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BAKERSFIELD REDEVELOPMENT AGENCY
Regular Meeting-January 9, 1985
The Regular Meeting of the Redevelopment Agency was called to
order by Chairman Rockoff on Wednesday, January 9, 1985, at 5:02 p.m.
in the City Hall Council Chambers. The Secretary called the roll as
follows:
MEMBERS PRESENT:
James Barton
James Childs
Chris Christensen
Mark Dickerson
Rollie Moore
Art Rockoff
MEMBERS ABSENT:
Donald Ratty
MINUTES
Upon a motion by Agency Member Dickerson, the Minutes o£ the
Special Meeting of October 29, and the Continued Meeting of November 7,
1984 were approved as presented.
Agency Member Dickerson made a motion that the Minutes from the
previous meeting be presented at the next regular scheduled meeting for
approval on a continuing basis. The motion was unanimously approved.
CORRESPONDENCE
Communication received from James LaMonte Scofield, dated
December 17, 1984 protesting the relocation of the Hall of
Records building to the parking lot at 17th and "G" Streets.
Upon a motion by Agency Member Barton, the communication received
from James LaMonte Scofield was received and placed on file.
REPORTS
1. Report from hotel developer regarding the financing strategy
for the proposed Convention Center Hotel.
Mr. Bob Corsaro, representative of the hotel development, gave a
brief status report on the financing for the project. He stated that
they are trying to obtain a new instrument in lieu of the bonds.
Agency Member Christensen questioned the deadline for this
financing.
Mr. Kennon stated that the developer is in default because the
financing should have been in place approximately 30 days ago.
Agency Member Childs questioned whether the DDA indicates any
penalties associated with the delay.
Mr. Kennon responded that there was no requirement for additional
good faith deposits.
Executive Director Caravalho stated that discussions have been
held with the developer, and there has been significant changes in
the financing of this project. He recommended that the developer be
granted until January 30 to provide an indication that financing can be
secured.
Agency Member Moore questioned if the developer had additional
,options in the event something should happen with the proposed financing.
Mr. Corsaro stated that they do have additional options, but feel
they want to keep everything localized.
Upon a motion by Agency Member Childs, an extension was granted
to the developer until January 30 in order to obtain financing.
BAKERSFIELD REDEVELOPMENT AGENCY, REGULAR MEETING, January 9, 1985 Page 2
CONSENT CALENDAR
a) Acceptance of Redevelopment Agency Annual Financial Report
for the year ended June 30, 1984.
Agency Member Dickerson questioned the drop since 1981 from
$43 million to $41 million, and what created the drop.
Mr. Klimko responded that it was a combination of things. The
change in State law regarding business inventory taxes was a major
factor.
Agency Member Christensen requested information on the percentage
of administrative costs spent by the Agency and the dollar amount
spent on the Galleria project.
Upon a motion by Agency Member Moore, item (a) of
Calendar was approved by the following roll call vote:
AYES: Childs, Christensen, Dickerson, Moore, Rockoff,
NOES: None
ABSENT: Ratty
the Consent
Barton
Agency Member Dickerson requested a staff report on the budgetary
authority that the Agency was operating under during the period from
the beginning of this fiscal year until the adoption of this budget.
Mr. Edward Dilkes, Attorney representing Anthony Falletti,
stated that he has reviewed an unexecuted copy of the Disposition and
Development Agreement. He stated that a great many people will respond
by demanding that the Agency litigate legal issues relative to the
very exercise of the Agency's eminent domain powers. He stated that
there is not a title insurance company that will provide a policy of
title insurance on that conveyance. He stated that the Orders of
Possession period for occupied property is 90 days, and the period
to contest is 30 days, subject to extension. He stated that the
frightening thing is that all the money could be spent on the project
before it is found that the project cannot be accomplished. He stated
that one issue that can be litigated would be as to whether or not this
acquisition is for a public use.
Mr. Dilkes stated that most of the people want the Hall of Records
to be preserved, but that there is no certain guarantee that this can
occur. He stated that there are many uninsurable risks that can occur
in this situation. He stated that there are also problems with the
approval process. He stated there were relationships preceding that
period which make some of the votes cast doubtful.
Agency Member Childs stated that the members rely on the City
A'ttorney who presents information to the Agency. He suggested that
Mr. Dilkes present something to staff on anything or any decision that
the Agency might make.
Agency Member Dickerson questioned how this project is more
complex than others, and also requested examples of redevelopment failures.
Mr. Dilkes stated that it is complicated in different ways. He
stated that he has been through the DDA several times, and that he does
not understand the financing mechanisms for the project. He stated
that he could not compute what exactly would be the Agency's cost from
these documents. He stated that an example of a failure would be the
development next to USC that has gone into default recently. He
stated that he challenged the right to use eminent domain against that
property, and the court dismissed the condemnation because the Agency
had violated the law with respect to owner participation.
Mrs. Martha Walters expressed concern that it has been stated among
the Agency Members that there is a fear that they will be sued.
Agency Member Childs stated that he was unaware of any threat of
being sued.
BAKERSFILED REDEVELOPMENT AGENCY, REGUiLAR MEETING, JANUARY 9, 1985 - Page 3
Agency Member Christensen stated that he was told that he could
lose his home.
Agency Member Moore stated that at one point there was some mis-
understanding about the Agency's ability to vote for the financing of
the Galleria project. He stated that the Agency was informed that
they could not state that the developer did not have his financing when,
in fact, he did. He stated that if the members on their own voted
that the developer did not have the financing in order to terminate the
project, it could place each individual member in jeopardy. He stated
that the Agency Members voted as advised by staff and the consulting
attorney.
Agency Member Barton concurred with Mr. Moore's statement.
Agency Member Dickerson stated that he came into this project
after August 29, and therefore did not know what took place before
that date. He stated that he has not had any contact with individuals
who are in favor of this project, and if there are any, they should
make known their feelings.
Agency Member Dickerson made a motion that all the
over to the City from Mr. Dilkes be copied and given to
Members. The motion was unanimously approved.
items turned
the Agency
NEW BUSINESS
(a)
Approval of bid and award of contract for modification of
1325 - 19th Street to allow for relocation and operation
of the County Recorder's Office subject to Kern County's
acceptance of the City's Offer to Purchase the Hall of
Records.
Mr. Kennon stated that the offers have been reviewed by staff and
have been distributed to the various propery owners. Meetings have
been scheduled with each of the property owners to discuss relocation
and the benefits under the redevelopment law. He stated that staff
has anticipated the County taking some action on the sale of the Hall
of Records so that we would not be required to make this a conditional
offer.
Mr. Dickerson stated that within the time frame given, it looks as
though there will not be enough time to allow the events to take place
before the approval by the County.
City Attorney Oberholzer stated that the DDA is structured so that
the Agency will acquire the Hall of Records property before the commence-
ment of the acquisition of the other properties. The Agency will not
begin the acquisition of the other properties until the Hall of Records
property has been acquired.
Agency Member Dickerson stated that he felt it was not appropriate
to be entering into any agreement to do different activities until
the Agency has obtain the Hall of Records. He suggested that the
Agency not vote on this issue until the Hall of Records has been
acquired.
Agency Member Childs questioned the conditions for moving the Hall
of Records.
Mr. Kennon explained that the basic issues are the relocation and
restoration, and the price which is based on a fair market value of
the property. He stated that there has been a draft agreement prepared
with the developer which is being refined. In regard to the relocation
process, the County staff has been working with the City staff in dealing
with the developer and the consultants.
In response to Agency Member Childs' question, Mr. Kennon indicated
that only one bid was received. He stated that the modification of the
1325 19th Street property will take between 30 and 45 days to complete,
and it is therefore a critical issue. He stated that immediately
upon the sale of the Hall of Records being approved by the County,
the City will begin the remodeling and the relocation can begin. The
key issue is to have that site available for construction as quickly
as possible because it will take considerably longer than the parking
BAKERSFIELD REDEVELOPMENT AGENCY, REGULAR MEETING, JANUARY 9, 1985, Page 4
structure which will be located on the properties along 17th Street.
Agency member Barton stated that an offer was made to the
County to purchase the Hall of Records on December 14, and in that offer
the Agency would relocate and provide a facility for the County
Recorder. He explained that if the Agency does not provide temporary
relocation, it will not fulfill the Offer to Purchase.
Agency Member Barton made a motion to accept the bid and authorize
the Chairman to execute the contract with Tobish and Taylor subject to
the Kern County's acceptance of the Offer to Purchase the Hall of
Records.
Agency Member Christensen read the correspondence received from
Mr. James LaMonte Scofield, dated December 17, 1984, to Mayor Shell
and Honorable Council Members.
"In a recent article in the local paper, it was announced that the
Hall of Records had been sold to a local developer and would be
moved to the City parking lot at 17th and "G" Streets.
"As a member of the First Presbyterian Church, the only church now
in downtown Bakersfield, I would like to protest this decision.
There are many events taking place daily in the area of 17th and
"G" Streets, and parking is needed by those participating. Although
we have a parking lot to the rear of the church, it is not large
enough to accommodate all of those needing parking spaces.
"With the Eagles Lodge across the street from First Presbyterian,
parking is especially difficult when the two groups are holding
events at the same time. In addition, many customers of the
Guild House use the 17th and "G" lot.
"Therefore, I would personally like to enter a protest about the
City's action in selling this public parking lot to a private
developer without consideration of those groups whose members/
clients use the parking lot."
Mr. Kennon stated that the construction of the parking structure
which would be located directly across the street from the Church would
provide 1300 new parking spaces.
Agency Member Moore read a portion of the correspondence sent to
Mr. Ralph Rudie from J. David Kennon, dated December 20, 1984.
"Outside of these discussions during the past few weeks, there has
been some discussion with the federal government of the elimination
of certain tax credits for the restoration of old and historic
structures. Obviously, we have no control over this issue; however
if such a situation did occur, this could have some impact upon
the bottom line profitability of the overall project. Therefore,
this has interjected a level of uncertainty into the economics of
the project."
Agency Member Moore questioned if there is any further estimate
of what impact the elimination of tax credits would have financially
on the project.
Mr. Kennon responded that there has been no change in the status
of the tax reform. This has been studied relative to the developer's
pro forma and the economic feasibility of the project relative to that.
That issue is still under consideration by the Agency's consultants, but
the level of profit and the cash flow issues would appear to be
acceptable to the developer. He stated that the consultants do not
feel at this point that it would make the project infeasible.
Agency Member Moore questioned how comfortable staff felt with the
estimate of 500 tons, and what form would be used for the added cost.
Mr. Kennon explained the the weight was significantly underesti-
mated; it is 1,500 tons. The relocation of the structure is the respon-
sibility of the developer. He indicated that with the additional cost
the amount would be in excess of $300,000 for the moving.
BAKERSFIELD REDEVELOPMENT AGENCY, REGULAR MEETING, JANUARY 9, 1985, Page 5
Agency Member Dickerson made a substitue motion that the Agency
consider the sale of the Hall of Records and the moving of the Hall of
Records in closed session at the next regularly scheduled meeting.
City Attorney Oberholzer stated that this item does not qualify for
a closed session.
Mr. Kennon stated that the assumption is that some action will be
taken by the County on January 15 regarding the sale of the Hall of
Records property. He stated that the next Agency meeting is scheduled
for January 30 which would indicate a loss of two weeks.
Agency Member Childs requested that maybe an Agency meeting should
be called on the 16th, and at that time the Agency will have an idea as
to what the Agency's position would be after their decision.
Chairman Rockoff stated that the Agency should show the good faith
in fulfilling the obligation that the Agency will make that building
ready for the County as expeditiously as possible. He stated that by
passing this item, the Agency is not committing itself if the Ccunty
does not sell the property.
Mr. Ralph Rudie, Director of Property Management of the County of
Kern, stated that the City has yet to be successful in acquiring the Hall
of Records site. The primary issue to be resolved was the potential
success of relocating the Hall of Records structure. He stated that the
study reached his office on December 27, and since that time it has been
amended to reflect the results of that study. He stated that the review
was completed yesterday and went through three offices within five days.
The amended agreement is being typed and then the staffs of both agencies
will meet in order to go over the amendments, and will therefore not be
presented to the Board of Supervisors on Tuesday.
Upon a motion by Agency Member Childs, the Redevelopment Agency
meeting was recessed at 7:00 p.m. until after the City Council Meeting.
The motion was approved by the following roll call vote:
AYES: Childs, Moore, Rockoff, Barton
The Redevelopment Agency Meeting was reconvened by Agency Chairman
Rockoff at 9:35 p.m.
Agency Member Moore questioned if the issue is now moot
as a result of Mr. Rudie's report.
Mr. Kennon indicated that there would be a problem in timing which
would directly affect the developer's ability to close his loan.
City Attorney Oberholzer explained that it may be possible that
this bid will no longer be effective if there is a delay from the County,
because the bid is effective for 30 days.
Mr. Terry Moreland, developer of the Truxtun Galleria, stated
thatthe problem is in the structuring of the timing of the County. If
the County staff takes the position that they have taken in the past
with the City staff and not informing them of exactly what they are
doing in bringing the item before the Board of Supervisors, then if the
Agency does not pass the contract now, then the County could delay
another week, and the commitment would have run out. He explained that
he will take on the obligation of moving the Hall of Records, and
endorse what the County has required the City to do. Mr. Moreland also
expressed concern that the letters to the property owners did not go
out as he had been told by staff.
Agency Member Childs questioned if the Agency would incur a liability
for not living up to the Agency's part of the agreement that was imposed
on the developer.
City Attorney Oberholzer responded that as long as the Council
and the Agency make a good faith effort to acquire the property from
the County, then they have performed under the agreement. Whether the
County will agree to sell the property is outside the control of either
the Agency or the developer, but the failure to make the sale would
constitute the termination of the agreement.
BAKERSFIELD REDEVELOPMENT AGENCY, REGULAR MEETING, JANUARY 9, 1985, Page 6
Agency Member Dickerson withdrew his substitute motion and made
another substitute motion to call a special meeting of the Agency for
January 21 to consider the purchase of the Hall of Records and the action
taken by the County, and also to review the renovation activities with
the American National Bank building and take appropriate action with
regard to moving the building.
Agency Member Dickerson questioned if the Agency accomplishes the
acquisition of the Hall of Records property and cannot acquire the
individual properties for the project, what would take place.
City Attorney Oberholzer stated that the procedure that must be
followed for the acquisition of the property requires that offers be
made on the property, and if the owners do not accept those offers, the
Agency proceeds with eminent domain. If the Agency proceeds with
eminent domain, then the adoption of a Resolution of Necessity is required
which would require five votes of the Agency. He stated that if the
County reacts in sufficient time to allow the City to notice the
property owners, it requires 15 days notice prior to the hearing, and
then the Resolution of Necessity could be presented to the Agency by
the end of January. Mr. Oberholzer stated that the code requires that
an offer be made on the property based upon fair market appraisals, and
that it be made prior to the institution of eminent domain action by
the Agency or City Council. At this time, all that could be sent out
were conditional offers because there is a condition that must occur
that is outside the control of either the Agency or the Council. He
stated that when the Agency gets acceptance from the County, then
unconditional offers will be sent out to the property owners followed
up by the notice of the adoption of a Resolution of Necessity.
Mr. Tom Hardt, representative of Bank of America, stated that at
the last meeting of the Agency, they approved those offers to go out
to the property owners. The following Thursday morning he was told
that the offers would go out that day to the property owners. He stated
that on Monday he was informed that the offers were just then being
sent out. He stated that he was told yesterday that the notification
letters regarding the Resolution of Necessity were sent out, and now
he was told that was untrue.
City Attorney Oberholzer stated that the City must follow the
statutory requirements or the whole project could fall.
Mr. Tom De Natale, Attorney for the Moreland Corporation, made a
suggestion that notices of a hearing for a Resolution of Necessity be
sent to the property owners at this time, giving them the required 15
days notice, and if by that time the Hall of Records is obtained, then
it would appear that the condition that was placed on the offers would
be removed, and the Agency would be in a position to conduct a hearing
on the resolutions prior to January 31.
Agency Member Dickerson made a motion for a 10-minute
The motion was defeated by the following roll call vote:
AYES: None
NOES: Childs, Christensen, Moore, Rockoff, Barton
ABSTAINS: Dickerson
ABSENT: Ratty
recess.
Agency Member Dickerson's substitute motion, to call a special
meeting of the Agency for January 21 to consider the purchase of the
Hall of Records and the action taken by the County, and also to review
the renovation activities with the American National Bank building and
take appropriate action with regard to moving the building, was defeated
by the following roll call vote:
AYES: Dickerson
NOES: Childs, Christensen, Moore, Rockoff, Barton
ABSENT: Ratty
Agency Member Barton's motion to accept the bid and authorize the
Chairman to execute a contract with Tobisch and Taylor subject to Kern
County's acceptance of the Offer to Purchase the Hall of Records was
approved by the following roll call vote:
AYES: Childs, Moore, Rockoff, Barton
NOES: Christensen, Dickerson
ABSENT: Ratty
BAKERSFIELD REDEVELOPMENT AGENCY, REGULAR MEETING, JANUARY 9, 1985, Page 7
(b) Request for additional tax increment funding for the Facade
Grant Program.
Mrs. Martha Walters stated that the downtown businesses are hardly
poor. She stated that there are buildings outside the downtown area
which could be used for sheltering the homeless and the sick.
Agency Member Childs expressed concern that merchants have been
downtown for some time, and that the Agency is providing funds for
successful businesses. If those businesses are concerned about
Bakersfield, why are they not reinvesting their own money, he
questioned.
Mr. Kennon responded that this program is a matching incentive
which effectively reduces the cost of redevelopment.
Agency Member Barton made a motion to approve the increase of
$25,000 in the funding of the Facade Grant Program.
Executive Director Caravalho stated that recently the Agency
received a presentation from staff on this program and the interest and
intent. He stated that there is sentiment that the downtown is less
than satisfactory and that economic activities are stagnant or in
decline. This program was proposed to stimulate more economic
activity. He stated that the original $50,000 originally budgeted has
been expended, and there seems to be a lot of interest, therefore, an
increase has been requested.
Agency Member Childs made a substitute motion to defer this issue
until the next Agency Meeting and have staff prepare an additional
report.
In response to Agency Member Christensen's question, Mr. Kennon
stated that the criteria for this program is that the business must
be located in the project area.
Agency Member Barton withdrew his original motion.
Agency Member Childs' motion to defer this issue until the next
Redevelopment Agency meeting and have staff prepare a report, was
unanimously approved.
Agency Member Dickerson made a motion to recess at 11:05 p.m.
The motion was approved by the following roll call vote:
AYES: Childs, Christensen, Dickerson, Moore, Rockoff, Barton
NOES: None
ABSENT: Ratty
The meeting was reconvened at 11:16 p.m.
'ADJOURNMENT
dr e~or~7~i~, Secretary
aker~'fiel- 'd Redevelopment Agency
There being no further business to come before the Redevelopment
Agency, Agency Member Moore made a motion to adjourn the meeting at
11:20 p.m.
/' . / ..'
ARTHUR L. ROCKOFF, Cha~-~i
Bakersfield Redevelopme/h~,/Ageney