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HomeMy WebLinkAboutRDA Packet 1994/10/04 Tuesday, October 4, 1994 Council Chambers 4:00 p.m. Public Services Building (immediately following the City Council meetiug) Joint Meetin~ of the RedeveloDment A~encv/Citv Council of the City of Chula Vista CALL TO ORDER 1. ROLL CALL: Agency/Council Members Fox -, Horton -, Moore -, Rindone -' and Chairman/Mayor Nader -' 2. APPROVAL OF MINUTES: September 20, 1994 CONSENT CALENDAR (Items through) 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. 3. WRITTEN COMMUNICATIONS: None. 4.A COUNCIL RESOLUTION 17673 APPROVING SUBLEASE AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND THE COUNTY OF SAN DIEGO FOR THE LEASING OF LEGISLATIVE OFFICE SPACE FOR THE FIRST DISTRICT SUPERVISOR'S FIELD OFFlCE--City staffhas negotiated a new agreement to continue leasing office space to San Diego County in the City's Legislative Office Building for the First District Supervisor from 7/1194 through 6130/97. Staffrecommends approval of the resolutions. (Admiuistration) B. AGENCY RESOLUTION 1425 ACKNOWLEDGING AND APPROVING SUBLEASE AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND THE COUNTY OF SAN DIEGO FOR THE LEASING OF LEGISLATIVE OFFICE SPACE . . END OF CONSENT CALENDAR' . Agenda -2- October 4, 1994 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 in favor of the staff recommendation; complete the pinkform to speak in opposition to the staffrecommendation.) Comments are limited to five minutes per individual. None Submitted. 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. ACTION ITEMS The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by the Agency, staff, or members of the general public. The items will be considered individually by the Agency and staff recommendations may in certain cases be presented in the alternative. Those who wish to speak, please fill out a "Request to Speak" form available in the lobby and submit it to the Secretary to the Redevelopment Agency or the City Clerk prior to the meeting. Public comments are limited to five minutes. 5. AGENCY REPORT REQUESTING AUTHORIZATION FOR THE EXECUTIVE DIRECTOR TO PREPARE A LEASE AND TO HOLD A PUBLIC HEARING FOR INTERIM USE OF AGENCY PROPERTY LOCATED AT 801 BROADWAY BY THE URBAN CORPS -- The Agency recently purchased the South Bay Chevrolet Dealership at 801 Broadway as pan of the Auto Park project. There are currently no re-use proposals for this site. The Conservation Coordinator has requested temporary use of the site by the Urban Corps for an oil recycling education program. The Agency is requested to authorize the Executive Director to hold the required public hearing and prepare a lease with the Urban Corps for the purpose of operating an oil recycling education program. Staff recommends that the Agency accept the report. (Community Development) 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 ¡¡ems 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. Agenda -3- October 4, 1994 OTHER BUSINESS 6. DIRECTOR'S/CITY MANAGER'S REPORT(S) 7. CHAIRMAN'S/MA YOR'S REPORT(S) 8. AGENCY/COUNCIL MEMBER COMMENTS ADJOURNMENT The meeting will adjourn to the Regular Redevelopment Agency Meeting on October 18, 1994 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers. ****** 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 inforrnationat (619) 691-5047 or Telecommunications Devices for the Deaf (TDD) at (619) 585-5647. California Relay Service is also available for the hearing impaired. [C:I WP51 IAGENCYIAGENDASll 0-O4-94.AGD] , . This page intentionally left blank. MINUTES OF A JOINT MEETING OF THE REDEVELOPMENT AGENCY AND CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, September 20, 1994 Council Chambers 8:55 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Council Members Fox, Horton, Moore, Rindone, and Chairman/Mayor Nader ALSO PRESENT: George Krempl, Deputy City Manager; Bruce M. Boogaard, Agency/City Attorney; and Beverly A. Authelet, City Clerk 2. APPROVAL OF MINUTES: September 6, 1994 MSUC (Rindoneillorton) ,to approve the minutes of September 6, 1994 as presented. CONSENT CALENDAR (Item pulled: 4A & 4B) 3. WRITTEN COMMUNICATIONS: None submitted. 4.A. RESOLUTION 1419 APPROVING MATTERS RELATED TO THE SALE OF TAX ALLOCATION BONDS AUTHORIZED TO BE ISSUED UNDER RESOLUTION 1383 WITH RESPECT TO THE MERGED BAYFRONT/ TOWN CENTRE REDEVELOPMENT PROJECT AREA -- Pursuant to previously adopted Resolutions 1383 and 1400, approval was requested for matters related to the sale of tax allocation bonds for the purpose of refinancing existing debt in the Bayfront/Town Center Project Area. Under current market conditions it is anticipated that a successful refunding could achieve savings of more than $1,000,000 over the life of the issue. Staff recommends approval of the resolutions. (Agency Treasurer/Director of Finance) Pulled from the Consent Calendar. B. RESOLUTION 17659 APPROVING ISSUANCE OF REFUNDING TAX ALLOCA nON BONDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA RELATING TO THE MERGED BA YFRONT /TOWN CENTRE REDEVELOPMENT PROJECT AREA Pulled from the Consent Calendar. 8 Joseph Garcia, 484 Fifth Avenue, Chula Vista, CA, questioned if the Agency was seeking to issue bonding in addition to the $30 million that had been authorized. Robert Powell, Agency TreasurerlDirector of Finance, responded that it was not, they were the same bonds that were contemplated in December and were validated in May. Agency/Council Member Rindone stated it was estimated that there would be substantial savings by making one payment in the first year and he questioned what the annual savings would amount to in successive years. Mr. Powell responded that it was $450,000 - $650,000 per year, however that figure would vary because the existing bond debt service was not level debt service. )-1 --..-. -- Minutes September 20, 1994 Page 2 Agency/Council Member Rindone questioned what the original refunding was based on. Mr. Powell responded that the original refunding was contemplated to be extended to 2024 which was the maximum year under the current redevelopment plan. The reasons for that was to protect the tax increment so there was debt outstanding so the Agency could continue to collect tax increment. The second reason was to try to protect the tax increment from further State takeover. Staff ran into difficulties in structuring the deal because of the special subvention monies that the Agency received from the State that were based on the shortfall between required debt service and tax increment each year. The current structure contemplated a 2019 maturity date. Staff was still working with the State controllers office and might be able to achieve the 2024 maturity date. Agency/Council Member Rindone stated the Agency/Council had directed staff to look at derivatives and there was no mention of that in the report. Mr. Powell stated that was explored and it was determined that the derivatives were not a candidate for fmancing due to the underlying rating of the existing bonds. However, he was working with Grigsby Brandford & Co. and a financial advisor looking at derivatives for the City as a whole. Agency/Council Member Rindone questioned if it was advisable to have a mix of variable and fixed rates. Mr. Powell stated in the current interest rate environment, which was historically low, one school of thought was to get the best interest rate as possible and extend it out as long as possible. There was also a school of thought that said a percentage of debt should be kept at a variable rate. He did not subscribe to that at the current time. Mark Northcross, Kelling Northcross & Nobriga, Inc., Financial Advisor, stated with respect to redevelopment agencies and variable rate debt there was one thing that was important to remember, i.e. while the interest rate may change the revenues may not change to keep pace with them. The Agency had a really tight budget and there was not a lot of surplus revenue, particularly in the Bayfront Town Centre. He agreed that a mixed and fixed variable rate debt was in principle a very good thing, but prudence dictated insuring predictable manageable debt service for the long haul. Agency/Council Member Rindone requested that when the deal was completed that an informational memo be submitted to the Agency/Councii which would include what the rating was. RESOLUTIONS 1419 AND 17659 OFFERED BY CHAIRMAN/MAYOR NADER, reading of the text was waived, passed and approved unanimously. ****** URGENCY ITEM OFF AGENDA: RESOLUTION 1424 AWARDING DEMOLffiON CONTRACT FOR 980 "F" STREET TO MARQUEZ BROTHERS STRUCTURAL MOVERS, WAIVING FORMAL BIDDING AND SALES PROCESS IN CONNECTION THEREWITH, AND AUTHORIZING THE CHAIRMAN TO EXECUTE A DEMOLITION CONTRACT IN A FORM APPROVED BY THE CITY ATTORNEY AND APPROPRIATING FUNDS THEREFOR 4/5th's vote required. Agency Attorney Boogaard stated asbestos work on the Shangri-La building had been completed on Friday which opened the building up and subjected it to a higher risk of vandalism and vagrancy. Staff felt they needed to move quickly on the demolition for the property. Staff had issued requests for demolition which was the subject matter of what staff wanted to address with the passage of Resolution 1424. Based on that information staff requested that the Agency make the necessary fmdings to put the resolution on the agenda for consideration. . c2-~ Minutes September 20, 1994 Page 3 MSUC (Nader/Moore) to find that it was a matter of urgency that arose after the posting of the agenda. Agency Attorney Boogaard stated bids were received, the lowest being the Marquez Brothers for $18,000 which was $27,000 lower than the next highest bid. The bid represented a combination of services and sale of demolished materials. The City had a bidding procedure in the Purchasing Manual which required that if the CitY sold property of the City it had to be done pursuant to a formal process. Staff felt there was justification for the waiver of that policy and the sale of the materials implicit in the bid to Marquez Brothers as surplus materials. For the $18,000 additional the Marquez Brothers would remove the Shangri-La restaurant building. Staff requested the Agency adopt Resolution 1424. RESOLUTION 1424 OFFERED BY CHAIRMAN NADER, reading of the text was waived, passed and approved unanimously. * * END OF CONSENT CALENDAR * * PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 5.A. PUBLIC HEARING APPLICATION FOR SPECIAL LAND USE PERMIT FOR THE CONTINUATION OF AUTO DISMANTLING BUSINESS AT 777 ENERGY WAY and B. PUBLIC HEARING APPLICATION FOR SPECIAL LAND USE PERMIT FOR THE ESTABLISHMENT OF AN AUTO RECYCLING BUSINESS AT 775 ENERGY WAY C. RESOLUTION 1420 MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL PERMIT (SUP 93-08) TO D&P AUTO DISMANTLING, FARE'S AUTO RECYCLING, RC. IMPORT AUTO RECYCLING, AND TRUEWAY AUTO DISMANTLING FOR CERTAIN DESIGNATED AUTO WRECKING USES AT 777 ENERGY WAY, CHULA VISTA, CALIFORNIA; PARCEL BEING LOCATED WITHIN THE OT A Y V ALLEY ROAD PROJECT AREA-- These type businesses were conditionally approved under PCC-73-27 in 1973. City staff has been working over the past two years to process Special Land Use Permits if the businesses are brought into conformity to Agency site criteria, principally parking and landscaping. The Agency is requested to hold public hearings for two current applications to continue auto recycling businesses: in the case of 777 Energy Way, the request is to continue businesses currently located on the property; the second request, 775 Energy Way, is for a new auto wrecking business replacing a previous one. Staff recommends approval of the resolutions. (Community Development Department) D. RESOLUTION 1421 MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL PERMIT (SUP 94-02) TO AMERICAN AND FOREIGN AUTO WRECKING FOR CERTAIN DESIGNATED AUTO WRECKING USES AT 775 ENERGY WAY, CHULA VISTA, CALIFORNIA; PARCEL BEING LOCATED WITHIN THE OT A Y V ALLEY ROAD PROJECT AREA This being the time and place as advertised, the public hearing was declared open. There being no public testimony, the public hearing was closed. RESOLUTION 1420 AND 1421 OFFERED BY MEMBER MOORE, reading of the text was waived, passed and approved unanimously. 02- 3 -.--. -. Minutes September 20, 1994 Page 4 ORAL COMMUNICATIONS None ACTION ITEMS 6.A. RESOLUTION 1422 APPROVING MODIFICATION OF LOAN BY AGENCY TO PARK VILLAGE APARTMENTS LIMITED PARTNERSffiP IN CONNECTION WITH 28 UNIT AFFORDABLE HOUSING PROJECT LOCATED AT 1246-1256 THIRD A VENUE AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE LOAN MODIFICA nON AGREEMENT, SUBORDINA TlON AGREEMENTS, AND ASSOCIATED DOCUMENTS--In 1992 the Agency approved a $350,000 loan to Civic Center Barrio Housing Corporation to develop a 28-unit affordable housing project (Park Village Apartments). A modification to the Loan Agreement is recommended which will facilitate permanent financing of the project. Staff recommends approval of the resolutions. (Community Development Director) B. RESOLUTlON 17665 APPROVING AMENDED AND RESTATED GROUND LEASE AND LEASE RIDER AND ESTOPPEL AGREEMENT IN CONNECTION WITH AGENCY LOAN MODIFICATlON WITH PARK VILLAGE APARTMENTS AND AUTHORIZING CITY MANAGER TO EXECUTE SAME Agency/Council Member Horton stated the principal loan amount was $350,000 and as of 9/1194 the balance was $412,000. She questioned whether that was because there was a credit interest. Juan Arroyo, Housing Coordinator, responded that was correct. Agency/Council Member Horton noted the Agency lien was in third position, but that staff had negotiated its right to receive payment on its debt in second position ahead of the State. She questioned how that had been done. Agency/City Attorney Boogaard responded that it was a complicated drafting technique which allowed bifurcation of the main priority from the right to recover the revenue from the proceeds of the project. The Agency was in the second position except and unless there was a default in which the Agency would be in third position in a foreclosure proceeding. The proposed action would reduce the principal by $100,000. RESOLUTION 1422 AND 17665 OFFERED BY AGENCY/COUNCIL MEMBER HORTON, reading of the text was waived, passed and approved unanimously. 7. RESOLUTION 1423 ADOPTING NEGATIVE DECLARATION IS-93-O7 FOR TROLLEY TERRACE DEVELOPMENT, APPROVING THE APPROPRIATION OF $643,000 FROM THE LOW AND MODERATE INCOME HOUSING FUND TO PURCHASE REAL PROPERTY LOCATED AT 746 AND 750 ADA STREET FOR DEVELOPMENT OF AFFORDABLE HOUSING AND DAY CARE FACILITY, AND AUTHORIZING EXECUTIVE DIRECTOR TO EXECUTE PURCHASE AND SALE DOCUMENTS IN A FORM APPROVED BY THE AGENCY GENERAL COUNSEL -- At the City Council meeting of7-19- 94, Council approved the opening of escrow for the purchase of real property located at 746 and 750 Ada for development of affordable housing and a day care facility and appropriated HOME program funds therefor. Due to new interpretation of the HOME Program regulations the use of these funds cannot be used until the project is in a more advanced stage. Therefore. low and moderate income housing funds are needed temporarily in order to close escrow. Staff recommends approval of the resolution. (Community Development Director) cJ-f Minutes September 20, 1994 Page 5 Dave Gustafson, Deputy Director of Community Development, informed Council of the potential benefits of the project. There was a question of eligibility of use of HOME funds for the daycare portion of the project. Staff had presented a worse case scenario and wanted the Agency to go into it with the assumption that the HOME funds would not be allowed for the daycare portion and that those funds would have to be replaced at some point in the future with Community Development Block Grant funds. It was the staff's strategy to maximize the use of HOME funds for the daycare center as there was some proportional use and there were creative strategies to work with HUD in order to do that. Member Rindone questioned if the two houses would be raised. Mr. Gustafson responded that the two houses would be removed by the seller. One tenant was simply leaving and the other tenant was being relocated by the seller. The cost for those activities were part of the $243,000 which had been previously approved. Member Rindone complimented staff on their tenacity on the project. He would be looking for resolution in the future on safe access from the project to the trolley station. The access issue needed to be addressed early, particularly for pedestrians. RESOLUTION 1423 OFFERED BY MEMBER RINDONE, reading of the text was waived, passed and approved unanimously. ITEMS PULLED FROM THE CONSENT CALENDAR Item pulled: 4A & 4B. The minutes will reflect the published agenda order. OTHER BUSINESS 8. DIRECTOR'S/CITY MANAGER'S REPORT(s) - No report given. 9. CHAIRMAN'S/MA YOR'S REPORT(s) - No report given. 10. AGENCY/COUNCIL MEMBER COMMENTS - No report given. ADJOURNMENT ADJOURNMENT AT 9:28 P.M. to the Regular Redevelopment Agency Meeting on October 4, 1994 at 4:00p.m., immediately following the City Council meeting, in the City Council Chambers. Respectfully submitted, BEVERLY A. AUTHELET, CMC, City Clerk "\ \' ~ \\ by: \)'::AJ, cJ-5 , . This page intentionally left blank. c2 -~ CITY COUNCIL/REDEVELOPMENT AGENCY AGENDA STATEMENT Item J-.} Q& b Meeting Date 10/4/94 ITEM TITLE: council Resolution 7fo73approving Sublease Agreement between the city of Chula Vista and the county of San Diego for the leasing of legislative office space for the First District Supervisor's field office. Agency Resolution )4-;;,5 a c k now 1 e d gin g and approving Sublease Agreement between the City of Chula vista and the County of San Diego for the leasing of legislative office~ace. SUBMITTED BY: Deputy City Manager Thomson I ~J REVIEWED BY: Executive Director/City Manage~ ~ ;./7 (4/5ths Vote: Yes--- No-X-) A City lease that provides San Diego County approximately 325 square feet of office space in the city's Legislative Office Building for the First District supervisor expired on June 30, 1994. city staff has negotiated a new agreement with the County to continue leasing space for the First District Supervisor from JUly 1, 1994 through June 30, 1997, with terms similar to those in the leases between the City and the State for legislative office space for Senator Peace and Assemblywoman Ducheny. RECOMMENDATION: 1. That Council adopt the Council resolution approving the Sublease Agreement 2. That the Redevelopment Agency adopt the Agency resolution acknowledging and approving the Sublease Agreement BOARD/COMMISSION RECOMMENDATION: Not Applicable DISCUSSION: There are two leases that the city has had with the County for office space in the Legislative Office Building at 430 Davidson Street for field offices for the First District Supervisor. The first lease, which is for 250 square feet of space/ was approved in 1982 for a 50-year term, with approximately 38 years remaining. This 50-year lease provides that the 250 square feet of office space will be leased to the county without any rental payments in consideration for the County quitclaiming the former Court Building to the city. This 1982 lease will continue regardless of whether the second lease, which is the subject of this agenda statement, is approved or not. J-t -I The second lease with the County is for an additional 325 square feet of office space in the Legislative Office Building for the First District Supervisor. This second lease was approved by the city council in February 1990 and expired on June 30, 1994. This lease provided that there would be no rent charged for the 325 square feet of office space through June of 1994 as consideration for the County reducing the price that the City had to pay to the County to acquire the remaining leasehold interest in the former County Health Building, which is currently the Community Development Department's office area, after it was damaged in a fire. city staff has taken the position that the renewal of the lease for this 325 square feet of office space should be under terms similar to those in effect for the offices leased to the State for field offices of the state Senator and State Assemblywoman, including the charging of reasonable rent. The proposed lease therefore includes a rental payment from the County to the city of $374 per month, which is the same rate of $1.15 per square foot charged to the State. The rental payment would also be adjusted annually based on changes in the CPl. The term of the contract is for three years, with either party being able to terminate the lease at any time by giving thirty days notice to the other party. The city is responsible for custodial service, routine maintenance, and utilities except for telephone. On November 23, 1993 the Redevelopment Agency and the City Council approved an "asset transfer" structured financing and certificates of participation in order to finance the Redevelopment Agency's contribution toward expansion of the Chula Vista Center. As part of that "asset transfer", the City sold the Legislative Office Building to the Redevelopment Agency, and the Agency leased the building back to the City under a lease-purchase agreement dated December 1, 1993. section 7.4 of the Lease Agreement between the Redevelopment Agency and the City allows the City to sublease all or portions of the Legislative Office Building to other agencies, subject to the City obtaining a written opinion of bond counsel stating that such a sublease does not cause the interest components of the lease payments to become includable in gross income for purposes of federal income taxation or to become subject to personal income taxation by the State of California. Attached is a letter dated July 22, 1994 from the bond counsel for the transaction, Jones Hall Hill & White, providing the required written opinion. FISCAL IMPACT: Rental income from the recommended lease will generate a gross annual income to the City of $4,488, which will be increased after the first year by an annual cpr adjustment. Deduc;:ting estimated City expenses for utility and custodial servlces, the net annual income to the City will be approximately $2,500 to $3,000. Other routine maintenance or building improvement costs could further reduce'the net income to the City. Attachment: Letter from Jones Hall Hill & White Copy of Sublease Agreement Lf-~ ",\(AI I»ILEOIS,SPA .JIII ? '7 'H" JONES HALL HILL Be WHITE, A PROFESSIONAL LAW CORPORATION ATTORNEYS AT LAW CHARLES F. ADAMS FOUR EMBARCADERO CENTER STEPHEN R. CASALEGGIO NINETEENTH FLOOR MICRAEL D. CASTELLI SAN FRANCISCO. CA 9"'111 THOMAS A- DOWNEY ,...,1>' 391-1>780 ANDREW C. HALL, JR. FACSIMILE GREG HARH1NGTON ""II>' 391.1>784 WILLlAM H. MADlSON DAVID J. OSTEH KENNETH t. JONES DIUAN D. QUINT PAULJ.THIMMlG July 22, 1994 OFmUNSEL DAVIDA-WALTON SHARON STANTON WHITE ROBERT J. lULL "9O..I9gg) Jim Thomson Deputy City Manager City of Chula Vista 276 Fourth Avenue Chula Vista, Califorma 91910 Re: $3,115,000 1993 Certificates of Participation (Town Centre II Parking Project - Phase Two) Dear Jim: You have asked me for an opimon concermng various subleases to be entered into by the City with respect to office building property which was leased pursuant to the Lease Agreement dated as of December I, 1993, by and between the Redevelopment Agency and the City (the "Lease Agreement"), As you know, Section 7.4 of the Lease Agreement requires the City to take certain actions, including obtaining an opinion of bond counsel, before entering into any subleases of the property which is leased thereunder. The purpose of the opinion requirement is to ensure that the property is not used in a manner which would cause the Certificates of Participation to become "private activity bonds" under applicable federal tax law. In the case at hand, you have asked us to review sublease arrangements between the City and the State of California, and the City and the County of San Diego. These arrangements were in effect at the time the Certificates of Participation were originally issued, and were reviewed and approved by our office. We have therefore had occasion to determine, and hereby affirm, that in our opinion these subleases will not cause the interest components of the Lease Payments payable by the City under the Lease Agreement to become includable in gross income for purposes of federal income taxation or to become subject to personal income taxation by the State of California. This opinion will apply to all extensions and J-f~3 ...-.. Jim Thomson City of Chula Vista July 22, 1994 renewals of the subleases as well. Also, I do not believe it was the intention to require renewals of existing subleases to meet the requirements of Section 7.4, so you should not be required to file a copy of the subleases with First Interstate Bank, as trustee. As a general principle, any subleases of the property by the City to a governmental agency will not cause any "private activity bond" problems whatsoever. In the event that the City considers leasing any of the property to a private corporation (whether non-profit or for-profit), we will need to analyze whether the term of the lease and the expected rental income exceed certain thres~old li.mits, and I would be happy to work it through with you should such an occaSIOn arise. Please let me know if I can be of any further help in this matter. CQJ~ . arle: F. A ams J-f~q SUBLEASE AGREEMENT ~~-~- -- .:=. ~~ First Distriot Supervisor Field Office Assessor Parcel No.: 568-110-32 THIS SUBLEASE AGREEMENT ("Lease") is made and entered into effective as of ("Effective Date"), by and between the City of Chula Vista ("Lessor"), and the COUNTY OF SAN DIEGO, a political subdivision of the State of California ("County"). ARTICLE 1 MASTER LEASE This agreement is a sublease under, and shall be subject to and subordinate to, that Lease dated December 1, 1993 between Redevelopment Agency of the City of Chula Vista, as Lessor, and City of Chula Vista, as Lessee (the "Master Lease"). ARTICLE 2 PREMISES Effective as of the "Effective Date" first set forth above, which is defined as the date this Lease shall be approved by the Board of Supervisors of the County of San Diego, or the Director of the County's Department of General Services, as applicable, County hereby leases the premises ("Premises") consisting of approximately 325 square feet of office space in the building at 430 Davidson Street, Chula Vista, as shown on Exhibit "A", attached hereto and by this reference made a part hereof, from Lessor, and Lessor hereby leases the Premises to County, on and subject to the terms, covenants and conditions set forth herein. The Premises include the rights granted to use facilities and equipment on the property within which the Premises are located which are provided and designated by Lessor from time to time for the general use, benefit or convenience of County or other tenants of such property. ARTICLE 3 TERM 3.1 Term. The term ("Term") of this Lease shall be thirty- six (36) months, commencing on July 1, 1994 and ending on June 30, 1997. 3.2 Earlv Termination Riqhts. Either party may terminate this Lease at any time during the Term by giving thirty (30) days advance written notice thereof to the other party. t-t-~ --. -. 3.3 Holdinq Over. If County holds over in occupancy of the Premises, or any portion thereof, after the expiration of the Term wi,thout,....Lessor's consen-e.~ County shall become a tenant from month-to-month. Any holdover shall be subject t~ the terms and conditions specified in this Lease, so far as applicable. ARTICLE 4 RENT 4.1 Base Monthly Rent. County shall pay to Lessor as rent during the Term the sum of Three Hundred Seventy-Four Dollars ($374) per month. Rent~ue shall be payable in arrears on the first day of each calendar month following the month in which rent was earned during the Term. If the first day of the Term is not the first day of a calendar month, then the accrued rent for the partial month at the beginning of the Term shall be pro-rated on a ~ diem basis, and paid on the first day of the following calendar month. County shall pay monthly installments of rent by depositing County warrants by First Class Mail, postage prepaid, addressed to Lessor at the address stated in Article 18. 4.2 Cost of Livinq Adiustment. Beginning with July 1,1995 and thereafter for each succeeding twelve (12) month period (each such date hereinafter being referred to as an "Adjustment Date"), the Base Monthly Rent shall be adjusted (but in no event to an amount less than the initial Base Monthly Rent set forth in Article 3.1) to reflect any increase or decrease in the purchasing power of the dollar following the Commencement Date. The base for computing the adjustment shall be the Consumer Price Index for All Urban Consumers (1982-84=100) for the Los Angeles- Anaheim-Riverside Area (the "Index"), as published by the U.S. Department of Labor, Bureau of Labor Statistics. Adjustments shall be calculated by the use of the following formula: R=AX(.!!) C WHEREIN, R equals the adjusted Base Monthly Rent; A equals the initial Monthly Rent set forth in Article 4.1; B equals the average monthly value of the Index for the months of March, April, and May immediately preceding the Adjustment Date; and C equals the average monthly value of the Index during the months of March, April, and May of 1994, which is agreed to be 152.0. ¡i tf-(o In the event that the Index is discontinued or materially revised during the Term, than the parties shall agree upon a substitute governmental index or computation that reasonably refle~ts consumer prices for purposes of computing the cost-of-living. adjustment. If the parties cannot agree, such index or computation shall be determined by arbitration between the parties pursuant to the provisions of the California Code of civil Procedure. ARTICLE 5 USE OF PREMISES ,. The Premises shall be used as office space for County's First District Supervisor; provided, however, that County reserves the right to use the Premises for any other comparable use permitted by applicable zoning laws or ordinances, subject to Lessor's reasonable prior written approval thereof. ARTICLE 6 QUIET ENJOYMENT Upon County's paying rent and performing its other obligations hereunder, County shall peacefully and quietly have, hold and enjoy the Premises throughout the Term and any extensions thereof, without hinderance, ejection or molestation by Lessor, any person lawfully claiming through or under Lessor or any person claiming prior rights to Lessor to the Premises. ARTICLE 7 MAINTENANCE AND REPAIR OBLIGATIONS 7.1 Maintenance and Custodial Services Furnished bv Lessor. Lessor shall, at its sole expense, furnish to the Premises all custodial and trash removal services which may be required by County's occupancy and use of the Premises. Such services shall be provided at the level necessary to maintain the Premises in a clean and orderly condition. Lessor's maintenance obligations under this section include, without limitation, providing those services specified in California civil Code section 1941. 2, or any successor statute thereto. All such services shall be provided at such reasonable times and in such a manner as to minimize interference with County's use and enjoyment of the Premises. All individuals or companies providing custodial and trash removal services hereunder shall be bonded. 7.2 Additional Services Requested by County. If County shall request any services in addition to those specified or reasonably anticipated hereunder, Lessor shall use its best efforts to supply the same, and such additional services shall be charged at reasonable rates established by Lessor and approved in writing by County's Lease Administrator prior to provision of the service. The agreed cost of such additional services shall be ð 4-ry reimbursed to Lessor by County within thirty (30) days of County's receipt of Lessor's invoice therefor, together with evidence of Lessor{~ payment thereof. 7.3 Repairs. Subject to the provisions of this Lease pertaining to damage or destruction of the Premises, Lessor shall, at all times and at its sole expense keep the Premises in good order, condition and repair, such that the same are at all times in good and tenantable condition. ,. 7.4 Repair and Maintenance Safetv Reauirements. (a) Whenever feasible, Lessor shall schedule repair and maintenance work at times other than normal working hours. Repair or maintenance work which involves the use of processes which generate airborne contaminants which can negatively impact indoor air quality may be conducted during normal working hours only with County's prior written consent. (b) Lessor shall give County five (5) days prior written notification of any non-regularly scheduled maintenance, and of any and all repair work, to be performed on the Premises except for maintenance or repairs requested by County. 7.5 Lessor's Failure to Provide Services and Repairs. Should Lessor fail to perform any act or provide any service required hereunder and not cure such failure, or commence and continue to diligently pursue to completion such curing, within ten (10) days following written notice thereof by County (or immediately if the nature of the problem presents a hazard or emergency), County shall have the right, but not the obligation, to remedy such situation by making the relevant repairs or obtaining the relevant service. County's cost in so doing shall be reimbursed to County by Lessor within thirty (30) days of delivery of the invoices evidencing such work. ARTICLE 8 UTILITIES Lessor shall furnish to the Premises, and pay for at all times during the Term, all utilities necessary for the use and enjoyment by County of the Premises for County's Intended Use. Such utility services shall include, but not necessarily be limited to, gas, water, electricity, heating, ventilation and air conditioning, and elevator service if required for County's Intended Use of the Premises; provided, however, that Lessor shall not be obligated to provide telephone equipment or facilities to the Premises. 1-?; ARTICLE 9 INSURANCE - 9.1 Insurance to be Carried bv Lessor. Lessor shall obtain and maintain the following insurance coverage during the Term and any extension thereof: (a) A standard policy of fire and extended coverage insurance, in an amount of ninety percent 90% of the full replacement cost of the Building, without deduction for depreciation, including costs of demolition and debris removal, and with such reasonable.deductibles as would be carried by a prudent owner at an office building of a similar character located in the geographical area of the Building. (b) A policy of commercial general liability insurance, or equivalent, insuring Lessor against liability for personal injury or property damage arising out of the ownership, use, occupancy or maintenance of the Premises, the Building, the Common Facilities and the Property in such reasonable amounts with such reasonable deductibles as would be carried by a prudent owner of an office building of a similar character located in the geographical area of the Building, with limits of not less than One Million Dollars ($1,000,000). (c) Lessor may partially or fully self-insure for the liability described in paragraph (b.) above, provided that Lessor shall at all times maintain sufficient funds available to provide the same amounts, coverages, protection and payments by way of self insurance as would be provided if Lessor were to obtain the type of insurance required under paragraph (b.) above. 9.2 Policv Forms and Certificates. Lessor agrees that certificates of such insurance shall be delivered to the County as soon as practicable after the placement of the required insurance, but in no event later than ten (10) days prior to the Commencement Date. All such insurance policies shall name County as an additional insured. 9.3 Use of Proceeds. In the event of damage or destruction to the Premises covered by the insurance required to be taken out by Lessor pursuant to this article, Lessor shall use the proceeds of such insurance for the purposes of repairing or restoring such areas, unless County elects to terminate this Lease pursuant to the provisions of this Lease addressing damage to the Premises from fire or other casualty. ß q~ 9.4 Insurance to be Carried bv County. County maintains a polîëy of All-Risk Insurance covering the County's personal property in the Premises, including any fixtures or equipment in the Premises owned by County. The County utilizes Self-Insurance with regard to any liability it may incur for personal injury or property damage arising out its use or occupancy of the Premises. 9.5 Adiustment of Lessor's Insurance Coveraqe. County retains the right at any time to review the coverage, form and amount of insurance reqvired of Lessor hereunder. Following such review, County may require ~essor to obtain insurance reasonably sufficient in coverage, form and amount to provide adequate protection, in County's judgment, against the kind and extent of risk which may exist at the time such a change in insurance is required. County will exercise reasonable discretion in such a review and will request increased coverage only in the event that a tenant should occupy the building whose activities are more hazardous than those of existing tenants. ARTICLE 10 INDEMNITY 10.1 County's Indemnity. County shall indemnify and defend Lessor and hold it harmless from and against any damages, losses or liabilities (collectively, a "Claim"), to the extent arising from (i) any breach or default by County of its obligations under this Lease, or (ii) the negligence or willful misconduct of County or County's agents, invitees, employees or contractors. 10.2 Lessor's Indemnitv. Lessor shall indemnify, defend and hold County harmless from and against any Claim incurred by County to the extent arising from (i) any breach or default by Lessor of its obligations under this Lease, or (ii) the negligence or willful misconduct of Lessor, Lessor's employees, agents or contractors. 10.3 Covered Claims. The obligations of Lessor and County hereunder to indemnify, defend and save each other harmless shall not apply to the extent that insurance carried by Lessor covers any Claim. ARTICLE 11 DAMAGE OR DESTRUCTION Should the Premises or Lessor's or County's merchandise, fixtures, improvements or personal property be damaged by fire, or other perils covered by the insurance Lessor is required to carry under the terms of this Lease, Lessor shall undertake to restore such merchandise, fixtures, improvements or personal f tf -10 property to substantially the same condition as they were in immediately preceding such damage or destruction. In the event of total destruction of the Premises so that the Premises are rendered unusable, either party shall have the right to terminate this Lease. ARTICLE 12 HAZARDOUS MATERIALS Lessor and County are aware of California Health & Safety Code Section 25359.7(a)..which provides in part as follows: "(a) Any owner of nonresidential real property who knows, or has reasonable cause to believe, that any release of a hazardous substance has come to be located on or beneath that real property shall, prior to the sale, lease, or rental of the real property by that owner, give written notice of that condition to the buyer, lessee, or renter of the real property. Failure of the owner to provide written notice when required by this subdivision to the buyer, lessee, or renter shall subject the owner to actual damages and any other remedies provided by law. . . " Pursuant to California Health & Safety Code Section 25359.7, Lessor hereby advises County that, except as otherwise disclosed to County in writing, Lessor does not know, or have reasonable cause to believe, that any release of a hazardous substance has come to be located on or beneath the Premises. If it is established by agreement of Lessor and County or by final order of court of competent jurisdiction that the foregoing representation and warranty of Lessor is false, then Lessor shall indemnify, hold harmless and defend County from and against all claims, liabilities, costs and expenses arising out of Lessor's breach of the foregoing representations, including, but not limited to, all costs and expenses incurred by County for testing, removal, cleaning or other remedial work related to hazardous substances, and regardless of whether any portion of such claims, liabilities, costs or expenses result, in whole or in part, from the active or passive negligence of County, its agents or employees. The foregoing environmental indemnities shall survive the expiration or termination of this Lease and/or any transfer of all or any portion of the Premises, or of any interest in this Lease, and shall be governed by the laws of the State of California. 1 4 -J I ARTICLE 13 HAZARDOUS MATERIALS. USE. AND CONDITION County agrees as follows: (a) to refrain from using or locating hazardous materials at the Premises; (b) to inform Lessor promptly, in writing, of any hazardous materials condition it knows or reasonably believes to exist at the Premises: (c) to comply with all applicable laws and regulations, including reasonable usèoregulations imposed by Lessor, in its use and occupation of the Premises; (d) subject to Lessor's maintenance obligations in Article 7, to keep the Premises in good condition and repair. ARTICLE 14 ASSIGNMENT AND SUBLETTING The County agrees not to sublet the whole or any part of the Premises, nor to assign this Lease, without in each case first securing the prior written consent thereto of Lessor. ARTICLE 15 COMPLIANCE WITH LAWS: SAFETY REOUIREMENTS (a) Lessor warrants that, as of the Effective Date of this Lease, there are no violations of any laws or ordinances, or of rules or regulations of insurance-rating organizations, which would materially affect County's use or occupancy of the Premises, and that County's Intended Use of the Premises is in compliance with all existing laws and insurance policies affecting the Premises. (b) If County's Intended Use of the Premises shall be prohibited at any time during the Term or any extensions thereof by any federal, state or local statute, ordinance or regulation, the Term shall automatically terminate as of the effective day of such prohibition and all rent owing under this Lease shall be equitably pro-rated on a ~ diem basis as of the date of such termination; provided, however, that County may elect to continue as the tenant on the Premises in the event that such prohibition of County's Intended Use does not also prohibit another comparable use permitted by applicable zoning laws or ordinances, subject to Lessor's reasonable written approval thereof. (c) The required test procedures for fire extinguishing systems set forth in the Uniform Fire Code, 1988 Edition, Part VIII, Division III, Appendix IIIC, entitled "Testing Fire- Extinguishing Systems, Standpipes and Combination Systems," shall be the responsibility of Lessor. ß Lf-J~ (d) In the event Lessor neglects, fails or refuses to maintain the Premises as provided herein, County may, without prejudice to any other remedies provided in this Lease, exercise - one of the following options: (1) terminate this Lease; or (2) cure Lessor's default by performance of any act, including payment of money. ,. ;A&TICLE 16 IMPROVEMENTS AND ALTERATIONS Neither County nor Lessor shall make any alterations, improvements or additions in or about the Premises without the prior written consent of the other party. ARTICLE 17 LESSOR'S ACCESS TO PREMISES Lessor shall have access to the Premises at reasonable times on reasonable prior written notice to County's Lease Administrator (except in the case of an emergency, when notice shall be commensurate with the circumstances). Lessor shall use all reasonable efforts in connection with such access to minimize interference with County's use and enjoyment of the Premises. ARTICLE 18 GENERAL PROVISIONS 18.1 Authoritv. Lessor represents and warrants that it has full power and authority to execute and fully perform its obligations under this Lease pursuant to its governing instruments, without the need for any further action, and that the person(s) executing this Lease on behalf of Lessor are the duly designated agents of Lessor and are authorized to do so. 18.2 Captions. The captions and headings appearing in this Lease are inserted for convenience only and in no way define, limit, construe, or describe the scope or intent of the provisions of this Lease. 18.3 County Approval. Except where stated herein to the contrary, the phrases "County's approval," and "County's written approval" or such similar phrases shall mean approval of County's Lease Administrator or said Administrator's representative as authorized by said administrator in writing. For purposes of this Lease, County's Lease Administrator shall be the Director of the County Department of General Services. :I Lf-)3 18.4 Cumulative Remedies. In the event of a default under this Lease, each party shall have any and all remedîesavailable at law or in equity. Any such remedies are cumulative and not exclusive of any other remedies under this Lease to which the non-defaulting party may be entitled. 18.5 Entire Aareement. This Lease, together with any addenda, exhibits and riders attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof, and all ~~ior or contemporaneous agreements, understandings and represen~ations, oral or written, are superseded. 18.6 Governina Law. This Lease shall be governed, i construed and enforced in accordance with the laws of the state ; of California. ~ 18.7 Modification. The provisions of this Lease may not be modified, except by a written instrument signed by both parties. 18.8 Notices. All notices, demands, requests or other communication required or permitted to be given hereunder ("Notices") shall be in writing and (i) delivered in person to an officer or duly authorized representative of the other party, or (ii) sent by First Class United states Mail, postage prepaid to Lessor and County at the appropriate address set forth below, or to such other address as Lessor or County may hereafter designate by written notice to the other party. Any such Notice shall be deemed duly given upon receipt if delivered as set forth under (i), above, or, in case of (ii) above, forty-eight (48) hours from the time of mailing if mailed as provided in this section. Lessor's Address for notice: city of Chula Vista Attn: city Manager 276 Fourth Avenue Chula Vista, CA 91910 County's Address for notice: Director, Department of General Services Building 2 5555 Overland Avenue, Suite 2500 San Diego, California 92123 18.9 Partial Invaliditv. If any provision of this Lease is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Lease shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent permitted by law. yf 4~J4 18.10 Successors & Assiqns. This Lease shall be binding on and inure to the benefit of the parties and their successors and assigns, except as may otherwise be provided herein. 18.11 Time of Essence. Time is of the essence of each and every provision of this Lease. 18.12 Waiver. No provision of this Lease or the breach thereof shall be deemed waived, except by written consent of the party against whom the ~~iver is claimed. IN WITNESS WHEREOF, County and Lessor have executed this Lease effective as of the date first written above. County: Lessor: COUNTY OF SAN DIEGO, a City of Chula vista political subdivision of the State of California By: SALLY B. HAZZARD-DIAZ, Mayor Director Department of General Services Approved as to Form City Attorney Acknowledged & Approved by Redevelopment Agency of City of Chula Vista By: 50480985 )Á ~-J~ ""'Of""""« '" "" wi,.." C,"'."', ",...." ,.""", ,."", ",,;.. '" < """"";""""""""""""""","'""""""""", ¡!E;:i'1:m;~ i¡;¡¡r:::¡i;:¡1::::'¡1::!~:¡:::¡::¡:!:'¡!i:!'m:,~~:!:: ",."""".",.""...'c"", ,. ..,..""" "..,.". "". """"". ..,....".."".",."."".""""",..,~""",,. : :~::',:;;:';;:;:.:;-.':,::';:;~:; ::::: ""'" "", ,. ",......." "."'.".,.., "w"" " """""""""""" "... """""""'""",.""....."..."",.."""." , ."...".,.... ,"'" """.., ,. "."" "". ,. ",..,...""."'."..""""....""""".,...""",.. """'.,. """,..".. """,.,) '.m OF ¡"¡,..,, "... W"'.". "". ", ...." ,;.... ,....... ".., ""~""""""""'" ..... I' I' I I C' ',.' ", ó"" "." -', "L' ""ø ",,'" com ENO'N""NO O""'ON WU',," """ ".".... PRC?pERTY RECORD DRAWING 'O"" ';;' DEPARTMENT OF PUBLIC WORKS .. "" , CHULA VISTA . "Ó;, COUNTY OF SAN DIEGO ,.n..".." nn.we CA""TV """ nl"~ ~ .",..",...."... """"""""""'" ".."",........,," """>~L 4-lw RESOLUTION NO. I ï to t-¡ 3 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING SUBLEASE AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND THE COUNTY OF SAN DIEGO FOR THE LEASING OF LEGISLATIVE OFFICE SPACE FOR THE FIRST DISTRICT SUPERVISOR'S FIELD OFFICE WHEREAS, a City lease that provides San Diego County approximately 325 square feet of office space in the city's Legislative Office Building for the First District Supervisor expired on June 30, 1994; and, WHEREAS, staff has negotiated a new agreement with the County to continue leasing space for the First District Supervisor from July 1, 1994 thrugh June 30, 1997, with terms similar to those in the leases between the City and the State for legislative office space for Senator Peace and Assemblywoman Ducheny; and WHEREAS, the December 1, 1993 Lease Agreement between the city of Chula vista and the Redevelopment Agency allows the City to sublease space in the Legislative Office Building contingent on obtaining a opinion of bond counsel that such a sublease will not cause the related certificate of Participation to be "private activity bonds" under applicable tax law, and Jones Hall Hill & White has provided such an opinion dated July 22, 1994. NOW, THEREFORE, BE IT FURTHER RESOLVED the City Council of the city of Chula vista does hereby approve Sublease Agreement between the city of Chula vista and the County of San Diego for the leasing of legislative office space for the First District Supervisor's Field Office, a copy of which is on file in the office of the City Clerk as Document No.----- (to be completed by the City Clerk in the final document). BE IT FURTHER RESOLVED that the Mayor of the city of Chula vista is hereby authorized and directed to execute said Lease for and on behalf of the city of Chula Vl"t72 9 presented..,.- AP~rn ed as ti 't bye 1 ' , k CA . ff"J I / ~ / / ,/ .1 I . Æ£.N./ V ¡Z, /t ,'~'---------- . 1AA-L /I /' IÍJames R. Thomson, Deputy Bruce M. Bo gaar~ C ty '. City Manager Attorney .... / c:\rs\lease1st.sup - 4~)7 , . This page intentionally left blank. 1-( -} ~ RESOLUTION NO.~ RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ACKNOWLEDGING AND APPROVING SUBLEASE AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND THE COUNTY OF SAN DIEGO FOR THE LEASING OF LEGISLATIVE OFFICE SPACE FOR THE FIRST DISTRICT SUPERVISOR'S FIELD OFFICE WHEREAS, a city lease that provides San Diego County approximately 325 square feet of office space in the City's Legislative Office Building for the First District Supervisor expired on June 30, 1994; and, WHEREAS, staff has negotiated a new agreement with the County to continue leasing space for the First District Supervisor from July 1, 1994 thrugh June 30, 1997, with terms similar to those in the leases between the City and the State for legislative office space for Senator Peace and Assemblywoman Ducheny; and WHEREAS, the December 1, 1993 Lease Agreement between the city of Chula vista and the Redevelopment Agency allows the City to sublease space in the Legislative Office Building contingent on obtaining a opinion of bond counsel that such a sublease will not cause the related Certificate of Participation to be "private activity bonds" under applicable tax law, and Jones Hall Hill & White has provided such an opinion dated July 22, 1994. NOW, THEREFORE, BE IT FURTHER RESOLVED the Revelopment Agency of the City of Chula vista does hereby consent to, acknowledge and approve Sublease Agreement between the City of Chula vista and the County of San Diego for the leasing of legislative office space for the First District Supervisor's Field Office, a copy of which is on file in the office of the City Clerk as Document No.------ (to be completed by the City Clerk in the final doc~ent). J p~o,=t:~y rffOdt"í, fm:Vi ("t / I I ¿;/iM" I ' 4M / \ ,Ice>"-- ! ames R. Thomson, Deputy Bruce M. Bo gaa d, City ; ity Manager Attorney ( c:\rs\lease1st.sup \. ~ 4-lq , . This page intentionally left blank. 4~Jû , . This page intentionally left blank. {¡r4 REDEVELOPMENT AGENCY AGENDA STATEMENT Item ~5 Meeting Date 10/04/94 ITEM TITLE: REPORT: Requesting Authorization for the Executive Director to Prepare a Lease and to Hold a Public Hearing for Interim use of Agency Property Located at 801 Broadway by the Urban Corps SUBMITTED BY: . I D ¿t;. Commumty Deve opment ~tor ' REVIEWED BY: Executive Director~!J). (4/5tbs Vote: Yes - No ...K.-) Council Refemd Number: N/A BACKGROUND: The Agency recently purchased the South Bay Chevrolet Dealership at 801 Broadway as part of the Auto Park project. The Chevrolet Dealer will be relocating to Otay Valley Road in September. There are currently no re-use proposals for this site. The Conservation Coordinator has requested the temporary use of the site by the Urban Corps for an oil recycling education program. RECOMMENDATION: That the Redevelopment Agency accept the report and authorize the Redevelopment Agency to hold the required public hearing on November 1, 1994 and prepare a lease with the Urban Corps for the purpose of operating an oil recycling education programs as an interirn use at 801 Broadway. BOARDS AND COMMISSIONS RECOMMENDATION: The Southwest PAC currently lacks a quorum and is due to have several vacancies filled later this month. The requested uses of the site will be brought before them for information and comment. The Conservation Coordinator and Cornrnunity Developrnent staff made a presentation to the Broadway Business Association regarding the used oil education program's potential use of the site on September 15, 1994. The Broadway Business Association did not take a position on the proposed use. DISCUSSION: The Urban Corps has expressed interest in temporarily occupying a portion of the South Bay Chevrolet Dealership on Broadway and K Street. The property is currently owned by the Redevelopment Agency and is expected to be vacated by South Bay Chevrolet in October when they move into their new facility on Otay Valley Road. The facility consists of approximately 4 acres of land, the dealership building and three repair bay buildings. The Urban Corps would use approxirnately one acre that includes the dealership and one attached service bay. The Urban Corps use of approximately one acre of the site will not eliminate the City's use of the remaining portion. The Conservation Coordinator, Michael Meacham contacted the Community Development Department requesting assistance in identifying a site for the Used Oil Recycling Public Education Grant that the City was recently awarded. Community Development staff suggested 5-1 to4 Page 2, Item .J.J Meeting Date 10/04/94 that the South Bay Chevrolet site may be suitable for a limited term. A letter outlining the program and requesting the Community Development Department's assistance is attached (Attachrnent I). The Grant is a public education and information program that does not require the City or its sub- contractor, the Urban Corps to conveyor store used oil. Used oil and other potentially hazardous wastes will not be brought to or stored on the South Bay Chevrolet property. The showroorn offices and the attached parts department would be used as an office and operations center for the irnplementation of the grant. The Urban Corps rnay also use the attached service bay area for additional storage. The Urban Corps will have staff at the site five to six days per week. Their presence will provide security for the facility and assist the City in preventing the typical unauthorized use and deterioration that often occurs at a vacant property. The Urban Corps has agreed, as a part of the proposed lease, to keep the property free of graffiti, weeds and debris. The Conservation Coordinator has also budgeted Grant funds for the Urban Corps to pay rent. Rental payments to the Redevelopment Agency are subject to approval by the State. Subsequent to the State's approval, the Conservation Coordinator estimates that approximately $3,600 will be available to pay rent for the estimated twelve month period and that more funds may be available at the end of the Grant. California Community Development Law (Health and Safety Code Section 33433) requires a public hearing noticed in a community newspaper prior to the approval of a subsidized sale or lease of property acquired with tax increment funds. Staff is requesting authorization from the Agency to schedule the public hearing and prepare a lease with the Urban Corps. The Engineering Department has also requested the use of a portion of the parking/storage area by the Broadway reconstruction contractor for storage of an office trailer and sorne construction materials. The contractor's storage area will be internally fenced offfor security. The availability of this site for interim storage at no cost was included in the bid advertisement for the road construction work. The size of the site would allow use by the contractor and the Urban Corps. South Bay Community Services initially was interested in renting a portion of the South Bay Chevrolet site from the Agency for use as a Teen Center but has since entered into negotiations with the owner of the vacant Shakey's restaurant at 825 Broadway. This site is directly adjacent to the Chevrolet dealership and would require fewer tenant improvements. Since the building is smaller and has ample off-street parking it will be more adaptable and manageable for the proposed use. Staff had previously determined that a Conditional Use Permit was not required for this land use (teen club) in a Commercial Thoroughfare Zone. Staff will keep the Agency appraised of the Teen Club's status. The land use proposed by the Urban Corps as well as the contractor's storage yard require t5~/- ~ .- -. Page 3, Item fj¡¿_f; Meeting Date 10/04/94 issuance of Administrative Special Use Permits. A permit has been issued for the contractor's storage area. Staff will process a perrnit for the Urban Corps subsequent to the public hearing. FISCAL IMPACf: The South Bay Chevrolet site was identified as an Agency property recommended to be sold in order to provide revenue to balance the Agency's FY 94-95 budget. The Urban Corps will be required to waive relocation assistance and forego any claims of loss of goodwill in exchange for use of the property. Additionally, the Urban Corps will agree to waive owner participation rights and will be subject to eviction for any reason the Agency sees fit including an interirn use for the property with 30 days notice. Entering into a temporary lease does not preclude the Agency from selling the property. A request for proposal is being advertised and sent out to a list of brokers/developers this week with responses due back to the Agency on or before November 29, 1994. [DR\DlSK 6\CHEVY3.AGD] )/3 &3 . -. -. , . This page intentionally left blank. 5-1'