HomeMy WebLinkAboutR33-Economic Development Agency y CITY OF SAN BERNARDINO ORIGINAL
ECONOMIC DEVELOPMENT AGENCY
FROM: Maggie Pacheco SUBJECT: Property Owner Hearing-Resolution of Public
Executive Director Interest and Necessity for Acquisition of Real
Property: 701 West 5th Street, San Bernardino,
California(Infinite State,Inc.)
DATE: August 28,2007
Synopsis of Previous Commission/Council/Committee Action(s):
On February 7, 2005, the Community Development Commission of the City of San Bernardino ("Commission") authorized
Agency Staff to send out Owner Participation notices to the property owners who own property in the proximity to the block
bounded by 4th, 5th, "G"and"H" Streets, the parcels on the north side of 5th Street between"G"and"H" Streets, the 4 parcels
on the northeast corner of 5th and "G" Streets and 6 parcels on the south side of 5th Street between "G" and "F" Streets in
accordance with the adopted Agency Owner Participation Rules for the Central City North Redevelopment Project Area. No
proposals were received.
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Recommended Motion(s):
Open/Close Hearing
(Community Development Commission)
Resolution of the Community Development Commission of the City of San Bernardino declaring the Public Interest
and Necessity of Acquisition of Real Property by the Redevelopment Agency of the City of San Bernardino for
community redevelopment purposes over the property located at 701 West 5th Street, San Bernardino, California
(Infinite State,Inc.-APN: 0134-093-08 and 09)in the Central City North Redevelopment Project Area
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Contact Person(s): Maggie Pacheco Phone: (909)663-1044
Central City North
Project Area(s): Redevelopment Project Area Ward(s): 1
Supporting Data Attached: 0 Staff Report 0 Resolution(s) ❑Agreement(s)/Contract(s) ❑Map(s) ❑ Letter(s)
FUNDING REQUIREMENTS: Amount: $ 744,000 Source: Low/Mod Housing Bond Proceeds
Budget Authority: 2007-2008 EDA Budget
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Si g naturej 60-c
Fiscal Review:
Maggie Paclfecol,Executive Director Barbara Lindseth,Administrative Services Director
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Commission/Council Notes: � ESQ �&c a0 0 �� o
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4849-3421-2353.1 COMMISSION MEETING AGENDA
P:\Agendas\Comm Dev Commission\CDC 2007\09-04-07 Infinite State Resolution of Necessity SR.doc Meeting Date: 09/044/2007
Agenda Item Number: R3
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
PROPERTY OWNER HEARING - RESOLUTION OF PUBLIC INTEREST AND
NECESSITY FOR ACQUISITION OF REAL PROPERTY: 701 WEST 5TH STREET,
SAN BERNARDINO, CALIFORNIA (INFINITE STATE)
BACKGROUND:
On November 7, 2005, the Community Development Commission of the City of San Bernardino
("Commission") adopted Resolution No. CDC/2005-39 approving the Central City North Downtown
Mixed Use Project Concept Plan ("Plan or Project") and the Redevelopment Project Study and
Exclusive Right to Negotiate Agreement ("Agreement") with Watson and Associates Development
Co., Inc. ("Developer"). Through the Plan and the California Environmental Quality Act ("CEQA")
compliance that was undertaken as part of the Plan approval on November 7, 2005, the Agency was to
acquire certain properties in an effort to encourage and effectuate the redevelopment of certain real
property ("Study Area") bounded by 5th Street on the north, "G" Street on the east, "H" Street on the
west, and 4th Street on the south, including the north side of 5th Street between "H" Street and "G"
Street, the four (4) parcels at the northeast corner of 5th Street and "G" Street, and the six (6)parcels at
the southeast corner of 5th and "G" Streets, but excluding the new TELACU II Monte Vista Senior
Housing Complex ("TELACU") and the Holiday Inn Express (See attached Site Map).
The intent of the Plan is to eliminate blighted conditions, encourage economic development by
creating owner-occupied mixed use and mixed income housing for those properties with frontage on
4th Street and 5th Street, with townhouses located immediately south of the mixed use development on
the south side of 5th Street and on the west side of"G" Street. Moreover, the objective of the Project is
to act as a catalyst in the revitalization of the downtown area and to encourage people to live and work
in downtown.
The Commission has previously authorized Agency Staff to make offers to purchase certain properties
within the Study Area, and to date, the Agency has acquired eleven (11) parcels; possession of one (1)
additional parcel has been granted to the Agency by the courts; and fifteen (15) parcels are pending
acquisition and/or possession.
On May 11, 2007, the Agency sent a purchase offer("Offer") to Infinite State, Inc. ("Property Owner")
to purchase the property located at 701 West 5th Street, San Bernardino, California 92410 (APN: 0134-
093-08 and 09) (the "Property"). The Offer included an Appraisal Summary Statement in conformity
with Government Code Section 7267.2(b), which was prepared by a qualified appraiser. The Offer
was mailed to the address on file with the office of the County Tax Assessor as shown on the last
equalized County assessment roll. Additionally, in accordance with Code of Civil Procedures Section
1263.025, the Agency offered to provide up to $5,000 to defray the expense of an independent
appraisal, should the Property Owner disagree with the Offer presented by the Agency.
In the Offer that was transmitted to the Property Owner, the Property Owner was requested to convey
free and clear title and additionally, free and clear of all leasehold interests in the Property by tenants
and any other parties, if applicable.
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4849-3421-2353.1 COMMISSION MEETING AGENDA
P:\Agendas\Comm Dev Commission\CDC 2007\09-04-07 Infinite State Resolution of Necessity SRdoe Meeting Date: 09/04/2007
Agenda Item Number:
Economic Development Agency Staff Report
Infinite State— CCN Property Acquisition (APN.• 0134-093-08 and 09)
Page 2
The Property Owner received the Offer and communicated to Agency Staff that they disagreed with
the Offer.
On June 29, 2007, the Agency received a letter from Jeffrey Z. B. Springer, of the Law Offices of
Demetriou, Del Guercio, Springer & Francis, LLP, 801 South Grand Avenue, 10th Floor, Los Angeles,
California 90017-4613 (the "Property Owner's Counsel") stating that he was representing the Property
Owner in this matter and confirmed that the Property Owner disagrees with the appraised value of the
Offer. Additionally, the Property Owner's Counsel wanted to confirm that the Agency would
contribute up to $5,000 to cover the expense of the Property Owner in hiring an independent appraiser
and Agency Staff confirmed this (See attached copy).
CURRENT ISSUE:
On August 8, 2007, in conformance with the Code of Civil Procedure Section 1245.235, a notice of the
September 4, 2007, hearing on the intent of adopting a Resolution of Public Interest and Necessity
("Notice") was sent via certified and first class mail to the Property Owner whose name and address
appears on the last equalized County assessment roll, in order to afford such Property Owner a
reasonable opportunity to be heard by the Commission. Furthermore, the Notice was sent via certified
and first class mail to the Property Owner's Counsel.
On August 13, 2007, the Agency received a letter dated August 10, 2007, from the Property Owners
Counsel stating that 1) the Property Owner had retained an appraiser for the Property; 2) the appraiser
had communicated that the appraiser will deliver the appraisal report on September 9, 2007; and 3) a
request be made to the Commission to defer consideration of the Resolution of Necessity until after
receipt of the appraisal (See attached copy).
On August 21, 2007, the Agency sent a letter to the Property Owner's Counsel advising him that the
Agency will proceed with the September 4, 2007 hearing to consider a Resolution of Necessity.
However, adoption of a Resolution of Necessity does not preclude the Agency from negotiating a
mutually satisfactory resolution.
The hearing by the Commission and the adoption of the Resolution of Public Interest and Necessity are
legal preconditions to the exercise of the Commission's power of eminent domain. Moreover, the
Code of Civil Procedure Section 1245.230 and 1245.245 require that the Commission make the
following findings and that each be included in the Resolution of Necessity:
1. The public interest and necessity require the acquisition of the Property: The Agency has
adopted a Plan that includes this Property together with an agreement to assemble land for
eventual redevelopment in accordance with said Plan. The proposed Project is a unified mixed-
use development that will include portions of the Property. To date, the Agency has: acquired
eleven (11) parcels; possession of one (1) additional parcel has been granted to the Agency by
the courts; and fifteen (15) parcels are pending acquisition and/or possession within the vicinity
of the Property. The Agency finds it appropriate to continue the program of land assembly and
to acquire this additional Property to provide sufficient contiguous land for the Plan and the
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4849-3421-2353.1 COMMISSION MEETING AGENDA
P:Wgendas\Comm Dev Commission\CDC 2007\09-04-07 Infinite State Resolution of Necessity SR.doc Meeting Date: 09/04/2007
Agenda Item Number: 0.3
Economic Development Agency Staff Report
Infinite State— CCNProperty Acquisition (APN: 0134-093-08 and 09)
Page 3
contemplated Project. The Agency is authorized to exercise the power of eminent domain
under Article I, Section 19 of the California Constitution, Health and Safety Code § 33391 and
the California Eminent Domain Law (Code of Civil Procedure, Title VII, Chapters 1-12, §
1230.010 et seq.) to acquire the Property.
2. The Project is planned or located in a manner that will be most compatible with the
greatest public good and the least private injury: The 5t Street Corridor has had years of
problems with crime and blight, particularly near the 1-215 Freeway. The Agency has
increased its efforts to address conditions of blight in this sector of the Central City North
Redevelopment Project Area (the "Project Area") to foster a commercially viable and
economically sustainable plan of redevelopment and reuse of the properties within the Project
Area and to prevent the spread of blight in the Project Area into other surrounding
neighborhoods. Redevelopment of the Property will provide needed residential and retail
development and assist with the elimination of blight in other areas in proximity to the Project.
The assembly and redevelopment of the Property is necessary as the Project Area displays a
number of conditions of blight, including the presence of old structures that show signs of
dilapidation and deterioration, high crime rate, high volume of code compliance cases, absentee
owners and tenants in possession, and substandard and inadequate lot size. The Property is
improved with buildings that have been vacant for at least twelve (12) months. For the period
of January 11 through April 11, 2006, the number of Part I Crimes within the area of the Plan
and Project were 91. For the 2005 period, there were 436 Part I Crimes. For the 2004 period,
there were 426 Part I Crimes. For the period of January 11 through April 11, 2006, this equates
to 312.69 Part I Crimes per 1,000 people. Part I Crimes include murder, rape, assault, robbery,
burglary, grand theft auto and other theft. Crimes such as drug use/possession/sale,
panhandling, prostitution, etc., are not included in the figures. The Project will also facilitate
land assembly and reuse of a developed urban area that has stagnated in years under the
burdens of small lot size, diverse ownership, abandoned properties, absentee owners, high
crime and code compliance cases. This Project will provide architecturally attractive quality
housing similar to the TELACU with the emphasis on homeownership. This creates a sense of
pride and increases the public's effort to keep their neighborhood safe and secure. This Project
will further the positive impact started by TELACU and the new Holiday Inn Express in the
Project Area. The Project will also confer substantial environmental benefits upon the Project
Area and the community, generally in accordance with the General Plan of the City of San
Bernardino. The Redevelopment Plan was amended on September 7, 2004, by adoption of an
amendment to reinstate the power of condemnation together with an Environmental Impact
Report SCH#2003031072 (the "EIR") that was duly certified at that time.
3. The subject Property is necessary for the Project: The Agency previously acquired several
parcels of real property in the vicinity of the Property and desires to acquire this additional
Property to provide sufficient contiguous land for the Project. This particular Property is
located directly in the middle of the proposed development. It does not make good land use
planning to build the Project around the subject Property or to exclude the Property. It should
be noted that the Property Owners have never made a request to participate as an Owner
Participant in the Project or redevelopment of this Property.
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4849-3421-2353.1 COMMISSION MEETING AGENDA
P:\Agendas\Comm Dev Commission\CDC 2007\09-04-07 Infinite State Resolution of Necessity SR.doc Meeting Date: 099//04/2007
Agenda Item Number: k 3
Economic Development Agency Staff Report
Infinite State— CCN Property Acquisition (APN.• 0134-093-08 and 09)
Page 4
4. The Government Code § 7267.2(a) Offer has been made to the record Property Owner:
On May 11, 2007, the Agency submitted a formal acquisition Offer to the Property Owner of
the subject Property via certified mail. The Offer complied with Government Code Section
7267.2(a). The offer included compensation for all property rights and interest taken.
5. The environmental processing was accomplished according to law: The Commission
considered and certified the EIR in accordance with CEQA for the Project Area, which
addresses reinstating the Agency's power of condemnation, and the acquisition of the Property
contemplated within the Plan and for the Project. The acquisition of the Property is also
consistent with the EIR for the Project Area. On November 7, 2005, the Commission adopted a
Mitigated Negative Declaration and authorized Agency Staff to file a Notice of Determination
("NOD") with the County Clerk for the Project pursuant to the approved Agreement. On
November 10, 2005, said NOD was filed with the County Clerk. The statute of limitations
applicable to challenges that a public entity approved a project without making a proper CEQA
determination is thirty-five (35) days from the date of the filing by the public agency of the
notice or if there is no notice or formal decision, one hundred eighty (180) days from the date
of the public agency's decision to carry out or approve a project. There was no CEQA
challenge by the Property Owner or any person claiming to have an interest in the Property, and
the time has expired to do so.
6. Adequate Notice was given of this hearing: The Agency provided a Notice to the Property
Owner on August 8, 2007, via certified and first class mail of the September 4, 2007 Property
Owner hearing. Notice was provided to the Property Owner at the address in the last equalized
County assessment roll. In addition, a copy of the Notice was sent via certified and first class
mail to the Property Owner's Counsel.
ENVIRONMENTAL IMPACT:
On or about September 7, 2004, the Commission considered and certified the EIR in accordance with
CEQA for the Project Area, which addresses reinstating the Agency's power of condemnation and the
acquisition of Property contemplated within the Plan and for the Project. The acquisition of the
Property is consistent with the EIR for the Project Area.
On November 7, 2005, the Commission adopted a Mitigated Negative Declaration and authorized
Agency Staff to file an NOD with the County Clerk for the Project pursuant to the approved
Agreement. On November 10, 2005, said NOD was filed with the County Clerk.
The statute of limitations applicable to challenges that a public entity approved a project without
making a proper CEQA determination is thirty-five (35) days from the date of the filing by the public
agency of the notice or if there is no notice or formal decision, one hundred eighty(180) days from the
date of the public agency's decision to carry out or approve the project. There was no CEQA challenge
by the Property Owner, and the time has expired to challenge the CEQA compliance.
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4849-3421-2353.1 COMMISSION MEETING AGENDA
P:\Agendas\Comm Dev Commission\CDC 2007\09-04-07 Infinite State Resolution of Necessity SR.doc Meeting Date: 09/04/2007
Agenda Item Number: 3
Economic Development Agency Staff Report
Infinite State— CCN Property Acquisition (APN.• 0134-093-08 and 09)
Page 5
FISCAL IMPACT:
Based on the formal appraisal, the value of the subject Property is $620,000 plus court costs and legal
expenses and other ancillary costs normally associated with condemnation proceedings for an
approximate total of$744,000.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
P
1
Maggie Pacheco; Executive Director
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4849-3421-2353.1 COMMISSION MEETING AGENDA
P:Wgendas\Comm Dev Commission\CDC 2007\09-04-07 Infinite State Resolution of Necessity SR.doc Meeting Date: 09/04/2007
Agenda Item Number:
134-01
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06/29/07 15:13 FAX 213 624 0174 DEMETRI011,ET AL Q002
DEMETRIOU, DEL GUERCIO, SPRINGER & FRANCIS, LLP
ATTORNEYS AT LAW
601 SOUTH GRAND AVENUE. 1 OTH FLOOR
LOS ANGELES_ CALIFORNIA 90017-4618
JEFFREY 7- R.5PRINGER (Z 13)624.9407 CHRIS G.J.DEL ERC1?lF,198ED)
5TEFHEN A DEL GUERCIO RONALD
MICHAEL A.FRANCIS RICHARD A DEL GUERCIO(RETIRED)
REGINA L(UDZIUS COBB
:OHN E MACK5L III
BRIAN D.LANGA FAX(215)624-0174
B
JENNIRER T.TAGGARY, W VW'W.DDSFFI RM.COM
TAMMY M.J.HONG
June 29, 2007 SENDER'S EMAIL ADDRESS
JSPRI NGEfi @DDSFF IRm.0 DM
VIA FACSIMILE -(909)888-9413
Mr. Don Gee
Deputy Director `
City of San Bernardino,
Economic Development Agency
201 North E Street, Suite 301
San Bernardino, California 92401
Re: 701 West 5th Street, San Bernardino, Ca
Dear Mr. Gee:
This letter is sent on behalf of this firm's clients, Infinite State, Inc. and Ali Salman
in response to your letter dated May 11, 2007.
As you know, and this letter will confirm, Mr. Salman disagrees with your
appraisal of the property. He has searched very diligently for properties that would be
suitable replacements for the subject site, and has been unable to find anything that
would come close to the appeal of the subject property for less than $1,100,000.00.
Accordingly, this letter will confirm, pursuant to Code of Civil Procedures Section
1263.025,that Mr. Salman will accept your offer to pay the reasonable cost of an
independent appraisal, not to exceed $5,000.00. We understand that the independent
appraisal must be conducted by an appraiser licensed by the Office of Real Estate
Appraisers.
Kindly confirm that your offer to pay the cost of the independent appraisal
pursuant to Section 1263.025 remains open, as your purported limitation demanding a
response within 15 days is not authorized under that Section.
Thank you for your courtesy and anticipated cooperation in this matter.
Very truly yours,
J rey ringer
JZBS/blt
cc: Mr. Ali Salman
.08/16/07 15:48 FAX 213 624 0174 DEMETRIM ET AL 003
DEMETRIO , DEL GUERCIO, SPRINGER & FR! 1S, LLP COPY
ATTORNEYS AT LAW
e01 SOUTH GRAND AVENUE. 10TH FLOOR
LOS ANGELES. CALIFORNIA 9001 7.461 3
JEFFREY Z. 6.SPRINGER 12,13)624-0407 CHR15 G, DEMETRIOU 0915-1989)
RONALD J. DEL GUERCIO(RETIRED)
STEPHEN A, DEL GUERCIO RICHARD A. DEL GUERCIO(RETIRVO)
MICHAEL A. FRANCIS
REGINA LIUDZIU5 COBB
JOHN E.MACKEL III FAX (21 3)624'017,1
BRIAN 0. LANGA WWW.DD5FFlRM.COM
JENNIFER T TAGGART
TAMMY M.J.HONG
August 10, 2007 SENDER'S EMAILAIRM.CO
J5PRINGER @DOSFFIRM,COM
VIA FACSIMILE and U.S. MAIL
(909) 888.9413
Maggie Pacheco, Executive Director
CITY OF SAN BERNARDINO
Economic Development Agency
201 North E Street, Suite 301
San Bernardino, CA 92401
Re: 701 West 5th Street, San Bernardino, California
File No_: 4234-01
Dear Ms. Pacheco:
This letter is written on behalf of this firm's clients, Infinite State, Inc. and Ali
Salman, the owners of the property located at 701 West 5th Street, San Bernardino,
I California.
By correspondence dated August 8, 2007, you notified the owners that the
Economic Development Agency intends to adopt a Resolution of Necessity to acquire
that property on September 4, 2007.
This letter is sent to inform you that the owners have retained an appraiser to
appraise the property for purposes of negotiating with the Agency_ In this connection,
we have previously corresponded with Mr. Don Gee, the Deputy Director, and we have
spoken to and exchanged emails with Mike Trout, the project manager_ Mr. Trout
confirmed that the Agency was still committed to provide the $5,000 to help defray the
expense of an appraisal, as required by Code of Civil Procedure § 1263.025. Further,
this letter is sent to notify you that the owners have retained an appraiser; the cost of
the appraisal is $5,000; to request your payment of such expense; and to request that
you defer consideration of the Resolution of Necessity until after the appraisal report
has been received. The appraiser has communicated that he will deliver the report on
September 9, 2007. Accordingly, in order to permit the parties to negotiate this matter,
we would much appreciate your continuance of the hearing to a date after receipt of the
appraisal report so the parties can negotiate the matter further.
08/16/07 15:48 FAX 213 624 0174 DEMETRIOU,ET AL 0 004
Maggie Pacheco, Executive Director
CITY OF SAN BERNARDINO
Economic Development Agency
August 10, 2007
Page 2
Thank you for your courtesy and anticipated cooperation in this matter.
Very tru yours,
r _ B. Sprin
JIBS/bmr
cc: Mr. Ali Salman
09/44/07 16:01 FA.1 213 624 0174 DEAIETRIOU,ET AL 0001/004
I]EMETRIOU, DEL GUERC10, SPRINGER & FRANCIS, LLP
ATTORNEYS AT LAW
Sol SOUTH GRAND .AVENUE, 10TH FLOOR
LOSANGELES, CALIFCANIA 9Mi7,461
(21 3)624-0407 CHRIS G. OW-K-m-lou(I B I S 1$89)
JEFfRR'r Z H,SPRINGER RONALD J. DEL GUERCIO(RETIRED)
STr-PHFN A. DEL GUERCio RICKARD A.OF GUERCIO(ReTiKEC)
MICHAEL A. FRANCIS
REGINA LIULMUS C06@
JOHN E.MACKFL ill FAx 0213)624-0174
LIRIAIV D. LANGA WWW.0DSFFIRWCOM
JENNIFER T.TAGGART
TAMM7"4,J.HONG
TO: PHONE NO. FAX NO:
Mayor
Members of the City Council
Members of Community Development
Commission (909) 384-5102 (909) 384-5158
City of San Bernardino
ATTN: LINDA, City Clerk
CC:
Maggie Pacheco, Executive Director
City Of San Bernardino (909) 888-9413
Economic Develo ment Agency
Ali Salman, Owner (951) 312-8871 (951) 808-9998
Infinite State, Inc.
Karen Feld, Esq.
Lewis, Brisbois, Bis Gard 8( Smith {90g) 3$1-7142 (909} 387-1'{38
FROM: Jeffrey Z. B. Springer, Esq.
DATE: September 4, 2007
RE: AGENDA ITEM R33, SEPTEMBER 4, 2007 MEETING OF
COMMUNITY DEVELOPMENT COMMISSION
TOTAL NUMBER OF
PAGES: 4 CLIENT NO.: 4234-01
NOTE TO PERSON RECEIVING TELECOPY:
IF THE TOTAL NUMBER OF PAGES ARE NOT RECEIVED,
PLEASE CALL (213) 624-8407
MESSAGE;
Transmitted herewith please find my correspondence of today's date.
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This message is intended only for use of the individual or entity to which it is addressed and may contain information
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message is not the intended recipient or the employee or agent responsible for delivering the message to the
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return the original message to us at the above address via regular U.S, mail, i f
01'0=1/07 16:02 FAfi 213 621 0174 DEIIETRIOU,ET AL 1?1002.001
DEMETRIOU, DEL GUERCIO, SPRINCTER. & FRANCt5, LLP
ATTORNEYS AT LAW
801 SOU-rH GRAND AVENUE. 10TH FLOOR
LOS ANGELES. CALIFORNIA 90017.4613
JEFFRE7 Z H.SPMNGER ('213)6248407 CHR:S G. DEMETRICU (191518e9)
r.OMai.G J.UFL GUERCIO
.GTEPHEN A. DEL GUERCIO M^.HAHD A.DEL GUERGIO(RE RE-n)
MICHAEL A. FRANCES
REGINA LIUDZIUS COBB
JOHN E.MACKEL 10 FAX(2'.3)6240174
BRIAN D_LANGA WWW.DD5FF1RM.00M
JENNIFER T.TAGGART
TAMMY M.J.HONG DRESS
August 16, 2007 JSPRNFG R @DDSFF RM GO'�
VIA FACSIMILE ONLY
(909) 384-5158
Mayor
Members -of the City Council
Members of the Community Development Commission
CITY OF SAN BERNARDINO
201 North E Street, Suite 301
San Bernardino, CA 92401
ATTN: CLERIC
Re: AGENDA ITEM R33, SEPTEMBER 4, 2007 MEETING OF THE
COMMUNITY DEVELOPMENT COMMISSION
Owner: Infinite State, Inc. and Ali Salman
Property: 701 West 5th Street, San Bernardino, California
File No.: 4234-01
Dear Mayor, Members of the City Council and Members of the Community
Development Commission:
This letter is written on behalf of Infinite State, Inc. and Ali Salman, the owners of
the property located at 701 West 5th Street, San Bernardino, California.
This letter is sent in lieu of personal appearance at the hearing on tonight's
resolution. It is respectfully requested that this letter be made part of the record of
proceedings in connection with the adoption, if any, of a purported Resolution of
Necessity.
The Staff Report for this agenda item accurately notes that the property owner
has requested that the Community Development Commission ("Commission") to
continue this item to a later date so that negotiations may be conducted in a meaningful
manner following the receipt of an appraisal report which is currently being prepared at
the request of the property owner. That request is respectfully renewed.
In response to the Staff Report on this agenda item, the following points of fact
and law are respectfully presented to the Commission for its consideration_
09%04/07 16:02 FAX 213 624 0174 DEMMIMET AL 2003/004
Mayor
Members of the City Council
Members of the Community Development Commission
CITY OF SAN BERN RDINO
ATTW CLERK
August 10, 2007
Page 2
1. THE PUBLIC INTEREST AND THE NECESSITY DO NUT REQUIRE THE
ACQUISITION OF THE PROPERTY..
The Staff Report asserts that"the agency has adopted a plan that includes this
property together with an agreement to assemble land for eventual redevelopment in
accordance with said plan." Such a factual assertion constitutes a gross abuse of
discretion under the eminent domain law of the state of California. This point was
authoritatively addressed in the decision of Redevelopment Agency v. Norm's Slauson
(1985) 173 Cal.App_3d 1121, 1127-1128_ In that case, the Court of Appeal determined
that it was not just a gross abuse of discretion, but the elimination of any discretion
whatsoever to commit to a project prior to the adoption of a Resolution of Necessity_ In
such a circumstance, the purported finding of public interest and necessity having been
made before the property owner has a right to produce evidence constitutes a gross
abuse of discretion and must be set aside.
2. THE PROJECT IS NOT PLANNED OR LOCATED IN A MANNER THAT WILL
BE MOST COMBATABLE WITH THE GREATEST PUBLIC GOOD AT LEAST
PRIMATE INJURY.
Prior to the regulatory actions of the City that were taken in reference to the
proposed redevelopment project, the property was developed with improvements
reflective of the highest and best use and had been continuously occupied for many
years. However, upon adoption of the project, the City adopted regulatory measures
which so restricted the uses on the property as to constitute a form of prohibited down
zoning. Of course, such down zoning must be ignored by the jury who will determine
just compensation in this matter. However, the down zoning itself, having influenced
the factors applicable to the property, must also be ignored in determining blight_ Thus,
the vacancy, which was only created by the project itself and eliminated the
economically viable uses of the property including restaurant use and check cashing
use, which had been historic uses not only on this property but in the immediate vicinity
as well. In early 2006, Mr_ Salman, together with his prospective lessee, inquired of City
personnel regarding a restaurant use for the property. However, City personnel
consistently rejected such proposals and discouraged such use, even discouraging the
former check cashing uses_
3. THE SUBJECT PROPERTY IS NOT NECESSARY FOR THE PROJECT.
The Staff Report contains a gross misstatement of fact_ At all times since his
purchase of the property, Mr. Salman has stated to City personnel that he would like to
09/04/07 16:02 FAI 213 624 0174 DENETRIOU.ET AL 0004/004
Mayor
Members of the City Council
Members of the Community Development Commission
CITY OF SAN BERNARDINO
ATTN: CLERK
August 10, 2007
Page 3
contribute his property and participate in a development of the property. To the
contrary, it was City personnel, not Mr. Salman, who insisted that he could not
participate in the project as an owneridevelopec
4. AN OFFER HAS NOT BEEN MADE IN COMPLIANCE WITH GOVERNMENT
CODE 4 7267.2.
The written offer herein contained an impermissible limitation on the time within
which an appraisal could be obtained and reimbursement made by the Commission.
Code of Civil Procedure § 1263.026 contains no time limit within which an owner must
seek reimbursement of a condemnor for the cost of obtaining an appraisal report. Such
offer of reimbursement must be made no later than the time at which the public entity
makes a written offer pursuant to Government Code § 7267.2. (Code Civ. Pro_ §
1263.025(a).)
In direct contravention of this requirement, the agency purported to place a
stringent time limitation of 15-days within which the owner could accept the offer of
reimbursement_ There is no such limitation is under Section 1263.025. Hence, the offer
was not made in compliance with Government Code § 7267.2.
Thank you for your attention to this matter. Please do not hesitate to contact us if
you should have any questions.
Very truly yours,
r y K- B In r /
JZBStbmr
cc: Maggie Pacheco, Executive Director (via Facsimile Only)
Ali Salman, owner, Infinite State, Inc. (via Facsimile Oni
Karen Feld, Esq. (via Facsimile Only_)
01 RESOLUTION NO. COPY
2
3 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO DECLARING THE PUBLIC INTEREST
4 AND NECESSITY OF ACQUISITION OF REAL PROPERTY BY THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FOR
5 COMMUNITY REDEVELOPMENT PURPOSES OVER THE PROPERTY
LOCATED AT 701 WEST 5TH STREET, SAN BERNARDINO, CALIFORNIA
6 (INFINITE STATE, INC. - APN: 0134-093-08 AND 09) IN THE CENTRAL
7 CITY NORTH REDEVELOPMENT PROJECT AREA
8 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), a
9 public entity created pursuant to the California Community Redevelopment Law ("CRL") (Health
10 and Safety Code Section 33000, et seq.), is authorized to acquire and redevelop blighted properties
11 located in the City of San Bernardino (the "City"), in accordance with the CRL; and
12 WHEREAS, the Community Development Commission of the City of San Bernardino (the
13 "Commission"), as the governing board of the Agency, has authorized the Agency to assemble and
14 acquire real property for community redevelopment purposes in the Central City North
15 Redevelopment Project Area (the"Project Area"); and
16 WHEREAS, the Project Area displays substantial and pervasive symptoms of blight that
17 cannot be remedied by private parties acting alone without community redevelopment assistance;
18 and
19 WHEREAS, the Commission may serve as the "lead agency" as defined in the California
20 Environmental Quality Act ("CEQA") for the purpose of conducting an environmental review in
21 connection with the acquisition of the Property; and
22 WHEREAS, on or about September 7, 2004, the Agency considered and certified
23 Environmental Impact Report SCH#2003031072 (the "EIR") in accordance with CEQA for the
24 Project Area, and the acquisition of the Property contemplated within the Plan and for the Project is
25 consistent with the EIR; and
26 WHEREAS, neither the Property Owner nor others who claimed an interest in the Property
27 made a CEQA challenge and the time has expired to do so; and
28 WHEREAS, Part I Crimes within the area of the Plan and Project were reported as 91
4812-9329-4337.1 1
1 incidents of crime for the period January 11 through April 11, 2006, 436 for 2005 and 426 for 2004;
2 and
3 WHEREAS, on November 7, 2005, the Commission adopted Resolution No. CDC/2005-39
4 approving a Redevelopment Study Agreement and Exclusive Right to Negotiate (the "Agreement")
5 by and between the Agency and Watson and Associates Development Company, Inc. (the
6 "Developer"), and adopted the Mitigated Negative Declaration for the Downtown Mixed-Use
7 Project Plan (the "Plan") and for the Project to be built (the "Project") described in more detail in
8 the CEQA Initial Study dated October 11, 2005; and
9 WHEREAS, the Agreement contemplates the Agency acquiring or obtaining control of
10 parcels necessary for the Plan either through purchase negotiations or alternatively, by eminent
11 domain proceeding, if necessary; and
12 WHEREAS,the Agency has acquired real property in the Project Area; and
13 WHEREAS, Infinite State, Inc. is the owner of record (the "Property Owner") of real
14 property located at 701 West 5th Street, San Bernardino, California 92410 (APN: 0134-093-08 and
15 09) (the"Property"); and
16 WHEREAS, on December 14, 2006, the Agency mailed a notice to the Property Owner of
17 the Property within the Project Area and informed the Property Owner that the Agency intended to
18 appraise the Property for possible acquisition; and
19 WHEREAS, the Agency retained the services of an appraiser to appraise the Property and
20 the appraiser has reported an opinion of the fair market value of the vacant improved Property; and
21 WHEREAS, based upon such real property appraisal report, the Commission authorized the
22 Agency to send a purchase offer to the Property Owner to attempt to purchase the Property at the
23 appraised value in lieu of condemnation, and on May 11, 2007, the Agency mailed a purchase offer
24 to the owner of record of the Property based on the appraised value of the Property described in this
25 Resolution; and
26 WHEREAS, the Agency transmitted the offer, via certified mail, to purchase the Property
27 situated within the Project Area, based on the appraised value on May 11, 2007, to the Property
28 Owner at the address on file with the office of the County Tax Assessor, and the Property Owner
4812-93294337.1 2
1 received the Agency offer; and
2 WHEREAS, in the offer to purchase transmitted to the Property Owner, in accordance with
3 Code of Civil Procedure Section 1263.025, the Agency offered to provide up to $5,000 to defray the
4 expense of an independent appraisal should the Property Owner disagree with the offer to purchase
5 price presented by the Agency; and
6 WHEREAS, the Property Owner notified the Agency and disagreed with the offer to
7 purchase price as presented by the Agency; and
8 WHEREAS, Property Owner stated that he will obtain an independent appraisal of the
9 Property; and
10 WHEREAS, on June 29, 2007, the Agency received a letter from Jeffrey Z. B. Springer of
11 the Law Offices of Demetriou, Del Guercio, Springer & Francis, LLP, 801 South Grand Avenue,
12 10th Floor, Los Angeles, California 90017-4613 (the "Property Owner's Counsel") stating that he
13 represents the Property Owner and confirmed that the Property Owner disagrees with the appraisal
14 value used in the offer to purchase presented to the Property Owner by the Agency; and
15 WHEREAS, the Property Owner's Counsel desired confirmation that the Agency would
16 contribute up to $5,000 to cover the expense of the Property Owner in hiring an independent
17 appraiser; and
18 WHEREAS, the Agency has not been able to satisfactorily complete a negotiated purchase
19 with the Property Owner to acquire the Property for community redevelopment purposes; and
20 WHEREAS, on August 8, 2007, a notice of intent to adopt this Resolution was sent to the
21 Property Owner, via certified and first class mail, at the address of record on file at the office of the
22 County Tax Collector and at the last known address for the Property Owner, and notice was also
23 published in the Sun newspaper on August 11, 2007 and August 18, 2007; and
24 WHEREAS, on August 8, 2007, a copy of the notice of intent to adopt this Resolution was
25 sent to the Property Owner's Counsel via certified and first class mail; and
26 WHEREAS, on August 13, 2007, the Agency received a letter from the Property Owner's
27 Counsel dated August 10, 2007, stating that 1) the Property Owner had retained an appraiser for the
28 Property; 2) the appraiser has communicated that the appraiser will deliver the appraisal report on
4812-9329-4337.1 3
1 September 9, 2007; and 3) a request be made to the Commission to defer consideration of the
2 Resolution of Necessity until after the receipt of the appraisal; and
3 WHEREAS, on September 4, 2007, after not less than fifteen (15) days written notice to the
4 Property Owner, the Commission conducted a hearing for the purpose of affording the Property
5 Owner a reasonable opportunity to appear and be heard on the matters referred to in the Code of
6 Civil Procedure Section 1240.030 and whether the Agency has met all other prerequisites for the
7 exercise of eminent domain to acquire the Property for community redevelopment purposes; and
8 WHEREAS, the Commission has determined as a result of such hearing on September 4,
9 2007, that the public health, safety and welfare require the Agency to acquire the subject Property
10 for community redevelopment purposes and to facilitate the Project.
11 NOW THEREFORE, BE IT RESOLVED THAT THE COMMISSION FINDS,
12 DETERMINES AND DECLARES AS FOLLOWS:
13 Section 1. The information set forth in the above recitals of this Resolution is true and
14 correct.
15 Section 2. The real property to be acquired under the authority of this Resolution is
16 located in the Project Area in the City. The Property is more particularly described in the legal
17 description attached as Exhibit"A." The interest in the Property to be acquired consists of all of the
18 fee simple absolute title interest in the Property, and all of the right, title and interest of each person
19 and owner of the Property including the acquisition of each and every possessory interest and all
20 easements and appurtenances to the Property.
21 Section 3. On August 8, 2007, the Agency transmitted a notice of hearing to the known
22 owner of record (Infinite State, Inc.) at 1369 Tanglewood Street, Corona, California 92882-3776, a
23 notice was published in the Sun newspaper on August 11, 2007 and again on August 18, 2007, and
24 copies of such notices of hearing are on file with the Agency.
25 Section 4. The Commission acknowledges receipt of the written reports and information
26 relating to the Project Area, including the Staff Report and Agreement between the Agency and the
27 Developer concerning the Plan, and the appraisal of the Property, staff reports, and oral reports and
28 information submitted to the Commission during the course of the hearing conducted on September
4812-9329-4337.1 4
1 4, 2007.
2 Section 5. The Commission, on behalf of the Agency, finds and determines that the
3 hearing conducted by the Commission on this matter on September 4, 2007, was full and fair, and
4 that each interested person has been afforded a full and fair opportunity to present evidence and
5 testimony relating to assembly of land for the Plan, and the matters described in the Code of Civil
6 Procedure Section 1240.030, and the acquisition of the Property, and all interests in it, by the
7 Commission for community redevelopment purposes by the exercise of eminent domain and other
8 relevant matters.
9 Section 6. The Commission declares its intent to acquire the vacant improved Property
10 for the Plan and community redevelopment purposes in the name of the Agency in accordance with
11 the laws of the State of California, including the CRL and Health and Safety Code Sections 33391
12 and 33492.40. The Commission further finds and determines that all of the prerequisites to the
0 13 exercise of eminent domain by the Agency with respect to such acquisition of the Property for the
14 Plan have been met.
15 Section 7. The Commission has found and determined that the acquisition of the
16 Property for the Plan is an activity which is covered under a Mitigated Negative Declaration adopted
17 by the Commission on November 7, 2005, and an NOD was filed with the Clerk of the County on
18 November 10, 2005.
19 Section 8. In accordance with the provisions of Code of Civil Procedure Section
20 1245.230 and 1245.245,the Commission finds, determines, and declares as follows:
21 (a) The public interest, convenience and necessity require the acquisition of the Property
22 for the Project, as necessary to alleviate conditions of blight in the Project Area, which are
23 documented and described in more detail in the EIR and CEQA Initial Study dated October 11,
24 2005, and to provide for the orderly redevelopment of the Property and other real property included
25 in the Project Area. The assembly and redevelopment of the Property is necessary as the Project
26 Area displays a number of conditions of blight, including, without limitation, prevalence of absentee
27 owners, high volume of code compliance cases, crime statistics substantially higher than the City
28 rate, the presence of old structures that show signs of dilapidation and deterioration and small or
4812-9329-4337.1 5
1 substandard lot sizes within the Project Area, including the subject Property, and a diverse pattern of
2 land ownership which prevent or substantially hinder the economically viable use of such real
3 property in its present condition. Acquisition and assembly of the vacant improved Property for
4 community redevelopment purposes for the Plan and the Project, together with other lands already
5 owned by the Agency in the Project Area, will foster the elimination of blight and assist with the
6 redevelopment of the Project Area, and assist with elimination of blight in other lands in proximity
7 to the Project Area. For the period of January 11 through April 11, 2006, the number of Part I
8 Crimes within the area of the Plan and Project were 91. For the 2005 period, there were 436 Part 1
9 Crimes. For the 2004 period, there were 426 Part I Crimes. For the period of January 11 through
10 April 11, 2006, this equates to 312.69 Part I Crimes per 1,000 people. Part I Crimes include murder,
11 rape, assault, robbery, burglary, grand theft auto and other theft. Crimes such as drug
12 use/possession/sale, panhandling, prostitution, etc., are not included in the figures. The Plan and the
13 Project include, without limitation, mixed income and mixed commercial and residential uses.
14 (b) The Project is planned or located in a manner that will be most compatible with the
15 greatest public good and least private injury. The Plan and the Project are planned or located in the
16 manner that will be most compatible with the greatest public good and the least private injury in
17 light of the fact that the real property included in the Project Area displays a number of symptoms of
18 blight. The Plan and the Project shall also facilitate the completion of a land assembly program
19 previously initiated by the Agency and foster the reuse of a developed urban area that has stagnated
20 in recent years under the burdens of economic obsolescence, small lot size, diverse ownership,
21 absentee owners, tenant occupancy, high crime and code compliance cases, property tax liens, and
22 inadequate public improvements. The Agency is authorized to exercise the power of eminent
23 domain under Article I, Section 19 of the California Constitution, Health and Safety Code § 33391
24 and the California Eminent Domain Law (Code of Civil Procedure, Title VII, Chapters 1-12, §
25 1230.010 et seq.) to acquire the Property.
26 (c) The Property described in this Resolution is necessary for the Plan and the Project, as
27 its acquisition and reuse for the Plan and the Project is part of a neighborhood plan to eliminate
28 blight and provide for the redevelopment and improvement of the other lands owned by the Agency
4812-9329-4337.1 6
P\aoe..dae\R—hai... lz'—-rr 7m W—a. c. rnr vex„A-
1 within the Project Area.
2 (d) The Commission has not made a predetermination to proceed with the Project.
3 (e) The purchase offer required by Government Code Section 7267.2 has been mailed to
4 the owner of record of the Property by the Agency, and the Agency has not been successful in
5 acquiring the Property based upon the conditions contained within the offer. The Commission is
6 hereby requested to approve its acquisition of the Property for assembly for the Plan and the Project.
7 The offer to acquire included compensation for all property rights and interest taken or damaged.
8 (f) The environmental processing was accomplished according to law.
9 (g) Notice of this hearing was adequate.
10 Section 9. (a) The law firm of Lewis Brisbois Bisgaard & Smith LLP, as legal
11 counsel to the Agency ("Agency Counsel"), is authorized and directed to prepare, institute and
12 prosecute in the name of the Agency such proceedings in the court having jurisdiction, as may be
13 necessary for the acquisition of the Property.
® 14 (b) The sum payable by the Agency as probable compensation for the acquisition of the
15 Property by eminent domain, as determined by the appraisal, may, in the discretion of Agency
16 Counsel, accompany the filing of the complaint and may be deposited as follows: (i) with the State
17 of California in the manner provided by law, or upon the recommendation of Agency Counsel to the
18 State Treasury; or(ii) at the election of the person(s) who may claim an interest in the Property to be
19 acquired by such condemnation proceedings, in such other manner as such interested person(s) may
20 request in writing, subject to the approval of the Executive Director of the Agency and Agency
21 Counsel.
22 (c) Agency Counsel is also authorized, subject to the approval of the Executive Director
23 of the Agency, to engage in settlement negotiations and, if possible, arrange for purchase of the
24 Property in lieu of condemnation at the appraisal price prior to or subsequent to filing a
25 condemnation complaint to commence acquisition of the Property by eminent domain.
26 Section 10, The Secretary of the Commission is authorized and directed to certify the
27 adoption of this Resolution. This Resolution shall take affect upon adoption.
28
4812-9329-4337.1 7
01 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO DECLARING THE PUBLIC INTEREST
2 AND NECESSITY OF ACQUISITION OF REAL PROPERTY BY THE
3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FOR
COMMUNITY REDEVELOPMENT PURPOSES OVER THE PROPERTY
4 LOCATED AT 701 WEST 5TH STREET, SAN BERNARDINO, CALIFORNIA
(INFINITE STATE, INC. - APN: 0134-093-08 AND 09) IN THE CENTRAL
5 CITY NORTH REDEVELOPMENT PROJECT AREA
6 PASSED, APPROVED AND ADOPTED this day of 12007.
7 I CERTIFY that the foregoing Resolution was duly adopted by the Community
8 Development Commission of the City of San Bernardino at its meeting
9 held on , 2007 by the following vote, to wit:
10 Commission Members: Ayes Nays Abstain Absent
11 ESTRADA
12 BAXTER
® 13 BRINKER
14 DERRY
15 KELLEY
16 JOHNSON
17 MC CAMMACK
18
19 Secretary
20 The foregoing Resolution is hereby approved this day of , 2007.
21
22
Patrick J. Morris, Chairperson
23 Community Development Commission
24 of the City of San Bernardino
Approved as to Form:
25
26 By: /S/ i� 1.Sa&
27 Agency Counsel
28
4R 1�-939-d'i�7.1 R