DATE: December 10, 2019
SUBJECT:
Title
RESOLUTION APPOINTING A COMMISSIONER OF THE BOARD OF PORT COMMISSIONERS TO THE GOVERNING BOARD OF THE CONVENTION CENTER EXPANSION FINANCING AUTHORITY
Body
EXECUTIVE SUMMARY:
In 1996, the San Diego Unified Port District (District) and the City of San Diego (City) entered into a Joint Exercise of Powers Agreement (JEPA) to create the Convention Center Expansion Financing Authority (CCEFA) in order to provide financing for the 1998 Convention Center Expansion (Expansion). The JEPA’s governing board consists of the Mayor of San Diego, the City Manager of the City (now the City’s Chief Operating Officer), the District’s Executive Director, and a member of the Board of Port Commissioners (Board).
In 1998, to facilitate financing for the Expansion, the District entered into an Expansion Lease between the District and the CCEFA. The CCEFA in turn entered into a Convention Center Facility Lease with the City. In 1998, the CCEFA issued Series 1998A Bonds (1998A Bonds) totaling $205 Million to finance the Expansion. The 1998A Bonds were secured by base rental payments under the Convention Center Facility Lease. To assist with the cost of the Expansion, the District agreed to pay the City $4.5 Million per year for 20 years. The District’s annual support payments ended in June 2014.
In 2010, the City determined that it would be beneficial to refund all, or a portion of, the outstanding 1998A Bonds. On November 10, 2010, the Board, pursuant to Board Resolution 2010-161, authorized actions relating to refunding all or a portion of the CCEFA 1998A Bonds, including consenting to the execution and delivery of a 2010 Convention Center Facility Sublease, a 2010 Convention Center Facility Subordinated Lease, and a 2010 First Amendment to Convention Center Facility Lease, and approved other documents. Thereafter, in 2012, the City and District entered into an Expansion Lease relating to the $140,440,000 Convention Center Expansion Financing Authority Lease Revenue Refunding Bonds, Series 2012A (2012A Bonds).
The City has again determined that it would be beneficial to refund all, or a portion of, the outstanding Series 2012A Bonds and reissue bonds at a lower interest rate, which the City estimates will save approximately $3,218,205 Million (net present value). In order to do so, the CCEFA must be reconstituted and meet to observe some corporate formalities and schedule future CCEFA meetings. Pursuant to the JEPA, the Board shall appoint one of its members to serve as a member of the CCEFA Board, and such member shall serve at the pleasure of the Board until a successor is appointed and qualified. Staff recommends the Board appoint one of its members to the CCEFA.
RECOMMENDATION:
Recommendation
Adopt a Resolution appointing a Commissioner of the Board of Port Commissioners to the Governing Board of the Convention Center Expansion Financing Authority.
Body
FISCAL IMPACT:
This Board action has no fiscal impact to the District.
Compass Strategic Goals:
This agenda item supports the following Strategic Goal(s).
• A vibrant waterfront destination where residents and visitors converge.
• A financially sustainable Port that drives job creation and regional economic vitality.
DISCUSSION:
In 1996, the District and the City entered into a JEPA to create the CCEFA in order to provide financing for the Expansion. The JEPA’s governing board consists of the Mayor of San Diego, the City Manager of the City (now the City’s Chief Operating Officer), the District’s Executive Director, and a member of the Board of Port Commissioners.
To facilitate financing for the Expansion, in 1998, the District entered into an Expansion Lease between the District and the CCEFA. The CCEFA in turn entered into a Convention Center Facility with the City. In 1998, the CCEFA issued the 1998A Bonds totaling $205 Million to finance the Expansion. The 1998A Bonds were secured by base rental payments under the Convention Center Facility Lease. To assist with the cost of the Expansion, the District agreed to pay the City $4.5 Million per year for 20 years. The District’s annual support payments ended in June 2014.
In 2010, the City determined that it would be beneficial to refund all, or a portion of, the outstanding 1998A Bonds. On November 10, 2010, the Board, pursuant to Board Resolution 2010-161 (Attachment A), authorized actions relating to refunding all or a portion of the CCEFA 1998A Bonds, including consenting to the execution and delivery of a 2010 Convention Center Facility Sublease, a 2010 Convention Center Facility Subordinated Lease, and a 2010 First Amendment to Convention Center Facility Lease, and approved other documents. Thereafter, in 2012, the City and District entered into an Expansion Lease relating to the $140,440,000 Convention Center Expansion Financing Authority 2012A Bonds.
The City has again determined that it would be beneficial to refund all, or a portion of, the outstanding Series 2012A Bonds and reissue bonds at a lower interest rate, which the City estimates will save approximately $3,218,205 Million (net present value) with an estimated 4.984% percent savings on the refunded bonds. In order to do so, the CCEFA must be reconstituted and meet to observe some corporate formalities and schedule future CCEFA meetings to consider any refunding of the 2012A Bonds and any requisite documents. Pursuant to the JEPA, the Board shall appoint one of its members to serve as a member of the CCEFA Board, and such member shall serve at the pleasure of the Board until a successor is appointed and qualified.
The JEPA (Attachment B) at Section 4 B. - Governing Board - states at pertinent part that “[t]he Authority shall be administered by the Board whose members shall be, at all times, the Mayor, the City Manager, the Port Executive Director and a member of the Board of Port Commissioners.” Following the initial appointment of a member of the Board to serve on the CCEFA, “[s]uch member shall serve at the pleasure of the Board of Port Commissioners until a successor is appointed and qualified.”
Currently, the first special meeting of the CCEFA is planned for Monday, December 16, 2019, at 3:00 PM. At that meeting, the CCEFA board will meet to discuss and consider any corporate formalities, and to schedule the next CCEFA special meeting, which City staff has tentatively scheduled for February 13, 2020, subject to CCEFA board approval.
General Counsel’s Comments:
The Office of the General Counsel assisted in the drafting of this agenda sheet and approves it as to form and legality.
Environmental Review:
The proposed Board action, including without limitation, a resolution appointing a Commissioner to the Governing Board of the CCEFA, does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because no direct or indirect changes to the physical environment would occur. CEQA requires that the District adequately assess the environmental impacts of projects and reasonably foreseeable activities that may result from projects prior to the approval of the same. Any project developed as a result of Board’s action that requires the District or the Board’s discretionary approval resulting in a physical change to the environment will be analyzed in accordance with CEQA prior to such approval. CEQA review may result in the District, in its sole and absolute discretion, requiring implementation of mitigation measures, adopting an alternative, including without limitation, a “no project alternative” or adopting a Statement of Overriding Consideration, if required. The proposed Board action in no way limits the exercise of this discretion. Therefore, no further CEQA review is required.
In addition, the proposed Board action complies with sections 21 and 35 of the Port Act, which allow for the Board to pass resolutions and to do all acts necessary and convenient for the exercise of its powers. The Port Act was enacted by the California Legislature and is consistent with the Public Trust Doctrine. Consequently, the proposed Board action is consistent with the Public Trust Doctrine.
The proposed Board action does not allow for “development,” as defined in Section 30106 of the California Coastal Act, or “new development,” pursuant to Section 1.a. of the District’s Coastal Development Permit (CDP) Regulations because they will not result in, without limitation, a physical change, change in use or increase the intensity of uses. Therefore, issuance of a Coastal Development Permit or exclusion is not required. However, development within the District requires processing under the District’s CDP Regulations. Future development, as defined in Section 30106 of the Coastal Act, will remain subject to its own independent review pursuant to the District’s certified CDP Regulations, PMP, and Chapters 3 and 8 of the Coastal Act. The Board’s action in no way limits the exercise of the District’s discretion under the District’s CDP Regulations. Therefore, issuance of a CDP or exclusion is not required at this time.
Equal Opportunity Program:
Not applicable.
PREPARED BY:
Ellen Gross
Assistant General Counsel
Office of the General Counsel
Christian Anderson
Program Manager
Real Estate
Attachments:
Attachment A: Board Resolution 2010-161
Attachment B: Joint Exercise of Powers Agreement (JEPA)