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March 7, 2023
ITEM TITLE
Grant Approval: Accept Grants from the California State Library Targeted State Grant Program for the Cinematic Arts Academic Center and Library’s Land and Construction Costs, and Authorize the City Manager or Designee to Negotiate and Execute Agreements Report Number: 23-0052
Location: 1775 Millenia Avenue
Department: Economic Development
Environmental Notice : The Project was adequately covered in previously certified Final Second Tier Environmental Impact Report (EIR 07 -01) – SCH No. 2007041074 for Otay Ranch Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan and Tentative Map.
Recommended Action
Adopt a resolution authorizing the acceptance of $30,000,000 in State funds to be allocated towards the Cinematic Arts Academic Center & Library’s Land and Construction Costs and authorizing the City Manager or designee to negotiate and execute the grant agreements once final for the California Targeted State Grant Program.
SUMMARY
In early 2022, as a creative solution to reduce the cost, time and risk associated with starting the University- Innovation District (“UID”), staff proposed creating a Cinematic Arts Academic Center & Library. This building, located just half a mile from the UID, would satisfy the need for a new library in M illenia, expand the footprint of the UID and serve as an incubator for both the University and Millenia Office. The vision won the support of the State and in the May 2022 revised State Budget, Senator Atkins secured $5 million for land acquisition and ent itlement costs for this project. In the August 2022 revised budget, Assembly member Alvarez submitted budget trailer bill language to allocate $25 million in state funding to the City of Chula Vista to construct the Cinematic Arts Academic Center & Library. The $30 million in total funds are being provided to the City through the California State Library Targeted State Grant Program and grant applications were submitted in December 2022. Although funds are not yet available, the draft agreements are. The City’s comments on the draft agreements and a Notice of Unrecorded Grant Agreement have been provided to the State and their counsel for review. To move forward expeditiously, staff is seeking authority P a g e | 2
for the City Manager or designee to negotiate and execute the agreements so that the City may receive the funds as soon as possible.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the Project was adequately covered in previously certified Final Second Tier Environmental Impact Report (EIR 07-01) – SCH No. 2007041074 for Otay Ranch Eastern Urban Center (EUC) Sectional Planning Area (SPA) Plan and Tentative Map. Therefore, no further CEQA review or documentation is necessary.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
In early 2022, as a creative solution to reduce the cost, time and risk associated with starting the University- Innovation District (“U ID”), staff proposed creating a Cinematic Arts Academic Center & Library. This building, located just half a mile from the UID, would satisfy the need for a new library in Millenia, expand the footprint of the UID and serve as an incubator for both the University and Millenia Office. The vision won the support of the State and in the May 2022 revised State Budget, Senator Atkins secured $5 million for land acquisition and entitlement costs for this project. In the August 2022 revised budget, Assembly member Alvarez submitted budget trailer bill language to allocate $25 million in state funding to the City of Chula Vista to construct the Cinematic Arts Academic Center & Library. The $30 million in total funds are being provided to the City through the Californ ia State Library Targeted State Grant Program and grant applications were submitted in December 2022. Although funds are not yet available, the draft agreements are. The City’s comments on the draft agreements and a Notice of Unrecorded Grant Agreement hav e been provided to the State and their counsel for review. To move forward expeditiously, staff is seeking authority for the City Manager or designee to negotiate and execute the agreements so that the City may receive the funds as soon as possible.
$5,000,000 Grant for Land Costs
The State of California has designated “$5,000,000 to the City of Chula Vista for the land and entitlement costs for new library” in AB 179 (SEC 207. Section 19.56, Chapter 249, Statutes of 2022). The grant award and dispersal of the funds for this project is contingent upon the California State Library receiving those funds.
The City has elected to utilize these funds towards the $11,000,000 land acquisition cost. $25,000,000 Grant for Construction Costs
The State of California has designated “$25,000,000 to the City of Chula Vista for the Cinematic Arts Library” in AB 179 (SEC 207. Section 19.56, Chapter 249, Statutes of 2022). The grant award and dispersal of the funds for this project is contingent upon the California State Library receiving those funds. The City has elected to use these funds towards the construction of the building which will include the foundation, substructure, superstructure, exterior ski n, roofing, and a small amount of the interior construction. The Ci ty will be funding the superstructure, interior construction/tenant improvements, site work and parking. For both grant agreements City staff anticipates the project to be complete by the summer of 2025 and has proposed P a g e | 3
a project end date for state funding of December 31, 2026 to account for any unforeseen circumstances with project close out.
Notice of Unrecorded Grant Agreement
As an exhibit to the grant agreements for each of the awards, there is also a State -required restrictive covenant that must be recorded against the property because State funds are being used for the acquisition of the land for the project and construction of the library building. The term of the covenant is for a ten-year period commencing upon close of escrow. Comments and edits on this document including the language for the use restriction have been provided to the State and their counsel for review. After the State’s review, the City will continue to negotiate to arrive at an acceptable form.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
CURRENT-YEAR FISCAL IMPACT
The total project cost for the Cinematic Arts Academic Center & Library, including the amenity building and all site work, is approximately $96 .4 million. The City is funding $66 .4 million in project costs and the $30 million in funding from the California State Library Targ eted State Grant Program funds the remainder of project costs. The below funds were already appropriated via Resolution 2022-275 approved on December 6, 2022.
Cinematic Arts
Library and Site
Work
Amenity Building
and Site Work Total
Public Facilities Development Impact Fee
(PFDIF) – Library Component
$ 31,780,433 $ 0 $ 31,780,433
Developer Contributions 27,215,458 7,417,500 34,632,958 State Library Grant Funds 30,000,000 0 30,000,000
Total $ 88,995,891 $ 7,417,500 $ 96,413,391
ONGOING FISCAL IMPACT
Once complete, the Cinematic Arts Academic Center & Library will result in ongoing operating costs to the General Fund. These costs will be evaluated and included in future years’ budgets.
ATTACHMENTS
None.
Staff Contacts: Miranda Evans, Special Projects Manager Eric Crockett, Deputy City Manager