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HomeMy WebLinkAbout02- Community Development Commission REDEVELOPMENT COMMITTEE M I N U T E S SPECIAL MEETING September 2, 1993 3:00 p.m. The regular meeting of the Redevelopment Committee was called to order by Chairwoman Valerie Pope-Ludlam at 3:05 p.m. in the Economic Development Agency Board Room, 201 North "E" Street, San Bernardino, California. ROLL CALL Roll call was taken with the following members present: Chairwoman Valerie Pope-Ludlam and Committee Members Edward Negrete and Ralph Hernandez. Mayor Tom Minor was also in attendance. STAFF PRESENT Timothy C. Steinhaus, Administrator, Economic Development Agency; Kenneth J. Henderson, Executive Director, Development Department; Richard Morillo, Senior Assistant City Attorney; Phil Arvizo, Executive Assistant to the Council; Lorraine Velarde, Executive Assistant to the Mayor; La Vonda M-Pearson, Recording Secretary, Development Department. OTHERS IN ATTENDANCE Gil Lara, Larcon Development; Al Steward, Steward and Associates; Ari Miller, Camden Development; Jack Kelly, AMS; Patricia Green, Vanir Development; Sam Catalano, Carousel Mall. 1. UNIVERSITY VILLAGE ASSISTANCE REQUEST Chairwoman Pope-Ludlam explained that the reason for this meeting was to discuss the alternatives developed by staff to fund the University Village Project. Kenneth J. Henderson, Executive Director, Development Department, stated that staff was directed by the Committee at its last regularly scheduled meeting to develop alternative ways to finance this project. John Hoeger, Project Manager, Development Department, gave a brief description of the alternatives developed by staff and discussed with Camden Development. They are as follows: A. A contribution of $650, 000. B. A contribution of $650, 000, plus a loan guarantee of $700, 000. SPECIAL MEETING REDEVELOPMENT COMMITTEE lmp:rminsepl.s - 1 - SEPTEMBER 2, 1993 C. A contribution of $650, 000, plus an agency loan of $700, 000. D. A contribution of $650, 000 plus an Agency loan of $700, 000 which can be paid partially by performance. E. A contribution of $650,000 plus Agency purchase of the hillside area for $750, 000. Mr. Hoeger indicated that the source of funding for this project would depend on the outcome of the police facility funding. Mr. Henderson stated that in discussions with Mr. Miller and Chairwoman Pope-Ludlam regarding the alternatives, it was determined that some of the alternatives would not be feasible for Mr. Miller in terms of the Agency assistance. Mr. Henderson explained that if Mr. Miller was granted Alternative B, he would be required to make loan repayments immediately to the private institution. Mr. Miller had explained to him that he could not support a loan payment amount of that level with only the first phase rental payments. Mayor Minor questioned why the Agency would be willing to purchase the hillside. Mr. Henderson explained that the purchase of the hillside would free-up funds for the developer. Mayor Minor stated for information only, that the Hughes Supermarket Vice President would be seeking assistance from the Agency for offsite improvement costs. Committee Member Hernandez expressed concern regarding the Agency not having the money to fund this project or to finance the police station. He felt that there were other projects in a greater need for financing. Mr. Henderson indicated that Camden Development had already begun grading the land for this project, and he urged the Committee to give it serious consideration. Al Steward, Steward and Associates, stated that after discussions with Mr. Miller, they concluded that the project could be completed with the $650, 000 for offsite improvements and a loan of $700, 000 with a waiting period of 36 months for repayment to allow for the completion of Phase II. Chairwoman Pope-Ludlam stated that Mr. Miller was required to pay over $1 million dollars in fees that would come back to the City. Chairwoman Pope-Ludlam recommended allowing Mr. Miller the 36 month waiting period to begin repayment of the loan. Mr. Steward felt that $600, 000 would be a sufficient loan amount instead of the $700, 000. Mayor Minor questioned the funding source for the $600, 000 loan. SPECIAL MEETING REDEVELOPMENT COMMITTEE 1mp:rmi-nsepl.s - 2 - SEPTEMBER 2, 1993 Mr. Steward explained that Phase II of the project should be completely leased out within a three (3) year time period. He requested that no interest be accrued on the loan for that time. Mr. Hoeger explained that a relief of interest for the three (3) year time period would cost the Agency approximately $50, 000 a year. Mr. Henderson stated that if bond proceeds were used to fund this project, only 10% of the monies loaned out could be repaid. He stated that if the project was funded with tax increment, the funds would come from the State College area. Mr. Hoeger stated that funding the police station with Certificates of Participation would free-up other monies that could be used for this project. Chairwoman Pope-Ludlam spoke on businesses being on the tax roll and the benefit that it was for the City. She also spoke on the need not to use all of the Redevelopment Agency's funds for City projects. Mr. Hoeger recommended the Committee finance the station with COPS that would be paid for by the City's general fund, which would free-up money currently allocated by the agency. He stated that bond proceeds could be shifted and other funds could be used for the University Village Project. Committee Member Hernandez expressed concern regarding the burden of the police facility being placed on the general fund. Mr. Henderson explained the repayment process for bonds. Mr. Steward commented that this project would contribute $100, 000 in property taxes and $200, 000 a year in taxes. Discussion ensued regarding the COP for the police station. Mr. Henderson clarified that the Commission had already approved the building of the police facility, the discussion at hand was only referring to changing the funding source in order to allow the agency to assist more projects. Gil Lara, Larcon Development, advised the Committee to allow the Agency the ability to fund tax based projects. He emphasized the need to encourage developers to locate within San Bernardino. Mr. Hoeger recommended that Mr. Miller be given the $650, 000 for off-site improvements and a loan for $600, 000 with payments beginning in 36 months or the development of Phase II, whichever comes first. He also recommended that the interest rate be at prime plus two. Mr. Steward requested that a reduction of the interest rate be given to Camden Development. SPECIAL MEETING REDEVELOPMENT COMMITTEE lmp:rmi.nsepl.s - 3 - SEPTEMBER 2, 1993 Mr. Hoeger explained that if Mr. Miller was given a loan of $750, 000, it would allow him to prepay the interest on the loan. Committee Member Hernandez requested a need to discuss this item with the City Administrator since the general fund would be impacted by the approval of this item. RECOMMENDATION The Committee recommended that the Community Development Commission make a contribution of $650, 000 for off-site improvements, and that a loan in the amount of $750, 000 be make to Camden Development with principal and interest deferred, not due and payable until rents are guaranteed by Phase II of the project not-to-exceed 36 months, and that the loan be due and payable in five (5) years. This recommendation was approved by a 2-1 vote, with Committee Member Hernandez abstaining. ITEMS NOT ON THE AGENDA Committee Member Hernandez made a motion, seconded by Committee Member Negrete, that this item arose after the posting of the agenda. Ayes: Chairwoman Pope-Ludlam; Committee Members Negrete; Hernandez. Gil Lara, Larcon Development, explained that at a meeting of the downtown businesses regarding Route 66, 39 areas of the City were pointed out as needing to be cleaned-up for the Route 66 Rendezvous. The clean-up included weed abatement, graffiti, curbs and gutters and freeway entrances. He also requested the Mayor and Common Council do a proclamation to have local businesses clean-up their buildings. He stated that there would be approximately 50, 000 people in the City, and that this would be opportunity for publicity for San Bernardino. Mr. Lara felt that the resources were already available in San Bernardino and that there was only a need to re-priorize current obligations. Committee Member Hernandez indicated that the true Route 66 route was located on Mt. Vernon and the need to clean up the tumbleweeds in that area. Mr. Lara suggested that a representative from the Mayor's Office work with the downtown businesses to come up with a feasible solution for the clean-up. He stated that the businesses had $1, 500 to contribute toward this effort. Kenneth J. Henderson, Executive Director, Development Department, indicated that Los Padrinos was funded for a year and that they could be used along with Pat Leathers from the Mayor's Office, Code Enforcement and Public Services to complete the clean-up efforts. Committee Member Hernandez recommended that the $1,500 offered by the local businesses be used to assist business owners with their clean-up efforts. SPECIAL MEETING REDEVELOPMENT COMMITTEE lmp:rmi.nsepl.s - 4 - SEPTEMBER 2, 1993 0 Discussion ensued regarding the available resources to provide the clean-up efforts. Mr. Henderson indicated that he would write a memorandum for the Mayor's signature informing Max Alonso, Pat Leathers, Code Enforcement, Public Services and Ann Harris regarding the efforts needed by their offices. Ann Harris, Executive Director, Main Street, spoke on the clean- up efforts currently taking place for the Route 66 event. Mayor Minor recommended that the Convention Center and Visitors Bureau be informed of all activities taking place in reference to the event. Discussion ensued regarding clean-up efforts surrounding the Route 66 event and also the grand-opening event sponsored by Miller and Schroeder on September 17, 1993. 2. ADJOURN TO CLOSED SESSION There were no items for discussion in Closed Session. 3. ADJOURNMENT There being no further business, the meeting of the Redevelopment Committee was adjourned at 4:15 p.m. APPROVED BY: VALERIE POPE-LUDLAM, Chairwoman Redevelopment Committee SPECIAL MEETING REDEVELOPMENT COMMITTEE lmp:rminsepl.s - 5 - SEPTEMBER 2, 1993