Planning and Building Agency
www.santa-ana.org/pb
Item # 12
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
February 3, 2026
TOPIC: Approval of Payment In-Lieu of Taxes Agreement – Cristo Rey School
AGENDA TITLE
Agreement for Payment In-Lieu of Taxes for Properties located at 3601, 3611, 3621, and 3631 S. Harbor Boulevard (APN: 414-261-07)
RECOMMENDED ACTION
Authorize the City Manager, or designee, to execute the attached Payment In-Lieu of Taxes Agreement with SOCO Harbor, Inc. (Agreement No. 2026-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
Summary
In October 2024, Cristo Rey Orange County High School approached the City of Santa Ana seeking approval of Conditional Use Permit (CUP) No. 2025-22 to establish a professional school use at an existing campus consisting of four office buildings located at 3601, 3611, 3621, and 3631 South Harbor Boulevard. The CUP application proposes that Cristo Rey will occupy space inside two of those buildings at 3601 S. Harbor Boulevard, Unit 200, and 3611 S. Harbor Boulevard.
To address potential economic impacts associated with the property’s tax-exempt status, Cristo Rey submitted a CUP application and, separately, a voluntary Payment In Lieu of Taxes (PILOT) agreement with a goal of minimizing fiscal and economic impacts to the City. While the Planning Commission has authority to act on the CUP, City Council approval is required separately for the PILOT agreement.
Background
The subject property consists of four office buildings located at 3601, 3611, 3621, and 3631 S. Harbor Boulevard, and is within a professional office park zoned Professional (P). SOCO Harbor, Inc., the Property Owner, intends to lease approximately 42% of the
Approval of Payment In-Lieu of Taxes Agreement – Cristo Rey Orange County High School (3601, 3611, 3621, and 3631 S. Harbor Blvd.)
February 3, 2026
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property’s rentable area to Cristo Rey County High School, Inc., a California nonprofit, to operate a professional school.
On November 10, 2025, the Planning Commission approved Cristo Rey’s CUP application to facilitate construction of a professional school use in two existing buildings at 3601 S. Harbor Boulevard, Unit 200, and 3611 S. Harbor Boulevard. Additional details on the project background, description, and analysis are available in Exhibit 2 of this staff report.
Analysis
The entire, integrated project site consists of 10 buildings on five separate parcels. Cristo Rey will occupy 3601 S. Harbor Boulevard, Unit 200, and 3611 S. Harbor Boulevard, which are situated on a single parcel (Assessor’s Parcel Number 414-261-07).
Cristo Rey qualifies for a tax exemption as a nonprofit educational institution. The Property Owner has voluntarily proposed a Payment In-Lieu of Taxes Agreement with the City of Santa Ana to offset the anticipated reduction in property tax revenue attributable to the school’s occupancy, stemming from the occupancy of the entire building located at 3611 S. Harbor Boulevard (45,148 square feet) and the second floor of 3601 S. Harbor Boulevard (18,033 square feet), which amount to approximately 41.62% of the parcel’s total rentable square footage. This agreement reflects the property owner’s commitment to bridge the loss of property tax revenue to the City from that exempted portion (41.62%).
The funds will support City services and community benefits, consistent with the General Plan’s objective of fostering partnerships with educational institutions and promoting sustainable community development.
The PILOT agreement outlines the payment terms, schedule, and annual amounts, with payments beginning on the first day of the month following issuance of the certificate of occupancy to the school. While initially proposed for a term of five (5) years, staff discussions with Cristo Rey resulted in a mutually agreed-upon term of twenty (20) years.
Payments will continue annually on each anniversary for up to twenty (20) years, contingent on the school’s continued operation at the site. The PILOT minimizes the fiscal and economic impacts to the City from the property’s tax-exempt status. Over the life of the PILOT, the applicant is expected to make payments totaling approximately $412,000.
City Council approval is necessary for this agreement, as there is no enabling ordinance authorizing staff to execute such agreements. The City Attorney has reviewed the agreement and found it to be satisfactory, subject to non-substantive changes approved by the City Manager and City Attorney. Approval of this item will allow the City Council to secure up to 20 years of property tax-equivalent payments through the agreement.
ENVIRONMENTAL IMPACT
Approval of Payment In-Lieu of Taxes Agreement – Cristo Rey Orange County High School (3601, 3611, 3621, and 3631 S. Harbor Blvd.)
February 3, 2026
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In accordance with the California Environmental Quality Act, the proposed project is exempt from further review under Section 15332 (Class 32 – In-Fill), as it meets all threshold criteria for infill exemption, and Section 15301 (Class 1 – Existing Facilities) for alterations. The Project would not cause significant impacts related to traffic, noise, air quality, water quality, or biological resources and is not located on a hazardous site, a scenic highway, or subject to unusual circumstances or cumulative impacts. A Notice of Exemption, Environmental Review No. 2025-37, was filed on November 13, 2025, for this project.
FISCAL IMPACT
Under the PILOT agreement, the property owner will make annual payments to the City of an estimated $16,938 in 2026, with a two percent (2%) annual increase over the 20- year term. The payments will be recorded as Miscellaneous Revenue – Property Tax (01102002-50011) and remain fixed regardless. Although the school is exempt from property taxes, the PILOT agreement ensures that the City does not lose revenue as a result of its tax-exempt status. These payments offset property tax revenue to the City that would otherwise be lost, therefore enabling the City to support its services.
EXHIBITS
1. Payment In-Lieu of Taxes (PILOT) Agreement
2. Planning Commission Staff Report
Submitted By: Ali Pezeshkpour, AICP, Executive Director, Planning and Building Agency
Approved By: Alvaro Nuñez, City Manager