Chula Vista
Bayfront
Item No. # 7.2 May 10, 2022
2 Bayfront Finance Team
Chula Vista Port Commissioner
Ann Moore
City Team Port Team Consultant Team
Maria Kachadoorian, City Manager Joe Stuyvesant, CEO Robert Whalen, Bond Counsel Glen Googins, City Attorney Thomas Russell, General Counsel Vanessa Legbandt, Bond Counsel Tiffany Allen, Deputy City Manager Shaun Sumner, Vice President Suzanne Harrell, Financial Advisor Eric Crockett, Deputy City Manager Elizabeth Alonso, Sr. Deputy GC Kelly Broughton, Deputy City Manager Adam Meyer, Assistant Director RIDA Team Stephanie Shook, Dept. Manager
Ira Mitzner, President & CEO
Luke Charlton, COO
Ashley Homrighaus, Sr. VP
Recommended
Actions
Resolution A
▪ Appropriating Additional $9.0 Million Contribution to Convention Center
▪ Approving 4th Amended & Restated Revenue
Sharing Agreement
▪ Convention Center Agreement (SNDA)
▪ Approving Declaration of Reciprocal Easements
▪ Terminating Financing Agreement
▪ Accepting Economic Development Subsidy Report
Resolution B
▪ Impact & Capacity Fee Deferral Agreement
Resolution C
▪ Appropriating additional Sewer Funds 3
Project
Overview1
North
ParkPark
Seasonal
Wetland:
14.7 ac
RV Park/
Campground
E STREET
F STREET
H STREET
J STREET
v.07/03/14
Interstate 5Interstate 5
Wildlife ReserveWildlife Reserve
Sweetwater
Marsh
Sweetwater
Marsh
South Bay Salt
Ponds
South Bay Salt
Ponds
Living Coast
Discovery Center
Living Coast
Discovery Center
Mixed Use/
Commercial/
Parking Structure
• RV Park/
Campground
• 25 ft max height
• 120,000 SF
• 44 ft max height
• 120,000 SF
• 45 ft max height
• 100,000 SF mixed use/commercial
• 3,000 space parking garage
• 155 ft max height
• 1,500 residential units
• 25 ft - 45 ft podium heights
• 70 ft – 200 ft tower heights
• 15,000 SF retail ground floor
• 420,000 SF office
• 250 rooms
• 130 ft max height
• 9,500 SF
• 30 ft max height
• 237 RV spaces
• 25 ft max height
San Diego BaySan Diego Bay
L STREET
I-5
• 415,000 SF max conference
space
• 240 ft max hotel structure height
• 120 ft max conference center height
• Portion of 2,850
hotel rooms
allowed
• 300 ft max height
• 200,000 SF (cultural/retail)
• 65 ft max height
• 225,000 SF
• 25 ft max height
Chula Vista Bayfront – Master Plan Illustrative
5 Park
Park
Harbor Park:
25 ac
Existing
Boat
Yard
Signature Park:
21 ac
Mixed Use/
Commercial
Nature
Center
Parking
Buffer:
41.1 ac
Office
Hotel/
Cultural
Retail
Resort
Conference
Center
Harbor and Marinas
Residential
Hotel/ Office Park
Park
Industrial Business Park
Industrial
Business
Park
RV Park
Park:
24 ac
Retail (around harbor)
Buffer:
25 ac
6 Project Location
7 Existing
Key Deal Terms
▪ RIDA Commits to Construct:
▪ 1,570 to 1,600 room resort hotel
▪ 275,000 net square foot convention center
▪ 1,600 space parking structure
▪ Developer’s Phase 1A Infrastructure Improvements
▪ Public Agency Commitments:
▪ Contribute $265 million toward convention center
▪ Fund Developer’s Phase 1A Infrastructure
▪ Fund & construct certain Phase 1A Infrastructure Improvements Port
RIDA
Hotel & Parking
Structure
Ground Lease
(Lease Years 1 – 66)
Authority
Convention Center
Site Lease
(Lease Years 1 – 37)
Convention Center
Facility Lease
(Lease Years 1 – 37)
City
Convention Center
Sublease
(Lease Years 1 – 37)
RIDA
Leasing Structure
Proposed
Changes
2 10
Changes to Key Deal Terms
Convention Center
▪ Increasing Project Public Investment from $265M to $284M (+$19M) ▪ City/Port contribution to Convention Center increasing by $18M ▪ $9M each, cash at Close of Escrow
▪ New funding commitment
▪ Move up payment of $1M from project completion to Close of Escrow ▪ Existing funding commitment, Existing Revenues
▪ Changes to Parking Rent Schedule (+$18.9M rent projected, 50/50) ▪ $19M cash contribution available to manage cash flow & reduce risk 11 Changes to Key Deal Terms
Phase 1A Infrastructure Improvements
▪ Phase 1A Program Contingency Funds
▪ $2M from Series 2022B Bonds
▪ Existing Revenues
▪ Construction of 1st Phase of Harbor Park Deferred
12 Financing Plan
Phase 1 – Construction Loan
▪ Bonds to be issued by Chula Vista Bayfront Facilities Financing Authority ▪ 37 Year Term (June 1, 2059)
▪ Redemption (refinance) between June 1, 2026 and June 1, 2027 ▪ Private placement with JP Morgan and one more additional banks ▪ JP Morgan to act as Administrative Agent for all lenders Funding Tax Project Fund Amount
Phase 1A Tax-Exempt $ 10.0 million
Convention Center Taxable $ 265.0 million
Total $ 275.0 million
13 Financing Plan
Phase 2 – Permanent Financing
▪ Bonds to be issued by Chula Vista Bayfront Facilities Financing Authority ▪ Cumulative 37 Year Term (June 1, 2059)
Funding Tax Est. Project Fund Amount
Phase 1A Tax-Exempt $ 10.2 million
Convention Center Taxable $ 372.0 million
Total $ 382.2 million
14 Project Risks & Mitigation Measures
1. Construction Delays
Risk: Project completion delayed past mandatory redemption date of June 1, 2027 Mitigation:
▫ Project schedule leeway
▫ Construction Late Charges
▫ JPM remedies limited to Default Interest
▫ City/Port/JEPA obligation limited to Existing Revenues
2. Cost Overruns
Risk: Actual costs exceed public & private monies available Mitigation:
▫ GMP contract
▫ Contingencies & reserves
▫ Convention Center contribution capped
▫ RIDA Completion Guaranty
15 Project Risks & Mitigation Measures
3. “Acts of God”
Risk: Major casualty event destroys Project
Mitigation:
▫ Co-Payees/additional insureds on casualty insurance policies ▫ Construction period insurance includes public agency financing costs
4. Finance Risk
Risk: Scheduled draws of bond proceeds and mandatory redemption at year 5 Mitigation:
▫ JPM minimum commitment of $200M, with $50M minimum commitment for others to participate
▫ Refunding post project completion likely to be favorable, compared to today ▫ Mitigation measures from Construction Delays
Agreements3
17 City Council Action
Approving
▪ 4th Amended and Restated Revenue Sharing
Agreement
▪ Convention Center Agreement (SNDA)
▪ Declaration of Reciprocal Easements
▪ Fee Deferral Agreement*
Terminating
▪ Financing Agreement with Port District
Accepting
▪ Economic Development Subsidy Report
*Resolution B
18 Modified per Previously
Delegated Authority
▪ Bayfront Financing District Loan Agreement
▪ Project Implementation Agreement
▪ Facility Lease
▪ Sublease
▪ Form of Completion Guaranty (Ground Lease)
▪ Mortgagee Protection Agreements with Private
Lenders (Wells Fargo & Marriott)
19 Information Only
(City Not a Party)
▪ Rate Lock Agreement
▪ Ground Lease
▪ Site Lease
▪ Bond Purchase and Continuing Covenant
Agreement
▪ Support Agreement
▪ Ground Lessor Agreement (SNDA)
Economic
Development
Investment
4 21
Regional & Local
Benefits
▪ Development catalyst for the CVBMP, including up to
1,250 additional hotel rooms
▪ Economic revitalization in western Chula Vista
▪ First luxury, AAA Four Diamond hotel in Chula Vista
▪ Provide large luxury conference facilities for high school dances, trade organizations, fundraisers, and other
community events
▪ City estimated to receive net positive project revenues of $151 million over RSA term
▪ Ongoing City General Fund revenues estimated at $44.9 million annually, after RSA term
22 Economic Impact Analysis
San Diego County City of Chula Vista1
Construction Economic Impact
• Economic Output $ 1,610,200,000 $ 91,400,000
• Temporary Employment 3,580 Employees 340 Employees
Ongoing Economic Impact
• Economic Output $ 475,290,000 $ 325,290,000
• Permanent Employment (FTE) 4,000 Employees 2,910 Employees 1City figures are included within County figures.
Next Steps5
24 Next Steps
Gaylord Pacific
▪ JEPA approval May 11th
▪ Financial Closing (May 17 – May 26)
▪ RIDA Begins Construction
▫ Estimated 35.5-month construction
Future Agreements/Actions
▪ O&M Agreement
▪ Park Lease Agreement
▪ Formation of JPA per Settlement Agreement
Recommended
Actions
25 Resolution A
▪ Appropriating Additional $9.0 Million Contribution to Convention Center
▪ Approving 4th Amended & Restated Revenue
Sharing Agreement
▪ Convention Center Agreement (SNDA)
▪ Approving Declaration of Reciprocal Easements
▪ Terminating of Financing Agreement
▪ Accepting Economic Development Subsidy Report
Resolution B
▪ Impact & Capacity Fee Deferral Agreement
Resolution C
▪ Appropriating additional Sewer Funds
26