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HomeMy WebLinkAboutRA Minutes 1995-11-06SRRA MINUTES (Regular) 11/6/95 Page 1 IN THE COUNCIL CHAMBER OF THE CITY OF SAN RAFAEL, MONDAY, NOVEMBER 6, 1995, AT 7:30 PM Regular Meeting: Chairman San Rafael Redevelopment Agency Cohen, Member Member Present: Albert J. Boro, Paul M. Barbara Heller, Member Gary O. Phillips, David J. Zappetini, Member Absent: None Also Present: Jake Ours, Acting Executive Director Gus Guinan, Assistant Agency Attorney Jeanne M. Leoncini, Agency Secretary ORAL COMMUNICATIONS OF AN URGENCY NATURE 7:30 PM None. CONSENT CALENDAR Member Cohen moved and Member Zappetini seconded, to approve the recommended action on the following Consent Calendar items: ITEM RECOMMENDED ACTION 1. Approval of Minutes of Regular Meeting of Approved as submitted. Monday, October 16, 1995 (AS) 2. Unapproved Minutes of Citizens Advisory Accepted report. Committee Meeting of Thursday, October 12, 1995 (RA) - File R-140 IV B AYES: MEMBERS: Cohen, Phillips, Zappetini & Chairman Boro NOES: MEMBERS: None ABSENT: MEMBERS: None ABSTAINED: MEMBERS: Heller (from Item #1 only, due to absence from meeting) . AGENCY CONSIDERATION 3. ACCEPTANCE OF COMPENSATION FOR RAFAEL THEATER PURCHASE (RA) - File R-_�?a Acting Executive Director Jake Ours reported he had attended a get-together at the Rafael Theater, and on behalf of the City, accepted compensation for the Rafael Theater. He presented Chairman Boro and the Agency Members with a specially framed collage including documents and the SRRA MINUTES (Regular) 11/6/95 Page 1 Ann SRRA MINUTES (Regular) 11/6/95 Page 2 dollar bill representing payment for the theater. Brebner, Chair of the San Rafael Theater Project for the Film Institute of Northern California, personally thanked the Agency. She reported the renovation of the theater is going well, noting it was a very exciting project and they are finding many wonderful things in the building, including the original dome, which no one realized was located underneath the existing dome. Member Heller asked if they have begun physically dismantling the building, and Ms. Brebner reported the lights have been taken down, and they are in the process of chipping away the old paint, and have taken pieces of the walls to analyze. Mr. Ours stated this was a very interesting process, noting they are going through all the layers of paint and cover-up, rediscovering what the theater was like originally. Member Zappetini asked if there had once been a fire in the theater, and Ms. Brebner reported there had been a fire in 1937, and noted they had found bricks behind the dome that were badly burned. She stated they will be taking photographs throughout the renovation process. 4. REPORT ON DOWNTOWN RETAIL VACANCIES (RA) -File R-140 #8 Mr. Ours explained this report was the fifth in a series of studies the Agency had requested be provided twice a year, in order to keep the Agency Members and Chairman informed as to the status of the vacancies downtown. Mr. Ours reported staff has tracked the 680,000 square feet of retail space on Fourth Street, noting any vacancies. He stated there is continuous changeover, and it is not the same properties all the time that are vacant. He reported the rate changes continue to fluctuate up and down, and felt that over the years there will always be a state a flux, as people are always coming and going, noting this was the nature of the street. Mr. Ours reported that the vacancy rate was currently at the lowest point since the survey was begun; however, he noted that if the situation with Macy's changes, the City could find a large block of space back on the market. He stated these were the kinds of things the City always needed to be looking at, but felt things looked good at this time. Mr. Ours referred to the list on the back of his report which identified, as of the end of September, those properties that were vacant and had no pending agreements for their use. Chairman Boro asked if the properties listed in italics were those properties that had been vacant for more than a year, and Mr. Ours stated that was correct. Mr. Ours stated those properties were the "problem spaces", and there is something unique to them that makes them difficult to lease. He noted there were different types of problems that make these properties hard to rent, from the size of the space, the character of the landlord, or just the age of the space. As an example, Mr. Ours referred to the problems of leasing the Masonic Temple, and explained they do not have a real estate agent, and that it is very difficult to contact them. SRRA MINUTES (Regular) 11/6/95 Page 2 SRRA MINUTES (Regular) 11/6/95 Page 3 Chairman Boro asked if there was anything pending on the Macy's Linens, and Mr. Ours stated there might be a sale pending, but he had not been given any specific information; however, he reported Dirk Brinckerhoff informed Mr. Ours that he had been receiving offers, and would notify the City if it appears as though a sale is forthcoming. Member Phillips referred to figures reported for unemployment, and noted there is a small base amount of unemployment made up of normal and ongoing situations, such as people changing jobs. He felt it was probably similar with rental vacancies, in that there would never be a 1000 occupancy rate, and asked Mr. Ours if there was a conventional vacancy factor? Mr. Ours responded that a shopping mall will accept a 5% vacancy rate as successful mall operation, noting this was a good figure to aim for. Mr. Phillips asked if a reasonable expectation for the downtown area might be 40 - 50, and Mr. Ours responded that was correct. Member Phillips stated that he was tired of hearing about downtown going to hell and being nothing but vacancies if, in fact, that is not the case, and he felt Mr. Ours' report indicated to him that this was not the case. Mr. Ours stated Mr. Phillips was correct, that this was not the case. Chairman Boro stated everyone had known since February of this year that this was not the case, and that this was nothing new. Mr. Phillips still felt the City was up against the perception of there being more vacancies downtown than there really are, and he blamed that, in part, on the real estate signs that are not taken down after a property has been leased. He suggested this issue could be address through Redevelopment or the Zoning Department, requiring the real estate agents to modify their signs indicating that a lease is in place. He suggested that perhaps this problem could be covered under a sign ordinance, and noted that leaving a "For Lease" sign on property that has already been leased is basically false advertising. Chairman Boro suggested working with the real estate brokers and asking them to change the signed to read "Leased By" once a lease has been completed. Mr. Ours stated there were only two major real estate brokers on Fourth Street, and he felt the City could probably work with them on this issue, perhaps asking them to obtain stickers that could be easily attached to the signs once a lease agreement had been reached. Member Heller suggested perhaps the City could purchase magnetic signs and just give them to the brokers to use in modifying their signs, but Mr. Ours did not think the City should be responsible for supplying these to the brokers. Mr. Phillips asked if there was any way the City could make such a requirement as part of the sign Ordinance? Mr. Pendoley stated staff would have to research the issue; however, he felt Mr. Ours' suggestion of attempting to work with the brokers would be more advantageous. Mr. Ours stated he would contact the brokers and would report back to the Agency. Mr. Phillips stated he felt this would be an acceptable course of action, as long as the perception on downtown vacancies comes closer to the actual 5% vacancy rate. Ms. Heller reported she had also heard a lot of criticism about the high vacancy rate in the downtown area, and agreed that something must be done to reflect the true vacancy rate. She felt a stronger public relations effort must be made in order to teach or impress upon the public the fact that Fourth Street is a very SRRA MINUTES (Regular) 11/6/95 Page 3 SRRA MINUTES (Regular) 11/6/95 Page 4 vibrant and alive street. Mr. Pendoley reported one of the things that the City has been actively doing is setting up displays in the windows of the vacant buildings. He noted many of the vacant buildings have displays for Falkirk or other community activities, and that there are very few vacant buildings with empty or taped -over windows. Member Cohen felt the focus on lease signs was only addressing one small portion of the problem, noting that perceptions still lag behind after circumstances change. He recalled that at one point the City was looking at a loo vacancy rate, and noted a shopping mall would not consider this an acceptable rate, would realize they had a problem, and would aggressively go out and do something about it, stating that was something the City needed to consider doing. He also felt that it was not only the "For Lease" signs that people were noticing, but also those properties that are vacant for long periods of time, sometimes as long as a year or two. He stated the long term vacancies really call attention and stick out, and the public cannot help but keep noticing them, adding to the concern that the City is not doing anything. Mr. Cohen felt it was very important that the City take a proactive stand toward Macy's, stating we should be taking steps to encourage this sale. He stated there is active interest in the property, and believes the City should be working as an Agency to redevelop that site. He stated the reality is that for quite some time, Macy's has not been the draw that it used to be. He felt the City had an opportunity, and should already be trying to figure out a strategy, rather than waiting until they announce the decision that they are leaving, which he sees as inevitable. Mr. Cohen stated rather than reacting to each of the vacancies as they come up, the City should establish an overall strategy to attract a core of some of the national businesses that might be interested in the downtown area, particularly if there were enough of them to support each other. He did not believe we would find a single tenant who would want to take the whole Macy's space. Chairman Boro felt the perception of the health of the downtown area was not just related to correcting the erroneous perception of the vacancy rate. He referred to a newspaper article reporting on the seismic retrofitting that is currently underway, and stated that when one looks at the amount of work that has been done on the buildings, and the amount of money that has been spent, it is clear that those property owners are not just spending the money retrofitting their buildings because the are trying to comply with the Ordinance, they are doing it because they can market their property. Chairman Boro acknowledged there had been a major problem with the Macy's store, but now that Nautilus has moved into the building, that will have a huge impact on the foot traffic and perception of the area, noting it seemed to him that everyone has been aware of where the City is going with the downtown area, but no one is helping the effort when they talk down the area rather than talk it up. Chairman Boro thought the report was very positive. He stated the numbers were great, and would stand out in any community, and he felt the City was on a good course. SRRA MINUTES (Regular) 11/6/95 Page 4 SRRA MINUTES (Regular) 11/6/95 Page 5 Mr. Ours commented on the large Macy's building, noting that if it does go dark on us, it would be the first time that the City would have a space on Fourth Street that would be acceptable to a number of good retailers, and he believed this could be a real opportunity. He noted this was the first time such a large amount of space and parking has been available, and this was exactly what the big retailers were looking for, so that the space can be configured into the sizes and shapes that they want and need. Therefore, he felt that the Agency should be very active on this issue, as this was a real opportunity. Member Phillips asked what the vacancy factor would rise to if this building were to be sold? Mr. Ours stated the building was approximately 50, 000 square feet, which would bring the vacancy rate to roughly 100. Member Cohen stated he agreed that this is a great opportunity, and may have been wasted potential for a while now. He felt that where the Agency should weigh its role, in terms of that particular building, and also in terms of evaluating other opportunities to play a role in what happens downtown, was in encouraging retail. He noted there is a lot of restaurant activity, and while this was good and there was nothing wrong with that, he would like to see some balance between new restaurants coming in and other businesses. He stated he would really like to see the City go out and try to attract some retail that will bring back what Macy's used to be, noting that when Macy's was still selling clothing at that location, the store was a real draw. Member Zappetini noted that the Macy's Linens building was 12,000 square feet that has been vacant for twenty-four months, and asked how effective the Redevelopment Agency could be in working with the owner of the building to reduce his anticipated rents in exchange for the Agency assisting in finding tenants for the building? Mr. Ours stated that as far as subsidizing rents, the Agency has always stayed away from such a situation, although development agreements could be considered which would allow property write-downs without any cash being put out. Mr. Ours reported the Agency had, in the past, been approached by automobile dealers requesting the City to lower the amount of sales tax they were charged in exchange for building an automobile agency within the City, but noted those deals usually turn sour, and subsidizing private industry is a very touchy area, and one the City has never gotten involved in. Member Zappetini asked if it would be worthwhile to look into such a possibility if a major tenant were involved? Mr. Ours reported that with a space like the Macy's building, the City has not even been able to attract major tenants because they want to tear the whole thing down, noting they do not want the mezzanine space, the wood floors, and many of the particular aspects of that space, and in this case, the problem with attracting a major tenant is the building itself. Chairman Boro reiterated the need to speak to the real estate brokers in the downtown area and ask them to modify their signs once a building has been leased, stating he felt that would be very helpful. He also felt that the way the City can overcome the misperception is that if we have a good story to tell, we tell the good story, because he felt we certainly had one. SRRA MINUTES (Regular) 11/6/95 Page 5 SRRA MINUTES (Regular) 11/6/95 Page 6 6. AGENCY MEMBER REPORTS None There being no further business, the meeting was adjourned at 7:55 PM. JEANNE M. LEONCINI, AGENCY SECRETARY SRRA MINUTES (Regular) 11/6/95 Page 6