Sunbow Community Benefit Agreement Approved – January 2020

On Tuesday, January 7, 2020 Chula Vista City Council unanimously approved a Community Benefit Agreement (“CBA”) between the City and ACI Sunbow, LLC (“Sunbow”).  The agreement includes provisions that Sunbow will provide $8 million, over time, in community benefit funds to assist the City in planning job-creating development projects in the City’s University Innovation District (UID) or along the State Highway 125 corridor.  Sunbow also agrees to contribute $15 million in park fees to acquire and develop parks within the City.  The City agrees to timely process Sunbow’s application for General Plan Amendment, Site Plan, Tentative Map and environmental review for a 725-unit residential project on approximately 54 acres of Sunbow Planning Area 23.  The approval of the CBA does not vest any development approvals, which remain to be approved at the discretion of the City’s Planning Commission and City Council.

From 2003 to 2014, several attempts were made to rezone the subject property from its current Industrial land use and zoning designation to Residential.  Industrial use of the property has been deemed to be infeasible due to high land development costs and limited industrial demand in this area.  The property was marketed to industrial users for many years, with no bona fide buyer interest at a reasonable value.  City staff rejected all efforts in the past to rezone the property from industrial use, citing its need to retain job-creating land for the future.

In March 2019, ACI Sunbow, LLC submitted a General Plan Initiation Request application to change the property’s land use from IL (Limited Industrial) to Mixed-Use (Commercial/Residential).  The submittal included approximately 8 acres of commercial land and approximately 46 acres of medium-density residential land.  Consultant reports indicated that an 8-acre commercial development would create more and better-paying jobs than a much larger industrial project onsite.  After several months, City staff eventually informed Sunbow principals that it would recommend denial of the Initiation Request.

In September 2019, principals of Sunbow met with senior city staff to resolve their impasse.  Recognizing that an isolated commercial site within the plan was not an optimal land use, both parties agreed that Sunbow would provide a significant cash contribution in lieu of the commercial site.  The commercial site would be processed as residential, and the contribution would be used to assist the City in planning or developing job-creating projects in the more appropriate commercial hubs of the UID or along State Highway 125.  This event was a threshold event that generated the commitment from City Staff to proceed with a residential project within Planning Area 23.  This understanding was further negotiated and confirmed with the eventual approval of the CBA in January 2020.

The public benefits of the CBA are numerous:

  • If the residential project is ultimately approved by City Council, Sunbow will provide $8 million to the City, over time, to assist in the planning and development of job-creating projects in appropriate areas.
  • Sunbow will also contribute $15 million in park fees to acquire and develop parks within the City.
  • Residential use within Sunbow Planning Area 23 is superior land use. A residential project at Sunbow is appropriate since surrounding uses are mostly residential.
  • Residential use will provide for attainable housing within San Diego County. Residential homes are expected to be available at pricing levels below $500,000, well below the median-priced home in the county.
  • The project will provide additional patrons for the area’s under-utilized restaurants and retail establishments, including Otay Ranch Town Center.
  • The project is expected to be fiscally positive to the City of Chula Vista, and will not be a drain on the City budget.
  • Importantly, the residential project will be well-landscaped and aesthetically-pleasing compared to the existing land use. Current allowed land uses include concrete tilt-up buildings and automobile salvage yards, potentially generating heavy truck traffic. Industrial land use is not appropriate along the Scenic Corridor of Olympic Parkway.
  • Impacts from Otay Landfill are expected to be minimal, since both prevailing winds and ground water flow are in the opposite direction from Sunbow. Additionally, Otay Landfill is scheduled to be closed in 2027.  Once closed, the landfill will be capped, contoured and landscaped as open space.

City Staff has recognized the benefit of encouraging the development of job-creating commercial projects in the UID and State Highway 125 corridor.  The creation of high-paying jobs is certainly more appropriate in these areas.

The proposed residential project at Sunbow Planning Area 23 has a long way to go.  City Council will have the opportunity to review the General Plan Amendment, Site Plan, Tentative Map and environmental review of the residential project.  These approvals could take more than a year to obtain.  Approval of the CBA by City Council and an excellent working relationship with senior City Staff are pivotal recent developments in this process.

ACI Sunbow, LLC is managed by Ayres Land Company, Inc.