Report to Mayor and City Council
Tuesday, September 03, 2024
Ordinance Second Reading
SUBJECT:
Title
SECOND READING OF ORDINANCE NO. 24-2412, AN ORDINANCE OF CITY COUNCIL OF THE CITY OF CARSON, CALIFORNIA, APPROVING DEVELOPMENT AGREEMENT NO. 32-22 BETWEEN THE CITY OF CARSON AND AVOCET ENERGY STORAGE, LLC., AND APPROVING MITIGATED NEGATIVE DECLARATION AND MITIGATION MONITORING REPORTING PROGRAM FOR A PROPOSED BATTERY ENERGY STORAGE SYSTEM (BESS) PROJECT AT 23320 ALAMEDA STREET (APN 7315-020-022) (CITY COUNCIL)
Body
I. SUMMARY
On August 6, 2024 under Item No. 34 of Council Agenda, City Council voted 5-0 to introduce Ordinance No. 24-2412 (Exhibit No.1).
II. RECOMMENDATION
Recommendation
TAKE the following action:
1. CONDUCT a Second Reading by title only and with further reading waived, and ADOPT Ordinance No. 24-2412, “AN UNCODIFIED ORDINANCE OF THE CITY OF CARSON, CALIFORNIA: (1) ADOPTING MITIGATED NEGATIVE DECLARATION AND MITIGATION MONITORING AND REPORTING PROGRAM WITH RESPECT TO APPROVAL OF DEVELOPMENT AGREEMENT NO. 32-22; AND (2) APPROVING DEVELOPMENT AGREEMENT NO. 32-22 BETWEEN THE CITY OF CARSON AND AVOCET ENERGY STORAGE, LLC, FOR A PROPOSED BATTERY ENERGY STORAGE SYSTEM (BESS) PROJECT AT 23320 ALAMEDA STREET (APN 7315-020-022)”;
2. AUTHORIZE the Mayor to execute Development Agreement No. 32-22 (Exhibit “B” to Ordinance No. 24-2412) following approval as to form by the City Attorney; AND
3. APPROVE the 25-year Transmission Easement Agreement attached as Exhibit “D” to Development Agreement No. 32-22, and authorize the Mayor to execute the Transmission Easement Agreement following approval as to form by the City Attorney.
Body
III. ALTERNATIVES
TAKE any action the City Council deems appropriate.
IV. BACKGROUND
On August 6, 2024, the City Council introduced Ordinance No. 24-2412 (Exhibit No. 1 attached) approving Development Agreement No. 32-22 and Transmission Easement Agreement between the City of Carson and Avocet Energy Storage LLC., and approved the Mitigated Negative Declaration and Mitigation Monitoring Reporting Program for the Avocet Battery Energy Storage System (BESS) project at 23320 Alameda Street (APN 7315-020-022).
V. FISCAL IMPACT
• CFD. In lieu of annexing the property into the Citywide CFD and based on an analysis of the Citywide CFD services needed for the project and the project’s impacts on those services, the developer will pay the City a lump sum amount of $137,825 for the full acreage of the property (6.96 acres) at the Maximum Annual Special Tax Rate for the “Industrial - All Other” Land Use Category ($630.17 per acre for FY 2024-25). Payment is due prior to issuance of building permits and the amount is subject to incremental annual increases if not paid during FY 24-25.
• DIF. DIF payment to the City, if paid during FY 2024-25, in the lump sum amount of $372,227.20, calculated at $3.56 per square foot for all square footage of the battery enclosures (approximately 114,920 square feet), inclusive of a credit of $36,888 calculated at $3.18 per square foot at 11,600 square feet for demolition of the existing 11,600 square foot building on the property. Payments shall be made consistent with and in satisfaction of the City’s IDIF ordinance. Payment is due prior to issuance of building permits, and the amount is subject to (i) incremental annual increases based on CPI if not paid during FY 24-25, and (ii) adjustment based on any changes made to the project gross square footage of the battery enclosures.
• Battery Fee. The Development Agreement provides for the Developer to pay the City a Battery Fee in an amount that could be anywhere from $100,000 to $3,067,400, depending on whether and to what extent the project batteries are purchased in a way that generates sales tax revenue (including applicable Bradley Burns sales and use tax and City transaction and use tax) for the City. If the project battery purchase generates no sales tax revenue for the City, the Battery Fee amount will be the maximum $3,067,400 amount. For each dollar of sales tax revenue that the project battery purchase actually generates for the City, the applicable Battery Fee amount will be reduced by one corresponding dollar, down to the minimum amount of $100,000. For example, if the project battery purchase generates $3,067,400 in sales tax revenue for the City (which is anticipated based on the projected cost of project batteries), the City would receive an applicable Battery Fee amount of $100,000 in addition to retaining the $3,067,400 in sales tax revenue.
VI. EXHIBITS
1. Ordinance No. 24-2412 - Development Agreement and MND/MMRP (pgs. 4-76)
a. Legal Description
b. Development Agreement (the Transmission Easement Agreement is attached as “Exhibit D” of the Development Agreement)
Prepared by: McKina Alexander, Senior Planner and Saied Naaseh, Community Development Director