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July 14, 2026
ITEM TITLE
Community Facilities District Annexation: Public Hearing and Election Regarding Annexation of Eastlake Self Storage into Community Facilities District No. 97-2
Report Number: 26-0218
Location: Located generally adjacent to State Route (SR) 125, south of Eastlake Drive, and north of Otay Lakes Road, as shown more particularly on the annexation boundary map.
Department: Development Services
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 (CEQA) State Guidelines. Therefore, pursuant to CEQA Guidelines Section 15060(c)(3), no environmental review is required.
Recommended Actions
Conduct the public hearing, adopt the following resolutions, and place the ordinance on first reading:
A. Resolution making certain determinations and authorizing submittal of levy of special taxes to the qualified electors within proposed Annexation No. 14 to Community Facilities District No. 97-2 (“CFD No. 97-2”), Improvement Area “C”
B. Resolution declaring the results of the special election relating to the levy of special taxes within Annexation No. 14 to CFD No. 97-2, Improvement Area “C” C. Resolution making certain determinations and authorizing submittal of levy of special taxes to the qualified electors within proposed Improvement Area “D”, and Annexation No. 1 to Community Facilities District No. 97-2 (“CFD No. 97-2”)
D. Resolution declaring the results of the special election relating to the levy of special taxes within newly designated Improvement Area “D”, Annexation No. 1 to CFD No. 97-2 E. Ordinance authorizing the levy of a special tax in Improvement Area “D”, A nnexation No. 1 (First Reading)
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SUMMARY
On May 19, 2026, the City of Chula Vista (“City”) City Council took the first step in the annexation and designation of a new improvement area within CFD No. 97-2 by declaring its intention to annex the territory into Improvement Area “C” and designate a new Improvement Area “D” and annexation thereto . T he recommended actions are the next steps in the formal proceedings to complete the two (2) actions above for the Eastlake Self Storage project which include s: (a) conducting a public hearing , and (b) immediately following such public hearing, conducting an election of the qualified electors regarding the authorization to levy special taxes within each improvement area and, following the canvass of the ballots received, declaring the results of such election. Special taxes levied within Improvement Area “C” fund the costs of the Resource Monitoring Program as well as Preserve Operations and Maintenance consistent with the requirements of the Otay Ranch Resource Management Plan Phases I and II, plus a pro-rata share of Administrative Expenses of CFD No. 97-2.
In addition, the City is proposing the designation of the new Improvement Area “D” within CFD No. 97-2 to provide a dedicated funding mechanism for long -term wetland mitigation obligations within the Salt Creek Riparian Corridor of Otay Ranch Open Space Preserve and Annexation No.1 . Special taxes levied in Annexation No. 1 within Improvement Area “D” will fund the ongoing costs necessary to implement and carry out the Eastlake Self Storage Mitigation Project Long -Term Management Plan (“Long -Term Management Plan”) dated June 2025, prepared for the mitigation site located within the Salt Creek riparian corridor in the Otay Ranch Open Space Preserve (the “Mitigation Site”).
The City has retained the services of Harris & Associates as special tax consultants and Best Best & Krieger LLP as legal counsel to advise and provide assistance during the proceedings. The recommended actions will complete the formal proceedings of Annexation No. 14 to Improvement Area “C”, and designation of Improvement Area “D” and Annexation No. 1 thereto to CFD No. 97-2.
ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with CEQA and determined that the activity is not a “Project” as defined under Section 15378 of the 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 CEQA Guidelines, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
Background
The City Council formed CFD No. 97 -2 in July of 1998 to establish a long -term financing mechanism to monitor and maintain open space within the Otay Ranch Open Space Preserve (“Preserve”). CFD No. 97 -2 was initially divided into two (2) Improvement Areas, designated as Improvement Area “A” and Improvement Area “B”. In 2003 , Improvement Area “C” was established to include lands not originally included within the territory of CFD No. 97 -2. Improvement Area “C” provides funds for 1) Resource P a g e | 3
Monitoring Program and 2) Preserve Operations and Maintenance activities. All properties annexing in CFD No. 97-2 since 2003 annex into Improvement Area “C”. The requirement for a project to annex into CFD No. 97-2 is set forth as a condition of approval as part of the environmental review and entitlement process.
Improvement Area “D” is proposed to establish a dedicated financing mechanism for the long -term management of wetland m itigation lands within the Salt Creek riparian corridor of the Preserve.
Improvement Area “D” is intended to accommodate future annexations for projects requiring long -term funding for riparian and wetland mitigation management activities. The initial territory proposed for annexation into Improvement Area “D’ is associated with the Eastlake Self Storage Project and is intended to provide funding for the ongoing costs necessary to implement and carry out the Long-Term Management Plan.
Revenues generated through the special tax will fund the activities required per the Long-Term Management Plan for the Mitigation Site. These activities include, but are not limited to, monitoring, maintenance, reporting, and adaptive management activities , such as invasive species control, trash removal, site access control, biological monitoring, reporting, and as-needed remedial or adaptive management actions necessary to ensure the long -term sustainability, habitat function, and regulatory compliance of preserve and mitigation areas following completion of initial mitigation and monitoring requirements.
The activities described above are limited to those discrete tasks identified in the Long -Term Management Plan and are intended to ensure the long-term sustainability and ecological function of the Mitigation Site in perpetuity following completion of initial mitigation and monitoring requirements.
Property to be Annexed
The property proposed to be annexed to CFD No. 97 -2 will be included in Improvement Area “C” as Annexation No. 14, and the property will also be included in Annexation No. 1 of the proposed desi gnated Improvement Area “D”. The project known as Eastlake Self Storage consists of 9.35 acres and was approved for a 1,200-unit self-storage facility by the City Council in 2020 through the adoption of Ordinance No. 2020- 3485 (Amendments to Eastlake II Planned Community District Regulations) and approval of Resolution Nos. 2020-62 (Mitigated Negative Declaration), 2020-63 (Design Review Permit) and 2020 -64 (Conditional Use Permit).
Public notification and community engagement were conducted throughout the planning process. A formal Notice of Application was distributed on January 31, 2017, for the initial study, design review, and plan amendments. Following that, a dedicated community meeting was held for residents on May 15, 2017, at the Eastlake Shores Beach Club Pavilion to discuss the project. Public hearings were also noticed and held before the Planning Commission on February 12, 2020, and the City Council on March 17, 2020 , and April 7, 2020, giving the public multiple opportunities to review plans and provide input.
The environmental impacts of the project were evaluated in Mitigated Negative Declaration (MND) IS16 - 0004, State Clearinghouse Number 2019099048. Specifically, impacts to the Coastal Sage scrub, an upland habitat, were disclosed and the project was required to dedicate mitigation-land off-site and annex into CFD No. 97-2 which would provide long-term funding for the monitoring and management of the resource. The maximum special taxes for both annexations are as set forth below.
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The subject property was previously owned by the City and was part of a land swap option between the City and the property owner of a 3.94-acre parcel in the Lower Sweetwater Valley for additional parkland for the Lower Sweetwater Community Park site. In 2011, the C ity Council authorized the option for the land swap and was later exercised in 2014 consistent with the 2011 authorization.
Maximum Special Taxes Improvement Area “C”
The initial maximum special tax rates were established when Improvement Area “C” was created. They have been adjusted annually as set for th in the original Rate and Method of Apportionment. The approved maximum special tax rates for fiscal year 2025-2026 for Improvement Area “C” of CFD No. 97-2 area are as follows:
Improvement Area “C”
Table 1 – Maximum Special Tax for Resource Monitoring
Special Tax Category Maximum Special Tax (Resource
Monitoring)
Category I – Residential (per square foot) $0.0096
Category I – Non-Residential (per acre) $157.06
Category II – Final Mapped Property (per acre) $157.06
Category III – Undeveloped Property (per acre) $101.37
Table 2 – Maximum Special Tax for Operations & Maintenance Special Tax Category Maximum Special Tax (Operation &
Maintenance)
Category I – Residential (per square foot) $0.0153
Category I – Non-Residential (per acre) $249.34
Category II – Final Mapped Property (per acre) $249.34
Category III – Undeveloped Property (per acre) $160.94
The rates for special taxes shown in Tables 1 and 2 above are proposed to be increased each fiscal year, beginning fiscal year 2026 -2027, by a factor equal to the annual percentage change in the San Diego Metropolitan Area Consumer Price Index for All Urba n Consumers (CPI-U, All Items) or zero percent (0%), whichever is greater. The special taxes are proposed to be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the administrator of CFD No. 97 -2 may directly bill the special tax and may collect special taxes at a different time or in a different manner if necessary.
Maximum Special Taxes Improvement Area “D”
The maximum special tax rates for the new Improvement Area “D” are based on a budget pr epared by a qualified biologist and approved by City environmental staff for the annual maintenance and monitoring of the wetland mitigation lands. The maximum special tax is calculated based on the annual budget for the authorized services, the establishment or replenish ment of a reserve fund, anticipated special tax delinquencies, and administrative expenses. For additional information regarding the annual expenses and the Rate and Method of Apportionment for Improvement Area “D”, please refer to the attached CFD Report dated June 2026, prepared by the special tax consultant, Harris & Associates.
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The approved maximum special tax rates for fiscal year 2025-2026 for all taxable property located with Improvement Area “D” of CFD No. 97-2 are as follows:
Improvement Area “D”
Table 1 – Maximum Special Tax
Long Term
Management Fund
Requirement
Long Term
Management
Reserve &
Administrative
Expenses
Total Long-Term
Management Costs
$990 / acre $473 / acre $1,463 / acre
The rates for special taxes shown in Tables 1 above are proposed to be increased each fiscal year, beginning fiscal year 2026-2027, by a factor equal to the annual percentage change in the San Diego Metropolitan Area Consumer Price Index for All Urban Consumers (CPI-U, All Items) or zero percent (0%), whichever is greater.
The special taxes are proposed to be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the administrator of CFD No. 97 -2 may directly bill the special tax and may collect special taxes at a different time or in a different manner if necessary.
Description of Public Hearing Proceedings
The subject public hearing is being held in accordance with California Government Code Section 53339.5 et seq. The first step in the subject proceeding is the public hearing. If a majority protest exists for either (or both) annexations, the City cannot move forward with either (or both) annexations and will be prohibited from continuing proceedings for at least one (1) year. A majo rity protest exists if written protests are submitted by (a) the owners of one -half or more of the area of land in the territory included in the existing CFD No. 97 -2 or proposed annexation area; or (b) 50% or more of the registered voters (or 6 registered voters, whichever is greater) within either the existing CFD No. 97-2 or proposed annexation area. Otherwise, if a majority protest is not received, the City may submit the question to the qualified electors for each annexation, which would be the propert y owner. The property owner has waived time limitations and requirements to comply with the Elections Code, as authorized in the CFD Law. The recommended actions complete Annexation No. 14 to Improvement Area “C” and the designation of Improvement Area “D” and Annexation No. 1 thereto.
There are two (2) resolutions for each annexation action item, which if approved would do the following:
A) Resolution making certain determinations and authorizing submittal of the levy of special taxes to the qualified electors is the formal action making determinations relating to the annexation, setting forth specific information about the annexation, and calling an election relating to the levy of special taxes within the annexation.
B) Resolution declaring results of the special election provides for the approval of the certificate of the City Clerk, acting as election official, relating to the canvass of votes on the annexation and, if the qualified electors approve the annexation, the Resolution would formally approve and authorize the annexation, including designation of Improvement Area “D”, and the levy of special taxes within each annexation.
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C) Additionally, for Improvement Area “D” only, an Ordinance authorizing the City Council, acting as the legislative body of CFD No. 97-2, Improvement Area “D”, to levy an annual special tax on taxable property located within the boundaries of Improvement Area “D”.
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
There are no current-year fiscal impacts to the General Fund or the Development Services Fund as a result of these actions. All costs of th ese annexations to CFD No 97 -2, including the desig nation of Improvement Area “D”, are borne by the developer and the on-going administration will be funded entirely by CFD No. 97-
2. ONGOING FISCAL IMPACT
There are no ongoing year fiscal impacts to the General Fund or the Development Services Fund as a result of these actions. Funding for CFD No. 97-2 is generated by special taxes levied annually on property owners.
The taxes are secure d by each property and neither the General Fund nor Development Services Fund has any obligation to provide funding.
ATTACHMENTS
1. Attachment 1 - CFD No. 97-2, Improvement Area “D” CFD Report Staff Contact: Alyssa Moreno, Senior Management Analyst, Development Services Tom Tomlinson, Facilities Financing Manager, Development Services Roy Sapa’u, Deputy City Manager/Director of Development Services