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HomeMy WebLinkAbout05-02-1985 Minutes City of San Bernardino, California . May 2, 19B5 This is the time and place set for an Adjourned Regular Meeting of the Mayor and Common Council of the City of San Bernardino at the Adjourned Regular Meeting held on Monday, April 29, 19B5, at 11:00 a.m. in the Board Room of the Redevelopment Agency, Third Floor, City Hall, 300 North "D" Street, San Bernardino, California. The City Clerk has caused to be posted the Order of Adjournment of said meeting held on Monday, April 29; 19B5, at 11:00 a.m., and has on file in the Office of the City Clerk an affidavit of said posting together with a copy of said Order which was posted on Thursday, April 30, 19B5, at the hour of 9:30 a.m. in the Redevelopment Agency Board Room, Third Floor, City Hall, 300 North "D" Street, San Bernardino, California. . The Adjourned Regular Meeting of the Mayor and Common Council of the City of San Bernardino was called to order by Mayor Pro Tempore Reilly at 9:04 a.m., May 2, 19B5, in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. INVOCATION The Invocation was given by Olen Jones, Jr., Immanuel Baptist Church. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Council Member Quiel. ROLL CALL Roll Call was taken by the Deputy City Clerk with the following being present: Mayor Pro Tempore Reilly; Council Members Castaneda, Reilly, Hernandez, Marks, Quiel, Strickler; Deputy City Attorney Hopkins, Deputy City Clerk Reese, City Administrator Matzer. Absent: Mayor Holcomb; Council Member Frazier. . READING AND WAIVING OF RESOLUTIONS The Deputy City Clerk read the title of all the resolutions. Council Member Marks made a motion, seconded by Council Member Castaneda and unanimously carried, that further reading of the resolutions be waived. RES. B5~160 - RESOLUTION OF THE CITY OF SAN BERNARD I NO AWARD I NG A CONTRACT FOR THE FURNISHING AND DELIVERING OF LIBRARY SEAT- ING IN ACCORDANCE WITH SPECIFICATION F~B5-lB. (BURT C. GENTLE CO.) Council Member Marks made a motion, seconded by Council Member Reilly,that said resolution be adopted. Resolution No. B5-160 was adopted by the following vote: Ayes: Council Members Castaneda, Reilly, Hernandez, Marks, Quiel, Strickler. Noes: None. Absent: Council Member Frazier. . . RES. 85-161 - RESOLUTION OF THE CITY OF SAN BERNARDINO AWARDING A CONTRACT TO BURT C. GENTLE CO. FOR THE FURL'IISHING AND DELIVER- ING OF LIBRARY FURNISHINGS AND EQUIPMENT IN ACCORDANCE WITH SPECIFICATION NO. F-85-4. Council Member Marks made a motion, seconded by Council Member Reilly, that said resolution be adopted. Resolution No. 85-161 was adopted by the following vote: Ayes: Council Members Castaneda, Reilly, Hernandez, Marks, Quiel, Strickler. Noes: None. Absent: Council Member Frazier. RES. 85-162 - RESOLUTION OF THE CITY OF SAN BERNARDINO AWARDING A CONTRACT FOR THE FURNISHING AND DELIVERING OF LIBRARY FUR- NISHINGS AND EQUIPMENT IN ACCORDANCE WITH SPECIFICATION F-85-4. (Swedlow Dist.) Resolution No. 85-162 was adopted by the following vote: Ayes: Council Members Castaneda, Reilly, Hernandez, Marks, Quiel, Strickler. Noes: None. Absent: Council Member ~'razier. . John Scheffler, representing Yamato Enterprises, 19484 Beach Boulevard, Huntington Beach, also representing Library Bureau, Inc., was present and stated he felt that Yamato was the apparent low bidder and met specifications F-85-18, which relates to one of the bids for seating under consideration. He also stated he considers their furnishings to be of equal or better quality and lower cost. Dean Meech, Purchasing Agent, was present and an- swered questions. Consuelo Eckhardt, Interior Designer of the Project, answered questions and stated she is familiar with both products. Considering the design concept, the quality of the furnishings and the cost, the Burt C. Gentle Co. fur- nishings are the most suitable, and Ms. Eckhardt recom- mended acceptance of their bid. . Susan Hopkins, Deputy City Attorney, answered ques- tions and stated the process has been consistent with legal requirements for bidding. CITY CLERK CLARK ARRIVED City Clerk Clark arrived at the Council Meeting. DEPUTY CITY CLERK REESE LEFT Deputy City Clerk Reese left the Council Meeting. HIGHLAND/DEL ROSA SENIOR CITIZEN CENTER - PARKING PROBLEMS In a memorandum dated May 2, 1985, Council Member Marks requested that he be heard regarding the parking problems affecting seniors who use the Highland/Del Rosa Senior Citizen Center. Council discussed the need to remove some trees to create additional parking for the Highland/Del Rosa Senior Citizens Center at Patton Hospital. . 2 5/2/85 . Council Member Marks made a motion, seconded by Council Member Castaneda and unanimously carried, to authorize Public Services Division to provide the stump removal, tree removal, grading, compaction and associated services at Patton State Hospital for the Highland/Del Rosa Senior Citizen Center parking, and to proceed imme; diately. COUNCIL MEMBER FRAZIER ARRIVED Council Member Frazier arrived at the Council Meeting and took his place at the Council Table. WAYS AND MEANS COMMITTEE REPORTS ~ APRIL 22, 23, AND 29, 19B5 ~ ENTERPRISE ZONE Council Member Marks presented the Ways and Means Committee reports for meetings held on April 22, 23, and 29, 19B5. The three meetings dealt with incentives for the Enterprise Zone. The Council discussed the minutes. . Council Member Quiel made a motion, seconded by Council Member Marks and unanimously carried, that the minutes of the meetings of the Ways and Means Committee held on April 22 and 23, 19B5, be received and filed. Council Member Quiel made a motion, seconded by Council Member Marks, that minutes of the meeting of the Ways and Means Committee held on April 29, 19B5, be re~ ceived and filed. The motion carried by the following vote: Council Member Castaneda, Reilly, Hernandez, Marks, Strickler. Noes: Council Member Frazier~ Absent: Ayes: Quiel, None. . RAMADA HOTEL ~ REQUEST FOR LOAN ~ ENGLISH ENTERPRISES ~ CONTINUED FROM APRIL 29, 19B5 This is the time and place continued to for a request by Herman English, English Enterprises, for a loan of funds for the completion of the Ramada Hotel on "E" Street. On April 29, 19B5, the Redevelopment Agency Com- mittee was authorized to continue negotiations with Mr. English under the following parameters: 1) that the unconditional irrevocable letter of credit or facsimile thereof would provide for a risk free situation to the Agency; 2) that there be no additional substantial costs to the Agency for providing the conduit; and 3) that to a reasonable degree, the parties ascertain there will be an expectation of success for opening and continuation of the hotel. In a letter dated May 1, 19B5, R. E. Goblirsch, Deputy Director of the Redevelopment Agency, set forth the terms of the proposal for a $4,000,000 three year loan, and a $1,000,000 five year loan to English Enterprises; both loans contingent upon English Enterprises providing an unconditional and irrevocable Letter of Credit from an acceptable lending institution, and subject to other terms and conditions set forth in the letter. Council Member Quiel, Redevelopment Committee Chair- man, presented and explained the above referenced pro~ posal. The Council discussed the letter of credit. . 3 5/2/B5 . Mr. Herman English spoke regarding incentives and loans given to other developers and stated that the re- quest for a letter of credit is absurd. Mr. English stated that his acceptance of the committee's proposal was based upon a statement from Mr. Chamness, the finder of the loan, that Mr. Chamness would be able to provide the letter of credit. The Council and Mr. English continued to discuss the letter of credit. Sue Hopkins, Deputy City Attorney, answered ques- tions. She stated that a letter of guarantee can be a binding instrument, however, there are different degrees of protection with different financial instruments. It was further explained that the most protection that can be afforded the City would corne from an irrevocable uncon- ditional letter of credit. Deputy Director Goblirsch explained why a letter of credit is preferred over a letter of guarantee. He also answered questions as to what incentives are offered by the Redevelopment Agency for various developments, and regarding a fund that is invested in Certificates of De- posit and used for development. . Deputy Director Goblirsch enumerated some of the encumbrances on the invested funds. Mr. L. R. Byrd, a representative of English Enter- prises, stepped forward to represent Mr. English in the negotiations. Mr. Byrd asked several questions of Deputy Director Goblirsch and Deputy City Attorney Hopkins. The Council discussed the Redevelopment fund that is presently invested in Certificates of Deposit, and dis- cussed at length the meaning and importance of a letter of credit as a condition for lending funds to Mr. English. Susan Hopkins, Deputy City Attorney, gave a defini- tion of "irrevocable". Mr. English and Mr. Byrd stated that the refusal of the Council to make the loan unless under the stated conditions, is an issue of discrimination. . Mr. English was reminded of other financial consid- erations given to the project such as free parking and a transient occupancy tax rebate. Mr. Thomas Chandler, a member of the Northwest Re- development Project Area Committee, stated that the Council is being penny wise and pound foolish, and should make the loan to English Enterprises. Hardy Brown also criticized the Council for not mak- ing an unconditional loan and for failing to recognize the need to develop the City's core. COUNCIL MEMBER STRICKLER At 7:40 p.m., Council Council Meeting. LEFT Member Strickler left the Mr. Bill Jacocks, Creative Business Services, also spoke in favor of the loan. . Mr. L. R. Byrd pointed out the areas of the proposal letter of May 1, 19B5, that he and Mr. English did not find acceptable, beginning with the letter of credit. 4 5/2/B5 . City Administrator Matzer answered questions, stating that an irrevocable letter of credit carries with it a certain level of security and that in his 23 years of experience with other cities, a letter of credit has always been required. Dr. Lewis Clark, president of the westside Action Group, also spoke. The discussion on the hotel loan was interrupted to take action on the following City business item. CASA RAMONA INC ~ $5,000 GRANT ~ REPAIRS TO GAS LINES In a letter dated May 2, 19B5, Mayor Holcomb ex- plained that repairs to gas lines are needed at Casa Ramona and presented a letter dated May 2, 19B5, from Esther Estrada, Executive Director. Ms. Estrada was present stated that matching funds County. to answer questions. are for t hc om i ng from She the . Jack Matzer, City Administrator, answered questions regarding the recommendation that funds corne from the equipment reserve account. Council Member Quiel made a motion, seconded by Council Member Castaneda and unanimously carried, that the City Attorney's Office and the Redevelopment Agency be directed to prepare the necessary resolution and other pertinent documentation for the issuance of a grant in the sum of $5,000 to Cas a Ramona, Inc~, said grant to be used exclusively for the purpose of the emergency repairs to the gas lines. RAMADA HOTEL ~ REQUEST FOR LOAN ~ ENGLISH ENGLISH ENTERPRISES - CONTINUED FROM PAGE 3 The Council continued their discussion on the request from Herman English of English Enterprises for a loan in the amount of $5,000,000 for completion of the Ramada Hotel on "E" Street. . L. R. Byrd, representing English Enterprises, ob~ jected to a condition in the loan proposal of May 1, 19B5, requiring that loan funds made by the Agency to English Enterprises will be done on a draw basis based upon proper receipts being furnished the Agency. Deputy Director Goblirsch stated that construction loans are typically on a draw basis. Mr. English spoke again about the requirement for an irrevocable letter of credit. The City Clerk read the following resolution in full: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE STAFF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO SEND A PROPOSAL RESPONDING TO ENGLISH ENTERPRISES, INC.'S APRIL 22, 19B5 PROPOSAL REGARDING THE RAMADA HOTEL AND CONVENTION CENTER DEVELOPMENT. . 5 5/2/B5 . The Council reviewed the loan proposal of May 1, 19B5 and suggested changes. Under Condition No.1 the fol~ lowing was added after the words "acceptable lending in~ stitution": "subject to the approval of the Board"; also; the definition of "acceptable lending institution" was clarified to state: "AAA rated bank or Bank of America; II Condition 3C was amended to make it clear that the Redevelopment Agency is only a conduit for the loan and that all interest costs are being passed on to English Enterprises, with the one exception that is spelled out in Condition 3C. The first sentence in Condition 3E was amended to make it clear that the proposal must be accepted as is with all terms and conditions as they are set forth, or rejected~ The language "two weeks" in condition 3G was changed to 14 calendar days and "one week" in Condition 3H was changed to seven calendar days. . In 3H, the revised pro forma will be subject to evaluation and acceptance by the Board for the purpose of determining if there is evidence that will assure the Agency of the success of the hotel once it is opened. The loan referred in 31 is the $lB.5 million loan. The resolution authorizing the Community Development Commission to send the loan proposal was adopted by the Commission by the following vote: Ayes: Members Castaneda; Reilly, Marks, Quiel. Noes: Members Hernandez; Frazier~ Absent: Member Strickler. Morsell Johnson, President of the San Bernardino Chapter of the NAACP, stated that the action taken by the Commission was discriminatory and that he is requesting an investigation. No further action was taken. COUNCIL MEMBER HERNANDEZ At 9:55 p.m., Council Council Meeting. LEFT Member Hernandez left the . ENTERPRISE ZONE The action on the Enterprise Zone was deferred until Monday, May 6, 19B5, at 9:00 a.m. ADJOURNMENT At 10:05 p.m., Council Member Marks made a motion, seconded by Council Member Castaneda and unanimously carried, that the meeting be adjourned to 9:00 a.m., Monday, May 6, 19B5, in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. ~m/LJ~Ab ,/ City Clerk . 6 5/2/B5