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HomeMy WebLinkAboutRDA Packet 1995/06/13 (2) Tuesday, June 13, 1995 Council Conference Room 6:00 p.m. City Hall Building (immediarely following the City Council meeting) Special Meeting of the Redeveloomeut Ageucv of the City of Chula Vista CALL TO ORDER 1. ROLL CALL: Members Alevy -' Moot -' Padilla -, Rindone -' and Chairman Horton - ORAL COMMUNICATIONS This is an opportunity for the general public to oddress 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 oddress for record purposes and follow up action. Your time is limited to three minutes per speaker. OTHER BUSINESS 2. DIRECTOR'S REPORT(S) "I declare under penalty of perjury that I am em~lo\led by the City of Chula Vista in the Commun'ty De'¡elopment Department and that I posted 3. CHAIRMAN'S REPORT(S) this Agenda/Nc,tice on the Bulletin Board at the Public Services Building and at City Hal~ 4. MEMBER COMMENTS DATE:~SIGNED.ß~~. 'ï/i .. - "¡:15p.~. ADJOURNMENT The meeting will adjourn to (a closed session and thence to) the Regular Redevelopment Agency MeeÛllg on June 20, 1995 at 6:00 p.m., innnediately 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 items 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 of Ji!!gJ 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 Ji!!gJ 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. ,--- -.- Agenda -2- June 13, 1995 5. CONFERENCE WITH LEGAL COUNSEL REGARDING: Anticipated litigation pursuant to Government Code Section 54956.9(b) Chula Vista Auto Park developers - South Bay Chevrolet and Fuller Ford/Honda/Kia v. City/Redevelopment Agency based on statements made iu June 8th letter from Auto Park developers to staff 6. REPORT OF ACTIONS TAKEN IN CLOSED SESSION ...... COMPLIANCE WITH THE 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 Telecommunications Devices for the Deaf (TDD) at 619.585.5647. California Relay Service is also avrolable for the hearing improred. [c:\ WP51 IAGENCYlAGENDAS\O6-13-95 .AG2] - ,.-- MEMORANDUM June 12, 1995 FROM: The Honorable Chairman and Agency ~em~~ John D. Goss, Executive Director ~ r. \ Chris Salomone, Community Development Director TO: VIA: SUBJECT: Staff Response to Chula Vista Auto Park Developers Letter Dated 6/8/95 Staff received the attached letter from the Auto Park Developers late Thursday afternoon (June 8, 1995) describing issues they wish to present to the Agency on June 13, 1995. A special meeting of the Agency has been noticed for open and closed sessions for that date to allow discussion of the issues. Staff's response to the major issues is covered in the attached Agenda Report originally dated February 14, 1995 and the additional staff report (originally dated May 2, 1995). Additional information is presented below on issues not fully covered in the Agenda Report. Widenina of Otav Vallev Road: The widening and reconstruction of Otay Valley Road was supposed to be completed early this year. However, this work has been delayed due to failure to perform on the part of the general contractor, Granite Construction, and delays by the utility companies in relocating their facilities. The City is currently charging Granite liquidated damages of $150/day for failure to complete the work on time. Total damages charged to date are $90,000. Completion of the roadwork is currently anticipated by mid September. Control of Toxic Waste: The stockpiled contaminated soils lie on the Shinohara remainder parcel. The Shinoharas have been working with Woodward Clyde consultants, local and State regulatory agencies to properly maintain the stockpile, declassify the material and obtain permission to transport it to a non-hazardous landfill site. Although Woodwood Clyde has completed a considerable amount of testing under direction of the State Department of Health, they have not as yet been able to achieve the necessary clearances from the Department for removal of the material. Under the Loan Agreement with the Agency, the Shinoharas have until August 1997 to remove the contaminated materials from the site and complete the grading work. If they do not complete this work, the Agency has the authority to step in and complete it, and to foreclose on other property owned by the Shinoharas to fund the work. The stockpiled material was originally covered with a plastic sheeting material which was difficult to maintain. As an alternative to the use of plastic, local regulatory agencies recently approved the spraying of the stockpile with a substance used by CalTrans which encrusts the surface to prevent runoff and dust from blowing. Agency staff periodically check the stockpile. To the best of staff's knowledge, current maintenance of the -/- The Honorable Chairman and Agency Members Subject: Staff Response to C.V. Auto Park Developers Letter dated 6/8/95 June 12, 1995 Page 2 stockpile complies with the requirements of the local regulatory agencies which have the responsibility and authority to regulate contaminated properties. Reduction of Sales Tax Base and Escalator: Please see Agency Agenda Reports (originally dated 2/14/95 and 5/2/95) attached hereto. Failure of the ADencv to Obtain a Prooer Aooraisal for Assessment District Bonds: City staff followed authorized procedures to establish Assessment District 92-2 for construction of internal streets and the sewer pump station for the Auto Park. Although the Auto Park Developers insisted on the inclusion of approximately $730,000 for acquisition of right-of-way for Auto Park Drive and the extension of Brandywine Avenue (right-of-way is most often dedicated), bond proceeds were limited to 33% of the appraised valuation of the property and were not sufficient to cover this cost. The appraised value was based upon vacant land improved with roads and utilities, but without building improvements. For more information, please see the Agency Agenda Reports (originally dated 2/14/95 5/2/95) attached hereto. ADencv Purchase of Parcel 1: Please see Agency Agenda Reports (originally dated 2/14/95 and 5/2/95) attached hereto. Rename Otav Vallev Road to Auto Park Drive: This request has been previously considered by staff. In light of opposition from property owners and future developers who would be impacted, it was determined that it was preferable to permit a readerboard sign at 1-805 and Otay Valley Road. However, at this time, with the possibility of expansion of the Auto Park to the east, and the recent loss of several businesses on Otay Valley Road, it may be appropriate, with the Agency's concurrence, to revisit the issue of name change. Staff is currently processing appropriate code revisions to allow for a readerboard sign at 1-805 and Otay Valley Road. The expense of installing and operating the sign has precluded the Auto Park Developers from proceeding with installation at this time. There is currently an interim billboard sign at the location of the proposed readerboard sign. If the Agency chooses to go forward with a street name change, it may no longer be necessary to install the readerboard sign which is generally contrary to current City sign policies. Reimbursement to Auto Park Develooers: As the Agency is aware, the Agency has provided substantial subsidy to the Auto Park through purchase of the Broadway dealership properties and the loan to the Shinoharas to complete the grading and removal of contaminated soils from the new Ford and Chevrolet --;2- The Honorable Chairman and Agency Members Subject: Staff Response to C. V. Auto Park Developers Letter dated 6/8/95 June 12, 1995 Page 3 dealership sites. The Agency has also spent considerable staff time and consultant expense on this project. The discussion to relocate the Auto Park to East H Street was based upon environmental problems on the Otay Valley Road site and had the full concurrence and support of the Auto Park Developers at the time. Every effort was made to mitigate community concerns which finally necessitated the return of the project to Otay Valley Road. Recommendation of Consultant: At the time that the City of Chula Vista began to investigate the possibility of developing an auto sales park in the late 1980's, Jim Salter was working for Lee White Toyota of Lemon Grove. Mr. Salter was invited to speak with the Auto Park Task Force about developing an auto park, and Lee White addressed the City Council on this issue. Through this process, Mr. Salter was introduced to Doug Fuller and Dave Ordway as well as City staff. Mr. Salter was eventually hired by Mssrs. Fuller and Ordway to help them put together the auto park. City staff did not specifically recommend Mr. Salter to the auto park developers. Mr. Salter worked for the auto park developers continuously through 1994. [BBIC:IWP51IAGENCYlMEMOS\1NF09504.MEMJ -.3 - This page blank! -tl- June 8, 1995 Mr. Sid W. Morris Assistant City Manager City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 Mr. Fred Kassman Department of Community Development City of Chula Vista 263 Fig Avenue Chula Vista, CA 91910 Re: Chula Vista Auto Park - South Bay Chevrolet and Fuller FordlHondalKia Gentlemen: This letter is a follow-up to the letter of March 17, 1995, from John 1. Abbene to Fred Kassman and the letters of Mr. Abbene to Sid W. Morris dated January 30, regarding the Chula Vista Auto Park. The Report submitted to the Redevelopment Agency by the Community Development Director in response to those letters indicates that the City of Chula Vista and its Redevelopment Agency do not fully appreciate either the damages which we, the developers of the Chula Vista Auto Park, have suffered in connection with the development of that Auto Park or the nature and extent of the responsibility of the City of Chula Vista and its Redevelopment Agency for those damages. This letter will outline those damages (attempting not to reiterate extensively those points already ably raised by Mr. Abbene in his letters) and requests the City Council of Chula Vista to provide certain specific relief to the developers. We respectfully request that these requests be presented to the City Council at its meeting on Tuesday, June 13, 1995. We hope that the issues raised herein can be resolved to the mutual satisfaction of the developers and the City, but we do wish to emphasize that the nature and extent of the damages suffered by the developers as a result of the City's acts and failure to act are of such severity that if the issues cannot be resolved amicably, litigation with the City will be our only remaining recourse. Issues There are five (5) issues we wish to present to the City Council at this time: A. The widening of Otay Valley Road in accordance with the DDA and the City's contrac- tual obligations to the undersigned. -J- 104465 000003\67331.2 Mr. Sid W. Morris Mr. Fred Kassman June 8, 1995 Page 2 B. The failure to maintain adequate control over the toxic waste stored adjacent to the parcels owned by us, and the failure of the City to remediate, or cause the remediation of, that Holding Site in a timely and reasonable manner. Subsumed in this issue is the additional issue of the decisions of the City to move our businesses (and create the Auto Park) to Otay Valley Road, then to H Street, and then back to Otay Valley Road, and the consequent damages suffered by us. C. The establishment of an improper Base Sales Tax amount to be used for the measure- ment of the incentive payments payable to us as the developers. D. The failure of the City of Chula Vista to cause a proper appraisal of the property before selling the redevelopment bonds a significant portion of the proceeds of which were to go to us as the developers. Requested Actions and Reasons Therefor. We request that the City of Chula Vista take the following actions to mItigate and compensate the damages suffered by us as a result of the described City actions: 1. Complete the widening of Otay Valley by July 1, 1995, including installation of signal lights at the Interstate 805 offramps; install electronic reader boards on 1-805 between Otay Valley Road and Palm offramps, and on 1-905 and 1-5; change the name of Otay Valley Road to Auto Park Way or Auto Center Drive. a. The failure to complete the widening of the road has severely impacted our ability to attract customers to the Auto Park and to interest another qualified user for Parcel I, though there are other significant reasons, discussed below, for the inability to interest qualified users in Parcell. b. Identification of the Auto Park location readily accessible to potential customers is critical to the success of the Auto Park, and its location currently remains obscure in the eyes of the consumer public for several reasons: 1. Two exits prior to Otay Valley Road is the Otay Lakes Road exit, creat- ing obvious confusion. 11. Directly south is Otay Mesa - to which people seeking the Auto Park travel in error due to lack of signage and the confusing name. --fo- 104465000003\67331.2 Mr. Sid W. Morris Mr. Fred Kassman June 8, 1995 Page 3 111. The public perceives the Park to be in Otay Mesa - which is the City of San Diego and has the connotation of being on the border, to which some potential customers do not desire to go. IV. The continued use of "Otay" promotes a name that is traditionally associ- ated with the City of San Diego, which not only creates confusion but is inconsistent with the interests of the City of Chula Vista; c. The name change will help identify the Auto Park location due to signage that will be in place at the intersection of that road and new 1-125 when it is com- pleted. 2. Complete remediation of the Holding Site by August 31, 1995; pending such completion, properly cover and maintain such site to avoid the blowing of contaminated soil particles onto our property in the Auto Park; purchase Parcell from Mr. Reneau for $1,100,000. 104465 000003\67331.2 a. The size of Parcel I was originally 4.0 acres. Due to the City's folly in passing several million dollars through escrow to the seller (Mr. Shinohara) before either having title to the property or completing reasonable due diligence as to the accuracy of the seller's representations as to the absence of toxic waste on the property or the prior use of the property as a dump site, the City found itself in a difficult situation. It could complete the transaction, but at that point it would owe insufficient funds to the seller to compensate the City for the costs of remediation found to be necessary when the City found the representations to be false (which funds would have permitted the City to complete the remediation at seller's expense), and it did not believe it would easily recover that cost from the seller due to his precarious financial condition. Alternatively, it could terminate the purchase agreement but lose the funds it had passed through escrow (the seller having reportedly spent them upon receipt). The resulting compromise by us as "developers" was entered into to accommodate the City and avoid embarrassment to the City and the Agency for its lack of good business practices in connection with the acquisition of the Shinohara property (parcel I). The City and we knew full well that the smaller Parcel I (2.5 acres) was inadequate for a dealership and that the remaining 1.5 acres of the Holding Site was necessary to make Parcel I usable for its intended purpose. Thus the City agreed it would cause the owner, Shinohara, to clean up the Holding Site immediately (rather than four years after Closing), although the documents did not impose the formal obligation on the City to do so and we agreed to purchase the Holding Site once cleaned up, so South Bay would have a usable parcel. --7- Mr. Sid W. Morris Mr. Fred Kassman June 8, 1995 Page 4 While it may be said that we could have refused to close the transactions rather than do so and accept the property without the cleaned up Holding Site, we were economically compelled to go forward. The City first proposed the development of the Auto Park at its current site, at Otay Valley Road. However, the City subsequently decided to move the site to H Street. We agreed and expended approximately $250,000 in design, development planning, and engineering, legal, consulting, traffic analysis expenses, for the move to H Street. After many months, the City Planning Commission voted unanimously to drop the Auto Park location move to H Street. The stated reason was the objections of the neighbors to the H Street site that the Auto Park would create too much added traffic. Yet, less than one year later, the H Street site was approved as the location of a regional retail shopping center which brings many times the traffic flow to the area than the Auto Park ever could have. This project was approved over the objections of the same residents who objected to the Auto Park Project at H Street. Thus, after many years and extensive expenses, including those incurred in the site location changes described above, we theoretically had a choice not to proceed without the cleaned up Holding Site, but we were economically compelled to proceed; the alternative, after expending huge sums in completely negotiating the Disposition and Development Agreement (DDA), and in related architecture, engineering, attorney, and consultants fees, only to find after such extensive work that the site was contaminated, left us little choice in the matter. We had to go forward on the conditions presented to us. However, in the absence of the City's assurances that the Holding Site would be remediated quickly, we would never have agreed to close the transaction until the remediation was completed. The City's delay in doing so has damaged our businesses in that we (and the City) believe that our business will increase as the number of dealerships in the Auto Park increases, and such increase is precluded on Parcel I in its current state for the reasons stated. The City's delay has also put South Bay Chevrolet in a precarious position, having used that Parcel as collateral for a loan to pay dealership obligations, which loan the owner fully expected could and would be retired by now from proceeds of the sale or use of Parcel I. As a result, the Parcel 1 owner (Mr. Reneau) is in default on that loan and will be forced to sell the property at a substantial discount from what it would be worth if he were in a position to also deliver to the buyer of Parcel I the cleaned up Holding Site (which Messrs. Reneau and Fuller have the right to purchase once cleaned up), or lose the property in foreclosure, either of which is to the substantial economic damage to South Bay and its owners. We are thus entitled to have the City complete its obligations promptly and, as compensation to us for the damages 1044650000C>3\67331.2 -f- Mr. Sid W. Morris Mr. Fred Kassman June 8, 1995 Page 5 caused to us by the City's failures in this regard, to have the City purchase the property (Parcel I) for the price stated above. b. We and our employees and customers are entitled to have our adjacent property free of the toxic waste being visited on that property by the sloppy and inade- quate manner in which the City is currently supervising the management of the Holding Site. We are concerned that one or more people may be injured, perhaps irreparably, by such contamination. The City should therefor proceed with all due haste to clean up the site and to supervise its management properly pending such cleanup. 3. Amend the DDA to provide for a lower Base Sales Tax Amount to be used for the measurement of the incentive payments payable to the developers, and defer and reduce scheduled increases in the Base Sales Tax Amount. a. The concept of the sales tax incentive embodied in the DDA arose from the difference between the price at which we were willing to purchase the property the Agency had (already) committed to purchase from Mr. Shinohara and the amount at which the City was willing to sell that property. We were willing to pay $4.50 per square foot (pst) for the property, while the City was unwilling to sell for less than $6.91 psf. The payment of the incentives was to provide a mechanism for the repayment to us of the difference between the finally agreed upon purchase price, $6.91 psf, and the "real" purchase price of $4.50 psf. The City agreed in principle to repay to us the difference between the $6.91 and the $4.50 psf, but only to do so over time and as we generated sales from the new Auto Park. The incentive payment approach was designed to pay us this difference as their business (exclusive of Fuller Honda sales), and the City's sales tax revenues, increased over their then-current historic levels. It was thus intended to cause the additional approximately $1,900,000 to be repaid as the revenues of the Chevrolet and Ford businesses, exclusive of the taxable sales of Hondas, increased, although the City has no firm obligation to pay the $1,900,000 if the sales did not increase over those historic levels. The repayment was to be made within six years and was limited to the $1,900,000 difference. (There was an additional incentive to be payable over the succeeding nine years at one half the original rate.) b. In establishing the Base Sales Tax amounts for the incentive payment calculation, the City mistakenly used a number far higher than we had achieved in any year since 1990. Moreover, the City had agreed not to include the sales of Fuller Honda in the reference point in determining the Base Sales Tax Amount; the 104465000003\67331.2 -- 7 ---- Mr. Sid W. Morris Mr. Fred Kassman June 8, 1995 Page 6 reference was only to be to taxable sales of Fuller Ford and South Bay Chevrolet, not Fuller Honda. By setting the Base Sales Tax amount at $550,000, the City set up a payment schedule which was almost certain to defeat its obligation to us, since that number was far beyond any reasonable expectations or performance of the dealerships for many years to come. We never knowingly agreed to the use of any such artificially high Base Amount and expected that the Base Amount would be with reference to the dealerships' actual performance, and that the incentives would be paid as they exceeded what had been our performance before our movement to the Auto Park. We were never informed of the relation of the Base Sales Tax Amount to the average annual taxable sales until after the DDA had been executed and the property sold to the City. 1. The City recommended a consultant, James Salter, to work with us as developers in the process of negotiating the DDA and constructing the improvements on the Auto Park property to which we were moving at the request of the City. We believe that the consultant misled and failed to inform us of salient and important points in the DDA (such as the derivation of the Base Sales Tax amount), and we believe that the City should have known of the consultant's lack of diligence in such matters (since the City had worked with the consultant previously), and that there may well have been a conflict of interest on the part of the consultant due to his allegiance to the City for subsequent referrals of business oppor- tunities. c. The actual taxable sales for Fuller Ford/South Bay Chevrolet for 1991 and 1992, the last two full years before the Closing of the transactions, averaged $33,309,175, which generated average annual sales taxes of approximately $340,000, far less than the $550,000 used by the City as the Base Sales Tax Amount. d. The Base Sales Tax amount should be reduced to $340,000, the (rounded) average referred to above. e. In recognition of the lost opportunities to generate more sales as a result of the conduct of the City discussed herein and in Mr. Abbene's prior letters, the escalation of the Base Sales Tax Amount by 6% beginning on July 1, 1995 should be (a) reduced to 2% and (b) deferred until July 1, 1996. 4. Increase the maximum payback obligation under the Sales Tax incentive provisions of the DDA from $1,900,000 to $2,650,000. The City permitted the bonds to be sold based 104465 000003\67331.2 - II) - Mr. Sid W. Morris Mr. Fred Kassman June 8, 1995 Page 7 on appraisals which valued the land at its value exclusive of the improvements. Had the City been diligent in trying to maximize the bond sales consistent with its obligation to the purchasing public and its obligations to us, it would have either delayed the bond sale until the improvements were complete or used an appraisal which would have been the basis for greater bond sales. Either would have resulted in the receipt by us of all or most of the expected bond sale proceeds of $2,500,000 (in the aggregate) versus the aggregate of $1,300,000 actually received by us. The requested increase in the maxi- mum repayment obligation of the City is designed to compensate us for the $700,000 which would have been available had the bonds been sold as anticipated and represented to developers. 5. Repay the $2,650,000 immediately. Due to the financial difficulties which the City's acts and failure to act have brought upon us and because the City has breached its agreements with us as they relate to the Auto Park development, we believe we are entitled to the acceleration of the City's repayment obligation. 6. Reimburse us for the expenses we incurred in connection with the City's decision to reverse its decision to move the Auto Park site to H Street. These expenses are esti- mated to be $250,000, but the amount of reimbursement would be the verifiable expenses incurred by us in shifting from the Otay Valley Road site to H Street and back again. As indicated, this is a request to place these issues and requests on the agenda of the Chula Vista City Council for its meeting of June 13, 1995. Your prompt attention to, and confirmation of your compliance with, this request will be greatly appreciated. Sincerely, ! , Travis A. Reneau, Owner of _Parcel I ,."- ~-.~ ~~ ' David Ordway President, South ..- P.Mt'. 104465000003\67331.2 -//- This page blank! - 1c2. - REDEVELOPMENT AGENCY AGENDA STATEMENT ITEM TITLE: REPORT Request from Auto Park Financial Assistance c-4- ~ Meeting Dat~te:~~ / .. 6"'~ Developers for Additional IP SUBMITTED BY: Community Development Director REVIEWED BY: Executive Director (4/5ths Vote: Yes _ No-Xl BACKGROUND: On January 17, 1995, the Council approved a conditional payout of $1.3 million to the Auto Park Developers for construction of public streets within the Auto Park under. Assessment District 92-2. On January 19, 1995, staff met with the Auto Park Developers, Messrs. Ordway and Fuller, and their attorney to discuss financial problems associated with a lower assessment alStrict payout than anticipated. As a result of that meeting, the developers made specific requests for financial assistance which were reviewed by staff. Their requests included tha following: Increase the Maximum Agency Repayment Obligation in the Disposition and Development Agreement (DDAI by $783.230; Decrease the Base Sales Tax that the City would receive from $550.000 to $340,000; Decrease the Annual Escalator Factor from 6% to 2% and postpone Its app/ication one year. beglMing July 1, 1996. ,~~ .~ :-~'.'.. :'~'~f''':-'_~':;:_'':-' ',~,a.o~' 'l.._., t:=h',).,.' ;.;<:::-::1 :; _,::1 ::!l,_,..~'l~; .~,~ J~'..~ ,"C', ", '" In addition. the CheVrOletdGaler. expiessed their desire to have the Agency acquire parcel #1 from them due to their lnablrlty to market the parcel. The Redevelopment Agency considered the request from the Auto Park Developers on February 14, 1995 (see Exhibit Al and directed staff to obtain and analyze financial data on dealership operations. Additional information has been received and analyzed. and the following recommendations are offered for consideration. RECOMMENDATION: 1. That the Agency not take any actions to acquire Parcel #1 (vacant land parcell.' :~ .' 2. That the Agency not consider a reduction. in the maximum Agency Repayment Obligation of $1.9 million as statad the Disposition and Development Agreement. 3. That the Agency not consider lowering the Sales Tax Base from $550,000 as stated oj. in the Disposition and Developmel}t Agreement. '...- ~ .-, . ,- 4. That the Agency' direCt staff to . draft an amendment to the Disposition and Development Agreement for further review which will allow an annual review of the escalation factor. taking into account current cost of living factors. 5. That the Agency reduce the current escalator of 6% to 3%. based on current cost of living data. ~'.~ 4-l ~-._>. .. -1 Page 2. Item ~ . Meeting Date: 5,'62./95 S-//('p I BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: In mid January. staff met with the Auto Park Developers. Messrs. Ordway. Reneau and Fuller. and their attorney to discuss their request for additional financial assistance from the Agency due to a shortfall in anticipated reimbursements for public improvements constructed under Assessment District 92-2. The Auto Park Developers specifically requested the following amendments to the terms of the Disposition and Development Agreement: Increase the Maximum Agency Repayment Obligation by $783.230; Decrease the Base Sales Tax that the City would receive from $550.000 to $340.000; Decrease the Annual Escalator Factor from 6% to 2% and postpone its application one year. beginning July 1. 1996. The Developers were requested to submit financial information on current operations of the Auto Park in support of their request. Information pertaining to South Bay Chevrolet including financial rep.orts on operations and copies of loan agreements was received on March 20. 1995 and has been reviewed by staff. No infOrmation was received from Ford. Also received wes a letter from Mr. John Abbene. attorney fcir the Auto Park'developers. requesting that the Agency pwchaSe parcel #1 (vacant land parcel west of Fuller FordIHonda) from South Bay Chevrolet In order to exped"1te the sale and continued operation of the dealership located on parcel 3. The letter from Mr. Abbene is attached as Exhibit B. Based upon this request and review of the financial information. staff has the following comments and recommendations. A glossary further explaining the ODA terms used below is attached as Exhibit C. 1. AQencv Purchase of Parcel #1 ,p ... South Bay Chevrolet purchased Parcel #1. comprising approximately 2.5 acres t1vough the Agency for approximately $750.000 in August 1993. The site is difficult to sell and develop at this time because of its limited size and presence of stockpiled, contaminated soil on the adjoining parcel to the rear of parcel '1. Staff is currently working with the former land owner to remove the stockpile. When that occurs, the rear 1.5 acres can be combined with the front 2.5 acres to provide a more appropriate site for a new auto dealership. South Bay Chevrolet is required to purchase the parcel if and when it is cleaned up at a price equal to the price per square foot price paid for Parcel '1. South Bay Chevrolet was aware of the conditions on the adjoining parcel at the time of purchase of Parcel #1. Assuming it would be possible to sell the parcel in a shorter time frame. South Bay borrowed $1.045.000 from GMAC on this property based upon a rather optimistic appraisal of its value once improvements (roads. sidewalks. sewer. etc.l were installed. This loan is cross collateralized with a $3.9 million loan from GMAC on Parcel #3 for construction of the dealership. The loan is due to be paid off in May of this year, thereby providing an impediment to transfer of this parcel along with sale of the dealership. South Bay has ,- .'fL~' '. - 4- . Page 3, Item l . Meeting Date: ~ i-/i {ph requested that the Agency repurchase this Parcel, for at least the amount of the loan. Based upon the lack of response from the target market, the property appears to be over- encumbered. The problems impeding sale and development of this parcel stem from the discovery of contaminated soils and the need to stockpile them until an economical removal plan is authorized by the regulatory agencies. The decision to financially encumber Parcel #1 was unfortunate. South Bay Chevrolet does not have the funds to retire this debt in May. Assuming the Agency had the will to acquire the site, funds are not currently available. The Agency is, in fact, planning to divest itself of property in order to retire its own debt. Consideration of acquisition of parcel #1 is not be recommended by staff. 2.. Increase the Maximum Aaency Reoavment Obliaatlon The Auto Park Developers were anticipating 'approximately $1 Million more than they will receive in reimbursements for construction of public improvements through Assessment District 92-2. The shortfall is apparently due to miscommunications between the developers and their consultants concerning limitations of the Assessment District. In an effort to make up this shortfall which includes a $730,000 right-of-way acquisition charge, the Developers have requested that the Maximum Agency Repayment Obligation stipulated in the DDA under Incentive Payments (see attached description) be increased by $730,000 to reimburse the Developers for the land cost attributed to public rights-of-way. . ThIs would Increase the Agency's Maximlm Repayment Obligation dwingthe first 81xyeara of operation of the Auto . Park from $1 ~9 mOtion to approXImately $2.630,000. It should be l)Oted thatany amount not repaid dUring' the first six years Is forgiven. . Even though it is unlikely, given current sales volumes, that the Auto Dealers will generate enough sales tax revenue to be repaid the $1.9 Million within six years, it is not recommended that the Maximum Repayment Obligation be increased. The Agency has already provided substantial subsidy for this project through the purchase of the Broadway dea.lership properties and the loan the Shinoharas to relocate the contaminated soils. Further subsidy based upon the lack of vigilance by the Developers and their consultant during the . development process is not justified, In addition, once the Maximum Repayment Obligation is satisfied, or six years elapses (whichever occurs first), the Developers continue to share in ;:,; / the post Incentive payments for a period of nine years, 3, Decrease In Base Sales Tax from $550.000 to $340.000 The Sales Tax Base - sales tax revenues based upon 1988 auto sales from the Ford and "->. Chevrolet dealerships which would accrue to the City before incentive or post incentive payments to the Developers are computed - were set at $550,000 per year under the assumption that auto sales would increase fr.om late 1980's levels.. However, the evidence submitted by South Bay Chevrolet indicates that auto sales in 1994 were considerably lower, and off to an even slower start in 1995. Although Fuller Ford did not submit sales information, the owner of the dealership, Doug Fuller, verified in a telephone conversation with staff, that 1994 Ford sales were down as well. If further action on this item is desired by the Agency, staff will validate sales figures. 6- -Z!f -..7 . .' .14 ~.... Page 4, Item ~. Meeting Date: -5'0 -.sirb 11 A reduction in the base would have a direct financial impact upon the City since the City receives 100% of the base before the sharing formula with the dealers goes into effect. Based upon the potential impact to General Fund revenues, reduction in the Base Sales Tax limit is !lQt recommended. 4. Decrease the Annual Escalator from 6% to 2% As indicated above, the base sales tax, $550,000 in year one, is to increase by 6% per year for 15 years covered by the Incentive and Post Incentive payments. The developers have requested that the increase be reduced to 2% based upon the lower CPI for the past few years. The 6% annual increase was predicated upon inflation rates in the late 1980's when the tenns of the DDA were developed. The CPI for the past two years has averaged closer to 3%. Reduction of the escalator to 3% would result in a loss of apprOximately $12,375 to the City in the second year if the Auto Park generates at least $550,000 in sales tax revenue from July 1, 1995 - June 30, 1996. If the escalator remains at 3% for the next four years, when compared to the current 6% escalator, the loss will increase slightly each year. Based upon lower inflation rates, a reduction in the escalator is justified, at least through the incentive payment period. A reduction from the current 6% is recommended for consideration on a year by year basis. In order to accomplish this, the DDA will have to be amended. If this report is approved, staff will return to the Agency with a revised DDA for approval. FISCAL IMPACT: The Sales TaX BaSe IncreeseS eaCh ~ b)i~. 8sc:aJat~~'I~oc.utt::,Sales tax revenues received overthe beseplulf8scilJ8tci('ar:e'shai1ld MtweGri#i8AQ=enci (25%) and . ,. ," .' ". - ~... . "'~ " -,; ,-' . . . .. .. '. . " '.'.' .. the Auto Park Developers (75%) tlvotigh the incentiVe' period (years 1-6). As the escalator decreases below 6%. the amount subject to the sharing formula increases. Since the Agency receives only 25% under the sharing formula, 75% of the differenca between the original escalator (6%) and the reduced escalator will be a "loss" in terms of anticipated revenues. ~," .' For example, if the escalator is reduced to 3% at the end of the first year of operation. the base in the second year will be $566.500 ($550.000 base plus 3%). The Agency anticipated the base plus 6%, or $583.000. The difference, $16,500 will now be subject to the sharing - formula with the Agency receiving 25%, or $4.125, and the Developers receiving 75%. or $12,375. This lest figure ($12,375) represents the -lost- revenues to the Agency. During the post-lncentive period (years 7-15), the sharing formula changes with the Agency recaiving 62-1/2% and the Developer 37-1/2%. The lost revenues during the post-incentive period would thus be equal to 37-1/2% of the differance between the base at the time plus the escalator and what the base would have been if the escalator had been a consistent 6% from year 1. ~-._j~ [FKldiskA/8utop8rk.813J ~. .,' ~ .-----. ~-; ~-lf.. EXHIBIT A . REDEVELOPMENT AGENCY AGENDA STATEMENT Item L Meeting Date 02/14/95 ITEM TITLE: Report Request from Auto Park Dealers for Additional Financial Assistance SUBlw:n:Jill BY: Community Development Dim(iO\ .C,S . REVIEWED BY: ExeculiveDirecto~ ""'~ (4/SthsVote: Yes_ No-X) ., BA.CKGROUND: On Tuesday, lanuary 17, ~ the Council approved a conditional payout of $1.3 million to the Auto Parle Developers for c:onstruction of public sb.=b within the Auto Parle under As~t District 92-2. On ThUISday, lanuary 19, 1995, staff met with the Auto Park Developers, Messrs. Ordway and Fuller, and their attorney to di.~ss fin"ru;;'1l problems as.....,.;"tPd with a lower as-~ent dim;ct payout than anticipated. As a resuIi of that InIWing. the developers have made specific requests for financial assistance (see "tbchment A) which have been reviewed by staff. RECOMMENDATION: That the Council review the letters submitted by the Auto Park developers' "ttnrn"Y, lohn Abbenc, ICCJ.u...mng specific fin"n";"l "ui-'1CC and continue di....,ftion of this _ one week to aUow staff time to obtain and analyze d"""-.1Iip fiM"";"l ~ts to pmvido a cost benefit 8DlIIysis xeganting fin......r... -.-nee.. oj ., , . . -~~r::;':h'::':'.-~x'_ ~.'. 'h':"; --~ _ .#"..'...;.,~.-.. '."& BOARDS/COMMISsIONS lmCOMMENDA.'170N: Not ~Jc; DISCUSSION: At the meeting of January 17, 1995 with staff, the developers explained that they were anticlplting appro:rim"tcly $1 million more than they will receive from the City under Assessment District 92-2 for construction of on-site streets and a sewer pump st;rtion. This will ]eave them short in m...-ting their other financial ob1igl1tions. The shortfall was appalaItJ.y due to mi!lY'nmm'mi....ti~ bctwccn ~ cfcvelop= and their con.m1"'",,". AIthough the ~ bond J' ,issue was for $1.9 mininq" the dcve10peq had not been ~ by thclr consuJ1l that ~ap,lUUIima..." $400,000 of1hc Asscu..aeqf District proccCds ~ bdng used to pay oft'their obtivtiO'lS under the Otay Valley Road As~"~ District to avoid double l'lOWOfoment dimict liens llglIinu their property. An additional $200,000 waS applied towards bond jsm"ncc costs. ~ -j. IThe Developers' consultants worJced with staff to. develop the pro forma for the as~ent district, the acquisition agreement and aU other related documents and was aware and advised by staff of all of the constraints including the requirement to payoff the lien for Assessment District 90-2 (Otay Valley Road) so that there would not be two assessment district liens against the property, and also the City's limit on issuing bondS for assessment district (no more than 33% of the valuation of the property to be assessed). 6- ~- s:; -I - -:-0- -7 -"'--:0- - Meeting Date 02/14/95. The developers were also not iniorined that the City is limited in the amount of bonds that can be issued under an assessment district to 33 % of the appraised value of the property to be assessed, regardless of the total cost of improvements. In this case, the City's bonding limit was $1.9 million, although total costs including a $730,000 right-of-way acquisition charge, totalled $2.5 million. In establishing the assessment district, City staff worked closely with the developers' consultants and fully disclosed all these issues and constrain~. In an effort to make up for the shortfall of funds, the developers have requested assistance in securing a loan and reconsideration of specific terms of the Disposition and Development Agreement which included a yearly payback to the developers over the first fifteen years of operation of the Auto Park based upon sales lax revenues generated by the dealerships (further explained below). They have presented a specific proposal to staff for review in a letter dated Janua.ty 30, 1995 attached hereto. However, there were no documents verifying current financial conditions submitted as support for their request. Under a sepaxate letter also dated Janua.ty 30 (see lIff2Ntment A), the Agency is requested to repun:hase parcel 11 from South Bay Chevrolet. 'Ibc Agem;y had purc.h,,~ the site from ShinohaIa and conveyed it to Sou$ Bay chevrolet in August 1993. 1biS parcel or'igin,,"y comprised 4 acres. After deletion of the rear portion of the lot totaIling 1.1 acres due to the need to stockpile contaminated soils relocated from the other parcels and loss of .4 acres for right-of way, the lot was reduced to approximately 2.5 acres. Mr. Ordway claims that he can not sell the property now ~l'5C of the reduced size and the presence of the conlaminated soils on the rea( parcel. 'lbc sycffU. JequesIs for ..~~ f~ tho ~ }'ssistance in trPi'Imf1g a $1.1 mil1iOrt loan. AmencJment of the DDA to increaSe the mmmum payback amount through il1N'ntive payments, decrease the annual escalator and poslpone the effective date of the escalator by one year. Agency repurchase of parcel 11. .' .' "-",>: A1tIiough the Auto Parle Developca are ..t"imif1g fin""..;"t hardShip, staff has not m:eivcd idequatc .w.,.......h1tion to avhm."till"" the lIJDOUIIt of hardShip or justify the level of ad"ifmnlIt :;; JllUiit?tinq~. },M'mnnlltty. staff DCCds to xmcw Joan """"merits pertaining to an of the paa:ds, ~ of oIhet-...ln.........~ and ClJ'I"'-'lIli'lg '--ts intlit'lltit,g cash flow.. '11ds infu...".fi()ll has been nlq'lICSted from the 0WIIeU. n Is therefore reco...."ended tbat this Item be coDtfnued for two weeks In order tbat the -j. developers can provide the InfOnDatiOD requested and staff has the opportunity to adequately review'thIs materiaL FISCAL lMPACl': The Developca have requested llWstance in securing a loan with the amount of $1.1 million, amendment to financial terms of the DDA and Agency repurchase of Parcel #1. ,,- ?'-~ Page- 3, nem~ Meeting Date 02/14/95 Loan Assistance Assuming the Agency assisted the Developers in approaching lenders but did not directIy loan, consign, or in any other way guarantee the loan, there would be no direct financial impact to the Agency. Amendment of the DDA Amendment of the terms of the DDA to increase the maximum repayment under Section 401(vi) will only impact the Agency if the Auto Park is more successful than originally projected. The developers have requested that the maximum loan repayment be il:Icreased by $738,230 in order to reimburse the cievelopelS for the land right-Of-way costs not forthcoming under the as~rI1ent distIict reimb~Pft'" Based upon initial revenue projections for the Auto Park which included three qe dealerships (Ford, Clevro1et and Toyota, which was negotiating to purchase Paree1II at that time, and one small dealership) with annual sales increases of 6%, it was possible for the cievelopelS to receive adequate incentive payments to cover the entire loan amount plus interest through year six. There are currently two major (Ford and ChevroIet) and two smaller (Honda and Kia) dealerships in operation. Current sales volumes and the delay in opening a fifth dealership on ParceI #1 make it highly unlikely that the Ievel of sales tax revenues necessary to generate incentive payments to return an additional $738,230 will be forthcoming during the fiat six years. In the event that the Auto Parle does .....tl.....c:ly wdl and exceeds ....mmllted sab we JeVeaUCa ".."ng this perlod, the AgeDcy. throug1l its 25% sbaIC, would also be m:eivmg mom miemJes than J1nti~ dudug tho fiat six Je3II. '. '. As iMicated aboVe. the base sab taX, $S5O,OOO in year one, is to increase by 6% per year for 15 ycaa covemJ by the jnceoJtive and post incentive paymPftts. The deve10pea have requested that the increase be reduced to 2% based upon the lower inflation rate in the past few years. The 6% annual increase was predicated upon inflation rates in the late 1980's when the terms of the DDA were developed. InfIati~ for the past two years has averaged closer to 3%. Reduction of the ~'"tor to 2 % would resuU in a loss of $16,500 to the City in the first year if the Auto Parle genemes at least $550,000 in sales tax revenue from July I, 1995 _ June 30, f996. This figure will increase digfttty each year for the next five years. ::1bc base sales tax was also pmJicated on lICtulIl auto sales in.the late 1980's which have not been TqIJicated since. TIIc dcvdopea have, consequently, requested a reduction in the base to .. $340,000 which is commPft~.....te with recent sales leveIs. Such a reduction would have a direct finllnclllt impact upon the city since the City receives 100% of the base before the d,lI"flg '':J. formUla with the deaIea goes into effect. If the base were reduced to $340,000, the City's loss in the first year would be 75% of sales tax revenues over $340,000, up to $550,000. If sales tax revenues reach $550,000, the City WOuld lose $157,500. The sales tax base increases evei:y year by the escalator amount (currently 6%). The developers have also requested that the escalator not be applied to the base Sales tax until July I, 1996. In accordance with the DDA, the esCalator is scheduled to go into effect on July I, 1995. . ,- ~7 , L"'be '+, l.tCDl I Meeting Date 02114/95.' The fmanciaI impact to the City of postponement of the effective date of the escalator would be relatively minor, totalling $33,000 in year one if the base remains at $550,000. The loss would reduce to $2,OOO:t per year thereafter. Agency Repurchase of Parcel #1 In addition to the Chevrolet deaIen;hip (lot #3), Mr. Ordway owns Iot #1 which comprises 2.4 acres. 11iis pan:e1 originally comprised 4 acres. However, Shinohararetained 1.1 acres to stoc1cpile contaminated soils. Ordway purchased 2.9 acres through the Agency. The site was reduced by 4 acres due to construction of the westerly cul-de-sac of Auto Park Drive. Mr. Ordway claims he cannot sell the property now because of its reduced size and proximity to contaminated soils. He has proposed that the Agency repurchase the parcel at a value ;nfl"tP(f to account for land development costs. In ~on, Mr. Ordway is required to pun:hase the 1.5 acres once the conrnm;n"ted ~ an: removed (which could occur latel" this year). The Agency ~ ~'m"bly have to assume this obJ~,;on as weD. 'Ibis would requiIe a cash payment of approximately $1 million (per Ordway's request) which would be tied up until the land was sold by the Agency. It may be possible to recoup these funds when JII3Itet conditions improve and the contllm;n"ted soils an: removed from the adjoining parcel. ak:aulopart\x1cahelp.n4 " . :_'-....... ~'~ - :~' ._::~~~;f-iC{.. ..;:.) t\..';,;f7.:- ,;:e-,__ _:::'. ;., . .'!~>-:~.; .", . . "... .' ~ ._-"~ "- 1"-]- ~'h~ " ,,1,' I .' . . ~-._>. NUGENT & NEWNHAM TkO""''' r. t'lUOf:HT ''fI!:~HCN L. NCWNHAH JOC,",UA 'WC,...........f..l CHCftTL l.. ,.""r,cf'll DAV'D H. NVe.CHT .I",...CS D. MIt.o"-"" "I<CHAce. tC.. FI5H p....fRfce "". SHITH .,q....... J. .eecru:: HC'AcoaTH G. Al..C~C<< &T&VCH W. ........""Ne SIHOH c.. C.YflCH ... f(ATHIIIIVN ..ew".."'.. ... r_c..!I...'of<t..... C~_T10H "'TTOR"'C:YS AT LAW tOlO C-c:C()fU' AVCNUc:., 5UU'C 12.00 BAli DIItOO. CA.r.tPORNr.... g02.101_3Q44 TCLCI"'HCI"C ..,., 82C-U.l.J r...e:su..IU: C~I:I.1 ~OoQ1" LA ....OLLA OFFice 0"" PAOSPI:CT 5T.._ctT. SUITE .:lOS LA .JOLL.... CAt..1"O'U~f'" 0.0,27 Tt::Ul:rHONC 1.'.11O.~.~1 .....c:.U.41U: C4;I.I-415...o30& January 30, 1995 Bv Fax and !fail sid W. Ho~...::s ~_;;;,T 'l. ~:~~"'-.. M": city HanagGr city of Chula VJ.cta. 276 Fourth Avenue Chula Vista, CA 91910 .... ._.......u. -=--:- c '":'- ... ~. 3" f':o- ~: -";': '7 ~-""-., ~~~ ..~ ':.' 'R,e: Chula Vista Auto'"Par~ ".. "I: "J.-'" Dear 1fr.. Horris: ," : .~: ". "~~'::. ~ :'. .... . --.... ... t ... ';.= ;~~"f~~ed . in.. "'&a....~..t1Jig.. _,:.Oia'J~.".:.u, . 1995,....'tbe' ~e3i>~~'Jt::be, ~",' ;:.btO"~.){DaV1c1 ,~.. 1:Xe:vU _eau'jaDd "I)oagRD1ter,'.,.'.~.~.- ~:1:beDGl' ~':r3r / t!!a1t:e4~) an ~ ""J!l'Bat:l8da4 with ~.. m.<A.ut ~ J)OD4 proce~ds ~ 4'fll!1'lIrSlI4 ~or ,---s:unt:.D1s1:rtot: No. '2-2. "he bol14 ~ 1;0 })e ~ 1:0 1:be cfeYelOpers are almost ~t ;teas ~ ~t ~. va.s ~hi.."y contemplated. '. We un4erstand t:bat 1:110 emount: o~ 1:h9 boMs ~ld wac 111d~d by .t:he value of 1:I1e property th~t fOlfas tbe Aa~t.iS~~ D~trict, '.but also 2:eal1r;e that ~e vllluatiC;an ignored any value for !mprovelllents to 1:110 property Vhicb are significant:. ' . :. It .vtp; oti~1"", 'r .c:ontemplat:e4 .t:Ia4t tbe ~114 proc:ae4s woald reiabur8e the deVe~G for tbe ClOst4s ~ ~ 'the ~OViO>- '1l8Ii1:s, ~f' ~ .~ on t:he. AUt>> Pu1c ~ for Ass....en1: D18tr1C1: .0. '9-2, ~.'the ~ for lnc,ldent:a1 cosi:s <<!Jld ~,.t:I,1.e d8V81~ $738,230 fQr .~i:1on ~ t:he ri9hts-of-, way ~ traDsteE'o;.A too 1:lle d.ty. 9ie ~ coast:ructiOn costs and '~deriC:aJ. .' n' es 1Dcm:red tiy the 4m1 was ~_ 211a~Y'~1,~~O;OO~~ t:he ~ ~ bOnd l<r-~be1.ng disJ:;ursed ~ only $1,368,001). '1le'Qost;:.J::o ~ ~cated above does no~ 1nCl~da 1:11. cos~ .for _ tb, .otay p.!-o water!dne. 1'b.11s,1:he botKI PJ;ocee~ vUl.n9~ ev~ 're~. 1:11~ ~velopers for t:he1r out-of- pocket costs :1nom:i:ed..1n c<ms1:ruct:Jiig 1:I1e imp.....vQents. . ..'" '"...- .. .-' .. . .. .. . .... , .. :rn add1~!on', t:he..delay. irithe w.1d~ing Q~ otay Valley Road has si~ificantl.y impacted. the business. of the dealers in' the Auto .' t;- .. fI-r :~. ---- , , . . ". . -- -- --~......... sid W. Morr.i,s city Manager city of Chula Vista January 30, 1995 Page :z 't; Park. other 1:actors, such M the devcU.uati.on of the peso, have adversely arrected the' busin~ss ot the dealers at a tillle when overhead costs have increased dramati~lly. "..' .- . As ctiscus~ at our meeting, the - d.evelopers are hereby respecU'uJ.ly r~~g .assist:ance fiom the Ci~ otChula Vista and/or th9 Rad.evelopment Agency J,n making up the shortfall in the 1>ond. ProoGeW: and directly COIlIpen&ating the c1eve1opers J:or the rights-of-way.. _. . .... .0. ... _~.. __ .: __.;. ..:. :-:..~-,::; ~.~T 't ~-c:.-...~-_~ ~ . ::.: := ~.":= .~..::~ ..: :.:- ~r l"irm:,o t:he ~evelopers request the assistance of the city' ana/or Re4evelopment Ag'ency in _curing loans' in the total UlOWlt o~ $1,100,000 to reimburse t:he developers for cons:tructi.on costs and miscellaneous eXpenses not being reimbursed by the bond proceeds, to reiinbur:se the developers for costs incurrGd in :l;:oilstru:ctingthe otay Rio Water Line, and tQ JDake up the shortfall in; the. bond: prciceeds for the right-of~y acquisition oosts. . . __. f . ~ .~-:~ ~ SII:t .~- ~" ~t; ~t; c. . City aM Redeve10paent . ~ _-I..Get'.~f"lilt'~~1:iciD.8b\t ~..I.!P:'e.~'. (~.) ~t:lt.&ut:p~~~~.~ a.d.,.~ J"-m:!ve' ~,0~:<'>>a.Yable'.~~t:1ie '~as.a _-.. of ~."1" ~ 1;.hClJIl.~ 1:he ~"of ttie ~ ~ of the ~...~. ~ (ra~ tium a .~ bor:row1ng ~or the .CQ.R o~o_eh -lat)j1).. . ,.~o boJ;%~g .fer,.the cOst ~ 1:h~ .land referre4 -i::9 .~e' vi11',provic!lo' ~G' .c1eye].opers with short-term ~p1:tal' hee~ ~~le changes.. in:_'the o!ncent;1ve papents wUl assist 1:I1e developers in repay.iilg 1:I1e l~an. . I'" _ .': _'. ".. :~::..:__". .:.:.: ~.~. ;. 0<" A p..._~Gl!l~.e.meil<Jm~t to. the. DDA.-:.1s as ~ol1ows: 0 - . .. . . ~.:.. #_'.:. :. .'. -; :i ." .. : 0 0.1. !Qlel~""" ~_ R.opea~ .;()bUga1:1on ...in' .~ : sect:loli. C01.4l. (v1.) 8hOa1d ~. ~ 0 by' ..'the COl1'teIIp1.ated rl9ht-ot-w&l' aoqais1t:lon cost oj! $738.230. ' .. ..:". :.... . ... . .... .. :--'..... .. .:..... :. :. :'. ~ _.. . 2~: ~e.B'Ue Sales iax.,_Ount..should.be deoreasec!l. o '. t;oO:.$340;OOQ .~o-. .Ovut;6t:el1"'~~~ t;b8. .sa1es 'taxes. , .~, .p&1d:by. t:bo ,~"l91's 'in . the: ~:. .' 'lhe' average Combined '. . t:e~.hlo ~~ of Jl11l1~ J.t~o'~oSOttt?1 Bal': Chevrolet :tor .: . 1~1l1 ~ 1992 (the '2'yearc"'pr.t:le"""9" the ol.osing on 1:I1e '. ~ 1ancl pux-ohiu:o) 'vaa ~tGly $33,~OO.OO().0' . .: 3.'. !rile .6t: 'lQScalat:or"on :1;h~;Base ,sales .Tax: amount. should be' decrea~~ 'f~ :6t~1:Q-2t,'and .the f1r1;t year 'of' I i~crease-. l!Jhould De the'. Agency. Fiscal. Year. beg-in,ning July.l,1996.: . ':' .. 'J.' ~: ~~ 11--10 - . .. .,.,~ -;;.;....:. . .' ... . ,:".:. --- o...,-,,~....... "'''''''..J<J >.J .L.L.." Sid W. Morris City Manager City of Chula Vista January 30, 1995 Page 3 We greatly appreoiate your pagt assistance and wil.l~gness to discuss these lnatters. If you wish to di.;cuss these matters before taJd.ng them to the city Coun,cil, please call me. As we discussed, we would appreciate your taking these issues to the City Council meeting on February 7, 1995. Thank you for your cooperation. _ Sincerely, JJA/nf ~~~ ;-Chris 'Salomone ;. - D.ouglas Fuller .. 'i::' .David Ol;dway._ '. _: 1 !l'ro.vj,B Reneau ':~lf ::~~~.. ~~~'T ~ ,<:"..,--. ... ~.__._.. /7/'; -:.'. ,;::'.--::":-~_-'.~ _. _~ "0 ....0 ~'" ._.....:::_...~: . . John Abbene (Via Fax) ;... :: :. . !. . t: ....~:. i.~~: '.' o~- ..;. ..:..:..1..... .. .... . ~~ ..' ' .: 0 :. --.. :..:. ::"4' " -". ... ...... ,..'> ., '-. . . .. ,- ~,-j~ : " I. ... ~ c- 51'-1/ This page intentionally left blank., ,. . ~ ~,,~ '-. - ~- /?- OL~~ 1"lt..JOCN. .~;~'~. ;:JOC:::1 rt::Ol"Oo JHr'f .xJ"~ J.J.:,.aj: -..;. ~ : NUGE:NT & NEw.N13:AM ....HO....... P. ttU<=CNT GTC,.I1C;f"4 L. NE....f<C64...H J05HUA WEfNMAN CHC"",,,, L.. RU.....r::A DA,V'O .... NUOIUfT ",,,.,,,.$ D. MIl.LeA MU:HAC:L '4. Ftf,H ....."UCK H. ....fTH JOH...... "".CHC HI:ftCOnH .. A~OC", ST~CH ~ HAt..."'. .'M." C. LYNN 14. AA,T....... tfCWNtCAH ... ~f\Or~.IOHAt. c:o-~"''''Ofof ....TTO"'NCYc: A,T" ........W LA "'OLLA O.....ICC .U; 'r-_05f"l:C;T OTACCT. 5UITC .:J05 LA JOLI..A. CAI.'''O''NIA .:OS.7 Tr::L~HO"'C: (010' -~CUI rACs.'HfU; (O.~I64i;.--<t3". 1010 aceD..... AveNue;. SUiTe; ..00 S~N DIEGO. c..u..IPOEl2U:A 0'UOI-304.4 TEf..Cf""Otolr; (of.l C-2.-a,U r"CS'HU.C C"f.. ~s January 30, 1995 BY Fax and Mail sill W.- Morris' . ..- . ". City Mana1;terl.:(I7:; '-':~T1. '.-:::..,:\~-~ APr City of Chulll vista 276 Fourth Avenue Chula Vista, CA 91910 ...... ..0 _._.......... ~- :: ':... '?~. --':'.-c':' :.~~-::? Re: <:hula vista AUto :park,:'.... :Parc~li -co...... - .' .':' '''',:, . ~ .. , " .. . .:: / :'~ i b8U' Xr~ Harris: ~....' .:: .~.. ~ :- .... ".' . . . .. .. .. A"" E.. O'; ._:, . " ., .. . : ~'.~."OA"""''''f'''~.'~~~,iih4-''~aVle. -BaeaU;.Owaeft. - ~~.:sOat:h -.' .. '::r-4~;':'d4~~Y~.'aDs"1Of;.,tiJM:Ch\11a V1sta,ht:o .~... . 'f:::r,-~::t:~~~\&1P~~:n:o~~ . 1':WlUJ 'idqD1f1~ ~Ced 'When' ~1:ed sob. 1RlB ~oaDd 1:hroUghout: ~e ent:ir. Aut;Q PArk and ~red on II Holding site ccrved ~t .of the oriqiilal P~l 1. the lDiaall"-siz~ ot Parcel 1 ~ -the :fa11~ of _Hr. S1UnoAara .to reia.e4Ute tb,,- HQJ,ding site or even .~te~ at:cire the ~te4. 8011 has IIla4a :1~ Impossible :for the oWnt;a:'S 'to' sell 1'iiioe1 1.niey haVo. 'liad several potent1aJ. ~ '))u;y$ bI:it:. Qll have !ndicat:ea .1:bat- the p8rce1 is not: large enough rpr' a Cf,r ~e~ersh1p. ',. ~e coat: or l',",.cbuing eDd bol4.lng -Paroe1 1 together with t:ba ~+f<".11~~.d ~d in ~1:1Dg south Bay Clbevrolet:, . ,~ '~ ~,'.abJJ..it:y of Hessr.. ~y _ and Reneau t:o- '~e ~. ~'te ~~'dQl~.:. 2;h!'Y'~ h 1Jmaed1at:e- need of. J- your ~1Daiic:tal. US~J1oe'or t:her. JaY J)e forCed t:oolose SoI1t:b ~ 7) CheVrolet. ~e' ~esJ: .~ "tIiil Cit;y !AJ1dIor. Jtedeve1opaen1: Agenoy purohas,e Parpe],...l .~ ~~. o~..as 'Jioon as. pOssible for their Out..of-~t: qost h ~g ~ mainta1n1t\g the parcel. In 'a~dlt;ionf"as:part'of i:lie.~e ~c:t1on, we must address the oblicje;tion .of ,tt'el:S~. OrdWay, ~ ~eal1_to purchase the Holdi~ Site When and U. the contaminated coil~ is removed. . . . . . . ~-_:..-.. - ~ c ..~ , ;;:'-13 --O'- " , . :'.::.. . ,..",. .-- -- ...... .. ~.-.---- -- .......- , '. , ... - Sid W. Morri2 city Manager city of Chula Vista January 30, ~99S Page 2 TlJ.!!" owners seek reimbur6elllent of thQ following costs; original Land Cost $ 876,511.00 Share or :Infrastructure Coat Not Re1lllhursed by Bond. J.'roceeds 26,681.00 Permits 5,104.00 Property Taxes - p~t :Inst:A11"'ent 1994-95. . -FJrR Installlllenti SUpple1nentd.__ r.-;r.-g-';.s ~~~ ~:~~~4 =r.: : _ Both rnstallments ~or 1993-94 19,660.00 ,( -.. -....... .. ~'448.00 . '-3,668.00 103,672.00 10.000.00 :.... ~;- :tnterest Expenll:e Miscellaneous Fees and Expen2es , . "',' TO'l'AL $1.048.544.00 . ....:! :' . t.. : &....; . ~ . ! . . .... .n .jSoar. ~Het.that:.i:he..ct--'---- ~~....2.,aD4,,3as ~l' 'u:tbe'CObi.'-iWtl.bia:oot'.tb8--::~. h.-cl,..;.....~_.; 4.......:--.~. ': . ~ bAwi:~:tbe:va1U4I~ p~~ii:t-...,-::;:: ; ~Got:~~ ~:.tIie...Ilo~ft(g,..s1ee .18: .reDIeI'~t:ecS - aDd 'tlOab -vJ.th PIuxJ'e1 1.. \'h1s v1U ~ tho Cit;y or ~opIlen1: .AJ~':~ ~ ~. reoqy~ ~e QOSt:. t1rito~at:ely, 'Kessrs. Oi:d~ and Reneau are unable to hold t:h1s 'parcel When it 18 not. 9"lmorating 'any incolne aM cannot be sold until' the' Holding site is rQediated. . ",_ _ :.,k:' ..-/ ) :. As we discuSSed, we WOUld appJ:eciate your taking this matter ~ the .City Couucil ~,~ on p~ .7, 1995. 'If you wish to ~G ~ .is~ bet~ .t:At.(~':.1t: to i:he City COW1c11, 1'348Se can me.. ft...nt. you tor: your cooperation. . .' . . ~.'. 'f I _ - .shcerely.. _ . , . . ~ .; ~._~ :I:IA/nf eez :Chric SalOJllonG Davi<l Ordway ..." Travis Reneau (Via Fax) , ..- ._-. ...... ":.J . :; .... ....~:. ~f. o . .' .. , ... ~ ....:! " ,. . - --. JI- 1'/) -- .~ '.: I - , . c . " EXHIBIT B NUGENT & NEWNHAM TMO""...S P. NUGENT STEPHEN L NEW,......."" .JOSHUA WEtN,MAN CHERYL L. RU""'IER OA.VID M. NUGl!:NT .IAME;S O. ....ILLER ""'e""CL H. .....$H ,."TRICK M. SMITH JOHN J. A"eENE MERI:OITH G. ALCOCK STEVEN W. HASKINS SIMON C. LYNN M. KATHRYN NEWN........ A PlI\'Of'CSS'ONA... CORPORATION ATTORNEYS AT LAW LA JOLLA OF"FICE 1010 SeCOND AVENUE:. SUITe 2200 875 PROSPECT STREeT. SUITE 305 LA .IOu...... C"LI"OAN'A $2037 TELEPHONE (e,Qr "5$-382' SAN DIEOO. CALIFORNIA. 92101-3944 TCt.CPHONE eele' 2315-1323 ESCONDIDQ OFFICE "ACSIMILE Celel2.38--Q.465 1786 SOUTH ESCONDIDa aOUL'=VAAO ESCONDIDO. CAU....ORN'... ozozs TELEPHONE lelG, 743--$101 March 1.7, 1.995 Bv Messenqer ~ K4R 1995 1:', .'W C!:"::;':~':~:"_.;i;",~~'~:'::'J~1ri . Fred Kassman Department of Community Development City of Chu1a Vista 263 Fig Avenue Chu1a Vi~ta, CA 9191.0 Re: Chula Vista Auto Park - South Bay Chevrolet Dear Fred: Pursuant to the ~etter of Febrwlry 13, 1.995 from Glenn Googins, we \. molose the follPWing informa1:ion with respect: to Sou~ Bay Chevrolet and the loans Against .Parcels 1 and 3 of the Chula ViSta Auto Park.. First, eno10sed are finanoial statements for South Bay Chevrolet for the 12-month period ending December 31, 1994 and for the month of January 1995. As indicated on these financial statements, South Bay Chevrolet incurred a $137,000 net loss in 1.994 which includes a $288,000 net loss for the month of December 1994. They also incurred a $187,000 net loss for the month of January 1995. Also enclosed are copies of the Promissory Notes reflecting any loans made by General Motors Acceptance Corporation for the construction of the infrastructure improvements and the new dealership. One Note is for $:),,!?21,895 and the other Note is for $1,04~,OOO. Both of these Notes ar'l:!' secured by deeds' of trust oover.i,ng both Paroe1s 1 and 3 in the Auto Park. ... With respect to the cash proceeds received by Messrs. Ordway and Reneau at the time the Auto Park property was purchased, Mr. Reneau indicated that of the $175,000 that he received, $142,500 was paid to his sister for her interest in the property at 821 Broadway and ~h~.. balance was put back into the dealership.' Of the ~ rece~ved by Mr. Ordway, he indicated that $160,000 was contributed to the dealership and the balance was used for personal reasons. We request that this letter and the enclosed financial statements kept confidential. t,- ~-~~ .." " Fred Kassman Department of Community Development City of Chula Vista March 17, 1995 Page 2 We will forward the financial information on Fuller Ford as soon as it is available. However, with this information, the city and/or Redevelopment Agency can move forward on the request regarding Parcel 1. If you need any additional information, please contact me immediately. Sincerely, JJA/nf cc: Travis Reneau David Ordway :.~ ,.,. ;'':;1.:: : ~.: :~: ;::..~;;. . '':'" ",. ~ ,-,." '.' .~- ..,..:,,-~..);-~; . r:::t".... .:f;j'tJ{"-.'il' ).:.;" :i::;';'t,; .~::~ .. '1....,.:- ::,..f c-:;~ ~ j ,_,_~. ;..... .. ;_i.r...:'~-' .-, ;';" ".I}" " 0'\ i-t ", ~. .'." '.- 1"- p- / __'-'4 f- ~/4-' EXHIBILC DEFINITION OF TERMS \ ,.1.- I ., . ~. _:~4 6, - ~-I'1 ~__".-I4 ~ This page intentionally left blank. " '.' ,. --,i --- , - 7ft- /,f 1 401. Aaencv Incentive and Post-Incentive PaYments. 2 a. Definitions. . As Used in this Section 401 the following definitions shall apply: ' 3 4 (i) wAaencv Fiscal Yearw shall mean the year beginning July 1 and terminating June 30. 5 (ii) wApPlicable Percentaae- shall mean: (w) during any period of time that less than two Major Brand Auto Dealerships are operating on the Site, zero percent (ot), (x) during any period of time that two Hajor.Brand Auto Dealerships are operating ~n.the Site, twentY-five percent (25t), (y), during any period of .time that three Major Brand Auto Dealerships are operating on the Site, fifty percent (SOt),' and (z) during any period of time that four or more Major Brand Auto Dealerships are operating on the Site, seventY-five percent (75t). (iii) -Base Sales Tax- shall mean, for any given period of computation, the amount of $550,000.00, as such amount shall be increased by six percent (6t), on a cumulative basis, at the end of each Agency Fiscal Year. The amountOf...$550,OOO.00'"represents one percent (U) of $55,000,000.00. :'. -.. ...' :J >Hr' '.1)';: "'1"';.:,.~I 0l.u'I' {.l...;;.; ;l"~' ;'2. ;~.:...--:f CI. (.,(1Y)Qrrn~i_T'P.IlviiY.Pifo'l'Ctmn"encemen1; ~t:e- t.:t.o!l~ <;qllWO i~ii.r.":~+h"_"-..sll8;f~111~ Seg%Gga1:1on- Dat:e- . ~~n(as=~~isild~.inedi:!Jrlaect1On 105\1., aboVe)., <<.;{ . "~~~pi031d8d SUch dat:8oc<:urs within. the time contemplated therefore in the Schedule of Performance . 6 7 8 9 10 11 12 13 ... ,~...-, ..'" >~>,... 14 I i':' L~da ~: "- . . 15 . . . ~."Jg.-9" (v) wIncentive PavmentExoiration Datew shall mean the earlier to occur of (x) the sixth anniversary of the Incentive Payment Commencement Date, or (y) the date upon wh.ich the Maximum Agency Repayment Obligation has been satisfied in ful~. (vi) wMaximum Aaencv Repavment Ob1iaationw shall mean an amount equal .to the lesser of: (x) the difference between the Acquisition Price and $3,767,504.00, and (y) such portion of the amount described in clause (x) which has been paid by Agency to Redeveloper'in the form of Incentive Payments as of the Incentive Payment Expiration Date. Portions of the Haximum Agency Repayment Obligation remaining outstanding, from time to time, and at any time, shall accrue interest at a fluctuating rate per annum equal to the floating commercial loan rate announced from time to time by Bank of America as its wprime ratew plus two percent (2%). (vii) wSales Tax Received by CityW shall mean, for any given period of'computation,that portion of the California sales tax (curr~ntly one percent (1%)), J\A023301T.HAP '" - . -)I ~/q 1 which, following payment to the state Board of Equalization by businesses operated upon the Site pursuant to the provisions of this Agreement, was received by the City for use as unrestricted, general fund revenues. Notwithstanding the generality of the foregoing, Sales Tax Received by City.shall not include any portion of California sales tax collected from the Site and paid to the City for special purposes, such as transportation purposes. 2 3 4 5 6 b. Incentive PaYments. (i) Upon the expiration of the 180th day fOllowing the close of the first full Agency Fiscal Year after the Incentive Payment . Commencement Date, and occurring thereafter on an annual basis until and including the Incentive Payment Expiration Date, provided that in each such year the Sales Tax Received by City for such period of computation exceeds the Base Sales Tax for the same period, Agency shall pay to the owners of fee title to the Site, in the aggregate, the Maximum Agency Repayment Obligation in the form of the "Incentive Payments". Such payments shall be calculated and paid to such owners individually, as described in 13".;.,.;.clausec(ii),;.below....~;.,." ; . ,:.~. ;.'" _;.;J_1'::'~~~I. ,- , ..Ou.OO'J _,000 ;~~~>~: ~.t= .../fA} tl 14 . (ll) 1'heZncent:ive Payment to any given Site ~~~""OJ:1.anv-:V8ia ..._~ od;:o~ ..............-t:iOii ~ .""'l( ~~i5 .'(S~mr_.J.:;l~~~SJ..Cilra~hyt...utIP1~ti6eal~~~- .If 'f-. .' "'a:t.. ,1",. ~.. .8. '(h. . ~_"_"':'.....,:' .... ....sl. .....-x....:-.....::.:""'. ....:.-;;__'"' .) ...~l!!'~._,", . C ) ;, .,..~ ~,..,..t, Ar8~~,u....e<~ ..... "'_""'.L~'........ ............s .............. x 16 ," '--' the portion o~. the Salu'1'aX"ReceiVed by City which is attributable to the applicable, owner's Site Parcel during the given period of computation less (y) one- quarter (1/4) of the Base Sales Tax for the given period of computation, by the Applicable Percentage(s). In the event any Site Parcel is further Subdivided, Agency shall have no obligation to make' any Incentive'Payment . applicable thereto until such time as it has received assurances with respect thereto in the nature of the assurance described in Section 401c., below, executed by all owners. 7 8 9 10 11 12 17 18 19 20 ..'-' 21 .. 22 Notwithstanding the foregoing, in the event that, using the method of calculating the Site Parcel Tax Excess described above, for any given Site Parcel one-quarter (1/4) of the Base Sales Tax is greater than the Sales Tax Received by City with respect to said Site Parcel, the Site Parcels for which such is not the case 23 ~ _>4 24 25 26 27 28 J\A023301T.NAP ,- H- :<0 , 7 8 9 10 11 12 -l 13 '."._.. . at ;- ..,L.fl<;14 J6octo.t";A . <'-5 d. 16 17 18 19 ~ 20 pa / 21 22 23 ~-._:". 24 25 26 27 28 1 shall each have their respective Site Parcel Tax Excess reduced by an equal portion of such excess. By way of example only, assuming that for year "x" the Sales Tax Received by City is $1,000,000, the Bases Sales Tax is $600,000, and there was one dealership operating on each of the Site Parcels during the entirety of year "x" (Site Parcels 1, 2, 3 and 4 being responsible for, respectively, $350,000.00, $350,000.00, $225,000.00 and $75,000.00 of the total $1,000,000 Sales Tax Received by City), the owners of Site Parcels 1, 2 and 3 will receive 75% of, respectively, $175,000.00, $175,000.00 and $50,000.00, and the owner of Site Parcel 4 shall receive $0.00. 2 3 4 5 6 c. Post-Incentive Pavments. Upon the first anniversary of the Incentive Payment Expiration Date and . occurring thereafter on an annual basis until the ninth anniversary of the Incentive Payment Expiration Date, provided that in each such year the Sales Tax Received by City for such period of computation exceeds the Base Sales Tax for the same period, Agency shall make payments (the "Post-Incentive Payments") to each Major Brand Auto Dealership operating within the applicable computation period equal to the product of thirty~seven.and one-half percent ~L,--,..'.(37%%).ofthe. Site Parcel. :rax.Excess....attributable to the Site ;~ _J:.'.ParceJ.: u~zi.'wbichs~cb.'d~~P~1s?~ocated (which.)' ;tno~l.Icalculat1.OJior- Site,Parce1~~ JbCcessxllb"'] be subject: to the ~ .tSUle'.{adjUstiientS"as~. ...'::~t1nia1ause (11) ; abOVe) . j'1'iSO'JS~Tb-roreg.om;, .descr~81(~t1.0Dt.asSWlies that eacJ:i..&.l.te ".~~.Ellf';ParceJ.<1'Sha1r-hav.'no'mcire;t:iian 'one dealership operating' thereupon. To the extent that there may be more than one such dealership operating upon a Site Parcel, Agency shall have no obligation to make the applicable Post-Incentive Payment 'until such time as the dealerships operating upon such Site Parcel deliver a written instruction to the Executive Director (in form and content acceptable to Agency general counsel and executed by all such dealerships) specifying the manner of apportionment and holding the Agency harmless in connection with payment in accordance therewith. d. Nature of Incentive Pavments and Post-Incentive Pavments. Notwithstanding anything to the contrary in this Section 401, it is understood and agreed that although the method o.f calculation of the Incentiv~. Payments and the Post-Incentive Payments is based upon sales tax received by City, in no event shall such method of J\A023301T.NAP G,' .. ~ ~.' ~ 13 ''';14 ';']1$ " ($..... ',:'t116 21 22 23 _:<'4 24 2S 26 27 28 1 calculation constitute a commitment by City or Agency of sales tax proceeds. The parties acknowledge that' Agency's 2 obligation to make Incentive Payments and Post-Incentive Payments, based upon the calculations described above, is a 3 separate obligation of Agency of which Agency shall be obligated to arrange for a source or sources of repayment 4 and in no event shall constitute an obligation of the City. Additionally, Agency's obligations to pay the Incentive S Payments and the Post-Incentive Payments shall be an indebtedness of the Agency for the purposes of 6 Sections 33670, ~ seq. of the Community Redevelopment Law. 7 e. Miscellaneous. 8 9/ 10 I 11 (i) Accountina. Agency shall have the r.t.ght to receive from Redeveloper, and Redeveloper shall deliver to Agency within thirty (30). days following Agency's request therefore, an accounting and status report concerning and setting forth the present status and 'amounts of retail sales proceeds applicable to the Site for the particular Agency Fiscal Years in question, inClUding, without limitation, sales tax records submitted to the State Board of Equalization. - . (ii). Calculation of California Sales'Tax. As . . ,;L:.rprovided'Above,.th~~~ef1nit~on,:9.~ ~J:Sales. T~.~is ..... .. ~'.J>.:r"cal.cuJ.at:edzon.the asS1Dllpt;1on tha~~1Ca11fO~"sales ~:. ::' ';'d i r.etax,,"1:o~bii. ~t:umea!to '~~Ci"';'~ '~11DZ'Htd,.....- v" ". ,.."\ ". eneri1~" ." :~es...,~",l1'l;j"~. ~~""':"""'---t l'(it)-:--. <; . L- ~, -:la-tg . ", . ...... .....,.,. .., .., ,1!. ,.__.,._.~_.._....... ! . ....... ",-,j' ,YHoweverp-iiit'tbeevent. sucJi perc;en~gerOfr CalUotJiia . . saleS tax Is"1Dodlfledin sUbsequent years, the parties shall cooperate to reformulate the definition of Base Sales Tax to take into consideration such modified percentage. Further, in the event such percentage is increased, the calculation of Sales Tax Received by City shall be limited to the originally contemplated one percent (It) amount, while in the event such percentage is decreased, the calculation of Sales Tax Received by City' shall be based upon such actual decreased percentage. (iii) Failure to ODerate. Notwithsta-~ding any provision in this Section 401 to the contrary, it is understood and agreed that in the event that either: (x) the Incentive Payment Commencement Date fails to I occur within the time frame set forth in the Schedule of Performance, or (y) such dates having OCCurred within the time frame described in the SchedUle of Performance, thereafter, ~or any continuous period of thirty (30) days or longer (or within any given one-year period in the event of any noncontinuous aggregated period of ninety (90) days) there fails to be operating upon the Site at least two Major Brand Auto Dealerships, Agency shall cease to have any further obligations to make 12 17 18 19 20 J\A023301T.NAP '-- )If -).P- ~ :~ .' __'.-t. 1 2 Incentive Payments or Post-Incentive Payments under the provisions of this S'ection 401. ADDITIONAL TERMS GMAC - DDA - General Motors Acceptance Corporation: lenders for auto purchase loans, dealer operation loans and mortgage lenders. Disposition and Development Agreement. 1~~:-:~~.:JJ1:d .;:t: b- ,g: ") '2. J This page intentionally left blank. '.. ,. "s . .' ~ -.....,~ c; --'" ~ ,l..: . d INFORMATION MEMORANDUM April 27, 1995 TO: The Honorable Chairman & Members of the Redevelopment Agency John D. Goss, Executive Director--J~ bv.Yti9r; O.~ ~, Chris Salomone. Community Development Director (. VIA: FROM: SUBJECT: Status of Parking Restrictions on Auto Park Drive On February 7, 1995, the City Council considered a request by the Auto Park Developers to allow on-street parking on Auto Park Drive and Brandywine Avenue (south of Auto Park Drivel. In consideration of the shortage of parking within the Auto Park, the Council approved on-street parking on the south side of Auto Park Drive and on both sides of Brandywine Avenue on a trial basis for a six month period. Parking and display areas are to be monitored by City staff and a determination will be made whether to continue to allow on-street parking, The determination will take into consideration the appearance of the area, utilization of display pads and on-site accommodation of inventory and employee parking, The approval by the Council required the Auto Park Developers to hire a striping/signing contractor and pay the full cost of the changes required for Auto Park Drive and Brandywine Avenue. This work has been estimated at $6,000. The City reimbursed the Developers for construction of the pUblic streets and took over ownership of the streets in mid-April, 1995. At that time neither the restriping nor reSigning had been started. A letter was sent to the Developers indicating that, unless restriping and resigning began by May 1, the City would begin enforcement of parking restrictions on the public streets, . In response, the attached letter was received on behalf of Doug Fuller (Fuller Ford/Honda) requesting a time extension to begin enforcement to allow time to complete the restriping/resigning work. This request is predicated upon the current turmoil at South Bay Chevrolet and their inability to share the cost of the work at this time. In consideration of the situation at South Bay Chevrolet and the assumption that resolution is near, staff recommends a one month extension to June 5, 1995, at which time staff will reevaluate the situation and return to the Agency with a status report and recommendation, Unless the City Council advises otherwise, staff will advise Mr, Fuller that enforcement of parking restrictions within the Auto Park will begin Monday, June 5, 1995. CS/FK:ss Attachment [c:lwpwinIKassmanlparking ,mem] .' . "= . C~&D COnstruction Manag-ement & Developmenc City of Chula Vista Department of Public Works EngIneering Division 276 Fourth Ave. Chula V-LSta, CA 92010 . Re; Street Parking for CV Auto Park AttentIon: John Iippitt Dear John; April 19.1995 Mr. Fuller is requesting if you would please extend him time on the street parking on Auto Park; Drive and BrandywIne Avenue. Due to the turmoD at SouthBay Chevrolet, Mr. Fuller would have to bare the entire cost of striping the streets. Mr. Fuller would like to wait until new ownership of the Chevrolet Dealer can ~te. The enforcemeriUs the weekot May 1st" 1995. Would you please lift that until further nob_' Your cooperation wOuld be greafly IIPpredatecf In this matter. t y Collura C M & D, Project Manager ~v{.Office 924 NUl/.lIIus AVCnut $d~~ HQrloM\I. IUwaU 96117 {Iq'I .s~710 ~Off $4$...U'S f~ So Oiqo Ot6<< $.(49 Ke:.ray Villa ~d. ~if..uJ.sQ' Sail Di~.CA'lt2J (617)"Hll1 ('1') 91<41.9'79 (~ TOTAL P. 82