HomeMy WebLinkAboutrda min 1987/03/26
A SPECIAL MEETING OF THE REDEVELOPMENT AGENCY
OF THE CIT~ OF CHUL~ VIST~
Thursday, March 26,1987
4:00 p.m.
ROLL C~LL
Counci 1 Conference Room
City Hall
MEMBERS PRESENT:
MEMBERS ~BSENT:
Chairman Cox; Members Nader, Moore and McCandliss
Member Malcolm
STAFF PRESENT:
Executive Director Goss, Community Development
Director Desrochers, Agency Attorney Harron,
Redevelopment Coordinator Kassman, Public Information
Coordinator Cox, Director of Finance Christopher
1.
RESOLUTION 793 APPROPRIATING FUNDS FOR DOCKING AND PUBLIC ACCESS FOR SAIL
AMERICA'S "STARS AND STRIPES '86"
At its meeting of March 3, the Council directed that a resolution be brought
to the Redevelopment Agency appropriating $3,500 to be used to bring the yacht
"Stars and Stri pes' 86" and Ameri ca' s Cup trophy to Chul a Vi sta Harbor as part
of the Nautical Heritage Day event.
Public Information Coordinator Cox reported it is being planned to have the
Cal i forni an dock at the Chul a Vi sta Mari na and for the Stars and Stri pes' 86
to be brought to the South Bay Boat ~ard. The Stars and Stripes '86 will be
taken out of the water and placed on display at the Boat ~ard. The display of
the America's Cup trophy would be at the foot of the yacht. Details are being
worked out in terms of displaying the trophy and security.
MSUC (Cox/McCand1iss) to amend the resolution as follows:
"....appropriating funds for docking, public access, and all
associated costs for Sail America's "Stars and Stripes '86"
other
Member McCand1 i ss stated she wou1 d 1 i ke to have a report come back with the
final accounting related to this matter.
CHAIRMAN COX OFFERED THE RESOLUTION, the readi ng of the text was wai ved by
unanimous consent, passed and adopted unanimously.
The Redevelopment Agency recessed at 4:07 p.m. to a City Council Meeting.
Agency reconvened at 4:59 p.m.
The
2.
REPORT:
PROPOSED DISPOSITION AND
DEVELOPMENT COMPAN~
DEVELOPMENT AGREEMENT WITH
HOMART
The City Council authorized the closure of Fifth Avenue between "H" and "I"
Street for the purpose of expanding and renovating the Chu1a Vista Shopping
Center at their meeting of March 17, 1987. The closure is dependent upon the
Redevelopment Ägency Meeting
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March 26, 1987
development and approval of an acceptable Disposition and Development
Ägreement (DDÄ) which provi des for the impl ementati on of appropri ate traffi c
miti gation measures to accommodate the closure. The Council a1 so i dentifi ed
additional items to be included in the DD~ to ensure that certain City and
community needs are met. Subsequent to Council action, Agency staff have met
with consultants and with representatives from the Homart Development Company
in order to develop a proposed DDA, including a financing plan.
Community Development Director Desrochers stated the Disposition and
Development Agreement will discuss items that were put forth in the resolution
approving the closure of Fifth Avenue. At this meeting, staff will be
focusing on the financial arrangement and the scope of the development. Some
of the issues that will not be discussed at this time include the expediting
of the plans through the City; transportation link from the Shopping Center to
downtown, the Bayfront and the Trolley Station; marketing of the City,
particularly Town Centre II; expansion of the Town Centre II project,
particularly the commercial areas near the shopping center; an agreement
regarding traffic on Fig Street; the master plan of development; the Broadway
Department Store; and the community facility.
Marcia Scully of McDonough, Holland and Allen, representing the Agency, stated
the DDA is basi cally goi ng to define the busi ness terms between the two
parties. The primary terms will be the Agency's obligation to make a
financial contribution to the completion of the expansion of the center, and
the Ägency's contribution to transfer specified parcels of real estate to the
developer to complete the site. The developer's primary obligation is to
assemble the remaining portions of the site and to complete the expansion of
the center and improvement of the existing center. Additional obligations of
the developer include:
1.
The provision to the Agency of assurances that the Broadway Department
Store will participate in improvement of the existing facility.
The developer will agree to work with a citizens' committee appointed by
the Agency regarding a community facility within the shopping center.
2.
3.
The developer will provide a financial guarantee regarding completion of
the physical improvements on the site.
The developer will agree to make a good faith effort to obtain a fourth
major department store for the center.
4.
Ms. Scully further stated the scope of development in the DDA will set out in
detail the physical requirements of the completed center. It is important
that to the extent possible all of the design requirements and facility
requirements be included in the scope of development prior to execution of the
document.
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Redevelopment Agency Meeting
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March 26, 1987
Ms. Scully noted that the financing plan in the DDÄ will describe how the
Agency will make its contribution to the developer. The Ägency's contribution
will be in the form of a lease payment to the developer and that lease payment
will secure a portion of the public parking on the site for a period of
years. Thi s wi 11 be for the same peri od of years as the note which wi 11 be
used to raise the funds. The repayment of the note will be the lease payments
from the City to the Agency for the public parking. In terms of negotiating
the contract, staff operated under the assumption that the real security for
the repayment of the money is property tax increment and sales tax increment
generated by the center. It is the intent of staff to create a safety net
which would prevent invasion of existing General Fund monies to payoff the
debt service.
Ms. Scully further noted that Homart has agreed in pri ncipl e to provi de a
guarantee which will be for a specified level of sales tax generated by the
completed center.
Ms. Scully stated the DDA will include a schedule of performance which will
set forth a timing for both parties' obligations. It will also contain
default provisions; a number of standard issues relating to insurance
provisions; use of the site after completion; and items included in the
resolution for closure of Fifth Street such as the requirement for an improved
security plan.
Mr. Charles Adams of Jones Hall Hill & White, Redevelopment Agency Bond
Counsel, used the overhead projector to illustrate the financing structure.
The City' s/Agency' s contribution to this project will be in the form of
financing the acquisition of an existing public parking lot to be maintained
for pub 1 i c park i ng purposes. The Agency wi 11 enter into along-term 1 ease
with Homart.
Director of Finance Christopher provided each member with a copy of a one page
summary titl ed "Calcul ation of Redevelopment Fundi ng." He noted these fi gures
are close to being the final figures.
In response to Member McCand1iss' concerns, Mr. Christopher stated the funding
figures being discussed are a summary. There is a good deal of detail behind
this page which is being evaluated and validated by Gruen + Gruen & Associates
at this time.
11ember Moore asked if the value of Fifth Avenue has been included in the
fundi ng fi gures. Mr. Chri stopher responded "no." Executi ve Di rector Goss
noted that at the time these figures were prepared the underlying ownership of
the street was unknown. Since discovering the U. S. Government ownership, the
value of the land will need to be reconsidered.
Mr. Christopher noted that, using this pro forma, the Agency's contribution
would be approximately $7.1 million. Staff is attempting to structure a
fi nanci ng that uti 1 i zes revenue whi ch accrues from both the property tax
increment and sales tax increment. It is proposed to use these sources of
revenue to pay the debt service on the amount borrowed to finance the Agency's
participation. It is proposed to issue Certificates of Participation that use
the City's General Fund credit worthiness as security.
Redevelopment Agency Meeting
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Ma rch 26, 1987
Mr. Peter Ross of Dean Witter Reynolds spoke on behalf of the Redevelopment
Agency. He di stri buted a presentati on brochure whi ch contai ned a further
breakdown of the proposed financing. In an overview of the proposed
financing, Mr. Ross noted the following points:
Provide funding of Agency contribution
Participation.
through
Certificates
of
Certificates of Participation create payment obligation which has
source with City's General Fund.
Certificates of Participation issue is structured so that revenues
from project more than meet payment obligation created by
Certificates of Participation.
Mr. Desrochers poi nted out that an important e1 ement with regard to the
financing is taking place at this time. On March 25, 1987, the Planning
Commi ssi on approved the amendment to the Town Centre II Redevelopment Pl an
regarding the provision of tax increment. This will be coming before the
Redevelopment Agency and City Council on April 7.
Mr. Christopher clarified that the proposed guarantee by Homart will occur in
the event that there is not enough sal es tax p1 us property tax increment
revenue to meet the debt service on the bond issue.
In response to Chairman Cox's Question, Mr. Christopher stated Homart will be
guaranteeing 90% of their projections.
Redevelopment Coordinator Kassman discussed the time schedule involved with
this project. The DDA is to be completed by April 21, 1987. The target date
to begin construction on traffic mitigation and relocation of utilities is
August 1, 1987. The target date for compl eti on of the expanded center is
Fall, 1988.
Tom Gourguechon of Homart Development Company commented that Homart is
carrying the burden of risk in this endeavor. He further noted it is critical
that this project open prior to the Christmas shopping season in 1988.
Mr. Desrochers stated one of the items considered in the resolution approving
closure of the street was a community facility committee. Basically, the
purpose of the committee would be to advise the Agency and Homart as to the
type of community facil ity that may be i ncl uded as part of the center.
Member Nader poi nted out the i ntenti on of hi s moti on with regard to thi s
committee was that the committee work with the Agency and Homart on the type
of community facility; plans for renovation of the shopping center; and, also,
tenant mix and plans for a replacement youth facility.
Mr. Gourguechon stated Homart is operati ng under a Consent Decree wi th the
Federal Trade Commission. The intent of the Consent Decree was not to limit
Homart's business and the ability to conduct its business, but was the result
Redevelopment Agency Meeting
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March 26, 1987
of a long suit with the Federal Trade Commission that had to do with Homart's
concern of Qual i ty. The Decree is di rected to the types of merchandi se that
can be included or purposefully precluded from entering the shopping center.
Mr. Gourguechon further noted hi s concerns wi th regard to the proposal for
this committee. First, this project is on a fast-track schedule for
comp1 eti on. Second, he noted very sophisti cated technical and archi tectura1
issues will need to be dealt with. Third, there already are redundant review
processes in the City.
Member Nader stated hi s concept for thi s committee was that it wou1 d be
addressi ng Questi ons that pertai n to the specific needs of thi s communi ty in
terms of the type of tenants there is a demand for. He stated the committee
woul d be basically advi sory but one that Homart and the Agency woul d be
required to consult with. It was not his intention to have this committee
dup 1 icate the functi ons of the Desi gn Revi ew Committee.
Chai rman Cox stated he woul d not have a prob1 em with establ i shi ng a community
committee. He suggested the committee work specifically on the issue of the
type of community facility for the center. Chairman Cox noted there was not a
need to create an additional body to deal with the architectural review.
Regardi ng the tenant mix, the body that is best ab1 e to revi ew that is the
existing Project Area Committee. Chairman Cox further suggested the committee
consist of seven members including representatives from the neighborhood,
Council, Cultural Arts Committee and perhaps representatives from youth
organizations or social service organizations.
Member McCand1iss stated from an overall standpoint regarding the DDA, she
would like the terms to be defined as clearly as possible. She further noted
that the staff report refers to a commitment for refurbishment of the Broadway
Department Store. She would like to see Sears addressed as well.
Member Moore noted the discussion taking place is for informational purposes
and that no action is required.
Member McCand1iss stated she is not sure a youth facility would be compatible
wi th the center. The City has a responsi bil i ty to look at recreati onal needs
of youth of the area. She would 1 ike to see the Parks and Recreati on
Department consider looking at the recreational needs of the western area of
the City, and would like to see a report come back from Parks and Recreation
as to what would be involved in doing such an evaluation.
~'SUC (McCand1 i ss/Moore) to refer to staff the Questi on of an eval uati on of
recreational needs for youth in the western end of the City. (3-0; Cox not
present for the vote.)
3.
ORAL COMMUNICATIONS:
None.
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March 26, 1987
4. DIRECTOR'S REPORT:
None.
5.
CHAIRMAN'S REPORT:
None.
6. MEMBERS' COMMENTS:
None.
ADJOURNMENT at 6:40 p.m. to the regular meeting of April 2,1987, at 7:00 p.m.
~
Community Development Director
WPC 2850H