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HomeMy WebLinkAbout2000-06-20; City Council; 15797; Infrastructure Financing Plan Carlsbad RanchAB# 15,797 MT& 6/20/00 DEPT. RM CIT- OF CARLSBAD - AGEND” BILL if3 13 TITLE: ADOPTION OF AN INFRASTRUCTURE FINANCING PLAN AND CREATION OF AN INFRASTRUCTURE FINANCING DISTRICT, AND AUTHORIZATION OF THE ISSUANCE OF BONDS TO CARRY OUT THE INFRASTRUCTURE FINANCING PLAN, FOR PARCELS 17 AND 18 OF THE CARLSBAD RANCH AMENDED SPECIFIC PLAN AREA. CITY MGR.~ I RECOMMENDED ACTION: Introduce Ordinance No. NS- 5 5 1 adopting an Infrastructure Financing Plan and creating an Infrastructure Financing District for parcels 17 and 18 of the Carlsbad Ranch Amended Specific Plan Area. Adopt Resolution No. 2000-201 authorizing the issuance of bonds pursuant to the Infrastructure Financing District Act to carry out the proposed infrastructure financing plan for parcels 17 and 18 of the Carlsbad Ranch Amended Specific Plan Area. ITEM EXPLANATION: On February 8,2000, Council (1) approved a Resolution of Intention to establish an infrastructure financing district for parcels 17 and 18 of the Carlsbad Ranch Amended Specific Plan Area; and (2) directed the City Manager to prepare an infrastructure financing plan pursuant to California Government Code Section 53395.14 for the proposed infrastructure financing district. INFRASTRUCTURE FINANCING DISTRICT (IFD): An IFD is a tax increment financing tool to fund certain public improvements. The proposed IFD would allow the use of property tax revenues generated from the LEG0 properties, after the formation of the District, to finance a portion of the cost of public works necessary for the expansion of the park on parcel 18 and the future development on parcel 17. The proposed IFD is an outcome of the efforts of “Team California”, a group of state, regional and local agencies who identified incentives to attract LEG0 to Carlsbad. An attempt to form an IFD to fund public ‘improvements that would otherwise be funded directly by LEG0 was a local incentive offered, and included in the 1996 development agreement between the City and LEGO. Unfortunately, uncertainties labout the legality of an IFD were not resolved until 1998, and by this time, improvements for which the IFD was originally intended were already in place. However, LEGOLAND expansions and LEGO’s hotel project will result in development impact fees for a variety of public improvements serving the area that remain to be constructed. The proposed IFD will reimburse LEG0 for some of those development fees. INFRASTRUCTURE FINANCING PLAN (IFP): The proposed infrastructure financing plan (IFP) ‘identifies the public facilities for which IFD funds are eligible and addresses the fiscal impact of the Infrastructure Financing District (IFD) on the City. The IFP was presented to Council at the public hearing on March 14,200O. This financing plan contemplated participation by both the City and the County to fund the IFD to a limit of approximately $3 million. The limit was based on the purpose of the proposed IFD - to reimburse LEG0 for some of the public improvement costs required for the establishment of the park and for which the IFD was originally intended. During the development of the park, these costs totaled $3 million. The County was included as a participating taxing agency based on the Board’s support of the City and LEG0 to build a LEGOLAND park in Carlsbad. Using the same ratio of property tax revenue allocated to the City and County for base year property taxes, Carlsbad’s share of the funds to be allocated to the IFD, or the total foregone tax increment to the City, is $1.76 million. The County’s share using the same ratio was identified as $1.44 million. IFP was revised after it was presented to Council on March 14,200O. At that meeting, staff shared Council the notification received from County staff that the IFP would not be taken forward to a oard of Supervisors meeting for consideration. In response, Council made clear their intent to proceed formation of the IFD, in fullillment of their commitment made to LEG0 as part of the incentive J Page 2 of AB #15,797 (6~20-00) .- schedule, and to limit the City’s participation to that share originally defined assuming County participation. As a result, the County share of $1.44 million proposed in the original IFP was subtracted, and the IFP was revised to delete both County participation and set the limit of the IFD to the City’s tax increment contribution of $1.76 million. A proposal to adopt the IFP was adopted on April 18,200O. The proposed IFP is shown as Exhibit “A” to Exhibit I and key points of the IFP are summarized below. Public Facilities Serving the IFD Area & Development Fees: l Eligible public improvements: The public works projects and facilities eligible for financing by an IFD include major roadway improvements, sewage treatment and water reclamation plants, water treatment and collection facilities, flood control projects, parks, solid waste disposal stations, and civic uses such as libraries. These facilities must serve both the IFD area and be of community-wide benefit. The eligible capital projects serving the IFD area and an area greater than the IFD have been identified from the projects listed in the 1999-2000 Capital Improvement Program and are listed in the Appendix of the IFP. l Development fees: The level of development impact fees for the LEGOLAND expansions and hotel project are estimated at $3.1 million (400-room hotel) and $5.4 million (700 room hotel). Proiection of Tax Increment Revenues l Life of IFD and tax increment limit: The life of the IFD is limited to 20 years. The tax increment limit of the IFD is $1.76 million; $200,000 of this total is to cover County costs associated with administering the property tax revenues for the IFD. l Timing of development and tax increment limit: The IFP estimates that the tax increment limit/reimbursement limit will be achieved in 5 years if a 700-room hotel is constructed and in 6 years if a 400-room hotel is built. Fiscal impact of the IFD on the Citv of Carlsbad l The IFP estimates that the City of Carlsbad will forego $1.76 million (future dollars) in property tax increment during the life of the district. l Reimbursement of development fees: The agreement to reimburse development fees is in the form of a bond issued by the IFD. The sole bondholder(s) will be the developer(s). The tax increment revenues from the District will be pledged for the 20-year term of the IFD to pay the principal amount of the . bond (equal to the eligible portion of the fees and assessments paid by the developer(s) minus County administrative costs and the cost of preparing and issuing the bond), without interest, not to exceed $1.76 million. Bonds- -- l On April 14,200O Council adopted a Resolution of Intention to issue a bond, which will be in the form of an agreement to reimburse development fees. Council may proceed with the issuance of the bond by adopting the resolution shown in Exhibit 2. Per IFD law, a landowner election was held on the proposals creating the IFD. The election was held May 1,200O and the voters in the District voted in favor of the proposed IFP, IFD and bond issuance. a Page 3 of AB #15,797 ^ 20-00) - NEXT STEPS: The remaining steps and tentative schedule for the IFD formation process are: 1. June 27: Second reading of the ordinance. 2. June 28: A validation action is filed. 3. July 27: The IFD is effective at the end of a 30-day referendum. ENVIRONMENTAL REVIEW: The Planning Director has determined that the environmental effects of this project have already been considered in conjunction with previously certified environmental documents (EIR 9 l-03, MEIR 93-O 1 and MEIR 94-O l), and therefore, no additional, or subsequent environmental evaluation will be required. A notice of determination will be filed. Supporting documentation for this determination is on file in the Planning Department. FISCAL IMPACT: The infrastructure financing plan assumes that the City will commit to the IFD 100% of tax increment revenue generated from the park expansions and hotel development. The limit of tax increment funds that can be allocated to the IFD is $1.76 million. The total foregone tax increment to the City is $1.76 million in future dollars. EXHIBITS: l . Ordinance No. NS-551 2. Resolution No. 2000-201 File: Library/agenda bills/IFD Ordinance 6-20 agenda bill 3 , 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 1: Recitals ORDINANCE NO. NS-551 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA ADOPTING AN INFRASTRUCTURE FINANCING PLAN AND CREATING AN INFRASTRUCTURE FINANCING DISTRICT FOR PARCELS 17 AND 18 OF THE CARLSBAD RANCH AMENDED SPECIFIC PLAN AREA A. The Legislature of the State of California has enacted a comprehensive statutory scheme, the Infrastructure Financing District Act (Government Code Section 53395 et seq.) (the “Act”), authorizing a city, county, or city and county to create an infrastructure financing district as a means of financing construction of public works and facilities for new development projects through the funding mechanism known as “tax increment financing” under which incremental increases in property taxes are allocated to finance public capital facilities associated with the district. B. On February 8, 2000, the City Council (“City Council”) of the City of Carlsbad (“City”) instituted proceedings for the creation of an infrastructure financing district (“Infrastructure Financing District”) for Parcels 17 and 18 of the Carlsbad Ranch Amended Specific Plan Area (“Property”) by adoption of a Resolution of Intention to Establish an Infrastructure Financing District pursuant to the Act. The City Council also directed the City Manager to prepare an ir&structure financing plan for the Property. C. The City Manager prepared an infrastructure financing plan for the Property (“Infi-astructure Financing Plan”), sent the Infrastructure Financing Plan to each landowner within the proposed Infrastructure Financing District, and made the proposed Infrastructure Financing Plan available for public inspection, as required by the Act. The Infrastructure Financing Plan is attached hereto as Exhibit A and incorporated herein by reference. D. On March 14, 2000, after first publishing notice as required by law, the City Council held an informational public hearing on the proposal to create the Infrastructure Financing District for the Property and to adopt the Infrastructure Financing Plan. E. As provided in the Act, the City Manager and staff have consulted with and met with representatives of the County of San Diego. F. Based on such consultation, the proposed Infrastructure Financing Plan has been modified to propose formation of the Infrastructure Financing District for the Property without allocation of the tax increment revenues of the County of San Diego or any other affected taxing agency except the City. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - G. On April 18, 2000, the City Council held a second public hearing on the proposal to create the Infrastructure Financing District and adopt the Infrastructure Financing Plan, as modified, after first publishing notice as required by law. Following the public hearing, the City Council adopted a Resolution Proposing Approval of an Infrastructure Financing Plan and Formation of an Infrastructure Financing District for the Property. H. Following the adoption of said Resolution, on May 1, 2000, a landowner election was conducted in the manner required by the Act with regard to the proposal to create the Infrastructure Financing District. The Property landowners voted in favor of creating the Int?astructure Financing District. I. The City Planning Director has determined that the environmental effects of adoption of the Infrastructure Financing Plan and creation of the Infrastructure Financing District have already been considered in conjunction with previously certified environmental documents (EIR 91-03, MEIR 93-01 and MEIR 94-Ol), and, therefore, no additional or subsequent environmental evaluation is required. J. The City Council has duly considered all terms and conditions of the proposed Infrastructure Financing Plan for the Property, as modified, and believes that the proposal to create the Infrastructure Financing District and adopt the proposed Infrastructure Financing Plan, as modified, is in the best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local law and requirements. K. The proposed Infrastructure Financing Plan complies with all of the requirements of the Act and all actions required by law have been taken by all appropriate persons and entities. Section 2: Ordinance NOW, THEREFORE, the City Council of the City of Carlsbad, California does ordain as follows: 1. The City Council hereby finds and determines that the foregoing recitals are true and correct. 2. The City Council hereby adopts the proposed Infrastructure Financing Plan, as modified, in substantially the form presented to the City Council, a copy of which is on file with the City Clerk, and hereby creates the Infrastructure Financing District with the full force and effect of law. 3. The Mayor is hereby authorized to execute this Ordinance. 4. The City Manager is hereby authorized to take any action and execute any and all documents and agreements necessary to implement the Infrastructure Financing Plan - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and Infrastructure Financing District. 5. The City Council hereby directs staff to file a notice of determination with the County Clerk of San Diego County within five (5) working days of adoption of the Infrastructure Financing Plan. EFFECTIVE DATE: This ordinance shall be effective thirty days after its adoption, and the City Clerk shall certify the adoption of this ordinance and cause it to be published at least once in a newspaper of general circulation in the City of Carlsbad within fifteen days after its adoption. INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City Council on the 20th day of -, 2000, and thereafter PASSED and ADOPTED at a regular meeting of the City Council of the City of Carlsbad on the day of , 2000, by the following vote, to wit: AYES: NOES: ABSENT: ATTEST: LORRAINE M.-WOOD, City Clerk File: Library/agenda bills/IFD Ordinance 6-20 agenda bill CLAUDE A. LEWIS, Mayor Matt Hall, Mayor Pro Tern 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 1: Recitals A. B. C. D. E. F. RESOLUTION NO. 2000-201 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA PROVIDING FOR THE ISSUANCE OF BONDS PURSUANT TO THE INFRASTRUCTURE FINANCING DISTRICT ACT TO CARRY OUT THE INFRASTRUCTURE FINANCING PLAN FOR PARCELS 17 AND 18 OF THE CARLSBAD RANCH AMENDED SPECIFIC PLAN AREA The Legislature of the State of California has enacted a comprehensive statutory scheme, the Infrastructure Financing District Act (Government Code Section 53395 & seq.) (the “Act”), authorizing a city, county, or city and county to create an infrastructure financing district as a means of financing construction of public works and facilities for new development projects through the funding mechanism known as “tax increment financing” under which incremental increases in property taxes are allocated to finance public capital facilities associated with the district. Pursuant to the Act, the City Council (“City Council”) of the City of Carlsbad (“City”) has adopted, or concurrently with this Resolution is adopting, an Ordinance Adopting an Infrastructure Financing Plan and Creating an Infrastructure Financing District For Parcels 17 And 18 of The Carlsbad Ranch Amended Specific Plan Area (“Property”). The Infrastructure Financing Plan proposes to assist in the financing of a portion of the cost of certain public works needed for the development of the Property by the reimbursement of a portion of one-time Development Impact Fees and assessments (collectively, the “Fees”) related to eligible capital projects serving the area of the Infi-astructure Financing District. The Infmstructure Financing Plan contemplates that the Fees will be paid by the developer of the LEGOLAND CALIFORNIA expansion and/or the developer of the proposed LEG0 hotel, at the time of building permit issuance, and that the Infrastructure Financing District will reimburse the eligible portion of these Fees, as tax increment funding fkom the Infrastructure Financing District becomes available over time, and that a bond will be issued to such developers to document the obligation of the Infrastructure Financing District to provide such reimbursement, subject to the limitations set forth in the Infrastructure Financing Plan. The sole purpose of the Infrastructure Financing District is to facilitate the reimbursement of a portion of the Fees. On April 18, 2000, the City Council by majority vote initiated proceedings to issue bonds pursuant to the Act by adoption of a Resolution Of Intent to Issue Bonds 7 1 2 3 4 5 6 7 0 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 20 G. H. I. J. - Pursuant to the Act. Said Resolution was published in accordance with the Act. Following the adoption of said Resolution, on May 1,2000, a landowner election was conducted in the manner required by the Act with regard to the proposal to issue the bonds. The landowners of the Property voted in favor of issuing the bonds. The City Planning Director has determined that the environmental effects of issuing the bonds have already been considered in conjunction with previously certified environmental documents (EIR 91-03, MEIR 93-01 and MEIR 94-Ol), and, therefore, no additional or subsequent environmental evaluation is required. The City Council has duly considered all terms and conditions of the proposed bond issuance and believes that the proposal to issue the bonds is in the best interests of the City and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local law and requirements. The proposed bond issuance complies with all of the requirements of the Act and all actions required by law have been taken by all appropriate persons and entities. Section 2: Resolution NOW, THEREFORE, be it resolved by the City Council of the City of Carlsbad, California as follows: 1. 2. 3. The City Council hereby finds and determines that the foregoing recitals are true and correct. The City Manager is hereby authorized to proceed with the issuance of the bonds and to take any other action and execute any and all documents and agreements necessary to issue the bonds, including, without limitation, the bond substantially in the form attached to this Resolution as Exhibit “A” (“Bond”). With reference to the bonds: a. The bond shall be issued in one series. b. The principal amount of the bond shall be an amount equal to that portion of the Fees actually paid in connection with the Property allocable to eligible public facilities minus the cost of the bond issuance and certain costs to be paid to the County of San Diego pursuant to the Act, not to exceed $1,760,000 or the tax revenues available during the term of the Infrastructure Financing District, whichever is less. The bond shall be interest free and without discount. c. The bond will bear the date of June 1,200O. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. d. The bond shall have no particular maturity date. e. The bond shall be denominated “Infrastructure Financing District for Parcels 17 and 18 of the Carlsbad Ranch Amended Specific Plan Area Series 2000.” f. The form of the bond shall be in the form of the Bond attached hereto as Exhibit A and incorporated herein by reference. g. The bond, in the form of the Bond attached to this Resolution, shall be executed by the City Manager. h. The bond shall be payable in lawful money of the United States of America. i. The bond shall be payable as set forth in the form of Bond. There is no requirement that the bond be registered. j. There is no requirement that the bond be called or redeemed, either with or without premium. The City Council hereby directs staff to file a notice of determination with the County Clerk of San Diego County within five (5) working days of adoption of this Resolution. APPROVED and ADOPTED at a regular meeting of the City Council of the City of Carlsbad on the 20th day of June , 2000, by the following vote, to wit: AYES: Council Members Hall, Nygaard and Kulchin NOES: None ABSENT: Council Members Lewis and Finnila , Q- CLA&DE A. LEWIS, Mayor Matt Hall, Mayor Pro-Tern ATTEST: /yg4ueG%*w RR&NE M. WOOD, City Clerk Library agendabills/IFD Ordinance 6-20 Agenda bill 4