HomeMy WebLinkAbout06.A- Community Development 6.A
RESOLUTION (ID # 4409) DOC ID: 4409 A
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Information/Report
From: Mark Persico M/CC Meeting Date: 08/15/2016
Prepared by: Brenda Leggitt, (909) 384-
5057
Dept: Community Development Ward(s): 1
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing
and Directing the Execution Of: 1) the First Amendment to the Exclusive Negotiation
Agreement (ENA) and 2) the Theater Square Development Services Agreement (DSA)
with AECOM Technical Services, Inc. and the Fransen Company, Inc. for the
Redevelopment of Certain Real Property Comprising Approximately 48.5 Acres,
Commonly Known as Carousel Mall and Regal Theaters, Located Generally at 300 and
450 North "E" Street and at the Northwest Corner of Fourth Street and "E" Street, San
Bernardino, California. (#4409)
Current Business Registration Certificate: Not Applicable
Financial Impact:
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
On November 2, 2015, the Mayor and Common Council approved a six month
Exclusive Negotiating Agreement (ENA) regarding the disposition and development of
Theatre Square and Carousel Mall with AECOM and The Fransen Company
(AECOM/Fransen), with a six month extension provided certain terms are met.
Background:
Redevelopment ended in California on February 1, 2012, thus starting the lengthy
redevelopment wind down process. As part of the elimination of redevelopment,
agencies were required to transfer their assets - mostly property - to the local
jurisdiction through preparation of a Long Range Property Management Plan (LRPMP).
The LRPMP for San Bernardino was prepared in September 2015 and amended in
December 2015, and finally approved by the State Department of Finance on December
31, 2015. The Plan divided property into three main categories: government use, hold
for future development, and for sale.
The Carousel Mall (LRPMP site #20) and Theater Square (LRMPP site #21) were
designated in the category "hold for future development." As such, these properties,
among others, are to be transferred to the City for disposition and development in
accordance with the City's determination as to appropriate use. Before property can be
sold, however, the City is required to have Compensation Agreement with the other
taxing entities - primarily the County of San Bernardino - regarding how the sale
proceeds will be distributed. Staff has had preliminary discussions with the County
Updated: 8/9/2016 by Jolena E. Grider A I Packet Pg. 167
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about these sites but nothing is finalized at this time.
Over the past eight months City staff and AECOM/Fransen have been working
collaboratively to negotiate terms of a Development Services Agreement (DSA) for the
disposition and ultimate development of Theater Square. (Note: the original ENA refers
to a Master Development Agreement (MDA); however, for clarity purposes that
terminology has been replaced with DSA.) While the ENA covered both Theater Square
and the Carousel Mall, the proposed DSA only covers Theater Square - the first phase
of the overall project.
The project was divided into two phases - Theater Square and Carousel Mall - after it
became apparent that the Carousel Mall site couldn't be redeveloped due to the
Reciprocal Easement Agreement (REA). Staff and the development team have
therefore been pursuing parallel paths, the termination of the REA and development on
the Theater Square site concurrently. There are three parties to the REA: the City, the
San Manuel Band of Mission Indians and El Corte Ingles (ECI), which owns the former
Harris Department Store building. Additionally, the REA limits uses of the Carousel Mall
site to retail only. Staff has had numerous discussions with the Tribe and ECI about
terminating the REA, and we've reached agreement in principle.
Theater Square is approximately 5.5 acres and contains Regal Cinema and related
surface parking and two vacant grass pads that can accommodate up to approximately
15,000 square feet of retail/restaurant space. The Regal Cinemas building contains 14
movie screens and an additional approximately 13,000 square feet of former theater
space that can be converted to retail/restaurant space. Carousel Mall (formerly the
Central City Mall) opened in 1973 with 52 in-line shops and 3 anchor tenants. The Mall
site is approximately 42.6 acres (40.1 acres owned by the City and 2.5 acres owned by
the San Manuel Band of Mission Indians) and contains 741,250 square feet of retail
space.
As previously discussed with the Mayor and Common Council, staff is working
cooperatively with the Tribe to gain control of the 2.5 acres owned by them. There are
two additional buildings - the former Harris Department Store Building (owned by ECI)
at 1.5 acres and the Andreson Building at 0.3 acres - that are integral to the Mall but not
under Successor Agency/City control. Both of these historic buildings will remain and
may potentially be incorporated into the new project.
A community listening session was held on March 28, 2016 (Exhibit 1). Approximately
150 people attended the two sessions - noontime and evening. At the sessions a series
of image boards were presented showing retail, housing and office uses set in the
context of a mixed-use project. At the conclusion of the meetings there appears to be
broad support for the idea of converting the former Mall to a mixed use project. In
addition to the listening sessions, the City participated in the Annual Inland Empire
Survey conducted by the Institute of Applied Research at Cal State San Bernardino.
The phone survey results are incorporated into the Listening Session Report (Exhibit 2).
Analysis:
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Approval of the Theater Square DSA (Exhibit 3) is a significant milestone in the rebirth
of downtown. All across the nation older urban areas are being redeveloped through the
introduction of new retail, restaurant, and residential uses. While the DSA only
addresses the 5.5 acre site it contains reference to Carousel Mall because the sites are
interrelated. Staff anticipates that the DSA for the Carousel Mall site will be completed
and ready for consideration by the Mayor and Common Council in late 2016.
The City owns Theater Square with the Regal Cinema as a tenant of the City's. Under
the terms of the 2012 lease, Regal pays "Special Rent" which is currently averaging
about $53,000 on a gross monthly basis. The rent will reset to "Full Rent" after the
"Ongoing Development Requirements" have been met. The "Ongoing Development
Requirements" specify that a minimum of 2,500 square feet of restaurant space must be
open and operating before "Full Rent" is realized. Because the Theater Square and
Regal Cinema will be a more valuable asset after the "Ongoing Development
Requirements" are met, no sale of the property will occur until the "Ongoing
Development Requirements" are fulfilled.
Under the proposed DSA, AECOM/Fransen is required to prepare, at their cost, a
Strategic Plan for City approval. Pursuant to Section 2.1 the Strategic Plan shall contain
a site plan, proposed land uses, design guidelines, a property management plan, and a
Comprehensive Business Plan which details the proposal to sell Regal Cinemas and
develop the balance of Theater Square. Additionally, the Strategic Plan will outline the
financial relationship, if any, between Theater Square and the Carousel Mall site.
Subject to meeting all of the conditions of the DSA, the Strategic Plan and
Comprehensive Business Plan may be approved by the Mayor and City Council.
The proposed DSA is not structured to require AECOM/Fransen to assume the role of a
traditional developer. A traditional developer purchases the property and assumes all
risk for the construction and ultimate sale of the buildings. In this case, the City
assumes the role and risk of traditional developer and AECOM/Fransen acts as a
consultant in the sale of Regal Cinemas and the lease of the adjacent development
sites. The compensation received by AECOM/Fransen varies depending upon the role
assumed. The compensation percentages are within industry standards based upon an
independent analysis completed by Keyser Marston Associates, a real estate consultant
under contract to the City for this project.
Next Steps:
Following approval of the Strategic Plan, the Regal Cinema building and Theater
Square property will be sold or leased, and up to approximately 28,000 square feet of
new retail and restaurant space will be constructed. Concurrent with the sale or lease of
Theater Square, the City must reach agreement with the taxing entities regarding how
the sale proceeds will be distributed.
The Compensation Agreement and all land sales must be separately approved by the
Mayor and Common Council. The Planning Commission or Development and
Environmental Review Committee will review and approve the land use entitlements
pursuant to the Development Code.
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Exclusive Negotiating Agreement Amendment:
In addition to approval of the DSA, staff is recommending an amendment to the ENA.
Section 11.4 of the ENA requires payment of a monthly nonrefundable deposit of
$10,000 (up to a maximum of $80,000) to cover City expenses related to negotiation of
the DSA. Payments were suspended in February pending termination of the Carousel
Mall Reciprocal Easement Agreement (REA), when it was discovered that the REA
prohibits construction of housing on the Mall site. AECOM/Fransen paid $25,000 of the
required nonrefundable deposit prior to payments being suspended by former staff
managing the project. However, Section 4 of the ENA indicates that failure to make the
first six monthly payments voids the ENA extension. Staff views this as a technical issue
because the parties have continued to meet regularly and negotiate in good faith, and
work together to market Theater Square and terminate the Mall REA. Staff, therefore,
recommends that the Mayor and Common Council adopt the "First Amendment to the
Exclusive Negotiating Agreement" (Exhibit 4). The amendment extends the negotiating
period through May 2, 2017 and ties payment of the remaining balance of the non-
refundable deposit to termination of the REA.
Other Considerations:
As part of the overall Carousel Mall project the long-term sustainability of the California
Theater also needs to be addressed. A separate study is being conducted by a
specialized theater consultant - JB Research - who is examining current theater
operations and presenting options for a theater operating company. The theater needs
analysis is on-going and should be concluded by late summer.
As previously discussed with the Council, there are excess bond proceeds that could
serve as an additional source of funding for the overall project. The 2010A Tax
Allocation Bond has an excess of $6,045,430 some or all of which could be used for the
larger Carousel Mall project.
Conclusion:
Staff is recommending that the Mayor and Common Council adopt the attached
Resolution No. XXX thereby approving:
1. An amendment to the Exclusive Negotiation Agreement that will ensure that Staff
and AECOM/Fransen can successfully execute the project after the Carousel Mall
Reciprocal Easement Agreement is terminated.
2. The DSA that will allow for the development of the Theater Square project, with the
expectation that the net proceeds therefrom will provide funding for the second
phase of the project - demolition of the Carousel Mall.
Exhibits:
1. Community Listening Session
2. Phone Survey Results
3. Theater Square Development Services Agreement
4. First Amendment to the Exclusive Negotiation Agreement
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5. Resolution Approving First Amendment to the ENA and Theater Square DSA
City Attorney Review:
Supporting Documents:
MCC—Resolution—Theater Square DSA (DOC)
First_Amendment_ENA (PDF)
agrmt. 4409 (PDF)
Community Listening Session #1_Summary_Final (PDF)
Phone Survey_June 2016 (PDF)
Updated: 8/9/2016 by Jolena E. Grider A Packet Pg. 171
6.A.a
1 RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
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SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF: 1)
3 THE FIRST AMENDMENT TO THE EXCLUSIVE NEGOTIATION AGREEMENT £
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(ENA) AND 2) THE THEATER SQUARE DEVELOPMENT SERVICES
4 AGREEMENT (DSA) WITH AECOM TECHNICAL SERVICES, INC. AND THE a
5 FRANSEN COMPANY, INC. FOR THE REDEVELOPMENT OF CERTAIN REAL
PROPERTY COMPRISING APPROXIMATELY 48.5 ACRES, COMMONLY
6 KNOWN AS CAROUSEL MALL AND REGAL THEATERS, LOCATED cn
7 GENERALLY AT 300 AND 450 NORTH "E" STREET AND AT THE NORTHWEST
CORNER OF FOURTH STREET AND "E" STREET, SAN BERNARDINO, a
8 CALIFORNIA 0
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WHEREAS, on November 2, 2015, Mayor and Common Council approved an
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11 Exclusive Negotiation Agreement with AECOM Technical Services, Inc. and the Fransen L-
12 Company, Inc. (AECOM/Fransen) with the intent to redevelop the Carousel Mall and Theater
13
Square sites;
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14 WHEREAS, on December 31, 2015, the California State Department of Finance
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approved the Long Range Property Management Plan (LRPMP) for the Successor Agency to
16
17 the Redevelopment Agency of the City of San Bernardino; �¢
18 WHEREAS, the Carousel Mall site is listed as site #20 on the LRPMP and Theater
19 Square is listed as site #21 on the LRPMP. Furthermore, both sites were approved as hold for
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20 future development;
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WHEREAS, the City and AECOM/Fransen have negotiated in good faith and made 2
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23 significant progress toward the future development of the overall sites;
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WHEREAS,HEREAS, it is in the best interests of the City, and its residents for the City to
25 execute the First Amendment to the ENA and to execute the Theater Square (DSA).
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NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
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COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
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1 SECTION 1. The Mayor and Common Council find that the above-stated Recitals
2 are true and hereby adopt and incorporate them herein.
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SECTION 2. The Mayor and Common Council hereby approve the First Amendment
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5 to the Exclusive Negotiation Agreement (ENA) approved on November 2, 2015, and a
6 authorize and direct the City Manager to take such steps and sign such documents as
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7 necessary to Execute the First Amendment to the ENA, including but not limited to the E
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8 making of clerical or non-substantive revisions to the ENA as may be necessary to effectuate
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its intent. L_
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11 SECTION 3. The Major and Common Council hereby approve the Development
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Services Agreement (DSA), and authorize and direct the City Manager to take such steps and
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sign such documents as necessary to Execute the DSA, including but not limited to the :!t
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15 making of clerical or non-substantive revisions to the DSA as may be necessary to effectuate o
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16 its intent.
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18 SECTION 4.—Compliance with the California Environmental Quality Act.
19 Approval of the First Amendment to the ENA and approval of the DSA is not considered a Un
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20 project under the California Environmental Quality Act (CEQA), pursuant to CEQA
21 Guidelines Section 15378(a). c'
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SECTION 5. Severability: If any section, subsection, subdivision, sentence, or 0
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clause or phrase in this Resolution or any part thereof is for any reason held to be vi
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ZS unconstitutional, invalid or ineffective by any court of competent jurisdiction, such decision
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26 shall not affect the validity or effectiveness of the remaining portions of this Resolution or any
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27 part thereof. The Mayor and Common Council hereby declares that it would have adopted a
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1 each section irrespective of the fact that any one or more subsections, subdivisions, sentences,
2 clauses, or phrases be declared unconstitutional, invalid, or ineffective.
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6.A.a
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF: 1)
2 THE FIRST AMENDMENT TO THE EXCLUSIVE NEGOTIATION AGREEMENT
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(ENA) AND 2) THE THEATER SQUARE DEVELOPMENT SERVICES
3 AGREEMENT (DSA) WITH AECOM TECHNICAL SERVICES, INC. AND THE E
4 FRANSEN COMPANY, INC. FOR THE REDEVELOPMENT OF CERTAIN REAL
PROPERTY COMPRISING APPROXIMATELY 48.5 ACRES, COMMONLY a
5 KNOWN AS CAROUSEL MALL AND REGAL THEATERS, LOCATED 0
GENERALLY AT 300 AND 450 NORTH "E" STREET AND AT THE NORTHWEST Z
6 CORNER OF FOURTH STREET AND "E" STREET, SAN BERNARDINO, in
7 CALIFORNIA
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8 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor o
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9 and Common Council of the City of San Bernardino at a regular meeting thereof, held on the o
day of , 2016,by the following vote to wit:
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11 Council Members: AYES NAYS ABSTAIN ABSENT
12 MARQUEZ
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13 BARRIOS °
14 VALDIVIA
15 SHORETT o
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16 NICKEL
17 RICHARD N
18 MULVIHILL °
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Georgeann Hanna, CMC, City Clerk
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21 The foregoing Resolution is hereby approved this day of , 2016. -1
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R. CAREY DAVIS, Mayor
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Approved as to form: City of San Bernardino
25 Gary D. Saenz, City Attorney
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27 By:
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Mr I FIRST AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT
This FIRST AMENDMENT TO EXCLUSIVE NEGOTIATION AGREEMENT (the
"First Amendment"), dated, for identification purposes only, as of August , 2016 (the "First
Amendment Date"), is entered into by and between THE CITY OF SAN BERNARDINO, a
California charter city ("City"), and AECOM TECHNICAL SERVICES, INC., a California
corporation ("AECOM")[an affiliate of AECOM, a Delaware corporation formerly known as
AECOM Technology Corporation and/or AECOM Technologies ("AECOM Parent")% and THE
FRANSEN COMPANY, INC., a California corporation ("Fransen", and together with AECOM, E
"Developer"). L
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RECITALS d
A. City and Developer previously entered into an instrument entitled "Exclusive
Negotiation Agreement" dated as of November 2, 2015 (the "Original ENA"). The Original ENA Cn
contains provisions concerning the planning and redevelopment of certain property as more
particularly described therein. a
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B. City and Developer are proceeding with the implementation of activities described in d
the Original ENA, and have made significant progress thereunder, including entry into that certain
Theatre Square Development Services Agreement dated as of August 15, 2016. In connection
therewith, each of City and Developer mutually desires to amend certain provisions of the Original
ENA, as more particularly set forth below in this First Amendment. L
C. This First Amendment is in the vital and best interest of the City and the health,
safety and welfare of its residents.
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NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and
conditions herein contained,the parties hereto agree as follows: a
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1. Except to the extent expressly defined herein, capitalized terms shall have the
meanings established under the Original ENA. The Original ENA and this First Amendment
together are referred to as the"Amended Agreement."
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2. Section 4 of the Original ENA is revised to read as follow: a
'Negotiation Period. The Parties will negotiate the MDA for that period
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commencing from the Effective Date and continuing until November 2, 2016 (with
the resulting period as defined thereby constituting the `Negotiation Period', unless
negotiations are sooner terminated as provided herein. The Negotiation Period and
this Amended Agreement shall automatically be extended for one (1) additional c
period to May 2, 2017 unless (i) the Council of the City (the "Council") makes a Q
finding that either Developer is not in material compliance with this Amended
Agreement or the Parties have not achieved significant progress in negotiation of the
MDA, or (ii) Developer has failed to make payment of one or more payments
required to be made to City if required pursuant to Section 11.4 below. In the event
of the occurrence of(i) or(ii) above,the Negotiation Period and this Agreement shall
automatically terminate.
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3. Section 11.4 of the Original ENA is revised to read as follows:
Professional Services Costs; Non-Refundable Deposit. Developer has disbursed to
City the sum of Twenty Five Thousand Dollars (the "Initial Installment") as a deposit
pursuant to the Original ENA; in addition, Developer shall disburse to City the additional
sum of Fifty Five Thousand Dollars (the "Second Installment" and, together with the Initial
Installment, the "Deposit") not later than the thirtieth day following delivery to Developer of
written confirmation of the recordation in the official land records of the County Recorder of
the County of San Bernardino ("Official Records") of an instrument terminating that certain
instrument entitled "Declaration of Restrictions, Construction, Operation and Easement aEi
Agreement" dated as of December 24, 1970 and recorded among Official Records
commencing at Book 7580 Page 280 (the "REA"), which termination instrument shall be a
referred to as the"REA Termination Agreement." Developer's failure to deliver timely all or
any portion of the Deposit shall be a default of this Amended Agreement. The Deposit may
be used by the City for third party costs in connection with the negotiation of the MDA,
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including without limitation the City's legal fees, financial consulting services and other =
purposes with no obligation to account therefor. Neither the City nor the Successor Agency E
shall have any obligation (with respect to the Deposit or otherwise)to reimburse Developer's c
costs for any Reports prepared prior to the entry into the MDA or on account of any other
activities of Developer. Excepting only to the extent expressly provided in the succeeding o
sentence, Developer waives and releases City from any duty to make payment to Developer `
from the Deposit. The Deposit shall be non-refundable unless the City shall be found by a
court or other tribunal having jurisdiction to have materially breached this Amended N
Agreement, in which event any unused portion of the Deposit(but no other moneys) shall be
refunded to Developer as its sole and exclusive remedy. The continued existence of the REA
shall not constitute a breach hereunder.
The term "business day" as used in this Amended Agreement means any day other
than (i) a Saturday or Sunday, (ii) a day on which commercial banks in California are v
authorized or required by law to close, or(iii)a day upon which the City is closed." z
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4. Excepting only to the extent expressly amended by this First Amendment, all (D�
provisions of the Original ENA shall remain in full force and effect. E
5. This First Amendment, together with the Original ENA as amended by this First E
Amendment, represents the entire agreement of the Parties with respect to the matters set forth ai
herein. This Amended Agreement may be amended only in a writing signed by the parties, and L
approved by the Council. If any Party brings an action or files a proceeding in connection with the LL
enforcement of its respective rights or as a consequence of any breach by the other Party of its
obligations hereunder, then the prevailing Party in such action or proceeding shall be entitled to have E
its reasonable attorneys' fees and costs and other out-of-pocket expenditures paid by the losing Party.
Time is of the essence of this Amended Agreement. Q
6. This First Amendment shall be effective as of the First Amendment Date.
7. This First Amendment may be executed in counterparts, each of which when signed
and delivered will be deemed an original, and all of which together will constitute on instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
executed as of ,2016.
DEVELOPER:
AECOM TECHNICAL SERVICES, INC.,
a California corporation
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Dated: ,2016 a
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THE FRANSEN COMPANY,INC., in
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By:
Name: John Fransen o
Title: President L
Dated: _,2016
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CITY OF SAN BERNARDINO, a California charter
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6.A.c
THEATER SQUARE E Q DEVELOPMENT SERVICES AGREEMENT
This THEATER SQUARE DEVELOPMENT SERVICES AGREEMENT (this
"Agreement") is dated as of the Effective Date, and is entered among THE CITY OF SAN
BERNARDINO, a California charter city(the"City"), on the one hand, and AECOM.TECHNICAL
SERVICES, INC., a California corporation ("AECOM") (an affiliate of AECOM, a Delaware
corporation formerly known as AECOM Technology Corporation and/or AECOM Technologies),
and THE FRANSEN COMPANY, INC., a California corporation ("Fransen," and together with
AECOM, "AECOM/Fransen"), on the other hand. The City and AECOM/Fransen are sometimes
referred herein collectively as the"Parties", and each individually as a"Party."
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RECITALS
A. The City owns or will own certain real property,comprising approximately 5.5 acres
located on the northwest corner of Fourth Street and E Street known as "Theater Square" as
depicted on the "Map of Theater Square" (herein so called) attached hereto as Exhibit "A". A
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portion of Theater Square has been leased to Regal Cinemas, Inc. and is improved with a motion Cn
picture Theater (such portion and improvements, collectively, the "Regal Cinemas") operated by
Regal Cinemas, Inc. Theater Square also contains the "Development Properties", comprising the E
"Former Theater Space" (located in the same building as the Regal Cinemas) and the "Pad Site," C
as such terms are defined below and shown on the Map of Theater Square.
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B. AECOM/Fransen has proposed to: (i)prepare a"Strategic Plan" (as defined below), L
detailing the proposed development of Theater Square; (ii)assist the City in the disposition of Regal a
Cinemas; and (iii) assist the City in the disposition to and development of the .Development cn
Properties by unaffiliated parties (collectively, the "Project") in accordance with the "Schedule of w
Performance"(as defined below).
C. Subject to the approval by the City of the Strategic Plan and subject to the obtaining
of such approvals as may be needed hereafter from the Common Council and/or the Planning
Commission of the City in connection with land use entitlements, the City intends to cooperate in
pursuing arrangements for the disposition of (i)the Regal Cinemas and (ii) the Development c
Properties, all in a manner consistent with the approved Strategic Plan and in accordance with all
applicable laws. Y
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AGREEMENT
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1. Definitions. E
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"AECOM/Fransen Internal Costs"is defined in Section 2.2(b). :5
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"Amended Draft Strategic Plan" is defined in Section 3.
"Comprehensive Business Plan" means a plan which delineates in detail the proposed plan
for disposition and development of Theater Square, and which includes the following: detailed
estimated Project Costs,revenues,responsibilities,capital requirements,and capital sources.
"Development Fee" means an amount equal to 33% of the Net Disposition Proceeds of the
sale, lease or other disposition of the Development Properties.
16214.001-3044102v I I
6.A.c
"Development Properties" means those properties composed of the Former Theater Space
and Pad Site, as shown on the Map of Theater Square.
"Draft Strategic Plan" means a draft of the Strategic Plan as more particularly described in
Section 2 hereof
"Effective Date"means the date that AECOM/Fransen and the City have duly executed this
Agreement.
"Finder's Fee" means an amount equal to four percent (4%) of Net Disposition Proceeds
with respect to the sale of the Regal Cinemas. Notwithstanding anything herein to the contrary,
AECOM/Fransen shall be responsible for any commissions and/or fees due Third Party Brokers in E
connection with the sale of the Regal Cinemas.
"Former Theater Space" is that area located within the building containing the Regal N
Cinemas as shown on the Map of Theater Square. v
"Gross Disposition Proceeds"means all consideration payable with respect to the sale of the in
Regal Cinemas and/or sale, lease or other disposition of any of the Development Properties.
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"Initial Submittal Date" is on or before sixty(60) days from the Effective Date, o
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"Map of Theater Square" is defined in Recital A and attached hereto as Exhibit A. o
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"Net Disposition Proceeds" means Gross Disposition Proceeds from the sale of the Regal
Cinemas and/or sale, lease or other disposition of all or any portion of Development Properties less to
applicable Normal and Customary Costs of Disposition for such transaction.
"Normal and Customary Costs of Disposition" means such costs that are incurred in
connection with the disposition of the Regal Cinemas and/or all or any portion of the Development
Properties, including without limitation, transaction-related legal costs and other consulting costs, c
tenant improvement allowance and landlord-required tenant improvement work, title and other
closing costs, and survey costs. Fees paid to Third Party Brokers in connection with the applicable a,
Development Property will be included in the Normal and Customary Costs of Disposition of the
applicable Development Property. Normal and Customary Costs of Disposition will also include +;
third party costs incurred by the City for tenant design criteria, architecture, and engineering but only E
if related to the buildout of space. Any such costs shall be approved in the reasonable satisfaction of
the City.
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"Ongoing Development Requirements" means the substantial completion and opening of s
full service or fast casual dining restaurants occupying at least 2,500 square feet within the Former
Theater Space, as described in Section 1.03(i)of the Regal Cinema Lease. a
"Pad Site" means the approximately 16,000 square feet of vacant land as shown on the Map
of Theater Square.
"Project" is defined in Recital B.
"Regal Cinemas" is defined in Recital A.
16214.001-304410211 2
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"Regal Cinemas Lease" means that certain lease between the San Bernardino Economic
Development Corporation and Regal Cinemas, Inc., dated as of January 4, 2012; a copy of the Regal
Cinemas Lease is on file with the City as a public record.
"Report(s)"is defined in Section 5.1.
"Schedule of Performance" means the schedule to be included in the Strategic Plan setting
forth the timing and deadlines for the implementation of the Strategic Plan.
"Strategic Plan" or "Approved Strategic Plan" means a comprehensive plan for the
disposition,development and use of Theater Square, including the disposition of Regal Cinemas,the
disposition, development and use of the Development Properties, and such other contents as are m
required for a Draft Strategic Plan or Strategic Plan under Section 2 hereof.
"Strategic Plan Approval Deadline" means the date which is ninety (90) days after the N
initial submission of the Draft Strategic Plan by AECOM/Fransen. v
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"Theater Square"is defined in Recital A. in
"Third Party Brokers"means licensed real estate brokers,agents or finders unrelated to any E
Party hereto engaged by either the City or AECOM/Fransen in connection with the sale of the Regal c
Cinemas and/or Development Parcels.
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2. Strategic Plan. d
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2.1 Preparation and Submittal of Draft Strategic Plan. AECOM/Fransen shall
prepare, at its cost and expense, and submit to the City by the Initial Submittal Date a Strategic Plan
setting forth in detail: (i)a site plan, including conceptual design guidelines, (ii)the proposed land
use designations for Theater Square; (iii)proposed types of users by category, which may include ~
examples of specific users; (iv)parking; (v)ingress and egress; (vi)a proposal for the management
of Theater Square;(vii)a proposal for the methodology to market and sell the Regal Cinemas;(viii)a
proposal for the leasing by the City to end users for the operation of full service or fast casual dining �t
restaurants of not less than 2,500 square feet within the Former Theater Space in satisfaction of the c
Ongoing Development Requirements; (ix)a proposal for the sale and/or leasing of the balance of the It
Former Theater Space and the Pad Site; (x)a Comprehensive Business Plan for the development of
Theater Square; (xi)provisions under which AECOM/Fransen defends, indemnifies, and holds E
harmless the City and its representatives, officials,officers, employees, agents, and volunteers from cv
claims, losses, suits or damages arising from inaccurate or misleading statements or materials
delivered by AECOM/Fransen to third parties in connection with the disposition and/or development
of Theater Square; (xii)provisions under which AECOM/Fransen obtains or causes the procurement
of insurance for the benefit of the City and its representatives, officials, officers, employees, agents,
and volunteers (naming the City and its representatives, officials, officers, employees, agents, and Q
volunteers as additional insureds)with respect to claims, losses, suits or damages arising from acts or
omissions of private parties in connection with the disposition and/or development of Theater
Square; (xiii)a proposed term sheet describing covenants, conditions, restrictions and reciprocal
easements for Theater Square (which shall incorporate as applicable the requirements in the Regal
Cinemas Lease); (xiv)acknowledgment by ground lessees and purchasers of property that any
acquisition of property within Theater Square shall be on a "where is, as is" basis with no
representations or warranties as to condition, fitness, suitability or otherwise by the City; (xv)a plan
16214.001-3044102v11 3
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re xvi identification of other necessary studies xvii analysis of
for signage within Theater Square; { ) ry , { ) y
existing entitlement conditions and any changes thereto necessary to accommodate the
Comprehensive Business Plan; (xviii)a plan for demolition of those structures within Theater
Square, if any, that are not proposed to be used, sold or leased under the Draft Strategic Plan;
(xix)identification of target restaurants and retail users (pricing or lease rates for the Development
Properties, including all components thereof, which may be expressed as fixed numbers or under a
formula provided that the formula is specific, verifiable, fair and reasonable); (xx) summary of
anticipated third party expenses, including engineering, planning, architectural,construction services,
and development management necessary for implementation of the Comprehensive Business Plan
and the proposed source of payment thereof by the City; (xxi)preparation of a detailed project pro
forma showing anticipated costs and disposition revenues; (xxii) a plan and proposal for procuring
necessary physical site assessments; (xxiii)a plan for retaining existing surface parking or E CD
augmenting as necessary; (xxiv)the proposed financial relationship, if any, between Theater Square a�
and the Carousel Mall;and(xxv)a proposed Schedule of Performance. a
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2.2 Role of AECOM/Fransen in Implementation of the Strategic Plan. U
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(a) Subject to approval by the City, AECOM/Fransen will oversee, W
manage and direct activities associated with the sale of Regal Cinemas and the sale and/or lease of
the Development Properties by the City in accordance with the Strategic Plan. AECOM/Fransen will a
administer and negotiate terms of purchase agreements and/or leases on behalf of the City under o
direction of the City Manager or his designee. In consideration of AECOM/Fransen's successful
accomplishment of the disposition of Regal Cinemas in accordance with this subsection 2.2(a), upon o
closing of the disposition of Regal Cinemas out of the closing escrow, the City will pay
AECOM/Fransen the Finder's Fee. In consideration of AECOM/Fransen's successful a
accomplishment of the disposition of any portion of the Development Properties in accordance with
this subsection 2.2(a), upon closing of the disposition of any portion of the Development Properties,
the City will pay AECOM/Fransen the Development Fee associated with such disposition. _
(b) The sale or lease of the Development Properties will be accomplished
in accordance with the Strategic Plan. AECOM/Fransen shall lead negotiations subject to ongoing
consultation with and approval by the City Manager. As part of its efforts, AECOM/Fransen is to
provide, and bear the cost of, each of(i) all of AECOM/Fransen's activities in connection with the
preparation and obtaining approval of the Draft Strategic Plan; (ii)all planning, (iii)marketing v
research; (iv)the preparation of marketing materials and marketing of property; (v)project i
management by AECOM/Fransen; (vi)accounting; and (vii)legal fees of AECOM/Fransen a,
("AECOMIFransen Internal Costs"). In addition, AECOM/Fransen shall use its reasonable efforts
to arrange for tenants and/or purchasers to pay for: (y)transactional costs of entities other than
a�
AECOM/Fransen and the City; and (z) subject to such tenant improvement allowances as may be E
approved by the City as a Project Cost, costs of improvements to property required by purchasers or
lessees as a condition of their leases or purchases. a
Notwithstanding (a) and (b) above, no sale of the Regal Cinema may occur
unless and until the Ongoing Development Requirements have been fulfilled, unless otherwise
agreed by the City,acting in its sole and absolute discretion.
(c) AECOM/.Fransen shall manage and coordinate the sale or long-tern
ground lease by the City of the Pad Site. The Pad Site will be sold and/or leased to developers/users
in an "as is" condition.. AECOM/Fransen shall lead all purchase and sale negotiations on behalf of
16214.001-3044102v 11 4
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itself and the City in coordination with City staff and consultants. If requested and set forth by
AECOM/Fransen in the Strategic Plan this process may involve the retention of Third Party Brokers
(subject to approval by the City Manager). Any commissions for Third Party Brokers with respect to
the sale of the Regal Cinema shall be the obligation of AECOM/Fransen, subject to the last sentence
of this paragraph. Any commissions for Third Party Brokers identified in the Strategic Plan and/or
retained by the City with respect to the sale, lease, or other disposition of the Development
Properties, shall be the obligation of the City. Any Commissions for Third Party Brokers retained by
the City who are neither included in the Strategic Plan nor otherwise approved by AECOM/Fransen
shall be the obligation of the City.
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(d) AECOM/Fransen shall propose in the Draft Strategic Plan any public d
improvements anticipated to be required as a condition of approval to any required land use E
entitlements for the Project (including potential design and construction of a public park adjoining
restaurant pads at 4`h and E Streets). Q
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A draft Strategic Plan including all of the elements described in this Section 2
that is in detail sufficient for meaningful consideration and review in the sound judgment of the City
shall constitute a"Draft Strategic Plan." AECOM/Fransen shall submit to the City an initial Draft N
Strategic Plan on or before the Initial Submittal Date. AECOM/Fransen agrees and acknowledges m
that any disposition of property of the City is subject to review and discretionary approval of the a
City. AECOM/Fransen further agrees and acknowledges that any property of the City is subject to a 2
requirement and limitation under the City Charter that such property be disposed of at a price that is
not less than fair market value. o
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3. City Review of Draft Strategic Plan. The City agrees that upon receipt of the Draft a
�rrr Strategic Plan, it will review such plan acting in its sole and absolute discretion. Following such
review, and after discussions with taxing agencies, the City will provide written input to
AECOM/Fransen concerning the Draft Strategic Plan. After the City has provided such input, the
City and AECOM/Fransen will meet and consult concerning the provisions of the Draft Strategic
Plan, the initial evaluation by the City, and input, if any, received from such taxing agencies and o
other public agencies, and will seek to implement such modifications as are necessary or appropriate
to the Draft Strategic Plan. Following receipt of such written input and meeting with City
representatives, AECOM/Fransen shall submit an amended draft Strategic Plan ("Amended Draft C)
Strategic Plan"). Upon receipt of the Amended Draft Strategic Plan,the City will repeat the process v
described above,with the goal of approving the Strategic Plan. If the City determines that the Draft
Strategic Plan, as submitted, or an Amended Draft Strategic Plan is satisfactory in its sole and
absolute discretion of the City as a Strategic Plan for development of Theater Square, the Common
Council of the City may then approve such plan which, upon such approval, shall constitute the m
"Approved Strategic Plan." E
The Approved Strategic Plan must be approved by the Strategic Plan Approval Deadline. If Q
no Approved Strategic Plan has been approved by the Strategic Plan Approval Deadline, this
Agreement shall automatically cease to be of any force and effect and the City shall have no
obligations to AECOM/Fransen in connection with this Agreement with respect to the subject matter
hereof or as to any instruments delivered to the City, except that, AECOM/Fransen shall be entitled
to receive a Finder's Fee with respect to any closed transaction for the sale of the Regal Cinemas
and/or a Development Fee with respect to any closed transaction for sale or lease of an interest in the
Development Properties, in either such case entered into by the City prior to the second (2nd)
1
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anniversary of such termination with acquirer uirer or end user from whom the City has received a
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written proposal or letter of intent for such transaction prior to such termination.
4. Assignment Prohibited. AECOM/Fransen may not assign or delegate any of its
respective rights or obligations under this Agreement without the express written consent of the City,
which may be granted or denied by the City acting in its sole and absolute discretion.
Notwithstanding the foregoing prohibition on assignment, with at least ten (10) days' prior written
notice to the City Manager, AECOM may assign its rights and obligations to an entity over which
AECOM retains majority control, provided AECOM first submits to the City a report and
substantiating evidence of AECOM Parent's majority control and the entity's assets, financial
capability, and applicable experience. Upon any permitted assignment hereunder, AECOM and the
assignee shall execute and deliver to the City such documentation as the City may reasonably E
require. When the City receives all such documentation, the assignee shall thereafter be deemed to
be "AECOM," and, along with Fransen, "AECOM/Fransen", under this Agreement for all purposes. Q
In addition,AECOM may delegate any consulting, engineering, construction or finance aspect of its
obligations hereunder or under the Approved Strategic Plan to any entity that is owned by and under u
the control of AECOM Parent. W
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5. Plans Reports Studies and Investigations.
ions.
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5.1 Proprietary Rights. If this Agreement terminates for any reason, without an o
Approved Strategic Plan, or following approval of an Approved Strategic Plan if this Agreement is d
terminated prior to disposition of both the Regal Cinemas and the Development Properties, the City o
may retain all copies of any plans, reports, studies,and/or investigations(collectively,the"Reports";
C
individually a "Report") respecting Theater Square, if any, that AECOM/Fransen prepares and
submits to the City hereunder concerning the Project.. All Reports will be delivered to the City free a
of all claims or interest of AECOM/Fransen. For all such Reports delivered to or coming into the
City's possession,the City may demand and AECOM/Fransen shall transfer to the City,without cost,
all right,title, interest,and ownership rights that AECOM/Fransen has or may have to any or all such
Reports, and will notify the City of known third party rights, if any, in any Report, such as copyright
trademark, or other use limitations retained by persons other than AECOM/Fransen (that are not
otherwise identified in the Report). The City shall be permitted to rely on and utilize the Reports in �!
connection with the development and/or sale, lease or disposition of the applicable part of Theater c
Square.
5.2 Use of Reports. The City may use, grant, license, or otherwise dispose of the E
Reports to any person or entity for the Project or any other purpose. Any City use or the City's
transferee's use of any Report in completed or uncompleted form for other projects or for this
Project,with an entity other than AECOM/Fransen, will be at the City's risk and without liability or E
legal exposure to AECOM/Fransen.
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6. Indemnity. AECOM/Fransen shall indemnify, defend, and hold the City and its a
representatives, officials, officers, employees, agents, and volunteers harmless from any losses,
liabilities, claims, causes of action, injuries, or expenses including, without limitation, reasonable
attorneys' fees and costs arising from,relating to, or in any way connected with (a)the performance
by AECOM/Fransen of any of its obligations under this Agreement or (b) any Report or Reports,
except that the indemnity provided for in this subsection 6(b) shall not apply where the City, or a
transferee of the City, uses a Report in any form for another project or for the Project with an entity
.., not affiliated with AECOM/Fransen. The limitation on liability set forth in Section 14.6 below shall
16214.001-3044102v11 6
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' indemnity obligations under this Section 6 with respect to liability for
not limit AECOM/Fransen s ty g p n'
third party claims against the City, its representatives, officials, officers, employees, agents, and
volunteers for punitive (but only to the extent directly attributable to the actions of
AECOM/Fransen), indirect,special,and/or consequential damages.
7. Additional AECOM/Fransen Responsibilities. Without limiting any other provision
of this Agreement, AECOM/Fransen shall, during the period of time this Agreement remains in
effect,do the following at its sole cost and expense, in furtherance of the negotiation process:
7.1. Meetings. AECOM/Fransen shall meet at Ieast two (2)times per month with
the City's staff and representatives to review and understand the planning and design criteria
applicable to Theater Square,and in drafting the Approved Strategic Plan. E th
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7.2 Reports. AECOM/Fransen shall make oral and written progress reports to the a
City and/or its staff as the City Manager may reasonably request not more than twice per calendar
month.
7.3 Rights of Entry. Before entering upon any property within Theater Square, cn
whether for site assessment or other due diligence,AECOM/Fransen shall first obtain a right of entry r_
from the City(in a form reasonably acceptable to the City)or the applicable property owner,and any Q
tenant. AECOM/Fransen may ask the City to use its best efforts to help AECOM/Fransen obtain a _o
right of entry upon private property. >
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7.4 Environmental Reports/Studies. AECOM/Fransen shall promptly provide the
City with copies of any environmental reports and any other studies of the physical condition of
Theater Square, if any, that AECOM/Fransen causes to be prepared, or otherwise obtains with Cn
respect to Theater Square or the Project(which shall be deemed to be "Reports" in accordance with
Section 5.1 above). c°
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8. Term. The term of this Agreement will expire on the third (3rd) anniversary of the
City's approval of the Approved Strategic Plan. In addition, AECOM/Fransen shall have the right to
terminate this Agreement upon sixty (60) days' written notice if the City fails to pay AECOM/
Fransen within thirty (30) days following written notice any amounts then due to AECOM/Fransen c
hereunder. Either party may terminate this Agreement if the City rejects more than three (3)
proposed disposition transactions presented by AECOM/Fransen or if AECOM/Fransen proposes but .r
the City rejects a revised Strategic Plan proposing changes to the Approved Strategic Plan intended E
by AECOM/Fransen to account for weakened or otherwise changed market conditions that have
occurred after the City's approval of the Approved Strategic Plan. AECOM/Fransen shall have the
right to terminate this Agreement upon thirty (30) days' written notice to the City but in so doing, E
and notwithstanding anything herein to the contrary, waives all rights hereunder, including without
limitation,all claims for a Finder's Fee or Development Fee not earned hereunder prior to delivery of
such notice. Upon expiration of the term or earlier termination of this Agreement in accordance with Q
the provisions hereof, this Agreement shall automatically cease to be of any force and effect and the
City shall have no obligations to AECOM/Fransen in connection with this Agreement with respect to
the subject matter hereof or as to any instruments delivered to the City, except that AECOM/Fransen
shall be entitled to receive a Finder's Fee with respect to any closed transaction for the sale of the
Regal Cinemas and/or a Development Fee with respect to any closed transaction for sale or lease of
an interest in the Development Properties, in either such case entered into by the City prior to the
Q16214.001-3044102v11 7
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versa of such termination with any acquirer or end user from whom the City has
second(2nd) anniversary y q ty
received a written proposal or letter of intent for such transaction prior to such termination.
9. Brokers Indemnity. Except as provided in Paragraph 2.2(c)hereof, AECOM/Fransen
shall indemnify, defend, and hold the City, and its representatives, officials, officers, employees,
agents, and volunteers harmless from and against any losses and liabilities including, without
limitation, reasonable attorneys' fees, arising from, relating to, or in any way connected with, any
claim by any broker, agent, or finder for any commission, fee, or other compensation in connection
with the sale of the Regal Cinemas and/or sale, lease, or other disposition of the Development
Properties.
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10. Entire Agreement, Time is of the Essence. This Agreement represents the entire m
agreement of the Parties with respect to the matters set forth herein. This Agreement may be
amended only in a writing signed by the Parties,and approved by the City's Common Council. Time a
is of the essence in this Agreement. N
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11. Nondiscrimination. AECOM/Fransen covenants and agrees that there shall be no
discrimination against or segregation by AECOM/Fransen of any person or group of persons on Cn
account of race, color, creed, religion, sex, marital status, national origin, ancestry, age, or disability
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of Theater Square, nor o
shall AECOM/Fransen or any person claiming under or through AECOM/Fransen, establish or c
permit any such practice or practices of discrimination or segregation in the selection, location,
number, use or occupancy of tenants,lessees,sublessees, subtenants,or vendees of Theater Square. o
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12. Notices. All notices required or permitted hereunder shall be delivered in person or
by facsimile, by overnight courier, or by registered or certified mail, postage prepaid, return receipt
requested, to each Party at its address shown below, or to any other place designated in writing by
such Party:
1-
City: The City of San Bernardino M
300 North"D" Street, Suite 600
San Bernardino, CA 92418
Attention: City Manager c
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With a copy to: City of San Bernardino
City Attorney's Office a,
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300 North"D" Street, Suite 600
San Bernardino,CA 92418
Attention: Donn Dimichele E
Deputy City Attorney U
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AECOM/Fransen: AECOM Technical Services, Inc. `t
300 So. Grand Avenue, Suite 900
Los Angeles,California 90071
Attention: Mr.Vaughan Davies,
Principal and Director of Urban Design
16214.001-3044102v11 8
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6.A.c
And The Fransen Company
410 Campus Drive, Suite 200
Newport Beach,California 92660
Attention: Mr.John Fransen
With a copy to: Liner LLP
1100 Glendon Avenue, Suite 1400
Los Angeles,California 90024
Attention: Michael J. Kiely,Esq.
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And Crosbie Gainer Schiffman Southard& Swanson,LLP
12750 High Bluff Drive, Suite 250 E
San Diego,California 92130
Attention: Craig Swanson, Esq. and Dana Schiffman,Esq. a
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Any such notice shall be deemed received upon delivery, if delivered personally, by
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facsimile, or by e-mail, one day after delivery to the courier if delivered by courier, and three days
after deposit into the United States Mail if delivered.by registered or certified mail.
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13. Agreement Limitations. The City is not,by entering into this Agreement,committing Q
itself to or agreeing to undertake: (a) land acquisition, (b) land disposition to AECOM/Fransen, o
(c)land use approvals,or(d)any other act or activities requiring the subsequent independent exercise
of discretion by the City or any agency or department thereof. This Agreement does not constitute an o
agreement by the City to exercise control over property within Theater Square. This Agreement is
merely an agreement to review Reports according to the terms hereof, with all final discretion and
approval to be exercised exclusively by the City's Common Council as to any Approved Strategic CO
Plan,and all proceedings and decisions in connection therewith.
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14. Miscellaneous provisions. I_
14.1 Governing_Law and Venue. California law governs this Agreement and its
provisions will be construed according to California laws. Venue for filing any action to enforce or �!
interpret this Agreement will be San Bernardino,California.
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14.2 Headings. The section headings in this Agreement are for convenience only
and do not explain,modify,or add to the meaning of this Agreement. E
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14.3 Severability. The provisions of this Agreement are severable. The invalidity
or unenforceability of any provision in this Agreement will not affect the other provisions.
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14.4 City Man.aizer to Act for City. Except to the extent otherwise required under Y
the City Charter, City ordinances or applicable statutes or as otherwise set forth in this Agreement, a
the City Manager or a City employee designated by the City Manager may act on behalf of the City
for the purposes of this Agreement.
14.5 Joint and Several Liability. Each of AECOM and Fransen shall be jointly and
severally liable and responsible for performance by AECOM/Fransen under this Agreement.
14.6 Limitation on Liability. Except to the extent required to fulfill a defense,
indemnity and hold harmless obligation as set forth in Section 6, or as,may be described in the
_
1fi2k4.001 3044k02vk1 9
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1 r the City will be liable to the other for an unitive
Strategic Plan, neither AECOM/Fransei no ty y punitive,
indirect, special or consequential damages hereunder.
14.7 Relationship of AECOM/Fransen and City. AECOM/Fransen and each of
AECOM Parent and Fransen, are independent contractors and are not agents of the City.
AECOM/Fransen,AECOM Parent and Fransen are not partners of or joint-venturers with the City.
14.8 Interpretation. This Agreement is the result of the combined efforts of the
Parties. Should any provision be found ambiguous,the ambiguity will not be resolved by construing
this Agreement in favor or against any Party, but by construing the terms according to their generally
accepted meaning.
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14.9 Precedence of Documents. If the body of this Agreement and any Exhibit or
Attachment conflict,the terms in the body of this Agreement will control. Any term or condition in a
any Exhibit or Attachment that purports to modify the allocation of risk between the Parties is void.
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1.4.10 Successors and Assigns. Subject to the limitation on assignment, this
Agreement is binding upon.,and will inure to the benefit of all Parties, and their respective successors un
and assigns.
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14.11 Counterparts. The Parties may sign this Agreement in counterparts, each of o
which when signed and delivered will be deemed an original, and all of which together will
constitute one instrument.
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AF A
IN WITNESS WHEREOF, the Parties have executed and acknowledged this Agreement on
the dates and in the year set forth below.
THE CITY OF SAN BERNARDINO,
a California charter city
By:
Name: Mark Scott
Title: City Manager
Dated:
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APPROVED AS TO FORM
GARY D. SAENZ, Q
City of San Bernardino
City Attorney 0
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AECOM/FRANSEN:
AECOM TECHNICAL SERVICES,INC.,
a California corporation
By:
Name:
Title:
Dated: ,2016
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THE FRANSEN COMPANY,INC., E
a California corporation
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Name: John Fransen
Title: President
Dated: ,2016 Cn'
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EXHIBIT A"
MAP OF THEATER SQUARE
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AECOM CITY OF SAN BERNARDINO THE FRANSEN COMPANY
SAN BERNARDINO CAROUSEL MALL&THEATER DISTRICT:COMMUNITY LISTENING SESSION#1
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Table of Contents
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Overview and Phone Survey 3 =
Community Sessions (Open House) 4
Exhibits:
1. Community sessions 7
2. Phone survey results 11
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SAN BERNARDINO CAROUSEL MALL&THEATER DISTRICT:COMMUNITY LISTENING SESSION#1
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Overview
In the second quarter of 2016, two different types of community listening sessions were utilized to gather
community input for the master planning process of the Carousel Mall and Downtown San Bernardino. City
staff and development partners held an Open House workshop on Monday, March 28 for City residents and
stakeholders. Given the potential regional destination the proposed development may offer, the City
deemed it essential to also survey adjacent city residents to gather intel on retail habits through the Institute
of Applied Research (IAR) at California State University San Bernardino (CSUSB). U
This report summarizes the results of both community listening sessions. in
Phone Survey E
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The Institute of Applied Research (IAR) at California State University San Bernardino (CSUSB)was in the d
process of finalizing their county-wide Inland Empire Annual Survey and was able to include questions a
about the development. M
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The Inland Empire Annual Survey, now in its 19th year, is a telephone survey including 1,000 San rin
Bernardino County residents. Although the survey includes respondents from across the entire county, only
respondents in the City of San Bernardino and surrounding areas within 15 miles of downtown were offered
the City's questions. The survey was cost-effective way to gather information from residents of adjacent
cities who may potentially visit the downtown area. A total of 295 respondents with phones received these
questions, yielding a sample with a 95% level of confidence and an accuracy rate of approximately+l-
-5.7%.
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Of the 295 respondents:
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57010 Retail i • i restaurants would entice them most to come to the area r
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dinner • • • • downtown
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Would not consider { i i • r ! • ' i ii` downtown 'E 790/
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The survey is included in the exhibit portion of this report.
SAN BERNARDINO CAROUSEL MALL&THEATER DISTRICT:COMMUNITY LISTENING SESSION#1
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Open House
The intent of the Open House workshop was to listen and record
OPEN 1 i;iI!illp
concerns, issues and ideas community members have based on E
their past experiences or historical reference relating to the previous d
landowner, planning and outreach process. City staff along with a
representatives from AECOM and The Fransen Company m d
coordinated and hosted the Open House on March 28, 2016. 9
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130 people attended and common themes heard were: in
• Public art/scultures/murals E
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• Open space common area, where people can sit and o
congregate
• Amphiteather °
• A design that is friendly to pedistrians and bikes
• Incorparate historic elements (orange groves) co
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• Mixed use: "live, play, work" in the same area
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Workshop Format
The Open House was provided in workshop-style format, in two, 2-
112 hour sessions at San Bernardino City Hall Lobby, 300 North "Y v
Street, San Bernardino, CA 92418. The first session was held in late
morning, with the second session held in early evening. "I
Each session opened with an overview of the project, the historical Ps,�sfaffn o, E
and current condition of the site, and an introduction of the design ini
team: The Fransen Company, Inc., AECOM and City of San
Bernardino staff. Included in the introduction was a brief explanation c
of the City's relationship with AECOM and The Fransen Company.
Currently, the City has an Exclusive Negotiation Agreement with �
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AECOM and The Fransen Company for the redevelopment of
certain real property, comprising approximately 48.5 acres,
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commonly known as the Carousel Mall, the Regal Theaters, and the I N
California Theater, located at 300 and 450 North E Street and at the p Y
Northwest Corner of Fourth Street and E Street, San Bernardino,
California. Ia6 E
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SAN BERNARDINO CAROUSEL MALL&THEATER DISTRICT:COMMUNITY LISTENING SESSION#1
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To stimulate dialogue and ideas, eight exhibits featuring visual
representations of Theater Square Plan and Images, Context Map and
Preliminary Site Plan, Retail Uses, Urban Lifestyles, Housing Types, Public
Spaces, and Historical Downtowns were displayed in the lobby. Large
write-on boards were available for the community attendees to provide
comments and feedback. In addition to the boards, design team members
recorded, any and all comments, provided by attendees during each r a
session, documenting people's, issues, questions, or concerns regarding
9 p p 9 9 Sim
the potential future development of the property. A survey was also
provided in order to assist with gaining information in regards to specific _
types of uses.
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Theater Square Plan and Images
Throughout all sessions, common themes could be heard. Although the °
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attendees were from a diverse mix of the community, they shared a listing g4
of common issues, concerns, and community interests. cn
Context Map and Preliminary Site Plan
There are two major concepts being considered are reflected in the
preliminary site plan. One is to completely demolish the mall and the other
is to preserve and update part of the mall and demolish the rest. The
community feedback gathered called for a balance between new
development while reflecting the City's history and true identity. The
community outreach will continue as it is key to further developing the site
plan. a, E
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Retail Uses E, .,
The City seeks to create pedestrian friendly environments with a variety of f.,v
uses that enable people to live, work, play, and shop in one place.
Discussed with the public, were the several different uses that will work
together and share infrastructure, utilities, and public amenities. For
example, more efficient use of land and infrastructure may be achieved
through retail and residential developments that can share parking facilities
because their peak use hours do not overlap substantially. �
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The public was generally interested in the development of a neighborhood,
tract of land, building, or structure with a variety of complementary and �F
integrated uses, such as, but not limited to, residential, office, retail, public, p
and recreation, in a compact urban form. E
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SAN BERNARDINO CAROUSEL MALL&THEATER DISTRICT:COMMUNITY LISTENING SESSION#1 -
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Urban Lifestyles
People expressed interest in providing a destination for the City that is unlike anything that currently exists.
It should be attractive to all generations and withstand the test of time.
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Public Spaces ;v
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There was a strong demand to provide a connected network of open spaces
to offer a community-wide benefit. Attendees requested that this network Aw
extend beyond the property boundary to connect to adjacent neighborhoods.
Historical n t . E CL
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Open House participants were open to staying current while appealing to
various generations in the development of this District. It was expressed that Q
the cultural and historic value of the City be preserved and present in the
new design. Cr
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AECOM and The Fransen Company
AECOM and the Fransen Company have extensive development experience
nationally and locally. AECOM designs, builds, finances and operates
infrastructure worldwide. The company is active in the following markets:
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buildings, civil, infrastructure, industrial, and power. AECOM also provides
services include the following: architecture and landscape architecture,
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building and equipment maintenance, civil and building engineering, E
construction management, cost consulting, environmental planning and co
remediation, facilities management, program management, and urban
planning and design. The company operates in approximately 150 countries ti o
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and generated $19 billion in revenue for the year ending June 30, 2015. � .
AECOM is ranked#343 on the Forbes 500 ranking. m c,
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The Fransen Company, Inc., (TFC) Newport Beach, CA, was founded in a
1984 and has worked with major developers, financial institutions, cities, and
business districts on new retail and mixed use projects and redevelopment of
existing projects. TFC projects include Third Street Promenade in Santa
Monica where the company created a strategy and implemented it, on behalf E
of The Bayside District, leading to the re-merchandising of Third Street l ci
Promenade. Today Third Street is one of the most vital retail streets in ;
California. In Torrance the company led efforts in conjunction with the City to j
attract$300 million in new private capital investment by Del Amo Fashion
Mall. a
SAN BERNARDINO CAROUSEL MALL&THEATER DISTRICT:COMMUNITY LISTENING SESSION#1
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Exhibit 11 Community Listening Session
Open House
The Open House was held on Monday, March 28, 2016 coordinated and hosted by the City, AECOM and a
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The Fransen Company. The details surrounding the sessions are included as record of the events.
Event Devils �n
Date: Monday March 28, 2016 E
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1) 11:30am-2:00pm; and
2) 5:00pm -7:30pm o
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• Total attendees in morning session: estimated 80 Cr
• Total attendees in evening session: estimated 50 w
• Total surveys collected:63
• Total community attendee sign-ins:29 (sign-in provided in evening session only)
Coordination Team and Session Hosts
Nancy Aguilar Economic Development Analyst
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Vaughn Davies AECOM
Cruz Esparza IV Economic Development Manager E
John Fransen The Fransen Company �I
Monica Lagos Communications Manager o
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Mark Persico Director of Community Development in
Mark Scott City Manager =
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Survey
List of survey questions:
1. What would you like to see happen with Carousel Mall? E
2. What would you like to see in Downtown San Bernardino? L)
3. What restaurants and shops would you like to see in Downtown?
4. Would you consider moving to a new upscale housing development in Downtown San Bernardino? E
5. Do you have any concerns about coming Downtown San Bernardino?
6. Do you go to Regal Cinema? If yes, how often? Monthly? 4
Where do you currently go for dining and entertainment?
7. Where do you currently for dining and entertainment? r
SAN BERNARDINO CAROUSEL MALL&THEATER DISTRICT:COMMUNITY LISTENING SESSION#1
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8. Do you currently live in the City of San Bernardino? If yes, how long have you
lived in town?
9. Do you have other ideas or thoughts you want to share?
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This is an example of an actual survey completed by an attending community member:
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Exhibit 2 1 Phone Survey Results
2016 Inland Empire Annual Survey
Questions submitted by The City of San Bernardino a
Telephone interviews were conducted by the Institute of Applied Research at California State University, San
Bernardino, using computer assisted telephone interviewing (CATI)equipment and software. The surveys were in
conducted on weekends and selected weekdays between Friday April 8 and Friday April 29, 2016.
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2016 Inland Empire Annual Survey
Data display of responses to questions submitted by
The City of San Bernardino
Submitted 61212016
In late March, 2016, an article appeared in the Press Enterprise indicating that the City of
San Bernardino was engaged in efforts to determine the community's opinions about the future
of the site of the old Carousel Mall and Theater Square. At that time,the Institute of Applied E
Research (IAR)was preparing to conduct its 19th Inland Empire Annual Survey(a telephone d
survey including 1,000 San Bernardino County residents), and we contacted Mr. Mark Persico a
(the City's Director of Community Development)to determine if the survey could be a good
venue for polling San Bernardino County residents for their views. The City decided that the
survey would be a good and cost-effective way to gather that information.
The Institute of Applied Research is pleased to submit to the City of San Bernardino a E
data display of responses to the City's proprietary questions which were included in the 2016 0
Inland Empire Annual Survey. A total of 295 respondents with phones received these questions, d
yielding a sample with a 95%level of confidence and an accuracy rate of approximately+/- o
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—5.7%. Although the Inland Empire Annual Survey includes respondents throughout the entire
county, only respondents in the City of San Bernardino and surrounding areas within 15 miles of N
downtown were offered the City's questions (per instructions by City staff). The following table a)
shows the number of completed surveys in each of the cities of interest:
Number of Respondents,by City
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Count Percent
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Bloomington 18 6.1% o
Fontana 73 24.7% c
Grand Terrace 7 2.4%
Highland 25 8.5% CD
Loma Linda 3 1.0% N
Mentone 2 0.7% c
Redlands 33 11.2%
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Rialto 44 14.9%
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San Bernardino 90 30.5% E
Total 295 100.0% 0
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Telephone survey respondents were randomly selected from a comprehensive sample
frame consisting of all telephone working blocks which contain residential telephone numbers
within the designated geographical area of interest. Telephone interviews were conducted by the
Institute of Applied Research at California State University, San Bernardino,using computer
INSTITUTE OF APPLIED RESEARCH
2016 Inland Empire Annual Survey,Report on City of San Bernardino questions Pagel
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assisted telephone interviewing (CATI) equipment and software. The surveys were conducted
on weekends and selected weekdays between Friday April 8 and Friday April 29, 2016.
The remainder of this short report contains the survey results for the City of San
Bernardino's questions. The reader should note that the totals for each table differ slightly since
respondents were free to decline to answer any particular survey question.
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FINDINGS E
The City's questions began with an introduction stating: "As you may have heard, the
City of San Bernardino has decided to redevelop the downtown area by turning the Carousel Q
Mall into a mix of retail stores,restaurants, homes, and offices." With that mindset established,
respondents were asked: "What would entice you most to come to the area: retail stores and d
restaurants, an open space where the community can gather, a park, or something else?" The
table below shows that retail stores and restaurants are the most enticing option(56.9%). Some E
respondents (21 people—7.2%) expressed reservations about the safety and desirability of the o
area("nothing would make me go to that area").
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S61: What would entice you MOST to come to the area...
Column a
Count Percent
Retail stores and restaurants 168 56.9% R
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An open space where the community can gather 30 10.2%
A park 29 9.8% Q,
Something else(specify) 26 8.8%
Improve safety and remove homeless from the area 9 3.1%
Stadium or concert venue 7 2.4% c
Nothing would make me go to that area 12 4.1% `a)
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Don't know or Refused 14 4.7%
Total 295 100.0%
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What did the 8.8% of respondents answering"something else" want? Following are the in
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direct quotes relevant to the question: o
• A combination of stores and parks a
• A lake
• A mixture of parks and small stores
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• All of the above
• Boys and girl programs to get kids off the street Q
• Business friendly for new businesses
• Clean up the area
• Get rid of bus lanes, they caused more traffic in that area put more shopping areas instead
• Hospital
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• Jobs
• Low income housing because there are a lot of homeless people in San Bernardino,
homeless shelter
• Make another college
• Manufacturing plants or specialties
• Mix of everything, multi-cultural
• Mixed use of community center and retail space
• Mixture of both park and retail
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• More housing a,
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• Places where people can gather but not a place that attract crime
• Programs for people in general, for college students,tutoring places for children, career
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• Services for old people
• Turn it into where a river runs through the north end of San Bernardino to the south end a
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(through the Carousel Mall as well)
• What is better off for the community,whatever it is necessary to better the city o
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Respondents were then asked what type of restaurant might draw them to the downtown N
San Bernardino area. A total of 17 people said they"don't know"or refused to respond to the
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question. Of the remaining respondents,most(56.8%) indicated that they would want to come to �
a nice"sit-down"restaurant for dinner. About a quarter(23.7%would prefer a casual restaurant
(e.g. Panera or Chipotle). c
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SB2: What type of restaurant might draw you to the downtown San (0
Bernardino area? o
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Column c
Count Percent 0
A nice sit-down restaurant for dinner 158 56.8%
A casual restaurant like Panera or Chipotle 66 23.7%
A place to have breakfast like Farmer Boys or IHOP 43 15.5% N
I wouldn't go to a restaurant in downtown 11 4.0% _
Total 2781 100.0%
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It's one thing to come to downtown San Bernardino to enjoy dinner, shop, or go to an E
entertainment venue. It's another thing to actually move to the area. Respondents were asked
whether they would consider moving to an upscale townhouse or downtown loft in the next five a
years, and the answer from 79.4% of respondents was a resounding"no" (see table,next page).
Digging a bit deeper, it appears that 88.8% of homeowners said"no,"but only 69.5% of renters
responded in the negative. About a quarter of renters (26.3%) said they would or"might"
consider it. Of course, survey responses do not always directly equate to behavior. But that
figure may be encouraging to developers.
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SB3: Would you consider moving into an upscale townhouse or
loft in downtown San Bernardino in the next five years?
Column
Count Percent
Yes 22 7.6%
Maybe 23 7.9%
No 231 79.4% .
I don't have any money to move 2 0.7%
Too afraid 1 0.3% m
Already in a house/Don't want to move 3 1.0% Q
Don't know 9 3.1% N
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Total 291 100.0%
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City staff were also interested to know how often people go to the downtown San
Bernardino Regal Cinema(perhaps an easier question to answer than the previous one about E
willingness to move to downtown). As shown in the table below, the majority of respondents
never or rarely go to the cinema in downtown San Bernardino. Q
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SB4: How often do you go to the downtown San
Bernardino Regal Cinema? V)
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Column
Count Percent
Every week 5 1.7%
Every month 35 12.1% c
A few times a year 45 15.6%
Less than once a year 101 34.9% �?
Never 103 35.6% N
Total 289 100.0%
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The last question dealt with"shopper leakage"—the tendency to leave one's city of
residence for their shopping and entertainment needs. About half(51.2%) of respondents in
indicated that they usually leave the city(thus indicating possible unmet demand and possible
opportunities for the local retail sector), and another 6.9% said that their shopping/entertainment a
destination is contingent upon what they are looking for.
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SBS: Do you usually stay within your city for your shopping and
entertainment needs, or do you go to other cities?
Column a
Count Percent
Within your city 122 41.9%
Other cities 1 149 51.2%
It depends on what I'm looking for 20 6.9%
Total 291 1 100.0%
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But these overall numbers do not tell the whole story. It is illustrative to see that while
66.7% of Redlands residents stay in their city to shop, the figure drops to 50.0% for San
Bernardino residents, and is even lower for residents of Rialto, Fontana, etc. The reader is
encouraged to view that analysis cautiously because of the low city-specific sample sizes.
However the analysis does provide "food-for-thought."
City-specific shopping patterns
S135: Do you usually stay within your city for
your shopping and entertainment needs, or do 0
you go to other cities? m
It depends on a
Within your Other what I'm
city cities looking for Total
Bloomington Count 8 10 0 18
Row% 44.4% 55.6% 0.0% 100.0%
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Fontana Count 23 42 6 71
Row% 32.4% 59.2% 8.5% 100.0% a
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Grand Terrace Count 1 6 0 7 m
Row% 14.3% 85.7% 0.0% 100.0% 0
Highland Count 6 15 4 25 i
Row% 24.0% 60.0% 16.0% 100.0%
Loma Linda Count 1 2 0 3 a
Row% 33.3% 66.7% 0.0% 100.0%
Mentone Count 0 2 0 2 `D
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Row% 0.0% 100.0% 0.0% 100.0% h
Redlands Count 22 10 1 33 a,
Row% 66.7% 30.3% 3.0% 100.0%
Rialto Count 17 24 3 44
Row% 38.6% 54.5% 6.8% 100.0% c
San Bernardino Count 44 38 6 88
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Row% 50.0% 43.2%1 6.8% 100.0%
Total Count 122 149 20 291
Row% 41.9% 51.2% 6.9% 100.0%
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Those respondents who said they typically travel outside their city for their shopping and o
entertainment needs were then asked to indicate where they go. Looking at the data for the a
group as a whole (next page), it appears that people predominantly go to Rancho Cucamonga
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(35.7%) or Redlands (29.2%). E
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SBSB: When you shop in a place other than the city where
you live, what city do you usually go to?
Column
Count Percent
Redlands 49 29.2%
Rancho Cucamonga 60 35.7%
Riverside 12 7.1%
Los Angeles/Orange County 13 7.7%
Elsewhere 34 20.2%
Total 168 100.0% m
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The city-specific sample sizes are too small to conduct an analysis similar to the one on
the previous page, however there appears to be some indication that San Bernardino respondents
go to Redlands whereas Fontana, Rialto, and Bloomington respondents head west to Rancho N
Cucamonga.
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FINAL COMMENTS
In August 2012 the City of San Bernardino filed for bankruptcy protection. Although the c
City has been working through the process for a seemingly long period of time(much longer 2
than cities like Detroit, for example), the end to the bankruptcy appears to be in sight. N
Why mention Detroit? Because Detroit was just one of the cities mentioned in a Forbes
article about revitalizing downtowns, and was termed a"tale of two cities"—a city which was
going through bankruptcy at the same time it was working hard to revitalize its downtown area.' !-
The article quotes Lee Fisher, President of CEOs for Cities, a national not-for-profit organization 0
that helps U.S. cities map out economic growth, as saying: "The cities that capture the mobile,
college-educated `young and restless' are the ones who are most likely to revitalize their c
downtowns and accelerate economic progress in their cities." It talks about the research which m
shows that college-educated professionals between the ages of 25 and 34 tend to want to live in
"tight-knit urban neighborhoods that are close to work and have lots of entertainment and
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shopping options within an easy walk."
Of course, one must be realistic in recognizing that San Bernardino has traditionally had y
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a lower rate of college educated residents than surrounding areas: 11.7% of City residents have a c
Bachelor's degree vs. 18.8%in San Bernardino County as a whole and 20.8% in Riverside a
County as a whole. And keeping recent college graduates in the area has always been a d
"challenge." Thus revitalizing the downtown area might be a"harder sell"than if the percent of =
"young and restless"was higher.
That said,the City is to be congratulated for its efforts to revitalize downtown and for a
using the Inland Empire Annual Survey to determine the community's opinions about the future
of the site of the old Carousel Mall and Theater Square.
i htt2://www forbes.com/sites/morganbrennan/2013/03/25/emerizing-downtowns-u-s-cities-revitalizing-business-
districts-to-lure-young=professionals/#7cOba13d70a0
2 www.census.gov
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