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HomeMy WebLinkAbout02/20/85 MINUTES RAMINUTES BAKERSFIELD REDEVELOPMENTS AGENCY Special Meeting--February 20, 1985 The Special Meeting of the Redevelopment Agency was called to order by Chairman Rockoff on Wednesday, February 20, 1985 at 5:06 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 REPORTS 1. Report from staff regarding the proposed changes to the Truxtun Galleria project. Executive Director Caravalho stated that at the last Agency meeting the Agency directed staff to analyze and review the proposal and come back with a recommendation. He explained that as of this afternoon they have reached an agreement on a proposal which he outlined to the Agency. The modifications include two fourteen story towers and the inclusion of the Butterfield Savings' site. The towers are turned inward, the parking will be above ground, and retail will be located in the towers and at the Butterfield Savings' site. The office space will be reduced to 312,000 square feet and the retail will be 75,400 square feet. The mall area will be reduced to 29,400 square feet, parking will be reduced to 1,060 spaces, and the site area is reduced to 100,200 square feet because of the elimination of the Hall of Records site. The cost for the proposed acquisition of the properties is reduced to $2.8 million, the relocation cost is $250,000, and the demolition costs will be $285,000, administrative costs are $50,000, and lease payments for parking will be zero for a total of $3.7 million. The total net cost savings will be $2.1 million. He stated at this time the Agency will need to set a public hearing for the approval of the Amended Disposition and Development Agreemnt (DDA) on March 13, and establish a hearing date for the Resolution of Necessity for March 20. Agency Member Barton made a motion that a public hearing be held on March 13, 1985 to consider the Amended Disposition and Development Agreement for the Galleria project. In response to Agency Member Moore's question, Mr. Kennon stated that the closure of Eye Street was studied when the Environmental Impact Report was initially drafted for the original project. Agency Member Moore questioned the total cost of the project, and the price that the City is selling the property for. Executive Director Caravalho responded that $2.8 million is the total cost. Mr. Cal Hollis, Financial Consultant for the Agency, stated that the developer would pay a total of $1 million for the property. He stated that the total land and improvement costs have been estimated to be $2.9 million. He explained that $2.4 million is being paid to private land holders, and $500,000 is being paid for the City-owned property. Agency Member Moore questioned if this proposal represents a new project. Mr. Dave Beatty, Special Council for the Redevelopment Agency, responded that it is not a new project, but it is a significant change to the original concept, therefore, the City is required to hold a public hearing and prepare reports in accordance with that. He stated that the members can vote on this as a new project, because they REDEVELOPMENT AGENCY SPECIAL MEETING, FEBRUARY 20, 1985 - Page 2 have the discretion with regard to voting for significant amend- ments to the DDA. Agency Member Moore expressed concern that the location of the project is in the least blighted area within the Redevelopment Agency boundaries, and that the type of project is primarily office space when there is an abundance of office space in the downtown. He stated that his constituents have overwhelmingly opposed an office complex in this area. He stated that he has not had an opportunity to vote his conscience because he felt morally and legally obligated to uphold the contract which he had inherited in this project. This proposal for a new project creates the necessity for a new contract between the City and the developer. Agency Member Dickerson questioned how the reduction occurs between the original project and the new proposal for the Agency. Mr. Cal Hollis responded that the reduction from $5.5 million to $2.7 million is a combination of three factors: 1) a reduction of the site; 2) the requirement for the Agency to lease parking spaces from the developer which has been eliminated; and 3) the developer's purchase price has increased from $500,000 to $1,000,000. Agency Member Childs made a substitute motion to call for termination of the project. In response to Agency Member Childs' question, Executive Director Caravalho stated that the denial would probably have some impact on redeveloping downtown Bakersfield. He stated that there is a need to create some confidence in downtown redevelopment. He explained that the development must occur in peripheral areas in order to encourage activity and provide a more positive impact in the areas that are more crucial. He stated that there has been tremendous costs incurred in this project. Mr. Hollis stated that they have some concern that if something does not happen in the near future in the downtown, that it may lose its opportunity. The developer has continued within this project for two years. Many developers would not have. Agency Member Christensen stated that his constituents expressed concern that there is no need at this time for offices in the downtown, but that there is a need for department stores and shopping centers. Agency Member Dickerson expressed concern that there was not enough time allowed for the members to study the activities before making a decision. Ms. Martha Walters, citizen, asked several questions and stated that staff indicated at the last meeting that they have never seen any documents indicating who the tenants would be. Mr. Hollis stated that the developer has the commitment from the Bank of America to financing the project, and staff has been told that this project meets their pre-leasing requirements. Agency Chairman Rockoff stated that the City Council and the Planning Commission adopted a Resolution for a commitment to downtown redevelopment. He stated that the developer has proceeded in good faith even though there were individuals who opposed the acquisition of the Hall of Records. He indicated that with the negotiations of staff and the developer, this project is approximately $2 million less costly to the Agency. This project should continue because it would send positive signals to other develoeprs and give credibility to commit- ments made by the Agency. Agency Member Christensen stated that Bakersfield is one of the fastest growing development cities, and there are several developing companies or individuals that are interested in developing downtown. He stated that Bakersfield needs shopping centers, not office buildings. REDEVELOPMENT AGENCY SPECIAL MEETING, FEBRUARY 20, 1985 Page 3 Agency Member Childs expressed concern for the preservation of downtown, and that the development could have a positive impact on the Lakeview area. Mr. Kenny Reed, President of the Downtown Business Association, stated that Agency Member Moore commented that his constituents could not support new office space downtown because of the 40 percent vacancy rate. He explained that the 40 percent exists because the older buildings could not supply the types of facilities and space required by large companies. He further commented that Mr. Moore's constituents would be hard pressed to support more office space in downtown because they view this as competitors. Agency Member Dickerson made a motion for a five-minute recess at 6:30 p.m. The Redevelopment Agency meeting was reconvened at 6:40 p.m. by Chairman Rockoff. Agency Member Moore responded to Mr. Reed's statements stating that the proposed area is the least blighted area in the Project Area. He stated that he is in support of downtown redevelopment, and that there are a lot of proposals for development, none of which are office space. He stated that not one of his constituents which were contacted suggested that this project be located in the southwest. Agency Member Dickerson expressed concern regarding the vacancy rate in the Bank of America building. Mr. Hollis stated that the vacancy information is available, and clarified that the property was recently purchased which would indicate that it is a valuable piece of property. Agency Member Childs withdrew his substitute motion to terminate the project. Agency Member Barton's motion to schedule a Public Hearing for March 13, 1985, to consider the Amended Disposition and Development Agreement for the Galleria project was approved by the following roll call vote: AYES: Rockoff, Barton, Childs, Dickerson NOES: Moore, Christensen ABSENT: Ratty Agency Member Dickerson stated that he is voting to discuss this project further, not to approve it. He requested that the Agency not take any further action until the Agency decides where it wants to go with this project. Agency Member Barton made a motion to schedule a Public Hearing for March 20, 1985 to consider the Resolution of Necessity for the Galleria project, which was defeated by the following roll call vote: AYES: Barton, Childs NOES: Moore, Rockoff, Christensen, Dickerson ABSENT: Ratty ADJOURNMENT There being no further business to come before the Redevelopment Agency, Agency Member Barton made a mo~ion to adjourn the meeting at 7:01 p.m. ~/~'/: ~/,.~'I ~ I,,/ ~' /co./ / ARTHUR L. ROCKOFF,~airman Bakersfield RedeveLopment Agency Agency