Loading...
HomeMy WebLinkAboutrda min 1995/11/14 MINUTES OF A SPECIAL MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Tuesday, November 14, 1995 Council Chambers 10:54 p.m. Public Services Building CALL TO ORDER I. ROLL CALL: PRESENT: Agency Members Alevy, Moot, Padilia, and Acting Chair Rindone ABSENT: Chair Herton ALSO PRESENT: John D. Goss, Director; Bruce M. Boogaard, Agency Attorney; and Beverly A. Authelet, City Clerk 2. APPROVAL OF MINUTES: October 17, 1995 MSC (Alevy/Padilla) to approve the minutes of October 17, 1995 as presented, approved 404 with Herton absent. BUSINESS 3. REPORT DE1HOLITION OF STRUCTURES AT 760 BROADWAY TO ACCOMMODATE THE BROADWAY BUSlNESS HOMES PROJECT-On 6/27/95 the Agency accepted bids end awarded a demolition contract for the buildings on the former Fuller Ford dealership site at 760 Broadway. The Agency stipulated the structures not be demolished until all conditions of sale had been satisfied and escrow closed. Maintaining the structures has become a problem due to repeated break-ins by homeless people, vendals, and thieves. The purpose of this report is to discuss the pros and cons for demolishing the structures prior to the close of escrow. Staff recommends the Agency authorize demolition of the structures. (Community Development Director) Chris Salemone, Director of Community Development, stated staff was mindful of the Agency's dear direction that demolition be held until the close of escrow, but staff offered an option if the Agency wanted to consider it for reasons outlined in the staff report. · Josef Citron, 761 Golden Park, Sen Diego, CA, stated San Diego National Bank had given them a firm commitment for the construction of Phase I the amdunt of land necessary was approximately 20% of the total purchase of land. If they were required to pay the full purchase price for land which they were unable to use because the financing was set up for six units, it would result in a serious distortion of the finencing end the fiscal situation of the project, i.e. it created a hardship. The bank loan required that they put almost $500,000 in cash along side of the loen in order to do the project end the result was that there would be no profit in the project until the last building was built end sold of the thirty-six. Their commitment to the project had been proven as they had almost $300,000 in the project. The only calamity that could occur so the project would not move forward would beaction taken by the Agency. He requested that in order to get the demolition done at the present lime that they be allowed to pay for the demolition which was their original proposal. Member Moot stated felt the staff report end request by Mr. Citron were not compatible. Acting Chair Rindone felt when en applicant on a project had a request that it was important to see if eny member had en interest in desling with it. He felt the Agency needed to be responsive to the staff memo. He concurred that Mr. Citron's request was not identical with the staff report as staff had not recommended the demolition before the closing of escrow. The report had identified new issues such as: condition of the property, visual impact, homeless people, vandalism, end the question of the true value of the property if the project did not proceed. Minutes November 14, 1995 Page 2 Member Moot stated he did not have a problem with it if the developer set aside the money to fully compensate the City if they did not close escrow. He was prepared to agree to the staff alternative (item #6), but not as far ms Mr. Citron iequested. Member Alevy stated the building had been vandalized and the value diminished. He questioned if there was a liability to the City. Mr. Booguard stated he had helped to structure the staff alternative condition of taking a $295,000 deposit based on the depreciation of value and the cost of demolition as a form of an early payment that they would have to make anyway as soon as the escrow closed. He could support either of the two recommendations and staff could easily draft the $295,000 security deposit condition as an amendment to the DDA and have it back to the Agency for action. It was his understanding that the Citron's had consented to the staff recommendation. Mr. Salemone stated that the situation was different and the Citron's were offering to pay the demolition costs, $107,000, prior to the close of escrow in order to get the demolition underway. Member Padilia stated he was disturbe. d with the departure from the Agency's original direction and why it was brought back. What Mr. Citron was proposing was very different than the alternative proposed by staff. He questioned the wisdom of the Agency renegetinting at the present time or from the dais. He was inclined to accept the report and nothing further. His intent was not to be adverse to what Mr. Citron was trying to accomplish but to wisely enter into the agreement with appropriate security. Mr. Citron stated they understood that the Agency took unilateral action in asking them to put up $275,000, but they did not ac.~pt that or approve it. Therefore, he was not trying to renege on anything or change it, he was trying to fred out if it was the only way they could move forward. He again questioned what risk they were being asked to take beyond their control to lose $600,000. If he could understand those risks maybe they could move forward. Mr. Booguard stated the matter had been negotiated at great length between Mr. Salemone, Mr. Googins, and. Mr. Citron and he did not feel it appropriate to enter into a rhetorical discussion. Staff had identified the risks as being the loss and value of the buildings, the escrow would not close due to a bank loan or contamination of the property, and the City was at risk once the building was demolished because it would not be a saleable site for automotive purposes. All of which had been discussed with the Citrons. Mr. Citron stated if that was the only way the Agency felt the project could move forward they wanted the opportunity to go forward. They would agree as long as there was not a danger that they would lose all their money through some action beyond th(ff control. Acting Chair Rindone stated if no action was taken by the Agency the project would move forward upon closure of escrow. Member Moot stated he wanted to offer the applicant the option of taking advantage of an agreement draft~l by the City Attorney, consistent with paragraph 6 on page 3-3 of the staff report. He felt the Agency would agn~ that they would not take any action until the close of escrow to quell the deal. If they wanted to take advantage of the deal it should be drafted and brought back to the Agency for approval. Mr. Booguard stated it would expe~lite moving the project forward if the Agency would authoriz~ the City Manager and City Attorney to approve an amendment that would allow for that condition and provide an informational memo to the Agency, i.e. the $295,000 be advanced to the City as a security deposit which would be forfeited if the escrow for any reason did not close other than default by the City under the original DDA. MSC (Rindone/A!evy) authorize the City Manager and City Attorney to approve an amendment that would allow: that the $295,000 be advanced to the City as a security deposit which would be forfeited if the escrow Minutes November 14, 1995 Page 3 for any reason did not dose other than default by the City under the original DDA with an informational me~no to the Agency. Approved 401 with Horton absent. Mr. Boogaard stated it would be with the understanding that the existing contract would govern unless the Citron's l~ndered such an offer to the City. ORAL COMMUNICATIONS None OTHER BUSINESS 4. DIRECTOR'S REPORT(S) - None 5. CHAIR'S REPORT(S) - None 6. MEMBER COMMENTS - None ADJOURNMENT ADJOURNMENT AT 11:17 P.M. to the Regular Redevelopment Agency Meeting on November 21, 1995 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk Vieki C. SodeTquist7 CMeT~uty City Clerk