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Home My WebLink AboutR7- Redevelopment Agency REC 'VELOPMENT AGENCY-R'"IUEST FOR C 1MMISSION/COUNCIL AC" ION From: Glenda Saul, Executive Director Subject: UDAG WITHDRAWAL - THE SUNWEST PROJECT Dept: Redevelopment Agency Date: March 14, 1988 Synopsis of Previous Commission/Council action: 10-05-87 Council authorized staff to proceed with preparation of UDAG Applications. 11-02-87 First Public Hearing 11-16-87 Second Public Hearing Resolution 87-413 and 87-414 adopted approving applications. 01-19-88 Status Report Received and Filed - Applications placed in holdover Recommended motion: (MAYOR AND COMMON COUNCIL)) Move that the Mayor send a letter to the Department of Housing and Urban Development requesting withdrawal of the Sunwest Development UDAG Application. Signature Contact person: Glenda Saul Phone: 383-5081 YES 3rd Supporting data attached: Ward: N/A SV & SEIP FUNDING REQUIREMENTS: Amount: $ Project: March 21, 1988 No adverse Impact on City: Date: Council Notes: g 7t 6�r A end ar 2,. S T A F F R E P O R T Staff and the Redevelopment Committee recommend that the Mayor be authorized to send a letter to the Department of Housing and Urban Development requesting the "The Sunwest" UDAG Applications be withdrawn. BACKGROUND On November 30, 1987 two applications for UDAG funding were submitted to the Department of Housing and Urban Development. Both of these projects were placed on holdover until the next round. It was determined in December, 1987 that the Sunwest Project could not go foreword as originally anticipated due to the inability to amend the building heights within the Southeast Industrial Park Project Area from three stories to five stories. Development at three stories and a parking structure are not economically possible. The developer, Mery Simchowitz, would not be able to obtain a financial commitment for the construction of a project with only 1% return on equity. If the developer was able to build five story buildings and a parking structure, the project would be feasible with UDAG assistance. The City through its consultant has provided for a study to evaluate the effects of increased building height. The study indicates a negative traffic impact. Mitigation measures are now being evaluated. On February 24, 1988 staff met with Mr. Larry Hoak, HUD, Los Angeles Office, to review our various UDAG projects. Of particular concern was the upcoming review process for UDAG from April through June for the July UDAG round. Mr. Hoaks indicated that if the City did not believe that the traffic problem could be mitigated by this review period (April — June) we should ask for withdrawal of the application. He explained that at such time as mitigation measures are resolved and the developer is able to increase the building height, the City could resubmit the application. We have discussed the withdrawal of this project with the developer, and he is agreeable. Staff recommends that the Mayor be authorized to direct a letter to the Department of Housing and Urban Development seeking withdrawal of the Sunwest project UDAG application. A summary sheet of the project is attached along with a copy of the site map. Also included is a copy of the proposed letter to UDAG. 11 74R/ST./mv THE SUNWEST' PROJECT - UDAG APPLICATION A. Development 4 Three Story Office Buildings 4 Five Story Office Buildings and Parking Structure and Parking Structure B. Location Southeast Industrial Park Project Area. Generally bounded by E Street on the west, Hospitality Lane on the south, Hunts Lane on the east. C. Estimated Value $57,333,265 $88,544,428 D. Square Footage 312,600 sq.ft. 521 ,000 sq. ft. E. Estimated Jobs 1 ,153 1 ,900 F. Grant Request $11 ,000,000 (19.7X) $17,000,000 (19.2X) ; ,. G. Estimated One Time City Fees $800,000 $1 ,250,000 H. "But For" Clause Due to the excessive costs of the parking structure, the project cannot proceed without assistance. $7,349,000 for 800 spaces $12,689.092 for 1 ,397 spaces I. UDAG Payback 20 yr loan to be repaid from 20 yr loan to be repaid from available net cash flow at available net cash flow at 6% interest. City to parti- 6% interest. City to parti- cipate in 19.7% of net cipate in 19.2% of net profits upon sale. profits upon sale. 1003S i • eZ2 e ° RED C ti• u L _ ,_(� OQ > � p = > Z m:V w � O 0.w• \` U s . P . M f • _ 'w X. \ ' ��ff • Oil N t f LIZ ! � L O • 7 N r . +a:- . C- ° c a n s a X ..� •UN=ENT COUNT a p Ia H w.. 11. ■ too n• .040 ou rh = i i t o t • \ + f ii 7A � ' e yii w M o } �� i 1 • / \ � f • SUNWEST DEVELOPMENT a Ti i • THE 11rcNOw IT&comp. ^ ao�VOIV•M/O , �'.�..�....� ��•..nu.n ua.•n•r �rrN.n.uy w Wt++••f 1 BROKERS tc: .p'•• ""°"""' GLENDASAU_ REDEVELOPMENT AGENCY EXECUTIVE DIRECTOR OF THE CITY OF SAN BERNARDINO, CALIFORNIA March 22, 1988 Stanley Newman, Director Office of Urban Development Action Grants U.S. Department of Housing and Urban Development 451 Seventh Street, S.W. Washington D.C. 20410 RE: UDAG APPLICATION - THE SUNWEST DEVELOPMENT Dear Mr. Newman: We respectfully request that our application for an Urban Development Action Grant for The Sunwest Project be withdrawn. The application was submitted for the construction of four (4) three-story office building and an associated parking structure. The developer desires to increase the height of his buildings from 3 to 5 stories necessitating a larger parking structure (1,400 spaces vs. 800 now proposed). A traffic study with impact mitigation measures is under way. The mitigation of any traffic impact due to the increase of these buildings from 3 to 5 stories cannot be resolved in time for the next UDAG round. Once these traffic considerations are resolved it is our intention to update the application and resubmit for consideration. Should you need any further information, please do not hesitate to contact Glenda Saul or Sandy Lowder of the Redevelopment Agency at (714) 384-5081. Very truly yours, Evlyn Wilcox, Mayor EW:mv:1177R cc: Larry Hoaks U.S. Department of Housing and Urban Development 1615 W. Olympic Blvd. , Suite 900 Los Angeles, CA 90015-3801 CITY HALL • 300 NORTH "D" STREET • SAN BERNARDINO • CALIFORNIA 92418 9 PHONE: (714)384-5081 TELEX: 6711291 RDEV UW March 22, 1988 Page 2 cc's: Continued Steve Sacks Department of Housing and Urban Development 450 Golden State Avenue P.O. Bog 36003 San Francisco, CA 92102-3448 Mery Simchowitz The Simchowitz Corporation 348 Hospitality Lane San Bernardino, CA 92410 Scott Rodde National Development Council 1500 Third Street, Suite D Napa, CA 94558