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HomeMy WebLinkAboutrda min 1987/07/21 (2) MINUTES OF AN ADJOURNED REGULAR MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Tuesday, Ju1y 21, 1987 9:10 p.m. ROLL CALL Council Chamber Public Services Building MEMBERS PRESENT: Acting Chairman Moore; McCandliss, Malcolm Members Nader, MEMBERS ABSENT: Chairman Cox STAFF PRESENT: Executive Director Attorney Rudolf, Director Desrochers Goss, Assistant City Community Development 1. REPORT PARK PLAZA AT THE VILLAGE Park Plaza at the village with the addition Nursing will be 87% occupied. Beverly Hills construction lender, has notified the arrangements have not been made to pay institution will foreclose by August 26, 1987. of Cabrillo School of Savings and Loan, the partnership that if off the loan, the At the June 18th meeting of the Agency, members were informed that a company, Capital Advisors, was interested in purchasing the center. At that time the principal, Mr. Ronald Myhro, was considering several concessions that the City may have to take if he were to purchase the Center. Mr. Zogob has also suggested a possible financial participation package that involves the Agency. Redevelopment Coordinator Fred Kassman explained that the Agency has three proposals to consider. The first would be the release of parcels 2, 4 and 6 from all obligations from the parking structure fees and that the City manage and control the operation of the parking garage. The second proposal would be to lease back parcel 4. The City would purchase this from the owner for $1 million and then lease it back to them. The City would take over the management of the parking structure. The third proposal would be for the City to do nothing and there would be a possible consequence of foreclosure by the Beverly Hills Bank and they would sell the property. The staff recommendation is to have authorization from the Agency to work with Mr. zogob, Mr. Myhro and At torney Cowett and come back to the Agency in two weeks wi th a firm proposal. Staff is also requesting authorization to hire the firm of Gruen Gruen & Associates as financial consultants to resolve any economic questions that may arise. Redevelopment Agency Minutes - 2 - July 21, 1987 Acting Chairman Moore remarked that the staff was to provide the Agency members with a written documentation of this detailed information and he is disappointed and disturbed that it has not been prov ided. Community Development Director Desrochers explained that the staff has just received this information today at approximately 3 p.m. He added that staff is not sure they can support any of the three proposals at this time; they are not asking the Agency to make any decision on this matter until after they meet with Mr. zogob and Mr. Myhro. Mr. Michael Cowett, Attorney representing Century Associates Limited and Capital Advisors stated that he too has trouble with the dollar numbers as presented in the staff report. His clients are spending a great deal of time evaluating this matter since they want to make it a viable project without impairing the cash flow to the City. What they are proposing at this time is that the City operate and maintain the parking structure and that parcels 2, 4 and 6 pay an in-lieu fee which would basically pay for the maintenance of the parking structure minimizing any expense to the City. Mr. Cowett stated that there is now a "turn-around" occurring in the Park Plaza; his client does not want to give this up at this time but has no alternative. Mr. Cowett then related the background information of the construction of the Park Plaza noting that $30 million of private development money has been spent in this focus area. In addition, the Redevelopment Agency has spent $4 million building the parking structure. Since Mr. Zogob cannot pay the construction loan, they are asking that the deal be restructured and are supporting the staff recommendation. Member Malcolm indicated that he is disturbed by the deal; he cannot go along with any of the proposals offered this evening and is opposed to bringing in the firm of Gruen and Gruen. He suggested the Agency form a sub-commi t tee and sit down with the developers and staff and negotiate a deal. He added that the Agency needs to get involved and work this out. Member McCandliss stated that she does not have enough information at the present time to make any decision on this matter; however, she does feel that there should be some kind of professional analysis done of the economics of the plan since there are many questions to be answered such as how much is the loan - how much is being paid out on the loan, etc. She added that the Agency has been consistently giving for the Center and now they are being asked to give again. She wants to make sure that the City is not being taken for a ride. In answer to Acting Chairman Moore I s question, Mr. Cowett stated that two weeks would be a sufficient amount of time. Pedevelopment Agency Minutes - 3 - July 21, 1987 MSUC (Moore/McCandliss) to appoint Members Malcolm and Nader as the sub-committee for the Redevelopment Agency to meet with the developers and have them come back to the Agency with a report. MS (McCandliss/Moore) staff be authorized to utilize the services of a consultant on a limited basis for any financial matters. Agency discussion followed with Director of Finance Christopher answering questions pertaining to the financial aspects of the proposals; Member Malcolm commenting that he doesn't need a consultant to tell the Agency that they are giving Mr. zogob a break; he would like to see a firm and detailed contract specifying advertising for the center, promotions for the center and so forth. Member McCandliss stated that there will have to be some give and take but she doesn't want to have the City be the one taken. The consultant can work under the direction of the Director of Finance along with staff and the City Attorney. She added that her motion for a consultant would be one who is either a legal or financial consultant. The motion for authorization consultant carried unanimously. to utilize the services of a Community Development Director Desrochers stated that the report will be on the agenda meeting of the Redevelopment Agency on August 6, 1987 at 7 p.m. MSUC (McCandliss/Nader) to accept the staff recommendation with the addition of the sub-committee. 3. ORAL COMMUNICATIONS None. 4. DIRECTOR'S REPORT None. 5. CHAIRMAN'S REPORT None. 6. MEMBERS' COMMENTS None. The Agency recessed to Closed Session at 9: 50 p. m. to di scuss: Sierra Club v. Marsh; Sierra Club v. Coastal Commission et. al.; possible acquisition of property located at 494 Third Avenue and 315 "H" Street within the Town Centre I project, and 340 Bay Boulevard within the Bayfront project and items of potential litigation. The City Clerk was excused and the Executive Director reported that the Session ended at 10:30 p.m. ADJOURNMENT AT 10:30 p.m. to Thursday, August 6, at 7 p.m. the regular meeting scheduled for ~ :JJ;J c;:; -&5 ~ie M. Fulasz, CMC City Clerk 0936C