HomeMy WebLinkAboutrda min 1995/05/02 CC MINUTES OF A JOINT MEETING OF THE REDEVELOPMENT AGENCY/CITY COUNCIL
OF THE CITY OF CHULA VISTA
Tnesday, May 2, 1995 Cormoil Chainhuts
5:15 p.m. Public Services Building
CALL TO ORDER
1. ROLL CALL:
PRESENT: Agency/Council Members Alcvy, Mt~ot, Padilia, and Acting Chair/Mayor Pro
Tem Rindone
ABSENT: Chair/Mayor Horton
ALSO PRESENT: Jokn D. Goss, Director/City Manager; Bruce M. Boogaard, Agency/Council
Attorney; and Beverly A. Authelet, City Clerk
2. APPROVAL OF MINUTES: April 18, 1995
MSC (Padilla/1Hoot) to approve the minutes of April 18, 1995 us presentted. Approved 3-0-1-1 with Horton
absent and Alevy abstaining.
CONSENT CALENDAR
(1tern pulled: 7)
BALANCE OF THE CONSENT CALENDAR OFFERED BY AGENCY/COUNCIL MEMBER PADILLA,
reading of the text was waived, passed and approved 4-0-1 with Hurtun absent.
3. WRITTEN COMMUNICATIONS: None.
4. RESOLUTION 1449 APPROVING THE MORTGAGE CREDIT CERTIFICATE (MCC)
PROGRAM AND ASSIGNING ITS ALLOCATION AND PROGRAM TO THE AGENCY FOR
I1MPLEMENTATION
RESOLUTION 17884 APPROVING THE MORTGAGEE CREDIT CERTIFICATE (MCC)
PROGRASI AND ASSIGNING ITS ALLOCATION AND PROGRAM TO THE AGENCY FOR
151PLEMENTATION -- The MCC was authorized by Congress in the Tax Reli~rm Act of 1984, as alternative
to mortgage revenue bond-backed financing as a tool tbr providing home ownership assistance to lower income
households. Staff recommends that the Agency approve the resolntion authorizing application fi~r a $I0 million
allocation. (Community Development Director)
5. RESOLUTION 1450 ACCEPTING BIDS AND AWARDING CONTRACT FOR PAINTING AND
STUCCO WORK ASSOCIATED WITH TOWN CENTRE PARKING STRUCTURE IN THE CITY OF
CHULA VISTA ~- The pro. ject involves all work required as described in the bid reqnest. Stat't' recommends
approving the resolution and awarding the contract to Merzi Painting and Construction, low bidder. (Community
Development Director)
6. RESOLUTION 1451 GRANTING EASEMENT TO THE CITY OF CHULA VISTA FOR
STREET PURPOSES FOR TIlE CONSTRUCTION OF IMPROVEMENTS ALONG BROADWAY
ADJACENT 801 BROADWAY (APN 623-050-06)
Minutes
May 2, 1995
Page 2
RESOLUTION 17885 ACCEPTING EASEMENT FROM Tile REDEVELOPMENT AGENCY
FOR STREET PURPOSES FOR THE CONSTRUCTION OF IMPROVEMENTS ALONG BROADWAY
ADJACENT TO 801 BROADWAY (APN 623-050-06) -- The proposed improvements to be constructed in the
Broadway Widening Prqiect from I to L Streets include the installation of street and traffic improvements at the
southeast comer of Broadway and K Street, The existing right-of-way is insufficient to properly install the
improvements. ]~t is necessary to acquire a portion of the property at 801 Broadway t,,~ facilitate the construction
of the: pr{~ject. Staff recommends approval of the resolutions.
7. REPORT BROADWAY BUS[[NESS HOMES --Report on proposal to construct "business homes"
on the lbrmer Fuller Ford site located at 760 Broadway, Chula Vista. The project includes 36 town homes with
commercial (or professional) space on the ground lloor. (Community Development Director) Pulled from the
Clansent Calendar.
Mr. Goss stated the Broadway Business Home proposal was a very nnique proposah It was a combination of
residential and business in the same unit. It was on the Agency's agenda becaase it involved property that was
owned by the Agency/City which was the old Fuller Ford site. The policies applied through the community
development, planning, and engineering departments of the City were oriented toward development that was more
traditional. Staff had some concern because the City policies were oriented toward more traditional types of
development and did not necessarily fit the type of proposal being oftbred. Theretbre, staff tblt it important to
present to the Agency a t~umber of issues betbre proceeding on with the processing of the proposal.
Chris Salomone, Director of Connnunity Development, stated part of their charge as an agency was to do creative,
ieadaptive use of difficult parcels and difficult situations. Staff planned to proceed and process the project but
wanted to identit~ some of the issues fbr the Agency.
Agency Member Moot stated the City was willing to take ownership of the loop road bnt staff had recommended
that tile City not take on the responsibility of the common area expenses. He questioned where the conanon areas
were that were at issue.
Mr. Salomone replied they were the parking lots in front that were accessed off Brt~adway a~4iacefit to the sidewalks
in fi~lnt of the building.
Agency Member Moot questioned if the typical way of maintaining those areas was through CC&R's which was
selt-enfi.~rced by a honleov/ners association or through an assessment district.
Mr. Goss stated those were the lwo basic choices, but because of the chance in la . ovhr time, developers were
very reluctant to set up a homeowners association because they tblt that over time they were buying litigation. Staff
had concerns regarding the City maintaining and taking responsibility lbr the commot~ areas. He had discussions
with staff regarding that and in some respects it could be c,3mpared with Third Averole area where the City had
mone3 and hired under contract people to maintain the landscaping. There was a definite interest m trying to avoid
a h~/n;cowners association on the part of the developer. There was a letter fronl the attorney representing the
dev~.ll/ller that also expressed that perspective.
Mr, Salomone stated staff wanted to explore the possibility of a third party butl~ring the City, i.e. sonte type of
management company that could indemnit~ the City.
Agency Member Moot stated in his legal practice it was very common 1br shopping centers, as part of a rent
structure, to require contributions lbr common area nraintenance expenses. He tblt that some internrediate entity
could be created that would be responsible fbr adnlinistrating the collection of common area maintenance expenses.
If the people within the prqiect were contributing to the maintenance it would probably be well maintained. 11' those
expenses fell upon another agency it may not be as well maintained.
Minutes
May 2, 1995
Page 3
Mr. Goss stated that was something that needed to be explored. One of the problems besides taking on the liability
with the changes in law was that any kind of needed increase in assessments could be blocked by a m~jority vote
of the people in the district. Then, in effect the general taxpayers dollars would have to start underwriting the
maintenance of the open space area.
· Joseph Citron, 761 Golden Park, San Diego, CA, representing J,.~ellen Enterprises, stated it was a very old
concept as it went back over 1,000 years and a relatively new concept in that it was burgeoning all over the country.
They were proposing the beginning of' the revitalization of Broadway. They were proposing a business community
not a residential community. Business owners would be allowed to live above their stores. If the business owners
wanted tot lots, barbecue pits, and park benches, which had been proposed by the Planning Department, they would
go to EastLake to buy a home. That was not what they were looking for. They had met with a number of fbcus
groups over time and the design came from those focus groups. They had personally invested $125,000 in the
project, were in version seven of the plot for the pr~ject, and had been working on it tbr over one year and had
not received approval fi'om the City. He was asking the Agency to help find a way to tell staff to move fL~rward
on a pilot project. There were several other properties that were owned by the Agency/City that they were
interested in also. They were desperate at the current time and needed the Agency's help.
· C.W. Kim, 7191 Encclia Drive, La Jolla, CA, C.W. Kim Architects & Planners, stated it was an exciting
and challenging project. He then gave a slide presentation.
Mr. Citron stated that when mixed use was suggested it was normally where there was a store and condominiums
or some residential use that had been built along side of it, bnt not the same owners or same activity. The project
was to be one owner that ran the store and lived upstairs.
Member Alevy questi,,~ned the sale price liar the tinits and actoal living space and retail space.
Mr. Citron replied the building was three stories and the store was more than 1/3 of the space due to the storage
and garage on the main level. The upper story was the smallest. the bedroom section. They were running
approximately 2,100-2,200 sq. ti. and they had set a target sales price starting at nnder $200,000 and range up to
$250,000 t~e simple, full ownership ,,ff both the store and npp~'r residential ar~a.
Member Alevy stated fi'om a marketing angle it was very excmng. He was concerned with the City's burden and
questioned what would happen if all the units were not sold.
Mr. Citron replied he was the developer of a successlid $90 million prqiect across the bay. They were used to
doing good sized projects and the proposed prqicct was small even thot/gh it was $9 million and they were going
into it with all the funds available to complete the prt~iect. They were going into it as cautiously and conservatively
as possible because they could not point to 20-30 other similar pmiect that had been done. There/~:~re, they were
building the models first. The acthal funding available was t,.~ build the first six unit building. Five of the units
were already spoken Ibr. The next step would be the completion of half of the property, 18 units would be
completed. Their intention was to bnild the entire 36 units. Their building company would be on-site and
responsible tier the project.
Member Alevy questioned the plan I~>r secnring the area, i.e. to keep people out o|' the living area during business
hours and out of the business area after business hours.
Mr. Citron replied that the ~bcus groups suggested electric gates on the two entrances of the loop road. It was only
a suggestion and nothing was cast in stone. He hoped the Agency would allow them to move li~n,vard to be able
to work oil/those items that could not be finalized at the present meeting.
Member Padilia questioned if there was any independent market analysis or inlk~rmation about the success of similar
mixed use prqjects in other areas in Calilin'nia. He fdt that was an important approach when looking at what the
policy approach would be of the City.
May 2, 1995
Page 4
Mr. Citron stated they were having to go out of the state in order to obtain that inlbrmation. The focus group
reaction was very positive to the prqject. It was becoming increasingly difficult fin them to be able to sell the units
tbr the prices outlined and one of the key ingredients of the success and sale of the units was an eager market
h~oking lbv that price range. The City processing was a vay large part of thai $200,000 - $250,000. They wanted
permission to build the model units or the first building and l~om that show the City the market. The biggest
problem as identified in the report was not the site but Chula Vista, the perception of people not living in the City.
Member Padilia stat~ he could understand and sympathize with what Mr. Cimm was saying, but betbre the Agency
could do that there were processes and d~isioas that had to be made by the Agency regarding policy applications.
1 le questioned if Mr. Citron was intending to provide specific intbrmation or to work with staff in order to obtain
that h~/brmation.
M~. Citron statM they would do that. They wanted to be able to prove their point and t~lt they could do that while
working on the proj~t.
Member Moot stated he could see no reason why the prqject could not be done. He did not see anything in the
rep~rt that would create ~y grave obstacle to going lb~ard expeditiously. He would support the City moving in
that dir~tion. Some of the technical issues, i.e. whether it was done by tentative map or some other approach,
seemed resolvable. He questioned if there was a hangq, p on some of the technical issues.
Mr. Citron stated the City Attorney had been meeting with their attorney and it was his understanding that they
needed to proceed to work out all the details. They were aware that there were costs they would have to bear and
work that they would have to do which they were more than willing m take un. He had a letter from Chicago Title
which stated they were more than ready to insure title based on the proccdnres outlined.
Member Moot stated the land use issues were one of three significant issues identified. He expressed concern that
the pa~king ibr the residential did not tnm into storage space/br the businesses.
Mr. Citron stat~ they were looking at writing a good set of deed restrichons on the properties that would be
en[brceable. In order to avoid problems later they were going to give the buyers a bound manual instructing them
on how to maintain the residences/businesses and have them sign a receipt npon receiving it. fie Iblt it would be
one of the better maintain~ developments within the City.
Acting Chair Rindone commended Mr. & Mrs. Citron on their pr{~iccts. He tdt start wanted the Agency's
p~eliminary reactions to the project and he concurred with Member Moot. It was a golden opportunity and one that
the City could not afford not to do. It was unklue, would address a bnsiness market that~had not been addressed,
and would be in the heart of the area that needed to be revitalized the most. The City had a comn~itmunt to make
sure that what was returned to Broadway was exciting and he tblt the pr<~iect provided that. He urged staff to be
c~cattve and package the prRiect.
Mr. Citron thanked the Agency lbr their support.
Actm1~ Chair Rindone stated the only reservation he had regarding the stall report was the two building concept.
Hc hoped they would at least do a wing in the first phase rather than two units. He ldt that created a statement
anti enthusiasm tbr the project.
MSC (Pudilla/Rindnne) to accept the report. Approved 4-0-1 with Hotton absent.
* * END OF CONSENT CALENDAR · ·
PUBLI~C HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
None sulnnitted.
Minutes
May 2, 1995
Page 5
ORAL COMMUNICATIONS
ACTION ITEMS
8. RESOLIlTION 1452 AUTHORIZING THE EXECUTION OF A COOPERATION AGREEIVENT
BETWEEN THE CITY OF CHULA VISTA AND THE CHULA VISTA REDEVELOPMENT AGENCY
PURSUANT TO THE TERMS AND CONDITIONS OF THE APPROVED DISPOSITION AND
DEVELOPMENT AGREEMENT EXECUTED FOR THE APPROVED CHANNELSIDE SHOPPING
CENTER PROJECT AT FIFTH AVENUE AND C STREET
RESOLUTION 17886 AUTHORIZING THE EXECUTION OF A COOi~ERATION AGREE~IENT
BET~VEEN THE CITY OF CHULA VISTA AND THE CHULA VISTA REDEVELOPI~IENT AGENCY
PURSUANT TO THE TERMS AND CONDITIONS OF TttE APPROVED DISPOSITION AND
DEVELOPSlENT AGREEMENT EXECUTED FOR THE APPROVED CHANNELSIDE SHOPPING
CENTER PROJECT AT FIFTH AVENUE AND C STREET -- The resolution authorizes the execution of a
Cooperation Agreement between the Agency and the City ti>r the purposes of contractually obligating the City to
pay to the Agency in any given year, the t;ands necessary to make the negotiated subsidy payment to WaI-Mart.
Staff recommends approval of the resolutions. (Community Development Director)
Chris Salomone, Director of Community Development, intbrmed the Agency/Council that the item was a fi~llow-up
to the adoption of the Development Agreement tbr the WaI-Mart pr<~iect. It verified the amount of the tax sharing
agreement between the City and the Agency that had been previously approved. The Wal-Mart project was
underway and on schedule tbr a September opening. It was stafl's understanding that the second tenant in the
80,000 sq. ft. building ateintent to Wal-Mart was Bust Products.
Agency/Council Member Padilia questi{med if after year 5 ',~fa 15 year term approximately 50% of the general sales
tax revenue would be applied to the debt service.
Mr. Salomone responded that was correct.
Agency/Councilmember Padilia questioned if the fi~nding mechanism tbr both the impruvement costs and repayment
would not be utilized it weren't for the tax increment revenue in the Town Centre It area.
Mr. Salomone replied that would be an option that would be presented ~o the Agency fbr consideration.
Agency/Councihnember Padilia requested clarification of the statement that "... no assurances for ultin~ate
repayment, any an~ount paid by the Cily lbr the A~ency under this obligation will be hooked as loans to the Agency
Mr. Salomone replied that as a prudent accounting practice tier the City any money paid to the Agency would be
booked as a loan. As long as the redevek~pment process was active the Agency could culleel tax increment and pay
back the General Fund any money that was/brwardcd to it. They were nnt guaranteeing that the money would be
paid back because the lil~ of the project area could terminate in 2014 but the State had always extended that
termination period. Therelbre, it was hooked as a loan hoping that ullimately it would be paid back to the General
Fund.
Agency/Council Member Moot questioned if the $4.9 million figure was lbr net sales tax revenues after loan
repayment obligations and the "transit'r" effect over the 15 year period of time.
Mr. Salomone replied that was correct.
Mmt~tes
May 2, 1995
Pag~ 6
Agency/Council Member Moot questioned how the sales tax reventles w~re predicted and if reliable data was
stores.
Mr. Salemone responded that independent financial consultants were hired. In Wal-Mart's case, there were
hundreds of stores in operation and the data was readily available. The experience within the City led staff to not
be terribly optimistic about the numbers. Th~ peso alevaluation recently was rutally unanficipal¢d and had an effect
on sales tax generation in the City. The payment ~o Wal-Mart would be a pgrcentag~ of whatever was generated
and would be forgiven after 15 years.
Agency/Council Member Moot tMt it important to keep track of the extent to which sal~s tax revenues were redneed
at a4jacent businesses within the City.
Agency/Council Member Padilia assumed they wer~ consen, alive estimates.
Mr. Salomon~ replied that they were stand-alone estimates on Wal-Mart. None of the other retailers in the center
had been considered in the calcnlations.
Mr. Goss stated the sales tax revenues received in March were approximately 6 % ahead of wher~ it was last year.
It was important to understand that sales tax receipts to the City were late, i.~. 2-3 from ~vhen collected and then
l~arded by th~ State to the City. There/k~re, the fbrmal impact of the devaluation of th~ p~so was unknown. The
inRn mal suB'ey conducted by the Finance Depaament indicated a mixed response. Some businesses had been hurt
and others had no impact. There were other positive economic t~ctors going on in the City and he/~lt the overall
Agency/Council Member Alevy questioned if the chart was based on rcvenncs from taxes from the Wal-Mart store
Mr. Salemone replied that lhe revenues would go to Ihe G~neral Fnnd. The City had gnaranteed that there wonld
Acting Ct~air/Mayor Fro Tern Rindone/~lt that needed Io be rein/k~rccd. As ~thcr stores were added to the center
it would resnlt in nnanticipaled revenues to the City.
RES(}L~jTEONS I452 AND 17886 OFFERED BY RINDONE, reuding of the text ~as waived, pussed and
appr~ved 4-0-1 with H0rlon absent.
9. REPORT_ REQUEST FROM[ AUTO PARK DEALERSHIP FOR ADDITIONAL FINANCIAL
ASS},SGTANCE -- The Redevelopmeat Agency considered the request lot additiomd financial assistance from the
Auto !'ark Develupers on February 14, 1995 and directed staff to obtain and analyz~ financial data on dealership
<lpelaiions~ Additional intbrmation has been received and analyzed. and recommendation', ar~ ofl~red for
considerallots, (Community Development Director)
Mr. Goss stated the applicant requested that the item be philed lronl the agenda becanse they were unable tn attend
tht~ meeting.
Chl is 5alomone, Director of Community Development, inli~rnt¢d the Agency that staff would be meeting with the
applicants atton~ey. If it had to he heard next week staff would call a special meeting with the Mayor's approval.
MSC (Rindngm/IVloot) to co~tinue the item indef nitely. Apprnved 4-0-1 with Hm'tun ubsenl.
Minutes
May 2, 1995
Pa~e 7
ITEMS PULLED FROM THE CONSENT CALENDAR
Item pulled: 7. The minutes will reflect the published agenda order.
OTHER BUSINESS
10. DIRECTOR'S/CITY IYANAGER'S REPORT(S) - None
11. CHAIRMAN'S/MAYOR'S REPORT(S)
a. Acting Chair Rindone stated the Agency had received a memo regarding the proposed alternatives tbr the
Vista Hill Hospital. He had fbrwarded a memo to Council and he was uncertain that staff had received a copy
regarding the concerns of the School District $1 million due to a cash flow problem. He requested that the City
Clerk provide staff with a copy of that memo. Before there was a sign-off on May 5th the school district should
be contacted and that issue addressed.
Mr. Goss stated he had seen the letter Mr. Rindone received. It was his understanding that the expansion of the
use of the f~.cility was proposed very recently. Vista Hill had been looking at another use and that had failed. He
was not certain what could have been done regarding advanced notice because the City was not notified.
12. AGENCY/COUNCIL MEhlBER COMMENTS - None
ADJOURNMENT
ADJOURNMENT AT 6:20 P.M. to the Regular Red~velopnaent Agency Meeting on May 16, 1995 at 6:00 p.m.,
immediately following the City Council meeting, in the City Council Chambers.
R~spectt~dly suhmit[ed,
BEVERLY A. AUTHELET, CMC/AAE, City Clerk
by: Vi~ki C. Soderquist, Deput~Clerk