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HomeMy WebLinkAboutrda min 1991/04/02 MI~ OF AN ADJOURNED MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, CALIFORNIA Tuesday, April 2, 1991 Council Chambers 6:30 p.m. Public Services Building CALL TO ORDER 1. ROLL CALLi MEMBERS PRESENT: Chairman Pro Tempore Moore; Members Malcolm, Nader, and Rindone STAFF PRESENT: Executive Director Goss; Community Development Director Salomone; City Attorney Boogaard; City Clerk Authelet 2. APPROVAL OF MINUTES - February 28, 1991 MSUC 0Moore/Rindone) to approve the minutes of February 28, 1991 as presented. CONSENT CALENDAR 3. RESOLUTION 1164 ENTERING INTO A SEMI-EXCLUSIVE NEGOTIATING AGREEMENT WITH PIERI COMPANY FOR THE DISPOSITION AND DEVELOPMENT OF AGENCY PROPERTY AT 435 THIRD AVENUE Chris Salomone, Director of Community Development, gave the background of the project. The proposed agreement contains an initial 240 day negotiating period with a 180 day extended period option. The project was selected through a Request For Proposal (REP) process and involves eight agency parcels. Member Malcolm did not feel the proposed agreement represented the commitment made by the Agency when they approved the contract. He expressed his concern over the requirement of "market value" as required in Section III-B, #lb., due to the state of the economy. If the Agency ultimately did not like the project all they would have to do is not approve it. The developer could not guarantee what the market value of the project would be upon completion. He further questioned the ability to obtain a "security deposit" of $17,000,000 as required in Section III-A, #S. He expressed his concem over Section III-A, #6 which would allow the Agency ro cancel a major tenant and felt that these restrictions could hamper the developers ability to obtain financing. He also opposed the hiring of financial consultants and wanted to live up to the commitments previously made by the Agency and get the project going. Agency Attorney Boogaard responded that he would recommend the deletion of the security deposit of $17,000,000. This is a negotiating agreement which would result in a development agreement that would be brought back to the Agency for approval. It was also his understanding that the Agency would want the protection of approval rights. Mr. Salomone responded that the Agency was sensitive to the developer and the project and was committed to moving this project forward. Craig Beam of Luce, Forward, Hamilton and Scripps, representing the Pieri Company, felt there were a lot of unknowns with a public/private project. They did not have any criticism with staff in trying to protect Minutes April 2, 1991 page 2 the Agency but noted that negotiating agreements are usually shorter and recognize the uncertainties that the developer and Agency face. Ali they were expecting at this time, as would be expected of partners, was a general understanding that there would be flexibility in the future. They were generally supportive of the agreement but did ask that the Agency make a statement that it was meant to be flexible regarding market realities and things that can not be controlled by either party. They have taken provisions included in the agreement to two lending institutions and had been told they would not be able to obtain financing. He felt the generalized statement as requested would help to alleviate this problem. Member Nader hoped it would be staffs intent to add this type of language during the preparation of the DDA and that staff would work with the developers in order to complete this project. Mr. Salomone responded that the reason there were atypical conditions listed was because Pieri represented things in a very competitive format and won out because of those representations. Staff had every intention in building the project, acknowledge the market conditions, and work with the developer as a partner. Mr. Beam stated there was no doubt that this would be worked out in the DDA but until that time Mr. Pieri would like a statement from the Agency regarding flexibility. Member Malcolm questioned whether the agreement should be returned to staff for further negotiations with Mr. Pieri. Agency Attorney Boogaard stated that the agreement could be interlineated by the removal of everything 2fret "and, (b)" in Section III-A, #S. The Agency had the right to waive the requirement in Section III-B, lb~ :~t auy time. Chairman Pro Tempore Moore felt the agreement should be referred back to staff for renegotiations and alternatives. Member Nader did not feel there was a major problem with what Mr. Beam had indicated tonight and he felt the project could move forward with the amendment regarding the security provisions. This would allow the project to move forward until the DDA is developed. He felt that the intent of the staff and Agency was to be flexible regarding those issues as per the discussion tonight. MS (Nader/Rindone) to amend the Semi-Exdusive Negotiating Agreement to delete everything from Section III-A, #S from 'and, Co)'. ~and/oP' is ro be added in the same section after 'Developer's lender, and/or by a performance trust deed'. Agency Attorney Boogaard stated he would support the motion. Chairman Pro Tempore Moore stated he could not support the motion as he felt there were to many questions unanswered. VOTE ON MOTION: approved 3-1 (ayes: Malcolm, Nader, Rindone noes: Moore) RESOLUTION 1164 OFFERED BY MEMBER MALCOLM, AS AMENDED, passed and approved 3-1 (ayes: Malcolm, Nader, Rindone noes: Moore) * * * END OF CONSENT CAI.RNDAR * * * Minutes April 2, 1991 Page 3 OTHER BUSINESS 4. ORAL COMMUNICATIONS: None S. ITEMS PLIIi~D FROM THE CONSENT CALENDAR (Item pulled: 3) The minutes will reflect the published agenda order. 6. DIRECTOR'S REPORT: Director Goss introduced Cheryl Dye the new Economic Development' Director for the City. 7. CHAIRMAN'S REPORT: None 8. MEMBERS' COMMENTS: a. Member Rindone: Requested that the Agency consider the Pending Litigation of Brooks v. Phares, et al. in open session rather than closed session. Agency Attorney Boogaard informed Council that this was a pending claim and that practice had been to discuss such items in closed session. The Agency does have the authority to discuss this in open session but he would recommend against it at this time. M (Rindone) to discuss Brooks v. Phares, et al. in open session. Motion died for a lack of second. Member Nader recommended that the Agency bear what the Attorney had to say regarding this claim in closed session and then if the Agency felt it appropriate, discuss it in open session. M (Rindone) to discuss Brooks v. Phares, et al. in open session. Motion died for lack of second. Member Nader stated he was hesitant to go against the recommendation of the Agency Attorney regarding pending litigation. ADJOURNMENT The Redevelopment Agency met in closed session at 7:15 p.m. to discuss: ProperW Negotiations: Northeast Corner of Fifth Avenue and H Street - 8.82 acres (Chula Vista Properties, a Florida General Partnership; A1 Malnick, General Partner) Chula Vista Center, 555 Broadway (Homart Development Co.) Pending Litigation: Brooks v. Phares, et al. Minutes April 2, 1991 Page 4 ADJOURNMENT AT 9:45 P.M. to the meeting of the Redevelopment Agency scheduled for Thttrsday, April 18, 1991 at 4:00 p.m. Respectfully submitted, BEVERLY A. AUTHELET, CMC, City Clerk Vicki C. Soderquist, Dgputy Cit~lerk