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HomeMy WebLinkAbout2008/02/12 RDA Agenda Packet ~.,,~c, """a,IY Oi perjury that I am , ed by the City of Chula Vista in the Clerk and that I posted this ulletin board according to ents. ~v?- - '"""'It -'" -~~-~ -- ~ el1Y OF CHUlA VISfA AJ Cheryl Cox, Mayor/Chair Rudy Ramirez, Council/Agency Member David R. Garcia, City Manager/Executive Director John McCann, Council/Agency Member Ann Moore, City Attorney/Agency Counsel Jerry R. Rindone, CounciVAgency Member Donna Norris, Interim City Clerk Steve Castaneda, CounciVAgency Member ADJOURNED REGULAR MEETING OF THE CITY COUNCIL AND SPECIAL MEETING OF THE REDEVELOPMENT AGENCY F~bruary 12, 2008 6:00 P.M. (hnmediately following the City Council Meeting) Council Chambers City Hall 276 Fourth Avenue CALL TO ORDER ROLL CALL: Council/Agency Members: Castaneda, McCann, Ramirez, Rindone, and Mayor/Chair Cox PUBLIC COMMENTS Persons speaking during Public Comments may address the Council/Redevelopment Agency on any subject matter within the Council/Agency's jurisdiction that is not listed as an item on the agenda. State law generally prohibits the Council/Agency from discussing or taking action on any issue not included on the agenda, but, if appropriate, the Council/Agency may schedule the topic for future discussion or refer the matter to staff. Comments are limited to three minutes. ACTION ITEM The ltem(s) listed in this section of the agenda will be considered individually by the Council/Agency, and is expected to elicit discussion and deliberation. If you wish to speak on the item(s), please fill out a "Request to Speak" form (available in the lobby) and submit it to the City Clerk prior to the meeting. 1. CONSIDERATION OF THE ESTABLISHMENT OF A POOL OF INVESTMENT BANKING AND UNDERWRITING FIRMS FOR THE CHULA VISTA MERGED BAYFRONTITOWN CENTRE I REDEVELOPMENT PROJECT AREA AND THE MERGED REDEVELOPMENT PROJECT AREA A joint planning effort between the City/Redevelopment Agency and the San Diego Unified Port District created the Chula Vista Bayfront Master Plan (CVBMP) that envisions developing a world-class waterfront using sound planning and economics. Within this area, which encompasses a total of approximately 550 acres that includes approximately 490 acres of land and 60 acres of water area, is the Merged Bayfront/Town Centre 1 Redevelopment Project Area. Over the next several years, the City anticipates the CVBMP's new development and redevelopment projects will result in between $178 and $510 million in capital and infrastructure requirements. To finance these projects, it is necessary to establish a pool of investment banking and underwriting firms to serve as an integral part of the City's financing team. Adoption of the resolution establishes such a pool. (Finance Director) Staff recommendation: Council/Agency adopt the following resolutions: A. JOINT RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ESTABLISHING A POOL OF INVESTMENT BANKING AND UNDERWRITING FIRMS FOR THE CHULA VISTA MERGED BA YFRONT/TOWN CENTRE I REDEVELOPMENT PROJECT AREA B. JOINT RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ESTABLISHING A POOL OF INVESTMENT BANKING AND UNDERWRITING FIRMS FOR THE CHULA VISTA MERGED REDEVELOPMENT PROJECT AREA OTHER BUSINESS 2. CITY MANAGER/EXECUTIVE DIRECTOR'S REPORTS 3. MAYOR/CHAIR'S REPORTS 4 COUNCIL/AGENCY MEMBERS' COMMENTS ADJOURNMENT to the Regular Meeting of February 19, 2008, at 6:00 p.m. in the Council Chambers. In compliance with the AMERICANS WITH DISABILITIES ACT The City of Chula Vista requests individuals who require special accommodations to access, attend, and/or participate in a City meeting, activity, or service request such accommodation at least forty-eight hours in advance for meetings and five days for scheduled services and activities. Please contact the City Clerk for specific information at (619) 691-5041 or Telecommunications Devices for the Deaf (TDD) at (619) 585-5655. California Relay Service is also available for the hearing impaired Page 2 - Jt. CClRDA Agenda htto:/ /www.chu1avistaca.gov February 12, 2008 CITY COUNCIL & REDEVELOPMENT AGENCY AGENDA STATEMENT ~I~ CIlY OF ~CHULA VISTA FEBRUARY 12,2008 ItemL ITEM TITLE: JOINT RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ESTABLISHING A POOL OF INVESTMENT BANKING AND UNDERWRITING FIRMS FOR THE CHULA VISTA MERGED BA YFRONT/TOWN CENTRE I REDEVELOPMENT PROJECT AREA SUBMITTED BY: REVIEWED BY: JOINT RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ESTABLISHING A POOL OF INVESTMENT BANKING AND UNDERWRITING FIRMS FOR THE CHULA VISTA MERGED REDEVELOPMENT PROJECT AREA DIRECTOR OF FINANCE/TREASURER 4<. CITY MANAGER ,~\0N '?..... I 4/5THS VOTE: YES D NO ~ SUMMARY A joint planning effort between the CitylRedevelopment Agency (Agency) and the San Diego Unified Port District (Port) created the Chula Vista Bayfront Master Plan (CVBMP) that envisions developing a world-class waterfront using sound planning and economics. Within this area, which encompasses a total of approximately 550 acres that includes approximately 490 acres of land area and 60 acres of water area, is the Merged BayfrontITown Centre I Redevelopment Project Area. Over the next several years, the City anticipates the CVBMP's new development and redevelopment projects will require between $178 million and $510 million in capital and infrastructure requirements. To finance these projects, it is necessary to establish a pool of investment banking and underwriting firms to serve as an integral part of the City's financing team. Adoption of the resolution establishes such a pool. 1-1 FEBRUARY 12,2008, ItemL Page 2 of5 RECOMMENDATION Council/Redevelopment Agency adopt the resolutions. BOARDS/COMMISSION RECOMMENDA nON On September 27, 2007, the Chula Vista Redevelopment Corporation adopted a resolution recommending the Chula Vista City Council and Redevelopment Agency approve the pool of investment banking and underwriting firms as presented by city staff. DISCUSSION The practice of establishing an underwriting pool streamlines the process for project financing. Additionally, the pool concept provides the City and Agency with a wide range of financial expertise and it provides for participation by a variety of qualified firms. On March 23, 2007, the City issued a Request for Proposal (RFP) for investment banking and underwriting services. The RFP was advertised in the Star News, a local publication, and posted electronically on Planet Bids, a web-based vendor and bid management system that is widely used by other local agencies. In addition, many underwriting firms were contacted directly and invited to participate in this process. In total, ten proposals from national and regional municipal investment banking and underwriting firms were received, and upon review, nine were selected for further consideration based on their resources and ability to manage multi-million dollar financings. A four-member panel consisting of the City's Director of Finance, Assistant Director of Finance, Treasury Manager and the City's financial advisor was created for the selection process. The following selection criteria was used: . extensive experience in various financing structures such as Certificates of Participation (COPs), Tax Allocation Bonds (TABs), and Community Facilities Districts CFDs), . experience of assigned Project Managers and staff, . directly related experience in public/private partnerships and leasehold financing, . thorough understanding of the City's needs as demonstrated by a comprehensive analysis provided in the written proposals, . pricing/costs. After a comprehensive evaluation process, the interview panel selected a total of seven finns to be included in the pool that could act as Senior Manager or Co-Manager. For any given project 1-2 FEBRUARY 12, 2008, Item~ Page 3 of5 fmancing, one fIrm will be selected to act as Senior Manager and may contract with the other fIrms to co-manage if necessary. The Senior Manager will work with the City's fInancing team in formulating a debt fInancing strategy. Other duties include but are not limited to developing a sales strategy and marketing plan, assisting in structuring the debt issuance, making recommendations on the timing of the debt sale, maturity schedule and call provisions, analyzing and assisting in the evaluation of credit enhancement proposals, and assisting in preparing documents related to debt issuance. Not all fIrms in the pool will participate in each fmancing. However, it is possible that all of the fIrms will have the opportunity to participate in some capacity in at least one fInancing. Following is the alphabetical listing of the selection recommendation and a summary of the fIrms' profIles: . Bank of America . Citigroup . De La Rosa & Co. . Goldman Sachs & Co. . JP Morgan . Stone & Youngberg . UBS Bank of America Bank of America Securities, LLC, (BAS) is the investment banking, securities trading, and underwriting affiliate of Bank of America, N. A., the nation's second largest commercial bank in terms of total assets. BAS has a real estate fInancing capability that specializes in tax -supported bond issues (special taxes, assessments, mortgages, or tax increment). BAS also has specifIc experience in marketing mix-use development projects and offers a team of bankers with municipal fInance industry experience of over 20 years. BAS Public Finance is headquartered in New York City, but provides service to clients via a network of 23 investment-banking offices nationwide, including Irvine and Los Angeles. BAS also has three full-service underwriting, sales, and trading desks with one office in San Francisco. The fIrm has over $1.8 billion in excess net capital as of June 30, 2006. Citigroup The Company was formed by the merger of Traveler's Group and Citicorp in 1998 to form the largest fInancial services fIrm in the world. The fIrm is a leader in development and redevelopment fInance, and a national leader in tax-exempt hotel fInancings. Citigroup offers a team of bankers with municipal fInance industry experience of over 20 years and ranks as the number one senior manager of California debt since the year 2000. The fIrm has a long history of success serving their California clients through their offices in Los Angeles, San Francisco and Seattle. Currently, Citigroup's Municipal Securities Division consists of 220 public fmance bankers, 126 sales and trading professionals, and 62 fInancial product and credit specialists nationwide. Citigroup's excess net capital is $3.35 billion as of July 31, 2006. 1-3 FEBRUARY 12, 2008, Item~ Page 4 of 5 De La Rosa & Co. De La Rosa & Co. is a California-based investment banking services firm with full-service offices in Los Angeles and San Francisco. The firm is a top ranking municipal bond underwriter in California. De La Rosa & Co. is the only major firm serving California municipal issuers that focuses exclusively on the California municipal bond market. The firm has over 15 years of investment banking experience in bond underwriting, transportation financings, and redevelopment and land-secured projects. Goldman Sachs & Co. Goldman Sachs & Co. (Goldman Sachs) is a leading global investment banking and securities firm that provides a full range of investment banking and fmancing services, is based in New York, and maintains offices in over 20 different countries. The firm has maintained a Public Finance Department, the Municipal and Infrastructure Finance Group, for over half a century and is organized under regional groups with the Western Region Group based in their San Francisco and Los Angeles offices. The municipal finance team has over 15 years experience. Goldman Sachs has a wealth of experience in development-related financings. Goldman Sachs has been the lead manager on complex and innovative financings in the country for projects with limited dedicated revenue streams, has a special group which invests in real estate across the country, and has significant experience in real estate transactions in the municipal sector. The firm's excess net capital is $2.6 billion, and, unlike many firms, Goldman Sachs has no preset limits concerning the allocation of capital to their municipal underwriting. JP Morgan JP Morgan Chase & Co. (JP Morgan) is a global financial services company, is the third largest financial institution in the nation, and the fifth largest bank in the world. JP Morgan's Public Finance Group conducts its business through one of its three wholly-owned subsidiaries, JP Morgan Securities, Inc. The Public Finance Department is headquartered in New York and maintains 18 regional offices across the country. The Western Region Group is based in San Francisco with secondary offices located in Los Angeles. The firm has over 25 years experience in public finance with a wide array of senior-managed projects, including tax-exempt and taxable financings. The firm's excess net capital is $1.3 billion as ofJuly 31,2006. Stone & Youngberg Stone & Youngberg is California's largest regional investment banking firm specializing in municipal fmance. Founded in 1931, the firm has a rich history of providing investment banking and brokerage services to the State of California, local government entities, high net worth investors, and institutional investment funds. Stone & Youngberg is headquartered in San Francisco with offices throughout the State, including San Diego. With over 25 years experience in municipal finance, the firm has worked on redevelopment projects, tax allocation, and revenue bond issues, and special tax bond issues for public infrastructure needs. Stone and Youngberg has vast experience in community facility district (CFD) and assessment district financings. UBS UBS Securities, LLC (UBS), is a wholly-owned subsidiary of UBS AG, a publicly-traded company. UBS AG is incorporated and domiciled in Switzerland and is headquartered in New 1-4 FEBRUARY 12,2008, ItemL Page 5 of 5 York. UBS is a leading global securities and investment banking firm providing a full spectrum of products. The firm has extensive experience in transportation finance and has specialists located in California. UBS is also a leader in land secured and tax increment fmancing with offtces in Los Angeles and San Francisco and has a team with over 20 years experience in public finance. Additionally, UBS has extensive experience with multi-purpose issuers and convention center bonds and other related credits. UBS has an excess net capital of $4.6 billion as of June 30,2006. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council/Redevelopment Agency and conflict exists, in that Council/Redevelopment Agency Member Castaneda has property holdings within 500 feet of the boundaries of the Merged BayfrontlTown Centre I Redevelopment Project Area, and Council/Redevelopment Agency Members Rindone and Ramirez have property holdings within 500 feet of the boundaries of the Merged Redevelopment Project Area. FISCAL IMPACT There is no direct fiscal impact to the General Fund as a result of the recommended action. The fiscal impact upon future debt issues will vary depending on the size and type of the issue. All costs to be incurred will be paid solely from the proceeds of each particular transaction and therefore become part of the long-term debt cost of issuance. Prepared by: Nadine Mandery, Treasury Manager, Finance Department 1-5 RESOLUTION NO. 2008- JOINT RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ESTABLISHING A POOL OF INVESTMENT BANKING AND UNDERWRITING FIRMS FOR THE CHULA VISTA MERGED BA YFRONT/TOWN CENTRE I REDEVELOPMET PROJECT AREA WHEREAS, the Chula Vista Bayfront Master Plan (CVBMP) encompasses approximately 550 acres in the Merged Bayfront/Town Centre I Redevelopment project Area; and WHEREAS, staff anticipates that new development and redevelopment projects in the CVBMP will require between $178 million and $510 million in capital and infrastructure requirements; and WHEREAS, staff proposes to establish a pool of investment banking and underwriting firms to assist the City's financing team; and, WHEREAS, staff conducted a formal Request for Proposal process and ten proposals from national and regional municipal investment banking and underwriting firms were received; and WHEREAS, the selection panel recommends the following firms, listed in alphabetical order, to comprise the pool of investment banking and underwriting firms: Bank of America, Citigroup, De La Rosa & Co., Goldman Sachs & Co., JP Morgan, Stone & Youngberg, and UBS. WHEREAS, on September 27,2007, the Chula Vista Redevelopment Corporation adopted a resolution recommending that the City Council and the Redevelopment Agency establish a pool of these seven investment banking and underwriting firms. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista and the Redevelopment Agency of the City ofChula Vista that it establishes a pool of investment banking and underwriting firms for the Chula Vista Merged Bayfront/T own Centre I Redevelopment Proj ect Area. Presented by: Approved as to form by: Maria Kachadoorian Director of Finance I.-/~ tL /;" /O-c;ti r"-- Ann Moore City Attorney and Agency Counsel jc\AltomeyIELlSAIRESOS\Eslablish pool ofinvestme111 banking Joint Council and Agency Merged Bayfront-Town Centre '_02-12-08 doc 1-6 RESOLUTION NO. 2008- JOINT RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ESTABLISHING A POOL OF INVESTMENT BANKING AND UNDERWRITING FIRMS FOR THE CHULA VISTA MERGED REDEVELOPMENT PROJECT AREA WHEREAS, staff anticipates new development and redevelopment projects in the Merged Redevelopment Project Area; and WHEREAS, staff proposes to establish a pool of investment banking and underwriting firms to assist the City's financing team; and, WHEREAS, staff conducted a formal Request for Proposal process and ten proposals from national and regional municipal investment banking and underwriting firms were received; and WHEREAS, the selection panel recommends the following firms, listed in alphabetical order, to comprise the pool of investment banking and underwriting firms: Bank of America, Citigroup, De La Rosa & Co., Goldman Sachs & Co., JP Morgan, Stone & Youngberg, and UBS. WHEREAS, on September 27,2007, the Chula Vista Redevelopment Corporation adopted a resolution recommending that the City Council and the Redevelopment Agency establish a pool of these seven investment banking and underwriting firms. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista and the Redevelopment Agency of the City of Chula Vista that it establishes a pool of investment banking and underwriting firms for the Merged Redevelopment Project Area. Presented by: Approved as to form by: , Maria Kachadoorian Director of Finance ~tL Ann Moore City Attorney and Agency Counsel /~/~ c. lIAltOlney\ELlSA\RESOS\Estnb\ish p01l1 ofinveSlment ballkillg Joim Council and le::;~erged_02-t2-08,doC