City of Salinas
North of Boronda FGA
Central Area
Zone of Benefit Application
Analyst Report
November 2025
27368 Via Industria
Suite 200
Temecula, CA 92590
T 951.587.3500|800.755.6864
F 951.587.3510|888.326.6864
Property Tax Information Line
T. 866.807.6864
www.willdan.com
CITY OF SALINAS
NORTH OF BORONDA FGA CENTRAL AREA
ZONE OF BENEFIT APPLICATION
ANALYST REPORT
Prepared for Prepared by
CITY OF SALINAS WILLDAN FINANCIAL SERVICES
200 Lincoln Avenue 27368 Via Industria, Suite 200
Salinas, CA 93901 Temecula, CA 92590
(831) 758-7381 T. (951) 587-3500 (800) 755-6864
F. (951) 587-3510 (888) 326-6864
Property Tax Information Line
T. 866.807.6864
TABLE OF CONTENTS
This report provides an analysis of the Zone of Benefit submitted by East Boronda LLC for the North of Boronda Future Growth Area (FGA) Central Area and is organized in the following sections:
INTRODUCTION
A. O RDINANCE AUTHORITY
B. ZOB BOUNDARIES AND DEVELOPMENT SUMMARY
I. CONFIRMATION OF EXPENDITURES
A. D OCUMENTATION OF COSTS
B. P AST REIMBURSEMENTS AND CREDITS
II. SUMMARY OF COSTS
A. S UMMARY OF SPONSOR COSTS
B. S UMMARY OF CITY COSTS
III. COST ALLOCATION AND ANALYSIS
A. A LLOCATION METHDOLOGY
B. A GGREGATE COSTS AND ALLOCATION
C. R EIMBURSEMENT CHARGES FOR OWNERS
CONCLUSIONS AND RECOMMENDATIONS
A. C ONCLUSIONS
B. R ECOMMENDATION
EXHIBITS
EXHIBIT A: ZONE OF BENEFIT APPLICATION
EXHIBIT B: BOUNDARY DIAGRAM
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INTRODUCTION
The information provided in this report is derived primarily from the City of Salinas (“City”) Ordinance No. 2549, Ordinance No. 2590, and East Boronda LLC’s (the “Sponsor’s”) submitted Zone of Benefit (ZOB) Application.
The North of Boronda Future Growth Area (FGA) consists of four planning areas for the purposes of preparing and processing specific plans and environmental review, namely (1) the West Area, being portions of the FGA lying between San Juan Grade Road and Natividad Road; (2) the Central Area, being portions of the FGA lying between Natividad Road and the extension of Constitution Boulevard; (3) the East Area, consisting of the portions of the FGA lying between the extension of Constitution Boulevard and Williams Road; and (4) the portions of the West Area included within the adopted Gateway Center Specific Plan. This ZOB analysis is related to the Central Area.
The costs incurred within each planning area associated with preparation of the specific plans and compliance with the provisions of CEQA, as well as the City Costs, should be borne fairly and proportionately by the owners of property within each planning area. The City established a system to implement and enforce such a reimbursement via Ordinance No. 2549 which requires the formation of a ZOB covering the relevant planning area. The City has received such an application from the Sponsor and selected Willdan Financial Services to serve as the “Analyst”. The Analyst shall review the application and prepare a report (the “Analyst Report”) with the Analysts’ recommendations to the City Council.
A. O RDINANCE AUTHORITY
Ordinance No. 2549 was introduced and read on the 20 th day of May 2014 and passed and adopted on the 3 rd day of June 2014. On February 21 st, 2017, Ordinance No. 2590 was adopted and amended Ordinance No. 2549 to exclude undevelopable areas from the calculation of the fair share costs.
B. ZOB BOUNDARIES AND DEVELOPMENT SUMMARY
The Future Growth Area (FGA) in Salinas comprises approximately 2,388 acres within the City limits, generally bounded on the south and southeast by East Boronda Road, on the west by San Juan Grade Road, and on the northeast by Williams Road. Its northern limit follows the City’s Sphere of Influence as adopted by the Monterey County Local Agency Formation Commission (LAFCO) in Resolution No. 08-09 (May 19, 2008).
Within the FGA, the Sponsor’s ZOB Application focuses on the Central Area, specifically the portion lying between Natividad Road and the extension of Constitution Boulevard. According to the Sponsor’s attached map (see Application Attachment C), the Central Area comprises both “chargeable” and “non-
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chargeable” parcels totaling roughly 776.73 acres, benefiting from, or otherwise subject to, the annexation and entitlement costs for which the Sponsor seeks reimbursement. These boundaries correspond to the parcels listed in the Application ledger and have been submitted to the City as the proposed ZOB.
The full FGA is planned for up to 11,485 dwelling units and 3.992 million square feet of commercial/retail/mixed-use and public/semi-public development. The Central Area specifically will accommodate a portion of that buildout under its own specific plan and CEQA documentation, consistent with the City’s phased approach to FGA planning.
By forming a Zone of Benefit in this Central Area, the City can ensure that property owners who benefited from the Sponsor’s annexation and entitlement efforts pay their proportional share, as required under Ordinance Nos. 2549 and 2590 (collectively, the “Ordinances”).
I. CONFIRMATION OF EXPENDITURES
This section reviews the costs incurred by the Sponsor(s), verifying (1) that each claimed item was indeed paid, (2) that it is consistent with Ordinance Nos. 2549 and 2590, and (3) that it qualifies as a necessary Annexation Cost, Entitlement Cost, or City-Incurred Cost (as defined in the Ordinances).
A. D OCUMENTATION OF COSTS
The Sponsor provided a comprehensive ledger of allocated internal and consultant costs, invoices and proof-of-payment records as part of their ZOB Application, attached as Exhibit A. Attachments were not included in Exhibit A but are on file with the City and the Analyst. These line items fall primarily into (1) Pre-Annexation Engineering, (2) Environmental Documents for CEQA compliance, (3) Legal Defense of EIR challenges, and (4) City-incurred application fees. The Analyst reviewed these materials according to the reasonableness standard to confirm each cost was actually paid by the Sponsor on or about the date stated.
After review, we as the Analyst have determined that $33,854.27 in ineligible political and marketing expenses had been included. The Sponsor provided an updated ledger with those costs removed.
B. P AST REIMBURSEMENTS AND CREDITS
Prior to submitting this Zone of Benefit (ZOB) application, the Sponsor received one partial reimbursement of $297,841 from Harrod Construction Company (Christensen Trust) in 2008. These amounts will be credited toward that owner’s final Reimbursement Charge. All other Non-Participating Owners have no recorded payments and are thus credited $0.
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Additionally, in January 2001, Hartnell/Matsui entered into an option agreement with CreekBridge Homes/East Boronda LLC for the property described in this report as belonging to Hartnell. The contract granted CreekBridge Homes/East Boronda an initial five-year purchase option, renewable for up to ten one-year extensions, in exchange for annual option payments. Section 4.2 of this agreement assigns CreekBridge Homes/East Boronda LLC “sole responsibility” for obtaining and paying all subdivision mapping, environmental review and other costs related to development entitlements incurred during the option term.
II. SUMMARY OF COSTS
A. S UMMARY OF SPONSOR COSTS
The following table summarizes the costs incurred by the Sponsor for the annexation and entitlement of the ZOB.
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Interest is added to each sponsor-paid invoice to reflect the time value of money between the date of payment and the date the reimbursement is made. Consistent with best practices and the Ordinances, simple interest is applied monthly at an annual rate of six percent (6%) through the date of adoption of the Resolution creating the ZOB, and eight percent (8%) thereafter. Incorporating interest places early-year expenditures on equal footing with recent ones and provides a fair return to the Sponsors until their costs are recovered.
B. S UMMARY OF CITY COSTS
The City has incurred $11,140 in consultant costs thus far and expects to incur an additional $3,000 in consultant costs before the ZOB charge goes into effect.
These costs have been incorporated into the analysis.
III. COST ALLOCATION AND ANALYSIS
A. A LLOCATION METHODOLOGY
Reimbursable costs are distributed on a pro-rata developable acreage basis as mandated by Ordinances 2549 and 2590. The total amount of chargeable acreage is 776.75 total acres less 225.72 acres of roads, drainage, school sites and open space for net chargeable acreage of 551.03.
For purposes of allocating expenditures to owners within the ZOB, all invoices have been divided into two periods: (1) Pre-2011 (the span during which the Option Agreement was in force, and (2) from 2011 to the present. During the Pre-2011 period, amounts that would have been charged to Hartnell properties have been assigned to East Boronda LLC.
Using net developable (i.e., chargeable) acres as the divisor ensures that only the land that can be subdivided, entitled, and ultimately developed bears the reimbursement burden, which satisfies the proportional-benefit standard set out in Ordinances 2549 and 2590. By removing rights-of-way, drainage corridors, open- space dedications, and other permanently undevelopable parcels from the denominator, the methodology (1) aligns each dollar of cost with property that will realize an increase in value from the Annexation and Specific Plan work, (2) avoids over-charging the developable acreage to subsidize land that confers a public benefit but yields no private development potential, and (3) mirrors the approach recommended in the aforementioned ordinances, thereby promoting consistency and administrative simplicity. This net-acre basis also conforms to Government Code nexus principles by establishing a clear, measurable relationship between the costs incurred and the parcels that directly benefit from those costs.
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In reviewing the original application, Willdan pointed out that some of the gross acreages of the Assessor’s Parcels were inconsistent with the data from the Monterey County Assessor. The Sponsor has corrected these inconsistencies.
Since the actual number of net acres will not be finalized until a final map is recorded for the properties, the net acreages used for this analysis are subject to change.
The net acreage by owner data is provided in the table below.
B. A GGREGATE COSTS AND ALLOCATION
The following table summarizes the Aggregate Annexation and Entitlement costs incurred by the Sponsor and allocated to each landowner in the ZOB according to the methodology in Section III.A above for the pre-2011 Option Period.
The following table summarizes the Aggregate Annexation and Entitlement costs incurred by the Sponsor and allocated to each landowner in the ZOB according to the methodology in Section III.A above for the period during which the option was not in force.
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And finally, the following table represents the combination of the above analyses, assigning the costs attributable to the Hartnell property during the option period to East Boronda LLC.
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C. R EIMBURSEMENT CHARGES FOR OWNERS
The following table summarizes the Acreage attributable to each non-participating owner, expresses the ZOB charge on a per acre basis, and also shows the total amount owed for the underlying land. Additionally, the table shows how much will be retained by the City and how much will be allocated to the Sponsor as reimbursement for costs incurred.
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CONCLUSIONS AND RECOMMENDATIONS
A. C ONCLUSIONS
x After excluding political and marketing expenditures, all remaining sponsor and City costs have been verified as eligible, yielding a gross eligible cost total of about $8.5 million with approximately $3.7 million owed to the City and the Sponsor in reimbursements.
x Allocating those costs over 551.03 developable acres produces a charge per acre of $20,909 for most owners, $7,925 for Hartnell, and $7,352 for Christensen Trust.
x For each payment made, 0.4% will be retained by the City and 99.6% will be remitted to the Sponsor.
x Simple interest accrues on sponsor advances at six percent (6%) per year until the ZOB ordinance is adopted, and at eight percent (8%) thereafter, as specified in Ordinance 2549 § 4(2)(c).
B. R ECOMMENDATIONS
We recommend that the City adopt a Resolution forming the Central Area ZOB, accepting the verified cost schedule and establishing the reimbursement methodology described above and record it as a Reimbursement Lien against all chargeable properties within the area.
A-1
EXHIBIT A
ZONE OF BENEFIT APPLICATION
A-2
A-3
A-4
B-1
EXHIBIT B
BOUNDARY DIAGRAM