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HomeMy WebLinkAboutrda min 1990/03/01 MINUTES OF A REGULAR MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA~ CALIFORNIA Thursday, March l, 1990 Council Chambers 7:00 p.mo Public Services Building 1~ ROLL CALL MEMBERS PRESENT: Chairman Cox; Members Moore, McCandliss, Nader and Malcolm MEMBERS ABSENT: None STAFF PRESENT: Deputy City Manager Krempl~ Community Development Director Salomone; Assistant Community Development D~rector Gustafson; Redevelopment Coordinator Kassman; Assistant City Attorney Rudolf 2. APPROVAL OF MINUTES - February 15~ 1990 MSC (McCandlis$/Moore) to approve the minutes of February 15, 1990 as submitted, (The vote was 4-0~ Chairman Cox abstained due to his absence from that meeting~) 3. SPECIAL ORDERS OF THE DAY a. Port Commissioner's Quarterly Report Port Commissioner Robert Penner was present at the meeting. Commissioner Penner distributed a copy of a written report to Agency members, In his oral presentation Commissioner Penner highlighted the following items from his report: 1. In December, the Port District discussed Southwest Marine, Inc.'s failure to construct lease-mandated improvements~ Southwest Marine indicated that they will not complete all of the construction which represented a breach of the lease. Commissioner Penner suggested that since the adjacent area is being evaluated for the Chula Vista Nautical Activity Center~ it might be appropriate to delay any action regarding the lease hold for 90 days. 2. On January 9~ Commissioner Penner was elected Vice-Chairman of the Port District. On the same day a contract was awarded to R.Eo Staite Engineering for construction of another docking facility at the Chula Vista Launch Ramp~ It is hoped this will be completed before the summer begins. The Port has elected to be in negotiations with the City of Chula Vista and Mr~ Bill Barke%t of Chula Vista Investors regarding the possible purchase of the mitigation credits. Port staff has been asked to meet with the group that is doing the study for the Nautical Activity Center to see if they can ~'fast track" the Environmental Impact Report aspect so that by the time the mitigation credit option comes up again, it will be known whether or not the credits will be usable for the Nautical ^ctivity Center~ AGENCY MINUTES -2- March 1, t990 4. The Disadvantaged Business Enterprise Plan has been adopted by the Board of Port Commissioners. The plan will be used for all Port activities~ 5. On February 20, the two newly appointed San Diego Commissioners were sworn in, Clifford Graves and Lynn Schenk~ Mr~ Graves was sworn in as Secretary of the Board. 6. The Mayor of Chula Vista asked Commissioner Penner to check with the Port regarding whether or not additional signage could be installed demarcating the Marina Parkway Pier~ A monument sign will be installed close to the new pier. Member Malcolm commented regarding Southwest Marine. If it is the City's desire to create a linear park along the Bayfront tied into the rest of the parks and marina, he is not sure that it is the right type of tenant. If Southwest Marine is not living up to their lease, it may be more prudent for the City to find them in default of their lease and have them move out. Commissioner Penner stated that they have a great deal in the way of capital improvements into the property at the present time. To vacate their lease on the basis of the fact that they have not completed all of their capital improvements probably would not be an action that would be accomplishable. The only action that was accomplishable was to reduce the length of their lease by five years. Member Malcolm stated that a shortened lease would be a benefit to the City because it retains flexibility for the City if it is not believed that a repair yard/boat building is the type of use desired. He would like to see the waterfront opened up the entire length. Commissioner Penner pointed out there is going to be a great deal of boating activity on the Bayfront, and it may not be inappropriate to have some type of ship yard. Chairman Cox stated he is not in conflict with the concept of getting better public access more oriented towards the water. Although, he believes the usage at this site at this point is appropriate. With the completion of the California Yacht Marina there will be approximately 900 boat slips in Chula Vista. There is a need for boat repair~ Once all of the improvements are completed at Southwest Marine, it will be a state of the art type of facility for small boat storage and repair. Chairman Cox congratulated Commissioner Penner on his election as Vice-Chair. Chairman Cox also noted with regard to the Nautical Activity Center that he has never seen a proposal accepted more readily, processed more thoroughly or quickly than he has with this project. He stated he would hope that it would be possible to have the consultant selected for this project meet with the group of citizens that participated in the initial ideas of the Nautical Activity Center. Chairman Cox further stated that a referral has been made to staff to look into the benefits of using a work detail out of the Otay Mesa Prison. If in fact the City is not able to justify a full crew, he asked if Commissioner Penner would check to see if the Port District would be interested in sharing in the cost of the crew and have the duties split up between Port properties and City properties. AGENCY MINUTES -3- March l, 1990 Chairman Cox added that the Harbor Police Substation has been a boon to the area. He would hope that in the next year there would be some efforts on the part of the Port to come up with a more permanent type of facility. CONSENT CALENDAR (Items 4 through 8) Consent Calendar items 4 ao and 8 were pulled. T)IE BALANCE OF THE CONSENT CALENDAR (ITEMS 5, 6 AND 7) WAS OFFERED BY MEMBER MOORE, the reading of the text was waived by unanimous consent, passed and was approved. (The vote was 4-0; Member Malcolm was not present for the vote.) 5. RESOLUTION 1062 EXTENDING AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY AND TOPMARK, INC. TO PROVIDE ONGOING REAL ESTATE NEGOTIATION SERVICES, AUTHORIZING ADDITIONAL EXPENDITURE OF FUNDS THEREFOR, AND AUTHORIZING ADDITIONAL EXPENDITURES FOR LEGAL SERVICES AND FEASIBILITY ANALYSIS RELATED TO THE PROPOSED AUTO SALES PARK AT EAST H STREET Staff has been exploring the possibility of locating an auto sales park at East H Street in Chula Vista. The previous location was si ted on Otay Valley Road at 1-805, within the Otay Valley Redevelopment Project Area. Therefore, all costs attributable to the proposed auto park were funded with redevelopment monies. On 2/13/90, the City Council authorized the use of Community Development Block Grant funds for consultant services regarding an auto sales park at East H Street. It was recommended that the Agency take the following actions: (1) Authorize additional expenditure of $10,000 for ongoing legal services rendered by Sheppard, Mullin, Richter & Hampton; (2) extend the existing agreement with TopMark, Inc. to provide continuing real estate negotiation services, authorize the Chairman to execute same, and authorize expenditure of an additional $5,000; and (3) authorize additional expenditure of $5,000 for ongoing feasibility analysis provided by M.R. Farrell & Associates. 6. RESOLUTION 1063 ENTERING INTO AN AGREEMENT WITH TOPMARK, INC. TO PROVIDE CONSULTANT SERVICES RELATIVE TO POSSIBLE RELOCATION OF THE PRICE CLUB AND AUTHORIZING CHAIRMAN TO EXECUTE SAME The City has been involved in negotiations with the Price Club regarding their desire to relocate. The Redevelopment Agency has discussed the need for professional negotiation services relative to this relocation. It was recommended that the Agency approve the agreement with TopMark, Inc. AGENCY MINUTES -4- March l, 1990 7. RESOLUTION 1064 ACCEPTING CONTRACT WORK FOR IMPROVEMENT OF PUBLIC PARKING LOT AT 281/287 CHURCH AVENUE IN THE CITY OF CHULA VISTA, CA On August 17, 1989, the Redevelopment Agency by Resolution No. 1028 awarded a contract in the amount of $225,168.15 ($247,668.15 including contingencies) for the improvement of a public parking lot at 281/287 Church Avenue to Southland Paving, Inc. The work is now completed. It was recommended that the Agency approve the resolution accepting the contract. Chairman Cox noted there may be a potential hazardous situation at this location. There is an open drainage channel located where the sidewalk on the Church Avenue side abuts the drainage channel. He would like to see some type of coverage for the channel. Community Development Director Salomone reported that the City Engineer and staff visited the site on this date. Possible solutions were discussed. One of the options will be installed. END OF CONSENT CALENDAR PUBLIC HEARING 9. PUBLIC HEARING REGARDING THE SALE OF SPACE 49 AT ORANGE TREE MOBILEHOME PARK RESOLUTION 1065 APPROVING THE SALE OF SPACE 49 AT ORANGE TREE MOBILEHOME PARK This was a request to authorize the sale of Space 49 at Orange Tree Mobilehome Park. The sales price was based on a recent appraisal of $31,015. This being the time and placed advertised, Chairman Cox opened the public hearing. There being no members of the public present desiring to comment, Chairman Cox declared the public hearing closed. RESOLUTION OFFERED BY MEMBER McCANDLISS, the reading of the text was waived by unanimous consent, passed and was approved unanimously. 10. ORAL COMMUNICATIONS: Mr. Victor A. Nolan, 12 Via Barberini, Chula Vista, 92010, stated the Mobilehome Issues Committee met on Tuesday, February 27, 1990. Several of the members were upset because there has been a lack of action with regard to relocation or the planning of housing for people who are going to be displaced due to mobilehome parks or trailer parks that are being closed. The reason he is asking for action is that at present there has been one park already closed, two more that are tentative, and others that are going to follow. AGENCY MINUTES -5- March l, 1990 Member Malcolm pointed out this item was continued to a City Council meeting following this Redevelopment Agency meeting and suggested continuing discussion to that time. Mr. Bud Pocklington, 656 Glover Place, Chula Vista, commented regarding sharing costs involved in hiring a work detail from the prison. He noted that as a member of the Board of Directors for Sweetwater Authority, they have authorized their staff to hire a work detail from the prison to clean brush around the Sweetwater Reservoir. If the City is interested in pursuing the prospect of sharing costs, he would be happy to take this matter back to the Board of Directors. Chairman Cox stated he would welcome Mr. Pocklington discussing this matter with Sweetwater Authority~ Mr. Pocklington further commented that earlier this evening he met with Thomas Maddock~ the public advisor to the California Energy Commission. Mr. Maddock informed those present at the meeting that if the SDG&E site in Chula Vista is chosen, the decision of the California Energy Commission overrides any decision of the Chula Vista City Council. It was also apparent from discussion in that meeting that the City should be actively involved in ensuring that all of the information from the City that the Commission should be made aware of is brought forth to them during the process (which will take approximately two years). He encouraged the Council to be sure that the City is well represented in Sacramento. Member Nader noted he was also in attendance at the meeting with Mr. Pocklington and Mr. Maddock. Ne commented that SDG&E's history of keeping its word to the City has been "dismal". An agreement was made with SDG&E at the time the Council rezoned their land from visitor serving commercial to industrial, in consideration for staying out of court, that SDG&E would not make any representations to any State regulatory agencies that the land could be considered zoned industrial by the City for purposes of State regulatory proceedings. SDG&E, in one of its NOI applications, did represent to the Energy Commission that the land is zoned industrial and, therefore, their proposed land use is consistent with local regulation. In Mr. Nader's opinion, this is a violation of the agreement. Mr. Maddock was unaware (and indicated to his knowledge that the Commission at this point is unaware) of this agreement between the City and SDG&E. They were also unaware of the prior agreement with SDG&E to burn natural gas rather than oil at the South Bay Power Plant, except with prior notification to the City. Mr. Maddock indicated that both of the agreements and the violation of the agreements would be of interest to the Commission in terms of assessing the credibility of SDG&E as an applicant. He also indicated the Commission might be interested in pursuing a possible condition that in the event a Chula Vista site is approved for either of SDG&E's applications, that SDG&E be required to reduce or eliminate oil burning at the existing facilities and to perform other upgrades on the existing facilities to reduce the air pollution that they emit. AGENCY MINUTES -6- March l, 1990 Member Nader further stated that before asking the Council to take action, he would like the City Attorney to look at this matter and prepare a confidential memo if appropriate. He believes the Council should consider the possibility of declaring the last re-zoning ordinance void (never existed) because it was in consideration of an agreement that SDG&E has now violated. Chairman Cox stated if this violation has occurred he believes the Council should (1) inform SDG&E of the City's strong displeasure of the fact that they are making this representation; and 12) the City should communicate directly with the California Energy Commission letting them know what the record is with supporting documentation. Assistant City Attorney Rudolf stated a meeting took place with staff from the Energy Commission before the petition was filed and they were made aware of the history involved. Specifically, staff was directed to look at that particular part of the NOI because it was of concern to the City Council. It was Mr. Rudolf's understanding that it was appropriately stated as to what the status of the property was. This will be looked at again. 11. ITE~IS PULLED FROM THE CONSENT CALENDAR 4. WRITTEN COMMUNICATION a. LETTER DATED FEBRUARY 7, 1990 FROM RTM WEST, INC., TENANTS ON THE PROPERTY LOCATED AT FIFTH AND H STREETS, REGARDING THE EXTENSION OF SCRIPPS HOSPITAL EXCLUSIVE NEGOTIATION AGREEMENT - 300 South Pierce St., Suite 204, E1 Cajon, CA 92020 The tenants located on the northeast corner of H Street and Fifth Avenue, including Arby's, Captain Kidds, and the Fiesta Twin Cinema, requested the opportunity to address the Agency concerning future redevelopment plans being prepared by Scripps Hospital and their tenure on the site. 8. STATUS REPORT: SCRIPPS HOSPITAL EXPANSION At its meeting of October 5, 1989, the Agency entered into an Exclusive Negotiation Agreement with Scripps Hospital to develop an Owner Participation Agreement for the redevelopment of 8.9 acres at the northeast corner of Fifth Avenue and H Street. The Agreement was for an initial period of 180 days which will expire on April 3, 1990. The agreement also stipulates an automatic extension for an additional 180 days if an Owner Participation Agreement has not been reached, and provided the Agency determines Scripps has met project deadlines as detailed in the Exclusive Negotiation Agreement. At this time, Scripps has substantially met its commitments under the Agreement. It was recommended that the Agency accept the report, determine that Scripps has made substantial progress, and authorize renewal of the Exclusive Negotiation Agreement for an additional 180 days. AGENCY MINUTES -7- March l, 1990 Community Development Director Salomone reported that in May 1989, the Agency analyzed several proposals for the site. The existing uses on the site are varied including a skating rink, theater, ice cream parlor, medical use, restaurants, bank, gas station, among others, Proposals were presented to the Agency which included a supermarket and an expansion of the Scripps medical facility. At that time, staff was authorized to negotiate an Exclusive Negotiating Agreement with the Scripps organization. A series of meetings were held between that May meeting and October when an agreement was approved. That agreement is what is before the Agency again at this time. Without action by the Agency the agreement would be automatically extended for another six months. In order for the agreement not to be extended, it would require the Agency finding that the Scripps organization has not performed in good faith under the agreement. It is staff's opinion that Scripps has complied with the requirements of the agreement. The Agency counsel has prepared an Owner Participation Agreement which has been reviewed by Scripps and staff~ Mr. Salomone further reported that in January 1990, staff met with the tenants located on the proposed site. Concern was expressed by those tenants and there was a request on their part to share their concerns with the Agency. By including this item on this meeting's agenda, a forum has been created for the tenants to address the Agency. Mr. Salomone added that the Town Centre Project Area Committee met on this date and unanimously approved the process that is being undertaken with the Exclusive Negotiation Agreement with Scripps. Member Malcolm questioned what staff's understanding is regarding the relocation of the youth serving facilities. Mr. Salomone stated it is his understanding that staff will do their utmost to relocate the youth serving facilities~ Responding to questions, Mr~ Salomone stated that under the agreement, Scripps is charged with the relocation, appraisal, payments of goodwill and all of the economic burdens that this project may entail. Member Nader commented that he is concerned that staff is merely doing their "utmost" to relocate the youth serving facilities. The Agency has given clear direction that the youth serving facilities must be relocated as part of this redevelopment proposal~ Until there are assurances that this will happen, he has difficulty in supporting the proposal~ Mr~ Salomone stated he is aware of efforts made in regard to relocating the theater and skating rink, Member Nader wanted to make it clear that ultimately this project would not go forward until the relocations have been achieved. Mr. Salomone stated that by allowing the Exclusive Negotiation Agreement to go forward it is not a committal to this project. It will continue the relocation appraisal process, it will continue the environmental process and it will continue the negotiation of the Owner Participation Agreement and planning review of the project. Marcia Scully, special counsel for the Agency, pointed out that the agreement established guidelines and milestones for Scripps to meet in terms of processing the project. The agreement itself does not commit either side to AGENCY MINUTES -8- March l, 199(1 any particular commitments relative to the final project. Those commitments would be included in the Owner Participation Agreement. What the Negotiation Agreement does is simply to keep both parties talking with one another. Member McCandliss stated when the project was brought before the Agency previously, she requested a condition using the term to "successfully relocate" the businesses involved. She wanted to know why it took so long in the process for the businesses involved to have been made a part of the process. It is her goal that the businesses be "successfully relocated" and this is tied hand-in-hand to the acceptance of the redevelopment project on the site. Mr. Salomone responded that the process is progressing normally. There were no expectations when the agreement was signed in October that the issues would have been resolved at this point. There is a very diverse group of uses involved at this location. Some of the miscommunication with the tenants early in the process created the need to have this meeting. Responding to Member Moore's questions, Mr. Salomone stated that basically Scripps is on track with regard to the Schedule of Developer's Ubligation attached to the agreement. There has been some changes because staff made a determination that a focused EIR would be acceptable, which will make the schedule easier to accomplish. It is staff's opinion that at this point the applicant has met all obligations. The applicant is prepared to submit the Conditional Use Permit application on March 9. Mr. Jeff Bills, representing Scripps Hospital, stated Scripps has begun the process of carefully and successfully relocating the youth serving facilities. Regarding the theaters, they have been able to put together a proposal that has been directed towards the theaters that would involve moving them to a location where they can continue to do business. In terms of the roller skating rink, that facility requires over 18,000 square feet of space, which has made it more difficult to find a space. A number of sites have been identified. They have been unable to finalize that any of the sites being considered are viable at this time. In terms of the other entities on the site, the process has been started. The ability to relocate these tenants depends on a financial analysis that comes via the appraisal process. They have been in that process for a number of months. G.R. Bill & Company has prepared a general appraisal of property values and now is going through the process of meeting with every tenant on the property asking for financial and other information that will allow Scripps to consider all of the issues and then go through the steps necessary for making a good faith offer. Mr. Bills further pointed out it is important to remember the ability to make the good faith offer hinges on the completion of the Owner Participation Agreement. In that regard, the process has been ongoing since October. They continue to look for viable options for all entities on the site, and specifically the youth serving entities. AGENCY MINUTES -9- March l, 1990 Responding to questions, Mr. Bills stated every tenant has been approached by G.R. Bill & Company (the appraisal firm). Further, Mr. Bills stated in work Scripps has done with their medical staff, they are convinced that they can fill 120,000 square feet of medical space built in two phases. Member Malcolm expressed his dissatisfaction with the process. He believes there may be major stumbling blocks involved with this project that should be addressed up front with Scripps, rather than waiting an additional six months. Margaret Singleton, representing G.R. Bill & Company, responded to questions. She stated she was hired at the end of November 1989 to determine the value of the leasehold improvements and to prepare a good will evaluation. In order to make these determinations she needs financial information from the tenants. Some tenants have chosen not to provide this informationo She began contacting tenants in Decembero Ms. Singleton stated appraisals of leasehold and equipment are nearly completed for the locations that have allowed access. Mr. Charles Harmon, 14981 Driftwood Creek Road, E1 Cajon, CA 92020, representing RTM West, Inco (Arby's), provided copies to the Agency of a recent article from the San Diego Tribune Idated 2/28/90) expressing the views of tenants regarding the proposed re~ocation and~ a copy of a letter dated 2/26/90 which was hand delivered to Agency members on that date. He commented that they feel the use of eminent domain in order to dislodge one private business in favor of another is a very loose translation of the intent of the eminent domain power. Mr. Harmon further pointed out there is a "myth" that this is a blighted center. He reported businesses on site are doing well and do not want to give up their location. From the tenants' point of view, Scripps is in charge of this process and the City is sitting by and watching it happen. Their fear is that their interests will not be protected or understood. In his opinion, the hospital will not do anything more than what is required by the City. In the case of Arby's, they were not contacted by G.R. Bill & Company until late January. He chose not to provide the financial information requested, noting he did not believe this would be in his best interests. Mr. Harmon added he believes a mixed-use development is possible. In his understanding, 45% of the proposed project is landscaping. He questioned if this would be the best use of the land. A mixed-use development is the preferable solution to the tenants. He requested the opportunity to be a part of the process. Member McCandliss informed Mr. Harmon that at the time this matter was discussed previously, she announced that she was a member of the Community Advisory Board for Scripps. She did not participate at the Advisory Board meetings regarding this issue. After consulting with the City Attorney it was determined that she would have no conflict in voting on this issue as a member of the Redevelopment Agency. She has since resigned from the Community Advisory Board. Gail MacLeod, 6363 Greenwich Dr., Suite 250, San Diego, representing Arby's, stated she is a planning consultant. She pointed out that when the Exclusive Negotiating Agreement was approved in October the site plan and the revenue AGENCY MINUTES -10- March l, 1990 generation plan showed 21,000 square feet of medical retail. This is a large amount of square footage and she questioned how this could be justified from a tax revenue perspective. When she approached Mr. Bills about this, his response was that he would prefer to have all office space and no retail. If this is his intent, the implications of this in terms of sales tax revenue should be examined. Regarding the EIR, she asked for the Notice of Preparation for the EIR which they have yet to receive. She pointed out there is one item in the Agreement that Scripps has not complied with; they were to have submitted a traffic report to the City in October, 1989. She was told this has not been done because it is going to be made part of the EIR. Ms. MacLeod distributed copies to the Agency of excerpts from the Redevelopment Plan approved June 23, 1988. She pointed out one of the reasons for selecting the Amendment Area was the desire to facilitate the retention and expansion of as many of the existing commercial enterprises as possible through redevelopment activities. The reason for including this location in the Amendment Area was because market studies show that there is demand for additional commercial uses in the area that compliment those uses proposed for the Chula Vista Shopping Center. Ms. MacLeod pointed out the tone of the Redevelopment Plan was that there was going to be commercial re-use on this site. She also referred to a Table 1, Existing Land Use/Possible Future Uses, which is part of the Redevelopment ?~an, that shows the anticipated development/disposition is rehabilitation, redevelopment and commercial. Ms. MacLeod referred to a memo dated July 21, 1988 from Mr. Jeff Bills to Paul Desrochers (former Community Development Director) including a site plan showing the extension of facilities to the west of the current hospital site. She expressed concern that only 30 days before this memo, the Agency adopted a plan expressing that there will be commercial development/rehabilitation on this site and then it was determined that City staff had been meeting with Scripps regarding their expansion. The tenants were not made aware of the proposed Scripps expansion for a long time. Ms. MacLeod suggested the Agency ask staff to take control of this process and direct Scripps to fulfill the intent and goal for this site to facilitate keeping as many of the businesses as possible there. Arby's is a thriving business, it is not marginal, and it deserves to stay. James J~ Eischen, Jrt, 9324 Lake Country Drive, Santee, CA, attorney representing RTM West, Inco IArby's), presented a letter to the Agency urging the Agency not to renew the Exclusive Negotiating Agreement with Scripps. He pointed out that there are aspects of the Nealth and Safety Code that he is concerned about. The intent of the redevelopment/eminent domain process is to do something that is for the most public good and causes the least public injury. If this issue is not addressed in the very near future, it will be addressed when this matter comes before the judicial system. The business tenants feel strongly that there is a problem in this regard. The most appropriate forum to resolve this issue is not later on in the process when it becomes costly, but rather now is the time to solve it informally working together as people who want to have a win-win situation° AGENCY MINUTES -ll- March 1 1990 Responding to questions regarding a possible mixed-use proposal for the site, Mr. Eischen stated that in looking at the proposed plan, the frontage businesses on H Street are slated for landscaping. They are suggesting it may not be incompatible to have a hospital expansion and allow some businesses to remain, Mr. Anthony Ditty, 3131 Camino del Rio North, Suite 900, San Diego, attorney representing Express Gasoline, reported the management of Express Gasoline was not made aware of the proposed Scripps expansion until yesterday. He believes the G.R. Bill & Co. representative may have been talkin9 with an employee of the gas station° He is concerned that if this agreement is extended for another 180 days and additional money is expended, it will create a situation where the Agency may be forced into going ahead with this redevelopment project, He also noted concern with reference made to relocating youth-serving businesses. He questioned what the criteria would be for falling into this category and noted concern about whether or not his client would fall into this category. If this project goes forward, his client is going to want to be relocated as well. Member Malcolm stated that he wanted to make it very clear that it is the intent of the City to relocate everyone. Mr. Keith Jenkins, 2724 N. Bristol, Santa Aha, CA 92706, representing First Interstate Bank, stated they have read of the expansion plans in newspapers and have been informally advised of progress by hospital members who bank at their branch. After many months of attempting to collect information, they have no better idea of what the expansion plans are now than they did six months ago. It is difficult for First Interstate Bank to make future plans for the branch when they do not know information as to whether or not the branch will be moved or will remain in place. Also, as a financial institution they are subject to both federal and state regulations which require permission from the federal and state agencies before they may close or relocate a branch. The lead time necessary to select a site, reach a lease agreement and construct a branch is 10 to 14 months. They would like as much advance notice as possible if it is the case that their branch must be closed. Under current condemnation law, the City would be required to provide only 90 days advance notice. For their purposes, this would be inadequate because 90 days is less time than it normally takes for them to even receive permission from banking authorities to close and relocate. Mr. Jenkins pointed out that on this date he made contact with Jeff Bills and Jim Leafy of Scripps Hospital, Mr. Bills has agreed to meet with the bank. Jerry Willits, 475 Fifth A,~enue, Chula Vista 92010, owner and operator of Fiesta Twin Cinemas, stated that when the Redevelopment Agency decided to designate the property for redevelopment they put into action a force which is now irreversible, The effect on the tenants has completely disrupted their personal and business lives. He noted concern with other sites in the City where relocation was promised IBoys Club on I Street and bowling alley on E Street). To date, neither has been relocated. After reviewing an appraisal prepared by G.R. Bill & Co., in Mr. Willitts' opinion, they do not have the AGENCY MINUTES -12- March 1, 1990 tenants' best interest at heart. He asked that before the Agency decides to renew the Exclusive Negotiation Agreement, that the Agency do something to be sure that those businesses that want to be relocated will be successfully relocated and made whole again~ Augie Carniglia, 455 Fifth Avenue, Chula Vista, owner and operator of Rollerskate Land, stated G.R. Bill & Co. did not contact him until February 17. This was the first contact he received with regard to doing anything about relocation. He believes this process is being dragged out. He noted he does want to keep his business in Chula Vista. Wayne Wencke, P.O. Box 95, Rancho Santa Fe, CA 92067, representing the master ground lease holder, noted his group created the entire shopping center in 1965o He stated the master ground lease holder has a direct contractual obligation to the fee holder on the property. He objects to a renewal of the Exclusive Negotiating Agreement. They intend to redevelop the property. They would be willing to entertain a mixed-use proposal. Mr. Wencke noted he has not been included in the process or kept up to date. At a minimum, he would like to see everything left status quo. He pointed out issues n~ec to be clarified regarding leases and assignment of leases (from a title stand point). This needs to be done before it is possible to begin to assess the costs involved in relocation. Responding to questions of Member Moore, Mr. Wencke stated they are looking into the details involved in redevelopment of the property. Member Malcolm stated he wanted to make it clear that the Agency is not holding up anyone's plans with regard to this site. No one has submitted any plans; if anyone brings forward plans the Agency will make a decision at that time. Mike Clark, 2148 Broadway, San Diego, CA 92102, attorney representing Chula Vista Properties. Chula Vista Properties is the partnership that is the assignee of the subtenant that has 77 years remaining on the lease for most of the buildings being discussed. He expressed similar concerns stated previously by the other tenant representatives. They went a long time without receiving notices for meetings. Long before G.R. Bill & Co. was engaged by Scripps Hospital, they assembled all the lease related documents in order to determine their economic interests. This was provided to Scripps and meetings were held. To this date, they do not know where they stand. Their concern is the length of time it is taking in which to reach a decision. He recommended that the Agency speed up the process by requiring Scripps to make comitments to those who have a property interest. Mr. Clark also suggested that the Agency have more meetings like this one on this matter (every 60 days). Chairman Cox commented that the primary reason this property was included in the Town Centre 11 redevelopment expansion was because there was a desire to address the poor site utilization for this area. However, the overriding concern was that with the expansion of the Chula Vista Shopping Center there may have been a need to relocate the Osco Drug Store and the Vons Market. AGENCY MINUTES -13- March l, 1990 That process started in 1987. Subsequent to the opening of the Shopping Center, Vons closed because of consolidation in their merger with Safeway. The decision to enter into an Exclusive Negotiation Agreement with Scripps was difficult to come to. He believes this was an appropriate decision. Ne does agree that the Agency should speed up the process in fairness to the tenants, the lessors and the owners~ In looking at the items identified as the obligations and deadlines, there are numerous items that can make this project not feasible; for example, traffic issues, soil issues, toxic issues, architectural design, and the EIR. The underlying decision from Scripps point of view is whether or not this is going to be an achievable project from a financial stand point. The decision to work with Scripps to look at the long term health needs of the City was with the clear understanding that there would be no financial participation on the part of the Redevelopment Agency. Chairman Cox added that it was his understanding that the Agency expressed the concern that if this site is redeveloped, there needs to be priority consideration given to the need to continue to provide youth serving recreational opportunities on the west side of the City. In trying to move this process along, there is a need for the tenants to provide the information necessary in order to bring some resolution to the question of value. He believes the right course of action is for the Agency to allow the process to proceed. He stated that Scripps has an obligation to meet on a regular basis with the tenants and the tenants should be more adequately informed as to where the process is. He is looking to have a closure on this issue by October 1990 as to whether or not it is a feasible project. Member Moore suggested the Agency may need a commitment from Scripps that they will improve their method of communication with the tenants. Mro Bills stated Scripps would be happy to work with City staff to put together a communication schedule or pattern so that occurs. Ralph Costant, attorney representing Scripps Hospital, responded to questions from Member Nader. Mr. Costant stated the only commitment from the Agency is to negotiate an Owner Participation Agreement which the Agency is doing. The only thing the action will do tonight is to extend the negotiation period. Unless both parties enter into an Owner Participation Agreement there is no commitment on the part of either the Agency or Scripps~ MOTION MS (McCandliss/Nader) to approve the staff recommendation. Member Nader commented he does not agree with comments from staff suggesting that the performance of Scripps has been entirely adequate and that the Agency is obligated to extend the agreement. Specifically, Member Nader referred to page 6 of the Agreement, Developer's Obligations, No. 4, "to investigate possible sites for relocatioh' ot t~e ex~st~ng youth serving facilities on the site including the roller rink, movie theater and ice cream parlor." The agreement states failure to adequately pursue the obligations as a ground for termination. He is not convinced that this item has been adequately met. He · is willing to allow the agreement to be extended because it has been made AGENCY MINUTES -14- March l, 1990 clear at this meeting that there will not be a project unless that condition is met. The Agency expects staff and Scripps to go further than that 'condition to actually see that the facilities are successfully relocated. VOTE ON MOTION The motion passed. The vote was 4-1; Member Malcolm opposed. 12. DIRECTOR'S REPORT: )lr. Salomone commented on Chairman Cox' request concerning the parking labels, parking sign issue. It has been cleared by the Planning Department; decals will be ordered. 13. CHAIRMAN'S REPORT: None. 14. MEMBERS' COMMENTS: None. The Redevelopment Agency recessed at 9:44 p.m. to an adjourned meeting of the City Council. The Agency reconvened at 10:15 p.m. and adjourned to a Closed Session meeting to discuss the potential acquisition of property located at: 4705 Otay Valley Road (Jimmie & Judi Shinohara, owners); Parcel 644-040-40 (Walker/ Scott Properties/South Bay, owner); 760 Broadway (Glen E. Puller Trust, owner); 801 E. Broadway (Travis A. & Margaret L. Reneau, David D. & Christina L. Ordway, owners); and Parcel 644-040-14 {Nelson & Sloan, owners). A~OURNMENT at 10:25 p.m. to the regular meeting of Thursday, March 15, 1990. Chris Salomone Community Development Director WPC 4385H