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HomeMy WebLinkAboutrda min 1977/02/24 r1INUTES OF A SPECIAL MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, CALIFORNIA Held Thursday February 24, 1977 A Special Meetin9 of the Redevelopment Agency of the City of Chula Vista, California was held on the above date beginning at 7:00 p.m. in the Council Chambers, City Hall, 276 Fourth Avenue, Chula Vista, with the following Members Present: Chairman Scott, Members Hyde, Cox, Egdahl, Hobel Members Absent: None Staff Present: Executive Director Cole, Special Counsel Reed, Community Development Director Desrochers, Director of Planning Peterson, Community Development Coordinator Henthorn REVIEW OF PROPOSALS, Community Development Director Desrochers explained TOWN CENTRE REDEVELOPMENT that at the February 3, 1977 meeting of the Rede- PROJECT FOCUS AREA velopment Agency, three finalists were selected. The format of the meeting will be that each proposer will make its presentation without the others present. The ~-J'I\!~; Gruens are present to assist the Agency and staff. They have not seen the summaries as presented by the developers. At the conclusion of the presentations, staff will provide the Agency with a recommendation. Town Centre Mr. Hendrickson explained that their project is one Associates ,-.;;..:';'; of greater magnitude than that proposed by the other Leo R. B. Hendrickson appl i cants. They have attempted to minimize the impact on owners of the property. Their concept of high rise residential will increase densities. Proj ect plans of increasing rental area by underground parking is a phase that requires much study and consideration. It is designed to minimize impact on the balance of the downtown area. Impact on the other property owners in the area can be mitigated by Town Centre Associates, as they own 4y. acres. They propose to offer owners three options: 1) cash; 2) if desired, proceeds from bond monies could be used to acquire other properties and trade, and 3) give them an agreed value (limited partnership) and when the project is completed, the same appraiser would evaluate the property. The owner would have the opportunity of staying in the project area and taking property value in the form of property at its present value. Town Centre Associates would agree to lease the present shopping center with an option to buy. Rent under the lease would be to pay the bonded debt, less the tax increment the City recei ves. It Vlould be the responsibility of Town Centre Associates to see that the project is self- sustaining. Mr. Hendrickson stated Town Centre Associates does not have a complete plan, but can offer a \1i 11 i ngness to coopera te wi th the City. He added that they are not responsive if this is a -1- bidding stage; they want the option to negotiate. NOTE: EXHIBIT "A" ILLUSTRATES THE TEN QUESTIONS POSED TO EACH DEVELOPER. THEY WILL BE ANSWERED ACCORDINGLY IN EACH DEVELOPER'S PRESENTATION. Answer to Ten Mr. Hendrickson answered the ten questions as follows: Questions 1) Town Centre Associates wants to have as many of the existing merchants as possible to enter. We would be in a better position than anyone to offer that. 2) Already answered earlier in the presentation. 3) Their method of construQtion proposed is the fastest method. Si nce 4y' acres does not have to be acquired, high rise construction can be started right away (design and financing); towers, residential and senior citizens, would have to wait. Mr. Salerno noted the total construction could be carried out in a year or eighteen months depending on financing. Mr. Hendrickson added that there is great motiviation because of the tax increment. 4) Mr. Zogob stated $1 million in property is as good as cash. 5) They do not contemplate charges for parking. 6) As to condition of property on delivery to them, this would have to be negotiated. They want this project to be as big as possible. 7) No finder fees are required. 8) There is no determination as to a finite sum which they would be willing to advance to the Agency in order to commence acquisition. They would want to get the acquisition started as soon as possible to get the tax increment. They are willing to enter into agreements with property owners so they won't need any money (they look upon their property in the project area as money being advanced). g) They would not consider developing a portion of the property for housing only/commercial only. 10) Their plan is flexible and the developer would be willing to consider modifications. -2- Mr. Salerno stated that the shopping area would be in character with the rest of Third Avenue. Materials used would be wood exterior with heavy trim and lots of windows, two-story heights, underground parking and light wells extending down into the parking area below. As for auto circulation, he suggested changes to facilitate parking circulation. Perhaps consideration should be given to a traffic light at Center Street. Dr. Gruen asked if second floor retail would work. Mr. Salerno stated this would probably be used for office space. Mr. Salerno then described Foster City-Dillion Construction method at less then $25 per squa re foot. This would meet the Uniform Building Code for the City of Chula Vista. Mr. Hendrickson stated Town Centre Associates would propose to take care of the acquisition program. He added that the only acquisition would be the property between Garrett and Third. The shopping center space would stay much as it is (the super market might be moved) . Mr. Salerno added that they attempted to stay with the original plan, but want to show flex- ibility. Mr. Hendrickson stated the pricing figures are all on the original plan. In answer to Member Hobel's question, Director Desrochers stated that this plan does conform with the City's Des i gn Manua 1 . Mr. Salerno, in answer to Dr. Gruen's inquiry as to retail commercial space, indicated the retail gross floor area would be 128,790 sq. ft. Dr. Gruen questioned the owner participation arrangements as to where the return on the investment is to come from. Mr. Hendrickson stated the money comes from the tax increment. Executive Director Cole asked if the tax increment is to come from the total district, or can it be limited to this area? Special Counsel Reed stated they would be talking about pledging the tax increment from throughout the total project. In terms of analyzing this project, staff is estimating tax increment from the development area. Mr. Hendrickson explained that the project can be finished in 18 months from the date of delivery of the land. Mr. Zogob indicated this is an outside fi gure. The commercial could be done within a year from the time of acquisition. Mr. Salerno interjected that if the land is delivered free of all encumbrances, the project could be completed within the 18 months. Member Hobel commented that the Foster-Dillion method of construction being proposed should be given much consideration. Recess ca 11 ed A recess was called at 8:25 p.m. and the meeting reconvened at 8:35 p.m. -3- Collins/La Jolla Development Mr. Collins commented on his company's experience Harry Collins in the design of shopping centers, industrial and residential areas, and condominium design as well. Mr. Geritz. Project Architect for SGPA, reviewed the Collins plan for the Agency. He noted the pri- mary concerns as being the viability of the existing commercial area and integrating the resi denti al development, getting a strong linkage between all elements involved. He further explained that they developed a series of strong pedestrian spines, increased the units from 69 to 84 and felt the need to create an effect of more open area at major inter- section points and developing a series of buildings. He added that the residential has been increased, the commercial decreased. Mr. Geritz indicated the Collins Company is proposing to develop the entire site in a single phase. The entire construction sequence is about 7-8 months total for the acquisition of property. He pointed out first and second demolition stage targets and noted the importance of including the service station and Dean's Photo (at Madrona and Third Avenue) in acquisition. He added that off-street improvements which may be required to be carried out by the Agency are not part of the development costs. Mr. Collins remarked that he has analyzed the Alpha Beta supermarket; and the plot plan and size of space for a super drug are not practical. 1) Their plan gives consideration to existing tenants. 43% of the existing tenants are relocated to another area within the project, or remain in the same place. This company would work with the tenants for four major commercial tenants on Center Street in the project; rents below market for these uses are feasible. 2) Regarding owner participation agreements, when costs are analyzed, the economics would not be there and such agreements do not appear feasible. There would be complications with parking, etc. 3) Phasing would consist of commercial being completed within 6-8 months after delivery of land. They are looking at less than a year for completion of the entire project, all in one phase except for a delay in relocating the market. 4) They would be willing to provide a letter of credit for $10,000 with the condition that an agreement be executed with the Agency as outlined in the proposal. -4- 5) Parking would be on an open, non-paid basis, one car for each 285 square feet commercial and 1\ cars per residential unit. 6) Before implementing their plan, they expect the Agency to handle demolition of existing buildings and install off-site improvements. Some parking and landscaping improvements would be provided. They propose the elimination of a storage building and Dean's Photo and Danish Freeze from the project in the park area. 7) Under their proposal, no finder's fee is required. 8) They would be willing to advance up to $1 million toward the acquisition of land and buildings with adequate security. g) They are interested in developing the total project, rather than a portion of the prooerty. 10) The flexibility of their plan is minimal, with the exception of refinements in design and landscaping. Director Desrochers remarked the Collins Company has developed and submitted a pro-forma of costs. This has been analyzed by staff and found to be reasonable. Mr. Collins reiterated the Company's past experience and expertise in this type of development. He feels costs, rents, planning, etc. are real. He added he hopes retention of tenants will minimize relocation. Mr. Collins added the estimated differential in sales tax equals $100,000 a year sales tax revenue to the City. Recess called A recess was called at 9:05 p.m. and the meeting reconvened at 9:12 p.m. Calmark/M.S.1. John Cotton, Architect Through a slide presentation, Mr. Cotton reviewed the proposal before the Agency, noting land use for housing, elderly housing, specialty center and main commercial area along Fourth to tie in with Third. He mentioned Calmark's efforts to save buildings and to develop the park coming off F Street rather than off Third and related housing to the park (senior housing related to passive areas of the park). He discussed building forms involved and the efforts they have made to bring a green park through the housing. As for parking, there will be \ to 1 space per unit for the elderly, 2-1 parkin~ for two and three bedroom condominiums. They have attempted to create housing for middle income people, \1ith the character cO'l1plementarj to that existing in Chu1a Vista now (tile roofs, etc.), -5- Mr. Cotton further discussed the condos, specialty center and shops, types of apartments, and pedestrian centers. J.B. Brown Mr. Brown stated he feels the commercial proposal President of Calmark has advantages by the retention of existing structures. Their goal is to retain as many tenants as possible and retain a rent structure they will be able to afford. He added the residential area is low scale and can meet identifiable market needs. The elderly housing is important and makes available Community Development funds. Mr. Cotton added this plan calls for 143 res i denti a 1 units. He commented his company has a well-conceived and well-thought out project; they are "doers" and can get the job done. E.1. Noxon Mr. Noxon discussed the price allocated for M.S.1. commercial property. He remarked it would be $2 per square foot for commercial land in order to keep rents for existing tenants at the low end of the scale. Their rental schedule calls for ~n average rent of $5.40 per square foot. Paying more for the land would effect higher rents for tenants(which would be passed on), but he commented they do not want the original $2 to be a hard and fast offer. Agency contribution of $2 million could easily be supported. They feel the Agency could obtain this money from the tax increment, and they would guarantee that money can be raised and that bonds could be sold to make the proposal feasible. Mr. Cotton noted that the widening of Third Avenue would not be a part of their proposal. Parking for elderly housing In answer to Mrs. Gruen's question about parking for the housing, Mr. Cotton explained that spaces would not be next to the unit, which might be inconvenient but has been accepted in other areas. Answer to Ten Questions rk. Noxon, and Mr. Brown answered the ten questions in letter form. Following are their specific responses: 1) Our plan of development is specifically phased to allow existing merchants to continue in business while new construction proceeds. Existing merchants will be given a first right to choose a new location. The remodeled and renovated tenant spaces will be leased at a lower rental rate than newly con- structed space. This space will be offered first to existing merchants. -6- 2) Owner Participation Agreements could be effectuated for some of the buildings which are indicated to remain and be renovated on Third Avenue. The owners of these buildings, however, would have to agree to reconstruct and upgrade the stores in accordance with standards to be proposed by the developer and approved by the Agency. 3) As was indicated in the previously submitted proposal, the Calmark residential development activity can begin immediately and start con- struction on the conventional housing (either ownership or rental) as soon as is practicable from a cons tructi on and producti on standpoi nt, but not later than six months following the start of the elderly construction. The elderly program will have been completely constructed within twelve months after the start of con- struction and 97% occupied within two months thereafter. It is anticipated that the con- ventional programs will take seventeen to twenty months for completion of construction and market absorption leading to total occupancy. Exhibit No. 1 refers to the time schedule for the commercial development. 4) Calmark and M.S.I. are willing to deposit an irrevocable Letter of Credit in the amount of $25,000 during the negotiation period to secure our obligation to negotiate workable terms and conditions of a Disposition and Development Agreement. Performance bonds and/or deposits for subsequent periods will be determined. 5) Elderly housing parking ratio one space per two units with onsite allowance provided for a one to one ratio should it later prove necessary. Con- ventional ownership two spaces for each unit. Conventional rental parking for one space per unit with allowance for adding up to one space per bedroom at a later date if necessary. Commercial provides 430 spaces or a ratio of 2.9 spaces per 1,000 square feet of commercial space. 6) Residential land to be delivered clear and free of all encumbrances including elimination of easements; clear and fill property, complete offsite improvements and obtain proper zoning. It would be a benefit to the City and the project if the City were to place utilities underground. Commercial property should be delivered with buildings removed where required and adequate utilities brought to the site. Utilities in streets to be vacated -7- should be terminated or removed. The Agency should also be responsible for constructing any offsite street improvements, providing required rezoning and/or variances, and the elimination of possible conflicting easements. 7) No finder's fee required. 8) Our analysis of the municipal financing requirements indicate that no advance funds will be required in order for the Agency to commence acquisition. This is possible through various techniques which Calmark and M.S.I. will assist in. Should unfore- seen difficulties arise, Calmark will investigate other solutions in concert with the Agency, including the advancement of funds. g) Either party, Calmark residential or MSI commercial would consider its program without the other. However, a major strength of the Calmark/MSI team is, each acting in its own field of expertise, have joined together under one design concept. 10) While Calmark and MSI do not consider that it is appropriate at this time to make substantive modifications to the proposals as presented, during the negotiation period it is expected that additional information and input from the Agency and staff will be given. Discussion ensued on the possible implementation of an auto service center. Calmark would attempt to find a site in Chula Vista by working with local realtors. The site would be purchased with private funds and augmented with Agency resources. They are attempting to locate people who could relocate with other auto stores, and possibly a center for lease or sale. Member Hyde asked the Gruens about separation of commercial and residential costs. Dr. Gruen indicated there would be no commingling of funds in any case. Dr. Gruen commented on staff's coming up with1he fact that the proposal would require a write-down for $2 million and asked what is missin~. They have reviewed numbers shown by staff and feel 275 thousand a year in tax increments would be realized. They disagree with staff's estimate which they feel is too conservative because they do not show the potential of fixtures and income. Recess called A recess was called at 9:55 p.m. and the meeting re- convened at 10:05 p.m. Developers commended for Agency members commended all three developers for the presentations time and effort devoted to each presentation. -8- Motion to Prepare It was moved by Member Hobel, seconded by Member Hyde Matrix for Special and unanimously carried that staff be directed along Meeting with Gruen + Gruen to prepare matrix on the three proposals for a special meeting on March 10. Along with that, the Agency would entertain comments from the community. Member Hyde asked that the Town Centre Project Area Committee be advised of the proceedings and their comments be solicited. Community Development Director Desrochers asked that no new information be presented at the meeting of March 10. ADJOURNMENT The meeting adjourned at 10:02 p.m. to the regularly scheduled Agency meeting of March 3, 1977 at 7:00 p.m. " " ) . " , . . / ' ,r', _"_, \ \, <. -- . /','. " j", '/ "..-' , . , , /; '. :{:~ ' . (, ...., ," (, ~.. ~, _ . /' I l '. Paul G. Desrochers, Secretary Community Development Director -9-