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HomeMy WebLinkAboutrda min 1993/11/09 CC MINUTES OF A SPECIAL JOINT MEETING OF THE REDEVELOPMENT AGENCY/CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday. November 9. 1993 Council Chambers 10:14 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Council Members Horton, Fox, Moore, Rindone, and Chairman/Mayor Nader ALSO PRESENT: Sid Morris, Assistant City Manager; Bruce M. Boogaard, Agency General Counsel; Chris Salomone, Executive Secretary; and Berlin D. Bosworth, Secretary to the Redevelopment Agency 2. APPROVAL OF MINUTES: October 26, 1993 MSUC [Moore/Rindone] to approve the minutes of October 26, 1993 as presented. CONSENT CALENDAR (Item pulled: 4) BALANCE OF THE CONSENT CALENDAR OFFERED BY MEMBER RINDONE, reading of the text was waived, passed and approved unanimously. 3. WRITTEN COMMUNICATIONS: None Submitted. 4. AGENCY RESOLUTION 1363 AUTHORIZING THE EXECUTION OF A PURCHASE AND SALE AGREEMENT WITH IGNAZIO AND JEAN ADAMO FOR THE PURCHASE OF 459 F STREET AS PART OF THE CIVIC CENTER MASTER PLAN EXPANSION PROJECT--On 4/17/90, Council approved final recommendation for the Civic Center Master Plan. Phase I of the Plan required the acquisition of residential property at 459 F Street, located immediately west of the parking lot next to Fire Station 1. The site is located in the Town Centre II Redevelopment Project Area and is planned to ultimately be used for the construction of a three- level parking structure for visitors and staft'. Staff reconunends approval of the resolution. (Community Development Director) Pulled from the Consent Calendar 5. AGENCY RESOLUTION 1364 WAIVING THE COMPETITIVE Bll)DING PROCESS AND APPROVING CONTRACT WITH GEOCON ENVIRONMENTAL CONSULTANTS INC. FOR ENVIRONMENTAL ENGINEERING SERVICES AND AUTHORIZING THE EXECUTIVE DIRECTOR TO SIGN ON BEHALF OF THE AGENCY--On 4/21/89, the San Diego Regional Water Quality Control Board (RWQCB) issued Cleanup and Abatement Order Nnmber 89-38 to the City. This order and its amendments require the City to remove two paint pits from the Chula Vista Public Works Yard located at 707 F Street and to remediate the surrounding contaminated soil and groundwater. The two paint pits were removed in November 1990 and the contaminated soil cleaned up. However, the City is still required by the RWQCB Order to remediate the surrounding groundwater. In order to carry out this last action, more information is required on the subsurface conditions. The proposed contract will provide a modeling study of the Public Works Yard which will generate engineering data and an increased understanding of the subsurface physics at the site. The results will serve to assist in evaluating and choosing technology which will be the most eftEctive, in terms of timing and funding, in the completion of the mandated cleanup remediation work. Staff reconunends approval of the resolution. (Director of Public Works) * * END OF CONSENT CALENDAR * * ~ovemb~9'~ Page PUBLIC HEARINGS 6. AGENCY PUBLIC HEARING. TEMPORARY LOCATION OF FUNTASTIC SHOWS CARNIVAL ON THE NORTH SIDE OF THE SEARS BUILDING AT THE CHULA VISTA SHOPPING CENTER, NOVEMBER 11, 1993 THROUGH NOVEMBER 14, 1993--Funtastic Shows proposes to have a caraival at the Chula Vista Shopping Center which requires a Temporary Land Use Permit. Funtastic Shows Carnival is to take place in the northeast comer of the Chula Vista Center (in front of the Sears Store) on Thursday and Friday, November 11 and 12 from 3:00 p.m. to 10:00 p.m., and on Saturday and Sunday, November 13 and 14 from 12:00 noonto ll:00p.m. Staff recommands the Agency hold the public hearing and approve the resolution. (Commmlity Development Director) AGENCY RESOLUTION 1365 APPROVING A TEMPORARY LAND USE PERMIT FOR FUNTASTIC SHOWS CARNIVAL AT THE CHULA VISTA SHOPPING CENTER, NOVEMBER 11, 1993 THROUGH NOVEMBER 14, 1993 This being the time and place as advertised the public hearing was declared open. There being no public testimony, the public hearing was declared closed. Chairman/Mayor Nader asked if there were any complaints received from the public about last year's carnival. Community Development Director Salomone replied staff had not received any complaints; there had been complaints the previous year but not last year. RESOLUTION 1365 OI~'ERED BY MEMBER HORTON, reading of the text was waived, passed and approved unanimously. 7. JO/NT AGENCY/COUNCIL PUBLIC HEARING CONSIDER THE LEASE OF PROPERTY AT 603 PALOMAR STREET (APN-~622-041-20), CHULA VISTA TO AUGUSTINE REYES--The Amended Palomar Trolley Center Disposition and Development Agreement calls for the Agency to acquire parcels necessary for the development of the proposed shopping center and to convey those properties to the developer, Cypress Creek Company. The Agency adopted Resolution 1341 on 7/27/93 to condemn subject parcels but required that the existing tenant be allowed to remain on the premises for 12 months. The Agency will take possession in November 1993 and a lease has been prepared with the tenant to govern his tenancy during the remainder of the 12 months. Staff recommends the Council/Agency open the public hearing and continue the public hearing to November 23, 199:3. (Community Development Director) AGENCY RESOLUTION 1366 APPROVING THE LEASE OF REDEVELOPMENT AGENCY- OWNED PROPERTY (APN 622-041-20) TO AUGUSTINE REYES, FINDING THAT CONSIDERATION IS NOT LESS THAN FAIR MARKET VALUE, AND AUTHORIZING CHAIRMAN TO SIGN LEASE COUNCIL RESOLUTION 17299 APPROVING THE LEASE OF REDEVELOPMENT AGENCY- OWNED PROPERTY (APN 622-041-20), TO AUGUSTINE REYES AND FINDING THAT CONSIDERATION IS NOT LESS THAN FAIR MARKET VALUE This being the time and place as advertised the public hearing was declared open. MSUC [Nader/Fox] to continue public heating to the November 23, 1993 meeting, passed and approved unanimously. OP~L COMMUNICATIONS None. Minu~s November 9, 1993 Page 3 ACTION ITEMS 8. RESOLUTION 1367 DIRECTING STAFF TO FILE CONDEMNATION SUIT ON PALOMAR TROLLEY CENTER DISPOSITION AND DEVELOPMENT AGREEMENT PARCEL NUMBER 13--On 7/27/93 the Agency adopted a Resolution of Necessity for condemnation of Parcel 13, owned by the Japanese American Citizens League, at the comer of Broadway and Palomar Street which contains a 7-11 convenience store and the MLV Coin Laundry. The Agency directed staff and the developer to negotiate with the owner regarding possible lease to the developer rather than fe~ acquisition prior to filing a condemnation suit. Negotiations have occurred, and staff, the developer, and the Japanese American Citizens League are in concurrence that the Agency should proceed with the condenmation suit. Staff recommends approval of the resolution. (Community Development Director) Member/Council Member Moore asked if property owners agreed with the action being taken. Assistant Director of Conm~unity Development David Gnstafson responded they did. Chairman/Mayor asked if that would be considered what was called a friendly condemnation. Mr. Gustafson replied there was still a dispute regarding the value, but the parties were not contesting the fact of the condemnation; they were anxious to take the matter to the hearings that would determine the value. RESOLUTION 1365 OFFERED BY MEMBER FOX, reading of the text was waived, passed and approved unanimously. 9.A. AGENCY/COUNCIL REPORT STATUS OF MIDBAYFRONT NEGOTIATIONS--On August 3, 1993 staff presented the status of the Midbayfront negotiations to the Agency and discussed the two major issues for which concurrence with the developer had not been reached. The Agency directed staff to continue negotiations with rede£med parameters. Staff continued these negotiations Mr. William Barkett, landowner and developer, and his representatives have reached agreement on the remaining issues which are now being presented to the Agency for consideration. Staff recommends the Agency accept the report and approve the terms and conditions of financial participation by the City/Agency for inclusion within the Development Agreement. (Community Development Director) B. AGENCY RESOLUTION 1355 AUTHORIZING CONTINUED NEGOTIATIONS WITH THE MIDBAYFRONT DEVELOPER IN ACCORDANCE WITH APPROVED INSTRUCTIONS TO NEGOTIATORS--At its 9/7/93 meeting the Agency requested clarifications of certain aspects of the negotiations with the Midbayfront developer. Staff is requesting the Agency indicate its preference for terms and conditions of the Development Agreement and authorize staff to continue negotiations with the developer in accordance with approved Instructions to Negotiators which incorporate such preferred terms and conditions. Staff recommends approval of the resolution. (Community Development Director) C. AGENCY RESOLUTION 1356 AUTHORIZING THE PREPARATION OF AN AMENDMENT TO THE BAYFRONT REDEVELOPMENT PLAN AND APPROPRIATING FUNDS TItEREFOR -- A Redevelopment Plan Amendment is required to incorporate recently approved Local Coastal Plan, increase debt limitation, and extend the termination date of the Bayfront Project. An appropriation of funds is requested to pay for consulting services to complete this activity. Staff recommends approval of the resolution. (Community Development Director) Mr. Salomone made a brief overview statement. He said the Development Agreement negotiations have been ongoing and Council had asked that four specific motions, related to four specific issues, be addressed in negotiations. Staff and the developer desired to resolve those critical issues. Staff requested Council give direction on the four main issues, direct staff back to the negotiating table, and consider directing staff to return with an interim status report in 60 days on all issues. The fi>ur main issues were the Cultural Arts Center funding, the Nature Center funding, the Multipurpose Sports Facility/Ice Skating Rink, and Financial Participation by the Minutes November 9, 1993 Page 4 Agency. In response to Council direction, staff presented three funding programs which would guarantee $2.5 million up front at the early stage of development, which would be used to lfire a professional fundraiser, develop a fund raising program, and a feasibility analysis for a Cultural Arts Facility. Council directed staff to contact a professional fund raising executive. That executive agreed having the land, the planning authority, the political will, and $2.5 million up front was a good start toward a long-range goal of raising $45 million. Plan 1, which was brought to Council previously had the developer guaranteeing $7.5 million at the end of five ye. am after Phase 1 was completed. However, in that Plan, any money above the $2.5 million was off-set by any funds raised by the City which was seen as a flaw in a fund raising effort. Plan 2 had the developer giving the City $2.5 million up front and match dollar-for-dollar up to $5 million above the $2.5 million. The developer was responsible for $7.5 million. The caveat was that the City had to raise $4 million and the City had to make a decision at the tenth year whether or not to go forward with the Cultural Arts Facility. Plan 3, which contained a proposal by Agency/Council Member Rindone, had the developer paying $2.5 million up front and match $2 for every $1 raised up to a total of $7 million. Each Plan depended upon the success of the fundraising efforts. Staff recommended Plan 1 as it had the guarantee of the $7.5 million. Plans 2 and 3 have merit, in that they offer fundraisers options to use a "match" which was seen as a benefit to fundraisers. Mr. Salomone stated both staff and the developer were in agreement that full funding would be provided by the developer for the Nature Center. The point of disagreement was when payment should commence. Staff recommended payment commence at the issuance of the first Grading Permit, the developer wanted payment to commence when the first Certificate of Occupancy was issued. Under Council direction, staff was to try to get construction of the Multipurpose Sports Facility/Ice Skating Rink guaranteed in the first phase of the project. The developer had stated he would not guarantee that, though staff had provided an incentive of almost $20 million to build in Phase 1. Staff felt that offer was the extent to which it could negotiate without interfering in the private market. Staff offered a Financial Participation package which proposed to provide revenue reimbursement of 30 pement of only Transient Occupancy Tax and Sales Tax, net of City expenses. The Tax Increment was not part of the revenue reimbursement formula. Agency/Council Member Rindone pointed out he made the $2 for $1 match but had never indicated there would be a lesser amount for the aggregate total amount than $7.5 million. Chairman/Mayor Nader asked if the Multipurpose Sports Facility referred only to the arena or everything related to sports which included the tennis complex. Mr. Salomone said it referred only the arena. Agency/Council Member Fox quoted from page 9-32, "The City may further wish to phase the residential, for example, allow 100 residential units upon completion of each of the major hotels in Phase I. ' He stated that was not a current staff recommendation, but should Council want that, then Council could ask it be included within the final Development Agreement. Mr. Salomone replied that was correct. Staff believed the tie-in between residential/commercial was a valid Agency/Council Member Fox wanted assurance Council was not approving what could be just a residential project as that was not Council's vision of the Midbayfront project. He asked what affect staff's recommended Plan 1 would have with respect to fundraising. Secondly, with respect to page 9-7, staff stated the professional fundmiser they consulted agreed there was a number of good things going in the City's favor, i.e., having the land, having the planning authority, commitment of up front funds, and local support which was a good starting point. But, the fundraiser made the point that the City would have to rely upon a regional donor base. He pointed out the Olympic Training Center had a national donor base and was having extreme difficulty raising money and questioned how it would be possible to raise $45 million on just a regional donor base. He asked staff if the professional fimdraiser was saying it was practical. Mr. Salomone responded he thought the fundraiser was saying it would be very difficult, but had stopped short of saying it could not be done. The fundraising consultant said it would be essential to do a feasibility analysis of the Minutes November 9, 1993 Page 5 donor basis as well as a feasibility analysis of the type facility the City wanted. The Escondido Performing Arts Theater, a 1500-seat state-of-the-art performing arts theater, was being built at a cost of $17.5 million and the estimated $45 million to build the Cultural Arts Facility may be a very high figure. It probably could be done for a lesser amount. Given the current economic climate, to raise $45 million would be a very difficult task unless the City was to undertake a 20 year program. Agency/Council Member Fox stated staff was not now recominending that Council ask the developer to show evidence of financing, of having a lender, or interested hotel developer(s) but staff was asking Council to defer that information request just prior to the developer having legal vesting. He asked staff why Council should wait. Mr. Salomone stated there was about six months of negotiations before a Development Agreement could be reached. It was not unusual for Development Agreements to have Conditions of Effectiveness which required all of that information be in the Development Agreement prior to vesting of the developer's rights. At this point in time, the developer does not have clarification of the other issues which will be explored in the Development Agreement process. The developer had to nfitigate school impacts and provide affurdable housing. There was some big dollar numbers which had to be incorporated into the Development Agreement prior to the developer shopping the project to potential investors or potential hoteliers. Staff was reluctant to require that information at this point in time. Agency/Council Member Fox asked if staff was saying it would be unrealistic for Council to ask for evidence that the developer can do the project at this time because the developer needed to show other interests there was something that existed to begin with before the developer could present that evidence. Mr. Salomone said that was correct. Council would need that infurmation, but not at this point. Chairman/Mayor Nader asked at what point would Cooncil need it. Mr. Salomone suggested that information could be a Condition of Effectiveness of the Development Agreement. Staff may be able to obtain that information prior to the Development Agreement being finalized. Staff wished to keep its options open at this point. Mr. William Barkett, Chula Vista Investors, 864 Prospect Street, La Jolla, CA 92037 stated he concurred with everything staff had stated with the exception of only one minor point of disagreement. Agency/Council Member Moore inquired as to the point of disagreement. Mr. Barkett said the disagreement was the start of making payment to fund the Nature Center. Should the developer agree to a Benefit Assessment District there should be income to the property. Do not put a burden on the property until there was income to pay for that assessment. Agency/Council Member Fox discussed creating a nexus between the developer building a certain number of residential units--staff had given, as an example, 100 units--l~r each major hotel that would be built. He acknowledged that was not currently in staft's recommendation but staff was saying that was an area Council may wish to pursue during finalization of the Development Agreement. He asked Mr. Barkett to comment to that. Mr. Barkett replied he would be opposed to only 100 residential units to every hotel as he would only get to build 400 of the 1000 residential units and he would have to build all lbur hotels. He had no problem with some limitations and had always assumed, based on past approvals, there were limitations. He did not understand where the idea the project was only going to be a residential community came from. Chairman/Mayor Nader said Council wanted to guard against just a residential project and the source of that concern went back to when Santa Fe was the owner of the property wanted to develop residential units without the resort component. He believed Mr. Barkett felt the 100 units per hotel was too low but would not be opposed to further negotiations to fix what an appropriate phasing mechanism in Phase 1 would be. Mr. Barkett responded that was correct. Minutes November 9, 1993 - Page 6 Agency/Council Member Horton stated her understanding was, as part of Phase 1, the developer was to put in certain infrastructure including Marina Parkway, a major portion of the park system, and the resort lagoon. She asked Mr. Barkett if he would put in the infrastructure prior to breaking ground on the residential or would the infrastructure go in concurrently. Mr. Barkett said it would probably be concurrently. Agency/Council Member Horton stated with the developer investing a considerable amount of money into the project by putting in infrastructure and, under the approved Local Coastal Plan the developer could only build 25 percent of the residential units, then the City was protected as lhr as not having the developer build out the entire 1000 units of residential prior to building any of the commercial. Chairman/Mayor Nader said if the resort lagoon was included in the initial infrastructure, he was closer to agreeing with Member/Council Member Horton's statement. Mr. Barkett interjected there had been no formal negotiations but it was his understanding, based on what was approved in the Local Coastal Plan, that he could not build more than 250 units. If there were no roads or lagoon to create the ambience then no one would want to buy a condominium them. Agency/Council Member Horton said that was something she definitely wanted spelled out in the Development Agreement. Member/Council Member Moore said staff should delineate what the requirement was in infrastructure prior to occupancy in the residential units. Mr. Salomone said staff was using the Local Coastal Plan's Specific Plan and the Land Use Plan adopted to date, which was not clear on whether or not the developer had to build the lagoon prior to the flint residential permit issued. The Local Coastal Plan stated the developer could only build up to 25 percent of the residential units prior to substantial completion of the core (resort) area; substantial completion was described as 50 percent of the essential core area, and 50 percent could not be built without the lagoon because of the construction in that area. As a practical consideration, it would be necessary for the developer to install public improvements including streets, parks, bridges, and lagoons in order to attract a developer/user to the site. As further mitigation, the developer was specifically required to provide off-site mitigation measures such as improvements to E Street, Broadway, H Street, and Bay Boulevard prior to development of the residential area. Agency/Council Member Moore ask what constituted the improvements on Bay Boulevard. Mr. Barkett replied those improvements required Bay Boolevard to be increased to three lanes, with two lanes going south and one lane going north, primarily between E and F Streets. Agency/Council Member Moore said infrastructure included the Bay Boulevard modifications, installation of Marina Parkway through the development, the park system which included the park at the northwest comer plus thc park that runs north to south where the Cultural Arts Facility would be located, the lagoon at the residential area, the off site streets at E, F, H, part of Broadway, and part of Bay Boulevard, the street accessing the residential area, but not the core lagoon. As part of the Development Agreement would the infrastructure be in place prior to occupancy or simultaneous with residential construction. Mr. Barkett stated he would comply with whatever was part of the approved Local Coastal Program. It was his belief traffic improvements had to be done when the project reached a certain density or the amounts of traffic required those improvements. Whatever was required by the Traffic Plan when development construction started, he would do. Mr. Salomone commented prior to Mr. Barkett getting a building permit Council would need to approve a Master Plan that would include all those elements. After the Master Plan was approved, there would design review and Minutes November 9, 1993 Page 7 architectural review prior to building permits being issued. There would be further checkpoints between now and the issuance of a building permit. Agency/Council Member Moore stated the idea was tbr Council to come to agreement so staff would know the parametem to continue the Development Agreement negotiations. Mr. Salomone stated that was correct. Agnecy/Council Member Moore said if there was concern about residential being built and commercial not being built, then Council could come to an agreement on a certain value of the infrastructure having to be in place, whether on-site or off-site, that would be sufficient to satisfy the Council. Assistant City Manager Morris noted it was stafffs intent to return with a final Development Agreement that would include a Phasing Plan which would include what Member/Council Member Moore outlined. He stated that tonight staff was seeking general direction, about the tBur tna.~or items in order for negotiations to proceed on a final Development Agreement. Agency/Council Member Moore stated those were the fBur items discussed in Mr. Salomone's oral report. Agency/Council Member Rindone said those concerns expressed by Council Members would be helpful to staff in the negotiating process. He pointed out at the last meeting Mr. Barkett attended, he indicated to the Agency/Council that the project was not being developed by Mr. Barkett but was being developed by Chula Vista Investors. He asked Mr. Barkett if he still concurred with that statement. Mr. Barkett responded that was correct. Agency/Council Member Rindone asked Mr. Barkett who was Chula Vista Investors. Mr. Barkett replied it was a California partnership. Agency/Council Member Rindone asked if the partnership had taken any part in, or responsibility for, the Radisson Hotels project in National City. Mr. Barkett said they had not. Agency/Council Member Rindone asked if the Radisson Hotels project was part of Chula Vista Investors. Mr. Barkett said no. Agency/Council Member Rindone asked Mr. Barkett if he was prepared to share with Council what the tentative assets of Chula Vista Investors comprised and would it be able to support a project of this magnitude. Mr. Barkett stated when the time was right he would. Chairman/Mayor Nader asked Mr. Barkett if he had any problem with the concept that before rights vested under the Development Agreement, the time would be right to do that. Mr. Barkett responded he did not have a problem with doing that. Larry Dumlao, 650 Rivera Street, Chula Vista, CA 91911, stated he wanted to go on record as supporting staff's recommendation, specifically for the Cultural Arts Facility financing Alternative Plan 3, which was the $2 for $1 match. His support for financing Plan 3 was based upon his previous involvement with other Art Agencies. A number of national fundraisers looked at the kinds of support already committed before they would commit their money. He would like to see some City funds supporting the Cultural Arts Facility. As an example, the City of Escondido substantially supported the Escondido Cultural Arts Center monetarily, and because of that their Minutes November 9, 1993 Page 8 fundraisers were able to meet with success in raising the money necessary for annual maintenance and operational expenses. The City's fundraising effort would require top-notch professional fundraisers. Chairman/Mayor Neder asked if the funding alternatives had been discussed with the Cultural Arts Commission. Mr. Dumlao replied not while he was a Commissioner. Agency/Council Member Rindone stated Chair Dency Souval of the Cultural Arts Commission, who was out of the country at this time, called him and emphatically indicated that she recommended the $2 for $1 match, or the Alternative Plan 3. Mr. Dumlao stated that was the standard for the national fundraising community. Chairman/Mayor Neder asked if the $2 for $1 would be capped at a certain level under the proposal. Mr. Salomone responded the developer's contribution would be to match up to $7 million. Agency/Council Member Rindone said when he recommended the $2 for $1 match, he still favored a cap at $7.5 million. Mr. Dumlao said that would be mom appropriate as it would increase the amount of funds raised. Agency/Council Member Moore asked was it possible for the City to raise $3.5 million in order to get the $7.5 million from the developer. Mr. Dumlao noted he had talked to Mr. Gary Neiger, who was sought out to head up the Escondido Cultural Axis Center fundraising effort as he was pre-eminent as a national fundraising professional, and Mr. Neiger informed him there were several factors to be taken into account: · what was happening in the economy, · what was happening in the art community/world. Agency/Council Member Moore stated most of Escondido's money came from the North County Fair Shopping Mall. He asked staff how much money was raised from private donations. Mr. Salomone replied the fundraising effort in its first year raised $350,000, the second year it raised almost $850,000, and in the current year the fundraising erfurt raised $1.5 million. The Escondido Performing Arts Center was looking at a $6.5 million operational budget which needed to be funded on an annual basis. The City of Escondido had built a $73 millien facility which would require a $6.5 million annual operating budget. Chairman/Mayor Nader asked if Mr. Salomone had stated the cost of the Escondido facility at $17.5 million. Mr. Salomone said the facility being talked about was a performing arts complex which had two performing arts theaters, gallery space, conference center, teaching facilities for the arts and that cost $73 million. The 1500 seat state-of-the-art performance theater which was a componant of the complex, was $17.5 million. Agency/Council Member Fox asked the cost of the Poway Performing Arts Center. Mr. Salomone replied it was an 800 seat facility but he did not know the cost. Dr. Stephen Neudecker, 685 Redlands Place, Chula Vista, CA, Executive Director of the Bayfront Conservancy Trust and the Chula Vista Nature Center. The Bayfront Conservancy Trust has a keen interest in the Development Agreement because it would provide the long-term funding. The Board has reviewed the Instruction to Negotiators, and while the Bayfront Conservancy Trust appreciated the difficulty of the negotiations and the complexity of the Development Agreement; and, while the Agreement may not be ideal, it is acceptable with one proviso: that the annual maintenance and operation payments commence with the issuance of the first grading permit, but at the latest Minutes November 9, 1993 Page 9 no later than January 1, 1996. In summary, the Bay[¥ont Conservancy Trust supported staff recommendations and respectfully urged the Council to require payment to commence with the issuance of the first grading permit. Agency/Council Member Rindune stated staff was seeking clarification on the tbur issues--as mentioned by Mr. Salomone in his opening remarks--in order to deterufine the boundaries and direction Council wanted to go in the development of the Development Agreement. However, before Council responded to that, Council needed to obtain assurance from staff that the entire project was feasible. The number one issue was the feasibility of the project. He asked staff if the project was feasible, and if so, what would that assurance be based on. Mr. Salomone said the reports from Williams-Kuebelbeck & Associates, the City's consultant that performed the feasibility analysis, recommended the project have a 15% Internal Rate of Return to be feasible. The project does not. The Internal Rate of Return was somewhere between 9 % to 11%. The developer indicated to the Agency that the 9 % to 11% Internal Rate of Return on a project of that size was acceptable to him. Council accepted that the project was marginally feasible--in the words of our consultant--and allowed the project to go forward. Staffstill felt the project was marginally feasible. The prt~ject was being burdened with additional economic burden such as the Cultural Arts Facility and the funding ~r the Nature Center. Staff would still characterize the project as marginally feasible. The project had a chance to succeed and staff's indication at this point to the Agency would be that Council move forward and give the project every chance to succeed. Agency/Council Member Rindone asked what stafffs reconm~endation would be, to be very prudent, to ensure that the project was feasible. Mr. Salomone said a feasibility study would probably ultimately be a recommendation by staff but at this point there was still Development Agreement issues to be ironed out. There was major impact items to be costed out--tentative costing for school mitigation had shown a $9 million cost, the developer needed to provide 50 units of affordable housing, and phasing and timing needed to be looked at. Staff believed it critical that negotiations continue on a weekly basis and return in the near future with a clear picture of the project. Agency/Council Member Rindone asked what would happen to the Development Agreement should the project become infeasible. Mr. Salomone replied that staff would not recommend a Development Agreement should it feel the project was not feasible. Agency/Council Member Rindone said he was not sure what staff would recommend to provide additional assurance that the project was feasible. While staff was not prepared at the meeting to fully address the assurance level desired, it was critical that that assurance be an initial step. Agency/Councd Member Fox stated he differed regarding another l~asibility study be done as two feasibility studies had been done and brought to the Council. Council had continued with the process since then. There are four issues before the Council. Speaking as one Council member, staff, including Sid Morris and Chris Salomone, have made tremendous progress. He was ready to vote on staff recommendations, in particular, the Cultural Arts Center funding for $7.5 million. He supported that recounnendation because it was a guarantee. The $2 for $1 alternative did not quite do that. The developer had to guarantee $7.5 million in Alternative A, where there was no guarantee in the other alternatives, unless that burden would be placed on the developer as well, which would make those alternatives no different than Alternative A. Agency/Council Member Fox further stated he believed the four issues before the Council needed to be resolved. Staff had done an excellent job in getting the Development Agreement in place. However, to obtain his final approval, he wanted the nexus Council Member Horton spoke of previously. The nexus between residential and commercial development where the Council would stick with the 25 % of residential development preceding prior to commercial. Agency/Council Member Fox said he was looking I(¢rward to the day the City was reimbursed for staff time and the hiring of a Project Manager, both paid for by the developer. That would not come about until a Development Minutes November 9, 1993 Page 10 Agreement was entered into. When, and before the City enters into that Development Agreement, the City had to have assurance that it had a company that had the resources to build the project and the interest to do so, in order for him to determine the Developer/Agency/City had a deal. He understood why the City could not get that assurance at this time as it would be placing the applicant in an awkward position as it does not have a product. Eventually, there would be a product, and the Developer could show the world what Chula Vista had approved. He could not favor another feasibility study at this time because all the Council would get would be a third opinion which simply would be different from the first two. However, before the Development Agreement was signed, Council must know the City had a Developer who had the resources and know how to go forward. Staff needed to get the message--should other Council Members agree--the direction staff needed to go would be to: · provide proof to the Council there was an applicant with the wherewithal to build the project, · create the nexus betweea the residential units and the commercial to be built, and · after the Development Agreement was approved, staff time would be reimbursed and a Project Manager would be paid for as well. Agency/Council Member Horton said if Council Member Fox would put that in the form of a motion she would MOTION: [Fox/Horton] move for staff recommendation with the direction another feasibility study not be undertaken; in further negotiations for a Development Agreement, there be a nexus between the amount of residential units built and infrastructure/commercial development; negotiations would continue along the lines of the 25%--as mentioned in Chris Salomone's memorandum--of the residential units built prior to the commercial; and, negotiations continue along the line that eventually, and probably at the point the Development Agreement was signed, staff time would be reimbursed and a Project Manager would be paid for ns well. Agency/Council Member Hortan asked Member Fox if infrastructure included the lagoons (central core area and residential area), Marina Parkway, the park system, off-site street traffic mitigations that needed to be done, e.g., modify Bay Boulevard, H, G, F, and E Streets, E and Broadway, and F and Broadway. Agency/Council Member Fox said that was correct. Agency/Council Member Horton then seconded the motion. Agency/Council Member Horton concurred that a feasibility study should not be done as there were feasibility studies that had been reviewed and analyzed by Council and the Bayfront Planning Subconmfittee and to order another feasibility study at this time would be a waste of money and time. The developer could not start building out the project without funds. In order to get funding, especially in today's economic climate, those funding sources would thoroughly analyze the project before they invested their money. Agency/Council Member Rindone stated it was staffs responsibility to present a final Development Agreement to the Agency/Council with the assurance the project was feasible. There were many ways to ascertain that and if staff had information to validate the issue, then it was incumbent upon the Cmmcil, once it was presented, to be sure that was part of the basis on which a final decision whether to accept the proposed Development Agreement would be determined. Before the Council made a final determination on the Development Agreement, Council needed to have the assurances the project would be built and have the intensity and amenities the Agency/Council wanted, and was not just marginally feasible. Agency/Council Member Rindone said none of the Alternatives were preferable for financing the Cultural Arts Facility. However, Alternative 3--the $2 for $1 match, should be modified to cap equal to Alternative A, or at $7.5 million. Chairman/Mayor Nader stated he voted for the Local Coastal Plan Amendment with the Cultural Arts Center as an integral part of the plan. He did not want to vote for a plan which had virtually no hope of succeeding, or gave only lip service to that part of the plan. The Cultural Arts Center, at this location, would be a "crown jewel" for Chula Vista. He was convinced, after talking with promoters in the field, the facility would attract significant business to Chula Vista. He understood there would be capital and operating costs associated with it, and that would Minutes November 9, 1993 Page 11 need to be addressed. The concept the Bayt¥ont Planning SubconUmttee developed was of having a plan that included a significant commercial/private component and which gave the City opportunities to develop a Cultural Arts Project. Opportunities similar t~cilities within the County did not have. He supported the $2 for $1 match capped at $7.5 million for the Cultural Arts Facility financing mechanism. In the alternative, Alternative B, which provided more funds actually being raised than either of the other two alternatives would be preferred. Alternative A, which had a guarantee the developer would provide $7.5 nfillion, but without the match, the City would end up with less money and could fall short of what was needed to construct the Cultural Arts Facility. He was more interested in the $2.5 million guarantee with an additional $5 million at a $2 to $1 match which would result in providing more funds. He had a concern with the multipurpose Sports Facility/Ice Skating Rink. He failed to see what the market in Chula Vista was for a 5000 seat sports arena. However, if the Developer, at his own risk, wanted to build a 5000 seat sports arena on the Bayfront, given the majority of the Council had indicated it would like to have that, he did not want to stand in its way. But, if the Council was going to offer, as staff's proposal recommended, a $20 million bonus out of City lhnds to the Developer to build that particular amenity, he had a problem with that. If the Council was willing to share $20 million out of the City's revenues generated from the project, he would much prefer to see it put toward the Cnltnral Arts Center. As to the phasing of the residential aspect of the project, he preferred the position that originated with Marcia Scully, Esq., Agency Special Counsel, that was contained within the City Attorney's report (as bracketed on page 9-27). He favored directing staff to negotiate with the Developer, as part of the Development Agreement process, what that tightened phasing should consist of. Chairman/Mayor Neder noted he was one of a relatively small number of Mayors honored with an invitation from the National Endowment of the Arts to attend the Mayors City Design Institute at the federal government's expense. Each Mayor invited was asked to present a project of significant design concern to their city to an assemblage of experts--architecture, city design, traffic engineering, urban planning, and so forth--t¥om around the country. The Midbayfront project was the project he presented. The prqject was somewhat controversial with the assembled experts, but the cunsensus seemed to be it could be a tremendous project lbr the City but there were two changes that emerged as considered clearly desirable by all the national experts assembled. One, which would admittedly be a radical change in the way Chula Vista typically does traffic engineering was to not put Marina Parkway all the way through the middle of the project, but rather have it ternrinate at the core in front of the Cultural Arts Facility to create a focal point for the City's bayfront. He wanted flexibility for staff to look at that issue. The other item on which there was consensus from those assembled in terms of the architectural style, it was summed up by the comment of one expert who said People do not usually travel to southern California for vacation in order to experience Italy. They travel to southern California to experience southern California. The suggestion was made that the architectural style, as opposed to the dimensions and the footprint, could better reflect California ambiance and heritage and might make it a more unique and attractive resort location than the Mediterranean style architectural. The Development Agreement should leave the City's Design Review Committee with the flexibility to implement that concept should it be deemed desirable at a later time. The Local Coastal Plan limited the number of highrises to four, and to make sure they were not concentrated in the residential section, that should be addressed in the phasing plan. AMENDMENT TO MAIN MOTION: [Nader/Rindone] to accept on residential phasing issues the recommendation, which originated with Marcia Scully, as contained on page 9-27, in second set of brackets, of the City Attorney's memorandum, not cementing the number, 100 as the unit, but leave that as an item for negotiation, but clearly indicating that the Council wanted tighter control of smaller incre~nents of residential units to be built in conjunction with certain milestones in the core infrastructure. Part of that would be to assure the highrises are not concentrated in the residential portion. Agency/Council Member Moore stated if the Council was trying to kill the project and go back to the four-year rotation of starting something new, then the Council was certainly working hard at that. Council had taken away a number of dwelling units (residential), a number of dwelling units (hotel rooms); there was a $9 million School Impact Fee; 50 affordable dwelling units; $500,000 minimum/yearly for the Nature Center; $7.5 million as well as donation of the land for a Cultural Arts Center; building the multipurpose Sports Facility/Ice Skating Rink; and, park acreage had been increased considerably in the process. Changing the configuration of Marina Parkway would require reconfiguration of the lagoon and the cnre resort area. Why not just vote against the project, let the Developer sell the land, and then the City could start all over again. He admonished that was where the Council Minutes November 9, 1993 Page 12 was heading. He agreed there should be some checks on residential versus the rest of the project. Council was directing the residential lagoon to be in place, modification of Bay Boulevard completed, and the off-site traffic intersection/street improvements made. Council was now saying 50 percent of the commercial had to be built in order for the developer to construct 25 percent of the residential. Tell staff to have appropriate checks and balances for on-site and off-site improvements that have value to the City, and that Council wanted some type of value--in the form of infrastructure--to the City to offset the fact the first thing being built was the residential. Agency/Council Member Fox said Council needed to find that balance in protecting the City's fights as well as ensure the best possible project was developed on the Midbayfront. To support the amendment to the motion would upset that balance as it could affect the applicant's ability to get favorable financing because of the extra burdens. The developer had the tremendous burden of providing for a Cultural Arts Facility, funding of the Nature Center, and the public infrastructure he has to provide. Those kinds of things would affect the applicant's ability to go out into the marketplace and find financing. There needed to be a nexus between the amount of residential to be built in relation to the commercial. VOTE ON AMENDMENT: [Nader/Rindone] Failed 2-3, with Moore, Fox, and Horton opposed. Agency/Council Member Moore stated Council should direct staff to look at appropriate checks and balances of authorizing 25 percent of the dwelling units upffront, and the infrastructure might be the offset needed. Agency/Council Member Horton indicated that was contained in the main motion. Agency/Council Member Moore said the central corn lagoon should be built prior to a hotel being built. Chairman/Mayor Nader replied staff stated that was the case as he had specifically asked that question. Mr. Salomone stated staff had not said the lagoon in the central core would precede the building of the first residential units. Agency/Council Member Horton said her understanding was the same as the Mayor's and she wanted the central core lagoon built as part of the initial infrastructure and that should be included, as such, in the Development Agreement as that was the intent of the maker of the motion. Agency/Council Member Fox said that was also his understanding and he had included it in the main motion. Chairman/Mayor Nader asked if that was part of the main motion. The maker and second agreed the building of the central core lagoon was included as a part of the initial infrastructure and was included within the main motion. AMENDMENT TO MAIN MOTION: Direct staff to pursue either Alternative B or Alternative C, or the modified Alternative C (Agency/Council Member Rindone discussed previously tonight), but eliminat~ Alternative A from the Cultural Arts Facility financing negotiations. Agency/Council Member Moore asked was Alternative A being entirely eliminated. Chairman/Mayor Nader replied that was correct. Agency/Council Members Fox and Horton agreed to make that part of the main motion. AMENDMENT TO MAIN MOTION: Look at both alternatives of the $20 million inducement: [al applying inducement to build the multipurpose Sports Facility/Ice Skating Rink, or [b] applying the $20 million inducement instead for funding of the Cultural Arts Center. Agency/Council Members Fox and Horton agreed to make that part of the main motion. Minutes November 9, 1993 Page 13 AMENDMENT TO MAIN MOTION: INader/Horton] Refer to stuff the recommendations that came out of the City Design Institute as it related to the alignment of Marina Parkway and the architectural design, with staff to consider, in the negotiation process of the Development Agreement, leaving those two points flexible so they are not locked in with the Development Agreement, while retaining, at the same time, the design control the City should have as part of the Development Agreement. VOTE ON AMENDMENT: [Nader/Horton] Failed 2-3, with Moore, Riudone, and Fox opposed. Agency/Council Member Fox seeked clarification of the motion as well as a listing of the infrastructure public improvement that would be required as part of the 25% nexus. The motion was as follows: MOTION: [FoxRtorton] move for stuff recommendation with the direction another feasibility study not be undertaken; in further negotiations for a Development Agreement, there be a nexus between the amount of residential units built and infrastructure/commercial development; negotiations would continue along the lines of the 25%--as mentioned in Chris Salomone's memorandum--of the residential units built prior to the commercial; and, negotiations continue along the line that eventually, and probably at the point the Development Agreement was signed, staff time would be reimbursed and a Project Manager would be paid for as well. The infrastructure included the lagoons (central core area and residential area), Marina Parkway, the park system, off-site street traffic mitigations that needed to be done, e.g., modify Bay Boulevard, H, G, F, and E Streets, and E and Broadway and F and Broadway. The maker and second agreed the building of the central core fugoon was included as a part of the initial infrastructure and was included within the main motion. Direct staff to pursue either Alternative B or Alternative C, or the modified Alternative C (Councilman Rindone discussed previously tonight), but eliminate Alternative A from the Cultural Arts Facility financing negotiations. Look at both alternatives of the $20 million inducement: [a] applying inducement to build the multipurpose Sports Facility/Ice Skating Rink, or [b] applying the $20 million inducement instead for funding of the Cultural Arts Center. Agency/Council Member Rindone pointed out text was nfissing and needed to be included in staff's recommendation. AMENDMENT TO MAIN MOTION: [Rindone/Nader] on page 9-25, in Column B there was a description of the current position of staff for the Assigun~ent of Development Agreement, and the following four words "and without additional subsidies" would have be added. The first dashed item would then read in its entirety: "Assignec's ability to develop project within previously agreed upon (or otherwise reasonable) time frames and without additional subsidies." Agency/Council Member Moore asked what "additional subsidies" lneant. Chairman/Mayor Nader replied none not contained in the Development Agreement. VOTE ON AMENDMENT: [Rindone/Nader] Passed mmnimously. Chairman/Mayor Nader wanted to be on record as saying while Council had looked at conceptual drawings he had never at any stage in the Subconunittee or Council meetings intended his votes to have included the approval of the architectural style as depicted on the drawings. Agency/Council Member Rindone seeked to clarity the main motion as it related to staff's recommendation for funding the Nature Center. Minutes November 9, 1993 -. Page 14 CLARIFICATION AND AMENDMENT TO MAIN MOTION: The Maker and Second agreed the Main Motion included staff recommendation lB for the Nature Center as it appeared on page 9-13 of the staff report. Agency/Council Member Rindone stated the intent of the motion and amendments was to provide direction on the four items, but when the final Development Agreement came back before Council, the essential ingredients had to ensure the project was built, built out with the appropriate phasing plan, and was feasible. Staff needed to address the feasibility of the project. Agency/Council Member Fox said it needed to be made clear to the public the Council vote tonight did not indicate there was going to be a Midbayfront development. Council had taken a key step--should the motion pass--toward progress in creating the Development Agreement. There were still major obstacles to overcome before Council had assurance the project was going to happen. VOTE ON MAIN MOTION, passed unanimously. Chairman/Mayor Nader moved to adjourn to Closed Session and trail the balance of the Agenda items to the next week's meeting. Mr. Morris stated the Attorney had pointed out Item 9.B bad not been considered and asked if Council could take final action. RESOLUTION 1356, offered by Agency/Council Member Fox, read the heading, waive the text. Item 9.B trailed to next week's meeting with the concurrence of the maker of the motion. ITEMS PULLED FROM THE CONSENT CALENDAR Item pulled: 4. The item was trailed to next week's meeting. OTHER BUSINESS 10. DIRECTOR/CITY MANAGER'S REPORT ~ No report given. 11. CHAIRMAN/MAYOR'S REPORT - No report given. 12. MEMBERS/COUNCILMEMBERS' COMMENTS - No reports given. ADJOURNMENT The Redevelopment Agency met in Closed Session at 12:07 a.m. and ac!j~umed at 12:40 a.m., November 10, 1993. Respectfldly submitted, Berlin D. Bosworth, Secretary to the Redevelopment Agency