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HomeMy WebLinkAbout1995-07-18; City Council; 13253; AGMT APN 205-060-04 Bank of America negotiation agreement CARLSBAD HIGHLANDS Carlsbad Highlands Conservation Bank CFD No. 1 CONSERVATION BANK CT 82-12 HIGHLAND DR NUISANCEAB# /3,25 3 TITLE: NEGOTIATION OF AGREEMENT WITH BANK OF AMERICA REGARDING CARLSBAD HIGHLANDS MTG- 3 c 1 8 e 45 CONSERVATION BANK DEPT. CD cT f’J -/’ DEPT. CITY A CITY N a ULB 5 Ip= bb. 2 2 0 F 0 J 0 z 0 0 a 3 - a fig CITY OF CARLSBAD - AGENDA BILL , RECOMMENDED ACTION: That the City Council direct staff to negotiate an agreement with the Bank of Americ to the Council with a draft agreement. ITEM EXPLANATION: The Bank of America has recently established a Conservation Bank on property for as the Carlsbad Highlands project. Background information regarding the establis Conservation Bank is provided in Exhibit 1. The purpose of the Conservation Bank mitigation for public and private projects that impact coastal sage scrub and other h: Diego County. The Bank of America is interested in obtaining relief from all future Community Fac how this might be accomplished. The Bank has indicated that if relief from CFD Nc be accomplished beginning with the coming tax year, they would offer the City 20 right-of-way for Cannon Road Reach 4 and 20 mitigation credits from the Conser The preferred method for obtaining permanent relief from CFD No. 1 taxes is ti property to one of the non-taxable categories. It is anticipated that the Bank of Ar applying for a zone change for the property, but it is too late for a zone changc taxable status of the property for the coming tax year. One way to provide relief fc tax year would be for the City to pay the CFD No.1 taxes on the property for on estimated CFD tax on the property for the 1995-96 tax year is approximately $73, Staff is recommending pursuing the proposal from the Bank of America by negc agreement that would specify the actions to be taken by each party. When a drs has been developed, it will be brought to the City Council for formal action. FISCAL IMPACT! The fiscal impact as a result of authorizing staff to negotiate with the Bank of Ame the amount of staff time used in the negotiation. In the event the negotiations lead to an agreement, the fiscal impact of the agreen for the City to pay the applicable CFD No. 1 vacant land taxes on the net taxable a Highlands property for FY 1995-96. This amount is presently estimated to be $ precise amount of the tax will be determined during the next 30 days. In exchange payment of CFD taxes on the property for one year, Bank of America would giv acres of land for the right-of-way for Cannon Road and 20 mitigation credits. (CFD) No. 1 special taxes for this property, and there have been discussions with SI B e Page Two of Agenda ill No. 13,253 In evaluating the Bank's offer of right-of-way and credits, only a rough estimate of 1 the land and mitigation credits can be provided at this time. (One mitigation credit one acre of land, except that the recipients of credits are receiving only the mitigatiot not fee title or any other rights to the land. The words "credit" and "acre" are interchangeably.) The precise value of the proposed agreement will be based on thc for the mitigation credits on the open market. Thus far, the only sale has been the i Caltrans for 83 acres for $1.1 million ($13,253 per acre). It is anticipated that pric credits on the open market may be higher, but that will not be known until more 5 Both the right-of-way and the credits that would be given to the City would be valued rate because the value of all the property is its use for mitigation purposes. Based of $13,000 per creditlacre, the 20 acres of right-of-way and 20 credits woulc approximately $520,000 (40 acres x $1 3,000 per acre). If the City does not obtain the right-of-way for the road by entering into an agreem Bank, it would probably be necessary to purchase the right-of-way at a later ti Highlands property never develops, it would not be possible to obtain the right-of-\i the City's usual development exaction process. The City (or anyone wishing to ci road) would then need to purchase the right-of-way for the fair market value at that F The proposed source of funds to pay the approximate $73,000 in CFD No. 1 taxes i would be the General Fund Reserves. The credits would then be used to provide n City capital projects as needed. If the capital projects are not General Fund projects would be sold by the General Fund to the appropriate other fund at the current 1 mitigation credits at that point in time. For example, if 5 mitigation credits were nee by a project funded from CFD No. 1, funds from that project's account would pay Fund the 1997 market value of 5 credits. Thus, the General Fund will be reimbursed for the payment of 1995-96 CFD taxes. Projects that might utilize the credits inch Road Reaches 1 & 2, the municipal oolf course, Veterans Memorial Park, extensior Avenue, and master drainage facilities. An itemization of the City's mitigation nc provided in the follow-up to this agenda bill. EXHIBITS: 1. Summary of Carlsbad Highlands Conservation Bank e 0 EXH I B I' CARLSBAD H I G H LAN DS CON SE RVAT I ON BAN K The property formerly known as the Carlsbad Highlands is located in Growth Managem Zone 15 in the northeastern corner of the City, as shown on the attached map. - property is approximately 270 gross acres. In 1982 a tentative subdivision map \ approved for the property. In 1986 the project was brought into compliance with Groi Management, and the unit count was established at 740 units. The developer at that til the Buie Corporation, was unable to construct the project and eventually lost the prope The property was returned to the original lender, Bank of America, approximately one y ago. City staff met with Bank representatives on several occasions to discuss the prope Bank representatives indicated that federal regulations require them to dispose of returi assets within five years. Bank of America officials subsequently determined that it would not be feasible to pur the previously approved tentative map for the property within their five year timeframe disposal of the property. The project 7 considered premature when it was first approved, and it is no more feasible now. The is far removed from infrastructure in Carlsbad, and it would not be economically feasi to extend facilities to the site until adjacent properties develop. In view of th circumstances, the Bank has decided that the best use of the property is for halc mi ti gat ion pu rposes. One of the Bank's first actions was to sell approximately 83 acres of the property to Caltr as mitigation for impacts related to construction of the new Highway 76 in Oceanside. that time, the City expressed concern that the right-of-way for Cannon Road not precluded. This concern was addressed by the Bank and the resource agencies so that Caltrans mitigation parcel does not infringe on the potential alignment of Cannon Rc Additionally, the Bank has recorded an easement for the road in anticipation of I conveyance of the right-of-way to the City. Staff is confident that these actions pro\ satisfactory assurances for Cannon Road. The remainder of the property (approximately 180 acres) is now being placed i Conservation Bank that can be used to provide multi-species mitigation for proj throughout San Diego County. This Conservation Bank will apparently be the first o kind, at least in our region. City staff believes that the Conservation Banking concept good one that can lead to a win-win outcome for all of the parties. Because of the potential for development of the property in the near term, the Conservation Bank will conflict with the City's economic development efforts. The benefits to the City summarized below: b The City concurs with this assessment. Property is put into the proposed Carlsbad Habitat Management Plan (HMP) presc system without the cost of public acquisition. e 0 Exhibit 1 Page - Two b The Conservation Bank will facilitate more efficient mitigation arrangements for b private and public projects. The property is located immediately adjacent to the City's Lake Calavera property i the habitat area which was dedicated by the William Lyon Company as mitigation Villages Q & T of Calavera Hills. The addition of the Highlands property will prov a very large, contiguous area of preserved habitat. The Conservation Bank will count towards meeting the habitat conservation threshc of the HMP. Elimination of the old subdivision map on the property will "free up" 740 fut dwelling units for use on other properties in the Northeast Quadrant of the C Several property owners have already expressed interest in requesting the use of units that will become available. b b b Staff has had discussions with Bank representatives regarding a number of points of mu1 interest. Continuation of these discussion would be expected to result in an agreem between the City and the Bank which would address the following points: 1. Carlsbad Community Facilities District (CFD) No. 1 taxes and the potential for a z( change on the Highlands property to eliminate these taxes. The potential for the City to receive the right-of-way for Cannon Road and mitigai credits from the Conservation Bank. Assurance from the resource agencies that the conserved land will count tow< Planning Program. Provisions for including a segment of the Citywide Trails system along the alignmer Cannon Road. 2. 3. meeting Carlsbad's conservation goals under the Natural Communities Conserval 4. 0 e 11**1*111~ -- m 0 1 mi