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Home My WebLink About08- Development Department D VELOPMENT DEPARTME _ i OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: KENNETH J. HENDERSON SUBJECT: CENTRAL CITY COMMERCE Executive Director CENTER-Woolworth Building Parking License DATE: July 15, 1993 -------------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action (s): On July 8, 1993 the Redevelopment Committee heard this item and recommended that it be forwarded to the Community Development Commission for approval. --------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: That the Community Development Commission authorize Agency Counsel to draft and the Executive Director to execute a fourth amendment to that certain Parking License and Easement With Option Rights, entered into with Central City Commerce Center on the 21st day of April, 1983, to further delay the start of monthly parking space payments until July 31, 2003; and that the Executive Director be authorized to execute all documents necessary to carry out the terms of the agreement. Administrator KENNETH J. HE ERSON Executive Director -------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Kenneth J_Henderson/John Hoeger Phone: 5081 Project Area(s): Central City Ward(s): One (1) Supporting Data Attached: Staff Report FUNDING REQUIREMENTS: Amount: $ N/A Source: N/A Budget Authority: N/A --------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: -------------------------------------------------------------------------------------------------------------------------- KJH:JBH:lag:wlwrth.cdc COMMISSION MEETING AGENDA MEETING DATE: 07/19/19(993 Agenda Item Number: 11 DE ' ' LOPMENT DEPARTA NT STAFF REPORT ---------------------------------------------------------------------------------------------------------------------- Central Citv Commerce Center _Woolworth Building Parking License Background The former Woolworth Building, located on the southwest corner of Fourth and "E" Streets, is one of eight historic structures in the greater downtown area being preserved, in part, through the Agency's assistance efforts. To facilitate the rehabilitation and leasing of the building, now owned by Central City Commerce Center, the Agency agreed in 1983 to obtain and provide eighty (80) parking spaces in the adjacent three-level parking structure that serves the Carousel Mall. In an agreement dated April 21, 1983, the terms of Agency assistance included: • Agency to obtain, from Central City Company (the owner and operator of the Carousel Mall), thirty-five (35) existing parking spaces in the three-level parking structure. • The Agency to sublease, also from Central City Company, an unimproved area on the ground floor of the structure which had been intended to become a retail building facing "E" Street. • The Agency to construct parking improvements estimated to cost $65,000 to provide forty-five (45) parking spaces from the previously unimproved ground floor area. _ • The Commerce Center to reimburse the Agency $65,000 in annual payments over five (5) years, interest free. • The Commerce Center to pay $20 per space per month ($1600 per month for the 80 spaces), commencing ninety (90) days after completion of the improvements. The Commerce Center, however, was unable to obtain tenants for the building and requested that the Agency provide relief from the space rental payments. The Agency has executed three subsequent amendments which, among other things, have increased the cost reimbursement to match the actual costs of $91,000 and which have also waived payment of $20 space rental fee until January 1, 1995. -------------------------------------------------------------------------------------------------------------------------- KJH:JBH:1ag:wlwrth.cdc COMMISSION MEETING AGENDA MEETING DATE: 07/19/1993 Agenda Item Number: ? DEVELOPMENT DEPAIr .TENT STAFF REPORT Woolworth Building Parking License July 14, 1993 Page Number -2- In 1988, the Commerce Center succeeded in obtaining the County as a tenant for the building. It has used the building to house its Child Protective Services operation. Starting at that time, Commerce Center did begin to pay $5.60 per month per space which goes to the City's General Fund and helps offset the cost of operation and maintenance of the parking structure. Agency Support The Agency supports the building in two direct ways. It makes payments on an increasing schedule to Central City Company for the space in the three-level structure. Currently that payment is $30,000 per year. In addition, starting in March of 1993, the Agency arranged for the County's Central Motor Pool to use sixty (60) spaces on the top level of the five-level parking structure adjacent to City Hall. Many, although not all, of these vehicles are for the use of County employees operating out of the Woolworth Building. The Agency and Main Street have also helped in other ways, including reducing rehabilitation costs through obtaining clearance for an above ground electrical transformer installation on Fourth Street which solved a difficult retrofit problem for the building. Other Agency projects, such as the building of Court Street Square and the construction of the new Government Center adjacent to the site, will benefit the building in the long term. County Lease Still, the owner's costs associated with rehabilitating the building for the County were high and the rent paid by the County has been relatively low. The County will pay about $.90 per month per square foot for the office area of the building on a modified gross basis (the tenant pays for electrical but other operating costs are provided by the landlord). While not generous, this appears to be a reasonable rent in the market place. The employees housed in the building are in the Child Protective Services division of the County Department of Public Social Service's operations. They earn above average salaries, as evidenced by the fact that they all have a four-year college degrees or better as a requirement for their positions. These employees are a positive asset in the downtown environment. The building contains very little visitor space and public use is limited almost solely to interviews with foster or adoptive parents. This helps limit demand on the downtown infrastructure. ------------------------------------------------------------------------------------------------------------------------- KJH:JBH:lag:wlwrth.edc COMMISSION MEETING AGENDA (W MEETING DATE: 07/19/1993 Agenda Item Number: DEVELOPMENT DEPAF TENT STAFF REPORT Woolworth Building Parking License July 14, 1993 Page Number -3- ---------------------------------------------------------------------------------------------------------------------- The County has, however, experienced difficulties revolving around parking for the building. These involve issues of availability, security and control. Both the Agency and the Central City Company have worked to provide solutions to the parking problems. The Central City Company has arranged to rent additional parking in the three-level structure. The Agency has provided for County parking in the five-level structure. Prior to committing to the new Central City Company lease, however, Commerce Center has wanted to be certain of the County's willingness to renew its lease of the building. County staff is now willing to recommend a proposed lease to the Board of Supervisors. Request for Additional Agency Assistance Based upon cash flows and tax returns provided to Agency staff, it appears that there is insufficient return produced in the building to both pay for the cost of parking and provide for significant cash after debt service. Reducing parking costs would directly increase the project's cash flow. To provide any cash at all requires a restructuring of the existing debt on the property. A new arrangement has been negotiated for the all-inclusive deed of trust holder which lowers the interest in first position from 10% to about 6%. A refinancing of the second position financing is also in process. Success for the second refinancing depends upon appraisal factors and the appraised value will be increased if operating costs such as parking can be lowered. Both to increase project yield and to improve its ability to successfully refinance the building, the owner is requesting that the Agency once again extend the waiver period for parking lot rent. It asks to be relieved of payments which total $19,200 per year until July 31, 2003. The Agency will continue to make payments of $30,000 per year to Central City Company and the owner will continue to make the payments of $5,600 per year to the City for parking maintenance. Recommendation Staff recommends adoption of the form motion. KENNETH J. HENDERSON, Executive Director Development Department -------------------------------------------------------------------------------------------------------------------------- KJH:JBH:1ag:wlwrth.cdc COMMISSION MEETING AGENDA MEETING DATE: 07/19/1993 Agenda Item Number: �_