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City Clerk’s Office Item # S-1
BACKGROUND PAPER FOR PROPOSED
EMERGENCY ORDINANCE
COUNCIL MEETING DATE: September 14, 2020
TO: President Dennis E. Flores and Members of City Council
CC: Nicholas A. Gradisar, Mayor
VIA: Brenda Armijo, City Clerk
FROM: Scott Hobson, Acting Director of Planning and Community Development
SUBJECT: AN EMERGENCY ORDINANCE APPROVING A SOLAR ENERGY SITE LEASE
AND EASEMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A
COLORADO MUNICIPAL CORPORATION AND BIGHORN SOLAR 1, LLC, A
DELAWARE LIMITED LIABILITY COMPANY RELATING TO THE LEASE OF
UNIMPROVED CITY-OWNED PROPERTY FOR THE DEVELOPMENT OF A
SOLAR ENERGY SITE AND AUTHORIZING THE MAYOR TO EXECUTE SAID
AGREEMENT
SUMMARY:
Attached is an Emergency Ordinance approving and authorizing the Mayor to sign a Solar Energy
Site Lease and Easement Agreement with Bighorn Solar 1, LLC for the development and
operation of a solar generating facility on up to 150-acres of City-owned property in the St. Charles
Industrial Park south of the Comanche Power Plant.
PREVIOUS COUNCIL ACTION:
On July 27, 2020, City Council approved an Option Agreement by Ordinance No. 9753 for a solar
energy site with Bighorn Solar 1, LLC relating to the lease of unimproved City-owned property for
the development of a solar energy project.
BACKGROUND:
On August 13, 2019, Public Service Company of Colorado entered into a Solar Purchase Power
Agreement with CF&I Steel, LP to supply electric energy generated by photovoltaic solar
collectors. Bighorn Solar 1, LLC entered into an Option Agreement with the City of Pueblo relating
to the future lease of up to 150 acres of City-owned property in the St. Charles Industrial Park,
south of the Comanche Power Plant. Bighorn Solar 1, LLC has exercised its option to lease the
property owned by the City to place solar energy generation facilities in order to meet the solar
power commitment to CF&I Steel. This Emergency Ordinance approves the Lease and Easement
Agreement with Bighorn Solar 1, LLC
FINANCIAL IMPLICATIONS:
Commencing on the Effective Date of this Lease and continuing throughout the Term, Bighorn
Solar 1, LLC will pay the City an annual rental payment from the Effective Date of this Lease,
equal to $750.00 per acre of the Site or $5,200.00 per MWac of the installed capacity on the Site
only (specifically excluding any installed capacity on adjacent property not owned by Landlord
which may be considered part of the Generating Facility), whichever is greater. On each
anniversary of the Effective Date, the Rent shall be increased in an amount equal to one and one-
half percent (1.5%) increase from the previous twelve (12) months rent. The lease will be effective
for a twenty-five (25) year period following the Commercial Operations Date (the “Initial Term”).
Bighorn Solar 1, LLC shall have the option to extend the Initial Term for four (4) additional five (5)
year periods (each a “Renewal Term”) and together with the Initial Term. In addition, Bighorn
Solar 1, LLC will compensate the City with a one-time payment of $4500.00 per acre for the
acreage comprising the Access Easement.
Based on the calculation of 150 acres utilized at an initial annual cost of $750 per acre with an
escalation rate of 1.5% per year, the City would receive $3,382,090 over the 25-year term. If
Bighorn fully develops their proposed 24 Mw solar facility on the 150 acres and pays a lease fee
per Mw of $5,200, the lease income would potentially be 10.9% greater than the per acre estimate.
BOARD/COMMISSION RECOMMENDATION:
None.
STAKEHOLDER PROCESS:
None.
ALTERNATIVES:
If this Ordinance is not approved, the City property will remain unimproved and the City will not
be in compliance with the provisions of the Option Agreement entered into with Bighorn Solar 1,
LLC on July 27, 2020.
RECOMMENDATIONS:
Approve the Emergency Ordinance.
Attachments:
Proposed Emergency Ordinance
Solar Lease Agreement and Attachments
ORDINANCE NO. 9780
AN EMERGENCY ORDINANCE APPROVING A SOLAR
ENERGY SITE LEASE AND EASEMENT AGREEMENT
BETWEEN THE CITY OF PUEBLO, A COLORADO
MUNICIPAL CORPORATION AND BIGHORN SOLAR 1,
LLC, A DELAWARE LIMITED LIABILITY COMPANY
RELATING TO THE LEASE OF UNIMPROVED CITY-
OWNED PROPERTY FOR THE DEVELOPMENT OF A
SOLAR GENERATING FACILITY AND AUTHORIZING THE
MAYOR TO EXECUTE SAID AGREEMENT
WHEREAS, On July 27, 2020, through Ordinance No. 9753, City Council approved
an Option Agreement for a solar energy site with Bighorn Solar 1, LLC relating to the
lease of up to 150 acres of unimproved City-owned property for the development of a
solar energy project; and,
WHEREAS, Bighorn Solar 1, LLC has exercised its option to enter into a lease and
easement agreement with the City of Pueblo under the terms and conditions of the Solar
Energy Site Lease and Easement Agreement; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Solar Energy Site Lease and Easement Agreement (“Lease Agreement”)
between the City of Pueblo, a Colorado municipal corporation and Bighorn Solar 1, LLC,
a Delaware limited liability company, dated September 14, 2020, a copy of which is
attached hereto including all associated documents, having been approved as to form by
the City Attorney, is hereby approved. The Mayor is authorized to execute and deliver
said Lease Agreement in the name of the City and the City Clerk is directed to affix the
seal of the City thereto and attest same.
SECTION 2.
The City Council finds that this Ordinance qualifies for treatment as an Emergency
Ordinance pursuant to City Charter because of the urgency to expedite the issuance of a
building permit prior to September 18, 2020 for the solar infrastructure to meet the solar
power commitment to CF&I Steel required for the implementation of the EVRAZ
steelmaking expansion project.
SECTION 3.
The officers and staff of the City are authorized and directed to perform any and
all acts consistent with this Emergency Ordinance to implement the policies and
procedures described herein.
SECTION 4.
This Ordinance shall become effective immediately upon final action by the Mayor
and City Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on September 14, 2020.
Final adoption of Ordinance by City Council on September 14, 2020.
President of City Council
Action by the Mayor:
☒ Approved on September 17, 2020 .
□ Disapproved on based on the following objections:
_
Mayor
Action by City Council After Disapproval by the Mayor:
□ Council did not act to override the Mayor's veto.
□ Ordinance re-adopted on a vote of , on
□ Council action on _______ failed to override the Mayor’s veto.
President of City Council
ATTEST
City Clerk