MEETING DATE:
APRIL 28, 2026
SUBJECT:
Title
ORDINANCE NO. 2026-1578 AND RESOLUTION NOS. 2026-9581 & 2026-9582 - PUBLIC HEARING AND SPECIAL ELECTION TO ANNEX TERRITORY AS ANNEXATION NO. 161 AND DESIGNATE IMPROVEMENT AREA NO. F-59 OF COMMUNITY FACILITIES DISTRICT NO. 98-02 (LIGHTING, LANDSCAPING, OPEN SPACE, AND PRESERVE MAINTENANCE), CITY OF SAN MARCOS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND TAKING OTHER ACTIONS RELATED THERETO
Body
Recommendation
Recommendation
1. CONDUCT the public hearing;
2. ADOPT a resolution of the City Council of the City of San Marcos, California acting as the legislative body of Community Facilities District No. 98-02 (Lighting, Landscaping, Open Space, and Preserve Maintenance), City of San Marcos, County of San Diego, State of California authorizing annexation of territory to such community facilities and designation of Improvement Area No. F-59 thereto, and calling a special election and submitting to the voters of Improvement Area No. F-59 propositions regarding the annual levy of special taxes within the improvement area to pay the costs of certain public services and establishing an appropriations limit therefor;
3. CONDUCT a special election;
4. ADOPT a resolution of the City Council of the City of San Marcos, California declaring the results of the consolidated special elections within Improvement Area No. F-59 of Community Facilities District No. 98-02 (Lighting, Landscaping, Open Space, and Preserve Maintenance), City of San Marcos, County of San Diego, State of California; and
5. CONDUCT first reading by title only an ordinance of the City Council of the City of San Marcos, California, acting as the legislative body of Improvement Area No. F-59 of Community Facilities District No. 98-02 (Lighting, Landscaping, Open Space, and Preserve Maintenance), City of San Marcos, County of San Diego, State of California, authorizing the levy of special taxes in such community facilities district..
Body
Board or Commission Action
On October 24, 2023, the City Council approved the entitlements for the AOA West (Paloma Townhomes) project. City Council’s approvals included a Specific Plan (SP22-0003), General Plan Amendment (GPA22-0001), Rezone (R22-0001), Multifamily Site Development Plan (MFSDP22-0002), Tentative Subdivision Map (TSM22-0002), Conditional Use Permit (CUP22-0002), Tentative Parcel Map (TPM22-0001), and Site Development Plan (SDP22-0003). On November 14, 2023, the City Council adopted Ordinance 2023-1537, approving the Specific Plan (SP22-0003).
On December 12, 2023, the City Council approved the entitlements for the Restaurant Row project. City Council’s approvals included a Specific Plan (SP22-0004), General Plan Amendment (GPA22-0002), Rezone (R22-0002), Tentative Subdivision Map (TSM22-0003), and Site Development Plans (SDP22-0006 and SDP23 -0004). On January 9, 2024, the City Council adopted Ordinance 2023-1540, approving the Specific Plan (SP22-0004). On February 4, 2026, the City administratively approved a Substantial Conformance (SC25-0004).
On December 2, 2024, the Planning Commission approved the entitlements for the Sears project. The Planning Commission approvals included Site Development Plan (SDP24-0006), Tentative Subdivision Map (TSM24-0002), and Conditional Use Permit (CUP24-0002).
On March 24, 2026 the City Council approved the resolution of intention to annex territory and designate Improvement Area No. F-59 of Community Facilities District No. 98-02 (Lighting, Landscaping, Open Space, and Preserve Maintenance), City of San Marcos, County of San Diego, State of California.
Executive Summary
This item is the second of two City Council actions to conduct proceedings to annex certain territory to be known as Annexation No. 161 (the “Annexation”) and to designate Improvement Area No. F-59 (“IA No. F-59”) of Community Facilities District No. 98-02 (Lighting, Landscaping, Open Space, and Preserve Maintenance), City of San Marcos, County of San Diego, State of California (the “CFD No. 98-02”). On March 24, 2026 the City Council approved the resolution of intention to conduct these proceedings and scheduled the public hearing and special election this evening. All notice and election materials have been provided to the property owners. The property owners and City Clerk have consented to holding the special election immediately following the public hearing.
Discussion
CFD No. 98-02 was formed pursuant to the Mello-Roos Community Facilities Act of 1982, commencing with California Government Code section 53311 et seq. (the “Act”) and the City of San Marcos Community Facilities District Procedural Ordinance enacted pursuant to the powers reserved by the City of San Marcos under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California to provide funding necessary for the maintenance of the City’s lighting, landscaping, parks, medians, open space, and preserve space. Special improvement areas are formed as separate zones within CFD No. 98-02 to provide special tax funding necessary for the maintenance of development improvements and impacts above and beyond what is normally maintained by the City.
The Annexation is proposed to include three project sites known as the AOA West, Restaurant Row, and Sears. The conditions of development approval require that each project annex into CFD No. 98-02 and form a special improvement area for purposes of funding the costs of maintenance required for each project. This proceeding meets the development condition.
The AOA West project proposes to develop the 4.99-acre site located west of the intersection of Grand Ave. and Linda Vista Dr. The project proposes to develop 102 multi-family residential condominiums. The property owner is Paloma Townhomes, LLC.
The Restaurant Row project proposes to develop the 9.62-acre site located at 1020 W. San Marcos Blvd. (northwest corner of W. San Marcos Blvd and Via Vera Cruz). The project proposes to develop 190 multi-family residential condominiums and a 10,400 square foot mixed-use commercial space. The property owner is SB-HS Lot Option Pool 02, L.P.
The Sears project proposes to develop the 2.72-acre site located at 1100 W. San Marcos Blvd. The project proposes to develop 71 multi-family residential condominiums, 2,916 square feet of mixed-use commercial space, and 2,981 square feet of residential amenity space. The property owner is SB-HS Lot Option Pool 01, L.P.
It is also contemplated that some property will require detachment from the City’s existing community facilities districts and assessment districts. The required detachment proceedings will be completed, as applicable, for each property following the successful annexation to, and designation of IA No. F-59, as a separate proceeding or proceedings as required.
The map of the proposed boundaries of IA No. F-59 and Annexation are attached as Attachment A.
City staff has determined that creating IA No. F-59 for new development, and potential redevelopment of certain properties, provides a benefit to the property owners by consolidating the maintenance services into a single district rather than utilizing multiple existing special districts, each of which provide only partial maintenance of the required services. IA No. F-59 also provides a benefit to the City by reducing the administrative burden of having to administer multiple districts to provide the combined services required to be maintained by the properties.
To complete the annexation proceedings, the City Council must first conduct the public hearing and determine if there is a majority protest of the property owners subject to the Annexation. If there is a majority protest the City Council must abandon the proceedings and cannot take any further action for a period of at least one year. If there is no majority protest the City Council may proceed to complete the proceedings and conduct the special election. Following the public hearing the City Council may consider and approve the attached Resolution Calling the Election (Attachment B). The City Council will then conduct the special election. Following the special election the City Council will consider and adopt a Resolution Declaring the Election Results (Attachment C). Finally, the City Council will consider and conduct a first reading, by title only, of the Ordinance Authorizing the Levy of Special Taxes (Attachment D).
It is expected development in the future will be annexed to IA No. F-59. To authorize future annexation proceedings the City Council will also consider an additional item this evening to authorize future annexation to IA No. F-59 as part of a concurrent proceeding.
By conducting the public hearing and special election this evening the City Council will complete the Annexation and designate IA No. F-59.
The special taxes proposed for IA No. F-59 will be levied at the rates shown in the Rate and Method of Apportionment (“RMA”) attached to this staff report (Attachment E). The taxes levied ensure sufficient funding to maintain the proposed services into perpetuity. The proposed services to be maintained by IA No. F-59 are included in Exhibit “A” of the Resolution of Intention adopted by the City Council on March 24, 2026.
Environmental Review
The proposed annexation is not a project subject to the California Environmental Quality Act (CEQA) as per Section 15378 of the State CEQA Guidelines, as it is an organizational activity of government and there is no potential to result in a physical change in the environment. Even if the annexation can be considered a project subject to CEQA, it is categorically exempt per State CEQA Guidelines Section 15301 (Existing Facilities), as it does not involve changes to approved development. The annexation is also categorically exempt per State CEQA Guidelines Section 15319 (Annexations), as the properties contain private structures developed to existing zoning and utilities to the sites will only have capacity to serve the existing structures. Finally, the annexation is exempt per Section 15061(b)(3) because it can be seen with certainty that there is no possibility it would have a significant effect on the environment. None of the exceptions to the categorical exemptions in State CEQA Guidelines Section 15300.2 apply to the annexation.
Fiscal Impact
The maximum special tax for IA No. F-59 for Fiscal Year 2025-26 is $651.67 per equivalent dwelling unit and $1,726.93 per acre for non-residential property. The estimated total annual maximum special tax to be collected at full development at the current special tax rates is $238,140 for all three developments. The maximum special tax is the maximum amount that can be levied in any given tax year. The maximum special tax is escalated every fiscal year based on the Consumer Price Index or 2.0%, whichever is greater. Details and the break-down of special taxes have been provided within the RMA.
Attachments
Attachment A: IA No. F-59 Boundary Map
Attachment B: Resolution Calling Election
Attachment C: Resolution Declaring Election Results
Attachment D: Ordinance
Attachment E: Rate and Method of Apportionment
Prepared by: Song LeBaron, Sr. Management Analyst
Submitted by: Song LeBaron, Sr. Management Analyst
Reviewed by: Isaac Etchamendy, Director of Development Services/City Engineer
Approved by: Michelle Bender, City Manager