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HomeMy WebLinkAbout09/26/79 MINUTES RA JOINT MINUTES BAKERSFIELD REDEVELOPMENT AGENCY Joint Meeting and Workshop - September 26, 1979 The Bakersfield Redevelopment Agency's Regular Meeting scheduled for Tuesday, September 25th was postponed one day, and a Joint Meeting and Workshop of the Agency and the City Council was held Wednesday, September 26, 1979 at 7:00 p.m. in the £ity Council Chamber in City Hall for the purpose of discussing the proposed Downtown Shopping Center. MEMBERS PRESENT: Vincent Casper, Chairman ABSENT: John S. Mooneyham Jeanne Foth Robert E. King Frank S. Lewis Ralph H. Poehner, Vice Chairman Dr. Glenn D. Puder STAFF PRESENT: H. E. Bergen, Executive Director D. S. Needham, Deputy Executive Director Philip Kelmar, Treasurer Richard Oberholzer, Assistant City Attorney M. A. Tooker, Development Services Coordinator E. B. Jacobs, Agency Special Counsel C. E. Hollis, Agency Financial Consultant OTHERS PRESENT: Jerry Keyser, Keyser-Marston Associates, Marketing Consultant D. W. Donahue, President, John S. Griffith & Company, Developer dOINT MEETING AND WORKSHOP A copy of the Minutes of the Council of the City of Bakersfield dated September 26, 1979, marked Exhibit "A," reflecting all action taken at the Joint Meeting and Workshop is attached hereto and thereby made a part hereof. Following adjournment of the Joint Meeting and Workshop at 9:35 p.m., the Bakersfield Redevelopment Agency continued its Regular Meeting as follows: MINUTES a) mailed. Minutes of the Regular Meeting of August 29, 1979 were approved as FINANCIAL a) V?ucher Approyal - On motion by Mr, Lewis, seconded by Mr. King, and carried, Vouchers Nos. ~--through 20 (Voucher Register dated September 26, 1979) totaling $14,615.89, were approved for payment. PROJECTS a) .~owntown Pa~kin~ - Mr. Needham advised that appraisals on the Sill and Hoenshell properties were not yet available, but he expects to have them by the next Agency Meeting. GENERAL a) Correspondence - Mr. Needham reported receipt of a copy of a letter dated September 14, 1979 from Bell Tower Associates transmitting a financial analysis of the I'Old Church Plaza" project to Agency financial consultant, Cal Hollis. This concerns their appeal to the Agency for assistance in their attempt to purchase Lot 1, Block 288 from Mr, Gilbert Burns for parking needs for their project. Following discussion, Mr. King moved that staff be directed to discontinue expen- ding funds in an attempt to help resolve the dispute between Bell Tower Associates and Mr. Burns regarding Mr. Burns' property. The motion was seconded by Ms. Foth and carried. ADJOURNMENT There being no further business to come~.~ef~he Agency, Chairman Casper 'adjourned the meeting at 9:45 p.m. ~g~' ~'. ,~-'--~~- Bakersf~'~g~e' elopment A~ge-n~c~ Bernice E. Stewart, Secretary to the Bakersfield Redevelopment Agency I' ' ~'. ~' B'~ersfield, Cal.~forn~. SeptemOer 26~ 1979 M~nutes of a Joznt Meeting and Workshop of the Council oi %he C2%~ of Bakersfield and the Bnkers£zeld Redevelopment Agency, held in ~he Ceunci! Chambers of City Ha!l at 7:00 P.M., September 26, ~979 The meeting was called to order by Vice-Mayor Barton, f(,ilowed by the Pledge of Allegiance and Invocation by Dr. Glenn D Puder. · The City Clerk called the roll of the Council, as follows: Present: Councilmen Barton, Christensen, Means, Miller, Payne, Ratty, S~rong Absent: Mayor Hart. The Agency Secretary called the roll of the Agency, as fellows: Preset%: Absent; Agency Members Casper, Foth, King, Lewis, Poehner, Puder Agency Member Moone.%ham Agency Member Poehner stated that due %o a real or imaginary conflict of interest he would not participate in the following matter. Vice-Mayor Barton stated the Joint Meeting ~ad Workshop was called for the purpose of discussing ~he proposed Downtown Shopping Center. Mr. Eugene B. Jacobs, Special Counsel for the Redevelop- ment Agency. with t~he aid of a map, pointed out the areas being proposed for the downtown shopping center and hotel site. which wi]l require an amendment to the Redevelopment Plan. The proposed site for the downtown shopping center is bounded by-23rd Street on the north, 20th Street on the south, "L" Street on the west, and "Q" Street on the east. The proposed hotel site ia bounded bM Truxtun Avenue on the north, 14th Street on the south, "N" Street on the west, and "Q" Street on the east. Mr. Jacobs outlined the steps necessary to aJnend the Redevelopment Plan and stated the ~o~nt public hearing on this matter will probably be scheduled for December 5, 1979. With the aid of a site plan, Hr. Jacobs reviewed the land acquisition process, demo]ition of buildings & a~te ctear~nce, i X H I B I T "A" Bakers:telO. Ca~.Lforn~a, Sf=pler~bez 26, 1979 - P~ge 2 design of the shopping center and surr~,uuding parking facilities. The Agcn,¥ would develop surface and ~tructured parking and lease xt hack ~o the developer. The developer would carry the cost of maintain nE a~d operating the park:;lg The Agency would receive $7.~00.0G0 O0 up front ~or the purchase price of the parking and $800,000 00 per )'ear for the fid'st, five Fears. and $900,000.00 per ~ear thereafter for the length of the lease. Tpx lacremest financxn~ ~ill provide the nddltlonal funding, The assessed valuation now and thereafter will produce s cash flow. The purchase price, combined ~lth the $800,000 and $900,000 per Fear for the paukisg lease and tax increments, w~ll PaY off the Agency's r~spo~sibilitl~s. If the amendment to the Redevelopment Plan is ad¢~ted on Dec,~mher §, 1979, within a certain time period the developer will advance the purchase price of plus $2.00~,000.00 for the Agency's working capital so they will Mr. Dan Donahue, President of John 8. Griffith Bakersfield. The parking configuration has been revised because it is cheaper'to b~ild on-site parking rather than deck parking. Because parking is the City's obligation, the first phase will contain approximately 3,450 parking stalls; 2,530 stalls will be at ~rade, and the deck will have approximately 9~0 parking stalls on a one level deck. In the first phase it'is proposed to build four department stores. Those four stores wlll have .as aggregate total of 500,000 square feet, and in addition 278,000 square feet of retail shop area will be built (approxi- mately 150 retail stores). That amounts to a total of 775,000 square feet in the first phase. Mr. Domahue poin~edou~, on the site plan, the location where the fifth department s~ore could be built. When the fifth department store is constructed, the B~ker~,.,ld, Cahio~n~, September 26, 1979 - Page 3 %h~ pa"k.rg for t~t store. The initial parking ratio will be 4{ car.~ per ],000 ~quare ~ee~ of leasable area, which is lower %has normal. I~ is felt that when the fifth store is constructed ~hst the ratio shouJd he raised to five, and that has been made part of ~he contract with %he City. Johu S. Oriffith & Company feels %cry confident ~hat the initial four stores will be signed very shortly. A~I of the shopping center complex w~ll be owned by John S. Gr~ffith ~ Company. and the department stores will be deeded Ehe~r parcels. The land purchase price for the shoppin~ center will be $7,000,000.00. That w~]l be accomplished by a down payment of $5.000,000.00, and mn additional payment of $2,000,000.00 whefl all the reciprecal easements and documentation are £inished. The City will use the $5,000,000.00 to assist tn acquisition of property and relocation of existing property owners. The parking will be built by the City and leased beck to the developer Thirty days after the City s,gna the disposition a~reement, John S. Grif~ith & Company will forward $5,000,000.00 to the City. As far as construction timing is concerned, John S. Grlilith & Company is looking for-an opening in the fell of 1982 and have been assured, by many of the people we ars workinE with, that this is a very realistic time schedule. The Counczl, Agency Members, Mr. Jacobs ~d Mr. Donahue engaged in s discussion re~arding rezoninE property is the suburban area (especially northeast Bakersfield) fo= a ehoppln~ center, urban versus e~burban shopping centers and the economics involved in developing %he downtown area. Mr. Calvin Hollle, Partner in the firm o~ K~t~, Hollie, Cores & Associates, the Redevelopment A~ency'e finamcial consul- tants, stated they have, based'on the most recent nsEotiatlons between the AEency asd developer, developed the fi~oing plan for the shopplng center. The center will be a mixture of public and private ownerships. In doin~ that, the finsncin~ e~r&ta~y that appeare to be mo~t appropriate le lease revenue finanein~, which the City has hsd experience with.' We are propoein~ that Bakersfield. California. September 26 1979 - Page 4 facilities to the C~ty of Bakersfield for an amount equal to debt service on the bond The City wouldtn turn sublease the parking currently negotiated at $800,000.00 for the first five years, increasing to $900,000.00 beginning the sixth year., The difference payments would be reimbursed to the City from the Redevelopment an ~ight year period beginning this year for the downtown project, site plan, roughly 750,000 square feet of leasable area with four ass~nlng nothing else is built in the project area other than the the cost estimates that have been obtained by the Agency. Some property tax remains at $4 00. In fact, the tax rate last year was about $4.50, so we have understated the tax rate, and we did that purposely. For every 10~ la tax rates above $4.00, it generates approximately $26,000.00 in tax revenues to the today in Downtown Bakersfield. The California Republic Bank, is the increase that is allowed under Proposition 13 for proper- Bakersl.eld. C~lifurnta, September 29, 1979 - Page 5 constzu¢%lon. That is the only increase in values that we have assumed over this wight yesr period together with the retail center, of course. We have assu~ed no possessory interest taxes on the parking garage. We have ~sstu~ed no incrsnees in th~ value of State assessed properties We have assumed that in the Agency's borrowing through a lease revenue that it would be required to fund two years Of interest out of the bund issue ar~ would also hsv~ to £und a one year reserve. That reserve would be equal to maximal debt service on the bonds. We allowed for a uost of issuance %hat is typical for these types of bonds. For all those reasons, we believe our revenue estimates are conservative. Additionally, we have assumed that the center would open one year later than what is currently projected. ~e assumed a fall of 1983 opening, and ~t is the developer's ln~ention to open in fall of 1982. 8o we have alluwsd a one year lag time lnto these project~ons as well. I will also add that the A~ency members and Council m~hers will be receiving our full report wlthin approxi- mately one week. Because the negotiations with the developer were not completed until a very late date, we 'were not able to put in ail the numbers that should be there· As an exumpls, we assumed a lease payment less than whet has now been currently negotiated. Counn~lman Christensen requested that Mr. Hollis' remsrl~s be recorded is the minutes in detail.. Mr. Jerry geyser, of Keyser, Marston Associates, the Redevelopment Agency's Economics Consultant, commented on the trend of shopping nester dovelopment over the last 20 years. The mall type shopping center, closing of streets and working with what ~s available, is not working. It has been tried in Fresno, Pomona. Santa Mpniua, etc., and it has not worked. The shopping center type configuration is working in places where re%ailing is comin~ back to the downtown areas. The economics and realities of retailing are the kind of factors that come into play when looking at what a shoppin$ center development can a£ford to pay; what the developer and tenants can afford to pay; and'why there is a need. When all tho numbers are added on the cost side, and B~k~-r.~t.. d, C~.l'..' .ri~:~, $~pt~mber 26, 1979 - Page 6 Some ~ery :mportant advice ~o the City, Agency, and Mr. Jacobs is oI what is fair against the economics that are at play tn this evening, particularly ';he land price of $7,000,000.00, and in arriving at the lease payment of $800,000.00 per year for the first five tears and $900,000 00 thereafter, repr~sent.a very Mr. Jacob~ briefly reviewed the schedules for the Redevelopme£t Plan ~mendment and approval of the Joint Development Ccuncllmaa Miller asked if the price oi the property is $7,000,000.00. Mi'. Ksyser stated ne, the $7,000,000.00 is the price being paid by the developer 'to the Agency. Mr. Hollis stated ~he Agency has had several appraising firms conduct a budget appraisal of the property, and their professional Judgment. as ~o what an acquisition budget would be, is $9,500,000.00 for the property. That is acquisition only. funding, As $14,400,000.00. Parking construction, beuause of the preponderance of surface parking, is estimated to he $7,000,000.00. That is a total of $21,400.000.00, and to that should be added approximately $4,500,000.00 for various interest ~nd reserve funds that are required when the bond issue is sold. Total public costs are estimated at approximately $26,000,000.00. Sources of revenue for those costs are: $7,000,000.00 from the developer as purchase price and the remaxndsr $19,000,000.00 is a lease revenue bond issue. That is paid from tax increments and lease payments from the developer. Agency'Member King stated that Council-s- Miller asked Mr. Hollis a question which he thought was "What is going to be the · ' Rakerslleld, Calil'ornla, September 26~ 1979 - Page 7 cost t,~ the C~ty to &cqutie Parcel A." Councilman ¥tller made spec~f~,: reference to the tact that the City co~plates selling that par(;el to the developer, and the answer.given c~n be highly misleading. Mr. King States he assumes, from what w~m eaXd, that the response had to do with acquisition cost of the entire project. Mr. Bollle stated he thought the question wa~ "~bat is the acquisition cost to the A~ency for the entire Agency ~ember King sta~ed, as he undersSan~ it, ~hat only Parcel A wil] be sold, and the City will ~etain ownership of the remainder. ~r. ~oll~s stated that Is correct. Agency ~ember King asked ~r. Hollis, for a fair c~rt- son, wh~ have the economic projections shown to be the co~t to the C~y for Parcel A, which will be sold back to the developer. ~r. Hql]is stated the property was appraised block by block It was not brok~s do~ by the appraisers into three area~ (P~rCel A · B disposition parcels a~d the r~ain~ p~reel as public parking facilities). That in~omtion ~n be obtained. Approximately 5~ of the ~ea is ~aken up by the disposition parcel Obviously the l~nd costs are not distributed evenly; but if they were, approximately $4,700;000.00 ie the coot ~o the city for the parcel bein~ disponed of ~or $7.000,000.00. is important to add,hat the Cl~y Is also prpvidtag parking. Agency ~ember. Kln~ stated that there is a possibility, at some future date, that fh~ de, eloper would exercise options for purchasing the rest of the property at the f~lr ~arket value at that time ~nd wi~d up p~yf~E · great deal ~re ~ney. ~r. Hollis stated that ~s correct. Councilman Payne aek8d if the total ~et of $~6,~0,000.00 included the cost of reloc~tie~busines~es'la<Ehe area, ~1~ legal representation ~or the City or A~ency i~ any litig~tion ~hat might rnsult or consulting ~[ Holll8 read the following breakdo~ of costs: Aequisitto~ (budget appraisal by property sppraisers) $9,500,000 Relocation (~ncludee 20~ contingency 2,071,000 factor) Bakersfield, California, September 26, 1979 - Page De~oh~lon 500,000 Site Preparation 1,I00,000 Admlnis~ration (consulting fees and staff tame; does not include bond issuance fees) 675,000 Contingency 250,000 £stxmated Cons~ruction (surface and structured parking facAhties) 7,000,000 Required f~r funded interest for 2 years and 1 year debt service reserve 4,500,000 (estimated) 100,000 After a lengthy discussion, Vice-Mayor Barton and Agency Chairman Casper declared a brief recess at 9:10 P.M. and reconvened th~ Joxnt meeting at 9:20 P M. Adoption of Resolution No. 73-79 Of the City Council of the City of Bakersfield xuthorizing and directing the Bakersfield Redevelopment Agency to commence proceedings to amend the Amended Redevelopment Plan for the Downtown Bakersfield Redevelopment Project. Upon a motion by Councilman Christensen, Resolution No, 73-79 of the City Council of the City of Bakersfield authorizing and directing the Bakersfield Redevelopment Agency to commence proceedings to amend the Amended Redevelopment Plan for the Downtovn Bakersfiel~ Redevelopment Project, was adopted by the Ayes: Councilmen Barton, Christensen, Means, Payee, Ratty, Strong Noes: Councilman Miller Absent. None Adoption of Resolution No. RA 2-79 of the Bakersfield Redevelopment Agency establishing the proposed base year assessment roll for the Amended Down- town Bakersfield Redevelopment ProJeot; authorizing the transmittal of a mep, boundary description and a statement to taxing officials and agencies; and authorizing payment of a Filing Fee to the State Board of Equalization. Upon a ~otion by Agency Member Puder, seconded by Agency Jiember Lewis, Resolution No, IL% 2-79 of the Bakersfield Redevelop- ~ent Agency establishing the proposed base year assessment roll 91!/i B~Xersfxeid, Calilorn~a, September 26, 1979 - Page for the Ameuded Downtown Bakersfield Redevelopment project;, authorizlnK the transmittal of a map, boundary description and a statement to taxing officials and agencies; and authorizing payment of a Filing Fee to the State Board of Equal£zatlon, wan adopted by the fellow!nK roll call vote: Ayes: Agency Members Caepe~ .Foth, Ktng,~.Lewis, Puder Absent: Agency Member Mooneyham Abstaining: Agency Member Poehner Adoption of Resolution No. BA 3-79 of the Bakersfield Redevelopment AKenc¥ authorizing and directing AKency Staff to consult w/th and obtain the advice within the areas to be added to the Downtown Baker~field 2edevelopment Project. Upon a motion by Agency Member Lewis. seconded by Agency Member King, Resolution No. EA 3-79 of the Bakersfield Redevelopment'Agency authorizing and directingA~ency Staff to consult with and obtain the advice of residen%s and co.unity organizations wlth£n the areas to be added to the Dew. town Bakersfield Redevelopment.Project, was adopted by the following Ayes: Agency Members Casper, Foth, KINE. Lewis, Puder Absent: Agency Member ]~ooneyham Abstaining: Agency Member Poehner .Adoption of Resolution No. RA 4-79 of the Bake~sfield Redevelopment AKency ' authorizing the filing and publication of a Notice of Completion of the Draft Subsequent ]~nvlronmental I~act Report for the Dove, town Bakersfield Redevelop- ment Project; authorizing its circulation to public ag~nclea and the p~tblic hearing thereon; settlnK the time, date end place of said public hearing; and authorizing publicatio, of Nc~ice of such public hearing. Upon a motion b} Agency Meuber Foth, seconded by AKency Member King, Resolution No. RA 4-79of ~heBakerefield Redevelopment Agency authorizing the filirg and publication c~ a Notice of Completion of the Draft Subsequent Environmental Impact Report for the Downtown Bakersfield R~developmentProJect; authorizing BakersIield, California, September 26, 1979 - Page iO Absent: Abstaining: ~ts c~:'culation 'o public agencies and the publiu hearing thereon; setting Lhe time, date and place of said public hearing; and auchorlzAag publzcation of Notice of such public hearing, was adopted by the following roll call vote: Agency Members Casper, Foth, ling, Lewis, Puder None , Agency Member Mooneyham Agency Member Poehner ADJOURNMENT Upon a motion by Councilman Christensen, lhe Joint MeeTing and Workshop oi the Council of the City of Bakersfield and the Bakersfield Redevelopment Agency regarding the Downtow~ Shopping Center, was adjourned at 9:35 P.M. JAMES J. BARTON VICE-MAYOR of the City of Bakersfield, Calif. ATTEST: H. E. BERGEN CITY CLEEK und Ex-Oifi~iO Clerk o~ the Council of the City Of Bakersfield, C&liforn~a ma