ENCINITAS — The city of Encinitas agreed Wednesday to issue $5.7 million in bonds to cover the purchase of two parcels of land in Leucadia known as Surfer’s Point, which will be preserved as open space.
City leaders agreed in August to purchase the 1.43 acres of land at the northeast corner of Coast Highway 101 and La Costa Avenue for $6 million, mainly using funds from the city’s contingency reserves. The lease revenue bonds approved this week will reimburse the contingency fund and around $247,000 in Open Space Acquisition Funds.
The debt service payments will have an interest rate of 4.43% over 30 years and include payments of around $347,000 annually. Urban Futures Inc. Director Brendan Kfoury said they will go to market for potential investors next week.
Despite their name, the lease revenue bonds do not involve leasing the land to anybody, noted Encinitas Mayor Tony Kranz. Instead, the city is entering a lease with the Encinitas Public Financing Authority — a joint powers authority made up of the city, the Cardiff Sanitation District, Encinitas Fire Protection District, Encinitas Sanitation District and the San Dieguito Water District —and the lease payments will pay off the bond.
The city used the same kinds of bonds with the $10 million purchase of the Pacific View School property in 2014.
“It isn’t like we’re going to lease the property to somebody and then expect a payment on that,” Kranz said.
Before the city’s purchase, the land overlooking the Batiquitos Lagoon was eyed for potential development for nearly two decades, with the owner planning to develop a timeshare hotel that never came to fruition.
Kranz said the next step for Surfer’s Point will be a city workshop to determine future land uses.
