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Home My WebLink About2002 03 27 CC MIN SS2002 03 27 CC MIN SS(Ìì_COUNCIL CHAMBER 14403 E. PACIFIC AVENUE BALDWIN PARK, CA 91706 MARCH 27, 2002 WEDNESDAY 4:00 P.M. The CITY COUNCIL and COMMUNITY REDEVELOPMENT AGENCY of the City of Baldwin Park met in STUDY SESSION at the above time and place. ROLL CALL Present: Councilmembers/Members: Linda Gaic, Ricardo Pacheco, Bill Van Cleave. Mayor Pro- Tem/Vice Chair Marlen Garcia and Mayor/Chair Manuel Lozano Also Present: Dayle Keller, Chief Executive Officer; John Olvera, Deputy City Attorney; Kara Bouton, Assistant to the Chief Executive Officer; Rick Forintos, Community Development Director; Manny Cam'llo, Recreation/Community Services Director; Rosemary M. Ramirez, Chief Deputy City Clerk and Kathleen Sessman, Deputy City Clerk POINT OF ORDER By Council consensus, the item relating to Restaurant Proposals was moved forward on the agenda for discussion. REPORTS OF OFFICERS RESTAURANT ROW PROPOSALS STATUS REPORT Cany ovr from 2/20/02) 450.20) Related Hum CRA Agenda, Item 3-to) At their meeting of February 20, 2002, the City Council requested to receive more detailed information to include the following: reference checks, financial status/stability of the three 3) applicants, and examples of past/present projects from each developer. At the February 20, 2002 Agency meeting, staff presented a signed Exclusive Negotiating Agreement with Metro. On March 11, 2002, Gal-Asia notified the City that they had decided not to pursue their project. Since the February 20, 2002 Agency meeting, a proposal for a freestanding El Polio Loco restaurant was submitted to the Planning Division. On March 7, 2002, the Planning Division received a new proposal for Design Review from the Reyes Group, for an El Polio Loco consisting of 2,515 square feet of space. The proposed site is the northeast comer of Tracy Street and Baldwin Park Boulevard. The owner of this property is M & A Gabaee, an affiliate of The Charles Company. As requested by the Council, additional information regarding the developers is as follows: The Metro proposal is for an IHOP restaurant and Starbucks, including additional, national credit fast food tenants. Additional specifics relating to the project are as follows: Price per square foot developer feels it can pay for the land $10,00 Land area approximately 91, 064 square feet or 2.09 acres Location northeast corner of Baldwin Park Boulevard and Tracy Street as per RFP instructions) BIB] 37638-U01 2002-U02 03-U02 27-U02 CC-U02 MIN-U02 SS-U02 LI1-U03 FO8420-U03 FO8699-U03 DO8920-U03 C4-U03 MINUTES1-U03 1/15/2003-U04 ROBIN-U04 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL-U06 COMMUNITY-U06 REEVELOPMENT-U06 AGENCY-U06 2002 03 27 CC MIN SS(Ìì_Study Session Minutes March 27. 2002 Page 2 Proposed uses IHOP, Starbucks and 2-3 additional restaurants Building area 15,500 square feet Adequate parking: Yes, 189 spaces Estimate of new annual City sales tax $54,925 Estimate of new annual Agency tax increment $14,161 Estimate of new job creation 300 Other financial assistance requested of City/Agency None Letters of interest from users: Yes IHOP) References: Staff called the cities of San Bernardino and Whittier and spoke with individuals familiar with Metro's capabilities. In both cases, contact persons spoke highly of the projects which Metro has completed and welcomed the opportunity to work with them again. Project economics is as follows: Cost of Project to Agency: $1,092,079 Estimated Revenue to City/Agency $ 69,096 Payback period of Agency investment: 15.8 years Planning Division Parking Analysis is as follows: The project as submitted, exceeds the required number of parking stalls by 39 spaces. The Charles Company Small) submitted a development proposal that was larger than what was requested in the RFQ. The proposal is for a two-phase retail project encompassing the RFQ site area plus additional properties stretching along Baldwin Park Boulevard from Tracy Street to Francisquito Avenue. This proposal analysis is only for the first phase. The first phase would involve an El Polio Loco and two other retail tenants. Additional specifics relating to the project are as follows: Charles Company owns the comer lot and paid between $20-25 per square foot Price per square foot developer feels it can pay for the remaining land $5.00 Land area approximately 91,064 square feet or 2.09 acres Location northeast comer of Baldwin Park Boulevard and Tracy Street Proposed uses: Smart & Final, El Polio Loco, Starbucks and one other restaurant Building area: 29,015 square feet Adequate parking: No 82 spaces Estimate of new annual City sales tax: $92,000 Estimate of new annual Agency tax increment: $18,898 Estimate of new job creations: Not available Other financial assistance requested of City/Agency: Waiver of all City permits and entitlement fees Letters of interest from users: Yes El Polio Loco, Smart & Final and Starbucks) References: The developer provided recommendation letters from the cities of Lynnwood and Monterey Park that spoke highly of the developer's capabilities and accomplishments within those cities. BIB] 37638-U01 2002-U02 03-U02 27-U02 CC-U02 MIN-U02 SS-U02 LI1-U03 FO8420-U03 FO8699-U03 DO8920-U03 C4-U03 MINUTES1-U03 1/15/2003-U04 ROBIN-U04 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL-U06 COMMUNITY-U06 REEVELOPMENT-U06 AGENCY-U06 2002 03 27 CC MIN SS(Ìì_Study Session Minutes March 27, 2002 Page 3 Project economics is as follows: Cost of Project to Agency: $1,386,411 Estimated Revenue to City/Agency $ 110,898 Payback period of Agency investment: 12.5 years Panning Division Parking Analysis is as follows: The project as submitted, would not meet the parking requirements. There would be a deficiency of 41 parking spaces. The Charles Company Large) proposal is for a two-phase retail project encompassing the REQ site area plus additional properties stretching along Baldwin Park Boulevard from Tracy Street to Francisqurto Avenue. The first phase would involve an El Polio Loco and two other retail tenants. Phase two would include a food court with four different retail food outlets and outdoor seating areas, plus a drug store. Additional specifics relating to the project are as follows: Price per square foot developer feels it can pay for the remaining land $5.00 Land area: Approximately 166,424 square feet or 3,82 acres Location north side of Baldwin Park Boulevard between Frandsqurto Avenue and Tracy Street Proposed uses: Smart & Final, CVS, El Polio Loco, Starbucks and Panda Express Building area: 49,935 square feet Adequate parking: Yes 198 spaces Estimate of new annual City sales tax: $166,000 Estimate of new annual Agency tax increment: $32,524 Estimate of new job creations: Not available Other financial assistance requested of City/Agency: Waiver of all City permits and entitlement fees Letters of interest from users: Yes El Polio Loco, Smart & Final and Starbucks) References: The developer provided recommendation letters from the cities of Lynnwood and Monterey Park that spoke highly of the developer's capabilities and accomplishments within those cities Project economics is as follows: Cost of Project to Agency: $2,818,251 Estimated Revenue to City/Agency $170,062 Payback period of Agency investment: 16.6 years Planning Division Parking Analysis is as follows: The project as submitted, exceeds the required number of parking stalls by 22 spaces. BIB] 37638-U01 2002-U02 03-U02 27-U02 CC-U02 MIN-U02 SS-U02 LI1-U03 FO8420-U03 FO8699-U03 DO8920-U03 C4-U03 MINUTES1-U03 1/15/2003-U04 ROBIN-U04 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL-U06 COMMUNITY-U06 REEVELOPMENT-U06 AGENCY-U06 2002 03 27 CC MIN SS(Ìì_Study Session Minutes March 27, 2002 PaQe 4 Staff Analysis Based upon the project economics of the various proposals, the Charies Proposal large project) would be the most desirable, provided that the developer would be willing to advance the acquisition costs. However, if it did not, we would have to take into account interest charges, which would cause the payback period to increase. Currently, the payback period of the City/Agency investment is approximately 16.6 years. This is a standard for Agency-assisted projects in Southern California, given the residential and business relocation costs. Should the Charies proposal large project) be selected as the most desirable development, it would be recommended that Metro be allowed the opportunity to also submit for the larger site. Metro is definitely interested in submitting such a proposal for the larger project site stretching from Tracy Street to Francisqurto Avenue. FINANCING OF AGENCY ACQUISITION COSTS Staff has committed all available Redevelopment Agency funding to the Walmart project. Therefore, there could be difficulty in arranging adequate financing to cover the Agency's acquisition costs. Two possible funding alternatives are described below: 1. Sales Tax Reimbursement: Under this proposal, the selected developer would advance the acquisition costs to the Agency. Then, when the project was complete and operating, the Crty would reimburse the developer through a rebate of some or all of the new sales tax revenue received from the project. Once the developer advance, plus interest, was paid off, the City would thereafter receive all sales tax flowing from the project. 2. Bond Issuance Based upon the projected revenue streams, it may be possible to raise the acquisition funding through the issuance of a bond. Underwriters could consider new sales tax, new property tax increment or both, as sources of repayment of the dept. This alternative might not be as attractive as the sales tax reimbursement alternative because of the time it would take to issue bonds and the additional costs involved with bond underwriting and sales. Staff recommends that the Agency approve one of the following: 1) Authorize the execution of an Exclusive Negotiating Agreement with Metro for the small Restaurant Row site. This includes a sit-down restaurant IHOP), a Starbucks and 2-3 additional restaurants; or 2) Request Metro to submit a proposal for the large project; this would then be analyzed and included as a future agenda item at which time, the Agency Board would have the option of selecting between the Metro and the Charles Company proposals. 3) Enter into an Exclusive Negotiating Agreement with the Charies Company for the small project proposal and direct staff to bring back The Charies Exclusive Negotiating Agreement at the meeting of May 1, 2002; or BIB] 37638-U01 2002-U02 03-U02 27-U02 CC-U02 MIN-U02 SS-U02 LI1-U03 FO8420-U03 FO8699-U03 DO8920-U03 C4-U03 MINUTES1-U03 1/15/2003-U04 ROBIN-U04 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL-U06 COMMUNITY-U06 REEVELOPMENT-U06 AGENCY-U06 2002 03 27 CC MIN SS(Ìì_Study Session Minutes March 27, 2002 9® 5 4) Enter into an Exclusive Negotiating Agreement with The Charles Company for the large Project proposal and direct staff to bring back The Charies Exclusive Negotiating Agreement at the meeting of May 1, 2002. At this time. presentations were made by prospective developers. After lengthy discussion, a motion was made to refer this matter back to staff, specifically for the purpose or requesting alternate scenarios, and bring back for Agency consideration at the meeting of April 17, 2002. MOTION: Councilmember Van Cleave SECOND: Councilmember Pacheco Motion Carried CLOSED SESSION The Council/Agency recessed to Closed Session at 6:45 p.m. and reconvened at 7:00 p.m., with all members present. Deputy City Attorney John Olvera reported the action as follows: CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION GC 54956.9) Name of Case: Community Redevelopment vs. Rosemead Properties Case Number: BC255523 LASC) ACTION: Agreement consistent with report provided by legal counsel was unanimously approved. CONFERENCE WITH LEGAL COUNSEL-ANTICIPATED LITIGATION GC 54956.9) Number of Case: 1) ACTION: Council received briefing. No final action taken. Nothing further to report PUBLIC EMPLOYEE APPOINTMENT GC 54957) Title: Housing Director ACTION: Council received briefing. No final action taken. Nothing further to report ADJOURN There being no other matters before the Council/Agency, the meeting was adjourned at 7:00 p.m. Approved as presenwdft the Council/Agency at their meeting held April 17, 2002. Rosemary M. Ramirez^MC Chief Deputy City Cterk //y^t^t^ Sanchez Jose Sanchez Agency Secretary BIB] 37638-U01 2002-U02 03-U02 27-U02 CC-U02 MIN-U02 SS-U02 LI1-U03 FO8420-U03 FO8699-U03 DO8920-U03 C4-U03 MINUTES1-U03 1/15/2003-U04 ROBIN-U04 STUDY-U05 SESSION-U05 CITY-U06 COUNCIL-U06 COMMUNITY-U06 REEVELOPMENT-U06 AGENCY-U06