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HomeMy WebLinkAboutrda min 1995/06/03 MINUTES OF AN ADJOURNED SPECIAL MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Saturday, June 3, 1995 Council Conference Room 11:02 a.m. City Hall Building CALL TO ORDER 1. ROLL CALL: PRESENT: Members Alevy, Moot, Padilia, Rindone, and Chair Horton ABSENT: None. ALSO PRESENT: John D. Goss, Executive Director; Chris Salomone, Community Development Director; Glen GoDgins, Deputy City Attorney; Fred Kassman, Redevelopment Coordinator; and Berlin D. Bosworth, Secretary to the Redeveldpment Agency BUSINESS 2. RESOLUTION 1454 APPROPRIATING FUNDS, ACCEPTING BIDS, AND AWARDING CONTRACT FOR DEMOLITION AND SITE CLEARANCE OF EXISTING BUILDINGS AT THE FULLER FORD SITE AT 760 BROADWAY IN THE CITY OF CHULA VISTA, CALIFORNIA (RD-133)--The work includes removal of buildings and disposal of existing improvements, excavation, grading, and other miscellaneous work. The clearance of the site is being done to facilitate the construction of the Broadway Business Homes project. Continued from the meeting of May 30, 1995. (Community Development Director/Director of Public Works) Member Rindone noted how diligently Redevelopment staff worked but requested, as part of the back- up material, that the original staff report which came before the Agency twice before, be attached to the current staff report. Community Development Director Salomone presented a brief staff report. At the meeting of 6/30/95 discussion was held about determining the amount of hazardous material or contamination on the site in advance of demolishing what could be buildings of value. To expedite the matter, staff was asked to return to the Agency today with a position on beginning pre-testing of the site, under an agreement that the applicant would share part of those costs with the City. The cost sharing formula would have the applicant pay the first ~10,000 and the City paying the second ~10,000. Additiona~ costs, up to $40,000 would be split 50/50. This agreement was based on the City going after the actual polluters should any contamination of any extent be discovered on the site that could not be readily remediated. Staff did not believe there was extensive or unusual contamination on the site other than petrochemical or hydraulic fluid which could be readily remediated in a cost-effective manner. Staff would like the Agency to accept that position. Staff would then proceed immediately. There was a demolition contract before the Agency on 5/30/95 that was being held in abeyance until the soils testing was completed. Demolition of the buildings would tako away the value of the structures, Staff had been in negotiations with the applicant on developing a Disposition and Development Agreement. The Broadway Business Homes was a project the Agency deemed valuable enough to give the applicant an exclusive negotiation agreement. The project was a pioneering effort and a pure redevelopment project, It had the opportunity to enhance the Broadway corridor, even to the extent of a spinoff benefit, and change the character of that area. The decision on whether to have existing types of businesses continue or develop the Broadway Business Homes project had not been brought forward to the Agency because of the exclusive negotiation agreement. But because another offer had been made, and because the offer was to continue the use as is, the Agency was now faced with that Minutes June 3, 1995 Page 2 economic dilemma. Staff and the applicant agreed a Disposition and Development Agreement would be drafted. There were only several issues in contention and those could be resolved. However, should some issues not be resolved, staff would bring those forward to the Agency. In light of the fact the Agency had another offer and Agency Counsel was not present, staff hoped the demolition contract could be postponed for one week. Staff expected to receive, within 10 days, a verbal assessment of the contamination characterization of the site from the consultant. Executive Director Goss noted the normal process was for the issues and risks to be identified and resolved through the Disposition and Development Agreement. The question was whether it was appropriate to raze what may be value in advance of having all the issues and risks nailed down in the Disposition and Development Agreement. The issue was whether there were buildings on the site that would have some value which would be destroyed by demolition. Rod Davis, Executive Director, Chula Vista Chamber of Commerce, 233 Fourth Avenue, Chule Vista pointed out the Chamber was supportive of the Broadway Business Homes Project. Jim Courthey of Courthey Tire has been a mainstay in the retail business in the community and if Mr. Courthey said he can make a go of a big tire center, then he can make it go. The real issue before the Agency was what character did the Agency want on Broadway. What do we want the Redevelopment Agency to do in that neighborhood: the project that has been worked on for 13 months to change the nature or a project which would undoubtedly be successful but maintain the nature. Agency Member Moot stated he had never heard of anybody buying potentially contaminated property as is. Federal law and, under State law, the owner of the property was responsible for cleaning it up. What does as is mean? Mr. Salomone replied normal contingencies spoken to in the offer by the applicant would include some definition or characterization of the site. The applicant would want the project to be financeable and, should they desire to sell the property in the future, would not want the property to be in a condition of contamination that would prohibit the property from being resold. The as is would speak to the advanced characterization of the site as clean. Agency Member Moot suspected that to be the case. The applicant does not want it contaminated; Courthey Tire may be able to use the property as is, but it would depend on the levels of contamination. The contamination question must be answered before the Agency can knock down buildings. Deputy City Attorney Coogins noted a dilemma with the demolition decision was that the Agency could not find out the extent of contamination until the buildings were demolished. Pre-testing would indicate what was there, but not how much. Remediation costs might be less should a business be located there which was similar to what was there prior, than should the buildings be demolished. Chair Horton asked if Fuller Ford would ultimately be responsible for remediation. Attorney Googins replied staff was researching that question. Anything that Fuller Ford did, staff believed, they would be ultimately responsible for remediation. The issue was collectibility. Insurance policies which were written after 1974 do not have environmental coverage for most environmental problems. To the extent Fuller Ford has a post-1974 insurance policy protecting them, then there would be an insurance carrier to proceed against. Chair Horton asked if staff had looked into that. Attorney Googins answered staff was analyzing that and would get the insurance contracts from Fuller Ford should they exist. To the extent Fuller Ford was not insured, the Agency would have to pursue Minutes June 3, 1995 Page 3 him, personally, and then the question would be whether he had the money to pay. That information would not be available in time to keep the applicant on their time schedule. Chair Herton noted the applicant would be paying some of the up-front costs and inquired if they would be reimbursed. Mr. Salemone acknowledged that had been discussed with the applicant. Mr. Fuller was doing everything in his power to provide those insurance documents to staff. The weight of State law, through the Planco Act which serves redevelopment agencies, tended to get insurance companies to neg.otiate a settlement. Member Padilia asked if there was anVthing in the law, because of federal and state regulations, which would make any agreement unenforceable. Member Moot pointed out the law required the owner of the property to clean it up. Attorney Geegins responded private parties could enter into agreement amongst themselves as to how they might share costs between themselves for any particular environmental problem. As an innocent transitory property owner, as the Agency could arguably be in this case, CERQA would not likely aggressively pursue a claim unless there was a huge environmental problem. Member Padilia stated if there was a large environmental problem, through arbitration it could be found that the holder of the title at the time could be 100 percent responsible for the clean up costs. Attorney Geegins said that was potentially the case. More often than not, the perpetrator was identified and would be the one pursued, with priority, by any clean up agency, Member Moot pointed out petrochemical contamination usually fell under the County Hazardous Materials and they make the property owner clean it up. They have never, to his knowledge, gone after a prior owner. Chair Herton wanted to know the bottom line should the site be contaminated, Was Fuller Ford ultimately responsible? Attorney Geegins replied the perpetrator would be pursued first by regulatory agencies. That did not mean the City would not be either concurrently, and/or in lieu of them not being able to honor a clean up operation deal, pursued. Chair Herton asked if the City could then go after Fuller Ford. Attorney Geegins answered that was correct. Member Rindone asked if the offer for the parcel by Courtney Tires was to purchase the entire parcel. Mr. Salemone replied it was staff's understanding that the Courtney Tire offer was to purchase the entire site. Member Rindone asked if that offer were to proceed, would the offer for the South Bay Chevrolet site continue or terminate. Mr. Salemone responded the offer was to purchase both sites. Minutes June 3, 1995 Page 4 Member Rindone said it appeared to him that amajor decision was made by a prior City Council in the interest of redevelopmerit and the responsibility should have been secured at that time by that Council and/or staff in determining the change/transfer of the property in pursuing development of the Auto Park in the thrust of promoting redevelopment, The issue about contamination needed to be resolved, but it was not necassarily the responsibility of a new purchase~' of that property, whether the applicant or Courtnay Tire. It was an issue the City needed to deal with and was responsible along with the predecessor. The purpose of redevelopment agencies was to improve blighted areas, to progress and to grow, and to make a change and a difference. He noted he had seen ~ery few projects which have been proposed that addressed the tenets of the purpose of redevelopmerit agencies as well as this project has for potential. You can always tweak and do things a little differently, but ultimately if the Agency wanted to fulfill what needed to be done and make a significant differsrace, thsn the Executive Manager's recommendation to proceed, as far as s~aff was concerned was most:appropriate. The issue of contamination needed to be resolved, but the Agency should not want to hold up the opportunity before the Agency. On page 5-3 of the original staff report of May 23, 1995 w.here it. talked about soil testing, Current information indicates that the Fuller Ford site is free from soil contam/nation. However, since hydraulic lifts are located on the site, it is possible that some seepage at the base of the lifts has occurred. Agency staff is currently contracting for so/Is tests in these areas to determine if there is any'subsurface contaminations. Unless the buildings are ultimately removed, there cannot be a final clarification of contamination. A determination cannot be made to demolish the buildings unless there is a determination to proceed with the project. A decision has to be made. If this Agency was really fostering to promote the tenets of what redevelopment agencies were established for, why it was encouraged, why it can use tax incentives for futur~ yea, s, then the Agency needed to move on. He was not hesitant to wait for this short period of time-~seven to ten days-for the preliminary review to ensure there was no contamination. If the report did not come back showing major contamination, then the Agency needed to move forward, otherwise this project would be cancelled. Chair Horton noted staff's recommendation was to accept the report and reserve action on the demolition of the structures on the site until the results of the soil testing were complete: Was that still staff's recommendation? Mr, Salomone replied that was correct. , ' Mr, Josef Citron thanked the Agency on behalf of Lenore Citron and he for giving of their time by coming in on a Saturday to hear the item. He stated the Citrons were willing to work along the lines that have been suggested. He had a caution: it was his understanding it would be eight weeks before there would be a final report from the tentative testing that was being done. The demolition of the buildings, if it were then ordered at that time, would be another 1-1/2 months to 2 months, which would mean it would be November or December before they could get into the ground on the project-- which would be the rainy season. That would mean the project would be a 1996 project and they would have to make a business decision with respect to whether that made any sense at all to them. They have tentative interest in purchases. The offer was made, in writing, 13 months ago and they were not changing that. He requested the Agency hear the item a week from June 6 and if staff was able to tell the Agency substantial progress had been made and it expected to come to closure on the Disposition and Development Agreement, then the Agency should consider ordering the demolition of the buildings to start at that time so they can get into the ground this year. If that happened, they would make a commitment to have construction drawings into the Building Department on July 21. MOTION: [Horton/Moot] to accept staff recommendation: that the Agency accept the Report and reserve action on the demolition of structures on the site until the results of the soil testing become available. Member Padilia stated he was prepared to support staff's recommendation but nothing beyond that. Minutes June 3, 1995 Page 5 The Citrons know he was very supportive of seeing the project come to fruition. However, there were still a number of unresolved questions to be answered such as: the value of any ultimate City subsidy; what the pattern of regulatory enforcement would be, should greater contamination be found post- demolition; what the disposition of any potential remediation costs would be post-demolition. Chair Horton concurred with Member Padilia about his concerns as well as other concerns expressed. Member Rindone asked staff to summarize what they viewed they were attempting to do, and what they would bring back to the Agency. M,-. c~alomone acknowledga~J staff was working on a number of fronts: the core testing would be initiated on the site; negotiations v~ould Continue oil the DispPsition and Development Agreement with th3 attorney and applicant; and staff ~ould determine, to the extent that it could, the legal remedies and insurance capabilities to pay for any unknown hazardous contamination on the site. Staff would bring the item to the Agency on July 13. Staff will meet with the applicant prior to the July 13 meeting. Member Alevy sought clarification on the motion. Member Horton pointed out the motion would accept staff's report and reserve any action to demolish the structures until the results of the testing were completed and brought forward to the Agency. VOTE ON MOTION: Passed unanimously. ORAL COMMUNICATIONS None. : OTHER BUS!NESS 3. DIRECTOR'S REPORT(S) None. 4. CHAIR'S REPORT(S) None. 5. MEMBER COMMENTS None. ADJOURNMENT The meeting will adjourn to the Regular Redevelopment Agency Meeting on June 6, 1995 at 4:00 p.m., immediately following the City Council meeting, in the City Council Chambers. Respectfully submitted, Berlin D. Bosworth Secretary to the Redevelopment Agency