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HomeMy WebLinkAbout04/25/84 MINUTES RA MINUTES BAKERSFIELD REDEVELOPMENT AGENCY Regular Meeting---April 25, 1984 The Regular Meeting of the Bakersfield Redevelopment Agency was called to order by Chairman Rockoff on Wednesday, April 25, 1984 at 5:00 p.m. in the City Hall Council Chambers. The Secretary called the roll as follows: MEMBERS PRESENT: MINUTES James Barton MEMBERS ABSENT: James Childs Rollie Moore Thomas Payne Art Rockoff Chris Christensen Donald Ratty Upon a motion by Agency Member Childs, the Minutes of the Regular Meeting of April 11, 1984, were approved as corrected. CORRESPONDENCE Memorandum of Understanding between the City of Bakersfield and California Department of Transportation District 6 (CALTRANS) Upon a motion by Agency Member Moore, the Memorandum of Under- standing between the City of Bakersfield and California Department of Transportation Distirct 6 (Caltrans) was referred to the Planning, Development and Project Review Committee. REPORTS 1. Oral report from McDonald Group, Ltd., regarding Financial and Physical feasibility of the Downtown Shopping Center. Mr. Kennon explained that within the Exclusive Right to Negotiate for the Shopping Center there are several issues that had to be resolved. From the onset, the Agency has been involved in a series of studies regarding the site, economics of the development, and costs relative to the Agency's participation. He stated that based on the numbers that have been generated relative to acquisition, relocation and development costs, that the project appears to be economically feasible. The consultants have reviewed the numbers and based upon this review have indicated a detailed analysis should be conducted. This analysis will be brought before the Agency within 4-6 weeks that describes the level of participation by developer and Agency, and any other considera- tions for financing. Discusssions have been held with the administra- tors of Bakersfield College in which they expressed a positive attitude for this project. Mr. John Winthrop, of McDonald Group, Ltd., stated that they are convinced that their vision of a more viable downtown retail sector will become a reality. He stated that they will not request major subsidies. He expressed his enthusiasm to move forward with the project. Agency Member Christensen questioned if McDonald Group planned using eminent domain. Mr. Winthrop stated that the use of eminent domain is within the prerogatives of the City and not up to the developer. He stated that they met with Bakersfield College, which is a major land owner, and they expressed their cooperation. Agency Member Childs requested a review from staff regarding this project. Mr. Kennon explained that the issue of a downtown shopping center has been before the Council and Agency for several years. An earlier effort was terminated approximately 3 years ago. It was proposed at a different location. He commented that this project is a result of inquiries from the developers and businesses as to the marketability or the need for a center. The goals established in terms of what this center's function would be was different than the previous project. For example, they would be addressing the issue of 19th Street and keep the project as close to the core of the downtown as possible. Agency Member Childs questioned if any commitments have been made for any major stores. Mr. Winthrop stated that it is too early to comment publicly on specific negotiations with major department stores. However, they have contacted every major retail chain that is active in California. He stated that, based upon these contacts, they have a reasonable probability of success in obtaining at least four major department stores. Agency Member Christensen questioned staff as to why this project is better than the previous mall project that was proposed. Mr. Kennon stated that there were several decisions made on the first project in which May Co. had decided not to participate and there were decisions made by the Agency/Council to cease any further activities towards the development of that center. A few months after, May Co. reversed its position and began participating in development projects. Had the City Council/Redevelopment Agency continued in the efforts, the project would at present be under construction. The major retailers, with the exception of May Co., all expressed dismay because the project was ceased. Another issue of controversy was the application for a UDAG in which it was later recognized that if the Agency had continued its efforts, it would have been funded in one or two quarters after the decision to stop was made. He commented that there seemed to be much support for this effort from the downtown retail community because it is in the core area and the other project was to the east of the downtown core. Agency Chairman Rockoff questioned a time outline for the progress of this project. Mr. Kennon stated that the report presented at this meeting was required within the Exclusive Right to Negotiate. He stated that a feasibility study and site plan that will describe the project is anticipated within four to six weeks. A commitment from retailers is due in approximately five months, and from that point, it would take approximately three months to develop the Disposition and Development Agreement. Mr. Winthrop stated that the McDonald Gruop, Ltd., was not officially a party to the development of the Exclusive Right to Negotiate, and as such, they had no ability to give any imput into the schedule. When the agreement was entered into, it was with the Moreland Development Corporation only, and they were required to take on a partner experienced in retail center development. 2. Oral Report from Hotel developer regarding Financing for Convention Center Hotel. Mr. Gordon Bell of Aircoa was present and provided the Agency with information regarding the status of the Convention Center Hotel project. He stated that they are talking with two institutional concerning the letter of credit and have not received the final commitment. He stated that the difference between covnentional financing and the industrial revenue bonds has narrowed, and appears not to be one of major significance. They are also proceeding with evaluating the feasibility of the use of conventional financing. He stated that the requirements that were imposed by the use of industrial revenue bonds do not appear to achieve the interest rates that were originally assumed for the project. He indicated that structuring the use of conventional financing is not a long process. Agency Chairman Rockoff questioned if this would cause a delay. -2- Mr. Bell stated that the reason for using this conventional financing would be to shorten any further delays. He stated that there is still monetary advantages to the project in the use of the bonds, but as a backup conventional financing should be used as a vehicle to insure going forward. Acting Executive Director Richard Russell stated that staff is concerned with payment to Bond Counsel which has not been paid to date, and if they pursue conventional financing, the City would like to have payment made. Mr. Bell stated that they have not paid the Bond Counsel, but did sign the note that committed the partnership to do so. Agency Chairman Rockoff questioned if they accept full responsibility for this bill no matter what the financing is. Mr. Bell responded that they have a full responsibility for it whether the project goes forward or not. He stated that this would be an item of discussion between Aircoa and the Bond Counsel depending on which direction the project proceeds. Mr. Russell stated that the bill should have been paid in December. City Attorney Oberholzer stated that the City asked Mr. Stradling to participate as Bond Counsel in this project with the developer paying the cost. He explained that attempts have been made to contact the developer to find out when he is going to pay Bond Cousnel. Mr. Bell stated that he will call the Bond Counsel's office and make arrangements for payment and report back on May 9. Oral report from Moreland Development Corporation regarding consideration of request for a feasibility study to allow for consideration of a hotel within the proposed Truxtun Galleria project. Mr. Gordon Gill, of Millard Archuelta, Eddy, Paynter Assoc., representing Moreland Development Corporation, stated that in March he was before the Agency requesting consideration of a feasibility study for a hotel within the Galleria project. At that time they withdrew their request because they did not want to hamper the negotiations of financing for the Convention Center Hotel project. He stated thatthey will request a delay until the May 9, meeting and if the developer does not have a commitment by that meeting, then a request will be made to consider this issue. Oral report from staff regarding the modification of Truxtun Galleria Disposition and Development Agreement for the purpose of acquiring certain properties by eminent domain. Mr. Kennon stated that requirements to acquire the California Republic Bank parking structure property for the Galleria development were placed on the developer. He stated that the principals involved in this indicated some changes in position, and it would appear that there is good chance that this can be resolved without the use of eminent domain. Mr. Gill stated that they have made significant progress since the last meeting and have reached a verbal agreement with California Republic Bank. He stated that they have met with Chester Avenue Associates and are trying to come to some agreement. He stated that lending institutions are involved and because of time delays, if an agreement can't be reached, they will request to move with eminent domain proceedings in order to proceed with the develop- ment of the Galleria. He, therefore, requested that action be taken and direct staff to prepare the Implementation Agreement and call for the public hearing if negotiations do not result in a solution. -3- Lawrence Guay was present and stated that at one time Cali- fornia Republic Bank had considered moving into the ground floor of the proposed structure but he has been informed that they are no longer interested in doing this. He stated that this changes the negotiations. He stated that there is a problem with closing Eye Street and eliminating the ground parking. He stated that discussions have been held with Mr. Gill and that they are concerned with the customer parking and drive-up windows. Agency Member Childs questioned why the Bank was not going to move into the structure. Mr. Guay stated that it was too expensive, drive-up windows would be eliminated, and parking would be subterranean. Agency Chairman Rockoff stated that it would be better if the parties did not know the Agency's position on this issue when it comes to making a decision. Agency Member Moore stated that at the last meeting he questioned if this was unprecedented, where a Redevelopment Agency project is condemned to assist another Redevelopment Agency project. As a result, he contacted 53 Ward 5 residents and 86 percent opposed giving any consideration to this action, and therefore, he went on record of nonsupport for condemning Redevelopment Agency projects to assist other redevelopment projects. Agency Member Childs stated that he concurred with Agency Member Moore's comments, but that the parties should continue to negotiate and reach a decision. Agency Member Christensen stated that eminent domain would definitely influence the negotiations and he would, therefore, oppose granting eminent domain. Agency Member Barton questioned if the parties are still in negotiations. Mr. Guay stated that they had met and he has made some plans relating to a conversation last week. He stated that at the last meeting he was concerned with eminent domain because it would eliminate his position in negotiations when a possibility still exists to work out these negotiations. Mr. Gill responded that the attorneys for both parties stated that agreement concerning the land acquisition of the California Republic Bank property had been reached by both parties. He commented that Mr. Guay's hope was that he would gain greater parking by realignment of the property line and his review indicates that greater parking will not be achieved by doing it. He explained that they will continue to negotiate and attempt to come to an agreement. He commented that their concern is moving in a timely manner, and if the Agency is not willing to ensure they will move with eminent domain proceedings, they will continue to negotiate but may not be able to meet the time elements in the Disposition and Development Agreement. Agency Member Payne stated that a lot of comment has been provided relative to the Agency's commitment to downtown redevelop- ment, and if the Agency does not use the commitments when necessary, then the Council should get out of the Redevelopment Agency. Agency Member Childs stated that after hearing these dis- cussions, there is still time and room for negotiations, and therefore, made a motion that both parties come back to the May Redevelopment Agency meeting with a solution. -4- Agency Member Payne questioned if it was the function of staff to explore the lender's ability to call the loan for the California Republic Bank property. City Attorney Oberholzer stated that if the Agency used eminent domain that factor would be considered in the cost of acquisition of the property by eminent domain. If they have an agreement which would boost the value of that property as a result of that particular cost of acquisition by eminent domain, this would have to be evaluated. Agency Member Payne questioned if it is necessary to make an inquiry at this time to see if that is their intent. City Attorney Oberholzer stated that it is an obligation of the developer. Agency Member Barton questioned what would cause the lender to immediately call the note. Mr. Kennon stated that this would usually occur when there is a physical or economic change in the project to such a degree that the lender's position is threatened. City Attorney Oberholzer stated that at this point, there have been no reason for staff to proceed to determine what the cost would be of acquisition. This issue is referenced in the docu- ments the Agency entered into with the developer. If property is taken by eminent domain, then the Agency would have to compensate the land holder for that additional cost. That additional cost may be in the form of new financing on the property. Agency Member Childs made a motion to receive and take action on the staff report, and that Mr. Gill and Mr. Guay come back to the May 9 meeting with some solution. Agency Member Rockoff commented that there is a time when eminent domain becomes necessary in order to have a Redevelopment project, and that is why it is written into the law that it should be allowed. He, therefore, felt that both parties should not be aware of the Agency's thoughts because it would hinder their position. The motion made by Agency Member Childs was carried by the following vote: AYES: Christensen, Moore, Payne, Rockoff, Barton, Childs NOES: None ABSENT: Ratty CONSENT CALENDAR a) Approval of Vouchers No. 292 through 309 totaling $297,176.87. Upon a motion by Agency Member Childs, item (a) of the Consent Calendar was approved by the following roll call vote: AYES: Moore, Payne, Rockoff, Barton, Childs NOES: None ABSENT: Christensen, Ratty NEW BUSINESS a) Renewal of Lease Agreement with American National Bank for basement space at 1325 19th Street. Agency Member Barton made a motion to approve Agreement with American National Bank for basement 19th Street. the Lease space at 1325 Agency Member Childs questioned if there were any changes in the monthly rate. Executive Director Russell stated that it is the same dollar amount. -5- The motion by Agency Member Barton was following roll call vote: AYES: Payne, Rockoff, Barton, Childs NOES: None ABSENT: Christensen, Moore, Ratty carried by the ADJOURNMENT There being no further business to come before the Redevelop- ment Agency, Agency Member Barton made a motion to adjourn the meeting at 6:30 p.m. _~ R . R C ,~.~na an Bakersfield Redev~Yopment Agency ~ecretary ~/t Agency -6-