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Home My WebLink About2009/06/16 Item 8CITY COUNCIL & REDEVELOPMENT AGENCY ~~~~~ AGENDA STATEMENT o-- - vG' `t7I~ ~ ,.~'~ . ~' .- -CITY OF '~~ CHULA VISTA JUNE 16, 2009, Item ITEM TITLE: RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ADOPTING THE SEVENTH AMENDMENT TO THE GATEWAY CHULA VISTA DISPOSITION AND DEVELOPMENT AGREEMENT (DDA) SUBMITTED BY: DEPUTY ~Y M.ANAGER/DEVELOPMENT SERVICES DIRECTO REVIEWED BY: CITY IvLANAGEI 4/STHS VOTE: YES ^ NO ~X SUMMARY The Gateway Chula Vista Disposition and Development Agreement (DDA) was approved June 6, 2000, for the development and operation of a phased First Class, First Quality mixed-use commercial office project with restaurant and retail components and common azeas. The first and second phases have been realized, however, the third and final phase will not meet the construction deadline of June 30, 2009. The Seventh .Amendment to the DDA provides for changes to reflect the current anticipated construction timeframe For Phase III. This amendment recommends the Phase III completion date be extended to December 31.2014. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed action for compliance with the California Environmental Quality Act (CEQA) and has determined that the proposed action is adequately covered in previously adopted Mitigated Negative Declaration IS- 99-24. Thus, no further environmental review or documentation is necessary. RECOMMENDATION Adopt the Resolution approving the Seventh Amendment to the Gateway Chula Vista Disposition and Development Agreement. BOARDS/COMMISSION RECOMMENDATION On June 11, 2009, the Chula Vista Redevelopment Corporation recommended that the Redevelopment Agency adopt the Resolution approving the Seventh Amendment to the Gateway Chula Vista Disposition and Development Agreement. g"-1 DISCUSSION The Gateway Chula Vista DDA Artachment No. 3 Schedule of Performance required that the construction of Phase III be completed by December 31, 2007. The Sixth Amendment to the DDA extended the completion date for construction of Phase III improvements to December 31, 2008, and authorized the Redevelopment Agency Executive Director to provide for additional extensions of time to perform of up to 12 months in the aggregate. Subsequently, the Executive Director extended the completion of Phase III to June 30, 2009. However, due to market conditions, the developer has experienced significant setbacks in obtainins fmancing for Phase III. To allow additional time for the construction of Phase III, the Seventh Amendment exrtends the construction completion date to December 31, 2014. The Developer has submitted an application requesting an amendment to the Gateway Specific Plan to mirror the above change and also to remove the requirement for a First Class, First Quality restaurant and to allow educational and training facilities. The Specific Plan amendment will be presented for consideration to the Chula Vista Redevelopment Corporation, Planning Comrnission and the City Council in the neaz future. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the Redevelopment Agency and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. CURRENT YEAR FISCAL IMPACT The approval of the Seventh Amendment to the DDA will not result in any expenditures or revenues in the current fiscal year. In 2010, Gateway Phases I and II will generate approximately $633,000 in new property tax revenue and $463,000 in gross tax increment for the City and Agency. ONGOING FISCAL IMPACT Currently there aze no identified future expenditures associated with approval of the item. The approval of the Seventh Amendment may result in future discussions regazding the possibility of Agency financial participation to address gap financing needs. The construction of Gateway Phase III will help result in new sales tax and tax increment revenue to the City and Agency. ATTACHMENTS 1. Resolution of the Redevelopment Agency adopting the Seventh Amendment to the Gateway Chula Vista Disposition and Development Agreement 2. Seventh Amendment to the Gateway Disposition and Development Agreement Prepared by: Diem Do, Senior Project Coordinator, Development Services Attachment 1 RESOLUTION N0. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ADOPTING THE SEVENTH AMENDMENT TO THE GATEWAY CHULA VISTA DISPOSITION AND DEVELOPMENT AGREEMENT (DDA) WHEREAS, the Redevelopment Agency and the Developer (Gateway Chula Vista LLC) are parties to that certain Disposition and Development Agreement ("DDA") dated June 6, 2000, as amended by that certain First Amendment to DDA ("First Amendment") dated September 25, 2001, as further amended by that certain Second Amendment to DDA ("Second Amendment") dated December 17, 2001, as administratively amended by that certain Third Amendment to DDA ("Third Amendment") dated April 1, 2002, by that certain Fourth Amendment to the DDA (`Fourth Amendment") dated April 1, 2003, by that certain Fifth Amendment to the DDA ("Fifth Amendment") dated November 18, 2003, and by that certain Sixth Amendment to the DDA (`Sixth Amendment") dated February 17, 2004. The DDA, First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment and the Sixth Amendment are collectively referred to herein as the DDA; and WHEREAS, the DDA relates to the development and operation of a phased First Class First Quality mixed-use commercial/office project with restaurant and retail components and common areas of up to 385.089 squaze foot, including afive-tier li00 space parking structure that spans all Phases of the Project; specifically the retail component will include up to 81.000 squaze feet with restaurants, financial institutions and other retail uses. Phase I includes 102,329 square feet in a five story office tower at the easterly portion of the Site, Phase II includes 132,334 square feet in a six story office tower, and Phase III will include li0,426 squaze feet in a six story office tower at the westerly portion ("Project"); and WHEREAS, timing of construction of the Project's Phase III Improvements has been delayed as a result of unfavorable overall mazket conditions and the effects of the recession on financial lending institutions. As a result, pursuant to Section 701.1 (d) of the DDA. Developer has requested an extension of time to complete construction of Phase III, and renegotiate the amount and timing of the Agency Participation and one or more terms and provisions of the DDA; and WHEREAS, Agency is willing to adjust Developers Schedule of Performance for completion of the Phase III construction subject to the terms and conditions set forth in the Seventh Amendment to the Gateway DDA; and WHEREAS, the Environmental Review Coordinator has reviewed the proposed action for compliance with the California Environmental Quality Act (CEQA) and has determined that the proposed action is adequately covered in previously adopted Mitigated Nesative Declazation IS-99- 24. Thus, no further environmental review or documentation is necessary. NOW, THEREFORE, BE IT RESOLVED the Redevelopment Agency of the City of Chula Vista does hereby approve the Seventh Amendment to the Gateway Chula Vista Disposition and Development Agreement (DDA) in the form presented. ~'-3 BE IT FURTHER RESOLVED, the Chairperson is authorized and directed to execute final forms of the Seventh Amendment, and Agency staff is authorized and directed to take all reasonable actions necessary to implement the same. Presented by: Gary Halbert Deputy City Manager/Development Services Manager Approved as to form by: ~~ Bart C. Miesfeld v~~G~/ General Counsel g"'~