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VANIR DEVELOPMENT COMPANY, INC.
1'_0 Box 310, Vanir Tower, City Hall Pla=a, San Bernardino, California 92402
Tclt:phonc (7141lc\84-9477
Commercial/Industrial Dcvelopen <> Real btJtl' Brokers
January 13, 1986
Councilman Gordon Quiel
REDEVELOPI1ENT AGENCY
CITY OF SAN BERNARDINO
300 North "0" Street, Room 320
San Bernardino, California 92418
Dear Councilman Quiel:
In February, 1985, I requested and received an extension for the
development of the 14 story building on Court and E Streets so
that construction could be timed with the opening of the hotel.
Unfortunately, for reasons beyond my control, the hotel did not
open as planned, and instead received wide negative publicity
clouded by bankruptcy and foreclosure leaving uncertainty as to
its disposition causing substantial adverse effect on our
downtown, and my adjacent project, forcing me to delay even
further.
Currently, there is a large vacancy factor of office space in our
downtown and throughout the area; developers are offering
substantial rental concessions, free rent and other amenities to
lease their space. Developers outside the downtown area are able
to provide substantial concessions as a result of the low land
prices and abundant parking all made available through the
redevelopment process, resulting in an exodus of many of the
businesses previously located in our downtown. While I am in
favor of such development, by Redevelopment, it seems only
logical that the first priority to the Redevelopment Agency and
the City of San Bernardino should be our downtown.
The key to our project is the unification of the County, the City
and private businessmen to once again make the downtown area the
focal point of our great City. This can be accomplished by an
agressive campaign by the City and the Redevelopment Agency. All
of the studies and research conducted within our downtown,
indicate a need for a major corporate tenant to locate within our
downtown to serve as a catalyst to the entire downtown, once
again giving it the prominence that our own Vanir Tower and the
City Hall Complex had previously achieved. Our building is
designed to be the most beautiful, largest, and prominent
landmark within the City of San Bernardino and would certainly be
an appropriate place for such a user. I have identified several
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Councilman Gordon Quiel
REDEVELOPMENT AGENCY
CITY OF SAN BERNARDINO
Page Two
January 13, 1986
corporate tenants, however, my plans were shattered with the
failure of the hotel and wide publicity it received. In
addition, with the completion of the new County Offices, Library
and construction of the County School facility (which is being
relocated from one of my downtown buildings which initially cost
over $800,000 to relocate to bring them downtown and will also
result in a large vacancy) and several other new structures,
hopefully this will begin to enhance our downtown area. Due to
the size of our proposed facility, we would add a substantial
amount of empty office space to the downtown, unless we are
successful in bringing in a new major corporate tenant.
We have hired one of the most prominent construction contractors
in the State of California to construct this facility and have a
lender willing to provide the necessary funds to construct it,
however, it does not make good business sense to force
development of this size without a major corporate tenant. It
further does not make good business sense to begin construction
of this large facility next door to a vacant hotel.
I, therefore, request the Redevelopment Agency further extend my
escrow closing date for an additional 12 months or until the
hotel has opened or we have collectively secured a major tenant
for this facility whichever is first, and further request that
the City of San Bernardino implement a major campaign to assist
in securing the corporate tenant for the good of our entire
downtown. I am confident other developers, including those in
the Commercenter, would support this position because everyone
benefits. I believe that it is apparent, irrespective of the
amount of the construction that is taking place in San
Bernardino, that we are faced with a substantial office building
vacancy factor which similar vacancy factors have had a major
negative impact on other cities across the Country. As
additional consideration for this extension, I will pay an
in-lieu tax to the Redevelopment Agency of $25,000.00.
With respect to the well-publicized current and projected growth
of our Inland Empire, I believe the scope of the project as
proposed will provide San Bernardino with the landmark office
facility for years to corne. On the other hand, if the City
believes, for whatever reasons, that a smaller project would be
more appropriate, I would be willing to reduce the size of the
proposed building accordingly and proceed immediately. I think
Councilman Gordon Quiel
REDEVELOPMENT AGENCY
CITY OF SAN BERNARDINO
Page Three
January 13, 1986
the City, the Redevelopment Agency and myself have all learned
construction for the sake of construction is not necessarily a
good thing. Thank you for your consideration in this matter.
Very truly yours,
HFD/dlf
VANIR DEVELOPMENT COMPANY, INC.
KDO~