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HomeMy WebLinkAboutrda min 1991/11/07 MINUTES OF A JOINT MEETING OF THE REDEVELOPMENT AGENCY/ CITY COUNCIL OF THE CITY OF CHULA VISTA Thursday, November 7, 1991 Council Chambers 4:02 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL Present: Members Grasser Horton, Malcolm, Moore, Rindone, and Mayor Nader Also Present: City Manager Goss, City Attorney Boogaard, Community Development Director Salomone, Redevelopment Coordinator Kassman 2. APPROVAL OF MINUTES: October 1, 1991 and October 22, 1991 Member Rindone stated he would abstain ti'om voting on the minutes of October 1, 1991 due to his absence from that meeting. MSUC (Malcolm/Moore) to approve the minutes of October 1, 1991 and October 22, 1991 as submitted. CONSENT CALENDAR (Items 3, 4 and 5) Item number 5 was pulled fi'om the consent calendar by Member Rindone. 3. WRITTEN COMMUNICATIONS: None 4. RESOLUTION 1211 AMENDING REDEVELOPMENT AGENCY BYLAWS - At the request of the Agency, the first Agency meeting of each month has been moved from the first Thursday to first Tuesday of the month to coincide with the 4:00 p.m. City Council meeting. The proposed amendment to the Bylaws designates that new day and time as a regular meeting of the Agency, thereby obviating the need to call a Special Meeting, and identifies the place as the Council Chambers. RESOLUTION OFFERED BY MEMBER MALCOLM, the reading of the text was waived by unanimous consent, passed and was appreved unanimously. 5. RESOLUTION 1212 APPROVING AN AGREEMENT WITH DIANA RICHARDSON FOR CONTRACT ENVIRONMENTAL SERVICES - Pulled from the Consent Calendar. Councilman Rindone stated he could support the request for this consultant, however, he was not sure how the salary was determined. It is a salary in excess of the Assistant City Attorney and Councilman Rindone believes it is quite excessive for a consultant fee. Minutes November 7, 1991 Page 2 Community Development Director Salomone stated the contract is fbr $65.00 an hour. It is the standard fee for an environmental specialist of this type. In order to expedite the top six priorities as per the Agency and Council direction, this contract work is necessary. Mr. Salomone responded to further questions noting that the expertise that is involved isn't available in the standard staff roster of the City. This contract is an extension of a contract for a particular individual who is doing an exemplary job for the City. Councilwoman Grasser Horton questioned why, at the end of the six month period, has staff not evaluated the need for an in-house person? Why has this not been done sooner7 Mr. Salomone stated that in the budget process the Planning Director and the Community Development Director are forwarding work programs to the City Manager for analysis in the coming budget year that contemplates additional staff. The practice at this point has been to augment staff in the environmental area with environmental specialists such as this. Responding further, Mr. Salomone stated current work demands of the Bayfront Task Force and the other projects cause this to be brought before the Agency now. Advertising and hiring a full time staff would not allow these efforts to continue in a timely fashion. He further pointed out that today is the last day for one of the staff members who dealt heavily in all of the environmental projects. THE RESOLUTION WAS OFFERED BY COUNCILMAN MALCOLM, the reading of the text was waived by unanimous consent, passed and was approved unanimously. END OF CONSENT CALENDAR PUBLIC HEAR1NGS None submitted. ORAL COMMUNICATIONS None. ACTION ITEMS None submitted. OTHER: STRUCTURED MEETI~G AGENDA 6. SCRIPPS MEMORIAL HOSPITAL EXPANSION PROJECT REPORT FOR JOINT SPECIAL PUBLIC MEETING OF THE CITY COUNCIL AND REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, AND RELATED HEARINGS REGARDING THE PROPOSED SCRIPPS HOSPITAL EXPANSION PLAN Minutes November 7, 1991 Page 3 REPORT ON CERTIFICATION OF FINAL ENVIRONMENTAL IMPACT REPORT ON THE SCRIPPS MEMORIAL HOSPITAL EXPANSION PROJECT (EIR-90-07) City Attorney Boogaard advised the public that this is a joint meeting between the Re, development Agency and the City Council. He pointed out that the agenda in this matter needs to be structured because in addition to trying to achieve development, it is necessary to coordinate the requirements of the California Environmental Quality Act and eminent domain, redevelopment and land use law, and extend due process rights to all parties as well as try to mitigate certain risks. He proposed eight steps to follow in order to this in the right order. The first step will be the opportunity for all the owner participants to present their plans to the Agency and to the Council. Mr. Boogaard recommended the Circinus Corporation present their plan first followed by Scripps and the Coalition. Next, rebuttal will be allowed by those three parties in reverse order, of problems they see in each of the other presenter's plan. Next, staff will present the Final Environmental Impact Report. The Council/Agency will then be asked to pass the certification resolution. After that all the parties will be allowed summation. If, at this point, the Council/Agency rejects the Scripps and Coalition plans, it is requested that the meeting be stopped and direction be given to staff to meet with the Circinus Corporation for further negotiation. If the Cireinus and Coalition plans are rejected, this meeting can proceed tonight. However, if Circinus and Scripps plans are rejected, it will be necessary to go back and negotiate further with the Coalition. Therefore, at this point in the meeting there is a risk that this meeting may terminate. If it doesn't terminate, it is requested that the Council/Agency conduct a joint hearing on the Conditional Use Permit by the Council end a Special Permit by the Agency of the remaining Scripps plan. If that is successfully performed then the Agency/Council will be asked to conduct a Resolution of Necessity hearing in order to assemble the necessary land for the project. The City Council will be called on in the seventh step to approve the Owner Participation Agreement (OPA) transaction. Finally, the Agency will be asked to approve the OPA and authorize the Executive Director and Chair to execute it. Mr. Boogaard further informed the Council/Agency that a Re, development Plan provides that whenever possible persons who are owners of real property in the Project Area shall be given the opportunity to participat~ in redevelopmerit. It provides that the Agency shall extend reasonable preference to persons who are engaged in business in the Project Area. This would apply to tenants. He advised that the law on Owner Participation Rights is such that it does not give owners and tenants the absolute right to participate in redevelopment. It gives them the right to present a conceptual plan and ask that it be approved. Mr. Boogaard stated he would like to enter into the record a history of what Owner Participation Rights were extended. Towards the end of 1988, Scripps submitted a plan for the development of the property. Near the end of 1988, Champion Development proposed some commercial development on the property. In February 1989, after consideration of these two, the Agency directed staff to contact owners and tenants on the site to see what they may want to do with regard to their own particular participation with that property. Staff informally contacted various owners and tenants and informally solicited Owner Participation Right proposals. In response to staff investigation of interest, several owners and tenants, including Malnick, Champion and Scripps, submitted proposals. In May 1989, the Agency entertained proposals from various developers for the redevelopment of that site and in October 1989, authorized staff to negotiate with one of those developers, Scripps Memorial Hospital, for two six-month periods. This expired on its own terms on October 18, 1990. At the Agency meeting they reversed the previous direction and approved a semi-exclusive negotiating agreement, which allowed staff to negotiate Owner Participation Rights and plans with other parties. Mr. Boogaard referred to a letter dated October 26, signed by the Community Development Director, which he asked be made a part of the administrative record. It was inviting the other parties to exercise their Owner Participation Rights by submitting an alternative Owner Participation Plan. In response to this letter requests for participation were received by the "H" Street Coalition and Circinus Corporation in addition to the Scripps negotiation. Mr. Wayne Weneke, Circinus Corporation, stated that he represents the owners of the master ground lease for the entire site and Circinus Corporation. The Circinus proposal is a commercial retail alternative. The general character should remain essentially the same. He pointed out that it is the nature of a retail site to not be completely Minutes November 7, 1991 Page 4 \ defined until tenants are signed up because specifics are built for the tenants. Part of the reason their proposal is in this early stage is because of the process itself. He commented that they were initially quashed from participation and have found it necessary to spend an immense amount of time trying to manage the administrative process regarding the Scripps expansion. Mr. Wencke added that this project is going to be unique. The area is zoned retail commercial and the Re, development Plan calls for retail commercial in that area. It is their belief that this would be the best alternative environmen~ally and otherwise. In his opinion, the Circinus project has the least impact to the community and it brings the best benefit. Mr. Wencke commented it is unfortunate they are not able to just present their project because it is linked to the Scripps project. He believes they have been given a back seat to the Scripps project. He further pointed out there are a lot of unanswered questions surrounding the Scripps proposal, one of which is alternate sites. Mr. Wencke stated that at the Town Centre Project Area Committee meeting held on this date, the question was asked by a committee member if any alternate sites had been examined and/or analyzed for the Scripps Hospital expansion. The answer was no, they have not. Circinus Corporation offered three suggestions of alternative sites for the hospital expansion. He believes it is also important to note that the use, of every building in the existing hospital facility will change. Michael Jacobs, Vice President of Circinus Corporation, stated his participation in this project would be as a partner in the project. He commented that it is unfortunate that they are not able to present some of the visual effects that the Council/Agency will see from other parties. However, they have been advised that it would be imprudent for them to spend hundreds of thousands of dollars on this sort of thing until they are made something other than an alternative to this project. Their site plan basically shows existing square footage of approximately 104,000 to 105,000 squar~ feet. They propose to take the old buildings down and put new buildings up. However, it is going to be in such a manner that will create an environment that does not exist in the city now. They would like to put something there that will keep people here. In addition, they want to bring tenants into the area that do not exist in Chula Vista. They have a list of tenants, several national tenants, that want to be on that site. Mr. Jacobs further commented the revenue streams that will be received from this shopping center are comparable to and can even be far greater than the other alternatives that will be presented later tonight. Joseph Solomon, attorney with Worley, Schwartz, Garfield and Rice, representing Circinus Corporation, stated they have a tremendous amount of respect for Scripps as an institution, however, they believe that this is not the right site for the Scripps project. The Circinus project is unique in that it is a comprehensive destination entertainment retail center. He pointed out that in the Scripps EIR it is estimated that between $2.3 and $2.8 million in present value will be brought in. The Scripps project at Phase Ultimate is slated to bring in about $2.3 million, but as expressly stated in the EIR, Phase Ultimate may never happen. The proposed in-lieu payments amount to approximately $1.9 million in present value. Mr. Solomon also commented it is his belief that Circinus has never been on the same playing field as Scripps. He noted Scripps had an Exclusive Negotiating Agreement with the City for a year and when it became semi- exclusive, they really became alternatives in the EIR. Therefore, for Circinus to invest the type of dollars that a lead proponent would invest would have been foolish. City Attorney Boogaard asked that certain matters be entered on the record. He pointed out it is important to understand the certification that will occur before project elimination is not deemed to be project approval. The Council/Agency will be saying that the EIR was prepared adequately. This EIR is an EIR for the Scripps project. It is not an EIR for the Circinus or Coalition plans. He stated he did not want the lack of detailed preparation by the Coalition or the Circinus people to be held against them. He would like the Agency and Council to appreciate their plans conceptually only and not feel that they should have been here tonight with a detailed diagram, a model and an OPA. That is not what was requested in the Owner Participation Right exercise. Minutes November 7, 1991 Page S Jeff Bills, Administrator of Scripps Memorial Hospital, stated that Scripps Hospital is licensed for 159 beds and is fully accredited by the Joint Commission lbr the Accreditation of Health Care Organizations. They currently employ over 800 individuals on full and part time bases. They have over 320 physicians on their medical staff of which approximately 97% are Board certified in their respective specialties. Mr. Bills further noted that in 1986, when they purchased what was then Bay Hospital, their initial primary objective was to stabilize the hospital financially which they have been able to do. After doing this, they began to plan for the future health care needs of the community. A strategic business plan was developed, a master site plan was developed, and from these plans it became apparent that the existing hospital, the building and site were inadequate not only for current business but also inadequate to meet the needs of the Chula Vista community in the future. They currently have approximately 500 square feet of space per hospital bed compared to an average of between 1200 and 1600 square feet per bed for other community hospitals across the nation. This constraint severely hampers the ability of the physicians, nurses and support staff to provide care, do diagnostic tests and provide therapy. This lack of space also limits adequate waiting areas for patients, rest and respite areas for staff, as well as patients' families, storage areas and support areas. They are also at capacity in the facility. They currently run between 82 and 85 % occupancy. The lack of space also prohibits adding new services. This problem contributes to the fact that approximately 35 % of the patients from the Chula Vista community who require hospital care bypass this community and go north for their hospital services. Mr. Bills further noted the current facility constraints do not allow them to meet the future needs of the community, to attract new physicians and professional staff. J. Frank Mahoney, member of the Board of Trustees of Scripps Memorial Hospitals, commented that with the encouragement of the City Council of the City of Chuta Vista, Scripps took on the task of acquiring the faltering Bay General Hospital. This move challenged both the resources and personnel of their entire non-profit hospital system. But they saw the overriding need for quality medical care in this community. On behalf of the Board of Trustees of Scripps Memorial Hospitals, Mr. Mahoney urged adoption of the Scripps Memorial Hospital Chain Vista expansion plan. James Leafy, Architect representing Scripps Memorial Hospital, stated the project is well planned and well designed for a major civic element located within the urban core. He pointed out that an alternate site not located at the urban core at this location on H Street, is financially infeasible. In addition, Scripps needs the entire redevelopment site in Phase One of its proposal for parking, for visual access, for orderly vehicular circulation and access and fully develop the wellhess environment. The first phase has been portrayed as an under-utilized project. He pointed out that the approximate 180,000 square feet that is proposed in the first phase represents a floor area ratio of approximately .5. In a normal single story project, that would mean a project that had 50% coverage. By the time Ultimate Phase is reached there will be a floor area ratio of 1.4. Mr. Leafy proceeded with giving a slide presentation. Gail MacLeod, consultant with the "H" Street Business Coalition, distributed copies of a booklet containing information about their proposal. She commented that approximately a year and a half ago the businesses that compose the Coalition were strong in their desire of not wanting to leave their present site. Since that time they have evolved into an attitude of wanting to compromise, cooperate and work within the system and to try to work with the Scripps proposal. The case made by Scripps for the expansion of health care needs and taking care of the health care needs in Chula Vista is strong and the Coalition wanted to come up with a solution that worked within the system, achieved their needs and also helped achieve the Coalition's needs. Ms. MacLeod stated their proposal is that during Phase One only that the three Coalition businesses, First Interstate Bank, ReadiCare and Arby's, remain on site. The Hospital expansion would be exactly where it is proposed to It is totally unchanged. Patient needs will not be affected. The only area in which the Coalition proposes a change is where Scripps presently proposes to build the western wing of the office building. The Coalition proposal by contrast is to build that northern wing first leaving the three businesses at their current location. In addition, the Minutes November 7, 1991 Page 6 Coalition proposes to upgrade landscaping and signage to conform to the Design Review Committee and Scripps' intent. Ms. MacLeod further noted one of the merits of their proposal is that it will eliminate the under-utilization of the site until the Phase Two construction. The Coalition businesses do not interlYre with Scripps Phase One expansion. They do not interfere with their ultimate expansion. The Coalition agreement is that they will be gone when Scripps is ready to construct Phase Two, the Ultimate Phase. Ms. MacLeod added that when Scripps is ready to do their Ultimate Phase, they are proposing a parking garage. By having the Coalition's departure concurrent with the construction of Phase Two, the area currently occupied by the Coalition businesses will be well suited to a temporary parking lot to help offset the significant impact that will be caused by the construction of that parking garage. Ms. MacLeod commented that the one issue they would like to bring to the attention of the Council/Agency is the financial benefit to both the City and to Scripps. The tenants that would be remaining on site would be paying over $96,000 a year in lease payments to Scripps. Over a ten year period, this would be $960,000. For fifteen years, this would be $1.4 million. With regard to the sales tax generated, Arby's alone generates $82,500 a year. Over ten years, that figure is $825,000; over fifteen years, that figure is $1.2 million. Another point is that the Coalition proposal helps avoid the high cost and delays associated with the city's condemnation power at least with respect to the Coalition businesses' property or interests. Regarding the question of aesthetics and visual quality, Ms. MacLeod stated the Coalition proposes significant improvements in upgrading of landscaping and signage and painting the buildings. She pointed out that the Scripps proposal without the Coalition businesses has unmitigated significant visual quality impacts. By keeping the Coalition businesses there will also be visual quality impacts, however, they believe they are substantially mitigable and that the same overriding considerations needed to be made for the Scripps proposal could also be made for the Coalition proposal. Regarding traffic circulation, the Coalition has provided the patient drop-off areas, voided the turning conflict staff was concerned about, and made all the mitigations and accommodations in the site plan. Noise and odor have been brought up as issues. There will not be a noise problem coming from that site. With regard to the odor problem, there is no odor from the Arby's today. However, if there was an imagined odor, the climate controlled hospital would not allow any kind of odor. Charles Harmon, representing the 'H' Street Business Coalition, commented that it has been said that Scripps has made a compromise proposal to the Coalition and that the Coalition will not have to vacate until 1993 or 1994. This is nothing more than a realization that Scripps could not seek an Order of Possession prior to that period because of the construction delays and the time involved in processing paperwork. It is not a concession on the part of Scripps. Mr. Harmon further pointed out that the Redevelopment Plan developed in 1988 for this area specifically designated retail commercial. On page 109 of the Town Centre I1 Redevelopment Plan, it states that it is intended to be rcdeveloped as a shopping center. In addition, the Redevelopment Plan states that reasonable preferences should be extended to those businesses wanting to reenter the area when it is redeveloped. Scripps' plan alone does not fulfill that part of the Redevelopment Plan. The 'H" Street Coalition proposal fulfills that part of the promise. Mr. Harmon read a section of the Redevelopment Plan to the Council, the reasons for selecting the amendment area, page 123, 'The desire to facilitate the retention and expansion of as many of the commercial enterprises as possible for redevelopmerit activities and to encourage the participation of owners and business operators in the revitalization of the project in the amended areas.' The intent is for retention and expansion of commercial enterprises. Regarding the Resolution of Necessity, it asks that the Council make three specific findings. In order to meet one of the findings, in Mr. Harmon's opinion, that the proposal has the greatest public good and the least private injury, ,.. it would be necessary to also adopt the 'H~ Street Coalition. Minutes November 7, 1991 Page 7 Mr. Harmon stated that at the Town Centre Project Area Committee meeting on this date, the Commitrue recommended that the Council/Agency adopt the Scripps plan, modified to include the 'H" Street Coalition partners. In addition, Mr. Harmon entered into the record 1,895 signatures of various citizens of the South Bay and Chula Vista who have been shown the proposal and they agree that it is a good thing to have Scripps, but they would like to have an Arby's, a bank and a RcadiCare there as well. Mr. Harmon comanented that he understands there is a fear that if the Scripps' plan is not adopted as they propose that they are going to pick up and leave, which in Mr. Harmon's opinion is not the case. He believes they will build whether their proposal is chosen or the "H" Street Coalition proposal is chosen. By keeping the Coalition business, it retains 54 employees on that site during Phase One of the Scripps' project. Mr. Harmon asked that the Council/Agency adopt Resolution 1213 C, rejecting Scripps and Circinus plans. City Attorney Boogaard stated he needed to correct certain parts of the staff report. On page 19, there is reference to a special sewer report being required as part of the environmental impact which may be misleading. He pointed out mitigation is required by the project to take the sewer to "G" Street so the environmental impact is not deemed to be significant by the Environmental Impact Report. The project as defined provides for that sewer to "G' Street. Secondly, there are changes in the indemnification provisions that are referenced on page 16 that will be being brought forth. The problem is that there has been some last minute renegotiations that will have to be pres~nt0d and that the final OPA, although anticipated being signed this evening, is not in his hands and he does not have the $500,000 Letter of Credit yet as the report indicates. He would also like to have the September 6, 1991 resolution where staff was authorized to negotiate semi-exclusive agreements with Scripps be part of the administrative record. Mr. Booguard stated at this point in the meeting the rebuttal period will be commenced in the reverse order and that the Coalition group will be permitted to express their critiques of the Scripps and the Circinus plans. Charles Harmon, "H" Street Coalition, noted that contained in the staff report is a comment from the staff which states that the proposal by the "H" Street Coalition will not diminish the advantages of the Scripps proposal to the extent that it does not preclude or inhibit development. Scripps has made the claim that they need all of the space in Phase One, and this statement in the report agrees that the Coalition proposal won't kill that project. Mr. Harmon added with regard to the Circinus proposal, the Coalition does not have any specific comments. They believe that the Council/Agency need to decide whether a shopping center or hospital is needted. City Attorney Booguard asked what is the nature in which Mr. Harmon is expressing the Owner Participation Rights for the "H' Street Coalition in order tbr it to be made a part of the administrative re~ord. He believes it is by virtue of the fact that the Coalition businesses have leasehold interests on the site. He asked if that is correct with regard to the three members of the Coalition? Mr. Harmon stated that Arby's has a leasehold interest, as well as ReadiCare and the bank. Responding to further questions, Mr. Harmon stated that the Arby's lease would expire in May of 2005. He could not speak for the bank and ReadiCare. He believes the leases are far in excess of five years. Jeff' Bills, representing Scripps, stated they ask the Council/Agency to support their prqject as presented. City Attorney Boogaard noted a letter dated April 30 was received from Scripps explaining their complaints about the Coalition plan which he requested be made part of the administrative record. Donald Worlcy, attorney with Worley, Schwartz, Garfield and Rice, representing the Circinus Corporation, stated/ the issue in this matter is whether or not this particular site is the best site for this hospital. Mr. Worley further pointed out that if a close analysis of this proposal through Phase Ultimate is done it will show this is not a hospital Minutes November 7, 1991 Page 8 expansion, but rather a brand new hospital. They are building a replacement hospital and they are doing so entirely on the Circinus property. He further pointed out that the existing hospital building in Phase Ultimate will have z~ro hospital beds. All of the hospital beds are going to be in the new building on the Circinus property. Mr. Worley commented that the Environmental Impact Report is so seriously misleading as to traffic that it cannot be considered a legally adequate document. In hospitals as opposed to any other land use, there are two recognized methods of determining trip generations from a hospital. One is beds, and one is square feet, and the EIR has chosen the bed method. They have estimated 99 beds will be added; therefore, by the trip generation factor of 20 ADTs (average daily trips) per bed they are going to be adding by the hospital expansion alone 1,980 ADTs. However, they are increasing a facility which is 73,994 feet to an ultimate hospital thcility of 446,344 sq. ft. This means that the ultimate hospital is going to be six times as large as the existing hospital. If a traffic engineer's method of predicting traffic based on 90 ADTs per thousand square f~et is used, a total count of 7,440 ADTs is determined. Mr. Worley distributed copies of charts that came out of the Institute of Transportation Engineers Manual. The charts compared the correlation of ADTs with beds on the one hand and square feet on the other. He stated the conclusion from looking at these charts was that the square footage count is the far more reliable methodpredictingADTs. He questioned how the Council/Agency could approve a project which says there is going to be 1,980 ADTs from the hospital expansion when there is a possibility based on superior traffic engineering standards that there is going to be nearly 5,500 more. Mr. Worley further commented that the justification used by the hospital is that they only have 500 sq. ft. per bed and that is substandard and this proposal adds more space so there will be as much space per bed as other hospitals. He pointed out that in computing how many beds they have and where those beds are located now in the existing structure, they have about 660 sq. ft. per bed. He provided copies of a chart which was prepared by the Circinus traffic engineer which was based on SANDAG data that shows that the central Scripps Memorial Hospital right now has 671 sq. ft. per bed. The average of all hospitals in San Diego County is about 1,000 sq. ft. per bed. He added that while it may be true that to some extent the hospital expansion catches up by adding more square feet p~r bed to me~t more nearly national averages, the ultimate hospital will have over 1,700 sq. ft. per bed. Mr. Worley referred to his letter to Mayor Nader which outlined many of the objections that Circinus has with regard to the Scripps proposal one of which is procedural. He believes that his client, Circinus, was deceived very early on by the preccedure. Circinus was given numerous assurances that the owners and the tenants of this property would be taken into consideration, that this redevelopmerit proposal would be in their best interest, at the very same time as negotiations were going on with Scripps to expand this hospital site. Mr. Worley referred to an attachment to the letter to Mayor Nader. The attachment was a memorandum from Scripps dated nine days after the Re, development Agency hearing that approved this redevelopment showing the ongoing negotiations that had occurred. They do not believe that their proposal or anybody else's proposal stands on equal footing. He believes this is a predetermined redevelopment project. Mr. Worley urged the Council/Agency to reject the Scripps proposal. City Attorney Boogaard asked Mr. Worley to state his client's, Ciminus Corporation, claim to Owner Participation Rights. Mr. Worley responded that they are the master ground lessee. City Attorney Boogaard questioned if Wencke, Pelltier, and McCredie are all share holders in the corporation, or are they a partnership? Mr. Worley stated that Circinus is the ground lessee of the fee owner. They have in turn subleased back a portion of that land to the fee owner. They have a 77 year interest which is tantamount to a fee interest in the land. Minutes November 7, 1991 Pago 9 City Attorney Boogaard stated he would like the record to demonstrate that either the Circinus Corporation is the master ground lessee or is a partnership composed of Weneke, Pelltier and McCredie. Wayne Wencke responded that Circinus was a partnership that was formed. Mr. McCredie pulled together the triad that formed that partnership along with Mr. Wencke's father in 1965. The development end of this, and ultimately the Owner Participation Rights, lie with Circinus Corporation. City Attorney Boogaard stated he would like the record to demonstrate whether or not Cireinus has Owner Participation Rights by virtue of ownership of the lease. Mr. Weneke responded affirmatively. City Attorney Boogaard asked if corporate assignment has been made to the Circinus Corporation of the leasehold interest? Mr. Wencke stated that they have an agreement. They have not made a formal assignment or recordation. Councilman Malcolm questioned if Circinus has legal assignment at this time? Mr. Wencke stated there is no recorded assignment. It is a confidential agreement. Councilman Malcolm stated he would like to know if Circinus has any rights. Is there a signed agreement existing today assigning those rights to Circinus? Mr. Weneke responded that they have an inlbrmal agreement to do that. Councilman Malcolm questioned if there is a signed agreement between Circinus and the existing master lessee? Mr. Weneke responded no, however he pointed out he does not believe that they are required to have one. Councilman Malcolm further questioned if they signed an original 75 year ground lease with the fee owner? Mr. Weneke responded yes, as a lessee. Councilman Malcolm asked if they then turned around and subleased for the same length of time a major portion of that. Mr. Wencke responded that these were not concurrent transactions. Councilman Malcolm stated that sometime later on Mr. Wencke subleased a major portion of that property ~ a third party to expire at the same time that the master sublease expires. Mr. Weneke stated this occurred essentially at the concurrent time. Councilman Malcolm questioned if that is over 80% of the property? Mr. Wencke stated he did not know what the exact percentage was but it is somewhere in the 70 to 80% range. It is a significant portion of the property. Councilman Malcolm asked what portion does it exclude'? Mr. Weneke responded it excludes the northeast corner of Fifth and H. Minutes November 7, 1991 Page 10 Joseph Solomon noted Mr. Wencke is the only ownership interest presenting a proposal/br Council/Agency consideration. In addition, Mr. Solomon pointed out the zoning ordinance, Section 19. 14080(D), states "The granting of a Conditional Use Permit shall not adversely effect the General Plan of the City or the adopted plan of any governmental agency". This points out that zoning is a flexible overlay that needs guidance from a General Plan or perhaps another plan. There are two such plans and they both give the same guidelines. The General Plan refers to retail commercial. The Re, development Plan specifically states, "The retail commercial site 4 uses allowed am intended to be neighborhood and community shopping center". He stated there has been some counter argument that the new hospital will provide jobs to counteract this depreciation in retail sales on the site. However, Phase Ultimate is not guaranteed. Mr. Solomon further pointed out it is possible to challenge the implementation of the Redevelopment Plan. They believe that this plan is being implemented illegally. He cited a case, Redevelooment Aeencv vs. Harold, a California Appellate decision, in which a plan was adopted saying one thing and it was implemented into something else. He quoted: "The sixty day limitation period does not apply to the type of challenge appellant is making here because he is not attacking the legality of the Re, development Plan as originally adopted, but is questioning the implementation of the plan with respect to this property. Appellant had no mason to object when the Plan was adopted. It was not apparent at that time that the Agency might be deviating from its resolved purpose in planning an illegal use for the property. This section cannot be used to immunize an agency which adopts a Re, development Plan legal on its face then after the sixty day period has elapsed deviates from its resolved purpose and seeks to violate the requirement of the California Constitution and the due process clause of the United States Constitution." Mr. Solomon further quoted from the letter Mr. Wencke submitted to the Redevelopment Agency on May 23, 1989, "The commitment to enter exclusive negotiations with Scripps will effectively deny the holder of the master lease the legal right to participate in the redevelopment of the shopping center as owner participants." City Attorney Boogaard stated the issue of General Plan consistency is one that staff is sensitive to and despite the .Harold case believe that this plan is consistent with both the General Plan and the Redevelopment Plan. He summarized that the FEIR incorrectly identified that the land use element designated Central Commercial. In fact, it is Retail Commercial. However, on balance with the other goals and objectives that are stated in the General Plan which am identified on pages 251 through 256, this proposal is consistent with both the General Plan and the Redevelopment Plan by virtue of satisfying the goals and objectives that are identified in the General Plan and the Redevelopment Plan on those pages. Mr. Boogaard discussed the recommendations of the Boards and Commissions. On October 28, the Design Review Committee reviewed and considered the Final EIR and recommended it to this body for their certification. Mr. Boogaard stated he would like the Design Review Committee minutes to be made a part of the administrative record of this proceeding. Mr. Boogaard reported that at the meeting of November 4, 1991, the Resource Conservation Committee was asked to consider the Final Environmental Impact Report. He stated transcribed minutes were not available, however, the Resoume Conservation Committee did recommend the certification of the Final Environmental Impact Report to this body for approval. On November 6, 1991, the Planning Commission considered recommending certification of the Final EIR and the Conditional Use Permit, and made that recommendation for approval of the EIR and the recommendations on the Conditional Use Permit for the Scripps project. A copy of the minutes of same were distributed and Mr. Boogaard requested that they be made part of the administrative record. On this date the Town Centre Project Area Committee met to review and consider the Final Environmental Impact Report. Mr. Boogaard requested that Mr. Kassman give a report on their activities. Mr. Boogaard was given a copy of the minutes of that meeting which he requested be made a part of the administrative record of the proceeding. Fred Kassman, Redevelopment Coordinator, reported that the Town Centre Project Area Committee considered the EIR and voted to approve the "H" Street Coalition alternative along with the Scripps alternative. The vote was 5 tol. Minutes November 7, 1991 Page 11 City Attorney Boogaard stressed that certification of the Environmental Impact Report does not mean project approval. It means that the report before the Council/Agency that is in Tab 17 as well as the appendices (A through H), which Mr. Boogaard requested be made part of the administrative record, has been prepared in compliance with CEQA Guidelines. Maryann Miller, Environmental Review Section of the Planning Department, provided an overview of the Final EIR for the Scripps Memorial Hospital expansion. She reported that the Final EIR consists of the recirculated Draft EIR dated October 21, 1991, with typographical and minor corrections, the responses to comments received on the recirculated Draft, Attachment A which is an addendum to the economic analysis, and Appendices A through H dated August 1991. The EIR analyzed the impacts of the Scripps Memorial Hospital expansion and specifically the following impact areas: land use and community character, traffic and circulation, noise, air quality, geology and soils, water conservation, visual quality, public services and facilities, and secondary impacts. All impacts that wero identified can be reduced to a level below significance with the exception of cumulative water conservation, cumulative school impacts, secondary impacts, and visual impacts. For this reason, a Statement of Overriding Considerations must be adopted as well as CEQA findings for the project. Ms. Miller noted that a number of comment letters were received on the methodology that was used in the traffic portion of the EIR, specifically as it pertains to the per bed trip generation rate that was used. She clarified that the per bed trip generation rate is a regionally approved rate and is actually higher than the nationally accepted Institute for Transportation Engineers rate. It is considered a more reliable rate for a hospital use. Ms. Miller reported that alternatives to the proposed hospital expansion were considered in the document. The alternatives analysis are a requirement of CEQA. The alternative projects are separate from the proposed hospital expansion and are not part of the project description. Alternatives included the No Project Off Site Alternative, Reduced Intensity Alternative, No "G" Street Access Alternative, Retail Entertainment Alternative, and the Street Business Coalition alternative. The No "G" Street Access Alternative excludes access to the site from Street. It was concluded that traffic impacts would not be significant due to the presence of two other emergency vehicle and staff entrances into the prqject site. Noise impacts with the No "G" Street Access Alternative would also be lessened significantly. Second, a No Project Off Site Alternative analysis was conducted. This alternative analysis would avoid the impacts of the project since no hospital expansion would occur with the No Project Alternative. A number of comment letters were received specifically from Circinus Corporation recommending alternative sites be identified for the Scripps Hospital in the eastern territories of the City. The main objective of the project is to expand the existing hospital and to use the redevelopment portion of the site, therefore, alternative sites would not meet the project objective. If a hospital were built in the eastern territories, specifically a Scripps Hospital, environmental impacts could be expected to a number of impact areas including vegetation, wild life, water and other areas since this portion of the City is largely undeveloped and public services and facilities are not as readily available. Additionally, placing a six story hospital building in the eastern portion of the City could have significant visual impacts as well as significant growth inducing impacts. A thcility in downtown Chula Vista would represent in-fill development and serve the residents of this portion of central Chula Vista. A hospital located in the eastern territories could have growth inducing impacts as other medically related uses are attracted to that area. Another alternative analysis that was included in the EIR is the "H" Street Business Coalition Alternative. Under this phasing alternative, Arby's Restaurant, First Interstate Bank and ReadiCare would remain on the site during Phase One of the hospital expansion. Although the hospital expansion square footage and facilities would remain the same, the location of the proposed medical office building would need to be redesigned as would the entry along "H" Street to the hospital. Impacts for this alternative would generally be the same as for the Scripps project with the exception of land use, visual, traffic, noise and air quality impacts. Primarily, land use impacts would occur through the elimination of some parking, landscaping and courtyard area during Phase One with the retention of the commercial uses and would also require redesign of the proposed medical office building. Traffic impacts may also occur due to the close proximity of the Arby's driveway during Phase One to the hospital ingress driveway, Minutes November 7, 1991 Page 12 and there may be a necessity for the project to find additional parking as this alternative would remove some of the propose~l surface parking on the site. Noise and air quality impacts under this alternative would increase with the additional traffic that would be generated with the retention of these commercial uses during Phase One. Regarding the Circinus Corporation Retail and Entertainment Alternative, the 8.9 acre expansion area would be redevelol~d exclusively as a commercial center including a combination of restaurants, theaters, banks and recreational uses for a total of 124,990 sq. ft. No hospital expansion would occur with this alternative. Environmental impacts under the Retail Entertainment Alternative would generally be the same as for the proposed project with the exception of th~ following impact areas. Health impacts would be reduced under this alt~rnativ~ since no hospital expansion would occur. Potential school impacts may occur since it is not known whether the northwest portion of the site would be dedicated to the Sweetwater Union High School District as it would with the propose~l project. Potential land use compatibility issues could result from a retail entertainment use adjacent to the existing Junior High School. Traffic impacts could be expected since this alternative generates a larger amount of ADT than the proposed project. However, it is anticipated that the traffic could be mitigated to below a level of significance. Visual impacts under the Retail Entertainment Alternative would perhaps be less than the proposed project since it is assumed that the proposed commercial development would be of a lower profile than the medical office building as proposed with the Scripps expansion. However, because there are not detailed site plans available that really cannot be determined at this time. Ms. Miller further noted that the Final EIR was made available to the public from October 22 through October 29. Additional comment letters were received on the Final EIR and these have been presented in Attachment A to the agenda statement. Responses were made to these comment letters and were presented in Attachment B. Ms. Miller r~ferred to the correction sheet that was hand delivered this evening to the Council/Agency which points out minor corrections to the agenda statement. Dr. Tom Martinez stated he is a physician on the medical staff at Scripps Memorial Hospital, past Chief of Staff, and currently the president-elect of the San Diego County Medical Society. He asked that the Council/Agency adopt the Scripps Memorial Chula Vista expansion plan. Dr. Carlan Stayboldt, stated she is a pathologist at Scripps Memorial Hospital in Chula Vista. She asked the Council/Agency to support the Scripps expansion. Dick Kau, Dicl~ Kau Land Company, asked the Council/Agency to support the "H' Street Coalition. John Kracha, 358 East Millan Street, Chula Vista, 91910-6314, commented on concerns with the Circinus proposal. Wayne Wencke commented that their objections are well documented. The objections include areas from toxic, water, sawer, economic issues, and alternate sites. He urged the Council/Agency to again review all the issues that have been raised and deny the Final EIR. City Attorney Booguard asked Mr. Wenck~ to state for the record if he represents his associate partners, McCredie and Pelltier, in his presentation7 Wayne Wencke responded that yes, he does. Philip Hinshaw, 3570 Camino del Rio North, San Diego, spoke on behalf of the Circinus Corporation. He commented that there are two significant unmitigated impacts, cumulative water impacts and visual quality impacts. With regard to the water, the EIR states that the hospital will increase water usage on the site by 10,280 gallons a day and that has a cumulative unmitigated impact. The EIR says that the "G" and "H" Street sewer lines are at 97% of their peak capacity at the current time. The EIR did not identify how the increased sewage flow coming from the hospital is going to be handled. It does say that a study should be done later after the project is approved Minutes November 7, 1991 Page 13 to identify how this increased sewage flow would be accommodated. It would be a condition of approval. It is not known whether the existing facilities can handle that additional sewage. He pointed out that there is conceivably growth~inducing impacts that would result from increased sewer capacity. There may be cumulative impacts because immediately across the street is the expansion of the mall. They believe that the EIR is deficient and inadequate in that respect. Mr. Hinshaw further pointed out that the EIR says the goal of the project is to expand on the current site. He believes what is being proposed is a replacement hospital, not an expanded hospital. The EIR states with regard to alternative sites that there is no vacant parcel west of I-5 for them to build a hospital. He stated that neither is the Circinus site available in that it is not a vacant site. Another point with regard to visual impacts is that the hospital owns at least one parcel to the east of the current hospital. There is a brief mention of the possibility of expanding the current hospital to the east and the north. But, that is not discussed in the EIR. There are significant unmitigated visual impacts with the proposed Scripps project. It is not known whether or not an expansion to the north and east could reduce those visual impacts to a less than significant level. The information is not in the EIR. He suggested that the Council/Agency find the EIR inadequate on the sewer and the alternatives analysis of visual impacts. Joseph Solomon commented that the most important point is the way this project came about. The fact that at the redevelopment hearing the property owners were misled. At the same time Scripps was submitting a plan for the new hospital on the site. This was the only site that Scripps ever considered. He referred to a legal ease where this happened before, Norm Slausen. It was a 1985 case and he quoted: "By the time the Agency actually conducted a hearing to determine the necessity for taking the property in question, it had by virtue of its contract with the developer irrevocably conumtted itself to take the property in question regardless of any evidence that might be presented at the hearings. All the while, the owner had been misled if not deceived as to what fate was going to befall his property." Mr. Solomon urged the Council/Agency to vote to adopt Agency Resolution 1213(A) directing staff to bring back the implementing measures necessary to accomplish the Circinus Retail Entertainment Alternative. City Attorney Boogaard stated he would like to enter into the record that he is familiar with the Norm Slausen case and the facts that were in that case do not present themselves here since the OPA has never been presented to this Agency. It won't be presented to this Agency until after a resolution of eminent domain proceeding is considered. That won't even be presented to this Agency or City Council until after there has been a plan elimination effort and a full consideration of all plans has been presented. Paul Peterson, 530 "B" Street, San Diego, attorney, stated he is representing the owner of the property, the fee owner and the person who also owns the master sublease. Chula Vista Properties is his client. It is a partnership who owns the f~e. Mr. Wencke's interest is with master ground lease. His client owns everything, the fee and all the subleases, except First Interstate Bank and ReadiCare. Mr. Wencke's partnership has an internst in theFirst Interstate Bank lease and in the ReadiCare lease. Mr. Peterson stated that his client believes that the EIR is adequate. His client believes that the General Plan is not being violated and that the Council/Agency has the right to select this kind of a use under the Conditional Use Permit ordinances. He believes it is appropriate for the Council/Agency to balance the equities between the parties and choose a hospital use as opposed to a shopping center use. Mr. Peterson commented that his client has never received notice that the partnership which is the record owner of this lease ever assigned it to Circinus. They show the record owner of this lease to be in a recorded document, Donald K. McCredie, Trustee for the McCredies, James P. and Mary L. Pelltier, and Walter Weneke, Trustee for Wanda and Wayne Weneke. They understand that Wayne and Wanda Weneke, as the children of Walter Weneke, have taken his interest which is acceptable under the circumstances and Mr. Peterson raises no challenge to that whatsoever. However, his client has never received any notice that Circinus has become the ground lessee. Mr. Minutes November 7, 1991 Page 14 Peterson noted that Mr. Weneke stated that there was an informal agreement to contribute all of the partners' interests into Circinus Corporation. This did not exist to their knowledge in late this year when they received a certificate from the ground lessees as to who were the ground lessees. When Mr. Peterson met with the McCredies and the Pelltiers about a month ago, in his professional opinion, the McCredies and the Pelltiers had not at that point contributed orally or in writing their interests to Circinus Corporation. He, therefore, raises a question of standing of the right of Circinus Corporation to come before the Council/Agency and present a proposal. Mr. Peterson added that there has been a substantial cloud on this property for three years. It has been very difficult to find tenants for this property. They believe that the Scripps proposal is the one that will bring it to a conclusion the fastest and is the most certain. The Circinus proposal would mean years more of trying m develop something that would work. He urged the Council/Agency to proceed with the staff recommendation. City Attorney Booguard asked if each of the plan proponents would state for the record that they feel they have given adequate summation of their plans and their position so that any further summation is not necessary. Charles Harmon, "H" Street Coalition, stated he has no further comments on the Final EIR. He reserved the right to give further summation. Donald Worley, Circinus, commented on the environmental traffic matter. He understood that Ms. Miller suggested the bed count was more reliable than the square footage count in determining traffic. That is totally contradicted by the material he presented which is from a technical engineering manual that clearly shows just the opposite is true. Jeff Bills, Scripps, pointed out that they are a tenant on the redevelopment site as well and they have no further comments on the EIR. Hal Rosenberg, Traffic Engineer, spoke with regard to the traffic rate. In his opinion, based on the standards set forth by the San Diego Regional Area of Government (SANDAG), the rates that were used in the traffic study are appropriate. The rates used were comparable to what is used not only within the region but within the state and nationally as well. City Attorney Booguard stated that staffs recommendation is the adoption of City Council Resolution 16405 which is the resolution only dealing with the certification about the adequacy of the EIR. It does not mean project approval. Mayor Nader requested members of the public who desired to comment on the EIR to come forward at this time. No one came forward. (1) Eir Certification COUNCIL RESOLUTION 16405 CERTIFYING THE FINAL ENVIRONMENTAL IMPACT REPORT FOR THE SCRIPPS MEMORIAL HOSPITAL EXPANSION PROJECT (EIR-90-07) SCH ~)0010569 RESOLUTION OFI~'ERED BY COUNCILMAN MOORE, the reading of the text was waived by unanimous consent. City Attorney Booguard requested a correction be made on page 202, subparagraph b, the appendices, noting there is a typographical error. It reads A through M and should only read A through H. He requested that the resolution be amended in that form before being adopted. Minutes November 7, 1991 Page 15 Mayor Nader noted for the record that the pagination in the packet was wrong. He will be voting yes on the motion on the oral representation of staff that the questions he asked concerning traffic and water are as represented by staff. MSUC (Nader/Moore) amend the resolution to correct page 202, subparagraph b; change "appendices A through M" to read "appendices A through H". Mayor Nader stated at this time a proponent of each of the three proposals are invited to make their summation comments. City Attorney Boogaard asked that the record to retlect that Scripps and the Circinus Corporation have waived any further summation. Charles Harmon, "H" Street Coalition, commented that this project started in 1988 without proper notification to all of the tenants. He believes it is fundamentally unfair fur the Council to take someone's land to give economic advantage from one business interest and give it to another. He believes their proposal gives both sides what they need and that is a chance to provide services to all of the citizens of Chula Vista. Mayor Nader asked Mr. Harmon if it is his understanding that under the Scripps proposal two members of the Coalition, the bank and the ReadiCare Center, would remain until the Summer of 1993 and Arby's would remain until Summer of 1994. Charles Harmon responded that would be the timing based on the construction and that is his understanding. Jeff Bills, Scripps, stated that based on the information presented, it is not feasible for Scripps to go forward with the "H" Street Coalition proposal. Responding to questions of Councilwoman Grasser Horton, Mr. Bills stated Scripps' position has been that they would allow the Coalition businesses to stay until the last minute. This would be approximately three months before construction is completed on the hospital. They are also willing to sit down at four, five or six month intervals and provide them with an updated schedule to make sure they know what is happening. City Attorney Boogaard asked Mr. Bills if Scripps was requested by the Agency Board to negotiate a proposal that would include the "H" Street Coalition businesses, would Scripps so negotiate? Mr. Bills responded that Scripps would no negotiate. City Attorney Boogsard presented a letter from Dr. Llewellyn Liebet and stated he would like the record to reflect Dr. Lieber's strong support for the "H" Street Coalition plan. Ellen Brock, 522 Otis Street, Chula Vista, spoke in favor of the Scripps Hospital proposal. Councilman Malcolm commented that he believes the "H" Street Coalition proposal is the easiest to eliminate. With Scripps' comments on the record that they will emphatically not proceed with the "H" Street Coalition proposal, he does not believe the Coalition project is viable. He stated that the City of Chula Vista will do its best to relocate those businesses. It is the City Council's obligation to make sure they are thriving businesses located elsewhere in a location that will allow them to do hopefully more business and bring in more revenue to the City of Chula Vista than what they are doing presently. Councilman Malcolm next commented regarding the project presented by Mr. Weneke. He stated that he questions Mr. Wencke's standing befure the Council/Agency regarding the Circinus group. Councilman Malcolm asked Minutes November 7, 1991 Page 16 Michael Jacobs representing Circinus to respond to a question. Did the City of Chula Vista tell Cireinus not to spend any money in preparing plans7 Mr. Jacobs responded that the City did not advise Circinus not to spend money on the project. Councilman Malcolm continued stating that this process was stopped and the City incurred hundreds of thousands of dollars of additional cost to redo the agreement with Scripps Hospital, to move it from an exclusive agreement to a non-binding agreement to help Circinus and other parties to become part of the process. Councilman Malcolm stated he was very disappointed with the Circinus presentation. He would have hoped that cash flows, parking, high density, and financing information would have been included in their presentation. With regard to the Scripps project, Councilman Malcolm stated Chula Vista has regional responsibilities to those people in the communities that can't afford a hospital and have been ignored by the rest of the County in San Ysidro, South San Diego and National City. He commented that Scripps has brought quality health care to the South Bay. The Scripps project is the only one that provided financial statements that prove that they can do their project. He believes there is a very clear choice and that is to allow Scripps to proceed as they requested. Mayor Nader asked if the series of resolutions are adopted that would be in support of the Scripps project, is there something in there that gives the minimum times that the businesses in the "H" Street Coalition would be allowed to stay? City Attorney Boogaard stated Mr. Ken Johnson is the city's outside counsel who helped negotiate the OPA and it would be necessary to know if there is a contractual commitment in the OPA to allow them to remain until the first constl~ction is almost completed. Ken Johnson stated Scripps is obligated to permit the Coalition businesses to stay until they are reasonably required to be vacated for construction. Councilman Rindone asked Mr. Bills to come forward to discuss a major contract for services recently lost by Scripps. Jeff Bills stated that in a managed care environment companies negotiate exclusive arrangements with hospitals for car~ for their employees. The company Scripps was dealing with was the largest employer in Chula Vista and they considered Scripps and one other hospital system to provide their care and decided to go with that other system. One of the reasons they gave to Scripps was the fact that their employees perceived that Scripps did not have the kind of facility that they felt presented the image that they could rely on to receive the kind of health care they were looking for. Councilman Rindone commented that nothing is more critical than quality medical care and Scripps Hospital represents that opportunity. If Scripps is selected it must be balanced by a sense of fair play in assisting the relocation of the other businesses that are affected and the applicants that are involved. He believes a significant reason for selecting the Scripps proposal is weighing the balance of medical services that are needed throughout the City and particularly in the west side. The opportunity that Scripps provides for quality health care and the opportunity for providing services throughout the City is essential. This is an opportunity to revitalize the west side and Scripps represents quality of service. Councilman Rindone stated he favors the Scripps proposal. (2) Reieetinn of at Least Two of Three Hans AGENCY RESOLUTION 1213(B) FINDING ENVIRONMENTAL EVALUATION AT THIS STAGE IS UNNECESSARY UNDER PUBLIC RESOURCES CODE SECTION 21080(B)(5), FINDING THAT AGENCY PROPERLY AND DULY EXTENDED OWNER PARTICIPATION RIGHTS AND THAT NON- RESPONSIVE OWNERS AND TENANTS HAVE WAIVED SAME; REJECTING THE H STREET Minutes November 7, 1991 Page 17 COALITION PLAN AND THE CIRC1NUS PLAN AFTER CONSIDERATION THEREOF, AND FINDING THAT THEIR OWNER PARTICIPATION RIGHTS HAVE BEEN EXHAUSTED City Attorney Boogaard reminded the Agency that the Scripps proposal is not being selected by the adoption of this resolution. The Council/Agency would be rejecting at this stage the Circinus and Coalition plans. RESOLUTION 1213(B) WAS OFFERED BY COUNCILMAN MALCOLM, the reading of the text was waived by unanimous consent, passed and was approved unanimously. City Attorney Boogaard stated the next step would be to go through the Conditional Use Permit (CUP) hearing and the Special Permit hearing. Mayor Nader will declared the public hearing on the CUP open. Fred Kassman, Re. development Coordinator, stated a Conditional Use Permit is proposed because a hospital is an unclassified use and can only be allowed in the existing C-O zone with the Conditional Use Permit. In addition to the findings and conditions that are contained in the resolution, staff is also recommending that the project be conditioned on a "No G Street Access" which is one of the alternatives discussed in the EIR. The reasons for this are that although the impacts from noise and traffic on the residents of "G" Street are considered to be insignificant, staff believes that the noise and traffic from emergency vehicles should be eliminated because these residents are more sensitive receptors than those around the other two emergency and staff entrances to the project. No additional significant impacts would occur from applying this condition. Mr. Kassman reported that Scripps agreed to this condition and a revised resolution was distributed which included the condition of "No G Street Access". Mayor Nader asked if there are any members of the public wishing to address the Council/Agency on this item. He stated that if there is no objection all comments that have been made earlier this evening and other written evidence will be incorporated into the record on the CUP. No one came forward to comment. Mayor Nader asked Mr. Bills if Scripps would have any problem with a specific condition in the CUP that would incorporate the minimum time tables of July 1993 before the bank and ReadiCare would have to move and July 1994 for Arby's? Jeff Bills responded that as long as Scripps can verify that those dates are accurate in the agreement, they would not have a problem. Scripps' intention all along has been to allow them to stay as long as possible. City Attorney Boogaard pointed out the proposed agreement provides that the Coalition businesses can stay until their property is reasonably required in order to meet Scripps' construction schedule. The problem is that if the Council/Agency say the Coalition can stay there until July 1993 and Scripps is able to advance their construction schedule in a year, this condition then would block Scripps from being able to begin early construction. Therefore, staff has negotiated an adequate provision that provides flexibility in order to meet the variable construction schedule. Mayor Nader stated this is not quite consistent with what he thought he was told before. He noted that he has a concern with that. Jim Eishen, 7855 Ivanhoe Avenue in La Jolla, #420, stated he is an attorney and is speaking on behalf of RTM (Arby's). He pointed out that as part of the Council/Agency approving this Conditional Use Permit the Council/Agency needs to make a finding that the hospital site is consistent with the Redevelopmerit Plan. Documents have been put in the record that object to that. Commenting on Mr. Nader's comments that the intent of the Re. development Plan would be better served if the business tenants, if not allowed to remain until Phase Two Minutes November 7, 1991 Page 18 construction, would have some certainty that would be provided by a date. Mr. Eishen believes that was represented before tonight. Mr. Eishen further commented that the Coalition proposal has advantages in that by accommodating those tenants, it may in large part forestall legal argument that will be asserted in this proceeding. Mayor Nader declared the public hearing closed. City Attorney Boogaard stated amended resolutions 16406 and 1214 have been provided for the Council/Agency and requested that these amended resolutions are the ones that are referred to by adoption. (3) Issuance of City CUP and Redevelopment Agency Soecial Permit COUNCIL RESOLUTION 16406 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA IMPOSING CONDITIONS FOR THE GRANTING OF A CUP, ISSUING AN UNCLASSiFIED/CONDITIONAL USE PERMIT PURSUANT TO SECTION 19.54.020 TO THE MUNICIPAL CODE, MAKING CEQA FINDINGS, APPROVING A STATEMENT OF OVERRIDING CONSIDERATIONS, ADOPTING A MITIGATION MONITORING PROGRAM, FINDING CONSISTENCY WITH THE GENERAL PLAN AND THE REDEVELOPMENT PLAN, AND MAK1NG CUP FINDINGS AGENCY RESOLUTION 1214 A RESOLUT1ON OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, CALIFORNIA IMPOSING CONDITIONS FOR THE GRANTING OF A SPECIAL PERMIT, MAKING CEQA FINDINGS, APPROVING A STATEMENT OF OVERRIDING CONSIDERATIONS, ADOPTING A MITIGATION MONITORING PROGRAM, FINDING CONSISTENCY WITH THE GENERAL PLAN AND THE REDEVELOPMENT PLAN, MAK1NG SPECIAL PERMIT FINDINGS, AND APPROVING AND GRANTING A SPECIAL PERMIT AMENDED RESOLUTIONS 16406 AND 1214 WERE OFFERED BY COUNCILMAN MALCOLM, the reading of the text was waived by unanimous consent. Mayor Nader noted he understood representations were made as to some minimal times that existing businesses would be allowed to stay on the site. He moved to amend each resolution to specify that the bank and the ReadiCare Center will be allowed to stay until at least July 1993 and Arby's until July 1994. The motion died for lack of a second. City Attorney Boogaard advised the Council/Agency that the amended resolutions add the Design Review Committee conditions, and the "No G Street Access" alternative. Mayor Nader commented he believes that the health care needs of the community have to be paramount. He agrees with Councilman Malcolm's comments regarding why the "H" Street Coalition proposal is not acceptable and he will vote for the resolutions on the floor. VOTE ON MOTION: The resolutions passed and were approved unanimously. City Attorney Boogaard stated that the next procedure is the eminent domain step and in order to implement the Scripps expansion plan, it will be necessary to assemble the required land. Prior to exercising the power of eminent domain the Agency was required to determine the value of land and try to acquire the property by voluntary acquisition. If it fails in this it should have made a good faith offer for the acquisition of the property at the determined value. The Council/Agency previously authorized the Executive Director to make that determination of value by a September 6, 1991 resolution. The Executive Director in conjunction with the appraiser and the Community Development Director made a determination of value based on an appraisal. Mr. Boogaard requested that the summary of the appraisal be entered into the administrative record of these proceedings. A good faith offer Minute~ November 7, 1991 Page 19 to all parties was extended by virtue of a letter which he requested be made part of the administrative record. Despite the attempts at voluntary acquisition of the property interests that are needed, staff was unable to acquire all of the interest needed and as a result have noticed this proceeding. Mr. Boogaard reminded the Council/Agency that in the commencement of this heating it is a non-public hearing, although he recommended that all members of the public be allowed to speak. It legally can be limited only to the people who have affected property interest. The issues that the Council/Agency must face in this hearing are that the public interest, convenience, and necessity of the City and its Redevelopment Agency require the proposed project. The proposed project is planned and located in a manner that is most compatible with the greatest public good and the least private injury and that the property which is the subject matter of this proceeding is necessary for the proposed Scripps project. Mr. Boogaard further requested that the notice of the special meeting be made a part of the administrative record. Mayor Nader declared the public hearing open on resolution 1215. City Attorney Boogaard requested that the letter from Scripps' lawyer on the necessity issues, dated October 29, 1991 and addressed to Mr. Johnson, outside legal counsel for the Agency, be made part of the record. Donald Worley, Circinus, asked that all of their previous objections be incorporated into this particular matter. Mayor Nader stated he will incorporate all comments made in today's proceedings as to all hearings being held this evening, as well as all written materials that have been incorporated into the record. James Eishen, "H" Street Coalition, confirmed his desire that the record reflect the written objections that have been incorporated as well as the comments of Mr. Harmon. City Attorney Boogaard stated an objection on an unsigned piece of paper from McCredie and Pelltier has been received. He recommended that it be made a part of the record. Mayor Nader declared the public hearing closed. Councilman Moore commented that this is an area that disturbs him more than anything else that he does in his official capacity as a City Councilman, condemnation and eminent domain. He pointed out that for the overall community good it occasionally calls for combining major properties with minor properties in order to do that community good, and that is what he sees in this particular case. City Attorney Boogaard reported that the amended resolution incorporates the CEQA findings on the feasibility of the "No G Street" alternative and recognizes that the CEQA findings find the "No G Street" alternative feasible and will be implemented. (4) Resolution of Necessity AGENCY RESOLUTION 1215 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA FINDING AND DETERMINING PUBLIC INTEREST AND NECESSITY FOR ACQUIRING AND AUTHORIZING THE CONDEMNATION OF CERTAIN REAL PROPERTY WITHIN THE SCRIPPS HOSPITAL EXPANSION PROJECT AT NORTHEAST CORNER OF B STREET AND 5TH AVENUE, CHULA VISTA, CALIFORNIA, MAK1NG CEQA FINDINGS, APPROVING A STATEMENT OF OVERRIDING CONSIDERATIONS, AND ADOPTING A MITIGATION MONITORING PROGRAM AMENDED RESOLUTION 1215 WAS OFFERED BY MAYOR NADER, reading of the text was waived by unanimous cnnsent, passed and was approved unanimously. Minutes November 7, 1991 Page 20 City Attorney Boogaard stated the next step would be to conduct a public hearing under Health and Safety Code Section 33433. This hearing will be conducted solely as a City Council. It requires that the City Council, in which a Redevelopment Agency is active, approve any transaction for the sale of property in whole or in part financed with tax increment money. He noted it is not conceded in any way that the proposed OPA is financed with tax increment money, however, in the unlikely event staff time is considered to be using tax increment money, it is requested that this hearing be held. This hearing was noticed in the manner required by law and proof of publication was submitted as part of the administrative record showing that it was published at least two successive weeks prior to the hearing. The 33433 public report as required by the Code to be on file in the office of the City Clerk was filed on or before October 2. He requested that the report be made part of the record. Mayor Nader declared the public hearing open. There being no one wishing to address the Council on this item, he declared the public hearing closed. (5) City Approval COUNCIL RESOLUTION 16407 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA APPROVING, AFFER PUBLIC HEARING, THE SALE OF CERTAIN DESIGNATED PROPERTY OF THE COMMUNITY REDEVELOPMENT AGENCY FOR REDEVELOPMENT TO SCRIPPS MEMORIAL HOSPITALS PURSUANT TO, AND IN FURTHERANCE OF, THE REDEVELOPMENT PLAN, MAK1NG CEQA FINDINGS, APPROVING A STATEMENT OF OVERRIDING CONSIDERATIONS, AND ADOPTING A MITIGATION MONITORING PROGRAM RESOLUTION 16407 WAS OFFERED BY COUNCILMAN MALCOLM, the reading of the text was waived by unanimous consent, passed and was approved unanimou.sly. City Attorney Boogaard next asked the Agency as the potential owner of property to approve a proposed Owner Participation Agreement. He pointed out this public hearing is conducted under Health and Safety Code Section 33431 which implies that property cannot be sold without competitive bid unless a public hearing is held and the public allowed to come forward and voice objections to its sale without competitive bid. He requested the record reflect the notice of public hearing in the manner required by law and asked that it be made part of the administrative record. Mr. Boogaard further reported that he had a signed proposed Owner Participation Agreement with Addendum signed by Scripps and not by the Agency. He also had a Letter of Credit fbr $500,000 to secure Scripps' obligation for ninety days. According to the contract terms a letter of credit for $10,800,000 will be received which will be used to make the necessary offers or put the necessary money for eminent domain into court. He pointed out there are elements of risk in the OPA which were outlined in a confidential attorney/client communication to the Agency. He stated that if the Agency desired, he was prepared to go into Closed Session under the eminently threatened legal proceedings exception to the Brown Act. At this point in the meeting, the Redevelopment Agency adjourned to Closed Session under the threat of eminent legal proceedings exception to the Brown Act. Mayor Nader reconvened the meeting. He declared the public hearing open. There being no one present wishing to address the Agency on this matter, Mayor Nader declared the public hearing closed. City Attorney Boogaard confirmed that the resolution was amended to include the "No G Street Access" finding. (6) A~encv "Sale Without Competitive Bid" Minutes November 7, 1991 Pagg 21 AGENCY RESOLUTION 1216 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CIiI~A VISTA FINDING AND DETERMINING, PURSUANT TO HEALTH AND SAFETY CODE SECTION 33431, THAT IT IS IN THE BEST INTEREST OF THE PUBLIC, AND THE AGENCY, THAT CERTAIN PROPERTY BE SOLD TO REDEVELOPER SCRIPPS MEMORIAL HOSPITALS, AND BE SOLD WITHOUT PUBLIC BID, MAKING CEQA FINDINGS, APPROVING A STATEMENT OF OVERRIDING CONSIDERATIONS, AND ADOPTING A MITIGATION MONITORING PROGRAM, AND APPROVING THE OWNER PARTICIPATION AGREEMENT WITH SCRIPPS, AND AUTHORIZING THE CHAIRMAN TO EXECUTE SAME AMENDED RESOLUTION 1216 WAS OFFERED BY COUNCILMAN MOORE, the reading of the text was waived by unanimous consent. Mayor Nader stated he would cast a no vote noting it is not because of opposition to the project, but rather it is because of something that the Agency was told in Closed Session which is protected by the Brown Act and attorney/client privilege. VOTE ON MOTION: The resolution passed and was approved. (The vote was 4-1 with Mayor Nader voting ITEMS PULLED FROM THE CONSENT CALENDAR Item pulled: 5. The minutes will reflect the published agenda order. 7. CITY MANAGER/EXECUTIVE DIRECTOR'S REPORT: None. 8. MAYOR/CHA1RMAN'S REPORT: None. 9. COUNCIL/AGENCY MEMBER'S COMMENTS: Councilman Rindone noted a correction on the agenda regarding the next meeting. It should read 6:00 p.m. instead of 4:00 p.m. ADJOURNMENT ADJOURNMENT at 9:00 p.m. to the regularly scheduled Council m~ting, Tuesday, November 12, 1991 in the Council Chambers at 6:00 p.m. with a Redevelopment Agency meeting immediately following. Respectfully submitted, Sandra S. Chase Recording Secretary