, the Council and Agency held preliminary discussions about
a conceptual framework for public participation developed from six months of staff research and
community dialogue on alternative models and approaches. The conceptual framework
contained key elements of a public participation process, including the concept of a community-
wide Redevelopment Advisory Committee ("RAC") for the CVRe. This report revisits that
conceptual framework and reviews the RAC and CVRC as two alternative vehicles for gathering
early input on project design.
..5-1
Staff Report - Item No.5
June 22, 2006
Page 2
RECOMMEN DA TIONS:
Staff recommends that the Board of Directors:
1. Consider the two public participation process alternatives outlined in the conceptual
framework of this report and either:
a. Adopt the resolution approving a public participation policy that establishes a
community-wide Redevelopment Advisory Committee ("RAC") to gather early
public input and make recommendations to the CVRC on project design. (See
Flowchart 1 in Attachment l-A.)
OR
b. Adopt the resolution approving a public participation policy that establishes
the CVRC as the public participation vehicle to gather early public input on
project design. (See Flowchart 2 in Attachment l-B.)
DISCUSSION:
The concept of a Redevelopment Advisory Committee ("RAC") was formulated from a six-month
series of staff-driven research and outreach activities undertaken between November 2004 and
May 2005, including:
0:> The review and analysis of two proposals that had been jointly developed and
recommended by the Planning Commission, Design Review Committee ("DRC"), and
Resource Conservation Commission ("RCC).
0:> Working sessions with local community groups - Crossroads II, Chamber of Commerce,
Downtown Business Association - to solicit ideas and brainstorm different approaches to
public participation.
0:> The review of public process examples from other redevelopment agencies and 501 c3
models, including the City of San Diego's Centre City Development Corporation
("CCDC"), the San Jose Redevelopment Agency ("SJRA"), and the Sacramento Housing
and Redevelopment Agency ("SHRA").
0:> A comparative analysis of community-wide and neighborhood-based models with
particular attention paid to staffing and other resource demands.
The following sections of this report describe each of these activities and provide a background
discussion of staff's research and exploratory efforts.
City Staff Research and Outreach
Stakeholder Working Sessions
During the month of March 2005, staff held two separate working sessions with: (1)
Crossroads II and (2) the Chamber of Commerce ("Chamber") and Downtown Business
Association ("DBA"). The purpose of these sessions was to solicit input from these active
stakeholder groups on the actual form and format of public input and participation within the
5-.;J..
Staff Report - Item No.5
June 22, 2006
Page 3
CVRe. The following summaries highlight key points that were raised in the stakeholder
working sessions.
· Crossroads II. Approximately 20 to 25 persons attended and participated in the
working session. Participants expressed the need to facilitate early opportunities for
public input and participation on redevelopment proposals. Design review was
identified as an important focus of public participation and dialogue. Other key
topics and themes that participants raised included:
o Identification of the various stakeholders in the community that should be
included in public discussions around redevelopment and the CVRC: Chula
Vista residents, local businesses (both tenants and property owners), DBA,
Chamber, local churches, schools, local non-profit organizations, and other
"grassroots" groups.
o Preserve the existing City commission/committee system.
o Create a citizen-based, community-wide advisory committee to provide
recommendations to the CVRe.
o Create neighborhood or community planning groups to provide
recommendations to a community-wide advisory committee, which would, in
turn, make recommendations to the CVRe. These neighborhood or
community planning groups could be structured similar to the model used in
the City of San Diego and CCDe. Planning group boundaries could be drawn
using elementary school service,areas.
Following the working session, the Crossroads II Steering Committee met on March
25, 2005 to review meeting notes and comments generated in the working session
and their membership. At that meeting, the Committee reached consensus to support
the two public process concepts jointly developed by the Planning Commission,
DRC, and RCC (described later in this report), but that additional refinements needed
to be made to the precise makeup of the proposed community-wide Planning Area
Commission.
· Chamber & DBA. The Chamber of Commerce and Downtown Business Association
(now known as the Third Avenue Village Association) held a joint meeting of their
Boards for the purp'fse of hosting a working session with City staff. Approximately 25
to 30 persons attentJed and participated. Participants at this session also stressed the
importance of early input and participation in redevelopment. Participants further
expressed that public. participation should occur early and often within the Exclusive
Negotiating Agreement ("ENA") process (described in CVRC Board Staff Report Item
No.4 of June 22,2006 Agenda). Other key topics that participants raised included:
o Create several informal or formal community groups for different areas of the
City for early input and participation. This would promote inclusiveness
through smaller, more intimate groups.
,5-3
Staff Report - Item No.5
June 22, 2006
Page 4
o Create one single advisory body with representation from all of the various
community groups in the City. This would require fewer meetings and less
resources.
o I ncl ude representatives from eastern Chu la Yista to encourage a cohesive
community and promote citywide continuity of development and
redevelopment discussions. Input from eastern Chula Yista could also provide
important feedback on the types of businesses and uses that would attract
residents from the east.
o Allow for public input and participation without delaying the redevelopment
process.
o The DBA expressed their desire to act as the design review body for the
downtown business district.
A common theme from both working sessions was the format of public input and
participation, including the pros and cons of: (1) establishing a more formal and community-
wide advisory committee that would provide recommendations to the CYRC on
development proposals; and (2) creating smaller neighborhood-based groups throughout
CYRC territories that would provide input and participation on area-specific development
proposals. Further discussions around this theme will follow.
City Commission/Committee joint Proposals
On January 10,2005, the Planning Commission, ORC, and RCC held a joint meeting of their
Boards to review the CYRC's formation and how it would impact their roles and
responsibilities in the City. While the CYRC does not impact the roles and functions of the
three bodies outside of the CYRC's jurisdictional boundaries, within those boundaries, the
three bodies jointly proposed two alternative flowchart concepts for the processing of
development proposals. The flowchart proposa1s are available for reference in Attachment 2.
· Proposal #1: "Commission Concept". The first of the two flowcharts would maintain
the Planning Commission, ORC, and RCC as formal review bodies for development
proposals within the CYRC's boundaries, but expedite the timeframes for the three
bodies' review prior to CYRC hearing. This process is consistent with the manner in
which development proposals are currently reviewed outside of the CYRC's
boundaries and allOfVsithese bodies an opportunity to comment on proposals after the
design phases are complete. -
· Proposal #2: "PAC Concept". The second flowchart would require development
proposals to first be reviewed by a "Planning Area Commission" prior to CYRC
hearing and consideration. Similar to Proposal #1, this process would allow the
Commission an opportunity to comment on proposals after the design phases are
complete. The Planning Area Commission would consist of nine members as follows:
o Six "core" members:
5-4
Staff Report - Item No.5
June 22, 2006
Page 5
. Two from Planning Commission
. Two from DRC
. Two from RCC
o Three community members from the following possible categories:
. DBA
. Chamber of Commerce (outside of the Urban Core)
. Sweetwater Union High School District
. Chula Vista Elementary School District
. Heritage Museum
. Mobile homes
. Resident in the Urban Core
. Resident at-large (outside of the Urban Core)
Proposal #2 is consistent with the conceptual theme of creating a community-wide advisory
committee for all redevelopment and Urban Core proposals. As previously noted, similar
conceptual discussions were raised during staff's working sessions with Crossroads II,
Chamber of Commerce, and DBA. This continuing theme is further reviewed in the
following examples of public processes that incorporate both community-wide and
neighborhood-based approaches.
Other Examples of Public Processes - Community-Wide and Neighborhood-Based
To gain broader perspective on different moqels and approaches, staff took the opportunity
to research the following relevant examples of public processes used in other redevelopment
agencies and nonprofit models.
· Sacramento Housing and Redevelopment Agency ("SHRA")
o Public Process. SHRA is a joint powers authority formed by the City and
County of Sacramento. SHRA has created and established Redevelopment
Advisory Committees ("RACs") for each of the Agency's 12 project areas. The
RACs serve as an expanded form of project area committees ("PACs") which
redevelopment agencies are legally required to form for each redevelopment
project area. PACs serve an initial statutory three-year term as an advisory
body to redFvelopment agencies on housing-related issues. SHRA's RACs
expand the scope of these traditional PACs to promote and provide for public
input and participation beyond the statutory three-year term of a PAC and
beyond the limited housing-related scope of a PAC. There is a RAC for each of
the SHRA's project areas, which encompass fairly large territories, mostly
within City jurisdiction.
o Appointment Process. Similar to the traditional makeup of a PAC, each RAC is
made up of approximately 12 members from three different categories: (a)
residential owners and tenants, (b) business owners, and (c) community
S-S"
Staff Report - Item No.5
June 22, 2006
Page 6
organizations. RAC members are appointed by the City Council member
whose council district encompasses the respective RAe's project area.
o Staffing. SHRA has more than 300 full-time employees, including both City
and County staff, who oversee and manage the various activities and projects
in the project areas. SHRA has a Community Development
Department of 75 full-time staff, along with three dedicated full-time staff in
the Public & Internal Communications Department, that are available to
provide staff support and resources to the 12 RACs.
· San Jose Redevelopment Agency ("SJRA")
o Public Process. SjRA is a public, nonprofit organization that has adopted a
"Strong Neighborhoods Initiative" for San Jose that establishes neighborhood-
based advisory committees for each of the City's 20 designated "Strong
Neighborhoods." The neighborhood advisory committees are comprised of
residents, business owners, and property owners and establish priorities for the
planning and implementation of redevelopment activities and public
improvements in their local areas. In addition, the Agency has established a
community-wide Project Area Committee, a 52-member advisory body, which
represents all 20 Strong Neighborhoods and makes advisory recommendations
to the SjRA on redevelopment policies and activities.
o Appointment Process. Each neighborhood advisory committee consists of
approximately 20 representatives, including residents and business owners.
The 52 members of the community-wide PAC are elected by their respective
Strong Neighborhoods and appointed by the City Council.
o Staffing. SjRA has more than 100 full-time employees, 25 of which are
dedicated to providing staff support for the Strong Neighborhoods and their
various neighborhood advisory ,committees. SjRA's Communications and
Community Relations division also manages and facilitates all internal and
external communications (e.g., public affairs, publication and website
development, media and intergovernmental relations, community relations).
· Centre City Development Corporation ("CCDC")
o Public Process. Similar to both Sacramento and San jose, CCDC in San Diego
uses an eXPilnaled form of a PAC referred to as the Centre City Advisory
Committee ("CCAC"). CCAC, in conjunction with smaller, local neighborhood
groups, provide public input and participation on development proposals
through an established Design Review Process (see flowchart in Attachment 3).
The Design Review Process provides the public, staff, and developers early
opportunities for "pre-design" dialogue and discussions on larger development
proposals (more than 50 units or 100,000 square feet) and uses both the CCAC
and smaller neighborhood groups (e.g., Little Italy, Horton, Gaslamp, Marina,
etc.) as public forums for these discussions.
.$ - C::,
Staff Report - Item No.5
June 22, 2006
Page 7
o Appointment Process. The CCAC is comprised of 28 members who represent
eight distinct downtown San Diego neighborhoods. Members are elected to
two-year terms by their respective communities. CCAC representation
includes: (a) 11 business owners, (b) six residential owner-occupants, (c) seven
residential tenants, (d) two civic group representatives, (e) one cu Itural group
representative, and (f) one charitable organization representative.
o Staffing. In addition to CCDe's day-to-day operations and activities, their 48-
member staff provides support and resources to the CCAC
Community-wide and neighborhood-based models each have pros and cons. In general,
neighborhood-based models provide greater accessibility and inclusiveness because of their
localized focus on creating public forums within the affected neighborhoods. They require,
however, a substantially larger commitment of staff support and resources to manage and
maintain. Staff sizes of the example agencies described in this report range anywhere from
five to fifteen times larger than the staff currently assigned to the CVRC The CVRC Board
could also consider a hybrid approach, similar to that used in CCDC, combining and taking
advantage of both community-wide and neighborhood-based models while keeping staff and
resource needs at manageable levels.
Conceptual Frameworks for Public Participation
Based on staff's research and review, input received from stakeholders, and the adopted
Principles of Public Participation, staff has developed the following conceptual frameworks
for a public participation process.
CONCEPTUAL FRAMEWORKS FOR CVRC PUBLIC PARTICIPATION
1. Early Public Workshop. Early public input and participation during the pre-design phases of a
development proposal was an important theme in the stakeholder working sessions. It was
also a high priority in the example agencies' public processes, and a key principle in the
"CVRC Principles of Public Participation." As proposed in the staff report for Item No.4 of
the June 22, 2006 Agenda, early input and participation could be facilitated through public
workshops, possibly design charrettes, as a mandatory step in the application process for both
ENA and non-ENA projects, as defined in that report. For ENA projects, an early public
workshop is required as a key milestone within the development schedule. Staff suggests that
these public worksho~s be conducted and facilitated through either a community-wide
Redevelopment Advisory Committee or the CVRC, as discussed below.
2. Public Participation Alternatives
a. Chula Vista Redevelopment Advisory Committee (NRAC"). The concept of a community-
wide RAC for the CVRC has been suggested through staff's research efforts, including its
review of the joint proposal (#2) of the Planning Commission, DRC, and RCC, and the two
stakeholder working sessions with Crossroads" and the DBA and Chamber of Commerce.
If approved, the RAC would be responsible for reviewing and taking early public
5-7
Staff Report - Item No.5
June 22, 2006
Page 8
comment on the design elements of development projects (e.g., architecture, amenities,
plazas, parks, water features, landscaping, etc.) and providing input to the CVRC and
developer for consideration as part of project design. After design, the RAC would hold
one public meeting to take final public comments and make final recommendations and
comments to the CVRe. This process would be integrated into the procedural framework
for CVRC project/application review (see CVRC Board Report Item No.4 of June 22, 2006
Agenda).
If the RAC process is approved, staff suggests that the RAe's composition consist of
representatives from the following categories, and, for manageability reasons, that the size
of the RAC not exceed 13 members.
. Two Members from Planning Commission - Provides consistency for land use
policies and development standards inside and outside of the CVRe.
. Two Members from Design Review Committee - Provides consistency for
architectural standards and design guidelines inside and outside of the CVRe.
. Three Business Owners - Staff suggests that local business representatives include, at
a minimum, one business owner from the Downtown business district, one from the
Broadway commercial corridor, and one from the Southwest industrial zone.
. Two Residential Owner-Occupants - Staff suggests owner-occupant representation
from the Urban Core, Southwest, Bayfront (future), and eastern Chula Vista.
Representation from the East was raised in the working session with the Chamber of
Commerce and DBA as a positive tool for creating community cohesion and for
receiving input on the types of businesses and amenities on the west that would attract
residents regionally.
. Two Residential Tenants - Similar to the "owner-occupants" category, the CVRC may
want to consider tenant representation from eastern Chula Vista, in addition to the
Urban Core, Southwest, Bayfront (future), and other redevelopment project areas.
The flowcharts in Attachment 1-A illustrates how the RAC would integrate into the CVRC
project review framework for both ENA and Non-ENA Projects, including its responsibility
to gather early input and make recommendations on project design before the project
description is finalized.
OR
~
b. CVRC as the Public Participation Vehicle. The creation of the CVRC was an important
milestone in the City's re-planning and revitalization efforts for western Chula Vista. The
CVRC provides the City and public an important, independent forum solely dedicated to
planning and redevelopment activities within the City's redevelopment project areas.
Staff, therefore, is also recommending that the Board consider establishing the CVRC itself
as the vehicle to gather early public input on project design. This would be consistent
with early comments made by the Board in February and March about the value of early
CVRC involvement in project design, including the technical depth and professional
s-fS
Staff Report - Item No.5
June 22, 2006
Page 9
expertise of the CVRC Board to provide early direction on project design. This alternative
would require conservative staffing and resource allocations and provides greater CVRC
direction over the receipt of public input into the design review process. Direct CVRC
involvement in early project design provides a clear and predictable development process
that promotes early public input on project design while maintaining consistency in
direction, thereby minimizing the risk that developers and private investors take on when
they enter into a public process.
The flowcharts in Attachment '-B illustrates how the CVRC would integrate into the
project review framework for both ENA and Non-ENA Projects, including its responsibility
to gather early input and make recommendations on project design before the project
description is finalized.
3. Meetinlls in the Community. To facilitate public input and participation that is open,
inclusive, and accessible, workshops and meetings should be held, whenever possible, in the
affected community or neighborhood of the proposed developments. Meetings in the
community could be held in various public and private facilities (e.g., schools, libraries,
churches, community centers, etc.). This approach would take advantage of the benefits of
both community-wide and neighborhood-based models, but without the extensive staffing and
resource needs to manage and support formal neighborhood planning groups.
4. Public Noticinll. Proactive public noticing practices will help facilitate public input and
participation in the CVRC process that is open, inclusive, and accessible. To promote
inclusive participation from a balanced cross-section of the public, a variety of advertisement
tools should be employed for workshops and meetings of the CVRC and/or RAC, when
appropriate, including: ~
a. Mailers (e.g., notices, flyers, postcards)
b. Publications (e.g., newspaper advertisements or notices)
c. E-mail and other interest lists
d. CVRC web page
e. Live streaming video
CONCLUSIONS & NEXT STEPS:
The adoption of a public p'{ticipation policy for the CVRC is the final step in a series of
foundational actions necessary to organizationally prepare the Corporation for the review and
consideration of upcoming redevelopment projects. The development of a public participation
policy for the CVRC involved six months of intensive research and outreach activities by staff,
including:
<:;> In-depth stakeholder working sessions with Crossroads II, the Downtown Business
Association (DBA), and the Chamber of Commerce
<:;> The review of two public participation proposals jointly developed by the Planning
Commission, Design Review Committee, and Resource Conservation Commission
5 -'1
Staff Report - Item No.5
June 22, 2006
Page 10
Q Research of other agencies' public participation processes, including the Sacramento
Housing and Redevelopment Agency (SHRA), San Jose Redevelopment Agency (SJRA),
and Centre City Development Corporation (CCDC)
Q A comparison of community-wide and neighborhood-based public participation
approaches
Q A review of the City's objectives in creating the CVRC
Based on these important factors, staff is recommending that the CVRC consider the two public
participation process alternatives outlined in the conceptual framework and either:
1. Adopt the resolution approving a public participation policy that establishes a
community-wide Redevelopment Advisory Committee ("RAC") to gather early public
input and make recommendations to the CVRC on project design. (See Flowchart 1 in
Attachment 1-A.)
OR
2. Adopt the resolution approving a public participation policy that establishes the CVRC as
the public participation vehicle to gather early public input on project design. (See
Flowchart 2 in Attachment 1-B.)
Either of these two policy alternatives would complement the proposed "Procedural Framework
for CVRC Project/Application Review" (CVRC Board Staff Report Item No.4 of June 22, 2006
Agenda) and insert either a RAC or the CVRC as the appropriate vehicle for public input and
participation within that framework. Attachments 1-A and 1-B illustrate the role that the RAC or
CVRC would play in the project review procedures for both ENA and Non-ENA Projects,
including their responsibility to gather early public' input on project design before the project
description is finalized.
ATTACHMENTS:
1-A. RAC Alternative - Public Participation/Design Review Process
1-B. CVRC Alternative - Public Participation/Design Review Process
2. City Commission/Committee Joint Proposals for CVRC Public Participation
3. CCDC Design Review Process Flowchart
~ ~
PREPARED BY: Ken Lee, Principal Community Development
.5-10
PROCEDURAL FRAMEWORK FOR
CVRC DESIGN REVIEW
ATTACHMENT 1.A.
TO ITEM #5
June 22, 2006
ENA PROJECTS
NON-ENA PROJECTS
Issue Request for Qualifications
or
Receive Unsolicited Proposal
Pre-Submittal
Meeting!s) with Staff
Qual ify and Select Developer for Site
Application
Submittal
Project Design Concept
Project Design Concept
~
~
Project Description Finalized
Project Description Finalized
CEQA Review
CEQA Review
~
~
eVRC HE;\RIN(~
Flndl [)p\n.;n Rc'vlPw
eVRC HEARING
Fmal Design Rf>vICW
CITY COUNCIL / RDA HEARINGS
Final Review of Draft Agreements and
Finances, and Final Design Review if
Appealed to City Council
CITY COUNCIL HEARING
Final Design Review if
Appealed to City Council
.
Blue boxes indicate opportunities for public input on project design.
S-If
PROCEDURAL FRAMEWORK FOR
CVRC DESIGN REVIEW
ATTACHMENT 1.B.
TO ITEM #5
June 22, 2006
ENA PROJECTS
NON-ENA PROJECTS
Issue Request for Qualifications
or
Receive Unsolicited Proposal
Pre-Submittal
Meeting(s) with Staff
Qualify and Select Developer for Site
Application
Submittal
Project Design Concept
Project Design Concept
--L..-k--
--L..-k--
Project Description Finalized
Project Description Finalized
CEQA Review
CEQA Review
--L..-k--
--L..-k--
( VRC HEARINC
Flndl D(,';lgn RC'vIP\\
CVRC HEARING
F It1dl De';lgn Review
CITY COU NCIL / RDA HEARINGS
Final Review of Draft Agreements and
Finances, and Final Design Review jf
Appealed to City Council
CITY COUNCIL HEARING
Final Design Review if
Appealed to City Council
.
Blue boxes indicate opportunities for public input on project design.
S-(~
COMMISSION CONCEPT
ATTACHMENT 2
TO ITEM #5
June 22, 2006
CO!!, Staff
PrcUmmary Review
FOImS "Red Team"
Corn Staff
1. Land Acq1rlsition
2. Developer liaison
3. CommlJDity Outtcach
4. Financmg
E.I.R.
Public Hearing
Emrinecrina:
1. Traffic
2. lI1frnstruc;tur
3. Add=sing
4. Utilities
Plamrlna: Staff '
I. Design n:view
2. Planning
City Manam
Fiscal Impact
1. Short term
2. Long tenn
3. Feeoffsets
4. Land costs
R.C.C.
D.~C.
P.C.
(Expedited meetings)
(One public hearing eacl1).
.Qml
DccisioDl Approval
Five Council Members
Four Community leaders with expertise
Appointments by Council after public
fterView for two year t=, n:newable
I
-Business
l-Schools
I-Dev. Constr., Rea! E5 e
I-Non-prollt
Atmeal
Council
(Four yotes,to approve)
Aocroval .
Good fur t\>4C yeaISlmust go back 5" -/.3
to PAC for extension
ommunity DeveloDment
1. Land acquisition
2. Developer liaison
3. CO=1.n'llty
Outreach
4. Financing
PAC CONCEPT
Community Development
P!'"HTT'I;T1...'Y Review
Distribution
EnlrlDecrinl!
1. Traffic
2. 1nfnstructurc
3. Addressing
4. UtiHties
Plannimr Staff
1. Design. review
2. Planning'
3. E.I.R.
P1mmin1! Area Comm..i.ssion (PAC)
1. Public Hearing
2. R=mmendatioD to Corp.
.
Corn
Decisiocl Approval
Fiv!: Council Members
Four Community leaders with .CXPer:tise
Appointments by Council after public
interview fur two year tl:m1, renewable
~ .
Atroea.I
Council
(fouivotes to approve)
Aumoval
Good for two years/must go back _ /.1
.:> - 'f:
to P AC for'c:xtcnsio~
City MaIla!!cr
Fiscal Impact
1. Short te=
2.. Long term
3: Fee offsets
4. Land costs
PAC MEMBERSHIP
Two from Design Review Commission
Two from R~o1JICe Conservation Commission
Core
Two from pl"nniT1g Commission
One urban core resident
One at large resideDt (but not urban core)
One from Chamber of Commerce (but not urban core)
One from Downtown Association
One from, Sweetwater VIrion High School District
Three from this group
One from Chula Vista Elementary School Distric.,t
One from Heritage Museum
Mobile Home Group
1
· PAC membe!S appointed by their respective groups for one year term (renewable)
· Residents appointed by Council (same term) .5 _ / s;-
f
NEIGHBORHOOD
GROUPS
(Recommended -
Advisory)
ATTACHMENT 3
TO ITEM #5
June 22, 2006
Applicant
Pre-SubmittaJ staff Meeting(s)
CentreClly~tCcrpc 'en
225 8rcadway, Suite 1100
San Diego, CA 92101
Appication
Submittal
STAFF REVIEW
· Completeness Check
. PuBlic Notice flf necess&y)'
'Environr!lental study Initiated ..
----,
I
I
I
I
I
I
I
I
I
I
I
. STAFF
Design Refinement
Meetirigs
CCAC PRE.:pESIGN
SUBCOMMJ!t1EE
(Reeommendalion)
If 50 units or less and I
or under 100,000 sf
ceDe .
PRESIDENT
. '.
,
ceDe BOARD-
"PROJECTS COMMITTEE
(Recommendation)
If Designated
Historic Resource
ffiSTORtc
. '. RESOURCE
BOARe (HRB)
CITY PlANNING
COMMISSiON Centre City
Development Permit
~- _ I Co
The entire pItX:eSS ~ approximafsly 3 ~ 1c 4 months .
(Jonger fer more complex prcjed:s, if public hearings are required, or an appeal is Involved).
(,r'A~f"a...f.-"":"'_&.,I..,!-__.~_,~ ... _ . _
CCAC
(RecommendatiOn)
If any Agency Dollars or
, Agreement
REDEVELOPMENT
AGENcy
(CITY c,OUNCIL)
~
jI
I
I
I
J
---I
CCDe BOARD
ALTERNATIVE #1 RESOLUTION - REDEVELOPMENT ADVISORY COMMITTEE (RAC)
ITEM #5
CVRC RESOLUTION NO,
RESOLUTION OF THE CHULA VISTA REDEVELOPMENT
CORPORATION ADOPTING A PUBLIC PARTICIPATION POLICY
ESTABLISHING A COMMUNITY-WIDE REDEVELOPMENT
ADVISORY COMMITTEE TO GATHER PUBLIC INPUT AND MAKE
RECOMMENDATIONS TO THE CHULA VISTA REDEVELOPMENT
CORPORATION ON DEVELOPMENT PROJECTS AND
APPLICATIONS
WHEREAS, on March g, 2006, the Chula Vista Redevelopment Corporation ("CVRC")
received the first of two staff reports that provided a comprehensive overview of the functions
and duties of the CVRC; and
WHEREAS, the March g, 2006 staff report provided an informational foundation for
discussion and consideration by the Board of Directors of a procedural framework for
processing and reviewing development projects and applications; and
WHEREAS, the procedural framework for processing and reviewing development
projects and applications identifies when public participation should occur within the CVRC
process and provides the structural foundation for discussion and consideration by the Board of
Directors of a public participation policy for the CVRC; and
WHEREAS, on May 24, 2005, the City Council and Redevelopment Agency adopted the
following "Principles of Public Participation" for the CVRC as formal policy statements:
1, Public input and participation should occur earlv and often,
2, Public input and participation should be open, inclusive. and accessible,
3, Public input and participation should be educational and informative,
and
WHEREAS, on May 24, 2005, the City C6unciland Redevelopment Agency directed
City staff to prepare a comprehensive recommendation package on public participation for
consideration by the full membership of the CVRC Board of Directors upon its formation; and
WHEREAS, based on the adopted "Principles of Public Participation," City staff's
research, and input received from stakeholders, a framework for CVRC public participation has
been developed containing the following key elements:
1, Earlv Desiqn \f1put. Whenever possible, the CVRC should facilitate early input
from the public on the design elements of development projects and applications
that are under the jurisdiction of the CVRC,
2, Public Participation Process, A Redevelopment Advisory Committee ("RAC')
shall be established to review, take public comment, and make recommendations
on development projects and applications that are under the jurisdiction of the
CVRC.
CVRC RESOLUTION NO. _ Page 2
3. MeetinQs in the Communitv. Whenever possible, public workshops and meetings
of the Redevelopment Advisory Committee ("RAC") should be held in affected
the community or neighborhood of the development proposal.
4. Public NoticinQ. The CVRC should employ proactive public noticing and
advertisement practices, when appropriate, to facilitate an open, inclusive, and
accessible public process, including the use of advertisement tools such as
mailers, publications, e-mail and other interest lists, the internet, and live
streaming video.
and
WHEREAS, the RAC shall facilitate public input on CVRC projects and applications in a
manner that is consistent with the adopted procedural framework for CVRC review of
development projects and applications; and
WHEREAS, the CVRC Board of Directors shall determine the composition of the RAC.
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Chula Vista
Redevelopment Corporation does hereby:
1. Adopt a public participation policy of the Chula Vista Redevelopment Corporation
establishing a framework for public participation and establishing a Redevelopment Advisory
Committee ("RAC").
Presented by:
Approved as to form by
CA~
Dana M. Smith
Secretary
Ann Moore
General Counsel
t
ALTERNATIVE #2 RESOLUTION - CHULA VISTA REDEVELOPMENT CORPORATION (CVRC)
CVRC RESOLUTION NO.
ITEM #5
RESOLUTION OF THE CHULA VISTA REDEVELOPMENT
CORPORATION ADOPTING A PUBLIC PARTICIPATION POLICY
ESTABLISHING THE CHULA VISTA REDEVELOPMENT
CORPORATION AS THE PUBLIC PARTICIPATION VEHICLE TO
GATHER PUBLIC INPUT ON DEVELOPMENT PROJECTS AND
APPLICATIONS
WHEREAS, on March 9, 2006, the Chula Vista Redevelopment Corporation ("CVRC")
received the first of two staff reports that provided a comprehensive overview of the functions
and duties of the CVRC; and
WHEREAS, the March 9, 2006 staff report provided an informational foundation for
discussion and consideration by the Board of Directors of a procedural framework for
processing and reviewing development projects and applications; and
WHEREAS, the procedural framework for processing and reviewing development
projects and applications identifies when public participation should occur within the CVRC
process and provides the structural foundation for discussion and consideration by the Board of
Directors of a public participation policy for the CVRC; and
WHEREAS, on May 24, 2005, the City Council and Redevelopment Agency adopted the
following "Principles of Public Participation" for the CVRC as formal policy statements:
1. Public input and participation should occur earlv and often.
2. Public input and participation should be open. inclusive. and accessible.
3. Public input and participation should be educational and informative.
and
WHEREAS, on May 24, 2005, the City Council and Redevelopment Agency directed
City staff to prepare a comprehensive recommendation package on public participation for
consideration by the full membership of the CVRC Board of Directors upon its formation; and
WHEREAS, based on the adopted "Principles of Public Participation," City staff's
research, and input received from stakeholders, a framework for CVRC public participation has
been developed containing the following key elements:
1. Earlv Desiqn Input. Whenever possible, the CVRC should facilitate early input
from the publi~ on the design elements of development projects and applications
that are under the jurisdiction of the CVRC.
2. Public Participation Process. Establish the CVRC as the public participation
vehicle to gather public input on development projects and applications that are
under the jurisdiction of the CVRC.
3. Meetinqs in the Communitv. Whenever possible, the CVRC's public input and
participation meetings on development projects and applications should be held
in affected the community or neighborhood of the development proposal.
CVRC RESOLUTION NO. _ Page 2
4. Public Noticinq. The CVRC should employ proactive public noticing and
advertisement practices, when appropriate, to facilitate an open, inclusive, and
accessible public process, including the use of advertisement tools such as
mailers, publications, e-mail and other interest lists, the internet, and live
streaming video.
and
WHEREAS, the CVRC shall facilitate public input on projects and applications in a
manner that is consistent with the adopted procedural framework for CVRC review of
development projects and applications; and
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Chula Vista
Redevelopment Corporation does hereby:
1. Adopt a public participation policy of the Chula Vista Redevelopment Corporation
("CVRC") establishing a framework for public participation and establishing the CVRC as the
public participation vehicle to gather public input on development projects and applications that
are under the jurisdiction of the CVRC.
Presented by:
Approved as to form by
Dana M. Smith
Secretary
G-~
Ann Moore
General Counsel
"
II