HomeMy WebLinkAbout04/24/85 MINUTES RA M I N l~ T E S
BAKERSFIELD REDEVELOPMENT AGENCY
Regular Meeting--April 24, 1985
The Regular Meeting of the Bakersfield Redevelopment Agency was
called to order by Chairman Rockoff on Wednesday, April 24, 1985,
at 5:09 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
MINI~TES
Upon a motion by Agency Mel~ber ~oore,
Regular Meetings of March 13 and April 10,
presented.
the Minutes of the
1985 were approved as
REPORTS
Report from staff regarding the proposed Downtown Shopping
Center.
Executive Director Caravalno gave a status report on the efforts
toward the Regional Shopping Center for the downtown. In late
February, material and planning ~nformation regarding the City of
Bakersfield was distributed to twelve major retail companies
throughout the [,nited States. 7~equests for Qualifications were sub-
mitted to developers in March. These developers are presently being
contacted by staff. He stated that staff is at a point where they
will be evaluating some interested developers which may involve some
expense to the Agency in terms of background references and travel
to meet with them and visit some of ~heir projects. It is hoped
that within the next 30 days staff can come forward with a developer
and have a better sense of what kind of project will be proposed.
2 o
Report from the hotel developer regarding the status of
the financing commitment for the proposed Convention
Center Hotel.
Mr. Gordon Bell, representative of AI[~COA, gave a brief review
of his last discussions with the Agency. He stated that they received
a letter of commitment from Bank of America for $14 million which
required an additional credit enhancement of $4 million. Essentially
an $18 million hotel becomes a $22 m~llion hotel, and the parties
which are negotiating with the developer to provide the additional
credit are looking for a return on taking that risk. He stated that
they are dealing with four entities, and the two that seem to be
the most promising will be meetJng with the developer late this
week and Monday of next week. ~{e stated that they are approaching
the deadline for the Bank of America letter of credit commitment.
He stated that the bank has agreed, based on the strength of the
credit enhancement negotiations, to extend the deadline, but it will
cost money to do that. The developer will make that decision on
April 29th or 30th.
Mr. Bell explained that two of the parties that they are
negotiating with are proposing to syndicate a second partnership
which would invest $4 million in cash in limited partnership shares.
That cash would buy investment paper that would be used as collateral
with Bank of America, and that paper would have a return on it to
those investors. They, additionally, would receive returns from the
hotel both in the form of tax shelter and cash on cash return. The
partnership would have two sources of income and would be coterminous
in its existence with the length of the Bank of America letter of
credit.
BAKERSFIELD REDEVELOPMENT AGENCY, April 24, 1985 Page 2
Agency Member Childs questioned the additional expense for the
extension.
Mr. Bell stated that the developer had to pay for the commit-
ment letter which is a 60-day commitment. In order for the bank to
extend the letter, they will charge an additional fee on a per-
centage basis.
Agency Member Childs questioned if there is a penalty or default
phase in effect.
Mr. Kennon explained that the project is in a technical default,
but the developer is still working with the financing which was
to have been completed late in 1984.
Executive Director Caravalho stated that the issue at hand is;
does the Agency feel that the developer is making progress toward
the completion of the project. If so, they can proceed. If the
Agency feels they are not making progress as to what is indicated
in the DDA, the Agency would give him notice that he will be placed
in default and proceed with terminating the DDA. He indicated that
staff feels that the developer is making progress towards the
financing.
Mr. Bell stated that he will notify the Agency at its May 22
meeting of the decision by the developer as to whether they will
extend with Bank of America.
Agency Member Christensen read the following letter from
John A. Smith, General Contractor:
April 22, 1985
Councilman Chris Christensen
City of Bakersfield
1501 Truxtun Avenue
Bakersfield, CA 93301
Dear Councilman Christensen:
It is apparent that a renewed interest is taking place regarding
the redevelopment of the East Bakersfield business area. This
is a subject of great interest to me since I am the owner of a
large commercial building locatec[ at 312 Kentucky Street.
I purchased this building in November of 1983 with the belief
that the cities commitment to re¢~evelopment would assist me with
my plans to remodel the building. Following many months of frust-
ration, it became apparent that my time could better be spent
on other things.
I have to date spent approximately $60,000 on repairs and
cosmetic improvements. The funds that remain will not allow me
to make the kind of improvements that will attract the quality
tenants that would be desirable.
I believe that this property is ideal for the cities rehabili-
tation project. It is difficult for me to understand why I
have been unable to find a fo!-mula for mutual benefit. It is
for this reason that I write you today. Is it possible that
with your involvement a way could be found.
Best regards,
John A. Smith
BAKERSFIELD REDEVELOPMENT AGENCY, April 24, 1985 Page 3
Mr. Kennon stated that Mr. Smith had applied for a Commercial
Rehabilitation Loan and it was supported by staff, but the bank may
have turned down the loan. Mr. Kennon indicated that he will follow-
up with a response to the correspondence.
Agency Chairman Rockoff explained that this issue should be
brought before the Council because it is not a part of the
Redevelopment Agency.
In answer to Agency Member Christensen's question, City Attorney
Oberholzer stated that in order for the Baker Street area to be
considered as a Redevelopment Project Area, the Agency would have to
adopt a Redevelopment Plan that would include that area, and it would
have to be approved by the Council. City Attorney Oberholzer stated
that there can be another Redevelopment Project Area within the City.
Deputy City Manager Strenn stated that the issue of Baker Street
becoming a Redevelopment Project Area is being studied as part of
the planning in the Baker Street area. She stated that this effort
would depend on the type of development which takes place, since
that is what causes tax increments to occur.
Agency Member Dickerson questioned if the Lakeview area was
being considered as a redevelopment area.
Mr. Kennon responded that the Council, three years ago,
conducted a study of Census Tract 22 relative to making it a Rede-
velopment Project, and that analysis at that time indicated that the
economics did not make redevelopment feasible. The recommendation
was to consider expanding the area being considered. A large base
is needed in order to make redevelopment economically feasible in
those areas. He stated that this will be re-addressed because of the
changes that have occurred. [,nder existing economic conditions, it
would take five years to have tax increments that are large enough
to pay for its administration.
CONSENT CALENDAR
(a) Approval of Vouchers No. 233 through 249 totaling $20,358.80.
[,pon a motion by Agency MeIaber Barton, item (a) of the Consent
Calendar was approved by the following roll call vote:
AYES: Christensen, Dickerson, ~4oore, Rockoff, Barton, Childs
NOES: None
ABSENT: Ratty
ADJOt~RNMENT
There being no further business to come before the Redevelopment
Agency, Agency Member Christensen made a.motion to adjourn the meeting
at 5:35 p.m.
Bakersfield Redeve ~-'Agency