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RESOLUTION NO. _________
RESOLUTION OF THE CITY OF CHULA VISTA
AUTHORIZING THE APPROPRIATION OF CERTAIN
AMOUNTS IN FURTHERANCE OF THE CITY’S
INVESTMENT IN THE CHULA VISTA BAYFRONT RESORT
HOTEL AND CONVENTION CENTER PROJECT;
RECEIVING AN ECONOMIC DEVELOPMENT SUBSIDY
REPORT; AUTHORIZING THE EXECUTION AND
DELIVERY BY THE CITY OF A FOURTH AMENDED AND
RESTATED REVENUE SHARING AGREEMENT AND
CERTAIN OTHER AGREEMENTS RELATED TO THE
CONVENTION CENTER; AND AUTHORIZING CERTAIN
RELATED ACTIONS
WHEREAS, the City of Chula Vista, California (the “City”) has previously adopted Resolution No. 2021 -127 on June 15, 2021 (the “Authorizing Resolution”) approving the financing of the Project (as defined i n the Authorizing Resolution) with proceeds from the issuance by the Chula Vista Bayfront Facilities Financing Authority (the “Authority”) of revenue bonds in an aggregate principal amount not to exceed $400,000,000 (the “Authority Bonds”), approving the f orm and authorizing the execution of various documents in connection with the issuance of the Authority Bonds and authorizing the filing of judicial validation proceedings relating to the issuance of the Authority Bonds and approving additional actions rel ated thereto; and
WHEREAS, capitalized terms used herein and not defined shall have the meanings giv en to such terms in the Authorizing Resolution, unless the context clearly requires otherwise; WHEREAS, by the default judgment entered on October 26, 2021 in the Superior Court of the State of California for the County of San Diego in the action entitled San Diego Unified Port District; Chula Vista Bayfront Facilities Financing Authority; Bayfront Project Special Tax Financing District; and City of Chula Vis ta v. All Persons Interested in the Matter etc. , Case No. 37-2021-00028959-CU-MC-CTL (the “Validation Action”) the Authority Bonds and the agreements, resolutions and ordinances described therein (the “Validated Agreements”) have been judicially validated and the Authority Bonds and the Validated Agreements have been determined to be valid, legal and binding obligations of the parties thereto in accordance with their terms and the judgment in the Validation Action is now final and not subject to appeal; and WHEREAS, prior to adoption of the Authorizing Resolution, the City Council of the City (the “City Council”) made an Economic Development Subsidy Report available to the public and held a noticed public hearing to consider the issuance of the Authority Bo nds, pursuant to Government Code Section 6586.5, and to consider the execution and delivery of certain agreements relating to the Authority Bonds, including the Facilit y Lease under which the City is committing certain revenues to the payment of lease payments which will be applied to pay a portion of the debt service on the Authority Bonds in order to support the development of an approximately 275,000 square foot convention center (the “Convention Center”) that will be Resolution No. _________
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constructed and operated as part of a larger Gaylord Pacific Hotel (the “Hotel”) and Convention Center project, and certain related public infrastructure improvements (the “Phase 1A Infrastructure Improvements”) in the Chula Vista Bayfront (together, the “RHCC Project”), pursuant to Government Code Section 53083(a); and
WHEREAS, in the Authorizing Resolution, the City Council made the findings required by Government Code Section 52200.2 and 52200.1 to support the City’s investment in the economic opportunity projected to result from the RHCC Project; and WHEREAS, to address changes in market conditions for the Authority Bonds and increasing construction costs for the Convention Center , the City desires to agree to provide $9,000,000 of additional funding for the Convention Center from City f unds, acknowledge that the method of sale for the Authority Bonds will be changed from the public sale described in the Authorizing Resolution to a private sale and clarify and provide that the initial term of the Facility Lease and the Sublease will be 37 years from the date of issuance of the Authority Bonds (with an extension to a maximum of sixty -six years as provided therein ) all as described herein; and
WHEREAS, the San Diego Unified Port District (the “Port District”) will also be contributing $9,000,000 in additional funding for the Convention Center; and WHEREAS, the City Council now desires to consider the City’s contribution of $9,000,000 in cash towards the construction of the Convention Center (the “Additional City Investment”) in addition to the commitment, as previously authorized in the Authorizing Resolution, of various tax revenues and other amounts over time towards payment of lease payments which will be applied to pay a portion of the debt service on the Authority Bonds; and WHEREAS, the City has prepared and made available to the public prior to the date of the public hearing regarding the Additional City Investment an updated Economic Development Subsidy Report containing the information required by pursuant to Government Code Section 53083(a); and
WHEREAS, the City made the information required by Government Code Section 53083(a) available to the public in written form and on the City’s website and such information is set forth in the Economic Development Subsidy Report; and WHEREAS, the City has held a noticed public hearing regarding the Additional City Investment, as required by Government Code Section 53083(b); and WHEREAS, the Authorizing Resolution approved the execution and delivery of the City Agreements including a Bond Purchase Agreement by and among J.P. Morgan Securities LLC (the “Underwriter”) , the City, the Port District and the Authority to effectuate the sale of the Authority Bonds to the Underwriter pursuant to a public sale and in Section 2 thereof delegated authority to the Authorized Officers to make and consent to certain changes to one or more of the City Agreements and/or other Chula Vista Bayfront Documents to facilitate the financing and construction of the Hotel, the Phase 1A Infrastructure Improvement s and the Convention Center Resolution No. _________
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(“the Delegated Authority”), including to respond to market conditions related to the structuring and marketing of the Authority Bonds as identified by the Underwriter; and WHEREAS, the Underwriter has recommended to the Author ity that due to market conditions, the method of sale of the Authority Bonds be changed from a public sale to a private sale of the Authority Bonds to JPMorgan Chase Bank, National Association and one or more additional purchasers of the Authority Bonds, i f any (collectively, the “Purchasers”) pursuant to the terms of a Bond Purchase and Continuing Covenant Agreement (the “Bond Purchase and Continuing Covenant Agreement”) by and among the Authority, JPMorgan Chase Bank, National Association, as Administrati ve Agent (“the Administrative Agent”) and the Purchasers named therein; and
WHEREAS, consistent with the authorization previously provided by the Authorizing Resolution and the Validation Action, and the recommendation of the Underwriter based on market conditions, the City desires to acknowledge and consent to the change in the method of sale of the Authority Bonds from a public sale to the Underwriter to a p rivate sale to the Purchasers pursuant to the terms of the Bond Purchase and Continuing Covenant Agreement; and
WHEREAS, the Facility Lease and Sublease approved in the Authorizing Resolution contemplated a 37 year initial term and Section 2 of the Authori zing Resolution provided for an initial termination date of no later than June 1, 2058, which was consistent with the 37 year term based on the expectation that the Authority Bonds would be issued shortly after the adoption of the Authorizing Resolution; and
WHEREAS, the issuance of the Authority Bonds has been delayed a year since the adoption of the Authorizing Resolution and in order to maintain the 37 year initial term for the Facility Lease and the Sublease as intended by the City , the City Council des ires to approve that initial term herein; and
WHEREAS, to address the use and application of certain revenues of the City and the Port District and the residual revenues to be transferred to the Authority pursuant to the terms of the Indenture, the Authori ty, the Port District and the City entered into a Third Amended and Restated Revenue Sharing Agreement; and
WHEREAS, to reflect certain changes to the use and application of the revenues set forth in the Third Amended and Restated Revenue Sharing Agreement, the Authority, the City and the Port District intend to enter into a Fourth Amended and Restated Revenue Sharing Ag reement (the “Fourth Amended RSA”); and
WHEREAS, Marriott International, Inc. (“Marriott”), who will be the operator of the Convention Center and Hotel, has requested that the Authority, the City, the Port District, RIDA Chula Vista, LLC and Marriott enter into a Convention Center Agreement (the “Convention Center Agreement”) to delineate certain rights of the parties thereto with respect to the Convention Center and under the leases related thereto; and Resolution No. _________
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WHEREAS, RIDA, the private lenders to RIDA (the “Perm itted Lenders”), Marriott and the Administrative Agent have requested certain changes to certain of the Validated Agreements and certain other changes have been made to the Validated Agreements to reflect the private sale and the final terms of the Author ity Bonds, which changes have been reviewed and approved by City Attorney who, in accordance with Section 2 of the Authorizing Resolution, has determined that such changes are consistent with and within the scope of the Delegated Authority; and WHEREAS, the City desires to enter into a Declaration of Reciprocal Easements (the “Declaration”) by and among the City, the Port District, RIDA and the Authority in order to provide reciprocal easements to facilitate the construction and operation of the Conventi on Center and the hotel portion of the RHCC Project; and
WHEREAS, the City Council has been presented with the form of the Bond Purchase and Continuing Covenant Agreement, the Fourth Amended RSA, the Convention Center Agreement and the Declaration and the City Council has examined and approved the form of each of such agreements;
WHEREAS, the City Council desires to authorize and direct the execution and delivery of the Fourth Amended RSA, the Convention Center Agreement and the Declaration (the “City Agreements”); and
WHEREAS, the proposed approvals described herein with respect to the RHCC Project have been analyzed for compliance with the California Environmental Quality Act (CEQA) and the City has determined that the activities involved with such approvals are covered in the previously adopted Environmental Impact Report UPD#83356 -EIR-65B/SCH#2005081077 related to the CVBMP, and the addendums thereto (collectively, the “Project EIR”) and that the proposed City Council actions included herein are me rely a step -in furtherance of the original project for which environmental review was performed and that no circumstances have arisen triggering the requirement for any supplemental or subsequent CEQA analysis as a result of the adoption of this Resolution and the actions approved herein in that: 1) no substantial changes are proposed to the project analyzed in the Project EIR and no substantial changes have occurred that require major revisions to the Project EIR due to the involvement of new significant environmental effects or an increase in severity of previously identified significant effects; 2) no new information of substantial importance has come to light that (a) shows the Project will have one or more significant effects not discussed in the Proje ct EIR, (b) identifies significant impacts would not be more severe than those analyzed in the Project EIR, or (c) shows that mitigation measures or alternatives are now feasible that were identified as infeasible and those mitigation measures or alternati ves would reduce significant impacts, and 3) no changes to mitigation measures or alternatives have been identified or are required, and, accordingly, pursuant to CEQA Guidelines §15162(b), the City Council finds that no further analysis or environmental documentation is necessary; and
WHEREAS, based on the foregoing and on the additional information provided in the staff report prepared in connection with the adoption of this Resolution and presented at the meeting at which this Resolution is being adopte d, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the execution and performance of the City Agreements and the Resolution No. _________
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undertaking of the oth er actions authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to undertake the actions described herein for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, the City Council of the City of Chula Vista does hereby resolve as follows:
SECTION 1. The City Council hereby appropriates $9.0 million in unanticipated one - time General Fund revenues ($1.8 million) and expenditure savings ($7.2 million).
SECTION 2. The City Council hereby accepts and files the Economic Development Subsidy Report in substantially the form presented in Exhibit A attached hereto and incorporated herein and on file in the City Clerk’s office, pursuant to Government Code Section 53083.
SECTION 3. The form s of the City Agreements presented to the City Council at this meeting, are hereby approved, and each of the Mayor of the City (the “Mayor”), the City Manager of the City (the “City Manager”), any Deputy City Manager of the City (the “Deputy City Manager”) and the Director of Finance/Treasurer of the City (the “Director of Finance”) and their designees (collectively, the “Authorized Officers”), acting alone, is hereby autho rized and directed, for and in the name and on behalf of the City, to execute and deliver the City Agreements in substantially said forms, with such changes as may be made in accordance with the delegation authority provided in the following paragraph.
The City Council hereby delegates to the Authorized Officers the authority to make and consent to changes to one or more of the City Agreements to facilitate the financing and construction of the Hotel, the Phase 1A Infrastructure Improvements, and the Convention Center which an Authorized Officer determines are needed (i) to eliminate any in consistencies among any of the City Agreements; (ii) to cure any ambiguity or defective provision in any of the City Agreements; (iii) to comply with the conditions of funding in the Bond Purchase and Continuing Covenant Agreement ; (iv) to reflect the final terms of the sale the Authority Bonds to the Purchasers; and (v) to facilitate the required private financing for the Hotel and Convention Center or otherwise nece ssary to facilitate the issuance of the Authority Bonds and the construction of the Hotel, Phase 1A Infrastructure Improvements, and the Convention Center; provided, however that such changes shall not (x) increase the indemnification obligations of the City; (y) result in an additional contribution of funds by the City (except to a de minimis amount (not to exceed $500,000 in total)); or (z) materially increase the obligations of the City, which changes shall be based on the advice of the City Attorney , an d approved by an Authorized Officer through the Authorized Officer’s execution of the City Agreements incorporating the changes proposed, and shall be conclusively evidenced by the delivery by the City of the executed City Agreements with the changes or its written consent to such changes, as applicable.
SECTION 4. The City Council hereby consents to the sale of the Authority Bonds at a private sale to the Purchasers in accordance with the terms of the Bond Purchase and Continuing Covenant Agreement and confirms that the initial term of the Facility Lease and the Sublease shall be 37 years (unless terminated earlier or extended as provided therein) with the Maximum Resolution No. _________
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Lease Payments for each Lease Year after Lease Year 32 increasing by two percent per year , and directs that the Facility Lease be revised to reflect the foregoing prior to execution.
SECTION 5. The City Council hereby finds and determines that the changes to the Validated Agreements are all consistent with the Delegated Authority and the approvals contained herein and the City’s prior approval of the Validated Agreements remains in full force and effect.
SECTION 6. The Authorized Officers, and other officers, employees and agents of the City, are hereby authorized and directed, jointly and severally, to do any and all thing s which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including, but not limited to, the execution and deli very of easement agreements related to the Facility, a Tax Certificate for any of the Authority Bonds and other certificates or agreements required pursuant to the terms of the Bond Purchase and Continuing Covenant Agreement or by the Authority or the Port District as a condition to their consummating the transactions described herein related to the Project and the Authority Bonds. In addition, following the issuance of the Authority Bonds, each of the Authorized Officers, acting alone, is authorized to tak e any and all actions required of the City under the City Agreements including, but not limited to, executing required certificates, granting consents, filing reports and sending notices on behalf of the City.
All actions heretofore taken by the Authorize d Officers and other officers, employees and agents of the City with respect to the CVBMP and the matters described herein are hereby approved, confirmed and ratified.
SECTION 7. This Resolution shall take effect immediately upon its passage.
Resolution No. _________
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Presented by
Tiffany Allen
Deputy City Manager/
Director of Development Services
Approved as to form by
Glen R. Googins
City Attorney