HomeMy WebLinkAbout03/14/84 MINUTES RA MINUTES
BAKERSFIELD REDEVELOPMENT AGENCY
Regular Meeting---March 14, 1984
The Regular Meeting of the Bakersfield Redevelopment Agency
was called to order by Chairman Rockoff on Wednesday, March 14,
1984, at 5:03 p.m. in the City Hall Council Chambers. The Secretary
called the roll as follows:
MEMBERS PRESENT:
James Barton
James Childs
Chris Christensen
Rollie Moore
Thomas Payne
Art Rockoff
MEMBERS ABSENT:
Donald Ratty
MINUTES
Upon a motion by Agency Member Christense,
the Regular Meeting of February 22, 1984, were
presented.
the Minutes of
approved as
SCHEDULED PUBLIC STATEMENTS
Mr. Gordon Bell, of Aircoa, regarding status of Hotel
Project and Presentaiton of management of hotel as a
Clarion Convention Center Hotel.
Mr. Bell stated that the most important apsect of the project
development, at this time, is the securing of the letter of credit
for the $14 million in bonds which were sold at the end of the year
as industrial development bonds. Dean Witter is requiring a full
face value guarantee for the bonds which is equivalent to a full
mortgage from a rated commercial institution. He stated that they
are negotiating on specific financial arrangements with several
institutions that will meet Dean Witter's requirements, but will
also be acceptable to an appropriate financial institution.
An answer on the negotiations will be forthcoming in the next
few weeks. With the completion of these negotiations and acquiring
the letter of credit, the City can begin to assemble the properties.
Mr. Bell stated that they have now spent more than $300,000
at this point, and without the letter of credit, they are reluctant
to spend funds for design and planning. An architect has been
hired and some time has been spent with regard to preliminary
design in order to prepare for the April 25 deadline which is
outlined in the Disposition and Development Agreement (DDA).
Mr. Bell clarified that the identification of the Clarion Hotel
was not a featured aspect of the discussions with the Agency, and
therefore, explained what the Clarion Collection is and how it
relates to this project. They are a management company which
includes several major hotels. He explained that the key economic
elements of the Clarion are promoting, attracting and accommodating
major conventions and meeting activities, and it is estimated that
90 percent or more of the franchise fee will go back into the
marketing efforts.
Agency Member Christensen questioned the relationship with the
Sheraton Corporation.
Mr. Bell stated that Aircoa was invited into the project by
the previous developer last summer, and by the end of December,
there was a commitment to become a part of the project. At the
time Aircoa entered the project Sheraton had accepted the proposal
to be the franchise. Because of the project Aircoa wished to
develop, there were certain advantages in not completing the
franchise agreement.
Agency Member Christensen questioned why the Agency was not
aware that the Sheraton was out of the picture.
Acting Executive Director Russell clarified that at the
Agency Meeting in October it was announced that Clarion would be
the hotel operator.
In continuing his presentation regarding the hotel financing,
Mr. Bell stated that before a letter of credit is even considered
a full real estate evaluation of the project must be made. The
real estate evaluation essentially looks at the financial viability
process twice with a different set of evaluations from a policy
and financial standpoint. He stated that it is almost twice the
complexity of a regular mortgage because of the tax exempt
nature of the bonds and other implications associated with the
project.
Agency Member Payne stated that the Agency was left with the
impression that the Clarion would operate under the Clarion banner,
but they would operate the Sheraton of Bakersfield.
Mr. Bell stated that Aircoa is the largest franchise of Sheraton,
and they have a long-standing association with the Sheraton
banner. He explained that the Clarion Collection offers, both to
the investors and owners as well as to the community in which
the Clarion will be located, an identity of a group of hotels
that is unique to individual cities and has real financial merits
in terms of profitability of the hotel and is certainly one that
will not lessen the image of the downtown hotel associated with
the Convention Center.
Agency Member Payne questioned if Aircoa would manage under
the name of Clarion.
Mr. Bell stated that they would manage under the name of
Clarion just as they did under Sheraton or Hilton or any of the
others. Mr. Bell explained that the agreement by Mr. McBride's
organization required that they submit a market feasibility
report as a condition of Sheraton granting a franchise. That report
was not sent in.
Agency Chairman Rockoff stated that the Agency is primarily
committed to this hotel project, but has very little control of
what is being discussed relative to a second hotel. He asked if
there was any reasonable time line that they can present to the
Agency to give them some guidance of how the Agency should react.
Mr. Bell explained that they are dependent on the financial
institution that is looking at the project in terms of their
participation. The real estate review of the project has been
completed. He indicated, in regard to the discussion of another
hotel being built in the downtown, that they feel that the market
study that was done for this project was one that was marginal,
and changes had to be made in the DDA in order to strengthen this
project. He further stated that they are far enough along into the
discussions to feel that this project will be completed.
Agency Member Moore questioned if Mr. Bell
the proposal of a second hotel would impact his
financing.
envisioned that
ability to get
Mr. Bell stated that the discussion has not impacted the
situation because it is not concrete enough, but if there were a
firm commitment that the project would go ahead, it would have an
impact.
Agency Chairman Rockoff requested that Mr. Bell appear at
the April 11 meeting and present some finalization of what has
been discussed at this meeting.
Agency Member Childs questioned how Mr. Bell spent the $300,000.
Mr. Bell explained that the bond fees alone, associated with
closing the project, were approximately $150,000, and the fees
that were spent on the project prior to that exceed $150,000.
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2. Mr. Terry Moreland regarding status of Truxtun Galleria
Project.
Mr. Gordon Gill of Millard Archuleta, Eddy, Paynter Associates
was present representing Mr. Terry Moreland, and gave a status
report on the Galleria project and the progress made since the
County took the action to approve the sale of the Hall of Records
building and agreed to lease 2 floors in the first tower. He
stated that interest has been expressed in 11 of the 14 floors in
the tower, and they are progressing with the financing efforts.
He explained that the Sheraton Hotel had contacted the
Moreland Corporation and indicated a desire to explore the pos-
sibility of locating within the Galleria project. He stated that
many cities incorporated hotels into a commercial project with
the advantages of joint use of parking facilities, downtown
shopping and using the facilities which could assist in bringing
corporate office into the downtown area. Mr. Gill requested that
the Moreland Corporation be given the right to take the first
step with regard to exploring whether an additional hotel would
be a viable aspect to be considered in the Galleria project. They
would hire a recognized marketing firm that would do a market
study based upon today's conditions in Bakersfield in the downtown.
If that study were positive, then they would come back and bring
the study, and request to amend the DDA with regard to the Galleria
project to allow for aSheraton commercial hotel to be developed
as part of the project.
Agency Chairman Rockoff questioned if the market study would
include the proposed Convention Center Hotel.
Mr. Gill indicated that the proposed Convention Center Hotel
would have to be considered in the market study.
Agency Member Childs questioned staff if the original agree-
ment with Moreland is only for office and retail space.
City Attorney Oberholzer stated that the agreement only
provides for a multi-use, office-retail complex and would there-
fore require a change to the DDA, if the Agency chose to allow
a hotel to be incorporated into the Galleria.
Agency Member Childs expressed concern that the Moreland
Corporation would consider a hotel when the other developer is
trying to finance his project, and therefore, he could not support
an amendment as requested at this time.
Mr. Tom McBride, of Hedrick/McBride Development Co., was
present and stated that he is working with Aircoa and could only
answer in general terms. He stated that since they would be
working in the same market area, it would definitely be a con-
flict. Mr. McBride outline some aspects of a market feasibility
for another hotel.
Agency Chairman Rockoff stated that he would not want to change
the DDA without a very definitive study that would indicate the
proposed Sheraton Hotel in the Galleria would not have a detrimental
effect upon the Convention Hotel because the Agency has given
Aircoa their first commitment.
Agency Member Payne stated that he understood Mr. Gill to say
that if the Moreland Corporation commissioned a feasibility study
which indicated that both hotels could be supported in the down-
town would this body consider renegotiating the DDA if there was an
occasion to do so.
Mr. Gill stated that they have been supportive of the Con-
vention Center Hotel since its inception, but they were contacted
by Sheraton which indicated a desire to come into downtown Bakers-
field versus locating some place else in Bakersfield. He stated
that if the study came out negative, they have no desire to bring
the Sheraton to Bakersfield.
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Agency Member Payne stated that he is supportive of downtown
redevelopment, but does not want to get into the position of
using the government as a vehicle to control what does and does
not succeed with their downtown redevelopment project.
Agency Member Payne stated that if the study was conducted and
it was a credible study and indicated both projects could be
successful, he would support a renegotiation. He stated that he
is not opposed to renegotiating if it could benefit both projects.
Agency Member Barton stated that Mr. Gill's request creates
a lot of questions and the Agency shold meet with staff to
discuss them. He requested that this matter be referred to a
committee to investigate some of these concerns; impacts, credi-
bility, of the market study, DDA and what impacts it would have
in regard to the Clarion Hotel. He made a motion to refer this
matter to the Planning, Development and Project Review Committee
to report back to the full Agency.
Agency Member Moore made a substitute motion that a clear
signal of support be given to Aircoa and have them come back and
address the Agency about financing no later than the llth of
April, and let it continue to run, but allow the Moreland Corpor-
ation to conduct a marketing survey by an independent, nationally
recognized organization agreed to by staff and Moreland Corporation.
Upon completion of that study, the Agency will review it, and if it
is in the best interest of the project, the Agency would make an
amendment to the DDA and allow the development of a second hotel.
Agency Member Christensen asked when the date of the Galleria
option would expire, and if a conclusion could be reached by
that date.
Mr. Gill stated that the information normally takes about 90
to 120 days to conduct these surveys which would be on the second
tower of the Galleria.
Agency Member Christensen indicated that without more infor-
mation, he could not make a final decision on the request.
Agency Member Childs questioned who would pay for the study.
Mr. Gill stated that the Moreland Corporation would pay for
the feasibility study.
Agency Member Moore stated that he realizes that Mr. Bell
indicated that another proposed hotel might hurt the project and
that was not the intent of his motion. He questioned would it
hamper Aircoa's progress if the Agency requested that the Moreland
Corporation, at their expense, conduct a market survey by one of
the nationally recognized firms agreed to by staff and Moreland
Corporation to see if this community can accommodate a second hotel
project and once the survey is completed, the results would come
back to the Agency for review and determination. At that time, if
it is the feeling of the Agency, it would consider changes in the
DDA to accommodate the request.
Mr. McBride indicated that he would have to confer with his
partners and Aircoa before answering the question. Mr. McBride
stated that he would have to tell the bank about what transpired
at this Agency meeting and this action would not do them any good.
Mr. Bob Casaro stated that any time you state there is going
to be a second hotel in the downtown there is concern. He stated
that the previous study did not include the hotel built on Pierce
Road, and the one built on the south part of town. So it does have
an impact on possible financing. He stated that they would be in
conflict with the new development.
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Mr. Gill suggested to the Agency that they take no action with
this request, that it be delayed until April 11 in order to review
the situation again. He commented that they are in total support
of the Convention Center Hotel and do not wish to hamper the
progress of that project. He clarified that they had not contacted
the newspaper regarding the Sheraton locating in the Galleria. He
withdrew the request and deferred it until the April 11 meeting.
Agency Member Moore withdrew his substitute motion in view
of the comments made.
Agency Member Barton withdrew his motion with regard to
comments by Mr. Gill.
Agency Member Childs made a motion that no action be taken
on the request by the Moreland Corporation until the April 11, 1984
meeting. The motion was carried by the following vote:
AYES: Barton, Childs, Christensen, Moore, Payne, Rockoff
NOES: None
ABSENT: Ratty
REPORTS
Report No. 1-84 from the Acquisition, Relocation, and
Personnel and Operations Committee regarding the
Proposed Management Plan for 18th and Eye Street Parking
Structure.
Agency Member Childs made a motion to accept Report No. 1-84
of the Acquisition, Relocation, Personnel and Operations Committee
and the recommendations contained therein, which was carried by
the following vote:
AYES: Barton, Childs, Christensen, Moore, Payne, Rockoff
NOES: None
ABSENT: Ratty
Agency Chairman Rockoff questioned if 7:00 p.m. was an
appropriate closing time for the structure.
Mr. Kennon stated that this was carefully considered and was
based upon concerns of liability and safety.
Agency Member Moore questioned if the merchants can purchase
validation books in various denomination and if they are paying
the full amount as a regular participant of the garage.
Mr. Kennon stated that these merchants would be paying the
full amount.
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Report No. 4-84 from the Planning, Development and
Project Review Committee regarding the Facade Improvement
Grant Program.
Agency Member Barton made a motion to accept the Report No.
4-84 of the Planning, Development and Project Review Committee.
Agency Member Christensen questioned if those businesses
located in the 19th Street area would qualify.
Mr. Kennon stated that all of the businesses would qualify
except those in the area where an Exclusive Right to Negotiate has
been granted for the Regional Shopping Mall.
Agency Member Christensen made a motion to recess the meeting
until 7:05 p.m. in order to call the City Council meeting to order.
The Redevelopment Agency Meeting was reconvened at 7:05 p.m.
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NEW BUSINESS
a)
Resolution No. 1-84 of the Redevelopment Agency of the
City of Bakersfield fixing the dates of meetings of
the Redevelopment Agency during the months of April,
May and June, 1984.
Upon a motion by Agency Member Moore, Resolution No. 1-84
of the Redevelopment Agency was approved by the following roll call
vote:
AYES: Barton, Childs, Christensen, Moore, Payne, Rockoff
NOES: None
ABSENT: Ratty
b) Request from Katz Hollis for increase in basic fee
structure.
Agency Member Payne made a motion to approve the fee increase.
Agency Member Childs questioned what the basic fee increase
will be.
Acting Executive Director Richard Russell stated that it was
five percent, and there has not been an increase since 1981.
The motion made by Agency Member Payne was approved by the
following roll call vote:
AYES: Barton, Childs, Christensen, Moore, Payne, Rockoff
NOES: None
ABSENT: Ratty
c) Exclusive Right to Negotiate for the Downtown Professional
Center proposed by Peter Mosesian.
Mr. Scott Danielson, director of architecture for Parsons
Brinckerhoff, was present to explain the two projects; the Downtown
Professional Center and the Downtown Government Center.
The Professional Center is to be located on the block bounded
by 17th and 18th between "K" and "L" Streets. The first phase
tower would include offices on the south quarter of the site behind
the current building. He explained that as the development and
leasing of the first phase tower was built, there would be a second
tower built on the remaining property. The current structure
would be razed and a new facility built. A retail study would be
made during the negotiation period which would define a mix of
various shops and restaurants and activities that would be available.
The structure would be ten stories, public parking on four stories,
retail shops and a full basement with parking. The financing
strategy is to make a condominium/office facility. The egress into
the garage is on "L" Street, and to the basement is on "K" Street.
Agency Chairman Rockoff questioned if the parking is just
sufficient to cover the project, or will there be proposed parking
for others in the area.
Mr. Danielson explained that there would be additional parking
for requests that the City has received.
Mr. Kennon stated that 350 public parking spaces would be
made available.
Action on this item was taken later in the meeting.
d) Exclusive Right to Negotiate for the Downtown Government
Center project proposed by Peter Mosesian.
Mr. Danielson outlined the proposed Downtown Government Center
which would be leased out for future county and state offices. The
facility would be located on Truxtun Avenue between "P" and "O"
Streets. He commented that the reason for trying to keep the ground
floor open to offices is there are many government functions that
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want walk-in access. He stated that the public parking would serve
the Federal Center, and also, on weekends and evenings, would
serve as overflow parking for the Convention Center and functions
at the hotel. It is a 12-story building, with a particular
concern for future government costs which would be to explore
a very wide ranging and advanced technology of solar or engineering
conservation. He stated that another option would be to dig deeper
in the basement level, creating landscaped terraces down from the
sidewalk and to put the proposed county library underneath the
structure.
Agency Member Christensen questioned the length of the
Exclusive Right to Negotiate for the two projects.
Mr. Danielson stated that each would be 180 days from the
date they are approved.
City Attorney Oberholzer indicated that the proposed Exclusive
Right to Negotiate has a provision for 180 days to develop an
agreeable scope and schedule of development in which the developer
puts up a $2,500 non-refundable deposit.
Agency Member Moore questioned if the County would be the
primary user of the facility.
Mr. Danielson stated that this was in the initial discussions
which, until certain requests and other commitments would be made,
however, there are certain indications of state needs for rental
space. If, during the 180 days while seeking interest from
potential tenants, it does not materialize, then the agreement
would expire.
Agency Member Childs requested that the line on paragraphs
two and three of page 2, "The Agency will not unreasonably withhold
extension of the negotiation period," be deleted. He explained
that if all conditions were met, then the sentences would not be
needed.
Agency Member Christensen made a motion to adopt the Exclusive
Right to Negotiate for the proposed Downtown Professional Center,
which was carried by the following roll call vote:
AYES: Barton, Childs, Christensen, Moore, Payne, Rockoff
NOES: None
ABSENT: Ratty
Agency Member Christensen made a motion to adopt the Exclusive
Right to Negotiate for the Proposed County Government Center which
was carried by the following roll call vote:
AYES: Barton, Childs, Christensen, Moore, Payne, Rockoff
NOES: None
ABSENT: Ratty
e) 18th and Eye Street Parking Structure Contract Change
Order No. 5.
Agency Chairman Rockoff questioned why this was being brought
to the Agency for approval before the ribbon cutting ceremonies.
Mr. Kennon stated that it took 30 days to resolve the issue.
A problem occurred 40 or 50 feet below the surface during the
drilling for the elevator shaft, and it was agreed by all parties
that this was a problem that was entirely out of control of the
contractor. He stated that two formal meetings have been held
on this issue involving city departments as well as consultants.
Upon a motion by Agency Member Barton, Contract Change Order
No. 5 for the 18th and Eye Street Parking Structure was approved
by the following group vote:
AYES: Barton, Childs, Christensen, Moore, Payne, Rockoff
NOES: None
ABSENT: Ratty
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ADJOURNMENT
There being no further business to come before the Redevelop-
ment Agency, Agency Member Christensen made a motion to adjourn
the meeting at 7:35 p.m.
W.D.~--~/~NBOTHAM, JR~retary
Bake~,~Feld Redevelo~en~Agency
ARTHUR L. ROC~KOFF, ~an
Bakersfield Redevelo~fmVnt Agency
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