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HomeMy WebLinkAboutCC Minutes 1990-08-27SRCC/SRRA MINUTES (Special Joint) 8/27/90 Page 1 IN THE COUNCIL CHAMBERS OF THE CITY OF SAN RAFAEL, MONDAY, AUGUST 27, 1990, at 7:30 P.M. Special Joint Meeting: Present: Lawrence E. Mulryan, Mayor/Chairman San Rafael City Council/ Michael A. Shippey, Councilmember/Member San Rafael Redevelopment Joan Thayer, Councilmember/Member Agency Absent: Albert J. Boro, Councilmember/Member Dorothy L. Breiner, Councilmember/Member Also Present: Pamela J. Nicolai, City Manager/Executive Director Gary T. Ragghianti, City Attorney Lee Rosenthal, Agency Attorney Jeanne M. Leoncini, City Clerk/Agency Secretary 1. JOINT PUBLIC HEARING - TO CONSIDER CHANGES TO THE DISPOSITION AND DEVELOPMENT AGREE- MENT WITH LINDARO ASSOCIATES FOR 12 ACRES OF LAND LOCATED AT SECOND & LINDARO STREETS IN SAN RAFAEL (RA) - File R-254 SAN RAFAEL CITY COUNCIL a. Resolution of the City Council of the City of San Rafael Approving Revision of the Disposition and Development Agreement Providing for the Agency's Sublease of Property at Second and Lindaro Streets in the City of San Rafael to Lindaro Associates, Pursuant to Health and Safety Code Section 33433. SAN RAFAEL REDEVELOPMENT AGENCY b. Resolution of the San Rafael Redevelopment Agency Approving Revision of the Disposition and Development Agreement Providing for the Agency's Sublease of Property at Second and Lindaro Streets in the City of San Rafael to Lindaro Associates, Pursuant to Health and Safety Code Sections 33340 and 33433. C. Resolution Authorizing Executive Director to Negotiate Changes in the Second Amendment to Agreement Between the Agency and Pacific Gas & Electric Company so as to Permit Changes in the Formula for the Agency's Payment of Rent Under the Lease Contemplated by that Second Amendment for the Property at Second & Lindaro Streets. Mayor/Chairman Mulryan declared the Public Hearing opened, and stated that this is a limited meeting, narrow in focus, dealing with only one aspect of the project, the refinancing and payback to the City and the Redevelopment Agency. He stated we will still get the $2 million back, and this hearing is to discuss a change from the previous schedule regarding the payback. City Manager/Executive Director Pamela Nicolai briefed the Council/Agency, stating that before them tonight are three resolutions, relating to the financial packages agreed to with Lindaro Associates and the PG&E. She stated that the first two resolutions, one to be acted on by the City Council and the other by the Redevelop- ment Agency, deal with the elimination of the up -front payment of $1 million at the time of signing of the lease by Lindaro Associates. The third resolution deals with reconfiguring the agreement between the City and PG&E regarding payment of rents over a period of time, and the sharing of that payment. Ms. Nicolai stated that just today the issue was resolved, that the proportion to be split over a period of years until we have received $2 million, is going to be a 60/40 split, with the Agency receiving 60% and PG&E receiving 40% until the Agency has received its $2 million. She added that the developers have also agreed to complete that package by making a one-time up front payment to PG&E of $71,000. City Manager/Executive Director Nicolai explained the changes which have necessitated these revisions, due to changes within the last year in the financial situation which related not only to the expense of the project itself, but the change in the tenants. She stated with regard to the rent payments, the issue has been checked out with Economic Research Associates and staff feels comfortable that this is necessary. Ms. Nicolai pointed out that the Agency will still receive the $2 million, but over a longer period of time, and that short of having the project proceed the Agency does not really have any options for receiving the money at all. She stated staff feels it is important to proceed with this project, and is recommending approval of the three resolutions. SRCC/SRRA MINUTES (Special Joint) 8/27/90 Page 1 SRCC/SRRA MINUTES (Special Joint) 8/27/90 Page 2 Councilmember/Member Shippey verified with Ms. Nicolai that the 60/40 figure refers to the second Redevelopment Agency resolution, which was just received, stating he does not see that figure in the resolution. Ms. Nicolai stated that the figure is not in there, because the matter was not finalized until late this afternoon, and it had previously been agreed that PG&E would receive up to 50%. She stated that the resolution can be amended to reflect the 60/40 split, if approved. Councilmember/Member Thayer stated she has a correction in the second resolution, regarding Redevelopment Agency approval of the Disposition and Development Agreement. She quoted, "Neither the DDA nor the sublease it contemplates. . .has not yet been executed", stating this is a double negative, and she recommended deleting the words, "not yet". Ms. Nicolai agreed to this. Councilmember/Member Thayer then inquired what have been the changes in the economic conditions. Ms. Nicolai responded that one of the impacts has been during the past year as they have finely tuned the site safety programs which resulted from the risk appraisals, as to implementing the costs of the site safety program. She stated those costs have significantly increased. Also, the tenant mix for the project has changed and the rent factors which will be resulting from the tenant mix have required this alteration. Councilmember/Member Thayer asked Ms. Nicolai to explain, not only for the Council, but for the public, what the tenant mix will be. Ms. Nicolai responded that, as of right now, grocery, drug and theater are the major tenants, and the rest will be small shops and a restaurant. Ms. Thayer then questioned whether there was an analysis of the projected revenues and Ms. Nicolai stated that Economic Research Associates had just reviewed their previous figures, using the same base as was used before and confirmed that this action is necessary. She stated the analyst who made the review is familiar with economic analysis of shopping centers. James Lorenzato of Greenbrae expressed concern regarding the viability of the project, and the mix of tenants which has changed from the original mix. He stated that grocery and drugstore patrons are not inclined to linger and shop, but just make short stops for needed items. He stated the project needs further environmental review. Linda Bellatorre, a Gerstle Park area resident, stated she has no objection to the proposed tenants, but is concerned about the concessions made to this development, and the change from the original focus which was originally retail and now is becoming neighborhood serving. She noted that construction time has been compromised, and was to have been started in Summer when school was out. She recommended that the public be included in the further planning process. Mayor/Chairman Mulryan responded that Ms. Bellatorre's comments were well taken and the public will definitely be looking at this project again. He noted that at this meeting only the financing is being considered. Victoria DeWitt of West End Neighborhood Association, speaking as an individual, objected to the concessions being made to Lindaro Associates. She stated this project should be looked at from the terms of the Downtown Plan, and can be designed to be compatible with downtown. She stated this project is not working and does not deserve any concessions on the City's part. There being no further input, the Public Hearing was closed. Mayor/Chairman Mulryan stated that one of the major things the City wanted to accomp- lish, in addition to this being a regional center, whether it be neighborhood serving or a larger regional draw, was to change the nature of the use of that property, broadening it and bringing it more within the encompassing of downtown San Rafael. He stated that as far as the toxic issue is concerned, that is behind us and the capping of the area, which this project accomplishes, is the final issue. Mayor/ Chairman Mulryan added that one very important issue is to lengthen the hours that the public comes downtown, and this project does that, largely because of the six theaters. He added this should be a significant benefit to the downtown area. City Manager/Executive Director Nicolai agreed that the project has changed in nature, and that the Kaiser/Marston report was done approximately six years ago. However, economic conditions do change, as does the perception of what is feasible at a given time. She stated this is not a whole lot different from some of the original proposal! and is not economically infeasible, especially with the theaters. She stated staff has not approached this lightly, as it has evolved, and she feels it will be of substantial benefit to the City. SRCC/SRRA MINUTES (Special Joint) 8/27/90 Page 2 SRCC/SRRA MINUTES (Special Joint) 8/27/90 Page 3 Councilmember/Member Thayer inquired if there were any projections done on actual revenue loss because of these deferrals of payments through this new payment scheme, in present dollar value. Ms. Nicolai responded that we will still be receiving $2 million, but the present dollar value changed from approximately $1.8 million to $1.1 million. Agency Attorney Rosenthal confirmed this figure. Councilmember/Member Thayer stated this is a very different project than anticipated, and the City is now looking at more intensive neighborhood -serving uses. She added she feels if this project were to be denied, nothing would happen on that site for another ten years, with some very adverse consequences in terms of revenue which the City needs, as well as the uncertainty as to what will happen with the price of gasoline under the present world conditions. She stated she would prefer to have $1 million up front rather than deferred payment, but the City must be practical. She noted the City can have community input in the months to come, regarding architec- tural and other issues. CITY COUNCIL Councilmember Thayer moved and Councilmember Shippey seconded, to approve the resolution approving the revision of the Disposition and Development Agreement, as discussed. Under question, Councilmember Shippey stated he wanted to point out that the toxics worry him more than anything else. He noted that the City had paid for the toxics' tests, and they will benefit the City far beyond this site, with the protection measures developed. He added that he shares some of the concerns of others who spoke, but not all, and by and large he feels that this is the best direction to go right now, given the alternatives. RESOLUTION NO. 8225 - APPROVING REVISION OF THE DISPOSITION AND DEVELOPMENT AGREEMENT PROVIDING FOR THE AGENCY'S SUBLEASE OF PROPERTY AT SECOND AND LINDARO STREETS IN THE CITY OF SAN RAFAEL TO LINDARO ASSOCIATES, PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: REDEVELOPMENT AGENCY Shippey, Thayer & Mayor Mulryan None Boro & Breiner Member Thayer moved and Member Shippey seconded, to approve the two resolutions: 1) Approving the revisions of the Disposition & Development Agreement; and 2) Authorizing Executive Director to negotiate changes in the Second Amendment to Agreement between the Agency and PG&E so as to permit changes in the formula for the Agency's payment of rent under the lease contemplated by that Second Amendment. RESOLUTION NO. 90-31 - APPROVING REVISION OF THE DISPOSITION AND DEVELOPMENT AGREE- MENT PROVIDING FOR THE AGENCY'S SUBLEASE OF PROPERTY AT SECOND AND LINDARO STREETS IN THE CITY OF SAN RAFAEL TO LINDARO ASSOCIATES, PURSUANT TO HEALTH AND SAFETY CODE SECTIONS 33340 and 33433. (As amended to correct wording in paragraph 1.) AYES: MEMBERS: Shippey, Thayer & Chairman Mulryan NOES: MEMBERS: None ABSENT: MEMBERS: Boro & Breiner RESOLUTION NO. 90-32 - APPROVING REVISION OF SECOND AMENDMENT TO AGREEMENT BETWEEN THE AGENCY AND PACIFIC GAS AND ELECTRIC COMPANY (As amended to show PG&E to receive as rent 40% of the rental income.) AYES: MEMBERS: Shippey, Thayer & Chairman Mulryan NOES: MEMBERS: None ABSENT: MEMBERS: Boro & Breiner SRCC/SRRA MINUTES (Special Joint) 8/27/90 Page 3 SRCC/SRRA MINUTES (Special Joint) 8/27/90 Page 4 There being no further action, the meeting was adjourned. JEANNE JUONCINI,�ity Agency Secretary APPROVED THIS DAY OF , 1990 MAYOR OF THE CITY OF SAN RAFAEL/CHAIRMAN SRCC/SRRA MINUTES (Special Joint) 8/27/90 Page 4