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RESOLUTION NO. 2016-084 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING MITIGATED NEGATIVE DECLARATION (IS-15-006) AND APPROVING A WETLAND RESTORATION AGREEMENT BETWEEN HOMEFED CORPORATION AND THE CITY OF CHULA VISTA, AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
In order to complete grading operations for Villages 3 and 8 West, and the related extension of Heritage Road to Main Street, HomeFed Corporation (Applicant) needs to secure wetland mitigation as required by the Environmental Impact Reports (EIRs) for those villages. With the availability of land within wetland mitigation banks being extremely limited, the Applicant approached the City about restoring wetland areas within a parcel owned by the City of Chula Vista in the Otay River Valley (see Attachment 1 - Location Map). The attached agreement (see Attachment 3 - Agreement Regarding Otay River Valley Restoration or “Agreement”) details the terms of the Agreement to initially mitigate wetland impacts for Villages 3 and 8 West, as well as set up a mitigation bank that intends to cover wetland mitigation for the Applicant’s remaining villages within Otay Ranch, the University and Innovation District, and other Otay Ranch projects.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
A Mitigated Negative Declaration (IS-15-006) has been prepared for the Agreement Regarding Otay River Valley Restoration.
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Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has conducted an Initial Study, IS-15-006, in accordance with the CEQA. Based upon the results of the Initial Study, the Director of Development Services has determined that the project could result in significant effects on the environment. However, revisions to the project made by or agreed to by the Applicant would avoid the effects or mitigate the effects to a point where clearly no significant effects would occur; therefore, the Director of Development Services has prepared a Mitigated Negative Declaration (MND), IS-15-006. A draft MND was issued for a 30-day public review period on March 11, 2016, pursuant to the requirements of CEQA Guidelines Section 15072. A total of four comment letters were received, all of which were from state and local agencies. All comments were of a relatively minor technical nature and are responded to within the MND. No comments received challenged the adequacy of the MND.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
Due to the Applicant’s desire to complete grading for Villages 3 and 8 West, including the extension of Heritage Road to Main Street, and the extremely limited amount of wetland mitigation credits available in existing mitigation banks, the Applicant approached the City about restoring wetlands on a City-owned parcel of land (APN# 644-090-04-00). The subject site is approximately 100 acres in size (part of an approximately 300 acre parcel) and is located within the eastern Otay River Valley, approximately 1 mile below Savage Dam (See Attachment 1 - Location Map). The restoration site is in the uppermost reach of the Lower Otay River Watershed and provides an ideal opportunity for restoration due to its location and level of physical disturbance. The site was previously mined for sand and gravel over several decades, and as a result, the Otay River currently does not even run above ground in this area.
Late last year, the Applicant began work on a Habitat Mitigation and Monitoring Plan (HMMP) to address Resource Agency permitting requirements (See Attachment 5 - Otay River Restoration Project Final Habitat Mitigation and Monitoring Plan). In general the plan lays out a three phase work program. Phase one includes the removal of invasive species both upstream to the dam and within the Phase Two boundary. Phase Two includes the re-establishment of approximately 2,300 linear feet of river mainstream and approximately 13.5 acres of floodplain habitat, re-establishment of appropriate river crossings used by the U.S. Border Patrol, SDG&E, Otay Water District and trail users, establishment of the easternmost pond, rehabilitation of approximately 4 acres of upland transitional habitat, and establishing Otay Valley Regional Park and Greenbelt Master Plan trail corridors through the restoration site. The last phase, or phases, includes the restoration of the remainder of the mainstream, enhancement (approximately 3,000 lineal feet) and establishment of ponds, re-establishment of ephemeral secondary channels and floodplains, rehabilitation of approximately 31 acres of upland transitional habitat and upgrades to one additional crossing (See Attachment 4 - Phasing and Trails Map). The HMMP anticipates that once the first two phases of the restoration site are complete, and the mitigation bank has been established, there will be excess mitigation land available to mitigate the wetland impacts of the University and Innovation District, the remainder of the Applicant’s projects as well as additional projects. This excess mitigation, above and beyond the mitigation necessary for the University and Innovation District and the remainder of the Applicant’s projects, is intended to be banked and credits sold.
In conjunction with the preparation of the HMMP, the Applicant also began negotiations with the City on a Wetland Restoration Agreement (See Attachment 3 - Agreement Regarding Otay River Valley Restoration) that details the responsibilities of each party, both physically and monetarily, to implement the plan. The Agreement is intended to ensure that allowing use of City owned property for private development mitigation provides the City with some direct quid-pro-quo benefits that are discussed herein and detailed in the bullet points below. The Agreement intends to allow for the mitigation of wetland impacts for Villages 3 (including the connection of Heritage Road between Olympic Parkway and Main Street) and 8 West in the short term, while requiring the subsequent establishment of a wetland mitigation bank. The Agreement includes the following deal points:
• The Applicant will restore native habitat on City-owned land in the Otay River Valley (also within the Otay Ranch Preserve and the Multiple Species Conservation Plan areas) that had previously been mined for sand and gravel at no cost to the City of Chula Vista and the City will retain fee title to the restored City-owned land, and;
• In the first and second phases, the Applicant will restore land sufficient to cover the wetland impacts of Villages 3 (including the connection of Heritage Road between Olympic Parkway and Main Street) and 8 West and install fencing, signage, educational kiosks and Otay Valley Regional Park and City of Chula Vista Greenbelt trails, at the Applicant’s sole expense, and;
• Within 90 days from the execution of this Agreement, the Applicant will submit a draft Mitigation Bank Prospectus to the Resource Agencies with the intent of establishing a wetland mitigation bank that can cover wetland mitigation credits for the University and Innovation District and the remainder of the Applicant’s projects, and enable the City to sell any excess credits to developments within the mitigation bank’s service area (i.e. other Otay Ranch projects), and;
• The Applicant is required to establish the mitigation bank within 36 months, and;
• The Applicant is required to begin construction of additional wetland mitigation area within the mitigation bank within 12 months of the approval of the bank, and;
• This additional wetland restoration of the property and establishment of a wetland mitigation bank will enable the City to satisfy anticipated Resource Agency Permit mitigation requirements for the University and Innovation District at no public expense, and;
• Any excess mitigation credits will be sold to developers under the City’s oversight within the service area, and the Applicant will be reimbursed “reasonable costs” for the creation, processing and implementing of the mitigation bank above and beyond what they would have otherwise expended on mitigation requirements for their development and the University and Innovation District, and;
• The Applicant, at its sole expense, will process any necessary entitlement and environmental updates, revisions or amendments necessary to build the City’s Greenbelt Trail and Otay Valley Regional Park (OVRP) trails within the area, and;
• The Applicant will build the Greenbelt Trail and OVRP trails through the restoration site, and;
• The Applicant will offer to the City, at no expense to the City, fee title to jurisdictional waters immediately west of the restoration site equal to the acreage of mitigation satisfying Resource Agency Permits for the remainder of the Applicant’s undeveloped property.
In summary, the Agreement will allow for restoration of wetland habitat on City-owned property to mitigate for the timely construction of Heritage Road, as well as the completion of grading for Villages 3 and 8 West in the short term. The Agreement also requires the subsequent, timely creation of a mitigation bank that will cover wetland mitigation impacts for the University and Innovation District, and serve other development within the service area.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Councilmembers and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
Staff is not independently aware, and has not been informed by any City Councilmember, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. The proposed wetland restoration and creation of a wetland mitigation bank would implement the Healthy Community Goal. In particular, the project would implement Strategy 3.2, “develop and implement strategies and programs that restore and protect natural resources and promote sustainability”, by restoring and protecting up to approximately 100 acres of wetland and upland habitat.
CURRENT YEAR FISCAL IMPACT
The processing for the Wetland Restoration Agreement and all supporting documents were funded by a developer deposit account. This account funded City staff and consultants representing the City on this project.
ONGOING FISCAL IMPACT
The ongoing expenditures for staff time and other City costs associated with implementation of the HMMP and mitigation bank will be funded by a developer deposit account. Related funding/bonding for establishment and implementation of the mitigation bank and the construction of the restoration improvements will be the responsibility of the Applicant with the associated permitting agencies. Revenues associated with the selling of mitigation credits will be used first to reimburse the Applicant for its “reasonable costs” (as established and defined in the Agreement) in creating, processing and implementing the mitigation bank. Once the Applicant’s “reasonable costs” have been reimbursed, any further revenue will accrue to the City.
ATTACHMENTS
1. Location Map
2. Mitigated Negative Declaration, IS-15-006
3. Agreement Regarding Otay River Valley Restoration
4. Phasing and Trails Map
5. Otay River Restoration Project Final Habitat Mitigation and Monitoring Plan
Staff Contact: Scott Donaghe, Principal Planner