Loading...
HomeMy WebLinkAboutR02-Redevelopment Agency e e e . . REDEVELOHIDT CO!ftITTEE MIIIIUTES REGULAR MEETIIIIG lIIovember 8, 1990 4:14 p.lI. The meeting of the Redevelopment Committee was called to order by Chairwoman Esther Estrada at 4:15 p.m., in the Redevelopment Agency Conference Room, Fourth Floor, City Hall, 300 North "D" Street, San Bernardino. ROLL CALL Roll call was taken with the following members being present: Chairwoman Esther Estrada, Committee Member Jess Flores and Committee Member Mike Maudsley. STAFF PRESElfr Mayor W. R. Holcomb; Robert J. Temple, Acting Administrator, Economic Development Agency; Ken Henderson, Executive Director, Development Department; Lorraine Velarde, Executive Assistant to the Mayor; Dennis A. Barlow, Senior Assistant City Attorney; John Hoeger, Development Manager, Development Department; Susan M. Morales, Project Manager, Development Department; Nancy Davidson, Project Manager, Development Department; Vince Bautista, Planning Division; Val Mahabir, Economic Development Consultant; Phil Arvizo, Executive Assistant to the Council; Larry Reed, Director of Planning & Building Services Department; Deborah Marez, Recording Secretary, Development DepartmentD. OTHERS 1111 ATTElIIDANCE Kwang-Tae Park, El Dorado Plaza (EDP); Jim Park, EDP; Jon Brees Thogmartin, Architect, EDP; David W. Moore, EDP; Charlie Son, EDP; Jack Kelly, Schneider Commercial Real Estate; and Bob Forest, Roger's Bindery. PUBLIC COMKDTS 0111 ITEMS IIIOT 0111 THE AGElIIDA. There were no public comments. 1. SAT.~ OF CITY PROPERTY TO KWAlIIG TAB PAR~ (El Dorado Plaza) Kenneth J. Henderson, Executive Director, reported that staff received an offer to purchase property owned by the department at the northwest corner of Mt. Vernon Avenue and Eleventh Street. He noted that Mr. Park was proposing a 45,000 square foot neighborhood shopping center. Mr. Park has already acquired all of the property south of Baseline Street to Eleventh Street between Mt. Vernon Avenue and Herrington Street, except for the two (2) parcels owned by the City totalling 23,238 square feet. The City had the property appraised and the appraised value of the property was established at $72,500 or $3.11 per square foot. He stated that while this amount is fairly 2., . . . T . . consistent with comparables in the immediate area, the narrative of the appraisal concluded with the statement, "This opinion gives no consideration to the value enhancement which would arise from a joinder with the adjacent ownership. Based upon sales number 4A and 5, the most likely price if purchased by the owner would be in the $6.00 per square foot range, or approximately $140,000. Since this is the last property to be acquired, an even greater offer would not be surprising." Chairwoman Estrada questioned whether the amount was consistant with comparables in the area, and requested data supporting the statement. Mr. Henderson reported on six (6) comparables ($2.58, $2.90, $3.11, $4.36, $5.80, and $6.31 a square foot) as reported under the data market summary in vacant land sales from the appraisal report. He noted that one comparable was $15.58 per square foot which is located on the southwest corner of Mt. Vernon Avenue and Baseline Street. This is a level site, significantly improved, with an eight (8) year old 1,470 square foot fast food restaurant, the old Pioneer Chicken Restaurant. He commented that a number of the comparables have been established recently by Mr. Park acquiring the surrounding property. He further noted that if Mr. Park had started to purchase this particular parcel earlier in the game, then the $72,500 would almost certainly pertain, but due to the fact this is the last remaining parcel, there is that value enhancement consideration. David W. Moore, Schneider Leasing Agent for El Dorado Plaza's development, reported that a package was prepared and submitted to all the potential tenants who fit the criteria of that particular demographic area. He noted that although several tenants have responded with interest, unless the deed is secured and site control is acquired, the tenants will not commit and negotiations cannot continue. He stated that costs associated with negotiations could run about $60,000 in legal fees relative to execution of a lease agreement, and this cannot commence until decisions on the deed and site control are made by the Commission. Kenneth J. Henderson, Executive Director, pointed out that the prospective tenants, including ongoing negotiations with True Value, Hallmark, Chief Auto Parts, Radio Shack and others, could potentially impact the success of the West Side Shopping Center. Discussions held at the staff level have not resulted in a fail-safe solution to this potential problem which mayor may not occur. Chairwoman Estrada asked if the developer was interested in participating in the job linkage program. Mr. Henderson said that he planned to discuss this matter with Mr. Park at a later date based upon the successful development of the project, including reestablishing leases with clients whose area of responsibility, or business, would lend themselves to the job linkage program. Kenneth J. Henderson, Executive Director, said that Mr. Park has agreed to grant the City a landscape easement in a form approved by the City Attorney. He explained that it allows us to go in and maintain landscaping and lien the property to collect such costs back through this process. This is something that the Mayor has asked the City and the Development Department to try to accomplish. It ensures that any costs, plus administrative overhead will be received back if the Development Department has maintain the landscaping. REDEVELOPMENT MINUTES REGULAR MEETING NOVEMBER 8, 1990 5240R(dlm) - 2 - . . . . . Jack Kelly, of Schneider Commercial Real Estate, reported that a CUP was submitted, but it was placed on hold because they could not get title and other information required to continue. The Claim Department has indicated nothing further can be done until a decision is made by the City regarding the deed. He explained they are faced with s situation where the are unable to submit any type of approvals and if this continues for a longer period of time, with current City legislation, this could dramatically alter their ability to go forward with this size of a center. A lengthy discussion ensued regarding the purchase price of the parcel based upon the appraisal value of $3.11, versus the purchase price of $6.00 per square foot with the value enhancement considerations which would arise from a joinder with the adjacent ownership. Jon Brees Thogmartin, El Dorado Plaza Architect, stated the application has been submitted and was deemed incomplete because of five (5) items, four (4) of which have been resolved, with the only item being the purchase of the City property. The application will not be reviewed by City staff any further until a decision is made relative to the sale of the property. He cautioned that if the property was not purchased in a timely manner, and the City Council approves any new regulations, it could jeopardize the proposed project. The Committee recommended a purchase price of $6.00 per square foot for the parcel. Mr. Park and associates left the meeting for a conference based upon the Committee's recommendation. After returning, Jon Brees Thogmartin, Architect for El Dorado Plaza, addressed the Committee on Mr. Park's behalf and pointed out how this project will benefit the City. He stated that the City requested an 8.75 foot street dedication on Baseline and on Mt. Vernon, which amounts to 7,500 square feet, be dedicated back to the City. All street improvements; street trees; handicap facilities; curb cuts and sidewalks; traffic light adjustments, and; landscaping and dedication is being handled and absorbed by Mr. Park. Furthermore, no financial assistance has been requested of the Development Department because the project is being totally financed by Mr. Park. The project will be an asset by bringing overall character to a depressed area and enhance the community, which is included in the Enterprise Zone Project Area. RECOIlMElIDATIOlf The Committee recommended that the property be purchased for $6.00 per square foot. Mr. Kwang-Tae Park (El Dorado Plaza) will contact Mr. Kenneth J. Henderson, Executive Director, on November 13, 1990 with a purchase figure agreeable to the Committee and Mr. Park. This figure will be forwarded to the Council on November 19, 1990. 2. ROGER'S BIlfDERY Kenneth J. Henderson, Executive Director, provided background information relative to the $500,000 loan agreement executed in August, 1983. He reported that the Accounting Manager informed staff of Roger's Bindery four (4) month delinquency with monthly payments established at $3,750.00. REDEVELOPMENT MINUTES REGULAR MEETING NOVEMBER 8, 1990 5240R(dlm) - 3 - . e e . . Pursuant to the collection policy adopted by the Community Development Commission, staff was obligated to bring this item forward and recommends the loan be declared in default. Further, staff recommends adoption of the form motion which demands full and complete payment of the note in the amount of $459,197.79, effective immediately. He added that the policy allowed for one (1) restructuring of the loan agreement, which the Development Department has previously done. It was indicated by staff that this particular agreement has been restructured on at least two (2) occasions, possibly more. A FAX was received prior to the meeting, was reproduced and disseminated to the Committee for review and discussion. It noted that Roger's Bindery had a difficult fiscal year between April 1, 1989 through March 31, 1990 and listed several reasons. In essence, problems were cited relative to government contracts; unexpected bankruptcies resulting in substantial losses, and; problems with respect to costs associated with a major contract which were not anticipated. Roger's Bindery requested the Development Department consider another proposal to amend the terms of the original agreement over the next twelve (12) months. The proposal stated that Roger's Bindery would like the Development Department to: (1) reduce payments from $3,750 per month to $1,875 per month beginning November 1, 1990; (2) to allow late that payments for September and October would be paid over six months beginning November 1, 1990. (This would be an additional $1,250 per month for six months), and; (3) beginning November 1, 1991, Roger's Bindery would resume making payments of $3,750 per month. Robert J. Forrest, Jr., Chief Financial Officer for Roger's Bindery and Mailings, was present and addressed the Committee. He stated that the job work force has expanded from 500 to close to 859 employees. The work that was done in San Bernardino relocated to Mexicali for the purpose of competing with the Asian countries and the industry as a whole. This enabled Roger's Bindery to put more people on their mailing ltst and bindery operations. This also provided Roger's Bindery with the opportunity to retain customers that they might otherwise, not have the opportunity to retain. Robert Temple, Acting Administrator of the Economic Development Department, stated he was employed by the Development Department at the time Roger's Bindery restructured the loan agreement and that the figures provided, in terms of the number of employees, was somewhere between 1,200 and 1,400. So, if the figures were accurate at that point in time, then in point of fact, the employment base was decreased rather than increased. A lengthy discussion ensued regarding the Mexicali plant; employee work force; equipment and real estate collateral to secure loan; and, prior attempts of loan agreement restructuring and delinquent payment history. Committee Member Maudsley noted that the interest rate being charged is substantially less than what would be charged elsewhere. He stated it would be more beneficial for the City to invest the money in Wells Fargo or LAIF in order to draw a higher interest rate. He further stated that the City would be losing money if a loan restructuring occurred. He pointed out it is now costing the City money to continue to be the source of funds for Roger's Bindery if the City is not getting any return on its investment. He explained that every month the City is continually losing money on behalf of Roger'S REDEVELOPMENT MINUTES REGULAR MEETING NOVEMBER 8, 1990 5240R(dlm) - 4 - . . . . . Bindery and that this is not acceptable without some additional collateral and/or security. The City is handling all the accounting work, but not assessing any penalties. Mr. Forrest stated that Roger's Bindery has no real property because all its property is leased. He stated that his opinion was that Roger's Bindery is going to be successful if it could remain in business. He reassured the Committee that, although Roger's Bindery has experienced some difficult times, the situation is gradually being resolved. He further stated he has been in the organization for a challenging two year period and have built a strong management team which is providing new opportunities contributing to the building of cashflow. He reassured the Committee that, if he could have sixty (60) days, he could bring the note current, and; reassured the Committee that, as the Chief Financial Officer of the Company, the note will stay current. Kenneth J. Henderson, Executive Director, reminded the Committee that in the staff report, it says, "if any payment is ten (10) or more days late, the payee shall have the option to declare the entire principal balance with interest, due and payable forthwith. A lenghty discussion ensued regarding the background of the loan and payment history. RECO~ATIOII The Committee recommended that the Commission adopt the form motion, which demands full and complete payment of the Note in the amount of $459,197.79, effective immediately. This recommendation will be forwarded to the Commission on November 2', 1990 for approval. 4. 40th STREET PLA1II - B1OIII:l'IT RESOLUTIOIIS Taken out of order by Chairwoman Estrada. Kenneth J. Henderson, Executive Director, reported that staff recommends the Mayor and Common Council and the Community Development Commission adopt the attached Resolution making findings as to the benefit of undertaking the Corridor Plan. 1. Approve the Arroyo Group as the consultant to perform the 40th Street/Kendall Drive Corridor Study, and authorize the Executive Director to execute a contract with the Arroyo Group at a cost not to exceed $85,000.00. 2. Adopt the attached Resolution making findings as to the benefit to the State College Redevelopment Project Area of undertaking the Corridor Plan. RECO...w!luATIOII The Committee recommended that the item be forwarded to the Mayor and Common Council and the Community Development Commission for approval on November 19, 1990. REDEVELOPMENT MINUTES D1i'l!Tn_AD M'li"VTT1I1'l! - ~ - NOVEMBER 8, 1990 I:.?AnDf.4'",,' e e e . . 3. In. VEUOII IIEOUEST FOR OUALIFICATIOIIS (!tFOl FOR IIEDEVELOPMnT SERVICES Kenneth J. Henderson, Executive Director, reported that at the last meeting there was significant discussion relative to the approach that should be taken in order to accomplish the objectives that the Committee and the Mt. Vernon Task Force have established. Other matters of concern were brought to the attention of the Committee regarding the underlying economic viability of the area and what steps ought to be taken relative to the review and study of the proposed areas. There were three (3) recommended courses of action, as follows: 1. That staff be authorized to negotiate and enter into a contract for economic consulting services in order to conduct a market evaluation for the Mt. Vernon theme area. 2. That staff be authorized to negotiate with the consultant team$ listed, select a consultant, and enter into a contract for developer consultation services. 3. That staff be authorized to proceed with the establishment of a consultant team which would be responsible for carrying out the tasks set forth in the Mt. Vernon Specific Plan Work Program (contingent upon the findings of the market evaluation). The Committee reviewed expensive work programs to accomplish each of the three (3) objectives, which were attached to the Staff Report. Kenneth J. Henderson, Executive Director, explained that, if in fact the economic analysis recommended a theme area specific plan, they would carry out the objectives of this specific plan. If, for whatever reasons, the economic analysis indicated another approach should be taken, then the Development Department would not go forward with item number "3", but would bring that item back to the Committee for direction. He pointed out that on item number "1", staff anticipates the economic analysis will take place over a three (3) month period of time. The consultant team would be responsible for developer relations, which would come on board in month two (2) of that study. There are also specific tasks to be accomplished by each of the teams. He commended Development Department and Planning and Building Services staff and the economic development consultants, with respect to the issues that have been addressed, or will be addressed by the respective consultant teams under each of the work programs outlined in the staff report. He believed that if the goals and specific objectives were carried out succeSSfully, the Development Department has an excellent opportunity to develop a scenario that will be economically viable, not only for the short term but for the long term. Chairwoman Estrada asked if all four (4) applicants for the consultant teams were going to be used, or if only one (1) firm was to be selected. Mr. Henderson stated that he anticipated conducting negotiations with each of these four (4) consultant teams and based upon the features of the individual work program and their ability to carry out the respective objectives, a selection would be made and the Committee would be informed of the recommendation for the specific firm or firms to carry out same. REDEVELOPMENT MINUTES REGULAR MEETING - 6 - NOVEMBER 8, 1990 5240R(dlm) . . . r . . RBCOPaomnuATIOR The Committee recommended that the item be forwarded to the Commission for approval on November 19, 1990. S. HOLIDAY MEETING Sr.Jn:DOLE (Verbal) The next scheduled meeting falls on Thanksgiving Day, and requires rescheduling. RBCOl'a'llU'luATIOR The Committee recommended thst the next meeting be held on Wednesday, November 21, 1990, at 8:30 a.m.. 6. STREET T1!1!1! MASTER PLAN Kenneth J. Henderson, Executive Director, reported that this project currently has certain activities still in progress. A gentleman has since donsted trees to the City, the Fire Department is involved in the coordination and selection of appropriate sites, staff is gathering information on the Master Plan, and a draft memorandum, which was prepared for today's agenda, requires more information. At the next meeting staff will be able to identify specific issues and recommendations for the Committee to consider. This item will be continued to the next meeting at which time a comprehensive report will be submitted to the Committee. RBCO~ATIOR The Committee recommended to continue this item to the next meeting. 7. CLOSED SESSIOR The Redevelopment Committee recessed to Closed Session at 5:48 p.m. a. Pursuant to Government Codes Section 54956.8, the Redevelopment Committee of the Community Development Commission/Redevelopment Agency of the City of San Bernardino will now convene in closed session to discuss with its negotiator the purchase, sale, exchange or lease of real property, and give instructions to is negotiator concerning the price and terms of payment for the purchase, sale, exchange or lease of real property. c. Pursuant to Government Code Section 54957 the Redevelopment Committee of the Redevelopment Agency of the City of San Bernardino will convene in closed session to consider personnel matters. The Redevelopment Committee reconvened from Closed Session at 6:25 p.m.. REDEVELOPMENT MINUTES REGULAR MEETING - 7 - NOVEMBER 8, 1990 5240R(dlm) . e . . . 8. ADJOOlu'Il'wr.r There being no further business, the meeting of November 8, 1990, was adjourned at 6:26 p.m. APPROVED BY: r~~- Esther Estrada, rwoman Redevelopment Committee REDEVELOPMENT MINUTES REGULAR MEETING - 8 - NOVEMEER 8, 1990 5240R(d1m)