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HomeMy WebLinkAbout09/16/1986 rì Ö'l .' , . . . . MINUTES JOINT REGULAR MEETING COMMUNITY REDEVELOPMENT AGENCY/CITY COUNCIL SEPTEMBER 16, 1986 The Joint Regular Meeting of the Community Redevelopment Agency/City Council was called to order at 5:53 P.M. by Chairman Griset in the Council Chambers, 22 Civic Center Plaza, Santa Ana, California. Following the Pledge of Allegiance to the Flag, the Invocation was given by Agency Member McGuigan. The roll was then called: PRESENT ABSENT Daniel E. Griset, Chairman Wilson Hart P. Lee Johnson, Vice Chairman R. E. Luxembourger Patricia McGuigan Others in attendance: John Acosta Dan Young . David N. Ream, City Manager Rex Swanson, Deputy City Manager/Development Services Jan Perkins, Deputy City Manager/Operations Edward J. Cooper, City Attorney Cynthia Nelson, Acting Executive Director/Community Development Patti Nunn, Project Manager Robert Hoffman, Real Estate Manager Roger Kooi, Downtown Development Division Manager Mellmary McNeely, Agency Secretary MINUTES It was moved by Agency Member McGuigan, seconded by Vice Chairman Johnson and carried unanimously (5:0) that the Minutes of the Joint Regular Meeting of the Community Redevelopment Agency and the City Council held August 19, 1986 be approved as received. JOINT PUBLIC HEARING TO ADOPT AMENDMENT TO AGREEMENT WITH J. R. WOOD FOR DEVELOPMENT OF DEALERSHIP IN AUTO MALL Chairman Griset announced that it was the time and place for the 4IÞ Joint Public Hearing of the Community Redevelopment Agency and the City council of the City of Santa Ana for the proposed amendment to the Lease, Option and Development Agreement between the Community Redevelopment Agency of the City of Santa Ana and J. R. Wood, adding that the project site is bounded on the north by Santa Fe Railroad, on the south by Edinger Avenue, on the east by the Costa Mesa Freeway and on the west by Ritchey Street. He then called upon staff to identify the property or issues and give the staff recommendation. The Acting Executive Director/Community Development pointed out that since the Redevelopment Agency entered into an agreement with J. R. Wood in December, 1984, the parcel location and size were adjusted to . accommodate Mr. Wood's site and dealership needs, adding that Mr. Wood now proposes to develop two dealerships, Chrysler-Plymouth and Isuzu on Parcel Nos. 4 and 5, respectively. She pointed out that even though the per square foot value would remain the same, the total purchase price would need to be adjusted to reflect the larger property size, adding that the proposed amendment to the agreement provides for these required changes as well as a revised project schedule. She added that the escrow for the Mazda dealership had recently closed and that staff expected to announce a ground breaking ceremony in the near future. In response to the Chairman's query, the Agency Secretary there were no written communications. stated that There was no response when the Chairman asked for members of the public wishing to speak for or against the proposed amendment to approach the podium. He then declared the Public Hearing closed. It was moved by Vice Chairman Johnson, seconded by . Luxembourger and carried unanimously (5:0) that the Agency adopt Resolution No. 86-50: A RESOLUTION OF REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA APPROVING OF A LEASE, OPTION AND DEVELOPMENT AGREEMENT WITH J. R. 4 AND 5). Agency Member Redevelopment THE COMMUNITY AN AMENDMENT WOOD (PARCELS PUBLIC HEARING TO ADOPT PROPERTY WITHIN THE McFADDEN AVENUE) RESOLUTION 86-51 DIRECTING CONDEMNATION HARBOR DRIVE-IN DEVELOPMENT SITE (3700 OF W. Chairman Griset declared that it was the time and place for the Public Hearing on the issue of the public necessity to acquire by condemnation a property identified by Assessor Parcel Number, as Book 144, Page and Block 762, Parcel 11, for redevelopment purposes. He asked that staff identify the property and the project and to comment on the factors and evidence necessitating the condemnation action and to set forth why the public interest and necessity require the project; why the project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury; why the property sought to be acquired is necessary for the project; and, whether or not the offer as required by Section . 7267.2 of the Government Code has been made to the owner of record, or any offer has not been made because the owner cannot be located with reasonable diligence. The Real Estate Manager read the following prepared statement: liThe property is located at the southeast corner of Harbor Boulevard and McFadden Avenue in the City of Santa Ana. It is identified as 2 Assessor Parcel Number 144-262-01, commonly known as 3700 West McFadden Avenue. The property is a 22.6 acre parcel of land, currently improved with a drive-in theatre featuring Spanish speaking films and a weekend swap meet. The present improvements, constructed in the late 1950's, consist of a single outdoor projection screen and ~ ancillary improvements. The property is owned by Masako Nakamura and leased to Pacific Theatres under a long-term lease which has 72 years remaining on the lease term. The proposed project is for the development of a promotional retail center consisting of approximately 253,000 square feet, which will be anchored by a 100,000 square foot HOME DEPOT. The center will also include a pavillion-type store, a major soft goods tenant and other typical retail stores. The public interest and necessity is demonstrated by the fact that the proposed development, upon its completion, will generate approximately $200,000 per year in annual tax increment revenues from the $26 million development of the real property. The project will generate approximately $610,000 in sales tax revenues in its first year of full operation. These sales tax revenues are anticipated to increase to approximately $963,636 in the tenth year of operation of the center. The project will provide a major source of employment opportunities for the residents of Santa Ana and the general population of the County, both during the construction phase of the project and during the ensuing years of its life. The greatest public good is derived by the increase in the tax . increment revenues generated by the proposed project. These tax increment revenues would be utilized within the North Harbor Redevelopment Project Area. The least private injury is shown in the fact that the proposed project affects only one parcel of real property, which affects one fee ownership interest and one leasehold interest, and just compensation will be paid for these interest. The property sought to be acquired is necessary for the proposed project. It is the only parcel in the proposed project, and it is also the only property which is under-utilized and under-developed of this size, 22.6 acres, in the area which will provide the necessary size to ensure the project's su<cess. An offer of the fair market value as established by an independent appraiser has been presented to both the owner of the real property and the lessee as required by Section 7267.2 of the Government Code. I would like to incorporate by reference the memorandum of this date from the Acting Executive Director of the Community Development Agency to the Deputy City Manager for Development." The City Attorney pointed out that the staff memorandum, dated . September 16, 1986, stated in the second paragraph, fifth sentence, "that condemnation would be ref1uired if such an agreement could not be achieved." He stated t at this was not the case and then read Section 702 from the Agreement between the Agency and Schurgin Development Corporation which contained the phrase that "nothing will be construed to require eminent domain". He added that the Agency could not adopt a Disposition and Development Agreement requiring an eminent domain action. 3 Chairman Griset stated that, in his opinion, the phrase would be more accurate if it read "that condemnation would be possible if such an agreement could not be achieved". 4IÞ In response to a query from Chairman Griset, the Real Estate Manager stated that a letter had been received from Mr. Robert F. Waldron, Esq., 550 Golden Circle Drive, Santa Ana, Ca., requesting the opportunity to address the Agency. Chairman Griset then invited Mr. Waldron to address the Agency. Mr. Waldron stated that he represented Mrs. Masako Nakamura, the owner of the property in question. He pointed out that Mrs. Nakamura had leased the subject property since 1958 to the Pacific Drive In Theatre and that she does not want her property to be taken and intends to challenge the condemnation if the Agency proceeds with its Resolution of Necessity. He added that the only offer that had been received from the Agency was a joint offer to both Mrs. Nakamura and to the Pacific Drive-In Theatre with no segregation of funds. He stated since the offer was made jointly, it had put Mrs. Nakamura and Pacific Drive-In at odds with each other as to what each of their portions should be. He stated that he and Mrs. Nakamura felt that there was considerable private injury being done to the property owner in terms of the fact that she depends on the income from the property for her livelihood. He added that they did not feel that . the project was necessary and that they intended to challenge if the Agency proceeded with its Resolution of Necessity. When Chairman Griset asked if staff wished to make statements, the City Manager stated that they did not. any further When the Chairman found that there were no further comments from the Public, he declared the Public Hearing closed. In response to questions from Vice Chairman Johnson, the Real Estate Manager stated that it was not the Agency's policy to address the apportionment of funds between the fee owner and the lessee, adding that the Agency paid the full appraised value and left the determination of how it should be divided to the owner and the tenant. In response to questions from Agency Member Luxembourger, Project Manager Patti Nunn stated that staff had met with the property owners behind the project and across Harbor Boulevard and that they had all stated that they felt the project would upgrade the area and that they looked forward to it. . In response to further questions from Agency Member Luxembourger, the City Manager stated that the swap meet had, on occasion, created traffic problems in the area. In response to questions from Agency Member McGuigan, the Real Estate Manager stated that the appraiser assigned a value to the land and to the leasehold to arrive at the full appraised value, adding that the 4 offer of the full appraised value was made by the Agency to Mrs. Nakamura and to Pacific Drive-In Theaters. He stated that staff did not feel it was appropriate to determine what the various interests are. . In response to questions from several of the Agency Members, the City Manager stated that the Agency had entered into an Agreement with Oliver, Stoever and Laskin to act as Special Legal Counsel for this proposed condemnation. He pointed out that this firm specialized in eminent domain actions, such as the one confronting the Agency, adding that they had worked extensively for the Cities of Anaheim, Long Beach and Los Angeles. After further discussion, it was moved by Agency Member McGuigan, seconded by Agency Member Luxembourger that, subject to the recommendation of the ~ity Attorney regarding the terminology contained in the Staff Memorandum, dated September 16, 1986, the Redevelopment Agency adopt Resolution No. 86-51: A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA AUTHORIZING AND DIRECTING THE CONDEMNATION OF CERTAIN REAL PROPERTY FOR REDEVELOPMENT PURPOSES IN THE HARBOR DRIVE-IN DEVELOPMENT SITE IN THE CITY OF SANTA ANA, STATE OF CALIFORNIA, AND DECLARING THE PUBLIC NECESSITY THEREFOR. AYES: Agency Members: Griset, Hart, Johnson, Luxembourger and McGuigan . NOES: None ABSENT: Agency Members: Acosta and Young AGREEMENT TO PURCHASE FAIRVIEW STREETS PROPERTY SOUTHEST CORNER OF HARVARD AND It was moved by Agency Hart and carried agreement to purchase Fairview Streets be October 21, 1986. AMENDMENT TO SETTLEMENT AND RELEASE AGREEMENT, A-9 AND A-12 PROJECTS Member McGuigan, seconded by Agency Member unanimously (5:0) that consideration of the property at the southwest corner of Harvard and continued to the Redevelopment Agency meeting of It was moved by Vice Chairman Johnson, seconded by Agency Member and carried unanimously (5:0) that the Redevelopment Agency: Hart 1. Authorize the Chairman to execute the proposed amendment to the Settlement and Release Agreement, A-9 and A-12 Projects; and 82. Authorize the City Manager to execute agreements with eligible developers pursuant to the terms and conditions of the Settlement and Release Agreement, A-9 and A-12 Projects. 5 " AMENDMENT TO OWNER PARTICIPATION PARTNERSHIP AGREEMENT WITH RIVERVIEW COMMUNITY In response to a question from Agency Member McGuigan, the City . Manager stated that October 17, 1986 would be the final deadline date for the Riverview Community Partnership to obtain their construction financing. He then introduced Mr. Fred Armstrong, one of the partners in the Riverview Community Partnership, and asked him give the Agency a brief update on the status of his proposed development. Mr. Armstrong stated that the negotiations for financing were almost complete and that he expected to begin clearing the site in approximately one week, to start construction in the latter part of this year, and to have rental units available in May, 1987. He added that the models for the single-family units would be constructed immediately and be available for an opening in February or March, 1987, with the entire development completed during 1987. After further discussion, it was moved seconded by Agency Member Luxembourger that the Redevelopment Agency approve and execute the proposed amendment to the with Riverview Community Partnership. by Agency Member McGuigan, and carried unanimously (5:0) authorize the Chairman to Owner Participation Agreement EXEMPTION OF EMINENT DOMAIN AND CERTIFICATE OF . ESCALANTE It was moved by Vice Chairman Johnson, seconded by Agency Member McGuigan and carried unanimously (5:0) that the Redevelopment Agency: COMPLETION FOR ROBERT 1. Approve a resolution exempting certain property located at 302 and 304 North French Street and 309 East Third Street from eminent domain; and 2. Approve a Certificate of Completion for Robert Escalante. APPEAL OF DENIAL OF RELOCATION CLAIM - SOUTHERN CALIFORNIA LAW CENTER Chairman Griset invited Mr. William Gray, Boulevard, Tustin, Ca., to address the Agency. Mr. Gray stated that he was a representative of the Southern California Law Center which has submitted a claim to the Agency for an "in lieu" payment due to the fact that they had lost their offices at 1004 West Santa Ana Boulevard. He stated that their argument for their claim hinged on the H.U.D. Regulation No. 42.355 (b) (2) and . then read the following: "The business is not part of a commercial enterprise having another establishment, which is not being acquired by the State Agency, and which is under the same ownership and engaged in the same or similar business activities..... ". Mr. Gray then reviewed the changes in the ownership of the law firm, Wallin, Roseman & Klarich and stated that, in their opinion, the Southern California Law Center was never a part of this firm. Esq. of 17291 Irvine 6 In response to a question from Agency Member Luxembourger, Mr. Gray stated that the Southern California Law Center and Wallin, Roseman & Klarich had filed joint tax returns on the advice of their tax accountant. . In response to questions from Agency Member Hart, the City Attorney stated in his opinion the Southern California Law Center and Wallin, Roseman & Klarich were the same and that they were not entitled to an "in lieu" payment, adding that a "goodwill" payment was an entirely different and separate issue. Vice Chairman Johnson stated that, in his opinion, that Wallin, Roseman & Klarich had merely closed a branch office when they closed the Southern California Law Center. In response to questions from Commissioner McGuigan, Mr. Gray stated that an employee at the Southern California Law Center would schedule appointments for members of the Wallin, Roseman & Klarich law firm and that they would come to the Santa Ana Boulevard office to meet and confer with these clients. After further discussion, it was moved by Agency Member Hart, seconded by Agency Member McGuigan and carried unanimously (5:0) that the Redevelopment Agency deny an "in-lieu" relocation claim of the Southern California Law Center. 4IÞ DEMOLITION OF IMPROVEMENTS LOCATED ON THE A-8 SITE The Real Estate Manager advised the Agency Members that the owner of American Demolition, the lowest bidder, had withdrawn his bid because he had overlooked the fact that the building to be demolished had a basement, and that this oversight had caused him to seriously underbid the project. He added that staff was now recommending that the second lowest bidder, the John Dodd Company, be awarded the contract. After a brief discussion, it was moved by Vice Chairman Johnson, seconded by Agency Member Luxembourger and carried unanimously (5:0) that the Redevelopment Agency authorize payment to John Dodd Company, in the amount of $85,600.00 for the demolition of improvements located at 201,203, 207, 209, 211, 213, and 215 East Fourth Street, in the City of Santa Ana. EXECUTIVE SESSION The Agency Members adjourned to Executive Session at 6:58 P.M. and 4It returned 7:05 P.~. with all members still in attendance. The Agency Secretary read the following statement: "THE LEGAL COUNSEL REQUESTS THAT THE REDEVELOPMENT AGENCY RECESS TO CLOSED SESSION TO CONFER WITH ITS ATTORNEY REGARDING PENDING LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9 (B) (1) WHICH WOULD CAUSE SIGNIFICANT EXPOSURE." 7 . ' . , AGENCY AGENDA ITEMS It was moved by Vice Chairman Johnson, seconded by Agency Member 'Luxembourger and carried unanimously (5:0) that Claim No. 85-171, in the amount of $70,000, be paid to Lowy Development Corporation. ADJOURNMENT There being no further business to come before Agency, the meeting was adjourned at 7:10 P.M. the Redevelopment ~ Daniel E. Griset Chairman R~~ Executive Director . ~ 8