HomeMy WebLinkAboutReso 1986-12619 RESOLUTION NO. 1Z619
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPRC~fING A STATEMENT OF INTENT WITH
HOMART DEVELOPMENT CO. FOR THE RENOVATION OF THE
CHULA VISTA SHOPPING CENTER AT BROADWAY AND "H"
STREETS
WHEREAS, the City Council of the City of Chula Vista (City) agrees
that it is desirable to renovate the Chula Vista Shopping Center; and
WHEREAS, the Homart Development Co. intends to purchase a portion of
the Shopping Center and will undertake the development of plans for the
renovation of the Center; and
WHEREAS, the Homart Development Co. has extensive experience in the
ownership, construction and renovation of shopping centers; and
WHEREAS, the Homart Development Co. has requested that the City
enter into a Statement of Intent for the development and review of plans, and
cooperation on other actions which may be necessary towards the renovation of
the Shopping Center.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Chula Vista that the Statement of Intent with the Homart Development Co.,
attached hereto as though fully set forth herein, is hereby approved.
BE IT FURTHER RESOLVED THAT the Mayor is hereby authorized to sign
said statement on behalf of the City.
Presented by Approved as to form by
PauI G. ~esrochers ~j~as J. Ha~r~h
Cormnunity Development Director ~Kgency Attorhey
WPC 2328H
ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
CHULA VISTA, CALIFORNIA, this 10th d(3y of July
19 86 , by the following vote, to-wit:
AYES: Councilmembers Cox, Moore, Campbell, McCandliss
NAYES: Counci 1 members None
ABSTAIN: Counci lmembers None
ABSENT: Counci 1 members None
Mayor City of Chulo Vista
ATTEST ¢/ City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO ) s s.
CITY OF CHULA VISTA )
I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California,
DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 12619 ,and that the same has not been amended or repealed
DATED
~ City Clerk
CI1Y OF
CHUIA VISTA
CC-660
STATEMENT OF INTENTION OF THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA, THE CITY OF CHULA VISTA,
AND HOMART DEVELOPMENT COMPANY CONCERNING THE
DEVELOPMENT OF THE CHULA VISTA SHOPPING CENTER
This Statement of Intention is made by Homart Development Company, a
~Oo~cata~ (b'~.~to"n) the Redevelopment Agency/ of the ~ity of Ghula
Delaware °~u ' ' ' ~)f the State of California ("Agency"}, and the
Vista, a
City of Chula Vista, a political subdivision of the State of California
("City").
R.ECITALS
A. Homart working in cooperation with the City and the Agency has
velo ed a lan for the redevelopment, renovation, and expansion of existing
cd~ula PvistaPshopping Center (the "Shopping Center") (such redevelopment
renovation and expansion being hereinafter described as the "Project"). The
implementation of the Project will require the assistance of the Agency
including the review and approval of plans and assistance in funding
improvements and various discretionary approvals from the Agency and City.
B. The Project will be of benefit to both City/Agency and Homart.
C. The participation of the City, Agency and Homart is contingent
upon a number of factors. The purpose of this document is to discuss the
issues known at this time so that prior to the investment of any additional
time and expense of either party, there is an understanding of the factors and
expectations of the respective parties needed to be considered to undertake
the Project and enter into a disposition and development agreement.
D. Homart plans to invest substantial time and money in order to
develop plans and obtain necessary approvals, and for the purchase, expansion
and renovation of the Shopping Center for the implementation of the Project.
To continue with the development of plans and the purchase of the Shopping
Center for the implementation of the Project, Homart desires that the City and
Agency express their willingness to consider preparation of documents and
processing and participation in the Project as set forth in this document.
E. This document is entered into expressly subject to the
qualifications and reservations set forth in paragraph VI.
STATEMENT.
I. Development Homart proposes to cause the following to be
accompl i shed:
a. The shopping center mall will be expanded from
approximately 105,000 sq. ft. of gross leasable floor area of tenant space up
to approximately 245,000 sq. ft. of gross leasable tenant space.
b. A major fourth anchor store of approximately 100,O00 sq.
ft. will be pursued; the City/Agency will assist Homart in the procurement and
analysis of the fourth anchor store.
c. Renovation and/or construction of the mall and all
buildings associated with the Project shall be accomplished in a "first class"
manner. First class is intended to mean a contemporarily designed, well
lighted, well landscaped, shopping center of unified design comparable to
University Town Centre in San Diego and shall be designed so as to unify the
Sears and Shopping Center sites into a comprehensive and master development,
so that the sites can be visualized, perceived, and utilized as a singular
development and parcel configuration.
d. The present major department stores, Sears, Broadway and
Penneys, will be encouraged to renovate both the exterior and the interior in
a first class manner as described in paragraph "c" above.
e. Purchase of certain properties owned by Carter, Hawley,
Hale and Louis Nohl interests will be accomplished by Homart so as to place
the entire Project under one management and ownership. Said purchase is
contingent upon determination of Project financial feasibility.
II. Development Homart proposes, and City/Agency agree to
consider, the following:
a. The Shopping Center will be expanded to include the
City-owned Boys Club property the value of which will be determined by a fair
market value appraisal.
b. The modification and/or closure of Fifth Avenue to
accommodate the Project will be investigated. Any configuration and rerouting
of Fifth Avenue would be designed so as to ensure that the Sears site and the
Chula Vista Shopping Center site can be combined as a useful and coordinated
development to ensure continuity for pedestrian and vehicular circulation.
c. The utilities in Fifth Avenue will be moved or modified as
necessary. If costs are involved, they shall become part of the pro forma of
costs discussed in paragraph III{e). Nothing herein shall be deemed to change
the legal requirements of non-City-owned utilities relative to abandonment
and/or relocation.
d. The City/Agency participation shall include on and off-site
improvements as mutually deemed necessary by the parties to accomplish the
goal of a renovated project.
III. Financial Considerations
a. Homart will commit to expend a minimum of $15 million over
and above acquisition costs to renovate and expand the Project not including a
potential fourth anchor department store.
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b. Homart will evaluate the Project based upon a 13% rate of
return on their equity invested in the Project before taxes, and forecast for
the third operating year after opening of the Project.
c. The City/Agency expects to receive a return in increased
property and sales tax revenues accruing from the Project. It is anticipated
that all or part of these revenues may be available for assistance to the
Project as deemed necessary by the City/Agency to facilitate the Project.
d. The financial participation by the Agency must be justified
by the needs of the project and be economically feasible in light of the
amount of available tax increment, sales tax, and other revenues which will
accrue to the Agency from the Project area. "Available" tax increment means
the amount of increment left after deducting the amount required by law for
low and moderate income housing purposes and any payments to taxing entities.
e. All parties to this agreement expect that the increase of
gross sales from the completed Project will be $40 million annually as a
minimum. The parties agree to consider during negotiations a mechanism or
formula whereby the Agency may share in the success of the project over a base
level.
f. A pro forma of all cost associated with the Project
(including costs incurred under Paragraph V, Processing and Documentation)
will be the basis for finalizing the Agency's and Homart's participation in
the Project in a disposition and development agreement. This agreement will
be finalized after the environmental impact report for the Project is
completed. After the dollar amount of the Agency's and Developer's financial
participation is calculated based on the approved pro forma in the agreement
between Homart and the Agency, Homart shall assume the risk or benefit of
fluctuations in the actual cost and revenues of the Project. As a result, the
financial participation of the Agency once determined will not vary, even
though the actual rate of return may vary from the projected rate of return.
g. The City/Agency will utilize the services of an independent
financial consultant to evaluate the pro forma of cost and advise as to the
amount of financial participation required by the City or Agency.
IV. Property
a. The City will conduct an independent fee appraisal of the
Boys Club property. The value may then be utilized as a credit in the pro
forma analyzing cost if conveyed to Homart.
b. If all or portions of Fifth Avenue are vacated and/or
modified, the remaining non-public right-of-way will be conveyed or otherwise
made available on such terms as the City/Agency shall determine to the
adjacent property owners and become part of the Project.
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V. Processin9 and Documentation
a. Homart will pay the cost of:
1) The preparation and processing of the environmental
impact report on the Redevelopment Plan Amendment and
the Development Plan.
All costs associated with the preparation and
processing of documents for the amendment of the Town
Centre II Redevelopment Plan as required to implement
the Project.
3) All costs associated with the negotiation and
preparation of a disposition and development agreement.
Such cost shall be incurred pursuant to a budget mutually
agreed to by Homart and Agency staff.
b. Homart shall be responsible for the preparation and
completion, to the satisfaction of the City and Agency, of all documents
necessary for the processing and consideration of the:
1) Development plan.
2) Amendment of the Town Centre II Redevelopment Plan as
required to implement the project.
Homart shall recon~end to the City/Agency qualified and
capable consultants to complete the work required for the preparation of the
environmental report from a list supplied by the City.
c. The City/Agency will consider:
l) Modification of the Town Centre II Redevelopment Plan
to include provisions for tax increment.
2) The processing of the environmental impact report
documents.
3) The processing of building and en§ineerin§
construction plans and/or modifications to public
improvements and utilities.
VI. This document is not intended to be a binding agreement, but is
intended to define the proposed Project sufficiently to commence preparation
of an environmental impact report and provide guidance to the parties in
negotiating the terms and conditions of a disposition and development
agreement by setting forth their respective general expectations for the
Project. It is expressly understood that for the Project to proceed the
parties must negotiate a mutually acceptable disposition and development
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agreement and the City and Agency must undertake the preparation,
consideration and certification of an environmental impact report in the
manner required by law and follow legally prescribed procedures, including
public hearings, and exercise independent discretionary judgment, relative to
an amendment to the Town Centre II Redevelopment Plan and the entering into of
a disposition and development agreement. Accordingly, nothing in this
document shall be construed as committing the City or Agency to (1) adopt an
amendment to the Redevelopment Plan, (2) enter into a disposition and
development agreement, (3) acquire or convey property to Homart, (4) vacate,
abandon or relocate streets, or (5) undertake any other actions requiring the
subsequent exercise of discretion by the City or Agency, or as committing
Homart to proceed with the Project under terms not satisfactory to it.
VII. Upon a determination, in its sole discretion, that it is not
practical or feasible to proceed, either party may terminate negotiations at
any time, without liability, upon giving written notice of termination to the
other party; provided that Homart shall remain responsible for those costs set
forth in Paragraph V.a. incurred by the City or Agency through the date of
termination.
MENT CO. REDEVELOPMENT AGENCY OF
Title: Development Director ~:tle: /~~Ciie velopment Agency
Date: Jul_v 28. lg~6 Date: August 1, 1986
Grego~/y ~. Cox
Title: Mayor of the City of Chula Vista
Date: August 1, 1986
WPC 2337H
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