HomeMy WebLinkAbout2011-11-08; Housing & Redevelopment Commission; 20740; CITY LOAN ACCEPTANCE REDEVELOPMENT PLANHOUSING AND REDEVELOPMENT COMMISSION
AND CITY COUNCIL
JOINT AGENDA BILL
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MTG.
DEPT.
2Q,740_
11/8/11
HNS
Acceptance of Loan from City to
Agency for South Carlsbad Coastal
Redevelopment Plan Implementation
DEPT. DIRECTOR!
CITY ATTORNEY--
CITY MANAGER
RECOMMENDED ACTION:
1 . Housing and Redevelopment Commission Resolution No. 515 accepting a loan in
the amount of two hundred fifty thousand dollars ($250,000) for funds advanced by the
City of Carlsbad to the Carlsbad Redevelopment Agency (for the South Coastal Carlsbad
area) to pay for costs related to additional legal and other related actions to respond to,
and continue opposition to, the application submitted to the California Energy
Commission by Cabrillo Power for a new power plant on property located within the South
Carlsbad Coastal Redevelopment Plan Area.
2. City Council Resolution No.2011-269 _authorizing the Finance Director to
make an additional advance from the General Fund to the South Coastal Carlsbad
Redevelopment Project Area (SCCRA) of the Carlsbad Redevelopment Agency in the
amount of two hundred fifty thousand dollars ($250,000) to pay for ongoing costs related
to additional legal and other related actions to respond to, and continue opposition to,
the application submitted to the California Energy Commission by Cabrillo Power for a
new power plant on property located within the South Carlsbad Coastal Redevelopment
Plan Area.
ITEM EXPLANATION:
In September of 1997, the City of Carlsbad began to identify options for action to eliminate or
reduce the environmental impacts/blight of the existing Encina Power Plant and to achieve
more compatible land uses along its coastline. At that time, the existing power plant, which
began operation in 1954, was deemed to be obsolete due to its outdated, inefficient
technology and more stringent Air Pollution Control District air emission standards. In
addition, the utility/industrial land use represented by the power plant and related facilities
was (and is) no longer considered the best use for this beautiful coastal property. As a result
of research on the issues surrounding the existing power plant and related land uses and
facilities, the City decided to form a redevelopment area known as the South Carlsbad
Coastal Redevelopment Area (SCCRA), the boundaries for which include the power plant
property.
DEPARTMENT CONTACT: Debbie Fountain 760-434-2935 debbie.fountain@carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COMMISSION ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
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D
D
D
CONTINUED TO DATE SPECIFIC D
CONTINUED TO DATE UNKNOWN D
RETURNED TO STAFF D
OTHER-SEE MINUTES P
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In July of 2000, the Redevelopment Plan (Plan) for the SCCRA was adopted. One of the
goals of the Plan was to convert the utility/industrial land west of the railroad tracks (site of
existing power plant) to another more appropriate land use that would 1) provide greater
benefit to the community, 2) would eliminate the possibility of an intensification of
utility/industrial applications at the site, and 3) enhance coastal access. A land use analysis
indicates that a power plant on coastal property is not necessary and/or not appropriate for
redevelopment purposes, and that an alternate land use strategy is needed for the area to
eliminate the blighting conditions and provide additional community benefit.
In September 2007, NRG submitted an application to the California Energy Commission to
build a new power plant on the existing power plant property with no guarantees that the
existing power plant would be decommissioned and demolished anytime soon. The proposed
project is not supported by the Carlsbad Redevelopment Agency because it will not eliminate
the existing blighting conditions (for existing plant) and new blighting conditions will be
created with the new project.
Through the Carlsbad Redevelopment Agency, the Housing and Redevelopment
Commission serves as an administrative arm of the State to promote important State policies
relating to the elimination of blight, providing jobs, and developing affordable housing. The
Commission has previously found that the existing power plant creates blighting conditions in
the community through its noxious emissions, 400-foot stack looming over residential areas,
parks, and beaches, and use of hazardous materials on the property. It is the statutory duty
of the Commission to ensure that those blighting conditions are eliminated through its
enforcement of the redevelopment plan, and that new blighting conditions are not
created/established as a result of new projects such as the proposed power plant.
Since 2008, the City of Carlsbad has approved and funded through the City's General Fund
$1.5 million to pay for costs related to all legal and other related actions to respond to, and/or
establish opposition to, the application submitted to the California Energy Commission by
NRG for a new power plant on property located within the SCCRA. To prevent additional
blighting conditions and to encourage the elimination of existing blight within the SCCRA,
these costs are necessary to implement the related redevelopment plan and are consistent
with the five year implementation plan adopted for the SCCRA in 2005. Since the SCCRA
does not yet have adequate tax increment to pay for said costs, the Commission requested
that the initial $1.5 million funded by the General Fund be considered a loan from the City to
cover said costs until such time as the Agency may receive adequate tax increment funds to
repay said loan. This loan, approved April 27, 2010, constituted an indebtedness of the
Housing and Redevelopment Commission and shall be repaid according to the Cooperation,
Reimbursement and Repayment Agreement between the Council and Commission last
amended in July 2009.
The California Energy Commission recently continued the hearings on the noted application
with the intent of reopening the testimony on select issues for reconsideration by the
Commission at a later date. This continuation requires additional legal and other actions by
the Carlsbad Redevelopment Agency to respond to, and/or continue opposition to, the
application for the new power plant in the SCCRA. As a result, staff is recommending that the
City Council approve an additional loan to the Housing and Redevelopment Commission for
implementation of the SCCRA project plan in the total amount of $250,000 and that the
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Commission accept said loan, for the funds advanced to pay the costs related to the legal
and other related actions to respond to, and/or establish a defense against, the proposed
new power plant within the SCCRA. This loan shall become a debt of the SCCRA.
FISCAL IMPACT:
To date, a total of $1.5 million in funds has been advanced to the SCCRA to pay for costs
related to implementation of the SCCRA Plan for all legal and other related actions to
respond to, and/or establish opposition to, the application submitted by NRG to the California
Energy Commission for a new power plant within the SCCRA. An additional $250,000 in
funds are required by the Housing and Redevelopment Commission to pay for the additional
costs associated with the ongoing legal and other related actions to respond to, and/or
continue opposition to, the application submitted by NRG to the California Energy
Commission for a new power plant within the SCCRA.
Since there are inadequate tax increment funds generated within the SCCRA to cover said
costs at this time, the Commission has requested that the $250,000 in funds be provided in
the form of a loan from the City Council to be repaid at a later date by the Commission
according to the Cooperation, Reimbursement and Repayment Agreement approved for
redevelopment implementation efforts in both the Village and SCCRA. The additional loan
shall become an indebtedness of the SCCRA, and was anticipated in the recently submitted
Enforceable Obligations Payment Schedule (EOPS) as an ongoing project authorized by both
the City Council and Housing and Redevelopment Commission.
ENVIRONMENTAL IMPACT:
The actions set forth above do not qualify as a "project" under the California Environmental
Quality Act (CEQA) per State CEQA Guidelines Section 15378 in that they do not have the
potential to result in a direct or reasonable foreseeable indirect adverse physical impact on
the environment.
EXHIBITS:
1. Housing and Redevelopment Commission Resolution No. 515 accepting a loan in
the amount of two hundred fifty thousand dollars ($250,000) for funds advanced by the
City of Carlsbad to the Carlsbad Redevelopment Agency (for the South Coastal Carlsbad
Project Area) to pay for costs related to additional legal and other related actions to
respond to, and continue opposition to, the ongoing application submitted to the California
Energy Commission by Cabrillo Power for a new power plant on property located within
the SCCRA.
2. City Council Resolution No. 2011-269 authorizing the Finance Director to
make an advance from the General Fund to the South Coastal Carlsbad Project Area
(SCCRA) of the Carlsbad Redevelopment Agency in the amount of two hundred fifty
thousand dollars ($250,000) to pay for costs related to additional legal and other related
actions required to respond to, and continue opposition to, the ongoing application
submitted to the California Energy Commission by Cabrillo Power for a new power plant
on property located within the SCCRA.
EXHIBIT 1
1 RESOLUTION NO. 515
2 A RESOLUTION OF THE HOUSING AND
REDEVELOPMENT COMMISSION OF THE CITY OF
3 CARLSBAD, CALIFORNIA, ACCEPTING A LOAN FROM
4 THE CITY COUNCIL IN THE AMOUNT OF $250,000 FOR
FUNDS ADVANCED FOR IMPLEMENTATION OF THE
5 SCCRA PLAN RELATED TO ADDITIONAL LEGAL COSTS
AND OTHER RELATED ACTIONS TO RESPOND TO, AND
6 CONTINUE OPPOSITION TO, THE ONGOING
APPLICATION SUBMITTED TO THE CALIFORNIA
7 ENERGY COMMISSION FOR A NEW POWER PLANT ON
PROPERTY WITHIN THE SCCRA.
9 WHEREAS, in 2007, NRG submitted an application to the California Energy
10 Commission to build a new power plant on the existing power plant property with no
11 guarantees that the existing power plant would be decommissioned and demolished;
12 and
13 WHEREAS, the site of the new proposed as well as the existing power plant is
14 located on property within the boundaries of the South Carlsbad Coastal
15 Redevelopment Area (SCCRA); and
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WHEREAS, the proposed new power plant is not supported by the Housing and
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Redevelopment Commission because it will not eliminate the existing blighting
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conditions (for the existing plant) and new blighting conditions will be created if the
20 proposed plant is constructed on said site; and
21 WHEREAS, the all legal and other related costs to respond to, and/or establish
22 and continue a defense against, the application submitted by NRG to the California
23 Energy Commission for said new power plant shall be paid for by the Carlsbad
Redevelopment Agency with funds loaned to said Agency from the City of Carlsbad
25 pursuant to a Cooperative Agreement approved by the Council and Commission on
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August?, 2001; and
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1 WHEREAS, implementation activities by the Carlsbad Redevelopment Agency to
2 eliminate blight and blighting conditions as related to the power plant property and to
participate in future redevelopment of said site are consistent with the SCCRA Five-
4 Year Implementation Plan approved by the Housing and Redevelopment Commission in
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2005;
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WHEREAS, the City Council has approved advances to the Carlsbad
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Redevelopment Agency to cover said costs for previous and ongoing opposition to the8
9 application for the subject power plant project, and desires to provide these advanced
10 funds in the form of a loan to the Housing and Redevelopment Commission which shall
11 become a debt of the Carlsbad Redevelopment Agency for implementation of the
12 SCCRA Plan.
13 NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
14 Commission of the City of Carlsbad, California, as follows:
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1. That the above recitations are true and correct.
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2. That the Finance Director is authorized to accept a loan from the City Council
, 0 in the amount of $250,000 on behalf of the Carlsbad Redevelopment Agencylo
19 for fund advances and other approved appropriations for additional and
20 ongoing costs related to implementation activities within the South Carlsbad
21 Coastal Redevelopment Area related to the opposition to the application
22 submitted to the California Energy Commission for a new power plant on
23 property within the South Carlsbad Coastal Redevelopment Area.
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3. That the Finance Director is authorized to appropriate and advance said
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funds for the noted costs related to the defense against the proposed power
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plant project to the South Carlsbad Coastal Redevelopment Area Fund.
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4. That said loan from the City Council to the Housing and Redevelopment
Commission for said implementation costs for the South Carlsbad Coastal
3 Redevelopment Area shall constitute an indebtedness of the Housing and
4 Redevelopment Commission and shall be repaid according to the terms of the
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Cooperative Agreement approved by the Council and Commission on August
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7,2001.7
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1 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the
2 Carlsbad Housing and Redevelopment Commission and Carlsbad City Council held on
3 the 8th day of November 2011, by the following vote to wit:
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5 AYES: Commission Members Hall, Kulchin, Blackburn, Douglas, Packard.
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NOES: None.
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ABSENT: None.8
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14 ^LISA HILDABRAND, Secretary
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EXHIBIT 2
1
RESOLUTION NO. 2011-269
ARESO
HARI SF
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2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING A LOAN FROM
THE CITY COUNCIL TO THE HOUSING AND
4 REDEVELOPMENT COMMISSION IN THE AMOUNT OF
$250,000 TO PROVIDE ADDITIONAL FUNDS FOR
5 IMPLEMENTATION OF THE SCCRA PLAN RELATED TO
ADDITIONAL LEGAL COSTS AND OTHER RELATED
6 ACTIONS TO RESPOND TO, AND CONTINUE
OPPOSITION TO, THE ONGOING PROCESSING OF THE
7 APPLICATION SUBMITTED BY NRG TO THE
CALIFORNIA ENERGY COMMISSION FOR A NEW
8 POWER PLANT ON PROPERTY WITHIN THE SCCRA.
WHEREAS, in 2007 NRG submitted an application to the California Energy
Commission to build a new power plant on the existing power plant property with no
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guarantees that the existing power plant would be decommissioned and demolished;
12
and13
WHEREAS, the site of the new proposed as well as the existing power plant is
15 located on property within the boundaries of the South Carlsbad Coastal
16 Redevelopment Area (SCCRA); and
17 WHEREAS, the proposed new power plant is not supported by the City Council
18 or the Housing and Redevelopment Commission because it will not eliminate the
19 existing blighting conditions (for the existing plant) and new blighting conditions will be
20 created if the proposed plant is constructed on said site, and said site is no longer
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appropriate for this heavy industrial use; and
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WHEREAS, the previously approved and additional legal and other related costs
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to respond to, and/or establish and continue opposition to, the application submitted by
25 NRG to the California Energy Commission for said new power plant shall be paid for by
26 the Carlsbad Redevelopment Agency with funds loaned to said Agency from the City of
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EXHIBIT 2
1 Carlsbad pursuant to a Cooperative Agreement approved by the Council and
2 Commission on August 7, 2001; and
WHEREAS, the City Council has previously approved and indicated its intent to
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approve additional advances to the Carlsbad Redevelopment Agency, if necessary, to
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cover said costs for said defense against the application for the subject power plant
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project, and now desires to provide these advanced funds in the form of an additional
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loan to the Housing and Redevelopment Commission which shall become a debt of the
g Carlsbad Redevelopment Agency for implementation of the SCCRA Plan.
10 NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
11 Commission of the City of Carlsbad, California, as follows:
12 1. That the above recitations are true and correct.
2. That the City Council hereby authorizes the Finance Director to make an
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advance from the General Fund to the South Coastal Carlsbad
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Redevelopment Project Area (SCCRA) of the Carlsbad Redevelopment
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Agency in an additional amount not to exceed $250,000 for costs related to
10 implementation activities within the SCCRA related to ongoing opposition tolo
19 the application submitted to the California Energy Commission for a new
20 power plant on property within the South Carlsbad Coastal Redevelopment
21 Area.
22 3: That said loan from the City Council to the Housing and Redevelopment
23 Commission for said implementation costs for the South Carlsbad Coastal
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Redevelopment Area shall constitute an indebtedness of the Housing and
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Redevelopment Commission and shall be repaid according to the terms of the
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EXHIBIT 2
1 Cooperative Agreement approved by the Council and Commission on August
2 7,2001.
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PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the
Carlsbad City Council and Carlsbad Housing and Redevelopment Commission held on
the 8th day of November 2011, by the following vote to wit:
AYES: Council Members Hall, Kulchin, Blackburn, Douglas, Packard.
NOES: None.
ABSENT: None.
MATT IflALL, Mayor
L'QRRAINE M. WOOD, City Clerk
(SEAL)