HomeMy WebLinkAbout19C - ENA YMCA REUSEREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
FEBRUARY 5, 2019
TITLE:
AUTHORIZATION TO NEGOTIATE AN
EXCLUSIVE NEGOTIATING AGREEMENT
WITH CARIBOU INDUSTRIES FOR
RENOVATION AND REUSE OF THE YMCA
PROPERTY LOCATED AT 203-205 W. CIVIC
CENTER DRIVE
(STRATEGIC PLAN NO. 3, 5A)
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APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 181 Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
1 t � FILE NUMBER
CITY MANAGER
RECOMMENDED ACTION
Authorize the City Manager to negotiate an Exclusive Negotiating Agreement (ENA) for the reuse
of the YMCA property with Caribou Industries, subject to non -substantive changes approved by
the City Manager and City Attorney.
DISCUSSION
The YMCA building located at 203-205 West Civic Center Drive (Site) was purchased by the City
in 1992. The building has been vacant since that time and has been in serious disrepair due to
age and vandalism. Recent efforts have been taken to remediate several outstanding issues
such as asbestos clean-up and the placement of security cameras at the site. Over $1 million
dollars in funding was used to remediate these issues.
Over the years, the City has made several attempts to market/entertain proposals for the site but
the substantial City subsidy required by developers and end users has been an issue. To bring
the building up to current City codes, it would require an anticipated investment of up to $5 million
dollars for seismic retrofit, fire suppression, electrical/plumbing to current code, and other
structural improvements. In November 2015, the City Council approved an option agreement for
the sale and renovation of the YMCA with St. Joseph's Health System for the development of a
fitness center/community venue for the underserved population living near the downtown.
Unfortunately, citing ever-changing dynamics of health and fitness businesses in downtown and
an unforeseen project cost estimate over $5 million higher than anticipated, St. Joseph's Health
System requested to terminate the Agreement to purchase and rehabilitate the YMCA in
December 2017.
19C-1
ENA for YMCA
February 5, 2019
Page 2
In February 2018, the City released a Request for Qualifications and Development Concepts
(RFP# 18-204) for the renovation and reuse of the former YMCA Building. Four proposals were
received in April, 2018 for this solicitation.
Evaluation of Proposals
Each proposal has been evaluated and additional information was requested from the developers
during the months that followed. All proposals were then evaluated by a selection panel which
included representatives from the Community Development Agency, Planning and Building
Agency, and the Public Works Agency. Criteria included experience of firm and key personnel;
financial capacity; development schedule, project concept and completeness of proposal
including organization and clarity.
As a final step in the evaluation process, all four proposers were invited to present their
development proposals to the Economic Development, Infrastructure, Budget and Technology
(EDIBT) Council Committee on August 20, 2018. The proposals represented a range of
development opportunities listed below. The selection panel completed the review of the
proposals and the rankings are as follows:
Proposer Score
1. Howard CDM/Orange County High School of the Arts (OCSA) 86.25
e Expansion of OCSA to include a new Design and Art Center
2. Caribou Industries 67.48
e Boutique hotel
3. Community Development Partners/City Fabrik 66.75
e Veteran's Hall project including residential
4. The Sound
e A community center/small business start-up incubator 66.00
Committee Direction
At the September 10th regular EDIBT Council Committee meeting, the Committee directed staff to
take an extra step to reach out to the top two rated proposers (Howard CDM/OCSA and Caribou
Industries) to see if the two proposers could team up on pairing their proposal for resubmission to
the City. Staff reached out to both parties via telephone on Friday, September 14, 2018. After
discussing the potential of a joint proposal, both Howard CDM/OCSA and Caribou Industries
agreed that a deal would not work at this time.
At the October 8th Special EDIBT Council Committee meeting, the Committee directed staff to
proceed with a recommendation to the full Council to enter into an exclusive negotiating
agreement with Caribou industries for the renovation and reuse of the YMCA building. Caribou's
project, which includes a hotel component, is expected to generate significant tax revenue for the
City. The Committee also requested that the Caribou proposal include substantial community
benefits, citing examples such as a Sylvia Mendez Museum, a concept utilizing wine and spirits,
19C-2
ENA for YMCA
February 5, 2019
Page 3
or shared space for local workers as part of the project. Caribou has also expressed interest in
leasing a portion of the YMCA to the Orange County High School of the Arts for their proposed
Design and Art Center project.
Upon City Council approval of this action, staff will begin the development of a draft Exclusive
Negotiating Agreement with Caribou Industries and will work to define the business terms of the
agreement for future City Council action.
STRATEGIC PLAN ALIGNMENT
Approval of this item allows the City to meet Goal #3 (Economic Development), Objective #5
(Leverage private investment that results in tax base expansion and job creation citywide),
Strategy A (Identify and market underutilized properties for new development that will create new
jobs and expand the City's tax base).
FISCAL IMPACT
There is no fiscal impact associated with this action.
Steven A. Mendoza
Executive Director
Community Development Agency
Exhibit: 1. Caribou Industries Proposal
19C-3
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