City Council - Special Meeting

uh 2002 that we're going to continue to pay these outdated CFDs for year after year after year. So, we haven't suggested the $3 million poll. And when I stop and you hear the next presentation, while you listen to it, I want you to see if you can answer if they can answer these three questions for you. Number one, what is wrong with starting the new CFD's project now? taking these three simple steps that we have suggested in the draft resolution. Number two, why should these Mare Island residents? Why should these Mayor Island residents keep paying more than their fair share of city taxes for two, three, 10 more years when they've already paid more than their fair share for more than 20 years? Number three, how does do nothing fulfill your commitment as city council members to hear your residents and fix problems when they are called to your attention.

Please listen carefully to their presentation and see if they answer those three questions for you. Thank you for your time and attention to what we've said. Thank you very much.

GREAT. All right. So, what we will do, thank you both. Um, and thank you everyone who is here from the from the island. What we will do is move on to the staff presentation which I believe we'll turn over to the consultant first and then we will keep moving in the interest of time. We'll take public comment after all the presentations and then we'll do a round of of council questions and comments. So I'll turn it over to the acting city manager and andor our our consultants who are here.

Sure. Through the mayor, I'll do introductions as staff moves to the table and the consultant experts move to the table. My name is Gileian Hayne, acting city manager. Tonight we'll be hearing from our city staff, Erin Hanford, the economic development program manager for Mayor Island, Susan Goodwin from Goodwin Consulting, James Warznack from Jones Hall. So if you could start the PowerPoint, please Manny, I'll go over the agenda, what we'll be talking about tonight, history of the Mar Island closure and the CFD formation. We'll talk a lot about other CFDs in California and then formation and background on the Mir Island CFDs. We'll talk about uh we'll hear from our outside council and their opinions and the history of the meetings and progress thus far on the CFDs and then potential changes, timing of future changes and staff recommendation and council direction. Uh next slide please. I'll do a quick history before I pass it over to Goodwin Consulting. Um, if you're new to the story, Mirror Island Naval Base closed in 1996. Um, prior council development approval at that time was contingent on costneutrality principle. So, anything that happened on the island stayed costneutral to the city's general fund budget. Um, community facilities, districts, CFDs are very common financing tools across the state that help keep those revenue neutrality goals for new development. Um, and are used through the Melou Community Facilities Act of 1982 statewide. And they're normally formed uh for two main purposes, facilities and services. So they were formed to fund facilities and services on Merit Island without impacting the general fund and the larger um landside of Vallejo residents. So with that, I'm going to ask you to move to the next slide and I will pass

it to Susan Goodwin of Goodwin Consulting. Thank you, Susan.

Good evening. Um Susan Goodwin with Goodwin Consulting Group, the city's special tax consultant. Um, we were asked the last time this presentation was done, we were asked by the council uh if service if CFDs that funded services were typical or atypical. And you're not it's this is a very difficult slide to read, but this was to jam it all into one slide and show just a sample of some of the service CFDs throughout the state. Um, these are CFDs that fund services. there's this many probably double this amount that also fund both facilities and services. So this is just to give you a flavor of the fact that it's not atypical uh to use CFDs to fund services. Um and then bringing it closer to home, we um we were also asked what other CFDs there are in place in Solano County. And um this summary was put together last time to show some of our neighboring cities. um and and even Hidden Brook in your city um that have leveies. Um Hidden Brook, this one for Hidden Brook, they use their HOA fee to cover the public service costs. So that's included in Hidden Brook. Um but you can see Fairfield, Vakville, Dixon. um they all have multiple CFDs that fund facilities and services and have um maximum taxes um close to some higher, some lower than those in May Island.

We'll turn it on first. Hi, I'm Aaron Hanford. I think most of you know me. Thank you very much. It's nice to see you mayor and council members. All right, I will talk louder. Is that good? Yeah. Okay, great. Yeah, just keep the or you can move the mic a little closer. Yeah, I'm sorry. I'm not that great with public speaking. So,

you're all right. So, we're going to talk a lot about what was discussed when this presentation was given back uh a while back um by Gileian and the former ED director. Um so, we're going to talk about the formation of these CFDs. There are three CFDs. Uh, the one we talk about the most is the islandwide one, 2002-1 services CFD. The year is the beginning number. That's how you can remember how long these have been in place. The other two are 2005 because LAR was building the new subdivision, residential subdivision, the 2005 in that year. So, they created uh two different CFDs, 1A and 1B. As it notes here, the 1A has two components. One is a services CFD that acts like a landscape maintenance district. As you know, the city of Alleo has many LMDs in residential subdivisions. This is very similar to that. Um um and the other one is a facilities CFD that was created um because at the time LAR was thinking of using this for to have a bond issued for infrastructure for up to $40 million. the CFD tax or levy would pay for the debt service on that bond. And if the bond wasn't issued, it would pay for um improvements to facility capital expenditure pro projects. The last is the 20051B services CFD. Um it was originally formed to cover services that were not included in the original 2002-1 CFD and to fund gaps if that CFD was reduced or eliminated. um things have changed and um if you have more questions I can have Susan help but at this point what's covered under the 20051B is pretty much also covered under the 2002-1 CFD going talk a little bit about the

formation background um as I mentioned the initial CFD was created in the year 2002 we call it islandwide it includes most of the island the residential commercial industrial golf course it includes Mayor Island Company is owner of most of the island. Toro pays it. Uh, Alco, EPS, and the city. It excludes federal tenants. Um, the CFD funds are the city's operating expenses, landscaping, lighting, streets, park, the causeway, bridge, and as we know, police and fire. Um, people ask when it's going to expire. This particular CFD has the caveat when the city determines that ongoing revenues exceed ongoing expenses um it can be discontinued but we just have to keep an eye on it. It's not you wouldn't determine that just in looking at it just one year. You'd have to look to see what's coming down the road. Next two slides are a little bit about the key elements of this islandwide 2002 CFD. Um the it is part of the annual audit. So that tax is part of the audited annually through the citywide audit. Uh people often say what happens on Mar Island stays on Mar Island. And that's because this is CFD is not like all other Cop I'm saying it incorrectly. This CFD is a little bit unusual in that the revenues generated on the island are attributed and credited towards the CFD. So those property taxes from the residents and from the non-residential um are one of the line items of revenues. um sales tax, utility tax, um property transfer tax. There's there's a whole host of line items that are included as revenues towards positive revenues towards the CFD. Um, I think it's was already said by previous presentations, but it's important to continue to note that the

non-residential property benefits from tax reductions before residential property because of the way the RMA the I call them the instructions of the CFD, the rate and method of appropriateness. So, as it says here, any cost based on our current budget, any cost subsidy of up to 1.8 8 million by the general fund would solely benefit the non-residential tenants. So it's going backwards, we're talking about Maryland company, Toro, Alco, EPS, golf court. Those those are the tenants I'm talking about when I say non-res. That 1.8 million is the tax levied on non-residential in this current fiscal year. That's why that number is what it is. So above that number approximately would start chipping away at the residential tax. But to truly eliminate the residential CFD tax, that would be a $3 million subsidy. And that number is pure and simple our current CFD expenses in this fiscal year minus other revenues. Those are the revenues I was just talking about that are not the tax itself, but property taxes, utility taxes, anything that happens on the island kind of stays on the island. We call those other revenues. Uh the other key elements I just want to highlight as was highlighted before the current CFDs are based on the original land use plan specific plan. Um and as noted the absorption estimates the the plan was optimistic and it has not panned out. Um the other thing that's important to note is the master developer for a while it was for quite a while it was LAR Maryland and now Maryland company as owner of more than 50% of the area within the CFD has protest rights. They can protest against any changes to the existing special tax formula that could prevent from the change from being made

now. So I'm going to trans uh have do you want to come up here? Okay. We're gonna hear a couple of slides from Jones Hall. Are you gonna move there? Yeah, sure. It's just two slides.

Thank you very much. Uh, good evening, mayor, city council members. James Worziniac at Jones Hall. We are law firm uh, here in the Bay Area hired by the city back in 2023 to look through, you know, the original formation of this CFD 2000- 2002-1. the city residents obviously the mayor island residents were had some questions about the formation about how it was being administered and the city brought us in uh as I said in 2023 we did comprehensively review um the formation of the CFD at that time all the resolutions the ordinance the ballading there was actually a judicial validation action and involved at that time which means the city went to the superior IOR court and said did we do everything right and the superior court said yes you did everything right this CFD has been validly formed uh and is effective and then on an ongoing basis uh the questions well we'll get into that on the next slide this slide just again um highlights that it was properly formed um the accounting practices the cost neutrality policies that have been already articulated um by the residents as as well of staff. We highlight the code sections there, the acquisition agreement which was of course entered into with the original master developer and the city. Uh on the next slide, uh thank you. Uh this gets into a little bit more of the methodology. So the RMA, the rate and method has been referenced a few times tonight. It is the roadmap for levying the tax as we all know, but it doesn't get into every specific detail. How do you allocate police? How do you allocate fire? And the reason for that is it'd be too long of a document

if it if every little detail how to be spelled out there. So what the RMA does is it gives the road map and city staff and their outside consultants have been implementing that. And what we did is we looked at it and we said what has been done has been reasonable. You might have a different take. You might do it a different way. But what the city has done is reasonable. It's in accordance with the CFD law. It's in accordance with the city code. Uh and finally, you say there the last bullet point. Uh in accordance with the revenue neutrality principles which have been in place from day one. Uh and in general with CFDs, there is a a a sense of liberally constring the provisions of of the CFD law so that it can be implemented so that the city council, the city staff has that ability to make decisions to implement each year going forward. So that is what we did um as I said and and provided our findings to the city back in 2024. Uh that's the conclusion of my slide for the moment, but I'll be available for questions and answers.

Thank you, James.

I'll continue the presentation. I can talk a little bit about the history of CFD meetings. I do want folks to know I've been here since 2015. um LAR developer. We had started meeting with Lenar um Tom She um at least I did with CFD meetings starting about 2016. We reviewed each year the annual budget, the CFD tax and tried to come up with any answers to all his of their questions. As a result of those meetings, we developed a major maintenance five-year capital plan which is in our budget every year. Um, I think there was reference to a lot of money that was the city was holding um way back when uh Lonard didn't pay the 18 million or 1.8, my apologies. Um, my guess is that was the money the that the city public works was collecting. Um, but since then, this major maintenance capital program outlines the projects that the city is working on, how much CFD funds have gone to each of those projects, and how much grant funds. So an example of one of the projects would be the causeway bridge. Um we also started meeting with Mr. Glaze around 2016 2017. Um we again reviewing the annual budgets line item by line item for the CFD concentrated mostly on the 2002-1 CFD. We talked about and detailed the safety allocation methodology. Um and Mr. Glaze and his group would ask for a lot of invoices and if they had any questions we would answer those and if and make sure they were coded correctly and if they weren't they were recorded correctly later. um that he formed his mist uh Misti group and those meetings, let me back up. In April of 2019, uh we started meeting with the Misti group and having regular meetings, presenting a lot of this information we're talking about tonight, the formation and history of the CFDs, kind

of the challenges and and and what we could or couldn't do, and put all those um follow-up questions in writing. In terms of council participation in the CFD in 2023 in March, there was a CFD brief briefing with the Mayor Island subcommittee. In April, Goodwin did a CF Susan Goodwin did a CFD presentation to city council. Um, in May of that year, Miss D presented their presentation to city council and in June, uh, city council adopted the 2324 budget. Um and then in March of 2024, that's the presentation that this is really being an update on. Um the CTF presentation to the city council. Um I mentioned that we were trying to find solutions to the challenges of the CFD. So in response to the residents concerns and multiple meetings, the city has made a a few changes. The first one is in the fisc starting in fiscal year 1920. Um, the city started subsidizing through the general fund some of the bridge maintenance costs at $200 to $250,000 a year. And I'll be the first one to acknowledge this goes to primarily the non-residential um owners. Um, but that was what was put out put out there. In fiscal year 2021, the city stopped collecting the 20051B services levy tax, which this is a very average number. uh resulted in a cost saving per household of about $400 per household. And then in May of 22, we executed the North Mar Island DDA disposition and development agreement which includes language committing Mar Island Company to re restructure CFDs. I'm going to I know this question was asked at the previous presentation, so I'm going to hand it over to Susan to address this slide.

Yeah, there's been much discussion as there was um in Mr. Mr. Boon's presentation about when to start the new CFD process. And the truth of the matter is it could be started at any time, but what needs to be available whenever it's started are the building blocks to calculate the taxes that will be put in place as part of that new CFD process. So what any CFD pro it can start but any CFD process that finishes locks in place as this one did back in 2002 a formula that can't with minor exceptions and I have a feeling we're going be talking about some of those cannot be changed in any big way after that and the components that go to to in to calculating what the maximum tax needs to be are two things one is the service costs for all of the services that need to be funded by the CFD. That's the the numerator. And the denominator that goes into that to determine the per unit and per acre tax are the land uses that are going to be paying those taxes. And until the specific plan is not done and implementation not built built but until the specific plan is at a point where those two items are known with some certainty it's going to be hard to calculate a maximum tax that will be that we know will work in the future. Now again it doesn't mean the process couldn't be started. It's this is the formula though to calculate that maximum tax. So, it's a matter of how certain the the city is at this point on what the service cost will be when that specific plan's adopted because the current service costs were based on 1999 land 1999 land use plan. Uh so obviously that's going to change and then the um the land uses that will pay for that as

time goes by. So that was that was why the the specific plan is needed um to to determine the tax. Thanks Susan.

Um the remaining slides just talk about the implications of discontinuing or eliminating some of these taxes. This slide is about discontinuing the 20051A facilities CFD levy. um that would result in a reduction of tax to the homeowners on the residential homeowners on the island. I know it's a big range 60 to $788, but the tax is kind of complicated. Uh it's based on square footage and it also is tied into the 2002-1 um CFD levy, but there is a red it would be a reduction. Um but on the flip side, the city would have to identify another funding source, i.e. general fund to fund improvements for facilities that are authorized under that CFD, including construction and rehabilitation of sewers, storm drains, water facilities, street bridge improvements, and landscape. So, I just wanted to as a side note to this, um the 2005 subdivision was built 20 years ago, so it's 20 years old. And yes, there is a surplus in this account. It's about $2 million. um if we stop collecting it would stay at 2 million and that would be the entire amount the city has when all of those in that infrastructure needs to be uh improved upon or replaced. Um so I just wanted to address that. This slide is about the uh implications if we modify not eliminate but modify the two the islandwide 2002-1 CFD. Um, there were a couple questions asked from various sources. So, we just kind of try to sum it into the first bullet point. These following subsidy ideas would solely benefit the non-residential property. Um, we talked about a little bit before up to $1.8 million subsidy would go straight to non-residential, meaning the tax would go to zero for non-residential

um since that's what their tax levy was for this fiscal year. Same thing if we did a half a 50% reduction of the CFD tax levy. Same thing if we remove the safety allocation costs um in this 2002-1 CFD plus the general fund would need to assume the additional costs um estimated about 3.9 million in the current budget. So, kind of keep going back to the only way to really uh the only way to do this is to eliminate the CFD um for the residents is to eliminate the CFD in its entirety. The slide is Thank you. This slide is about the implications of eliminating the CFD. Now the again the 2002-1 islandwide CFD um it would have a 3 million plus impact to the general fund and the plus is because every year our costs are going up. Um if you look at our expenses and our revenues from when this presentation was last given um the the increase in there's been an increase in the overall tax and a majority of that has gone to non-residential because the residential tax is only not only but it is tax 2% increase per year. Am I saying that correctly? um the increase on the residential taxes capped at 2% per year where the commercial not just commercial but non-residential CFD payers there is no cap so in the case what's happening is our c our expenses and re our revenues and our expenses are resulting into a higher tax need and the percentage paid by the non-res has been going up and I have those percentages if you want them Um, the other implication would be a reduction of funding for mainland projects. I'm just referring to that $3

million. The mainland mainland household, which according to the US uh US Census Bureau is about 44,000 people, would be subsidizing the 322 homes on the island. Uh, reduction or elimination of future development, which typically needs CFDs to fund services and improvements. That's a pretty big one. We want development. We need development on the island. we need it on the mainland. So the effect of Maryland development infrastructure and service needs for future development require some type of funding like a CFD. If we if the current CFD tax is reduced or eliminated, there is a risk that the voters will not agree to new CFDs to develop the island. So it's kind of setting some precedent for reducing or eliminating CFDs for development projects. Um there's the effect a negative effect on current projects in the pipeline like blue excuse me blue rock and Costco. So this is the last slide um and it's pretty much speaks for itself. Uh the recommendation by staff in March of 24 was to um restructure the CFDs at the time the new Maryland specific plan approval and implementation. And as Susan said, it we're not talk, it wasn't meant that you would build out the specific plan, but that you would have the specific plan in place. Um, and when the land because we need the land densities um as part of the calculation and uh new RMA for a new replacement CFD, our current recommendation and the council direction at the time agreed with that recommendation. Staff recommendation has not changed. Um, so that ends the presentation from staff and I need to go get a pen through the mayor.

Don't have a pen. I'd like to add a few things. Um, just to wrap up some of the questions that the Misty group had. Um, some of them were in the presentation, but I'd like to address a few of them.

Um, Erin highlighted a bit the 2005 CFD infrastructure. Why do we have that um, money set aside? Um, if you recall the the bridge update that we did recently was in the millions and millions of dollars, multiple millions. So, we're looking at bridge, sewer, water man, any sort of emergency water main break. That would be the fund that we would use to address that. So, that's why that money is very important to um the future of Mar Island. We um talk about freezing just the annual escalator at the 2% on the residential side. The cost impact, correct me, Erin and Susan, I believe, is that around 200,000ish a year, but it it depends on the service cost. Correct.

I I thought that had Did you Excuse me. Let me back up. Um I didn't look at the S cost for the 2% escalator. My apologies if I misunderstood the question, so I'd have to get back to you on that. Yeah, I think I think the 2% escalator freezing is more of a legal limitation than it is.

So, we'll come back to that one. Um, uh, what is wrong with starting the new CFDs now? Nothing. But to Aaron and Susan's point, um, it's it's best when we know the densities and what land uses will be on the island, but also what infrastructure is going to be necessary because more than likely we'll be looking at CFDs for services and infrastructure. And right now we've done a Mar Island infrastructure assessment to set the baseline at a high level of what's needed, but more detail will be coming in the second specific plan um submittal to the city, which you'll hear about later. And with that um the infrastructure plan will feed um information on what's needed out on the island in order to develop at those density levels. So once we understand what infrastructure is needed, what the density numbers are and what the services are needed, that is um a very appropriate time to begin um analyzing those CFDs. And then um uh just wanted to mention the process to change the CFD does uh can be protested by 50% landholder um which island company does own over 50% of the land. So that just is a note to be made. And then currently what are we subsidizing right now today? And Aaron you may have to jump in but 250,000 for the bridge we reviewed and then additional 100,000 that was frozen. So is it a total of 350 per year currently?

Um there's the bridge. Um the second one was uh freeze from the 20051B services CFD and that was the one that's about I think that's the calculation I was trying to do $400 or so per household per per year. So totally at this point it's about 350,000 per year that the city is currently subsidizing. So with that that ends um our presentation. We're available for questions. All right. Thank you all. So before we get to council questions, I do want to take public comment on the item and I believe we have a few folks in person. We'll go ahead and call.

Yes, mayor. We have three um individuals that have signed up. Um the first speaker is AJZ. The second speaker is Anne Carr and the third speaker is Kathleen Dab

and you can raise the podium on the lower right there's a toggle switch. Yeah, I think this works.

All right. Thank you. I guess to start um thank you mayor and council for arranging this meeting. Um it's been a long time coming but I'm glad to see it actually happen. Um, I wanted to touch on a couple of things. The first was just to reiterate one of the things Sherannne mentioned um because it was a point I it was a frame of reference that I thought of um just the other day which again as we've talked about several times tonight because residents pay the max tax first for 2002-1 we're paying our tax but as we said we're also paying our portion the portion of our 1% ad valorum tax that gets credited to 2002 doesn't benefit us it benefits the commercial taxpayers So essentially we are paying twice for police and fire services. Um so it's another reason just to think about why you should start trying to do something now. It's to ultimately to fix the burden on the residents. Um the second one is just um as Dane touched on a lot of the reasons you can start this project now is the North Mar Island DDA agreement with Maryland company. And that says the city council can decide to start this whenever they want as soon as the agreement was passed. It says one or more resolutions can be passed. You can do this more than once. You could start a project to fix the current problems with our current CFDs and then start the project again on the new infrastructure when that's known. I real I understand um Miss Goodwin's point about needing to know more about infrastructure, but again that stuff should probably not be charged to existing residents. It should be a new CFD that covers the undeveloped land. So, we're not part of it. So that's going to be something Maryland company qu can agree to pass on their own because they'll be the only land owner of the new CFD district for infrastructure. Um the only other thing I wanted to say was or there was the point I think Miss

Hanford made about the facilities district. Um one of the things that it need to be have money kept for was sewer and storm drain maintenance. Just like every other Vallejo taxpayer, we pay on our property tax bill a charge to Vallejo flood and wastewater, including those including that five-year plan to increase those fees every year to pay for capital improvements across the city. So our future things after 20 years if they need work should be covered by our Vallejo flood and wastewater district fees not a CFD tax because we pay for the same infrastructure because otherwise we're subsidizing through those higher sewer fees mainland Vallejo taxpayers that need the same type of capital improvements. Um, and then the last point, just to clarify one thing. Um, uh, Assistant City Manager Hayne mentioned the 20051B freeze being a subsidy, but it's not really because I think as we showed in one of the slides, money's been sitting there even though you haven't collected revenues in years. So, you're not really subsidizing anything because there's no need for the tax if you're not spending it. Thank you.

All right. Thank you. Next speaker is Anne Carr.

Good evening council and uh Valoins. Um, thank you for having this meeting tonight and this bringing this focus to the CFD issue and also allowing the very informed and sub substanceoriented residents to provide information to the city. It's very refreshing. So, I really appreciate hearing from them first. I'm here to support those residents. I'm not actually um a resident on Mar Island, but this issue has been brought to council repeatedly since I've been back in Valo. So that you know, we're only talking 15 years. And it's time for the city to take action and to stop stalling and to stop dismissing legitimate, wellressearched residential concerns. And the residents of Mar Island have um appeared here in a stellar manner. They're polite. They're respectful. They're informed. They do homework. They do work. They should be paid for. Um and and even the the the council chambers are packed tonight mostly with residents who could have filled up all of the speaker cards and demanded to have time for their individual views. They've held themselves back. So they've re been respectful in just every manner possible. And it it is time to take some kind of action. I think it's unfair and intolerable to ask the residents to wait until somewhere over the rainbow we will get, you know, some mayor island specific plan and whatever. Frankly, my confidence in when that plan is going to come together and be actualized is

diminishing. And I really hate to say it cuz I was behind the whole idea, but I'm looking at the clock and going, you know, Maro Island Company could decide to just wait out the 10 years of their opportunity zone deal and then parcel off the the all the acreage and then we start over. And within the greater context of Valo, it's what tw how many years since the base closed, we need to start taking action. So, um I look at some of the stonewalling that has happened and it reminds me of so many other things that residents have had to come to the city for years and beg and beg and beg and and that's just not right and it's inefficient. So in in the sense of council having these meetings that go sometimes till two in the morning, can we actually take some action and get something done instead of like over and over and over? We don't have time for that. Thank you.

Thank you.

The final speaker is Kathleen Dep. Hi. Um, you can lower the podium podium on the lower right if you'd like. Say that again. That toggle on the lower right. There you go. Great. If you'd like.

I guess I'm here as a one of the 44,000 households that doesn't live on Mar Island that is facing a $29 million budget deficit. And I guess my headline would be, I'm not sure this is your top priority right now. We have 350 households who can stand up and be loud who are asking you about $3 million just as a piece. Now, let me give you a little more context. Stepping even farther back in time. Why do we have Melo Roose and CFD financing? It's because of Prop 13. Hey, I was in junior high when it happened, so many of you weren't born. But

it meant that you couldn't keep raising adoran property taxes. So the rule of thumb when you set these was you made it so the property tax with CFD was no more than about 2% of the property value. That was what the market would accept. These CFDs were set thinking that Maryland homes would sell in 2020 2005 for $700,000. They're kind of back up to that. So, this is kind of market and that you see that in some sense when you see that um CFD. I'm not begrudging people trying to save money, but that was the context on how these were set. This is the world's screwiest CFD. And I say that as somebody who's worked in this field for years who referenced this CFD on a call with CFD lawyers recently. But it it was the intent here in two my first time in Valo was 1993 when I came here to interview to be a consultant on the base reuse plan. We didn't get that job but Valo was moving as fast as possible. Base was closing in 96. They wanted to get this into use. This deal was done with LAR in 99. There was a deal done with Lincoln Property. They did the best they could at the time trying to get this in use. The markets went different. Remediation took longer, but these are contractual obligations. The reason the non-residential gets the revenue first was an economic development play. The reason was the reason Valleo got this land for free from the federal government. free is questionable given the state of the infrastructure but was because it the goal was to replace the jobs the focus to bring down the CFD needs to be on your map your chart's perfect I think we've talked on the phone at points in time in my career but not ever

met you um you got to focus on the denominator you don't want to focusing on who do how many people do you spread five million over don't focus on the five million focus on the denominator If this whole team can get behind you in the next presentation about how to get more development and more people on the island, then the tax rates come down. But back to my point, I am not clear with an interim city manager with an election coming up that this is the best use of the city's resources. It's a great process asked by Miss T, but I don't think this is the time. One one last point there. We've got to be very careful.

Okay, just let me finish in one sentence. We've got to we've got specific planes with time. So, I'll ask the audience. Do I can I get a police escort out? No. Um, but I'll ask I'll ask the audience not to shout out, but we do have to be consistent with time because we got a long meeting ahead of us. And if I start letting folks go over three minutes, then every speaker is going to have to go over three minutes. Then we will we'll go. Yeah. All right. All right. Do we have any speakers online? If the city through the mayor, no speakers at this time.

All right. We will close public comment on the item. And I'll thank again all of our presenters um our Misti representatives and the residents who are here that didn't make comment. I just want to thank you for your presence here um and and being in support clearly um as many of you should with your applause um of your voices kind of being portrayed through your your neighbors. So, what I'm going to recommend right now, I I'm going to try to have us wrap this item by 7 p.m. So, I'm going to ask council members to do one round of of comments or questions. And I do before I go, I see council member Paul Maharez. I have a couple of questions before I provide my comments. And I I guess the the broad question and I'm going to kind of keep it really generic is that our the CFDs are expected to pay for all of the police and fire services on Mar Island.

So do you want me to Yeah, just whoever can answer that. Okay. So and I'll ask the rest I I've been out there on on the other side of this. The noise carries tremendously. So even a little chatter it it's it's much louder up here. So, I'll just ask that you all be mindful of that. Go ahead, Erin.

So, the only CFD that pays for safety costs right now is the Islandwide 2002 that's paid by everybody. The other two CFDs do not pay for safety, although I believe one of them allows that, but the city chose not to pursue that. Okay. And the portion of that that is so we know that the any relief that goes to that islandwide CFD goes to the businesses first. We've established that. What percentage of that is paid by the residents. The the current budget this fiscal year uh the total CFD tax was 2.75 million. Um and the residents paid a 958,000. I'm rounding off which is about 35%.

Okay. The do you want to know the previous years cuz

that's good. That's enough. Um and then what about the bridge? So the bridge repair and maintenance that expectation is that's funded entirely by the CFD as well. That's a line ite Well, there's several line items within the CFD 2002 that covers the maintenance of the bridge. And then that five-year capital program I just mentioned also covers the the the big project that's going on right now, which is mostly by grants, but a little bit by CFT. Okay. But the idea, because I keep hearing the word, I'll talk a little bit about it in a second, but I keep hearing the word subsidy, and I just want to be clear what our expectation is. is the expectation that anything that supports the bridge that isn't paid by the CFD, the city would consider a subsidy. The subsidy is I think in this case is referring to um a previous city manager had agreed to uh share in the maintenance costs for the bridge uh the city share using general funds. At that time it was the costs were about half a million for maintenance. So, the city uh took general funds as a subsidy into the 2002 CFD for about $250,000. This current fiscal year budget, that subsidy is at 200,000.

Okay. And that's okay. But that's to the whole CFD for the for the bridge, the bridge maintenance. So I So the the 2.75 million that's levied by the CFD, that's the estimate that's covered by police and fire. And I don't want to get that that covers police and fire. a little bit more complicated. That's just the total tax. That's the total. Okay. But the the idea is that would cover police and fire on the island. That's the tax needed to cover all the expenses after you take into account the other revenues and the carry forward from the previous year and the interest involved. Okay. There's a couple things to the calculation, but yeah, but the but the idea is that that that's what it would be used for effectively.

I didn't hear the end of that. The idea I'm having the same mic issue you are. The idea is that that's what that would fund, right? That's to fund police and fire services. That the inception of the CFD was that would pay for police and fire on the island? Yes. Originally and continues to pay for police and fire to the island. Yes.

Okay. And does it pay for all has there been an analysis done of the percentage of our police and fire budget that goes to calls for service on the island and how that shakes out with respect to how much that goes in? I think the question is um if there I think folks understand that there's less service needed currently to the island than the mainland. you I I would say most people would agree with that, but at the same time, you have to um have staffing and facilities set up for fire and police for the island. So the police is based on population on the island and fire is based on square footage of space that's not scheduled to be demolished. So if there is a fire, we have the staffing in place. Um, if you only staff for what how many fires there have been on the island in the last five years, you're putting yourself in a pretty bad situation. I appreciate I appreciate you taking those questions. I guess the other thing that I wanted to clarify is so I I think about this a lot and I I'll have some broader comments in a second. I I think about this in the context of the rest of the neighborhoods of Valo. So just as an example, I live in Glen Cove. Glen Cove had a CFD is my understanding. The CFD phased out when the development was completed and now our police and fire are paid for by the general fund. Accurate, right? That the police and fire that we receive in Glen Cove is paid for by the general fund.

Can somebody answer that? I can't speak to Hidden Brooks, so Okay. I I don't know the answer to your question, but I think we would need more information to answer your question. In other words, CFDs are formulated for many different reasons. Services CFDs, infrastructure CFDs, maintenance CFDs. So, all of those are appropriately funded by CFDs. I don't know the Glen Cove one that you're referring to what it was. So, we don't have one. What I'm saying is at currently right now I'm at my house in Glen Cove. I call 911 a a cop shows up that is paid for by the general fund. Well, you started out saying there was a CFD that was eliminated

and there's now not one. That's what I'm saying. So now the residents, police and fire are covered by the general fund. But what I don't know and can't speak to. So I'm telling you what I'm not speaking to. Maybe someone else knows, finance may know, whether the CFD that was eliminated was an infrastructure CFD as opposed to a services CFD.

And I don't know the answer to that off the top of my head either because it was phased out by the time I moved there. I guess the point the point that I'm that I'm raising is that the the rest of Valo that are not in these services CFD districts do have their police and fire paid for by the general fund which is comprised of our property taxes and our sales taxes and all the other revenues of the city. All of the general fund police and fire money goes to the mainland and Mar Island pays for their own with an extra tax, but they pay the same sales tax and the same additional property tax and the same additional other taxes as the rest of us. And that was by design. There wasn't there was a services CFD put in place. That was by design with the development of the island. But I'm just raising that because I'm going to speak in a second about the word the use of the word subsidy. And I I feel a certain type of way hearing that word and I don't even live on the island. Um because I I pay property tax and sales tax and I get police and fire and the residents on the island pay property tax and sales tax and then they have to pay for their police and fire. So I just kind of want to raise that that was that was by design. That was that was by design and everybody knew that when they were signing on. But just as the Glen Cove CFD phased out, there was an expectation by the residents that this CFD would phase out with development. And so I just want to name that. I think there this isn't a I don't think this is a a slight where a finger can be pointed or that anybody is technically wrong or there's anything technically not legal. But I think it's important to just acknowledge that the I I feel the

residents have a right to be upset and to be frustrated by this because you all bought your homes expecting that you would be paying the CFD that it would phase out with development. There were these lofty visions of development that would happen and the development didn't happen. And so now we are all here 25 years later with aging infrastructure that is an albatross around all of our necks for the next several decades including mayor of everybody that's here. This is we're going to be dealing with this and we're dealing with the consequences that the development that was promised wasn't happened. So I just want to acknowledge the frustration and name it because I don't think that that has ever really been acknowledged. And I do think that the residents I've been following this for a good almost better part of the decade probably. And I said I was going to be judicious on time. So I'm going to watch my own time to try and enforce myself what I'm going to enforce on others. I I I just have I have never seen Mayor Island residents come here and ask for something that I felt was unreasonable. I think you all have been more than reasonable. I think your requests tonight take into account the fiscal situation we're in. I don't think that, you know, I I think you could you could be demanding much more, but I think you're coming to the table in good faith, and I think it's time that the city come up to the table in good faith as well. So, that's what I'm going to be insisting on tonight. I I think we should start with the framing. I think we should start with the framing. So, I would love to see maybe let's come up with a different word than subsidy because I've been hearing that word now for many many years. I understand the intent behind it. I understand there was no ill intent, but I think it's it's it's it's not it's not bringing us closer together. Uh I think we need to think about it as what it does is it makes it feel like it makes it feel like Mir Island isn't

part of Valo, that we're not all in the same city. Like one city is subsidizing this other part of the city. I want to raise a broader question. I I actually as a resident of not Mir Island, I would like to know whether we as a as a council as a city think that Mir Island residents should be solely responsible for the maintenance of the causeway because I drive the causeway quite a bit. People go to the go across the causeway for Dock of Bay for Pistan to go to the Mir Island Preserve to go to Mar Island Brewing Quarters, right? Go out for recreation, go to walk their dogs. I I I don't know that. So, I just I think we need to stop. I need I think we need to take a little bit more consilatory language. And this isn't unique to Mayor Island. I think we just have an issue in this city of of digging in and getting into these positions that are adversarial to our own residents. And I don't want to be the mayor of a city that is adversarial to its own residents. I want to be the mayor of a city that is collaborative and inclusive and comes to the table in good faith with its residents. So that that's my commitment. I do support. So I've thought about this and I've heard, you know, the legitimate concerns about, you know, funding infrastructure projects. I think the request to freeze the escalator is reasonable. It's something like $60,000 of impact. it goes into a capital fund that already has plenty of money and we're going to be doing a specific plan in an infrastructure plan anyway. So, I I would fully support freezing the escalator, not because it's going to provide really any meaningful relief to the families, but I think it's a good faith show of a commitment that we want to deal with this. So just taking that step I think would be at least a little bit of a a change of tone to say you know what we're not just going to sit here like h happened two years ago where we're going to say we're going to do nothing and then two years happened and we've literally done nothing. There's

been there's been no no progress and no dialogue. I think at least taking the step to freeze the escalator sends a signal that we're going to do something that we know is gonna prevent additional money from going to this fund, which means we're going to have to come to the table in good faith and find a way out of this. Um, I also I want to I'm going to come back to this in uh the the next item as well. I think the language again just thinking about a more sort of collaborative tone and and not getting into these these adversarial type positions. You know, we need to rephrase the implementation of the specific plan to development of the infrastructure plan. I think the CFD should be addressed with the development of the infrastructure plan and we've actually had this conversation in meetings with Mayor Island Company and and folks. I think that is the time to do it and that time is in the next, you know, six months to start that conversation. So, I'm going to be advocating for that. That at least we start that conversation. We start the conversation of what it looks like to grandfather in the current households or grandfather out, I guess, the current households of any new CFD. We can we can start having those conversations and more importantly pushing forward development because that's what's going to get out of this. I mean, the pick the the situation we're all in the the residents that are agrieved is because there's not been development on the island. So, we also need to make sure there's development on the island. Um, I'm also going to recommend and I'll probably do this in the next item that we start meeting with the subcommittee and have the subcommittee take this up because I don't think we're going to we're not going to get through everything related to the island this evening. We're not going to come with really any significant conclusions, but I think the subcommittee is a good space to have that conversation and it gets us into a cadence where we're accountable and we're providing touch points with all the stakeholders. So, I'm going to I'm going to make the recommendation. We don't actually have to move that because that subcommittee is already appointed and and stood up. I'm just going to have

that subcommittee start meeting in in the next few months and and come up with a cadence for that for that committee to meet. So, I will stop there. I will ask my colleagues to do one round and we will go over to Council Member Paul Morris.

Thank you, Mayor, and thank you for everyone attending this meeting tonight. It's a very important meeting. Um, my request is a modest request, but it represent a giant step toward fairness. I'm requesting the freeze of the CFD 20051A and escalators. And just to recap, uh, for my colleagues, 20051A facilities that amounts to $100,000 and there's a 2% escalator to that. And the 20051A services, which is a little over $280,000, and that's a 4% escalator if I'm not mistaken. And there's also the 2% escalator for the 2002 CFDs. Um, for the average rate, the freeze of 20051A and the escalators will represent about, at least according to the staff report, uh, at least $700. I think it actually would be more than that. Uh, maybe at least uh, $1,200 uh, in savings for each household. But that means a lot for these residents, a number of whom are fixed income and a number of whom are unable to retire without these savings. The bigger conversation that we need to be having and never mind the CFDs is how we will finance the development of Mar Island. We are in need for serious investment in Mar Island. Freezing 2005 1A and the escalators will amount to no more than round error in the grand scheme of things. We need to be looking at all the opportunities. We need to be looking at finding an anchor tenant or anchor tenants to invest in infrastructure to be that first domino. I know the mayor and I have talked a lot about ship building and other kinds of manufacturing including defense tech. I'm also personally looking at clean energy manufacturing and working with uh the green empowerment zone to make that happen. But these are the conversations and these are the serious things that need to happen in order to encourage more of that kind of that kind of development.

Additionally, if rateayers are incentivized to sell their homes, we as a city stand to gain revenue from the property transfer taxes. And in the end, we need to get serious about development on Mayor Island. And this isn't an eitheror situation, choosing between economic development and fair taxes. We can and should do both. Um what was also asked from Mr. Boon was uh uh us to talk about the new CFDs. And right now I think it is a fantastic time. We're uh on the cusp of that Maryland specific plan. Um, but I agree we need to talk about the new CFDs, but that doesn't mean we should take our eye off the ball on all the all the important things out there. We need to aggressively push for uh progress on the specific plan. We need to aggressively push for progress on the Maryland infrastructure and we need to aggressively push for a realistic financing plan for Mary Island. And all these all together will will inform the CFDs as we go along. Um, so just to recap, uh, I understand this is a challenge for our budget, but these freezes are non-negotiable non-negotiables for me and we need to figure out a way. Thank you.

Thanks. All right. I have Vice Mayor Matulik and then Council Member Gordon. Thank you, Mayor. Um, there was a comment um, as subtle as it was that um, to freeze the escalator, there was a legal component. Can we further elaborate on that?

Yes. And um I'll go back to Mr. Boon's presentation because he is correct when he says that there are CFDs throughout the state of California that have by council action frozen their escalator. And believe me, it it would be lowhanging fruit if it weren't for the adopted tax formula for this one. um what in those other CFDs, everyone is taxed at the same step. In other words, all developed property, whether it's residential or non-residential, they're all taxed. Those CFDs have been generally built out or close to built out. So, when the council froze the 2% escalator, it affected everybody the same way and the ca the tax formula allowed for that. the tax formula for 2002. And again, just to so everybody knows, I'm I'm the unfortunate person who is still around from 2002, but we don't go into an agency and say, "Oh, let's try this." What we do is we sit and hear what Lenar Island wants, what the city, the city at the time, the city staff, including the city manager and everybody down from there was at the table. and we heard what everybody wanted and that's what was put in place because I know that everybody's um it was Kathleen who said it's one of the craziest CFDs. It's It's kind of out there, I'm going to say. And I've worked on hundreds of them, but it was the feeling that Lenar Island is was building all this infrastructure and everything and they were holding on to the non-residential and so what was decided was we'll tax the residential and then whatever else is needed, Lenar, Mar Island, and the non-residential properties will pay. So that's how we got where we are today. what it says right now, and I would love to hear from an attorney if there's a

way around this, but it says that the maximum special taxes shall be increased by 2% per year. And it would be okay if we froze it except that it says step one is levy up to the maximum special tax on residential property and then if additional revenues are needed levy on the other types non-residential public etc. And so when you look at the that language it has the unfortunate reality of saying the maximum shall escalate 2% per year because what Mr. Mr. Boon correctly pointed out is it's the tax that actually is levied that those other agencies have frozen the escalator. So yes, the max tax goes up at 2%, but they're saying we don't need the money, so let's not apply that 2% escalator. Unfortunately, here step one says the maximum tax is levied on residential property and then the language says the maximum special tax shall escalate at 2%. So, I'm not saying maybe there's not creative attorney work that could be done, but I think there's a real problem with the adopted formula being able to do that.

So, the question goes to the attorney sitting there. Is there Yeah, good evening again, James Worziniac. As Miss Goodwin said, we've looked at it as well. The language is very clear. This is our language. We have to follow. The city has to follow. Other cities might have different language. We don't know what their language says. This language says exactly what Miss Goodwin said. The maximum special tax on residential shall be increased 2% per year and you shall levy at the max if you need that money for the requirement.

So long and short, you're saying that we can't do it. I I don't see it and I would defer to the attorney and I think you've just heard it's it's very unique with the the way the steps were done. Um it precludes it precludes because we we don't care what's levied on non-residential. They're not even paying their maximum tax. We're trying to get to a break on the residential and unfortunately step one makes them go to the maximum before anything else is levied. And that maximum tax it says shall not may be increased.

And so with that being said, if there's another attorney out there that can um debunk or kind of refute what that is saying, I think this council would be open to hearing that. But um but but I think long and short, I think I think the simple answer is we need development here. And so being on the planning commission for over seven seven and a half years and not seeing that happen, th in my mind, this is a three-legged stool that that is that has been the challenge between Mayor Island Company, the city of Valleo, and our economic development um uh director along with VFWD. And until the three of these come together to to focus on the development of this of the island, these residents are going to are going to have to appear to be they have to suffer until this gets done. And I would like to find a way for us to try to get beyond that. Um because we it doesn't seem like all three components of this of this three-legged stool are are doing their part to be able to get this done. So, I I would like to challenge all parts of of the three-legged soul between the city, Mayor Island Company, VFWD, and our economic development team to get this more of a focus to where it it's been um it's been absent for the past seven, nine years that I've been on planning commission and on this council. Council member Benszer, she

Sorry, I thought Council Member Gordon was next. Okay. I just could just a couple questions. One, one of the speakers asked that um or stated that we could negotiate CFDs right now and then we could renegotiate them once we have the general plan. We could do it more than once. Is that true or is that Do we get one bite of the apple? I'm not I'm not sure if they Oh, sorry. I I just think I just was leaning this way. Um I'm not sure if that meant put a CFD in place and then put a new CFD in place.

No, it I think it was to get started on the discussions and then once the actual data was known, I mean, I I agree. you know, narrow island company. I don't know if they're here tonight, but they haven't been part of any of these discussions. And right now, as Erin mentioned, because of the protest um procedure, they are in control. And so, we could have all the discussions we want and unless we know they're going to buy into it, it would be hard to see that we would get very far. But um I understand the the desire to get moving on it for sure. Um you know the me the mention um of rely not saying implementation of the specific plan but saying the availability of the capital improvement program that that's as soon as the public facility plan is done even in a draft format then some estimates could be done. Um so I don't know how far we are from that.

Okay. And in your professional opinion, how how long does it take on average to negotiate CFDs? Like how long is the discussion? Are we is it like three months? Is it a year? Is it two years?

No, not this one. For all the reasons we heard tonight, we have a motivation that's unique for sure. Um and there's only Well, the the actual vote um it will depend on the boundaries of the district. If the new district truly is just on Mar Island Company's property, they are the voter. If it if it branched over into any of the existing residential properties, then they are the voters for the CFD. Um, so I would say safely a year would be a good estimate. So if if it's going to take a year and we like can we get some of the preliminary I mean I'm sure there's lots of legal mumbo jumbo that you have to iron out and it takes months to a year to do that and can we leave the the dollar signs off and just have the the parameters part starting to negotiate so that way when the specific plan is adopted we're ready to go with filling in the line items of the dollar amounts and figuring out what it's actually going to be. Is that you know is that reasonable?

The truth of the matter is the the documents themselves are can be drafted within within weeks. It's the dollar amounts that people are negotiating that take so long in that process. And Okay. Okay. And then I I was also confused because you commented about how if the if the boundaries are just the Maryland company property, does that mean that when that happens then the CFDs for all the residents just automatically goes away or does that mean that they continue to pay that same CFD and then Maryland company pays for all the other stuff? Is that

It depends. It depends and that's part going to be part of the negotiation. It depends on what the city decides to do. If if this if the existing CFDs were to literally go away, that's a dissolution process where the council would vote to dissolve the existing CFDs and that means all of the revenues that that go with it. Yes.

And it's only is it is it possible to negotiate only certain CFDs going away versus is it all like all of them have to go away or just we could dissolve one of them? Like how how does I I guess I'm just I'm wondering how that all works. you um you would dissolve them one by one. There is a strange connection and this is where the funkiness comes in with Mary Island between 2005 1A facil the 1A and 2002. What LAR did just to let you know how it got there. Lenar determined what they thought the maximum tax rates were that these units and non-residential properties could bear in the end. And then what they said is whatever of those dollar amounts, whatever is levied in 2002 for services would be subtracted out of that. So in other words, you always keep coming back to the maximum tax rates in 20051A.

It's just that as long as they're paying 2002, that has to be subtracted and you can't go that high while they're still subject to 2002. So, it's a very that is a very unique connection and that's what the parties negotiated and that's why these formulas are so funky. It wasn't like a crazy idea that I had one night. It was it was what the two parties negotiated, right? I mean, and just to be clear, level setting like the mayor said, the residents had no vote on that that because they they didn't own the houses at that time. It was literally the city and and Nimttz at that time or who who or Lar, excuse me, who owned that. So the residents here had no vote in all. There were no homes there.

It just that's the way it was. So just so we level on that. Um when if the city or you know the the specific plan, do we have a date when it's completed? And who's actually driving that? Does the city drive that? Does Maryland company drive that? Who actually drives the completion

through the mayor? So the plan uh was submitted last fall. They just received their first comment letter back from city staff in February. Um, you'll hear in the next update, it's kind of chicken and egg thing, but you'll hear about timelines in the next update. Um, we're hoping to get some of that infrastructure information preliminarily by late summer and then a resubmitt of the Mar Island specific plan alongside an infrastructure plan in the fall to winter. So, the timeline is very close. So, the conversations could begin moving forward. And but again, so who actually drives that? Is the city driving that timeline or is Maryland company driving that timeline?

It's a combination. So the city took a while to get comments back. We ended up hiring an outside planning consultant to help us uh cultivate or culminate all those qu those responses. But their response and their analysis based on our comment letter, you know, there's time that's taken and experts that are hired and then they reformulate reformulate it and then resubmit it. Okay. Thank you. And then my final question, um, and this is I'm not sure if it's for the consultants or the city, but the Blue Rock Springs and the Costco project were referenced, um, by a previous speaker. Do those two projects include um, CFDs for services for police and fire?

Yes, they will. And that's a done deal already like that is part of their perform analysis. Yes. Okay, that's all my questions. Thank you. Council member Matias,

Council Member Gordon, do you want would you like to go now? Okay. Go ahead, Council Member. Thank you. Uh, Councilwoman Mr. Boone, can I uh Mr. Grim, can I ask you two quick questions? If you don't mind, come up to the podium. All right. Um, thank you for the presentation. First question I have is, um, what does success look like for Misti at the conclusion of this process?

I think the mayor has uh touched upon it briefly. new CFDs recognizing as has been addressed by the speakers that's a process that's going to take some time but at the end it would be new CFDs with the existing homeowners who paid that $67 million that Sheranne put up for you or was in the handout. Um, the existing homeowners have paid and paid and paid and paid and paid. So, new CFDs should cover whatever costs the city deems are necessary, but the existing homeowners have paid their fair share. Now, landscaping and lighting, that's what LAR proposed all the way back in 2008. Lunar, a national homebuilder, the first developer on Mayor Island, wrote a letter to the city. We've presented it to various city councils over and over. And boiled down what they said is, "Get rid of the CFDs. Charge only for landscaping and light and lighting. Get out of our way and let us make you money." The city said, "No, nope, not going to do it."

So, Lenar left in frustration. My second and final question, uh, thank you for that, is um, uh, what is the status of the request um, that you may or may not have made to the state controller regarding the CFDs silence. So, when was it made? And what was the last? February of 2024. Okay. More than two years ago. You haven't received any communication from her office? None.

Okay. Um, thank you. So, my two questions. Um, question for city staff real quick. um property taxes on the um commercial side. Just for my own notification, are we seeing uh property tax increases across the island every year?

Um I I actually don't know. That would be a question to look at the budgets and our finance folks aren't here. Um as you know, we're we we don't have our finance director anymore. Um but I I could get back to you what the you're just it would be just looking at the numbers year to year. Okay. So um let me ask a quick followup to the uh CFD consultant we have here. What would occur if we were to set up uh an enhanced infrastructure district over uh Conley corridor um and any of the commercial spaces that uh the uh Mayor Island company has? How would that sort of conflict with the CFD structure we have?

What it would do, it would be a different source of revenue. It would take a portion of the property tax, the growth in the based on the growing value as development occurs. You would take a portion, whichever portion you designated, it doesn't have to be a given portion, and those property tax revenues would go to pay for whatever infrastructure you designated could qualify. So it would take money that would otherwise go to the general fund would go to a special fund to pay for um regional type infrastructure.

Is there anything that's stopping this body from proceeding with the creation of an enhanced infrastructure district at this time relative to the specific plan and the CFDs and everything else we got going on in Mir Island? it there would be a vote required um of the property it within the EIFD um whatever it turns out to be and then um but other than that no I mean that's a just a totally different source of revenue. It's a port but it's a source of revenue that would otherwise flow to the city. So um we won't use the word subsidy by any means. It's really just an a different um type of financing that would be factored into the mix.

Okay. Um and then my last question is uh just for my own notification uh so um or does this body have any authority to set different rates at this time for different subdivisions? I know we have some that have been around for some time. We've got some in the pipeline. So within the CFD structure, does the council have any authority to change any of the existing rates? Not necessarily increase them or freeze them, but perhaps change them.

Um, no. Within the in these existing CFDs. Um, no. what the it would have to go through change proceedings to I mean obviously we talked budgetarily there's ways to do it but with the strange structure of this CFD because um non-residential benefits first um changing the rates would take a change proceeding and and a vote um to to change it and be the when we talk about a vote that's at the end of the process process. The trick is if it was something that affected the non residential property negatively, the first thing that comes in the process is a protest opportunity. And any land owner that owns 50% or more of the land can kill it in the protest. And that's why um I don't think anybody in the room is is that optimistic that if something was done to overhaul it that had a major negative impact on the non-residential Mar Island Company is the biggest land owner in the CFD. So

got it. Um and then uh just a quick clarifying question. This is my last one to the acting city manager. So you guys asked for um you made a request for causeway improvements some time ago. Was that taken from uh 20051A or did we use other sources of funding? Because I can't recall. I'll let Erin respond. Thank you.

Uh the only CFD that participated in the Causeway Bridge rehab project is the Islandwide 2002 CFD. Um before I actually started here, the city started collecting a little bit each year, not each year, but occasionally from year to year. and they had uh I don't know million something set aside and that uh they once they got the grant in place that was used to help uh pay for the city's share of uh the city share of that project. Does that make sense what I'm saying? But the other CFDs, the 2005, even though it's an allowable, uh, it's eligible. The city has not paid used 2005 funds to do anything with the bridge.

Okay. For some reason, I thought we had used measure P dollars for that. Um, so I was Yeah, that was outside of the CFDs, I believe.

Yes, that was additional to get us to the delta because prices went up. Um all right. Uh so um I think uh the the council should take uh um should um support a resolution to the state controllers's office uh following up on the requests of the um uh Mayor Island residents to um formally look formally do an audit on those funds going back 20ome years. Uh, I think we should formally affirm um that we support that inquiry that was sent two years ago. I support uh the requests made by council member Palis, but would also like to see uh the creation of an enhanced infrastructure district over the um commercial corridors uh in May Island because at the end of the day um that infrastructure is going to have to be replaced and rehabilitated. And so, uh, I don't believe that has been a part of the conversation. I think all we've been talking about has been CFD, CFD, CFDs. And I don't see a world where, uh, the Mayor Island company, and they're going to be in the room, so I'm going to ask some questions later. They're going to willingly foot the bill for all that stuff, um, when we talk about the specific plan. So I do want to figure out additional creative ways to start to raise revenue for the infrastructure enhancements across the island and the enhanced infrastructure district is a mechanism to do that. Um I also agree with uh uh the vice mayor that um we have not done enough around economic development in the island and uh to me it feels a little fuzzy. You know, I I usually go on Loopnet uh commercial building site pretty often. Um and I've seen a lot of industrial buildings vacant for a long time. So, I wonder, you know, if that's is that the city's responsibility to attract tenants, is it Mayor Island's

responsibility? Is it a bit of both? Who's doing that? If we're all, you know, caught up in paperwork and bureaucracy, who is really focused on that? So, I do think there needs to be um attention paid to that because uh to the vice mayor's point, if we can attract tenants, uh that can uh lessen the load on on everyone. So, um just uh appreciate the addition of my two requests to the others that have been made this evening. Great. Thank you. All right, Council Member Gordon,

thank you so much. I appreciate the presentation from everyone who spoke. Your voice was completely heard. Um from uh Daniel Boone and uh Miss Shir uh Miss Grahams, I would say thank you to everyone. I do have a question uh to the gentlemen. Uh Mr. James, is that you? So, did you say uh a couple years ago this whole complete um presentation was challenged to the courts and the court said the city was on track of what they were supposed to be doing. I want to make sure I clarify and understand. So, a lot of information has been out there.

Yeah. Thank you, councilwoman. I I will clarify. um the city uh conducted a judicial validation action of the formation of the CFD in 2002. So that was at the very beginning. There was actually some uh some of the tenants that were going to be paying the commercial non-residential tax at the time that Lenar Island was going to pass through. They were unhappy. So it did go to the court. The court validated everything, but that was back in 2002. So there has not been a a revisit to the court since then.

Thank you. And um can may I ask if you uh Manny can you please go to slide five? Um I don't I right here in the presentation the CFD taxes in Solano County. Thank you to the city staff particular uh Gileian can you please explain to us if we started doing um any type of work regarding the CFDC's on mayor island would that be challenged in any of this particular area for the city of per my question earlier today when I called

uh through the mayor it could it very well could um So other projects that are coming in that are going to be dependent on CFDs may look at this action um as the city supporting and assisting a augmenting I don't know whatever word you want to use these taxpayers um it does affect the bottom line of each of the developers that are currently in process and it also affects the people such as those living in Hidden Brook that are also paying the CFDs currently. So there could be challenges moving forward with those other developments from the developers, from the homeowners moving forward. Yes.

Thank you. And also um I'm not sure would this be legal or staff. If anything um changes from any of the CFTC's where wherever they are within the city of Valo, will that affect the the inland of Valo? Number one and as we all stated the U Mayor Island is part of Valo as well. So would it how would this affect the inland?

So I think one of the speakers and Aaron in the presentation spoke to the fact that the effects um are potentially whatever amount the council would motion to move from the general fund to pay towards those taxes the that would come out of the entirety of the city's budget. So those that are currently not paying extra, those resources from the general fund would be less because the city would take, say, for example, 3 million out of the general fund to pay for these taxes. And I think the difficulty, you know, understanding this moving forward is originally when Mar Island wasn't part of the city, it was annexed in, we brought it through forward through that process. there was that whole cost neutrality um policy set into place that's also happening on other larger developments such as Blue Rock Springs. The city may not have in the budget to provide these services to an additional 500 homes in that area. So, cities across the state are using a CFD opportunity to pay for expansion so that we can increase housing and still pay and provide services of police and fire, you know, um to the expectation of the community. So I think the challenge there would be well if they are getting a break from their CFDs why aren't we? And why is I as a developer coming in to pencil my project I get a less I get a reduced amount for the cost of my home because the homeowner actually pays CFDs that are in addition to the regular property taxes but this development or this developer may not. So I think there is an argument there from developers and from existing CFD payers if the city chooses to move forward with a credit of any sort in this instance.

And my last question is um I I've heard in the past uh that there were some freeze. Uh could you clarify what what that was and how much that was and how much did it did it help the city or did it harm the city? Well, do you want to pull up the slide, Erin, and explain that? It it did come out question. I didn't quite understand what she was the prior freezes and monies towards

How many do I have? Can I go back? Uh, let's see. This one, I think. Are we talking about the one in the middle of the freezing of the CFD tax, the 2005 1B? Is that what you're talking about? I'm clarifying. Yeah, I'm asking because I heard it.

One of the the CFD that was frozen, meaning it wasn't it wasn't um eliminated in terms of it still exists, but we have stopped collecting collecting the tax starting fiscal year 2021. So, what is that six years ago? Uh that is the 20051B uh tax tax and on average it's about $400 per household. And I know you can't do the math now, but could you bring back to me, you said that's been six years ago. How much would that total benefit the city today 2026? How much is the savings? Well, the it benefited the residents who didn't pay the tax,

right? So, I'm just asking, can you bring that back to me? Like the total amount of in six for six years. We'll do what we can. It's a little I'll have to have uh Susan do the analysis for us. Um but Sure.

Thank you. And I appreciate that. I just um I just have my request is that because we do have a new city manager coming in and um I would like to pause on any decision and with my colleagues unless we want to move forward with the city's recommendation which I agree to that that we should take the city's uh recommendation. Thank you. All right, that is everyone and I'm going to, you know, I said I was going to be really tough on time and we're going to try to make up some time. I am hearing a couple things that'll probably come back in item B. Um, particularly the infrastructure financing mechanism. I think we'll be able to get that into that more with the next item. And I think we have I I guess I want to make one just sort of closing comment which is I I meant to say earlier I hope it's clear that in this conversation about this specific CFD we are not debating CFDs more broadly. We're talking about potentially even putting a new one in place. We have other places in Valo where these are in place. We're talking about a very specific scenario in which a CD CFD was set up in 2002 with development plans that that was supposed to phase out. That development didn't happen and we have a very bizarre agreement that we're trying to to parse through. So, I'm hoping that that it's clear through this discussion that we're taking this as a one-off because it is an incredibly unique situation on Mir Island that we will not face with any other development because we will not have any other uh decommissioned naval bases to refurb to my knowledge uh that there there aren't any others in in Valo. So, we're we're taking this one um very uniquely. And if I'm hearing one area of consensus in this entire room, it's that we will all very much look

forward to the day where we can put this one to bed. Uh maybe sail it on a p down the Nappa River. Uh when we have something else in place to finance uh the island because this this thing has been it sounds like a point of stress for for most parties involved for the better part of 25 years. Um, so with that, I it sounds like we have some interest in exploring the 2005 freezes, but we may need a little bit more analysis. So, we may need to give direction to bring that back. We had a request to follow up on the controllers audit, which I too support. And the rest of it, I think, can come back in the specific plan. Uh, do we have anyone that's interested in making a motion? And if not, I can take a stab. Go ahead, Vice Mayor.

Oh, go ahead. I just have a clarifying question. You're talking about the the um 2005 freezes. You're not talking about the ones where I think you'd said that it's it would be illegal for us to to freeze the 2%. That's not what you're talking about. I think that's what we want to dig more into is what are our options. So, we're looking for legal options. We're looking for what are our options within the context of the 2000 the escalator and I'm I'm looking at my colleagues over there.

Go ahead, Council Member Paul Morris. So, never mind the escalator, but just the 20051A freeze. I mean, is that on the table right now or we or are you talking about coming back to us later for an a decision on that? If I could do it right now, I will. My understanding would be it would come back in the budget process. We could direct that it be analyzed and brought back in the budget process. Okay.

Uh, Council Member Matias, Um, thank you, mayor. I just want to clarify that with my request, um, I don't necessarily see the creation of an enhanced infrastructure district as something that we need to be negotiating through the specific plan. It's something that needs to happen cuz otherwise, we could be subsidizing this all we want. When all that infrastructure needs to get replaced, those taxes are going to go back on the residents. So, I'm trying to figure out are there creative ways, and this is just having staff look into exploring what that would look like to start to create a fund that starts to address what will be probably hundreds of millions of dollars in um rehabilitation of infrastructure on the island. And uh and that's a mechanism that other cities use for that. So this is just very preliminary uh and um it's just to also make sure we have a parallel track with the specific plan discussions that are underway.

And the comment I appreciate the clarification the comment I was making was I think that conversation would happen in the infrastructure plan discussion. So there I think the infrastructure plan financing conversation would have all those elements and we would then be choosing from a menu of of elements or are you proposing setting up an EFD separate from the infrastructure plan?

We need to start saving right now for that. Um and I've been mentioning that for well over a year. Um now that process takes a long time and all I'm asking for tonight is for staff to start to look into it. I'm not asking anybody to set anything up. I'm just looking asking uh that the council support me in setting that up because that increment in property tax can be set aside uh in a fund to help pay for those things and we're behind the A-ball. Um so that's that's really the the request. Um and the reason why I'm bringing it up right now is because it is tied to CFDs. Again, we can we can say let's credit this and let's do that, but when they have to vote on a new one, if these funds are not in place, folks are going to have to take on that hit. So, we're going to be back to square one again.

I see council member Palm Marz. Go ahead. Council member Matz, may I make a a friendly amendment? I understand where he's coming from and I support the looking at uh EIFD, but I'd like to just say like let's look at it more broadly just TIFFs and other financing infrastructure out there. I don't want us to just only look at EIFD. It's a great tool, but I think there are other uh tools and we can have offline discussion about that later. I'm going to email you. But just I I just want to make it more broad about just like looking at tax incremented financing and other uh financing infrastructure out there. Thanks. Okay. So, we'll combine that into Do you want to take a stab, Vice Mayor?

Yes. Um, I move that we um have a presentation and direction to staff relating to the Mayor Island Community Facilities Districts uh 2002-1 and 2005-1A and 2005-1B with the um request for the um state controllers audit that was submitted in two 2024 of looking into the CFDs along with looking at other um um funding sources such as EIFDs and TIFFs. um looking into uh getting the creation starting the creation of those um moving forward. And to clarify and this is something maybe we can get direction on with respect to the state controller can council would it be easier if rather than drafting a resolution or which mechanism would be better the council drafting a resolution to the controllers's office or the council authorizing my office to send a letter on behalf of council to the controllers's office because I know we've done both models. The second one might be faster. We could put it on consent. Um do we want to do that? I think that's probably easier than a resolution.

Okay. So, we'll I'll I'll friendly amend that we mayor's office will draft a letter uh on behalf of council. We'll throw it on a consent calendar and any other clarification need or are we good? We're bringing back the freeze option for the budget process and we're bringing back the infrastructure financing. Okay. Can I clarify through the marriages for the motion through the clerk? So on the freeze option, we're looking at 2002 and 2005 or just 2005. My understanding is just 2005 and I'm seeing a five from both the 2005's 1 A. Okay. 1 A and 1 B or just one 1 A

1B is already frozen. So this is one A 1 A ser uh services and and uh facilities. Can I interrupt?

Oh, go ahead. Yeah. So I I I got the impression that people were not contesting the 20051A services CFD that acted as a LMD, a landscape maintenance district. So I just if we freeze that, that will have big implications for the city. Uh we're trying to keep that tax artificially steady for the residents and that pays for all the extra landscaping and street work that goes in the residential areas. Um, it's the facilities CFD that I believe council member Pal Maros has been focused on in terms of freezing collecting that CFD. That's for facilities, capital improvement projects, not the services arm of that CFD. So, I just really want to make sure you guys know what you're

That's my understanding. Yeah. That we would be doing the one that goes in the capital fund, not the landscape maintenance. Am I So, the land Yeah. Sorry. Is that Is that one A? They're both so 1A has two different CFDs I see components there two different taxes within one CFD. There's the services CFD which I think everyone is fine with leaving in place. That's the 1A services CFD and then there's the 1A facilities CFD and that's the one I believe you guys want to look at freezing through the budget process. And that's the I'm looking at the residents to see that's the one that you all were referring to, right? This the facilities one.

Yes. Okay, that's the one that the plan says. Okay, then I believe that's the one referring to. Council member Gordon clarifying question. Yes. Anything uh if you write to the controller, could we please make sure we get a copy of it? We would put it on a consent calendar. And can we please reread that again because I see that uh our our acting city manager have something to say? I got it. I got it. All right. Are we ready to vote? Can you clarify? You say that in

there were three components. So we're directing the freeze of the CFD 20051A the facilities component uh that options come back as as part of the budget process that uh further discussions of taxation further methods of taxations be explored for raising revenue on the island such as uh enhanced infrastructure financing districts, tiffs. Um and that uh the mayor's office will draft a letter on behalf of council to the controller. Yeah, that'll go we'll put it on consent.

Motion carries unanimously with council member Leu absent.

All right. Thank you all very much. We are going to move we are going to move to item B and item B is going to have two components. First we have a guest here that will be doing a truncated presentation on development agreements and then we'll be talking specifically about the Mir Island development agreement. And my question for the council is I think initially I was thinking we would go through the development agreements presentation and then take a short recess. We might want to take a recess now in between these. I just got a request for one. Why don't we start 750? But if I say 7:45, that's too much, right? So I'm going to say we are going to start at 7:50 sharp with an emphasis 750. So we're going to take a 13minute recess.

One minute warning. All right, we're going to work our way back. All right, everyone. In the interest of everyone's time, I am going to bring us back together and we are going to proceed by calling item 4B and I'll ask our city clerk to announce this item. receive anformational update regarding the mayor island development agreement specific plan update beautifification plan Connelly corridor project and coral sea village subdivision. All right, thank you very much. So we have two components to this item. We're going to

have our development agreements 101 presentation uh for about 45 minutes and then we will have the presentation on the update of the Mar Island development. Then we will take public comment and then we will take council comment. to just give everyone an idea of what to expect. Um I'll turn it over to uh acting city manager H. Do you want to introduce our guest and then we'll turn it over to him?

Sure. Um this evening we are honored to have Mr. Jerry Risa uh present for us um a presentation about what development agreements are and why they can benefit the city and partnership with the developer. And it will give us a little context on the update that we'll be receiving shortly on Mar Island. and um just toot a little bit on his horn. He teaches this class at UC Davis, so we are very lucky to have him here this evening with us. Thank you, Mr. Risa. Take it away. All right. And we need you to hit the button once. There you go. Perfect. Welcome.

Good evening, Mayor, council members. Um the the title of this presentation, development agreements, contracting for vested rights from public and private perspectives. That's the long title. It's really development agreements 101. And I mention public and private perspectives because they're negotiated agreements. And I want to give you a little bit of a flavor for um I mean I think we probably have a better sense of what the city would hope to get out of a development agreement. But I also want to share with you what I think the uh Mayor Island company what private developers hope to get out of development agreements. Okay, I I have a slide here just these are some development agreements I've worked on over the last 30 years and and I put this slide up here really because it's it's a variety of projects. There are largecale multi-phase development projects that are somewhat analogous to Mar Island. They're also large singlephase projects. Development agreements are very flexible documents. They're flexible agreements and they can be used to solve development related problems in a variety of contexts as you can see here from the um the wide range of the types of projects where um we've used development agreements in the past. Um also I think it's development agreements are uh a rare agreement because they're authorized by state statute. So most contracts parties enter into contracts because they want to cut a deal. Development agreements are specifically authorized by the state legislature. And there's really two reasons why we have development agreements. And one is a problem that the private sector has and the other is

a problem that the public sector, the city has. And so on this slide, it really describes the private sector problem. And and the problem is when you're a developer and you're doing a multi-phase development that's going to cost millions of dollars of upfront planning costs, when do you know when do you have asurances that you can actually build the project that you think you have approval for, right? Because politics change, councils change. What if you get a bunch of land use approvals and four years later those land use approvals are taken away? the property's reszoned. So, that's a tremendous problem for a developer that's trying to finance very expensive infrastructure. And um absent the development agreement statute, the law in California was really not favorable for the development community. And the answer to that question, when do I know I can proceed with my development? The answer was very late in the process. after you have already started building vertical improvements. So, so that's a problem for the development community. And on on the city side, the problem is um a developer comes to town and wants to do a project and you might have a long list of conditions that you would like to impose on the development, but then if you're just using your police powers, there are limitations on conditions you can impose. and you might propose a condition and run it by the city attorney's office and the city attorney's office would say that there is no connection. There's no rational basis for the city to impose that condition. It goes beyond what the city can lawfully impose. So development agreements also solve this problem for

cities because they're negotiated contracts. the the usual rules that limit the conditions city can a city can impose on new development don't apply. It's a negotiated deal. So, you're able to um enter an agreement with a developer and gain the benefit of what I'll call enhanced public benefits. Benefits that go beyond what you could usually condition a project and obligate a developer to do. So the the bottom line here is because there's some thing to be gained for the developer and the city can also uh achieve some gains. It's a negotiated deal. So there's no obligation. Cities don't have to enter into development agreements, nor do private developers. So parties enter into development agreements, the public and private sector, when there's a meeting of the minds and the deal makes sense for both parties. Um, California is not alone in development agreements and so to date there 16 other states have followed California. California was the first. Okay. Um, vested rights. What are vested rights? vested rights. It's another way of saying guaranteed rights of development. And so what are the types of um uh rights that development agreements usually afford a developer? What what rights are locked in for the term of the development agreement? And so one of the basic ones typically is the highlevel land use approvals. So, the city's general plan land use designations. Um, we've heard this evening about the anticipated upcoming specific plan. That

would be something else that's locked in place. Zoning regulations. Um, development agreements afford protection from uh development moratoria, so uh growth control measures that might be put on the ballot in the future. There may also be additional project approvals that are um considered for approval at the same time as a specific plan. For instance, uh a tenative map for Mayor Island would be an example. Um development impact fees. So the city's existing development impact fees are oftentimes, if not fully locked, they're at least a topic of conversation. They might be limited for the term. And then what I've described here in the last bullet point, new exaction. So dedications of land for major public uses. So major streets, parks, major public facilities, open space, etc. So typically that'll be covered in detail within a specific plan and that would be locked in place. Um, development agreements don't lock in place all laws. So there are a number of things that that a development agreement does not freeze. Examples would be important public health and safety measures, building codes, federal and state laws. We um the the city of Vallejo cannot lock in place federal and state laws. Uh property sales tax most other taxes, special taxes and assessments I'll I'll speak to later. Um there are a few things that have to be in a development agreement. So the development agreement has to address permitted land uses, density of development, height and size of proposed buildings. There also has to be a provision for annual review in in Vallejo. That's typically that annual

review is typically done by the planning commission. Um optional provisions both state law and Vallejo's municipal code authorize optional provisions that can be addressed by a development agreement and those include um the process for subsequent or future approvals. So, for instance, after um when a specific plan is approved and a development agreement is approved, that doesn't mean a developer can come in and pull a building permit and start developing. They're going to be other rounds of land use approvals, architectural review, site plan review. The developer will need building permits, grading permits, perhaps conditional use permits. And the development agreement will speak to and lay out a process along with the specific plan of how those future approvals would be issued. The um the the development agreement and spec well the specific plan must address financing of infrastructure. The development agreement may address that. In the case of Mayor Island, I anticipate the development agreement most definitely will address financing of public facilities given how important that is and given how old um many of those existing facilities are. Um I mentioned that Vallejo's municipal code echoes requirements of state law. There's some citations here. I won't read everything on this s slide, but basically it it mirrors what can be found in state law. Um there's I suppose given the importance of development agreements and the fact that they're considered legislative acts means there's a particular approval process that the city must follow before entering into a

development agreement. So development agreements are approved by ordinance. And so like any ordinance the council might consider that means introducing the ordinance a second reading delayed effectiveness 30 days after the second reading. Development agreements are subject to voter referendum like any legislative act or um uh ordinance and um they they cannot be approved by initiative. That's probably a good thing. So they're negotiated and recommended for approval to the council. And I mentioned an annual review requirement and you can see where that's found in the Vallejo municipal code. Um how do we negotiate development agreements? And so this is a really critical point. There will be um a number of community benefits no doubt that the city will hope to achieve in um drafting and negotiating a development agreement. And the private sector will similarly be looking to maximize the certainty of development, maximize the term and uh freeze as many rules as possible, potentially impact fees as possible. And so how do we balance those competing interests? And the way we do that is we really dive into and dig into the economics of the particular development project. And what we'll be insisting that the developer provide and and there's a process for doing this. will be insisting that the developers share their confidential proprietary financial models for their development which they will consider confidential information their secret sauce. They will not want their competitors to have that

information. So we will set up a process where they can deliver their confidential financial models to a financial consultant that the city will retain and that'll be working for the city. And and the reason we do that is we need to know in order to be informed negotiators, we need to know what the project can bear in terms of community benefits, park commitments, the timing of that, how much new infrastructure, when does it um get installed, um uh and and community amenities beyond the basic things like infrastructure and parks. potentially affordable housing, community centers, all the rest. So, our objective will be to find a really a sweet spot where the development still pencils out. It makes financial sense, the developer believes they can proceed, they can build the build the project and earn a market rate of return. It's important that the developer can achieve a market rate of return because if they can't, the project won't move forward. They won't be able to obtain financing, attract investors, and be able to develop. There we go. Okay. So, a brief overview. The public sector city goals to the maximum extent possible. We'll be looking to obtain enhanced or above nexus community benefits more than the city could compel through its you through its regular exercise of its police powers. We'll

want to ensure that infrastructure upgrades and community benefits are phased appropriately as the project's built. So, we're not going to save those till the end of the project because we want to ensure that if only a portion of the project gets built, it's a net positive for the community. It works. The development works for the community. Um, we'll be looking to build in some flexibility. If it's a long-term development, economics change, the market changes, we'll try to be as flexible as we can. Um some of the project approvals will seek to limit the term as appropriate. For instance, building permits won't last for 30 years or 25 years even if perhaps the development agreement does. On the private sector side, the developer in order to have a what I'll call a stable financial model so they have predictability. Um they can model their project. They know what it's going to cost. They'll be looking to the maximum possible extent to freeze rules of development, freeze zoning, freeze regulations, lock in fees to the best they can. Um that provides cost certainty. I mentioned it creates a stable proforma and they they will seek to limit the scenarios where the rules of development can change. I I would say big picture, the more um the more the developer makes commitments to provide enhanced community benefits, the more you can expect they will insist upon freezing the rules of development. So my mantra is if you're not offering much in the way of community benefits, don't expect the city to be freezing all the rules of development and all the impact fees

because typically in order to do that, the city expects something in return. So we'll be looking to balance these competing goals through the negotiation process. Um a little more detail on typical development uh developer benefits. They'll um I mentioned already the vesting or freezing of land use laws, but they'll also be looking, I would expect, for some priority and good faith commitments on processing future approvals, things like design review, subdivision maps, building and grading permits. Um there may be instances where they're doing oversized infrastructure, doing more than their fair share of infrastructure. They'll be looking for credits, appropriate credits against impact fees in that situation. Um, they may be seeking commitments to pro process and adopt or consider adoption of infrastructure public financing mechanisms. We've already talked about that a lot this evening. So, CFDs, EIFDs, I would expect the development agreement may very well address that. It won't absolutely commit the city to making any decisions about that, but it will likely lay out a process for the council to consider adoption of of one or more of those mechanisms at a later date. Um, typ typical public benefits, I mentioned them at a real high level. So, enhanced community benefits, what are those things? what what do we mean when we say uh above nexus or enhanced community benefits? Um what one component is I think through the specific plan in the development agreement we'll be looking for a varied

development that increases the city's tax basis um generates sales tax perhaps transient occupancy taxes so has a positive fiscal benefit on the larger community. um we can utilize the specific plan and development agreement to be a catalyst for economic development. Uh one of the things we might look at is limiting how much residential development for instance can take place before a certain amount of commercial development or retail development takes place. um examples of s some community amen amenities. Some are I think obvious parks uh potentially some affordable housing sites. Some that maybe are a little bit less obvious. Sometimes we'll build in requirements to deliver neighborhood serving retail so we're not creating a food desert on on Mayor Island. if it's important to the community to have some local grocery shopping, even though that might not be a um a land use that pencils out, we might require that it be developed and at least opened as part of the project. We can't guarantee it stays in business, but that might be something that's important to the community. Um, another thing we would typically look at is I apologize for the acronym here, but POPO community spaces. That popo stands for privatelyowned and maintained but publicly open. So, what that means is things like waterfront prominods, plazas, things that look and feel like public parks but don't impose an ongoing burden on the city to maintain them as public parks. So where appropriate, I think we would look to deliver that for the benefit of

the community. And then you can't mention Mar Island without talking about public infrastructure. So making sure that's appropriately phased as new development proceeds. Um public infrastructure financing mechanisms. We've already heard a lot about that this evening. I I don't I want to be careful not to overpromise on this, but personally, my hope for a new development agreement, a new specific plan for Mayor Island would be that there's some grand bargain here, and the developer is going to need a mechanism to pay for new infrastructure as it builds out Mar Island. And I think in an ideal world, we would be solving for that problem while at the same time solving for some of the problems that you've heard about earlier in the evening about burdens that existing homeowners have been bearing here for for 25 years. um why um I think it's important to mention why why public financing mechanisms are used for this type of project. And the reason they're used is because it provides a source of financing at a lower cost. So, a lower interest rate than having to go to private markets and borrow money to pay for backbone infrastructure, utilities and roadways and the like. And so, by lowering the cost of financing for that public infrastructure investment, that improves the economics of the project. That means the developer should be able to offer

more in the way of community amenities. So that can really be a win-win. It can benefit the developer, but but it can also benefit the community if done correctly. Um term len um the length of term of a development agreement. So that is certainly going to be heavily negotiated. I can say a general rule of thumb is that the term of the development agreement should match the anticipated buildout of the project. So, if you have a 25-year development project, you're not going to do a five-year development agreement. And and conversely, if it's a singlephase short-term development, I wouldn't recommend entering into a 25-year development agreement. I think what we'll seek to do here is to build in some carrots and sticks. So, incentives for the developer to move forward expeditiously with development. We can't really mandate private development because if there's not a market for it, it's just not going to proceed. But we can certainly provide additional vested rights to the developer if they achieve certain development milestones within a particular period of time. That would be creating some carrots for the developer to move forward expeditiously. There could conversely be some consequences for not moving forward with development. We might build in um term extensions that are only available if the developer makes certain community benefit contributions or builds out a certain amount of backbone infrastructure to solve some of those existing problems. And you know

that'll be um these will be heavily negotiated and they will be as I mentioned earlier largely pro-formadriven. So what can the development bear and still make and have it still make financial sense? Um I mentioned earlier I would expect the development agreement to lay out a process for um future approvals things like subdivision maps, building permits, grading permits, architectural review permits. So there will almost certainly be details on those points built into the specific plan. So it's a predictable roadmap of how you move forward with that development. Um the developer may seek commitments from the city to do priority processing since generally speaking time is money in development. And I think the city may be open to considering that. But of course, it needs to be paid for. So, we'll certainly be building in reimbursement requirements. If the developer expects the city to commit resources, bring on contract planners or hire staff to work on their project, we would expect them to foot the bill and uh to build in those reimbursement um provisions. Um I mentioned earlier that um sometimes the development agreement will limit the amount that fees can go up. Uh we usually break fees into separate categories. So they're things like processing fees because they're cost recovery. They just are what they are. We don't limit them. If we were to limit them, the city would be losing money processing permit applications. We don't want to put the city in that position.

Connection fees typically aren't limited because you need a water connection, you need a sore connection, it costs what it costs and it's really a pass through expense. The same goes for school fees. The city just collects them, but they the school district sets them and receives the fees. the one opportunity where there's uh some possibility of negotiating limits on new fees or on the amount that fees can go up would be in the area of impact fees. Um and that really depends on you know whether the city would be amendable to any limitations really depends on what the developers offering in terms of infrastructure commitments and other community benefits. Um, anytime we build in a dollar amount into a development agreement or a commitment for a community benefit because it's a long-term deal, 2026 are not worth, you know, 2046, right? Things cost more over time. So we will make a point of appropriately escalating any financial commitment that the developer will make to just keep up with those inflationary increases over time. Uh and the last point I would say we do not have to make commitments to limit impact fees or to lock impact fees for the entire term of the development agreement. So frequently we'll negotiate development agreements where impact fees are locked for a shorter period of time. That can create an incentive to move forward expeditiously to get the benefit of that um that lock period. Okay. So this is my second to last

slide. I I I hope I've come in under the the time uh time limit of 45 minutes, but I just want to talk a little bit about the timing. like where do we go from here? So, uh development agreements, it can be a lengthy negotiation process. We will want to create opportunities for check-ins with the council. You know, there's a lot on the table, a lot of things we can negotiate. We're going to want to ensure that we're on the right track, that the direction we're headed is a direction the council's inclined to support. So, I would expect the first step in the process will be for us to negotiate a detailed term sheet, all of the key business terms that will go into a development agreement. And we'll come back in some forum to check in with the council, make sure we're on the right track. If it seems like we are, and the council's supportive, then we'll proceed to the next step in the process, which is the heavy lifting of actually drafting the complete development agreement. Um, I would expect that development agreement to be presented to the council, considered for approval at a Super Tuesday type council meeting at which other major approvals are considered. And so the first one is a new SQA document, very likely an environmental impact report on Mar Island Company's new specific plan. So that would be the first item. uh can't approve a specific plan without without an appropriate SQA document. So, we'd have likely an environmental impact report, perhaps some cleanup amendments to the general plan because the general the specific plan needs to be consistent with the general plan and then of course the specific plan itself and perhaps also some zoning code amendments to

ensure consistency with the specific plan. And because there are other existing agreements between the city and Mar Island company as the successor to Lenar Island, um one of the big ones is the um acquisition agreement. I would expect likely, very likely as part of this process that agreement would be amended and restated to be consistent with the new development agreement that we're negotiating and drafting. And so there's a good chance u an an amended and restated acquisition agreement would be considered at the same council meeting. So so that's a little bit about where we go from here and that's the end of my presentation and I have a question slide so I will be pleased to answer any questions you might have.

Right. Thank you very much for that presentation. So again this is part of the item B full update on Mar Island development. Um, so we do have that staff presentation. I do before we move to that, I want to see if any council members have questions for our presenter. Uh, Vice Mayor Mulik. Thank you, Mayor. Um, thank you for the presentation. Um, I know when when I was part of the one, uh, development 101, um, I brought up the term of, uh, glossery of of helping to help understand, especially the general public, of some of the terminology that's involved here. So, you mentioned the term backbone infrastructure a couple of times. Can you clarify and define what that actually means?

Yes, absolutely. Um, and one of the things I tried to do, um, Vice Mayor is to eliminate a lot of the jargon, uh, for this version, but that's one I think that slipped through the cracks. So, when I say backbone infrastructure, another term that's often used is horizontal infrastructure. And so really what that means is all the things that you don't really see much of but you need in order for buildings to be developed on Mar Island. So that's new utilities, um storm drains, um major roadways. Um so some some of them you'll see you obviously you see new roadways but all of that work that uh extending water lines perhaps upgrades to um pen substations that you need to serve new development. So all of that utility and infrastructure um related improvements that that you need to develop uh private and publicly owned buildings. Thank you for that clarification. And if I did hear you correctly, you did say sewer and water involved included with that as part of the backbone infrastructure.

Yes. Okay, that's correct. Cuz because I see you um clearly identify that in article 302 of the DDA from that's dated May of 2022. Uh the Oh, the north um the North Mar Island disposition and development agreement.

Yes. um that agreement does shift substantial responsibility for maintaining those what I'll just call wet utilities within that area that was and I imagine that will be a topic of conversation and negotiation for a new development agreement. But one thing to just keep in mind that North Mar Island DDA, the city owned the property and was selling the property to Mayor Island Company. So I think in in anytime you're in a situation where you own property and are selling property, you have a little more leverage to impose requirements on the condition of sale. And so we sure we surely did that um for that North Mar Island property. appreciate that clarification. And and from our um item 9A, there was a lot of um concern that there was not development that was occurring over the um of what was previously understood of that was going to be a full buildout as far as the development on the island. And so, and you mentioned the word meeting milestones. So, can you help clarify in in the current DDA um some of those milestones that were um supposed to be supposed to be met in in the current 2001

2022? Oh, in the in the um well, I know the um the the North Mar Island disposition and development agreement does it talks about Connelly corridor. I don't know specifically what the the milestones are, but there were also there were some anticipated milestones for what's happening now, preparation of the specific plan. So, we did think about other parts of Mar Island beyond just North Mar Island and drafting that agreement. Okay. Thank you for uh thank you for that clarification and and once again, thank you for your presentation. Council member Gordon,

I want to say thank you so much for your um your 101. Very helpful, very resourced. Um and again, thank you for this presentation, but I just want to say thank you. Um you put a lot of heart and a lot of effort into making sure as a council we understood. Um and I just once again want to say thank you and thank you for being here. Welcome to Blair. Yeah, my pleasure. Thanks for having me.

All right. All right, I'm not seeing any other questions from council. So, thank you again. Um, and with that, we will move to the remainder of the presentation. I'll turn it back over to the acting city manager. Thank you, Mayor and Council. Uh, I believe we have on Zoom Hector Rojos, the uh, long range planning manager for the city of Vallejo. Hector,

uh, thank you, Gileian. Uh once again, uh Hector Roas, long-range planning manager for the city. Um good evening, mayor and members of city council. Uh we appreciate the opportunity to provide this update on several related Mayor Island planning and development efforts. Uh tonight's item includes updates on the existing and future development agreements, the new specific plan for Mayor Island, the beautifification plan, the Connelly corridor project, and the Coral Sea Village subdivision. Uh just as a note for council, this is anformational item only. So staff isn't asking uh the council to take formal action tonight. Next slide. So this presentation is uh organized around five topic areas. Um I'll start with the existing mayor island agreements and the city's work toward a new islandwide development agreement. I'll then walk through the status of the new specific plan. After that, Brian Jensen from H will discuss the specific plan, land use diagram, and how it has been revised in response to city comments. Trevor McKenzie from uh Stantech will then cover the environmental review process for the new specific plan. And then I'll close with the tentative schedule, updates on the beautifification plan, Connley corridor, Coral Sea, and next steps. Next slide. Uh so with that, let's get started uh with the mayor island agreements. Uh the redevelopment of Mayor Island is currently governed by two agreements. The first is the LAR mayor island development agreement or LARDA for short. That agreement applies to the Nimttz Group's Holdings on South Island generally south of G Street. The second is North Island Disposition and Development Agreement or NMID DDA. That agreement applies to the Nimmits group's holdings on North Mir Island,

generally north of G Street. Together, these agreements establish key development rights, infrastructure responsibilities, reimbursement obligations, approval processes, and project implementation requirements across Mayor Island. However, because these agreements were approved at different times and uh are for different parts of the island, they don't fully align with the islandwide planning framework now being developed through the new specific plan. For that reason, staff is negotiating a new development agreement uh that would apply to the Nimttz Group's holdings across Mir Island. The goal here is to align the legal, financial, infrastructure, and implementation terms for redevelopment uh with the new specific plan. As discussed in the prior presentation, development agreements are especially useful for long-term multi-phase projects because they can provide certainty for private investment while also establishing public benefits, infrastructure obligations, phasing requirements, and procedures for future approvals. Consolidating the existing agreements is timely uh because the city is now preparing a new specific plan for Mayor Island and the LARDA is approaching expiration. So rather than continuing to rely on separate agreements for different parts of the island, the goal is to create a more consistent islandwide agreement that can move forward with the new specific plan, environmental review process, infrastructure planning, and implementation strategy. At this stage, staff anticipates that city council consideration of the new development agreement would occur concurrently with consideration of the new specific plan. Next slide. So, let's transition over to the new specific plan for Mayor Island. Uh, the city concurrently or currently regulates development on Mayor Island through the existing Mayor Island specific plan, which was originally adopted in 1999 and later amended and

restated in 2005. Since then, the city has adopted a new general plan. Conditions on Mayor Island have changed, and the existing specific plan no longer fully reflects what is needed for the island's next phase of redevelopment. That includes updated direction for land use, infrastructure, mobility, climate resilience, and implementation. In addition, uh preparation of the new specific plan is tied to implementation obligations in the Northme Island disposition and development agreement. The new specific plan was submitted by Mayor Island Company in October of 2024 and was informed by city and mayor island company outreach conducted between 2020 and 2025. The new specific plan is intended to replace the existing specific plan and implement the city's uh general plan uh propelo 20 240. At a high level, the draft new specific plan builds on the existing reuse vision for Mayor Island while updating the framework for housing, mobility, open space, waterfront access, climate resilience, adaptive reuse, and infrastructure planning. The draft land use plan is intended to accommodate up to approximately 14,400 total dwelling units, up to 895 new dormatory units, and approximately 17,000 total jobs on Mayor Island. Next slide. So, city staff and outside agencies uh have completed their initial review of the draft new specific plan earlier this year. In February 2026, the city transmitted a consolidated comment letter to the Mayor Island Company, which represents the Nimits Group for redevelopment on the island. The comment letter covered several areas, including requested revisions, future study items, regulatory compliance, companion approvals, and topics that may need to be addressed through the new development agreement.

A key point from that review is that the draft specific plan was not accompanied by all the supporting components that are needed for a complete specific plan package under state law. In particular, the next draft will need to include the infrastructure and financing plans along with enough implementation detail for the city to continue reviewing a more complete package. Next slide. One of the most important efforts uh that's supporting the new specific plan preparation is the mayor island infrastructure assessment report or MIA report which was completed in October 2025 by the city and the Valo flood and wastewater district. The report evaluated the condition and capacity of major infrastructure systems on Mayor Island, including water, sewer, storm drainage, flood control, roads, dry utilities, and geotechnical conditions. The report identified significant islandwide infrastructure needs. In general, those needs included water system improvements, sewer capacity and treatment considerations, storm drainage and flood control improvements, and the need for coordinated corridor planning and inter agency implementation. The intent uh for this revised new specific plan uh is to incorporate and address the uh report findings particularly through the infrastructure planning and financing sections that will need to be completed. Next slide. So, at this point, I'd like to turn the presentation over to Brian Jensen from H, who will walk through how the draft land use plan has evolved in response to the city's review comments and the broader goals for Mayor Island. Brian, over to you.

Great. Thank you, Actor. Can you all hear me? Okay. All right. Good evening, mayor, council members. My name is Brian Yanchek. I'm a senior partner with the design firm HO and I have had the honor of working on this incredible project since 2020. The past six years with Mayor Island Company, many of you here, city staff, this incredible community, residents, business owners on the island. Um, this has been an incredibly important project to myself, our team, and our firm for these past six years. Next slide. So, the specific plan, and we won't go through all of this. Um, it's a very hefty document. I'm sure you've re reviewed it. I want to hit on some of the high highlights here tonight. So the specific plan is the instrument that ultimately you the city and the community uses to over time guide the development on the island for a generation to come. Typically specific plans will have a lifespan of 10 to 20 years. They can undergo revision but this is a document that will ultimately shape the future on Mar Island and as part of that whole of Vallejo. Its bedrock is the planning principles that are in the document that the council sees on the screen. The outcomes through over 20 community workshops, many meetings with all of you were as follows. We want this specific plan to deliver a healthy island that is equitable in the form of jobs, housing, and many other ways that invites a diversity of residents, businesses, visitors. It is an island. It is surrounded by water. Our future needs to be resilient. Extensive work went into sea level rise and various forms of resilience you see throughout the document. Heavily connected. One of the challenges of an island is it's an island. And so we need to look at all opportunities for connection, including ferry upgrades and water connections, and that it is convenient for everyone who lives and works on the island, as well as visitors who come and visit the island. If we do all of those things right, we achieve something that is incredibly rare, incredibly precious, is a complete community. For those of you back in 2020, 2021, those early work sessions in the coal sheds, you may

recall residents and workers talking about we cannot find a cup of coffee anywhere on the island. We can't get basic staples for our family. We have to drive everywhere, take buses everywhere to get everything that we need. With a complete community, those critical resources for our families and businesses are within reach. So that last item in convenience really matters. The next slide. So complete community. You'll see in the document, it does a good job of unpacking what that really means in terms of providing economic diversity through jobs growth. Hector covered a lot of that. There's a lot of jobs protect production potential um on the island. We've got an extensive working waterfront. We have incredible facilities unmatched anywhere else in the Bay Area. We can attract and capture jobs and industries that our competing cities simply can't in our in our competitive market shed. Mixeduse districts that are mixed use. We know what homogeneous districts mean, right? Everyone goes home or goes to work at the same time. When we mix uses, they stay vibrant day and night throughout the week, weekends. That's what creates a complete community. We want it to be a healthy and equitable place. We want to see activity. We want to see our residents and workers enjoying the streets, out on the trails, in the parks. We want all these things. We want activity. We want to run into our neighbors. We want to make friends. Great streets. We've got a lot of work to do here on Mar Island. A lot of work's already been done. There's much more that feel pedestrian friendly, safe for bicycles, they're transit oriented, they're healthy, they're accessible. We want Mary Island to be a multigenerational place where everyone is welcome, and that lifelong learning attracts people to spend their entire lives here, ultimately retire here. And at the end of the day, we need more civic uses, public spaces. Um, the prior presenter talked a lot about POPOS and other ways in which we can create privately owned public open spaces as well as true public open spaces and parks on the island. We do all of these things together. These ingredients ultimately allow us to achieve a complete community. On the next slide,

don't worry, this won't go on and on, just a few more. Open space. So, the prior presenter began to talk about community benefits, and I'm excited to see us talking about that in the development agreement. One of the big benefits of the development of Mar Island is the preservation um and regeneration of its open spaces and the addition of new open spaces. When we asked residents early on, six years ago, what do you love about Mar Island in Vallejo, why do you go there? Why did you choose to live there? The answer time and time again was the amazing parks. I think we've all gone to the chapel. We've stood under the eucalyptus trees. We've walked walnut. Um we've seen how important nature is, the preserve, and much more. The specific plan not only meets the general plan requirements for your open space to population ratios which govern that every single child lives within a certain distance of a park. Every family has a certain amount of open space per household and it actually goes far beyond that. Some of the stats you can see here on the slide. Your specific plan is a very very green specific plan. Open space first. The next slide. So we've often talked about Mar Island is a district in Vallejo, right? It's part of our entire city. But even zooming into Mary Island itself, it's actually comprised of amazing neighborhoods. As you walk from the right to the left, from the north to the south, I think we've all experienced what it's like to come off of the highway, move into the gateway, see the causeway, go out to the trails that take you out into the wetlands for miles on end to the on the west side of the island. You continue south. I think we've all been to the historic core. We've all sat at the coal sheds. We've all gone to the brewery, the distillery. We know how incredibly rich the history is there at the historic core. Really feels like a unique place. It's our Canary Row. I think that could compete with anywhere in the world. Of course, our amazing existing residents in the flagship neighborhood as well as Farragut. We continue south the yard. We've got a nearly a mile working waterfront. We've got businesses out there that can do maritime activities

that frankly you can't find anywhere else in the Bay Area. This is our competitive advantage, right? We have a working waterfront. We want to leverage that. Toro University of course doing their great work. And as we continue to the south, we step down in density, kind of light on the land, focus more on open space and Bunker Hills and of course the point. It is a place of places. Mir Island is just is not one thing, but it is many, many places for many, many different people, families, visitors, and so forth. The specific plan unpacks then the land use goals, uses, and densities within each one of those neighborhoods. on the next slide. So, this was the initial draft plan um that we submitted about a year year and a half ago. And I know it's difficult to read, but what you see on the screen is a land plan that lays out color-coded uses and their associated densities across the approximately 1,00 acres that is developable. The entire specific plan is closer to three. So, there's only about onethird of what we call the specific plan area that is developable in traditional sense. Those color codes um represent different amounts of residential typically like ochre, yellow, orange, those colors towards the top. We get into job producing uses which are purple, gray, blue, as well as parks and open spaces which are thankfully easily to read as green. All right, so on the next slide, what has changed? I'm going to just kind of go through a couple of the highlights of the revised plan because I know at this scale it's probably difficult for the community and the council to be able to uh decipher, you know, in the PowerPoint. So approximately 70 pages of um city comments from city staff and their consultants were received um earlier this year and um as Hector shared we've been busy at work Mary Island company and many many many technical consultants going through those comments addressing them and reflecting on them in the land plan. I'm just going to hit on some of the high notes. So one of the key things was the land plan needed to provide greater

clarity on land use and zoning. We've added new parcels around adaptive reuse structures around the historic core making it much clearer what can be and cannot be developed around these incredible historic assets. Public trust land overlays so we understand the various agencies involved as well as some land use categories um that um we needed to add. Minimum densities have been provided in certain areas around the MTC district near the ferry building to encourage um walkable u mixeduse development and much more. The plan now includes a greater codification or quantification of open space. So before when I mentioned parks to um residential um ratios, there are now tables that break that down for the different park types um based on the various um requirements. Again, I'll underscore that what you see on the screen um this open space far exceeds the general plan requirement and that's even without counting the massive wetlands that you see on the west side of the island. This is going to be a very very green district. Um third and maybe finally, the revised plan really improves upon mobility and access. Um this has been in close coordination with the city with Hector, the consultants and his team. We've revised the shuttle service loops, bike and pedestrian networks have been enhanced. Safe truck routes have been revised. All of these changes in total, they produce a a plan that has far greater equity, reduce car dependence, it helps manage traffic, it helps us just um avoid unnecessary roadway expansions that just eat up your island. Um, and all of those items will also be further explored in the infrastructure plan that will follow that Hector referred to. You know, at the end of the day, I think the the key talking points I think for all of us here is this is a plan in front of you that meets regional density and transit standards. It exceeds your parklands requirements. That's something we should be very proud of and continue to encourage. It improves equity, safety on the island, multimodal access. These are topics that are very important to our community. We've heard time and time again in our workshops. It also acknowledges the real

infrastructure constraints. As we just heard from the prior speaker, it takes a lot to ultimately make these projects feasible. And I'm sure we'll talk much more about that in future sessions. We want to preserve and protect and enhance our historic assets. That's what distinguishes our Mar Island here in Vallejo from other districts around the Bay Area and beyond. And ultimately, it sets us all up for successful phasing and financing to follow. On the next slide, the roll up here, and I always like to provide headlines. Um, this is a slide that the council and mayor has seen before. This ultimately tabulates so that the community and staff can quickly see where we're landing on total residential, as Hector just described, um, both new as well as the existing commercial, our jobs producing uses. This has been near and dear to city staff from the very beginning of the process. We've heard time and time again, we want jobs. This was a place that produced jobs for our city, for our region. It will continue to be so. And so, we're very excited about the permanent jobs on the island. I'm sure it's not lost in the council that over time as you achieve this plan, you will create many, many more construction jobs than what you see on the screen as you work through the phases. Below are the just a highle snapshot of the various open space community benefits that are already baked into the plan. this is already um in your plan before you even begin to think about development agreements. That was a lot. I tried to get through it quickly. That's a high level snapshot of the good work that city staff, their consultants, and of course, Mayor Island Company and we've all been up to. I think following me is Trevor.

Thank you, Brian. And uh before Trevor does come up, I just want to say from a staff perspective uh that we're really excited about the uh revised specific plan. Um, now we're moving into a phase where it's more of a refinement and now understanding beginning to understand what the impacts of the buildout of this uh revised land use plan is going to be. Uh, so with that, I'd like to turn it over to uh Trevor McKenzie from Stantech uh to provide an overview of the upcoming environmental review process that's going to take a look into those impacts. Trevor,

good evening, Mayor and Council. Good to see most of you again. Um, this evening I'm going to try to run through this relatively quickly because I know it's going to be late at the hour, but if we just go next slide. For those that aren't familiar, SQA is the California Environmental Quality Act. It is a state disclosure law which requires every discretionary body to tell the public what's going on. And so through this, there's basically four primary purposes which a secret document is trying to achieve. One is to inform decision makers. That's you. To make sure that you understand the repercussion of your decisions so that when you say yes or no or you certify the environmental review that all the complexities of all the agreements and the impacts and the timelines is understood and that you're making an informed decision. The second is uh your citizens to engage the process to make sure that your citizens understand the implications which will take place and what is going to happen when and provide clarity to them about what potential impacts will be. Uh lastly to disclose there's a lot of information that goes into these environmental impact reports. If you uh I tell my kids I write book reports for a living. That's pretty much what it is. You take a lot of technical information try to distill it down to a level in which the community can understand it. And the idea through that is disclosure. We're not trying to hide anything. We're trying to make sure that everybody understands what the impacts actually are. Uh the last is to avoid and reduce. So through our process, we want to identify potential impacts and the statute actually requires us to try to avoid them through mitigation or alternative formation development. And we come up with alternatives and working with the city staff and the team to make sure that uh we can try to reduce impacts to the greatest extent feasible. Next slide. So why are we doing SQA again? Haven't we already done this? The answer is yes, you have. But a lot has changed since the first ERIS was actually approved just at a high level. I think there's been five resource new resource considerations that have been added since the first time the city made this decision. Um but really it's the discretionary planning action which will

trigger the preparation of this environmental impact report. As the attorney said earlier, we are doing a program EIR. Uh the idea around that is to provide the greatest level of coverage and flexibility for the city as it moves forward in this new venture. Uh but most uh planning level documents like a specific plan uh will require this program EIR. And so what that does is it gives you a high level of the land use decisions and the impacts that could result but there are some very specific resource considerations that we have to get very technical in and that will all be presented to you in that EIR. Next slide. Just like the planning process and the community engagement, the environmental review record uh isn't without a long history on the island. Um since 1998, there was actually a joint EIS EIR that was prepared in partnership with the Navy as uh a part of the base reuse action. Uh so as part of that, because there was a federal agency that was involved, it requires the NEPA document. Um your purview is related to the SQA document, which is your state statute, but they are very closely aligned. As part of this process, we will we are already working with the Navy on uh making sure that they feel confident in the changes to the plan and what and providing them the level of documentation necessary for them to make a a NEPA determination related to revalidation. Um with that being said, you know, the original plan was adopted in 1999. Since then, there was a series of modifications. I won't go too much into that record. Uh but there was a subsequent EIR that was prepared to clarify certain things related to um historic features with the island as well as clean up some of the other language. And then basically since 2007 to where we are now, there was certain modifications that were prepared that had like addendums and or supplemental environmental documentation prepared for it to try to facilitate activity because not everything was envisioned in 1998 to try to get to where you are now to try to make things happen. So, but where we are here today is we are preparing a

programmatic environmental impact report for the new specific plan and we are in the process of federal coordination. Next slide.

All right. And uh back to me. Thank you Trevor. Uh so next we're going to uh walk through the tentative schedule for the new specific plan. Uh so the schedule that's shown here on screen uh provides a general sequence for the major uh new specific plan work streams. Uh these milestones remain tentative and may change based on technical studies uh inter agency coordin coordination applicant submittals and future revisions in summer and fall of 2026. The major milestones include the federal NEPA determination, release of the SQA notice of preparation, continued work on the infrastructure plan and financing plan, and preparation of a revised specific plan package. In winter 2026 and spring 2027, staff anticipates release of the uh public draft EIR for a 45day public review and comment period along with preparation of the final draft specific plan. in summer through fall of winter 2027. Staff anticipates completion of the final EIR and mitigation monitoring and reporting program followed by consideration of the final specific plan, the final EIR and the new development agreement. Again, I do want to mention that this uh schedule is tentative uh but it does reflect uh major steps that are needed uh before the new specific plan could be considered by the city council. Next slide. So with that uh let's move on to updates on several implementation projects related to Mirror Island. First up is the beautifification plan. So the beautifification plan is a phase public right ofway and landscape improvement project associated with North Mar Island. Uh the intent is to improve the visual character of major gateways and circulation corridors particular near particularly near Railroad Avenue corridor G Street, the Mayor Island

Causeway and the Highway 37th Gateway. Phase one includes installation of trees, landscaping, sidewalk improvements, entry signage, and art at key entries to Mayor Island. Phase two includes additional landscaping, seated meadow areas, and bike and pedestrian improvements between railroad avenue and Nimttz Avenue. The renderings that are shown here on the slide uh show the intended character of the highway 37 and causeway arrival areas. Next slide. Uh so the beautifification plan um was initially submitted to the city in June 2023. Detailed design drawings were submitted in April of 2024 and a revised plan was submitted in May 2025. The application was deemed complete in June 2025. The timing for uh implementation uh has been affected by two main issues. First, a portion of phase 1 is affected by the building 571 cleanup area. Uh, city council did approve cleanup of building 571 in February 2026, and that cleanup is projected to occur within approximately 6 months following the regulatory approval of the project work plan. As a result, phase 1 is expected to proceed after the building 571 cleanup currently anticipated for winter of this year. Second, a substantial portion of phase 2 depends on the transfer of Navy owned property and the timing of that transfer remains uncertain. Uh as a result, phase two uh we are expecting uh to be processed uh will continue after the Navy land transfer is uh complete. Next slide. And so next up we have uh Connelly corridor. Uh the corridor project is an approximately 30 acre early activation area centered along Connelly Street. Uh the project is intended to activate a key waterfront corridor on Mayor Island

through a mix of adaptive reuse, new development, and public open space improvements. Uh at full buildout, the project would include about uh or up to 45,000 ft² of retail space, approximately 28,000 ft of office space, up to 373 residential units, a 200 room hotel, and approximately 194,000 square ft of open space. The project would be built in phases with phase one focused on res restoration of the coal sheds and the waterford prominade. Next slide. So this slide shows a rendering of the phase one concept. Uh the concept focuses on activating the waterfront and reusing the historic coal sheds while also creating public open space and a more active pedestrian environment. Phase one is intended to demonstrate the type of public realm adaptive reuse and waterfront activation improvements that are envisioned for the broader Connelly corridor area. Next slide. So, uh, for status, the phase 1 design review pre-application was submitted in September of 2024, and the city and Valo flood and wastewater district provided comments in December of 2024. Those comments raised several infrastructure uh, related issues, including ownership of sewer and storm water infrastructure and sewer capacity for later phases. Uh, the district has advised that phase one itself uh, doesn't create capacity concerns. Um, but a broader planning and infrastructure framework for the full Connelly corridor area will continue to be required. Due to uh unresolved islandwide infrastructure issues and current market conditions, Mayor Island Company has paused uh advancement of the project while discussions continue with the city. In parallel, the city council has directed the city attorney to identify a

mediator to facilitate a mediation process between the city and the VFWD. The purpose of that process is to help resolve uh outstanding infrastructure related issues affecting Colony Street and Mayor Island more broadly. Next slide. So, finally, I'll turn to uh a brief update on the Coral Sea Village uh subdivision. Uh Cor is a existing residential subdivision on South Mirror Island uh located west of Flagship Drive near Eleanor Circle. The project was originally entitled by Lenar in 2004. This previously approved subdivision includes 68 detached single family units, 28 multifamily units, and related landscaping. The final subdivision map uh for this project was recorded in 2017 and the building pads and public improvements were installed by the end of 2018. After Lenar's holdings transition to the Nimmits group, construction of the residential units did not move forward. Next slide. So for status uh in August uh 2025 a development and landscape review application was submitted to the city for minor modifications to the previously approved residential architecture and landscaping. Uh that current entitle entitlement request is limited to the residential architecture and landscaping because the subdivision improvements and backbone infrastructure for the subdivision are already in place. All city departments and outside agencies have reviewed the proposal and the project is currently being conditioned for approval. The city did hold a public meeting recently on April 22nd to provide project information and accept public comments. Follow-up items include posting the meeting recording on our website, posting a project fact sheet, accepting additional comments during tonight's meeting, and providing additional

noticing using a wider radius prior to acting on the project. Uh for this project, the planning and development services director action is anticipated for the week of May 11th. Next slide. So before wrapping up, uh let's go over uh the next steps for these projects. The major next steps are to continue refining the new specific plan, advance environmental review and infrastructure planning, and move forward with early implementation items were feasible. For the new specific plan, that means working toward a revised draft package that includes the missing infrastructure and financing plan components. For the environmental review, that means continuing coordination on the NEPA determination and initiating the SQA scoping process when appropriate. For the early implementation items that I just went over, staff will continue processing the beautifification plan, Connley corridor project, and Coral Sea Village subdivision while recognizing that each of these have its uh have their own infrastructure, market, land transfer or processing consideration. Staff will also continue negotiating the new development agreement and will return to city council at future milestones as the new specific plan, environmental review, development agreement, and related approvals move forward. Uh last thing I'll say is that uh public engagement uh will also continue through future planning commission and city council hearings. Uh the draft EIR comment period and additional outreach as new specific plan and new development agreement uh move forward. Uh with that, I'd like to conclude our presentation. Um before we close, I want to thank the council of course uh for your patience and attention to this uh this evening. Uh we know it's been a long meeting and we appreciate the time to walk through these important Mar Island updates. Um again, for this item, it's information only and no formal action is required. Uh we are prepared to answer any of your questions. Thank you.

All right. Thank you very much, Hector, and and everybody who joined in the presentation. Before we move to council questions and comments, let's go ahead and take public comment on this item.

Thank you, mayor. We've got uh four individuals signed up in this um order. An Carr, Kent Forner, Sherannne Grim, and Daniel Boone. Uh good evening council and uh whoever else is still hanging around at home and car. So, um, I just want to say with this update that we're hearing about Mir Island and particularly with respect to the Connelly corridor, I want to encourage the city and staff and the development team to do see if they can't find some lowhanging fruit to accomplish earlier rather than later. What I see the city doing is we're not going to do anything until we can do everything. And so some of the things that I think could be happening aren't happening. So for example, um on the Connelly corridor, apparently for phase one of the development, we actually do have adequate sewer and water. It's for the subsequent part of the development that there's an issue. So let's get started with something on the beautifification process project. um the beautifification, the the trees coming into Mir Island from the causeway and even some of the trees or whatever is going to be in the beautifification on the north part of Mir Island. Can't some of that happen before we have the transfer from Mir Island or from the Navy and before 571 is cleaned up? um we need to get going and to take a step

back on this whole process as a native Valleoan. You know, my time clock on this whole thing goes back to when the base closed. So, 1996. So, here we are 30 years later. The progress towards reuse and uh redevelopment of jobs in particular has been anemic. And this is not to damn anybody, but we need to get something going and we shouldn't have to wait to get everything going. And um there are a number of lowhanging fruit projects I can think of that might not necessarily have high dollar value, but would show activity and progress. and we really need to orient towards them because we've been waiting and waiting and waiting and waiting and waiting and it that it's just not okay. And there are so many resources on the island that could be harnessed and could be utilized. And so I would like to see more of that. I mean, obviously we would love giant employers to land, you know, a spaceship on us and spit out all kinds of jobs. I don't know that that's going to happen. Maybe we need to focus on some of the things that are already here. Um I don't know whatever happened with the discussions with earthquake protection systems way back when. They kept asking to uh build a mirror island have more land. Talk to them um with between the officers quarters and St. Peter's chapel. I see wedding destination. You know there there it's not a big dollar volume but it could bring activity. Thank you. you. Thank you.

The next speaker is Kent Forner.

Hi guys. Kent Forner, general Mar Island fanboy. I just want to state for the record, I don't know how you guys do this, but thank you for being willing to do it on this regular basis. Uh I have a very I have a couple narrow questions uh for you all. Uh but first, just a little bit of context. Um, I'm a believer in a lot of things you guys said in the denominator aspect, which is that development is how we're going to get past all these thorny issues with the CFD and everything else. On the flip side, I find the specific plan a little bit too longer term and fanciful. I'm glad you're doing all that work, but it's really hard for me to look at it that way. I'm extremely disappointed to hear that Connelly Street corridor is currently at its pause and not moving forward um due to market conditions. And with all due respect to my friends at Maryland Company and I do a lot of work with them, I stood up here and spoke in favor of the deal on North Mar Island specifically because it called for the finish of Connelly Street corridor by 2027. That was the reason I stood up here and spoke on behalf of it. It seems like it's just been cast aside to me. And the other piece is I keep hearing about Valo sand and flood uh flood and wastewater district and how our leaky ancient system is standing in the way which we've all known for a long time but you know I keep hearing about this over and over but what I don't understand is if I understand it right you seven are running the city you're also running flood and wastewater and I don't understand why if there's an argument between these two organizations the seven of you plus the one at flood and wastewater can't get together and make a decision vision on this as to what it is so that we can remove that aspect from what's standing in the way of immediate development. So that's my question for you tonight if you can answer it. Thank you.

Thank you.

Next is Sherannne Grim. Good evening again. Um earlier tonight we talked about a number of things and we talked and we just heard a number of things um in this second part of the presentation. Um, and they all involve residents on Mar Island and they all involve CFDs most likely of some kind, not necessarily what we have, but some kind of um funding mechanisms. And in this staff report, it talks about how they'll continue to do uh the city will continue to do some public outreach and public meetings. And as a resident of Maryland, I just want to tell you how disappointing that's been. And I know I speak for most of the residents because we go to town halls where the entire city shows up and has a lot to say about the development on Mayor Island. It's very controlled. You ask a question. If if they don't want to answer it, they go to the next person. It's not a dialogue and it's certainly not community engagement. Community uh I just jotted this down for me is transparent, inclusive, and collaborative. And it's not top down. It's a collaborative process. Public meetings that include whole city conversations and are tightly controlled is just performative. It's not real engagement. So I guess I would say to you is um as we're talking as we talked about everything tonight, what we just got confirmed, which was beneficial actually from Miss Goodwin, is how screwed up that CFD is. really screwed

up. Not not just us saying it is, but she confirmed what we have found in our research, which is no one in the state of California seems to have a se deal like us. And now we just realize that it's going to hurt us again in not being able to do the escalator. If people had been sitting at the table in the beginning, which is not typical of formation of CFDs, they would have been able to speak to that. However, people weren't sitting at the table and no steward was looking out for us because some cities do look out for their constituents and do realize that things that are unfair would not happen. So, you didn't make a motion tonight to support a subcommittee, but I'm here again at the podium asking you to because we want real community engagement focused on things that impact the people that live on Mayor Island. and I, you know, I love the rest of the city and there are appropriate meetings for that kind of thing. That is not the kind of meeting we're talking about. We're talking about give and take, working together, collaboratively, solution, problem solving, and not just focused on CFDs, but all kinds of things that come up when you're living in a development where things are happening. And the most recent example is Coral Sea. We're not being treated like this is a new development. and it they want to break ground and start this summer and none of the residents have been talked about in terms of mitigating construction issues like the the Vista Cove people were allowed to do. So, you know, we need the same courtesy because it is going to impact our community.

Thank you.

Our final speaker is Daniel Boone. Sometimes it feels like a curse to know as much as I know and to have seen as much as I've seen. You heard a lot of performative happy talk in for the last hour or so. You can negotiate all the development agreements you want. The city hasn't enforced the development agreements that you've already got. We've documented for you over and over again missing $9 million that the city never bothered to collect from LAR and Mar Island Company. How come? Who's supposed to be enforcing the agreement? Lar committed to build backbone infrastructure. Mar Island Company assumed all of those obligations when they bought the property, but they're not that's not being enforced against uh Nimtt's Mar Island Company. We heard things have changed, so we have to have a new islandwide development agreement. Yeah, things have changed, but no new CFDs. We heard things have changed, so we got

to have a new SQUA, but no new CFDs. Connelly corridor was supposed to be done in 2027. Another contract. Your rights, all of our rights not enforced. How come? I'm going to answer Kent Forner's question because I was at the Valo Flood and Wastewater District the other night. You know why the mediation is not advancing? Because the city is blocking the choice of a mediator. How come? Public engagement. A meeting was held last week to discuss Coral Sea. No notice to residents. No notice to our representative, Council Member Palmirez, no notice to the mayor, no notice to any of you. All the happy talk about public engagement not happening. How come? Thank you.

All right. Do we have any commenters online? Uh through the mayor. No speakers online at this time. All right. With that, we will close public comment and we will do what we did on the last item and I'll ask my colleagues to do one round and and share our any questions and comments we have.

Uh go ahead, Council Member Paul Morris. Thank you, mayor. Um, plenty of speakers. Um, let me start from the beginning. Uh, this is really for Mr. Rohos. Um, with, uh, respect to the specific plan and what kind of housing um, we're looking at. So, the city of Valo is uh, uh, working with the the Roosevelt group in terms of trying to get uh, ship building and ship repair on Mayor Island. And one of the recommendations uh per that strategic plan is uh a call for housing uh housing specifically for sailors uh during ship repair periods. So given that that's uh the recommendation and I know they're going to speak uh next week, but has that been incorporated in terms of our numbers as far as like what kind of housing and how many housing units are going to be on Mir Island?

Uh thank you uh council member uh Paul Mars. Uh that's that's a great question. Um we have a full gamut or spectrum of different housing types that we're looking um at under the uh land use plan that Brian shared earlier. Um we're shooting for, you know, a wide variety of densities all the way from single family detached to attach product to high-rise mid-rise uh residential buildings with mixed uh use. So, we anticipate that there's going to be a variety of housing that uh that appeals to a variety of people from all walks of life. Um, I don't think that the current specific plan um addresses uh ship builder or sailor um housing, but that's definitely something that I will notate and uh include in the conversation moving forward.

Yeah, please do. And I could also forward you that uh strategic plan as well. And just just so you're aware of it, one of the considerations is that you know on a ship there's sailors of all ranks, but there's also the lowlisted sailors um and they get paid uh you know for housing uh based off their basic allowance for housing. So if they're single junior listed, they're not going to get paid a lot. So, thus they won't be able to pay for, you know, the most like expensive housing out there or maybe not even approaching the median um uh uh um uh rent out there. So, just putting that on your radar that you know, we're trying to make it as welcome as possible for the sailors that of all ranks on that ship. Um I think this still is a question for you. Um, do we have a an understanding or number of the vacant uh living in industrial shells like the cold or warm shells uh that are available on Mar Island currently? Um, I actually don't have that information, but I believe if uh Mir Island Company is in the house, I think uh they may be able to give you a general idea since they uh have a lot of the um ground leases uh and have uh you know the ability to speak to that. So I'll defer that question to them if if you don't mind.

Okay. Ballpark number anyone.

Okay. Sure. Appreciate it. And you know, we've had had multiple conversations about what kind of uh industrial use can be on those warehouses and I'm very interested in certain types of manufacturing and so want to know like what what exactly is available uh right now and just you know what are we going to do to um advertise that to to the open market. Um lots of discussion about Conley corridor project. Um, I think there is room for uh things that we could do now like lowhanging fruit to not just plate the residents of Valo, but honestly like if we could do some things like something with the prominade or anything with the open space uh open spaces out there and improve those open spaces, you know, we're doing a lot to encourage uh economic development, support existing businesses, uh encourage residents to gather more on Mir Island, which in uh also uh induces more revenue for the city. So, I think that is something we can and should be looking into. Um I I get that, you know, we're we're kind of stalled because of uh infrastructure challenges, but this still is room for uh other kinds of activation. And I'm going to put it out there right now. Look up proxy sf.net. That is a twob block temporary activation in San Francisco. started in 2011. Repurposed shipping containers, food, art, uh, and retail vendors. That was in 2011. It was supposed to be temporary. It is still there because people love it, right? It doesn't take a whole lot to get something going on there. And the things that Mr. Forner was talking about, we could do that fairly quickly. And we're not asking for all the bells and whistles right now in terms of infrastructure, but these things can go a long way for our existing businesses. So, I I would, you know, I already talked to you uh uh Miss Han about that, but you know, we really

got to get that going. Thank you, Council Member or Vice Mayor Mulik. Thank you, Mayor. And this question is for I think Brian, Mayor Island Company, and probably Hector. Um the Could Manny could you bring up the um phasing plans of the development um that were presented? Keep No. Um before that, keep going. Keep going. Keep going.

There. So, I see this phasing plan being broken out the way it is. Um I I'm assuming this is not set in stone as far as how you're planning to phase this out because I think the idea that we're that um to speak to the Mar Island residents is is we need to get the development commercial and and a lot of the stuff built first and I see that we're starting towards the north end there to where it doesn't look like we're focusing on some of the commercial and and um light industrial that we could probably potentially activate. So I'm my question is are we are are you open to um renumbering the phasing of of which areas moving first to focus on development versus the versus some of the what I consider the fufu stuff that can be done later. Ryan, do you want to address that or

Yeah, it's coming up. Okay, great.

Thanks, Hector. Thank you, Vice Mayor. Um, okay. To the to the point on phasing. So, Gateway, which is shown there, um, where causeway comes across it right now offers us the most advantageous infrastructure, flat buildable lots, some existing streets, um, some streetscapes along Walnut. It's got enough infrastructure intact when you look at the surface um that it makes it quite quite ripe if you will for development early on. It includes job producing uses. There's mixed use in there as well as retail. And so you've got a nice mix of uses in there, Vice Mayor, to help get the island um economy going. Um some of the other areas like you see to the north um they will take um much longer in order to make the land and the the horizontal infrastructure as the previous presenter described um ready for development. And so we've sequenced phasing with the availability of infrastructure and frankly where we think development will be most successful. The historic core just is such an attractor. It's becoming a landmark around our entire Bay Area. So any development close to it will also likely be prosperous in the early stages. The further we go away from that established nucleus, the less likely we are to be successful. That was some of the logic that went into the phasing.

No, I appreciate that clarification. And this is where I just from a um public standpoint and from a development standpoint is looking at um six and seven as as potentially the more concentrated areas of where you may be able to get more bang for your buck right off the right off the bat versus some of the other outlying years. And I'm just I'm just throwing that out as a as a um potential um relook at at how you're looking to phase this and and things of that nature. Um, I guess the other question I had was um and and this speaks to some of the conversations that are happening at the federal level of with Ganny talking about some of the ship building because that's where I um areas six and seven would be more focused on that area. And so this is where I'm hoping to combine some of that forward thinking and and of things that are currently in the works of looking at re-evaluating which of the areas you hit first versus some of the other stuff.

So and and and then from um and when Hector mentioned the high density uh um areas um because because all of the plans that I've seen over the past three four years have all been single family homes. So I I'm I'm interested. Uh I mean those are the ones that I've saw and and just from renderings and stuff like that. So if there were some high density I haven't seen a a full buildout of some of the the um mixeduse highdensity areas that appear to be implied there. So looking forward to what the specific plan the future specific plans that are going to be upcoming what that's going to look like because I think that would entice a lot of um much of the public to see the the the visionary view of what we're looking for right there. So looking forward to those future plans. Um and and once again I I think the push for the um for enhancing the dry docks and a lot of the waterfront stuff and and from the potential stuff that uh we're working with Gary Manny and stuff like that. I think that's something that I if we can I would encourage that to be one of the more um primary focuses of of looking to to um kickstart a lot of the commercial and and um opportunities to where it's going to it's in my mind that's going to look to um workforce housing and things of that nature that can that can that'll piggy back on a lot of that stuff. So just just throwing that out there. Thank you.

Thanks. All right, Council Member Matias and then Council Member Gordon. Thank you, mayor. Um, can I have a representative from the Mayor Island Company come to the podium, please?

Um, anyone that can speak to the agreements that have been signed or can represent on behalf of the company? Thank you.

Hi, Council Member uh Keith Garner. I'm outside council for the Mayor Island Company with the firm called Shephard Mullen in San Francisco. I'll do my best to answer your questions. Thank you. Um let's start with the um one of the elephants in the room. What's your understanding or your your client's position on responsibility visav the infrastructure um whether you're talking about the north or the south uh what is your client's position on who shares responsibility?

Well um I think it's broken down into a couple of stages. One is the installation of new infrastructure and the installation of new infrastructure is addressed in the existing specific plan and the existing development agreement. That is a responsibility that the mayor island company has uh through its assumption of the existing development agreement. Um but that is not something that's something that is envisioned to take place as the island is developed. So as development occurs the infrastructure will will go in it will actually precede it so that the development can be built.

Okay. So um just to follow up there, the staff presentation referred to the Connelly corridor and um from staff's angle were the reasons cited were market conditions and then I guess some infighting between two city agencies. So I'm this is just me. I'm just making that statement. So what is your um position relative to the representation made by staff right because from your vantage point you're moving forward with Connelly corridor you should be responsible for the infrastructure so is there something am I misrepresenting just based on the statement you've made uh what should be happening with Connley corridor or is there some piece of information I'm missing? Uh so with respect to the infrastructure for Connelly there again there are some concerns that we have that ownership has over ownership of mayor the mayor island property but ownership o over the infrastructure that's in place and I believe that's the issue that is being sorted out between the uh the city and VFWD. Uh there's some implications associated with that on the maintenance uh the ongoing maintenance of the existing infrastructure. Um we've all recognized that there are problems with the infrastructure. It's old. It was not in the best of shape when it was turned over from the Navy. Uh and it can't be replaced all at once. So we're in a situation where the infrastructure has to be uh replaced. Uh but it has to be done in a thoughtful manner so that it one continues to provide services for

the the tenants the residents that are out there right now. Um but it's appropriately sized in a way that supports development going forward. I know that's a long answer. Um but it it is it's a tricky task and that's something that we are currently working on. There's been a lot of discussion about the infrastructure assessment that's been prepared and the infrastructure plan that the Mar Island team is working on uh very diligently and we anticipate having a pretty complete draft later this year. Um so I don't know uh council member if that answered all of your questions with respect to infrastructure for Connelly. Um it's hard to um just address Connelly in isolation um because all of the I mean this is the attorney speaking. I'm not a an engineer but all the pipes are connected out there and so just fixing it for Connelly doesn't really fix the problems and in fact it can end up as I understand it can end up creating other uh other issues that have to be addressed.

Understood. um still important to sort of hear your perspective on that. And then the last question I have for you has to do with the beautifification plan. So in the current agreement um you guys made some uh representations a few years ago of things that were going to happen that for some reason or another have not happened. Whether it's the Navy hasn't transferred the land or this happened or that happened or the dog at it. for some reason the beautifification piece um has not moved forward in a timeline uh that is acceptable at least to the city. So can you speak to what is the hold up because I I agree with one of the public speakers that to me I sort of consider that lowhanging fruit and so how can we at least move that piece forward or is there some other barrier that perhaps we're not aware of? Yeah. So, um there are two phases to the beautifification plan. The first phase, the holdup for the first phase has to do with building 571, the remediation of building 571 that as was mentioned, I believe that was just approved in February. Uh so the remediation activities will take place later this year. I think that was the schedule. And uh so uh phase one we should be in a position to move forward with after the remediation is done. Phase two is a little bit trickier because that involves land that is currently held by the Navy and requires a transfer uh from the Navy in order for that work to be done. Um the Navy sort of operates at its own schedule unfortunately.

Okay. Um, I would like to see more movement on the beautifification plan. Uh, I think you guys are, um, trying to do work to activate the the area, which I appreciate, but you also have to understand, I think you guys all understand it, that, you know, someone getting off of 37, you don't want to feel like you're in the scene out of MadMax and then get to a concert, right?

I mean, I'm just being straight up with you. So, we have to figure out how we can collaborate together to move that forward and and be partners in like starting to realize that vision that you've promised the community or that you've made representations of what you will carry out in that area. And that's the thing that I I would like for us to focus on um very intentionally whether that's through the subcommittee or otherwise because um if we do that then we can we can probably uh see a a multiplying effect. Um if we don't we're going to keep having the same you know conversation. So, those are just my comments uh specifically on the beautifification plan, which is an area where I feel like you're you're dropping the ball according to the agreement. Uh, and I know it's complex and there's several things going on, but there's still deadlines being missed. Um, or very close to being missed based on what I've reviewed. So, it's all I got. Um, and then the last question for staff. So, the LAR agreement from 20some years ago, um it seemed to me when I was reading it, and this is for the city attorney, that there was some shared ownership between the city and the developer in dealing with the infrastructure issues, just based on my reading of it. Now, is it that the CFDs were created and then we didn't really deal with the infrastructure and that's why we we are where we are today or is there something that I'm missing? Cuz that agreement specifically says, you know, we need to collaborate. Developer needs to have some level of responsibility into the infrastructure, but this is going to be a shared responsibility. and now we're in 2026 and we got the same problems and now we're having a different conversation with a different developer. So I just want to understand that cuz

it's not it's not really connecting for me and they they've assumed all that responsibility. So I just want to better understand what's going on.

So I think they have assumed the responsibility um in those agreements for infrastructure for sure. Um, I think it was described here in terms of um, and I appreciate the explanation by Mary Island Company's Council. Uh, generally speaking, development and as contemplated in that old development agreement um, and the specific plan. The question is when does infrastructure get reconstructed by a developer who needs the reconstructed infrastructure to service a specific development as development goes forward incrementally and generally the answer to that question is incrementally as development goes forward I think the hangup and again I don't think anybody's wrong necessarily or right here it's just a hangup it's it's a problem we all face the issue here revolves around what is the infrastructure serving the development versus the infrastructure that is and I think we heard the word backbone right the infrastructure that is needed to um carry whatever it is whether it's water or effluent away from that individual development treat it if it's wastewater um treat it or capture it and make sure it isn't doesn't have pollutants if it's storm water or make sure that water infrastructure carries potable water and or irrigation water to and from the development the individual developments incrementally and I think what is happening here is the flood and waste I'm not going to weigh in on how they do or don't feel about it

um has uh needs to service the bigger portion taking it from that original development site, whatever's currently being developed through to the treatment facility. If it's let's speak only about wastewater, um I'm not going to pretend that is not a challenge because of the age of the infrastructure on the island. There has been some concern about whose responsibility it is and who has ownership of that uh infrastructure or repair and maintenance responsibility for that infrastructure until it is overall replaced. Um as we look at the new specific plan, some of those haven't we have an opportunity um and the new development agreement, we have an opportunity to be clearer about those responsibilities and the allocation thereof. Um which is the purpose of having some of the discussions about this. Um, right now they're a little bit at a standstill if they go forward with Connelly Corridor about who has responsibility for I will call them the immediate improvements um that would service that specific area versus a larger improvement necessary to carry whatever's coming off of that property through to treatment if we're talking about wastewater. Um, so that seems to be where the rub is and the clarity in the old agreements. I will go over them again to try to make some determinations about what we think. Um, but by and large the council has said to both agencies as I understand it, go forward, take a look at these issues, get a mediator to talk to both parties and all try parties at some

point. So the direction that we received was get a mediator between the city and the Lao flood and waste, start those conversations, bring Mary Island into those conversations after sort of an initial discussion and try to work out a solution for this issue. So that's kind of where we are right now. Um I will say that um we have exchanged names on both sides for mediators. Um ours were rejected. Um there's their first so our first two were rejected. We made the first offer. Um the city did. U Valo Flood and Wastes were rejected. Um and we proposed one more name so far and we are in the process of proposing more. I have not heard directly from Valo Fled and Waste um since I said where are we? So, um I'm assuming we will get additional names from them as well and we should be able to land on one.

Thank you, Mayor. All right, Council Member Gordon.

Thank you so much. I appreciate this. Um the gentleman who um presented the uh slide, I'm not sure if it's the city or um the gentleman who came and spoke just a few minutes ago. May I ask you to come up real quick and e and the city too can chime in in this question? You uh you remember the slide Manny that um congress city council member um well vice mayor asked you to go to the full complete project right there. Thank you. So I see that you have Torell here. Um have what part of the partnership have you involved them in yet? And have they even begin to have conversation with whatever you plan on doing there. What are you planning on doing with Toro is what I would like to ask.

I'm not sure who is the question for just because he he he kind of touched on it before and and so did the staff. But I just wanted No, no one really talked about this though. So I don't know if it's to you or to It's probably not to Hok. It might be to staff. Yeah. Thank you. Just whoever because you came up earlier. Hector, is that something you're council member?

Yeah, Council Member Gordon. I could address that. So we do meet um on a quarterly basis with Tour University as a planning and development services staff. Um when we did start reviewing the uh Mayor Island specific plan, um we did let uh the representatives from Truro know that it's available for public review and we have been uh requesting their feedback uh since the uh public document was released. Um I believe they're still in the process of reviewing the document and understanding how um the land use plan and what's proposed in it will affect uh the you know the the buildout of Tory University. But um on the Mayor Island company and city side uh we did want to make sure that uh the allowances for development and density uh within the Turo area that were in the existing specific plan are carried over to the new specific plan. So we've checked that box. Um I do believe that uh we have another meeting coming up soon where uh we'll be able to sort of ping them on their progress reviewing the specific plan.

Thank you. I appreciate that. And then I wanted to ask um regarding the area of um highway 37 whether it's to staff um you know the SR 37 project will this have any effect or delays on any moving forward projects for M Island because we know that uh starting May 17th they're going to be closing off Bur is part of the the uh highway 37 and there's going to be a lot of detours and we all know that if you live in you know you're going to take Mary Island. So just asking is there any delays that you're aware of that will prevent these projects moving forward or phases I should say.

Uh I could take a stab at at answering that question. Uh, Council Member Gordon, it sounds like those projects that um are related to SR37 may be more um nearer term. Um, you know, obviously with the uh specific plan, um, first of all, this is a 30-year horizon for the plan implementation after this gets adopted. Um, we obviously would want to have some of the initial phases uh, completed in terms of environmental review and be able to be as shovel ready as possible without having to go through the city process for design review and development review. Um, but are maybe you could be a little bit more specific as to what uh SR37 projects uh you're talking about.

Oh, question. Okay, thank you. Yeah, because uh it looks like uh looking at their map, a lot of the on-ramp and off-ramp will will be affected. And so that's one of reasons why I asked. I also asked that because I remember when um they were doing um the development for um the I just been thinking that whole whole entire time uh Cartola Parkway they were fixing up that way but they also damaged a lot of the city part right and so I just think of that and I'm just wondering if this will have any effect if not worries I was Just putting that out there because it I saw the way the map is. Did that help you?

Uh yeah, that's that's helpful. I think I would have to probably go back and look at the uh Highway 37 um you know, timeline and see how that stacks up with the specific plan um review and adoption process. But, you know, I think we mentioned we're looking at um you know, late 2027 for adoption of this. Um I'm not sure if that syncs up with the improvement project that you're uh referring to. I know we're also talking to uh STA um about uh tolling um and potentially you know having a portion of that tolling that's collected in the future uh fund future um you know on and offramp improvements that could be triggered by this plan. So that's part all part of the discussion.

Thank you very much. I appreciate that. I know that this project is going to be wild as well. It's not going to happen overnight. So, I I know it's going to be a while. So, that's why I was wondering that question. Thank you. Thank you, Council Member Bendzer.

Thank you, Mayor. Um, and I want to put this in the context of this is kind of food for thought, so I don't expect you to answer these questions in particular, but I know if you can put up the phasing map again, Manny. Um, you know, I think you spoke to it and you've you've proven that. When you look at things like Quarter Coffee House that I go to two or three times a week, it's always busy. There's lines that go all the way through the the establishment, there's hardly a table available, it's in that center corridor. When you look at the Redwood Empire, although it's a very cool atmosphere, it's very remote. And I honestly don't think of driving out there very often to go and have dinner or have food or have, you know, drinks and things uh cuz it's just not in the center part. So, you've kind of proven that. Um, and I and I agree with that that concept. Um, and I agree with Council Member Palmis that even though, you know, we're I think we're all very disappointed that Conley Street corridor is delayed. Um, I can't express how much I truly am um, you know, upset by it. But what I will say is I agree with council parents that we need to do something and I know that you know these developments are long range plans and it's you you you have big dreams for big devel you know for big companies to come in or or um you know big investors to come in and do different things but we need to start something with you know some of our smaller local businesses and you know when you look at places like the coal sheds which are a really cool building but you look at the empty spaces there and you look as a small business that is going to be a fortune to build out for a small business owner, right? And yes, you may have to do some, you know, development in there and get to make it more feasible for people. You know, many of the buildings on Maryland don't have bathrooms, for instance. They had, you know, outouses and things when it was the military base. So, for a small business to come in there, that is a huge expense to try to develop a business there. So, you know, maybe we need to look at activating, you know, the coal sheds, you know, develop that more to not be maybe what the main plan

is, but maybe, you know, what could happen tomorrow and then, you know, it can be rebuilt and revitalized as the development happens. You know, we need to spark interest or we need to start building momentum. You know, maybe the office building is another example where you could have build out to be smaller sections so that it's more feasible for a small business to go into those places um and start their local business and start drumming up business for people going out there and then you'll see that the the potential is there and you know I think we'll see those big dreams but I think if we sit here and continue to wait for those big dreams to happen based on this huge infrastructure we're going to have another LAR in our hands and you know if we've heard anything from the the the citizens that were here today. We've heard it from the on the council side, the city side. I'm sure you've all heard it. You know, they're tired of waiting for just this big development to happen. And it's not that any of us feel like the development is not going to happen, but it's just it's it's too far out in the future. So, if any of that makes sense, you know, if we could try to activate some smaller spaces, try to make it more feasible for small businesses to move out there and try to get that momentum going, get people out there more, uh, I think we would I think we would do a lot for this. And you know, maybe we can bite off smaller pieces so that we can, you know, use the the failing infrastructure that we already have out there, but we can still kind of get things activated. And it may not be the most cost-effective way to do it, but at least it's getting momentum and getting people out there, getting people excited about Mir Island, right? Um, and so I'll just leave it at that. Thank you.

Okay. All right. Thank you. Um, I'll close this out. Um, I I'm not going to repeat what's been said, but I I will just kind of start. Thank you for every again to everybody that presented and I I mean I think there's a lot of good things happening and I think there's also a frustration of this kind of repeated deja vu of just sort of we're always kind of perpetually 6 to 12 months off from the next big thing and um I've had a lot of conversations with um you know this is the first I guess it's also worth mentioning this is the first open session like mayor island item we've had with the new council so this is also really important Um, and I I've had a lot of conversations whether it's with Mar Island Company or here in the city. Um, you know, my feelings on the the North Mirror Island agreement, um, the 2022 agreement are are well known. Uh, my feelings about the deficiencies in that agreement are are well known and the approach that I've kind of taken coming in is okay, we can't get any of the lost time back, but what are we going to do moving forward? And you know, I think with Connelly, Council Member Pales and I, we've given like updates here and there on some of the conversations we've been having that led to the mediation and led to some of the kind of workg groupoup conversations um that you know, the the community to the to Council Member Gendzer's point, you know, and and to Mr. Forner's point, the community has kind of sold this in 2022 as this is this whole thing is kind of hinging on Connelly and then to not have Connelly happen is like we we have to name that and acknowledge that and and and own that and have a real conversation about what what the community is going to be able to see in the in the short term. And I think the what I would like to see in the next iteration of this discussion um kind of getting back to where council how council member Matias approached his comments. I want to know the LAR agreement and the North Mar Island

agreement. What were the enforcable elements of those development agreements and why did they break down? So why either didn't they get enforced? Didn't they end up happening? What what went wrong with was the deficiency the agreement itself? Was it not strong enough? Was it the deficiency that the city didn't just didn't straight up didn't enforce something that it could have enforced or or the timing didn't line up? Was the problem that market conditions changed so drastically that the agreement was too rigid? What what were the problems? Not so we can go back and relitigate all that. Although I would love to know what we have to work with again on the beautifification and connal and some of this stuff like that was all baked into that agreement. Where where are some of those you know kind of teeth that we were we were talking about four years ago. But let's do that post-mortem so that when the islandwide development agreement is negotiated, those things are corrected so we don't end up, you know, we were talking earlier about having a crappy CFD from 2002. We've got a crappy development agreement from the '9s that again, another one that we just want to set on fire on a p down the Nappa River. like can we please have proactive conversations now about why those agreements failed us so deeply such that with a forward-f facing lens we can all work together to make this next one better and I'm hearing from Mary Island company I don't by the way I want to say I don't blame Mary Island company for the lack of like Connelly and all this like we've got we just got big problems we need to solve I'm hearing from island company that that they're committed to developing the island and and if that's true then the current setup isn't serving any party like none of us are really being served by this taking so long and these delays and so I just I would love everybody to come together

and do that sort of check on all right what has gone wrong what has failed here so that when we do this final big islandwide development agreement it is something that everybody's happy with that is really transparent that you know everybody can own and that we can kind of track the progress as it goes and we can actually achieve so we're not sitting up here having déja vu listen to Brian's beautiful presentation about that. I mean, we're so excited. We're so excited with the renderings and the vision. Like, I remember when that was first presented six or seven years ago and it was so exciting, right? So, how do we make that happen? Um, and I think it it comes down to having a really honest like blameree, fingerpointing conversation about what has happened and what has gone wrong in the past 20 25 years on the on the island. Uh, couple questions. one um on the beautifification and this one I guess is for Hector again forward facing. I'm not looking to to look back but I mean there was a 2-year gap between when Mary Island companies submitted the beautifification plan and when the city marked it complete. I think it was they submitted it in 2023 and the city deemed it complete in 2025. That's a really long time for a beautifification plan. So have have the deficiency whatever led to that taking so long has that been corrected? I know we've got some consultants on board with planning is staffed up. Hector, you're here. Are we confident that we can process something faster now? And is there anything else?

Yeah, thank you for that question. So, um, our department is, you know, in terms of planning functions, I'm the long-range planning manager. Cesar Orosco, who is, I think, uh, in the audience with you tonight, is our current development planning manager. So, I'd invite him to come up to the podium and maybe perhaps speak on that. Um I don't know if he was around uh during that time. Yes, he's here and he's coming up. Great. Thank you.

Good evening, mayor and uh city council. Once again, Tesarosco, planning manager for current development. Um so the beautifification project uh for North Maryland. We have had multiple conversations with the Maryland company, specifically Ree and Dustin from Maryland Company on making a couple of modifications and updates to the plans. Uh the last conversation we had with them was to make changes to the onroad uh infrastructure that they were proposing to improve along the street to make sure that their uh travel lanes meet the required um vehicle travel distance um I say width of it and as well as the uh bike lanes that they're proposing. So we're just waiting for Maryland company to resubmit to us so we can finalize our review and issue an approval. Okay. And most recently as we um the information that was shared this evening is you know the remediation of that building. Once that's complete the Maryland company can move forward and do the first phase of the two phases for the beautifification project.

Thank you. I appreciate that. And can I know somebody already asked this but can you reexlain why the entire phase one of the beautifification plan is hinging on that one building getting remediated? is really is all of phase one really adj so adjacent to that building that it is I think that was something that we all kind of had had a bit of a question about through the mayor I can address that I mean it is smack dab in the middle of it I can't justify why nothing can be done but it is quite in the middle of the whole entirety of the phase one

so maybe that's when when this comes back or whatever that's an ongoing conversation that can be had because I really what's one thing I wrote down was just like really is there there there's not anything we can do pre-inter 2026 with regard to beautifification. So that's just again something that hopefully a conversation that that we can have if if everybody wants to kind of partner and and come back onto a better timeline and and pace on this. Uh last question uh for for the planning team on Coral Sea. Thank you by the way for making that adjustment because I know this is a bit you know what happened with the Coral Sea meeting was a bit different than how you would usually handle something like this but we have a very unique situation on Mar Island. So, the fact that you're doing additional outreach with expanded scope and and bringing, you know, existing residents in, that's incredibly important. The follow-up question I had is just the timeline for that development. So, when can, you know, when when do we feel like the houses will be constructed and and when will what if we're thinking about impact on residents or just we're just curious when those houses will be ready? What's the timeline for that

project right now? So at the community meeting that was held last week on the 22nd, you know, we received input from the community. Um, so we actually decided to renotice a project and expand the notification to include more uh individuals in the May Island. So kind of like Hector mentioned, our planning and development services director is anticipating to take action on the project on um by May 12th um from LAR that was actually on the call. they if they receive an approval and it doesn't get appealed, um they're expecting to start construction in this summer. So, summer 2026. Do we have a sense of how long the construction is going to go? Like year, couple years.

Um I would anticipate a couple of years. Um from the conversation that Lenar or the information that LAR shared is that they're going to do a phase approach where they're going to be releasing four four homes at a time. So depending on, you know, if they go into contract for those individual homes, they'll begin construction. So Mhm. So, it's about 65 detached single family residences and a couple of multifamily. So, maybe a couple of years to fully build that out. Okay. Thank you so much. I appreciate that.

Um that's that's it for the the planning. I had one other comment um clarification kind of comment just to name it. So, the city as we think about Mar Island and we think about our assets out there and activity out there, the city has engaged a consultant to do maritime uh assessment of the island. what came out is called a strategic plan which made I think made some folks feel like oh my gosh did we miss our opportunity to give input and I I'm not gonna I see ACM Conley I'll I'll have you just flag me if I'm saying anything incorrect uh but I my understanding is that that's coming to council next Tuesday and the directive to the consultants who were wonderful was to to sort of assess our assets out there and opportunities out there and kind of create a map of what's available to us at which point now the city can take that and decide what we want to do. And so I would encourage any residents who saw that and and want to engage or were feeling a certain way about some of the recommendations, please tune in next Tuesday for that meeting and stay engaged over the coming weeks and months and maybe years as we decide where we want to go with that that maritime plan and and and those opportunities. And I'll also say, and I'm just gonna again eyeball, nobody needs to come up here, uh, but I want to confirm on the record, Mar Island Company was part of consulted by Roosevelt Group, met with Roosevelt Group, and that their assessment of the assets on the island, included Mar Island Company owned assets, and the opportunities that they identified were things that were identified within what Mir Island Company is envisioning with their specific plan. So there's nothing that's coming out of the strategic plan, the maritime opportunity plan. I guess I'll just call it a strategic plan. There's nothing that came in that strategic plan document from the Roosevelt group that would be inongruent or inconsistent with what Mar Island Company is proposing as their vision for the island. Nor is there anything that would be grossly different from like a

use standpoint, from like a mitigation. you know, there's nothing, you know, majorly industrial that isn't already like nothing nothing drastic that that's going to fundamentally change what development looks like on the island from the starting point and then the conversation will happen from here. So, I just kind of wanted to set that tone that that sort of context and let everybody know that we'll be doing that next week at 5:00 p.m. will be that item. And the reason it's starting at 5:00 PM is because we'll have the budget right after. So, we got two big items. Uh, last thing that I will say before we wrap, uh, and I said 10, so we're going to wrap at 10. Um, I, uh, I don't think a vote to to Miss Grim's point, I don't think we need to vote on the subcommittee because we already appointed the subcommittee. So, we'll just have it start meeting. My vision looking at this is probably summer. Friday's May 1st, so summer is not summer is is is soon. And that would be, I think, a good place to have the infrastructure financing, just sort of updates. um maybe some of that uh general updates talking about some of these other adjacent things like the 6A channel the causeway repairs you know that sort of stuff so we can have more transparent conversations and also that's where we can bring in Toro because I don't know that I haven't seen them be part of any of these conversations so I think we have some additional island stakeholders that we need to get to the table as well so I see the subcommittee being a good venue for that uh public I see it meeting publicly I see it being the place for some of these public updates and the engagement from from residents and and broader community. So, we'll look to get that set up uh June or July. I mean, we got a budget due, so bear with me. We'll get that set up as soon as possible. And with that, I will adjourn us as promised, I believe. Yeah, it's a special meeting. We don't have to do anything else. I will adjourn us at 10 p.m. Thank you everyone who attended pres presented all of our stakeholders.