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March 17, 2026
ITEM TITLE
Community Benefit Districts: Adopt an Ordinance Adding Chapter 5.14 (Community Benefit Districts) to the Chula Vista Municipal Code Establishing Procedures for the Formation of Community Benefit Districts Report Number: 26-0060
Location: Citywide
Department: Economic Development
G.C. § 84308 Regulations Apply: No
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines.
Recommended Action
Conduct the public hearing and place an ordinance on first reading adding Chapter 5.14 (Community Benefit Districts) to the Chula Vista Municipal Code to establish procedures for the formation of Community Benefit Districts in the City of Chula Vista. (First Reading)
SUMMARY
The proposed ordinance establishes local procedures for the formation of property and business improvement districts, designated as Community Benefit Districts. These districts are property and business owner-initiated funding mechanisms authorized under state law and local regulations to fund improvements, services, and activities within a defined area.
Adoption of the ordinance does not create any specific district, impose new assessments or taxes, or obligate the City to approve future districts . The ordinance provides a framework for a more localized approach to district formation pursuant to the City’s Charter authority, incorporat ing applicable state law, and is reflective of a localized approach to supporting vibrant business districts.
ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with the California Environment al Quality Act P a g e | 2
(CEQA) and it has been determined that the activity is not a “Project” as defined under Section 15378 of the state CEQA Guidelines because it will 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. Notwithstanding the foregoing, it has also been determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Thus, no environmental review is required.
COMMUNITY ENGAGEMENT
In developing this ordinance, staff drew on outreach conducted through the Small Business Taskforce, the Economic Development Strategic Plan Advisory Committee, and the Economic De velopment Strategic Plan workshops, and worked directly with local business owners and the Downtown Chula Vista Association.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
On January 14, 2025, the City Council unanimously approved the formation of a Subcommittee on Economic Development in Western Chula Vista and appointed Councilmember Preciado and Deputy Mayor Fernandez to serve on the subcommittee. The subcommittee examined economic opportunities and challenges in the western portion of the city and engaged with experts in a variety of areas, including the use of assessment districts such as property and business improvement districts (PBIDs) and community benefit districts to support economic development.
On November 18, 2025, the City Council unanimously approved implementing the recommendations of the Western Chula Vista Economic Development Subcommittee, including supporting vibrant business districts by allowing for the establishment of Community Benefit Districts formed under a combination of state law and local regulations. The proposed ordinance responds to that direction.
The State of California allows for the establishment of property and business improvement districts pursuant to the provisions of the Property and Business Improvement District Law of 1994 (PBID Law). The primary steps necessary to form a district generally include the following:
Submission of a petition to the City requesting formation of the district, signed by property owners representing more than the required percentage of the proposed assessments. Preparation of a management district plan defining how the district will operate, including its boundaries, services, assessment formula, budget, funding sources, district duration, and administration.
Adoption of a Resolution of Intention by the City Council, if the petition is sufficient, approving the proposed plan, setting a public hearing, and directing that ballots be mailed to affected property owners.
Return of ballots and conduct of a public hearing, after which, if the weighted assessment ballots supporting formation exceed those opposing formation, the City Council may adopt an ordinance officially establishing the district.
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The district remains in place for the term outlined in the management distri ct plan unless it is renewed or disestablished. The City has previously utilized this process to establish a property-based assessment district in Downtown Chula Vista.
On July 24, 2001, the City Council established the Downtown Chula Vista Property -based Business Improvement District (PBID) pursuant to PBID Law and California Government Code Section 53753. The purpose of the district was to provide economic development, marketing, parking management and enhanced maintenance. The PBID was renewed by the City Council for a ten-year term in 2006 and again for the same term in 2016. It remains active and is the only such district in the city. During its existence, the PBID has provided a benefit to the geographic area it covers funded by the property owners of the area.
Fostering vibrant business districts provides economic development and community benefits. There are more than 200 property and business improvement districts in California, including in cities such as Alameda, Burbank, Fresno, Glendale, Los Ang eles, San Diego, Santa Ana, Santa Monica, San Francisco, San Jose, and Stockton.
While the PBID Law provides the statutory framework for the formation of property and business improvement districts, several charter cities in California have adopted local regulations under their charter authority that supplement state law by establishing additional procedures for district formation and administration. One local example is the City of El Cajon, which adopted a Community Benefit District ordinance in 2025 establishing such procedures.
Following extensive research, analysis, and engagement, the proposed ordinance establishes a local framework, consistent with state law, for the formation and use of property and business improvement districts, referred to as Community Benefit Districts, to support economic development and promote vibrant business districts. The ordinance establishes citywide procedures for their formation and includes the following provisions:
Creates procedures for the establishment and disestablishment of property and business improvement districts consistent with the PBID Law.
Authorizes the City Council to initiate proceedings to form a property and business improvement district upon submission of a written petition signed by property or business owners within the proposed district who would pay more than thirty percent of the proposed assessments. Provides that if a single owner exceeds twenty percent of the total proposed assessments, that amount shall not be included when determining whether the petition meets the thirty percent threshold.
Allows certain costs incurred in forming the district to be recovered through future assessments if formation is successful.
Specifies that the district term may be up to, but shall not exceed, twenty years. Allows the district to be renewed pursuant to the procedures set forth in the PBID Law, with any renewal not exceeding twenty additional years.
Requires that a written legal objection be submitted to the City Council before a person or entity may bring an action or proceeding challenging the validity of an assessment.
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Together, these provisions establish additional local regulations, adopted pursuant to the City’s charter authority, that build upon the PBID La w and enhance the ability to utilize Community Benefit Districts citywide.
Adoption of the ordinance will implement the direction previously provided by the City Council and establish local procedures that build upon the PBID Law to support the potential f ormation of Community Benefit Districts. In doing so, the City will add an additional tool to support economic development and vibrant business districts throughout Chula Vista.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the Chula Vista City Council members do not create a disqualifying real property -related financial conflict o f interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware and has not been informed by any Chula Vista 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
There are no current -year fiscal impacts to the General Fund as a result of the proposed municipal code amendment. Should a Community Benefit District be formed under these regulations in the current fis cal year, the fiscal impact of such an action would be assessed at that time.
ONGOING FISCAL IMPACT
There are no ongoing fiscal impacts to the General Fund as a result of the proposed code amendments. Should a Community Benefit District be formed under the se regulations, the fiscal impact of such an action would be assessed at that time.
ATTACHMENTS
None.
Staff Contact: Kevin Pointer, Principal Economic Development Specialist David Graham, Director of Economic Development