REPORT TO COUNCIL
SUBJECT
Title
Action on Resolution Approving the Annexation of Two Hotel Parcels (AC Hotel located at 2950 Lakeside Drive and Element Hotel located at 1950 Wyatt Drive) into Community Facilities District No. 2010-1
Report
BACKGROUND
On May 11, 2010, the City Council (Council) of the City of Santa Clara (City) adopted a resolution entitled "A Resolution of the City of Santa Clara, California, Formation of Community Facilities District: City of Santa Clara Community Facilities District No. 2010-1" (Resolution of Formation), ordering the formation of (i) the City of Santa Clara Community Facilities District No. 2010-1 (CFD) and (ii) the City of Santa Clara Community Facilities District No. 2010-1 (Future Annexation Area), defining the public facilities and public services to be provided by the CFD, authorizing the levy of a special tax on property within the CFD and preliminarily establishing an appropriations limit for the CFD, all pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (Act).
This CFD applies only to hotel properties near Levi's Stadium. At the time of formation, the hotel property owners voted unanimously to place a special tax on hotel room nights equivalent to a 2% transient occupancy tax (TOT). This 2% is in addition to City's current TOT rate of 9.5%. This special tax is pledged to the payment of portions of the publicly owned infrastructure for the stadium project, up to a cap of $35 million (excluding debt service and other financing costs), and the City was authorized to issue and sell bonds or incur other forms of debt to finance these improvements. The debt is secured by and payable solely from the special taxes to be levied on the hotel properties within the CFD and does not represent an obligation or debt of the City or the General Fund. The current total CFD debt is $29,946,619.40.
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