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September 9, 2025
ITEM TITLE
Community Facilities District: Formation Proceedings for Community Facilities District No. 2024-2 (Moss Street)
Report Number: 25-0221
Location: 676 Moss Street
Department: Development Services
G.C. § 84308 Regulations Apply: Yes
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Conduct the public hearing, adopt the following resolutions, and place the ordinance on first reading:
A. Resolution Establishing Community Facilities District 2024-2 (Moss Street) B. Resolution Determining Necessity to Incur Bonded Indebtedness C. Resolution Calling an Election Relating to the Levy of a Special Tax D. Resolution Declaring the Results of said Election
E. Ordinance relating to the Levy of a Special Tax within Community Facilities District No. 2024-2 (Moss Street) (First Reading)
F. Resolution Approving Acquisition-Financing Agreement
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SUMMARY
On July 22, 2025, the City Council approved a resolution declaring its intention to form Community Facilities District 2024 -2 (Moss Street) (“CFD 2024 -2”) and, a resolution declaring its intention to incur bonded indebtedness, and set a public hearing on the formation of CFD 2024-2 for September 9, 2025.
The owner of the Moss Street project, Shea Homes Limited Partnership (“Developer”), is in the process of constructing 141 for-sale, market rate condominiums on the former industrial warehouse at 676 Moss Street.
In connection with this development, the Developer is required to pay certain City Development Impact Fees (“DIFs”), fees of the Sweetwater Authority and other fees associated with the project. The Developer has requested the formation of a new Community Facilities D istrict, to pay for DIF and certain other fees associated with the project.
A Community Facilities District is a special financing district that will sell bonds to generate funds for the financing of DIFs to construct public facilities, as well as fees of the Sweetwater Authority. Special taxes will be levied to repay the bonds.
Tonight’s action will continue the formal proceedings leading to the establishment of CFD 2024 -2 and the levy of special taxes therein. Any bonds to be issued by CFD 2024-2 will be presented to the City Council for approval at a later date.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a governmental fiscal/administrative activity which does not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
Previous Actions
In accordance with the Mello-Roos Community Facilities Act of 1982 (the “Act”), and the City of Chula Vista Community Facilities District Ordinance, the Developer submitted a petition requesting that the City conduct proceedings to consider the approval of the formation of CFD 2024-2 and the subsequent issuance of bonds in order to pay certain DIF and other fees associated with the project which will fund the construction of other public facilities necessary to mitigate the project’s impacts.
To facilitate the Developer’s petition, the City Council previously declared its intention to establish CFD 2024- 2, set the public hearing date on the formation of CFD 2024 -2 to be September 9, 2025, and approved the boundaries of CFD 2024 -2 at its Council Meeting on July 22, 2025 by adopting Resolutio n No. 2025 -125.
Additionally, the Council adopted Resolution No. 2025 -126 declaring its necessity to incur bonded indebtedness in CFD No. 2024-2.
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Prior to tonight’s meeting, Harris and Associates, the City’s special tax consultant, prepared a report on CFD 2024-2 in accordance with Government Code section 53321.5 (Attachment 1). The report contains a description of the public facilities and their estimated cost to be financed by the CFD. The report is attached hereto, and by such action is deemed filed with the City Council.
Description of the Project
The Moss Street project proposes 141 for sale, market-rate condominiums across 18 buildings on a 6.94-acre site. This property was formerly used for industrial purposes and is located at 676 Moss Street. The l and within CFD No. 2024-2 is generally bounded by H Street, Fig Avenue, I Street, and Broadway (Attachment 2).
The Developer currently owns 100% of the land within the proposed CFD boundaries. Tentative Map No. 18- 0006 was approved January 5, 2021 to subdivide the site and the Final Map was recorded July 14, 2025. The existing improvements were demolished , and the Developer is currently constructi ng the condominiums with first home closings anticipated in the second quarter of 2026.
Background and Purpose of Community Facilities Districts (CFDs) The Mello -Roos Community Facilities Act of 1982 (“Mello -Roos Act”) allows cities and other local governments in California to create special tax districts known as Community Facilities Districts, or CFDs as a way to finance public infrastructure and services. This financing tool is especially useful in growing communities where new development creates demand for roads, parks, sewer systems, and other public facilities.
Before forming any CFDs, local agencies must adopt policies outlining how they will use the Mello-Roos Act.
The Chula Vista City Council adopted such policies on January 13, 1998, officially allowing the use of CFDs in the City to help fund (1) the construction or acquisition of public infrastructure an d (2) the operation of certain public services.
Shortly after, on April 28, 1998, the City Council adopted the “Chula Vista Community Facilities District Ordinance” (the “CFD Ordinance”) under its Charter authority. This ordinance allowed the City to use t he Mello-Roos Act with several local modifications, including:
Incorporating all maintenance activities authorized by the Landscaping & Lighting Act of 1972; Allowing additional maintenance activities not specifically covered by state law; and Establishing a reserve fund for ongoing maintenance in open space districts.
On July 23, 2019, the City Council codified the CFD Ordinance into the Chula Vista Municipal Code as Chapter
3.60 (Community Facilities Districts – General). More recently, on October 24, 202 3, the Council approved updates to the Goals and Policies to explicitly allow the use of CFD financing to pay for DIFs, which are charges that help offset the cost of new development on public infrastructure, and to allow an inflationary increase of the tax rates for a limited number of years.
The CFD proposed under this action CFD No. 2024-2 (Moss Street) aligns with both the City’s current Goals and Policies and the CFD Ordinance.
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Proposed Special Tax
The Rate and Method of Apportionment of Special Tax (“RMA”) sets forth how the special taxes will be levied and in what amount (Attachment 3). Each year the Annual Special Tax Requirement, as defined in the RMA, is determined, and then apportioned to each taxable parcel within CFD No. 2024-2 (Moss Street).
The Annual Special Tax Requirement generally includes the amount necessary to pay the principal and interest on the outstanding bonds and administrative expenses. The special tax is levied first on residential property for which a building permit is issued prior to March 1 of the preceding fiscal year. If additional monies are needed to satisfy the Annual Special Tax Requirement after the first step has been completed, an amount will be levied on each parcel of undeveloped property. In no event shall the tax be levied in an amount higher than the Maximum Special Tax.
Table 1 below details the Assigned Special Tax Rates for fiscal year 2026-27.
Table 1
Fiscal Year 2026-27
Assigned Special Tax Rates for Developed Property
Land Use Class
Land Use Type
Building Square Footage
Assigned Special Tax
(per Residential Unit)
1 Residential Property < 1,201 $3,280.00
2 Residential Property 1,201 to 1,475 $3,345.00
3 Residential Property 1,476 to 1,675 $4,128.00
4 Residential Property 1,676 to 1,825 $4,362.00
5 Residential Property 1,826 to 1,925 $4,585.00
6 Residential Property > 1,925 $4,763.00
On each July 1, commencing July 1, 2027, and ending July 1, 2037, the Assigned Special Tax for Developed Property shall be increased by two percent (2.0%) of the amount in effect in the prior fiscal year (for a period of eleven years).
Acquisition-Financing Agreement
The Acquisition-Financing Agreement describes the facilities and DIFs that may be financed with the bonds and establishes the terms and conditions for acquiring and financing the public improvements (Attachment 4). The expectation is that bonds will be iss ued in the future to satisfy the obligation of the developer for several of the City’s DIFs. Issuance of the bonds will not occur until additional development has occurred on the site, and approval of such bonds will be brought to the City Council for consideration at a future meeting.
Formation Proceedings
The City Council is required to hold a public hearing regarding the proposed CFD No. 2024-2. The Resolution of Intention to form CFD No. 2024-2 adopted by the City on July 22, 2025 called for such public hearing to be held on September 9, 2025. The public hearing allows all interested persons desiring to be heard on all matters pertaining to the formation of CFD No. 2024-2, and the fees and Facilities eligible to be financed by CFD No. 2024-2, the issuance of bonds by the City for CFD No. 2024 -2, and the levy of the special tax, to be heard. The notice of the public hearing was published in the Star News.
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As noted above, a report (“Report”) as to the costs of the Facilities to be financed by the CFD No. 2 024-2 is presented (Attachment 1) at this meeting.
After the public hearing, if less than a majority of owners of the land proposed to be included in CFD No. 2024-2 have filed written protests against the establishment of CFD No. 2024-2, the City Council may proceed with the actions to form CFD No. 2024 -2 and authorize the levy of the special tax. If the owners of one -half or more of the area of the land in the territory proposed to be included in CFD No. 2024 -2, and not exempt from the special tax, file written protests against the establishment of CFD No. 2024-2, and protests are not withdrawn so as to reduce the value of the protests to less than a majority, no further proceedings to create CFD No. 2024-2 will be conducted at this meeting. Shea Homes Limited Partnership is the only owner of land in CFD No. 2024-2, and there are no persons registered to vote residing in CFD No. 2024-2.
Resolution of Formation – The first action required if the City Council determines to proceed with the formation is the adoption of a resolution establishing CFD No. 2024 -2 (“Resolution of Formation”). The Resolution of Formation:
determines that all prior actions taken in connection with the formation of CFD No. 2024 -2 and the levy of the special tax on property within CFD No. 2024-2 have been duly considered and determined to be valid and in conformity with the Act;
establishes CFD No. 2024-2;
approves the boundaries of CFD No. 2024-2 (Attachment 2); confirms the types of Facilities to be financed by CFD No. 2024-2; provides for the levy of the special taxes in accordance with the RMA; provides for an initial annual appropriations limit for CFD No. 2024-2; and requires the proposition of the levy of special tax and the proposition of the establishment of the appropriations limit to be submitted to the qualified electors of CFD No. 2024-2.
Resolution of Necessity - The City will next consider adoption of a resolution determining the necessity to incur bonded indebtedness for CFD No. 2024 -2 (“Resolution of Necessity”). The Resolution of Necessity provides $10,000,000 as the maximum principal amount of bonded indebtedness to be incurred for CFD No. 2024-2. The Resolution of Necessity requires the proposition of incurring the bonded indebtedness authorized by the resolution t o be submitted to the qualified electors of CFD No. 2024 -2 and consolidated with the election on the propositions required by the Resolution of Formation.
Special Election – Following the adoption of the Resolution of Formation and Resolution of Necessity , the City Council will consider the adoption of a resolution calling for a special election. A written waiver executed by the sole owner of the property to be included in CFD No. 2024-2 allowing for a shortening of time for the special election to expedite the CFD No. 2024-2 formation process and waiving any requirement for notice, analyses and arguments in connection with the special election is on file with the City Clerk. As a result, the special election for CFD No. 2024-2 is being held at this meeting.
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Once the special election has been held and the City Clerk has canvassed the election, the City Clerk will execute a Canvass and Statement of Result of Special Election, attached to the resolution declaring the results of special election, as Exhibit A. Following the adoption of this resolution, the City Clerk will cause a notice of special tax lien (Attachment 5) to be recorded in the San Diego County Recorder’s Office.
Special Tax Levy; First Reading of Ordinance – Following the public hearing on th e formation, election and adoption of the foregoing resolutions, the City Council will be asked to introduce an Ordinance Levying Special Taxes within CFD No. 2024-2.
Resolution Approving Acquisition -Financing Agreement - The City will consider adoption of a resolution approving the Acquisition-Financing Agreement (Attachment 4) between the City and the Developer relating to the DIFs that will be financed by CFD No. 2024-2.
Future Action
A Joint Community Facilities Agreement between the City and the Sweetwater Authority which describes the fees of the Sweetwater Authority that may be financed with the bonds and establishes the terms and conditions for financing the fees will be presented at a future Council meeting.
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.). Staff is not independently aware of, nor has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
All CFD formation costs are borne by the applicant, resulting in no current-year fiscal impact to the General Fund or Development Services Fund.
ONGOING FISCAL IMPACT
There is no on-going fiscal impact as a result of this action. Once the Community Facility District is formed, the special taxes levied will pay annual City and bond administrative costs and debt service on the bonds issued.
ATTACHMENTS
1. Community Facilities District (CFD) Report
2. Boundary Map
3. Rate and Method of Apportionment of Special Taxes
4. Acquisition-Financing Agreement
5. Notice of Special Tax Lien
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Staff Contact: Rebecca Bridgeford, Deputy Director, Development Services Robert A. Vacchi, Interim Director, Development Services