RESOLUTION NO. ___
RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF
RICHMOND, CALIFORNIA, TO ESTABLISH THE CITY OF RICHMOND COMMUNITY FACILITIES DISTRICT NO. 2022-1 ( POINT MOLATE), AND TO
DESIGNATE THREE IMPROVEMENT AREAS THEREIN, TO AUTHORIZE THE
LEVY OF A SPECIAL TAX TO PAY THE COST OF ACQUIRING OR
CONSTRUCTING CERTAIN FACILITIES, PROVIDE CERTAIN SERVICES AND
PAY FOR CERTAIN INCIDENTAL EXPENSES AND TO PAY DEBT SERVICE
ON BONDED INDEBTEDNESS
WHEREAS, the City of Richmond, California (the “City”) is the fee title owner of 100% of the real property (the “Property”) described in (i) Exhibit A-1 to that certain Disposition and Development Agreement for Point Molate Mixed -Use Development, by and between the City and Winehaven Le gacy LLC, a Delaware limited liability company (“Winehaven”), dated as of September 30, 2020 (the “DDA”) , and (ii) Exhibit A to that certain Development Agreement, by and between the City and Winehaven, dated as of October 21, 2020 (the “DA” and together with the DDA, the “Development Agreements”); and
WHEREAS, the Property was formerly within the boundaries of Point Molate Naval Fuel Depot (“Naval Fuel Depot”) prior to its closure and was acquired from the United States, subject to conditions during base closure and is owned by the City; and WHEREAS the Navy Fuel Depot closed in 1995 and since disposition to the City, the City has been engaged in various processes to determine how to use the land. One project proposed by the Guidiville Band of Pomo Indians and Upstream Point Molate, LLC (collectively “Upstream”) included a Casino and went through environmental review in 2011 but was turned down by the voters in an advisory measure wh ich caused the Council to decline the project and led to litigation. The lawsuit resulted in a settlement (“Amended Judgment”) where the City agreed to consider other developers over a specified period by the “City Sales Deadline” , the City would sell the property and split the proceeds with Upstream . If no sale occurred in that time, Upstream could purchase the property for $400 and had four years to sell or develop the Property and in such case, it would share proceeds with the City. The City Sales D eadline where Upstream could exercise the Option to purchase is on May 21, 2022 if the City does not accomplish a sale by then; and
WHEREAS, as the DA provides that the City will cooperate with Winehaven by forming a community facilities district ( “CFD”) meeting certain parameters, and the DA requires the Resolution of Formation must be adopted by April 20 , 2022 to meet statutory requirements and the City Sales Deadline. The Council has a meeting set for April 19, 2022. The CFD procedures require 30 days before public hearing on the Resolution of Formation , that the legislative body adopt a Resolution of Intent calling the public hearing . The date for consideration of the Resolution of Intent is set for the City Council’s regular meeting of March 15, 2022; and WHEREAS, pursuant to the terms an d conditions set forth in the Development Agreements, subsequent to formation of the CFD (as defined below), the City intends to convey the Property to Winehaven which will develop the Property as set forth therein, subject to the provisions hereof; and
2 WHEREAS, the Development Agreements provide for the establishment of a CFD, and multiple improvement areas therein, to provide for financing of certain facilities and services described therein, but the DA clearly established that while the City would cooperate with developer in the establishment of one or more CFDs, it stated that the City will not be obligated to pay any cost related to formation or implementation of any Financing Mechanism from its General Fund (at Section 4.2 Assessment Financing); and WHEREAS, the Resolution of Intent does not mandate that the City form the CFD, as the matter is a public hearing and the Council is entitled to consider all evidence, documentation and testimony produced at the hearing and make such decision as shall be in the City’s interest; and
WHEREAS, the City Council has had numerous studies and presentations on the formation of the CFD, including on its regular agendas and at a special study session held on February 24, 2022, and has studies presented by Winehaven’s financial consultant, the City’s finance team, and even studies done by independent private parties —with significant conflicting information. This information has been discussed with Winehaven and led to several changes in Winehaven’s proposals. Issues have included the projected costs of the infrastructure to be built, projections as to the possible value of the different housing products, what is a reasonable time to project the possible construction and sales of the units, what the values will be, wh at inflation cost and revenue escalations should be used, what the City’s operational costs would be in operating fire and police facilities necessary to protect pubic health and safety , and similar issues. There have been significant differences in opinion on these and other issues; and WHEREAS, due to the pending City Sales Deadline stemming from the Amended Judgment in the Upstream matter, the City needs to adopt a Resolution of Intent on March 15, and as such action does not compel the Council to Adopt a Resolution of Formation on the April 19 as it is a public hearing matter where evidence can be presented, the City Council can adopt the Resolution of Intent without prejudice to its ability to consider the Resolution of Formation entirely on its merits. In that vein, the City Council is free to consider all the variable s in determining if the CFD as established has the potential to impact the General Fund, but also has the ability to consider other related matters such as the likelihood that Winehaven can perform its obligations under the DA, the performance to date of all provisio ns of the DA, Winehaven’s financial sources and all other relevant information relevant to the carrying out and performance of the DA, the DDA and other obligations of Winehaven; and WHEREAS, for all the above considerations, the City will continue to mon itor and discuss with Winehaven the foregoing issues and related issues during the period up and until consideration of the Resolution of Formation and invites those in the public who are interested to look into the information which has been developed con cerning the CFD and the infrastructure financing and funding of services and operations and submit their information and opinions at the hearing on April 19, 2022; and
WHEREAS, pursuant to Section 53318(a) of the Mello-Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code (the “Act”), the City Council of the City (the “City Council”) has received a written request from two of its City Councilpersons to commence proceedings to form a community facilities district with boundaries coterminous with the Property to be known as the “City of Richmond Community Facilities District No. 2022 -1 (Point Molate)” (the “Community Facilities District” or “CFD No. 2022 -1”), and to designate three improvement areas therein, t o finance (1) the purchase, construction, expansion, improvement or rehabilitation of the facilities described in Exhibit B hereto (which 3 attachment is incorporated herein by this reference) (collectively, the “Facilities”), including, but not limited to, those facilities to be owned and operated by the City or utility companies, including all furnishings, equipment and supplies related thereto (collectively, the “City Facilities”), which City Facilities have a useful life of five years or longer, and those facilities described in Exhibit B hereto to be owned and operated by the East Bay Municipal Utility District (“EBMUD”), including all furnishings, equipment and supplies related thereto (collectively, the “EBMUD Facilities,”), which EBMUD Facilities have a useful life of five years or longer, (2) the services described in Exhibit B hereto (collectively the “Services”) and (3) the incidental expenses to be incurred in connection with financing the Facilities and/or Services, and forming the Community Facili ties District and designating the three improvement areas therein, and administering the Community Facilities District, and the three improvement areas therein (the “Incidental Expenses”); and
WHEREAS, it is the intention of the City Council to consider f inancing the Facilities, Services and the Incidental Expenses through the formation of the Community Facilities District, and the three improvement areas therein, and the sale of bonds (excluding the Services) in an amount not to exceed $ 292,000,000, consisting of $61,000,000 for Improvement Area No. 1 of the Community Facilities District, $ 47,000,000 for Improvement Area No. 2 of the Community Facilities District and $ 184,000,000 for Improvement Area No. 3 of the Community Facilities District (collectively, the “Obligations”) and the levy of a special tax in each improvement area to finance Facilities directly and to pay debt service on the Obligations relating to the applicable improvement area , provided that the aggregate bond authorization and special tax levy are approved at an election to be held for each improvement area therein; and WHEREAS, the legal descriptions for Improvement Area No. 1 of the Community Facilities District, Improvement Area No. 2 of the Community Facilities District and Improvement Area No. 3 of the Community Facilities District are included in Exhibit A hereto.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF RICHMOND THAT:
Section 1. Each of the above recitals is true and correct.
Section 2. Intention. The City Council declares its intention to conduct proceedings pursuant to the Act for the establishment of the Community Facilities District with the exterior boundaries coterminous with the Property , and to designate the three improvement areas therein subject to the provisions hereof and that the financing of the CFD not impact or burden the City’s General Fund . It is further proposed that the boundaries of the Community Facilities District, and the three improvement areas the rein, shall be as described in Exhibit A hereto.
The City Clerk is hereby directed to sign the original boundary map of the Community Facilities District and record it with all proper endorsements thereon with the County Recorder of the County of Orange within 15 days after the adoption of this resolution, all as required by Section 3111 of the Streets and Highways Code of the State of California.
Until the Property is conveyed to Winehaven, the Property owned by the City that is intended to be conveyed to Winehaven will be subject to the special tax of the Community Facilities District on the same basis as private property within the Community Facilities District , and the City hereby affirmatively waives any defense based on the fact of public ownership of the Property currently owned by the City, to any action to foreclose on such Property in the event of nonpayment of the special tax imposed by the Community Facilities District. 4 Section 3. Name of the Community Facilities District . The name of the propo sed Community Facilities District shall be “City of Richmond Community Facilities District No. 2022- 1 (Point Molate).”
Section 4. Types of Facilities and Services to be Financed by the Community Facilities District. The Facilities proposed to be provided within the Community Facilities District are facilities authorized by the Act. The City is authorized by law to construct, acquire, own and operate the City Facilities and to provide the Services described in Exhibit B hereto for the benefit of the Commu nity Facilities District. EBMUD is authorized by law to construct, acquire, own and operate the EBMUD Facilities described in Exhibit B hereto. The City Council hereby finds and determines that the description of the Facilities, Services and Incidental E xpenses herein is sufficiently informative to allow taxpayers within the Community Facilities District to understand what the funds of the Community Facilities District may be used to finance, the Facilities, Services and Incidental Expenses expected to be incurred, including the cost of planning and designing the Facilities, the costs of forming the Community Facilities District, and the three improvement areas therein, issuing bonds, levying and collecting a special tax within each improvement area of the Community Facilities District and the annual administration costs of the Community Facilities District. The City Council hereby finds that the proposed Facilities and Services are necessary to meet increased demands placed upon the City and EBMUD as a result of development expected to occur in the Community Facilities District. The Facilities may be acquired from one or more of the property owners as completed facilities or may be constructed by or on behalf of the City or EBMUD and paid for with special taxes or bond proceeds. Any portion of the Facilities may be financed through a lease or lease -purchase arrangement if the City or EBMUD hereafter determines that such arrangement is of benefit to the City or EBMUD.
Section 5. Special Taxes . Except where funds are otherwise available, it is the intention of the City Council to levy annually in accordance with the procedures contained in the Act a special tax, secured by a continuing lien against all non -exempt real property in each improvement area of the Community Facilities District, sufficient t o pay for the Facilities, Services and Incidental Expenses and the principal and interest and other periodic costs of Obligations issued to finance the Facilities and Incidental Expenses, including the establishment and replenishment of any reserve funds d eemed necessary by the City, and any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash) of the Community Facilities District. The rate and method of apportionment for and manner of collection of the special tax in each of Improvement Area No. 1 of the Community Facilities District , Improvement Area No. 2 of the Community Facilities District and Improvement Area No. 3 of the Community Facilities District is described in detail in Exhibit s C, D and E attached hereto (which attachment s are incorporated herein by this reference). Exhibit s C, D and E allow each landowner within the Community Facilities District to estimate the maximum amount of special taxe s that may be levied annually against each parcel to be included in the applicable improvement area.
If special taxes within an improvement area of the Community Facilities District are levied against any parcel used for private residential purposes, (i) the maximum special tax rate shall not be increased except to the extent permitted in the applicable rate and method included as Exhibits C, D or E hereto, (ii) such special tax shall not be levied later than the 2081-82 Fiscal Year for the component of the special tax used to finance Facilities and Incidental Expenses and for as long as necessary to meet the special tax requirement for Services, and (iii) under no circumstances shall such special tax be increased in any fiscal year as a consequence of delinquency or default by the owner of any other parcel or parcels within such 5 improvement area by more than ten percent (10%) above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults.
The special tax in each improvement area is based on the cost of making the Facilities and Services available to each parcel of real property within such improvement area. The City Council hereby determines the rate and method of apportionments of the special tax set forth in Exhibits C, D and E to be reasonable. Each special tax is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act; and such special tax is not on or based upon the value of real property. In the event that a portion of the property within an improvement area shall become for any reason exempt, wholly or partially, from the levy of the special tax specified in Exhibits C, D or E, as applicable, the City Council shall, on behalf of the Community Facilities District, cause the applicable special tax levy to be increased, subject to the limitation of the maximum special tax for a parcel as set forth in Exhibit s C, D or E, as applicable, to the extent necessary upon the remaining property within such improvement area which is not exempt in order to yield the special tax revenues required for the purposes described in this Section. The obligation to pay special taxes may be prepaid as provided in the rate and method of apportionment set forth in each of Exhibits C, D and E , as such rate and method may be amended hereafter.
Section 6. Public Hearing . A combined public hearing (the “Hearing”) on the establishment of the Community Facilities District, and the designation of three improvement areas therein, and for each improvement area, the proposed rate and method of apportionment of the special tax and the proposed issuance of Obligations to finance the Facilities and the Incidental Expenses shall be held at 6:30 p.m., or as soon thereafter as practicable, on April 19, 2022, at the City Council’s Chambers, 450 Civic Center Plaza, Richmond, California. If the City Council determines to form the Community Facilities District, and designate the three improvement areas therein , a special election will be held in each improvement area to authorize the issuance of the Obligations and the levy of the special tax in accordance with the procedures contained in Government Code Section 53326. If such election is held, the proposed vo ting procedure at the election will be a landowner vote with each landowner (including the City pursuant to Section 53317 (f) of the Act ) who is the owner of record of land within each improvement area at the close of the Hearing, or the authorized represen tative thereof, having one vote for each acre or portion thereof owned within such improvement area.
Ballots for the special election may be distributed by mail or by personal service.
At the time and place set forth above for the Hearing, the City Counci l will receive testimony as to whether the Community Facilities District , and the three improvement areas therein, shall be established , whether special taxes shall be levied in accordance with the proposed rate and method of apportionment of the special t ax within the applicable improvement area, and whether Obligations shall be issued within the applicable improvement area to finance Facilities and Incidental Expenses of the Community Facilities District.
At the time and place set forth above for the Hearing, any interested person, including all persons owning lands or registered to vote within each improvement area of the Community Facilities District, may appear and be heard.
Section 7. Notice. The City Clerk is hereby authorized and directed to publi sh a notice (the “Notice”) of the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general circulation published in the area of the Community Facilities District. The Notice shall contain the text or a summary of this Resolution, the time and place of the Hearing, a statement that the testimony of all interested persons or taxpayers will be heard, a description 6 of the protest rights of the registered voters and landowners in each improvement area of the Community Facilities District and a description of the proposed voting procedure for the election required by the Act. Such publication shall be completed at least seven (7) days prior to the date of the Hearing.
Section 8. Reports re Facilities and Services . The Director of Public Works of the City is hereby directed to study the Community Facilities District and, at or before the time of the Hearing, file a report with the City Council containing a brief description of the facilities and services by type which will in his or her opinion be required to meet adequately the needs of the Community Facilities District and an estimate of the cost of providing those facilities and services.
Section 9. Advances of Funds. The City may accept advances of funds or work -in- kind from any source, including, but not limited to, private persons or private entities, for any authorized purpose under the Act, including, but not limited to, paying any cost incurred by the City in creating the Community Facilities District. The City may enter into an agreement with the person or entity advancing the funds or work -in-kind for the Community Facilities District , to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council, with or without interest.
Section 10. Maximum Bonded Indebtedness . The reasonably expected maximum aggregate principal amount of the Obligations is Two Hundred Ninety -Two Million Dollars ($292,000,000), consisting of Sixty-One Million Dollars ($61,000,000) for Improvement Area No. 1 of the Community Facilities District, Forty-Seven Million Dollars ($ 47,000,000) for Improvement Area No. 2 of the Community Facilities District and One Hundred Eighty -Four Million Dollars ($184,000,000) for Improvement Area No. 3 of the Community Facilities District.
Section 11. Reservation of Rights. Except to the extent limited in any bond resolution or trust indenture related to the issuance of Obligations, the City Council here by reserves to itself all rights and powers set forth in Section 53344.1 of the Act (relating to tenders in full or partial payment).
7 Section 12. Effective Date. This Resolution shall be effective upon its adoption.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Richmond held on the 15th day of March, 2022.
Tom Butt,
Mayor
ATTEST:
Pamela Christian,
City Clerk
01337.0021/775244.1 Page 8
STATE OF CALIFORNIA )
COUNTY OF CONTRA COSTA ) ss.
CITY OF RICHMOND )
I, _________, City Clerk and ex-officio Clerk of the City Council of the City of Richmond, California, do hereby certify that the whole number of the members of the City Council is five; that the above and foregoing Resolution No. ____ was duly and regularly passed and adopted at a regular meeting of the City Council held on the 15th day of March, 2022 by the following vote:
COUNCILPERSONS AYES: ____________________________( )
COUNCILPERSONS NOES: ____________________________( )
COUNCILPERSONS ABSTAINED: ____________________________( ) COUNCILPERSONS ABSENT: ____________________________( )
Pamela Christian,
City Clerk