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HomeMy WebLinkAboutrda min 1990/01/18 MINUTES OF A REGULAR MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, CALIFORNIA Thursday, January 18~ 1990 Council Conference Room ~0 p~m~ City Hall l~ ROLL CALL MEMBERS PRESENT: Chairman Cox; Members Moore, McCandliss, Nader and Malcolm MEMBERS ABSENT: None STAFF PRESENT: Executive Director Goss; Community Development Director Salomone; Agency Attorney Harron 2~ APPROVAL OF MINUTES ~ December 7, 1989 MSUC (McCandliss/Moore) approve the minutes of December 7, 1989 as submitted~ (The vote was 4-0; Member Malcolm was not present for the vote.) CONSENT CALENDAR (Items 3 through 10) Items 6, 8~ 9 and lO were pulled from the Consent Calendar° THE BALANCE OF THE CONSENT CALENDAR WAS OFFERED BY MEMBER MOORE {ITEMS 3, 4, 5 AND 7), the reading of the text was waived by unanimous consent, passed and approved unanimously. 3~ WRITTEN COMMUNICATION a. Letter from Jeffrey S~ Latimer, Perlman Properties of California, 91321, regarding interest in the possible purchase of the Street/ Merziotis property for hotel development 4. RESOLUTION 1053 APPROVING A LEASE WITH SAN DIEGO SHIPBUILDING & REPAIR, INC. FOR AGENCY-OWNED PROPERTY LOCATED AT 980 F STREET WITHIN THE BAYFRONT PROJECT AREA At the meeting of September 7, 1989, the Agency directed staff to execute a three-year extension of the lease with San Diego Shipbuilding & Repair subject to submission of documentation, to the satisfaction of the City Attorney~ that the company had received a contract to construct ferries for the State of Hawaii~ Documentation was submitted, reviewed and approved by the City Attorney~ It was recommended that the Agency authorize the three-year extension of the lease. $~ RESOLUTION 1054 ENTERING INTO AN AGREEMENT WITH P & D TECHNOLOGIES, INC. FOR THE PREPARATION OF AN EIR FOR THE SOUTH BAYFRONT AND APPROPRIATING $97,670 FROM THE TOWN CENTRE/BAYFRONT PROJECT FUND THEREFOR AGENCY HINUTES -2- January 18, 1990 On July ~5, 1989, the City Council directed staff to prepare a General Plan ~endment to change the current industrial land use of approximately 214.50 acres of land located south of J Street and west of Bay Boulevard (South Bayfront) to a commercial visitor land use designation. Before the amendment to the General Plan can proceed, an environmental impact report on the proposed discretionary action(s) must be conducted° The consulting firm of P & D Technologies, Inc. is currently under contract to the City for the preparation of environmental documents for the adoption of the Chula Vista General Plan Update~ It was recommended that the current contract be extended to include the proposed South Bayfront General Plan Amendment (GPA) and other actions necessary to bring existing land use plans into conformance with the GPA proposed. 7. RESOIUTIO~ 1055 ENTERING INTO AN OWNER PARTICIPATION AGREEMENT WITN VERNA DISNEY FOR THE REMODELING OF THE DISNEY ARCADE LOCATED AT 207-209 THIRD AVENUE WITHIN THE TOWII CENTRE I REDEVELOPMENT PROJECT AREA At its meeting of November 16, 1989, the Redevelopment Agency considered Verna Disney's request to approve revised design plans for the remodeling of the Disney Arcade located at 207-209 Third Avenue. The request came as an appeal to tile denial by the Design Review Committee because of the extensive use of a~nings~ The Agency approved the revised plans and directed staff to prepare an Owner Participation Agreement. END OF CONSENT CALENDAR PULLED ITEMS 6. RESOLUTION 1056 ACCEPTING BID AND AWARDING CONTRACT FOR "REMOVAL AND REPLACEMENT OF PORTIONS OF EXISTING DECORATIVE CROSSWALKS IN THIRD AVENUE BETWEEN "E" STREET AND "F" STREET IN THE CITY OF CHULA VISTA, CA" On November 29, 1989, the Director of Public Works received sealed bids for "Removal and Replacement of Portions of Existing Decorative Crosswalks in Third Avenue between "E" Street and "F" Street in the City of Chula Vista, CA." This project was budgeted in FY 1989-90. The work includes removal of existing improvements and construction of PCC curb, 8-inch PCC slab work, 8-inch colored stamped concrete, processed miscellaneous base, asphalt concrete, sawcutting and traffic control. It was recommended that the Agency accept the bids and award the contract to DoK. Construction Company in the amount of $18,232~90. Community Development Director Sa!omone noted that the Town Centre Project Area Committee at their meeting of January 18 requested that the contract be amended to put conduits out to the medians to provide the means for such uses as Christmas decorations~ IF the cost for adding this to the contract is more than the contingency amount, the contract will be brought back to the Agency before it is awarded. AGENCY MINUTES -3- January 18, 1990 RESOLUTION OFFERED BY CHAIRMAN COX, with the notation that the work requested by the Project Area Committee be part of the contingency, the reading of the text was waived by unanimous consent, passed and was approved unanimously. 9. REPORT: CLOSE OUT OF BRANDYWINE CLASSICS PROJECT The Redevelopment Agency provided $1~6 million from the Low and Moderate Income Housing Fund to capitalize this first-time home buyer condominium project developed by Housing Opportunities, Inc. {HOI) at East Orange Avenue and Brandywine Avenue. The funds loaned to HOI have been repaid and all units are sold. The Cooperation Agreement, as amended on April 21, 1988, called for the reimbursement to the Agency by HOI of certain profits and overhead amounts upon project completion~ Mr. Klaus ilendenhall, President of HOI, presented a check to the Agency in the amount of $92,072. He expressed his thanks for the Agency's cooperation and support involved with this project~ 8~ REPORT~ REQUEST FOR PROPOSAL/THIRD AVENUE AND ALVARADO STREET At its meeting of December 7, 1989, the Agency directed staff to develop a Request for Proposals (RFP) for the sale and development of Agency property located at Third Avenue and Alvarado Street. Member McCandliss commented that the RFP is written in a very general manner and that it maximizes the City's flexibility. She pointed out that the RFP may be so flexible that the well-established developers might pass on a bid because they have no idea of whether they will be successful or not. Member Malcolm noted that the broader a RFP is, the more proposals will be received~ He believes the RFP is general in order to allow flexibility and suggested that perhaps a developer will bring forth a proposal for a different use not yet thought of. Chairman Cox noted a concern that everything in the staff report and a major portion of the RFP references "sale." He suggested keeping equal emphasis as to whether it is going to be a "sale" or a "lease." ~lember Moore commented that in figuring out the cost involved in the acquisition of property, costs other than the purchase cost should be included (appraisal costs, consultant costs, estimate on staff time/cost, etc.). This information would be for the information of Agency members~ not part of the RFP~ MSUC /~cCandliss/Moore) to approve staff recommendation with the suggestion of Chairman Cox to keep the RFP on an equal basis as far as whether it will be a sale or a lease~ lO~ REPORT PROVIDING STATUS UPDATE ON OFF-RAMP FOR I-5 AT E STREET On December 7, 1989, the Agency approved a staff recommendation to appeal the Federal Highway Administration (FHWA) decision which prohibited the AGENCY MINUTES -4- January 18, 1990 configuration of the southbound Interstate 5 "E" Street off-ramp that had been agreed upon by the Agency and CalTrans. On December 28, 1989, City staff met with CalTrans staff to discuss an appeal of the FHWA decision. At that meeting CalTrans staff and Bill Dotson, the City's consultant in matters relating to CalTrans, indicated that they believed that FHWA would reject the appeal and that it would be beneficial to explore ramp options and agree on an option 'that would be acceptable to all parties. It was recommended that the Agency direct staff to negotiate with CalTrans regarding modifications to the existing agreement to allow the ramp configuration shown in Exhibit A to the staff report and to designate which agency will be responsible for design, obtaining approvals, and construction of the temporary access road to serve Parcel l~ MSUC (Co~/Nader) to approve the staff report. ll~ OR_/~_L COI~M_U_N~!CATI_QN_S~ Ms~ Carol Freno, 3703 Alta Loma Drive, Bonita, addressed the Agency on behalf of Crossroads~ They request that the City respond to the December l? ~rticle in the San Diego Tribune regarding the operation and character of the principal~ i-nv~ved in 1]~ula Vista Investors /CVI). They believe that if the City intends to pursue the various applications of this project with the investor discussed in the article, then they would like some assurance that the questioning of the validity of this article will be looked into. They would like to know when they can expect a reply. Chairman Cox pointed out this topic will be discussed under Member Comments at tNis meeting. lr~ Will Hyde, 803 Vista Way, Chula Vista, commented that it is very difficult to hear in the portion of this room that is reserved for members of the public ~o sit. He pointed out that Redevelopment Agency meetings are very important to the general public and suggested the meetings be held in the Council Chambers or improve the sound system in this room. Be also suggested that when people are addressing an item and are using a map or display, that the display be presented in such a way that it may be viewed by the public as well as by the Agency~ 13, DIRECFOR'S REPORT Executive Director Goss introduced Chris Salomone as the new Community levelopment Director. 14~ CHAIRMAN'S REPORT: None. AGENCY MINUTES -5- January 18, 1990 15 MEMBERS' COMMENTS: Member l.la der $ a. Commented that the Assistant City Manager is quoted in 'the Star News stating that the City Council is leaning towards evic~ American Legion from its present location at Eucalyptus Park~ Hember Nader stated he is not leaning in that direction and wanted it made part of the record ~qember 1,~cCandliss: a, i]o~mented that she asked that the Agency take another look at the ioan that is outstanding with Chula Vista Investors. The items identified ~n the newspaper article of December 19~ coupled with the ~rticle on Mr Boomis of some time before, raises some very serious questions about the business practices and business judgments of the urrent Bayfront landowner~ She wanted an opportunity to look at the loan and provide direction to staff on what the Agency would like to see happen with the loan~ Member McCandliss pointed out that the advantages of entering into the loan were (]) it held the property for Rohr for a period of time; {2) it allowed the Agency/City access to the mitigation credits; (3) the loan was very well secured. Member McCandliss further commented there was value in entering into the loan> thereby joining into a partnership with the developer in order to work together in a cooperative manner. She is confident that the loan is very well sec~Jred, however, she has not found the cooperative relationship. She believes the Agency may need to go back to the traditional mode that exists wi~t~ developers in dealing with CVI. The developer will present his plan, the A~ency/Council will evaluate it, and tell the developer whether it is acc~ptable or not~ She believes the Agency should consider calling in the !o~n and removing that link to the developer. The only outstanding issue that she feels remains an advantage to the City in this loan, is the question of the mitigation credits~ Before the next option payment in March~ she would like to provide direction to staff to determine if the mitigation credits wilt be needed ~how they will be used, is the $40~000 price acceptable). qr Goss stated that at the time discussions were entered into with Mr. ~arke[t eF CVI, background checks were conducted with lending institutions, ci[ies where they worked, consultants, law enforcement officials and others regarding past activities of the owner/developer. Additionally~ the Community Development Director at that time went to S~ockton on two occasions (where the developer is based) to meet members of the family and individuals associated with the project. It was concluded at that time that the proposed project was ~ithin the capability of CVI In carefully reading the recent Tribune article, the dates of various lawsuits Filed all occurred after the City had entered into agreements with CVI. When the information regarding the la,,~suits~ illegal actions, etc. became known, staff began to look into it. Genorally, it appears that some of the litigation has been dropped; some may AGENCY MINUTES -6- January 18, 1990 be resolved by settlement; and some litigation is in the very early stage~ Mr~ Goss stated that in terms of the outstanding loans, CVI did follow through on the loans made with them, One of the loans was a bridge loan in order to get the property sold to Rohr~ That sale happened, the loan was repaid. The interest owed on the remainder of the loan is being paid when it is due. An error in the Tribune article that pertained to the City, is that the loan was made based upon the City's assessment of the financial standing of the Barkett Family and the money they had access to. It is his recollection that the loan was based upon the value of the land. At this point, $4.3 million is outstanding on the loan~ of that, $1~6 is related to 'the mitigation credits. CVI is paying interest during this period of time of 8% on the $2~7 million (no interest is being paid on the mitigation credits). The $2.7 million part of the loan will run for l0 years unless it is called within the first two years. '!'he purpose of the two-year period was to enter into an Exclusive Negotiation Agreement with CVI at which time the City agreed to negotiate with them and CVI agreed not to sell or subdivide the property except for the option of the mitigation credits. Responding to questions, Mr. Goss stated there has been an in-house staff analysis that there was potential use of the mitigation credits in terms of being able to have them applied against projects that would benefit Chula Vista~ particularly along the waterfront. It was also the conclusion that those projects would be initiated by private parties, but more likely by the Port o~ San Diego~ One of the reasons the City entered into the loan with mitigation credits was to provide an opportunity for the Port of San Diego to obtain them for projects that would benefit Chula Vista or the South Bay~ At this point~ there has been no action on the part of the Port expressing an interest in acquiring the mitigation credits. Chairman Cox commented that at the time the City/Agency was looking into making this loan, the Port District and the State Coastal Conservancy had already entered into an agreement to do the South Bay Enhancement Study (which has not yet been completed). That study was going to help identify those areas south of the 24th Street Channel that would not be able to have any development because of environmental significance and those areas might be suitable for some type of economic usage or development usage. Once that st~dy is done, there will be a better idea of what need or potential there might be of future need of mitigation credits~ He also commented one of the most critical points of the rationale for supporting the loan was that the ability to allow Rohr to acquire the ll acres of land was preserved~ Chairman Cox further commented he believes there is an erroneous perception that the Redevelopment Agency is a partner with Mr. Barkett. Clearly the Agency is not~ Mr. Barkett is in the process of putting together a proposal for development which at this point has not been submitted to the City of Chula Vista~ Mr~ Paul Peterson, Attorney representing Chula Vista Investors, responded to Member McCandliss' comments~ Regarding the newspaper article, it is his - belief and his client's belief that the article was a "character AGENCY MINUTES -7- January 18, 1990 assassination°" On the other hand, they recognize the City's right to look into the issues raised and see whether or not there are matters of substance that would affect how the loan transaction is looked at as well as entering into a Disposition and Development Agreement (DDA). Regarding the DDA, a number of discussions have been held~ Progress is being made and negotiations are taking place~ However, the process has been slowed down due to an environmental problem~ The Fish and Wildlife Service requested a full bird study on how the buildings would affect bird flight patterns, etc. That study will not be ready until April 26. His client is proceeding in good faith trying to get this project to the Council and to the Agency for approval. Regardin§ the comments about a lack of cooperation, from the perspective of his clien~ they are dealing with a very large project which is in the study phase~ In their view~ to make major changes in the project based upon the conferences held with the Council Subcommittee, is not appropriate. Some changes have been made and they have responded in a number of ways to concerns raised~ The process needs to evolve and studies completed before his client is ready to make major changes~ Mr, Peterson stated he believes his client has tried to live up to the arrangements made with the City; tried to be rep~table and to deal with the City on the table, Member Nader asked Mr~ Peterson if he was stating that his client is not "cast in concrete'~ regarding the project as it has been presented to date. Mr. Peterson respo~ded ~hat is correct~ Member Nader clarified that the Agency co~ld expect to see considerably more flexibility than has been in evidence so far wi th regard to modifying the plan once the EIR is complete. Mr~ Peterson responded affirmatively. Responding to Member Moore's questions, Mr~ Goss stated the two year negotiating period will end in August. In order to call the loan it would be necessary to take action by May~ ~s~ Carol Freno~ representing Crossroads~ stated it is her organization's belief that the investigation of the newspaper article should continue and be brought to a satisfactory conclusion. They do not believe that the developer has shown any major changes in the project from its first presentation. They are concerned that the project will continue and have a considerable amount of f~nds invested by the deve!oper~ therefore~ making it difficult to make changes down stream~ Chairn~an Cox commented that the newspaper article raised a lot of questions~ He does not see the City per se responding to the article~ He feels it is necessa~ to monitor the allegations, Mr. Barkett is wi thin his right to submit whatever he wa~ts~ an6 the Agency will be within its right to evaluate the s~bmittal and make a decision with regard to what they are going to allow ~n that area~ A lot of review will take place with regard to this project~ ~h~e are many 'issues related to environmental issues~ traffic, drainage, 404 i]ermits~ etc,, that are going to be evaluated. AGENCY MINUTES -8- January 18, 1990 Member Malcolm commented that he was opposed to the loan from the beginning (he did not feel it was necessary)~ However, he believes the Agency made a commitment and regardless of his initial feelings on the loan, he thinks the Agency should keep this matter on the "high ground" and not turn it into a political football that the newspapers can play with, editorialize and do further damage to the Bayfront. He believes the Agency is a partner with Mr. Barkett. He has not found CVI to be uncooperative. He has always found the developer to be responsive. He would like for the Agency to continue with CVI as a partner and to continue working together. Member Nader commented that the real issue before the Agency is the merits of the development plan~ He believes the Agency is a partner with Mr. Barkett in the sense that he is the owner of land in a redevelopment area. He believes a decision is to be made on the merits of the proposal; if he votes against the plan it will not be on the basis of legal allegations that have not yet been proven in court. One thing that has disturbed him as a subcommittee member, is that it seemed to him that there was too much of a "traditional relationship" with the developer. The developer came in with his proposal, the Agency reacted and in Member Nader's perception, the Agency dqd not thoroughly enough follow through with their own vision. The initiative and the vision has for the most part come from the developer/owner's side. Member Nader questioned what Crossroads wants the Agency to do regarding the newspaper article~ Ms. Freno responded that if there are questions regarding the character of the investor, then the questions need to be addressed. Crossroads feels since the Agency is considering a partnership with this investor, there needs to be a response to the allegations publicly. Mr. Will Hyde, also representing Crossroads, stated the Agency is in a partnership relationship with Mr. Barkett. He believes the Agency should be an active partner by letting the developer know up front that the developer will not get a lot of cooperation from this Agency/City unless he sits down and talks to the Agency to find out what the Agency would tike to see happen on that land. It is the City that is going to comment on the Local Coastal Plan (LCP) change proposal. The LCP Plan change will have to be submitted by the City with its recommendations4 ~r~ Hyde further stated the Agency needs to evaluate the plan together (developer and Agency)~ secondly, the Agency needs to determine the capability (Df Mr~ Barkett as a developer; and third, the ethical problems that are suggested by the article need to be looked into to determine whether or not there is validity to them~ IqOTION MS (McCandliss/Cox) move to (1) direct staff to continue the background investigations of CVI; (2) in the next thirty days that staff work on developing a plan for the use of the mitigation credits (an analysis of whether or not the amount is appropriate; whether or not an appraisal is - needed)~ (3) have discussion of the mitigation credits and consideration of the loan docketed again before the March 1 deadline. AGENCY MINUTES -9- January 18, 1990 Member Malcolm commented he believes the first part of the motion is ~nnecessary and because of that he will vote against the motion. Regarding reviewing the loan prior to March~ he is not convinced that is the right time to review it~ Member Nader stated he needs an independent economic analysis of the project before he can tell the developer with specificity what needs to be done. He noted frustration with aot having received this information~ He further commented it is a mistake to rely on information provided by the developer~ as a matter of policy this should not be done. Chairman C~s.× co~nented that there is an existing Local Coastal Plan that was approved~ What is going on now is that there is a desire on the part of the property owner to make modifications to ito It~is his burden to convince the Agency/Council that his plan is a superior plan. CVI's plan, however, at this point is not one that Chairman Cox would be willing to support without significant changes.. VOTE ON -' ~ ~ E MOTION The motion carried~ (The vote was 4~1~ Member Malcolm voting no~) Member Malcolm commented that the heat in the Parkway Gym is not working~ Mr. Goss reported that the Parks and Recreation Department has been asked to look at the issues of heating and air conditioning for the gym to see what needs to be done to correct the situation. Member Nader reported that he is attending the N.S./Mexico Sister City Conference this week~ Chairman ~ ,, I.o,, stated there is a conflict with regard to the regularly scheduled meeting of 'the Agency for February 1~ SANDAG has their annual retreat on February 1 and 2. He suggested it would be appropriate to consider rescheduling the Agency meeting. MOT[ON MSUC {Cox/Moore) to refer to staff the matter of rescheduling the February 1 Agency meeti ADJOURNMENT at 6:00 p,m~ to Closed Session to discuss: Potential acquisition of property located at: East H Street - Paseo Del Rey and Tierra Del Rey (Rancho Del Rey Partnership, owner); 331 H Street (Bahia Professional Group~ Ltd., owners); and Property Disposition: 325, 327 and 329 H Stree~ (Redevelopment Agency of the City of Chula Vista, owner)~ AGENCY MINUTES -10- January 18, 1990 ADJOURNMENT AT 7:00 p.m. to the regular meeting of Thursday, February 1 1990 at 7:00 p,m, ' .... Chris Sal omone Community Development Director WPC 4345H