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Summary Title: Set Public Hearing to Consider Expansion of Territory and Public Improvements for Financing District at Alameda Landing and Levy of Corresponding Special Tax
Adoption of Resolution of Consideration to Alter the Facilities to be Financed by and the Rate and Method of Apportionment of Special Taxes for, and to Increase the Bonded Indebtedness Limit of, Community Facilities District No. 13-1 (Alameda Landing Public Improvements); and Adoption of Resolution of Intention to Annex Territory to the City of Alameda Community Facilities District No. 13-1 (Alameda Landing Public Improvements) and to Authorize the Levy of Special Taxes Therein. (Community Development 256)
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To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Recommendation to adopt a resolution of intention to annex territory to Community Facilities District No. 13-1 (Alameda Landing Public Improvements) and to authorize the levy of special taxes on the property to be annexed, and adopt a resolution of consideration to alter the facilities to be financed by, and to increase the bonded indebtedness limit of, Community Facilities District No. 13-1
BACKGROUND
On January 7, 2014, the City Council adopted Resolution No. 14880 pursuant to which it formed the City of Alameda Community Facilities District No. 13-1 (Alameda Landing Public Improvements) (CFD), and adopted Resolution No. 14881 determining that the City could issue, for the CFD, up to $20,000,000 in bonds to finance certain public facilities being constructed by Catellus Alameda Development, LLC (developer) in connection with the development of Phase 1 of Alameda Landing. These facilities included the backbone sanitary sewer, storm and water systems and construction of Mitchell and Stargell Avenues and Fifth Street.
The Alameda Landing Disposition and Development Agreement (DDA) requires the developer to commence construction on Phase 2 of the project by December 31, 2017. In anticipation of that obligation, developer has requested that the City take action to annex the Phase 2 property to the CFD and e to add to the public facilities that can be financed by the CFD. In addition, the developer is requesting an increase in the bonded indebtedness limit of the CFD.
By annexing the Phase 2 land, adding public facilities to be financed, and increasing the bonded indebtedness limit to the exiting CFD 13-1, the developer will be able to finance the necessary work to stabilize the existing wharf to build the public waterfront park, complete Mitchell Street to the project's western boundary, and build other critical public infrastructure. At a future date, bonds will be issued to reimburse the developer for its cost of constructing the Phase 1 and Phase 2 public improvements owned by the City. The bonds will be repaid from a property tax assessment of all of the land owners in the CFD. The DDAprovides that the City will establish a CFD if the developer requests. The developer is obligated to pay the cost of establishing the CFD.
Adopting the resolutions referenced in this staff report sets a public hearing on April 21, 2015, to consider annexing the Phase 2 land, adding public facilities to be financed, and increasing the bonded indebtedness limit to the existing CFD 13-1.
DISCUSSION
A community facilities district is a defined geographic area in which the City is authorized to levy annual special taxes to be used to either finance directly the costs of specified public improvements or to pay debt service on bonds issued to finance the public improvements, as well as to pay costs of administration of the community facilities district.
On January 7, 2014, the City Council formed CFD 13-1, which currently includes Alameda Landing Phase 1, and authorizing the City to issue up to $20,000,000 of bonds for the CFD. The developer is now requesting that the City annex the 40 acres in Phase 2 of Alameda Landing into the CFD. In addition, the developer would like to add to the facilities authorized to be financed by the CFD, and to increase the bonded indebtedness limit of the CFD. This will allow the CFD to finance Phase 1, as well as Phase 2, public infrastructure improvements.
Property Annexation
In order to annex property to the CFD, Section 3-70.59 of the City's Municipal Code requires that the City Council adopt a resolution of intention to annex the property. The resolution must describe any changes to the special tax rates to be levied for the CFD in the annexation area, and set a time and place for a public hearing regarding the annexation. The boundary map for the area proposed to be annexed to the CFD is attached as Exhibit 1. The Resolution sets April 21, 2015, as the date for a public hearing on the annexation.
On April 21, 2015, following the public hearing on the annexation, the City Council then must call for an election of the owners of property in the area to be annexed. If two-thirds of the votes cast at the election (weighted by the number of acres each property owner owns in the area to be annexed) are in favor of the annexation, the City Council can then adopt a resolution canvassing the election and confirming the annexation of the property to the CFD.
Adding Facilities to be Financed and Increasing the Bonded Indebtedness
In order to add to the facilities to be financed by the CFD, and to increase the bonded indebtedness limit of the CFD, Sections 3-70.49 and 3-70.81 of the City's Municipal Code require that the City Council adopt a resolution of consideration specifying the changes to the facilities eligible to be financed by the CFD, and the amount of the increase in the bonded indebtedness limit for the CFD, and set a time and place for a public hearing on the changes to the facilities and bonded indebtedness limit. The Resolution of Consideration for the CFD sets April 21, 2015, as the date for a public hearing on the proposed changes to the CFD.
On April 21, 2015, following the public hearing on the proposed changes to the CFD, the City Council must then call for an election of the owners of property in the area currently included in the CFD. If two-thirds of the votes cast at the election (weighted by the number of acres each property owner owns in the CFD) are in favor of the changes to the facilities, and the increase in the bonded indebtedness limit for the CFD, the City Council can then adopt a resolution canvassing the election and confirming the ability of the CFD to finance the additional facilities, and the ability to issue special tax bonds up to the amount of the increased bonded indebtedness limit.
Conclusion
If the City Council adopts the two Resolutions referenced in this staff report, it is expected that on April 21, 2015, the City Council will hold the public hearings on the annexation of property to the CFD, and on the changes to the facilities to be financed by, and the bonded indebtedness limit of, the CFD, as called for pursuant to the Resolutions. Following the public hearings, the City Council would then take the actions needed to complete the annexation process, as well as to authorize the CFD to finance additional facilities and, and for the City to issue additional bonds for the CFD, including conducting two elections, one of the owners of property currently in the CFD (with respect to the changes to the CFD), and one of the owners of property in the area to be annexed to the CFD (with respect to the annexation proceedings).
FINANCIAL IMPACT
There is no impact to the General Fund to annex territory to CFD 13-1 or to otherwise modify the CFD. All costs related to the annexation of territory to the CFD, and the other modifications being made to the CFD, are being paid by the developer in connection with its obligations under the 2007 Development Agreements. The annual costs to administer the CFD and any bonds issued for the CFD will be paid from annual special taxes levied on property included within the boundaries of the CFD.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Municipal Code contains, in Section 3-70, the City of Alameda Special Tax Financing Improvement Code pursuant to which the CFD was formed, and pursuant to which the annexation and changes in facilities, rate and method of apportionment of special taxes and authorized bonded indebtedness limit for the CFD are being processed.
ENVIRONMENTAL REVIEW
On December 5, 2006, the City Council certified the Final Environmental Impact Report for the Alameda Landing Mixed Use Development Project (a Supplement to the 2000 Catellus Mixed-Use Development Project EIR) in accordance with the California Environmental Quality Act (CEQA) (State Clearinghouse #2006012091). The City approved a First Addendum to the EIR in 2007, a Second Addendum to the EIR in 2008, and a Third Addendum to the EIR in 2012. The Third Addendum approved in January 2012, evaluated the potential impact of the proposed changes to the approved Retail Center Development Plan and the Street Plan. The intention to annex territory CFD 13-1 and to authorize the levy of special taxes on the property to be annexed, and incur bonded indebtedness to finance facilities for the redevelopment of the property is consistent with the prior approvals and will not result in any new or substantially more severe environmental impacts than were previously identified in the Supplemental EIR and addenda.
RECOMMENDATION
Adopt a Resolution of Intention to Annex Territory to Community Facilities District No. 13-1 and to Authorize the Levy of Special Taxes on the Property to be Annexed, and adopt the Resolution of Consideration to Alter the Facilities to be Financed by and the Rate and Method of Apportionment of Special Taxes for, and to Increase the Bonded Indebtedness Limit of, Community Facilities District No. 13-1.
Respectfully submitted,
Debbie Potter, Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Boundary Map for Territory to be Annexed to CFD 13-1