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HomeMy WebLinkAboutRA Minutes 1995-09-18SRRA MINUTES (Regular) 9/18/95 Page 1 IN THE COUNCIL CHAMBER OF THE CITY OF SAN RAFAEL, MONDAY, SEPTEMBER 18, 1995, AT 8:15 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, Assistant Executive Director Eric Davis, Assistant Agency Attorney Jeanne M. Leoncini, Agency Secretary ORAL COMMUNICATIONS OF AN URGENCY NATURE 7:30 PM None. CONSENT CALENDAR Member Zappetini moved and Member Cohen seconded, to approve the recommended action on the following Consent Calendar items: ITEM RECOMMENDED ACTION 1. Approval of Minutes of Regular and Special Approved as submitted. Joint Meetings of September 5, 1995 (AS) 2. Unapproved Minutes of Citizens Advisory Accepted report. Committee Meeting of September 7, 1995 (RA) - File R-140 IV B 3. Report on Salary Rate for Acting Accepted report, setting rate Executive Director (Per) effective 10/1/95, @ 150 - File R-58 above current salary during the term of this Acting appointment, from $6,652.46 per month to $7,650.33 per month. AYES: MEMBERS: Cohen, Heller, Phillips, Zappetini & Chairman Boro NOES: MEMBERS: None ABSENT: MEMBERS: None AGENCY CONSIDERATION 4. STATUS REPORT ON RAFAEL THEATER AND APPROVAL OF SALE CLOSING SCHEDULE AND FINANCIAL SUPPORT (RA) - File R-324 SRRA MINUTES (Regular) 9/18/95 Page 1 SRRA MINUTES (Regular) 9/18/95 Page 2 Assistant Executive Director Jake Ours distributed a timeline for the Rafael Film Center, and reported the project was currently on schedule. He stated that in October, after the Planning Commission approvals and the closing of the sale, the City would begin removing artifacts from the theater. Mr. Ours stated the start of the project was very close, noting the reopening of the theater is scheduled in September, 1997. Mr. Ours reported the Agency and the City had been working on a number of issues, noting we had subdivided the property so that it could be sold, relocated the current tenants, and had been working with the Film Institute during the approval process. He reported approvals have already been given by the Design Review Board, Cultural Affairs Commission, Agency Citizens Advisory Committee, Vision Committee, and Marin Heritage. Mr. Ours stated that on September 26th the Film Institute will go before the Planning Commission, and should the Planning Commission give approval at that time, the recommended schedule will be on time as far as closing on the 5th ofOctober. He noted if the Planning Commission does not give approval on September 26th, the schedule will need to be revised. Mr. Ours stated that while working with the Film Institute, the Agency had found that its D & D (Disposition and Development Agreement) was too restrictive for the Institute's fund raising purposes. He noted that in the past the Agency had done D & D's only with commercial developers, and had never done one for a non-profit group. Mr. Ours stated many of the people who fund non-profit groups insist that the group have title to the real estate. He explained the Agency had not taken this into consideration, as they were unaware of the stipulation, noting this was something the Agency would like to correct by conveying title to the Film Institute, thereby allowing them to explore a variety of possible new funding sources who have already expressed an interest. Mr. Ours stated these were the main reasons for the recommended changes to the D & D, to allow for the City approvals to be extended and the closing of the sale to occur at an earlier date. Chairman Boro stated it was his understanding that if there is a problem at the Planning Commission on September 26th, then all bets were off. Mr. Ours responded that was correct, stating these were the submissions for construction documents and other ongoing documents that must be submitted to the City, and noting the Agency is allowing the closing prior to the documents being submitted. Mr. Ours stated the Agency's intention was to improve the financial ability of the Film Institute. Mr. Ours reported that while going through the detailed estimates, the Agency had discovered that construction costs had risen, and although it had been the Agency's goal to make sure the entire operation of the Film Institute was located in Downtown San Rafael, it appeared as though they might not have enough money at this time to build the entire office complex on the third floor of the theater. Mr. Ours stated the Agency suggested the City might be in a position to grant the Film Institute a loan when the construction documents are submitted, to allow the entire project to be built. Mr. Ours stated the Agency was recommending conceptual approval of the loan, so that if it is needed at the time of construction, the Agency could come before the City Council for approval. Mr. Ours reiterated the loan would only be made to ensure the entire facility was built as originally envisioned. Member Phillips asked if the proposed $200,000 loan would be granted only at SRRA MINUTES (Regular) 9/18/95 Page 2 SRRA MINUTES (Regular) 9/18/95 Page 3 the end of the project to ensure completion? Mr. Ours stated that was correct. Mr. Phillips noted the terms and conditions of the loan indicated "no interest", and no due date. Mr. Ours explained those specifics would be included in a complete loan package, which would be presented to the Agency for approval if a loan should become necessary. Mr. Phillips asked if Mr. Ours' indication of "no interest" was a "place holder", or an actual term and condition if a loan is needed? Mr. Ours responded there would be no interest due on the note, and it would also be subordinate to other loans from the commercial banks and from the Buck Fund. Mr. Phillips asked if the City was going to wait until the project was closer to the point that a loan might actually be needed, perhaps it would be prudent for the City to delay defining the terms and conditions relating to interest, as it was possible the Film Institute may be in a position to pay the City interest at that time. Mr. Ours stated that condition could remain open if the Agency requested, noting the "no interest" term did not have to be decided at this time, although it had been incorporated into the Resolution presented to the agency. Member Phillips referred to the Statement of Projected Annual Theater Operations for a ten year period, and stated he was unsure as to how the Agency was to scrutinize this information and incorporate it into their decision to approve the Resolution. Mr. Ours responded the statement was intended to show there was a positive cash flow from the theater's operations, and noted this was based on an extremely conservative seat count. He explained the statement was based on 15.4% of the seats being sold during the first year, noting that even with such a low estimate, the theater still projected a $76,000 profit. Mr. Ours stated this projection had been prepared so the financial institutions who loan money based on pro forma would see that this project would be a money making operation. Member Zappetini asked how the Agency had arrived at a figure of $200,000 as a possible loan amount, noting if the project was expected to cost $5.2 million, $200, 000 did not seem to be a very significant amount. Mr. Ours reported the original request was for a $500,000 loan amount. He explained the City negotiated the $200,000 amount, which the Film Institute felt would be enough to ensure the build -out of the project as they envisioned it. Mr. Zappetini asked if Mr. Ours felt, after reviewing the pro forma and seeing their statement, that the projection of prices would be sound in two years? Mr. Ours responded the figures and estimates were very conservative. He felt this would be a very successful project, and there would be no problem with the City being repaid. Mr. Zappetini repeated his concern that the amount of the loan was too small, and wondered if it would be enough money. Chairman Boro asked Mr. Ours if he was comfortable with the amount, and Mr. Ours responded that he was very comfortable with it, and felt the deal, as presented, would ensure the project was delivered as promised. Mr. Zappetini asked what would happen if, at the end of two years, the project was not finished and $200,000 was not enough for completion? Would the City have to renegotiate? Mr. Ours stated it was his hope this would not happen. Mr. Zappetini asked if the Agency was simply being asked to approve this recommendation "in concept", and Mr. Ours stated that was correct. Member Heller referred to the statement, "Once the property belongs to the Film Institute, additional grants will become available to them". She asked if the Agency could be updated as additional grant funds are requested. Mr. Ours directed this question to Ann Brebner of the San Rafael Theater SRRA MINUTES (Regular) 9/18/95 Page 3 Ann SRRA MINUTES (Regular) 9/18/95 Page 4 Project. Brebner, Chair of the San Rafael Theater Project for the Film Institute of Northern California addressed the Agency, reporting there are a number of foundations that lend completion money for major projects, but they will not even entertain a request unless the group making the request owns the property. She stated the Film Institute had been told a number of times to re -submit a grant request as soon as they owned the property. She noted they had five applications prepared for submission to various foundations, but none of them could be submitted until the Film Institute owns the property. Ms. Brebner stated twelve more requests for foundation grants had been sent to foundations that do consider granting funds prior to ownership, but noted these foundations are usually swayed by the solidity of the fact that the property is owned. Member Heller restated her desire for an ongoing report of requests made for grants and funds received. Ms. Brebner responded she would consistently update and report all requests made for grants, beginning with the twelve requests that have already been submitted for consideration and the five that are being prepared. Ms. Brebner stated the Film Institute was in constant research of other foundations that may be interested, and noted that from time to time the foundations change what they give, and that she continues to study the latest information regarding the types of requests the different foundations might entertain. Chairman Boro stated he assumed that in lieu of interest there could be some type of "in kind" arrangement or availability of the Center made for the benefit of the City. He asked if this might be expanded upon in lieu of interest, perhaps as an opportunity at the site that would benefit one of the City's other cultural facilities. Ms. Brebner felt this would be a very workable concept. Member Phillips suggested perhaps the reference to a no interest loan should be deleted and replaced with a statement that terms and conditions would be determined at the time of the loan. He felt it would be better not to specify those conditions, but to leave them blank while intentionally recognizing that the Agency would be in a better position to make that decision at a later date. Ms. Brebner stated she hoped a loan would not be needed at all. She reported that one of the issues that has impacted this project and caused them to consider asking for the loan was the cost of reinforcing the dome of the rotunda and building the offices above it, which turned out to be very expensive. This portion of the project cost $200,000 more than they had estimated. Member Phillips stated he was delighted with the effort that has gone into this project, but felt there was a significant gap between where we are and what we need, with $5.2 million needed and $1.5 million in funds at this time. He asked what would happen if this gap could not be closed significantly enough to bring this project to operation? He also asked what would happen to the property if it had been deeded to the Film Institute? Ms. Brebner responded that in the course of working with the City, the Building Department and the Redevelopment Agency, they had prepared six separate versions of this project, which include an alternative for a one theater plan, which does not show a profit and would not succeed, and various other versions which involve building two SRRA MINUTES (Regular) 9/18/95 Page 4 SRRA MINUTES (Regular) 9/18/95 Page 5 theaters, the offices, and the shell of the third theater, which would be used as a meeting area until they were ready to equip it. Ms. Brebner stated that at this point they did not want to think beyond their first option, and have made the decision that it would actually be cheaper in the long run to scale down, particularly in the work and drawing phase, than it would be to suddenly try to upgrade. She felt this would waste a lot of money. She explained this was why they were going ahead with their first option, and noted if they have to scale down they will, and then complete the project at a later date. Ms. Brebner stated the budget contained at least $900,000 for equipment, probably more, and noted they did not have to spend $900,000 to open the theaters. She stated there were several ways they could scale down the cost of the project, including purchasing reconditioned equipment, if necessary. Mr. Phillips, noting the $200, 000 figure was arrived at under the assumption of proceeding with the first plan, asked if the City would still make the $200,000 available if they went forward with a contingent or fallback plan? Ms. Brebner stated it was her understanding this money would be made available only to complete the office complex, and Mr. Ours concurred the funds would be made available only if the full project were being completed. Mr. Ours noted the ultimate fallback position was, in fact, the real estate itself, which would revert to the City should the project fall apart. Member Cohen moved and Member Phillips seconded, to approve the staff recommendation to accept the status report and adopt a Resolution approving the sale closing schedule and financial support for this project, with a modification changing the reference to 0% interest to read "Terms to be discussed at the time, should the loan become necessary". RESOLUTION NO. 95-28 - RESOLUTION AUTHORIZING THE FOLLOWING SALE CLOSING SCHEDULE IN THE RAFAEL THEATER DISPOSITION AND DEVELOPMENT AGREEMENT AND APPROVING FINANCIAL SUPPORT (As amended, to remove last sentence on 2nd page of Resolution..."Said loan would be at no interest and would be subordinate to other loans." - adding "Terms to be discussed at the time, should the loan become necessary.") AYES: MEMBERS: Cohen, Heller, Phillips, Zappetini & Chairman Boro NOES: MEMBERS: None ABSENT: MEMBERS: None 5. AGENCY MEMBERS REPORTS None There being no further business, the meeting was adjourned at 8:30 PM. JEANNE M. LEONCINI, Agency Secretary SRRA MINUTES (Regular) 9/18/95 Page 5 SRRA MINUTES (Regular) 7/17/95 Page 6 SRRA MINUTES (Regular) 7/17/95 Page 6