HomeMy WebLinkAbout2009/06/23 Item 13
CITY COUNCIL &
REDEVELOPMENT AGENCY
AGENDA STATEMENT
~(f?- CITY OF
~ CHULA VISTA
J1.JNE 23. 2009, Item 13
. -
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 NTY MANAGERlDEVELOPMENT
D IRECTO R(J' '" ~ If.
CITY MANAGERt-
SERVICES
REV1EWED BY:
4/5THS VOTE: YES D NO 0
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 areas. The fIrst and
second phases have been realized, however, the third and fmal 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.
El'.'VIRONMENTAL 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 RECOMMENDA nON
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.
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DISCUSSION
The Gateway Chula Vista DDA Attachment No.3 Schedule of Performance required that the
construction of Phase III be completed by December 31, 2007. The Sixth Amendment to the DDA
ex1ended 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 obtaining fmancing for Phase III. To allow
additional time for the construction of Phase III, the Seventh Amendment ex1ends the construction
completion date to December 31, 2014.
Tne 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 Commission
and the City Council in the near future.
DECISION MAKER CONFLICT
Staff has reviewed the properly holdings of the Redevelopment Agency and has found no
properly holdings within 500 feet of the boundaries of the property which is the subject of this
action.
CURRENT YEAR FISCAL IMP ACT
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 $462,000 in gross tax increment for the
City and Agencv.
. - ~
ONGOL~G FISCAL IMPACT
Currently there are no identified future expenditures associated v,ith approval of the item. The
approval of the Seventh Amendment may result in future discussions regarding 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 AJIlendment to the
Gateway Chula Vista Disposition and Development Agreement
~
Seventh Amendment to the Gateway Disposition and Development Agreement
Prepared by Diem Do, Senior Project Coordinator, DfNelopment Services
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RESOLUTION NO. 2009-
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE.
CITY OF CHULA VISTA ADOPTING THE SEVENTH
AMENDMENT TO THE GA TEW A Y 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 square foot, including a five-tier 1300 space parking structure that spans all
Phases of the Project; specifically the retail component will include up to 81,000 square 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 150,426 square 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 market conditions and the effects of the recession on
[manciallending institutions. As a result, pursuant to Section 70 1.1 (d) of the DDA, Developer has
requested an extension of time to commence and 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 Developer's Schedule of Performance for
commencement and completion of the Phase III construction subject to the terms and conditions set
forth in the Seventh Amendment to the Gateway DDA; and
WHEREAS, Agency and Developer acknowledge that there may be a financial GAP in the
development of Gateway Phase III and, notwithstanding section 801 of the DDA, agree to negotiate
in good faith in identifying the amount of the GAP that the Agency may consider funding and the
timing of any Agency Participation, pursuant to Section 800 of the DDA; and
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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 Negative Declaration 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.
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:
Approved as to form by:
/ il<' I /,
(.[.c",----'"
Bart C. Miesfeld
General Counsel
,\)t. _/1 ( .
.~. - - I- {<:rL
Gary Halbert
Deputy City ManagerlDevelopment Services Manager
13-4
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
A1'-iTI APPROVED AS TO FORNI BY THE CITY
ATTOR1'lEY"'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Dated:
SEVENTH A1'\1ENDMENT TO
DISPOSITION A1'ID DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA AND
GATEWAY CHULA VISTA 2, LLC AND
GATEWAY CHULA VISTA 3, LLC FOR
GATEWAY PHASE III CONSTRUCTION PERFOR1\1AJ.'lCE
EXTENSION, RESTAURANT AND EDUCATION
CO:MPO!\.TENT AMENDME1'-il
13-5
SEVENTH AMENDMENT TO
DISPOSITION A-~ DEVELOPMENT AGREEMENT
(Gateway ?hase III Const~ction Performance Extension Amendment)
This SEVENTH AMENDMENT TO DISPOSITION AND DEVELOPMENT
AGREEMENT ("Seventh Amendment") is ent.ered into as of July 1,
2009, (\\Effective Datell or \\Date of Seventh Amendment") by and
bet.ween the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a
public body corporate and politic ("Agency") and GATEWAY CHULA
VISTA 2, LLC, a California Limited Liability Company and
GATEWAY CHULA VISTA 3, LLC, a California Limited Liability
Company (collectively "Developer") .
A. The Agency and the Developer are parties to that
certain Disposition and Development Agreement (nDDA") dated June
6, 2000, as amended by that certain First Amendment to DDA
(nFirst Amendment.") dated September 25, 2001, as further amended
by that cert.ain Second Amendment to DDA ( "Second Amendment")
dat.ed Dec~-nber 17, 2001, as ad.'Ilinistratively 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 _~endment
to the Dm'\. ("Fifth Amendment") dated November 18, 2003, and by
that certain Sixth Amendment to the DDA ("Sixth Amendment")
dated February 17, 2004. The DDA, First A'Ilendment, Second
Amendment, Third Amendment, Fourth Amendment, Fifth Amendment
fu""ld the Sixth Amendment are collectively referred to herein as
the DDA.
B. The DDA relates to the development and operation of a
phased First Class First Quality mixed-use commercial/office
project with restaurant and retail component:s and common areas
of up to 385,089 square foot, including a. five-tier 1300 space
parking structure that Spfu""lS all Phases of the Project;
specifically t:he ret:ail component. will include up to 81,000
square feet: wit:h restaurants, financial institutions a.rtd 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 150/425 square feet in a six story office
cower at the westerly portion (nprojecc").
C. Capitalized terms used in this Seventh Amendment are
defined and set forth in the DDA, lli""lless separately defined in
this Seventh .~endment, inclusive of the Attac0~ents thereto.
Gatew~y Chula Vista Page 1.
Seventh .2Unend11ent to Disposition and Development Agreement
13-6
D. Timing of construction of the Project's Phase III
Improvements has been delayed as a result of unfavorable overall
market conditions ~"d the effects of the recession on fin~~cial
lending institutions. As a result, pursuant to Section 701.1 (d)
of the DDA, Developer has requested an exta~sion of time on the
construccion commencement and completion date for Phase III, to
renegotiate the amOW"t ~~d timing of Agency Participation and to
renegotiate of one or more terms ~~d provisions of the DDA.
E. Agency is willing to adjust Developer's Schedule of
Performance for completion of the Phase III construction subject
to the terms and conditions set forth herein.
F. Pursuant
Amendment requires
to Section 1315 of
approval by the Agency
the DDA,
Board.
this
Seventh
NOW,
which are
cove:2ants
Agency and
THEREFORE, in consideration of
a subst~~tive part of the
and consideration contained
Developer agrees as follows:
the foregoing recitals,
Seventh Ame.....1dment, the
~~d exchanged herein,
1. Agency and Developer acknowledge that there is a
financial G2U' in the development of Gateway Phase III
and agree to negotiate the amount ~"d timing of the
Agency Participation, ~~d the renegotiation of one or
more terms ~nd provisions of the DDA pursuant to
Section 800 of the DDA,
2. DDA Attach..TIlent No.3, Schedule of Performance,
Milestone No. 40 Commencement of Construction and
Development of the Applicable Phase Improvements is
hereby amended ~~d restated as follows:
Commencement of Construction ~~d
Applicable Phase Improvements.
commence construction of the Phase
or before December 31, 2012.
Development of the
Developer shall
III Improvements on
3.
DDA Attachmem: No.3, Schedule of
Milestone No. 43 Schedule of Performance
Completion is hereby amended and restated
Performance,
for Phase III
as follows:
Completion of Construction of Phase III Improvema~ts.
Developer shall have completed 100% of the Phase III
Improv~~ents of the Project on or before December 31,
2014 .
Gateway.Chula Vista Page 2
Seventh Amendment co Disposi cion and Development Agreement
13-7
4.
Notwithstanding Sections 1, 2 and 3, DDA
802.5 through 802.7 are hereby stricken from
and replaced w~~h the following Section 802.5:
Sections
the DDA
Any request for future Agency fina.-'lcial participation
shall be submitted by Developer to Agency in writing.
5.
Other Provisions. Except
herein, all other teTInS and
shall remain in full force and
as expressly
conditions of
effect.
provided
the DDA
[Signature Block for Seventh Amendment begins on Next Page]
Gateway Chula Vista Page 3
Seventh Amendment to Disposition and Development Agreement
13-8
Signature page to Seventh Amendment to
Gateway Disposition and Development Agreement
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13-9
D. Gregory Scott, Chairman Manager
ATTEST:
By:
Agency Secretary
Approved as to form:
Approved as to form:
By:
By:
Agency General Counsel
Developer
Counsel
to
Gateway Chula vista Page 5
Seventh Amendment to Disposi tion and Development Agreement
13-10