CITY OF MENIFEE
SUBJECT: Community Benefit Agreement (CBA) for Seaflower BESS Project
MEETING DATE: March 16, 2026
TO: Finance Committee
PREPARED BY: Margarita Cornejo, Director of Strategic Programs and Initiatives
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Review proposed Community Benefit Agreement (CBA) for Seaflower BESS Project and recommend submittal to the City Council for approval.
DISCUSSION
In its on-going efforts to strengthen the City’s financial position, one area staff regularly examines is analyzing development activity’s impact on city services and revenue support.
Accordingly, the City has reviewed the Seaflower Battery Energy Storage System (BESS) Project, which is further detailed in the next section. Based on the proposed project and alternative uses for the site, staff has negotiated a proposed Community Benefit Agreement (CBA) that will provide the City with:
- One-time $905,065 community benefit fee payment.
Project Description
The Seaflower BESS Project (Plot Plan No. PLN 25-0027) proposes the construction and operation of a 100-Megawatt (MW) / 4-hour utility scale (lithium ion phosphate or similar) battery energy storage system that will interconnect to the nearby Valley Substation that is owned and operated by Southern California Edison. The primary electrical equipment includes battery modules and power conversion equipment. The batteries will be installed in pre-fabricated enclosures and will include relay and communications systems for automated monitoring and managing of the batteries to ensure design performance.
City of Menifee Staff Report
Community Benefit Agreement (CBA) for Seaflower BESS Project March 16, 2026
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The project would include a security fence/wall as well as a permanent parking area for operations and maintenance workers. No permanent onsite workers are expected, since as previously mentioned the facility would have a system that allows remote monitoring. The project site would be visited periodically throughout the year for equipment inspections, monitoring and testing, and maintenance as needed.
The following applications are associated with the proposed project:
Major Plot Plan No. PLN 25-0027
Major Conditional Use Permit No. PLN 25-0019 (for the battery energy storage system use)
Project Location
The project is located on an approximately 3.84-acre site located east and north of Matthews Road, south of McLaughlin Road, and west of Menifee Road (APNs 331-250-002 and -021). The current proposal includes two points of access on Palomar Road and one on Matthews Road.
Proposed Community Benefit Agreement (CBA)
Four development scenarios were evaluated based on potential uses for the proposed site:
Scenario 1: Battery Energy Storage System (BESS)
Scenario 2: Standard Warehouse
Scenario 3: Warehouse with Point-of-Sale Fulfillment Center (30% local direct sales) Scenario 4: Office Space
Based on the projections, the Scenario 1 - Battery Energy Storage System scenario offers the largest net benefit to the City’s General Fund. The key driver in this case is the high assessed value, which significantly boosts property tax revenues (including property tax in lieu of VLF) under Scenario 1.
As a result, the Fiscal Impact Analysis concluded no additional Community Benefit Fee is required under this preferred scenario. However, the Seaflower BESS Applicant is offering to the City of Menifee a one-time Community Benefit fee payment of $905,065.
The action requested from the Finance Committee is to review the proposed Seaflower BESS Project CBA and make a recommendation to move forward with presenting the proposed agreement to the Planning Commission and subsequently City Council.
FISCAL IMPACT
Acceptance of the proposed CBA agreement will result in one-time general fund revenues of $905,065.
City of Menifee Staff Report
Community Benefit Agreement (CBA) for Seaflower BESS Project March 16, 2026
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ATTACHMENTS
1. Project Site Map
2. Proposed Community Benefit Agreement (CBA) with Seaflower BESS.