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HomeMy WebLinkAboutcc min 1986/06/26 RDA MINUTES OF A JOINT ADJOURNED MEETING OF THE CITY COUNCIL/REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Thursday, June 26, 1986 Council Conference Room 4:00 p.m. City Hall ROLL CALL MEMBERS PRESENT: Mayor/Chairman Cox, Councilmembers/Members Campbell, McCandliss, Malcolm, Moore MEMBERS ABSENT: None STAFF PRESENT: City Manager/Executive Director Goss, City Attorney Harron, Assistant City Manager Asmus, Community Development Director Desrochers 1. RESOLUTION APPROVING A STATEMENT OF INTENTION WITH HOMART DEVELOPMENT COMPANY FOR THE DEVELOPMENT OF PLANS FOR THE RENOVATION OF THE CHULA VISTA SHOPPING CENTER (Community Development Director) Mayor/Chairman Cox noted this item is to be continued at the request of the staff. Community Development Director Desrochers explained that he met with the City Attorney, Mr. Marshall Krupp, and Mr. Gourguechon of Homart during which they went over the agreement and revised certain sections in accordance with the comments made by Council and Mr. Krupp at the Council meeting of June 24. Mr. Gourguechon will be taking this draft back to Homart for their review and approval and it will be an agenda item for the Redevelopment Agency meeting of July 10. Some of the changes which were made are: the City will have an independent review of the pro forma costs - a financial consultant will be hired to do this; the City will work with Homart on the 4th store; it is expected the project will generate ~20 million a year, of which the City will realize $100,000 in sales tax; no commitment is being made by the City at this time except to remain open; Homart is now ready to enter into an option with the partners of the Chula Vista Shopping Center; City making no commitment as to the rate of return (13%) expected by Homart. Minutes 2 June 26, 1986 Joint City Council/Redevelopment Agency Meeting Council/Agency discussion followed regarding various aspects of the agreement including questions concerning any "gap" in the financing; relocation and costs of the utility lines and responsibility of the San Diego Gas & Electric Company; the Fifth Avenue configuration - the agreement doesn't state the street has to be closed but will address the pedestrian access. Mr. Krupp defined his role in this matter as having a clear understanding with Homart that he represents the project so that it will be economically feasible, practical, and politically acceptable; there is no binding commitment on the part of Homart and the City Council/Redevelopment Agency at this time; Homart needs this discretionary approval process before they start spending any large sums of money; the money Homart will invest is in the six figures (110,000) and not refundable; the viability of the project is based upon the perception that it is "visibly integrated with one another" - includes both sides of Fifth Avenue; all the costs will be thrown into the pro forma - both the City's and Homart's; discussed the amendment to the redevelopment plan which will require some type of participation; Homart wants to do the project the City wants with the understanding that anything they do is plugged into the pro forma; discussed the "debt service" for both Chula Vista and Homart. Councilman/Member Malcolm indicated his concern wi~h the Council/Agency attempting to set up the goals and objectives of the agreement when an outside consultant (real estate person or financial specialist) is needed to deal with Homart. He added that if there is an "up-side" to the project, the City should participate in the additional profits - he spoke to a representative of Homart and they have no problem with this. MSUC (Cox/Moore) to authorize staff to bring in a consultant/expert who will be available to review this document and have the recommendation available for the July 10 Redevelopment Agency meeting. Mr. Desrochers commented he is looking toward getting an economist or market person. Councilman/Member Malcolm objected to having an economist negotiate the agreement and suggested other contacts. City Attorney Harron said he worked on the first draft and changed many things in it to the benefit of the City. He inserted a statement that the City would not enter into the agreement if it was not economically feasible for the City. Attorney Harron added that the time for the Council/Agency to bring up all of the detailed points would be at the time the Disposition and Development (DDA) is before them. Minutes - 3 - June 26, 1986 Joint City Council/Redevelopment Agency Meeting Mr. Krupp testified Homart cannot go through a long evaluation process since they do not know all the costs and he assured the Council/Agency Homart will not be around three months from now. All they are saying now is ware you interested in working with Homart?" Homart will not do the project unless there is a 13% return for them. For the record, Homart wants the City to hire an independent consultant. Councilwoman/Member McCandliss said she and the Mayor/Chairman (sub-committee) both received a copy of the draft agreement today. Councilman/Member Malcolm questioned Mr. Desrochers as to why the other members of the Council/Agency did not receive copies stating that in the future, whatever documents are given to one Councilmember are to be given to all of the Members. (At this time, Mr. Desrochers made copies of the agreement and passed them out to the other members of the Council/Agency.) 2. DISCUSSION - BAY HOSPITAL MEDICAL CENTER Mayor/Chairman Cox announced he is w~iting for a call from the Board of Directors of the hospital who are meeting at this same time (4:00 p.m.). Councilman/Member Malcolm stated he is ready to consider the item now. He commented that in the past, during all of the trouble with Bay Hospital Medical Center, no one was willing to come forward and sign his/her name to the numerous anonymous complaints and allegations. He now has the names of the former Chief of Security, Chiefs of some of the hospitals throughout San Diego, and an administrator of a hospital who will all go on record and sign their names to the petition asking for a Grand Jury investigation. Councilman/Member Malcolm added that the City has the responsibility of Bay Hospital Medical being in the City - and for its non-profit status. Further, the City also has the responsibility and accountability of any improprieties. This facility is a major asset which will revert back to the City after the lease expires. A new operator will be coming in; therefore, it is incumbent upon the City to "set their minds at rest." Councilman/Member Malcolm declared the City has an obligation to' request the District Attorney and Grand Jury to look into Bay Hospital's alleged management and misuse of money and have any of it returned to the people of Chula Vista. Bay Hospital is just a accountable to the citizens of Chula Vista as the Council/Agency is. MS (Malcolm/Campbell) to request Ed Miller (District Attorney) and the Grand Jury to start an investigation into the operations of Bay Hospital Medical Center as early as possible. Minutes - 4 - June 26, 1986 Joint City Council/Redevelopment Agency Meeting Councilman/Member Moore stated he could not support the motion explaining there are many people and firms the Council has assisted in the financing of projects (multi-family, commercial, etc.) throughout the years he cannot see any difference here and therefore cannot advocate having government involved in asking for this Grand Jury investigation. For the record, Councilman/Member Campbell said he is a member of the Board of Directors of Community Hospital of Chula Vista and a member of its Financing Committee. Community Hospital made an offer to take over the Hospital but did not receive the bid; however, he does not have a conflict of interest in this matter (as ruled by the City Attorney) and is speaking as a Councilman/Member and not as a member of the Community Hospital Board. Councilman/Member Campbell referred to the presentation made by the former President of Bay Hospital to the Council several weeks ago in which he indicated the financial troubles of Bay were due in part to : (1) the high census - Councilman/Member Campbell commented there is not a hospital in the world that would not want a high census; (2) Medi-care. Councilman/Member Campbell declared this was "absolutely not true" Community Hospital is treated the same as Bay Medical and the rules covering both MediCal and Medicare are the same. Although Bay Medical's rates are higher, Community Hospital was able to fund over $2 million last year for a cardiac unit. Councilman/Member Campbell stated as representatives of the citizens of Chula Vista, the Council has a right and an obligation to subpoena these people (Bay Hospital) and get the facts. The solution to Bay has not appeared on the scene yet - Scripps Hospital has a 90-day agreement; however, after that time, they can back out of the picture. The Grand Jury may turn down this request but the Council has the obligation to protect the name of Chula Vista. Councilwoman/Member McCandliss noted the former Grand Jury is going out now and a new Jury will be seated in July. If there is evidence of a misuse of funds at the Hospital, those funds should be returned to the Hospital for health care services. Councilwoman/Member McCandliss complimented Councilman/Member {~torig a e first Of the year when the Council/Agency was involved in bringing in an agreement with National Medical Enterprises (NME). At that time, the Council had leverage and stated it would assert that leverage. When the agreement with NME fell through, an effort was made to have Bay accept a one-year management agreement offered by NME at no cost to the hospital - in exchange, Bay Hospital had to give up all ( &As ) Minutes - 5 - June 26, 1986 Joint City Council/Redevelopment Agency Meeting claims to a breach of contract - that was a valid claim and should be litigated. Bay promised to brief two Councilmembers of all the happenings at the hospital. Since then, the line of credit came to light. The Council found out the bond holders have an obligation to bring back a plan. Councilwoman/Member McCandliss added the condition of Bay Medical today is the healthiest it has been in months - without any intervention on the part of the City, it is beginning to resolve its problems. Mayor/Chairman Cox affirmed the motion was appropriate and he supports it. He has received numerous calls and anonymous letters (along with the Councilmembers) and has even talked to some of these people but none were willing to put their names in writing. He is pleased to hear there are people now willing to testify in writing. The City Attorney contacted the Attorney General regarding these unsigned letters and unsubstantiated rumors; however, the process was meaningless if no one signs the allegations. The actions occurring during the past week are addressing the problems of Bay. It at least provides the opportunity for Scripps or some other entity to put the hospital on a firm financial basis. Councilman/Member Malcolm noted that the Council supports Scripps coming in the investigation and comments made today have nothing to do with that Hospital. The motion to call for a Grand Jury investigation carried with Councilman/Member Moore voting "no." 3. ORAL COMMUNICATIONS None. 4. CITY MANAGER/EXECUTIVE DIRECTOR'S REPORT None. 5. MAYOR/CHAIRMAN'S REPORT None. 6. COUNCIL/MEMBER'S COMMENTS None. 7. CLOSED SESSION MSUC (McCandliss/Moore) to recess to Closed Session for purposes of "Meet and Confer." The Council recessed to Closed Session at 5:10 p.m. The City Clerk was excused and the City Manager stated the Session ended at 6:05 p.m. ADJOURNMENT AT 6:05 p.m. to the Council meeting scheduled for Tuesday, July 8, 1986 at 7:00 p.m. and to the Redevelopment Agency meeting of Thursday, July 10, 1986 at 4:00 p.m. ~en~;ie M. Fula ~ ~City Clerk 0829C