HomeMy WebLinkAboutAgenda Statement 1987/09/15 Item 6
CITY COUNCIL AGENDA STATEMENT
Item h
Meeting Date 9/15/87
ITEM TITLE: RESOLUTION~..~~1~~pAuthorizing the Mayor to
enter into a Cooperation and Reimbursement
Agreement with the Redevelopment Agency of
the City of Chula Vista
SUBMITTED BY: Community Development Director~~
Finance Director
REVIEWED BY: City Manager (~,~~ "' -~
~/11~~ (4/5ths Vote: YES NO X )
The Agency's participation in the Town Centre II
Redevelopment Project is predicated upon the City providing
the Boys' Club parcel at Fifth and I Streets, the closure of
Fifth Avenue, and a cash contribution guaranteed by the
City's General Fund. The Redevelopment Agency on the other
hand is expected to reimburse the City over a period of
years as tax increments grow and accumulate. The purpose of
this agreement is to create a legal instrument between the
• Redevelopment Agency and the City so that as tax increments
and other sources of funds become available the City will be
reimbursed.
RECOMMENDATION: Approve the Cooperation and Reimbursement
Agreement between the Redevelopment Agency and the City.
BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable
DISCUSSION:
The Redevelopment Agency has an obligation to provide
$1,300,000 to the County of San Diego for the provision of
Superior Courts at the South County Center at Third and H
Streets. This obligation is a result of negotiations with
the County in order that tax increments for a period of 25
years may be used exclusively for repayment of Agency debt.
In addition, the City is providing the Boys' Club property
at Fifth and I Streets along with the several fillet parcels
to the Homart Company. The valuation of these properties is
$1,077,000 as determined by an independent appraisal of the
subject property. In addition, Certificates of
Participation have been sold in order to finance the
Agency's $7,150,000 obligation under the Disposition and
Development Agreement with the Homart Development Company.
• The Certificates of Participation are a general obligation
of the City. In order for the City to be reimbursed by the
Redevelopment Agency it is necessary to place in writing the
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Page 2, Item 6
Meeting Date~'g/i5/Q7
• obligation of the Redevelopment Agency to the City. The
subject agreement, therefore, establishes that the Agency
will reimburse the City for: (1) the Boys' Club and
adjacent fillet parcels; (2) the $1.3 million contribution
to the South Bay Superior Courts; (3) for those payments
covered by the City sales tax revenue generated from the
project for the debt service on the Series A Certificates of
Participation which represents the Agency's share of the
project cost. The interest rate that the Agency will pay
the City will be at the prevailing rate equal to the City
Treasurer's average portfolio yield calculated semi-
annually.
FISCAL IMPACT:. It is anticipated that a significant
increase in Shopping Center sales due to the expanded center
can be expected in the form of sales tax. This additional
sales tax will initially satisfy the City's obligation along
with the Agency's tax increment; both of these sources will
be sufficient to service the Series A Certificates of
Participation. Any excess property tax increment will be
utilized to pay back the City for the Boys' Club property
and the $1.3 million for the Courts until the City is made
whole.
In addition,
for the Boys'
• the property
Fifth Avenue.
(CoopAgmt)
the Homart Company will pay the City $750,000
Club site upon the transfer of the title of
and $500, 000 to the City upon the vacation of
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Dated ~~~~~~
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