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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. -2- 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. -3- 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. -4- 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. 2 o 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. -5- 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 -6- 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 -7- 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 -8-