HomeMy WebLinkAboutRDA Packet 1996/08/20
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Tuesday, August 20, 1996 C is p.\\C":'cßs £;u"-' ì Council Chambers
6:00 p,m. \I' IJplic ~SIGN"-\) Public Services Building
(immediately following the City Council meeting) ? . c¡
Ol\.í\:'
Joint Meeting of the Redevelopment Agencv/Citv Council
of the Citv of Chula Vista
CALL TO ORDER
1. ROLL CALL: Agency Members Alevy -' Moot -' Padilla -'
Rindone -' and Chair Horton -
IT HAS BEEN REQUESTED THAT THE FOLLOWING ITEM BE CONSIDERED AT A TIME CERTAIN
OF 7:00 P.M.
2. REPORT REPORT ON THE REPAYMENT OF ONE PARK APARTMENT LOAN
MADE FROM THE LOW AND MODERATE INCOME HOUSING
FUND--On 10/17/85 the Agency approved an $850,000 deferred loan made
to One Park Limited which covered cost for the underground parking lot for
the 94-unit residential rental project in Town Center I. Over the past year,
staff has been negotiating with the Developer for the repayment of the loan
which became due in May 1996 and is now in default. The Developer has
presented proposals for alternative payment plans which were not acceptable
to staff. The Developer has requested to appeal to the Agency. Staff
recommends the Agency support the terms outlined in Exhibit E of the staff
report. (Community Development Director)
3. APPROVAL OF MINUTES: June 25, 1996 (Adjourned regular joint meeting);
June 25, 1996 (Special joint meeting)
4. WRITTEN COMMUNICATIONS: None
CONSENT CALENDAR
(NO ITEMS)
The staff recommendations regarding the following items listed under the Consent Calendar will be enacted by
the Agency by one motion without discussion unless an Agency, 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. (Complete the green form to speak in favor of the staff recommendation; complete the pink
form to speak in opposition to the staff recommendation.) Items pulled from the Consent Calendar will be
discussed after Action Items. Items pulled by the public will be the first items of business.
* * END OF CONSENT CALENDAR * *
Agenda -2- August 20, 1996
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
The following items have been advertised and/or posted as public hearings as required by law. If you wish to
speak to any item, please fill out the "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. (Complete the green form to speak
infavorofthe staffrecommendation; complete thepinkformto speak in opposition to the staffrecommendation.)
Comments are limited to five minutes per individual.
5. PUBLIC HEARING: JOINT PUBLIC HEARING OF THE CITY COUNCIL AND
REDEVELOPMENT AGENCY TO CONSIDER AN AMENDMENT TO
THE DISPOSITION AND DEVELOPMENT AGREEMENT WITH
BROADWAY VILLAGE BUSINESS HOMES, L.P., DATED AUGUST
2, 1995 TO PROVIDE FOR AN AGENCY LOAN FOR PERMIT AND
PROCESSING FEES AND SHARING OF SOIL REMEDIATION COSTS-
-The Disposition and Development Agreement was approved by the
Agency/Council on 8/2/95 for redevelopment of the former Fuller Ford site.
Due to protracted processing time and added expense. the Agency is requested
to defer payment of permit fees. The Agency conceptually approved a loan
for this purpose and authorized staff to negotiate specific terms. Staff
recommends the Agency/ Council hold the public hearing and approve the
resolntions. f4/5ths Vote Reauiredl Continued from the meetine of Aueust
6. 1996 (Community Development Director)
AGENCY
RESOLUTION 1512 and
COUNCIL
RESOLUTION 18421 [1] APPROVING THE FIRST AMENDMENT TO THE DISPOSITION
AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AND
BROADWAY VILLAGE BUSINESS HOMES, LP., AUTHORIZING A
LOAN TO COVER THE COSTS OF DEVELOPMENT PERMITS AND
PROCESSING FOR PHASE I OF THE BROADWAY BUSINESS
HOMES PROJECT AND EXTENDING THE TERMS FOR SHARING IN
SOIL REMEDIATION COSTS TO COMPLETE REMEDIATION; [2]
APPROPRIATING FUNDS FROM THE OTAY VALLEY ROAD
PROJECT AREA LAND SALE PROCEEDS TO BE LOANED TO THE
SOUTHWEST PROJECT AREA AT THE COUNCIL APPROVED
INTEREST RATE FOR INTRA-CITY LOANS; [3] APPROPRIATING
FUNDS FROM SOUTHWEST PROJECT AREA FUND TO BROADWAY
VILLAGE BUSINESS HOMES, LP. AND TO FINANCE THE
AGENCY'S PORTION OF ADDITIONAL SOIL REMEDIATION
COSTS; (4) AUTHORIZING STAFF TO CONTRACT FOR SERVICES
TO COMPLETE SOIL REMEDIATION
6. AGENCY/COUNCIL
PUBLIC HEARING TO CONSIDER A SPECIAL LAND USE PERMIT TO ALLOW THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780
BAY BOULEVARD LOCATED WITHIN THE BAYFRONT
REDEVELOPMENT PROJECT AREA FOR A PERIOD OF ONE YEAR
SUBJECT TO CONDITIONS AND TO CONSIDER A COASTAL
DEVELOPMENT PERMIT FOR THE ESTABLISHMENT OF AN
AUTOMOBILE AUCTIONHOUSE AT 780 BAY BOULEVARD
LOCATED WITHIN THE CHULA VISTA COASTAL ZONE SUBJECT
Agenda -3- August 20, 1996
TO CONDITIONS--BAHA International proposes to establish an automobile
auctionhouse in an existing industrial building at 780 Bay Boulevard.
Activities would include two auctions per week and smog checks, minor tune-
ups, and car washing related to the auctioning of vehicles. The project is
exempt from CEQA but requires a Redevelopment Agency Land Use Permit
and a Coastal Development Permit. Staff recommends adopting the resolutions
subject to conditions. (Director of Community Development)
AGENCY
RESOLUTION 1513 ISSUING A SPECIAL LAND USE PERMIT TO ALLOW THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780
BAY BOULEVARD FOR A PERIOD OF ONE YEAR SUBJECT TO
CONDITIONS
COUNCIL
RESOLUTION 18422 ISSUING COASTAL DEVELOPMENT PERMIT NO. 71 FOR THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780
BAY BOULEVARD FOR A ONE YEAR PERIOD SUBJECT TO
CONDITIONS
ORAL COMMUNICATIONS
This is an opportunity for the general public to address the Redevelopment Agency on any subject matter within
the Agency's jurisdiction that is not an item on this agenda. (State law, however, generally prohibits the
Redevelopment Agency from taking action on any issues not included on the posted agenda.) If you wish to
address the Council on such a subject, please complete the yellow "Request to Speak Under Oral Communications
Form" available in the lobby and submit it to the Secretary to the Redevelopment Agency or City Clerk prior to
the meeting. Those who wish to speak, please give your name and address for record purposes and follow up
action. Your time is limited to three minutes per speaker.
ITEMS PULLED FROM THE CONSENT CALENDAR
This is the time the Redevelopment Agency will discuss items which have been removed from the Consent
Calendar. Agenda items pulled at the request of the public will be considered prior to those pulled by Agency
Members. Public comments are limited to five minutes per individual.
OTHER BUSINESS
7. DIRECTOR'S/CITY MANAGER'S REPORT<S)
8. CHAIR'S/MAYOR'S REPORT(S)
9. AGENCY/COUNCIL MEMBER COMMENTS
- .
Agenda -4- August 20, 1996
ADJOURNMENT
The meeting will adjourn to (a closed session and thence to) the Regular Redevelopment Agency Meeting on
September 17, 1996 at 6:00p.m., immediately following the City Council meeting, in the City Council Chambers.
. . . . .
CLOSED SESSION
Unless Agency Counsel, the Executive Director. or the Redevelopment Agency states otherwise at this time, the
Agency will discuss and deliberate on the following item(s) of business which are permitted by law to be the subject
of a closed session discussion, and which the Agency is advised should be discussed in closed session to best protect
the interests of the City. The Agency is required by law to return to open session, issue any reports ofÉ!lf!1 action
taken in closed session, and the votes taken. However, due to the typical length of time taken up by closed sessions,
the videotaping will be terminated at this point in order to save costs so that the Agency's return from closed
session, reports of É!lf!1 action taken, and adjournment will not be videotaped. Nevertheless, the report of final
action taken will be recorded in the minutes which will be available in the Office of the Secretary to the
Redevelopment Agency and the City Clerk's Office.
10. CONFERENCE WITH LEGAL COUNSEL REGARDING: Contemplated initiation of litigation by the
Redevelopment Agency pursuant to Government Code Section 54956.9(C)
. Redevelopment Agency versus One Park Limited, et. al.
11. CONFERENCE WITH LEGAL COUNSEL--ANTICIPATED LITIGATION: Contemplated initiation
of litigation by the Redevelopment Agency pursuant to Government Code Section 54956.9(c)
. Chula Vista Auto Park developers - South Bay Chevrolet and Fuller Ford/Honda/Kia v.
City/Redevelopment Agency based on administrative claims filed on November 15, 1995, and
subsequent requests for Preference Proceedings under the Disposition and Development Agreement.
12. REPORT OF ACTIONCS) TAKEN IN CLOSED SESSION
*.....
COMPLIANCE WIm mE AMERICANS WITH DISABILITIES ACT
The City of Chula Vista, in complying with the Americans With Disabilities Act (ADA), request individuals who
require special accommodations to access, attend, and/or participate in a City meeting, activity. or service request
such accommodation at least forty-eight 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 619,691.5047 or
Teiecommunications Devices for the Deaf (TDD) at 619.585,5647. California Relay Service is aiso available for
the hearing impaired.
1M ,'HOME'COM MDEV\AGENDASIO~20,96,AGDI
- .
MINUTES OF A JOINT MEETING OF THE CITY COUNCIL/
REDEVELOPMENT AGENCY
Tuesday, August 20, 1996 CoUDcil Chambers
8:00 p.m. Public Services Building
CALL TO ORDER
1. ROLL CALL:
PRESENT: CoUDcil/Agency Members Alevy, Moot, Padilla, Rindone, and Mayor/Chair
Horton
ALSO PRESENT: John D. Goss, City Manager/Director; Anv Moore, Acting City/Agency
Attorney; and Beverly A. Authelet, City Clerk.
IT HAS BEEN REQUESTED THAT THE FOLLOWING ITEM BE CONSIDERED AT A TIME CERTAIN
OF 7:00 P.M.
2. REPORT REPORT ON THE REPAYMENT OF ONE PARK APARTMENT LOAN MADE
FROM THE LOW AND MODERATE INCOME HOUSING FUND-On 10/17/85 the Agency approved an
$850,000 deferred loan made to One Park Limited which covered cost for the underground parking lot for the 94-
unit residential rental project in Town Center I. Over the past year, staff has been negotiating with the Developer
for the repayment of the loan which became due in May 1996 and is now in default. The Developer has presented
proposals for alternative payment plans which were not acceptable to staff. The Developer has requested to appeal
to the Agency. Staff recommends the Agency support the terms outlined in Exhibit E of the staff report.
(Community Development Director)
Chris Salomone, Director of Community Development, presented the staff report. He reported on two positive
events that had occurred since the agenda packet had been sent out. One of those was that the Developer had
provided a coUDter offer that was substantially better than the one that was in the report. In addition, the Developer
had given staff a Cashier's check in the amount of $125,000 which was taken in the spirit of their commitment to
a resolution of the problem and not accepted on any condition of any particular deal. He asked Council to allow
the applicant to speak, then adjourn to Closed Session so staff, with their consultant, Steve Delaney, could briefly
review the new counter proposal, present staffs response, and hear Council's wishes on the issue.
CoUDcil/ Agency member Rindone asked what the basis was for this to be beard in Closed Session.
Anv Moore, Acting City/Agency Attorney, responded that it would be to discuss the strengths and weaknesses of
pursuing possible litigation; in this case, foreclosure proceedings.
8 Cheryl Cox, 647 Windsor Circle, Chula Vista, representing the applicant, Zogob Enterprises, spoke in favor
of the staff recommendation. She presented an overhead, stating that at present they were talking about an $850,000
loan. The $125,000 check was an attempt to present the intense desire of the applicant to resolve the outstanding
indebtedness. A new note would be created whereby the City would receive a payment per quarter on the principal,
with interest on the outstanding principal, and a stipulation that within three years either One Park Apartments was
refinanced, sold, or the amount of the outstanding indebtedness was paid. There was accrued interest on the
$850,000 principal balance, and the applicant was asking that it be established at $400,000 so the total amount of
the outstanding indebtedness was approximately $1.3 million. They were proposing that the terms on the $400,000
be the same as the terms on the initial note of $600,000, that included the principal paydown and quarterly interest
payments; again, all due within three years of signing the agreement. A benefit to that would be the City would
receive instant funds of $250,000, $125,000 of which the City had just received. The applicant would like to begin
paying down the principal. The property owner would have three years, which is sufficient time, to pursue
refinancing the property, or if need be, sell the property in order to payoff the outstanding indebtedness which
would be approximately $700,000. Furthermore, the property owner pledged to distribute no further funds to its
investors until the outstanding amount was paid.
Minutes
August 20, 1996
Page 2
. Richard Zogob, 344 "F" Street, Suite 101, Chula VistA, representing One Park Apartments, spoke in favor of
staff recommendation.
. Luis Maizel. 2111 Via LadetA. La Jolla, representing One Park Apartments, spoke in favor of staff
recommendation.
Council/Agency member Rindone stated that while the project was good and had benefitted the City in many ways,
Council was also responsible for ensuring that the fiscal responsiveness and the interest of all tax payers were
adequately addressed. He stated that in the new counter proposal there was a request to add to the principal balance
$400,000 in interest, but as reported to Council/Agency, interest on the principal balance as of 5/1/96 was
$452,000. He requested an explanation of the per annum payback on the interest. He stated that on page 2-3 of
the staff report it stAted "The above described proposals were found unacceptable by staff because they ask the
Agency to be very lenient and accepting of the fact that the Developer withdrew $600,000 out of the project and
distributed to the Developer's partnership as profits before paying off debt" and asked for a response to that.
Mr. Salomone responded that the $450,000 was as of May 1995 and that the actual current estimate of the accrued
interest was $521,000.
Mr. Maizel responded that the money withdrawn was actually just under $600,000 which was about 40 percent of
their investment as equity over a ten year period. It included not only a distribution for partners, but also for work
done as general partners in maintenance of the property. So the amount that was withdrawn was just over three
percent of the equity invested on a per annum basis.
Mr. Salomone said staff's counter proposal was very similar to the proposal already shown to Council/Agency in
that One Park Apartments would pay a $125,000 principal paydown. They had already submitted a check in the
amount of $125,000 and would pay the additional $125,000, totAling $250,000, upon signing a definitive agreement
with the City. They will then execute a note for $600,000, secured against the property with a six percent interest
rate and a quarterly paydown of $12,500, all due in three years. StAff felt that the amount of the accrued interest
should be exact and estimated that to be at present between $521,000 and $529,000. A note for the accrued interest
should be secured against the property with the same terms and conditions, including a principal paydown, as
outlined in the note for $600,000. Proof was to be provided of all adjustments of the interest rate on the First Trust
Deed for the life of the loan within five business days. There was an additional interest called a "kicker" and that
was for the City to be able to share in the upside. Staff would like that additional interest to be written as a new
loan secured against the property, accruing interest at six percent, all due and payable within three years. In the
event there had been no default on the other loans, the kicker loan would be forgiven at the time the other Agency
loans were paid in full. The owners would not make any distributions of any kind to themselves or to any related
parties until the Agency loans were paid in full. He was certain they had that in their proposal so it was not new
and there should be a cross default between all three loans. In his opinion, the project was a good project, it had
been managed well and had been fiscally successful.
Mayor/Cbair Horton said that when the agreement was first initiated in 1985, the report reflected that the two
bedroom units would be renting for $458. She asked what the current rent was and what the square footAge was.
Mr. Maizel responded that there was a formula to calculate affordable housing rents and they were charging $125
to $150 below that. The rents go from the low $6oo's to the high $6oo's. They have two different two bedroom
layouts. One was co-mingles, which were two master bedrooms with a living area in the center and the other was
more traditional with a larger master bedroom and a smaller second bedroom, all are around 900 to 950 square feet
and all have two bathrooms.
Minutes
August 20, 1996
Page 3
*****
Mayor/Chair Horton stated the Council/Agency would meet in closed session to discuss contemplated initiation of
litigation pursuant to Government Code Section 54956.9. Council/Agency adjourned to closed session at 8:55 p.m.
and reconvened at 8:58 p.m.
Acting City/Agency Attorney Moore reported that the Council/Agency had decided to direct staff to pursue other
methods other than litigation at present and to come back within 90 days.
The Joint Meeting of the City Council/Redevelopment Agency recessed at 8:58 p.m. and reconvened at 11:46 p.m
*****
3. APPROVAL OF MINUTES: June 25, 1996 (Adjourned Regular Joint Meeting); June 25, 1996
(Special Joint Meeting)
MSC (Alevy/Horton) to approve the minutes of June 25, 1996 (Adjourned Regular Joint Meeting) and June
25, 1996 (Special Joint Meeting) as presented, approved 3-0-2 with Moot and Rindone absent.
4. WRITTEN COMMUNICATIONS: None.
CONSENT CALENDAR - None.
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
5. PUBLIC HEARING: JOINT PUBLIC HEARING OF THE CITY COUNCIL AND
REDEVELOPMENT AGENCY TO CONSIDER AN AMENDMENT TO THE DISPOSITION AND
DEVELOPMENT AGREEMENT WITH BROADWAY VILLAGE BUSINESS HOMES, LP., DATED
AUGUST 2, 1995 TO PROVIDE FOR AN AGENCY LOAN FOR PERMIT AND PROCESSING FEES AND
SHARING OF SOIL REMEDIATION COSTS - The Disposition and Development Agreement was approved by
the Agency/Council on 8/2/95 for redevelopment of the former Fuller Ford site. Due to protracted processing time
and added expense, the Agency is requested to defer payment of permit fees. The Agency conceptually approved
a loan for tills purpose and authorized staff to negotiate specific terms. Staff recommends the Agency/ Council hold
the public hearing and approve the resolutions. f4/5ths Vote Reouired' Continued from the meetinl! of Aul!lL,t
6. 1996 (Community Development Director)
AGENCY RESOLUTION 1512 and
COUNCIL RESOLUTION 18421 [1] APPROVING THE FIRST AMENDMENT TO THE
DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA AND BROADWAY VILLAGE BUSINESS HOMES, L.P.,
AUTHORIZING A LOAN TO COVER THE COSTS OF DEVELOPMENT PERMITS AND PROCESSING
FOR PHASE I OF THE BROADWAY BUSINESS HOMES PROJECT AND EXTENDING THE TERMS
FOR SHARING IN SOIL REMEDIATION COSTS TO COMPLETE REMEDIATION; [2]
APPROPRIATING FUNDS FROM THE OTAY VALLEY ROAD PROJECT AREA LAND SALE
PROCEEDS TO BE LOANED TO THE SOUTHWEST PROJECT AREA AT THE COUNCIL APPROVED
INTEREST RATE FOR INTRA-CITY LOANS; [3] APPROPRIATING FUNDS FROM SOUTHWEST
PROJECT AREA FUND TO BROADWAY VILLAGE BUSINESS HOMES, LP. AND TO FINANCE THE
AGENCY'S PORTION OF ADDITIONAL SOIL REMEDIATION COSTS; (4) AUTHORIZING STAFF TO
CONTRACT FOR SERVICES TO COMPLETE SOIL REMEDIATION
Mr. Salomone presented the staff report.
- .
Minutes
August 20, 1996
Page 4
This being the time and place as advertised, the public hearing was declared open.
8 Josef Citron, 765 Bangor Street, San Diego, requested that the item be handled this evening with the four
Council/Agency members present approving the resolution because the item required a 4/5tb's vote. They were
ready to break ground, and the groundbreaking had been scheduled for the following Tuesday; the construction
lender was ready to fund; and they had an all cash buyer for the first unit who would be putting in a flower shop,
subject to the project being started.
Council/Agency member Rindone stated that when the project was initially presented before the Council/Agency,
there had been a four to one vote in support. He respected his colleagues any time they disagreed with a project
because that was why there were five members on a council, to allow the opportunity for each to give their thoughts
in tbe evaluation of projects and proposals and sometimes they agreed and sometimes they disagreed. He
encouraged Council/Agency member Alevy to state how he felt on the project, hut asked that he join the majority
of Council/Agency in ma1cing the project possible.
Mayor/Chair Horton concurred and stated that Council/Agency member Moot's absence from this portion of the
meeting was due to the fact that he had to go to Los Angeles on business. Had she realized sooner, she would have
taken the item out of order, while Council/Agency memher Moot was still present, thus ensuring a 4/5th's vote.
Council/Agency member Alevy stated that he had problems with the business aspects of the project from the
beginning and still did. He had discussed these with the Citrons, Mr. Salomone, other members of staff, and
Council/Agency. He would vote in favor of the project because it was the will of the Council/Agency, therefore,
the will of the City. He understood that every project needed to be looked at separately and stood behind his
support of progressive things taking place in the City. He had some problems with the business arrangements and
thought that every time they looked at the project, they saw a dwindling net figure. He was bothered by the
increased cost of the units and hoped they would sell. He was also bothered by the company that did the soil testing
and felt that someone should have checked the soil where the hydraulic lifts had been. not just where the cars had
been parked. If someone had made a mistake, everyone would pay for it. He felt there should be some remediation
from the people that put the hazardous material in the ground in the first place.
Mr. Salomone responded that the City was bound under the Development Agreement to pursue the perpetrator, a
meeting was scheduled with him that week and they had asked for their insurances. Staff felt it was a clear cut case
and would pursue that. The repayment of the loan would be due and payable in January 1998, whether or not the
units solØ by then. The City would not take less than a second position lien on the property to secure the loan and
reserved the right to withhold building permits for Phase II of the project in the event that there was a default on
the loan.
Glen Googins, Deputy City Attorney, stated that a couple of the items Mr. Salomone had pointed out were not
actually included in the agreement. There were some clarifications. He proposed minor amendments to Section
4.2.6 and 4.2.7 of the agreement which would be included in staff's recommendation. Added on to the end of 4.2.6
would be the following phrase: "only to a monetary lien arising from prior acquisition indebtedness in the
approximate of $200,000 and non-monetary liens and encumbrances reasonably approved by the Agency", then add
the following phrase on the end of Section 4.2.7: "(b) Agency shall have the right to withhold building permits
and/or certificates of occupancy for business home units on lots 7 through 18 of Parcell." That was only in the
event of a default of the loan.
There being no further'public testimony, the public hearing was declared closed.
AGENCY RESOLUTION 1512 AND COUNCIL RESOLUTION 18421, AS AMENDED BY STAFF,
OFFERED BY COUNCIL/AGENCY MEMBER RINDONE, reading of the text was waived, heading read,
and approved 4-0-1 with Moot ahsent.
Minutes
August 20, 1996
Page 5
6. PUBLIC HEARING TO CONSIDER A SPECIAL LAND USE PERMIT TO ALLOW THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780 BAY BOULEVARD LOCATED
WITHIN THE BA YFRONT REDEVELOPMENT PROJECT AREA FOR A PERIOD OF ONE YEAR
SUBJECT TO CONDITIONS AND TO CONSIDER A COASTAL DEVELOPMENT PERMIT FOR THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780 BAY BOULEVARD LOCATED
WITHIN THE CHULA VISTA COASTAL ZONE SUBJECT TO CONDITIONS--BAHA International proposes
to establish an automobile auctionhouse in an existing industrial building at 780 Bay Boulevard. Activities would
include two auctions per week and smog checks, minor tune-ups, and car washing related to the auctioning of
vehicles. The project is exempt from CEQA but requires a Redevelopment Agency Land Use Permit and a Coastal
Development Permit. Staff recommends adopting the resolutions subject to conditions. (Director of Community
Development)
AGENCY RESOLUTION 1513 ISSUING A SPECIAL LAND USE PERMIT TO ALLOW THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780 BAY BOULEV ARD FOR A PERIOD
OF ONE YEAR SUBJECT TO CONDITIONS
COUNCIL RESOLUTION 18422 ISSUING COASTAL DEVELOPMENT PERMIT NO. 71
FOR THE ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780 BAY BOULEVARD FOR
A ONE YEAR PERIOD SUBJECT TO CONDITIONS
Mr. Salomone recommended that Condition Number 32 on the Special Use Permit and Coastal Development Permit
be changed to read: "tbat in the event of a legitimate legal challenge, the applicant will abandon the use
immediately."
Council! Agency member Rindone asked if there had been a review by the Police Department.
Mr. Salomone responded that the Police Department bad reviewed it, and they had the right to go on the premises
to inspect the vehicles at any time.
AGENCY RESOLUTION 1513 AND COUNCIL RESOLUTION 18422 OFFERED BY COUNCIL/AGENCY
MEMBER RINDONE, reading of the text was waived, heading read.
This being the time and place as advertised, the public hearing was declared open. There being no public testimony,
the public hearing was declared closed.
VOTE ON RESOLUTIONS: approved 4-0-1 with Moot absent.
ORAL COMMUNICATIONS - None.
ITEMS PULLED FROM THE CONSENT CALENDAR - None.
OTHER BUSINESS
7. CITY MANAGER'SIDIRECTOR'S REPORT(S) - None.
8. MA YOR'S/CHAIR'S REPORTCS) - None.
Minutes
August 20, 1996
Page 6
9. COUNCIL/AGENCY MEMBER COMMENTS - None.
*.*..
Council/Agency adjourned to closed session to discuss conference with legal counsel, contemplated initiation of
litigation by the Redevelopment Agency pursuant to Government Code Section 54956.9(c), Chula Vista Auto Park
developers - South Bay Chevrolet and Fuller FordlHonda/Kia vs. the CitylRedevelopment Agency based on
administrative claims filed on 11/15/95, and subsequent requests for Preference Proceedings under the Disposition
and Development Agreement at 12:10 a.m.
**..*
AD JO URNMENT
Meeting adjourned at 12:10 a.m.
CLOSED SESSION
10. CONFERENCE WITH LEGAL COUNSEL REGARDING: Contemplated initiation of litigation by
the Redevelopment Agency pursuant to Government Code Section 54956.9(C)
. Redevelopment Agency versus One Park Limited, et. al.
11. CONFERENCE WITH LEGAL COUNSEL--ANTICIPA TED LITIGATION: Contemplated initiation
of litigation by the Redevelopment Agency pursuant to Government Code Section 54956.9(c)
. Chula Vista Auto Park developers - South Bay Chevrolet and Fuller FordlHondalKia v.
City/Redevelopment Agency based on administrative claims filed on November 15, 1995, and
subsequent requests for Preference Proceedings under the Disposition and Development
Agreement.
12. REPORT OF ACTIONrs) TAKEN IN CLOSED SESSION
Respectfully submitted,
BEVERLY A. AUTIIELET, CMC/AAE. City Clerk
by C~d ZÎ~ '
Carla J. Griffin, Acting Déj)âíýCity Clerk
- .
THIS ITEM IS TIME CERTAIN AT 7;00 P.M.
REDEVELOPMENT AGENCY AGENDA STATEMENT
Item c2
Meeting Date: 08/20/96
ITEM TITLE: Report Repayment of One Park Apartment Loan
made from the Low and Moderate Income Housing Fund
SUBMITTED BY; Community Development Director ffi~ t.S
REVIEWED BY; Executive Director Ú
.t',J
(4/5ths Vote;Yes_Nol)
Agency Referral No.-
BACKGROUND: On October 17, 1985 the Agency approved a $850,000 ten year deferred
loan for the development of a 94 unit residential rental project and parking structure located at
350 Third Avenue in the Town Center] Focus Area. The Developer. One Park Limited,
comprised of Maize! Enterprises and Zogob Development Company, requested Agency
financial assistance primarily to offset the costs of a grade level parking structure necessary to
achieve a 94-housing unit count, a cost which would have made the project infeasible. The
Agency's support for this development was based on the One Park project's housing benefit
to moderate income households and its potential to enhance the downtown section of the City.
(See Exhibit A)
Over the past year. staff has been negotiating with One Park Limited for the repayment of the
loan which became due in May 1996 and is now in default. With the failure of the real estate
market to appreciate over the past several years. One Park Apartments were not sold before
the ten year loan term expired, as the Developer had expected. Consequently, the Developer
pleas financial hardship as the reason for not repaying the Agency loan. On Julv 17. 1996.
staff notified the Developer of the Agencv's intent to pursue all remedies to resolve this issue
UP to and including foreclosure (see Exhibit B).
The Developer has presented a number of loan repayment proposals requesting some relief
from their obligation which have been unacceptable to staff. Staff is at an impasse with the
Developer. The Developer opposes staffs current position and is requesting an opportunity to
present their proposal to the Agency. This item has been placed for closed session discussion
if the Agency Board feels it is necessary.
RECOMMENDATION: That the Agency Board direct staff to negotiate in accordance
with the terms described in Exhibit E.
,2 - (
Page 2, Item d--
Meeting Date: 08/20/96
DISCUSSION:
This report will discuss the following topics: 1) a description of the original Joan tenDs,
2) One Park Limited's proposals and 3) staff's proposal.
Original Loan Terms
The purpose of the loan was to offset the cost of a grade-level parking structure
necessary to achieve a 94-unit count, a cost which would have made the project
infeasible.
The original loan tenDS were as follows:
. Loan was deferred and due on sale or in ten years
. Interest would float with the primary financing
. Agency would participate in the equity gained at the time of sale by
collecting "additional interest," also known as the "Kicker". The additiona]
interest would equate a percentage of the sale price starting at 1 % in
Years 1-3 and to increase up to 4.5% in Year 10.
The Developer never sold the project, and the Agency Loan (with principal, interest and
additional interest) became due in May 1996 and is now in default. The following is a
breakdown of the amount now due;
Principal $850,000 (secured by second deed of trust)
Interest $521,320 (estimated)
Additional Interest $290,000
Total $1,661,320
One Park Limited's Proposals
The Developer claims financial hardship as the reason for not repaying the Agency Joan
and has presented a number of loan repayment proposals requesting some reJief from
their obligation. The Developer first approached staff with the concept of converting the
project to condominiums and paying the Agency loan with titJe to the units. Staff was
not enthusiastic about the proposal, but agreed to consider it. Subsequently the
Developer abandoned the condominium plan. The Developer has presented other
proposals for consideration which have included the restructuring of the Joan as a
partnership, the extension of the note for an additional 5 to 10 years and the conversion
of the loan to an equity interest in the One Park Apartments.
<;¿-~
Page 3, Item~
Meeting Date: 08/20/96
A letter dated May 10, 1996 from One Park Limited, presented two proposals which
requested to renegotiate the terms of repayment (Exhibit C): The two proposals are
outlined below:
1) The Agency extend the existing note for an additional 10 year at an annual
interest rate of 5% with quarterly payments on the interest and yearly
payments made of $25,000 on the principal. Under this scenario, One Park
Limited would pay $221,692 to the Agency, which represents the Agency's pro
rata share of the $600,000 total distributions made to the One Park
Partnership and One Park Limited would set aside adequate reserves for the
payment of real estate taxes, property insurance, maintenance reserves, and
capital improvements;
or
2) The Agency agree to convert their $850,000 loan to an equity interest in the
One Park Apartments and a cash distribution of $221,692 wou]d be made to
the Agency, which represents the Agency's pro rata share of the $600,000 total
distributions made to the One Park Partnership. This would mean that One
Park Limited would own 73.02% of the property and the Agency would own
26.98% and all future distributions would be made respective to this ratio,
however, the Agency would have a priority distribution if the property is sold
or refinanced.
The above described proposals were found unacceptable by staff because they ask the
Agency to be very lenient and accepting of the fact that the Developer withdrew
$600,000 out of the project and distributed to the Developer's partnership as profits
before paying off debt. Although this money was not technically "ours" given the Agency
is only a lender and has no authority to restrict the use of their funds, it indicates that
revenues are exceeding expenses. Furthermore, the Developer knew for years this
required loan repayment was approaching and did not set aside a reserve. Retroactively
they are asking the Agency to assume the position of "joint venture partner" by sharing
the loss, when that was never the intent of the agency loan.
On July 10, 1996, in response to staff's rejection of the above proposa]s, the Deve]oper
submitted the following proposal for Agency's consideration (Exhibit D).
1) A principal pay down of $250,000 of the $850,000 present principal balance
will be paid to the Agency within 30 days after the agreement is signed.
2) For the balance of the principal owed, a Note for $600,000 in favor of the
Agency will be created with the following terms; A principal pay down of
$15,000 per quarter, plus, quarterly interest only payments on the unpaid
principal balance of the note, payable at 6% per annum, all due, 5 years from
the date the Agreement is signed or, the earlier date of either the One Park
Apartments being refinanced or sold.
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Page 4, Item~
Meeting Date: 08/20/96
3) Accrued interest on the $850,000 principal balance as of 5/1/96 is $452,000.
Agency is asked to write down the accrued interest to $250,000. A note in
favor of the Agency for $250,000 will be created with the following terms: A
principal pay down of $6,250.00 per quarter, plus, quarterly interest only
payments on the unpaid principal balance of the note payable at 6% per annum,
all due, 5 years from the date the agreement is signed or, the earlier date of
either the One Park Apartments being refinanced or sold.
This counter proposal is not acceptable since it still requires that the Agency extend the loan
over an unreasonable period of 5 years. Also, the borrowers request for forgiveness of accrued
interest is not warranted. In addition, the accrued interest owed estimated by the Developer at
$452,000 is grossly understated. Staff estimates that this figure is over $521,000.
Staff's ProDosal
On June 21, 1996, (see Exhibit E), in order to explore possible solutions to this issue, staff
presented a proposal to the Developer which maintains the basic terms of the original loan
while still providing reasonable relief to One Park Limited. This proposal was offered by
staff to the Developer so that staff could advise City Council regarding possible options to
resolve this issue.
Staffs tentative proposal is as follows;
I) $250,000 of the outstanding principal balance be paid to the Agency within
thirty (30) days.
2) The balance of the principal ($600,000) be paid within twelve (12) months of
the $250,000 payment. Quarterly interest payments of six percent (6%) be
made on the outstanding principal balance until the principal is paid in full.
3) The accrued interest on the current principal balance be secured by a new note,
payable quarterly at six percent (6%) interest, fully amortized over five (5)
years.
4) The "Additional Interest," being 4.5% of the sales price or appraised value of
the property, estimated at $290,000 would not be assessed under this scenario if
an agreement can be reached within a reasonable timeframe.
5) The Agency to institute foreclosure proceedings if One Park Limited does not
pay the $250,000 within one month.
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Page 5, Item~
Meeting Date: 08/20/96
Attached is a copy of the letter sent to the Developer informing him that the loan is in
default and that the Agency reserves the right to pursue all remedies which includes
foreclosure.
Staff's proposal recognizes the Developer's need for further assistance but maintains the
original intent of the terms of the loan. The Developer has benefitted from the Agency
loan and staff feels they should meet their obligations. Staff is also aware that as part of
the State regulations for the usage of Low - Moderate Income Housing Funds, the
Agency is expected to consistently recycle the funds to create new affordabJe housing
opportunities. There are a number of affordable housing projects under consideration
for funding and the longer the One Park loan is not paid the higher the ]ost opportunity
cost becomes. With these funds, other projects could benefit the City and its residents.
Thus staff feels it is important not to continue to tie up these funds in this project for an
extensive amount of time.
Staff has retained Mr. Stephen Delaney of Topmark, Inc. to review the Deve]oper's
proposals/financial documents and advise the agency. His most recent analysis, based on
a review of current financial information, affirms that the Developer's economic situation
is stab]e and improving. This, coupled with the fact that funds have been regularly taken
out of the project and distributed to the Developer's partnership as profits, leads staff to
seriously consider foreclosure as a viable option. The foreclosure process is time
consuming and costly, but it is an important step necessary to elevate negotiations to a
more serious level in order to bring this matter to a close.
FISCAL IMPACT:
The Developer's proposal implies that a joint venture approach be considered by the
Agency and for the Agency to continue to tie up its funds over an unreasonable time
period in order to resolve their financial dilemma.
Staff's tentative proposal requires that $250,000 of the outstanding principal be paid to
the Agency within 30 days and it provides an additional twelve month period to pay the
ba]ance of the principal ($600,00), given the $250,000 is paid up front. Quarterly
interest payments of six percent (6%) would be required on the outstanding principa]
balance until the principal is paid in full. The accrued interest on the current principa]
balance would be secured by a new note, payable quarterly at six percent (6%) interest,
fully amortized over five (5) years. This proposal also does not assess the "additional
interest" estimated at $290,000 if a timely agreement is reached. Given the gain of
equity expected did not materialize since the apartments were never so]d, the Agency
acknowledges there is not enough money to get the "additional interest" out of the
project.
(M,I,..IOS,ZO-9610NEPARK.113)
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¡ REDEVELOPMENT AGENCY AGENDA STATEMENT EXHIBIT A
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Meeting Date 10/17/85 .'
TIllE: Resolution 638 'Certifying EIR-79-3 and approving design,
¡ Cooperative Agreement regarding Agency financial
participation, amendment to the Inducement Resolution, and
ame1lded schedule of perfonnance for One Par~ residential
, development of Focus Area Parcel 8
"
ITIED 8Y: Convnunity Development Di~ctor~
:
Executive Director¡ (4/5ths Vote: Yes_No~)
¡ " '
Ag~ncy has been considering approval of a 92-unit residential rental
roject! on Focus Area Parcel 8 by a limited partnership, One Park. Limited,
rised of Maizel Enterprises and Zogob Development Company. The Design
Yiew'~Co!tl11ittee has evaluated the proposed site plan and elevations and
U~79-3 was previously prepared which discusses the environmental impacts of
IlUltiple family project at. this location. The project's finances have been
aluated by the Agency's Housing Consultant, and a Cooperative Agreement has
n pf:pared relative to Agency financial participation. The developer has
ues d an. increase in the amount of the Inducement Resolution and the unit
ntfor bond financing by the Agency. Finally, an amended schedule of
,rlormance has been prepared.
COItIENDATION: That the Agency adopt the resolution:
Certifying that ElR-79-3 has been prepared in accordance with C¡::QA and ..
that the Agency has reviewed the infonnation contained in the EIR (see
attachment #1). '
<
!. APproving project design subject to conditions of the Design Review
" COImIittee listed in Exhibit A of the resolution.
3. Þfproving Cooperative Agreement regarding Agency financial participation
and associated documents including promissory note and authorizing
, Chainnan to execute said Agreement.
" ¡
4.'. APproving amendment to the inducement resolution to indicate a
,: . not-tó-exceed bond amount of $4.6 mil lion and a uni t count of 94 uni ts. .
" IIpproving amended schedule of perfonnance (Exhibit ICE" of the Resolution).
8OARlÍS/COMMISSIONS RECOtflENDATION: At the March 7 Town Centre Project Area \
Cœmittee meeting, members approved the concept of a 92-unit .residential
building on Lot 8 of the Town Centre Focus Area. On October 3, 1985, the Town
Centre 'Design Review Comittee recOl1l1lended that the Agency approve the design
proposed for the residential development of Lot 8 in the Town Centre Focus
rea subject to the conditions listed in Exhibit "A" of the attached
solution. . --
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Page 2. Item 3
Meeting Date 10/17/85
si n
¡
-he project site consists of 2.4 acres of relatively level, vacant land
oc¡te<f south of the Town Centre Parking Structure. Access is available from.
I'd Avenue ",.via the entrance to the. c0111l1ercia1 parking' structure and from
, ourth Avenue by way of 'Center Street.
: he applicant proposes to construct a 94-unit. 3 and 4 story residential
.~ilding located over an at-grade parking structur~. The J-shaped building is
!designed with a variety of roof elements including a series of gable, shed,
~oo hip roofs with occasional dormers used to provide additional breaks in the
'roof line. Basically, the building will be stucco finished with elements of
~orizonta1 wood siding and colonial-style windows to provide additional
.\exture and interest. Red brick veneer will be used at the entry ways to the
~nderground parking. The utilization of different roof styles, building
mterfals, and window designs will break up the mass of the building to give
,\he illusion of a multi-height building.
Jhe proposal includes 165 parking spaces, 8 spaces over the required amount.
.Jfft'-seven standard size and 35 compact size spaces are located under the
þul1ding. Sixty-six standard size and 7 compact spaces are located on-site at
'prade. Overall, the percentage of compact spaces is about 25 percent. To
'accOOI1IOdate the at-grade parking, the applicant proposes to ~ncroach upon the
:~outhern portion of the Town Centre Parking Structure parcel. Approximately
'6,000 sq. ft. of the City parcel will be paved by the developer. The' ..'
,&eveloper has submitted a letter explaining the need for the encroachment
Jattachment il2). From a design standpoint the loss of landscaping along the
'$outherly line of the parking structure is acceptable to the Design Review
:CO1IIIittee. If the developer is allowed to use a portion of City property, it
,is recommended that the developer be required to coordinate the landscaping
.for both parcels, redesign the existing irrigation system along the south
.~arking structure landscape strip to tie in with the Lot 8 irrigation system.
:and maintain the new and existing landscaping on the parking structure lot
àdjacent to Lot 8. .
J .
In accordance with the disposition and development agreement for the
development of Lot B, the Agency is responsible for the design of the
landscape promenade located to the west of the subject site. The developer
!tin be responsible for the installation of the landscaping. .
'In past discussions, the Redevelopment Agency has approved in concept Agency
'financial participation in the One Park project in the approximate amount of
$850,000. The housing consultant, Mr. Dan Grady, has evaluated the financial
feasibl1i1;y of the project and has reported to the ~ency' on the
~propriateness of Agency financial participation. A form for - such
participation was structured by staff. 14r. Grady, and the developer and
'reported to the Agency. A Cooperative Agreement has been drafted to set the
conditions for the financial participation being considered by the Agency. .f
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Page 3~ Item 3 .
Meeting Date 10/17/85
.
?BelOW is a summary listed of the salient points of the proposed cooperative
,agreement:
,Î. loan Amount: $850.000
;2. Loan Purpose: To offset the cost of a grade-level -parking structure
necessa~:.to achieve Ii 94-unit count, a cost which would make the project.
infeasible.
3. Loan Type: Principal and interest deferred to a single payment.
4. Tenn: Ten years. or the date upon which the project is sold. whichever is
i~ sooner.
t >'
Base Interest: Accruing over the tenD of the lòan at the same rate
as ttre project's first mortgage.
Additional Interest:. A percentage of the gross sales price on the
following schedule.
Year Percentage
1 to 3 U;
4 1.5%
5 2% ..
6 2.5%
7 3%
8 3.5%
9 4%
10 4.5%
At the 10th year. if the project has not sold. the added interest
would be 4.5% of the appraised fair market value.
Attachment A ill ustrates the cash return to the Agency from the
interest schedule based on estimated project value.
¡
;- Funding: Fundi ng woul d be concurrent wi th and dependent upon fundi ng . of
I., the project construction loan.
r'
7. Fund Control: loan funds woul d be di spersed through the standard fund
control process of the construction lender with the schedule subject to
prior approval of the Ci~ Manager.
"8. Pennitted Development: loan funds are to be' used to construct a 92 space
:grade level parking structure in support of a 94;-unit residential rental
project.
~
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, . Page 4. Item 3'
< Meeting Date 10/17/85
9. Dévelopment Phasing: Development construction shall begin on March 20.
1986, and shall be completed by February 1. 1987. Failure to adhere to
ttie schedule and notification. thereof by the Agency shall be an event of
défault. ,
'0. Subordination: The second trust deed held by the Agency would be
sùbordina~e to~the first trust deed held by the construction and permanent
fi.nanci ng 1 enaér. The fi rst trust deed may not exceed the amount of the
mortgage revenue bonds issued for the porject or $4.600.000.
11. Housing Benefit: During the tern of the loan, no. unit rental rate could
exceed affordability by moderate-income households as defined by .State
law. Moderate-income households would mean households at ;or below 120% of
the area median income adjusted for family size. Affordability would mean
a 'monthly rent not exceeding 25~ of the monthly household income for such
a ¡household. Such standards would be adjusted as published median income
figures change. The current two-bedroom moderate-income household income
is; $33,000 annually. and the affordable rent is $687.50 per month.
If the project is financed with tax-exempt mortgage revenue bonds. 201; of
the units would be reserved for occupancy by low-income househol ds.
~. hoûsehold~ at or below 80~ of the area median income. The current
t, twP-bedroom. low-income househol d income is $22.000 per year and the
r' affordable rent is $458 per month.
¡inducement Resolution Amendment ' ~
. ! .. .
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'In his report of March 30. 1985. the Agency Housing Consultant recolll11ended
that t~e project be induced for tax-exempt bond financing for $4.1 mill ion.
TM developer had asked for $4.4 million. The Agency subsequently induced the
project for $4.1 million. The developer has now requested by letter that the,
inducement amount be increased to $4.6 million in the face of higher costs
than originally estimated and a higher unit count by two units. Given the
higher unit count and the uncertain nature of pro fonna estimates. the
increase in the inducement amount can be supported. The actual bond amount
will be detennined by the scrutiny of the real estate deal by the bond issue
lender ~
khedule of Perfomance
I'
lie Sc~edu1e has been amended to accOl111\odate the time required by the building
~rmit;process and processing backlogs of FNMA for bond financing approval.
' .
'ISCAl, IMPACT: With the approval of the Cooperative Agreement and
ubseqtient funding of the loan. $850.000 would be appropriated and expended
rom tlie Agency's Low- and Moderate";Income Housing Fund which has a current
alance' of approximately $2.3 million. Attachment A indicates the amount of
gencyrecapture or profit based on repayment of the loan at various years and
ased on estimates of project val ue. -
Inee the developer has not proposed a work of fine art for the site, an
¡-lieu fee amounting to 11; of the project valuation will be required at the /
me the building pennit is issued. - 0 ..
:TION: Resolution adopted as amended. c:;;:J ( -' r/
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/ A IT A~~.jM£NT 2
"....:;68 DEVELOPMENT COMPANY, INC.
31" Fo<Ao-ti-o -....... . <::huIo. Vie,s. Ca<furnIa 92010 4:>6-6333
ï . ,
'. '.'
. October 9. 1ge5 '"'
, RECEIVED
IfeJDbers of the Redevelopment Agency ..
City of chula Vista,. OCT i 0 1985
276 Fourth Avenue,"
Otula Vista, CA 92010 .comm!J~ity Develo~ment Dept.
SUbject: Request to Encroach Cklto City Property
Dear Members:' , -,
I' "'"
i As the developer of the proposed Ckle Park Apartments, I would'respectfully "',"
;,request the City of (hula Vista's permission to encroach into the South & West . ';,~'~~!f1~:<
¡landsc¡aped perimeters of the downtown parking garage.' ::?~;kt.
At present, the subject strip of 1and serves as a utilitv easement and
landsdape buffer to Lot Ie, in the Townsite Focus Area, the ~rcel on which
the apartments will be built. Although this property is currently being
maintained and irrigated by Centre City Associates Limited-Commercial, the
oootinuity of this mainteitanœ could be effected by the future sale of the .. 'J~~~j;::
cxxnmet:cial properties the partnership owns. I
'" ,
I would propose that' all of the 1andscaped perimeter on the South and '<-:;>'~"
lest perimeter of the publië'J.;arking garage that abutts Lot #e be the " '>
aintenance and irrigation responsibility of the ownership of Lot fie and that
uch responsibility be a covenant, and ran with, the ownership of Lot. Ie. ..
This covenant would allow the ownership of Parcel Ie to partially' encroach
,to the subject property in order to give the proposed units better parking
lrculation and heavier landscaping. Also, a wall would be built within the
tcroachment to separate the public garage from the apartments. Consistent
ith an approved landscape and irrigation plan for this area on both sides
: the, wall, <me Park would be able to better maintain the asthetics of its
>rtherly and Easterly boundaries.
I: trust that this proposal would meet with your concurrence.
i
i Respectfully,
I ~G~~n...'
1
Zogob Development O:>mpany, Inc.
General Partner
CENTRE CITY ASSOCIATES LII.::rTED
::ef l'
i!
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CITY OF CHULA VISTA
DISCLOSURE STATEMENT
¡CANT'S STATEMENT OF DISCLOSURE OF CERTAIN OWNERSHIP INTERESTS ON ALL APPLICATIONS
01 I/ILLREQUIRE DISCRETIONARY ACTION ON THE PART OF THE CITY COUNCIL, PLANNING
SSION AND ALL OTHER OFFICIAL BODIES.
fullowing information must be disclosed:
listtthe names ot'aU persons having a financial interest ,in the application.
.' Zogi>b Development Company, Inc. (Gen. Partner)
. l1ai~el Investments (Gen. Partner!
. CEn£re City Associates Limited (Ltd. Partner)
I'
List 'the names of a11 persons having any ownership interest in the property involved.
Same as above
!
If any person identified pursuant to (1) above is a corporation or partnership, list
~e names of all individuals owning more than 10% of the shares in the corporation
~ owning any partnership interest in the partnership.
Richard G. Zogob/Luis Maizel/David Maizel Eduardo dela Parra. Eduardo Rueda
G.L.Cory, Inc. and George Cory J~mf~~~~"Vi¡;f~~,;td;.~S;;fY f~;:~~n~~r~~ît
CCA~ and William & Marjory Gore, G. Corral, William Pate, Ronald End~rman, Don Lincoln,
W~"~~ø Pø~~ ~h'r'øc ~~rñør Tøo Hønrikson,
' Sara: Bressler/Ezroj, Ernesto dela Parra, Paul Engstrand)
If any person identified pursuant to (1) above is a non-profit organization or a
trust; 1 ist the names of any person serving as director of the non"'profit
organ~zation or as "trustee or beneficiary or trustor of the trust.
"'III
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Have ýou had more than $250 worth of business transacted with any member of City
surf; Boards, Conmissions, Conmittees and Council within the past twelve' months?
Yes- N°....1L If yes, please indicate person(s)
on is defined as: "Any individual, firm, copartnership, joint venture, association,
iT club, fraternal organization, corporation, estate, trust, receiver, syndicate,
and any other county, city and county, city, municipality, district or other
:ical subdivision, or any other group or combinat. acting as a unit."
: Attach additional pages as necessary.)
, Slgnatur~ app lC nt
'alP i ~-A~ G, ~GoB f.
' d -( d- Pnnt or type name of app I1cant
. ..-.,0
~f~ EXHIBIT B
~~--:
01Y OF
,GfU[A VISfA
COMMUNITY OEVElOPMEN;r °7~ARTMENT
July 17, 1996
'.
One Park Partnership
clo Mr, Richard G. ~gob
Managing Partner .'
344 F Street, Suite 101
Chula Vista, CA ~1910
Dear Mr. Zogob,
The purpose of this letter is to inform you that the One Park Apartment loan made to One
Park Limited by the City of ChuIa Vista Redevelopment Agency is now in default. The
Agency reserves the right to pursue any and all remedies available under the governing loan
documents or otherwise available at law or in equity, including foreclosure.
If you have any questions regarding this matter, please call me' at (619) 691-5047, or Glen
Googins, Deputy City Attorney at (619) 691-5037. '.
Sincerely, -
tk~
Chris Salomone
Community Development Director
cc: Sid Morris, Assistant City Manager
Glen Googin, Deputy City Attorney
Juan P. Arroyo, Housing Coordinator
CS:vl
(VL:B:I WPWIN\FRCLSL TR)
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EXHIBIT C
ENTERPRISES
COMMUNITY DEVElOPMENT j
DEPARTMENT
May 20, 1996 I MAY 281911) I
David Gustafson
Assistant Director
Community Development
City of Chula Vista
276 Fourth Avenue
Chula vista CA 91910
Re: One Park Apartments
Dear Dave,
As per our meeting last week, I would like to propose two scenarios
regarding the $850,000 note owed to the City of Chula Vista by the
Maizel's and I.
SCENARIO I
1) City of chula Vista extends the existing note with the
One Park partnership $850,000 for an 10 additional years.
2) Terms include interest at 5% per annum wi th quarterly
payments of interest only quarterly plus a principal
paydown of $25,000, due every 12 months.
3) One Park partnership agree to set aside and maintain from
the apartments monthly net income, adequate reserves
mutually agreed upon wi th the City of Chula Vista, for'
the payment of real estate taxes, property insurance,
maintenance reserves, and capital improvement reserves.
4) Upon the execution of this agreement by both partners,
the One Park partnership will distribute to the City, the
sum of $221,692 which is based on the following
assumptions:
a) One Park partnership has a total capital
investment in the One Park Apartments of
$2,300,000.
~ -I.:;)
344 F Street - Suite 101 Chula Vista - CA. 91910 619. 426 - 6333 Fax619-420.1313
- .
.
b) City of Chula Vista has a total capital
investment in the One Park Apartments of
$850,000.
c) Total capital in One Park Apartments is
$3,150,000.
d) City of Chul a Vista' s percentage of the capi tal
investment in the One Park Apartments is:
$850,000 = 26.98%
$3,150,000
e) One Park partnership has received total
distributions from the ápartments net income of
$600,000 to date.
f) For the City of Chula Vista to "catch up" to
the One Park partnership's receipt of $600,000
to date, the following ratio is used;
$2,300,000 = $600,000 therefore X equals $221,692
$850,000 X
which represents the City's prorata share of
the $600,000 total distributions made to the
One Park Partnership.
NOTE: It is important to note that the One Park Partnership's
receipt of $600,000 in distributions to date, represent a 2.6% ~
return on its capital investment of $2,300,000.
SCENARIO 2
1) The City of Chula Vista will agree to convert their
$850,000 loan to an equity interest in the One Park
Apartments. City's $850,000 equity represents a 26.98%
ownership in the apartments. One Park Partnership
presently has $2,300,000 of capital investment in the
apartments which represents 73.02% of the total capital
invested.
2) A cash distribution of $221,692 is made to the City of
Chula Vista by the One Park Partnership which represents
26.98% of the $600,000 previously distributed to the One
Park Partnership.
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3) One Park Apartments are now owned 73.02% and 26.98% City
of Chula Vista.
4) All future distributions to be made in the above ratios.
5) City of Chula Vista will have a priori ty distribution
based on their $850,000 equity of first net monies
received due to a sale or refinance of the apartments.
Dave, please revise the above scenarios and give us your comments.
YvJ:1~~
Richard G. Zogob
Managing Partner
One Park Partnership
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ç;2 -(~
jU ""0 j. ~ I IN! LUiJUH t1'lHHPH 1 SES FAX NO, 619 420 ]313+ P. 2
Jill EXH 18 IT
])
ENTERPRISES
July 10, 1996
chris Salomone
Community Development Director
CITY OF CHULh VISTð
COMMUNITY DEVELOPMENT DEPARTMENT
276 Fourth Avenue
Ch<.lla Vista CA 91910
Dear Chris,
Our partnership has received your letter dated June 21, 1996.
After careful consideration of the Agency's proposal and an
analysis of the available cash reserves and net cash flows from the
apartments, the principals of the One Park Apartments would like to
submit the following respond as follows:
1) A principal pay down of $250,000 of the $850,000 present
principal balance will be paid to the city of Chula vista
Redevelopment Agency within 30 days after the agreement is
signed.
2) For the balance of the principal owed, a Note for $600,000 in
favor of the Agency will be created with the following terms:
A principal pay down of $15,000 per quarter, PLUS, quarterly
interest only payments on the unpaid principal balance of the
note, payable at 6% per annum, ALL DUE, 5 years from the date
this Agreement is signed or, the earlier date of either the
One Park Apartments being refinanced or sold.
3) Accrued interest on the $850,000 principa I balance as of
5/1/96 is $452,000. Agency will agree to write down the
accrued interest to $250,000. A note in favor of the Agency
for $250,000 will be created with the follcwing terms:
A principal pay down of $6,250,00 per quarter, PLUS, quarterly
interest only payments on the unpaid principal balance of the
note, payable at 6% per annum, ALL DUE, 5 years from the date
this agreement is signed or, the earlier date of either the
One Park Apartments being refinanced or sold.
344 F Street. Suite 101 Chula Vista' CA' 91910 619. 426 . 6333 Fax618'420'1313
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-9b WED 3:58 PM ZOGOB ENTERPR i SES F AX NO. 619 420 1313+ P 3
, ..
As discussed in OUr meeting, this offer will requi re our
Partnership to use all reserVes and the ongoing cash flows from the
property and also out-of-pocket cash contributions from the
principals. We are confident that this proposal wi 11 allow the
necessary time for the economy and the value of the property to
increase £ufficiently enabling the apartments to be refinanced or
sold at which time the Partnership will pay in full a II of the
outstanding principal and accrued interest then owed the Agency,
Please call if you have any questions.
SÇ!~Q
Richard G, z~
Managing Partner
One Park Ltd.
cc: Juan Arroyo
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~~-= EXHIBIT
~
alv OF
CHUIA VISlÄ E
COMMUNITY DEVELOPMENT DEPARTMENT
June 21, 1996
Mr. Richard Zogob
Zogob Enterpñses
344 F Street, §uite 1O 1
Chula VI$å,'CA 91910
Dear Dick:
After careful consideration of your proposals dated May 20, 1996, the Agency has found them
unacceptable and decided to respond with the following: !
The Agency is Requiring That:
1) $250,000 of the outstanding principal balance be paid to the Agency witlún
thirty (30) days of the scheduled June 25 meeting.'
2) The balance of the principal ($600,000) be paid within twelve (12) months of the
$250,000 payment. Quarterly interest payments of six percent (6%) be made on the
outstanding principal balance until the principal is paid in fulL
3) The accrued interest on the CUITent principal balance be secured by a new note,
payable quarterly at six percent (6%) interest, fully amortized over five (5) years.
The «Additional futerest, « being 4:5% of the sales price or appraised value of the property, would
be forgiven under this scenario if we can reach a timely agreement.
We are pleased to discuss our response with you at our June 25 meeting. However, it is
important to recognize that our response is a final position to an issue that has been outstaIlding
for an inappropriate period of time, and that the Agency will institute foreclosure proceedings if -'
you do not pay the $250,000 by the 30th day. I am sure that will not be necessary though, as you
will find this compromise more than fair.
If you have any questions, please call Mr. Juan P. Arroyo, Housing Coordinator at 585-5722.
Sincerely,
~ ~
Chris Salomone
Community Development Director
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MINUTES OF AN ADJOURNED REGULAR JOINT MEETING OF THE REDEVELOPMENT
AGENCY/CITY COUNCIL OF THE CITY OF CHULA VISTA
Tuesday, June 25, 1996 Council Chambers
12:05 a.m. [June 26, 1996] Public Services Building
CALL TO ORDER
1. ROLL CALL:
PRESENT: Agency/Council Members: Alevy, Moot, Padilla, Rindone, and
Chair/Mayor Horton
ALSO PRESENT: John D. Goss, Director/City Manager; Glen Googins, Deputy City Attorney; Chris
Salomone, Community Development Director; Lyle Haynes, Principal Community
Development Specialist; and Beverly A. Authelet, City Clerk
PUBLIC HEARING
2. PUBLIC HEARING: JOINT PUBLIC HEARING OF THE CITY COUNCIL AND
REDEVELOPMENT AGENCY TO CONSIDER CONDEMNATION OF INTEREST IN CERTAIN REAL
PROPERTY COMPRISED OF APPROXIMATELY 9978 SQUARE FEET, LOCATED AT 40 NORTH
FOURTH AVENUE (TARGET SHOPPING CENTER), CHULA VISTA, CALIFORNIA--As a condition to
issuance of building permits for the project, the Final Environmental Impact Report and Precise Plan required a fully
signalized concentric intersection be constructed at North Fourth Avenue and Brisbane in order to mitigate traffic
impacts. The purpose of this public hearing is to determine public necessity to acquire the property by means of
eminent domain. Staff recommends the Agency/Council hold the public hearing and approve the resolutions.
f4/5ths Vote Reauiredl Continued from the meeting of 6/18/96 (Community Development Director)
A. COUNCIL RESOLUTION 18253 and AGENCY RESOLUTION 1493: FINDING AND DETERMINING
PUBLIC INTEREST AND NECESSITY FOR ACQUIRING AND AUTHORIZING THE CONDEMNATION
OF CERTAIN REAL PROPERTY COMPRISED OF APPROXIMA TEL Y 9978 SQUARE FEET LOCATED
AT 40 NORTH FOURTH AVENUE, CHULA VISTA, CALIFORNIA AND AUTHORIZING THE
COMMENCEMENT OF CONDEMNATION PROCEEDINGS BY OUTSIDE COUNSEL TO ACQUIRE
RIGHT-OF-WAY
Councilman Alevy reiterated per an FPPC ruling that Member Moot and he both have a perceived conflict and per
a ruling by the FPPC and he would be participating as the necessary additional Member of the Council per the
FPPc.
Principal Community Development Specialist Haynes noted the item was a request to adopt a Resolution of
Necessity to acquire the property necessary to construct a fully-signalized concentric intersection at Fourth Avenue
and Brisbane. The intersection was required in order to mitigate the anticipated traffic impacts associated with both
the National City portion of the project and the Chula Vista portion of the project, plus any future impacts associated
with normal projected growth. The property in question was approximately 10,000 square feet of the most
northeasterly portion of the Target parking lot and was designed in a manner to minimize the amount of impact on
the private property owner and the tenant. The Chula Vista project was conditioned which required that intersection
be constructed and operational at the time in which any building beyond the Wal-Mart building and the new
Dixieline building. The National City portion was conditioned somewhat differently, but there was additional retail
that was being constructed along with the new Dixieline Store which was currently under construction. Dixieline
and the additional retail was expected to come on-line in late September. Staff feels timing was of the essence as
well as through the staff report that all of the legal requirements necessary for the Resolution of Necessity to be
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Minutes
Adjourned Regular Joint Meeting of the Agency/Council
June 25, 1996
Page 2
adopted have been met. Staff received a letter, placed on the dias at the meeting for Member review, whereby
Target has agreed to stipulate to the City's right to take and was raising some issues relative to reserving their rights
for future arguments relative to compensation.
Deputy City Attorney Googins stated that after months of intense negotiations with Target, City and Agency staff
was able to broker an agreement with all the involved parties in order to satisfy the various and competing concerns
of the various parties. Staff was able to obtain Target's agreement to stipulate to the City's right to take. The value
of that was in that the City has now avoided the potential additional cost of needing to fight a legal battle over the
City's right to take in the wake of the Council/Agency adoption of the Resolution of Necessity. In fact, if the
Resolution was adopted tonight and the developer posts the security in accordance with their requirements, the City
would be able to take immediate possession of the property as quickly as a week. The project to develop the aligned
intersection could commence immediately thereafter. What Target was unwilling to commit to was an agreement
to stipulate as to the amount of compensation that was being paid, not to them, but to the landlord. Target's belief
was that they were entitled to a share of these proceeds and believes that the best and most prudent course for them
to take in the face of these proceedings was to reserve their ability to challenge the amount of compensation that
was paid and, specifically, to reserve a claim for any loss of Goodwill that their store might suffer as a result of
the take. Part of the agreement was that I would formally represent Target's position in that regard on the record
and asked the Clerk to reflect his statement of their reservation of that right as being their kind of official
reservation on the record for purposes of the public hearing. No additional statement will be necessary at the public
hearing in that regard.
Member Rindone asked Attorney Googins to repeat his last comment.
Attorney Googins replied certainly. Target included, as part of their agreement to stipulate to the take this evening,
a proviso that in order to minimize their attorney's fees in attending a long hearing that he reflect the fact that they
were reserving those rights on the record. In fact they have really done so already by circulating the letter to
Council/Agency, doing so with their request that he make a formal statement to that effect, representing their
reservation of those rights. The second point he made was, notwithstanding the fact that the City had Target all
but in total agreement on the proposed project, was that the Council/Agency adoption of the Resolution of Necessity
tonight was still a very necessary action in order for staff to expeditiously and efficiently take title to the property
and transfer it to the appropriate parties and therefore commence the installation of the important aligned intersection
at Fourth and Brisbane. One of the main reasons for this was the timing involved. The City needed to move fast.
One of the reasons being the coordination with the National City development and the second reason was that in
the Precise Plan Condition that the City imposed against the Channelside Shopping Center, which called for these
improvements and the acquisition of that piece of property necessary for the installation of those improvements, had
a time period on it whereby once the developer tendered the acquisition to the City and the Agency, the City and
Agency would need to act to take possession of the property within a certain period of time. If the developer were
to strictly construe the manner in which that Condition was drafted, they arguably could declare that that time has
run already, but to the extent that the acquisition has taken much longer than anybody imagined, all parties have
been proceeding in good faith and the developer has not made such an argument to-date, although it was possible
that the would do so. Since timing was such an issne, then why was condemnation faster than a voluntary
acquisition. The main point to be made in that regard was that Target has still reserved their right to challenge the
evaluation of the asset and the money that they would receive in connection with the acquisition of the property.
In a voluntary acquisition scenario. in other words if the Council/Agency did not adopt the Resolution of Necessity,
and the City was then forced to pursue further negotiations with Target to finalize a voluntary acquisition, their
complete approval, in order to pass clear title, would need to be obtained. By evidence of the fact that it has taken
so long, even to get us to this point, and the fact that staff needed to agendize the Resolution of Necessity to get
Target to the table, staff was very pessimistic that Target would respond to a voluntary acquisition and give their
approval unless they were settled in discussions they were going to have with their landlord as to the amount of the
proceeds that they would receive from their landlord. By taking the condemnation approach, the City was able to
immediately obtain title to the property. allow Target to reserve their claims--either against the City and/or the
landlord, in whatever ensuing litigation might be necessary--and in that way the City can go forward quickly, but
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Minutes
Adjourned Regular Joint Meeting of the Agency/Council
June 25, 1996
Page 3
Target was nonetheless protected. It was something that served the City's best interest, with a minimum amount
of harm to the subjects, so to speak, of the acquisition.
This being the time and place as advertised, the public was declared opened.
Jack Duncan, 3250 Port Seranis, San Diego, representing Dixieline Lumber Company and also speaking for Pacific
National City Holdings. which was the developer of the National City portion of what was now called the South
Bay Marketplace. The action this evening was very aptly named because it was, in fact, a very necessary situation
at this time. You have heard from Mr. Googins and Mr. Haynes regarding the necessity to move quickly. He
reiterated. however, that the realignment was a requirement of the City and it has been a requirement for somewhere
around two years. Moreover, what they failed to mention was that there was a temporary condition there now that
was done with pylons to accommodate the opening of the Wal-Mart store prior to the final realignment and
signalization. That temporary condition has been there since near the end of last year so it has gotten beyond
temporary. Dixieline staff knows of three accidents that have taken place and it has very negatively affected
Dixieline's business. We agreed to it at the time because we had been assured by Target that they had agreed and
that, in fact, it was going to be temporary. We did so, over the objections of the City of National City. They
wanted it signalized at that time; but, we were able to convince the City [National City] that everything was going
to go forward in a timely manner. We really do need to act fast. That temporary condition was dangerous and was
negatively affecting the business. There was an irony to the whole thing that he would be remiss ifhe did not point
out to the Council/Agency and that was that this realignment--if you look at all the retailers in the whole complex
which would now consist of some 400,000 square feet of retail, most of which was in Chula Vista--the biggest
beneficiary of the realignment was the Target. Target was the greatest benefactor from the realignment because,
in the absence of the realignment, in a mis-aligned intersection/signalization, Target would be, in effect, isolated
from all those other retailers.
Chairman/Mayor Horton asked if there was anyone else wishing to address the Members on this time. Seeing no
one, she closed the public hearing.
Member Rindone stated he had an opportunity to talk with Mr. Googins. He knew that he had a number of
reservations on the proposal and it was not because he thought the project warranted it, he did. In fact, the
alignment of the intersection was appropriate. That was not what he was questioning, and he knows it. He just
wanted to put on the record, what he wanted to be absolutely certain was that eminent domain was essential--not
just because for the sake of time but for the completion of the project.
Attorney Googins replied in his opinion it was essential that the Council/Agency adopt the Resolution of Necessity,
both in order to ensure a timely completion of the project and to assure that, given the multiplicity of interests that
there was in the underlying property that the City was acquiring, that it can be acquired at all. There was both a
fee owner, two intervening leaseholders, and Target, themselves, obviously operating their store on that property
and it has taken us a substantial amount of time and staff effort to align those planets as well as we have aligned
them to-date. Again, he was pessimistic. given that there were so many competing interests involved and that it
was kind of a delicate agreement that was in place. That without the Resolution of Necessity, as the device that
allowed the City to clean the slate and get possession of the property, both quickly and certainly, it would be an
uncertain acquisition if the City was left with only the voluntary mechanisms.
Member Rindone said the concern was not as much with Target, though, as it was with the lessor of the property.
Was that correct?
Attorney Googins thought there was concerns with all the various interests. The agreement requires cooperation
from people on both sides of the equation. It requires cooperation from Gatlin, the developer of the Channelside
Shopping Center, because they are agreeing to add some additional improvements to, what was originally conceived
as the aligned intersection in order to allow a left turn pocket into the center of the Target store. It requires the
cooperation of the landlord, who had previously agreed to a specified price for the property that the City had
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Minutes
Adjourned Regular Joint Meeting of the Agency/Council
June 25, 1996
Page 4
offered. It was very difficult to get hold of. If, in fact, was left to negotiation with Target over who was going
to get what fair share of the amount being offered. he expected that that would be a protracted discussion, at best.
There was the interest of Target, who initially thought that the property being taken was actually the 32 spaces right
in front of their entrance way which, of course it isn't, it was the 32 spaces farthest away from their entryway, so
we have the corporate Target people that staff was dealing with who are not as familiar with what the situation on
the ground and do not appreciate the irony that Mr. Duncan pointed out. In fact, staff thinks this improves their
situation. Then you have the intervening leaseholders who have leases with Target and cannot cooperate formally
with the City because they are worried about violating contractual agreements that they have with Target, namely
their leases to a point where they could not even provide staff the leases in order to assist staff clear up a title issue
when staff attempted to acquire the property voluntarily. That was perhaps an unnecessarily detailed description
of the circumstances which were multiplicity of parties. multiplicity of competing interests, and a delicate agreement
staff has been able to broker amongst them. It was only brokered because staff agendized the Resolution of
Necessity and, from his perspective, can only be brought to fruition if, in fact, the Council/ Agency adopts the
Resolution, take the property, and then allow the valuation issue to be resolved either within or outside that litigation
as Target and the landlord are able to work out.
Member Rindone thought the key was what Attorney Googins just said. It's like the big club, because if this was
taken off the table, then the possibility of the propensity of this occurring could be jeopardized because then there
may be additional maneuverability between the parties involved and it may not occur at all.
Attorney Googins said that was correct. Exactly right.
Member Rindone stated that assuming the eminent domain action was agreed upon tonight, there would be potential
for litigation in determining Target's portion or share of the take. Was the City, by taking this action, not
benefitting either party in that potential lawsuit?
Attorney Googins responded he did not know enough of the law in the area to be able to flesh that out in the
margins. But, in effect, Target would have a number of litigation options in order to attempt to compensate
themselves for the loss they have suffered. One would be in the condemnation context, the other would be a simple
lawsuit for reformation of their contract, their lease with the various intervening leaseholders and landlord to reflect
the fact that they no longer have as much property as they did in the first place. So condemnation, perhaps, might
be a more convenient option for them in terms of a litigation context. but it would not be their only option and
would not really facilitate things inappropriately. It just allows them an alternative.
Member Rindone explained that from what he was understanding the Attorney's response to be, the question was
that it did not appear that the action would monetarily benefit either party in that potential litigation and so it was
the use of eminent domain that would benefit or provide value to a benefactor and would be done purely in the
public interest for public safety. Are you saying public safety?
Attorney Googins replied that was correct. There may be ancillary benefits derived from parties who are the subject
of condemnation but that was clearly not City's intent here and not the City's public purpose.
COUNCIL RESOLUTION 18253 and AGENCY RESOLUTION 1493 OFFERED BY CHAIRMAN/MAYOR
HORTON, reading of the text was waived, passed and approved 4-0-0-1 with Moot abstaining,
ORAL COMMUNICATIONS
None.
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Minutes
Adjourned Regular Joint Meeting of the Agency/Council
June 25, 1996
Page 5
OTHER BUSINESS
3. DlRECTOR'S/CITY MANAGER'S REPORT(S) None.
4. CHAIR'S/MAYOR'S REPORTiS) None.
5. AGENCY/COUNCIL MEMBER COMMENTS None.
ADJOURNMENT
ADJOURNMENT AT 12:30 A.M. [June 26, 1996] to the Regular Redevelopment Agency Meeting on July 16,
1995 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers.
Respectfully submitted,
BEVERLY A. AUTHELET, CMC/AAE, City Clerk
Berlin D. Bosworth, Secretary to the Redevelopment Agency
[C, \ WP51 \AGENCY\MINUTES\O6-25-96,MIIl
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MINUTES OF A SPECIAL JOINT MEETING OF THE REDEVELOPMENT AGENCY/
CITY COUNCIL OF THE CITY OF CHULA VISTA
Tuesday, June 25, 1996 Council Chambers
12:30 a.m. [June 26, 1996] Public Services Building
CALL TO ORDER
1. ROLL CALL:
PRESENT: Agency/Council Members: Alevy, Moot, Padilla, Rindone, and
Chair/Mayor Horton
ALSO PRESENT: John D. Goss, Director/City Manager; Glen Googins, Deputy City Attorney;
Chris Salomone, Community Development Director; and Beverly A. Authelet,
City Clerk
BUSINESS
2. PUBLIC HEARING: JOINT PUBLIC HEARING OF THE CITY COUNCIL AND
REDEVELOPMENT AGENCY TO CONSIDER A LOAN FROM THE REDEVELOPMENT BROADWAY
VILLAGE BUSINESS HOMES, L.P., DATED AUGUST 2, 1995--The Council/Agency opened the Public
Hearing at its meeting on Tnesday, June 18, 1996 and continned the public hearing to Tuesday, July 16, 1996. As
the Council nor the Agency will meet on July 16, 1996 the Council and Agency hereby amend the continuation
of the public hearing to Tuesday, July 23, 1996 at 6:00 p.m., immediately following the regular Council
meeting.
Mr. Salomone informed the Members it was unnecessary to take any action as the Council/Agency had decided to
meet on July 16, 1996.
ORAL COMMUNICATIONS
None.
OTHER BUSINESS
3. DIRECTOR'S/CITY MANAGER'S REPORT(S) None.
4. CHA!R'SIMAYOR'S REPORT<S) None.
5. AGENCY/COUNCIL MEMBER COMMENTS None.
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Minutes
Special Joint Meeting of the Agency/Council
June 25, 1996
Page 2
ADJOURNMENT
ADJOURNMENT AT 12:32 A.M. [June 26, 1996] to the Regular Redevelopment Agency Meeting on July 16,
1996 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers.
Respectfully submitted,
BEVERLY A. AUTHELET, CMC/AAE, City Clerk
Berlin D. Bosworth, Secretary to the Redevelopment Agency
[C:I WP5 I IAGENCYIMINUTESIO6-25-96,MI2]
,-$-g
JOINT REDEVELOPMENT AGENCY/CITY COUNCIL AGENDA STATEMENT
Item S
Meeting Date 08/20/96
ITEM TiTlE: JOINT REDEVELOPMENT AGENCY AND CITY COUNCIL PUBLIC
HEARING PURSUANT TO HEALTH AND SAFETY CODE SECTION
33431 AND 33433: To Consider an amendment to the Disposition
and Development Agreement with Broadway Village Business Homes,
loP. Dated August 2, 1995 to provide for an Agency loan for permit
and processin9 fees and sharing of soil remediation costs
S/;)...
AGENCY RESOLUTION I ..¡, (
COUNCIL RESOLUTION;9 (f¡ Approving the First Amendment to the
Disposition and Development Agreement by and Between the
Redevelopment Agency of the City of Chula Vista and Broadway
Village Business Homes, loP. Authorizing a Loan to Cover the Costs
of Development Permits and Processing for Phase I of the Broadway
Business Homes Project and Extending the Terms for Sharing in Soil
Remediation Costs to Complete Remediation; (2) Appropriating Funds
from the Otay Valley Road Project Area Fund to be Loaned to the
Southwest Project Area at the Council Approved Interest Rate for
Intra-City Loans; (3) Appropriating Funds from Southwest Project
Area Fund to Broadway Village Business Homes, L,P. and to Finance
the Agency's Portion of Additional Soil Remediation Costs; (4)
Authorizing Staff to Contract for Services to Complete Soil
Remediation,
SUBMITTED BY: Community Development Director ~~ ~
REVIEWED BY: Executive Director (4/5ths Vote: Yes..x.. No_I
BACKGROUND: The City Council and Redevelopment Agency held a public hearing and
approved a Disposition and Development Agreement (DDA) with Josef and Lenore Citron
dba Broadway Village Business Homes, L.P. (the "Developer") on August 2, 1995 for
redevelopment of the former Fuller Ford site. The sale of the property has been
completed. However, due to the protracted processing time and added expense, the
Developer requested that the Agency defer the payment of permit fees for the project until
the first six business homes are sold. The Agency conceptually approved a loan to the
Developer for this purpose and authorized staff to negotiate specific terms at their meeting
of April 16, 1996.
The proposed loan to assist the Developer in paying permit fees and related processing
expenses alters the terms of sale of the property and therefore requires an amendment to
the Disposition and Development Agreement.
The DDA also contains a provision for the sharing of costs for remediation of contaminated
soils on the property. At the time that the DDA was executed, limited information was
available regarding the extent of contamination since improvements on the site limited the
ability to do comprehensive soil testing in a cost effective manner. Demolition and
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Page 2, Item ~
Meeting Date 08/20/96
removal of improvements on the site has allowed excavation of contaminated soils
resulting in greater quantities of contaminated soils than anticipated. Therefore, the
estimate used as a basis for the cost sharing agreement in the DDA has been exceeded,
triggering a meet and confer provision which was specifically designed to respond to
remediation costs exceeding the estimate. The Developer and Agency staff have met and
have agreed to 1) continue to share costs in the manner set forth in the original DDA until
remediation is complete, and 2) pursue reimbursement from the parties responsible for
contaminating the property,
The extension of remediation payments beyond the previously agreed amount also requires
an amendment to the DDA. In accordance with Community Redevelopment Law, the
Council and Agency must advertise and hold a public hearing to consider the proposed
loan and amendment to the DDA.
If the Council and Agency approve the amendments, it will be necessary to appropriate
funds from the Otay Valley Road Project Area to the Southwest Project Area to cover the
cost of the loan and of the additional remediation costs.
RECOMMENDATION: That the City Council and Agency hold the Public Hearing and
approve the First Amendment to the Disposition and Development Agreement with
Broadway Village Business Homes to provide a loan to cover permit costs and to cover the
Agency's portion of the additional soil remediation costs, and authorize the transfer of
redevelopment funds from the Otay Valley Road Project to the Southwest Project to cover
permit costs and remediation costs. The Council/Agency are also requested to authorize
staff to contract for additional soil remediation consulting services.
BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable
DISCUSSION:
Due to the unique nature of the Business Homes project, it has taken longer than
anticipated to process the parcel map and project plans. This has resulted in additional
legal and consulting costs to the Developer. In addition, City fees for this project include
Park Acquisition and Development (PAD) and Public Facilities Impact Fees which add
considerable expense to the project, All fees and related costs must be paid before the
issuance of building permits (PAD fees are due earlier, before recordation of the final map). '
The Developer has requested that the Agency/City allow fees to be payable at the time of
sale of the first six business homes. City codes only permit the conditional deferment of
PAD fees. It is possible, however, for the Agency to provide the funds necessary for the
payment of fees to the City as a loan to the Developer. The Developer would repay the
Agency incrementally, with the first six sales.
A proposal for a loan was approved by the Agency at their meeting of April 16, 1996,
including the following provisions;
5-d-.
Page 3, Item 5'
Meeting Date 08/20/96
Amount of Loan
The total amount of the loan will be the total sum of the following fees for the
development of six business homes:
8 Park Acquisition and Development (PAD) fees covering eighteen units (one,
half of the total project),
8 Traffic Impact Fees
8 Building Permit Fees
8 Sewer Hookup Fees
8 Planning Department Plan Check Fees
8 Engineering Department Fees including Survey, Monumentation, Grading
Permits and Inspections
8 Public Facilities Impact Fees
The current staff estimate for these fees, in total, is $117,000. These fees do not include
City fees billed to the project prior to May 1, 1996, nor fees due to outside agencies such
as school districts, water districts and electric companies.
Term and Repavment of Loan
For the purpose of computing interest, loan funds will be disbursed in two installments.
The first installment will be made upon approval of the DDA amendment by the Agency
and will cover all processing and permit fees due or committed as of that date (including
PAD fees). The second installment will occur at the time of issuance of building permits
and will cover all fees remaining unpaid to date including fees customarily paid at the time
of issuance of building permits and estimated inspection and processing fees which are
reasonably anticipated,
The loan will be repaid incrementally as each of the first six home sales occur, whether
they be the initial model units or other units developed as part of Phase I of the project.
As repayments are received, they will be allocated to pay interest charges first, then
principal balances.
Interest Rate
Interest on the outstanding balance of the loan will be charged on the basis of 6% per
annum, compounded monthly (1/2 of 1 % per month) on the outstanding balance until the
loan is paid off. This is the approximate average rate earned by the City on pooled
investments,
Securitv for the Loan
The loan will be secured by a letter of credit or a lien against the Broadway Business Home
property which can be incrementally released as the units are sold. The Developer has
.j- - 3
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Page 4, Item ~
Meeting Date 08/20/96
accepted these provisions and the Amendment to the DDA incorporating the loan terms is
being presented to the Agency for approval.
The approval of the loan agreement by the Agency will change the terms effecting the sale
of property to the Developer embodied in the DDA. The action of approving the loan thus
necessitates an amendment to the DDA (Section 4.1.11) and, pursuant to Health and
Safety Code, a public hearing and revision of the Section 33433 report disclosing the
financial transaction between the Agency and Developer.
Soil Remediation Costs
Prior to completion of the sale of the first phase of the property to the Developer, the
Agency had elected not to remove improvements on any portion of the site until the
Developer provided evidence of financing commitment from a reputable lender and closed
on the property. Based on the results of a Phase I Environmental Assessment, it was
determined that subsurface soils testing was required. However, the Agency's ability to
conduct comprehensive soils testing was limited by the presence of the then existing
structures and pavement. To fulfill the Agency's due diligence requirements under these
circumstances required a costly method of drilling through the paved surfaces and
sampling soils using a specialized instrument. Soils samples taken in this manner were
limited in quantity due to their high cost.
Because of the limited number of samples taken and the fact that the samples only
identified the vertical characteristics of an area of contamination, it was difficult for the
consultant to provide an accurate estimate of cleanup costs. The purpose for determining
an estimate of cleanup costs prior to demolition was to establish financial duties of the
Agency and the Developer, with respect to soil remediation, as a part of the DDA. Based
on this limited information, the consultant estimated the total quantity of contaminated
soils to be approximately 220 to 330 tons of soil, resulting in a remediation cost estimate
of approximately $41,000, which was to be split evenly between the Developer and the
Agency in the following arrangement: the first $10,000 of remediation costs would be
paid by the Developer on an ongoing basis as invoices are received from the consultant;
the next $10,000 would be paid by the Agency; after that, additional costs would be split
between the Agency and Developer up to an additional $20,000.
After demolition of the site was underway and the subterranean hydraulic hoists were
removed, soil surrounding the hoist stems was excavated and tested, Excavation was
terminated when testing of excavation pit sidewall samples revealed no contamination. All
contaminated soils were placed in stockpiles on the northern portion of the site. Several of
the hoists had leaked significant quantities of hydraulic fluid, in some cases resulting in
liquid product pooled within the excavation pits. The dimensional characteristics of the
leakages were larger than anticipated based on the pre-demolition sampling protocol. The
actual quantity of contaminated soils contained in the stockpiles is approximately 1,470
tons, significantly exceeding the estimated quantity of 220 to 330 tons.
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Page 5, Item 5
Meeting Date 08/20/96
The remediation of soils was staged to allow for time between the excavation of soils and
comparison of actual quantities of soils and the estimate. During that time, it was
contemplated that if the remediation costs were to exceed the original cost estimates to
such a degree that it rendered the development project infeasible or reduced the residual
value of the land to such a degree that it made sale of the property impractical, then each
party to the DDA would have the right to terminate the agreement after meeting to discuss
the issues, That meeting has been held, and based on the outcome of that meeting and
correspondence from the Developer, attached as Exhibit A, the Developer wishes to
proceed with soil remediation and agrees to continue splitting costs until remediation is
complete. It is also staff's recommendation to proceed with soil remediation in accordance
with these terms.
The Agency/City Council are requested to hold the requisite public hearing which has been
publicly noticed and approve the First Amendment to the DDA and related actions.
FISCAL IMPACT:
Loan to Developer
Total fees for the development of the first six business homes, including PAD fees
covering Phase I of the project, are estimated at up to $117,000. Funds to cover the
proposed loan will be provided from the Agency's escrow proceeds from sale of the
project site to the Developer, totalling $286,600. Demolition costs estimated at $1 Og,OOO
must also be paid out of these funds. The net funds to the agency from sale of the
property is thus $60,600.
Since the proceeds from the sale of the property have been deposited in the Otay Valley
Road Fund 994-9940-RD133 (the acquisition of this property and demolition of structures
on the site are considered part of the Auto Park Project), adequate funds to cover the loan
must be transferred to the Southwest Project Fund since the business homes project and
related expenses are attributable to that project area. The Council and Agency are
therefore requested to authorize the loan of funds adequate to cover the loan amount from
the Otay Valley Road account 994-9940-RD133 to the Southwest Fund. This loan will be
interest bearing as authorized by Council for intra-City fund loans,
If the Agency approves the loan to the Developer, the fees paid by the Agency on the
Developer's behalf will be repaid incrementally, with interest, with the first six unit sales.
Repayments will be applied to retire all interest charges first.
Soil Remediation
The original estimate of soils remediation consisted of two phases: the first phase
consisted of soils testing, costing $21,000 and the second phase consisting of soil
removal was estimated at $20,000. To date, only the first phase of work has been
completed and costs of $21,000 have been incurred, Unanticipated costs incurred to date
include additional excavation ($14,923), Total costs to complete the remediation will also
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Page 6, Item ~
Meeting Date 08/20/96
include soil removal and disposal for which a low bid of three estimates was received at
$43,732, backfilling and recompaction of the excavation pits, estimated at $27,300,
resulting in a total for soils remediation as follows:
Soil Testing $21,000
Excavation $14,923
Soil Disposal $43,732
Backfill and
Recompaction $27.300
Total $106,955
Please note that the $106,955 total exceeds the not-to-exceed total identified in the
attached letter from the applicant's representative. The $105,000 figure identified in that
letter was an estimate based on unconfirmed bids. Bids have now been finalized resulting
in the $106,955 figure. The Agency's share of this total under the proposed cost sharing
arrangement would be $53.478, which is $33,000 more than the previously anticipated
amount. The applicant's cost would also be $53.478, over $33,000 more than originally
anticipated. It should be noted that recovery of all costs associated with soils remediation
on the site will be pursued with the parties responsible for the contamination. Adequate
funds remain in account 994-9940-RD133 and must be appropriated for this purpose,
M :\HOME\COMMDEV\ST AFF, REP\O8- 20,96\AMENDDD A.RA 4
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~'2I. c;'. ,EXHIBIT- A
All StIr Realty ! ~ 6ø& I :
I
13161 Black MQUlllaln Road, Suite 9 I \
San DIego, California 92:29-2897 \
(819) 484-1199
Augusts. 1996
Mr. Chrfs Salomone
Community Development Director
City of Chura VIsta
276 Fourth Avenue
Chula Vista, Canfomia 91910
Fax: 476-5310
Dear Mr. Salomone:
Thlsrettsr Is sent In behalf of Josef and Lenore Citron corúlrmlng their understanding and
agreement that additional .oils remediation costs, not to exceed a total of $105,000 Including
the first $40,000 to which they had pre'liouely agreed, are to be split 50150 with the City of
Chula VIsta and will be paid proportionately as they al'B incurred over a time line of .
apProximately two months.
Yours tNly,
!:!:i:: ~
Each OtfIce la Independ6nl!y Owned A1K! 0(Jera/8d
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FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT
This FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT
("Amendment") is entered into effective as of August 20, 1996 by
and between the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
("Agency") and BROADWAY VILLAGE BUSINESS HOMES, L.P., a California
limited partnership ("Developer") with reference to the following
facts:
A. Effective August 1, 1995 Agency and Developer entered
into a Disposition and Development Agreement ("Agreement") with
respect to certain real property owned by the Agency located at 760
Broadway, Chula Vista, as more particularly described therein.
B. Except as otherwise expressly provided herein, all
capitalized terms used herein shall have the same meanings ascribed
thereto in the Agreement.
C. Subsequent to the approval of the Agreement (a) Developer
requested that the Agreement be amended to provide for the deferral
of certain development impact and permit fees ("Developer's
Proposed Fee Deferral"), and (b) the parties discovered that
Additional Remediation Work was necessary on the Site.
D. Developer and Agency staff reached agreement on the terms
and conditions for Developer's Proposed Fee Deferral and the
allocation of costs for the Additional Remediation Work. After a
public hearing, held in accordance with the requirements of the
Redevelopment Act, and after making the required findings and
determinations, the Agency approved such terms and conditions on
August 20, 1996 pursuant to Agency Resolution No.
NOW, THEREFORE, in consideration of the above-recitals, the
mutual obligations set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which the parties
hereby acknowledge, the parties hereby agree as follows:
1. The following new Section 3.3 is hereby added to the
Agreement:
"3.3 Allocation of Costs of Additional Remediation Work.
(a) During the course of the Remediation work,
described in Section 3.2(c) hereof, Environmental Consultant
identified the need for the performance of certain Additional
Remediation Work (the "Identified Additional Remediation Work"),
consisting of removing and disposing of stockpiled contaminated
soils and backfi 11 ing of excavation pits. The parties have
received an estimate that the cost to complete the Identified
Additional Remediation Work is approximately Sixty six Thousand
Dollars ($66,000). The parties have agreed to share the costs of
such work in accordance with the terms of this Section 3.3.
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(b) Developer shall be responsible for the payment
of fifty percent (50%) of the cost of the Identified Additional
Remediation Work not to exceed Thirty Three Thousand Dollars
($33,000) ("Maximum Developer Contribution"). Agency shall be
responsible for the payment of the remainder of the cost of such
work not to exceed Thirty Three Thousand Dollars ($33,000)
("Maximum Agency contribution"). Agency shall contract with a
consultant (or consultants) reasonably approved by Agency and
Developer ("Approved Contractor(s)") to conduct the Identified
Additional Remediation Work. Agency shall submit to Developer
copies of all invoices received from the Approved Contractor(s) in
connection with the performance of the Identified Additional
Remediation Work. within ten (10) days of Developer's receipt and
reasonable approval of an invoice, Developer shall be obligated to
pay to the Agency an amount equal to Developer's 50% share thereof,
not to exceed (for anyone invoice or in the aggregate) the Maximum
Developer Contribution. Agency agrees to use such deposited funds
solely for the purpose of paying the appropriate consultants or
contractors for the performance of the Remediation Work or the
Identified Additional Remediation Work, or repaying itself to the
extent Agency has already advanced Developer's share of such costs.
The terms for submittal of invoices and Developer's payment thereof
provided hereinabove shall also apply to Developer's obligation to
share in the costs of the Remediation Work as set forth in Section
3.2(c) hereof.
(c) If during the course of the performance of the
Identified Additional Remediation Work the Approved Consultant(s)
indicates, or the parties otherwise agree, that additional work is
required to remove contaminated soils from the Site, then neither
party shall be obligated to advance sums in excess of their
respective maximum contributions, and the parties shall meet,
discuss and negotiate the allocation of responsibility for the cost
of such work. If the parties are' unable to agree as to the
appropriate allocation of responsibility for such work, the
Remediation Work and the Identified Additional Remediation Work
shall still be completed, and the costs for such work shall still
be shared in accordance with the terms of sections 3.2 (c) and
3.3(b) hereof, respectively; provided, however, either party shall
have the right to terminate this Agreement pursuant to Section
6.6.1 or 6.6.2 hereof upon such party's full payment of its share
of such costs."
2. Section 4.2 of the Agreement is hereby amended and
restated to read, in its entirety, as follows:
"4.2 Fees
"4.2.1 Developer shall be solely responsible for
payment of all applicable project processing and impact fees
including, without limitation the following City imposed fees: park
acquisition and development ("PAD") fees, traffic impact fees,
2
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public facilities development impact fees, sewer capacity and hook-
up fees, planning department processing and plan check fees,
engineering department survey, monumentation, grading permit and
inspection fees (collectively, "City Imposed Project Fees").
4.2.2 Notwithstanding the foregoing, subject to
the terms and conditions set forth below, Agency agrees to loan to
Developer ("Agency Loan") an amount (the "Agency Loan Amount")
equal to the lesser of: (a) One Hundred Twenty Five Thousand
Dollars ($125,000); and (b) the sum of (1) the amount of the City
Imposed Project Fees for the first six (6) Business Homes units,
(2) the amount of PAD fees related to the remaining twelve (12)
Business Homes units to be developed on Parcel 1, and (3) any
interest accrued on the amount of PAD fees previously deferred by
the City on May 14, 1996 pursuant to city Council Resolution No.
18280 and the related agreement. In the event that Developer
incurs city Imposed project Fees in excess of $125,000, Developer
shall be obligated to pay such fees when due in accordance with
existing city ordinances and policies.
4.2.3 The Agency Loan Amount shall be disbursed
as follows: On September 1, 1996 the Agency shall pay to the City
on behalf of Developer (a) the amount of PAD fees owed for the
eighteen (18) Business Homes units in Parcell, plus any accrued
interest thereon, and (b) the amount of any and all other then
outstanding City Imposed Project Fees. At such time(s) that other
City Imposed Project Fees are otherwise due in accordance with
existing city ordinances and policies, the Agency shall pay to the
City the then due amounts of such fees on behalf of Developer. At
no time shall the sum of any amounts paid by Agency on behalf of
Developer under this section exceed the Agency Loan Amount.
4.2.4 Agency Loan disbursements shall accrue
interest on behalf of the Agency at the rate of six percent (6%)
per annum, compounded monthly, from the time of the disbursement
until due. Overdue amounts shall accrue interest at the penalty
rate of fifteen percent (15%).
4.2.5 The Agency Loan shall be repaid in a
maximum of six (6) separate installments (each an "Installment"),
with one Installment due upon the close of escrow for the sale of
each of the first six (6) Business Homes units sold, regardless of
whether such units are in Phase 1 or Phase 2 of the project. The
amount due for each of the first five (5) Installments shall be an
amount equal to One Hundred Twenty Percent (120%) of the quotient
of (a) the outstanding Agency Loan Amount, plus accrued interest,
at the time of such Business Homes unit closing, divided by (b) the
number six (6), minus the number of Business Homes units previously
sold at the time of such Business Homes unit closing for which the
Agency has already received an installment payment in accordance
with the terms of this formula. For example, if at the closing for
the sale of the second Business Homes unit the outstanding balance
3
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under the Agency Loan (principal plus interest) were $100,000, and
the Installment corresponding to the sale of the first Business
Homes unit sold had been paid, the Installment due at the closing
for the second Business Homes Unit would be $24,000 (120% x
($100,000 divided by (6-1» = $24,000). The amount due for the
sixth and final payment shall be the amount equal to the
outstanding balance of the Agency Loan, plus accrued interest, at
the time of the closing of the sale of the sixth Business Homes
unit. Notwithstanding the foregoing, the entire Agency Loan
Amount, plus accrued interest, shall be due and payable on the
earlier to occur of (1) the closing of the sale of the sixth
Business Homes unit, or (2) on January 1, 1998.
4.2.6 As a condition precedent to the Agency's
obligation to make the Agency Loan Developer shall execute in favor
of Agency (a) a secured Promissory Note which evidences Developer's
obligation to repay the Agency Loan in a form approved by the
Agency Attorney, which such form shall be consistent with the terms
of this section 4.2, and shall contain such other provisions as may
be required or approved by the Agency Attorney; and (b) a standard
long form Deed of Trust, in recordable form, which (1) secures
Developer's obligations under the Promissory Note, (2) contains due
on sale and incremental reconveyance provisions in a form approved
by the Agency Attorney, and (3) imposes a lien of record against
Lots 7 through 18 of Parcell.
4.2.7 In addition to any and all other remedies
available at law or in equity, Developer's failure to comply with
the terms of this Section 4.2, the Promissory Note, or the Deed of
Trust shall constitute a material default under this Agreement...
3. Except as expressly modified by this Amendment, all other
terms of the Agreement shall remain unmodified and in full force
and effect.
4. Agency reserves the right, at its election, to cause the
recordation of this Amendment; upon such election Developer agrees
to obtain notary acknowledgments of its signature(s) and to
otherwise cooperate in connection therewith.
[NEXT PAGE IS SIGNATURE PAGE]
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SIGNATURE PAGE TO FIRST AMENDMENT TO
DISPOSITION AND DEVELOPMENT AGREEMENT
The parties hereby enter into this Amendment effective as of
August 20, 1996,
BROADWAY VILLAGE BUSINESS HOMES,
L.P., a California limited
partnership
By: Citron Realty Management
Corporation, a California
corporation
Dated: August , 1996 By:
Its President
Dated: August , 1996 By:
Its Secretary/Vice-President
REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA
(Agency)
Dated: August , 1996 By:
Shirley Horton
Its Chairman
APPROVED AS TO FORM AND LEGALITY
ON THIS ----- DAY OF AUGUST, 1996
By:
Agency Attorney
bzhome.amd
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6--r{
PROOF OF PUBLICATION This space is for the County Clerk's filing stamp
(2015.5 C.C.P.)
STATE. OF CALIFORNIA,
CV7683
County of San Diego:
I am a citizen of the United States and Proof of Publicáton of:
a resident of the County aforesaid; I am NOTICE OF PUBLIC HEARING
over the age of eighteen years, and not -- - - --- - - --- -- -- -- -- -- - --- -- -- - - - -- -- - - - - -- ----- --
a party to or interested in the above- -- -- - -- - - - - - -- - ---- --- -- -- --- - --- -- -- -- - - - - - -- ----
entitled matter, I am the principal clerk NDTICE DF PUBLIC
of the printer of the CHULA VISTA HEARING
, NOTICE IS HEREBY Gf
STAR-NEWS, a newspaper of general VEN pu,,"""t to Seaions
33431 arn! 33433 of the Ca-
circulation, published TWICE WEEKLY ~";,iat~~a:~ ~ ~~% ¡ice
in the city of Coronado and the South ~I'.':.~:I~~~~ v~~
Bay Judicial District, County of San ho~ a publ. hearing con-
coming an amendment 10
Diego, which newspaper has been the '8,proved Disposition
and evelopment ~ree-
adjudged a newspaper of general circu- ment between the R """-
lopment Agency and
lation by the Superior Court of the :~~e[:I~~~h:u~;e
County of San Diego, State of ~~i~".",f;o~~=~~:~~
California, under the date of April 23, the former Fuller Ford s~e
ioeated at 760 Broadway
1951, Case Number 182529; that the with the Southwest Redeve.
1o~:nt~~:" ~::tng will
notice, of which the annexed is a print- take ~aœ Tuesday. June
ed copy (set in type not smaller than 18. 1996. immediate~ fol-
lo.;ng the C<~ Council
nonpareil), has been published in each meeting whK:h begins at
6:00 p.m, In the Council
regular and entire issue of said news- Chambe" Iocaled in the
Pu~ic SeMCOS Building,
paper and not in any supplement there- 276 Fourth Avenue. Chula
V.ta at wh.h time any in.
of on the following dates, to-wit: terested p""on may ap-
pear, The item will appear
6/1 & 8 on the Cily Coun.
cillRedevelopment ~ncy
agenda, Shou~ you woh to
challenge the action at a
all in the year 1996 later date, you may be lim-
ited to raising on~ those is.
sues you or someone e..
raised at the pu~ic hearing
I certify (or declare) under penalty of descnbed in this nolice. or ,
raised in wri"n co"espen,
perjury that the foregoing is true and dence dalivered 10 the
Communi~ Development
correct. ~~crtm~~~or r:r ~
muni~ Deve~ent Do-
Dated at Chula Vista, California 91910 ~:U:.~:t..~::
mæling address is 276
Fourth Avenue, Chula VOla
919,0.
A COllY of the SUmmary
this 8th day of JUNE ,19~ Report which dascribes the
financial considerations in-
Signatur~~ - voIved in the Disposition arn!
Deveiopment AQraement in-
clwing the proper amend,
ment 0 now availabla for
pU~K: inspection at the
) Communi~ Devalopment
PRINCIPLE CLERK Department dLl!Ìng regular
working hours, Monday
through Fnday, 8:00 a.m. "
5:00 p,m, For further infor.
mation ~ease conlact Fred
Kassman" Redevelopment
Coordinator, at 691,5047,
IS: Chris Salomone
.,5' Communi~ Development
Director
I Dated: June t. 1996
CVtJ7683 611.6196
THIS PAGE BLANK
5' - lCa
AGENCY RESOLUTION /5'/;)....
COUNCIL RESOLUTION /7J4d-1
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
AND THE CITY OF CHULA VISTA: (1) APPROVING THE FIRST AMENDMENT TO THE
DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AND BROADWAY
VILLAGE BUSINESS HOMES, loP. AUTHORIZING A LOAN TO COVER THE COSTS OF
DEVELOPMENT PERMITS AND PROCESSING FOR PHASE I OF THE BROADWAY
BUSINESS HOMES PROJECT AND EXTENDING THE TERMS FOR SHARING IN SOIL
REMEDIATION COSTS TO COMPLETE REMEDIATION; (2) APPROPRIATING FUNDS
FROM THE OTAY VALLEY ROAD PROJECT AREA FUND TO BE LOANED TO THE
SOUTHWEST PROJECT AREA AT THE COUNCIL APPROVED INTEREST RATE FOR
INTRA-CITY LOANS; (3) APPROPRIATING FUNDS FROM SOUTHWEST PROJECT AREA
FUND TO BROADWAY VILLAGE BUSINESS HOMES, loP. AND TO FINANCE THE
AGENCY'S PORTION OF ADDITIONAL SOIL REMEDIATION COSTS; (4) AUTHORIZING
STAFF TO CONTRACT FOR SERVICES TO COMPLETE SOIL REMEDIATION.
WHEREAS, the Agency entered into that certain Disposition and Development
Agreement (the "DDA") with Broadway Village Business Homes, loP.(the "Developer"}, dated
August 2, 1995, for the sale of Agency property located at 760 Broadway within the
Southwest Redevelopment Project Area, to the Developer for the development of the
Broadway Business Homes Project (the "Project"); and,
WHEREAS, it has been determined that the Project will help to eliminate blight in the
Southwest Redevelopment Project Area; and
WHEREAS, the Developer has requested that the Agency and the City defer certain
development permit and processing fees due to the extended processing time and expenses
related to approval of plans and the subdivision map for the Project; and
WHEREAS, under authority from the Agency, staff has negotiated terms of a loan with
the Developer under which the Agency will provide funds to cover permit and processing fee
expenses for the development of six business homes; and,
WHEREAS, in order to approve such a loan, the Agency must approve an amendment
to the DDA ("Amendment"); and,
WHEREAS, staff has drafted a proposed DDA Amendment and the City Council/Agency
board has reviewed same: and,
WHEREAS, under Health and Safety Code Section 33431 and 33433, the Council and
Agency must notice and hold a public hearing to amend the terms of the DDA and make
available to the general public a report identifying all of the terms and conditions of sale of the
property; and,
WHEREAS, the Council and Agency have duly noticed and held a public hearing and
have made available a report describing the terms and conditions of the sale of property in
accordance with applicable laws; and
WHEREAS, in order to fund the loan, it is necessary to loan funds from Otay Valley
Road Redevelopment Project Area Fund to Southwest Redevelopment Project Area Fund in an
adequate amount to cover the loan; and
S-If
WHEREAS, such intra-agency loans are to be repaid at the interest rate approved by the
Council; and
WHEREAS, soil remediation costs on the Project Site are anticipated to exceed original
estimates upon which the agreement was based requiring an amendment to the DDA to
complete remediation; and
WHEREAS, in accordance with Section 3.2 of the DDA, Developer and Agency staff
have agreed to terms for the equal sharing of certain additional costs for remediation of
contaminated soils on the Project Site, which such terms are set forth in the proposed DDA
Amendment; and
WHEREAS, after consideration of all evidence submitted at the public hearing, the City
Council/Agency Board found and determined that with the approval of the Amendment to the
DDA (a) it is in the best interests of the community that the Property be sold to the Developer
without public bid; (b) the consideration paid and to be paid for the Property is not less than
the fair reuse value thereof in light of the development costs for the Project, and the required
uses, covenants and conditions imposed on the Project Site; and (c) the Project is necessary to
effectuate the Redevelopment Plan and shall assist in the elimination of blight in the Southwest
Redevelopment Project Area; and
WHEREAS, a Negative Declaration has already been prepared and approved for the
Project in accordance with CEOA, and because the Amendment to the DDA imposes no
additional or new environmental impacts, no additional CEOA documentation is necessary.
NOW THEREFORE, THE REDEVElOPMENT AGENCY OF THE CITY OF CHULA VISTA
AND THE CITY OF CHULA VISTA do hereby find, order, determine and resolve as follows:
Section 1. The City Council/Agency hereby adopts the above recitals, findings and
determinations.
Section 2. The First Amendment of the Disposition and Development Agreement by
and between the Redevelopment Agency of the City of Chula Vista and Broadway Village
Business Homes, loP., dated August 2, 1995, a copy which is on file in the Office of the
Secretary to the Redevelopment Agency known as Document RACO-95-18, is hereby approved
in the form presented; and the Agency Chairman is hereby authorized to execute same.
Section 2. Funds of Otay Valley Road Project Area from land sale proceeds are hereby
appropriated to be loaned to the Southwest Project Area at the Council approved interest rate
for intra-City loans.
Section 3. Such funds deposited in the Southwest Project Area fund are hereby
appropriated for the loan to Broadway Village Business Homes, loP. and to finance the
Agency's share of additional soil remediation costs.
Section 4. Agency staff is hereby authorized to negotiate and obtain approval for
agreements with consultants/contractors to complete the remediation of contaminated soils on
the property in accordance with the terms of the herein approved DDA Amendment and the
City/Agency purchasing rules.
BE IT FURTHER RESOLVED that the Chairman of the Redevelopment Agency is hereby
authorized to execute the First Amendment on behalf of the Agency.
PRESENTED BY: APPROVED AS TO FORM BY:
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Chris Salomone
Community Development Director
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NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN pursuant to Sections 33431 and 33433 of the California
Health and Safety Code that the City Council/Redevelopment Agency of the City of
Chula Vista will hold a public hearing concerning an amendment to the approved
Disposition and Development Agreement between the Redevelopment Agency and
Broadway Village Business Homes, l,P. for the purpose of developing approximately
thirty-six business homes on the former Fuller Ford site located at 760 Broadway with
the Southwest Redevelopment Project Area. The purpose of the amendment is to
provide a loan to the developer to cover certain permit fees and to provide for the
sharing of costs for the removal of contaminated soils from the project site.
The public hearing will take place Tuesday, August 20, 1996 immediately following
the City Council meeting which begins at 6;00 p,m. in the Council Chambers located
in the Public Services Building, 276 Fourth Avenue, Chula Vista at which time any
interested person may appear. The item will appear on the City
Council/Redevelopment Agency agenda, Should you wish to challenge the action at
a later date, you may be limited to raising only those issues you or someone else
raised at the public hearing described in this notice, or raised in written
correspondence delivered to the Community Development Department at or prior to
the public hearing. The Community Development Department is located at 263 Fig
Avenue, Chula Vista; the mailing address is 276 Fourth Avenue, Chula Vista 91910
A copy of the Summary Report which describes the financial considerations involved
in the Disposition and Development Agreement including the proper amendment is
now available for public inspection at the Community Development Department during
regular working hours, Monday through Friday, 8;00 a.m. to 5;00 p.m. For further
information please contact Fred Kassman, Redevelopment Coordinator, at 691-5047
Chris Salomone
Community Development Director
Dated; August 5, 1996
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CllY OF
CHULA VISTA
COMMUNITY DEVELOPMENT DEPARTMENT
August 5, 1996
VIA FAX - 426-6346
Star News
Legal Department
835 Third Avenue
Chula Vista, CA 91910
RE: NOTICE OF PUBLIC HEARING
Enclosed is a copy of the notice of public hearing concerning an amendment to the
approved DDA between the Redevelopment Agency and Broadway Village
Business Homes, L.P.
Please publish this document on AuQust 10 and 17. 1996 and forward a proof of
publication notice. as well as the invoice, to the Community Development
Department, City of Chula Vista, 276 Fourth Avenue. Chula Vista, CA 91910.
Sinc~rel,ri
i ~~
~r~d K sman
Redevelopment Coordinator
/ak
Attachment
AKILETTERSIBwayhom3.let
\
276 FOURTH AVE/CHULA VISTA. CALIFORNIA 91910/(619) 691-5047
-.. - .... -,
~~~
::=. .:;
-:::. =-
OlY OF
CHULA VI5fA
COMMUNITY DEVELOPMENT DEPARTMENT
.
FAX # (619) 476-5310
TELEFAX COVER LETTER
COMPANY: ~ftLUì. ~ fLu» c?)
ATTENTION: Cþm~Ar ~~
FROM:
DATE: f}-~-qfo
PAGES: if[ J.
(Includes this cover page.)
FAX#: ,(j:A 10 - u,3 4b
Message: ~~~ 1#,
k- ~
/
If all pages are not received, please call (619) 691-5047.
276 FOURTH AVENUE/CHULA VISTA, CALIFORNIA 92010/(619) 691-5047
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T%, N Dale ¡I~(9(¡/
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P.O. Box 1207 I 279 Third Avenue fJ1' k.
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CHUIA VISTA
COMMUNITY DEVELOPMENT DEPARTMENT
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FAX # (619) 476-5310
TELEFAX COVER LETTER
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276 FOURTH AVENUE/CHULA VISTA, CALIFORNIA 92010/(6191691-50<7
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* TRANSACTION REPORT *
* AUG-16-96 FRI 16:34 *
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JOINT REDEVELOPMENT AGENCY/CITY COUNCIL AGENDA STATEMENT
Item ~ I b
Meeting Date 08-20-96
ITEM TITLE: JOINT REDEVELOPMENT AGENCY/CITY COUNCIL PUBLIC HEARING: TO
CONSIDER A SPECIAL LAND USE PERMIT TO ALLOW THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTION HOUSE AT 780 BAY
BOULEVARD LOCATED WITHIN THE BAYFRONT REDEVELOPMENT
PROJECT AREA FOR A PERIOD OF ONE YEAR SUBJECT TO CONDITIONS
AND TO CONSIDER A COASTAL DEVELOPMENT PERMIT FOR THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780 BAY
BOULEVARD LOCATED WITHIN THE CHULA VISTA COASTAL ZONE
SUBJECT TO CONDITIONS
6513
A, RESOLUTION F THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA ISSUING A SPECIAL LAND USE PERMIT TO ALLOW THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTION HOUSE AT 780 BAY
BOULEVARD FOR A PERIOD OF ONE YEAR AND SUBJECT TO
CONDITIONS / <¿cI /-.-)-
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
ISSUING COASTAL DEVELOPMENT PERMIT NO. 71 FOR THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT 780 BAY
BOUlEVARD FOR A PERIOD OF ONE YEAR AND SUBJECT TO
CONDITIONS
SUBMITTED BY: Community Devel?pment Director ill ~ c.s
r'{
REVIEWED BY: City Manager 1i5\v (4/5ths Vote: Yes- No,lU
BACKGROUND: BAHA International, Inc. proposes to establish an automobile auctionhouse in an
existing industrial building located at 780 Bay Boulevard. Proposed activities include two auctions
per week, smog testing and minor tune-ups related to smog certification, and car washing for
vehicles that will be auctioned,
The proposal is a Class 3, Section 15303 exemption from CEGA, but requires a Redevelopment
Agency Special Land Use Permit and a Coastal Development Permit, The Planning, Building and
Housing, Engineering, Fire, and Police Departments as well as the City Attorney's office have
reviewed the proposal. Staff's concerns are reflected in the list of conditions of approval attached
to the approving resolutions,
RECOMMENDATION: That the Redevelopment Agency and the City Council hold a joint public
hearing, consider public testimony, and that: a) the Redevelopment Agency adopt a resolution
issuing a Special Land Use Permit allowing the establishment of an automobile auction house at
780 Bay Boulevard for a period of one year subject to conditions; and, b) the City Council adopt
a resolution issuing Coastal Development Permit No,71 subject to conditions.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable,
ro- I
Page 2, Item ~ 0.., b
Meeting Date 08-20-96
DISCUSSION:
Proposal
BAHA International proposes to establish the BAHA Auto Trader at 780 Bay Boulevard for the
purpose of auctioning used automobiles for a one year period. During the one year time frame,
the applicant will evaluate the success of the use and then will make the decision whether or not
to construct a permanent facility on adjacent property.
BAHA International purchases used automobiles from auto dealers, auto rental agencies,
government agencies, and other bulk sellers, The automobiles are shipped to the site and stored
until auctioned to individual buyers,
The applicant has indicated that they plan to hold two auctions per week, one on Wednesday
evenings between 7:00 p,m, and 9:00 p.m. and one on Saturday afternoons between 12:00 noon
and 3:00 p,m. A two to three hour preview will occur just prior to each auction, During the
preview, the vehicles will be parked in the outside parking lot and will be available for inspection
by the public,
In addition to the activities related to the auctions, eight to ten employees will be present on-site
between 8:00 a.m. and 5:00 p,m, daily to conduct administrative tasks and accounting services.
Staff recommends that a security guard be present on-site during hours when the facility is open
to the public and financial transactions are being conducted,
Other activities proposed include smog checks on vehicles to be auctioned, minor tune-ups on
about 10% of the vehicles to bring them into compliance with smog requirements, and car
washing of vehicles to be auctioned. These activities will be restricted to the 56 ft, X 170 ft,
walled warehouse yard located at the south end of the building, The warehouse yard will also
accommodate the loading and unloading of vehicles.
Existina Facilities
The existing building consists of 99,992 sq. ft. of floor area. Currently, the U.S. Postal Service
occupies 28,244 sq. ft. of office space on the second floor of the building, Approximately 26,000
sq. ft, of office space is vacant (although the City is currently processing a proposal for 19,500
sq. ft. of the office area). BAHA International proposes to use the balance of the building which
consists of a 45,725 warehouse,
Approximately 15,000 sq, ft, of the warehouse is leased by BAHA and will be used to hold the
auctions and will accommodate office staff. The additional 30,000 sq, ft. of warehouse will be
used to store the vehicles to be auctioned, This area is not leased by BAHA International;
however, the property owner has indicated that the space is available for BAHA International to
use for the one year period. Staff recommends that all vehicles to be auctioned be required to be
stored inside the building with the exception of preview and auction periods, If the cars cannot
be stored inside the building, then, it is recommended that the special land use permit and coastal
development permit not be approved or in the event that the inside storage area is no longer
available for vehicle storage, the permits be revoked.
~ -d.-
-
Page 3, Item..b. a. I b
Meeting Date 08,20-96
The site has 360 vehicle parking spaces and an additional 105 vehicle parking spaces are located
on the property adjacent to the south, The Postal Service requires 250 spaces which leaves a
balance of 110 unused spaces on the site.
The applicant anticipates that each auction will consist of about 100 vehicles and that each
auction will draw about 100 customers, Two hundred vehicle parking spaces have been
designated near the south end of the existing building for the project, (Spaces will accommodate
100 vehicles for preview and 100 customers simultaneously.) Ninety-five (95) of the spaces are
located on-site and 105 spaces are located on the adjacent parcel to the south. Since the adjacent
parking spaces are located on a separate legal parcel, a reciprocal agreement will be required to
ensure that the spaces will be available to the auctionhouse for the one year period, (See Exhibit
A,)
land Use and Coastal Development Permit FindinQs
Based on the following findings and subject to conditions, the proposed project has been found
to be consistent with the intent of the Bayfront Redevelopment Project and the policies of the
certified Chula Vista local Coastal Program:
1. The project will be housed within an existing building located along Bay Boulevard which
is located approximately one-third of a mile from the nearest Chula Vista Bayfront gateway
and about one-half mile from the nearest coastal water. The project will be required to
provide vehicle parking adequate for the use; therefore, no traffic or parking related impact
to coastal access or coastal recreational resources is anticipated,
2, The proposed land use is not specifically allowed in the Bayfront Specific Plan; however
it is not prohibited, The use, as conditioned, is of the same general character as those
permitted and conditionally permitted in the General Industrial areas of the Chula Vista
Coastal Zone and Chula Vista Bayfront, Automobile sales (new), boat sales, and some
automotive repair facilities are allowed by a conditional use permit, The proposed auto
auction, smog certification, minor tune-ups, and car washing activities are similar in nature
to those allowed by the conditional use permit, Based on those similarities and the
conditions of approval which include a provision to allow the use for a temporary period
of one year, it is found that no significant land use related impact will result.
3, All vehicles are required to be stored within the existing building and all smog testing,
limited tune-up work, and car washing are required to take place within a walled yard.
Non-compliance with these requirements will result in the revocation of the Redevelopment
special land use permit and coastal development permit vacation and the requirement to
vacate the use; therefore, no visual or noise impacts will result from these activities.
4. The applicant is prohibited to discharge any substance into the storm drain system and is
required to obtain an Industrial Waste Permit for all activities that will result in discharge
of substance, The applicant is required to comply with all provisions of the Industrial
Waste Permit which will avoid adding pollutants into coastal waters.
t.o ~3
Page 4, Item --.k a,b
Meeting Date 08-20-96
FISCAL IMPACT:
BAHA International projects that their operation will generate approximately $250,000 per week
in gross sales or $1,000,000 per month, Based on the applicant's projections and the City's share
of sales tax revenue (approximately 1 'Yo). the project could generate $10,000 per month in sales
tax revenue,
Staff recommends that the City monitor the sales revenue generated from the project to compare
with the applicant's projections, A condition of approval is recommended that will require the
applicant to submit to the Director of Finance a copy of the monthly remittance report required by
the State Board of Equalization declaring sales tax for the auto auction house. This information will
be kept confidential.
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CHULA VISTA PLANNING DEPARTMENT
LOCATOR ~~, BAHAAUTOAUCTIONS I PROJECT DESCRlPl1ON,
ffi ~:?s, 780 Bay Boulevard Request: Proposal for an auto auction,
V ~, I fiLE NUMBE¡¡,
NORTH No Scale
~- S-
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CITY OF CHULA VISTA
CASH SECURITY FOR COMPLIANCE WITH
CONDITIONS OF APPROVAL
BAHA INTERNATIONAL, INC.
KNOW ALL PERSONS BY THESE PRESENTS, that BAHA International, Inc" a California
Corporation, is held and firmly bound unto the City of Chula Vista, ("City") a municipal corporation,
in the County of San Diego, State of California, and the Redevelopment Agency of the City of Chula
Vista, a political subdivision of the State of California, in the sum of ten thousand dollars, ($10,000)
lawful money of the United States of America, on deposit with the City's Finance Director (per Receipt
No, ~ and to be held by the Director until this obligation becomes void and if any of the conditions
are breached as provided in Redevelopment Agency Resolution No. - and City Council Resolution
No, -, to be applied by the City of Chula Vista to satisfy any damages suffered and pursuant to the
provisions recited hereinafter.
The Condition of the foregoing obligation is such that whereas BAHA International, Inc., has agreed to
Conditions of Approval for the establishment of an automobile auctionhouse at 780 Bay Boulevard to give
security guarantee for the one year duration of a Redevelopment Agency Land Use Permit.
This security shall be conditioned upon BAHA International, Inc. 's full compliance with Conditions of
Approval adopted by the Redevelopment Agency Resolution No, - and City Council Resolution No,
-
BAHA INTERNATIONAL, INC.
Name [please print]
Business Address City State Zip Code
Signature Date
Name [please print]
Business Address City State Zip Code
Signature Date
[m: Ihomelcommdevlhuchanlsecurity ,doc]
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RESOLUTION NO. /5/2
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA ISSUING A SPECIAL LAND USE PERMIT TO ALLOW
THE ESTABLISHMENT OF AN AUTOMOBILE AUCTIONHOUSE AT
780 BAY BOULEVARD FOR A PERIOD OF ONE YEAR AND
SUBJECT TO CONDITIONS
WHEREAS, BAHA International, Inc, has proposed the establishment of an
automobile auction house for one year at 780 Bay Boulevard which is located within the Bayfront
Redevelopment Project Area; and
WHEREAS, the use is temporary and proposed to be located on land designated for
general industrial use; and
WHEREAS, the proposal is a Class 3, Section 15303 exemption from the California
Environmental Quality Act; and
WHEREAS, the Redevelopment Agency of the City of Chula Vista has considered
the proposal and the recommended conditions of approval; and
WHEREAS, Redevelopment Agency is desirous of improving the physical and
economic viability of the Bayfront Redevelopment Project Area.
NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency finds that
based on the following findings that the project, subject to conditions listed in Attachment I, is in
conformance with the intent of the Bayfront Redevelopment Program:
a, The use, as conditioned, is similar to those permitted and conditionally
permitted in the General Industrial land use designation of the Bayfront
Specific Plan. Automobile sales (new). boat sales, and some automotive
repair facilities are allowed by a conditional use permit, The proposed auto
auction, smog certification, minor tune-ups, and car washing activities are
similar in nature to those allowd by the conditional use permit. Based on
those similarities and the conditions of approval which include a provision
to allow the use for a temporary period of one year, it is found that the
proposed use is consistent with the general purpose and intent of the
Bayfront Redevelopment Program,
b, All vehicles are required to be stored within the existing building and all
smog testing, limited tune-up work, and car washing are required to take
place within the walled, exterior warehouse yard. Non-compliance with
these requirements will result in the revocation of the Redevelopment
special land use permit and vacation of the use; therefore, no visual or noise
impacts will result from these activities.
BE IT FURTHER RESOLVED that it is the intention of the Redevelopment Agency
that its adoption of this Resolution is dependent upon the enforceability of each and every term,
provision, and condition herein stated; and, that in the event that anyone or more terms,
provisions, or conditions are determined by a Court of competent jurisdiction to be invalid, illegal,
or unenforceable, this Resolution and the permit shall be deemed to be automatically revoked and
of no further force and effect .ê.!2 initio,
(p- 11-1
BE IT FURTHER RESOLVED that the Redevelopment Agency of the City of Chula
Vista does hereby approve and issue a Special land Use Permit for the period of one year to BAHA
International, Inc, for the establishment of an automobile auctionhouse at 780 Bay Boulevard,
subject to Conditions of Approval listed on Attachment I herein incorporated,
Presented by Approved as to form by
@t!lvilt {;d ~ - ~.
Chris Salomone Ann re r
Director of Community Development Acting Agency Attorney
(0 .-A -- d--
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ATTACHMENT I
Bayfront Special land Use Permit
BAHA International. Inc.
Automobile Auctionhouse
780 Bay Boulevard
August 20,1996
CONDITIONS OF APPROVAL
The following is a list of conditions of approval for a Special land Use Permit for
BAHA International to establish an automobile auctionhouse at 780 Bay Boulevard,
Conditions shall be satisfied prior to the issuance of the Redevelopment Aqencv
Special land Use Permit and occupancv of buildinq and commencement of business,
1. The automobile auctionhouse Special land Use Permit shall be effective for one
year and shall expire on August 19, 1997, This special land use permit is valid
and enforceable only in conjunction with a valid and enforceable coastal
development permit.
2. The approved use shall be limited to the auctioning of automobiles and related
administration and accounting with the exception of certain "Smog checks",
minor tune-ups to meet smog requirements, and car washing described as
follows:
a. Auctions shall be limited to two per week and shall be conducted
between 7;00 p.m. and 9:00 p.m. Wednesday evening and between
12:00 noon and 3:00 p,m, on Saturday afternoon.
b, "Smog checks" and minor vehicle tune-ups to meet smog requirements
to comply with the California vehicle emissions requirements shall be
limited to 10% of vehicles to be sold at on-site auctions, All "Smog"
and tune-up work shall be restricted to the 56 ft. by 170 ft. walled,
exterior area designated as "Warehouse Yard" on the project site plan
located at the south end of the building. Minor tune-up shall not include
the draining of any fluids from the vehicles.
c. All car washing shall be conducted within the walled exterior area
designated as "Warehouse Yard" on the project site plan and shall be
conducted in accordance with requirements of the Clean Water Act as
stipulated by the City of Chula Vista Engineering Department.
d. Automotive maintenance or repair work other than for smog certification
as describe in section 2. b. shall not be conducted on site.
G, -/1 - .3
- ,
3. Actual auctioning of vehicles shall be conducted within the enclosed building,
The only outside activity allowed outside of the building and the warehouse
yard is the previewing of vehicles as conditioned.
4. A maximum of 100 vehicles shall be allowed on-site for auction purposes.
All vehicles to be auctioned shall be stored inside the enclosed building at all
times with the exception of a three-hour preview time period prior to each
auction and during the two to three hour auction periods, In the event that the
inside storaqe area is no lonqer available for vehicle storaqe, this Special land
Use Permit shall be revoked.
5. Parking for 200 vehicles (100 for preview and 100 for customers) shall be
designated on the site by barricades in accordance with the site plan, Exhibit
A. Barricades shall be appropriately placed at least 15 minutes prior to the start
of the preview period and shall be removed no later than 15 minutes following
the end of the auction.
6. A maximum of 20% of parking stalls available to the automobile auctionhouse
may be compact size.
7. All loading/unloading of vehicles shall take place within the walled exterior area
designated as "Warehouse Yard" on the project site plan at the south end of
the building. No loading or unloading shall be permitted to occur in the on-site
parking lots or on the public street. Delivery trucks shall be allowed on-site
during business hours only.
8. Overnight truck parking shall not be allowed on-site or on public streets.
9. The Chula Vista Police Department personnel shall be allowed to enter the
premises at anytime to inspect the premise, vehicles, and company paperwork
and accounting records.
10, Auctioned vehicles shall not be driven off-site unless registered and insured in
accordance with the State of California, County of San Diego, and City of
Chula Vista statutes.
11. Uniform security shall be present on-site during business hours and during
auctions,
12, Garage exhaust ventilation shall be provided per UBC Section 1202.2.7.
13. Idling of vehicle motors shall not be allowed inside the building.
14 Provide a detailed plot plan of automobile storage area depicting parking and
accessways.
15. Provide one-hour fire assembly to east entrance of public viewing area.
G -- ~ - L/
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16. Fire doors assemblies shall be provided with a closing device, (UBC 713.6.1)
17. Provide information to Fire department for type of chemicals used in detailing
and maintenance operations. (Article 80. UFC)
18. Fuel in vehicle fuel tanks shall not exceed 1 gallon for Class 1 flammable liquids
(gasoline, propane). and 5 gallons for Class II combustible liquids (Diesel). (UFC
2505.2.3.2.)
19, Submit plan to Fire Department concerning discharge of flammable,
combustible liquids, and petroleum waste products from steam cleaning,
maintenance operation upon the ground.
20. Applicant shall submit pans to Fire Department which demonstrate an
accountable program to verify fuel status of each car delivered to the Auction
House and the method of fueling/defueling which will limit the fuel to the
required levels.
21. All exterior signs shall be approved by city staff prior to installation The
proliferation of banners, sandwich-type signs, and other temporary signs shall
be prohibited.
22, The entry gates to the warehouse yard shall remain closed when not in use for
loading and unloading of vehicles.
23. No outside sound amplification devices shall be allowed. Any amplification of
public address system utilize within the building shall not be audible outside the
walls of the enclosed building.
24. Floor drains shall be provided within areas that will be used to wash vehicles.
25. Disabled parking spaces shall be provided within reasonable proximity to the
main auction area.
26. All restroom facilities, drinking fountains and public telephones serving the
business must be accessible for use by individuals with disabilities. An
accessible path of travel from the accessible parking spaces to these restrooms
and related facilities must also be provided.
27. Applicant shall assure that repair of auction vehicles does not occur within the
public right-of-way, either before or after vehicles are sold.
28. Applicant shall not discharge wash water from vehicle washing on to the street
or to the storm drain system. Applicant shall obtain an Industrial Waste Permit
allowing for the discharge of wash water to the Chula Vista sanitary sewer
system and shall pay all appropriate sewer fees and sewer charges.
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29. Applicant shall deposit with the City of Chula Vista Finance Director a cash
bond in the amount of $10,000 to insure compliance with Conditions of
Approval. Applicant shall agree to forfeit the $10,000 plus accrued interest in
the event that the applicant does not comply with anyone of the conditions of
approval. In the case that the applicant violates a second condition of
approval, the Redevelopment Agency shall withdraw approval of the Special
land Use Permit and the applicant shall vacate the land use within 30 days of
the Redevelopment Agency's direction.
30. A reciprocal agreement for parking rights for 105 parking spaces located on lot
7, Parcel Map 13581 shall be executed by the applicant and recorded with the
County Recorder. Said agreement shall be approved by City Attorney prior to
recordation,
31. Applicant shall submit to the Chula Vista Finance Director a copy of the
monthly remittance report required by the State Board of Equalization declaring
sales tax for the auto auctionhouse. This information will be kept confidential.
32. Applicant shall and does hereby agree to indemnify, protect, defend and hold
harmless Agency, its Agency Members, officers, employees, agents and
representatives, from and against any and all liabilities, losses, damages,
demands, claims and costs, including court costs and attorneys' fees
(collectively, "liabilities") incurred by the Agency arising, directly or indirectly,
from (a) Agency's approval and issuance of this Special land Use Permit, (b)
Agency's approval or issuance of any other permit or action, whether
discretionary or non-discretionary, in connection with the use contemplated
herein, and (c) applicant's installation and operation of the facility permitted
hereby pursuant to these Conditions of Approval. Applicant shall acknowledge
its agreement to this provision by executing a copy of this Special land Use
Permit where indicated below. Applicant's compliance with this provision is an
express condition of the Special land Use Permit and this provision shall be
binding on any and all of applicant's successors and assigns.
33, Except to the extent otherwise provided in this Special land Use Permit, the
burdens of this Special land Use Permit bind, and the benefits of this Special
land Use Permit inure, to the Agency's and Applicant's successors-in-interest
and shall run with the land.
The property owner and the applicant shall execute this document by signing the lines
provided, said execution indicating that the property owner and applicant have each
read, understand, and agrees to the conditions contained herein, Upon execution, this
document shall be recorded with the County Clerk of the County of San Diego, at the
sole expense of the property owner and/or applicant, and a signed, stamped copy
returned to the Secretary to the Redevelopment Agency with a copy to the
Community Development Department, Failure to return a signed and stamped copy
of this recorded document within thirty days of recordation to the Secretary to the
Redevelopment Agency shall indicate the property owner's/applicant's desire that the
to-A- ~o
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auto auctionhouse, and the corresponding application for the Special Land Use Permit
be held in abeyance without approval.
Owner's Agent Applicant;
Greenwald Company BAHA International, Inc.
Bennet B. Greenwald, President Khalil Baha, President
Leslie C. Cusworth, Vice President Saied Baha, Vice President
Date Date
[(buGhanll M,\HOME\COMMDEV\RESOS\bah"a.'es (August 15, 1996 [2,OOpmll
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TE PLAN CH\JLA VISTA, CA 9191Ø C",,?o. RDb..,.
BAHA AUTO TRAr;>cp..s
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RESOLUTION NO. / 'íi4;) d--
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
ISSUING COASTAL DEVELOPMENT PERMIT NO, 71 FOR THE
ESTABLISHMENT OF AN AUTOMOBILE AUCTION HOUSE AT 780 BAY
BOULEVARD FOR A PERIOD OF ONE YEAR AND SUBJECT TO
CONDITIONS
WHEREAS, the City of Chula Vista Local Coastal Program (LCP) has been certified by
the California Coastal Commission; and,
WHEREAS, said LCP includes Coastal Development procedures determined by the
Commission to be legally adequate for the issuance of Coastal Development Permits and the City of
Chula Vista has assumed permit authority of the Chula Vista Coastal Zone; and,
WHEREAS, a public hearing was duly noticed and conducted on August 29, 1996 in
accordance with said procedures; and,
WHEREAS, the City Council of the City of Chula Vista, as "approving authority", has
reviewed the BAHA International, Inc., proposal to establish an automobile auction house at 780 Bay
Boulevard,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista as
follows:
The City Council of the City of Chula Vista finds in accordance with Section 13311 of Title 14 of the
California Administrative Code that the BAHA International, Inc" proposal to establish an automobile
auctionhouse at 780 Bay Boulevard subject to conditions listed in Attachment I, is in conformance with
the Chula Vista certified Local Coastal Program because:
a, The project will be housed within an existing building located along Bay
Boulevard which is located approximately one-third of a mile from the nearest
Chula Vista Bayfront gateway and about one-half mile from the nearest coastal
water. The project will be required to provide on-site vehicle parking adequate
for the use; therefore, no traffic or parking related impact to coastal access or
coastal recreational resources is anticipated.
b, The proposed land use is not specifically allowed in the Bayfront Specific Plan;
however it is not prohibited. The use, as conditioned, is of the same general
character as those permitted and conditionally permitted in the General
Industrial areas of the Chula Vista Coastal Zone and Chula Vista Bayfront,
Automobile sales (new), boat sales, and some automotive repair facilities are
allowed by a conditional use permit. The proposed auto auction, smog
certification, minor tune-ups, and car washing activities are similar in nature to
those allowed by the conditional use permit, Based on those similarities and
the conditions of approval which include a provision to allow the use for a
temporary period of one year, it is found that no significant land use related
impact will result,
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c, All vehicles are required to be stored within the existing building and all smog
testing, limited tune-up work, and car washing are required to take place within
the walled, exterior warehouse yard. Non-compliance with these requirements
will result in the revocation of the Redevelopment special land use permit and
and Coastal Development Permit and the requirement to vacate the use;
therefore, no visual or noise impacts will result from these activities,
d, The applicant is prohibited to discharge any substance into the storm drain
system and is required to obtain an Industrial Waste Permit for all activities that
will result in discharge of substance. The applicant is required to comply with
all provisions of the Industrial Waste Permit which will avoid adding pollutants
into coastal waters,
and, statewide and regional interpretive guidelines have been reviewed, and the proposed project has
been found to be in conformance with the public access and public recreational policies of Chapter 3
of the Public Resources Code in accordance with Section 30604(c) of the Public Resources Code.
BE IT FURTHER RESOLVED that it is the intention of the City Council that its adoption
of this Resolution is dependent upon the enforceability of each and every term, provision, and condition
herein stated; and that in the event that anyone or more terms, provisions, or conditions are
determined by a Court of competent jurisdiction to be invalid, illegal, or unenforceable, this Resolution
and the permit shall be deemed to be automatically revoked and of no further force and effect ;ill, initio,
BE IT FURTHER RESOLVED that the City Council hereby approves Coastal Development
Permit No, 71, subject to conditions listed in Attachment I.
Presented by Approved as to form by
Chris Salomone Ann Moore
Director of Community Development Acting City Attorney
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ATTACHMENT I
Coastal Development Permit No, 71
BAHA International, Inc.
Automobile Auctionhouse
7BO Bay Boulevard
August 20, 1996
CONDITIONS OF APPROVAL
The following is a list of conditions of approval for Coastal Development Permit #71
for BAHA International to establish an automobile auction house at 780 Bay Boulevard.
Conditions shall be satisfied prior to the issuance of Coastal Development Permit No.
71 and occupancv of buildina and commencement of business.
1. The automobile auctionhouse Coastal Development Permit shall be effective for
one year and shall expire on August 19, 1997. Coastal Development Permit
No. 71 is valid and enforceable only in conjunction with a valid and enforceable
Redevelopment special land use permit.
2. The approved use shall be limited to the auctioning of automobiles and related
administration and accounting with the exception of certain "Smog checks",
minor tune-ups to meet smog requirements, and car washing described as
follows:
a. Auctions shall be limited to two per week and shall be conducted
between 7;00 p.m. and 9;00 p.m. Wednesday evening and between
12:00 noon and 3;00 p.m. on Saturday afternoon.
b. "Smog checks" and minor vehicle tune-ups to meet smog requirements
to comply with the California vehicle emissions requirements shall be
limited to 10% of vehicles to be sold at on-site auctions, All "Smog"
and tune-up work shall be restricted to the 56 ft. by 170 ft. walled,
exterior area designated as "Warehouse Yard" on the project site plan
located at the south end of the building. Minor tune-up shall not include
the draining of any fluids from the vehicles.
c. All car washing shall be conducted within the walled exterior area
designated as "Warehouse Yard" on the project site plan and shall be
conducted in accordance with requirements of the Clean Water Act as
stipulated by the City of Chula Vista Engineering Department.
d. Automotive maintenance or repair work other than for smog certification
as describe in section 2. b. shall not be conducted on site.
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3. Actual auctioning of vehicles shall be conducted within the enclosed building.
The only outside activity allowed outside of the building and the warehouse
yard is the previewing of vehicles as conditioned.
4. A maximum of 100 vehicles shall be allowed on-site for auction purposes.
All vehicles to be auctioned shall be stored inside the enclosed building at all
times with the exception of a three-hour preview time period prior to each
auction and during the two to three hour auction periods. In the event that the
inside storaqe area is no lonqer available for vehicle storaqe, this Coastal
Development Permit shall be revoked,
5. Parking for 200 vehicles (100 for preview and 100 for customers) shall be
designated on the site by barricades in accordance with the site plan, Exhibit
A. Barricades shall be appropriately placed at least 15 minutes prior to the start
of the preview period and shall be removed no later than 15 minutes following
the end of the auction.
6. A maximum of 20% of parking stalls available to the automobile auctionhouse
may be compact size.
7. All loading/unloading of vehicles shall take place within the walled exterior area
designated as "Warehouse Yard" on the project site plan at the south end of
the building. No loading or unloading shall be permitted to occur in the on-site
parking lots or on the public street. Delivery trucks shall be allowed on-site
during business hours only.
8. Overnight truck parking shall not be allowed on-site or on public streets.
9. The Chula Vista Police Department personnel shall be allowed to enter the
premises at anytime to inspect the premise, vehicles, and company paperwork
and accounting records.
10. Auctioned vehicles shall not be driven off-site unless registered and insured in
accordance with the State of California, County of San Diego, and City of
Chula Vista statutes.
11. Uniform security shall be present on-site during business hours and during
auctions.
12. Garage exhaust ventilation shall be provided per UBC Section 1202.2,7.
13. Idling of vehicle motors shall not be allowed inside the building.
14 Provide a detailed plot plan of automobile storage area depicting parking and
accessways.
15, Provide one-hour fire assembly to east entrance of public viewing area.
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16. Fire doors assemblies shall be provided with a closing device. (UBC 713.6.1)
17. Provide information to Fire department for type of chemicals used in detailing
and maintenance operations. (Article 80. UFC)
18. Fuel in vehicle fuel tanks shall not exceed 1 gallon for Class 1 flammable liquids
(gasoline, propane). and 5 gallons for Class II combustible liquids (Diesel). (UFC
2505.2.3,2,)
19, Submit plan to Fire Department concerning discharge of flammable,
combustible liquids, and petroleum waste products from steam cleaning,
maintenance operation upon the ground.
20. Applicant shall submit pans to Fire Department which demonstrate an
accountable program to verify fuel status of each car delivered to the Auction
House and the method of fueling/defueling which will limit the fuel to the
required levels,
21. All exterior signs shall be approved by city staff prior to installation The
proliferation of banners, sandwich-type signs, and other temporary signs shall
be prohibited.
22. The entry gates to the warehouse yard shall remain closed when not in use for
loading and unloading of vehicles.
23. No outside sound amplification devices shall be allowed. Any amplification of
public address system utilize within the building shall not be audible outside the
walls of the enclosed building.
24. Floor drains shall be provided within areas that will be used to wash vehicles,
25. Disabled parking spaces shall be provided within reasonable proximity to the
main auction area.
26. All restroom facilities, drinking fountains and public telephones serving the
business must be accessible for use by individuals with disabilities. An
accessible path of travel from the accessible parking spaces to these restrooms
and related facilities must also be provided.
27. Applicant shall assure that repair of auction vehicles does not occur within the
public right-of-way, either before or after vehicles are sold,
28. Applicant shall not discharge wash water from vehicle washing on to the street
or to the storm drain system. Applicant shall obtain an Industrial Waste Permit
allowing for the discharge of wash water to the Chula Vista sanitary sewer
system and shall pay all appropriate sewer fees and sewer charges.
¿ - 13 - ~-
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29. Applicant shall deposit with the City of Chula Vista Finance Director a cash
bond in the amount of $10,000 to insure compliance with Conditions of
Approval. Applicant shall agree to forfeit the $10,000 plus accrued interest in
the event that the applicant does not comply with anyone of the conditions of
approval. In the case that the applicant violates a second condition of
approval, the Redevelopment Agency shall withdraw approval of the Special
land Use Permit and the applicant shall vacate the land use within 30 days of
the Redevelopment Agency's direction.
30. A reciprocal agreement for parking rights for 105 parking spaces located on lot
7, Parcel Map 13581 shall be executed by the applicant and recorded with the
County Recorder. Said agreement shall be approved by City Attorney prior to
recordation,
31. Applicant shall submit to the Chula Vista Finance Director a copy of the
monthly remittance report required by the State Board of Equalization declaring
sales tax for the auto auctionhouse. This information will be kept confidential.
32. Applicant shall and does hereby agree to indemnify, protect, defend and hold
harmless City, its Council Members, officers, employees, agents and
representatives, from and against any and all liabilities, losses, damages,
demands, claims and costs, including court costs and attorneys' fees
(collectively, "liabilities") incurred by the City arising, directly or indirectly, from
(a) City's approval and issuance of this Coastal Development Permit, (b) City's
approval or issuance of any other permit or action, whether discretionary or
non-discretionary, in connection with the use contemplated herein, and (c)
applicant's installation and operation of the facility permitted hereby pursuant
to these Conditions of Approval. Applicant shall acknowledge its agreement
to this provision by executing a copy of this Coastal Development Permit where
indicated below. Applicant's compliance with this provision is an express
condition of the Coastal Development Permit and this provision shall be binding
on any and all of applicant's successors and assigns.
33. Except to the extent otherwise provided in this Coastal Development Permit,
the burdens of this Coastal Development Permit bind, and the benefits of this
Coastal Development Permit inure, to the City's and Applicant's successors-in-
interest and shall run with the land.
The property owner and the applicant shall execute this document by signing the lines
provided, said execution indicating that the property owner and applicant have each
read, understand, and agrees to the conditions contained herein. Upon execution, this
document shall be recorded with the County Clerk of the County of San Diego, at the
sole expense of the property owner and/or applicant, and a signed, stamped copy
returned to the City Clerk with a copy to the Community Development Department.
Failure to return a signed and stamped copy of this recorded document within thirty
days of recordation to the City Clerk shall indicate the property owner's/applicant's
to -- 13 -ç,
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desire that the auto auction house, and the corresponding application for the Coastal
Development Permit be held in abeyance without approval.
Owner's Agent: Applicant:
Greenwald Company BAHA International, Inc.
Bennet B. Greenwald, President Khalil Baha, President
Leslie C. Cusworth, Vice President Saied Baha, Vice President
Date Date
IIBUCHANII M,\HOME\COMMDEV\RESOS\BAHACC,RES (August 15, 1996 (2,O6pmll
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