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July 28, 2026
ITEM TITLE
Community Facilities District: Declare Intention to Form Community Facilities District No. 2025-1 (Village 8 East)
Report Number: 26-0184
Location: Located west of State Route 125 and southeast of the intersection of Rock Mountain Road and Magdalena Avenue, as shown on the boundary map
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 CEQA Guidelines Section 15060(c)(3), no environmental review is required.
Recommended Actions
Adopt the following resolutions:
A. Approving the boundaries of proposed Community Facilities District No. 2025 -1 (Village 8 East) (“CFD No. 2025 -1”), declaring the intention of the City Council to authorize the formation of the proposed CFD No. 2025-1, levy a special tax, and set a time and place for the public hearing; and B. Declaring necessity to incur bonded indebtedness.
SUMMARY
The developer /owner of Village 8 East, HomeFed Corporation, requested formation of a Community Facilities District (CFD) to finance the construction of certain public facilities and payment of Development Impact Fees (DIFs). This action initiates the formation of the CFD.
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 State CEQA Guidelines because the proposed activity consists of a governmental fiscal/administrative activity which does not result in a physical change in the P a g e | 2
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
The Mello -Roos Community Facilities Act of 1982 (the “Mello -Roos Act”) authorizes local agencies to establish Community Facilities Districts (CFD) as a financing mechanism for eligible public facilities, public services, and related financing costs. Consistent with this authority, the City Council adopted City Council Policy 505-04 (Statement of Goals and Policies Regarding Establishment of Community Facilities Districts) and codified implementing procedures in Chula Vista Municipal Code (CVMC) Chapter 3.60 (Community Facilities Districts – General). The proposed CFD No. 2025-1 is consistent with the Mellow-Roos Act, City Council Policy 505-04, and CVMC Chapter 3.60.
Consistent with these authorities, the proposed Village 8 East development includes public infrastructure and facilities that are appropriate for financing through the formation of CFD No. 2025-1. The Village 8 East project includes up to 3,276 residential units consisting of for-sale, affordable, age-qualified, and multi-family housing, along with a mixed-use Village Core featuring retail/commercial uses, an elementary school site, a
7.3-acre neighborhood park, and a future pedestrian bridge connecting Village 8 East to Village 9. The project also provides substantial open space and recreational amenities, including 253.6 acres of Preserve Open Space, a 22.6 -acre active recreation site, improvements to the Otay Ranch Community Park South , and regional water quality infrastructure.
HomeFed Corporation requested the formation of proposed CFD No. 2025-1, Improvement Areas 1 and 2, to finance the acquisition and construction of public infrastructure and facilities associated with the Village 8 East development. The proposed financing program totals approximately $213 million and includes approximately $101 million for public infrastructure improvements, including extensions to Main Street and La Media Road, other backbone public streets and utilities, parkland acquisition, and other eligible public improvements. The financing program also includes approximately $112 million for eligible City development impact and capacity fees, including Park Acquisition and Deve lopment (PAD) fees, Public Facilities Development Impact Fees (PFDIF), sewer capacity fees, Salt Creek Sewer Basin fees, Eastern Transportation Development Impact Fees (ETDIF) which, if the Transportation and Roadway Infrastructure Program (TRIP) is adopted, would extend to future TRIP fees, and future pedestrian bridge fees.
Proposed Special Tax
The Rate and Method of Apportionment of Special Tax (RMA) (Attachments 1 & 2) establishes how the Annual Special Tax Requirement is determined each fiscal year and apportioned among the taxable properties within CFD No. 2025-1 based on land use classifications and building square footage categories .
The Annual Special Tax Requirement includes amounts necessary to pay debt service, a dministrative expenses, reserve requirements, and anticipated delinquencies. The special tax is levied first on residential property for which a building permit is issued prior to June 30 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 P a g e | 3
amount will be levied on each parcel of undeveloped property in accordance with the RMA. In no event shall the tax be levied on any parcel in an amount higher than the Maximum Special Tax.
Tables 1-4 below detail the Assigned Special Tax Rates for fiscal year 2026-2027 for each zone in Improvement Area 1.
Table 1 – Improvement Area 1 Zone 1
Assigned Special Tax Rates for Developed Property
Land Use Class Land Use Type Building Square
Footage
Assigned Special Tax (per
Residential Unit)
1 Single Family Residential
Property
<= 1,400 $3,021
2 Single Family Residential
Property
1,401 – 1,700 $3,112
3 Single Family Residential
Property
1,701 – 2,000 $3,374
4 Single Family Residential
Property
>= 2,001 $4,181
5 Non-Residential Property n/a $0
Table 2 – Improvement Area 1 Zone 2
Assigned Special Tax Rates for Developed Property
Land Use Class Land Use Type Building Square
Footage
Assigned Special Tax
(per Residential Unit)
1 Single Family Residential
Property
<= 1,600 $3,240
2 Single Family Residential
Property
>= 1,601 $3,287
3 Non-Residential Property n/a $0
Table 3 – Improvement Area 1 Zone 3
Assigned Special Tax Rates for Developed Property
Land Use Class Land Use Type Building Square
Footage
Assigned Special Tax (per
Residential Unit)
1 Single Family Residential
Property
<= 1,500 $3,150
2 Single Family Residential
Property
1,501 – 1,715 $3,323
3 Single Family Residential
Property
1,716 – 1,930 $3,743
4 Single Family Residential
Property
1,931 – 2,145 $3,925
5 Single Family Residential
Property
2,146 – 2,360 $4,276
6 Single Family Residential
Property
2,361 – 2,575 $4,445
7 Single Family Residential
Property
>= 2,576 $4,815
8 Non-Residential Property n/a $0
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Table 4 – Improvement Area 1 Zone 4
Assigned Special Tax Rates for Developed Property
Land Use Class Land Use Type Building Square
Footage
Assigned Special Tax
(per Residential Unit)
1 Affordable Residential
Property
n/a $40
2 Multifamily Residential
Property
n/a $40
3 Non-Residential Property n/a $40
Tables 5-7 below detail the Assigned Special Tax Rates for fiscal year 2026-2027 for each zone in Improvement Area 2.
Table 5 – Improvement Area 2 Zone 1
Assigned Special Tax Rates for Developed Property
Land Use Class Land Use Type Building Square
Footage
Assigned Special Tax (per
Residential Unit)
1 Single Family Residential
Property
<= 1,400 $3,021
2 Single Family Residential
Property
1,401 – 1,700 $3,112
3 Single Family Residential
Property
1,701 – 2,000 $3,374
4 Single Family Residential
Property
>= 2,001 $4,181
5 Non-Residential Property n/a $0
Table 6 – Improvement Area 2 Zone 2
Assigned Special Tax Rates for Developed Property
Land Use Class Land Use Type Building Square
Footage
Assigned Special Tax
(per Residential Unit)
1 Single Family Residential
Property
<= 1,800 $3,323
2 Single Family Residential
Property
1,801 – 2,000 $3,743
3 Single Family Residential
Property
2,001 – 2,200 $3,925
4 Single Family Residential
Property
2,201 – 2,400 $4,276
5 Single Family Residential
Property
2,401 – 2,600 $4,445
6 Single Family Residential
Property
> 2,601 $4,815
7 Non-Residential Property n/a $0
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Table 7 – Improvement Area 2 Zone 3
Assigned Special Tax Rates for Developed Property
Land Use Class Land Use Type Building Square
Footage
Assigned Special Tax
(per Residential Unit)
1 Affordable Residential
Property
n/a $40
2 Multifamily Residential
Property
n/a $40
3 Non-Residential Property n/a $40
On each July 1 st commencing July 1, 2027 , through July 1, 2037, the Assigned Special Tax for Developed Property within each Zone shall be increased by two percent (2.0%) of the amount in effect in the prior fiscal year.
Acquisition-Financing Agreement
An Acquisition-Financing Agreement, which describes the facilities and DIF that may be financed with the bonds and establishes the terms and conditions for acquiring and financing the public improvements, will be presented to the City Council for approval at a future meeting.
Resolutions and Future Action
One of the resolutions associated with this action is known as the Resolution of Intention, which declares the City Council’s intent to establish the proposed CFD No. 2025 -1, describes the boundaries of th e proposed CFD, approves the RMA, authorizes the levy of a special tax, sets the time and place for the public hearing, and directs the preparation of a CFD Report. The CFD Report is a separate report that describes the public facilities and eligible development impact fees proposed to be financed, provides estimated financing costs, and identifies related incidental expenses, including bond issuance and administrative costs. The boundary map (Attachment 3) will be recorded within fifteen (15) days of approval of the Resolution of Intention.
The second resolution associated with this action is the Resolution Determining the Necessity to Incur Bonded Indebtedness, which declares the City’s intent for the proposed CFD to issue bonds to finance eligible public facilities and development impact fees, establishes the maximum principal amount of bonded indebtedness that may be issue d, and calls for a public hearing on the proposed bonded indebtedness. The resolution establishes a not-to-exceed principal amount of $50,000,000 for Improvement Area 1 and $75,000,000 for Improvement Area 2.
If both Resolution of Intention and the Resolution Determining the Necessity to Incur Bonded Indebtedness are adopted, consolidated public hearings on the proposed form ation of CFD No. 2025 -1 and the proposed bonded indebtedness will be held at the City Council meeting on September 1, 2026, at 5:00 p.m. At that meeting, the City Council will consider resolutions forming and establishing CFD No. 2025-1 authorizing the incurrence of bonded indebtedness, and submission of the authorization for the levy of special taxes to the qualified electors, which in this case is the Developer.
DECISION-MAKER CONFLICT
Staff reviewed the property holdings of the City Council members an d 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 P a g e | 6
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 costs associated with the formation of the CFD are borne by the applicant ; therefore, these actions will have no current-year fiscal impact on the General Fund or Development Services Fund.
ONGOING FISCAL IMPACT
This action has no ongoing fiscal impact to the General Fund or Development Services Fund as result of these actions. Upon formation of CFD No. 2025-1, the annual administrative costs associated with the CFD will be funded through the levy of special taxes in accordance with the RMA.
ATTACHMENTS
1. Rate and Method of Apportionment Improvement Area 1
2. Rate and Method of Apportionment Improvement Area 2
3. Proposed Boundary Map of CFD No. 2025-1
Staff Contact: Alyssa Moreno, Senior Management Analyst, Development Services Rebecca Bridgeford, Deputy Director, Development Services Roy Sapa’u, Deputy City Manager/Director of Development Services