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September 1, 2026
ITEM TITLE
Community Benefit District: Preliminary Approval of the Final Assessment Engineer’s Report; Expressing Intention to Establish the Downtown Chula Vista Community Benefit District for Twenty Years; and Setting the Public Hearing on Such Establishment
Report Number: 26-0227
Location: Approximately twenty -seven (27 ) square blocks consisting of two hundred fifty -three (253 ) parcels on or near the historic Third Avenue business corridor, generally bounded by E Street to the north, including properties on both the north and south sides of E Street, and I Street to the south, including properties on the north side of I Street only. The eastern and western boundaries vary along the corridor and generally follow the predominantly commercial and governmental parcels located on either side of Third Avenue. The area also includes properties along H Street between Third Avenue and Fifth Avenue.
Department: Economic Development
G.C. § 84308 Regulations Apply: No
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the State California Environmental Quality Act (CEQA) Guidelines. Therefore, pursuant to State CEQA Guidelines Section 15060(c)(3), no environmental review is required.
Recommended Action
Adopt a resolution preliminarily approving the final Assessment Engineer’s Report, expressing the intention to establish the Downtown Chula Vista Community Benefit District for a period of twenty (20) years, setting the public hearing on such establishment, and authorizing the City Manager to vote in favor of establishing the district for all parcels within the district boundaries owned by the City.
SUMMARY
The existing Property -Based Business Improvement District (“PBID”) for Downtown Chula Vista was established in 2001 pursuant to the Property and Business Improvement District Law of 1994 (Government Code Section 36600 et seq.) (the “PBID Law”) to implement a number of enhanced services and programs within the downtown core. The original PBID was established for a five -year period and subsequently renewed for two (2) additional ten (10) year terms. The term of the existing PBID is set to expire on December 31, 2026.
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On March 17, 2026, the City Council adopted a Community Benefit Districts (“CBD”) Ordinance (Ordinance No. 3619) which established procedures for the formation of property and business improvement districts – referred to as CBDs – in Chula Vista. This Ordinance supplements but does not replace the procedures established by State law for the formation of PBIDs.
To continue providing enhanced services to Downtown Chula Vista, a petition drive was conducted from May through August to support the establishment of a CBD. Every potentially affected property owner within the proposed CBD boundaries received a petition. City staff have received and reviewed the completed petitions and verified that property owners representing at least 30% of the total assessment to be impos ed within the proposed Community Benefit District have signed and submitted petitions. Additionally, the Property Owner Representative has certified that the petition included a summary of the Management District Plan, which included at a minimum (1) a map showing the boundaries of the district; (2) information specifying where the complete management district plan can be obtained; and (3) information specifying that the complete management district plan shall be furnished upon request. At this stage, the C ity Council’s may choose to initiate proceedings to form the proposed district by adopting a resolution of intention generally describing the proposed improvements and services, and to call a public hearing.
The adoption of the attached Resolution of Inte nt will formally begin the process of establishing the Downtown Chula Vista Community Benefit District for a twenty -year (20 -year) term, which will then be subject to a vote of all affected property owners, pursuant to Proposition 218 , the PBID Law, and the City’s CBD Ordinance. Ballots will be sent out no later than 45 days before the public hearing as required by law , along with the formal Notice of Public Hearing to all property owners in the proposed district. The ballots will be opened and counted at t he public hearing scheduled for November 10, 2026. At the public hearing, the ballots will be tabulated and weighted according to each property’s proportional assessment. If the weighted ballots submitted in favor of the assessment exceed those submitted in opposition, the City Council may establish the district and levy the assessment. If this Downtown Chula Vista Community Benefit District is established, the CBD assessment will become effective on January 1, 2027.
ENVIRONMENTAL REVIEW
The proposed activi ty has been reviewed for compliance with the California Environmental Quality Act (CEQA), and it has been 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.
This determination is also predicated on State CEQA Guidelines Section 15004 which provides direction to lead agencies on the appropriate timing for environmental review. Any future projects resulting from implementation of the Community Benefit District formation may require environmental review and preparation of appropriate documentation in accordance with applicable state requirements, including CEQA and applicable provisions of the City Municipal Code.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
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DISCUSSION
The existing Property-Based Business Improvement District (“PBID”) for Downtown Chula Vista was established in 2001 pursuant to the Property and Business Improvement District Law of 1994 (Government Code Section 36600 et seq.) (the “PBID Law”) to provide services, programs and improvements that promote a cleaner, safer and more attractive historic downtown core. These activities supplement the base level of services provided by the City to other areas of the City outside the District and are intended to specially benefit assessed parcels within the district by supporting commerce, employment, property values, livability, and commercial and residential occupancy. Activities include reducing litter and debris, deterring crime, promoting the district, and providing beautification and other improvements that contribute to a competitive and well-managed mixed-use business district.
Services and programs provided within the district include public safety; sidewalk, landscape and alley maintenance; graffiti removal; sidewalk pre ssure washing; homeless outreach; special events; public relations and social media; and advocacy. Management of the district has helped generate economic activity in the downtown urban core through programming and special events such as the weekly Downtown Chula Vista Farmer’s Market on Park Way, Dia de los Muertos, and Lemon Fest.
The original PBID was established for a five -year period and subsequently renewed for two (2) additional ten-year (10 year) terms. The term of the existing PBID is set to expire on December 31, 2026. The PBID was originally administered by Third Avenue Village Association (“TAVA”). In 2023, all rights and obligations of TAVA were assigned to Greater Third Avenue Improvement Association (“GTAIA”), doing business as Downtown Chula Vista Association (“DCVA”).
On March 17, 2026, the City Council adopted a Community Benefit Districts (“CBD”) Ordinance which established procedures for the formation of property and business improvement districts – referred to as CBDs – in Chula Vista. The ordinance supplements, but does not replace, procedures established by State law, which allow for the formation of PBIDs. The proposed CBD will be established consistent with the CBD ordinance and in compliance with State law.
To support the establishm ent of a new district that would continue providing enhanced services and programing, a petition drive of all affected property owners was conducted between May and August by New City America, Inc. The petition drive was successful in gaining the signature s of affected property owners representing over thirty percent (30%) of the total assessment of the proposed CBD, which exceeds the threshold for proceeding with the establishment of the district.
The adoption of the attached Resolution of Intent will formally begin the process of establishing the CBD for a twenty-year (20-year) period, which will then be subject to a vote of all affected property owners, pursuant to Proposition 218, the PBID Law, and the City’s CBD Ordinance. Pursuant to the PBID Law, the City would need to preliminarily approve the final Assessment Engineer’s Report. The Assessment Engineer’s Report is prepared pursuant to the PBID Law and provides a detailed description of the improvements and activities to be provided, an estimate of the cost of the improvements and activities, the methodology for determining the assessment, and an assessment roll showing the amount proposed to be specially assessed against each parcel of real property within the assessment district. The proposed assessm ent is calculated based on a formula using each parcel’s proportionate building area, land area, and street frontage to reflect the special P a g e | 4
benefit received from district services and improvements. The assessment methodology also accounts for differences among property types and land uses, as further described in the Assessment Engineer’s Report.
The petition drive requires support from property owners representing at least thirty percent (30%) of the total proposed assessment to be levied ($693,762) to initiate the district formation process. This threshold, equivalent to $208,128.60 of the proposed assessment, has been exceeded as of the date of this report.
The next step in the process will be a formal vote by all affected property owners pursuant to Proposition 218 and the PBID Law. Ballots will be sent out no less than 45 days prior to the public hearing as required by state law, along with the formal Notice of Public Hearing to all property owners in the proposed district. The ballots will be op ened and counted at the public hearing scheduled for November 10, 2026. At the public hearing, the district will only be established, and the associated assessment will only be levied if the ballots returned in support exceed the ballots returned in opposition, weighted based on each property’s share of the total assessment. If this goal is reached, the CBD assessment will become effect on January 1, 2027.
The city voted for the establishment of the existing assessment district in 2001, and for its renewal in 2006, and 2016. City owned properties represent approximately 17 .5% of the weighted district assessment.
Consistent with the City’s past practice of voting in favor of assessment districts that benefit downtown and City properties, this action will also authorize the City Manager to cast the City’s ballot in favor of establishing the district.
The proposed actions represent the next steps in allowing property owners to determine whether to continue the enhanced services, programs, and investments that have supported Downtown Chula Vista for more than 25 years. Timely approval will help ensure continuity of these services, sustain the progress made downtown, and support its continued growth as a vibrant commercial, residential, and visitor destination.
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
If the new CBD is ultimately established, it is anticipated to result in a current-year fiscal impact to the General Fund of approximately $44,000. This includes increases to both the City’s District assessment and a General Benefit payment the City makes to the District. This amount is anticipated to be absorbed within the existing General Fund expenditure budget, and no additional appropriation is recommended at this time.
The City’s District assessment under the new CBD is expected to total $121,448.02, an increase of approximately $36,000 from prior years. The assessment amount is based on the assessed value calculated P a g e | 5
pursuant to the formula established by the final Assessment Engineer’s Report and applied cumulatively to all properties owned by the City of Chula Vista that are located within the CBD boundaries.
The City’s General Benefit payment under the new CBD is expected to total $14,158, an increase of approximately $8,000 from prior years.
ONGOING FISCAL IMPACT
Approval of the recommended action advances a CBD formation process that would result in City funding obligations for the next twenty (20) years.
The City’s District assessment would be calculated based on the assessed value and established by the formula contained in the final Assessment Engineer’s Report as it applies to any property/properties owned by the City of Chula Vista during the twenty (20) year period.
Additionally, the District’s budget and assessments to City would be subject to annual increases not to exceed 7% per year. Increases will be determined by the Owners’ Association/District Management Corporation and may vary between 0% and 7% annually but may not exceed 7%. According to the DCVA, the assessment has only been increased twice and has never been increased by the full amount authorized annually.
ATTACHMENTS
1. Final Assessment Engineer’s report dated August 11, 2026 Staff Contact: Kevin Pointer, Principal Economic Development Specialist David Graham, Economic Development Director