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HomeMy WebLinkAboutcc min 1994/09/20 RDA MINUTES OF A JOINT MEETING OF THE REDEVELOPMENT AGENCY AND CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, September 20, 1994 Council Chambers 8:55 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Council Members Fox, Hotton, Moore, Rindone, and Chairman/Mayor Nader ALSO PRESENT: George Krempl, Deputy City Manager; Brace M. Booganrd, Agency/City Attorney; and Beverly A. Authelet, City Clerk 2. APPROVAL OF MINUTES: September 6, 1994 MSUC (Rindone/Horton) to approve the minutes of September 6, 1994 as presented. CONSENT CALENDAR (Item pulled: 4A & 4B) 3. WRITTEN COMMUNICATIONS: None submitted. 4.A. RESOLUTION 1419 APPROVING MATTERS RELATED TO THE SALE OF TAX ALLOCATION BONDS AUTHORIZED TO BE ISSUED UNDER RESOLUTION 1383 WITH RESPECT TO THE MERGED BAYFRONT/TOWN CENTRE REDEVELOPMENT PROJECT AREA -- Pursuant to previously adopted Resolutions 1383 and 1400, approval was requested for matters related to the sale of tax allocation bonds for the purpose of refinancing existing debt in the Bayfront/Town Center Project Area. Under current market conditions it is anticipated that a successful refunding could achieve savings of more than $1,000,000 over the life of the issue. Staff recommends approval of the resolutions. (Agency Treasurer/Director of Finance) Pulled from the Consent Calendar. B. RESOLUTION 17659 APPROVING ISSUANCE OF REFUNDING TAX ALLOCATION BONDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA RELATING TO THE MERGED BAYFRONT/TOWN CENTRE REDEVELOPMENT PROJECT AREA Pulled from the Consent Calendar. ® Joseph Garcia, 484 Fifth Avenue, Chula Vista, CA, questioned if the Agency was seeking to issue bonding in addition to the $30 million that had been authorized. Robert Powell, Agency Treasurer/Director of Finance, responded that it was not, they were the same bonds that were contemplated in December and were validated in May. Agency/Council Member Rindone stated it was estimated that there would be substantial savings by making one payment in the first year and he questioned what the annual savings would amount to in successive years. Mr. Powell responded that it was $450,000 - $650,000 per year, however that figure would vary because the existing bond debt service was not level debt service. Minutes September 20, 1994 Page 2 Agency/Council Member Rindone questioned what the original refunding was based on. Mr. Powell responded that the original refunding was contemplated to be extended to 2024 which was the maximum year under the current redevelopment plan. The reasons for that was to protect the tax increment so there was debt outstanding so the Agency could continue to collect tax increment. The second reason was to try to protect the tax increment from further State takeover. Staff ran into difficulties in structuring the deal because of the special subvention monies that the Agency received from the State that were based on the shortfall between required debt service and tax increment each year. The current structure contemplated a 2019 maturity date. Staff was still working with the State controllers office and might be able to achieve the 2024 maturity date. Agency/Council Member Rindone stated the Agency/Council had directed staff to look at derivatives and there was no mention of that in the report. Mr. Powell stated that was explored and it was determined that the derivatives were not a candidate for financing due to the underlying rating of the existing bonds. However, he was working with Grigsby Brandford & Co. and a financial advisor looking at derivatives for the City as a whole. Agency/Council Member Rindone questioned if it was advisable to have a mix of variable and fixed rates. Mr. Powell stated in the current interest rate environment, which was historically low, one school of thought was to get the best interest rate as possible and extend it out as long as possible. There was also a school of thought that said a percentage of debt should be kept at a variable rate. He did not subscribe to that at the current time. Mark Northcross, Kelling Northcross & Nobriga, Inc., Financial Advisor, stated with respect to redevelopment agencies and variable rate debt there was one thing that was important to remember, i.e. while the interest rate may change the revenues may not change to keep pace with them. The Agency had a really tight budget and there was not a lot of surplus revenue, particularly in the Bayfront Town Centre. He agreed that a mixed and fixed variable rate debt was in principle a very good thing, but prudence dictated insuring predictable manageable debt service for the long haul. Agency/Council Member Rindone requested that when the deal was completed that an informational memo be submitted to the Agency/Council which would include what the rating was. RESOLUTIONS 1419 AND 17659 OFFERED BY CHAIRMAN/MAYOR NADER, reading of the text was waived, passed and approved unanimously. URGENCY ITEM OFF AGENDA: RESOLUTION 1424 AWARDING DEMOLITION CONTRACT FOR 980 "F" STREET TO MARQUEZ BROTHERS STRUCTURAL MOVERS, WAIVING FORMAL BIDDING AND SALES PROCESS IN CONNECTION THEREWITH, AND AUTHORIZING THE CHAIRMAN TO EXECUTE A DEMOLITION CONTRACT IN A FORM APPROVED BY THE CITY ATTORNEY AND APPROPRIATING FUNDS THEREFOR 4/5th's vote required. Agency Attorney Boogaard stated asbestos work on the Shangri-La building had been completed on Friday which opened the building up and subjected it to a higher risk of vandalism and vagrancy. Staff felt they needed to move quickly on the demolition for the property. Staff had issued requests for demolition which was the subject matter of what staff wanted to address with the passage of Resolution 1424. Based on that information staff requested that the Agency make the necessary findings to put the resolution on the agenda for consideration. Minutes September 20, 1994 Page 3 MSUC (Nader/Moore) to find that it was a matter of urgency that arose after the posting of the agenda. Agency Attorney Boogaard stated bids were received, the lowest being the Marquez Brothers for $18,000 which was $27,000 lower than the next highest bid. The bid represented a combination of services and sale of demolished materials. The City had a bidding procedure in the Purchasing Manual which required that if the City sold property of the City it had to be done pursuant to a formal process. Staff felt there was justification for the waiver of that policy and the sale of the materials implicit in the bid to Marquez Brothers as surplus materials. For the $18,000 additional the Marquez Brothers would remove the Shangri-La restaurant building. Staff requested the Agency adopt Resolution 1424. RESOLUTION 1424 O/o'~'ERED BY CHAIRMAN NADER, reading of the text was waived, passed and approved unanimously. * * END OF CONSENT CALENDAR * * PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES 5.A. PUBLIC HEARING APPLICATION FOR SPECIAL LAND USE PERMIT FOR THE CONTINUATION OF AUTO DISMANTLING BUSINESS AT 777 ENERGY WAY and B. PUBLIC HEARING APPLICATION FOR SPECIAL LAND USE PERMIT FOR THE ESTABLISHMENT OF AN AUTO RECYCLING BUSlNESS AT 775 ENERGY WAY C. RESOLUTION 1420 MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL PERMIT (SUP 93-08) TO D&P AUTO DISMANTLING, FARE'S AUTO RECYCLING, R.C. IMPORT AUTO RECYCLING, AND TRUEWAY AUTO DISMANTLING FOR CERTAIN DESIGNATED AUTO WRECKING USES AT 777 ENERGY WAY, CHULA VISTA, CALIFORNIA; PARCEL BEING LOCATED WITHIN THE OTAY VALLEY ROAD PROJECT AREA--These type businesses were conditionally approved under PCC-73-27 in 1973. City staff has bean working over the past two years to process Special Land Use Permits if the businesses are brought into conformity to Agency site criteria, principally parking and landscaping. The Agency is requested to hold public hearings for two current applications to continue auto recycling businesses: in the ease of 777 Energy Way, the request is to continue businesses currently located on the property; the second request, 775 Energy Way, is for a new auto wrecking business replacing a previous one. Staff recommends approval of the resolutions. (Community Development Department) D. RESOLUTION 1421 MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL PERMIT (SUP 94-02) TO AMERICAN AND FOREIGN AUTO WRECKING FOR CERTAIN DESIGNATED AUTO WRECKING USES AT 775 ENERGY WAY, CHULA VISTA, CALIFORNIA; PARCEL BEING LOCATED WITHIN THE OTAY VALLEY ROAD PROJECT AREA This being the time and place as advertised, the public hearing was declared open. There being no public testimony, the public hearing was closed. RESOLUTION 1420 AND 1421 OI~}'ERED BY MEMBER MOORE, reading of the text was waived, passed and approved unanimously. · l' Minutes September 20, 1994 Page 4 ORAL COMMUNICATIONS None ACTION ITEMS 6.A. RESOLUTION 1422 APPROVING MODIFICATION OF LOAN BY AGENCY TO PARK VILLAGE APARTMENTS LIMITED PARTNERSHIP IN CONNECTION WITH 28 UNIT AFFORDABLE HOUSING PROJECT LOCATED AT 1246-1256 THIRD AVENUE AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE LOAN MODIFICATION AGREEMENT, SUBORDINATION AGREEMENTS, AND ASSOCIATED DOCUMENTS--In 1992 the Agency approved a $350,000 loan to Civic Center Barrio Housing Corporation to develop a 28-unit affordable housing project (Park Village Apartments). A modification to the Loan Agreement is recommended which will facilitate permanent financing of the project. Staff recommends approval of the resolutions. (Community Development Director) B. RESOLUTION 17665 APPROVING AMENDED AND RESTATED GROUND LEASE AND LEASE RIDER AND ESTOPPEL AGREEMENT lN CONNECTION WITH AGENCY LOAN MODIFICATION WITH PARK VILLAGE APARTMENTS AND AUTHORIZING CITY MANAGER TO EXECUTE SAME Agency/Council Member Horton stated the principal loan amount was $350,000 and as of 9/1/94 the balance was $412,000. She questioned whether that was because there was a credit interest. Juan Arroyo, Housing Coordinator, responded that was correct. Agency/Council Member Horton noted the Agency lien was in third position, but that staff had negotiated its right to receive payment on its debt in second position ahead of the State. She questioned how that had been done. Agency/City Attorney Boogaard responded that it was a complicated drafting technique which allowed bifureation of the main priority from the right to recover the revenue from the proceeds of the project. The Agency was in the second position except and unless there was a default in which the Agency would be in third position in a foreclosure proceeding. The proposed action would reduce the principal by $100,000. RESOLUTION 1422 AND 17665 OFI~ERED BY AGENCY/COUNCIL MEMBER HORTON, reading of the text was waived, passed and approved unanimously. 7. RESOLUTION 1423 ADOPTING NEGATIVE DECLARATION IS-93-07 FOR TROLLEY TERRACE DEVELOPMENT, APPROVING THE APPROPRIATION OF $643,000 FROM THE LOW AND MODERATE INCOME HOUSING FUND TO PURCHASE REAL PROPERTY LOCATED AT 746 AND 750 ADA STREET FOR DEVELOPMENT OF AFFORDABLE HOUSING AND DAY CARE FACILITY, AND AUTHORIZING EXECUTIVE DIRECTOR TO EXECUTE PURCHASE AND SALE DOCUMENTS IN A FORM APPROVED BY THE AGENCY GENERAL COUNSEL -- At the City Council meeting of 7-19- 94, Council approved the opening of escrow for the purchase of real property located at 746 and 750 Ada for development of affordable housing and a day care facility and appropriated HOME program funds therefor. Due to new interpretation of the HOME Program regulations the use of these funds cannot be used until the project is in a more advanced stage. Therefore, low and moderate income housing funds are needed temporarily in order to close escrow. Staff recommends approval of the resolution. (Community Development Director) Minutes September 20, 1994 Page 5 Dave Gustafson, Deputy Director of Community Development, informed Council of the potential benefits of the project. There was a question of eligibility of use of HOME funds for the daycare portion of the project. Staff had presented a worse case scenario and wanted the Agency to go into it with the assumption that the HOME funds would not be allowed for the daycare portion and that those ftmds would have to be replaced at some point in the future with Community Development Block Grant funds. It was the staffs strategy to maximize the use of HOME funds for the daycare center as there was some proportional use and there were creative strategies to work with HUD in order to do that. Member Rindone questioned if the two houses would be raised. Mr. Gustafson responded that the two houses would be removed by the seller. One tenant was simply leaving and the other tenant was being relocated by the seller. The cost for those activities were part of the $243,000 which had been previously approved. Member Rindone complimented staff on their tenacity on the project. He would be looking for resolution in the future on safe access from the project to the trolley station. The access issue needed to be addressed ea~y, particularly for pedestrians. RESOLUTION 1423 OFFERED BY MEMBER RINDONE, reading of the text was waived, passed and approved unanimously. ITEMS PULLED FROM THE CONSENT CALENDAR Item pulled: 4A & 4B. The minutes will reflect the published agenda order. OTHER BUSINESS 8. DIRECTOR'S/CITY MANAGER'S REPORT(S) - No report given. 9. CHAIRMAN'S/MAYOR'S REPORTfS) - No report given. 10. AGENCY/COUNCIL MEMBER COMMENTS - No report given. ADJOURNMENT ADJOURNMENT AT 9:28 P.M. to the Regular Redevelopment Agency Meeting on October 4, 1994 at 4:00 p.m., immediately following the City Council meeting, in the City Council Chambers. Respectfully submitted, BEVERLY A. AUTHELET, CMC, City Clerk Vicki C. Soderquist, Deput~ Clerk