Loading...
HomeMy WebLinkAboutcc min 1996/06/25 RDAMINUTES OF AN ADJOURNED REGULAR JOINT MEETING OF THE CITY COUNCIL/ REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Tuesday, June 25, 1996 12:05 a.m. 1. ROLL CALL: PRESENT: CALL TO ORDER ALSO PRESENT: Council Chambers Council/Agency Members: Alevy, Moot, Padilia, Rindone, and Mayor/Chair Hotton John D. Goss, City Manager/Director; Glen Googins, Deputy City Attorney; Chris Salomone, Community Development Director; Lyle Haynes, Principal COmmHRity Development Specialist; and Beverly A. Authelet, City Clerk PUBLIC REARING 2. PUBLIC HEARING: JOINT PUBLIC HEARING OF THE CITY COUNCIL AND REDEVELOPMENT AGENCY TO CONSIDER CONDEMNATION OF INTEREST IN CERTAIN REAL PROPERTY COMPRISED OF APPROXIMATELY 9978 SQUARE FEET, LOCATED AT 40 NORTH FOURTH AVENUE (TARGET SHOPPING CENTER), CHULA VISTA, CALIFORNIA - As a condition to issuance of building permits for the project, the Final Environmental Impact Report and Precise Plan required a fully signalized concentric intersection be constructed at North Fourth Avenue and Brisbane in order to mitigate traffic impacts. The purpose of this public hearing is to determine public necessity to acquire the property by means of eminent domain. Staff recommends the Council/Agency hold the public hearing and approve the resolutions. [4/Sths Vote Required] Continued from the meetin~ of 6/18/96 (Community Development Director) A. COUNCIL RESOLUTION 18253 and AGENCY RESOLUTION 1493: FINDING AND DETERMINING PUBLIC INTEREST AND NECESSITY FOR ACQUIRING AND AUTHORIZING THE CONDEMNATION OF CERTAIN REAL PROPERTY COMPRISED OF APPROXIMATELY 9978 SQUARE FEET LOCATED AT 40 NORTH FOURTH AVENUE, CHULA VISTA, CALIFORNIA AND AUTHORIZING THE COMMENCEMENT OF CONDEMNATION PROCEEDINGS BY OUTSIDE COUNSEL TO ACQUIRE RIGHT-OF-WAY Council/Agency Member Alevy reiterated per an FPPC ruling that Council/Agency Member Moot and he both have a perceived conflict end per a ruling by the FPPC and he would be participating as the necessary additional Member of the Council per the FPPC. Principal Community Development Specialist Haynes noted the item was a request to adopt a Resolution of Necessity to acquire the property necessary to construct a fully-signalized concentric intersection at Fourth Avenue and Brisbane. The intersection was required in order to mitigate the anticipated traffic impacts associated with both the National City portion of the project and the Chula Vista portion of the project, plus any future impacts associated with normal projected growth. The property in question was approximately 10,000 square feet of the most northeasterly portion of the Target parking lot and was designed in a manner to minimize the amount of impact on the private property owner and the tenant. The Chula Vista project was conditioned which required that intersection be constructed and operational at the time in which any building beyond the Wal-Mart building and the new Dixieline building. The National City portion was conditioned somewhat differently, but there was additional retail that was being constructed along with the new Dixieline Store which was currently under construction. Dixieline and the additional retail was expected to come on-line in late September. Staff feels timing was of the essence as well as through the staff report that all of the legal requirements necessary for the Resolution of Necessity to be adopted have been met. Staff received a letter, placed on the dins at the meeting for Member review, whereby Target has agreed to stipulate to the City' s right to take and was raising some issues relative to reserving their rights for future arguments relative to compensation. Minutes AdjournedRegular JointMeeting of theAgency/Council June 25, 1996 Page 2 Deputy City Attorney Googins stated that after months of intense negotiations with Target, City and Agency staff was able to broker an agreement with all the involved parties in order to satisfy the various and competing concerns of the various parties. Staff was able to obtain Target's agreement to stipulate to the City's right to take. The value of that was in that the City has now avoided the potential additional cost of needing to fight a legal battle over the City's right to take in the wake of the Council/Agency adoption of the Resolution of Necessity. In fact, if the Resolution was adopted tonight and the developer posts the security in accordance with their requirements, the City would be able to take immediate possession of the property as quickly as a week. The project to develop the aligned intersection could commence immediately thereafter. What Target was unwilling to commit to was an agreement to stipulate as to the amount of compensation that was being paid, not to them, but to the landlord. Target's belief was that they were entitled to a share of these proceeds and believes that the best and most prudent course for them to take in the face of these proceedings was to reserve their ability to challenge the amount of compensation that was paid and, specifically, to reserve a claim for any loss of Goodwill that their store might suffer as a result of the take. Part of the agreement was that I would formally represent Target's position in that regard on the record and asked the Clerk to reflect his statement of their reservation of that right as being their kind of official reservation on the record for purposes of the public hearing. No additional statement will be necessary at the public heating in that regard. Council/Agency Member Rindone asked Attorney Googins to repeat his last comment. Deputy City Attorney Googins replied certainly. Target included, as part of their agreement to stipulate to the take this evening, a proviso that in order to minimize their attorney's fees in attending a long hearing that he reflect the fact that they were reserving those rights on the record. In fact they have really done so already by circulating the letter to Council/Agency, doing so with their request that he make a formal statement to that effect, representing their reservation of those rights. The second point he made was, notwithstanding the fact that the City had Target all but in total agreement on the proposed project, was that the Council/Agency adoption of the Resolution of Necessity tonight was still a very necessary action in order for staff to expeditiously and efficiently take title to the property and transfer it to the appropriate parties and therefore commence the installation of the important aligned intersection at Fourth and Brisbane. One of the main reasons for this was the timing involved. The City needed to move fast. One of the reasons being the coordination with the National City development and the second reason was that in the Precise Plan Condition that the City imposed against the Channelside Shopping Center, which called for these improvements and the acquisition of that piece of property necessary for the installation of those improvements, had a time period on it whereby once the developer tendered the acquisition to the City and the Agency, the City and Agency would need to act to take possession of the property within a certain period of time. If the developer were to strictly construe the manner in which that Condition was drafted, they arguably could declare that that time has run already, but to the extent that the acquisition has taken much longer than anybody imagined, all parties have been proceeding in good faith and the developer has not made such an argument to-date, although it was possible that the would do so. Since timing was such an issue, then why was condemnation faster then a voluntary acquisition. The main point to be made in that regard was that Target has still reserved their right to challenge the evaluation of the asset and the money that they would receive in ennneetion with the acquisition of the property. In a voluntary acquisition scenario, in other words if the Council/Agency did not adopt the Resolution of Necessity, and the City was then forced to pursue further negotiations with Target to fmalize a voluntary aeqnisition, their complete approval, in order to pass clear title, would need to be obtained. By evidence of the fact that it has taken so long, even to get us to this point, and the fact that staff needed to agendize the Resolution of Necessity to get Target to the table, staff was very pessimistic that Target would respond to a voluntary acquisition and give their approval unless they were settled in discussions they were going to have with their landlord as to the amount of the proceeds that they would receive from their landlord. By taking the condemnation approach, the City was able to immediately obtain title to the property, allow Target to reserve their claims-either against the City and/or the landlord, in whatever ensuing litigation might be necessary--and in that way the City can go forward quickly, but Target was nonetheless protected. It was something that served the City's best interest, with a minimum amount of harm to the subjects, so to speak, of the acquisition. This being the time and place as advertised, the public was declared opened. Minutes Adjourned Regular Joint Meeting of the Agency/Council June .7.5, 1996 Page 3 Jack Duncan, 3250 Port Serehis, San Diego, representing Dixieline Lumber Company and also speaking for Pacific National City Holdings, which was the developer of the National City portion of what was now called the South Bay Marketplace. The action this evening was very aptly named because it was, in fact, a very necessary situation at this time. You have heard from Mr. Geegins and Mr. Haynes regarding the necessity to move quickly. He reiterated, however, that the realignment was a requirement of the City and it has been a requirement for somewhere around two years. Moreover, what they failed to mention was that there was a temporary condition there now that was done with pylons to accommodate the opouing of the Wal-Mart store prior to the final realignment and signalization. That temporary condition has been there since near the end of last year so it has gotten beyond temporary. Dixieline staff knows of three accidents that have taken place and it has very negatively affected Dixieline's business. We agreed to it at the time because we had been assured by Target that they had agreed and that, in fact, it was going to be temporary. We did so, over the objections of the City of National City. They wanted it signalized at that time; but, we were able to convince the City [National City] that everything was going to go forward in a timely manner. We really do need to act fast. That temporary condition was dangerous and was negatively affecting the business. There was an irony to the whole thing that he would be remiss if he did not point out to the Council/Agency and that was that this realignment--if you look at all the retailers in the whole complex which would now consist of some 400,000 square feet of retail, most of which was in Chula Vista--the biggest beneficiary of the realignment was the Target. Target was the greatest benefactor from the realignment because, in the absence of the realignment, in a mis-aligned intersection/signalization, Target would be, in effect, isolated from all those other retailers. Mayor/Chair Horton asked if there was anyone else wishing to address the Members on this time. Seeing no one, she closed the public hearing. Council/Agency Member Rindone stated he had an opportunity to talk with Mr. Coogins. He knew that he had a number of reservations on the proposal and it was not because he thought the project warranted it, he did. In fact, the alignment of the intersection was appropriate. That was not what he was questioning, and he knows it. He just wanted to put on the record, what he wanted to be absolutely certain was that eminent domain was essential--not just because for the sake of time but for the completion of the project. Deputy City Attorney Geegins replied in his opinion it was essential that the Council/Agency adopt the Resolution of Necessity, both in order to ensure a timely completion of the project and to assure that, given the multiplicity of interests that there was in the underlying property that the City was acquiring, that it can be acquired at all. There was both a fee owner, two intervening leaseholders, and Target, themselves, obviously opemting their store on that property and it has taken us a substantial amount of time and staff effort to align those planets as well as we have aligned them to-date. Again, he was pessimistic, given that there were so many competing interests involved and that it was kind of a delicate agreement that was in place. That without the Resolution of Necessity, as the device that allowed the City to clean the slate and get possession of the property, both quickly and certainly, it wonld be an uncertain acquisition if the City was left with only the voluntary mechanisms. Council/Agency Member Rindone said the concern was not as much with Target, though, as it was with the lessor of the property. Was that correct? Deputy City Attorney Coogins thought there was coneeras with all the various interests. The agreement requires cooperation from people on both sides of the equation. It requires cooperation from Gatlin, the developer of the Channelside Shopping Center, because they are agreeing to add some additional improvements to, what was originally conceived as the aligned intersection in order to allow a left turn pocket into the center of the Target store. It requires the cooperation of the landlord, who had previously agreed to a specified price for the property that the City had offered. It was very difficult to get hold of. If, in fact, was left to negotiation with Target over who was going to get what fair share of the mount being offered, he expected that that would be a protracted discussion, at best. There was the interest of Target, who initially thought that the property being taken was actually the 32 spaces right in front of their entrance way which, of course it isn't, it was the 32 spaces farthest away from their entryway, so we have the corporate Target people that staff was desling with who are not as familiar with what the situation on the ground and do not appreciate the irony that Mr. Duncan pointed out. In fact, staff thinks this improves their situation. Then you have the intervening leaseholders who have leases with Target and cannot Minutes Adjourned Regular Joint Meeting of the Agency/Council June 25, 1996 Page 4 cooperate formally with the City because they are worried about violating contractual agreements that they have with Target, namely their leases to a point where they ennld not even provide shaft the leases in order to assist shaft dear up a title issue when staff attempted to acquire the property voluntarily. That was perhaps an unnecessarily detailed description of the circumstances which were multiplicity of parties, multiplicity of competing interests, and a delicate agreement staff has been able to broker amongst them. It was only brokered because staff agendized the Resolution of Necessity and, from his perspective, can only be brought to fruition if, in fact, the Council/Agency adopts the Resolution, take the property, and then allow the valuation issue to be resolved either within or outside that litigation as Target and the landlord are able to work out. Council/Agency Member Rindone thought the key was what Attorney Googins just said. It's like the big club, because if this was taken off the table, then the possibility of the propensity of this occurring could be jeopardized beearise then there may be additional maneuverability between the parties involved and it may not occur at all. Deputy City Attorney Googins said that was correct. Council/Agency Member Rindone stated that assuming the eminent domain action was agreed upon tonight, there would be potential for litigation in determining Target's portion or share of the take. Was the City, by taking this action, not benefitting either party in that potential lawsuit? Deputy City Attorney Googins responded he did not know enough of the law in the area to be able to flesh that out in the margins. But, in effect, Target would have a number of litigation options in order to attempt to compensate themselves for the loss they have suffered. One would be in the condemnation context, the other would be a simple lawsuit for reformation of their contract, their lease with the various intervening leaseholders and landlord to reflect the fact that they no longer have as much property as they did in the first place. So condemnation, perhaps, might be a more convenient option for them in terms of a litigation context, but it wonld not be their only option end would not really faeilihate things inappropriately. It just allows them an alternative. Council/Agency Member Rindone explained that from what he was understanding the Attorney's response to be, the question was that it did not appear that the action would monetarily benefit either party in that potential litigation end so it was the use of eminent domain that would benefit or provide value to a benefactor and would be done purely in the public interest for public safety. Are you saying public safety? Deputy City Attorney Googins replied that was correct. There may be ancillary benefits derived from parties who are the subject of condemnation but that was clearly not City's intent here and not the City's public purpose. COUNCIL RESOLUTION 18253 and AGENCY RESOLUTION 1493 OFIfERED BY CHAIRMAN/MAYOR HORTON, reading of the text was waived, passed and approved 4-0-0-1 with Moot abstaining. ORAL COMMUNICATIONS None. OTHER BUSINESS CITY MANAGER'S/DIRECTOR'S REPORT(S) None. MAYOR'S/CHAIR'S REPORT(S) None. 5. COUNCIL/AGENCY MEMBER COMMENTS None. Minutes Adjourned Regular Joint Meeting of the Agency/Council June 25, 1996 Page 5 ADJOURNMENT The meeting adjourned at 12:30 a.m. to the regular City Council and Redevelopment Agency meetings on July 16, 1995 at 6:00 p.m. in the City Council Chambers. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk Berlin D. Boswoxth Secretary to the Redevelopment Agency