Subject: APPROVAL OF Cooperation AGREEMENT WITH YERBA BUENA, OPCO, LLC
COUNCIL DISTRICT: 8
SNI AREA: N/A
Approval of an agreement with Yerba Buena, OPCO, LLC for funding and investigation of the feasibility of providing public financing for the acquisition and construction of public infrastructure improvements required for the Evergreen Industrial Development.
The Evergreen Benefit Assessment District included
along its eastern boundary approximately 352 acres of vacant land zoned for
Industrial Park. The
property owner (Yerba Buena, OPCO, LLC) of the southern most 120 acres has received
zoning and planned development approval for a 1,769,060 square foot industrial
park. They Yerba Buena, OPCO
LLC have has
requested that the City form a community facilities district to provide
financing for the local public infrastructure improvements required for the
development of their its project
as well as some offsite public infrastructure improvements that are necessary
for both their its development
and the development of the remaining
adjacent 232
acres adjacent to their site.
The City of San
José creates community facilities districts (CFDs) to provide tax
exempt bond in order to provide a financing mechanism
to support the development of land in conformance with the City’s General
Plan. Typically, tax-exempt bonds are issued
by the City for the public infrastructure required for
development of the property within the CFD. These
bonds are offered through issued by the
City and are repaid through special taxes, usually continuing for twenty to
thirty years, against the properties within the boundaries of the proposed
district.
This agreement
with the property owner/developer is being proposed to provide the City with
funding to investigate the feasibility of forming and to take the initial steps
towards formation of a community facilities district to fund the construction
of public infrastructure to support the development. It requires the developer to deposit $30,000 with the City to
cover costs incurred by the City and it’s its consultants
in the investigation of the feasibility of forming the district and performing
the preliminary steps required for the formation of a district. If costs exceed the initial deposit the
agreement has provisions for additional deposits. Upon formation ofIf the district is formed and bonds are
issued and delivery of bond proceeds the
developer shall be reimbursed from the bond proceeds for monies advanced to
the City and expended on eligible investigation and formation costs. Attached is a map of the proposed community
facilities district.
The Department of Public Works has been in contact with the property owner/developer throughout the development review process. Staff has also contacted the owner of the adjacent 232 acres of developable land.
This memorandum and related documents were prepared in cooperation with the Office of the City Attorney and the Finance Department.
The deposit
required by the agreement will cover all City staff and consultant costs in the
event that a district is not formed or bonds are not sold. If the district is formed and bonds are sold
the developer shall be reimbursed from the bond proceeds for monies advanced
to the City and expended on eligible investigation and formation costs.
Not applicable.
RAJEEV BATRA
Acting Director, Public Works Department