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HomeMy WebLinkAboutrda min 1993/08/03 CC MINLrFES OF A SPECIAL JOINT MEETING OF THE REDEVELOPMENT AGENCY/ CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, August 3, 1993 Council Chambers 5:37 p.m. Public Services Building CALL TO ORDER 1. ROLL GALL: PRESENT: Agency/Council Members Horton, Fox, Moore (left meeting at 7:35 p.m.), Rindone, and Chairman/Mayor Nader ALSO PRESENT: Jim Thomson, Deputy City Manager; Bruce M. Boogaard, Agency General Counsel/City Attoruey; and Berlin D. Bosworth, Secretary to the Redevelopment Agency 2. APPROVAL OF MINIYI~S: ,July 13, 1993 MSUC (Moore/Rindone) to approve minutes of July 13, 1993 as presented. CONSENT CALENDAR None submitted. 3. ~rRFI-I'EN COMMUNICATIONS: None * * END OF CONSENT CALENDAR * * PUBLIC HEARINGS None submitted. ORAL COMMUNICATIONS None. ACTION YFEMS 4. REPORT STATUS OF MIDBAYFRONT NEGOTIATIONS -- At the City Council's direction, staff has been negotiating with the Midbayfront developer, William Barkett, concerning City/Agency Financial participation in the project and the developer's contribution towards development of a cultural arts center. Minutes August 3, 1993 Page 2 Negotiations have been concluded with the parties in general agreement on most issues, but in disagreement on several major issues concerning terms and formula for revenue reimbursement, and total mount of revenue to be rehnbursed. Staff recommends the Agency accept the report and approve staff recommendations. (Community Development Director/Director of Finance) (continued from the meetinK9~ July 20, 1993) Chris Salomone, Community Development Director, presented a brief overview of specific items of difference between City staffand the developer, Bill Barkett. He explained the objective was for an informal discussion and direction to staff by the Agency to continue negotiations with Mr. Barkett. Member/Councilwoman Hortun stated she had discussions with City staff and the developer over the past several weeks and was under the impression the two parties had arrived at a tentative agreement, now staff had stated there was an impasse in the negotiations. Mr. Salomone believed agreement on most issues had been reached; however, the developer indicated he could not agree with the funding regarding the cultural arts facility and the Nature Interpretive Center. Staff and the developer had always been in disagreement on the revenue reimbursement, both the formula for revenue reimbursement and the length of time for the revenue reimbursement to be in effect. Member/Councilwoman responded the developer, in their conversation, had agreed to the cultural arts and Nature Interpretive Center issues. She asked why there was now a problem. Mr. Barkett, Chula Vista Investors, 864 Prospect, La Jolla, CA, land owner and developer of the project, replied he had agreed to a $35,000/year assessment for the Nature Interpretive Center. He believed that was the extent of his total assessment in the assessment district. After his attorneys read the document their interpretation was there would be an assessment district and a $35,000/year assessment guarantee for admissions. After he talked with staff, he confirmed that was, in fact, what staffmeant; however, it was not his understanding nor did he agree to it. Member/Councilwoman Horton asked if staff was in agreement with Mr. Barkert's statement. Mr. Salomone said staff was adamant on the Nature Interpretive Center funding as it was a condition of the Local Coastal Plan Amendment and it was a condition of the City Council. There was a genuine misunderstanding. Staff believed the $35,000 could be a means to allay the assessment against the developer, but staff had always been clear that funding the Nature Interpretive Center operation was a condition. Member/Councilwoman Horton inquired abont the possibility of additional funding from the Port District. Mr. Salomone noted Port negotiations were on-going and had not been resolved; however, it was not "on the table" with the Port at the present time. The Port had completed an appraisal and had received an Executive Summary and they expected the report to be delivered to them within a week to ten days. Chairman/Mayor Nader asked why the item was not scheduled for closed session. Agency General Counsel/City Attorney Boogaard, informed members he could not find a basis for discussing the item in closed session. Minutes August 3, 1993 Page 3 Chairman/Mayor Nader stated a discussion on the lack of basis would have to be discussed at some other time. Mr. Barkett said the negotiations continued to be friendly, not in the least adversarial. The funding mechanism for the Nature Interpretive Center had been a requirement of the Local Coastal Plan for a number of years, well before he had agreed to put in lagoons, 60 acres of parks, underground parking, enltural arts center, and such. Additionally, the Local Coastal Plan did not only apply to the Midbayfront, it applied to most of the Bayfront including Rohr's new building which no one seemed to want to touch as Rohr was having their own problems. He stated that was the basis for his accepting the $3S,000/year guarantee for admissions as his portion of the assessment. It was his understanding that agreement had been reached that he would give the City $10 million. If the City wanted to use all or a portion of that money to fund the Nature Interpretive Center, or, all or a portion for the cultural arts facility, that was the City's choice. The City now wanted to take out the multi-purpose sports facility including the ice skating rink as it would cost $22 million. That bothered him, that it was even a suggestion after he had spent millions of dollars in getting the project approved by the Coastal Commission. Member/Councilman Rindone understood assumptions had been made, incorrectly. While there may have been discussions between staff and the developer, staff and some members of the Agency/ Council, and some Agency/Councilmembers and the developer on the subject, there had been no meeting of the Agency/Council as a whole to reflect on the latest provisions of the negotiations. He emphatically did not agree there were only three major issues remaining to be resolved. When the item came before the Agency/Council at the duly 20, 1993 meeting he had made extensive notes on the report but neither the material nor his notes were included with the agenda packet. He asked staff to retrieve and return those materials to him as he had thoughts on other areas he was deeply concerned with in addition to retention of the multi-purpose sports facility/ice skating rink in the project. He pointed out the Bayfront Planning Subcommittee, as well as the Agency/Council, made it very clear there was only one thing that would make the project "a go" was to provide community-serving amenities. He did not agree the ice skating rink would be eliminated, that was one of the two amenities be felt worth fighting for to see the project built. The commitment of the Agency/Council and expectations in the community were to provide those unique facilities that were not available elsewhere. He acknowledged Mr. Barkert had spent hundreds of thousands of dollars to review that option-which was the direction of Council. Council has not removed the multi- purpose sports facility/ice skating rink as a direction to be in the project. Staff may have assumed Agency/Council had removed that as a direction, but until three votes remove it, it was not removed by staff. Member/Councilwoman Horton noted the Midbayfront Planning Subcommittee had deemed the ice skating rink an option in the project. Chairman/Mayor Nader agreed and pointed out the Local Coastal Program (LCP) Amendment, if it reflected Council action, would note the ice rink was part of the LCP, but with the understanding it could be removed to make the project economical/y feasible. Member/Councilman Rindone asked that the minutes of the Council meeting be provided. Mr. Salomone clarified, the ice skating rink was a very important part of the project. Council, in their February 4, 1992 meeting (Resolution 16467), made the ice skating rink a condition of the project that enabled the developer to consider it a public amenity and create a case for bond assistance or a rationale for revenue reimbursement of an additional $22 million. The developer had maintained, all along, he would built the multi-purpose sports facility. Staff was asking it not be made a condition if Mr. Barkett was going to binld it, and therefore have it be part of a rationale of it being considered a public amenity the City would have to help fund. Mr. Barkett wanted it in the project, and staff wanted it in the project, but staff did not Minutes August 3, 1993 !Page 4 want it to be a condition rationalized under Redevelopment Law as a public amenity the Agency would have to help f'mance. Member/Councilman Fox wanted a commitment for the building of the multi-purpose sports facility/ice skating rink so it could not be negotiated out of the project. He strongly urged negotiations to go forward with the inclusion of the multi-purpose sports fadlity/ice skating rink. Member/Cotmcilman Rindone inquired how the Agency wanted to proceed in the discussion. Member/Councilman Fox asked why two of the options on page 4-8 exceeded the bounds of reasonable agreement. Lyman Christopher, Director of Finance, noted the Council previously linked the public amenities to the revenue reimbursement issue. The Council had implied should staff come up with a total public amenities cost, Council would be willing to consider a revenue reimbursement of a similar amount with the developer. Exhibit A, page 4-25, of the staff report listed a summary of the development costs of the various amenities in the project. They totaled approximately $43 million. When the cost of the multi-purpose sports facility was deducted out, there would be an investment in public amenities of between $20 million and $25 million. Linking that figure to the revenue reimbursement, staff created a revenue reimbursement structure that would result in a similar amount being reimbursed to the developer over a period of time. That was the rationale as to how staff arrived at the approximately $25 million revenue reimbursement which would go to the developer. Under the proposed option of the City, the developer would have a revenue reimbursement for 15 years and would result, in the City's projection, in about $21 million with a proposed cap of $25 million. Under Option 1, the term would be extended to 25 years and the developer would receive, according to the City's projections, approximately $31 million. Under Option 2, with a period of 21 years, with a different revenue reimbursement formula, the developer would receive approximately $36 million. Agency General Counsel/City Attorney Boogaard informed the Agency he had a discussion with Mr. Barkett in light of the prospective impasse on these issues. He inquired if Mr. Barkett would be willing to entertain good faith negotiations, given the ability of the City to put together financing, for the acquisition of the project. Mr. Barkett indicated, and was prepared to indicate for the record, he would entertain good faith negotiations. Mr. Barkett replied in the affirmative. Agency General Counsel/City Attorney Boogaard stated given the prospect for acquisition, the Agency was authorized to give instructions to negotiators for acquisition in lieu of the prior authority which was to reach a Development Agreement. Instructions could be done in closed session. Chairman/Mayor Nader asked what other issues the Agency members wished to discuss based upon the staff report or the Development Agreement. Member/Councilman Rindone requested staff research the records from the last meeting as he had several notes written on his agenda packet and would like them returned to him. Chairman/Mayor Nader asked staff to retrieve the Minutes of the January 14, 1992 and the February 4, 1992 meetings. The Redevelopment Agency/City Council adjourned to Close Session at 5:59 p.m. and reconvened at 7:02 p.m. Minutes August 3, 1993 Page $ Chairman/Mayor Nader asked staffs recommendation as it pertained to the Nature Interpretive Center. Mr. Salomone replied staff recommended the project fully fund the operations of the Nature Interpretive Center through a benefit assessment district or by some other funding source (Item IV, page 4-5 of staff report). MOTION: (Fox/Nader) Approve staff reconunendation to negotiate with Mr. Barkett for inclusion in an assessment district, but not at the exclusion of other funding sources, to fund the Nature Interpretive Center operating costs. Agency General CounseL/City Attorney Boogaard wanted it understood the instruction to staff pertained to the Development Agreement by which the developer, hhnself, concurred in the benefit assessment district. That was, instead of ordering an assessment district that would provide for only an assessment against developer's project, Council was instructing staff to negotiate with Mr. Barketfs to get his concurrence in an agreement by which he would be waiving any defenses he would have to a benefit assessment disu~ict. Mr. Matt Peterson, Esq., of the Law Firm of Peterson and Price, representing Chnla Vista Investors, stated part of the concern on behalf of Mr. Barkett's interest was the formation of an assessment district which would only include one property, that being Mr. Barkett's. To the extent there would be other benefiting properties throughout the City, one of the reqnlrements wonld be that they participate in the assessment district, for example, Bohr, Inc. It was his belief Mr. Barkett was prepared to enter into discussions about the formation of an assessment district to fund the Nature Interpretive Center. What would still be open for negotiation would be the question of who ail would participate in that assessment district. Chairman/Mayor Nader thought that could be open for negotiation based upon the motion on the floor. He asked staff if the current LCP mandated an assessment district on the project to pay for the operating cost of the NIC. Mr. Salomone responded in the affirmative. Chairman/Mayor Nader asked if the requirement was in the LCP when Mr. Barkett purchased the property. Mr. Salomone replied in the affirmative. Mr. Barkett pointed out the point his advisors were making was his proper~y was not the only one the LCP covered, the LCP covered other properties as well. Chairman/Mayor Nader asked staff what other properties were included in the LCP as part of the benefit assessment district for the NIC. Mr. Salomone responded the LCP did not specifically talk to which properties would be induded other than Mr. Barkett's. The LCP Amendment, which was adopted relating primarily to the project, simply said a benefit assessment district would be formed or some other funding source conld be established to pay for the on-going operations of the NIC. It was staffs recommendation the benefit assessment dislxict cover Mr. BarkeWs property only and not spread to the adjacent properties. Member/Councilman Moore inquired if the Bohr property was included as part of the Bayfront property for purposes of the LCP Amendment. Mr. Salomone noted the LCP covered the entire Bayfront area, but the condition that an assessment district be formed was not specific to any of those properties. It was staffs recommendation the assessment district cover Mr. Barkett's project only. Minutes August 3, 1993 Page 6 Member/Councilman Moore asked about the other funding source staff was recommending. Mr. Salomone pointed out Mr. Barker had proposed funding an endowment that would cover the on-going operations of the N1C. Mr. Barkett said he understood the current amount of his participation being discussed was up to $500,000 yearly. He understood and accepted the fact a substantial portion would be on the Bayfront; but he wanted a limit on the dollar amount. Chairman/Mayor Nader stated he had not heard any discussion as to what the amount or the formula would be for the City assessment. He asked staff if they were prepared to make a recommendation or seek direction in that regard. Mr. Salomone noted the LCP had conditioned that particular item and was to assure the City of the financing of the maintenance, improvement, and continued operation of the NIC. Currently, the dollar ~tmount was $450,000. By the time the project was able to form an assessment district and began ftmding the NIC, staff had assumed the figure to be in the neighborhood of $500,000. Staff wanted a reasonable escalator clause that would allow it to assume the normal increases in those operations based t~pon the $500,000 baseline figure. Chairman/Mayor Nader asked what staff meant by a reasonable escalator clause. He thought a benefit assessment district created a formula tied to the value, or the revenue stream, or something of that nature of the development being assessed as opposed to a formula with an escalator tied to the increased cost of the thing being assessed in order to operate. He wanted to know if staff meant the escalator would be tied to expected costs of operating the NIC. Mr. Salomone responded that was correct. Chairman/Mayor Nader stated he was not sure he wanted to be tied too closely to the formula where the assessment district was based on operating costs of the NIC. The working assumption, whether reflected in the current LCP or not, was the project would be under an assessment district which would be intended to pay for operations of the NIC. He thought implicit in that assumption was that an assessment would be tied to the value of development or the revenue produced by the development or something related to the benefit of the developer of building and/or operating the project. The formula should be tied to the value of the development being assessed. Member/Cotmcilman Moore thought a CPI clause should be put in. Member/Councilman Fox said he agreed to Member/Councilman Moore's recommendation with the concurrence of the second to the motion. Chairman/Mayor Nader concurred. AMENDMENT TO MOT/ON: (Fox/Nader) Approve staff recommendation to negotiate with Mr. Barkett for indusion in an assessment district, but not at the exclusion of some other funding source, and to negotiate a cap-which could be tied to the CPI-on the escalator dause for Nature Interpretive C. ente~ operating costs. Deputy City Manager Thomson requested policy clarification relative to the loans that both the City General Fund and the Redevelopment Agency had made to the Bayfront Conservancy Trust which were in the range of $2.2 million. He explained the concern staff had once an assessment district was formed, it may be a number of ycars before it was fully functioning and the development built out enough to actually cover the I Minutes · August 3, 1993 Page 7 cost even under the concept Council was proposing. The City Manager's Office was concerned about trying to maintain the flexibiliW to recoup ail of the loans from the City and/or Agency to the Bayfront Conservancy Trust after the formation of the assessment district but before it was fully funded. He asked if Council would be in concurrence with that objective. Mr. Barkett pointed out ail the assessments on the project would mean that every tenant within his project would be required to pay more and, at present, the real estate market was not all that good. The assessment district had become an anchor on the project; for four years he had heard about the unfeasibiliW of the project and more and more economic bttrdens were being placed on the project. He said he was looking for a total agreement which would include the Cultural Arts Center. He believed the question was how much would his project be obligated for. Member/Councilman Fox shared his observations and acknowledged Mr. Barkett's position. He noted Council had made certain commitments as they related to the amenities in the project and staff had come up with a plan to get those amenities. He explained he did not believe Mr. Barkett's position ailowed for meeting the objectives set by Council. Mr. Barkett informed the Agency/Council that as the project had been approved by the California Coastal Commission he had been approached by other cities in California to do a similar project. He stated he honestly believed he could finance the project. He said he did not want to build a project in any city and have to fight every inch of the way. He wanted cooperation and to move forward with arriving at an agreement. If the requirements put on the project were too onerous he would then have to decide whether to build or not build. VOTE ON MOTION AS AMENDED: Approved u~animously. Chairman/Mayor Nader noted minutes from the Cultarai Arts Commission dealt with the Cultural Arts Center and while the minutes did not indicate an actuai motion or vote, the minutes did indicate discussion involving Commissioners' concerns. He issued a friendly admonition, when a commission wished to convey a position to the Council a motion and vote would be helpful and preferable. Member/CotmcLlman Kindone stated he did not understand how the proposai to build an amphitheater surfaced as no direction came from Council to have an interim amphitheater. He had major concern expressed to him by various individuals that if the interim amphitheater was built it might tend to become a permanent facility and the Culturai Arts Center, as envisioned, would never become a reaiity. He did not want the condition put on the developer and was not in favor of having an interim amphitheater built. Member/Councilman Moore asked if the amphitheater was part of the original plan or an add on. Mr. Salomone replied the amphitheater was a new item coming before Council. However, there had been some discussion relating to an alternative facility that, perhaps, could be considered in place of the Ice Skating Kink and, in the aiternative, a park or other recreational facility. In that discussion an amphitheater was mentioned in passing. Staff wanted the Ice Skating Rink. The proposed amphitheater was a creative solution to provide a venue to do fund raising for the Culturai Arts Center. Mayor/Chairman Nader said it was his recollection there was to be a smail amphitheater in the core area. Mr. Salomone indicated the area was where steps cascaded down to the lagoon. It was not an amphitheater per se, but an area which could be used where people could brown-bag lunch and musicians could perform. Minntes August 3, 1993 Page 8 Mayor/Chairman Nader indicated his concern was that the proposed amphitheater could delay the Cultural Arts Center. It seemed to be duplicative of another portion of the project in terms of its design and function, and by making those a part of the developer's fmancial contribution to the Cultural Arts Center they would be reducing the funding available for the Center. Mr. Salomone stated those concerns were discussed and an alternative was to obligate more of the $10 million to the fund raising effort. Staffs rationale was to create a venue west of Marina Parkway where people would become accustomed to going, which would be near where the Cultural Arts Center would be located, and ultimately having both facilities in the project. Member/Councilman Moore asked whether raising hinds wouid or would not be enhanced with the building of an amphitheater. Member/Councilman Rindone stated he was not in favor of the amphitheater. He pointed out on page 4-3, under Sports Facilities, staff stated that if agreed to by the City and developer, a Sport~ Facility would be constructed during Phase 1 and the developer was to make the Sports Arena or amphitheater at City's discretion available to the City, rent free, for a minimum of six cultural arts activities per year. He pointed out the City would have an option to raise funds through the use of the facility which was an amenity earnestly suggested from the beginning of the process to development the Midbayfront project. MOTION: (Rindone/Fox) delete, from this point forward, any planning for an amphitheater v~thln the project. Member/Councilwoman Horton asked staff to describe what they meant by a sports arena as it pertained ,to its size and type of facility, and what cmdd it be compared with. Mr. Salomone noted the condition stated it would be a 5000-seat capacity ice rink of such design that met with the satisfaction of the City Council and wonld be 62,000 sqnare feet. Member/Councilman Rindone pointed out the Sports Arena in downtown San Diego, near Rosecrans, was an ll,500-seat facility, so in terms of seating capacity it would be about one-half that size. Mr. Barkett said he would like to include a sports arena/ice skating rink in the plan. He thought there would be more than one ice skating rink, one of which would have between 3000 and 3500 seats around it. Member/Councilwoman Horton asked if the facility would be multi-use. Mr. Barkett replied the facility was planned as a multi-use facility and would be designed so a floor could be placed over the ice for basketball, indoor tennis, concerts, and other similar events. Member/Councilwoman Horton asked Mr. Barkett his thoughts relative to the proposed amphitheater. Mr. Barkett stated he had no thoughts about it one way or the other, only that he wanted to get the Cultural Arts Center settled so the project could go forward. He wanted it noted the area around the lagoon where steps cascaded down was not an area where people would pay for entertainment. It was an area where musicians or street artists could perform. Member/Councilman Fox supported the motion as he preferred to have the multipurpose sports facility in ~le project. Minutes August 3, 1993 Page 9 Mr. Fred Pierce, Price Waterhouse, f'mancial advisers to Chula Vista Investors, cited page 4-25 of the staff report, relative to the Sports Facility which detailed the extraordinary costs associated with the project and the fact the Sports Fadlity, with associated parking, was a fairy expensive item. In suggesting a revenue reimbursement formula, which was a subject to still be discussed, the Sports Arena was left out because of its significant cost and therefore staff was trying to present an alternative which had a more compressed period and a lower sharing formula. Should the Sports Facility be placed back in the project, then perhaps the period for reimbursement would need to be extended to help recoup those costs should it be included in the project. Member/Councilman Fox asked if Mr. Barkert's position was to negotiate either the multipurpose Sports Facility or the proposed amphitheater and by mutual consent agree on one or the other. Mr. Pierce said yes, as financial adviser to Mr. Barkett, their counsel had been--as it related to the N1C and what portion of burden of that was layered on the project, the Cultural Arts Center and the required funding for that, and the Sports Complex were all items which produced extraordinary costs to the project which need, should all be layered onto the project, then a formula for revenue reimbursement should be developed to help solve those Fmancial issues. Chairman/Mayor Nader asked if the $20 million shown on page 4-25 for the multipurpose Sports Facility was a cost the developer and was an investment for him whereby he would make money off it, was it then a burden on the project. Mr. Pierce said it was both. The "value" column indicted a capitalized income stream which would be generated by the Sports Facility of approximately $2 million, or $200,000 yearly in net income. Chairman/Mayor Nader asked if the document was saying there was a net capitalized cost of $18 million to the facility. /',ar Pierce replied that was correct. Chairman/Mayor Nader noted if the Sports Facility was not built and added to that the developer's reasonable contribution toward the Cultural Arts Center, then three-fourths of the fund for the Cultural Arts Center would be in-hand. Mr. Pierce pointed out Mr. Barkett would then have a big hole in the middle of his project. Mr. Salomone stated the rationale Mr. Pierce presented was just that, a rationale. Those were development conditions and there was no obligation to share revenue. Dency Souval, 698 Gilbert Place, Chula Vista, CA 91910, a member of the Cultural Arts Commission, stated the Commission did not support inclusion of the proposed interim amphitheater. Chairman/Mayor Nader asked what she thought of not doing tlie Sports Facility and applying that money toward the Cultural Arts Center. Ms. Souval, answering for herself only, thought that was a possibility. Member/Councilman Rindone pointed out if the Sports Facility was eliminated, then a source for generating funding revenue for the Cultural Arts Center would not be available. He emphasized the point there were two "sacred cows" in the project, one being the Cultural Arts Center and the other the multipurpose Sports Facility/Ice Skating Rink. Those two components of the project were very well received in the community Minutes August 3, 1993 ~age 10 and would provide a good cross-cultural attraction to the project area. The proposed amphitheater would seem to do nothing but take up additional land, additional costs, and perhaps ulthnately, would remain in place of the Cultural Arts Center. He suggested continuing negotiations for both items to make the project very attractive. Ms. Souval agreed with Member/Councilman Rindone's remarks and stated she thought the Commission agreed as well. Chairman/Mayor Nader stated the Ice Skating Rink was not a sacred cow in the project; a park would be an acceptable alternative land use. The Agency may want to make a policy decision to not have the Sports Facility/Ice Skating Rink a part of the project and instead take those funds and apply them toward the Cultural Arts Center. He asked what, precisely, was meant when reference was made to the Sports Facility. Mr. Barker responded the Sports Facility was a multipurpose sports facility which included an ice skating fink, but did not include the tennis facility which was a separate component of the project. He also pointed out the lenders would not allow him to not build something like the Sports Facility/Ice Skating Rink in the project and instead just give that money toward the Cultural Arts Center Fund. It would be something he would not own nor would it have any value or be collateral to a lender. He stated if he did not build a multipurpose facility it would not mean he could take the money "saved" and automatically credit it to another category, the Cultural Arts Center. Member/Councilman Fox asked if there was additional rationale for the elimination of the proposed amphitheater. Member/Councilman Rindone pointed out that both the amphitheater and the Sports Facility/Ice Skating Rink would not be built. Understanding that, the project would need a revenue stream, an appeal for the loan, and the developer seemed to prefer the option and availability the Sports Facility/Ice Skating Rink would offer for obtaining funding but more importantly as a potential revenue stream as the amphitheater did not provide the amenity or revenue sonrce. Chairman/Mayor Nader said staff might want to negotiate with the developer that if there was extraordinary developer contribution to the Cultural Arts Center, beyond what staff had been discussing thus far, some of that could be in the form of loans that could be repaid, in part, from revenue from the Cultural Arts Center uses including the for-profit uses allowed. Mr. Barkett suggested a potential compromise. He was willing to donate a total of $10 million toward support of the Nature Center and Cultural Arts Center as well as the land for the Cultural Arts Center. He was willing to accept $25 million in revenue reimbursement if he did not build the Sports Facility/Ice Skating Rink, if he did build the Sports Facility/Ice Skating Rink he would expect to receive $40 million in revenue reimbursement. He would donate $10 million to the City to divide, however they chose, between the Nature Center and the Cultural Arts Center. Member/Councilman Fox asked what the timeline was for the $25 million revenue reimbursement. Mr. Barkett replied it would be over a 19-year period which would start in the fifth year. He wanted to build the Sports Faciliw/Ice Skating Rink and would make every effort to build it. SUBS-I'tI'IJTE MOTION: (Nader/Fox) (Part 1) not necessarily direct deletion of the amphitheater at this ~int. but direct staff to analyze whether construction and operation of amphitheater or banking the money ~ would consume would be a more effective way in the long term of raising money toward the construction and operation of cultural arts complex; [Part 2] direct staff to examine and make a reeommendatinn back · Minutes · August 3, 1993 Page 11 whether the cost of the sports facility/ice fink could be, in part, instead be put towards construction of the cultural arts complex and subsichaxy to that, whether the developer's contribution in that form could be partially offset by a pledge of some revenues from the atudliacy uses to the cultural arts complex; and [Part 3] direct staffto explore and return to the Agency with a recommendation on the proposal Mr. Barkett just made (look at a u-ade-offin mount of revenue reimbursement, for the sports facility, and that that could be used to incenfivise successful consU-action and operation of the cultural arts center). Member/Councilman Fox indicated a desire to hear from Mr. Barkett regarding the motion. Mr. Barkett stated negotiations had come to an impasse and staff and he were seeking guidance from the Agency/Council. He was seeking direct guidance that would help move negotiations along. Chairman/Mayor Nader stated, in his view, the Cultural Arts Center was a top priority of the project and staff and the developer should move toward making th/e Cultural Arts Center a reality. He asked if staff or a consultant had performed a cost/benefit analysis of the multipurpose Sports Facility/Ice Skating Rink. Member/Councilman Rindone noted all Agency/Couucilmembers would rate the Cultural Arts Center the top priority of the project. He pointed out the Sports Facility/Ice Skating Rink would have an attraction to and would be of enormous benefit to fund raising activities for the Cultural Arts Center and the amphitheater complicates the project and will not be an ingredient that will make the project work or be of benefit to the Cultural Arts Center· VOTE ON $[JBb-I'ITD'TE MOTION: Failed: 1-3-1, with Rindone, Fox, and Horton opposed; Moore absent. SUBSTITUTE MOTION: (Fox), move for staff recommendation as appears on page 4-3, Item C, of the staff report, which is to direct staff to negotiate with the developer to make the sports arena or amphitheater a reality, deleting the works *at City's discretionH and replace with Hby mutual consent.~ Motion failed for lack of second. Chairman/Mayor Nader wanted to know the rationale for deleting the amphitheater rather than have staff do a cost/benefit analysis to determine whether with or without the amphitheater the City/Agency would ultimately have more revenue to pledge toward the Cultural Arts Center. Member/Councilman Rindone stated it was his belief the motion before the Agency/Council would advance the possibility of the project becoming a reality. It would enhance the project as it would provide an amenity that would be revenue-producing, and would also provide an attraction to the project and benefit the other components that were in the project. It was not necessarily true that both the amphitheater and the Sports Facility/Ice Skating Rink would be built. Deletion of the amphitheater from further consideration within the project would help ensure that the Sports Facility/Ice Skating Rink would be built. Chairman/Mayor Nader asked staff if a cost/benefit analysis was done of building the amphitheater and trying to use it as a fund raiser versus banking the money the amphitheater would cost. Mr. Pierce responded to the question noting he had done a study of a proposed 2000-seat amphitheater and detetvained that an amphitheater could generate approximately 50 events per year with an average attendance of 1000 per event which would generate an attendance annually of 50,000. With an assumed $2.00 surcharge of each of those attendees that generated approximately $100,000 yearly that would go back into the Fund for the Cultural Arts Center. it would take 20 years to just make the revenue back that the amphitheater would cost to build. Chairman/Mayor Nader asked staff if they agreed with that analysis. Minutes August 3, 1993 Page 12 ? Mr. Salomone said staff considered that the Sports Facility/Ice Skating Rink would be a part of the project and would be a venue to raise funds for the Cultural Arts Center. Staff could not say if they agreed with the analysis. VOTE ON ORIGINAL MOTION: Passed, 4~0-1, with Moore absent. Chairman/Councilman Fox pointed out there was a nexus with the Sports Fadlity/Ice Skating Rink. Staff was convinced it was going to be in the project, and one way for him to be convinced was to give the developer an economic incentive to build the Sports Faciliw/Ice Skating Rink. He wanted to know where the $25 million figure in 19 years came from as he understood it to be $20 million in 19 years. Mr. Barkett replied the $20 million in 19 years was correct but should the project be more successful within that timeframe it would be allowed to go up to $25 million. Mr. Christopher said Mr. Barkett was correct with his statement. If the project was more successful than anticipated staff wanted to cap the top amount Mr. Barkett could realize at $2S million. Mr. Barkett stated he did not particularly agree with the cap since he was fronting all the money to build the project. MOTION: (Fox/Horton) Staff be directed to analyze and return to the Agency on the implications that there be a nexus between building the multi-propose Sports Facility/Ice Skating Rink(s), building it sooner, and providing the incentives to do it ff it is done along the lines of the $25 million ff it is not done, and the $40 million figure should the Sports Facility be built in early in Phase 1, and return to the Agency with a report ,in a timely fashion. Member/Councilman Rindone asked what the motion accomplished that the negotiators had not attempted to do. Member/Councilman Fox replied it was specifically meant to look at giving an incentive to build the Sports Facility/Ice Skating Rink in a timely fashion and to provide direction on types of revenue reimbursement schemes the City/Agency might provide which was in between the amounts of $25 million and $40 million. Member/Councilman Rindone stated he woald like to see the Sports Facility/Ice Skating Rink built in Phase 1 and to see a Financial plan to ensure that took place. What he did not want to do was attach any numbers to that until he saw what staff recommended. Member/Councilman Fox said those numbers were thrown out as an example, they were not written in stone, Member/Councilman Rindone felt that mentioning the $40 million figure was misleading to the applicant to believe that was even within the realm of being rebated through the revenue reimbursement formula. He wanted to ensure that the members were voting on the multi-purpose Sports Facility/Ice Skating Rink in the first phase. The financial plan would ensure that would be accomplished and there may need to be some sort of public commitment, revenue reimbursement on the part of the City, to ensure that would be done. Member/Councilmember Fox stated the intent of the motion, if agreeable with the second, was not aecessarily to give numbers to staff and the applicant, but to provide, as an example, that there could be home benefit to the applicant of having the multi-purpose Sports Facility/Ice Skating Rink built, and built in a timely fashion. He agreed the example of some of the numbers was excessive. Minutes August 3, 1993 Page 13 Member/Councilwoman Horton stated that was how she understood the motion. Chairman/Mayor Nader asked if staff had a clear understanding of that motion. Mr. Salomone replied staff understood the motion. Chairman/Mayor Nader felt the motion placed the Sports Fadlity/Ice Skating Rink as the top priority. AMENDMENT TO MOTION: (Nader/Rindone) Direct staff to include in the analysis, contribution toward the cultural arts complex as a factor in determining the revenue reimbursement arrangement, if any, with tile developer and to further direct staff that of the amenities which are um'e~olved for which we are negotiating that the Cultural Arts Center is the top priority. VOTE ON AMENDMENT TO MOTION: Failed 2-2-1, with Fox and Horton opposed; Moore absent. VOTE ON ORIGINAL MOTION: Passed 3-1-1, with Nadar opposed; Moore absent. 5. COUNCIL/ AGENCY REPORT FUTURE ROLE OFTHE MONTGOMERY PLANNING COMMIITI~,AND THE POSSIBLE MERGER OF THE MPC WITH THE SOUTHWEST PROJECT AREA COI~IVIfi-i'P2[~ PURSUANT TO OtULA VISTA ECONOMIC DEVELOPMENT COMMISSION (EDC) PERMIT STREAMLINING RECOMMENDATION #17 -- The Chula Vista EDC established a subcommittee to develop recommendations to streamline the City's development review process to create a more "user friendly" environment for business development. One of the recommendations (#17) concerned the future role and function of the Montgomery Planning Committee and the possible merger of the MPC with the Southwest Project Area Committee. Staff recommends the Council/Agency discuss the alternatives presented in the report end provide additional direction to staff. (Community Development Director/Planning Director) (continued from the meeting of June 22~ 1992) MOTION: (Nader/Horton) Continue Item 5 to the next meeting, passed 4-0-1 with Moore absent. Member/Councilman Fox asked staff to include in the packet the Montgomery Position Papers prior to annexation. OTHER BUSINESS 6. DIRECTOR/CITY MANAGER'S REPORT None. 7. CHAIRMAN/MAYOR'S REPORT None. 8. MEMBERS/COUNCILMEMBERS' COMMENTS None. Minutes August 3, 1993 Page 14 The meeting adjourned at: 8:39 p.m. to the regular meefng of the Redevelopment Agency on Tuesday, August 17, 1993 at 6:00 p.m., immediately following the City Council meeting, Council Chambers, Public Services Building. Respectfully submitted, Berlin D. Bosworth Secretary to the Redevelopment Agency