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HomeMy WebLinkAboutrda min 1992/11/10 MINUTES OF A SPE(2AL MEETING OF THE REDEVELOPIvlFaNIT AGENCY OF THE ca tY OF C/-IULA VISTA Tuesday, November 10, 1992 Council Chambers 9:29 p.m. Public Services Building CALL TO ORDER 1. ROLL GALL: PRESENT: Members Horton, Malcolm, Moore, Rindone, and Chairman Nader ALSO PRESENT: John D. Goss, Director; Bruce M. Boogaard, Agency Attorney; and Beverly A. Authelet, City Clerk 2. APPROVAL OF MINUTES: None submitted. CONSENT CALENDAR (Item pulled: 3) 3. RESOLUTION 1281 ~APPROVING AN AGREEMENT WI'I-FI LUGA.S~ CONSULTING TO PROVIDE COASTAL PLANNING SERVIC~,~S ON COASTAL COMMISSION PROCESSING OF LOCAL GOASTAL PROGRAM AMENDMENT FOR MIDBAYFRONT - The Agency is being asked to enter into an agreement with Lucast Consulting to assist staff with the processing of the Local Coastal Program (LCP) Amendment for the Midbayfront Project on October 27, 1992. The document should be presented to the Coastal Commission for review by the end of October. Staff recommends approval of the resolution. Pulled from the Consent Calendar. Chris Salomone, Director of Community Development, informed the Agency that he had persuaded Mr. Barkett to pay for the consultant subsequent to the All3 going forward. The City would pay and Mr. Barkett would refund the City's costs. Member Rindone questioned whether the City could proceed or if there was a thirty day waiting period. Agency Attorney Boogaard responded that the City could proceed with the consulting agreement. Member Rindone stated that dealing with governmental agencies there probably wasn't much chance of success without a consulting contract. The experience and expertise was critical. Although he did not concur with the processing he would support the contract. RESOLUTION 1281 OFFERED MEaMBER MALCOLM, reading of the text was waived, passed and approved unanimously. 4. RESOLUTION 1282 CONDITIONALLY APPROVING AN AMF2qD~ TO THE PROMISSORY NOTE EXEC'o'I'ED BY SCRIPPS MEMORIAL HOSPITALS IN FAVOR OF THE AGENCY AND DATED DECEMBER 20, 1991 PROVIDING A LOAN TO SCRIPPS FOR RELOCATION ASSISTANGE TO ROI.I.F. RSKATELAND - Rollerskateland is being relocated, in accordance with the relocation provisions of the Disposition and Development Agreement between the Agency and Scripps Memorial Hospital from the northeast corner of Fifth Avenue and "H" Street to make way for the expansion of Scripps Memorial Hospital. Their new facility is being located on the south side of "L" Street [lust west of Broadway adjacent to the Office Minutes November 10, 1992 Page 2 Club. Rollerskateland has been processing plans through the City for the development of their new facility and, in the process, recently learned that adequate water pressure for fire protection cannot be provided from the existing service system without extensive modifications at considerable unanticipated expense. Rollerskateland has requested that the Agency consider additional financial assistance to complete their successful relocation. Staff recommends approval of the resolution. RESOLLFFION 1282 OFFERED BY CHAIRMAN N/fi)ER, reading of the text was waived. Member Moore questioned whether wording could be included that if the business changed ownership that the Agency would be reimbursed by the new owner. Fred Kassman, Redevelopment Coordinator, responded that was part of the loan agreement, page 2, Item 6~ 'Events of Default. It would be a default situation, if the Agency did not approve the transfer, that would t~igger an automatic repayment of the loan. Chairman Nader questioned whether the Agency Attorney felt the clause addressed Member Moore's conceITIS, Agency Attorney Boogaard responded that he had not had the .opportunity to consult with staff, but the section Mr. Kassman had referred to dealt with insolvency. Member Moore's concern dealt with new ownership. Chairman Nader felt a "Due on Sale" clause should be added if agreed upon by both parties. Member Malcolm stated that if the roller skating rink didn't have enough water pressure and the adjoining property owner was going to be a huge new facility; he questioned why the Gity didn't put in the water line and form a reimbursement district. Mr. Salomone stated staff was involved in discussions but there would be engineering involved and the water line would have to be scaled to the new development and delay Rollerskateland. Mr. Kassman stated one of the issues involved was that the bank loan was extended until tomorrow and they would be in jeopardy of losing the loan. Mr. Salomone stated the reimbursement district proposed would not involve reimbursement by the applicant but by subsequent development of the adjacent property. The applicant had indicated that he did not have the ability to pay for the improvement. Chairman Nader suggested that there be a partial reimbursement from the applicant, spread over a period of time, so his liability would be less than what was in the resolution. He payments would either be the same for a shorter period of time or would be lower for a longer period of time, or some combination. Member Malcolm felt it could be approved both ways and then have staff determine the viability of alternative of water lines. Marian Prophett, 5209 Soledad Mt. Road, San Diego, CA, representing Rollerskateland, stated they wanted the City to put in the water line. They had appeared before the Water Board and had been denied. Chairman Nader stated it was his understanding that the Water Board had denied a request to have the Water Board put in the water line. Minutes November 10, 1992 Page 3 Mr. Carneglia, owner of Rollerskateland, responded that the Water Board had turned down every proposal they had submitted. Even ff the applicant had the money for the water line the Water Board stated they did not have the crew to install it. Chairman Nader summarized the Agency comments as the Agency would approve the Resolution subject to staff being able to have the flexibility to get the job done in a more cost effective way that would spread the cost around to more people in the area. If that could not readily be done the Resolution would be adopted and the deal presented to the Agency would move forward. Member Moore restated his concern for reimbursement if the business was sold. Agency Attomey Boogaard stated that as long as there was a 'Due on Sale" or "Due on Transfer" clause in the RSL Note to Scripps the Agency would receive the benefit of the early payment. If the Agency wanted to insist upon having, as part of the amendment to the Scripps Note with RSL, such a "Due on Sale' clause, staff would try to negotiate the item. It could be a blockage to the negotiations and ff it was staff would report back. Mr. Salomone responded that staff understood the Agency's concern. There was also a covenant to allow the operator to operate the facility for ten years. Chairman Nader stated the maker of the motion would include the addition of allowing the staff to explore the issue as outlined by the Agency Attomey regarding the ~Due on Sale' clause. VOTE ON RESOLUTION 1282 AS AMENDED: approved unanimously. * * END OF CONSENT CALENDAR * * PUBLIC HEARINGS AND RELATED RESOLLrFIONS AND ORDINANCF~ 5. PUBLIC HEARING CONSIDERATION OF A REQUEST FROM RASSODL GHNNADIAN OF HONDA CLUB, INC., FOR A SPECIAL PERMIT FOR THE PURPOSE OF ESTABLISHING AN AUTO DISMANTLING AND WRECKING BUSINESS ON .92 ACRES IX)CArED AT 89S ENERGY WAY, IN THE OTAY VAI.I.~iY ROAD PROJECT AREA - The owner of the property wishes to sell the lot and the prospective purchasers, Honda Club, wish to revert the site to its previous usage, as an auto dismantling and recycling business specializing in Honda auto parts. The reuse of the parcel for auto wrecking and dismantling requires a Special Land Use Permit pursuant to the Otay Valley Road Redevelopment Plan. Staff recommends that the Agency adopt the Negative Declaration issued under IS-92-48 and approve the Special Permit. Fred Kassman, Redevelopment Coordinator, informed the Agency that the Otay Valley Road Project Area Committee met on Monday to discuss the item. There was a quorum of three members present but they could not receive a quorum vote and therefore were unable to make a recommendation to the Agency. Member Moore questioned why the applicant needed ten years amortization for his inveslment. Chris Salomone, Director of Community Development, stated the terms were arrived at by the expected life of the surrounding uses. The project had been marketed for other uses unsuccessfully by the landowner. The surrounding uses in the area were anticipated to have a life of at least ten years. This being the time and place as advertised, the public hearing was declared open. Minutes November 10, 1992 Page 4 Bill Martinez, 757 West Ivy, San Diego, CA, representing the Honda Club, stated he and the property owner were available to answer questions. Member Moore questioned whether the original rules, i.e. fencing, stacking of vehicles, etc. were still in place. Mr. Kassman responded that they were still in place. Mr. Martinez stated if they could reestablish the past use they would be more than happy to accept the established rules. There being no ffttther public testimony, the public hearing was declared closed. RESOLUTION 1283 OFFERED BY MEMBER MOORE, reading of the text was waived. Member Malcolm stated he would like to change the following: 1) allowing the zoning administrator to approve an extension, it should be reviewed by a furore Council to make sure it was compatible with the area; and, 2) make sure that after ten years if the Agency did not believe that the use was compatible with surrounding uses that the Agency was not under any legal obligation to extend the conditional use perwit. Agency Attoruey Boogaard stated there had been recent case law that limited the Agency's authority in that specific regard. Mr. Marfinez stated they were completely clear that the permit only allowed ten years of operation. The new buyers also realized that and it was discussed at the last Redevelopment Agency meeting. Agency Attorney Boogaard recommended that because there was consent by the permittee, he would add a condition under #1, page 2, under Conditions, "An agreement be entered into between the Agency and the permittee whereby it would waive any rights for a continuation beyond ten years and indemnify the City for any and ali costs incurred for removal if so decided by the Agency". Mr. Martinez agreed to the condition. Many of the properties were owned in fee and he felt there was a long term opportunity. AMENDMENT AGRF. F. ABLE TO THE MAKER OF THE MOTION: 'On the condition that the permittee waives all rights for renewal and indemnifies the City for all costs incurred, induding attorneys fees, if the Council prevents the continuance of said use'. Stn~e the last sentence of the first condition, 'the permit may be extended by the Zoning Administrator~ and add 'by the Agency or City Council'. VOTE ON RESOLUTION AS AMENDED: approved unanimously. RESOLUTION 1283 ADOPTING NEGATIVE DECLARATION ISSUED UNDER IS-92-48; MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL PERMIT FOR THE CONSTRUCTION AND OPERATION OF AN AUTO DISMANTLING AND RECYCLING BUSINE,~ ON 40,075 SQUARE FE~T LOCATED AT 895 ENERGY WITHIN THE OTAY VAI.I.RY ROAD REDEVELOPMF2qT PROJECT ARF~ 6. PUBLIC HEARING CONSIDERATION OF THE LEASE OF PROPERTIES AT 321 AND 327 STREET - The San Diego County Credit Union desires to enter into a short-term lease for Redevelopment Agency owned properties at 321 and 327 "H" Street, located directly behind the Credit Union to handle their parking needs. Staff recommends approval of the resolution. November 10, 1992 Page S This being the thne and place as advertised, the public hearing was declared open. David W. Brehmer, 9985 Pacific Heights Blvd., San Diego, CA, representing the San Diego County Credit Union, spoke in support of the staff recommendation. Councilman Malcolm stated he had been in opposition to the project but felt the staff and the Credit Union had come up with a solution that was fair and good for the City. There being no further public testimony, the public hearing was declared closed. RESOLUTION 1269 Olq'l~qED BY MEMBER MALCOLM, reading of the text was waived, passed and approved Unanimously. RESOLUTION 1269 APPROVING A LEASE AGI~I~MENT WITH THE SAN DIEGO COUN'I~ CREDIT UNION FOR THE PROPERTIES LOCATED AT 321 AND 327 ~I~ STREET WITHIN THE TOWN C~TRE I PROJECT AREA ORAL COMMUNICATIONS None. ACTION ITEMS 7. RESOLLrrlON 1284 FINDING THAT THE FINAL ENVIRONMENTAL IMPACT REPORT FOR THE PALOMAR TROLLgY CENTER PROJECT (EIRgl-02), WITH ADDENDUMS, IS ADEQUATE UNDER CEQA; MAKING FINDINGS OF PACT; ADOPTING THE MITIGATION MONITORING PROGRAM; AND, APPROVING DISPOSITION AND D~PMENT AGREEMENT ~ CYPRESS CI~ COMPANY'LP FOR THE PALOMAR TROLLEY CENTER PROJECT - Agreement with Pacific Scene, Inc. (PSI) for the development of the Palomar Trolley Center Project, a 198,000 square foot high volume retail commercial center on the south side of Palomar S~eet between broadway and MTDB Palomar Trolley Station and subsequently entered into a Semi- Exclusive Negotiating Agreement (SENA) with PSI. PSI is unable to obtain financing and on 7/31/92 to SENA expired and PSI entered into negotiations with Sunbelt Management Company to develop the property. Sunbelt (Cypress Creek Company LP) and staff have negotiated a Disposition and Development Agreement. Staff recommends that the Agency certify FEIR 91-02 and Addenda, making the Findings of Fact, and adopt the Mitigation Monitoring Program; and approve the DDA with Sunbelt Management Company. Chris Salomone, Director of Community Development, reviewed the project. Dave Gustafson, Assistant Director of Community Development, reviewed the Development Agreement issues. Cypress Creek the developer proposing to replace PSI wanted the Agency to acknowledge in the Disposition and Development Agreement that PSI had no further obligation to repay that $250,000. The new draft had the staff position that recommended a change in language, page 8 of the draft, Section 6, which forgave the $2S0,000 upon completion of construction of the project by Sunbelt. The developer did not agree with staffs position. Member Rindone questioned the phasing of the child care center. Mr. Gustafson responded that if it proved to be accomplishable on the particular site, staff anticipated that the developer of the day care center could start construction the same month that the Trolley Center developers started, May of 1993. It was his understanding that the center would accommodate 120 clients. Minutes November 10, 1992 Page 6 - Jim Moxham, 2801 Alba~'oss Street, San Diego, CA~ representing Cypress Creek Company and Sunbelt Management Company, reviewed the past history of Pacific Scene Inc. He did not feel that Sunbelt was deriving any benefit from the funds advanced by the Agency, they were basically starting from scratch. A stumbling point in the past for the day care center was a rent guarantee. The property owner that would be providing the day care center had indicated that a guarantee may not be required by his lender. They did not know at this point if the lender would be comfortable with the proposed plan which was a rezone. It was also quite possible that if he was willing to go through a zone change to C-O it might eliminate a guarantee by any interested party. They requested an interpretation in the new language provided to the DDA where they would assist in all reasonable effort, to the Agency's satisfaction, in locating the day care center. They interpreted "to the Agency's satisfaction" to not be a rent guarantee. Michael W. Holmes, 5556 Bahia Lane, LaJolla, CA, representing SunbeIt Management Company, reviewed d~velopments in the area. The only objection they had was on the forgiveness of the $250,000 to PSL They saw no value in the money that was previously invested as they were not given anything in return. They were approaching the deal with a clean slate and that was basically their deal with Pacific Scene. Member Malcolm stated that staff recommended that the $250,000 be forgiven if the project was completed. He questioned whether there were any concerns that they would not build the project. Mr. Holmes responded that they had to purchase seven additional parcels that had not be contracted for and they were asking forgiveness of the $250,000 when two things happened, i.e. 1) when they bought out Pacific Scene Inc., and 2) when they paid for parcels 1, 2 and 3 which they intended to do by the end of the year. At that time they would have approximately $4.5 to $5 million invested in the deal. Member Malcolm questioned whether staff had a problem with forgiving the $250,000 at the time suggested by Mr. Holmes. Mr. Salomone stated staff had contemplated that with the applicant and it was a position staff could support. Staff was confident that Sunbelt would build the project. He would be satisfied to forgive the $250,000 upon the close of escrow for the parcels that would enable Phase I to go forward. Russ Richard, 3900 Harney Street, San Diego, CA, representing Pacific Scene, Inc., stated the staff recommendation seemed to be a reasonable solution. Chairman Nader stated he was concerned that the language regarding the child care center tied the Agency down to one site. He had discussed with staff and the applicant fallback positions if something went wrong with the site under consideration. He would like to add "there would be an effort to locate a day care center in the immediate vicinity of the project". Mr. Gustafson responded that staff had recommended the addition, at the end of the sentence, "another suitable nearby site". Agency Attorney Boogaard informed the Agency that it did not constitute a contractual commitment on anybodys part. It was a prepatory event that had to occur prior to the duty of the City to sign the contract. It was not a promise that there would be a day care center but a promise to have good faith and best efforts. Chairman Nader felt it was enforceable or the City would not have to sign the agreement. He suggested that if there was a hang-up due to the underlying zoning of the property and a CUP was to cumbersome, he stated staff should look at a City initiated rezoning. He questioned whether there would be a subsequent agreement or a more specific proposal brought forward to the Agency. Mr. Gustafson responded that it would not go before the Agency but to Design Review. Minutes November 10, 1992 Page 7 Chairman Nader felt information to be included for Design Review should be the back-up material included earlier, additions and considerations of the project when first approved by Montgomery Planning Committee, Planning Commission, and Agency regarding the ambiance and type of project expected. RESOLUTION 1284 Ot'I'PSRED BY MEMBER MALCOLM, reading of the text was waived. Member Malcolm stated the Resolution included the wording change regarding the day care center and when the forgiveness would occur. Agency Attorney Boogaard clarified that the wording change was in the staff proposed document presented to the Agency on the dias. Mr. Gustafson stated it was his understanding that the forgiveness clause would tie the forgiveness to the acquisition of the parcels for Phase I. Member Moore stated that those designing the center should pay heed to where Jaken Way would line up and the installation of the utilities. VOTE ON RESOLIYrION 1284 AS AMENDED: approved unanimously. 8. REPORT REGARDING THE AGENCYASSISTING A NON-PROFIT CORPORA'FION TO ACQUIRE BAYSCENE MOBILEHOME PARK - Residents of Bayscene Mobilehome Park requested City assistance to purchase their park as the owner, Richard A. Hall Company, had placed the property up for sale. Staff is examining different methods of converting mobile home parks to resident control. Staff recommends that the Agency authorize staff to continue working with the Richard A. Hall Company and a non-profit corporation to determine the feasibility of assisting a non-profit to acquire the park. Rose Made Rosinski, 100 Woodlawn Avenue, #33, Chula Vista, CA, Chair of the Acquisition Committee, spoke in support of the staff recommendation. Marguerite Fen-ante, 260S Camino del Rio, South, Suite 111, San Diego, CA, representing C.O.A.C.H., spoke in support of the staff recommendation, Member Malcolm stated he had met with Mr. Hall and had negotiated a $4 million purchase price. He felt they had moved in the right direction to allow the Agency to proceed with assisting in the purchase of Bayscene and move Bayscene into the OrangeTree situation where the residents could control their own destiny. Member Moore stated the exposure to the Agency due to the bond would be a maximum of $200,000 per year, over thirty years that would be $5 million. He questioned why the Agency would be exposed. Alisa Rogers, Community Development Specialist, stated that the rating agencies were requiring huge debt coverage ratios. The Agency was at risk because the rating agencies would not allow the first bond to cover all of it so the Agency needed to back it with their funds. Member Moore questioned how much C.O.A.C.H. would take off the top for administrative costs. Ms. Rogers responded that if the Agency authorized staff to continue with the project they would be negotiating that point. Minutes November 10, 1992 Page 8 MSUC ~aderfMalcolm) to adopt staff recommomdation. FrEMS PUI.LF.n PROM THE CONSENT ~AR Item pulled: 3. The minutes will reflect the published agenda order. OTI~c.R BUSINESS 9. DIRECTOR'S REPORT(S) - None. 10. CHAIRMAN'S REPORT(S) - None. 11. MEMBERS' COMMEiXYFS - None. ADJOURNMENT ADJOURNMENT AT 10:S9 P.M. to a Special Agency Meeting on November 24, 1992, at 6:00 p.m., -- immediately following the City Council meeting, in the City Council Chambers. Respectfully submitted, BEVERLY A. AUTHELET, CMC, City Clerk by: Vicki C. Soderquist, Deputy City Clerk