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Home My WebLink About08/01/1983 pê . MINUTES SPECIAL MEETING COMMUNITY REDEVELOPMENT AGENCY SANTA ANA, CALIFORNIA AUGUST 1,1983 The Special Meeting of the Community Redevelopment Agency of the City of Santa Ana was called to order by Chairman Luxembourger at 8:10 P.M., in the City Council Chambers, 22 Civic Center Plaza, Santa Ana, California. After the Pledge to the Flag and the Invocation given by Mr. Young, roll was called: PRESENT ABSENT John Acosta Gordon Br icken Daniel Gr iset P. Lee Johnson patricia McGuigan Robert Luxembourger Dan Young Others in Attendance: . A. J. Wilson, City Manager Edward J. Cooper, City Attorney Richard Dominguez, Financial Services Manager Ralph Campbell, Commercial Loan Officer Edward Henning, Project Area Manager Mellmary McNeely, Secretary PROPOSED DIRECT COMMERCIAL LOAN AND FACADE REBATE PROGRAMS . The City Manager pointed out that the proposed Direct Commercial Loan and Facade Rebate Programs had been developed by the staff, in consultation with the Redevelopment Commission, to establish the final set of tools that would be required to carry out the goals of the Major Commercial Rehabilitation Program. He added that tied to these goals were design standards which would be considered later in the day by the Council. The City Manager then called upon the Commercial Loan Officer to make a slide presentation showing some of the goals of the proposed Direct Commercial Loan and Facade Rebate Programs. The Commercial Loan Officer thanked the Agency for the opportunity to address this subject. He then made a slide presentation which gave an overall view of existing Commercial Loan Programs and illustrated how the proposed program fits in. His comments were as follows: I" . As redevelopment has progressed in the downtown project area, a series of rehabilitation loan programs have been adopted and applied. Through a buy-down arrangement with Mercury Savings and Loan Association, the Agency can offer commercial rehabilitation loans ranging from $50,000 to $250,000 at 10% interest, 3 points, with a 10-year term and a 25-year amortization. (The Builders Exchange Building and Minter House were shown as projects funded under this program.) By selling notes totaling $15,000,000 to Wells Fargo Bank, the Agency was able to pass-through its tax exempt status to participants in the form of 8 to 11.5% permanent loans. Loans from this program have ranged from $150,000 to $1,000,000 with a 10-year term and a 25-year amortization. Some 20 loans were originated under this program; and projects are in various stages of completion. (The Horton Building and the 400 Block of West 4th Street were shown as illustrations of projects completed under this program.) . The Industrial Development Bond Program has been developed and implemented to replace the Wells Fargo Program and provide major tax-exempt loans on a City- wide basis. The Philipson Building was shown to illustrate a project completed through the sale of an Industrial Development Bond. They are used to fund projects from $500,000 to $10,000,000. Currently a number of large scale projects have been completed along Main Street, West 4th Street and in other parts of the downtown. However, smaller shops with old, deteriorated facades detract greatly from these neat, professional rehabilitation structures that represent multi-million dollar investments. The Agency has learned that for profit and processing reasons, no lender is willing to participate with the Agency to make available rehabilitation loans under $50,000 to smaller merchants. . As redevelopment commences in earnest in the four new project areas, the Agency's inability to offer rehabilitation loans under $50,000 would be a serious handicap. In these areas commercial property consists of retail strips along main arterials with small one- story buildings of 5,000 to 10,000 square feet predominating. 2. 17 . A tremendous visual improvement can be made in this project area with simple treatment of signage, painting, awnings, and a sidewalk landscaping. (Several slides were shown to illustrate cluttered and non-uniform signing, disharmonious and clashing facade colors, and other deteriorated and damaged facades, show windows, and landscaping.) The proposed Facade Loan and Rebate Program will give the Agency the vital tools it needs to address rehabilitation needs below $50,000. These programs will complete a level of rehabilitation loans from the Agency that will range from $0 to $10,000,000. The programs consist of loans from $20,000 to $50,000 at 10% interest, 3 points, with a 7-year term and a 20- year amortization. Because the net profit on loans under $20,000 is negligible to negative, a graduated series of rebates will be offered for facade improvements ranging from $0 to $20,000. . The slide presentation concluded with before and after photos from the Mesa North Shopping Center in Costa Mesa, which illustrated the dramatic visual impact that simple facade improvements can have on commercial structures. The City Manager then called upon the Project Area Manager to discuss some of the problems of the downtown area as they would relate to these two programs. The Project Area Manager pointed out the design manual which had been given to the members of the Agency and the importance of appropriate guidelines to any loan or rebate program being undertaken by the city. He stated that it would be important to exercise control over any rehabilitation being undertaken under these programs. . The City Manager thanked the Project Area Manager and Commercial Loan Officer and added that these programs were meant to provide an opportunity to those businessmen that did not need to borrow the large amounts, offered in previous rehabilitation programs, to improve their property. He pointed out that the Agency had also supported the construction of parking structures in the downtown area to further help in the improvement of the business climate. He added that a new Standards Board was being formed to help with the enforcement of guidelines such as those outlined in the design manual given to the Agency for consideration. He also called the attention of the Agency to pictures, which had been taken independently by a concerned businessman, depiciting blight, inappropriate signage and deferred maintenance in the downtown area. 3. It , ! . . . Chairman Luxembourger ascertained from the Commercial Loan Officer that 10% was the interest rate to be charged in the Direct Commercial Loan Program. Mr. Griset stated that he thought this was a fine program and that probably the only regret the City would have was that the program had not been made available to property owners throughout the City but had been confined to the five project areas. He added that he and Mr. Acosta had been discussing several shopping areas which seemed to be in decline and that, in his opinion, this program would certainly be a way of encouraging property owners to take a fresh look at their property. He added that he would be very happy to support this program. Mrs. McGuigan said that she was particularly happy to see that the small businessman was now having the same opportunity that some of the larger businesses have had to benefit from private and public funding. She added that she commended staff for putting together such a worthwhile program. Mr. Young stated that he felt this program, as well as others that had previously been presented to the Agency, was innovative and was the result of excellent staff work. He added that he felt the Agency had a responsibility to be diligent and supportive to those businessmen who are making improvements in their properties at a very high cost to themselves. Mr. Johnson said he felt the exciting thing about this program was that it was not tearing down buildings and putting up new ones but was taking the existing buildings and improving them. After further discussion, it was moved by Mr. Griset, seconded by Mr. Johnson and carried unanimously (7:0) that the Redevelopment Agency: 1. Authorize staff to implement the proposed self- funding commercial rehabilitation loan program within the Redevelopment Agency's project areas. 2. Approve the recommended credit criteria and terms and conditions for the proposed program. 3. Authorize the execution of escrow and loan service agreemen ts wi th U. S. Escrow, Inc. for the proposed program. 4. 11 þ . . . . 4. Authorize staff to implement the commercial rebate program for selected target areas within the Redevelopment Agency's project boundaries. ADJOURNMENT There being no further business to come before the Community Redevelopment Agency, the meeting was adjourned at 8:45 P.M., to August 16, 1983 at 5:30 P.M. Qßß Davld N. Ream, Community Development ~~r Director Chairman 5. .:to