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Taxable bonds endorsed as method to finance Pacific View

ENCINITAS — An Encinitas City Council subcommittee has endorsed taxable bonds as the method to finance the $10 million purchase of the Pacific View Elementary School site.

But the city will face another hurdle as it starts the process of determining what to do with the land over the next few years — a zoning code that restricts many of the activities preferred by local stakeholders.

The two-member committee composed of Lisa Shaffer and Teresa Barth said taxable bonds would provide more flexibility on what could be done on the property, and they would be willing to pay a bit more for that flexibility than deal with the restrictions that tax-exempt status places on the property and the pitfalls if they run afoul of those laws.

“Either we come up with the financing or we lose the deal,” Shaffer said. “I say we go with taxable bonds and let’s get on to doing something with the property.”

The subcommittee will make the recommendation to the full City Council at the Oct. 22 meeting.

Shaffer and Barth arrived at their decision during a Monday afternoon meeting attended by nearly 40 people — mostly stakeholders in the arts community — at which time the city’s contract bond counsel told the audience that the spread in interest rates between taxable and tax-exempt bonds was smaller than usual, and both were near historic lows.

“Rates are as low as they have ever been,” said Kim Byrens, a bond counsel with Best Best & Krieger, the firm contracted to provide the services to the city.

Most of the meeting’s discussion revolved around the interim uses for the land, which many local visual and performing arts groups have envisioned the city leasing out space to the groups for their usage.

However, the property’s zoning designation — public and semipublic use — explicitly prohibits some of those uses, including art galleries, music conservatories, dance studios and pottery studios. Other uses, such as a theater, museum, parks and public schools are allowed without permits, and other uses such as farmer’s markets, surf shops, private schools, open-air theaters and recycling facilities would require either a minor- or major-use permit.

City officials said this was a byproduct of a zoning code that has not been updated since the city’s incorporation, and was designed to limit what could be done on public property.

Barth and Shaffer said the city could try to “push the envelope” on some of the definitions to allow certain uses to occur on a limited basis, but they and city staff warned that while there was some latitude, activities prohibited under the current zoning would not be allowed.

In order for those activities to happen, the city would have to initiate a zone-change, which would trigger a public election as required by Proposition A, the earliest available election time being 2018.

Ultimately, the audience agreed, this would have to be done to accomplish the long-term goal for the property, which many have envisioned being a state-of-the-art performing arts facility.

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3 comments

Xavier October 6, 2014 at 11:50 pm

Oh what a tangled web this whole thing has become. But not for the reckless Council majority who just waived off buying it for a price 3 times the appraised value and taking on $10 million of new debt to buy the property, brushed off the inspection report that showed serious problems with the property, gave short shrift to loosing 10% of the property for a private road, waived their wands over paying higher interest for taxable bonds, and now in the face of the reality that they can’t use the property for much of anything until it is rezoned, they just keep on trucking — right towards the cliff.

Changing the majority in November is an imperative for this City’s future. We need strong leaders who will jettison this project before it is too late.

Encinitas4Real October 7, 2014 at 10:54 am

Why wait till 2018?! Why not with GPU in 2016? And it seems no one whether CC or staff has a clue what they’re doing here! Hope they’ve not been having unreported lunches and dinners etc with bonding agencies!

Aaron Burgin October 7, 2014 at 11:30 am

City staff and council alluded that time would be a concern because the Housing Element (General Plan Update isn’t on the ballot) consuming much of the time headed into the 2016 election, thus 2018 would be the likely feasible opportunity.

Comments are closed.