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HomeMy WebLinkAbout03/27/85 MINUTES RAMINE, TES BAKERSFIELD REDEVELOPMENT AGENCY Regular Meeting--March 27, 1985 The Regular Meeting of the Bakersfield Redevelopment Agency was called to order by Chairman Rockoff on Wednesday, March 27, 1985, at 5:05 p.m. in the City 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 AGENCY STATEMENTS Agency Member Christensen stated that rumors are circulating that efforts are being made to bring the Truxtun Galleria project back for consideration. He explained that the project has been given more than its fair share of staff and Agency time, and to devote more of the City's limited resources to the Galleria can only come to the expense of other potential developments. REPORTS 1. Report from AIRCOA regarding financing for the proposed Convention Center Hotel. Mr. Gordon Bell, representative of AIRCOA, stated that on Monday, March 25, he received a letter of commitment from the Bank of America for the $14 million in the form of a letter of credit that will be used to support the lending on the hotel. He stated that the letter, which expires on April 30, 1985, is explicit in all of the requirements that are standard to a mortgage lending under- writing. He stated that this letter has been submitted to Agency staff to be reviewed by the legal counsel. Mr. Bell explained that the hotel project is an $18 million project. The financial structure involves $4 million of equity which will be cash investments by limited partner investors. AIRCOA is investing $1 million of working capital in order to support the hotel during the start-up phase. He stated that the letter of credit covers the $14 million mortgage debt. The bank, as part of its commitment, has requested that the developers provide backup collateral of $4 million therefore increasing the commitment by the developers from $5 million to $9 million. He stated that the additional $4 million is collateral as opposed to actual cash investment, and it is at risk, should the project not be financially successful. He indicated that the bank has requested that the credit be separate from and attachable from the hotel so that it is a liquid asset that is attachable by the bank. The net effect is that it reduces the risk of the bank, but it does increase the capital commitment on the part of the developer. He stated that they are proceeding with three different alternatives for meeting the requirements. Mr. Bell further explained that the provision of collateral changes the relationship between the limited partner, AIRCOA and Bob Corsaro, in the ownership of the project. It changes the equities and ownership in the project. Agency Member Childs stated that he very much favors the hotel project. He questioned the date in which staff received the letter of credit, and what information contained within it could not be viewed by the Agency. Mr. Kennon stated that the letter was received by staff this afternoon. He explained that there are confidential finances and credit data of the developer and those participating in the develop- ment that the staff and Agency are obligated to hold in confidence. BAKERSFIELD REDEVELOPMENT AGENCY MEETING, MARCH 27, 1985 - Page 2 Executive Director Caravalho stated that the issue is confidentiality between the Agency and a partner. He stated that they are not differentiating between the staff and Agency members, but that staff is obligated to keep it confidential. Agency Member Childs questioned the status of the DDA and if there was a penalty phase associated with financing at this time. Executive Director Caravalho stated that the Agency could go through the process of default if the Agency feels the developer is not performing to the best of his ability to gain financing. Mr. Bell stated that they are well beyond the time schedule as established in the DDA, and requested that the DDA Schedule of Performance be coterminous with the first meeting of the Agency beyond April 30 in order that the developer may come back with a final arrangement on the $4 million. City Attorney Oberholzer stated that the Agency should take some action as to whether to proceed, or default, in order to provide some acknowledgment from the Agency that they will extend to April 30. Agency Member Dickerson questioned how long the Agency con- tinues a project on a handshake. He questioned if the Agency is keeping anyone else from participating in this project. He also expressed concern about the consistency with the redevelopment projects. Executive Director Caravalho stated that each project should be treated on its own merits because they are very complicated projects. He commented that as long as they are working diligently to comply with the DDA, then the Agency should be encouraging and supportive. Agency Member Dickerson made a motion to grant an extension to the developer until May 10 for the financing. City Attorney Oberholzer stated that there are other dates that will be affected and suggested that the Agency wait for a firm date of financing and then proceed with making corrections to the entire Schedule of Performance. He stated that until the developer is put on notice, then he is still performing. Agency Member Dickerson withdrew his motion. Presentation by Agency consultants regarding important urban design decisions in the downtown. Mr. Kennon stated that in August of 1984, the Agency approved the Redevelopment Element of the General Plan which deals with the urban design problems and land use in the downtown in a progressive fashion. Mr. Harry Tow, of Quad Consultants, stated that they are working with the urban design firm of Daniel, Mann, Johnson, Mendenhall (DMJM) with respect to updating the Zoning Ordinance insofar as it involves implementation of the downtown program. Mr. Ron Landy, of DMJM, planning, engineering and urban design consultants, gave a brief slide presentation on the urban design elements that his firm has worked on in the past and provided some ideas that they will use for Bakersfield. He explained that urban design should provide a focus on excitement which images the future of what downtown Bakersfield can be. Report from Executive Director regarding the status of developer selection for the proposed Downtown Regional Shopping Center. Executive Director Caravalho stated that several weeks ago staff sent information packages to a number of department stores to express BAKERSFIELD REDEVELOPMENT AGENCY MEETING, MARCH 27, 1985 - Page 3 what the City wants to accomplish as well as provide some basic information. Since that time, staff has received some response from department stores. Staff also sent a package of material including a Request for Qualifications to developers in order to select someone to be the developer of the shopping center prior to the first of May. He stated that interest has been received from developers, and a management technical team will be established to review the proposals. The three strongest proposals will be selected for further consideration and for the purpose of making a presentation to the Agency in late April or early May. CONSENT CALENDAR (a) Approval of Vouchers No. 195 through 232 totaling $43,405.83. (b) Approval of Design Review Board recommendations: Transmission Tower for Californian located on building. the Bakersfield the Bank of America 2. Signage for the Potato Shed, 1804 Chester Avenue. 3. Exterior Paint and Signage for the Showcase Theatre 1300 19th Street. 4. Awnings for American Jewelry, 20th and Eye Streets. [,pon a motion by Agency Member Barton, items (a) and (b) of the Consent Calendar were approved by the following roll call vote: AYES: Barton, Childs, Christensen, Dickerson, Moore, Rockoff NOES: None ABSENT: Ratty NEW BE, SINESS (a) Resolution of the Redevelopment Agency of the City of Bakersfield fixing the dates of meetings of the Agency during the months of April through December, 1985. Agency Member Barton made a motion to approve the Resolution of the Redevelopment Agency fixing the dates of meeting so the Agency during the months of April through December, 1985. Agency Member Dickerson made a substitute motion to adopt the Resolution with the exception of June 26, 1985. Executive Director Caravalho stated that this date has been scheduled for approving the Agency's budget. Agency Member Dickerson withdrew his substitute motion. Agency Member Barton's motion, to approve Resolution No. RA1-85 of the Redevelopment Agency fixing the dates of meetings during the months of April through December, 1985, was approved by the following roll call vote: AYES: Barton, Childs, Christensen, Dickerson, Moore, Rockoff NOES: None ABSENT: Ratty ADJO[,RNMENT There being no further business to come before the Redevelopment Agency, Agency Member Christensen made a motion to adjourn at 5:05 p.m. ~evSee~tmeanrYt Agency ARTH[R L. 'RO~OF~ C.h.F/rman Bakersfield Re~e~/e~ Agency