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.
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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.
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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.
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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.
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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.
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