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RESOLUTION NO. 2018-018 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN EXCLUSIVE NEGOTIATING AGREEMENT WITH THE UNIVERSITY OF SAINT KATHERINE, A PRIVATE NON-PROFIT UNIVERSITY, FOR A PROPOSED UNIVERSITY DEVELOPMENT
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
In December 2014 the City completed its acquisition of 375 acres of land for the University and Innovation District (UID). In January 2016 the City Council approved the recruitment and development strategy for a bi-national, multi-institutional higher education campus for the UID. Since acquiring the property, the City has been progressing on creating a master plan and completing the appropriate environmental studies, in accordance with the California Environmental Quality Act (CEQA), so that the property would be shovel ready for development.
Recently, the City of Chula Vista was approached by the University of Saint Katherine (Saint Katherine) which is currently located in San Marcos, to establish a permanent undergraduate college on a portion of the UID. Saint Katherine is a private non-profit, Western Association of School and Colleges (WASC) accredited University. City staff is interested in further evaluating the opportunity to relocate and permanently establish Saint Katherine on a portion of the UID property. The proposed Exclusive Negotiating Agreement (ENA) will allow the City to review the financial capacity of Saint Katherine to construct, expand and maintain an institution of higher education and also allow the parties to determine the most appropriate location and phasing for the proposed development.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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Environmental Determination
The Development Services Director has reviewed the proposed contract approvals for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review of contract approval is required.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
Saint Katherine is a university of arts and sciences that focuses its integrated, interdisciplinary teaching in the core areas of Composition, English Language and Literature, American Government and History, Economics, Business, and the Sciences. Saint Katherine is regionally accredited by the WASC Senior College and University Commission (WSCUC). Saint Katherine opened in 2011 with 20 students and has grown to over 200 full time students in 2017. Students of Saint Katherine may complete degree (BA/BS) programs in eleven concentrations, pre-professional studies (health sciences and graduate studies), and PK-12 teacher credentialing preparation. The University emphasizes interdisciplinary collaborations, laboratories, field experience, international study and programs whose work cuts across traditional departmental boundaries. Instruction at the University of Saint Katherine emphasizes awareness and understanding of cultures worldwide. The stated mission of Saint Katherine’s is “to provide a balanced education in the liberal arts and sciences, founded and rooted in the life of the Orthodox Christian Tradition”.
In 2016/17 the University was awarded an “A” grade by the American Council of Trustees and Alumni (ACTA) for its emphasis on a comprehensive core curriculum. The ACTA is an American non-profit organization whose stated mission is to "support liberal arts education, uphold high academic standards, safeguard the free exchange of ideas on campus, and ensure that the next generation receives a philosophically rich, high-quality college education at an affordable price.
Exclusive Negotiating Agreement (ENA):
The purpose of the ENA is to provide staff and St. Katherine the opportunity to conduct due diligence and evaluate the university’s financial ability to define and develop the proposed project. Upon conclusion of the evaluation, the parties may proceed to negotiate the terms and conditions of a mutually-agreeable Development Agreement ("DA") for Council consideration. During the term of the ENA the City agrees not to solicit alternative development proposals for the Project, or to negotiate with any other person or entity regarding the acquisition or development of the Project. The Project being evaluated during the ENA period is the initial vision to develop an institution for 1,000 undergraduate students.
The Project is currently envisioned to consist of (i) a university campus with facilities appropriate for approximately 1,000 full-time students, (ii) student housing for approximately 400 students, and (iii) uses incidental to the university, student housing, including retail services, restaurants, athletic facilities and libraries, which uses will be included in a master plan ("Campus Master Plan"). Unless additions or deletions are approved or required by City the parcels comprising the Project shall be approximately 10 acres located adjacent to either side of High Tech High, Exhibit “A” to the ENA. The Property is proposed to be leased to the Developer for $1 per year with the ability to renew the lease for an additional term based on agreed upon terms and conditions. The ENA would not preclude the ability of the City to solicit proposals from others for the remaining 365 acres of the UID.
The Initial Term of the ENA will be for ninety (90) days from the date of approval and can be extended for up to two (2) additional ninety (90) day periods. The initial objectives and activities of the ENA will be as follows:
• The initial task will be to have an independent, third-party review and report on the institution’s academic/institutional record, including the academic rigor of its programs and student success data.
o Among other things, legal staff will be evaluating the legal limits on the City’s ability to provide a subsidy to an educational institution with religious affiliations. Preliminary indications are that a legally appropriate deal structure should be attainable to address this issue.
• Following the initial task, the City will have an independent third-party review of the financial capacity of Saint Katherine to develop their proposed portion of the UID.
• Following the first two tasks the City will work with St. Katherine’s on the vision and develop a Campus Master Plan for the Saint Katherine Higher Education Campus, consistent with the following:
o provide educational opportunities and access to higher education for residents of the City and the region;
o serve as an economic engine for the Innovation District, the City and the region by helping to create high-quality jobs, economic diversity and growth;
o consider special relationships with Mexico or other countries, including the concept of a “bi-national” university; and
o promote and be compatible with the University SPA Plan goals and standards, including high-quality physical connections and compatibility with surrounding neighborhoods and land uses; and
Provided staff and the developer are able to successfully conclude the above activities, staff will return with the appropriate development agreement for City Council consideration. The agreement would allow Saint Katherine the ability to implement their Campus Master Plan by having the following abilities:
• To acquire, hold, accept transfer of, lease, both short term and long term including by ground lease, and maintain suitable real and personal property that is necessary to implement the Campus Master Plan for the University. The property may include land, whether vacant or improved, buildings and structures, improvements to the property, personal property, furniture, fixtures and equipment and other property, both tangible and intangible.
• To enter into, make, perform, and carry out contracts and other instruments that are necessary to implement the Campus Master Plan for Saint Katherine.
In addition, Saint Katherine also desires to become a nationally and internationally recognized residential institution of approximately 5,000 undergraduate, graduate, postgraduate and professional studies students. It aspires to be a high research activity (R1), doctoral degree-granting institution which will award research doctoral degrees in the humanities, social sciences, and STEM fields, as well as in medicine, dentistry, and pharmacy. It may also offer masters and professional practice and other doctoral degrees in other fields. The development agreement may also contain provisions that would allow the University to grow beyond its initial vision of 1,000 students based on achieving agreed upon milestones.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members 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 Council member, 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 planning and implementation of the UID is a key initiative under the City’s goals for Economic Vitality.
CURRENT YEAR FISCAL IMPACT
There is no net fiscal impact to the General Fund as a result of this action however, previously approved budget appropriations will be utilized to perform a financial feasibility analysis and support the Campus master planning effort.
ONGOING FISCAL IMPACT
There are no ongoing fiscal impacts as a result of this action.
ATTACHMENTS
1. Exclusive Negotiating Agreement
Staff Contact: Eric Crockett, Economic Development Director