HomeMy WebLinkAbout7.1 MOU w/BART/PleasSUBJECT:
CITY CLERK FILE # 0600-40
-' -: '~' AGENDA STATEMENT ' ·
CITY-COUNCIL: MEETING DATE: :June 6; 2000
Approval of Financial Participation Memorandum of Understanding (M.O.U.) with the San Francisco Bay Area Rapid Transit District
(BART) and the City of Pleasanton for the proposed West Dublin /
Pleasanton BART Station
Report Prepared by: Christopher L. Foss,
Economic Development Director
ATTACHMENTS:
RECOMMENDATION:
,1. Memorandum of Understanding (M.O.U.)
2. ~ Resolution
1. Receive staff presentation
2. Adopt resolution
FINANCIAL STATEMENT: This agreement requires the City of Dublin to pledge all of the sales,
prOPerty,. and transient'occupancy taxes generated specifically bY the proposed BART 'development for a
periokl offirn~ not to' ~ceed 17 .years.,-This agreement Will require no General Fund Subsidy.
DESCRIPTION:- " The cities of-Dublin and Pleasanton have-been working with
representativ6s of the San~Francisco Bay Area Rapid TranSit District (BART) for several years on the
development of a West Dublin / Pleasanton BART station. Those efforts took a step forward in early
1999 when BART entered into an agreement with Jones Lang LaSalle (LaSalle) for the development of a
mixed-me prOject and a proposed BART station at Golden Gate Avenue and 1-580. The BART Board, in
November of 1999,' authorized BART staff to complete negotiations with LaSalle and to negotiate
financial participation agreements with the cities of Dublin and Pleasanton to help finance the BART
station project.
To briefly recap, the $100 million West Dublin / Pleasanton BART station project includes a public and
private component. The public component, with its cost of $40 million, will include a new BART station
in the 1-580 median, two parking gar~_~es (Dublin - 600 spaces, and Pleasanton - 400 spaces), an
intermodal facility and pedestrian walkways from the station to ~ither side of 1-580. The private
component, at a cost of $60 milli°n, consists of approximately I60 market-rate residential units and a
240-room hotel in Dublin, and a 171,000 square foot office building in Pleasanton.
H/cc-forms/agdastmLdoc
COPIES TO:
ITEM NO.
MEMO~~ OF UNDERSTANDING: The proposed Memorandum of Understanding (M.O.U.)
-~(~ttachment 1) provides for a financial commitment of the parties (BART, Dublin, and Pleasanton) to
finance the West Dublin / Pleasanton BART station.: Th~ public' portion of the project (BART station,
parking structures, and Pedestri'ag~,:~:W~ys) Will be fitted by a $4Q,'million~bond issue through the
Association of Bay AreaGo~;emments '-(ABAG). Upon construction of the parking structure in Dublin,
the City of Dublin will lease the parking structure from BART for a rent equal to the city's revenues
(sales, property, and transient occupancy taxes) from the development (i.e. LaSalle) project. The City of
Dublin. will also enter, into an operating, agreement with BART under which BART will retain the
oPerating reSPonsibilities and liabilities for the Dublin parking garage.
It is important to note that, if the revenues created from the development project are insufficient in any
year to meet the required debt service, BART's General Fund is obligated to pay the entire debt service.
This a~eement Will require no additional city resources outside of the revenues generated specifically
from the development project.
The proposed M.O.U. also states that as soon as BART revenues (farebo/c, fare surcharges,' and other
sources identified by BART) are sufficient for two (2) consecutive years to finance the bond issue's debt
service, the lease and operating agreements with the city of Dublin will be terminated. This termination
shall not occur prior to the twelfth anniversa/y of the issuance of the bonds. The parking leases require
the City of Dublin to pay all project revenues to BART until the earlier of the seventeenth anniversary of
the issuance of the bonds or until the termination of the lease and operating agreements as defined above.
The proposed M.O.U. also requires BART to nsc any amounts received from City revenues and BART
rev~aues that-eXceed debt service .in. any: y'e, ar .'tO defease or-retire principal payments on the bonds
resulting in a reduction in annual debt service. In addition, any excess revenues available upon
t~ina,ti.'0n of the parking lease and °Perating agrement ~ be divided on a pro-rata basis among the
three agencies. 0BART, Dublin, _and Pleasanton) based on the aggregate amount of the contribution over
the, term of the agreement ' · . .
APProval Of the M.O.U. does' not commit.the City of Dublin t° approve the proposed residential or hotel
units proposed in the LaSalle project. LaSalle will process, the private component through the standard
planning process of the cities.
The M.O.U. is the conceptual outline of the financing structure. The City Council would have to approve
the lease and operating agreement at a later date.
ANALYSIS: The West Dublin / Pleasanton BART station will serve to revitalize
a portion of the City'S central business district through the inclusion of residential and hotel activity. This
project also serves as one of the focal points of the City's West Dublin BART Station specific planning
effort, and staff expects the project to relieve congestion at the East Dublin / Pleasanton BART station,
create new BART ridership, as well as stimulate new development oppommities around the station.
Staff recognizes that the contribution of the entire amount of the sales, property, and transient occupancy
taxes generated from the project area for a period of not less than 12 years and not more than 17 years will
be significant.-- Staff also reco~nizes that the ability to contribute those taxes comes solely from the
proposed private development as the current property owner (BART) currently pays no taxes on the land.
The City of Dublin; under the proposed M.O.U., will capture all of those project revenues upon
termination of the parking lease and op .crating agreement.
RECO1VI1YIENDATION: It is staff's recommendatiOn that the City~ Council adopt the proposed
resolution authorizing the Mayor to sign the Financial Participation M.O.U, with the San Francisco Bay
Area Rapid Transit District (BART) and the City of Pleasanton for the West Dublin / Pleasanton BART
Station.
MEMORANDuM OF UNDERSTANDING.
· This MemOrandum °fUnderstanding among the~ ~rancisco: Ba,' Azca RaPid
Transit District ("BART'), the City of Dublin ("Dublin") and the Ci~ 0f eleasanton
("Pleasanton") contains the commitment of the parties hereto to the financing of the BART
station at West Dublin/Pleasanton.
FACTS:
BART has entered into negotiations with Jones Lang LaSalle Project and
Development Management ("LaSalle") to develop property aroUnd the approved BART station
at West Dublin/Pleasanton (the "Station"). As part of the joint development, LaSalle, on behalf
of BART, will cause construction of the Station to be completed in the 1-580 highway median,
connected by pedes/a'ian bridges to two parking garages to be constructed, one located in
Pleasanton and one located in Dublin (collectively the parking garages, pedestrian bridges and
Station are referred to herein as, the "Station Project''), and LaSalle will develop other property
adjacent to the parking garages for commercial uses, which may include apartment units, a hotel
and/or office facilities in Dublin and an office and retail facility in Pleasanton (the "Development
Project"). BART currently owns the land on which the Development prOject and the parking
garages will be constructed and has or will obtain with CalTrans an agreement or.agreements to
develop the .Station in the freeway right-of-way~ As part of its c6ntribution to the joint
development, it is contemplated that LaSalle 'will prepay the ground leaSe rental for the
Development Project.--~ To further make financing of the stati0n Proj~ifeasiblei it is proposed
that Dublin and Pleasanton (the "Cities") contribute revenues generated from the Development
project, consisting solely Of City property taxes, City sales taxes and City transient occupancy
fees (the."City. Project Revenues"). BART is planning on using some combination of fare box
revenue generated from the Station, fare surcharges and parking charges from the parking
garages and/or other sources subsequently identified (the "BART Revenues"), as well as the
prepaid groUnd lease to complete the financing package. By entering into this Memorandum of
Understanding, the Cities are making no commitment to approve the Development Project.
PROPOSED FINANCING STRUCTURE:
In order to raise the necessary funds to construct the Station Project, a lease
~nancing with the Association of Bay Area Governments ("ABAG"), a joint powers authority, is
proposed. To obtain an issuer for the proposed debt, BARTwilljoin ABAG as an associate
member. ABAG will utilize the joint powers authority law to issue bonds to raise the necessary
funds (above the LaSalle prepaid rent) to build the Station Project. BART will lease to
Pleasanton the land on which the proposed parking garage in Pleasanton is to be constructed (the
"Pleasanton Lease") and Pleasanton will transfer its leasehold estate rout not the obligation to
pay rent) to A_BAG. BART will .lease the land underlying the proposed garage in Dublin and
assign BART's rights with respect to the Station location to ABAG. The Station Project will be
constructed with the bond proceeds and leased back by ABAG to BART. As rental payment for
the leaseback, BART will pay rent sufficient to pay principal of and interest on the bonds.
BART will in mm sublease the Dublin parking garage to Dublin (the "Dublin Lease"). As
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consideration for the Pleasanton Lease and the Dublin Lease, the Cities will respectively pay
BART rent equal to the City'Project Revenues. Projections anticipate that BART Revenues plus
the City Project Revenues will be sufficient to cover the debt service on the bonds without
requiring contribution fi.om BAKT's general fund. However, if revenues are insufficient in any
year, BART will be obligated to pay the debt service on the bonds from its general fund.
The lease structure assumes that A.BAG will enter into a trust agreement with a
trustee pursuant to which the bonds will be issued. In addition, ABAG will enter into a site lease
fi.om BART and a leaseback to BART, and BART will enter into the Pleasanton Lease and the
Dublin Lease and an operating agreement between Dublin and BART, pursuant to which
operating agreement BART will retain operating responsibilities and liability for the Dublin
parking garage. ABAG will pledge to the trustee under the trust agreement the rental payments
received fi.om BART for the leaseback of the Project.
AGREEMENT:
Dublin, Pleasanton and BART hereby agree to cooperate in a financing of the
Station Project. BART agrees, pursuant to the proposed financing structure and subject to the
direction of the BART Board following appropriate environmental review under the California
Environmental Quality Act (Public Resources Code § 21000 et. seq.), to cause the Station
Project to be built from the proceeds of the ABAG Bonds. BART pledges to use the BART
RevenUes, as determined by BART in good faith, to pay debt service on the BOndS;'.?ART als0
agrees in the evem that such BART RevenUes are Sufficient on'their own for a period,, of two
consecutive years. to pay for debt service on the Outstanding Station Project bonds that BART
and the Cities will termi6ate their respective ieaSes, and the operating agreement; provided that
such te~ti°n S ~ha!... 1 n0t~ oCCurprior to' the twelfth anniversary of the issuance of the bonds.
"~ Dublin agrees t° enter'into a lease with BART to lease the parking garage located
in Dublin fi.om BART and to pay as rental for such lease all ad valorem property tax revenues
received by Dublin with respect to the Development PropertY,, any sales tax revenues received by
Dublin in connection with sales originating in the Development Property and any transient
occupancy tax revenues derived from any hotel operations on the Development Project and
recelved by Dublin. All such revenues shall be paid to BART pursuant to the terms of the
Dublin Lease until the earlier of the seventeenth anniversary of the issuance of the bonds or the
termination of the Dublin Lease by BART and Dublin pursuant to the prior paragraph.
Pleasanton agrees to enter into a lease with BART to lease BART land located in
Pleasanton and to pay as.rental for such lease all ad valorem property tax revenues received by
Pleasanton with respect to the Developmem Property and sales tax revenues received by
Pleasanton in connection with sales originating in the Development Property and received by
Pleasanton. Ali such revenue shall be paid to BART pursuant to the terms of the Pleasanton
Lease until the earlier of the seventeenth anniversary of the issuance of the bonds or the
termination of the Pleasanton Lease by BART and Pleasanton in accordance with the first
paragraph under this heading. ~ ·
Dublin and BART agree to enter into an operating agreement or agreements
pursuant to which BART will assme responsibility and liability for operating and maintaining
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the Dublin parking garage.. BART will have all respOnsibility and liability for operating and
maintaining the par. king garage located in Pleasanton under the leaseback from ABAG.
BART agrees that any mounts received by BART fi:om the City Revenues and
BART Revenues that eXceed debt service in any year will be used to defease or retire principal
payments'~on the bonds resulting in a reduction in annual debt service. Any excess City
Revenues and BART Revenues available upon the date of termination of the Dublin Lease and
the Pleasanton Lease (the "City Leases") and not used to defease or retire bonds on or prior to
the date of termination shall be divided pro rata among BART, Dublin and Pleasanton based on
the respective aggregate amounts that each such agency contributed to the payment of debt
service on the bonds. Prior to termination of the City Leases, on an annual basis BART shall
provide to the Cities a cash flow statement setting forth for the prior fiscal year the BART
Revenues, the City Project Revenues, the debt service paid and principal amount of Bonds
outstanding and any accumulated deficit allocable to the financing.
For the purposes °fthis Memorandum it is assumed that the Bonds will be fixed
rate bonds with a thirty-year level amortization. It is understood that the interest rates and debt
service and final structure of the bond issue will be determined by BART at the time the Bonds
are sold. If BART notifies the Cities that it is unable to conclude an acceptable a~eement with
LaSalle, or complete appropriate environmental review or determines that the financing is not
feasible for any reason, the Bonds will not be issued and this Memorandum of Understanding
will be null and void.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their authorized representatives as of this __ day of ,2000.
SAN FRANCISCO BAY AREA RAPID TRANSIT
DISTRICT
By:
Title:
CITY OF DUBLIN
By:
Title:
CITY OF PLEASANTON
By:
Title:
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RESOLUTION NO.- 2000
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING A MEMORANDUM OF UNDERSTANDING BETWEEN'
THE CITY OF DUBLIN AND THE SAN FRANCISCO BAY AREA
RAPID TRANSIT DISTRICT (BART) REGARDING FINANCING OF THE
WEST DUBLIN / PLEASANTON BART STATION
~rI-IEREAS, The San Francisco Bay Area Rapid Transit District (BART), in partnership with
Jones Lang LaSalle, proposes to develop property around the approved BART Station at West Dublin /
Pleasanton;
WHEREAS, the mixed-used development is. proposed to include hotel and residential units in
Dublin and an office building in Pleasanton, as well as a BART station and attendant public parking
structures in the respective cities;
WHEREAS, the City of Dublin agrees to cooperate in the funding of the Station project and the
Financial Participation Memorandum. of Understanding (M.O.U.) is required to make. the project
financing feasible. The City of Dublin agrees to enter into a lease with BART to lease the parking garage
located in Dublin from BART and will require the City. of Dublin to commit the revenu~es generated t~om
the Development project.(consisting solely of City property taxes, City sales taxes, and City transient
occupancy taxes) to lease the parking structure.
NOw, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin approves
the attached Memorandum of Understanding and authorizes and directs the Mayor to sign the
Memorandum of Understanding. :
PASSED, APPROVED AND ADOPTED this
~dayof ,2000.
AYES:,
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Mayor
City Clerk