HomeMy WebLinkAboutR09-Economic Development Agency
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DEVELOPMENT DEPARTMENT
OF THE CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
REOUEST FOR COMMISSION/COUNCIL ACTION
FROM: BARBARA J. LINDSETII
Acting Executive Director
SUBJECf: HUD SECTION 108 LOAN
APPUCATlON - HARRIS'
DEPARlMENT STORE
BUILDING ACQUISITION
DATE: November 15, 1994
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Svnoplllll of Prevlou!lI Commt!ll!lllon/Coundl/Commltb~e Adlnn(!lI)~
Recommended MoHon(II):
(M,-vor and Common Conncll)
MOTION: That the Mayor and Common Council set Monday, December 5,1994, at 3:00 p.m., in the City
Council Chambers as the date, time and place to hold a Public Hearing to meet the citizen
participation requirements established by the U. S. Department of Housing and Urban
Development (HUD), relative to the filing of a Section 108 Loan Guarantee Application and a
CDBG Business Retention Loan relative tu the Hartis' Company Department Store acquisition.
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BARBARA J. LINDSETH
Acting Executive Director
Contact Person(s): Stafford W. PatkerlEmilv Won2
5081
Phone:
Project Area(s): N/A
Ward(s):
Four (4\
Supporting Data Attached: Staff R<:port
FUNDING REQUIREMENTS: Amount: $10.500.000
Source: HUD Section 108 Authoritv
Budget Authority: N/A
Commlslllon/Councll Note!;:
BJL:EMW:harr.l08.cdc
COMMISSION MEETING AGENDA
MEETING DATE: 11/21/1994
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Agenda Item Number:
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DE~LOPMENT DEPART~NT
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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HARRIS COMPANY BUILDING ACOUlSITION
BACKGROUND
The Carousel Mall is located in the heart of the downtown, immediately across the street from
the Civic Center, adjacent to the only substantial hotel in the City. The mall is the economic
heart of the City. It currently employs approximately 1,600 persons, the vast majority of
which are low and moderate income wolkers. The 914,386 square foot mall is anchored by
Harris, JC Penney and Montgomery Ward department stores.
However, the economic downturn in the 1990's has begun to seriously erode the strength of
the mall and other elements of the downtown. The mall now has 120,000 square feet of
vacant space. The hotel's occupancy hovers at a critical level. Sales and tax increment
revenues to the City from the mall have decreased significantly.
Today, the mall is threatened with the closure of the 241,200 square foot story Harris
Department Store. Harris currently leases the building. The Harris lease payments have
continually increased as their sales have dropped due to the decline in Southern California
economy, specifically the Inland Empire. More than a year's effort to solve the problem has
not rectified the situation. As of February 1995, Harris' will have to pay a 15% rent
escalation.
Harris' Department Store can no longer afford to keep the store at the Carousel Mall open
under these circumstances. Without a resolution in the very near future, the store will close.
The owners of the mall have made every effort to accommodate the situation, but they do not
own the building occupied by Harris'. With the shrinking number of department stores in the
country, and the current economic conditions, there are no prospects to replace Harris with
another department store.
As a key anchor to the Carousel Mall, it is critical that all reasonable and prudent efforts be
exerted to help the Harris' Company and retain the business. To facilitate this, staff
recommends the Council and Commission set a Joint Public Hearing on December 5, 1994 at
3:00 p.m. to consider the provision of a City -- Harris Company partnership and the allocation
fmancial assistance. Such assistance would include a Community Development Block Grant
loan and a Section 108 Loan from the Federal Department of Housing and Urban
Development.
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BJL:EMW:harrsl08.cdc
COMMISSION MEETING AGENDA
MEETING DATE: 11/21/1994
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Agenda Item Number:
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DEVELOPMENT DEPARTMENT/EDA STAFF REPORT
RE: HUD SECTION 108 LOAN. HARRIS' STORE ACQUISITION
November 15, 1994
Page 2
In as much as this correspondence merely establishes the public hearing, it does not contain
extensive details that will be further elaborated in the narrative and verbal presentation during
the public hearing.
Based on the foregoing, staff recommends adoption of the form motion.
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BARBARA J. LINDSETH, Acting Executive Director
Development Department
BJL:EMW:harrsl08.cdc
COMMISSION MEETIN(; AGENDA
MEETING DATE: 11/21/1994
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Agenda Item Number: