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HomeMy WebLinkAboutItem 9 - Written CommunicationsCollins Aerospace I Aerostructures 850 Lagoon Drive MZ 107V Chula Vista, CA 91910-2098 U.S.A. Phone: +1 619 691 6425 Fax: +1 619 691 2222 Email: mike.grondalski@collins.com www.collinsaerospace.com Mike Grondalski Vice President, Operations Collins Aerospace I Aerostructures June 17, 2019 Ms. Tiffany Allen Assistant Director Development Services Department City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 Dear Ms. Allen, Thank you for taking the time to meet with my colleagues and associates on June 13th. It was a pleasure meeting you, and we are grateful for the opportunity to discuss the development plans for our properties with you and Eric Crockett prior to the City Council meeting on June 18th. Rohr, Inc. (now a part of Collins Aerospace) and the City of Chula Vista share a rich history of collaboration dating back to the 1940’s when Fred Rohr, the company’s founder, relocated Rohr Aircraft Company from downtown San Diego to Chula Vista – a move made possible by the City’s bond issue to help finance the purchase of 10 acres on the Bayfront. Our partnership has endured throughout the years and continues to present day, as evidenced by the 1999 Relocation Agreement and our cooperation towards redeveloping Rohr’s former south Campus in furtherance of the Bayfront Master Plan. In early 2020, Rohr will cease manufacturing activities in Chula Vista. Although Rohr intends to maintain approximately 1,800 employees at its global headquarters in Chula Vista (including its engineering, research and development and spare parts distribution warehouse), the cessation in manufacturing activity will result in the consolidation of our footprint north of “G” Street. Consequently, the company plans to sell roughly 50 acres of real estate consisting of parcels located between “H” and “G” Streets together with certain parcels north of “G” Street adjacent to Bay Boulevard (collectively, the “Properties”). My colleagues and I have regularly apprised the City of this situation as it has evolved over the past three years via periodic meetings with Eric Crockett and Gary Halbert. While actively marketing the Properties during the past year, we received indications of interest from over 100 prospective buyers. In conjunction with our real estate advisor, JLL, we have undertaken a comprehensive process of evaluating prospective purchasers according to an array of criteria and have selected the team of Penwood Real Estate Investment Management and Wohl Property Group as our buyer. As the equity source, Penwood is a real estate investment advisory firm dedicated to managing value-added real estate investments for the institutional market, including state pension funds. As the developer, Wohl Property Group has a demonstrated track record of developing and operating Class “A” industrial, office and mixed-use properties throughout Southern California. On behalf of the company and our partners, Penwood/Wohl, I would like to take this opportunity to outline our intent and understanding from our June 13th meeting relative to the Properties; namely, that Rohr, the City, and Penwood/Wohl (collectively, the “Parties”) will exercise reasonable diligence and work together in good faith to explore the following: (a) Multiple potential land uses and zoning options for the Properties including industrial, commercial and mixed-use. We appreciate the Properties’ advantages afforded by the proximity to the “E” Street and “H” Street MTS Trolley Stations and Chula Vista Bayfront project and seek to maximize value for all stakeholders involved. (b) Implementing a Specific Plan to accommodate higher land uses along “H” Street, while preserving industrial redevelopment for the northerly section of the Properties; (c) Consulting with RIDA regarding potential synergies for development along “H” street, with the understanding that commercial/retail uses would need to complement the surrounding Bayfront uses, including uses such as restaurant/brewery, specialty/experiential retail, grocery, convenience, in addition to uses that would directly complement the proposed hotel/convention uses, e.g., convention and trade show exhibitors, staging, commercial laundry, floral suppliers, and wholesale food and restaurant suppliers, among others; (d) Designing a project that encourages the development of contemporary, clean and attractive industrial buildings that accommodate a wide range of uses, including e- commerce,1 omnichannel retail2, defense and maritime, all of which are likely to add reasonably well-paying, durable jobs to the City; and (e) Considering the flexibility of well-designed multi-tenant industrial and commercial buildings that can accommodate a broad spectrum of mixed industrial, retail and commercial uses. Timing and certainty is our primary concern. Rohr plans on recognizing the proceeds from the sale of the Properties in 2020 while our partner, Penwood/Wohl, has committed funds to this project that need to be placed at that same time, while assuming a return on its investment within a reasonable period of time thereafter. We are concerned that a General Plan Amendment and rezone of the Properties will require a significant amount of time and introduce delay and uncertainty into the project, leaving the existing buildings empty and unsightly for years to come. Instead, we propose working with the City to devise a Specific Plan that is developed in the collective best interests of the Parties. In our view, the ideal plan is one that reserves frontage along “H” Street for commercial and retail uses while reserving the northerly portions for industrial, while also maintaining flexibility of use on the vacant parcels fronting Bay Boulevard. This plan would more quickly unlock the enormous potential of the Properties and their possible synergies with the surrounding land uses of the Bayfront. Thanks again for your time on Thursday. We look forward to working with the City in continuing our collaborative and cooperative relationship as we embark on the next chapter in our shared history. Best Regards, Mike Grondalski Vice President, Operations Rohr, Inc., a part of Collins Aerospace cc: Eric Crockett, Director of Economic Development, City of Chula Vista Richard H. Chase, Penwood Real Estate Investment Management Emil J. Wohl, Wohl Property Group 1 We believe the site is an ideal “last-mile” site for e-commerce companies. Amazon recently announced one-day delivery on 10M items, and the strategic in-fill location of the Properties would be attractive to these types of companies. 2 With the emergence of e-commerce, the traditional brick and mortar retail model is being replaced with an omnichannel model that combines industrial and retail product delivery to consumers. We expect the Properties to serve the rapidly increasing demand for last-mile consumer delivery because of its immediate freeway proximity and dense surrounding consumer population.