HomeMy WebLinkAbout05/12/83 MINUTES RA MINUTES
BAKERSFIELD REDEVELOPMENT AGENCY
Regular ~.~eeting Continued-May 12~ 1983
The Regular [[eetin~
was continued on ~ay 12,
by Chairman Barton.
of the Bakersfield Redevelopment Agency
1983 a~ 12:~0 n.m.~ and called to order
MEMBERS PRESENT:
James J. Barton
John ~ieans
Thomas Payne
Art Rockoff
Vernon Strong
MEMBERS ABSENT:
Chris Christensen
Donald Ratty
SCHEDULED PUBLIC STATES.lENTS
Mr. McBride of Hedrick/McBride Development Company, continued
his discussion regarding the proposed Convention Center Hotel. He
stated that the letter of credit from the Bank of America zs
critical for permanen5 financzng. He explained that the letter of
credi~ does not say you have construction financing; it doesn't
say you have a permanent loan for 30 years; it states that the
hotel will be built. He stated thaE the manager of Bank of Amerlca~
who is in charge~ ~ 17 branches, w-ill come te Baker.s~Le.l~_~o meet with
the invessors. He suggested that the Agency appoint someone from zhe
City to meet with him. He. stated that the absolute minimum extension
that he is requesting is 135 days, but he would prefer 150 days.
Mr. Kelmar stated that when the gentleman comes from the Bank
Of America, the City can have a consultant mee~ with him to make
a determination and report back to the Agency.
Mr. Means stated that Hr. ~{cBride alluded to some considera-
tion in changzng the size and improving the project if financing
were i~aproved. Mr. ~eans sza~ed ~hat if Er. McBride stands ~o
~a~{e additional money on that prolec~ he would be well advised ~o
maxe sure that the Agency ge~s a percentage of that.
~ir. ~lcBride stated thaE ~[r. Corsaro made it public that he
wonld get this hotel built; that many people have znvested in
this and some own businesses in the downtown. He stated that if
there is a change as suggested, the Corporation Commissioner
will require that he go back and redo the entire offering.
~.r. ~eans qu~es-tioned the s-taff on the City's or consultant's
perspective on ute a~ditional time providing the differenn kinds
of fJ_~ancln%~ and the reasonableness of not committing any deal.
~ir. Xelmar stated ~na% he has no [3robiez~ with %he. e~%ension:
but there is a problem with the Schedule of Performance because
of the mechanism that he is using to finance the project. He
statec that Mr. McBride and his investors have entered in~o a
business transaction and are expecting to make a profit. When the
City e~.uered ~nto this transaction, it was predicated on certain
interes-~ ra-aes and on the fact ~hat a first lien holder would
alsc requzre a percentage of the gross, and, based on these
assumptions,, a deal was negotiated and ~,[r. McBride felt it was
a fair deal, the City thought it was a fair deal and the City
would never negotiate a deal that wouldn't result in the success
of the project. He stated that ['~r. ~XcBride is asking for an
extension which would save him money, but could result in addi-
tional cost uo the City. There are two property owners zn that
area that have already located sites for relocation, but the sites
may non be available in the next, fe~- months, and the City zs facing
increased costs for the improvev~en~s at the Civic Auditorium.
Be stated tha~ the consultants feel that there should be so,ne
participation on the part of the City in the enhanced develop-
ment opportunity if zax-exemp5 bonds are utilized. He further
stated that if the interest rates went up, staff would recommend
that we renegotiate the agreement.
~r. ~eans stated that the City has an obligation to the tax-
payers to see that the hotel provides a benefit to the community.
It is the City's responsibility to see thaL this projec~t does not
· ncur any financial liability to the City~ and that it benefits
all the people. His first concern is the ~rotection of the tax-
payers.
~[r. Oberholzer ssated that the Disposition and Develop~uent
Agreement was signed with the developer which has certain per-
formance criteria and dates that must be complied with. This is
the first one to arise for which an extension is being requested.
The DDA indicates that if the developer is unable to finance the
equity or negotiate acceptable financing, the developer may apply
for modificanion of those standards or may terminate this agree-
ment and receive his interest. He stated that if the Agency
consents To proceed on this issue before -the DDA can be modified,
there has to be a ]oint public hearing of the City Council and
Redevelopment Agency requiring two weeks notice of public hearing.
~dr. Rockoff con~ented on the forfeiture of the deposit~
that 'the City oe rei~lrsed [or any tzme, consultant fees, and
costs of trymng to schieve a new project. He feels the City should
be monetarily ?rotected against the failure of the developer to
perform.
Mr. McBride explained that you cannot be certain of what might
happen in the stages of financing. He stated that he cannot meet
the requirements of the forfeiture because he has to stand behind
the people who are investing in this project.
~]r. Payne stated that Mr. McBride should be sure that the
number of days he ms requesting is sufficient because he will no~
support another extension. He stated that the City has a risk and
has advanced funds, and has an obligation to prosect the ~ax-
payers of the City.
~ir. McBride stated that he requests the City gmve an extension
of 135 days to solve these problems with the understanding that he
and 'the Bank of America regional vice-president will work with
the City to ~uake this letter of credit satisfactory.
[Pr. Payne questioned whether this would be evidence of
permanenr~ financln~ in that the Bank of Ar.~erica is guaranteeing
that this hotel will be built.
~ir. Kelmar suggested that the Agency grant a one-month exten-
sion in order to get the letter o~ credit. If this is acceptable
and the City has the permanent financing, mhen he sees no problem
with allowing another four months or so from that time.
Mr. Oberholzer stated that a new Schedule of Performance in
the DDA to reflect that'extension is required. Also, the DDA
provides that until you give the developer written notice to cure
6. default, they can continue on in that default status. Once
the written notice is received, he has 30 days to cure the default.
If the Council and Redevelopment Agency simply proceed, then the
May 14 date will continue.
Mr. Strong stated that there are three positions on the part
of the Agency, one is whether to grant an extension, the other ms
whether the Agency will insist upon participating in any potential
proceeds accruing from the interest rate; and three, an additional
default of deposit. Mr. Strong stated that he could not see
how the City could insist on a specific amount of money accruing
with some potential favorable interest rate because the interest
rate is unknown. Mr. Strong asked if the Attorney could explain
wha5 can be done zn order to protect the City and participate
monetarily in the bond financing process.
Mr. Oberholzer questioned Mr. McBride if he needs to present
to them a document or can the Agency simply let time run without
issuing a letter.
Mr. McBride stated that he needs a letter. He stated that if
the regional director of the Bank of America and the Attorney
agree that the letter of credit is the evidence of financing he
needs, the Agency can start acquiring property, and the $100,000
becomes nonrefundable.
~r. Oberholzer said that if the terms o~ the DDA are not
altered, the Agency can recommend an extension and it would be
appropriate for the Redevelopment Agency to recommend that an
extension be granted and that a resolution be adopted regarding
the terms of the extension.
Mr. McBride stated that if this body made that recommendation
and voted for it, then he can take that to the Corporation Com-
missioner and probably get the stamp of approval on the syndication.
~'~ir. Oberholzer stated that a copy of the minutes would )e
sufficient for ~qcBride to process the paper through ~he Co~missioner.
[[r. Strong made s motion to set a public hearing if required
and grant the extension.
Mr. Rockoff stated he would oppose the motion because he does
have sufficient information on the $100,000 deposit.
Mr. Barton motioned to recess, in order that Mr. Obemholzer
could get the information requested, at 1:45.
~[eeting commenced at 1:50.
Mr. Oberholzer stated that the DDA has specific provzsions
with respect to the right of the developer ~o get his deposit
Dack. Those conditions are:
1) If the Agency is unable 5o deliver the lease holder interest
of the site;
2) If the feasibility re~ozt indicates it was not a feasible
project; this has been claimed feasible.
3) If the developer is unable ~o deliver permanent financing.
~here is a provision that he can ask for modification or termzna~e
his deposit~ and
4) In the event the City's ordinance prohibits the building
of this project on the property. Once the City passes this stage,
all of those conditions will proceed along, anything else will be
a default, and the Agency would have the right of the deposit.
Mr. Means stated 5hat the motion should include that staff,
on June 8, will show the Agency how they would be able to recover
the costs associated with this project and the City's interest and
revenue as part of the bond financing.
Mr. McBride stated that he needs the minutes of the Agency
recommending the extension, and that the Council is the Agency.
He commented that this will sell th~ idea.
Mr. Means stated that he would like, in the future if the
bond issue goes, to look at the issue of revenue that may come
J. nto the City.
Mr. Oberholzer stated that no bonds will be issued without
the approval of either the Agency or the City Council. The Agency
or Council can say they do not want ~o agree no the issuance of
bonds, and if that happens, he has to find a method of financing
that will be done within 150 days.
~Ir. Strong made a motion to recommend a 150-day extension of
the date for approving permanent financing and that a public
hearing, if it is required, be held on that issue for the purpose
of modifying the DDA on June 6, which was followed by the following
roll call vote:
AYES: Strong, Barton, [leans~ Payne, Rockoff
NOES: None
ABSTAINS: None
ABSENT: Christensen, Ratty
AGENCY STATEMENTS
Mr. Payne made a motion to approve all documents of the Tax
Allocation Bonds for the proceeds no be used for the Agency's
18th and ~ye parking structure bonds and for other Redevelopment
Agency projects. The ~otion was carried.
AYES: Barton~ Nean~, Payne, Rockoff, Strong
NOES: None
ABSTAINS: None
ABSENT: Ch~i.s~ensen~ Ratty
REPORTS
~r. Payne read Repor-c No. 1~3 ~roYr the Landbanklng and
Parking Committee.
Nr. Payne made a motion ~o approve the recommendations.
motion was carried.
AYNS: ldeans, Payne, Rockoff, Strong, Barton
NOES: None
ABSTAINS: None
ABSENT: Christensen, Ratty
The
CONSENT CALENDAR
[ir. Bidwell was present no give the recommendations of
Design Review Board for the approval of signage at 1631-17th
Street and the 18th and }Lye Parking Structure.
the
The Design
snrucnure.
subject
1)
2)
3)
,~)
Review Board revie_we_d_ the_ 18. th~
Board recommends approval of the parking s-crucnure
· ao hhe following considerations:
The screening of the automobiles above the third level
· ~.uid be better achieved ~eitlT solid mas'cnnry
The masonry walls that are on the east and west elevation
are plain concrete blocks. It is suggested that there
be some hex-cure.
The landscaping plan be submitted along with the irrigation
plans to the City.
Cable barriers are sonething to consider in the building
code. There is a requirement than there be a guardrail
or barrier where you have an open floor to prevent anyone
from being able to ge-c through the cables.
Hr. Kelmar questioned Nr. Bidwell as to the cost of the
cables vs. 'the cost of the [aasonry 3anels.
Mr. Bidwell stated that the only example was one that other
members of staff had prepared and could provide that figure.
(f)
Resolution of the Redevelopment Agency committing Lo
provide interest d~e October 31, 19~ on its $6,130,000
Downtown Bakersfield Redevelo~men~ ?roject Tax Allocation
Bonds, 1983
Mr. Stradling stated that funds were taken out for payment of
interest, and Standard and Poor wants Lo be assured the Agency would
use other Agency funds in the event tha~ tax increments were not
available.
~ir. Payne made a motion to adopt Resolution No. RA9-83, of the
Redevelopmen~ A~ency committing to provide interest due October 31,
1953 on its S6,130,000 Downtown Bakersfield Redevelopment Project
Tax Allocation Bondsf 1983, which was carried by the following roll
call vote.
AYES: Strong, Barton, Christensen, Payne, Rockoff
NOES: None
ABSTAINS: None
ABSENT: Means. Ratty
(g)
Adopt motion that reimbursement payments required pursuant
5o Agreemen~ No. 74-67 are subordinate to all pledges of
Lax revenues for the payment of the Redevelopment Agency
of the City of Bakersfield Redevelopment Project Tax
Allocation Bonds, Issue 1983.
~r. Stradling indicated that when the Agency entered into the
financing of the "K" Street garage, there was an agreement to pay
the City any excess amount required for payments. In order to get
these payments, the Agency agreed to make those payments from tax
increments and any other funds of the Agency. Standard and Poor
wants to be assured that you understand that those pay!~ent will
no~ have a priority over the tax revenues that are going to be
allocated for the payment of debt for the tax allocation bonds.
~r. Strong made a moLion to adopL a motion that reimbursement
paynents required pursuant to Agreement No. 74-~7 are subordinate
to all pledges of tax revenues for the paymenL of the Redevelopment
Agency of the City of Bakersfield Redevelopment Project Tax Alloca-
tion Bonds~ Issue 1983~ which was carried by the following roll call
AYES: Barton, Christensen, Payne, Rockoff, Strong
NO~M: None
ABSTAINS: None
A~E~T: i~eans: Ratty
~Y: ': OU~[~.NMENT
There being no further business to come before the Redevelopment
L~ncy~ ~r. Payne made a motion to adjourn the meetin~ at 5:21 p.~.
~irman
akersfield Redevelop~{~nt Agency