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Home My WebLink AboutR02-Economic Development Agency l . e e - . . REDEVELOPMENT COMMITTEE M I NUT E S REGULAR MEETING November 9, 1989 - 4:15 p.m. The meeting of the Redevelopment Committee was called to order by Chairman Esther Estrada at 4:15 p.m., in the Redevelopment Agency Conference Room, Fourth Floor, City Hall, 300 North "D" Street, San Bernardino. ROLL CALL: Roll call was taken with the following being present: Committee Member Esther Estrada; Committee Member Jess Flores; Committee Member Michael Maudsley. STAFF PRESENT: James E. Robbins, Acting Executive Director, Redevelopment Agency; Arlene S. Berman, Administrative Deputy, Redevelopment Agency; Barbara Lindseth, Accounting Manager, Redevelopment Agency; Moe Estevene, Engineering & Design Coordinator, Redevelopment Agency; Dennis A. Barlow, Senior Assistant City Attorney; Phil Arvizo, Assistant to the Council; J. Lorraine Velarde, Chief Executive Assistant to the Mayor; Margie Vance, Recording Secretary. IN ATTENDANCE: Scott Rodde, Consultant, National Development Council. 1. National Deve10paent Council A discussion ensued. Mr. Scott Rodde reported that the Haagan Corporation resigned their position as "Exclusive Developer" for the Northwest Shopping Center Project. He explained that during the month of October, four developers have expressed interest in the Northwest Shopping Center Project. He said that the interested developers will make a formal submission of a preliminary report on their intentions with regards to a market grocery and a drug store. He said that a report with regard to their financial capacity, together with a schedule of performance will also be submitted. He said that he anticipated an early December deadline for those submissions. He said, that Housing and Urban Development (HUD), although disappointed at losing the developer, have expressed their commitment to working with the City for a reasonable period of time to allow the City time to identify another developer in order to get the project built. Committee Member Flores asked Mr. Rodde if he knew what HUD considered a "reasonable period of time". Mr. Rodde answered that from HUD's perspective six to nine months is a reasonable period of time. 1 November 9, 1989 l888R #oZ- e . e . . 2. Loan Payoff Northwest Shopping Center Barbara Lindseth, Accounting Manager stated that on September 9, 1986, the Community Development Commission approved a Resolution authorizing the borrowing of funds not to exceed $1,500,000 for the acquisition of the Northwest Project Area shopping center site and that on January 20, 1987 a Term Loan Agreement was entered into between the Agency and First Interstate Bank of California. She explained that a total of $1,300,000 was borrowed from First Interstate with monthly payments to be made until February 20, 1994 when the loan is due in full. She said that the monthly payments of principal ($12,500) plus variable interest have been paid by the Agency since February 20, 1987 and the current principal balance is $875,000. She said that because the interest rate on the unpaid principal balance was at the rate of one-half of one percent per annum in excess of the Bank's Prime Rate, which has been as high as 12%, that she was recommending that the loan be retired before the maturity date. She explained that the loan with First Interstate Bank requires that the Agency maintain a compensating balance of 5% in the checking account and unreserved fund balances of not less than $75,000,000, which had been maintained by the now defeased Mortgage Revenue Bonds. A lengthy discussion ensued. Committee Member Maudsley expressed his concerns regarding this issue and requested that staff provide more detailed information. RECOMMENDATION: The Committee recommended that staff continue the item to the next Redevelopment Committee meeting to allow staff time to prepare the requested information. 3. Status of DeGroot Default Ms. Nancy Davison, Project Manager addressed the Committee and stated that on July 5, 1989, an activity status report had been presented to the Commission which identified several agreements which were in default. She said that the agreement with Thedford and Jacqueline DeGroot was included among those agreements in default. She said that in May, 1979 the Agency entered into a DDA with the DeGroots for the development of a one acre site located on Riverview Drive in the Southeast Industrial Park Project Area and that the site was to be developed as a warehouse/distribution center for their company. She said that the Agency in return, was to install offsites, street improvements and utilities and that the Agency's obligations were fulfilled years ago as a blanket improvement project for the Southeast Industrial Park. 2 November 9, 1989 l888R tit e e . . She further ststed that in the event the one acre site was not developed, the Agreement (together with successive amendments) allowed the DeGroots to pay in-lieu fees of $4,000.00 a year, but that after five amendments to the Agreement with no plans for development in the near future, the Commission directed that title to the property be revested in the Agency. She said that the Sunset Group has entered into a partnership with the DeGroots, and has notified staff of their intent to build a metal building on the site. She said that on November 1, 1989, Mr. Patrick Hopkins, President of the Sunset Group, notified staff that two groups were interested in developing the site, and he would have site plans ready to present to staff in approximately two weeks. A lengthy discussion ensued. Chairwoman Estrada asked if staff had revested the title to the property as requested by the Commission. Ms. Davison responded that staff had not revested the title, and she said the prior Executive Director felt that there was a good possibility that the property would be developed. A lengthy discussion ensued. The Committee expressed their concerns regarding staff not following the Commission's recommendation and also recommended that the item be forwarded to the Commission for further review together with a status report of all of the Agency's Agreements in default. Committee Flores asked that the due date for the payment be included in the staff report. RECOMMENDATION: The Committee recommended that the item be forwarded to the Commission together with a detailed report of all of the agreements that are in default. 4. Sale of Sewer Capacity Rights Ms. Nancy Davison, Project Manager said that on 1984, the Agency purchased 800 sewer capacity rights ("SCR's") to be utilized as an incentive for commercial development within the redevelopment project areas. She said that in the five years since their purchase, the Agency has utilized 95 SCR's on several projects. 3 November 9, 1989 l888R . . , She said that the Water Department has submitted a request to repurchase the Agency's SCR's as they no longer wish to finance expansion through this means and will now be able to meet demand as it occurs though a series of modular expansions. She said that Staff has determined that the Agency now holds 705 SCR's and that the demand does not justify the reserves now held. She said that it was proposed that 605 SCR's be sold to the Water Department for $2,260.00 an SCR, for a total of $1,367,300.00. She further stated that the purchase price is based upon terms set out in the original Purchase Agreement dated 10/1/84. She said that Staff is recommending holding 100 SCR's in reserve for future development. . RECOMMENDATI ON: The Committee recommended this item be forwarded to the Commission. CONTINUED FROM SEPTEMBER 21, 1989 5. 1989-90 Budget - Workshop Mr. James E. Robbins, Acting Executive Director said that due to various scheduling constraints in June, a Resolution was adopted by the Commission on June 19, 198 authorizing the Agency to continue budget expenditures past July 1, 1989 at the same levels budgeted for in fiscal year 1988-89. He said that the proposed Agency budget for fiscal year 1989-90 was now ready for Committee review prior to Commission adoption. He said that the budget format has been revised to include separate project area budgets, along with a composite Agency budget summary and separate forms reflecting line item activity detail. . A lengthy discussion ensued. Chairwoman Estrada requested that copies of the budget be provided to all seven commissioners to allow them to review the same information. RECOMMENDATION: The Committee recommended that staff give a complete and accurate copy of the 1989-90 Budget to the full Commission for their review and input. Also, that this item be continued to next Redevelopment Committee of December 7, 1989. Adjournment There being no further business, the meeting of November 9, 1989, was adjourned at 6:30 p.m. APPROVED BY: 0-:~ . Redevelopment Committee - 4 November 9, 1989 1888R