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HomeMy WebLinkAboutrda min 1997/10/21 CC MINUTES OF A JOINT MEETING OF THE REDEVELOPMENT AGENCY AND CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, October 21, 1997 Council Chambers 8:23 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Councilmembers: Moot, Padilia, Rindone, Salas, and Chair/Mayor Horton ABSENT: Agency/Councilmembers: None ALSO PRESENT: Assistant Executive Director, Sid Morris; Legal Counsel, John M. Kaheny; and City Clerk, Beverly A. Authelet 2. APPROVAL OF MINUTES: October 7, 1997 (Joint meeting) MSC (Rindone/Horton) to approve the minutes of October 7, 1997. Motion carried 4-0-1 (Padilia absent). CONSENT CALENDAR (None submitted) ORAL COMMUNICATIONS There were none. PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 3. PUBLIC HEARlNG: REGARDING THE SALE OF SPACE NUMBER 122 AT ORANGE TREE MOBILEHOME PARK - In November 1987, Orange Tree Mobilehome Park converted to resident ownership. The Agency assisted the residents in purchasing their park with a $600,000 acquisition loan which was converted to loans for lower income residents to help them purchase their spaces. At that time, 29 residents did not wish to purchase their space, and the Agency agreed to purchase these spaces after the newly-t~.rmed homeowner's association was unable to secure financing to purchase these unsold spaces. The residents who did not purchase their space remained as tenters. The Agency's desire is to sell these spaces as new home buyers move into the park. The Agency currently owns 16 spaces, having sold 13 spaces. Resolution was approved. (Director of Community Development) AGENCY RESOLUTION 1561 APPROVING THE SALE OF SPACE NUMBER 122 AT ORANGE TREE MOBILEHOME PARK AND AUTHORIZING THE COMMUNITY DEVELOPMENT DIRECTOR TO EXECUTE A PURCHASE AGREEMENT This being the time and place as advertised, the public hearing was opened. There being no one indicating a desire to address the Agency, the public hearing was closed. RESOLUTION 1561 OFFERED BY MEMBER RINDONE, heading read, text waived, passed and approved unanimously 5-0. Minutes October 21, 1997 Page 2 4. PUBLIC HEARING: CONSIDERATION OF AN AMENDED AND RESTATED OWNER PARTICIPATION AGREEMENT WITH SCRIPPS HEALTH FOR THE EXPANSION OF HOSPITAL AND RELATED FACILITIES AT THE NORTHEAST CORNER OF "H" STREET AND FIFFH AVENUE - On 11/7/91, the Agency approved an Owner Participation Agreement with Scripps Memorial Hospital (now Scripps Health) tBr expansion of their hospital. Changes in the medical services industry resulted in substantial downsizing of Scripps' expansion plans. Scripps and City staff have negotiated an amended Agreement. Resolution was approved. (Conamunity Development Director) AGENCY RESOLUTION 1562 ADOPTING AN EIR ADDENDUM 90-07A AND APPROVING AN AMENDED AND RESTATED OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AND SCRIPPS HEALTH FOR THE EXPANSION OF HOSPITAL AND RELATED FACILITIES AT THE NORTHEAST CORNER OF "H" STREET AND FIFFH AVENUE Fred Kassman, Redevelopment Coordinator, added that the resulting agreement embodies all the terms and conditions which were approved by the Agency in January 1997 with the one exception of the in-lieu fee payoff that is owed to the City because the project did not develop as originally scheduled. That was negotiated with Scripps in light of the taxes that have accrued fi'om the site and are still accruing from the site because the site is still on the tax rolls. We took all of those taxes into consideration and derived an amount which staff is recommending which is less than the total amount in lieu fees owed, but staff libels it is a thir compromise. Although the revenues which will accrue from the project when it is developed as now planned will not approach the revenues as originally projected until the completion of Phase II. The Agency will be guaranteed a respectable ilow of income which will increase every year. The grading fbr the project has started. Construction will begin before the end of the calendar year. The restated agreement has been approved and executed by Scripps. Member Salas asked for clarification of some of the verbiage in the report regarding the in-lieu payment. Several times it refers to "if the property is exempted from taxes, the Agency will still receive a higher amount." What determines whether or not something is going to be exempted from taxes. Mr. Kassman stated that the applicant has a right to apply for a tax exemption fBr projects. The property has to qualify for tax exemption. It will depend on how Scripps uses the property, and it also depends upon the County Assessor approving their application for abatement of taxes. James Leary, architect representing Scripps Hospital, stated that exemption ti'om taxes has to do with the uses and whether the uses are consistent with the non-profit status. Member Rindone stated he understood from the report was there was $113,193 less the receipts from property taxes which leaves a balance of $72,000. In the financial analysis, it indicates the $72,000 again. So where does the $40,000 figure come from. It was not stated in the staff report, nor was it a part of staff's recommendation. Glen Googins, Deputy City Attorney, stated that the $40,000 figure was a negotiated figure amongst the parties. It does not correlate to any particular formula or equation for calculating what the past due in-lieu amounts would be. After the January 7 approval by the Council of the deal and concept where the $72,000 figure was presented as the additional amounts that would be owing under the in-lieu formula that had been negotiated between the parties, the parties discovered in discussions that they all had different notions about how that calculation should be reached. The formula that staff had originally proposed resulted in a $72,000 figure still owing over and above what staff had already collected in actual property taxes. Others came up with different figures. The parties f'mally decided to compromise to the $40,000 figure as satisfying Scripps' obligation to pay additional amounts that were due above and beyond property taxes actually collected from the time Scripps acquired the property up through December 31, 1996. That was a compromise and settlement of past due amounts that the parties reached agreement on. Although it might not be as conspicuous as it ought to be, he did find it referenced on top of page 4-7 of the staff report where it refers to the $40,000 figure having been approved by Scripps, and it was recommended by City staff'. He agreed it could have been highlighted better in the staff report. Minutes October 21, 1997 Page 3 This being the time and place as advertised, the public hearing was opened. There being no one indicating a desire to speak, the public heating was closed. RESOLUTION 1562 OFFERED BY MEMBER SALAS, heading read, text waived, passed and approved unanimously 5-0. ACTION ITEMS 5. AGENCY RESOLUTION 1563 AND COUNCIL RESOLUTION 18801 ADOPTING NEGATIVE DECLARATION IS-98-02, DEEMING ALL OWNER PARTICIPATION RIGHTS WAIVED, AND APPROVING PURCHASE AND SALE AGREEMENT BY AND BETWEEN THE CITY COUNCIL OF CHULA VISTA, AND THE RESPECTIVE PROPERTY OWNERS OF 3554 MAIN STREET, CHULA VISTA, FOR THE PURPOSES OF SITING THE OTAY GYMNASIUM PROJECT - On 5/6/97, the Agency/Council authorized staff to negotiate for the acquisition of property at 3554 Main Street for the proposed Otay Gymnasium. An Initial Study was conducted and a Negative Declaration was issued for public review. Resolution was approved. (Cormnunity Development Director) Lyle Haynes, Assistant to the Community Development Director, reported the item is to approve a purchase and sale agreement tier the property at 3554 Main Street for the purposes of siting the Otay Gymnasium. The purchase price includes the value for the improvements. That is important because it is the subject of some revisions that we need to make to the purchase agreement. Council needs to be aware that the minor revisions associated with the purchase agreement is that we need to reflect a decrease in the purchase price of $7,890 from $410,000 to $402,110. The decrease represents the residual value of the site improvements that the tenant will actually be relocating to his new business site. In addition, there will be another minor adjustment in the purchase agreement that the City Attorney has already crafted that relates to the disbursements of those proceeds. It came to our attention that the tenant actually installed those improvements; therefore, for the improvements that are still left on site, the disbursements from the proceeds need to be paid to the tenant and not to the property owners which is the way it is reflected in the existing agreement. Staff's recormnendation would include the modifications. Member Salas stated that the report indicates the Main Street improvements and traffic signal was not projected into the cost of the project. The report talks about an immediate need for the improvements. She wanted to know if the project was accelerating the need ti:~r those improvelnents or was the need already there. Sid Mortis, Assistant Executive Director, stated that the funds ti~r those capital improvement projects were included in a previous budget for capital expenditures by the City. The reason we are not including them into our capital cost related to the Otay Gym is it is something which we had already anticipated and needed regardless of what was happening with the Otay Gym at that site or the other site. Those funds were already budgeted. Member Moot asked Parks and Recreation regarding the increase in the budget for this, there was an increase under the building section and a corresponding increase in the construction cost. He asked for a clarification and what the distinction was between the two. Sunny Shy, Deputy Director of Recreation, replied that originally the architects estimate was $90 per square foot. A more recent estimate is $110 to $120 per square tbot fi>r construction costs. This included the upgrades which had to be made to provide internal sprinkling systems in order not to have the turn-around radius that would be needed for the fire department. That increased the square foot cost considerably. With regards to some of the other construction costs, our original plan was behind the Otay MAC Center. No parking was included since we were using the school parking lot. There was none of the hardscaping or lighting needed on the Main Street property. We are now developing parking lots and more hardscape which includes security lighting that is necessary to accommodate those parking structures and in increased plaza areas. Ii Minutes October 21, 1997 Page 4 AGENCY RESOLUTION 1563 AND COUNCIL RESOLUTION 18801 OFFERED BY CHAIR/MAYOR HORTON, heading read, text waived, passed and approved 5-0. OTHER BUSINESS 6. DIRECTOR/CITY MANAGER'S REPORT(S) - none 7. CHAIR/MAYOR'S REPORT(S) - none 8. AGENCY/COUNCIL MEMBER COMMENTS - none ADJOURNMENT The meeting adjourned at 8:52 p.m. Respectfully submitted, Beverly A. Authelet, CMC/AAE City Clerk