REPORT TO COUNCIL
SUBJECT
Title
Action on a Funding Agreement with CoreSite Real Estate SV9, L.P., Relating to City Predesign Engineering Activities for the Stender Way Substation Project and Related Budget Amendment [Council Pillar: Deliver and Enhance Quality Efficient Services and Infrastructure]
Report
BACKGROUND
CoreSite Real Estate SV9, L.P., (CoreSite) proposes to construct a four-story, 246,660 square-foot data center at 2905 Stender Way (SV9) that would replace the existing uses on the site. The SV9 data center would be approximately 85 feet in height and would house computer servers and supporting equipment for private clients. The SV9 data center facility is proposed to be served by a new single customer electric substation and a related 60kV transmission line extension to the substation.
CoreSite has requested the City to perform predesign engineering activities in parallel with CoreSite’s development and construction approval process which is presently under California Environmental Quality Act (CEQA) review.
DISCUSSION
Under this Funding Agreement, Coresite will fund the City’s preparation of system impact studies and predesign activities on the substation, the substation’s control building and the off-site 60kV transmission line interconnection, in a parallel path with CoreSite’s CEQA review process.
This Funding Agreement does not provide CoreSite with any vested right to electric service, any assurance of approval of CoreSite’s project, any budget approvals relating thereto, permit application approvals, the environmental review or any other item relating or arising out of its project or any portion thereof. The City shall not be liable to CoreSite for failure to approve any such items.
ENVIRONMENTAL REVIEW
The action being considered is not subject to review under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Article 20, Section 15378(b)(4), which provides that “[t]he creation of government funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment” does not constitute a Project that requires environmental review. If the data center and substation project moves forward with its application, appropriate CEQA review will be completed prior to project approval.
FISCAL IMPACT
Under the terms of the Funding Agreement, CoreSite shall fully fund the City’s system impact study and predesign of the substation, substation control building and related off-site 60kV transmission line, estimated at $700,000. Coresite will be responsible to provide developer contributions prior to City incurring actual costs associated with these activities. The developer contribution will be included as a new Stender Way Junction Substation Capital Improvement Project in the Electric Utility Capital Fund. A budget amendment to receive this revenue and appropriate project costs is detailed below.
Budget Amendment
FY 2019/2020
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Electric Utility Capital Fund |
|
|
|
|
Revenues |
|
|
|
|
Developer Contributions for new Stender Way Junction Substation project |
$0 |
$700,000 |
$700,000 |
|
Expenditures |
|
|
|
|
Project Costs for new Stender Way Junction Substation project |
$0 |
$700,000 |
$700,000 |
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute the Funding Agreement with CoreSite Real Estate SV9, L.P. for $700,000;
2. Direct Finance Department to create a new CIP project number for the Stender Way Junction Substation project;
3. Approve a budget amendment in the Electric Utility Capital Fund to recognize developer contributions and establish an appropriation in the amount of $700,000 for the new Stender Way Junction Substation project as a part of the implementation of this Agreement to accumulate the Developer Contributions and resulting charges; and
4. Delegate authority to the City Manager, or designee, to make minor modifications to the Agreement, and execute subsequent Funding Agreements and amendments with other applicants.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Funding Agreement