Subject: APPROVAL OF Cooperation AGREEMENT WITH YERBA BUENA, OPCO, LLC
COUNCIL DISTRICT: 8
RECOMMENDATION
Approval of an agreement between the City of San José and Yerba Buena, OPCO, LLC for funding and investigation of the feasibility of providing public financing for the acquisition and construction of public infrastructure improvements required for the Evergreen industrial development.
The Evergreen Benefit Assessment District included approximately 354 acres of vacant land zoned for Industrial Park along its eastern boundary (map attached). The property owners (Yerba Buena, OPCO, LLC) of the southern most 121.7 acres has received zoning and planned development approval for a 1,769,060 square foot industrial park. They have requested that the City form a community facilities district to provide financing for the local infrastructure improvements required for the development of their project as well as some offsite infrastructure improvements that are necessary for both their development and the development of the remaining 232 acres adjacent to their site.
The City of San
José creates community facilities districts to provide tax exempt bond
financing to support the development of land in conformance with the City’s
General Plan. These bonds are offered
through the City and are repaid through special taxes or assessments, usually
continuing for 20 to 30 years, against the properties within the boundaries of
the proposed district.
This agreement
with the property owner/developer is being proposed to allow the City to
investigate the feasibility of forming and to take the initial steps towards
formation of a community facilities district to fund the construction of public
infrastructure to support the development.
It requires the developer to put $30,000 on deposit with the City to
cover costs incurred by the City and its consultants in the investigation of
the feasibility of forming the district and performing the preliminary steps
required for the formation of a district.
If costs exceed the initial deposit, the agreement has provisions for
additional deposits. Upon formation of
the district and delivery of bond proceeds, the developer shall be reimbursed
for monies advanced to the City and expended on eligible investigation and
formation costs.
The Department of Public Works has been in contact with the property owner/developer throughout the development review process. Staff has also contacted the owner of the adjacent 232 acres of developable land.
This memorandum and related documents were prepared in cooperation with the Office of the City Attorney.
The deposit
required by the agreement will cover all City staff and consultant costs in the
event that a district is not formed or bonds are not sold. If the district is formed and bonds are
sold, the developer shall be reimbursed for monies advanced to the City and
expended on eligible investigation and formation costs.
RAJEEV BATRA
Acting Director, Public Works Department