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November 4, 2025
ITEM TITLE
Agreements: Approve the Parks Agreement with HomeFed Village 8E, LLC, and an Affordable Housing Agreement and Related Documents for Otay Ranch Village Eight East Report Number: 25-0196
Location: Generally, south of the eastern extension of Main Street, east of Otay Ranch Village Eight West, west of State Route 125, and north of the Otay River Valley (APN: 644-070-21, 646-010-08) (“Project Site”) Department: Development Services & Housing and Homeless 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. Alternatively, if the subject agreements are considered a project under CEQA, then the agreement s are adequately covered and addressed in a previously certifie d Final Environmental Impact Report (“FEIR”) for the Otay Ranch University Villages Project (FEIR-13-01; SCH #2013071077; certified by City Council Resolution No. 2014-232 on December 2, 2014).
Recommended Action
Adopt resolutions:
A) Approving a Parks Agreement for Otay Ranch Village Eight East between the City and HomeFed Village 8E, LLC.
B) Authorizing the City Manager to execute 1) an Affordable Housing Agreement for Otay Ranch Village Eight East, in satisfaction of the City’s Inclusionary Housing Ordinance; 2) an Affordable Housing Transfer Agreement for Otay Ranch Village Eight East; and 3) a Termination of Affordable Housing Agreement and Affordable Housing Transfer Agreement for Otay Ranch Village Eight West.
SUMMARY
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The proposed actions support fulfillment of key conditions of approval for the Otay Ranch Village Eight East Tentative Subdivision Map and are necessary to facilitate recordation of the first Final Map. The Parks Agreement between the City of Chula Vista (“City”) and HomeFed Village 8E, LLC (“Developer”) establishes the design, construction, dedication, public access, and long -term maintenance framework for parkland improvements within the Project, including a Neighborhood Park, Edge Trails, and a portion of a Community Park. T he Agreement fulfills the developer’s parkland obligations under the City’s Parkland Dedication Ordinance ( Chula Vista Municipal Code (“ CVMC”) Chapter 17.10) and supports the City’s Parks and Recreation Master Plan goals.
An Affordable Housing Agreement has also been prepared between Developer and City, providing terms and conditions for the affordable housing obligation for Village Eight East, in accordance with the Sectional Planning Area Plan (“SPA Plan”) for Village Eight East and CVMC Chapter 19.91 (In clusionary Housing). A transfer agreement has also been prepared to transfer the remaining affordable obligation of Village Eight West to Village Eight East. Finally, in connection with the transfer, an agreement has been prepared terminating the affordabl e housing obligation for Village Eight West, which is now deemed to have been fulfilled.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the activity for compliance with the California Environmental Quality Act (CEQA) and has determ ined that 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. Alternatively, if the subject agreements are considered a project under CEQA, then the agreements are adequately covered and addressed in a previously certified Final Environmental Impact Report for the Otay Ranch University Villages Project (FEIR-13-01; SCH #2013071077; certified by City Council Resolution No. 2014-232 on December 2, 2014). Therefore, no further environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
Parks Background
The Developer owns and intends to develop Otay Ranch Village Eight East (“Village 8 East” or the “Project”), a residential community located in the eastern portion of the City. The Project area, shown on Attachments 1 and 2 , is subject to parkland requirements under the City’s Parklands and Public Facilities Ordinance (“PLDO”), codified in CVMC Chapter 17.10 (Parklands & Public Facilities).
The PLDO requires new residential development to provide parkland through a combination of land dedication, construction of improvements, and/or payment of in-lieu fees. The City may determine the most appropriate mix of these options to serve community needs.
For Village Eight East, parkland obligations were imposed through the conditions of approval f or the P a g e | 3
Project’s Tentative Subdivision Map (“CVT 22-0005”), adopted by City Council Resolution No. 2024 -082 on May 14, 2024. Condition of Approval No. 46 requires the Developer to enter into a Parks Agreement with the City prior to recordation of the first Final Map, to formalize how the Project will fulfill its Parkland Acquisition and Development (“PAD”) requirements.
The proposed Parks Agreement, attached as Attachment 3, establishes the Developer’s responsibilities for the design, construction, dedicat ion of land and public access easements, and ongoing maintenance of the required park facilities.
Required Parkland Dedication
Parkland dedication requirements for new residential development in the City are based on unit type and average household size, a s defined in CVMC Section 17.10.040. Table 1 summarizes the total parkland dedication required for Village Eight East.
Table 1 - Parkland Calculation
Dwelling Unit (DU) Type SF Parkland per DU Number of DUs SF Acreage Single-Family 460 336 154,560 3.548
Multi-Family 341 2,940 1,002,540 23.015
Total 3,276 1,157,100 26.56
The Project’s parkland obligation of 26.56 acres will be satisfied through a combination of facilities: a 6.545- acre Neighborhood Park, 2.19 acres of Edge Trails, and 17.825 acres of usable land within a Community Park.
The Village 8 East SPA Plan anticipates that these facilities will meet the recreational needs of the community and satisfy the parkland dedication requirements.
Parks Ownership and Maintenance
While the City typically owns and maintains public parks using General Fund resources or through t he formation of a maintenance community facility district , the Developer proposes to establish a construction and maintenance mechanism for the Neighborhood Park and Edge Trails through the Homeowners Association (“Association”). To enable this, the Associ ation will retain fee title ownership of the 6.545 -acre Neighborhood Park and the 2.19-acre Edge Trails.
To ensure public access in perpetuity, the Developer will record a Public Access Easement over both facilities at the time of the first Final Map. The se areas will remain open for public use in accordance with CVMC Section 2.66.270. The Association may not modify hours of operation without prior approval from the Director of Parks and Recreation or the Director of Public Works.
The Association will als o have full authority over programming, rentals, and events within these areas.
However, the City may request to hold up to twelve (12) City -sponsored events annually, subject to availability and compliance with applicable insurance and safety requirements . Scheduling will be coordinated directly between the City and the Association and governed by the Parks Agreement and SPA Plan.
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The Community Park will be publicly owned and maintained by the City. The Developer will grant an irrevocable offer of dedication (“IOD”) for 17.825 usable acres of Community Parkland, consistent with the Tentative Map conditions of approval. The IOD is subject to review and approval by the Director of Development Services. In -lieu parkland development fees ( “PAD-D fees”) for th e Community Park will be collected from the Developer as required by CVMC Chapter 17.10. Based on the approved SPA Plan and Public Facilities Finance Plan, approximately 2,160 of the Project’s 3,276 residential units are anticipated to contribute PAD-D fees toward the Community Park. If the developer constructs fewer units than currently anticipated, the land dedication or in-lieu fee obligation may be adjusted accordingly.
Parkland Credits
The Parks Agreement confirms that the Developer will receive PAD credits from the City upon confirmation of completion of the required facilities. These credits may be transferred in accordance with the Mitigation Fee Act and CVMC provisions. Credit allocations reflect the construction of the Neighborhood Park and Edge Trails, as well as the dedication of land for the Community Park.
Parks Conclusion
The Parks Agreement does not increase or reduce the developer’s underlying parkland obligations. Rather, it clarifies how the Project will satisfy those obligations —through land dedication, construction of recreational amenities, maintenance responsibilities, and the payment of in -lieu fees—consistent with the CVMC and the Project’s conditions of approval.
Affordable Housing Background
The City has had a longstanding practice of requiring 10% of units developed within Sectional Planning Areas to be restricted as affordable to low and moderate -income households. This practice was previously administered under the City’s Balanced Communities Policy, a component of the Housing El ement of the City’s General Plan. The policy was codified in 2024 as CVMC Chapter 19.91 (Inclusionary Housing).
Typically, master developers of SPA Plans meet their inclusionary obligation by setting aside a small number of sites within the SPA for development as 100% affordable multifamily housing. This enables those projects to leverage the land commitment with local, state, and federal funding for affordable housing. The City provides guidance as to the suitability of sites for affordable development, in consideration of proximity to local amenities and other factors.
The Village 8 East SPA Plan was adopted on December 2, 2014, pursuant to Resolution No. 2014-235. It was later amended by Resolution No. 2020 -036, adopted on February 18, 2020, and further a mended by Resolution No. 2024 -082, adopted on May 14, 2024. In accordance with the Balanced Communities Policy and CVMC Chapter 19.91, the Village 8 East SPA Plan states that Developer shall enter into an affordable housing agreement with the City prior to approval of the first Final Map for Village 8 East. The proposed Affordable Housing Agreement, attached as Attachment 4, meets this requirement. The Affordable Housing Agreement would be executed by Developer and City and recorded against the entirety of Village 8 East until all of the affordable units are constructed and subject to site-specific affordability covenants, at which point the Affordable Housing Agreement shall terminate.
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Satisfaction of the Affordable Housing Agreement Requirements Of the 3,276 units approved for Village Eight East, the Affordable Housing Agreement requires that 10%, or 328 (with rounding) units, be restricted as affordable housing. Of this percentage, half, or 5% of all units, must be made affordable to low-income households, which roughly corresponds to households earning at or below 80% of the Area Median Income (“AMI”) for San Diego County. The remaining half must be restricted to moderate-income households earning at or below 120% of the AMI for San Diego County. Additionally, Village 8 East will assume or has assumed a portion of the remaining affordable housing obligations of the SPA Plans known as Village 8 West and Village 3. The total affordable housing obligation being assumed by Village 8 East is shown below in Table 2.
Table 2: Affordable Housing Obligation
Affordable Units
Reference Low-Income Moderate-Income Total
Village 8 East Affordable Housing Obligation 164 164 328 Transfer from Village 8 West - 68 68
Transfer from Village 3 19 19 38
TOTAL 183 251 434
The units must be restricted for a minimum of 55 years , or 45 years if fulfilled as a for -sale product, the standard term for affordable housing regulatory agreements in California. The Affordable Housing Agreement provides some flexible options for fulfilling the affordable housing obligation. The Developer may pursue an “incentive credit” by providing units at deeper affordability levels than required, thereby reducing its obligation according to a prescribed formula, in accordance with CVMC Chapter 19.91.
Additionally, the Affordable Housing Agreement provides that the Developer may satisfy up to 50% of its obligation through the construction of affordable housing outside of Village 8 East. If the Developer pursues the offsite option, addi tional guardrails are in place to ensure that they are situated in high -opportunity locations.
Related Affordability Documents
Village 8 West is being developed with a similar structure and affordable housing obligation as Village 8 East.
The City and HomeFed Village 8, LLC, the developer of Village 8 West (“Village 8 West Developer”), entered into the Balanced Communities Affordable Housing Agreement [Otay Ranch Village Eight West] on August 4, 2020. Both the Developer and the Village 8 West Developer are affiliates of HomeFed Corporation.
Village 8 West has a remaining obligation of 68 affordable units. HomeFed Corporation now wishes to transfer this remaining obligation to Village 8 East. A transfer agreement has been prepared to enact this transfer, attached to this item as Attachment 5. If the transfer is approved and executed, Village 8 West shall be deemed to have fulfilled its affordable housing obligation. The Affordable Housing Agreement recorded against Village 8 West can then be terminated in order to clean up the title for the non-restricted units within Village 8 West. This termination is attached as Attachment 6.
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The recently completed 175-unit affordable development in Village 8 West, Encelia at Cota Vera, will remain subject to a separate 55-year deed restriction.
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 and 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
The Developer is responsible for the payment of all costs to process the Village Eight East Parks Agreement.
There is no net impact to the General Fund or Development Services Fund in the current fiscal year as a result of this action.
There is no current-year fiscal impact associated with the adoption of the Affordable Housing Agreement and related documents. The Developer is responsible for all financing and fulfillment of the affordable housing obligations under the agreements inclusive of staff time to prepare this item and associated documents.
ONGOING FISCAL IMPACT
The proposed Parks Agreement secures an ongoing funding source for the construction, maintenance and operation of the Neighborhood Park and Edge Trails to be located within Village Eight East, while securing public access to the planned park and trails. The maintenance funding is necessary in order to offset the fiscal deficits to the City that are otherwise indicated for th e parkland obligations of the Project. Assuming an annual maintenance cost of $14,000 per acre, and 8.735 acres of parkland to be privately maintain ed, this equates to an annual General Fund savings of approximately $122,290 in City parks maintenance costs.
Implementation costs of the Village Eight East Parks Agreement will be funded through future Developer deposit accounts associated with the future development applications. Future costs related to park construction and their increases over time will be the responsibility of the Developer, as defined within the Parks Agreement. Staff costs associated with ongoing compliance monitoring of park constru ction will be paid by the Developer.
Ongoing maintenance and operation of the Project’s Community Park acres will be a General Fund obligation.
Applying the same $14,000 per acre annual maintenance cost assumption to the expected 17.825 net Community Park acres results in an estimated ongoing General Fund fiscal impact of $249,550 in City park maintenance costs.
The Community Park is anticipated to be designed and constructed by the City as a capital improvement project. The projected maintenance costs for the Community Park will be analyzed in depth and presented to the City Council for consideration and approval in the future.
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There is no ongoing fiscal impact associated with the Affordable Housing Agreement or related documents.
The Developer is responsible for all financing and fulfillment of the affordable housing obligations under the agreements.
ATTACHMENTS
1. Village Eight East Property Map
2. Village Eight East Site Utilization Plan
3. Village Eight East Parks Agreement
4. Village Eight East Affordable Housing Agreement
5. Village Eight East Transfer Agreement
6. Termination of Village Eight West Affordable Housing Agreement and Transfer Agreement
Staff Contact: Laura Handschumacher, Landscape Architect, Development Services Patricia Fermán, Principal Landscape Architect, Development Services Roy Sapa’u, Director of Development Services
Brian Warwick, Housing Manager, Housing and Homeless Services Stacey Kurz, Director of Housing and Homeless Services