HomeMy WebLinkAboutcc min 1994/11/15 RDATuesday, November 15, 1994 Council Chambers
11:17 p.m. Public Services Building
(immediately following the City Council meeting)
Joint Meetin~ of the Redevelonmeat A~encv/Citv Council
of the City of Chula Vista
CALL TO ORDER
1. ROLL CALL:
PRESENT: Agency/Council Members Fox, Horton, Moore, Rindone, and
Chairman/Mayor Nader
ABSENT: None.
ALSO PRESENT: John D. Goss, Executive Director; Bruce M. Boogaard, Agency
Counsel; Chris Salomone, Community Development Director; Bob
Powell, Director of Finance; and Berlin D. Bosworth, Secretary to the
Redevelopmeat Agency
2. APPROVAL OF MINUTES: November 1, 1994
MSUC [Naderaljndone] to approve minutes of November 1, 1994, passed 5-0.
CONSENT CALENDAR
(Items 3 through 4)
3. WRITTEN COMMUNICATIONS: None.
4.A. COUNCIL
RESOLUTION 17712 APPROVING THE SECOND RENEWAL OF AGREEMENT AS FIRST
AMENDED WITH ADVOCATION, INC., FOR THE 1995-1996 LEGISLATIVE SESSION, AND
AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY OF
CHULA VISTA--On 12/31/94 the current agreement with Advocation, Inc., expires. lhe Agreement provides for
two 2-year extensions to coincide with the State legislative sessions, and Advocation has formally requested the
existing Agreement be extended. Advocation is hipJy instrumental in the success of the City's lobbying efforts
on various issues at the State level, including redevelopment and State budget legislation. Staff recommends
approval of the resolutions. (Legislative Subcommittee/Administration)
B. AGENCY
RESOLUTION 1433 APPROVING THE SECOND RENEWAL OF AGREEMENT AS FIRST
AMENDED WITH ADVOCATION, INC., FOR THE 1995-1996 LEGISLATIVE SESSION, AND
AUTHORIZING THE CHAIRMAN TO EXECUTE SAID AGREEMENT ON BEHALF OF THE
REDEVELOPMENT AGENCY
Joe Garcia, 484 Fifth Avenue, Chula Vista, stated on page 4-2 and 4-3 of the staff report, items 1, 3, 5, 6a.b. ,c.,
and 9 are available and accessible at the Assembly offices. It was time to economize. The elected representatives
in Sacramento could handle the City' s representation that was necessary. The Redevelopmeat Agency cannot afford
· IT
Minutes
November 15, 1994
Page 2
the $150,000. It was an extravagance; and while it was something that was nice to have and they were doing a7
pretty fair job, the Agency does not have the money. There was a conceptually strong standard against using bond
money for operating expenses. Future taxpayers should not pay for something for which they are not receiving any
benefits at the presem time. Please continue the matter.
Member/Councilmember Moore said the City was quite successful using Advocation to protect the interests of the
City.
Chairman/Mayor Nader noted that what the City's paid representatives in Sacramento did for the City was far and
beyond what the elected officials do on the City's behalf. The City does not have a representative in the
Legislature. The City was split between two districts. This agreemere was a good deal for the people of Chula
Vista.
COUNCIL RESOLUTION 17712 and AGENCY RESOLUTION 1433 OFFERED BY
MEMBEPJCOUNCILMEMBER HORTON, reading of the text was waived and passed 4-0-1, with Rindone
opposed.
* * END OF CONSENT CALENDAR * *
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
5. JOINT
COUNCIL/AGENCY
PUBLIC HEARING REGARDING A 31.63 ACRE SITE OF VACANT LAND LOCATED
SOUTH OF STATE ROUTE 54 BETWEEN BROADWAY AVENUE (NATIONAL CITY BOULEVARD
AND FIFTH WITHIN THE BOUNDARIES OF THE TOWN CENTRE II REDEVELOPMENT
PROJECT AREA. THE PUBLIC HEARING WILL CONSIDER THE FOLLOWING: [Continued from the
meetin~ of 11/1/94]
1. Review and certification of Final Environmental Impact Report (EIR 94-02), Addendure to the FEIR,
(EIR 944-02A), Findings of Feasible Mitigation Measures, Mitigation and Monitoring Program, and Statement of
Overriding Considerations for a proposed 220,000 sq. ~. commercial retail shopping center to be anchored by a
"Wal-Mart" store; and
2. General Plan Amendment (GPA 94-04) for the project site to change the General Plan designation from
"Research and Limited Manufacturing" to "Commercial Thoroughfare"; and
3. Local Coastal Program Amendment (LCPA #12) for the project site (the "Inland Parcel") to change the
land use designation for both the Bayfront Land Use Plan and the Bayfront Specific Plan from "Industrial General"
to "Commercial Thoroughfare" subject to the "Central Commercial" zoning designation criteria of the Chula Vista
Municipal Code; and
4. Zoning Map Amendment (PCZ-94-C) for the project site to change the zoning designation from "Limited
Industrial- Precise Plan Modifier" to "Central Commercial - Precise Plan Modifier"; and
5. Coastal Developmere Permit (#068) for construction of the Channelside Shopping Center consisting of
approximately 220,000 sq. fi. of commerciai-retail floor area anchored by a "Wal-Mart" store at the project site.
It is recommended that the Ci~_ Council and Redevelopm~tt Aeencv open the public hearinc. take testimony. close
the public hearinc. and approve the resolutlon~ and Dloce the ordinances on first readine in the foliowine seauentip~
order.__'
Minutes
November 15, 1994
Page 3
[A] Agency Resolution # 1430 and Council Resolution # 17705 which: (1) certifies the Final Environmental
Impact Report #94-02 and adopts Addendurn EIR 94-02A, (2) makes Findings of Fact on the feasibility of
mitigation measures and project alternatives, (3) Adopts the Mitigation Monitoring and Reporting Program,
and adopts a Statement of Overriding Considerations
IB] Council Resolution # 17706 which Amends the General Plan land-use designation for the project site
from "Research and Limited Manufacturing" to Commercial-Thoroughfare
[C] Ordinance # 2613 which amends the Certified Chula Vista Local Coastal Program and Bayfront Specific
Plan in accordance with Amendment #12 reclassifying 31.63 acres of the "Inland Parcel", Subarea 4 from
"Industrial-General" to "Commercial-Thoroughfare subject to the "Central-Commercial-Precise Plan
modifying District pursuant to Chapters 19.36 and 19.56 of the Chula Vista Municipal Code
ID] Ordinance # 2614 which amends the Zoning Map established by Section 19.18.010 of the Chula Vista
Municipal Code to rezone the 31.63 acre project site located at the terminus of North Fifth Avenue from
Industrial-Limited with Precise Plan Modifier" to "Central-Commercial-Precise Plan
[E] Council Resolution # 17707 which authorizes the issuance of Coastal Development Permit #068 for the
construction of the Channelside Shopping Center located at southeast quadrant of National City Boulevard
(Broadway) and State Route 54 subject to Conditions of Approval
IF] Agency Resolution # 1431 which approves the Channelside Shopping Center project and Precise Plan,
subject to Specific Project Conditions; and declares that Certain Conditions Precedent to effectiveness as set
forth in the Disposition and Development Agreement between the Redevelopment Agency, Chula Vista Town
Center Associates, and Wal-Mart Stores, Inc. have been satisfied
A. JOINT
AGENCY
RESOLUTION 1430
COUNCIL
RESOLUTION 17705 CERTIFYING THE FINAL ENVIRONMENTAL IMPACT REPORT (EIR
94-02) FOR THE CHANNELSIDE SHOPPING CENTER; ADOPTING ADDENDUM EIR 94-02A; MAKING
CERTAIN FINDINGS OF FACT RELATING TO THE FEASIBILITY OF MITIGATION MEASURES AND
PROJECT ALTERNATIVES; ADOPTING A MITIGATION MONITORING AND REPORTING
PROGRAM; AND ADOPTING A STATEMENT OF OVERRIDING CONSIDERATIONS
B. COUNCIL
RESOLUTION 17706 AMENDING THE GENERAL PLAN FOR 31.63 ACRES LOCATED AT
THE TERMINUS OF NORTH FIFTH AVENUE FROM "RESEARCH AND LIMITED MANUFACTURING"
TO "COMMERCIAL-THOROUGHFARE"
C. COUNCIL
ORDINANCE 2613 AMENDING THE CERTIFIED CHULA VISTA LOCAL COASTAL
PROGRAM AND BAYFRONT SPECIFIC PLAN IN ACCORDANCE WITH AMENDMENT #12
RECLASSIFYING 31.63 ACRES OF THE "INLAND PARCEL", SUBAREA 4 FROM "INDUSTRIAL-
GENERAL" TO A COMMERCIAL THOROUGHFARE LAND USE DISTRICT SUBJECT TO CENTRAL
COMMERCIAL WITH PRECISE PLAN MODIFYING DISTRICT PURSUANT TO SECTIONS 19.36 AND
19.56 OF THE CHULA VISTA MUNICIPAL CODE (First Reading)
D. COUNCIL
ORDINANCE 2614 AMENDING THE ZONING MAP ESTABLISHED BY SECTION 19.18.010
OF THE CHULA VISTA MUNICIPAL CODE TO REZONE 31.63 ACRES LOCATED AT THE TERMINUS
OF NORTH FIFTH AVENUE FROM I-L-P (LIMITED INDUSTRIAL-PRECISE PLAN) TO C-C-P
(CENTRAL COMMERCIAL-PRECISE PLAN) (First Readin2)
Minutes
November 15, 1994
Page 4
E. COUNCIL
RESOLUTION 17707 AUTHORIZING THE ISSUANCE OF COASTAL DEVELOPMENT
PERMIT #068 FOR THE CONSTRUCTION OF THE CHANNELSIDE (WAL-MART) SHOPPING CENTER
CONSISTING OF APPROXIMATELY 220,000 SQUARE FEET OF RETAIL COMMERCIAL FLOOR
AREA LOCATED AT THE SOUTHEAST QUADRANT OF NATIONAL CITY BOULEVARD
(BROADWAY) AND STATE ROUTE 54 SUBJECT TO CONDITIONS OF APPROVAL
After the City Council takes the above recommended actions. it is recommended that the Redevelooment A~encv then
aDorove:
F. AGENCY
RESOLUTION 1431 APPROVING THE PROJECT AND THE PRECISE PLAN THEREFOR
SUBJECT TO SPECIFIC PROJECT CONDITIONS; AND DECLARING THAT CERTAIN CONDITIONS
PRECEDENT TO EFFECTIVENESS AS SET FORTH IN THE DISPOSITION AND DEVELOPMENT
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY, CHULA VISTA TOWN CENTER
ASSOCIATES, AND WAL-MART STORES, INC., HAVE BEEN SATISFIED
Mr. Salomone presented a brief staff update. Mr. Salomonc pointed out Agency Attorney Boogaard had furnished
a memorandum which listed a structured format which was recommended to bc followed for the hearings and
consideration of the project. Revisions were made to the Conditions which dealt with acquisition of property for
traffic access and deposit of certain fees. Staff made the changes in response to negotiations with the developer to
clarify the issues. Staff and the developer were now in agreement.
Chairman/Mayor Nader noted the Agency Members had been given an 11 page document, within the last two
minutes which contained the revised Conditions of Approval. When was the document finished?
Mr. Salomone replied the document was literally completed one hour prior to the meeting. The project had a
number of Conditions which staff and the developer resolved. The developer wished a more specific definition of
the use of eminent domain to acquire access from Fourth Avenue, a more specific definition of the amotmt of
monies to be deposited for those improvements, as well as the desire to predetermine the cap on the amount of
money which would be expended for those improvements. Meetings were held daily since the previous Agency
meeting in order to negotiate these items. Staff and the developer were now in agreement. The City Attorney has
reviewed the Conditions.
Member/Councilmember Fox asked if the item could be continued one week so the Members could review the
revised Conditions.
Mr. Salomone stated he would like to defer that question to the developer. The Conditions were basically the same
as those presented previously to the Agency. What staff and the developer have done was to clarify acquisition--
which was already a Condition of the project which was presented to the Agency at its meeting two weeks prior.
The developer wanted a more finite clarification of expenditures, a finite time schedule for use of eminent domain,
and, with the City Attorney, staff clarified those items for the developer.
Chairman/Mayor Nader inquired if there was an Agency meeting scheduled for next week.
Mr. Salomone said he believed so.
Chainnan/Mayor Nader asked if it would kill the project if the item was continued one week.
Mr. Salomone replied the document was a clearer definition of the Conditions in the original proposal brought tT
the Agency at its prior meeting two weeks ago.
Minutes
November 15, 1994
Page 5
Member/Councilmember Moore pointed out one of the things staff had done was to take the onus was taken off the
developer as far as getting the right-of-way.
Mr. Salomone responded the developer had to make every effort to acquire the right-of-way. What the negotiations
did was to put a time period and some constraints on that aspect. At that point, the developer would have to deposit
150 percent of the mount for the acquisition and improvements, and then staff would proceed with eminent domain.
That was a fai~y standard process. What the negotiations did was to define that and not leave it vague in the
Conditions.
Mr. Phil Adams, representing Gatlin Development, 12665 High Bluff Drive, San Diego, sated the project was on
a very tight time constraint for various reasons--the developer was going through die Environmental Impact Report
review process which needed to be certified in order to get through the mitigation for the work along the Sweetwater
Creek. The process was rather lengthy because of the number of agencies involved. Delaying the process tonight
could be detrimental to the Environmental Impact Report process with respect to the time constraints of such
agencies as the U.S. Coast Guard and U.S. Fish & Wildlife. With the holidays coming up, a delay of one week
could conceivable push back the project until Spring of 1995.
Chairman/Mayor Nader asked if the delay of one week would throw off the schedule until Spring of 1995.
Mr. Adams replied it could very well do that because of the schedules of the different agencies. The agencies have
a 30-day turnaround to respond after the developer filed die application. The application would not be accepted until
there was a Certified Environmental Impact Report.
Chairman/Mayor Nader asked staff what substantive areas of the project were changed by the revisions which were
iust presented to Agency Members.
Agency Counsel Boogaard responded, sating that the risk of not being able to acquire the parcel of property in the
northeast comer of Target has shifted more to the City/Agency than was previously set forth in the agreements.
The City/Agency has taken a sligh~y greater, but staff still felt a very manageable risk associated with not being
able to acquire and realign that intersection.
Chairman/Mayor Nader asked if that was pretty much it.
Mr. Salomone stated the developer was not happy with that. The developer felt they had made a concession to staff.
It was a very effective negotiation.
Chairman/Mayor Nader said he heard Agency Counsel say the City/Agency was taking more risk with the revision
and Mr. Saiomone said the developer made a concession to the City/Agency.
Mr. Salomone noted the original Conditions placed total responsibility on the developer--that was why the item was
continued from a prior Agency meeting. What Agency Counsel has said was correct. Staff clarified the process,
staff told the developer when the City/Agency would invoke eminent domain. In doing that, staff might have taken
a minor responsibility for that taking which was not in the original approval. Staff believed that was an acceptable
risk.
Agency Counsel Boogaard sated he believed he and Mr. Saiomone were saying the same thing.
Mr. Adams said it had been a complicated procedure and project. The developer has been working daily with staff
and the Attorney's Office to rectify and clarify this particular off-site Condition which involved other properties.
Both parties looked at the Condition from a legal and financial aspect and die developer now believed a compromise
~vas reached which benefitted the City/Agency and die developer.
Minutes
November 15, 1994
Page 6
Mr. Salomone stated staff wanted to make a brief project description presentation at which point Agency Counse?
had a very organized process to be followed.
Chainnan/Mayor Nader suggested the project description be confined to a description of whatever had changed since
the last time the item appeared before the Agency.
General Counsel Boogaard strongly encouraged the presentation be made for the record since there had been some
hint of litigation earlier in the proceedings. The proper record needed to be created for these hearings.
Lyle Haynes, Principal Community Development Specialist, made a brief project description presentation. Using
slides which showed the project, Mr. Haynes pointed to the Dixieline property which was the subject site for the
adjoining National City Marketplace; the intersection at Brisbane--which was the subject of the recent ongoing
negotiations--needed to be acquired in order to make a concentric intersection. The substance of the changes to the
Conditions presented, which the Agency was concerned with, centered on the ability or lack thereof to acquire the
property from Target and what would be the alternative traffic impact mitigation measures should the property not
be acquired. Prior to recent negotiations, it was the developer's risk that they would not be able to build out the
remaining portion of their project in the event the access was not acquired. That risk was shifted to the Agency
and would require the Agency to acquire the right-of-way to allow the project to continue. The main access to the
project would come fitrough Fifth Avenue. The other major access point would be from 35th Street, across a bridge
over the wetlands area. SUdf felt it could acquire the property from Target--either through private negotiations or,
as a worst case, through eminent domain.
Member/Councilmember Moore asked if the portion of Target's property was a piece of its parking lot.
Mr. Haynes replied yes. ~
Member/Councilmember Moore inquired if access had to be at that location or could it be further north.
Mr. Haynes noted the object was to make it concentric with Brisbane, to make it a signalized four-way intersection.
Mr. Haynes concluded the presentation, referred to slides which described the visual access points, the joint site
plan, the Brisbane intersection, the bridge across the wetlands, parking for the GES facility, the rendering of the
project superimposed on an aerial photograph which showed the actual project as it would be "in place", and the
signage for the project.
Agency Counsel Boogaard pointed out the major project definition had been presented by staff, but throughout the
process staff may need to supplement through each of the hearings additional information. The reason the Agency
would go through the structure tonight was similar to the reason the Scripps public hearing was structured--and that
was that State law set up a certain scheme between the Coastal Act, the Government Code, and CEQA that required
certain things to be consistent with other things. The sequence was, by State law, the Agency needed to have a
General Plan and the actions tonight would require a General Plan amendment which amended the property from
Limited Manufacturing-Research to Commercial Thoroughfare. Another heating would be to amend the Local
Coastal Program and that had to be consistent with the General Plan, the Coastal Program, and the Coastal Act.
That amendment would amend the current designation in the Local Coastal Program from General Industrial to
Commercial Thoroughfare subject to Central Commercial with a Precise Plan or P Modifier. Thereafter, staff
would 'ask the Agency to consider amending the Zoning Map to be consistent with both the General Plan and the
Local Coastal Program. That Zoning Map would be changed from Limited Industrial with P Modifier to Central
Commercial with a P Modifier. Staff would then ask the Agency to issue a Local Coastal Permit, and, of course,
that has to be consistent with the Zoning and Local Coastal Program Amendment and then the terms and conditions
for a Precise Plan pursuant to the new Zoning designation. That was why the Agency was requested to go in T'
specified sequence so that everything would be consistent with the prior act. The tirst legal requirement was tt
California Environmental Quality Act, whereby the Agency was to review the environmental impacts. There are
two resolutions--one by the City Council, as the responsible agency and one by the Redevelopment Agency, as the
Minutes
November 15, 1994
Page 7
lead agency--those being Council Resolution 17705 and Agency Resolution 1430. Staff might wish to s~mra~rize
the Findings of Significant Impact, if any, that the environmental review process has, and then the Agency could
open the public heating on the CEQA document.
Mr. Salomone informed Agency Members the environmental specialist's wife went into labor about an hour ago.
Staff could snmmarize the impacts should the Agency like.
Agency Counsel Boogaard stated he understood all significant impacts had been mitigated except for air quality and
that, only because the air basin had cumulative impacts from the project, and there was a Statement of Overriding
Considerations. Was that correct Mr. Salomone?
Mr. Salomone replied that was correct.
Agency Counsel Boogaard asked that the Environmental Impact Report (EIR) and all Findings be incorporated into
the Record and the Council/Agency consider and adopt after the hearing, Resolution 17705 and Resolution 1430.
Chairman/Mayor Nader asked if the EIR was in front of the Council/Agency.
Agency Counsel Boogaard said the EIR was available.
Mr. Haynes informed the Members the EIR was provided under separate cover in late October.
Chairm~n/Mayor Nader said it had been separated from his packet and not provided.
~.gency Counsel Boogaard asked the date of the prior hearing that the Disposition and Development Agreement was
heard.
Mr. Haynes replied August 23, 1994.
Agency Counsel Boogaard asked if the Council/Agency reviewed and certified the EIR at that time.
Mr. Haynes replied no.
Mr. Saiomone pointed out the Planning Commission reviewed it and unanimously recommended certification to the
Couneil/Agency.
Mr. Haynes pointed out when the Final EIR was available, Joe Monaco (Environmental Projects Manager)
forwarded that to the Agency Board under separate cover.
Chairman/Mayor Nader noted when the Scripps project came before the Council/Agency, and knowing it was going
to be a very complex series of hearings, staff had provided him with an advance briefing on the complexities so the
heating could be conducted appropriately.
Agency Counsel Boogaard said the problem was the EIR presenter has had a personal family crisis which took him
away from the meeting. Counsel has tried to summarize from what he had been briefed on, on the environmental
impacts, that is, that all significant environmental impacts have been mitigated fully except for air quality. The
project was, of course, an in-city development that does not have any of the typical mw land type development
activities that the Council/Agency would be typically concerned about.
Chainnan/Mayor Nader asked if it was Agency Counsel's recommendation to go ahead and open the hearing.
Agency Counsel Boogaard said it was.
Minutes
November 15, 1994
Page 8
Chairman/Mayor Nader declared the public heating open and asked Agency Counsel if the Council/Agency coul;
simultaneously hear all items.
Agency Counsel Booguard said he was asking all hearings be opened and then closed sequentially.
Chairman/Mayor Nader declared the public hearing open for all items under Number 5 of the Agenda.
Phil Adams, representing Gatlin Development, 12665 High Bluff Drive, San Diego, thanked the Council/Agency
for the oppommity for the presentation of the project. If there were any questions, he was available to answer them
with respect to the on- and off-site work. It was a complicated project, from the standpoint that it involved both
Chula Vista and National City as well as dealing with several adjacent property owners--Target Stores being one
of them. The developer agreed with the City that the concentric intersection would be best suited not only for the
project but the adjacent project, as well as Target. The developer felt confident that would be accomplished. The
developer met with the fee owners of the property and believed acquisition of the property would be accomplished.
Jerald A. Alford, representing National Avenue Associates, 2445 Fifth Avenue, San Diego, requested the project
be approved and advised he was available to answer any questions.
There being no additional members of the public desiring to speak, Chairman/Mayor Nader declared the CEQA
(Item 5.A) public hearing closed.
Agency Counsel Booguard supplemented his prior statement, noting pages 5-37 through 5-50 of the staff report
contained the summary of the environmental consequences, and page 5-53 contained the Statement of Overriding
Considerations for the singular cumulative air quality impacts. That does summarize the Environmental Impact
Report and the Mitigation Measures being recommended be imposed on the project. Staffs recommendation w~
that the Agency adopt Resolution 1430 and the Council adopt Resolution 17705. .
AGENCY RESOLUTION 1430 and COUNCIL RESOLUTION 17705 OFFERED BY
MEMBER/COUNCILMEMBER FOX, reading of the text was waived and passed 4-0-0-1, with Nader
abstaining.
There being no members of the public desiring to speak, Chairman/Mayor Nader declared the public heating on
Item 5.B on the General Plan Amendment closed.
Member/Councilmember Rindone asked Chairman/Mayor Nader why he abstained.
Chairman/Mayor Nader replied he abstained because he had not fully reviewed the Environmental Impact Report.
COUNCIL RESOLUTION 17706 OFFERED BY MEMBER/COUNCILMEMBER FOX, reading of the text
was waived and passed unanimously.
There being no members of the public desiring to speak, Chairman/Mayor Nader declared the public hearing on
Item 5.C on the Chula Vista Local Coastal Program and Bayfront Specific Plan in Accordance with Amendment
#12 closed.
ORDINANCE 2613 OFFERED FOR FIRST READING BY MEMBER/COUNCILMEMBER FOX, reading
of the text was waived and passed unanimously.
There being no members of the public desiring to speak, Chairman/Mayor Nader declared the public hearing on
Item 5.D on the Zoning Map Established by Section 19.18.010 of the Chula Vista Municipal Code to ReZone
closed.
Minutes
November 15, 1994
Page 9
ORDINANCE 2614 OFFERED FOR FIRST READING BY MEMBER/COUNCHAVIEMBER FOX, reading
of the text was waived and passed unanimously.
There being no members of the public desiring to speak, Chainnan/Mayor Nader declared the public hearing on
Item 5.E on the Authorizing the Issuance of Coastal Development Permit #068 closed.
COUNCIL RESOLUTION 17707 OH~IERED BY MEMBER]COUNCILMEMBER FOX, reading of the text
was waived and passed unanimously.
There being no members of the public desiring to speak, Chairman/Mayor Nader declared the public hearing on
Item 5.F closed.
Agency Counsel Boogaard requested that on Resolution 1431, which was to approve the Precise Plan and the Project
subject to Conditions of Approval, that the Agency/Council amend Conditions of Approval in the manner
recommended by the handout (and made a part of these proceedings) that was included at this evening meeting.
Were there Conditions of Approval that were negotiated after the meeting started, Mr. Haynes?
Mr. Haynes replied there were not.
Agency Counsel Boogaard asked if the handout contained the new Conditions which were referred to as accepting
slightly greater risk on the alignment.
Mr. Haynes replied that was correct.
Agency Counsel Boogaard noted they were identifted as Attachment 1 to Resolution 1431 and there were seven
pages of Conditions that were marked for changes.
Mr. Haynes replied that was correct. The only changes occurred with Conditions B.7 through B. 10.
Agency Counsel Booguard asked if that dealt with the realignment of the Brisbane intersection.
Mr. Haynes concurred and noted it also dealt with the Fourth Avenue widening.
Agency Counsel Boogaard said staff was requesting the Agency adopt Resolution 1431, as modified by the
Conditions that were handed out this evening. The significant change in the risk was that if there was a failure to
acquire that slight parcel of property, south of the Dixieline driveway, that would not stop the additional construction
on the shopping center site but the City/Agency would be required--if the City/Agency was unable to acquire the
property by eminent domain--to meet and confer and there would have to be a good faith effort to try and acquire
the property. Ifthe City/Ageney cannot acqnlre the property inthat fourmonthperiod, thenthe City/Agency would
have to obtain suitable replacement mitigation in the vicinity as outlined by Mr. Haynes. The City/Agency will have
the developer's money, and staff believed it would be able to acquire through eminent domain. If that failed, there
was now a fairly adequate back-up measure of being able to negotiate the suitable replacement mitigation with the
developer's funds. If that failed, at the end of a two-year period the City/Agency may end up having to remm the
developer' s money. The intersection would remain as it currenfiy appears.
Member/Councilmember Moore stated there would be access, but not ideal access.
Agency Counsel Boogaard concurred and noted it would not be ideal because there would be cross-traffic turning
one way, westward on the Dixieline driveway, and eastward on Brisbane, which could cause a traffic conflict. The
mitigation measure was designed to avoid that and traffic stacking.
Member/Councilmember Moore asked about the bridge across the wetlands.
Minutes
November 15, 1994
Page 10
Mr. Salomone informed the developer would take full responsibility for the bridge. ~"
Member/Councilmember Moore asked if the City/Agency was proceeding with friendly eminent domain.
Mr. Salomone replied it was possible the City/Agency would use friendly eminent domain as there was an advantage
todo so.
Agency Counsel Boogaard stated it was built into the settlement requirement that there be a good faith effort to
acquire, tirst by the developer, and then by the City/Agency. There was a statutory requirement to try and confer
in good faith.
Member/Councilmember Fox asked if the Fourth Avenue property was not obtained for mitigation, would the
suitable replacement property the City/Agency would try to obtain subject the City/Agency to some additional
exposure.
Agency Counsel Boogaard said it was not so much replacement property as it was replacement mitigation. For
example, to avoid the traffic conflict of two cars crossing, there could be an island divider which restricted left-hand
turns. It was a manageable risk. The developer gave a security deposit of 150%.
AGENCY RESOLUTION 1431 OFFERED BY MEMBERJCOUNCILMEMBER FOX, reading of the text was
waived.
Chairman/Mayor Nader asked that the Environmental Impact Report be placed in Member packets when the
Ordinances are returned for second reading.
Member/Couneilmember Fox requested that, in future, all Environmental Impact Reports always be placed i~
Member packets.
Chainnan/Mayor Nader believed the Environmental Impact Report was included in Member packets some weeks
ago, which was a good thing as it was a long document and Members should have ample time to review it, but it
somehow was not included in subsequent staff submittals.
Member/CounciImember Rindone suggested the new Councilmember-elect be given all agendas for Council and
Agency meetings starting now.
VOTE ON MOTION: 5-0, passed unanimously.
6. PUBLIC HEARING LEASE OF THE STRUCTURES AT 801 BROADWAY IS NECESSARY
TO EFFECTUATE THE REDEVELOPMENT PLAN AND FINDING, PURSUANT TO HEALTH AND
SAFETY CODE SECTION 33431, THAT IT IS IN THE BEST INTEREST OF THE PUBLIC AND THE
REDEVELOPMENT AGENCY THAT THE STATED PROPERTY BE LEASED TO THE URBAN CORPS
FOR USE AS AN ADMINISTRATIVE CENTER FOR AN OIL RECYCLING EDUCATION PROGRAM
AND BE LEASED WITHOUT PUBLIC BID--The City's Recycling Coordinator obtained a $371,850 grant to
promote used oil recycling. The programs to be funded by the grant and administered through the Urban Corps
will make a substantial contribution to the City' s residential and commercial recycling and watershed oil programs.
The Urban Corps requests use of the South Bay Chevrolet dealership as an office/warehouse facility. Staff
recommends approval of the resolution. (Community Development Director)
A. AGENCY
RESOULUTION 1434 AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE LEASE
FOR STRUCTURES LOCATED AT 801 BROADWAY WITH THE URBAN CORPS FOR US AS AN
ADMINISTRATIVE CENTER FOR AN OIL RECYCLING EDUCATION PROGRAM
i ['
Minutes
November 15, 1994
Page 11
Chairman/Mayor Nader declared the public hearing open.
Them being no members of the public desiring to speak, the public heating was declared dosed.
AGENCY RESOLUTION 1434 OFFERED BY MEIVIBER/COUNCILMEIVIBER MOORE, reading of the text
was waived.
Agency Counsel Boogaard noted staff would try and set the rent so that the Agency would be able to get, for the
use of the building, whatever was left in the grant amount, which could amount to between $3,000 and $6,000.
Chairman/Mayor Nader noted the market value of the lease income potential of the property was estimated by staff
at $269,000 year.
Community Development Specialist Rofoli said that was the case were the Agency able to find a tenant willing to
pay market rate. There was a very uncertain timeline for developmere of the property. Any tenant the Agency
secured for the property the Agency would have to evict when the Agency had a developer.
VOTE ON MOTION: 5-0, passed unanimously.
ORAL COMMUNICATIONS
None.
ACTION ITEMS
7. AGENCY
RESOLUTION 1435 AMENDING RESOLUTION 1419 APPROVING SALE OF 1994 TAX
ALLOCATION REFUNDING BONDS--On 9/24/94 the Redevelopmere Agency and Council authorized the
issuance of 1994 Tax Allocation Bonds for advance refunding of the 1986 Tax Allocation Bonds previously issued
by the Agency for the Bayfront/Town Centre Redevelopment Project. The primary purpose of the proposed
refunding is to achieve savings in annual debt service payments. Staff recommends approval of the resolution.
(Executive Director)
Member/Councilmember Fox asked if the $10,000 fee for Standard & Poors was normally paid out of the bond
proceeds.
Finance Director Powell replied that was only the case should the Agency decided not to go forward with the bond
issue.
Member/Councilmember Fox said should the Agency go forward with the Issue, then would the fee be paid from
bond proceeds. If the Agency did not restructure, would the Agency likely face a downgrade from Standard &
Poors.
Mr. Powell said that was very true.
AGENCY RESOLUTION 1435 O~}'ERED BY MEMBER/COUNCILMEMBER MOORE, reading of the text
was waived.
Member/Councilmember Rindone stated he wanted to hear the City Manager's recommendation and justification
/br the bond sale.
Minutes
November 15, 1994
Page 12
Executive Director/City Manager Goss said the bond market had deteriorated since the item was last presented
the Agency. The ceiling, 7.5 percent, which was approved by the Agency at that time, would need to be adjusted.
The basic rationale was the overall cost of the bonding was more expensive than what was originally projected.
There would be some immediate savings which were projected to the Agency. The Agency does not have the
luxury of waiting two or three years to see if the market improved. Both Underwriters on this particular Issue
advised that given the nature of the bond market, to achieve the savings staff projected on the short-term, over the
next several years, it would be better to act in the immediate future than to wait. Another factor why the Agency
should proceed with this was that by extending the debt service, it would extend the life of the project area. The
Underwriters advised it would be to the advantage of the Agency to proceed given the immediate need for the
savings to the Agency, not only this year but for the next several years. It was a very difficult Issue, one that was
not contemplated in August when staff was proceeding with the Agency' s authorization. The final point to make,
was that with the action taken by the Fed today, since the Issue was loaded more toward the end of the term, an
Underwriter advised that that could benefit interest rates toward the tail end of the bond Issue.
Member/Councilmember Rindone asked if Mr. Northcross, the financial adviser, would be recommending the sale
at this time.
Mr. Powell stated that, in a memorandum Mr. Northcross wrote to him, he basically summarized the numbers
entailed withthe deal. Mr. Northcross's recommendation reads: The Agency should only do this refunding if a value
short-term cash flow savings above all else. This refunding is a case of creating a long-term financial burden to
achieve a short-term financial benefit. It is true that under present economic and fiscal conditions many public
agencies are doing just that. However, if there are rensonable alternatives to addressing the O'ty's cash flow needs
that do not add to its long-term financial burden, these alternatives shouM be selected instead of this refunding.
reasonable alternatives addressing the cash flow needs in order to avoid a long-term financial burden, they should
be selected. At this point, he did not feel the Agency had those alternatives.
Member/Councilmember Rindone wanted to hear the recommendation of the Grigsby Brandford & Company
representative.
Steve Neilson representing Grigsby Brandford & Company, 750 B Street, Suite 3130, San Diego and Mark Hughes,
Los Angeles Office, stated their recommendation was that going forward with the refunding provided the short-term
cash benefits that the City Manager was speaking of. On a long-term basis, a riffle that we use as the Present
Value Cost of the overall refunding, was a negative number, it was upwards of $3 million. That was not too
surprising, from the point of view that the Agency would be taldng a loan which was about a 17 year loan and
extending it to a 30 year loan. Our recommendation, as far as timing was--given our understanding of the
Redevelopment Agency budget has been set with the anticipation that the refunding would go forward producing
some $800,000 in savings. We do not feel there will be a significant reduction in rates between now and May of
next year and any opportunity for significant correction will not occur until six to nine months out.
Member/Councilmember Rindone said it was his understanding the Net Present Value was going to be closer to $3.5
million instead of $3 million. Was that undershanding correct.
Mr. Neilson said Grigsby Brandford estimated at market levels, as of last Friday, the Present Value Cost was about
$3.3 million.
Member/Councilmember Rindone asked the industry standard in making a determination to go forth with the actual
sale or not with the Present Value Cost being backloaded.
Mr. Neilson said a refunding was done for the purpose of restructuring. He did not think there was an industry"
standard. The policy decision the Agency would have to make tonight was whether these cash flow savings now
Minutes
November 15, 1994
Page 13
through 2011--which would be roughly $800,00 to $1 million this year and on average, about $150,00 a year after
that through 2011---cash relief provide a benefit that outweigJas the cost of extending the debt out to 2024.
Mr. Neilson said they started on the restructuring three months prior with the expectation of being able to give the
Agency the assurance for the transaction by being able to effect the restrncturing to give the Agency the cash relief
and achieve interest rates low enough. For several reasons, the deal was not able to qualify for insurance. The
revenue streams for the Agency have deteriorated significantly from when the bonds were first issued. Absent this
restracturing, the bonds will be downgraded. If the Agency wanted to lock-in those near-term savings through 2011
and would want to do that in a manner which would provide the savings for the 1995 Budget, we would recommend
going forward as soon as possible.
Member/Councilraember Riodone said he thou~tt it was year 2016 when the negative Present Value Cost kicks in.
Is it 2011?
Mr. Neilson replied the maturity on the 86 Bonds which were in place was 2011. Under the structure being
proposed, the Agency would have some level of savings through 2011 and then dis-savings from that period going
forward to the final maturity of the refunding bends to 2024.
Member/Councilmember Riodone asked if the approximate $3 million to $3.5 million loss in savings was the
aggregate from 2011 to 2024.
Mr. Nellson said yes.
Mr. Powell presented an overhead chart illustrative of subject under discussion. Said chart has been made a part
of the official documents of record for this item.
Member/Councilmember Rindone asked if the City's financial advisor would recommend this.
Mr. Neilson replied if the Agency came to the opinion that there was no value associated with the cash relief the
transaction would provide through 2011 then Grigsby Brandford nor the financial advisor would recommend it.
Member/Councilmember Rindone said he was trying to find a way possible to support the recommendation, but the
Agency was putting the Agency's himre at stake. The numbers looked hefty. While he concurred with Grigsby
Brandford there would be a chance of short-term relief, it did not seem to be a good deal in the long-term.
Mr. Goss pointed out the actual debt service that would have to be paid during the latter years was comparable to
what was being required of the Agency at this time. One of the things which was changing which was not reflected
on the chart--bnt how much it will change was a matter of anyone's guess--that is, to the extent what the Agency
would expect would be the tax increment would be expanding during that period of time. By 2011 the Agency
should see some major development on the MidBayfront which would bring in additional tax increment. In the
overall pempective, what was shown on the chart in years 2012, 2013 and such, was what the Agency was paying
in 1995/1996 about $3.1 million. The obligation for the debt service from the tax base during those future years
would be smaller because the tax base would be larger. Relatively speaking, the amount of debt service would be
smaller than the actual base. The other advantage would be to extend the life of the project area.
Chairman/Mayor Nader asked if that met the Agency would pick up 13 additional years of tax increment revenue
that the Agency would otherwise not receive.
Mr. Goss said that was his understanding.
,?.hairman/Mayor Nader said that needed to be factored into the discussion.
Member/Councilman Rindone asked if Mr. Powell agreed with that.
Minutes
November 15, 1994
Page 14
Mr. Powell deferred to Mark Hughes. ?
Mark Hughes, Grigsby Brandford and Company, Los Angeles Office, said, essentially, there were two components
which needed to be looked at in terms of the life of the redevelopment project: [1] the existing land use controls
which expire in 1999, unless the project was amended. What that meant was that in 1999, for all intents and
purposes, the project was done except for paying the debt service through 2011. By extending the debt service all
the Agency was really doing was saying was that from now to 2024 the Agency would continue to get all the tax
increment that the project generates. The Agency would not necessarily have control over the project area, the
Agency would have control over the dollars which come in. Assnmin~ revenues grow that would be what the
Agency would gain by extending debt service.
Chairman/Mayor Nader asked if the Net Present Value loss estimate in excess of $3.5 million was an estimated
based on the assumption that there was no continued tax increment during those last 13 years. If doing this would
enable the Agency to get tax increment for an additional 13 years, and such tax increment does exist, then, in fact,
was not the Net Present Value loss reduced or possibly negated by that fact.
Mr. Hughes said a more accurate portrayal would be to add up all the tax increment the Agency would get between
now and 2011 and compare it to all the tax increment the Agency would get between now and 2024, that would give
the Agency an idea of the excess revenues the Agency would generate by extending the life of the project area.
Chairman/Mayor Nader said the Present Value of the additional 13 years worth of tax increment would need to be
subtracted from the Present Value of the additional payments the Agency would make during the final 13 years to
get a truly accurate figure. There was no way of doing that because the amount of those tax revenues in those last
13 years was extremely speculative. It was an important point for the discussion because that changed the picture.
Rather than a sure fire $3.5 million Present Value loss, what existed was a speculative situation, depending upo ~'~
the success of the MidBayfront project, may be a Present Value loss or may not be. .
Member/Councilmember Rindone said that was a definite reason to ensure a successful MidBayfront project. If
the MidBayfront project does not materialize with significant revenues by 2011, it would create insolvency.
Member/Councilmember Moore pointed out if the MidBayfront Plan proceeded decently, the Agency would make
money. If the Southwest Redevelopment Project Area came alive because the economy changed, the Agency could
become solvent as far as having money to subsidize redevelopment as well as pay debt.
Member/Councilmember Rindone asked the Executive Director if he saw any other viable alternative at this time
to realize those savings than what was proposed.
Mr. Goss stated he had not been able to find a viable alternative.
Member/Councilmember Rindone asked, given the municipal bond market was at 6.6, why was staff saying the
Agency had to raise the cap from 7.5 to 9.
Mr. Neilson replied the structure contemplated three series of bonds, one series of which would be sold taxable at
an interest rate of 10% or so; a senior lien portion, which has received a rating from Standard & Poors of B+ ,
which was below A level; and, a small non-rated piece at a yield of about 8.5 percent on the long end. The
combined and weighted interest cost of those three pieces at today's levels was about 8.3 or 8.4 percent.
Member/Com~cilmember Rindone requested that the chart being shown be included in the report whenever these
type items come before the Council/Agency. The Fiscal Impact Statement did not address the cost to the Present
Value Costs in the long run and that information shoud be feflected in staff's report. It was critical and mandatory
that Council/Agency have that type information before them when making a decision of this type.
Minutes
November 15, 1994
Page 15
Member/Councilmember Horton stated she strongly agreed with the comment made by Member/Councilmember
Rindone. That type information should have been provided to help the Members understand the full picture of what
Members are being asked to make a decision on.
Chairman/Mayor Nader requested best and worst case scenarios of tax increment be furnished in future staff reports.
Member/Councilmember Rindone asked the revenue flow projections.
Mr. Neilson said Grigsby Brandford prepared a whole variety of projections: some based on no-growth, assuming
revenues stay flat; some based on 2 pement; another based upon historical growth rate of about 4.1 percent. Those
projections indicated--out to fiscal year 24 the project was generating a litfie over $6.6 in tax increment, which
excludes unitary revenue and based on subventions having fallen away--the Agency would be looking at about $8.3
million on a 4.1 percent growth on the life of the project. That was no guarantee, that was historical.
Member/Councilraember Rindone said the only way one could vote for this was with the understanding that the
Agency had a commitment to have the MidBayfront project become a reality. Anything short of that, need the
Members needed to vote No. If it was not accomplishable to have the MidBayfront project built by 2011 and bring
in revenue, then he would vote No.
VOTE ON MOTION: 5-0, passed unanimously.
ITEMS PULLED FROM THE CONSENT CALENDAR
Item pulled: 4. The minutes will reflect the published agenda order.
OTHER BUSINESS
8. DIRECTOR'S/CITY MANAGER'S REPORT(S) None.
9. CHAIRMAN'SfM[AYOR'S REPORT(S) None.
10. AGENCY/COUNCIL MEMBER COMMENTS None.
ADJOURNMENT
ADJOURNMENT AT 1:03 A.M. to a Special Joint Redcvclopment Agency/City Council meeting on November
22, 1994 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers.
Respectfully submitted,
Berlin D. Bosworth
Secretary to the Redevelopment Agency