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HomeMy WebLinkAboutRDA Packet 2001/03/06 ~{f? ~..--: - - ---' CllY OF CHULA VISfA TUESDAY, MARCH 6, 2001 COUNCIL CHAMBERS 4:00 P.M. PUBLIC SERVICES BUILDING (immediately following the City Council meeting) JOINT MEETING OF THE REDEVELOPMENT AGENCY I CITY COUNCIL OF THE CITY OF CHULA VISTA CALL TO ORDER ROLL CALL Agency/Council Members Davis, Padilla, Rindone, Salas; Chair/Mayor Horton CONSENT CALENDAR The staff recommendations regarding the following item Is) listed under the Consent Calendar will be enacted by the Agency/Council by one motion without discussion unless an Agency/Council member, a member of the public or City 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 pulled from the Consent Calendar will be discussed after Action items. Items pulled by the public will be the first items of business. 1. APPROVAL OF MINUTES - Staff recommends the Redevelopment Agency approve the minutes of the adjourned meeting of the Chula Vista Redevelopment Agency of February 13, 2001 and the adjourned meeting of the City Council and special meeting of the Redevelopment Agency on February 27, 2001. 2. AGENCY RESOLUTION AND COUNCIL RESOLUTION AUTHORIZING THE APPROPRIATION AND PAYMENT OF $545.000 TO THE SWEETWATER UNION HIGH SCHOOL DISTRICT FROM THE REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND PURSUANT TO THE TERMS AND CONDITIONS OF THE PROPERTY EXCHANGE AGREEMENT APPROVED IN SEPTEMBER 1995. BETWEEN THE CITY OF CHULA VISTA. CHULA VISTA REDEVELOPMENT AGENCY AND THE SWEETWATER UNION HIGH SCHOOL DISTRICT WHICH PROVIDED THE LAND NECESSARY TO DEVELOP THE CHULA VISTA VETERANS HOME-In September 1995, the Agency/City approved a Property Exchange Agreement with the Sweetwater Union High School District that provided the land necessary for the Chula Vista Veterans Home. The differential in appraised values for the properties exchanged between the City/Agency and the District was $545,000 in favor of the District. [Community Development Director] STAFF RECOMMENDATION: Redevelopment Agency/City Council adopt the resolution. ORAL COMMUNICATIONS This is an opportunity for the general public to address the Redevelopment Agency/City Council on any subject matter within the Agency/Council's jurisdiction that is not an item on this agenda. IState law, however, generally prohibits the Redevelopment Agency/City Council from taking action on any issues not included on the posted agenda.) If you wish to address the Agency/Council on such a subject, please complete the "Request to Speak Under Oral Communications Form" available in the lobby and submit it to the Secretary 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. OTHER BUSINESS 3. DIRECTOR'S REPORT(S) 4. CHAIR/MAYOR REPORTlS) 5. AGENCY/COUNCIL COMMENTS ADJOURNMENT The meeting will adjourn to the regularly scheduled Redevelopment Agency meeting on March 20, 2001 at 6:00 p.m., immediately following the City Council meeting in the City Council Chambers. Redevelopment Agency, March 6, 2001 Page 2 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA February 13, 2000 6:00 p.m. An Adjourned Regular Meeting of the Redevelopment Agency of the City of Chula Vista was called to order at 6:29 p.m. in the Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Agencymembers: Davis, Rindone, Salas, and Chair Horton ABSENT: Agencymembers: Padilla ALSO PRESENT: Executive Director Rowlands, Agency Attorney Kaheny, and City Clerk Bigelow ORAL COMMUNICATIONS There were none. OTHER BUSINESS I. DIRECTOR'S REPORTS There were none. 2. CHAIR'S REPORTS There were none. 3. AGENCYMEMBER COMMENTS There were none. CLOSED SESSION 4. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO GOVERNMENT CODE SECTION 54956.8 Property: Assessor Parcel Nos. 571-200-13, 14, 15, 36 and Parcel Map 17701 (approximately 2.555 acres located at 760 Broadway) Negotiating Parties: Redevelopment Agency (Chris Salomone) and George Ray; Redevelopment Agency (Chris Salomone) and Chris Bitterlin and Tom Carter Under Negotiation: Price and terms for disposition ACTION: Instructions were given to Counsel. /- I ADJOURNMENT At 6:50 p.m., Chair Horton adjourned the meeting to the Regular Redevelopment Agency meeting of February 20, 2001 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers. Respectfully submitted, ~á-l. T3: 8' ~ Susan Bigelow, CMC/ AAE, City Clerk (- ;L Page 2 RDA Minutes 02/1312001 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL AND A SPECIAL MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA February 27, 2001 6:00 p.m. An Adjourned Regular Meeting of the City Council and a Special Meeting of the Redevelopment Agency of the City ofChula Vista were called to order at 6:50 p.m. in the Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California. ROLL CALL PRESENT: Agency/Councilmembers Davis, Padilla, Rindone, Salas, and Chair/Mayor Horton ABSENT: Agency/Councilmembers: None ALSO PRESENT: Assistant City Manager Morris, Agency/City Attorney Kaheny, City Clerk Bigelow ORAL COMMUNICATIONS There were none. OTHER BUSINESS 4. EXECUTIVE DIRECTOR'S REPORT(S) There were none. 5. CHAIR/MA YOR REPORT(S) There were none. 6. AGENCY/COUNCIL COMMENTS There were none. CLOSED SESSION 7. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - Pursuant to Government Code Section 54956.8 Property: Assessor Parcel Nos. 568-270-03; 568-270-11 (approximately 2.85 acres located at the southeast corner of Fourth Avenue and F Street) Negotiating Parties: City Council/Redevelopment Agency (Sid Morris / Chris Salomone) and Chula Vista Center (Robert Caplan) Under Negotiation: Price and terms for acquisition ACTION: Instructions were given to Counsel. /-3 ADJOURNMENT At 8:15 p.m., Chair/Mayor Horton adjourned the meeting to an Adjourned Regular Meeting of the Redevelopment Agency on March 6, 2001, at 4:00 p.m., immediately following the City Council meeting. Respectfully submitted, ~LU .LL~~~ Susan Bigelow, CMC/AAE, City Clerk Page 2 Council/RDA Minutes / ~ tj 02/272001 JOINT REDEVELOPMENT AGENCY / CITY COUNCIL AGENDA STATEMENT ITEM NO.: MEETING DATE: 03/06/01 ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AND THE CITY OF CHULA VISTA REDEVELOPMENT AGENCY AUTHORIZING THE APPROPRIATION AND PAYMENT OF $545,000 TO THE SWEETWATER UNION HIGH SCHOOL DISTRICT FROM THE REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND PURSUANT TO THE TERMS AND CONDITIONS OF THE PROPERTY EXCHANGE AGREEMENT APPROVED IN SEPTEMBER 1995, BETWEEN THE CITY OF CHULA VISTA, CHULA VISTA REDEVELOPMENT AGENCY AND THE SWEETWATER UNION HIGH SCHOOL DISTRICT WHICH PROVIDED THE LAND NECESSARY TO DEVELOP THE CHULA VISTA VETERANS HOME SUBMITTED BY: RECTOR L~-Ç'n (3 REVIEWED BY: CITY MANAGE ~ 4/5THS VOTE: YES 0 NO D BACKGROUND In September 1995, the City of Chula Vista and its' Redevelopment Agency ("City/Agency") approved a Property Exchange Agreement ("Agreement") with the Sweetwater Union High School District ("District") thot provided the land necessary for the Chulo Vista Veterans Home. As will be more fully described in the report ond attachments, the differential in appraised values for the properties exchanged between the City/Agency and the District was $545,000 in favor of the District Pursuant to the terms and conditions of the Agreement, the City/Agency, in cooperation with the District, was responsible for providing additional property (up to the $545,000 value) for a new District Corporation Yard or, if the property was not obtained within three (3) years of the effective date of the Agreement, the District could request payment of the value differential in cash. The District, in a letter dated February 1, 2001 to the City Manager, (Attachment 1) formally requested payment in full of this outstanding debt. This Agenda item seeks Council/Agency authorization to provide repayment to the District from the unapprapriated fund balance of the Low- and Moderate-Income Housing Fund. Low and Moderate Income Housing Fund monies have been found to be an appropriate source of funding for the Veterans Home because the home, by its very nature, provides housing to low and moderate income veterans. éJ-/ PAGE 2, ITEM NO.: MEETING DATE: 03/06/01 RECOMMENDATION It is recommended that the City Council and Redevelopment Agency adopt the resolution authorizing the appropriation and payment of $545,000 from the unappropriated fund balance of the Low- and Moderote-Income Housing Fund to the Sweetwater Union High School District pursuant to the terms and conditions of the Property Exchange Agreement approved by the City Council and Redevelopment Agency Boord on September 26, 1995. BOARDS/COMMISSIONS RECOMMENDATION Not applicable. DISCUSSION Included for Council background information, is the Exchange Agreement (Attachment 2) approved by the Council/Agency on September 26, 1995, and the Redevelopment Agency "Summary Report" (Attachment 3) which fully describes the approved transaction. The request by the District and stoff's recommendation is consistent with the terms and conditions of the Agreement. At the time of the execution of the Agreement, the City of Chula Vista was vying for a Veterans Home to be built in Chula Vista and needed to demonstrate site control of property suitable for the project. The District and the City/Agency negotiated for the exchange of the District's 30 acre site (commonly referred to at that time as the "Hospital site") for the Veterans Home project, for the 2.63 acre Agency property at the northeast corner of Third and Alvarado (commonly referred to as the "Windmill Farms" site). The District was interested in the Third Avenue site for the purposes of developing a new District Administrative Headquarters. The appraised values for the Veterans Home site ($1,920,000) and the Windmills Farm site ($1,375,000) required additional compensation ($545,000) by the City/Agency to the District. The District, at that time, was interested in developing a new Corporation Yard and since the City was also exploring options for a new Corporation Yard, it was thought that some efficiencies could be obtained through joint use of a new facility that could also be used to retire all or a portion of this debt. For a variety of reasons, the ¡oint use scenario did not come to pass and the City is currently developing the old SDG&E Headquarters site on Maxwell Rood for its' corporation yard use. Since the City/Agency was not able to find suitable property for the District and the District is now interested in being paid in full, staff recommends that payment be mode from the Low- and Moderate-Income Housing Fund for this debt. As Council may recall, the Agency provided a substantial subsidy for the development of the Veterans Home approximately $4 million from the Low-Mod Fund. Since this residual debt was a debt incurred for the purposes of developing the Veterans Home, the retirement of the debt from the Low-Mod Fund is appropriate. ;;2-;;L PAGE 3, ITEM NO.: MEETING DATE: 03/06/01 FISCAL IMPACT The resolution will authorize the appropriation and expenditure of $545,000 from the unappropriated fund balance of the Redevelopment Agency's Low- and Moderate-Income Housing Fund to repay the debt owed to the Sweetwater Union High School District as part of the City/Agency's contribution to the Veterans Home project. Funds are available. ATTACHMENTS 1. Letter from District dated February 1,2001 2. Property Exchange Agreement 3. Redevelopment Agency Summary Report 3. Council Resolution 18040 and Redevelopment Agency Resolution 1469 H,\HOME\COMMDEV\STAFF.REP\SUHSD - Agency Repayment. doc ¿;¿-3 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AND THE CHULA VISTA REDEVELOPMENT AGENCY AUTHORIZING THE APPPROPRIATION AND PAYMENT OF $545,000 TO THE SWEETWATER UNION HIGH SCHOOL DISTRICT FROM THE REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND PURSUANT TO THE TERMS AND CONDITIONS OF THE PROPERTY EXCHANGE AGREEMENT APPROVED IN SEPTEMBER 1995, BETWEEN THE CITY OF CHULA VISTA, CHULA VISTA REDEVELOPMENT AGENCY AND THE SWEETWATER UNION HIGH SCHOOL DISTRICT WHICH PROVIDED THE LAND NECESSARY TO DEVELOP THE CHULA VISTA VETERANS HOME WHEREAS, in September 1995, the City of Chula Vista and its' Redevelopment Agency ("City/Agency") approved a Property Exchange Agreement ("Agreement") with the Sweetwater Union High School District ("District") that provided the land necessary for the Chula Vista Veterans Home; and WHEREAS, the differential in appraised values for the properties exchanged between the City/Agency and the District was $545,000 in favor of the District; and WHEREAS, pursuant to the terms and conditions of the Agreement, the City/Agency, in cooperation with the District, was responsible for providing additional property (up to the $545,000 value) for a new District Corporation Yard or, if the property was not obtained within three (3) years of the effective date of the Agreement, the District could request full payment in cash; and WHEREAS, the District, in a letter dated February 1, 2001 to the City Manager, formally requested payment in full for this outstanding debt; and WHEREAS, staff recommends authorizing the repayment of $545,000 from the unappropriated fund balance of the Low and Moderate Income Housing Fund; and WHEREAS, the expenditure of Low/Moderate Fund monies for the Veterans Home proj ect has been found consistent with Redevelopment Law because the Veterans Home houses low and moderate income veterans and benefits the project areas. NOW, THEREFORE, BE IT RESOLVED that the City Council/Redevelopment Agency of the City of Chula Vista authorizes the appropriation and payment of $545,000 to the Sweetwater Union High School District pursuant to the terms and ;/-'-1 conditions of the Property Exchange Agreement approved in September 1995 between the City of Chula Vista, Chula Vista Redevelopment Agency and the Sweetwater Union High School District which provided the land necessary to develop the Chula Vista Veterans Home. BE IT FURTHER RESOLVED that the amount of $545,000 is hereby appropriated from the unappropriated fund balance of the Low and Moderate Income Housing Fund to the Sweetwater Union High School District. BE IT FURTHER RESOLVED that the expenditure of Low and Moderate Income Housing Fund monies for the development of the Veterans Home proj ect is hereby found and determined, pursuant to Health and Safety Code Section 33334.2(g), to be of benefit to the Agency project areas by housing low and moderate income veterans; and that, to the extent possible, use restrictions on the project have been imposed to ensure the continued affordability of the project to low and moderate ncome residents. Presented by Approved as to form by ~~~~~ ' Community Development Director H, \Home\Attorney\Reso\SUHS Vet Home Payment ¿}-5' ATTACHMENT 1 Sweetwater Union High School District 1130 Fifth Avenue Chula Vista, CA 91911-2896 Office of the Superintendent Telephone (619) 691-5555 FAX (619) 426-2252 February 1, 2001 Mr. David D. Rowlands, Ir., City Manager City of Chula Vista 276 Fourth Ave. Chula Vista, CA 91910 Dear David: As you may be aware, in late October 1995, the Sweetwater Union High School District, the City of Chula Vista and the Redevelopment Agency of the City of Chula Vista entered into a Property Exchange Agreement related to the "Windmill Farms Site" and the "Hospital Site." The differential in terms of appraised value between the two sites at the time of the agreement was $545,000 in favor of the school district. As I'm sure you also know, Section 4.1 (e) of the agreement indicates that "if, for whatever reason, neither the City nor the District acquires a District Corporate Yard Site within three (3) years of the Effective Date of this Agreement, the City agrees to pay the District $545,000 in cash (or other mutually acceptable consideration)." Since the three-year period expired approximately two years ago without the District or City acquiring a District Corporate Yard Site, I am formally requesting the payment of the $545,000 to the district at your earliest convenience. While we have yet to resolve this issue, we continue to look forward to working with the City in creating a "win- win" situation for all parties. ~~1J1 Edward M. Brand Superintendent Attachments ATTACHMENT 2 PROPERTY EXCHANGE AGREEMENT [Windmill Farms site and Hospital site] This PROPERTY EXCHANGE AGREEMENT {"Agreement") is entered into effective as of , 1995 ("Effective Date"), by and among the CITY OF CHULA VISTA, a municipal corporation ("City"), the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body, corporate and politic ("Agency"), and the SWEETWATER UNION HIGH SCHOOL DISTRICT ("District") with reference to the following facts: A. Agency owns certain unimproved real property located at Third Avenue and Alvarado Street, in the city of Chula Vista, State of California, comprised of approximately 2.63 acres, as more particularly. described on Exhibit A attached hereto and incorporated herein by this reference (the "Windmill Farms Site"). The appraised value of the Windmill Farms Site was recently determined to be $1,375,000. B. District desires to acquire the Windmill Farms.Site for purposes of developing a new administrative headquarters for itself and possibly other public agencies; such project (the "District Headquarters Proiect") might also include privately used commercial or office space. C. District owns certain unimproved real property located at the east side of Medical Center Drive, between East Naples Court and Medical Center Court, in the City of Chula Vista, State of California, comprised of approximately 30.06 acres, as more particularly described on Exhibit B attached hereto and incorporated herein by this reference (the "Hospital Site"). The appraised value of the Hospital site was recently determined to be $1,920,000. D. Agency desires to acquire the Hospital site for purposes of donating such property to the State of California Department of Veterans Affairs (the "CDVA") to be developed and operated by the CDVA as a 400 bed, congregate care, veterans home facility (the "Veterans Home proiect"). E. The Agency and the city are currently negotiating an agreement with the CDVA in order to finalize the terms and conditions for the proposed donation of the Hospital site to the CDVA for the development of the Veterans Home Project (the "Aqencv/CDVA Land Donation Aqreement"). F. In order to account (approximately) for the difference in the appraised values of the Windmill Farms site and the Hospital Site, the District has requested that'the city provide the District with land suitable for the development of a new District corporate . yard facility (a "District Corporate Yard site"), or.other.suitable consideration. The City has been seeking a suitable site for its .% 3-7 ' .. / own new corporate yard facility and is willing to. accommodate the District's request on the terms and conditions set forth herein. G. In order for the Agency to obtain the Hospital site for its intended purposes, for the District to obtain the Windmill Farms site for its intended purposes, to coordinate the orderly and appropriate development of the properties, and to provide the District with the District Corporate Yard Property, the parties desire to (1) exchange the Windmill Farms site for the Hospital Site, (2) establish a mechanism to provide the District with the District Corporate Yard Property and other consideration in order to account (approximately) for the difference in value between the exchanged properties, and (3) agree upon certain project development contingencies, timelines and standards, all as more specifically set forth in this Agreement, and subject to the terms and conditions hereof. NOW, THEREFORE, in consideration of the above recitals, the covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which the. parties hereby acknowledge, the parties hereby agree as follows: 1. Aqreement to Exchanqe Properties. 1.1 In General. Subject to the terms and conditions set forth herein (a) District agrees to convey all of its right, title and interest in and to the Hospital Site to the Agency, or its designee; and (b) Agency agrees to convey all of its right, title and interest in and to the Windmill Farms Site to the District, or its designee. 1.2 Reversion Riqhts. District acknowledges and agrees that the Agency's sole interest in exchanging the Windmill Farms Site for the Hospital Site is so that the Agency can donate the Hospital site to the CDVA, and the CDVA can develop such property into the Veterans Home Project. Accordingly, the parties agree that the form Grant Deeds effecting the property e;xchange contemplated hereby shall contain appropriate reversJ.onary language and conditions such that in the event that the Hospital Site is transferred to the CDVA pursuant to the terms of this Agreement and, for whatever reason, the Veterans Home Project is not funded and developed thereon (the "Property Reversion Event"), title to the Hospital site shall revert back to the District and title to the Windmill Farms Site shall revert back to the Agency. Furthermore, in the event that the Property Reversion Event occurs, the Agency and the District agree to use their mutual best efforts to take any and all additional necessary and appropriate steps to return title to the Hospital site to the District and to return title to the Windmill Farms site to the Agency. In the event that the Property Reversion Event does not occur within. the time specified by the Grant Deed reversionary language, or the Agency /' 3-$> ' and the District otherwise , agree, the reversionary interests retained by the parties in the Windmill Farms site and the Hospital Site, respectively, shall be released, and fee title thereto shall permanently vest with the party acquiring title hereunder. 2. Timinq for Exchanqe: Escrow. 2.1 Openinq of Escrow. Within three (3) business days after execution of this Agreement by both parties, Agency shall deliver a fully executed copy of this Agreement into escrow ("Escrow") with Spring Mountain Escrow Company, 296 H Street, suite 201, Chula Vista, Ca. 91910, ("Escrow Aqent"). The parties hereby designate, authorize and instruct Escrow Agent to act in such capacity pursuant to the terms of this Agreement. "Openinq of Escrow" shall be the date Escrow Agent receives such Agreement. Escrow Agent shall deliver written confirmation of the Opening of Escrow pursuant to the terms hereof within three (3) business days aft~r such receipt. 2.2 Escrow Instructions. Thïs Agreement shall constitute initial escrow instructions to Escrow Agent. The parties shall execute any additional escrow instructions. reasonably required by Escrow Agent to consummate the transaction provided for herein; provided, however, such additional escrow instructions shall not modify the provisions of this Agreement, unless such instructions (a) state the modification in full, and (b) are signed by both parties. 2.3 Deliveries to Escrow. 2.3.1 Grant Deeds. Prior to Close of Escrow (a) Agency shall deliver to Escrow a fully executed and notarized Grant Deed in substantially the form attached hereto as Exhibit C (the "Windmill Farms site Grant Deed"); and (b) District shall deliver to Escrow a fully executed and notarized Grant Deed in substantially the form attached hereto as Exhibit D (the "Hospital site Grant Deed"). The "transferee" on each such Grant Deed shall be left blank. Prior to Close of Escrow.for the Hospital Site, Escrow Agent shall complete the Grant Deeds. The transferee shall be designated pursuant to unilateral Escrow instructions to Escrow Agent from District, with respect to the Windmill Farms Site Grant Deed, and from Agency, with respect to the Hospital site Grant Deed. 2.3.2 Deliverv of Propertv Information. Within ten (10) days after Opening of Escrow, each party agrees to deliver to the other complete copies of the following items relating to the property owned by the delivering party: (a) Copies of any existing or contemplated agreements relating to the use or maintenance of the property. ~ 3~'! (b) Copies of any existing property survey(s) within the party's possession or of which the party is aware and which is reasonably available. (c) Copies of any existing report(s) relating to the physical condition of the property within the party's possession or of which the party is aware and is reasonably available. 2.3.3 Other. Prior to the Closing Date specified in section 2.4, each party shall timely deliver to Escrow all funds and documents required of such party in order to Close Escrow pursuant to the terms of this Agreement, including, but not limited to, prorated amounts and other payments required under this Agreement. 2.4 Close of Escrow. "Close of Escrow" means the date Escrow Agent records the Grant Deeds in favor of District and Agency, respectively. Close of Escrow shall occur on the date ("Closinq Date") no later than three (3) days after the 4ate that (a) all conditions to Close of Escrow, as set forth in Sections 2.5 and 2.6 hereof, are satisfied or waived; and (b) all funds and documents required hereunder are deposited in Escrow; but (c) in no event later than December 1, 1995, unless otherwise agreed by the parties in writing. The parties acknowledge that a timely Close of Escrow on or before the specified Closing Date is a material term of this Agreement for the benefit of Agency in light of Agency's need to accommodate the needs and demands of CDVA regarding the donation of the Hospital site by the Agency to CDVA. Accordingly if the Escrow does not close on or before the Closing Date and if the Closing Date has not been extended by written instructions signed by the Agency, then Agency shall have the unilateral right to terminate this Agreement and the Escrow by delivering written notice to Escrow Agent (with a copy to the other party), in which event neither party shall have any further obligation hereunder; provided, however, any defaulting party may still be found liable for consequential damages to a non-defaulting party. 2.5 Aqencv's Conditions to Close of Escrow. Close of Escrow shall be subject to satisfaction of each of the following conditions precedent, which are for the benefit of the Agency: (a) Satisfaction of Conditions Precedent in Aqencv/CDVA Land Donation Aqreement. All conditions precedent. to the obligation of the Agency to donate the Hospital site to the CDVA, as set forth in the Agency/CDVA Land Donation Agreement, shall have been satisfied or waived, in accordance with the terms and conditions thereof. The determination of when all such conditions have been satisfied or waived shall be made by Agency in its sole discretion. ...4--'" J-jlJ I, ..< / (b) Title Matters. Agency's and CDVA's approval of a Preliminary Title Report for the Hospital Site, and the commitment of the Title Insurer to issue an owner's Title Insurance Policy for such property, in accordance with such report, in a form and with endorsements approved by Agency and CDVA in their sole discretion, all as more particularly set forth in Section 3 hereof, below. (c) Approval of the Physical Condition of the Property. Agency's and CDVA's approval, in their sole discretion, of the physical and environmental conditions of the Hospital Site, the items delivered by District pursuant to section 2.3.2, above, the feasibility of acquisition, development, improvement, operation, maintenance and use of the Hospital Site for Agency/CDVA intended purposes, and the status of approval of any and all required financing and development entitlements. In order to conduct its feasibility review, Agency and CDVA shall have the right, after Opening of Escrow, to enter the Hospital Site, pursuant to the terms and conditions of Section 4.5 hereof, below. (d) District's Pay-off of -Escrow Fees and Monetarv Liens on Hospital Site. District's payment into Escrow of (1) any and all required prorations, Escrow fees and costs, as provided in Section 2.10 hereof; and (2) amounts necessary to reconvey any and all monetary liens against the Hospital site, as provided in Section 2.11 hereof, below. (e) Completion of CEOA Analvsis. Completion of any and all analysis and actions with respect to this transaction required pursuant to the California Environmental Quality Act. 2.6 District's Conditions to Close of Escrow. Close of Escrow shall be subject to satisfaction of each of the following conditions precedent, which are for the benefit of the District: (a) OPSC Approval. Approval of the property exchange by the State Office of Public School Construction in order to obtain the removal of the State's lien against the Hospital Site. (b) Title Matters. District's approval of a Preliminary Title Report for the Hospital site, and the commitment of the Title Insurer to issue an owner's Title Insurance Policy for such property, in accordance with such report, in a form and with endorsements approved by the District in its reasonable discretion, all as more particularly set forth in Section 3.2 hereof, below. (c) Approval of the Physical Condition of the Property. District's approval, in its reasonable discretion, of the physical and environmental conditions of the Windmill Farms Site, and the items delivered by Agency pursuant to section 2.3.2 hereof, above. In order to conduct its review of the physical condition of the site, District shall have the right, after Opening of Escrow, to ~ .}-/I ,. enter the Windmill Farms Site, pursuant to section 4.5 hereof, below. (d) Aqencv's Pav-off of Escrow Fees and Monetarv Liens on Windmill Farms Site. Agency's payment into Escrow of (1) any and all required prorations, Escrow fees and costs, as provided in Sections 2.10 hereof; and (2) amounts necessary to reconvey any and all monetary liens against the Windmill Farms Site, as provided in Section 2.11 hereof, below. (e) Completion of CEOA Analvsis. Completion of any and all analysis and actions with respect to this transaction required pursuant to the California Environmental Quality Act. 2.7 Satisfaction. Waiver of Conditions. Any party's approval, wherever required to satisfy a condition, shall be evidenced by written notice delivered to Escrow Agent (with a copy to the other party). 2.8 Diliqence: Cooperation. 'Each party agrees to.exercise due diligence in satisfying each and every condition to Close of Escrow for which such party is responsible. Each party agrees to cooperate with the other party in satisfying those conditions to Close of Escrow for which such other party is primarily responsible. 2.9 Completion of Documents. Escrow Agent is authorized: to insert the Closing Date and otherwise complete the documents deposited in Escrow, where appropriate and consistent with this Agreement. 2.10 Prorations. Escrow Fees and Costs. 2.10.1 Prorations. The following items shall be prorated in Escrow, as of the date of Close of Escrow: real estate taxes, based on the most recent information available in the office of the taxing entity. All prorations shall be made on the basis of a 30-day month and a 360-day year, unless the parties otherwise agree in writing. 2.10.2. Escrow Fees and Costs. For purposes of allocating escrow fees and closing costs: (a) Agency shall be deemed the "Seller" with respect to the Windmill Farms site and the "Buyer" with respect to the Hospital Site; and (b) District shall . be deemed the "Seller" with respect to the Hospital site and the "Buyer" with respect to the Windmill Farms site. Each party will be responsible for paying customary "Seller" and "Buyer" escrow fees and closing costs with respect to the property transfers for which they are assuming such roles. Accordingly, "Seller" in each case will pay: (1) the County Documentary Transfer Tax, in the amount Escrow Agent determines to bß required by law; (2) the cost of the Title Policy described in Section 3.2; (3) one-half Escrow ~ ..J - /.2.- . " Agent's escrow fee (or Escrow cancellation charges, if any); and (4) all other customary Seller Escrow charges and expenses. "Buyer" in each case will pay: (a) any and all charges relating to Buyer's financing of the purchase; and (c) one-half of Escrow Agent's escrow fee (or Escrow cancellation charges, if any). Notwithstanding the foregoing, in the event of a default by Agency or District hereunder, all cancellation and other escrow charges shall be paid by the defaulting party. 2.11 Existinq Encumbrances. Agency and District shall be responsible for payment into Escrow of any and all funds necessary to reconvey any and all monetary liens and encumbrances with respect to the Windmill Farms Site and the Hospital Site, respectively, other than assessments and property taxes and those liens which are Permitted Exceptions pursuant to Section 3.2 hereof. Escrow Agent is authorized to secure beneficiary demands and requests for reconveyance of such monetary liens, and each property shall be transferred free from such liens at Close of Escrow. 2.12 Distribution of Funds and Documents. At the 'Close of Escrow, Escrow Agent shall do each of the following: (a) Payment of Encumbrances. Pay the amount of those monetary liens to be removed at Close of Escrow using the funds deposited in Escrow by the parties responsible therefor pursuant to Section 2.11, above. (b) Recordation of Documents. Submit to the County Recorder of San Diego County the Grant Deeds for the properties and each other document to be recorded under the terms of this Agreement, or by general usage, and, after recordation, cause the County Recorder to mail the Grant Deeds to the party acquiring rights thereunder. (c) Non-Recorded Documents. Deliver by United States mail (or hold for personal pickup, if requested): (1) the Title Policies to the insured party; each other non-recorded document received hereunder to the payee or person acquiring rights thereunder or for whose benefit said document was acquired. 3. Title Matters. 3.1 Preliminary Title Report. (a) Deliverv to Buver. As soon as possible after Opening of Escrow, Escrow Agent shall provide to each party a preliminary title report ("Preliminary Title Report") with respect to the property to be acquired thereby, issued by First American Title Company, or another mutually acceptable title insurer ("Title Insurer") reflecting the status of title to such property. The, Prelim~nary Title Reports shall be deemed received by each party on ,.,-- .3-/3 .0 the date of personal delivery or three (3) days after mailing by Escrow Agent. (b) Time to Obiect. District shall have ten (10) days and Agency shall have thirty (30) days (or more if required by CDVA) , respectively, after the date of receipt of their Preliminary Title Reports to notify Escrow Agent (with a copy to the other party), in writing, of its objection to the legal description or any matters indicated as exceptions in such report. (c) Time to Eliminate Exceptions. If a reviewing party objects to one or more exceptions indicated in the Preliminary Title Report, the other party may cure such objection by delivering, within ten (10) days after receipt of such objection, to Escrow Agent (with a copy to the objecting party) written agreement to eliminate such exceptiones) by the Closing Date (d) Riqht to Cancel or Perform. If the party receiving a valid objection to title does not agree to cure such objection, the objecting party shall elect one of the following, by d~livering written notice to Escrow Agent (with a copy to the other party) within five (5) days after receipt of an election not to cure title or expiration of the 10-day response period described in (c) above (whichever occurs first): (1) to waive its objections, take title subject to such exceptions, and proceed with Close of Escrow; or (2) to terminate this Agreement and the Escrow, in which event neither party shall have any further obligation hereunder. 3.2 Title Insurance. As of Close of Escrow, Title Insurer shall issue, or be committed to issue, at the sole cost of the "Seller" of each property, a standard form ALTA Owner's Title Insurance Policy ("Title Policy") insuring the acquiring party's title to the property in the amount of $1,375,000 with respect to the Windmill Farms Site, and $1,920,000 with respect to the Hospital Site, subject only to the following permitted exceptions ("Permitted Exceptions"): (a) current, non-delinquent real estate taxes and assessments; (b) the lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 of the California Revenue and Taxation Code; (c) the matters set forth in the Preliminary Title Report and approved by the acquiring party pursuant to Section 3.1 hereof; (d) any other matters approved in writing by the acquiring party; (e) with respect to the Windmill Farms Site, the non- discrimination covenants required by California Health and Safety Code Sections 33435 and 33436; (f) any reversionary interests retained by the transferring party as set forth in the Grant Deeds transferring the properties; and (g) matters excepted or excluded from coverage by the printed terms of the Title Policy's standard form. ..c J-/1 " 4. Additional Obliqations. 4.1. citv Contribution Towards Acquisition of District Corporate Yard Property. The city agrees to contribute towards the acquisition of a District Corporate Yard site on the following terms and conditions: (a) The City shall use its best efforts to specifically designate property which shall comprise or otherwise include a District Corporate Yard site acceptable to the District within six (6) months of the Effective Date of this Agreement. The parties shall agree upon such designation in writing. The property so designated shall be referred to hereinafter as the "Desiqnated District Corporate Yard Site". (b) The parties acknowledge and agree that the properties currently under consideration as possible locations for the District Corporate Yard site are properties upon which the City is contemplating locating its own new corporate yard facility (the "City Corporate Yard"). Such properties include {1) po~tions of certain real property located on Maxwell Road J.n Chula Vista currently owned by SDG&E or Hazard Contracting Inc. (the "Maxwell Road Sites"); and (2) portions of up to 50 acres of undeveloped real property located within Phase II of the Otay Rio Business Park (the "Otay Rio Site"). (c) If the Designated District Corporate Yard Site is comprised of a portion of a larger property upon which the City is contemplating locating the City Corporate Yard, then the city agrees as follows: (1) The city shall use its best efforts to acquire the property that includes the Designated District Corporate Yard site within one (1) year of the parties designation thereof; provided, however, the District agrees to reasonably consider any and all reasonable proposals by the City to extend this time frame to the extent required by site acquisition complications, requirements and/or city budgetary constraints. (2) If the City acquires such property the City shall transfer up to a $545,000 fair market value interest in the Designated District Corporate Yard site to the District at no cost- to the District. If the fair market value of the interest transferred exceeds $545,000, the District shall pay the City cash (or other mutually acceptable consideration) in an amount equal to such excess value. (3) The city shall cooperate with the District so as to accommodate a design and allocation of the site(s) that best meets both agencies' requirements. If the Designated District Corporate Yard site is a part of the Otay Rio Site,. the city further agrees to provide two access roads to such site and to Ý 3-/5 ,0 explore the feasibility of having one such access road proceed north, directly to otay Valley Road. (d) If the Designated District Corporate Yard Site is not part of a larger property upon which the City is contemplating locating the City Corporate Yard, the District shall be primarily responsible for acquiring such property. Notwithstanding the foregoing, the City shall reasonably cooperate with such acquisition, and shall contribute up to $545,000 in cash (or other mutually acceptable consideration) towards the purchase price of such property. (e) If, for whatever reason, neither the City nor the District acquires a District Corporate Yard Site within three (3) years of the Effective Date of this Agreement, the city agrees to pay the District $545,000 in cash (or other mutually acceptable consideration). (f) Notwithstanding the foregoing, the City shall have no obligation to contribute towards the costs of any neces$ary site due diligence, site remediation, site preparation, construction of improvements, or any and all other costs related to the acquisition and development of a District Corporate Yard Site. However, to the extent the city does contribute towards District Corporate Yard site acquisition and development costs, such costs may be applied to reduce, dollar for dollar, any obligation of the City to the District hereunder. (g) District acknowledges and agrees that any property acquired by the city for the District, or by the District directly with a contribution by the City, which is acquired in satisfaction of the City's obligations hereunder shall be acquired by the District with no representations or warranties from the City as to such property's physical condition or suitability for District's intended use. 4.2 Development of the Windmill Farms site. 4.2.1. Aqencv Contribution to District Headauarters Proiect. In the event that the District develops the Windmill Farms Site into the District Headquarters Project, the Agency, at no cost to the District, will contribute financing, or will arrange for the contribution of financing, for the District's lease or debt service payments for such project (the "Agency District Headquarters Project Contribution") in an amount not to exceed Five Hundred Thousand Dollars ($500,000). The Agency District Headquarters Project Contribution would be amortized over a period of up to twelve (12) years (the "Agency Contribution Term"). The maximum Agency District Headquarters Project Contribution payable, both in the aggregate and in anyone year, shall not to exceed the amount of tax increment generated by the District Headquarters Project and received by the Agency in unrestricted funds during the .-i"(J'> 3-lh ... " Agency Contribution Term. Nothing in this Section or this Agreement shall have the effect of preventing the District from subleasing a portion of the District Headquarters Project to a private venture. In order to implement its obligations under this section, the Agency further agrees to negotiate with any merchant builder that might contract with the District for the development of the District Headquarters Project with respect to a lease payment schedule which favors the District in the early years of such lease. 4.2.2. Development Aqreement. In light of the Windmill Farms Site's location within a redevelopment project area, prior to developing the Windmill Farms site into the District Headquarters or otherwise, District agrees to enter into an owner participation agreement with the Agency in order to establish more specific parameters for such development. District further agrees to exercise good faith efforts to complete development of the site within five (5) years after its acquisition thereof. 4.3 citv Staff Cooperation in processinq Rezone. .City staff will expedite processing, and presentation to City Council for due consideration, of any District application for the rezoning of the District property located at 1130 Fifth Avenue, Chula Vista, upon which the District's administrative offices are currently located. Due consideration will be afforded the District's preferred zoning of the subject site. 4.4 District's Aqreement to Cooperate. Consistent with the terms of this Agreement and the Agency CDVA Land Donation Agreement, the District shall exercise its best efforts in order to structure the Hospital site property transfer in a manner consistent with the proposed donation of the property by the Agency to the CDVA and the development thereby into the Veterans Home Project. 4.5 Access to Propertv: Indemnitv. Between the date of Opening of Escrow and the Close of Escrow (or earlier termination of Escrow), upon reasonable notice, each party shall allow the other (and its designees) reasonable access to the property to be acquired thereby, for the purpose of inspecting, surveying and testing the same. Each party (the "Accessing Party") which so accesses the other party's property, shall indemnify, hold harmless, protect and defend the party whose property is being accessed, and the property, from and against any and all liens, claims, liability, loss, damages, costs, expenses, suits or judgments for labor performed or materials furnished to or for the Accessing Party, or for injuries to person or property damage, arising out of any accident or occurrence in any way connected with entry upon, testing or inspection of the property by the Accessing Party (or its designees). 4.6 CEOA Work. Agency agrees to be'the lead agency and to prepare and file any and all required CEQA documents and notices in rU- 3~17 .. connection with the exchange of the Windmill Farms Site and the Hospi tal Site ( collectively, the "CEQA Work"). The CEQA Work shall be prepared at Agency expense; provided, however, District agrees to promptly reimburse the Agency for any and all reasonable out of pocket costs incurred by the Agency in connection with the CEQA Work to the extent related to the District's acquisition and proposed development of the Windmill Farms Site. 5. Representations and Warranties. 5.1 In General. Each party, with respect to itself, agrees, represents and warrants as of the date of execution of this Agreement, and as of Close of Escrow, as follows: (a) Authority. Such party has full legal right, power and authority, to execute and fully perform its obligations under this Agreement, without the need for any further action; and the persons executing this Agreement and other documents required hereunder on behalf of such party are the duly designated agents thereof and are authorized to do so. (b) Investiqation of Property. Where a party is acquiring property hereunder (an "Acquiring Party"), with respect to the property being acquired thereby, the Acquiring Party will make an independent investigation, to the extent such party deems necessary or appropriate, concerning the physical condition (including the -existence of hazardous materials), value, development, use, marketability, feasibility and suitability of the property, including (but not limited to) land use, zoning and other governmental restrictions and requirements. Acquiring Party is acquiring the property "AS IS,"in its present state and condition solely in reliance upon Acquiring Party's own investigation, and no representations or warranties of any kind, express or implied, have been made by the party conveying the property (a "Conveying Party"), or its representatives, except as expressly set forth in this Agreement Each Acquiring Party unconditionally releases each Conveying Party from and against any and all liability to Acquiring Party, both known and unknown, present and future, for any and all damages, losses, claims and costs (including attorneys fees), arising from the physical condition of the property being acquired thereby (including, without limitation, the existence of hazardous materials), or the property's non-suitability for Acquiring Party's intended use. with respect to this Section 5.1{b) each Acquiring Party waives the provisions of California Civil Code Section 1542 which provides: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release which if known by him must have materially affected his settlement with the debtor." (c) Real Estate Commissions. No brokers or finders have been employed or are entitled to a commission or compensation in connection with this transaction. Each party agrees to indemnify, protect, hold harmless and defend the other party from and against -n- 3 ~ /6' ," any obligation or liability to pay any such commission or compensation arising from the act'or agreement of the indemnifying party. 5.2 Survival of Warranties. The representations and warranties given by each party in this section 5, and all obligations to be performed under the terms of this Agreement after Close of Escrow, shall survive the Close of Escrow and delivery of the Grant Deed to the Acquiring Party. 6. General Provisions. 6.1 Assiqnment. No party may assign this Agreement or any of its rights hereunder without the prior written consent of the other party which consent shall not be unreasonably withheld. Any purported assignment which has not been consented to by Seller as provided hereunder shall be null and void. Notwithstanding the foregoing, Agency shall have the absolute right without Districts consent, to assign its rights to acquire the Hospital Site to the CDVA. 6.2 Attorneys' Fees. If either party - commences legal proceedings for any relief against the other party arising out of this Agreement, the losing party shall pay the prevailing party's legal costs and expenses, including, but not limited to, reasonable attorneys' fees and costs as determined by the court. The prevailing party shall be that party receiving substantially the relief sought in the proceeding, whether brought to final judgment or not. 6.3 Computation of Time Periods. All periods of time referred to in this Agreement shall include all Saturdays, Sundays and state or national holidays, unless the period of time specifies business days, provided that if the date or last date to perform any act or give any notice or approval shall fall on a Saturday, Sunday or state or national holiday, such act or notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or state or national holiday. 6.4 Counterparts. This Agreement or any escrow instructions pursuant to this Agreement may be executed in multiple copies, each of which shall be deémed an original, but all of which shall constitute one Agreement after each party has signed such a counterpart. 6.5 Entire Aqreement. This Agreement, together with all exhibits attached hereto and other agreements expressly referred to herein, constitutes the entire agreement between the parties with respect to the subject matter hereof. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded. ~ .3 ~/? ." 6.6 Exhibits. All exhibits referred to herein are attached hereto and incorporated herein by reference. 6.7 Further Assurances. The parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carry out the provisions of this Agreement and the intentions of the parties. 6.8 Governinq Law. This Agreement shall be governed, interpreted, construed and enforced in accordance with the laws of the state of California. 6.9 Headinqs. The captions and paragraph headings used in this Agreement are inserted for convenience of reference only and are not intended to define, limit or affect the construction or interpretation of any term or provision hereof. 6.10 Modification, Waiver. No modification, waiver, amendment or discharge of this Agreement shall be valid unless the same is in. writing and signed by both Buyer and Seller. TOe escrow instructions shall be considered a part of this Agreement, and no provision in said escrow instructions shall supersede or contradict the provisions of this Agreement, unless the parties agree in writing to such change. 6.11 Notice. Notice to either party shall be in writing and either personally delivered or sent by certified mail, postage prepaid, return receipt requested, addressed to the party to be notified at the address specified herein. Any such notice shall be deemed received on the date of personal delivery to the party (or such party's authorized representative) or three (3) business days after deposit in the U.S. Mail, as the case may be. Citv/Aqencv Address for Notice: District Address for Notice: 276 Fourth Avenue 1130 Fifth Avenue Chula Vista, CA 91910 Chula Vista, CA 91910 Attn: Community Development Attn: Andy Campbell Director and City Attorney Either party may change its address for notice by delivering written notice to the other party as provided herein. 6.12 Severabilitv. If any term, provision, covenant or condition of this Agreement is held to be invalid, void or otherwise unenforceable, to any extent, by any court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby, and each term, provision, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. ~ ..< .. ..3-,,20 6.13 Successors. All terms of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective heirs, legal representatives, successors, and assigns. 6.14 Time. Time is of the essence of each provision of this Agreement, including without limitation all time deadlines for satisfying conditions and Close of Escrow. [NEXT PAGE IS SIGNATURE PAGE] ~ 3 -'-I ... IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first written above. AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public agency corporate and politic By: Shirley Horton, Chairman ATTEST Secretary CITY: CITY OF CHULA VISTA, a municipal corporation By: Shi.rley Horton, Mayor ATTEST city Clerk APPROVED AS TO FORM BY Bruce M. Boogaard city/Agency Attorney DISTRICT: SWEETWATER UNION HIGH SCHOOL DIST~ . BY:~ Robert Gri , President, B~ustees By:~m Dr. Edward Brand, District Superintendent m:\home\attorney\vethome2.agr ....l.fõ.--" .0 3-2.;¡"'- ATTACHMENT 3 HEALTH & SAFETY CODE SECTION 33433 "SUMMARY REPORT" PROPERTY EXCHANGE AGREEMENT CITY OF CHULA VISTA REDEVELOPMENT AGENCY AND SWEETWATER UNION HIGH SCHOOL DISTRICT AGREEMENT BACKGROUND AND OVERVIEW The City of Chula Vista Redevelopment Agency ("Agency") proposes to enter into a Property Exchange Agreement (" Agreement") with the Sweetwater Union High School District ("District"). The purpose of the Agreement is to contingently provide for the Agency to acquire property necessary to donate to the State of California Department of Veterans Affairs ("CDV A") to develop a Veterans Home Project. In exchange, the Agreement contingently provides for the District to acquire from the Agency, the property necessary to develop a new administrative headquarters, with perhaps other privately used commercial or office space, plus other considerations in order to account for the difference in values between the properties to be exchanged. Included as Attachment 1 is the proposed Agreement with accompanying exhibits which constitutes the relevant documents of the proposed sale. The Agency owns certain unimproved real property located at Third Avenue and Alvarado Street in the City of Chula Vista comprised of approximately 2.63 acres ("Windmill Farms site"). The Windmill Farms site has an appraised value of $1,375,000. The District owns certain unimproved real property located along the east side of Medical Center Drive, between East Naples Court and Medical Center Court in the City of Chula Vista comprised of approximately 30.06 acres ("Hospital site"). The Hospital site has an appraised value of $1,920,000. In order to account for the difference in the appraised values of the Windmill Farms site and the Hospital site ($545,000), the City/Agency is to provide the District with land suitable for the development of a new District Corporate Yard Facility. Additionally, in order to allow the District to develop the Windmill Farms site for its intended purposes, given the current real estate market and in a manner consistent with the current zoning and density requirements, the Agency is to provide an "Agency District Headquarters Project Contribution" in a contingent amount of up to $500,000 over a not to exceed period of twelve (12) years. The "contribution" is triggered only if the project creates tax increment revenue to the Agency generated by development of the site. Aaencv ProDertv DescriDtion The subject property to be transferred by the Agency to the District is located immediately adjacent (but not including) the northeast corner of Third Avenue and Alvarado Street within the Town Centre I Redevelopment Project Area. The subject property is currently vacant and wraps around the KFC drive-thru restaurant on the corner, and has street frontage on Third Avenue, Alvarado Street and Church Avenue. Third Avenue is an 80 foot-wide four-lane thoroughfare that serves the historic Chula Vista downtown district. Of the total 114,612 square foot irregularly shaped site, approximately 97,768 square feet are designated Commercial (APN 568-420-14, 15, ,;'-33 Health and Safety Code Section 33433 "Summary Report" Property Exchange Agreement Redevelopment Agency and Sweetwater Union High School District September 26, 1995 Public Hearing, Page 2 31 and 568-511-20) and the remaining 16,844 square feet are designated Residential (APN 568-511-18 and 19). The commercial land use area has a General Plan designation of Commercial Retail and a zoning designation of Central Commercial with a Precise Plan Modifier (CC-P). The residential land use area has a General Plan designation of Residential High (18-27 units/ac.) and a zoning designation of R-3, Residential Apartments. The commercial land use designations allow development of a wide range of improvements such as retail, professional offices, restaurants and fast-food with drive-thru service. The residential land use designations allow development of a multi-family project at a density of 18-27 dwelling units per acre. However, by approval of a Conditional Use Permit, the residentially zoned portion could be utilized for an office development. DISCUSSION Pursuant to Health and Safety Code Section 33433(a)(2)(B)(i-iv), the Agency is to provide in this "Summary Report" the following four items: 1. The cost of the Agreement to the Agency. 2. The estimated value of the interest (land) conveyed by the Agency to the District as determined at its "highest and best" use. 3. The estimated value of the interest conveyed by the Agency to the District as determined by the "reuse" value subject to the covenants and conditions of the Agreement. Any difference between the value in number 2 and number 3 requires an explanation by the Agency. 4. An explanation as to how the sale of property will assist in the elimination of blight. Item #1. Cost of Aareement to Aaencv Inasmuch as the Agreement provides for the rough equivalent value of land to be exchanged between the parties as discussed above, the "cost" (as intended within the Health and Safety Code) of the Agreement to the Agency is limited to the two following items; A) the $500,000 "Agency District Headquarters Project Contribution," and B) the associated staff costs for negotiating and implementing the Agreement. A. Agency District Headquarters Project Contribution Pursuant to Section 4.2.1. of the proposed Agreement, the Agency is to contribute financing toward the District's lease and/or debt service obligations on their contemplated District Headquarters in an amount not to exceed $500,000. During the course of negotiations of the Agreement, the District maintained that given the 3-3'1 Health and Safety Code Section 33433 "Summary Report" Property Exchange Agreement Redevelopment Agency and Sweetwater Union High School District September 26, 1995 Public Hearing, Page 3 current real estate market and site development density requirements, that a contribution by the Agency is necessary in order to have a private developer construct the Headquarters and additional "non-public" office/retail space on behalf of the District. Currently, the District estimates its need for office space at a new Headquarters facility to be 30,000 square feet. However, given the current zoning of the property (Central-Commercial and Residential Apartments) the Agency is desirous of a more dense development of the 2.63 acre site than the 30,000 square foot office building needed by the District. Therefore, in order to make it financially feasible for the District to have the additional commercial and office space constructed on the site, a contribution by the Agency is necessary. However, since this Agreement is contingent upon the Agency completing negotiations for a Veterans Home Project with the CDV A, the District has not proceeded with any in-depth studies or analysis to determine the amount of additional "non-District" space that can be constructed on the site. Therefore, the negotiated $500,000 amount is a "ceiling" figure, with the actual amount of the contribution to be dependent upon the ultimate design and build- out of the project. The contribution by the Agency is triggered only if the project generates tax increment revenue to the Agency. Since any District ownership portion of the project development is exempt from property taxes, the only property taxes that will be derived is from the "non-public" ownership portion. Additionally, the Agency's annual contribution is limited to the actual tax increment received by the Agency in "non- restricted" funds (after payment of the Low and Moderate Income Housing Fund contribution of 20%). Therefore at this time, it is not feasible to determine or project the actual amount of contribution to be provided by the Agency other than to say that it will not exceed $500,000 or extend beyond 12 years, and will not ever exceed the amount of actual "non-restricted" tax increment funds received from the project in any given year. AQencv ProDertv ADDraisal This request by the District for a contribution is supported by the appraisal completed on behalf of the Agency dated November 11, 1994, by Anderson & Brabant, Escondido, California. The following excerpt is from page 20 of the appraisal report: "Our analysis of the market indicates that current development of the property would not be feasible. It is likely that a prospective purchaser of the property would consider delaying development until supply and demand elements of the marketplace become more balanced which would likely improve the chances of obtaining development financing. A more stable market would result in a normal absorption pattern conducive to reasonable profit projections which fuel investment real estate development. The only current market participants for the 3-.3S Health and Safety Code Section 33433 "Summary Report" Property Exchange Agreement Redevelopment Agency and Sweetwater Union High School District September 26, 1995 Public Hearing, Page 4 property would be a user or a speculator who would hold the property for future development. However, it would be difficult to attract a user due to the limited availability of development financing and the existing supply of buildings that can be purchased at below replacement cost. Consequently, the highest and best use of the subject property is to hold for future development." Therefore in conclusion, due to the existing market conditions, an economic "incentive" by the Agency is necessary in order to attract the development financing for such a project at this time. Additionally, the Agency is willing to provide such an incentive in order to: 1) provide a mechanism for acquiring suitable property for a Veterans Home project, 2) provide the stimulus for assisting the District to establish their Headquarters within the Project Area and the "heart" of Chula Vista, 3) provide the stimulus for complete build-out of the site with additional "non-public" uses in a soft real estate market that will provide "spin-off" economic benefits to the City and, 4) eliminate a blighted site within the Project Area. B. Staff Costs The estimated costs for negotiating and implementing the Agreement is $15,000. The Agency views this as a normal "cost of doing business" that is necessary to accomplish the major goals of this transaction as provided above. Item #2 Estimated Value of Aaencv Prooertv to be Conveyed at its Hiahest and Best Use The estimated value of the Agency's 2.63 acre Windmill Farms site is $1,375,000 or $12/square foot. As indicated previously, this value was arrived at by an appraisal prepared by Anderson and Brabant, on behalf of the Agency dated November 11, 1994. Utilizing the sales comparison approach, the appraisers arrived at the "highest and best use" value based upon recent similar commercial land sales that were also indicated to be similar in value of recent sales for multi-family residential land. As a conclusion, the appraisers indicated that the unit value of the subject site is less than $13.75/square foot and greater than $10.51 /square foot. Therefore, by simply splitting the difference between the values, the $12/square foot value was recommended. Item #3 Estimated Value of Aaency Prooertv to be Conveyed at its Reuse Value The "reuse" value of the property is the same as the "highest and best use" value ($1,375,000). Since the Agency is not imposing any additional covenants, conditions or restrictions on the property above and beyond the normal regular zoning requirements, its value has not been diminished by additional development standards or increased development costs. In other words, the "reuse" of the property in its 3- % Health and Safety Code Section 33433 "Summary Report" Property Exchange Agreement Redevelopment Agency and Sweetwater Union High School District September 26, 1995 Public Hearing, Page 5 intended manner pursuant to the Agreement is consistent with development of the property at its "highest and best use" value. Item #4 EXDlanation of Elimination of Blight This Agreement will have a positive affect on the overall stated redevelopment goal of eliminating blight within the respective project areas. The currently vacant site has been vacant since the late 1980's as a result of Agency acquisition actions taken to consolidate irregular parcels under multiple ownerships that proved to be a major impediment to development of this site as a prime commercial/office mixed use project. Unfortunately, the local economy (as well as the nation as a whole) spiraled into a long and deep recession shortly after the completion of the property acquisitions; a recession in which, at least the state of California, is still suffering. As discussed previously in this report and the appraisal, the current market conditions still preclude the development of this site at its "highest and best use" because of the lack of market demand and development financing for this type of project in this particular market trade area. Therefore, a rational conclusion would be that the site would remain in a blighted condition for the foreseeable future absent any financial incentive by the Agency. Therefore, this Agreement which provides for the Agency to provide the economic stimulus discussed in item #1 above, will result in the ability of the site to be constructed with the District Headquarters and additional commercial/office space users. Finally, the development of the site with both public and private uses will have indirect "spin-off" economic benefits. M:IHOMEICOMMDEV\HA YNESIDOCUMENTIPROPEXCH.AG M 3-'37 ATTACHMENT 4 CITY COUNCIL RESOLUTION /cf'ð1° REDEVELOPMENT AGENCY RESOLUTION 116 J RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING THE EXECUTION OF A PROPERTY EXCHANGE AGREEMENT BETWEEN THE AGENCY AND THE SWEETWATER UNION HIGH SCHOOL DISTRICT FOR THE PURPOSES OF PROVIDING THE AGENCY WITH THE PROPERTY NECESSARY TO EFFECTUATE THE VETERANS HOME PROJECT AND TO PROVIDE THE DISTRICT WITH THE PROPERTY NECESSARY TO DEVELOP A NEW DISTRICT ADMINISTRATIVE HEADQUARTERS IN THE TOWN CENTRE I REDEVELOPMENT PROJECT AREA WHEREAS, the City of Chula Vista Redevelopment Agency ("Agency") own certain unimproved real property located at Third Avenue and Alvarado Street in the City of Chula Vista comprised of approximately 2.63 acres ("Windmill Farms Site") with an appraised value of $1,375,000; and, WHEREAS, the Sweetwater Union High School District ("District") desires to acquire the Windmill Farms Site for purposes of developing an new administrative headquarters which might also include privately used commercial or office space; and, WHEREAS, the District owns certain unimproved real property located along the east side of Medical Center Drive, between East Naples Court and Medical Center Court in the City of Chula Vista, comprised of approximately 30.06 acres, (the "Hospital Site") with an appraised value of $1,920,000; and, WHEREAS, the Agency desires to acquire the Hospital Site for purposes of donating such property to the California Department of Veterans Affairs ("CDV A") to be developed and operated by theCDV A as a 400 bed, congregate care Veterans Home Facility ("Veterans Home Project"); and is currently negotiating an Agreement with the CDV A in order to finalize the terms and conditions for the proposed donation of the Hospital Site to the CDV A for the Veterans Home Project; and, WHEREAS, in order to approximately account for the difference in value between the properties to be exchanged ($545,000), the City agrees to provide the District with land suitable for the development of a new District Corporate Yard Facility; and, WHEREAS, in order for the Agency to obtain the Hospital Site for its intended purposes and for the District to obtain the Windmill Farms Site for its intended purposes, and for the City to provide the District with the land necessary for their Corporate Yard Facility, this Agreement needs to be executed; and, WHEREAS, a duly noticed public hearing pursuant to Government Code Section 6066 and Health and Safety Code Sections 33431 and 33433 was held by the City Council and Redevelopment Agency on September 26, 1995. ß~31 RESOLUTION XXXX Page 2 NOW THEREFORE, THE CITY OF CIruLA VISTA AND THE CHULA VISTA REDEVELOPMENT AGENCY do hereby find, order, determine and resolve that: 1. The Redevelopment Agency is transferring the property to the School District for consideration at least equal to the fair market value of the property at its highest and best use under the redevelopment plan; and 2. The property transfer will help toward the goal of eliminating blight within the Town Centre I Redevelopment Project Area; and 3. The Property Exchange Agreement between the City of Chula Vista, Chula Vista Redevelopment Agency and the Sweetwater Union High School District is hereby approved and the Mayor is authorized to execute same. A copy of the Agreement will be kept on file with as document number - PRESENTED BY: APPROVED AS TO FORM BY: eLL ~_o ~~ ./ .~~~ Chris Salomone, Executive Secretary and B~OOg~ard/ Community Development Director A nse M:\HOME\COMMDEVIHA YNES\RESOS\ VETHOME.RES 3-~o