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HomeMy WebLinkAboutS04-City Administrator - o . CITY OF SAN BERNARDINO o - REQUEST FOR COUNCIL ACTION From: Marshall W. Julian City Administrator Su~Kt: COMMUNITY HOSPITAL -- REQUESTS FOR OFF-SITE IMPROVEMENT ASSIS- TANCE/PROPERTY TRANSFER/WAIVER OF 1% BOND FINANCING FEE Oept: Date: August 2, 1989 Synopsis of Previous Council action: At the meeting of the Redevelopment Committee held November 10, 1988, the Committee authorized participation in the amount of $30,000 for the installation of traffic signals at the intersection of 19th -Street and Medical Center Drive. RKommended motion: That the request of the Arrowhead Health Care System (Community Hospital) be referred to the RDA Committee for further clarification and consideration. Contact person: Marshall W. Julian Phone: 5122 Supporting data attached: Ward: FUNDING REQUIREMENTS: Amount: Source: (Acct, No.) IAcct, Oescriotion) Finance: Council Notes: / ~ CITY OF SAN BERrQRDINO - REQUEST .QR COUNCIL ACTION . STAFF REPORT At the time Community Hospital issued bonds to finance its $40,000,000 construction program and prepared to go forward with development, a request was made by the Hospital to waive the $300,000 (plus or minus) in development fees. The request was denied. However, Mr. Barton's letter states that there were informal assurances by members of the Council that the fees paid would be used to "fund off-site and public improvements when the hospital needed them". While it would not be appropriate for any such dollar-for-dollar commitment to be made, public improvements could be made from Redevelop- ment funds, General Fund or some other source, to the extent funds were available. At the time the development was approved, the following were some of the Conditions of the CUP (85-67) established by the Planning Commission: a. Modify existing signals at Highland and Baseline, at Medical Center Drive, to allow controlled left turns for east-west bound vehicles. b. Upgrade existing signal at 19th and Medical Center Drive to provide left-turn signals (east and west turns) and provide for future north-south intercon- nect. Mr. Barton's letter contains three requests: l. That Community Hospital be relieved of any costs relative to the upgrading of signalization at Medical Center Drive and 19th street. 2. That the RDA extend the Joint Development Agreement for the sale of Orangewood Park property to Arrow- head Health Care (Agreement has expired -- January 1, 1989). 3. That the RDA be utilized to refinance the hospital bonds and that the l% fee not be charged. RDA (see attached letter) extended an offer to reimburse the Hospital up to $30,000 for the traffic signal work at 19th and Medical Center Drive (12-6-88). There has been no direct response to that letter. Mr. Barton's current letter implies a rejection of that concept and requests that the Hospital pay none of these costs. The tentative date for the closing of escrow and transfer of title for the Orangewood Park property to the Hospital was January l, 1989. This action did not take place on schedule, and the Hospital is asking that the escrow close at some time in the future. This probably can be accomplished, but the closing of the transaction is contingent upon the financing program of the Hospital. 75-0264 H .- c o o As to the waiver of the 1% fee on bond refinancing, I am advised that ~he Agency has not waived these fees in the past. This 1S a policy determination which the Mayor and Council (Community Development Commission) must make. Mr. Barton's letter states that "...the City's inability to deal with this one traffic signal is holding up...". There is obviously a need for a better understanding on the part of all concerned as to what is needed with respect to the signal construction and the transfer of the Orangewood property, and the RDA Committee would appear to be the vehicle for such discussion. - A. - o o . Mayor Robert Holcomb City of San Bernardino 300 North "D" Street San Bernardino, CA, 92418 \ ., Dear Mayor Holcomb: \ ,~, - ) /j" \. '. ;'-.....1 ~ ,," ~,,"_ ,I "'" ~ ~(:,: \'/' . .,--- ._~_...~.;/" I am writing to ask for your help. The San Bernardino Community Hospital and The Arrowhead Health Care System are both non-profit, community-owned organizations. As you know, we have been expending every possible effort to develop new facilities and health services on the west side of San Bernardino. For the past seven years, we have focused our resources and efforts on being the catalyst for the re-emergence of the west side, as a growing and vibrant part of San Bernardino. During that seven years, we have been able to achieve "the impossible". We have organized and operated Community Hospital to be self supporting, despite tremendous obstacles and market forces to the contrary. We have now designed, constructed, and financed the five story San Bernardino Community Hospital located on Medical Center Drive. We have opened more than a dozen new regional health services and centers on the Hospital's campus. We acquired the Pacific Park Convalescent Hospital (located on Medical Center Drive) and transformed it from the absolute worst nursing home in the Inland Empire to one of the very best. To do this we had to spend nearly $600,000 to totally renovate and chang~ the image and operations of the only such facility on the west side. In completing all of these major accomplishments, we have neither asked for nor received any outside financial support. In addition to the above completed projects, we are currently in the process of developing and constructing a number of other major projects on the west side of San Bernardino. These projects will generate many millions of dollaFs in both construction and enterprise for the west side, as well as continuing to change the image of the area. I will only mention the most significant of the current projects: . PROFESSIONAL OFFICE COMPLEX (POC) The POC is a vitally needed medical office building and small business mall. It will be built on the west side of Medical Center Drive, directly opposite the brand new San Bernardino Community Hospital Tower. The POC building will be partially located on two pieces of land already owned by Arrowhead Health Care, and partially on the old Orangewood Park property. The POC building is currently sized at 50,000 square feet. We would very much like to upsize the building to 75,000 square ",,",WtIItIt Ex"'''''" III Helltll ,,,,,, TI\8 San Bernardino Community Hospital. The Fontana Medical Cent... . Pacific Plrte Convalescent Hospital I_I....... ,.........i.. a.."IIrt'!. r::_",., . Inland Cant., for Behavioral MAdlcln. . Adult n.v W..lth f"..,. r....tar - - , ~ - o o feet, and are continuing an effort to generate sufficient tenant leases to accomplish this. This may necessitate that our own organization make a commitment to guarantee a master lease for a significant amount of additional space in the building. If we are required to do this in order to upsize the building, we would be incurring significant potential debt, in addition to the millions of dollars in annual debt service that we have already taken on this year. This entire pro;ect is now stalled, awaitinq only the action of the Redevelopment Aqency in order to move ahead with the detailed architectural desiqn and construction. . ARROWHEAD WOODS - SENIOR HOUSING DEVELOPMENT This is a joint venture project between The Arrowhead Health Care System, the City of San Bernardino, and the Housing Authority of San Bernardino County. It is to be located on several acres of land just west of Pacific Park Convalescent Hospital and Orangewood Park, which are owned by Arrowhead Health Care. We have agreed to a preliminary agreement to lease the land to the project for up to 50 years, at virtually no cost, in addition to providing several cost-free services to the project. . ARROWHEAD REGIONAL LABORATORY This is a new business for the west side. It involves the design and construction of a regional reference laboratory which will provide sophisticated, clinical and pathology testing for smaller laboratories, hospitals, and physicians' offices. It will also 'provide the bulk of the laboratory services for Community Hospital and the other divisions of Arrowhead Health Care. This project is ready to break ground, as soon as the building permits are issued. . ARROWHEAD HOME HEALTH CARE AGENCY Effective July 1st, this new home health care agency was licensed by the State of California and is currently conducting business. This business provides a broad range of social, health and domestic services in the home setting. Patients are referred by social service agencies, hospitals, and nursing homes. So, given all of this activity by Community Hospital and Arrowhead Health Care, why do we need your help? The answer is that we have come to a point over the past six months where several of these vital projects are in danger of collapse, as a direct result of either actions or lack of actions by the City/Redevelopment Agency. Please let me be specific, as to what actions we need from the City or Redevelopment Agency in order to keep from losing these projects and permanently damaging Community Hospital. First let me describe the problem, and then the requested actions to help solve the problem. U'\ THE ARROWHEAD HEALTH CARE SYSTEM ~ $ ..t. J! o o THE PROBLEM When Community Hospital issued its bonds to finance the new $40 Million hospital, we requested a waiver of the one percent developers fee to the city. Such a waiver is extremely common in other cities, particularly for community-owned, non-profit hospitals. This was particularly appropriate given the dramatic need for the new hospital on the west side of the city, as well as the fact that the hospital was struggling financially and did not have enough funds to pay for all of the new building. (note: Community Hospital is still $1 million short in funds to pay for the new hospital building). Although nearly all members of the city council at that time indicated a desire to waive the fee, our request for a waiver was denied out of concern for the politics. We were told, however, that the purpose of the developer's fee was to help pay for public improvements to assist new and developing businesses become established in San Bernardino. We were also told by several of these individuals that if we would pay the $300,000.00+ fee to the city, the city would use the money to fund off-site and public improvements in the west side when the hospital needed them. In this way, the politics of the fee being paid would be satisfied, but the funds would come back to the west side and the hospital to fund improvements associated with the hospital's projects to improve the area. Well, we have been asking for the promised assistance with a public improvement for the past ten months, still with no results. The city traffic engineer has decided that the traffic signals at the intersection of Medical Center Drive and 19th Street be dramatically upgraded, as a part of our opening the new Hospital. The traffic engineer's original decision was that only one of the three signals needed replacement. This was later changed to order the replacement of all three signals. The costs increased from the $35,000 range to nearly $100,000 as well. We asked the city and mayor's office (see attached letter dated September 28, 1988) for assistance, using some of the original $300,000+ which we gave to the city for this purpose. After a number of meetings and promises to resolve the problem, absolutely nothing happened. Now, we have received a bill from the city for some initial work on the signal, and the Redevelopment Agency has indicated that they will not allow any of our projects to go forward on the west side until we agree to pay for the traffic signal improvements AGAIN I Now, nearly one year later, the traffic signal located at Medical Center Drive and 19th Street has become the major roadblock to progress on the west side. It is hard to believe, but the city's inability to deal with this one traffic signal is holdinq up and threateninq to cancel millions of dollars of projects on the west side. ~ TN~ .aRRGWN~.aD N~..aL TN ~RIi SYSTIiM - - - o o In addition, the whole future of the San Bernardino Community Hospital rests on immediate construction of the new Professional Office Complex. After two years of work to finally convince a major developer to build this project, they have put it "on indefinite hold" until we can fulfill our end of the bargain and gain ownership to the Orangewood Park property, which was committed by the city and arranged for years ago. If we cannot do this very soon, we will lose the physician commitments, the developer, and the corporation which is financing the project. If this happens, Community Hospital will not be able to survive. REQUESTED ACTIONS FROM THE eI'l'Y . REDEVELOPMENT AGENCY 1. We ask that the city cease looking to Community Hospital for any desired traffic signal improvements at the intersection of Medical Center Drive and 19th Street. The city & redevelopment agencies should fund these improvements. The Hospital has already provided the monies to fund such public improvements. 2. We ask that the Redevelopment Board approve the extension of the Joint Development Agreement for the sale of the Orangewood Park property to the Arrowhead Health Care System. This Joint Development Agreement was already approved by the Council but has expired. Arrowhead Health Care has now met all of the requirements in the joint agreement for the land to close escrow and be transferred to Arrowhead. The agreement should be honored by the city, an extension approved, and the land transferred as promised. 3. The last request is separate f~om the other three, but is related to the issues involved. The San Bernardino Community Hospital has nearly completed all preparations necessary to refinance our original bond issue. The purpose of refinancing is to significantly reduce our monthly debt service payments. Bond interest rates are temporarily low enough to create these savings and help us fund part of the $1 million which we are still short, in paying for the new building. The request, therefore, is that we be allowed to utilize the Redevelopment Agency to issue the refinancing bonds, without incurring another 1% developer's fee to the city. In summary, the three requests listed above are urgently needed in order for us to move ahead with the projects named. Time is of the essence. Therefore, urgent action is requested. In short, we need the help of our mayor and city council now. A great deal depends on it. ~ THE AR~!!~~~~_,~~~~'!.I!,~~E..SYSTEM o o I, and the members of the community who serve on the three Boards of Directors at the Hospital, thank you and the City Council members for your dedicated efforts and support. We have made every effort to achieve all that we have accomplished-to-date, without asking for any special help or financial support from the city. In fact, we have very often provided such help and support for other organizations which have asked for it. The hospital and west side of San Bernardino do need your help now, however, and we are ready to expend the necessary time and energy to keep the new development going on the west side of our city. cc: Valerie Pope Ludlum, Councilwoman, City of San Bernardino Harold Hunt, Chairman of the Board, The Arro~head Health Care System Marvin Reiter, Chairman of the Board, San Bernardino Community Hospital Lionel Heller, Chairman of the Board, San Bernardino Community Hospital Foundation RHBIII/ jmj ~ THE AR!O~!I~~_.~~~,!~.~~~..SYSTEM o 0 ~ THE ARROWHEAD HEALTH CARE SYSTEM ~ ~ 1725 North Western Avenue San Bernardino, CA 92411 (714) 887-7061 September 28, 1988 Mayor Evlyn Wilcox City of San Bernardino 300 North liD" Street San Bernardino, CA, 92418 Dear Mayor Wilcox: I am writing to follow up on a meeting which was held earlier this week, regarding traffic signal improvements in the area around the new San Bernardino Community Hospital. The particular intersection which is the subject of this letter is located at Medical Center Drive and 19th Street. Richard Bennecke was kind enough to meet with me, Russ Mullins, Stan Chrzan, a traffic consultant, and the city's traffic engineer. Considerable differences of opinion existed concerning what degree of improvements were required in the traffic signals at the intersection mentioned. The Hospital felt that previous traffic engineers had come to the conclusion that the traffic signal at 19th street was unnecessary. Even if it were necessary, however, it was the feeling of the construction staff and the hospital's traffic consultants that only one of the three signals required upgrading. The current traffic engineer for the city had a different viewpoint, however. He felt that all three of the signals needed to be upgraded, with both the poles, wiring, signal heads, and interface with other signals being totally replaced. The traffic consultant has estimated that this work would cost approximately $ 95,000 to complete. Regardless of which approach is finally agreed upon, the Hospital is requesting that the city or redevelopment agency fund the improvements of the traffic signals. There are three primary reasons for this request . The upgrading of the signals is consistent with the goals and objectives of the city and redevelopment agency, in supporting the general improvement of the westside's efforts to improve itself . The Hospital continues to be need more than $ 1 million more to complete the new hospital construction project. It is currently working to pay this additional debt out of hospital opertions. Therefore, monies to fund improvements of off-site traffic signals are obviously not currently available. . When the San Bernardino Community Hospital issued bonds to finance its new building, the city denied a request to waive "Providing ExcellenCe In "-,,M CUe" The San Bernardino COmmunity HOIPltal . The Fontana Medica' centa' . Pacific Park Convaleacent Hospital Inland Counties R.source Center. Inland Cent., for 8ehavioral Medicin' . Adult 0.)' Health Car. Cente' Nationalln.Home Health Car. Agency - o o the $ 300,000+ fee, which the city collected from Us. Several city officials indicated, however, that the city would help the hospital with off-site improvements when the time came for these to be done. In this manner, the city and redevelopment agency could help support the hospital's efforts to complete such an important project for the westside. The traffic signal improvements at 19th and Medical Center Drive are perfect examples of such city improvements. In summary, I am respectfully requesting that the city or the Northwest redevelopment agency fund any improvement in the traffic signals which the city requires at 19th street and Medical Center Drive. Time is of the essence, in that we are currently on target to dedicate the new hospital tower in December. Thank you for your efforts, both past and future, in support of this vital community asset. cc: Richard Bennecke, Mayor'~ Executive Assistant Stan Chrzan, Vice President, Arrowhead Health Care Russ Mullins, Engineering Consultant ~ THE AR~!~!!~~-?..I~~i~'t~21~~..SYSTEM - o o REDEVELOPMENT AGENCY OF DIE CITY OF SAN BERNARDINO, CALIFORNIA STEVEN JL DUXE1T IIXIIClTIJYB IlIIlBCItlR Dece.ber 6, 1988 Mr. Bay B. Barton, III Arrowhead Bea1thc:are Syat_ 1725 N. Western Avenue San Bernardino, C& 92411 IE: NW - San Bernardino r.-...4ty Hospital Dear Mr. Barton: , You have not yet informed us whether the equal cost shariDa arranaeaent for the traffic signal work at 19th Street/Kedic:al Center Drive is acceptable to you. There would be a eap of .30,000 on the Redevelopment Aseney's participation, and funda would be reimbursable to the hospital after we have been provided with copies of work invoices. To formalize our understandiDa, an Owner's Participation Asreell811t (OPA), separate and apart from the ensUna DlapoBition and Joint Developllent Asreeaent (DBA) will be required. Pursuant to it, additiODal obligations will be placed on the hospital. These are that the 149,000 square foot ezpanBion will result in .300,000 in one-t1ae dty fees, a aiD1lnua of 50 new jobs and 126 new hospital beds to service the co..unity. Providina that you asree to the above terms, a draft of the OPA will be sent/to you shortly. Concernina the lot that you wlah to acquire for the laboratory and parkiDa, there is a resolution (copy enelosed) which would appear to pre elude our use of ennent domain in this ease. We have referred the matter to our special lesal couusel and hope for a favorable opiD1on. With regard to the DDA, we should have closed escrow on the Oranaewood Park land on December 1, 1988. I have spoken with our escrow asent, Lee AIm AdallS of Firat Ameriean Title, who informed ae this is not a problea provided both' parties asree to a delay. The Redevelopment Asency is lUI8I18ble if the hospital ean close within a reasonable period of tilll8 (say, by January l, 1989). Will you be able to aeet this deadline? By way of a reminder, before escrow can close, we muat have proof that the hospital has the financ:1al wherewithal to complete the office tower project. Finally, I have asked Mr. Chrzan of your office to provide us with a final Bite plan for the office tower. We need this to determine eDctly how IIlUch of the building will fall within the Redevelopment Project Area boundaries. CITY HALL . 300 NORTH HD" STREET . SAN BERNARDINO . CALIFORNIA 92418 . PHONE: (714) 384.5081 - .dL L o o Ill: W - San Bernardino Co..un1ty Hospital 'a.e 2 I .. also enclosilll for your iDforll&t1on a copy of a recent status update which I prepared. Copies have also been provided to Mayor Wllcoz and our new Ilrecutive Director, Steven Dukett. S1uc:e it will be a ujor new develoPDent on the ..staide of San Bernardino, .. are IIOSt aunous to see the office bu11dilll let UIldervay. I hope you C&I1 respond to .y quesU0D8 soon, Mr. Barton, aud please let.. It_ if there is auy other assistance .. C&I1 provide. S1uc:erely, ~Lw~ , 30lm Wood Developaent Spec1al1st JW:s.:4674G - J..- '* ~~. MEMORANDUM ~ ~ NO.1,. ".n. 1.. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CALlFORNIJ DATE November 28, 1988 TO FlIe FROM John Ifood, Development Specialist ~~ SUBJECT NW - CCJ4MUNITY HOSPITAL - STATUS UP-DATE DDA Per the amended DDA, escrow Is scheduled to close on December I, 1988. It appears that closing may be delayed by two to four weeks, since the hospital Is still completing Its financing arrangememts. Stan Chrzan has Indicated that the choice of builders has been narrowed down to two. My understanding Is that Cabot, Cabot and Forbes Is one of the contenders. At this point It appears that the office tower will be situated about 2/3 In the project area, with 1/3 outside. The hospital will be supplying us with a site plan In the near future. For our part, we have asked Dennis Barlow to prepare for escrow the requisite grant deed, note and deed of trus~. Also being processed are the satisfaction to escrow holder and a check for our share of the closing costs. OPA He have requested Dennis Barlow to draft an OPA. The Agency's obligation will be to reimburse fifty percent of the cost of traffic signal work at 19th Street and Medical Center Drive, with a cap on our exposure of $30,000. The hospital's obligation will be to perform the work and upfront Its cost. Additionally, It Is recognized that the hospital expansion will result In $300,000 In one-time City fees, 50+ new jobs and 126 new hospital beds to service the community. . , Sf I ~.J... ./ MemorandulII <Contln". if11' RE: NW - COtMINITY HOSPITAL - STATUS UP-DATE . November 28, 1988 Page 2 ~ There was a perIod of confusIon concernIng CIty requIrements for the traffIc sIgnal work. Mr. Chrzan has IndIcated that ccanunlcatlon problems between Brown and MullIns and PublIc Works appear to be resolved, and work Is agaIn progressIng satIsfactorIly. The hospItal has scheduled a December 7, 1988 grand openIng for the benefIt of the .edla. A for..l dedIcatIon ceremony Is set for December 13, 1988. The short tIme frame has gIven rIse to auch of the consternatIon In tryIng to work out engineering problems. A fInal matter whIch may affect the new OPA Is whether the Agency can utIlize eminent domaIn to help the hospital acquIre the property needed for the laboratory and parkIng. There Is a resolutIon which appears to prohIbIt thIs type of action by the Agency, but our specIal legal counsel Is revIewing the sItuatIon to see If an exceptIon can be ..de In thIs case. , JW:rm:4654G cc: Steve Dukett, ExecutIve Director Evlyn Wilcox, Mayor John Hoeger, Manager Nancy Davison, Development Analyst - o 0 CITY OF SAN BERNARDINO PUBLIC WORKS/ENGR. CASE CUP NO. 85-67 REQUIREMENTS '\.. AGENDA ITEM 6 HEARING DATE 1;l-1I-1S) PAGE -I< ENGINEERING DIVISION Project Description: C.U.P. No. 85-67 Community Hospital addition e~''t''I''lM' Da te : Prepared by: MWG Page 2 of 3 12/11/85 Reviewed by: pages 52. Traffic Engineering Requirements: CJ) .Modify existing signals at Highland/Muscott and Baseline/Muscott to allow controlled left turns in east- west directioJl. . ,- eJpgrade existing signal at 19th/Muscott to proviae controlled left turns east and west and to provide for future north-south interconnect. c) Provide two-way turn lane on 17th Street between Muscott and Western, and prohi bi t parki ng on both north and south side. ' d) Prohibit parking along west side of Western Avenue from 17th Street to Goullet Street. e) Prohibit parking along Muscott between 17th Street and service driveway. Striping"design on Muscott shall be as approved by the City Eng~peer. f) Realign service driveway to a1,ign with 19th Street. 53. Required Street Improvements: a) Construct handicap ramps per Std. 205 at all curb returns adjacent to the site and dedicate right-of-way for same. b) Construct 6'-wide sidewalk adjacent to curb where missing. Existing sidewalk along the north side of 17th Street shall be widened to provide at least 4' of clear width. c) Construct new drive approaches perCi ty Std. No. 204 unless otherwise approved by the City Engineer. Remove unused existing drive approaches or portions thereof and reconstruct full-height curb, gutter and sidewalk. \..