HomeMy WebLinkAboutRDA Packet 2000/05/02
CllY OF
CHUlA VISTA
TUDDAY, MAY 2, 2000
4:00 P.M.
(._IDIATELY FDLLDWlNG TNE CITY CGUNCIL MEETING)
COUNCIL CHAMSIRS
PUBLIC 5ERVlCD BUILDING
JOINT MEETING OF THE REDEVELOPMENT AGENCY /
CITY COUNCIL OF THE CITY OF CHULA VISTA
CALL TO ORDER
ROLL CALL
Agency/Council Members Davis, Moot, Padilla, Salas, and Chair/Mayor Horton
CONSENT ITEMS (Items 1 and 2)
The staff recommendations regarding the following item(s) listed under the Consent Calendar will be
enacted by the Agency by one motion without discussion unless an Agency member, a member of the
public or Oty staff requests that the item be pulled for discussion. If you wish to speak on one of these
items, please fill out a "Request to Speak Form" available in the lobby and submit it to the Secretary of
the Redevelopment Agency or the City Clerk prior to the meeting. Items pul1ed from the Consent
Colendar will be discussed after Action Items. Items pulled by the public will be the first items of
business.
1. AGENCY
RESOLUTION
2. AGENCY
RESOLUTION
ADOPTING NEGATIVE DECLARATION 15-00-09 AND APPROVING
OWNER PARTICIPATION AGREEMENT WITH THE DAN COMPANY FOR
THE DEVELOPMENT OF AN INDUSTRIAL BUILDING LOCATED AT 680 L
STREET WITHIN THE SOUTHWEST REDEVELOPMENT PROJECT AREA-The
Dan Company is proposing the construction of a 36,900 sq. It. industrial building
on a graded vacant lot at 680 L Street located in the Southwest Redevelopment
Project Area. The building will be used for the warehousing and distribution of
commercial goods. [Community Development Director)
STAFF RECOMMENDATION: Adopt the resolution.
APPROVING A CONTRACT AMENDMENT FOR ON-CALL LEGAL SERVICES
IN THE COMMUNITY DEVELOPMENT DEPARTMENT FOR NEGOTIATIONS
ON THE GATEWAY CHULA VISTA PROJECT-Gateway Chula Vista LLC has
proposed to develop approximately 4.5 acres of property located at the northwest
corner of Third Avenue and H Street. The Agency and the development team for
Gateway have been negotiating the terms and conditions far a Disposition and
Development Agreement (DDA) for the project since early 1999. Additional
consultant time, specifically, specialized legal services (not-to-exceed $45,000), is
needed to finalize the negotiations and prepare final documents for presentation
to the Agency in May. [Community Development Director)
STAFF RECOMMENDATION: Adopt the resolution.
11"
AGENDA
.2.
MAY 2, 2000
ORAL COMMUNICATIONS
This is on opportunity for the general public to address the Redevelopment Agency on ony subject
matter within the Agency's jurisdiction that is not an item on this agenda. (State law, however, generally
prohibits the Redevelopment Agency from taking action on any issues not included on the posted
agenda.) If you wish to address the Agency on such a subject, please complete the "Request to Speak
Under Oral Communications Form" available in the lobby and submit it to the Secretory to the
Redevelopment Agency or City Clerk prior to the meeting. Those who wish to speak, please give your
name and address for record purposes and follow up action.
ACTION ITEMS
The items listed in this section of the agenda ore expected to elicit substantial discussions and
deliberations by the Council, staff, or members of the general public. The items will be considered
individually by the Council and staff recommendations may in certain cases be presented in the
alternative. Those who wish to speak, please fill out a Request to Speak form available in the lobby and
submit it to the City Clerk prior to the meeting.
3. a. AGENCY
b. AGENCY
RESOLUTION
APPROVING THE AGENCY FINANCIAL PLAN AND AMENDING
RESOLUTION VARIOUS AGENCY PROJECT AREA FISCAL YEAR 2000
BUDGETS IN ACCORDANCE WITH THE APPROVED AGENCY FINANCIAL
PLAN AND AUTHORIZING THE VARIOUS INTER.PROJECT AREA
ADVANCES AND ADVANCE REPAYMENTS RELATED THERETO, AND
AUTHORIZING THE EXPENDITURE OF LOW AND MODERATE INCOME
HOUSING FUNDS OUTSIDE THE PROJECT AREA-In May 1999, the services
of Rod Gunn Associates (RGA) were secured to prepare an Agency Financial Plan
to evaluate the Agency's financial status. As a result of their analysis, RGA is
recommending the issuance of tax-exempt tax allocation bonds to be secured by
property tax increment from the Otay Valley Road, Town Centre II and Southwest
Project Areas. The bond proceeds would be used to repay some interfund loans
and provide funding far future Agency projects over the next three to five years.
Staff recommends approval of the following resolutions la, b, c and d) approving
the financial plan and associated Agency budget amendment, approving the sale
of the bonds, and authorizing the expenditure of Low and Moderote Income
Housing Funds outside of the project area. [Community Development Director)
r4/5ths: Voh~ rp-rluirAd on rp-s:o.ution rll
AUTHORIZING AND DIRECTING THE ISSUANCE AND SALE OF (I) NOT.
TO.EXCEED $7 MILLION PRINCIPAL AMOUNT 2000 TAX ALLOCATION
BONDS FOR THE TOWN CENTRE NO. II REDEVELOPMENT PROJECT, (II)
NOT.TO.EXCEED $7 MILLION PRINCIPAL AMOUNT 2000 TAX
ALLOCATION BONDS FOR THE OTAY VALLEY ROAD REDEVELOPMENT
PROJECT, AND (III) NOT.TO.EXCEED $4 MILLION PRINCIPAL AMOUNT
2000 TAX ALLOCATION BONDS FOR THE SOUTHWEST REDEVELOPMENT
PROJECT, AND APPROVING AN OFFICIAL NOTICE OF SALE FOR EACH, A
CONTINUING DISCLOSURE CERTIFICATE FOR EACH, APPROVING THE
PREPARATION AND DISTRIBUTION OF A PRELIMINARY OFFICIAL
STATEMENT AND FINANCING DOCUMENTS, AUTHORIZING THE SALE
OF THE 2000 BONDS ON CERTAIN TERMS AND CONDITIONS,
AUTHORIZING CERTAIN OTHER OFFICIAL ACTIONS AND PROVIDING
...
AGENDA
-3-
MAY 2, 2000
FOR OTHER MATTERS PROPERLY RELATING THERETO, AND APPROVING
A CONTRACT WITH ROD GUNN ASSOCIATES FOR FINANCIAL ADVISOR
SERVICES AND WAIVING THE CONSULTANT SELECTION PROCESS AS
IMPRACTICAL
c. COUNCIL
RESOLUTION
APPROVING THE SALE OF THREE SERIES OF REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA 2000 TAX ALLOCATION BONDS FOR
THREE REDEVELOPMENT PROJECTS
d. COUNCIL
RESOLUTION
AUTHORIZING THE EXPENDITURE OF LOW AND MODERATE INCOME
HOUSING FUNDS OUTSIDE OF THE PROJECT AREA
ITEMS PULLED FROM CONSENT CALENDAR
OTHER BUSINESS
4. DIRECTOR'S REPORT(S)
5. CHAIR'S REPORT(S)
6. AGENCY COMMENTS
ADJOURNMENT
The meeting will adjourn to a closed session and thence to an adjourned meeting of the Redevelopment Agency on
May 9, 2000 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers.
CLOSED SESSION
Unless Agency Counsel, the Executive Director, or the Redevelopment Agency states otherwise
at this time, the Agency will discuss and deliberate on the following item(s) of business which
are permitted by law to be the subiect of a closed session discussion, ond which the Agency is
odvised should be discussed in closed session to best protect the interests of the City. The
Agency is required by faw to return to open session, issue any reports of final action taken in
closed session, and the votes taken. However, due to the typical length of time taken up by
closed sessions, the videotaping will be terminated at this point in order to save costs so that
the Agency's return from closed session, reports of final action taken, and adiournment will
not be videotaped. Nevertheless, the report of final action taken will be recorded in the
minutes which will be available in the Office of the Secretary to the Redevelopment Agency
and the City Clerk's Office.
.,.
AGENDA
.4.
MAY 2, 2000
7. CONFERENCE WITH REAL PROPERTY NEGOTIATOR -- Pursuant to Government Code
Section 54956.8
Property: 1) 565-010-30 and 567-011-05 Midbayfront 96.57 acres
2) 567-010-28 8ayfront Park 4.94 acres
3) 567-011-01,565-010-12,565- SDG&E ROW 9.8 acres (appx)
010-15, portion of 565-010-18
4) 567-021-11, portion of 565-290-39 SD&AE ROW 2.3 acres (appx)
5) 565-310-09 & 565-310-25 Street Merziotis 6.35 acres
6) 567-011-04 Marina Motor Hotel 1.0 acres
7) 567-010-18 Cappos 2.01 acres
8) 567 -0 1 0- 1 9 Shangri La 2.73 acres
9) 567-021-32 Lagoon Drive Park 1.14 acres
Negotiating Redevelopment Agency/City of Chula Vista (Chris Salomone); Chula Vista Capital, B.F.
Parties: Goodrich, SDG&E, SD&AE, T uchscher Development Enterprises, Inc.
Under
Negotiation: Price and terms for disposition/acquisition
8. CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING LITIGATION -- Pursuant to
Government Code Section S4956.9(a)
a. Agency vs. Shinohara [Case No. GIS002460]
T'
REDEVELOPMENT AGENCY AGENDA STATEMENT
ITEM NO.:
MEETING DATE: 05/02/00
ITEM TITLE: RESOLUTION ADOPTING NEGATIVE DECLARATION 15-00-09 AND
APPROVING OWNER PARTICIPATION AGREEMENT WITH THE DAN
COMPANY FOR THE DEVELOPMENT OF AN INDUSTRIAL BUILDING
LOCATED AT 680 L STREET WITHIN THE SOUTHWEST
REDEVELOPMENT PROJECT AREA
SUBMITTED BY: COMMUNITY DEVELOPMENT DIRECTOR L~~ \3
REVIEWED BY: EXECUTIVE DIRECTOR G If for 'i),~
4/STHS VOTE: YES D NO 0
BACKGROUND
The Dan Company is proposing to construct a 36,900 sq, ft. industrial building at 680 L Street
within the boundaries of the Southwest Redevelopment Project Area. The building will be used for the
warehousing and distribution of commercial goods. The project is being constructed on a graded
vacant lot and includes the construction of a parking lot and landscaped areas.
The proposed land use is allowed under the General Plan, Southwest Redevelopment Plan, and
Zoning Ordinance. The City's Environmental Review Coordinator reviewed the proposed project
pursuant to the provisions of the California Environmental Quality Act and determined that it
would have no significant impacts and recommended adoption of Negative Declaration IS-OO-
09.
Since the proposed project is within the Southwest Redevelopment Project Area, the environmental
document and the Owner Participation Agreement (which includes the design plans and a list of
conditions) are being presented to the Redevelopment Agency for consideration and approval.
RECOMMENDATION
It is recommended that the Redevelopment Agency approve the resolution adopting the Negative
Declaration and approving, subject to conditions, the Owner Participation Agreement for the
development of an industrial building at 680 L Street.
BOARDS/COMMISSIONS RECOMMENDATION
The Design Review Committee reviewed the proposed project plans on March 6, 2000 and
recommended approval of the project as described in Exhibit A and subject to conditions listed in
Exhibit B of the Owner Participation Agreement.
....
PAGE 2, ITEM NO.:
MEETING DATE: 04/18/00
DISCUSSION
Proiect Description
The project consists of the construction of a 36,900-square foot building (to be divided into 6,000-
square foot spaces); a lOS-space parking lot; and landscaped areas. The proposed building will
consist of tilt-up concrete construction with the addition of glass storefronts and awnings. The project
will utilize two existing curb cuts along L Street and will feature access along and around the
building. Grade level roll-up doors for loading and unloading are proposed for the area along the
rear of the building. The landscaped areas will be provided along the L Street frontage and around
the east and west side of the building. The proposal includes a variety of landscape materials
including grasses, shrubs, and trees.
Site Characteristics
The site for the proposed project is located mid-block on L Street between Broadway and
Industrial Boulevard. It is located in an area of the City which has been fully developed, except
for the subject vacant lot. The proposed project will be next to the building where Solar Turbines
and American Fashion are currently located. The subject site is composed of three parcels, which
together are approximately 4.27 acres. One parcel is occupied by an industrial building, which will
remain there after the other two vacant parcels are consolidated. After the consolidation and
boundary adjustments are complete the proposed project site will be a two-acre parcel where the
proposed structure will be built. The site's surrounding land uses include the Budget Rent a Car
facility to the west, industrial buildings to the east and south, and multi-family residential buildings to
the north.
Land Use Desianations
The subject site is designated Industrial-Research & Limited Manufacturing by the General Plan and
is zoned Limited Industrial (I-L). These designations allow a variety of light industrial and heavy
commercial activities and uses, including wholesale businesses, storage and warehousing. The
owner is proposing to include the Napa Auto Parts distribution warehouse, currently located in a
nearby building where it has been located for several years. Other uses for the rest of the building
have not yet been determined, but they will have to be consistent with those allowed by the Zoning
Ordinance. Based on this assessment, the proposed project is consistent with the General Plan, the
Southwest Redevelopment Plan, and the Zoning Ordinance.
Conclusion
It is staff's opinion that the construction of the proposed building will be beneficial for the City,
because it will put a vacant parcel to a higher and better use, bring new development to the area,
and will contribute to the elimination of blighting influences, which further the goals and
objectives of the Southwest Redevelopment Plan.
". ..,.
PAGE 3, ITEM NO.:
MEETING DATE: 04/18/00
FISCAL IMPACT
The proposed project has an estimated valuation of $1,200,000. This will generate an annual tax-
increment revenue of approximately $12,000, which will be distributed as follows; Twenty percent
($2,400) for the Housing Set-Aside fund; of the remaining $9,600, fifty three percent ($5,088) will
be allocated to other taxing entities as part of the tax sharing pass-thru agreements; the rest
($4,512) will accrue to the Southwest Redevelopment Project Area fund.
AnACHMENTS
Locator Map
Attachment A - Negative Declaration 15-00-09
Attachment B - Owner Participation Agreement with the following:
Exhibit A - Design Plans
Exhibit B - Design Review and Agency Conditions of Approval
H,\HOME\COMMDEV\STAFF.REP\04-18-00\680 L Sf.doc
...
RESOLUTION
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA ADOPTING NEGATIVE DECLARATION IS-00-09 AND APPROVING
OWNER PARTICIPATION AGREEMENT WITH THE DAN COMPANY FOR THE
DEVELOPMENT OF AN INDUSTRIAL BUILDING LOCATED AT 680 L STREET
WITHIN THE SOUTHWEST REDEVELOPMENT PROJECT AREA
WHEREAS, the Dan Company awns the property at 680 L Street, which is diagrammatically shawn in the
Lacator Map attached to the Owner Participation Agreement and incorporated herein by reference; and,
WHEREAS, the Dan Company has presented development plans for the construction of a 36,900-square
faat industrial building and associated lot improvements ("Prajecf'); and
WHEREAS, the site for the proposed Project is iocated within the Southwest Redevelopment Project Area
under the jurisdiction and control of the Redevelopment Agency of the City of Chula Vista; and,
WHEREAS, the Environmental Review Coordinator reviewed the proposed Project and issued Negative
Declaration IS-00-09 for the project in accordance with CEQA; and,
WHEREAS, the Design Review Cammittee reviewed and recommended that the Redevelapment Agency
approve the proposed Project subject to the conditions listed in Exhibit B of the Owner Participation Agreement; and,
WHEREAS, the Redevelopment Agency of the City af Chula Vista has been presented an Owner
Participation Agreement, said agreement being on file in the Office of the Secretary to the Redevelopment Agency
and known as document RACO 00-03, approving the construction of a 36,900-square foot industrial building lacated
at 680 L Street, depicted in Exhibit A and subject to conditions listed in Exhibits B af said agreement.
NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA daes hereby
find, order, determine and resalve as fallaws:
1. The proposed project will not have a significant impact on the environment; accordingly Negative
declaration IS-00-09 was prepared and is hereby adopted in accordance with CEQA.
2. The propased project is consistent with the Southwest Redeveiopment Plan and shall implement the
purpose thereof.
3. The Redevelopment Agency af the City of Chula Vista hereby appraves the Owner Participation
Agreement with the Dan Company for the construction of a 36,900-square foot industrial building at 680
L Street, in the form presented in accordance with plans attached thereto as Exhibit A and subject ta
conditians listed in Exhibits B of said agreement.
4. The Chairman of the Redevelapment Agency is hereby authorized to execute the subject Owner
Participatian Agreement between the Redevelopment Agency and the Dan Company.
5. The Secretary af the Redevelopment Agency is authorized and directed to recard said Owner
Participatian Agreement in the Office af the Caunty Recarder of San Diego, California.
Presented by:
Appraved as ta form by:
~
;;:, ~/
Chris Salamone
Cammunity Development Directar
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CH U LA VISTA PLANNING AND BUILDING DEPARTMENT
LOCATOR PROJECT DAN COMPANY PROJECT DESCRlP1l0N:
(!) APPUCANT: DESIGN REVIEW
PROJECT 670 - 680 "L" Street
ADDRESS: Request Propased construction of a 36,326 sf multi-tenant
SCALE: ALE NUMBER: industriaVcommercial concrete tilt up structure with
NORTH No Scale DRC-00-28 1 08 parking spaces.
h:\home\olannino\hector\locators\drc0028cdr 11117/00
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NEGATIVE DECLARATION
PROJECT NAME:
Chula Vista Commerce Centre
PROJECT LOCATION:
670 L Street
ASSESSOR'S PARCEL NO.:
618-010-03,08 and 14
PROJECT APPLICANT:
CA,SE NO:
Dan Company
IS-00-09
DATE:
February 7, 2000
A. Proi ect Setting
The project site currently consists of three lots on the southeast comer of L Street and
Industrial Parkway totaling approximately 4.27 acres. One lot is occupied by an
industrial building, which will remain there after the other two lots, currently vacant, are
consolidated with some land behind the building on the other lot. After the consolidation
and boundary adjustments are complete, the proposed project site will be a two-acre
vacant lot that currently has minimal vegetation.
Surrounding land uses are as follows: North: Multi-family residential; South: Limited
Industrial (Solar Turbines) East: Limited Industrial (NAPA Auto Parts Warehouse);
and West: Limited Industrial (Budget Rent-A-Car).
L Street is designated as a Class I Collector on the City's Circulation Element.
It has been determined that the subject site does not contain any structures considered to
be of historical or archaeology value.
B. Proiect Description
The proposed project consists of constructing a 36,900 square foot industrial/commercial
building on a two-acre vacant parcel. The proposed building is designed to be multi-
tenant industrial/commercial, with tenant uses being in accordance with the City's IL-
Limited Industrial ZOIle. The spa~s will be divisible to as little as 6,000 square feet.
. The proposed building Will consist of tilt-up concrete construction with the addition of
glass storefronts and awnings. Proposed parking includes 108 spaces, 18 more than
required by the City's Zoning Ordinance. The proposed building will utilize two existing
curb cuts along L Street and will feature access along and around the entire project.
Grade level roll-up doors for loading and unloading are planned along the proposed
ATTACHMENT 6
".
building's rear elevation. New landscaped areas will be provided along L Street and
around the north, east and west sides of the building. The landscaped areas will include
grass, shrubs and trees.
C. Compatibility with Zoning and Plans
Current zoning of the site IL (Limited Industrial), and the site is designated as Research
and Limited Manufacturing by the City's General Plan. The proposed project is in
compliance with the zoning designation and the adopted General Plan.
D. Identification of Environmental Effects
An Initial Study conducted by the City of Chula Vista (including an attached
Environmental Checklist form) determined that the proposed project will not have a
significant environmental effect, and the preparation of an Environmental Impact Report
will not be required. The Negative Declaration has been prepared in accordance with
Section 15070 of the State CEQA Guidelines.
1. Public Services Impact
Fire
The nearest fire station is located within five miles of the project. The estimated
response time is less than seven minutes. The response time complies with the
City Threshold Standards for fire and medical response time. The Fire
Department will review the building construction plans to ensure that the
proposed construction complies with applicable California Building Code.
regulations, including possible installation of an automatic fire sprinkler system.
Police
The Police Department indicates that the current levels of service and response
time will be provided to the proposed land uses.
2. Utility and Service Svstems
Soils
The applicant will be required to prepare a soils report as part of the standard
conditions of the proposed grading plan. The applicant shall comply with the
applicable recommendations as determined by the City engineer...
2
..
Drainage
As a standard condition of approval, the Engineering Department has requested
that the applicant prepare drainage information that will identify the method to be
used to convey on-site water surface runoff.
Sewer
The Engineering Department concurs with the conclusions of a Preliminary Sewer
Study Report prepared on December 14,1999 by Partners Planning and
Engineering that the proposed project will comply with City adopted Sewer
Threshold Standards.
Streetsffraffic
The Threshold Standards Policy requires that all intersections must operate at a
Level of Service (LOS) "c" or better, with the exception that Level of Service
(LOS) "D" may occur during the peak two hours of the day at signalized
intersections. The proposed project would comply with this Threshold Policy for
the immediately affected intersection of L Street and Industrial Blvd. The
Engineering Department has calculated that this project would allow adequate
street volume capacity to be maintained with a Level of Service (LOS) "B". The
Engineering Division indicates that the project has been found to be consistent
with the General Plan Traffic Element.
3. Noise
Temporary construction noise would occur at the site, and would be subject to
City standards for time of work. Loading docks are proposed on the backside of
the building, abutting another industrial building, and would be several hundred
feet away from residences across L Street. Thus, the potential noise factor
would be less than significant, and no mitigation will be required.
4. Aesthetics
The proposed project will be subject to review and approval by the Design
Review Committee (DRC). The proposed site plan, architecturaJ design,
landscaping and lighting plans will be subject to review by the DRC to ensure the
proposed project will complement surrounding development and comply with all
applicable design and landscaping standards.
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T". ""'!'
E. Consultation
I. Individuals and Organizations
City ofChula Vista:
Marilyn Ponseggi, Planning Division
Kimberly Vander Bie, Planning Division
Mary Hofmockel, Planning Division
Garry Williams, Planning Division
Sohaib Al-Agha, Engineering
Samir Nuhaily, Engineering
Muna Cuthber, Engineering .
Majed Al-Ghafry, Engineering
Ralph Leyva, Engineering
Brad Kemp, Building Division
Jaime Velsquez, Fire Department
Richard Preuss, Crime Prevention
Chula Vista City School District: Dr. Lowell Billings
Sweetwater Union High School District: Katy Wright
Sweetwater Authority: James L. Smyth
Applicant's Agent: Ric Davy, Eric Davy Architects, APC
2. Documents
Chula Vista General Plan (1989) and EIR (1989)
Title 19, Chula Vista Municipal Code
3. Initial Study
TIlls environmental determination is based on the attached Initial Study, any
comments received on the Initial Study and any comments received during the
public review period for this Negative Declaration. The report reflects the
independent judgement of the City of Chula Vista Further information regarding
the environmental review of this project is available from the Chula Vista
Planning Department, 276 Fourth Avenue, Chula Vista, CA 91910.
21~~rj}~ fJ'
. Environmental Review C60rdiriat6r
Date: c:? / 7/ oQ
I /
4
T---- "T
Case No.IS-OO-09
ENVIRONMENTAL CHECKLIST FORM
1. Name of Proponent: Dan Company
2. Lead Agency Name and Address: City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
3. Address and Phone Number of Proponent: 705 12" Avenue
San Diego, CA 92101
619/557-0100 .
4. Name of Proposal: Chula Vista Commerce Centre DRC-OO-28
5. Date of CheckIist: February 7, 2000
I. LAND USE AND PLANNING. Would the
proposal:
a) Conflict with general plan designation or
zaning?
b) Conflict with applicable enviromnental plans or
policies adopted by agencies with jurisdiction
over the project?
c) Affect agricultural resaurces ar operations
(e.g., impacts to soils or farmlands, or impacts
from incompatible land uses)?
d) Disrupt or divide the physical arrangement of
an established community (including a low-
income or minority community)?
Comments: The site is designated Research and Limited Industrial in the General Plan and zoned
II.-Limited Industrial. The proposed construction of the industrial/commercial building and parking
lot is in conformance with the Limited Industrial designation and the II. zone. The proposed project
will be subject to the approval of the Design Review Committee.
II. POPULATION AND HOUSING; Would the
proposal:
a) Cumulatively exceed official regional or local
population projections?
b) Induce substantial growth in an area either
directly or indirectly (e.g., thraugh projects in
an undeveloped area or extension of major
infrastructure)?
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No
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c) Displace existing hausing, especially affordable
housing?
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No
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Comments: The project proposes to provide industrial warehousing and commercial uses.
Therefore, the proposed project will not induce population growth or displace housing. The project
wauld nat have an impact an existing housing stock, ar create a demand for additional housing.
m. GEOPHYSICAL. Would the proposal result in or
expose people to potential impacts involving:
a) Unstable earth conditions or changes in 0 0 0 IKI
geolagic substructures?
b) Disruptions, displacements, compaction or 0 0 0 IKI
overcovering of the soil?
c) Change in topography or ground surface relief 0 0 0 IKI
features?
d) The destruction, covering or modification of 0 0 0 IKI
any unique geologic or physical features?
e) Any increase in wind or water erosion of soils, 0 0 0 IKI
either on or off the site?
f) Changes in deposition or erosian of beach 0 0 0 IKI
sands, or changes in siltation, deposition or
erosion which may modify the channel of a
river or stream or the bed of the ocean or any
bay inlet or lake?
g) Exposure of people or property to geologic 0 0 0 IKI
hazards such as earthquakes, landslides, mud
slides, ground failure, ar similar hazards?
Comments: The site will be minimally graded. The City's Engineering Department has determined
that, based on the initial project submittal, no significant geotechnical impacts are anticipated. A
soils repart and compliance with the applicable recommendations will be required by the
Engineering Department as a standard condition of grading permit approval. No mitigation will be
required.
IV. WATER. Would the proposal result in:
a) Changes in absorption rates, drainage patterns,
or the rate and amount of surface runoff?
o
o
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b) Exposure of people or property to water
related hazards such as flooding or tidal
waves?
o
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c) Discharge into surface waters or other
alteration of surface water quality (e.g.,
temperature, dissolved oxygen or turbidity)?
o
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d) Changes in the amaunt af surface water in any 0 0 0 00
water body?
e) Changes in currents, or the course of direction 0 0 0 li1]
of water movements, in either marine or fresh
waters?
f) Change in the quantity of ground waters, either 0 0 0 li1]
through direct additions or withdrawals, or
through interception of an aquifer by cuts or
excavations?
g) Altered direction ar rate of flow af 0 0 0 00
groundwater?
h) Impacts to groundwater quality? 0 0 0 00
i) Alterations to the course or flow of flood 0 0 0 li1]
waters?
j) Substantial reduction in the amount of water 0 0 0 00
otherwise available for public water supplies?
Comments: There is one building on the subject site, which will be on a separate parcel from the
proposed building after a lat consolidatian and boundary adjustment are completed. As a standard
Engineering condition of approval, on-site drainage facilities design would need to incorporate
pollution prevention systems to the storm drain facilities in order to help prevent contamination of
groundwater resources. The Engineering Department is requesting an on-site drainage study as part
of standard requirements for new construction, and have indicated that they do not anticipate any
significant impact upan the City's drainage and wastewater systems. No mitigation will be required.
V. AIR QUALITY. Would the proposal:
a) Violate any air quality standard or contribute to
an existing or projected air quality violation?
b) Expose sensitive receptors to pollutants?
c) Alter air movement, moisture, or temperature,
or cause any change in climate, either locally
or regianally?
d) Create objectionable odors?
e) Create a substantial increase in stationary or
non-statianary sources of air emissions or the
deterioration of ambient air quality?
Comments: Grading and construction of the proposed building and parking lot would temporarily
create dust and emissions associated with activity from construction equipment and vehicles. These
short-term emissions are not considered significant impacts. No mitigation is required.
VI. TRANSPORTATION/CIRCULATION. Would
the proposal result in:
.,. ..,.
o
o
o
00
o
o
o
00
o
o
o
li1]
o
o
o
00
o
o
o
00
"
.)
Poteatiall.,.
....- ---. .... ....
"- v..... Sipil"laDl ~o
- M1...... - Impacl
a) Increased vehicle trips or traffic cangestian? D D D IRl
b) Hazards to safety from design features (e.g., D D D IRl
sharp curves or dangerous intersections) or
incompatible uses (e.g., fann equipment)?
c) Inadequate emergency access or access to D D D IRl
nearby uses?
d) Insufficient parking capacity on-site ar off-site? D D D IRl
e) Hazards or barriers for pedestrians or D D D IRl
bicyclists?
f) Conflicts with adapted policies supporting D D D IRl
alternative transportation (e.g. bus turnouts,
bicycle racks)?
g) Rail, waterborne or air traffic impacts? D D D' IRl
h) A "large project" under the Congestion D D D IRl
Management Program? (An equivalent af 2400
or more average daily vehicle trips or 200 or
more peak -hour vehicle trips.)
Comments: No adverse impacts to traffic/circulation are nated from project approval. The Average
Daily Traffic (ADT) volume on the primary road after completion of the project is projected to be
17,723, which is below the 22,000 ADT threshold. No mitigation will be required.
VII. BIOLOGICAL RESOURCES. Would the
proposal result in impacts to:
a) Endangered, sensitive species, species of D D D IRl
concern or species that are candidates for
listing?
b) Locally designated species (e.g., heritage D D D lRl
trees)?
c) Locally designated natural communities (e. g, D D D lEI
oak farest, caastal habitat, etc.)?
d) Wetland habitat (e.g., marsh, riparian and D D D lEI
vernal poo!)?
e) Wildlife dispersal or migratio!l corridors? D D D lEI
f) Affect regional habitat preservation planning D D D lEI
efforts?
4
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.... ....
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Comments: The praject site is located in a fully developed urbanized industrial area that cantains
no native habitat. The site will be fully graded and paved. Very little vegetation is located
throughout the site. No animal or plant species listed as rare, threatened or endangered by local,
State or Federal resource conservation and regulatory agencies are known to be present in this area.
Na adverse impacts ta biological resources are noted.
vrn. ENERGY AND MINERAL RESOURCES.
Would the proposal:
a) Conflict with adopted energy conservation 0 0 0 ~
plans?
b) Use non-renewable resources in a wasteful and 0 0 0 ~
inefficient manner?
c) If the site is designated for mineral resource 0 0 0 ~
protection, will this project impact this
protection?
Comments: No impacts to non-renewable resources are noted.
IX. HAZARDS. Would the proposal involve:
a) A risk of accidental explosion or release of 0 0 0 ~
hazardous substances (including, but nat
limited to: petroleum products, pesticides,
chemicals or radiation)?
b) Possible interference with an emergency 0 0 0 ~
response plan or emergency evacuation plan?
c) The creation of any health hazard or potential 0 0 0 ~
health hazard?
d) Exposure of people to existing sources of 0 0 0 ~
potential health hazards?
e) Increased fire hazard in areas with flammable 0 0 0 ~
brush, grass, or trees?
Comments: Project implementation would not pose a health hazard to humans. The project
involves the construction of an industrial/commercial building on a vacant, previously unused site,
where no hazardous materials are associated with it. Therefore, no mitigation will be required.
X. NOISE. Would the proposal result in:
a) Increases in existing noise levels?
b) Exposure of people to severe noise levels?
o
o
o
o
o
o
~
~
5
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Comments: Temporary construction noise would occur at the site, and wauld be subject to City
standards for time of work. Loading dacks are proposed on the backside of the building, abutting
another industrial building, and would be several hundred feet away from residences across L Street.
Thus, the potential noise factor would be less than significant, and no mitigation will be required.
XI. PUBLIC SERVICES. Would the proposal have
an effect upon, or result in a need for new or
altered government services in any of the following
areas:
a) Fire protection? 0 0 0 r&l
b) Police protection? 0 0 0 r&l
c) Schools? 0 0 0 r&l
d) Maintenance of public facilities, including 0 0 0 r&l
roads?
e) Other governmental services? 0 0 0 r&l
Comments: No new governmental services will be required to serve the project. No adverse
impacts are noted. Fire and police protection can adequately be provided. Appropriate school fees
will be paid. Two feet of right-of-way will be dedicated along entire L Street frontage. No
mitigation will be required.
o
o
o
r&l
XII. Thresholds. Will the proposal adversely impact
the City's Threshold Standards?
As described below, the proposed project does not adversely impact any of the seen
Threshold Standards.
a) Fire/EMS
o
o
o
r&l
The Threshold Standards requires that fire and medical units must be able to respond to
calls within 7 minutes or less in 85 % of the cases and within 5 minutes or less in 75 % of
the cases. The City of Chula Vista Fire Department has indicated that this threshold
standard will be met, since the nearest fire station is 3-4 miles away and would be
associated with a five-minute response time. The proposed project complies with this
Threshold Standard.
Comments: The Fire Department indicates that the nearest fire station is located within 5 miles and
adequate fire service and protection can be provided to the proposed project site.
b) Police
o
o
o
r&l
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The Threshold Standards require that palice units must respand to 84 % of Priarity 1 calls
within 7 minutes ar less and maintain an average response time to all Priority 1 calls of
4.5 minutes or less. Police units must respond to 62.10% of Priority 2 calls within 7
minutes or less and maintain an average response time to all Priority 2 calls of 7 minutes
or less. The proposed project camplies with this Threshold Standard.
Comments: The Police Department indicates that the current level of service can be maintained to
the project site. Any additional construction plans should be forwarded to the crime prevention unit
for evaluation.
c) Traffic
o
o
o
[RJ
The Threshold Standards require that all intersections must operate at a Level of Service
(LOS) "CO or better, with the exception that Level of Service (LOS) "0" may occur
during the peak two hours of the day at signalized intersections. Intersections west of
I-80S are not to operate at a LOS below their 1987 LOS. No intersection may reach
LOS "E" or "P" during the average weekday peak hour. Intersections of arterials with
freeway ramps are exempted from this Standard. The proposed project complies with
this Threshold Standard.
Comments: The City of ChuJa Vista Threshold Standards require that all intersections operate at a
Level of Service (LOS) "CO or better, with the exception that Level of Service (LOS) "0" may
occur during the peak two hours of the day at signalized intersectians. The proposed building will
be on L Street, where the Level of Service (LOS) will be "B", which is better than LOS C.
Therefore, no traffic mitigation regarding traffic impacts to Level of Service will be required.
d) ParksIRecreation
o
o
o
[RJ
The Threshold Standard for Parks and Recreation is 3-acres/l,OOO population. This
standard does not apply to the proposed project.
Comments: No adverse impacts to parks or recreatianal opportUnities are noted. The proposed
project is a commercial facility, and does not include additional density.
o
o
o
[RJ
e) Drainage
The Threshold Standards require that storm water flows and volumes not
exceed City Engineering Standards. Individual projects will provide necessary
improvements consistent with the Drainage Master Planes) and City
Engineering Standards. The proposed project complies with this Threshold
Standard.
Comments: There is adequate capacity in the existing system to accommodate the propased project.
f) Sewer
o
o
o
[RJ
The 1breshold Standards require that sewage flows and volwnes not exceed
City Engineering Standards. Individual projects will provide necessary
improvements consistent with Sewer Master Planes) and City Engineering
Standards. The proposed project_complies with this Threshold Standard.
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Comments: Sewer capacities will not be adversely affected through project implementation. A
sewer study prepared by Partners Planning and Engineering (12/14/99) and reviewed by the
Engineering Department indicates that the project will not exceed the Threshold Standard. No
mitigation will be required.
g) Water
o
o
o
1Rl
The Threshold Standards require that adequate storage, treatment, and transmission
facilities are constructed concurrently with planned growth and that water quality
standards are not jeopardized during growth and construc(ion. The proposed project
complies with this Threshold Standard.
Applicants may also be required to participate in whatever water conservation or fee off-
set program the City of Chula Vista has in effect at the time of building permit issuance.
Comments: Water quality standards would not be affected through project implementation. The
applicant will be required to adhere to Best Management Practices of the NPDES Guidelines, which
assures prevention of pollution.
XIII. UTILITIES AND SERVICE SYSTEMS. Would
the proposal result in a need for new systems, or
substantial alterations to the following utilities:
a) Power or natural gas? 0 0 0 1Rl
b) Communications systems? 0 0 0 1Rl
c) Local or regional water treatment or 0 0 0 1Rl
distribution facilities?
d) Sewer or septic tanks? 0 0 0 1Rl
e) Storm water drainage? 0 0 0 1Rl
f) Solid waste disposal? 0 0 0 1Rl
Comments: The proposed project will not result in a need far new systems or alterations to any of
the above-referenced utilities.
XIV. AESTHETICS. Would the proposal:
a) Obstruct any scenic vista or view open to the 0 0 0 1Rl
public or will the proposal result in the creation_
of an aesthetically offensive site open to public
view?
b) Cause the destruction or modificatian of a 0 0 0 1Rl
scenic route?
c) Have a demonstrable negative aesthetic effect? 0 0 0 1Rl
.-
8
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d) Create added light ar glare sources that cauld
increase the level of sky glaw in an area ar
cause this project to fail to comply with Section
19.66.100 of the Chula Vista Municipal Code,
Title 19?
e) Reduce an additional amount of spill light?
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........." 51_.... "".....
Slp;l\ooat u...... Sipilkaal No
Impo<1 Midpted Impo<1 Impo<1
0 0 0 0
o
o
o
l8J
Comments: Approval of the project design, lighting and landscape is subject to a discretionary
Design Review process. Standard and site specific conditions of project approval will come forth
from this review process. No mitigation will be required.
XV. CULTURAL RESOURCES. Would the
proposal:
a) Will the proposal result in the alteration of or 0 0 0 l8J
the destruction or a prehistoric or historic
archaeological site?
b) Will the proposal result in adverse physical or 0 0 0 0
aesthetic effects to a prehistoric or historic
building, structure or object?
c) Does the proposal have the potential to cause a 0 0 0 l8J
physical change, which would affect unique
ethnic cultural values?
d) Will the proposal restrict existing religious or 0 0 0 0
sacred uses within the potential impact area?
e) Is the area identified on the City's General Plan 0 0 0 l8J
EIR as an area of high potential for
archeological resources?
Comments: The project will be minimally graded and paved. The adjacent lots are all fully utilized
and for the most part developed. No resources have been identified; therefore, no adverse impacts
to cultural resources are noted.
XVI. PALEONTOLOGICAL RESOURCES. Wzll the
proposal result in the alteration of or the
destruction of paleontological resources?
Comments: There are no identified paleontological resources within the project area.
o
o
o
l8J
XVll. RECREATION. Would the proposal:
a) Increase the demand for neighborhood or 0 0 0 l8J
regional parks or other recreational facilities?
b) Affect existing recreational opportunities? 0 0 0 l8J
c) Interfere with recreatian parks & recreation 0 0 0 l8J
plans or programs?
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Comments: There are no recreatianal facilities that will be adversely affected by the prapased
commercial project. The propased project is a commercial facility, and daes nat include additional
density. Therefore, there will be no additional demands on the recreation facilities.
XVIII. MANDATORY FINDINGS OF
SIGNIFICANCE: See Negative Declarationfor
mandatory findings of significance. If an EIR is
needed, this section should be completed.
a) Does the project have the potential to degrade
the quality of the environment, substantially
reduce the habitat of a fish or wildlife species,
cause a fish or wildlife population to drop
below self-sustaining levels, threaten to
eliminate a plant or animal community, reduce
the number or restrict the range of a rare ar
endangered plant or animal or eliminate
important examples of the major periods or
California history or prehistory?
Comments: The project site is in a fully developed urban setting. The project site has been
completely disturbed by human activity. Non-native weeds are found an-site. No impacts to
wildlife populatian, habitat or culturaI/historical resources are noted.
o
o
o
lBl
b) Does the project have the potential to achieve
short-term, to the disadvantage of long-term,
environmental goals?
Comments: The project does not have the potential to achieve short-term environmental goals to
the disadvantage of long-term goals. The project is consistent with both the Zoning and General
Plan designation for the site.
p
o
o
!RI
c) Does the project have impacts that are
individually limited, but cumulatively
considerable? ("Cumulatively considerable"
means that the incremental effects af a project
are considerable when viewed in connection
with the effects of past projects, the effects of
other current projects, and the effects of
probable future projects.)
Comments: The project does not have any impacts that are individually limited, but cumulatively
considerable. Project approval will result in the addition of an industrial/commercial facility of
benefit to the community.
o
o
o
!RI
d) Does the project have environmental effect,
which will cause substantial adverse effects on
human beings, either directly or indirectly?
o
o
o
!RI
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.... ..,.
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-
Comments: The analysis contained in the Initial Study found na evidence indicating the praject will
cause substantial adverse effects on human beings, either directly or indirectly.
XIX. PROJECT REVISIONS OR MITIGATION MEASURES: NO MITIGATION REOUlRED
Project Proponent
Date
XXI. ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED:
The environmental factors checked below would be potentially affected by this project, involving at least
one impact that is a "Potentially Significant Impact" or "Potentially Significant Unless Mitigated," as
indicated by the checklist on the following pages.
o Land Use and Planning
o Population and Hausing
o Transportation/Circulation 0 Public Services
o Biological Resources 0 Utilities and Service
Systems
o Energy and Mineral Resources 0 Aesthetics
o Geophysical
o Water
o Hazards 0 Cultural Resources
o Air Quality
o Noise 0 Recreation
o Mandatory Findings of Significance
XXII. DETERMINATION:
On the basis of this initial evaluation:
I fmd that the proposed project COULD NOT have a significant effect on the
environment, and a NEGATIVE DECLARATION will be prepared.
IKI
I fmd that although the proposed project could have a significant effect on the
enviranment, there will not be a significant effect in this case because the mitigation .
measures described on an attached sheet have been added to the project. A
MITIGATED NEGATIVE DECLARATION will be prepared.
I fmd that the proposed project MAY have a significant effect on the environment, and
an ENVIRONMENTAL IMPACT REPORT is required.
o
o
II
T.
I find that the praposed project MAY have a significant effect(s) on the environment, but 0
at least one effect: I) has been adequately analyzed in an earlier document pursuant to
applicable legal standards, and 2) has been addressed by mitigation measures based on
the earlier analysis as described on attached sheets, if the effect is a .patentially
significant impacts. or .potentially significant unless mitigated.. An
ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects
that remain to be addressed.
I find that although the proposed project could have a significant effect on the D
environment, there WilL NOT be a significant effect in this case because all potentially
significant effects (a) have been analyzed adequately in an earlier EIR pursuant to
applicable standards and (b) have been avoided or mitigated pursuant to that earlier EIR,
including revisions or mitigation measures that are imposed upon the proposed project.
^f addendum has been prepared to provide a record of this determination.
Environmental Review Coordina r
City of Chula Vista
d!7/LJo.
Dite I
T
~
Recording Requested By:
CHULA VISTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
When Recorded Mail To:
CHULA VISTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
Attn: Judi Bell
APN: 618-010-03,08,14
(Space Above This Line For Recorder)
OWNER PARTICIPATION AGREEMENT
Dan Company
680 L Street
THIS AGREEMENT is entered into by the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA,
a public body corporate and politic (hereinafter referred to as "AGENCY"), and the Dan Company, a California General
Partnership (hereinafter referred to as "DEVELOPER") effective as of May 2,2000.
WHEREAS, the DEVELOPER desires to develop real property within the SOUTHWEST REDEVELOPMENT
PROJECT AREA which is subject to the jurisdiction and control of the AGENCY; and,
WHEREAS, the DEVELOPER has presented plans for development to the Design Review Committee for the
construction of an 36,900-square foot industrial/commercial warehouse (the "Project"); and,
WHEREAS, said plans for development have been recommended for approval by said committee; and,
WHEREAS, the AGENCY has considered the Design Review Committee's recommendation and has approved
the Project and design plans subject to certain terms and conditions; and,
WHEREAS, the AGENCY desires that said Project be implemented and completed as soon as it is practicable
in accordance with the terms of this Agreement.
NOW, THEREFORE, the AGENCY and the DEVELOPER agree as follows:
The foregoing recitals are incorporated into this Agreement.
1. The property to be developed is described as Assessors Parcel Numbers 618-010-03, 08, 14 located
at 680 L Street, Chula Vista, CA, shown on locator map attached hereto and by this reference
incorporated herein ("Property").
2. The DEVELOPER covenants and agrees by and for himself, his heirs, executors, administrators and
assigns and all persons claiming under or through them the following:
A. DEVELOPER shall develop property in accordance with the AGENCY approved development
proposal attached hereto as Exhibit "A", which is on file with the AGENCY Secretary, as
Document No. RACO-00-03.
B. DEVELOPER shall obtain all necessary federal/state and local governmental permits and
approvals and abide by all applicable federal, state and local laws, regulations, policies and
approvals. DEVELOPER further agrees that this Agreement is contingent upon
T'
DEVELOPER securing said permits and approvals. DEVELDPER shall pay all applicable
development impact and processing fees.
C. DEVELOPER shall obtain building penn its within one year from the date of this Agreement
and to actually develop the Property within one year from the date of issuance of the building
penn its. In the event DEVELOPER fails to meet these deadlines, approval of
DEVELOPER's development proposals shall be void and this Agreement shall have no
further force or effect.
D. In all deeds granting or conveying an interest in the Property, the following language shall
appear:
'The grantee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any
person or group of persons on account of race, color, creed, national origin
or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure,
or enjoyment of the premises herein conveyed, nor shall the grantee
himself or any persons claiming under or through him establish or permit
any such practice of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenant lessees, or vendees in the premises herein conveyed. The
foregoing covenants shall run with the land. .
E. In all leases demising an interest in all or any part of the Property, the following language
shall appear.
'The lessee herein covenants by and for himself, his heirs, executors,
administrators and assigns, and all persons claiming under or through him,
and this lease is made and accepted upon and subject to the following
conditions:
That there shall be no discrimination against or segregation of, any person
or group of persons, on account of race, color, creed, national origin, or
ancestry, in the leasing, subleasing, transferring use, occupancy, tenure,
or enjoyment of the premises herein leased, nor shall the lessee himself
or any persons claiming under or through him, establish or permit any such
practices of discrimination or segregation with reference to the selection,
location, number or use, or. occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased. '
3. The Property shall be developed subject to the conditions imposed by the Design Review Committee
and the AGENCY as described in Exhibit "B" attached hereto and incorporated herein by this
reference. DEVELOPER acknowledges the validity of and agrees to accept such conditions.
4. DEVELOPER shall maintain the premises in FIRST CLASS CONDITION.
A. DUTY TO MAINTAIN FIRST CLASS CONDITION. Throughout the tenn of this Agreement,
DEVELOPER shall, at DEVELOPER's sole cost and expense, maintain the Property which
includes all improvements thereon in first class condition and repair, and in accordance with
all applicable laws, penn its, licenses and other govemmental authorizations, rules,
ordinances, orders, decrees and regulations now or hereafter enacted, issued or promulgated
by federal, state, county, municipal, and other govemmental agencies, bodies and courts
having or claiming jurisdiction and all their respective departments, bureaus, and officials.
...
If the DEVELOPER fails to maintain the Property in a "first class condition", the
Redevelopment Agency of the City of Chula Vista or its agents shall have the right to go on
the Property and perform the necessary maintenance and the cost of said maintenance shall
become a lien against the Property. The Agency shall have the right to enforce this lien
either by foreclosing on the Property or by forwarding the amount to be collected to the Tax
Assessor who shall make it part of the tax bill.
B. DEVELOPER shall promptly and diligen~y repair, restore, alter, add to, remove, and replace,
as required, the Property and all improvements to maintain or comply as above, or to remedy
all damage to or destruction of all or any part of the improvements. Any repair, restoration,
alteration, addition, removal. maintenance, replacement and other act of compliance under
this Paragraph (hereafter collectively referred to as "Restoration") shall be completed by
DEVELOPER whether or not funds are available from insurance proceeds or subtenant
contributions. The Restoration shall satisfy the requirements of any sublease then in effect
for the Property or improvements with respect thereto or, if no sublease is then in effect, shall
be repaired or restored in the building standard shell condition existing immediately prior to
the date of such damage or destruction.
C. In order to enforce all above maintenance provisions, the parties agree that the Community
Development Director is empowered to make reasonable determinations as to whether the
Property is in a first class condition. If he determines it is not, he (1) will notify the
DEVELOPER in writing and (2) extend a reasonable time to cure. If a cure or substantial
progress to cure has not been made within that time, the Director is authorized to effectuate
the cure by City forces or otherwise, the cost of which will be promptly reimbursed by the
DEVELOPER.
In the event that there is a dispute over whether the Property is in a first class condition or
over the amount of work and expense authorized by the Director to cure, the parties agree
that the City Manager or his designee, shall resolve that dispute and the City Manager's
determination shall be final. All City action to cure shall be suspended pending the outcome
of the appeal. In the event that the Director decides without dispute, or the City Manager
decides in dispute, that the City has to cure and the amount of cure, then DEVELOPER has
to reimburse the City within thirty (30) days of demand. If not reimbursed, it constitutes a lien
and City is authorized to record said lien with the County Recorder, upon the Property.
D. FIRST CLASS CONDITION DEFINED. First class condition and repair, means Restoration
which is necessary to keep the Property an efficient and attractive condition, at least
substantially equal in quality to the condition which exists when the Project has been
completed in accordance with all applicable laws and conditions.
5. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed herein shall run
with the land. DEVELOPER shall have the right, without prior approval of AGENCY, to assign its
rights and delegate its duties under this Agreement.
6. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed herein are for
the express benefit of the AGENCY and for all owners of real property within the boundaries of the
SOUTHWEST REDEVELOPMENT PROJECT AREA as the same now exists or may be hereafter
amended. AGENCY and DEVELOPER agree that the provisions of this Agreement may be
specifically enforced in any court of competent jurisdiction by the AGENCY on its own behalf or on
behalf of any owner of real property within the boundaries of the SOUTHWEST REDEVELOPMENT
PROJECT AREA.
7. AGENCY and DEVELOPER agree that this Agreement may be recorded by the AGENCY in the Office
of the County Recorder of San Diego County, Califomia.
T'
8. DEVELOPER shall and does hereby agree to indemnify, protect, defend and hold harmless AGENCY
and the City of Chula Vista, and their respective Council members, officers, employees, agents and
representatives, from and against any and ai/liabiiities, losses, damages, demands, claims and costs,
including court costs and reasonable attorneys' fees (collectively, "liabilities") incurred by the AGENCY
arising, directly or indirectly, from (a) AGENCY's approval of this Agreement, (b) AGENCY's or City's
approval or issuance of any other permit or action, whether discretionary or non-discretionary, in
connection with the Project contemplated herein, and DEVELOPER's construction and operation of
the Project permitted hereby.
9. In the event of any dispute between the parties with respect to the obligations under this AGREEMENT
that results in litigation, the prevailing party shall be entitled to recover its reasonable attorney's fees
and court costs from the non-prevailing party.
10. Time is of the essence for each and every obligation hereunder.
11. if DEVELOPER fails to fulfill its obligations hereunder after due notice and reasonable opportunity to
cure, DEVELOPER shai/ be in default hereunder, and in addition to any and all other rights and
remedies AGENCY may have, at law or in equity. AGENCY shall have the right to terminate its
approval of the Project and this Agreement.
Signature Page Follows
T" ...,.
Signature Page
IN WITNESS WHEREOF THE PARTIES HAVE ENTERED INTO THIS AGREEMENT EFFECTIVE AS OF THE DATE
FIRST WRITTEN ABOVE.
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
"AGENCY"
DATED:
By:
Shirley Horton, Chairman
DATED: lpt;/14; -1m>
~. ~:;~.~
Charles E. Tiano, Vice President - Real Estate
Dan Company
NOTARY: Please attach acknowledgment card.
APPROVED AS TO FORM BY:
John M. Kaheny, Agency Attorney
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CALIFORNIA ALL.PURPOSE ACKNOWLEDGMENT
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EXHIBIT B
Conditions of Approval
Owner Participation Agreement
The Dan Company
680 l Street
Chula Vista, CA
DESIGN REVIEW
CONDITIONS OF APPROVAL
1. The project shall comply with all requirements of the Chula Vista Engineering, Fire, and Police Departments.
2. Prior to issuance of a building permit, a revised landscape plan and a water management plan shall be submitted
to the City Landscape Planner for review and approval.
3. Prior to issuance of a building permit, a sign program conforming with Section 19.44.060 of the Chula Vista Municipal
Code and the Chula Vista Design Manual shall be submitted to Planning staff for review and approval.
4. Prior to issuance of a building permit, elevations of trash disposal/recycling stations and their proposed locations
shall be submitted to Planning staff for review and approval, and shall conform with Section 19.58.340 of the Chula
Vista Municipal Code and the Chula Vista Design Manual.
5. Prior to issuance of a building permit, elevations that clearly show adequate screening for roof equipment shall be
submitted to the Planning staff for review and approval.
6. Prior to issuance of building permits, the site plan shall be revised to add/amend the following: project location, legal
description and assessor's parcel number; driveway widths and locations; ex1erior lighting; locations of all necessary
trash dumpsters and recycle bins, with screening; and sizes of parking spaces.
7. Prior to issuance of a building permit, school fees shall be paid to Sweetwater Union High School District and Chula
Vista Elementary School District.
8. A graffiti resistant treatment shall be specified for all wall and building surfaces. This shall be noted on any building
and wall plans and shall be reviewed and approved by the Planning Director prior to issuance of building permits.
Additionally, the project shall conform with Sections 9.20.055 and 9.20.035 of the Chula Vista Municipal Code
regarding graffiti control.
9. Tenant uses shall be only those uses allowed in the IL-Limited Industrial Zone of Chula Vista.
10. A material that will maintain intensity of color should be used on the exterior portion of the building painted blue.
IH:\HOME\COMMOEV\TAPIAIOPAS\680 L STREET.OPA (March 7. 20004:43 PM)]
1r .,.
REDEVELOPMENT AGENCY AGENDA STATEMENT
ITEM NO.:
MEETING DATE:
d.
05/02/00
ITEM TITLE: RESOLUTION APPROVING A CONTRACT AMENDMENT FOR ON-
CALL LEGAL SERVICES IN THE COMMUNITY DEVELOPMENT
DEPARTMENT FOR NEGOTIATIONS ON THE GATEWAY CHULA
VISTA PROJECT
SUBMlnED BY: COMMUNITY DEVELOPMENT DIRECTOR ~n,U
REVIEWED BY: EXECUTIVE DI RECTOR (at "t..r \?'(L
4/5THS VOTE: YES D NO 0
BACKGROUND
The Redevelopment Agency has been in negotiations for the development of approximately 4.5
acres of property located at the northwest corner of Third Avenue and H Street since early last
year. Agency staff has been evaluating the negotiating terms and conditions for a Disposition
and Development Agreement (DDA) for the Project, which is expected to be heard by the Agency
Board this month. The negotiations have been particularly intensive during the past several
months and additional time to finalize the negatiations was required beyand what was originally
anticipated. The develapment team, Gateway Chula Vista LLC, and staff agree that additional
consultant time has been necessary to complete the negotiations and prepare final documents for
presentation to the Agency. Specifically, specialized legal services have been needed to assist staff
with the development of the DDA.
RECOMMENDATION
That the Redevelopment Agency adopt a resolution approving a contract amendment for the on-
call legal services contract with Stradling Yocca Carlson and Rauth.
BOARDS/COMMISSIONS RECOMMENDATION
Not Applicable.
DISCUSSION
Legal services for the Gateway Chula Vista Project have been utilized to provide assistance in
project negotiations and in the preparation of required legal documents. The negotiations have
been extensive and have resulted in the preparation of a draft DDA as well as associated
d- - f
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PAGE 2, ITEM NO.:
MEETING DATE:
;;;....
05/02/00
documents. Agency stoff, with the assistance af the legal consultants, have worked hard to
prepare a development deal that is nearing completion.
Staff anticipates that a final DDA will be presented for Agency consideration within the month. It
is the intention of Agency staff and Gateway Chula Vista LLC to complete negotiations and
present a DDA to the Agency at the earliest possible date.
FISCAL IMPACT
Additional consultant services for the Gateway Project are estimated to be $45,000. The Agency
currently retains Straddling Yocco Carlson & Rauth to pravide legal services on a proiect-by-
proiect basis. The following costs should be sufficient to finalize required legal services for the
Gateway Chula Vista Project:
Straddling Yocca Carlson & Rauth
Legal Services:
Gateway
$45,000
Funds are available in the current year Bayfrontrr own Centre I Professional Services account
budget. This item is before the Agency Board for consideration because contract amendments
above $50,000 require City Council/Agency Board approval. With this action, the total contract
amount will be $107,320.
H ,\HOME\COMMDEV\ST AFF .REP\OS-02 -OO\stradl;ng .doc
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RESOLUTION NO.
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA AUTHORIZING A CONTRACT AMENDMENT
FOR ON-CALL LEGAL SERVICES FOR THE GATEWAY CHULA
VISTA PROJECT
WHEREAS, Agency staff is negotiating a Disposition and Development
Agreement (DDA) with Gateway Chula Vista LLC for development of approximately
4.5 acres of property located at the northwest corner of Third Avenue and H Street;
and
WHEREAS, due to the complexity of the terms of said Agreement, Agency
staff and Gateway Chula Vista LLC agree that additional legal consultant services
are necessary to complete negotiations and document preparation; and
WHERAS, Agency staff requires general advice on special financing
vehicles; and
WHEREAS, the Agency has an approved list of professionals to provide legal
services on a project-by-project basis, and Straddling Yacca Carlson & Rauth is
included on said list;
NOW, THEREFORE, BE IT RESOLVED the Redevelopment Agency of the
City of Chula Vista does hereby authorize a contract amendment to provide an
additional $45,000 from the BayfrontITown Centre I Professional Services account to
finance legal services to be provided by Straddling Yocca Carlson & Rauth for the
Gateway Chula Vista project.
PRESENTED BY
APPROVED AS TO FORM BY
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Chris Salomone
Director of Community Development
./
H:\HOME\COMMDEVlRESOSlstraddling2000.doc
d-3
". ..,.
JOINT REDEVELOPMENT AGENCY / CITY COUNCIL
AGENDA STATEMENT
ITEM NO.: .3
MEETING DATE: 05/02/00
ITEM TITLE:
a. AGENCY RESOLUTION APPROVING THE AGENCY FINANCIAL PLAN
AND AMENDING VARIOUS AGENCY PROJECT AREA FISCAL YEAR
2000 BUDGETS IN ACCORDANCE WITH THE APPROVED AGENCY
FINANCIAL PLAN AND AUTHORIZING THE VARIOUS INTER-PROJECT
AREA ADVANCES AND ADVANCE REPAYMENTS RELATED THERETO,
AND AUTHORIZING THE EXPENDITURE OF LOW AND MODERATE
INCOME HOUSING FUNDS OUTSIDE THE PROJECT AREA
b. AGENCY RESOLUTION AUTHORIZING AND DIRECTING THE
ISSUANCE AND SALE OF (I) NOT-TO-EXCEED $7,000,000 PRINCIPAL
AMOUNT 2000 TAX ALLOCATION BONDS FOR THE TOWN CENTRE
NO. II REDEVELOPMENT PROJECT, (II) NOT-TO-EXCEED $7,000,000
PRINCIPAL AMOUNT 2000 TAX ALLOCATION BONDS FOR THE OTAY
VALLEY ROAD REDEVELOPMENT PROJECT, AND (III) NOT-TO-EXCEED
$4,000,000 PRINCIPAL AMOUNT 2000 TAX ALLOCATION BONDS
FOR THE SOUTHWEST REDEVELOPMENT PROJECT, AND APPROVING
AN OFFICIAL NOTICE OF SALE FOR EACH, A CONTINUING
DISCLOSURE CERTIFICATE FOR EACH, APPROVING THE PREPARATION
AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND
FINANCING DOCUMENTS, AUTHORIZING THE SALE OF THE 2000
BONDS ON CERTAIN TERMS AND CONDITIONS, AUTHORIZING
CERTAIN OTHER OFFICIAL ACTIONS AND PROVIDING FOR OTHER
MATTERS PROPERLY RELATING THERETO, AND APPROVING A
CONTRACT WITH ROD GUNN ASSOCIATES FOR FINANCIAL ADVISOR
SERVICES AND WAIVING THE CONSULTANT SELECTION PROCESS AS
IMPRACTICAL
c. COUNCIL RESOLUTION APPROVING THE SALE OF THREE SERIES OF
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA 2000 TAX
ALLOCATION BONDS FOR THREE REDEVELOPMENT PROJECTS
d. COUNCIL RESOLUTION AUTHORIZING THE EXPENDITURE OF LOW
AND MODERATE INCOME HOUSING FUNDS OUTSIDE OF THE
PROJECT AREA
SUBMITTED BY: DEPUTY CITY MANAGER/FINANCE DIRECTOR
COMMUNITY DEV,ELOPMENT DIRECTOR ~
REVIEWED BY: CITY MANAGER ,(Q l
4/5THS VOTE: YES 0 NO D
3 - r
"Ir". ...,..
PAGE 2, ITEM NO.: 3
MEETING DATE: 05/02/00
BACKGROUND
In May 1999 staff secured the services of Rod Gunn Associates (RGA) to prepare an Agency
Financial Plan to evaluate the Agency's financial status. Staff felt that the timing for such an
analysis was good in light of the Agency's improving fiscal condition, current growth economy
and the advancing time limits for the Agency to incur debt in some of the proiect areas.
As a result of their analysis, RGA is recommending a two phased financial plan (attached as
Exhibit A) to meet specific Agency financial objectives. Phase I proposes the issuance of
approximately $12,071,197 (net) in tax-exempt tax allocation bonds to be secured by property
tax increment from the Otay Valley Road, Town Centre II and Southwest Project Areas. The
authorizing resolutions incorporate "not-to-exceed" amounts totaling $18 million depending on
the interest rates and other financial factors at the actual time of issuance. The bond proceeds
would be used to repay some interfund loans and provide funding for future Agency projects over
the next three to five years to take advantage of the development opportunities in the current
growth economy.
Phase II contemplates a financial merger of all of the project areas and subsequent issuance of
more bonds sometime before 2004, which is the last year to incur debt in the original areas of
Bayfront/Town Centre I, Town Centre II, and Otay Valley. The financial merger is not
recommended at this time since the tax increment revenue picture in the Bayfront project area is
unclear due to the status of the Midbayfront, BFGoodrich south campus, and power plant sites.
If the financial plan is approved, the Agency is being asked to approve several budget appropriation
amendments (Resolution "A") to reflect the bond proceeds repayment advances (described later) as
well as a short-term interfund loan from Town Centre II to Southwest and Town Centre II paying a
portion of the housing set-aside obligations for Bayfront and Southwest. Various project areas have
from time to time experienced cash shortages due to economic downturns, cash flow timing
differences, etc. In the past, these shortages have been remedied through loans from other City
funds, primarily Sewer Capital funds. In order to maximize the benefits to be derived from the
planned issuance of Tax Allocation Bonds within the next sixty days, the Southwest Project Area
requires a $300,000 short term cash loan which will be repaid with the proceeds from the bonds.
The Town Centre II Project Area currently has sufficient cash to comfortably make this short term
loan.
The proposed plan was conceptually approved in December 1999, however, Council requested a
workshop to discuss it in more detail prior to final consideration. The workshop was held on March
16 with Council approving the plan and directing staff to prepare all the necessary agreements and
documents for final consideration. The only significant change to the plan from the March 16
workshop is a $37,000 increase in administrative charges which, along with other changes, resulted
in a $450,000 loss in bonding capacity. This report provides a summary of the revised plan (with
expected fiscal results) and requests Council! Agency approval of the issuance of the RDA 2000 Tax
Allocation Bonds in the above identified not-to-exceed amounts.
.3-;)...
... .,.
PAGE 3, ITEM NO.:
MEETING DATE:
3
05/02/00
RECOMMENDATION
Adopt the resolutions opproving the Agency Financial Plan and associated Agency budget
amendments; authorizing the sale of the Redevelopment Agency 2000 Tax Allocation Bonds and
authorizing the expenditure of Low and Moderate Income Housing funds outside of the Town
Centre II Project Area pursuant to the opproved Financial Plan.
BOARDS/COMMISSIONS RECOMMENDATION
Not Applicable
DISCUSSION
As previously indicated, the timing of the proposed bond issuance is well planned given the
improving Agency fiscal condition and the current growth economy. The bond proceeds will be
used to repay some interfund loans (primarily Boyfront) and fund future projects over the next
three to five years. The project monies (which need to be spent on projects within three to five
years) will be critical in helping "prime the pump" for development in the Bayfront, downtown and
Southwest project areas during this current window of opportunity for economic growth.
Prior to discussing the specifics of the proposed financial plan and bond terms, it is important to
briefly discuss recent Agency financial and performance history in order to place the proposed
plan in proper context and fully understond the basis for the objectives.
Backaround
The statewide recession of the late 1980's and early to mid 1990's resulted in several concurrent
negative fiscal impacts to the City ond Agency which have had lingering long-term effects. Major
property tox reassessments and stagnant growth in property tax revenues in general, as well as
State "takeaways" through the State Education Revenue Augmentotion Fund (ERAF) negatively
influenced overall revenues and fiscal health. While growth in the City in general was slow, the
Redevelopment Agency was very active completing and incentivizing the Palomar Trolley Center,
Wol*Mart, Auto Park, and Chula Vista Center Renovation projects. The Agency also laid the
groundwork for the Scripps Hospitol Exponsion project (negotiations and relocations) and actively
pursued the Barkett "Mid-Bayfront" project. The sales tax producing projects helped the General
Fund maintain a steady sales tax base while other communities in the region and throughout the
State were experiencing significant declines.
The land acquisition for the Auto Park project was incentivized through major loans from the
Bayfront project area to the Otoy Valley project area. The Boyfront loans were made largely from
the previous Bayfront Tax Allocation Bond (TABs) proceeds. The Chula Vista Center was
incentivized through the issuance of General Fund Certificates of Participation (COPs) for the
parking structure. This General Fund obligation was arranged so thot the General Fund could
potentially be repaid in the future if the project area had surplus revenues. However, Town
Centre II funded the debt service for the COPs in the early years from fund reserves until those
reserves were depleted several years ago. Those COP payments, along with the other factors
3-3
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PAGE 4, ITEM NO.:
MEETING DATE:
-'
05/02/00
identified above (property tax reassessments, stagnant Agency revenues, ERAF, and major proiect
expenditures and loans) led to depleted Agency reserves, which then resulted in the current
outstanding loan advances from the General Fund and Sewer Fund. Additionally, it should be
noted that throughout this period, the Bayfront project area was also advancing annual loans of
mare than $200,000 to the Nature Interpretive Center (NIC) for its operating budget. The RDA
continues to make these loans and the proposed plan does not provide relief from that
obligation.
In an effort to get through the recession as easily as possible, the Agency then began selling non-
essential assets, canceling Capital Improvement Projects, reducing operating budgets and
refinanced (for the third and final time), the Bayfront TABs to achieve some annual debt service
savings. Those short term efforts were generally effective under the economic and financial
circumstances at that time. However, the proposed conceptual plan presented for consideration
reflects a much brighter set of circumstances and is geared toward addressing some of the
lingering negative results of the recession.
Financial Plan Obiectives
After a thorough review of the current Agency fiscal condition, Finance and Community
Development staff outlined basic Agency financial objectives for RGA to address in the proposed
plan. Staff recommended that the plan address the following objectives in order of priority: 1)
Repay the Sewer and RDA interfund loans, 2) Raise capitol for projects, 3) Eliminate existing fund
balance deficits in the BayfrontfT own Centre I project areas, 4) Fund staff and operations costs
on an on-going basis, and then 5) Repay the General Fund and/or fund the Certificates of
Participation (COP) payments. Phase I substantially addresses the first four objectives and Phase
II is expected to address the fifth objective.
Proposed Financial Plan - Phase I
Given the above stated objectives, the plan proposes to issue approximately $12,071,197 (net) in
tax-exempt bonds from the Town Centre II, Southwest, and Otay Valley Road project areas in
order to repay certain obligations of various redevelopment areas and raise funds for projects
after providing funding for annual staff and operations costs. The table below delineates the
proposed sources and uses of the bond proceeds:
SOURCES USES PROJECT FUNDS
Town Centre II $4,404,281 Repay Bayfront Loans $9,380,172 $8,485,701
Southwest 2,302,396 Repay Sewer Fund 1,043,392
Otay Valley 5,364,520 Repay General Fund 610,690
Project Funds 1,036,943 1,036,943
TOTAL $12,071,197 TOTAL $12,071,197 $9,522,644
It is important to note that of the $9,380,172 loan repayment going back to Bayfront,
$8,485,701 would be available for projects with the remaining $894,471 used to fully repay the
loon from the Sewer Fund. The net effect is that the entire Sewer Fund loon ($1,937,863) is
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repaid, a small General Fund loan is repaid ($610,960) and the Agency receives $9,522,644 for
projects. For federal tax purposes, roughly 85% of the bond proceeds need to be spent within
three years, and 100% within five years. Repayment of Agency or City interfund loans ore not
treated as an expenditure of bond proceeds, for those purposes, expenditures of bond proceeds
will be tracked through the timely capital expenditures of the repaid funds.
Bond Terms and Debt Service
The revenue estimates for the proposed bonds are conservative. The coverage ratios are
between 1 Ax and 1.75x after accommodating for over $2 million in annual administrative costs.
Annual growth assumptions are 5% in Otay Valley and only 2% in Town Centre II and Southwest.
In terms of new growth, all that is included is the build-out of the Wal*Mart Center, the
Greenwald development (Family Resource Center), and the old Corporation Yard by 2002/03.
Included as Exhibit B are the sources, uses and debt service tables for each of the issues. Town
Centre II runs through 2028, while Southwest and Otay Valley runs through 2030.
The plan also includes a negotiated in lieu annual payment of $180,000 from Allied Waste in
order to help mitigate the revenue loss to the Agency from their tax assessment appeal. It is
anticipated that staff will be presenting this agreement to City Council in the near future. Even if
this in-lieu payment is not achieved, staff is comfortable that over time, this unrealized revenue
stream will be made up from other development.
Finally, the plan includes a strategy to fulfill a portion of the Agency's housing set-aside
requirement from Bayfront and the Southwest project from Town Centre II. The housing set-aside
requirement is a requirement to set aside 20% of all the Agency's tax increment in the Low/Mod
Housing Fund. Traditionally, agencies satisfy this requirement by setting aside 20% of the tax
increment from each project. However, Section 33334.3(i) of the Health & Safety Code allows
agencies with multiple project areas to fund the total housing set-aside dollar requirement from
any project area they choose, so long as the total deposit equals 20% of all tax increment receipts
of the Agency. In effect, the Agency could fund all of its housing requirement from one project
area, thus freeing up funds in other project areas for economic development. This strategy is
recommended since it will free up tax increment in Southwest on which to bond, and will not
adversely impact Town Centre II or the Low/Mod Housing Fund. This adjustment has been
incorporated in the budget amendment resolution ("A") and is the purpose for the request to
adopt resolution ("0").
Fiscal Results
Two important elements that will be addressed in Phase I, ore the elimination of negative fund
balances (deficits) and substantial reduction of the RDA inter-fund advances described previously.
The following table delineates the "before" and "after" picture for the Agency's fund balances:
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TABLE 1
REDEVELOPMENT AGENCY
FINANCIAL PLAN FUND BALANCE ANALYSIS
Available Fund Balance (Deficit) at 6/30/99 ($1,717,772) $1,021,783 $980,736 ($1,343,196) ($1,058,449)
Tax Allocation Bond Proceeds 4,404,281 5,364,520 2,302,396 12,071,197
Repayment of Inter.Project Area Advances 9,380,172 (3,681,667) (5,364,520) (333,985)
Repayment of General Fund Advances (610,960) (610,960)
Post Financial Plan Available Fund Balance $7,662,400 $1,133,437 $980,736 $625,215 $10,401,788
As the previous toble reflects, the negotive fund balances in Bayfront/TC I and Southwest will be
eliminated and as a whole, the Redevelopment Project Funds will have substantial fund reserves
($10.40 million) to proactively pursue and incentivize future development projects over the next
three to five years. It should be stressed aaain that the amount of funds available for "proiects" is
after allocatina $2.108.502 in annual administrative costs which includes an allocation of
$342,468 for the annual RDA loan to the Nature Interpretive Center (NIC).
Table 2 provides a "before" and "after" picture of the inter-fund advances. As indicated, overoll
the RDA advances (including advances from the General Fund) will be reduced from $33.73
million to $21.80 million. The Bayfront is currently owed $15.865 million and will be repaid all
but $6.485 million. There will still be substantial outstanding loans owed to the General Fund
with repayment terms primarily based on the Agency's ability to pay from surplus revenues.
TABLE 2
INTERFUND ADVANCES
Existing
Repayment
REMAINING
$15,629,325
(610,960)
$15,018,365
$1,937,863
(1,937,863)
$ 0
$15,865,059
(9,380.172)
$6,484,887
$300,450
$33,732,697
(11,928,995)
$21,803,702
$300,450
As outlined in Table 3 on the following page, of the $21.80 million of remaining loans, $15.02
million will still be owed to the General Fund which is primarily from the Town Centre II
Certificates of Participation for the Chula Vista Center ($12.84 million). This amount will increase
as the General Fund continues to make the COP payments as was originally contemplated when
the bonds were issued.
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Southwest $671,144 $300,450 $971,594
Town Centre II 12,839,165 12,839,165
Otay Valley Road 6,484,887 6,484,887
Baylront 1,508,056 1,508,056
TOTAL $15,018,365 $ 0 $6,484,887 $300,450 $21,803,702
It is hoped that Phase II of the plan (financial merger) will allow for a substantial amount of the
remaining advances from the General Fund to be repaid. The development of the Bayfront will
be the key to providing the Agency with the ability to repay those advances.
Proposed Financial Plan - Phase II
As previously discussed, Phase II of the plan calls for the Agency to consider the benefits of a
financial merger of all of the project areas and then the subsequent issuance of additional bonds
sometime prior to 2004. The idea is to "pool" the collective resources of all of the project areas to
achieve some bonding efficiencies, eliminate inter-RDA project area loans, and increase overall
flexibility. Current time limitations to incur debt (2004) in the Bayfront/Town Centre I (original
area), Town Centre II (original area), and Otay Valley Road project areas bring a sense of
urgency to this matter.
The financial merger is not recommended at this time since the Bayfront project revenue picture is
so unclear. Future tax increment revenue questions on the Midbayfront, BFG South Campus and
power plant sites need to be answered positively over the next couple of years in order for the
merger to be effective. With some significant development in the Bayfront over the next few
years, it is hoped that the revenue picture will be solid enough to merge the project areas and
issue bonds. It is expected that a significant portion of the bond proceeds would go toward
repaying the General Fund for the COPs at that time. The need for Bayfront development is a
major reason for staff recommending that Bayfront be repaid from the loans advanced. The
project area needs to have monies available to create/assist development opportunities.
Summarv
The proposed financial plan represents a proactive effort by staff to take advantage of current
market and financial conditions to help correct some of the negative fiscal impacts of the
recession. Staff is confident that the proposed plan will render positive financial benefits to both
the Agency and the City, and provide much needed capital to pursue projects during the current
growth economy that will be necessary to ensure a successful redevelopment program.
FISCAL IMPACT
Adoption of the resolutions will allow for the marketing and sale of three (3) series
allocation bonds in the Town Centre II, Otay Valley, and Southwest Project areas.
of tax
The
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compensation for the associated professional services (financial consultant, bond counsel elc.)
will be paid from the bond proceeds.
The issuance of bonds will result in several immediate positive budget impacts for FY 99/00 that
require amendments. The table below identifies the required appropriation and advance
repayment amendments as well as the corresponding funding sources as described in the report.
AGENCY FINANCIAL PLAN - PHASE I
REQUIRED BUDGET AMENDMENTS
APPROPRIATION SOURCE OF FUNDING
Town Centre II
Repay Bayfront Advances
Repay General Fund Advances
Advance to Southwest
Transfer to Low/Mod for Southwest
Transfer to Low/Mod for Bayfront
Otav Valley
Repay Bayfront Advances
SGuthwest
Repay Town Centre II Advance
Repay Bayfront Advances
Repay Sewer Loan Interest
Low/Mod Credit from Town Centre II
Barfront/Town Centre I
Repay Sewer Loan Interest
Low/Mod Credit from Town Centre II
AnACHMENTS
$3,681,667
$610,960
$300,000
$30,000
$526,000
$5,364,520
$300,000
$333,985
$218,391
($30,000)
$94,470
($526,000)
Bond Proceeds
Bond Proceeds
Available Fund Balance
Tax Increment Revenue
Tax Increment Revenue
Bond Proceeds
80nd Proceeds
Bond Proceeds
Bond Proceeds
I nterest Revenue
Attachment A - Agency Financial Plan
Attachment B - Debt Service Schedules
Attachment C - Agency Agreement with Rod Gunn Associates
Attachment D - Draft Official Statement - Agency 2000 Tax Allocation Bonds
H:\HOME\COMMDEV\STAFF.REP\05-02-00\RDA 2000 TABS.doc
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RESOLUTION NO.
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA APPROVING THE AGENCY FINANCIAL PLAN
AND AMENDING VARIOUS AGENCY PROJECT AREA FISCAL
YEAR 2000 BUDGETS IN ACCORDANCE WITH THE APPROVED
AGENCY FINANCIAL PLAN AND AUTHORIZING THE VARIOUS
INTER-PROJECT AREA ADVANCES AND ADVANCE
REPAYMENTS RELATED THERETO, AND AUTHORIZING THE
EXPENDITURE OF LOW AND MODERATE INCOME HOUSING
FUNDS OUTSIDE THE PROJECT AREA
WHEREAS, the Redevelopment Agency of the City of Chula Vista ("Agency") hired Rod
Gunn Associates ("RGA") to conduct an Agency financial analysis and prepare a financial plan; and
WHEREAS, RGA conducted the analysis and prepared an Agency Financial Plan ("Plan")
that recommends the issuance of tax-exempt tax allocation bonds from the Town Centre II, Otay
Valley, and Southwest projects for the purposes of repaying some interfund advances and raising
capital for projects; and
WHEREAS, the Plan includes loan repayment advances from Town Centre II, Otay Valley
and Southwest in various amounts to the General Fund, Sewer Fund, and the Bayfront project as
identified in the table below; and
WHEREAS, the Plan includes the provision for Town Centre II to pay a portion of the Low
and Moderate Income Housing Fund obligations attributable to the Sauthwest Project ($30,000) and
the Bayfront Project ($526,000) from Town Centre II tax increment revenue as allowed for pursuant
to Health and Safety Code Section 33334.3(i); and
WHEREAS, the Agency at the time of consideration of the merits of the plan, alsa
considered the merits of Town Centre II paying a portion of the Low and Moderate Income Housing
Fund obligations (the "Housing Fund Contribution") attributable to Southwest and Bayfront, and has
concluded that Town Centre II will benefit from the expenditure of low and moderate income housing
funds outside of those respective project areas pursuant to Health and Safety Code Section 33334.2
(g); and
WHEREAS, concurrently herewith, the City Council of the City of Chula Vista ("City") and the
Agency after consideration of the merits of the Plan, approved the issuance of bonds (RDA 2000
Tax Allocation Bonds; "Bonds") and related documents on May 2, 2000; and
WHEREAS, in order to implement the Plan and issue the Bonds, the Fiscal Year 1999-00
budget for the Redevelopment Agency needs to be amended pursuant to the table below.
NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of
Chula Vista does hereby approve the Agency Financial Plan in the form presented and amend the
FY 2000 Agency Budget as follows:
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AGENCY FINANCIAL PLAN - PHASE I
REQUIRED BUDGET AMENDMENTS
APPROPRIATION SOURCE OF FUNDING
Town Centre II
Repay Bayfront Advances
Repay General Fund Advances
Advance to Southwest
Transfer to Low/Mod for Southwest
Transfer to Low/Mod for Bayfront
Otav Vallev
Repay Bayfront Advances
Southwest
Repay Town Centre II Advance
Repay Bayfront Advances
Repay Sewer Loan Interest
Low/Mod Credit from Town Centre II
Bayfront/Town Centre I
Repay Sewer Loan Interest
Low/Mod Credit from Town Centre II
$3,681,667
$610,960
$300,000
$30,000
$526,000
$5,364,520
$300,000
$333,985
$218,391
($30,000)
$94,470
($526,000)
Bond Proceeds
Bond Proceeds
Available Fund Balance
Tax Increment Revenue
Tax Increment Revenue
Bond Proceeds
Bond Proceeds
Bond Proceeds
Bond Proceeds
1 nterest Revenue
BE IT FURTHER RESOLVED that the Redevelopment Agency of the City of Chula Vista
does hereby find, pursuant to Health and Safety Code Section 33334.2 (g) that Town Centre II
project, made up of non-contiguous commercial and public facility properties, will benefit from the
expenditure of low and moderate income housing funds outside of the project area.
BE IT FURTHER RESOLVED that the Redevelopment Agency of the City of Chula Vista
authorizes the allocation of less than the required Housing Fund Contribution attributable to the
Southwest and Bayfront project areas to the extent that the difference between the actual Housing
Fund Contribution and the required Housing Fund Contribution is instead allocated, in the same
fiscal year, from tax increment revenues of Town Centre II or other Agency project areas, and the
Agency hereby directs such allocation from Town Centre II for FY 2000.
PRESENTED BY
(J, ~..--
Chris S~:
Director of Community Development
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APPROVED AS TO FORM BY
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RESOLUTION NO.
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA AUTHORIZING AND DIRECTING THE ISSUANCE AND SALE
OF (I) NOT-TO-EXCEED $7,000,000 PRINCiPAL AMOUNT 2000 TAX
ALLOCATION BONDS FOR THE TOWN CENTRE NO. II REDEVELOPMENT
PROJECT, (II) NOT-TO-EXCEED $7,000,000 PRINCIPAL AMOUNT 2000 TAX
ALLOCATION BONDS FOR THE OTAY VALLEY ROAD REDEVELOPMENT
PROJECT, AND (III) NOT-TO-EXCEED $4,000,000 PRINCIPAL AMOUNT 2000
TAX ALLOCATION BONDS FOR THE SOUTHWEST REDEVELOPMENT
PROJECT, AND APPROVING AN OFFICIAL NOTICE OF SALE FOR EACH, A
CONTINUING DISCLOSURE CERTIFICATE FOR EACH, APPROViNG THE
PREPARATION AND DISTRIBUTION OF A PRELIMINARY OFFICIAL
STATEMENT AND FINANCING DOCUMENTS, AUTHORIZING THE SALE OF
THE 2000 BONDS ON CERTAiN TERMS AND CONDITIONS, AUTHORIZING
CERTAIN OTHER OFFICIAL ACTIONS AND PROVIDING FOR OTHER
MATTERS PROPERLY RELATING THERETO, AND APPROVING A
CONTRACT WITH ROD GUNN ASSOCIATES FOR FINANCIAL ADVISOR
SERVICES AND WAIVING THE CONSULTANT SELECTION PROCESS AS
IMPRACTICAL
WHEREAS, the Redevelopment Agency of the City of Chula Vista (herein referred to as the
"Agency") is a redevelopment agency duly created, established and authorized to transact business
and exercise its powers, all under and pursuant to the Community Redevelopment Law (Part 1 af
Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of
California), and the powers of the Agency include the power to issue bonds for any of its corporate
purposes; and
WHEREAS, the Agency wishes to sell at this time three series of tax allocation bonds, each
series being identified below (collectively, the "2000 Bonds"), for the purpose of paying and repaying
costs of redevelopment activity within three project areas; and
WHEREAS, proceeds of one series of the 2000 Bonds will be used (i) to payor repay costs
of redevelopment activity of the Town Centre No. II Redevelopment Project Area; (ii) to establish a
reserve account for such bonds; and (iii) to pay a portion of the costs of issuing such bands (such
series being referred to herein as the "Town Centre Bonds"); and
WHEREAS, proceeds of a second series of the 2000 Bonds will be used (i) to payor repay
costs of redevelopment activity of the Otay Valley Road Redevelopment Project Area; (ii) to
establish a reserve account for such bonds; and (i1i) to pay a portion of the costs of issuing such
bonds (such series being referred to herein as the "Otay Valley Bonds"); and
WHEREAS, proceeds of a third series of the 2000 Bonds will be used (i) to payor repay
costs of redevelopment activity of the Southwest Redevelopment Project Area; (i1) to establish a
reserve account for such bonds; and (iii) to pay a portion of the costs of issuing such bonds (such
series being referred to herein as the "Southwest Bonds"); and
WHEREAS, it is desirable that each series of the 2000 Bonds be offered for public sale at
this time; and
WHEREAS, the Agency desires to authorize the sale of each series of the 2000 Bonds upon
the terms and conditions hereinafter set forth;
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NOW, THEREFORE, the Redevelopment Agency of the City of Chula Vista does hereby
resolve and declare as follows:
SECTION 1. Sale Authorized; Time and Place For Bids on Town Centre Bonds. The sale
of not to exceed Seven Million Dollars ($7,000,000) principal amount REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA, 2000 TAX ALLOCATION BONDS (TOWN CENTRE NO. II
REDEVELOPMENT PROJECT), in accordance with law, is hereby authorized. Tuesday, May 16,
2000 or May 23, 2000, as Executive Director or the Treasurer may designate, between the hours of
9:00 a.m. and 9:30 a.m. Pacific Daylight Savings Time or any business day within 60 days thereafter
at which bids are received is hereby fixed as the time, and the MuniAuction website
(www.MuniAuction.com) and/or the offices of the Financial Advisor is hereby fixed as the place at
which bids will be received for the purchase of the Town Centre Bonds, as described in and subject
to the terms and conditions of the Official Notice of Sale for the Town Centre Bonds hereinafter
referred to. The Executive Director or the Treasurer of the Agency is hereby authorized and directed
for and on behalf of the Agency to select the date for receipt of bids and to award sale of the Town
Centre Bonds within 24 hours of the receipt of bids to the responsible bidder offering the lowest true
interest cast to the Agency, all as determined by the Executive Director or the Treasurer, in
consuitation with the Agency's Financial Advisor, with the right being reserved to reject any and all
bids; provided that the aggregate principal amount of the Town Centre Bonds shall not exceed
Seven Million Dollars ($7,000,000) the stated interest rate for any maturity of Town Centre Bonds
may not exceed seven percent (7%) per annum, and the initial purchaser's discount may not exceed
one and one half percent (1.5%) of the aggregate principal amount of the Town Centre Bonds.
SECTION 2. Sale Authorized; Time and Place For Bids on Otay Valley Bonds. The sale of
not to exceed Seven Million Dollars ($7,000,000) principal amount REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA, 2000 TAX ALLOCATION BONDS (OTAY VALLEY ROAD
REDEVELOPMENT PROJECT), in accordance with law, is hereby authorized. Tuesday, May 16,
2000 or May 23, 2000, as Executive Director or the Treasurer may designate, between the hours of
9:00 a.m. and 9:30 a.m. Pacific Daylight Savings Time or any business day within 60 days thereafter
at which bids are received is hereby fixed as the time, and the MuniAuction website
(www.MuniAuctian.com) and/or the offices af the Financial Advisor is hereby fixed as the place at
which bids will be received for the purchase of the Otay Valley Bonds, as described in and subject to
the terms and conditions of the Official Notice of Sale for the Otay Valley Bonds hereinafter referred
to. The Executive Director or the Treasurer of the Agency is hereby authorized and directed for and
on behalf of the Agency to select the date for receipt of bids and to award sale of the Otay Valley
Bonds within 24 hours of the receipt of bids to the responsible bidder offering the lowest true interest
cost to the Agency, all as determined by the Executive Director or the Treasurer, in consultation with
the Agency's Financial Advisor, with the right being reserved to reject any and all bids; provided that
the aggregate principal amount of the Otay Valley Bonds shall not exceed Seven Million Dollars
($7,000,000) the stated interest rate for any maturity of Otay Valley Bonds may not exceed seven
percent (7%) per annum, and the initial purchaser's discount may not exceed one and one half
percent (1.5%) of the aggregate principal amount of the Otay Valley Bonds.
SECTION 3. Sale Authorized; Time and Place For Bids on Southwest Bonds. The sale of
not to exceed Four Million Dollars ($4,000,000) principal amount REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA, 2000 TAX ALLOCATION BONDS (SOUTHWEST
REDEVELOPMENT PROJECT), in accordance with law, is hereby authorized. Tuesday, May 16,
2000 or May 23, 2000, as Executive Director or the Treasurer may designate, between the hours of
9:00 a.m. and 9:30 a.m. Pacific Daylight Savings Time or any business day within 60 days thereafter
at which bids are received is hereby fixed as the time, and the MuniAuction website
(www.MuniAuction.com) and/or the offices of the Financial Advisor is hereby fixed as the place at
which bids will be received for the purchase of the Southwest Bonds, as described in and subject to
the terms and conditions of the Official Notice of Sale for the Southwest Bonds hereinafter referred
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to. The Executive Director or the Treasurer of the Agency is hereby authorized and directed for and
on behalf of the Agency to select the date for receipt of bids and to award sale af the Southwest
Bonds within 24 hours af the receipt af bids ta the respansible bidder affering the lawest true interest
cost to the Agency, all as determined by the Executive Director or the Treasurer, in consultation with
the Agency's Financial Advisor, with the right being reserved to reject any and all bids; provided that
the aggregate principal amount of the Southwest Bonds shall not exceed Four Million Dollars
($4,000,000) the stated interest rate far any maturity af Sauthwest Bands may nat exceed seven
percent (7%) per annum, and the initial purchaser's discount may not exceed one and one half
percent (1.5%) of the aggregate principal amount of the Southwest Bonds.
SECTION 4. Official Notices of Sale. The invitations for bids for the purchase of each
series af the 2000 Bonds is hereby authorized, such invitations to be sub!?tantially in accordance
with the Notice Inviting Bids and Proposal Form, which includes a bid form, all in the form presented
at this meeting and on file with the Executive Director (collectively, the "Official Notices of Sale"),
with such changes and modifications as may be deemed appropriate or necessary by Agency staff
and Band Counsel, including the principal amount of each series of the 2000 Bonds, to cause the
Official Notices of Sale to conform to the terms of the applicable series of the 2000 Bonds as such
terms are set forth in the hereinafter referred to Preliminary Official Statement.
SECTION 5. Publication of Official Notice of Sale. The Agency's Financial Advisor shall
cause the Official Notices of Sale or the Notices of Intention to Sell Bonds referenced in Section 9
hereof, in their final farms with such changes and modifications referred to in Sections 4 and 9
hereof, to be published once in the Star News, a newspaper published and of general circulation in
the City of Chula Vista, California, (or any other such newspaper) on or before a date at least five (5)
days prior to the day fixed for the receipt of bids.
SECTION 6. Terms and Conditions of Sale. The terms and conditions of the affering and
the sale of each series of the 2000 Bonds shall be as specified in the Official Notices of Sale,
including such modifications thereto as permitted pursuant to Section 4 hereof.
SECTION 7. Official Statement Authorized. The Agency hereby approves the preliminary
official statement (the "Preliminary Official Statement") in the form presented at this meeting and on
file with the Executive Director, with such changes and modificatians as may be deemed appropriate
or necessary by Agency staff, and authorizes its distribution in connection with the sale of the 2000
Bonds.
SECTION 8. Furnishinq of Official Notices of Sale and Preliminarv Official Statement. The
Financial Advisor is hereby authorized and directed to cause to be furnished to prospective bidders a
reasonable number of copies of the Official Notices of Sale (including the applicable Bid Form) and a
reasonable number of copies of the Preliminary Official Statement.
SECTION 9. Publication of Notices of Intention to Sell. The Secretary of the Agency in
cooperation with the Financial Advisor shall cause a copy of each Notice of Intention to Sell Bonds to
be published once in the Bond Buyer, One State Street Plaza, New York, New York, substantially in
the form on file with the Executive Director with such changes and modifications as may be deemed
appropriate and necessary by Agency staff and Bond Counsel to cause each Notice of Intention to
Sell Bonds to conform to the terms of the applicable series of the 2000 Bonds as such terms are set
forth in the Preliminary Official Statement. Such publication shall be on or before a date at least
fifteen (15) days prior to the date fixed for the receipt of bids.
SECTION 10. Filinq of CDIAC Notice. The Agency hereby approves the filing by Bond
Counsel of a notice of the Agency's intent to sell each series of the 2000 Bonds with the California
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Debt and Investment Advisory Commission pursuant to Section 8855 of the California Government
Code.
SECTION 11. Issuance and Sale of 2000 Bonds. Pursuant to the Indentures (hereinafter
defined), (i) the Town Centre Bonds in an aggregate principal amount not to exceed $7,000,000 are
hereby authorized to be issued, (ii) the Otay Valley Bonds in an aggregate principal amount not to
exceed $7,000,000 are hereby autharized to be issued, and (i) the Sauthwest Bands in an aggregate
principal amaunt not to exceed $4,000,000 are hereby authorized to be issued. The 2000 Bonds
shall be executed by the manual or facsimile signature of the Chairperson, the seal or facsimile of
the seal of the Agency shall be reproduced thereon and attested by the manual or facsimile
signature of the Secretary, in the forms set farth in and otherwise in accordance with the Indentures.
SECTION 12. Approval of Indentures. The Agency hereby approves (i) the proposed form
of Indenture of Trust for the Town Centre Bonds (the "Town Centre Indenture") dated as of June 1,
2000, between the Agency and U.S. Bank National Trust Association, as trustee (the "Trustee") in
the form on file with the Secretary, (ii) the proposed form of Indenture of Trust for the Otay Valley
Bonds (the "Otay Valley Indenture") dated as of June 1, 2000, between the Agency and the Trustee
in the form on file with the Secretary, and (iii) the proposed form of Indenture of Trust for the
Southwest Bonds (the "Southwest Indenture," and together with the Town Centre Indenture and the
Otay Valley Indenture, the "Indentures") dated as of June 1, 2000, between the Agency and the
Trustee in the form on file with the Secretary. The Executive Director ar the Treasurer is hereby
authorized and directed to execute and deliver, and the Secretary is hereby authorized and directed
to attest and affix the seal of the Agency to the Indentures in substantially said forms, with such
additions thereto or changes therein as are approved by the Executive Directar or the Treasurer
upon consultation with Bond Counsel and the Agency's Financial Advisor (including such additions
or changes as are necessary or advisable in accordance with Section 17 hereof), the approval of
such additions or changes to be conclusively evidenced by the execution and delivery of the
Indentures by the Executive Director or the Treasurer.
SECTION 13. Approval of Continuino Disclosure Certificate. The Agency hereby approves
the Continuing Disclosure Certificates together with any additions thereto or changes therein as may
be necessary to conform the terms of the Continuing Disclosure Certificates to the terms thereof
described in the Preliminary Official Statement deemed necessary or advisable by the Executive
Director or the Treasurer, whose execution thereof shall be conclusive evidence of approval of any
such additions and changes. The Executive Director or the Treasurer is hereby authorized and
directed to execute the final form of the Continuing Disclosure Certificates for and in the name and
on behalf of the Agency.
SECTION 14. Delivery of the 2000 Bonds. The Agency hereby approves the sale of each
series of the 2000 Bonds by the Agency by competitive sale to the purchaser to whom the applicable
series of the 2000 Bonds are awarded. The applicable series of the 2000 Bonds shall be delivered
to the Purchaser upon compliance with the terms and conditions set forth in the Official Notice of
Sale for such series. The Executive Director, the Secretary, the Treasurer and other proper officers
of the Agency are hereby authorized and directed to deliver any and all documents and instruments,
to authorize the payment of Costs of Issuance for each series of the 2000 Bonds (as defined and
provided in the Indentures) and to do and cause to be done any and all acts and things necessary or
convenient for delivery of the applicable series of the 2000 Bonds to the Purchaser.
SECTION 15. Official Action. The Chairperson, the Vice-Chairperson, the Treasurer, the
Executive Director, the Secretary, the Agency Counsel and any and all other officers of the Agency
are hereby 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, documents, including the securing of bond insurance, if available at a present value
..3-6-1
... .,
savings, and additions to the financing documents of bond insurance provIsions necessary or
appropriate to facilitate the issuance af the 2000 Bonds in accordance with this Resolution.
SECTION 16. EnQaqement of Professional Services. The Agency hereby waives the
consultant selection process as impractical and approves the engagement of Rod Gunn Associates,
Inc. ("RGA") as Financial Advisor to the Agency and the Treasurer is hereby authorized and directed
ta execute an agreement with such firm in the farm on file with the Secretary to the Redevelopment
Agency. The Agency finds and determines that the consultant selection process is impractical in this
instance as RGA has, under an existing contract with the Agency, developed the Agency's Financial
Plan that contemplates the issuance of the 2000 Bonds and is therefore uniquely qualified to provide
Financial Advisor services to the Agency far such bond issue; RGA is offering such services at
reasonable rates.
SECTION 17. General Authorization. The Financial Advisor and/or Bond Counsel are
hereby authorized and directed to open the bids at the time and place specified in said Official
Notices of Sale and to present the same to the Agency. The Financial Advisor and/or Bond Counsel
are hereby authorized and directed to receive and record the receipt of all bids made pursuant to
said Official Notices of Sale, to cause computations to be made as to which bidder has bid the
lowest true interest cost to the Agency and to present such bids to the Agency, as provided in said
Official Notices of Sale, along with a report as to the foregoing and any other matters deemed
pertinent to the award of each series of the 2000 Bonds and the issuance thereof.
SECTION 18. Effective Date. This Resolution shall take effect upon adoption.
PRESENTED BY
APPROVED AS TO FORM BY
(!k s: O~
Chris Salomone
Director of Community Development
-3 - 6 - 5-
.,. ..,.
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA APPROVING THE SALE OF THREE SERIES OF
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
2000 TAX ALLOCATION BONDS FOR THREE REDEVELOPMENT
PROJECTS
WHEREAS, the Redevelopment Agency of the City of Chula Vista (herein referred to as the
"Agency") is a redevelopment agency duly created, established and authorized to transact business
and exercise its powers, all under and pursuant to the Community Redevelopment Law (Part 1 of
Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of
California), and the powers of the Agency include the power to issue bonds for any of its corporate
purposes; and
WHEREAS, the Agency wishes to sell at this time three series of tax allocation bonds, each
series being identified below (collectively, the "2000 Bonds"), for the purpose of paying and repaying
costs of redevelopment activity within three project areas; and
WHEREAS, proceeds of one series of the 2000 Bonds will be used (i) to payor repay costs
of redevelopment activity of the Town Centre No. II Redevelopment Project Area; (ii) to establish a
reserve account for such bonds; and (iii) to pay a portion of the costs of issuing such bonds (such
series being referred to herein as the "Town Centre Bonds"); and
WHEREAS, proceeds of one series of the 2000 Bonds will be used (i) to payor repay costs
of redevelopment activity of the Otay Valley Road Redevelopment Project Area; (ii) ta establish a
reserve account far such bonds; and (iii) ta pay a portion of the casts of issuing such bands (such
series being referred to herein as the "Otay Valley Bonds"); and
WHEREAS, proceeds of one series of the 2000 Bonds will be used (i) to payor repay costs
of redevelopment activity of the Southwest Redevelopment Project Area; (ii) to establish a reserve
account for such bonds; and (iii) to pay a portion of the costs of issuing such bonds (such series
being referred to herein as the "Southwest Bonds"); and
WHEREAS, it is desirable that the 2000 Bonds be offered for sale at this time in accordance
with the procedures described herein; and
WHEREAS, the Agency desires to authorize the sale of the 2000 Bonds upon the terms and
conditions hereinafter set forth; and
WHEREAS, the City Council has reviewed the terms and conditions for the issuance of the
2000 Bonds and desires to approve the issuance by the Agency of the 2000 Bonds pursuant to
Section 33640 of the Health and Safety Code;
NOW, THEREFORE, the City Council of the City of Chula Vista does hereby resolve and
declare as follows:
SECTION 1. Approval of Issuance of Town Centre Bonds. The City Council approves the
issuance by the Agency of not to exceed Seven Million Dollars ($7,000,000) principal amount
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, 2000 TAX ALLOCATION BONDS
(TOWN CENTRE NO. II REDEVELOPMENT PROJECT).
~-c-(
T. ..,.
SECTION 2. Approval af Issuance of Otav Vallev Bands. The City Council approves the
issuance by the Agency of not ta exceed Seven Million Dollars ($7,000,000) principal amount
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, 2000 TAX ALLOCATION BONDS
(OTAY VALLEY ROAD REDEVELOPMENT PROJECT).
SECTION 3. Approval of Issuance of Southwest Bonds. The City Council approves the
issuance by the Agency of not to exceed Four Million Dollars ($4,000,000) principal amount
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, 2000 TAX ALLOCATION BONDS
(SOUTHWEST REDEVELOPMENT PROJECT).
SECTION 4. Terms and Conditions of Sale. The terms and conditions of the offering and
the sale of the 2000 Bonds shall be as specified in the Official Notice of Sale for each series,
including such modifications thereta as may be made by the Executive Directar of the Agency.
SECTION 5. Official Action. The Mayor, the Vice-Mayor, the Finance Director, the City
Manager, the City Clerk, the City Attorney and any and all other officers of the City are hereby
authorized and directed, for and in the name and an behalf of the City, to do any and all things and
take any and all actions, including execution and delivery of any and all assignments, certificates,
and documents to facilitate the issuance of the 2000 Bonds in accordance with this Resolution.
SECTION 6. Effective Date. This Resolution shall take effect upon adoption.
PRESENTED BY APPROVED AS TO FORM BY
0L~
Chris Salomone
Director of Community Development
=c3 - c. - d--
... . ~
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA AUTHORIZING THE EXPENDITURE OF LOW AND
MODERATE INCOME HOUSING FUNDS OUTSIDE OF THE
PROJECT AREA
WHEREAS, the Redevelopment Agency of the City of Chula Vista (the "Agency") is engaged
in activities necessary to carry out and implement the Redevelopment Plans for the Southwest,
Bayfront, Town Centre No. II, and Otay Valley Road redevelopment project areas; and
WHEREAS, California Health and Safety Code Section 33334.2 (all section references
herein are to the Health and Safety Code unless otherwise speCified) authorize and direct the
Agency to set aside in a Low and Moderate Income Housing Fund and 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 (the "Housing Fund Contribution"); and
WHEREAS, pursuant to applicable law the Agency has established a Low and Moderate
Income Housing Fund (the "Housing Fund") for its redevelopment project areas; and
WHEREAS, pursuant to Section 33334.2 (g), the Agency is authorized to make expenditures
from the Housing Fund outside of its redevelopment project areas upon a resolution of the Agency
and the City Council of the City of Chula Vista ( the "City Council") that such use will be of benefit to
a redevelopment project area; and
WHEREAS, the Agency proposes to fund a portion of the Housing Fund Contributian
attributable ta the Southwest and Bayfront redevelopment project areas from tax increment revenues
of the Town Centre II redevelopment project area pursuant to the authority of Section 33334.3(i).
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA DOES
RESOLVE AS FOLLOWS:
Section 1. The City Council finds and determines that expenditures from the Housing
Fund outside of the Town Centre No. II redevelopment project area, or any other redevelopment
project area of the Agency pursuant to Section 33334.3(i), will be of benefit to such redevelopment
project area or areas.
PRESENTED BY
APPROVED AS TO FORM BY
~,
,
Chris Salomone
Director of Community Development
cJ - d - (
.,. ..,.
REPAY
GENERAL
FUND
S610.960
PROJECT
FU:'iDS
$111.6:54
CHULA VISTA REDEVELOPMENT AGENCY
FLOW OF FUNDS
USE OF BOND PROCEEDS TO REPAY INTERFUND ADVANCES
ALLOCATED
TO TOWN
CE~IRE II
/
/
..
T
REPAY
SA YFRONT
SH81.667
PROJEQ
FUNDS
S925.019
BOND
PROCEEDS
$12.071.197
$2.302.396
I
T
ALLOCATED
TO SOUTHWEST
T
REPAY
SEWER
FUND
SI.043.392
T
REPAY
BA YFRONT
$]33.985
ALLOCATED
TOOTAY
V ALLEY ROAD
T
T
REPAY
BA YFRONT
55.364.520
USE OF BAYFRONT ADVANCES REPAYMENT
PROJEQ
FUNDS
$8.485.701
". ..,.
ADVANCES
REPAID FROM
BOND
PROCEEDS
$9,380.172
T
REPAY
SEWER
FUND
5894.471
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e
THIS PAGE LEFT BLANK INTENTIONALLY
11--~
.,. . .,.
UPDATED
FINANCIAL PLAN
PREPARED FOR
CHULA VISTA
REDEVELOPMENT AGENCY
May 2, 2000
Rod Gunn Associates, Inc.
FINANCIAL CONSULTANTS
3010 Old Ranch Pkwy, Suite 330 . Seal Beach, CA 90740-2750
562-598-7677' FAX 562-431-5446
A~3
T' '..... ._. - -
e
Rod Gunn Associates, Inc.
FINANCIAL CONSULTANTS
Chula Vista Redevelopment Agency
276 Fourth Avenue
Chula Vista, CA 91910
Executive Summary
The purpose of this Financial Plan is to demonstrate the Agency's ability to repay its obligations during
the life of each of the Redevelopment Projects in conjunction with raising funds for economic
development. The Agency prioritized its objectives for the Financial Plan in the following order:
~ To repay the Sewer Trunk Fund
~ To repay the inter-project loans
~ To raise funds for economic development
~ To eliminate existing fund balance deficits in Bayfront/Town Center and Southwest Projects
~ To fund staff costs
~ To repay the General Fund and/or fund the COP payments
The Financial Plan presented here achieves these objectives. The Financial Plan incorporates the
issuance of approximately $14,005,000 in tax-exempt tax allocation bonds. Proceeds of the bonds will
be utilized pursuant to the Financial Plan to repay obligations af the various redevelopment projects,
raise funds for economic development and provide resources to fund annual staff costs in the following
manner:
~ The anticipated June 30, 2000 outstanding balance of $1,937,863 due to the Sewer Trunk Fund
is repaid in full.
~ Inter-project loans are reduced from $16.1 million to $6.8 million in 1999/00. The balance is
repaid over time.
~ $8.5 million is raised in the Bayfront Project Area, $925,000 is raised in the Southwest Project
Area and $111,000 is raised in the Town Centre II Project Area.
~ The General Fund is repaid $610,000 in 1999/00. All other General Fund loans are repaid
over time on a priority subject to Agency discretion (i.e. the Agency could choose to fund
economic development first).
~ $2,108,000 in annual administrative costs estimated for 2000/01 are funded, which includes a
$342,000 contribution to the Bayfront Conservancy Trust.
~ The fund balance deficits in Bayfront/Town Centre and Southwest Project Areas are eliminated.
A-tj
3010 OLD RANCH PK\VY, SUITE 330 . SEAL BEACH, CA 90740-2750
562-S9R-7677 . F."uX 562-4.11-5446
... .,.
o
A further objective of the Financial Plan not stated by the Agency is to position the Agency financially
to maximize its ability to raise funds shortly before the AB 1290 time limit to incur debt is reached.
Phase I of the Financial Plan was developed by treating each Project Area on a stand-alone basis, so
that the objectives outlined above could be achieved without a merger of the Project Areas. Phase II of
the Financial Plan assesses the positive impacts that could be obtained by merging the Project Areas.
The primary benefit to the project merger is the ability to cross-collateralize the obligations of each of
the Project Areas and to use the combined surplus tax increment to fund projects or repay debts of any
underlying project area. This will be discussed further in conjunction with our recommendations.
Changes Reflected in Updated Financial Plan
The Financial Plan was amended to reflect an increase in Agency administrative costs relating to staff
salary increases. There has also been a modification to reflect the loss of approximately $177,000
annually in the Otay Valley Road Project Area as a result of an appeal by Allied Waste Systems
(Allied). However, the Financial Plan now includes anticipated payments by Allied of $180,000
annually pursuant to current negotiations with Allied.
The Financial Plan was also amended to reflect the anticipated property tax exemption by Scripps
Health and the associated In-Lieu Tax Payments due from Scripps Health pursuant to an Owner
Participation Agreement dated October, 1997.
Redevelopment Plan Constraints
The Financial Plan was developed in accordance with the limitations contained in the Redevelopment
Plans. The Plan adoption dates, amendments and financial limitations are described in the charts
below.
CHULA VISTA REDEVELOPMENT PROJECTS
ADOPTION AND AMENDMENT DATES
Town Centre II
Date
7/16/74
7/5/79
4/22/86
11/8/94
6/23/98
7/6/76
7/5/79
4/22/86
11/8/94
6/23/98
8/15/78
5/87
7/19/88
11/8/94
Pumose
Plan Adoption
Merge with Town Centre I
Financial Limits
AB 1290 Limits
Add Territory/Amend Limits
Plan Adoption
Merge with Bayfront
Financial Limits
AB 1290 Limits
Extend Limits
Plan Adoption
Add Tax Increment Provisions
Add Territory
AB 1290 Limits
Proiect Area
Bayfront
Town Centre I
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()
Southwest
12/20/83
11/8/94
11/27/90
11/8/94
Plan Adoption
AB 1290 Limits
Plan Adoption
AB 1290 Limits
Otay Valley Road
CHULA VISTA REDEVELOPMENT AGENCY
PLAN LIMITATIONS
Maximum Maximum Last Date Plan Last Date to
Project Tax Increment Bonded to Incur Expiration Collect Tax
Area Revenues Indebtedness Debt Date Increment
Bayfront/TC I
Original Area $210,000,000 $50,000,000 1/1/2004 7116/2014 7/16/2024
Amendment Area N/A (1) combined 7/2018 7/2033 7/2043
Town Centre 11-
Original Area: $100,000,000 $42,500,000 111/2004 8115/2018 8115/2028
Amendment l\rea: combined combined 7/19/2008 7/19/2028 7119/2038
Olay Valley Road $115,000,000 $45,000,000 111/2004 12/20/2023 12/20/2033
Southwest $15,000,000 $150,000,000 11/27/2010 11/27/2030 11/27/2040
annually
(1) Not required for plans adopted after 1994,
Existing Debt Structure
Each Project Area has certain liens on its tax increment revenues, Such liens were taken into account
in the process of developing the Financial Plan, These liens are detailed below,
Bayfront Project Area
. Housing Set Aside Requirement. Each project area has an obligation to deposit 20 % of tax
increment revenues into the Agency's low and moderate income housing fund,
. Pass-through Agreements, The Agency is currently subject to a statutory "pass-through" of a
portion of tax increment generated in the Bayfront Project Area beginning in Fiscal Year 2000/01
with respect to both the Original Project Area and the recently added Amendment Area,
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o
. Bonded Indebtedness. The Bayfront Project Area has the following outstanding bond issues:
. $14,810,0001994 Senior Tax Allocation Refunding Bonds, Series A
. $8,195,000 1994 Subordinate Tax Allocation Refunding Bonds, Series C
. $5,680,000 1994 Senior Tax Allocation Refunding Bonds, Series D
All three series of bonds are secured by Tax Revenues of the Bayfront/Town Centre Project. Tax
Revenues are equal to Tax Increment Revenues less the 20 % Housing Set Aside requirement.
However, a portion of the debt service can be paid from the 20 % Housing Set Aside
(approximately $180,000 annually) because a portion of the proceeds of the bonds were used for
low and moderate income housing purposes. Each series of the bonds matures in 2024. The
average interest rate of the Series A Bonds is 7.5 %, the average interest rate of the Series C Bonds
is 8% and the average interest rate of the Series D Bonds is 8.625%.
. Advance from the General Fund. Anticipated outstanding balance as of June 30, 2000 is
$2,119,016.
. Advance from the Sewer Trunk Fund. Anticipated outstanding balance as of June 30, 2000 is
$894,471.
. Development Agreement with BF Goodrich. The proposed development agreement with BF
Goodrich may provide for payment of additional tax increment generated on the North Campus, a
loan of certain amounts to the Agency by the Port District for 10 years and the repayment of such
amounts back to the Port District in the subsequent 10 years.
Town Centre II Project Area
. Housing Set Aside Requirement. Each project area has an obligation to deposit 20 % of tax
increment revenues into the Agency's low and moderate income housing fund.
. Pass-through Agreements. The Agency entered into an agreement with the County to "pass-
through" a portion of tax increment generated in the Town Centre II Project Area beginning in
Fiscal Year 2014/15.
. Reimbursement Obligation. The General Fund abligation to pay lease payments on the 1993
Certificates of Participation (COPs) for the Town Centre II Parking Project has been reimbursed by
the Town Centre II Project Area to the extent of available funds. Unpaid reimbursements have
been accrued as an advance from the General Fund.
. Advance from the General Fund. Anticipated outstanding balance as of June 30, 2000 is
$12,839,165.
. Advance from Bayfront Project Area. Anticipated outstanding balance as of June 30, 2000 is
$3,681,667.
A-7
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()
Otay Valley Road Project Area
. Housing Set Aside Requirement. Each project area has an obligation to deposit 20 % of tax
increment revenues into the Agency's low and moderate income housing fund.
. Advance from Bayfront Project Area. Anticipated outstanding balance as of June 30, 2000 is
$11 ,465,848.
Southwest Project Area
. Housing Set Aside Requirement. Each project area has an obligation to deposit 20% of tax
increment revenues into the Agency's low and moderate income housing fund.
. Pass-through Agreements. The Agency entered into agreements with five taxing agencies to "pass-
through" a portion of tax increment generated in the Southwest Project Area.
. Advance from the General Fund. Anticipated outstanding balance as of June 30, 2000 is $671,144.
. Advance from the Sewer Trunk Fund. Anticipated outstanding balance as of June 30, 2000 is
$1,043,392.
. Advance from Bayfront Project Area. Anticipated outstanding balance as of June 30, 2000 IS
$717,544.
. Advance from Otay Valley Road Project Area. Anticipated outstanding balance as of June 30,
2000 is $300,450.
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Projected Tax Revenues Based on New Development
Tax Revenues for each of the Project Areas were projected using a 2 % inflationary growth factor for
secured assessed value only. In addition, the following schedule of new development was included.
CHULA VISTA REDEVELOPMENT AGENCY
PROJECTED NEW DEVELOPMENT VALUES
Bayfront/Town Centre I
2000/01:
BF Goodrich Consolidation
2001/02:
BF Goodrich Consolidation
BF Goodrich New Plant
3'" & H Project
2002/03 :
BF Goodrich Consolidation
Crystal Bay Land Sale
2003/04:
3'" & H Project
2004/05 :
3" & H Project
Total
Town Centre II
2000/01 :
5 acres adjacent to Walmart
2002/03 :
7 acre corporate yard
Total
Otay Valley Road
2000/01 to 2004/05:
5 % annual increase
for new development
Southwest
2000/01:
Greenwald Development
... . ~
$ (44,000,000)
(14,000,000)
57,000,000
17,045,000
(14,000,000)
44,000,000
20,164,000
5.449.000
$ 71,658,000
$ 3,250,000
25.000.000
$28,250,000
$27,500,000
$ 6,000,000
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Financial Plan
The Financial Plan includes Phase I to be implemented currently and Phase II to be implemented in the
future. Phase II of the Financial Plan is discussed in our recommendations.
Phase I
The first and foremost goal of the Financial Plan was to reallocate resources between Project Areas to
the extent available in order to make each Project Area self-sufficient on a going-forward basis and to
repay inter-fund advances to the extent possible. A secondary objective was to provide a way to
insulate the Bayfront Project Area existing indebtedness in the event that the final assessment
methodology chosen for the SDG&E plant causes a reduction in revenue as well as from the loss of
value from the South Campus of BF Goodrich. The Agency can accomplish these goals in large part by
issuing a tax-exempt secured by tax increment revenues of the individual Project Areas, and using the
proceeds to satisfy the inter-fund loans. Accomplishing this part of the Financial Plan does not require
a merger of the Project Areas. The remaining goal of the Financial Plan is to provide project funding
and to repay the General Fund. Certain project funds can be obtained now, while new development is
needed to raise any significant funding in future years. Further, a project merger under Phase II of the
Financial Plan would be required in order to repay in full the General Fund advance to Town Centre II.
The repayment program outlined herein would have the Agency issue $14,005,000 in tax-exempt
bonds. The tax-exempt Bonds would be allocated between the Project Areas as follows: $5,035,000 to
Town Centre II; $6,305,000 to Otay Valley Road; and $2,655,000 to Southwest. The net proceeds of
the Bonds would be $12,071,197 after paying costs, funding certain capitalized interest and funding a
reserve fund.
Par Amount Net Proceeds
Southwest $ 2,655,000 $ 2,302,396
Town Centre II 5,035,000 4,404,281
Otay Valley Road 6,305,000 5 .364,520
$ 14,800,000 $ 12,071,197
PROPOSED USES OF FUNDS
Southwest Town Centre II Olav Vallev Road Bavfront
Repay Bayfront $ 333,985 $3,681,667 $5,364,520
Repay General Fund 610,960
Repay Sewer Fund 1,043,392 $ 894,471
Projects 925,019 111,654 8,485,701
Costs 103,825 146,525 165,575
Capitalized Interest 38,809 69,864 285,015
Reserve 209,970 414,330 489,890
$2,655,000 $5,035,000 $6,305,000 $9,380,172
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C)
Debt Service on each Project Area's bonds was limited to an amount which would provide a coverage
ratio of revenues to debt service between 1.45x and 1. 75x, resulting in an investment grade rating for
the bonds, while leaving adequate annual surplus to pay administrative costs in each Project Area.
Southwest Project Area:
The proceeds from the Bonds allocated to the Southwest Project Area would be applied as follows:
Repay Sewer Fund
Repay Bayfront Praject
Project Funds
$ 1,043,392
333,985
925.019
$2,302,396
The Southwest Project Area $671,144 General Fund advance and $300.450 loan from Otay Valley
Road Project would be repaid over time. The tax increment revenues from the Southwest Project
would be allocated to pay expenses as shown in Table No.1.
Town Centre II Project Area:
The proceeds from the Bonds allocated to the Town Centre II Project Area would be applied as follows:
Repay Bayfront Project
Repay General Fund
Project Funds
$3,681,667
610,960
111.654
$4,404.281
The remaining Town Centre II Project Area $12,228,205 General Fund advance would be repaid over
time. The tax increment revenues from the Town Centre II Project would be allocated to pay expenses
as shown in Table No.2.
Otay Valley Road Project Area:
The proceeds from the Bonds allocated to the Otay Valley Road Project Area would be applied as
follows:
Repay Bayfront Project
$5.365,520
The balance of the Bayfront Project advance to the Otay Valley Road Project would be $6,101,328
after this transaction and would be repaid over time. The Financial Plan reflects all remaining tax
increment in the Otay Valley Road Project Area being used for such repayment for an extended period
of time. The tax increment revenues from the Otay Valley Road Project would be allocated to pay
expenses as shown in Table No.3.
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o
Bayfront Project:
The Bayfront Project will be repaid a total of $9,380,172 with proceeds of the Bonds. The Agency
must trace the expenditure of the Bonds through to their final disposition to maintain the tax-exempt
status of the Bonds. Therefore, these repayments are allocated to the following purposes:
Repay Sewer Fund
Project Fund
$ 894,471
8.485,701
$9,380,172
The tax increment revenues from the Bayfront Project would be allocated to pay expenses as shown in
Table No.4.
Interfund Advances:
Interfund advances before and after the transactions described herein are shown below.
INTERFUND ADVANCES
ADVANCES FROM
I
GENERAL SEWER BA YFRONT OTA Y v ALLEY TOTAL
671,144 1.043.392 717.544 300.450 2.732.530
11.465.848 11,465.848
12.839.165 3,681.667 16.520.832
2,119,016 894,471 3,013,487
15,629,325 1,937,863 15,865.059 300,450 33,732,697
(610,960) (1,937,863) (9,380,172) (11,928,995)
15,018,365 6,484,887 300.450 21,803,702
SOUTHWEST
OTAY VALLEY ROAD
TOWN CENTRE 11
BAYFRONT
REPAYMENT PLAN
REMAINING
REMAINING ADVANCES - BY PROJECT AREA
GENERAL SEWER BAYFRONT OTA Y v ALLEY TOTAL
SOUTHWEST 671,144 383,559 300,450 1,355,153
TOWN CENTRE 11 12,228,205 12,228,205
BAYFRONT 2,119,016 2,119,016
OT A Y v ALLEY ROAD 6,101,328 6,101,328
15,018,365 6,484,887 300,450 21,803,702
Repayment of the General Fund Advance and the Otay Valley Road Advance to Southwest should be
deferred a8 long as possible, because the Southwest Project will have very little surplus tax increment
unless new development occurs. It i8 recommended that any surplus be devoted to project C08t8.
The General Fund Advance to Town Centre II is largely a result of an agreement with the Agency to
reimbur8e the General Fund for debt 8ervice on General Fund Certificates of Participation iS8ued for
Page 9
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e
parking facilities in Town Centre II. These amounts have continued ta accrue as a liability to the
General Fund. In the past and at the present time, the Town Centre II Project does not have the
resources to repay these amounts. Repayment of the General Fund Advance to Town Centre II is likely
to be accomplished only as a result of a merger of the Town Centre II Project with the Bayfront
Project. If the current outstanding loan balance of $12.2 million is added to the annual COP payment
from next fiscal year to maturity of the COP's in 2013/14, the total projected advance to the Town
Centre II Project from the General Fund would be approximately $26 million before any accrued
interest. Table No.2 shows surplus tax increment being generated over the next 30 years of only $11.5
million, based on $28 million in new development in the Project Area and the Scripps payments. The
conclusion is that these amounts can only be repaid in full by merging with the Bayfront Project and
using the combined surplus to repay the General Fund. A merger for this purpose will also partially
resolve the issue of how to capture the surplus tax increment in the Original Bayfront Project Area after
the time to incur debt has expired in 2004. If the Crystal Bay development occurs as projected, the
Bayfront Project Area will have several million dollars in tax increment annually that will be in excess
of its debt requirements. Merging the project areas and utilizing the Bayfront Project surplus tax
increment to repay the General Fund is a good method for capturing all of the Bayfront tax increment
after the Project Area can no longer incur debt.
Repayment of the remaining Bayfront Advance to the Otay Valley Road Project will come at the
expense of funding additional economic development programs in the Project Area. On a stand-alone
basis, the Otay Valley Road Project can repay the balance due, with accrued interest, by fiscal year
2022/23. This assumes that there is anly a slight amount of new development ($27 million over 5
years). Any additional development will accelerate the repayment schedule. Also, it seems that if the
Bayfront Crystal Bay development really takes off, there will be sufficient tax increment in Bayfront
and Bayfront won't really need to utilize the repayment of the Otay Valley loan during the foreseeable
future. If the Otay Valley Road project is merged along with the Town Centre II Project, it is
reasonable to assume that Bayfront can forgive the balance of the loan (since all funds can be
commingled after payment of debt service from the merged project area to repay any other obligation).
Table No.5 depicts the result of a project merger and the amount available to repay the General Fund
advances. It also shows the combined surplus available to pledge to other obligations, which could be
used to raise new project funding in any of the constituent project areas.
Administrative Costs:
Administrative costs are allocated to each Project Area using the Agency's existing methodology.
Housing Set-Aside:
The housing set-aside requirement is a requirement to set aside 20% of all the Agency's tax increment
in the housing fund. Traditionally, agencies satisfy this requirement by setting aside 20% of the tax
increment from each project in the housing fund. However, Section 33334.3(i) of the Health & Safety
Code allows agencies with multiple project areas to fund the total housing set-aside dollar requirement
from any project area they choose, so long as the total deposit to the housing fund equals 20% of all tax
increment receipts of the agency. In effect, the Agency could fund all of its housing requirement from
one project area, thus freeing up funds in other project areas for economic development.
Page 10
/-J~/3
...
o
The Financial Plan incorporates this strategy. Specifically, it assumes that the Town Centre II Project
Area will pay a portion of the housing set-aside requirement generated by the Bayfront Project and the
Southwest Project. This strategy does not require any interfund project loans. Further, the Agency can
implement this strategy on a year-by-year basis, based on changing financial circumstances of the
project areas.
Payments from Landrill:
The Financial Plan incorporates the receipt of approximately $180,000 each year from Allied in the
form of an in-lieu tax payment. In most years, these funds will be used by the Otay Valley Road
Project Area to repay the interfund loan from the Bayfront Project Area. Pursuant to the Financial
Plan, the Bayfront Project Area will utilize such funds to pay a portion of its expenses. If the Agency
issues the debt outlined in the Financial Plan, and subsequently is unable to negotiate for these in-lieu
taxes, the effect would be an inability by the Bayfront Project Area to reimburse the General Fund for a
portion of its administrative costs.
The Agency could choose to avoid this risk entirely by reducing the debt service burden of the Otay
Valley Road Project Area, ensuring that there will always be sufficient revenues to make the required
payment to the Bayfront Project Area. This would result in a loss of net bond proceeds to the Agency
of $2.34 million. If the Agency decides to maximize its bonding capacity now and is subsequently
unable to negotiate for the in-lieu tax payment, the Agency can expect that the Bayfront Project Area
will have a revenue shortfall of $3.4 million over the next 20 year period, which has a present value of
$\.65 million. This risk can be minimized by potential future development, and in particular, the
development of the 7-acre corporate yard in the Town Centre II Project Area. If the corporate yard
develops with a $25 million project, the Agency would net approximately $200,000 each year. This
would make up for the loss of the landfill payment. Therefore, if the Agency chooses to issue bonds as
outlined in the Financial Plant, and is later unsuccessful in negotiating its agreement with Allied, the
Agency can focus its efforts on developing the corporate yard site to mitigate any cashflow problem.
Payments from Scripps:
The Financial Plan incorporates the receipt of in-lieu tax payments from Scripps Health pursuant to an
Owner Participation Agreement. These guaranteed payments are to be made by Scripps regardless of
actual development.
A-Jf
Page 11
... ..,.
o
Summary for Fiscal Year 200112002:
The following table illustrates how the reallocation of funds results in each Project Area being self-
sufficient.
CHULA VISTA REDEVELOPMENT AGENCY
ESTIMATED SOURCES AND USES OF FUNDS FOR 2001102
BayCront and Town Valley
Town Centre Centre II Road Southwest Total
Tax Increment $3,826,000 $1,030,000 $1,039,000 $1,019,000 $ 6,914,000
Housing Set-Aside (765,200) (206,000) (207,800) (203,800) (1,382,800)
Housing Set-Aside Adjustment 149,000 (352,800) 203,800
HSA Debt Service 211,550 211,550
Pass-through Agreements (406,000) (406,000)
Payments from Scripps 85,000 85,000
Payments from Landfill 180,000 180,000
County Admin Charges (43,000) (15,000) (10,000) (12,000) (80,000)
Interest Earnings 192,000 46,000 50,000 19,000 307,000
Net Revenues 3,570,350 587,200 1,051,200 620,000 5,828,750
Bond Debt Service (2,555,965) (415,000) (460,000) (180,000) (3,610,965)
Interfund Advance Repayment 321,000 (321,000)
Par! PaymentsfBFG Payments (12,000) (12,000)
Net Available for City Admin
Loan Obligations and COPs 1,323,385 172,200 270,200 440,000 2,205,785
City Admin Reimbursement (1,335,900) (166,900) (265,700) (403,800) (2,172,300)
Remaining Revenue $ (12,515) $ 5,300 $ 4,500 $ 36,200 $ 33,485
A-/5
Page 12
1r
e
Recommendations
Phase I
Implement Phase I of the Financial Plan through the issuance of tax-exempt bonds. The bonds should
contain an optional redemption feature allowing the Agency to restructure its debt on a tax-exempt basis
prior to January 1, 2004. This will provide the Agency maximum flexibility as the time limit on
incurring debt approaches.
Phase II
Proiect Merger
After achieving self-sufficiency on a going-forward basis under Phase I, the Agency should consider a
merger of the Project Areas. In the long run, a project merger will probably serve the Agency's
interests in that it will provide a means to (1) repay in full the General Fund advance to the Town
Centre II Project; (2) potentially allow forgiveness/repayment of the remaining inter-project advance
from Bayfront to Otay Valley Road; and (3) if the Crystal Bay develops, allow the significant surplus
tax increment in Bayfront to be commingled and used to fund project costs in the other three
redevelopment project areas, which currently have no additional capacity to raise funds barring future
development.
An additional benefit to the merger is protection for the outstanding in the Bayfront Project Area in the
event that the limitation on tax increment ($210 million) is reached prior to the final maturity of the
outstanding bonds. This is possible if the Crystal Bay development exceeds expectations and if there is
significant development on the south campus of BF Goodrich. Further, if the Bayfront develops as
planned, the diversity of the development will help to lessen the existing concentration of the tax base in
BF Goodrich, making for a stronger overall credit rating and increased bonding capacity.
While there is significant upside potential to a project merger if the Crystal Bay develops, there is
potential downside to including the Bayfront Project in a merger. First, if, as part of the Crystal Bay
development, the Agency ends up sharing the tax increment with the developer, overall financial
benefits of a merger to the other projects will be reduced. Second, the proposed plan with BF
Goodrich would have the Agency subordinate its payments under the agreement to the payment of the
outstanding tax allocation bonds. However, this is only a benefit to the merger if the Agency can
obtain a subordination clause relating to a refinancing of the existing bonds, future bonds of the
Bayfront Project and/or future bonds of the any merged project. This may not be feasible. If the
Crystal Bay development accurs, that would offset (from a bonding capacity view) the negative impact
of not obtaining a subordination clause. Again, everything hinges on new development. Finally, the
impact of the SDG&E assessment has not been taken into account. Depending on the outcome, the
Bayfront Project Area may see a reduction in tax increment, although this appears unlikely given recent
developments.
A-/0
Page 13
... ..,
()
Since there are several unresolved issues relating to the Bayfront Project Area, the positive impact of a
project merger cannot be projected with any great certainty at this time. It may be a winner, loser or
have no impact depending on the outcome of the Crystal Bay and BF Goodrich negotiations and the
SDG&E assessment. If there is a negative financial outcome of these three variables, the Agency may
choose to leave Bayfront out of the merger. As the outcome of each item becomes more certain, the
Agency will be in a better position to judge the financial impacts. However, consideration needs to be
given to the approaching time limitation on incurring indebtedness. Therefore, our recommendation is
to allow more time for the financial impact of the items discussed to be determined with greater
certainty, with the goal of making the decision by January 1,2003, one year prior to the last date to
incur debt in the Bayfront, Town Centre II and Otay Valley Road Projects.
Page 14
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APPENDIX A
BOND PROCEEDS FLOW OF FUNDS
A~,;23
T " "'i - - -
(9)
CHULA VISTA REDEVELOPMENT AGENCY
FLOW OF FUNDS
USE OF BOND PROCEEDS TO REPAY INTERFUND ADVANCES
BOND
PROCEEDS
$12,071,197
ALLOCATED
TO TOWN
CENTRE 11
ALLOCATED
TO SOUTHWEST
T
REPAY
GENERAL
FUND
$610.960
PROJECT
FUNDS
$111.654
REPAY
BA YFRONT
53.681.667
REPAY
SEWER
FUND
SUI4J.3'J2
PROJECT
FUNDS
$925.019
REPAY
BAYFRQr-;T
$333.985
ALLOCATED
TOOTAY
Y ALLEY ROAD
T
,.
REPAY
BA YFRONT
$5.364.520
USE OF BA YFRONT ADVANCES REPAYMENT
PROJECT
FUNDS
58.485.701
ADY ANCES
REPAID FROM
BOND
PROCEEDS
$9,380,172
REPAY
SEWER
FUND
$894,471
A-~I
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e
SOURCES AND USES OF FUNDS
Redevelopment Agency of the City of Chula Vista
Otay Valley Road Tax Allocation Bonds
Dated Date
Delivery Date
6/1/2000
6/1/2000
Sources:
Bond Proceeds:
Par Amount
6,305,000.00
6,305,000.00
Uses:
Other Fund Deposits:
Reserve Fund
Capitalized Interest Fund
489,890.00
285,014.49
774,904.49
Delivery Date Expenses:
Cost of Issuance
Underwriter's Discount
71,000.00
94,575.00
165,575.00
Other Uses of Funds:
Repay Bayfront Project
5,364,520.51
6,305,000.00
April 27,2000 Prepared by Rod Guno Associates, Inc. Seal Beach, CA ~ _ (
...
BOND DEBT SERVICE
Redevelopment Agency of the City of ChuIa Vista
Otay Valley Road Tax Allocation Bonds
Period
Ending Principal Coupon Interest Debt Service
9/1/2000 99,556.25 99,556.25
9/1/2001 398,225.00 398,225.00
9/1/2002 60,000 4.90% 398,225.00 458,225.00
9/1/2003 90,000 5.05% 395,285.00 485,285.00
9/1/2004 95,000 5.20% 390,740.00 485,740.00
9/1/2005 100,000 5.30% 385,800.00 485,800.00
9/1/2006 105,000 5.40% 380,500.00 485,500.00
9/1/2007 115,000 5.50% 374,830.00 489,830.00
9/1/2008 120,000 5.60% 368,505.00 488,505.00
9/1/2009 125,000 5.70% 361,785.00 486,785.00
9/1/2010 135,000 5.80% 354,660.00 489,660.00
9/1/2011 140,000 5.90% 346,830.00 486,830.00
9/1/2012 150,000 6.00% 338,570.00 488,570.00
9/1/2013 160,000 6.10% 329,570.00 489,570.00
9/1/2014 165,000 6.20% 319,810.00 484,810.00
9/1/2015 180,000 6.40% 309,580.00 489,580.00
9/1/2016 190,000 6.40% 298,060.00 488,060.00
9/1/2017 200,000 6.40% 285,900.00 485,900.00
9/1/2018 215,000 6.40% 273,100.00 488,100.00
9/1/2019 230,000 6.40% 259,340.00 489,340.00
9/1/2020 245,000 6.40% 244,620.00 489,620.00
9/1/2021 260,000 6.40% 228,940.00 488,940.00
9/1/2022 275,000 6.40% 212,300.00 487,300.00
9/1/2023 290,000 6.60% 194,700.00 484,700.00
9/1/2024 310,000 6.60% 175,560.00 485,560.00
9/1/2025 330,000 6.60% 155,100.00 485,100.00
9/1/2026 355,000 6.60% 133,320.00 488,320.00
9/1/2027 380,000 6.60% 109,890.00 489,890.00
9/1/2028 400,000 6.60% 84,810.00 484,810.00
9/1/2029 430,000 6.60% 58,410.00 488,410.00
9/1/2030 455,000 6.60% 30,030.00 485,030.00
6,305,000 8,296,551.25 14,601,551.25
April 27, 2000 Prepared by Rod Gunn Associates, Inc. Seal Beach, CA
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SOURCES AND USES OF FUNDS
Redevelopment Agency of the City of Chuta Vista
Southwest Tax Allocation Bonds
Dated Date
Delivery Date
6/1 /2000
6/1 /2000
Sources:
Bond Proceeds:
Par Amount
2,655,000.00
2,655,000.00
Uses:
Other Fund Deposits:
Reserve Fund
Capitalized Interest Fund
209,970.00
38,809.01
248,779.01
Delivery Date Expenses:
Cost of Issuance
Underwriter's Discount
64,000.00
39,825.00
103,825.00
Other Uses of Funds:
Repay Bayfront Project
Repay Sewer Fund
Repay TC " Project
Project Fund
333,984.99
1,043,392.00
300,000.00
625,019.00
2,302,395.99
2,655,000.00
April 27,2000 Prepared by Rod Gunn Associates. Inc. Seal Beach, CA
/.3 -3
,.. .
BOND DEBT SERVICE
Redevelopment Agency of the City of Chula Vista
Southwest Tax Allocation Bonds
Period
Ending Principal Coupon Interest Debt Service
9/1/2000 41,918.75 41,918.75
9/1/2001 10,000 4.80% 167,675.00 177 ,675.00
9/1/2002 10,000 4.90% 167,195.00 177,195.00
9/1/2003 30,000 5.05% 166,705.00 196,705.00
9/1/2004 40,000 5.20% 165,190.00 205,190.00
9/1/2005 45,000 5.30% 163,110.00 208,110.00
9/1/2006 45,000 5.40% 160,725.00 205,725.00
9/1/2007 50,000 5.50% 158,295.00 208,295.00
9/1/2008 50,000 5.60% 155,545.00 205,545.00
9/1/2009 55,000 5.70% 152,745.00 207,745.00
9/1/2010 60,000 5.80% 149,610.00 209,610.00
9/1/2011 60,000 5.90% 146,130.00 206,130.00
9/1/2012 65,000 6.00% 142,590.00 207,590.00
9/1/2013 70,000 6.10% 138,690.00 208,690.00
9/1/2014 75,000 6.20% 134,420.00 209,420.00
9/1/2015 75,000 6.40% 129,770.00 204,770.00
9/1/2016 85,000 6.40% 124,970.00 209,970.00
9/1/2017 90,000 6.40% 119,530.00 209,530.00
9/1/2018 95,000 6.40% 113,770.00 208,770.00
9/1/2019 100,000 6.40% 107,690.00 207 ,690.00
9/1/2020 105,000 6.40% 101,290.00 206,290.00
9/1/2021 115,000 6.40% 94,570.00 209,570.00
9/1/2022 120,000 6.40% 87,210.00 207,210.00
9/1/2023 120,000 6.60% 79,530.00 199,530.00
9/1/2024 125,000 6.60% 71,610.00 196,610.00
9/1/2025 135,000 6.60% 63,360.00 198,360.00
9/1/2026 145,000 6.60% 54,450.00 199,450.00
9/1/2027 155,000 6.60% 44,880.00 199,880.00
9/1/2028 165,000 6.60% 34,650.00 199,650.00
9/1/2029 175,000 6.60% 23,760.00 198,760.00
9/1/2030 185,000 6.60% 12,210.00 197,210.00
2,655,000 3,473,793.75 6,128,793.75
April 27, 2000 Prepared by Rod Gunn Associates, Inc. Seal Beach, CA
,'t3 - 1
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SOURCES AND USES OF FUNDS
Redevelopment Agency of the City of Chula Vista
Town Centre II Tax Allocation Bonds
Dated Date
Delivery Date
6/1/2000
6/1 /2000
Sources:
Bond Proceeds:
Par Amount
5,035,000.00
5,035,000.00
Uses:
Other Fund Deposits:
Reserve Fund
Capitalized Interest Fund
414,330.00
69,864.16
484,194.16
Delivery Date Expenses:
Cost of Issuance
Underwriter's Discount
71,000.00
75,525.00
146,525.00
Other Uses of Funds:
Repay Bayfront Project
Repay General Fund
Project Fund
3,681,667.00
610,960.00
111,653.84
4,404,280.84
5,035,000.00
Apri127,2000 Prepared by Rod Gunn Associates, Inc. Seal Beach, CA
,/.3-.:)
... ..,.
BOND DEBT SERVICE
Redevelopment Agency of the City of ChuIa Vista
Town Centre II Tax Allocation Bonds
Period
Ending Principal Coupon Interest Debt Service
9/1/2000 77,522.50 77,522.50
9/1/2001 85,000 4.80% 310,090.00 395,090.00
9/1/2002 105,000 4.90% 306,010.00 411,010.00
9/1/2003 110,000 5.05% 300,865.00 410,865.00
9/1/2004 115,000 5.20% 295,310.00 410,310.00
9/1/2005 125,000 5.30% 289,330.00 414,330.00
9/1/2006 130,000 5.40% 282,705.00 412,705.00
9/1/2007 135,000 5.50% 275,685.00 410,685.00
9/1/2008 145,000 5.60% 268,260.00 413,260.00
9/1/2009 150,000 5.70% 260,140.00 410,140.00
9/1/2010 160,000 5.80% 251,590.00 411,590.00
9/1/2011 170,000 5.90% 242,310.00 412,310.00
9/1/2012 180,000 6.00% 232,280.00 412,280.00
9/1/2013 190,000 6.10% 221,480.00 411,480.00
9/1/2014 200,000 6.20% 209,890.00 409,890.00
9/1/2015 140,000 6.40% 197,490.00 337,490.00
9/1/2016 150,000 6.40% 188,530.00 338,530.00
9/1/2017 160,000 6.40% 178,930.00 338,930.00
9/1/2018 170,000 6.40% 168,690.00 338,690.00
9/1/2019 180,000 6.40% 157,810.00 337,810.00
9/1/2020 190,000 6.40% 146,290.00 336,290.00
9/1/2021 205,000 6.40% 134,130.00 339,130.00
9/1/2022 215,000 6.40% 121,010.00 336,010.00
9/1/2023 230,000 6.60% 107,250.00 337,250.00
9/1 /2024 245,000 6.60% 92,070.00 337,070.00
9/1/2025 260,000 6.60% 75,900.00 335,900.00
9/1/2026 280,000 6.60% 58,740.00 338,740.00
9/1/2027 295,000 6.60% 40,260.00 335,260.00
9/1/2028 315,000 6.60% 20,790.00 335,790.00
5,035,000 5,511,357.50 10,546,357.50
April 27, 2000 Prepared by Rod Gunn Associates, Inc. Seal Beach, CA
l3~ro
.,. ..,.
AGREEMENT BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
AND
ROD GUNN ASSOCIATES, INC.
For Financial ConsultinQ Services
This agreement ("Agreement"), is entered into effective as of April 18, 2000 by and between the
Redevelapment Agency of the City of Chula Vista ("Agency") and Rod Gunn Associates, Inc., a California
Corporation ("Consultant"), and is made with reference to the following facts:
RECITALS
Whereas, the Agency has determined ta issue tax allacation bonds far the purpase af refinancing
certain of its existing loans and far the financing af new redevelopment activities (the "Financing"); and,
Whereas, the Agency requires assistance from a financing consultant in the development of a sound
and practical financing plan to implement the financing by taking inta cansideratian, program requirements,
sources of capital funds, cash flow requirements, annual casts, the allacatian of thase costs, statutary
requirements and restrictions; and,
Whereas, Consultant represents it is a qualified to perform the services under this contract and;
Whereas, the Agency, at a regular meeting held an April 18, 2000, waived the cansultant selection
process as impractical based on Consultant's unique qualifications to perform the services required
hereunder; and authorized the Chairman to enter into this Agreement.
NOW, THEREFORE, that the Agency and Cansultant da hereby mutually agree as follows:
1. CONSULTANT'S DUTIES
A. General Duties
Consultant shall perform all of the services described on the attached ExhibitA, Paragraph 7, entitled
"General Duties".
B. 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 af Wark 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 Agency 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 Agency, operate to terminate this Agreement.
C. Reductions in Scope of Work
Agency 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, Agency and
Rod Gunn Associates, Inc. Financial Consulting Services Agreement
. Page 1
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[Revised 4/26/2000]
.,. .,.
Consultant agree to meet in good faith and confer for the purpose of negotiating a corresponding
reduction in the campensation associated with said reductian.
D. Additional Services
In addition to performing the Defined Services herein set forth, Agency may require Consultant to
perfarm additional consulting services related to the Defined Services ("Additianal Services"), and
upon doing sa in writing, if they are within the scape of services offered by Consultant, Consultant
shall perform same on a time and materials basis at the rates set farth in the "Rate Schedule" in
Exhibit A, Paragraph 11, unless a separate fixed fee is otherwise agreed upon. All compensation for
Additianal Services 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 cansistent with that level of care and skill ordinarily exercised by
members af the profession currently practicing under similar conditians and in similar locations.
F. Insurance
Cansultant represents that it and its agents, staff and subcansultants employed by it in connection
with the Services required to be rendered, are protected against the risk of loss by the fallowing
insurance coverages, in the fallawing categories, and ta the limits specified, policies af which are
issued by Insurance Companies that have a Best's Rating af "A, Class V" or better, and shall
otherwise meet with the approval af the Agency:
Statutory Worker's Compensation 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 ta each project
away fram premises owned or rented by Cansultant, which names Agency as an Additional Insured,
and which is primary ta any policy which the Agency may otherwise carry ("Primary 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 Liability policy.
As required by the Agency, all insurers shall waive the right of subrogation against Agency and its
elected officials, officers, employees agency and representatives.
G. Proof of Insurance Coveraoe.
(1) Certificates of Insurance.
Consultant shall demonstrate proof af coverage herein required, prior to the cammencement of
services required under this Agreement, by delivery of Certificates af 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 Required.
In order ta demonstrate the Additianal Insured Coverage, Primary Coverage required under
Consultant's Commercial General Liability Insurance Policy, Consultant shall deliver a policy
Rod Gunn Associates, Inc. Financial Consulting Services Agreement
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[Revised 4/26/2000]
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endorsement to the Agency 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 1 g, 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 Band"), then Consultant shall provide to the Agency a
performance band by a surety and in a farm and amount satisfactory to the Risk Manager ar City
Attorney which amount is indicated in the space adjacent to the term, "Performance Bond", in said
Paragraph 19, Exhibit A.
(2) Letter af Credit
In the event that Exhibit A, at Paragraph 19, indicates the need far Cansultant 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 Agency an
irrevocable letter of credit callable by the Agency 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 af credit shall be issued by a bank, and be in a farm and amount
satisfactory to the Risk Manager or City Attorney which amaunt is indicated in the space adjacent
to the term, "Letter af Credif', 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
ather than a Performance Bond or a Letter of Credit (indicated by a check mark in the
parenthetical space immediately preceding the subparagraph entitled "Other Security"), then
Consultant shall provide to the Agency such other security therein listed in a form and amount
satisfactory ta the Risk Manager or City Attarney.
I. Business License
Consultant agrees to obtain a business license from the Agency and ta otherwise camply with Title 5
of the Chula Vista Municipal Cade.
2. DUTIES OF THE AGENCY
A. Consultation and Cooperation
Agency shall regularly cansult the Consultant far the purpose of reviewing the progress af the Defined
Services and Schedule therein contained, and to provide direction and guidance to achieve the
abjectives of this agreement. The Agency shall permit access ta its affice facilities, files and records
by Cansultant thraughout the term of the agreement. In addition thereto, Agency 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 ta
proceed, shall constitute a basis for the justifiable delay in the Consultant's performance af this
agreement.
Rod Gunn Associates, Inc. Financial Consulting Services Agreement
. Page 3
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[Revised 4/26/2000]
.,. .,.
B. Compensatian
Upon receipt af a properly prepared billing from Cansultant submitted to the Agency 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, Agency shall compensate Consultant for all services
rendered by Consultant according to the terms and conditians set forth in Exhibit A, Paragraph 11,
adjacent to the gaverning compensation relationship indicated by a "checkmark" next to the
appropriate arrangement, subject ta the requirements for retention set forth in paragraph 19 of Exhibit
A, and shall campensate Consultant for out af pocket expenses as provided in Exhibit A, Paragraph
12.
All billings submitted by Consultant shall contain sufficient information as to the propriety afthe billing
to permit the Agency to evaluate that the amaunt due and payable thereunder is proper, and shall
specifically contain the Agency's accaunt number indicated on Exhibit A, Paragraph 18 (C) ta be
charged upon making such payment.
3. ADMINISTRATION OF CONTRACT
Each party designates the individuals ("Contract Administrators") ifldicated on ExhibitA, Paragraph 13, as
said party's contract administratar 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 provisians 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 bath parties that time is of the essence in the campletion of this Agreement. It is
difficult to estimate the amaunt of damages resulting from delay in perfarmance. The parties have used
their judgment ta arrive at a reasonable amount to campen sate far delay.
Failure to complete the Defined Services within the allotted time peri ad specified in this Agreement shall
result in the following penalty: Far each cansecutive calendar day in excess of the time specified for the
completion af the respective work assignment or Deliverable, the consultant shall pay to the Agency, or
have withheld fram monies due, the sum of Liquidated Damages Rate pravided in ExhibitA, Paragraph 14
("Liquidated Damages Rate").
Time extensions for delays beyond the consultant's cantrol, other than delays caused by the Agency, shall
be requested in writing to the Agency's Cantract Administrator, ar designee, priar ta the expiration af the
specified time. Extensians of time, when granted, will be based upon the effect of delays ta the work and
will not be granted far 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 Desionated 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 confiict of interest and disclosure
provisions, and shall repart ecanomic interests to the City Clerk on the required Statement of
Rod Gunn Associates, Inc. Financial Consulting Services Agreement
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[Revised 4/26/2000]
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Economic Interests in such reparting categories as are specified in Paragraph 15 of Exhibit A, ar if
nane 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 nat make, or
participate in making or in any way attempt to use Consuitant'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 pramised by this Agreement.
C. Search to Determine Economic Interests
Regardless of 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 term is used in the regulations promulgated by the Fair Palitical Practices
Commission, and has determined that Cansultant daes not, ta the best af Consultant's knowledge,
have an econamic interest which wauld canflict with Consultant's duties under this agreement.
D. Promise Not to Acquire Conflictinq interests
Regardless af whether Consultant is designated as an FPPC Filer, Cansultant further warrants and
represents that Consultant will not acquire, obtain, ar assume an economic interest during the term af
this Agreement which would canstitute a canflict of interest as prahibited by the Fair Political Practices
Act.
E. Dutv to Advise of Conflictinq Interests
Regardless of whether Consultant is designated as an FPPC Filer, Cansultant further warrants and
represents that Consultant will immediately advise the City Attorney af Agency if Cansultant learns of
an economic interest of Consultant's which may result in a conflict of interest far the purpose of the
Fair Political Practices Act, and regulations promulgated thereunder.
F. Specific Warranties Aqainst Economic Interests
Consultant warrants and represents that neither Cansultant, nar Consultant's immediate family
members, nor Consultant's emplayees or agents ("Cansultant Assaciates") 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 baundaries of any property
which may be the subject matter of the Defined Services, ("Prohibited Interest"), ather than as listed
in Exhibit A, Paragraph 15.
Consultant further warrants and represents that no promise of future employment, remuneration,
cansideration, gratuity or ather reward ar gain has been made ta Consultant ar Cansultant Associates
in cannection with Consultant's performance of this Agreement. Consultant promises ta advise
Agency 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 af this Agreement, or far 12 months after the expiration of this Agreement, except with the
written permission of Agency.
Rod Gunn Associates, Inc. Financial Consulting Services Agreement
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[Revised 4/26/2000J
.,. .,
Consultant may not conduct or solicit any business for any party to this Agreement, or for any third
party which may be in canfiict with Cansultant's responsibilities under this Agreement, except with the
written permission af Agency.
7. HOLD HARMLESS
Consultant shall defend, indemnify, protect and hold harmless the Agency, its elected and appainted
afficers and emplayees, from and against all claims for damages, liability, cost and expense (including
without limitation attorneys' fees) arising out of the alleged or actual negligent conduct or willful
misconduct af the Consultant, or any agent or employee, subcontractors, or others in cannection with the
executian of the wark covered by this Agreement, except anly for those claims arising from the sole
negligence or sole willful misconduct of the Agency, its officers, or emplayees, including claims arising
from inaccurate or incomplete information provided by the City or third parties upon which the Consultant
reasonably relies. Cansultant's indemnification shall include any and all casts, expenses, attorneys' fees
and liability incurred by the Agency, its afficers, agents, ar emplayees in defending against such claims,
whether the same proceed to judgment or nat. Further, Consultant at its own expense shall, upon written
request by the Agency, defend any such suit or action brought against the Agency, its officers, agents, or
employees. Cansultants' indemnification of Agency shall not be limited by any priar or subsequent
declaration by the Consultant.
8. TERMINATION OF AGREEMENT FOR CAUSE
If, through any cause, Consultant shall fail to fulfill in a timely and proper manner Consultant's obiigations
under this Agreement, ar if Cansultant shall violate any of the covenants, agreements ar stipulations of
this Agreement, Agency shall have the right to terminate this Agreement by giving written notice ta
Consultant of such terminatian and specifying the effective date thereof at least five (5) days before the
effective date of such termination. In that event, all fin;shed or unfinished documents, data, studies,
surveys, drawings, maps, reports and other materials pre~ared by Consultant shall, at the option of the
Agency, become the praperty of the Agency, and Consultant shall be entitled ta receive just and equitable
compensatian for any work satisfactorily completed an such documents and other materials up to the
effective date of Notice of Termination, not to exceed the amaunts payable hereunder, and less any
damages caused Agency by Cansultant's breach.
9. ERRORS AND OMISSIONS
In the event that the Agency Administrator determines that the Cansultants' negiigence, errors, or
omissions in the perfarmance of work under this Agreement has resulted in expense ta Agency greater
than would have resulted ifthere were no such negligence, errors, amissions, Consultant shall reimburse
Agency for any additional expenses incurred by the Agency. Nothing herein is intended to limit Agency's
rights under other provisions af this agreement.
10. TERMINATION OF AGREEMENT FOR CONVENIENCE OF AGENCY
Agency may terminate this Agreement at any time and for any reasan, by giving specific written notice to
Consultant of such termination and specifying the effective date thereaf, at least thirty (30) days before the
effective date of such termination. In that event, all finished and unfinished dacuments and other
materials described hereinabove shall, at the aption afthe Agency, become Agency's sale and exclusive
property. If the Agreement is terminated by Agency as provided in this paragraph, Consultant shall be
entitled to receive just and equitable compensation far any satisfactory work completed an such
documents and other materials to the effective date of such termination. Consultant hereby expressly
waives any and all claims for damages or campensatian arising under this Agreement except as set forth
herein.
Rod Gunn Assaciates, Inc. Financial Consulting Services Agreement
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11. ASSIGNABILITY
The services of Cansultant are persanal ta the Agency, and Consultant shall not assign any interest in this
Agreement, and shall nat transfer any interest in the same (whether by assignment or novation), withaut
prior written consent of Agency. Agency 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, informatian, data, statistics, forms, designs, plans, procedures, systems and any ather
materials ar properties produced under this Agreement shall be the sole and exclusive property af
Agency. 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 Agency. Agency shall have unrestricted authority ta
publish, disclose (except as may be limited by the provisians of the Public Recards Act), distribute, and
otherwise use, copyright ar patent, in whole or in part, any such reports, studies, data, statistics, forms or
other materials or properties produced under this Agreement.
13. INDEPENDENT CONTRACTOR
Agency 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. Agency maintains the right anly ta reject or accept Cansultant's work products. Consultant
and any of the Consultant's agents, employees or representatives are, for all purposes under this
Agreement, an independent contractar and shall not be deemed to be an employee of Agency, and none
of them shail be entitled ta any benefits to which Agency employees are entitled including but nat limited
to, avertime, retirement benefits, worker's campensation benefits, injury leave ar other leave benefits.
Therefore, Agency will not withhold state ar federal incame tax, social security tax or any other payroll tax,
and Consultant shall be solely responsible for the payment of same and shall hald the Agency harmless
with regard thereto.
14. ADMINISTRATIVE CLAIMS REQUIREMENTS AND PROCEDURES
Na suit ar arbitration shall be brought arising out of this agreement, against the Agency unless a claim has
first been presented in writing and filed with the Agency and acted upon by the Agency in accordance with
the procedures set forth in Chapter 1.34 of the Chula Vista Municipal.Cade, as same may from time to
time be amended, the provisions of which are incorporated by this reference as if fully setforth herein, and
such policies and procedures used by the Agency in the implementation af same.
Upon request by Agency, Consultant shall meet and confer in good faith with Agency 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 ta recaver all reasonable costs incurred in the defense of the claim, including costs and
attorney's fees.
16. STATEMENT OF COSTS
In the event that Consultant prepares a report ar dacument, ar participates in the preparation af a repart ar
dacument in performing the Defined Services, Cansultant shall include, ar cause the inclusion of, in said
Rod Gunn Associates, Inc. Financial Consulting Services Agreement
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report or document, a statement of the numbers and cost in dollar amaunts of all contracts and
subcantracts relating to the preparatian af the report or document.
17. MISCELLANEOUS
A. Consultant not authorized ta Represent AQencv
Unless specifically authorized in writing by Agency, Consultant shall have no authority to act as
Agency's agent to bind Agency to any contractual agreements whatsoever.
B. Consultant is Real Estate Broker and/or Salesman
If the box on ExhibitA, Paragraph 16 is marked, the Consultant and/or their principals is/are licensed
with the State of Califarnia ar some ather state as a licensed real estate braker or salespersan.
Otherwise, Cansultant represents that neither Cansultant, nar their principals are licensed real estate
brokers or salespersons.
C. Notices
All notices, demands or requests provided for ar permitted ta be given pursuant ta this Agreement
must be in writing. All notices, demands and requests to be sent ta 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 af business far each of the designated parties.
D. Entire AQreement
This Agreement, tagether with any other written document referred ta or contemplated herein,
embady the entire Agreement and understanding between the parties relating ta 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 signatary and party hereto hereby warrants and represents to the other party that it has legal
autharity and capacity and directian from its principal to enter into this Agreement, and that all
resolutians or other actions have been taken sa as ta enable it to enter into this Agreement.
F. GoverninQ LawNenue
This Agreement shall be governed by and construed in accardance with the laws af the State af
California. Any action arising under or relating to this Agreement shall be brought only in the federal
or state courts located in San Diega Caunty, State af California, and if applicable, the City of Chula
Vista, or as c1ase thereto as possible. Venue for this Agreement, and performance hereunder, shall
be the Redevelopment Agency of the City of Chula Vista.
[END OF PAGE. NEXT PAGE IS SIGNATURE PAGE.]
Rod Gunn Associates, Inc. Financial Consulting Services Agreement
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APR. 27. 2000 12:08PM
ROD GUNN ASSOC
NO.672
P.2/2
SIGNATURE PAGE
TO
AGREEMENT BETWEEN CITY OF CHUU VISTA REDEVELOPMENT AGENCY AND
ROD GUNN ASSOCIATES, INC.
FOR FINANCIAL CONSULTING SERVICES
IN WITNESS WHEREOF, as of the date first wrttten above, 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:
Shirley Horton, Meyor
Susan Bigelow, City Clerk
Approved as to form:
Rod Gunn Associates, Inc.
A Califomia corporation
By. ~~V-
Senior Vice President
Jahn M. Kaheny. Agency Attorney
Exhibit List to Agreement
(Xl Exhibit A.
Rad Gunn Associates. Inc. Financial Consulting Services Agreement
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EXHIBIT A
TO
AGREEMENT BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
AND
ROD GUNN ASSOCIATES, INC.
1. EFFECTIVE DATE OF AGREEMENT:
April1S, 2000
2. AGENCY:
(X) Redevelopment Agency af the City af Chula Vista, a political subdivisian af the State af Califarnia
("Agency")
3. PLACE OF BUSINESS FOR AGENCY:
City of Chula Vista,
Community Develapment Department
276 Fourth Avenue,
Chula Vista, CA 91910
4. CONSULTANT:
ROD GUNN ASSOCIATES, INC.
5. BUSINESS FORM OF CONSULTANT:
( ) Sole Proprietarship
( ) Partnership
(X) Corporation
6. PLACE OF BUSINESS, TELEPHONE AND FAX NUMBER OF CONSULTANT:
Rod Gunn Associates, Inc.
3010 Old Ranch Parkway, Suite 330
Seal Beach, CA 90740-2750
(562) 59S-7677
(562) 431-5446 (FAX)
7. General Duties:
Provide all necessary financial advisor services to cause the issuance of tax allocation bands by the
Agency in accordance with the Agency=s approved Financial Plan.
S. Scope of Work and Schedule:
A Detailed Scope of Work:
Consultant will be responsible for performing the fallowing:
1) Revenue Projections.
Consultant will analyze and project tax increment revenues of the Agency far use in structuring
debt and for presentation in the Official Statement.
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2) Financing Plan.
The review of the Agency will address the annual financial requirements, including payments
under other bonded indebtedness, housing set-aside requirement of the Agency, amounts the
Agency may owe the City, levels of funding required for administratian, etc. The financial analysis
for the Financing will address sizing considerations for any propased bonded debt, the financial
implications, strategies for submitting the financing to the rating agencies and/or bond insurance
companies (this will include a review af the financial implications of different bond ratings and
bond insurance).
3) Band Structure.
Consultant will size the bond issue, structure those terms and conditions which most
advantageously meets demands or current market conditions and the abjectives of the Agency.
4) Document Review.
Consultant will review and comment on all legal documents prepared by bond counsel to ensure
canformance with the proposed financing structure.
5) Timing of Sale.
The Agency will be advised af market movements, trends and developments and
recommendations as to the timing of the sale of the bonds in relation to market canditians will be
made.
6) Official Statement.
Consultant will prepare the preliminary and final Official Statement, the notice of sale and bid form
to be used in connection with the offering of the bonds. The Official Statement will be prepared in
conformance with the adopted guidelines of GFOA.
7) Disclosure Issues.
Consultant will provide technical support in defining disclosure issues necessary to meet GFOA
guidelines, as well as work with the Agency to fulfill its continuing disclosure respansibilities under
Securities and Exchange Commission Rule 15c2-12.
8) Rating and Insurance Agencies.
Consultant will assist in submitting documents, conducting negotiations and attending meetings
with rating agencies and bond insurance companies as may be required. Consultant will also
assist the Agency in preparing far dialogue with the rating analyst.
g) Pricing.
Consultant will coordinate the plans of the bid opening, evaluate the bids submitted, check far
mathematical accuracy, advise the Agency afthe bids and make a recammendation as to award.
Consultant will revise cash flows for final pricing infarmation.
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10) Bond Closing.
The arrangements for closing and delivery of the bonds will be reviewed and coordinated.
Consultant would pay 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 Agency in administration of the financing after bond closing, working closely with the
Finance department and the Agency's auditors.
(a) Date for Commencement of Consultant Services:
(X) Same as Effective Date of Agreement
(b) Deliverables:
Task 1 consists of items 1 - 10
Task 2 consists of item 11
(c) Date for completion of all Consultant services:
June 30, 2000
9. Insurance Requirements:
(X) Statutory Worker's Compensation Insurance
(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 AGENCY TO CONSULTANT:
As described in Section 8 above.
Agency agrees to make available to Consultant, without cost, sufficient copies of the resolutions,
preliminary and final official statements and other relevant material pertaining to the financing, the Agency,
or the bonds, as reasonably may be required from time to time for the prompt and efficient performance by
Consultant of its obligations hereunder.
11. Compensation.
The fee quoted below includes performing all 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 occur,
Consultant shall not be entitled to any compensation hereunder. For Task 1, Consultant proposes to
charge a fixed fee of $20,000 for Financial Consulting Services including preparation of the Official
Statement, cash flow preparation and for the preparation of Tax Increment Projections and related
analysis to be included in the Official Statement for each series of bond issued (3), or a total of $60,000.
There is no charge for Task 2.
Rod Gunn Associates, Inc. Financial Consulting Services Agreement
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12. Materials Reimbursement Arrangement/Agency Costs.
Consultant shall be reimbursed for any and all out-of-pockets expenses reasonably incurred in the
performance of services required under the terms of this Agreement, but said reimbursables are to be
paid from bond proceeds only.
There are several program costs that are required for completion of a financing that shall be the
responsibility of the Agency. These include the cost of issuance of bonds, including the cost of printing
and distributing the official statement, notice of sale or other notices, the securities or other legal
documents, accountants, feasibility consultants, rating services, bond insurance premiums, bond counsel,
disclosure counsel, or any other experts retained by the Agency in connection with a financing.
13. Contract Administrators:
Agency:
Consultant:
Lyle W. Haynes, Assistant Director of Community Development
Suzanne Q. Harrell, Senior Vice 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.
16. Consultant is Real Estate Broker and/or Salesman
Not applicable.
17. Pe~mitted Subconsultants:
Not applicable.
18. Bill Processing:
Submitted in accordance with payment milestones set forth in Section 11, above.
Agency's Account Number: 990-9907-5201
992-9920-5201
994-9940-5201
19. Security for Performance
None.
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DRAFT AS OF APRIL is, 2000
NEW ISSUE - BOOK-ENTRY ONLY
RATING
Standard &Poor'S:_
(See "CONCLUDING INFORMATION - Rating on the Bonds" herein)
in the opinion of Stradling Yocca Carlson & Rauth. a Professional Corporalion. Newport Beach. California, Bond Counsel.
under existing staluJes. regulations. rulings and judidal decisions. and assuming certain representations and compliance with
certain covenants and requirements discussed herein. interest on and original issue discount with respect (0 the Bonds are
e..tc1uded from gross income for federal income lax purposes. and are not an item of tax preference for purposes of calculating
the federal alternative minimum ta:ces imposed on individuals and corporations, In lhe funher opinion of Bond Counsel,
inLerest on and on'ginal issue discounJ wilh respeCl 10 the Bonds are exempl from California personal income la.tes. See
"LEGAL MAlTERS - Tax Malters" herein.
SAN DIEGO COUNTY
STATE OF CALIFORNIA
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:-,.-
._--
--
--
REDEVELOPl\tIENT AGENCY OF THE CITY
OF CHULA VISTA
$5,035,000*
2000 TAX ALLOCATION BONDS
(TOWN CENTRE NO. II REDEVELOPMENT
PROJECT)
C1Y Of
CHUlA VJSIA
$6,305,000*
2000 TAX ALLOCATION BONDS
(OTAY VALLEY ROAD REDEVELOPMENT
PROJECT)
$2,655,000*
2000 TAX ALLOCATION BONDS
(SOUTHWEST REDEVELOPJ'ytENT
PROJECT)
Dated: JWle 1, 2000
Due: September 1 As Shown On The
Inside Cover Page Hereof.
The cover page contains certain information for quick reference only. It is not a sununary of the issue. Potential
investors must read the entire Official Statement to obtain information essential to the making of an infonned
investment decision. See "BONDOWNERS' RISKS" herein for a discussion of special risk factors that should be
considered in evaluating the investment quality of the Bonds.
werest on the respective series of Bonds is payable co=cing September 1. 2000, semiannually thereafter on March 1 and
September 1 of each year until matUrity or earlier redemption (sO!' "THE BONDS" General Provisions" and "THE BONDS -
Redemption" herein).
The information contained within !his Official Statemen! was prepared under the direction
of the Agency by the following firm serving as Fmancing Consultant to the Agency.
ROD GUNN ASSOCIATES, INC.
A DETAILED MATURITY SCHEDULE IS SET FORTH ON THE INSIDE COVER PAGE HEREOF
The respective series of Bonds are three separate and distinct issues of Bonds and rely upon separate and distinct sources of
security. Each respective issue of the Bonds is payable solely from certain taX revenues of the Redevelopment Agency of the
City of Chula Vista (the . Agency.) as described herein and certain other funds held under the applicable Indenrure (see
"SOURCES OF PAYMEi'lT FOR THE BONDS", "BONDOWNERS' RISKS" and "DEBT SfRUCrtJ"RE" herein). II is
anticipated thaI the Bonds will be available for delivery in New Yorl<, New Yorl<, on or about June I. 2000 for deposit with
The Depository Trust Company (see "THE BONDS - General Provisions - Book-Entry Only system" herein).
The date of lhe Official Slalemenl is ----' 2000.
* Preliminary, subject to change.
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Maturity Date
September 1
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Maturity Date
September 1
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Maturity Date
September 1
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
$5,035,000.
2000 TAX ALLOCATION BONDS
(TOWN CENTRE NO. n REDEVELOPMENT PROJEC'l)
MA TlJl11TY SCHEDULE
Principal
Amount
Principal
Amount
Interest. Maturity Date
Rate . Yield September 1
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
$6,305,000.
2000 TAX ALLOCATION BONDS
(OTAY V ALLEY ROAD REDEVELOPMENT PROJECT)
MATURITY SCHEDULE
Principal Interest Maturity Date Principal
Amount Rate Yield September 1 Amount
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2rn:T
2028
2029
2030
$2,655,000.
2000 TAX ALLOCATION BONDS
(SOUTHWEST REDEVELOPMENT PROJECT)
MATURITY SCHEDULE
Principal Interest Maturity Date Principal
Amount Rate Yield September 1 Amount
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
. Preliminary. subject to change.
ii
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Interest
Rate Yield
Interest
Rate Yield
Interest
Rate Yield
REDEVELOPlVIENT AGENCY OF THE CITY OF CHULA VISTA
CHULA VISTA, CALIFORNIA
AGENCY GOVERNING BOARD AND CITY COUNCil-
Shirley G. Horton, Mayor and Chair
Patty Davis, Counalmember
John S. Moot, Counalmember
Stephen C. Padilla, Counalmember
Mary Salas, Councilmember
CITY AND AGENCY STAFF
David D. Rowlands, Jr., City Manager
Sid Morris, Assistant City Manager
George Krempl, Assistant City Manager
David Palmer, Deputy City Manager
Robert Powell, Deputy City Manager/Direaor of Finance
Chris Salomone, Direaor of Community Development
Lyle Haynes, Assistant Direaor of Community Development
Susan Bigelow, City Clerk
John Kaheny, City Attorney
PROFESSIONAL SERVICES
Bond Counsel and Disclosure Counsel
Stradling Yocca Carlson & Rauth,
a Professional Corporation
Newport Beach, California
Financing Consultant
Rod Gunn Associates, Inc.
Seal Beach, California
Trustee
U.S. Bank Trust National Association
Los Angeles, California
FOR ADDITIONAL INFORMA nON
Robert Powell, Director of Finance, City of Chula VISta, California (619) 691-5051
Rod Gunn Associates, Inc. (562) 598-7677
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TABLE OF CONTENTS
INTRODtJCTORY STATEMENT ....................1
The Is~'1lIC ................................................. I
Security and Sources of Repayment................... 2
Purpose.... ........ ......... ........ ....................... 2
The Bonds. ................. .....................:.,....... 2
Legal Matters..... ........ ................................ 3
Professional Services ....................................4
Offering of the Bonds ...................................4
Information Concerning this Official Statement.....5
SELECTED ESSENTIAL FACTS .................... 6
THE BONDS............................................... 7
General Provisions....................................... 7
Authorization .............................................9
Estimated Sources and Uses of Funds ...............10
Redemption ..: ..... ......................................10
SOURCES OF PAYMENT FOR THE BONDS...14
Pledge ofTa.'t Revenues ...............................14
Reserve Account........................................14
BONOOWNERS' RISKS ..............................15
Factors Which May Affect Tax Revenues ..........15
Recent Legislation ......................................18
Loss ofTu Exemption ................................18
Secondary Market................................... ....18
Projected Ta.'t Revenues Assumptions and Bond
Retirement ......................:................. .... .18
THE AGENCY ...........................................23
Government Organization .............................23
Agency Powers............................... ...........23
Redevelopment Plan............................. .......24
Plan Limitations... ...... ................................24
Capical Projects. ... .... ........................ ..........25
Low and Moderate Income Housing .................25
THE PROJECT AREAS ...............................26
TOWN CENTRE n PROJECT AREA .............26
Description of the Project Area......:................26
Major Taxpayers ........................................27
Assessment Appeals ....................................28
Assessed Valuations ....................................29
OTAY VALLEY ROAD PROJECT AREA........30
Description of the Project Area.......................30
Major Taxpayers..... ...................................31
Assessment Appeals ...... .................. ............32
Assessed Valuations ....................................33
SOUTHWEST PROJECT AREA....................34
Description of the Project Area.......................34
Major Taxpayers.. ..... .................................35
Assessment Appeals ....................................36
Assessed Valuations ....................................36
D-Y
T" "'r
.FINANCIAL INFORJ\oIATION ...................... 37
Agency Budgetary Process and Administration ...37
Public Employee Salaries and Benefits ............. 37
Agency Accounting Records and Financial
Statements ..... ........................................ 37
Ta.'t Increment Revenues .............................. 38
Tax Sharing Agreements.............................. 47
DEBT STRUCTURE ...................................49
Outstanding Indebtedness of the T own Centre II
Project Area.......... .................................49
Outstanding Indebtedness of the Otay Valley
Road Project Area ...................................49
Outstanding Indebtedness of the Southwest
Project Area........................................... 50
Scheduled Debt Service on the Town Cenae II
Project Bonds ......................................... 51
Scheduled Debt Service on the Otay Valley Road
Project Bonds ................................:........ 52
Scheduled Debt Service on the Southwest Project
Bonds .....,............................................53
Additional Agency Indebtedness ..................... 54
SUMMARY OF THE INDENTURES .............. 56
Establishment of Funds........................... .....56
Invesonent of Funds ...................................57
Other CovenantS of the Agency...................... 58
Amendment of Indenture........... ................ ...59
Events of Default and Remedies ..................... 59
Defeasance of Bonds..............................,,,,, 61
LEGAL MATTERS .................................... 62
Enforceability of Remedies ........................... 62
Approval of Legal Proceedings .....:................ 62
Tax Matters ............................................. 62
Absence of Litigation.................................. 63
CONCLUDING INFORMATION................... 64
Rating on the Bonds ...................................64
The Financing COnsultant............................. 64
Additional Information ................................ 64
References. .............. ................................ 64
Execution .......... ...... ................................ 64
DEFINlTIONS OF CERTAIN TER.J."IS...........A-l
CITY OFCHULA VISTA INFORl\L-\TION
STA TEl.I<IENT ............... ................. ........ B-1
AGENCY AUDITED FINANCIAL
STATEMENTS ............................... ... .....C-l
FORM OF CONTINUING DISCLOSURE
CERTIFlCA TE ... ............... .... ............ ....D-l
FORM OF BOND COUNSEL OPINION.........E-l
Iv
OFFICIAL STATEMENT
, .; REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA .'
. . $5,035,000*
2000 TAX ALLOCATION BONDS
(TOWN CENTRE NO. II REDEVELOPMENT PROJECT)
$6,305,000*
2000 TAX ALLOCATION BONDS
(OTA Y V ALLEY ROAD REDEVELOPMENT PROJECT)
$2,655,000*
2000 TAX ALLOCATION BONDS
(SOUTHWEST REDEVELOPMENT PROJECT)
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 (the" Agency") 2000 Tax Allocation Bonds ([own Centre No. II Redevelopment Project)
(the "Town Centre II Project Bonds"), in the aggregate principal amount of $5,035,000*, the 2000 TaJc
Allocation Bonds (Otay Valley Road Redevelopment Project) (the "Otay Valley Road Project Bonds")
in the aggregate principal amount of $6,305,000* and the 2000 Tax Allocation Bonds (Southwest
Redevelopment Project) (the "Southwest Project Area Bonds") in the aggregate principal amount of
2,655,000*, Collectively, the Town Centre II Project Bonds, the Otay Valley Road Project Bonds and
the Southwest Project Bonds are referred to herein as the "Bonds".
INTRODUCTORY STATEMENT
This Introductory Statement contains only a brief description of these issues and does not purpon to be
complete. The Introductory Statement is subject in all respects to more complete information in the
entire Offidal Statement and the offering of the Bonds to potential investors is made only by'means of
the entire Offidal Statement and the documents summarized herein. Potential investors must read the
entire Offidal Statement to obtain information essential to the making of an infonned investment
dedsion (see "BONDOWNERS' RISKS" herein).
The Issuer
The Agency. The Redevelopment Agency of the City of Chula Vista (the "Agency") is a public body,
corporate and politic, existing under and by vinue of the Co=unity Redevelopment Law of the State
of California, constituting Pan 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 (the "City Council") 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 on 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. OTY OF CHULA VISTA INFOR!';IATION
STATEMENT" herein).
. Preliminary, subject to change.
1
D-5
Security and Sources of Repayment
The Bonds. The Bonds of each series are issued and secured under a separate Indenrure of Trust,
dated as of June I, 2000 (individually,. the "Indenrure" and collectively, the "Indenrures"), by and
between the Agency and U.S. Bank TruSt National Association, Los Angeles, California, as Trustee
(the "Trustee") (see "SUMi"IARY OF THE INDENTURES" herein).
Pursuant to each respective Indenrure, the Agency has pledged to the repayment of the respective series
of Bonds (and has secured by a lien on) Tax Revenues, as detined herein. With respect to the Town
Centre II Project Bonds, Tax Revenues consist of. t:L"{ increment revenues allocated to the Agency
pursuant to Section 33670 of the Redevelopment Law ("Tax Increment Revenues") for the Agency's
Town Centre No. II Project Area, excluding (i) amounts required to be deposited in the Agency's Low
and Moderate Income Housing Fund and (ll) amounts required to be paid under the Tax Sharing
Agreement. With respect to the Oray Valley Road Project Bonds, Tax Revenues consist of Tax
Increment Revenues of the Agency's Otay Valley Road Project Area excluding amounts required to be
deposited in the Agency's Low and Moderate Income Housing Fund. With respect to the Southwest
Project Bonds, Tax Revenues consist of Tax Increment Revenues of the Agency's SouthweSt ProjeCt
Area excluding (i) amounts required to be deposited in the Agency's Low and Moderate Income
Housing Fund and (ll) amounts required to be paid under the Tax Sharing Agreements (see "THE
AGENCY _ Low and Moderate Income Housing", "DEBT STRUCTURE" "Ta"t Sharing Agreements",
"FINANCIAL INFOR....IATION - Ta"t Increment Revenues" and "BONDO\YNERS' RISKS" herein).
The Project Areas. The Redevelopment Plan for the Town Centre No. II Project Area ("Town Centre
II Project Area") was adopted in 1978. The Town Centre II Project Area consists of 212 acres of
mixed commercial and municipal uses. The Redevelopment Plan for Otay Valley Road Project Area
(the "Oray Valley Road Project Area") was adopted in 1983. The Otay Valley Road Project Area
consists of 770 acres of primarily industrial uses. The Redevelopment Plan for the Southwest Project
Area ("Southwest Project Area") was adopted in 1990. The Southwest Project Area consists of 1,100
acres of mixed residential, commercial and industrial uses (see "THE PROJECT AREAS" herein). The
Town Centre II Project Area, the Oray Valley Road Project and the Southwest Project Area shall herein
collectively be referred to as the "ProjeCt Areas".
The Bonds are limited obligations of the Agency. The Bonds do not constitute a debt or liability
of the City, 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 ta.wg power of the City, 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 ad valorem taxing power.
Purpose
The Bonds are being issued to provide funds to establish separate reserve accounts, to pay the expenses
of the Agency in connection with the issuance of the Bonds and to provide funds for the redevelopment
activities of the Agency (see "THE BONDS - Estimated Sources and Uses of Funds" herein).
The Bonds
Redemption. The Town Centre II Project Bonds maturing September 1, ~ and September 1, -
are subject to mandatory redemption, without premium, prior to their rnarurity date, in part by lot on
September 1 in each year commencing September 1, with respect to the Town Centre II Project
Bonds rnaruring September 1, _ and conunencing September 1, _ with respect to the Town
Centre II Project Bonds maruring September 1, _, from Sinking Account payments under the
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Indenmre. The Oray Valley Road Project Bonds mamring September 1, are subject 10 mandatory
redemption, without premium, prior to their mamrity date, in pan by lot on September 1 in each year
commencing September 1, from Sinking Account Payments under the Indenture. The Southwest
Project Bonds mamring September 1, _ are subject to mandatory redemption, without premium,
prior to their mamrity date, in pan by lot. on September 1 in each year commencing September 1, _
from Sinking Account Payments under the Indenmre (see "THE BONDS - Redemption - Mandatory
Sinking Account Redemption" herein).
The Bonds are also subject to optional redemption prior to maturity, in whole or in part, in a manner
determined by the Agency, on September 1, 2003, and on any Interest Payment Date thereafter at a
redemption price equal 10 the principal amount thereof, plus accrued interest to the date of redemption,
plus a premium, as described herein (see "THE BONDS - Redemption - Optional Redemption" herein).
Denominations. The Bonds will be issued in the minimum denomination of $5,000 each or any
integral multiple thereof (see "THE BONDS - General Provisions~ herein).
Registration, Transfer and Exchange. The Bonds will be issued in fully registered form without
coupons. Any Bond may, in accordance with its terms, be transferred or exchanged, pursuant to the
provisions of the Indenture (see "THE BONDS - General Provisions - Transfer or Exchange of Bonds"
herein). When delivered, the Bonds will be registered in the name of The Depository Trust Company,
New York, New York ("DTC"), or its nominee. DTe will act as securities depository for the Bonds.
Individual purchases of Bonds will be made in book-entry form only. Purchasers of the Bonds will not
receive certificates representing their Bonds purchased (see "THE BONDS - General Provisions - Book-
Entry Only System" herein).
Payment. Principal of the Bonds and any premium upon redemption will be payable in each of the
years and in the amounts set forth on the cover page hereof upon surrender at the corporate truSt office
of the Trustee in St. Paul, Minnesota. Interest on the Bonds will be paid by check of the Trustee
mailed by first class mail to the person entitled thereto (except as otherwise described herein for interest
paid to an account in the United States of America by wire transfer as requested in writing no later than
the applicable Record Date by an owner of $1,000,000 or more in aggregate principal amoWlt of
Bonds) (see "THE BONDS - General Provisions" herein). Initially, interest on and principal and
premium, if any, of the Bonds will be payable when due by wire of the Trustee to DTC which will in
turn remit such interest, principal and premium, if any, to DTC Participants (as defmed herein), which
will in turn remit such interest, principal and premium, if any, to Beneficial Owners (as defined herein)
of the Bonds (see "THE BONDS - General Provisions - Book-Entry Only System" herein).
Notice. Notice of any redemption will be mailed by first class mail by the Trustee at least thirty (30)
but no more than sixty (60) days prior 10 the date fixed for redemption to the registered owners of any
Bonds designated for redemption and to the Securities Depositories and Information Services provided
in the Indenture. Neither failure to receive such notice nor any defect in the notice so mailed will affect
the sufficiency of the proceedings for redemption of such Bonds or the cessation of accrual of interest
on the redemption date (see "THE BONDS - Redemption - Notice of Redemption" herein).
Legal Matters
All legal proceedings in connection with the issuance of the Bonds are subject to the approving opinion
of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond
Counsel. Such opinion, is described more fully under the heading "LEGAL MATTERS" herein. Certain
legal matters will be passed on for the Agency by the City Attorney and by Stradling Y occa Carlson &
Rauth, a Professional Corporation, Newport Beach, California as Disclosure Counsel.
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Tax Exemption. In the opinion of Bond Counsel, subject, however, to certain qualitications described
herein, under existing law, the interest on the Bonds is excluded from gross income for federal income
laX purposes, such interest is not an item of laX preference for purpmes of the federal alternative
minimum laX imposed on individuals and corporations, although, for the purpose of computing the
alternative minimum tax imposed on certain corporations, such interest is taken into account in
determining certain income and earnings. In the further opinion of Bond Counsel, such interest is
exempt from California personal income taxes. See "LEGAL MA TIERS - Ta:< Matters" herein.
Professional Services
U.S. Bank Trust National Association, Los Angeles, California, will serve as trustee (the "Trustee")
under the Indentures. The Trustee will act on behalf of the Bondowners 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 Ta;< Revenues and other funds held under the Indentures, and otherwise to hold all the
offices and perform all the functions and duties provided in the Indentures to be held and performed by
the Trustee.
Rod Gunn Associates, Inc., Seal Beach, California, Financing Consultant, advised the Agency as to the
financial structure and certain other financial matters relating to the Bonds. Fees payable to Bond
Counsel, Disclosure Counsel and the Financing Consultant are contingent upon the sale and delivery of
the Bonds.
The Agency's fmancial statements for the fIScal year ended June 30, 1999, attached hereto as
"APPENDIX C" have been audited by Calderon, Jaham & Osborn, Certified Public Accountants and
Consultants, San Diego, California.
Offering of the Bonds
Authority for Issuance. The Bonds are to be issued and secured pursuant to the respective Indentures,
as authorized by Resolution No. of the Agency adopted on May 2, 2000. The Bonds are also
issued in accordance with the lawsof the State of California (the "State"), and particularly the
Co=unity Redevelopment Law of the State, constituting Part I of Division 24 (co=encing with
Section 33000) of the Health and Safety Code of the State (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, Bond Counsel. It is anticipated that the Bonds will be available for delivery in New
York, New York, on or about June I, 2000.
No dealer, broker, salesperson or other person has been authorized by the Agency or the
Fmancing Consultant to give any information or to make any representations in connection with
the offer or sale of the Bonds described herein, other than as contained in this Official Statement,
and if given or made, such other information or representations must not be relied upon as having
been authorized by any of the foregoing.
Tbis Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy,
nor shall there be any sale of the Bonds by any person in any jurisdiction in wbich it is unlawful
for such person to make such offer, solicitation or sale or to any person to whom it is unlawful to
make such offer, solicitation or sale.
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In connection with the offering of the Bonds, 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 dealer banks and
banks acting as agent at prices lower than the public offering prices stated on the inside cover
page hereof and said public offering prices may be changed from time to time by the Undenvriter.
Information Concerning this Official Statement
This Official Statement speaks only as of its date. The information set forth herein has been obtained
by Rod Gunn Associates, Inc. from the Agency, the Ciry and other sources which are believed to be
reliable, 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 Financing Consultant, the
Agency or the City. 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 Agency and the City for the purpose of Rule 15c2-12 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 Statemem 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.
Continuing Disclosure. The Agency will covenant to provide annually certain fInancial information
and operating data relating to the Project Areas by not later than March 31 each year co=encing
March 31, 2001 and to provide the audited Financial Stat=ents of the Agency for the fIscal year
ending June 30, 2000 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 f1!ed by the
Agency with the Municipal Securities Rulemaking Board, the Repositories and a Scate 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 not previously undertaken, nor has previously failed to comply with any undertaking,
to provide any required continuing disclosure.
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 Indenrure. Defmitions of
certain terlDS used herein are set forth in "APPENDIX A" hereto. Copies of the documents described
herein are available for inspection during the period of initial offering of the Bonds at the offices of the
Financing Consultant, Rod Gunn Associates, Inc., 3010 Old Ranch Parkway, Suite 330, Seal Beach,
California 90740, telephone (562) 598-7677. Copies of these documents may be obtained after delivery
of the Bonds from the Agency at 276 Fourth Avenue, Chula Vista, California 91910, telephone (619)
691-5051.
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SELECTED ESSENTIAL FACTS
The following summary does not purpon to be complete. Rtiference is hereby made to the complete
Official Statement in this regard.
THE PROJECT AREAS
Size of the Project Area:
Ten Largest Secured Property Taxpayers, Expressed
as a Percentage of 1999/00 Secured Assessed
Valuation:
THE BONDS
Principal Amount:
1999/00 Projected Tax Revenues:
Maximum Annual Debt Setvice on the Bonds:
Ratio of 1999/00 Tax Revenues to Maximum
Annual Debt Setvice on the Bonds:
Parity Debt Coverage Ratio Requirement:
. Preliminary, subject to change.
11"' ..,.
Town
Centre II
212 acres
98.5%
$5,035,000*
$725,400
$415,000*
175 % *
175%
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Olay
Valley Road
770 acres
66.6%
$6,305,000*
$711,500
$490,000*
145 %*
145%
Southwest
1,100 acres
20.2%
$2,655,000*
$326,600
$210,000*
156%*
140%
THE BONDS
General Provisions
Repayment of the Bonds. Interest is payable on the Bonds at the rates per annum set forth on the
inside cover page hereof. Interest with respect to the Bonds will be computed on the basis of a year
consisting of 360 days and twelve 30-day months.
Each Bond will be dated as of June 1, 2000, and interest on the Bonds will be payable commencing
September 1, 2000 and thereafter from the Interest Payment Date next preceding the date of
authentication thereof, unless (a) it is authenticated on or before an Interest Payment Date and after the
close of business on the preceding Record Date, in which event interest thereon will be payable from
such Interest Payment Date; (b) it is authenticated on or before August 15, 2000, in which event
interest thereon will be payable from June' 1, 2000; or (c) interest on any Bond is in default as of the
date of authentication thereof, in which event interest thereon will be payable from the date to which
interest has previously been paid in full.
Interest will 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.
Interest on the Bonds shall be paid by check of the Trustee mailed by first class mail, postage prepaid,
on each Interest Payment Date to the Owners of the Bonds at their respective addresses shown on the
Registration Books as of the close of business on the preceding Record Date; provided, however, that at
the written request of the Owner of Bonds in an aggregate principal amount of at least $1,000,000,
which written request is on file with the Trustee as of any Record Date, interest on 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 written request. The principal
of and premium (if any) on the Bonds shall be payable in lawful money of the United States of America
by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee in St. Paul,
Minnesota.
Book-Entry Only System. DTC will act as securities depository for the Bonds. The ownership of one
fully registered Bond for each maturity in the amounts shown on the inside cover page hereof will be
registered in the name of Cede & Co., as nominee for DTe. DTC is a limited purpose trUst company
organized under the laws of the State of New York, 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,
as amended. DTC was created to hold securities of irs participants (the "DIC Participants") and to
facilitate the clearance and settlement of securities transactions among DTC Participants in such
securities through electronic book-entry charges in the accounts of the DTC Participants, thereby
eliminating the need of physical movement of securities cenificates. DTC Participants include
securities brokers and dealers, banks, trUst companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is
also available to others such as banks, brokers, dealers and trUSt companies that clear through or
maintain a custodial relationship with a DTC Participant, either directly or indirectly (the "Indirect
Participants") .
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The DTC Participants shall receive a credit balance in the records of DTC representing ownership
interests in the Bonds. The ownership 'interest of each actual purchaser of each Bond (the "Beneticial
Owner") will be recorded through the records of the DTC Participant. Beneticial Owners are expected
to receive a written confinnation of their. purchase providing details of the Bond acquired. Transfers of
ownership interests in the Bond will be accompanied by book entries made by DTC and, in turn, by the
DTC Participants who act on behalf of the Beneficial Owners. The Beneficial Owners will not receive
certiticates representing their ownership interest in the Bonds, except as specifically provided in the
Indenture.
So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to
the Owners or registered owners of the Bonds shall mean Cede & Co. and shall not mean the Beneficial
Owners of the Bonds.
DTC may determine to discontinue providing its service with respect to the Bonds at any time by giving
notice to the Agency and the Trustee and discharging its responsibilities with respect thereto under
applicable law. Under such circumstances, Bond certificates are required to be delivered as described
in the Indenture. The Beneficial Owners, upon registration of certificates held in the Beneficial
Owner's name, will become the registered owners of the Bonds.
The Agency may determine that continuation of the system of book-entry transfers through DTC (or a
successor securities depositOry) is not in the best interests of the Beneficial Owners. In such event,
Bond certificates will be delivered as described in the Indenture.
The Agency and the Trustee will recognize DTC or its nominee as the sole Bondowner for all purposes,
including notices and voting. Conveyance of notices and other co=unications by DTC to DTC
Participants, by DTC Participants to Indirect Participants and by DTC Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them, subject to any
statutory and regulatory requirements as may be in effect from time to time.
Principal, Sinking Account, interest payments and premium, if any, with respect to the Bonds will be
made to DTC or its nominee, Cede & Co., as registered owner of the Bonds. Upon receipt of moneys,
DTe's current practice is to immediately credit the accounts of the DTC Participants in accordance
with their respective holdings shown on the records of DTC. Payments by DTC Participants and
Indirect Panicipants to Beneficial Owners will be governed by standing instructions and customary
practices, as is now the case with municipal securities held for the accounts of customers in bearer form
or registered in "street name", and will be the responsibility of such DTC Participant or Indirect
Participant and not of DTC, the Agency or the Trustee, subject to any statutory and regulatory
requirements as may be in effect from time to time.
The Agency or the Trustee cannot and do not give any assurance that DTC, DTC Participants or
Indirect Participants will distribute to the Beneficial Owners (i) payments of interest, principal or
premium, on the Bonds, (ii) certificates representing an ownership interest in or other confmnation of
ownership interests in the Bonds, or (iii) redemption or other notices sent to DTC or Cede & Co., its
nominee, as the registered owner of the Bonds, or that they will do so on a timely basis or that DTC,
DTC Participants or Indirect Participants will service or act in the manner described in this Official
Statement. The current "Rules" applicable to DTC are on fIle with the Securities and Exchange
Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are
on file with DTe.
Neither the Agency nor the Trustee will have any responsibility or obligations to the DTC participants,
the Indirect Participants or the Beneficial Owners with respect to (i) the accuracy of any records
. maintained by DTC or any DTC Participants or any Indirect Panicipants; (ii) the payment by DTC or
any DTC Participants or any Indirect participants of any amount due to any Beneficial Owner in respect
of the principal amount, redemption price or interest on the Bonds; (iii) the delivery by DTC or any
8
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DTC Participants or any Indirect Participants of any notice to any Beneticial Owner which is required
or permitted under the terms of the Indenture to be given to Bondowners; (iv) the selection of the
Beneticial Owners to receive payment in the event of any partial redemption of the Bonds; or (v) any
consent given or other action taken by DTC as the Bondowner.
Transfer or Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred or
exchanged, pursuant to the provisions of the Indentures, upon surrender of such Bond for cancellation
at the principal corporate trust office 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 of
like maturity and aggregate principal amount. The Trustee will collect any tax or other goverrunental
charge required to be paid with respect to such transfer or exchange. The Trustee may refuse to
transfer or exchange any Bonds or portions thereof during the period established by the Trustee for
selection of Bonds for redemption, or any Bonds selected for redemption.
Authorization
The Bonds are to be issued and secured pursuant to the Indenture authorized by Resolution No.
of the Agency adopted on May 2, 2000. The Bonds are also issued in accordance with the laws of the
State of California (the "State"), and particularly the Commnnity Redevelopment Law of the State,
constituting Pan I of Division 24 (co=encing with Section 33000) of the Health and Safety Code of
the State.
9
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Estimated Sources and Uses of Funds
Under the provisions of the Indenture, the Trustee will receive the proceeds from the sale of the Bonds
and will apply them as follows:
Sources of Funds
Town
Centre II .
Otay
Valley Road
Southwest
Principal Amount of Bonds
Underwriter's Discount
Accrued Interest
Tota! Available Funds
Uses of Funds
Interest Account
Redevelopment Fund
Reserve Account (1)
Costs of Issuance Fund (2)
Tota! Use of Funds
(lJ An amount equal to the respective Reserve Requirement (see "SOURCES OF PAYMENT FOR THE BONDS -
Reserve Account" herein).
(2) Expenses include fees of Boud Counsel, the Financing Consultant, the Disclosure Counsel, Trustee, costs of
printing the Offici:iJ. Statement, rating agency fees and other costS of issuance of the Bonds.
Deposit to the Redevelopment Fund. Proceeds deposited to the Redevelopment Fund will be used to
fund ceru.in redevelopment activities of the Agency. These activities are expected to include [to be
completed] .
Redemption
Optional Redemption. The Bonds maturing on or before September 1, 2003 are not subject to
optional redemption prior to their respective maturity dates. The Bonds maturing on or after September
1, 2004 are subject to redemption prior to maturity at the option of the Agency as a whole or in pan
among maturities designated by the Agency and by lot within a maturity, from any source of available
funds, on any date on or after September 1, 2003, at the following respective redelIlption prices
(expressed as a percentage of the principal amount of Bonds to be redeemed) together with accrued
interest thereon to the date of redemption:
Redemption Periods
September 1,2003 through August 31,2006
September 1,2007 through August 31,2010
September 1, 2010 through August 31,2011
September 1, 2011 through August 31, 2012
September 1, 2012 and thereafter
Redemption Prices
103.0%
102.5%
102.0%
101.0%
100.0%
10
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Mandatory Sinking Account Redemption. The Town Centre II Project Bonds maturing September 1,
_ and September 1, _ (collectively, the "Town Centre II Project Term Bonds"), the Otay Valley
Road Project Bonds maturing September 1, _ (the "Otay Valley Road Project Term Bonds") and the
Southwest Project Bonds maturing September 1, _ (the "Southwest Project Term Bonds") are
subject to mandatory redemption, in pan by lot, on September 1 in each year commencing September
1, with respect to the Town Centre II Project Term Bonds maturing September 1, , and
commencing September 1, with respect to the Town Centre II Project Term BondslDaturing
September 1, _, and cor:rIDieilcing September 1, _ with respect to the Otay Valley Road Project
Term Bonds and commencing September 1, _ with respect to the Southwest Project Term Bonds
from mandatory Sinking Account payments at a redemption price equal to the principal amount thereof
to be redeemed, together with accrued interest thereon to the date of redemption without premium, in
the aggregate principal amounts and on September 1 in the' years as set fanh in the following schedules
or in lieu of redemption thereof, the Term Bonds may be purchased by the Agency and tendered to the
Trustee pursuant to the provisions of the Indenture; provided, however, that if some but not all of the
Term Bonds have been redeemed pursuant to the optional redemption provisions described herein, the
total amount of all future Sinking Account payments attributable to such Term Bonds will be reduced
by the aggregate principal amount of such Term Bonds so redeemed, to be allocated among such
Sinking Account payments in integral multiples of $5,000 as determined by the Agency (written notice
of which determination shall be given by the Agency to the Trustee).
SCHEDULE OF .MANDATORY SINKlNG ACCOilllT REDEl';IPTIONS
TOWN CENTRE IT PROJECT TERM: BONDS MATURING SEPTEi\IBER 1,
September 1 Principal
Year Amount
(maturity)
SCHEDULE OF MANDATORY SINKlNG ACCOUNT REDElYlPTIONS
TOWN CENTRE IT PROJECT TERM BONDS MATURING SEPTEMBER 1,
September 1 Principal
Year Amount
(maturity)
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SCHEDULE OF MANDATORY SINKING ACCOUNT REDErvll'TlONS
OTA Y VALLEY ROAD PROJECTTERM BONDS MATURING SEPTEMBER 1,_
September 1 Principal
Year . Amount
(maturity)
SCHEDULE OF MANDATORY SINKING ACCOUNT REDElVll'TlONS
SOUTHWEST PROJECT TERM BONDS MATURING SEPTElVffiER 1, -
September 1 Principal
Year Amount
(maturity)
Notice of Redemption. When redemption is authorized or required, the Trustee on behalf and at the
expense of the Agency shall mail (by first class mail, postage prepaid) notice of any redemption at least
thirty (30) but not more than sixty (60) days prior to the redemption date, to (i) the Owners of any
Bonds designated for redemption at their respective addresses appearing on the Registration Books, and
(ii) the Securities Depositories and to one or more Information Services designated in a Request of the
Agency delivered to the Trustee; provided, however, that such mailing shall not be a condition
precedent to such redemption and neither failure to receive any such notice 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. Notice of redemption of the Bonds (other than notice of mandatory Sinking Account
redemption and other than notice that refers to Bonds which are the subject of an advance refunding)
shall be given only if sufficient funds have been deposited with the Trustee to pay the redemption price
of the Bonds to be redeemed.
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Effect of Redemption. From and after the date tixed for redemption, if funds available for the
payment of the redemption price of and interest on the Bonds so called for redemption shall have been
duly deposited with the Trustee, such Bonds so called shall cease to be entided to any benefit under the
Indenture other than the right to receive payment of the redemption price and accrued interest to the
redemption date, and no interest shall accrue thereon from and after the redemption date specitied in
such notice.
Partial Redemption. In the event only a portion of any Bond. is called for redemption, then upon
surrender of such Bond the Agency will execute and the Trustee will authenticate and deliver to the
Owner thereof, at the expense of the Agency, a new Bond or Bonds of the same interest rate and
maturity, of authorized denominations in an aggregate principal amount equal to the unredeemed
portion of the Bond to be redeemed.
Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption
of less than all of the Bonds, the Trustee shall select Bonds for redemption by lot in any manner which
the Trustee deems appropriate and fair.
"
,
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SOURCES OF PAYMENT FOR THE BONDS
Pledge of Ta.'I: Revenues
The respective Tax Revenues are pledged to the payment of principal of and interest on the respective
Bonds pursuant to the Indentures until the Bonds have been paid, or until moneys have been set aside
irrevocably for that purpose. The Trustee will covenant to exercise such righlS and remedies as may be
necessary to enforce the payment of the Tax Revenues when due under the Indentures and otherwise to
protect the intereslS of the Bondowners in the event of default by the Agency.
The Bonds are limited 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 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 ad valorem taxing power.
The Agency has irrevocably pledged a lien on the Tax Revenues, as defined herein, of the Town Centre
II Project Area to the repayment of the Town Centre II Project Bonds. Such Tax Revenues consist of
Tax Increment Revenues allocated to the Agency's Town Centre II Project Area excluding (i) amounts
required to be deposited in the Agency's Low and Moderate Income Housing Fund and (Ii) amounts
required to be paid under a Tax Sharing Agreement. The Agency has irrevocably pledged a lien on the
Tax Revenues of the Otay Valley Road Project Area to the repayment of the Otay Valley Road Project
Bonds. Such Tax Revenues consist of Tax Increment Revenues allocated to the Agency's Otay Valley
Road Project Area, excluding that portion of such Tax Increment Revenues required to be deposited in
the Agency's Low and Moderate Income Housing Fund. The Agency has irrevocably pledged a lien on
the Tax Revenues of the Southwest Project Area to the repayment of the Southwest Project Bonds.
Such Tax Revenue consist of Ta;'( Increment revenues allocated to the Agency's Southwest Project
Area, excluding (i) amounlS required to be paid under the Tax Sharing Agreements and (Ii) amounlS
required to be deposited in the Agency's Low and Moderate Income Housing Fund (see "DEBT
STRUCTURE _ Ta:t Sharing Agreements", "THE AGENCY - Low and Moderate Income Housing",
"FINANCIAL INFORMATION _ Ta." Increment Revenues" and "BONDOWNERS' RISKS" herein).
Reserve Account
Reserve Requirement. A Reserve Account has been established under each Indenture to be held by
the Trustee to further secure the timely payment of principal and interest on the respective series of
Bonds: The amount required to be maintained in the Reserve Accounts, $415,000., in the case of the
Town Centre II Project Bonds, $490,000. in the case of the Otay Valley Road Project Bonds, and
$210,000* in the case of the Southwest Project Bonds, is an amount equal to the lesser of 10% of the
principal amount of the respective series of Bonds, Maximum Annual Debt Service or 125 % of average
annual Debt Service (each, a "Reserve Requirement"). Subject to certain rights of the Trustee, in the
event that the amount on deposit with the Trustee to pay principal and interest due on the respective
series of Bonds is less than the full amount required for such purpose on the date due, the Trustee will
withdraw from the applicable Reserve Account, the difference between the amount required to be on
deposit and the amount available on such date. Each Indenture provides that in lieu of a cash deposit,
the Agency may satisfy all or a ponion of the applicable Reserve Requirement by means of a Qualified
Reserve Account Credit Instrument, which consists of a qualifying letter of credit, surety bond,
insurance policy or similar tinancial undertaking (see "APPENDL'I: A - DEFINITIONS OF CERTAIN
TERl\'IS" herein).
. Preliminary. subject to change.
14
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BONDOWNERS' RISKS
The purchase of the Bonds involves Investment risk. If a risk factor materializes to a suffident degree,
it could delay or prevent payment of principal of aTiiHor interest on the Bonds. Such risk factors
include, but are not limited to, the following mailerS and should be considered, along with other
infonTUltion in this Offidal Statement, by potential investors.
Factors 'Which May Affect Ta.."{ Revenues
The ability of the Agency to pay principal and interest on the respective series of Bonds depends on the
timely receipt of Tax Revenues as projected herein (see "Projected Tax Revenues Assumptions and Bond
Retirement" below). Projections of Tax Revenues are based on the underlying assumptions relating to
Tax Increment Revenues of each of the Project Areas. 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 Revenues contained in this Official Statement
are based on current assessed valuations within each of the Project Areas, a tax rate equal to $1.00 per
$100 of assessed value applied to the taxable property in the Project Areas and certain projected
increases in property values due to inflation allowed under Anicle XIIIA of the California Constirotion
(see "FINANCIAL INFOR.,"vIA TION - Ta.,,< Increment Revenues" and "BONDO'l'lNERS' RISKS - Projected Ta.-.:
Revenues Assumptions and Bond Retirement" herein). The Agency believes that the projections of Tax
Revenues and the assumptions upon which the projections are based are reasonable. However, any
future decrease in the assessed valuation of either the Project Areas (or any increase at a rate less than
assumed), any general decline in the economic stability of the area, a relocation out of a 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 (see "FINANCIAL INFOR.,vIATION - Ta.-.: Increment
Revenues - Proposition 8 Adjustments" herein), the destruction of property caused by natural disasters or
any delinquencies in the payment of property taxes 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 respective series of Bonds. See
"Projected Tax Revenues Assumptions and Bond Retirement" below regarding the Agency's assumptions
pertaining to such projections.
Article XIlIA. 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 1 % 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 - Ta.-.: 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 decIining 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 Rate. The annual inflationary adjustment, while limited to 2 %, is
determined annually and may not exceed the percentage change in the California Conswner Price Index
(CCPI). Since Article XIIIA was approved, the annual adjustment for inflation has fallen below the 2 %
limitation three times: for 1983/84,1%; for 1995/96,1.19%; and for 1996/97,1.11%. The Agency
has projected Tax Incremem Revenues based on a 2 % inflationary increase in secured assessed values.
Should the assessed value of secured property not increase by at least 2% annually, the Agency's
15
i) -19
.,. ..,.
receipt of projected Tax Revenues may be less than shown in this Ofticial Statement (see "Projected Tax
Revenues Assumptiuns and Bond Retirement" herein).
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 intlation facror, or its full cash value as of the lien date, taking into account reductions in value due
ro 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 (see "FINANCIAL INFOAAIATION - Tax Increment Revenues - Proposition 8 Adjustments" herein).
The Agency's ability ro generate sufficient Tax Revenues to pay debt service on the respective series of
Bonds will be dependent on the economic strength of respective 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, t1uctuations 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.
Assessment Appeals. Assessment appeals may be ftIed by property owners seeking a reduction in the
assessed value of their property. After the property owner ftIes an appeal, the County's Appeals Board
will hear the appeal and make a detetmination 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. Several appeals are
currently pending in the Project Areas (see "THE PROJECT AREAS - Assessment Appeals" herein). 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, T3.."(
Revenues will be reduced. Such reductions may have an adverse affect on the Agency's ability to pay
debt service on the respective series of Bonds. As of the total value of parcels for which
appeals have been ftIed for the Town Centre II Project Area is $ Property owners are
requesting reductions in such value by $ or %. Prior successful appeals averaged an
overall _ % reduction in value. If all appeals are granted aSfIled, Tax Revenues of the Town Centre II
Project Area would be reduced by approximately $ . An overall potential reduction of $
in Tax Revenues equates to % of total Tax Revenues for the Town Centre II Project Area. As of
the rotal value of parcels for which appeals have been filed for the Otay Valley Road Project
Area is $ . Property owners are requesting reductions in such value by $ or
_ %. Prior successful appeals averaged an overall _ % reduction in value. If all appeals are granted
as filed, Tax Revenues of the Otay Valley Road Project Area would be reduced by approximately
$ . An overall potential reduction of $ in Tax Revenues equates to _ % of total Tax
Revenues for the Otay Valley Road Project Area. As of the total value of parcels for which
appeals have been filed for the Southwest Project Area is $ . Property owners are requesting
reductions in such value by $ or _ %. Prior successful appeals averaged an overall - %
reduction in value. If all appeals are granted as fIled, Tax Revenues of the Southwest Project Area
would be reduced by approximately $ An overall potential reduction of $ in Tax
Revenues equates to % of total Tax Revenues for the Southwest Project Area.
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 a
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 traversed by two potentially active faults, the Sweetwater Fault and La Nacion Fault
16
j)-rXJ
T". ..,.
and three inferred faults, the Otay River Fault, the Telegraph Canyon Fault and the San Diego Bay-
Tijuana Fault. Seismic hazards encompass potencial surface rupture, ground shaking and landslides.
The occurrence of any natural or man-made disaster or hazard 'l11;!Y, significantly reduce Tax Increment
Revenues received by the Agency and may adversely impact the Agency's ability to pay debt service on
the Bonds.
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
beneticial use of a property within a 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 a 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 enforcemem 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 imerpretation of their rights
in bankruptcy or otherwise and consequendy may entail risks of delay, limitation, or modification of
their rights.
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.
Article xnm. On October 6, 1979, California voters approved Proposition 4, or the Gann Initiative,
which added Anicle XllIB to the California Constitution. The principal thrust of Anicle XIIIB is to
limit the annual appropriations of the State and any city, county, school district, authority or any other
political subdivision of the State. The amendment includes a requirement that if an entity's revenues in
any year exceed amounts permitted to be spent, the excess will be returned to the taxpayer by revising
the tax override rate over the subsequent two years. To the extent such tax rates are revised, Tax
Increment Revenues may be affected, since Tax Increment Revenues allocated to the Agency are a
function of the combinations of tax rates levied by certain taxing agencies having jurisdiction within the
Project Areas and assessments of property located within the Project Areas (see "FINANCIAL
INFORMATION - T3."< Increment Revenues - Property Tax Rate" herein).
Limited Obligations. The Agency has no power to levy and collect property taxes, and any propeny
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 consequendy, Tax Revenues that would otherwise be available to pay the
principal of, interest on and premium, if any, on the Bonds.
Future Initiatives. From time to time other initiative measures could be adopted, further affecting the
Agency's Tax Increment Revenues.
17
j)-~I
T "'1'
Recent Legislation
Educational Revenue Augmentation Fund, As pan of the 1992193 State Budget implementation
package, the California Legislature adopted S.B. 617 and S.B. 844, which provided for a contribution
by (or on behalf of) redevelopment agencies to. the newly-created "Educational Revenue Augmentation
Fund" (the "Fund"). The Fund was established to provide tinancial assistance to school districts.
The 1993/94 State Budget and the implementing legislation provided for maintaining funding levels for
school districts by shifting revenues from other local governments, including redevelopment agencies.
The total amount to be conrributed to the Fund by redevelopment agencies State-wide was
approximately $65 million in fiscal year 1993/94 and again in fiscal year 1994/95. The Agency's total
pro rata share of this amount was based on the net tax increment revenue (excluding amounts paid
pursuant to tax sharing agreements with other taxing entities) allocated to the Agency in fiscal year
1990/91. The Agency's share of the total 1994/95 State-wide conrribution was approximately
$ . Subsequent State Budgets did not provide for further payments by redevelopment agencies.
However, the legislature may adopt similar or other provisions in furore years, the impact of which, if
any, cannot be determined.
Redevelopment Plan Limitations. The California Legislature enacted Assembly Bill 1290 effective
January 1, 1994, as amended by Senate Bill 732, effective January 1, 1995 (as amended, "AB 1290"),
which contains several significant changes in the Redevelopment Law. Certain of the changes affect the
times for incurrence and repayment of loans, advances and indebtedness of redevelopment agencies.
As enacted, AB 1290 will not adversely impact the proceedings for the issuance of the Bonds or the
payment of debt service on the respective series of Bonds (see "DEBT STRUCTURE - Plan Limitations"
for a further discussion of AB 1290).
The Agency cannot predict what effect subsequent State legislation, if any, will have on the Agency's
Tax Increment Revenues and, consequently, on its ability to timely pay principal and interest on the
respective series of Bonds.
Loss of Tax Exemption
As discussed under the heading "LEGAL !'vIA TTERS - Ta:< Matters" interest on the Bonds could cease to
be excluded from gross income for purposes of federal income taxation, rerroactive to the date the
Bonds were issued, as a result of furore actS or omissions of the City. In addition, it is possible that
furore changes in applicable federal tax laws could cause interest on the Bonds to be included in gross
income for federal income taxation or could otherwise reduce the equivalent taxable yield of such
interest and thereby reduce the value of the Bonds.
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
circulIlStances. Such prices could be substantially different from the original purchase price.
Projected Ta.x Revenues Assumptions and Bond Retirement
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 from the Project Areas shown on the
following table were based on the assumptions shown below. Based upon the projected Tax Increment
18
1) -d-;;)..
1r' ,.
Revenues, the Agency expects sufticient Tax Revenues should be available to the Agency to pay
principal of and interest on the respective series of the Bonds. Although me Agency believes that the
assumptions upon which the projected Tax Increment Revenues and,' ;fax Revenues are based are
reasonable, the Agency and the Financing Consultant provide no assUrance that the projected Tax
Increment Revenues and Ta."C: Revenues will be achieved. To the extent that the assumptions are not
actually realized, the Agency's ability to timely pay principal and interest on the respective series of the
Bonds may be adversely affected.
(a) The 1999/00 secured roll was assumed to increase two percent (2%) annually for inflation in
future years (see "FINANOAL INFORMATION - Ta.'C Increment Revenues - Jlifanner in Which
Property Valuations and Assessments are Determined (Article XIIIA)" herein).
(b) The values of unsecured personal property, state assessed utility property and unitary revenues
have been maintained throughout the projections at their 1999/00 levels (see "FINANCIAL
li"lFOR!'vIATION - Ta.'C Increment Revenues - Unsecured and Secured Property" and "Unitary
Property" herein).
(c) For the purposes of the projections, it was assumed that there would not be any value added to
the 1999/00 tax rolls as a result of changes in property ownership.
(d) For the purposes of the projections, it was assumed that the following value would be added to
the 1999/00 tax rolls as a result of new construction activity:
Project Area
Town Centre II
Southwest
Assessed Value
$3,250,000
$6,000,000
Tax Year
20011 02
2000/01
Development
Best Buy Electronics
Office Building
(e) A tax. rate equal to $1.00 per $100 of assessed value applied to the taxable property in the
Project Areas' was used to determine Tax Increment Revenues each year (see "FINANOAL
INFORMATION - Ta.'C Increment Revenues - Property Ta.'C Rate" herein).
(f) Projected Tax Revenues are net of amounts due pursuant to the Tax Sharing Agreements (see
"DEBT STRUCTURE - Ta.'C Sharing Agreements" herein).
(g) Projected Tax Revenues are net of amounts required to be set aside for Low and Moderate
Income Housing (see "THE AGENCY - Low and Moderate Income Housing" herein).
(h) Projected Tax Increment Revenues do not reflect delinquencies (see "FINA1'<CIAL
INFORMATION - Tax Increment Revenues - Tax CoUections" herein).
(i) Projected Tax Increment Revenues do not reflect any potential decreases resulting from pending
assessment appeals or future Proposition 8 adjusnnents, if any (see "THE PROJECT AREAS" and
"FINANOAL INFORMATION - Tax Increment Revenues - PropoSition 8 Adjustments" herein).
However, a successful appeal by Allied Waster Systems in the Otay Valley Road Project Area
granted in January, 2000 has been taken into account in Table No.2 (see "OTAY VALLEY
ROAD PROJECT AREA - Assessment Appeals" herein). In addition, the anticipated property tax
exemption for property owned by Scripps Health in the Town Centre II Project Area has been
taken into account in Table No. 1 (see "TOWN CENTRE IT PROJECT AREA - Description of the
Project Area" herein).
(j) Projected Tax Increment Revenues provide for a deduction for administrative costs charged by
San Diego County (see "FINANOAL INFORMATION - Ta.-.: Increment Revenues - Administrative
Costs" herein).
19
,()-,;2.3
,. ..,.
TABLE NO.1
CHUlA VISTA REDEVELOPMENT AGENCY
., TOWN CENTRE IT PROJECT AREA
PROJECTED TAX REVENUES AND BOND RETIRE.MENT
Bond Year Ta:< ,. County
En~g Increment Housing Pass-through .Admin Ta.~ Debt Coverage
Septembel" 1 . . Revenues Set-Aside . PaymentS ...... '\\'Charges' , Revenues ,. Service
""";.,:::";;.\ '.' ",,'-.--'-' -""",
.'. .-",-,,-.:., i',,"" ~"";<H."::"__;" -';
:,<;.....,-,:,..,.,
2000 923,000 (184.600) (13,000) 725,400
2001 973,000 (194,600) (13,000) 765,400 400,000 191%
2002 997 ,000 (199 ,400) (15,000) 782,600 415,000 189%
2003 1,021,000 (204 ,200) (17,000) 799,800 415,000 193%
2004 1,046,000 (209 ,200) (18,000) 818,800 415,000 197%
2005 1,071,000 (214,200) (19,000) 837,800 415,000 202%
2006 1,1J)7,OOO (219,400) (20,000) 857,600 415,000 2m %
2007 1,123,000 (224,600) (21,000) 877,400 415,000 211%
2008 1,150,000 (230,000) (22,000) 898,000 415,000 216%
2009 1,177,000 (235.400) (23.000) 918,600 415,000 221%
2010 1,177,000 (235,400) . (23,000) 918,600 415,000 221%
2011 1,177,000 (235,400) (23,000) 918,600 415,000 221%
2012 1,177,000 (235,400) (23,000) 918,600 415,000 221%
2013 1,177,000 (235,400) (23,000) 918,600 415,000 221%
2014 1,177,000 (235,400) (23,000) 918,600 415,000 221%
2015 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2016 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2017 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2018 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2019 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2020 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2021 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2022 ),177,000 (235,400) (156,000) .(23,000) 762,600 340,000 224%
2023 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2024 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2025 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2026 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2027 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2028 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
Source: Rod Gunn Associates, Inc.
The projected Tax Revenues shown above are subject to several variables described herein (see
"FINANCIAL INFORMATION _ Ta.~ Increment Revenues" herein). The Agency provides no assurance that
the Projected Tax Revenues will be achieved (see "BONDOWNERS' RISKS" herein).
20
j) -d-Y
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TABLE NO.2
CHULA VISTA REDEVELOPMENT AGENCY
OTA Y VALLEY ROAD PROJECT AREA
PROJECTED TAX REVENUES AND BOND RETIREMENT
. ..,;..........
. BondY~'
.....EDdingi .
Se~l..
.'- -",-"",-""-,.,,,"'''.,
Ta:<
Incr~itt
RevenueS
.. :.';::::;'::.\;: ,;-.: ::': .t,",:<;;:(~:~~::;
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
900,000
911,000
928,000
945,000
963,000
981,000
999,000
#11###11##
11111111####
###11####
#11#11####
#11######
#11#11##11#
###11####
#11#11####
#11#11####
#11######
#11#11####
#11#11##11#
###11####
###11####
########
#11#11####
########
#11######
#11######
########
#11######
###11####
#11######
H#HH#HHH
(1) Net of Capitalized Interest.
Source: Rod Gunn Associates, IIlC.
(180,000)
(182,200)
(185,600)
(189,000)
(192,600)
(196,200)
(199,800)
(203,600)
(207,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(211,400)
(8,500)
(9,000)
(10,000)
(11,000)
(11,000)
(11,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
(12,000)
711,500
719,800
732,400
745,000
759,400
m,800
787,200
802,400
817,600
833,600
833,600
833,600
833,600
833,600
833,600
833,600
833,600
833,600
833,600
833,600
833,600
833,6<lQ
833,600
833,600
833,600
833,600
833,600
833,600
833,600
833,600
833,600
160,000 (1)
460,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
490,000
159%
152%
155%
158%
161%
164%
167%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
170%
The projected Tax Revenues shown above are subject to several variables described herein (see
"FINANCIAL INFORMATION - Tax Increment Revennes" herein). The Agency provides no assurance that
the Projected Tax Revenues will be achieved (see "BONDOWNERS' RISKS" herein).
~
21
J)-,;)s-
TABLE NO.3
CHULA VISTA REDEVELOPl'tIENT AGENcY
SOUTHWEST PROJECT AREA
PROJECTED TAX ~VENUES AND BOND RETIREMENT
/~'i'::t..: .
Bond Year' Ta:"
Ending . ,', :',Increment
Septe~ 1..:RevenuES
.'-.:.
. . .,'Coun~.:
,.Housma Pass-through Achnin ;.
'.Set-Aside '.. l':lyimils ';!.;' .""
,_."",;:.,..,.,-::,,/",,::.;;C", ;"';:':::":!";":::"";:;:'::>':::":(;'~/i!,j<~,i\"!.'"
;.;:-,-:-, '.'-.'.:
. Debt . Coverage
.: Se~~"~lU~O;,
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
867,000
964,000
1.019,000
1,075,000
1,133,000
1,191.000
1,250,000
1,311.000
1.372,000
1,435,000
1,435.000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
1,435,000
(173,400)
(192,800)
(203,800)
(215 ,000)
(226,600)
(238,200)
(250,000)
(262,200)
(274,400)
(287 ,000)
(287,000)
(287,000)
(287 ,000)
(287 ,000)
(287,000)
(287,000)
(287,000)
(287,000)
(287,000)
(287,000)
(287 ,000)
('287,000)
(287,000)
(287 ,000)
(287,000)
('287 ,000)
(287,000)
(287 ,000)
(287,000)
(287 ,000)
(287,000)
Source: Rod Gunn Associates, Inc.
(356,000)
(382,000)
(406 ,000)
(431,000)
(456,000)
(482,000)
(508,000)
(535,000)
(562,000)
(590,000)
(596,000)
(601,000)
(607,000)
(613,000)
(619,000)
(625,000)
(632,000)
(638,000)
(645,000)
(651,000)
(658,000)
(665,000)
(672,000)
(679,000)
(687,000)
(694,000)
(702,000)
(710,000)
(717,000)
(726,000)
(735,000)
(11,000)
(11,000)
(12,000)
(14,000)
(16,000)
(18,000)
(20,000)
(23,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
('26,000)
(26,000)
(26,000)
(26,000)
('26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
(26,000)
.-,,- '," .
;:';::<:","',,:"':"
;-!....,.,.......
::~,
326,600
378,200
397,200
415,000
434,400
452,800
472,000
490,800
500,600
532,000
526,000
521,000
515,000
500,000
503,000
497,000
490,000
484,000
477,000
471,000
464,000
457,000
450,000
443,000
435,000
428,000
420,000
412,000
405,000
396,000
387,000
180,000
180,000
200,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
210%
nl%
208%
207%
216%
225%
234%
243%
253%
250%
248%
245%
242%
240%
237%
233%
230%
227%
224%
221%
218%
214%
211%
218%
214%
210%
206%
203%
198%
194%
The projected Tax Revenues shown above are subject to several variables described herein (see
"FINANCIAL INFORMATION. Tax Increment Revenues" herein). . The Agency provides no assurance that
the Projected Tax Revenues will be achieved (see ~BONDOWNERS' RISKS" herein).
22
D -d, r;.
THE AGENCY
Government Organization
The Agency is a public body, corporate and politic, existing under and by virtUe of the Redevelopment
Law. The Agency was activated in 1972, and is governed by a five-member board which consists of all
members of the City Council. The Chairman and Vice Chairman are appointed [0 a one-year term by
the Agency Board from among its members. The Agency's members and term expiration dates are as
follows:
AGENCY GOVERNING BOARD AND CITY COUNCIL.
Board Member Term Expires
Shirley G. Horton, Mayor and Chair December 2002
Patty Davis, Councilmember December 2002
John S. Moot, Councilmember December 2000
Stephen C. Padilla, Councilmember December 2002
Mary Salas, Councilmember December 2004
The City performs certain general administrative functions for the Agency. The City Manager serves
as the Agency's Executive Director and Secretary, and the Finance Director serves as Agency
Treasurer. The costs of such functions, as well as additional services performed by City Staff are
allocated annually to the Agency. The Agency reimburses the City for such allocated costs out of
available Tax Increment Revenues. Such reimbursement is subordinate to any outstanding loans, bonds
and indebtedness of the Agency. Current staff assigned to administer the Agency include:
KEY ADMINISTRATIVE PERSONNEL
David D. Rowlands, Jr. City Manager
Sid Morris Assistant City Manger
George Krempl Assistant City Manager
David Palmer Deputy City Manager
Robert Powell Deputy City ManagerlDirector of Finance
Chris Salomone Director of Co=unity Development
Lyle Haynes Assistant Director of Community Development
Susan Bigelow City Clerk
John Kaheny City Attorney
Agency Powers
All powers of the Agency are vested in its members. Pursuant to the Redevelopment Law, the Agency
is a separate public body and exercises gove=ental functions, including planning and implementing
the Project Areas.
The Agency may exercise the right to issue or incur loans, advances or other indebtedness for
authorized purposes and to expend their proceeds, and the 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. 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
thereon. The Agency may not construct or develop buildings, with the exception of public buildings
and housing, and IIUISt 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.
23
<l)-d). 7
Redevelopment Plan
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 specitically 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 Plan are to encourage inves=nt in the Project Areas by the private
sector. The Redevelopment Plans provide 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 Areas.
The City Council approved and adopted the Redevelopment Plan for the Town Centre II Project Area
on August 15, 1978. It was subsequently amended in May, 1987 to add fmancial provisions, on July
19, 1988 to add additional acreage, and on November 8, 1994 to add limitations prescribed by
Assembly Bill 1290 (" AB 1290") (see "Plan Limitations" below).
The City Council approved and adopted the Redevelopment Plan for the Otay Valley Road Project Area
on December 20, 1983. It was subsequently amended on November 8, 1994 to add limitations
prescribed by AB 1290.
The City Council approved and adopted the Redevelopment Plan for the Southwest Project Area on
November 27, 1990. It was subsequently amended on November 8, 1994 to add limitations prescribed
by AB 1290.
Plan Limitations
The Redevelopment Plans impose certain limitations on the amount of TiLX Increment Revenues that the
Agency may be allocated from each Project Area. The Redevelopment Plans also establish a date after
which no loans, advances of indebtedness may be issued or incurred. In addition, AB 1290 was
enacted by the State Legislature in 1994. Among other things, AB 1290 provides that a redevelopment
agency may not pay indebtedness or receive property taXes pursuant to Section 33670 of the
Redevelopment Law after 10 years from the termination of the effectiveness of a Redevelopment Plan
(which is now limited to 40 years after the adoption of such Redevelopment Plan).
The limitations imposed by the Redevelopment Plans andlor AB 1290 are as follows:
Town Centre II Otav Vallev Road Southwest
Maximum Tax Increment Revenues $100 million $115 million $15 million
annually
Maximum Bonded Indebtedness $42.5 million $45 million $150 million
Last Date to Incur Debt 1I1I20(j4<')17I19/2008(:) 11112004 1lI27/2010
Plan Expiration Date 8/15/2018(1)17/1912028'" 12/20/2023 11127/2030
Last Date to Collect Tax Increment Revenues 8/15/2028(1)1711912038'" 1212012033 1112712040
(I) Applicable to the area of the project area as originally adopted.
(2) Applicable to the area added by amendment to the redevelopment plan.
24
])- d 'if
..... ..,.
Capital Projects
Pursuant to the Law, the Agency may pay the costs of public buildings, facilities and 'improvements
subject to certain restrictions. However, pursuant to Section 33445 of the Redevelopment Law, for
redevelopment plans and amendments to 'redevelopment plans which add territory to a redevelopment
project, adopted after October 1, 1976, the acquisition of property for public improvements and the
installation or construction of each public improvement must be provided for in the redevelopment plan.
In addition, pursuant to Section 33445 of the Redevelopment Law, for each public improvement, either
within or outside a Project Area, the Agency is required to obtain the consent of the City Council after
the following is determined:
(a) That the buildings, facilities, structures, or other improvements are of benefit to the Project
Area or the i=ediate neighborhood in which the Project Area is located, regardless of
whether the improvement is within another redevelopment project; .
(b) That no other reasonable means of fmancing such buildings, facilities, structures, or other
improvements, are available to the co=unlty; and
(c) That the payment of funds for the acquisition of land or the cost of buildings, facilities,
structures, or other improvements will assist in the elimination of one or more blighting
conditions inside the project area or provide housing for low- or moderate-income persons, and
is consistent with the implementation plan adopted pursuant to Section 33490 of the
Redevelopment Law.
Low and Moderate Income Housing
General. The Redevelopment Law requires that for every redevelopment plan adopted on or after
January 1, 1977, or any area which is added to a project area by an amendment to a redevelopment
plan on or after January 1, 1977, not less than 20% of the taXes allocated to a redevelopment agency
pursuant to Section 33670 of the Redevelopment Law be set aside in a separate low and moderate
income housing fund to be used for the purpose of increasing and improving the supply of low and
moderate income housing available at an affordable housing cost unless the redevelopment agency
makes a finding annually by resolution made in accordance with the Redevelopment Law that:
(1) No need exists in the community to improve, increase or 'preserve the low and moderate income
housing; or
(2) A stated percentage less than twenty percent (20%) of the taxes is sufficient to meet the housing
needs of the co=unlty, including the needs of low or moderate income households and very
low income households.
Under the Redevelopment Law, the redevelopment agency bears the burden of establishing that any
such finding is supported by substantial evidence in light of the entire record before the redevelopment
agency i.n the event that any such finding is challenged.
25
b -d) J
.. ..,.
THE PROJECT AREAS
TOWN CENTRE n PROJECT AREA
Description of the Project Area
The Town Centre II Project Area encompasses approximately 212 acres of commercial, institutional
and municipal uses in eleven non-eontiguous areas of the City's central core. The Chula Vista Center,
a sixty-five acre regional shopping mall is located in the Town Centre II Project Area, as well as
Scripps Memorial Hospital and the City's Civic Center Complex and public works yard. The City has
invested significantly in the Project Area, financing a portion of the cost of public parking structures
utilized by the Chula Vista Center. The Chula Vista Center, located one-quarter mile from the 1-5
freeway and seven miles from both downtown San Diego and the international border, began in 1962 as
twO retail areas bisected by a city street. An expansion of the center closed the street and linked the
two areas by constructing an additional 140,000 square feet of leasable space. Together with the
anchor tenants of the center, Broadway Stores (now Macy's), Sears, Roebuck & Co. and 1. C.
Penneys, the total center consisted of 800,000 square feet of retail space. A further expansion was
undertaken in 1994, adding a 35,000 square foot 10-screen movie theater and Mervyn's department
store. Today, additional major tenants in the Chula Vista Center include Sam Goody, Waldenbooks,
Miller's Outpost and Foodocker. The current occupancy rate of the entire Chula Vista Center is
approximately _ %. The Chula Vista Center accounts for 50 % of the secured assessed value of the
Town Centre II Project Area and the anchor tenants comprise an additional 33 % of the secured assessed
value of the Town Centre II Project Area.
The Agency also assisted in development of the Wal Mart anchored 200,000 square foot South Bay
Marketplace shopping center, a portion of which is located in the Town Centre II Project Area. Wal
Mart developed its 149,000 square foot store in 1994. Best Buy electronics store will commence
construction in June, 2000 of its 44,000 square foot store in the South Bay Marketplace. The Agency
anticipates this new development will add $3,250,000 to the tax rolls in 2001102.
Scripps Memorial Hospital Chula Vista was established in 1964. The Scripps medical facilities are
located adjacent to as well as in the Town Centre II Project Area. A 40,000 square foot expansion was
completed by Scripps in 1999, which provides a full range of outpatient medical care, 24 hour
emergency care and lCU. Property owned by Scripps Health is exempt from property taX for tax year
1999/00, however, the tax roll shows taXable property owned by Scripps Health valued at $8,514,103.
The Agency expects this value to be exempt in future years. This anticipated exemption is taken into
account in "TABLE NO.1 _ TOWN CENTRE n PROJECT AREA PROJECTED TAX REVENUES AND BOND
RETIREMENT" .
The City's public works yard, a 7-acre parcel located in the Town Centre II Project Area, is currently
being marketed for development with office/retail uses.
26
.]) -30
T. ""1'
Secured Assessed Valuation by Land Use Category
Vacant Residential
1% 5%
Source: County of San Diego Anditor-Controller.
Major Taxpayers
CClIIllDercial
94%
The ten largest secured property taxpayers represem 98.5 % of the 1999/00 secured assessed value of
the Town Centre II Project Area, taking into account the anticipated. property taX exemption of the
Scripps Health property, currently valued. at $8.514 million.
TABLE NO. 4
TOWN CENTRE n PROJECf AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 1999/00 ASSESSED VALUE (1)
C V Centers LLC
Sears Roebuck & Company
Wal Mart Real Estate Business Trust
Federated Westem Properties
MelVyn's Cotpotation
McMillin Family Trust
Jubilee Umited Parmership
Charles & Janet Peter Trust
Joseph & Terri Sapp
Aero Drive Associates
Total
S 58.369,223
14,203,247
12.251,634
11,868,399
6,100.000
6,019,145
1.870,020
1,585,915
989,648
966.695
$ 114,223,926
50.3%
12.2%
10.6%
10.2%
5.3%
5.2%
1.6%
1.4%
0.9%
0.8%
98.5%
Regional Co=rcial
Retail
Retail
Retail
Retail
Apartments
Co=rcial
Co=rcial
Commercial
Co=rcial
0) Does not reflect assessmem appeals, bnt does reflect Scripps Health anticipated propeny tax exemption (see
"Assessment Appeals" below.
Source: County of San Diego Anditor-Controller.
1; "T
27
<./)-3/
Th~ following provid~s a d~scription of the largest taxpay~rs.
Regional Shopping Center, Chula Vista Center, owner. This center occupi~s 65 acres and is
dev~lop~d with over 350,000 square fe~t, exclusive of anchor depamnent stores, which total an
additional 561,000 square feet. The Agency assisted in financing a parking suucrure in conjunction
with an expansion of the center. In addition to depanment stores and mall shops, the center contains a
10-scre~n movie theater. The site is approximately one-quaner mile from the 1-5 freeway and seven
mil~s from both downtown San Diego and the international border. The current owner purchased the
center from Homan Development (a subsidiary of Sears, Roebuck & Company) in 19_.
Department Store, Sears, Roebuck and Company, owner. Located in the Chula Vista Center, the
Sears depamnent store contains 249,000 square feet of retail space on 15.5 acres. The Sears store has
been a pan of the .regional shopping center since its original development.
Retail Store, Wal Mart Real Estate Business Trust, owner. Located in the South Bay Marketplace
shopping center, the Wal Man store is 100,000 square feet and is developed on 13.5 acres. It was
constructed in 1995. The newly-constructed Best Buy electronics store, when constructed, will be
located adjacent to Wal Man.
Department Store, Federated Western Properties, owner. Located in the Chula Vista Center, the
Macy's deparonent store contains 150,000 square feet of retail space on 8.6 acres. Originally a
Broadway deparonent store, the deparonent store has been a part of the regional shopping center since
its original development.
Department Store, Mervyn's Corporation, owner. Located in the Chula Vista Center, the Mervyn's
department store contains 82,000 square feet of retail space on 5 acres. This department store was
constructed as a pan of the expansion of the center in 1994.
Assessment Appeals
[To be completed).
28
JJ-3;)
T' ..,.
Asse~sed Valuations
Assessed value of the Town Centre II Project Area has increased $21.8 million between fiscal years
1995/96 and 1999/00, an overall increase of 19% (see "FINANOAL INFORMATION - Ta~ Increment
Revenues - Historical Assessed Valuation and Ta.. Increment Revenues" herein).
TABLE NO.5
TOWN CENTRE IT PROJECT AREA
ASSESSED VALUATIONS (I>
1995/96 through 1999/00
In=rai Incre:lse S
Base Y= Value
TOla! Value
81,467,979
33.119.003
$ 114,586,982
S 96,037,114
33.306.955
$ 129,344,069
S 103,300,819
33,105.355
$ 136,406,174
S 94,884,445
33.306,955
$ 128,191,400
S 102,314,911
33.105,355
$ 135,420,266
(1) Does nO! reflect assessment appeals or Scripps Health property fa.. exemption (see "Assessment Appeals"
herein.
Source: County of San Diego Assessor.
TABLE NO.6
. TOWN CENTRE II PROJECT AREA
ANNUAL CHANGE IN INCREl'rfENTAL AND TOTAL ASSESSED VALUES (1)
1996/97 through 1999/00
20.0%
15.0%
10.0%
5.0%
0.0%
(5.0%)
17.9%
1996/97
1997/98
1998/99
1999/00
DTcta! Value IJlncremental Value
(1) Does not reflect assessment appeals or Scripps Health propeny tax e."temption (see "Assessment Appeals"
herein.
Source: County of San Diego Assessor.
29
.0-33
T' ..,.
OTAY V ALLEY ROAD PROJECT AREA
Description of the Project Area
The Otay Valley Road Project Area is an area of approximately 770 acres located in the southeastern
corner of the City, just to the east of the 1-805 Freeway. It was established in 1983 and is comprised
primarily of light industrial and warehouse uses. A portion of an existing landfIll overlaps the
boundaries of the Project Area and a former landfill site is also located in the Project Area. The
Project Area contains the Chula Vista Auto Park, which currently has 4 dealerships and is designed for
up to 10 dealerships. Adjacent to the Project Area is the Coors Amphitheatre and Knott'S Soak City
USA. The Agency anticipates that related entertairunent uses may develop on vacant land in the Project
Area surrounding the 20,000 seat outdoor amphitheatre, which opened in 1998 and is owned and
operated by Universal/MCA. Other uses in the Otay Valley Road Project Area consist of small
industrial parks, used for multi-tenant warehousing or light manufacturing. Manufacturers include
metal fabricators such as Gold Coast Engineering and Hyspan Precision ProductS, some of the City's
largest employers.
Commercial development, primarily automobile dealerships, comprises 13 % of the secured assessed
value of the Otay Valley Road Project Area. Industrial development, including the existing landfill, in
the Otay Valley Road Project Area comprises the majority of the land use, accounting for 76% of the
secured assessed value. The remaining 11 % of secured assessed value in the Otay Valley Road Project
Area is derived from vacant land, approximately 100 acres. This vacant acreage includes a 40 acre
former landfill site that has been recently purchased and remediated and is now available for
development. There are also 23 acres available for additional dealerships in the Chula Vista Auto Park,
as well as a 17 acre parcel adjacent to the freeway available for commercial development.
Sea1red Assessed Valuation by Land Use Category
Vacant
11%
Commercial
13%
Industrial
76%
Source: County of San Diego Auditor-Controller.
30
j) -0 r.f
~. ~
Major Taxpayers
The ten largest secured propeny taxpayers represent 66.6% of the 1999/00 secured assessed value of
the Otay Valley Road Project Area, taking into account that in January, 2000, Allied Waste Systems
was granted a $17 ,700,000 reduction in aSsessed value based on an appeal filed.
TABLE NO.7
OTA Y V ALLEY ROAD PROJECT AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 1999/00 ASSESSED VALlJE (1)
Panna Propeny Company $ 8.900.000 10.6% Warehouse
Allied Waste Systems 8.663,967 10.4% Landfill
DGF Family Limited Parmership 8,424,062 10.1% Cormn.ercial
BW Vista Limited Parmership 5,695,771 6.8% Warehouse
Otay Co=ercial Partners 5,282.220 6.3% Warehouse
Sutherland Palumbo 5,119,398 6.1% Manufacturing
505 Otay LLC 4.000,000 4.8% Warehouse
580 Auro Park Drive 3,750,000 4.5% Commercial
Arizona Maricopa Associates 3,274,405 3.9% Vacant Land
Donald Heye Trust 2.600.000 3.1% Manufacturing
Total $ 55,709,823 66.6%
(1) Reflects assessment appeal of Allied Waste Systems but no other assessment appeals (see "Assessment
Appeals" below.
Source: County of San Diego Auditor-Controller.
The following provides a description of the largest taxpayers.
Warehouses; Parma Property Company, owner. This taxpayer owns two warehouses in the
Brandywine industrial park area. The properties were purchased in 1998. Facilities are comprised of
one 70,000 square foot warehouse located on 4 acres and one 100,000 square foot warehouse located
on 5.8 acres. Both facilities were built in 1988.
Landfill; Allied Waste Systems, owner. A portion of a landfill overlaps the boundary of the Otay
Valley Road Project Area. A reduction in value of the facility was granted in January, 2000 and the
portion of the propeny located in the Project Area is currendy valued at approximately $8.66 million.
Automobile Dealership; DGF Family Limited Partnership, owner. This 8.3 acre propeny is
developed with Fuller Ford, Fuller Honda and Fuller Kia automobile dealerships which opened in
1994.
Warehouses; BW VISta Limited Partnership, owner. This taxpayer owns two warehouses in the
Brandywine industrial park area. The properties were purchased in 1998. Facilities are comprised of
one 81,500 square foot warehouse located on 5.6 acres and one 70,700 square foot warehouse located
on 6.3 acres. Both facilities were built in 1988.
31
<b -dO-
.,. .,
Industrial Park; Otay Commercial Partners, owner. This industrial park contains 6 separate
warehouse facilities totaling 157,500 square feet on 12.5 acres. The buildings were constructed in 1988
and purchased by the current owner in 1998.
Manufacturing Facility; Sutherland palumbo; owner. This manufacturing facility, located on 7
acres is leased to Gold Coast Engineering, an aerospace metal fabricator. The original facility was
expanded by 77 ,000 square feet in 1991 with the assiStallce of industrial development bonds.
Assessment Appeals
Allied Waste Systems was granted an appeal in January, 2000, which reduced the value of its propeny
holdings located in the Otay Valley Road Project Area by $17,700,000. This reduction is taken into
account in "TABLE NO.2 _ DTAY VALLEY ROAD PROJECT AREA PROJECTED TA.'{ REVENUES AND
BOND RETIREMENT". The County of San Diego reports that there are _ pending appeals for other
properties in the Otay Valley Road Project Area [to be completed).
32
j) -3 (p
~ .
~
Assessed Valuations
Between tiscal years 1995/96 and 1999/00, there has been an overall increase of 8 % in assessed
valuation, after giving affect to a $17.7 million reduction in the value of the Allied Waste Systems
property (see "FINANOAL INFORMATION - Ta...: Increment Revenues - Historical Assessed Valuation and
Ta." Increment Revenues" herein). There has been a significant amount of property ownership change
in the last two years, which accounts for the increasing assessed values.
TABLE NO.8
OTA Y VALLEY ROAD PROJECT AREA
ASSESSED VALUATIONS (1)
1995/% through 1999/00
lncre=ntallncre3se S
Base Year Value
Total Value
76,572, 112
18.431.119
S 95,003,231
S 70,365,268
18.431.119
S 88,'796,387
S 66,169,246
18.431.119
S 84,600,365
S 92,920,325
17.894.789
S 110,815,114
S 102,473,979
17.894.789
S U0,368,768
(1) Does not reflect assessment appeals.
Source: County of San Diego Assessor.
TABLE NO, 9
OTA Y VALLEY ROAD PROJECT AREA
ANNUAL CHANGE IN INCRE1'rIENTAL AND TOTAL ASSESSED VALVES (1)
1996/97 through 1999/00
20.0%
5.0%
13.7%
15.0%
10.0%
0.0%
(5.0%)
(10.0%)
1996/97
1997/98
1998/99
1999/00
OTotal Value mlncremcntal Value
(I) Reflects assessment appeals by Allied Waste Systems but no other assessment appeals.
Source: County of San Diego Assessor.
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SOUTHWEST PROJECT AREA
Description of the Project Area
The Southwest Project Area is an area of appro:<:imately 1,100 acres.. It was created in 1990 and is
zoned primarily for limited industrial and thoroughfare commercial projects. Existing commercial
development is generally neighborhood retail and existing industrial development uses include mini-
storage and light manufacturing. The tirst major new development to be completed in the Southwest
Project Area is the Palomar Trolley Center, a community retail center with national brand clothing
stores such as Old Navy and Ross Dress for Less, a grocery store, and warehouse retail uses such as
Office Depot and Party City. It is easily accessed by the San Diego Trolley System and was developed
with Agency assistance. The most recent development, the Family Resource Center, is a 75,000 square
foot office building developed by the Greenwald Company. This 2-story facility with attached
classrooms and conference center will be used by San Diego County Health and Human Services. It is
anticipated that this development will. add $6 million to the tax rolls in 2000/01.
In-fill residential development accountS for apprOldmately 26% of the secured assessed value of the
Southwest Project Area. Commercial and indUStrial development comprises 37% and 30%,
respectively of the secured assessed value of the Southwest Project Area. The remaining 7 % of secured
assessed value in the Southwest Project Area is derived from vacant land, comprising approximately 75
acres.
Seclred Assessed Valuation by Land Use Category
Industrial
30%
Vacant
7%
Residential
26%
Commercial
37%
Source: County of San Diego Auditor-Controller.
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Major Ta....payers
The ten largest secured property taxpayers represent 20.2% of the 1999/00 secured assessed value of
the Southwest Project Area. .
TABLE NO. 10
SOUl'HWEST PROJECf AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 1999/00 ASSESSED VALUE (I)
Cypress Creek Company S 18,263,260 6.8% Commercial Center
Marliskar Invesanents 6,939,825 2.6% Industrial
Navarra Jerome Family Trust 5,182,743 1.9% Commercial Center
Sentry Storage LLC 4,151,112 1.5% Mini storage
Laguardia Revocabie Trust 3,869,654 1.4% Commercial
Parma Storage Company 3,623,877 1.3% Mini storage
Marie F Williams 3,384,343 1.3% Commercial
Genesis South Properties 3.237,825 1.2% Connnercial
A Storage Place Associates 2,978,604 1.1% Mini storage
Oscar Davila Trust 2,895,000 1.1% Commercial
Total S 54,526,243 20.2%
(1) Does DOt reflect assessment appeals (see "Assessment Appeals" below.
Source: County of San Diego Auditor-Controller.
The following provides a descriptionot: the largest taxpayers.
Commercial Center; Cypress Creek Company, owner. This co=unity shopping center, Palomar
Trolley Center, contains 210,000 square feet of retail space with over 35 tenants. Major tenants
include Ralph's Grocery Store, Ross Dress for Less, Office Depot, Old Navy and Party City. The fIrst
phase was constructed in 1994 and the second phase was completed in 1996.
Industrial Buildings; Marliskar Investments, owner. This property is comprised of two light
industrial buildings, one 50,000 square foot building constructed in 1965 on 2.3 acres and one 100,000
square foot building constructed in 1970 on nine acres. They were purchased by the current owner in
1998.
Shopping Center; Navarra Jerome Family Trust, owner. This neighborhood center was constructed
in 1969. It contains 73,000 square feet of retail space on 5.8 acres. It was purchased by the current
owner in 1984.
WarehouseJMini Storage, Sentry Storage LLC, owner. This mini-storage facility comains 125,000
square feet, consisting of 14 buildings on nine acres with over 1400 rental units. It was constructed in
1985.
35
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Assessment Appeals
[T 0 be comp leted].
Assessed Valuations
Between fiscal years 1995/96 and 1999/00, there has been an overall increase of 13 % in assessed
valuation (see "FINANCIAL INFORll>IATION - Ta.." Increment Revenues - Historical Assessed Valuatiou and
Ta.." Increment Revenues" herein). There has been some property ownership change in the last two
years and new construction, accounting for the increasing assessed values.
TABLE NO. 11
SOUTHWESr PROJECf AREA
ASSESSED VALUATIONS (1)
1995/96 through 1999/00
lncren=tallnCIe3Se $
Base Year Value
Total Value
47,487,167
219.498.444
$ 266,985,611
$ 48,104,133
219.498,444
$ 267,61'/1.,577
$ 47,677,835
219.498,444
$ 267,176,279
$ 62,006,889
219.498,444
$ 281,505,333
$ 83.861,570
219.498.444
S 303,360,014
(1) Does not reflect assessment appeals (see "Assessment Appeals" above.
Source: County of San Diego Assessor.
TABLE NO. 12
SOUTHWEST PROJECf AREA
ANNUAL CHANGE IN INCREMENTAL AND TOTAL ASSESSED VALUES (1)
1996/97 through 1999/00
5.0%
0.2% 1.3%
(0.2%) (0.9%)
40.0%
35.0%
30.0%
2S.0%
20.0%
15.0%
10.0%
0.0%
(S.O'fot)
1996/97
1997/98
1998/99
1999/00
o Total Value iii Incremental Value
(1) Does not retlect assessment appeals (see "Assessment Appeals" above.
Source: County of San Diego Assessor.
36
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FINANCIAL INFORMATION
Agency Budgetary Process and Administration
The law requires redevelopment agencies' to adopt an annual budget containing the following:
(1) The proposed expenditures of the agency.
(2) The proposed indebtedness to be incurred by the agency.
(3) The anticipated revenues of the agency.
(4) The work program for the coming year, including goals.
(5) An examination of the previous years' achievements and a comparison of the achievements with
the goals of the previous years' work program.
All expenditures and indebtedness of the Agency are required to be in confotmity with the adopted or
amended budget.
The Executive Director of the Agency is responsible for preparing the proposed budget and submining
it to the Agency Governing Board. After reviewing the proposed budget at a public meeting, the
Agency Governing Board holds a public hearing. The Agency Governing Board adopts the budget
prior to the start of each fiscal year. The City Finance Director actS as Treasurer of the Agency and is
responsible for controlling expenditures within budgeted appropriations.
Public Employee Salaries and Benefits
The Agency contractS with the City to provide the Agency with staff.
Agency Accounting Records and Financial Statements
Every redevelopment agency is required to present an annual repon to its legislative body (being the
city council) within six months of the end of each fiscal year. The annual report is required, among
other things, to include an independent fmancial "audit report" and a fiscal statement for the previous
fiscal year. The California Health and Safety Code defines "audit repon" to mean an examination of
and opinion on the financial statements of the agency which presents the results of the operations and
fmancial position of the agency. The independent fmancial audit is required to be conducted in
accordance with generally accepted auditing standards and the rules governing audit reports
promulgated by the Governmental Accounting Standards Board. The independent financial audit report
is also required to include an opinion of the agency's compliance with laws, regulations and
administrative requirements governing activities of the agency. The California Health and Safety Code
requires the fIScal statement to contain the following information:
(1) The amount of outstanding indebtedness of the 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, other tha11 school or community college district.
(4) The financial transactions report required to be submitted to the State Controller.
37
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(5) The amJunt allotted to school or co[!]ll1unity college districts pursuant to the Redevelopment
Law.
(6) The amount of existing indebtedness and the total amount of payments required to be paid on
existing indebtedness for that tiscal year.
(7) Any other fIScal infonnation which the agency believes is useful to describe its programs.
In addition, the annual repon is required to include detailed information 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 and the Special Fund. The Indenture requires
the Agency to me 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 financial 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 Bondowner.
Basis of Accounting. The modified accrual basis of accounting is used by all gove=ental fund types
and agency funds. Under the modified accrual basis of accounting, revenues are recognized when
susceptible to accrual (Le., when they become both measurable and available). "Measurable" means
the amount of the transaction can be determined and "available" means collectible within the current
period or soon enough thereafter to be used to pay liabilities of the current period. The Agency
considers property taxes as available if they are collected within 60 days after year end. Expenditures
are recorded when the related fund liability is incurred. Principal and interest on general long-term
debt are recorded as fund liabilities when due.
Measurement Focus. All gove=ntal funds are accounted for on a spending or "financial flow"
measurement focus. Generally, this means that only current assets and current liabilities are included
on their balance sheets, with the exception that the non-on:rent portion of long-term receivables and
advances due to gove=ental funds are reponed on their balance sheets, offset by fund balance reserve
accounts. Statements of revenue, expenditures and changes in fund balances for gove=ental funds
generally present increases (revenues and other financing sources) and decreases (expenditures and
other financing uses) in current assets.
The Agency retained the firm of Calderon, Jaham & Osborn, Certified Public Accountants and
Consultants, San Diego, California, to examine the component unit financial statements of the Agency
as.of and for the fIScal year ended June 30, 1999, which are included as "APPENDIX C". The firm's
examination was made in accordance with generally accepted auditing standards and the "Guidelines for
Compliance Audits of California Redevelopment Agencies" issued by the State Controller. The firm
reported after their examination that the Agency's financial statements present fairly its financial
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, 1999.
Tax Increment Revenues
Tax Increment Revenues. As provided in the Redevelopment Plans for the 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 of California, taxes levied upon taxable property in a Project Area each year by or for the
benefit of the State, any city, county, city and county or other public corporation for fiscal years
beginning after the effective date of the ordinance adopting the Redevelopment Plan for the Project
Area, or any amendment with respect thereto, will be divided as followS:
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(a) That portion of the taxes which would be produced by th~ rate upon which the tax is levied
each year by or tor each of the taxing agencies upon the total sum of the assessed value of the
taxable property in the redevelopment project as shown.'.upon the assessment roll used in
connection with the taxation of that propeny by the taxing agency, last equalized prior to the
effective date of the ordinance, shall be allocated to and when collected shall be paid to the
respective taxing agencies as taxes by or for the taxing agencies on all other property are paid
(for the purpose of allocating taxes levied by or for any taxing agency or agencies which did
not include the territory in a redevelopment project on the effective date of the ordinance but to
which that territory has been annexed or otherwise included after that effective date, the
assessment roll of the county last equalized on the effective date of the ordinance Shall be used
in determining the assessed valuation of the taxable property in the project on the effective
date);
(b) Except as provided in subdivision (c), that portion of the levied taxes each year in excess of that
amount shall be allocated to and when collected shall be paid into a special fund of the
redevelopment agency to pay the principal of and interest on loans, moneys advanced to, or
indebtedness (whether funded, refunded, assumed, or otherwise) incurred by the redevelopment
agency to finance or refinance, in whole or in pan, the redevelopment project. Unless and until
the total assessed valuation of the taxable property in a redevelopment project exceeds the total
assessed value of the taxable property in that project as shown by the last equalized assessment
roll referred to in subdivision (a), all of the taxes levied and collected upon the ra.xable property
in the redevelopment project shall be paid to the respective taxing agencies. When the loans,
advances, and indebtedness, if any, and interest thereon, have been paid, all moneys thereafter
received from taxes upon the taxable property in such redevelopment project shall be paid to the
respective taxing agencies as taxes on all other property are paid; and
(c) That portion of the taxes in excess of the amount identified in subdivision (a) which are
attributable to a tax rate levied by a taxing agency for the purpose of producing revenues in an
amount sufficient to make annual repayments of the principal of, and the interest on, any
bonded indebtedness for the acquisition or improvement of real property shall be allocated to,
and when collected shall be paid into, the fund of that taxing agency. This subdivision applies
to taxes levied to repay bonded indebtedness approved by the voters of the taxing agency on or
after January 1, 1989.
Procedure for the Allocation and Payment of Ta.x 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.
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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 XlIIA). 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 ta;'{es that may be
levied against real property. This amendment, which added Anicle XlIIA to the State Constitution,
among other things, defines 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 ta;'{es 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 a recent amendment to
the California Constitution, redevelopment agencies are prohibited from receiving any of the ta}{
increment revenue attributable to taX rates levied to finance bonds approved by the voters on or after
January 1, 1989 (see "Property Ta't Rate" below).
In the general election held November 4, 1986, voters of the State of California approved two
measures, Propositions 58 and 60, which funher amend the terms "purchase" and "change of
ownership", for purposes of determining full cash value of property under Article XIllA, 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 parents and children. Proposition 60 amends Article XIllA
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.
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 for the 1983/84, 1995/96 and 1996/97 fiscal
years. For the 1983/84 fiscal year, the annual increase for inflation was 1 %; for the 1995196 fiscal
year, the annual increase for inflation was 1.19%; and for the 1996/97 fiscal year, the annual increase
for inflation was 1.11 %, reflecting the actual increase in the State Consumer Price Index, as reponed
by the State Department of Finance.
The projections contained in Table Nos. 1, 2 and 3 "PROJECTED TAX REVENUES AND BOND
RETIREMENT" herein are based on the assumption that intlation will be at least two percent
annually in future years. In accordance with this assumption, the projection of Ta."{ Increment
Revenues in such tables includes a two percent annual valuation increase for e..usting real property
on the secured property assessment roll.
As described above, the full cash value of property is redetermined with each change of ownership.
There is not adequate statistical data for smaller geographical areas such as the Project Areas to reliably
project increases in assessed valuation due to changes in propeny ownership. Therefore, the
projections of Ta."{ Increment Revenues in Table Nos. 1, 2 and 3 "PROJECTED TAX REVENUES AND
BOND RETIREMENT" herein are based upon the assumption that there will not be any value added
to the tax rolls as a result of changes in property ownership.
40
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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 inllation factor determined pursuant to Anicle XIIIA, or its full cas~ value as of the lien date,
taking into account reductions in value due to damage, destruction, ob.solescence or other factors
causing a decline in market value. Full cash value, sometimes referred to as market value, is affected
by llucruations in the real estate market, fluctuations in interest rates, unexpected increases in
development costs and other factors. Reductions based on Proposition 8 do not establish new base year
values, and the property may be reassessed the following lien date up to the lower of the then-current
fair market value or the factored base year value. Because of generally adverse economic conditions
affecting the real estate market, many localities in California have experienced cenain declines in
assessed values as a result of Proposition 8 property owner appeals or blanket adjusnnents made by the
County Assessor to property changing ownership or newly built since 1988.
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 cenain 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.
For the purpose of projecting Ta.x Increment Revenues in Tables Nos. 1, 2 and 3 "PROJECTED TA..X
REVENUES AND BOND RETIREMENT" herein, the unsecured property assessment roll was assumed
to remain constant at the level shown on the 1999/00 assessment roll.
Property in the Project Areas 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. Insrallments 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. .
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:
(1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying
cenain facts in order to obtain a judgment lien on cenain 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 cenain
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 to the State for the amount of taXes 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, 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 tide
remains in the owners as taXpayers subject to a lien in favor of the State. The amount necessary to
redeem the property is equal to the sum of the delinquent taXes, delinquency penalties and redemption
penalties of 1'h % 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.
41
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A 10% penalty also attaches to cielinquent taxes with respect to property on the unsecured roll, and
further, an additional penalty of.l v,% per month accrues with respect to such taxes beginning the tlrst
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 of the change of ownership or completion of new
construction.
Supplemental Assessments are not included in the Table Nos. 13, 14 and 15 "HISTORICAL
ASSESSED VALUATION AND TAX INCREl'\-IENT REVENUES" herein. In addition, because
Supplemental Assessments cannot be projected, Supplemental Assessments are not included in the
projections of Tax Increment Revenues in Table Nos. 1, 2 and 3 "PROJECTED TAX REVENUES AND
BOND RETIRE!\iIENT" herein.
Unitary Property. Commencing in the 1988/89 fiscal year, the Revenue and Ta;o.tion Code of the
State of California changed the method of allocating property taX revenues derived from stare assessed
utility properties. Ir provides for the distribution of state assessed values to tax rare areas by a county-
wide mathematical formula rather than assignment of state assessed value according ro the location of
those values in individual rax rate areas.
Co=encing with the 1988/89 fIScal year, each county has established one county-wide tax rare area.
The assessed value of all unitary property in the county has been assigned to this rax rate area and one
taX rate is levied against all such property ("Unitary Revenues").
The property rax revenue derived from the assessed value assigned to the county-wide rax rate area
shall be allocared as follows: (1) 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.
Tauble values for properties assessed by the State Board of Equalization, the tax rate levied
against such property and the corresponding Unitary Revenues have been held constant at
1999/00 levels for the purpose of projecting Tax Increment Revenues in Table Nos. 1 and 2
"PROJECTED TA..'{ REVENUES AND BOND RETIREMENT" herein.
Property Tax Rate. There are numerous rax rate areas within the Project Areas. The differences
between the $1.00 ta;'( rate and those actually levied (referred to as the "rax override rare") represents
the rax levied by overlapping entities to pay debt service on bonded indebtedness approved by the
voters.
Tax override rares typically decline each year. A declining tax override rare 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 rax 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.
42
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Far tiscal year 1999/00, the tax rate, including the taX override rate, for the majoriry of the property in
the Project Areas is $1.009 per $100 of taxable value. Future Tax Increment R.evenues have been
projected in Table Nos. 1,2 and 3 "PROJECTED TAX REVENUEs AND BOND RETIREMENT" herein by
applying the general levy ($1.00 per $109 of taxable value) to incremental taxable. "aiues.
',.1 .
Administrative Casts. 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 1999/00 the County
charged administrative fees totaling $13,000 to the Town Centre II Project Area, $8,500 to the Otay
Valley Road Project Area and $11,000 to the Southwest Project Area. The projections of Tax
Increment Revenues take administrative casts into account.
Historical Assessed Valuation and Tax Increment Revenues. The following tables show taxable
values and Tax Increment Revenues for the Project Area for fiscal years 1995/96 through 1999/00.
TABLE NO. 13
TOWN CENTRE II PROJECT AREA
mSTORICAL ASSESSED VALUATION AND TAX INCREJ.'\-IENT REVENUES *
S:cuIed (1) S 101.888,890 S 115.989,759 S 115,109,300 S 117,949,060 S 124,537,450
Unsecured (I) 12.698.092 13.354.310 13.082.100 17,471.206 11.868.724
Total (2) S 114,586,982 S 129,344,069 S 128,191,400 S 135,420,266 S 136,406,174
Less: Base year (3) (33.119,003) (33306.955) (33.306.955) (33.105.355) (33,105.355)
Iocrem:nta1 Increase S 81,467,979 S 96,037,114 S 94,884,445 S 102,314,911 S 103,300,819
Tax Rate 1.010112% 1.010155% 1.010059% 1.009962% 1.009903 %
Tax lncrem:nt Revames S 822.918 S !170,124 S 958,388 S 1,033,342 S 1.043,238
Unitary Revames (4) 2.098 2.088 2,648 629 614
Tot& Tax RevemJeS (5) S 825,016 S 972,212 S 961,036 S 1,033,971 S 1,043,852
Does not reflect the anticipated Scripps Health property tax exemption ( see "TOWN CE'<1RE II PROJEcr
AREA - Description of the Project Area").
(1) Taxable Valuation at 100% of Assessor's Market Value, as of August 20 equalized roll.
(2) San Diego County Auditor-Controller's Office.
(3) Base year assessed values may vary from year to year based on changes in property ownership
of agencies exempt from property tax.
(4) See "Unitary Property" herein for a discussion of the method of allocating Unitary Revenues.
(5) The "Total Tax Revenues" are based on data furnished by the San Diego County Auditor-
Controller's Office. ActUal Tax Increment Revenues received vary from Tax Increment
Revenues because of supplemental taxes, appeals or refunds, deductions for delinquencies and
tax-sharing agreements and administrative charges by the County.
Source: San Diego Couney Auditor-Conuoller.
*
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*
(1)
(2)
(3)
TABLE NO. 14
OTA Y V AI,LEY itOAD PROJECT AREA
HISTORICAL ASSESSED VALUATION AND TAX INCREl'YIENT REVENUES.
1995/96
1996/97
.. ;1997198
1998/99
1999/00 ..'
S<c=d (1) S 74,052.220 S 68,275,320 S 65,658.423 S 91.982.421 S 10\,303,630
Uosecured (I) 20.951.011 20.521.067 18.941.942 18.832.693 19.065.138
Total (2) S 95,003,231 S 88,796,387 S 84,600,365 S 110.815,114 S 120,368,768
1.J:ss: Base y= (3) (18.431.119) (18.431.119) (18.43UI9) (17.894.789) (17,894.789)
Incr=tallncrc>se S 76,572. 112 S 70.365,268 S 66,169,246 S 92,920,325 S 102,473,979
Tax Rare 1.010138 % 1.010143% 1.010091 % 1.009987% 1.009369%
Tax In=t Revenues S m,484 S 710,790 S 668,369 S 938,483 S 1.034,341
Unitary Revenues (4) 50.478 50.221 51.566 46,085 44.989
Total Tax Revenues (5) S 823,962 S 761,011 S 719,935 S 984,568 S 1,lli9,330
Does not reflect the assessment appeal granted to Allied Waster Systems in January, 2000 (see "OTAY
VALLEY ROAD PROJECT AREA - Assessment Appeals").
Taxable Valuation at 100% of Assessor's Market Value, as of August 20 equalized roll.
San Diego County Auditor-Controller's Office.
Base year assessed values may vary from year to year based on changes in property ownership
of agencies exempt from property taX.
See "Unitary Property" herein for a discussion of the method of allocating Unitary Revenues.
The "Total Tax Revenues" are based on data furnished by the San Diego County Auditor-
Controller's Office. Actual Tax Increment Revenues received vary from Tax Increment
Revenues because of supplemental taXes, appeals or refunds, deductions for delinquencies and
tax-sharing agreementS and administrative charges by the County.
Source: San Diego Counry Auditor-Conlroller.
(4)
(5)
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TABLE NO. IS
SOUTHWEST PROJECT AREA
mSTORICAL ASSESSED VALUATION AND TAX INCREI.I<IENT REVE/IllJES
1995196
1996I97
1999100
S<cured (1) S 247,533.117 S 248.629,822 S 249,783.551 S 258.196.443 S 269,261.990
Unsecured (1) 19.452.434 18.972.755 17.392.728 23.308.890 34.098.024
Total (2) S 266,985.611 S 201,fJJ2.5n S 201,176;;:19 S 281.505,333 S 303,360,014
Less: Base year (3) (219.498.444) (219,498.444) (219.498.444) (219.498.444) (219.498.444)
Inc:I1:mntaI In=e S 47,487,101 S 48,104,133 S 47.617,835 S 62.006,889 S 83,861,570
Ta.x Rale 1.010112% 1.010161% 1.010151% 1.010155% 1.010082 %
Ta.x lm:rem:nt Revenues S 479,014 S 485 ,929 S 481,618 S 626,366 S 847.071
Unitary Revenues (4) 259 258 252
Total Tax Revenues (5) S 479,674 $ 485,929 $ 481,877 $ 626,624 S 847,323
(1) Taxable Valuation at 100% of Assessor's Market Value, as of August 20 equalized roll.
(2) San Diego County Auditor-Controller's Office.
(3) Base year assessed values may vary from year to year based on changes in property ownership
of agencies exempt from property tax.
(4) See "Unitary Property" herein for a discussion of the method of allocating Unitary Revenues.
(5) The "Total Tax Revenues" are based on data furnished by the San Diego County Auditor-
Controller's' Office. Actual Tax Increment Revenues received vary from Ta.,<: Increment
Revenues because of supplemental taxes, appeals or refunds, deductions for delinquencies and
tax-sharing agreements and administrative charges by the County.
Source: San Diego County Auditor-<:oncroller.
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Tax Collections. Tax Increment Revenues distrib.lted to the Agency are adjusted for delinquencies in .
the payment of taxes, tax roll corrections, supplemental assessments and collection of prior year
delinquencies. The tables below represents Tax Increment Revenues allocated 10 and paid to the Agency
and the distribution rates as a percent of the original tax levy.
TABLE NO. 16
TOWN CENTRE n PROJECT AREA
TAX COLLECTIONS
Original Ta.'t Levy $ 972,212 $ 961,036 $1,033,971
Receivables (20,768) (18,083) (19,284)
Supplemental Assessments 100,453 9,490 29,151
Corrections/Refundsl Adjustments (27,531) (4,533) (3,653)
Prior Year Collections 29,476 38,462 27,469
Tax Increment Revenues Distributed (1) $ 1,053,842 $ 986,372 $1,067,654
Percent of Ori2ina1 Le Distributed 108.4% 102.6% 103.3%
(1) Prior to payments due under Tax Sharing Agreement and deposit to Low and Moderate Income Housing
Fund.
TABLE NO. 17
OTAYVALLEY ROAD PROJECT AREA
TAX COLLECTIONS
Original Tax Levy $ 761,011 $ 719,935 $ 984,568
Receivables (15,762) (12,890) (15,683)
Supplemental Assessments (34,003) 60,063 100,581
CorrectionslRefundsl Adjustments (23,322) (7,623) (14,665)
Prior Year Collections 27,710 28,036 19.144
Tax Increment Revenues Distributed (1) $ 715,634 $ 787,521 $1,073,945
Percent of Ori.maI Lev Distributed 94.0% 109.4% 109.1%
(1) Prior to deposit to Low and Moderate Income Housing Fund.
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TABLE NO. IS
SOUTHWEST PROJECf AREA
TAX COLLECTIONS
Original Tax Levy $ 481,877 $ 626,624 $ 847,323
Receivables (10,726) (9,189) (10,072)
Supp1emencal Assessments 28,897 27,718 55,757
CorrectionslRefundsl Adjustments (18,993) (5,700) (4,452)
Prior Year Collections 17 ,327 19,436 14,062
T a:< Increment Revenues Distributed (1) $ 498,382 $ 658,889 $ 902,618
Percent of Oril!inal Le Distributed 103.4% 105.1 % 106.5%
(1) Prior to paymentS due under Tax Sharing AgreementS and deposit to Low and Moderate Income Housing
Fund.
Ta..'{ Sharing Agreements
Pursuant to former 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 co=only referred to as "taX sharing agreements" or "pass-through
agreements". Agreements entered into by the Agency pursuant to said Section 33401(b) are described
below and are referred to herein as the "Tax Sharing Agreements", (see "TABLE NOS. 1, 2 and 3 -
PROJECTED TAX REVENUES AND BOND RETIREMENT" herein).
Town Centre II Project Area
County of San Diego. The Agency has entered into a Tax Sharing Agreement with the County of San
Diego. Pursuant to the agreement, the Agency is required to reimburse the County 13.25% of Ta;'{
Increment Revenues allocated to the Town Centre II Project Area, beginning in the 26'" year of the
Redevelopment Plan (2014/15).
Otay Valley Road Project Area
There have been no Tax Sharing Agreements entered into with respect to the Oeay Valley Road Project
Area.
Southwest Proiect Area
County of San Diego. The Agency has entered into a Tax Sharing Agreement with the County of San
Diego. Pursuant to the agreement, the Agency is required to reimburse the County for the amount of
Tax Increment Revenues generated by the County's share (27.15%) of the compounded 2% annual
inflationary growth in assessed value over the base year amount. In addition, the Agency will reimburse
the County for 66.67 % of the County's share of Tax Increment Revenues generated in excess of the 2 %
annual inflationary growth, reduced by 20% of such amounts required to be deposited in the Agency's
Low and Moderate Income Housing Fund.
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Sweetwater Union High School District. The Agency has entered into a Ta.~ Sharing Agreement with
the Sweetwater Union High School District. Pursuant to the agreement, the Agency is required to
reimburse the District 40% of itS 17.95% share of Tax Increment Revenues allocated to the Southwest
Project Area.
Southwestern Community College District. The Agency has entered into a Tax Sharing Agreement
with the Southwestern Community College District. Pursuant to the agreement, the Agency is required
to reimburse the District 40 % of itS 4.83 % share of Tax Increment Revenues allocated to the Southwest
Project Area.
San Diego County Office of Education. The Agency has entered into a Tax Sharing Agreement with
the San Diego County Office of Education. Pursuant to the agreement, the Agency is required to
reimburse the Office 62.5 % of its 1.62 % share of Tax Increment Revenues allocated to the Southwest
Project Area.
Chula Vista Elementary School District. The Agency has entered into a Tax Sharing Agreement with
the Chula Vista Elementary School District. Pursuant to the agreement, the Agency is required to
reimburse the District 40 % of its 27.45 % share of Tax Increment Revenues allocated to the Southwest
Project Area. .
The Agency will also reimburse all taxing agencies in the Southwest Project Area for Tax Increment
Revenues attributable to voter-approved indebtedness.
,,,,-
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DEBT STRUCTURE
Outstanding Indebtedness of the Town Centre II Project Area
The Town Centre II Project Area had the following outstanding indebtedness as of May 1,2000:
.. 'CategoryoC
. Indebtedness
Amount ',....,,, .<.:,Fmal . . ".
Oui:sianiing fvfaturity .
:" ::;:: :_:L.;:!;::t~:~./~::o~,:;::.f.":' . -. ,.,,-,-~.,
,,',' ,c':>;--" -",-
"',;",
(1) Advances from the City - General Fund
(2) Reimburserrem Agreerrem with City
(3) Advances from the Ageocy - Bayfrom Project
(4) Reimburserrem - Housing Fund
$ 610,960
12,228,205
3,681,667
155,605
$ 610,960
12,228,205
3,681,667
155,605
N/A
N/A
N/A
2001
(1) The City has advanced funds to the Agency to finance certain operations. The Agency intends
to repay this advance with proceeds of the Town Centre II Project Bonds.
(2) The Agency entered into a reimbursement agreement with the City to reimburse the City for
debt service paid on the City's 1993 Cenificates of Participation, used to finance a public
parking facility located in the Town Centre II Project Area. Repayment of this obligation plus
interest is to be made as funds become available and is subordinate to the Town Centre II
Project Bonds.
(3) The Agency's Bayfront Project Area has advanced funds to the Town Centre II Project Area to
finance certain operations. The Agency intends to repay this advance with proceeds of the
Town Centre II Project Bonds.
(4) In 1994, the Low and Moderate Income Housing Fund made a loan to the Town Centre II
Project Area. The Housing Fund Reimbursement has a lien on the Tax Revenues subordinate
to the Town Centre II Project Bonds.
Outstanding Indebtedness of the Otay Valley Road Project Area
The Gray Valley Road Project Area had the following outstanding indebtedness as of May 1, 2000:
(1) Advances from the Ageocy - Bayfront Project
$ 11,465,848 $ 11,465,848
N/A
(1) The Agency's Bayfront Project Area has advanced funds to the Gtay Valley Road Project Area
to tinance certain operations. The Agency intends to repay a portion of this advance with
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proceeds of the Gtay Valley Road Project Bonds. Repayment of this balance of this obligation
plus interest is to be made as funds become available and is subordinate to the Qtay Valley
Road Project Bonds. .
Outstanding Indebtedness of the Southwest Project Area
The Southwest Project Area had the following outstanding indebtedness as of May 1,2000:
(1) Advances from the Agert:;y - Bayfront Project $
(2) Advances from the Ageocy - Olay Valley Project
(3) Advances from the City - General Fund
(4) Advances from the City - Sewer Fund
717,544 $
300,450
671,144
1,043,391
717,544
300,450
671,144
1,043,391
N/A
N/A
N/A
N/A
(1) The Agency's Bayfront Project Area has advanced funds to the Southwest Project Area to
fmance cenain operations. The Agency intends to repay a portion of this advance with
proceeds of the Southwest Project Bonds. Repayment of this balance of this obligation plus
interest is to be made as funds become available and is subordinate to the Southwest Project
Bonds .
(2) The Agency's Otay Valley Road Project Area has advanced funds to the Southwest Project
Area to fInance cenain operations. The Agency intends to repay a portion of this advance with
proceeds of the Southwest Project Bonds. Repayment of this obligation plus interest is to be
made as funds become available and is subordinate to the Southwest Project Bonds.
(3) The Agency entered into a disposition and development agreement with Cypress Creek Co. for
the reimbursement of an amount equal to one-half of the sales tax generated by the Palomar
Trolley Center and received by the City's GeneraJ. Fund. The agreement has no lien on Tax
Increment Revenues of the Southwest Project Area. The City has been advancing funds to the
Southwest Project Area to make the payments due under the agreement. Repayment of this
obligation to the City's General Fund is to be made as funds become available and is
subordinate to the Southwest Project Bonds.
(4) The City's Sewer Fund has advanced funds to the Agency to fmance cenain operations. The
Agency intends to repay this advance with proceeds of the Town Centre II Project Bonds.
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Scheduled Debt Service on the Town Centre II Project Bonds
The following is the scheduled Debt Service on the Town Centre II Project Bonds.
Interest Payment Date Principal Interest Annual Debt Service
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Scheduled Debt Service on the Otay Valley Road Project Bonds
The following is the scheduled Debt Service on the Gray Valley Road Project Bonds.
Annual Debt Service
Interest Payment Date
Principal
Interest
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Scheduled Debt Service on the Southwest Project Bonds
The following is the scheduled Debt Seryice on the Southwest Project Bonds.
Interest Pavrnent Date Principal Interest Annual Debt Service
.
'.'
,
-.'
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Additional Agency Indebtedness
. Parity Debt. The Agency may issue or incur "Parity Debt", including any loans, bonds, notes;
advances or indebtedness payable from .Tax Revenues on a parity basis with the respective series of
Bonds, subject to the following specitic conditions.
The Trustee shall receive, prior to the delivery of any Parity Debt:
(a) The Agency shall be in compliance with all covenants set forth in the applicable Indenture and
all Supplemental Indenrores.
(b) As applicable:
(i) With respect to the Town Cenue II Project Area, the Tax Revenues estimated to be
received for the then current Fiscal Year based upon the most recent assessed valuation
of property within the Town Cenue II Project Area as evidenced in wrinen
documentation from an appropriate official of the County, plus (at the option of the
Agency) the Additional Revenues, shall be at least equal to one hundred seventy-five
percent (175%) of Ma.'timum Annual Debt Service on all Town Cenue II Project Bonds
which will be Outstanding immediately following the issuance of such Parity Debt; or
(ii). With respect to the Otay Valley Road Project Area, the Tax Revenues estimated to be
received for the then current Fiscal Year based upon the most recent assessed valuation
of property within the Otay Valley Road Project Area as evidenced in wrinen
documentation from an appropriate official of the County, plus (at the option of the
Agency) the Additional Revenues, shall be at least equal to one hundred fifty percent
(150%) of Maximum Annual Debt Service on all Otay Valley Road Project Bonds
which will be Outstanding i=ediately following the issuance of such Parity Debt; or
(ill) Ylith respect to the Southwest Project Area, the Tax Revenues estimated to be received
for the then current Fiscal Year based upon the most recent assessed valuation of
property within the Southwest Project Area as evidenced in wrinen documentation from
an appropriate official of the County, plus (at the option of the Agency) the Additional
Revenues, shall be at least equal to one hundred twenty-five percent (125 %) of
Maximwn Annual Debt Service on all Southwest Project Bonds which will be
Outstanding immediately following the issuance of such Parity Debt.
(c) The Supplemental Indenrore providing for the issuance of such Parity Debt shall provide that
interest thereon shall not be payable on any dates other than March 1 and September 1, and
principal thereof shall be payable on September 1 in any year in which principal is payable.
(d) The Supplemental Indenture providing for the issuance of such 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 Parity Debt shall not cause the Agency to exceed any applicable Plan
Limitations.
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(t) In the event that such. Parity Debt shall bear interest at a variable rate, (i) for purposes of
meeting the requirements of the preceding clause (b), such. Parity Debt sh.all be assumed to bear
interest at a fIxed rate equal to the maximum rate permitted to be borne by such. Parity Debt
under the Supplemental Indenture providing for the issuance thereof, and (ii) for purposes of
meeting the requirements of the preceding clause (d); such Parity Debt shall be assumed to bear
interest at a fL"Ced rate equal to the most recently published 25 Bond Revenue Index in The Bond
Buyer (or, if such index is not published as of the date of issuance of such Parity Debt, in the
most recent publication of a comparable index selected by the Agency) plus fIfty (50) basis
points.
(g) The Agency shall deliver to the Trustee a Certificate of the Agency (which. may be based in
pan on an opinion of Bond Counsel), that the conditions precedent to the issuance of such
Parity Debt set forth in the Indenture have been satisfIed.
Subordinate Debt. In addition to the Bonds and any Parity Debt, from time to time the Agency may
issue or incur Subordinate Debt in such principal amount as may be determined by the Agency,
provided that the issuance of such Subordinate Debt will not cause the Agency to exceed any applicable
Plan Limitations.
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SUMMARy OF THE INDENTURES
TIle following is a summary of cenain provisions of the Indentures and does not purpon to be a
complete resuuement thereof Reference is hereby made to the Indentures for the complete terms
thereof Copies of the Indentures are available from the Agency upon request.
Establishment of Funds
Special Fund; Deposit of Ta't Revenues. The Agency will establish and hold a Special Fund, separate
and apart from other accounts of the Agency, and will deposit into it all of the respective Tax Revenues
received in any Bond Year promptly upon receipt, until such time during such Bond Year. as the
amounts on deposit in the applicable Special Fund equal the aggregate amounts required to be
transferred to the Trustee for deposit into the Interest Account, the Principal Account, the Sinking
Account, Reserve Account, and the Redemption Account in such Bond Year as described below and for
deposit in such Bond Year in the funds and accounts established by any Supplemental Indenmre for any
Parity Debt with respect to a series of Bonds. All Tax Revenues received by the Agency during any
Bond Year in excess of the amount required to be deposited in the Special Fund during such Bond Year
will be released from the pledge and lien of the Indenmre for the security of the applicable series of
Bonds.
Debt Service Fund. For each respective series of Bonds, the Trustee will establish and hold the Debt
Service Fund. The Agency will transfer moneys in the respective Special Fund to the Trustee in the
following amounts at the following times, for deposit by the Trustee in the following respective special
accounts within the Debt Service Fund, in the following order of priority:
(a) Interest Account. On or before the Business Day preceding each date on which interest on the
Bonds is due and payable, the Agency will withdraw from the Special Fund and tranSfer to the
Trustee for deposit in the Interest Account an amount which, when added to the amount then on
deposit in the Interest Account, will be equal to the aggregaIe amount of the interest coming
due and payable on the outstanding Bonds and any Parity Debt on such date. Subject to certain
rights of the Trustee, all moneys in the Interest Account will be used and withdrawn by the
Trustee solely for the purpose of paying the interest on the Bonds and any Parity Debt as it
comes due and payable.
(b) Principal Account. On or before the Business Day preceding each date on which principal of
the Bonds is due and payable at mamrity, the Agency will withdraw from the Special Fund and
transfer to the Trustee for deposit in the Principal Account an amount which, when added to the
amount then on deposit in the Principal Account, will be equal to the amount of principal
coming due and payable on SJlch date on the outstanding Bonds and any Parity Debt. Subject to
certain rights of the Trustee, all moneys in the Principal Account will be used and withdrawn
by the Trustee solely for the purpose of paying the principal of the Bonds and any Parity Debt
upon the mamrity thereof.
(c) Sinking Account. On or before the Business Day preceding each date on which any outstanding
term Bonds become subject to mandatory Sinking Account redemption, the Agency will
withdraw from the Special Fund and transfer to the Trustee for deposit in the Sinking Account
an amount which, when added to the amount then contained in the Sinking Account, will be
equal to the aggregate principal amount of the term Bonds and any Parity Debt subject to
mandatory Sinking Account redemption on such date. Subject to certain rights of the Trustee,
all moneys on deposit in the Sinking Account will be used and withdrawn by the Trustee for the
sole purpose of paying the principal of the term Bonds and any Parity Debt as it comes due and
payable upon the mandatory Sinking Account redemption thereof.
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(d) R~serve Account. In the ~v~nt of a deticiency in the R~serve Account, the Trustee will
promptly notify the Agency of such fact. Promptly upon r~ci:ipt of any such notice, the Agency
will restore such deticiency from Tax Revenues as soo,!- as P9ssible. Subject to certain rights of
the Trustee, amounts in the Reserve Account will be used a,nd withdrawn by the Trustee solely
for the purpose of making transfers to the foregoing accounts on any date which the principal of
or interest on the Bonds and any Parity Debt becomes due and payable, in the event of any
deticiency at any time in any of such accounts, or for the retirement of all the Bonds
Outstanding. Amounts in the Reserve Account in excess of the Reserve Requirement will be
transferred to the Interest Account.
The Agency has the right at any time to release funds from the Reserve Account, in whole or in
part, by tendering to the Trustee a Qualified Reserve Account Credit Instrument, and certain
other documents as specified in the Indenture; whereupon the Trustee will transfer amounts on
deposit in the Reserve Account to the Agency to be used for authorized purposes. Upon the
expiration of any Qualified Reserve Account Credit InstI1lI1lent, the Agency will either (i)
replace such Qualified Reserve Account Credit Instrument with a new Qualified Reserve
Account Credit Instrument, or (ii) deposit or cause to be deposited with the Trustee an amount
of funds equal to the Reserve Requirement, to be derived from the first available Tax
Revenues.
(e) Redemption Account. On or before the Business Day preceding each date on which any
outstanding Bonds become subject to redemption, other than Sinking Account redemption, the
Agency will withdraw from the Special Fund and transfer to the Trustee for deposit in the
Redemption Account an amount required to pay the principal of and premium, if any, on the
Bonds to be so redeemed on such date. All moneys on deposit in the Redemption Account will
be used and withdrawn by the Trustee for the sole purpose of paying the principal of and
premium, if any, on the Bonds upon the redemption thereof, on the date set for such
redemption, other than mandatory Sinking Account redemption of Term Bonds.
Investment of Funds
Amounts held by the Trustee in the funds and accounts established under the Indenture will be invested
by the Trustee in Permitted Investments specified in the written request of the Agency. In the absence
of any such direction from the Agency, the Trustee will invest any such moneys solely in certain money
market funds or portfolios investing in short-term U.S. Treasury securities, rated AAAm or AAAm-G
by Standard & Poor's (described in clause (d) of the definition of Permitted Investments). Moneys in
the Reserve Account shall be invested in investments with a maturity of not greater than 5 years or
alternatively in an investment agreement which permits withdrawals or deposits without penalty at such
time as such money will be needed or in order to replenish the Reserve Account. All moneys in the
Redevelopment Fund or the Special Fund will be invested by the Agency in any investments authorized
for the investment of Agency funds under the laws of the State of California. The Agency currently
invests all cash on hand in the investments authorized by the Government Code. All interest or gain
derived from the investment of amounts in any fund or account will be retained therein; provided that
all interest or gain from the investment of amounts in the Reserve Account will be deposited by the
Trustee in the Interest Account to the extent not required to cause the balance in the Reserve Account to
equal the Reserve Requirement. The funds and accounts held by the Trustee shall be valued no less
frequently than semi-annually by the Trustee.
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Other Covenants of the Agency
Punctual Payment. The Agency will punctually payor cause to be paid the principal, premium (if
any) and interest to become due in respect of all the Bonds in strict conformity with the terms of the
Bonds and of the Indentures. The Agency agrees that it will faithfully observe and perform all of the
conditions, covenants and requirements of the Indentures, and all Supplemental Indentures.
Limitation on Additional Indebtedness. The Agency covenants that it will not issue any bonds, notes
or other obligations, enter into any agreement or otherwise incur any indebtedness, which is in any case
payable from all or any pan of the Tu',( Revenues, excepting only the Bonds, any Parity Debt and any
Subordinate Debt.
Plan Limit. The Agency agrees to manage its fiscal affairs in a manner which ensures that it will have
suftlcient Tax Revenues available under the Plan Limitations in the amounts and at the times required to
enable the Agency to pay the principal of and interest and premium (if any) on the Bonds and any
Parity Debt when due.
Books and Accounts; Financial Statements. The Agency will keep, or cause to be kept, proper books
of record 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 transactioIlS relating to the Redevelopment of the
Projects, Tax Revenues and the Special Funds. Such books of record and accounts will at all times
during business hours be subject to the inspection of the Owners of not less than 10% in aggregate
principal amount of the Bonds then Outstanding, or their representatives authorized in writing. The
Agency will cause to be prepared annually, within 180 days after the close of each fiscal year so long as
any of the Bonds are Outstanding, complete audited financial statements with respect to such fiscal
year, and will furnish a copy of such statements to any Bondowner upon reasonable request and at the
expense of such Bondowner.
Maintenance of Ta'( Revenues. The Agency will comply with all requirements of the Redevelopment
Law to insure the allocation and payment to it of the Tax Revenues, including without limitation the
timely filing of any necessary statements of indebtedness with appropriate officials of San Diego County
and the State of California. The Agency will not amend any of the Redevelopment Plans in a manner
that will reduce Tax Revenues in any future Fiscal Year unless the Agency first obtains the report of an
Independent Redevelopment Fiscal Consultant stating that the applicable Tax Revenues for the then
current Fiscal Year (calculated on the assumption that such reduction of Tax Revenues was in effect
throughout such Fiscal Year), are at least equal to the same percent of Maximum Annual Debt Service
on the Bonds which will be Outstanding immediately following the effective date of such amendment as
required for the issuance of Parity Debt. Amendments resulting in payments pursuant to the Tax
Sharing Statues shall be permined so long as' . The Agency will not
enter any agreement with the County or any other gove=ental or private entity, which would have the
effect of reducing the amount of Tax Revenues otherwise available to the Agency for payment of the
Bonds, unless such agreement or amendment constitutes Subordinate Debt. [The Agency reserves the
right (but shall be under no obligation) to make fmdings under Section 33334.6(d) of the Law at any
future date to the extent applicable].
Tax Covenants. The Agency will take no action or refrain from taking any action with respect to the
proceeds of any of the Bonds which would cause any of the Bonds to be "arbitrage bonds", "private
activity bonds" or "federally guaranteed" within the meaning of applicable federal tax law. The
Agency will cause to be calculated all excess invesnnent earnings which are required 10 be rebated to
the United States of America under applicable federal tax law, and will cause all required amounts to be
rebated from available funds of the Agency.
58
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Continuing Disclosure. The Agency covenants that it will comply with and carry Out all of the its
obligations under the Continuing Disclosure Certificate. Notwithstanding any other provision of the
Indenture, failure of the Agency to comply with the Continuing Disclosure Certiticate shall not be
considered an Event of Default; however, any Participating Underwriter (as detined in the Certiticate)
or any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the Agency to
comply with its obligations under this provision of the Indenture.
Amendment of Indenture
The Indenture and the rights and obligations of the Agency and the Owners may be modified or
amended at any time without the consent of any Owners, to the extent permitted by law, but only for
anyone or more of the following purposes: (a) to add covenants and agreements of the Agency or to
limit or surrender any rights or power reserved to or conferred upon the Agency; (b) to cure any
ambiguity, or to cure, correct or supplement any defective provision, or in any other respect as the
Agency may deem necessary or desirable, provided under any circumstances that such modifications or
amendments do not materially adversely affect the interests of the Owners in the opinion of Bond
Counsel; (c) to provide for the delivery of a Qualified Reserve Account Credit Instrument; (d) to
provide for the issuance of Parity Debt (as permitted by the applicable Indenture) and to provide the
terms and conditions under which such Parity Debt may be issued; or (e) to amend any provision
relating to the requirements of or compliance with the TaJt Code.
The Indenture may be amended at any time with the written consent of the Owners of a majority in
aggregate principal amount of the outstanding Bonds. No such amendment may (a) extend the mamrity
of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Agency to
pay the principal or interest at the time and place and at the rate and in the currency provided therein of
any Bond without the express written consent of the owner of such Bond, (b) reduce the percentage of
Bonds required for the written consent to any such amendment, or (c) without its written consent
thereto, modify any of the rights or obligations of the Trustee.
Events of Default and Remedies
Events of Default Defined. The following events constitute Events of Default under the Indentures:
(a) Failure to pay any installment of the principal of any Bonds when and as the same shall become
due and payable, whether at maOlrity, by proceedings for redemption, by acceleration or
otherwise.
(b) Failure to pay any installment of interest on any Bonds when and as the same shall become due
and payable.
(c) Failure by the Agency to observe and perform any of the other covenants, agreements or
conditions contained in the Indenture or in the Bonds, if such failure continues for a period of
60 days after written notice thereof has been given to the Agency by the Trustee or to the
Agency and the Trustee; provided that if in the reasonable opinion of the Agency the failure
stated in the notice can be corrected, but not within such 60 day period, such failure will not
constitute an event of default if corrective action is instituted by the Agency within such 60 day
period and the Agency thereafter diligently and in good faith cures such failure in a reasonable
period oftime.
(d) Filing by the Agency of a petition in bankruptcy.
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Remedies. If an Event of Default has occurred and is continuing, the Trustee may, and at the wrinen
direction of the Owners of a majority in aggregate principal amount of the Bonds at the time
Outstanding shall, (a) upon notice in writing to the Agency, declare the principal of the Bonds then
Outstanding, and the interest accrued thereon, to be due and payable immediately, and (b) upon receipt
of indemnitication satisfactory to it from any liability or expense, including payment of the fees and
expenses of its counsel, exercise any other remedies available to the Trustee or the Owners in law or in
equity. The Trustee is appointed as the true and lawful anomey-in-fact of the Owners for the purpose
of bringing any suit, action or proceeding and to do and perform any and all acts for and on behalf of
the Owners, as may be necessary or advisable in the opinion of the Trustee, subject to the provisions of
the Indenture and applicable provisions of any law.
In the event that the Trustee, upon the happening of and Event of Default, shall have taken any action,
by judicial proceedings or otherwise, pursuant to its duties under the Indenture, whether upon its own
discretion or upon the request of the Owners of a majority in principal amount of the Bonds then
Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the
Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal compromise,
senlement or other disposal of such action; provided, however, that the Trustee shall not, unless there
no longer continues an Event of Default, discontinue, withdraw, compromise or senle, or otherwise
dispose of any litigation pending at law or in equity, if at the time there has been filed with it a wrinen
request signed by the Owners of a majority in principal amount of the Outstanding Bonds opposing such
discontinuance, withdrawal, compromise, senlement or other disposal of such litigation.
All of the Tax Revenue and all sums in the funds and accounts established and held by the Trustee
under the Indenture upon the date of the declaration of acceleration, and all sums thereafter received by
the Trustee under the Indenture, shall be applied by the Trustee as follows and in the following order:
(a) To the payment of any fees, costs and expenses incurred by the Trustee to protect the interests
of the Owners of the Bonds; payment of the fees, costs and .expenses of the Trustee (including
fees and expenses of its counsel) incurred in and about the performance of its powers and duties
under the Indenture and the payment of all fees, costS and expenses owing to the Trustee.
(b) To the payment of the whole amount then owing and unpaid upon the Bonds for interest and
principal with interest on such overdue amounts at the respective rates of interest borne by the
Outstanding Bonds, and in case such moneys shall be insufficient to pay in full the whole
amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal
and interest on overdue amounts without preference or priority among such interest, principal
and interest on overdue amounts ratably to the aggregate of such interest, principal and interest
on overdue amounts.
Limitations of Owners' Rights. No Owner has the right to institute any suit, action or proceeding at
law or in equity, for any remedy under the Indenture, unless (a) such Owner has previously given to the
Trustee wrinen notice of the occurrence of ail Event of Default; (b) the Owners of a majority in
aggregate principal amount of all the Bonds then Outstanding have requested the Trustee in writing to
exercise its powers under the Indenture; (c) said Owners have tendered to the Trustee indemnity
reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in
compliance with such request; and (d) the Trustee has refused or failed to comply with such request for
a period of 60 days after such written request has been received by the Trustee and said tender of
indemnity is made to the Trustee.
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Defeasance of Bonds
If the Agency shall pay and discharge the entire indebtedness of any Bonds in anyone or more of the
following ways: (a) by paying or causing.ro be paid the principal of and interest on such Bonds, as and
when the same become due and payable; (b) by irrevocably depositing with the Trustee or another
tlduciary, in trust, at or before maturity, money with, IOgether with the available amounts then on
deposit in the funds and accounts established pursuant to the Indenture and all Supplemental Indentures,
in the opinion or report of an Independent Accountant is fully sufficient to pay such Bonds, including
all principal, interest and redemption premium, if any; (c) by irrevocable depositing with the Trustee or
another fiduciary, in trust, non-callable Defeasance Securities in such amount as an Independent
Accountant shall determine will, together with the interest to accrue thereon and available moneys then
on deposit in any of the funds and accounts established pursuant to the Indenture and all Supplemental
Indentures, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all
principal, interest and redemption premium, if any, at or before maturity; or (d) by purchasing such
Bonds prior to maturity and tendering such Bonds to the Trustee for cancellation; and if such Bonds are
to be redeemed prior to the maturity thereof notice of such redemption shall.have been duly given or
provision satisfactory. to the Trustee sball have been made for the giving of such notice, then, at the
election of the Agency, and notwithstanding that any such Bonds shall not have been surrendered for
payment, the pledge of the Tax Revenues and other funds provided for in the Indenture and all other
obligations of the Trustee and the Agency under the Indenture with respect to such Bonds shall cease
and terminate, except only (a) the obligation of the Agency and the Trustee with respect to rebate of
Rebatable Arbitrage, (b) the obligation of the Trustee to transfer and exchange Bonds, (c) the obligation
of the Agency to payor cause to be paid to the Owners of such Bonds, from the amounts so deposited
with the Trustee, all sums due thereon, and (d) the obligations of the Agency to compensate and
indemnify the Trustee. Notice of such election shall be filed with the Trustee. Any fund thereafter
held b the Trustee, which are nor required for said purpose, shall be paid over to the Agency.
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LEGAL MATfERS
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
qualitied to the extent that the enforceability of cenain legal rights related to the Indencures 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, Newpon Beach, California, as Bond
Counsel, will render an opinion which states that each Indenture is a valid and binding contract of the
Agency and enforceable in accordance with its Ierms. 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.
The Agency has no knowledge of any fact or other information which would indicate that the
Indentures are 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.
Cenain legal matters will be passed on for the Agency by the City Attorney and by Stradling Y occa
Carlson & Rauth, a Professional Corporation, Newpon 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, Newpon Beach,
California, Bond Counsel, under existing stacutes, regulations, rulings and judicial decisions, 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 funher opinion of Bond Counsel, interest on the Bonds is exempt from State of
California personal income taX. Bond Counsel notes that, with respect to corporations, interest on the
Bonds will be included as an adjusonent in the calculation of alternative minimum taxable income,
which may affect the alternative maximum taXable liability of such corporations.
In addition, the difference between the issue price of a Bond (the first price at which a substantial
amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at
maturity of such Bond constitutes original issue discount. Original issue discount accrues under a
constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash
attributable to such excludable income. In the opinion of Bond Counsel, the amount of original issue
discount that accrues to the owner of a Bond is excludable from the gross income of such owner for
federal income tax purposes, is not an item of tax preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations, and is exempt from State of California personal
income tax.
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Bond Counsel's opinion as to the exclusion from gross income for federal income tax purposes of
interest (and original issue discount) on the Bonds is based upon certain representations of fact and
cenillcations made by the City, the Underwriter and others and is subject to the condition that the City
complies with all requirements of 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 (and
original issue discount) on the Bonds to be included in gross income for federal income tax purposes
retroactive to the date of issuance of the Bonds. The City has covenanted to comply with all such
requirements .
Should the interest (and original issue discount) on the Bonds become includable in gross income for
federal income taX purposes, the Bonds are not subject to early redemption as a result of such
occurrence and will remain outstanding until maturity or until otherwise redeemed in accordance with
the Fiscal Agent Agreement.
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.
Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the Bonds
is excluded from gross income for federal income taX purposes provided that the City continues to
comply with certain requirements of the Code, the accrual or receipt of interest (and original issue
discount) on the Bonds may otherwise affect the taX liability of the recipient. The extent of these other
taX consequences will depend upon the recipient's particular tax status and other items of income or
deductions. Bond Counsel expresses no opinion regarding any such consequences. Accordingly, all
potential purchasers should consult their taX advisors before purchasing any of the Bonds.
The form of Bond Counsel's opinion is set forth in "APPENDIXE" hereto.
Absence of Litigation
The Agency will furnish a certificate dated as of the date of delivery of the Bonds that there is not now
known to be pending or threatened any litigation restraining or enjoining the execution or delivery of
the Indentures or the sale or delivery of the Bonds or in any manner questioning the proceedings and
authority under which the Indentures are to be executed and delivered or the Bonds are to be delivered
or affecting the validity thereof.
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CONCLUDING INFORMATION
Rating on the Bonds
Standard & Poor's Ratings Services has assigned their rating of " " to the Bonds. Such rating
retkcts 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
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 Financing Consultant
The material contained in this Official Statement was prepared by Rod Gunn Associates, Inc., Seal
Beach, California, an independent financial consulting firm, who advised the Agency as to the fmancial
structure and certain other financial matters relating to the Bonds. The information set fonh herein has
been obtained by Rod Gunn Associates, Inc. from sources which are believed to be reliable, but such
information is not guaranteed by Rod Gunn Associates, Inc. as to accuracy or completeness, nor has it
been independently verified. Fees paid to Rod Gunn Associates, Inc. are contingent upon the sale and
delivery of the Bonds.
Additional Information
The summaries and references contained herein with respect to the Indentures, the Bonds, statutes and
other documents, do not purpon 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 hereof included in the applicable Indenture. Definitions of certain terms used herein are set
fonh in "APPENDIX A". Copies of the Indentures are available for inspection during the period of
initial offering on the Bonds at the offices 0( the Financing Consultant, Rod Gunn Associates, Inc.,
3010 Old Ranch Parkway, Suite 330, Seal Beach, California 90740, Ielephone (562) 598-7677. Copies
of these documents may be obtained after delivery of the Bonds from the City at 276 Founh Avenue,
Chula Vista, California 91910.
References
Any 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 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
DEFINITIONS OF CERTAIN TERMS
Unless otherwise detined in this Official Statement, the following Ierms have the following meanings.
"Additional Revenues" means, as of the date of calculation, the amount of Tax Revenues which, as
shown in the Report of an Independent Redevelopment Fiscal Consultant, are estimated to be receivable
by the Agency within the Fiscal Year following the Fiscal Year in which such calculation is made as a
result of increases in the assessed valuation of taxable property in the Project Area due to (i) transfer of
ownership or any other interest in real property which has been recorded but which is not then reflected
on the tax rolls and/or (ii) inflation at an assumed annual inflation rate equal to the lesser of (a) the
annual rate of inflation for the preceding twelve-month period for which figures are available or (b) two
percent (2 %), but only if the rate of Inflation had increased by at least two percent (2 %) in each of the
preceding five Fiscal Years. For purposes of this definition, the term "increases in the assessed
valuation" means the amount by which the assessed valuation of taxable property in the Project Area is
estimated to increase above the assessed valuation of taxable property in the Project Area (as evidenced
in the written records of the County) as of the date on which such calculation is made.
"Annual Debt Service" means, 'for each Bond Year, the sum of (a) the interest payable on the
Outstanding Bonds in such Bond Year, and (b) the principal amount of the Outstanding Bonds
scheduled to be paid in such Bond Year upon the mamrity or mandatory Sinking Account redemption
thereof.
"Bond Year" means any twelve-month period beginning on _ in any year and extending to the
next succeeding September 1, both dates inclusive; except that the first Bond Year shall begin on the
Closing Date and end on September 1, 2000.
"Business Day" means a day of the year (other than a Samrday or Sunday) on which banks in
California, are not required or permitted to be closed, and on which the Federal Reserve banking
system is open.
"Certificate of the Agency" means a certificate in writing signed by the Chair, Executive Director,
Deputy Executive Director, Finance Officer or Secretary of the Agency, or any other officer of the
Agency duly authorized by the Agency for that purpose.
"Defeasance Securities" means any of the following, or any combination thereof: (a) cash, (b) State
and Local Government Series securities issued by the United States Treasury, (c) United States
Treasury bills, notes and bonds, as traded on the open market, (d) zero coupon United States Treasury
Bonds, and (e) any other investtnents approved by the Bond Insurer as Defeasance Securities.
"Federal Securities" means any direct .obligations of the United States of America and securities fully
and unconditionally guaranteed as to the timely payment of principal and interest by the United States
of America, provided, that the full faith and credit of the United States of America must be pledged to
anysuch direct obligation or guarantee.
"Fiscal Year" means any twelve-month period beginning on July 1 in any year and extending to the
next succeeding June 30, both dates inclusive, or any other twelve-month period selected and
designated by the Agency as its official fiscal year period pursuant to a Certificate of the Agency filed
with the Trustee.
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"Independent Accountant" means any certified public accountant or tirrn of such certitied public
accountants duly licensed or registered or entitled to practice and practicing as such under the laws of
the State, appointed by or acceptable to the Agency, and who, or each of whom: (a) is in fact
independent and not under domination of the Agency; (b) does not have any substantial interest, direct
or indirect, with the Agency; and (c) is not connected with the Agency as an ofticer or employee of the
Agency, but who may be regularly retained to make reportS to the Agency.
"Independent Redevelopment Fiscal Consultant" means any consultant or tirm of such consultants
appointed by or acceptable to the Agency and who, or each of whom: (a) is judged by the Agency to
have substantial expertise in maners relating to the collection, estimation and projection of Tax
Revenues or otherwise with respect to the financing of redevelopment projects; (b) is in fact
independent and not under domination of the Agency; (c) does not have any substantial interest, direct
or indirect, with the Agency other than as the Original Purchaser, and (d) is not connected with the
Agency as an officer or employee of the Agency, but who may be regularly retained to make reportS to
the Agency.
"Information Services" means Financial Information, Inc. 's "Daily Called Bond Service", 30
Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Anention: Editor; Kenny Information
Services' "Called Bond Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's
Investors Service "Municipal and Government," 99 Church Street, 8th Floor, New York, New York
10007, Attention: Municipal News ReportS; Standard & Poor's Corporation "Called Bond Record," 25
Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of
the Securities and Exchange Commission, such other addresses and/or such other services providing
information with respect to the redemption of bonds as the Agency may designate in a Request of the
Agency delivered to the Trustee.
"Interest Payment Date" means June 1,2000, and each December 1 and June 1 thereafter so long as
any of the Bonds remain unpaid.
"Maximum Annual Debt Service" means, as of the date of calculation, the largest amount of Annual
Debt Service on all Outstanding Bonds for the current or any future Bon~ Year. For purposes of such
calculation, there shall be excluded a pro rata portion of each installment of principal of any Parity
Debt, together with the interest to accrue thereon, in the event and to the extent that the proceeds of
such Parity Debt are deposited in an escrow fund from which amounts may not be released to the
Agency unless the Agency meets the requirements of Section 3.5 for the issuance of Parity Debt at the
time of such release, taking the released proceeds into account.
"Moody's" means Moody's Investors Service, of New York; New York, and its successors.
"Outstanding" when used as of any particular time with reference to Bonds, means (subject to the
provisions of the Indenture) all Bonds except: (a) Bonds theretofore canceled by the Trustee or
surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have been paid within the
meaning of the Indenture; and (c) Bonds in lieu of or in substirution for which other Bonds shall have
been authorized, executed, issued and delivered by the Agency pursuant to the Indenrure.
"Owner" or "Bondowner" means, with respect to any Bond, the person in whose name the ownership
of such Bond shall be registered on the Registration Books.
"Parity Debt" means any bonds, notes, loans, advances or other indebtedness issued or incurred by the
Agency on a parity with the respective series of Bonds pursuant to the Indenrure.
"Permitted Investments" means any of the following which at the time of investment are legal
investments under the laws of the State for the moneys proposed to be invested therein:
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(a) Direct obligations of the United States of America (including obligations issued or held in book-
entry form on the books of the Department of the Treasury, and CATS and TIGRS) or
obligations the principal .of and interest on which are unconditionally guaranteed by the United
States of America.
(b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the
following federal agencies and provided such obligations are backed by the full faith and credit
of the United States of America (stripped securities are only permined if they have been
stripped by the agency itself):
(i) U.S. Expon-Impon Bank (Eximbank)
Direct obligations or fully guaranteed cenificates of beneficial ownership
(ii) Farmers Home Administration (FmHA)
(iv)
(v)
Cenificates of beneficial ownership
Federal Financing Bank
Federal Housing Administration Debentures (FHA)
General Services Administration
(iii)
.
Participation cenificates
Government National Mongage Association (GNMA or "Ginnie Mae")
(vi)
GNMA-guaranteed monga"ge-backed bonds
GNMA-guaranteed pass-through obligations
(vii) U.S. Maritime Administration
Guaranteed Title XI financing
(viii) U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Agency Bonds
New Commnnities Debentures - U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing
notes and bonds
(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the
following non-full faith and credit U.S. government agencies (stripped securities are only
permined if they have been stripped by the agency itself):
(i) Federal Home Loan Bank System
Senior debt obligations
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(ii) Federal Home Loan MOrt):!:age Corporation (FHLMC or "Freddie Mac")
Panicipation cenificates
Senior debt obligations
(iii) Federal National Mongage Association (FNMA or "Fannie Mae")
(iv) Student Loan Marketing Association (SLMA or "Sallie Mae")
Senior debt obligations
(v) Resolution Funding Corp. (REFCORP) obligations
(vi) Farm Credit System Corp. - Consolidated system-wide bonds and notes
(d) Money market funds registered under the Federal Investment Company Act of 1940, whose
shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of
AAAm-G, AAAm or AAm and if rated by Moody's rated Aaa, Aal or Aa2 (including those of
the Trustee and its affiliates).
(e) Cenificates of deposit secured at all times by collateral described in (A) and/or (B) above.
Such cenificates must be issued by co=ercial banks, savings and loan associations or mumal
savings banks. The collateral must be held by a third pany and the Bondholders must have a
perfected first security interest in the collateral.
(f) Cenificates of deposit, savings accounts, deposit accounts or money market deposits which are
fully insured by FDIC, including BIF and SAIF (including those of the Trustee and its
affiliates) .
(g) Investment Agreements approved by the Bond Insurer, with prior written notice to Moody's
and S&P, with an entity, or guaranteed by an entity, whose long-term debt is rated not less than
AA by S&P and Moody's at the time of execution of such agreement and which permits the
withdrawal of all funds and accrued interest to the date of withdrawal, without penalty, in the
event that such long-term rating is less than "AA."
.,.
(h) Co=erciaI paper rated, at the time of purchase, "Prime - I" by Moody's and "A-I" or better
by S&P.
(i) Bonds or notes issued by any state or municipallty which are rated by Moody's and S&P in one
of the two highest rating categories assigned by such agencies.
G) Federal funds or bankers acceptances with a maximum term of one year of any bank which has
an unsecured, uninsured or unguaranteed obligation rating of "Prime - 1" or "A3" or better by
Moody's and "A-I" or "A" or better by S&P.
(k) Repurchase agreements approved by the Bond Insurer with prior written notice to Moody's and
S&P providing for the transfer of securities from a dealer bank or securities firm
(seIIerlborrower) to the Agency or the Trustee, and the transfer of cash from the Agency or the
Trustee to the dealer bank or securities firm with an agreement that the dealer bank or securities
firm will repay the cash plus a yield to the Agency, or the Trustee, in exchange for the
securities at a specified date or dates.
(I) The Local Agency Investment Fund of the State of California, created pursuant to Section
16429.1 of the California Government Code.
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(m) Any other investment which the Agency is permitted by law to make, but only with the prior
written consent of the Bond Insurer and prior written notice to Moody's and Standard and
Poor's. .'
"Plan Limitations" means the limitations contained or incorporated in the respective Redevelopment
Plan on (a) the aggregate principal amount of indebtedness payable from Tax Revenues which may be
outstanding at any time, (b) the aggregate amount of taxes which may be divided and allocated to the
Agency pursuant to the Redevelopment Plan, (c) the period of time for establishing or incurring
indebtedness payable from Tax Revenues and (d) the period of time for receiving Tax Revenues for any
purpose, established pursuant to Section 33333.4 or 33333.6 of the Redevelopment Law.
"Qualified Reserve Account Credit Instrument" means any irrevocable standby or direct-pay letter
of credit or surety bond issued by a commercial bank or insurance company and deposited with the
Trustee pursuant to the Indenmre, provided that all of the following requirements are met: (a) the long-
term credit rating of such bank or insurance company is in one of the two highest rating categories by
S&P and Moody's; (b) such letter of credit or surety bond has a term of at least twelve (12) months; (c)
such letter of credit or surety bond has a Stated amount at least equal to the portion of the Reserve
Requirement with respect to which funds are proposed to be released pursuant to the Indenmre; (d) the
Trustee is authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder an
amount equal to any deficiencies which may exist from time to time in the Interest Account, the
Principal Account or the Sinking Account for the purpose of making payments required pursuant to the
Indenmre; (e) the Bond Insurer has approved in writing such Qualified Reserve Account Credit
Insrrument; and (f) written notice of the posting of such Qualified Reserve Account Credit Insrrument is
given to S&P and Moody's.
"Record Date" means, with respect to any Interest Payment Date, the close of business on the fifteenth
(15th) calendar day of the month preceding such Interest Payment Date, whether or not such fifteenth
(15th) calendar day is a Business Day.
"Redevelopment Law" means the Community Redevelopment Law of the State, constimting Part 1 of
Division 24 of the Health and Safety Code of the State, and the aCts amendatory thereof and
supplemental thereto. .
"Request of the Agency" means a request in writing signed by the Chair, Executive Director, Deputy
Executive Director, Finance Officer or Secretary of the Agency, or any other officer of the Agency
duly authorized by the Agency for that purpose.
"Reserve Requirement" means, as of the date of any calculation by the Agency, the lesser of (a)
Maximum Annual Debt Service, (b) 125 % of average Annual Debt Service on the Bonds, or (c) 10 % of
the original principal amount of the Bonds (less original issue discount if in excess of two percent (2 %)
of the stated redemption amount at maturity).
"S&P" means Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc., of
New York, New York, and its successors.
"Supplemental Indenture" means any resolution, agreement or other instrUment which amends,
supplements or modifies the Indenmre and which has been duly adopted or entered into by the Agency;
but only if and to the extent that such Supplemental Indenmre is specifically authorized under the
Indenmre.
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"Tax Code" means the Internal Revenue Code of 1986, as in effect on the date of issuance of the
Bonds or (except as otherwise referenced in the Indenture) as it may be amended to apply to obligations
issuerl on the date of issuance of the Bonds, together with applicable proposed, temporary and tinal
reguladons promulgated, and applicable ofticial public guidance published, under the Tax Code
(including the Tax Regulations).
"Tax Regulations" means temporary and permanent regulations promulgated under Section 103 and all
related provisions of the Tax Code.
"Tax Revenues" means all taxes annually allocated to the Agency with respect to the Project Area
following the Closing Date within the Plan Limitations pursuant to Article 6 of Chapter 6 (commencing
with Section 33670) of the Redevelopment Law and Section 16 of Article XVI of the Constitution of the
State and as provided in the Redevelopment Plan, including (a) all payments, subventions and
reimbursements (if any) to the Agency specifically arrributable to ad valorem taxes lost by reason of tax
exemptions and tax rate limitations, and (b) all amounts of such taxes required to be deposited into the
Low and Moderate Income Housing Fund in any Fiscal Year pursuant to Section 33334.3 of the
Redevelopment Law, but only to the extent such amounts are specifically pledged to the payment of
principal, interest and premium (if any) with respect to any Parity Debt but excluding (i) all amounts' of
such taxes required to be deposited in the Low and Moderate Income Housing Fund (and not includable
as set forth in (b) above), (ii) all amounts of such ta.'l:es which are payable to entities other than the
Agency pursuant to the Tax Sharing Statutes to the extent such Tax Sharing Statutes or Tax Sharing
Agreements create a prior lien on such taxes and such entities other than the Agency have not
subordinated their righr to receive payments, and (iii) amounts, if any, payable by the State to the
Agency under and pursuant to the provisions of Chapter 1.5 of Pan 1 of Division 4 of Title 2
(commencing with Section 16110) of the Government Code of the State.
"Tax Sharing Statutes" means Section 33607.7 of the Redevelopment Law and, to the extent
incorporated pursuant to such Section 33607.7, Section 33607.5 of the Redevelopment Law.
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APPENDIX B
CITY OF CHULA VISTA INFORMATION STATE:MENT
The following information concerning the City of Chula Vista is presented as general background data.
The Bonds are payable solely from Tax Revenues as described in the Ofticial Statement. The Bonds
are not an obligation of the City, and the taxing power of the City is not pledged 10 the payment of the
Bonds.
General Information
The City of Chula Vista is located on San Diego Bay in Southern California, 8 miles south of San
Diego and 7 miles nonh of the Mexico border in an area generally known as "South Bay". City limits
cover approximately 50 square miles. Chula Vista is the second largest city in San Diego County. In
addition to the City of San Diego, neighboring communities include Imperial Beach, La Mesa and
National City.
Government Services
The City of Chula Vista was incorporated March 17, 1911, and became a chaner city in 1949. Chula
Vista operates under a Council/Manager form of municipal government and provides the following
services: public safety, co=unity services, engineering services, planning services, public works,
general administrative services and capital improvements. The City of Chula Vista currently employs
785 full-time and 240 to 360 pan-time employees: The City has a class 3 fIre rating.
Transportation
U.S. Highways 5 (along the coast) and 805 (inland) provide full freeway access from the City nonh to
San Diego and south 10 the Mexican border. Co=uter rail service is provided by the San Diego
Trolley, a light rail system sraned in 1981 and eleven bus routes covering the City.
Daily bus connections serve the City, and Southern Pacific Railway and San Diego's Lindbergh
International Airpon are fifteen minutes to the nonh of the City.
Community Information
There are two acute-care hospitals, two psychiatric hospitals and three convalescent hospitals, and more
than 400 medical doclOrs and allied professionals in Chula Vista.
There are two daily, one weekly and one semi-weekly newspapers published and circulated in the City.
The City has one main public library and two branch libraries.
Recreational facilities within or near the City include twenty-four parks, four co=unity centers, six
"tot lots", two ballfields, twenry-eight tennis courts, three golf courses, four municipal swimming
pools, two gymnasiums and boat launching facilities. The City bayfront area contains a marina which
houses 552 boats and miles of public beaches. The City also provides many trails for bicycling, hiking
and jogging.
The City is also the home 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 15o-acre site
donated by Eastlake Development Company adjacent to the Otay Lake reservoir.
The City has more than sixty churches and nearly 100 service, fraternal and civic organizations.
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Public Educational instruction from Kinderganen through high school is provided by the Chula Vista
Elementary School District and Sweetwater Union High school District. These districts administer
twenty-six elemem_try schools, nine junior high schools and eight senior high schools. Southwestern
College, a two year Community College, has an enrollment of more than 15,000. There are also four
adult education schools and twelve private schools. There are seven universities or colleges within 30
minutes commuting distance from Chula Vista in the San Diego Metropolitan Area. The City has
proposed a University of California campus in Chula Vista, to be located on a 4OO-acre site adjoining
the Olympic Training Center.
,
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Population
The following charts provide a comparison of population growth for Chula Vista, surrounding cities
and San Diego County between 1995 and 1999.
TABLE NO. B-1
CHANGE IN POPULATION
CHULA VISTA, SURR.OUNDING CITIES AND SAN DIEGO COUNrY
1995 - 1999
14.0%
11.4%
2.0%
Chula Vista
Surrounding Cities
San Diego County
12.0%
10.0%.
8.0%
6.0%
4.0%
0.0%
1995 149,800 173,850 2,658,600
1996 152,700 1.9 % 174,800 0.5 % 2,682,100 0.9 %
1997 156,400 2.4 % 178,550 2.1 % 2,729,100 1.8 %
1998 162,100 3.6 % 175,700 (1.6)% 2,795,800 2.4 %
1999 166,900 3.0 % 179,200 2.0 % 2,853,300 2.1 %
% Increase Between
1995-1999 11.4 % 3.1 % 7.3 %
Surrounding cities include El Cajon, Coronado and National City.
Source: State of California Department of Finance, Population Reseaxch Unit, 'Cicy(ColUJty Population Estimates
With A/lIJual Percent Change', published annually in May for current year.
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Personal Income
Median personal income information for the City of Chula Vista, San Diego County, the State of
California and the United States are summarized in the following cham.
TABLE NO. B-2
EFFECTIVE BUYING INCOME
CITY OF CHULAVISTA, SAN DIEGO COUNI'Y, CALIFORNIA AND UNITED STATES
1994 - 1998
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
1994
1996
1997
1998
o Chula Vista 0 San Diego County [l State of California II United States
1994 37,053 39,542 40,969 37,070
1995 (1) 31,341 33,679 34,533 32,238
1996 32,128 34,445 35,216 33,482
1997 33,267 35,725 36,483 34,618
1998 33,911 36,296 37,091 35,377
(1)
Prior to 1995, Effective Buying Income was based on "Personal Income" rather than "Money Income"
. and is not directly comparable with 1995 Effective Buying Income.
Source: Sales and Marketing Management, "Survey of Buying Power", published annually in August for prior
year.
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Employment and Industry
The City is located in the San Diego County MSA labor market. Four major job categories constitute
83.0% of the work force. They are serVices (32.5%), wholesale and retail trade (22.1 %) government
(17.4%) and manufacturing (11.0%). The January, 2000 unemployment rate in the San Diego County
area was 3.0%. The State of California January, 2000 unemployment rate (unadjusted) was 5.4%.
TABLE NO. B-3
SAN DIEGO COUNTY MSA
WAGE AND SALARY WORKERS BY INDUSTRY">
(in thousands)
Government 188.8 191.5 192.4 198.0 203.1
Services 308.4 324.9 345.1 362.5 380.7
Finance, lnsurance & Real Estate 55.9 58.6 62.0 67.7 68.3
Wholesale & Retail Trade 232.6 235.0 243.6 248.5 258.2
Transportation & Public Utilities 37.1 39.6 43.1 50.3 52.9
Manufacturing:
Nondurable goods 31.5 32.7 34.7 35.9 37.4
Durable goods 83.7 86.2 89.9 91.0 91.2
Construction and Mining 43.0 47.0 55.9 62.5 68.4
Total Nonagricultural 981.0 1,015.5 1,066.7 1,116.4 1,160.2
Agriculture, forestry & fisheries' 9.5 9.6 9.3 9.4 10.1
Total (all industries) 990.5 1,025.1 1,076.0 1,125.8 1,170.3
% OF TOTAL WORKERS
Government 19.1 % 18.7 % 17.9 % 17.6 % 17.4 %
Services 31.1 % 31.7 % 32.1 % 32.2 % 32.5 %
Finance, Insurance & Real Estate 5.6 % 5.7 % 5.8 % 6.0 % 5.8 %
Wholesale & Retail Trade 23.5 % 22.9 % 22.6 % 22.1 % 22.1 %
Transportation & Public Utilities 3.7 % 3.9 % 4.0 % 4.5 % 4.5 %
Manufacturing:
Nondurable goods 3.2 % 3.2 % 3.2 % 3.2 % 3.2 %
Durable goods 8.5 % 8.4 % 8.4 % 8.1 % 7.8 %
Construction and Mining 4.3 % 4.6 % 5.2 % 5.6 % 5.8 %
Total Nonagriculturar 99.0 % 99.1 % 99.1 % 99.2% 99.1 %
Agriculture, forestry & fisheries' 1.0 % 0.9 % 0.9 % 0.8 % 0.9 %
Total (all industries) 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
(I)
Annually. as of January.
Due to the change in the estimating method, fann employment data prior to January. 1997 may not be
strictly comparable to current farm employment estimates.
Source: State of California Employment Development Department, . Annual Planning Infonnation" and
"California Labor Market Bulletin".
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The major employers operating within the City and their respective number of employees as of June
1999, are as follows:
. TABLE NO. B-4
CI'IT OF CHULA VISTA
TOP BUSINESS INDUSTRIAL/OffiCE EJ.'lPLOYMENT
Number of
Employees Type of Business
Emplover
BFGoodrich Aerospace Aerostructures Group
Sharp Chula Vista Medical Center
Scripps Memorial Hospital
White Water Canyon
American Fashion Inc.
Sunrise Medical Inc.
Eco Building Systems
2,075
800
650
500
500
450
210
CITY OF CHULA VISTA
TOPGOVERNMENTE~~LO~mNT
Employer
United Stated Border Patrol
Southwestern Co=unity College
City of Chula Vista
Deparonent of Social Services
Sweetwater Union High School District
Number of
Employees
2,700
1,100
825
300
260
Employer
Sears
Price Costco
Macy's
Big K.mart
Fuller Honda
CITY OF CHULA VISTA
TOP RETAIL El\<~LO~mNT
Number of
Employees
360
250
250
200
200
Source: City of Churn Vista.
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Aerospace Manufacturer
Hospital
Hospital
Amusement Park
Clothing Manufacturer
Medical Offices
Modular Building Manufacturer
Type of Business
Government Agency
Co=unity College
Municipal Government
Social Service Agency
Secondary School District
Type of Business
Deparonent Store
General Merchandise
Department Store
General Merchandise
Automotive Retailer
Commercial Activity
The following charts summarize the volume of retail sales and taxable transactions for the City of Chula
Vista for 1994 through 1998.
TABLE NO. B-S
CITY OF CHULA VISTA
TOTAL TAXABLE TRANSACTIONS
(in thousands)
1994 - 1998
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
,.
$200,000
$0
1994 1995 1996 1997 1998
Iil Retail Sales
o All Other Outlets
1994 974,901 1,454 1,102,748 3,236
1995 928,341 (4.8)% 1,553 1,063,911 (3.5)% 3,364
1996 987,211 6.3 % 1,594 1,133,092 6.5 % 3,401
1997 1,042,195 5.6 % 1,643 1,213,423 7.1 % 3,507
1998 1,120,534 7.5 % 1,660 1,320,195 8.8 % 3,535
Source: Stare Board of Equalization, "Taxable Sales in California", published annually in November for prior
year.
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Taxable transactions by type of business for the City of Chula Vista for 1994 through 1998 are
summarized below.
. TABLE NO. B-6
CITY OF CHULA VISTA
TA..XABLE TRANSACTIONS BY TYPE OF BUSINESS
(in thousands)
1993 - 1997
Retail Stores
Apparel Stores $ 61,828 $ 54,968 $ 61,487 $ 64,979 $ 63,414
General Merchandise Stores 294,436 260,114 287,235 337,230 382,944
Drug Stores 24,658 21,574 23,220 . .
Food Stores 73,701 70,276 72,388 81,503 81,006
Packaged Liquor Stores 7,381 6,683 5,948 . .
Eating/DriDking Places 117,290 118,053 121,494 126,357 131,661
Home Furnishings am
Appliances 46,258 46,507 43,600 47,004 55,856
Building Materials am
Farm Implemems 73,622 68,448 68,119 70,930 75,812
Auto Dealers/Suppliers 86,077 86,341 92,235 89,986 107,808
Service Stations 94,317 99,657 101,821 103,994 88,570
Other ReiaiJ. Stores . 95.333 95,720 109,664 120,212 133,463
Total Retail Stores 974,901 928,341 987,211 1,042,195 1,120,534
All Other Outlets 127,847 135,570 145,881 171.228 199,661
Total All Outlets $ 1,102,748 $ 1,063,911 $ 1,133,092 $ 1,213,423 $ 1.320,195
. As of 1997, Drug Stores have been merged with General Merchandise Stores and Packaged Liquor
Stores have been merged with Other Retail Stores.
Source: State Board of Equalization, "Taxable Sales in California", published annually in November for prior
year.
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The following charts summarize the change in taxable transactions for the City of Chula Vista and
surrounding cities.
. TABLE NO. B-7
CITY OF CHULAVISTA AND SURROUNDING CITIES
CHANGE IN TOTAL TAXABLE TRANSACfIONS
(in thousands)
1994 - 1998
30.0 %
24.6%
5.0 %
25.0 %
20.0 %
15.0 %
10.0 %
0.0%
Chula VISta
El Cajon
Coronado
National City
CHULA VISTA
EI Cajon
Coronado
National City
$1,102,748
1,104,210
123,255
886,360
$1,063,911
1,126,185
128,358
869,511
$1,133,092
1,165,861
135,109
891,234
$1,213,423
1,240,538
146,658
910,232
$1,320,195
1,327,520
153,621
1,006,266
19.7%
20.2%
24.6%
13.5%
Source: State Board of Equalization. "Taxable Sales in California' , published annually in November for prior
year.
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Building Activity
The following charts summarize building activity valuations for the City of Chula Vista for the five-
year period from 1994 through 1998.
TABLE NO. B-8
CITY OF CHULA VISTA
BUILDING ACTMTY AND VALUATION
(in thousands)
1994 - 1998
1996/97
1994/95
1995/96
$0
$1,000,000
$2,000,000
$3,000,000
Total Valuation $ 1,439,206 $ 1,290,477 $ 1,660,572 $ 1,758,086 $ 3,088,957
No. of New Dwelling Units:
Single-Dwelling 903 539 - 871 927 1,180
Multi-Dwelling 261 137 77 123 166
Total New Units 1,164 676 948 1,050 1,346
Source: City of Chula Vista and Economic Sciences COIporation, "California Residential Building Pennit
Activity', published annual in March for prior year.
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APPENDIX C
AGENCY AUDITED FINANCIAL STATEMENTS
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APPENDIX D
FORM OF CONTINUlNG DISCLOSURE CERTIFICATE
This Continuing Disclosure Certiticate (the "Disclosure Certificate"), dated as of June 1, 2000, is
executed and delivered by the Chula Vista Redevelopment Agency (as the "Issuer") and U.S. Bank
Trust National Association, (as the initial "Dissemination Agent") in connection with the issuance of
the $ Chula Vista Redevelopment Agency, 2000 Tax Allocation Bonds (Town Centre II
Redevelopment Project) (the "Bonds"). The Bonds are being issued pursuant to an Indenture of Trust,
dated as of June 1, 2000 (the "Indenture") between the Issuer and U.S. Bank Trust National
Association, as Trustee. The Issuer and the Dissemination Agent covenant and agree as follows:
SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and
delivered by the Issuer and the Dissemination Agent for the benefit of the Owners and Beneficial
Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C.
Rule l5c2-l2(b)(5).
SECTION 2. Definitions. In addition to the defmitions set forth in the Indenture, which apply to any
capitalized term used in this Disclosure Certificate unless otherwise defmed in this Section, the
following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described
in, Sections 3 and 4 of this Disclosure Certificate.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds
through nominees, depositories or other intermediaries), or (b) is created as the owner of any Bond for
federal income taX purposes.
"Disclosure Representative" shall mean the Treasurer of the Issuer or his or her designee, or such other
offtcer or employee as the Issuer shall designate in writing to the Dissemination Agent from time to
time.
"Dissemination Agent" shall mean the U.S. Bank Trust National Association, in its capacity as
Dissemination Agent, or any successor Dissemination Agent designated in writing by the Issuer and
which has filed with the Trustee a written acceptance of such designation.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.
"National Repository" shall mean any Nationally Recognized Municipal Securities Information
Repository for purpose of the Rule. Currently, the following are National Repositories:
Bloomberg Municipal Repositories
P.O. Box 840
Princeton, NJ 08542-0840
(609) 279-3200
FAX (609) 279-5962
E-mail: Munis@Bloomberg.com
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Kenny Information Systems, Inc.
Ann: Kenny Repository Service
65 Broadway, 16th Floor
New York, NY 10006
(212) 770-4595
FAX (212) 797-7994
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
(201) 346-0701
FAX (201) 947-0107
E-mail: nrmsir@dpcdata.com
Thomson NRMSIR
Ann: Municipal Disclosure
395 Hudson Street, 3'" Floor
New York, NY 10014
(212) 807-5001 or (800) 689-8466
FAX (212) 989-2078
E-mail: Disclosure@Muller.com
"Owner" shall mean a registered owner of the Bonds.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to
comply with the Rule in connection with offering of the Bonds.
"Repository" shall mean each National Repository and the State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as the same may be amended from time to time. .
"State Repository" shall mean any public or private repository or entity designated by the State of
California as a State reposittry for the purpose of the Rule and recognized as such by the Securities and
Exchange Commission. M of the date of this Agreement, there is no State Repository.
.
"Trustee" shall mean U.S. Bank Trust National Association, in Los Angeles, California, or any
successor thereto.
SECTION 3. Provision of Annual Reports.
(a) The issuer shall, or, upon written direction, shall cause the dissemination agent to, not later.
than nine months after the end of the Issuer's Fiscal Year (which fIScal year presently ends June
30), commencing with the report for the 2000-01 fiscal year, provide to each Repository an
Annual Report which is consistent with the requirements of Section 4 of this Disclosure
Certificate. The Annual Report may be submitted as a single document or as separate
documents comprising a package, and may include by reference other information as provided
in Section 4 of this Disclosure Certificate; provided that the audited financial Statements of the
Issuer may be submitted separately from and later than the balance of the Annual Report if they
are not available by the date required above for the filing of the Annual Report. The
Dissemination Agent shall have no duty to review or approve the content of the Annual Report,
or any part thereof. If Issuer's fIScal year changes, it shall give notice of such change in the
same manner as for a Listed Event under Section 5.
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(b) Not later than fifteen (15) Business Days prior to the latest date specitied in subsection (a) for
providing the annual report to repositories, the Issuer shall provide the Annual Report to the
Dissemination Agent. If by the latest date specitied in subsection (a), the Dissemination Agent
has not received a copy of the Annual Report, the Dissemination Agent shall notify the Issuer.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to
Repositories by the date required in subsection (a), the Dissemination Agent shall send a notice
to each Repository in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name and
address of each National Repository and the State Repository, if any; and
(ii) to the extent it can confirm such f1ling of the Annual Report, f1le a report with the
Trustee and the Issuer certifying that the Annual Report has been provided pursuant to
this Disclosure Certificate, stating the date it was provided and listing all the
Repositories to which it was provided.
SECTION 4. Content of Annual ReportS. The Issuer's Annual Report shall contain or include by
reference the following:
(a) The audited financial statements of the Issuer for the most recently ended fiscal year, prepared
in accordance with generally accepted accounting principles applicable from time to time to the
Issuer. If the Issuer's audited financial statements are not available by the time the Annual
Report is required to be f1led pursuant to Section 3(a), the Annual Report shall contain
unaudited financial statements in a format similar to the financial statements contained in the
[mal Official Statement, and the audited financial statements shall be f1led in the same manner
as the Annual Report when they become available.
(b) Other financial information and operating data relating to the Town Centre II Redevelopment
Project contained in the Official Statement for the Bonds under the heading "THE TOWN
CENTRE II PROJECT AREA" and "TAX REVENUES" for the previous Fiscal Year, and, where
such information or data is in tabular form, for the five most recent Fiscal Years for which the
information is available; provided, however, [discuss scope of disclosure].
(c) Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues of the Issuer or related public entities, which have
been submitted to each of the Repositories or the Securities and Exchange Commission. If the
document included by reference is a final official statement, it must be available from the
Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other
document so included by reference.. . .: -'=,. ",,'ir'.'
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of
the occurrence of any of the following events with respect to the Bonds, if the Issuer determines
that such event is material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
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(3) unscheduled draws on debt service reserves reflecting financial difticulties;
(4) unscheduled draws on credit enhancements reflecting financial difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions or events adversely affecting the tax-exempt statuS of the Bonds;
(7) modifications to rights of Owners of Bonds;
(8) bond calls;
(9) defeasances;
(10) release, substitution or sale of property securing repayment of the Bonds; and
(11) rating changes.
(b) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the Issuer shall as
soon as possible determine if such event would be material under applicable federal securities
laws. The Dissemination Agent shall have no responsibility for such determination and shall be
entitled to conclusively rely on the Issuer's determination.
(c) If the Issuer has determined that the occurrence of a Listed Event would be material under
applicable federal securities laws, the Issuer shall promptly notify the Dissemination Agent in
writing. Such notice shall iDStIllct the Dissemination Agent to report the occurrence pursuant to
subsection (e).
(d) If, under subsection (b), the Issuer determines that the Listed Event would not be material
under applicable federal securities laws, the Issuer shall so notify the Dissemination Agent in
writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection
(e).
(e) If the Dissemination Agent has been instructed by the Issuer to report the occurrence of a Listed
Event and has received a notice of the occurrence in a format suitable for filing with each
Repository, the Dissemination Agent shall fIle a notice of such occurrence with the~eposiIOries
and the State Repository. Notwithstanding the foregoing, notice of Listed Events described in
subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if
any) of the underlying event is given to Owners of affected Bonds pursuant to the Indenture.
Notice of a Listed Event is only required under this Section 5 followfng the occurrence of the
Listed Event.
(f) The Dissemination Agent may conclusively rely on an opinion of counsel that the Issuer's
instructions to the Dissemination Agent underthis Section 5 comply with the requirements of
the Rule. .
SECTION 6. Termination of Reporting Obligation. The Issuer's and the Dissemination Agent's
obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption
or payment in full of all of the Bonds.
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SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under the Disclosure Certiticate, and may
discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.
The Dissemination Agent shall not be responsible in any manner for the content of any notice or report
prepared by the Issuer pursuant to this Disclosure Certificate. The Dissemination Agent may resign by
providing thirty days written notice to the Issuer. If at any time there is no designated Dissemination
Agent appointed by the Issuer, or if the Dissemination Agent so appointed is unwilling or unable to
perform the duties of Dissemination Agent hereunder, the Issuer shall be the Dissemination Agent and
undertake or assume its obligations hereunder.
Any person succeeding to all or substantially all of the Dissemination Agent's corporate crust business
shall be the successor to the Dissemination Agent hereunder without the execution or f1ling of any paper
or any further act. The Dissemination Agent may resign its duties hereunder at any time upon notice to
the Issuer.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Issuer and the Dissemination Agent may amend this Disclosure Certificate, and any
provision of this Disclosure Certificate may be waived, provided that the following conditions are
satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5, it may only be
made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature or status of an obligated person
with respect to the Bonds, or the type of business conducted.
(b) The undertaking, as amended or waived, would, in the opinion of nationally recognized bond
counsel, have complied with the requirements of the Rule at the time of the original issuance of
the Bonds, after taking into account any amendments or interpretations of the Rule, as well as
any change in circumstances; and
(c) The proposed amendment or waiver either (i) is approved by the Owners of the Bonds in the
same manner as provided in the Indenture for amendments to the Indenture with the consent of
Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially
impai!' the interests of the Owners or Beneficial Owners of the Bonds.
(d) In the event of any amendment or waiver of a provision of this Disclosure Certificate, the
Issuer shall describe such amendment in the next Annual Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on
the type (or in the case of a change of accounting principles, on the presentation) of financial
information or operating data being presented by the Issuer. In addition, if the amendment
relates to the accounting principles to be followed in preparing financial Statements, (i) notice of
such change shall be given in the same manner as for a Listed Event under Section 5(f), and (ii)
the Annual Report for the year in which the change is made should present a comparison (in
narrative form and also, if feasible, in quantitative form) between the fmancial Statements as
prepared on the basis of the new accounting principles and those prepared on the basis of the
former accounting principles. The Dissemination Agent shall not be obligated to enter into any
such amendment that modifies or increases its respective duties or obligations hereunder. The
Dissemination Agent may rely on an opinion of counsel that the amendment or waiver complies
with the requirements of the Rule.
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SECTION 9. Additional Information. Nothing in this Disclosure Certiticate shall be deemed to
prevent the issuer from disseminating any other information, using the means of dissemination set forth
in this Disclosure Certiticate or any other means of communication, or including any other information
in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by
this Disclosure Certiticate. If the Issuerchooses to include any information in any Annual Report or
notice of occurrence of a Listed Event in addition to that which is specifically required by this
Disclosure Certificate, the Issuer shall have no obligation under this Agreement to update such
information or include it in any future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Default. In the event of a failure of the Issuer or the Dissemination Agent to comply
with any provision of this Disclosure Certiticate, the Trustee at the written request of any Participating
Underwriter or the Owners of at least 25 % aggregate principal amount of Outstanding Bonds, shall, but
only to the extent it has been indemnified to its satisfaction from any cost, liability or expense
whatsoever, including, without limitation, fees and expenses of .its attorneys, or any Owner or
Beneficial Owner of the Bonds may talce such actions as may be necessary and appropriate, including
seeking mandate or specific perfonnance by court order, to cause the Issuer or Dissemination Agent, as
the case may be, to comply with its obligations under this Disclosure Certificate. A default under this
Disclosure Certificate shall not be deemed an Event of Default under the Indenture and the sole remedy
under this Disclosure Certificate in the event of any failure of the Issuer or the Dissemination Agent to
comply with this Disclosure Certificate shall be an action to compel perfonnance.
SECTION 11. Duties. Immunities and Liabilities of Trustee and Dissemination Agent. All of the
immunities, indemnities, and exceptions from liability in Article XI of the Indenture insofar as they
relate to the Trustee shall apply to the Dissemination Agent in this Disclosure Certificate. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and the issuer agrees to indemnify and save the Dissemination Agent, and Trustee, their
officers, directors, employees and agents, harmless against any loss, expense and liabilities which it
may incur arising out of or in the exercise or perfonnance of its powers and duties hereunder, including
the costs and expenses (including attorneys fees) of defending against any claim of liability, but
excluding liabilities due to the Dissemination Agent's or Trustee's negligence or willful misconduct.
The Dissemination Agent may rely on and shall be protected in acting or refraining from acting upon
any direction from the Issuer or an opinion of nationally recognized bond counsel. The Dissemination
Agent shall be paid compensation by the Issuer for its services provided hereunder in accordance with
its schedule of fees as agreed to between the Dissemination Agent and the Issuer from time-to-time and
all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance
of its duties of hereunder. The Dissemination Agent and Trustee shall have no duty or obligation to
review any information provided to them by the Issuer hereunder and shall no~ be deemed to be acting
in any fiduciary capacity for the Issuer, the Owners, or Beneficial Owners' or any other party. The
obligations of the Issuer under this section shall survive resignation or removal of the Dissemination
Agent and payment of the Bonds. No person shall have any right to commence any action against the
Dissemination Agent seeking any remedy other than to compel specific performance of this Agreement.
The Dissemination Agent shall not be liable under any circumstances for monetary damages to any
person for any breach of this agreement.
SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer,
the Trustee, the Dissemination Agent, the Participating Underwriters and Owners and Beneficial
Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
SECTION 13. Notices. Notices should be sent in writing to the following addresses. The following
information may be conclusively relied upon until changed in writing.
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Disclosure Representative:
Chula Vista Redevelopment Agency
Attention:
Dissemination Agent:
[Trustee]
Attention:
SECTION 14. Counterparts. This Disclosure Certificate may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same instrument.
CHULA VISTA REDEVELOPMENT AGENCY,
as Issuer
By:
Its: Treasurer
V.S Bank Trust
as Dissemination Agent
National
Association,
. By:
Its:
..
..
.
...
.
.
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. EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer:
Chula Vista Redevelopment Agency
Name of Bond Issue:
2000 Tax Allocation Bonds (Town Centre II Redevelopment Project)
Date of Issuance:
,2000
NonCE IS HEREBY GIVEN that the Chula Vista Redevelopment Agency has not provided an Annual
Report with respect to the above-named Bonds as required by the Indenture of Trust, dated as of June
1,2000. [The Issuer anticipates that the Annual Report will be filed by .j
Dated:
[
Dissemination Agent
j, on behalf of
By:
Its:
cc: Issuer
,.
,
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APPENDIX E
FORM OF BOND COUNSEL OPINION
.2000
ChuJa Vista Redevelopment Agency
Chula Vista, California
Re: $ Chula Vista Redevelopment Agency, 2000 Tax Allocation Bonds
(Town Centre II Redevelopment Project)
Ladies and Gentlemen:
We have examined certified copies of proceedings of the Chula Vista Redevelopment Agency (the
"Agency"), and other information and documents submitted to us relative to the issuance and sale by
the Agency of its 2000 Tax Allocation Bonds (Town Centre II Redevelopment Project) in the aggregate
principal amount of $ (the "Bonds") and such other information and documents as we
consider necessary to render this opinion. In rendering this opinion, we also have relied upon certain
representations of fact and certifications made by the Agency, the purchasers of the Bonds and others.
We have not undertaken to verify through independent investigation the accuracy of the representations
and certifications relied upon by us.
The Bonds have been issued pursuant to the authority contained in Part I of Division 24 of the Health
and Safety Code of the State of California (the "Act"), a resolution of the Agency adopted on
, 2000 (the "Resolution") and in accordance with the terms and conditions of an
Indenture of Trust dated as of June I, 2000 (the "Indenture"), by and between the Agency and
[Trustee], as Trustee. All terms not defined herein have the meanings ascribed to those terms in the
Indenture.
The Bonds are dated , 2000, and mature on the dates and bear interest at the rates per
annum set forth in the Indenture. The Bonds are registered Bonds in the form set forth in the
Indenture, redeemable in the amounts, at the times and in the manner provided for in the Indenture.
Based upon our examination of all of the foregoing, and in reliance thereon, and on all matters of fact
as we deem relevant under the circumstances, and upon consideration of applicable laws, we are of the
opinion that:
1. The Bonds have been duly and validly authorized by the Agency and are valid and binding
special obligations of the Agency and, except as specifically limited in the Indenture, payable solely
from Tax Revenues and other sources as and to the extent provided for in the Indenture. The Bonds are
enforceable in accordance with their terms and the terms of the Indenture, except to the extent that
enforceability may be limited by moratorium, bankruptcy, reorganization, fraudulent conveyance or
transfer, insolvency or other similar laws affecting creditors' rights to the application of equitable
principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and
to the limitations on legal remedies against public agencies in the State of California. The Bond.s are
special obligations of the Agency but are not a debt of the 'City of Chula Vista, the State of California
E-I
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or any other of its political subdivisions and neither the City of Chula Vista, the State of California nor
any of its political subdivisions is liable for the payment thereof, nor in any event shall the Bonds be
payable out of any funds or properties other than those of the Agency. The Bonds do not constitute an
indebtedness within the meaning of any c~nstitutional or statutory debt limitation or restriction.
2. The Indenture has been duly authorized by the Agency, is valid and binding upon the Agency
and is enforceable in accordance with its terms, except to the extent that enforceability may be limited
by moratorium, bankruptcy, reorganization, fraudulent conveyance or transfer, insolvency or other
similar laws affecting creditors' rights to the application of equitable principles if equitable remedies are
sought, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies
against public agencies in the State of California.
3. The Indenture creates a valid pledge of that which the Indenture purports to pledge, subject to
the provisions of the Indenture, except to the extent that such pledge may be limited by moratorium,
bankruptcy, reorganization, fraudulent conveyance or transfer, insolvency or other similar laws
affecting creditors' rights to the application of equitable principles if equitable remedies are sought, to
the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against
public agencies in the State of California.
4. Under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is
excluded from gross income for federal income tax purposes, and such interest is not an item of tax
preference for purposes of calculating the federal alternative minimum tax imposed on individuals and
corporations; however, we note that, with respect to corporations, such interest on the Bonds will be
included as an adjustment in the calculation of alternative minimnm taxable income which may affect
such corporation's alternative minimum tax liability.
5. Interest on the Bonds is exempt from State of California personal income tax.
The opinions set forth in paragraph 4 above are subject to. the condition that the Agency comply with
certain covenants and the applicable requirements of the Internal Revenue Code of 1986, as amended,
that must be satisfied subsequent to the issuance of the Bonds to assure that interest on the Bonds will
remain excludable from gross income for federal income tax purposes. Failure to comply with such
covenants and requirements may 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. We express no opinion regarding other tax consequences with
respect to the Bonds.
Certain requirements and procedures contained or referred to in the Indenture and the Ta;'( Certificate
may be changed, and certain actions may be taken, under the circumstances and subject to the terms
and conditions set forth in such documents, upon the advice or with the approving opinion of counsel
nationally recognized in the area of tax-exempt obligations. We express no opinion as to the exclusion
of interest on the Bonds from gross income for federal income tax purposes on and after the date on
which any such change occurs or action is taken upon the advice or approval of cOUllSel other than
Stradling Y occa Carlson & Rauth, a Professional Corporation. .
The opinions expressed herein are based on an analysis of existing Statutes, regulations, rulings and
judicial decisions and cover certain matters not direcdy addressed by such authorities. Such opinions
may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date
hereof. We have not undertaken to determine, or to inform any person, whether any such actions or
events are taken or do occur. Such actions or events may adversely affect the value or tax treatment of
the Bonds and we express no opinion with respect thereto.
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We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement
relating to the Bonds or other offering material relating to the Bonds and purchasers of the Bonds
should not assume that we have reviewed the Official Statement on their behalf.
Respectfully submitted,
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DRAFT AS OF APRIL 25, 2000
NEW ISSUE - BOOK-ENTRY ONLY
RATING
Standard &Poor'S:_
(See "CONCLUDING INFORMATION - Rating on the Bonds" herein)
In the opinion of SlradIing Yocca Carlson & &wh, a Professional Corporation, Newport Beach, California, Bond Counsel,
under t!-tisting statutes, regulations. rulings and judicial decisions. and assuming cenain representations and compliance with
certain covenonts and requirements discussed herein. interest on and origiMl issue discount with respect to the Bonds are
excluded from gross income for federal income tax purposes. and are not an item of lax preference for purposes of calculating
the federal auernative minirrwm taxes imposed on individuals and corporations. In the further opinion of Bond Counsel,
imerest on and on"ginal issue discoU1ll with respect to the Bonds are e:cempt from California personal income ta:tes. See
"IEGALMATTERS. Tax Matlers " herein.
SAN DIEGO COUNTY
STATE OF CALIFORNIA
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REDEVELOPMENT AGENCY OF THE CITY
OFCHULA VISTA
$5,035,000*
2000 TAX ALLOCATION BONDS
(TOWN CENTRE NO. II REDEVELOPMENT
PROJECT)
01Y Of
CHUIA VISTA
$6,305,000*
2000 TAX ALLOCATION BONDS
(OT A Y VALLEY ROAD REDEVELOPMENT
PROJECT)
$2,655,000*
2000 TAX ALLOCATION BONDS
(SOUTHWEST REDEVELOPMENT
PROJECT)
Dated: June 1, 2000
Due: September 1 As Shown On The
Inside Cover Page Hereof.
The cover page contains certain information for quick reference only. It is not a swmnary of the issue. Potential
investors must read the entire Official Statement to obtain information essential to the making of an informed
investment decision. See "BONDOWNERS' RISKS" herein for a discussion of special risk factors that should be
considered in evaluating the investment quality of the Bonds.
Interest on the respective series of Bonds is payable connnencing September I, 2000. semiannually thereafter on March 1 and
September I of each year until maturity or earlier redemption (s~ "THE BONDS - General Provisions" and "THE BONDS _
Redemption" herein).
The infonmtion contained within this Official Statement was prepared under the direction
of the Agency by the following firm serving as Fmancing Consultant to the Agency.
ROD GUNN ASSOCIATES, INC.
A DETAILED MATURITY SCHEDULE IS SET FORTH ON THE INSIDE COVER PAGE HEREOF
The respective series of Bonds are three separate and distinct issues of Bonds and rely upon separate and distinct sources of
security. Each respective issue of the Bonds is payable solely from certain taX revenues of the Redevelopment Agency of the
City of Chula Vista (the "Agency") as described herein and cenain other funds held under the applicable Indenture (see
"SOURCES OF PAYMENT FOR THE BONDS", "BONDOWNERS' RISKS" and "DEBT srRUCTURE" herein). It is
anticipated that the Bonds will be availabie for delivery in New York, New York, on or about June I, 2000 for deposit with
The Depository Trust Company (see "THE BONDS. General Provisions. Book-Entry Only System" herein).
The OOIe of the Official Statemenl is ----' 2000.
· Preliminary, subject to change.
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REDEVELOPlVlENT AGENCY OF THE CITY OF CHULA VISTA
$5,035,000.
2000 TAX ALLOCATION BONDS
(TOWN CENTRE NO. n REDEVELOPMENT PROJEC'I)
MA TUI'lTY SCHEDULE
Maturity Date Principal Interest . Maturity Date Principal Interest
September I Amount Rate . Yield September 1 Amount Rate Yield
2001 2015
2002 2016
2003 2017
2004 2018
2005 2019
2006 2020
2007 2021
2008 2022
2009 2023
2010 2024
2011 2025
2012 2026
2013 2027
2014 2028
$6,305,000.
2000 TAX ALLOCATION BONDS
(OTAY V ALLEY ROAD REDEVELOPMENT PROJEC1)
MA TURlTY SCHEDULE
Maturity Date Principal Interest Maturity Date Principal Interest
September 1 Amount Rate Yield September 1 Amount Rate Yield
2002 2017
2003 2018
2004 2019
2005 2020
2006 2021
2007 2022
2008 2023
2009 2024
2010 2025
2011 2026
2012 2027
2013 2028
2014 2029
2015 2030
2016
$2,655,000.
2000 TAX ALLOCATION BONDS
(SOUTHWEST REDEVELOPMENT PROJEC'I)
MATURITY SCHEDULE
Maturity Date Principal Interest Maturity Date Principal Interest
September 1 Amount Rate Yield September 1 Amount Rate Yield
2001 2016
2002 2017
2003 2018
2004 2019
2005 2020
2006 2021
2007 2022
2008 2023
2009 2024
2010 2025
2011 2026
2012 2027
2013 2028
2014 2029
2015 2030
· Preliminary. subject to change.
ii
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REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
CHULA VISTA, CALJFORNIA
AGENCY GOVERNING BOARD AND CITY COUNCIL
Shirley G. Horton, Mayor and Chair
Patty Davis, Counalmember
John S. Moot, Counalmember
Stephen C. Padilla, Counalmember
Mary Salas, Councilmember
CITY AND AGENCY STAFF
David D. Rowlands, Jr., City Manager
Sid Morris, Assistant City Manager
George Krempl, Assistant City Manager
David Palmer, Deputy City Manager
Robert Powell, Deputy City Manager/Director of Finance
Chris Salomone, Director of Community Development
Lyle Haynes, Assistant Director of Community Development
Susan Bigelow, City Clerk
John Kaheny, City Attorney
PROFESSIONAL SERVICES
Bond Counsel and Disclosure Counsel
Stradling Y occa Carlson & Rauth,
a Professional Corporation
Newport Beach, California
Financing Consultant
Rod Gunn Associates, Inc.
Seal Beach, California
Trustee
U.S. Bank Trust National Association
Los Angeles, California
FOR ADDITIONAL INFORMA nON
Robert Powell, Director of Finance, City ofChuIa Vista, California (619) 691-5051
Rod Gunn Associates, Inc. (562) 598-7677
iii
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TABLE OF CONTENTS
INTRODUCTORY STATElVlENT....................l
The Issuer .................................................1
Security and Sources of Repayment........... ........ 2
Purpose .......... ......... ................ ................. 2
The Bonds ....... .... ...... ...................... :.........2
Legal Matters ............................................. 3
Professional Services ........................... ......... 4
Offering of the Bonds ...................................4
Information Concerning this Official Statement..... 5
SELECTED ESSENTIAL FACTS .................... 6
THE BONDS............................................... 7
General Provisions....................................... 7
Authorization ......... .................................... 9
Estimated Sources and Uses of Funds ...............10
Redemption. .......... ....... ............................10
SOURCES OF PAYMENT FOR THE BONDS...14
Pledge of Tax Revenues ...............................14
Reserve Account ........................................14
BONDOWNERS'RISKS ..............................15
Factors Which May Affect Tax Revenues ..........15
Recent Legislation ......................................18
Loss of Tax Exemption ................................18
Secondary Market........... ........................... .18
Projected Tax Revenues Assumptions and Bond
Retirement ......................:...... ................18
THE AGENCY ...........................................23
Government Organization ..~...........................23
Agency Powers ...... ...... ..............................23
Redevelopment Plan.. .... .............. ................24
Plan Limitations.............. .......................... .24
Capital Projects.. ,...................................... .25
Low and Moderate Income Housing .................25
THE PROJECT AREAS ...............................26
TOWN CENTRE n PROJECT AREA .............26
Description of the Project Area......:.............. ..26
Major Taxpayers.. ......... ............... ..............27
Assessment Appeals ................................... .28
Assessed Valuations ....................................29
OTA Y VALLEY ROAD PROJECT AREA........30
Description of the Project Area.......................30
Major Taxpayers ........................................31
Assessment Appeals ..... ............. ..................32
Assessed Valuations ....................................33
SOUTHWEST PROJECT AREA ....................34
Description of the Project Area.......................34
Major Taxpayers ....................................... .35
Assessment Appeals ....................................36
Assessed Valuations ....................................36
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FINANCIAL INFORl\'IATlON ...................... 37
Agency Budgetary Process and Administration... 37
Public Employee Salaries and Benefits ............. 37
Agency Accounting Records and Financial
Statements ..... ......... .................... ........... 37
Tax Increment Revenues.............................. 38
Tax Sharing Agreements.............................. 47
DEBT STRUCTURE................................... 49
Outstanding Indebtedness of the Town Centre II
Project Area........................................... 49
Outstanding Indebtedness of the Oray Valley
Road Project Area ................................... 49
Outstanding Indebtedness of the Southwest
Project Area........................................... 50
Scheduled Debt Service on the Town Centre II
Project Bonds ......................................... 51
Scheduled Debt Service on the Oray Valley Road
Project Bonds ......................................... 52
Scheduled Debt Service on the Southwest Project
Bonds ..................................................53
Additional Agency Indebtedness ..................... 54
SUMMARY OF THE INDENTURES .............. 56
Establishment of Funds................................ 56
Investment of Funds ................................... 57
Other Covenants of the Agency...................... 58
Amendment of Indenture.............................. 59
Events of Default and Remedies..................... 59
Defeasance of Bonds................................... 61
LEGAL MATTERS .................................... 62
Enforceability of Remedies ........................... 62
Approval of Legal Proceedings ...................... 62
Tax Matters ............................................. 62
Absence of Litigation.................................. 63
CONCLUDING INFORMATION................... 64
Rating on the Bonds ................................... 64
The Financing Consultant............................. 64
Additionallnformation ................................ 64
References............................................... 64
Execution........... .............. ... ..... ...............64
DEFINITIONS OF CERTAIN TERMS...........A-l
CITY OF CHULA VISTA INFORMATION
STATEMENT ... ....... .................... .......... B-1
AGENCY AUDITED FINANCIAL
STATEMENTS ................ ................... .... C-1
FORM OF CONTINUING DISCLOSURE
CERTIFICATE. ................ .... .............. ...0-1
FORM OF BOND COUNSEL OPINION.........E-1
iv
OFFICIAL STATEMENT
" REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ..
. , $5,035,000*
2000 TAX ALLOCATION BONDS
(TOWN CENTRE NO. II REDEVELOPMENT PROJECT)
$6,305,000*
2000 TAX ALLOCATION BONDS
(OTA Y VALLEY ROAD REDEVELOPMENT PROJECT)
$2,655,000*
2000 TAX ALLOCATION BONDS
(SOUTHWEST REDEVELOPMENT PROJECT)
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
ChuIa Vista (the" Agency") 2000 Tax Allocation Bonds (Town Centre No. II Redevelopment Project)
(the "Town Centre II Project Bonds"), in the aggregate principal amount of $5,035,000*, the 2000 Tax
Allocation Bonds (Otay Valley Road Redevelopment Project) (the "Otay Valley Road Project Bonds")
in the aggregate principal amount of $6,305,000* and the 2000 Tax Allocation Bonds (Southwest
Redevelopment Project) (the "Southwest Project Area Bonds") in the aggregate principal amount of
2,655,000*. Collectively, the Town Centre II Project Bonds, the Otay Valley Road Project Bonds and
the Southwest Project Bonds are referred to herein as the "Bonds".
INTRODUCTORY STATEMENT
This Introductory Statement contains only a brief description of these issues and does not purpon to be
complete. The Introductory Statement is subject in all respects to more complete information in the
entire Offidal Statement and the offering of the Bonds to potential investors is made only by means of
the entire Offidal Statement and the docwnents summarized herein. Potential investors must read the
entire Offiaal Statement to obtain information essential to the making of an informed investment
deasion (see "BONDOWNERS' RISKS" herein).
The Issuer
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 Co=unity Redevelopment Law of the State
of California, 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 (the "City Council") 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 ChuIa Vista (the "City") is located on 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, ChuIa Vista is the
second largest city in San Diego County (see "APPENDIX B - CITY OF CHULA VISTA INFORMATION
STATEMENT" herein).
· Preliminary. subject to change.
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Security and Sources of Repayment
The Bonds. The Bonds of each series are issued and secured under a separate Indenture of Trust,
dated as of June I, 2000 (individually, the "Indenture" and collectively, the "Indentures"), by and
between the Agency and U.S. Bank Trust National Association, Los Angeles, California, as Trustee
(the "Trustee") (see "SUMMARY OF THE INDENTURES" herein).
Pursuant to each respective Indenture, the Agency has pledged to the repayment of the respective series
of Bonds (and has secured by a lien on) Tax Revenues, as detined herein. With respect to the Town
Centre 11 Project Bonds, Tax Revenues consist of taX increment revenues allocated to the Agency
pursuant to Section 33670 of the Redevelopment Law ("Tax Increment Revenues") for the Agency's
Town Centre No. II Project Area, excluding (i) amounts required to be deposited in the Agency's Low
and Moderate Income Housing Fund and (ii) amounts required to be paid under the Tax Sharing
Agreement. With respect to the Otay Valley Road Project Bonds, Tax Revenues consist of Tax
Increment Revenues of the Agency's Otay Valley Road Project Area excluding amounts required to be
deposited in the Agency's Low and Moderate Income Housing Fund. With respect to the Southwest
Project Bonds, Tax Revenues consist of Tax Increment Revenues of the Agency's Southwest Project
Area excluding (i) amounts required to be deposited in the Agency's Low and Moderate Income
Housing Fund and (ii) amounts required to be paid under the Tax Sharing Agreements (see "THE
AGENCY - Low and Moderate Income Housing", "DEBT STRUCTURE" "Tax Sharing Agreements".
"FINANCIAL INFORll<IATION - Tax Increment Revenues" and "BONDOWNERS' RISKS" herein).
The Project Areas. The Redevelopment Plan for the Town Centre No. II Project Area ("Town Centre
II Project Area") was adopted in 1978. The Town Centre II Project Area consists of 212 acres of
mixed commercial and municipal uses. The Redevelopment Plan for Otay Valley Road Project Area
(the "Otay Valley Road Project Area") was adopted in 1983. The Otay Valley Road Project Area
consists of 770 acres of primarily industrial uses. The Redevelopment Plan for the Southwest Project
Area ("Southwest Project Area") was adopted in 1990. The Southwest Project Area consists of 1,100
acres of mixed residential, commercial and industrial uses (see "THE PROJECT AREAS" herein). The
Town Centre II Project Area, the Otay Valley Road Project and the Southwest Project Area shall herein
collectively be referred to as the "Project Areas".
The Bonds are limited obligations of the Agency. The Bonds do not constitute a debt or liability
of the City, 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 ta.--dng power of the City, 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 ad valorem taxing power.
Purpose
The Bonds are being issued to provide funds to eStablish separate reserve accounts, to pay the expenses
of the Agency in connection with the issuance of the Bonds and to provide funds for the redevelopment
activities of the Agency (see "THE BONDS - Estimated Sources and Uses of Funds" herein).
The Bonds
Redemption. The Town Centre 11 Project Bonds maturing September 1, ~ and September 1, _
are subject to mandatory redemption, without premium, prior to their maturity date, in part by lot on
September 1 in each year commencing September 1, _ with respect to the Town Centre II Project
Bonds maturing September 1, _ and commencing September 1, _ with respect to the Town
Centre I1 Project Bonds maturing September I, _' from Sinking Account payments under the
2
1)-&
,. , .,.
Indenture. The Otay Valley Road Project Bonds maturing September 1, are subject to mandatory
redemption, without premium, prior to their maturity date, in part by lot on September 1 in each year
commencing September 1, from Sinking Account Payments under the Indenture. The Southwest
Project Bonds maturing September 1, _ are subject to mandatory redemption, without premium,
prior to their maturity date, in part by lot on September 1 in each year commencing September 1, -
from Sinking Account Payments under the Indenture (see "THE BONDS - Redemption - Mandatory
Sinking Account Redemption" herein).
The Bonds are also subject to optional redemption prior to maturity, in whole or in part, in a manner
detertnined by the Agency, on September I, 2003, and on any Interest Payment Date thereafter at a
redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption,
plus a premium, as described herein (see "THE BONDS - Redemption - Optional Redemption" herein).
Denominations. The Bonds will be issued in the minimum denomination of $5,000 each or any
integral multiple thereof (see "THE BONDS - General Provisions" herein).
Registration, Transfer and Exchange. The Bonds will be issued in fully registered form without
coupons. Any Bond may, in accordance with its terms, be transferred or exchanged, pursuant to the
provisious of the Indenture (see "THE BONDS - General Provisions - Transfer or Exchange of Bonds"
herein). When delivered, the Bonds will be registered in the name of The Depository Trust Company,
New York, New York ("DTC"), or its nominee. DTC will act as securities depository for the Bonds.
Individual purchases of Bonds will be made in book-entry form only. Purchasers of the Bonds will not
receive certificates representing their Bonds purchased (see "THE BONDS - General Provisions - Book-
Entry Only System" herein).
Payment. Principal of the Bonds and any premium upon redemption will be payable in each of the
years and in the amounts set forth on the cover page hereof upon surrender at the corporate trust office
of the Trustee in St. Paul, Minnesota. Interest on the Bonds will be paid by check of the Trustee
mailed by first class mail to the person entitled thereto (except as otherwise described herein for interest
paid to an account in the United States of America by wire transfer as requested in writing no later than
the applicable Record Date by an owner of $1,000,000 or more in aggregate principal amount of
Bonds) (see "THE BONDS _ General Provisions" herein). Initially, interest on and principal and
premium, if any, of the Bonds will be payable when due by wire of the Trustee to DTC which will in
turn remit such interest, principal and premium, if any, to DTC Participants (as dermed herein), which
will in turn remit such interest, principal and premium, if any, to Beneficial Owners (as dermed herein)
of the Bonds (see "THE BONDS _ General Provisions - Book-Entry Only System" herein).
Notice. Notice of any redemption will be mailed by first class mail by the Trustee at least thirty (30)
but no more than sixty (60) days prior to the date fixed for redemption to the registered owners of any
Bonds designated for redemption and to the Securities Depositories and Information Services provided
in the Indenture. Neither failure to receive such notice nor any defect in the notice so mailed will affect
the sufficiency of the proceedings for redemption of such Bonds or the cessation of accrual of interest
on the redemption date (see "THE BONDS - Redemption - Notice or Redemption" herein).
Legal Matters
Ail legal proceedings in connection with the issuance of the Bonds are subject to the approving opinion
of Stradling Y occa Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond
Counsel. Such opinion, is described more fully under the heading "LEGAL MATTERS" herein. Certain
legal matters will be passed on for the Agency by the City Attorney and by Stradling Y occa Carlson &
Rauth, a Professional Corporation, Newport Beach, California as Disclosure Counsel.
3
D-7
Ta.x Exemption. In the opinion of Bond Counsel, subject, however, to certain qualifications described
herein, under existing law, the interest on the Bonds is excluded from gross income for federal income
taX purposes, such interest is not an item of taX preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations, although, for the purpose of computing the
alternative minimum tax imposed on certain corporations, such interest is taken into account in
determining certain income and earnings. In the further opinion of Bond Counsel, such interest is
exempt from California personal income taxes. See "LEGAL MATTERS - Ta.x Matters" herein.
Professional Services
U.S. Bank Trust National Association, Los Angeles, California, will serve as trustee (the "Trustee")
under the Indentures. The Trustee will act on behalf of the Bondowners 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 Indentures, and otherwise to hold all the
offices and perform all the functions and duties provided in the Indentures to be held and performed by
the Trustee.
Rod Gunn Associates, Inc., Seal Beach, California, Financing Consultant, advised the Agency as to the
financial strUcture and certain other financial matters relating to the Bonds. Fees payable to Bond
Counsel, Disclosure Counsel and the Financing Consultant are contingent upon the sale and delivery of
the Bonds.
The Agency's financial Statements for the fiscal year ended June 30, 1999, attached hereto as
"APpENDIX C" have been audited by Calderon, J aham & Osborn, Certified Public Accountants and
Consultants, San Diego, California.
Offering of the Bonds
Authority for Issuance. The Bonds are to be isSued and secured pursuant to the respective Indentures,
as authorized by Resolution No. _ of the Agency adopted on May 2, 2000. The Bonds are also
issued in accordance with the laws of the State of California (the "State"), and particularly the
Co=unity Redevelopment Law of the State, constituting Part 1 of Division 24 (co=encing with
Section 33000) of the Health and Safety Code of the State (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 Y occa Carlson & Rauth, a Professional Corporation, Newport
Beach, California, Bond Counsel. It is anticipated that the Bonds will be available for delivery in New
York, New York, on or about June 1, 2000.
No dealer, broker, salesperson or other person has been authorized by the Agency or the
Financing Consultant to give any information or to make any representations in connection with
the offer or sale of the Bonds described herein, other than as contained in this Official Statement,
and if given or made, such other information or representations must not be relied upon as having
been authorized by any of the foregoing.
This Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy,
nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful
for such person to make such offer, solicitation or sale or to any person to whom it is unlawful to
make such offer, solicitation or sale.
4
J)-~
.~
In connection with the offering of the Bonds, 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 dealer banks and
banks acting as agent at prices lower than the public offering prices stated on the inside cover
p.'\ge hereof and said public offering prices may be changed from time to time by the Underwriter.
Information Concerning this Official Statement
This Official Statement speaks only as of its date. The information set forth herein has been obtained
by Rod Gunn Associates, Inc. from the Agency, the City and other sources which are believed to be
reliable, 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 Financing Consultant, the
Agency or the City. 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 representatious of fact.
Preliminary Official Statement Deemed Final. The information set forth herein is in a form deemed
final, as of its date, by the Agency and the City for the purpose of Rule 15c2-12 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.
Continuing Disclosure. The Agency will covenant to provide annually certain fmancial information
and operating data relating to the Project Areas by not later than March 31 each year co=encing
March 31, 2001 and to provide the audited Financial Statements of the Agency for the fiscal year
ending June 30, 2000 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 Infonnation Repository certified by the Securities and Exchange Commission (the
"Repositories") and a State repository, if any. The notices of material events will be timely f1led by the
Agency with the Municipal Securities RuIemaking 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 0 _ FORM OF CONTINUING DISCLOSURE CERTIFICATE".
The Agency has not previously undertaken, nor has previously failed to comply with any undertaking,
to provide any required continuing disclosure.
Availability of Legal Documents. The summaries and references contained herein with respect to the
lndenmre, the Bonds and other stamtes or documents do not purport to be comprehensive or definitive
and are qualified by reference to each such document or stamte, and references to the Bonds are
qualified in their entirety by reference to the form thereof included in the Indenture. Definitions of
certain terms used herein are set forth in "APPENDIX A" hereto. Copies of the documents described
herein are available for inspection during the period of initial offering of the Bonds at the offices of the
Financing Consultant, Rod GUM Associates, Inc., 3010 Old Ranch Parkway, Suite 330, Seal Beach,
California 90740, telephone (562) 598-7677. Copies of these documents may be obtained after delivery
of the Bonds from the Agency at 276 Fourth Avenue, ChuIa Vista, California 91910, telephone (619)
691-5051.
5
{)-1
SELECTED ESSENTIAL FACTS
The following summary does not purport to be complete. Reference is hereby made to the complete
Official Statement in this regard.
THE PROJECT AREAS
Size of the Project Area:
Ten Largest Secured Property Taxpayers, Expressed
as a Percentage of 1999/00 Secured Assessed
Valuation:
THE BONDS
Principal Amount:
1999/00 Projected Tax Revenues:
Maximum Annual Debt Service on the Bonds:
Ratio of 1999/00 Tax Revenues to Maximum
Annual Debt Service on the Bonds:
Parity Debt Coverage Ratio Req,uirement:
" Preliminary, subject to change.
Town
Centre 11
212 acres
98.5%
$5,035,000*
$725,400
$415,000*
175%*
175%
6
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Otay
Valley Road
770 acres
66.6%
$6,305,000*
$711,500
$490,000*
145%*
145%
Southwest
1,100 acres
20.2%
$2,655,000*
$326,600
$210,000*
156%"
140%
THE BONDS
General Provisions
Repayment of the Bonds. Interest is payable on the Bonds at the rates per annum set forth on the
inside cover page hereof. Interest with respect to the Bonds will be computed on the basis of a year
consisting of 360 days and twelve 30-day months.
Each Bond will be dated as of June 1, 2000, and interest on the Bonds will be payable commencing
September 1, 2000 and thereafter from the Interest Payment Date next preceding the date of
authentication thereof, unless (a) it is authenticated on or before an Interest Payment Date and after the
close of business on the preceding Record Date, in which event interest thereon will be payable from
such Interest Payment Date; (b) it is authenticated on or before August 15, 2000, in which event
interest thereon will be payable from June 1, 2000; or (c) interest on any Bond is in default as of the
date of authentication thereof, in which event interest thereon will be payable from the date to which
interest has previously been paid in full.
Interest will 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.
Interest on the Bonds shall be paid by check of the Trustee mailed by fIrst class mail, postage prepaid,
on each Interest Payment Date to the Owners of the Bonds at their respective addresses shown on the
Registration Books as of the close of business on the preceding Record Date; provided, however, that at
the written request of the Owner of Bonds in an aggregate principal amount of at least $1,000,000,
which written request is on file with the Trustee as of any Record Date, interest on 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 written request. The principal
of and premium. (if any) on the Bonds shall be payable in lawful money of the United States of America
by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee in St. Paul,
Minnesota.
Book-Entry Only System. DTC will act as securities depository for the Bonds. The ownership of one
fully registered Bond for each maturity in the amounts shown on the inside cover page hereof will be
registered in the name of Cede & Co., as nominee for DTC. DTC is a limited purpose trust company
organized under the laws of the State of New York, 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,
as amended. DTC was created to hold securities of its participants (the "DTC Participants") and to
facilitate the clearance and settlement of securities transactions among DTC Participants in such
securities through electronic book-entry charges in the accounts of the DTC Participants, thereby
eliminating the need of physical movement of securities certificates. DTC Participants include
securities brokers and dealers, banks, trUst companies, clearing corporatious and certain other
organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is
also available to others such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC Participant, either directly or indirectly (the "Indirect
Participants").
7
f)-II
The DTC Participants shall receive a credit balance in the records of DTC representing ownership
interests in the Bonds. The ownership interest of each actual purchaser of each Bond (the "Beneficial
Owner") will be recorded through the records of the DTC Participant. Beneticial Owners are expected
to receive a written confinnation of their. purchase providing details of the Bond acquired. Transfers of
ownership interests in the Bond will be accompanied by book entries made by DTC and, in turn, by the
DTC Participants who act on behalf of the Beneficial Owners. The Beneficial Owners will not receive
certiticates representing their ownership interest in the Bonds, except as specifically provided in the
Indenture.
So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to
the Owners or registered owners of the Bonds shall mean Cede & Co. and shall not mean the Beneficial
Owners of the Bonds.
DTC may determine to discontinue providing its service with respect to the Bonds at any time by giving
notice to the Agency and the Trustee and discharging its responsibilities with respect thereto under
applicable law. Under such circumstances, Bond certificates are required to be delivered as described
in the Indenture. The Beneficial Owners, upon registration of certificates held in the Beneficial
Owner's name, will become the registered owners of the Bonds.
The Agency may determine that continuation of the system of book-enrry transfers through DTC (or a
successor securities depository) is not in the best interests of the Beneficial Owners. In such event,
Bond certificates will be delivered as described in the Indenture.
The Agency and the Trustee will recognize DTC or its nominee as the sole Bondowner for all purposes,
including notices and voting. Conveyance of notices and other communications by DTC to DTC
Participants, by DTC Participants to Indirect Participants and by DTC ParticipantS and Indirect
Participants to Beneficial Owners will be governed by arrangements among them, subject to any
statutory and regulatory requirements as may be in effect from time to time.
Principal, Sinking Account, interest payments and premium, if any, with respect to the Bonds wil! be
made to DTC or its nominee, Cede & Co., as registered owner of the Bonds. Upon receipt of moneys,
DTC's current practice is to immediately credit the accounts of the DTC Participants in accordance
with their respective holdings shown on the records of DTC. Payments by DTC Participants and
Indirect Participants to Beneficial Owners wil! be governed by standing instructions and customary
practices, as is now the case with municipal securities held for the accounts of customers in bearer form
or registered in "street name", and wil! be the responsibility of such DTC participant or Indirect
Participant and not of DTC, the Agency or the Trustee, subject to any statutory and regulatory
requirements as may be in effect from time to time.
The Agency or the Trustee cannot and do not give any assurance that DTC, DTC Participants or
Indirect participants will distribute to the Beneficial Owners (i) payments of interest, principal or
premium, on the Bonds, (ii) certificates representing an ownership interest in or other confirmation of
ownership interests in the Bonds, or (iii) redemption or other notices sent to DTC or Cede & Co., its
nominee, as the registered owner of the Bonds, or that they will do so on a timely baSis or that DTC,
DTC Participants or Indirect Participants will service or act in the manner described in this Official
Statement. The current "Rules" applicable to DTC are on fIle with the Securities and Exchange
Commission and the current "Procedures" of DTC to be followed in dealing with DTC participants are
on file with DTC.
Neither the Agency nor the Trustee wil! have any responsibility or obligations to the DTC Participants,
the Indirect Participants or the Beneficial Owners with respect to (i) the accuracy of any records
, maintained by DTC or any DTC Participants or any Indirect participants; (ii) the payment by DTC or
any DTC Participants or any Indirect participants of any amount due to any Beneficial Owner in respect
of the principal amount, redemption price or interest on the Bonds; (Hi) the delivery by DTC or any
8
b -/ J--
DTC Participants or any Indirect Participants of any notice to any Beneticial Owner which is required
or permitted under the terms of the Indenture to be given to Bondowners; (iv) the selection of the
Beneticial Owners to receive payment in the event of any partial redemption of the Bonds; or (v) any
consent given or other action taken by DTC as the Bondowner.
Transfer or Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred or
exchanged, pursuant to the provisions of the Indentures, upon surrender of such Bond for cancellation
at the principal corporate trUst office 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 of
like maturity and aggregate principal amount. The Trustee will collect any tax or other governmental
charge required to be paid with respect to such transfer or exchange. The Trustee may refuse to
transfer or exchange any Bonds or portions thereof during the period established by the Trustee for
selection of Bonds for redemption, or any Bonds selected for redemption.
Authorization
The Bonds are to be issued and secured pursuant to the Indenture authorized by Resolution No.
of the Agency adopted on May 2, 2000. The Bonds are also issued in accordance with the laws of the
State of California (the "State"), and particularly the Comnnmity Redevelopment Law of the State,
constituting Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of
the State.
9
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T. .,.
Estimated Sources and Uses of Funds
Under the provisions of the Indenture, the Trustee will receive the proceeds from the sale of the Bonds
and will apply them as follows:
Sources of Funds
Otay
Valley Road
Southwest
Town
Centre n
Principal Amount of Bonds
Underwriter's Discount
Accrued Interest
Total Available Funds
Uses of Funds
Interest Account
Redevelopment Fund
Reserve Account (1)
Costs of Issuance Fund ('>)
Total Use of Funds
(I) An amount equal to the respective Reserve Requirement (see "SOURCES OF PAYMENT FOR THE BONDS -
Reserve Account" herein).
(:!) Expenses include fees of Baud Counsel, the Financing Consultant, the Disclosure Counsel, Trustee, costs of
. printing the Official Statement, rating agency fees and other costs of issuance of the Bonds.
Deposit to the Redevelopment Fund. Proceeds deposited to the Redevelopment Fund will be used to
fund certain redevelopment activities of the Agency. These activities are expected to include [to be
completed] .
Redemption
Optional Redemption. The Bonds maturing on or before September 1, 2003 are not subject to
optional redemption prior to their respective maturiry dates. The Bonds maturing on or after September
1, 2004 are subject to redemption prior to maturity at the option of the Agency as a whole or in part
among maturities designated by the Agency and by lot within a maturity, from any source of available
funds, on any date on or after September 1, 2003, at the following respective redemption prices
(expressed as a percentage of the principal amount of Bonds to be redeemed) together with accrued
interest thereon to the date of redemption:
Redemption Periods
September 1, 2003 through August 31,2006
September 1, 2007 through August 31,2010
September 1, 2010 through August 31, 2011
September 1,2011 through August 31,2012
September 1, 2012 and thereafter
Redemption Prices
103.0%
102.5%
102.0%
101.0%
100.0%
10
..D -/ <I
T. "T
Mandatory Sinking Account Redemption. The Town Centre II Project Bonds maturing September I,
_ and September I, _ (collectively, the "Town Centre II Project Term Bonds"), the Otay Valley
Road Project Bonds maturing September 1, _ (the "Otay Valley Road Project Term Bonds") and the
Southwest Project Bonds maturing Sep,ternber 1, _ (the "Southwest Project Term Bonds") are
subject to mandatory redemption, in part by lot, on September 1 in each year commencing September
1, _ with respect to the Town Centre II Project Term Bonds maturing September 1, _, and
commencing September 1, _ with respect to the Town Centre II Project Term Bonds maturing
September I, _, and commencing September 1, _ with respect to the Otay Valley Road Project
Term Bonds and commencing September 1, _ with respect to the Southwest Project Term Bonds
from mandatory Sinking Account payments at a redemption price equal to the principal amount thereof
to be redeemed, together with accrued interest thereon to the date of redemption without premium, in
the aggregate principal amounts and on September 1 in the' years as set forth in the following schedules
or in lieu of redemption thereof, the Term Bonds may be purchased by the Agency and tendered to the
Trustee pursuant to the provisions of the Indenture; provided, however, that if some but not all of the
Term Bonds have been redeemed pursuant to the optional redemption provisions described herein, the
total amount of all future Sinking Account payments attributable to such Term Bonds will be reduced
by the aggregate principal amount of such Term Bonds so redeemed, to be allocated among such
Sinking Account payments in integral multiples of $5,000 as determined by the Agency (written notice
of which determination shall be given by the Agency to the Trustee).
SCHEDULE OF MANDATORY SINKING ACCOUNT REDEMPTIONS
TOWN CENTRE n PROJECT TERM BONDS MATURING SEPTEMBER 1, _
September 1 Principal
Year Amount
(maturity)
SCHEDULE OF MANDATORY SINKING ACCOUNT REDEMPTIONS
TOWN CENTRE n PROJECT TERM BONDS MATURING SEPTEMBER 1,
September 1 Principal
Year Amount
(maturity)
11
,D-/s-
T' ""T
SCHEDULE OF MANDATORY SINKING ACCOUNT REDEMPTIONS
OTA Y V ALLEY ROAD PROJECT TERM BONDS MATURING SEPTEMBER 1,
September 1 Principal
~ . . Amount
(maturity)
SCHEDULE OF MANDATORY SINKING ACCOUNT REDEMPTIONS
SOUTHWEST PROJECT TERM BONDS MATURING SEPTEMBER 1, -
September 1 Principal
~ Amount
(maturity)
Notice of Redemption. When redemption is authorized or required, the Trustee on behalf and at the
expense of the Agency shall mail (by first class mail, postage prepaid) notice of any redemption at least
thirty (30) but not more than sixty (60) days prior to the redemption date, to (i) the Owners of any
Bonds designated for redemption at their respective addresses appearing on the Registration Books, and
(ii) the Securities Depositories and to one or more Information Services designated in a Request of the
Agency delivered to the Trustee; provided, however, that such mailing shall not be a condition
precedent to such redemption and neither failure to receive any such notice 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. Notice of redemption of the Bonds (other than notice of mandatory Sinking Account
redemption and other than notice that refers to Bonds which are the subject of an advance refunding)
shall be given only if sufficient funds have been deposited with the Trustee to pay the redemption price
of the Bonds to be redeemed.
12
J)-/~
Effect of Redemption. From and after the date tixed for redemption, if funds available for the
payment of the redemption price of and interest on the Bonds so called for redemption shall have been
duly deposited with the Trustee, such Bonds SO called shall cease to be entided to any benefit under the
Indenture other than the right to receive payment of the redemption price and accrued interest to the
redemption date, and no interest shall accrue thereon from and after the redemption date specitied in
such notice.
Partial Redemption. In the event only a ponion of any Bond is called for redemption, then upon
surrender of such Bond the Agency will execute and the Trustee will authenticate and deliver to the
Owner thereof, at the expense of the Agency, a new Bond or Bonds of the same interest rate and
maturity, of authorized denominations in an aggregate principal amount equal to the unredeemed
portion of the Bond to be redeemed.
Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption
of less than all of the Bonds, the Trustee shall select Bonds for redemption by lot in any manner which
the Trustee deems appropriate and fair.
13
f)-/7
SOURCES OF PAYMENT.FOR THE BONDS
Pledge of Ta....: Revenues
The respective Tax Revenues are pledged to the payment of principal of and interest on the respective
Bonds pursuant to the Indenrures until the Bonds 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 Indentures and otherwise to
protect the interests of the Bondowners in the event of default by the Agency.
The Bonds are limited 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 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 ad valorem taxing power.
The Agency has irrevocably pledged a lien on the Tax Revenues, as defmed herein, of the Town Centre
II Project Area to the repayment of the Town Centre II Project Bonds. Such Tax Revenues consist of
Tax Increment Revenues allocated to the Agency's Town Centre II Project Area excluding (i) amounts
required to be deposited in the Agency's Low and Moderate Income Housing Fund and (ii) amounts
required to be paid under a Tax Sharing Agreement. The Agency has irrevocably pledged a lien on the
Tax Revenues of the Otay Valley Road Project Area to the repayment of the Otay Valley Road Project
Bonds. Such Tax Revenues consist of Tax Increment Revenues allocated to the Agency's Otay Valley
Road Project Area, excluding that portion of such Tax Increment Revenues required to be deposited in
the Agency's Low and Moderate Income Housing Fund. The Agency has irrevocably pledged a lien on
the Tax Revenues of the Southwest Project Area to the repayment of the Southwest Project Bonds.
Such Tax Revenue consist of Tax Increment revenues allocated to the Agency's Southwest Project
Area, excluding (i) amounts required to be paid under the Tax Sharing Agreements and (ii) amounts
required to be deposited in the Agency's Low and Moderate Income Housing Fund (see "DEBT
STRUCTURE _ Ta." Sharing Agreements", "THE AGENCY - Low and Moderate Income Housing",
"FINANCIAL INFORMATION _ Ta." Increment Revenues" and "BONDOWNERS' RISKS" herein).
Reserve Account
Reserve Requirement. A Reserve Account has been established under each Indenture to be held by
the Trustee to further secure the timely payment of principal and interest on the respective series of
Bonds. The amount required to be maintained in the Reserve Accounts, $415,000*, in the case of the
Town Centre II Project Bonds, $490,000* in the case of the Otay Valley Road Project Bonds, and
$210,000* in the case of the Southwest Project Bonds, is an amJunt equal to the lesser of 10% of the
principal amount of the respective series of Bonds, Maximum Annual Debt Service or 125% of average
annual Debt Service (each, a "Reserve Requirement"). Subject to certain rights of the Trustee, in the
event that the amount on deposit with the Trustee to pay principal and interest due on the respective
series of Bonds is less than the full amount required for such purpose on the date due, the Trustee will
withdraw from the applicable Reserve Account, the difference between the amount required to be on
deposit and the amount available on such date. Each Indenture provides that in lieu of a cash deposit,
the Agency may satisfy all or a portion of the applicable Reserve Requirement by means of a Qualified
Reserve Account Credit Instrument, which consists of a qualifying letter of credit, surety bond,
insurance policy or similar tinancial undertaking (see "APPENDLX A - DEFINITIONS OF CERT AlN
TERMS" herein).
. Preliminary, subject to change.
14
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BONDOWNERS' RISKS
The purchase oj the Bonds involves investment risk. If a risk faaor materializes to a sufficient degree,
it could delay or prevent payment oj prindpal of ariiNor interest on the Bonds. Such risk factors
include, but are not limited to, the following matted 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 and interest on the respective series of Bonds depends on the
timely receipt of Tax Revenues as projected herein (see "Projected Tax Revenues Assumptions and Bond
Retirement" below). Projections of Tax Revenues are based on the underlying assumptions relating to
Tax Increment Revenues of each of the Project Areas. 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 Revenues contained in this Official Statement
are based on current assessed valuations within each of the Project Areas, a tax rate equal to $1.00 per
$100 of assessed value applied to the taxable property in the Project Areas and certain projected
increases in property values due to inflation allowed under Article XIIIA of the California Constinuion
(see "FINANCIAL INFORMATION - Ta;t Increment Revenues" and "BONDO'VNERS' RISKS - Projected Tax
Revenues Assumptions and Bond Retirement" herein). The Agency believes that the projections of Tax
Revenues and the assumptions upon which the projections are based are reasonable. However, any
future decrease in the assessed valuation of either the Project Areas (or any increase at a rate less than
assumed), any general decline in the economic stability of the area, a relocation out of a 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 (see "FINANCIAL INFORMATION - Ta... Increment
Revenues _ Proposition 8 Adjustments" herein), the desnuction of property caused by natural disasters or
any delinquencies in the payment of property taxes 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 respective series of Bonds. See
"Projected Tax Revenues Assumptions and Bond Retirement" below regarding the Agency's assumptions
pertaining to such projections.
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 1 % 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 consnucted (see "FINANCIAL INFORMATION - Ta... Increment Revenues" herein for a more
complete discussion of Article XIDA). 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, desnuction 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 Rate. The annual inflationary adjusnnent, while limited to 2 %, is
determined annually and may not exceed the percentage change in the California Consumer Price Index
(CCPl). Since Article XIIIA was approved, the annual adjusnnent for intlation has fallen below the 2%
limitation three times; for 1983/84,1%; for 1995/96,1.19%; and for 1996/97,1.11%. The Agency
has projected Tax Increment Revenues based on a 2% intlationary increase in secured assessed values.
Should the assessed value of secured property not increase by at least 2% annually, the Agency's
15
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receipt of projected Tax Revenues may be less than shown in this Official Statement (see "Projected To."
Revenues Assumptions and Bond Retirement" herein).
Proposition 8 Adjustments. Propositi~n 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 int1ation 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 (see "FINANCIAL INFORMATION - Ta." Increment Revenues - Proposition 8 Adjustments" herein).
The Agency's ability to generate sufficient Tax Revenues to pay debt service on the respective series of
Bonds will be dependent on the economic strength of respective 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, flucmations in the real estate market, tlucmations 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.
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 whether or not there should be a reduction in
assessed value for a particular property and the amount of the reduction, if any. Several appeals are
currently pending in the Project Areas (see "THE PROJECT AREAS - Assessment Appeals" herein). To
the extent that any reductions are made to the assessed valuation of such properties with appeals
currently pending, or appeals subsequently filed, Tax IncrelJlent Revenues, and correspondingly, Ti-"{
Revenues will be reduced. Such reductions may have an adverse affect on the Agency's ability to pay
debt service on the respective series of Bonds. As of the total value of parcels for which
appeals have been filed for the Town Centre II Project Area is $ Property owners are
requesting reductions in such value by $ or _ %. Prior successful appeals averaged an
overall _ % reduction in value. If all appeals are granted as filed, Tax Revenues of the Town Centre II
Project Area would be reduced by approximately $ . An overall potential reduction of $
in Tax Revenues equates to % of total Tax Revenues for the Town Centre II Project Area. As of
the total value of parcels for which appeals have been filed for the Otay Valley Road Project
Area is $ . Property owners are requesting reductions in such value by $ or
_ %. Prior successful appeals averaged an overall _ % reduction in value. If all appeals are granted
as filed, Tax Revenues of the Otay Valley Road Project Area would be reduced by approximately
$ . An overall potential reduction of $ in Tax Revenues equates to % of total Tax
Revenues for the Otay Valley Road Project Area. As of the total value of parcels for which
appeals have been filed for the Southwest Project Area is $ . Property owners are requesting
reductions in such value by $ or _ %. Prior successful appeals averaged an overall - %
reduction in value. If all appeals are granted as filed, Tax Revenues of the Southwest Project Area
would be reduced by approximately $ An overall potential reduction of $ in Tax
Revenues equates to _ % of total Tax Revenues for the Southwest Project Area.
Earthquake, Fire and Other Risks. Namral 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 a
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 traversed by two potentially active faults, the Sweetwater Fault and La Nacion Fault
16
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and three inferred faults, the Otay River Fault, the Telegraph Canyon Fault and the San Diego Bay-
Tijuana Fault. Seismic hazards encompass potential surface rupture: ground shaking and landslides.
The occurrence of any natural or man-made disaster or hazard. may, significantly reduce Tax Increment
Revenues received by the Agency and may adversely impact the Agency's ability to pay debt service on
the Bonds.
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
beneticial use of a property within a 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 a 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.
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.
Article XIIm. On October 6, 1979, California voters approved Proposition 4, or the Gann Initiative,
which added Article XIIIB to the California Constitution. The principal thrust of Article XIIIB is to
limit the annual appropriations of the State and any city, county, school district, authority or any other
political subdivision of the state. The amendment includes a requirement that if an entity's revenues in
any year exceed amounts permitted to be spent, the excess will be returned to the taxpayer by revising
the tax override rate over the subsequent two years. To the extent such tax rates are revised, Tax
Increment Revenues may be affected, since Tax Increment Revenues allocated to the Agency are a
function of the combinations of tax rates levied by certain taxing agencies having jurisdiction within the
Project Areas and assessments of property located within the Project Areas (see "FINANCIAL
INFORMATION - Ta-.: Increment Revenues - Property Tax Rate" herein).
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 and premium, if any, on the Bonds.
Future Initiatives. From time to time other initiative measures could be adopted, further affecting the
Agency's Tax Increment Revenues.
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Recent Legislation
Educational Revenue Augmentation Fund. As part of the 1992/93 State Budget implementation
package, the California Legislature adopted S.B. 617 and S.B. 844, which provided for a contribution
by (or on behalf of) redevelopment agencies to, the newly-created "Educational Revenue Augmentation
Fund" (the "Fund"). The Fund was established to provide financial assistance to school districtS.
The 1993/94 State Budget and the implementing legislation provided for maintaining funding levels for
school districts by shifting revenues from other local governments, including redevelopment agencies.
The total amount to be contributed to the Fund by redevelopment agencies State-wide was
approximately $65 million in fiscal year 1993/94 and again in fiscal year 1994/95. The Agency's total
pro rata share of this amount was based on the net tax increment revenue (excluding amounts paid
pursuant to tax sharing agreements with other taxing entities) allocated to the Agency in fiscal year
1990/91. The Agency's share of the total 1994/95 State-wide contribution was approximately
$ . Subsequent State Budgets did not provide for further payments by redevelopment agencies.
However, the legislature may adopt similar or other provisions in future years, the impact of which, if
any, cannot be determined.
Redevelopment Plan Limitations. The California Legislature enacted Assembly Bill 1290 effective
January 1, 1994, as amended by Senate Bill 732, effective January 1, 1995 (as amended, "AB 1290"),
which contains several significant changes in the Redevelopment Law. Certain of the changes affect the
times for incurtence and repayment of loans, advances and indebtedness of redevelopment agencies.
As enacted, AB 1290 will not adversely impact the proceedings for the issuance of the Bonds or the
payment of debt service on the respective series of Bonds (see "DEBT STRUCTURE - Plan Limitations"
for a further discussion of AB 1290).
The Agency cannot predict what effect subsequent State legislation, if any, will have on the Agency's
Tax Increment Revenues and,consequently, on its ability to timely pay principal and interest on the
respective series of Bonds.
Loss of Tax Exemption
As discussed under the heading "LEGAL l.'v1A TTERS - Tax Matters" interest on the Bonds could cease to
be excluded from 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 City. In addition, it is possible that
future changes in appliqlble federal tax laws could cause interest on the Bonds to be included in gross
income for federal income taxation or could otherwise reduce the equivalent taxable yield of such
interest and thereby reduce the value of the Bonds.
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.
Projected Ta."( Revenues Assumptions and Bond Retirement
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 from the Project Areas shown on the
following table were based on the assumptions shown below. Based upon the projected Tax Increment
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Revenues, the Agency expects sufficient Tax Revenues should be available to the Agency to pay
principal of and interest on the respective series of the Bonds. Although me Agency believes that the
assumptions upon which the projected Tax Increment Revenues and,' :rax Revenues are based are
reasonable, the Agency and the Financing Consultant provide no assUrance that the projected Tax
Increment Revenues and Tax Revenues will be achieved. To the extent that the assumptions are not
actually realized, the Agency's ability to timely pay principal and interest on the respective series of the
Bonds may be adversely affected.
(a) The 1999/00 secured roll was assumed to increase two percent (2%) annually for inflation in
future years (see "FINANCIAL INFORMATION - Ta't Increment Revenues - Manner in Which
Property Valuations and Assessments are Determined (Article XIIIA)" herein).
(b) The values of unsecured personal property, state assessed utility property and unitary revenues
have been maintained throughout the projections at their 1999/00 levels (see "FINANCIAL
INFORJ';IATION - Ta't Increment Revenues - Unsecured and Secured Property" and "Unitary
Property" herein).
(c) For the purposes of the projections, it was assumed that there would not be any value added to
the 1999/00 tax rolls as a result of changes in property ownership.
(d) For the purposes of the projections, it was assumed that the following value would be added to
the 1999/00 tax rolls as a result of new construction activity:
Project Area
Town Centre II
Southwest
Assessed Value
$3,250,000
$6,000,000
Tax Year
20011 02
2000/01
Development
Best Buy Electronics
Office Building
(e) A tax rate equal to $1.00 per $100 of assessed value applied to the taxable property in the
Project Areas' was used to determine' Tax Increment Revenues each year (see "FINANCIAL
INFORMATION - Ta't Increment Revenues - Property Ta't Rate" herein).
(t) Projected Tax Revenues are net of amounts due pursuant to the Tax Sharing Agreements (see
"DEBT STRUCTURE - Tax Sharing Agreements" herein).
(g) Projected Tax Revenues are net of amounts required to be set aside for Low and Moderate
Income Housing (see "THE AGENCY - Low and Moderate Income Housing" herein).
(h) Projected Tax Increment Revenues do not reflect delinquencies (see "FINA!'1CIAL
INFORMATION - Tax Increment Revenues - Tax CoUections" herein).
(i) Projected Tax Increment Revenues do not reflect any potential decreases resulting from pending
assessment appeals or future Proposition 8 adjustments, if any (see "THE PROJECT AREAS" and
"FINANCIAL INFORMATION - Tax Increment Revenues - Proposition 8 Adjustments" herein).
However, a successful appeal by Allied Waster Systems in the Otay Valley Road Project Area
granted in January, 2000 has been taken into account in Table No.2 (see "OTAY VALLEY
ROAD PROJECT AREA - Assessment Appeals" herein). In addition, the anticipated property tax
exemption for property owned by Scripps Health in the Town Centre II Project Area has been
taken into account in Table No. 1 (see "TOWN CENTRE n PROJECT AREA - Description of the
Project Area" herein).
G) Projected Tax Increment Revenues provide for a deduction for administrative COSts charged by
San Diego County (see "FINANCIAL INFORMATION - Ta't Increment Revenues - Administrative
Costs" herein).
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TABLE NO.1
CHUIA VISTA REDEVELOPMENT AGENCY
TOWN CENTRE 0 PROJECT AREA
PROJECTED TA."{ REVENUES AND BOND RETIREMENT
Bond Year Tax County
Ending Increment Housing Pass-~ughiiAdnIin Ta:< Debt Coverage
Sept~l . ReVeltlles '. Set-Aside Paynetsi"Qarg6 ,.. :Revenues Service Ratio
\+:': "--'.
2000 923 ,000 (184,600) (13,000) 725,400
2001 973,000 (194,600) (13,000) 765,400 400,000 191%
2002 997,000 (199,400) (15,000) 782,600 415,000 189%
2003 1,021,000 (204 ,200) (17,000) 799 ,800 415,000 193%
2004 1,046,000 (209 ,200) (18,000) 818,800 415,000 197%
2005 1,071,000 (214,200) (19,000) 837,800 415,000 202%
2006 1,097,000 (219,400) (20,000) 857,600 415,000 207%
2007 1,123,000 (224,600) (21,000) 877,400 415,000 211%
2008 1,150,000 (230,000) (22,000) 898,000 415,000 216%
2009 1,177,000 (235,400) (23,000) 918,600 415,000 221%
2010 1,177,000 (235,400) . (23,000) 918,600 415,000 221%
2011 1,177,000 (235,400) (23,000) 918,600 415,000 221%
2012 1,177.000 (235,400) (23,000) 918,600 415,000 221%
2013 1,177,000 (235,400) (23,000) 918,600 415,000 221%
2014 1,177,000 (235,400) (23,000) 918,600 415,000 221%
2015 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2016 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2017 1,177,000 (235,400) (156,000) (23,000) 762.600 340,000 224%
2018 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2019 1,177,000 (235,400) (156,000) (23,000) 762,600 340.000 224%
2020 1,177,000 (235,400) (156,000) (23 ,000) 762.600 340,000 224%
2021 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2022 ),177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2023 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2024 1,177,000 (235,400) (156,000) (23.000) 762,600 340,000 224%
2025 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2026 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2027 1,177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
2028 1.177,000 (235,400) (156,000) (23,000) 762,600 340,000 224%
Source: Rod Guon AssociateS, Inc.
The projected Tax Revenues shown above are subject to several variables described herein (see
"FINANCIAL INFORMATION _ Tax Increment Revenues" herein). The Agency provides no assurance that
the Projected Tax Revenues will be achieved (see "BONDOWNERS' RISKS" herein).
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TABLE NO. 2
CHULA VISTA REDEVELOPMENT AGENCY
OTA Y VALLEY ROAD PROJECT AREA
PROJECTED TAX REVENUES AND BOND RETIREMENT
2000 900,000 (180,000) (8,500) 711,500
2001 911,000 (182,200) (9,000) 719,800 160,000 (1)
2002 928,000 (185,600) (10,000) 732,400 460,000 159%
2003 945,000 (189,000) (11,000) 745,000 490,000 152%
2004 963,000 (192,600) (11,000) 759,400 490,000 155%
2005 981,000 (196,200) (11,000) m,8OO 490,000 158%
2006 999 ,000 (199,800) (12,000) 787,200 490,000 161%
2007 ######## (203,600) (12,000) 802,400 490,000 164%
2008 ####H### (207,400) (12,000) 817,600 490,000 167%
2009 ##H#H### (211 ,400) (12,000) 833,600 490,000 170%
2010 ####H### (211 ,400) (12,000) 833,600 490,000 170%
2011 ######## (211,400) (12,000) 833,600 490,000 170%
2012 ######## (211,400) (12,000) 833,600 490,000 170%
2013 #######H (211,400) (12,000) 833,600 490,000 170%
2014 ###H#### (211 ,400) (12,000) 833,600 490,000 170%
2015 ##H#H### (211 ,400) (12,000) 833,600 490,000 170%
2016 ######## (211 ,400) (12,000) 833,600 490,000 170%
2017 ##HH#### (211 ,400) (12,000) 833,600 490,000 170%
2018 ######## (211 ,400) (12,000) 833,600 490,000 170%
2019 ######## (211,400) (12,000) 833,600 490,000 170%
2020 ####H### (211 ,400) (12,000) 833,600 490,000 170%
2021 ####H### (211 ,400) (12,000) 833,600 490,000 170%
2022 ##H#H### (211,400) (12,000) 833,600 490,000 170%
2023 ######## (211 ,400) (12,000) 833,600 490,000 170%
2024 ##HH###H (211 ,400) (12,000) 833,600 490,000 170%
2025 ######## (211 ,400) (12,000) 833,600 490,000 170%
2026 ######## (211,400) (12,000) 833,600 490,000 170%
2027 #######H (211,400) (12,000) 833,600 490,000 170%
2028 ####H### (211,400) (12,000) 833,600 490,000 170%
2029 ###HH### (211,400) (12,000) 833,600 490,000 170%
2030 ######## (211,400) (12,000) 833,600 490,000 170%
(I) Net of Capitalized Interest.
Source: Rod Gunn Associates, Inc.
The projected Tax Revenues shown above are subject to several variables described herein (see
"FINANCIAL INFORMATION - Tax Increment Revenues" herein). The Agency provides no assurance that
the Projected Tax Revenues will be achieved (see "BONDOWNERS' RISKS" herein).
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TABLE NO.3
CHULA VISTA REDEVELOPMENT AGENCY
SOUTHWEST PROJECT AREA
PROJECTED TAX REVENUES AND BOND RETIREMENT
2000 867,000 (173 ,400) (356,000) (11,000) 326.600
2001 964,000 (192,800) (382,000) (11,000) 378,200 180,000 210%
2002 1,019,000 (203,800) (406,000) (12,000) 397,200 180,000 221%
2003 1,075,000 (215,000) (431,000) (14,000) 415,000 200,000 208%
2004 1,133,000 (226,600) (456,000) (16,000) 434,400 210,000 207%
2005 1,191,000 (238,200) (482,000) (18.000) 452,800 210,000 216%
2006 1,250,000 (250,000) (508,000) (20,000) 472,000 210,000 225%
2007 1,311,000 (262,200) (535,000) (23,000) 490,800 210,000 234%
2008 1,372,000 (274,400) (562,000) (26,000) 509,600 210,000 243%
2009 1,435,000 (287,000) (590,000) (26,000) 532,000 210,000 253%
2010 1,435,000 (287,000) (596,000) (26,000) 526,000 210,000 250%
2011 1,435,000 (287,000) (601,000) (26,000) 521,000 210,000 248%
2012 1,435,000 (287,000) (607,000) (26,000) 515,000 210,000 245%
2013 1,435,000 (287 ,000) (613,000) (26,000) 509,000 210,000 242%
2014 1,435,000 (287,000) (619,000) (26,000) 503,000 210,000 240%
2015 1,435,000 (287 ,000) (625,000) (26,000) 497,000 210,000 237%
2016 1,435,000 (287 ,000) (632,000) (26,000) 490,000 210,000 233%
2017 1,435,000 (287,000) (638,000) (26,000) 484,000 210,000 230%
2018 1,435,000 (287,000) (645,000) (26,000) 477,000 210,000 227%
2019 1,435,000 (287,000) (651,000) (26,000) 471,000 210,000 224%
2020 1,435,000 (287,000) (658,000) (26,000) 464,000 210,000 221%
2021 1,435,000 (287,000) (665,000) (26.000) 457,000 210,000 218%
2022 1,435,000 (287,000) (672,000) (26,000) 450,000 210,000 214%
2023 1,435,000 (287 ,000) . (679,000) (26,000) 443,000 210,000 211%
2024 1,435,000 (287,000) (687,000) (26,000) 435.000 200,000 218%
2025 1,435,000 (287,000) (694,000) (26,000) 428,000 200,000 214%
2026 1,435,000 (287,000) (702,000) (26,000) 420,000 200,000 210%
2027 1,435,000 (287,000) (710,000) (26,000) 412,000 200,000 206%
2028 1,435,000 (287,000) (717,000) (26,000) 40S ,000 200,000 203%
2029 1,435,000 (287,000) (726,000) (26,000) 396,000 200,000 198%
2030 1,435,000 (287,000) (735,000) (26,000) 387,000 200,000 194%
Source: Rod Gunn Associates, Inc.
The projected Tax Revenues shown above are subject to several variables described herein (see
"FINANCIAL INFORlVIATION _ Tax Increment Revenues" herein). The Agency provides no assurance that
the Projected Tax Revenues will be achieved (see "BONDOWNERS' RISKS" herein).
22
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~ . ~
THE AGENCY
Government Organization
The Agency is a public body, corporate and politic, existing under and by virtUe of the Redevelopment
Law. The Agency was activated in 1972, and is governed by a five-member board which consists of all
members of the City Council. The Chairman and Vice Chairman are appointed to a one-year term by
the Agency Board from among its members. The Agency's members and term expiration dates are as
follows:
AGENCY GOVERNING BOARD AND CITY COUNCIL.
Board Member Term Expires
Shirley G. Horton, Mayor and Chair December 2002
Patty Davis, Councilmember December 2002
John S. Moot, Councilmember December 2000
Stephen C. Padilla, Councilmember December 2002
Mary Salas, Councilmember December 2004
The City performs certain general administrative functions for the Agency. The City Manager serves
as the Agency's Executive Director and Secretary, and the Finance Director serves as Agency
Treasurer. The costs of such functions, as well as additional services performed by City staff are
allocated annually to the Agency. The Agency reimburses the City for such allocated costs out of
available Tax Increment Revenues. Such reimbursement is subordinate to any outstanding loans, bonds
and indebtedness of the Agency. Current Staff assigned to administer the Agency include:
KEY ADMINISTRATIVE PERSONNEL
David D. Rowlands, Jr. City Manager
Sid Morris Assistant City Manger
George KrempI Assistant City Manager
David Palmer Deputy City Manager
Robert Powell Deputy City ManagerlDirector of Finance
Chris Salomone Director of Co=unity Development
Lyle Haynes Assistant Director of Community Development
Susan Bigelow City Clerk
John Kaheny City Attorney
Agency Powers
All powers of the Agency are vested in its members. Pursuant to the Redevelopment Law, the Agency
is a separate public body and exercises governmental functions, including planning and implementing
the Project Areas.
The Agency may exercise the right to issue or incur loans, advances or other indebtedness for
authorized purposes and to expend their proceeds, and the 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. 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
thereon. The Agency may not construct or develop buildings, with the exception of public buildings
and housing, and IIUlSt 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.
23
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~
Redevelopment Plan
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 specitically 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 Plan are to encourage investment in the Project Areas by the private
sector. The Redevelopment Plans provide for the acquisition of property, the demolition of buildings
and improvements, the relocation of any displaced occupants, and the cons01lction of streets, parking
facilities, utilities and other public improvements. The Redevelopment Plans also allow the
redevelopment of land by private enterprise, the rehabilitation of s01lctures, the rehabilitation or
cons01lction of low and moderate income housing, and participation by owners and the tenants of
properties in the Project Areas.
The City Council approved and adopted the Redevelopment Plan for the Town Centre 11 Project Area
on August 15, 1978. It was subsequently amended in May, 1987 to add fInancial provisions, on July
19, 1988 to add additional acreage, and on November 8, 1994 to add limitations prescribed by
Assembly Bill 1290 ("AB 1290") (see "Plan Limitations" below).
The City Council approved and adopted the Redevelopment Plan for the Otay Valley Road Project Area
on December 20, 1983. It was subsequently amended on November 8, 1994 to add limitations
prescribed by AB 1290.
The City Council approved and adopted the Redevelopment Plan for the Southwest Project Area on
. November 27, 1990, It was subsequently amended on November 8, 1994 to add limitations prescribed
by AB 1290.
Plan Limitations
The Redevelopment Plans impose certain limitations on the amount of Tax Increment Revenues that the
Agency may be allocated from each Project Area. The Redevelopment Plans also establish a date after
which no loans, advances of indebtedness may be issued or incurred. In addition, AB 1290 was
enacted by the State Legislature in 1994. Among other things, AB 1290 provides that a redevelopment
agency may not pay indebtedness or receive property taxes pursuant to Section 33670 of the
Redevelopment Law after 10 years from the termination of the effectiveness of a Redevelopment Plan
(which is now limited to 40 years after the adoption of such Redevelopment Plan).
The limitations imposed by the Redevelopment Plans and/or AB 1290 are as follows:
Town Centre II Otav Vallev Road Southwest
Maximum Tax Increment Revenues $100 million $115 million $15 million
annually
Maximum Bonded Indebtedness $42.5 million $45 million $150 million
Last Date to Incur Debt 1/1/2004(1)17/19/2008(2) 1/112004 11127/2010
Plan Expiration Date 8/15/2018(\)17/1912028(2) 12/20/2023 11127/2030
Last Date to Collect Tax Increment Revenues 8/1512028(1)17/1912038(2) 12/20/2033 11/2712040
(1) Applicable to the area of the project area as originally adopted.
(2) Applicable to the area added by amenthnent to the redevelopment plan.
24
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Capital Projects
Pursuant to the Law, the Agency may pay the costs of public buildings, facilities and improvements
subject to cenain restrictions. However, pursuant to Section 33445 of the Redevelopment Law, for
redevelopment plans and amendments to redevelopment plans which add territory to a redevelopment
project, adopted after October 1, 1976, the acquisition of property for public improvements and the
installation or construction of each public improvement must be provided for in the redevelopment plan.
In addition, pursuant to Section 33445 of the Redevelopment Law, for each public improvement, either
within or outside a Project Area, the Agency is required to obtain the consent of the City Council after
the following is determined:
(a) That the buildings, facilities, strucrures, or other improvements are of benefit to the Project
Area or the immediate neighborhood in which the Project Area is located, regardless of
whether the improvement is within another redevelopment project; ,
(b) That no other reasonable means of financing such buildings, facilities, strucrures, or other
improvements, are available to the co=unity; and
(c) That the payment of funds for the acquisition of land or the cost of buildings, facilities,
strucrures, or other improvements will assist in the elimination of one or more blighting
conditions inside the project area or provide housing for low- or moderate-income persons, and
is consistent with the implementation plan adopted pursuant to Section 33490 of the
Redevelopment Law.
Low and Moderate Income Housing
General. The Redevelopment Law requires that for every redevelopment plan adopted on or after
January 1, 1977, or any area which is added to a project area by an amendment to a redevelopment
plan on or after January 1, 1977, not less than 20% of the taxes allocated to a redevelopment agency
pursuant to Section 33670 of the Redevelopment Law be set aside in a separate low and moderate
income housing fund to be used for the purpose of increasing and improving the supply of low and
moderate income housing available at an affordable housing cost unless the redevelopment agency
makes a fmding annually by resolution made in accordance with the Redevelopment Law that:
(1) No need exists in the community to improve, increase or preserve the low and moderate income
housing; or
(2) A stated percentage less than twenty percent (20%) of the taxes is sufficient to meet the housing
needs of the community, including the needs of low or moderate income households and very
low income households.
Under the Redevelopment Law, the redevelopment agency bears the burden of establishing that any
such fmding is supported by substantial evidence in light of the entire record before the redevelopment
agency in the event that any such fmding is challenged.
25
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T' "T
THE PROJECT AREAS
TOWN CENTRE IT PROJECT AREA
Description of the Project Area
The Town Centre I1 Project Area encompasses approximately 212 acres of commercial, institutional
and municipal uses in eleven non-contiguous areas of the City's central core. The Chula. Vista Center,
a sixty-five acre regional shopping mall is located in the Town Centre I1 Project Area, as well as
Scripps Memorial Hospital and the City'S Civic Center Complex and public works yard. The City has
invested significantly in the Project Area, financing a portion of the cost of public parking structures
utilized by the Chula Vista Center. The Chula Vista Center, located one-quarter mile from the 1-5
freeway and seven miles from both downtown San Diego and the international border, began in 1962 as
twO retail areas bisected by a city street. An expansion of the center closed the street and linked the
twO areas by constructing an additional 140,000 square feet of leasable space. Together with the
anchor tenants of the center, Broadway Stores (now Macy's), Sears, Roebuck & Co. and 1. C.
Penneys, the total center cousisted of 800,000 square feet of retail space. A further expansion was
undertaken in 1994, adding a 35,000 square foot 10-screen movie theater and Mervyn's department
store. Today, additional major tenants in the Chula Vista Center include Sam Goody, Waldenbooks,
Miller's Outpost and Footlocker. The current occupancy rate of the entire Chula Vista Center is
approximately _ % . The ChuIa Vista Center accounts for 50 % of the secured assessed value of the
Town Centre I1 Project Area and the anchor tenants comprise an additional 33 % of the secured assessed
value of the Town Centre IT Project Area.
The Agency also assisted in development of the Wal Mart anchored 200,000 square foot South Bay
Marketplace shopping center, a portion of which is located in the Town Centre II Project Area. Wal
Mart developed its 149,000 square foot store in 1994. Best Buy electronics store will co=ence
construction in June, 2000 of its 44,000 square foot store in the South Bay Marketplace. The Agency
anticipates this new development will add $3,250,000 to the taX rolls in 2001/02.
Scripps Memorial Hospital Chula Vista was established in 1964. The Scripps medical facilities are
located adjacent to as well as in the Town Centre II Project Area. A 40,000 square foot expansion was
completed by Scripps in 1999, which provides a full range of outpatient medical care, 24 hour
emergency care and ICU. Property owned by Scripps Health is exempt from property taX for tax year
1999/00, however, the tax roll shows taxable property owned by Scripps Health valued at $8,514,103.
The Agency expects this value to be exempt in future years. This anticipated exemption is taken into
account in "TABLE NO.1 _ TOWN CENTRE U PROJECT AREA PROJECTED TAX REVENUES AND BOND
RETIREMENT" .
The Ciry's public works yard, a 7-acre parcel located in the Town Centre II Project Area, is currently
being marketed for development with office/retail uses.
26
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~
Secured Assessed Valuation by Land Use Category
Vac:mt Residential
1% 5%
Source: County of San Diego Auditor-ContrOller.
Major Taxpayers
Commercial
94%
The ten largest secured property taxpayers represent 98.5 % of the 1999/00 secured assessed value of
the Town Centre II Project Area, taking into account the anticipated property tax exemption of the
Scripps Health property, currently valued at $8.514 million.
TABLE NO.4
TOWN CENTRE n PROJECT AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 1999/00 ASSESSED VALUE (1)
C V Centers LLC
Sears Roebuck & Company
WaI Mart Real Estate Business Trust
Federated Westem Properties
Mervyn's Corpcration
McMillin Family Trust
lubilee Limited Partnersbip
Charles & lanet Peter Trust
loseph & Terri Sapp
Acro Drive Associates
Total
S 58,369,223
14,203.247
12.251,634
11.868.399
6.100.000
6.019.145
1.870.020
1.585,915
989.648
966.695
$ 114,223,926
50.3%
12.2%
10.6%
10.2%
5.3%
5.2%
1.6%
1.4%
0.9%
0.8%
98.5%
Regional Commercial
Retail
Retail
Retail
Retail
Apartments
Commercial
Commercial
Commercial
Commercial
(1) Does not reflect assessment appeals, but does reflect Scripps Health anticipated property tax exemption (see
"Assessment AppenIs" below.
Source: County of San Diego Auditor-Controller.
~ ~
27
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The following provides a description of the latgest taxpayers.
Regional Shopping Center, Chu1a Vista Center, owner. This center occupies 65 acres and is
developed with over 350,000 square feet, exclusive of anchor deparonent stores, which total an
additional 561,000 square feet. The Agency assisted in financing a parking structure in conjunction
with an expansion of the center. In addition to deparonent stores and mall shops, the center contains a
lO-screen movie theater. The site is approximately one-quarter mile from the 1-5 freeway and seven
miles from both downtown San Diego and the international border. The current owner purchased the
center from Homart Development (a subsidiary of Sears, Roebuck & Company) in 19 .
Department Store, Sears, Roebuck and Company, owner. Located in the Chula Vista Center, the
Sears department store contains 249,000 square feet of retail space on 15.5 acres. The Sears store has
been a part of the .regional shopping center since its original development.
Retail Store, Wal Mart Real Estate Business Trust, owner. Located in the South Bay Marketplace
shopping center, the WaI Mart store is 100,000 square feet and is developed on 13.5 acres. It was
constructed in 1995. The newly-constructed Best Buy electronics store, when constructed, will be
located adjacent to Wal Mart.
Department Store, Federated Western Properties, owner. Located in the Chula Vista Center, the
Macy's department store contains 150,000 square feet of retail space on 8.6 acres. Originally a
Broadway department store, the department store has been a part of the regional shopping center since
its original development.
Department Store, Mervyn's Corporation, owner. Located in the Chula Vista Center, the Mervyn's
department store contains 82,000 square feet of retail space on 5 acres. This department store was
constructed as a part of the expansion of the center in 1994.
Assessment Appeals
[To be completed].
28
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Asse~sed Valuations
Assessed value of the Town Centre II Project Area has increased $21.8 million between fiscal years
1995/96 and 1999/00, an overall increase of 19% (see "FINANCIAL INFORMATION - To." Increment
Revenues - Historical Assessed Valuation and Tax Increment Revenues" herein).
TABLE NO.5
TOWN CENTRE II PROJECT AREA
ASSESSED VALUATIONS (I)
1995/96 through 1999/00
1ncre1=1ta! Inc=se
Base Year Value
Total Value
$ 81.467,979
33.119.003
$ 114,586,982
$ 96,037,114
33.306,955
$ 129,344,069
$ 94,884,445
33,306.955
$ 128,191,400
$ 102,314,911
33.105,355
$ 135,420,266
$ 103,300,819
33,105,355
$ 136,406,174
(I) Does not reflect assessment appeals or Scripps Health property tax exemption (see "Assessment Appeals"
herein.
Source: County of San Diego Assessor.
TABLE NO.6
TOWN CENTRE II PROJECT AREA
ANNUAL CHANGE IN INCRElVlENTAL AND TOTAL ASSESSED VALUES (1)
1996/97 through 1999/00
20,0%
17.9%
5.0%
15,0%
10,0%
0.0%
(5.0%)
1996197
1997/98
1998199
1999/00
CTotal Value mIncremental Value
<I) Does not reflect assessment appeals or Scripps Health propeny tax exemption (see "Assessment Appeals"
herein.
Source: County of San Diego Assessor.
29
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OT A Y V ALLEY ROAD PROJECT AREA
Description of the Project Area
The Gtay Valley Road Project Area is an area of approximately 770 acres located in the southeastern
corner of the City, just to the east of the 1-805 Freeway. It was established in 1983 and is comprised
primarily of light industrial and warehouse uses. A portion of an existing landfIll overlaps the
boundaries of the Project Area and a former landfill site is also located in the Project Area. The
Project Area contains the Chula Vista Auto Park. which currently has 4 dealerships and is designed for
up to 10 dealerships. Adjacent to the Project Area is the Coors Amphitheatre and Knott'S Soak City
USA. The Agency anticipates that related entertainment uses may develop on vacant land in the Project
Area surrounding the 20,000 seat outdoor amphitheatre, which opened in 1998 and is owned and
operated by Universal/MCA. Other uses in the Otay Valley Road Project Area consist of smaIl
industrial parks, used for multi-tenant warehousing or light manufacturing, Manufacturers include
metal fabricators such as Gold Coast Engineering and Hyspan Precision Products, some of the City's
largest employers.
Commercial development, primarily automobile dealerships, comprises 13 % of the secured assessed
value of the Otay Valley Road Project Area. Industrial development, including the existing landfill, in
the Otay Valley Road Project Area comprises the majority of the land use, accounting for 76% of the
secured assessed value. The remaining 11 % of secured assessed value in the Otay Valley Road Project
Area is derived from vacant land, approximately 100 acres. This vacant acreage includes a 40 acre
former landfill site that has been recently purchased and remediated and is now available for
development. There are also 23 acres available for additional dealerships in the Chula Vista Auto Park,
as well as a 17 acre parcel adjacent to the freeway available for commercial development.
Secured Assessed Valuation by Land Use Category
Vacant
11%
Commercial
13%
Industrial
76%
Source: County of San Diego Auditor-Controller.
30
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T .,.
Major Taxpayers
The ten largest secured property taxpayers represent 66.6% of the 1999/00 secured assessed value of
the Otay Valley Road Project Area, taking into account that in January, 2000, Allied Waste Systems
was granted a $17,700,000 reduction in assessed value based on an appeal f1led.
TABLE NO. 7
OTAY VALLEY ROAD PROJECT AREA
TEN LARGEST T AXPA YERS AS A PERCENT OF 1999/00 ASSESSED VALUE (I)
Panna Property Company $ 8.900,000 10.6% Warehouse
Allied Wasle Systems 8,663,967 10.4% Landfill
DGF Family Limited Partnenhip 8,424,062 10.1% Commercial
BW Vista Limited Partnership 5,695,771 6.8% Warehouse
Otay Commercial Partnen 5,282,220 6.3% Warehouse
Sutherland Palumbo 5,119,398 6.1% Manufacturing
505 Otay LLC 4,000,000 4.8% Warehouse
580 Auto Park Drive 3.750,000 4.5% Commercial
Arizona Maricopa Associates 3,274,405 3.9% Vacant Land
Donald Heye Trust 2.600.000 3.1% Manufacturing
Total $ 55,709,823 66.6%
(I) Reflects assessment appeal of Allied Waste Systems but no other assessment appeals (see "Assessment
Appeals" below.
Source: County of San Diego Auditor-Controller.
The following provides a description of the largest taxpayers.
Warehouses; Parma Property Company, owner. This taxpayer owns two warehouses in the
Brandywine industrial park area. The properties were purchased in 1998. Facilities are comprised of
one 70,000 square foot warehouse located on 4 acres and one 100,000 square foot warehouse located
on 5.8 acres. Both facilities were built in 1988.
Landfill; Allied Waste Systems, owner. A portion of a landfIll overlaps the boundary of the Otay
Valley Road Project Area. A reduction in value of the facility was granted in January, 2000 and the
portion of the property located in the Project Area is currently valued at approximately $8.66 million.
Automobile Dealership; nGF Family Limited Partnership, owner. This 8.3 acre property is
developed with Fuller Ford, Fuller Honda and Fuller Kia automobile dealerships which opened in
1994.
Warehouses; BW Vista Limited Partnership, owner. This taxpayer owns two warehouses in the
Brandywine industrial park area. The properties were purchased in 1998. Facilities are comprised of
one 81,500 square foot warehouse located on 5.6 acres and one 70,700 square foot warehouse located
on 6.3 acres. Both facilities were built in 1988.
31
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Industrial Park; Otay Commercial Partners, owner. This industrial park contains 6 separate
warehouse facilities totaling 157,500 square feet on 12.5 acres. The buildings were constructed in 1988
and purchased by the current owner in 1998.
Manufacturing Facility; Sutherland Palumbo; owner. This manufacturing facility, located on 7
acres is leased to Gold Coast Engineering, an aerospace metal fabricator. The original facility was
expanded by 77 ,000 square feet in 1991 with the assistance of industrial development bonds.
Assessment Appeals
Allied Waste Systems was granted an appeal in January, 2000, which reduced the value of its property
holdings located in the Otay Valley Road Project Area by $17,700,000. This reduction is taken into
account in "TABLE NO.2 _ OTAY VALLEY ROAD PROJECT AREA PROJECTED TAX REVENUES AND
BOND RETIREMENT". The County of San Diego reports that there are _ pending appeals for other
properties in the Otay Valley Road Project Area [to be completed).
32
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T' ...,.
Assessed Valuations
Between tiscal years 1995/96 and 1999/00, there has been an overall increase of 8% in assessed
valuation, after giving affect to a $17.7 million reduction in the value of the Allied Waste Systems
property (see "FINANaAL INFORMATION - Ta-.: Increment Revenues - Historical Assessed Valuation and
Ta.-.: Increment Revenues" herein). There has been a significant amount of property ownership change
in the last two years, which accounts for the increasing assessed values.
TABLE NO.8
OTAY VALLEY ROAD PROJECT AREA
ASSESSED V ALUA nONS (1)
1995/96 through 1999/00
In=ml Increase $
Base Year Value
Total Value
76,572,112
18.431.119
$ 95,003,231
$ 70,365,268
18.431.119
$ 88,7%,387
$ 66,169,246
18.431.119
$ 84,600,365
$ 92.920.325
17.894.789
$ 110,815,114
$ 102.473,979
17.894.789
$ UO,368,768
(1) Does not reflect assessment appeals.
Source: County of San Diego Assessor.
TABLE NO. 9
OTAY VALLEY ROAD PROJECT AREA
ANNUAL CHANGE IN INCREMENTAL AND TOTAL ASSESSED VALUES (1)
1996/97 through 1999/00
20,0%
15.0%
10.0%
5,0%
0,0%
(5.0%)
(10.0%) 1996/97
13.7%
12.7%
1997/98
1998/99
1999/00
DTotal Value raIncremcnLill Value
(1) Reflects assessment appeals by Allied Waste Systems but no other assessment appeals.
Source: County of San Diego Assessor.
33
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,... .,.
SOUTHWEST PROJECT AREA
Description of the Project Area
The Southwest Project Area is an area of approximately 1,100 acres.' It was created in 1990 and is
zoned primarily for limited industrial and thoroughfare commercial projects. Existing commercial
development is generally neighborhood retail and existing industrial development uses include mini-
storage and light manufacturing. The tirst major new development to be completed in the Southwest
Project Area is the Palomar Trolley Center, a community retail center with national brand clothing
stores such as Old Navy and Ross Dress for Less, a grocery store, and warehouse retail uses such as
Office Depot and Party City. It is easily accessed by the San Diego Trolley System and was developed
with Agency assistance. The most recent development, the Family Resource Center, is a 75,000 square
foot office building developed by the Greenwald Company. This 2-story facility with attached
classrooms and conference center will be used by San Diego County Health and Human Services. It is
anticipated that this development will add $6 million to the tax rolls in 2000/01.
In-fill residential development accountS for approximately 26% of the secured assessed value of the
Southwest Project Area. Commercial and industrial development comprises 37 % and 30%.
respectively of the secured assessed value of the Southwest Project Area. The remaining 7 % of secured
assessed value in the Southwest Project Area is derived from vacant land, comprising approximately 75
acres.
Secured Assessed Valuation by Land Use Category
Industrial
30%
Vacant
7%
Residential
26%
~-....-..~~-'
~i~~~
'JPT!""=" .. ~
"",0' . . '.c"""'" .
"70'k\iii.!' "" ""Yifi"7"'!'7?:B?"'!7!'01DP""lifrlll
......kX. ..... ...., .... '. '.' ..;;,
....,.,.. . c....' ,~. __ ..c' , ' '" '_' _~,::;~W
Commercial
37%
Source: County of San Diego Auditor-Controller.
34
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T ...,.
Major Taxpayers
The ten largest secured property taxpayers represent 20.2% of the 1999/00 secured assessed value of
the Southwest Project Area.
TABLE NO. 10
SOUTHWEST PROJECT AREA
TEN LARGEST TAXPAYERS AS A PERCENT OF 1999/00 ASSESSED VALUE (1)
Cypress Creek Company $ 18,263,260 6.8% Commercial Center
Marliskar Invesanents 6,939.825 2.6% Industrial
Navarra Jerome Family Trust 5,182.743 1.9% Commercial Center
Sentry Storage LLC 4,151.112 1.5% Mini storage
Laguardia Revocable Trust 3,869,654 1.4% Commercial
Panna Storage Company 3,623,877 1.3% Mini storage
Marie F Williams 3.384.343 1.3% Commercial
Genesis South Properties 3.237.825 1.2% Commercial
A Storage Place Associates 2.978,604 1.1% Mini storage
Oscar Davila Trust 2,895.000 1.1% Commercial
Total $ 54,526,243 20.2%
(I) Does not reflect assessment appeals (see "Assessment Appeals" below.
Source: County of San Diego Auditor-Conrroller.
The following provides a description of the largest taxpayers.
Commercial Center; Cypress Creek Company, owner. This community shopping center, Palomar
Trolley Center, contains 210,000 square feet of retail space with over 35 tenants. Major tenants
include Ralph's Grocery Store, Ross Dress for Less, Office Depot, Old Navy and Party City. The fIrst
phase was constructed in 1994 and the second phase was completed in 1996.
Industrial Buildings; Marliskar Investments, owner. This property is comprised of two light
industrial buildings, one 50,000 square foot building coustructed in 1965 on 2.3 acres and one 100,000
square foot building constructed in 1970 on nine acres. They were purchased by the current owner in
1998.
Shopping Center; Navarra Jerome Family Trust, owner. This neighborhood center was constructed
in 1969. It contains 73,000 square feet of retail space on 5.8 acres. It was purchased by the current
owner in 1984.
WarehouselMini Storage, Sentry Storage LLC, owner. This mini-storage facility contains 125,000
square feet, consisting of 14 buildings on nine acres with over 1400 rental units. It was constructed in
1985.
35
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T" ..,.
Assessment Appeals
[To be completed].
Assessed Valuations
Between fiscal years 1995/96 and 1999/00, there has been an overall increase of 13% in assessed
valuation (see "FINANOAL INFORMA nON - Ta:t Increment Revenues - Historical Assessed Valuation and
Tax Increment Revenues" herein). There has been some properry ownership change in the last two
years and new construction, accounting for the increasing assessed values.
TABLE NO. 11
SOUTHWEST PROJECT AREA
ASSESSED V ALUA nONS (1)
1995/96 through 1999/00
1D==tal Increase $
Base Year Value
Total Value
47,487,167
219,498,444
$ 266,985,611
$ 48,104,133
219,498.444
$ 267,6i'f1.,577
$ 47,677,835
219.498,444
$ 267,176,279
$ 62.006,889
219,498,444
$ 281,505,333
$ 83,861,570
219,498.444
$ 303,360,014
(1) Does not reflect"assessment appeals (see "Assessment Appeals" above.
Source: County of San Diego Assessor.
TABLE NO. 12
SOUTHWEST PROJECT AREA
ANNUAL CHANGE IN INCREMENTAL AND TOTAL ASSESSED VALUES 0)
1996/97 tbrough 1999/00
S.Or.
O.O%l
0.2% 1.3%
(O,Z%) (0.9%)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10,0%
(5.0%)
1996/97
1997/98
1998/99
1999/00
CTotal Value IDlncremental Value
(I) Does not retlect assessment appeals (see "Assessment Appeals" above.
Source: County of San Diego Assessor.
36
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FINANCIAL INFORMATION
Agency Budgetary Process and Administration
The law requires redevelopment agencies to adopt an annual budget containing the following:
(1) The proposed expenditures of the agency.
(2) The proposed indebtedness to be incurred by the agency.
(3) The anticipated revenues of the agency.
(4) The work program for the coming year, including goals.
(5) An examination of the previous years' achievements and a comparison of the achievements with
the goals of the previous years' work program.
All expenditures and indebtedness of the Agency are required to be in conformity with the adopted or
amended budget.
The Executive Director of the Agency is responsible for preparing the proposed budget and submitting
it to the Agency Governing Board. After reviewing the proposed budget at a public meeting, the
Agency Governing Board holds a public hearing. The Agency Governing Board adopts the budget
prior to the start of each fiscal year. The City Finance Director acts as Treasurer of the Agency and is
responsible for controlling expenditures within budgeted appropriations.
Public Employee Salaries and Benefits
The Agency contracts with the City to provide the Agency with staff.
Agency Accounting Records and Financial Statements
Every redevelopment agency is required to present an annual report to its legislative body (being the
city council) within six months of the 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 Health and Safety Code defmes "audit report" to mean an examination of
and opinion on the financial statements of the agency which presents the results of the operations and
financial position of the agency. The independent financial audit is required to be conducted in
accordance with generally accepted auditing standards and the rules governing audit reports
promulgated by the Governmental Accounting Standards Board. The independent financial audit report
is also required to include an opinion of the agency's compliance with laws, regulations and
administrative requirements governing activities of the agency. The California Health and Safety Code
requires the fIScal statement to contain the following information:
(1) The amount of outstanding indebtedness of the 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, other than school or community college district.
(4) The financial transactions report required to be submitted to the State Controller.
37
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(5) The amount allotted to school or community college districts pursuant to the Redevelopment
Law.
(6) The amount of existing indebtedness and the total amount of payments required to be paid on
existing indebtedness for that fiscal year.
(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 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 and the Special Fund. 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 financial 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 Bondowner.
Basis of Accounting. The modified accrual basis of accounting is used by all governmental fund types
and agency funds. Under the modified accrual basis of accounting, revenues are recognized when
susceptible to accrual (Le., when they become both measurable and available). "Measurable" means
the amoUD! of the transaction can be determined and "available" means collectible within the current
period or soon enough thereafter to be used to pay liabilities of the current period. The Agency
considers property taXes as available if they are collected within 60 days after year end. Expenditures
are recorded when the related fund liability is incurred. Principal and interest on general long-term
debt are recorded as fund liabilities when due.
Measurement Focus. Ail governmental funds are accounted for on a spending or "financial flow"
measurement focus. Generally, this means that only current assets and current liabilities are included
on their balance sheets, with the exception that the non-current portion of long-term receivables and
advances due to governmental funds are reported on their balance sheets, offset by fund balance reserve
accounts. Statements of revenue, expenditures and changes in fund balances for governmental funds
generally present increases (revenues and other financing sources) and decreases (expenditures and
other financing uses) in current assets.
The Agency retained the firm of Calderon, Jaham & Osborn, Certified Public Accountants and
Consultants, San Diego, California, to examine the component unit financial statetuents of the Agency
as of and for the fiscal year ended June 30, 1999, which are included as "APPENDIX C". The firm's
examination was made in accordance with generally accepted auditing standards and the "Guidelines for
Compliance Audits of California Redevelopment Agencies" issued by the State Controller. The firm
reported after their examination that the Agency's financial statements present fairly its financial
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, 1999.
Tax Increment Revenues
Tax Increment Revenues. As provided in the Redevelopment Plans for the 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 of California, taxes levied upon taxable property in a Project Area each year by or for the
benefit of the State, any city, county, city and county or other public corporation for fiscal years
beginning after the effective date of the ordinance adopting the Redevelopment Plan for the Project
Area, or any amendment with respect thereto, will be divided as follows:
38
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(a) That portion of the taxes which would be produced by thl' rate upon which the tax is levied
each year by or for each of the taxing agencies upon the total sum of the assessed value of the
taxable property in the redevelopment project as shown upon the assessment roll used in
connection with the taxation of that property by the taxing agency, last equalized prior to the
effective date of the ordinance, :Shall be allocated to and when collected shall be paid to the
respective taxing agencies as taxes by or for the taxing agencies on all other property are paid
(for the purpose of allocating taxes levied by or for any taxing agency or agencies which did
not include the territory in a redevelopment project on the effective date of the ordinance but to
which that territory has been annexed or otherwise included after that effective date, the
assessment roll of the county last equalized on the effective date of the ordinance. Shall be used
in determining the assessed valuation of the taxable property in the project on the effective
date);
(b) Except as provided in subdivision (c), that portion of the levied taxes each year in excess of that
amount shall be allocated to and when collected shall be paid into a special fund of the
redevelopment agency to pay the principal of and interest on loans, moneys advanced to, or
indebtedness (whether funded, refunded, assumed, or otherwise) incurred by the redevelopment
agency to finance or refinance, in whole or in part, the redevelopment project. Unless and until
the total assessed valuation of the taxable property in a redevelopment project exceeds the total
assessed value of the taxable property in that project as shown by the last equalized assessment
roll referred to in subdivision (a), all of the taxes levied and collected upon the taxable property
in the redevelopment project shall be paid to the respective taxing agencies. When the loans,
advances, and indebtedness, if any, and interest thereon, have been paid, all moneys thereafter
received from taxes upon the taxable property in such redevelopment project shall be paid to the
respective taxing agencies as taxes on all other property are paid; and
(c) That portion of the taxes in excess of the amount identified in subdivision (a) which are
attributable to a tax rate levied by a taxing agency for the purpose of producing revenues in an
amount sufficient to make annual repayments of the principal of, and the interest on, any
bonded indebtedness for the acquisition or improvement of real property shall be allocated to,
and when collected shall be paid into, the fund of that taxing agency. This subdivision applies
to taxes levied to repay bonded indebtedness approved by the voters of the taxing agency on or
after January 1, 1989.
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.
39
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T' .,.
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 net 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 Iirnitations on taxes that may be
levied against real property . This amendment, which added Anicle XIIIA to the State Constitution,
among other things, defines 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 I, 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 a recent amendment to
the California Constitution, redevelopment agencies are prohibited from receiving any of the tax
increment revenue attributable to taX rates levied to finance 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 tenns "purchase" and "change of
ownership", for purposes of determining full cash value of property under Article XIIlA. 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 parents and children. Proposition 60 amends Article XIIIA
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.
For each fiscal year since Article XIDA has become effective (the 1978/79 fiscal year), the annual
increaSe for inflation has been at least two percent except for the 1983/84, 1995/96 and 1996/97 fiscal
years. For the 1983/84 fiscal year, the annual increase for inflation was 1 %; for the 1995/96 fiscal
year, the annual increase for inflation was 1.19%; and for the 1996/97 fiscal year, the annual increase
for inflation was 1.11 %, reflecting the actual increase in the State Consumer Price Index, as reported
by the State Department of Finance.
The projections contained in Table Nos. 1, 2 and 3 "PROJECTED TAX REVENUES AND BOND
RETIREMENT" herein are based on the assumption that inflation will be at least two percent
annually in future years. .In accordance with this assumption, the projection of Tax Increment
Revenues in such tables includes a two percent annual valuation increase for e.'listing real property
on the secured property assessment roll.
As described above, the full cash value of property is redetermined with each change of ownership.
There is not adequate statistical data for smaller geographical areas such as the Project Areas to reliably
project increases in assessed valuation due to changes in property ownership. Therefore, the
projections of Ta.x Increment Revenues in Table Nos. 1, 2 and 3 "PROJECTED TAX REVENUES AND
BOND RETIREMENT" herein are based upon the assumption that there will not be any value added
to the tax roils as a result of changes in property ownership.
40
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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 intlation factor determined pursuant to Anicle XIIIA, or its full cas,h value as of the lien date,
taking into account reductions in value due to damage, destruction,. ob,solescence or other factors
causing a decline in market value. Full cash value, sometimes referred to as market value, is affected
by tluctuations in the real estate market, fluctuations in interest rates, unexpected increases in
development costs and other factors. Reductions based on Proposition 8 do not establish new base year
values, and the property may be reassessed the following lien date up to the lower of the then-current
fair market value or the factored base year value. Because of generally adverse economic conditions
affecting the real estate market, many localities in California have experienced certain declines in
assessed values as a result of Proposition 8 property owner appeals or blanket adjusonents made by the
County Assessor to property changing ownership or newly built since 1988.
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.
For the purpose of projecting Ta.."{ Increment Revenues in Tables Nos. 1, 2 and 3 "PROJECTED TAX
REVENUES AND BOND RETIREMENT" herein, the unsecured property assessment roll was assumed
to remain constant at the level shown on the 1999/00 assessment roll.
Property in the Project Areas 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. Instal1ments 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.
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:
(1) 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) fJling 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 to the State for the amount of taxes 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, 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 State. The amount necessary to
redeem the property is equal to the sum of the delinquent taxes, delinquency penalties and redemption
penalties of 11h % 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.
41
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... ..,.
A 10% penalty also attaches [0 delinquent taXes with respect to property on the unsecured roll, and
further, an additional penalty of.1 'h % per month accrues with respect to such taxes beginning the lirst
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 of the change of ownership or completion of new
construction.
Supplemental Assessments are not included in the Table Nos. 13, 14 and 15 "HISTORICAL
ASSESSED VALUATION AND TAX INCREMENT REVENUES" herein. In addition, because
Supplemental Assessments cannot be projected, Supplemental Assessments are not included in the
projections of Tax Increment Revenues in Table Nos. 1, 2 and 3 "PROJECTED TAX REVENUES AND
BOND RETIREMENT" herein.
Unitary Property. Co=encing 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 derived from the assessed value assigned to the county-wide taX rate area
shall be allocated as follows: (1) 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.
Taxable values for properties assessed by the State Board of Equalization, the tax rate levied
against such property and the corresponding Unitary Revenues have been held constant at
1999/00 levels for the purpose of projecting Tax Increment Revenues in Table Nos. 1 and 2
"PROJECTED TAX REVENUES AND BOND RETIREMENT" herein.
Property Tax Rate. There are numerous tax rate areas within the Project Areas. 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 XIllA 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.
42
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For fiscal year 1999/00, the tax rate, including the tax override rate, for the majority of the property in
the Project Areas is $1.009 per $100 of taxable value. Future Tax Increment ~venues have been
projected in Table Nos. 1, 2 and 3 "PRO.IECTED TAX REVENUES AND BOND RETI$'\oIENT" herein by
applying the general levy ($1.00 per $100 of taxable value) to incremental taxable v;i!ues,
. .~) .
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 1999/00 the County
charged administrative fees totaling $13,000 to the Town Centre II Project Area, $8,500 to the Otay
Valley Road Project Area and $11,000 to the Southwest Project Area. The projections of Ta....
Increment Revenues take administrative costs into account.
Historical Assessed Valuation and Ta.... Increment Revenues. The following tables show taxable
values and Tax Increment Revenues for the Project Area for fiscal years 1995/96 through 1999/00.
TABLE NO. 13
TOWN CENTRE II PROJECT AREA
HISTORICAL ASSESSED VALUATION AND TAX lNCREl\IlENT REVENUES"
Secured (1) S 101.888.890 S 115.989,759 S 115,109,300 S 117,949,060 S 124,537,450
Unsecured (1) 12.698.092 13.354.310 13.082.100 17,471.206 11.868.724
Total (2) S 114,586,982 $ 129,344,069 $ 128.191.400 $ 135,420,266 $ 136.406,174
Less: Base year (3) (33.119.003) (33.306.955) (33.306.955) (33.105,355) (33,105.355)
Increm:ntal Increase $ 81,467,979 S 96,037,114 $ 94,884.445 $ 102,314,911 $ 103,300,819
Tax Rate 1.010112% 1.010155% 1.010059% 1. 009962 % 1. 009903 %
Tax In=t Revenues $ 822.918 $ 970,124 $ 958.388 $ 1,033,342 $ 1,043,238
Unitary Revenues (4) 2.098 2.088 2,648 629 614
Total Tax RevemJeS (5) $ 825,016 $ 972,212 $ 961,036 $ 1,033,971 $ 1,043,852
* Does not reflect the anticipated Scripps Health property tax exemption ( see "TOWN CE'<'TRE II PROJECT
AREA - Description of the Project Area").
(1) Taxable Valuation at 100% of Assessor's Market Value, as of August 20 equalized roll.
(2) San Diego County Auditor-Controller's Office.
(3) Base year assessed values may vary from year to year based on changes in property ownership
of agencies exempt from property tax.
(4) See "Unitary Property" herein for a discussion of the method of allocating Unitary Revenues.
(5) The "Total Tax Revenues" are based on data furnished by the San Diego County Auditor-
Controller's Office. Actual Tax Increment Revenues received vary from Tax Increment
Revenues because of supplemental taxes, appeals or refunds, deductions for delinquencies and
tax-sharing agreements and administrative charges by the County.
Source: San Diego Coumy Auditor-Conuoller.
43
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*
(1)
(2)
(3)
TABLE NO. 14
OT A Y VALLEY R.OAD PROJECT AREA
HISTORICAL ASSESSED VALUATION AND TAX INCREl\<lENT REVENUES *
1997/98
19911199
1999loo
1996197
&cured (1) S 74.052.220 S 68.275,320 S 65.658.423 S 91.982.421 S 101,303,630
Unsecured (1) 20.951.011 20.521.067 18.941.942 18.832.693 19.065.138
Total (2) S 95.003.231 S 88.796,387 S 84,600,365 S 110,815.114 S 120.368.768
Less: Base y= (3) (18.431.119) (18.431.119) (18.431.119) (17.894.789) (17,894.789)
!ncrem:ntal Increase $ 76.572.112 S 70.365.268 S 66.169.246 S 92,920,325 S 102,473,979
Tax Rate 1.010138% 1.010143% 1.010091 % 1. 009987% 1.009369%
Taxln= Revenues S m,484 S 710,790 $ 668,369 S 938,483 S 1.034.341
Unitary Revenues (4) 50.478 50.221 51.566 46.085 44.989
Total Tax Reveo.ues (5) $ 823,962 S 761,011 S 719,935 S 984,568 S 1,079,330
Does not reflect the assessment appeal granted to Allied Waster Systems in January, 2000 (see "OTA Y
VALLEY ROAD PROJECT AREA - Assessment Appeals").
Taxable Valuation at 100% of Assessor's Market Value, as of August 20 equalized roll.
San Diego County Auditor-Controller's Office.
Base year assessed values may vary from year to year based on changes in property ownership
of agencies exempt from property tax.
See "Unitary Property" herein for a discussion of the method of allocating Unitary Revenues.
The "Total Tax Revenues" are based on data furnished by the San Diego County Auditor-
Controller's Office. Acroal Tax Increment Revenues received vary from Tax Increment
Revenues because of supplemental taxes, appeals or refunds, deductions for delinquencies and
tax-sharing agreements and administrative charges by the County.
Source: San Diego County Auditor-Controller.
(4)
(5)
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TABLE NO. 15
SOUTHWEST PROJECT AREA
HISTORICAL ASSESSED VALUATION AND TAX INCRElVlENT REVENUES
1995196
I996i97
1997/98
1998199
1999/00
S:c1m:d (1) S 247,533.177 S 248.629,822 S 249,783,551 S 258.196.443 S 269,261.990
Unsc:cured (1) 19.452.434 18.972.755 17.392.728 23.308.890 34.098.024
Total (2) S 266.985.611 S 267,<<J2..5n S 267,176,'J:l9 . S 281.505,333 S 303,360,014
Less: Base year (3) (219.498.444) (219.498.444) (219.498.444) (219.498.444) (219.498.444)
Incren=talincn:ase S 47,487,167 S 48.104,133 S 47,677,'035 S 62,006,889 S 83,861,570
T:JX Rate 1.010112 % 1.010161% 1.010151 % 1. 010155 % 1.010082 %
T:JXIn=RevOlllJeS S 479,674 S 485.929 S 481.618 S 626,366 S 847.071
Unitary RevOlllJeS (4) 259 258 252
T alai T:JX Revenues (5) S 479,674 $ 485,929 $ 481,sn $ 626,624 S 847,323
(1) Taxable Valuation at 100% of Assessor's Market Value, as of August 20 equalized roll.
(2) San Diego County Auditor-Controller's Office.
(3) Base year assessed values may vary from year to year based on changes in property ownership
of agencies exempt from property tax.
(4) See "Unitary Property" herein for a discussion of the method of allocating Unitary Revenues.
(5) The "Total Tax Revenues" are based on data furnished by the San Diego County Auditor-
Controller's Office. Actual Tax Increment Revenues received vary from Tax Increment
Revenues because of supplemental taxes, appeals or refunds, deductions for delinquencies and
tax-sharing agreements and administrative charges by the County.
Source: San Diego County Auditor-Concroller.
45
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Ta.'t Collections. Tax Increment Revenues distributed to the Agency are adjusted for delinquencies in
the payment of taxes, tax roll corrections, supplemental assessments and collection of prior year
delinquencies. The tables below represents Tax Increment Revenues allocated to and paid to the Agency
and the distribution rates as a percent of the original tax. levy.
TABLE NO. 16
TOWN CENTRE II PROJECT AREA
TAX COLLECTIONS
Original Tax Levy $ 972,212 $ 961,036 $1,033,971
Receivables (20,768) (18,083) (19,284)
Supplemental Assessments 100,453 9,490 29,151
Corrections/Refunds/ Adjustments (27,531) (4,533) (3,653)
Prior Year Collections 29.476 38,462 27,469
Tax lncrement Revenues Distributed (1) $ 1,053,842 $ 986,372 $1,067,654
Percent of Ori2ina1 Le Distributed 108.4 % 102.6 % 103.3%
(I) Prior to payments due under Tax Sharing Agreement and deposit to Low and Moderate 1ncome Housing
Fund.
TABLE NO. 17
OTAY VALLEY ROAD PROJECT AREA
TAX COLLECTIONS
Original Tax Levy $ 761,011 $ 719,935 $ 984,568
Receivables (15,762) (12,890) (15,683)
Supplemental Assessments (34,003) 60,063 100.581
Corrections/Refunds/Adjustments (23,322) (7,623) (14,665)
Prior Year Collections 27,710 28,036 19.144
Tax 1ncrement Revenues Distributed (1) $ 715,634 $ 787,521 $1,073,945
Percent of Ori2ina1 Lev Distributed 94.0% 109.4% 109.1%
(1) Prior to deposit to Low and Moderate Income Housing Fund.
46
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TABLE NO. 18
SOUTHWEST PROJECT AREA
TAX COLLECTIONS
Original Tax Levy $ 481,877 $ 626,624 $ 847,323
Receivables (10,726) (9,189) (10,072)
Supplemental Assessments 28,897 27,718 55,757
Corrections/Refunds! Adjustments (18,993) (5,700) (4,452)
Prior Year Collections 17.327 19,436 14,062
Tax Increment Revenues Distributed (1) $ 498,382 $ 658,889 $ 902,618
Percent of Orilrinal Le Distributed 103.4% 105.1 % 106.5%
(1) Prior to payments due under Tax Sharing Agreements and deposit to Low and Moderate Income Housing
Fund.
Tax Sharing Agreements
Pursuant to former 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". Agreements entered into by the Agency pursuant to said Section 33401(b) are described
below and are referred to herein as the "Tax Sharing Agreements", (see "TABLE NOS. 1, 2 and 3 -
PROJECTED TAX REVENUES AND BOND RETIREMENT" herein).
Town Centre II Project Area
County of San Diego. The Agency has entered into a Tax Sharing Agreement with the County of San
Diego. Pursuant to the agreement, the Agency is required to reimburse the County 13.25% of Tax
Increment Revenues allocated to the Town Centre II Project Area, beginning in the 26'" year of the
Redevelopment Plan (2014/15).
Olay Valley Road Proiect Area
There have been no Tax Sharing Agreements entered into with respect to the Otay Valley Road Project
Area.
Southwest Project Area
County of San Diego. The Agency has entered into a Tax Sharing Agreement with the County of San
Diego. Pursuant to the agreement, the Agency is required to reimburse the County for the amount of
Tax Increment Revenues generated by the County's share (27.15 %) of the compounded 2% annual
inflationary growth in assessed value over the base year amount. In addition, the Agency will reimburse
the County for 66.67% of the County's share of Tax Increment Revenues generated in excess of the 2 %
annual inflationary growth, reduced by 20% of such amounts required to be deposited in the Agency's
Low and Moderate Income Housing Fund.
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Sweetwater Union High School District. The Agency has entered into a Tax Sharing Agreement with
the Sweetwater Union High School District. Pursuant to the agreement, the Agency is required to
reimburse the District 40% of its 17.95% share of Tax Increment Revenues allocated to the Southwest
Project Area.
Southwestern Community College District. The Agency has entered into a Tax Sharing Agreement
with the Southwestern Community College District. Pursuant to the agreement, the Agency is required
to reimburse the District 40% of its 4.83% share of Tax Increment Revenues allocated to the Southwest
Project Area.
San Diego County Office of Education. The Agency has entered into a Tax Sharing Agreement with
the San Diego County Office of Education. Pursuant to the agreement, the Agency is required to
reimburse the Office 62.5% of its 1.62% share of Tax Increment Revenues allocated to the Southwest
Project Area.
ChuIa VIsta Elementary School District. The Agency has entered into a Tax Sharing Agreement with
the Chula Vista Elementary School District. Pursuant to the agreement, the Agency is required to
reimburse the District 40 % of its 27.45 % share of Tax Increment Revenues allocated to the Southwest
Project Area.
The Agency will also reimburse all taXing agencies in the Southwest Project Area for Tax Increment
Revenues attributable to voter-approved indebtedness.
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DEBT STRUCTURE
Outstanding Indebtedness of the Town Centre II Project Area
The Town Centre II Project Area had the following outstanding indebtedness as of May I, 2000:
. Category of
Indebtedness
(1) Advances from the City - General Fund
(2) Reimbursem:rn Agreem:m with City
(3) Advances from the Ageocy - Bayfrorn Project
(4) Reirnbursem:m - Housing Fund
$ 610,960
12,228,205
3,681,667
155,605
$ 610,960
12,228,205
3,681,667
155,605
N/A
N/A
N/A
2001
(1) The City has advanced funds to the Agency to finance certain operations. The Agency intends
to repay this advance with proceeds of the Town Centre II Project Bonds.
(2) The Agency entered into a reimbursement agreement with the City to reimburse the City for
debt service paid on the City's 1993 Certificates of Participation, used to finance a public
parking facility located in the Town Centre II Project Area. Repayment of this obligation plus
interest is to be made as funds become available and is subordinate to the Town Centre II
Project Bonds.
(3) The Agency's Bayfront Project Area has advanced funds to the Town Centre II Project Area to
finance certain operations. The Agency intends to repay this advance with proceeds of the
Town Centre II Project Bonds.
(4) In 1994, the Low and Moderate Income Housing Fund made a loan to the Town Centre II
Project Area. The Housing Fund Reimbursement has a lien on the Tax Revenues subordinate
to the Town Centre II Project Bonds.
Outstanding Indebtedness of the Otay Valley Road Project Area
The Otay Valley Road Project Area had the following outstanding indebtedness as of May 1, 2000:
(1) Advances from the Ageocy - Bayfrorn Project
$ 11,465,848 $ 11,465,848
N/A
(1) The Agency's Bayfront Project Area has advanced funds to the Otay Valley Road Project Area
to finance certain operations. The Agency intends to repay a portion of this advance with
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proceeds of the Otay Valley Road Project Bonds. Repayment of this balance of this obligation
plus interest is to be made as funds become available and is subordinate to the Otay Valley
Road Project Bonds. .
Outstanding Indebtedness of the Southwest Project Area
The Southwest Project Area had the following outstanding indebtedness as of May 1, 2000:
(1) Advances from the Agency - Bayfrom Project $
(2) Advances from the Agency - Otay Valley Project
(3) Advances from the City - General Fund
(4) Advances from the City - Sewer Fund
717,544 $
300,450
671,144
1,043,391
717,544
300,450
671,144
1,043,391
N/A
N/A
N/A
N/A
(1) The Agency's Bayfront Project Area has advanced funds to the Southwest Project Area to
finance certain operations. The Agency intends to repay a portion of this advance with
proceeds of the Southwest Project Bonds. Repayment of this balance of this obligation plus
interest is to be made as funds become available and is subordinate to the Southwest Project
Bonds.
(2) The Agency's Otay Valley Road Project Area has advanced funds to the Southwest Project
Area to finance certain operations. The Agency intends to repay a portion of this advance with
proceeds of the Southwest Project Bonds. Repayment of this obligation plus interest is to be
made as funds become available and is subordinate to the Southwest Project Bonds.
(3) The Agency entered into a disposition and development agreement with Cypress Creek Co. for
the reimbursement of an amount equal to one-half of the sales tax generated by the Palomar
Trolley Center and received by the City's Genera.! Fund. The agreement has no lien on Tax
Increment Revenues of the Southwest Project Area. The City has been advancing funds to the
Southwest Project Area to make the payments due under the agreement. Repayment of this
obligation to the City's General Fund is to be made as funds become available and is
subordinate to the Southwest Project Bonds.
(4) The City's Sewer Fund has advanced funds to the Agency to fmance certain operations. The
Agency intends to repay this advance with proceeds of the Town Centre 11 Project Bonds.
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Scheduled Debt Service on the Town Centre n Project Bonds
The following is the scheduled Debt Service on the Town Centre II Project Bonds.
Interest Payment Date Principal Interest Annual Debt Service
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Scheduled Debt Service on the Otay Valley Road Project Bonds
The following is the scheduled Debt Service on the Otay Valley Road Project Bonds.
Interest Payment Date PrinciPal Interest Annual Debt Service
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Scheduled Debt Service on the Southwest Project Bonds
The following is the scheduled Debt Service on the Southwest Project Bonds.
Interest Payment Date Principal Interest Annual Debt Service
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Additional Agency Indebtedness
Parity Debt. The Agency may issue or incur "Parity Debt", including any loans, bonds, notes;
advances or indebtedness payable from Tax Revenues on a parity basis with the respective series of
Bonds, subject to the following specitic conditions.
The Trustee shall receive, prior to the delivery of any Parity Debt:
(a) The Agency shall be in compliance with all covenants set forth in the applicable Indenture and
all Supplemental Indentures.
(b) As applicable:
(i) With respect to the Town Centre IT Project Area, the Tax Revenues estimated to be
received for the then current Fiscal Year based upon the most recent assessed valuation
of property within the Town Centre IT Project Area as evidenced in written
documentation from an appropriate official of the County, plus (at the option of the
Agency) the Additional Revenues, shall be at least eqnal to one hundred seventy-five
percent (175 %) of Maximum Annual Debt Service on all Town Centre IT Project Bonds
which will be Outstanding i=ediately following the issuance of such Parity Debt; or
(ii). With respect to the Otay Valley Road Project Area, the Tax Revenues estimated to be
received for the then current Fiscal Year based upon the most recent assessed valuation
of property within the Otay Valley Road Project Area as evidenced in written
documentation from an appropriate official of the County, plus (at the option of the
Agency) the Additional Revenues, shall be at least equal to one hundred fifty percent
(150%) of Maximum Annual Debt Service on all Otay Valley Road Project Bonds
which will be Outstanding i=ediately following the issuance of such Parity Debt; or
(iii) With respect to the Southwest Project Area, the Tax Revenues estimated to be received
for the then current Fiscal Year based upon the most recent assessed valuation of
property within the Southwest Project Area as evidenced in written documentation from
an appropriate official of the County, plus (at the option of the Agency) the Additional
Revenues, shall be at least equal to one hundred twenty-five percent (125%) of
Maxirrnun Annual Debt Service on all Southwest Project Bonds which will be
Outstanding i=ediately following the issuance of such Parity Debt.
(c) The Supplemental Indenture providing for the issuance of such Parity Debt shall provide that
interest thereon shall not be payable on any dates other than March 1 and September 1, and
principal thereof shall be payable on September 1 in any year in which principal is payable.
(d) The Supplemental Indenture providing for the issuance of such 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 Parity Debt shall not cause the Agency to exceed any applicable Plan
Limitations .
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(t) In the event that such Parity Debt shall bear interest at a variable rate, (i) for purposes of
meeting the requirements of the preceding clause (b), such Parity Debt shall be assumed to bear
interest at a fixed rate equal to the maximum rate permitted to be borne by such Parity Debt
under the Supplemental Indenture providing for t\ie issuance thereof, and (ii) for purposes of
meeting the requirements of the preceding clause (d), such Parity Debt shall be assumed to bear
interest at a fL'\:ed rate equal to the most recendy published 25 Bond Revenue Index in The Bond
Buyer (or, if such index is not published as of the date of issuance of such Parity Debt, in the
most recent publication of a comparable index selected by the Agency) plus fifty (50) basis
points.
(g) The Agency shall deliver to the Trustee a Certificate of the Agency (which may be based in
part on an opinion of Bond Counsel), that the conditions precedent to the issuance of such
Parity Debt set forth in the Indenture have been satisfied.
Subordinate Debt. In addition to the Bonds and any Parity Debt, from time to time the Agency may
issue or incur Subordinate Debt in such principal amount as may be determined by the Agency,
provided that the issuance of such Subordinate Debt will not cause the Agency to exceed any applicable
Plan Limitations.
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SUMMARY OF THE INDENTURES
The following is a SUlTl11Ulry of certain provisions of the Indentures and does not purport to be a
complete restatement thereof Reference is hereby made to the Indentures for the complete terms
thereof Copies of the Indentures are available from the Agency upon request.
Establishment of Funds
Special Fund; Deposit of Ta,< Revenues. The Agency will eStablish and hold a Special Fund, separate
and apart from other accounts of the Agency, and will deposit into it all of the respective Tax Revenues
received in any Bond Year promptly upon receipt, until such time during such Bond Year. as the
amounts on deposit in the applicable Special Fund equal the aggregate amounts required to be
transferred to the Trustee for deposit into the Interest Account, the Principal Account, the Sinking
Account, Reserve Account, and the Redemption Account in such Bond Year as described below and for
deposit in such Bond Year in the funds and accounts established by any Supplemental Indenture for any
Parity Debt with respect to a series of Bonds. Ail Tax Revenues received by the Agency during any
Bond Year in excess of the amount required to be deposited in the Special Fund during such Bond Year
will be released from the pledge and lien of the Indenture for the security of the applicable series of
Bonds.
Debt Service Fund. For each respective series of Bonds, the Trustee will establish and hold the Debt
Service Fund. The Agency will transfer moneys in the respective Special Fund to the Trustee in the
following amounts at the following times, for deposit by the Trustee in the following respective special
accounts within the Debt Service Fund, in the following order of priority:
(a) Interest Account. On or before the Business Day preceding each date on which interest on the
Bonds is due and payable, the Agency will withdraw from the Special Fund and transfer to the
Trustee fol' deposit in the Interest Account an amount which, when added to the amount then on
deposit in the Interest Account, will be equal to the aggregate amount of the interest coming
due and payable on the outstanding Bonds and any Parity Debt on such date. Subject to certain
rights of the Trustee, all moneys in the Interest Account will be used and withdrawn by the
Trustee solely for the purpose of paying the interest on the Bonds and any Pariry Debt as it
comes due and payable.
(b) Principal Account. On or before the Business Day preceding each date on which principal of
the Bonds is due and payable at maturity, the Agency will withdraw from the Special Fund and
transfer to the Trustee for deposit in the Principal Account an amount which, when added to the
amount then on deposit in the Principal Account, will be equal to the amount of principal
coming due and payable on such date on the outstanding Bonds and any Parity Debt. Subject to
certain rights of the Trustee, all moneys in the Principal Account will be used and withdrawn
by the Trustee solely for the purpose of paying the principal of the Bonds and any Parity Debt
upon the maturity thereof.
(c) Sinking Account. On or before the Business Day preceding each date on which any outstanding
term Bonds become subject to mandatory Sinking Account redemption, the Agency will
withdraw from the Special Fund and transfer to the Trustee for deposit in the Sinking Account
an amount which, when added to the amount then contained in the Sinking Account, will be
equal to the aggregate principal amount of the term Bonds and any Parity Debt subject to
mandatory Sinking Account redemption on such date. Subject to certain rights of the Trustee,
all moneys on deposit in the Sinking Account will be used and withdrawn by the Trustee for the
sole purpose of paying the principal of the term Bonds and any Parity Debt as it comes due and
payable upon the mandatory Sinking Account redemption thereof.
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(d) Reserve Account. In the event of a deticiency in the Reserve Account, the Trustee will
promptly notify the Agency of such fact. Promptly upon receipt of any such notice, the Agency
will restore such deticiency from Tax Revenues as soon as P9ssible. Subject to certain rights of
the Trustee, amounts in the Reserve Account will be u~ed a,nd withdrawn by the Trustee solely
for the purpose of making transfers to the foregoing accountS on any date which the principal of
or interest on the Bonds and any Parity Debt becomes due and payable, in the event of any
deticiency at any time in any of such accounts, or for the retirement of all the Bonds
Outstanding. Amounts in the Reserve Account in excess of the Reserve Requirement will be
transferred to the Interest Account.
The Agency has the right at any time to release funds from the Reserve Account, in whole or in
part, by tendering to the Trustee a Qualified Reserve Account Credit Instrument, and certain
other documents as specified in the Indenture; whereupon the Trustee will transfer amounts on
deposit in the Reserve Account to the Agency to be used for authorized purposes. Upon the
expiration of any Qualified Reserve Account Credit Instrument, the Agency will either (i)
replace such Qualified Reserve Account Credit Instrument with a new Qualified Reserve
Account Credit Instrument, or (ii) deposit or cause to be deposited with the Trustee an amount
of funds equal to the Reserve Requirement, to be derived from the first available Tax
Revenues.
(e) Redemption Account. On or before the Business Day preceding each date on which any
outstanding Bonds become subject to redemption, other than Sinking Account redemption, the
Agency will withdraw from the Special Fund and transfer to the Trustee for deposit in the
Redemption Account an amount required to pay the principal of and premium, if any, on the
Bonds to be so redeemed on such date. Ail moneys on deposit in the Redemption Account will
be used and withdrawn by the Trustee for the sole purpose of paying the principal of and
premium, if any, on the Bonds upon the redemption thereof, on the date set for such
redemption, other than mandatory Sinking Account redemption of Term Bonds.
Investment of Funds
Amounts held by the Trustee in the funds and accounts established under the Indenture will be invested
by the Trustee in Permitted Investments specified in the written request of the Agency. In the absence
of any such direction from the Agency, the Trustee will invest any such moneys solely in certain money
market funds or portfolios investing in short-term U.S. Treasury securities, rated AAAm or AAAm-G
by Standard & Poor's (described in clause (d) of the definition of Permitted Investments). Moneys in
the Reserve Account shall be invested in investments with a maturity of not greater than 5 years or
alternatively in an investment agreement which permits withdrawals or deposits without penalty at such
time as such money will be needed or in order to replenish the Reserve Account. All moneys in the
Redevelopment Fund or the Special Fund will be invested by the Agency in any investments authorized
for the investment of Agency funds under the laws of the State of California. The Agency currently
invests all cash on hand in the investments authorized by the Government Code. Ail interest or gain
derived from the investment of amounts in any fund or account will be retained therein; provided that
all interest or gain from the investment of amounts in the Reserve Account will be deposited by the
Trustee in the Interest Account to the extent not required to cause the balance in the Reserve Account to
equal the Reserve Requirement. The funds and accounts held by the Trustee shall be valued no less
frequently than semi-annually by the Trustee.
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Other Covenants of the Agency
Punctual Payment. The Agency will punctually payor cause to be paid the principal, premium (if
any) and interest to become due in respect of all the Bonds in strict conformity with the terms of the
Bonds and of the Indentures. The Agency agrees that it will faithfully observe and perform all of the
conditions, covenants and requirements of the Indentures, and all Supplemental Indentures.
Limitation on Additional Indebtedness. The Agency covenants that it will not issue any bonds, notes
or other obligations, enter into any agreement or otherwise incur any indebtedness, which is in any case
payable from all or any part of the Tax Revenues, excepting only the Bonds, any Parity Debt and any
Subordinate Debt.
Plan Limit. The Agency agrees to manage its fiscal affairs in a manner which ensures that it will have
sufficient Tax Revenues available under the Plan Limitations in the amountS and at the times required to
enable the Agency to pay the principal of and interest and premium (if any) on the Bonds and any
Parity Debt when due.
Books and Accounts; Financial Statements. The Agency will keep, or cause to be kept, proper books
of record 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 Redevelopment of the
Projects, Tax Revenues and the Special Funds. Such books of record and accounts will at all times
during business hours be subject to the inspection of the Owners of not less than 10 % in aggregate
principal amount of the Bonds then Outstanding, or their representatives authorized in writing. The
Agency will cause to be prepared annually, within 180 days after the close of each fIScal year so long as
any of the Bonds are Outstanding, complete audited financial statements with respect to such fIScal
year, and will furnish a copy of such statements to any Bondowner upon reasonable request and at the
expense of such Bondowner.
Maintenance of Tax Revenues. The Agency will comply with all requirements of the Redevelopment
Law to insure the allocation and payment to it of the Tax Revenues, including without limitation the
timely filing of any necessary statements of indebtedness with appropriate officials of San Diego County
and the State of California. The Agency will not amend any of the Redevelopment Plans in a manner
that will reduce Tax Revenues in any future Fiscal Year unless the Agency first obtains the report of an
Independent Redevelopment Fiscal Consultant stating that the applicable Tax Revenues for the then
current Fiscal Year (calculated on the assumption that such reduction of Tax Revenues was in effect
throughout such Fiscal Year), are at least equal to the same percent of Maximum Annual Debt Service
on the Bonds which will be Outstanding immediately following the effective date of such amendment as
required for the issuance of Parity Debt. Amendments resulting in payments pursuant to the Tax
Sharing Statues shall be permitted so long as . The Agency will not
enter any agreement with the County or any other governmental or private entity, which would have the
effect of reducing the amount of Tax Revenues otherwise available to the Agency for payment of the
Bonds, unless such agreement or amendment constitutes Subordinate Debt. [The Agency reserves the
right (but shall be under no obligation) to make fmdings under Section 33334.6(d) of the Law at any
future date to the extent applicable].
Tax Covenants. The Agency will take no action or refrain from taking any action with respect to the
proceeds of any of the Bonds which would cause any of the Bonds to be "arbitrage bonds", "private
activity bonds" or "federally guaranteed" within the meaning of applicable federal tax law. The
Agency will cause to be calculated all excess investment earnings which are required to be rebated to
the United States of America under applicable federal tax law, and will cause all required amounts to be
rebated from available funds of the Agency.
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Continuing Disclosure. The Agency covenants that it will comply with and carry out all of the its
obligations under the Continuing Disclosure Certificate. Notwithstanding any other provision of the
Indenture, failure of the Agency to comply with the Continuing Disclosure Certiticate shall not be
considered an Event of Default; however, any Participating Underwriter (as detined in the Certiticate)
or any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the Agency to
comply with its obligations under this provision of the Indenture.
Amendment of Indenture
The Indenture and the rights and obligations of the Agency and the Owners may be modified or
amended at any time without the consent of any Owners, to the extent permitted by law, but only for
anyone or more of the following purposes: (a) to add covenants and agreements of the Agency or to
limit or surrender any rights or power reserved to or conferred upon the Agency; (b) to cure any
ambiguity, or to cure, correct or supplement any defective provision, or in any other respect as the,
Agency may deem necessary or desirable, provided under any circumstances that such modifications or
amendments do not materially adversely affect the interests of the Owners in the opinion of Bond
Counsel; (c) to provide for the delivery of a Qualified Reserve Account Credit InstrUment; (d) to
provide for the issuance of Parity Debt (as permitted by the applicable Indenture) and to provide the
terms and conditions under which such Parity Debt may be issued; or (e) to amend any provision
relating to the requirements of or compliance with the Tax Code.
The Indenture may be amended at any time with the written consent of the Owners of a majority in
aggregate principal amount of the outstanding Bonds. No such amendment may (a) extend the maturity
of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Agency to
pay the principal or interest at the time and place and at the rate and in the currency provided therein of
any Bond without the express written consent of the owner of such Bond,' (b) reduce the percentage of
Bonds required for the written consent to any such amendment, or (c) without its written consent
thereto, modify any of the rights or obligations of the Trustee.
Events of Default and Remedies
Events of Default Defined. The following events constitute Events of Default under the Indentures:
(a) Failure to pay any installment of the principal of any Bonds when and as the same shall become
due and payable, whether at maturity, by proceedings for redemption, by acceleration or
otherwise.
(b) Failure to pay any instaIlment of interest on any Bonds when and as the same shall become due
and payable.
(c) Failure by the Agency to observe and perform any of the other covenants, agreements or
conditions contained in the Indenture or in the Bonds, if such failure continues for a period of
60 days after written notice thereof has been given to the Agency by the Trustee or to the
Agency and the Trustee; provided that if in the reasonable opinion of the Agency the failure
stated in the notice can be corrected, but not within such 60 day period, such failure will not
constitute an event of default if corrective action is instituted by the Agency within such 60 day
period and the Agency thereafter diligently and in good faith cures such failure in a reasonable
period oftime.
(d) Filing by the Agency of a petition in bankruptcy.
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Remedies. If an Event of Default has occurred and is continuing, the Trustee may, and at the written
direction of the Owners of a majority in aggregate principal amount of the Bonds at the time
Outstanding shall, (a) upon notice in writing to the Agency, declare the principal of the Bonds then
Outstanding, and the interest accrued thereon, to be due and payable immediately, and (b) upon receipt
of indemnitication satisfactory to it from any liability or expense, including payment of the fees and
expenses of its counsel, exercise any other remedies available to the Trustee or the Owners in law or in
equity. The Trustee is appointed as the true and lawful attorney-in-fact of the Owners for the purpose
of bringing any suit, action or proceeding and to do and perform any and all acts for and on behalf of
the Owners, as may be necessary or advisable in the opinion of the Trustee, subject to the provisions of
the Indenture and applicable provisions of any law.
In the event that the Trustee, upon the happening of and Event of Default, shall have taken any action,
by judicial proceedings or otherwise, pursuant to its duties under the Indenture, whether upon its own
discretion or upon the request of the Owners of a majority in principal amount of the Bonds then
Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the
Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal compromise,
settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there
no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise
dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written
request signed by the Owners of a majority in principal amount of the Outstanding Bonds opposing such
discontinuance, withdrawal, compromise, settlement or other disposal of such litigation.
All of the Tax Revenue and all sums in the funds and accounts established and held by the Trustee
under the Indenture upon the date of the declaration of acceleration, and all sums thereafter received by
the Trustee under the Indenture, shall be applied by the Trustee as follows and in the following order:
(a) To the payment of any fees, costs and expenses incurred by the Trustee to protect the interests
of the Owners of the Bonds; payment of the fees, costs and expenses of the Trustee (including
fees and expenses of its counsel) incurred in and about the performance of its powers and duties
under the Indenture and the payment of all fees, costs and expenses owing to the Trustee.
(b) To the payment of the whole amount then owing and unpaid upon the Bonds for interest and
principal with interest on such overdue amounts at the respective rates of interest borne by the
Outstanding Bonds, and in case such moneys shall be insufficient to pay in full the whole
amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal
and interest on overdue amounts without preference or priority among such interest, principal
and interest on overdue amounts ratably to the aggregate of such interest, principal and interest
on overdue amounts.
Limitations of Owners' Rights. No Owner has the right to institute any suit, action or proceeding at
law or in equity, for any remedy under the Indenture, unless (a) such Owner has previously given to the
Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in
aggregate principal amount of all the Bonds then Outstanding have requested the Trustee in writing to
exercise its powers under the Indenture; (c) said Owners have tendered to the Trustee indemnity
reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in
compliance with such request; and (d) the Trustee has refused or failed to comply with such request for
a period of 60 days after such written request has been received by the Trustee and said tender of
indemnity is made to the Trustee.
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Defeasance of Bonds
If the Agency shall pay and discharge the entire indebtedness of any Bonds in anyone or more of the
following wayS': (a) by paying or causingto be paid the principal of and interest on such Bonds, as and
when the same become due and payable; (b) by irrevocably depositing with the Trustee or another
fiduciary, in trust, at or before maturity, money with, together with the available amounts then on
deposit in the funds and accounts established pursuant to the Indenwre and all Supplemental Indentures,
in the opinion or report of an Independent Accountant is fully sufficient to pay such Bonds, including
all principal, interest and redemption premium, if any; (c) by irrevocable depositing with the Trustee or
another fiduciary, in trust, non-callable Defeasance Securities in such amount as an Independent
Accountant shall determine will, together with the interest to accrue thereon and available moneys then
on deposit in any of the funds and accounts established pursuant to the Indenwre and all Supplemental
Indenwres, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all
principal, interest and redemption premium, if any, at or before maturity; or (d) by purchasing such
Bonds prior to mawrity and tendering such Bonds to the Trustee for cancellation; and if such Bonds are
to be redeemed prior to the maturity thereof notice of such redemption shall have been duly given or
provision satisfactory. to the Trustee shall have been made for the giving of such notice, then, at the
election of the Agency, and notwithstanding that any such Bonds shall not have been surrendered for
payment, the pledge of the Tax Revenues and other funds provided for in the Indenrure and all other
obligations of the Trustee and the Agency under the Indenwre with respect to such Bonds shall cease
and terminate, except only (a) the obligation of the Agency and the Trustee with respect to rebate of
Rebatable Arbitrage, (b) the obligation of the Trustee to transfer and exchange Bonds, (c) the obligation
of the Agency to payor cause to be paid to the Owners of such Bonds, from the amounts so deposited
with the Trustee, all sums due thereon, and (d) the obligations of the Agency to compensate and
indemnify the Trustee. Notice of such election shall be filed with the Trustee. Any fund thereafter
held b the Trustee, which are nor required for said purpose, shall be paid over to the Agency.
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LEGAL MAnERS
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
lirnited. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be
qualitied to the extent that the enforceability of certain legal rights related to the Indentures 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 each Indenture is a valid and binding contract 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.
The Agency has no knowledge of any fact or other information which would indicate that the
Indentures are not so enforceable against the Agency, except to the extent such enforcement is limited
by principles of equity and by Slate 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 and by Stradling Y occa
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 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, interest on the Bonds is exempt from 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 maximum taxable liability of such corporations.
In addition, the difference between the issue price of a Bond (the fIrst price at which a substantial
amount of the Bonds of a maturity is to be sold to the public) and the Slated redemption price at
maturity of such Bond constitutes original issue discount. Original issue discount accrues under a
constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash
attributable to such excludable income. In the opinion of Bond Counsel, the amount of original issue
discount that accrues to the owner of a Bond is excludable from the gross income of such owner for
federal income tax purposes, is not an item of taX preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations, and is exempt from State of California personal
income tax.
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Bond Counsel's opinion as to the exclusion from gross income tor federal income tax purposes of
interest (and original issue discount) on the Bonds is based upon certain representations of fact and
certitications made by the City, the Underwriter and others and is subject to the condition that the City
complii:S with all requirements of the Code that must be satisfied subsequent to the issuance of the
Bonds to assure that interest on the Borids will not become includable in gross income for federal
income tax purposes. Failure to comply with such requirements of the Code might cause interest (and
original issue discount) on the Bonds to be included in gross income for federal income tax purposes
retroactive to the date of issuance of the Bonds. The City has covenanted to comply with all such
requirements.
Should the interest (and original issue discount) on the Bonds become includable in gross income for
federal income tax purposes, the Bonds are not subject to early redemption as a result of such
occurrence and will remain outstanding until maturity or until otherwise redeemed in accordance with
the Fiscal Agent Agreement.
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.
Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the Bonds
is excluded from gross income for federal income tax purposes provided that the Ciry continues to
comply with certain requirements of the Code, the accrual or receipt of interest (and original issue
discount) on the Bonds may otherwise affect the tax liability of the recipient. The extent of these other
tax consequences will depend upon the recipient's particular tax status and other items of income or
deductions. Bond Counsel expresses no opinion regarding any such consequences. Accordingly, all
potential purchasers should consult their tax advisors before purchasing any of the Bonds.
The form of Bond Counsel's opinion is set forth in "APPENDIXE" hereto.
Absence of Litigation
The Agency will furnish a certificate dated as of the date of delivery of the Bonds that there is not now
known to be pending or threatened any litigation restraining or enjoining the execution or delivery of
the Indentures or the sale or delivery of the Bonds or in any manner questioning the proceedings and
authority under which the Indentures are to be executed and delivered or the Bonds are to be delivered
or affecting the validity thereof.
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CONCLUDING INFORMATION
Rating on the Bonds
Standard & Poor's Ratings Services has assigned their rating of " " to the Bonds. Such rating
ret1ects 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
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 Financing Consultant
The material contained in this Official Statement was prepared by Rod Gunn Associates, Inc., Seal
Beach, California, an independent financial consulting firm, who advised the Agency as to the rmancial
structure and certain other financial matters relating to the Bonds. The infonnation set forth herein has
been obtained by Rod Gunn Associates, Inc. from sources which are believed to be reliable, but such
infonnation is not guaranteed by Rod Gunn Associates, Inc. as to accuracy or completeness, nor has it
been independently verified. Fees paid to Rod Gunn Associates, Inc. are contingent upon the sale and
delivery of the Bonds.
Additional Information
The summaries and references contained herein with respect to the Indentures, the Bonds, statutes and
other 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 hereof included in the applicable Indenture. Definitions of certain terms used herein are set
forth in "APPENDIX A". Copies of the Indentures are available for inspection during the period of
initial offering on the Bonds at the offices of the Financing Consultant, Rod Gunn Associates, Inc.,
3010 Old Ranch Parkway, Suite 330, Seal Beach, California 90740, telephone (562) 598-7677. Copies
of these documents may be obtained after delivery of the Bonds from the City at 276 Fourth Avenue,
Chula Vista, California 91910.
References
Any 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 of this Official Statement by the Treasurer has been duly authorized by the
Redevelopment Agency of the City of ChuIa Vista.
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
By:
Treasurer
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APPENDIX A
DEFINITIONS OF CERTAIN TERMS
Unless otherwise defined in this Ofticial Statement, the following terms have the following meanings.
"Additional Revenues" means, as of the date of calculation, the amount of Tax Revenues which, as
shown in the Report of an Independent Redevelopment Fiscal Consultant, are estimated to be receivable
by the Agency within the Fiscal Year following the Fiscal Year in which such calculation is made as a
result of increases in the assessed valuation of taxable property in the Project Area due to (i) transfer of
ownership or any other interest in real property which has been recorded but which is not then reflected
on the tax rolls and/or (ii) intlation at an assumed annual intlation rate equal to the lesser of (a) the
annual rate of inflation for the preceding twelve-month period for which figures are available or (b) two
percent (2%), but only if the rate of inflation had increased by at least two percent (2%) in each of the
preceding five Fiscal Years. For purposes of this definition, the term "increases in the assessed
valuation" means the amount by which the assessed valuation of taxable property in the Project Area is
estimated to increase above the assessed valuation of taxable property in the Project Area (as evidenced
in the written records of the County) as of the date on which such calculation is made.
"Annual Debt Service" means, for each Bond Year, the sum of (a) the interest payable on the
Outstanding Bonds in such Bond Year, and (b) the principii! amount of the Outstanding Bonds
scheduled to be paid in such Bond Year upon the maturity or mandatory Sinking Account redemption
thereof.
"Bond Year" means any twelve-month period beginning on _ in any year and extending to the
next succeeding September I, both dates inclusive; except that the first Bond Year shall begin on the
Closing Date and end on September 1, 2000.
"Business Day" means a day of the year (other than a Saturday or Sunday) on which banks in
California, are not required or permitted to be closed, and on which the Federal Reserve banking
system is open.
"Certificate of the Agency" means a certificate in writing signed by the Chair, Executive Director,
Deputy Executive Director, Finance Officer or Secretary of the Agency, or any other officer of the
Agency duly authorized by the Agency for that purpose.
"Defeasance Securities" means any of the following, or any combination thereof: (a) cash, (b) State
and Local Government Series securities issued by the United States Treasury, (c) United States
Treasury bills, notes and bonds, as traded on the open market, (d) zero coupon United States Treasury
Bonds, and (e) any other investments approved by the Bond Insurer as Defeasance Securities.
"Federal Securities" means any direct obligations of the United States of America and securities fully
and unconditionally guaranteed as to the timely payment of principal and interest by the United States
of America, provided, that the full faith and credit of the United States of America must be pledged to
any such direct obligation or guarantee.
"Fiscal Year" means any twelve-month period beginning on July 1 in any year and extending to the
next succeeding June 30, both dates inclusive, or any other twelve-month period selected and
designated by the Agency as its official fiscal year period pursuant to a Certificate of the Agency filed
with the Trustee.
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"Independent Accountant" means any certitied public accountant or tirm of such certitied public
accountants duly licensed or registered or entitled to practice and practicing as such under the laws of
the State, appointed by or acceptable to the Agency. and who, or each of whom: (a) is in fact
independent and not under domination of the Agency; (b) does not have any substantial interest, direct
or indirect, with the Agency; and (c) is not connected with the Agency as an ofticer or employee of the
Agency, but who may be regularly retained to make reports to the Agency.
"Independent Redevelopment Fiscal Consultant" means any consultant or tirm of such consultants
appointed by or acceptable to the Agency and who, or each of whom: (a) is judged by the Agency to
have substantial expertise in matters relating to the collection, estimation and projection of Tax
Revenues or otherwise with respect to the financing of redevelopment projects; (b) is in fact
independent and not under domination of the Agency; (c) does not have any substantial interest, direct
or indirect, with the Agency other than as the Original Purchaser, and (d) is not connected with the
Agency as an officer or employee of the Agency, but who may be regularly retained to make reports to
the Agency.
"Information Services" means Financial Infortnation, Inc.'s "Dally Called Bond Service", 30
Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Infortnation
Services' "Called Bond Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's
Investors Service "Municipal and Government," 99 Church Street, 8th Floor, New York, New York
10007, Attention: Municipal News Reports; Standard & Poor's Corporation "Called Bond Record," 25
Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of
the Securities and Exchange Commission, such other addresses and/or such other services providing
infortnation with respect to the redemption of bonds as the Agency may designate in a Request of the
Agency delivered to the Trustee.
"Interest Payment Date" means June 1,2000, and each December 1 and June 1 thereafter so long as
any of the Bonds remain unpaid.
"Maximum Annual Debt Service" means, as of the date of calculation, the largest amount of Annual
Debt Service on all Outstanding Bonds for the current or any future Bond Year. For purposes of such
calculation, there shall be excluded a pro rata portion of each installment of principal of any Parity
Debt, together with the interest to accrue thereon, in the event and to the extent that the proceeds of
such Parity Debt are deposited in an escrow fund from which amounts may not be released to the
Agency unless the Agency meets the requirements of Section 3.5 for the issuance of Parity Debt at the
time of such release, taking the released proceeds into account.
"Moody's" means Moody's Investors Service, of New York; New York, and its successors.
"Outstanding" when used as of any particular time with reference to Bonds, means (subject to the
provisions of the Indenture) all Bonds except: (a) Bonds theretofore canceled by the Trustee or
surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have been paid within the
meaning of the Indenture; and (c) Bonds in lieu of or in substitution for which other Bonds shall have
been authorized, executed, issued and delivered by the Agency pursuant to the Indenture.
"Owner" or "Bondowner" means, with respect to any Bond, the person in whose name the ownership
of such Bond shall be registered on the Registration Books.
"Parity Debt" means any bonds, notes, loans, advances or other indebtedness issued or incurred by the
Agency on a parity with the respective series of Bonds pursuant to the Indenture.
"Permitted Investments" means any of the following which at the time of investment are legal
investments under the laws of the State for the moneys proposed to be invested therein:
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(a) Direct obligations of the United States of America (including obligations issued or held in book-
entry form on the books of the Department of the Treasury, and CATS and TIGRS) or
obligations the principal ,of and interest on which are unconditionally guaranteed by the United
States of America.
(b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the
following federal agencies and provided such obligations are backed by the full faith and credit
of the United States of America (stripped securities are only permitted if they have been
stripped by the agency itself):
(i) U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership
(ii) Farmers Home Administration (FmHA)
Certificates of beneficial ownership
(ill) Federal Financing Bank
(iv) Federal Housing Administration Debentures (FHA)
(v) General Services Administration
Participation certificates
(vi) Government National Mortgage Association (GNMA or "Ginnie Mae")
GNMA-guaranteed mortgage-backed bonds
GNMA -guaranteed pass-through obligations
(vii) U.S. Maritime Administration
Guaranteed Title XI financing
(viii) U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Agency Bonds
New Communities Debentures - U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds - U.S. gove=ent guaranteed public housing
notes and bonds
(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the
following non-full faith and credit U.S. government agencies (stripped securities are only
permitted if they have been Stripped by the agency itself):
(i) Federal Home Loan Bank System
Senior debt obligations
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(ii) Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac")
Participation certificates
Senior debt obligations
(iii) Federal National Mortgage Association (FNMA or "Fannie Mae")
(iv) Student Loan Marketing Association (SLMA or "Sallie Mae")
Senior debt obligations
(v) Resolution Funding Corp. (REFCORP) obligations
(vi) Farm Credit System Corp. - Consolidated system-wide bonds and notes
(d) Money market funds registered under the Federal Investment Company Act of 1940, whose
shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of
AAAm-G, AAAm or AAm and if rated by Moody's rated Aaa, Aa1 or Aa2 (including those of
the Trustee and its affiliates).
(e) Certificates of deposit secured at all times by collateral described in (A) and/or (B) above,
Such certificates must be issued by commercial banks, savings and loan associations or mutual
savings banks. The collateral must be held by a third party and the Bondholders must have a
perfected first security interest in the collateral.
(f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are
fully insured by FDIC, including BlF and SAlF (including those of the Trustee and its
affiliates).
(g) Investment Agreements approved by the Bond Insurer, with prior written notice to Moody's
and S&P, with an entity, or guaranteed by an entity, whose long-term debt is rated not less than
AA by S&P and Moody's at the time of execution of such agreement and which permits the
withdrawal of all funds and accrued interest to the date of withdrawal, without penalty, in the
event that such long-term rating is less than "AA."
(h) Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's and "A-I" or better
by S&P.
(i) Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one
of the two highest rating categories assigned by such agencies.
G) Federal funds or bankers acceptances with a maximum term of one year of any bank which has
an unsecured, uninsured or unguaranteed obligation rating of "Prime - 1" or "A3" or better by
Moody's and "A-I" or "A" or better by S&P.
(k) Repurchase agreements approved by the Bond Insurer with prior written notice to Moody's and
S&P providing for the transfer of securities from a dealer bank or securities firm
(seller/borrower) to the Agency or the Trustee, and the transfer of cash from the Agency or the
Trustee to the dealer bank or securities firm with an agreement that the dealer bank or securities
firm will repay the cash plus a yield to the Agency, or the Trustee, in exchange for the
securities at a specified date or dates.
(I) The Local Agency Investment Fund of the State of California, created pursuant to Section
16429.1 of the California Government Code.
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(m) Any other investment which the Agency is permitted by law to make, but only with the prior
written consent of the Bond Insurer and prior written notice to Moody's and Standard and
Poor's. ' '_
"Plan Limitations" means the limitations contained or incorporated in the respective Redevelopment
Plan on (a) the aggregate principal amount of indebtedness payable from Tax Revenues which may be
outstanding at any time, (b) the aggregate amount of taxes which may be divided and allocated to the
Agency pursuant to the Redevelopment Plan, (c) the period of time for establishing or incurring
indebtedness payable from Tax Revenues and (d) the period of time for receiving Tax Revenues for any
purpose, established pursuant to Section 33333.4 or 33333.6 of the Redevelopment Law.
"Qualified Reserve Account Credit Instrument" means any irrevocable standby or direct-pay letter
of credit or surety bond issued by a commercial bank or insurance company and deposited with the
Trustee pursuant to the Indenture, provided that all of the following requirements are met: (a) the long-
term credit rating of such bank or insurance company is in one of the two highest rating categories by
S&P and Moody's; (b) such letter of credit or surety bond has a term of at least twelve (12) months; (c)
such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve
Requirement with respect to which funds are proposed to be released pursuant to the Indenture; (d) the
Trustee is authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder an
amount equal to any deficiencies which may exist from time to time in the Interest Account, the
Principal Account or the Sinking Account for the purpose of making payments required pursuant to the
Indenture; (e) the Bond Insurer has approved in writing such Qualified Reserve Account Credit
Instrument; and (f) written notice of the posting of such Qualified Reserve Account Credit Instrument is
given to S&P and Moody's.
"Record Date" means, with respect to any Interest Payment Date, the close of business on the fifteenth
(15th) calendar day of the month preceding such Interest Payment Date, whether or not such fifteenth
(15th) calendar day is a Business Day.
"Redevelopment Law" means the Community Redevelopment Law of the State, constituting Part 1 of
Division 24 of the Health and Safety Code of the State, and the acts amendatory thereof and
supplemental thereto. .
"Request of the Agency" means a request in writing signed by the Chair, Executive Director, Deputy
Executive Director, Finance Officer or Secretary of the Agency, or any other officer of the Agency
duly authorized by the Agency for that purpose.
"Reserve Requirement" means, as of the date of any calculation by the Agency, the lesser of (a)
Maximum Annual Debt Service, (b) 125% of average Annual Debt Service on the Bonds, or (c) 10% of
the original principal amount of the Bonds (less original issue discount if in excess of two percent (2 %)
of the stated redemption amount at maturity).
"S&P" means Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc., of
New York, New York, and its successors.
"Supplemental Indenture" means any resolution, agreement or other instrument which amends,
supplements or modifies the Indenture and which has been duly adopted or entered into by the Agency;
but only if and to the extent that such Supplemental Indenture is specifically authorized under the
Indenture.
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"Tax Code" means the Internal Revenue Code of 1986, as in effect on the date of issuance of the
Bonds or (except as otherwise referenced in the Indenture) as it may be amended to apply to obligations
issued on the date of issuance of the Bonds, together with applicable proposed, temporary and tinal
regulations promulgated, and applicable ofticial public guidance published, under the Tax Code
(including the Tax Regulations).
"Ta'\: Regulations" means temporary and permanent regulations promulgated under Section 103 and all
related provisions of the Tax Code.
"Ta'\: Revenues" means all taxes annually allocated to the Agency with respect to the Project Area
following the Closing Date within the Plan Limitations pursuant to Article 6 of Chapter 6 (commencing
with Section 33670) of the Redevelopment Law and Section 16 of Anicle XVI of the Constitution of the
State and as provided in the Redevelopment Plan, including (a) all payments, subventions and
reimbursements (if any) to the Agency specifically attributable to ad valorem taxes lost by reason of tax
exemptions and tax rate limitations, and (b) all amounts of such taxes required to be deposited into the
Low and Moderate Income Housing Fund in any Fiscal Year pursuant to Section 33334.3 of the
Redevelopment Law, but only to the extent such amounts are specifically pledged to the payment of
principal, interest and premium (if any) with respect to any Pariry Debt but excluding (i) all amounts of
such taxes required to be deposited in the Low and Moderate Income Housing Fund (and not includable
as set forth in (b) above), (ii) all amounts of such taxes which are payable to entities other than the
Agency pursuant to the Tax Sharing Statutes to the extent such Tax Sharing Statutes or Tax Sharing
Agreements create a prior lien on such taxes and such entities other than the Agency have not
subordinated their right to receive payments, and (Iii) amounts, if any, payable by the State to the
Agency under and pursuant to the provisions of Chapter 1.5 of Part 1 of Division 4 of Tide 2
(commencing with Section 16110) of the Government Code of the State.
"Tax Sharing Statutes" means Section 33607.7 of the Redevelopment Law and, to the extent
incorporated pursuant to such Section 33607.7, Section 33607.5 of the Redevelopment Law.
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APPENDIX B
CITY OF CHULA VISTA INFORMATION STATEMENT
The following information concerning the City of Chula Vista is presented as general background data.
The Bonds are payable solely from Tax Revenues as described in the Official Statement. The Bonds
are not an obligation of the City, and the taxing power of the City is not pledged to the payment of the
Bonds.
General Information
The City of Chula Vista is located on San Diego Bay in Southern California, 8 miles south of San
Diego and 7 miles nonh of the Mexico border in an area generally known as "South Bay". City limits
cover approximately 50 square miles. Chula Vista is the second largest city in San Diego County. In
addition to the City of San Diego, neighboring communities include Imperial Beach, La Mesa and
National City.
Government Services
The City of ChuIa Vista was incorporated March 17, 1911, and became a charter city in 1949. ChuIa
Vista operates under a Council/Manager form of municipal government and provides the following
services: public safety, community services, engineering services, planning services, public works,
general administrative services and capital improvements. The City of ChuIa Vista currendy employs
785 full-time and 240 to 360 part-time employees. The City has a class 3 fire rating.
Transportation
U.S. Highways 5 (along the coast) and 805 (inland) provide full freeway access from the City nonh 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 eleven bus routes covering the City.
Daily bus connections serve the City, and Southern Pacific Railway and San Diego's Lindbergh
International Airport are fifteen minutes to the nonh of the City.
Community Information
There are two acute-care hospitals, two psychiatric hospitals and three convalescent hospitals, and more
than 400 medical doctors and allied professionals in ChuIa Vista.
There are two daily, one weekly and one semi-weekly newspapers published and circulated in the City.
The City has one main public library and two branch libraries.
Recreational facilities within or near the City include twenty-four parks, four community centers, six
"tot lots", two ballflelds, twenty-eight tennis courts, three golf courses, four municipal swimming
pools, two gymnasiums and boat launching facilities. The City bayfront area contains a marina which
houses 552 boats and miles of public beaches. The City also provides many trails for bicycling, hiking
and jogging.
The City is also the home 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 site
donated by Easdake Development Company adjacent to the Otay Lake reservoir.
The City has more than sixty churches and nearly 100 service, fraternal and civic organizations.
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Public Educational instruction from Kindergarten through high school is provided by the Chula Vista
Elementary School District and Sweetwater Union High school District. These districts administer
twenty-six element;U}' schools, nine junior high schools and eight senior high schools. Southwestern
College, a two year Community College, has an enrollment of more than 15,000. There are also four
adult education schools and twelve private schools. There are seven universities or colleges within 30
minutes commuting distance from Chula Vista in the San Diego Metropolitan Area. The City has
proposed a University of California campus in ChuIa Vista, to be located on a 400-acre site adjoining
the Olympic Training Center.
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Population
The following charts provide a comparison of population growth for Chula Vista, surrounding cities
and San Diego County between 1995 and .1999.
TABLE NO. B-1
CHANGE IN POPULATION
CHULA VISTA, SURR.OUNDING CITIES AND SAN DIEGO COUNTY
1995 - 1999
14.0%
11.4%
8.0%
Chula V"lSta
Surrounding Cities
San Diego County
12.0%
10.0%
6.0%
4.0%
2.0%
0.0%
1995 149,800 173,850 2,658,600
1996 152,700 1.9 % 174,800 0.5 % 2,682,100 0.9 %
1997 156,400 2.4 % 178,550 2.1 % 2,729,100 1.8%
1998 162,100 3.6 % 175,700 (1.6) % 2,795,800 2.4 %
1999 166,900 3.0 % 179,200 2.0 % 2,853,300 2.1 %
% Increase Between
1995-1999 11.4 % 3.1 % 7.3 %
Surrounding cities include El Cajon, Coronado and National City.
Source: State of California Department of Finance, Population Research Unit, .CirylColUlly Population Estimates
With Annual Percent Change', published annually in May for Current year.
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Personal Income
Median personal income infonnation for the City of Chula Vista, San Diego County, the State of
California and the United States are summarized in the following charts.
TABLE NO. B-2
EFFECTIVE BUYING INCOME
CITY OF CHULA VISTA, SAN DlEGO COUNTY, CALIFORNIA AND UNITED STATES
1994 - 1998
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
1994 1995 1996
1997 1998
o Cbula Vista 0 San Diego County III State of California I!l United States
1994 37,053 39,542 40,969 37,070
1995 (1) 31,341 33,679 34,533 32,238
1996 32,128 34,445 35,216 33,482
1997 33,267 35,725 36,483 34,618
1998 33,911 36,296 37,091 35,377
(1)
Prior to 1995, Effective Buying Income was based on "Personallncome" rather d1an "Money Income"
and is not directly comparable with 1995 Effective Buying Income.
Source: Sales and Marketing Management, "Survey of Buying Power", published annnally in August for prior
year.
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Employment and Industry
The City is located in the San Diego County MSA labor market. Four major job categories constitute
83.0% of the work force. They are serVices (32.5%), wholesale and retail trade (22.1 %) government
(17.4%) and manufacturing (11.0%). The January, 2000 unemployment rate in the San Diego County
area was 3.0%. The State of California January, 2000 unemployment rate (unadjusted) was 5.4%.
TABLE NO. B-3
SAN DIEGO COUNTY MSA
WAGE AND SALARY WORKERS BY INDUSTRY"}
(in tbous:mds)
Government 188.8 191.5 192.4 198.0 203.1
Services 308.4 324.9 345.1 362.5 380.7
Finance, Insurance & Real Estate 55.9 58.6 62.0 67.7 68.3
Wholesale & Retail Trade 232.6 235.0 243.6 248.5 258.2
Transportation & Public Utilities 37.1 39.6 43.1 50.3 52.9
Manufacturing:
Nondurable goods 31.5 32.7 34.7 35.9 37.4
Durable goods 83.7 86.2 89.9 91.0 91.2
Construction and Mining 43.0 47.0 55.9 62.5 68.4
Total Nonagricultural 981.0 1,015.5 1,066.7 1,116.4 1,160.2
Agriculture, forestry & fisheries' 9.5 9.6 9.3 9.4 10.1
Total (all industries) 990.5 1,025.1 1,076.0 1,125.8 1,170.3
% OF TOTAL WORKERS
Government 19.1 % 18.7 % 17.9 % 17.6 % 17.4 %
Services 31.1 % 31.7 % 32.1 % 32.2 % 32.5 %
Finance, Insurance & Real Estate 5.6 % 5.7 % 5.8 % 6,0 % 5.8 %
Wholesale & Retail Trade 23.5 % 22.9 % 22.6 % 22.1 % 22.1 %
Transportation & Public Utilities 3.7 % 3.9 % 4.0 % 4.5 % 4.5 %
Manufacturing:
Nondurable goods 3.2 % 3.2 % 3.2 % 3.2 % 3.2 %
Durable goods 8.5 % 8.4 % 8.4 % 8.1 % 7.8 %
Construction and Mining 4.3 % 4.6 % 5.2 % 5.6 % 5.8 %
Total Nonagricultural 99.0 % 99.1 % 99.1 % 99.2% 99.1 %
Agriculture, forestry & fisheries. 1.0 % 0.9 % 0.9 % 0.8 % 0.9 %
Total (all industries) 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
(I) Annually, as of January.
, Due to the change in the estimating method, farm employment data prior to January, 1997 may not be
strictly comparable to current farm employment estimates.
Source: State of California Employment Development Department, . Annual Planning Information" and
'California Labor Market Bulletin".
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The major employers operating within the City and their respective number of employees as of June
1999, are as follows:
. TABLE NO. B-4
CriYOFCHULA VISTA
TOP BUSINESS INDUSTRIAL/OffiCE EMPLOThlENT
Number of
Employees Type of Business
Employer
BFGoodrich Aerospace Aerostructures Group
Sharp ChuIa Vista Medical Center
Scripps Memorial Hospital
White Water Canyon
American Fashion Inc.
Sunrise Medical Inc.
Eco Building Systems
2,075
800
650
500
500
450
210
CITY OF CHULA VISTA
TOP GOVERNMENT EMPLOYMENT
Employer
Number of
Employees
United Stated Border Patrol
Southwestern Co=unity College
City of ChuIa Vista
Department of Social Services
Sweetwater Union High School District
2,700
1,100
825
300
260
Employer
Sears
Price Costco
Macy's
Big Kmart
Fuller Honda
CITY OF CHULA VISTA
TOP RETAIL EMPLOYMENT
Number of
Employees
360
250
250
200
200
Source: City of Chula Vista.
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Aerospace Manufacturer
Hospital
Hospital
Amusement Park
Clothing Manufacturer
Medical Offices
Modular Building Manufacturer
Type of Business
Government Agency
Community College
Municipal Gove=ent
Social Service Agency
Secondary School District
Type of Business
Department Store
General Merchandise
Depanment Store
General Merchandise
Automotive Retailer
Commercial Activity
$1,400,000
$200,000 .
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$0
1994
1995
1996
1997
1998
II1iI Retail Sales
GAll Other Outlets
1994 974,901 1,454 1,102,748 3,236
1995 928,341 (4.8)% 1,553 1,063,911 (3.5)% 3,364
1996 987,211 6.3 % 1,594 1,133,092 6.5 % 3,401
1997 1,042.195 5.6 % 1,643 1,213,423 7.1 % 3,507
1998 1,120,534 7.5 % 1,660 1,320,195 8.8 % 3,535
Source: State Board of Equalization, "Taxable Sales in California", published annually in November for prior
year.
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Taxable transactions by type of business for the City of Chura Vista for 1994 through 1998 are
summarized below.
. TABLE NO. B-6
CITYOFCHULA VISTA
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in thousands)
1993 - 1997
Retail Stores
Apparel Stores $ 61,828 $ 54,968 $ 61,487 $ 64,979 $ 63.414
General Merchandise Stores 294.436 260.114 287.235 337,230 382.944
Drug Stores 24.658 21.574 23,220 . .
Food Stores 73,701 70,276 72.388 81.503 81.006
Packaged liquor Stores 7,381 6,683 5.948 . .
EatinglDrinking Places 117,290 118.053 121,494 126.357 131,661
Home Furnishings and
Appliances 46.258 46,507 43.600 47.004 55,856
Building Materials and
Farm Implements 73,622 68,448 68,119 70,930 75.812
Auto Dealers/Suppliers 86,077 86,341 92,235 89,986 107,808
Service Stations 94.317 99,657 101.821 103,994 88.570
Other Retail Stores . 95,333 95,720 109,664 120,212 133,463
Total Retai1 Stores 974,901 928,341 987,211 1,042,195 1,120,534
All Other Outlets 127.847 135.570 145.881 171,228 199.661
Total All Outlets $ 1,102,748 $ 1,063,911 $ 1,133,092 $ 1,213,423 $ 1,320,195
. As of 1997, Drug Stores have been merged with General Merchandise Stores and Packaged Liquor
Stores have been merged with Other Retail Stores.
Source: State Board of Eqnalization, "Taxable Sales in California", published annually in November for prior
year.
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The following charts summarize the change in taxable transactions for the City of Chula Vista and
surrounding cities.
30.0 %
25.0 %
20.0 %
15.0 %
10.0 %
5.0 %
0.0 %
, TABLE NO. B-7
CITY OF CHULA VISTA AND SURROUNDING CITIES
CHANGE IN TOTAL TAXABLE TRANSACTIONS
(in thousands)
1994 - 1998
24.6%
Chula VIsta
Coronado
National City
E1 Cajon
CHULA VISTA
El Cajon
Coronado
National City
$1,102,748
1,104,210
123,255
886,360
$1,063,911
1,126,185
128,358
869,511
19.7%
20.2%
24.6%
13.5%
$1,133,092
1,165,861
135,109
891,234
$1,213,423
1,240,538
146,658
910,232
$1,320,195
1,327,520
153,621
1,006,266
Source: State Board of Equalization. "Taxable Sales in California" , published annually in November for prior
year.
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Building Activity
The following chartS summarize building activity valuations for the City of Chula Vista for the five-
year period from 1994 through 1998. .
TABLE NO. B-8
CITY OF CHULA VISTA
BUILDING ACTIVITY AND VALUATION
(in thousands)
1994 - 1998
1994/95
1996/97
$0
$1,000,000
$2,000,000
$3,000,000
Total Valuation $ 1,439,206 $ 1,290,477 $ 1,660,572 $ 1,758,086 $ 3,088,957
No. of New Dwening Units:
Single-Dwelling 903 539 871 927 1,180
Multi-Dwelling 261 137 77 123 166
Total New Units 1,164 676 948 1,050 1,346
Source: City of ChuIa ViSta and Economic Sciences Corporation, "California Residential Building Pennit
Activity", published annual in March for prior year.
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APPENDIX C
AGENCY AUDITED FINANCIAL STATEMENTS
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTlllCATE
This Continuing Disclosure Certiticate (the "Disclosure Certificate"), dated as of June I, 2000, is
executed and delivered by the ChuIa Vista Redevelopment Agency (as the "Issuer") and U.S. Bank
Trust National Association, (as the initial "Dissemination Agent") in connection with the issuance of
the $ ChuIa Vista Redevelopment Agency, 2000 Tax Allocation Bonds (Town Centre II
Redevelopment Project) (the "Bonds"). The Bonds are being issued pursuant to an Indenture of Trust,
dated as of June I, 2000 (the "Indenture") between the Issuer and U.S, Bank Trust National
Association, as Trustee. The Issuer and the Dissemination Agent covenant and agree as follows:
SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and
delivered by the Issuer and the Dissemination Agent for the benefit of the Owners and Beneficial
Owners of the Bonds and in order to assist the Participating Underwriters in complying with S .E. C.
Rule 15c2-12(b)(5).
SECTION 2. Defmitions. In addition to the defmitions set forth in the Indenture, which apply to any
capitalized term used in this Disclosure Certificate unless otherwise defmed in this Section, the
following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described
in, Sections 3 and 4 of this Disclosure Certificate.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds
through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bond for
federal income tax purposes.
"Disclosure Representative" shall mean the Treasurer of the Issuer or his or her designee, or such other
officer or employee as the Issuer shall designate in writing to the Dissemination Agent from time to
time.
"Dissemination Agent" shall mean the U.S. Bank Trust National Association, in its capacity as
Dissemination Agent, or any successor Dissemination Agent designated in writing by the Issuer and
which has filed with the Trustee a written acceptance of such designation.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.
"National Repository" shall mean any Nationally Recognized Municipal Securities Information
Repository for purpose of the Rule. Currently, the following are National Repositories:
Bloomberg Municipal Repositories
P.O. Box 840
Princeton, NJ 08542-0840
(609) 279-3200
FAX (609) 279-5962
E-mail: Munis@Bloomberg.com
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Kenny Information Systems, Inc.
Attn: Kenny Repository Service
65 Broadway, 16th Floor
New York, NY 10006
(212) 770-4595
FAX (212) 797-7994
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
(201) 346-0701
FAX (201) 947-0107
E-mail: nrmsir@dpcdata.com
Thomson NRMSIR
Attn: Municipal Disclosure
395 Hudson Street, 3" Floor
New York, NY 10014
(212) 807-5001 or (800) 689-8466
FAX (212) 989-2078
E-mail: Disclosure@MuIler.com
"Owner" shall mean a registered owner of the Bonds.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to
comply with the Rule in connection with offering of the Bonds. .
"Repository" shall mean each National Repository and the State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as the same may be amended from time to time.
"State Repository" shall mean any public or private repository or entity designated by the State of
California as a state repository for the purpose of the Rule and recognized as such by the Securities and
Exchange Commission. As of the date of this Agreement, there is no State Repository.
"Trustee" shall mean U.S. Bank Trust National Association, in Los Angeles, California, or any
successor thereto.
SECTION 3. Provision of Annual Reports.
(a) The issuer shall, or, upon written direction, shall cause the dissemination agent to, not later
than nine months after the end of the Issuer's Fiscal Year (which fiscal year presently ends June
30), commencing with the report for the 2000-01 fiscal year, provide to each Repository an
Annual Report which is consistent with the requirements of Section 4 of this Disclosure
Certificate. The Annual Report may be submitted as a single document or as separate
documents comprising a package, and may include by reference other information as provided
in Section 4 of this Disclosure Certificate; provided that the audited fmancial statements of the
Issuer may be submitted separately from and later than the balance of the Annual Report if they
are not available by the date required above for the filing of the Annual Report. The
Dissemination Agent shall have no duty to review or approve the content of the Annual Report,
or any part thereof. If Issuer's fiscal year changes, it shall give notice of such change in the
same manner as for a Listed Event under Section 5.
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(b) Not later than fifteen (15) Business Days prior to the latest date specified in subsection (a) for
providing the annual report to repositories, the Issuer shall provide the Annual Report to the
Dissemination Agent. If by the latest date specified in subsection (a), the Dissemination Agent
has not received a copy of the Annual Report, the Dissemination Agent shall notify the Issuer.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to
Repositories by the date required in subsection (a), the Dissemination Agent shall send a notice
to each Repository in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name and
address of each National Repository and the State Repository, if any; and
(ii) to the extent it can confirm such f1ling of the Annual Report, f1le a report with the
Trustee and the Issuer certifying that the Annual Report has been provided pursuant to
this Disclosure Certificate, stating the date it was provided and listing all the
Repositories to which it was provided.
SECTION 4. Content of Annual ReportS. The Issuer's Annual Report shall contain or include by
reference the following:
(a) The audited financial statements of the Issuer for the most recently ended fiscal year, prepared
in accordance with generally accepted accounting principles applicable from time to time to the
Issuer. If the Issuer's audited financial statements are not available by the time the Annual
Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain
unaudited financial statements in a format similar to the financial statements contained in the
final Official Statement, and the audited financial statements shall be fIled in the same manner
as the Annual Report when they become available.
(b) Other financial information and operating data relating to the Town Centre IT Redevelopment
Project contained in the Official Statement for the Bonds under the heading "THE TOWN
CENTRE 11 PROJECT AREA" and "TAX REVENUES" for the previous Fiscal Year, and, where
such information or data is in tabular form, for the five most recent Fiscal Years for which the
information is available; provided, however, [discuss scope of disclosure].
(c) Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues of the Issuer or related public entities, which have
been submitted to each of the Repositories or the Securities and Exchange Commission. If the
document included by reference is a final official statement, it must be available from the
Municipal Securities RuIemaking Board. The Issuer shall clearly identify each such other
document so included by reference. . . ' .., .
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of
the occurrence of any of the following events with respect to the Bonds, if the Issuer determines
that such event is material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
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(3) unscheduled draws on debt service reserves reflecting financial difticulties;
(4) unscheduled draws on credit enhancements reflecting financial difficulties:
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions or events adversely affecting the tax-exempt status of the Bonds;
(7) modifications to rights of Owners of Bonds;
(8) bond calls;
(9) defeasances;
(10) release, substitution or sale of property securing repayment of the Bonds; and
(11) rating changes.
(b) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the Issuer shall as
soon as possible deterrnine if such event would be material under applicable federal securities
laws. The Dissemination Agent shall have no responsibility for such determination and shall be
entitled to conclusively rely on the Issuer's determination.
(c) If the Issuer has determined that the occurrence of a Listed Event would be material under
applicable federal securities laws, the Issuer shall promptly notify the Dissemination Agent in
writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to
subsection (e).
(d) If, under subsection (b), the Issuer determines that the Listed Event would not be material
under applicable federal securities laws, the Issuer shall so notify the Dissemination Agent in
writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection
(e).
(e) If the Dissemination Agent has been instructed by the Issuer to report the occurrence of a Listed
Event and has received a notice of the occurrence in a format suitable for filing with each
Repository, the Dissemination Agent shall file a notice of such occurrence with the Repositories
and the State Repository. Notwithstanding the foregoing, notice of Listed Events described in
subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if
any) of the underlying event is given to Owners of affected Bonds pursuant to the Indenture.
Notice of a Listed Event is only required under this Section 5 following the occurrence of the
Listed Event.
(f) The Dissemination Agent may conclusively rely on an opinion of counsel that the Issuer's
instructions to the Dissemination Agent under this Section 5 comply with the requirements of
the Rule. . .
SECTION 6. Termination of Reporting Obligation. The Issuer's and the Dissemination Agent's
obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption
or payment in full of all of the Bonds.
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SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under the Disclosure Certiticate, and may
discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.
The Dissemination Agent shall not be responsible in any manner for the content of any notice or repon
prepared by the Issuer pursuant to this Disclosure Cenificate. The Dissemination Agent may resign by
providing thirty days written notice to the Issuer. If at any time there is no designated Dissemination
Agent appointed by the Issuer, or if the Dissemination Agent so appointed is unwilling or unable to
perform the duties of Dissemination Agent hereunder, the Issuer shall be the Dissemination Agent and
undertake or assume its obligations hereunder.
Any person succeeding to all or substantially all of the Dissemination Agent's corporate trust business
shall be the successor to the Dissernination Agent hereunder without the execution or fIling of any paper
or any further act. The Dissemination Agent may resign its duties hereunder at any time upon notice to
the Issuer.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Issuer and the Dissemination Agent may amend this Disclosure Certificate, and any
provision of this Disclosure Certificate may be waived, provided that the following conditions are
satisfied: .
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5, it may only be
made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature or starns of an obligated person
with respect to the Bonds, or the type of business conducted.
(b) The undertaking, as amended or waived, would, in the opinion of nationally recognized bond
counsel, have complied with the requirements of the Rule at the time of the original issuance of
the Bonds, after taking into account any amendments or interpretations of the Rule, as well as
any change in circumstances; and
(c) The proposed amendment or waiver either (i) is approved by the Owners of the Bonds in the
same manner as provided in the Indenture for amendments to the Indenture with the consent of
Owners, or (Ii) does not, in the opinion of nationally recognized bond counsel, materially
impair the interests of the Owners or Beneficial Owners of the Bonds.
(d) In the event of any amendment or waiver of a provision of this Disclosure Certificate, the
Issuer shall describe such amendment in the next Annual Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on
the type (or in the case of a change of accounting principles, on the presentation) of financial
information or operating data being presented by the Issuer. In addition, if the amendment
relates to the accounting principles to be followed in preparing fmancial statements, (i) notice of
such change shall be given in the same manner as for a Listed Event under Section 5(t), and (Ii)
the Annual Report for the year in which the change is made should present a comparison (in
narrative form and also, if feasible, in quantitative form) between the fmancial statements as
prepared on the basis of the new accounting principles and those prepared on the basis of the
former accounting principles. The Dissemination Agent shall not be obligated to enter into any
such amendment that modifies or increases its respective duties or obligations hereunder. The
Dissernination Agent may rely on an opinion of counsel that the amendment or waiver complies
with the requirements of the Rule.
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SECTION 9. Additional Information. Nothing in this Disclosure Certiticate shall be deemed to
prevent the issuer from disseminating any other information, using the means of dissemination set forth
in this Disclosure Certiticate or any other means of communication, or including any other information
in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by
this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or
notice of occurrence of a Listed Event in addition to that which is specifically required by this
Disclosure Certificate, the Issuer shaH have no obligation under this Agreement to update such
information or include it in any future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Default. In the event of a tailure of the Issuer or the Dissemination Agent to comply
with any provision of this Disclosure Certiticate, the Trustee at the written request of any Participating
Underwriter or the Owners of at least 25 % aggregate principal amount of Outstanding Bonds, shall, but
only to the extent it has been indemnified to its satisfaction from any cost, liability or expense
whatsoever, including, without limitation, fees and expenses of .its attorneys, or any Owner or
Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including
seeking mandate or specific performance by court order, to cause the Issuer or Dissemination Agent, as
the case may be, to comply with its obligations under this Disclosure Certificate. A default under this
Disclosure Certificate shall not be deemed an Event of Default under the Indenture and the sole remedy
under this Disclosure Certificate in the event of any failure of the Issuer or the Dissemination Agent to
comply with this Disclosure Certificate shall be an action to compel performance.
SECTION 11. Duties, Immunities and Liabilities of Trustee and Dissemination Agent. All of the
immunities, indemnities, and exceptions from liability in Article XI of the Indenture insofar as they
relate to the Trustee shall apply to the Dissemination Agent in this Disclosure Certificate. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and the issuer agrees to indemnify and save the Dissemination Agent, and Trustee, their
officers,. directors, employees and agents, harmless against any loss, expense and liabilities which it
may incur arising out of or in the exercise or performance of its powers and duties hereunder, including
the costs and expenses (including attorneys fees) of defending against any claim of liability, but
excluding liabilities due to the Dissemination Agent's or Trustee's negligence or willful misconduct.
The Dissemination Agent may rely on and shall be protected in acting or refraining from acting upon
any direction from the Issuer or an opinion of nationally recognized bond counsel. The Dissemination
Agent shall be paid compensation by the Issuer for its services provided hereunder in accordance with
its schedule of fees as agreed to between the Dissemination Agent and the Issuer from time-to-time and
all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance
of its duties of hereunder. The Dissemination Agent and Trustee shall have no dury or obligation to
review any information provided to them by the Issuer hereunder and shall not be deemed to be acting
in any fiduciary capacity for the Issuer, the Owners, or Beneficial Owners or any other party. The
obligations of the Issuer under this section shall survive resignation or removal of the Dissemination
Agent and payment of the Bonds. No person shall have any right to commence any action against the
Dissemination Agent seeking any remedy other than to compel specific performance of this Agreement.
The Dissemination Agent shall not be liable under any circumstances for monetary damages to any
person for any breach of this agreement.
SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer,
the Trustee, the Dissemination Agent, the Participating Underwriters and Owners and Beneficial
Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
SECTION 13. Notices. Notices should be sent in writing to the following addresses. The following
information may be conclusively relied upon until changed in writing.
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Disclosure Representative:
Chula Vista Redevelopment Agency
Attention:
Dissemination Agent:
[Trustee]
Attention:
SECTION 14. Counterparts. This Disclosure Certificate may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same instrument.
CHULA VISTA REDEVELOPMENT AGENCY,
as Issuer
By:
Its: Treasurer
U.S Bank Trust
as Dissemination Agent
National
Association,
By:
Its:
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EXHIBIT A
NOTICE TO REPOSITORlES OF FAILURE TO FILE ANNUAL REPORT
Name of Bond Issue:
ChuIa Vista Redevelopment Agency
2000 Tax Allocation Bonds (Town Centre II Redevelopment Project)
Name of Issuer:
Date of Issuance:
,2000
NOTICE IS HEREBY GIVEN that the ChuIa Vista Redevelopment Agency has not provided an Annual
Report with respect to the above-named Bonds as required by the Indenmre of Trust, dated as of June
1,2000. [The Issuer anticipates that the Annual Report will be filed by .]
Dated:
[
Dissemination Agent
], on behalf of
By:
Its:
cc: Issuer
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APPENDIX E
FORM OF BOND COUNSEL OPINION
.2000
Chula Vista Redevelopment Agency
Chula Vista, California
Re: $ Chula Vista Redevelopment Agency, 2000 Tax Allocation Bonds
(Town Centre II Redevelopment Project)
Ladies and Gendemen:
We have examined certified copies of proceedings of the ChuIa Vista Redevelopment Agency (the
"Agency"), and other information and documents submitted to us relative to the issuance and sale by
the Agency of its 2000 Tax Allocation Bonds (Town Centre II Redevelopment Project) in the aggregate
principal amount of $ (the "Bonds") and such other information and documents as we
consider necessary to render this opinion. In rendering this opinion, we also have relied upon certain
representations of fact and certifications made by the Agency, the purchasers of the Bonds and others.
We have not undertaken to verify through independent investigation the accuracy of the representations
and certifications relied upon by us.
The Bonds have been issued pursuant to the authority contained in Part I of Division 24 of the Health
and Safety Code of the State of California (the "Act"), a resolution of the Agency adopted on
, 2000 (the "Resolution") and in accordance with the terms and conditions of an
Indenture of Trust dated as of June 1, 2000 (the "Indenture"), by and between the Agency and
[Trustee], as Trustee. All terms not defmed herein have the meanings ascribed to those terms in the
Indenture.
The Bonds are dated , 2000, and mature on the dates and bear interest at the rates per
annum set forth in the Indenture. The Bonds are registered Bonds in the form set forth in the
Indenture, redeemable in the amounts, at the times and in the manner provided for in the Indenture.
Based upon our examination of all of the foregoing, and in reliance thereon, and on all matters of fact
as we deem relevant under the circumstances, and upon consideration of applicable laws, we are of the
opinion that:
1. The Bonds have been duly and validly authorized by the Agency and are valid and binding
special obligations of the Agency and, except as specifically limited in the Indenture, payable solely
from Tax Revenues and other sources as and to the extent provided for in the Indenture. The Bonds are
enforceable in accordance with their terms and the terms of the Indenture, except to the extent that
enforceability may be limited by moratorium, bankruptcy, reorganization, fraudulent conveyance or
transfer, insolvency or other similar laws affecting creditors' rights to the application of equitable
principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and
to the limitations on legal remedies against public agencies in the State of California. The Bond.s are
special obligations of the Agency but are not a debt of the City of ChuIa Vista, the State of California
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or any other of its political subdivisions and neither the City of Chula Vista, the State of California nor
any of its political subdivisions is liable for the payment thereof, nor in any event shall the Bonds be
payable out of any funds or properties other than those of the Agency. The Bonds do not constirute an
indebtedness within the meaning of any constirutional or starutory debt limitation or restriction.
2. The Indenture has been duly authorized by the Agency, is valid and binding upon the Agency
and is enforceable in accordance with its terms, except to the extent that enforceabiliry may be limited
by moratorium, bankruptcy, reorganization, fraudulent conveyance or transfer, insolvency or other
similar laws affecting creditors' rights to the application of equitable principles if equitable remedies are
sought, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies
against public agencies in the State of California.
3. The Indenture creates a valid pledge of that which the Indenture purports to pledge, subject to
the provisions of the Indenture, except to the extent that such pledge may be limited by moratorium,
bankruptcy, reorganization, fraudulent conveyance or transfer, insolvency or other similar laws
affecting creditors' rights to the application of equitable principles if equitable remedies are sought, to
the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against
public agencies in the State of California.
4. Under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is
excluded from gross income for federal income tax purposes, and such interest is not an item of tax
preference for purposes of calculating the federal alternative minimum tax imposed on individuals and
corporations; however, we note that, with respect to corporations, such interest on the Bonds will be
included as an adjustment in the calculation of alternative minimum taxable income which may affect
such corporation's alternative minimum tax liability.
5. Interest on the Bonds is exempt from State of California personal income tax.
The opinions set forth in paragraph 4 above are subject to-the condition that the Agency comply with
certain covenants and the applicable requirements of the Internal Revenue Code of 1986, as amended,
that must be satisfied subsequent to the issuance of the Bonds to assure that interest on the Bonds will
remain excludable from gross income for federal income tax purposes. Failure to comply with such
covenants and requirements may 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 ail such requirements. We express no opinion regarding other tax consequences with
respect to the Bonds.
Certain requirements and procedures contained or referred to in the Indenture and the Tax. Certificate
may be changed, and certain actions may be taken, under the circumstances and subject to the terms
and conditions set forth in such documents, upon the advice or with the approving opinion of counsel
nationally recognized in the area of tax-exempt obligations. We express no opinion as to the exclusion
of interest on the Bonds from gross income for federal income tax purposes on and after the date on
which any such change occurs or action is taken upon the advice or approval of counsel other than
Stradling Y occa Carlson & Rauth, a Professional Corporation.
The opinions expressed herein are based on an analysis of existing Statutes, regulations, rulings and
judicial decisions and cover certain matters not directly addressed by such authorities. Such opinions
may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date
hereof. We have not undertaken to determine, or to inform any person, whether any such actions or
events are taken or do occur. Such actions or events may adversely affect the value or tax treatment of
the Bonds and we express no opinion with respect thereto.
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T. .,.
We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement
relating to the Bonds or other offering material relating to the Bonds and purchasers of the Bonds
should not assume that we have reviewed the Official Statement on their behalf.
Respectfully submitted,
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