HomeMy WebLinkAbout2022-07-26; City Council; ; Status of Negotiations to Relocate San Diego Gas & Electric’s North Coast Service Center to the City-Owned Parking Lot Properties at The Shoppes at Carlsbad Shopping CentCA Review _CB___
Meeting Date: July 26, 2022
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Gary Barberio, Deputy City Manager, Community Services
gary.barberio@carlsbadca.gov, 442-339-2822
Celia Brewer, City Attorney
celia.brewer@carlsbadca.gov, 442-339-2890
Subject: Status of Negotiations to Relocate San Diego Gas & Electric’s North Coast
Service Center to the City-Owned Parking Lot Properties at The Shoppes
at Carlsbad Shopping Center
District: 1 and 2
Recommended Action
Receive a status update from San Diego Gas & Electric representatives and provide direction on
negotiations to relocate SDG&E’s North Coast Service Center to the city-owned parking lot
properties at The Shoppes at Carlsbad shopping center.
Executive Summary
SDG&E representatives will provide a status update presentation to the City Council outlining
the company’s position regarding The Shoppes at Carlsbad property as the new site for its
North Coast Service Center, in keeping with a motion approved by the City Council on May 23,
2022. SDG&E recently informed the city that it has found the site at The Shoppes is not
acceptable, and staff are seeking the City Council’s direction on how to proceed in the
negotiations.
Discussion
On April 20, 2021, the City Council authorized staff to work with Brookfield Properties, NRG
Energy, and San Diego Gas and Electric to relocate SDG&E’s North Coast Service Center from its
current location near the northeast corner of Carlsbad Boulevard and Cannon Road to a portion
of the city-owned parking lot properties at The Shoppes at Carlsbad. (Exhibit 1) This relocation
would facilitate the transfer of the service center’s current 16.37-acre site, as well as two other
properties, to the City of Carlsbad, as anticipated in the Settlement Agreement dated as of
July 26, 2022 Item #11 Page 1 of 44
January 14, 2014 Between and Among The City of Carlsbad, Carlsbad Municipal Water District,
Cabrillo Power I LLC, Carlsbad Energy Center LLC, and San Diego Gas and Electric Company.1
Representatives from NRG, and SDG&E and Brookfield – the owner of the Shoppes at Carlsbad
– attended that April 20 City Council meeting and expressed their support for the effort to
explore relocating the service center somewhere on The Shoppes site.
The City Council received a status update on the negotiations to move the service center to The
Shoppes property on May 23, 2022. Staff provided an update of the status of these negotiations
and the actions that had been taken to date to secure a mutually acceptable site. Brookfield,
NRG and SDG&E also provided input to the City Council as part of the presentation. The City
Council then approved a motion directing staff to return to the City Council with an update on
July 26, 2022, with SDG&E to provide information regarding its current position regarding The
Shoppes as a relocation site. The City Council also requested additional information regarding
the SDG&E-owned Lot 11 site, a site on the north side of Cannon Road and east of Interstate 5,
and other alternative locations, and whether they could be possible new sites for the service
center.
Since that May 23 City Council meeting, the city has met with SDG&E and had several
conversations regarding The Shoppes relocation site.
The settlement agreement requires the parties to agree on a relocation site, whether that is
The Shoppes location or another site. Staff continue to believe all parties in this negotiation
stand to gain the benefits from the proposed relocation of the service center that were detailed
in the attached City Council staff report of May 23, 2022. (Exhibit 1, which includes the related
City Council staff report of April 20, 2022). We continue to believe it is essential to secure
SDG&E’s cooperation to realize the benefits represented to the community in the settlement
agreement. Staff believe the parties, working in good faith, can resolve all issues associated
with a chosen relocation site.
Despite the efforts and the negotiations between the parties in evaluating The Shoppes
relocation site, SDG&E has very recently communicated to staff that The Shoppes site is not
acceptable to SDG&E. We expect SDG&E’s representatives to inform the City Council about the
company’s concerns regarding The Shoppes site, as well as its commitment at the highest
executive level to making another SDG&E-owned site work for the relocation of the service
yard, as agreed to in the settlement agreement.
Staff will therefore be seeking direction from the City Council to consider whether Lot 11, a
relocation on the current site, or on any other SDG&E-owned parcel would be a feasible
alternative for the remaining parties, SDG&E, NRG, and the City of Carlsbad. The parties also
recognize the need to return to the City Council in a timely manner and are committed to
present the City Council with a recommended option in approximately eight to 10 weeks.
SDG&E's final decision on this matter will also allow Brookfield to pursue other options for The
Shoppes site. Staff are appreciative of Brookfield's cooperation in exploring the SDG&E service
yard relocation option.
1 This settlement resolved years of opposition and litigation between the city, SDG&E, and NRG over the power
plant.
July 26, 2022 Item #11 Page 2 of 44
Fiscal Analysis
There is no fiscal impact from this item, and no funding is being requested at this time.
Next Steps
Following any City Council direction, staff will continue negotiations with the other parties and
may return to City Council in open or closed session for further direction as the negotiations
proceed.
Environmental Evaluation
This action does not require environmental review because it does not constitute a project
within the meaning of the California Environmental Quality Act under California Public
Resources Code Section 21065 in that it has no potential to cause either a direct physical
change or a reasonably foreseeable indirect physical change in the environment.
Public Notification
This item was noticed in accordance with the Ralph M. Brown Act and was available for public
viewing and review at least 72 hours prior to scheduled meeting date.
Exhibits
1. May 23, 2022, City Council staff report, with exhibits (including the April 20, 2022, City
Council Staff Report)
July 26, 2022 Item #11 Page 3 of 44
CA Review _CB___
Meeting Date: May 23, 2022
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Gary Barberio, Deputy City Manager, Community Services
Gary.barberio@carlsbadca.gov
Celia Brewer, City Attorney
Celia.brewer@carlsbadca.gov
Subject: Update on Status of Negotiations to Relocate SDG&E’s North Coast Service
Center to the City-Owned Parking Lot Properties at the Shopping Center
Known as The Shoppes at Carlsbad
District: 1 and 2
Recommended Action
Receive status update and provide direction on negotiations to relocate SDG&E’s North Coast
Service Center to the city-owned parking lot properties at the shopping center known as The
Shoppes at Carlsbad.
Executive Summary
On April 20, 2021, the City Council authorized staff (Exhibit 1) to work with Brookfield
Properties, NRG Energy (NRG), and San Diego Gas and Electric (SDG&E) to relocate the SDG&E
North Coast Service Center (Service Center) from its current location near the northeast corner
of Carlsbad Boulevard and Cannon Road to a portion of the city-owned parking lot properties at
The Shoppes at Carlsbad to facilitate the transfer of the 16.37 acre Service Center site, as well
as two other properties, to the City of Carlsbad as anticipated in the “Settlement Agreement
dated as of January 14, 2014 Between and Among The City of Carlsbad, Carlsbad Municipal
Water District, Cabrillo Power I LLC, Carlsbad Energy Center LLC, and San Diego Gas and Electric
Company” (Settlement Agreement).
Brookfield, NRG, and SDG&E attended the April 20, 2021, City Council meeting and supported
the effort to explore relocating the Service Center somewhere on The Shoppes site. Staff will
provide a verbal update of the status of these negotiations and the actions taken to date to
secure a mutually acceptable site. SDGE, Brookfield, and NRG will also be provided five minutes
to address the City Council as part of the presentation should they so choose.
May 23, 2022 Item #1 Page 1 of 10
Exhibit 1
July 26, 2022 Item #11 Page 4 of 44
Discussion
Background
As you may recall, SDG&E approached the city with the proposal that was eventually captured
in the Settlement Agreement. Due to the early closure of the San Onofre Nuclear Generating
System (SONGS), the Governor of California was concerned about energy reliability. NRG,
against the city’s strong opposition, had secured a permit approval from the California Energy
Commission for the construction of a new combined-cycle plant, but had not entered into a
power purchase agreement (PPA) with SDG&E. The Governor pressured SDG&E to enter into a
PPA with NRG or else Southern California Edison would be urged to do so. SDG&E desired to
purchase power from a plant generating energy through a different technology than NRG’s
approved combined-cycle plant, but due to years of opposition and litigation between the city,
SDG&E, and NRG over the permitted power plant, recognized the City of Carlsbad would not
agree to support a permit amendment request at the California Energy Commission for the
change in technology to a peaker-plant without receiving substantial community benefit. NRG
committed to demolition of the then existing Encina Powers Station. SDG&E offered to relocate
its Service Center so that the city could take title to the existing Service Center property along
with two other SDG&E properties, essentially allowing the return of the property from
industrial to coastal uses. In the Settlement Agreement, the transfer was made possible by
having NRG pay the costs of the relocation, with the signed Settlement Agreement committing
NRG to paying $22.5 million for the relocation, thereby saving ratepayers money.
The history of the Settlement Agreement is important because SDG&E has successfully secured
on the front end its preferred energy-generating technology in the now complete NRG-built 500
mega-watt peaker-plant, entered into a PPA with NRG to buy the power supplied by the new
plant, kept Southern California Edison out of its service area, and has a commitment from NRG
of $22.5 million in funding to relocate the service center, thereby saving ratepayers millions of
dollars. The City now seeks to realize its benefits from the service center relocation under the
Settlement Agreement. Time is of the essence in this negotiation because Brookfield and NRG
need to start their respective projects.
Conditional Use Permit CUP 11-07
Associated with the Settlement Agreement and SDG&E’s current Service Center operation is the
issue of Conditional Use Permit CUP 11-07. The City Council originally approved CUP 11-07 on
May 8, 2012, to allow the operation of a 2,850 square foot mobile building on the 16.27-acre
SDG&E Service Center site. Typically, Carlsbad discourages temporary buildings, limiting them
to five years absent an extraordinary circumstance. Here, to enable SDG&E to continue to work
with the city towards a relocation of the Service Center, on Sept. 26, 2017, staff recommended
and City Council approved a five-year extension of CUP 11-07.
SDG&E is currently seeking approval of a second five-year extension to the CUP to allow the
continued operation of the mobile building on the Service Center site. Staff cannot recall
another occasion where the city allowed a temporary building for a 15-year term. Finality on
relocation of the Service Center would enable staff to make an appropriate recommendation
consistent with the City’s codes.
May 23, 2022 Item #1 Page 2 of 10
July 26, 2022 Item #11 Page 5 of 44
Summary
While the parties have met multiple times throughout the year and have been able to resolve
numerous challenges and issues, we have yet to secure SDG&E’s commitment to move forward
with relocation of the Service Center to The Shoppes site. We remain hopeful SDG&E will
commit to relocate to the Shoppes site soon.
If the parties are unable to reach agreement on relocation of the Service Center, the city will
not take title to the properties identified in the Settlement Agreement. As noted in the
attached April 2021 staff report, the City would receive a $10 million from NRG and SDG&E
would forego the $22.5 million towards the service center.
Staff continues to believe in and support the benefits to all parties in this negotiation as
identified in the attached City Council Staff Report of April 20, 2022. We believe it is essential to
secure SDG&E’s cooperation to realize the benefits represented to the community in the
Settlement Agreement. The Settlement Agreement requires the parties to agree on a relocation
site. Working in good faith, we believe the parties have solved or are close to solving all issues
associated with the new site.
Fiscal Analysis
No additional funding is being requested at this time.
Next Steps
Following any City Council direction, staff will continue negotiations with the other parties and
may return to City Council in open or closed session for further direction as the negotiations
proceed.
Environmental Evaluation (CEQA)
Pursuant to Public Resources Code section 21065, this action does not constitute a "project"
within the meaning of the California Environmental Quality Act in that it has no potential to
cause either a direct physical change in the environment, or a reasonably foreseeable indirect
physical change in the environment, and therefore does not require environmental review.
Public Notification and Outreach
This item was noticed in accordance with the Ralph M. Brown Act and was available for public
viewing and review at least 72 hours prior to scheduled meeting date.
Exhibits
1. April 20, 2021, City Council Staff Report and Resolution No. 2021-090
May 23, 2022 Item #1 Page 3 of 10
July 26, 2022 Item #11 Page 6 of 44
Meeting Date: April 20, 2021
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Gary T. Barberio, Deputy City Manager
gary.barberio@carlsbadca.gov, 760-434-2822
Celia A. Brewer, City Attorney
celia.brewer@carlsbadca.gov, 760-434-2891
Subject: Authorize Negotiations to Relocate SDG&E’s North Coast Service Center
to the City-Owned Parking Lot Properties at the Shopping Center Known
as The Shoppes at Carlsbad and Appropriate Funds for Professional
Services
District: 1 and 2
Recommended Action
Adopt a resolution:
•Authorizing staff to work with Brookfield Properties, NRG Energy and San Diego Gas &
Electric to relocate the SDG&E North Coast Service Center from its current location near
the northeast corner of Carlsbad Boulevard and Cannon Road, to a portion of the city
owned parking lot properties at The Shoppes at Carlsbad to facilitate the transfer of the
service center’s current site, as well as other properties, to the City of Carlsbad as
anticipated in the “Settlement Agreement dated as of January 14, 2014 Between and
Among The City of Carlsbad, Carlsbad Municipal Water District, Cabrillo Power I LLC,
Carlsbad Energy Center LLC, and San Diego Gas & Electric Company”
•Appropriating funds in an amount not to exceed $100,000 to retain the professional
services of Kosmont Companies
Executive Summary
On Jan. 14, 2014, the City Council (with Resolution No. 2014-010) and the Carlsbad Municipal
Water District Board (Resolution No. 1487) approved a settlement agreement that resolved
longstanding disagreements between several parties related to the decommissioning and
demolition of the existing power plant known as Encina Power Station and construction of a
new plant known as Carlsbad Energy Center.
Among other things, the settlement agreement anticipated the relocation of SDG&E’s North
Coast Service Center, which is located near the northeast corner of Carlsbad Boulevard and
Cannon Road [Settlement Agreement Section 5.1]. If the center is relocated in accordance with
April 20, 2021 Item #6 Page 1 of 7
Exhibit 1
May 23, 2022 Item #1 Page 4 of 10
July 26, 2022 Item #11 Page 7 of 44
the terms of the settlement agreement, NRG would contribute up to $22.5 million to SDG&E for
the relocation and reconstruction of a new service center [5.4], the City of Carlsbad would take
ownership of certain properties totaling 24.5 acres, including the current SDG&E North Coast
Service Center site [5.7], and the city and NRG would work in good faith to consider a joint
development strategy for the power plant site and the service center site [6.2(b)].
The city has worked tirelessly with SDG&E to identify a mutually acceptable relocation site but
has not yet been successful. Any selected service center relocation site must be approved by
the California Public Utilities Commission, and SDG&E’s obligations under the settlement
agreement are contingent on such approval [2.3(c)].
At the time the city entered into the settlement agreement, the parties anticipated the SDG&E-
owned Parcel 11, located east of I-5 and north of Cannon Road, would fulfill the terms of the
settlement agreement if a more acceptable alternative could not be found. Unfortunately, the
parties have determined it would be too expensive and time-consuming to develop Lot 11
based on its challenging topography and sensitive resources and that the cost of constructing
the service center on the site would greatly exceed NRG’s allotted financial contribution and
violate the revenue neutrality requirement of the relocation terms [5.1(c)].
The demolition of the Encina Power Station is proceeding, and the settlement agreement
commits NRG to move forward with redevelopment plans for the site. NRG’s ability to do so
would be greatly enhanced if the NCSC relocation issue is resolved. The settlement agreement
ties all below ground demolition and remediation obligations to the redevelopment of the site.
In recent discussions with NRG, SDG&E and Brookfield Properties, staff have identified a
possible solution to the issue of relocating the service center and are bringing the matter
before the City Council for its consideration and direction.
Discussion
Background
The settlement agreement requires the service center’s relocation to be revenue-neutral for
SDG&E ratepayers, so the city has been reviewing city-owned properties to see if any could
meet the criteria for a new site for the service center. The city owns approximately 67 acres
surrounding the Shoppes, a regional shopping center owned by Brookfield. The city’s properties
are burdened by certain deed restrictions limiting their use to parking lot purposes only.
However, Brookfield is interested in expanding uses at the Shoppes site to include housing and
other potential uses on the city’s properties, which present a number of opportunities.
Based on preliminary discussions with SDG&E, NRG and Brookfield, there is a willingness to
enter exploratory negotiations regarding the potential relocation of the North Coast Service
Center to the city properties at the Shoppes in exchange for, among other possibilities, a
transfer of the remaining portions of the city properties to Brookfield on mutually acceptable
terms.
Potential benefits
City staff believe this transaction has the potential to provide benefits to the public and to the
other parties if the parties work together to relocate the service center to the Shoppes site. The
following is a partial list of these benefits
April 20, 2021 Item #6 Page 2 of 7
May 23, 2022 Item #1 Page 5 of 10
July 26, 2022 Item #11 Page 8 of 44
Benefits to the City of Carlsbad
•The city could receive the benefits it bargained for in the City Council-approved settlement
agreement, including taking title to approximately 19 acres at the northeast intersection of
Carlsbad Boulevard and Cannon Road as well as additional property identified in the
settlement agreement [5.7].
•City could realize its long-term desire to move the service center off a prime coastal
property.
•Among other potential uses, the city could use this site to increase public safety by building
a much-needed fire station and lifeguard headquarters west of the railroad tracks. The city
has no fire stations west of the tracks and the lifeguards are currently based at Fire Station
1.
•Housing on the city properties would help meet the allocation of housing that state law
requires the city to provide for over the next eight years in its Housing Element, a
component of its General Plan, and may provide increased flexibility for housing decisions
throughout the city.
•If the city takes ownership of the SDG&E property, NRG would be committed to a joint
development strategy with the city, giving the city greater influence over what happens on
both redevelopment sites.
Benefits to NRG
•Moving the service center off its current site would help optimize the adjacent
powerplant site for its redevelopment by NRG.
•Resolving this final item in the settlement agreement allows NRG to move forward in
completing its obligations under the settlement agreement.
Benefits to SDG&E
•Would get a new service center, replacing one decades old.
•Cost of building a new, modern service center would be subsidized by NRG, saving the
utility’s ratepayers $22.5 million.
Benefits to Brookfield
•Could get use of city property surrounding the existing mall buildings for housing and
other uses.
•Could potentially secure greater finality in future land use decisions related to the
Shoppes.
•May be able to realize the “smart growth” potential of the site, allowing for new
transportation alternatives.
•City’s access to infrastructure financing and other governmental funding programs could
benefit redevelopment of the site.
This potential relocation would involve a complex, multi-party transaction. Yet staff believes if
the city works in alignment with all parties it can maximize public benefits to the city and
potentially create increased housing, transportation and revenue potential for all parties.
April 20, 2021 Item #6 Page 3 of 7
May 23, 2022 Item #1 Page 6 of 10
July 26, 2022 Item #11 Page 9 of 44
Recommendations
Staff recommend the City Council appropriate funds in an amount not to exceed $100,000 to
retain the services of Kosmont Companies to assist the city in these negotiations. Kosmont
Companies specializes in public-private partnerships, redevelopment and creative use of city
tools to create value and revenue streams. The cost of the agreement with Kosmont Companies
would not exceed $100,000, so the city manager would be the awarding authority for the
agreement under Carlsbad Municipal Code Section 3.28.040(C)(2).
City Council authorization of this item would allow staff to begin conversations and pursue
preliminary concurrence on key transaction points related to the transfer, development and/or
reuse of properties, including the city-owned properties. These conversations may include
consideration of delivery of infrastructure and community amenities associated with the
various properties and the potential disposition, exchange and/or leasing of properties,
including consideration of private and public funding, financing mechanisms and/or districts
and other governmental funding programs.
Approval of this item is not a commitment to transact or change any zoning or generate a
project under the terms of the California Environmental Quality Act. This item may be brought
back to the City Council in closed session for direction on price and terms of the real estate
transaction and to open session for direction on non-privileged matters. Both Brookfield and
NRG are committed to seeking extensive public input prior to planning ultimate use of the sites.
Fiscal Analysis
Staff recommend the City Council appropriate funds in an amount not to exceed $100,000 from
the City Council Contingency fund to the Community Services Branch Administration operating
budget to retain the professional services of Kosmont Companies.
Next Steps
Staff will enter into a professional services agreement with Kosmont Companies and begin
negotiations with the other parties and may return to City Council in open or closed session for
further direction as the negotiations proceed.
Environmental Evaluation
The recommended action does not constitute a "project" within the meaning of the California
Environmental Quality Act under California Public Resources Code Section 21065 because it has
no potential to cause either a direct physical change in the environment, or a reasonably
foreseeable indirect physical change in the environment. Therefore, the action does not
require environmental review.
Public Notification and Outreach
Public notice of this item was posted in keeping with the state's Ralph M. Brown Act and it was
available for public viewing and review at least 72 hours before the scheduled meeting date.
Exhibits
1.City Council resolution
April 20, 2021 Item #6 Page 4 of 7
May 23, 2022 Item #1 Page 7 of 10
July 26, 2022 Item #11 Page 10 of 44
April 20, 2021 Item #6 Page 5 of 7
May 23, 2022 Item #1 Page 8 of 10
July 26, 2022 Item #11 Page 11 of 44
RESOLUTION NO. 2021-090
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING STAFF TO WORK WITH BROOKFIELD
PROPERTIES (BROOKFIELD), NRG ENERGY (NRG), AND SAN DIEGO GAS &
ELECTRIC (SDG&E) TO RELOCATE THE SDG&E NORTH COAST SERVICE
CENTER (NCSC) FROM ITS CURRENT LOCATION NEAR THE NORTHEAST
CORNER OF CARLSBAD BOULEVARD AND CANNON ROAD, TO A PORTION OF
THE CITY OWNED PARKING LOT PROPERTIES AT THE SHOPPES AT CARLSBAD
(SHOPPES), AND APPROPRIATE FUNDS IN AN AMOUNT NOT TO EXCEED
$100,000 TO RETAIN THE PROFESSIONAL SERVICES OF KOSMONT
COMPANIES
WHEREAS, on Jan. 14, 2014, the City Council of the City of Carlsbad adopted Resolution 2014-
010 approving a Settlement Agreement between and among the City of Carlsbad (City), the Carlsbad
Municipal Water District (CMWD), Cabrillo Power I UC and Carlsbad Energy Center LLC (collect ively,
NRG), and San Diego Gas & Electric (SDG&E), related to the decommissioning and demolition of the
existing power plant known as Encina Power Station (EPS) and construction of a new plant known as
Carlsbad Energy Center (Settlement Agreement); and
WHEREAS, among other things, the Settlement Agreement anticipated the relocation of
SDG&E's North Coast Service Center (NCSC), which is currently located near the northeast corner of
Carlsbad Boulevard and Cannon Road [5.1]; and
WHEREAS, if relocated in accordance with the terms of the Settlement Agreement, NRG would
contribute $22.5 million to SDG&E for the relocat ion and reconstruction of a new service center [5.4],
City would take title to certain properties totaling approximately 24.5 acres [S.7J, and City and NRG
would work in good faith to consider a joint development strategy for the Encina Redevelopment Site
and the NCSC site [6.2(b)J; and
WHEREAS, despite considerable, good-faith efforts, City and SDG&E have not been able to
identify a mutually acceptable relocation site; and
WHEREAS, the demolition of EPS is proceeding according to the commitments contained in the
Settlement Agreement, however, NRG's ability to move forward with redevelopment plans for the site
would be greatly enhanced if the NCSC relocation issue is resolved; and
WHEREAS, the Settlement Agreement requires relocation of NCSC to be revenue neutral for
SDG&E ratepayers; and
April 20, 2021 Item #6 Page 6 of 7
May 23, 2022 Item #1 Page 9 of 10
July 26, 2022 Item #11 Page 12 of 44
WHEREAS, City has identified approximately 67 acres of City owned properties surrounding the
Shoppes, a regional shopping center currently owned by Brookfield, that could meet the NCSC
relocation criteria; and
WHEREAS, City has engaged in preliminary discussions with SDG&E, NRG and Brookfield
regarding possibilities for relocating NCSC to a portion of the City owned properties surrounding the
Shoppes, and all parties have been receptive to the idea of engaging in negotiations; and
WHEREAS, these potential relocation negotiations would involve a complex, multi-party
transaction that could hel.p the parties to fulfill·the terms of the Settlement Agreement in a manner
which will provide significant public benefit; and
WHEREAS, an Indemnification and Hold Harmless Agreement between Brookfield and the City,
indemnifying the City against any potential claims arising out of the City's participation in such
negotiations, including any alleged violations of the existing Deed Restrictions will be executed; and
WHEREAS, Kosmont Companies specializes in public-private partnerships, redevelopment and
creative use of city tools to create value and revenue streams; and
WHEREAS, the specialized expertise and experience of Kosmont Companies will be beneficial to
the City in the negotiation process and will help optimize the potential public benefits associated with
the relocation.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That the City Council authorizes city staff to work with Brookfield, NRG and SDG&E on a
plan to relocate NCSC from its current location near the northeast corner of Carlsbad
Boulevard and Cannon Road, to a portion of the city owned parking lot properties at the
Shoppes in order to facilitate the transfer of the current NCSC site, as well other
properties, to the City of Carlsbad as anticipated in the Settlement Agreement.
3. That the Deputy City Manager, Administrative Services is authorized to appropriate
funds in an amount not to exceed $100,000 from the City Council Contingency fund to
the Community Services Branch Administration operating budget to retain the
professional services of Kosmont Companies.
April 20, 2021 Item #6 Page 7 of 7
May 23, 2022 Item #1 Page 10 of 10
July 26, 2022 Item #11 Page 13 of 44
4. That staff will return to the City Council in closed session as necessary for direction on
price and terms of the real estate transaction and to open session for direction on non-
privileged matters as the negotiations proceed.
5. That this resolution does not commit the City to transact or rezone or generate a project
under the California Environmental Quality Act.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 20th day of April, 2021, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Hall, Blackburn, Acosta, Bhat-Patel, Schumacher.
None.
None.
MATT HALL, Mayor
~~~~ fvv
BARBARA ENGLESON, City Clerk
(SEAL)
July 26, 2022 Item #11 Page 14 of 44
Tammy Cloud-McMinn
From:
Sent:
To:
Cc:
Subject:
Attachments:
Good Morning,
Mavis K Anguiano <Mavis@enactpartners.com>
Monday, May 23, 2022 10:39 AM
City Clerk; Council Internet Email
Enact Partners
All Receive -Agenda Item# 2
For the Information of the:
CITY COUNCIL
Date$3/JJ.cA ~cc .,,.,,---
CM.L.ACM _ CM(3);::;------
Letter to City of Carlsbad City Council regarding relocation of SDG&E North Coast
Service Center
Letter -MSchumacher to CC 5-23-22 -signed.pdf
On behalf of Michael Schumacher, please find the attached letter regarding Relocation of SDG&E North Coast Service
Center being addressed today at 4pm at the Special City Council Meeting.
If you have any questions don't hesitate to contact Michael Schumacher directly. Thank you.
Sincerely,
Mavis K. Anguiano
Office Administrator
Main Office: (760) 516-7776
Direct: (760) 338-2575
mavis@enactpartners.com
www.EnactPartners.com
5927 Priestly Drive, Suite 206
Carlsbad, California 92008
Linkedln Profile
~en act
partners
'p guardian fund
**Be aware! Online banking fraud is on the rise. If you receive an email containing WIRE TRANSFER INSTRUCTIONS, call
your point of contact at Enact Partners immediately to verify the information prior to sending funds**
1
July 26, 2022 Item #11 Page 15 of 44
May 23, 2022
City Council, City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Via: clerk@carlsbadca.gov; council@carlsbadca.gov
Re: Relocation of SDG&E North Coast Service Center
Dear Honorable Mayor and City Council Members:
Relocating industrial uses along the coast was a priority during my service as a Carlsbad City
Councilmember, and well before. The removal of the Encina Power Station was a significant
step in that direction. Likewise, relocating SDG&E's North Coast Service Center opens up the
opportunity to reposition scarce coastal land in a way that will better serve our county and the
region.
As Carlsbad grows, so too does the need for City emergency services west of the railroad tracks.
Plus, relocating the SDG&E site presents countless opportunities for our community. This
includes, in part, affording Carlsbad residents the opportunity to participate in creating a plan
for this rare coastal property.
I urge you to continue pursuing all of the City benefits in the settlement agreement. This
includes urging SDG&E to agree to the Brookfield site or to be responsible for locating an
alternate site. I also urge all parties to establish reasonable time frames to complete the
relocation.
Thank you for your service.
Michael Schumacher (May 23, 202210:08 PDT)
Michael Schumacher
July 26, 2022 Item #11 Page 16 of 44
Tammy Cloud-McMinn
From:
Sent:
To:
DeAnn Weimer <dweimer318@yahoo.com>
Monday, May 23, 2022 11 :01 AM
City Clerk
Subject: Comments on Power Plant May 23 Special Council Meeting
May 23, 2202
Carlsbad City Council
1200 Carlsbad Village Dr.
Carlsbad, CA 92008
Re: Power Plant Settlement
Dear Mayor Hall and Council Members:
All Receive -Agenda Item # _L
For the Information of the:
CITY COUNCIL
Date';!f'/~ VCC /
CM _ACM ✓ DCM (3) ✓
Tonight, as you consider efforts to further the settlement of the 2014 power plant
agreement, the city's options seem limited largely to a bad faith claim against San Diego
Gas & Electric. Apparently, the only number SDG&E was actually committed to was the
$10 million it would pay to walk away from the agreement. Carlsbad did a deal and has no
way to secure the proposed "benefits" to the city without further litigation.
As residents, we really have no way to assess this situation, because we have been kept in
the dark. Should we not have learned by now that public work should be done in the
sunshine as much as possible? This process has been too opaque to maintain trust among
the parties themselves, and certainly between the city and its residents.
After all of this time, Carlsbad residents deserve full disclosure, i.e. the unredacted
agreements and proposals among all parties to the lawsuit and land owners and interests
impacted by the power.plant site itself, the relocation sites, the land surrounding the entire
Agua Hedionda Lagoon and the various land swaps, zone changes, etc., proposed. This
information should include the unredacted contracts between Rick Caruso's
representatives ahd others with an interest in these parcels or land touching these parcels
and SDG&E or other government entities.
1
July 26, 2022 Item #11 Page 17 of 44
Of course, litigation and settlements require confidentiality, but there is a point when the
public needs to know. Citizens are in the dark. That is not acceptable. Carlsbad residents
deserve respect and transparency is the foundation of respect. Thank you.
Regards,
De'Ann Weimer
6606 Fiona Place
Carlsbad, CA 92011
2
July 26, 2022 Item #11 Page 18 of 44
Tammy Cloud-McMinn
From:
Sent:
To:
Cc:
Subject:
Dear Carlsbad City Council,
Lela Panagides <lela@panagides.com >
Monday, May 23, 2022 12:14 PM
Council Internet Email
City Clerk
Comments on Power Plant May 23 Special Council Meeting
Imagine if you will that Carlsbad is named one of the must-stop destinations for enjoying the beautiful Pacific
coastline with views, parks, trails, and outdoor recreation. If you have been to Point Lobos State Natural
Reserve in the Carmel area, you know just how rare and remarkable it is to have places to stop along the
Pacific Coast Highway to reenergize and be inspired by the beauty of our natural environment.
As you continue your work as our elected leaders, keep in mind that every decision you make can have long-
lasting impact on generations to come. Your decisions today can change the look and use of our precious
coastline. Our natural world is disappearing at an alarming rate and leaders at all levels can work proactively
together with citizens, private businesses, and government to help protect, preserve, and enhance our natural
spaces.
And, remember that although there is no price tag we can place on these priceless spaces, we can quantify the
number of visitors we can attract who seek out places of natural beauty and respite which are increasingly
rare. These visitors also patron our existing hotels, restaurants, and shops. Open spaces, parks, and
accessible coastline are critical drivers of economic prosperity and protecting them is an investment not
only in the health and vitality of our city's finances but also the health and well-being of our visitors and
residents.
Please help put Carlsbad on the map as a Pacific Coast Highway Stop. Commit to using land to increase park
space, especially along our coast.
Best regards,
Lela Panagides
1
July 26, 2022 Item #11 Page 19 of 44
POINT OBOS S ATE
NATUR RESERVE
P ij i C a t H . h y top
2
July 26, 2022 Item #11 Page 20 of 44
Tammy Cloud-McMinn
From:
Sent:
To:
Cc:
Subject:
Sam Ward <sam@wardforcarlsbad.com>
Monday, May 23, 2022 1 :00 PM
Council Internet Email
City Clerk
Comment re: May 23 Special Council Meeting
Dear Mayor Hall and Councilmembers -
I encourage you to hold SDG&E to the spirit of the 2014 agreement. The City of Carlsbad was a good partner
with SDG&E in entering into the 2014 agreement and pacing the way for the construction of the peaker plant.
We must demand that SDG&E be a good partner now in working with the City on a land swap that protects the
vital coastal space at the power plant site for future use by and for the citizens of Carlsbad.
The Council will be making decisions in the very near term that will dictate public access to, and use of, the last
remaining undeveloped coastal space in Carlsbad. I hope the Council will remain laser-focused on preserving,
protecting, and enhancing open space for the benefit of our community. Gaining control of the Encina site
and reaching an agreement regarding the relocation of the SDG&E service yard to property adjacent to Plaza
Camino Real is a critical step in that effort.
Sam Ward
2438 Jefferson Street
Carlsbad, CA 92008
1
July 26, 2022 Item #11 Page 21 of 44
Tammy Cloud-McMinn
From:
Sent:
To:
Cc:
Subject:
May 23, 2202
Carlsbad City Council
1200 Carlsbad Village Dr.
Carlsbad, CA 92008
hopen51@att.net
Monday, May 23, 2022 1:19 PM
Council Internet Email
City Clerk
Special Council Meeting May 23, 2022 re Power Plant Settlement
Re: Power Plant Settlement
Dear Mayor Hall and Council Members:
What is important to our community? Isn't that what guides us to make important decisions?
Time and time again, when our City initiates surveys, what you hear is "Open Space" as a
number one priority. Please take a hard look at our treasured coastline and our coastal zone
properties. They are beautiful and irreplaceable. It is time for our City Council to respect
them and to respect the wishes of the vast majority of your constituents. The City of Carlsbad
must take sole possession of these properties and ensure zoning to keep them from
development.
Unfortunately, regarding the Power Plant, our Council has made another bad deal with
SDG&E. It is up to you to fix it. This property must be retained and must be zoned for
community use . That means not a firehouse, and not a lifeguard center. Both would have
negative impact on Cannon Park.
1
July 26, 2022 Item #11 Page 22 of 44
Last, it is time to act with more transparency. We talk about transparency but see little of it
when it comes to protection of our open spaces, and when it comes to dealings with
developers. I still remember seeing Mayor Hall at a Coastal Commission Meeting in May of
2016, asking for an update to the General Plan that would allow for the Caruso Mall,
defeated by a vote of the community just a few brief months prior. Somehow, I need to
know that something like that will never happen again.
Trying to be optimistic,
Hope Nelson
Carlsbad resident
CAUTION: Do not o en attachments or click on links unless ou reco nize the sender and know the content i
2
Update on Status of Negotiations to Relocate
SDG&E’s North Coast Service Center to the
City-Owned Parking Lot Properties at The
Shoppes at Carlsbad
Gary T. Barberio, Deputy City Manager
Celia A. Brewer, City Attorney
May 23, 2022July 26, 2022Item #11 Page 23 of 44
Background
•Settlement Agreement approved by City
Council on Jan. 14, 2014
•Between and among: City of Carlsbad, NRG
and SDG&EJuly 26, 2022Item #11 Page 24 of 44
July 26, 2022Item #11 Page 25 of 44D.esslin=ii!>ll P~ 1
Prop=-.-.<! Ga!rl'S>a:1
EneJ"9y Genter P~F-Ct.
NRG Prop2rry
.Enanai Po_,. Stao.tk>n
SDG&E Subsi3'i"11 &
Swii:::hrard::;
r---, SDG&E Norih C<>a.:st
L-.....1 35!.rv.ibe Cen.f5'r
SDG&E North Coast Service Center
•City & SDG&E work together to find a “mutually
acceptable” relocation site; subject to SDG&E specs
& cost neutrality
•NRG to fund up to $22.5 million
•If successful, City takes ownership of SDG&E parcels;
City & NRG work on joint development strategy
•If not successful, NRG pays City $10 millionJuly 26, 2022Item #11 Page 26 of 44
July 26, 2022Item #11 Page 27 of 44NRG
c:::::J SDG&E
1 -A qua No Shore P'arcel
2 -Fishing Beach
3 -Hubbs Site
4 -Bluff A re a
5-South Pow er Pl ant
6 -SDG&E Service Center
7 -Cannon P'ark
SDG&E Locational Criteria
•Within Carlsbad, west of ECR
•Good access (freeway’s, major arterials,
service area)
•Relatively flat, rectangular in shape
•10-12 acres
•30-32K sq ft of buildingJuly 26, 2022Item #11 Page 28 of 44
July 26, 2022Item #11 Page 29 of 44Carlsbad
Desalination Pfant
Proposed Carlsbad
Energy Center Project
NRG Property
Encim, Power Station
SDG&E Substaion &
sw;tch Y<>rds
July 26, 2022Item #11 Page 30 of 44
Terminate Relocation Efforts
•NRG pays $10 million to the City
•Staff resources limited to monitoring & enforcing
remaining provisions
•Readily accomplished -NRG saves $12.5 million;
SDG&E, loses $22.5 million towards a new CenterJuly 26, 2022Item #11 Page 31 of 44
Terminate Efforts
•City would not take ownership of SDG&E parcels
•NRG & City would not have opportunity to pursue joint
development strategy
•NRG will have a more constrained redevelopment site
•SDG&E forfeits $22.5 million for new Service Center;
costs transferred ratepayersJuly 26, 2022Item #11 Page 32 of 44
July 26, 2022Item #11 Page 33 of 44
July 26, 2022Item #11 Page 34 of 44
July 26, 2022Item #11 Page 35 of 44
Pursue Relocation of SDG&E’s NCSC
to a City Owned Site
April 20, 2021, Carlsbad City Council directed staff to
pursue relocation to:
The City-Owned Parking Lot Properties at
The Shoppes @ Carlsbad -Brookfield PropertiesJuly 26, 2022Item #11 Page 36 of 44
July 26, 2022Item #11 Page 37 of 44
Pursue Relocation at The Shoppes
Benefits:
•City gets Settlement Agreement benefits; SDG&E parcel(s), joint development strategy with NRG; possible public safety site
•Housing on The Shoppes site advances City RHNA needs, provides flexibility throughout City
•Brookfield could get use of city properties surrounding the existing mall buildings
•NRG is keenly interested in better redevelopment site
•SDG&E would benefit from a new service center July 26, 2022Item #11 Page 38 of 44
July 26, 2022Item #11 Page 39 of 44D.esslin=ii!>ll P~ 1
Prop=-.-.<! Ga!rl'S>a:1
EneJ"9y Genter P~F-Ct.
NRG Prop2rry
.Enanai Po_,. Stao.tk>n
SDG&E Subsi3'i"11 &
Swii:::hrard::;
r---, SDG&E Norih C<>a.:st
L-.....1 35!.rv.ibe Cen.f5'r
Conditional Use Permit CUP 11-07
•CC approved CUP on May 8, 2012 – 5-year limit
–2,850 sq ft mobile building for training needs
•1st 5-year CUP extension approved by the CC on
Sept. 26, 2017
•SDG&E is requesting 2nd 5-year CUP extensionJuly 26, 2022Item #11 Page 40 of 44
July 26, 2022Item #11 Page 41 of 44
1
North County Service Center
Relocation Update
Presentation to the Carlsbad City Council
May 23, 2022July 26, 2022Item #11 Page 42 of 44
2
North Coast Service Center
Supporting our mission to provide
safe and reliable service
Site facts:
•Serves 250,000 customers
•Communities served include Carlsbad, Encinitas, Del Mar, Rancho
Santa Fe,Vista, Fallbrook, Camp Pendleton and Oceanside
•Critical emergency services hub
•219 employees
•Serves 3,516 miles of distribution and transmission gas lines
•Serves 2,934 miles of OH and UG electrical distribution lines
•19 Substations
•148 CircuitsJuly 26, 2022Item #11 Page 43 of 44sos/' 1111///a/11/1/EM
3
Joe Gabaldon
Public Affairs Manager
jgabaldon@sdge.comJuly 26, 2022Item #11 Page 44 of 44
Tammy Cloud-McMinn
From:
Sent:
To:
Cc:
Subject:
July 26, 2022
City Council
1200 Carlsbad Village Dr.
Carlsbad, CA 92008
DeAnn Weimer <dweimer318@yahoo.com>
Tuesday, July 26, 2022 12:12 PM
City Clerk
Gary Barberio; Kyle Lancaster
All Receive -Agenda Item# J1
For the Information of the:
_ £1!'f_ COUNCIL
Date7/d!:!fJJCA vcc__:::-
CIOI D ALIOI . D DCIOI (SJ_::_
City Council Meeting: Staff Report SDG&E North Coast Service Center Comments
G
Re: Report/Status of Negotiations to Relocate SDG&E's North Coast Service Center to the
City-owned Parking Lot Properties at the Shoppes at Carlsbad
Dear Mayor Hall and City Council Members,
Citizens for North County greatly appreciates the extensive efforts put in by the city to
secure the removal of the power plant and the relocation of the substation, resulting in
potential opportunities for expanded open space and improved parkland access to the
coastline. However, the assumption that there will be zero input from the community on
the location of a fire station and/ or a lifeguard headquarters is disturbing. We encourage
you to place that desire on the backburner until you have the benefit of citizen input.
Finally, we fear that placing another $100,000 in taxpayer money into consultant fees when
there is no indication SDG&E has changed its tune, or abandoned its kick-the-can-down-
the-road strategy reeks of wishful thinking at best and at worst desperation and throwing
good money after bad. If these negotiations are indeed "serious," then they should include
the trails on the South Shores of the Agua Hedionda Lagoon as well. We urge you to table
this request until SDG&E provides "proof of life" to Carlsbad, i.e., concrete assurances that
it will deliver on this and other commitments within the city. Thank you.
Regards,
De'Ann Weimer
on behalf of Citizens For North County
CAUTION: Do not open attachments or click on links unless you reco nize the sender and know the content i
safe.
1
Update on Status of Negotiations to Relocate
SDG&E’s North Coast Service Center to the
City-Owned Parking Lot Properties at The
Shoppes at Carlsbad
Gary T. Barberio, Deputy City Manager
July 26, 2022
Background
•Settlement Agreement approved by City
Council on Jan. 14, 2014
•Between and among: City of Carlsbad, NRG
and SDG&E
'-Desal'Jhatfan P= 1
Prop=sed Galrts,a:1
.Enel'9y Cenfer P rujecf.
NRG Prope-riy
Endn" PoKer Stat.fan
=G&E Si,b-sf3!fan &
Swir::,h )'ards
r---, SDG&E NlrJrih O::,ast
'----1 SeNice Cen fer
Ca,J1Bt111 Par.k
SDG&E North Coast Service Center
•City & SDG&E work together to find a “mutually
acceptable” relocation site; subject to SDG&E specs
& cost neutrality
•NRG to fund up to $22.5 million
•If successful, City takes ownership of SDG&E parcels;
City & NRG work on joint development strategy
•If not successful, NRG pays City $10 million
NRG
l::::J soG&E
1 -A qua No, Shore P'arcel
2 -Fishing Beach
3,-Hubbs Site
4 -Bluff A re a
5 -South Pow er Pl ant
6 -SDG&E Service Center
7 -Cannon P'ark
SDG&E Locational Criteria
•Within Carlsbad, west of ECR
•Good access (freeway’s, major arterials,
service area)
•Relatively flat, rectangular in shape
•10-12 acres
•30-32K sq ft of building
Carlsbad
Desalination Pfant
Proposed Carlstx:id
Energy Center Project
NRG Properly
Encina Power Station
SDG&E Subsi<Jion &
s..,.,;tch Yards
Terminate Relocation Efforts
•NRG pays $10 million to the City
•Staff resources limited to monitoring & enforcing
remaining provisions
•Readily accomplished -NRG saves $12.5 million;
SDG&E loses $22.5 million towards a new Center
Terminate Efforts
•City would not take ownership of SDG&E parcels
•NRG & City would not have opportunity to pursue joint
development strategy
•NRG will have a more constrained redevelopment site
•SDG&E forfeits $22.5 million for new Service Center;
costs transferred ratepayers
Pursue Relocation of SDG&E’s NCSC
to a City Owned Site
•April 20, 2021, Carlsbad City Council directed staff to
pursue relocation to:
The City-owned parking lot properties at
The Shoppes @ Carlsbad -Brookfield Properties
Status Update Provided
•May 23, 2022
–Status update provided to the City Council
•Staff directed to return to City Council with an
update from staff and SDG&E on July 26, 2022
Relocation at The Shoppes
Conclusion:
•The Shoppes is not an acceptable relocation site for
SDG&E
•SDG&E is committed to making another SDG&E-owned
site work for the relocation of the service center
'-Desal'Jhatfan P= 1
Prop=sed Galrts,a:1
.Enel'9y Cenfer P rujecf.
NRG Prope-riy
Endn" PoKer Stat.fan
=G&E Si,b-sf3!fan &
Swir::,h )'ards
r---, SDG&E NlrJrih O::,ast
'----1 SeNice Cen fer
Ca,J1Bt111 Par.k
Carlsbad
Desalination Pfant
Proposed Carlstx:id
Energy Center Project
NRG Properly
Encina Power Station
SDG&E Subsi<Jion &
s..,.,;tch Yards
Recommendation
•Request that SDG&E identify a relocation site
suitable to all parties and return to the City
Council with a recommended relocation site
option, along with the basic terms of a deal,
within eight to ten weeks.
North Coast C&O overview
3
C&O Centers are:
•Key to SDG&E’s ability to provide safe &
reliable energy to the region
•Strategically located so crews can restore
electric & gas service to customers & repair
damage to our system caused by storms, fire
and traffic accidents
•24/7 operations sites for staging materials,
vehicles & personnel
•Critical incident hubs during emergencies
North Coast is one of largest service areas:
•285 square miles
•Over 250,000 customers
•More than 6,400 miles of gas and
electric lines
soG~ ....,./f
Shoppes at Carlsbad Findings
4
•SDG&E engaged consultants to evaluate hydrology and soils conditions.
•Reviewed reports provided by Carlsbad staff and past studies.
•Ingress/egress flooding (SR-78 and local access streets) determined to be
unacceptable; SDG&E must have 24/7 access especially during inclement
conditions. Therefore, the site is not suitable for a C&O Center.
OCEANSIDE —Flooding forced authorities to shut down
both directions of state Route 78 near El Camino Real in
Oceanside for more than 10 hours Friday, authorities said.
The first reports of flooding from heavy rains came in about
8:15 a.m., according to the California Highway Patrol online
traffic log.
The highway remained closed throughout the day until
westbound lanes were reopened about 6:15 p.m. The
eastbound lanes remained closed until 10 minutes before
9:00 on Friday night.
The San Diego Union Tribune, April 10, 2020
Flooding Potential (>1” -10 year)
5
Potential Flooding in Key Areas on routes to and from site
Flooding Potential (100 year)
6
100-Yr Flooding from
Creek (Everest)
100-Yr Flooding from
Creek (H&A)
Previously Studied Alternatives
7
Smaller Footprint at Existing Location
•Creates new land for redevelopment
•Consolidates utility uses between RR tracks and
Encina Substation
•Potential to reuse some infrastructure & buildings
Develop Site On SDG&E Land Nearby
•Maximizes redevelopment of existing site
•Minimizes disruption to utility operations
•Most expensive due to site improvements & all new
buildings
soG~ ....,./f