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HomeMy WebLinkAboutRDA Packet 2004/02/17 ~f~ ~..- ~- ..;;::: CllY OF CHUIA VISTA TUESDAY, FEBRUARY 17, 2004 COUNCIL CHAMBERS 6:00 P.M. PUBLIC SERVICES BUILDING (immediately following the City Council meeting) JOINT MEETING OF THE REDEVELOPMENT AGENCY I CITY COUNCIL OF THE CITY OF CHULA VISTA CALL TO ORDER ROLL CALL Agency/Council Members Davis, McCann, Rindone, Salas; Chair/Mayor Padilla CONSENT CALENDAR The staff recommendations regarding the following item Is) listed under the Consent Calendar will be enacted by the Agency by one motion without discussion unless an Agency member, a member of the public or City staff requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak Form" available in the lobby and submit it to the Secretary of the Redevelopment Agency or the City Clerk prior to the meeting. Items pulled from the Consent Caiendar will be discussed alter Action items. Items pulled by the public will be the first items of business. 1. APPROVAL OF MINUTES - January 27, 2004 2. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROVING THE SIXTH AMENDMENT TO THE GATEWAY CHULA VISTA PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT (DDA) - This Sixth Amendment to the Gateway Chula Vista Project DDA provides for several changes in the Schedule of Performance in order to better reflect the revised development schedule and to more effectively assist the project during Phase II and Phase III. The action amends the Schedule of Performance by shifting the completion date of Phase II from October 10, 2004 to October 10, 2005, and changes other dates in the Schedule of Performance to conform with this amendment. [Director of Community Development] STAFF RECOMMENDATION: Agency adopt the resolution. 3. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROPRIATING $300,000 FOR THE RDA COMMUNITY HOUSING IMPROVEMENT PROGRAM (CHIP) - The Community Housing Improvement Program (CHIP) offers qualified residents assistance in making health and safety repairs to their homes. Low-interest loans and grants are offered to owners of mobilehomes and single family residences. The CHIP program has ,- ------- 9. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - Pursuant to Government Code Section 54956.8 Property: Assessor Parcel No. 624-060-2700, 624-060- 4500, 624-060-6600, and 644-042-0300 (approx. .1 acres) street frontage located on southern side of Main Street east of 1-805 Negotiating Parties: Laurie Madigan (Redevelopment Agency) Leonard Tessier, Vince Davies, Claude Yacoel, and Doug Fuller (Property Owners) Under Negotiations: Instructions to negotiators 10. CONFERENCE WITH LEGAL COUNSEL REGARDING INITIATION OF LlTiGATION--Pursuant to Government Code Section 54956.9(c) One Case ADJOURNMENT The meeting will adjourn to an adjourned meeting of the Redevelopment Agency on February 24, 2004, at 6:00 p.m., immediately following the City Council meeting in the City Council Chambers. AMERICANS WITH DISABILITIES ACT The City of Chula Vista, in complying with the Americans with Disabilities Act IADA), request individuals who require special accommodates to access, attend, and/or participate in a City meeting, activity, or service request such accommodation at ieast 48 hours in advance for meetings and five days for scheduled services and activities. Please contact the Secretary to the Redevelopment Agency for specific information at 161 g) 691-5047 or Telecommunications Devices for the Deaf (TOOl at 16191585-5647. California Reiay Service is aiso availabie for the hearin9 impaired. Redeveiopment Agency, February 17, 2004 Page 3 - ' - -- MINUTES OF ADJOURNED REGULAR MEETINGS OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA January 27,2004 6:00 p.m. Adjourned Regular Meetings of the City Council and the Redevelopment Agency of the City of Chula Vista were called to order at 6:14 p.m. in the Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Agency/Councilrnembers: Davis, McCann, Rindone, Salas, and Chair/Mayor Padilla ABSENT: Agency/Councilmembers: None ALSO PRESENT: Executive Director/City Manager Rowlands, City Attorney Moore, and City Clerk Bigelow CONSENT CALENDAR 1. APPROVAL OF MINUTES: December 16, 2003 Staff recommendation: Council/Agency approve the minutes. 2. AGENCY RESOLUTION NO. 1855, RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROPRIATING FUNDS FOR THE GATEWAY CHULA VISTA PROJECT SECOND INSTALLMENT PAYMENT (4/5THS VOTE REQUIRED) On June 6, 2000, the Agency approved a disposition and development agreement for development of the Gateway Chula Vista project. As subsequently amended, the agreement provides for participation by the Agency in Phase II of the project through a second installment payment, payable upon completion of certain conditions and issuance of a building permit for the Phase II improvements. It is anticipated that the building permit for Phase II will be issued in the next several months. As a result, an appropriation of $1 ,823,500 is now required. (Director of Community Development) Staff recommendation: Agency adopt the resolution. 3. a. AGENCY RESOLUTION NO. 1856, RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ACCEPTING THE PRELIMINARY PLAN FOR THE AMENDMENT TO THE MERGED CHULA VISTA REDEVELOPMENT PLAN AND DIRECTING STAFF TO TAKE REQUIRED ACTIONS UNDER HEALTH AND SAFETY CODE SECTIONS 33327 AND 33328 This is the next step in the process of amending the Redevelopment Plan for the Merged Chula Vista Redevelopment Project Area. The action to be taken at this joint public meeting of the Agency and Council are: a) consideration of the Preliminary Plan; b) circulation of the proposed Draft Amended and Restated Redevelopment Plan; c) consenting to the Joint Agency/Council public hearing to hear comments and consider the proposed amendment. (Director of Community Development) 1- I 1 Tr ' - CONSENT CALENDAR (Continued) b. AGENCY RESOLUTION NO. 1857, RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING CIRCULATION OF THE DRAFT AMENDED AND RESTATED REDEVELOPMENT PLAN FOR THE MERGED CHULA VISTA REDEVELOPMENT PROJECT TO THE PLANNING COMMISSION c. AGENCY RESOLUTION NO. 1858, RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA CONSENTING TO A JOINT PUBLIC HEARING ON THE PROPOSED 2004 AMENDMENT TO THE MERGED CHULA VISTA REDEVELOPMENT PLAN AND DIRECTING STAFF TO COMPLY WITH ALL LEGAL NOTIFICATION REQUIREMENTS d. RESOLUTION NO. 2004-032, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA CONSENTING TO A JOINT PUBLIC HEARING ON THE PROPOSED 2004 AMENDMENT TO THE MERGED CHULA VISTA REDEVELOPMENT PLAN AND DIRECTING STAFF TO COMPLY WITH ALL LEGAL NOTIFICATION REQUIREMENTS Staff recommendation: Agency adopt Resolutions 3a, b and c; and Council adopt Resolution 3d. ACTION: Chair/Mayor Padilla moved to approve staffs recommendations and offered the Consent Calendar, headings read, texts waived. The motion carried 4-0-1 on Item 1, with Agency/Councilmember Salas abstaining due to her absence at the meeting; 5-0 on Item No.2; and 3-0-2 on Item 3, only. Item 1 carried 4-0-1, with Agency/Councilmember Salas abstaining due to with Agency/Councilmembers Rindone and McCann abstaining due to the proximity of their properties to the location. ORAL COMMUNICATIONS There were none. OTHER BUSINESS 4. DIRECTOR/CITY MANAGER'S REPORTS There were none. 5. CHAIR/MA YOR'S REPORTS There were none. 6. AGENCY /COUNCILMEMBER COMMENTS There were none. Page 2 Council/RDA Minutes 1-2.. 01/27/04 -, - ADJOURNMENT At 6:18 p.m., Chair/Mayor Padilla adjourned the meeting to the Regular Meeting of the Redevelopment Agency on February 3, 2004, at 4:00 p.m., immediately following the City Council meeting; and thence to an Adjourned Regular Meeting of the City Council/Redevelopment Agency on February 3, 2004, at 6:30 p.m. at the Jolm Lippitt Public Works Center, located at 1800 Maxwell Road. ~ ¿L.{x~';{~, Susan Bigelow, CMC, City Clerk !-.J Page 3 Council/RDA Minutes 01/27/04 PAGE 1, ITEM NO.: Ø2.. MEETING DATE: 02/17 /2004 REDEVELOPMENT AGENCY AGENDA STATEMENT ITEM TITLE: RESOLUTION APPROVING THE SIXTH AMENDMENT TO THE GATEWAY CHULA VISTA PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT (DDA) SUBMlnED BY: COMMUNITY DEVELOPMENT DIRECTOR {r.. f., t. "". REVIEWED BY: EXECUTIVE DIRECTOR {¡~LC:( v:V 4/STHS VOTE: YES c=JNO 0 BACKGROUND The first Phase of the Goteway Chula Vista Project has now been reolized, with completion of construction along the Third Avenue frontage. Phase II construction drawings have been submitted for building permits ond construction is forthcoming this Spring, pending approvol of construction finoncing. This Sixth Amendment to the Gateway Chula Vista Project DDA provides for severo I changes in the Schedule of Performance in order to better reflect the revised development schedule and to more effectively assist the Project during Phose II and Phose III. RECOMMENDATION Adopt the Resolution approving the Sixth Amendment to the Gateway Chula Vista Disposition and Development Agreement. BOARDS/COMMISSIONS RECOMMENDATION Not applicable. DISCUSSION The existing Gateway Chula Vista Project DDA Schedule of Performance, as amended by the Fourth Amendment, requires the completion of Phose II construction on or before October 10, 2004 (four years after receipt by the Agency of bond proceeds for the project.) Due to market conditions ond project financing issues, construction of Phase II has only now begun and the developer will be unable to complete the project in the timefrome required by the DDA. As a result, the developer has requested an extension to complete Phase II construction. The revised deadline would be October 10, 2005. Staff concurs with the need for the time extension, based on the success to date of Phase I and on difficulties in financing major office ond mixed-use construction. o?,-I PAGE 2, ITEM NO.: ,;1- MEETING DATE: 02/17 /2004 The Amendment olso corrects the corresponding timefromes in the Schedule of Performance for Phase III and provides for a staff level approval of Schedule of Performance amendments of 12 months or less, rather than the current requirement for formal Agency Board approvals of time extensions. Scheduled Item Original Milestone Existing Amended DDA with Sixth Date DDA Amendment Phase II Conveyance/ June 30, 2003 June 30, 2003 June 30, 2004 Close of Escrow Completion of Phase II October 10,2003 October 10,2004 October 10, 2005 Construction Phase III Conveyance/ December 31, 2006 December 31, 2006 December 31,2007 Close of Escrow Comoletion of Phose III December 31,2007 December31,2007 December 31, 2008 Phase II groundbreaking occurred on January 15th and demolition hos been completed. The significant upcoming milestones include the following: Phase II Parkina Structure Submit for Plan Check Completed Pull Building Permi1s Completed Building Completion July 1, 2004 Phase II Buildina Submit for Plan Check Completed Pull Building Permits Februory 15, 2004 Eligible for Agency Installment Payment No.2 Building Completion June 1, 2005 Eligible for Agency Installment Payment No.3, First Sub-Installment Building Lease-Up to 50 percent Eligible for Agency Installment Payment No.3, Second Sub-Installment Section 501.1 (d) of the DDA ollows the Agency to renegotiate finonciol terms and conditions of the DDA in the event the Developer requests an extension of development milestones in excess of 12 months. However, staff is not recommending a renego1iotion of terms at this time. Staff feels the extension requests were made necessary by the unfovorable realities of the office market, and were not caused by Developer wrongdoing or undue delay. The financial benefits of the project, even if delayed, remain substantial, and payments of Agency assistonce remain tied to project development milestones. Milestone payments do not accrue in1erest for Developer's benefit; therefore, this extension of milestone deadlines does not give the Developer any financial advan1age. The Project itself has been well received in the marketplace, with over 50 percent pre-leasing of Phase II ot this time. With only Phase I completed, there have been continuing issues with ingress and egress from the partially completed parking structure. Completion of the Phase II parking structure should greatly improve this situation. Phase II will also provide additional restourants, o<.'~ - - PAGE 3, ITEM NO.: MEETING DATE: 02/17/2004 including the provision for a very high-end restaurant os required by the DDA. This restaurant will need to be at least 6000 sq. ft. in size, with first class, first quality full service, sit-down dining. In addition, Phase II provides the redevelopment orea with significant numbers of new downtown employees (approximately 400-500) who will be shopping and dining, and in some cases, living in the downtown area. FISCAL IMPACT Bond financing for the Phase I and Phase II installment poyments was issued in 2000. There is no net fiscol impact to the Agency with this action. ATTACHMENTS Sixth Amendment J:\COMMDEY\STAFF.REP\O2.17.04\Galeway Sixth Amendmenl Agenda Slalement.doc 02-3 -, - RESOLUTION NO. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ADOPTING THE SIXTH AMENDMENT TO THE GATEWAY CHULA VISTA PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT (DDA WHEREAS, the Redevelopment Agency and the Developer (Gateway Chula Vista, LLC) are parties to that certain Disposition and Development Agreement dated June 6, 2000 ("DDN'), as amended by that certain First Amendment to Disposition and Development Agreement dated September 25, 2002 ("First Amendment"), as further amended by that certain Second Amendment to Disposition and Deveiopment Agreement dated December 17, 2001, ("Second Amendment"); and as administratively amended by that certain Third Amendment to the Disposition and Development Agreement dated April 16, 2002; by that certain Fourth Amendment to the Disposition and Development Agreement dated Aprii 1, 2003; and by that certain Fifth Amendment to the Disposition and Development Agreement dated November 18, 2003 (the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, and the Fifth Amendment are collectively referred to herein as the "DDA"); and WHEREAS, the DDA relates to redevelopment, development, and operation of a phased First Class, First Quality 344,000 square foot mixed-use commercial/office project with restaurant and retail components and common areas, including a five-tier 1300 space parking structure that spans all Phases of the Project; specificaliy the retail component wiil include up to 81,000 square feet with a restaurant, deli, coffee shop, financial institution, and other retail uses, Phase I will inciude 102,237 square feet in a five story office tower at the easterly portion of the Site, Phase II will include 125,000 square feet in a six story office tower, and Phase III will include 117,000 square feet in a six story office tower at the westerly portion I"Project"); and WHEREAS, timing of construction of the Project's Phase II improvements has been delayed based upon overall market conditions and demand for office and retail space, the lingering effects of the recession on financial lending institutions, and by the unavoidabie impacts of the terrorist attacks in 2001. As a result, the developer is requesting an extension of time for completion of Phases II and III; and WHEREAS, Agency is willing to grant the Developer's request because the project's continued success is considered an important keystone to the overali success of the City's downtown redevelopment effort. NOW, THEREFORE, BE IT RESOLVED the Redevelopment Agency of the City of Chuia Vista does hereby approve the Sixth Amendment to the Gateway Chula Vista Project Disposition and Deveiopment Agreement IDDA) in the form presented, with such minor modifications as may be approved or required by the Agency Attorney. BE IT FURTHER RESOLVED, the Chairman is authorized and directed to execute final forms of the Sixth Amendment, and Agency staff is authorized and directed to take all reasonable actions necessary to implement same. PRESENTED BY APPROVED AS TO FORM BY Laurie Madigan Director of Community Development J : \ co M M D E VIR E so S\g atew ay6th a m end me nt reso . doc 0;- t./ SIXTH AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (Gateway Project Schedule of Performance) This SIXTH AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Sixtlt Amendment") is entered into as of February 17, 2004 ("Effective Date" or "Date of Sixth Amendment") by and between the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body corporate and politic ("Agency") and GA TEW A Y CHULA VISTA ONE, successor in interest to GATEWAY CHULA VISTA, LLC, a California limited liability company ("Developer"). A. The Agency and the Developer are parties to that certain Disposition and Development Agreement dated June 6, 2000 ("DDA"), as amended by that certain First Amendment to Disposition and Development Agreement dated September 25, 2002 ("First Amendment"), as further amended by that certain Second Amendment to Disposition and Development Agreement dated December 17, 2001 ("Second Amendment"); and as administratively amended by that certain Third Amendment to the Disposition and Development Agreement dated April 16, 2002 ("Third Amendment"), by that certain Fourth Amendment to the Disposition and Development Agreement dated April 1, 2003 ("Fourth Amendment"), and by that certain Fifth Amendment to the Disposition and Development Agreement dated November 18, 2003 ("Fifth Amendment.") (The First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, and the Fifth Amendment are collectively referred to herein as the "DDA.") B. The DDA relates to the development and operation of a phased First Class, First Quality 344,000 square foot mixed-use commercial/office project with restaurant and retail components and common areas, including a five-tier 1300 space parking structure that spans all Phases of the Project; specifically the retail component will include up to 81,000 square feet with a restaurant, deli, coffee shop, financial institution, and other retail uses, Phase I will include 102,237 square feet in a five story office tower at the easterly portion of the Site, Phase II will include 125,000 square feet in a six story office tower, and Phase III will include 117,000 square feet in a six story office tower at the westerly portion ("Project"). C. Capitalized terms used in this Sixth Amendment are defined and set forth in the DDA, unless separately defined in this Sixth Amendment, inclusive of the Attachments thereto and hereto. D. Timing of construction of the Project's Phase II Improvements has been delayed as a result of unfavorable overall market conditions, the effects of the recession on financial lending institutions, and by the unavoidable impacts of the terrorist attacks in 2001. As a result, pursuant to Section 501.l(c) of the DDA, Developer has requested an n extension of time to complete the Phase II Improvements. ~-S" 1 -. - E. Agency is willing to adjust Developer's schedule and subject to the terms and conditions set forth herein. F. Pursuant to Section 1315 of the DDA, this Sixtlt Amendment requires approval by the Agency Board NOW, THEREFORE, in consideration of the foregoing recitals, which are a substantive part of this Sixth Amendment, the covenants and consideration contained and exchanged herein, Agency and Developer agrees as follows: 1. 802.2.3 Failure to Commence and Complete Phase II Improvements per Revised Schedule. DDA Section 802.2.3 is hereby revised to extend the Phase II Required Completion date from October 10,2004 until October 10, 2005. 2. Schedule of Performance for Phase II and Phase III Conveyance and Close of Escrow. DDA Attachment No.3, Schedule of Performance, milestone No. 25 is hereby amended and restated as follows: Closing of Escrow for Phase II and Phase II Conveyance: The Agency shall cause the conveyance and assignment/reassignment ofthe applicable Phase Parcels to the Developer no later than (1) for Phase II Conveyance, June 30, 2004, and (2) for Phase III Conveyance, December 31,2007. 3. Schedule of Performance for Phase II Completion. DDA Attachment No.3, Schedule of Performance, milestone No. 42 is hereby amended and restated as follows: Completion of Construction of Phase II Improvements. Developer shall have completed 100% of the Phase II Improvements of the Project by on or before October 10, 2005. 4. Schedule of Performance for Phase III Completion. DDA Attachment No.3, Schedule of Performance, milestone No. 43 is hereby amended and restated as follows: Completion of Construction of Phase III Improvements. Developer shall have completed 100% of the Phase II Improvements of the Project by on or before December 31,2008. All other Schedule of Performance milestones shall remain in full force and effect. 5. Extensions of Time for Commencement of Construction: DDA Sections 501.1(b) and (c) and 701.1(b) and (c) are hereby amended to proyide for 0<-(. 2 1 IT requests by Developer for additional extensions of time to perform of up to 12 months in the aggregate, be subject to the approval of the Agency Executive Director in his or her sole discretion; Developer requests for an additional extension (or, in the aggregate, extensions) in excess of 12 months shall be subject to the approval of the Agency Board in its sole discretion.. 6. Other Provisions. Except as expressly provided herein, all other terms and conditions of the DDA shall remain in full force and effect. [Signature Block for Sixth Amendment begins on Next Page) ~-1 3 Signature Page to Sixth Amendment to Disposition and Development Agreement IN WITNESS WHEREOF, the Redevelopment Agency of the City ofChula Vista, as Agency, and Gateway Chula Vista One LLC, as Developer, have signed this Sixth Amendment to Disposition and Development Agreement as of the Date of Sixth Amendment. REDEVELOPMENT AGENCY GATEWAY CHULA VISTA ONE OF THE CITY OF CHULA VISTA, a California limited liability company a public body corporate and politic By: Coast Pacific Properties, LLC Its: Co-Managing Member By: Stephen C. Padilla, Chairman. James V. Pieri, Chairman Manager By: Chula Vista Asset Management, LLC Its: Co-Managing Member Greg Scott, Manager ATTEST Approved as to form Agency Secretary Approved as to form Counsel to the Developer Agency Attorney J;\A TTORNEY\GlenlGateway Sixth Amendement A ~-V 4 PAGE 1, ITEM NO.: ~ MEETING DATE: 02/17/04 REDEVELOPMENT AGENCY AGENDA STATEMENT ITEM TITLE: RESOLUTION APPROPRIATING $300,000 FOR THE RDA COMMUNITY HOUSING IMPROVEMENT PROGRAM (CHIP) SUBMlnED BY: COMMUNITY DEVELOPMENT DIRECTOR f.(. þ,L/J REVIEWED BY: EXECUTIVE DIRECTORIo1;Jo"" 4/5THS VOTE: YES 0 NO D BACKGROUND The Community Housing Improvement Progrom (CHIP) offers qualified residents assistance in making health and safety repoirs to their homes. Low-interest loans and grants are offered to owners of mobilehomes and single family residences. The CHIP program has been in existence for many years and continues to offer assistance to those in need. Each year funds are appropriated to the RDA CHIP program from either the HOME Investment Partnership (HOME) or Low and Moderate Income Housing (Low-Mod) funds. Once appropriated, the funds are transferred to the RDA Housing Program account. RECOMMENDATION That the redevelopment agency opprove the resolution appropriating $300,000 for the RDA Community Housing Improvement Program (CHIP). BOARDS/COMMISSIONS RECOMMENDATION Not opplicoble. DISCUSSION Finance has notified staff thot funds need to be appropriated to the RDA CHIP program. During the fiscal year 2003-05 budge1 process staff did not budget funds from either HOME or Low-Mod for the RDA CHIP program given the fact that sufficient funds were already available in 1he RDA Housing Program account. Regardless of the funding source, an oppropriation needs to be made to the RDA CHIP program to offset the occrued expenditures. ~- I -, - PAGE 2, ITEM NO.: 3 MEETING DATE: 02/17/04 FISCAL IMPACT Funds in the amount of $300,000 will be appropriated from the available fund balance in the RDA Housing Program occount for the RDA CHIP program. AnACHMENTS None. ...3-~ y , ~ RESOLUTION NO. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROPRIATING $300,000 FOR THE RDA COMMUNITY HOUSING IMPROVEMENT PROGRAM (CHIP) WHEREAS, the Community Housing Improvement Program (CHIP) offers qualified residents assistance in making health and safety repairs to homes; and WHEREAS, in order to continue operations for the RDA CHIP program, funds in the amount of $300,000 need to be appropriated to the RDA CHIP program from the RDA Housing program account. NOW, THEREFORE, BE IT RESOLVED the Redevelopment Agency of the City of Chula Vista does hereby appropriate $300,000 for the RDA Community Housing Improvement Program (CHIP) from the RDA Housing program account. PRESENTED BY APPROVED AS TO FORM BY , Laurie Madigan Director of Community Development ..3-.3 - , PAGE 1, ITEM NO.: 4 MEETING DATE: 02/17/04 REDEVELOPMENT AGENCY AGENDA STATEMENT ITEM TITLE: RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROPRIATING $30,000 FROM THE AVAILABLE BALANCE OF THE MERGED PROJECT AREA TO FUND A CONSULTING AGREEMENT WITH KEYSER-MARSTON ASSOCIATES FOR FINANCIAL ANALYSIS AND ASSISTANCE WITH NEGOTIATIONS WITH AUTO PARK DEVELOPERS SUBMITTED BY: COMMUNITY DEVELO';.'r".ENT DIRECTOR { t' Jo,- U' REVIEWED BY: EXECUTIVE DIRECTOliPp(l9' 4/5THS VOTE: YES 0 NO D BACKGROUND On July 22, 2003 the Cily Council and Redevelopment Agency Board approved on Owner Participation Agreement with Knowlton Really Advisors for development of the Auto Park North project. The project anticipates the development of three new auto dealerships fronting on Main Street and auxiliary uses on the interior of the project. Two automobile dealership franchisees have expressed interest in locating within the project and both have expressed an interest in negotiating development agreements with the Cily. This resolution would appropriate funds to utilize outside expertise to assist Cily staff with financial analysis and, if necessary, negotiations with the three dealerships ultimately desired in the project. RECOMMENDATION It is recommended that the Redevelopment Agency adopt the resolution appropriating $30,000 from the available balance of the merged project area for the purpose of funding a contract with Keyser Mortson Associates for assistonce in finonciol analysis and, if necessary, development negotiations for the Chula Vista Auto Park. BOARDSICOMMISSIONS RECOMMENDATION Not applicable. DISCUSSION Two automobile fronchisees, McCune Motors and Sun rood Enterprises, have approached Cily staff requesting to negotiate owner participation agreements for locations within the Chula Vista 4-1 PAGE 2, ITEM NO.: 4- MEETING DATE: 02/17/04 Auto Park. McCune has been awarded a new franchise for a Dodge, Chrysler, Jeep dealership and Sunroad has been awarded a new franchise for a Toyota dealership. During the past several months, both fronchisees have requested to negotiate on a variety of matters about their individual projects, the organization of the Auto Park as a whale and about possible financial assistance. Keyser Marstan Principal Paul Marra is a noted expert in the field of automobile dealership transactions. Mr. Marra has previously, at staff's request, provided a variety of valuable dota and insights for anolyzing both operational and financial considerations for dealerships. Because of his expertise, staff requested Mr. Marra to provide an estimate of the likely charges to completely analyze on auto dealership development. Keyser Marston provided the attached proposal, which estimates the range of fees to onalyze an individual dealership would be between $8,500 - $10,000. Staff is requesting an appropriotion of $30,000, which should be adequate to accomplish analysis and advice regarding the three dealerships needed to fill the Auto Park North project. The request does not suggest that dealerships can automatically expect a staff recommendation to the Agency to provide a financial incentive. However, the existing agreement with the master developer does require that requests for assistance be given considerotion. Staff's gaol is to complete the analysis at less than the requested amount of oppropriation. The dollar amount of this request is to try to ensure that staff will not need to return for another appropriation for purposes of dealership onalysis for Auto Park North. Because the amount of the contract is below $50,000, staff will finalize and aword the contract at an odministrative level. FISCAL IMPACT This appropriation request is for $30,000 from the available bolance of the merged project area for the purpose of on-call services. AnACHMENTS Proposal from Keyser Marston Associa1es j,\COMMDEY\STAFF.REP\02.17 .04\oulo park opprop.doc 4-"" ~' ~ RESOLUTION NO. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROPRIATING $30,000 FROM THE AVAILABLE BALANCE OF THE MERGED PROJECT AREA TO FUND A CONSULTING AGREEMENT WITH KEYSER-MARSTON ASSOCIATES FOR FINANCIAL ANALYSIS AND ASSISTANCE WITH NEGOTIATIONS WITH AUTO PARK DEVELOPERS WHEREAS, the Five Year Implementation Plan (2000 - 2004) for the Otay Valley Road Redevelopment Project Area calls for the expansion of the Chula Vista Auto Park to eliminate blight, create jobs and provide reyenue for Agency and City operations; and WHEREAS, on July 22, 2003, the Redevelopment Agency of the City of Chula Vista adopted an Owner Participation Agreement for the development of the Auto Park North Specific Plan; and WHEREAS, the Owner Participation Agreement for Auto Park North calls for the timely recruitment and development of three new automobile dealerships fronting on Main Street in the Otay Valley Road Redevelopment Project Area; and WHEREAS, two of the three required dealerships have been identified and desire to negotiate development agreements with the Agency; and; WHEREAS, Keyser Marston is uniquely qualified to provide on call assistance to the Agency in analyzing statements and requests made by automobile dealerships; and NOW, THEREFORE, BE IT RESOLVED the Redeyelopment Agency of the City of Chula Vista does hereby appropriate $30,000 from the available balance of the merged project area for the purpose of funding a staff approved contract with Keyser Marston Associates for assistance with financial analysis and, if necessary, negotiations with Auto Park developers. PRESENTED BY APPROVED AS TO FORM BY Laurie Madigan Director of Community Development J:\COMMDEVIRESOS\O2-17.04\RDA. auto park approp.doc 4-3 KEYSER MARSTON ASSOCIATES IN C. ADVISORS IN' 1660 HOTEL CIRCLE NORTH. SUITE 716 SAH DlEoo. CALIFORNIA 92108 REAL ESTATE PHONEO 6191718.9'00 REDEVELO'M,"T FAX' 6191718.9'08 AFFORDABLE HOU"NO WWW.KEYSERMARSTON.COM . ECONOMIC DEVELO'MENT SAN DIEGO G",Jd M. T,imbl, Paul C. Mma Los ANG£LE' Calvin E. HoBi,. II Kathl..n H. H"d JamesA. Rab, , Paul C, Andat,on ~¡r' G"go<y D. Sno.Hoo MEMORANDUM - SAN FRANC/SCO A. Jmy K,ym Timothy C. K,By T9: Pat Beard, Senior Community Development Specialist Kat' E"I, Funk D,bbi, M. Km City of Chula Vista Rob", J. Wotmm From: KEYSER MARSTON ASSOCIATES, INC. Date: January 23, 2004 Subject: Proposal for Consulting Services - Auto Dealership Feasibility Per your request, Keyser Marston Associates, Inc. (KMA) has prepared an estimated budget for feasibility assessments of potential auto dealership developments in the City of Chula Vista. Outlined below is the general scope of services that KMA would undertake relateßtó each potential dealership. f5~;. Scope of Services The proposed scope of services include the following tasks: . Initiation Meetino. KMA will participate in an initiation meeting to discuss approach, schedule, and collect background information. . Data Reouest. KMA will review the developer's pro forma and issue a data request itemizing further required information. . Land Comoarables. KMA will collect information on comparable land sales for automobile dealerships in San Diego County and Southern California. This information will be reviewed in comparison to the probable acquisition cost of the proposed development site. 04310mm CELEBRATING 30 Y,?:Rw¡¡'° OUR CUEN1S 11216.006.004 -, - To: Pat Beard, Senior Community Development Specialist January 23,2004 Subject: Proposal for Consulting Services Page 2 . Estimate of Financinq GaD. KMA will model the developer's pro forma itemizing development costs (direct, indirect, and financing), projected achievable sales volume, and estimated occupancy costs. Based on our experience with other auto dealership developments, KMA will then formulate an independent estimate of probable financing gap, if any, for auto dealership use on the proposed site. . Sales Tax Projections. KMA will review and comment on' the dealer's projection of annual sales volume and sales tax to the City. KMA will then compare this projection with City sales tax data for existing dealers in Chula Vista, as well as with other data in our files gained from work on other auto dealerships. . FindinqslRecommendations. KMA will prepare a comparison of the estimated financing gap with anticipated sales tax revenues. Budget Estimate KMA will perform these services on a time-and-materials basis subject to the attached schedule of standard hourly billing rates. We recommend that the City establish a budget of $8,500 to $10,000 per analysis. KMA will not exceed this limit without prior authorization from the City. This budget estimate assumes: a maximum of two (2) meetings with City staff, and a maximum of one (1) draft and one (1) final memorandum reports. Note that KMA assumes no responsibility for issues of a legal, environmental, engineering, or site planning nature. In addition, our budget estimate specifically excludes: negotiations with potential auto dealers; meetings with public officials; and review of draft legal agreements. We look forward to working with you on potential auto dealerships sites. Please call if you have any questions or comments. Thank you. attachment CELEBRATING 3°4 OF SERYlCE TO OUR CUENTS -~ O4310mm 11216.006.004 KEYSER MARSTON ASSOCIATES, INC. HOURLY FEE SCHEDULE 2004 A. JERRY KEYSER' $235.00 MANAGING PRINCIPALS' $230.00 PRINCIPALS' $220.00 MANAGERS' $175.00 SENIOR ASSOCIATES $160.00 ASSOCIATES $140.00 SENIOR ANALYSTS $125.00 ANALYSTS $105.00 TECHNICAL STAFF $ 82.50 ADMINISTRATIVE STAFF $ 67.50 Directly related job expenses not included in the above rates are: auto mileage, air fares, hotels and motels, meals, car rentals, taxies, telephone calls, delivery, electronic data pro- cessing, graphics and printing. Directly related job expenses will be billed at 110% of cost. Monthly billings for staff time and expenses incurred during the period will be payable within thirty (30) days of invoice date. A charge of 1 % per month will be added to all past due accounts. . Rates for individuals in these categories will be increased by 50% for time spent in court testimony. CELEBRATING 30 YEARS OF SERVICE TO OUR CUENTS O4310mm 4-Cc 11216.006.004 - - .-