REPORT TO COUNCIL
SUBJECT
Title
Adoption of a Resolution of Intention for Maintenance District No. 183 - Santa Clara Convention Center Complex
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
In April 1980, the City Council adopted an ordinance providing an alternative method for annually fixing and levying a special benefit assessment for the maintenance districts in the City of Santa Clara. That ordinance (SCCC Section 16.10.490) was required because Proposition 13 prohibited the City from continuing its prior practice of assessing maintenance costs based upon assessed value. The ordinance requires that an annual report is prepared for each maintenance district, which would set the budget for the ensuing year and the formula for the annual assessment levy, and provide a description of each property, including the amount of assessment to be levied against each lot.
The original lease agreements between the Redevelopment Agency of the City of Santa Clara, Santa Clara Convention Hotel Limited Partnership (Hotel), and SCCC Associates II (Techmart) provided for the formation of the District. These agreements also served to apportion the funds necessary to maintain and operate the common improvements serving the Convention Center, Hotel, and Techmart. Hudson Techmart Commerce Center L.L.C. currently owns Techmart, Hyatt Regency Santa Clara is the current Hotel owner, and the Convention Center building is owned by the City of Santa Clara. Each of these three parties are responsible for a share of the FY 2024/25 maintenance assessment, which is set by the annual budget.
In June 1986, Council Adopted Resolution 5081 that formed the Santa Clara Convention Center Complex - Maintenance District 183 (MD 183) and established the mechanism for funding maintenance and operations on an annual basis. There are three components of this annual funding. The first component is the overall cost of maintaining and operating the general infrastructure consisting of things such as pavement, sidewalk, walkways, covered walkways, signs, landscaping etc. The cost for maintaining these items is split by 39.64 percent to the City of Santa Clara (City), 22.94 percent to the Hyatt Regency Hotel (Hyatt) and 37.42 percent to Hudson Techmart Commerce Center LLC (Techmart). The second component includes the cost of maintaining and operating permanent parking controls such as fixed signage, electronic signage and other parking related equipment. The costs for these items are allocated 30.04 percent to the City, 22.12 percent to the Hyatt, and 47.84 percent to Techmart.
The third and final component includes the overall costs for maintaining and operating temporary parking controls such as movable barriers, temporary parking attendants and guards, adjustable gates, and signage. The costs for these items are allocated 78.72 percent to the City, 10.64 percent to the Hyatt, and 10.64 percent to Techmart.
Also, as background, at the April 18, 2023 City Council Meeting, Council directed staff to review parking options at Santa Clara Convention Center, including the maintenance of the Convention Center in the City budget. Work on this initiative has included an analysis of parking rights related to the sale of former Redevelopment Agency properties next to the Convention Center.
Additional work to explore paid Convention Center parking is planned during FY 2024/25.
DISCUSSION
The annual assessment for MD 183 maintains common improvements including, but not limited to, surface and structural parking areas (parking garage), landscaping, roadway, pedestrian bridges, space frames, fountains, and exterior lighting. In addition to the costs of maintaining and operating the common improvements, the proposed total cost includes expenses related to the City’s cost to administer the District, insurance, and utilities.
City staff prepared a draft Director’s Report for FY 2024/25 (Attachment 1), which shows the formula for the annual assessment levy, parcel descriptions, and amount of assessment to be levied against each parcel. Based on that report, the total FY 2024/25 annual budget for MD 183 is $1,862,825 which will be funded through the City ($840,546), Hyatt ($394,614), and Techmart ($627,665). The proposed FY 2024/25 assessment is $88,706 higher than the previous year. The assessment for the previous year was reduced because it was partially offset by carrying forward unspent funds from the prior year. Staff is not anticipating any unspent funds for the current fiscal year.
This report has been delivered to each property owner in the District, and a copy has been filed with the City Clerk’s Office. Discussions between staff, property owners and all interested tenants were conducted via email correspondence and at a meeting held on March 6, 2024. A second meeting was held to continue discussions about the Director’s Report on April 3, 2024.
In conjunction with preparing the report, the Council is required to hold a public hearing, prior to which a Notice of Public Hearing (Attachment 2) will be posted and published in the Santa Clara Weekly. As recommended in this report, a Resolution of Intention for Maintenance District No. 183 FY 2024/25 (Attachment 3) has been prepared and sets June 4, 2024, as the public hearing date. If the Council approves the budget on June 4, the confirmed assessments will be sent out by the City for collection.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
The total FY 2024/25 maintenance cost for Maintenance District No. 183 is estimated at $1,862,825 which will be funded by the Maintenance District No. 183 partners. Approval of the assessment would result in the City collecting $1,022,279 in revenue from the Hotel and Techmart to fund the maintenance of common improvements at the Convention Center Complex. The balance of the cost, $840,546, would be funded by the City’s General Fund as the owner of the Convention Center building. The funding is included in the FY 2024/25 Proposed Operating Budget.
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> or at the public information desk at any City of Santa Clara public library.
On May 15, 2024, the Notice of Public Hearing for the June 4, 2024 Council meeting will be published in the Santa Clara Weekly. In addition, the notice will be posted at the City Clerk’s Office and mailed to all property owners within the District.
RECOMMENDATION
Recommendation
1. Adopt a Resolution of Intention to order that the alternative method for the levy of benefit assessment be made applicable to the Santa Clara Convention Center Complex Maintenance District No. 183;
2. Set a hearing date of June 4, 2024 to approve the Director’s Report FY 2024/25; and
3. Authorize the publication, mailing, and posting of the Notice of Public Hearing as stated in the Resolution of Intention.
Staff
Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Director’s Report
2. Notice of Public Hearing
3. Resolution of Intention
4. Proposed Assessment